CSR Report
Corporate Social Responsibility Report 2012

Connecting People, Society, and the FutureConnecting People, Society, and the Future
We're connected to the people who are important to you.
Today is connected to the future.
Every day, we connect each and every customer who thinks this way,
all the employees we work with, our business partners, local society,and the people of the world.
That is the calling of the SG Holdings Group.
Together with all of our stakeholders, we connect people, society,and the future.
Company Summary
SG Holdings Co., Ltd. is a holding company for the corporategroup centered on Sagawa Express Co., Ltd. It handles all the
management strategy drafting and administrative functions of
the overall group and specializes in functions for carrying out
the work of each company. This management structure allows
us to increase our decision-making speed to match the everchanging demands of society and make the most of the group's
overall strengths.
Trade nameSG HOLDINGS CO., LTD.
Establishment
March 21, 2006
Businesses
Group management strategy drafting, administration, andrelated ancillary work
Location
68 Tsunoda-cho, Kamitoba, Minami-ku, Kyoto, 601-8104 JapanCHAIRMAN, REPRESENTATIVE DIRECTOR, and PRESIDENT
Eiichi Kuriwada
Capitalization
11,383 million yen

Table of Contents
02

Top Message

04

Philosophy and Guiding Principles

06

Corporate Governance08

Management Vision and Medium Term Management Plan

10

Business Structure and Business Summary

13	Feature (1): Our Calling as a Standard Bearer for Logistics,
a Vital Societal Infrastructure
20

Feature (2): Wakuwaku Women's Project

22

Safety Initiatives

28

Environmental Initiatives

34

Relationship with the Community

Editing Policies
・The SG Holdings Group CSR Report has been published in two separate versions since
fiscal 2011: a printed version (a report summarizing important topics) and an online
version (a detailed report). For fiscal 2012, we have partially reviewed the role of theprinted version and have aimed to draft a report that communicates an appropriate
amount of information in the printed version alone.
・We have also referred to the Ministry of Environment's Environmental Reporting
Guidelines 2007 and Sustainability Reporting Guidelines 2006 (GRI).
・Business Results Data have been compiled from Fiscal 2011 statistics. (Some content
represents that of Fiscal 2012.)
・For certain initiatives for which we are unable to report numerical yearly results, wehave described the corresponding period.

Period Subject to Reporting
March 21, 2011 - March 20, 2012
Organizations Subject to Reporting
Reports concerning the activities of SG Holdings Group companies and foundations,particularly the results of Sagawa Express.
Other Methods of Providing Information
A more detailed report is available on the SG Holdings website. This report is alsoavailable for download.

http://www.sg-hldgs.co.jp/english/csr/report/
Relationship between the printed and online (detailed report) versions of the Report
Printed version
A report that mainly summarizes topics with ahigh degree of interest and concern forreaders so that many people are able to enjoy
the content

Introduces important
topics in aneasy-to-understandmannerOnline version (detailed report)
A report that complements the information
contained in the printed version, and aims tohelp readers understand in further detail the
SG Holdings Group’s Safety Initiatives,
Environmental Initiatives, and Relationshipwith the Community

Discloses more detailed,comprehensive information

Top Message

We will reconfirm oursocial calling of beinga standard bearer for
logistics infrastructure
and aim to becomea corporate groupthat can contribute to
the development of asustainable society.
Eichi Kuriwada
Chairman, Representative Director and President
SG Holdings Co., Ltd.

Reconfirming Our Awareness of the Important Responsibilityof Shouldering Logistics in a Social Crisis such as a Disaster
We would like to offer our sincerest condolences to all
those affected by the Great East Japan Earthquake.
The SG Holdings Group companies also suffereddamage in this earthquake, in terms of both employees,
their families, facilities, and vehicles, particularly in affected
coastal areas. In this kind of social crisis, we all strongly
feel that we would like to assist, even in some small way,
and since the immediate aftermath of the quake, theCompany as a whole has worked to transport support
supplies with the assistance of the national government,
local authorities, industry groups, and other relatedorganizations. We also strove to rebuild our transportation
structure as quickly as possible, manging to restart our
Branch Pickup Service approximately one week after thefact, thus enabling us to deliver packages sent from acrossJapan to those living in affected areas.
Logistics is one type of social infrastructure, and we
think that it is good to consider it like the air you breathe.
We felt that our corporate philosophy is fully embedded
and felt secure in our in-the-field capabilities on seeing
the attitude of our employees, who were burning witha certain sense of mission in securely and smoothly
delivering valuable packages as normal even in the midstof this type of large scale disaster. Many of our customers
also expressed their gratitude that packages were being
delivered as normal. This served as an opportunity forour employees working in the field to reconfirm exactly
how important the tasks they perform are. We would
like to use what we have gained from this experience tofurther increase service quality and strengthen our crisis02

SG HOLDINGS GROUP Corporate Social Responsibility Report 2012

Visiting the affected areas
and offering strong support
to local drivers(Related article: P. 13 Special
Feature: "Our Calling asa Standard Bearer for
Logistics, a Vital Societal
Infrastructure")

All Group companies
strive to advocate for theachievements of female
employees and for work-lifebalance( R e l a t e d a r t i c l e : P. 2 0
Special Feature: "Wakuwaku
Women's Project")management.
The Group will continue to make long-term efforts torestore and rebuild affected areas. We feel that in doingso, it is important to continue activities through our main
business, such as evolving and developing our businesses
and creating employment.

the front lines connecting with customers, play the mostimportant roles in stakeholder management. In fiscal 2012,
we announced our personnel vision that reveals what
human resources should be. Challenge for Innovation:
Shining Individuality, A Connection Mentality, and theWidening World. This personnel vision was drafted witha focus on young employees, who will carry the Group in
the future, and expects that no employees will be satisfied
with current conditions, that they will always be aware ofissues, and that they will press forward with innovation.
At the same time, we have also been emphasizing
our advocacy of female achievements and the worklife balance so that each individual employee feels job
satisfaction and is able to fully display their skills. We
perceive our business, which is mainly transport, as aservice industry, and the feelings and ideas of female
employees are one of our great strengths. At present,
women make up 20% of our employees. We intend toincrease that number to 30% in 2014 and will proceedwith creating an environment that is easy for women
to work in. We will also enhance our human resource
cultivation system in light of the work-life balance. We
feel that improving this balance is essential in having thehuman resources we have cultivated perform well.

The First Steps of CSR are Employment throughContinued Growth and Obeying Laws and Regulations
The employees of the SG Holdings Group currently
number more than 70,000, and when we include theirfamilies and those in cooperating companies, ourbusinesses support the lives of hundreds of thousands ofpeople. As someone who bears responsibility for groupmanagement, I truly feel that protecting employment anddaily life is the first step toward CSR. The fundamentals in
realizing CSR make up the stable and continued growthof business and obeying laws and regulations which isessential as a member of society.
In terms of the management plan, which paints a
picture of the group's growth, this term, we finishedthe second year of the Second Stage Plan, our medium
term management plan started in fiscal 2010. This plansets as its targets the expansion of business areas andstrengthening of our revenue bases, aiming to further
enhance the revenue base of the group's core delivery
business, as well as making efforts to display the Group's
synergy and establishing the group's second, third, andfourth pillars. Management at each company is fully
aware that we are pillars supporting the group. We feelthat we would like to connect this awareness to concrete
results by expanding it to middle management andemployees in the field.

Further Utilizing Valuable Human Resources by Promoting
the Achievements of Female Employees and Work-Life BalanceContinuing to Be Necessar y to a RapidlyChanging Society
Using our creative originality, the SG Holdings Grouphas been able to achieve the services desired by ourcustomers, and continues to grow by cultivating trust.
Going forward, we will hold dialogs with all stakeholders
from employees to local communities, shareholders, andtrading partners, in order to increase their understanding,
and will swiftly and earnestly respond to requests fromsociety while fulfilling the social responsibilities required of
the Group.

In promoting our medium term management plan, we
operate under a stakeholder management framework that
adapts to the expectations of those around the Group.
We believe that our employees themselves, who stand at

SG HOLDINGS GROUP Corporate Social Responsibility Report 201203

SG Holdings Group Corporate
Philosophy and Guiding Principles
The SG Holdings Group's corporate activities are all created in line with the sense of ethics of all our managers
and employees. We have established a Corporate Philosophy, a Code of Conduct, and Ethical and Action
Standards and we practice them across the entire Company in order to promote the creation of systems to ensure
appropriate work and the establishment of systems to obey laws and regulations.

SG Holdings Group Corporate Philosophy
The SG Holdings Group inherits the hikyaku express spirit -- the origin of Sagawa Express's establishment -- andengages in fair and free corporate activities that respect human rights and observe laws and regulations.
The hikyaku express spirit represents our motto of serving"speedily, securely, and courteously."
1. Fully promote the philosophy of "customer comes first."
1. Work for the development of local communities.
1. Make responsibility and good faith our calling.

SG Holdings Group Code of Conduct
Declaration to Earn the Trust and Empathy of Society
The SG Holdings Group engages in fair competition to create added value, bears responsibility for the development ofan economic society, and aims to become a company that is useful for many sectors of society. To do so, all directors andemployees of the SG Holdings Group stand as one at all times in order to throughly promote stakeholder management;
respect human rights and obey related laws/regulations, international rules, and the spirit thereof both domestically andinternationally; and fulfill our social responsibility with a high sense of ethics based on the following eight principles andmanagement attitudes aimed toward creating a sustainable society.
Together with Customer Expectations
1. We shall gain trust and satisfaction through developing and providing useful and highly convenient products and aiming to continually improve our level of service.

Together with Employee Expectations
2. We shall respect the diversity, character, and individuality of our employees, strive to create a work environment which is safe and easy to workin, and create a free and fulfilling workplace.

Together with Community Expectations
3. We shall act independently, with our safety and environmental initiatives serving as a necessary requirement for the Group's existence and activities.
4. We shall proactively undertake social contribution activities as a good corporate citizen.
5. We shall, in terms of international business activities, not only obey all national and local laws and respect all international models such as
human rights, but also engage in management which is considerate of our stakeholders, including their culture and customs, and contribute to
the development of their respective nations and communities.

Together with Shareholder and Trading Partner Expectations
6. We strive to communicate not just with our shareholders, but with society as a whole, and we proactively and fairly disclose corporate information.
Further, we thoroughly protect and manage the information that we possess, including personal information and customer information.
7. We engage in fair, transparent, and free competition as well as appropriate trading. We also maintain healthy and normal relationships with
politics and with the government.
8. We stand resolute against anti-social forces and organizations that threaten civic order and safety, and we thoroughly refuse all relations with such groups.

Management Attitudes
1. The management is aware of our responsibility to carry out the spirit of this Code, and we shall take the initiative in doing so to set an example
for others, thus allowing it to permeate thoroughly within the Group and assisting in achieving this goal at our trading partners as well. In
addition, we shall promote business activities that respond to the needs of our various stakeholders and establish effective internal systems.
2. In cases when an incident arises that runs contrary to code, the management shall make clear its stance toward resolving the problem to allinternally and externally, strive to discover the reason for its occurrence and prevent it from happening again, and promptly and accurately
disclose information to the public.

04

SG HOLDINGS GROUP Corporate Social Responsibility Report 2012

SG Holdings Group Ethical and Action Standards (Abridged)
We shall act in accordance with these Ethical and Action Standards, which are a concrete representation of the SG Holdings Group Code of Conduct.
1. We shall continue to expand together with customer expectations.
2. We shall continue to create a bright workplace together with employee expectations.
3. We shall continue to press forward together with community expectations.
4. We shall continue to build trust together with shareholder and trading partner expectations.

SG Holdings Group Unified Slogan

Safety, Environment, and Service
Toward World Standards for All Aspects of Quality

Stakeholder Management and Fundamental CSR Concept
The SG Holdings Group raises the banner of stakeholder
management, which accurately responds to the
expectations of all stakeholders: customers, employees,
local communities, shareholders, and trading partners.
In order to become a corporation that is needed bysociety as a whole, we ensure that our management
is highly efficient, healthy, and transparent, and makethe fulfillment of our corporate social responsibility
our basic policy. We will accomplish this by thoroughly
promoting corporate ethics and compliance with laws
and regulations, and by enhancing risk management andcompliance in order to continually improve our corporate
value based on our basic internal control policy.
We believe that fulfilling our responsibility to all
stakeholders is the adaptability to respond to thediversifying and increasingly advancing needs and desiresof the community, and that it is something that we do inorder to strive toward securing corporate trust.
The SG Holdings Group has two CSR concepts: basic CSR
and developmental CSR. We feel that compliance with laws
and regulations, which is done to ensure the continuationof corporate activities, is an essential item of basic CSR.
On top of this basic CSR, there is also developmental CSR,
which responds to the various manifest expectations andrequests from the community and contributes to society.
We are aware that business activities and social
development are closely intertwined, and we feel that
continually connecting the two pillars together andmanaging them is one way to contribute to the continued
development of society.

SG Holdings Group Basic CSR Concept Chart
Society / stakeholders

SG Holdings Group

Basic CSR

Fair and transparent corporate
management /Improvement of profitability

Respecting human rights /Corporate ethics /Compliance with laws
and regulations

Business activity
responsibility

Economic responsibility

Compliance responsibility
Risk management responsibility

CSR activities

Information security /Safety activities /Quality and customer service

Socialcontribution
activities

SG Holdings Group Code of Conduct

Environmental preservation activities /Patronage /International cooperation activities /Social contribution activities

Management with consideration for stakeholders

Developmental CSR

Clients

Trading
partners

Shareholders

Employees

Local
communities

SG HOLDINGS GROUP Corporate Social Responsibility Report 201205

Corporate Governance
The SG Holdings Group strives to slim down its management structure and practice speedy management aswell as work to enhance governance through separating management audit functions and business affairs
and clarifying authority and responsibility.

