Corporate Social Responsibility
Report 2019

Corporate Information

CONTENTS
About the SG Holdings Group.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 03
SG Holdings Group Summary .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 04
Message from Chairperson and President .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 05
SG Holdings Group Corporate Philosophy“Trust, Create, Challenge”
SG Holdings Group will:- Earn the trust of customers and society and growtogether.

CSR Management.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 08

Report on CSR Activities.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 14
Providing Safe and Secure Services.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 15
Promoting Environmentally Friendly Business Activities.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 26
Building an Organization of Diversity and Inclusion .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 39
Creating New Value Through Comprehensive Logistics Solutions.  .  .  .  .  .  .  .  .  .  .  .  .  .  . 53

- Create new value, contributing to social
development.

Contributing to Communities.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 60

- Always take on the challenges presented to us,
pursuing all possibilities.

Building a Responsible Management Foundation.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 69

Promoting Sustainable Procurement. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 66

Data.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 77

Third-Party Opinion.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 93

1

■Editing Policy

Details

The SG Holdings Group began to publish information on CSR in FY2018, in three forms: ourCSR Report (this document), CSR Communication Book, and corporate website.
Each serves a different function as follows.
●CSR Report
This is intended for researchers specializing in the environment and CSR and investors,
spotlighting the ways we think and act regarding CSR, and summing up what we have alreadydone.
●CSR Communication Book (publication scheduled for November 2019)
The CSR Communication Book contains excerpts of initiatives that the Group particularly
wishes to convey to various stakeholders, including consumers.

Corporate
websiteIn addition, our Annual Report and corporate website feature information we wish to convey toinvestors and financial institutions. Please make good use of all these information resources.
Annual Report
http://www.sg-hldgs.co.jp/english/finance/library/annual.html
SG Holdings IR site
http://www.sg-hldgs.co.jp/english/finance/

CSR Report(this document)

GeneralSpecialized
CSR
Communication
Book●Corporate website
This is the most comprehensive source for everything we do regarding CSR, including the latest
updates on our activities.
SG Holdings CSR/ESG site
http://www.sg-hldgs.co.jp/english/csr/

Corporate Information

Editing Policy

Summary■Reference Guidelines
GRI standards
Ministry of the Environment, “Environmental Reporting Guidelines 2012”
ISO 26000 (Guidance on Social Responsibility)■Report Period
April 1, 2018 - March 31, 2019
When reporting periods differ, clarification will be provided as needed.

■Organizations Subject to Reporting
SG Holdings Group Companies and Foundations

Group-wide business initiatives are referred to as SG Holdings Group initiatives or our Group’s initiatives.
Activities related exclusively to specific companies and organizations are clarified as needed.

2

■Results by Segment

We are a comprehensive logistics group comprising 109 companies: the holding company SG
Holdings, 100 consolidated subsidiaries, and eight equity method affiliates.
SG Holdings Co., Ltd. (the “Company”) is the pure holding company of the SG Holdings Group(the “Group”), and implements management strategies and administration functions for theentire Group.
Shares of SG Holdings were listed on the first section of the Tokyo Stock Exchange inDecember 2017.
● Company Name:

SG Holdings Co., Ltd.

● Established:

March 2006

● Head Office location:

68 Kamitobatsunoda-cho, Minami-ku, Kyoto-shi, Kyoto, Japan● Capital:

11,882,905,000 JPY● Employees:

96,048 (as of March 31, 2019)● Business Details:

Group management strategies, administration, and related
business

Delivery Business

Logistics Business

Operating revenue(billion yen)

824 .1

Operating income
903 .655 .4(billion yen)

Operating revenue(billion yen)

60

150

48

120

600

36

90

400

24

60

200

12

30

0

0

1,000

800

51 .3
738 .139 .6

0FY 2017/3

FY 2018/3

Real Estate Business(billion yen)

50

15

40

12

20

5 .1

Operating revenue by segment

Logistics

DeliveryReal estate

Other

70 .3

1,400

62 .7

1,000

800

857 .4
45 .5
4 .5

59 .3
80 .9

54 .0
943 .360 .0
47 .5

114 .0930 .3
49 .4
64 .1
17 .5

1,045 .0
69 .7
10 .6

5 .5

3

1,118 .0
66 .3
16 .5

140 .4131 .5110 .470

0

0FY 2017/3

1 .0

0 .7

0 .5

0

FY 2018/3

FY 2019/3

90

FY 2018/3

5 .7

75

64 .1

5 .7

69 .7

Operating income
5 .6(billion yen)
6
5

66 .3

4

45

3

30

2

15

1

6

Operating income(billion yen)

1 .5

9

16 .5

(billion yen)

1,200

7 .1

10 .6

10

2 .5

2 .0

1 .6

Operating revenue(billion yen)

60

■Consolidated Results (FY2018)

110 .4

Operating income(billion yen)

17 .5

140 .4(billion yen)

2 .6

Other Businesses

Operating revenue

30

131 .5FY 2017/3

FY 2019/3

Operating income

Corporate Information

About the SG Holdings GroupFY 2019/3

00FY 2017/3

FY 2018/3

FY 2019/3

60

50

40

600

30

400

20

712 .5721 .5738 .1824 .1903 .6

200

10

0

0

FY 2015/3

FY 2016/3

FY 2017/3

FY 2018/3

FY 2019/3

Note: In FY2017, we changed the end-date of our fiscal year to March 31 from March 20.

3Group Summary

The SG Holdings Group is a comprehensive logistics group that is engaged mainly in thedelivery and logistics business, with 109 companies operating in 25 countries and territories,
under our long-term management vision to become Asia’s leading comprehensive logistics
group. We work with roughly 90,000 employees and we have over 16,000 business partners in
our network, enabling us to provide valuable logistics solutions to a wide range of customers.

Overseas business management company
SG Holdings Global■Japan
The Delivery Business provides a variety of transportation services through our nationwide
network. The Logistics Business offers cross-border supply chain optimization for customers
in Japan and overseas by providing customized warehouse operations, international transport,
and local logistics.
The Real Estate Business develops, utilizes, and manages real estate, centered around
distribution facilities and other Group business infrastructure.
Delivery Business
Sagawa Express
Sagawa Humony
SG Moving
World Supply
Logistics Business
Sagawa Global Logistics
SGH Global Japan

Centered on Expolanka Holdings PLC (Sri Lanka head office), the Group conducts freight
forwarding operations with 20 sites in India. It is also building a network of sites in Bangladesh,the Middle East, and Africa, and has strengths in the transportation of products to North
America and Europe.

Real Estate Business
SG Realty
SG Assetmax

Other Businesses
Sagawa Advance
SG Motors
SG Systems
Sagawa Financial
SG Fielder
SG Expert
Nouvelle Golf Club
Sagawa Forestry■Overseas
We set up SG Holdings Global in Singapore as the hub of our overseas business.
In East Asia, the Group conducts a high-quality logistics business with its own warehouses inShenzhen and Hong Kong in China, including freight forwarding operations such as arranging
the transportation and customs clearance procedures of import and export freight on behalfof customers. It also provides international courier services and consistent transportation
arrangements for cross-border EC packages to customers’ doors in coordination with Sagawa
Express in Japan. With sites in major countries throughout Southeast Asia, SG Holdings
provides comprehensive logistics services from upstream to downstream based out of its own
warehouses.

East Asia
Tianjin Poly-Sagawa International Trading
Shanghai Poly-Sagawa Logistics
Poly-Sagawa Logistics
Sagawa Express (H.K.)
Sagawa Express International Taiwan
Sagawa Logistics Korea
Expo Freight (Hong Kong)
Expolanka Freight (Shanghai)
Other
Southeast Asia
Sagawa Express Philippines
Sagawa Global Logistics (Philippines)
Sagawa Express (Thailand)
SG Sagawa (Thailand)
Sagawa Express Vietnam
SG Sagawa Vietnam
EFL Malaysia
SG Sagawa Ameroid
Amgas Asia
Expolanka Freight (Vietnam)
PT Expo Freight Indonesia
Expolanka Freight (Philippines)
Expolanka Freight (Cambodia)
Other

Corporate Information

SG Holdings

South Asia / West Asia
Expolanka Holdings
Expolanka Freight (Sri Lanka)
Expolanka Freight (India)
Expolanka Bangladesh
Expolanka Freight Dubai
Union Cargo (Pakistan)
Classic Travel
Other
USA
SG Sagawa USA
Expolanka USA
Other
AfricaExpolanka Freight (South Africa)
Expolanka Freight (Kenya)
Expolanka Freight (Mauritius)
Expolanka Madagascar
Other

4

Message from Chairperson and President

Message from the Chairperson

SG Holdings Co., Ltd.
Chairperson and CEO

Eiichi Kuriwada

Greetings
At SG Holdings Group, we view the logistics

In recent years, the logistics business has

CSR Report, we exhaustively address the effortsbusiness as part of our social infrastructure. The

become widely accepted as part of our social

we are making to sustain our society and our

SG Holdings Group Charter of Corporate Conduct,

infrastructure. Fortunately for us, although

Group, aligned with the Group's seven material

which is a statement of our corporate philosophy,

society has been changing dramatically, our

CSR issues. If this report helps to communicate

discusses “stakeholder management”—our efforts tocompany has been able to maintain a solid

our message and deepen our stakeholders’meet the expectations of all the stakeholders of ourbusiness. This is a very happy outcome, but

understanding, we will be more than happy. We

business: customers, employees, local communities,

we also have a strong sense of responsibility

hope we can continue to rely on your support inshareholders, and business partners. We arethat society’s expectations of our industry as a

the future.

advancing our efforts to realize a sustainable society,whole have risen sharply. In order to present

from a variety of perspectives.

our CSR activities to all our stakeholders, in this5Message from Chairperson and President

Top Commitment: President

SG Holdings Co., Ltd.
President and COO

Hideo Araki

Become Asia’s Leading Comprehensive Logistics GroupI became president and COO of SG Holdings Co.,
Ltd. on April 1, 2019. At SG Holdings Group, since ourfounding in 1957, we have taken seriously our mission
to take responsibility for logistics as a provider of social
infrastructure. These days, the business environment ischanging dramatically, but we continue to make progress,
step by step, toward the realization of our long-term vision, to“Become Asia's Leading Comprehensive Logistics Group.”
In regard to the external environment surrounding us,

infrastructure is increasing. Our customers expect more fromus. More specifically, the values they seek are not only speed
and accuracy; they also need solutions to all the logistics
issues they face in their supply chains.
FY2018 marked the final year of our Mid-term Management
Plan “First Stage 2018,” in which we sought to strengthen
our ability to provide solutions across the full range oflogistics, building on the strength of our Sales Drivers®, andour advanced logistics project team, GOAL® (GO Advanced

emerging economies are growing rapidly, IT is becoming
further sophisticated, and logistics is becoming evenfaster and more complicated. Meanwhile, as e-commerceis growing fast, the importance of logistics as social

Logistics). Due to the aging and shrinking of Japan’s
population, the nation faces a shortage of labor. We will
work with our partner companies for our employees’ work
style reforms, so that we can maintain and improve quality inlogistics while ensuring appropriate pricing. We are alreadyseeing some success in our transportation infrastructureenhancement efforts. In December 2017, our company was
listed on the first section of the Tokyo Stock Exchange.
Going forward, we must continue to earn the trust of our
stakeholders, by strengthening compliance and corporate
governance.

6

Following on the heels of First Stage 2018, our new Mid-termManagement Plan starting in FY2019, Second Stage 2021,
has two main focus points: advancement of comprehensive
logistics solutions and enhancement of our management
platform.
“Advancing comprehensive logistics solutions” meansbuilding on the success of GOAL®, for which the entire groupfunctions as a single unit. To get there, we are training ourSales Drivers® to get the information that emerges fromconversations with customers, so we can use it to propose
solutions to the problems they are facing. Another important
thing is to bolster Group companies in mastering their
specializations. By enhancing the acuity of our Sales Drivers®
and the specialization of Group companies, we will be able
to expand the areas in which we can propose ideas to ourcustomers.
One important element of “enhancement of our management
platform” is the completion of our new logistics center inTokyo’s Koto Ward, scheduled for February 2020. As atransfer center for Sagawa Express, this location will expand
our capacity for express package delivery services. At thesame time, we are undertaking 3PL (which generally refers
to proposing a transformation of logistics to shippers, andthen being commissioned to provide integrated operations of
their logistics), international logistics, and logistics involving
large items. Organic integration of these various functions
will enable us to create new kinds of value. As the problemof labor shortage is most likely to continue, we propose to
implement new technologies such as RPA, AI, and robotics
in a wide variety of locations, achieving greater efficiency andlabor savings.
In addition, with over 90,000 employees globally, ourpeople are an indispensable element of our management
platform. We put people at the very center of our business.
We are working hard to create a workplace environment
where a diverse workforce made up of people with different
backgrounds and needs can all work comfortably andproductively. For example, we aim to have a flat organization
culture, so we have introduced systems for bottom-up
generation of ideas, and we have created opportunities for
employees to exchange opinions with the management.
Besides, our efforts for work style reforms, and our humanresources systems are ongoing. Our employees are highly
motivated, and they enjoy an environment where they cantake on new challenges.

Looking Ahead to Sustainable Growth,
Making SDGs Contribution a Focus
Point

the first time. We have thought that doing business while
maintaining the health of society, which is our businessplatform, helps us to maximize the value we can provide
to our stakeholders. With this belief in mind, we will also
commit ourselves to resolve our seven material CSR issues,
while sharpening and clarifying our goals and policies. Morespecifically, as a comprehensive logistics group, our top
priorities are the way we treat our people, and our concern for
the environment. Our policies regarding human resources are
as I have already described. Regarding the environment, in
May 2019 we endorsed the recommendations of the TCFD,*
and we plan to undertake deeper study of the risks andopportunities presented by climate change. For the Group asa whole, among the matters to be considered are refinementof our environmental data, and medium- to long-term goal
setting. In the international context, we are working with ourbusiness partners to make further progress in dealing withhuman rights, and corruption. The mission of the SG Holding
Group is to create new value through logistics solutions,holding up our corner of the social infrastructure that supports
production and distribution. In our view, this is something thatwill not change. We aim to be a company that society needs,
by turning customer information into business, in Asia and therest of the world. That is what we mean by “Become Asia's
Leading Comprehensive Logistics Group.” We appreciate thecontinued support of all our stakeholders as we go forward
together.

Message from Chairperson and President

Goals: Advancing Comprehensive
Logistics Solutions and Enhancing Our
Management Platform*TCFD: Task Force on Climate-related Financial Disclosures,
established by the Financial Stability Board (FSB). Its report,
recommending that companies disclose, in their annual reports,
climate-related information that may affect their financial results, waspublished in June 2017.

In the past, our Group has striven to make a positive
contribution to social issues through our business activities.
As I have already said, our efforts to realize work stylereforms and to create proper transportation infrastructure
are aimed at achieving the sustainable development goals(SDGs), which are universally accepted. In Second Stage
2021, we have adopted “contribution to SDGs” as a goal for
7The Group has made a CSR Statement clearly showing the significance and approach of its
CSR activities based on the material CSR issues of the Group that were identified in fiscal 2017.
The statement explicitly states how we as the SG Holdings Group would like to be involved withsociety and how we would like to provide value to society.

“Smoothing Out Today, for a Smarter Tomorrow”

CSR Management

CSR Statement of the SG Holdings GroupWe will use it as a reference to return to at times such as when formulating business plans andin everyday operations.

Today, the SG Holdings Groupis devoting all of our efforts to using logistics
to provide people with worry-free lives .

This means offering safe, reliable logistics infrastructure .
It means living in harmony with the global environment,
helping to preserve an abundant, happy way of life .

And by using the power of our comprehensive logistics solutions
to create new value,
we hope to build a smarter tomorrow .

The SG Holdings Group will continue contributing to society through its business,working toward a future in which people connect,
and smiles bring them together .

8

■Methods of Identifying Material CSR Issues

Main risks

The SG Holdings Group identifies material CSR issues by identifying risks and opportunities
in business areas, extracting initiatives required for reducing risks, and taking into account

The SG Holdings Group recognizes that the main risks described below may occur, and takes
short-term and medium- to long-term action to address them.

requests from society. See page 10 for the material issues we have identified.

Human rights
Particularly overseas, there are risks for addressing violations of human rights of various
stakeholders such as workers, consumers, and local residents.

■Location of Risks in Business Areas

CSR Management

Approach to Materiality

Labor-related
Particularly in Japan, there are risks that need to be addressed as a result of the strengtheningof legal regulations, application of new legal regulations, and the strengthening of theenforcement of the law due to the shrinking workforce and work style reforms.

Delivery and collection overseas
Human rights, labor,
and corruption risks

Corruption
Particularly overseas, there are risks of corruption and bribery to be addressed.

Airport/port

Airport/port

StationGovernanceIn businesses in Japan and other countries, particularly in Asia, there are local risks such as
embezzlement of payments received and improper accounting.

Station
Modal shift

Risks related tobusiness partners

Transfer center

Labor shortage

Sales office andservice center(collection)

Sender (shipper)
Individual/
corporation

Sales office andservice center(delivery)

RecipientIndividual/
corporation

Moving, transportation of large furniture,home appliances, and artworks

Business partners-related
In some cases, the Group uses business partners to provide services. There is a risk thatbusiness partners will violate the law or otherwise act inappropriately.

Reputation risk
Distribution center

Information system
Appropriate operation management and freight management utilizing IT are extremely important
for the Group’s logistics business. There is a risk that operations will be suspended or that
customer information will be leaked due to system trouble.
Environment
The Group uses many vehicles, and there is a risk that a variety of actions such as thereplacement of vehicles and the installation of dust collectors will be required due tostrengthening of environmental regulations in the future.
SafetyThere is a risk of administrative penalties or cancelation of permits due to the occurrenceof serious accidents, and that it will be necessary to take a variety of action due to thestrengthening of labor laws.
Quality
There is a risk that various actions will be required if a quality-related incident occurs.

Governance-related risk

System-related risk

Environmental risk

Safety risk

Quality risk

Occurrence of natural disasters
There is a risk that business continuity will be difficult due to damage to equipment and thesuspension of operation of equipment in the event of a natural disaster.
9

The Relationship between the SG Holdings Group and SDGs
The SG Holdings Group aims for sustained growth by resolving social issues through businessas a comprehensive logistics group. When specifying seven material CSR issues, we utilized
SDGs as a social perspective and also identified SDGs highly related to us.
Furthermore, in the Mid-term Management Plan Second Stage 2021, a three-year plan startingin fiscal 2019, “contribution to SDGs” is one of our key initiatives. This is because we believe ourgoal should aim in the same direction as the SDGs, which seek to realize a sustainable society,and we should move forward with it in order to sustain and evolve the logistics business associal infrastructure. We will contribute to the achievement of SDGs through various initiatives inline with the seven material issues.

What are SDGs?
An abbreviation of “Sustainable Development Goals.” Seventeen goals and 169 targets
adopted at a UN summit in September 2015, where it was agreed that countries
worldwide should achieve them over the 15 years from 2016 to 2030 to create asustainable society. Companies are also required to take action to achieve the goals.

Material CSR Issues
The seven issues below have been identified as material issues, and Group companies are
implementing initiatives in line with these themes. SDGs that are particularly relevant to them
are also described.

Seven Material Issues

Providing Safe and SecureServices

Promoting Environmentally
Friendly Business Activities

Related SDGs

Initiative Themes
Traffic safety
Labor health and safety
Quality
Climate change
Circulation of resources
Coexistence with nature
Human rights

Boundary
Japan

Overseas

○

○

○

○

●
●
●
●
●

○
○
○
○
●

Labor practices●

Diversity and Inclusion
(D&I)

●

○

Provision of advanced
logistics solutions○○

Promotion of digitalizationand technologies○○

Contributing toCommunities

Local contributions○○

Promoting Sustainable
Procurement

Supplier management●○

Corporate governance

Building an Organization ofDiversity and Inclusion

Creating New Value
Through Comprehensive
Logistics Solutions

Building a Responsible
Management Foundation

○

●
●

●

Compliance
Risk management andinformation security●○

Approach to boundary: Scope of implementation of initiatives
according to issues.
The companies covered are shown on page 4.

CSR Management

Seven Material CSR Issues○● Total coverage○ Partial coverage
10

■CSR Promotion System■CSR Committee

SG Holdings plans CSR for the Group as a whole, and manages and supervises the initiativesof each Group company based on this.

The SG Holdings Group has set up a CSR Committee for the purpose of implementing CSR on
a management level. The committee consists of Directors and the heads of Corporate Planningand departments in charge of CSR, with meetings held quarterly. Discussion of importantmeasures and management systems related to CSR leads to continuous improvement ofinitiatives.

SG Holdings
CSR Committee
Deliberation of CSR measures

Committee members

Chairperson
Chairperson and CEO

Directors, Executive Officers,
General Managers, etc.

Secretariat: Public Relations and CSR Unitin the General Affairs Department
Policy, planning, deliberation, instruction, approval,
and supervision related to CSR

Approval and instruction ofimportant matters

Presentation and reporting /prior consultation

Group companies

Members

Meetings Held in Fiscal 2018

●Chairperson
Chairperson and CEO, SG Holdings Co., Ltd.

1st
2nd
3rd

●Committee members
Seven Directors, one Executive Officer and two
General Managers of SG Holdings Co., Ltd.
(Fiscal 2018)●Other attendees
Three Directors of Sagawa Express Co., Ltd.

CSR Management

CSR Management System

April 2018
July 2018
November 2018

Main agenda items●Report of matters relating to CSR management●Progress report on CSR activities■Meeting of CSR Managers from Group Companies in JapanThe Group regularly holds meetings of CSR managers from the Group’s companies in Japanto share information on the CSR activities of each company and to hold study sessions, inviting
outside lecturers.
Overseas Group companies are individually provided with occasions for the sharing of
information and study sessions.

Meetings Held in Fiscal 2018
1st
Held in October 2018 Participation by 15 companies
2nd
Held in March 2019 Participation by 15 companies
Extraordinary meetings
Held in February 2019 Participation by 12 companies

Main agenda items●Seminars related to SDGs
●ESG evaluation●Anti-corruption●Collection of environmental data
(extraordinary meetings)
11

Material Issues

Providing Safe andSecure Services

Promoting
Environmentally Friendly
Business Activities

Building an Organizationof Diversity and Inclusion

Theme

Desired Outcome

Targets and Results for Fiscal 2018

Traffic safety

Reduction of traffic accidents in the
Company and society as a whole

Initiatives such as increasing training opportunities were implemented andachieved with the objective of reducing the number of traffic accidents year on
year.

Labor health and safety

Ensuring of the safety and health of
employees

We set the target of improving medical examination results one year later for
people subject to health risks, and improved results in approximately 80% of all
subjects through health supervision.

Quality

Maintenance and improvement ofservice quality

With regard to the target of improving quality in terms of time, freight, andresponse, improvements were made with time quality and freight quality.
Response quality resulted in an increase in demands due to diversifying
customer needs.

Climate change

Reduction of CO2 emissions
throughout the Group as a whole

In fiscal 2018, the CO2 emission reduction targets set for Group companies wereachieved.

Circulation of resources

Promotion of 3R business throughout
the Group as a wholeGroup companies’ targets for waste and use of paper were not achieved. We
learned that this was due to the expansion of the scope of business, and willcontinue working on improvement in the next fiscal year.

Human rights

Respect for human rights of all
stakeholders

For the respect of human rights, we implemented human rights education andharassment prevention education for all Group employees in fiscal 2018.

Creation of a friendly work
environment

Overtime hours of drivers in Japan were reduced by 9.5% year-on-year, and by
3.4% for occupations other than drivers as we proceeded to create a healthy
working environment in a planned way.

Improvement of positive response
rate in employee engagement
surveys

The indicator was changed from the employee attitude survey to the employee
engagement survey. The results of fiscal 2018 will be used as a benchmark formaking improvements in the workplace culture.

Creation of a workplace forparticipation by diverse humanresources

With the target of women accounting for 10% of management positions at the endof fiscal 2020, the promotion of participation of women progressed to 7.6% as ofthe end of fiscal 2018.

CSR Management

List of Targets and Results

Labor practices

D&I (Diversity and Inclusion)

12

Material Issues

Theme

Desired Outcome

Targets and Results for Fiscal 2018

Contribution to building communities
through more efficient logistics

We were commissioned to provide facility logistics services in multiple newcommercial facilities, and contributed to the alleviation of traffic congestion andreduction of environmental impact.

Promotion of international logistics
and provision of high value-added
services overseas

We established logistics infrastructure in Asian countries such as thecommencement of rail transportation in China and the establishment of a fixedtemperature warehouse in Thailand.

Approach to wider target audienceby deeper penetration and additional
value creation

In addition to the relocation of laboratories and hospitals, we provided added
value in logistics through the expansion of services in logistics settlement.

Introduction of technology in logistics
equipment

We reduced labor and improved efficiency in warehouse operations through theintroduction of logistics support robot and route navigation tool.

Promotion of improvement ofoperations utilizing AI and othertechnologies

We improved the efficiency of our operations through the automation of invoice
reading utilizing AI.

Contribution to the creation ofsustainable communities

We contributed to the creation of sustainable communities by increasing thenumber of instances of disaster support agreements and mixing of freight andpassengers.

Support of local industry and tourism

We established new locations for Hands-Free Travel. In addition, we concluded
comprehensive partnership agreements with four prefectures and two
municipalities.

Promotion of education for the next
generation

We sponsored the All-Japan High School Ekiden Championship to support
sport. We continued to implement work experience in sales offices as part of ouroccupational training.

Supplier management

Establishment of suppliermanagement policy and 100%consent of suppliers

We conducted a survey of Group companies on the status of utilization of
Supplier CSR Guidelines to ascertain the current state of utilization.

Compliance

Maintenance and establishment of
a compliance system not limited tolegal complianceFollowing on from last year, we conducted a variety of types of internal educationon compliance.

Risk management andinformation security

Realization of advanced crisis
management

We conducted business continuity training throughout the Group. In addition, we
thoroughly implemented training and education on handling of targeted e-mailattacks with regard to information security.

Provision of advanced
logistics solutions
Creating New Value
Through Comprehensive
Logistics Solutions

Promotion of digitalization andtechnologies

Contributing toCommunities

Promoting Sustainable
Procurement

Local contributions

Building a Responsible
Management Foundation

CSR Management

List of Targets and Results

13

CSR Management

Providing Safe and Secure Services

P15

Promoting Environmentally Friendly Business Activities

P26

Building an Organization of Diversity and Inclusion

P39

Creating New Value Through Comprehensive Logistics Solutions

P53

Contributing to Communities

P60

Promoting Sustainable Procurement

P66

Building a Responsible Management Foundation

P69

14

■Policy

According to the Ministry of Land, Infrastructure, Transport and Tourism, there wereapproximately 430,000 traffic accidents in Japan in 2018, and 520,000 people were injured inthese accidents. Although both of these figures are decreasing, the impact of traffic accidents
on society is by no means small. The SG Holdings Group conducts business using public roads,
and the elimination of traffic accidents is an issue that cannot be ignored.
Furthermore, the employees of the Group number more than 90,000 mainly in Japan, and it isour greatest responsibility to ensure labor health and safety.
Furthermore, questions are arising again in Japan concerning the responsibility to customers
due to repeated fraudulent incidents related to quality such as the falsification of data. Safe andsecure service can only be provided when backed by quality, and we believe that it requires
further diligent efforts.

1. Traffic Safety
We are systematically implementing traffic safety measures based on the Transport Safety
Management System.
The most emphasis is placed on the safety education of drivers. By thoroughly
implementing this, we aim to reduce traffic accidents in the company and society as awhole.

■Involvement with SDGs
The total distance traveled by the Group in its transportation business is
420 million kilometers in Japan alone, and the number of vehicles owned
totals approximately 27,000. Minimizing the impact of traffic accidents is the responsibility of
everyone involved in this business.
One of the sustainable development goals (SDGs) established by the United Nations is to“halve the number of global deaths and injuries from road traffic accidents by 2020” and we arecommitted to this goal.

2. Labor Health and Safety
Labor health and safety of employees is carried out based on the Group-wide “Health and
Safety Regulations.”
In addition to these, each business site implements measures according to risk to ensure
the health and safety of employees.
3. Quality
We will constantly engage in the improvement of quality to provide services that support thesustained growth of the Group and society.

