SG HOLDINGS GROUP Corporate Social Responsibility Report 2013

CSR Report 2013

Communication Through Websites

Corporate Social Responsibility Report

SG Holdings Group uses various means of communication, including websites, to relay information to our stakeholders,regarding CSR activities, information from other companies, and business activities.

SG Holdings Group Business URL

CSR (Corporate Social Responsibility)
http://www.sg-hldgs.co.jp/csr/

Financial Results
http://www.sg-hldgs.co.jp/company/
financial_results.html■ SG Fielder Co., Ltd.
http://www.sg-fielder.co.jp/■ SG Moving Co., Ltd.
http://www.sagawa-mov.co.jp/■ Nouvelle Golf Club Co., Ltd.
http://www.nouvelle-gc.co.jp/■ World Supply Co., Ltd.

■ Sagawa Forestry Co., Ltd.
http://www.sg-hldgs.co.jp/sagawa-fore/

http://www.world-supply.co.jp/■ Sagawa Global Logistics Co., Ltd.
http://www.sagawa-logi.com/

SG Holdings Corporate Website
http://www.sg-hldgs.co.jp

Sagawa Express Official Application■ Sagawa Express Co., Ltd.
http://www.sagawa-exp.co.jp/■ SGH Global Japan Co., Ltd.
http://www.sgh-globalj.com/■ Sagawa Advance Co., Ltd.
http://sg-advance.co.jp/■ SG Motors Co., Ltd.
http://www.sg-motors.co.jp/■ SG Systems Co., Ltd.
http://www.sg-systems.co.jp/■ Sagawa Financial Co., Ltd.
http://www.sg-financial.co.jp/■ SG Realty Co., Ltd.
http://www.sg-realty.co.jp

68 Tsunoda-cho, Kamitoba, Minami-ku, Kyoto, Japan
601-8104
Phone: +81-75-671-8600
http://www.sg-hldgs.co.jp
Title - CSR Report 2013
Issue date - June 2013
Next issue planned for - June 2014 printing
Printed by - Sagawa Printing Co., Ltd.

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

2

SG HOLDINGS GROUP Corporate Social Responsibility Report 2013

Handling logistics infrastructure andcontinuing to meet social expectations
Contents
4

Business Outline

SG Holdings Group: Connecting People, Society, and the Future
6
9

Message from the Chairman and President
Special Issue 1

Continue functioning as a logistics group that our customers can trust, by bringing together the thoughts andabilities of each individual
15

Special Issue 2

Ways SG Holdings Group can contribute to the creation of an eco-friendly city
19

Special Issue 3

Striving to provide service that meets the needs of our customers and a changing society
22

Support activities for areas affected by the Great East Japan Earthquake

23

SG Holdings Group's CSR and ISO26000

24Management27

Safety30

Environment

33

Society35

SG Holdings Group
Third party opinions regarding "CSR Report 2013"

Editing Policy
The SG Holdings Group CSR Report has been published in two separate versions: a printed
version (important topics) and an online version (a detailed report). The fiscal 2013 printed
version is a medium geared towards general consumers, while the online version is a medium
geared towards specialists who are researching the environment and CSR.
Feature articles of the printed version include the opinions and backgrounds of our employees,
in order to broadly introduce a range of activities to general consumers in an easy-to-understandformat. Other activities are included in summary format, with only the main topics covered.
The online version includes all activity-related information, including numeric data. Each activity is basedon and classified by the seven core subjects of ISO26000, providing guidelines for international standards.
We have also referred to the Ministry of Environment's Environmental Reporting Guidelines
2007 and Sustainability Reporting Guidelines (Volume 3).

Onlinehttp://www.sg-hldgs.co.jp/csr/
Period Subject to Reporting
March 21, 2012 - March 20, 2013
* When reporting periods differ, we will clarify as needed.

Organizations Subject to Reporting
SG Holdings Group Companies and Business Summary* Business initiatives by the entire group are referred to as SG Holdings Group initiatives.
Activities related exclusively to specific companies and organizations are clarified as needed.

3

Business Outline

SG Holdings Group: Connecting People, Society, and the Future
Company Outline
SG Holdings Co., Ltd. is a pure holding company of SG Holdings Group,
which possesses management strategies and administration functions for the entire group.
Each company is specified by its business affairs and duties.
Name:

SG HOLDINGS CO., LTD.

Established:

March 21, 2006

Business content:Group management strategies, administration, and related business

Location:

68 Tsunoda-cho, Kamitoba, Minami-ku, Kyoto, Japan

Chairman and President:
Capital:●❻Eiichi Kuriwada●


11,882,905,000 JPY

Main Domestic Companies❶ Sagawa Express

A

Providing total logistics solutions for a wide range of delivery activities,
with a particular focus on express delivery.

●❹●❺❷ SG Moving
Offers various installation and moving related services.

❸ World Supply
Offers delivery agency services, 3PL, and cooperative food delivery service to department stores, etc.

❹ Sagawa Global Logistics
Optimizes all aspects of the supply chain through 3PL business, the logistics process, etc.

❺ Sagawa Logistics Partners
Offers total logistics support, ranging from inspection for foreign matterand product defects and inspecting to storage and logistics processing.

❻ SGH Global Japan
Offers various international transport related services, from international
logistics and shipping storage to domestic transport.

●❼ Sagawa Advance
Offers general services from an insurance agency business and travel business to a retail business.

❽ SG Motors
Offers various services including a vehicle maintenance support service,
new and used car sales business, etc.

❾ SG Systems
An all-in-one logistics IT company offering various development andoperation activities, including a package tracking system.

 Sagawa Financial
Offers a variety of financial services, including the "e-collect" COD service.

 SG Realty
Manages real estate held by SG Holdings Group.

 SG Assetmax
Manages real estate investment operations, with a particular focus on SG Holdings Group logistics facilities. (As of June 2013, preparing to begin operations.)

 SG Expert
Brings together SG Holdings Group management businesses, such as
general affairs, human resources, and accounting.

 SG Fielder
Offers outsourcing of personnel for warehouse-related business.

 Nouvelle Golf ClubManages a golf course in Oamishirasato, Chiba that respects and is inharmony with nature.
CSR Activities

A [Super Rail Cargo] A railroad system that transports goods between Tokyo and Osaka, featuring low CO2 emissions.
B [Sagawa Express Traffic Safety Classes] Provide traffic safety-related information to children.
SG Holdings Group is involved in various other CSR activities as well.

4

SG HOLDINGS GROUP Corporate Social Responsibility Report 2013●❶

Group Business Data

International Group Companies

No. of employees (consolidated) / No. of vehicles owned (Sagawa Express)

Operating profit / Ordinary profit / Operating revenue■ No. of employees (consolidated)■ Operating profit ■ Ordinary profit■ No. of vehicles owned (Sagawa Express)

80,00060,00070,34970,89870,628

8,943
300

303
268

200

26,86926,77925,965

100

2010

2011

2012 (FY)(100 millions of yen)0(No./Vehicle)

9,000

400

40,00020,000Operating revenue

8,811
295
264

8,713
310
286

8,000
7,000
6,000

0

5,000
2010

2011

2012 (FY)

SG Holdings Global Pte. Ltd.
Tianjin Poly-Sagawa International Trading Co., Ltd.
Shanghai Poly-Sagawa Logistics Co., Ltd.
Poly-Sagawa Logistics Co., Ltd.
Shanghai Dazhong Sagawa Logistics Co., Ltd.
Sagawa Silox Shanghai Co., Ltd.
Sagawa Silox Qingdao Co., Ltd.
Wuxi Feisu Logistics Information Technology Co., Ltd.
Sagawa Express (H.K.) Co., Ltd.
Sagawa Express International Taiwan Corp.
Sagawa Logistics Korea Co., Ltd.
Sagawa Express Philippines, Inc.
Sagawa Global Logistics (Philippines) Inc.
Sagawa Express (Thailand) Co., Ltd.

Sagawa Express Thai Container Distribution Service Co., Ltd.
Sagawa Express Vietnam Co., Ltd.
Sagawa Global Logistics (Malaysia) Sdn. Bhd.
Sagawa Customs Brokerage (Malaysia) Sdn. Bhd.
Sagawa Express Singapore Pte. Ltd.
Ameroid Logistics (S) Pte. Ltd.
Amgas Asia Pte. Ltd.
Pt. Sagawa Express Indonesia
Sagawa Express Hawaii, Inc.
Affiliated Companies Sindhu Cargo Services Pte. Ltd
Sunlog Services Pte. Ltd
Two other companies

❼
●
●


 ●
●


●
❶
B

❽
●

❸
●

❾
●
❷
●


●

5

Message from Chairman and President

Creating logistical innovations by pursuinggroup synergy.
Eiichi Kuriwada
Chairman and President
SG Holdings Co., Ltd.

6

SG HOLDINGS GROUP Corporate Social Responsibility Report 2013

| Message from Chairman and President |Two years have passed since the Great East Japan Earthquake.

ness revenue base. Yet except for one of them, results have been less

Even to this day, people in the afflicted areas are working to recoverthan desirable. Although it's true we are experiencing a rough businessand rebuild in the midst of difficult circumstances. Along with ourenvironment, businesses in other industries are going through similar

renewed sympathies, we will continuing offer support activities.

circumstances, yet some of them are able to achieve general recognition
for their earnings, regardless of their scope or size. It's essential for us to

A changing business base and continuing social responsibility

relearn the ability to make sound business judgments, based on diligence,

As a transport business, we are facing dramatic social changes

Information on 70,000 employees as
the source of our creation

head on, forced to fight an uphill battle to build a new businessmodel for the future.
Since Japan's population is decreasing, we cannot foresee any

passion, and speed, to achieve the reforms at the base of their success.

In 2013 we kicked off a new mid term management plan, called thelarge-scale transport or delivery increases in the express delivery

Third Stage Plan. The best way to summarize the philosophy behind thismarket. While, package transport and delivery related to online busi-

new plan, is "the pursuit of synergy within SG Holdings Group."

ness (such as online mail order services) is increasing rapidly. Due to

SG Holdings Group connects with customers on a daily basis,an increase in compact parcels and short-distance transport, deliv-

through nearly 30,000 Sales Drivers and employees receiving andery costs are decreasing. This is a pressing issue for public carriers,

delivering packages. And with approximately 70,000 employees in the

who must figure out a way to stop the decrease and return to howGroup, we help keep the world in motion through various businesses.

it once was, in order to ensure an appropriate level of profit.

The information collected by our enormous staff is the source

Although our business base is changing dramatically, some of ourof our new needs and added value. By sharing and processing thisroles remain unchanged. While the logistics business serves as an

information, we can generate synergy among the Group, creating

important piece of infrastructure for industries and society, its use

new services that go beyond package delivery. We think of this asof vehicles runs the risk of potential traffic accidents and CO2 emis-

our mission as a contemporary transport business.

sions. Because these risks are unavoidable, logistics businesses have

In the past I once thought that, in 10 year's time we may no

a responsibility to carry out traffic safety and environmental efforts

longer be a package delivery company. What I meant was that, as

during their daily tasks. We must become a business group thata transport business, we would have to transition into a service in-contributes to a better society through our work-related activities.

dustry with information at the core. My philosophy is generally the

We must never try to separate our corporate social responsibilities

same today, and it has influenced the Third Stage Plan a great deal.

(CSR) from business activities.

I proposed a new management vision within the Third Stage Plan, stat-

In order to work closely with the society, and continue to earn its

ing for us to "Create new value by utilizing management resources andtrust through effective work tasks, we must deal with social change

deepening cooperation inside and outside of the Group, while aiming toin a flexible manner, and listen carefully to our stakeholders, including
customers, shareholders, local communities, business partners, andemployees. By striving to maintain our status as a safe, eco-friendly
logistics business, we will continue to offer new services and solutions
to meet the needs of the community, and create even more fulfilling
infrastructure, contributing to the creation of an affluent society.

