Sustainability
Report2021

UD Trucks Corporation

UD Trucks at a Glance

For 85 years, UD Trucks has provided the trucks andtransportation solutions the world needs today,
forever challenging and innovating for a better tomorrow.

15,458

Sales and servicing in63

truckssold globally in 2020

countries

UD Trucks’ extensive network of dealers offers sales and servicing in
63 countries. In Japan, the Company provides 24-hour, 365-day support
to commercial vehicle operators and drivers, including a telematics
service connecting more than 60,000 trucks.

UD Trucks sold 15,458 trucks in 2020, meeting a wide range of local
transport needs with its diverse lineup of truck models. Japan is thelargest market for UD Trucks.
Number of trucks sold globally

15

MiddleEast

120.7 20.6 20.6 19.9
15.5

9

Central andSouth America

17

Africa18

Oceania

North
America

1.6%

0.2%

Africaand
Oceania

Asia

80.4%

2016 2017 2018 2019 2020165

customercenters andindependent dealers in Japanyearsof history

South
America

17.8%

3

86

Sales breakdown by region(Thousands)

Asia

North
America

Diverse workforce of

6,127

employees(Including consultants and temporary employees)

Founded in 1935 as a diesel engine
manufacturer, UD Trucks has always been achallenger at heart, responding to the needs ofcustomers and of the times.

The Company’s nationwide network of customer
centers and dealers provides genuine parts andservicing to keep customers’ trucks running andmaximizing uptime.

With employees from 29 countries based inJapan alone, UD Trucks recognizes that
promoting a diverse workplace in which all
employees can make the most of their abilities
will lead to its continued success.
Note: Within Japan. Figures as of December 31, 2020.

From left, a Kazet light-duty truck, Condor medium-duty truck, Quon heavy-duty truck, Quester heavy-duty
truck designed for emerging countries, Croner medium-duty truck, and Kuzer light-duty truck1

Message from the President

Progress towards making life betterfor people and the planet
initiatives, respectively. The committee provides
direction and monitors progress towards oursustainability goals.
UD Trucks joined the Isuzu Group in April 2021,
as part of a strategic alliance between Isuzu Motors
and Volvo Group. Together with Isuzu Group, UD
Trucks will expand and strengthen its sustainability
initiatives. We look forward to the continued supportof all stakeholders as we work to make life better for
people and the planet.

The COVID-19 pandemic has continued to take aheavy toll on individuals and society at large. In these
difficult times, the transportation of goods that werely on every day has kept society and the economy
moving. It is humbling to know that UD Trucks is ina position to support logistics when people need it
the most.
Beyond the pandemic, the world is facing
unprecedented environmental and social
challenges - from climate change and resource
depletion to widening economic disparities. It is
more important than ever for us to face thesechallenges head on and embrace frameworks thatlead to responsible solutions, such as the UN
Sustainable Development Goals.
UD Trucks is committed to making life better
through sustainable transport solutions. This is our
purpose, and we call it Better Life. We have theambitious goal to become the sustainability leader
among Japanese commercial vehicle manufacturers.
We will do this by pursuing initiatives that are betterfor logistics, the planet, people, and our business.
We have established a new Sustainability Committee
comprised of members from three groups in chargeof environmental, social, and governance (ESG)

Takamitsu Sakamaki
President andRepresentative Director
UD Trucks Corporation

About this report
UD Trucks publishes a sustainability report every year for the
purpose of providing stakeholders with information about its
environmental, social and governance initiatives.

Contents

Scope of the report
This report covers the activities of UD Trucks Corporation
primarily in Japan. Some sections also cover our activities inother countries.

UD Trucks at a Glance

1

Message from the President

2

Our Purpose

3

Sustainability Activities• Better for Logistics• Better for the Planet• Better for People• Better for Business

Reporting period
This report mainly covers results and activities in fiscal 2020
(January 1 to December 31, 2020). Some sections also refer toresults and activities in previous fiscal years, activities in fiscal
2021, and future plans and forecasts.

About UD Trucks Corporation

Published December 2021

2

6
17
28
36
43

Our Purpose

PurposeBetter Life
Better Life is our purpose, the reason why we exist. Providing the trucks and services thatthe world needs today, we are committed to Better Life—to make life better for people andthe planet through sustainable transport solutions

Our desired position by 2025

The leader in sustainability among Japanese commercial truck manufacturers

Leadership in sustainability across four areas
Better for Logistics:
Pursuing smarter logistics toovercome challenges facing
the industry

Better for the Planet:

Better for People:

Better for Business:

Reducing emissions
and waste

Creating better workplaces,
supporting communities

Building a foundation
for sustainable growth

For over 80 years, UD Trucks has been providing the trucks and services the world needs today.
Now the logistics industry is facing an array of challenges, from a shortage of truck drivers and higher demandfor deliveries driven by the growth in e-commerce, to environmental impacts such as climate change andresource depletion.
To overcome these many challenges, innovation and collaboration are essential for making the world abetter place. We are committed to making life better - for people and the planet. This is our purpose, and we callit Better Life.
Guided by our Better Life purpose, we aspire to be the leader in sustainability among Japanese commercial
truck manufactures by 2025.

By working to make life better for
people and the planet, UD Trucks
recognizes the importance ofhelping achieve the UN Sustainable
Development Goals, which wereadopted by the United Nations
General Assembly in 2015.

3

Our Purpose

Leadership in sustainability across four areas
Better for Logistics:
Pursuing smarter logistics to overcome challenges facing our industry
Globally, the logistics industry is facing various challenges,
including a shortage of drivers, increasingly strict
regulations and ensuring safer roads. Moreover, thegrowing e-commerce sector coupled with intensecompetition is putting pressure on logistics firms to cut
costs and improve efficiency.
UD Trucks is meeting these challenges head on bystaying at the forefront of innovation that helps improvevehicle efficiency, reduce environmental impacts andmaximize driver comfort. To become a leader in sustainability,
UD Trucks continues to develop next-generation
technologies in the fields of connectivity, electromobility, andautonomous driving. At the same time offering solutions topartners and customers to enhance their business.
For more details, please refer to page 6.

Better for the Planet: Reducing emissions and waste
Climate change and resource depletion are some of themost pressing environmental issues facing us today. UD
Trucks, together with the logistics industry as a whole,can be part of the solution to greatly minimize
environmental impacts.
UD Trucks is taking steps to significantly reduce CO2
emissions and eliminate waste across its operations.
Accordingly, the company is exploring the use renewableenergy and reducing the CO2 footprint of its products andsites, while collaborating with suppliers to reduce
environmental impacts across the entire value chain.
For more details, please refer to page 17.

4Our Purpose

Better for People: Creating better workplaces, supporting communities
People and communities are a core part of oursustainability strategy. UD Trucks continues to improve thewell-being of its employees, fostering a workplace culturethat values diversity, personal development and a strong
work-life balance. All employees are encouraged to makethe most of their abilities and given the opportunity togrow professionally.
In addition, UD Trucks works closely with communities,
focusing on road traffic safety seminars for local schools,
disaster relief and other community outreach initiatives.
For more details, please refer to page 28.

Better for Business: Building a foundation for sustainable growthPursuing a sustainability strategy that is Better for Logistics,
Better for the Planet and Better for People helps secure thefourth area of sustainability: Better for Business. In shortperformance and profitability.
UD Trucks will invest profits back into its businesses,
laying a path for the company to grow to benefit all
stakeholders.
For more details, please refer to page 36.

Customers

Engaging with Stakeholders
For UD Trucks to be a sustainability leader among Japanese commercial
truck manufacturers, close communication with all stakeholders is essential,
including customers, business partners, and employees. The Company
creates opportunities to engage with stakeholders and reflects their views
in its management policies, business activities, and environmental, social,and governance (ESG) initiatives.

5

Business
partners

Employees

UD Trucks
Industryorganizations

Communities

Regulatory
bodiesSustainability Activities

Better for Logistics

UD Trucks deploys innovative in-vehicle systems to provide trucks thatmaximize driver comfort and driving efficiency while also helping to
reduce environmental impacts. Working in partnership with truck drivers
and logistics firms, the Company devises comprehensive solutions acrossthe entire value chain. By developing next-generation technologies in thefields of connectivity, electromobility, and autonomous driving, UD Trucks
is working to make logistics smarter and more environmentally sustainable.