CSR Report

Building an Organization of Diversity and Inclusion

Promoting Sustainable Procurement
Building a Responsible Management Foundation■Awareness of Social Challenges

Contributing to Communities

3. Quality................................ P23

Promoting Environmentally Friendly Business Activities

2. Labor Health and Safety.... P20

Creating New Value Through Comprehensive Logistics Solutions

1. Traffic Safety...................... P16

Providing Safe and Secure Services

Providing Safe and SecureServices

15Name of Committee

Person Responsible

Frequency of Meetings

Safety Meeting

Director in Charge of
Administration

Once per month

SG MovingLabor Safety Meeting

General Manager

Once per month

World Supply

Labor and Safety
Promotion Meeting

General Manager

Once per month

Sagawa Express

Basic Policy on Transportation Safety
1. 	
Under the Corporate Philosophy of the SG Holdings Group, all employees
will work as one to constantly improve transportation safety by putting
human life first through close cooperation between Group companies basedon the Charter of Corporate Conduct.
2. 	Management executives will lead efforts to ensure transportation safety
within the company by having a deep understanding that ensuringtransportation safety is the bedrock of management of the business.
Furthermore, they will ensure that employees are aware of the highest
importance of ensuring transportation safety.
3. 	
We will steadily implement safety management and conduct operations witha top priority on safety.
4. 	
When utilizing partner companies, we will not conduct any act that
impedes the business operator’s practice to ensure transportation safety.
Furthermore, we will strive to cooperate with partner companies in the
improvement of transportation safety.
5. 	
We will publish information on transportation safety.

■Goals and Outcomes Related to Traffic Safety
Company
Sagawa Express
SG Moving
World Supply

Medium- to Longterm Goals

Fiscal 2018 Goals

Reduce traffic
accidents in the
Company and thewhole society

Reduction of thenumber of reportabletraffic accidents*(year-on-yearcomparison)

Number of
Number ofReportable Traffic Reportable Traffic
Accidents in
Accidents in
Fiscal 2018
Fiscal 2017
20

22

0

0

0

0

*Number of traffic accidents subject to reporting under Article 2 of the Automobile Accident Reporting Rules

As we had done in the previous fiscal year, in fiscal 2018 we established the common goalof reducing the number of traffic accidents specified by the Ministry of Land, Infrastructure,
Transport and Tourism in the Automobile Accident Reporting Rules (number of reportable traffic
accidents) compared to the previous year, and implemented measures suited to each company.
Sagawa Express drafted and executed various measures such as providing better training
on safety based on the increase in traffic accidents in fiscal 2017. As a result, the number ofaccidents was reduced by approximately 10% compared to the previous fiscal year in fiscal
2018.
SG Moving and World Supply were able to achieve their goals with zero reportable accidents
again following the previous fiscal year.

CSR Report

Promoting Sustainable Procurement

Company

Building a Responsible Management Foundation●Sagawa Express●SG Moving●World Supply

Contributing to Communities

Each company in the Group is addressing problems related to safety including traffic accidents
through means such as the establishment of individual safety committees based on theTransport Safety Management System specified by the Ministry of Land, Infrastructure,
Transport and Tourism. Sagawa Express also provides its training facilities and training systems
to the two other companies to promote traffic safety throughout the entire Group.

Promoting Environmentally Friendly Business Activities

The three following companies handle most of the transportation operations of the SG HoldingsGroup. To ensure traffic safety, they are all engaged in basic policies on transportation safety
based on the Transport Safety Management System established by the Ministry of Land,
Infrastructure, Transport and Tourism.

Creating New Value Through Comprehensive Logistics Solutions■Traffic Safety Promotion Systems

Providing Safe and Secure Services■Traffic Safety Policy

Building an Organization of Diversity and Inclusion

1. Traffic Safety16Frequency in
Fiscal 2018

○

ー

126

2,634

Driving Ability
Assessment

ー

○

5,177

5,177

Driver Mentoring○ー

66,647

4,667

Driving Assessment

ー

○

6,517

5,915

SD Certification Training

○

ー

429

3,215

1 month later

1 Month Driver
Mentoring

○

ー

3,741

3,629

3 months later

3 Month Driver
Mentoring

○

ー

3,542

3,475

6 months later6 Month Driver
Mentoring

○

ー

3,312

3,254

12 months later

12 Month Driver
Mentoring

ー

○

2,703

2,667

Thereafter

Periodic Driver
Mentoring○ー

28,88925,640

Entry into
company

Basic Safe Driving
Training

Advanced Safe Driving
Examiner Accreditation Training

73

310

Initial Safety Promotion Training

8

162

Coaching Training for Safety
Promoters

4160

SD Adviser Training

22

57

Advanced
SD Instructor

Training Title

Fiscal 2018

Fiscal 2017

Advanced SD Instructors

10,418

9,529

Advanced Safe Driving
Examiners

1,564

1,425

Safety Promoters

1,194

1,029

SD Adviser

133

116

CSR Report

1,407

Promoting Sustainable Procurement

149

Building a Responsible Management Foundation

Number of
Recipients in
Fiscal 2018

Advanced
Safe Driving
Examiner

Training Title

Advanced SD Instructor
Accreditation Training

Number of Instructors and Examiners (Sagawa Express)
Instructor

TimingNumber of Recipients in Fiscal 2018

Contributing to Communities

Training for Drivers (Sagawa Express)

Frequency in Fiscal 2018

Promoting Environmentally Friendly Business Activities

Training Title

Newly hired drivers at Sagawa Express undergo training and guidance on safe driving, andare required to pass an examination to work solo as Sales Drivers®. Periodic guidance isalso provided afterward to enable them to continue to drive safely. Training, guidance, andexaminations are only provided by personnel who have certain internal qualifications in asystem that provides the same level of education to all drivers. Training is also periodicallyprovided to these instructors and examiners to create a system in which the necessary
education is always provided to the workplace.
The two other companies have also established safety education systems providing training andmanuals that match their own business characteristics based on the standard set by Sagawa
Express.

Creating New Value Through Comprehensive Logistics Solutions

Training for Instructors and Examiners (Sagawa Express)

Providing Safe and Secure Services■Safety Education

Building an Organization of Diversity and Inclusion

1. Traffic Safety17

Total Number ofParticipants

741

73,6201,567,224

Traffic Safety Classes●Drive Recorders●Safe Driving Training Services

Drive recorders are installed in transportation vehicles to improve drivers’ driving skills andanalyze the causes of accidents.

Sagawa Express offers “Safe Driving Training Services” providing driving safety expertise tocorporations as a business. The aim is to eliminate traffic accidents from society by enabling
the knowledge accumulated as professional drivers over many years to be utilized by business
operators that utilize motor vehicles.
This service is provided in a training format for drivers and instructors.

Number of Vehicles
Owned (for Transportation
Business)

Number Equipped with
Drive Recorders

Installation Rate

26,671

19,61073.5%

SG Moving

74

74

100%

World Supply

135

Company
Sagawa Express

Not installed (to be installed in fiscal 2019)●Truck Driving Championships
Sagawa Express holds “Truck Driving
Championships” every year in order toimprove the traffic safety awareness anddriving manners of drivers. In fiscal 2018,84 drivers selected from throughout Japan
competed across three events covering
traffic rules, inspections, and driving skills.
The championships were held for the 26th
time in fiscal 2018.
●Continuous Accident-free Award System
Sagawa Express has established a Continuous Accident-free Award System for sales offices
nationwide. Being continuously accident-free is quantified by multiplying the number of vehicles
held by the continuous number of days without accidents. It provides a way to motivate all
drivers in a sales office to work as one to engage in safe driving.

Safe Driving Training
Services

Number of Training
Sessions per Year

Number of Participants
per Year

Number ofParticipating
Companies

135

2,109

28

●Driver Training Facilities
Sagawa Express has driver training facilities that provide driving training courses in threelocations throughout Japan. These facilities are used for safety education for other Group
companies and Safe Driving Training Services for outside the Group.
Driver Training Facilities(Sagawa Express)

Location

Toyohashi Training Center

Aichi Prefecture

Ayase center

Kanagawa Prefecture

Setouchi Park

Kagawa Prefecture

CSR Report

Promoting Sustainable Procurement

Number of Participants
per Year

Building a Responsible Management Foundation

Number Held per Year

Contributing to Communities

Sagawa Express periodically holds traffic safety classes for children and the elderly in local
communities. This initiative began in 2003, and has had over 1.5 million participants to date.

Promoting Environmentally Friendly Business Activities

In addition to safety education, the SG Holdings Group is implementing measures using safetyassistance devices such as drive recorders and conducting initiatives to raise safety awarenessthrough internal commendation systems such as the Continuous Accident-free Award System.
Furthermore, the Group aims to reduce the number of traffic accidents not only within its
companies but throughout society as a whole by holding traffic safety workshops for regional
communities and providing safe driving training services to companies outside the Group.

Creating New Value Through Comprehensive Logistics Solutions●Traffic Safety Classes

Providing Safe and Secure Services■Other Initiatives

Building an Organization of Diversity and Inclusion

1. Traffic Safety18

SG Systems provides a telematics cloud service using a cloud platform. “Telematics” is acollective term referring to the provision of information services by combining communications
systems with automobiles and other vehicles. This service will lead to the accumulation andanalysis of various information in the operation of vehicles, contributing to the improvement ofsafety.
●Aptitude Tests Using a Basic Driving Simulator
World Supply introduced a basic driving simulator in fiscal 2017. This makes it possible toconduct driver aptitude tests without driving a vehicle, and the driving simulator is also utilized indanger prediction training.
●Safety Education through HIKYAKU Company Newsletter
Sagawa Express publishes the HIKYAKU company newsletter monthly. It includes news andwarnings on safety as necessary, lending itself to a safety education tool for all employees.

Expolanka Freight (EFL), an ExpolankaGroup company, implemented the “Road
Safety Program,” which is aimed at educating
employees to improve the safety of EFL’s
delivery services for employees, customers,
local communities, and the environment. This
program provides information helpful for EFL
to raise safety awareness among employees,
which thereby allows the company to ensure
traffic safety and maintain a culture of placing thehighest priority on safety.

CSR Report

Promoting Sustainable Procurement●Expolanka (Sri Lanka)

Building a Responsible Management Foundation●Telematics Cloud Service

SG Sagawa Ameroid established a Safety Committee in 2015 and is striving to prevent traffic
accidents. The company is also working to introduce a web portal system (accident reporting
system) and systems for driver training and driving analysis, and also install equipment such as
high-definition cameras in vehicles for monitoring drivers and other purposes.

Contributing to Communities

Head office
Branch andmaintenance plant
Maintenance plant
Body manufacturing
plant●SG Sagawa Ameroid (Singapore)

Promoting Environmentally Friendly Business Activities

SG Motors Vehicle
Maintenance Network

Creating New Value Through Comprehensive Logistics Solutions

The SG Holdings Group ensures inspections are
conducted by drivers before driving and conducts
centralized management of maintenance with theaim of “eliminating traffic accidents related to vehicle
maintenance.”
SG Motors manages sales vehicles throughout
the Group, and provides a wide range of support
spanning from the management of inspection timing
to the standardization and confirmation of suitabilityof inspection items. It also has a maintenancenetwork that can cover 30,000 vehicles nationwide,
ready to handle all of the Group’s vehicles at any
time.

Providing Safe and Secure Services■Overseas Initiatives●Ensuring Vehicle Maintenance

Building an Organization of Diversity and Inclusion

1. Traffic Safety

19

●Management of Health, Stress, etc. of Employees
The Group works with the SG Holdings Group Health Insurance Society to hold meetings ofthe Health Management Project Promotion Committee twice per year to promote the health of
employees and prevent diseases. This committee is chaired by SG Holdings director in chargeof Management and Control, and its members consist of the personnel responsible for healthmanagement in domestic Group companies and Health Insurance Society representative
members. It ascertains the state of health of employees, shares health issues throughout theGroup, and determines measures and policies on health projects.
●Ensuring Labor Safety in the Workplace, Long Working Hours, etc.
Systems for health and safety in the workplace are established according to the size of eachbusiness site. For example, Health and Safety Committees are set up in business sites that
constantly have 50 or more employees, and the safety and working hours of employees are
discussed in committee meetings that are held monthly to consider and implement specificmeasures in each business site.

Labor representative

Safety Manager

Committee member

Committee member

Committee member■Goals and Results Related to Health and Safety
Companies

Medium- to Longterm Goal

Fiscal 2018 Goal

Results in Fiscal 2018

DomesticGroup
companies

Ensuring thesafety andhealth ofemployees

Improve the results of the following
fiscal year’s medical examinations
for personnel subject to health risks*(high blood pressure, diabetes,
hyperlipidemia, liver dysfunction,
etc.)

Improvement in 80%
of personnel covered(reduction of healthrisks)The Group places a particular focus on initiatives aimed at the health of each of its employees.
Preventing illnesses from becoming severe was set as a goal for fiscal 2018. This initiative
covers employees found to be subject to health risks in health checkups conducted once per
year in Japan. Health nurses from the SG Holdings Group Health Insurance Society conduct
interviews with each person at risk, recommend being seen by a specialist, provide guidance on
medication, and provide health guidance such as a review of lifestyle habits over one year for
better results in the next year’s medical examination.
Approximately 1,100 people were found to be at risk in fiscal 2018, but significant improvements
were seen in 80% of the following fiscal year’s results, indicating a reduction in health risks.
*Personnel subject to health risks: people who have health risks, including (urgent) high health risks.

CSR Report

Promoting Sustainable Procurement

Health Manager

Industrial physician

Building a Responsible Management Foundation■Systems Related to Health and Safety

Committee members onlabor side

Contributing to Communities●Health management of employees ●Stress management of employees●Ensuring labor safety in the workplace ●Long working hours●Health and safety education

Committee members oncompany side

Promoting Environmentally Friendly Business Activities

The areas where these initiatives are conducted are as follows.

Chairperson

Creating New Value Through Comprehensive Logistics Solutions

The SG Holdings Group has established common “Health and Safety Regulations” for theGroup in an effort to improve health and safety activities, prevent workplace accidents, ensure
the safety and health of employees, and form and promote comfortable working environments.

Health and Safety Committee (e.g. Sagawa Express)

Providing Safe and Secure Services■Policy on Health and Safety

Building an Organization of Diversity and Inclusion

2. Labor Health and Safety

20For example, in fiscal 2018, Sagawa Express conducted a review of the lines of movement in its
sales offices nationwide to reduce accidents within sales offices. This initiative resulted in an 8%
reduction in accidents in sales offices in fiscal 2018 compared to fiscal 2017. The activities arescheduled to continue.
Overseas, SG Sagawa Ameroid conducted a safety review, and provided warnings to drivers
and expanded safety facilities based on the results. As a result, the number of accidents,
including minor injuries, was reduced by 45% in fiscal 2018 compared to the previous fiscal
year.

●Number of Workplace Accidents (Domestic Group Total)

1,000

877

951

865

500

0
2016

2017

2018

86,24085,45387,501

2016

2017

2018

(Fiscal year)

Number of Employees in Japan

There were 865 workplace accidents in fiscal 2018. Although the number of employees inJapan increased by approximately 2,000, the number of workplace accidents decreased by 86(approximately 9%) compared to the previous year.
Fiscal 2016

Fiscal 2017

Fiscal 2018

Not resulting in absence

497

571

468

Resulting in absence

380

380

397

Total

877

951

865

(Employees)
100,000
80,00060,00040,000Note: Statistics encompass employees and temporary employees of domestic Group companies.

20,000
0(Fiscal year)

CSR Report

Promoting Sustainable Procurement

Instead, the departments responsible for safety in each Group company play a central role insteps to address workplace accidents with the aim of “eliminating fatal and serious accidents.”

Building a Responsible Management Foundation

1,500

Contributing to Communities(Number)

Promoting Environmentally Friendly Business Activities

Occurrence of Workplace Accidents in Offices in Japan

Creating New Value Through Comprehensive Logistics Solutions

The SG Holdings Group believes that accurately ascertaining the actual state of workplace
accidents is the most important means of improving labor health and safety. For this reason, we
do not set such absolute number targets as could provide motivation for cover-ups.

●Yearly Data

Providing Safe and Secure Services■Initiative to Address Workplace Accidents

Building an Organization of Diversity and Inclusion

2. Labor Health and Safety

21

The Group actively works with the Health Insurance Society to provide opportunities for thefollowing checkups and examinations to employees, conduct initiatives related to the preventionof disease, and raise awareness.
Initiative
Health Check*
Obesity prevention
measures
Measures to prevent
illnesses frombecoming severe

Target Individuals

ExpenseHealth checkups conducted once per year

Details

All employees

Free

-T
 horough implementation of specified health guidance (SG Smart
Program)

All employees

Free

People flagged inhealth checkups- Bowel cancer tests by postal mail- Cervical cancer examinations - Breast cancer examinations

ApplicantsPartially
subsidized- Bone density tests - Prostate cancer PSA tests- Influenza vaccinations
Support for quitting
smoking- Support for quitting smoking (measurement of lung age andconsultation for quitting smoking)

Free

Free

- Helicobacter pylori tests by postal mailVarious examinations

Fiscal 2018

1,455 people who underwent breast cancer examinations (of these, 1,223 conductedexaminations within the company)■Employee Mental Health Care●Stress Checks- Campaign for the prevention of lifestyle-related diseases
Health consultation and health guidance by telephone, provisionof information on appropriate medical institutions, etc. conductedindividually for people with poor control of blood sugar or bloodpressure

ApplicantsFree*Health Check: an original medical examination combining the periodic medical examination conducted by theCompany with the lifestyle-related diseases tests conducted by the Health Insurance Society.

●SG Smart Program
The Group provides specified health guidance under the name of the “SG Smart Program”
for employees aged 40 or older as specified by the national government. Employees at risk ofmetabolic syndrome are actively approached and recommended to utilize the program.
The implementation rate was 22.0% in fiscal 2017 (up 16.4% year-on-year). The implementation
rate for fiscal 2018 will be reported in November 2019.

Even prior to December 2015 when stress checks became mandatory, the SG HoldingsGroup was implementing measures in mental health care for employees in Group companies
throughout Japan. In terms of mental health management, everyone insured by the Health
Insurance Society takes stress checks once a year and anyone who wishes to may consult withan industrial physician or other medical professional.
●Health Dial 24
In order to support the mental health of employees and theirfamilies, the Group has established SG Holdings Group Health
Dial 24 staffed by a professional organization in Japan, which
provides free consultations on the telephone or online. Anyone
who wishes to may also arrange a free consultation with a clinicalpsychologist at counseling rooms located throughout Japan.

CSR Report

Promoting Sustainable Procurement

The Group is also engaged in initiatives related to health management specific to women. For
example, breast cancer examination buses are dispatched to approximately 80 business sites
nationwide to provide an environment allowing female employees to have themselves examined
during work hours for the early discovery of breast cancer. The Health Insurance Society also
subsidizes the cost of other tests for cervical cancer and bone density.

Building a Responsible Management Foundation●Disease Prevention and Health Promotion●Health Management for Women

Contributing to Communities

The Group and the Health Insurance Society are working together to perform comprehensive
analysis of employee health checkup information and medical expense data, organizing it as adata health plan. In response to health issues in the Group identified through the plan, Group
companies cooperate to implement and review health projects every year. As preventing
illnesses from becoming severe has been a particular focus since fiscal 2017, the Group ispaying attention to the health of people subject to health risks.

Promoting Environmentally Friendly Business Activities●Data Health Plan

The Group has set up non-smoking promotion committees in each of its Group companies
to provide information for promoting non-smoking and conduct lung age measurements andconsultation for quitting smoking upon request.
Every year since 2016, they have displayed non-smoking posters, distributed non-smoking
videos, and handed out booklets conveying the harm caused by smoking in families withnewborn babies.

Creating New Value Through Comprehensive Logistics Solutions

The SG Holdings Group is working with the SG Holdings Group Health Insurance Society to
conduct a variety of initiatives contributing to the promotion of health of the 62,000 people
covered by insurance in Japan.

●Non-smoking Activities

Providing Safe and Secure Services■Maintaining and Promoting the Health of Employees

Building an Organization of Diversity and Inclusion

2. Labor Health and Safety

A poster publicizing theGroup Health Dial
22

Sagawa
Express

Maintenanceandimprovement ofservice quality

Improvement of time quality, freight quality,
and response quality (compared to previous
fiscal year)

As shown infollowing table

Scope

Results

Quality Item (Sagawa Express)(1) Time-band service
Time quality

Quality Management System (Sagawa Express)

Quality
Manager

Quality
Manager

Response quality

Quality
Manager

427 sales offices nationwide
Quality
Manager

Quality
Manager

Quality
Manager

Quality
Manager(6) Outbound freight accidents

Improved(7) Inbound freight accidents

18 branches nationwide

Quality
Manager

Improved(5) Hikyaku Cool Express
Freight quality

Quality
Manager(3) Hikyaku Just Time Express(4) Morning commercial delivery

Head Office Quality Assurance Department

Quality
Manager(2) Absence redelivery

Quality
Manager

Quality
Manager

Quality
Manager(8) Requests from customers

Increased

Sagawa Express, the core of the Group, is conducting activities to improve quality in termsof three categories: time, freight, and response. In fiscal 2018, while the number of packages
handled increased due to the expansion of the e-commerce market and other factors,
improvements were made from the previous fiscal year in time quality and freight quality. At thesame time, there were also more comments and requests to the company than in the previous
fiscal year, reflecting the diversification of customers’ needs and higher demands on quality. In
the future, we will continue to sincerely listen to customers’ voices while complying with existing
quality standards, and also endeavor to further improve customer satisfaction.

CSR Report

Fiscal 2018
Results(vs FY 2017)

Promoting Sustainable Procurement

Fiscal 2018 Goal

Building a Responsible Management Foundation

The Group has built quality management systems to match the characteristics of each Group
company. For example, Sagawa Express, which is the core of the Group, has establisheda Quality Assurance Department in its head office, and also appointed quality managers in
18 branches and 427 sales offices nationwide. These quality managers aim to maintain andimprove quality by periodically checking the level of service.

Medium- to
Long-term Goal

Contributing to Communities■Systems Related to Quality

Company

Promoting Environmentally Friendly Business Activities

The SG Holdings Group believes that quality underlies safe and secure services. To deliver
services responding to the trust of customers and employees, we are establishing systems andmechanisms that improve quality according to the characteristics of each Group company.

Creating New Value Through Comprehensive Logistics Solutions■Goals and Results Related to Quality

Providing Safe and Secure Services■Policy on Quality

Building an Organization of Diversity and Inclusion

3. Quality

23Frequency

Name

WeeklyExamples of Quality Check Functions (Sagawa Express)

Qualityreport atcompanywide
morning
meeting

Participants and Personnel in Charge
PurposeHead office
Report the state ofachievement of quality
items (see previouspage). Immediately
respond if there are any
problems.

Branches

Sales
OfficesInternal
Auditors●Mechanisms for Fully Applying Customer Feedback (Sagawa Express)
Directors
GeneralManagers

BranchManagers

Sales
OfficeManagers

Sagawa Express has established a Customer Service Sections in each of its sales offices tocreate a system for swiftly responding to requests from customers. Furthermore, comments
and requests made by customers via the Website or over the telephone (approximately 64,000
per year) are utilized by the Quality Assurance Department in Head Office to improve customer
satisfaction.

Quality
Managers

Quality
Managers

Breakdown of Improvement Requests

AnnuallyMonthly

Directors
Nationwide
qualitypromotion
personnel
meeting

Internal audit

Consider analysis ofquality-related problems
and measures toprevent their recurrence.

Check quality of over
100 items in all sales
offices nationwide.
Internal auditors are
qualified personnel
within the company(approx. 2,500 qualified)Quality
Assurance
Department
Sales
Department

Systems 1.9 %Transportation
Network
Department

Collection 2.0 %Product accidents 3.1%○

Manners (driving, service,
telephone), etc.
16%

Other

14.2%
Delivery,re-delivery,
failed delivery notice,
etc.

62.8%

CSR Report

Promoting Sustainable Procurement
Building a Responsible Management Foundation

Sagawa Express conducts quality management based on ISO 9001. The company has
established eight quality items (see previous page), and each month it tracks numerical targets
unified nationwide. In the event a problem arises with these quality items, this is shared acrossbranches and sales offices in the weekly companywide morning meeting to ensure action
is taken immediately. Furthermore, nationwide quality promotion personnel meetings areheld monthly to consider analysis of quality-related problems and measures to prevent theirrecurrence. Internal audits of all sales offices in Japan are conducted annually to check over
100 items. The internal auditors are qualified personnel within the company, who currently
number around 2,500.

Contributing to Communities

In order to maintain a certain level ofservice quality, Sagawa Express not
only educates its own employees,
but has also started working on
the education of the employeesof subcontractors. In fiscal 2018,a rulebook and a checklist weremade for subcontractors (delivery
supporters), and education using
Delivery rulebook
Checklist
these is scheduled to begin in fiscal
2019. The rulebook and checklist
include a wide range of points
spanning from general manners such as greetings and appearance to delivery rules such as
responses when the recipient is not present. For example, leaving a parcel on the doorstep
without permission is clearly prohibited in this manual.

Promoting Environmentally Friendly Business Activities●Compliance with Quality Items (Sagawa Express)

Creating New Value Through Comprehensive Logistics Solutions●Creation of Delivery Rulebook(Sagawa Express)

Providing Safe and Secure Services■Initiative

Building an Organization of Diversity and Inclusion

3. Quality

24

CSR Report

Promoting Sustainable Procurement
Building a Responsible Management Foundation

Contributing to Communities

SG Motors, which operates vehicle
maintenance, vehicle sales, and body sales
businesses, held a Mechanic Contest in whichmechanics from each site competed basedon their vehicle inspection and diagnosis
skills and knowledge for the first time in fiscal
2018. The contest was planned to improve thelevel of skill and level of knowledge of vehicle
maintenance, which is one of the company’s
main businesses. 34 mechanics in 17 teams were chosen for each business site from among
approximately 400 mechanics. The contest had written and practical parts.

Promoting Environmentally Friendly Business Activities●Mechanic Contest (SG Motors)

Sagawa Global Logistics, which operates alogistics business in Japan, holds a Forklift
Operator Skill Contest every year. The
purpose of the contest is to improve the safety
awareness of forklift operators and to improvetheir operating skills and inspection skills. This
was the tenth time the contest was held, anda total of 25 forklift operators chosen from 13
branches nationwide participated, competingwith each other based on their level of specialized knowledge on forklift operation and theiroperation skills for safely performing high-quality work that they have acquired through everyday
operations.

Creating New Value Through Comprehensive Logistics Solutions

SG Moving, which provides services suchas moving transportation, installationtransportation, and special transportation, holds
the Quality Championships every year in aneffort to improve the skills of its employees.
The championships were held for the seventh
time in fiscal 2018, with a total of 24 employees
in 12 teams representing their sales offices
making it to the finals, where they participatedin a combined event (carrying, assembly, andservice) to compete for the best ranking based on the scores given by judges and the total
number of points received in a survey of the audience.

●Forklift Operator Skill Contest (Sagawa
Global Logistics)

Providing Safe and Secure Services●Quality Championships (SG Moving)

Building an Organization of Diversity and Inclusion

3. Quality

25

■Involvement with SDGs
The Group is engaged in “7. Affordable and clean energy” and “13.
Climate action” due to the impact of the use of energy by vehicles andvarious types of equipment in distribution facilities through the logistics business.

The SG Holdings Group engages in voluntary and continuous environmental management byconducting environmentally friendly business activities while seeking to coexist with society andnature.
Environmental Policy
1. Prevention of global warming
We will engage in the reduction of CO2 emissions in our business activities and theprevention of global warming through the provision of environmentally friendly products andservices, and resource-saving and energy-saving activities.
2. Prevention of pollution
We will strive to prevent air pollution, water pollution, and soil contamination in our businessactivities.
3. Promotion of the 3Rs*.
All Group companies will further promote the 3Rs in business activities, contributing to asustainable society.
*The 3Rs refer to Reduce, Reuse, and Recycle.

4. Environmental education initiatives
We will provide environmental education on reducing environmental impact in addition topreservation and regeneration of the natural environment to all Group employees in aneffort to raise awareness of environmental issues.
5. Environmental communication initiatives
We will endeavor to provide active disclosure with the aim of achieving mutual
understanding with local communities, and broadly engage in environmental communication
to children who will be responsible for the next generation.

CSR Report

Building an Organization of Diversity and Inclusion

Promoting Sustainable Procurement
Building a Responsible Management Foundation

Environmental Philosophy

Contributing to Communities

Against the backdrop of the increasing environmental impact of global population growth andeconomic development, the Paris Agreement, aiming to effectively eliminate the CO2 emissions
from human activities, and the SDGs, set to realize a sustainable world, were adopted in 2015.
Not only national governments but also the enterprises that are the actors in economic activities
are expected to be actively involved.
The Group recognizes that engaging in the reduction of environmental impact is the greatest
responsibility of a logistics business operator using many vehicles. For this reason, the SG
Holdings has established an environmental philosophy and an environmental policy, andis engaged in a variety of initiatives based on the themes of climate change, circulation of
resources, and coexistence with nature.

