SBS GROUP

About This Report

Philosophy andValue Creation

01
03

About This Report
Our Management Philosophy andits Implementation

07
11
13
15

Editorial Policy

KEY DEVELOPMENTS

The SBS Group, as a mega-venture that is “transforming the world

TOPICS

of logistics,” publishes an Integrated Report to inform stakeholders

Key Challenges
The SBS Group’s Value Creation Processinterested in the Group’s short, medium and long-term value creation, covering its business activities as well as its sustainability
management, its business plan and its progress, accomplishments, and future challenges. To ensure the accuracy and reliabili-

Business andStrategy

Sustainability

19
25
27
31

Commitment from Top Management

33
37
41
45

Rolling out 3PL

49

For a Sustainable WorldThe SBS Group’s Three-Year Management Plan

that it can be easily read even without prior knowledge of the SBSGroup.

Business Overview and Financial Status

On the SBS Group website, we disclose comprehensive IR in-

External Environment and Mid-to-Long-Term
Management Strategy

formation and general company information in addition to sustainability information not listed in this report.
https://www.sbs-group.co.jp

Controlling Management Risks

Reporting Process

Climate Change Risk Structure and Initiatives

This report is structured around the topics that have a significant

SDGs at the SBS GroupENVIRONMENT

53
55
56
57

ty of information, the report is designed to be simple and clear so

Review of Fiscal 2022 Initiatives

impact on the SBS Group’s ability to create value in the short-,
mid- and long-term. The identification and weighting of these
topics is conducted carefully as the starting point in the annual reporting cycle, and serves as the basis for the information reported. After being combined organically with related information, theprepared report undergoes review by management and is thenprovided to stakeholders in printed and electronic form.

Mid-to-Long-Term Environmental Plan
Action Plan
Toward the Decarbonization of Logistics

Identification andWeighting of Key
Challenges

SAFETY

59
61
62

Review of Fiscal 2022 Initiatives
Education and Awareness-Raising, Accident
Prevention
Safe Driving Management

Dialogue with
Internal andExternal
Stakeholders

Collection andIntegration ofRelatedInformation

SOCIAL

63
64
65
67

Data Section

01

Review of Fiscal 2022 Initiatives
Review by
Management

Engagement with Society and Stakeholders
The SBS Groups Human Resources Strategy
Social Contribution Activities

GOVERNANCE

Reporting Scope

69
70
71
73
76

■21 Domestic Subsidiaries

Basic Approach
Corporate Governance System
List of Directors, Executive Officers

SBS Toshiba Logistics Corporation / TL Logi Service Co., Ltd. /SBS Ricoh Logistics System Co., Ltd. / SBS San-Ai Logistics
Co., Ltd./ SBS Global Network Co., Ltd. / SBS Logicom Co.,

Ensuring EffectivenessLtd. / SBS Logicom Kanto Co., Ltd./ SBS Freight Service Co.,

Maintaining Constructive Ties with
Shareholders and Stakeholders

Support Co., Ltd. / SBS Zentsu Co., Ltd. / SBS Furukawa Lo-

78
79
80

Compliance

81
83
85
87
92

Financial and Business Information

Risk Management
Information Security

ESG Data
ESG-related Policies
Major Group Companies
Corporate Profile and Stock Information

Ltd. / SBS Flec Co., Ltd. / SBS Flecnet Co., Ltd. / SBS Sokuhai
gistics Co., Ltd. / SBS Staff Co., Ltd. / SBS Finance Co., Ltd. /Marketing Partner, Inc. / SBS Asset Management Co., Ltd. /L-MAX Co., Ltd. / Marketing Partner, Inc. / SBS Driving SchoolCo., Ltd.
■Public Interest Incorporated Foundation
SBS Kamata Foundation

Reporting Period
Fiscal 2022 (January to December 2022)

Topics in the Integrated Report
Changes to the structure of the logistics market We analyze rapid changes to the structure of the logistics market, so that a
strategic response can be facilitated
M&A and group synergy

M&A activities as the core of our growth strategy, and the processes tomaximize those effects

3PL

Strengthening the expanding services to comprehensively handle andoptimize corporate logistics operations

Logistics facility development

Systematic expansion of floor space as a core of increasing logistics
infrastructure and the foundation of 3PL

Technology

Strategically utilizing LT* and IT to link value creation with improved
competitiveness* Logistics Technology

Quality and safety

Ensuring the quality and safety of transportation and service that form thebasis of our business activities

Human resources

Securing and developing a diverse range of human resources supporting the
growth of the SBS Group and Japanese logistics

Working styles and productivity

Taking on the challenge of new working styles and pursuing ongoing
improvements to business productivity

Energy and climate change

Addressing the energy demand-supply gap and climate change risks from along-term perspective

Crisis management

Preparedness for natural disasters and other crises for management

Relationship with society

Coexistence rooted in dialogue with a diverse range of stakeholders

Governance

Ensuring corporate governance systems that represent the basis of value
creation

SBS GROUP
Integrated report 2023

02

Our Management Philosophy and its Implementation

The Group Slogan, “For Your Dreams,” expresses sentiments the
SBS Group has continually pursued since its founding - the importance of chasing dreams, and how doing so shapes the future. We
conduct business to realize the dreams of all stakeholders andstrive to enhance corporate value.

03

PHILOSOPHY & VISIONA Mega Venture Growing on the Strength of Logistics × IT
Aiming to solidify our top-tier position in the industry and respond to all manner ofcustomer needs while becoming a trusted company that coexists with society

VISION

1. Contributing to customer value creation through the provision of services
2. Emphasizing ESG as a provider of social infrastructure to contribute to all stakeholders
3. Ongoing and performance-linked return of profits

PHILOSOPHY

We provide services to achieve client satisfaction, to meet shareholders’ expectations, and to be a company caring of its employees.
Long-term prosperity is rooted in paying the necessary attention to people
and in the enthusiasm of our employees.
Social responsibility is essential to corporate growth. Harmony within thecommunity, efforts to make those around us happy, and contribution to society far and wide, is crucial.

SBS GROUP
Integrated report 2023

04

Our Management Philosophy and its Implementation

SBS Group Business Overview

Transporting all manner of things safely, securely and in an
optimal environment
The SBS Group has organically developed its General Logistics, Property Management and Logistics Support businesses.

General Logistics
Business

Truck transportation / rail transportation / low temperature logistics / logistics center operation /international logistics / distribution processing / same-day delivery for corporations / home delivery(for individuals) / company relocation and individual relocation / on-site logistics / 3PL consulting

Logistics Support
Business

Marketing Business / Pet Wellness Business / Insurance and Leasing / Environmental Business /Personnel Support

Property Management
Business

Rent Business / Development BusinessHighlights of our Management Philosophy Implementation (Fiscal 2022)
Customers

Total Distance Driven

Consolidated Net Sales

132,739,423
455.4

billion yen

Shareholders

ROE

ROA

Dividendper Share05

km

Employees

17.9
7.5
61

%

Training
Conducted%

Actual training
participantsyen

39
10,658

Subjects

Society and the Environment

Number of Business Sites
with G-Mark Certification(Certification Rate)

Logistics Research Grants

Scholarships for Students
Receiving Social Care

Investment in
the Environment

Environmental Efficiency(CO₂ emissions per unit of sales)

Renewable Energy
Generating Capacity

Waste Processing Logistics
Handling Volume

177
7
86
1,972
26.312
19,987
9,194

business sites (89.4%)

million yent(46% improvement overthe past five years)

kWtSustainable Development

SBS GROUP
Integrated report 2023

06

KEY DEVELOPMENTS

Taking logistics to the next stage withMastering automation, labor savingand space saving
The Yokohama Kanazawa Logistics Center which
opened in October 2021 is positioned as a hub of
cutting-edge 3PL hub of logistics DX. With a development concept of “automation, labor savingand space saving,” the center was designed anddeveloped with the latest-and-greatest systems
and material handling facilities using Logistics
Technology (LT) and Information Technology (IT).
In addition to using two AutoStore units, a robotic
storage system with at least three times the storage capacity compared with conventional storage
equipment, the digital picking system has beenenhanced, and automation equipment including
automated packing machines and shuttle racks
have been installed throughout the facility. In addition, through integration with support systems thatutilize AI and big data, automation and laborsaving have been pursued, while storage efficiency has been improved.

Utilization of robots also being pursued atother sites■Saitama Logistics Center
Installation of shelf-carrying robots that reduce theamount of walking done by picking staff■Kanto Logistics Center
Robot sorters are used to perform sorting work forlast-mile delivery, building a structure that can adapt
to fluctuating demand.
■Yokohama Logistics Center
The introduction of robots into logistics field operations has been accelerated, including the utilizationof automated guided vehicles (AGV) in logistics
work for electronic components.

07

DX

X

SBS GROUP
Integrated report 2023

08

KEY DEVELOPMENTS

09

Pursuing the nextLT

Establishment of the LT Lab to improve the accuracy of advanced LT
installation and quickly stabilize its
operation.
On December 1, 2022, SBS Holdings opened the
LT Lab, a verification facility inside the Saitama Logistics Center operated by SBS Ricoh Logistics
that aims to improve accuracy in the introductionof advanced logistics technology (LT) and quickly
stabilize its operation.
The LT Planning Department takes a central role
as a gathering of LT specialist from SBS Group
companies, in evaluating the functions of various
solutions, collecting demonstration data and assessing the effectiveness of warehouse management systems (WMS) and integrated solutions, andproviding feedback to manufacturers in the form ofsuggestions for improvements and modifications.
From January 2023, the LT Lab has set up an environment enabling existing and new customers
who are considering the introduction of our robotic solutions to feed their product order information
into our actual robot solutions.

Robot solution to be employed at the Ichinomiya Logistics Center(SBS Ricoh Logistics, scheduled to begin operation in September
2023)

Solution for dedicated EC centers to be established within the Seto
Noda Logistics Center (Provisional name; SBS Asset Management,scheduled to begin operation in January 2024)

SBS GROUP
Integrated report 2023

10

TOPICSJSBS GroupanBecoming an Official Partner of
Ricoh Black Rams Tokyo
The SBS Group became an official partner of Ricoh
Black Rams Tokyo, a team in the new Japan Rugby
League One that launched in January 2022. The SBSGroup logo appears under the numbers of the official
match jerseys worn by the players.

M

ar

SBS Holdings

Decision to Invest in AEON
NEXT Delivery Co., Ltd.
SBS Holdings has decided to invest in AEON
NEXT Delivery Co., Ltd., which handles logistics
services for AEON’s next-generation online
supermarket business. The SBS Group will
provide its wealth of knowledge concerning
logistics operations, while deepening andexpanding its business with the AEON Group.

M -A
ar

M

ar

SBS Holdings

Opening of LT Showroom at the
New Headquarters
A showroom displaying the various logistics technologies (LT) actually being operated at SBSGroup sites was opened at the Group’s new head
office.

SBS Grouppr

Consolidation of the SBS Group Head Office and Redesign of Uniforms
The Group’s head office functions were relocated from Taihei in Sumida Ward, Tokyo and consolidatedin Nishi-Shinjuku in Shinjuku Ward, with six of the Group companies with sites in the Kansai district
consolidating head office functions in Yodogawa Ward, Osaka. The uniforms worn by Group
employees were also redesigned. Through these efforts, the SBS Group will work to accelerate its
sense of unity as a Group and enhance its collective strength.

J -J
un

ul

SBS Flec

Fire at Ami Logistics Center 2
On June 30, a fire broke out at Ami Logistics Center 2, which is operated by SBS Flec. The incident inconvenienced
customers and local residents. We take this seriously and will make every effort to prevent a recurrence.

11

A

SBS Toshiba Logistics

ugAwarded at the Japan Packaging
Contest for the 20th Consecutive YearO

SBS Zentsu

ct

In the 2022 Japan Packaging Contest organizedby the Japan Packaging Institute, SBS Toshiba
Logistics won three awards, the Chairman of Japan
External Trade Organization (JETRO) Award in theJapan Star award category, which is the mostprestigious award category, and two Industrial
Packaging Awards in the Packaging CategoryAward, making the company an award winner for
20 consecutive years.

Nov

SBS Holdings

Endorsement of Activities to Promote Women’s Active Participationin Shintomi, Miyazaki Prefecture

SBS Zentsu endorsed the “White Logistics” movement advocated by the Ministry of Land, Infrastructure, Transport and Tourism, Ministry of
Economy, Trade and Industry and Ministry of Agriculture, Forestry and Fishers, submitting a declaration of voluntary action for the realization of sustainable logistics on October 1, 2022.

Nov

Viamaterras Miyazaki, a female soccer club in Miyazaki,
is vying to join Japan’s Women Empowerment (WE)
League, a female professional soccer league. The townof Shintomi employs the team’s players as government
workers to create a supportive environment wherefemale players can pursue dual career paths in soccer
and work. SBS Holdings endorsed and supported thetowns activities through a corporate version of thehometown tax.

N

ov

Declaration of Voluntary Action for the
Realization of Sustainable Logistics

SBS Group

Release of new Commercial : Logistics in the
Metaverse / The Future of Logistics
The new commercial depicts the logistic services handled by the
SBS Group in a future society in which the metaverse and robots area part of everyday life.

SBS Group

5th SBS Group Driver Contest is
Held
The SBS Group held its Groupwide driving contest, which is
aimed at achieving an accident-free society and becoming an
accident-free logistics company.
The contest was held for the firsttime in three years, with the 4th
driving contest having been held
before the COVID-19 pandemic.

D

ec

SBS Holdings

Opening of the LTLab

The LT Lab was opened in
Koshigaya, Saitama Prefecture. This dedicated facility
will evacuate the functions ofvarious solutions, as well as
integrate and verify warehouse management systems(WMS) and multiple solutions,with the aim of improving theaccuracy of advanced LT installation and quickly stabilizing its operation.

TOPICS
2022
SBS GROUP
Integrated report 2023

12

Key Challenges

Key challenges (materiality) in sustainability management represent “importance for the sustainability of
our own business model.” Demonstrating this practice (of identifying key challenges, pursuing initiatives
to address them and engaging in disclosures) offers extremely useful insight to stakeholders in examining
the mid- and long-term sustainability of a company. We have summarized the challenges that impact us(from the perspective of risks and opportunities) in carrying out business activities based on our value asa corporation (management philosophy) and business model. Note that we will reassess these key challenges in terms of their ratings of importance to stakeholders (investor ratings, assessment body metrics,etc.) and their ratings of importance in the Group (priority matters for business strategy, actual initiatives,etc.) and continue to review material matters.

SBS Next Stage 2025
Enhancement ofCorporate Value

Realization of a
Sustainable SocietyManagement
Strategies

Sustainability Management
Key Challenges of the SBS Group
SafetyEnvironment

Human
resources

Governance

To date, the SBS Group has strived to achieve sustainable growth while solving social issues. However,
the environment surrounding companies has undergone a major shift, and in light of the increasing importance for companies to balance their efforts to create a sustainable society through solutions to social
issues with sustainable enhancement to corporate value, we have redefined our key challenges (materiality) and established a Sustainability Policy that aims to illustrate the values that are important to employees and our goals. In addition, in our medium-term management plan SBS Next Stage 2025, we havedeclared improved governance supporting sustainability management and strengthened action on key
challenges (materiality) as priority measures in an effort to integrate our management strategy with sustainability. Going forward, we will continue to practice sustainability management, aiming to improve corporate value while advancing sustainable society.

13

Safety

To advance logistics as a business that supports social infrastructure, safety initiatives aimed
at zero accidents are our highest priority.
Key material issues: vehicle accidents, occupational accidents, facility fires, cyber attacks, natural
disasters
Key initiatives: Promotion of safety education and training initiatives, reduced rate of accidents involving business vehicles
Major KPIs: Accident rate per vehicle / occupational accident rate per employee
Major risks: Loss of credibility, interference with business activities, occupational accidents,
impact on funding
Major opportunities: Increased trust, improved external reputation, new business opportunities

Environment environmental issues, a global challenge, is a matter of essential importance.

To coexist with society and continue to be a company that is trusted by society, taking action

Key material issues: climate change, carbon reduction, resource recycling, air pollution, environmental conservation, regulatory compliance, improved fuel efficiency
Key initiatives: reducing CO2 emissions, reducing NOx and PM values in exhaust gases, reducing
water usage, initiatives to create renewable energy, initiatives to introduce next-generation vehicles
Major KPIs: Scope 1 and Scope 2 CO2 emission reduction rate per unit of net sales, introductionof next-generation vehicles, NOx and PM values in exhaust gases (kg), improved logistics efficiency through the utilization of logistics DX (LT×IT)
Major risks: Growing costs of compliance, loss of social reputation, stoppage of business activities, impact on funding
Major opportunities: Curbed costs due to fuel improvements, differentiation through innovativeness

Human
resources

Human resources are tasked with carrying out business activities, including safety andenvironmental initiatives.
The development of human resources is an important factor in boosting competitiveness.
Key material issues: Securing and retention of human resources, human resource development,
workstyle innovation, health and productivity management, diversity
Key initiatives: Initiatives to improve employee skills and support their career development, initiatives aimed at enhancing employee work-life balance, initiative to develop an environment promoting the active participation of women
Major KPIs: Percentage of managerial positions filled by women / consideration and implementation of improvements to systems supporting the active participation of women / annual leave
usage rate / childcare leave usage rate by eligible male employees
Major risks: Decline in competitiveness, lost business opportunities
Major opportunities: New value creation due to workforce diversity, promotion of innovation, newbusiness opportunities

Related SDGs
For the major KPIs for materiality, the SBS Group has identified the following KPIs that have a particularly strong
association with multiple of the 17 goals and 169 targets that make up the SDGs goals and targets, andpursues initiatives in relation to them.

Assessing Materiality
Regarding the assessment of materiality, we will reassess these key challenges in terms of their ratings ofimportance to stakeholders (investor ratings, assessment body metrics, etc.) and their ratings of importance in
the Group (priority matters for business strategy, actual initiatives, etc.) and continue to review material matters.

SBS GROUP
Integrated report 2023

14

The SBS Group’s Value Creation Process

The SBS Group sees capital that will support its
business activities as a “3PL corporate grouppossessing omnidirectional logistics functions”
from a broad perspective. We promote our

INPUTS Capital utilized for corporate activities
Capitalbusiness activities and ESG in an integrated

Management Approach

We seek to maintain an equilibrium between

fashion in an effort to effectively utilize financial

active investment activities and ensuring finan-and non-financial capital.

cial health. Accordingly, a target shareholders’equity ratio of 30% has been set. In terms ofshareholder return, the Company maintains

Financial Capital

continuous dividends and makes every effort toraise dividend levels in line with business performance.

We are committed to developing comprehensive logistics infrastructure including logistics fa-

Capital for theProvision ofServices

cilities, vehicles, equipment, information systems and service sites, at a scale and quality
level that adequately satisfies our need to grow.

To secure and develop talented human resources, the SBS Group makes improvements
to its personnel systems, provides training andeducation to all employees, and develops a

Human and
Organizational
Capitalworkplace that offers job fulfillment. The SBSGroup also enhances the operational quality ofthe organization by developing and operating
management systems.

We will further enhance our wide-ranging logistics
service operational capabilities while systematicallyIntellectual
Capitalaccumulating, sharing and developing knowledge
leading to solutions to customer issues.

The SBS Group gains an understanding ofvaried expectations and demands through dialogue with stakeholders, reflects that insight inits corporate activities, and strives to work inharmony with society. We make particular ef-

Social Capitalforts with respect to ensuring safety, the mostimportant social demand for a logistics business operator. We also contribute to society
and local communities as a corporate citizen.

The SBS Group pursues efforts to continually
reduce its environmental impact from a medium-to-long-term perspective, positioning CO2
emission reductions, the promotion of resource

Natural Capital

recycling and the preservation of natural resources as key issues.

15Change

Indicators

2018

2019

2020

2021

2022

Total assets (million yen)

171,796

180,047

254,550

277,197

296,898

Net assets (million yen)

48,17354,077

68,14680,707

92,172

Shareholders’ equity ratio (%)

23.1

25.1

19.9

21.9

23.7

Net DE ratio (times)

1.50

1.26

1.44

1.23

1.01

Number of shareholders

2,834

2,878

3,664

4,501

4,247

Number of business sites

531

655

716

674

678

-

386

401

412

504

Number of vehicles

4,497

4,570

4,405

4,884

5,080

Number of forklifts

1,382

1,436

1,369

1,488

2,154

Investment in facilities and equipment(million yen)

11,607

11,71011,507

14,501

17,859Number of employees*

19,017

19,37923,27023,95023,773

Actual training participants

5,095

7,173

6,824

8,966

10,658

Number of companies with ISO 9001
(quality) certification

5

5

6

7

7

Number of companies with ISO14001(environmental) certification

7

7

8

9

9

Number of companies with ISO 27001(information security) certification

4

4

5

5

5

Group-average fuel efficiency (km/L)

4.93

4.93

5.01

5.03

5.05

Number of employees taking eco-driving
training (cumulative total)

1,500

1,570

1,570

1,617

1,662

2

2

4

7

8

153

162

167

169

177

Digital / analog tachographs

3,554

3,692

3,692

Dashcams

2,937

3,752

3,752

Rear-view cameras

3,589

2,407

2,407

Logistics research grants

9

6

6

4

7

Scholarships for students receiving social care

34

57

74

76

86

2.23

2.41

2.92

Number of warehouses(number of company-owned and leased buildings)

Awards and commendations
Number of business sites with G-mark certification
Number ofvehiclesequipped withdriving support
equipment

Food bank support expenses (million yen)
Environmental Efficiency(CO2 emissions per unit of sales)

47.77

38.09

40.77

28.23

26.312

Quantity of renewable energy delivered (kWh)11,017

11,017

11,017

11,146

12,734

Waste processing logistics handling volume (t)10,943

8,817

9,371

7,579

9,195

Investment in the environment (million yen)

3,854

3,202

4,444

3,584

1,972

SBS GROUP
Integrated report 2023

16

* All figures are the total number of employees and differ from the figures listed in securities reports.

The SBS Group’s Value Creation Process

PHILOSOPHY & VISION
Philosophy & vision

Working from its management principle andmanagement vision as a foundation, the SBSGroup expands its business activities with logistics at the core while working to enhance ESG
across the broad aspects those activities entail.

BUSINESSESG

PHILOSOPHY & VISION

17

OUTCOMES
Medium-to-long-term value creation and capital adequacy

Achieve net sales of 500 billion yen at
Financial
CapitalThe SBS Group continues to implement aunique business model that has enabled
growth while balancing logistics operations, M&A activities and the developmentof logistics facilities. At the same time, weenhance competitiveness by actively investing in LT and IT while accelerating collaboration with other industries, and aim toreach the top tier of the logistics industry.
Rolling out 3PL in every direction
Upgrading the delivery network

an early stage and look further ahead

Logistics systems that respond to
Capital for theProvision ofServicesthe evolving needs of society

LT×IT
Increasing logistics facility floorarea
M&A activities and pursing
synergy
Maximizing the capabilities of each
To fulfill our social responsibility as a logistics company, we have set up promotional organizations (Group meetings) to address important themes across four fields,
namely environment, safety, social andgovernance. Through this framework wepromote activities that span the Groupand work to share information.

Human and
Organizational
Capitalhuman resource and Group synergy

Consideration of the environment

Accumulating and utilizing

Ensuring safety

technologies and expertise that

Social engagement
Sound management

Intellectual
Capitalwill support future 3PL/4PL
business models

Building trust and cooperative
relationships with a wide range ofSocial Capitalstakeholders

Roadmap for achieving the 2°C
target for climate change
Natural Capital

SBS GROUP
Integrated report 2023

18

Commitment from Top Management

Aiming to achieve net
sales of one trillion yen asa mega venture paving
the way for the future oflogistics
Masahiko Kamata, President, SBS Group

Our Growth History(100 million yen)

5,000

4,000

3,000

2,000

1,000

1987

19

1995

2000

2005

2010

2015

2022

0

Continuing to embrace an intrepid venture spirit
Since its founding in 1987, the SBS Group has tirelessly taken
on challenges and achieved growth as a result. Our indominableventure spirit has continued to be at the core of these endeavors. With a number of logistics handling the logistics functions ofnational brands joining the SBS Group, we have evolved into diverse and hybrid group of companies, but that DNA continues tothrive. In February 2023, we defined our purpose as “a mega
venture growing on the strength of logistics technology (LT) × IT.”As a corporate group with a wide range of logistics functions
spread globally, the ability to propose innovative solutions and an
unrivaled sense of speed, we will shape the future of logistics.

As a result of this market environment and the Group’s efforts, inthe fiscal year ended December 31, 2022, the Group achieved
record net sales and income for the fifth consecutive year. In thefiscal year ending December 31, 2023, we project moderate
growth, with net sales of 457 billion yen and operating income of
22.8 billion yen. This is based on our plan to increase sales andsecure income exceeding an expected decline in overseas transportation rates that will continue to be a factor in reducing revenues.

Growth strategies aimed at reaching the top tierof the logistics industry

In FY2022, we saw signs of a gradual recovery of economic activity in Japan and overseas, despite facing a resurgence in
COVID-19 cases, sharply rising resource and fuel prices andfluctuating exchange rates, among other factors. Electronic devices and electronic commerce (EC) related logistics demand
was solid. Meanwhile, there was a sharp rise in marine and air
freight charges.
The SBS has focused on efforts to secure 3PL business in its corelogistics business and capture logistics demand related to online
sales while placing top priority on preventing infections and ensuring safety among customers, business partners and employees.
Additionally, under our growth strategy in which M&A actions playa key part, we have demonstrated synergy between SBS Group
companies to further enhance the Group’s lineup of services andput systems in place to support the logistics needs of society inpowerful terms.

The SBS Group’s growth strategies aimed at reaching the top tierof the logistics industry combine a strategy to achieve non-consecutive growth with a strategy to accelerate autonomous (organic) growth.
The engines of non-consecutive growth are M&A activities to add
new members to the Group and the post-merger integration (PMI)
activities for mutual collaboration thereafter. The SBS Group’s approach is to view the process up to this point as a series of steps,
and to plan and implement its next steps from a medium- andlong-term perspective.
We have also promoted autonomous growth through the use oftechnology, development of logistics facilities and by pursuingGroup synergy.
The SBS Group has promoted two approaches to growth in an
integrated fashion, based on a unique business model thatplaces 3PL at its core. For instance, by planning and implementing LT×IT initiatives in ways that span the entire Group, we
ensure that PMI efforts following key M&A actions proceed naturally. We execute our growth strategies in an integrated mannerand pursue sustainable growth.

Fiscal 2022 Results (Consolidated)

SBS Group Growth Strategy

Posting record business performance in fiveconsecutive periods

Net Sales

Operating Income

Ordinary Income

455.4
21.8
21.4
11.7
295.3917.9
7.5

Achieve non-consecutive growthbillion yen (+12.9%)

billion yen(+5.5%)

billion yen(+4.5%)Net Income Attributableto Owners of Parent

billion yen(+8.7%)

EPS(earnings per share)yen(+8.7%)%(-1.5%)%(-0.2%)

ROE(return on equity)
ROA(return on assets)

Logistics subsidiaries
Small-sized M&A activities
Investment projects

System breakaway and integration
Consolidation of head office
functionsCompany name and VI changes

M&A

PMI

Pursuing economies ofscale and enhanced
functions
LT×IT
Logistics Facilities
Proactive utilization of LT and IT
Development and securitizationof logistics facilities

Group Synergy
Organization-spanningbusiness development
MarketingAccelerate autonomous growth

SBS GROUP
Integrated report 2023

20

Commitment from Top Management

Non-consecutive growth through M&A and PMI
activities
Since it was publicly listed in 2003, the SBS Group has implemented M&A activities as the core of its growth strategy in simple
and honest fashion. Over the twenty years since, the amounts invested in M&As have reached a cumulative 83 billion yen, with net
sales jumping by 24 times and operating income by 56 times overthe same period.
Moreover we have among Japan’s best track records with
post-merger integration (PMI), which is a deciding factor in the
success or failure of an M&A action. Embracing the philosophy ofvaluing people, we engage in dialogue with front-line staff and top
management of the companies that join the SBS Group, working
with them to thoroughly explore what issues they face and effectreforms. By consolidating head office functions, we increase thespeed of operations while solving issues on a joint basis. It is also
fundamental for us to maintain an extensive force of sales development personnel in order to encourage new customer acquisition. These approaches have been established by the SBSGroup over the years, through the key M&A actions implemented
relatively early on, and the various initiatives we have pursued inlater years.
While the acquisition of SBS Ricoh Logistics in FY2018 was large
in scale, we were able to quickly complete PMI and put the com-

By the fiscal year ending December
31, 2030, our plan is to develop EC
logistics into a business generatingover 100 billion yen in net sales.

pany on an autonomous growth track. Over this time, the company’s net sales rose from 70 billion yen to 110 billion yen.
Meanwhile SBS Toshiba Logistics, which became a member of
the SBS Group in FY2020, had completed the migration of its information systems by December 2022, entering a new stage tofocus on sales development. We have used the relocation of thehead office to Nishi-Shinjuku as an opportunity to tackle humanresources and labor-related issues. And while these efforts arestill underway, the company’s net sales have already grown from100 billion yen to 129.2 billion yen.
With SBS Furukawa Logistics, whose PMI began in FY2021, we
have pursued the development of Group synergy, such as by coordinating with SBS Ricoh Logistics and SBS Toshiba Logistics
for overseas sales.