6Enhancing comfort and safety for drivers

UD Active Steering system developed for heavy-duty trucks

The UD Active Steering system made it possible for a heavy-duty Quon to create the world’s largest kanji (Japanese character) drawn by a truck.
More information available here: https://www.udtrucks.com/news-and-stories/press-releases/20210702-giant-masterpiece

Japan is currently facing a shortage of truck drivers, mainly because this job can bephysically demanding and often involves long hours. Drivers spend most of theirworking days inside a truck cab, so enhancing drivability is crucial.
With this in mind, UD Trucks developed UD Active Steering to help reduce driver
fatigue and make roads safer. It is available on heavy-duty Quon models in Japan. UD
Active Steering is designed to improve steering precision under all kinds of driving
conditions. Steering is assisted by an electric motor installed over conventional
hydraulic steering gears. Attached to the motor is an electronic control unit thatmonitors the vehicle direction and driver’s actions based on vehicle movements
detected by numerous sensors. The system makes it easier to turn the steering wheel
at low speeds, stabilizes steering at high speeds, and maintains stable steering
regardless of the truck’s payload, road conditions, and cross winds.
By developing advanced technologies like UD Active Steering, the Company isworking to overcome challenges facing the logistics industry and maximize driver comfort.

7

Electronic control unit

Hydraulic power
steering unit

Five benefits of UD Active Steering
1. Low Speed Agility
When turning at low speeds and reversing in tight spaces, additional steering
torque automatically feeds into the system to allow the driver to maneuver with alight touch.

2. High Speed Stability
When driving at higher speeds, the weight of the steering wheel adjusts to provide
superior stability.

3. Rough Road Dampening
Active Steering dampens vibrations on rough roads. Minute directional adjustments
keeps the driver on a course.

4. Cross Wind Correction
Active Steering virtually eliminates the steering corrections needed in crosswinds,
keeping the driver on a straight course.

5. Return to Center
Whether turning at an intersection or reversing, the steering wheel will return tocenter when released, saving driving effort and bringing the vehicle into a straightline quickly and easily.

Tests show reduced driving fatigue
UD Trucks has used electroencephalographs and electromyograms to measure thefatigue of subjects driving trucks equipped with and without UD Active Steering. The
test results showed that when using UD Active Steering, subjects had lower levels ofstress and did not require excessive levels of concentration. They also recorded lower
levels of arm muscle exertion when steering, especially when parking and driving inbumpy and uneven areas.
Stress level when driving with orwithout UD Active Steering

Muscle exertion when driving with orwithout UD Active Steering

62.2

0.05

62.125

61.75
61.8
61.6
61.4

Measurement*2

Measurement*1

62.0

0.04

0.04725

0.04475

0.045

0.0365

0.03
0.02
0.01
0.00

Without

With*1 Stress was measured using
an electroencephalograph

Without With
Extensor muscle

Without With
Flexor muscle*2 Muscle exertion was measured using
an electromyogram

8

Details of the test results are available online:
https://www.udtrucks.com/news-and-stories/pre
ss-releases/20210701-ud-active-steeringMeet the engineers responsible for developing UD Active Steering
Developing trucks that are easier to operate for all drivers
When developing UD Active Steering, we started by discussing what kind of steering
performance was needed by heavy-duty truck drivers. Based on opinions fromnumerous drivers as well as various questionnaire results, we found that new or
inexperienced drivers expected heavy-duty trucks to be as easy to steer as passenger
vehicles. This reflects the major advances made in the drivability of heavy-duty trucks inrecent years, especially our Quon models. We believe that reducing fatigue and stressfrom driving and providing a comfortable driving environment will be welcomed not
only by younger and less experienced drivers but all kinds of drivers, including womenand the elderly. We will continue to gather feedback from our customers to develop
vehicles for the next generation of drivers.

Hideyuki Koshikawa
Engineer, Vehicle
Assessment Department,
Product Development
Division

UD Active Steering will revolutionize truck driving for the betterIn the past, truck drivers had to adapt to and master the techniques required to steer
and operate heavy-duty trucks. They can take pride in those skills as professionals, but
their needs have become more diverse and demanding as trucks have evolved. Many
drivers now expect the same level of drivability as passenger vehicles. In response tothat, we integrated automatic control into UD Active Steering to make steering easierat low speeds and more stable at high speeds. We also reduced the play of the steering
wheel, making the driving experience similar to that of a passenger vehicle. It is no
exaggeration to say that UD Active Steering will fundamentally improve the drivabilityof heavy-duty trucks. Our development team aimed to optimize the steering
performance of heavy-duty trucks for all driving scenarios. I think the development of
UD Active Steering has brought us much closer to the day when inexperienced drivers
can confidently drive a heavy-duty truck from day one.

Kazunori Nagata
Engineer, Vehicle
Assessment Department,
Product Development
Division

Developing safer and more comfortable heavy-duty trucks will help
address the shortage of drivers
UD Active Steering not only adjusts the firmness of the steering wheel to suit thevehicle speed, but also detects the driver’s subtle movements to optimize steering
performance. Furthermore, it corrects the steering to keep the vehicle straight and oncourse, even when the driver is not consciously moving the steering wheel. Whether
they realize it or not, drivers experience fatigue when steering on rough or ruttedroads, which can result in eye strain and stiff shoulders. The steering correction feature
alleviates this mental and physical fatigue. The development of safer and more
comfortable heavy-duty trucks will encourage more people to enter the truck driving
profession, helping address the current shortage of drivers.

9

Takuya Takagiwa
Engineer, Vehicle Design
Department, ProductDevelopment DivisionParticipation in truck platooning project
Since 2017, UD Trucks has been participating in a government-led project to conduct
tests of truck platooning on expressways in Japan, together with four of the country’s
major automakers. Platooning is a method of syncing multiple trucks together in a
convoy using connective driving systems. The participating automakers form a special
committee in the Japan Automobile Manufacturers Association (JAMA) tasked withpromoting industry and government projects to develop truck platooning in order toboost logistics efficiency and improve working conditions for truck drivers. The four
companies are developing connective systems at the testing stage to enable
platooning by different types of trucks and operated by different logistics companies.
To maintain safe platooning of trucks made by different manufacturers, these systems
must ensure that the trucks can accelerate and brake smoothly in tandem with thetruck at the head of the convoy.
As a member of the project and JAMA, UD Trucks is helping develop theseconnective technologies and, based on the test results, produce a feasible platooning
system for manned trucks. The Company has also been advising the government on
automated driving technologies, necessary infrastructure for improving road safety,
and ways of dealing with the country’s truck driver shortage.

10

Reducing environmental impacts

Downsizing truck engines to reduce environmental impacts

UD Trucks started shifting to smaller engines in January 2019, when it equipped its
Quon heavy-duty cargo, dump, and cement-mixer trucks with its GH8 8-liter engine.
The Company also added the GH8 engine to its Quon tanker truck in December
2020. Compared with conventional 11-liter engines, this lighter and smaller 8-litre
engine requires less fuel and emits less exhaust gases while allowing users tosignificantly increase payload capacity. The GH8 complies with Japan’s exhaust gas
regulations set in 2016, and its fuel efficiency is about 5% higher than standards forheavy-duty vehicles in Japan.
UD Trucks has been modifying the engine to suit a wider variety of vehicles tomeet the diverse needs of customers.

Key features of 8-liter engine Quon trucks• Greater payload capacity
More payload is possible because the truck’s chassis is about 300 kilograms lighter
than 11-liter engine trucks.
• Productive and comfortable driving
The 8-liter engine combined with the Company’s ESCOT-VI electronically controlled
automatic transmission ensures smooth and low-stress driving while providing
enough horsepower and torque for heavy payloads.
• Advanced safety equipment
The disc brakes are designed to ensure stable braking on long descents and whendriving in adverse conditions. The trucks also come with Traffic Eye Brake, a system
for automatically braking before a collision, and Driver Alert Support, which detects
steering irregularities.

11

Improving operational efficiency for customers
Deploying vehicle telematic data to minimize vehicle downtime
Trucks are used for over 90% of all goods transported inside Japan on a tonnage
basis. From that perspective, society depends on UD Trucks to help its customers keep
their trucks up and running.
Among its efforts to do so, the Company deploys its original UD Information
Service to facilitate the safe operations of its trucks used by customers. This service
automatically transmits data on the status of the vehicle and engine condition, fuelconsumption, and vehicle location to a multipurpose display installed inside the truck’s
cab. The Company collects and analyzes this data in real time, and remotely provides
users with vehicle diagnostic results to help them operate their trucks safely. In theevent of a breakdown, UD Trucks uses the service to quickly determine the truck’s
condition, inform the driver of the nearest dealer, and arrange to have the necessary
parts ready at the dealer in advance, thereby minimizing vehicle downtime. In
addition, the service provides users with a fuel efficiency report, helping promote
more fuel efficient driving.