3. Coexistence with Nature.... P37

Promoting Environmentally Friendly Business Activities■Policy

2. Circulation of Resources.... P32

Creating New Value Through Comprehensive Logistics Solutions■Awareness of Social Challenges

1. Climate Change.................. P28

Providing Safe and Secure Services

Promoting Environmentally
Friendly Business Activities

26

Group companies have also appointed CSR personnel, and they all meet biannually (first halfand second half of the fiscal year) to promote activities aimed at the reduction of environmental
impact by sharing information on initiatives and holding workshops.

Flow Diagram of Environmental Data AggregationJapan

The CSR Manager Meeting is also mentioned on page 11.

Eachcompany

Attendees of the CSR Manager Meeting
Company

Send andshare

ReportSG Expert

SG Holdings

Department in Charge

SG Holdings

Public Relations and CSR Unit in the General
Affairs Department

Sagawa Express

Environmental Section in the CSR Promotion
Department

SG Motors

CSR Promotion Office

Other Group companies

Departments related to management and generalaffairs

Input
Forms suchas invoices

Environmental
systemOverseas
Certain Group
companies

ReportCSR Report

Promoting Sustainable Procurement●CSR Manager Meetings

Building a Responsible Management Foundation

The CSR Committee is also mentioned on page 11.

●Japan: Forms related to fuel, electricity, and water are consolidated in SG Expert, which
operates a shared service business.
●Overseas: Similar forms are aggregated for each Group company.

Contributing to Communities

The CSR Committee holds quarterly meetings, attended by SG Holdings directors to discussand share information on policies and initiatives for ESG activities. Besides, some Group
companies (SG Realty, SG Moving, SG Fielder, etc.) also have their CSR Committees holdmeetings.

In the SG Holdings Group, SG Holdings gathers environmental data for Japan andoverseas, and each company implements efforts aimed at reducing environmental impact
accordingly. The same system is used to centrally manage domestic environmental data, andmanagement is performed by each company overseas.

Promoting Environmentally Friendly Business Activities●CSR Committee

Creating New Value Through Comprehensive Logistics Solutions●Environmental Data Management System

Providing Safe and Secure Services■Systems

Building an Organization of Diversity and Inclusion

Systems Related to the Environment27

Achieved -2.7% change
year on year●SG Moving: -1% year-on-yearchange in CO2 emissions (total)

Achieved -7% change
year on year●SG Motors: -1% year-on-yearchange in CO2 emissions (perunit of sales)

Achieved -8% change
year on year

As a result of initiatives implemented in fiscal 2018, Sagawa Express, SG Moving, and SG
Motors all achieved the goals related to the reduction of CO2 emissions in each company. We
will continue working to reduce CO2 emissions through both tangible and intangible aspects,
which respectively include the adoption of next-generation vehicles and LED lighting, andtransportation efficiency improvement and modal shift.

CSR Report●Sagawa Express: -1% year-onyear change in CO2 emissions(total)Promoting Sustainable Procurement

Fiscal 2018 Results

Building a Responsible Management Foundation

Reduction of
CO2 emissions
throughout theGroup as a whole

Fiscal 2018 Goals

Contributing to Communities

SG HoldingsGroup

Medium- to Longterm Goal

Promoting Environmentally Friendly Business Activities

Company

Creating New Value Through Comprehensive Logistics Solutions

As a corporate group operating a logistics business, the SG Holdings Group emitted 400,000
tons of CO2 throughout the entire Group in fiscal 2018, and recognizes the impact we have on
climate change. Meanwhile, in the medium to long term, we believe that climate change will
have an extremely large impact on the continuity of business, such as stronger environmental
regulation and an increase in disasters due to climate change.
For this reason, in accordance with our Environmental Policy, we have engaged in a variety
of initiatives such as promoting the use of vehicles and logistics facilities with lower energy
consumption and emissions of greenhouse gases, and limiting the use of energy in businessfacilities as initiatives leading to the reduction of CO2 emissions in business activities.
In addition to continuing these initiatives, we also began supporting TCFD (Task Force on
Climate-related Financial Disclosures) in fiscal 2019. In the future, we will analyze the impact ofclimate change on the Group’s finances, and utilize the resultant risks and opportunities in ourbusiness strategy.

■Goals and Results Related to Climate Change

Providing Safe and Secure Services■Policy on Climate Change

Building an Organization of Diversity and Inclusion

1. Climate Change28Collection anddelivery point B
Collection anddelivery point C

With transfer centerNo transfer center

Region A

Region D

Region A

Region B

Region E

Region B

Region C

Region F

Region C

It is necessary to carry packages directly from each region.

Region D

Transfer
centerRegion E

Region F

Packages are aggregated from each region in atransfer center and carried together to each destination.

●Sagawa Distribution Center (SRC)
SRCs are distribution facilities directly connected to the sales offices of Sagawa Express, andenable the reduction of truck transportation between each process.

Packing

Shipping
inspection

Tagging

Picking●Idling Stop
Sales office

Picking

Inventory

Supplier

Sales office

SRC

3PL functions + Sagawa Express sales office

ReducedService Center

Shipping
destination

Delivery

Sagawa Express has implemented Idling Stop since 1997. When drivers are away from theirvehicles while delivering and collecting to and from customers, and when unloading packages
in sales offices, the key is removed from the ignition to stop the engine in an effort to reduce
emissions.

CSR Report

Promoting Sustainable Procurement

The establishment of transfer centers can reduce the number of trucks used.

Service
CenterBuilding a Responsible Management Foundation●Transfer Centers (Sagawa Express)

Collection anddelivery point A

Contributing to Communities

If a Service Center has been established

Sales office

The Group is working to reduce CO2 emissions throughout the entire transportation/delivery
system. For example, transfer centers and Sagawa Distribution Centers (SRCs) are utilized topromote the improvement of logistics efficiency by limiting the number of trucks used.

Sagawa Express has established Service Centers (SCs) that perform collection and distribution
with hand carts or bicycles, instead of using trucks, at 331 locations throughout Japan. With
three to five fewer trucks run by each location, CO2 emissions and other air pollutants of 1,500
vehicles in total are reduced across all of these Service Centers.

Promoting Environmentally Friendly Business Activities●Improvement of transportation/delivery efficiency

Creating New Value Through Comprehensive Logistics Solutions●Establishment of Service Centers

Providing Safe and Secure Services■Initiatives Related to Climate Change

Building an Organization of Diversity and Inclusion

1. Climate Change

Reduced29Hybrid

Natural gas

Clean diesel

Other

Total

16

1,204

2,858

8,001

14,803

26,882Hybrid truck

Providing Safe and Secure Services

Electric

CSR Report

Promoting Sustainable Procurement
Building a Responsible Management Foundation

Breakdown of Vehicles Owned in Japan

Contributing to Communities

Electric truck

Promoting Environmentally Friendly Business Activities

The Group is promoting the introduction of environmentally friendly vehicles such as electricvehicles, hybrid trucks, natural gas trucks, and clean diesel vehicles, which have a reduced
impact on the environment. In April 2019, trial operation of electric trucks began in the Bunkyo
Sales Office of Sagawa Express. Natural gas trucks reduce emissions such as CO2, NOx(nitrogen oxide) and PM (particulate matter), and hybrid trucks and electric vehicles are able toreduce fuel consumption.
Since June 2018, Sagawa Express has been cooperating with field trials of large LNG(liquefied natural gas) trucks jointly developed by Isuzu Motors and Shell Japan in a first for
the transportation industry in Japan. This will enable LNG trucks to reduce CO2 emissions byaround 10% compared to ordinary diesel trucks.
Furthermore, SG Sagawa Ameroid is transitioning from trucks under old standards (Euro 2) to
new standards (Euro 4 or 5), and replaced two vehicles in fiscal 2018.

Creating New Value Through Comprehensive Logistics Solutions●Introduction of Environmentally Friendly Vehicles

Building an Organization of Diversity and Inclusion

1. Climate Change

Natural gas truck30

In 2004, Sagawa Express began to transport express delivery packages via “Super Rail
Cargo” express railway container cars developed jointly with Japan Freight Railway
Company. Trains run regularly to and from Tokyo and Osaka and transport roughly 10% of
the total shipping volume between Tokyo and Osaka. The total volume transported in both
directions is equivalent to 56 ten-ton trucks.

LegendTruck:

Marine transportation:

Before implementation

Koto Ward,Tokyo

Fukuoka City,
Fukuoka
1,100km 18.0 hours
Total of 1,600 times per year

“Support for Eco Rail Mark”
Sagawa Express has adopted the Eco Rail Mark andsupports the Eco Rail Mark as a logistics business operator
involved in transportation and distribution.
The Eco Rail Mark is a mark given to products and catalogs
if companies and their products are recognized for being
engaged in environmentally friendly railway transportation.

5km 0.5 hours
Total of 1,200
times per year

1,020km 25.5 hours
Total of 300 times
per yearPort of Kanda“Super Rail Cargo” express railway container cars

Koto Ward,
Tokyo

Port of Tokyo

After implementation

Fukuoka City,
Fukuoka
80km 2.0 hours
Total of 1,200
times per year

●Encouraging Transition to LED Lighting
Sagawa Express is encouraging the introduction of LED lighting at sales offices and large
distribution facilities. We have been able to effectively reduce CO2 emissions by roughly 13,000t(approx. 19,000 MW) by introducing LED lighting at 229 locations (+ 11 locations year-on-year)
in fiscal 2018.

CSR Report

Promoting Sustainable Procurement●Transportation by Train

Building a Responsible Management Foundationand labor because a larger volume of freight can be transported at once.

Contributing to Communities

We are engaged in replacing a part of the long-haul transportation from Kanto to Kyushu,
which has mainly relied on trucks, with marine transportation. In fiscal 2018, the “Modal
Shift Utilizing Marine Transportation” implemented with the cooperation of MOL Ferry Co.,
Ltd. and Daito Jitsugyo K.K. was approved as an efficient and environmentally friendly
action pursuant to the Act on Advancement of Integration and Streaming of the Distribution
Business. This has had the effect of reducing CO2 emissions by 52.1% and drivers' driving
time by 90% compared to before the implementation of the modal shift.

Promoting Environmentally Friendly Business Activities

Sagawa Express is promoting a modal shift, which refers to switching from the transportation of
freight by truck to the modes of transportation that have a lower environmental impact, such as
train and ship. Modal shift not only reduces CO2 emissions but also contributes to saving energy

Creating New Value Through Comprehensive Logistics Solutions●Transportation by Ship

Providing Safe and Secure Services●Modal Shift

Building an Organization of Diversity and Inclusion

1. Climate Change

31

●Sagawa Express: Reduction in
the amount of waste produced
compared to the previous fiscal
year

Failed to achieve goal due
to +32.5% change year
on year●Sagawa Express: Reductionin the amount of water usedcompared to the previous fiscal
year

Failed to achieve goal
due to +0.5% change
year on year●SG Moving: -1% change in theamount of copying paper usedcompared to the previous fiscal
year

Failed to achieve goal
due to +18% change
year on year●SG Moving: Increase in thepercentage of green officesupplies purchased comparedto the previous fiscal year

Failed to achieve goal
due to percentage
being approx. 19% in
fiscal 2018 compared
to approx. 21% in fiscal
2017●SG Motors: Promotion ofthermal recycling and material
recycling of waste

Selected an industrial
waste processor capableof thermal recycling andmaterial recycling

As a result of the initiatives implemented in fiscal 2018, both Sagawa Express and SG Moving
failed to achieve their goals. We will analyze the causes of our failure to reach these goals, andconsider measures for improvement to be accomplished in the next fiscal year and beyond. SG
Moving is endeavoring to reduce the volume of copying paper used through efforts such as theintroduction of paperless meetings, but the volume increased compared to the previous fiscal
year due to the expansion of the scope of business.
In addition, the percentage of green office supplies purchased decreased compared to theprevious fiscal year due to the high proportion of items that did not require green purchasing.

CSR Report

Promoting Sustainable Procurement

Fiscal 2018 Results

Building a Responsible Management Foundation

Promotion of
3R businessthroughout theGroup as a whole

Fiscal 2018 Goals

Contributing to Communities

SG HoldingsGroup

Medium- to Longterm Goal

Promoting Environmentally Friendly Business Activities

Company

Creating New Value Through Comprehensive Logistics Solutions

The Group believes that it is its responsibility as a company to reduce the use of various
resources in business activities and cyclically use limited resources by recycling the resources
used as much as possible. In accordance with the Environmental Policy mentioned earlier,
we will promote the 3Rs of reusing, reducing, and recycling resources used in the Group, in
addition to handling reverse logistics related to the processing and recycling of waste throughbusiness in order to contribute to a recycling-oriented society. Furthermore, we will also
contribute to the promotion of the utilization of renewable energy by installing solar power
facilities in some distribution facilities.

■Goals and Results Related to Circulation of
Resources

Providing Safe and Secure Services■Policy on Circulation of Resources

Building an Organization of Diversity and Inclusion

2. Circulation of Resources

32

Material
recyclingCompletion

Reworking●Vehicle-related Recycling
Vehicles used by Sagawa Express and other Group companies are brought to SG Motors,
which recycle them in various ways. Usable vehicles are sold, and other vehicles are also
processed in an environmentally friendly manner such as recycling whenever possible.
Furthermore, efforts are also made to recycle resources such as promoting thermal recycling
using waste oil such as engine oil produced during vehicle maintenance as boiler fuel.
SG Realty Wako
Certifications Obtained by SG Realty Wako
DBJ Green Building Certification

Building Energy-efficiency Labeling System (BELS)

Rank

★★★★★
5 stars (highest rank)★★★★★
5 stars (highest rank)

Main Recycling Items●Recovery and destruction of chlorofluorocarbons produced during vehicle maintenance work
●Recovery and recycling of vehicle oil●Recycling of waste related to vehicle maintenance and body manufacturing●Recovery, replacement, and recycling of waste batteries
Data on Vehicle Replacement in Fiscal 2018
Data on Vehicle Replacement in
Fiscal 2018

Number of Vehicles Sold

Number of Vehicles Recycled

1,859

1,593

266

CSR Report

Promoting Sustainable Procurement

Reconversion
into pellets

Building a Responsible Management Foundation

Crushing andpowderization

Contributing to Communities

Waste materials produced in
the manufacturing process

Promoting Environmentally Friendly Business Activities

SG Realty is developing distribution facilities that lead to stable power supply and reduced
environmental impact, and there are currently 99 distribution sites and distribution centers withsolar power facilities in the Group. The total area of the panel installations is 197,273m2 and thetotal power generated in fiscal 2018 was 27,506MWh.
Furthermore, the latest captive solar power generation system has been installed at SG Realty
Wako, which was completed in February 2018, and annual energy consumption has effectively
been reduced to zero due to the creation of natural energy using solar panels.

SG Motors is developing environmentally friendly “ECO bodies.”
It reduces environmental impact by using plastic panels made by recycling waste materials
produced in the manufacture of cup noodle containers as the interior material for roof panels
and using acacia wood from fast-growing plantation trees as truck bed material.

Creating New Value Through Comprehensive Logistics Solutions●Environmentally Friendly Distribution Facilities●Development of Environmentally Friendly Vehicle Bodies

Providing Safe and Secure Services■Initiatives Related to Circulation of Resources

Building an Organization of Diversity and Inclusion

2. Circulation of Resources

33

Approx. 320,000

GlovesApprox. 530,000 pairs

1. RepairrequestProcess of Making Uniforms(1) T he labels and capsof PET bottles are
removed, and thebottles are washed(2) The bottles arecrushed to produce
PET flakes(3) PET flakes aremelted to produce
fibers(4) S ewn uniforms arecompleted

Business operator

Home appliance mail-ordersales company
Home appliance long-term
warranty company

1. Repairrequest

1. Repair request directly made to Sagawa Express
Repairapplicant2. Collection (Hikyaku PC Express)
3. Delivery of item to repair(Hikyaku PC Express)
5. Delivery of repaired item (Hikyaku PC
Express + cash-on-delivery service)

EcoMark-certified product

SagawaExpress sales
officeHome
Appliance
Repair Center

4.
Implementationof repair

CSR Report

Promoting Sustainable Procurement

Uniforms

Building a Responsible Management Foundation

Purchases Made in Fiscal 2018

⃝Pick-up and Repair of Home Appliances (Sagawa Express)
The Home Appliance Repair Service provides a one-stop solution from the pick-up to theactual repair and return of devices in the Home Appliance Repair Center at the Sagawa
Tokyo Logistics Center.
In addition, the company has been providing nationwide Home Pick-up Services for Used
Small Home Appliances based on the Home Appliance Recycling Act since 2015 as an
outsourcing business from ReNet Japan Inc.

Contributing to Communities

The Group is contributing to the construction of a recycling-oriented society by providing
a variety of “reverse solutions” that utilize expertise in reverse logistics related to theprocessing and recycling of waste.

Promoting Environmentally Friendly Business Activities

The Group is promoting green purchasing in which products with a low environmental impact
are chosen, and as part of this, the uniforms of Sagawa Express use EcoMark-certified products
made by recycling plastic bottles. In fiscal 2018, we purchased roughly 320,000 uniforms(equivalent to roughly 1,790,000 plastic bottles of 500ml). Used uniforms are reused as much as
possible and those that cannot be easily reused are collected and recycled as fuel for ironworks.
We also use EcoMark-certified gloves for Sales Drivers®.

Creating New Value Through Comprehensive Logistics Solutions⃝Reverse Solutions

Providing Safe and Secure Services⃝Adoption of Eco-friendly Uniforms

Building an Organization of Diversity and Inclusion

2. Circulation of Resources34

SG Moving
Collection

DeliveryBusiness
operator
disposing ofbattery

Processing
facility

CSR Report

Promoting Sustainable Procurement
Building a Responsible Management Foundation

Collection request

Contributing to Communities

Japan Auto
Recycling
Partnership

Promoting Environmentally Friendly Business Activities

Disposal application

Creating New Value Through Comprehensive Logistics Solutions

Lithium-ion Battery Joint Collection and Transportation Scheme

Providing Safe and Secure Services●Collection and Transportation of Lithium-ion Batteries (SG Moving)
Since October 2018, we have been conducting the collection and transportation of
automotive lithium-ion batteries used in vehicles such as hybrid cars.
The lithium-ion battery collection scheme that had not been unified among manufacturers
until now has been unified into a scheme in which Japan Auto Recycling Partnershiporganizes processing requests from 16 automobile manufacturers, and these are acceptedby SG Moving, contributing to the improvement of efficiency of recycling of resources.

Building an Organization of Diversity and Inclusion

2. Circulation of Resources

35

■Sagawa Express ■Total for all other Group companies (domestic) ■Overseas(Thousand m3)

Overseas 229

1,000

Overseas 141

900

When Using Foldable Containers

255,802262,245

722,516

723,152

726,480

2016

2017

2018

800

Hospital

No wasteproduced!

Home

No wasteproduced!

Foldable container

700
779,748600

Collection of
foldable container
after delivery of
packageCollection of
foldable container
after delivery of
package

Used in approximately 1,200
instances per year since operation
began in October 2011

747,809

0
2014

2015

(Fiscal year)

Note: Figures from fiscal 2017 and thereafter are the amount used by all domestic companies in the SG
Holdings Group and SG Sagawa Ameroid. Figures until fiscal 2016 are only for Sagawa Express.

CSR Report

Promoting Sustainable Procurement

For example, SG Motors, which requires a large quantity of water for uses such as washingvehicles, collects rainwater in an underground rainwater tank in the Shikoku maintenance plant(Takamatsu Branch), and purifies it before reusing it for washing vehicles and as regular waterused in the plant.

Building a Responsible Management Foundation

For example, the Sapporokita Sales Office of Sagawa Express utilizes environmentally friendly
packaging (foldable containers) instead of using cardboard packaging when transporting
packages for people being hospitalized or discharged at Hokkaido University Hospital. Reducing
the generation of waste, this system lends itself to promoting the creation of recycling-oriented
society through the cost, environmental, and social contribution aspects. In recognition of thiscontribution, in October 2018 the initiative received the Minister of the Environment Award
for Merit in the Promotion of the Creation of a Recycling-oriented Society at the 13th National
Convention on the Promotion of 3R Activities, hosted by the Ministry of the Environment,
Toyama Prefectural Government, and the 3R Promotion Forum.

Contributing to Communities

The Group is engaged in the reduction of water usage to reduce environmental impact andrealize a sustainable business in coexistence with the global environment.

Promoting Environmentally Friendly Business Activities

The Group is engaged in the reduction of waste based on the “Promotion of the 3Rs” inthe Environmental Policy.

Creating New Value Through Comprehensive Logistics Solutions●Reduction of Water Usage

Providing Safe and Secure Services●Reduction of Waste

Building an Organization of Diversity and Inclusion

2. Circulation of Resources

36

Sagawa Express is continually
holding nature experience
training at the Takao 100Year Forest (in Tokyo) for
children who will represent
the next generation to learn
about connections between
nature and people throughexperiences in undeveloped
woodlands. Around 300
children participated in fiscal
2018.

●Rice Cultivation Experience
Activities
The Group also provides ricecultivation experience activities
in Moriyama City in Shiga
prefecture to help children learn
about the blessings of natureand the rich ecosystem growing
in rice paddies. Employees andtheir families, along with local
residents, experience traditional
rice farming, from planting
to harvesting to drying. The
activities drew 217 participants in fiscal 2018.

Forests.
●National Eco Art Contest
SG Holdings and Sagawa
Express hold a National Eco
Art Contest for elementary
school students throughout
Japan. We received 12,720
submissions of artworks basedon the theme of “Aiming for a
World that Continues Forever”
in 2018. The most outstanding
work that received the Ministerof the Environment Awardwas used to wrap around 80
Sagawa Express trucks, whichhave driven mainly in major
metropolitan areas throughout
Japan since March 2019.

CSR Report

Promoting Sustainable Procurement●Takao 100-Year Forest
Project

Building a Responsible Management Foundation●Environmental Awareness for the Next Generation

Contributing to Communities

Sagawa Express provides
on-demand classes on theenvironment for elementary
schools and kindergartens.
A total of 202 classes were
held nationwide with around
21,000 participants in fiscal
2018. Eco activities andforest preservation activities
conducted through thelogistics of Sagawa Express
were introduced with a mixtureof quizzes and delivery
demonstrations. Furthermore,children became morefamiliar with nature throughexperiences such as making
nameplates from thinned
wood sourced from Sagawa

Promoting Environmentally Friendly Business Activities

The SG Holdings Group positions “coexistence of society and nature” as an importantenvironmental initiative, and is engaged in a wide range of environmental communication activities
primarily targeting children who will be responsible for the next generation in accordance with its
Environmental Policy.

Creating New Value Through Comprehensive Logistics Solutions●On-demand Classes on theEnvironment

Providing Safe and Secure Services■Policy on Coexistence with Nature

Building an Organization of Diversity and Inclusion

3. Coexistence with Nature

37

With the cooperation of local NGO Mitsinjo Association Parc Andasibe, Expolanka
Madagascar is protecting the earth from CO2 emitted worldwide through a project toplant 500 trees in soil previously covered by trees. This initiative is a model enabling
future generations to be more considerate of the surrounding environment.

CSR Report

Promoting Sustainable Procurement●Forest Plantation Project in Madagascar

Sagawa Forestry, which owns approximately 700 hectares of Sagawa Forests in Kochi and
Tokushima prefectures, conducts a forestry business while cooperating with local forest
associations to achieve its greatest mission of “protecting the forest cycle.” In Japan, themanagement drive of forest operators has declined due to stagnation of the price of timberin the long term. As a result, forests have become run down due to failure to perform thenecessary maintenance of plantations, and the public benefits normally provided by forests(absorption of CO2, soil preservation, watershed protection, and biodiversity) are being
reduced. Considering such social issues, Sagawa Forestry is contributing to the forest cycle
through the promotion of the utilization oftimber in addition to the maintenance offorests (such as planting, brushing, andtree thinning). In fiscal 2018, the company
created opportunities to come in contact
with wood in everyday life through theutilization of timber from thinned trees asmaterial for the Group’s shared housing,and the sale of wood products suchas home and office building materials,
furniture, and toys. Sagawa Express owns
Tosayamada Forest
approximately 50 hectares of forest in
Takao, Hachioji City, Tokyo, and launched
the “Takao 100-Year Forest Project” in2007 for the coexistence of people andnature, and to restore and preserve thesatoyama, or the local forest, so that it canbe sustained for 100 years. In addition
to the preservation and maintenance offorests, we hold environmental classes for
employees and stakeholders, and promote
activities for raising interest in forests andthe environment.

Building a Responsible Management Foundation

Expolanka Freight (EFL) obtained external certification in fiscal 2018 related to
ISO 14064, which is an international standard on the creation of mechanisms forthe quantification, reporting, and verification of greenhouse gas emissions andreductions. In addition to more accurately understanding the emissions and removals
greenhouse gases up to Scope 3, management of emissions was also improved.

Contributing to Communities●Forest Preservation●Acquisition of External Certification Related to ISO 14064

Promoting Environmentally Friendly Business Activities

Poster for raising
environmental awareness

Environmental Activities of Expolanka

Creating New Value Through Comprehensive Logistics Solutions

Sagawa Express is implementing “Sagawa Express Environmental
Action,” in which all employees engage in eco-activities
focused on monthly themes, to raise environmental awarenessamong employees. The company engaged in the reduction ofenvironmental impact throughout the year such as the promotion ofan energy-saving campaign and paperless operations in fiscal 2018.

Providing Safe and Secure Services●Environmental Awareness for Employees

Building an Organization of Diversity and Inclusion

3. Coexistence with Nature

Use of timber from thinned trees in the Group’s
shared housing completed in fiscal 201838

■Policy

In Japan, due to a shrinking workforce resulting from a declining birthrate and an aging
population, the promotion of work style reforms has become a social challenge. Also, as
economic activity is expanding globally and the United Nations has proclaimed gender equality
as one of the Sustainable Development Goals (SDGs), companies are increasingly being
asked to undertake initiatives fostering respect for human rights. The SG Holdings Group, as
an enterprise with 90,000 employees working worldwide, has developed new employment andlabor systems incorporating diversity and inclusion as well as work-life management, and weare promoting the respect for human rights throughout its entire value chain.

The SG Holdings Group believes that it is people who make the sustainable growth of abusiness possible. About 50% of our employees are regular employees. We work with people ofdiverse backgrounds, in a variety of contract relationships. By creating a workplace environment
where a diverse group of employees can be comfortable working, we are also better able toprovide services that meet the needs of a wide range of customers. To that end, we haveestablished a Group-wide personnel vision and human resources systems, which form thebasis of specific policies and practices. We are striving to make improvements in our corporate
culture. As we persist in these efforts, we conduct surveys that gauge the engagement of
employees in order to understand their current status at work, and we use that as a basis onwhich to formulate our goals and plans.
Work style reforms, diversity and inclusion, and respect for human rights, are important themes
for the Group, and it is in these areas that we perceive the needs of society to be great. Goingforward, we will deepen our discussion of these issues as a group, so that we may develop
policies that are even more effective.

■Involvement with SDGs
Our main business is logistics, and that business involves a lot of people.
Maintaining and raising the morale of our people is an important task for
us. As many of our workplaces are predominated by men, it is our aim to realize Goal 5: Gender
Equality and Goal 8: Decent Work and Economic Growth.

CSR Report

Building an Organization of Diversity and Inclusion

Promoting Sustainable Procurement
Building a Responsible Management Foundation■Awareness of Social Challenges

Contributing to Communities

3. Diversity and Inclusion.........................P47

Promoting Environmentally Friendly Business Activities

2. Labor Practices....................................P41

Creating New Value Through Comprehensive Logistics Solutions

1. Respect for Human Rights...................P40

Providing Safe and Secure Services

Building an Organizationof Diversity and Inclusion

39

●Promoting Human Rights Policy-based Training
All employees of all Group companies are required to familiarize themselves with this humanrights policy, and we are working to ensure that all employees receive training in human rights.
●Harassment Prevention Training
The SG Holdings Group has decided that each of June and December is a “Harassment
Prevention Month” as a major initiative in our drive to create a positive work environmentthat is harassment-free. In such a workplace, the diversity, personality, and individuality of all
employees are respected, which motivates employees to work actively. In Japan, in fiscal 2018
we expanded and intensified our efforts to raise awareness among employees about social
issues, particularly sexual harassment, power harassment, maternity harassment, and moral
harassment.