Taking the Second Medium Term Management Plan into account for the next step
SG Holdings was established as a holding company in 2006.
Functioning within the holding company group format, eachbusiness is able to offer agile management, and has contributed tothe creation of a foundation for the Group's total power throughtwo midterm management plans, entitled the First Stage Plan (20072009) and the Second Stage Plan (2010-2012).
Through the Second Stage Plan we were able to establish a 2nd,
3rd, and 4th delivery business to further strengthen our delivery busi7

Third Stage Plan, the Fiscal 2013-2015 Medium Term Management Plan
SG Holdings Group Management Vision"Create new value by utilizing
management resources anddeepening cooperation insideand outside of the Group,
while aiming to strengthen

Synergy, Innovation, and Speed

our management foundation

SG Holdings Group Medium Term Management Plan
Third Stage Plan

and to achieve lasting growth"<Basic strategies>“We will swiftly respond to changes in our(1) Maximize the Group's earning capability

customers' needs and the market environment,(2) Enhance the comprehensive strength of the Group by expanding business areas

continue to revolutionize and make newchallenges for growth long into the future,creating new value, and striving to establish(3) Reinforce and enhance operating platforms(4) Fully adopt stakeholder managementbusinesses that will become the second, third,
and fourth pillars of the Group”

Fiscal 2013-2015

strengthen our management foundation and to achieve lasting growth."

We are working to create a corporate culture that always includes

I have also included the following four basic strategies: (1) Maximize theour stakeholders, with a particular focus on their philosophies andGroup's earnings capability, (2) Enhance the comprehensive strength ofarguments. And through our business activities, we aim to define

the Group by expanding business areas, (3) Reinforce and enhance oper-

what CSV (Creating Shared Value) should be like within SG Holdings

ating platforms, and (4) Fully adopt stakeholder management.

Group, with a goal of solving various social issues.

Some promising businesses are already working under these

As for the environment, we are using trucks powered by natural

strategies. Our "Facility Logistics Service" not only picks up and deliv-gas, and have adopted new transport methods for more eco-friendly

ers goods for tenants in large commercial facilities, but also manages

business. We continue to accumulate CSV related knowledge anddelivery vehicles and cargo-handling activities, for a comprehensive

experience through the expansion of our facility logistics service, andsystem that contributes to stronger security and conservation of theparticipating in the clean energy supply business (solar power). As for

local environment. Services such as our "Rebirth Solution Service"social action programs, we will continue to inspect the best ways tofunction through the cooperation of all Group businesses, integrat-

meet social needs, so that we can improve our strategy to contributeing the transport of products from various manufacturing compa-

in more significant ways.

nies for collection, return, recycling, etc. with other related tasks.

In terms of employees, we started the Wakuwaku Women's

We have established a business alliance with Hamakyorex Co., Ltd.,

Project in 2011 to advance the achievements of female employees

a company with years of experience and know-how in the industry, toand promote a work-life balance. Our goal is to reach 30% female

act as the pillar of our domestic 3PL (third party logistics) activities. In Sin-employment within the Group's businesses, implement a maternity

gapore, we established SG HOLDINGS GLOBAL PTE. LTD. as an overseas

leave system that spans longer than required by legal standards, andbusiness company, promoting global business strategies such as M&A.

partake in other such actions to create a new way of working in a
new era, to ultimately present a new transport business to society.
great efforts to maintain our status as a necessity within society, so

As mentioned in our 4th basic strategy above, we are making ef-

watch carefully as SG Holdings Group develops its businesses into

forts to fully introduce stakeholder management as well.
8

We will continue to listen closely to our stakeholders, and make

Stakeholder management fully implemented, and finding CSV

SG HOLDINGS GROUP Corporate Social Responsibility Report 2013that our business group continues to be selected over others. Please
the future.

| Special Issue 1 | Safety & Service |Continue functioning as a logistics group that our customers can trust,by bringing together the thoughts and abilities of each individual
A great many SG Holdings Group employees are involved in the transport process, from accepting packages to delivering them to their specified destinations.
These employees span a wide range of business fields, including Sagawa Express for delivery, Sagawa Global Logistics
for managing and operating logistics centers, SG Fielder for sorting, SG Motors for vehicle maintenance, SG Systems
for system-related tasks, Sagawa Financial, and more. Each and every one of them work with an earnest sense of pride
to offer safe, high-quality service to our customers.

Destination
DeliverySorting
Transport

Once they arrive, packages are sorted into

Sorting
PickupShipping
Customer

Packages are thentransported to regions

Once picked up, pack-

A Sales Driver delivers
packages to their speci-

more specific areas fordelivery.

fied addresses. Customers can pay on arrivalwith the e-Collect COD
service.

specified for delivery.

ages are sorted by
A Sales Driver picks up

region for delivery.

the packages.

Location Confirmation
An IT system keeps us aware of package location and status.

Vehicle Maintenance
Delivery vehicles are always maintained to stay in top condition.

9

Shipping Customer
Logistics Agency

PickupSorting

Delivery

Vehicle Maintenance

Payment

Destination

Location Confirmation

We speak with eachother and stick to thebasics.
Yoshimi Kobayashi
Service Department SGM Ladies
SG Motors Co., Ltd.

SG Motors

Vehicles are tuned up to keep them in a perfect condition, and entrusted to our drivers
Vehicles used by SG Holdings Group are maintained by SG Motors. This business adds much-needed support to keeping the logistics infrastructure safe,and goes beyond the Group's framework to bring about a safer society.

Keeping vehicles in great shape withimpressive technical skills

Maintenance Facility at SG Motors Head Office in Osaka.

eling the main routes at night, simultaneously throughout the country.
Great efforts also go into quickly sharing information, or providing
maintenance/repairs, at the first sign of trouble. At times, long-distance

SG Motors was established as an SG Holdings Group company in 1980

travel can take its toll on vehicles, and complications may arise thatto maintain delivery vehicles. As it developed along with the Group, itswere not anticipated by the automobile manufacturer. However, evenmaintenance facilities and sales offices expanded throughout the country,

something that may seem trivial could lead to significant trouble, so

and it now boasts a nationwide maintenance network. Today it features

if even the smallest of issues occurs, the head office's Service Depart-four pillar businesses, which are vehicle maintenance/inspection, newment will collect data on the incident, analyze it, and share the data

vehicle sales, used vehicle sales, and truck body manufacturing. SG Motors

with maintenance facilities throughout the country. At the same time,has 29 branches throughout Japan, with approximately 740 employees.

checks and trouble prevention measures are taken for such vehicles.

Delivery vehicles used by SG Holdings Group are always put throughAt SG Motors, the training of mechanics is taken very seriously, and a

the appropriate maintenance and inspections to keep them in top

training system is taken full advantage of within the company. Each baseshape. This is in order to fulfill our mission of delivering important mer-

assigns one of their highest ranking "Class 1" mechanics as a licensed

chandise safely to our customers. To keep our vehicles in top condition,

maintenance consultant, for customers to comfortably discuss their con-

SG Motors has cooperated with the Sagawa Express Safety Promotion

cerns with. SG Motors offers a comprehensive maintenance system that

Department to formulate

is not only limited to delivery vehicles. Licenses can also be acquired forcompany-exclusive main-

performing maintenance on forklifts, trailers, and other special equipment.

tenance standards, in addi-

And to deal with a recent surge in female drivers, service sta-tion to the periodic vehicle

tions are now available that women can easily use when needed.

inspections required by law.

SG Motors also plans to utilize its female employees as best as

Additional checks are done

possible, and formed the female-exclusive "SGM Ladies" mainte-

for transport vehicles trav-

nance team in May 2012. It will soon be fully operational.

First members of SGM Ladies

10 SG HOLDINGS GROUP Corporate Social Responsibility Report 2013

| Special Issue 1 | Safety & Service | Continue functioning as a logistics group that our customers can trust, by bringing together the thoughts and abilities of each individual |Shipping Customer

PickupLogistics Agency

Sorting
Vehicle Maintenance

Delivery

Payment

Destination

Location Confirmation
Pre-departure roll call

Sagawa Express

Sales Drivers deliver reliable
service to our customers
Sagawa Express Sales Drivers are responsible for picking up
customer packages and delivering them. Approximately 30
thousand of them are directly interacting with customers ona daily basis throughout the country.

Driving safely to carry out various
roles
A Sales Driver has many responsibilities. For example, Toshimitsu
Eto works in the Sales Department at the Chiyoda office, which illustrates that Sales Drivers do more than simply pick up and deliver
packages. His other duties include acquiring new customers, suggesting new transport services to existing customers, etc.
"Even in the small amount of time I interact with customers dura little feedback from the customers gives us ideas on how to im-

Carrying out all common tasks properly, to ensure customers receive fair, impartial service.

prove our logistics strategies." (Eto)Toshimitsu Eto

ing delivery, I ask if there's anything more we can do. Sometimes

Sales Drivers mustthoroughly perform a number of tasks. Firstof all, they must confirm their destination numerous times. For ex-

Sales Driver from the Chiyoda Office Sales Section
Sagawa Express Co., Ltd.

ample, when picking up the package, taking it back to their delivery
vehicle, getting in their vehicle, dropping off the package, they mustsafe driving record from the entire staff. Sales Drivers perform a safety

repeatedly check the destination.

roll call and sales roll call every day before going out on the road. The

In the summer months, as they directly interact with customers,

safety manager and driver perform the safety roll call by looking eachthey need to change their uniform 3 or 4 times daily to stay fresh.

other in the eye and saying good morning. This increases the driver's

And the most obvious task to thoroughly carry out as a profes-

awareness of safety and his own condition, and the safety manager

sional driver, safe driving.

is able to determine what sort of condition the driver is in by observ-"We want people to look at us and immediately recognize that
we're doing our best to drive as safely as possible. When approaching schools or other such areas, we are extra receptive in our ability
to predict risks." (Eto)
Sagawa Express makes sure that each and every driver is thoroughly aware of safe driving techniques, and also strives to achieve a

ing complexion and tone of voice. The sales roll call involves a voiceadjustment to prepare the driver for talking with customers.
Also, in order to objectively assess work tasks and strive for customer safety and satisfaction, each driver's performance rate via the
Delivery Time Selection Service is monitored and broken down into
numbers with a portable data terminal (PDT).

11

Shipping Customer

PickupLogistics Agency

Sorting
Vehicle Maintenance

Delivery

Payment

Destination

Location Confirmation

SG Fielder

Being in charge of relay points, we strive tomaintain and improve transport quality.
Packages picked up from all over Japan are sorted by shipment area at delivery
bases, and then entrusted to Sales Drivers traveling to the appropriate shipment
destination. SG Fielder functions as an outsourcer of relay point personnel management, which is significantly related to maintaining the trust of our customers.

We are responsible for creating thebond of trust between customer andSales Driver.
Katsuya Ogawa
Manager, Area Supervision 1, Kanto Branch
SG Fielder Co., Ltd.

employees work together with approximately 16,000 part-time workers andemployees from various subcontracting companies. Our Jonan Office (Yashio,
Shinagawa-ku, Tokyo) has the largest number of delivery bases in the Group,
collecting/receiving 280,000 to 290,000 packages in a single night.

Transporting a massive amount of packages
incident-free to required destinations
The packages picked up from our customers by Sales Drivers are trans-

Our primary mission during the sorting process is to ensure "consistent quality." The term "consistent quality" refers to accurate sorting, finishing the job within the alloted time, and ensuring that noneof the packages are damaged during this process.

ported to the delivery bases throughout the country from evening to lateMistakes such as sorting packages into the wrong destination

at night. Packages are then sorted by delivery area, but there are two steps

group would happen sometimes when sorting by hands. But today

of sorting they must go through. The first step of sorting is for sending the

we have a computerized system in which packages can be automati-

packages we've picked up to various regions throughout Japan. Packages

cally sorted by the payment sticker attached to each package. Thisto be sent to remote locations are transfered to a transport service featuringsystem has greatly reduced the occurrence of sorting mistakes. We

a long-distance network. The second step of sorting is done for packages

strive for quality improvements by offering transparency for various

received from various regions throughout Japan. Packages to be sent toindexes, and always working in accordance with the PDCA cycle.

areas close to our bases are received from regions throughout the country,

We also feel that "time quality," or always getting the job done on

so they are sorted for our Sales Drivers to deliver the next morning. Basically,time, is important as well. It's not uncommon to experience delays inpackages are sorted throughout the night at our delivery bases.

collecting time or late arrival at delivery bases due to heavy traffic, etc.