UD Road Support
A one-stop service for customers provided by the Company’s call centers, the UD Road
Support team is available 24 hours per day, every day of the year, to immediately
respond to enquiries and requests from truck drivers. If a truck breaks down on theroad or has an accident, UD Road Support checks the vehicle’s condition using datatransmitted in real time via UD Information Service, and shares the information withmechanics handling the repairs.
If repairs are needed or unexpected problems occur on the road, mechanics fromthe nearest dealer are promptly dispatched to the vehicle. At any time, truck drivers
can contact UD Road Support to have a mechanic come to their location and request
any information they need, such as the estimated time of arrival of mechanics.

12

Reliable snowplows keep society moving in Japan’s snow country
In areas of Japan that experience cold, snowy winters, snow removal is essential for
logistics, travel, and people’s livelihoods. As the country’s sole manufacturer of
all-wheel snowplows, UD Trucks develops new models and provides maintenance andservicing to ensure its snowplows can operate dependably. This allows delivery andtravel facilities to continue operating throughout the winter.
For example, 37 snowplows made by UD Trucks are stationed at Aomori Airport in
the northern part of Japan, where snowfall often exceeds 10 meters annually. When
more than three centimeters of snow accumulates on the premises, these vehicles areused by the snow removal crew to clear the runways within about 40 minutes. The
airport, which averages 40 flights per day, has maintained a record of zero flightcancellations due to snowfall for several years, contributing to the steady flow ofpeople and goods in the region.

Masao Takahashi
Head of the UD Trucks Aomori Customer Center

Snowplows are used more and more as the weather gets colder, so to maintain thesevehicles, we need to prepare them for cold weather conditions and thoroughly inspectthem in the off-season. Due to the big difference between the temperatures outside
and inside the cab, windshields tend to fog up and inhibit visibility, so we make surethe heaters work properly in routine inspections. If a snowplow breaks down, we act
quickly to remedy the problem, even at night or during heavy snowfall. We repair thevehicle as quickly as possible so that it can be used by the next outgoing crew, and if
our customer center does not have a needed part in stock, we quickly obtain it from anearby center in the area. By making sure the snowplows can operate dependably, we
aim to help keep the airport open and traffic moving, throughout the winter.

Video showing how snowplows support logistics in Japan’s snow country:
https://www.youtube.com/watch?v=KRs9MEoOY9w

Quality
ISO 9001 certification acquired
UD Trucks complies with the ISO 9001 international standard for quality management
systems. The Company’s Manufacturing Division acquired ISO 9001 certification in
2002, followed by the Product Development Division in 2016. UD Trucks also applies
a plan-do-check-act (PDCA) cycle to continuously raise quality in accordance withthe standards.

13

Measures for promptly dealing with quality-related issues
To minimize the impact of quality-related issues for customers, UD Trucks has
established a Quality Action Group spanning across departments involved in productdevelopment, manufacturing, and aftermarket services. The group is comprised ofteams that handle troubleshooting at headquarters, teams that provide technicalsupport at dealers and customers’ sites, and branch office teams that directly respondto problems in their respective areas. These teams coordinate their efforts to quickly
identify root causes and implement solutions.
Through this arrangement, they promptly share quality-related information andrespond to issues, ultimately leading to greater customer satisfaction.

Product development quality standards
UD Truck’s Product Development Division has established its own standards for quality
assessments. Based on these standards, the division specifies checkpoints at eachstage of product development and confirms whether targeted levels of quality areachieved across a broad range of indicators, including a truck’s performance,
functions, durability, and reliability. This process not only ensures higher quality but
also shortens the total time required for product development.
Recognizing the growing importance of promptly and efficiently obtaining
information relevant for quality control, UD Trucks has been using wearable cameras
and utilizing various other digital devices to collect maintenance and repair data on
vehicles with defects. The Company has also begun using business intelligence tools
to digitize analytical processes, enabling it to more effectively identify quality issues.

Quality assurance in manufacturing
Based on UD Truck’s own quality management procedures, the Manufacturing
Division conducts daily inspections of procured parts and manufactured items tocheck for quality defects throughout the production process and ensure targeted
levels of quality. Refined through continuous improvement over several years, thesequality management procedures have been adopted by all UD Trucks production
plants worldwide.
In recent years, the Company has begun deploying digital tools for equipment
inspections that were previously performed manually. With these tools, facilities aremonitored in real time and risks of breakdowns and malfunctions are assessed andanalyzed in advance. Preventative maintenance and repairs are also carried out whennecessary. As part of its preventative quality control practices, the Company has been
improving the traceability of parts at both the manufacturing and transport stages.

14

Improving the skills of aftermarket service teams
UD Trucks works to raise the quality of its aftermarket services by organizing events
that enhance the skills of maintenance and repair personnel. In 2020, however, due tothe COVID-19 pandemic, skills-training and other events could not be held on thesame scale as previous years, so online meeting systems were used in their place.
For example, the Company’s annual Uptime Conference, an event for providing its
dealer network with technical support and quality-related information about new
products, was held online for the first time since it was initiated in 2013. With the head
office and dealers nationwide connected remotely, best practices were shared anddiscussions were held not only among staff on the front lines, but also members fromdivisions in charge of product development, manufacturing, procurement, and logistics.

Recalls and servicing of defects
In the event of a vehicle defect that could potentially affect customer safety or theenvironment, UD Trucks promptly discloses all relevant information in accordance withguidelines issued by Japan’s Ministry of Land, Infrastructure, Transport and Tourism.

Number of vehicle defects reported in Japan
2018

2019

2020

UD
TrucksVolvo
TrucksUD
TrucksVolvo
TrucksUD
TrucksVolvo
TrucksDefects
resulting inrecall

9

1

10

5

8

1

Defects
requiring
improvement

1

0

0

0

0

0

Defects
requiring
servicing

7

3

3

2

0

1

Supporting our customers
Online test drive events
To create opportunities for people to experience the benefits offered by its vehicles,
UD Trucks has been holding test drive events at test tracks throughout Japan. Due tothe outbreak of COVID-19, however, the Company held an online test drive in
November 2020, making it Japan’s first commercial vehicle manufacturer to hold suchan event.
To conduct the test ride remotely, multiple video cameras were installed in the cabof a Quon model heavy-duty truck to capture the driver’s movements in detail, and avideo taken by a drone overhead recorded the truck in motion. These videos wereexplained in detail by personnel involved in product development and combined withscenes of effective braking methods for reducing damage during a collision, thereby
offering the experience of an actual event online. About 600 people in total joined
three live-streamed events lasting about 90 minutes each.

15

Eco-driving and safe-driving seminars
UD Trucks has been holding eco-driving and safe-driving seminars for truck drivers
since 2007.
The eco-driving seminars are designed to equip drivers with practical skills andknowledge about how to improve fuel efficiency while driving. During the seminars,
truck drivers learn and practice special fuel-saving techniques for maneuvering anddecelerating. The seminars also make use of UD Information Service, a wirelesscommunications system for collecting and analyzing data on a truck’s location andmovements, enabling evaluations of vehicle speed, gear changing, and otherdriving-related factors. Participants have found this to be very insightful and helpful
for understanding their driving habits and making improvements accordingly.
The safe-driving seminars cover a broad range of topics, including safe management
systems for transport operators, the dangers of driving under the influence of alcohol,
blind spots, preventing common accidents, defensive driving, and reducing human error.
The programs combine lectures with hands-on training so that drivers can immediately
acquire practical skills. Videos of actual accidents taken with drive recorders are also
used to give participants a better sense of how accidents happen.
In 2020, both the eco-driving and safe-driving seminars were held online as theCompany restricted group discussions and events in order to prevent the spread of
COVID-19. Consequently, the number of participants decreased year on year, with
288 drivers participating in 10 eco-driving seminars (compared with 1,119 participants
at 70 locations in 2019) and 2,053 participating in 46 safe-driving seminars (comparedwith 4,261 in 146 seminars in 2019).

Prompt customer service
UD Trucks has established a customer service call center made available with a toll-free
telephone number for customers to ask questions, provide feedback and makerequests. It has also prepared a guidebook explaining responses to all foreseeable
inquiries to help the center’s phone operators effectively deal with customer inquiries.
The center’s procedures and operations are regularly reviewed to ensure that it
continues to provide prompt and helpful customer service. In 2020, the center
handled a total of 3,917 calls compared with 4,004 in 2019.

