SBS GROUP

BUSINESS & CSR REPORT2020

C O N T E N T S
Environment

03— Business Overview
05— The SBS Group’s Value Creation Process
07—

25— Key Indicators (Fiscal 2019 Results)
26—

Commitment from Top Management

09— Key Topics

Review of Fiscal 2019 Initiatives (Environment)

27— Mid-to-Long-Term Environmental Plan

11— Business Overview and Financial Status

28— Action Plan

15— External Environment and Management Strategy

29— Climate Change Risks and Countermeasures

17— Ascertaining and Responding to Management Risks
21—

Safety & Social

Contributions to the SDGs

23— CSR Promotion in the SBS Group

31— Key Indicators (Fiscal 2019 Results)
32— Review of Fiscal 2019 Initiatives (Safety)
33—

Education and Awareness-Raising, Accident Prevention

Safety34— Safe Driving and Safe Operation Management
35— Engagement between the SBS Group and Society Engagement with
Customers, Engagement with Employees, Engagement withSocietyBusiness Partners, Communication with Stakeholders
37— Social Contribution Activities
Governance39—

Key Indicators (Fiscal 2019 Results)

40— Corporate Governance
44— Compliance45— Risk management
46— Information Security
47— CSR Data * Or "Financial and Non-Financial Data"
49— Corporate Profile and Stock Information
50—

Code of Behavior

Editorial Policy

Key Challenges

The SBS Group has published the Business & CSR Report since fiscal 2018 to inform stakeholders

Before compiling this report, we summarized the following key challenges

interested in the Group's short, medium and long-term value creation efforts by reporting on its

that significantly impact the SBS Group's ability to create value in the short,business development as a comprehensive logistics group, the basic directions, plans, progressmedium and long-term.

and performance of the CSR management activities that support it, and on future issues.

(1) Changes to the structure of the logistics market(7) Human resources

The report is designed to be simple and clear so that it can be easily read even without prior(2) M&A and group synergy(8) Working styles and productivity

knowledge of the SBS Group.

(3) 3PL(9) Energy and climate change

We welcome frank feedback and impressions from readers.

(4) Logistics facility development(10) Crisis management(5) Technology(11) Relationship with society(6) Quality and safety(12) GovernanceManagement 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 enthusiasmof our employees. Social responsibility is essential to corporate growth.
Harmony within the community, efforts to makethose around us happy, and contribution to society far
and wide, is crucial.

Highlights of our Management Philosophy Implementation (Fiscal 2019)
Customers

Total Distance Driven 130,524,653 km

Sales 255.5 billion yen

Shareholders

Dividend per Share 30 yen

Employees

Training Conducted All 43 Subjects

Society and People

Number of Business Sites with G-Mark Certification (Certification Rate) 182 business sites (89.00%)

Actual Training Participants 7,173

Logistics Research Grants 6
Scholarships for Students Receiving Social Care 57
Investment in the Environment 3,202 million yen
Environmental Efficiency (CO2 emissions per unit of sales) 38.09% (39% improvement over the past five years)
Quantity of Renewable Energy Delivered 11,017 kw
Waste Processing Logistics Handling Volume 8,817 t
Development of Society inJapan and Abroad

Details of the Report[Reporting Scope] ■15 Domestic Consolidated Subsidiaries / SBS Ricoh Logistics System Co., Ltd. / SBS Logicom Co., Ltd. / SBS Logicom Kanto Co., Ltd. /SBS Freight Service Co., Ltd. / Nippon Record Center Co., Ltd.* / SBS Global Network Co., Ltd. / SBS Flec Co., Ltd. / SBS Flec-net Co., Ltd. / SBS Zentsu Co.,
Ltd. / SBS Sokuhai Support Co., Ltd. / SBS Staff Co., Ltd. / SBS Finance Co., Ltd. / SBS Asset Management Co., Ltd. / L-MAX Co., Ltd. / Marketing Partner,
Inc. ■Public Interest Incorporated Foundation / SBS Kamata Foundation[Reporting Period] Fiscal 2019 (January to December 2019) [Information Disclosure] On the SBS Group website, we disclose and make available comprehensive
IR information and general company information in addition to CSR information not listed in this report. https://www.sbs-group.co.jp* As of July 1, 2019, Nippon Record Center was absorbed into SBS Logicom by merger.