Corporate Governance System Summary
Board of Directors

Management and Administration Enhancement Committees

In addition to undertaking business affairs through reportingon management intent, performing budget control, and otherimportant items, the Board of Directors is also positioned as anorganization that audits the business affairs of each director.
Ordinary meetings of the Board of Directors are held monthly.
Board of Auditors
Through attendance at not only the Board of Directors
meetings but other important meetings as well, it audits thelegality and appropriateness of the Directors' business affairs.
It strives for efficient and appropriate auditing functions inorder to enhance corporate governance and management
regulations.
Management Strategies Meetings
Business Promotion Meetings

These internal committees were established to be involved in issues
related to advancing auditing entities and corporate structure with thegoal of providing a further managerial and administrative structure forinternal control appropriate for a listed corporation.
Risk Management Meetings
The committee sets forth Risk Management Guidelines
for company loss risks, and holds monthly risk management
meetings, of which Representative Directors from each groupcompany are members. The committee brings together
the risks of all companies in an effort to establish a Groupmanagement structure that laterally deals with a variety of risks
that can have significant adverse effects on management.
Investment Investigation Committee
Information Investment Investigation Committee

These meetings improve the performance of guidance andadministration of all aspects of Group company management
through communicating important decisions, reports, andother such matters concerning group management policies,
management strategies, and the like.

These committees assess, deliberate on, and coordinate
risks related to the efficacy and health of the Company andGroup companies' investments and verify the post-investment
conditions and effects.

Corporate Governance System
Stakeholders(Clients, employees, local communities, shareholders, trading partners)
General meeting of shareholders

Elected / retired
Elected / retired

SG Holdings Co., Ltd.

Corporate Auditors, etc.

Director

Business execution

Tie-ups

Representative Director
Approval

ReportManagement and Administration Enhancement Committee

Information Investment Investigation Committee

Guidance
ReportInternal Auditing
Department

Corporate Auditors

Management strategies meetings
Policies, planning, deliberation
Guidance, approval, direction, etc.

Budget Committee

Risk management meetings

Business promotion meetings
Departments and units at the Head Office

Management instruction/ Approval and guidance on important items
Submitting items for consideration, reporting / pre-deliberations

Group companies

SG HOLDINGS GROUP Corporate Social Responsibility Report 2012

Tie-ups

Corporate Auditors

Investment Investigation Committee

06

Tie-ups

Board of Auditors

Accounting Auditor

Corporate Advisor and Lawyer

Board of Directors

ReportSG Holdings Group

ReportElected / retired

Report / discussion

Basic Internal Control Policy (Abridged)
The SG Holdings Group ensures that its internal control

continued review in light of changes in the management

functions are effective, and also ceaselessly evaluates themenvironment and strive to prepare more effective internal

and makes necessary improvements. We also engage incontrol.

We are aware of the necessity to strengthen compliance systems further and for corporations to display clear policies
toward preventing damage due to anti-social forces as a means of handling changes in the social and management
environments, and we have reviewed and made necessary revisions to the SG Holdings Group Basic Internal Control Policy.
* The items below are related to compliance and risk management (abridged).
Systems to Ensure that the Director and Employee Work Performed Complies with Laws, Regulations, and the Articles of Incorporation
・ The following are set forth so that directors and employees will obey laws, regulations, and the Articles of Incorporation and to construct a
corporate climate of undertaking ethical business activities.
(1) Management strategy meetings shall be held and continued improvements to the compliance system shall be promoted.
(2) Laws, regulations, and the Articles of Incorporation shall be obeyed and business activities shall be performed with a high sense of ethics
based on the Group's Code of Conduct.
(3) The Group's Ethical and Action Standards shall be the basic action policy for directors and employees.

・ The Ask Anything consultation office shall be established for the Group as an internal reporting system with the purpose of discovering legal
non-compliance at an early stage and preventing scandals before they occur. The Company shall work to maintain and improve systems basedon the Internal Reporter Protection Regulations in which information collection, reporting, and consultation can be conducted from the pointof view of protecting whisteblowers, and shall take quick and appropriate measures when corrections and/or improvements need to be made.

・ The Company is aware that eliminating anti-social forces which threaten social order and safety is an important issue shared across thecommunity, and, as a socially-responsible corporation, shall set forth a basic policy regarding anti-social forces as given below and prepare
systems for the actualization of this basic policy.
(1) The Company shall decisively confront anti-social forces and fully refuse relations therewith.
(2) The Company shall not respond to unreasonable requests from anti-social forces and shall not engage in any backdoor dealings or provide investment.
(3) The Company shall respond to anti-social forces at the organizational and legal level after having liaised with specialized externalorganizations, and shall place the utmost priority on securing the safety of our directors and employees.

Regulations and Other Systems for Managing Risk of Loss
・ The Company shall engage in preventative management of the various business risks that we face, be they strategic, business activity, financial
reporting, or otherwise, based on the Risk Management Regulations.

・ In cases where an incident occurs that could cause major damage to corporate management, business activities, and/or the corporate image,or that could have grievous adverse effects on society as a whole, the Company shall respond appropriately based on the Crisis Management
Regulations and the Disaster Management Regulations.

・ Risk management meetings shall be held as appropriate, efforts shall be made to prevent and minimize risks and decrease losses
occurring therefrom, and the Company shall promote the enhancement of risk management systems.

Refusing Relations with Anti-Social Forces
SG Holdings and the SG Holdings Group companies
shall press forth with a resolute attitude and postureagainst anti-social forces that threaten civil order andsafety, and shall set as their basic policy the refusal of
relations with anti-social forces.
Not only shall the above-mentioned policy be includedin the Basic Internal Control Policy, the Company also
swears such in our Code of Conduct, and shall set forthsimilar regulations in the Ethical and Action Standards
and Employee Regulations, and shall engage in employee
education .
Administration Departments in each Company shallfully share information about anti-social forces and how
to respond to them and strive to prevent them frominterfering with clients and/or stop such interference if it
occurs.

Spreading Corporate Ethics: Enhancing Compliance Systems and Preparing R isk
Management Systems
SG Holdings is aware that the management ofcompliance systems given in the SG Holdings Group
Ethical and Action Standards and the risk management
systems that understand, evaluate, and administer risks inthe process of all businesses undertaken by each Group
company are important pillars supporting internal control,and is working to enhance each of these systems.

In fiscal 2010, we constructed risk management systems
for each company through the risk management site, andin fiscal 2011, we began preparations for management
systems across the Group as a whole. At the same time,
we conduct education for all group employees in order tofurther strengthen our compliance systems.

SG HOLDINGS GROUP Corporate Social Responsibility Report 201207

SG Holdings Group Management Vision
and Medium Term Management Plan
Management Vision"Group companies will form their own business bases and create their own new values."
We will swiftly respond to changes in our customers' needs and the market environment, continue to revolutionize
and make new challenges for growth long into the future, create new value, and strive to establish businesses that will
become the second, third, and fourth pillars of the Group.

Second Stage Plan, the Fiscal 2010-2012 Medium Term Management Plan

Expanding business areas and enhancing the profit base

The SG Holdings Group medium term management plan

Second Stage Plan
Establishing a sustainable,
growable business base
SG Holdings Group medium term management plan

First Stage Plan

1. Further enhancing our revenue base in the delivery business
2. Enhancing the commercialization of our second, third, and fourth pillar
businesses by concentrating management resources in important businesses
3. Quickly responding to changes in society and client needs, and promoting
commercialization
4. Enhancing and cultivating human resources, and creating a workplaceenvironment in which all of our human resources are able to fulfill theirpotential
5. Improving the trust and assessment of society and promoting activities thatearn empathy

On the path to stable
expansion
SG Holdings Group medium term management plan

Third Stage Plan

Business scale (sales, profit, etc.)

B

B

B

A
DeliverybusinessC

Logistics
Other businesses
business

Fiscal 2007 - 2009

Deliverybusiness

Logistics
business

A

C

Deliverybusiness

A

D

Logistics Other businesses
business

Other businesses

Fiscal 2010 - 2012

Fiscal 2013 - 2016

Kindling a clear awareness of goals and creating new motivation
Stakeholder management which can respond to a wide variety of stakeholder expectations(1) Clients(2) Employees(3) Local communities(4) Shareholders(5) Trading partners

Improving the level of service

Stabilizing and improving private lives

Safety and the environment

Improving corporate value

Fair and just trading

Results for the Second Year of Second Stage Plan, Our Medium Term Management Plan
In fiscal 2011, the second year of the Second Stage
Plan, our medium term management plan, we aimed tostrengthen the revenue base of the delivery business,
expand businesses areas that comprehensively utilize ourmanagement resources, and improve competitiveness andgrowth capabilities for the group as a whole in our quest
to expand business areas and strengthen our revenue
base. Yet operating revenue (¥881.1 billion; 98.5% of theprevious period) and operating profit (¥29.5 billion; 97.4%

08

SG HOLDINGS GROUP Corporate Social Responsibility Report 2012of the previous period) both decreased due to the increasein oil prices and concerns about deflation.
In the next fiscal year, through having group companies
proceed with business with an eye to achieving the plan's
targets, we aim to improve corporate value and make a
giant leap forward with the aim of heading for the final
stage of the medium term management plan, "toward astable path of expansion."SG Holdings Group Business Data (Consolidated)
We are expanding our business in the following three areas: the delivery business, the logistics business, andother businesses. The group as a whole suffered decreases from the previous period both in terms of both operating
revenue and operating profit.
Number of employees (consolidated) /Number of vehicles owned (Sagawa Express)(People) /(Vehicles)

80,000

Number of employees(consolidated)

70,34970,89863,02050,000Operating profit / Ordinary profit(100 million yen)(100 million yen)

8,943

Ordinary profit

Net profit(100 million yen)

150

142

8,811

8,500

300

8,000

302

303

295

267

268

264

100

102

200

40,0007,500

30,00020,000Operating profit

400

9,000

8,881

70,00060,000Operating revenue

Number of vehicles owned(Sagawa Express)

26,431

26,86961

50

26,779100

7,000

10,000
0

,

09

,

10

,
11 (fiscal year)

0

,

09

,

10

,

0
11 (fiscal year)

,

09

,

10

,

0
11 (fiscal year)

,

,

09

,

10

11 (fiscal year)

Results Summary by Segment
Delivery Business

Delivery businessIn the delivery business, with an eye toward improving customer convenience, we began
new services such as a home delivery box-based package transport reception service and theinstallation of Hikyaku MyBox’s, the industry's first private P.O. boxes. We also proactively promoted
the development of new delivery-related services such as Hikyaku Sealed Delivery Service and our
Consignee Identification Delivery Service and the enhancement of infrastructure toward quality
improvement efforts, such as expanded business bases, including small scale stores. Thanks to these
efforts, the volume handled by Hikyaku Express increased, although transportation fees shifted
downward due to increased competition with other companies in the industry and the new-foundprominence of other companies, included trading firms, large mail order firms, and 3PL corporations.
As a result, operating revenue for this business segment was ¥766.4 billion (98.1% of the previous
period.)(100 million
yen)

8,000

Operating revenue

7,752

400

7,809
7,664

7,500
255
7,000

(100 million

Operating profit yen)

228

253
200

6,500

0

300

100

,09

,10

,11

0
(fiscal year)

Logistics BusinessWe aimed to expand the logistics business by providing total logistics solutions. To do so, weformed a business tie-up with TRINET LOGISTICS CO., LTD. and fully revamped our sgx International
Courier Service service plans.
In overseas markets, SHANGHAI DAZHONG SAGAWA LOGISTICS CO., LTD. began a delivery
business in Guangzhou City, Guangdong Province, China, and SAGAWA EXPRESS VIETNAM CO., LTD.
started a metering and inspection business for apparel and sundries. We are also proceeding withthe proactive expansion of various services in Hanoi and Ho Chi Minh City, including starting the firstever delivery business by a Japanese logistics corporation. We have, however, suffered the adverse
effects of the flooding that occurred in Thailand, including water damage to warehouse facilities andhalted cargo movement due to the cessation of work at shipping corporations.
As a result, operating revenue for this business segment was ¥50.3 billion (100.6% of the previous
period.)Logistics business(100 million
yen)

700

500

Operating revenue

519(100 million

Operating profit yen)

60

500

503

15

16

,10

,11

40

31
300

0

20

,09

0
(fiscal year)

Other Businesses
In the automobile maintenance business, our business activities that emphasized the pioneering of
new clients who are expanding their transport networks over a wide area, and the maintenance of special
vehicles resulted in favorable progress.
In the real estate leasing and administration business, as initiatives toward expanding revenue
opportunities outside the group, we acquired two large logistics facilities, commenced construction on a
new plant in Kashiwa City, Chiba Prefecture, and acquired a new logistics site in Maishima, Konohana-ku,
Osaka City.
In the IT business, we established WUXI FEISU LOGISTICS INFORMATION TECHNOLOGY CO., LTD. in Yixing,
Jiangsu Province, China. It is a joint venture company engaged in the development of a logistics system foronline shopping and the construction and operation of shipping, inventory management, and other such
systems.
We also established SG Expert Co., Ltd., which provides shared services with the Group, as well as SG
Fielder Co., Ltd., a human resource outsourcing service, which began its operations already having inherited
the human resource development business division of Sagawa Advance Co., Ltd.
As a result, operating revenue for this business segment was ¥64.3 billion (101.5% of the previous
period.)Other businesses(100 million
yen)

700

Operating revenue

608

633

(100 million

Operating profit yen)

60

643

500

40

33
300

0

,09

26

,10

22

,11

20

0
(fiscal year)

SG HOLDINGS GROUP Corporate Social Responsibility Report 201209

SG Holdings Group Business Structure
and Business Summary
SG Holdings Group Business Structure
Delivery Business

Sagawa Moving
Center Co., Ltd.
Sagawa Express Co., Ltd.
World Supply Co., Ltd.

Logistics Business

Sagawa Global
Logistics Co., Ltd.

Sagawa Logistics
Partners Co., Ltd.
Local Overseas
Corporations - 17

Other Businesses

Sagawa Advance Co., Ltd.

SG Holdings Co., Ltd.

SG Motors Co., Ltd

SG Motors Kan-etsu Co., Ltd.