Launching the EC1000 project in FY2023
The SBS Group will place a particular focus on electronic commerce (EC) logistics as a future area of business growth. With the
products handled and participants growing in diversity and scale
at an ever-evolving rate, EC requires efficient logistics.
Starting FY2023, the SBS Group launched the EC1000 project.
By the fiscal year ending December 31, 2030, our plan is to develop EC logistics into a business generating over 100 billion yen
in net sales.
To this end, we will build EC Logistics Omakase-Kun, a one-stop
service platform providing the optimal solutions for EC logistics, andalso plan to develop dedicated EC logistics facilities equipped withrobots and other cutting edge technologies spanning more than
200,000 tsubo (661,000 square meters) nationwide. We will also
provide total support for EC operators, from center operation to final(last-mile) delivery. Overall, we are committed to providing robustand low-cost logistics services.
In the course of implementing strategic marketing, we have fieldeda greater than expected number of inquiries. We will start by properly catering to small and mid-sized EC customers, and then workon acquiring the business of larger-scale clients as we build up a
track record in site operation.

Steps in PMIDevelopment of
infrastructure for dialogue

Activities to improvesales capabilities

Sharing a crisis awarenessthrough dialogue with personnel
in the field
Integration of systems and head
office functions

Shifting core employees tosales activities
Sharing sales information
Enhancing sales promotionfunctions through website andother channels

SBS Ricoh Logistics
SBS Toshiba Logistics
SBS Furukawa Logistics

21

Strategic investment andestablishment of strategic
departments
Expansion of logistics facilities
Proactive use of LT and IT
Enhancement of logistics
functions through small-sized
M&A actions, business alliancesand so on

Creating group synergy

Launch of strategic projects
related to LT, IT and new
businesses, etc. through humanresource exchanges
Joint proposals and thereciprocal utilization of resources

Developing logistics facilities spanning one
million tsubo (3.3 million square meters)

The evolution of logistics facilities through LT
LT and IT can be utilized in every aspect of the SBS Group’s business activities, but are especially key in advancing logistics facilities.
SBS Toshiba Logistics, SBS Ricoh Logistics and SBS Logicom
have traditionally played leading roles in the Group with theactive employment of robot solutions at logistics sites. We haveshared the knowledge accumulated by each Group company
across the Group, and reached the stage of taking the utilizationof LT to the next level.
Driving the utilization of LT across the SBS Group is the LT Planning Department, which has been established within SBS Holdings. Nearly 200 engineers with expert knowledge work in thedepartment, where we consider technical issues such as robot
control and handle the development of proposals when accepting new 3PL contracts. The organizational capabilities of the LT
Planning Department have improved significantly with the addition of members from SBS Toshiba Logistics and SBS Ricoh
Logistics.
On December 1, 2022, we opened the LT Lab, a verification facility for the introduction and operation of advanced LT including
robotics and AI inside the Saitama Logistics Center. Technologies refined in the lab are rolled out to logistics facilities in various
locations operated or newly developed by the SBS Group. Cutting-edge LT will be introduced at the strategic center in Noda,
Seto City, a strategically large center for EC logistics that isscheduled for completion in January 2024.
Going forward, the SBS Group will continue to promote the introduction of practical technologies as it pursues dynamic capital
investment, rapidly giving shape to concrete models that incorporate LT and IT.

Expanding the size of warehouse facilities is essential to thegrowth of the SBS Group as a logistics provider. The Group currently operates over 800,000 tsubo (2.64 million square meters)of warehouse floor area, roughly 20% of which was developed
in-house. Since FY2022 the Group’s planned expansion of floorarea has topped 200,000 tsubo (661,000 square meters). Whenfulfilled, the Group’s operating floor area will top one million tsubo(3.3 million square meters) in total. This will be treated as a transit
point for further pursuing the development of logistics facilities.
It is vital for a warehouse to incorporate the quality, functionality
and flexibility that meet the requirements of a shipper, while
keeping rental charges low. That is why the SBS Group has refined its own logistics facility development model. We purchaseland that features high price competitiveness, and engage insales, planning and development in parallel. Once a facility
achieves full occupancy, we transfer trust beneficiary interest in
the value-added facility and enter into a leaseback agreementwith favorable terms.
This approach improves the concreteness of 3PL services proposed to customers while reducing rent paid over the long term.
It also allows us to provide the buyers of the facilities with excellent investment property. This unique model makes it possible toearn profits from securitization while preparing to develop subsequent logistics facilities without inflating balance sheets. Together
with the increasing size of the logistics business, our ability togenerate cash flow also expands.
As we grow in size, we will also work to develop greater added
value through parallel approaches including the design ofnext-generation general-purpose warehouses and the combined
installation of solar power generating facilities.

Change in the ability to generate cash flow
・The ability to generate cash flow is expanded through increased size from M&A activities and growth in net sales from extending logistics
facilities
・Accelerate the fund recovery cycle of developed logistics facilities by actively liquidating them■Operating CF (actual)■M&A/LT&IT/other■Logistics facility
investment andrecoveryCash inBusiness growth andinvestment recovery

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

+123

+180

+192

+327

+344

+179

+198

+148

+146

+69
+54
–64

Cash out

–159

+126

+120

+54

+72

–69
–68

–71

–95

–253

–181

–324

–276

Growth investment* Free cash flow is classified as either “operating CF(actual),” “logistics facility investment and recovery”

–223

–137

–166
–113

–279

or “M&A/LT&IT/other.”

SBS GROUP
Integrated report 2023

22

Commitment from Top Management

Building the foundations of sustainability
management
To balance efforts to create a sustainable society through solutions
to social issues with sustainable enhancement to corporate value,
the SBS Group is developing a sustainability management structure as a step up from conventional CSR-oriented management.
At its Board of Directors meeting held on January 18, 2023, SBS
Holdings, which oversees the SBS Group, decided to establish asustainability policy and put in place a Sustainability Promotion
Committee. The sustainability policy expresses our desire to bringstability to people’s lives and help realize a sustainable society
from a global perspective based around the core pillars ofpeople, society and the earth. I will personally serve as chairperson of the Sustainability Promotion Committee, a newly established advisory body to the Board of Directors of SBS Holdings,
as an organization that will establish and strengthen our management structure in line with this policy. The committee will formulate
sustainability strategies and action policies for the entire Group,and monitor KPIs and the status of coordination in activities within
the Group.
Without pause, we have made progress in identifying the material issues facing the SBS Group, implementing disclosures consistent with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), and participating in
the United Nations Global Compact.

Implementing sustainable finance
As one consequence of these initiatives, in March 2023, SBS
Holdings entered into a loan contract for "Positive Impact Finance" (totaling 35 billion yen) with MUFG Brank and Mizuho
Bank as arrangers. This is based on the Principle for Positive
Impact Finance advocated by the United Nations Environment
Programme - Finance Initiative (UNEP FI). This marks the first instance of syndicated loan-type positive impact finance in the logistics industry.

Going forward, in addition to securing human resources toachieve growth, we will also promote reskilling and exchanges ofhuman resources within the Group.
* Positive Impact Finance utilizes an impact assessment framework developed by MUFG Bank,
Ltd., Mitsubishi UFJ Research and Consulting co., Ltd., and Mizuho Research & Technologies, Ltd. based on the Principles for Positive Impact Finance advocated by the United Nations Environment Programme - Finance Initiative (UNEP FI), in order to comprehensively analyze and assess the impacts (positive and negative impacts) that corporate activities have on
the environment, society and economy, and to provide loans continuously support initiatives
recognized as intended for generating a positive impact.

SBS Next Stage 2025
In February 2023 the SBS Group announced SBS Next Stage
2025, the Group’s new three-year management plan. The plandeclares the Group’s vision and priority measures up to FY2025,
as well as numerical targets. We plan to update our managementfoundations, including the management philosophy, while clarifying our strategies to achieve net sales of 500 billion yen by
FY2025 (excluding gains from new M&A activities).
The four priority measures declared in this management plan
expand the growth strategies we have pursued to date withsharper focus, and add sustainability management as a new key
pillar. We have incorporated 3PL, EC and overseas as growth
drivers that will serve as guideposts for the Group’s sustainablegrowth. 3PL is a unique business model combined with logistics
facility development, and an area in which we will achieve outstanding competitiveness. We will strengthen our sales development structure, simultaneously expanding new 3PL contracts anddeepening 3PL projects with existing customers. We will also
focus on expanding orders for high value-added 3PL (4PL) by
proposing logistics strategies and providing new schemes from amanagement perspective.
To expand international logistics, we will proceed to the next step,
now that the consolidation and reorganization of the Group’s
overseas business around SBS Ricoh Logistics is complete. We
will seek closer coordination with the overseas sites of SBS Toshiba Logistics and pursue economies of scale. Leverage the busi-

Three-year Management Plan (FY2023 to FY2025)

Enhance the overall strength of the Group(group platform strategy
and unique strategies of each company)

Improve/differentiate operational
productivity through LT×IT

23

Develop and expand logistics
business infrastructure

Strengthen the foundations of sustainability
management and human capital initiatives

ness networks we have built, we will expand contracts for manufacturers’ production logistics in China and Southeast Asia, andthe overseas businesses of our domestic 3PL customers. Additionally, in the United States and Europe, we will aim to secure
new business through intra-Group coordination. Through collaboration with third-party forwarders, we will also tackle new business
opportunities including intermodal transportation and cross-border EC.

Shareholder return
The SBS Group places an emphasis on the return of profits toshareholders while achieving value creation for a wide range ofstakeholders, and even clearly states this in its new management philosophy. We seek to balance shareholder return withthe retention of sufficient internal reserves to build a more robust
management base, while endeavoring to maintain continuous
dividends and improving the level of dividends in light of business performance.
In the fiscal year ended December 31, 2022, we raised the dividend per share to 61 yen, reflecting the business results of the
SBS Group. In the fiscal year ending December 2023, we plan
to raise dividends another 4 yen to 65 yen per share.

61

Dividendper Share

While the dividend payout ratio for the fiscal year ended December 31, 2022 was 20.7%, we have set a long-term goal of 30%
for this metric.

Sincerely pursuing growth as the infrastructureof hope
The SBS Group aims to achieve net sales of 700 billion yen by
FY2030, and has its sights set on reaching the 1 trillion yen
market beyond that. I see these goals as things we will achieve
ourselves in the course of sincerely pursuing growth as the infrastructure of hope which delivers dreams to people around theworld. With structural changes around the world picking up
speed, the SBS Group will identify the true nature of thosechanges and position itself to assume a more important role inJapan and abroad by evolving itself. Thank you for taking an interest in the path the SBS Group is taking. We will continue torealize a better future with the guidance and help of many
people.

yen (+6 yen)

Fiscal XX
Fiscal 2030 (43rd)

1 trillion yen

700 billion yen
Growth step

Fiscal 2025 (38th)

500 billion yen
Fiscal 2021 (34th)

400 billion yen

Fiscal 2017 (30th)

200 billion yen

Fiscal 2007 (20th)

100 billion yen

Fiscal 1997 (10th year)

We place an emphasis on the return ofprofits to shareholders while achieving
value creation for a wide range ofstakeholders, and have established thelong-term target of a 30% dividend
payout ratio.

10 billion yen

SBS GROUP
Integrated report 2023

24

The SBS Group’s Three-Year Management Plan

Key Elements of the Three-Year Management Plan (FY2023 to FY2025)
Enhance the overall strength of the Group (group platform strategy and unique strategies of each company)
Continue to strengthen and deepen B-to-B businesses, particularly in 3PL
Accelerate EC logistics (build hybrid EC platforms)
Establish a Group-wide system of cooperation for international logistics businesses and tap into growth in global markets

Develop and expand logistics business infrastructure
Strengthen the Group’s logistics infrastructure, including in warehousing and distribution networks, EC logistics functions andthe international logistics network
Secure and develop human resources that will play an integral part in business activities
Enhance and expand management resources through M&A activities

Improve/differentiate operational productivity through LT×IT
Further rationalize logistics sites through the use of labor-saving technology and develop a robust operational structure tocope with labor shortages
Establish a competitive advantage by developing more sophisticated logistics through the use of logistics data
Pursue low costs in indirect operations by improving the operational efficiency of administrative departments

Strengthen the foundations of sustainability management and human capital initiatives
Strengthen governance supporting sustainability management and tackle key issues
Improve corporate value by strengthening human resource and organizational capabilities within the Group

Quantitative PlanAs FY2025 targets for the SBS Group, we plan to achieve consolidated net salesof 500 billion yen, operating income of 27.5 billion yen (with an operating income
margin of 5.5%), and a shareholders’ equity ratio of 30%. In FY2023, in which environmental changes to overseas markets are seen as having a major impact, weplan to make somewhat steady progress as a step toward those goals.
We will pursue a shift in the focus of management from an emphasis on quantitative
metrics such as net sales and operating income to a balance between quantity andquality. We will revise our earnings structure by positioning operating income margin
as a KPI. We will also position the property management business as a stable earnings base while achieving sustainable growth in the logistics business.
Also note that the target values in the plan exclude the impact of M&A activities. If
new M&A actions are implemented in the future, the target values will also change
accordingly.

We will take solid steps
towards achieving
consolidated net sales of
500 billion yen.

Numerical Plan for FY2025(100 million yen)

Net Sales(Year-on-year growth rate)

Fiscal 2023
Plan

Fiscal 2025
Plan

4,554
(12.9%)

4,570(0.3%)

5,000(CAGR 4.5%)

4,332

4,335

4,681

Property Management Business

134

143

219

Other Businesses

87

92

100

218
(4.8%)

228(5.0%)

275(5.5%)

Logistics Business

154

155

190

Property Management Business

62

75

80

Other Businesses

4

3

5

23.7%

25.5%

30.0%

Logistics Business

Operating Income(Operating income margin)

Shareholders’ equity ratio

25

Fiscal 2022
Results

Net sales and operating income
Net Sales

Operating Income(billion yen)(billion yen)

Fiscal 2025 consolidated
500 billion yen

520
500

25

10.0

480

21.9

460
440

5.6

7.5

6.2

5.4

8.0

5.2

14.3

5.0
10

468.1
433.5

433.2

380

0.5

15

420
400

(%)

5.8

0.3

0.4

20

9.2

8.7
13.4

Fiscal 2025 consolidated
27.5 billion yen

30

19.0

Fiscal 2022 Fiscal 2023
Results
Plan

0

Fiscal 2025
Plan

15.5

15.4

5

4.8

Fiscal 2022 Fiscal 2023
Results
Plan

Fiscal 2025
Plan

Operating income margin
Other Businesses

4.6

Property Management Business

4.4

Logistics Business

Investment

98.0 billion yen

55.0 billion yen+
M&A 29.7 billion yen

Growth investment
Distribution facilities
DX (LT×IT)

M&A investment
29.7 billion yen

Strategic investment
82.0 billion yen

Human Capital
ESG

Total investment
98.0 billion yen
Strategic investment
42.0 billion yen

Total investment
55.0 billion yen

M&A
Ordinary investment
16.0 billion yen

Ordinary investment
13.0 billion yen
Fiscal 2020-2022 (Results)

Fiscal 2023-2025 (Plan)

Shareholder-Related
Dividend per share (yen)Dividends payout ratio
30%

55
30

33

Fiscal 2019

Fiscal 2020

Fiscal 2021

61

65

Fiscal 2022

Fiscal 2023

Fiscal 2024

Fiscal 2025

Fiscal XX

SBS GROUP
Integrated report 2023

26

Business Overview and Financial Status

Sales and Profits
The SBS Group achieved recorded highs in consolidated net
sales and each income level in FY2022.
Net sales were 455.481 billion yen, an increase of 51.996 billion yen
from the previous fiscal year (a 12.9% increase compared with theprevious fiscal year). The logistics business accounted for 95.1% of
net sales by value, while the property management business andother businesses accounted for 2.9% and 1.9% respectively.
Operating income stood at 21.844 billion yen, rising 1.137 billion
yen over the previous fiscal year (a 5.5% increase).
Additionally, net income attributable to owners of parent rose 0.942
billion yen year on year to end at 11.732 billion yen, a 8.7% jump.

Logistics BusinessIn the mainstay Logistics Business, in addition to expandingtransactions with existing customers, we focused on acquiring
new customers looking for advanced logistics functions. Given
factors including a recovery in intercompany logistics that were hit
hard by the spread of COVID-19, including overseas, and thecapturing of e-commerce demand in the same-day delivery business, net sales in the logistics business for FY 2022 rose 54.959
billion yen (up 14.5%) year over year to 433.295 billion yen, while
operating income declined 123 million yen (down 0.8%) over thesame period to 15.423 billion yen, in part reflecting rising vehicle
hire and fuel expenses, as well as the recording of expenses forthe introduction of new uniforms.

Property Management Business
The Property Management Business comprises the development
business and rent business. In the development business, wepursue an integrated approach to developing large-scale warehouses that meet customers’ logistics needs from land acquisition
to construction, in order to promote the Group’s 3PL and 4PL
businesses. In the rent business, we generate rental income fromGroup-owned warehouses, office buildings, residences and otherproperties. SBS Holdings securitizes logistics real estate to recoup
funds for future investment, and income recorded from securitization is included in the property management business.
In terms of the results of logistics real estate securitization in thefiscal year under review, trust beneficiary rights in the Yokohama
Kanazawa Logistics Center (Yokohama) were partially transferred.
Net sales in the Property Management Business for FY2022

Net Sales

Other Businesses
The main other businesses are a worker dispatch business, marketing business, solar power generation business and environmental business. Net sales in the Other Businesses rose slightly
by 656 million yen (up 8.1%) year on year to 8.762 billion yen,with operating income declining by 32 million yen (down 7.5%)
over the same period to 402 million yen.

Capital Investment
The SBS Group has actively pursued investments in logistics facility development and planned and increased the total floor areaof facilities developed in-house by approximately 130,000 tsubo(approximately 430,000 square meters) (approximately 150,000
tsubo, 495,000 square meters when leasing is also included)
over a six-year period from 2018 to 2023.
Capital investments made in fiscal 2022 totaled 17.859 billion yen.
In the Logistics Business, we made investments of 15.183 billion
yen on the acquisition of land for logistics facilities and their construction, routine vehicle upgrades, and so on. In the Property Management Business, total investments of 913 million yen were madein areas such as acquisition for lease properties. In Other Businesses, 53 million yen was invested in routine vehicle upgrades andother things. In terms of company assets, investments totaling 1.709
billion yen were made in areas such as the purchase of software forin-house use and interior construction at the new head office.
In addition, due to the fire that broke out at Ami Logistics Center2 on June 30, 2022, equipment losses totaling 4.446 billion yen
were incurred.
CapitalInvestment

17.8

billionyen

21.8+12.9%+5.5%

Logistics
Business

Logistics
Business

433.2 billion yen +14.5%

Property
Management
13.4 billion yen
Business
Other
Businesses

8.7 billion yen

billion yen

Impact of the logistics facility fire
Losses related to the fire that broke out on June 30, 2022 at a logistics facility (Ami Logistics Center 2) operated by the consolidated subsidiary SBS Flec were posted as extraordinary losses, but of the amounts paid out as insurance benefits for the fixed assets thatwere destroyed or damaged by the fire, the amount corresponding to the fire losses described above has been recorded as extraordinary income.

NET INCOME ATTRIBUTABLETO OWNERS OF PARENT

Operating Income

455.4

27

declined 3.619 billion yen year over year (down 21.2%) to
13.423 billion yen, with operating income declining 50 million yen
to 6.282 billion yen (down 0.8%) over the same period.

billion yen

11.7
+8.7%

15.4 billion yen-0.8%-21.2%

Property
Management
6.2 billion yen
Business

-0.8%

+8.1%

Other
Businesses-7.5%

0.4 billion yen

billion yen

Factorial Analysis of the Change in Net Sales inthe Logistics Business (Million yen)

Net Sales (Million yen)
2018

203,516

378,335

2021

2019

255,548

Overseas business (marine and air
freight charges, exchange rates, etc.)

2020

257,192

Contribution of new consolidated companies

455,4812022+24,001

Increase in logistics volume,
new development, etc.

403,4852021+25,845+12,705-709

Impact of the fire accident-6,883

New Revenue Recognition Standard

433,295

2022+54,959 million yen (+14.5%)
Composition of Net Sales by Business

Factorial Analysis of the Change in Operating Income in
the Logistics Business (Million yen)

15,546

2021

Fiscal 2022

Logistics Business 95.1%

Overseas business (marine and air
freight charges, exchange rates, etc.)

Property Management Business 2.9%

Contribution of new consolidated companies

Other Businesses 1.9%

Increase in logistics volume, new development, etc.

+1,232+775-1,159Fuel and utilities expenses
Head office relocation andredesign of uniforms

2018

8,240
7,607

■ Operating Income■ Ordinary Income

201910,176
10,172

2020

10,96010,883-659

Expenses to deal with the fire at Ami
Logistics Center-285

M&A-related amortization costs-162

OPERATING INCOME AND ORDINARY INCOME (Million yen)

Others

2022

+592

-457

15,423-123 million yen (-0.8%)

20,706
20,4892021

21,844
21,4042022

Change in Capital Investment Amount (Million yen)

Net income attributable to owners of parent (Million yen)
2018
2019
2020
2021
2022

4,409
6,079
6,826
10,79011,732

2018

2019

2020

2021

2022

11,607

11,71011,507

14,501

17,859Logistics Business 10,770

10,89910,971

12,544

15,183

Total

Property
Management
Business

502

153

75

145

913

Other Businesses

151

319

107

128

53

Company Assets

183

338

353

1,682

1,709

* Amount of purchases of software for in-house use was previously included under“Other Businesses” but has been included under “Company Assets” from 2021.

SBS GROUP
Integrated report 2023

28

Business Overview and Financial Status

Assets and Liabilities

Cash Flow

Total assets as of the end of FY 2020 stood at 296.898 billion
yen, an increase of 19.701 billion yen from the end of the previous fiscal year. This was mainly due to an increase in cash anddeposits, accounts receivable-trade and inventories.
Liabilities stood at 204.726 billion yen, an increase of 8.236 billion yen compared with the end of the previous fiscal year. Thiswas mainly due to an increase in short-term loans payable.
Net assets stood at 92.172 billion yen, an increase of 11.464 billion yen compared with the end of the previous fiscal year. The
increase was mainly due to higher retained earnings resulting
from the recording of net income attributable to owners of parent
and an increase in non-controlling interests.

As of December 31, 2022, cash and cash equivalents ("cash,"hereafter) had increased by 8.873 billion yen from the end of theprevious fiscal year, to 32.668 billion yen. The main reasons for thechanges in each cash flow are as follows.

Total
Assets296.8

billion yen

Trends in Finances
Working from a medium-to-long-term perspective, the SBSGroup intends to achieve the sustainable growth of its businesses and boost earnings capability and capital efficiency. Additionally, as a part of key business and investment strategies, we will
promote the unique business model of pursuing the stable
growth of the 3PL and 4PL businesses by systematically iterating
on a cycle of the in-house development and securitization of logistics facilities. Due to this approach, we have placed an emphasis on maintaining a balance between active investment activities and maintaining financial health, have set a target shareholders’ equity ratio of 30%, and position this as a decision-making indicator.
In fiscal 2022 the shareholders’ equity ratio was 23.7% (up 1.8%
year on year).
Moving forward, we will continue to undertake business operationthat is mindful of financial health and pursue the optimum balance
between investment and returns.

Shareholders’Equity Ratio

23.7

%

Cash Flows from Operating Activities
Net cash provided by operating activities was 22.407 billion yen(inflow of 27.472 billion yen in previous fiscal year). This was
mainly due to an increase in income before taxes and other factors in the bottoming out of profitability.

Cash Flows from Investing Activities
Net cash used in investing activities was 15.895 billion yen (outflow of 22.343 billion yen in previous fiscal year). This mainly reflected the acquisition of non-current assets such as vehicles andequipment.

Cash Flows from Financing Activities
Net cash provided by financing activities was 0.489 billion yen(outflow of 9.278 billion yen in previous fiscal year). This was due
to 15 billion yen in proceeds from long-term loans payable and a
net increase of 5.519 billion yen from short-term loans payable,
despite repayments of long-term loans payable of 15.294 billion
yen, dividend payments of 2.184 billion yen, and other outlays.
Balance of Cash andCash Equivalents asof December 31,
2022

billion yen

Shareholder Return
The Company considers the return of profits to shareholders to be
one of its most important management priorities. The Company’s
basic policy on the distribution of profits is, while retaining sufficientinternal reserves for the establishment of a more robust management foundation, to maintain continuous dividends, and improve
the level of dividends in line with business performance. The Company’s basic approach is to pay once-yearly dividends of surplus
funds. Comprehensively taking into account the results in FY2022
under review and the Company’s financial status, a year-end dividend of 61 yen per common share was issued. This was 2 yenhigher than the 59 yen initially forecast, and represents an increaseof 6 yen per share compared with the previous fiscal year. Goingforward we will continue to promote the return of profits to shareholders together with sustainable growth.

Year-End Dividend
Per Common Share

29

32.6

61

yen

Change in Consolidated Balance Sheet (100 million yen)
As ofDecember
31,

1,215

Current
assets

2021

+244

1,460

Total assets

277.1

1,556

Fixed
assets-47

1,508

billion yen

1,060

Current
liabilities

+85

1,146

Total assets

904

Long term
liabilities

296.8

+19.7

-3

900

billion yen

807

Net
assets

As ofDecember
31,

+114

921

2022

Change in the Shareholders’ Equity Ratio

Shareholders’ equity

Total assets (100 million yen)

26.7

2013

289

2014

318

1,311

24.3

2015

280

1,248

22.5

2016

325

1,223

26.6

2017

364

1,278

28.5

2018

397

2019

451

2020

507

2021

606

2022

703

1,083

23.1

1,717

25.1

1,800

19.9

2,545

21.9

2,771

23.7

2,968

Shareholders’ equity ratio (%)

Change in the Balance of Cash and Cash Equivalents (100 million yen)

237

2021

+224
-158

Operating CF

Investing CF
Financing CF

+4
326

2022

Change in Dividends
For the year ended
December 31,
2018

Dividend per share (yen)22

For the year ended
December 31,
2019

30

For the year ended
December 31,
2020

35

For the year ended
December 31,
2021

55

For the year ended
December 31,
2022

For the year ending
December 31, 2023
(forecast)

61

65

Net income per share (yen)111.01153.06171.88271.67295.39302.13

Net assets per share (yen)1,001.05

1,136.22

1,277.92

1,527.58

1,772.04-

Payout ratio (%)

19.8

19.6

20.4

20.2

20.7

21.5

Ratio of dividends to net assets (%)

2.3

2.8

2.9

3.9

3.7

-

SBS GROUP
Integrated report 2023

30

External Environment and Mid-to-Long-Term Management Strategy

The SBS Group takes a broad view of external environmental
changes in implementing its medium- and long-term management strategies. Based on the concepts of being a “group of
3PL companies possessing logistics functions in every direction” and a “mega venture,” we continue to strengthen ourcomprehensive proposal-making capabilities, expertise andproblem-solving abilities while establishing a management base.

The External Environment Surrounding the
SBS Group
The SBS Group identifies and analyzes the short-, mid- andlong-term impacts due to changes in the external environment,
and uses that insight as a basis for formulating management
strategy and reviewing strategy in a flexible manner.

EconomyMarketTechnology

Society

Changing consumer behavior

Diversification of services

General logistics DX

Emergence of the COVID-19

Smaller and more frequent lots

Supply chain management

due to the COVID-19 pandemic
Slumping employment or income
environment, inbound demandor capital investment sentiment
Stock market instability
Slowdown of global economic
expansion due to the COVID-19
pandemic
Uncertainty in international affairs
Demands to disclose information
on awareness of climate change
and action to address it
Requests regarding ESG
Expansion of sharing economy

Issues with last-mile delivery
Demands for stable and flexible(SCM)/IoT and AI
Big datatransportation capabilities

Data warehouse

Increased competition due toAutomation and robotics

e-commerce business operatorsdeveloping in-house logistics
systems
Cooperation on logistics
Supplementary of logistics

changeRequirements for appropriate
operational management ofvehicles and stronger safetymeasures

Telematics

Worsening labor shortages

ETC2.0Work environments for truck

EV
Autonomous driving

Alliances with other companies

Drone

Fluctuating energy prices

Emerging effects of climate

AutoStore

functions and services
including industry players

pandemic

drivers
Expected increase in foreign
workers
Long-term decline in the working
age population
Review of labor laws andregulations
Demands for productivity
improvements across Japan
Human rights issues in Japanand overseas
Requests regarding diversity andinclusion

31

BUSINESSThe Simultaneous Pursuit of Co-existence, Symbiosis and Synergy in M&A Activities
Through M&A activities, regarded as a pillar of its management strategy, the SBS Group pursues coexistence and symbiosis rather than dominance. We maintain the employment of staff and welcome new human resources into the Group. We also implement measures to enhanceGroup-wide synergistic effects, including market development, expanded sales channels,
and the sharing and enhancement of service provision, knowledge, people and organizational capital. The SBS Group has established these post-merger integration (PMI) approaches and expertise through the series of M&A actions taken in the past, and theinitiatives pursued subsequently. To maximize the outcomes delivered by these
M&A activities, they form a key pillar of our current growth strategies.

Business Expansion Leveraging 3PL as a Strength
Our business structure is being developed around a core of third-party logistics (3PL), which involves providing comprehensive logistics services to shippers. We are also enhancing our strengths by expanding new orders
gained through web marketing and enhanced sales activities, pursuing improved efficiency through stronger field capabilities and investment in
LT/IT, and expanding our operating base through the development of logistics facilities. (See pages 33 to 36)

BUSINESS

Maintaining Financial Health through the Logistics
Facility Development Cycle

ESG

We work to develop logistics facilities in-house in order to promote
the expansion of the 3PL business and higher service levels, andmaintain financial health through the systematic securitization of existing facilities.

ESG

Medium-to-long-termManagement Strategies
The SBS Group is promoting thedevelopment of business activities
and strengthening of sustainability
management foundations in an integrated fashion.