Partnering with independent dealers
Support for maintenance and repair staff
In addition to its own network of dealers, UD Trucks supplies products and services tocustomers through six companies that operate a total of 32 independent dealerships
in Japan. While respecting the corporate traditions and local business practices of eachof these dealerships, UD Trucks works closely with them towards the common goal of
improving customer satisfaction, and invites them to the same training programs andevents as its own dealers to help their employees acquire more skills and expertise.
For example, 47 maintenance and repair staff from independent dealerships
participated in the Company’s 2020 Uptime Conference (refer to page 15), a training
event for sharing the latest aftermarket service-related information and best practices.

16

Sustainability Activities

Better for the Planet
Reducing emissions and waste

UD Trucks is taking steps to significantly reduce CO2 emissions andeliminate waste. Accordingly, the Company is making use of renewableenergy sources and reducing the CO2 footprint of its products andworkplaces, while collaborating with suppliers to reduce environmental
impacts across the entire value chain.

17

Towards decarbonization

Reducing CO2 emissions across business activities
For many years, UD Trucks has been working to reduce CO2 emissions across all of its
operations. As a former member of the Volvo Group, UD Trucks focused on reducing
energy consumption at its production plants through initiatives and action plans
aimed at achieving CO2 emission reduction targets set by Volvo, which, in 2011,
became the first automobile manufacturer to join Climate Savers, a World Wildlife
Fund (WWF) initiative that brings global corporations together in an effort to reducegreenhouse gas emissions. By 2013, UD Trucks had succeeded in reducing its CO2
emissions by 61.3% compared to1990, well above its target of 39%. Compared withthe result in 2013, the Company further reduced CO2 emissions by 61.8% in 2020,
beating its target of 8% by a wide margin. These achievements resulted from steadyefforts to save energy and cut emissions, as well as higher productivity following theconsolidation of production plants and improvements to manufacturing processes.
UD Trucks is now stepping up efforts to reduce CO2 emissions not only atmanufacturing plants but across all business activities, intending to contribute to theJapanese government’s goal of achieving carbon neutrality by 2050.
As part of these efforts, UD Trucks has been purchasing electricity derived fromrenewable energy sources for some of its workplaces since 2013, and began doing so
for its Ageo Plant in May 2019. In 2020, the Company purchased even more
electricity from renewable sources to replace electricity previously supplied by its
cogeneration power equipment. As a result, the amount of electricity from renewables
increased by 57% year on year, equivalent to a reduction of 1,215 tonnes of CO2
emissions compared with non-renewable sources.
The Ageo Plant has been replacing obsolescent lighting equipment with LED
lighting systems since 2017. The plant installed about 7,000 LED lights by the end of
2020, and removed around 1,400 fluorescent and other old lights following a review
of its lighting layout. Through these measures, CO2 emissions were reduced by 169
tonnes, or 0.7%, compared to 2019.
In addition, the Company replaced three obsolete boilers with new high-efficiency
ones at the end of 2020. These boilers helped reduce energy consumption in 2021.

18

CO2 emissions
Total emissions

Emissions per vehicle(Thousand tonnes of CO2 emissions)(Tonnes of CO2 emissions per vehicle)

150

10

120

8

140

90

Scope of operations
Ageo Plant and the Gunma Parts
Distribution Center

6

60

4

30

2

55

33

0
1990

2013

2016

29
2017

24
2018

23
2019

CO2 emissions by energy source
Electricity
Heavy oil
Liquified petroleum gas

Coke
Other

Diesel oil

21

0

2020

Heat usage from large-scale natural gas
cogeneration systems

City gas(Thousand tonnes of CO2 emissions)

0.5%
5.3%
5.9%

140
Heat lost
through exhaust

0.2%
0.04%
41.7%

12.4%
14.7%

59.4%

0.2%

To produce steam

0.1%

21

43.7%

39.0%
1990

Total natural gas
consumed in 2020

40.6%

(100%)

19.0%

17.5%

Heat recovered
and used2020

19

To generate
electricity

40.6%

Reducing CO2 emissions over the product life-cycle

UD Trucks analyzes the environmental impacts of its vehicles at each stage of the
product life-cycle, from product development and design to the disposal and recyclingof parts and components. Since the majority of CO2 emissions occur during the usage
stage of its trucks, the Company has been proactively developing technologies thatrealize higher fuel efficiency in an effort to reduce emissions.

Improving fuel efficiency
The fuel that trucks burn is not only a major expense for commercial vehicle operators
but also a source of CO2 emissions, which is a major contributing factor to climatechange. UD Trucks is constantly improving the fuel efficiency of its trucks. Like othertruck manufacturers in Japan, UD Trucks has been subject to stricter fuel efficiency
standards for heavy-duty vehicles since 2015, with specific targets set for each weightclass. Over 98% of all trucks sold by the Company in 2020 complied with thesetargets, reflecting its efforts to equip trucks with leading-edge fuel-saving
technologies. UD Trucks has also achieved its own targets for average fuelconsumption since 2012.
In addition to pursuing technical innovations for improving fuel efficiency, UD
Trucks has been holding eco-driving seminars for truck drivers in every region of Japan
to offer practical advice and tips on driving more efficiently (refer to page 16).

20

The Quon’s driveline is designed to improvefuel efficiency

Improving fuel efficiency with industry-leading technologies
UD Trucks has continually improved the fuel consumption of its heavy-duty trucks byequipping them with a wide range of industry-leading technologies, including
in-vehicle information displays, optimally designed engine systems, and advanced
functions for precisely controlling driving speed. Indicating the effectiveness of thesetechnologies, compared with Japan’s fuel efficiency standards for heavy-duty vehicles
set in 2015, the Company’s flagship Quon heavy-duty truck has been exceedingtargets by more than 5% in over 90% of tests. UD Trucks has also launched a project
to further improve fuel efficiency in preparation for Japan’s new fuel efficiency
standards for trucks and buses set to go into effect in 2025.

Major technologies applied in heavy-duty trucks
Vehicle• Fuel Coach system for advising drivers on fuel-efficient driving• Foretrack function for predicting the road ahead based on scanned data
• Aerodynamic designs including front bumper-fitted air dams
and newly developed wind deflectors

Engine• Ultra-high-pressure fuel injection systems• Optimally shaped combustion chambers• Optimally designed induction systems• Variable speed water pumps• Eight-liter engines equipped with low-exhaust emission systems

Power train• ESCOT Roll system for minimizing the decline in speed when coasting• Acceleration limiter for ensuring gradual speed increases• Soft Cruise Control function for controlling acceleration

Average improvements in fuel efficiency of UD-branded trucks
Comparative improvement in fuel efficiency*(Percentage points)
107
106
105
104
103
102
101
100
99

0
2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

* The percentages were calculated using the harmonic average of the fuel efficiency achieved bytrucks sold each year, with the base year of 2015 set as 100%.

21

Waste reduction
Reducing waste at the production and disposal stages
The final disposal of a truck at a dealer’s site accounts for the largest amount of waste
matter during the product life-cycle. UD Trucks has established its own
waste-management system and created waste sorting management standards for allof its dealers in 2014. In accordance with the standards, each dealer has installed
disposal facilities and properly sorts waste materials during truck disassembly anddisposal. In addition, the Company delivers service parts in returnable packages todealers to facilitate the reuse of materials.
UD Trucks looks for ways to make disassembly work easier and use resources
more efficiently starting from the product development stage. For example, bumpers
are designed to be simply disassembled into three components, headlights can also beeasily dissembled into interchangeable lens and LED units, and fenders are made fromrecyclable materials.
At the production stage, UD Trucks works to reduce and recycle waste matter tominimize the amount of waste it disposes in landfills. In 2020, the Company achieved
its target of limiting landfilled waste to under 1% of total waste generated, and has
reduced the volume of waste sent to landfills by 99.9% compared with the amountin 1990.
Aiming to improve its waste management system, UD Trucks has partnered witha third party that specializes in waste disposal in April 2015. Through thispartnership, UD Trucks has been using only highly reputable disposal firms,
administering and submitting all necessary reports to government agencies, andkeeping records on the amount of waste disposed in an effort to strictly comply with
relevant laws and regulations.

Compliance with the Automobile Recycling Law
UD Trucks collects automobile shredder residue, air bags, and fluorocarbon fromend-of-life vehicles for recycling, in accordance with Japan’s Automobile Recycling
Law, which went into effect in 2005.

