ME SSA GE FR O M T H E P R E S I D E N T

Lead a Circular Economy
The drive to achieve carbon neutrality by 2050 has begun prompting a dramatic shift in the concept of“manufacturing.”
In addition to making good products, the recycling of used products after sale is becoming an integral part ofmanufacturing. This is because reusing the materials contained in products can greatly reduce greenhousegas emissions.
In line with this trend, we have set “Lead a circular economy” as our strategic concept and will concentrate
our efforts on two areas: “CE(circular economy) supporting manufacturing” and “CE supporting localcommunities.”
Under the first category, “CE supporting manufacturing,” we will collect and store used products across awide region, conduct sophisticated recycling activities, make environmental data visible, and take the leadover our competitors in bringing specific examples to market.
In the category of “CE supporting local communities,” we are essentially focusing on creating a circular
economy from urban waste. We aim to engage closely with local government waste management programs toachieve operations that are efficient and highly environmentally impactful. Although these efforts will require aslightly longer timeframe, we will actively pursue this area and make it part of our business domain, as webelieve this area has significant social importance.
The company’s main focus is on resolving challenges toward achieving a circular society, so our purpose andbusiness growth are aligned with contributing to society. As social contribution is an extension of our business
aims, I feel no hesitation in devoting myself wholeheartedly to the growth of the ENVIPRO Group.
Naturally, I will do my utomost to share the joy of this challenge among our employees.
“Let us live and be happy today.” (Dr. Koh Hirasawa)

Forward, MYWAY forward.
President, Representative Director

Tomikazu SanoENVIPRO Group Sustainability Report 2023

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TOP INTERVIEW

From the bottom of my heart,
I was convinced that our business growth would contribute to society.
Thoughts on Our Strategic Concept
First, I would like to talk about the strategic concept of “Lead a circular economy,” which we set forth in ourmedium-term management plan. Although we already support society through our presence in the recycling
industry, we intentionally chose the word “leading” because we firmly believe that the company’s growth is in sync
with social contribution. This conviction has eliminated any hesitation we might have had about driving the growthof our business.
Viewing this strategic concept as a coin, one side is “CE supporting manufacturing” and the other is “CE supporting
local communities.”

CE Supporting Manufacturing

CE Supporting Local Communities

In a carbon-neutral world, manufacturing companies will be expected to take responsibility for the entire supply
chain, including sourcing, production, and the collection and recycling of products after use. In the future, we
anticipate that global manufacturers worth trillions of yen will internalize the concept of a circular economy.
However, many companies still rely on outsourcing their recycling to entities like the ENVIPRO Group. This presents
a new role that ENVIPRO Group should play.
The key lies in establishing a recycling system. While Japan has made some progress in constructing what might
be termed logistics “arteries,” the “veins” of logistics remain far from being well-developed. Creating a system forrecycling is an urgent task, and we aspire to take the lead by establishing industry precedents. At the same time, inorder to “Lead a circular economy,” we need to go beyond the traditional concepts of recycling and waste
management and transform ourselves into a producer of raw materials.
If we can pave the way to build momentum in the industry as a whole, the Japanese economy will surely change asa result.

It would be no overstatement to say that our efforts to create “CE supporting local communities” have the ultimate
goal of building circular economy for urban waste. Currently, urban waste in Japan is sorted according to variouslaws, such as the Act on the Promotion of Sorted Collection and Recycling of Containers and the Packaging and thePlastic Resource Circulation Act.
However, waste treatment is largely limited to simple incineration or the utilization of waste in power generation.
To address this situation, we are collaborating with incinerator manufacturers and engaging in demonstration
projects to chemically convert plastic waste into oil. Our ultimate goal is to create an urban oil field and produce oilfrom municipal waste. Achieving this goal will take some time–maybe as much as 10 years.
Additionally, there are some things that ENVIPRO Group cannot accomplish on its own. That being said, I think therole of the private sector will be crucial, and I sense that momentum is already building.
As an immediate action, we have launched an initiative to accept general waste throughout the year at SYN ECO
Plaza Azumino in the city of Azumino, Nagano Prefecture. We aim to gradually increase our role, beginning withminor involvement in local waste management policies.