Securing the Human Resources to Support the
Logistics Business and Facilitating Their SuccessTo continue to achieve future growth, it will be essential to retain thelogistics human resources promoting our core 3PL business, theglobal human resources driving overseas development and the professional human resources driving logistics facility development andincorporating future technological innovations. At the same time, withthe dwindling working population, we see the stable retention of drivers
and other management resources that support the foundations of thelogistics business as a key management issue.
To that end, we are taking steps to improve personnel systems, hire andcultivate talented human resources, and develop a workplace environment
in which each individual employee can enjoy job satisfaction, pride and motivation. In developing the workplace environment, we will also consider the
public health risks that have become evident due to the spread of COVID-19.

Safety, Environment and GovernanceIn addition to taking measures to ensure work safety and prevent traffic accidents,
we implement thorough environmental conservation initiatives, including the promotion of eco-driving and measures to reduce the environmental impact attributed to ourvehicles and logistics facilities.
Moreover, we pursue the further enhancement of our corporate governance system that
includes these initiatives.

Initiatives to Address Logistics Industry-Wide Issues
We seek out collaboration with strong partners while promoting initiatives that help solve the short-,
mid- and long-term issues facing the logistics industry from various angles. These initiatives mainly address the shortage of truck drivers and climate change.

SBS GROUP
Integrated report 2023

32

Rolling out 3PL

The SBS Group emphasizes 3PL that comprehensively supports corporate logistics and is further enhancing its strengths
in this area.
We are also tackling 4PL, which helps solve management issues from a strategic and organization-wide perspective.

3PL is positioned at the core of our management
strategy
3PL (third-party logistics), which the SBS Group positions at
the core of its management strategy, is a service where we
propose logistics reforms to consignors and are entrusted
Strengths of the SBS Group’s 3PL

with their logistics operations on a comprehensive basis. To
achieve the ideal form of logistics envisaged by customers,
we plan and operate a range of operations arising in the

ProposalCapabilities

supply chain on behalf of customers, including transportation,
packing, storage, cargo handling and information manage-

Proposals to transform logistics
through overall optimization

ment.

Proposals that emphasize
data analysis

The SBS Group defines logistics services meeting the criteria

Proposals that reflect
familiarity with logistics
in the fieldof direct contracts with consignor companies, medium-to-long-term plans and the joint entrustment of multiple
services as 3PL. We consistently work to maximize the benefits of 3PL. Based on the low-cost operations the Group has
honed, we flexibly combine various elements including consulting, information systems and logistics centers to provide

Informational
Capabilities

valuable 3PL services to customers in various industries andlines of business.

Proposals covering everythingfrom information systemdevelopment to operation

The Ministry of Land, Infrastructure, Transport and Tourism

Unique development center
management system

has taken a multifaceted approach to support measures including the development of laws and guidelines, special tax
exemptions for logistics sites and facilities and promotion ofhuman resource development, based on the belief that logistics efficiency improvements through the spread of 3PL will
not only improve the productivity of industry and the economy
as a whole, but also pose considerable social benefits suchas reduced CO2 emissions.

Ability to develop and provide
our own logistics centers
Ability to maximize cost
reductions with optimum
facilities

Operational
Capabilities
Well refined low-cost operation
Sites that advance efficiency
and quality throughimprovement activities

33

Development
Capabilities

Ongoing Improvements to 3PL Infrastructure
To deliver the benefits of 3PL services to as many customers
as possible, the SBS Group is systematically developing its
business infrastructure.
Logistics facilities are the most important element as infrastructure supporting 3PL. The SBS Group has made it a goal
to develop logistics facilities with a total operational area of
one million tsubo (approx. 3.3 million square meters). As ofthe end of 2022, our logistics facilities including those currently being planned account for 1,040,000 tsubo (approx.
3.44 million square meters), showing that our goal is almost
within reach (see table below).
Improving the efficiency of logistics through 3PL is accelerated by the development of logistics technologies (LT). Throughproactive investment in LT and IT, the SBS Group is making
progress in updating and redesigning the entire logistics systems it operates. Through the introduction of the latest technologies including robots and AI systems, logistics facilities
are the basis for a new generation of 3PL services.
We are concentrating on improving and updating our operating
vehicles, innovating our management techniques, developing
and reorganizing 3PL-related organizations and continually investing in human resources responsible for implementing 3PL.

In addition, as a mechanism supporting 3PL from a finance
perspective, we have established a cycle of logistics facility
development-centric investment and recovery, and a cash
management system that ensures flexible working capital, as
part of a series of improvements connected with businessgrowth and environmental changes.
Warehouse Floor
Area under
Operation(existing + planned facilities)
As of February 2023

1,042,300

tsubo(approx. 3.45 million square meters)

Cash Management System Utilization
The main working capital of the SBS Group is sales cost including vehicle hire, outsourcing expenses and personnel expenses, and operating expenses including selling, general and administrative expenses. Additionally, demand for funds aimed at investment includes routine vehicle upgrades, the acquisition of shares in subsidiaries
and affiliate companies, the acquisition of land associated with logistics facilities developed in-house, the costs of construction work, capital investment, and so on.
The SBS Group procures the funds required for the entire Group in a centralizedfashion through its holding company. In addition to receiving lines of credit frommultiple banks so that working capital can be secured flexibly, the SBS Group also
procures long-term funding in a systematic fashion to address the capital demand
for the purpose of investment. The procured funds are put to the best and most effective use within the Group through a cash management system. Specifically, thissystem adjusts funding surpluses and shortages between subsidiaries (cash pooling) and performs payment operations on their behalf.

Plans for Increased Logistics Facility Floor Area
Name

Location

Timing of Operation(Consolidated)

Total floor area
/ tsuboType

Operational Area as of December 31, 2020

Operating Companies

531,000

SBS Toshiba Logistics

Nationwide

January 2021

M&A

200,000

SBS Toshiba Logistics

Toyo Warehouse & Transportation

Kanagawa
and Tokyo

January 2021

M&A

18,000Toyo Warehouse & Transportation

Yokohama Kanazawa Logistics Center

Kanagawa

November 2021

In-house

16,200SBS Ricoh Logistics

SBS Furukawa Logistics

Nationwide

January 2022

M&A

23,000SBS Furukawa Logistics

Logistics Center Atsugi

Kanagawa

May 2022

Lease of entire building

17,400SBS Ricoh Logistics

Osaka Ishikiri Branch OfficeOsaka

June 2022

Lease of entire building

4,900

SBS Logicom

Cold Center Ichikawa

Chiba

October 2022

Lease

2,600

SBS Zentsu

Logistics Center Ichinomiya (provisional name)

Aichi

April 2023

In-house

Osaka Suminoe Logistics Center (provisional name)

Osaka

April 2023

Building A, Seto, Noda

Chiba

January 2024

Building B, Seto, Noda

Chiba

Tomisato Site
Tokorozawa Land A
Tokorozawa Land B

SaitamaKashiwazaki Warehouse

Niigata

Mie Warehouse

Mie

Under construction

Yokoshibahikarimachi Land

Chiba

PlannedKasumigaura-shi Land

IbarakiPlannedOperational Area as of December 31, 2022

813,100
17,400SBS Ricoh Logistics

Lease of entire building

5,900

SBS Toshiba Logistics

In-house

50,800SBS Asset Management

PlannedIn-house

39,500SBS Asset Management

Chiba

PlannedIn-house

28,400SBS Asset Management

SaitamaPlannedIn-house

7,000

SBS Logicom

PlannedIn-house

4,000

SBS Sokuhai Support

Under construction

In-house

600

SBS Toshiba Logistics

In-house

600

SBS Toshiba Logistics

In-house

60,000SBS Logicom

In-house

15,000SBS Logicom

Plans for Increased Floor Area from January 2023 Onward

229,200

Total Operational Area (existing + planned facilities)

1,042,300 tsubo (approx. 3.45 million square meters)* Rounded to the nearest 100 tsubo (approx. 330 square meters)

SBS GROUP
Integrated report 2023

34

Rolling out 3PL

SBS’ Unique Logistics Facility Development Model

3PL business cycle
Development cycle

Customerdevelopment
Utilize license andknowledge topurchase highly costcompetitive land

Stableoperation

Transfer as a beneficial
interest in trust after full
utilization of floor areaand stabilized operation

Start construction if
operating area is expected
to be around 50% filledLand
acquisition

Securitization

Logistics
facility
development

Development Results 23
buildings
Total Floor Area Approx.
190,000 tsubo (approx.
629,000 square meters)

Start ofconstruction

Completionof
construction

Sitestartup

Recovery phase

Receipt oforder forproposalContinue with sales
activities and engage in
LT and IT planning anddesignSecuritized 11 buildings
Total Floor Area Approx.
130,000 tsubo (approx.
429,000 square meters)
Of 813,000 tsubo(approx. 2.68 million square
meters) of floor area currently
operated, about 20% iscovered by facilities
developed in-house

Investment phase

Osaka Suminoe Logistics Center
SBS Toshiba Logistics opened the center at a location
roughly 10 km from central Osaka in April 2023. The
center aims to improve customer satisfaction across awide range of applications including home appliances(manufacturer and mass merchandiser logistics), precision equipment, housing construction and e-commerce.

35

Rollout of 3PL in Each Region

4PL as an Evolved Form of Logistics

The SBS Group, which is a collection of logistics business
operators with a diverse range of strengths, is rolling out 3PL
in a multifaceted way.
SBS Logicom, a logistics company affiliated with multiple
electric railway companies in the past, provides 3PL services
to customers across various industries including manufacturers, retail chains and e-commerce businesses, and is involved with a wide range of operations from integrated international transportation to logistics center operation and store
deliveries. The company also has a track record of accepting
contracts to strengthen logistics functions as a business continuity planning (BCP) initiative.
SBS Flec, which provides food logistics at the three temperature zones (refrigerated, frozen and room temperature), provides Food 3PL services that offer one-stop logistics management services from food production sites to customers.
The Company responds to the need for food safety and security, taking action by expanding trading zones, as well as
streamlining and reducing the costs of logistics. SBS Ricoh
Logistics System, which boasts a track record as a logistics
subsidiary for a precision equipment manufacturer, provides
3PL services that make full use of its technologies, expertiseand business infrastructure.
In addition to logistics for precision equipment, the company
supports a wide range of customers spanning everythingfrom electrical component and machinery component logistics that require high levels of expertise to procurement andproduction logistics catering to the needs of factories, logistics for mass retailers supporting increasingly complex delivery services and office e-commerce logistics, as well as logistics for cosmetics and quasi-drugs.

The SBS Group describes as 4PL logistics services that provide greater added value than are available with 3PL, andproposes and realizes logistics strategies that reflect customer management strategies (and solve management issues).
From a medium-to-long-term perspective, we conceptualize
measures aimed at optimization of the entire supply chain,and promote those measures together with customers.
SBS Toshiba Logistics, which has built up experience in providing solutions from a management perspective as a subsidiary allotted logistics functions for an electric appliance manufacturer, is directly involved with 4PL-based operations while
also being tasked with sharing its expertise with other SBS
Group companies.

3PL

4PL

Total solutions toaccelerate business

Consulting that
accompanies
management

As a key activity of the Medium-termManagement Plan
Under Next Stage 2025, the SBS Group’s Three-Year Management Plan, 3PL is at the top of the list under Priority Measures 1 (Enhance the overall strength of the Group). The
Group plans to further strengthen and deepen B-to-B businesses, particularly in 3PL. To secure new contracts, we willroll out sales activities targeting customers’ entire supply
chains, developing uncontracted areas with a broad perspective. The SBS Group’s newly constructed logistics facilities are
an important way to attract interest. For existing customers, wewill work to spread contracted areas to peripheral domains utilizing our logistics platform in addition to proposing improvements based on their needs. We will also cultivate staff who
will take in the lead in proposal activities to expand 4PL contracts. Net sales for FY2022 were 232 billion yen, and we plan
to expand this figure to 256 billion yen by FY2025.
Having continually grown as a 3PL corporate group possessing omnidirectional logistics functions, the SBS Group is
taking steps to transform into a new look.

Change in 3PL and 4PL Net Sales / Target
The SBS Group’s Definition of 3PL(100 million yen)

1. Projects where a series of (multiple) operations areundertaken in bulk
2. Over the medium- to long-term (at least three years)
3. Under direct contract by shippers

2,560

3PL Net Sales
TargetFiscal 2025

256.0

2,320

billion yen

2,360

2,146
Fiscal 2021
Results

Fiscal 2022
Results

Fiscal 2023
Plan

Fiscal 2025
Plan

SBS GROUP
Integrated report 2023

36

Controlling Management Risks

Uncertainty in the management environment for logistics business operators has increased due to a fluctuatinginternational climate. The SBS Group takes a broad view in identifying risks to watch out for, analyzes the nature andimpact of these risks and endeavors to manage them effectively.

Risk Management Policy and System

Major Risks to be Addressed

The SBS Group has established the SBS Group Risk Management Regulations and endeavors to manage all risk
events that could pose threats to management activities. In
addition to risks whose effects are immediately apparent,risks we determine should be addressed from a medium or
long-term perspective are also subject to management.
We have also established the SBS Group Risk Management
Council, comprising members selected from SBS Group
companies, to ensure that risk management is continually implemented on a Group-wide basis. At meetings generally
held twice a year, the council separates risks into Group widerisks and risks affecting individual Group companies, monitors the status of measures to deal with each risk, and strives
to prevent risks from occurring or minimize the damages that
occur in the event of an emergency.

We have currently established 15 categories of risk events thathave the potential to affect the SBS Group’s short, medium
and long-term management results, share price and financial
condition. While the risks differ in terms of whether they arecaused by external factors, internal factors or a combination of
both, we manage all of these risks in a comprehensive fashionin the interest of enhancing the soundness and continuity ofmanagement.

SBS Group Risk Management Regulations(Key Points)
Basic Policy
In light of the social significance of the SBS Group, on adaily basis its officers and employees shall manage risks
by placing the highest priority on safeguarding human lifeand ensuring safety, and in the event a risk occurs, endeavor to contain the risk, minimize damages and enable
a quick recovery.

The Risk Management Process
SBS Holdings and each Group company start by identifying
the risks to be handled by each department. Next, factors including the likelihood of occurrence, impact and potential forcontrol are carefully examined and analyzed for each risk. We
then implement response measures and work to prevent or
minimize damages and losses due to risks.
The SBS Group Risk Management Council receives reports
from SBS Holdings and Group companies to verify and evaluate the implementation status and effectiveness of the measures taken to address risks. The results of the evaluation arereported to the SBS Group Sustainability Promotion Committee for approval.
This cycle is repeated annually in an effort to not only ensurethat existing risks are being appropriately handled, but to response quickly to newly emerging risks.

Establishment and Operation of the Risk Management
CouncilMonitoring, evaluation and approval of measures to address risks
Emergency Risk Response
Establishment of Business Continuity Plan

Report to the SBS Group Sustainability
Promotion Committee

The Risk Management Process

Verify and evaluate

Implement response measures

Examine and analyze

Identify37

SBS Group
Risk Management Council

Management Status of Major Risks

Risk

Overview

EffectResponse Status

Risks due to changes in
economic conditions

The businesses operated by the SBSGroup are affected by economic andbusiness trends in Japan and overseas, and by fluctuations in transportation demand among enterprise customers.

In the event of sluggish consumption
due to a domestic economic contraction, a fall in import/export volumes
triggered by a sharp appreciation of
the yen or a serious contraction in an
overseas economy, a reduction in thenumber of orders received or downward pressure on transportation fees
could occur.

Promotion of business diversification
Diversification of risks by expanding
business partners
Promotion of an enhanced andoptimized business portfolio in
conjunction with the above measures

The use of fuels such as light oil andgasoline is essential in the logistics
business. But when fuel prices increase due to steep rises in crude oil
prices or fluctuating exchange rates,
they represent a factor that increases
costs.

It may not be possible to changetransportation charges to reflect higher-than-expected fuel prices andequivalent increased costs due tosharp rises in global oil prices or theeffects of currency exchange markets.

Creation of budgets that incorporate fuelprice fluctuations (predictions) bykeeping close watch on market trends
Group Joint Purchasing
Switching to logistics services withhigher fuel efficiency through the
adoption of eco-driving practices, thephased introduction of next-generation
vehicles, and other measures

In implementing M&A activities as animportant growth strategy and developing logistics facilities to promote the3PL business, we primarily procure
funding through loans from financial institutions, and a worsening of thefinancial environment could be a factor
in rising costs.

Difficulties in obtaining funding for strategic investments, or increased interest rates to finance loans could occur.
In addition, depending on the degree
to which the environment deteriorates,
some of the financial covenants attached to loans could be violated.

Measures including paying downinterest-bearing debt through thesecuritization of logistics facilities andoperating cash flow, and securing fixedinterest rates
Smarts arrangements in securing funds(fixing of interest rates, etc.)
Diversification of funding methods

When expanding its existing businesses and entering new fields of business, the SBS Group implements
M&A activities, capital participation andcapital tie-ups as part of its businessstrategy. There is a risk that these activities might not go as well as initiallyplanned.

Due to unexpected circumstances,the progress of a business plan following an acquisition or tie-up could besignificantly delayed compared with initial forecasts.

Thorough due diligence conducted inadvance

The key activities of the SBS Group’s
Property Management Business are
the development of real estate such as
logistics facilities, and the provision ofthat real estate (through sale or leasing)to customers. If we are unable acquire
customers who will use the developed
real estate according to our plans, it
could be a factor in declining sales andprofits. In addition, there may be cases
in which the posting of sales and profits
is delayed or is disproportionately allocated to certain time periods due to thetiming of when an order for a logistics
facility is received, the scale and specifications of the project, or the timing forcompletion or sale.

The impact on sales and profits whencustomers cannot be acquired asplanned could be non-negligible, depending on the investment amount.
Additionally, the same would apply if
the sales and profits were skewed towards certain time periods or delayed.

[Short-term]
Likelihood of
occurrence
Degree of Impact
Potential forcontrol

Risks due to sharp rises
in fuel prices[Short, Medium and Long-term]
Likelihood of
occurrence
Degree of Impact
Potential forcontrol *1

Risks associated with aworsening financial
environment[Short and Medium-term]
Likelihood of
occurrence
Degree of Impact
Potential forcontrol

Risks due to M&A
activities[Short and Medium-term]
Likelihood of
occurrence

Systematic implementation of
post-merger integration (PMI)* Even in the cases of capital
participation or tie-ups, similar action istaken

Degree of Impact
Potential forcontrol

Risks due to the realestate business[Short and Medium-term]
Likelihood of
occurrence
Degree of Impact
Potential forcontrol

Careful arrangements with the top
management of the company to beacquiredDevelopment of logistics facilities
predicted on securing customers* We begin construction work on
facilities after determining tenantconsignors and sales destinations, aswell as factors such as intended use,
specifications, rent and rental period
Detailed development schedulemanagement
Preparation of schemes to securitize
developed logistics facilities*1 Controllability has improved due to the advancement of initiatives to enhance fuel efficiency

SBS GROUP
Integrated report 2023

38

Controlling Management Risks

Management Status of Major Risks

Risk

Overview

EffectResponse Status

Risks due to legislativechanges

The SBS Group’s operation is affectedby various laws and regulations, andchanges to these laws and regulations in
response to changing social conditions.
In our core logistics business, for example, various business laws related tologistics apply to cargo vehicle transportation operations, warehousing services
and customs brokerage. In the property
management business, the BuildingStandards Act and Financial Instruments
and Exchange Act play a part, and inpersonnel support, the Worker Dispatch
Act must be followed.

New cost burdens could be imposed,or changes could be required in business expansion due to systems being
revised, strengthened or subjected toa different interpretation based on related laws and regulations changing inline with changing social conditions.

Collecting information through industry
groups and other organizations

The business activities of the SBSGroup revolve around truck-basedtransportation and the operation of logistics centers, and these operations
are susceptible to natural disasters,
anthropogenic disasters, and other incidents. In particular, the SBS Group
has situated many logistics sites in theTokyo metropolitan area to cater torobust logistics demand in that region,and if the Tokyo metropolitan area wasaffected by such a disaster, it would
have a significant impact on the SBSGroup.

When an event such as a major disaster occurs, SBS Group operations
could be cut off and the Group may
be unable to provide some or all of its
logistics services, due to damage toconsignor companies or Company facilities, disruption or cutting off oftransportation networks, and the shutdown of lifelines.

Anticipating the state of damage throughthe formulation of business continuity
plans (BCP), and preparing of response
measures

When an outbreak of a serious infectious disease occurs, the SBS Groupbusinesses would be forced to takemeasures not usually implemented toprevent the spread of infections, and if
the situation worsened, it could eventhreaten continued operations.

The outbreak of an infectious diseasecauses various restrictions on thebusiness activities of the SBS Group.
Taking measures to prevent infectious
causes higher costs.

Thorough hygiene management forbusiness sites and vehicles

As the SBS Group uses public roads
to transport customers’ products andgoods by truck and other vehicles,
there is always a risk of traffic accidents.

If a major accident in which many people’s lives are lost occurred, the Company could be sued by the victims, suffer adecline in credibility among customers
and society, or be subjected to action
imposed by authorities, such as being
suspended from operating vehicles or
conducting business.

Continued operation of SBS Groupwide
transportation safety management under
the SBS Group Transportation Safety
Promotion Meeting

The SBS Group utilizes computersand networks for a range of applications from business systems to
manage customers’ cargo information,
warehouse control and customs processing to in-house systems that
handle accounting, staff, salaries andother operations. There is a risk ofthese systems failing or operating incorrectly due to malfunction, computerviruses, cyberattack, natural disasters
or other incidents.

If any of these systems were to fail due
to malfunction, computer viruses, cyberattack, natural disasters or other incidents, the provision of services tocustomers and business partners may
be interrupted, business processing
may be delayed, or operations could
be thrown into confusion. There is also
a risk of causing unintentional damage
to a third party.

Promotion of Group-wide security
measures, training and awareness-raising under the SBS Group Information
Security Promotion Meeting[Short and Medium-term]
Likelihood of
occurrence
Degree of Impact
Potential forcontrol

Risks related to natural
disasters, anthropogenic
disasters and otherincidents[Short, Medium and Long-term]
Likelihood of
occurrence
Degree of Impact
Potential forcontrol

Risks associated withpandemics[Short and Medium-term]
Likelihood of
occurrence

Preparations and actions in anticipationof legislative changes

Periodic implementation of training toprepare for major disasters and otherincidents
Ensuring the earthquake resistance ofthe main buildings used for projects
Decentralization of major business sites
to the extent possible

Thoroughly ensuring that employees takesteps to prevent and stop the spread of
infection based on national government
guidelines

Degree of Impact
Potential forcontrol

Risks due to serious
incidents[Short-term]
Likelihood of
occurrence
Degree of Impact

Promotion of transportation safety basedon the three pillars of education andawareness-raising, accident prevent,and safe driving/operation management

Potential forcontrol

Risks due to system
shutdowns[Short and Medium-term]
Likelihood of
occurrence
Degree of Impact
Potential forcontrol

39

Strengthened defenses with AI-based
anti-virus tools and next-generation
firewalls
Enhanced monitoring and checking
functions through security operation
center (SOC) service
Third-party verification

Risk

Overview

EffectResponse Status

Risks due tothe leaking of customer
information

The businesses conducted by the
SBS Group involve handling large
amounts of customer information, including personal information, and there
are potential risks of the leaking ofcustomer information or the destruction of data.

If an incident such as the leaking ofcustomer information or destruction ofdata were to occur, the trust earned
from customers could be lost, and theincident could affect the Group’ s business performance and financial situation.

Clearly establishment of the proper
management of customer information incorporate ethics regulations

The SBS Group conducts its businessactivities based on laws related to thelogistics business and a wide range ofrules and social norms. Infringementsof these requirements in any way
could have a serious impact.

In the event of an infringement of related regulations or improper conduct on
the part of an officer or employee, the
SBS Group could suffer the loss ofsocial credibility, suspension of business from customers, or claims forcostly monetary penalties or compensation.

Establishment of the SBS Group Codeof Behavior and SBS Group Compliance
Regulations[Short and Medium-term]
Likelihood of
occurrenceContinued implementation of measures
ensuring the proper management ofcustomer information and personal
information as part of information security
management

Degree of Impact
Potential forcontrol

Risks related tocompliance[Short and Medium-term]
Likelihood of
occurrence
Degree of Impact

Distribution of awareness-raising tools
and periodically conduct awarenesssurveysPotential forcontrol

Risks related to overseas
expansion[Short and Medium-term]
Likelihood of
occurrence

Conducting awareness-raising activities,
monitoring, confirming and investigatingcompliance violations and driving
improvements, primarily through the SBSGroup Compliance Meeting in whichGroup companies take part

While the SBS Group has worked to
expand its business overseas toensure continued growth into the
future, those businesses are affectedby conditions in the countries and regions in which we operate.

There are possibilities of changing
economic conditions, recessions, exchange rate fluctuations, political or
legislative changes, and social unrest
due to terrorism, war or disease, in
addition to trouble stemming from alack of understanding of the local culture or international standards, andmatters in conflict with international
norms, standards or guidelines.

Ongoing collection and analysis of
information concerning the countries andregions in which we operate

The SBS Group recognizes the importance of human resources and focuses on hiring activities, education andtraining, but there is intense competition to continually secure the necessary human resources, and such efforts may not proceed as planned.

If we are unable to secure human resources in a timely fashion, experiencea large exodus of human resources toelsewhere or if the development of
human resources does not proceed
according to Group plans, our business development, operating results or
growth forecasts could be significantly
impacted.

Proactively hiring talented humanresources without drawing distinctions
between graduate or mid-career hires

Degree of Impact

Ensuring alternate means during an
emergency

Potential forcontrol

Risks related to theacquisition and developmentof human resources[Medium-term, Long-term]
Likelihood of
occurrence

By conducting various training for all
employees of Group companies basedon the basic policy on human resource
development, supporting skill
improvement and career development
Promotion of diversity and thedevelopment of a comfortable workplace

Degree of Impact
Potential forcontrol

Risks associated withclimate change[Medium-term, Long-term]
Likelihood of
occurrence
Degree of Impact
Potential forcontrol* See page 41-42 for details.

Because of climate change, stepped up
restrictions on CO2 emissions may be
pursued based on international agreements, and carbon pricing may be introduced. Other incidents may also occur,
including flooding damage to businesssites in coastal areas due to rising sea
levels, disruption or interruption of transportation networks due to winddamage, water damage or heavy snowfall, impacts due to supply outages forlifelines such as electricity and water,and health hazards to employees due
to abnormal weather (heat stroke, etc.).

Changes in the environment surrounding the markets or systems will produce factors that increase business
expenditures, such as higher prices forCO2 emissions and costs to transition
to low-emission technologies. In addition, physical impacts may cause
damage to business assets or reduce
operational capacity.

Promoting systematic businessstrategies and environmental strategies
based on a low-carbon approach
Strengthening environmental
management systems
Stockpiling for emergencies
Enhanced disaster responsemanagement

SBS GROUP
Integrated report 2023

40

Climate Change Risk Structure andInitiatives

Responding to global climate change is one of
the Sustainable Development Goals (SDGs), andsince the Paris Agreement took effect on November 2016, efforts have been underway around theworld. Japan is no exception. In October 2020,
the government declared that Japan would
achieve carbon neutrality by the year 2050,
making action on climate change even more important. Based on the recognition that action on
the issue of climate change is an important challenge both for corporate value and the development of a sustainable society, the SBS Group announced its support for the recommendations of
the Task Force on Climate-related Financial Disclosures (TCFD) in December 2022, and has
been promoting its climate response actions inaccordance with the recommendations, as detailed below.

Sustainability Promotion Structure
SBS Holdings Board of Directors
SBS Group Sustainability Promotion Committee
Chairperson: Representative Director of SBS Holdings /Committee Members: Representative directors of SBS Group companies
SBS Group Risk Management Council
SBS Group Compliance Meeting
SBS Group Environmental Management Promotion Meeting
SBS Group Transportation Safety Promotion Meeting
SBS Group Information Security Promotion Meeting

41

Practical
Coordination

SBS Group Operating
Companies

Governance Structure for Climate-related Issues
The SBS Group has established the Sustainability Promotion
Committee as its axis of sustainability management. The
committee, which is also an advisory body to the Board of
Directors, convenes once a month, engages in the drafting ofsustainability strategies and action policies, monitors KPIs andthe status of coordination in activities within the Group, andrefers matters requiring a decision to the Board of Directors.
The representative director of SBS Holdings chairs the committee, whose members comprise SBS Holdings directors and executive officer, as well as the representative directors of SBSGroup companies. In addition, the Sustainability Promotion Department serves as the administrative body for the committee.
We have established five meeting bodies as subordinate bodies
under the committee, namely the Risk Management Meeting,Compliance Meeting, Environmental Management Promotion
Meeting, Transportation Safety Promotion Meeting and Information Security Promotion Meeting. These meeting bodies draft
and implement measures in their respective areas of responsibility based on the action policy set by the committee. The Sustainability Promotion Department performs administrative duties
for the Risk Management Meeting, Compliance Meeting andEnvironmental Management Promotion Meeting, while the Logistics Quality Control Department and IT Planning Department
do the same for the Transportation Safety Promotion Meetingand Information Security Promotion Meeting, respectively.
Under this structure, the SBS Group plans, determines andimplements its response to ESG issues, including the issueof climate change.