SG Systems Co., Ltd.

WUXI FEISU LOGISTICS INFORMATIONTECHNOLOGY CO., LTD.

Sagawa Financial Co., Ltd.
SG Realty Co., Ltd.
SG Expert Co., Ltd.
SG Fielder Co., Ltd
Nouvelle Gold Club Co., Ltd.
Sagawa Forestry Co., Ltd.

Main Domestic Companies and Business Summary
Sagawa Express
Sagawa Express, as the core company of
the SG Holdings Group, has developed ourdelivery business across a wide area, witha particular focus on delivery service. We
handle approximately five million packages
daily, delivering each individual packagewith the care our customers have cometo expect. We also coordinate with Group
companies to provide efficient total logistics
solutions.

10

SG HOLDINGS GROUP Corporate Social Responsibility Report 2012

Sagawa Moving Center
Our moving business not only provides personal
moving services, but also assists with corporate
moving as well. Similarly, our setting business supports
customers all the way through the assembly andinstallation of furniture and electronics. We have also
developed services in which we respond to a diverse
range of customer needs – such as our route delivery
business, in which we provide one-stop moving,
installation, and disassembly of devices and fixtures
used in events – to the maximum possible extent.

World Supply
We have developed a 3PL business and a
joint food delivery (Tsukiji market) businesscentered on our delivery agency services
to department stores and large boutiques.
Additionally, we provide logistic services
at all steps, from storage to shipping,
for apparel and cosmetic products, both
domestically and internationally, throughour TAPA Class-A international security
regulations-accredited centers.

Sagawa Logistics Partners
We provide total logistics support, ranging
from meter reading and inspecting to storageand logistics processing, at nine locations
throughout Japan. Through combining work insuch a way that we are able to display the fullrange of our facilities’ sorting capabilities, we areable to work with multiple owners and multipledelivery destinations using the same system.
We possess a shared platform-style businessbase and work to propose low cost operations.

SG Motors
We have 27 self-owned maintenance plants, two bodymanufacturing plants, and other cooperating plants
nationwide, and can also provide detailed maintenancesupport via our cooperating plants nationwide. We
also have services for corporations and individual users,
such as selling new and used vehicles and custom
vehicle maintenance. We are also proactively working
to reduce the environmental impact of vehicles
through efforts like developing and popularizing the
Ecobody, an eco-friendly vehicle chassis.

Sagawa Financial
Sagawa Financial has developed a varietyof businesses in the field of finance. Throughcoordination with "e-SAXIS", our informationreference service, our main powerhouse service,"e-collect", continues to boast steady growththrough utilizing its strength of enablingaccount settlement via credit and debit cards.
We will pursue service channel and quality
improvement in our goal of becoming acomprehensive logistics and finance company.

SG Expert
SG Expert was established to advance theadministrative functions of the SG Holdings Groupand make them more efficient by centralizing
general affairs, personnel affairs, accounting, and otheradministrative work in one location. We set up anenvironment in which group companies can focus
on their own work (drafting strategies, promoting
their businesses), and increase expert knowledge ofthe administrative functions to achieve personnel
education and cross-sectional liquidation.

Sagawa Global Logistics
We have developed a 3PL business and alogistics processing business that takes advantage of
information systems through connecting our many
domestic bases with bases overseas, in areas such as
China and Southeast Asia, and constructing a fromstart-to-finish international transport scheme thatutilizes a diverse array of transportation modes.
We aim to support our customers’ management
circumstances by proposing made to order one-stop
logistics that work toward reducing logistics costs.

Sagawa AdvanceIn our quest to become a comprehensive service
corporation, we provide services in a wide range offields, with main business pillars including insurance
agencies, travel, product development, and facility
supervision. Our Nursing Care Travel and Outing
Support Service, which we started as a new travelbusiness service, has received particularly highaccolades. Just as the name “Advance” implies, we
respond to all manner of customer needs.

SG Systems
We contribute to increased corporate
competitiveness not just through systemarchitecture (shipping, cargo, payment, andwarehouse management systems), but also using
our other strengths -- Biz-Navi, a commercialuse car navigation system, and our BPO business(scanning and call centers) -- as an all-in-one
logistics IT company. In fiscal 2011, we establisheda joint venture company in China in order toutilize our accumulated knowhow abroad.

SG Realty
We manage and operate the real estate of the
SG Holdings Group, pursue the efficient utilization
thereof, and conduct new development as acomprehensive real estate firm. We support ourclients business in two main ways: PM strategies,in which we examine the current state of tenantleasing and optimize daily maintenance andrepair planning, and CRE strategies, which aim to
improve real estate value on the balance sheets
as well as improve corporate value.

SG Fielder
We provide personnel outsourcing
services for clients with warehouse work,
such as logistics and manufacturing, basedon our knowhow gathered through Sagawa
Express's delivery activities. We will provide
optimal ser vices in a variety of fields
together with our vibrant on-site staff (fielders)and continue to be a valuable partner
trusted by society.

SG HOLDINGS GROUP Corporate Social Responsibility Report 201211

Local Overseas Corporations

B
C

D

18 4

7

2

E

South
Korea

3

SAGAWA SILOX SHANGHAI CO., LTD.

A

A. Guangzhou Branch
SHANGHAI POLY-SAGAWA LOGISTICS CO., LTD.
POLY-SAGAWA LOGISTICS CO., LTD.

6

C. Dalian Branch
D. Tianjin Branch
E. Qingdao Branch

8
9

SHANGHAI DAZHONG SAGAWA LOGISTICS CO., LTD.

B. Beijing Branch

5

F. Guangzhou Branch

TaiwanHawaii(America)
17

10

12

11
13

SAGAWA SILOX QINGDAO CO., LTD.

Japan

China

Thailand

2

5

3

6

TIANJIN POLY-SAGAWA INTERNATIONAL TRADING CO., LTD.

4
1

F

1

The Philippines

Vietnam

7

SAGAWA LOGISTICS KOREA CO., LTD.

8

SAGAWA EXPRESS INTERNATIONAL TAIWAN CORP.

9SAGAWA EXPRESS (H.K.) CO., LTD.

10 SAGAWA EXPRESS PHILIPPINES, INC.
11 SAGAWA GLOBAL LOGISTICS (PHILIPPINES) INC.
12 SAGAWA EXPRESS THAI CONTAINER DISTRIBUTION SERVICE CO., LTD.
13 SAGAWA EXPRESS VIETNAM CO., LTD.
14 SAGAWA GLOBAL LOGISTICS (MALAYSIA) SDN. BHD.

14 Malaysia

15 SAGAWA EXPRESS SINGAPORE PTE., LTD.

15

16 P.T. SAGAWA EXPRESS INDONESIA
17 SAGAWA EXPRESS HAWAII, INC.

Singapore

16

Indonesia

18 WUXI FEISU LOGISTICS INFORMATION TECHNOLOGY CO., LTD.

Topics Related to Local Overseas Companies
Sagawa Global Logistics

SG Systems

3PL* Business Commenced for Apparel in Vietnam

Development and Sale of Logistics Systems for Mail Order Corporations Commenced in China

SAGAWA EXPRESS VIETNAM CO., LTD. acquired alicense for metering and inspection from Vietnamese
authorities. 3PL business for apparel started on
September 1, 2011; we support the entrance ofJapanese manufacturers into Vietnam.

WUXI FEISU LOGISTICS INFORMATIONTECHNOLOGY CO., LTD., a joint venture corporation
involved in the development and sale of logistics
and mail order systems in China, commenced sales
operations in Yixing on July 2, 2011. The company
provides logistics-related IT solutions and services
to Chinese corporations as well as to Japanese
corporations advancing into the Chinese market.

* Abbreviation of "3rd party logistics" An outsourcing service
in which all aspects of a corporation's logistics functions arehandled together and contracted out.

Delivery Business Started in Guangzhou, China
SHANGHAI DAZHONG SAGAWA LOGISTICS
CO., LTD., which has been expanding its delivery
business in Shanghai since January 2003,
established a new base (the Guangzhou Branch)
in Guangzhou. This branch began delivery
business to Guangzhou and the surrounding
Foshan area on November 21, 2011.

Delivery Business Started in Hanoi and Ho Chi Minh, Vietnam
SAGAWA EXPRESS VIETNAM CO., LTD.
commenced delivery business in the capital of
Hanoi, located in the north, and the commercial
haven of Ho Chi Minh, located in the south, on
March 1, 2012. Delivery business in Vietnam will
be expanded to Da Nang in the second quarterof fiscal 2012, to be followed soon after by
expansion to other cities.

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SG HOLDINGS GROUP Corporate Social Responsibility Report 2012

Risk Management

Thai Flooding Initiatives

Sagawa Express Thai Container Distribution Service employed a variety ofmeasures to keep damage to cargo incurred due to the October 2011 flooding
to the minimum possible level.
The Company worked to obtain the latest information in advance of the flooding
and established an operational structure intended to enable customers to continue
their business, including methods such as moving cargo to higher locations. Afterthe floods receded, the employees themselves became involved cleaning efforts so
as to return to work as soon as possible, andstrove to set up systems, confirm the scopeof the disaster, and draft initial recovery plans.
As flood risks in Thailand remain high,the company is proceeding with draftinga Large Scale Flooding Evacuation Manualand strives to create an environment inwhich clients can safely store their cargo.

Special Features (1)Our calling as a standard
bearer for logistics, a vitalsocietal infrastructure
The SG Holdings Group's Initiatives in the Great East Japan
Earthquake and the Assessment and Expectations of Society
The Great East Japan Earthquake gave us the opportunity to consider the true
importance of the role logistics plays in modern society as well as how difficult
it can be to maintain its functionality during a large-scale disaster.
In this feature, we will summarize the activities that the SG Holdings Group
performed in the past year as a corporation that handles the social infrastructureof logistics, and we will introduce stakeholder opinions about these activities.
1 | Emergency Support in the Aftermath of the Great East Japan Earthquake

Transport of Rescue Supplies by Sagawa Express ………… P. 14
2 | Group Company Initiatives toward Restoration

Restart and Continued Support for Home Delivery ………… P. 16
3 | Stakeholder Views

What is Required of Sagawa Express, a Social Lifeline ……… P. 18

For one year starting on April 1, 2011,
Sagawa Express employees have carriedout their duties wearing badges reading," G a n b a r o N i p p o n ! " ( " Yo u c a n d o i t ,Japan!"), based on our motto of bringing
people happiness.

SG HOLDINGS GROUP Corporate Social Responsibility Report 201213

1 | Emergency Support in the Aftermath of the Great East Japan Earthquake

Transport of Rescue Supplies by Sagawa Express
We feel that shipping rescue supplies in times of emergency is an important responsibility of logistics as a social
infrastructure, and we transported rescue supplies in the aftermath of the earthquake together with the national
government, local authorities, and the self defense forces.

Constructing a Support System for Affected
Areas in the Aftermath of the Earthquake
After the Great East Japan Earthquake occurredon March 11, 2011, Sagawa Express immediately set
up a Disaster Measures Headquarters, and quickly
confirmed employee safety and collected information
about our bases in the affected areas.
As we were preparing these internal systems, we
received a request from the Japanese Red Cross Society,with whom we have an agreement about times ofdisaster, and early on the morning of the 12th, webegan transporting blankets and other such rescue
supplies to the affected areas.
Then on the 13th, we sent an emergency rescue teamof 100 vehicles and 200 employees from the Kanto
Branch Office based in Tokyo. Not only did we deliverrescue supplies, we also stayed there to provide support
for the distribution of supplies in the affected areas.

products, powdered milk, and hospital blankets, all ofwhich had been in short supply. We transported rescue
supplies from the Prefecture's supply storage areas tothe local authorities.
In these circumstances, Sagawa Express received
a request for support from Ishinomaki City, Miyagi
Prefecture, and took the responsibility of transporting
rescue supplies throughout the city.

Improving Conditions at Supply Storage
Areas from the Point of View of Logistics
Ishinomaki requested that we transport rice balls,
bread, and other important food products to thoseaffected. As these items have short expiration dates, theymust be sorted quickly at collection areas and shipped on
the same day.
When, however, city officials went to Ishinomaki
General Athletic Park, the city's ordinary collection area,
to pick up rescue supplies, they found that it was notpossible to manage the growing number of supplies
and or to properly grasp what items they had, howmany there were, or where they were located.
Sagawa Express gave the city and the SDF
suggestions on how to improve operations at thecollection area. We also cleared up the distinction
bet ween roles to be per for med by the cit y, theSDF, and Sagawa Express, and we unified supply
acceptance services. Then we decided on where toplace the supplies by dividing them into categories andformulated a basic system setup for a logistics bases forappropriately managing content and volume.

200 support staff from the Sagawa Express Kanto Branch Office

O rd i n a r i l y, t r u c k i n g a s s o c i a t i o n s, w a re h o u s e
associations, and other industrial groups serve as thefirst point of contact with prefectures for distribution
in times of emergency, employing a system in whichtransport requests are made to affiliated corporations.
During the Great East Japan Earthquake, however,the prefectural office itself suffered a great deal ofdamage and was caught up in a tremendous volumeof responses from all sides, and confusion arose in the
distribution of rescue supplies.
Starting on the 14th, we stationed personnel at
the M iyagi Prefecture Disaster Countermeasures
Headquarters, undertook procedures for transport as inan emergency, on-the-spot request by the Prefecture,
and worked with the SDF to transport liquids, food14

SG HOLDINGS GROUP Corporate Social Responsibility Report 2012

Appropriately managing the content and volume of supplies at thecollection area

Feature 1: Our Calling as a Standard Bearer for Logistics, a Vital Societal Infrastructure

Responding to the Ever-Changing Needs ofAffected Areas

Emergency Handling that Overcame Adversity
through Bottom-Up and Top-Down approaches

On March 19, Sagawa Express worked together with the
SDF to begin shipping rescue supplies to 210 evacuation
centers. We had received official requests from HigashiMatsushima City and Onagawa Town, both of whichborder Ishinomaki City, and we began full-scale shippingto evacuation centers including these two local authorities

In this disaster, local employees were very aware of
the rescue and reconstruction of affected areas andproactive approaches were made by local authorities,
the SDF, and ourselves. Because of the proactive
information gathering, the management had a detailed
understanding of the conditions, and utilized theinformation from the field in making timely decisions
about its further support activities.
Information and requests were accurately
communicated to the top, and they were used to makeappropriate judgments. The fact that these bottomup and top-down functions worked effectively was agreat motivating force in reconstructing distribution in
affected areas as quickly as possible.