CSR Report

Promoting Sustainable Procurement
Building a Responsible Management Foundation■Initiatives Related to Human Rights

Contributing to Communities

Preamble
The SG Holdings Group respects and advocates the Universal Declaration of Human
Rights and its goals in regard to human rights. This policy expresses in detail our stanceon human rights based on our Charter of Corporate Conduct and Code of Ethics andConduct.
Respect for everyone's human rights
We will not discriminate on account of gender, race, religion, nationality, ethnicity,
political opinion, sexual orientation (such as LGBT), marital status, pregnancy,
childbirth, medical history, disability, illness, or any other discriminatory basis.
Legal compliance
We will comply with all laws in each country and region. In countries or regions that do
not have strict laws, we will comply with international rules.
Prevention of human rights abuse
We will build and continue to implement a system for “Human Rights Due Diligence”* toprevent occurrences of human rights abuse.
Prohibition of child labor and forced labor
We will prohibit work by children under the minimum working age designated by thelaws in each country or region. We will also prohibit forced labor. In addition, we will
request our business partners to also prohibit child and forced labor.
Avoidance of Complicity in Human Rights Abuse
We will not be complicit in the abuse of human rights. In addition, we will strive to avoid
complicity through receiving benefits or the silent condoning of complicity.
Response to Occurrence of Abuse
We will determine countermeasures to be implemented in the event of human rights
abuse. We will protect the victim of abuse and the informer, and work to promptly andfairly resolve the situation.
Safety and Health
We will prioritize safety in the workplace and promote the health of all employees.
Transparency and Promotion of AwarenessWe will report the activities of the SG Holdings Group with transparency.
We will continue to promote awareness of the "SG Holdings Group's Human Rights
Policy" among our employees and will request our business partners to respect andenforce human rights.

Promoting Environmentally Friendly Business Activities

As our business accelerates globally, the SG Holdings Group is committed to a
corporate policy that respects the human rights of all of our stakeholders. For thatreason, we established the SG Holdings Group’s Human Rights Policy to broadly
declare and raise awareness about our commitment both inside and outside of theGroup. This policy articulates in very concrete terms our concept of human rights basedon the SG Holdings Group Charter of Corporate Conduct and Code of Ethics andConduct.

For the purpose of prevention and early discovery of wrongdoing within the Group, we haveestablished “Internal Whistleblowing Regulations,” which form the basis of our SG HoldingsGroup Compliance Hotline. This is a means that allows employees, their family members,
and people from partner companies to report violations of law, company regulations, codes ofconduct or ethics by anyone within the Group. Communications may be in Japanese, English,
or Chinese. Since 2017 we have been operating external contact points, and we are working toprotect whistleblowers. Our Internal Whistleblowing Regulations stipulate that people who filereports, or other people cooperating in inquiries, must not be mistreated.

Creating New Value Through Comprehensive Logistics Solutions

Human Rights Policy■Systems Related to Human Rights

Providing Safe and Secure Services■Guidelines Related to Human Rights

Building an Organization of Diversity and Inclusion

1. Respect for Human Rights*Human Rights Due Diligence: process to recognize, prevent, and respond to any negative impacts
on human rights.
40

9.5% reduction for drivers (YoY)

Creating a friendly work
environment

Continually seize equaland fair opportunities toproactively and boldly takeon new challenges without
fear of failure.

Higher Motivation
Reward people for work
toward goals, achievement,
and success.

Shining Individuality, A Connection Mentality,
and the Widening World- Challenge for Innovation -Time Management
Achieve maximum
performance within a set
time frame to create added
value.

Greater Skills
Take responsibility for
one’s role and put passion
into continuous learningand development to growas an individual.

Shining Individuality
We want each person to further their individuality, hone that individuality, and shine
more than anyone else.
Connection Mentality (Spirit)
Everyone should share a common spirit and build solidarity. We will seek to movecontinually toward a new future without ever forgetting the “hikyaku no kokoro” (spirit of
Edo-era express messengers), which is the cornerstone of the Group’s foundation.
Widening World
We will take a broad view by connecting with a variety of personalities to expand ourpotential. We will seek to foster new values which hold true not only in Japan but
throughout the world.

●Overtime hours in fiscal 2018―

DomesticGroup
companies
By improving the ways we use
employee engagement surveys,
we are working to create avibrant organization with a “flat”
corporate culture.

Reduction (actual)

Reduction (actual)
3.4% reduction for employees
other than drivers (YoY)●56% affirmative response rate for
employee engagement questions―●49% affirmative response rate
for questions regarding “creating
an environment that makes gooduse of employees”

Note: No goals set for the beginning year of fiscal 2018

In fiscal 2018, through our efforts to reform the way we work, we succeeded in reducing
overtime hours both for drivers and for other employees. We introduced employee engagement
surveys as a new kind of indicator for measuring how easy it is for our employees to dotheir jobs. Going forward, we will strive for further improvement, based on fiscal 2018 as abenchmark.

CSR Report

Promoting Sustainable Procurement●Overtime hours in fiscal 2018―

●Personnel Vision
Fair Field

Fiscal 2018 Results

Building a Responsible Management Foundation

Fiscal 2018
Goals

Contributing to Communities

Medium- to Long-term Goals

Promoting Environmentally Friendly Business Activities

Companies

Creating New Value Through Comprehensive Logistics Solutions

The SG Holdings Group relies on all of its employees to operate independently and in 2012
formulated the SG Holdings Group Personnel Vision with the goal of maximizing the potential
capacities and individuality of each employee. The Personnel Vision describes clearly anorganizational culture aimed at developing human resources and diversity of work styles andemphasizes the importance of each employee working with autonomy.

■Goals and Results Related to Labor Practices

Providing Safe and Secure Services■Guidelines Related to Labor Practices

Building an Organization of Diversity and Inclusion

2. Labor Practices41

1. Function-based grade level system
2. M/A (Manager/Associate) promotion evaluation system
3. GM (Group Manager) human resources system
4. GS (Group Staff) skills development system
5. Rotation system●Impartial Appraisal Systems
We have introduced an appraisal system for the purpose of properly evaluating employees
based on their contribution to our business and their performance of the role and action requiredof their function-based grade level. In addition, we have introduced a results-based bonus
system for some employees.

CSR Report

Promoting Sustainable Procurement

The SG Holdings Group offers benefits for employees of Group companies in Japan throughthe general incorporated foundation SGH Mutual Aid Society. The Mutual Aid Society operates
with three concepts: (1) create a workplace where people feel secure, (2) promote healthy
environments, and (3) create opportunities for people to enjoy living -- in three categories:
benefits, discounts & information, and experiences & participatory events. This creates greater
loyalty on the part of employees and their families, creating an environment where employees
find greater satisfaction in their work and stronger support for their lives. For retirees andcommissioned employees (Shokutaku), the Society also supports OB/OG clubs, publishes clubbulletins, and hosts gatherings.

Building a Responsible Management Foundation

Group-wide Human Resources Systems (in Japan)●Operation of Employee Benefits by SGH Mutual Aid Society

Contributing to Communities

Beginning in September 2012, the SG Holdings Group initiated Group-wide human resources
systems aimed at leveraging human resources across the Group’s companies in Japan. The
goal is to train highly competitive human resources by effectively mobilizing employees in a waythat leads to maximum self-development.

Promoting Environmentally Friendly Business Activities●Group-wide Human Resources Systems

We offer a variety of employee benefit systems over and above the social welfare insurance
required by law. Group-wide, the SGH Mutual Aid Society, a general incorporated foundation,
began offering employee benefit services in 2017. At the same time, we have also introduced
retirement pay systems, including a defined contribution pension system, as well as an
employee stock ownership system.

Creating New Value Through Comprehensive Logistics Solutions

We at the SG Holdings Group have instituted a variety of systems aimed at providing fair andequal opportunities for our employees, to create an environment where they feel they cancontinue to work with peace of mind.

●Employee Benefit Systems

Providing Safe and Secure Services■Various HR Systems

Building an Organization of Diversity and Inclusion

2. Labor Practices

42

Creating an environment to motivate and makethe best of employees

Summary of Survey
This survey was conducted via our website, and covered 64,448 Group employees in Japan.
This is a summary of the survey.
Time of Survey

Survey Participants

February 2019

64,448 Group
employees inJapan

Number of Questions

Response Rate (%)

Neutral29%

Positive

56%

86 questions(each withfive possible
responses)

Neutral37%

Positive

49%

85.8

Hold Workshops Based on Results
We held workshops on survey results, aimed at heads of HR and other organizational units at
Group companies. In these workshops, we first went over the survey results, then discussed
issues of particular importance to the specific organization, and then we thought about actionplans for future improvement. We then monitor progress on these action plans, and measure
what improvement has been made relative to the previous year.

CSR Report

Promoting Sustainable Procurement
Building a Responsible Management Foundation

Environment for Making the Best of Employees

Contributing to Communities

Employee Engagement
Understanding of company strategy guidelines,
motivation, independence, desire to contribute

Promoting Environmentally Friendly Business Activities

Of the 15 total categories, we were most interested in gauging two: “employee engagement,”
which is a measure of employees’ understanding of the company’s strategy, their motivationand independence, and desire to contribute to the company; and “environment for making
the best of employees,” which measures how well we have created the right environment
to motivate our employees to do well. Through the survey, we learned that about half of ouremployees gave affirmative responses to questions that covered these two areas.
In terms of qualitative trends, the Group employees have a strong sense of the company’s
responsibility to society, and it was recognized that our organizational systems have become
more efficient. Starting in fiscal 2019, our aim is to do as well as, or better than, last year. We
will be closely monitoring progress on our action plan, and the improvements we make, so that
our organization as a whole improves.

Creating New Value Through Comprehensive Logistics Solutions

We believe that providing a workplace environment where people want to work is important forour employees, and at the same time, is an indispensable element for our companies to secure
their own competitiveness.
Every year since 2013, we have asked Group employees in Japan to participate in a survey
regarding their satisfaction with their work and the company. Since fiscal 2018, to strengthen
our organization and ensure the growth of our business, we have updated this survey to gauge
employees’ engagement with the company. This has enabled us to keep in touch with whether
our employees understand the company’s aims, policies, and strategies, whether they are able
to apply these ideas in their own work, and whether we have created an environment where
they can be enthusiastic about their work.
Based on the results of these surveys, the CEO of each Group company and the heads of allorganizational structures can analyze the strengths of each organizational unit and identify
points that need improvement, so we can offer feedback to employees. Our goal here is to beable to formulate action plans for dealing with issues, and to create organizations with greatertransparency than before.

Research Results

Providing Safe and Secure Services■Efforts to Support Employee Engagement

Building an Organization of Diversity and Inclusion

2. Labor Practices

43

CSR Report

Promoting Sustainable Procurement
Contributing to Communities

Sagawa Official Communications (SOC) refers to our efforts to achieve direct exchangesof opinions by having executives of Sagawa Express visit employees at our many working
locations nationwide. We started this program in 2013, so that our management policies would
reflect the views of the people working on the front lines.
In fiscal 2018, executives visited 62 business locations, and spoke with 735 employees.
By doing this, we deepen mutual understanding, by communicating the company’s management
strategy to the front-line workers, and engaging in dialogue that helps dispel employees’questions and anxieties about work.
We will continue to promote reform of our corporate culture by listening attentively to the voicesof the workplace so that we can proceed with management policies that are better attuned to
the way we work.

Building a Responsible Management Foundation

At Sagawa Express, we are not just trying to
IT Planning
reduce overtime work. We have organized
Department
ourselves to tackle work style reforms byusing IT to make operations more efficient,
Human
Sales
balancing the amount of overtime by closely
Resources
Department
Department
managing regular work hours, reshaping
Work Style
our organizational culture, and arranging for
Reforms
working styles that meet individual needs.
In fiscal 2018, we established, inside the
Human
Human Resources Strategy Department, aSafetyResources
Promotion“work style reform section,” tasked with driving
Strategy
Department
Department
the reform of our corporate culture. We also
had the IT Planning Department (now the Sales
Department, Business Improvement Section
instead) visit our actual workplaces, to examine specific operations up close, gaining some hints
on how to improve productivity and take inventory of operations.

●Sagawa Official Communications (SOC)

Promoting Environmentally Friendly Business Activities■Systems for Work Style Reforms

To flexibly respond to many changes in society, we are developing policies aimed at allowing
diverse people to display their talents in the best light.
Our reforms are moving us in the direction of a culture where ideas can move from the bottom
up, and be vigorously discussed and debated, so that we can offer our customers a wide rangeof ideas to meet their needs.

Creating New Value Through Comprehensive Logistics Solutions

Since our founding in 1957, we have been in the logistics business, which is a labor-intensive
business, and our Group has now grown to roughly 90,000 employees. It is anticipated thattechnological advances such as drones and AI will greatly change the logistics business in thenear future. With that kind of future in mind, “employees” are the most important element of our
growth strategy, and we recognize that, as society changes, we will have to change the way we
work.
More specifically, our core company, Sagawa Express, has been experiencing greater
shortages of labor as the number of packages handled increases due to the growth of
e-commerce market. We need to increase productivity for each and every employee. At thesame time, one issue we identified was the need to create a culture and systems that allow ouremployees to work flexibly, with enthusiasm and satisfaction, through the various stages of life.
We are making progress in our approach to resolving this issue from multiple perspectives.
We are approaching this issue from a variety of angles: creating a workplace culture that makes
it easy for people to do their jobs, and making use of IT to update the routine jobs and personnel
systems of the past.

■Initiatives to Address Changing Corporate
CultureProviding Safe and Secure Services■Guidelines for Reforming the Way We Work

Building an Organization of Diversity and Inclusion

2. Labor Practices

44

We are also moving ahead in implementation of RPA to automate tasks performed by SG
Experts responsible for indirect operations at Group companies, things like general affairs,
human resources, and accounting.
Many operations are routine, because the large quantity of data extracted from ourcomputer systems is processed using certain rules. These can be automated by robots that
operate night and day. We have identified 57 operations for which this is appropriate, saving
729 person-hours each month. To implement RPA for greater efficiency of operations, weare in the process of preparing standardizations and rules (guidelines) for implementationand development, establishing operations and administrative systems for automation ofoperations, and further expanding the scope of operations where RPA can be implemented.
Group companies’ implementation of RPA through the fiscal year ended March 2019
(automated person-hours / month)
Sagawa Express

297 hours

Sagawa Global Logistics

220 hours

SG Fielder

1,083 hours

SG Expert

729 hours

SG Systems

The towing section of the Trike Cargo vehicle attaches directly to a hand cart, and can be detached again witha single touch of a button (picture at right).

CSR Report

Promoting Sustainable Procurement
Building a Responsible Management Foundation●SG Expert Initiatives

Contributing to Communities

Sagawa Express operates in over 400 locations nationwide. At headquarters, we haveaccess to full information about labor and training, among other things, so that we canadminister in a focused way, to achieve greater efficiency in our operations. In the past,
there were people in every headquarters division and department responsible for gatheringand managing this enormous quantity of data, but starting in fiscal 2018 we held meetingsin each of the 21 sections of the Tokyo headquarters of Sagawa Express, identifying
48 routine operations (totaling 297 person-hours each month) that could be automatedthrough RPA*. As a result, we freed up person-hours that could be devoted to more creative
operations, and this has been very effective.
Another way we are reducing our labor needs to achieve greater efficiency in the workplaceis through the IT Planning Department’s visits to 12 business locations (9 sales offices,
3 service centers) in fiscal 2018, to observe and identify operations there. In fiscal 2019,
we formulate tangible policies based on the results of our surveys, and make progressdeveloping systems for implementation.

Trike Cargo is a new type of pickup/delivery vehicle where the weight of the cargo has no direct
impact on the vehicle. It was introduced by Sagawa Express on an experimental basis in 10
locations in fiscal 2018. It is anticipated that these vehicles will be able to be used by a wide
range of people, including women, and people without driver’s licenses, helping to improve
efficiency of operations and create an environment where people find it easier to work.
Compared with using hand carts or bicycles to make pickups and deliveries, Trike Cargo canhandle greater loads of up to 150 kg at a time, reducing the number of trips back and forth tothe distribution facility. This will make operations more efficient, and allow operators to serve awider geographic area.
By employing a "synchro system," the new vehicle runs safely with its two front wheels in sync;
it is better at dealing with abrupt changes in ground level, stays upright even when parked on
slopes, and handles well on sharp curves and slippery road surfaces.
A hand cart can be attached directly to the towing section of the vehicle, and can be locked onor released with a single touch, making loading/unloading very easy and making operations
more efficient. We plan to have about 100 units of Trike Cargo in operation by the fall of 2019.

Promoting Environmentally Friendly Business Activities(2) Introduction of Trike Cargo, Pickup/Delivery Using Assisted Trikes●Sagawa Express Initiatives

Creating New Value Through Comprehensive Logistics Solutions(1) Introducing RPA to Replace Routine Tasks

Providing Safe and Secure Services■Efforts to Improve Operational Efficiency

Building an Organization of Diversity and Inclusion

2. Labor Practices

485 hours
Total

2,814 hours*RPA: Robotic Process Automation, where software robots automate operations/processes.

45

Group-wide Training Program (Excerpts)
Details
Training in Asia

Aiming to strengthen leadership skills, communications skills, andthe ability to deal with a foreign culture during a roughly 10-day
stay in Southeast Asia or South Asia.

Sending Trainees Abroad

Screening is by application. Our aim is to touch the vital points ofour foreign and domestic business by giving people an opportunity
to study business abroad for a certain period, to make them awareof the value our own business provides.

Bright Future Vision Committee

We have been doing this since 2013, mainly with young people,
because we want to train the leaders of tomorrow.

SGH University

In 2017, we started to see this as a venue for learning basic
business literacy. Classes may take the form of group training or
e-learning.

Next-generation Leader
Development Training

We conduct training for mid-level employees chosen from amongassistant managers and managers, to develop the humanresources who will lead the next generation and reform ourorganizational structure.

Training by Level

This is an opportunity to learn the things needed for roles at every
level.

●Training in Asia
The Southeast Asia course visits Vietnam,
China, and Thailand, while the South Asia
course visits India and Sri Lanka, between Julyand October. The 54 participants are drawn
from across the Group.
In this training, participants deepen theirunderstanding of the business and uniquecharacteristics of the countries they visit,
by observing companies, interacting withbusinesspeople, and through fieldwork, andgroup presentations. They also learn about how
to do business with people from another culture
while communicating in another language.

CSR Report

Promoting Sustainable Procurement
Building a Responsible Management Foundation*OJT: On-the-job training. Training by doing a job in the workplace.

The SG Holdings Group opened SGH
University in March 2017. The school wasestablished to provide an environment
where employees with a desire to learn andthe ambition to explore new avenues intheir careers can study independently andfurther their self-development. The university
supports career development at all levels
by offering group training for selected or
general participants and optional training on
freely chosen subjects, and e-leaning is alsoavailable.

Contributing to Communities●SGH University

Promoting Environmentally Friendly Business Activities

In our training functions at SG Holdings Group, we view our personnel as an irreplaceable
resource, and our entire group is occupied with four main themes: training leaders who cancreate value, creating a workplace culture where a variety of people can work comfortably,training professionals, and strengthening the foundations of our business.
More specifically, our aim is to promote growth through OJT*, but we also encourage individuals
to add to their skills and knowledge through Off-JT, to develop the leaders who will takeresponsibility for our business in the future.

Creating New Value Through Comprehensive Logistics Solutions■Personnel Training Initiatives

Providing Safe and Secure Services■Guidelines on Personnel Training

Building an Organization of Diversity and Inclusion

2. Labor Practices

46

DomesticGroup
companies

Fiscal 2018 Goals

Fiscal 2018 Results

Percentage of female employees: 35%(target for end of FY 2020)

―

32.4%

Percentage of female managers: 10%(target for end of FY 2020)

―

7.6%

Increase in female executives―

3 people

To meetgovernment target
for number of
employees withdisabilities

2.28%

To meet government target for number of
employees with disabilities[Reference] Ministry of Health, Labourand Welfare mandates 2.2% (as of April
1, 2019)

25

25.7

20
15
10

5.7

5

7.6

10

As of
March 31,2018 Result

As ofMarch 31,2019 Result

As ofMarch 31,2021 Target

As of
March 31,2018 Result

As ofMarch 31,2019 Result

As ofMarch 31,2021 Target●Female Employee Ratio
Our core business, Sagawa Express, and Group companies in Japan, are taking steps so thatpeople with outstanding capabilities join us as regular employees, promoting quasi-employees
and partner employees to regular employees, and promoting the hiring of new graduates andmid-career workers, and we are experiencing robust growth.
●Female Managers Ratio
We are actively encouraging women to become managers, and the percentage of female
managers has been steadily growing. We will have to show more growth, though, to reach our
final goal. We aim to promote the promotion of women to managerial positions by expanding theareas where women can work, and by supporting their careers.

CSR Report

35

Promoting Sustainable Procurement

30

32.4

Contributing to Communities

35

Building a Responsible Management Foundation■D&I: Goals and Results
Medium- to Long-term Goals

40

0

Our WakuWaku Women’s Project, which is aimed squarely at promoting women’s place in theworkplace, started in 2011. It is now a part of every part of our business, and our Group-wide
goal is to increase the share of our earnings generated by women to 30%. Another of our goals
is, as a top runner in the logistics industry, to make use of women to reform our corporate
culture, and thereby to enhance the position of our industry.
To this end, each of the Group companies has set up a dedicated office or team as well as thehead, promoters, and advisers. At each company, the dedicated office or department under
its CEO as the head is joined by both men and women from both administrative and businessdepartments. Depending on the size of the Group company, we are deploying D&I promotion
people nationwide, with those in managerial or executive positions acting as advisers. We havebuilt systems to ensure that this develops from the bottom up as well as top down.

Companies(%)

Promoting Environmentally Friendly Business Activities■D&I Promotion Systems

Female Managers Ratio

Creating New Value Through Comprehensive Logistics Solutions

The SG Holdings Group works to promote D&I as a way to grow as a company with acompetitive edge that respects diverse values, with a flexible decision-making process anda variety of perspectives. Right now, our company is working hard to do more with a diverse
group of employees who are female, or from other countries, or who have disabilities, or who
are senior citizens. We want to create a workplace environment where all of these people
feel comfortable and enthusiastic about working. Even within the area of diversity, we viewpromoting the participation of women as a particularly important issue. We want to expand
opportunities for women, and promote their promotion to managerial positions. Through avariety of initiatives, we are hoping that readying the proper environment and systems, andreforming our corporate culture, will help women generate new business for us.

Female Employee Ratio

Providing Safe and Secure Services■Guidelines on Diversity and Inclusion (D&I)

Building an Organization of Diversity and Inclusion

3. Diversity and Inclusion

47

●Women's Career Support Training
The Group conducts Women’s Career Support Training led by external instructors for female
employees who are management candidates. Roughly 80 women participated in the training,which was held three times during fiscal 2018. The women learned the importance of diversity
and business skills through discussion with executives and group managers. Taking hints fromthe discussions with active female managers, these women also created a vision for their own
individual careers and action targets to realize that vision.

The Group has established a Diversity
Awards (formerly known as the WakuWaku
Award) to recognize outstanding examples
of women working at the many branch
offices and sales offices of the Group
companies who take initiatives to generate
new business and reform our organizational
culture.
For the Diversity Awards 2018, 201 entries
were made into two categories, "Women’s
Activities Promotion" and "Work Style
Reforms." These were narrowed down to six
teams as nominees.
The Women’s Activities Promotion grandprize went to a team of five women for theirproject on Transportation Management
Systems (TMS)* at the Kyoto branch of
Sagawa Express.
The Kyoto branch has been building up transportation infrastructure through polite sales calls
for TMS charter vehicles that can handle a wide variety of freight items, including large items.
The branch started a team of “TMS saleswomen” working the entire chain from sales to vehicle
arrangements that has succeeded in increasing sales while also boosting morale and motivationof female employees.

CSR Report

Promoting Sustainable Procurement
Building a Responsible Management Foundation*2 Unconscious bias: preconceptions stemming from past experience and “conventional knowledge,” that canturn to prejudice without the person realizing it.

Newsletter “WAKUWAKU WOMAN”

Contributing to Communities*1 Virtual reality (VR): a simulated experience using imagined spaces and behaviors.

●Diversity Awards

Promoting Environmentally Friendly Business Activities

Each year, the SG Holdings Group hold aDiversity Forum, to promote understandingof D&I among executive management andmiddle managers.
In fiscal 2018, we began to use virtual reality(VR)*1 to simulate the experience of LGBT
workers, and workers with disabilities, as away of teaching people how to resolve theissue of managers’ “unconscious bias”*2
stemming from differences in standpoint or position. Roughly 100 managers and supervisors
participated in this exercise.

Sagawa Express publishes internal reports for women aimed
at achieving a widespread, correct understanding of thecompany’s efforts to actively promote careers for women.
These reports cover everything from case studies andspotlights of initiatives taken by women all over the country tointerviews with the CEO and others regarding the company’sefforts to promote diversity, to lessons on business etiquette,content that people can use in their day-to-day work, and hints
at how to resolve problems that only women face.

Creating New Value Through Comprehensive Logistics Solutions●Diversity Forum●Creation of Educational Tools

Providing Safe and Secure Services■Initiatives to Support Women’s Careers andAddress Changing Corporate Culture

Building an Organization of Diversity and Inclusion

3. Diversity and Inclusion*TMS: a general name for a wide variety of logistics solutions, from small charters that handle large freightitems, to specialty transport, joint deliveries, JIT (just in time) deliveries, and intra-factory logistics.

48

Marriage

Pregnancy

Birth

Leave before
birth

Leave after birth

Six weeks beforedue date

Eight weeks after
birth
Birth leave

Seven days
marriage holiday

Three days formenChildcare leave
Until the day
before child’s
third birthday

Nursing care
Leave fornursing care
Up to 180 days

Care leave

Care leave

10 days per year

10 days per year

Reduced working
hours

Reduced working
hours

Wedding gift
(cash)

Childcare

Reduced working
hours

Until the end offourth grade

Three years,
from date ofinitiation

Treatmentof various
conditions

Exemption fromlate-night work
hours

Exemption fromlate-night work
hours

Adjustment ofbreak timeLess overtime
work

Less overtime
work

Going to hospitalduring work
hours

Exemption fromovertime work

Exemption fromovertime work

Relaxation ofcommuting
Adjustment of up
to one hour per
day, up or down

Birth gift

SGH Kids
Garden: nurseryat workplace

CSR Report

Promoting Sustainable Procurement
Building a Responsible Management Foundation

Overview of Our Systems

Contributing to Communities

We have instituted systems to support employees who are working in various stages of theirlives.

Promoting Environmentally Friendly Business Activities

Sagawa Express has introduced swap body
vehicles as a way of creating opportunities
for a diverse group of employees, including
women. In swap body vehicles, the cargo
bed where the packages are loaded can beseparated from the truck cab. The driver does
not need to load or unload the freight from
Swap body truck
the vehicle. The cargo beds can simply be“swapped,” and then the driver can set out forthe destination. The driver can concentratesolely on driving, which opens up these kinds of jobs for women and others who might be at a
disadvantage when it comes to physical labor.
SG Motors, which is in the business of vehicle maintenance and sales, already employs female
mechanics. In instances that require manual labor, for example, to lift heavy items, special tools
can be supplied that might allow women to perform these tasks without undue wear-and-tear on
their bodies. We want to create a work environment that allows employees to work in a varietyof areas, without regard to gender.

■Systems to Support Work-life Management

Creating New Value Through Comprehensive Logistics Solutions●Creating a Work Environment Friendly to
Women

The Group promotes workplace culture reform and system reforms in order to respond flexibly
to the diverse values and family circumstances of employees. By delving deeper into thesequestions, we want to allow employees the chance to choose from among a variety of working
styles, so they will want to work, productively and of their own accord, and we think this willshow strong results.

Providing Safe and Secure Services

We are actively striving to create anenvironment where women can proactively
take up the types of jobs that have been
primarily the domain of men.

■Supporting Work-life Management

Systems■Expanding
Occupational
Opportunities for
Women

Building an Organization of Diversity and Inclusion

3. Diversity and Inclusion

As of March 31, 201949

●“SGH Kids Garden” In-house Nursery School
The Group opened the SGH Kids Garden, ourfirst in-house nursery school, in April 2017. Its
goals are to solve the problem of children left
on waiting lists to enter nursery schools, which
has become a major social issue, promote theactive participation of women in society, andsupport work-life balance. At the nursery school,
we provide a safe environment, and education at
the same level as a licensed nursery school, tosupport Group employees returning to work, andto help support the spouses of employees who
also wish to return to work.