Risk Assessment and Strategy[Risk assessment] The Sustainability Promotion Committee
checks and assesses the implementation status of environmental activities within the SBS Group. On environmental matters, the committee checks and assesses the status of target
achievement for things such as CO2 emission reduction status
and violations of environmental laws. In addition, the Environmental Management Promotion Meeting assesses risks andopportunities related to climate change, deliberates and assesses the need for changes or improvements to importantmatters concerning the promotion of environmental management such as the formulation and monitoring of major environmental KPIs and medium- to long-term targets, and undergoes review for approval by the representative director of SBS
Holdings, who chairs the Sustainability Promotion Committee.
[Strategy] The SBS Group handles management risks in acomprehensive manner (see page 37). We have currently established 15 categories of risk events that have the potential toaffect the SBS Group’s short, medium and long-term manage-

ment results, share price and financial condition. We view climate change risks as the most important of these risks, and asdetailed in “Climate Change Scenario Analysis” below, we perform analyses of climate change scenarios to ascertain theimpact of climate change-related risks and opportunities. In addition, we have made it a condition that directors put in chargeof sustainability matters including climate-related issues havemade work experience in the field of sustainability including climate change issues, and possess the ability to develop proposals and provide briefings at SBS Group Sustainability Promotion Committee meetings and Board of Directors meetings.

Scenario Analysis
Based on the recognition that risks and opportunities associatedwith climate change have a significant bearing on the businessstrategy of the SBS Group, under a promotion structure led by the
Sustainability Promotion Committee we undertook the identificationand materiality analysis of climate-related risks and opportunities
through the following process using 1.5°C and 4°C scenarios.
[1.5°C scenario] This scenario envisages rising costs due tostrengthened regulations including the introduction of carbon
tax, and the risk of rising prices for energy sources. To achieve“Sincere Challenge 2030,” the Group is working on anumber of initiatives as priority challenges, including the introduction of next-generation vehicles, the procurement of electricity from renewable energy sources, the increased installation of solar power generating equipment, and improvements
to the in-house utilization rate for renewable energy.
[4°C scenario] In anticipation of even higher physical risks dueto the increasing severity of natural disasters, we will consider thepromotion of disaster preparedness-related investments, including
BCP measures that include climate disasters (management of
hazard information for each site, risk information analysis and detection, etc.). In addition, since the logistics business involves manual
work performed outdoors and in warehouses, lost productivity andemployee health hazards due to rising air temperatures are a concern. We will pursue efforts to improve workplace environments
and introduce DX for labor saving and efficiency improvements.

Metrics and Targets
Since FY2018 the SBS Group has been working on Sincere
Challenge 2030, its mid-to-long-term environmental plan. The
plan comprises a slogan, medium-to-long-term priority issues
and a medium-term action plan (Environmental Action 2023),
and is being pursued in a sincere and proactive manner.
[Reference scenarios]● 1.5°C scenario: SSP1-1.9 and RCP2.6● 4°C scenario: SSP5-8.5 and RCP8.5● Other reference: IEA “Net Zero Emissions by 2050 Scenario”

Process for Identifying Risks and Opportunities Associated with Climate Change
Step 1

Identify risks and opportunities

Step 2

Organize the risks andopportunities according toshort, medium and longtime spans

Step 3

Assess the degree of
impact and the likelihood of
occurrence

Step 4

Study response measures

SBS GROUP
Integrated report 2023

42

Climate Change Risk Structure andInitiatives

Results of scenario analysis

Category

Transition risks

Category

Expected risks and opportunities

Policy and regulations

Risk of increased business expenditures due to taxation proportional to energy consumption (greenhouse gas emissions) through the full-scale
introduction of carbon taxing in connection with strengthened domestic environmental regulations

Risk that the costs of carbon reduction measures will riseTechnology market
risks
Risk that funding will be procured on less competitive terms than other companies due to an inability to utilize green financing, etc.

Reputational risks

Acute

Risk that corporate reputation will deteriorate (leading to reduced access to capital and deterioration of corporate competitiveness) due to delays indisclosing environmental information and implementing environmental activities, including in relation to climate change
Risks of employee harm, delayed business recovery, stoppage of business activities or shutdown of services due to climate disasters such as torrential rain, flooding and typhoons, and possibility of an impact on earnings
Risk of rising costs associated with damage to company assets due to climate disasters

Physical risks

Chronic

Risk of adverse impact on employee health and reduced productivity due to rise in average temperatures

Opportunity to reduce CO² emissions and decrease fuel costs with the introduction of next-generation vehicles
Energy sources

Opportunity to reduce CO² emissions by using renewable energy

Opportunities
MarketOpportunity to reduce funding costs by utilizing green finance as a result of ensuring environmental advantages

Resilience

Opportunity to reduce electric power procurement costs and secure a power supply for emergencies with the in-house use of solar
power generation

Defining Major Financial or Strategic
Impacts When Identifying andAssessing Climate-related Risks
With regard to major financial or strategic impacts
when identifying and assessing climate-related risks
and opportunities, members of the SBS Group
Sustainability Promotion Committee, chaired by the
Representative Director, comprehensively deliberate over financial matters that could have somedegree of impact on sales, including perspectives
such as funding resources, human resources, thesize of financial statements and the business plansof each operating division. After determining whichrisks and opportunity could have a significant financial impact, approval is finally sought from theBoard of Directors. Note that the size of a major financial or strategic impact on business is defined
based on a risk or opportunity having a certain
degree of impact on sales or costs, etc., and thelikelihood of the risk or opportunity materializing.

43

Major financial impacts (expectations based on hypotheticals as of 2030)
Type

PeriodLikelihood of
occurrence

Risk 1

Risk of increased business expenditures due to taxation proportionalto energy consumption (greenhouse gas emissions) through thefull-scale introduction of carbon
taxing in connection with strengthened domestic environmental regulations

Policy andregulations

Long-term

High

Risk 2

Risk that corporate reputation will
deteriorate due to delays in disclosing environmental information andimplementing environmental activities, including in relation to climatechangeReputation

Mid-term

High

Risk 3

Risk of adverse impact on employee health and reduced productivity
due to rise in average temperatures

Chronic physicalrisks

Mid-term

High

Opportunity 1

Opportunity to reduce CO ² emissions and decrease fuel costs with
the introduction of next-generation
vehiclesDecrease in
expenses

Mid-term

Almost certain

Opportunity 2

Opportunity to reduce CO ² emissions by using renewable energy

Low-emission
energyLong-term

Very highRisks and opportunities

Time of occurrence
Measures Addressing the Expected Risks and Opportunities

1.5°C scenario

Medium- Long term
Short term term from from 2031 Degree of Likelihoodofto 2025
Impact2026 toandoccurrence
2030
beyondOverallevaluation

4°C scenario

Overallevaluation

15 > ●

Degree of LikelihoodofImpactoccurrence

15 > ●

Set CO² emission reduction targets, and promote initiatives to reduce emissions (introduction of next-generation vehicles, procurement of green electric power, creation and improved in-house use of renewable energy)● Visualize financial impact through the introduction of internal carbon pricing (ICP)

●

5

5

●

2

2

Utilize subsidies when introduction next-generation vehicles, reduce costs of introduction by cooperating with alliances, and introduce vehicles systematically in light ofmarket trends and other factors

●

4

5

●

1

2

Strengthen the continuity of sustainability (develop systems that take the environment, society and corporate governance into account)

●

5

4

●

2

2

●

Strengthen appropriate disclosure systems for climate change issues and sustainability information

●

5

5

●

2

2

Strengthen BCP measures against natural disasters (1. dispersal of sites, 2. installation of solar power generation and storage battery equipment, 3. relocation to
low-risk regions, etc.)

●

4

4

●

5

5

●

Strengthen and reinforce facilities based on hazard information

●

4

4

●

5

5

●

●

2

2

4

4

●

●

4

5

●

2

3

●

●

Take measures to keep workers cool such as upgrading air conditioning equipment,using tools that provide cooling during outdoor work, or wearing fan-equipped attire
Promote logistics operations (1. promoting automation, labor saving or unattended
operations, 2. providing a comfortable work environment)

Introduce next-generation vehicles (EVs, hydrogen-powered vehicles, etc.)
Procure renewable energy-derived electric power and promote the in-house use ofsolar power generation

●

4

4

●

2

3

Accelerate funding related to green projects such as green bonds

●

5

4

●

2

2

Reduce electricity procurement costs and secure a power supply during emergencies
with the introduction of renewable energy

●

4

4

●

3

2

Countermeasures

Details of Risks (Basis for Calculation of Financial Impact)

Responding to priority issues based on the
Mid-to-Long-Term Environmental Plan
・Introduction of next-generation vehicles
・Introduction of electric power derived fromrenewable energy
・Ongoing upgrades to solar power generating
equipment and improved in-house utilizationrate■ Forecast carbon tax prices (2030)
・1.5°C scenario: 140 dollars/t-CO² = 18,578 yen/t-CO²
・4°C scenario: 90 dollars/t-CO² = 11,943 yen/t-CO²* Prices of 2030 carbon taxes according to each scenario for developed countries
including Japan are quoted from “World Energy Outlook 2022” (based on an
exchange rate of 1 USD = 132.70 JPY; see mid price from December 30, 2022)★ Tax burden = CO² emissions × tax price × years of impact

Setting of appropriately metrics and targets forclimate change issues and sustainability
information, and improvements to timely
disclosure systems■ Stock investment reduction rate: approx. 14%(1) 61.9% (sustainable investments as a percentage of total assets under management)(2) 22.2% (stock investments as a percentage of the sustainable investment percentage)(3) Sustainable stock investments as a percentage of total assets under management)①×②=13.7%≒14%* The investment ratios of (1) and (2) quote data from “Whitepaper on Sustainable
Investment in Japan 2022”★ Market capitalization × (3) = decrease in stock value

Improvements (air conditioning, nature of tasks)
to the work environments of field personnel(drivers, on-premises workers)■ Rate of decline in labor productivity: 1.10% (on-premises workers, drivers)
Under the RCP8.5 scenario which assumes a severe temperature rise, averagetemperatures are expected to rise by 1.5°C by 2030, which indicates a 1.10% decline inproductivity.
* Citing Climate Impact Explorer productivity projects based on the RCP8.5 standard★ Net sales in the transportation segment (logistics segment) × rate of labor productivity
declineRelatively highCost reduction of approximately 66%
Reduction of CO² emissions by
between one- and two-thirds

Introduction of next-generation vehicles■ Reduction rate in fuel costs: 66%
Based on the mileage performance and unit prices of fuel for EVs and light oil, theamount needed to drive 1 km is determined to calculate the percentage difference.
*1. Based on mileage performance figures for small- and medium-sized vehicles
published by manufacturers and fuel unit prices published by the industry andgovernment*2. Costs and CO2 emission reduction impact vary depending on daytime and nighttime
charging

Relatively high
The cost impact varies depending on themethod of electricity procurement

Procure renewable energy-derived electric power
and promote the in-house use of solar power
generation■ Reduce Scope 2 emissions
・Strengthening of renewable energy creation and impacted in-house utilization rate
・Procurement of electric power derived from renewable energy (including PPA
introduction)

Financial impact (on an annual monetary basis)
Relatively high
1.5°C scenario

Increase of approximately
1.9 billion yen
4°C scenario
Increase of approximately
1.2 billion yen* Provisional calculation based on FY2022
emissions

High
Reduction of 15.4 billion yen* Provisional calculation based on market
capitalization as of the end of FY2022

High
Reduction of 4.7 billion yen* Provisional calculation based on FY2022
net sales●●

SBS GROUP
Integrated report 2023

44

SDGs at the SBS GroupThe SBS Group is keenly aware of its responsibility as a company handling logistics as a key
part of social infrastructure. We also place an importance on the sustainable development
goals (SDGs) and their role in providing direction for solutions to the various issues facing
the world. Helping to achieve the SDGs is one of the key aspects to our management policy.

The Future Vision
the SBS Group is Shaping Through the SDGs

The SBS Group views the SDGs as its vision for creating a betterworld with all stakeholders towards the year 2030. Additionally, inthe context of the SBS Group’s business activities, we haveshaped four future visions and are pursuing efforts aimed at its
realization.

Build efficient and sustainable logistics
systems in Japan and around the world
Making full use of evolving technologies, we will takethe convenience,safety and environmental
performance of logistics systems - the foundation ofsocial lives and industrial activity - to the next level.

Maximize opportunities for social
activities to be helpful
To the extent that is reasonably possible, we will
maximize opportunities for logistics systems tocontribute to social activities across a wide range ofactions, from the transportation of relief supplies tothe promotion of resource recycling .

Make opportunities for anyone todemonstrate their individuality
and succeed the new normal
To build an inclusive world, we will create direct
and indirect opportunities for all kinds of people todemonstrate their individuality and pursue theirtrue potential.

Expand partnerships with a diverse range
of entities to every corner of society
In each area where the SBS Group operates, we will expand
cooperative relationships with a wide range of parties, fromgovernments and financial institutions to research organizations,non-profit groups, and individual consumers.

45

Main issues
Ensuring safety
The SBS Group will pursue improvements to safety and contribute to the reduction of traffic accidents in society.

Consideration of the environment
Build efficient and sustainable logistics systems inJapan and around the world

The SBS Group will promote the improved efficiency and introduction of cleansources in its energy uses, contributing to reduced carbon utilization.

Providing new value through total logistics solutions
The SBS Group pursues improved efficiency inlogistics as a part of social infrastructure, helping to make cities and towns more livable bycontributing to improved lifestyle convenience,
reduced environmental impact and other advancements.

Maximize opportunities forsocial activities to be helpful

Make opportunities for anyone to demonstrate their individuality and succeed the
new normal

Expand partnerships with adiverse range of entities toevery corner of society

Contributing to local communities
The SBS Group contributes to local communities in various ways primarily through its business activities.

Respect for human rights and diversity
The SBS Group respects human rights and diversity in every
aspect of its business activities.
In addition, we do not tolerate harassment or discriminatory behavior in any form.

Partnerships aimed at co-creation
The SBS Group will create value in its cooperative relationships
with stakeholders.

Building governance that supports sustainability management
The SBS Group will aim to develop responsible governance that
contributes to sustainability management.

SBS GROUP
Integrated report 2023

46

SDGs at the SBS Group

Transportation safety management
Driver contests
KAIZEN activities
Advancement of 5S

Support for food banks

Promotion of various initiatives to ensure
safety❶ Implementation of a safety training
curriculum❷ Improved accident rate
Reduction of air pollution due to exhaustgases

The SBS Group’s Initiatives
to Address the SDGs

Career advancement training for
women
Eruboshi corporate certification
Developing an environment enabling
employees to flexibly balance live eventswith work❶ Strengthen activities that promote theactive participation of women and develop
environments that champion the successof women❷ Promote women’s career advancement❸ Promote the appointment of women to
managerial positions

Introduction of power derived
from renewable energy
Promoting the introduction ofenergy-saving lights
Eco and safe driving training
Improved energy efficiency and the
expansion of renewable energy❶ Improved vehicle fuel efficiency❷ Promotion of renewable energy
creation

47

Scholarship Program(SBS Kamata
Foundation) for students
receiving social care

General Workplace Consultation
OfficeCertification System for Pleasant
Workplace Development
Certified as a Kurumin company
Various commendation systems
Support for employee skills and careerdevelopment❶ Job class-specific training❷ Specialized theme-specific training❸ Division-specific training
Improve employees’ work-life balance❶ Ratio of childcare leave taken by male
employees❷ Annual paid leave acquisition rate
Achieving productive employment andfulfilling, dignified work (decent work)

Fostering logistics research(SBS Kamata Foundation)
Expanding and strengthening logistics
functions as social infrastructure❶ Promotion of improved logistics efficiency
through a strengthened 3PL business❷ Development of last-mile transportation
systems (providing access to sustainabletransportation systems)❸ Promotion of logistics DX (promoting
improved efficiency through the utilizationof LT×IT)

Human Rights Policy
Diversity Policy
Diversity Promotion Seminar
Declaration on Respect for Human Rights and Elimination of Harassment

Recycling waste

Business continuity plan
Detection of risk information
Network of sustainablelogistics sites

Promotion of the Sincere Challenge 2030
medium-to-long-term environmental plan
❶ Reduction of water consumption

Introduction of power derived from renewableenergyEco and safe driving training
Promoting the introduction of energy-saving
lightsModal shift
Promotion of the Sincere Challenge 2030
medium-to-long-term environmental plan
❶ Reduction of CO 2 emissions
Promoting the introduction of next-generation
vehiclesCorporate forest activities
Supporting groups engaged inforest preservation activities

Compliance training for
management personnel
Audit & Supervisory Committee
Member Hotline
Attorney Hotline

Partnerships associated with businessactivities and sustainability management
Support for the social sector

SBS Toshiba Logistics

Group Companies

Achieving energy and labor-saving operations with renewable energy and automation equipment

Employment of foreign technical interns

Corporate forest activities

Technical interns have been learning everythingfrom basic logistics knowledge and skills at ourbusiness sites to Japanese language, Japanese culture and workplace safety with great
enthusiasm and surprising speed. The acceptance of technical interns has allowed us todirectly experience different approaches fromour own and been a valuable opportunity to
deepen our understanding of diversity andacceptance.

Based on the concept of “forest development andhuman development,” we have continued toengage in corporate forest activities (the forest
cycle) since 2011. These activities have threeaims, to preserve the greenhouse gas absorption
capabilities of forests, to conserve biodiversity, andto cultivate people who understand the importanceof environmental conservation, including the forest
cycle. Going forward, we will continue with activities focused on the forest cycle and human development with the aim of contributing to the SDGs.

Technical interns from Vietnam

Corporate forest managed by the SBS Ricoh
Logistics Group (Mount Ontake)

In addition to introducing shelf carrying robots
and saving labor in picking operations, we havealso achieved energy savings by operating on
renewable energy from solar power generation.
We have also achieved further energy savingsby covering the electricity for in-facility lightingwith renewable energy.

The work performed by staff has been greatly
reduced to just picking

SBS Ricoh Logistics

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48

For a Sustainable WorldThe SBS Group has been working to achieve sustainablegrowth and solve social issues, but the environment surrounding companies has changed significantly, making it increasingly
important for companies to strike a balance between achievinga sustainable society by solving social issues and continually
improving corporate value. In light of this, we have developed
systems related to sustainability as detailed below.

SBS Group Sustainability Policy
In January 2023, the SBS Group established the following sustainability policy. The aim is to demonstrate the values and goals that
employees emphasize in implementing sustainability management
while appropriately disclosing our policy to stakeholders.
Befitting a company that makes its living from logistics, “connections”
are a central theme of the policy. The theme of three “connections,”
with people, society, and the earth, is common among key challenges. The details are also consistent with the United Nations Global
Compact, which the SBS Group supports.

Basic Principles
In the spirit of our management philosophy of “respecting people andfulfilling its social responsibility,” the SBS Group aims to contribute to
the stability of people’s lives and the realization of a sustainable society
through logistics, which is social infrastructure. To achieve this, under
the following policy, we will actively promote sustainable initiatives by
having all employees of our group recognize themselves as membersof the international community.

Basic Policies(1) We value people’s connections and people’s thoughts• We protect and respect human rights and diverse sets of values
in all of our corporate activities.
• We foster a corporate culture in which a diverse range of humanresources can accept and cooperate with one another, andprovide an environment that allows employees to work safely andin good health.
• We provide timely and appropriate training and cultivate humanresources who can contribute to society through value creation.

(2) We connect with society and meet society’s expectations• We observe laws, regulations and international rules, conductbusiness with fairness and integrity, and work to thoroughly prevent
corruption.
• We respect social rules, develop mutual trust with local communities and contribute to society through our business activities.
• We engage in appropriate information disclosures and dialogue
with stakeholders, making earnest efforts to meet the requirements and expectations of all stakeholders.

(3) We connect with the earth and consider its future• We consider thorough environmental management to be a key
challenge, pursue a reduced environmental impact in all of our businessactivities, and do our best to preserve the global environment.
• We are continually aware of the risks of climate change, anddrive efforts to reduce greenhouse gas emissions to create adecarbonized society.

49Participation in the United Nations Global Compact
In January 2023, the SBS Group expressed its support for the United
Nations Global Compact. The United Nations Global Compact sets
out ten principles concerning human rights, labor, the environment
and anti-corruption. The SBG Group respects these principles in allof its entire corporate activities. Details of the ten principles are listedon the SBS Holdings website.

<The Ten Principles in Four Areas of the United Nations Global Compact>
Human rights
Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; andPrinciple 2: Make sure that they are not complicit in human rights abuses.
Labor
Principle 3: Uphold the freedom of association and the effective recognitionof the right to collective bargaining;
Principle 4: Support the elimination of all forms of forced and compulsory
labour;Principle 5: Support the effective abolition of child labour; andPrinciple 6: Support the elimination of discrimination in respect to employment and occupation.
Environment
Principle 7: Support a precautionary approach to environmental challenges;
Principle 8: Undertake initiatives to promote greater environmental responsibility;
Principle 9: Encourage the development and diffusion of environmentallyfriendly technologies.
Corruption prevention
Principle 10: Work against corruption in all its forms, including extortion andbribery.

SBS Group Sustainability Promotion Committee
In January 2023, the SBS Group established the Sustainability
Promotion Committee to develop and strengthen a management
system consistent with its sustainability policy, to put sustainability
management into practice on a Groupwide basis, and to balance
the achievement of a sustainable society with the ongoingenhancement of corporate value.
The committee is positioned as an advisory body to the Board of
Directors and will formulate sustainability strategies and action
policies for the entire Group, while monitoring KPIs and the statusof coordination in activities within the Group. The committee ischaired by the representative director of SBS Holdings, and its
members comprise SBS Holdings directors and executive officers,
as well as the representative directors of SBS Group companies.
■ SBS Group (SBSG) Sustainability Promotion Structure
SBS Holdings Board of Directors
SBSG Operating
Companies

SBSG Sustainability Promotion Committee
Chairman: Representative Director of SBS Holdings
Members: Representative Directors of each company

SBSG Risk-Management Committee
SBSG Compliance Committee

Company A
Company B

Practical
Coordination

Company C

SBSG Environment Management
Promotion Committee

Company D

SBSG Transport Safety
Promotion Committee

Company E

SBSG Information-Security
Promotion Committee* The members of the above meetings are composed of the general managers ofadministrative divisions, related divisions, and persons in change

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50

For a Sustainable World

Concrete Action on Key Challenges
For the key challenges of safety, the environment and human capital (see pages 13-14), we have identified priority
issues for each and set key performance indicators (KPIs) to monitor the results of our efforts.

Main Priority Issues

Main Targets

Climate change
Carbon reduction●
Recycling of resources●
Air pollution●
Environmental protection●
Regulation compliance●
Improvement of fuel consumption

Reduction in CO 2 emissions per unit of sales●●

Reduction of at least

3% year to year

Reduction of NOx and PM emissions in exhaust gases
Reduction of at least

1% year to year

Improved vehicle fuel efficiency
Improvement of at least

1% year to year

Reduction in water usage per employee
Reduction of at least

1% year to year

Major Risks
Increased response costs
Loss of social reputation●
Suspension of business activities●
Impact on funding●●

Main Opportunities

Main Priority Issues

Cost control from improved
fuel efficiency●
Differentiation throughinnovativeness

Vehicle accidents
Occupational accidents●
Facility fires●
Cyber attacks●
Natural catastrophes●●●

SBS Next Stage 2025

Major Risks

Enhancement

Management

Realization of a

of Corporate

Strategies

Sustainable

Value

Society
Sustainability Management

Loss of trust
Interference with businessactivities●
Industrial accidents●
Impact on funding●●

Key Challenges of the SBS Group
SafetyHumanresources

Environment

Governance

Main Opportunities
Enhancement of credibility
Improved external recognition●
New business opportunities●●

Main Targets
Reduction of accident
rate per vehicle
Main Opportunities

Major Risks

Main Priority Issues
Securing and retaining human capital●
Human capital development●
Workstyle reforms●
Health and productivity management●
Diversity●

Decline of competitiveness●
Lost business opportunities●

New value creation due to workforce diversity●
Promoting innovation●
New business opportunities●

Main Targets
Ratio of females inmanagerial positions

6.0% (2023)
7.0% (2024)
8.0% (2025)

51

Consideration andimplementation of improvements
to systems supporting the active
participation of women

Annual paid leave acquisition rate

Implement new
initiatives

16.7% (2022)

53.5% (2022)
Ratio of childcare leave taken by male employees

0.80% (2023)
0.65% (2024)
0.50% (2025)

Integration of Management Plan and Sustainability Plan
We have incorporated “strengthening the foundations of sustainability management” and “human capital
initiatives” as priority measures in our three-year medium-term management plan and have also set them as
areas of focus based on materiality (safety, the environment, human capital).

Building a system aimed at balancing the creation of a sustainable society with the enhancement of corporate value
Enhancing governance that supports sustainability management
Initiatives tackling material issues (materiality) in the three areas of safety, the environment and human capital
Provision of safety and secure logistics services with the aim of zero serious accidents

Safety●Promotion of transportation safety management●

Steady implementation of a safety education curriculum

Development of environmentally friendly logistics facilities, transportation and delivery systems

Environment

Human resources●

Introduction of next-generation vehicles, initiatives to improve fuel efficiency●

Provision of streamlined logistics facilities utilizing LT and IT●

Reduction of greenhouse gas emissions

Improving human resource and organizational capabilities to enhance the overall
strength of the Group

Relationship between the Medium-Term Management Plan andMedium-to-Long-Term Environmental Plan
The Medium-to-Long-Term Environmental Plan is coordinated as an indicator of priority items in theMedium-Term Management Plan.

The SBS Group's Three-YearManagement PlanSBS Next Stage 2025

SBS GROUP
Integrated report 2023

52

ENVIRONMENT
Review of Initiatives
In fiscal 2022, total CO2 emissions increased 3.6% year on year, in part due to the addition of environmental
data from SBS Furukawa Logistics, which joined the SBS Group the year before. However, CO2 emissions perunit of sales, which indicates the environmental efficiency of the entire SBS Group, declined 6.8% year on year,
enabling the Group to achieve positive results to a certain degree. In terms of measures implemented, while stillat the verification stages two 1-ton EVs were added for last mile delivery services. In addition, we have begun
steps toward the full-scale implementation of priority challenges for 2030 in reducing vehicle greenhouse gas
emissions and utilizing renewable energy-derived power sources. For example, the full-scale on-site utilization of
installed solar power generation was launched at one large logistics facility.

Major Indicators (Fiscal 2022 Results)
Number of employees taking eco-driving andsafe-driving training (cumulative total)

1,662

For details about our basic policy on the environment and theModal shift transportation volume

structure for promoting environmental initiatives, please check our

306,048 t

Business sites where energy-saving lighting
has been introduced (cumulative total)

121 business sites

Total CO2 emissions(compared with the previous year)

3.6% increase

CO2 emissions per unit of sales(compared with the previous year)

6.8% decrease53

website.
TOP → Sustainability
https://www.sbs-group.co.jp/sbshlds/csr/

Energy Usage and CO2 Emissions (Scope 1, Scope 2)

VehiclesFacilities
Electric Power

78,875,143 kWh
LP Gas63,173 m³City Gas

418,654 m³

Vehicle Fuel (light oil, CNG, LNG, gasoline)

Gasoline

26,715,052 ℓ

10,456 ℓ
Light Oil

104,085 ℓ
Type A Heavy Oil

78,696 ℓRunning Water

170,250 ℓ
Vehicle Total

Facility Total

67,533 t 1% increase

37,474 t 8.3% increase

Total Emissions

105,007 t 3.6% increase

Scope 1

Scope 2

Direct Emissions from Energy Sources

Indirect Emissions from Electric Power Purchasing, etc.

69,354 t 1.43% increase

35,653 t 7.94% increase* Increase or decrease is in comparison to the previous year

Usage of Electric Power, Paper and Water (fiscal 2022)

Electric Power

Paper

Water

Usage

Usage

Usage

78,875,000 kWh

86,229,000 pages

170,250 t

Specific Consumption

Specific Consumption

Specific Consumption

3,320 kWh

3,627 sheets

7.16 m³(up 7.16% year on year)(down 3.35% year on year)(up 13.54% year on year)* Specific consumption is per employee (fiscal 2022: 23,773 employees)

SBS GROUP
Integrated report 2023

54

ENVIRONMENT

Mid-to-Long-Term Environmental Plan
The SBS Group started its third mid-to-long-term environmental plan from fiscal 2018.
Dubbed “Sincere Challenge 2030,” the plan comprises a slogan, medium-to-long-term priority issues
and a medium-term action plan (Environmental Action 2023). We will work on this plan in a sincere andproactive way.

SBS Group Mid-to-Long-Term Environmental Plan

Plan Name

Sincere Challenge 2030

Slogan“We take on the challenge of making an eco-friendly
society full of green!”

Priority Issues

Mid-term

Curtailment of CO2 emissions (reduction ofcarbon emissions from vehicles and facilities)
Promotion of resource recycling (effective
use and recycling of waste)
Conservation of natural resources (reductionof use of copying paper and water)Long-term Strengthening reduction of CO2 emissions
from vehicles (formulation andimplementation of plan for introduction of
next-generation vehicles)
Towards 2030
In anticipation of achieving carbon neutrality by 2050, the SBS Group will aim to drastically reduce Scope
1 and 2 emissions with the year 2030 as a target, focusing on the following two points.
VehiclesFacilities

55

Reduction of greenhouse gas (GHG) emissions *1(introduction of EVs and other next-generation vehicles, introduction of other technologies, eco driving)

Promotion of renewable energy-derived power sources *2(Promotion of measures including the procurement of green electricity, increased creation of renewableenergy through solar power generation and higher on-site utilization rates, and introduction ofenergy-saving lighting)*1 According to manufacturer
development trends*2 According to energy mix in the
Sixth Basic Energy Plan

The SBS Group is implementing Environmental Action 2023 as theamount of paper used for PPC, despite actively promoting paper-

action plan of the Sincere Challenge 2030 Mid-to-Long-Term Envi-

less meetings in administrative settings, effective reduction mea-ronmental Plan. The plan sets six aims and nine environmental

sures were not taken in operational settings, and the amount usedactions related to priority issues in the medium term and defines

has increased as the size of the business has grown. Going

medium-term goals (currently covering fiscal 2021 to fiscal 2023)

forward, we will reexamine measures with the aim of making

to be achieved.

fundamental improvements. Moreover, since the goals set forIn fiscal 2022, we largely achieved our goals for CO2 emissions,these activities were too far from reality, for the meanwhile we will

mainly on a per-unit basis. However, regarding reductions in thechange our action plan with the goal of achieving reductions of “atleast 1% year on year.”