Total waste reused and disposed in 2020

Ageo Plant
Gunma Parts
Distribution
Center

Reused iron andnon-ferrous materials

Total waste
generated

5,061 tonnes

Waste reused and recycled

5,054 tonnes

Recycled as fuel chips(99.9% of total)

Reused as raw
materials for cement

Waste
disposed in landfills
7.02 tonnes (0.1% of total)
Recycled as refuse
paper & plastic fuel22

Information regarding the Company’s
automobile recycling fees and reusedmaterials is available from the following
website (Japanese only).
https://www.udtrucks.com/japan/
about-ud-trucks/automobile-recycle-law

Amount of total waste disposed and percent reused or recycled
Waste disposed in landfills

Percent of total waste reused or recycled

Target*(Tonnes of waste)(Percent)

20,000

100

89.4

2,000
1,000

99.8

99.7

99.7

99.9

99.8

80

68.5

60

100
50

Scope of operations
Amounts shown in the graph are combined
results from the Ageo Plant and Gunma Parts
Distribution Center from 2018 to 2020, andinclude results from other facilities up to 2017.

40

19,268

2,273

20

13

0
1990

1995

2016

16

14

10

7

2017

2018

2019

2020

0

* UD Trucks began setting ambitious targets from 2004 following initiatives for recycling and reducing
waste implemented by the Japan Automobile Manufacturers Association.

Conserving water and preventing pollution
Reducing water consumption and strictly managing waterand air pollutants
UD Trucks carries out routine measures to reduce the amount of water used in its
operations. For example, it periodically inspects and cleans water-consuming
equipment, checks for leaks, and promptly repairs equipment if leaks are discovered. It
also sets company-wide goals for groundwater conservation in compliance with ISO
14001 standards, and monitors progress towards achieving those goals.
At the same time, the Company implements strict measures to prevent pollutionof the air and nearby bodies of water. Specifically, it restricts the discharge ofpollutants at levels lower than regulatory requirements, and regularly cleans andmaintains relevant equipment.

Water consumption
Total water consumed

Water consumed per vehicle produced(Thousand cubic meters of water)(Cubic meters of water)

2,500

100

2,000

80

1,500

2,070

60

1,643

1,000

40

500

20

382
0
1990

1995

2016

317
2017

340
2018

310
2019

23

321
2020

0

Scope of operations
Amounts shown in the graph are combined
results from the Ageo Plant and Gunma Parts
Distribution Center from 2018 to 2020, andinclude results from other facilities up to 2017.

Pollutants discharged by the Ageo Plant over a 12-month period*1
Measurement
unit

Regulatory
limit*2

Highest amountmeasured

Lowest amountmeasured

Averageamountm3/Day

—

9,430

0

2,127

pH

—

5.8–8.6

7.8

7.0

7.4

Biochemical oxygen demandmg/L

25 (20)

2.1

1.3

1.8

Chemical oxygen demandmg/L

160 (120)

8.8

2.2

4.5

Suspended solids

mg/L

60 (50)

<5

<5

<5

n-hexane

mg/L

5

<2.5

<2.5

<2.5

Phosphorous

mg/L

16 (8)

1.0

<0.1

0.3

Nitrogenmg/L

120 (60)

3.1

1.1

1.8

Zinc

mg/L

2

0.1

<0.1

<0.1

Fluorine and compounds

mg/L

8

<0.8

<0.8

<0.8

Measurement
unit

Regulatory
limit

Highest amountmeasured

Lowest amountmeasured

Averageamount

ppm

200

110

110

110

Nitrogen oxide

ppm

230

34

Particulate matter

g/m3N

0.2

Items measured
Total wastewater

Water
pollutantsAir
pollutants

Emitting equipment

Items measured

Gas engine
cogeneration system

Nitrogen oxide

Drying furnace

18

8
*3

Undetected

Undetected*3

Undetected*3

Pollutants discharged by the Gunma Parts Distribution Center over a 12-month period*1
Regulatory
limit

Highest amountmeasuredm3/Day—pH—

5.8–8.6

Biochemical oxygen demand

mg/L

Suspended solids

mg/L

n-hexane

Items measured
Total wastewater

Water
pollutantsAir
pollutants

Measurement
unit

Lowest amountmeasured

Averageamount

11.3

0

2.9

7.0

6.5

6.7

20

7.5

1.1

3.6

20

9.0

2.0

5.3

mg/L

1

<0.5

<0.5

<0.5

Measurement
unit

Regulatory
limit

Highest amountmeasured

Lowest amountmeasured

AverageamountEmitting equipment

Items measured

Three heavy
oil boilers

Nitrogen oxide

ppm

180

65

62

63

Particulate matter

g/m N

0.2

<0.001<0.001<0.0013*1 The pollutants were measured between April 2020 and March 2021
*2 Figures in parentheses are daily average limits*3 Undetected amounts were below the lower limit of quantification24

Chemical substance management
Managing chemicals contained in products
UD Trucks strictly manages the chemical substances used in its products, specificallythose included in the Global Automotive Declarable Substance List, in accordance withindustry standards and laws concerning the production, import, management, andrecycling of chemical substances. The Company manages such substances both before
and during manufacturing.
At the product development and design stage, UD Trucks determines what
chemical substances will be used at the manufacturing stage, including chemicals
used by suppliers. It then registers relevant data with the International Material Data
System, a database jointly managed by automobile manufacturers worldwide.
At the production stage, UD Trucks reports to the government each year on its
usage of chemicals subject to Japan’s Pollutant Release and Transfer Register, which is asystem for restricting and controlling the discharge of designated chemicals into theenvironment. The Company also makes efforts to replace hazardous chemicals with lessharmful alternatives, and properly comply with revisions to relevant laws or regulations.

Regulated chemical substances handled at the Ageo Plant in 2020
(Substances included in Japan’s Pollutant Release and Transfer Register)

Kilograms per year

Discharged

Transferred

Chemical substance

Total
volumehandledto atmosphere

to water

to soilas wastematter53

Ethylbenzene

14,326

5,779

0

0

80

Xylene26,070

8,257

0

296

1,2,4-Trimethylbenzene

1,661

938

0

297

1,3,5-Trimethylbenzene

3,291

371

0

0

300

Toluene

6,251

4,715

0

0

Regulation
number

PCBs used at the Ageo Plant in 2020
Equipment containing PCBs
Capacitors
Ballasts
Transformers
Wiping cloths and other materials
contaminated with PCBs
Total

Weight*(kilograms)
025,2850591
25,875* The figures include estimated amounts.

25

Disposedor treated

Recycled

Included infinishedproducts

0

1,817

6,692

0

0

0

1,976

15,615

0

0

0

444

0

0

0

22

2,850

0

0

1,098

102

0

Environmental management system

Environmental policy
At UD Trucks, environmental activities are an important part of our efforts to provide logistics solutions that help
communities flourish, and to fulfill our Better Life purpose. Our environmental activities are based on thefollowing principles.
• We shall work to contribute to sustainability and the success of our customers by continually reducing
environmental impacts across the entire product life-cycle.
• Each of us shall responsibly consider the environment in every place we do business, and build trust withstakeholders based on our values.
• All of us shall work together to raise awareness of environmental impacts and regulations, help build a circular
economy, and enhance the Company’s environmental track record.

Environmental management organization
Sustainability Committee

Environmental Group
Executive Board
Administrative Office

Responsible for achievingcarbon neutrality

Responsible for resource
recycling and risk management

Responsible for employee
engagement and education

Facility
Subcommittee

Product
Subcommittee

Recycling
Subcommittee

Environmental
Risks Subcommittee

Workplace Subcommittee

Oversees initiatives
at factories,
workplaces, andlogistics facilities

Oversees productdevelopment andlife-cycle
assessments

Oversees measures
to reduce, reuse,
and recycle

Overseesmanagement ofchemical substances
and air and waterpollutants

Promotes regulatory compliance andawareness of internal rules; oversees
employee engagement systems andinformation disclosure

26

ISO 14001 certification acquired group-wide
UD Trucks has been acquiring ISO 14001 certification for environmental management
at its worksites since 1998, when its Ageo Plant first acquired certification. All of its
production plants and affiliated companies in Japan had been certified by 2017, andcompleted the transition to the revised ISO 14001:2015 standard by the end of
August 2018. Outside Japan, certification has been acquired by the Bangkok Plant inThailand and the Pretoria Plant in South Africa. Leveraging the benefits of thisgroup-wide system, UD Trucks is currently working to achieve the objectives andtargets of its environmental action plan.