SBS GROUP BUSINESS & CSR REPORT 2020

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02

SBS Group Business Overview

Property
General Logistics
Property Management
Business

General Logistics Business

Truck Transportation / Rail-based Transportation / Low
Temperature Logistics
Logistics Center Operation / International Logistics /Processing in Logistics
Same-Day Delivery for Corporations / Home
Delivery (for Individuals)
Company Relocation / Individual
Relocation / On-site Logistics
Consulting 3PL*

Rent Business / Development Business

Logistics Sup* 3PL (third-party logistics) is a service where we
propose logistics reforms to consignors and are
entrusted with their logistics operations on acomprehensive basis.

Logistics Support Business

For more details, refer to the explanatory section on“3PL Business” on page 15.

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

SBS Holdings, Inc.
Number ofBusiness Sites

Characteristics: Holding company for the SBS Group
M&A

Number of Employees: 221

655

Number of Business Sites: 1
Number of Vehicles: 4
Renewable Energy Generating Capacity: 1,500 kW

Number of
Vehicles Owned

Trucks and other roadvehiclesMain Business: Management

Forklifts

4,570 1,436
Number of
Employees

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

19,379(including 6,904 full-time employees)

Truck Transportation

Modal Shift

Logistics Center
Operation

International
Logistics

Processing in
Logistics* Refer to the CSR data on pages 47-48 for information on the number of business sites with certification.

Company
Relocation

On-site Logistics

3PL

Property
Management Business

Low Temperature
Logistics

SBS Ricoh Logistics System Co., Ltd.
* Including SBS San-Ai Logistics co., Ltd.

Characteristics: Transportation of precision equipment for manufacturers, international logistics, delivery forcorporations / Number of Employees: 3,992 / Number of Business Sites: 194
Number of Vehicles: Trucks and other road vehicles: 447 Forklifts: 560 / Certifications: G-Mark,ISO 14001, ISO27001, ISO9001 / https://www.sbs-ricohlogistics.co.jp/

Truck
Transportation

Logistics
Center

3PL

Environmental
Business

Truck
Transportation

Modal ShiftOn-site Logistics

3PL

Property Management
Business

Truck
Transportation

Low Temperature
Logistics

Truck
Transportation

Same-Day Delivery
for Corporations

International
Logistics

Processing in
Logistics

Company
Relocation

Logistics
CenterInternational
Logistics

Processing in
Logistics

Company
Relocation

Logistics
Center

Processing in
Logistics

Home Delivery

3PL

Processing in
Logistics

Same-Day Delivery
for Corporations

Home Delivery

3PL

Environmental
Business

Truck
Transportation

Low Temperature
Logistics

Logistics
Center

Processing in
Logistics

Home Delivery

3PL

Truck
Transportation

Low Temperature
Logistics

Processing in
Logistics

Company
Relocation

3PL

SBS Logicom Co., Ltd.
* Including SBS Logicom Kanto Co., Ltd.

y Management Busins BusinessCharacteristics: General Logistics / Number of Employees: 6,288 / Number of Business Sites: 110 /Number of Vehicles: Trucks and other road vehicles: 1,044 Forklifts: 569 / Renewable Energy Generating
Capacity: 6,812 kW / Certifications: G-Mark, ISO 14001, Green Management Certification, GPN Certification, ISO 27001, Relocation Safety Mark / https://www.sbs-logicom.co.jp/

SBS Flec Co., Ltd.

* Including SBS Flecnet Co., Ltd.

Characteristics: Low Temperature Logistics / Number of Employees: 3,650 / Number of Business Sites:
137 / Number of Vehicles: Trucks and other road vehicles: 734 Forklifts: 176 / Certifications: G-Mark,ISO 14001, ISO 9001 / https://www.sbs-flec.co.jp/

SBS Sokuhai Support Co., Ltd.

Characteristics: Delivery for Corporations, Intermediate Processing of Industrial Waste / Number of Employees: 613 / Number of Business Sites: 71 / Number of Vehicles: Trucks and other road vehicles: 275
Forklifts: 38 / Renewable Energy Generating Capacity: 175 kW / Certifications: G-Mark, ISO 14001,
ISO 9001 / https://www.sbs-sokuhaisupport.co.jp/

pport Business
SBS Zentsu Co., Ltd.