Words of Thanks Received from Our Customers

A Sagawa Express truck transports rescue supplies amidst a difficult roadenvironment

from the 21st.
In order to ship the supplies quickly, it was necessary to
determine the most appropriate route in advance basedon the evacuation center list and the number of evacuees.
As time passed, however, increasing numbers of people
left evacuation centers and returned home or createdevacuation centers on their own, making it difficult tograsp the actual situations of evacuees. On top of that, thesupplies requested by evacuees kept changing from day
to day.
The requests we got from Ishinomaki and other places
were to transport supplies to official evacuation centers.
Based on this situation, however, Sagawa Express changed
the number of shipments each day from two to three, andused the morning shipments to collect information in thecommunity. We also decided, based on the requests we
received and the changes in evacuation conditions, todistribute to places other than official evacuation centersand gained the approval of city hall to do so. Sagawa
Express shared the information it collected with the SDF
and the city, and we played a useful role in accurately
responding to affected people' need for supplies.

We performed individual distribution for affected citizens who didn't
have enough food after returning home

Miyagi Prefecture, which suffered large-scale disaster in the Great
East Japan Earthquake, has gotten out of the period of confusionthat existed in the immediate aftermath and is slowly but surely
on the path to recovery. In this situation, the efforts Sagawa
Express made in the immediate aftermath are once again highly
appreciated, and we have received many messages of thanks.

Hiroyuki Komatsu
Crisis Management Planning Specialist
Crisis Management Division, General Affairs Department,
Miyagi Prefectural Government
Mr. Komatsu began his career at Miyagi Prefectural
Office in April 2010 after retiring from the Ground
Self Defense Forces. As the assistant managerof the Disaster Countermeasures Headquarters
Secretariat, he mainly handles requests from andcoordination with organizations in the field (SDF,
police, fire departments, and coast guard).

The Cooperation of Logistics Corporations Was
Essential in Smoothly Transporting Rescue Supplies
in the Aftermath of the Great East Japan Earthquake"

Sagawa Express's transport activities in Ishinomaki wereoriginally a volunteer undertaking. These efforts wereincredibly valuable and were also greatly appreciated by
Ishinomaki, and afterward this lead to official requests forwork. Due to the large size of the disaster, Ishinomaki was
one place in the prefecture where it was difficult to comeby detailed information, and as road conditions were quitepoor, it really helped us that Sagawa Express was going
between the evacuation areas each day to deliver supplies
and providing us with information from the field in realtime. Thank you very much for your help.
After the Great East Japan Earthquake, prefectural andmunicipal employees initially found work like collecting
and storing rescue supplies and delivering them toevacuees incredibly difficult because of a lack of knowhow.
In these difficult times, we witnessed the outstanding
activities of Sagawa Express, which worked in close concert
with the SDF, and realized that we should leave it to theprofessionals. Going forward, the full-fledged support oflogistics corporations will be essential in providing physicalsupport in times of disaster, and we are considering thissystem in our reviews of Miyagi Prefecture's disasterprevention plans.
I would like to ask for your continued support for therecovery of Miyagi Prefecture and I thank you for all thatyou have done.

"

SG HOLDINGS GROUP Corporate Social Responsibility Report 201215

2 | Group Company Initiatives toward Restoration

Restart and Continued
Support for Delivery Service
After the Great East Japan Earthquake, many corporations promptly set out to provide emergency support toaffected areas, and recovery efforts remain ongoing.
The SG Holdings Group also continues to support restoration through a variety of initiatives.

Sagawa Express's initiatives

Successively Restarting Delivery Services,
Starting with Branch Pickup Service
Sagawa Express has 27 businesses offices in the threeprefectures of Iwate, Miyagi, and Fukushima, and we
suffered great damages in the earthquake, including
the full destruction of four of these business offices anddamage to 66 vehicles. In the immediate aftermath we had
no choice but to suspend our Delivery Service to Hokkaido
and the six prefectures of Tohoku.
While there were a multitude of obstacles we had
to overcome to restart our Delivery Service, including
a fragmented road network and a shortage of fuel fortrucks, at the same we heard the compelling voices of ourcustomers, crying "We want to send these packages to ourrelatives in the affected areas." Therefore, Sagawa Express
determined that it was important to restart services as soon
as possible, and so we decided to restart our Branch Pickup
Service, where customers come to the branch to receive
their packages. Starting March 17, we began collecting
packages from around the country to be delivered to theaffected areas.

messages such as "My package arrived at my parents' placesafely. Thank you." This reminded us that delivery service
isn't just about delivering goods, but about expressing thefeelings wrapped up with them.
After restarting the Branch Pickup Service, we strove torestart ordinary services as quickly as possible, and about
two weeks after the quake, we were largely able to bringour Delivery Service back to normal.

Recovery/Employment Policies
Preferentially Employing Victims
Sagawa Express provides support for recovery from theperspective of employment as well. We employed 100
people from Ishinomaki City and the surrounding areas
to assist with managing work and sorting rescue supplies
from July to December 2011.
The SG Holdings Group as a whole has also used
employment facilitation procedures to give victims
preference in employment, thus engaging in measures topromote restoration.

Words of Thanks Received from Our Customers
We received posters with words of thanks.
On December 9, 2011, Suntory Wellness Limited senta poster with words of thanks from its customers to
Sagawa Express's Tohoku Branch Office. Suntory Wellness
is a corporation involved in the manufacturing anddevelopment of health products, and they received over
400 letters from customers in affected areas thanking
them for quickly restarting the shipping of supplements
and other products. They praised Sagawa Express's
contributions as significant and sent us a poster createdusing those various words of thanks.

Each package also contained the sender's hopes that it would arrive in
the affected area.

There was a great response to our Delivery Service being
restarted, and on the first day we received 40,000 packages
at our national distribution center, with 110,000 following
the day after. In many cases, shippers wrote messages suchas "I hope it arrives quickly!" and "Hang in there!" We also
received many thankful emails and telephone calls, with

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SG HOLDINGS GROUP Corporate Social Responsibility Report 2012

Feature 1: Our Calling as a Standard Bearer for Logistics, a Vital Societal Infrastructure

Holding Workplace Experience Classes for
Elementary Students in Affected Areas
On November 9, 2011, in the Iwate Office, Sagawa
Express held a workplace experience class for thirty-seven
5th year students from Ofunato-Kita Elementary Schoolin Ofunato City. We held a facility tour and activities suchas a cargo stowage game to teach about logistics workand other activities, with a Sagawa Express staff member
who had assisted in restoration efforts after the Great East
Japan Earthquake explaining the situation at that time. The
students gained an increased understand of the calling
and responsibilities of logistics.

we provided play equipment made at our factories (suchas electric carts and shooting games). At each location wevisited, many children and their families came to play.

Mobile Children's SG Land at Higashi-Matsushima City Community CenterS a g a wa Adva nce ' s Ini t i a t i ve s

Holding Volunteer Bus Tours to Spread
Support for Restoration

Students learning about the roles of trucks

SG Motors's Initiatives

Proactively Supporting Affected Areas throughTruck Donations and Movable Theme Parks
SG Motors, which handles vehicle maintenance andsales, heard from the affected areas that small trucks
can enter narrow spaces and would be outstanding forwork such as clearing debris. Therefore, in June 2011 we
donated 5 trucks to Kesennuma City in Miyagi Prefecture, 3
trucks to Kamaishi City in Iwate Prefecture, and 2 trucks to
Otsuchi Town in Iwate Prefecture, making for a total of 10
dump-style trucks.

Sagawa Advance, which handles the insurance, travel,and product development businesses, hosted four
restoration support volunteer bus tours in fiscal 2011.
Affected areas need help from a large number ofvolunteers, yet at the same time, there are many people
who want to volunteer but don't know how. To makeit easy for ordinary people like those to volunteer, wecreated a two-day, three-night tour service that combined
restoration support through tourism and lodging with one
day of volunteer activities.
Rikuzentakata Disaster Volunteer Center in Iwate
Prefecture served as the host for volunteer activities, andparticipants assisted in carrying our packages, cleaning up
muck in people's residences, and getting rid of debris.

Bus tour participants assist in volunteer activities
We donated small trucks suitable for work in affected areas

We also set up Children's SG Land Mobile to givechildren in affected areas a place to play. In this initiative,

SG HOLDINGS GROUP Corporate Social Responsibility Report 201217

3 | Stakeholder Views

What is Required of
Sagawa Express, a
Social Lifeline
Yuji Yano,
Professor, Ryutsu Keizai University School of Logistics Information

In February 2012, Sagawa Express held stakeholder dialogs on the topic of “attitudes and liaisons expected of Sagawa Express
as a type of social infrastructure,” and we received valuable opinions from experts as well as national and local officials throughfocusing on the activities of Sagawa Express and the logistics industry in the Great East Japan Earthquake. See P. 37 for information
on stakeholder dialogues.
We asked Yuji Yano, Professor at Ryutsu Keizai University, who served as the coordinator for these stakeholder dialogs, about his
assessments of the areas he covered -- logistics as a whole and Sagawa Express’s activities – and his expectations in the future.

A s s e s s me n t o f E a r th q ua ke Ha n dlin g(1)Under National Direction, Everything Through Arterial Transport Functioned Appropriately
The Great East Japan Earthquake brought to attention thefact that our lives, urban activities, and industrial activities are
incredibly dependent on logistics. It also made administrative
functions such as the national, prefectural, and municipal
governments acutely aware of how large a role of private
corporations play in ensuring that logistics functions smoothly.
Recently, Japan has seen large earthquakes, including theHanshin-Awaji Earthquake and the Chuetsu-Oki Earthquake, andemergency supplies are procured and shipped mainly at theprefectural level, but in this earthquake, things proceeded in aslightly different way than usual. This was because of the sheer scopeof the damage. As the prefectural government itself had suffered
great damage and was in disarray, the Cabinet's Emergency andDisaster Countermeasures Headquarters quickly stepped in, with
the national government serving as the main agent for shipping
supplies. As a result, supplies arrived at prefectural collection areassafely, but the problems started from there, and there were delays intransport to municipalities and evacuation areas.

Private logistics corporations started by shoring up the systems at the collection areas.

18

SG HOLDINGS GROUP Corporate Social Responsibility Report 2012

The national government kept sending supplies, but they
didn’t reach the evacuation centers. An investigation of the cause
revealed that supplies had gotten bogged down in the prefecturalcollection areas, and the government had to turn to private logistics
corporations for widespread cooperation.
As s es s m ent of E arthquak e Handling (2)Private Sector Knowhow Needed for Logistics in Complex Situations
It is thought that public entities mainly handle transportof emergency supplies when there is a large-scale disaster.
In reality, however, prefectures and municipalities can havetrouble adopting a logistics-esque thought processes, and if
the separation and management of supplies is not performed
appropriately, it can bog things down.
Thanks to the outstanding efforts of private logistics
corporations, supplies began to be distributed to municipal
collection areas smoothly. The efforts of Sagawa Express andother delivery corporations played a particularly large partin bringing them through last-mile transport to evacuation
facilities, natural evacuation sites, and the personal residencesof those who failed to evacuate.
The conditions at evacuation facilities and points of refugechanged daily, as did the items that were necessary. The reason
we were able to respond quickly and thoroughly amidst these
difficult conditions was because of delivery corporations
working and closely with local community going to transport
supplies every day.
At the request of Ishinomaki City, Sagawa Express took the
responsibility of last mile transport, and ended up played
an important role in terms of transmitting information, suchas communicating the conditions and needs of victims to
the government. Some things cannot be done in normal
circumstances, much less during emergencies, but since
Sagawa Express was always aware of itself as a member ofthe community, we can say that Sagawa's efforts to learn thedesires of their recipients helped to do so.

Feature 1: Our Calling as a Standard Bearer for Logistics, a Vital Societal Infrastructure

Service may have resumed in the limited form of the Branch
Pickup Service, but the choice to starting sending goods addressed
to individuals as soon as possible was a courageous one.
Expectations Going Forward (1)We Must Further Enhance the National-Private Relationship to Prepare for Disasters

Delivery corporations didn’t just deliver supplies, they also acted as good
listeners.

Assessment of Earthquake Handling (3)Branch Pickup Service, Responding to the Needs of Many Customers
No matter how much you prepare, you can't anticipate
everything; this is part and parcel of handling a disaster. In
that regard, the way Sagawa Express restarted the Branch
Pickup Service so quickly made me feel the inner strength of acorporation that is able to respond flexibly as the circumstancesdemand.
Immediately after the earthquake, there was a desperateneed for food. At that time, however, the support infrastructure
was just starting to come together, and when it became
possible to acquire the bare minimum of food, it was quite
natural to feel the need for supplements, something which I
personally use each day. It is also natural for people living far
away to want to send goods filled with their thoughts andprayers to their friends and loved ones in the affected areas.