Auditing of environmental management system
As a rule, UD Trucks conducts an internal audit of its environmental management
system every year to ensure that it functions effectively. During the audits, a team ofqualified audit committee members verify and evaluate whether the system is being
properly implemented and complies with company rules as well as relevant
environmental laws and regulations. The environmental management system is also
audited every year by a third party.

Material flow

Input
1. Development
and design

We use:• technologies that
reduce emissions• systems for
improving mileage• fewer materials that
impact the environment• technologies toreduce vehicle noise• recyclable materials
and components

OutputEnergy2. Procurementof materials
and auto parts

Raw materials
and truck parts

Resources andenergyEnergyWater, electricity,oil, etc.

Replacement
tires, fuel, etc.

Electricity andfuel for facilities
and equipment

4. Product usage

5. Product disposal

3. Production
Includes pressing, heat treating,machining, painting, assembly,
and inspections

We ensuresustainableprocurement anddeliver parts to
suppliers via
energy-efficienttransport

CO2
PM
NOx

Resources andenergyWe reduce the use of resources andhazardous substances, andoperate factories efficiently toconserve energy

CO2
NOx
SOx
Dust
Odor

Effluent

Waste
matterNoiseandvibration

We provide
eco-driving seminars

We sort materials
and parts for reuse
and recycling, andproperly treat anddispose waste

CO2
PM
NOx
Waste matter

Waste matter
Automotive
shredded residue
Airbags
Chlorofluorocarbons(incl. disposed tires)

Noise and vibration

The main environmental impacts of trucks over the entire product life-cycle are due to emissions of CO2 andexhaust gases containing particulate matter (PM) and nitrogen oxide (NOx) at the product usage stage.

27

and recycling

Sustainability Activities

Better for People

UD Trucks takes steps to improve the well-being of its employees andfoster a workplace culture that values diversity, personal development
and work-life balance. All employees are encouraged to make the mostof their abilities and are given opportunities to grow professionally.
UD Trucks also works closely with communities, focusing on road traffic
safety seminars for local schools, disaster relief and other community
outreach initiatives.

28

Fostering workplaces in which diversity is respected andindividuals can make the most of their abilities

Promoting diversity and inclusion in the workplace

At UD Trucks, differences among employees are embraced and respected based on anunderstanding that diversity*1 and inclusion*2 are essential for the Company tosucceed globally. Accordingly, as part of its pursuit of sustainable growth, UD Trucks
actively supports diverse human resources and a working environment that allows
each individual to maximize his or her potential. For example, it holds a Diversity &Inclusion Week every year to create opportunities for sharing best practices andfostering a corporate culture that accepts and welcomes differences among diverse
employees. Due to the COVID-19 pandemic, events were held remotely at different
UD Trucks locations worldwide in 2021. All employees could participate in the online
events, which included a panel discussion with female executives and employees, andpresentations by employees of various nationalities on the culture and customs of
their respective countries.

29*1 Diversity refers to people who have different
backgrounds and standpoints, such as
gender, nationality, ethnicity, age, sexuality,
religion, political orientation, socioeconomic
status, and physical abilities.
*2 Inclusion refers to an environment in whichpeople feel respected, recognized, supported
by others, and involved.

My workplace is flexible and allows me to express
my own ideas and opinions
I am originally from China, and I joined UD Trucks after graduating from a university in Japan. I
first worked in the Manufacturing Division as an engineer, but I took maternity leave and thenchildcare leave from November 2018. Upon returning to work, I moved to the Strategy
Development Department after using the Company’s internal recruiting system. I had decided
to work for UD Trucks because I was impressed with the user- and eco-friendly features of its
trucks, such as the world’s first urea selective catalytic reduction system. At first, I was not so
confident in my ability to communicate in Japanese, and I experienced some difficulties. My
coworkers, however, made an effort to listen to and understand my point of view, so I feel
free to express my own ideas and opinions. My workplace values each person’s individuality,and places genuine importance on diversity and inclusion. Thanks to the flexible work
arrangements offered by the personnel system, I have found a good balance between
working and raising my child.

Xuewei Fu
Manager, Strategy
Development Department,
Manufacturing Division

Employee data (for operations in Japan as of December 31, 2020)• Number of employees by gender(directly employed by UD Trucks)
Male

Percentage of total(Employees)
8,000• Number of managers

Female

92.7

92.6

92.4

92.4

5,789
422

5,823
433

6,054
459

6,075
464

4,000

(%)
100

5,367

5,390

5,595

5,611

7.3

7.4

7.6

7.6

• Newly hired graduates in 2020

210

• Newly hired mid-career employees in 2020

148

0
2017

29

2018

2019

males

females

50

0

•

1,039
61

Percentage of total

2020

nationalities

Australia, Bangladesh, Belgium, Brazil, Canada, China, France, Germany, India, Indonesia, Ireland, Italy,
Japan, Singapore, South Korea, Malaysia, Morocco, Mongolia, Myanmar, Nepal, South Africa, Sri Lanka,
Sweden, Switzerland, Thailand, the Philippines, Ukraine, United States, and Vietnam

30

Getting results, fostering personal growth, and building
trust through dialogue
At UD Trucks, managers and team members regularly engage in dialogue about awide range of matters, such as setting work priorities, confirming progress, proposing
improvements, and developing individual potential. Through such discussions andfeedback, workplaces not only get results but also foster personal growth and build
trust among management and employees.
The Company also taken steps to facilitate smooth communication in theworkplace, such as holding town hall meetings and Swedish-style coffee breaks calledfika*. It has also established an extensive digital platform that allows all employees toacquire and share useful information at any time and in any location. With thisplatform, employees can access work-related systems not only with the Company’s
devices but also via their own personal computers, smartphones, or tablets. This
makes it easier for organizations and project teams to share information andexchange ideas while also facilitating interaction among employees, regardless of theirjob position or the country in which they work. Moreover, this easy access to a widearray of information allows employees to learn more about best practices and theworkings of the Company.

Helping employees grow and develop
UD Trucks has established ample training facilities, adopted a training management
system, and provides a wide range of training programs to facilitate active learningand self-development among employees. This enables employees to develop andrefine their expertise and capabilities while acquiring the skills they need not only for
their current jobs but also for the future.
Since 2018, the Company has been holding “learning days” as educational events
designed to foster a corporate culture that values self-development. In 2020, it beganorganizing career planning seminars to provide employees with useful information
about training programs and resources for developing necessary skills for achieving
career goals.

31

A learning day event held in 2019

Occupational health and safety
Measures to prevent the spread of COVID-19
UD Trucks places the highest priority on ensuring the health and safety of its employees.
Since the first outbreak of COVID-19 in 2020, the Company initiated various measures
to help employees stay safe and prevent infections. Among them, it frequently
monitored the health of employees, mandated mask wearing and use of handdisinfectant, and strictly prohibited close-contact situations and crowded gatherings inpoorly ventilated spaces. To help enforce these rules, the Company has issued guidelines
on workplace behavior and COVID-19 countermeasures. Based on the guidelines, bodytemperature is checked when employees enter buildings, masks are mandatory in
offices and cafeterias, seats are adequately spaced, transparent partitions have been set
up between desks, door handles are regularly disinfected, and limits are set on thenumber of people using meeting rooms. The Company has encouraged employees totake advantage of the telecommuting system it had in place so they can work safely
from home.
Beginning in July 2021, UD Trucks has been offering vaccines onsite to about
2,200 employees working at head office and workplaces in the greater Tokyo area. It
has also been providing support for employee vaccinations in other countries where it
operates, including South Africa, Thailand, India, and China.

Helping employees manage stress
UD Trucks routinely provides stress assessments in the workplace to help employees
manage stress. Employees are encouraged to meet with physicians or counselors if theirresults indicate high stress levels, and their job responsibilities may be reduced based on
the advice of the physicians.

Maintaining flexible workplaces
UD Trucks has put in place various systems and policies designed to help employees
maintain a healthy balance between their working and personal lives. They include aflex-time system along with childcare and nursing leave systems. More recently, theCompany initiated a telecommuting system that places no limits on the number of days
employees can work at home. It has also established an anti-harassment policy, and ismaking ongoing efforts to reduce and eventually eliminate overtime work.