These sorting tasks are car-However, we have implemented a system to adjust work time accord-ried out by SG Fielder for SG

ingly, so that the customer's estimated delivery time is not affected.

Holdings Group. SG Fielder pro-

Because of this, we always combine innovation and effort by listening

vides solutions through person-

to proposals for improvement from each of our delivery bases.

nel dispatching and outsourc-

We also research the safest of operation routes in advance for our em-

ing services, not only within theployees, and always maintain communication with them to raise motivation

Group, but to external logistics

and improve on quality. Moreover, we encourage our employees to be-businesses as well. Our 1,200+

come licensed forklift operators, etc. to increase their skills as professionals.

This system automatically sorts packages.

12 SG HOLDINGS GROUP Corporate Social Responsibility Report 2013

| Special Issue 1 | Safety & Service | Continue functioning as a logistics group that our customers can trust, by bringing together the thoughts and abilities of each individual |Shipping Customer
Logistics Agency

PickupSorting

Delivery

Vehicle Maintenance

Payment

Destination

Location Confirmation

Sagawa Global Logistics

We are responsible for planning and improving efficiency for the logistics division of our client businesses.
Our current role does not stop at package delivery, as we are also
responsible for actively solving logistical issues experienced byour client businesses. As an outsourcer, our customers expect us toprovide comprehensive logistics services for their logistics division.

We are working to create a system that can
flexibly and promptly handle cargo changes.
Sagawa Global Logistics Co., Ltd.
Sub Chief, Nishifunabashi Office, East Tokyo Branch
Mitsuya Yamaoka

Combining the functionality of alogistics center and a delivery center

headphones, a microphone, and a barcode reader at the user's fingertips.

Sagawa Global Logistics specializes in a variety of fields, including

Instructions are sent by voice to the headphones, while the user is able

warehousing, customs, international express delivery, and is even li-

to respond using the microphone while performing a task. It's a two-way

censed to manufacture cosmetic products. We have approximately 5,000

conversation capable operation system. With a barcode reader at theemployees, working at 54 logistics bases such as SRC (Sagawa Ryutsu

user's fingertips, tasks can be performed with more precision, while at theCenter), 10 customs bases, and seven international sales bases, offeringsame time both of the user's hands are free to perform other tasks.

various services to build up synergy within the Group. These bases are

Sagawa Global Logistics has multiple bases established within alocated adjacent to significant airports and harbors throughout Japan.

certain area to supplement one another during operation. Not only

Sagawa Global Logistics is committed first and foremost to mak-does this enable us to flexibly meet the requests of our client busi-

ing the logistical tasks of our client businesses more efficient. Service

nesses, but it is also tied to major recruitment activities and evening

doesn't stop at simply providing warehouse space, but extends to func-

out the workload for seasonal fluctuations.

tioning as a logistics center and delivery center as well. For example, ourBarcode reader

Nishifunabashi Business Office in the East Tokyo Branch is solely responsible for the mail order related tasks of a major clothing distributor. Approximately 150 employees are dealing with the distributor's tasks on adaily basis, from product arrival, replacement, and package, to providingthem to Sagawa Express for delivery, receiving returns, etc. During thepeak season at the end of the year, we have a system of 500 employees
working day and night, 24 hours a day, to get these tasks done.
"Since we handle the assets (products) of our client businesses, we
do whatever it takes to deliver them promptly without damaging them,and make sure to provide ample logistics and time-related quality." (Yuji
Morita, Sub Chief, Nishifunabashi Business Office, East Tokyo Branch)
As a part of that, we have implemented a "voice recognition system"
for maintaining product shelves at the Nishifunabashi Office and otherwarehouses. This device was implemented in order for the S-WMS (Sagawa Warehouse Management System) to operate efficiently. It includes* Due to a company split on May 1, 2013, Sagawa Global Logistics is now responsible for domestic logistics
business, while SGH Global Japan carries out international freight business.

13

Shipping Customer
Logistics Agency

Sorting

Pickup
Vehicle Maintenance

Delivery

Payment

Destination

Location Confirmation

SG Systems

An accurate tracking system that always
let you know where your package is
Our real time tracking system allows customers to keep constant tabs on the status of their packages. This data can beused directly by the customers.

40 million transactions
per day on average
Sales Drivers and other employees use a point information entry
device called a PDT (portable data terminal). This device provides

Our aim is to offer asystem that's convenient for both customer and delivery base.

Teppei Ueki
Freight Unit Manager
Yusuke Sawada
Assistant Manager
SI Division 1
SG Systems Co., Ltd.

customers who have trusted us with their packages with peace ofthough its only function is to read our company's barcodes, it has evolved

mind, and also contributes to the efficiency of logistics-related tasks

through the years in terms of durability and scope of communication.

coordinated with our customer information system.

The PDT is used in 8 or 9 places per package, to enter information

SG Systems is responsible for developing information systems for SG

spanning from collection to delivery completion. Since we handle be-

Holdings Group, building all types of systems for logistical purposes. In or-

tween 5 and 7 million packages on a daily basis, that's an average of

der to enter information more efficiently, the PDT device was introduced as

40 million information-related transactions in a single day. A chain of

the system's core in 1985, and has been improved upon numerous times

these data entries are provided to customers as delivery information,

since, with a 9th generation of the device released in Spring 2012. Al-

which can be used to monitor shipping dates and create receipts.

Sagawa Financial

Offering a wide-range of financial services,with a "COD service" at the core
Due to the expansion of online sales, demand is growing for methods ofmaking small payments. SG Holdings Group's various payment methods playa part in meeting that demand. We are also beginning to offer new services
for corporations, such as advancement guarantees for accounts receivable.

e-Collect COD service used to make
1.33 trillion yen in payments

We want to further invigorate the logistics businessby offering a diverse range of payment options.

Ken Miyamoto
Sub Chief, Business Promotion Department
Sagawa Financial Co., Ltd.

vice to pay for approximately 135 million packages, for a total of ap-

As society becomes more Internet-dependent, not only online sales

proximately 1.33 trillion yen. We also offer an early payment methodbusinesses but distribution channels and logistics businesses are spring-to our customers who use the COD service, in which a 3-times-per-ing up. Consequently, payment has become an issue. SG Holdings Group

week transfer cycle is used.

has offered a COD service in which the Sales Driver delivers a package

As a way of further strengthening SG Holdings Group's business-and collects payment from the customer directly. And now we are offer-to-business dealings, SAGAWA B2B Payment Service was developed

ing a diverse menu of payment options, including by credit card, which

by Sagawa Financial, through which accounts receivable collection

we introduced the first in the industry.

was done by Sagawa Financial for packages (products) delivered by

These services are offered through Sagawa

Sagawa Express. We also handle money issues in various other com-

Financial. In the fiscal year ending March 2013,prehensive and multi-faceted ways, meeting the needs of our cus-

customers have used our "e-Collect" COD ser-tomers through services that support the expansion of distribution.

Left: A credit card payment device
Right: A PDT used by our Sales Drivers

14 SG HOLDINGS GROUP Corporate Social Responsibility Report 2013

| Special Issue 2 | Environment |Ways SG Holdings Group can contribute to
the creation of an eco-friendly city
As a logistics business that has many trucks at its disposal, the reduction of CO2 emissions is a goal we must continue pressing for. That is why
SG Holdings Group is taking full advantage of its resources and know-how to create an eco-friendly logistics system.
Here we will introduce the efforts between Tokyo's new hot spot Tokyo Skytree Town, and a wide range of our delivery bases throughout Japan.

15

Contributing to Tokyo Skytree Town and the surrounding environment

Facility Logistics

Tokyo Skytree opened for business in May 2012, and has become a hot spot
for tourists in the Tokyo area.
We provide a new logistics service at a commercial facility "Tokyo Skytree
Town," taking into consideration the surrounding environment.
We call it Facility Logistics, an innovative solution usedthrough Sagawa Express.
© TOKYO-SKYTREEA "General Headquarters" for logistics within facilitiespress employees dressed in special Tokyo Skytree Town uniforms.
There are four receiving bays in the back that tourists don't notice.

A blue and white shop curtain hangs in a corner of Tokyo Skytree

Apart from 20 staff members that carry out deliveries in the facility,

Tourist Service Center. That is where female employees

there are another 50 Sagawa Express employees performing various

wearing royal purple "happi" coats accept packages from customers forbusiness tasks. Other than express delivery package reception andexpress delivery, and temporarily hold their hand luggage, etc. When

joint delivery operations, these management tasks include: (1) cargo

looking closely, you'll see the happi coats are designed with a historic

arrival parking lot management and entry permission ID issuance/"Musashi" pattern from the Edo period, and contain 6-3-4 alternating

management, (2) security checks for arriving visitors and products, (3)purple lines resembling Tokyo Skytree. These women are Sagawa Ex-

cargo elevator operation and schedule adjustment, (4) arrival/depar-

Town's飛■ The logistics system and related merits we hope to attain through "Facility Logistics" (examples)

Supplier

Manufacturer* Reducing overall delivery numbers through batch delivery* Reduction of CO2 emissions by using natural gas trucks and EVs* Reducing waste by converting cardboard and other waste material into reusable folding containers, etc.
* Easing traffic, etc.

Distribution Center

Plant* Storing product stock(with warehousing functions) etc.

16 SG HOLDINGS GROUP Corporate Social Responsibility Report 2013

Facility(commercial facility, office building,urban multiplex facility, etc.)* Increased security by reducing
the number of deliveries* Efficient operation of facilities, etc.
through logistics management

｜ Special Issue 2 ｜ Environment ｜ Ways SG Holdings Group can contribute to the creation of an eco-friendly city ｜ture line guidance, maintenance of common areas, and more.

Sagawa Express services originally comprised of collection and

There are 312 shops and restaurants operating within Tokyo Skytree Town,

joint express product delivery for unique commercial facilities such as

and numerous transport vehicles are going in and out on a daily basis, car-volume sellers, but later they expanded, offering mail room manage-

rying huge amounts of products and foods to keep the shops going. These

ment services and business support services (such as replenishingadjustments are done by Sagawa Express at the Logistics Management Cen-

consumable goods, inventory control, and ordering) within large com-ter, where people, products, and vehicles are managed uniformly. Processpany buildings. Recently it has evolved into a service that uniformly

charts are created to maximize operation efficiency for cargo arrival parking

manages "people, products, vehicles, and information" as a logistics

lots, cargo handling sites, and cargo elevators, including information such as

management task for entire urban, large-scale complex facilities.

in/out times for visitors, in/out destinations, in-coming/out-going productMore specifically, these services have expanded into targeted tasks suchcontent, vehicles used, and other external factors, as well as internal factors

as management of joint delivery and in-coming/out-going packages for ex-

such as tasks performed inside the facility, which are managed uniformly.

press delivery, mail, and direct delivery, as well as work process management

This enables both management and assurance of efficiency and security

and efficient facility maintenance measures based on acquired information.

for in-coming products. This management is also performed in Tokyo Sky-

In order to carry out these services, a deep understanding andtree Town's East Tower office building, with such comprehensive logistics

ample experience are required regarding the daily activities of ten-management known as "Facility Logistics," carried out by Sagawa Express.

ant employees, those working in the cleaning, security, and con-

By creating a process order of people, products, and vehicles andstruction fields, measures for the improvements of facility security,

carrying these tasks out efficiently, the impractical turning around ofand building maintenance measures. Sagawa Express is already car-vehicles waiting for packages in surrounding areas is eliminated, andrying out Facility Logistics activities in approximately 70 locations

safety is ensured for consumers. At the same time, illegal parking andthroughout Japan, including logistics operations in Tokyo Midtown

traffic can be greatly reduced, and CO2 emissions are cut. Also, throughfor 124 shops, high-rise office buildings, hotels, and residences.

appropriate facility care and efficient cargo elevator operation, repair
expenses, electricity costs, maintenance costs can be reduced as well.