Characteristics: Logistics and Delivery of Foods in the Three Temperature Zones / Number of Employees:
3,821 / Number of Business Sites: 98 / Number of Vehicles: Trucks and other road vehicles: 1,637 Forklifts:
30 / Certifications: G-Mark, ISO 14001, ISO 9001, JAS Organic Agricultural Product Subdivider Certification
https://www.sbs-zentsu.co.jp/

SBS Freight Service Co., Ltd.
Characteristics: Special-purpose Transportation, Marine Container Drayage / Number of Employees: 372 /Number of Business Sites: 20 / Number of Vehicles: Trucks and other road vehicles: 400 Forklifts: 62 /Renewable Energy Generating Capacity: 212 kW / Certifications: G-Mark, ISO 14001, ISO 9001, Privacy
Mark / https://www.sbs-freight.co.jp/

SBS Global Network Co., Ltd.
Characteristics: Total Coordination of International Logistics / Number of Employees: 163 / Number ofBusiness Sites: 8 / Number of Vehicles: 3
Certifications: AEO Certification (Planned) / https://www.sbs-globalnet.co.jp/

International
Logistics

SBS Asset Management Co., Ltd.
Characteristics: Asset Management Business Specializing in Logistics Facilities / Number of Employees: 10 /Number of Business Sites: 1
Renewable Energy Generating Capacity: 1,500 kW / https://www.sbs-asset.co.jp/

Property Management Logistics Facility
Business
Development

SBS Staff Co., Ltd.
Characteristics: Temporary Staffing / Number of Employees: 180 / Number of Business Sites: 13 / Numberof Vehicles: 32 / Certifications: Privacy Mark
http://www.sbs-staff.co.jp/

Personnel Support

SBS Finance Co., Ltd.
Characteristics: Leasing and Insurance Sales / Main Businesses: Joint purchasing of fuel and tires,
insurance agency
Number of Employees: 25 / Number of Business Sites: 1
https://www.sbs-finance.jp/

Insurance and Leasing

Marketing Partner, Inc.
Characteristics: E-commerce Support, Marketing Services, Pet Wellness Business / Number of Employees:
44 / Number of Business Sites: 1
Certifications: Privacy Mark / https://marketing-partner.jp/

Same-Day Delivery
for Corporations

Home Delivery

Environmental
Business

Personnel Support

Insurance andLeasing

Marketing Business

Pet Wellness
Business

Marketing Business

Pet Wellness
Business

M&A

Logistics Facility
Development

E-commerce
Delivery

SBS GROUP BUSINESS & CSR REPORT 2020

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s

The SBS Group’s Value Creation Process

As a logistics business operator, the SBS Group aims to effectively utilize and enhance capital used froma medium-to-long-term perspective.

INPUTS
Capital utilized for corporate activities

CapitalManagement Approach

Financial Capital

We seek to maintain an equilibrium between
active investment activities and ensuring
financial health. Accordingly, a target shareholders' equity ratio of 30% has been set. In
terms of shareholder return, the Company
maintains continuous dividends and makes
every effort to raise dividend levels in linewith business performance.

Capital for theProvision ofServices

Human andorganizational
capitalAs a group of 3PL companies possessing
logistics functions in every direction, the
SBS Group is committed to strengthening
its comprehensive logistics infrastructure,including logistics facilities and vehicles, ata scale that adequately satisfies its need togrow.

To secure and develop talented human resources, the SBS Group makes improvements
to its personnel systems, provides training
and education to all employees, and develops
a workplace that offers job fulfillment. The
SBS Group also enhances the operational
quality of the organization by developing andoperating management systems.

Intellectual Capital Based on its ability to operate a wide rangeof logistics services, the SBS Group further
enhances its proposal-making capabilities,
expertise and problem-solving abilities.

Social Capital

Natural Capital

The SBS Group gains an understanding ofvaried expectations and demands throughdialogue with stakeholders, reflects that
insight in its corporate activities, and strives
to work in harmony with society. We makeparticular efforts with respect to ensuringsafety, the most important 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 recycling and the preservation ofnatural resources as key issues.

ChangeIndicators

2017

2018

2019

Total assets (million yen)

127,802

171,796

180,047

Net assets (million yen)

38,51048,17354,077

Shareholders' equity ratio (%)

28.5

23.1

25.1

Net DE ratio (%)

1.26

1.44

1.34

Number of shareholders

3,702

2,921

2,878

Number of Business Sites

425

531

655

-

-

386

Number of Vehicles

4,103

4,497

4,570

Number of forklifts

814

1,382

1,436

Investment in facilities and equipment (million yen)

9,576

11,607

11,710

Number of Employees

14,91319,017

19,379Actual training participants

2,585

5,095

7,173

Number of business sites with ISO 9001 (quality) certification

68

72

101

Number of business sites with ISO 14001(environmental) certification
Number of business sites with ISO 27001(information security) certification