Number of employees taking maternity, childcare, and nursing care leave in 2020
Number of employees
Maternity leave
Childcare leave
Nursing care leave

Actions after taking leave

Women

18

18 took childcare leave after maternity leaveMen

4

3 have returned to work and 0 retired

Women

25

10 have returned to work and 1 retired032

Engaging with communities

Volunteering at a local elementary school

In November 2020, nine employees participated in an international cultural exchange
event at Oya Elementary school in the city of Ageo, which is home of UD Trucks. The
event aimed to provide school children with opportunities to practice speaking theEnglish they have studied and to learn about the culture and customs of different
countries. The employees, who were from India, Sweden, and France, set up booths fortheir respective countries, and spoke in English with the students about the photographs
and traditional crafts they had on display. Some of the employees also dressed in the
traditional clothing of their country. Groups of students visited each booth and used
English to explain various aspects of traditional Japanese culture.
Although shy at first, the children gradually opened up and enjoyed interacting withthe employees while participating in activities such as traditional Indian dancing, anddemonstrating how to use Japanese spinning tops. The activities were eye-opening forthe children. One commented that while speaking English was difficult, communicating
was possible using facial expressions and gestures. Another expressed great interest in
India’s culture and a desire to visit someday.
With the push to make Japan more globally minded, Ageo’s city government haslaunched its own initiatives to improve English language education. UD Trucks plans tocontinue supporting the city’s schools in this endeavor by drawing from the uniquediversity of its employees.

33Road safety instruction for elementary school students
Among prefectures in Japan, Saitama has a comparatively high number of fatal roadaccidents involving medium and heavy-duty trucks*. As a truck manufacturer based in
Saitama, UD Trucks recognizes its responsibility to help prevent road fatalities, and,toward that end, has been conducting a traffic safety program for elementary school
children in the city of Ageo since 2016. Through the program, elementary school
students learn about road safety and participate in activities with actual heavy-duty
trucks to demonstrate their blind spots and the space required when turning corners(specifically the different arcs taken by the front and rear wheels). The students are also
given an opportunity to sit in the driver’s seat of a truck to observe the driver’s viewpoint.
In 2020, to prevent the spread of COVID-19, the Company reduced the numberof students attending each instruction session, checked the body temperature of allparticipants, and had them frequently use hand disinfectant. One teacher observedthat in addition to learning about road safety, the children seemed to be refreshed by
the sessions after so many school events had been cancelled due to the pandemic.
As of December 31, 2020, 2,235 school children and 248 employees had
participated in the road safety instruction events since they were first held in 2016.

Donating engines to schools
To support the education of future mechanics and back research projects, UD Trucks
has donated eight truck engines to vocational schools and colleges that offer courses
on automobile maintenance as well as to universities.
By repairing and servicing automobiles, mechanics play an important role inensuring the vehicles run reliably and safely on the roads. Japan’s logistics industry,
however, is facing an increasingly severe labor shortage due to growing demand fordeliveries as more people shop online. This issue is exacerbated by the country’s
shrinking population. Consequently, training more people is a major challenge for the
future health of the industry.
To address this issue, UD Trucks plans to continue donating engines as well as
dispatching employees to teach classes at vocational schools in an effort to help train
mechanics and stimulate interest in commercial vehicles.

34* Based on data published by the Japan Trucking
Association

Helping communities around the world deal with COVID-19
In Japan
In May 2020, UD Trucks donated 5,000 face masks to nursery schools in the city ofAgeo, Saitama Prefecture. In a message of appreciation, the city’s mayor, Minoru
Hatakeyama said, “Nursery schools are obligated to care for children, even in thesetrying times. As it is still difficult to obtain a sufficient volume of masks, we are
grateful to UD Trucks for the donation.”
In June of the same year, the Company donated another 5,000 masks to Oya
Elementary School, which is located near its headquarters in Ageo. The masks were
helpful for preventing infections after the school resumed classes.

In South Africa
Every year, UD Trucks Southern Africa celebrates Nelson Mandela International Day*by holding a painting event and having its employees pay visits to the elderly. In 2021,
the Company focused on supporting impoverished communities, especially since the
COVID-19 pandemic has caused economic hardships, social problems, an exacerbatedpoverty in the country. UD Trucks Southern Africa donated 103 food parcels to an
impoverished area of Pretoria, where the company is based, commemorating the103rd anniversary of Mandela’s birth.

* Nelson Mandela International Day has been
designated by the United Nations as aninternational day for helping others in honor of
Nelson Mandela, who devoted his life to
ending apartheid in South Africa. It is heldeach year on July 18, Mandela’s birthday.

In Thailand
UD Trucks Thailand held a blood donor day at a UD Trucks dealership in Khon Kaen, acity in the northeastern part of the country, in an effort to help medical facilities
secure enough blood for transfusions during the COVID-19 pandemic. Collaboratingwith a local hospital, the company attracted 50 donors during the day, including
employees, customers, and business partners.

The mobile blood donor unit is a speciallymodified Quester heavy-duty truck equippedwith air conditioning, reclining seats, andmedical devices.

35

Sustainability Activities

Better for BusinessUD Trucks is focusing on sustainable growth by enhancing organizational
efficiency and productivity, transforming its businesses throughdigitalization, and strengthening corporate governance, with the goal of
attaining the highest level of performance in the truck manufacturingindustry. UD Trucks invests profits back into its businesses, laying a pathfor the Company to grow for the benefit of its stakeholders and support
the logistics industry as a whole.

36

Transforming businesses through digitalization

Promoting a digital transformation across all business activities

For UD Trucks, a digital transformation involves not just IT-related innovation, but also
positive changes to its corporate culture as part of a broader business transformation.
As such, a data-driven digital transformation is indispensable for advancements inlogistics, higher operational efficiency and productivity, and improvements inworkplace conditions. The Company has been investing in IT tools and making use of
big data applications, thereby enabling its management to centralize, analyze, andapply a wide range of information, from production planning and quality control tosales and marketing support. This data has also been made available to employees asa means to generate new business ideas and stimulate dialogue between employees
and management.
In addition, UD Trucks has applied digital tools to set up a telecommuting system
for its employees. This has bolstered the Company’s ability to attract highly skilledworkers from around the world, which is contributing to the diversity and capabilities
of its workforce.

37

Strengthening corporate governanceUD Trucks management teamTakamitsu Sakamaki

Naoto Hakamata

President andSenior Vice President of Operations

Chairman

Tetsuya Aiba
Taro Kunifusa

Masahiro Otsuki

Director

Auditor

Chief Financial Officer andSenior Vice President,
Human Resources

Keiki Ka

Konstantin
Kriegelsteiner Kotaro

Natsue Ishida

Vice President,
Digital Solutions and IT

Senior Vice President,
Brand and Communication

Senior Vice President,
Legal and Compliance

Mansoor Ahmed
Senior Vice President,
Strategy and Product LineManagement

Etsuo Yamamoto

Hideki Hashimoto

Senior Vice President,
Engineering Affairs

Senior Vice President,
Post Merger Integration
Streams Commercial

Senior Vice President,
Post Merger
Integration Promotion

Kouji Maruyama

Jacques Michel

Senior Vice President,
Japan Sales

Senior Vice President,International Sales

Shuichi Hayashi

Douglas Nakano

Rajesh Mittal

Senior Vice President,
Purchasing

Senior Vice President,
Technology

Senior Vice President,
Logistics

Koichi Ito

Yoshiyuki Kobayashi
Senior Vice President,
Operations Bangkok

38

Framework for promoting sustainability
In December 2021, UD Trucks established its Sustainability Committee to promotesustainability-related activities throughout the Company. Positioned under theCompany’s Executive Board, the Sustainability Committee adopts an environmental,social, and governance (ESG) framework for its activities (refer to pages 4–5).
Accordingly, its membership is made up of members from three groups: theEnvironmental Group, Social Group, and Governance Group. These members engage
in inter-committee discussions, formulate proposals, and submit quarterly reports tothe Executive Board, which then integrates the proposals into management activities.
Within each of the three groups, teams have been set up to examine and address
specific priorities. They determine current circumstances, set goals, devise action plans,
and monitor the progress of related activities.

Sustainability Committee
Executive Board
Administrative OfficeGroup
E Environmental
responsible forAchieving carbon neutrality
Resource recycling andrisk management

S

Social Group
responsible forProtecting human rights

Governance Group
responsible forStrengthening corporate governanceOverseeing risk management

Promoting diversity and inclusion

Enforcing the Code of Conduct

Overseeing safety and security

Overseeing the whistle blower system

Skills training

Employee engagement andeducation

G

Preventing harassment

Ensuring cyber security
Overseeing personal information security
Enforcing the Supplier Code of Conduct

UD Trucks Code of Conduct
The Company created the UD Trucks Code of Conduct to promote ethical businesspractices and compliance with laws and regulations. The code explains basic principles
and standards for behavior for all employees to follow.