A service developed by Sagawa Express
Facility Logistics is a service that utilizes the knowledge accumulated by Sagawa Express through years of experience to manage operations within a large complex facility such as Tokyo Skytree Town.

Looking into the "eco-friendly
logistics" philosophy
Sagawa Express has cooperated with clients at Tokyo Skytree Town
from the initial planning stages, to verify that design conditions fully
consider Facility Logistics, to ultimately create an eco-friendly city.
Sagawa Express has crafted Facility Logistics to contribute signifi-

The enforcement of the Large-Scale Retail Stores Location Law incantly to environmental conservation, and aims to further expand sub-2000 provided an opportunity for us to fully enforce Facility Logistics.

contracting in the near future. From the initial building phases, Sagawa

Enactment of this law required facilities to be managed in a way that

Express wants to provide a service that incorporates designs sensitive

considers the local community, while also requiring measures to re-to the Facility Logistics line, and not only provides logistics within theduce nearby vehicle increases, illegal parking, and traffic, and ensur-

facility, but also supports the lives of those living in surrounding areas.

ing the safety of local community members through environmental

We will continue providing logistics management services

measures to reduce exhaust fumes, etc. Sagawa Express proposed

designed based on customer feedback, in order to create an eco-

Facility Logistics as a way to meet these requirements.

friendly city, along with safety and security throughout the region.
* The number of stores mentioned here is accurate at the end of March 2013.

■ By contributing to the environmental maintenance of nearby roads, we can contribute to the safety and security of the local community, and reduce our environmental footprint.

ColumnWhy did we entrust Facility Logistics to Sagawa Express? Because we've determined they are more than capable of not only carrying out logistical tasks, but also carrying out a comprehensive list of tasks throughout the facility, such as managing cargo handling site operations, and ensuring a smooth logistics line. We realized we were correct in this determination right after the Skytree opened. When we were preparing to open,
many logistics vehicles came to the facility, and we were concerned at the level of traffic congestion generated on nearby roads. Sagawa Expresssuggested to us that an appointment system be established for entering the facility, and that 24-hour cargo handling sites be implemented to
avoid the traffic congestion. Thanks to implementing those ideas, we were able to open the facility with no traffic issues to worry about.
When pinpointing the issue, they are able to quickly put forth an independent solution. Only Sagawa Express can get it done
so quickly! Today we see them as our companion, someone we've overcome issues with.
Ryo Kitagawa, General Manager, Facility Administration Department, Tobu Town Solamachi Co., Ltd.

17

Promoting the use of solar power to stop CO2 emissions

Clean Energy Supply Business
SG Holdings Group has a wide range of delivery bases and "ryutsu" distribution centers throughout Japan.
We have implemented solar panels on the roofs of these facilities as a way of participating in the clean energy supply business.
These efforts contribute to the spread of natural energy.

In May 2013, we started generating solar energy at our large-

With a total installation area of about 186,000 square meters,

scale logistics facility called "SG Realty Kashiwa Building A" in114,410 solar panels will be installed, with total annual power

Kashiwa City, Chiba. Once Building B is completed in October,generation at an impressive 17 million kW/h. That's enoughwe will be generating 1.2 megawatts of electricity. It was the firstpower for 4,700 average domestic households to consume on

facility of SG Holdings Group’s clean energy supply business start-a yearly basis. And generating that amount of power without

ing from 2013.

using natural energy would release approximately 9,600 tons of

SG Holdings Group has a wide range of delivery bases andCO2.

"ryutsu" distribution centers throughout Japan, with SG Realty in

Our 4 facilities including SG Realty Kashiwa Building A and thecharge of the leasing, management, and development of this real

Sagawa Express Kyushu Branch Office received top-ranking "Platinum"

estate.

and "Gold" certification within the DBJ Green Building Certification"The transport industry is now trying to reduce their CO2 emis-

program, in which the Development Bank of Japan evaluates sustain-

sions, and SG Holdings Group is helping to resolve this issue

able logistics facilities from 5 perspectives. These facilities have got athrough our use of natural gas powered trucks, etc. "As a measure

reputation other than in the clean energy supply business as well.

that can contribute to environmental conservation, we are alsoutilizing solar power via panels on the roofs of our delivery bases,
etc. as a portion of the power used within our facilities." (Hiroshi

A summary of our solar power generation system
for supplying clean energy

Akimoto, Manager of CRE Strategy Section, Construction Management Section, SG Realty)
These efforts led to a startup of the "Feed-in Tariff Program for Renewable Energy" in July 2012, with management focused on METI.

Scope of power generation: 18.3 megawatts
Installation area: 185,950 square meters
No. of panels: 114,410

This business also took investment efficiency into consideration, andInstall locations: Kyushu (20 places), Shikoku (4 plac-

as a company in possession of significant real estate assets, these ef-es), Chugoku (7 places), Kansai (7 places), Chubu (18forts were made to encourage the spread of natural energy.

places), Kanto (19 places). Tohoku (3 places)

At the beginning, we decided to introduce solar power generation in the 78 out of 400 delivery bases in Japan, which have

Panels used: CIS thin film solar cells** New-generation type thin film solar cells. A compound of copper, indium, and selenium is used for lighta roof of wide area and are sturdy enough to hold the weight ofabsorbing layers instead of silicon. Not only is more actual power generated (kWh) per solar cell installa-

solar panels, excluding those in where power generation is dif-made of environmentally-friendly, recyclable materials.

tion capacity (kW) compared to older models, but the panels themselves feature an eco-friendly design,

ficult due to snow.

SG Realty Kashiwa Building A

18 SG HOLDINGS GROUP Corporate Social Responsibility Report 2013

| Special Issue 3 | Creating New Value |Striving to provide service thatmeets the needs of our customers and a changing society
In order to grow mutually with our clients and everyone in the local
community, SG Holdings Group is working hard to create and provide
new, innovative services.
We strive to meet the needs of our customers in the midst of a rapidlychanging social climate.
This doesn't stop at simple business expansion, but includes the creation of new value to foster the growth of society.

19Female delivery workers blend in with a traditional town

Gion Sagawa Express(Received the "Mayor's Award for Best Outdoor Advertising Section" at the 2012 Kyoto Landscape Awards, and designated "Excellent Design for Outdoor Advertising Materials")

The town of Gion provides a traditional Kyoto hospitality. Sagawa Express opened a service center in Gion labeled "Gion Sagawa Express."
Blending in with the traditional atmosphere, "Gion Sagawa Express" has gained the trust of local community members, and the town serves as a place where we can learn about Kyoto hospitality.

A small service center of major significance
Sagawa Express was established in Kyoto in 1957, where we
continue to develop by learning from the spirit of gratitude andhospitality offered by the people of that great city.

ployees are all females, wearing special rickshaw driver type uniforms
with the company 飛 logo on their chests. No cars or trucks are used
here, tri-cycles or a cart is used to pick up and deliver packages.
The town of Gion is managed under strict rules in order to preserve its traditional feel, so regional agreement is required even to

We will never forget our Kyoto roots. And in June 2010 we opened Gion

refurbish a single floor or wall. "Gion Sagawa Express" rented out a

Sagawa Express (Gion Service Center) in Gion, Kyoto as a way of making

vacant old house and refurbished part of it to open for business.

our "customer comes first" philosophy known to a great many people.

"I had our staff take hospitality training. In order to blend in withThis small service center only covers the southern area of Gion Town.

the town's atmosphere, we must be careful with our manners andOther than the center's manager Keiji Kitaura, the remaining three em-

behavior, and during deliveries we make an effort to bow before
speaking. I also have them use such etiquette after closing the front
door, by bowing and giving a polite farewell greeting." (Kitaura)
Our center also contributes to Gion tourism, in that the staff members are sometimes asked for directions by tourists, and asked to havetheir pictures taken with them to commemorate the experience.
In Spring 2012, we joined together with the Kyoto Chamber of Commerce and Industry to develop "Delivering the essence of Kyoto byhikyaku" as a slogan for their Kyoto Sightseeing Caravan. In Ginza, Tokyo;
Sakae, Nagoya; and Hakata, Fukuoka, our employees peddled tri-cycles
while wearing the special uniforms, passing out Kyoto Expert Certification plans and Kyoto tour maps as a promotional event for the city.

Meeting customer needs and facilitating new lifestyles

24-hour phone reception service for collection
In June 2012, Sagawa Express opened a phone reception service for 24-hour collection needs.
This service is the first of its kind in the delivery industry.

An urban service to meet new needs
This service takes collection requests at any time, 24-hours aday. Demand was especially strong among mail order businesses
and individual proprietors, which influenced us to start it off.
When first opened, it only covered a portion of the Tokyo area,
but due to an increase in customer needs, we are expanding thisservice to other areas as required.
As of late January 2013, covered areas included the following
wards for Tokyo: Chuo, Chiyoda, Minato, Shibuya, Shinjuku, as well

20 SG HOLDINGS GROUP Corporate Social Responsibility Report 2013

as Osaka Chuo and Kita wards. By making delivery available on
the same day of the collection, business is more convenient forcompanies that have bases in each area, and also helps us findnew demand.
Also, an "sgx" international courier service 24-hour phone reception for collection was added in January 2013.
We will continue observing customer needs and market conditions to expand the target areas for this service, pioneering the
new late night collection and global handling markets.

｜ Special Issue 3 ｜ Creating New Value ｜ Striving to provide service that meets the needs of our customers and a changing society ｜A new type of logistics service, sending products from consumer to manufacturer

Reverse Solutions
In March 2012, we expanded upon our existing services by offering a new collection, return, and recycle service for products of various manufacturers.
By utilizing the resources and know-how from each of our business companies, with a particular focus on Sagawa Express, we are creating a new level of convenience through the Group's combined power.

Logistics in a new direction"STLC Appliance Repair Center" within the Sagawa Tokyo Logistics Center, which offers 24-hour repair services. Our repair staff is always avail-This logistics service flows in two directions: sending products

able, with repairs made and product shipped immediately if we havefrom manufacturer to consumer, and sending used products

the parts in stock. Generally, a lead time for a repair is 4 to 12 days (fromfrom consumer back to manufacturer for repairs, recycling, etc.

the reception of broken product to the delivery back to the user), but

Until now we've been focusing almost exclusively on sending

the STLC Appliance Repair Center offers a lead time as short as 2 days

products from manufacturer to consumer, but due to a recent(Kanto area). For household appliance general merchandising, mail or-

increase in demand for recycling efforts and product guarantees

der businesses, and appliance extended warranty businesses, maximum

from manufacturers and other businesses, logistical needs arerepair needs are met within a short lead time, providing solid after-careincreasing for sending products in the other direction, from con-service support. The 3Rs (*) are met through this service, which also pro-sumer to manufacturer. As a way to meet these needs, SG Hold-

motes the efficient utilization of resources, increases work efficiency forings Group started providing "Reverse Solutions" comprised of

mail order businesses, and makes life easier for consumers.

four main support services: recall/voluntary recall support, main-

Collection support (buy-ups etc.) is a service that promotes thetenance support, collection support (buy ups etc.), and recycling

3Rs as well. As a way of promoting the "reuse" movement, we havesupport (Kansai area only).

entered into contract with companies that buy used goods, andWe offer so much more than package delivery

do we collect the used goods for transport, but companies can also

we transport those goods during the collection process. Not only

The recall/voluntary recall support service provides collection trans-

make payment through our service, making life more convenient
for businesses and consumers alike.
In August 2012, our recall/voluntary recall support and collection

port to our client manufacturers for cases in which recall/voluntary recall
has occurred for their products. But this service doesn't stop at trans-

support (buy-ups etc.) services added a payment feature for after

port, as it also handles call center and refund tasks, and even provides

products are collected, called the "Product Collection/Payment

consulting as needed. Since the level of service varies depending on our

Service." In February 2013, we also added the "Collection Support

customer's business content, the scale of recall/voluntary recall, etc., it

System," in which a product collection voucher slip is issued to con-can be customized in a flexible manner for each customer.

sumers upon collection, and a status list management function can

Maintenance support is a service we started together with BEST Ser-be used among other features. We will continue to assess various

vice Co., Ltd., which offers after-care service for household appliances.

situations, and make improvements to our services accordingly, toAll sorts of household appliances are taken in for repairs, regardless ofoffer more convenient, useful solutions to our customers.

manufacturer or purchase location. On May 1, 2013, we opened the* The 3Rs = Reduce, Reuse, and Recycle■ Recall/volunteer recall handling examples (product collection, collection support, payment service)① Collection request

SG Holdings Group
Call Center② Request reception entry- Reception entry- Telegram status check - Pickup request- Collection status check - Data output- Submission form created③ Pickup request⑤ Product delivery

Sagawa Express② Refund notification① Refund request

Sagawa Financial⑤ Refund calculated
Product collection, collection support④ Product collection

ConsumerBusiness (client)② Request reception entry① Collection request

Collection Support System③ Bank account info acquired④ RefundRefund service21Support activities for areas affected by the Great East Japan Earthquake
Since the Great East Japan Earthquake, SG Holdings Group has cooperated with national and regional government entities, industry groups, and other related organizations to transport relief supplies to affected areas.
We will continue to offer our support for the revitalization of those areas hit the hardest.