28

110

66

4

97

93

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

1,449

1,500

1,570

Group-average Fuel Efficiency (km/l)

4.94

4.93

4.93

Logistics Facility Development Results

-

-

24*

Logistics service expertise such as 3PL--

Large numberof projects

Number of Business Sites with G-Mark Certification

129

153

162

Number of Vehicles Digital / Analog Tachographs
Equipped with
Driving Support
Dashcams
Equipment

3,239

3,554

3,692

2,452

2,937

3,752

3,194

3,589

2,407

Logistics Research Grants

7

9

6

Scholarships for Students Receiving Social Care

30

34

57

Compliance Awareness Survey Respondents

-

4,794

-

Number of eco-friendly vehicles introduced (cumulative total)

3,508

3,914

3,955

Environmental Efficiency (CO2 emissions per unit of sales)

52.09

47.77

38.09

Quantity of Renewable Energy Delivered (kWh)10,257

11,017

11,017

Waste Processing Logistics Handling Volume (t)8,889

10,943

8,817

Investment in the Environment (million yen)

3,677

3,854

3,202

Number of Warehouses(number of Company-owned and leased buildings)

Rear-View Cameras* Total floor area: 895,166 square meters

BUSINESS
Our Businesses

General Logistics

The SBS Group continues to implement aunique business model that has enabled
growth while balancing logistics operations,
M&A activities and the development oflogistics facilities. At the same time, weenhance competitiveness by actively investingin IT and LT while accelerating collaboration
with other industries, and aim to reach the top
tier of the logistics industry.

Business
Rolling out 3PL in every direction

Food Logistics
Business

Boosting transportation and delivery capacity

Social responsibility

Financial Capital
Achieve sales of 300 billion
yen at an early stage throughorganic growth- Including IoT adoption at logistics facilities

Investment in logistics facility development

Business

CSR

Medium-to-long-term value creation andcapital adequacy

Investments in technology
M&A and integration

Property Management

OUTCOMES

Capital for the Provisionof Services
Logistics systems that
respond to the evolving
needs of society

To fulfill our social responsibility as a logistics
company, we have set up promotionalorganizations (Group meetings) to address
important themes across four fields, namely
environment, safety, social and governance.
Through this framework we promote activities
that span the Group and work to share
information.

Human and organizational capital
Maximizing the capabilities ofeach human resource andGroup synergy

Consideration of the environment

Environment- Promotion of the medium-to-long-term
environmental plan

Ensuring Safety- Pursuing zero accidents

Safety & Social

Social engagement- Human resource development, occupational
health and safety, quality control

Intellectual Capital
Accumulating and utilizing theexpertise that will support
future 3PL business models

Social contribution
Sound management

Governance

FOUNDATIONFoundation of corporate
activities

Management Philosophy

Social Capital- Strengthening internal control, ensuring thoroughcompliance, implementing risk countermeasures

Building relationships of trustwith all stakeholders

By achieving the Group Management
Philosophy and Code of Behavior establishedbased on its founding spirit, the SBS Group
maintains a positive relationship with its
stakeholders and endeavors to build an
effective management structure by enhancing
the efficiency, soundness and transparency ofits management.

Natural Capital
Roadmap for achieving the2˚C target for climate change

Code of Behavior

SBS GROUP BUSINESS & CSR REPORT 202005

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Commitment from Top Management

Through the aspiration to "reform logistics" and the promotionof growth strategies, the SBS Group will achieve net sales of
500 billion yen and realize sustained growth.
Posting record business performance in two
consecutive periods
In the fiscal year under review (fiscal year ended December2019), there was a rise in logistics demand associated with expansion of the online shopping market, and the trend towards delivery
cost optimization took root. Meanwhile, serious labor shortages
among drivers and other workers have continued to hinder management, while damage due to frequent typhoons and other disasters
have also had an impact.
Under this environment, the SBS Group has opened new warehouses in Nanko (Osaka), Odaka (Nagoya), Fukuoka (Fukuoka) andelsewhere while expanding its system to help home delivery drivers
establish independent businesses. With this approach, we havemanaged to respond to the vigorous demand from customers interms of both 3PL and home delivery services.
Additionally, the business performance of SBS Ricoh Logistics,
which joined the Group in August 2018, contributed for a full year.
As a result, the SBS Group recorded net sales of 255.548 billion
yen, up 25.6% year on year, and operating income of 10.176 billion
yen, a 23.5% increase. In doing so, we posted record figures forboth sales and operating income for the second straight year.