The national government is proceeding with drafting newdisaster prevention plans. This is not only because the Great
East Japan Earthquake occurred but also because there havediscussions about the possibility of an earthquake occurring
directly beneath the Tokyo metropolitan area. The proactive
utilization of the assets and knowhow of private logistics
corporations is about to make a huge leap forward.
The recent earthquake made clear how important logistics
is and taught us that specialized knowhow is necessary forlogistics to function appropriately. Private logistics corporations
have not only facilities and knowhow, but also a strong
awareness of disaster response, and there is no reason not tomake use of these advantages.
One aspect often mentioned in terms of future expectations
for logistics is preparing for disasters in which large damages
can be expected, such as in an earthquake occurring directly
beneath the Tokyo metropolitan area. If a large earthquake wereto occur in this highly populated metropolitan area, demand
for supplies would balloon up. It is necessary to proceed withexaminations into what extent private corporations would be
able to function under such circumstances.
Expectations Going Forward (2)Verifying Experiences with Society as a Whole and Preparing for the Future
I feel that Sagawa Express’s efforts in the recent earthquake werepraiseworthy. Discussing and verifying what Sagawa can and cannot
do in times of emergency is an important exercise for the future.
Up until this point, the CSR Report has more or less focusedon the environment, safety, compliance, and other such topics,
but choosing to resolutely continue with business in times ofdisaster is a prime example of social responsibility. Fulfilling this
responsibility and properly communicating it to society will
improve the corporation’s social reputation, raise employee
morale, attract outstanding human resources, and further lead tothe positive cycle of being a corporation with high value.

Branch Pickup Service started with a temporary reception desk

Regarding Social Reputation and Expectations

Utilizing Disaster Experience and Fulfilling a Higher Level Social Responsibility
We have heard society's feedback and expectations and realized anew how great a responsibility to society
logistics really has.
Also, our experiences in the Great East Japan Earthquake have made crystal clear to all of us, down to eachindividual driver, that logistics is a social lifeline. A climate has begun to emerge where we can independently
consider what kinds of unique social contributions and services we can provide. In the affected areas, recovery is still
just beginning, but from here on, we will use these experiences as we continue to consider the social responsibility
that we, as a logistics corporation, should fulfill.

SG HOLDINGS GROUP Corporate Social Responsibility Report 201219

Special
Features (2)Wakuwaku Women's Project
Aiming to Promote Female Employee Achievements and Diversity

The SG Holdings Group aims for a system in which women bear 30% of the responsibility of theGroup’s businesses and promotes diversity as a Group-wide initiative.

In 2011, SG Holdings started the Wakuwaku Women’s
Project with the goal of advancing the achievements offemale employees and promoting a work-life balance.
A preparatory committee comprised of 10 female
members started meeting in May of the same year, andthrough multiple investigatory meetings to select theissues and implement the measures, they came up with
the Four Pillars for Promoting Female Achievements. Asof March 2012, there are personnel for this project at
Four pillars to promote female achievement
drafted by the Wakuwaku Women's Project

Expanding female
employment andincreasing retention

Cultivating, promoting,and deploying female
employees

Promoting a work-lifebalance

Corporate culture
revolution and awarenessreformeach Group company, and the project has expanded
laterally across the Group.
Also, a new diversity committee has been establishedcentered on executives. This committee decides
on overall policies, considers the various measures
proposed by the project and works to expand thescope of work in which women are able to achieve,
reexamines regulations for creating a work/familybalance, and provides career support.

Number of female Sagawa Express
employees by job type

Changes in number of female
SG Holdings Group employees(people)16,000

Other:
0.4%

14,212 14,913(No. of female employees)

Sales:
37.5%

12,072 12,699

12,000

Sales Drivers,

Administrative: service center staff, etc.
62.1%
Customer service,
sales, head/branch
office staff, etc.

8,533

8,765

2006

2007

8,000

4,000

0

(Total full time and non-full time employees)

2008

2009

2010

2011 (fiscal year)

VOICE

As the first female chief manager at Sagawa Express, I would like to forge a path ahead for female employees after me.
Yukiko Onishi Chief Manager, Yatsushiro Office, Sagawa Express
As the first female chief manager, I feel that I must
actively think about creating a workplace environment
where it is easy for women to work for the female
employees after me.
On the other hand, what work needs to be done is thesame regardless of your gender, so rather than thinking

20

about female compassion, I will think about what I must
do as a person, and be conscious of being considerate ofothers when doing my work.
Going forward, I will work cheerfully toward the future
in order to make the Yatsushiro Office even better.

Q

Ease of working at Sagawa Express and issues going forward

Q

Expectations for the Wakuwaku Women’s ProjectA

The number of female employees is growing, and systems
which allow women to achieve are being established.
However, I still feel that improvements to the labor
environment are necessary to support women when they
return to work after marriage and childbirth and to increase
the number of women aiming for managerial positions.

A

Working conditions for female employees are different depending onwhether they work in the office vs. out in the field, or in head/branch
offices vs. business offices. I think that the field of business offices
can show us many issues related to building an environment where
women can thrive, so I'm hoping for an increase in opportunities totake the opinions of women in the field into account.

SG HOLDINGS GROUP Corporate Social Responsibility Report 2012

More Places where Women Can Find Success as Women
Here we would like to introduce a dialog about the meaning of the project and forward-looking targets with Kobayashi, Director of the Personnel
Department, and Hyodo, who is Sub Chief of the Personnel Department’s Diversity Promotion Unit and also a member of the project.
Kobayashi: Sagawa Express originally grew with a focus on
handling cargo between corporate clients, but in the past
few years has been making efforts in handling cargo forhome delivery as well. Some customers who live alone
may feel safer receiving packages from a female delivery
person, and opportunities for women to achieve in theworkplace are steadily increasing.
When we say that women bear 30% of the responsibilityof the Group’s business, it sounds like an issue of quantity,
but it’s more about quality. The world is now calling forfemale achievements. Using the female perspective inservices and planning, women achieving great things ina variety of workplaces around the group -- if these twoconcepts don’t function properly, it will be difficult tobring about profitability.
Hyodo: Even our customer feedback shows that requests for femaledelivery people are increasing. Analyzing past data also shows cases
where the number of complaints decreased when service centerswhich had been based around men came to be based around
women.
Kobayashi: Group companies have previously tried a varietyof efforts to utilize the strengths of women. Until now,
however, they have been “women’s achievements from themale perspective.” What is fundamentally different with thisproject is that we created a project team of women andfirst had them paint a picture of “women’s achievementsfrom the female perspective.” The Personnel Department
will monitor these deliberations and direct the team inutilizing its strengths in systematizing the ideas that comefrom them to realize them.
Hyodo: Their past work experiences have given project members
ideas about what issues have to be solved for womento achieve, so the first task was selecting such issues
and considering how to clear them up from a women’s
perspective.
For example, there were a lot of opinions expressed aboutmaintaining a balance between work and child rearing, suchas “We should have this kind of system,” or “It’s not aboutsystems; it's about having the understanding of those aroundus.” Of course, the minimum systems required by law are alreadyin place; we are talking about expanding the existing systems
into something greater. It is also important that we make thosesystems known.
We have already proposed expanding the child andnursing care systems, and right now we are concernedwith decreasing working hours and improving thepercentage of people who take paid leave. Of course,
in order for women to make achievements at work

it is critical to strike a balance with family and childraising, and it is very important to create a workplaceenvironment where it is easy for women to continue
working.
Kobayashi: This initiative allowed me to see firsthand how
important creating a workplace environment truly is. No
matter how much those around women talking about“creating a place for women to achieve,” this is difficult if
there isn’t an environment where it is truly easy for women
to work and where they can really shine. Down the road,the number of female managers is going to increase, andI want to aim for a system where we could have a femalepresident at a Group company. First, however, we must
create an environment in which women are able to aspireto such positions.
When you think about it, this all comes from the idea of “So thatwomen can achieve,” but I have realized that we must consider
the work-life balance for all employees, regardless of gender.
The project team also brought up this same opinion. The ideaof simply reducing working hours for women only is in someways discriminatory.
Another idea from the project team which surprised me
was, although at first I felt that men have to change, theproject team believes that there is a need for both men
and women to change their awareness.
Hyodo: Until now, female employees themselves have neverlooked to aspire for managerial positions or seriously
considered their career visions. There’s something strange
about that. The project team’s opinion is that women, justlike men, should pursue opportunities to achieve. And weshouldn't do this by becoming like men, but by making ita reality while still holding tight to what makes us women,
and utilize our own talents to contribute to the company.

SG Holdings
SG Holdings
Sub Chief, Diversity Promotion Unit, Personnel General Manager, Personnel Department,
Department,

Miho Hyodo

Yasuo Kobayashi

SG HOLDINGS GROUP Corporate Social Responsibility Report 201221

Safety
Initiatives
We promote activities that aim for safe driving, including
improving safety awareness through events such as driving
contests and having employees acquire knowledge andtechniques related to driving. We also strive to improvesafety through tie-ups with local communities, such as byholding Sagawa Express Traffic Safety Classes.

Employee Feelings toward Safety

We Want to Be a Safe Driving
Model for Professional Drivers
Ryo Igarashi, Sales Section, Echigo-Yoshida Office, Sagawa Express
Sales driver who entered his third year with the company in April 2012.
The 19th Sagawa Express Driver Contest Overall Individual Winner

Activities in Fiscal 2011
Wi t h e l i m i n a t i n g m a j o r a c c i d e n t s i nvo l v i n gpedestrians on walkways as our highest priority issue, we
implemented the following three important measures.

(1) Advocating for Safe, EnvironmentallyFriendly Driving
We worked toward the following targets in fiscal
2011: 101% or more fuel efficiency compared to fiscal
2010 and a soft acceleration rate of 80%. Gentle starting
and acceleration have not only improved fuel efficiency
but also led to a decrease in the number of accidents.

(2) Effective Utilization of Driving Recorders
to Prevent Accidents Before they Occur
Driving instruction was performed with a focus on
SD Instructors (driving instructors) giving instructions
on board. We also assess the driving of all our drivers byeffectively utilizing the 6,300 driving recorders installed
and using their numerical data in instruction.

(3) Improving Driving Manners
We performed a full analysis of all opinions andconcerns about driving manners and ethics thatwere submitted by customers via our website. We
are using these ideas in our driver safety training andethics training as we also strive to improve the Sagawa
Express brand image, prevent vehicle accidents before
they occur, and improve driving manners.
As a result, the number of customer online
submissions on driving manners and ethics has
decreased to 82.1% compared to a year earlier.

Targets Going Forward
Aiming to Cultivate True Professional Drivers
As the industry leader, we are aware that ensuring safety
in transportation is of the utmost importance. With our firm
belief that we must not cause any accidents foremost in
our minds, we aim to cultivate professional drivers who are
well-versed in safe driving. In fiscal 2012, we will continue
to work toward three important policies: promoting safe,
environmentally friendly driving, effectively utilizing driving
recorders, and improving driving manners.

22

SG HOLDINGS GROUP Corporate Social Responsibility Report 2012

I was able to win the 2011 Sagawa Express
Driver Contest, but now that I look back on it after
returning to my everyday duties, I don't see it as
being about winning or losing so much as about
the great significance of improving my knowledge
and techniques through the studying and practicingthat I did to prepare, and of raising my safe driving
awareness together with my colleagues.
This experience was also an opportunity for me
to remind myself of the importance of safety for
professional drivers. Causing an accident does not
only affect the victims, but also many others, including
the customers who trusted you with their cargo, thecompany, your coworkers, and your family. Safety ismade a priority so that these kinds of incidents do nothappen.
In the course of our everyday work, we must not
drive recklessly, no matter how busy we are. Instead,
we must make efforts to win back time in otherareas, such as loading the vehicles.
We would also like to continue contributing
to community safety by participating in various
initiatives such as
traffic safety classes forcommunity children.
Going forward, we aim
to be professional drivers
who serve as models forsafe driving.
Tire pressure checks, one item
in regular inspections

As a corporation which deals in logistics, we prioritize safety above all else in our activities. | Safety Initiatives |CLOSE UPThe 19th Sagawa Express Driver Contest Held
Safety Initiatives

On May 27 and 28, 2011, Sagawa Express held the 19th
Sagawa Express Driver Contest at the Ayase Training
Center's Automobile Training Course in Kanagawa
Prefecture.
This event, which is held every year with the goalof preventing traffic accidents and improving driving
manners, marked its 19th anniversary in fiscal 2011.
Fifty-nine drivers selected from around the country
struggled to get the highest marks out of a possible

1,000 using their polished driving techniques andenvironmental awareness in three areas: the academic
competition (400 points), the driving competition (400points) and the inspection competition (200 points).
Sagawa Express will continue to position safety as its
highest priority, work to cultivate professional drivers,
and raise the safety awareness of all our employees aspart if its responsibility as a corporation that uses publicroads to do business.

Academic Competition
This competition judges
knowledge of traffic regulations
necessary for safe driving, vehicle
structure, and Sagawa Express's
safety and environmental
initiatives.

Attempting to answer 100 questions in 60 minutes

A w i d e r a n g e o f k n ow l e d g e i s re q u i re d i n t h eacademic competition

Driving an S-curve course

Confirming safety through safety call-outs

Engine oil inspection

Coolant inspection

Driving Competition
This competition has thedriver run through a set course
within a limited amount of time,with the on-board judge judging
the driver on safety call-outs,
driving posture, respect for traffic
regulations, safety confirmation,and other such categories.

Inspection Competition
This competition judges
whether the locations andcontent to be inspected basedon regular inspection standards
are done properly within alimited amount of time, and also
judges the status of inspection,
including whether or not pre-set
defects are discovered.

Life Saving Course Held Simultaneously
A life saving course was held after the competition concluded. In the wake of the Great East
Japan Earthquake, this course was held with the goal of acquiring life-saving skills for times ofdisaster or crisis, and participants received practical instruction in CPR and AED use from the
Ayase City Fire Department.
Life Saving Course

SG HOLDINGS GROUP Corporate Social Responsibility Report 201223

Aiming to Achieve a Safe Society
We would like to introduce some of our fiscal 2011 safety initiatives.