An IT system built for the demand responsive transport, traveling throughout temporary residential areas in Kamaishi City
SG Systems developed an IT system needed for the demand

Scanning center opened in Koriyama City, Fukushima
SG Systems opened a scanning center in Koriyama City in Fukushima (SG System Fukushima BPS Center) as the best of its kind in

responsive transport to operate, which is performing field tests forJapan (according to SG Systems research), which began operating

Toyota and Kamaishi City, Iwate Prefecture. Field tests are being run

on September 21, 2012.

with two buses, one in the northern part of Kamaishi City, and the

By doing business in Fukushima Prefecture, an area significantly

other in urban sections. Each bus runs 8 or 9 deliveries per day. Field

damaged by the Earthquake, we have created new local employ-tests will be performed until March 2015, with a goal of meeting

ment opportunities there (about 160 people*). We wish to continue

customer demand regarding more flexible general transportation

our efforts contributing toservices to poorly-situated temporary shelters, as well as construc-therebuilding and regenera-tion of a new transportation system that solves changing transpor-

tion of the area.

tation challenges that come with revitalization.

At first, the scanningThis demand responsive transport is a passenger bus connect-

center will perform scan-ing temporary shelters in regions afflicted by the Great East Japanning and data entry tasks

Earthquake with urban areas of Kamaishi City, enabling citizens tofor Sagawa Express delivery

ride and get off at the times and places of their choice.

slips, but service will eventu-

SG Systems is responsible for input-output operations, and data-

ally expand to customers

base design tasks for these field tests. The system calculates whether

outside of the Group.

or not riding is possible, alternate travel routes, and required run* Including cooperating businesses.

times based on information such as desired stops, times reserved byusers, and reservation status. It sends the latest routes to a terminalon each bus, and can even calculate bus fares according to travel
distance. (Toyota Motor Corp. is responsible for the development of
the route calculating system.)
In March 2013, a new "Step 2" IT system was released to upgrade

Signing a disaster prevention agreement for the quick andsmooth delivery of supplies needed in disaster situations

terminal responsiveness and controls to make things easier for thedriver, and feedback from users was considered to improve design.

Due to a shortage of relief supply storage bases, and not enough

We are still making efforts to make a more efficient, convenient,distribution specialists during the Earthquake, inventory control,easier-to-use means of transportation throughout the region.

sorting, and delivery tasks were not carried out efficiently, hindering
overall distribution of relief supplies.
Using this example as a learning experience, Osaka Prefecture has
decided to utilize the know-how and facilities of private businesses
who fully understand the relief supply reception, storage, sorting,and delivery tasks needed to quickly and smoothly delivery vital
supplies to evacuees in case of a large-scale disaster, such as the
big Nankai Trough earthquake predicted to occur in the near future.
Taking this into account, the Sagawa Express Nishinihon Branch Office signed an agreement with Osaka Prefecture on March 29, 2013,
regarding the reception and delivery of relief supplies in a disaster.

Demand Responsive Transport

22 SG HOLDINGS GROUP Corporate Social Responsibility Report 2013

CSR Activities Report
Here we introduce the main CSR activities SG Holdings Group was a part of in 2012.
Please refer to our website for a detailed account of activities.

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

SG Holdings Group's CSR and ISO26000
In order to hold fulfilling activities that are easier to understand for all of our stakeholders, and to also review the content of our activities up to now,
SG Holdings Group has organized upcoming activities according to the ISO26000 international guidance standards for social responsibility.
We have performed activities in three fields: Safety, Environment, and Society. In order to indicate which core subjects ISO26000 applies to for these
activities, we have included seven core subject icons in each activity report.
Moreover, detailed activity reports available on our website are classified based on these seven core subjects.

CSR activity fields up to
fiscal 2012

The seven core subjects
and issues of ISO26000

SafetyHuman Rights

Environment

Labor Practices

Environment

Fair Business Practices

SocietyConsumer Issues

Community

Organization Governance

The 7 core subjects and issues of ISO26000
Organization GovernanceFair Business Practices

Issue: Organization governance

Issues: pollution prevention, responsible political participation, fair competition promotingsocial responsibility in valuation, respect for property rights

Human Rights
Issues: due diligence, a critical state regarding human rights, avoiding assistance, resolving
complaints discrimination and socially disadvantaged people, citizen and politicalrights economic, social, and cultural rights , general rules and rights regarding labor

Consumer Issues
Issues: fair marketing, non-biased information based on reality, fair contract fulfillment
consumer health and safety protections, sustainable consumption consumer service,support, and complaints, conflict resolution consumer data protection and privacy

Labor Practices
Issues: Employment and employment-related, labor conditions and social protections, social
dialog labor health and safety, on-the-job employee education and training

access to essential services improving education and awarenessCommunity Participation and Development
Issues: community participation, education, and culture, job creation and skill development

Environment

skill development and access to technologies, creation of wealth and income, health

Issues: pollution prevention, use of renewable resources the easing of and adaptation to cli-social investment

mate change environmental protection, recovering biodiversity and natural habitats

23

Management
We will strive to slim down our management system and practice speedy management as well as engage in efforts to enhance governance.
We strive to respect our employees and to provide equal opportunities for them, and to create a workplace environment
where it is easy for everyone to work.

Organization GovernanceFiscal 2012 Activity Results

Risk Management System Maintenance❶ Start off BCP (Business Continuity Plan) measures

In order to create a framework in which business risks can be dealt with

❷ Revise Risk Management Guidelines

in a cross-sectoral manner, we are building up our risk management sys-

❸ Create new personnel vision and systemtem, which will enable each company in the Group to understand, evalu-❹ Promote the Wakuwaku Women's Projectate, and manage the risks involved within their fields of business. In fiscal
2012, we revised our Risk Management Guidelines, clarifying them forinternal auditing and third party committees. We also started implementing BCP measures in order to continue doing business, and to take social

Corporate Governanceresponsibility if a large-scale disaster was to occur.

Organization Governance

Organization GovernanceCorporate Governance System
We strive to slim down our management structure and practice

Stakeholder Management andFundamental CSR Concept

speedy management, as well as work to enhance governance

We are moving forward with stakeholder management, in orderthrough separating management audit functions and business af-

to remain relevant as a business group that society depends on, andfairs, and clarifying authority and responsibility.

to carry out efforts which enable us to grow as a business together

In fiscal 2012, we appointed a CSR committee to carefully consider

with society in a sustainable manner. By contributing to society

the content of important CSR activities to be carried out, create man-through business activities, both business and society will benefit,

agement systems, and promote continuous improvement activities.

and we can carry out our social responsibilities as a business.
SG Holdings Group performs CSR activities according to two■ Corporate Governance System

major pillars: (1) "activities as a business," which means to provide
excellent social infrastructure, and (2) "activities as a corporate

Stakeholders (clients, business connections, local community, stockholders, employees)

citizen," which means to meet stakeholder expectations throughStakeholders Meetings
Reports

Election, Dismissal

SG Holdings Co., Ltd.
Board of Auditors

Client Lawyer

Auditing, etc.

Supervision

Business Affairs

Cooperation

Accounting Auditor

Board of Directors

Cooperation
Internal Auditing Cooperation
Department
Reports
AuditsReports
Assignment

Representative Director
Approval

CSR Committee

Head Office Departments / UnitsManagement Guidance / Approval,
Assignment of Important Items
Agenda, Reports / Prior Consultation

Group Companies

out activities which fulfill the requests of all of its stakeholders.

■ SG Holdings Group's CSR Framework

Activities as a business●

Offering superior social infrastructure(This business is the basis of CSR activities)

Activities as a corporate citizen●

Meeting and contributing to stakeholder expectations(Improving the corporate image by investing in society and the environment)

SG Holdings Group's CSR

24 SG HOLDINGS GROUP Corporate Social Responsibility Report 2013

Sustainable Society

Budget Committee

to grow together with society in a sustainable manner, and to carry

Sustainable BusinessInformation Investment
Investigation Committee

Management Strategies Meetings

Policy, Planning,
Deliberation
Risk Management Meetings
Assignment, Approval, Administration Department
Directors' Meetings
Supervision, etc.

ties, SG Holdings Group will continue its efforts to bring about CSV,

Sincere Business Management

Investment Investigation Committeesocial and environmental efforts. Through these two types of activi-

AuditsManagement and Administration
Enhancement Committee

Reports

SG Holdings Group

Reports, Discussions

Election,
Dismissal

Election, Dismissal

Compliance
Organization Governance

Basic Internal Control Policy andManagement System
We make sure that our internal controls function effectively,

Personnel Management
Organization GovernanceLabor Practices

Revise personnel / Organization
SG Holdings Group has been carrying out a new human resource vision and Group Human Resources System since September 21, 2012.

and to evaluate them to make necessary improvements. We also

The new human resource vision clarifies the organizational climate

continuously review our policies to keep up with changes in theand work style needed to develop human resources, while stressing

management environment, and strive to develop more effective

the importance of changing employee actions, awareness, and senseinternal controls. SG Holdings has formulated a Basic Internalof values in order to develop their abilities to the fullest. Also, eachControl Policy.

employee plays an important role within SG Holdings Group, and isInternal controls of the entire Group are managed by the SG

reminded that he or she is a representative of the Group to custom-Holdings Internal Controls Promotion Office, with the Internal

ers. By forming a culture in which all employees within the Group areControls Promotion Section of the Group's core business Sagawa

always aware of the issues, and work hard toward innovation, we will

Express providing explanations of internal control-related docu-

contribute to the Group's perpetual growth.

ments, while also maintaining and evaluating internal controls.

We implemented a Group Human Resources System as a shared

Soon we plan to rebuild our task management system, build

system, in which human resources can be utilized efficiently by the

an internal controls report system for the entire Group, expand

Group in a cross-sectoral manner. Human assets are responsible forthe target range by strengthening internal controls, and build an

the Group's sustainable growth. Through this philosophy, combinedinternal controls management system for each company withinwith the efficient utilization of human resources, and the achieve-

the Group.

ment of self-growth, our aim is to produce a great deal of talented
human resources with a competitive edge.

Organization Governance■ Personnel Vision

Strengthening the Compliance System
In order to deal with changing social and management
environments, and to build a corporate culture that performs
business activities with integrity, we are working to improve theShining Individuality,

maintenance and management of our compliance system, which

A Connection Mentality,

abides by the "SG Holdings Group Ethical and Action Standards."

and the Widening WorldIn fiscal 2011, we started preparing management systems for the- Challenge for Innovation -entire Group. At the same time, we educated all Group employees to further improve our compliance systems.