Setting sights on reaching the top tier of thelogistics industry
The key to the future growth of the logistics business lies in how
well we adapt to major environmental changes such as the expansion of the online shipping (EC) market and the rapid advance oftechnological innovation. The SBS Group aims to reach the top tierof the logistics industry by pursuing two key pillars. The first pillar
is a business model that has enabled growth while balancing logistics, M&A and logistics facility development; the strengthening oflogistics infrastructure with the Group integration as our foundation;
the continued promotion of M&A activities; active investment in
IT and LT (Logistics Technology); and collaboration with other industries. The second pillar, meanwhile, is business innovation achieved
through all of the above.
In the fiscal year ending December 2020, we plan to achieve
increased sales and profits across every segment. Specifically, we
aim to achieve net sales of 265 billion yen, operating income of
11.2 billion yen, ordinary income of 11 billion yen and net income
attributable to owners of parent of 6.5 billion yen. The SBS Groupwill make a concerted effort to meet these goals.

towards this goal. In March 2020, a facility at Jonanjima (approx.
26,000 square meters) entered operation, followed by a facility in
Sachiura, Yokohama (approx. 34,000 square meters) in September.
In 2021, a 51,000 square meter facility in Kanazawa, Yokohama isslated for completion, and we will also begin work on the Noda Seto
Project whose A and B buildings will provide a combined 248,000
square meters. In the near future, we aim to be operating logistics
warehouses with a combined area of around 3.3 million square
meters, double what it is today.
To enhance our delivery network, we will focus on the reciprocal
utilization and improved functioning of Group resources.
We will leverage the respective specialties of each Group company
to achieve further growth going forward. For instance, we will leverage the strengths of SBS Ricoh Logistics in precision components,
machinery parts and overseas logistics, the comprehensive logistics
services provided by SBS Logicom, the food logistics expertiseof SBS Flec, and the B-to-B last mile services handled by SBS
Sokuhai Support. In addition to expanding its delivery network in
the region made up of Tokyo, Kanagawa, Saitama and Chiba, SBS
Sokuhai Support launched the YC Delivery Service, delivery network
as part of a joint project with Yomiuri Shimbun, marking its entry into
the B-to-C delivery industry.
Amid concerns over the weakening of domestic logistics infrastructure due to factors such as succession difficulties for small andmedium-sized logistics companies and driver shortages, the SBSGroup has formed a fund to provide assistance as part of efforts tomaintain and strengthen the network to ensure lasting growth.

Non-consecutive growth through M&A activities
We will continue to focus on M&A activities going forward as away to attain non-consecutive growth. While expanding the sizeof the Group and diversifying the services it offers through these
activities, we will also work to produce synergy with the companies
that become part of the Group.
As the next step in this initiative, we plan to acquire 66.6% ofcommon shares in Toshiba Logistics Corporation some time
in autumn 2020. Toshiba Logistics has taken the 3PL (services

SBS Group
GrowthStrategy

M&A* LT: Logistic Technology

Strengthening logistics infrastructure
To bolster our logistics infrastructure, we are pursuing a multifaceted approach that involves developing logistics facilities, enhancing
our delivery networks, and providing support for the entire domestic
logistics network.
Over a six year period from 2018 to 2023, we plan to increase
the total floor area of our logistics facilities by approximately
495,000 square meters, and have already made steady progress

Reinforcing
logistics
infrastructure

Research into
cutting edge
logistics
technologies suchas LT* and IT

President SBS Groupleading to optimization through comprehensive involvement with acompany's logistics operations), which has been a focus of the SBSGroup, a step further to become a 4PL company that handles everything up to the planning and implementation of logistics strategy fora contracting company. Toshiba Logistics maintains an extensive
overseas network, and incorporating the company will represent a
major step forward for the SBS Group.