Improving Safety through Licensing Systems
We employ the Sagawa Licensing System, which uses

■New driver training flowchart

instructor accreditation, in the aim of training drivers who

Periodic accompaniment

do not cause accidents. The safety license types include
Testers. From among the employees who are well-versed

SD Instructor
follow-up period

in their work and have passed the appropriate test, these

1 month of accompanied instructionlevels of knowledge, technique, and instruction capability

SD solo driving authorization training

as Upper Class SD Instructors. These instructors help
training. The Safe Driving Testers, on the other hand, play

6 months of accompanied instruction
3 months of accompanied instruction

licenses recognize those who display particularly highcultivate new employees through one-on-one on the job

12 months of accompanied instruction (continuous riding test)

SD Instructor
instruction period

the important role of judging whether a new employee

Single driving test
Accompanied instruction

is ready to stand on their own. Upper Class Safe Driving

Accompanied instruction start test

Testers are managers and veterans who are recognized as

Basic safe driving training

possessing not only specialized knowledge and technique

Basic new employee training

but also outstanding judgment. We strive to enhance

Testing held by safe driving testers

Upper Class SD* Instructors and Upper Class Safe Driving

Joining the company

our cultivation of human resources by separating the
instruction and judging functions in this way.
As of March 20, 2012, we have recognized 8,597 SD
Instructors (of these, 3,869 Upper Class SD Instructors) and
2,381 Safe Driving Testers (of these, 349 Upper Class Safe
Driving Testers).

Upper Class SD Instructor
accreditation certificate

Upper Class Safe Driving
Tester accreditation certificate* SD: Sales Driver

Training by an Upper Class SD Instructor

SAS Screenings

24

In fiscal 2007, Sagawa Express began screening

specific testing at specialized medical facilities. Drivers

drivers in order to prevent traffic accidents caused bywho have been diagnosed as requiring medical carehealth issues such as sleep apnea syndrome (SAS).

undergo periodic follow-ups, such as at daily call-outs

To date, 10,482 drivers have undergone such testing.

or through interviews with managers. We will continue

Drivers who have been diagnosed through theseto periodically run these screenings for all of our drivers

screenings as possibly having SAS undergo morein the future.

SG HOLDINGS GROUP Corporate Social Responsibility Report 2012

As a corporation which deals in logistics, we prioritize safety above all else in our activities. | Safety Initiatives |The 5th Forklift Driving Technique Contest Held
have cultivated during their everyday work: the academic

5th Forklift Driving Technique Contest at Nichiyu Onsite

competition (200 points), the driving competition (600Training Center in Saitama Prefecture with the goal ofpoints), and the inspection competition (200 points).

Safety Initiatives

In October 2011, Sagawa Global Logistics held theestablishing a safe, secure labor environment by improving
driving/inspection techniques and strengthening
compliance.
We position safety as the highest priority responsibilityof a corporation involved in the logistics business, andwe have held the Forklift Driving Technique contest
every year since 2007 in order to increase the safety andenvironmental awareness of all our employees.
In this contest, 26 forklift operators selected from aroundthe country, including from Sagawa Logistics Partners,
compete for a total of 1,000 points in three competitions
that test the driving techniques and safety awareness theyContest participants had a high level of safety awareness and fully
displayed their acquired techniques and knowledge

Preventing Traffic Accidents through Drive Recorders
We have introduced drive recorders (devices that record
safe driving) in order to obtain an objective grasp of ourdrivers' driving characteristics and to give safety directions
effectively. Drive recorders give point assessments on fivedifferent items -- breaking, stopping, handling, left/rightturning, and smoothness -- thereby making the driver's daily
actions and issues clear. By making it possible for the driver to
aim to achieve a high score, they increase awareness of safe
driving. Furthermore, since these devices are equipped with ahazard map functionality, which sounds an alarm and records
video when the vehicle passes through one of the areas predesignated on the map, they also work to prevent traffic

A safety promotion worker uses the diagnostic results to give appropriate
advice.

accidents before they occur.
Drive recorders are installed on 6,300 vehicles as of

Effectively Utilizing Near-Miss Experiences in Safety Education

March 2012, and the diagnostic results are also shared

In preventing accidents, it is essential to share near-missexperiences encountered while driving amongst many
drivers. Not only do we broadcast the dangerous videos
recorded by drive recorders at business offices, we also usethem as materials at safety-related discussions and training
sessions, thereby using them to help prevent accidents before
they occur.

with the head and branch offices, leading to improved
awareness of safe driving across Sagawa Express as a whole.

Driving diagnostic results are written
so as to be easy to understand andare utilized in driver instruction.

Video of an example near-missNear-miss video on a dr ive
recorderSG HOLDINGS GROUP Corporate Social Responsibility Report 201225

Advocating for Safe, Environmentally-Friendly Driving
Sagawa Express promotes safe, environmentallyfriendly driving where sudden starts, acceleration, andstops are avoided. The entire company is involved inthese efforts. Through setting an upper limit on thenumber of engine rotations when starting the engine
and while running, and through improved driving
techniques related to the timing of shifting gears, weboth show consideration for safety and the environment
and keep fuel consumption down. This can also lead tofinancial benefits. We also conduct technical training
for administrators and leaders in order to thoroughly
promote safe, environmentally-friendly driving.
In fiscal 2011, we held two training sessions on safe,
environmentally-friendly driving with a total of 61
participants.
The Seven Articles of Safe, Environmentally-Friendly Driving
We have decided upon and written in employee
booklets the Seven Articles of Safe, EnvironmentallyFriendly Driving, which are particularly important items
in carrying out such driving. We also provide education
to thoroughly instill these articles into our employees
via our Seven Ar ticles of Safe, EnvironmentallyFriendly Driving Implementation Video Manual.

(1) P ractice e-Start soft acceleration.
(2) S hift up earlier rather than later.
(3) D rive at a stable speed in line with traffic
conditions.
(4) E nsure sufficient space between vehicles.
(5) U tilize the engine break by stopping acceleration early.
(6) W hen parking, remove the key and turn the engine off.
(7) P erform daily inspections, maintenance, andpressure management.

Safe, environmentally-friendly training session

Improving Fuel Efficiency and Keeping Accidents
Down by Introducing Soft Acceleration Diagnostics
In fiscal 2011, we set a targetof having 80% practice what werefer to as "soft acceleration," theidea of gently starting up andgently accelerating. We useddriving recorders to manage its
implementation. As a result, in fiscal
2011 we achieved the improvementof a 10% increase in soft accelerationcompared to before this initiative
began, and a 1.25% improvement infuel efficiency compared to a year Posters on safe, environmentally friendly driving
promotion management are displayed internally.
earlier.
Also, the act of gently pressing down on the accelerator gives drivers peaceof mind (for example, helping them leave an appropriate amount of space
between vehicles), making it possible for them to perform safety checks withcertainty, resulting in the prevention of accidents.

The 33rd Sagawa Express Arterial Transport Safety Patrol
In the aim of improving safety in arterial transportation,
Sagawa Express has conducted Sagawa Express Arterial
Transport Safety Patrols every year since 1994. This initiative isto prevent traffic accidents and incidents before they occur
by reaffirming what drivers know and enhancing vehicle
inspections through intermediate roll calls.
On September 9 and 10, 2011, we did safety call-outs
to drivers engaged in maintenance inspections andarterial transportation for 2,958 vehicles, mainly in service
areas and parking areas along major expressways.
Upon request, we also inspected freight vehicles
other than those of Sagawa Express in areas under thesupervision of Central Nippon Expressway Company
Limited.

26

SG HOLDINGS GROUP Corporate Social Responsibility Report 2012

Staff guide trucks during a safety inspection

As a corporation which deals in logistics, we prioritize safety above all else in our activities. | Safety Initiatives |Sagawa Express Traffic Safety Classes: Protecting Children's Smiles
Safety Initiatives

Our Sagawa Express Traffic Safety classes began fromour desire to protect children -- our future -- from tragic
accidents. In these traffic classes, which are aimed atnursery school and young elementary school students, we
instruct participants in basic traffic rules, such as how tocross the street and the meanings of stoplights and signs,
and also have them actually ride in trucks to experience
what a blind spot is.
In fiscal 2011, we held 963 classes nationwide, and a
total of 118,523 children participated. We have received
messages from the children as well, and not only did wefeel happy, we also felt the importance of safety-related
responsibilities. Going forward, all employees will further
increase their awareness of traffic safety and will work
thoroughly to advance safe driving so that accidents do
not occur.

Actual experience programs are held on subjects such as how to cross the street.

VOICE

Very Happy thatChildren Participate with
Smiling Faces
Mitsuyo Kojima,
Safety Promotion Section, Sendai Minami
Office, Sagawa Express

Employees participate in traffic safety classes by taking the lead as teachers

We use traffic safety classes to connect with children, and wehave a strong desire that they will not become victims of accidents.
Therefore, it is vital to be sure to communicate to them a respect forlife, and we would like to continue teaching not only traffic rules but
also about respecting life in easy to understand terms. As a Group in
the position of promoting safety, in our work we strive as hard as we
can to ensure that no one will become a perpetrator or a victim.

The Ministry of Land, Infrastructure, Transport and Tourism Highly Rates Our Transport Safety Management
The Ministry of Land, Infrastructure, Transport andTourism made its fourth transport safety management
assessment in September 2011. We received high marksin this assessment, including "(1) Top management
proactively fulfilling its obligations, including holding
Sagawa Express official communication and undertaking
driver surveys" and "(2) Enhancing and strengthening
initiatives for responding to major accidents, such as
holding response training at small stores and drafting
protocol for responding to the issues covered therein."
We are aiming to continue to improve safety awarenesscompany-wide and will promote initiatives for doing so.

More detailed information about our safety initiatives
is available on our website.

The Transport Safety Management Assessment conducted by the Ministry ofLand, Infrastructure, Transport and Tourism in fiscal 2011

http://www.sg-hldgs.co.jp/english/csr/report/

SG HOLDINGS GROUP Corporate Social Responsibility Report 201227

Environmental
Initiatives
We must make serious strides in reducing gas emissions
as a corporate entity centered on logistics operations. We
proactively promote activities aimed at preventing global
warming, such as promoting efficient transport and safe,
ecological driving, and efficiently using natural resources.
We are also involved in continued efforts toward preserving
biological diversity and regenerating undeveloped
woodlands as headlined by our Takao 100-Year Forest
Project.

Employee Feelings for the Environment

We would like to contribute to improving
our corporate value by increasing theenvironmental awareness of our employees.
Shigenori Shiba, Assistant Manager, Environment Promotion
Section, General Affairs Department, Head Office, Sagawa Express

In charge of planning, proposing, and implementing environmental
actions, including events using J-VER. We are involved in efforts to further
improve our environmental value.

Activities in Fiscal 2011
Comprehensive environmental measureslead to reductions in CO2 emissions(1) We were the first transport/logistics corporategroup to receive the offset credits introducedby the Ministry of the Environment. We began acarbon neutral certification test program as a model
program using these credits.
(2) In fiscal 2011, Sagawa Express emitted approximately
400,000 tons of CO2. Even as the number of delivery
packages we handled increased by 8.8%, ourcomprehensive environmental measures showed
their strength, with overall CO2 emissions dropping
3.5% year-on-year.
(3) SG Motors acquired Eco Action 21 accreditation at
14 business offices, a first for the Group.
We aim to have the remaining 13 locations acquire
accreditation in fiscal 2012.

Targets Going Forward
Aiming to expand our environmental
preservation activities to society as awhole.
Of course we will continue environmental measures
within our main business going forward as well, andwe will also collaborate with stakeholders involved with
the SG Holdings Group, starting with Sagawa Express,
and promote environmental preservation activities
and activities toward living in harmony with nature
to society as a whole. In doing so, we will continue
to undertake activities toward reducing our total CO2
emissions by 6% from the fiscal 2002 level, as 2012 is
the final year of the WWF Climate Savers Program.

28

SG HOLDINGS GROUP Corporate Social Responsibility Report 2012

In 2011, the commemorative International Year ofForests, our forests were able to receive official recognition
under the J-VER system as a resource that absorbs
greenhouse gases. Most of all, we feel that this firstrecognition for the transport and logistics industries was ahighly meaningful event.
We also feel that our receiving the Minister of theEnvironment Award in the 21st Global Environment
Awards was because Sagawa Express's environmental
activities, including but not limited to forest preservation,
were highly praised by the community. Bolstered by ourreceipt of this award, we desire to further promote ourcorporate activities that give consideration to the global
environment and contribute to improving corporate value.
For corporations that are steadily and continuously
engaged in environmental actions, it is incredibly
impor tant to improve employee motivation anddecide how easy it is to participate in and emphasizewith corporate activities. In that respect, owing to theincreasing trend for our employees to independently
involve themselves in such activities, it is clear that weplace importance on having environmental awarenessspread internally. In terms of external activities, we haveheld exchange events with the local community as well
as forest experience learning and rice farming events forchildren. In the future, wewould like to continue
proactively implementing
environmental activities
that people can enjoy
par ticipating in, suchas by increasing theopportunities available
at Takao 100-Year Forest,
which is conveniently
located approximately Experiencing thinning throughone hour outside central natural experience learning at Takao
100-Year Forest together with children
Tokyo.

We promote environmental preservation activities in cooperation with local communities. | Environmental Initiatives |CLOSE UP

Sagawa Forestry Acquires Accreditation for Offset Credit J-VER*,
Introduced by the Ministry of the Environment

Sagawa's Forest, a forest managed by Sagawa Forestry in
Kochi and Tokushima Prefectures, was officially recognizedby the Ministry of the Environment's J-VER Accreditation
Committee as a resource for absorbing greenhouse gases,
and acquired 5,612t-CO2 offset credits. This makes the
SG Holdings Group the first transport/logistics corporategroup to be recognized as a resource for absorbing
greenhouse gases or reducing emissions and to receive
offset credits.
* J-VER is an offset credit system introduced by the Ministry of theEnvironment. These credits refer to those issued through the amountreduced or absorbed by autonomous greenhouse gas emissions
reduction/absorption projects.