Work hard to improve
motivation, awarding
people for theirachievements.

Take advantage of thefair field of play and fair
opportunities, continuing to
strive toward your goals
without any fear of failure.

Perform at your maximum
potential within thetime management limit,
and create added value.

Take on a roll to
improve your own skills,
continue learning to attainself-growth, anddevelop with passion.

Shining Individuality

A Connection Mentality,

Widening World

Everyone work to expand theirpersonalities, and then polishthem to shine brighter thanany others.

Everyone should work with thesame mindset for total
solidarity. Work towards a new
future, never forgetting ourroots or the "hikyaku" (express
service) spirit

Broaden horizons and potential
by connecting various
personalities. Create new value,
not only in Japan, but on a
global scale.

25

Visit our website for more information: Organization Governance
Visit our website for more information: Human Rights / Labor Practices

Human Rights

http://www.sg-hldgs.co.jp/csr/organizational/
http://www.sg-hldgs.co.jp/csr/human/

Labor Practices

The "Ask Anything" consultation office
The "Ask Anything" consultation office is available for whistleblowers and employees to discuss their troubles. It's a place where
employees can report actual or possible breach of compliance, sothat prevention or correction can be done properly. It also provides■ Advancing the achievements of female employees

ColumnAs a pioneer in the logistics industry, we are working to transformthe Group's business culture to enable female employees to become
more active than ever before. More specifically, our goal is to build asystem in which 30% of Group business employees are female.
In order to secure talented human resources, not only must we in-a venue for receiving counseling from other employees via phone,crease the ratio of female employees, but we must also develop theiremail, or direct correspondence. There is also a female exclusive

skills, and appoint them to management positions. In addition, we arecounseling service available, which is headed by a female employee.

advancing measures that improve both work performance and child rear-

Appropriate communication through such counseling sessions enables

ing, such as encouraging employment after child care leave is acquired.

employees to more fully demonstrate their abilities, and creates an environment that's easier to work in for everyone. As a result of fully respecting
the ideas and privacy of those receiving counseling, the number of counseling sessions has steadily increased year after year, and it has proved to
be an easily approachable venue for those in need of consultation.

Soon we plan to start holding women-participatory meetings,
team formation, etc. to encourage female-proposed business.
[Efforts to advance the activities of female employees]
1. Expand the child rearing/nursing care leave system (leave can betaken until the child turns 3 years old. Effective from April 2012.)
2. Promote the taking of consecutive leave

Feedback from an external expert

3. Offer cost subsidies for gynecological exams (for breast cancer, cervical cancer, and bone density）

SG Holdings Group is carrying out CSV activities in accordance

4. Hold diversity management seminars (for Group management level employees)with a Mid Term Management Plan starting in fiscal 2013. We would

5. When possible, abolish uniforms, and implement a plain

love to have you carry out these efforts, but from a CSV perspective,

clothes policy in the workplace

it's important to understand the extent at which society is influenced

6. Carry out a survey for those who have experienced maternity leave/child rearing leaveby these activities, and whether or not value can be created. Please

7. Hold a support seminar for those who have experienced ma-

keep in mind the amount of influence these activities hold, and beaware of the scope of influence the activities have on society.
Regarding human resource management, your efforts to advanceternity leave/child rearing leave
8. Distribute a "To Be What I Want to Be" booklet, which includes how
women work (introduce role models), company systems, etc.

the activities of female employees are very interesting from a businessperspective. I think that getting women more involved raises potential
for new services to enter into the local community, so I hope you continue these efforts while maintaining an environment that is easier towork in. Also, with the objective of promoting activities among female
employees, it's important to clarify what your expected results are, andto make sure they resonate with employees to increase their motivation.

Round-table discussion for those who havetaken maternity leave/child rearing leave

Maternity leave/child rearing leave support
seminarFinally, regarding the human rights related activities, every industry
in Japan is still groping for answers on these. This is why I think multiple
businesses and experts need to come together and discuss it, so thatthey can formulate clear definitions that work for them. I'd definitely liketo see SG Holdings Group actively involved in the discussion as well.

Wakuwaku Women's Project
The Wakuwaku Women's Project was started with a goal of proactively
accepting employee diversity, particularly striving to increase the level of contribution of female employees in the Group's businesses, as well as aiming tochange the Group's corporate culture and improve the status of the industry.

Hiroshi Ishida
Executive Director and Secretary Generalof Caux Round Table-Japan (a specified nonprofit corporation)

26 SG HOLDINGS GROUP Corporate Social Responsibility Report 2013

Project members, who are all female employees, select issues for encouraging
women to take active roles, while also drawing up and investigating measures.

Safety
We view safety as the highest priority in our businesses, and the entire Group is involved in a variety of safety efforts.
We also proactively expand our initiatives to realize a society that can provide a safe transportation.

Labor Practices

Fiscal 2012 Activity Results

Environment

Consumer Issues

Environmentally-Friendly Driving❶ Stress the importance of environmentally-friendly driving❷ Improve health care through SAS screenings and brain dock exams

Safe driving has significant, positive effects on the environment.
Sagawa Express promotes Environmentally-Friendly Driving.

❸ Received the Skilled and Safe Driver Award for Businesses in 147 offices

Environmentally-friendly driving is a technique in which the driver❹ Hold Arterial Transport Safety Patrols, Arterial Transport Terminal Inspections, and Safety Seminars for Cooperating Arterial Companies

does not suddenly depart, suddenly speed up, or suddenly stop. It❺ Held a "Traffic Safety Class" 625 times throughout Japan, mainly
for young children

is an eco-friendly technique, and is implemented to prevent traffic
accidents. To make sure all of our drivers have mastered this technique, detailed driving data is analyzed that is taken from specialized

Safety Management & Education

research and drive recorders.
Especially important steps for utilizing this technique are covered inthe "Seven Articles of Environmentally-Friendly Driving." Since fiscal 2011,

Labor Practices

we have used the "soft acceleration" concept in which departure andConsumer Issues

acceleration are done gradually. When compared to business before this

Safety Management Systems

effort was started in 2011, gas mileage is 1.25% more efficient than the

Sagawa Express views transport safety as the most importantmanagement issue.

previous year. By gradually stepping on the accelerator, drivers can stay
the appropriate distance between cars, ultimately preventing accidents.

We have implemented a Transport Safety Management System

We will continue to closely follow the "Seven Articles of Environ-and appointed a Safety Measures Committee so that management

mentally-Friendly Driving" so that our employees carry out safe andand on-site employees can work together for safety.

eco-friendly driving habits throughout the day.

The Safety Measures Committee holds monthly safety meetings
to make sure that safety measures are continuously being carried out.

[The Seven Articles of Environmentally-Friendly Driving]

The committee deliberates on the progress of safety activities and on

1. Practice e-Start soft acceleration

tangible and intangible measures on ensuring safety. The committee

2. Shift up earlier rather than later

also holds periodic safety review meetings, where safety promotion

3. Drive at a stable speed in line with traffic conditions

staff from branch offices throughout the country participate, consid-

4. Ensure sufficient space between vehicles

ering feedback from on-site employees to improve safety measures.

5. Utilize the engine break by stopping acceleration early■ Safety Management Organization Diagram

6. When parking, remove the key and turn the engine off
Integration of feedback
from on-site employees

Board of Directors

7. Perform daily inspections, maintenance, and pressure management

Instructions, guidance

Safety Measures Committee

Pursuing Safety

Safety Meeting
Task Management Head / Branch Manager Meeting

Safety Discussion Meeting

Chief Manager Meeting

Deliberations on
all sorts ofHead of Personnel, Education, and Labor Sections
Joint Directors Meeting

Branch Office, Sub-branch Office Safety Promotion Meeting

Labor Practices

Consumer Issues

Sagawa Express Driver Contest
On June 1 and 2, Sagawa Express held the 20th Sagawa Express Driver
Contest at the Sagawa Express Training Center's Automobile Training Course.

Chief Manager
Operations Manager, Support Manager

Sales Branch

Maintenance Manager, Support Manager
Drivers

The contest is held annually with a goal of preventing vehicle accidents and improving driving etiquette, with drivers selected from27

all over the country, competing to see who has gained the best
knowledge, driving skills, and environmental awareness on the road.
In fiscal 2012, 60 drivers competed from our 7 branch offices, as well
as from SG Moving and World Supply.
The driving contest is more than just a simple competition for points

Labor Practices

Health management with safety in mind
- SAS Screenings
Sagawa Express screens drivers throughout Japan in order to pre-in which results are given on the spot, as it also serves as form of humanvent traffic accidents caused by health issues such as sleep apnea

resource training. Training is performed at multiple branches before thesyndrome (SAS). These efforts are designed to meet our responsibili-contest, allowing participants to share related knowledge, hone theirties as a corporation that uses vehicles for business, and to promote

driving skills and etiquette, and develop a professional awareness.

health management for our drivers. Currently examinations are held

We will continue to view safety as our highest priority, work to cultivate

every 5 years, and drivers who are determined as potential sufferers

professional drivers, and raise the safety awareness of all our employees as partof SAS must take a detailed examination at a specialized agency.

of our responsibility as a corporation that uses public roads to do business.

Treatment is then administered according to what the medical specialist deems appropriate.
In fiscal 2012, a trial examination called the Brain Dock examination was given to drivers age 55 or older employed in the Kanto
area. The objective of this exam is to prevent the danger of having
a stroke while behind the wheel, and we are considering extending
such exam efforts in the near future.

Ensuring traffic safety in thelocal community
Labor Practices

Consumer Issues

Inspection Competition

Labor Practices

Consumer Issues

Forklift Driving Technique Contest

Preventing Traffic Accidents throughDrive Recorders
Sagawa Express has equipped 25% (about 6,300) of the vehicles
used for collection and delivery with drive recorders in order to

Sagawa Global Logistics holds the Forklift Driving Technique Con-

manage employee driving habits. Every driver will experience driv-

test as a way to improve the forklift driving and inspection skills of

ing while being monitored by a drive recorder at least once a year.

employees, with the objective being to establish a safe and secure

The drive recorder evaluates 5 categories by points: braking, stop-

work environment. It was held at Kawasaki SRC (Sagawa Ryutsu

ping, steering, right/left turns, and smoothness. By understanding

Center) on October 19 and 20, with 24 forklift operators selected

employees' driving habits, we clarify

from the Sales Department of various branches throughout theissues, increase safe driving aware-country to display their forklift driving skills and safety awareness inness, and improve techniques ofcompetition.

drivers. Driving data can be used for

The aim of this competition is to promote safety awareness andsafety-related training and instruc-

improve operating techniques, for a safer, more secure work envi-

tions, especially when unsafe actions

ronment.

are recorded, proving useful in theprevention of accidents.
Driving diagnostic results chart

28 SG HOLDINGS GROUP Corporate Social Responsibility Report 2013

http://www.sg-hldgs.co.jp/csr/human/

Visit our website for more information: Human Rights / Labor Practices

http://www.sg-hldgs.co.jp/csr/consumers/

Visit our website for more information: Consumer Issues

We plan to continue our efficient utilization of drive recorders tomake collection and delivery tasks even safer.

Holding Safety Seminars for Cooperating Arterial Companies
We hold safety seminars for managers of cooperating arterial

Consumer Issues

Fair Business Practices

Securing Safety for Arterial Transportation
To improve traffic safety in arterial transportation, Sagawa Express
has implemented initiatives to improve safety awareness for drivers

companies. We also invite lecturers from the Labor Standards Inspection Office and so on, to discuss safety initiatives for trucking
firms, the basic and legal responsibilities of transport firms, and ways
to prevent work-related injuries. In fiscal 2012, managers from 275
companies participated in the seminars at seven locations.

including for those of cooperating companies.