Powering business innovation with LT and IT
The SBS Group has concentrated on investing in IT to streamline
its business and develop new services.
To further accelerate these efforts and advance the utilization of
the latest technologies including robotics, AI and RPA at a quick
pace, in April 2020 the SBS Group newly established the IT Planning
Department and LT Planning Department. The IT Planning Department will be responsible for planning and formulating the IT strategy
for the entire group, while the LT Planning Department will coordinate Group efforts in the field of logistics technologies. In conjunction
with these developments, we have consolidated the Group's information system functions to facilitate more efficient operation.
We have also made progress developing next-generation
logistics facilities that utilize state-of-the-art LT and IT. Collaborative
efforts between SBS Ricoh Logistics and SBS Logicom are at theforefront of this strategy. These initiatives will also make steadycontributions to Group integration.
As part of coordination between industry and academia, the SBSGroup has contributed to a fund on a joint basis with Yamato
Holdings Co., Ltd. and Suzuyo & Co., Ltd. to newly establish an
endowed research department for advanced logistics studies inside
the Research Center for Advanced Science and Technology at the
University of Tokyo. We aim to support logistics and supply chain
optimization research across corporate boundaries while fostering
the development of high level logistics talent able to use new technologies and create the future of logistics with science.
Also note that we have continued to offer grants for excellent
logistics research carried out by university researchers through the
SBS Kamata Foundation, and the grants have increased both inmonetary amount and number.
We will pursue all manner of possibilities to develop business
innovations that leverage technological capabilities.

Further promotion of CSR management
All of the business activities undertaken across the SBS Groupare predicated on safety. Towards achieving our ultimate goal ofzero accidents, we have harnessed every means at our disposal
to effectively improve safety levels, including improvements tooperational management, the deployment of equipment to assist
operations, safety training, and measures to prevent health-related
accidents. In fiscal 2019, we launched the eco and safe-driving
evaluation and award system as a new initiative.
The global issue of climate change is affected by fuel efficiency,
which is closely related to safety, as well as CO2 emissions. The
SBS Group looks at impending climate change issues head-on. In"Sincere Challenge 2030," the medium-to-long-term environmental
plan we launched in fiscal 2018, reducing the CO2 emissions fromvehicles and facilities is the primary theme.
We also place an emphasis using our capabilities as a logistics
company to help solve social issues. In light of the dire issue ofpoverty, in 2018 we began supporting food bank activities. We haveentered into a support agreement with the accredited NPO Second
Harvest Japan (2HJ), under which we transport supplies between
companies wishing to donate food and 2HJ distribution sites, andalso provide advice and make proposals regarding warehouse andvehicle operation.

Effectively tripling dividends for shareholders in 10 years
The SBS Group considers the return of profits to shareholders to
be one of its most important management priorities. We seek toretain sufficient internal reserves to build a robust management basewhile endeavoring to maintain continuous dividends and improve
the level of dividends in light with business performance.
For the fiscal year in review, we paid a dividend of 30 yen per
share, 2 yen higher than the planned dividend in light of improved
business performance. This represents an effective tripling of thedividend level compared with 2010, a decade earlier.

Holding true to our aspirations and achieving our goals
The coronavirus pandemic that is shaking the world has brought
the importance of logistics as social infrastructure into sharp focus.
To develop in a way that makes logistics more sustainable while
continuing to satisfy the diverse needs of industry and society, we
will hold true to our aspiration to "reform logistics." On the otherside of those efforts, we will achieve net sales of 500 billion yen andachieve sustained growth.
I would like to thank everyone who has obtained a copy of thisreport for their interest in and support of the SBS Group going forward.
SBS GROUP BUSINESS & CSR REPORT 2020

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Key Topics

Logistics Infrastructure

Logistics Infrastructure

March 2019

March 2020

Completion of the Nanko Logistics
Center in Osaka

Creation of the Japan Logistics Future
Investment FundThe first logistics center to be developed in-house by the
SBS Group in the Kansai region was completed in Suminoe
Ward, Osaka. With a total floor area of approximately
61,000 square meters, the center is equipped with constanttemperature and constant humidity storage along with highperformance equipment including solar power generationand LED lighting. The center has been operating at full
capacity since March 2019.

In March 2020, the Company and the Development
Bank of Japan Inc. (DBJ) jointly established the "Japan
Logistics Future Limited Partnership for Investment (Japan
Logistics Future Investment Fund)" to facilitate the businesssuccession of operators in the logistics industry and resolve
issues related to the maintenance of regional distribution
and delivery networks.
In light of the reality that many small and medium-sized
logistics operators, primarily in regional areas, facesuccession issues and labor shortages, the fund isdesigned to maintain regional distribution and delivery
networks as social infrastructure, and improve continuity.
In addition to making investments through the fund, DBJ
and the Company will implement value-added initiatives
that make use of their expertise (boosting sales byintroducing business partners and consignors, reducing
costs through the joint purchasing of vehicles and fuel,improving compliance mechanisms, etc.) to help enhancecompetitiveness.
After improving their competitiveness, the operators
would generally become a member of the SBS Group to
pursue synergistic effects and play a part in strengthening
the Group's delivery network.