Supporting childcare guidebook for employees (right),
for managers (left)

Work Pattern

Previous “Jisa Biz” Work Schedule
Patterns (Summer 2018)

Current “Winter Jisa Biz” Work
Schedule Patterns

CSR Report

Promoting Sustainable Procurement
Building a Responsible Management Foundation

We have published the "Working Papa andMama Guide," our guidebook for supportingchildcare (one version for employees, anotherfor managers), detailing the support systems thecompany offers for childbirth and child-rearing.
We want to create an environment where people
are comfortable continuing to work. In recent
years, to encourage male employees to take time
off for child-rearing, we added pages describing
the company’s support for male employees tocare for children.

For two months, in summer and winter, SGH
Global Japan participated in the Jisa Biz program
sponsored by the Tokyo Metropolitan Government,
promoting staggered work hours. Employees werepermitted to choose their own working hours,
fitting their individual circumstances. Four work
patterns were set up, starting up to two hours before the normal starting time, allowing people
to commute at times when trains are less crowded, making it easier for them to get to work.
We got good responses from people who actually took advantage of this system: “I was able
to commute early, when the trains are empty, and I could get a seat. It was great!” “I was able
to spend more time with my family.” “This was a good opportunity for me to think about how I
work.”

Contributing to Communities●Supporting Childcare●Promoting a Variety of Working Styles by
Encouraging Flextime

Promoting Environmentally Friendly Business Activities

IKUBOSU Proclamation

In August 2017, 14 companies
In order to support the childcare, caregiving and WLB (work-life balance)of the SG Holdings Group
activities of our employees, we promiseannounced the IKUBOSU
the following:
Proclamation led by the Ministry
1. I will finish my work efficiently and go home early.
2. I will, as far as possible, not make work-related requests onof Health, Labour and Welfare.
public holidays and outside of designated working hours.
3. I will support male employees who need to care for children.
The IKUBOSU Proclamation is
4. I will listen to whatever my employees need to talk to me about.
5. I will take responsibility for reforming the way my employees
a declaration by corporate andwork.
6. I will work for each and every employee to have a fulfilling life, so
divisional managers that they
they can continue to work with a high level of motivation.
will be a boss who understands
the needs of caregivers. They promise their peers and the people who work for them that they
will show due consideration for the need to balance work-life with other commitments such as
child-rearing and nursing care for the elderly, and they will support both the career and the life
circumstances of the person concerned. It is important that the organization show results, but it
is also important that employees be able to achieve balance between work and life.
(The photo at right shows SG Holdings Chairman Kuriwada holding the IKUBOSU
Proclamation.)

Sagawa Financial has made great strides in encouraging employees to take their paid leave,
and in introducing new modes of vacation. We are focusing in particular on establishing systems
for allowing people to take multiple days of vacation in a row, and systems to ensure that, even
if someone goes on vacation, no harm is done to operations. We are rethinking our operations
processes to make them more efficient while maintaining sufficient redundancy.
More specifically, we have introduced new kinds of vacations, including WakuWaku Vacation(special vacation of at least five days in a row by combining paid leave and Saturday/Sunday)
and Anniversary Vacation (paid leave for birthday or wedding anniversary celebrations).
Over 95% of employees are now taking advantage of these new systems, which is helping to
improve employees’ work-life balance.
These programs are receiving positive attention, even from outside the company, and in 2017
we were recognized as a “Tokyo Work-life Balance Certified Enterprise.”Creating New Value Through Comprehensive Logistics Solutions●IKUBOSU Proclamation●Efforts to Encourage Employees to Take Vacation, and the Variety of Vacation Modes

Providing Safe and Secure Services■Efforts to Support Work-life Management

Building an Organization of Diversity and Inclusion

3. Diversity and Inclusion50

(# of people)
100
80

69
56

60

20

38

15

0
FY 2015

FY 2016

FY 2017

FY 2018

FY 2019(as of May)CSR Report

Promoting Sustainable Procurement
Contributing to Communities
Building a Responsible Management Foundation

No. of Foreign Mechanics at SG Motors

Promoting Environmentally Friendly Business Activities●Vietnam●China●Nepal●Myanmar●Indonesia●Peru●Sri Lanka●Taiwan28●Hosting Special Education Students for Work Experience
Sagawa Global Logistics provides workplace experience in partnership with special schools ineach region.
First-year students of high school become familiar with logistics operations through visits toworkplaces. In the second year and beyond, they undergo practical training in preparation for
future employment. Through these activities, the Group hires several students each year (9in April 2019). Moreover, since alumni look after younger employees from the same school,
guardians tell us a comfortable work environment is created that allows them to feel a sense of
security.

Overview of Employees, by Nationality

40

We are also working to create an environment in which persons with disabilities can manifest
their individuality and capacities. We provide opportunities to learn about the employment of thedisabled. The rate of persons with disabilities employed by the Group in Japan is 2.28% (as ofJune 1, 2018).

Creating New Value Through Comprehensive Logistics Solutions

SG Motors, whose business is vehicle maintenance, manufacturing, and sales, employs foreignexchange students who have studied at auto mechanics technical schools in Japan as auto
mechanics. As of May 2019, the number of foreign nationals employed as auto mechanics
reached 69, or about 17% of all automotive mechanics, from eight countries.

■Workplaces Employing People with Disabilities

Providing Safe and Secure Services■Workplaces Where Foreign Employees Are
ActiveBuilding an Organization of Diversity and Inclusion

3. Diversity and Inclusion

51

The Silver HR Center is a publicservice corporation with branches
certified by prefectural governors,
which finds temporary, short-term,
or light jobs that are closely tied
to their localities and suitable forsenior citizens. It accepts requests
from companies, families and publicbodies, and assigns members, who
are generally at least 60 years ofage.

●Yonago Area Wide-area Silver HR Centerin Yonago City, Tottori Prefecture●Kitakyushu City Silver HR Center,
Fukuoka Prefecture●Local residents group Sakaecho
Chiikizukurikai, in Otsubocho, Imari City,
Saga Prefecture●Yokohama Silver HR Center

CSR Report

Promoting Sustainable Procurement
Building a Responsible Management Foundation

What is the Silver HR Center?

Contributing to Communities

Results of Cooperation

Promoting Environmentally Friendly Business Activities

The shortage of labor is getting more serious, becoming a real social issue, while demand
for logistics services is growing every year. The warehouse sector is no exception. Sagawa
Global Logistics is in the logistics business in Japan. In its workplaces, it directly employs manyolder workers, alongside workers from the Silver Human Resources Center, and others fromsubcontractors. Many people age 60 and over bring their abundance of experience and make avaluable contribution.
Many workers age 65 and above are also receiving pensions, and need to adjust their shifts
to meet their own needs. This has advantages for both sides, because the workload in thewarehouse ebbs and flows with the seasons, depending on the volume of commerce.
At the operations center, senior workers are involved mainly in distribution process procedures
such as picking, inspection, price-tagging, and packing. The average work history of the roughly
500 workers age 60 and above is long, at about 10 years. Because they can be relied on towork in shifts, we think they will be an even more important component of our workforce going
forward.

At the Sagawa Express Kitakyushu Sales Office, some delivery services that do not require avehicle are performed by personnel assigned by the Kitakyushu Silver HR Center.
This initiative began in August 2017 as a three-party alliance. The Kitakyushu Silver HR Centerand the city government wanted to find jobs for senior citizens, while the Kitakyushu Sales
Office of Sagawa Express was facing difficulty because the declining population was making
it hard to hire sufficient personnel. Working with outside partners to offer delivery services
started as a part of Sagawa’s solution to its problem. The delivery personnel use hand carts
and bicycles to deliver mail and small packages from delivery depots, small logistics sites. The
city is divided into very small service districts, so the depots work closely with customers intheir immediate area. This results in a higher level of service, providing employment support forsenior workers and achieving a high degree of customer satisfaction.
This initiative was recognized with the Grand Prize for work style reforms in the Diversity
Awards 2018, which is our internal commendation system. The company is advancing similar
efforts throughout the Kitakyushu area, as other nearby sales offices work with Silver HR
Centers to offer delivery depot services.

Creating New Value Through Comprehensive Logistics Solutions●Cases of Older People Working at Sagawa Global Logistics●In Kitakyushu, Sagawa Express Offers Delivery Services Staffed by Silver Employees

Providing Safe and Secure Services■Creating a Work Environment Friendly to Seniors

Building an Organization of Diversity and Inclusion

3. Diversity and Inclusion

52

The logistics business market in Japan, including trucks, railways, shipping, airfreight, andwarehouses, is valued at approximately 26 trillion yen, of which about 15 trillion yen (fiscal
2015) is attributed to the trucking business. This indicates that the business of the SG HoldingsGroup provides an essential function to society. Meanwhile, the logistics business is facing
a variety of social issues such as the shortage of labor due to the aging and shrinking ofJapan’s population, undeveloped logistics networks in developing countries, and increasing
demands to reduce the impact on the global environment. As a business operator handlingsocial infrastructure, the Group believes it as its responsibility to address issues such as thelabor shortages and climate changes through the improvement of efficiency of logistics andlabor savings through the utilization of IT and machinery. Furthermore, we provide new value tosociety in coordination with our business partners by providing customized services that are ourstrength, such as international logistics and special transporting.

The Group will focus on the two following points to continue to provide people with convenient
lifestyles through our logistics business.

Source: Current conditions surrounding logistics “butsuryu wo torimaku genjou ni tsuite” (Logistics Policy
Division, Ministry of Land, Infrastructure, Transport and Tourism, October 11, 2018)■Involvement with SDGs
We will contribute to the reduction ofenvironmental impact, the creationof livable communities, and thedevelopment of industry through the
improvement of efficiency of logistics and the utilization of technology.

1. Provision of evolved logistics solutions
Rather than simply transporting goods, we create efficient transportation schemes, offer
logistics services with high added value and develop new services. By utilizing the various
resources within the Group, we will provide comprehensive logistics services while
responding to changes in the market environment.
2. Promotion of digitalization and technologies
Improvement of efficiency is essential for continuing to stably provide infrastructure in theform of logistics. We will continue to step up our efforts by promoting digitalization andintroducing the latest technologies in our distribution centers.

CSR Report

Building an Organization of Diversity and Inclusion

Promoting Sustainable Procurement
Building a Responsible Management Foundation■Policy

Contributing to Communities■Awareness of Social Challenges

Promoting Environmentally Friendly Business Activities

2. Promotion of Digitalization and Technologies.....P58

Creating New Value Through Comprehensive Logistics Solutions

1. Provision of Evolved Logistics Solutions.............P54

Providing Safe and Secure Services

Creating New Value
Through Comprehensive
Logistics Solutions

53

-Handling of facility logistics in
Nihonbashi Muromachi Mitsui Tower
among other results-●Introduction of temperaturecontrolled storage within company
warehouse in Thailand●Launch of international express
service in Nepal●Launch of railroad transport service
in China
among other results-●Relocation of laboratories andhospitals●Expansion of services in logistics
payment
among other results

Promotion ofinternational logistics
and provision of highvalue-added services
overseas

Approach to wider
target audience bydeeper penetration
and additional value
creation

During fiscal 2018, we continued to handle new facility logistics as a contribution to building
communities through more efficient logistics. We also endeavored to expand services with highadded value in the local subsidiaries operated in various countries overseas.

CSR Report

Contribution to building
communities throughmore efficient logistics

Promoting Sustainable Procurement

Results in Fiscal 2018

Building a Responsible Management Foundation

Fiscal 2018
Goals

Contributing to Communities

The SG Holdings Group has formed the “GOAL®” project team centered on Sagawa Express
to resolve companies’ management issues through overall optimization of logistics. “GOAL®”
consists of regional teams with a total of approximately 200 members nationwide. It resolves
customers’ logistics issues across the Group.
Proposals cover a wide range of areas, spanning customers' entire supply chains fromprocurement, storage, and processing of raw materials and parts overseas, to delivery to storesin Japan.
Furthermore, it involves not only logistics itself, but also the creation of systems enabling thecentralized management of the flow of goods and the provision of a wide range of settlement
services to both companies and individuals. We have also established a system enabling us
to meet a wider range of needs by working not only within the Group but also partnering with
Hitachi Transport System in recent years.
In order to continue to provide optimal logistics solutions to customers in the future, we willfurther expand the Group’s international network and large-scale logistics infrastructure.

SG Holdings Group

Medium- to Long-term
Goals

Promoting Environmentally Friendly Business Activities

System for Provision of Evolved Logistics
SolutionsCompany

Creating New Value Through Comprehensive Logistics Solutions

We will strengthen our system, which enables us to propose logistics solutions that meetcustomers’ needs by covering a wide range of areas with the Group’s services from upstream
to downstream in the supply chains of customers in a variety of industries and businesscategories.
For existing customers, we will closely study potential needs and make proposals. At the sametime, we develop and deploy new services for new markets while also considering collaboration
with other companies.

Goals and Results Related to Provision of Evolved
Logistics Solutions

Providing Safe and Secure Services

Policy on Provision of Evolved Logistics Solutions

Building an Organization of Diversity and Inclusion

1. Provision of Evolved Logistics Solutions

54

Goods

Offices
Facility
maintenance

VehiclesCentralmanagement
PeopleLogistics
consultation
StoresInformation

Distribution
management center

Improvement of efficiency of logistics through Smart Delivery®
Sagawa Express
sales officeDirect delivery to stores and offices,
facility management, irregularincoming and outgoing transportation(external business operators entering
the facility for business purposes)

Advance permit system

Vehicle management

Advance permit system

Handling of express
package delivery services

Management offacility accessExpress package delivery
services, milk runs, etc.

Facility-widecollection
and delivery

Managementof lines of
movement,
maintenanceof equipment
Issuing andchecking permits

Adjustmentof operation of
freight elevators

CSR Report

Promoting Sustainable Procurement
Building a Responsible Management Foundation

Normal delivery of packages separately from multiple companies

Residences
Tenant inquiries(support services)

Contributing to Communities

Sagawa Express has been expanding the “Smart Delivery®” services to dramatically increase
efficiency from procurement (stocking) deals to receipt of goods (warehousing/inspection)
between businesses.
Packages usually delivered separately by different suppliers are changed to delivery by Sagawa
Express, which gather and sort packages by product category or location in its transfer centersand sales offices in advance before delivering them to the final destination as specified by theconsignee. Support is also provided for time slot-specific delivery, including late night and earlymorning.

Promoting Environmentally Friendly Business Activities●Smart Delivery®

Sagawa Express and World Supply provide “Facility Logistics”
for centrally managing distribution staff, goods, vehicles, andinformation entering and exiting facilities.
Having managed logistics for GINZA SIX, Tokyo Skytree®, andTokyo Midtown, the companies also extended these services to
Nihonbashi Muromachi Mitsui Tower in 2019. Sagawa Express
and World Supply combined have received contracts with 141
facilities in total.
Hundreds of vehicles of businesses making direct deliveries
to offices and stores each day need to be managed to ensure
there is an optimal number of vehicles flowing in to prevent
traffic congestion around the building, and the time parked in
Nihonbashi Muromachi
unloading areas must be kept as short as possible. In the large
Mitsui Towercommercial facilities where the Group handles facility logistics,
smooth logistics are achieved within the facilities by using a preregistration system for delivery vehicles to speed up entry procedures and ensure security.
The adoption of facility logistics helps mitigate traffic congestion around facilities and also
reduce the environmental impact.

Creating New Value Through Comprehensive Logistics Solutions

Large commercial facilities such as shopping malls used by many shoppers and large building
complexes in redevelopment projects have 200 to 300 tenants. Commonly, hundreds of delivery
trucks enter and exit such facilities every day as each tenant places orders for goods to various
business operators. At present, it is necessary to address a variety of issues around thesefacilities, such as traffic congestion and environmental problems.
The Group offers services that lead to the resolution of logistics issues in large complexes
and commercial facilities, such as Smart Delivery® for improving the efficiency of the processfrom purchasing to warehousing and inspection, and Facility Logistics for centrally managing
distribution staff, goods, vehicles, and information for large commercial facilities. Through these
services, we contribute to the creation of communities starting with large commercial facilities
through the improvement of efficiency of logistics. This includes mitigating traffic congestion andreducing environmental impact by reducing the number of vehicles inside and outside facilities,
enhancing security, and also implementing safety measures for pedestrians in the areas
surrounding facilities.

●Facility Logistics

Providing Safe and Secure Services■Contribution to Building Communities throughmore Efficient Logistics

Building an Organization of Diversity and Inclusion

1. Provision of Evolved Logistics Solutions

55

SG Sagawa Vietnam and its affiliates signed a business partnership memorandum with AEON
Vietnam in December 2018. The two companies have collaborated in logistics since 2014, andwith the conclusion of the memorandum of understanding, they will promote collaboration instable, safe, secure, and highly reliable business in Vietnam, which is expected to grow further
as a consumer market.

●Launch of International Express Service in Nepal
SG Sagawa (Thailand) concluded an agency agreement with Starlight Express, which is a
Nepalese air freight company, and began an international express business originating in Nepal
in January 2019. Starlight Express is one of the largest companies in the industry in Nepal,
and is an air freight forwarder with an excellent network, including serving as a freight agent forJapan Airlines. This partnership has made it possible to provide services such as overseas air
freight delivery and international package delivery services centered on Japan to companies
and individuals in Nepal.

CSR Report

Promoting Sustainable Procurement
Building a Responsible Management Foundation●Signing of Business Partnership Memorandum with AEON Vietnam

In December 2018, SG Sagawa (Thailand)
newly installed and began operation of atemperature-controlled storage at a fixed
temperature (25°C) within its own warehouse
operated within the Bangkadi Industrial
Park in Pathumthanee in Northern Bangkok.
In recent years, retail stores such as
supermarkets and convenience stores haveincreased in the retail market in Thailand, andthe number of products such as food and precision components requiring quality management
is increasing. In order to respond to these needs, equipment such as air conditioning andinsulation were installed in the warehouse to enable fixed-temperature (25°C) management.
The new facility is capable of offering safe, secure, and high-quality temperature-controlled
distribution services as a logistics base that leverages the geographical advantage, whichallows it to be utilized as a hub for products to be exported from the industrial park as well asdelivery to central Bangkok and other parts of the country by making use of the main highway
nearby.

Contributing to Communities

Expolanka Freight has partnered with Emirates and Qatar Airways to conduct global freightarrangement between the Middle East/Asia and the United States by using regional airports in
the United States to avoid frequently congested hub airports.
Utilizing regional airports makes it possible to resolve operational safety and environmental
problems along with problems with freight delays, enabling us to expect operations to run ontime.

●Introduction of “Temperature-controlled
Storage” within Company Warehouse in
Thailand

Promoting Environmentally Friendly Business Activities●Realization of Regular Freight Service in Partnership with Emirates and Qatar Airways

Poly-Sagawa Logistics, which is the local subsidiary in China, began full-scale operation ofrailroad transport service extending from North China to South China in April 2019 after asix-month trial that began in October 2018. Due to the diversification of transportation modes
in China in recent years, and environmental issues also being focused upon within China,
railroads have been gaining attention due to the effect they have in reducing environmental
impact. Compared to transportation by truck, railroad transportation with a fixed time schedule isexpected to provide certain lead times and improved operational safety.

Creating New Value Through Comprehensive Logistics Solutions

The SG Holdings Group conducts business in overseas markets centered on the rapidly
growing Asian region through SG Holdings Global, which is the overseas business managementcompany located in Singapore. In addition to operating a freight forwarding business, which is
our core business, we also provide high value-added services from upstream to downstream
in customers’ supply chains by strengthening businesses surrounding logistics, such as
customs clearance, 3PL (comprehensive logistics outsourcing for enterprises), and local landtransportation. We will continue to enrich the lives of people living in Asia through the creation oflogistics infrastructure in each country in the future.

●Launch of Railroad Transport Service in China by Poly-Sagawa Logistics

Providing Safe and Secure Services■Provision of High Value-added Services Overseas

Building an Organization of Diversity and Inclusion

1. Provision of Evolved Logistics Solutions

56

Transportation of large analytical instruments

Sagawa Humony operates the VERY CARD service enabling people to send telegrams fromthe Internet. In addition to frequently used telegrams of congratulations and condolences, thecompany provides products that combine telegrams with gifts such as traditional crafts andflowers, enabling them to be used in all kinds of situations such as birthdays, Mother’s Day,
Respect-for-the-Aged Day, and promotion celebrations.
This has enabled telegrams to evolve from a simple means of communicating information toa tool for connecting people’s feelings. While utilizing our strengths as a logistics business
operator, we will contribute to the everyday stimulation of communication in a variety ofsituations.

Mitsuboshi telegram service combining
traditional crafts with telegrams

A telegram accompanied by flowers,
which can be used in variety of situations
such as Mother’s Day

CSR Report

Promoting Sustainable Procurement
Building a Responsible Management Foundation●Expansion of Telegram Services Connecting Feelings

Contributing to Communities

SG Moving handles the relocation of scientific laboratories of national universities and otherinstitutions throughout the country and the relocation of hospitals. The company handled 110
university relocations spanning from single laboratories to entire campuses.
A period of several months to a year is required from the acceptance to the completion of workon a large-scale relocation project for a laboratory, hospital, etc., and meticulous planning andtechnical capabilities are needed. Relocation of laboratories includes extremely large precision
instruments used in analysis, and many of these require transportation technology such as notallowing the equipment to tip on an angle of 10 degrees or more.
In addition, high-quality relocation is achieved by making dedicated lists of the various tools
within a laboratory numbering in the tens of thousands, and utilizing unique expertise to ensure
there are no omissions. We will continue to contribute to the advancement of research anddevelopment in Japan through the relocation of universities and laboratories.

Promoting Environmentally Friendly Business Activities●Relocation of Scientific Laboratories and Hospitals

The SG Holdings Group provides baggage storage
services through Sagawa Express at venues oflarge-scale events such as outdoor music festivals
and marathons. In 2016, Sagawa Financial
introduced cashless payment using multi-payment
terminals to address the issue of booths becoming
congested because only cash payments are
possible at many such event venues.
In addition to improving convenience for attendees
and hosts, this also improves security due to cash
not being handled.
In fiscal 2018, cashless payment services were
The cloakroom service at the MONSTER
baSH music festival
also provided at the MONSTER baSH 2018, which
is a large music festival held in Kagawa prefecture,along with the JASDF Airshow in December. We will continue to participate in a variety ofevents and provide cashless payment services.

Creating New Value Through Comprehensive Logistics Solutions

The Group performs a variety of transportation of goods other than express package delivery
services. In addition to simply carrying goods, we contribute to society from a variety of angles
by providing added value during transportation.

●Expansion of Services in Logistics Payment

Providing Safe and Secure Services■Approach to Wider Target Audience by Deeper
Penetration and Additional Value Creation

Building an Organization of Diversity and Inclusion

1. Provision of Evolved Logistics Solutions

57

Introduction of technology in logistics
equipment●Labor-saving through the“CarriRo®AD” logistics support robot●Improvement of productivity using the“Visual Warehouse®” route navigation
tool

SG Systems
SG Motors

Promotion of improvement of operations
utilizing AI, etc.

●Automation of invoice reading●Labor-saving in equipment checking
operations using voice recognition

In fiscal 2018, we engaged in the introduction of technologies mainly in distribution centers.

CSR Report

Promoting Sustainable Procurement

Sagawa Global
Logistics

Building a Responsible Management Foundation

Results in Fiscal 2018

Contributing to Communities

Within the SG Holdings Group, SG Systems performs system development and maintenancefor Group companies. In order to focus on the operation of business utilizing the Group’s
comprehensive strength including GOAL® in future, it is becoming increasingly important to utilize
IT throughout the entire Group.
For this reason, SG Holdings established the IT Control Unit in April 2019 to promote theimprovement of efficiency of our operations and labor-saving utilizing new technologies such as
RPA, AI, and robotics. Furthermore, by taking advantage of this know-how, we will utilize newtechnologies such as RPA, AI, and robotics to provide solutions for improving the efficiency ofoperations and labor-saving not only within the Group, but also to customers outside the Group.

Fiscal 2018 Goals

Promoting Environmentally Friendly Business Activities■System for Promotion of Digitalization andTechnologies

Company

Creating New Value Through Comprehensive Logistics Solutions

Various industries are focusing on the re-examination of work styles and the improvement of
productivity per person due to the rapid decline in population brought about by the declining
birthrate and aging population of Japan. In the logistics industry, while the volume of packagesin the e-commerce market is continuously growing, it is becoming more difficult every year tosecure human resources such as drivers. The Group is also promoting automation and laborsaving through the use of technology in order to continue stably providing infrastructure in theform of logistics.
Specifically, we are actively engaged in the introduction of technology to strengthen services
coordinated throughout the Group utilizing initiatives such as GOAL®, implement front and backoffice business reforms, and strengthen IT governance.

■Goals and Results

Providing Safe and Secure Services■Policy on Promotion of Digitalization andTechnologies

Building an Organization of Diversity and Inclusion

2. Promotion of Digitalization and Technologies58AI response Size 110

Weight 1

Size 65

AI response Size 100

Size 140

Size 80

Delivery slip

●Labor Saving in Checking Vehicle MaintenanceWork Using Voice Recognition

After●Improvement of Productivity Using Route Navigation Tool
Sagawa Global Logistics introduced the “Visual Warehouse®” route navigation solution forwarehouses provided by SATO Corporation.
“Visual Warehouse®” is a navigation system that uses images and audio to provide instructions
on the shortest distance on picking routes, instructing workers by drawing the optimal lines of
movement from start to finish on a virtual map. The system enables even relatively new workers
to have the same work efficiency as the experienced, improving picking efficiency per hour, andimproving productivity by 23% compared to before the system was introduced.

Routing instructions aresent to the device on theworker’s arm

SG Systems is proceeding to introduce voicerecognition technology in the checking tasks inthe maintenance workplaces of SG Motors. SG
Motors checks 122 items in the process of vehicle
maintenance and inspection, and the introductionof this technology results in voice instructions on
inspection content to be played over a headset
without the need to hold a check sheet. When theinspector responds aloud, the voice is recognized andthe inspection record is converted into data. Utilizationof voice recognition enables the reduction of workload
and prevention of omissions when checking. It isscheduled to be fully introduced in certain plants
because it is expected to reduce the number of manhours by 5,350 hours (32 man-months) per year.
Services are stably provided with high quality inmaintenance workplaces with diverse personnel
including many non-Japanese mechanics.

Checklist of 122 items

CSR Report

Promoting Sustainable Procurement*OCR: Optical Character Recognition. Technology for reading written and printed text with a scanner andconverting this into digital text.

Building a Responsible Management Foundation

BeforeSG Systems has introduced an AI-OCR* system in which AI replaces and automates manualentry work in the delivery invoice entry operations of Sagawa Express. Conventional OCR had
trouble recognizing the “size and weight” section on delivery invoices because the size andweight were handwritten, and there was also a mixture of circled numbers. Approximately 1.5
million data points were used to train the AI in the development of “AI-OCR” able to perform
recognition more accurately than humans, and this system is currently in full operation.

Contributing to Communities

One person waspreviously required
to carry a single cart,
but two carts can be
carried unmannedwith the introduction of“CarriRo®AD”●Automation of Invoice Reading

Promoting Environmentally Friendly Business Activities

Sagawa Global Logistics has been proceeding to automate transportation operations within
warehouses with the introduction of the “CarriRo®AD” logistics support robot from ZMP Inc.
in January 2019. “CarriRo®AD” is able to carry up to 150kg of cargo, and can automaticallytransport cargo accurately by reading markings on the floor called landmarks to recognize
direction.
Every day, around 1,400 cases of cargo are brought into the Kashiwa SRC, where the robot
was introduced. Carts loaded with cargo are connected to “CarriRo®AD,” which automaticallycarries them within the warehouse unmanned. This reduced the time spent walking within thecenter by three hours and the distance walked by approximately four kilometers per day. This
enables the optimization of resources such as the personnel responsible can utilize this time forsupporting assorting work and inspection work.

Creating New Value Through Comprehensive Logistics Solutions●Labor Saving Using Logistics Support Robots■Promotion of Improvement of Operations
Utilizing AI and Other Technologies

Providing Safe and Secure Services■Introduction of Technology in Logistics Facility

Building an Organization of Diversity and Inclusion

2. Promotion of Digitalization and Technologies

The checklist is no longer required
thanks to voice recognition59

We act based on our Charter of Corporate Conduct, which is our declaration to earn the trustand empathy of society, and our Code of Ethics and Conduct, which outlines the specific details.
These policies express support for and cooperation with local governments, services for thedevelopment of regions, fostering future generations, and contributing to overseas communities.
In line with them, we carry out a wide range of measures from a comprehensive perspective thatembraces concerns for the environment, economy, and society of regional societies.
Municipalities in Japan face a diverse range of issues. We work with municipalities throughout
Japan, based on “comprehensive regional revitalization partnership agreements.” We assess
their needs, and work actively with them to resolve the issues they face.