Arterial Transport Safety Patrols
To increase safety in arterial transportation, we conduct Sagawa

Labor Practices

Consumer Issues

Community

Sagawa Express Traffic Safety Classes

Express Arterial Transport Safety Patrols. These patrols are done at

Our Sagawa Express Traffic Safety classes were started throughthe main service areas and parking areas on arterial routes to men-a desire to protect our future, the children, from tragic accidents.

tally and physically refresh our drivers, and vehicle checks are per-Content includes how to properly cross the street, the meanings offormed as well, to prevent traffic accidents and vehicle breakdowns.

road signs and traffic signals, etc. Truck related accidents and blind

In order to contribute to the safety of society as a whole, we also

spots are explained with impact by using actual trucks as examples.

perform vehicle inspections as requested for cargo transport vehi-

As an effort to keep children safe throughout the entire community,

cles outside of the employment of Sagawa Express and cooperating

local police and parents are asked to participate as well, creating ancompanies.

environment where everyone involved can learn something.
Even employees who teach at Traffic Safety Classes can use thisas an opportunity to review their own safe driving habits, and havean opportunity to think of safety from the viewpoints of non-drivers.
In fiscal 2012, we held 625 classes nationwide, with a total of
80,325 children participating. The class was held at Kamikita Elementary School in Osaka on October 23, 2012. Since the class was first
held in 2003, more than one million people have participated. Going

Arterial Transport Terminal Inspections
We conduct Sagawa Express Arterial Transport Terminal Inspec-

forward, we will continue efforts to build a safer society for our children.

tions with the goal of maintaining and improving transport quality
by preventing vehicle and traffic accidents during transport. Our
administrators at all Sagawa Express locations work together withadministrators from cooperating companies, using special checksheets to conduct these inspections. At the morning assembly, we
also share the latest
habits that may leadto accidents as aheads-up message
to our employees.

Traffic Safety Class held at Kamikita Elementary School

29

Environment
As a good corporate citizen, we continue our efforts to curb global warming.
We cooperate with various stakeholders in efforts to preserve the environment throughout society.

Environment

Fiscal 2012 Activity Results

Implementing trucks powered by natural gas❶ Total CO2 emissions from Sagawa Express were approximately
390 thousand tons, for a reduction of nearly 3% since 2011
❷ Sagawa Express participates in field tests for recycling small
household appliances❸ SG Motors has acquired Eco Action 21 certification in 19 offices❹ SG Realty is Platinum and Gold certified by DBJ Green Building in four locations❺ SG Realty has started a clean energy supply business(see page 18)

In order to reduce the amount of harmful substances released into
the environment during delivery tasks, Sagawa Express has started using natural gas powered trucks. Since these truck use natural gas (towngas) as fuel, they emit less CO2 and NOx (*1) than diesel, gasoline, and
LPG-fueled vehicles, and do not emit any PM (*2), which is why they are
currently gaining traction as the cleanest vehicles in the trucking field.
As of March 2013, we are using 4,285 natural gas trucks in total, recog-❻ Held hands-on forestry educational courses using company-owned forests

nized as the largest natural gas ownership by a company in the world(according to the International Association for Natural Gas Vehicles).

Sagawa Express main environmental numbers■ Total CO2 emissions:approximately

390■ Total waste matter emissions:approximately

3,723

We plan to continue these
efforts into the future, not only
utilizing natural gas trucks, but

thousand tons

various other types of ecofriendly transport as well.

tons*1: NOx refers to nitrogen oxide.
*2: PM refers to fine particulate matter.

Setting Up Natural Gas Refueling Stations

Efforts to curb CO2 emissions

In order to promote the use of natural gas trucks and the necessary infrastructure, we have opened many natural gas refueling stations. As of March 2013, we have

Environment

Consumer Issues

Model project focusing on the creation of a low carbon society in frontof Hakata Station - Commissioned by the Ministry of the Environment
In September 2012, Sagawa Express took on the "Model Project Focusing on

private natural gas refueling stations in 22 locations throughout
Japan.

Private natural gas refueling station

the Creation of a Low Carbon Society" commissioned by the Ministry of the Environment, and started up the "Model Project for the Creation of a Low Carbon
Delivery and Collection System in Front of Hakata Station." The project entailed:Utilizing Biofuel
The Sagawa Express office in Higashi Kobe uses biogas as fuel for(1) creating an efficient delivery system that uses delivery boxes, (2) implemen-

our natural gas trucks. Biogas efficiently utilizes digestion gas (*), andtation of eco-friendly delivery vehicles, and (3) creation of an integrated collec-

is viewed as a next generation fuel source that can help reduce CO2tion and delivery model covering the JR Hakata City area. From April 1, 2013, theemissions.

system kicked off with delivery boxes installed at stations and super markets in

We have also began to introduce biogasoline and biodiesel, andthe Hakata Station front area, providing an acceptance service for packages dur-

are promoting various types ofing absences, as well as electric cars for express collection and delivery service.

biofuels to lower CO2 emissions.

During this project, we will carry out inspections regarding CO2 reduction
effects, profitability, feasibility, the spread of similar activities near other large
stations, regional revitalization, job creating effects, etc. Our aim is to create a
low-carbon delivery system that will positively affect the community.

* Digestive gas: Gas with a high methane content, generated through sewage treatment.
Biogas station

30 SG HOLDINGS GROUP Corporate Social Responsibility Report 2013

Environment

Labor Practices

Implementing new EV types

Environment

Community

Utilizing service centers

SG Motors has developed an EV body exclusively for collection and

Sagawa Express has established Service Centers in 370 locationsdelivery purposes, which is part of a new 3-wheel EV called the LIKE-

throughout Japan, which collect and deliver packages with "man-T3, developed by Mitsuoka Motor Co., Ltd. and Yuasa M&B Co., Ltd.

power" vehicles, such as push carts and three-wheeled delivery cycles,

After implementing natural gas trucks, Sagawa Express was consider-rather than using trucks, etc. Each service center has reduced theing bringing another type of eco-friendly vehicle into the company,

use of automobiles by 3 to 5 vehicles per office, for about 1,500 lessand SG Motors selected the LIKE-T3 as a promising candidate, so it has

automobiles on the road in total, which is seen as contributing to a re-been involved with the LIKE-T3 since its early development stages.

duction in air pollutant emissions. As there is a service center locatedIn order to make an exclusive body that's environmentally friendly
and crafted especially for collection and delivery tasks, SG Motors usedin each region, community-based services have grown, service quality
has increased for customers, and traffic has been reduced.

lightweight aluminum, and an original canopy design that functions

Going forward, we will continue to efficiently utilize these service

well on rainy days. Currently, this new type of vehicle is being put

centers, as they are transport bases that are kind to people, thethrough a trial run at the Sagawa Express Shijo Takakura Service Center.

earth, and the community.

SG Motors will continue to research and develop vehicle bodies that offer both eco-friendly
design and task efficiency.

Labor Practices

Environment

DBJ Green Building certification acquired
SG Realty received the top-ranking "Platinum" DBJ Green Building
certification through the Development Bank of Japan for its large

Environment

Consumer Issues

Field tests for recycling small household
appliances
From December 2012 to February 2013 in Obu City, Aichi Prefecture, Sagawa Express participated in a field test for the Ministry of the"SG Realty Yokohama" facility completed in May 2012, and "SG Realty Kashiwa Building A" completed in June. It also received "Gold"certification for Sagawa Express Kyushu Branch Office and Sagawa
Express Kanda office.
SG Realty Yokohama was the first logistics facility to receive "Platinum" certification since the certification system began.

Environment's "Reuse Model Promotional Project" entitled the "Project

SG Realty performs real estate leasing, management, and devel-

to Consider the Possibilities of Reusing or Recycling Small, Discarded

opment tasks. Since its founding, it has worked to efficiently utilize

Home Appliances during Home Delivery Tasks." This went into ef-

real estate, participating in green activities such as installing solar

fect with the Small Home Appliance Recycling Law of April 2013, andpanels on rooftops, putting in "refresh corners" for employees to

Sagawa Express was in charge of collecting small appliances fromwork more comfortably, and developing parking lots. These sorts ofgeneral consumers and transporting them to designated facilities.

activities are what led to receiving DBJ Green Building certification.

Small appliances such as digital appliances and mobile phones contain valuable resources such as rare and useful metals, and by recycling

We will continue to design facilities with the environment andemployee well-being in mind.

them, they are considered a very valuable resource to Japan. As a resultof the field test, we were able to collect more than expected, and contributed to consumer awareness by informing them of the law.
Soon we will combine our long standing appliance recycling and transport support services, developing them into a larger service that is moreconvenient and promotes recycling to a wide range of consumers.
SG Realty Yokohama31http://www.sg-hldgs.co.jp/csr/environment/

Visit our website for more information: Environment

Also, with the Takao 100-Year Forest project, covering approxi-

Environment

WWF Climate Savers Program
Sagawa Express signed on to the Climate Savers Program in May
2003. The Climate Savers Program is an initiative where corporations
work together with the world's largest nature conservation group,

mately 50 hectares of forest in the Takao area of Tokyo's Hachioji
City, we are involved in initiatives into a healthy "satoyama" (village
forest) and hold hands-on forestry classes with the cooperation ofNPOs, volunteers, and members of the community.
SG Holdings Group continues to consider and suggest new for-the World Wide Fund for Nature (WWF), to reduce greenhouse

est activities togases.

promote a co-

CO2 reduction goals are set through consultation with WWF. At
the time of signing, Sagawa Express set a target of 6% reduction inexistence withnature.

total CO2 emissions by fiscal 2012 as compared to the fiscal 2002
level.
We exceeded our 2012 target with 9.29% less emissions than
2002. This was achieved through continuous environmental efforts
and the activities of each and every one of our employees.

Hands-on forestry education courses in Takao

Sagawa Express will continue these efforts into the future, developing efficient, eco-friendly modes of transport.

Feedback from an external expert

Living in Harmony with Nature

Environmental-related efforts I am particularly impressed with include theuse of natural gas trucks, environmentally-friendly driving, modal shift, and othersuch activities to curb CO2 emissions. A logistics business uses a lot of trucks,

Environment

Community

Company-owned Forests

which can be rough on the environment. You are expected to be fully aware ofthese issues, and should integrate environmental efforts into Group business activities as a whole. I hope you will make sure each and every one of the Group's
employees are fully aware these environmental activities, and that you will con-

Forest Preservation Activities
The SG Holdings Group owns 735 hectares of forest in Shikoku's
Kochi and Tokushima Prefectures, as well as in the Takao area of Hachioji City, Tokyo. Not only does this forest land absorb CO2, but wealso use it to communicate with the local community, as a place tooffer environmental education.

tinue to perform them steadily and honestly.
I also suggest that you put more energy into environmental PR in order tohave an overall more effective, significant impact by getting customers, businessconnections, and the local community involved in your efforts. One possibility
would be to revive regional contributions, environment-related educational
activities etc. by utilizing Sagawa's Forest and the Takao 100-Year Forest Project.
If you could include the carbon offset certification acquired by Sagawa's Forest,

Sagawa Forestry works together with the local forestry coopera-

and bring attention to the fact that a forest has multiple functions other thantive to effectively manage Sagawa's Forest (approx. 685 hectares)

providing lumber, I believe you could be quite successful at creating environ-in Shikoku, performing maintenance activities such as thinning andmental PR and imagery that appeals to general consumers.

felling. We were also the first transport/logistics business to receive

Lastly, the ability to meet global standards is an issue the logistics industry

J-VER certification (5,612t-CO2 offset credits). In February 2013,

faces as a whole. As all industries are now transitioning into globalization, I'm

we cooperated with the Kami City Board of Education, NPOs, andexpecting this industry to become more globally acceptable in terms of environ-volunteers to offer hands-on forest education courses in Kami City,

mental activities as well.

Kochi Prefecture, where one of our forests is located. Participating

Hisako Makimura

students were primarily from local elementary schools.

Kyoto Women's University,

32 SG HOLDINGS GROUP Corporate Social Responsibility Report 2013

Professor

Society
Logistics is a part of our social infrastructure that connects people with other people, and to society in general.
We shall contribute to society through deeper communication with our customers, employees, and local communities to benefit everyone.