Nanko Logistics Center

September / October 2019
Framework of the Japan Logistics Future Investment FundSBS Ricoh Logistics opened Logistics Center Fukuoka
to conduct trading business services with Asian countries in
September, and Logistics Center Nagoya Odaka to perform
3PL and last mile services in October.

50% investment

50% investment

Limited liability
investment

SBS Holdings

Development
Bank of Japan

Japan Logistics Future Investment Fund Co., Ltd.
Unlimited liability
investment

Limited liability
investment

Opening of Logistics Center Fukuoka
and Logistics Center Nagoya Odaka

Japan Logistics Future Limited Partnership for Investment
Investment

Companies targeted for investment

Logistics Center Fukuoka

Development Statusof New Logistics
Facilities

Logistics Center Nagoya Odaka

Fiscal Year

Total Floor Area (tsubo)

In-house

LeasedProperty Name, etc.

201813,626

2,423

11,203

Iwatsuki, Iruma, Ami

201926,74018,5408,200

Osaka Nanko, Fukuoka, Nagoya Odaka

2020

18,300-18,300Jonanjima, Yokohama Sachiura

2021

15,43015,430-

Yokohama Kanazawa

2022

40,00040,000-

Building A, Seto, Noda
Building B, Seto, Noda

2023

35,00035,000-

Total

149,096111,393

37,703Figures for FY2018 and FY2019 listed on an actual basis, and on a planned basis for FY2020 and beyond

M&A

LT・IT

May 2020

January 2020 * when announced

Partial acquisition of shares in Toshiba
Logistics Corporation

Launch of collaborative effort between industry
and academia with the University of Tokyo

At the General Meeting of Shareholders held on May
26, 2020, the Company resolved to acquire a portion(to a shareholding ratio of 66.6%) of the common stockof Toshiba Logistics Corporation ("Toshiba Logistics"), a
subsidiary of Toshiba Corporation.
In addition to third-party logistics (3PL) that involves
being entrusted with a company's logistics operations toprovide optimum logistics management and operations,
Toshiba Logistics delivers solutions to various companies as
a 4PL company that handles everything up to the planningand implementation of their logistics strategies.
Through the share acquisition, the SBS Group will
acquire Toshiba Logistics' expertise in the 4PL business,further expand its lineup of services, and strengthen its
international network. Even after the share acquisition,
all full-time directors of Toshiba Logistics will be retained
to maintain continuity of management. The Company will
dispatch part-time directors to advance Group integration.
The final acquisition of shares is planned for around autumn
2020, contingent upon approval from the relevant authorities.

In July 2019, the Company worked on a joint basis with
Yamato Holdings co., Ltd. and Suzuyo & Co., Ltd. to establish
an endowed research department for advanced logistics
studies inside the Research Center for Advanced Scienceand Technology at the University of Tokyo with the aim ofcontributing to the logistics industry as well as the future
development of the Japanese economy.
The professors in charge of the department are Professor
Katsuhiro Nishinari (the Research Center for Advanced Scienceand Technology) and specially-appointed professor Naoto Imura(the Research Center for Advanced Science and Technology).
From April 2020 the research department launched fully andbegan offering courses to foster the development of advanced
logistics human resources through lectures given to students of
the Graduate School of Engineering.

LT・IT

Presentation of a plaque fromthe UTokyo Foundation(January 10, 2020)

LT・IT

December 2019

April 2020

AI driver assist device development
venture and business alliance with Pyrenee

New establishment of IT Planning
Department and LT Planning Department

In December 2019, SBS Logicom entered into abusiness alliance with Pyrenee Inc. ("Pyrenee") related todevelopment of the Pyrenee Drive driver AI assist device.
Pyrenee Drive uses its built-in stereo cameras tocontinually record video of the road. It works as a
retrofit-type AI driving assist device equipped with hazard
prediction and alert features driven by AI-based object
recognition and analysis.
Prototype models of Pyrenee Drive will be fitted inapproximately 1,500 vehicles owned by the Company, anddemonstration data from daily operations will be provided
to Pyrenee. In addition, the SBS Group's Anegasaki Driving
School course will be loaned out to Pyrenee for device
testing and the collection of additional data.
The Company will facilitate the deep learning performedby the AI equipped in Pyrenee Drive and work with
Pyrenee towards commercialization of the device planned
for mid-2020. If an external type Pyrenee Drive can becommercialized, it could also be utilized in existing vehicle
currently on the road, and is expected to serve as a realistic
shortcut to eliminating traffic accidents.