■Involvement with SDGs
As a corporate group that does business ina wide range of places, both domesticallyand abroad, we are actively committed tothe pursuit of Sustainable Development
Goals (SDGs) for the environment, economy, and society.

CSR Report

Building an Organization of Diversity and Inclusion

Promoting Sustainable Procurement
Building a Responsible Management Foundation

At the SG Holdings Group, we engage in a wide range of businesses in 25 countries andregions. The people in those places are the foundation of our business, and helping to maintaina healthy society is extremely important for the sustainability of our business. In Japan,
revitalizing regional communities amidst a declining and aging population is a pressing issue.
Outside Japan, narrowing the gap between rich and poor in emerging nations is a global issue.
In the places where we do business, both inside and outside Japan, infrastructure companies
must bear responsibility for disaster preparedness, and support efforts when disasters happen.

Contributing to Communities■Policy

Promoting Environmentally Friendly Business Activities■Awareness of Social Challenges

Creating New Value Through Comprehensive Logistics Solutions

2. Affiliated Organizations..... P65

Providing Safe and Secure Services

Contributing to Communities

1. Contributing to Regions..... P61

60

Jun.
Mar.

2016

Hirado CityJan.

Tottori Prefecture

Kyoto Prefecture

Feb.

Okayama Prefecture

Mar.

Hiroshima City

Yamanashi Prefecture
Osaka Prefecture

Aug.

2018

May

Yokohama City
Tochigi Prefecture

Oct.
Feb.

Kagoshima Prefecture
Miyazaki Prefecture
Niigata CityMar.

Kumamoto City
Gunma Prefecture
Shimane Prefecture

2017

May
Aug.
Sep.

Jul.

Okayama City

Yamaguchi Prefecture
Nagoya City
Oita Prefecture
Kochi Prefecture
Ehime Prefecture

Oct.

Mie Prefecture

Dec.

Shizuoka City

Hokkaido
Aichi Prefecture
Saga Prefecture
Kagawa Prefecture

2019

Mar.

Saitama City
Takatsuki City

SG Holdings Group

Promotion of
local industry
and tourism

Promotionof education
for the next
generation●Promoting the mixing of
freight and passengers●Promoting conclusion ofdisaster agreements●Promoting Hands-Free
Travel●Promoting comprehensive
partnership agreements
for regional revitalization●Holding events aimed at
next generation●Increased number ofdisaster agreements●Increased instancesof mixing freight andpassengers●15 locations for HandsFree Travel (no change infiscal 2018)●Increase incomprehensive
partnership agreements
for regional revitalization●Sports initiatives

In fiscal 2018, we made progress toward our medium- to long-term goals: creation ofsustainable communities, promotion of local industry and tourism, and promotion of education
for the next generation.
Regarding the creation of sustainable communities, we continued to conclude disasteragreements, and participate in disaster preparedness training, so that we are in a position to
help municipalities when disaster strikes.
Regarding the promotion of local industry and tourism, we set up a new location for hands-free
tourism in Tokyo’s Nihonbashi district. In fiscal 2018, we added comprehensive partnershipagreements for regional revitalization with four prefectures and two cities.
In terms of initiatives for the promotion of education for the next generation, the SG HoldingsGroup supports the All-Japan High School Ekiden Championship, among other events.

CSR Report

Fiscal 2018 Results

Promoting Sustainable Procurement

Contribution
to the creationof sustainablecommunities

Fiscal 2018 Goals

Building a Responsible Management Foundation

2015

Medium- to Longterm Goals

Contributing to Communities

History of Partnership Agreements Formed

Company

Promoting Environmentally Friendly Business Activities

Sagawa Express has over 400 business offices throughout Japan, and works hard to contributeto society in every place where it does business.
Regional Japan faces a growing array of challenges, and many local governments are taking
proactive steps to build attractive, livable communities. Sagawa Express matches its strengths
with the needs of the municipalities, makes comprehensive partnership agreements for regional
revitalization with them, and then devotes itself fully to solving their problems. As of March 2019,it has formed partnerships with 19 prefectures and 10 cities across Japan. These agreements
are broad in scope, covering everything from economic revitalization to disaster recovery.
Examples include contributing to tourism through the promotion of “Hands-Free Travel,"building systems to help distribute and sell local products, and transporting relief supplies during
disasters. To help build more secure and comfortable communities, we are also advancing
initiatives that address social issues, including fostering children and youth, supporting theelderly and people with disabilities, and conserving the environment.

Creating New Value Through Comprehensive Logistics Solutions■Goals and Results

Providing Safe and Secure Services■Systems

Building an Organization of Diversity and Inclusion

1. Contributing to Regions

61

Feb.

Ugokotsu

Mar.

Akita Chuo Kotsu

Jun.

2018

2019

Names of
Implementing
Business OperatorsMK
JAL ABC

SagawaExpress
Kyotoseika
Sales Office(1) P ick up packages fordelivery. Passenger
service starts.

Summary of Activities
Pilot test between Yurihonjo City and Nikaho City andbetween Funagawa and Kitaurayumoto in Oga City, Akita
Prefecture.
Began providing same-day baggage delivery service using
shared taxis between Kansai International Airport andlocations in Kyoto City.

Oct.

Yamashiro Yasaka
Kotsu

We started using regular taxis for mixing freight andpassengers in Kasagi, Soraku. This initiative to use regulartaxis for package delivery was the first of its kind anywherein Japan.

Nov.

HEY Taxi

Start of using regular taxis for mixing freight and passengers
in Toma, Kamikawa, Hokkaido.

Dec.

Teshio Hire

Start of using regular taxis for mixing freight and passengers
in Horonobe, Teshio, Hokkaido.

Apr.

JR Hokkaido

Start of mixing freight and passengers between Wakkanai
Station and Horonobe Station on the Soya Main Line.

(3) E
 nd of package collection
and delivery. Hand overundelivered packages(nobody home) and otherpackages collected. Work
completed.

Picking up and driving passengers(2) D elivering and collecting
packages when waiting forpassengers, or when taxi has
no passenger business

CSR Report

Promoting Sustainable Procurement
Building a Responsible Management Foundation

Time Period

Kasagi, Soraku

Contributing to Communities

Actual Results

Flow of Operations

Promoting Environmentally Friendly Business Activities

Sagawa Express is promoting mixed freight and passenger transport. Low passenger demandcaused by population decline and aging has made it difficult for communities, especially thoseexperiencing depopulation, to maintain infrastructure and secure labor for transportation.
By marrying different transport modes, the company is pressing forward with methods fortransporting both freight and passengers by making use of excess capacity in each mode,
thereby solving their respective issues.
By reducing truck shipments, this not only benefits the environment through reduced CO2
emissions, but it also helps maintain buses, trains, and other transport infrastructure thatprovides essential services to community residents.
As of fiscal 2017, we were using railways, buses, and shared taxis for collection and delivery,
and in fiscal 2018 we added regular taxis.

Working with Yamashiro Yasaka Kotsu to mix freight and passengers, serving the area of
Kasagi, Soraku in Kyoto Prefecture. Taxi drivers from Yamashiro Yasaka Kotsu pick up
packages at the Sagawa Express Kyotoseika Sales Office, load them into their taxis, and thengo about their regular passenger business. They collect or deliver packages when there is a lullin their passenger business, or at other times when they are not serving passengers.
By doing both of these jobs, they enhance the efficiency of the package delivery business while
also reinvigorating the regional passenger transportation business.

Creating New Value Through Comprehensive Logistics Solutions●Maintaining Regional Infrastructure (mixing freight and passengers)[Case Study]: Working with Regular Taxis

Providing Safe and Secure Services■Contribution to the Creation of Sustainable
Communities

Building an Organization of Diversity and Inclusion

1. Contributing to Regions

62

●Case Study: Disaster Recovery Assistance in Mihara, Hiroshima
After heavy rains fell in July 2018, we offered recovery assistance in Mihara City, Hiroshima
Prefecture, for 41 days, from July 22 to August 31. We helped by moving, managing anddelivering supplies, and providing support for a call center. We stood in for city employees tomanage transport of supplies, helping to ensure that support operations for reconstruction ofaffected municipalities proceeded smoothly.

●Expanding Sales Routes for Regional Produce
In 2017, Sagawa Express began working with Nousouken Corp. to expand sales routes forregional produce by offering farmers a way to ship their products directly. This became afull-fledged business in January 2019. Through this initiative, farmers can use the Nousouken
platform to sell their produce directly to urban consumers, via the farm products depot at our
Nagano Sales Office. In this way, consumers in cities and elsewhere can purchase fresh, highquality produce that has been lovingly produced by the farmers. This helps farmers earn a morereliable income. Going forward, we plan to think about doing this in more locations.

CSR Report

Promoting Sustainable Procurement
Building a Responsible Management Foundation“Hands-Free Travel” is one element of our comprehensive agreements with municipalities.
This means transporting visitors' luggage to their next accommodations, allowing the tourists tospend the day without the burden of luggage. As the number of tourists visiting Japan grows,
Hands-Free Travel encourages longer-distance excursions, thereby promoting tourism andrevitalizing areas throughout Japan.
In fiscal 2018, we set up a service center in Tokyo’s Nihonbashi 3-chome district. We continue
to provide services that make it more convenient for visitors to enjoy their trips in Japan.

Contributing to Communities●“Hands-Free Travel” Service

Promoting Environmentally Friendly Business Activities■Promotion of Local Industry and Tourism

Creating New Value Through Comprehensive Logistics Solutions

Sagawa Express provides various forms of recovery assistance when disaster strikes, such astransporting emergency supplies and distributing them to evacuation centers in affected areas.
We have concluded Disaster Agreements with 75 local government bodies and other entities(as of May 2019). In fiscal 2018 we participated in training exercises with 11 municipalities.

Providing Safe and Secure Services●Reconstruction Support for Local Governments in Disaster Areas

Building an Organization of Diversity and Inclusion

1. Contributing to Regions

63

The UAE Team set up a photo booth at a Family Fun Fair, an event for children with disabilities
to enjoy good food and drink, and have fun shopping. The money collected at the booth wascontributed to Al Noor, the NPO that held the event.
●Eliminating Child Hunger●Support for Sports

Our team in the Philippines has begun an initiative, working with Project Pearls to provide meals
to 300 children every month.

The SG Holdings Group makes various efforts to help educate the next generation throughsports. We have a sports facility in Moriyama City, Shiga Prefecture, which is used for a variety
of functions.

●Food Support for Flood Locations●SG Holdings Kids Sports Camp
The aim of this initiative is to give children a chance to build their dreams and aspirations
through sports. In August 2018 we set this up in Shiga and Kyoto Prefectures, and 98
elementary school children participated.
●All-Japan High School Ekiden ChampionshipThe goal of this event is to support young high-school runners, who will lead the next
generation. Male and female athletes from all over Japan separately participated in thisevent in fiscal 2018, running in Kyoto, where our business got its start.
●Sagawa Shiga Football Academy
Sagawa Express sponsors the Sagawa Shiga Football Academy, supporting healthy
training of children through soccer. We operate a soccer school for children preschool to
middle school, in which about 200 children are now participating. It also holds soccer events
at kindergartens mainly in Moriyama City; in fiscal 2018, roughly 520 kindergarten students
enjoyed soccer at 13 locations.

In Sri Lanka, which has suffered repeated floods in recent years, we provided food supplies for
110 affected families.

CSR Report

Promoting Sustainable Procurement●Supporting for Children with Disabilities

Building a Responsible Management Foundation

At Sagawa Express, we offer elementary and middle-school students opportunities toexperience what it’s like to work sorting packages, and loading them on hand carts for collection
and delivery. In fiscal 2018, 266 students from 77 elementary and middle schools in easternJapan participated in such experiences. We provided them with an opportunity to think about
how society is organized, and what it means to work.
Sagawa Express is also a supporter of work experience events for children organized and run
by the Future Innovation Forum (FIF) since 2007. In fiscal 2018, these events drew 18 fifth- andsixth-grader participants chosen by lot.

Contributing to Communities

Expolanka Group generates ideas for activities based on SDGs, and make contributions toregions.

Promoting Environmentally Friendly Business Activities●Work Experience

Creating New Value Through Comprehensive Logistics Solutions■Contributions to Global Society

Providing Safe and Secure Services■Education for the Next Generation

Building an Organization of Diversity and Inclusion

1. Contributing to Regions

64

Promotion of Cancer Research
We provide grants, awards, and other forms of support for cancer research and cancer careresearch. In fiscal 2018, grants were given to 15 of 198 applicants from research institutions
across Japan. The foundation also presented the SGH Special Award and the SGH Nursing
Care Special Award to people who have made distinguished contributions to cancer researchand the advancement of nursing care and show strong future promise.

The museum also works with Moriyama City to offer the following collaboration enterprises andeducational activities:(1) Welfare Day (3 times a year, 122 facilities, 1,364 people)(2) Art Appreciation Classroom (for all 4th-graders in all 9 Moriyama City public elementary
schools, 1,013 pupils)(3) Moriyama Citizens’ Day (5 times a year, 942 people)(4) Lifelong Learning Support Course Migaku (5 times a year, 172 people)(5) Sagawa Kids Museum Workshop (13 times a year, 295 people)
During (1), Welfare Day, admission to the museum is free for all users of social welfare facilities
in Shiga Prefecture. With (2) through (5), the Sagawa Art Museum’s aim is to deepen the love
and understanding the people of the area hold for the arts.

⃝30th SGH Cancer Research Grant: 15 recipients (15 million yen)
⃝16th SGH Special Award: 2 recipients (10 million yen)
⃝16th SGH Nursing Care Special Award: 2 recipients (2 million yen)International Economic Cooperation
We provide support for training people in logistics operations, by accepting people for training
in Japan, and sending experts abroad. In fiscal 2018, as part of our Japan-China friendshipprogram, we invited 10 university students majoring in logistics from the People’s Republic ofChina, and we held a training session aimed at supporting the development of logistics humanresources. Working with the Ministry of Land, Infrastructure, Transport and Tourism, we invited
80 people from Laos — 55 students majoring in logistics, and 25 adults — and 138 students
majoring in logistics from the Socialist Republic of Vietnam, and offered an intensive course inlogistics, focusing on specialized knowledge and administrative methods of logistics in Japan.

Welfare Day venue scene

CSR Report

Promoting Sustainable Procurement

The SGH Foundation provides two-year scholarships of 120,000 yen monthly to self-fundedinternational students from countries in Southeast Asia. In fiscal 2018, the 33rd year of thisprogram, 109 applications were received from national, public and private universities, and 16
were selected. Besides financial assistance, the foundation also strives to give the students arich experience in Japan by holding social gatherings and reunions.

Building a Responsible Management Foundation

Study Abroad Scholarships

Contributing to Communities

The Sagawa Art Museum was founded in Moriyama City, Shiga Prefecture in 1998, and in fiscal
2018 it celebrated its 20th anniversary. The permanent collection includes works by prominent
Japanese artists such as Nihonga painter Ikuo Hirayama, sculptor Churyo Sato, and 15thgeneration ceramist Kichizaemon Raku. The museum also hosts a variety of special exhibits.
Special exhibits in fiscal 2018 included “The Empire of Imagination and Science of Rudolf II,”and “Tanaka Isson: 110th Anniversary of His Birth.”

Promoting Environmentally Friendly Business Activities

The SGH Foundation, a public interest incorporated foundation, supports research and businessdedicated to the promotion and development of economy and industry, education and culture,and healthcare and welfare. Its mission is to contribute to a broad, multi-faceted array of social
activities toward creating a vibrant globalized society.

Creating New Value Through Comprehensive Logistics Solutions■Sagawa Art Museum

Providing Safe and Secure Services■SGH Foundation

Building an Organization of Diversity and Inclusion

2. Affiliated Organizations

65

In coordination with more than 16,000 business partners, we will not only conduct business withconsideration for human rights and the environment, but also cooperate in a variety of areas
such as contributing to environmental issues and local communities, ultimately contributing to
the achievement of the SDGs as a whole.

■Policy
As a corporate group supported by more than 16,000 partner companies, we believe that thecontinuity of partner companies is one of the business issues faced by the SG Holdings Group.
To ensure the prosperity of our business partners (suppliers), in 2014 we established the SG
Holdings Group Business Partner CSR Guidelines, indicating the Group’s views on CSR andcorporate stance on procurement. These guidelines require business partners (suppliers) tounderstand and cooperate in seven items.

2. M
 aintenance and improvement of safety andsecurity
We will consider safety and security to be ourhighest-priority issues. We will make every
effort to maintain and improve safety together
with our business partners.
3. C onsideration for human rights and work
environments
We will respect basic human rights and ensurea safe and sanitary work environment. We will
also strictly comply with any applicable regional
laws.
4. F
 air trade transactions
We will carry out contact with our business
partners with an attitude of sincerity, andprovide opportunities for free and faircompetition. We will strive for co-existence andmutual prosperity with our business partners bybuilding proper relationships of trust.

5. Consideration for the global environment
We will take measures to prevent global
warming and air pollution, and promotebusiness activities with consideration for the
global environment.
6. P
 reservation of information security
We will carry out strict management ofconfidential information and personal
information related to our business activities,
and take steps to prevent acts such as
information leakage, theft, and manipulation.
7. C
 oexistence with local communities
We will aid in the development of domestic
and overseas regional communities, and strive
for co-existence with society together with ourbusiness partners.

CSR Report

Building an Organization of Diversity and Inclusion

Promoting Sustainable Procurement
Contributing to Communities

1. Legal compliance
We will strictly comply with domestic andforeign laws, and carry out fair and impartial
business activities based on corporate ethics.

Building a Responsible Management Foundation■Involvement with SDGs

■Business Partner CSR Guidelines

Promoting Environmentally Friendly Business Activities

As calls for companies to address human rights and the environment increase globally, it has
become necessary to engage in sustainable business activities throughout the entire supply
chain in Japan and abroad. The sustainable development goals (SDGs) set forth by the United
Nations also call for revitalization of partnerships, stating that they “can only be realized withstrong global partnerships and cooperation.”
The SG Holdings Group is a corporate group supported by more than 16,000 business partners(suppliers). Promoting CSR activities throughout the entire supply chain not only contributes tothe development of a sustainable society, but also our own development.

Business Partners....................................P67

Creating New Value Through Comprehensive Logistics Solutions■Awareness of Social Challenges

Management and Raising Awareness ofProviding Safe and Secure Services

Promoting Sustainable
Procurement66Article 1
Article 2
Article 3
Chapter 2
Article 4
Article 5
Article 6
Article 7

PurposeScope of application
Definitions
Management, selection, and evaluation of business partners
Management of business partners
Meetings of the business partner selection committee
Selection of new business partners
Evaluation of existing business partners

Individual Group
companies
Independent
procurement

Sagawa AdvanceOverseas

Procurement related tothe entire Group

Independent
procurement■Goals and Results Related to Management andRaising Awareness of Business Partners
Companies

Japan

Overseas

Medium- to Long-term Goals●Establishment of suppliermanagement policy●100% consent to suppliermanagement policy bysuppliers

Fiscal 2018 Goals

Fiscal 2018 Results

Investigation of state ofutilization of Business
Partner CSR Guidelines

Conducted survey ofGroup companies inJapan

Commencement ofevaluation of existing
suppliers

Business Partner
Selection Committee
performed evaluation of
the scores of suppliers

CSR Report

Promoting Sustainable Procurement
Building a Responsible Management Foundation

Business Partner Management Rules (Excerpt)

SG Holdings

Contributing to Communities

Within the SG Holdings Group, Sagawa Advance Co., Ltd. handles the procurement of all
fuel such as gasoline along with various other materials commonly used across the entire
Group. On the other hand, each Group company procures other materials used for itself andmanages its logistics partner companies. In this way, we efficiently manage our suppliers,
considering those related to the entire Group and those for individual operating units
separately.

Promoting Environmentally Friendly Business Activities

The SG Holdings Group has established “Business Partner Management Rules” and conducts
business in a way that is appropriate for both business partners (suppliers) and the Group. The
Business Partner Management Rules stipulate matters related to the selection, evaluation, andmanagement of business partners, and the Business Partner Selection Committee performs
selection based on these to commence business once the business partners have agreed with
the Group’s policy.
Furthermore, our policy also includes performing periodic evaluations of existing business
partners, jointly resolving any issues, and reviewing business with them if necessary.

Creating New Value Through Comprehensive Logistics Solutions■System for Management and Raising Awarenessof Business Partners

Providing Safe and Secure Services■Policy on Management and Raising Awarenessof Business Partners

Building an Organization of Diversity and Inclusion

Management and Raising Awareness of Business Partners

67

Fiscal 2018 Results

Long-haul Transport Safety
Patrols

Sagawa Express Long-haul Transport
Safety Patrols are performed once every
year in order to prevent traffic accidents
and vehicle breakdowns involving longdistance highway drivers. Midway rollcalls and vehicle inspections are carriedout in service areas and parking areas on
major highways nationwide in an effort
to raise awareness aimed at preventing
vehicular accidents and vehicle
breakdowns.

Cancelled due to typhoon

Long-haul Transport Partner
Company Safety Seminars

Management executives of long-haultransportation partner companies areinvited to share information on safety
required for trucking business operators.
In fiscal 2018, a seminar was conductedin Kanto and Kansai each.

Schedule of Initiatives in Fiscal 2019
Item

Details

Review of Business Partner
CSR Guidelines

Review of the content of the Business Partner CSR Guidelines from theperspective of demands from society and the importance for the Group,and make revisions if necessary.

Revision of Business
Partner Management Rules

Revision of rules to ask suppliers for consent to the Supplier Management
Policy when commencing new business

Strengthening ofcommunication with existing
suppliers

Continuing the implementation of supplier evaluation, and strengtheningof communication related to suppliers’ policies and initiatives on CSR●East Japan

Long-haul Transport
Terminal Inspections

SG long-haul transport
partner association
Labor executive committee

Long-haul Transport Terminal Inspections
are conducted annually for long-haultransportation company drivers who arrive
at Sagawa Express sales offices and hub
centers. Drivers receive encouragement
and routine inspections.

Implemented once
Theme: Safe driving●West Japan

Implemented once
Theme: Shortening ofworking hours

Implemented once

Implemented once
National conferences with managementof long-haul transportation partnercompanies nationwide are held annually

Theme: Reflection on
first half-year results andresponse during peak
periodCSR Report

Promoting Sustainable Procurement

Details

Building a Responsible Management Foundation

Item

Contributing to Communities

The SG Holdings Group holds “Providing safe and secure services” as a material CSR issue.
Sagawa Express engages in a variety of initiatives such as safety patrols and seminars for longhaul transportation companies, main business partners (suppliers) of ours, in order to eliminate
traffic accidents from society.

Promoting Environmentally Friendly Business Activities

The SG Holdings Group has established the “Business Partner CSR Guidelines” and works toshare a common awareness with business partners. In fiscal 2018, we conducted surveys ofGroup companies in Japan concerning CSR management of business partners. The results
showed that some Group companies are utilizing the Business Partner CSR Guidelines suchas distributing them to business partners, and it was observed that the content of the guidelines
needs to be periodically reviewed to fully respond to the current demands from society.
Furthermore, in fiscal 2018 we started an annual evaluation of business partners overseas, toassess suppliers from the perspective of quality, price, and delivery. Going forward, we intend to
add the perspective of sustainability in communicating with suppliers.
Based on these results, the SG Holdings Group will engage in the following initiatives in fiscal
2019.

Creating New Value Through Comprehensive Logistics Solutions■Initiatives Related to Raising Awareness ofBusiness Partners

Providing Safe and Secure Services■Initiatives Related to Management of Business
Partners

Building an Organization of Diversity and Inclusion

Management and Raising Awareness of Business Partners

68

We believe that building a responsible management foundation is essential to the SG
Holdings Group, which aims for contribution to the development of a sustainable society as
a comprehensive logistics business providing social infrastructure. We strive to establish our
corporate governance system, ensure compliance with all applicable laws, and strengthenrisk management in accordance with the fundamental policies embodied in our Corporate
Philosophy, Charter of Corporate Conduct, and Code of Ethics and Conduct.

We conduct all our business based on our Corporate Philosophy, Charter of Corporate Conduct,
and Code of Ethics and Conduct.

Development of a Sustainable Society

Mid-term
Management Plan
Become Asia's Leading
Comprehensive Logistics Group
Declaration to Earn the Trustand Empathy of Society
Together with the expectation of
our customers, employees,
local communities, shareholders,and business partners

Material CSR
IssuesCorporate
Philosophy

SG Holdings Group Corporate Philosophy"Trust, Create, Challenge"
SG Holdings Group will:• Earn the trust of customers and society and grow together.
• Create new value, contributing to social development.
• Always take on the challenges presented to us, pursuing all possibilities.

Corporate Vision

SG Holdings Group Charter of Corporate Conduct (excerpts)
Charter of Corporate Conduct(Code of Ethics and Conduct)
Shareholders

Implementation by each employee

Business
partners■Involvement with SDGs

Collaboration

Local
Community

Customers
Employees

Collaboration

Customers’ Expectations
Employees’ Expectations

Local Communities’ Expectations
Shareholders’ & Business Partners’
Expectations

CSR Report

Building an Organization of Diversity and Inclusion

Promoting Sustainable Procurement
Building a Responsible Management Foundation■Policy

Contributing to Communities■Awareness of Social Challenges

Promoting Environmentally Friendly Business Activities

3. Risk Management andInformation Security.......... P74

Creating New Value Through Comprehensive Logistics Solutions

2. Compliance....................... P72

Providing Safe and Secure Services

Building a Responsible
Management Foundation

1. Corporate Governance...... P71

Corporate governance, compliance, and risk management are the foundation of our business.
These are important issues, connected to all our business activities. Initiatives to constructsustainable management systems contribute to our efforts to achieve SDGs overall.
69

1. Efforts toward Duties■ Working Conscientiously and Thoroughness of Reporting, Communicating, andConsulting■ Personal Development and New Value Creation
2. Safe Driving■ Considering Vulnerable Road Users■ Promoting Eco-Friendly Safe Driving
3. Fostering a Healthy Work Environment■ Respect for Human Rights, Individuality, and Personality■ Respect for Beliefs of Others■ Safe and Healthy Workplace■ Greetings and Communications■ Protection of Employees’ Personal Information■ Prevention of Discrimination and Harassment
4. Management of the Company’s Assets and Information■ Prohibition of Inappropriate Use of Company Assets■ Information Management■ Intellectual Property Management

Section 4. With Expectations of Shareholders and Business Partners ~We Establish Mutual
Trust~
1. Dialogue with Shareholders
2. Ensuring Reliability of Financial Reports
3. Coexistence and Prosperity with Business Partners■ Prohibition of Abuse of Dominant Bargaining Position■ Management of Confidential and Personal Information of Business Partners
4. Free and Fair Competition
5. Dealing with Anti-Societal Groups

CSR Report

Promoting Sustainable Procurement

Building an Organization of Diversity and Inclusion

1. Living in Coexistence with local communities■ Open Enterprise■ Interacting with Local Communities■ Respect for Local Culture and Customs
2. Safety Activities
3. Environmental Protection■ Prevention of Global Warming■ Pollution Prevention■ Environmental Education Initiatives■ Environmental Communication Initiatives
4. Supporting the Arts, Academic, and Sports

Building a Responsible Management Foundation

Section 2. With Employees’ Expectations ~We Jointly Create a Positive Workplace~

Section 3. With Expectations of Local Communities ~We Continue to Move forward~

Contributing to Communities

1. Earning Satisfaction and Trust
2. Developing and Providing Quality Products and Services
3. Explaining in a Polite and Clear Manner
4. Working Sincerely Responding to Confidence
5. Responding Actively to the Voice of the Customer
6. Management of Customers’ Personal and Confidential Information

Promoting Environmentally Friendly Business Activities

Section 1. With Customers’ Expectations ~We Continue Mutual Development~

Creating New Value Through Comprehensive Logistics Solutions

We will act in accordance with this Code of Ethics and Conduct, which is an embodiment of theCharter of Corporate Conduct of the SG Holdings Group.