Environmental Action 2023
Results

Goal
Aim

Action2021

Preventing global warming

Resource conservation[water and forests]

Resource recycling

Social contribution

2022

○

At least 3%
year-to-year

28.23 tons/
100 million yen

26.31 tons/
100 million yen

Reduction in CO2emissions per distancetraveled in vehicles

At least 1%
year-to-year

0.48 kg/km

0.51 kg/km

5.14%
increase

Reduction in water
usage per employee

At least 1%
year-to-year

6.31 m3

7.16 m3

13.54%
increase

Reduction in PPC paper
usage per employee

At least 1%
year-to-year

3,753
sheets3,627
sheetsVisualization ofindustrial waste
product recycling

Expansion of
applicablebusiness
sites

Sampling

Eco-driving
promotion

Development ofan evaluation andcommendation
systemActivepromotion

Under Consideration

At least 1%
year-to-year

5.03 km/ℓ

Launch of theevaluation andcommendation
systemFirm establishment Commendations Commendationsof the evaluation
awarded to 6
and commendation awarded to 4
business sites
business sites
systemYear-to-year increase in EMS introduction rate

Education

2021

Reduction in CO2emissions per unit ofsales

Improved fuelefficiency

Development of green
logistics services

2023

2022

Achievement
StatusAwareness-raising ofenvironmental action(posters, etc.)

Activepromotion

Support forenvironmental groups

Providing support to atleast one group

5.05 km/ℓ

6.80%
decrease○

3.35%
decrease△△
0.4%
decrease○

Completed introduction ofcargo vehicles○

Sincere Challenge 2030 postersand “Environmental Actions
Taken Within a 5-Meter Radius”
posters were displayed.

○

One environmental group was
supported and provided
assistance with its activities.

○

SBS GROUP
Integrated report 2023

56

ENVIRONMENT

Toward the Decarbonization of Logistics
Increasing the Efficiency of Logistics
The 3PL-based logistics reforms the SBS Group is
proposing for a wide range of situations will not only
drive improved efficiency in customer operations andthe business overall but also have significant potential to reduce CO2 emissions. The SBS Group has
made concerted efforts to design and operate logistics as part of social infrastructure that is also
outstanding from a sustainability perspective. As thefoundation of those efforts, we are continually working to reduce the environmental impact of theresources under our control, both in physical andoperational terms.

own driving by recording supplied fuel, distances
driven and fuel efficiency by hand to raise awarenessof fuel-efficient driving) in a two-pronged effort.

■ Introduction of next-generation vehicles
We are implementing a plan to replace roughly
1,000 vehicles with EV equivalents by 2030, focusing on light and medium-sized vehicles. In FY2022
we introduced two light commercial vehicles of thiskind and have been continuing with demonstration
testing. While operations for electric cargo vehicles
are extremely limited at the moment, we will continue
to monitor manufacturer trends and plan to steadily
increase the number of electric vehicles introduced.

Initiatives Related to Vehicles

17 locations(in-house utilization at
three locations)

Total power generating
capacity

20

Approx.
megawatts* Including operation planned forJanuary 2024

Number of employees
taking eco-driving andsafe-driving training

1,662

Vehicles are the basic units of logistics systems, andto operate them with a low environmental impact, wehave pursued phased updates while ensuring thatappropriate driving attitudes and technologies takeroot among drivers.
■ Eco-driving
The SBS Group is striving to foster a deeper cultureof eco-driving (fuel-efficient driving) through eco-driving training (eco and safe-driving training: eco-driving
workshops conducted in group settings) andthrough actual practice (voluntary fuel efficiency management: having drivers ascertain the effects of their

Solar power
generating equipment(as of December 31, 2022)

Number of businesssites whereenergy-saving lighting
has been introduced

Initiatives Related to Facilities
To achieve low carbon operations at warehouses
and other logistics facilities, we will pursue the dual
initiatives of energy savings and energy creation.

121

business sites(cumulative total including
sites with partial
introduction)

Modal shifttransportation volume306,048 t
Railway cargo:

278,183 t

Ship cargo: 27,865 t(FY2022)57

Companies targeted formodal shift
SBS Toshiba Logistics
SBS Ricoh Logistics
SBS Logicom■ Introduction of power-saving lighting
The SBS Group is promoting reduced power usageat its facilities through various electricity-saving measures. The introduction of energy saving lighting(LEDs, etc.) has been actively rolled out as a central
part of these efforts, and as of the end of 2022 thelighting had been installed at 121 locations (SBSGroup-operated business locations). This has led toelectricity savings of more than 50% (based on SBSGroup research), and has had the effect of reducing
CO2 emissions by more than 3,000 tons (comparedwith the use of conventional fluorescent and highceiling-mounted lighting).

* What is Modal Shift?
Modal shift is to shift the meansof transportation for cargo andpeople, and in cargo transportation, it means the movement ofgoods by cargo truck is switchedto rail or coastal vessel-basedtransportation. Since attention
was drawn to modal shift at the
3rd Conference of the Parties
under the United Nations
Framework Convention on Climate Change (Kyoto Meeting) in
1997, various countries havepursued initiatives, and efforts
have also been promoted by
Japan’ s Ministry of Land, Infrastructure, Transport and Tourism.

*The Logistics Environment
Award is a commendation
system that has been implemented by the Japan Association for Logistics and Transport
since 2000 with the aim of promoting environmental conservation and raising environmental
awareness in the logistics industry.

■ Creation of Renewable Energy
The SBS Group maintains solar power generating
equipment (total generating capacity of approx. 20
megawatts, including facilities scheduled to comeonline in the future) at 17 locations (facility rooftops anddedicated installations), contributing to the creation ofrenewable energy. Although on-site use still only
accounts for a small amount of total generation, weplan to shift to the use of renewable energy-derived
power as we head to 2030.

transportation that not only reduce the impact on theenvironment but also address the shortage of drivers.
In 2015, SBS Logicom participated in promoting themodel shift of sales routes for liquor dealers andhelped significantly reduce CO 2 emissions as aresult. The company received a joint award under the
Excellent Green Logistics Commendation Program.

Assessment of CO2 Reductions
SBS Logicom provides a service where dedicatedstaff diagnose CO2 reduction effects based on customer choices. In addition to supply chain stabilization, we conduct assessments from a carbon footprint perspective, proposing a role of logistics that is
optimum for each customer.

Preventing Air Pollution
Harmful air pollutants emitted from vehicles are continually measured and managed. In recent years wehave continued to update our vehicles and theseemissions have been decreasing with each year.
Usage / Fiscal Year

2019

2020

2021

2022

Nox (unit: kg)

141,085

138,977

104,815

63,044Modal Shift*Year-on-year decline (%) -10.93% -1.49%

The SBS Group also supports modal shift. Modal
shift refers to social contribution-oriented modes ofPM (unit: kg)-11.72% -7.27% -25.19% -38.15%

Year-on-year decline (%)

3.729

3,458

-24.58% -39.85%
2,587

1,600

SBS Toshiba Logistics concurrently wins Sustainable Activity Award and Special Awards
In the 23rd Logistics Environment Award*1 held in July 2022, SBS Toshiba Logistics received one Sustainable Activity
Award, which is given for examples of outstanding improvements that contribute to sustainable society, and four Special
Awards given to business operators contributing to the sound development of logistics for environmental conservation.
[Sustainable Activity Award]
Product packaging design as revised to achieve CO2 reductions through improved container loading efficiency. Productdesign, sales and packaging design departments collaborated with the shipper Toshiba Corporation to optimize
product sizes to fit marine container and pallet sizes. In addition, as a result of proposing and negotiating changes to
end customer manufacturing processes to adapt to these improvements, significant increases in transportation
container loading capacity were enabled, reducing transportation CO2 emissions.
[Special Prizes]
1. Reducing the number of vehicle used by streamlining joint delivery transportation
By building single database consolidating the different commercial distribution information of each shipper into
automated vehicle dispatch plans previously covered by the experience of delivery personnel, the automated vehicle
dispatch system was optimized, resulting in improved loading efficiency.
2. Reduced transportation CO2 emissions due to modal shift in transportation from Shanghai to Hong Kong
For the transportation of transistors and IC products from Shanghai to Hong Kong, a shift was made from truck
transportation to rail transportation, reducing transportation CO2 emissions.
3. Improving cargo handling productivity and saving energy with the introduction of shelf-carrying robot systems andsolar power generating equipment
Twenty shelf-carrying robots (AGVs), five working stations and solar power generating equipment were installed atcompany sites, resulting in a reduced environmental impact and lighter workloads.
4. Activities to apply the 3Rs to packaging from an SDGs perspective for medium- and heavy-weight electrical products
At the Mie Logistics Center and Fuchu Logistics Center, improvements were made to the form of packaging usedduring transportation, and efforts were made to reduce, reuse and recycling packaging materials.
SBS GROUP
Integrated report 2023

58

SAFETY
Review of Initiatives
FY2022 saw improved management results, reflecting a post-pandemic recovery in economic
activity and progress tapping into demand in the e-commerce business. However, theper-vehicle accident rate increased. Looking ahead, we will aim to achieve our targets in thisregard by continuing to tackle transportation safety management.

Major Indicators (Fiscal 2022 Results)
Group-Average Fuel Efficiency

5.05 km/ℓ

Number of Group Safety Training Sessions
Conducted

38

Number of Transportation Safety
Promotion Meetings Held

4 times

For details about our basic policy and promotion system regarding

Number of Business Sites with G-Mark
Certification (certification rate)

https://www.sbs-group.co.jp/sbshlds/csr/

177 business sites (89.4%)
Serious Accident

1

Accident Rate (accident rate per vehicle)

0.98%* In January 2023, the SBS Group officially identified material
issues as part of efforts to strengthen sustainability. One ofthese material issues we identified was safety. Safety has long
been a focus, and has again been cast as our top priority. To
coincide with this, a KPI related to safety (accident rate pervehicle) was newly set.

59

safety, please check our website.
TOP → Sustainability

Accident Rate per Vehicle

Operating Policy

2020

2021

2022

0.84%

0.85%

0.98%

Steady promotion of transportation safety
management
Priority Issues

Reducing accidents (vehicle accidents,
occupational accidents)

2025 target

0.50%

Strengthening of fire prevention measures atlogistics facilities
Strengthening of employee health management
Improvement of fuel consumption

SBS Group Transportation Safety Management
Risk Management

Policies and Priority Issues

Transportation Safety Promotion Meeting

Education and Awareness-Raising

Accident Prevention

Safe Driving Management

Group Safety Education

Accident factor analysis

Roll calls and alcohol checks

Operation manager examination
preparatory seminars

Near miss incident information collection anddashcam video analysis

Regular inspections

Operational manager basic classes

Risk prediction training(digital tachograph, dashcam, rear-view camera)

Operational manager general classes

Aptitude diagnosis

Health officer examination preparatory
seminars

Regular SAS screening examinations andhealth checkups

Business audits, touring follow-ups,business site self-inspectionsFirst-aid classes

Stress checks / consultations with industrial
physicians

Eco-driving courses

Fitting of driving support equipment

Acquiring certification (G-mark) as a businesssite with excellent safety
Truck driver contests

Training for persons causing accidents

Forklift operator contests

Introduction of vehicles equipped withsafety features

Occupational health and safety movement

Forklift safe operation training(collision avoidance, reduced braking,road deviation prevention)

Safe operation award

Forklift operator contests

Blood pressure measurements

Truck driver contests

Heat stroke countermeasures

Eco and safe-driving training
Truck safe driving training

Logistics facilities fire prevention measures
Eco and safe-driving evaluation andcommendation system

Call for proposed safety slogans
Affixing of eco and safe driving vehicle stickers

SBS GROUP
Integrated report 2023

60

SAFETY

Education andAwareness-Raising,
Accident Prevention

focuses on cultivating and improving the skills of
operation managers and strives to raise the level oftransportation safety management capabilities
across the Group.

Transportation Safety Promotion MeetingStandardization of Operational Management

The SBS Group convenes quarterly transportation
safety promotion meetings involving its nine transportation-oriented Group companies. The meetings aremainly designed to share various information andinitiatives related to transportation safety, including
operational management tasks, the rollout of various
operational measures aimed at business optimization, detailed analysis of vehicle and occupational
accidents, and specific operations to prevent
health-related accidents.

Group Safety Education
Regular determinations made by operational managers are extremely important in minimizing the risks ofserious accidents and other risks. The SBS GroupThe SBS Group, which is made up of multiple logistics
companies, has prepared an operational management
manual (in booklet and video form) that is common to
the Group and makes efforts to standardize the knowledge and business operations of operational
managers, maintenance managers and crew.

Safety Slogan
Each year the SBS Group accepts proposals from
employees for a safety slogan to be used inGroup-wide awareness-raising activities to foster
pride as professionals with responsibility for safety.
For fiscal 2023, one entry each was selected for the
traffic safety slogan and business site safety slogan.
Fiscal 2023 Traffic Safety Slogan

If we load and drive with care, there will be no accidents
Kiyohisa Hiraishi, Tsuchiura Branch, SBS Logicom

Fiscal 2023 Business Site Safety Slogan

A casual approach to ignoring rules leads to serious accidents

39

Number of employees
attending training
under the curriculum

689

Takumi Karashima, Sakura Logistics Center, SBS Logicom

SBS Group Safety Education Curriculum
Implementation Status for 2022
Curriculum

Number oftraining curriculum
sessions held

Number of Number ofSessions Held Trainees

Operation manager examination preparatory seminars

7

121

Affixing of eco and safe driving vehicle
stickers

General and basic classes for operation managers

18

234

Since December 2017, this sticker has been affixed

officer examination preparatory seminars

2

19

First-aid classes

241

to all SBS Group cargo vehicles. The sticker rep-

Eco and safe driving training

3

45

Truck safe driving training

230

Forklift safe operation training

4

46

sideration. We are conscious of being eco-friendly

Truck driver contests

1

153

and safe drivers, and are committed to eco and safe

Forklift operator contests--

resents our promise to society that SBS Group
vehicles take the environment and safety into con-driving.

Driver Health Management

Employee Health Management

The SBS Group not only takes steps to prevent overwork but also

In light of recent rising temperatures, since fiscal 2018 the SBS

makes thorough efforts to regularly conduct health checkups andGroup has stepped up measures to combat heat stroke in its

perform SAS (sleep apnea syndrome) screenings to prevent acci-

warehouses. We have thoroughly investigated information relateddents attributable to employee health. SAS screening tests not only

to incidences of heat stroke and installed additional air condition-

involve secondary screening but also regular monitoring aftering equipment to enable proper temperature management within

testing. Additionally, since there has also been an uptick in acci-

warehouse facilities. In addition, we actively advise drivers to run

dents related to brain disorders across society in recent years, we

air conditioning continuously. As a result, we have managed tocontinually monitor the state of health of drivers by conducting brain

reduce incidences of heat stroke. We will continue to address this

MRI scans as necessary in order to ensure safety and peace ofissue with the aim of completely eliminating cases of heat stroke

mind in our transportation operations.

among our employees.

61Safe Driving
Management
Expanding 5S Activities
The SBS Group began the expansion of 5S activities
as part of health and safety management. By creating safe environments, pursuing improvement andstandardization, and fostering a better workplaceculture, we aim to further improve safety and thehuman resource development environment.

opening and closing of doors, and idling information.
This is used to prevent accidents, improve mileage
and raise awareness about safe driving. In addition, allvehicles are equipped with dash cams, and we makeevery effort to improve safe driving habits by monitoring driving conditions. New vehicles are also equippedwith rear cameras and collision avoidance support
systems to prevent collisions when reversing. Goingforward, the SBS Group will continue to enhance
support for the safety of crew members.

Fire Prevention Measures at Logistics
Facilities
The SBS Group has created its own prevention
measures check sheet based on guidelines from the
Ministry of Land, Infrastructure, Transport andTourism and the Fire and Disaster Management
Agency. All Group logistics facilities are required toperform periodic checks and report on the results.
Criteria have been established for the items to bechecked, and when the criteria are not met, facilities
are obligated to take corrective action. We strive toraise the level of fire prevention methods by iteratingon this cycle of checks and improvements.

Eco and Safe-Driving Evaluation andCommendation System

Truck Driver / Forklift Operator Contests
We have been holding contests since fiscal 2016 withthe aim of having drivers and operators compete overtheir knowledge of advanced driving skills, inspection
technologies and related laws and regulations, andhone skills through friendly competition. In addition,
the contests aim to raise awareness of their social
responsibilities as drivers and operators by acting as
exemplary representatives of their respective workplaces. Each contest will improve the awareness andskills of individual drivers and cultivate a Group identitythat pursues safe driving and operation.

We implement an Eco and Safe-Driving Evaluation
and Commendation System with the aim of achieving transportation safety and appropriate business
operation by widely disseminating eco and safe-driving awareness and skills among SBS Group
companies. The system awards commendations tobusiness sites that have achieved excellent results ineco and safe-driving (based on evaluation items
including fuel efficiency improvement rate comparedwith the previous year, and the implementation statusof safe driving management and safety education).
The SBS Group strives to improve quality in both
environmental and safety terms through this system.
Business Sites Awarded Eco and Safe-Driving
Evaluation and Commendations in FY2022

Raising Awareness of Accident
Prevention and Safety

Production Logistics Section, Fukui Branch,
Chubu Tokai Division, SBS Ricoh Logistics

The SBS Group creates and displays various posters
as part of efforts to prevent vehicles and occupational
accidents, and to raise awareness about safety.

SBS Logicom Tokorozawa Logistics Center Branch
SBS Freight Service Aomori Office

Fitting of Driving Support Equipment

SBS Flecnet Toda OfficeAll cargo vehicles operated by the SBS Group are
fitted with digital tachographs. These devices not only
ensure compliance with speed limits but also record,evaluate and analyze a wide range of information
including sudden accelerations and decelerations, theKuki Sales Office, Saitama Delivery Section,
No. 2 Delivery Department, SBS Zentsu
SBS Sokuhai Support Jyonan Office

SBS GROUP
Integrated report 2023

62

SOCIAL
Review of Initiatives
The SBS Group regards the customers to whom it provides services, as well as shareholders and investors,
the employees who work together with the Group, business partners including suppliers, contractors, and the
local communities where the Group does business as major stakeholders. To stakeholders, we commit toputting the customer first, making appropriate information disclosures, developing a comfortable workplace,c ultiv at i n g p art n ers h i p s a n d c o n t r i b u t i n g t o l o c al com m u n i ti es, an d we en deavor to r efl ect th ese
commitments in our corporate activities through wide-ranging dialogue with stakeholders. We haveestablished a Code of Behavior prescribing compliance with laws, manners and morals, environmental
conservation and social contribution as a corporate citizen, and strive to coexist with society.

Major Indicators (Fiscal 2022 Results)
Promoting the appointment of women to managerial
positions (percentage of women in all managerial positions)

4.6% (Six major companies)
Percentage of eligible male employees
taking childcare leave

16.7%

Annual paid leave acquisition rate

53.5%

Food bank support results

2,924 thousand yen
7
86 students
SBS Kamata Foundation

Logistics Research Grants
Scholarship assistance63

For details about our basic policy and promotion system regarding
society, please check our website.
TOP → Sustainability
https://www.sbs-group.co.jp/sbshlds/csr/

Engagement with Society and Stakeholders
Quality Management System* See the ESG data on page 83 formore information on certification
status.

Each Group company in the SBS Group has established a quality management system and we
endeavor to maintain and improve the quality of thetransportation and services we provide. In addition to
the international ISO9001 standard that indicatessystematic requirements for quality management
systems, we have also obtained other appropriate
certifications including ISO27001 certification for
information security management systems, the Privacy Mark related to the protection of personal information, as well as JAS Organic Agricultural ProductSubdivider Certification and the Relocation Safety
Mark.

Implementation of Improvement Activities
The SBS Group conducts a wide range of improvement activities and holds an Improvement Contest
designed to recognize achievements in thoseendeavors and share outstanding expertise. For its
part, SBS Ricoh Logistics System holds a Global
KAIZEN Contest under the themes of KAIZEN and
Reform incorporating management issues. Meanwhile at SBS Zentsu, the Home Delivery Division
responsible for the delivery of foods at the four temperature ranges holds Improvement Example Presentations to develop a comfortable workplace environment, and has workers compete and learn homedelivery customer service skills through the “Customer Service Master Contest.” SBS Flecnet holds
Business Improvement Presentations with the aim ofproviding better services and developing an
improved work environment. Each of these initiatives
is not only an opportunity to raise awareness of
issues and share lessons, but is also positioned as
an opportunity to develop a positive corporate
culture.

Provision of Information
In addition to disclosing information about the business operations it is entrusted with, the SBS Groupearns the trust of stakeholders by providing a range
of information with a focus on customers.
The LOGILINK, a logistics-oriented PR publication
issued by SBS Logicom for customers, has earneda favorable reception among companies, groups
and government organizations as a medium fordisseminating useful information to those responsible
for and involved with logistics, including case studiesof logistics solutions and the latest information.
Everything from the expertise and functions of SBS
Logicom logistics services to the ingenuity of its staff
is introduced in an easily understood format that
illustrates SBS Logicom’s collective strength as alogistics company.

The SBS Group strives to engage in dialogue as well as disclosing and providing information by developing
and utilizing means of communication with various stakeholders.

Communication with Employees
Publication of the SBS Express Group magazine

4 printed publications, 50 online publications
Responses toInvestors
and Analysts

Communication with Shareholders and Investors (FY2022 1Q-4Q)
Total Financial Results Briefing Attendees

Interim:

75 attendees, year-end: 73 attendees, total:148 attendees 132 / year

Media Communication
Press Releases Issued

Web Information

78 press releases (28 of which were IR news releases) 23
Website Communication
Number of Visitors

Page Views

2,090,025 (246,418) 12,423,652 PV (989,837PV)* Figures in parentheses are for SBS Holdings

SBS GROUP
Integrated report 2023

64

SOCIAL

The SBS Groups Human Resources Strategy
Based on its philosophy that “long-term prosperity is rooted in paying the necessary attention topeople,” the SBS Group regards human capital as its most important resource in corporate value
creation. In keeping with this approach, we will promote understanding towards diversity, initiatives toeradicate harassment and workstyle innovation in an integrated fashion with respect for human rights as
the basis, striving to cultivate human resources and maximize their ability to create value.

Human Rights Policy
Declaration on Respect for Human Rights and Elimination of Harassment
Human CapitalManagement

Materiality:

Human
CapitalReform of Systems
Education and Awareness-Raising
Diversity Policy

Materiality: Human Capital
We have identified human capital as a material
issue and positioned it at the core of our sustainability management strategy. We will focus on
securing and cultivating talented human capitaland improving productivity in an effort to enhance
corporate competitiveness.

Initiatives on Respect for Human Rights
In the SBS Group Human Rights Policy, the SBSGroup has set forth initiatives regarding respect forhuman rights in its business activities. We havealso laid out a Declaration on Respect for Human
Rights and Elimination of Harassment, andpromote understanding and thorough complianceon the part of employees with regard to respect forhuman rights and harassment prevention.

Support for women’s participation and advancement (target: 6 main companies)(1) Promoting the appointment of women to managerial positions (percentage ofwomen in all managerial positions)2022 Result

2023 Target

2024 Target

2025 Target

4.6%

6.0%

7.0%

8.0%

(2) Promoting women’s career advancement (training attendees)
2022 Result

2023 Target

2024 Target

2025 Target

Empowerment seminars

140

150

150

150

Career design training

56

100

100

100

(3) Enhancement of systems supporting the success of women (promoting thedevelopment of a comfortable workplace environment)
2023(systems at each company)

2024(systems at each company)

2025(Group systems)

Diversity and Inclusion

Consideration of telecommuting systems

Introduction of telecommuting

New system

The SBS Group has established the SBS Group
Diversity Policy, positioning diversity and inclusion
as an important management strategy. Throughthree action plans, we are driving the developmentof an environment in which anyone can work withenthusiasm and demonstrate their capabilities.

Consideration of flextime systems

Introduction of flextime system

Consideration of half day-off systems

Introduction of half day-off system

Consideration of hourly time-off systems

Introduction of hourly time-off system* The aim of the new system is to develop an environment that enables women to choose how they work at each life
stage.

Promoting Diversity[Action Plans]
Respect the individuality of a diverse range of
employees
Help employees let their individuality shine brighter
Endeavor to foster an organizational culture thatutilizes the diversity of employees
●

●
●

65

Promotion of diversity awareness-raising (training attendees)
2022 Result

2023 Target

2024 Target

2025 Target

150

500

500

500

Creating Comfortable Workplace Environment
The SBS is committed to developing a workplace inwhich anyone can work with peace of mind anddemonstrate their capabilities based on the promotion of diversity and workstyle reforms. As a part ofthese efforts, measures addressing the COVID-19
pandemic provided the opportunity to develop telework and work-from-home systems for the administrative divisions. Going forward we will continue tohelp employees balance work and home life so that
we can provide diverse and flexible working styles
based on changing circumstances.

Education and awareness raising forhuman resource development* See the ESG data on pages
84 for a breakdown of thecurricula.

The SBS Group provides wide-ranging educationand training to all employees working at Group
companies in accordance with the Basic Policy on
Human Resource Development.
The composition of training is systematically organized into tiered training, theme-specific training,
specialist training and personal development support, and is designed to help employees improvetheir skills and develop their careers.

Human Capital Management
In its three-year medium-term plan (next stage 2025),
the SBS Group aims to enhance corporate value andcompetitiveness by bolstering human resource andorganizational capabilities within the Group, and as
shown on the right, has established a basic strategy
regarding human capital management. We will invest
in the human resources of the future and develop theinfrastructure for disclosing related information basedon this basic strategy.

Certifications
The SBS Group is committed to developing a comfortable workplace in which anyone can work withpeace of mind.

Eruboshi Certification for Promoting
Women’s Participation andAdvancement in the Workplace* SBS Holdings

Kurumin Certification forcompanies offering childcare
support to employees* SBS Holdings

Certification System for Pleasant
Workplace Development (Automotive
Transport Business Operators)* SBS Ricoh Logistics, SBS Zentsu

Developing a Pleasant Workplace (target: 6 main companies)(1) Percentage of eligible male employees taking childcare leave
2022 Result

2023 Target

2024 Target 2025 Target

16.7%

Increase year
on yearIncrease year
on yearIncrease year
on year(2) Ratio of taking annual paid leave
2022 Result 2023 Target 2024 Target 2025 Target
53.5%

Increaseyear on year

Increase year
on yearIncrease year
on year

Basic Policy on Human Resource Development
1. We will implement human resource development as apart of our management strategy and human resource
strategy, and foster human resources able to contribute to the growth and development of the Group
2. We will cultivate human resources through a broad
range of education and training, and strive to build up
the Group’s personnel-based capital
3. We will assist employees in achieving their self-actualization goals through life-long education
Basic Strategy on Human Capital Management
1: Support employee skills and career development
Formulate a flexible human capital portfolio based on
business strategy and secure the appropriate talent
Develop various personnel systems that will become
the Group standard (framework)
Conduct various training (tiered, specialized themes,
departmental) and run a next-generation leader development program
2: Improve employees’ work-life balance
Develop welfare systems that will become the Group
standard (framework)
Improve figures with statutory disclosure requirements,
namely eligible male employee childcare leave usage
and annual paid leave usage rates
3: Develop an environment enabling employees to flexibly balance life events with work
Strengthen activities that promote the active participation of women and develop environments that champion the success of women
4: Achieve productive employment and fulfilling, dignified work (decent work)
Improve employee engagement and ensure that thestatutory employment rate for people with disabilities ismet
5: Reorganize and build human resource contracting
operations toward Group-wide optimization andimprove the level of services
Develop mechanisms to improve operational quality andproductivity (KPI setting) and achieve stable operation
SBS GROUP
Integrated report 2023

66

SOCIAL

Social Contribution Activities
Food Bank Support Through theProvision of SBS Group Resources
The SBS Group began food bank support activities
in 2018. A food bank is an activity or organizationthat collects from corporates and other organizations
food that has not yet expired but cannot be sold forvarious reasons and distributes it to people in need(people in distress).
We support Certified NPO Organization Second
Harvest Japan (2HJ), the largest food bank in Japan
which is based in Asakusabashi, Taito-ku, Tokyo. We
were looking for ways to contribute to society throughlogistics, and 2HJ’s needs for logistics support
coincided with our capabilities, leading to the conclusion of a support agreement. We provide support intwo main ways, firstly providing the temporarytransportation of goods between food donors and 2HJ
sites, and secondly providing advice and recommendations on warehouse management and vehicle
operation.
For the temporary transportation of goods, 2HJ usually uses its own vehicles to pick up donated foodstuffs (at the request of manufacturers, etc.), butwhen there is no way to secure a vehicle or manpower, such as when there are no available vehicles
or drivers (who are all volunteers), an SBS vehicle
can be used as an alternative transportation service.
On rare occasions when the 2HJ warehouse is full,
we receive requests to store supplies and respondas needed.

The food bank support is a very meaningful initiativethat not only contributes to strengthening the foodlifeline for people in need, but also contributes to the
reduction of food loss, which is a recent social problem. In the future, we will continue to work together
with 2HJ to create a society where people have aplace they can turn to when they encounter difficulties with food.