Exhibitions in Environmental Events

As part of our educational activities to improve
environmental awareness, we held exhibits in Eco Life Fair
2011, held in June 2011, and in December of the same year
in Eco Products 2011, the nation's largest environmental
exhibition. Visitors experienced craft making using thinned
wood from the Takao 100-Year Forest in order to feel closer
to forests.
Further, at Eco Products 2011, the CO2 generated fromelectricity used at our booth during the event was offset
utilizing offset credits J-VER) held by Kochi Prefecture andSagawa Forestry.
Environmental Initiatives

Data on Sagawa's Forest
in the Shikoku region
SG Holdings total
685.35ha
Acreage owned by Sagawa Forestry: 572.35ha
Acreage owned by Sagawa Express: 113.00ha(Forested land administered by Sagawa Forestry)Name(ha=hectare)

Total area

Administrative
association(1)

Tosa Yamada Forest

178.62ha

Kami Forestry Association(2)

Oreai Forest

54.69haKubokawa-cho
Forestry Association(3)

Kainan Forest

311.64ha

Kaifu Forestry Association(4)

Kaminaka Forest

58.96haKito Forestry Association(5)

Nanokawa Forest

22.54ha

Niyodogawa Forestry
Association(6)

Sukumo Forest

8.82haSukumo City Forestry
Association(7)

Miyoshi Forest

50.08haMiyoshi Seibu
Forestry Association

Participating in the Ministry of the Environment’s
Carbon Neutral Certification Test Program

Sagawa Express was accepted into the Carbon Neutral
Certification Test Program promoted by the Ministry of theEnvironment, and commenced model programs at threeservice centers (located in the Tokyo, Kyoto, and Hakata
areas) starting on March 21, 2012.
At these three locations, efforts are made to reduce theamount of CO2 emissions through restricting the use oftrucks and other transport vehicles, with the remaining
CO 2 emissions covered by the Group’s carbon offsets(J-VER). We aim to acquire carbon neutral certification by
May 2013.

The booth Sagawa Express exhibited at Eco Products 2011

Sagawa Express received the Minister of the Environment
Award in the 21st Global Environment Awards*
In the 21st Global Environment Awards, sponsored by the
Fuji Sankei Group, Sagawa Express's "continued development ofmultifaceted approaches to reducing gas emissions" was recognized
and we received the Minister of the Environment Award.
Measures for preventing global warming in the business field
included the introduction of natural gas trucks (the highest number
worldwide), and utilization of services centers that reduce theamount of truck transport. Further, the committee greatly praised
our efforts, such as the maintenance of company-owned forests,
preservation activities, and the implementation of employee-wide
environmental action.
* The Global Environment Awards were established in 1992 as a recognition
system for the industrial world that aims for harmony between industrial
development and the global environment.

Concept of carbon neutral initiatives

Reduce CO2 emissions
by limiting vehicle usage

Neutralization(zero emission)

CO2 emissions before
implementation

CO2 emissions after
implementation

Offset the remainderusing J-VER credits

Toshiaki Tsujio, President of Sagawa Express, receives the award fromthe Vice-Minister of the Environment (left).

SG HOLDINGS GROUP Corporate Social Responsibility Report 201229

Toward the Earth's Future:
Beautiful Skies and Green Landscapes
We would like to introduce some of our fiscal 2011 environmental initiatives.

Intra-Facility Transport Initiatives
The increase in large scale multi-purpose facilities in urban
areas has been accompanied by many large issues coming
to the forefront – not just transport efficiency, but also theestablishment of measures to decrease environmental
footprints and improve security. Sagawa Express and World
Supply have set example initiatives in Tokyo Midtown(Tokyo), JR Hakata City (Fukuoka), and Shinshizuoka cenova(Shizuoka) as model cases for developing services aimed at
establishing intra-facility logistics systems.
These services mitigate vehicle-based traffic congestionin surrounding areas that originates from inside the facilities,
and also make decreases in CO2 emissions possible. They

also strengthen security by preventing suspicious persons
and objects from entering the facilities by comprehensively
managing the people, goods, vehicles, and information
therein. Furthermore, they contribute to decreasing theupkeep and maintenance costs for these facilities throughprotecting the walls and floors from damage by designing
detailed logistics leads.
Construction of these large scale multi-purpose facilities
in urban areas will continue, and we would like to provide
services that leverage our knowhow in establishing intrafacility transportation services and that contribute to
decreasing the environmental burden.

Tokyo Midtown* Example * A large multi-purpose facility comprised of offices, commercial facilities, residences, and hotels.
Since Tokyo Midtown first opened, facility logistics operations have been consigned to Sagawa Express.
Tokyo Midtown is said to handle a similar amount of packages as a logistics base would, with over 1 million
items handled annually and over 250,000 distribution vehicles. Having started operations in 2007, it is now
approaching its 4th year, and there have been positive evaluations from tenants about its convenience.
Tokyo Midtown’s facility logistics systems continue to evolve, with logistics center personnel decreasing
25% in number and average vehicle stopping time dropping from 17-18 minutes to 14 minutes sinceservices started. We have seen results in terms of decreasing our environmental footprint through thesmooth facilitation of transport.

JR Hakata City* Example * A large multi-purpose facility containing department stores, approximately 230 boutiques, and cultural facilities.
Sagawa Express has been consigned with facility logistics operations for JR Hakata City, which opened March 3, 2011, and has been
involved in project planning and opinion exchange since the beginning of the project. We efficiently operate intra-facility logistics
through controlling lead tracks for people, goods, and vehicles within the facility. We have operated a logistics center for shipped
goods therein since before it was opened.
By temporarily aggregating all goods sent from across the country into the Sagawa Express logistics base for JR Hakata City, we
have eliminated the need for trucks from a variety of transportation companies to ride into the facility, thereby greatly decreasing
the number of delivery trucks (from 100/day to a concentrated 25/day) and have also shortened waiting time. This contributes to adecrease in environmental burdens around the JR Hakata Station area and to the mitigation of traffic congestion in surrounding areas.

Shin Shizuoka Cenova* Example * A multi-purpose commercial facility directly connected with Shizuoka Railway’s Shin Shizuoka Station.
Facility transportation work in Shinshizuoka cenova, which opened on October 5, 2011, has been consigned toWorld Supply, which has mainly developed delivery agency businesses for department stores and large boutiques.
World Supply receives all goods delivered to Cenova from delivery firms and sends them to each tenant via its
facility logistics system, thereby smoothly managing information related to facility shipping. Additionally, because
the process is managed from the delivery vehicle to entrance into the facility, vehicles are no longer left waiting,and services are operated with consideration toward reducing the environmental burden on the surrounding
areas and improving security. Cargo shipping from tenants within the building is first handled by World Supply,
displaying group synergy by liaising with Sagawa Express’s Shizuoka Office.

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SG HOLDINGS GROUP Corporate Social Responsibility Report 2012

We promote environmental preservation activities in cooperation with local communities. | Environmental Initiatives |Utilizing Service Centers
Sagawa Express has established Service Centers whichcollect and distribute packages using not trucks but rather
manpower, such as push carts and three-wheeled delivery

In cases where there is no service center
Business offices

Collection and A
deliveryCollection andB
deliveryCollection and C
deliveryUsing carts to collect packages within a small area allows us to develop
our services in step with local communities.

Environmental Initiatives

cycles. We also contribute to reducing CO2 emissions aswell as the emission of air pollutants such as Nox*1 andPM*2 by minimizing the number of such delivery vehicles.
Additionally, developing services that work closely withlocal communities leads to secondary benefits, such as
improving customer service, reducing parking costs inurban areas where there is a lot of traffic, and mitigating
traffic congestion.
Further, we have set up shop in easily accessible officeareas of major cities so that even those who do not havea driver’s license can utilize their skills to the fullest, and indoing so we have a number of female employees who areable to efficiently carry out their work.
As of March 2012, we have 397 ser vice centers
located mainly in urban areas throughout the country,
contributing to a reduction of approximately 1,670
vehicles. Going forward, we will continue to expand these
service centers, as they are transport bases that are kind topeople, the earth, and the community.

Collecting and delivering packages through man-powered methods suchas three-wheeled delivery cycles also means that we can decrease ourenvironmental footprint and mitigate traffic congestion.
*1 NOx refers to nitrous oxide.
*2 PM refers to particulate matter.

In cases where there is a service center
Business offices

Collection and A
deliveryService
centerCollection and B
deliveryCollection and C
deliveryFl o w c h a r t fo r s e r v i c e c e n t e r s w h i c h a l l o w t r a n s p o r t w i t h n oenvironmental burden

Gion Sagawa Express, a service base which values traditional Kyoto hospitality
We opened Gion Service Center and Gion Sagawa Express in Gion. Gion isa microcosm for the wonders of Kyoto, the place where Sagawa Express wasestablished.
As it is a business base with strong roots in the community, the original work
clothes used were made to resemble those of rickshaw drivers. Our three-wheeled
delivery cycles and carts also employ a design that evokes the scenery of Gion.
Staff also undergo training that covers the principles of hospitality that are uniqueto Japan in terms of comportment and language use, making this a base thatboth functions as a standard service center and can serve as a base for distributing
information to visitors to Gion.

SG HOLDINGS GROUP Corporate Social Responsibility Report 201231

Introducing Natural Gas Trucks
Natural gas trucks are, as the name suggests, trucks thatrun on natural gas (a.k.a. urban gas). Compared with diesel,
gasoline, and LPG-fueled vehicles, natural gas vehicles
have low CO2 and NOx emissions, do not emit PM, and are
currently gaining traction as the cleanest freight vehicles
in the trucking field. As of March 2012, Sagawa Express has
introduced a running total of 4,293 such trucks.
Additionally, the number of natural gas vehicles
owned by Sagawa Express was recognized as thehighest number in the truck ing industr y by the
Corporate and Organizational Natural Gas Vehicle
Ownership Sur vey conducted in July 2011 by theInternational Natural Gas Vehicle Association.

The nature and properties of emission gas(comparison between diesel vehicles and natural gas trucks)
Comparison of CO2 emissions
Setting diesel vehicle emission volume as 100.
(According to a March 2007 study by the Japan Gas Association)

Diesel trucks

100

Natural gas trucks

78
Decrease CO2 by 22%* Calculated CO2 emissions by running 101 trucks of two to four tons
in weight (average 2.7t) for 6 months.

Comparison of vehicle NOx and PM emissions
PM regulatory value(g/km)

0.18

New short term regulations(starting in 2003)

0.027

New long term regulations(starting in 2005)

0.01
0.00

Post-new long term regulations (starting in 2010)

0

0.5

0.7

2.0

3.5 3.8

Natural gas trucks

NOx
regulatoryvalue(g/km)Natural gas trucks

Acquiring Eco Action 21* Accreditation
As part of our medium term business plan, SG Motors
aimed to achieve Eco Action 21 accreditation, and 14 corebusiness offices out of our 25 business offices and 2 bodyplants nationwide received accreditation in fiscal 2011.
We will strive to attain the trust and satisfaction of
local communities, the industry, and our customers byengaging in environmental management systems basedon Eco Action 21. We will also systematically proceed withenvironmental activities such as green purchasing andlocal cleanup efforts.
In acquiring this accreditation, we strove to acquire
credentials for auditing personnel at each business office
and appointed a total of 40 professionals. We also set
forth a new environmental policy; drafted pocket cards
with information on our environmental policy, direction,

and activities and handed them out to our employees;
heightened employee awareness across the company; andare involved in autonomous and proactive environmental
activities.
We aim to have the remaining 13 locations acquire
accreditation in fiscal 2012.
* Eco Action 21 is a set of guidelines drafted by the Ministry of theEnvironment which set forth methods for all corporations to create
mechanisms for environmental initiatives, engage in, continually improveupon, and publicize the results of those initiatives, so that environmental
initiatives can be carried out effectively and efficiently.
The Eco Action 21 certification and registration system is a system for
judging, certifying, and registering corporations involved in initiatives
based on the Eco Action 21 guidelines.

We Will Continue to Enhance Our Environmental Initiatives to Serve as a Model for the Group

VOICE

Tomonori Waki Sub Chief General Affairs Section, Administration Department, SG Motors
Acquiring Eco Action 21 accreditation was just the first effortof the group. We will continue further with these efforts evenafter accreditation, enhancing them and acting autonomously
and proactively to serve as a model for the group.
Concrete activities include measures to reduce ourenvironmental footprint, like proactively decreasing waste

32

SG HOLDINGS GROUP Corporate Social Responsibility Report 2012produced and water and electricity used, and as well as
continually performing volunteer cleanups through tie-ups
with other corporations in order to communicate with local
communities. We increase employee awareness about theenvironment through these activities, and I myself feel suchactions are worth taking.

We promote environmental preservation activities in cooperation with local communities. | Environmental Initiatives |Activities toward Living in Harmony with Nature
In addition to reducing our environmental footprint, the SG Holdings Group also treats living in harmony withnature as an important topic and is proactively involved in activities to protect biological diversity.
Holding Hands-on Nature (Rice Planting) Classes

The SG Holdings Group owns a total of approximately 735
hectares of forests in Kochi and Tokushima Prefectures in
Shikoku as well is in the Takao area of Hachioji City, Tokyo.
Sagawa's Forest (approx. 685 hectares) in Shikoku acquired
J-VER offset credits (see P. 29) through the appropriate forest
management of Sagawa Forestry. With the Takao 100-Year
Forest project covering approximately 50 hectares of forest in
the Takao area of Hachioji City, we are involved in initiatives
to regenerate undeveloped woodland with the cooperationof NPOs, volunteers, and members of the community. We
also hold hands-on forestry classes in which people canexperience nature and research related to forest preservation
firsthand.

Since 2007 we have been implementing Hands-on Nature (Rice
Planting) classes in Moriyama City, Shiga Prefecture, with the goalof having children learn about the blessings of nature and theimportance of food. A running total of 380 Group employees, theirfamilies, and local residents have participated to date, experiencing
traditional rice growing, including weeding an irrigated rice paddy
of approximately 3,000m2, planting rice, harvesting, and drying.
We will continue holding these and other such hands-on natureclasses so that children will be aware of what it means to live inharmony with nature.
We also give support to Shiga Prefecture's "Sakana-no Yurikago"(Fish Cradle) project in which juvenile nigoro buna fish are raised inirrigated rice paddies and then set free in Lake Biwa.