5. Compliance with Laws and Behavior in a Sensible Manner Respecting Social Norms■ Prevention of Improper Activities and Establishment of Ethics■ Respect for Human Rights and Prohibition of Discrimination■ Distinction between Private and Public Matters■ Propriety of Business Entertainment Expenses■ Dealings with Government Officials and Politicians■ Handling of Material Non-public Information (Insider Information)■ Reporting to the Company and Notifying Appropriately

Providing Safe and Secure Services■SG Holdings Group Code of Ethics and Conduct(excerpts)

70

Stakeholders(customers, employees, local communities, shareholders, business partners)

Basic Policy of Internal Control (headings only)

General Meeting of Shareholders
Election and dismissal

SG Holdings GroupSG Holdings Co., Ltd.
Board of Directors

Legal Counsel

ReportElection and dismissal

Supervision, selection and dismissal

1. T he system to ensure that Directors and employees execute their duties incompliance with the laws and regulations and the articles of incorporation
2. T he system to retain and manage the information related to the execution ofduties by directors
3. The policies and other systems to manage the risk of loss
4. The system to ensure that the Directors’ duties are efficiently executed
5. The system to ensure appropriateness of operations within SGH Group
6. Items related to the employees to assist corporate auditors’ duties and their
independence, etc. from directors, etc.
7. T he system for directors and employees to report to corporate auditors andother systems related to the reporting to corporate auditors
8. O ther systems to ensure that audits by corporate auditors conducted in apractical mannerElection and dismissal

ReportReport and discussion

ReportBusiness execution

Audit & Supervisory Board

Coordination

Audits, etc.

Coordination

Instruction

President
ApprovalManagement and Administration
Enhancement Committee

Investment Committee

Budget Committee

ReportPolicy, planning,deliberation,
instruction,
approval,
supervision, etc.

Departments and Units

Coordination

Accounting Auditor

SG Holdings Co., Ltd. has prescribed the Basic Policy of Internal Control
in order to establish a transparent management system which enables thecompany to fulfill expectations and trusts from all the stakeholders, under the
SG Holdings Group (hereinafter called as “SGH Group”) corporate philosophy
of “Trust, Create, Challenge” as below:

Internal Audit Department
Report

Audit

Audit

Group Management Strategy Meetings
Group Risk Management Meetings
Group Administration Department
Managers' Meetings
CSR Committee

Management guidance / Approvaland instruction of important matters
Presentation and reporting / Prior consultation

Group companies

CSR Report

Promoting Sustainable Procurement
Building a Responsible Management Foundation*The number of Directors and Audit & Supervisory Board Members is stated as of June 27, 2019.

Contributing to Communities

SG Holdings, as a pure holding company, strives to streamline the Group’s management
structure and achieve rapid management decision making. The Board of Directors, which
consists of nine Directors, including two Outside Directors, oversees the overall management
and business execution of the entire Group. SG Holdings has also introduced an Executive
Officer System. This separates between business execution and management oversight,
clarifying the authority and responsibilities of each function. In addition, the Audit & Supervisory
Board has been established consisting of four Audit & Supervisory Board Members, including
three Outside Audit & Supervisory Board Members, to supervise and audit management.*
In order to increase transparency of management, we continually strive to strengthen the
Company’s business management structure and the foundations of our businesses by
responding to changes in the business environment.

Promoting Environmentally Friendly Business Activities

The SG Holdings Group supports the concept of “Stakeholder Management” as the foundationof its management philosophy. We promote business activities that meet the expectationsof our various stakeholders through 1) continuous improvement of our level of service tocustomers, 2) stabilization and improvement of the foundation of living of our employees
and their families, 3) contribution to local communities through diverse business and social
activities as well as protection of their safety and environment, 4) enhancement of corporate
value for our shareholders, and 5) equal and fair transactions with business partners. We arefirmly convinced that creating a transparent management and administrative structure throughstrong and comprehensive corporate governance is a key requisite for realizing stakeholder
management. With this conviction, we have formulated the SG Holdings Basic Policy of Internal
Control System as a statement of our internal control policies and work to strengthen all of oursystems accordingly.

Creating New Value Through Comprehensive Logistics Solutions■Systems Concerning Corporate Governance

Providing Safe and Secure Services■Guidelines Concerning Corporate Governance

Building an Organization of Diversity and Inclusion

1. Corporate GovernanceFor details, see SG Holdings website.
Data on corporate governance can be found in the data collection (P89).
71

Overseas
companies●Monthly Code of
Ethics and Conduct
training session●Two insider trading
prevention training
sessions●Two insider trading
prevention training
sessions●Two human rights
and harassment
training sessions●Two human rights
and harassment
training sessions

As one element of our compliance training, we
conduct group readings of the Code of Ethics
and Conduct.

●Monthly Code of
Ethics and Conduct
training session

Partly realized

SG Holdings GroupDid you know?

Compliance Hotline
For workplace problems you are unable to resolve on your own,
call the hotline

The Compliance Hotline is based on the internal whistleblowing
system.* It allows employees, their family members, and partnercompanies to report actions they think may be in violation of
the law, company rules, or our Code of Ethics and Conduct.

*Internal whistleblowing system
System for early detection of improper conduct or legal violations
within the company, giving thecompany a chance to remedy
these problems on its own.

For example...?

Leaking valuable corporate
information to outsiders

One-sided lowering offees for partner companies
Embezzlement,
misappropriation of funds

Other things where one might wonder, “is this against the law”?
If you discover things like that, call the hotline.
In principle, real names should be used when calling the hotline. We take strict care to guard the privacy and personal information of whistleblowers, so there should be no negative consequences for reporting wrongdoing.

CSR Report

Promoting Sustainable Procurement

Fiscal 2018 Results

Building a Responsible Management Foundation

Group
companies inJapan

Create and maintaina compliancesystem that does notstop at merely strict
compliance withlaws and regulations
but also meets the
expectations ofsociety at large

Fiscal 2018 Goals

Contributing to Communities

At the SG Holdings Group, the department responsible for the legal affairs of SG Holdings incoordination with Group companies takes the lead in developing and guiding our compliancesystem, while the Internal Audit Department monitors compliance.
As an internal whistleblowing system, we also operate the SG Holdings Group Compliance
Hotline. By using this service, employees, their family members, and partner companies canreport actions they think may be in violation of the law, company rules, or our Code of Ethics
and Conduct. In fiscal 2017, we also began operating hotlines for whistleblowers who are notcompany employees, and overseas hotlines as well.
Additionally, the Group is actively taking steps to prevent insider trading as we have seen more
opportunities to add listed overseas companies to the Group and to form business and capitalalliances with listed companies. In particular, the recent listing of the Company’s own shares
prompted us to reinforce our insider trading prevention regulations. We have thus established asystem of controls including a blackout period and establishment of an application procedure.

SagawaExpress

Medium- to Longterm Goals

Promoting Environmentally Friendly Business Activities■Systems Concerning Compliance

Companies

Creating New Value Through Comprehensive Logistics Solutions

The SG Holdings Group strives to create a corporate culture in which every employee conducts
business with high ethical standards and compliance standards and responds appropriately tochanges in the social and business environment. The SG Holdings Group Code of Ethics andConduct constitutes the backbone of the Group’s compliance posture. Based on the Code of
Ethics and Conduct and the Compliance Regulations, the Group has built and maintained aculture of conducting business with high ethical standards, continually striving to improve ourbusiness operations and our credibility with the public.

■Goals and Results Concerning Compliance
SystemProviding Safe and Secure Services■Guidelines on Compliance

Building an Organization of Diversity and Inclusion

2. Compliance72

In conjunction with the listing of the Company’s shares, we are holding insider trading
prevention training sessions twice a year aimed primarily at employees in Japan, providing
in-house training, and taking other steps to inform employees about insider trading prevention.
In fiscal 2018, we published the Compliance Newsletter (six issues) and the Insider Trading
Prevention Newsletter (six issues), via the internal portal website. The Group will continue tostrengthen compliance as the pillar of our internal controls.

Guidebook forPrevention of
Insider Trading

Introduction■

Table of Contents

Introduction.................................................................. 1
What is insider trading? ............................................... 3

Have you ever heard the words “insider trading”?

This is how insider trading occurs!! ............................. 7
Precautions ................................................................. 9

something we should not do.”Frequently asked questions: In this case,what should I do? What happens next? .................... 10

Indeed, insider trading is prohibited by law, andCommentary material ................................................ 24

any violation of the law is subject to punishment.
SG Holdings, Co., Ltd.’s (hereinafter referred to
as “SGH”) shares (hereinafter referred to as “SGH
shares”) are listed at Tokyo Stock Exchange, Inc.,

STOP

What if I did insider trading .......................................... 5

You may at least be aware that “insider trading isand are subject to the insider trading regulations.

Who are “Corporate Insiders”? ............................. 25
What are “Material Facts”? ................................... 26
What is “Public Disclosure”? ................................. 27
What specific acts are prohibited? ........................ 28
Internal regulations on the sale andpurchase of shares ............................................... 29
Conclusion................................................................. 30

As with other listed shares, selling and purchasing SGH shares requires careful attention.

1

In order to conduct its business in a sound manner, the SG Holdings Group takes measures toeffectively manage its intellectual property and ensure knowledge and awareness of intellectual
property.
We have established the Intellectual Property Deliberation Committee as a means of protecting
the Group’s intellectual property, work to obtain legal proprietary rights over the intellectual
property of each Group company based upon the full review and recommendations of thatcommittee and centrally manage and maintain those rights.
In order not to infringe on the intellectual property rights of others, we constantly monitor theintellectual property rights where there is the possibility of infringement by us and disseminate
information to the concerned units to ensure that they take appropriate precautions. We
continually make efforts to promote knowledge and awareness about these activities throughout
the Group.

2

Providing Safe and Secure Services■●Protection of Intellectual Property

CSR Report

Promoting Sustainable Procurement●Insider Trading Prevention Training Session

Building a Responsible Management Foundation

The SG Holdings Group Charter of Corporate Conduct places great weight on the respectfor human rights and other internationally accepted standards of conduct as well as clearlystressing the importance of giving consideration to the culture and customs of all stakeholders.
Emphasis is also placed on the cultivation of employees’ ethical standards and self-discipline
based on that and training sessions on the Code of Ethics and Conduct are held monthly for all
Group employees. The code is read jointly by employees at each department, section, service
center, and other organizational unit of the Group.

For the purpose of eliminating dealings with criminal elements that threaten the safety and orderof society, we have established Exclusion of Anti-social Forces Regulations. We are working
hard to block relationships with anti-social forces, refusing to respond to unjust demands,
backroom deals, or provision of funds. This is clearly stated in the Basic Policy of Internal
Control, the Charter of Corporate Conduct, and the Code of Ethics and Conduct, and we work
to ensure that all employees are fully cognizant of them. More specifically, we have (1) instituted
the continuous review (“anti-social check”) of attributes of counterparties (both customers andbusiness partners) and (2) established an Unjust Demand Hotline to ensure the quick resolutionof cases when employees receive unjust demands. We continue to strengthen these systems
and by sharing information on anti-social forces and responses to them we strive to fully preventand block interference of our business partners.

Contributing to Communities●Code of Ethics and Conduct Training

Promoting Environmentally Friendly Business Activities●Blockage of Relationships with Anti-social Forces

Creating New Value Through Comprehensive Logistics Solutions■Compliance Efforts

Building an Organization of Diversity and Inclusion

2. Compliance73

RM Manager
RM Manager

Group
companies

RM Manager

RM Manager

RM Manager

RM Supervision Dept.

RM Manager

RM Supervision Dept.

RM Manager

RM Supervision Dept.

RM Manager

RM Supervision Manager*

RM Manager

RM Supervision Manager*

RM Manager

RM Supervision Manager**Presidents of Group companies■Risk Management Goals and Results
To strengthen risk countermeasures for the group as a whole, we conduct Business Continuity
Training.

Companies

SG HoldingsGroup companies
in JapanMedium- to Long-term
Goals
Identification andadoption of steps
to mitigate the risksfacing the Group asa whole and, as abusiness responsible
for social infrastructure,
attainment of ahigh level of crisis
management

Fiscal 2018 Goals●Business
continuity training
is held once
during the year

Fiscal 2018 Results●Group joint business
continuity training was held
once (participation by 18
Group companies, both
Japan and overseas)●In addition to Group joint
business continuity training,internal business continuity
training was conducted bysome Group companies.

CSR Report

Promoting Sustainable Procurement

RM Manager

RM Supervision Manager

Building a Responsible Management Foundation

RM Supervision Dept.
(Executive Office)Contributing to Communities

RM Manager

Head of Division with
Jurisdiction over RM

Promoting Environmentally Friendly Business Activities

Division with Jurisdiction over
SGH Important Risks

Creating New Value Through Comprehensive Logistics Solutions(1) Group Risk Management Supervision Manager
Director responsible for SG Holdings Management and Control(2) Risk Management Supervision Manager
Head of Division with Jurisdiction over Risk Management(3) Risk Management Supervision Dept.
Division with Jurisdiction over Risk Management(4) Risk Management Manager
Head of Division with Jurisdiction over Important Risks

Group RM Supervision Manager

Providing Safe and Secure Services

Directors of SG Holdings are the people who bear responsibility for the group. In addition,
we have established the following persons and departments of responsibility, to promote risk
management for the group as a whole.

RM: Risk Management

Director in charge of Management and Control

RM Manager■Risk Management Systems

SGH

RM Manager(1) Strategic risks
Risks to management or to the execution of business plans(2) Operations risk
Risks to our day-to-day operations and business activities(3) Financial reporting risk
Risks associated with external reporting of disclosure items that might have a significant
impact on our financial statements, or on the trustworthiness of our financial statements.

SGH: SG Holdings

RM Manager

In our management, the SG Holdings Group regard as risks all factors that might have an
impact on our business. For each category of risk, we make an appropriate assessmentof the potential impact on our business, and take appropriate measures based on our
Risk Management Regulations, while minding the relevant laws and changes in the social
environment. As new risks come to the fore, our aim is to minimize the potential losses theserisks might cause, by taking the necessary measures.
As a group, we are mindful of the following risk categories. (quoted from Risk Management
Regulations)

SG Holdings Group Risk Management Systems

RM Manager■Risk Management Guidelines

Building an Organization of Diversity and Inclusion

3. Risk Management and Information Security74

SG Holdings Group BCM Systems (in Japan)
SGH
Group Crisis Management Headquarters

SGS

Group Companies

Systems

SGE
Administrative Operations

SGL/SGJ

SGM

SGMV

General Logistics

Vehicle MaintenanceInstallation Operations,Charter Trucks

Transfer CenterTransfer Center

Sales OfficeConsignee

SGR
Buildings andEquipment Repair■BCM/BCP for Major Damage, Accidents
Due to the particular characteristics of the logistics business, we regard natural calamities andaccidents as risks of particular significance. To ensure the continuity of Group operations in
the event of a major earthquake, fire, explosion, flooding or other accident or contingency, theGroup has formulated a Business Continuity Plan (BCP) clearly setting forth an action plan
starting from initial response through the restart of business activities. We continue to workassiduously on Business Continuity Management measures to ensure that the BCP works aseffectively as envisioned.

SGFD
Provision ofSales Office Company
Gas Station Human Resources

Consignor

Sales OfficeConsignee

SGW

SGA

SGF

Overall Delivery Services

Fuel Supply

Payments

Each business corporation deploys its resources while SG Holdings coordinates thedissemination and communication of information to ensure there is no interruption in thelogistics operations of Sagawa Express, the Group’s core business.
SGH: SG Holdings

SGJ: SGH Global Japan

SGS: SG Systems

SGW: Sagawa Express

SGR: SG Realty

SGFD: SG Fielder

SGMV: SG Moving

SGA: Sagawa Advance

SGF: Sagawa Financial

SGL: Sagawa Global Logistics

SGM: SG Motors

SGE: SG Expert

CSR Report

Promoting Sustainable Procurement
Building a Responsible Management Foundation

Degree of Impact(1) Identification
High risk
Monitoring and unified riskHighmanagement(2) Evaluation
MediumPrioritizing risks by degreeof impact and frequency of
Low riskLowoccurrence
Risk maps make things visible
Low
MediumHigh(3) Countermeasures
Frequency of Occurrence
Development of countermeasuresin accordance with the order ofpriority(4) Review
Quarterly review of risk identification, evaluation, and countermeasures

We conduct business continuity training throughout the Group once a year. In fiscal 2018, SG
Holdings, along with 18 Group companies from Japan and elsewhere, participated in simulation
exercises based on the kinds of advanced composite calamities, such as major typhoons andurban flooding that have become more frequent recently.

Contributing to Communities

Risk Map●Business Continuity Training

Promoting Environmentally Friendly Business Activities

Risk Management Flow

For all group employees in Japan, we conducted response training twice in fiscal 2018, using
Safety Check Systems. Based on the BCP, we have set a target rate of 90% for responses
within 24 hours after the occurrence of an incident.

Creating New Value Through Comprehensive Logistics Solutions

When things are normal, Group companies manage risk based on the flow shown here. First,
risks must be assessed. Risk maps are used to categorize risks by impact and frequency. Risks
are then listed in priority order, and countermeasures are taken.
Risks are discussed quarterly in SG Holdings Group Risk Management Meetings, so the Group
as a whole can deal with risk management effectively and efficiently.

●Safety Check Training

Providing Safe and Secure Services■Risk Management at Normal Times

Building an Organization of Diversity and Inclusion

3. Risk Management and Information Security

75

Enhanced information security management systems are now more critical than ever as
the potential danger from a wide range of cyberattacks originating outside the company
has grown significantly over the past several years. At SG Holdings Group, in addition
to our administrative systems of the past, we have established SGH-CSIRT to minimize
harm through preemptive prevention of data security accidents, and fast response whenincidents occur. CSIRT is short for Computer Security Incident Response Team. It is the
specialist that handles data security problems for the group as a whole.

■Information Security Goals and Results
Companies

Medium- to Long-term Goals

Fiscal 2018 Goals●Two information security

SagawaExpress
Group
companies inJapanOverseascompanies

Fiscal 2018 Results
training sessions

Identification and adoptionof steps to mitigate therisks facing the Group as awhole and, as a business
responsible for social
infrastructure, attainmentof a high level of crisis
management●Two information
security training
sessions●Two targeted e-mailattack response
training sessions●Due to frequent naturalcalamities, targetede-mail attack response
training was held once.

●Two information security
training sessions●Targeted e-mail attack
response training
sessions carried out in
part

To strengthen security measures for the group as a whole, we held data security training andexercises.

●Enlightenment Activities
For all Group employees, in Japan and abroad, we hold group readings of the Security
Handbook twice a year, followed by comprehension tests. Furthermore, we provide response
training for targeted e-mail attacks, where we study first actions, for example, counting thenumber of times an attached file is opened, the number of clicks on link URLs, and reports
to senior managers. For employees who fail to make the appropriate responses, we havee-learning follow-up training and other ongoing educational measures.

CSR Report

Promoting Sustainable Procurement●SGH-CSIRTBuilding a Responsible Management Foundation■Information Security System

Security assessment is an essential tool for evaluating the effectiveness of data security
management systems, to prevent serious information security incidents. Specifically, theassessment consists of 1) setting a target level of cybersecurity upon evaluation of the internaland external environment, 2) identifying the challenges to attaining that level, and 3) proposing
and prioritizing the required solutions. At SG Holdings Group, we are implementing highly
effective security policies, based on our own security assessments and our three-year security
policy road map.

Contributing to Communities●Security Assessment

Promoting Environmentally Friendly Business Activities

The SG Holdings Group considers the protection of information assets an importantsocial responsibility. We have formulated an “Information Security Basic Policy” anda “Personal Information Protection Policy” and work toward strengthening information
security.
For the full text of our Information Security Basic Policy, see the SG Holdings website.

Creating New Value Through Comprehensive Logistics Solutions■Information Security Initiatives

Providing Safe and Secure Services■Information Security Guidelines

Building an Organization of Diversity and Inclusion

3. Risk Management and Information Security

76

List of Certifications and Awards

Name of Award or Certification(Granting/Certifying Organization)
Motor Vehicle Operation Manager Training
Certificated Organization(Ministry of Land, Infrastructure, Transport andTourism)

Excellent Safe Driving Workplace Award(Japan Safe Driving Center)

Excellent Safety Workplace certification (G mark)(A National Trucking Rationalization Organization)

Excellent Safety Workplace Bureau DirectorGeneral’s Award(Ministry of Land, Infrastructure, Transport andTourism)

ISO 9001(Certifying Organizations)

Overview

Certified as an organization to provide training recognized by the Minister of Land, Infrastructure, Transport and Tourism inaccordance with the Passenger Vehicle Transportation Business Transportation Rules and the Freight Vehicle Transportation
Business Transportation Safety Rules.

Award for business sites that have achieved no accidents and no violations through site-wide utilization of driving history
certificates for safe driving and traffic accident prevention.
●A total of 106 sales offices received the following awards in the SG Holdings Group.
There were 10 platinum sales offices, 23 gold sales offices, 35 silver sales offices, and 38 bronze sales offices.

The mark shows that the sales offices were certified in a Japan Trucking Association freight vehicletransportation safety evaluation project, which evaluates the traffic safety measures of trucking
businesses.
●396 Sagawa Express sales offices●11 SG Moving sales offices●3 World Supply sales offices

The Excellent Safety Workplace Bureau Director-General’s Award is granted to business sites that have obtained Excellent
Safety Workplace certification (G Mark) for a decade or more in succession and contribute to society by ensuring the safety oftransportation.
●SG Moving has received G Mark certification in all business sites, and the Bureau Director-General’s award was received for the
first time in the Kitakanto Sales Office.

International standard on quality management systems. This is the most widely accepted management system standard, and it isused by more than one million organizations in 170 countries or more nationwide.

Scope

Data

Providing Safe and Secure Services

Sagawa Express

Sagawa Express
SG Moving
SG Motors

Sagawa Express
SG Moving
World Supply

SG Moving Kitakanto
Sales Office

458 Sagawa Express
sales offices
SG Moving Head OfficeTransport Quality
Department, Tokyo
Sales Office
SG Systems Kanto
Branch and 11
other locations anddepartments
Expolanka Freight
SG Sagawa Ameroid77

List of Certifications and Awards

Name of Award or Certification(Granting/Certifying Organization)
ISO 14001(Certifying Organizations)

ISO 14064(Certifying Organizations)Five Star certification under DBJ Green Building
Certification System(Development Bank of Japan Inc. (DBJ))

Five Star certification under the Building-Housing
Energy-efficiency Labeling System (BELS)(Association for Housing Performance Evaluation &Labeling)

Overview

International standard on environmental management systems. This indicates an organizational framework for protecting theenvironment and responding to changing environmental conditions while maintaining a balance with socio-economic needs.

International standard for self-verification of reporting of greenhouse gas emissions.
●Obtained by Expolanka Freight in Sri Lanka for the first time in 2018.

It is a certification system created by the Development Bank of Japan in April 2011 withthe aim of forming a bridge between business operators and financial institutions/investors
through the valuation of real estate that gives consideration to the environment and society.
●SG Realty Wako, a property owned by SG Realty, obtained the highest-ranked certification offive stars. It was assessed highly in the four areas of Ecology, Amenity, Community, and Risk
Management.

Scope

Data

Promoting Environmentally Friendly Business Activities

Sagawa Express
Expolanka Freight

Expolanka Freight

SG Realty

A system using a third-party evaluation body for certifying energy saving in buildings inaccordance with the Guidelines on the Building-Housing Energy-efficiency Labeling System(Guidelines on Representation of the Energy Consumption Performance of Buildings)
established by the Ministry of Land, Infrastructure, Transport and Tourism.
●S G Realty Wako, a property owned by SG Realty, obtained the highest-ranked
certification of five stars. The equipment used in the facility was mainly selected fromamong devices with a high energy-saving effect, with LED lighting adopted for all lighting
throughout the facility. Moreover, solar power generation equipment was installed on theentire roof.

SG Realty

An award for business operators that have significant accomplishments in the creation of a sustainable logistics system throughefforts such as the reduction of environmental impact in the area of logistics or productivity of logistics.
17th Green Logistics Partnership Council Special
Award(JILS; Japan Association for Logistics and Transport;
Ministry of Economy, Trade and Industry; Ministry ofLand, Infrastructure, Transport and Tourism)

5th Grand Prize Award for Excellent Business
Entities Working on Modal ShiftAward for Excellent Business Entities Working on
Modal Shift(Japan Association for Logistics and Transport)●Sagawa Express received the special award. A cross-industry joint modal shift commenced operation in November 2017 byutilizing the Toyota Longpass Express, a freight train operated by Toyota Transportation, for express package delivery services
using long-haul transportation between Aichi Prefecture and Iwate Prefecture. This reduced the truck driving hours and CO2
emissions arising from the company's truck transportation by 1,685 hours and 100.2 tons per year, respectively. The company
utilized the spare space in Toyota Transportation's train dedicated to transporting automotive parts between Aichi Prefecture
and Iwate Prefecture, thereby improving the efficiency of transportation while increasing the loading ratio and reducing drivers'
working hours at the same time. That initiative earned the company the award.

Multifaceted evaluation is carried out from the perspective of not only reducing environmental impact but also the improvementof transportation efficiency, in light of the increasingly serious shortage of labor in recent years. The grand prize is awarded tothe business operator that has achieved the best results, while several category prizes are awarded according to each award
standard.

Sagawa Express

Sagawa Express●The reasons for receiving the award are the same as stated above.
78

List of Certifications and Awards

Name of Award or Certification(Granting/Certifying Organization)

Minister of the Environment Award for Merit in the
Promotion of the Creation of a Recycling-oriented
Society at the 13th National Convention for the
Promotion of 3R Activities(Ministry of the Environment, Toyama Prefectural
Government, 3R Promotion Forum)

Ranked first in the Transportation Category of the
22nd Nikkei Environmental Management Survey(Nikkei Inc.)

Overview

Scope

Data

Promoting Environmentally Friendly Business Activities

The National Convention on the Promotion for 3R is a convention the promotion of understanding and initiatives related to the 3Rs
by having people, business operators, and governmental organizations meet at once to share and communicate their initiatives
and knowledge. Business sites and other organizations that make a significant contribution to promoting the formation of arecycling-oriented society are awarded.
●The initiative for which Sagawa Express received an award this time was the elimination of emissions through the utilization ofenvironmentally friendly packaging (foldable containers) by the SapporoKita Sales Office of Sagawa Express. The company
introduced environmentally friendly packaging instead of using packaging cardboard when transporting packages for people
being hospitalized or discharged at Hokkaido University Hospital. This created a system that contributes to the creation of arecycling-oriented society in terms of cost, the environment and social contribution by reducing the generation of waste.

A survey evaluating companies engaged in balancing environmental measures with the improvement of management efficiency.
●Sagawa Express was ranked first in the transportation category for the fourth year in succession.

Sagawa Express

Sagawa Express

Eco Action 21 is an environmental management system (EMS) unique to Japan that was established by the Ministry of theEnvironment.
It specifies methods for organizations and business operators to voluntarily carry out initiatives aimed at the environment based on
the method of continuously improving performance called the “PDCA cycle.”

EcoAction 21●All business sites of SG Motors have obtained the certification. The company implemented initiatives such as (1) reduction ofelectric power used by switching lighting to LEDs, (2) effective utilization of water resources by implementing systems utilizing
rainwater in maintenance plants, and (3) thermal recycling of waste oil generated in vehicle maintenance for utilization as a heatsource for heating water used for washing vehicles undergoing maintenance, floor heating in plants and road heating within thepremises to recycle resources. (Certification period: November 22, 2017 - November 21, 2019)

SG Motors
SG Moving●SG Moving obtained certification in its head office and the Kitakanto Sales Office. The company engaged in activities matching
the content of its business such as (1) collection of environmental impact data according to guidelines, (2) significant reductionof fuel with high CO2 emissions by improving the efficiency of vehicle assignment utilizing an independently developed vehicle
assignment board, and (3) shifting to the use of public transportation by sales personnel. (Certification period: March 1, 2018 February 29, 2020)79

List of Certifications and Awards

Name of Award or Certification(Granting/Certifying Organization)

Overview

Scope

Data

Building an Organization of Diversity and Inclusion

Proof of receiving certification from the Minister of Health, Labour and Welfare as a “Child Raising
Supporter Company.” The certification is received by companies that have formulated a generalbusiness operator action plan, achieved the goals set in the plan and met certain standards based on
the Act on Advancement of Measures to Support Raising Next-Generation Children.
Kurumin Mark(Ministry of Health, Labour and Welfare)

The following companies in the SG Holdings Group have received certification.
●SG Holdings●Sagawa Express●Sagawa Global Logistics●SGH Global Japan●SG Systems

SG Holdings

A system for commending corporations such as large enterprises and SMEs practicing particularly
excellent health management based on initiatives matching community health issues and healthpromotion initiatives being promoted by Nippon Kenko Kaigi.
2019 Excellent Health Management Corporations(Ministry of Economy, Trade and Industry, Nippon
Kenko Kaigi)

Runner-up for the Basic Achievement Award at the2019 J-Win Diversity Awards(NPO J-Win)

Certified as Excellent Worker Dispatching Business(Labor Management Education Center)●Sagawa Advance was the first company in the SG Holdings Group to receive the certification.
Receiving this certification shows that the company satisfied the standards established by thecommittee made up of industrial physicians, insurers and investors, etc. in the following four
items: “management philosophy and policy,” “organizational structure,” “system and executionof measures,” and “evaluation and improvement.” It was also highly regarded that the company
marked high scores in the health management survey breakdown items of “documentationof policies,” “involvement of management,” “execution of measures,” and “understanding ofindicators such as health examination results.”