Fiscal 2012 Activity Results

is able to handle identification correspondences such as invoices,
resident cards, and family register copies, the number of handlings increased by about 180% in fiscal 2012 compared to the previous year.

❶ Implement new Hikyaku Cool Express cooling boxes❷ Start up smartphone websites and distribute iPhone applications

We are also considering transport of celebration or condolence
telegrams for the near future.

❸ Support London Olympics participants Ryo Yamamoto and
Takayuki Tanii (track and field club)❹ Carry out efforts to support work experience events, private company training for teachers, and other next-generation developments

Quality improvements

Consumer Issues

Smartphone compatibility andapplications distribution
In order to handle the recent increase in smartphone users, Sagawa Express is developing smartphone websites and iPhone applications, to be

Consumer Issues

Quality Improvement Initiatives

made available to the public, so that customers can acquire information
more conveniently. With a screen designed to utilize unique smartphone
tools, customers are offered high quality controls and more convenience.

In 2008, Sagawa Express had 418 of its offices ISO9001 certified, which
is an international quality management system standard. We are also
constantly working to improve our transport process, and in fiscal 2011

Feedback from an external expert

started quality control through a unique Sagawa Express management
system called "Attack 10." This system includes 10 articles, such as the fastdelivery ratio, which are directly related to quality improvements.
In fiscal 2013, we focused a lot of energy on four items: ratio of
freight shipping accidents, ratio of freight arrival accidents, ratio ofmorning delivery, and ratio of time service performance.

You need to provide consumers with a proper understanding regarding the value of logistics, so that they can cooperate as users. In order toaccomplish this, SG Holdings Group must aggressively hold enlightenment activities for its consumers. You'll have to properly inform consumers of this value, by explaining that a delivery service consumes energy
and materials, while it is also an important part of social infrastructure. I
believe such efforts are connected to an improvement in delivery service

Implementing new Hikyaku Cool Express cooling boxes
Since fiscal 2012, we've been implementing new cooling boxes

quality, reducing environmental strain, and furthering the element offairness in business transactions.

in an orderly fashion for Hikyaku Cool Express, which specializes in

Also, I think strict management of personal data and other "informa-delivering refrigerated and frozen goods. The new cooling boxes en-tion security" related efforts are expected of the logistics industry, as it

able longer usage of storage cooling agents (12 hours), allowing us toreduce the amount of dry ice used together with them. As a result,
we used 5,883 tons of dry ice in fiscal 2012, compared to 8,149 tons infiscal 2011, for an overall CO2 emissions reduction of nearly 30%.

holds massive amounts of personal information. I think you're alreadysecurely managing information through a pays lip management system,
but the personal data of consumers' needs to be managed more delicately, so perhaps you'll need to step up your efforts even more.
SG Holdings Group is a group that, once it determines a policy, it applies to the entire group, which is then able to achieve significant results

Consumer Issues

through related efforts. My hope is that SG Holdings Group will carry out
activities which can ultimately improve the entire logistics industry.

Special Correspondence Delivery Business
Sagawa Express has acquired permission to enter the special correspondence delivery business. This has allowed us to start up services

Hirohito Kuseworking together with existing infrastructure, such as online collec-

Professor, Marine Science and Technology Research Department,tion requests. Since Hikyaku Special Correspondence Delivery Service

Tokyo University of Marine Science and Technology

33

http://www.sg-hldgs.co.jp/csr/fair_practices/

Visit our website for more information: Fair Business Practices
Visit our website for more information: Consumer Issues

http://www.sg-hldgs.co.jp/csr/consumers/

Visit our website for more information: Community Participation and Development

http://www.sg-hldgs.co.jp/csr/community/

Community

Support for sports

Sawaga International Economic
Cooperation Foundation

Community

Sporting events to promote physical andmental healthIn order to encourage sporting events to promote physical and mental
health, SG Holdings Group is helping to create an environment in whichathletes who work for us and want to continue playing sports can do so.
As a business sports activity, we help train athletes at the top of
their field in softball and track and field, to increase overall sports-related competition in each field. Some athletes from our Group startedout domestically, and eventually represented Japan in the 2012 London Olympics, participating in the men's marathon and men's 50-kilo-

As a way to contribute to the economic and technological advancement of developing Asian countries, we are donating used
trucks and other transport vehicles, as well as accepting trainees tolearn vehicle maintenance skills.
By fiscal 2012, we donated 3,312 used trucks, and accepted 150
trainees.
Community

Sagawa Cancer Research Promotion
Public Interest Foundation
To contribute to improvements in medical welfare, we support
research and development efforts related to basic cancer studies

meter competitive walking.
We also periodically hold events soand applied treatments, offer research grants and awards to promis-that all employees and local citizens

ing cancer researchers, hold cancer related lectures/citizen courses,

have an opportunity to enjoy sports

and publish a report on research results.
In fiscal 2012, we selected research eligible for the 24th Sagawa

together, sharing their dreams andimpressions, in an earnest effort toCancer Research Support, and selected winners of the 10th Sagawa

revitalize communication throughSpecial Award and the Sagawa Nursing Care Special Award.

sports. We will continue to encourage

Community

exchange with the local community
through sporting events into the fu-© Photo Kishimoto
Ryo Yamamoto, athlete

ture.

Participant in the London Olympics men's marathon

Sagawa Art Museum Public Interest
Foundation
We are carrying out projects for public arts and crafts exhibitions
and promotional activities, with a goal of contributing to wide-rang-

Foundation Activities

ing social creativity. We are constructing an art museum as a placefor various exhibitions, concerts, and educational activities (Sagawa

Community

Sagawa Foreign Students Scholarship
Public Interest Foundation
As a way to contribute to friendly relations with Southeast Asian
countries, we are providing scholarship support to students from Southeast Asia to attend Japanese universities, etc. We want scholarshipstudents to have a fulfilling and positive experience studying in Japan,
so we offer mental and spiritual support in addition to financial support.
In fiscal 2012, we awarded 16 students with the Sagawa Scholarship in the 27th term.

34 SG HOLDINGS GROUP Corporate Social Responsibility Report 2013

Kids' Museum), as a means of communicating with the local community.

SG Holdings Group
Third party opinions regarding "CSR Report 2013"
The opinions expressed herein are based on content from this report and posted on the Group website, as well as interviews performed with members of the Group's General Affairs Section, Personnel Section, and those responsible for CSR.
SG Holdings Group has not yet established a comprehensive management cycle (PDCA) to deal with a wide-range of CSR efforts,such as environmental improvements, calls for cooperative efforts with business partners. Other global businesses already have suchmanagement cycles in place, so SGH should immediately move forward with these fundamental principles and create a system.

Points that are satisfactory, and points that need work◉◉

Regarding the Safety Management System (page 27), the teaching of ba-

Improvements I'd like to see immediately◉

sic operations and daily checks for traffic safety to Sales Drivers is satisfac-

rently no promotion plans to carry out mid-term objectives, and no

tory. However, accident examples are limited to an introduction of thosechances have been set aside for the sharing of individual efforts with the

involved, along with the content. I expect reference to advanced cases

entire Group. Under these circumstances, effective, efficient promotion isin the manufacturing industry, which indicate the cause of the accident,

difficult to achieve, so the CSR committee needs to step up, and share thealong with effective, practical, concrete measures to take in response.

actual situation concerning on-site mid-term objectives and promotion

Regarding health and safety improvements (page 28), the implementa-

plans. Also, it needs to act as a venue for conferences and cooperation totion of cutting-edge facilities and other efforts to reduce physical strain

achieve Group-wide improvements. I strongly feel that everyone in top

are satisfactory. However, numerous risks are still not addressed, suchmanagement, including CEOs and CSR directors, must clearly understandas heavy lifting while stooped over, walking on uneven, steep levels. I
expect efforts to be implemented which offer specific objectives and◉Regarding the Group's CSR Promotion System (page 24), there are cur-the importance of these actions, and step up as leaders in system creation.
◉

Regarding the procurement of products to consider and manage

promotion programs that work toward solutions to these risks.

social responsibilities [Website: Environment > Efforts to create a

Regarding Environmentally-Friendly Driving (pages 27-28), the fact that 25%

sustainable society > Purchasing eco-friendly products], I stronglyof all work vehicles are equipped with a drive recorder to determine the rank

feel that general rules must be formulated immediately, the situa-of Sales Drivers at each service base based on their driving performance istion of business contacts needs to be accurately understood, andsatisfactory. However, I feel that the number of turns, speed, etc. should beefforts for improvement need to be developed.

checked daily during after work inspections, based on data recorded by thetachograph, to find out specifically how superior drivers operate. This information should be shared between offices rather than kept individually, andtime should be taken now and then to compliment drivers on their actions.
◉Regarding efforts to reduce environmental strain (page 30), theworld's largest implementation of natural gas trucks, participation in
the solar power generation business, and a 2.8% reduction in CO2emissions compared to the previous year for Sagawa Express are satisfactory. However, in the near future I expect to see specific promotion plans formulated based on mid-term objectives, and a detailed
disclosure of information regarding the primary topics, including CO2.

◉

Regarding the development and utilization of human resources

Hideto Kawakita
Representative of IIHOE[International Institute for Human, Organization and the Earth](pages 25-26), I'm quite impressed with the Group's formulation of ahuman resource system and vision, and the advancement of female
employees into new fields such as maintenance work. However, inthe near future I expect to see plans that don't stop at women, but

IIHOE: An NPO founded in 1994 on the principle of "democratic, har-include foreigners, the disabled, and others which can maximize themonious development for all life on earth." Activities are mainly related

potential of a diverse range of people. A specific, mid-term human

to management support for citizen groups and social workers, but aportfolio with goals set several years in the future, such as by 2020,

lot of effort is put into CSR support for large corporations as well.

would be a satisfactory way of advancing the necessary measures.

http://blog.canpan.info/iihoe/ (Japanese only)35

SG HOLDINGS GROUP Corporate Social Responsibility Report 2013

CSR Report 2013

Communication Through Websites

Corporate Social Responsibility Report

SG Holdings Group uses various means of communication, including websites, to relay information to our stakeholders,regarding CSR activities, information from other companies, and business activities.

SG Holdings Group Business URL

CSR (Corporate Social Responsibility)
http://www.sg-hldgs.co.jp/csr/

Financial Results
http://www.sg-hldgs.co.jp/company/
financial_results.html■ SG Fielder Co., Ltd.
http://www.sg-fielder.co.jp/■ SG Moving Co., Ltd.
http://www.sagawa-mov.co.jp/■ Nouvelle Golf Club Co., Ltd.
http://www.nouvelle-gc.co.jp/■ World Supply Co., Ltd.

■ Sagawa Forestry Co., Ltd.
http://www.sg-hldgs.co.jp/sagawa-fore/

http://www.world-supply.co.jp/■ Sagawa Global Logistics Co., Ltd.
http://www.sagawa-logi.com/

SG Holdings Corporate Website
http://www.sg-hldgs.co.jp

Sagawa Express Official Application■ Sagawa Express Co., Ltd.
http://www.sagawa-exp.co.jp/■ SGH Global Japan Co., Ltd.
http://www.sgh-globalj.com/■ Sagawa Advance Co., Ltd.
http://sg-advance.co.jp/■ SG Motors Co., Ltd.
http://www.sg-motors.co.jp/■ SG Systems Co., Ltd.
http://www.sg-systems.co.jp/■ Sagawa Financial Co., Ltd.
http://www.sg-financial.co.jp/■ SG Realty Co., Ltd.
http://www.sg-realty.co.jp

68 Tsunoda-cho, Kamitoba, Minami-ku, Kyoto, Japan
601-8104
Phone: +81-75-671-8600
http://www.sg-hldgs.co.jp
Title - CSR Report 2013
Issue date - June 2013
Next issue planned for - June 2014 printing
Printed by - Sagawa Printing Co., Ltd.