Manufacturers

Importers and Wholesalers

Retail Outlets

Regular Companies

Donations

Food Bank

Food Bank Support Results (Transportation and Storage)
Thousand yen

2018

2019

2020

2021

2022

Total

470

540

2,220

2,412

2,924

8,566

Orphanages
WelfareFacilities

Local Public
Entities
Social Welfare
Councils

NPO
Organizations

Regional FoodBank
Organizations

IndividualHouseholds

The SBS Group’s Major Social Contribution Initiatives
Type

Coordination withthe social sector*

Details of Support

Support for food banks

Transportation support connecting companies that wish to donate food to Second
Harvest Japan (2HJ) with 2HJ logistics sites. In addition, advice and proposals on
warehouse management and vehicle operation are also provided.

Implemented at
the request of
2HJ

Sponsoring and support activities (participation in forest conservation activities,
donations of collected items such as used books, CDs and DVDs)

Collected items
are accepted at
any time

We sell sweets and bread made at about 20 welfare workplaces in Sumida Ward(where people with disabilities are involved in the work).

2 to 3 times /year Olinas

Proceeds (stamps are purchased by a stamp company) are used for social welfare
projects in Sumida Ward

Accepted
at any time

This initiative collects used toothbrushes and recycles them into new plastic
products, such as flowerpots. The program aims to reduce plastic waste andpromote the use of recycled resources.

Accepted
at any time

(Certified NPO Organization,
Second Harvest Japan)

Support for environmental conservation
activities (Public Interest Incorporated
Foundation, OISCA)

Social contribution-oriented sales drives(Sumida Ward Welfare Workplace Network <kai>)Contributing to the
local community

Donation of used stamps(Sumida Ward Council of Social Welfare)Collection of toothbrushes<Toothbrush Collection Program>(LION / TerraCycle Japan G.K.)

Others(Collection of used items, etc.)

Reception /Implementation

Nature of Support and RecipientsCollection of school backpacks<Randoseru for Life Collection>(NPO, International Consulting Association)

An initiative to send “randoseru” school backpacks to children in Afghanistan who stilllack educational opportunities due to the civil war and other factors.
This is recognized as supporting the empowerment of girls in their schooling,
especially because of the lack of cultural understanding female education.

Accepted
at any time

(As the support has spread, the “randoseru” backpacks have become a symbol of educationin Afghanistan.)* In addition to the activities listed above, individual SBS Group companies also undertake various social contribution activities.

67

SBS Holdings LT Planning Department
General Manager Magaribuchi deliveringa remote lecture

Endowed Course at the University of Tokyo
Amount of Donations
Thousand yen

201910,0002020

10,0002021

10,0002022

10,000Total

40,000Together with Yamato Holdings Co., Ltd. and Suzuyo & Co.,
Ltd., SBS Holdings Co., Ltd. has established the Endowed
Research Department for Advanced Logistics Science at the
Research Center for Advanced Science and Technology, theUniversity of Tokyo. In April 2020, we began offering courses
designed to cultivate human resources who can use advanced
science and technology to transform logistics, with the aim ofsolving issues faced by logistics companies and contributing to
the development of the Japanese economy.

SBS Kamata Foundation
The SBS Kamata Foundation is a support foundation that provides grants for excellent logistics research and offers scholarships to students receiving social care.
Applicable Research(1) academic research and (2) the holding of research workshops,
symposiums, seminars, etc. that contribute to the promotion ordevelopment of logistics are eligible.

Logistics Research Grants

Grants Issued in
Fiscal 2022

7

The foundation conducts aid activities with the aim ofsupporting academic research into logistics, which ispart of the social infrastructure, and contributing to thedevelopment of the industry as a whole and thebetterment of people’s lives, for instance by using the
fruits of research to improve logistics efficiency andprevent accidents.

* Examples of the themes addressed: improving logistics efficiency, improving
safety in cargo transportation and reducing the impact on the global
environment (reducing CO2 emissions) through better logistics systems

Scholarships for Students Receiving Social Care

Number of
Scholarship
Recipients in
Fiscal 2022

86

This project provides scholarship funding to motivatedand talented students and other persons to prevent
them from abandoning education for economic
reasons, with the aim of contributing to equal opportunity in education and the development of humanresources, while helping enhance education andwelfare.

Application Requirements
Students who are generally at least 18 years old and have been
accepted for enrollment into higher education, who are children
residing in a child welfare home or living in a foster home in the
Kanto region, and who plan to advance to university, juniorcollege, a vocational school or similar
Scholarship Amounts
300,000 yen per student (as a higher education allowance)

Results of Issued Grants
and Awarded Scholarships
Logistics
research
grantsNumber of projects
Grant amount

Number of
Number of participants
scholarships
Grant amount
granted

2015

2016

2017

2018

2019

2020

2021

2022

Total

6

7

7

9

6

6

4

7

52

2,994

3,374

3,300

4,499

2,995

2,600

2,000

3,434

25,196

-

-

30

34

57

74

76

86

357

-

-

9,000

10,20016,80021,00022,80025,800105,600* Amounts are units of a thousand yen

Results of Logistics Research Adopted in Fiscal 2022

Grant Amount(thousand yen)

Name of Affiliate Organization

Position

Name

Research Subject

Institute for Future Initiatives, The
University of Tokyo

Project
researcher

Yuki Sano

Development of environmental impact assessment
methods to achieve sustainable food logistics systems

500

Graduate Department of Aerospace
Engineering, Nagoya University

Professor

Susumu Hara

Development of a social acceptability simulator for the air
industrial revolution - effects of learning about benefits -500

Department of Information Systems andMultimedia Design, School of Science andProfessor
Technology for Future Life, Tokyo Denki University

Masayuki Iwai

Study of smart signage and wearable systems to achievesafety and security for field workers

499

Department of Informatics, School ofMultidisciplinary Sciences, The Graduate
University for Advanced Studies, SOKENDAI

Graduateschoolstudent

Kanta
Kasahara

Airspace reliability determination under network connection
interference conditions during UAV logistics transportation

470

Faculty of Business Department of
Business, Kokushikan University

Associate
professor

TetsuroSaishoStudy of the dynamic structure of the supply chain
businesses of Japanese companies in the ASEAN region

500

Department of Distribution Information,
Faculty of Distribution and Logistics
Systems, Ryutsu Keizai University

Professor

Yuki Misui

Study of the externalization of logistics activities that socialchanges have caused for food logistics, its impacts, andcountermeasures

500

Graduate School of Economics,
Kyoto University

Doctoral section of
the integrated course

Katsushin
ChoHistorical dynamism of the international and intra-industry
division of labor in the modern shipping industry —Worldwide
shipping and Japanese shipping from the 1970s

465

SBS GROUP
Integrated report 2023

68

GOVERNANCE
Basic Approach
As the holding company of the SBS Group, SBS Holdings (“the Company”)
ensures the efficiency, soundness and transparency of overall SBS Groupmanagement. Additionally, to continually enhance corporate value and become acompany that earns the trust of society, the Company promotes compliance andrisk management Group-wide.

* The most recent officers and organizational
names (as of July 2023) are listed.

Major Indicators (Fiscal 2022 Results)
Outside Directors

5(out of 11 directors)

See the SBS Group website for details about corporate governance. Systematic
disclosure information including the following materials is posted on the website.

Board of Directors meeting attendance
rate by outside directors
All Directors:
Outside Directors:

96.8%
94.8%

93%

Assessment of Internal Control Related to
Financial Reporting for Fiscal 2022

Valid
Number of Board of Directors Meetings andStatus of Attendance (FY2022)

AttendanceRate (%)

14
All Directors (11 members)

96.8%

Outside Directors (5)94.8%

Number of Audit & Supervisory Committee
Meetings and Status of Attendance (FY2022)
Meetings
Attendance Rate (%)

69

The SBS Holdings Corporate Governance Guidelines, which summarize thebasic framework and approaches concerning corporate governance at SBS
Holdings●

The Corporate Governance Report submitted to Tokyo Stock Exchange, Inc.

●

Internal Control Reports on the effectiveness of internal controls with regard to
financial reporting

TOP → Sustainability → Corporate governancehttps://www.sbs-group.co.jp/sbshlds/csr/governance/

Audit & Supervisory Committee
meeting attendance rate

Meetings

●

14
93%

Corporate Governance System

attendance.
The Board of Directors meets at least once a month and on an
extraordinary basis when necessary, operating under a structure thatenables swift and effective decision making on the part of directors.
In addition, some directors with the exception of outside directors
serve concurrent roles as directors of the Group’s major subsidiaries,
in order to enable the deliberation of important matters concerning
subsidiaries and facilitate smooth communications within the SBSGroup through their attendance at Board of Directors meetings.
An executive officer system has been introduced to speed up
decisions on management strategy and further enhance systems
for the execution of business.

SBS Holdings is a company with an Audit & Supervisory Committee and has established a General Meeting of Shareholders,
Board of Directors, Audit & Supervisory Committee and Accounting Auditor as corporate bodies.
There are two reasons why the Company has adopted this current
structure: (1) to ensure the swift decision making and the flexibilityof decision-making bodies as the greatest management strengthsof SBS Holdings and the SBS Group; and (2) to firmly maintainsound management through the objective and neutral monitoringof management.
General Meeting of Shareholders
The Company regards those shareholders listed or registered in
the final shareholders’ register as of December 31 of each year tobe the shareholders entitled to exercise their rights at the Ordinary
General Meeting of Shareholders in that fiscal year. The Ordinary
General Meeting of Shareholders is convened within three monthsof the day following the last day of each fiscal year. In addition,
extraordinary general meetings of shareholders are convened
whenever necessary. The General Meeting of Shareholders isconvened and chaired by the President and Representative Director. Resolutions made as decision-making mechanisms at theGeneral Meeting of Shareholders are carried out based on amajority of the voting rights of shareholders who are present andentitled to exercise their rights, except when otherwise provided
for by law or the Articles of Incorporation.

Audit & Supervisory Committee
The Audit & Supervisory Committee is made up of three directors
who are Audit & Supervisory Committee members, two of whom
are outside directors. The Audit & Supervisory Committee meetsat least once a month and on an extraordinary basis when necessary and fulfills the role of auditing and supervising the executionof duties by members of the Board of Directors other than Audit &Supervisory Committee members and matters of legality. The
Audit & Supervisory Committee members, primarily its chairperson
Takashi Endo, also attend Board of Directors meetings and otherkey internal meetings where they provide advice as necessary.
Nomination and Compensation Committee
The Nomination and Compensation Committee is made up of
three directors, two of whom are independent outside directors.
The committee meets at least once a year and on an ad-hoc basis
whenever necessary, and works to strengthen the fairness, transparency and objectivity of procedures concerning the nominationand compensation, etc. of directors and Audit & Supervisory Committee members. Outside director Jiro Iwasaki services aschairperson of the committee.

Board of Directors
The Company’s Board of Directors comprises 11 members, five ofwhom are outside directors. Except when otherwise provided for bylaw, the Representative Director and President shall convene andchair meetings of the Board of Directors, but an Audit & Supervisory
Committee member appointed by the Audit & Supervisory Committee may also convene Board of Directors meetings. As adecision-making body, the Board of Directors decides on mattersrequired by law, matters set forth in the Articles of Incorporation,
management policy and important matters related to management.
The board also monitors and supervises directors in the performance of their duties. Resolutions of the Board of Directors are
passed when a majority of directors eligible to take part in votes arepresent, based on a majority of the votes of those directors in

Accounting Auditor
The accounting auditor retained by the Company is selected by aresolution of the General Meeting of Shareholders. The term of
appointment of the Accounting Auditor shall expire at the end of
the Ordinary General Meeting of Shareholders that is the final suchmeeting within the fiscal year ending within one year of the
Accounting Auditor’s appointment.

Organizational Chart of Corporate GovernanceNomination and Compensation
Committee

General Meeting of Shareholders(Directors selected by the Board of Directors)

ReportingStating opinions

Appointment

Dismissal

Appointment

Dismissal

AdviseReply

Appointment

Dismissal

Audit & Supervisory Committee

Coordination

Board of Directors

Director(Audit & Supervisory
Committee members)

Director

Audit
Supervision

Sustainability Promotion Committee

Advise(Not Audit & Supervisory
Committee members)(Committee members: representative
directors of each Group company)

Reply

Risk Management Meeting
Compliance Meeting

Accounting Auditor

Investigation Coordination

Selection

Dismissal

Reporting
Reporting

Environmental Management Promotion Meeting
Transportation Safety Promotion Meeting

Coordination

Auditing Department

Instruction

Representative Director

ReportingInstruction
Audit

Correction Reporting
Instruction

Audit

Supervision

Information Security Promotion Meeting

ReportingInternal Reporting System

Executive Officer
Direction

SBS Holdings Departments and Group Companies

ReportingConsultation and reporting

General Workplace Consultation Office
Audit & Supervisory Committee Member Hotline
Attorney hotline

SBS GROUP
Integrated report 2023

70

GOVERNANCE

List of Directors, Executive Officers
Board of Directors

Masahiko Kamata

Yasuhito Tanaka

President, Representative Director and CEO

Director, Executive Officer(Corporate planning, business oversight)

Mr. Kamata has served as the Company’s President andRepresentative Director since March 1988, and as CEO
since March 2004. He also serves as representative directorof SBS Group companies, including SBS Logicom Co., Ltd.,SBS Sokuhai Support Co., Ltd., and SBS Toshiba Logistics
Co., Ltd., and as a director of SBS Flec Co., Ltd., SBS
Zentsu Co., Ltd., and SBS Ricoh Logistics System Co., Ltd.
Since July 2013, he has also served as director of the SBS
Kamata Foundation.

Shuichi Hoshi

Natsuki Gomi * Newly appointed

Director, Senior Managing Executive Officer(In charge of the President’s Office and Audit
Department)

Director, Executive Officer(Financial supervisor, IT/LT supervisor)

After working as General Manager and Executive Officer of
the Food Products Marketing & Distribution Department of
Itochu Corporation and as President and Representative
Director of Itochu-Shokuhin Co. Ltd., Mr. Hoshi assumed
the role of Outside Director of SBS Holdings from March
2019. Since June 2020 he has also served as an Outside
Director of Morinaga & Company, Ltd.

After working at the Long-Term Credit Bank of Japan (nowSBI Shinsei Bank, Limited), Rakuten Group, Inc. and the
Nomura Trust and Banking co., Ltd., in July 2021 he took
on the post as advisor to SBS Holdings and served as an
Executive Officer of the Company starting in October 2021.
In March 2023 he assumed the post as a Director of SBS
Holdings, and concurrently serves as a director of SBS
Asset Management and L-MAX Co., Ltd.

Masato Taiji

Katsuhisa Wakamatsu

Director, Managing Executive Officer(Personnel and general affairs supervisor)

Director, Executive Officer(In charge of Group Business Strategy Department
and E-Commerce Business Promotion Department)

He has served as General Manager of the Human
Resources Division of Tokyu Logistics Co., Ltd. and TL
LOGICOM Co., Ltd., both of which are currently SBS
Logicom Co., Ltd., and has been a Director of SBS
Holdings since March 2017. He has also served as Managing Executive Officer (in charge of human resources andgeneral affairs) since March 2019, and as a director of SBS
Logicom Co., Ltd. since March 2022.

71

After working at the Sumitomo Bank, Ltd. (now Sumitomo
Mitsui Banking Corporation Group), he assumed the post ofAssistant General Manager of the Corporate Planning
Department of SBS Holdings in November 2010. He hasserved as an Executive Officer (General Manager of Corporate Planning Dept.) since December 2018 and as adirector since March 2021. He also serves as a director of
SBS Asset Management Co., Ltd., L-MAX Co., Ltd., SBS
Ricoh Logistics Co., Ltd. and SBS Toshiba Logistics Co.,Ltd.

After working as head of the Production Management
Center at Ricoh Company, Ltd., in October 2011 hebecame a director and executive officer of Ricoh Logistics
System Co. Ltd. (now SBS Ricoh Logistics System Co.,
Ltd.) and became Representative Director, President andChief Executive Officer in October 2013. He has served asa Director of SBS Holdings since March 2019, and as an
Executive Officer (in charge of the Business Strategy
Division) since March 2023. He also holds a concurrent
post as a director of SBS Toshiba Logistics Corporation.

Audit & Supervisory Committee

Jiro Iwasaki

Takashi Endo

Outside Directors

Director (Full-time Audit & Supervisory
Committee Member)

Mr. Iwasaki serves as a Director and Senior Executive
Officer at TDK Corporation and as a Director and Managing
Executive Officer at JVC Kenwood Corporation (General
Manager of Corporate Strategy). He has served as an
Outside Audit & Supervisory Board member and now
Outside Director of GCA Corporation, and also serves as an
Outside Director of Renesas Electronics Corporation. At
SBS Holdings, he was appointed Outside Audit & Supervisory Board member from March 2011, and has served as
an Outside Director since March 2015.

After working at the Long-Term Credit Bank of Japan(now SBI Shinsei Bank, Limited) for 30 years, he took on
the post of General Manager of the Corporate Planning
Department, Executive Officer and General Manager ofFinance at the Company, and served as Representative
Director of Japan Logistics Future Fund (now Japan
Logistics Future Investment). From March 2022, he hasserved as a Director (Audit & Supervisory Committee
member) of the Company. He also holds concurrent
positions as an Audit & Supervisory Board member of
SBS Holdings and five Group companies.

Yoshinobu Kosugi * Newly appointed

Masato Matsumoto

Outside Directors

Outside Director (Audit & Supervisory
Committee Member)

After holding important posts at Nippon Television Network
Corporation (now Nippon Television Holdings, Inc.), heassumed the post of representative director. Since June
2022 he has served as an advisor to Nippon Television
Network Corporation. He accepted the position of an
Outside Director of SBS Holdings in March 2023.

Mr. Matsumoto has been engaged in management at
KOKUSAI Securities Co., Ltd., Mitsubishi Securities Co.,
Ltd. (now Mitsubishi UFJ Securities Holdings Co., Ltd.),
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.,
Mitsubishi UFJ Financial Group, Inc. and MUS Business
Service Co., Ltd. Since March 2019, he has served as
an Outside Audit & Supervisory Board member of SBS
Holdings, and as an Outside Director (Audit & Supervisory Committee member) since March 2021. He also
serves as an outside director of Sundrug Co., Ltd.

Sachie Tsuji
Outside Director (Audit & Supervisory
Committee Member)
As a certified public accounting, Ms. Tsuji has served asa representative director of SPLUS Corporation, directorof Tsuji Sachie Public Accounting Office, Director of the
Association of Certified Fraud Examiners. From March
2021, she has served as an Outside Director (Audit &Supervisory Committee member) of the Company. She
also serves an an outside Audit & Supervisory Board
member at C’ BON COSMESTICS Co., Ltd., Shindengen
Electric Manufacturing Co., Ltd. and Otsuka Holdings
Co., Ltd.
For more detailed information on the biographies of each director, please refer to the“Company Officers” section in SBS Holdings’ securities report.

Male / Female
Ratio of Directors

Male:

10

Hajime Kato

Other Executive
Officers

Female:1(Male: 91%, Female: 9%)

Executive Officer (Representative Director and Executive Officer of SBS Flec Co., Ltd.)

Yasushi Kanazawa Executive Officer (Representative Director and Executive Officer of SBS Toshiba Logistics Corporation)
Yasuhiko Ueda

Executive Officer (Representative Director of SBS Asset Management Co., Ltd.)SBS GROUP
Integrated report 2023

72

GOVERNANCE

Ensuring EffectivenessAppointment of Directors
Giving due regard to a report from the Nomination and Compensation Committee in response to a consultation from the Board of
Directors, the President nominates individuals who possess a vastarray of knowledge and expertise concerning SBS Group management, financial strategy, risk management and legal
compliance, are of outstanding character, and who possess theknowledge, experience and skills to fulfill their responsibilities, as
directors of SBS Holdings. The draft nominations are then submitted to the Board of Directors for approval by the General Meetingof Shareholders.
In addition, in the appointment of the representative directors ofGroup companies and other top management, the President nominates individuals of outstanding character who possess theknowledge, experience and skills to fulfill their responsibilities. After
receiving approval by the SBS Holdings Board of Directors, thenominations are approved by the General Meeting of Shareholdersof the Group company concerned.
Also note that SBS Holdings lists the individual reasons for nomination for all candidate directors in the Convocation Notice for the
General Meeting of Shareholders.

Restrictions on Concurrent Positions Held by
Company Directors
An internal director of SBS Holdings shall only serve concurrently
as an officer at another publicly listed company when there areclear reasons for doing so, such as helping to strengthen the business relationship with that company, and the officer concerned
shall focus on their duties at SBS Holdings as much as possible.
The status of these concurrent positions is disclosed in business
reports on an annual basis.

Outside Directors
To bolster management supervisory functions, SBS Holdings has
appointed five outside officers. These efforts are also expected toachieve highly independent and transparent monitoring functions

and play a part in the formation of new ideas and principles thatare not beholden to customary practices. Standards on the independence of outside directors are set forth in Appendix 1 of the
Corporate Governance Guidelines to prevent conflicts of interest
with regular shareholders.
To encourage lively discussions at Board of Directors meetings,
meeting materials are sent to members in advance, and at therequest of outside directors, the departments raising agenda items
may provide prior briefings to outside directors on the matters to be
discussed, as part of efforts to minimize information disparities withinternal directors. In addition, one member of staff is appointed toassist the duties of outside audit & supervisory committee
members, and the Auditing Department, the internal auditing organization of the Company, also provides assistance as needed.

Balance of knowledge, experience and abilities on
the Board of Directors overall, and approach to theboard’s diversity and size
When appointing candidates for director, in addition to the perspective of strengthening management oversight functions, abalance between the number of people in supervisory and executive roles is also considered. In addition, to effectively fulfill the roleand purpose of the Board of Directors, the board is made up of
personnel who possess experience and knowledge of priority
issues that related to business management.
When appointing candidates for outside director, people withmanagement experience at companies from other industries are
considered, not limited to those from the logistics industry whichconstitutes the core business of the SBS Group, and candidates
are appointed with diversity in mind, including those with expert
knowledge related to law and accounting audits.
Candidates for internal director are selected from among those witha wide range of knowledge and expertise related to the management of the SBS Group, financial strategy, risk management andcompliance, and the representatives of the SBS Group’s coresubsidiaries are also considered.

Appointment of Outside Directors
NameAudit & Supervisory
Committee Members

Independent
Officer

Reason for Appointment

Concurrent Posts

Jiro Iwasaki○

Jiro Iwasaki brings a wealth of experience and broad insight concerning management from many years as a company officer, and was appointed on the
expectation that his experience and knowledge as an outside officer can bereflected in the management of SBS Holdings.

Outside director of Renesas
Electronics Corporation

Yoshinobu Kosugi○

He has been involved with management as a corporate officer for many years andwas appointed on the expectation that the use of his experience and management
skills as a director will contribute to decision making in the Board of Directors.

Outside auditor of The Yomiuri Shimbun
Holdings
Advisor at Nippon Television Holdings Inc.

○

Masato Matsumoto possesses extensive experience as a corporate manager at afinancial institution along with considerable knowledge regarding finance andaccounting. He was appointed on the expectation that his broad knowledge inthese areas can be reflected in the auditing of SBS Holdings.

Outside director of Sundrug Co., Ltd.

○

Sachie Tsuji possesses many years of experience working on internal control,internal auditing and compliance in addition to her specialized knowledge andexperience as a certified public accountant and was appointed on the expectationthat her specialized knowledge in these areas can be reflected in the auditing of
SBS Holdings.

Representative director of SPLUS Corporation
Director of Tsuji Sachie Public Accounting OfficeDirector of the Association of Certified Fraud Examiners
Outside audit & supervisory board member of C’ BON
COSMETICS Co.,Ltd.
Outside audit & supervisory board member at
Shindengen Electric Manufacturing Co., Ltd.
Outside auditor of Otsuka Holdings Co., Ltd.

Masato Matsumoto

Sachie Tsuji

73

○

○

Improving the Skills of Directors
To ensure that directors fulfill their expected roles, the Company
describes their obligations and responsibilities as directors when
they assume their posts. In conjunction with this, outside directors
receive briefings on the management policy of the SBS Group andother matters related to its business activities.
As ongoing training for directors, SBS Holdings invites outside
instructions to conduct training sessions around twice a year, andalso provides the necessary support for directors to improve
themselves.

Officer Remuneration
To coincide with the shift to a company with an Audit & Supervisory Committee, the Company resolved a policy at the 35th
General Meeting of Shareholders held on March 25, 2021, concerning decisions related to the amount and calculation methodsof remuneration for directors (excluding directors who are Audit &Supervisory Committee members).
With the aim of incentivizing sustained growth and enhanced corporate value, in accordance with the Internal Regulations on Director
Remuneration the remuneration of the Company’s executive directors comprises base remuneration determined on a positional basis,and performance remuneration linked to the Company’s businessresults. The ratio of performance remuneration to total remunerationis set at around 15%. As the subsidiaries concerned conduct theperformance evaluations of directors who concurrently serve as therepresentative directors of subsidiaries, the remuneration of those
directors at SBS Holdings comprises only the base remuneration,
pursuant to the Internal Regulations on Director Remuneration.
The remuneration of outside directors (excluding directors who are
Audit & Supervisory Committee members) comprises only baseremuneration, pursuant to the Internal Regulations on Director
Remuneration.
To better link with Company business performance with remuneration and to enhance objectivity and transparency, performance

remuneration uses consolidated operating income as a measure for
evaluation. Amounts for performance compensation are calculated
by taking the sum of quantitative points based on the achievementof consolidated operating income targets and qualitative points thatassess each officer’s required roles, functions, responsibilities andachievements, and multiplying it by a base amount determined foreach officer. The target consolidated operating income (excluding
gain on the sale of real estate) related to performance compensationin the fiscal year under review was 14,960 million yen, and theCompany posted 15,647 million yen, achieving this target.
To enhance the fairness, transparency and objectivity of proceduresfor director nomination and compensation, SBS Holdings established the Nomination and Compensation Committee by resolutionof the Board of Directors meeting held on December 14, 2022. As
a result, from fiscal 2023 the compensation of each director (except
for directors who are Audit & Supervisory Committee members) will
be determined by the President with the discretion of the Board of
Directors, having given due regard to the details of a report from theNomination and Compensation Committee in response to consultation from the Board of Directors. In addition, the compensation of
directors who are Audit & Supervisory Committee members will be
determined by discussion between all such directors, giving due
regard to the details of a report from the Nomination and Compensation Committee in response to consultation from the Board of
Directors. If all directors who are Audit & Supervisory Committee
members reach an agreement, the compensation will be determined by a meeting of the Audit & Supervisory Committee.
Upper limits on the total remuneration of the directors of SBS Holdings were approved by the 35th General Meeting of Shareholders.
Remuneration for directors who are not Audit & Supervisory Committee members is limited to 200 million yen annually (of which up to
40 million yen is allocated to outside directors), and remuneration for
directors who are Audit & Supervisory Committee member is limited
to 50 million yen annually.

Composition of Director Remuneration
Number of
independent officers
among outside
directors

5

Base Compensation (approx. 85%), set by position(out of 5)

Performance Compensation (approx. 15%),
linked to Company performance

Consolidated Operating Income Associatedwith Performance-Linked Remuneration in
the Fiscal Year under Review

Target:14,96015,647

Results:

million yen
million yen* Excluding gains from the sale of real estate

Remuneration for Each Officer Category (Fiscal 2022 Results)
Officer Category
Directors who are not Audit & Supervisory Committee
members (of which, those who are outside directors)
Directors who are Audit & Supervisory Committee
members (of which, those who are outside directors)

Total Amount of
Remuneration, etc.
(million yen)

Total Amount of Remuneration, etc. by Type (million yen)
Base Compensation

Performance Compensation

Number of Eligible
Officers

117 (20)104 (20)

13 (-)

10 (3)

28 (12)28 (12)

- (-)

4 (2)

* Directors (excluding outside directors) include three directors fulfilling concurrent roles as the representative directors of subsidiaries, and as the performance evaluations of those three directors arecarried out by the subsidiaries in question, they are only paid base compensation as remuneration from SBS Holdings.

SBS GROUP
Integrated report 2023

74

GOVERNANCE

Ensuring Effectiveness
Effectiveness of the Board of Directors
SBS Holdings has conducted anonymous questionnaires toself-evaluate the effectiveness of the Board of Directors annually
since 2017.
The questionnaires, which are filled out anonymously by all directors (11 in total) including Audit & Supervisory Committee
members, have a format where directors answer 22 questions in
the following four sections on a five-point scale, and are also able
to provide supplementary explanations and feedback in comment
fields for each question and in a free text field at the end of thequestionnaire.
With the aim of enabling comparative verification through fixed
point observation, including gauging the impact that changes todirectors and Audit & Supervisory Committee members have on
the evaluation, the same questions were used from 2017 whenthe questionnaires were first introduced until 2021. In 2022, inlight of SBS Holdings’ transition to a company with an Audit &Supervisory Committee and the market segment change in theTokyo Stock Exchange, the questionnaire was revised, including
the addition of questions and adjustments to expressions.
However, since the revisions were minor in nature, as with previous years comparative verification through evaluation points
continued to be used as the method of evaluation.
The average evaluation score across all questions was 4.05
(marking a slight increase of 0.10 points from the previous year’s
result of 3.95). These evaluation results suggest that the Board of
Directors is largely functioning with adequate effectiveness.
The Board of Directors exchanged opinions regarding the questionnaire results and feedback submitted, shared issues for the
future and discussed the roles of various initiatives.
In order to further enhance the effectiveness of the Board of Directors in light of the latest evaluation results, the SBS Holdings
Board of Directors will carry out the initiatives deemed necessary
following extensive discussions and strive to make continual
improvements.
Format of the Survey (each question graded on a five-point scale)❶ Composition of the Board of Directors (three questions)❷ Operation of the Board of Directors (five questions)❸ Matters taken up by the Board of Directors (ten questions)❹ Systems supporting the Board of Directors (four questions)
22 questions in total* The survey included a space for respondents to supplement their assessments anddescribe other opinions.