Leading companies promoting diversity and inclusion have been awarded since 2008. The “Corporate Prize” is awarded to leading
companies that promote D&I and continue to produce female leaders, and the “Individual Prize” is awarded to individuals whomake a significant contribution to the promotion of D&I in a company.
●SG Holdings became the first company in the logistics industry to receive the award in the Basic Division (for companies
that have indicated the meaning and objective of utilizing women, established mechanisms and systems with goals, andcommenced action as the first step of D&I).

Worker dispatching business operators that not only comply with laws and regulations, but also meetcertain standards on supporting the formation of careers and providing a good working environment
for dispatched workers, preventing trouble at the locations where workers are dispatched, andproviding service that is reassuring for both the dispatched workers and the locations where workers
are dispatched are certified as “Excellent Worker Dispatching Businesses.”

Sagawa Advance

SG Holdings

SG Fielder●SG Fielder received certification on March 12, 2015, and was recertified on March 30, 2018.
Certification is valid for three years.

80List of Certifications and Awards

Name of Award or Certification(Granting/Certifying Organization)

Promoting Company under the Tokyo Metropolitan
Government's system for certifying companies that
promote the prevention of employees from headinghome at once
(Tokyo Metropolitan Government)

Certified as a Tokyo Sports Promotion Company(Tokyo Metropolitan Government)

Overview

The Tokyo Metropolitan Government created a certification system for companies promoting theprevention of employees from heading home at once in the event of a disaster in Tokyo, pursuant to the“Tokyo Metropolitan Government Ordinance on Measures Concerning Stranded Persons”. Companies
actively engaged in reducing employees returning home at the same time are certified as “promoting
companies” and those that have particularly excellent initiatives or initiatives with large knock-on effects
are selected as “model companies.”

Scope

Data

Contributing to Communities

Sagawa Express●Sagawa Express was selected as a “model company for promoting the prevention of employees fromheading home at once in Tokyo” (total of 12 companies).

Since fiscal 2015, the Tokyo Metropolitan Government has certified companies implementing
excellent initiatives aimed at the promotion of employees’ sporting activities and providing
support in sports as "Tokyo Sports Promotion Companies."

SG Holdings●SG Holdings has been certified for four years in succession.

Certified as a Sports Yell Company
Japan Sports Agency

The Japan Sports Agency certifies companies actively engaged in sport-related initiatives for promoting
the health of employees as “Sports Yell Companies” to foster public spirit to play sport by promoting
sport among people in the prime of life who tend to lack exercise.

SG Holdings●SG Holdings has been certified for two years in succession.

81

List of Certifications and Awards

Name of Award or Certification(Granting/Certifying Organization)

Japan Resilience Award
2018 Most Outstanding Resilience Award (National
Land Preservation and Information Area)(Association for Resilience Japan)

High Grade Agent (HGA) certification(Mitsui Sumitomo Insurance Company, Limited)

Overview

An award for evaluating and recognizing companies, organizations, and other entities for technological development and productdevelopment, as well as other activities that help to foster national, regional, personal, and industrial resilience, with the goal ofbuilding a resilient society for future generations.
●Sagawa Express received an award in the national land preservation and information area as a model for logistics
infrastructure and regional collaboration towards strengthening regional resilience. It received the Most Outstanding
Resilience Award in the energy area in fiscal 2017, making this the second time it has received the award.

This certification is given to agents that have the highest agent operations rank at Mitsui Sumitomo Insurance, and have met all
requirements in a stringent review from various perspectives such as operational quality, management structure, and operating
revenue.

Scope

Data

Other Certifications and Awards

Sagawa Express

Sagawa Advance●Sagawa Advance obtained HGA on April 1, 2018, to enhance its operational quality and management structure in theinsurance sales business.

SMBC Sustainability Assessment Loan: A loan product in which Sumitomo Mitsui Banking Corporation assesses a company’s
ESG disclosure and initiatives aimed at sustainability based on unique assessment criteria created with the Japan ResearchInstitute, Limited, and provides information aimed at the enhancement of such initiatives.
●SG Holdings was assessed to be conducting a high level of corporate management aimed at sustainability in “initiatives toaddress climate change in business continuity,” “initiatives in environmentally friendly products and services,” and “consideration
for local and global communities” from the perspective of ESG and disclosure.

Obtained high scores in “SMBC Sustainability
Assessment Loan” and “SMBC Business Continuity
Assessment Loan”(Sumitomo Mitsui Banking Corporation)

SMBC Business Continuity Assessment Loan: A financial product in which Sumitomo Mitsui Banking Corporation assesses a
company’s creation and operation of its Business Continuity Plan (BCP) and Business Continuity Management System (BCMS)
based on unique assessment criteria created with MS&AD InterRisk Research & Consulting, Inc., and provides information aimed
at the enhancement of such initiatives.

SG Holdings Group●SG Holdings was recognized for the three following points concerning its Business Continuity Plan (BCP).
1. Establishment of means of communication in emergencies
In addition to the introduction of a unique Web system as a means of communication in emergencies, satellite mobile phones
are installed in 26 major business sites to ensure communication between business sites. Furthermore, disaster PHSs areavailable in all 650 locations nationwide to ensure multiple means of communication are available.
2. Implementation of BCP drills throughout the entire GroupBCP drills are implemented throughout the entire Group to verify the effectiveness of the BCPs of each Group company. The
Group is engaged in efforts to strengthen the ability to respond in the event of a fire including Group coordination.
3. Monthly Risk Management Meetings
The condition of BCM initiatives and progress made to address various issues are checked by management in Group Risk
Management Meetings held monthly. Ongoing improvements are being made to BCM.

82

List of Certifications and Awards

Name of Award or Certification(Granting/Certifying Organization)Award for Excellence in the “Magazine/Newspaper
Type Internal Newsletter Category” of the FY2018“Keidanren Recommended Internal Newsletter
Review”(KEIDANREN (Japan Business Federation) Business
Services for Internal Communications)

DEALWATCH AWARDS 2017
IPO of the Year Award(Thomson Reuters Japan)

Overview

Scope

Data

Other Certifications and Awards

Held every year since 1966 for the purpose of increasing the level of internal newsletters by evaluating and encouraging day-today activities with the aim of promoting internal communication activities useful for management.
●Sagawa Express received the award for its HIKYAKU Company Newsletter. HIKYAKU was first published in 1974, andcontinues to be published to communicate management policies to all employees, including Sales Drivers®, who are at thecore of the company, and to activate internal communication.

Sagawa Express

These awards were established in 1995 with the aim of developing and expanding capital markets related to Japan, and award
excellent issuers issuing bonds and shares in Japanese capital markets, Japanese issuers making offerings overseas, andunderwriting securities companies that handle such issues and offerings.
●SG Holdings received the “IPO of the Year” award. It was recognized for being highly regarded among a wide range ofinvestors for its listing being one of the largest IPOs in fiscal 2017, the creation of a governance system and highly transparent
management system with the aim of becoming “Asia's Leading Comprehensive Logistics Company,” diversification of
procurement methods, focus on distribution between businesses, and highly profitable business model.

SG Holdings

83Environmental Data

Boundary

2014

2015

2016

2017

2018

Group

272,115

274,698

280,939

286,568

276,597

Sagawa Express

265,007

266,659

272,728

273,265

263,357

655

581

472

745

Scope 1 (t-CO2)

Expolanka

－

Group

161,074

163,602

159,770

137,655

135,943

Sagawa Express

122,264

125,305

124,304

105,523

105,310

872

679

669

620

Scope 2 (t-CO2)

Expolanka

－

Group

782,632

773,536

776,791

812,556

887,459

Sagawa Express

782,632

769,595

770,737

806,074

878,300

3,941

6,054

6,482

9,159

Scope 3 (t-CO2)

Expolanka

Total (t-CO2)

Group

－

1,215,821

1,211,836

1,217,500

1,236,779

1,299,999

Supplementary Information
2014: All domestic Group companies (excluding Sagawa Humony)
2015: A ll domestic Group companies (excluding Sagawa Humony) +Expolanka Freight (Sri Lanka)
2016: A ll domestic Group companies (excluding Sagawa Humony) +Expolanka Freight (Sri Lanka)
2017: A ll domestic Group companies (excluding Sagawa Humony) +Expolanka Freight (Sri Lanka) + SG Sagawa Ameroid
2018: A ll domestic Group companies + Expolanka Freight (Sri Lanka) + SG
Sagawa Ameroid

Data

CO2 Emissions

2014: All domestic Group companies (excluding Sagawa Humony)
2015: A ll domestic Group companies (excluding Sagawa Humony) +Expolanka Freight (Sri Lanka)
2016: A ll domestic Group companies (excluding Sagawa Humony) +Expolanka Freight (Sri Lanka)
2017: A ll domestic Group companies (excluding Sagawa Humony) +Expolanka Freight (Sri Lanka) + SG Sagawa Ameroid
2018: A ll domestic Group companies + Expolanka Freight (Sri Lanka) + SG
Sagawa Ameroid

2014: Sagawa Express
2015: Sagawa Express + Expolanka Freight (Sri Lanka)
2016: Sagawa Express + Expolanka Freight (Sri Lanka)
2017: Sagawa Express + Expolanka Freight (Sri Lanka)
2018: Sagawa Express + Expolanka Freight (Sri Lanka)

2014: All domestic Group companies (excluding Sagawa Humony)
2015: A ll domestic Group companies (excluding Sagawa Humony) +Expolanka Freight (Sri Lanka)
2016: A ll domestic Group companies (excluding Sagawa Humony) +Expolanka Freight (Sri Lanka)
2017: A ll domestic Group companies (excluding Sagawa Humony) +Expolanka Freight (Sri Lanka) + SG Sagawa Ameroid
2018: A ll domestic Group companies + Expolanka Freight (Sri Lanka) + SG
Sagawa Ameroid84

Environmental Data

CO2 reduction

2014

2015

2016

2017

2018

Modal shift (t-CO2)

Sagawa Express

－

－

－

147,987

143,053

Solar power
generation (t-CO2)

Expolanka

－

－

－

286

286

Electric vehicles
Number of
next-generation
vehiclesSupplementary Information

Hybrid vehicles
Natural gas trucks
Clean diesel vehicles

13

16

16

16

16

94

93

305

596

1,204

4,019

3,981

3,778

3,423

2,858

2,801

3,990

5,073

6,266

8,001

24,351

24,37924,51725,864

26,882

Sagawa Express
SG Moving
World Supply

Total number of operating vehicles

Data

Boundary

2014: Sagawa Express
2015: Sagawa Express
2016: Sagawa Express
2017: Sagawa Express + SG Moving + World Supply
2018: Sagawa Express + SG Moving + World Supply

Water and Waste
Boundary

2014

2015

2016

2017

2018

Supplementary Information
2014: Sagawa Express
2015: Sagawa Express
2016: Sagawa Express
2017: A ll domestic Group companies (excluding Sagawa
Humony) + SG Sagawa Ameroid
2018: All domestic Group companies + SG Sagawa Ameroid

Group779,748

747,809722,516

979,183

940,099

SagawaExpress

779,748

747,809722,516

723,152

726,480

SagawaExpress

3,927

3,139

2,820

3,417

4,527

Water used (m3)

Waste output (t)85Environmental Data

Boundary

2016(1) Costs within business area

216

1,152

161

1,132

241

1

4

1

4

7

3

214

197

154

215

227

245

1

3. Cost of circulation of resources(2) Up and downflow cost(3) Cost of management activities(4) Cost of research and development

SagawaExpress

－

－

(6) C
 ost of responding to environmental
damage－(7) Cost of safety measures

－

－

913
－

－

－

－

4,562

－

5,719

－

－

1,208
4
－

－
－

4,433

－

5,571

1,456

－

－

1
－
4,757
241

6,219

75,48976,382

74,865

Kerosene (kl)

155

157

134

Heavy oil (kl)

120

111

100

17,88816,81414,301Natural gas (including biogas) (km3)*1

1,020

City gas (km3)*1－

LNG (kg)

1,043

1,012

－

18,305

182,680

183,939

16,457

16,726

16,493211.76 million

206.1 million

205.68 million

Clean water (km3)

723

723

726

Sewage (km3)

488

476

468

Industrial water (clean water) (km3)

3

3

4

Industrial water (sewage) (km3)

3

3

4

1,127,181

1,090,063

1,792,023-1,517

Propane (kg)*2
Gasoline (including high octane) (kl)SagawaExpress

Electricity (kWh)Number of PET bottles recycled*3

163,603

Diesel (kl)－893

Kerosene (kl)

－

2

-23

Heavy oil (kl)

－

-9

-11

Natural gas (including biogas) (km )－-1,074-2,467

City gas (km3)－23

LNG (kg)

－

3

－

-31
－

－

1,259

-20,337

－

269

-234

Electricity (kWh)

－

-566

-417

Clean water (km3)

－

0

3

Sewage (km3)

－

-12

-8

Industrial water (clean water) (km3)

－

0

1

Industrial water (sewage) (km3)

－

0

1

Number of PET bottles recycled－-37,118

701,960

Propane (kg)Gasoline (including high octane) (kl)SagawaExpress

Supplementary Information

－

－
1

161

7
－

5

－
1

216

7
－

5

－

Diesel (kl)

Effects ofenvironmental
preservation

951
－

－

(5) Cost of social activities

Total

Environmental
performance indicators

2018

1. Cost of pollution prevention
2. C ost of preservation of the global
environment

Cost of environmental
preservation (millionsof yen)2017

Environmental Environmental Environmental Environmental Environmental Environmental
Investment
Expenses
Investment
Expenses
Investment
Expenses

Data

Environmental Accounting*1 F
 igures for natural gas and city gas were tallied using thefigures shown on invoices from suppliers without making
temperature or pressure corrections.
*2 T he figures shown on invoices from suppliers (m3) wereconverted into weight at 2.07kg/m3.
*3 The effect believed to have contributed to the recyclingof PET bottles by using PET bottles as the raw material
for uniforms is converted into the number of PET bottles.
(Value for conversion: Total weight (approx. 175g for shortsleeves and approx. 240g for long sleeves) x number of
uniforms x amount of polyester used (cotton material 65% /sweat absorption material 100%) x 1 (100% recycling rate ofpolyester used) ÷ 30 (30g per 500ml PET bottle))
Note:Tallying method●Guideline used as a reference: Environmental Accounting
Guideline, 2005 Edition, Ministry of the Environment●Acquisitions of assets valued at 200,000 yen or more arerecorded as investments.
●Environmental facilities are depreciated over four years by
the straight-line method.
●Personnel expenses are calculated based on the numberof hours of environmental activities x the average personnel
expenses of Sagawa Express.

86Personnel Data
Boundary

2014
59,26460,38061,04962,93465,194

Group

21,14923,57424,757

27,77430,85480,413

83,95485,80690,70896,04837,04936,76937,66038,77739,793

5,254

5,309

5,478

6,584

7,442

Total

42,30342,07843,13845,361

47,235

Men

1,076

1,010

1,076

633

795

129

239

278

275

349

Total

1,205

1,249

1,354

908

1,144

Men

554

618

646

723

806

44

49

56

66

75

Men
Number of Group employees

Women
Total
Men

Regular employees

Quasi-employees

Commissioned employees(Shokutaku)

Partner employees

Registered temporary
employees

Number of managers andadministrators

Women

Women

Women

Group

Group

Group

2016

2017

2018

Total

598

667

702

789

881

Men

18,621

19,31019,17520,745

21,970

Women

14,713

16,53817,333

19,621

21,940Total

33,33435,84836,50840,36643,910

Men

1,964

2,673

2,492

2,056

1,830

Women

Group

1,009

1,439

1,612

1,228

1,048

Total

2,973

4,112

4,104

3,284

2,878

Men

－

2,324

2,396

2,492

5,601

Women

Group

－

196

220

270

583

－

2,520

2,616

2,762

6,184

Group

－

7.78

8.41

9.78

9.43

－

－

－

1,645

2,739

Japan

－

－

－

168

948

－

－

－

1,813

3,687

－

－

－

9.3

25.7

Group

Total
Percentage of women among managers and administrators (%)
Men
Number of employees hired midcareer

2015

Women
Total

Percentage of women among employees hired mid-career (%)

Japan

Data

Employees

87Boundary

2014

2015

2016

2017

2018

383

542

536

523

403

Japan

166

223

230

244

224

549

765

766

767

627

Percentage of women among new graduates joining company (%)

Japan

30.2

29.2

30.0

31.8

35.7

Retention rate of regular employees (%)(Percentage of employees who remain in the company during theyear they joined the company)

Japan

－

－

90.3

91.0

93.0

New graduate employee retention rate (3rd year) (%)

Japan

－

－

－

－

72.8

New graduate employee retention rate (2nd year) (%)

Japan

－

－

－

75.8

81.1

New graduate employee retention rate (1st year) (%)

Japan

－

－

－

85.7

88.1

－

－

－

12.1

12.2

Men
Number of New graduates joining
company

Women
Total

Men
Average years of service (years)

Women

Japan

Total

－

－

－

5.9

6.9

－

－

－

9.7

11.4

Turnover rate (%)

Japan

－

－

5.6

5.9

5.8

Group employment ratio of persons with disabilities (%)

Japan

－

－

2.06

2.04

2.28

Number of persons who took maternity leave

Japan

－

239

253

259

263

Number of persons who took childcare leave

Japan

－

341

272

382

499

Childcare leave rate (%)(Women who took childcare leave as a percentage of those who
gave birth)

Japan

－

100

98.86

99.42

98.94

Return-to-work rate after maternity leave and childcare leave (%)
Persons who returned to work before or upon the termination ofleave as a percentage of those whose leave was scheduled toterminate in the fiscal year

Japan

－

99.16

99.74

95.22

94.56

Overtime hours compared toprevious year (%)

Employee Engagement Survey (%)

Drivers

Japan

－

－

－

－

90.5

Non-drivers

Japan

－

－

－

－

96.6

Affirmative response rate
for questions regarding“employee engagement”

Japan

－

－

－

－

56

Affirmative response rate forquestions regarding “creating
an environment that makes
good use of employees”

Japan

－

－

－

－

49

－

－

497

571

468

－

－

323

380

397

－

－

820

951

865

Not resulting in absence
Workplace accidents

Resulting in absence
Total

Japan

Data

Personnel Data

88

Governance-related Data
Boundary2017

MenTotal number of Directors

8

8

1

1

Total

9

9

Men

7

7

0

0

1

1

Women

Directors

Women
Men

Independent Outside Directors

2018

Women

Group

Group

Group

1

1

Percentage of Female Directors (%) (number/number)Group

11 (1/9)

11 (1/9)

Percentage of Independent Officers (%) (number/number)Group

22 (2/9)22 (2/9)

12

12

10

6

22

18

Data

Board of Directors

Status of meetings of the Board of Directors (number of meetings)
Regular meetings of the Board of Directors
Irregular meetings of the Board of Directors

Group

Total
Attendance of Board of Directors (%) (times in attendance / times held)
Eiichi Kuriwada

Appointed in March 2006

100 (22/22)

100 (18/18)

Tadashi MachidaAppointed in June 2013 / Retired in June 2019

100 (22/22)

100 (18/18)

Hideo Araki

Appointed in June 2014

95 (21/22)

100 (18/18)

Shunichi Nakajima

Appointed in June 2014

100 (22/22)

100 (18/18)

Tomoki Sano

Appointed in June 2017

100 (18/18)

100 (18/18)

Kimiaki Sasamori

Appointed in June 2017 / Retired in June 2019

100 (18/18)

100 (18/18)

95 (21/22)

100 (4/4)

Toru Mitani

Appointed in June 2007 / Retired in June 2018

Kosuke Saga

Appointed in June 2018 / Retired in June 2019

Kunio Takagi

Appointed in June 2007 / Retired in June 2019

Mika Takaoka

Appointed in June 2018－

100 (14/14)

Takashi Nakanishi

Appointed in June 2015

100 (22/22)

100 (18/18)

Group

－

100 (14/14)

100 (22/22)

100 (18/18)

Masayuki Tominaga

Appointed in June 2008

100 (22/22)

100 (18/18)

Kenichiro Okamura

Appointed in June 2015

100 (12/12)

94 (17/18)

Yoshitaka Ooshima

Appointed in October 2017

100 (22/22)

100 (18/18)

Naoshige Nakada

Appointed in June 2015 / Retired in October 2017

100 (10/10)

－

Total

99.20

99.6

89

Governance-related Data
Boundary

2017

Men
Composition of Audit & Supervisory
Board (people)

4

4

0

0

Total

4

4

Men

1

1

0

0

3

3

0

0

75 (3/4)

75 (3/4)

12

12

Women

Audit & Supervisory Board
Members (people)

Women

Independent Audit &Supervisory Board Members(people)

2018

Men
Women

Percentage of Independent Audit & Supervisory Board Members (%) (number/number)

Group

Group

Group
Group

Data

Audit & Supervisory Board

Status of meetings of the Audit & Supervisory Board (number of meetings)
Regular meetings of the Audit & Supervisory Board
Irregular meetings of the Audit & Supervisory Board

Group

Total

2

2

14

14

Status of Major Meetings
Boundary

2017

2018

Investment Committee (number of
meetings)

SG Holdings Directors, Executive Officers,
Department Managers

Group

24

23

Group Budget Committee (numberof meetings)

SG Holdings Directors, Executive Officers,
Department Managers

Group

8

6

Group Management Strategy
Meetings (number of meetings)

SG Holdings Directors, Executive Officers,
Department Managers, and Group company
presidents

Group

12

12

Group Risk Management Meetings(number of meetings)

SG Holdings Directors, Executive Officers,
Department Managers, and Group company
presidents

Group

12

12

Group Administration Department
Managers' Meetings (number of
meetings)

SG Holdings Directors, Executive Officers,
Department Managers, and Group company
presidents

Group

11

11

CSR Committee (number of
meetings)

SG Holdings Directors, Executive Officers,
Department Managers, and Group company
presidents

Group

3

3

90

Governance-related Data
Boundary

2017

2018

Group

No

Yes

504

526

－

90

504

616

16

19

－

－

Total

16

19

Fixed remuneration

63

72

Existence of performance-linked remuneration program

Data

Remuneration

Remuneration system (millions of yen)Fixed remuneration
Remuneration of Directors (Inside)(Excluding subsidiary remuneration Performance-linked remunerationand company housing expenses)
Total
Remuneration of Audit &Supervisory Board Members(Inside)Group

Fixed remuneration
Performance-linked remuneration

Remuneration of Outside Officers Performance-linked remuneration
Total

Group

Group

－

－

63

72

91

Category

Name

Details

Year of
Enforcement

Traffic safety

Basic Policy on Transportation Safety

Stipulates improvement and disclosure of transportation safety

2006*

Labor health and safety

Health and Safety Regulations

Stipulates the prevention of workplace accidents, ensuring safety and health of
employees, and establishment of the workplace environment

2002

Quality

Sagawa Express Quality Policy

Stipulates service quality

Environment

Environmental Policy

Stipulates the promotion of business activities considering the global environment

2014

Human rights

Human Rights Policy

Stipulates respect for human rights of all stakeholders

2014

Labor practices

Personnel Vision

Stipulates the Group’s approach to employees such as organizational culture and work
styles2012

Business Partner CSR Guidelines

Seeks to share awareness of CSR with business partners

2014

Business Partner Management Rules

Stipulates matters related to the selection, evaluation, and management of business
partners

2006

Code of ethics

Code of Ethics and Conduct

Specifically expresses the Group Charter of Corporate Conduct

2008

Whistleblower protection

Included in Code of Ethics and Conduct

Stipulates ensuring anonymity of whistleblowers

2008

Coexistence with local communities

Included in Code of Ethics and Conduct

Stipulates interacting with local communities and respect for local culture and customs

2008

Anti-corruption

Included in Code of Ethics and Conduct

Stipulates propriety of business entertainment expenses and dealings with government
officials and politicians

2008

Information security

Information Security Basic Policy

Stipulates general information security

2014

Personal Information Protection Policy

Stipulates basic matters concerning the protection of personal information

2018

GDPR Privacy Policy

Privacy policy for people located within the EEA

2018Supplier management

Data

Policies−

Personal information protection*Year of enforcement of the transport safety management system by the Ministry of Land, Infrastructure, Transport and Tourism

92Third-Party Opinion

Third-Party Opinion

Mami Oku
Professor
Department of Urban Policy and Science
Faculty of Urban Environment
Tokyo Metropolitan University
The SG Holdings Group CSR Report 2019 follows the same style as last year, summarizing

battery collection scheme, work with a university hospital on systems for transporting luggage

the Group’s policies, systems, initiatives and results regarding each of the seven material CSR

for people going into or home from the hospital, work with Silver HR Center and municipalities toissues it identified in FY2017, updating and expanding the content. As a CSR Report, it is bothestablish collection and delivery systems based on trilateral agreements, work with prefectural

systematic and comprehensive. I find it to be a tremendous accomplishment. With a summary

and municipal governments based on comprehensive partnership agreements for regionalof recognitions and awards along with other data at the end, this latest report is designed sorevitalization covering a wide variety of efforts to achieve solutions to pressing social issues,

readers can easily grasp at a glance what has happened yearly.

such as promoting industry in outlying regions, and disaster relief, and starting collection andThree main points in this report jumped out at me: The first is the message from the newdelivery systems by expanding cooperation to work with taxi services as well as railways, buses

President, who took office April 1, 2019. In that message, he expresses his strong motivationand shared taxis. I think these are fine examples of how the Group views its business and its

to carry out the Group’s ideas to “advancing comprehensive logistics solutions” and ”enhancing

contribution to society and the places where it does business as two sides of a single coin.

our management platform” in an even more focused way than before, by building on the

The third point is the Group’s centralized management of its business activities and data. For

initiatives it carried out in First Stage 2018, its former three-year Mid-term Management Plan

example, SG Holdings practices centralized management of its environmental data in Japanthat ended in FY2018, even as the business environment surrounding the logistics field changes

while also gathering information from abroad so each Group company can implement this in its

due to the rapid growth of emerging economies and the increased sophistication of IT.

efforts to reduce the environmental load of its business units. In addition, the Group’s initiatives

The new three-year Mid-term Management Plan, Second Stage 2021, starting in FY2019,to centralize management of its internal vehicular maintenance information, and data on people,

makes clear how the Group is positioning its commitment to contribute to Sustainable

things and vehicles at large commercial facilities contributes to both its safety policies and its

Development Goals (SDGs). Based on that, the Group is giving due consideration to its policies

efforts to add value in logistics services. The challenge the Group faces is how best to put thisand goals regarding the seven material CSR issues in the medium to long term. In May 2019,

centralized data to work in the advancement of its logistics solutions. Can it make good strategic

the SG Holdings Group subscribed to the recommendations of the Task Force on Climate-use of this data? We have to wait and see.

related Financial Disclosures (TCFD), declaring its intention to deepen its understanding of the

In my Third-Party Opinion last year, I pointed to these three issues: First, while last year’s reportrisks and opportunities climate change represents for its business. The president’s message

was already systematic and comprehensive, I recommended that it should highlight what’s newis well worth reading. He reaffirms the Group’s mission “to create new value through logistics

and what’s important, to make into an effective communications tool with interesting contrasts,

solutions, holding up our corner of the social infrastructure that supports production andsomething that people would really want to read. Second, each year’s targets and results, along

distribution,” making clear its commitment to society.

with their analysis, together with future remedial plans and courses of action, are essential

The second point is that, to realize the mission as stated, the Group's cooperation andparts of any CSR report, and all of these must be made clear in one package. The final point

coordination have been made with a wide variety of companies and other entities, not restricted

was the question of whether the report was vibrant enough, adequately presenting the faces ofwithin itself, to create new kinds of social systems and business models. For example, in this

employees and shareholders in all their diversity. On these points, I am monitoring the progress

report you can read about the Group’s efforts to work with railways and maritime shipping

the Group has made, and I look forward to further improvement.

companies on modal shift, work with the Japan Auto Recycling Partnership on lithium-ion

93

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601-8104, Japan
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Title: CSR Report 2019
Published in September 2019
Last issue: November 2018
Next issue: September 2020 (scheduled)