(Above) Appropriate forest management is practiced in Sagawa's
Forest in Shikoku.
(Below) Hands-on forestry class, Takao 100-Year Forest(Above) Rice planting(Below) Harvesting

Environmental Initiatives

Activities toward Preserving Forests

SG Holdings Group Environmental Activities
Since fiscal 2003, we have set, established, andimplemented participatory environmental actions with thegoal of having all Group employees proactively participate
in activities that help preserve the environment. These
actions take place each year so that not only employees
can participate, but also so that these activities broaden

More detailed information about our environmental
initiatives is available on our website.

in scope to include families and local communities. In
fiscal 2011, in addition to our summer and winter energy
saving movements, we also held activities such as theEnvironmental Picture Diary Contest. Held for the fourth
time in 2011, this environmental education activity
involves both employees and their families.

http://www.sg-hldgs.co.jp/english/csr/report/

SG HOLDINGS GROUP Corporate Social Responsibility Report 201233

Relationship with
the Community
The SG Holdings Group has developed a wide array ofbusiness activities based on the corporate brand that
we have cultivated through our trusting relationships
with our customers since the time Sagawa Express wasfounded. A trusting relationship with our stakeholders
is essential to being a corporate Group that is chosen
in a diversifying social environment. Going forward,
we will continue to engage in management that gives
consideration to our stakeholders in order to earn theirtrust.

Employee Feelings toward Social Contribution

I take pride in our ability to continue
engaging in social contribution activities in
the midst of the diﬃcult Japanese economy.
Misa Shimizu, CSR/Risk Management Unit, General Affairs
Department, SG Holdings

Ms. Shimizu works at the CSR/Risk Management Unit, where she provides
support for the activities of our four foundations and is involved in public
relations activities for Group companies.

Activities in Fiscal 2011
Reaﬃrming our Social Responsibility andPromoting Stakeholder Management
through Support for Affected Areas(1) In addition to reaffirming the role and social
re s p o n s i b i l i t y we h ave a s a t y p e o f s o c i a linfrastructure through activities to support therestoration and revitalization of the affected areas,
we created new issues for management to tackle as
this year has given us a chance to learn from society.
(2) We promoted female achievements and thework-life balance to begin creating a workplaceenvironment in which each employee can takepride in their work and fulfill their potential.

In fiscal 2011, I lent a hand as a staff member with
the Sagawa Foundation for the Promotion of Cancer
Research's lectures for the public and the Sagawa
Foreign Students' Scholarship Foundation selection
certificate award ceremony and exchange event.
In fact, before being transferred to this division, I
had worked in a service center, and at that time I waslargely unaware of the activities of our foundations.
At the service center, I had my hands full with thecustomers in front of me, so I had very little interest inthem.
In the General Affairs Department, however, I was

Targets Going Forward
Enhancing CSR through the Stakeholder
Management BaseFirst of all, we are aware that as a type of logistics
infrastructure, it is our responsibility to continue ouractivities for the recovery of areas affected by the Great
East Japan Earthquake through our main businessthis year as well. Further, we will strive to promote
the Wakuwaku Women's Project and the work-lifebalance as well as reforming our employment andworkplace environment. We will also work to promotea harmonious existence with our stakeholders who
support the Group. In addition, we will promote CSR
activities in order to grow into a useful group that can
respond to a management that shares its values and tochanges in society and the environment.

put in charge of these tasks, and I became aware thatpart of the profit we generated from working hard in
the field is given back to society as a whole throughthe activities of these foundations. Though people saythat Japan is in a period of economic stagnation, I am
moved by the marvelous fact that, as part of our social
contributions, we have continued providing support
to international students and those involved in cancer
research all this time.
I learned that the foundations' activities, basedon our corporate philosophy of working for thedevelopment of the community, have had a strong,proven history since long before I became involved,
and I take pride in the fact that I am able to work in
a department directly connected to the SG HoldingsGroup's social contribution activities.

34

SG HOLDINGS GROUP Corporate Social Responsibility Report 2012

We aim to become a trusted corporate group through interpersonal communication. | Relationship with the Community |CLOSE UP

Activities by Four Foundations

In order to remain a corporation that can contribute to society, the SG Holdings Group uses foundation activities asa conduit to repay the debt it owes to the community through a variety of activities, such as living in harmony with thecommunity, international exchange, and academic and artistic support.
Sagawa Foreign Students’ Scholarship Public Interest Foundation

Sawaga International Economic Cooperation Foundation

Supporting the 16 Fiscal 2011 (26th Group) ScholarshipStudents' First Step toward Their Dreams

Donating Used Trucks to Various Countries at No
Cost and Cultivating Vehicle Maintenance Technician
Students

We accepted as scholarship students 16 students(9 undergraduate, 7 graduate) carefully screened fromamong the 113 self-funded students from southeast Asia
recommended by the presidents of national, public, andprivate universities throughout the country.
In association with this, we held the 2011 Sagawa
Scholarship Students
Acceptance Cer tificate
Pre s e n t a t i o n C e re m o n y
and Exchange Event from
November 25 - 27. Thesestudents engaged in
exchange with the guests,
the previous year's 25thgroup of recipients, andFoundation and SG Holdings
2011 Sagawa Scholarship Students
Group staff.
Acceptance Certificate Presentation
Ceremony and Exchange Event

The Sagawa I nternational Economic Cooperation
Foundation was established to carry out stable, continued
international support activities that came out of theopportunity to donate used Sagawa Express trucks. In fiscal
2011, we donated two vehicles to Laos, making for a total of
3,300 no-cost donations ofvehicles since 1985.
We a l s o h o l d s t u d e n t
training programs for vehicle
maintenance technicians,
and in 2011, we accepted
six students from China andfive students from Laos.
Up through fiscal 2011, we
have trained a total of 126
students from China and 10 Fiscal 2011 Vehicle MaintenanceTechnician Training
students from Laos.

Sagawa Art Museum Public Interest Foundation

What we can do to reduce the number of people
suffering from cancer.

The joy of connecting with culture and art whilesurrounded by nature, overlooking Lake Biwa

In fiscal 2011, there were a total of 183 applications for Sagawa Cancer Research
Support from research facilities across Japan, and, following a strict judging
process by the selection committee, a total of 14 research projects were eachawarded 1 million yen in research cost support (14 million yen total). Among thesewas a project by Motoyuki Otsuka, an
Assistant Professor of Gastroenterology
at the University of Tokyo Hospital.
Further, each year the Sagawa
Foundation for Promotion of Cancer
Research holds cancer lectures for the
public in which we invite doctors who
are active on the front lines to lecture
the public on the latest informationin cancer prevention, diagnosis, andtreatment in an easy to understand2011 Sagawa Cancer Research
fashion.
Support Award Ceremony

Sagawa Art Museum, which was established in order to promote anddevelop culture and the arts, has permanent exhibitions of the works of Ikuo
Hirayama, a painter of traditional Japanese paintings; the sculptor Churyo
Sato; and the potter Kichizaemon Raku. In fiscal 2011, we held scheduled
exhibitions on Giobanni Segantini,
marking the first time his work wasdisplayed in Japan in 33 years, andon the 150th anniversary of thedeath of Kuniyoshi Utagawa. We
welcomed 124,000 guests in total.
I n our quest to become amuseum that is open to thecommunity, we are also involvedin educational activities such as
museum concerts and workshops
Sagawa Art Museum's Art
with a focus on children's programs. Appreciation ClassI take pride in what I studied in Japan, and would like to communicate this wonderful experience to the people of Malaysia.

Relationship with the Community

Sagawa Cancer Research Promotion Public Interest Foundation

VOICE

Teo Siew Ying 26th group scholarship student
I was selected as a scholarship student while in my third year at Osaka

research so as not to waste the opportunity that the Foundation has given me.

Sangyo University, and it made it possible for me to pursue further education

I have met many people as a scholarship student, and everything I haveat Kobe University Graduate School. When I was selected again in graduate

learned through these exchanges has been valuable. When I return to Malaysia,

school, I was so happy that I almost cried. Never in my dreams did I think I

I would like to keep both what I learned in Japan and the wonderful culture I

would be selected again. I would like to throw myself into my studies andlearned here close at heart and communicate them to many people there.

SG HOLDINGS GROUP Corporate Social Responsibility Report 201235

Valuing Human Connections toward an
Abundant Society
We would like to introduce some of our fiscal 2011 initiatives toward living in harmony with society.

New Services Leading to Improved Customer Convenience
Sagawa Express strives to attain an accurate grasp market trends and customer needs while being proactively
involved in developing new products and services that lead to improved customer convenience.
Established the Private P.O. Boxes, Hikyaku MyBox, in Ginza

Starting Shipping Reception Services from Home Delivery Boxes

Sagawa Express predicts an increase in demand for private
P.O. boxes in conjunction with the expansion of the EC
business, As such, on September 21, 2011, we launched the
Hikyaku MyBox, the industry's first private P.O. box, in Ginza,
Tokyo.
With this service, private P.O. boxes are set up in Sagawa
Express service centers and can be used as a place forcustomers (corporate and private sector) to receive products.
This service is not only holding onto goods; it can also be
used as a logistics base for shipping products that alreadyhave arrived to a different location. It also takes advantage ofSagawa Express transport
services like Hikyaku Cool
Express and e - collect tomake it possible to ship
chilled products, (refrigerated
or froze n ) , which is no t
possible with existing P.O.
b o x e s , a n d t o u s e CO D
services.

On February 4, 2012, Sagawa Express began home delivery
shipping reception services using home delivery boxes
installed in apartment buildings and other such facilities.
The customer writes the place of delivery and othernecessary information on a special shipping ticket andsimply places it in the home delivery box installed in theirapartment building. (There is no need to contact Sagawa
Express.) Our sales drivers will come to collect the packages
at a set time every day. This service allows customers to send
their packages when it isconvenient for them without
having to make a trip to oneof our stores.

We will continue to successively start
services in major cities throughout Japan.

The service has been well received
as it makes shipping easy.

The Heat Stroke Prevention Call-Out Project, held with the cooperation of mail order companies
Sagawa Express endorses the Heat Stroke Prevention

We feel that these proactive call-outs do not justCall-Out Project (main office: Japan Environment

prevent heat stroke, but also lead to the improvement

Consor tium), a movement in which governmentof communication, one of the goals of this project, andorganizations such as the Ministry of the Environment

contribute to the wide popularization of elegant Japaneseand local public organizations work together with private

habits.

organizations such as corporations and NPOs to call out forheat stroke prevention. We participated in these call-outs
from August 1, 2011 to September 30, 2011.
In this initiative, we attach Heat Stroke Prevention CallOut Project stickers to the packages of shippers (mail ordercompanies) who consent to the project and, when Sagawa
Express sales drivers deliver products with those stickers,
they tell the recipient, "Please be careful of heat stroke."36

SG HOLDINGS GROUP Corporate Social Responsibility Report 2012

Sales drivers made call-outs
during delivery.

We aim to become a trusted corporate group through interpersonal communication. | Relationship with the Community |Social Contributions through Sports Classes and Other Activities
In 2010, we started giving Scientific Athlete Training
requests from high schools, we send out athletes who

Ryo Yamamoto of the Sagawa Express Track and Field Club was selected torepresent Japan in the men's marathon portion of the London Olympics.

work on the front lines as lecturers and have them give

Ryo Yamamoto of the Sagawa Express Track and Field

Courses at Ritsumeikan Moriyama High School. Based onpractical instruction on training methods.
On top of this, we also promote community exchange
activities through our official sports clubs, such as byholding sports classes for local children.

Club (a member of the Kyoto Track and Field Association)
was selected to represent
Japan in the men's
marathon portion of the
3 0 t h O l y m p i c G a m e s,held July 2012 in London,
England.

Mr. Yamamoto (left) and CoachNakano (right) hold a press conference
upon Mr. Yamamoto's selection.

Holding Stakeholder Dialogs
In fiscal 2004, we began to hold yearly Sagawa
Stakeholder Dialogs in order to understand what roles
society expects Sagawa Express to play as a logistics
corporation, what contributions we can make in ourbusiness activities, and whether we are meeting therequests of our stakeholders.
We held the Sagawa Stakeholder Dialogs for fiscal 2011

Summary:
The 8th Sagawa Stakeholder Dialogs
Theme: The attitudes and tie-ups required of Sagawa Express
as a type of social infrastructureDate: Thursday, February 9, 2012
Location: Conference room, Sagawa Express Co., Ltd. Tokyo Head OfficeContent: Keynote address, discussion

Relationship with the Community

on the topic of "the attitudes and tie-ups required of
Sagawa Express as a type of social infrastructure" in light ofour recovery and restoration support activities related to the

Stakeholder Opinions (Abridged)

unprecedented disaster of the Great East Japan Earthquake.

Logistics, which we take for granted, broke down in the Great East

These dialogs gave us valuable opinions and proposals

Japan Earthquake, prompting many to recognize its importanceabout the social infrastructure of logistics. Sagawa Express,
in light of how we responded to this disaster as a logistics
corporation, feels that we cannot delay preparations foronce again. Such a situation made clear how important it is toutilize private resources in areas where national and local authorities
cannot provide adequate support, especially in the transportationand distribution of emergency supplies. Sagawa Express's initiatives

large disasters that are expected in the future, and that wein this aspect were met with incredibly high praise.

would like to fulfill our role as a type of social infrastructure.

In the future, delivering supplies over the last mile and the face-toface aspect of logistics will continue to increase in importance notjust in times of emergency but in ordinary times as well. In particular,
it will also be necessary to hold discussions on the treatment of theelderly and what society should be like going forward.
We were reminded of how delivery corporations play a pivotal
role in society. It will be necessary to further promote deliberationon the roles of logistics corporations as a type of local and social
infrastructure in the future as well.

The 8th Sagawa Stakeholder Dialogs

More detailed information about our relationshipwith the community is available on our website.

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SG HOLDINGS GROUP Corporate Social Responsibility Report 201237

Please contact us below if you have any questions regarding this report

CSR Staff
68 Tsunoda-cho, Kamitoba, Minami-ku, Kyoto, 601-8104 Japan

TEL: +81-75-671-8600
http://www.sg-hldgs.co.jp/english/csr/report
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