ENVIPRO Group Sustainability Report 2023

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TOP INTERVIEWindustry is one such example. The financial industry is becoming involved from the planning stages of new plants,
allowing them to obtain early-stage information about the dismantling of old plants. This is a significant departurefrom the traditional style of waiting to purchase scrap until dismantling starts. Collaboration allows operators tocapture dismantling-related information from several years ago. The financial industry is currently exploring
potentially favorable mechanisms, and our Group companies responsible for this business have already shown
remarkable growth.

Business Withdrawal Spawns the Logistics Agency Business

Making Nitto Kako a Subsidiary and Entering the Polymer Business
A key element of our effort to lead a circular economy is our newly launched polymer business, which was madepossible through the acquisition of Nitto Kako Co., Ltd. This company manufactures products from natural andsynthetic rubber. Nitto Kako has robust quality assurance standards and solid capabilities as a pure manufacturer.
Meanwhile, Group company Toyo Rubber Chip Co., Ltd., produces artificial turf infills and mats by grinding rubber
derived from waste materials. We believe that the synergy between these two companies will be vital to achieving acircular economy in the rubber industry. The tire industry already has a collection system in place; the challenge
lies in creating an outlet for the recycled materials. We are committed to rubber-to-rubber material recycling using
cryogenic crushing technology, with the ultimate goal of achieving tire-to-tire recycling. We aim to demonstrate theavailability of raw materials that meet the quality standards for regeneration as tires and further develop
applications to create a profitable business. We have high expectations for Nitto Kako being the driving force inachieving these goals.

Financial Collaboration Opens Up Possibilities for the Dismantling Industry
Dismantling is one area of business we are currently focusing on that is relatively impervious to market fluctuations.
By undertaking dismantling projects, we can generate profits nationwide from the early stages of waste collection.
Furthermore, due to collaboration with the financial industry, the very nature of the dismantling industry is changingsignificantly. As background, Japan’s Banking Act is being revised, and an expanded scope of financial services isencouraging the exploration of various businesses within the context of the circular economy. The dismantling

In the midst of rapid changes, we decided to withdraw from certain business areas. One area—the sale of usedcars and parts—had been handled by 3WM Co., Ltd. Although our presence in the United Arab Emirates was asignificant strength, the entry of competitors from other countries reduced this advantage, and profitability became
an issue. However, just as one tree decays, new sprouts also emerge, such as Cyterrace Co., Ltd., a logistics
agent. We are accumulating achievements by having employees who were in charge of logistics at 3WM
demonstrate their skills in a new field. The words of Yelü Chucai, who was once an adviser to Kublai Khan, come tomind: “Preventing one harm is better than creating one benefit” We are once again realizing the importance ofscrap and build.

Build a Platform Filled with Good-Quality Energy
Lastly, I would like to talk about the most important asset for the Group, which is our human capital. In ourmedium-term management plan, we have set the goal of “creating 100 business promoters” and we aim to “builda platform filled with good-quality energy where employees can work energetically.” The revitalization of ourbusiness requires an organization that is autonomous and filled with creativity. To achieve this, we want to foster aculture where individuals proactively seek out various opportunities and challenges while accepting andencouraging a spirit of taking on new challenges. Furthermore, our expansion into new fields such as lithium-ion
batteries has brought us opportunities to meet diverse experts and has had a positive impact on our operations. I
hope that each of us will be motivated to grow, stimulated by changes in the environment and new interactions.
As a foundation for nurturing our employees, we will strive to create an organization that is more conducive to workand provides a fulfilling work experience. While the term “human capital investment” may sound nice, we need togo beyond the terminology and ensure employees are rewarded properly for their efforts. Furthermore, to create aworkplace environment where diverse individuals can thrive, we need to consider the introduction of newtechnologies and facilities. I recognize the need to manage the company to ensure it has the right attitude toundertake these initiatives and aim for our solid growth as a group.