UD Trucks Code of Conduct handbook

39

Topics covered in the UD Trucks Code of Conduct• Human rights
Respect for others; prohibition of discrimination; safe and hygienic workplaces;
compliance with environmental regulations; freedom of association; working hours
and remuneration; prevention of modern slavery and child labor• Fair and lawful business practices
Compliance with product-related regulations; fair competition; prohibition of
inappropriate business courtesies (including gifts and entertainment); compliancewith import and export controls; prevention of money laundering• Separation of business activities and personal interests
Conflicts of interest; political activities; insider trading• Protection of company data and assets
Confidential information; intellectual property; tangible and financial assets;
personal information security• Transparency and assignment of responsibilities
Financial accounting and reporting

Measures for ensuring compliance
For UD Trucks, compliance is an important component of its corporate culture andvalues. Recognizing that business transactions must be conducted ethically,
responsibly, and in good faith, the Company provides compliance-related training
programs to all employees.
In 2020, UD Trucks launched a compliance program for its sales departments inJapan with the goal of ensuring fair and lawful transactions. It has also been carryingout various educational campaigns to better enable employees to act properly basedon a solid understanding of business ethics.
After joining the Isuzu Group in April 2021, UD Trucks revised its
compliance-related policies and guidelines based on Isuzu Motors’ compliance system,
and, accordingly, strengthened its management of important compliance-related risks,
including those associated with competition laws, corruption, import and export
controls, and personal information security. In addition, UD Trucks has set up aninternal whistleblower system for facilitating prompt and proper responses to any
cases of wrongdoing or suspicious actions, and is developing an online reporting
system to improve usability for users.

Risk management
At UD Trucks, efforts to strengthen risk management are led by the Security
Management Division. Tasked with a diverse range of responsibilities, the division
oversees the safety of employees and visitors at all workplaces, safeguards
confidential information and intellectual property, handles emergency response
activities, oversees crisis management, and makes preparations for resuming
operations in the event of a disaster. UD Trucks has been maintaining safe and secure
operations thanks to the division’s ongoing efforts to identify risks and take proactive
steps to prevent them from materializing.

40

Information security
UD Trucks has taken measures for ensuring the security of its information and data,and is maintaining an information security governance system. To guard against an
information system breakdown caused by a disaster, the Company stores andmanages electronic information at an earthquake-resistant data center in addition toits head office. It has also stepped up measures for preventing data breaches resulting
from cyber-attacks, and regularly provides training sessions on improving information
security to its dealers nationwide. In addition, UD Trucks strictly manages and protects
all personal information it possesses in accordance with its privacy policies.

Ensuring responsible procurement
Strengthening our partnerships
Amid major societal shifts and rapid advances in technology, providing leading-edge,
superior-quality products and services needed by business operators is of prime
importance today. Moreover, addressing environmental and social issues across theentire value chain is become more important by the day. From this standpoint, theCompany has included sustainability as an important criterion in its procurement
process along with quality, performance, delivery times, and costs. UD Trucks shares its
approach to sustainability and expectations for conduct with its suppliers to build
stronger partnerships in the future. Toward this end, it has included actions for all
suppliers to take in the UD Trucks Supplier Code of Conduct, and is carrying out asustainable purchasing program based on this code.
In the Company’s own operations, all items, from raw materials needed to
manufacture trucks to finished goods, are purchased in accordance with the UD
Trucks Procurement Policy. Through this policy, the Company promptly responds tomarket needs while working to reduce CO2 emissions by optimizing its supplier baseand geographical footprint.

41

Sustainable purchasing program
The Company’s sustainable purchasing program is made up of four components.
Firstly, to ensure that procurement activities are carried out sustainable, all suppliers
are requested to comply with the Company’s Supplier Code of Conduct, which isbased on global standards including the UN Global Compact. Secondly, UD Trucks
evaluates suppliers with respect to business ethics, environmental performance, andother important matters by having them complete a sustainability self-assessment
questionnaire. Thirdly, supply chain mapping is deployed to assess and analyze
suppliers with respect to identified segments and areas. Finally, the Company shares
best practices and provides its own training programs covering various topics, such asbuilding a circular economy, recycling, eco-design, and human rights.

Responsible sourcing of conflict minerals
UD Trucks strives to ensure responsible and sustainable sourcing of conflict minerals,
namely tin, tantalum, tungsten, gold, and cobalt. The Company requires its suppliers
to comply with all relevant laws and regulations, and states this clearly in its Supplier
Code of Conduct (specifically in the section on responsible sourcing of raw materials).
Furthermore, suppliers are required to follow responsible mineral sourcing proceduresin high-risk areas.

42About UD Trucks Corporation

Since its founding in 1935, UD Trucks has been a key player in Japan’s transport andlogistics industry as a commercial truck manufacturer.
The Company currently provides high-performance trucks and services in response to
the needs of customers in over 60 countries worldwide.

Company overview (As of November 30, 2021, unless otherwise stated)
Company name

UD Trucks Corporation

Date of foundation

December 1, 1935

Head office address

1-1, Ageo-shi, Saitama 362-8523, Japan

Capital77.5 billion yen

Number of employees

6,127 employees including contract and temporary
employees (as of December 31, 2020)

Main businessJapanese business
Development, manufacture, export, and sales ofheavy-duty trucks; sales of medium- and light-duty
trucks; manufacture and sales of vehicle components;
maintenance and sales of service parts for trucks andbuses; import and sales of Volvo brand products.
Businesses outside of Japan
Development, manufacture, and sales of heavy-,
medium-, and light-duty trucks for growth markets;
manufacture and sales of vehicle components;
maintenance and sales of service parts for trucks
and buses.

Japanese subsidiaries

Products and services
provided by UD Trucks

UD Trucks
Sales of Quon heavy-duty trucks, Condor
medium-duty trucks, and Kazet light-duty
trucks to Japan and other mature markets,
and Quester heavy-duty trucks, Croner
medium-duty trucks, and Kuzer light-duty
trucks to emerging markets

Volvo trucks
Sales of imported Volvo brand heavy-duty
trucks to the Japanese market, including
Volvo FH 4x2 and 6x4 tractors, 6x2 and6x4 Rigid trucks, and FMX 6x4 and 8x4
Rigid trucks

UD Financial Services Co., Ltd.; New-Mech Co., Ltd.

Main locations outside of Japan UD Trucks Singapore Office; UD Trucks Bangkok Plant

Volvo Penta engines
Sales of Volvo Penta brand industrial andmarine engines for the domestic market,
including forklift and pleasure craft engines,
and installation and technical support fororiginal equipment manufacturers

History
DecadeHistory of the company

Technical development and product launches

1930

1935 Originally established as Nihon Diesel Industries,
Ltd., in the city of Kawaguchi, Saitama Prefecture1938 First diesel engine
1939 First diesel truck

1940

1942 Renamed as Kanega-Fuchi Diesel Co., Ltd.
1946 Renamed as Minsei Sangyo Co., Ltd.

1950

1950 Renamed as Minsei Diesel Industries, Ltd.

1960

1960 Renamed as Nissan Diesel Motor Co., Ltd.
1962 Commenced operations of the Ageo Plant

1970

1955 Proprietary UD Engine, a powerful lightweight diesel engine
1958 6TW model truck, the first in Japan with a load capacity exceeding 10 tons

1975 Condor medium-duty truck

1990

1990 Big Thumb heavy-duty truck

2000

2007 Joined the Volvo Group

2004 Quon flagship heavy-duty truck

2010

2010 Renamed as UD Trucks Corporation2014 Absorbed sales subsidiary UD Trucks
Japan Corporation2013 Quester heavy-duty truck for emerging markets
2014 Kazet light-duty truck
2017 New Quon and Condor truck models
Croner medium-duty truck and Kuzer light-duty truck for emerging markets

20202021 Acquired by Isuzu Motors Ltd.

For more information about UD Trucks, please refer to the following websites:•

Global website: https://www.udtrucks.com/•

Facebook: https://www.facebook.com/UDTrucksJP•

YouTube: https://www.youtube.com/user/udtrucksvideos

43

1-1, Ageo-shi, Saitama 362-8523, Japan
https://www.udtrucks.com/