Average Score Obtained in the Evaluation of the Effectiveness of
the Board of Directors

4.05 points(5-point scale)Operation of the Audit & Supervisory Committee
The Audit & Supervisory Committee of SBS Holdings is made up
of one full time member and two part-time members. In addition toconvening regular meetings of the Audit & Supervisory Committee
at least once a month, ad hoc meetings are also convened asneeded. Through consultation and exchanges of opinions

75

between members, the committee ascertains directors’ status ofcompliance with laws, regulations and internal rules, and endeavors to develop an environment in which operational andaccounting audits are conducted effectively.
The Audit & Supervisory Committee members of SBS Holdings
attend important internal meetings and are able to provide advice
as necessary. They are also given the right to freely view theminutes of various meetings and other documents.
To facilitate the smooth operation of the Audit & Supervisory Committee, the company has assigned one individual as a full-time
staff member of the Board to assist with its duties, and the Company’s Auditing Department also assists with tasks as needed.
Matters concerning authority of personnel matters such as theappointment or transfer of Audit & Supervisory Committee staff aredecided after obtaining consent from the Audit & Supervisory
Committee in advance.
Audit & Supervisory Committee Activities (FY2022)
Name

Meetings

Attendances

Attendance rate

Yasuhiro Yamashita

4

4

100%

Takashi Endo

10

10

100%

Masato Matsumoto

14

11

70%

Sachie Tsuji

14

14

100%

* Yasuhiro Yamashita retired at the conclusion of the 36th Ordinary General Meeting of Shareholders(held on March 25, 2022). In addition, Takashi Endo was elected at the same meeting.

Status of Accounting Audits
This auditing firm has been selected based on a comprehensive
evaluation, including that it possesses a certain size and global
network enabling effective auditing consistent with the Company’sbusiness activities, that it has developed review systems, as well as
its auditing track record. Note that the Company has been continually audited by the same auditing organization for 22 years.
Two certified public accountants carried out the auditing work forfiscal 2022, designated limited liability partners and managing partners Yoichi Tsukimoto and Katsuya Ishida. They were assisted byseven certified public accountings and 21 other personnel.
Compensation for the auditing work is determined based on thedetails of the auditing plans presented by the auditing firm, by way
of producing an estimate of the valid number of days spent engaging in the auditing work.

Internal Control
SBS Holdings has established and operates internal control overfinancial reporting in compliance with the basic framework set forthin On the Setting of the Standards and Practice Standards forManagement Assessment and Audit Concerning Internal Control
Over Financial Reporting (Council Opinions), and issues annual
reports. The most recent assessment of internal control over financial reporting was conducted with a reference date of December
31, 2022. The scope of assessment is determined based on the
The Internal Control Report, including past editions, is available on the SBS Holdings
website.
TOP → Sustainability → Corporate governancehttps://www.sbs-group.co.jp/sbshlds/csr/governance/

Maintaining Constructive Ties with Shareholders and takeholders
importance of the impact on the reliability of financial reporting, andcovers SBS Holdings, 20 consolidated subsidiaries, and one
equity method affiliate.

Ensuring Shareholder Rights
The Corporate Governance Guidelines of SBS Holdings state thatin light of the importance of shareholder rights, the Company shallendeavor to enhance management transparency through theproactive disclosure of information and develop an appropriate
environment in which the rights of all shareholders are ensured. As
a part of these efforts, the Company reports to the Board of
Directors on the status of approval or rejection of the Company’s
proposals submitted to the General Meeting of Shareholders, andif more than 20% of votes are cast in opposition to a Company
proposal, the Company considers action, including dialogue withshareholders, as necessary.

Reinvigorating the General Meeting of Shareholders
and Facilitating the Exercising of Voting Rights
The Company places an emphasis on constructive dialogue withshareholders and endeavors to develop an appropriate environment regarding the exercising of rights by shareholders at theGeneral Meeting of Shareholders. In addition, the Company
recognizes that the exercising of shareholder voting rights as theGeneral Meeting of Shareholders is one of the important rights ofshareholders and makes every effort to provide appropriate information that will aid in decisions concerning the exercising of voting
rights in a timely and appropriate fashion.
To ensure that as many shareholders as possible can attend
general meetings of shareholders and exercise their voting rights,
the Company sets the dates on which such meetings are convened so as not to overlap with days on which many suchmeetings are held by other companies.
To give shareholders an ample period of time to consider the proposals put forth at a general meeting of shareholders, theCompany endeavors to send out the Convocation Notice for the
General Meeting of Shareholders earlier than required by law. In
addition, the convocation notice is posted to the websites of theCompany and the Tokyo Stock Exchange without delay following
a resolution by the Board of Directors on convocation.
Shareholders can choose the manner in which they exercise theirvoting rights, either in writing, or via the Internet by accessing a
Company-designated website for exercising voting rights from aPC, smartphone or mobile phone.
Also note that when the percentage of voting rights held by overseas investors to total voting rights reaches 20% or more, theCompany will translate financial results briefing materials and convocation notices into English, and endeavor to develop an
environment that makes it easier for overseas investors to exercise
their voting rights.

maintaining cross-shareholdings from the perspective of enhancing
the corporate value of the Company and the Group.
For major cross-shareholdings, the Company verifies the benefits
gained by maintaining or strengthening business relationships foreach individual stock, and when it determines that “continuing tohold stock in a certain company will have minimal contribution to
the enhanced corporate value of SBS Holdings and the SBSGroup in the medium and long term,” the stock in such a company
is sold following approval by the Board of Directors, while taking
into account the business performance of the Company and theGroup, the impact on the stock market, and other factors.
Regarding the exercising of voting rights, as a general rule theCompany makes individual determinations regarding the management policies, business strategies and other information about thecompanies in which it holds stock, judges whether the details of
proposals to be voted on by shareholders contribute to theimproved corporate value of that company, SBS Holdings and the
SBS Group, and decides whether to approve or reject proposals
on that basis.

Takeover Defense Measures
The basic policy of the Company is to not employ so-called “takeover defense measures.” When shares in the Company are
subjected to a tender offer, the Board of Directors will clearly
explain its position to shareholders and ensure that the appropriate procedures are followed.
Overview of the 37th Ordinary General Meeting of Shareholders
Date and Time
Tuesday, March 28, 2023 at 10 a.m.
Location
The Company’s meeting room, 37F, Sumitomo Fudosan Shinjuku
Grand Tower, 8-17-1 Nishishinjuku, Shinjuku-ku, Tokyo
Matters Reported
1. The Business Report and Consolidated Financial Statements for theCompany’s 37th Fiscal Year (January 1, 2022 - December 31, 2022)
and results of audits by the Accounting Auditor and the Audit &Supervisory Committee of the Consolidated Financial Statements
2. Reports on the Financial Statements for the 37th Fiscal Year (fromJanuary 1, 2022 to December 31, 2022)
Proposals for Resolution and the Results
Proposal 1: Election of Eight (8) Directors who are not Audit &Supervisory Committee Members
Masahiko Kamata, Masato Taiji, Yasuhito Tanaka, Natsuki Gomi,
Katsuhisa Wakamatsu, Jiro Iwasaki, Shuichi Hoshi and Yoshinobu
Kosugi will be elected as directors not serving as Audit &Supervisory Committee members.
Proposal 2: Election of Three (3) Directors who are Audit &Supervisory Committee Members
Takashi Endo, Masato Matsumoto and Sachie Tsuji will be elected
as Directors serving as Audit & Supervisory Committee Members.
Proposal 3: Election of One (1) Substitute Director who is an Audit &Supervisory Committee Member
Tomoyuki Suzuki will be elected as substitute Director serving as
Audit & Supervisory Committee member.
Proposals 1, 2 and 3 were all approved.

Handling of Cross-Shareholdings
The Company holds stocks in another company only when it determines doing so to be important in building a cooperative relationshipwith a partner company for the sustainable growth of SBS Holdings
and the SBS Group into the future, and when there is significance in

The Convocation Notice for the General Meeting of Shareholders and the Extraordinary Report(including “The Number of Voting Rights for Approval, Disapproval and Abstention in the Matters
Resolved, the Requirements for Adoption of the Matters Resolved, and the Results of the
Resolutions”) can be viewed on the SBS Holdings website.
Top → Shareholder/Investor Information → General meeting of shareholders
https://www.sbs-group.co.jp/sbshlds/ir/meeting/

SBS GROUP
Integrated report 2023

76

GOVERNANCE
Capital and Dividend Policies
The Company strives to improve corporate value and shareholder
value through the sustainable growth of SBS Holdings and the
SBS Group. To maintain financial health that can withstand strategic investments made for growth, we target a shareholders’ equity
ratio of 30% or higher and do our utmost to achieve this.
The Company considers shareholder return to be one of its mostimportant management issues. The Company’s basic policy is tocontinuously maintain dividend levels and endeavor to raise dividendlevels based on business performance while retaining sufficientinternal reserves to build a solid management base.
Shareholders’ equity ratio

Dividend per share (FY2022)

23.7%

61 yenCollaboration With Stakeholders Other Than Shareholders
Seeking enhanced corporate value in the medium and long termon keeping with the SBS Group Code of Behavior, SBS Holdings
and the SBS Group make every effort to respect stakeholders,clarify the purpose of the Company and the Group to them, andmaintain positive relationships.
In addition, the Board of Directors of SBS Holdings takes responsibility for periodically evaluating whether the SBS Group Code of
Behavior is being broadly put into practice.
The Company has established the SBS Group Sustainability Promotion Committee as a joint effort of SBS Holdings and the SBSGroup to promote action on the issues surrounding sustainability.
Meeting bodies operated under the committee decide on andimplement action policies to deal with various issues.
(See “For a Sustainable World” on page 49)

Disclosures

Responding to the Corporate Governance CodeIn addition to making appropriate disclosures in accordance withlaw, the Company makes disclosures when it has formulated plansconcerning the management foundations, business strategies andother action needed to ensure future growth in order to achieve
improved corporate value in the medium and long term.
We have been making information disclosures in English to theextent reasonable to gain corporate recognition from shareholders,investors and other stakeholders in Japan and overseas, and tocontribute to enhancing corporate value to a global level throughdialogue with stakeholders including shareholders and investors. As
the points of contact in promoting dialogue with shareholders andinvestors, the Company has appointed an officer in charge of IR anddesignated the IR and Corporation Communications Department.
Primarily the General Manager of the IR and Corporate Communications Department handles individual dialogue with shareholders andinvestors, with the President and officer in charge of IR also taking
part as appropriate.

The Company places an importance on the Corporate Governance Code (formulated and published by Tokyo Stock Exchange,
Inc. in cooperation with the Financial Services Agency) as a document that summarizes the key principles contributing to thesustainable growth and medium-to-long term improvement in corporate value of publicly listed companies. The Company has also
embraced the “comply or explain” stance required by the code.
In its corporate governance report, SBS Holdings reports on its
disclosure status according to the principles of the Corporate
Governance Code, and for those supplemental principles whichhave not been immediately addressed in their entirety, theCompany explains the reasons and describes its outlook for the
future.
●●●●Measures for substantial shareholders’ attendance at meetingsof shareholders (Supplementary Principle 1-2-5)
Oversight of plans for successors for CEO, etc. (Supplementary
Principle 4-1-3)
Procedures for appointment or removal of representative director(Supplementary Principles 4-3-2, 4-3-3)
Coordination between independent outside directors and top
management, such as the appointment of a lead independent
outside director (Supplementary Principle 4-8-2)

Note that while action on ensuring diversity in the promotion of corehuman resources (Supplementary Principle 2-4-1) and initiatives onsustainability (Supplementary Principle 3-1-3) are still underway, we
have ascertained the issues and are pursuing initiatives.

The Corporate Governance Report submitted to Tokyo Stock Exchange, Inc. is postedon the SBS Holdings website.
TOP → Sustainability → Corporate governancehttps://www.sbs-group.co.jp/sbshlds/csr/governance/

77ComplianceManagement

Establishment of Consultation and Internal Reporting
Hotlines

The SBS Group has established the SBS Group Code of Behavior and SBS Group Compliance Regulations and is committed todeveloping its compliance systems and promoting compliance.
Playing a central role in this effort is the SBS Group Compliance
Meeting, which comprises members appointed from SBS Group
companies. In addition to playing a pivotal role in awareness-raising activities, the Compliance Meeting also monitors,
confirms and investigates compliance violations and drives
improvements. Awareness-raising tools (compliance cards,
compliance manuals, compliance rulebooks) are also distributed
among all Group employees in an effort to promote fair andethical conduct and activities through shared awareness andknowledge.

The SBS Group has established and operates hotlines throughwhich all employees working in the SBS Group can seek consultation or make reports when they become aware of an issue withthe workplace environment or business operations, or of
conduct that violates laws, internal regulations or corporate
ethics.
There are three hotlines, the General Workplace Consultation
Office fielded by the administrative office of the Compliance
Meeting, the Audit & Supervisory Committee Member Hotline
fielded by full-time Audit & Supervisory Committee members,
and the Attorney hotline fielded by consulting attorneys. The
General Workplace Consultation Office allows a choice ofcontact details (direct dial) for consultation staff (male or female)at the discretion of the person seeking consultation.
The consultations and reports received by each hotline arereported to the Board of Directors by the administrative officer of
the SBS Group Sustainability Promotion Committee. After conducting an objective investigation and verifying the facts of acase, the response is discussed with the relevant departmentsof SBS Holdings and the SBS Group.
Also note that a protection system has been put in place by prescribing internal regulations that prohibit the disadvantageous
treatment of those who seek consultation or make reports.

Initiatives to Increase Awareness
The SBS Group tries to increase awareness of compliance by
providing regular training and disseminating information toemployees. In tiered training, we provide instruction focused oncompliance in a broad sense, while in training for specialized
themes, we provide guidance to managers under the theme ofharassment. We also regularly distribute educational materials tothe persons in charge and conduct follow-ups to ensure they
can provide on-site guidance. “Compliance Newsletter” is issued
to all employees to communicate compliance-related paradigms
and news, and we also produce original compliance training
videos to be screened during training and on-site.

Emergency Response System
A system to take appropriate action when a matter of concern
has been ascertained or reported has been put into place. This
includes the establishment of an Internal Investigation Committee
chaired by the chairperson of the SBS Group Compliance
Meeting, which investigates the facts, makes recommendations,and proposes to the Audit & Supervisory Committee that an
extraordinary meeting of the Board of Directors be convened.

Compliance Awareness Survey
The SBS Group periodically conducts compliance awarenesssurveys to ascertain the extent of compliance awareness among
employees and to monitor changes in the environment surrounding employees. The survey results are used to roll out newmeasures, and when issues come to light in the consultation orreporting hotlines, corrective measures are implemented.
Number of times the Compliance
Meeting was convened

Reporting and Consultation Flow
Employees

2
Number of Compliance-Related Training
Sessions

16* Tiered training + specialist training (harassment)

Number of Consultations Fielded byCompliance Consultation Hotlines

265

ReportingConsultation

SBS Group Internal Reporting Hotline
Internal Reporting Hotline
General Workplace Consultation Office
Audit & Supervisory Committee Member Hotline
ReportingOutside Reporting Hotline
Attorney hotline

Request for investigation

Compliance Meeting(Chairperson: Sustainability Officer, Administrative
Office: Sustainability Promotion Department)
Reporting

SBS Holdings Board of Directors

ReportingInstruction

Request forinvestigation
ReportingInternal
Investigation
Committee* Established when it isdetermined that a matter
seriously impacts
management

Reporting

Sustainability Promotion Committee

SBS GROUP
Integrated report 2023

78

GOVERNANCE

Risk Management
Crisis Management Framework
With the SBS Group Risk Management Meeting playing a central
role, information is shared on crisis management matters under
the jurisdiction of each meeting body, namely the Transportation
Safety Promotion Meeting, Compliance Meeting and Information
Security Promotion Meeting. When a determination is made thata crisis has occurred, a company-wide response is initiated inaccordance with the Crisis Management Manual. Note that the
response when a COVID-19 infection has occurred is carried out
based on procedures set forth in SBS Group guidelines.
Main Crisis Matters
●

●

●

●

Information Security Promotion Meeting
Major security incidents, cyber-attacks, system failures
Transportation Safety Promotion Meeting
Vehicle and industrial accidents that involve human life
Compliance Meeting
Corporate scandals such as inappropriate labor management,
fraudulent accounting or inadequate information management
Disaster Response Management (Business Continuity Plan)
Natural disasters such as major earthquakes

BCP and BCM
The SBS Group recognizes that in the interest of safeguarding
people’ s lives, it has a social responsibility to continue to performbusiness activities with a focus on logistics as a part of social
infrastructure in the event of a major disaster, and has formulated
a business continuity plan (BCP) accordingly. The BCP clearlystipulates matters such as conditions for countermeasures,
advance preparation, initial response and restoration efforts. We
also focus on business continuity management (BCM), to ensurethat the BCP we have formulated functions properly.

Emergency Response Drills
The SBS Group periodically conducts emergency response drills to
prepare for major disasters and other emergencies. The drills focus
on setting up an emergency headquarters and alternate sites during
an emergency, coordinating information such as the state of damage
and safety at each Group company and site, and sharing all related
information. The specific scenario is changed for each drill.

and share site damage reports as quickly as possible in the eventof an emergency, facilitating business continuity.

Developing Site Information and Sharing Hazard Risks
As part of BCM initiatives, site information including hazard risks*
is centrally managed and shared throughout the Group. Sharing
information allows the SBS Group to standardize the measurestaken to address issues and facilitates coordination with nearby
business sites. * Government-issued hazard maps are used.

Ensuring Driver Safety
To ensure driver safety, all Group-operated vehicles are provided
with emergency supplies (water, emergency toilets, thermal sheets
for protection against cold). Additionally, mutual acceptancearrangements have been made so that certain locations can beused as driver evacuation locations during an emergency.

Dedicated Disaster Information Portal Site for Employees
The SBS Group has set up the SBS Group Disaster Information
Portal Site as a dedicated site for employees to share business
continuity-related information such as the state of damage in theGroup in the event of an emergency. At regular times the site
provides useful disaster prevention information.

Certified by the Tokyo Metropolitan Government as
a Company Discouraging the Simultaneous Return
Home of Employees during a Disaster
In December 2018, SBS Holdings was certified by the Tokyo
Metropolitan Government as a Company Discouraging the
Simultaneous Return Home of Employees during a Disaster. The
certification recognizes the steps taken by SBS Holdings tostockpile food and supplies for a disaster and the status ofvarious facilities and intra-Group coordination allowing employees
to take refuge in the offices. Going forward, SBS Holdings willcontinue to pursue these initiatives as a certified company.
SBS Holdings is also part of disaster prevention
cooperative agreements with Sumida-ku
and non-governmental organizations.

Development of an Intra-Group Emergency Contact Network
An emergency contact structure and emergency contact network
is maintained and managed to confirm the safety of employees
Report on the Outbreak and Response to a Fire at a Distribution Facility
At around 6:40 p.m. on June 30, 2022, a fire broke out at Ami Logistics Center 2 (6-1 Hoshinosato,
Ami-machi, Inashiki-gun, Ibaraki Prefecture), which is operated by SBS Flec. The fire department was
immediately notified and the site was evacuated. We have confirmed that all employees of SBS Holdings were
unharmed. One individual involved with construction was transported to hospital complaining of throat
soreness, but was soon released and began to recover. At 4:54 p.m. on July 5, 2022, a report on
extinguishment of the fire was received from the fire department. An area of 6,683.3 m2 was burned. On July 7,2022, an on-the-spot investigation was carried out by the fire department and police. SBS Flec has been fully
cooperating with efforts to identify the cause of the fire. Although the fire did not spread noticeably to theadjacent Ami Logistics Center 1, some damage was observed.
The fire caused considerable inconvenience and concern to many people involved, including those in thevicinity of the site. We once again extend our deepest apologies. We will work harder to prevent fire andstrive to improve systems to respond to emergencies.

79

Background
June 30 at around 6:40 pm Outbreak of fire
July 2 at around 6:40 am Flashover occurred
July 5 at 4:54 pm Extinguishment report received
from the fire department
July 7 On-the-spot investigation conducted by thefire department and police

Information Security
The SBS Group recognizes that appropriately protecting andmanaging all kinds of information on customers and otherstakeholders is an important social responsibility. Based on thisbelief, we have established an information security policy andvarious standards, and have established an effective
management structure to deal with various information andcyber-security risks.

Information Security Policy
We have established the SBS Group Basic Policy on Information
Security and declared a Group-wide commitment to tacklinginformation security.

SBS Group Basic Policy on Information Security
1. We will observe laws, government-issued guidelines and othernorms related to information security.
2. We will clarify responsibilities related to information security andestablish systems to implement information security measures.
3. We will identify information security risks and take appropriate
personal, organizational, technical and physical measures.
4. We will conduct training and raise awareness concerning
information security and ensure that all employees are able tocarry out their work with an awareness of information security.
5. We will carry out inspections of our information security-related
management systems and initiatives, and conduct ongoing
reviews and make continual improvements.

■ Information Security Management
The SBS Group has established the SBS Group Information
Security Policy. In accordance with the policy we strive to firmly
maintain security levels, with the Information Security Promotion
Meeting playing a central role in monitoring the status of security
measures on a Group-wide basis while promoting education
and awareness-raising related to information security.
■ Protection from Threats
To deal with high-level threats, we have installed an antivirus
tool that employs artificial intelligence (AI). We have also installeda next-generation firewall that strengthens our defenses, notonly against attacks from the outset, but also in the event of an
attack from the inside.
■ Responding to Vulnerabilities
By introducing a security operation center (SOC) service, wehave enhanced monitoring and checking functions. We also
perform inspections of public server vulnerabilities and perform
vulnerability tests on the necessary servers in an effort tomaintain safety.
■ Third-Party Verification
We periodically commission management reviews by specialist
information security firms to improve the level and quality of our
information security management.

Information Security Governance
The SBS Group has established an information security
governance framework through which it strives to maintain astandard Group-wide infrastructure and share information. We
have also set up internal systems enabling us to effectively
respond to security incidents and issues. Incident responseorganizations not only respond when an incident occurs, butalso plan and implement prevention, education andawareness-raising efforts during normal times to control security
management across the Group.
SBS Group Information Security Governance
Sustainability Promotion Committee(Committee members: representative directors ofeach Group company)

Information sharing

Periodic reporting

Information Security Promotion Meeting*(Chairperson: CIO)
Planning of measures Proposals

Determination

Planning Subcommittee
Auditing and monitoring Reporting

Execution

Group Companies* Formulation and promotion of information security infrastructure
within the Group / disseminating the latest security information
throughout the Group / Measures to quickly establish control when
an incident occurs / education and awareness-raising /development of information security policies and standards for

Education and Awareness-Raising■ Seminars
We offer purpose-built curricula for employees at various levels
and for information security personnel of Group companies.
■ e-Learning
We conduct regular awareness-raising activities, including
requiring employees across the Group to undergo e-learning
training once a year.
Employees Undergoing Training in Fiscal 2022
Seminars

474

e-Learning

7,484

SBS GROUP
Integrated report 2023

80

Financial and Business Information

Period28th fiscal period

29th fiscal period

30th fiscal period

31st fiscal period

FY2013

FY2014FY2015FY2016

Year of Financial Results
Net Sales

Million yen

132,205

141,535

157,996

149,054

Ordinary Income

Million yen

3,779

3,648

5,772

7,832

Net income attributable to owners of parent

Million yen

1,549

2,725

-3,815

5,111

Comprehensive income

Million yen

1,817

3,702

-4,693

5,346

Net assets

Million yen

29,21835,091

29,94734,533

Total assets

Million yen

108,354

131,120

124,817

122,330

Net assets per shareYen

742.68811.23706.32818.55

Net income per share

Yen

40.26

69.77

-96.84128.69

Shareholders’ equity ratio

%

26.7

24.3

22.5

26.6

Return on equity (ROE)

%

5.5

9.0

-12.7

16.9

Stock price to earnings ratio (PER)

Times

13.0

14.4

-9.8

6.3

Cash Flows from Operating Activities

Million yen

6,257

6,603

7,728

12,201

Cash Flows from Investing Activities

Million yen-6,214-15,101-7,081-10,043

Cash Flows from Financing Activities

Million yen

80

8,893

-2,685-1,733

Balance of cash and cash equivalents

Million yen

10,306

11,037

8,984

9,383

4,662
(7,906)

5,572(8,512)

5,555(8,636)

5,189(8,652)

23

27

23

17

8,478

15,988

11,142

10,455

Number of employees (additionally, average
number of temporary employees)
Consolidated subsidiaries
Capital Investment

Million yen

Notes
1. Net sales do not include consumption taxes.
2. For the 32nd fiscal period, figures after retrospective application are listed due to the early application of “Current Handling of Accounting for Foreign Subsidiaries in the Preparation ofConsolidated Financial Statements” (Practical Report No. 18, March 29, 2017) and “Current Handling of Accounting for Equity Method Affiliates” (Practical Report No. 24, March 29,2017) from the 32nd fiscal period onwards.
3. “Partial amendments to the Accounting Standards for Tax Effect Accounting, etc.” (Accounting Standards Board of Japan Statement No. 28, February 26, 2018) has been applied
since the beginning of the 34th fiscal period, and for the 33rd fiscal period figures after retrospective application are listed.
4. Diluted net income per share is not listed as there are no potential shares that have a dilutive effect.
5. The number of employees indicates the number of full-time employees.

8132nd fiscal period

33rd fiscal period

34th fiscal period

35th fiscal period

36th fiscal period

37th fiscal period

FY2017FY2018FY2019FY2020

FY2021

FY2022

152,870

203,516

255,548

257,192

403,485

455,481

6,475

7,607

10,172

10,883

20,48921,404

4,446

4,409

6,079

6,826

10,79011,732

4,702

4,494

6,923

7,181

13,93614,18938,51048,17354,077

68,14680,707

92,172

127,802

171,796

180,047

254,550

277,197

296,898

916.501,001.05

1,136.22

1,277.92

1,527.58

1,772.04

111.94111.01153.06171.88271.67295.39

28.5

23.1

25.1

19.9

21.9

23.7

12.9

11.6

14.3

14.2

19.4

17.9

10.1

12.8

12.4

15.2

12.0

9.4

11,671

12,39816,872

17,262

27,472

22,407-8,127-22,433-12,579-30,480-22,343-15,895-1,42014,815-2,08422,726-9,278489

11,53416,303

18,49527,537

23,79532,6685,515(8,911)

6,979(10,575)

7,124(10,674)

9,742(12,098)

10,689(12,805)

10,859(11,970)

16

25

24

28

33

41

9,576

11,607

11,71011,507

14,501

17,859SBS GROUP
Integrated report 2023

82

ESG Data

CO2 Emissions

Water Usage

CO2 ( t)Emissions per unit of net sales

120,000
100,000■Facilities■Vehicles■Emissions per unit of net sales

80,000180,000

80

160,000

60

60,000(per person m3) Consumption per unit

9.0

■ Usage ■ Consumption per unit

8.0

140,000

7.0

120,000
40

40,00020,0000

Water Resource Usage (t )100

100,000

20

80,000060,000

6.0

2018

2019

2020

2021

2022

Facilities

22,22326,09032,782

34,59537,444

Usage

Vehicles

68,572

65,15766,08866,82067,533

Consumption per unit 7.45

Total

90,79591,247

98,869101,405

105,007

Emissions per
47.77
unit of net sales

38.095

40.77

28.23

26.31

2017

2018

2019

2020

2021

2022

111,175

127,524

149,681

147,097

151,070

170,250

6.71

7.72

6.32

6.31

7.16

5.0

* Emissions per unit of net sales are figures for every 100 million yen in sales

Power Consumption

Copy Paper Usage

Electricity Usage (thousand kWh)

100,000(per person: 1,000 kWh) Consumption per unit

■ Usage ■ Consumption per unit

80,000

Copy Paper Usage (thousand sheets)

4.0

100,000

3.5

80,0003.0

60,0002.5

40,0002.0

20,000(per person: pages) Consumption per unit

4,000

■ Usage ■ Consumption per unit

3,700

60,0003,400

40,000

3,100

20,000
0

2017

2018

2019

2020

2021

2022

44,20559,25153,68583,74789,88086,229Consumption per unit 2,964

3,116

2,770

3,598

3,753

3,627

2017

2018

2019

2020

2021

2022

32,75444,74052,264

66,386

74,14978,875

Usage

Consumption per unit 2.19

2.35

2.70

2.85

3.10

3.32

Usage

2,800
2,500

* Calculations are made in accordance with “Joint Guidelines on Methods for Calculating CO2 Emissions in the Logistics Field, Version 3.1” provided by the Agency for Natural Resources and Energy of
the Ministry of Economy, Trade and Industry.
* As the majority of CO2 emissions are produced by the operation of vehicles, emissions are influenced by the activity level and efficiency of the SBS Group’s overall business activities. For this reason,
net sales, an indicator reflecting the activity level of the company overall, is used as the denominator. However, environmental impacts including water, electricity and copy paper mainly occur within
offices and facilities, and therefore, there is significant room for reduction through employees’ environmental conservation efforts. For this reason, these figures are calculated on a per-person basis.

Status of Environmental Certifications Acquired (as of the end of fiscal 2022)
Certification

Company Name

ISO14001(environmental management systems)

SBS Toshiba Logistics, SBS Ricoh Logistics, SBS San-ai Logistics, SBS Logicom, SBS Flec, SBS Freight Service,
SBS Zentsu, SBS Sokuhai Support, SBS Furukawa Logistics

Green Management Certification

SBS Logicom

GPN Certification(Green Purchasing Network)

SBS Logicom * Certified as a delivery service for the Eco Product Net

Status of Quality-Related Certifications Acquired (as of the end of fiscal 2022)

Number of Consultations Fielded by Compliance
Consultation Hotlines (FY2022)*

Certification

Company Name

Details of Consultations

SBS Toshiba Logistics, SBS Flec, SBS Flecnet,
SBS Freight Service, SBS Zentsu, SBS San-ai Logistics,
SBS Furukawa Logistics

Consultations regarding labor and business operations

ISO9001(Quality Management Systems)

ISO27001(Information Security Management Systems)

SBS Ricoh Logistics, SBS San-ai Logistics, SBS
Logicom, SBS Sokuhai Support

ISO/IEC27001*

SBS Toshiba Logistics

ISO/IEC17025(Testing and Calibration Organization
Management Systems)

SBS Toshiba Logistics

Privacy MarkSBS Freight Service, SBS Staff, Marketing
Partner, Nippon Record Center

JAS Organic Agricultural
Product Subdivider Certification

SBS Zentsu

Relocation Safety MarkSBS Logicom* Jointly with the International Electrotechnical Commission (IEC)83

Number of Projects

133

Consultations regarding interpersonal relationships in the workplace 97
Others

35

Total

265

* Total consultations fielded by hotlines set up inside and outside
the company from which employees are able to seek direct
consultation

Renewable Energy Generating Capacity (as of the end of fiscal 2022)
Facility Name

Generating Capacity (kW)SBS Sokuhai Support waste processing volume

Facility Name

Generating Capacity (kW)Amount Handled ( t )Item Name

Noda Yoshiharu Logistics Center

514

Toyohashi Logistics Center

221

Waste plastics

Shibayama No. 1 Power Plant

2,826

Shin-Sugita Logistics Center

1,109

Recycled plastics

Kawagoe Logistics Center

830

Tokorozawa Logistics Center

973

Scrap metal

888.736

Nishinihon Logistics Center (Kyotanabe)

617

Nanko Logistics Center

1,488

Waste wood

1,042.411

Shibayama No. 2 Power Plant

710

Yokohama Kanazawa Logistics Center

1,523

Paper and other waste

1,174.312

Odawara Sales Branch

210

Daito Warehouse

Total

9,194.961

Takasaki Sales Office

161

Logistics Center Ichinomiya

Kimitsu Branch

268

Noda Seto Logistics Center*

Yoshikawa Branch

223

Total

Nagatsuta Logistics Center

935

129

6,089.502
0

1,601
5,676
19,987.37* Planned completion in 2024

G-Mark Certification Status (as of the end of fiscal 2022)
Company Name

Number of Newly
Certified Business Sites

Number of Business Sites
with Existing Certification

Total Number of G-MarkCertified Business Sites

Number of G-MarkEligible Business Sites

G-MarkCertification RateSBS Ricoh Logistics

1

25

26

27

96.30%SBS Logicom

1

35

36

36

100.00%SBS Freight Service

0

14

14

14

100.00%SBS Flecnet

0

23

23

26

88.50%SBS Zentsu

5

66

71

86

82.60%SBS Sokuhai Support

0

7

7

9

77.80%SBS Group Total

7

170

177

198

89.40%*1 Certification rate of nationwide truck transportation business sites: 33% (figure as of December 15, 2022 *from the website of the Japan Trucking Association)*2 Applicable business sites includes newly established business sites (business sites under three years old that do not meet the requirements for G-mark application).

Status of Human Resource Development Initiatives: SBS Group Training Results (as of the end of fiscal 2022)
Category
Tiered Training
Management Training

Details

Number of
CoursesNumber ofTrainees

21

942

Diversity promotion seminar for directors ● Program to promote the success of female managers●
Next generation leader development program, etc.

6

256

11

8,647

5

120

2
45

693
10,658●Training for new employees●

Training for mid-level employees●

Training for managerial employees●

Specialist Theme Training●

Eco and safe-driving training

Theme-Specific Training●

Site manager development training

Support for Self-Improvement●

Correspondence courses●●

Operation manager training●●

Information security training, etc.

Sales skills improvement training

e-Learning●●

Business skills training, etc.

Business Career Certification, etc.

Total

Investment in the Environment(Unit: million yen)

Investment

Details

2017

2018

2019

2020

2021

2022

Vehicle-related investments

CNG vehicles, LPG vehicles, hybrid vehicles, vehicles
that meet heavy vehicle fuel efficiency standards, etc.

3,616

3,791

3,055

4,379

3,514

1,880

Improved fuel efficiency (eco and safe-driving training, etc.)
Investments related to improved energy savings at facilities Demand monitoring and energy-efficient lighting, etc.

1

3

1

19

8

0

35

45

131

26

14

39

Investments in global environmental conservation

Solar power generation, etc.

13

6

6

6

29

34

Environmental management

Environmental management registration and management activities, etc.

6

3

3

4

8

9

Environmental communication

Internal and external awareness-raising, creation of reporting materials, etc.

Total

6

6

6

10

8

10

3,677

3,854

3,202

4,444

3,580

1,972

* While referencing the Environmental Accounting Guidelines (2005 edition) of the Ministry of the Environment, classifications are made in light of the SBS Group’s business characteristics as acomprehensive logistics business operator.
* “Investments in global environmental conservation” are expenditures for the installation, operation, maintenance and upkeep of renewable energy-derived power generating equipment operated by theCompany at its facilities. To date, all such facilities employ solar power generation.

SBS GROUP
Integrated report 2023

84

ESG-related Policies

SBS Group Code of Behavior
1. Fair and Transparent Corporate Activities
We will engage in fair and transparent corporate activities in accordance with laws, regulations and the common sense of society.
We will take a resolute stance against antisocial activities and forces.
2. Promotion of Corporate Governance
We will actively disclose information to shareholders and society, and enhance management transparency.
We will respond seriously to proposals regarding management improvements and similar matters, and strive to achieve open managementwith respect to shareholders and society.
3. Ensuring Safety
We regard being safe with zero accidents as our most important mission, and will make every effort to ensure safety with an awareness of oursocial responsibility and role.
We will observe rules, remain faithful to basic requirements, enhance knowledge, techniques and skills, and strive to cultivate a culture that
requires safety as essential.
4. Social Contribution and Consideration of the Environment
With an awareness of our responsibilities as a good corporate citizen, we will actively contribute to society through our corporate activities.
As a good citizen of the Earth, we will pay attention to environmental issues and pass on a healthy global environment to those who come afterus.
5. Customer-First Principle
We will adopt a customer-first perspective and always act in good faith by considering the customer’s viewpoint.
We will take on the challenge of unremitting innovation in our thoughts and actions, and provide customers with services that meet their
expectations.
6. Compliance with Laws and Regulations
We will observe all laws, and act in good faith so as not to warrant criticism from customers in light of social norms.
We will responsibly fulfill our duties as members of a corporation, and properly observe the regulations, rules and manners to be followed in
executing operations.
7. Development of a Fulfilling Workplace
We will cultivate a civil, free and open corporate culture with mutual respect for creativity and independence.
We will place importance on mutual cooperation and workplace communication to ensure a safe and pleasant workplace environment.
●
●

●
●

●

●

●
●

●
●

●
●

●
●

SBS Group Environmental Policy[Basic Principles]
The SBS Group regards consideration for the environment to be an important management issue. The Group promotes initiatives to reduce theenvironmental impact associated with its business and improve the environment through its business activities, and endeavors to preserve theenvironment as a good corporate citizen.
[Basic Policies]
In carrying out various business activities in Japan and overseas, the SBS Group works with Group companies and strives to realize its basic
principles in accordance with the follow policy.
1. We will observe environmental laws and regulations in Japan and overseas.
2. We will give due consideration to the maintenance and preservation of the natural environment.
3. We recognize the finite nature of resources and energy and will endeavor to utilize them effectively.
4. We will put in place systems to promote environmental conservation and actively pursue education and awareness-raising activities.
5. We will disseminate these basic principles and basic policies among everyone working in the SBS Group and broadly disclose the outcomes ofrelated initiatives.

SBS Group Human Rights Policy[Basic Policies]
Based on the principles set forth in its Management Philosophy and the SBS Group Sustainability Policy, the SBS Group has established the SBSGroup Human Rights Policy as its highest level policy regarding human rights, and will drive human rights initiatives in keeping with the policy.
[Basic Approach]
The SBS Group upholds the United Nations Guiding Principles on Business and Human Rights as a basic principle, supports and respects
international norms on human rights including the International Bill of Human Rights, the ILO Declaration on Fundamental Principles and Rights at
Work, the Children’s Rights and Business Principles and the UN Global Compact, and advances business operations in accordance with theseprinciples.
[Scope of Application]
The Human Rights Policy applies to all officers and employees of the SBS Group. We also expect our business partners and other related parties tounderstand and support the policy.

85

[Human Rights Due Diligence]
The SBS Group strives to practice appropriate human rights due diligence to identify, assess, prevent and mitigate negative impacts on humanrights related to its business activities.
If it is found that the business activities of the SBS Group have caused or contributed to a negative impact on human rights, the Group will takemeasures to correct and remedy the situation through appropriate means.
[Remedial, Corrective and Preventive Action]
When the SBS Group determines that various standards regarding human rights have not been appropriately adhered to, it will take appropriate
remedial action with regard to the people who have been impacted in accordance with the UN Guiding Principles, identify the cause of the issue,
and implement effective improvement measures.
In addition, as services to deal with consultation regarding human rights and other matters, the Group will put in place systems to field consultations
from customers and other stakeholders by telephone or the website, etc. and from employees through internal and external reporting hotlines,
ensuring that human rights issues are dealt with in a responsible manner.
In addition, the Group will take adequate precautions to safeguard anonymity and confidentiality to ensure that those who seek consultation throughthese services do not suffer disadvantageous treatment.
[Education and Awareness-Raising]
The SBS Group provides appropriate education and awareness-raising to officers and employees to ensure that this policy is well understood andeffectively implemented.
[Person in Charge]
The SBS Group will specify an officer responsible for the implementation of this policy and supervise its implementation.
[Dialogue and Consultation with Stakeholders]
The SBS Group will engage in sincere dialogue and consultation with related stakeholders regarding measures to deal with negative impacts onhuman rights, and endeavor to make improvements.
[Information Disclosure]
The SBS Group will disclose information on the progress and results of initiatives on respect for human rights through its website and reports, andendeavor to gain the understanding of stakeholders.
[Revisions to the Human Rights Policy]
The SBS Group understands that respect for human rights will be increasingly important in the future and that the issues to be addressed will change
depending on societal changes, business trends and other factors. Accordingly, the Group will periodically consider the need to review the policy
and make revisions as needed.

SBS Group Diversity Policy[Basic Policies]
The SBS Group regards a workplace in which each employee can utilize their individuality and take on the challenge of creating new value with
passion and enthusiasm as ideal, and recognizes its corporate responsibility to build such an environment. Given that employees utilizing theirdiversity and demonstrating their individual capabilities is a source of new value creation, the Group regards Diversity & Inclusion as one of its key
management strategies. The Group has established the SBS Group Diversity Policy and will aim to sustainably increase corporate value.
[Action Plans](1) The SBS Group respects the individuality of a diverse range of employees.
The SBS Group respects employee diversity (in terms of gender, age, disabilities, nationality, academic history, type of employment, values,
sexual orientation, gender identity, and so on).
The SBS Group hires, develops and promotes a diverse range of human resources irrespective of race, religion, nationality, gender, sexual
orientation, disability or other attributes.
(2) The SBS Group helps employees let their individuality shine brighter.
The SBS Group provides employee training to ensure that all employees understand the importance of diversity, and can respect and accept
one another’s individuality.
(3) The SBS Group endeavors to foster an organizational culture that utilizes the diversity of employees.
The SBS Group is committed to developing a workplace in which people accept one another’s individuality and differences, respect others as
equals, and in which anyone can share their opinions and act with peace of mind.
The SBS Group promotes the establishment of flexible and diverse working styles so that all employees can enjoy a healthy work-life balance.
●

●

●

●

●

SBS Group Declaration on Respect for Human Rights and Elimination of Harassment
All people are born equal with dignity and rights, and no one may harm their character.
Based on this basic philosophy, we deepen our understanding of human rights and act in accordance with a respect for human rights.
To maintain a workplace environment in which everyone can thrive, we will eradicate harassment. To achieve this, we will actively take part ineducational and awareness-raising activities, heed compliance information, acquire knowledge and develop the ability to take action.
Whenever we suffer or witness harassment, we will consult with or report it to a consultation service and never leave it unaddressed.
The SBS Group does not tolerate any form of harassment or discrimination on the basis of differences between people including gender, age,nationality, race, ethnicity, religion, social status, disability, SOGI (sexual orientation or gender identity), values or lifestyle.
SBS GROUP
Integrated report 2023

86

Major Group Companies

Number of Business Sites

Number of Vehicles Owned

Number of Employees

678* Excluding driving schools

23,773

5,080
2,154

(Trucks andother road vehicles)(Forklifts)* All figures are the total number of employees
and differ from the figures listed in securities
reports.

SBS Toshiba Logistics Co., Ltd.

Main Business* Various figures include TL Logi Service Co., Ltd.

4PL/3PL

A Fourth Party Logistics (4PL) company going beyond the boundaries of the Toshiba Group
that proposes and realizes logistics strategies in line with management strategies for a wide
range of customers. Working in partnership with SBS Group companies, SBS Toshiba Logistics provides integrated services from logistics engineering (planning and design) to the operation of logistics functions at the implementation stages, both in Japan and overseas. By
providing total logistics solutions that are not only of a high quality but competitive, the company provides powerful support for solving customers’ management issues.

Truck Transportation

Number of Employees: 2,633
Number of Business Sites: 80
Number of Vehicles: Trucks and other road vehicles: 142, Forklifts: 573
Certifications: ISO14001, ISO9001, ISO/IEC17025, ISO/IEC27001, AEO
Consolidated Subsidiaries: TL Logi Service Co./ Ltd., Toshiba Logistics (Shanghai) Co., Ltd./
Toshiba Logistics (Hangzhou) Co., Ltd./ Toshiba Logistics (Dalian)Co.,Ltd./ Toshiba Logistics Hong Kong Co.,Ltd./ Toshiba Logistics (Singapore) Pte. Ltd./ Toshiba Logistics (Philippines) Corporation/ TL Forwarding Service (Philippines) Corporation/ Toshiba
Logistics (Thailand) Co., Ltd./ TL Service (Thailand) Co., Ltd./
Toshiba Logistics Malaysia Sdn. Bhd./Toshiba Logistics Vietnam
Co., Ltd./ Toshiba Logistics India Private Limited/ Toshiba Logistics America, Inc./ Toshiba Logistics

International Logistics
Modal Shift
Logistics and Delivery for E-commerce
Logistics Center Operation
Processing in Logistics
Support for LT Planning and Introduction
Facility Relocation
Packaging Design and Development

SBS Ricoh Logistics System Co., Ltd.

Main Business* Various figures include SBS San-Ai Logistics Co., Ltd. and Jas Co., Ltd.

4PL/3PL

Managing the supply chains of precision equipment manufacturers played a key part in theestablishment of SBS Ricoh Logistics System. With the impressive quality and “KAIZEN” capabilities for which national brands are renowned in our DNA, we support the success of ourcustomers through domestic and overseas 3PL. With our outstanding logistics technologies,
we continue to propose the best methods for a wide range of customers’ logistics needs
based on a backbone of “recycling-oriented logistics” that integrates procurement, production,
sales and venous logistics.

Truck Transportation

Number of Employees: 4,438
Number of Business Sites: 128
Number of Vehicles: Trucks and other road vehicles: 484, Forklifts: 583
Certifications: SO14001, ISO9001, ISO27001, AEO
Consolidated Subsidiaries: SBS San-ai Logistics Co., Ltd./ SBS Global Network Co., Ltd. /RICOH LOGISTICS CORPORATION [USA]/ RICOH INTER
NATIONAL LOGISTICS (H.K) Ltd. [Hong Kong]/ RICOH INTERNATIONAL FREIGHT FORWARDING (SHENZHEN) CO., LTD.
[China]/ SBS Logistics (Thailand) Co., Ltd. [Thailand]/ SBS
Vietnam Co., Ltd. [Vietnam]/ Jas Co., Ltd.

87

International Logistics
Modal Shift
Logistics and Delivery for E-commerce
Logistics Center Operation
Processing in Logistics
Support for LT Planning and Introduction
Facility Relocation
Packaging Design and Development
Environmental BusinessSBS Logicom Co., Ltd.

Main Business* Various figures include SBS Logicom Kanto Co., Ltd. and K.U.K. LINE Co., Ltd.

4PL/3PL

As a partner company to its customers, SBS Logicom provides total logistics services covering everything from logistics consulting and strategy to planning and operations. With various
waves of change sweeping through the logistics industry, SBS Logicom continues to makestrides forward as a logistics company meeting the needs of a wide range of customers
across various industries and supporting social infrastructure through a focus on warehousemanagement, cargo handling and distribution processing services, along with logistics centers, truck and rail transportation, special transportation, customs clearance and internationaltransportation, government, corporate and school relocations, and on-site logistics.

Truck Transportation

Number of Employees: 6,670
Number of Business Sites: 137
Number of Vehicles: Trucks and other road vehicles: 1,130, Forklifts: 608
Renewable Energy Generating Capacity: 6,812 kW
Certifications: G-Mark, ISO14001, ISO27001, Green Management Certification, GPN Certification, Relocation Safety Mark
Consolidated Subsidiaries: SBS Freight Service Co., Ltd./ SBS Logicom Kanto Co., Ltd./K.U.K. LINE Co., Ltd.

Low Temperature Logistics
International Logistics
Modal Shift
Logistics and Delivery for E-commerce
Logistics Center Operation
Processing in Logistics
Support for LT Planning and Introduction
Logistics facility development
Facility Relocation
On-site Logistics
Packaging Design and Development
Property Management Business

SBS Flec Co., Ltd.

Main Business* Various figures include SBS Flecnet Co., Ltd. and Hinomaru Kyuso Co., Ltd.

3PL

SBS Flec was founded in 1956 as Yukijirushi Logistics Co., Ltd. It handled food logistics as
the logistics subsidiary of the Yukijirushi Group and has honed its expertise in food distribution
technologies and quality control through its nationwide network. Today, SBS Flec provides
comprehensive support for food manufacturers from production to the placement of products
in stores as one of the few 3PL companies able to handle all three temperature zones inJapan, namely dry (room temperature), chilled (refrigerated) and frozen. As a leading company
in low temperature logistics, SBS Flec is committed to delivering foods with safety and peaceof mind.

Truck Transportation
Low Temperature Logistics
Modal Shift
Logistics and Delivery for E-commerce
Logistics Center Operation
Processing in Logistics

Number of Employees: 3,893
Number of Business Sites: 97
Number of Vehicles: Trucks and other road vehicles: 874, Forklifts: 253
Certifications: G-Mark, ISO14001, ISO9001
Consolidated Subsidiaries: SBS Flecnet Co., Ltd./ Hinomaru Kyuso Co., Ltd.

SBS Sokuhai Support Co., Ltd.

Main Business* Various figures include Ai & Ai Co., Ltd.

3PL

In December 1987, the SBS Group started SBS Sokuhai Support as a same-day delivery
business. Revolutionary for its time, this business model is still utilized by many users. Morerecently, SBS Sokuhai Support has been using the expertise it has developed in thesame-day delivery business for the e-commerce home delivery business, which is experiencing rapid growth in demand, and is in the process of expanding its operations to major Japanese cities. The company also combines venous logistics functions to play a part in recycling-oriented logistics.

Truck Transportation
Logistics and Delivery for E-commerceSame-Day Delivery for Corporate Customers
Logistics Center Operation
Processing in Logistics
Environmental Business

Number of Employees: 567
Number of Business Sites: 32
Number of Vehicles: Trucks and other road vehicles: 276, Forklifts: 48
Certifications: G-Mark, ISO14001, ISO27001

SBS GROUP
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88

Major Group Companies

SBS Zentsu Co., Ltd.

Main Business

SBS Zentsu provides total support for the food supply chain by building logistics systems that
consolidate pre-cooled and temperature-controlled transportation, joint delivery and food infour temperature zones. In response to increasingly sophisticated and complex logistics
needs, SBS Zentsu uses the “creativity” it has cultivated providing operations and services formany years as a powerful tool, overcoming difficulties and issues one after another while continually creating new solutions.

3PL

Number of Employees: 4,091
Number of Business Sites: 112
Number of Vehicles: Trucks and other road vehicles: 1,788, Forklifts: 42
Certifications: G-Mark, ISO14001, ISO9001, JAS Organic Agricultural Product Subdivider
Certification

Processing in Logistics

Truck Transportation
Low Temperature Logistics
Logistics and Delivery for E-commerce
Logistics Center Operation

SBS Furukawa Logistics

Main Business* Various figures include Yokohama Drum Manufacturing Co., Ltd.

3PL

Catering to all manner of needs utilizing expertise cultivated as a manufacturer-linked logistics
company including electrical cables, nonferrous metals and synthetic resins. The company
operates global logistics services with a focus on Asia. By providing logistics solutions optimized to the customer, the company achieves efficient logistics.

Truck Transportation
International Logistics
Logistics Center Operation

Number of Employees: 187
Number of Business Sites: 28
Number of Vehicles: Trucks and other road vehicles: 24, Forklifts: 94
Certifications: ISO14001, ISO9001

SBS Freight Service Co., Ltd.

Main BusinessTransportation and delivery network covering the Pacific side of eastern Japan to Kansai. SBS
Freight Service offers an extensive range of transportation services from three-temperature-zone transportation, special transportation such as shipping for filming locations, marine
container drayage transportation, warehousing, storage and distribution processing, and officerelocation services. The company is also focusing on distribution center operation in response
to expanding e-commerce needs.

Truck Transportation

Number of Employees: 362
Number of Business Sites: 21
Number of Vehicles: Trucks and other road vehicles: 216, Forklifts: 62
Renewable Energy Generating Capacity: 212 kW
Certifications: G-Mark, ISO14001, ISO9001, Privacy MarkCompany Relocation

Low Temperature Logistics
Logistics Center Operation
Processing in Logistics
On-site Logistics

SBS Global Network Co., Ltd.
Based on its extensive overseas distribution network that extends from Japan to Asia and theworld, SBS Global Network supports supply chains in Japan and abroad. The company conducts analyses of the current status of international logistics being implemented by customers(consulting). It then proposes and implements optimum import and export operations basedon cargo characteristics and supply chain strategies.
Number of Employees: 158
Number of Business Sites: 9
Number of Vehicles: 5
Certifications: AEO (planned)

89

Main Business
International Air Freight Transportation
International Marine Freight Transportation
Customs Clearance Agency Services
Warehouse and Storage
Domestic Transportation

Toyo Warehouse & Transportation Co., Ltd.

Main Business

Based on large warehouses in Wakasu and Higashi-Ogishima, the company helps strengthen
logistics infrastructure in Tokyo waterfront area. The company primarily engages in 3PL andcustoms clearance services, dealing with a wide range of products. By aiming to build a logistics management system that can cater to every business type, the company proposes optimum warehouse environments and logistics businesses.

3PLInternational Logistics
Logistics Center Operation

Number of Employees: 193
Number of Business Sites: 7
Number of Vehicles: Trucks and other road vehicles: 9, Forklifts: 44

SBS Asset Management Co., Ltd.

Main Business* Various figures include L-MAX Co., Ltd.

Logistics Facility Development

SBS Asset Management is an asset management company responsible for developing thelogistics facilities of the SBS Group. Using expert knowledge and know-how regarding
finance, real estate and logistics, the company independently develops specialized logistics
facilities optimized for 3PL. With a strength in highly functional design informed by an intimate
knowledge of logistics in the field, SBS Asset Management handles to increasingly sophisticated logistics while responding to changes in the value chain based on in-depth research.
SBS Asset Management operates a total asset management business specializing in everything from land acquisition and leasing to asset securitization.

Property Management Business

Number of Employees: 10
Number of Business Sites: 1
Renewable Energy Generating Capacity: 1,500 kW
Consolidated Subsidiaries: L-MAX Co., Ltd.

SBS Staff Co., Ltd.

Main Business* Various figures include Jobright Co., Ltd.

Worker Dispatching Business

SBS Staff operates a worker dispatch business which specializes in the logistics business andis tailored to customer needs. With its unique matching system, the company is able torespond to sudden job openings. Fee-based job placement services are also available.

Paid Employment Placement Business

Number of Employees: 154
Number of Business Sites: 18
Number of Vehicles: 18
Certifications: Privacy MarkBPO BusinessBusiness Contracting
Comprehensive Human Resource
Services Business
Human Resources Portal Website
Operation

SBS Finance Co., Ltd.

Main Business

SBS Finance provides a wide range of services from leasing and sales to insurance. As afinance company excelling in the area of logistics, SBS Finance provides a range of functions
including the joint purchasing of consumables for logistics businesses.

Vehicle and Office Equipment
Leasing Business

Number of Employees: 23
Number of Business Sites: 1

Life and Non-life Insurance
Agency Business

Fuel and Tire Sales Business

SBS GROUP
Integrated report 2023

90

Major Group Companies

Marketing Partner, Inc.

Main Business* Various figures include Global Pet Nutrition Inc.

E-commerce Support

Providing one-stop service for e-commerce site development and operation. The company
provides e-commerce business support covering the four areas of marketing, analysis,
creative and fulfillment.

Marketing Services
Pet Wellness Business

Number of Employees: 74
Number of Business Sites: 1
Certifications: Privacy MarkSBS Driving School Co., Ltd.

Main Business

We operate driving schools with the aim of developing safe drivers in the SBS Group and local
community. Students can obtain licenses for regular cars, mid-sized vehicles and motorcycles.

Driving Instruction

Number of Employees: 56
Number of Business Sites: 3
Number of Vehicles: 87 (training vehicles (cars and motorcycles, shuttle cars, etc.), Forklifts: 2

Japan Logistics Future Limited Partnership for Investment (Japan Logistics Future Investment Fund Co., Ltd.)

Overseas Group Companies
SBS Logistics Holdings Hong Kong Ltd. (Hong Kong)
Shanghai Qingqiliu Plastic Processing Co., Ltd.
SBS Total Logistics Malaysia Sdn. Bhd. (Malaysia)
SBS Logistics Philippines, Inc. (Philippines)
TAS Logistics Co., Ltd. (Thailand) (Thailand)Overseas Affiliate Companies
Atlas Logistics Pvt Ltd. (India)

SBS Holdings, Inc.

Main Business

Number of Employees: 325
Number of Business Sites: 1
Renewable Energy Generating Capacity: 2,826 kW

Company-Wide Strategy(Group strategy functions,
corporate governance functions)Management Control
Others91

Corporate Profile and Stock Information

Corporate Profile* As of July 1, 2023

Company NameSBS Holdings, Inc.

Representative Director

Masahiko Kamata

Established

December 16, 1987

Paid-in Capital

3,920.75 million yen

Net Sales

455.481 billion yen (consolidated) * For the year ended December 31, 2022

Location

Sumitomo Fudosan Shinjuku Grand Tower 25F, 8-17-1, Nishi-Shinjuku, Shinjuku-ku,
Tokyo, 160-6125, Japan
Tel: 03-6772-8200 (main switchboard)Lines of Business

Logistics business, property management business, marketing business, humanresources business, etc.

Fiscal Year

January 1 to December 31

Officers* Only directors listed, as of July 1, 2023

Stock Information

Masahiko Kamata, Representative Director

Number of shares authorized

Shuichi Hoshi, Director

Number of shares issued

Masato Taiji, Director
Yasuhito Tanaka, Director
Natsuki Gomi, Director
Katsuhisa Wakamatsu, Director

154,705,200 shares
39,718,200 shares
Including 2,590 fractional shares

Unit stock system

Yes (100 shares)Securities code

2384

Listed exchangeTokyo Stock Exchange Prime Market

Jiro Iwasaki, Outside Director
Nobuyoshi Kosugi, Outside Director
Takashi Endo, Full-time Audit & Supervisory Committee Member
Masato Matsumoto, Audit & Supervisory Committee Member
Sachie Tsuji, Audit & Supervisory Committee Member

Major Shareholders* T h e i n d i c a t e d fi g u r e s a r erounded off.
* In addition to the shareholding
shown on the right, SBS
Holdings possesses 728 sharesof treasury stock (calculated
based on the number f treasury
shares held as of December 13,2022).
* Of the number of shares held asshown on the right, 9,715,900
shares relate to trust businesses.

* As of December 31, 2022

Shareholder Name

Number of Shares Held

Shareholding Ratio (%)

Masahiko Kamata

14,388,400

36.22%

Custody Bank of Japan, Ltd. (trust account)

5,057,200

12.73%The Master Trust Bank of Japan, Ltd. (trust account)

2,458,700

6.19%

SBS Holdings Employee Share Ownership Association

1,224,500

3.08%

Sumitomo Mitsui Trust Bank, Limited (trust account Ko-18)

1,200,000

3.02%

Masaru Wasami

1,078,600

2.71%

TOBU Properties Co., Ltd.

1,001,000

2.52%

Sumitomo Mitsui Trust Bank, Limited (trust account Ko-13)

1,000,000

2.51%

Junichi Ouchi

601,400

1.51%

Ueda Yagi Tanshi Co., Ltd.

500,600

1.26%

Distribution of shares by shareholder type (number of shares issued: 39,718,200 shares)Securities firms 641,322 shares (1.61%)

Treasury stock 728 shares (0.00%)

Japanese corporations 3,297,211 shares (8.30%)
Non-Japanese corporations 3,616,610 shares (9.11%)

Financial institutions 10,373,000 shares (26.11%)

Individuals and others
21,789,329 shares (54.86%)

SBS GROUP
Integrated report 2023

92

Contact for Inquiries
SBS Holdings Co., Ltd. Sustainability Promotion Department
Sumitomo Fudosan Shinjuku Grand Tower 25F, 8-17-1,
Nishi-Shinjuku, Shinjuku-ku, Tokyo, 160-6125, Japan
Tel: 03-6772-8200