In April 2020, the SBS Group restructured its information
systems department in light of the importance of technologicaldevelopment as typified by the rise of robotics, AI, RPA and so on.
The newly established IT Planning Department will
be responsible for Group-wide IT strategy planning andformulation from a medium-to-long-term perspective, and at
the same time control management resources of the Group's
information systems department. Meanwhile the LT Planning
Department will pursue the fusion and accumulation of thelogistics-related skills and expertise possessed by each Group
company, while also pursuing technological development
and reform of logistics sites, such as the development of
next-generation logistics facilities.
To coincide with these developments, part of the information
systems department of SBS Ricoh Logistics will be transferredto the Company. By consolidating the development functionsof Group companies, this policy seeks to facilitate more
efficient operation of the information systems department.
New Organizational Structure (from April 1, 2020)
General Meeting of Shareholders
Audit & Supervisory Board
Board of Directors
President

Scene of testing at
the Anegasaki Driving School■New Departments

Audit & Supervisory
Board

CSR Promotion
Division

Corporate Planning
Division

IR and PR
Division

Business Planning
Division

Human Resources
Division

General Affairs
Division

Legal Affairs
Department

Finance Division

Accounting
Division

IT Planning
Department

LT Planning
Department

Logistics Quality
Control Division

Information System
Business
Departments 1 and 2 Development Division

SBS GROUP BUSINESS & CSR REPORT 2020

0910

Business Overview and Financial Status

Business Environment
In fiscal 2019 (January 1, 2019 to December 31, 2019), theserious shortage of drivers and other personnel continued toplace a burden on management, and despite being affectedby frequent wind and water damage events, the SBS Group's
logistics business and primarily the third-party logistics (3PL)
business performed steadily against a backdrop of risinglogistics demand due to expansion of the online shipping
market and delivery cost optimization efforts taking root.
Additionally, the pace of business expansion picked up by
having SBS Ricoh Logistics, which joined the Group in August
2018, contributing a full year to the business results.

Net Sales (million yen)2015

157,996

2016

149,0542017

152,870
203,5162018

255,548

2019

Sales and Profits

Composition of net sales by businessNet sales in fiscal 2019 were 255.548 billion yen, an increaseof 52.031 billion yen from the previous fiscal year (a 25.6%
increase compared with the previous fiscal year). The logistics
business accounted for 94.2% of net sales by value, while theproperty management business and other businesses eachaccounted for around 3%.
Operating income stood at 10.176 billion yen, rising 1.935
billion yen over the previous fiscal year (a 23.5% increase).
Additionally, net income attributable to owners of parent rose
1.670 billion yen year on year to end at 6.079 billion yen, a
37.9% jump.
The net sales and each income level achieved new records.

■Logistics Business■Other Businesses

Logistics Business

8,240
7,607

2018

6.9 billion yen +3.8%

10,176
10,172

2019

Operatingincome10.1

billionyen

Logistics Business+23.5%Net income attributable to owners of parent (million yen)

6.2 billion yen +37.3%

Property Management Business 3.7 billion yen
Other Businesses

Net income
attributableto ownersof parent

1.6

billionyen■Ordinary income

6,229
6,475

240.7 billion yen +27.6%-4.5%■Operating income

7,514
7,832

2017

Property Management Business 7.8 billion yen
Other Businesses

5,347
5,772

2016

+25.6%

2.7 %Operating income and ordinary income (million yen)

Net Sales

255.5■Property Management Business 3.1 %Fiscal 20192015

billionyen-3.2%

100 million yen -31.8%+37.9%

94.2%

2015
2016

-3,815
5,111

2017

4,446

2018

4,409

2019

6,079

Logistics Business

Property Management BusinessIn the Logistics Business, we continued efforts aimed at fee
optimization while focusing on gaining new customers demanding
advanced logistics functions and expanding business with existingcustomers. Through B-to-B and B-to-C operations in the same-day
delivery business, we have captured demand from the rapidly
expanding e-commerce (EC) market. The Nanko Logistics Center, alarge-scale multi-tenant warehouse that entered operation in March,has also contributed to results. Due to these factors, we were able
to absorb the increased costs due to chronic labor shortages.
Additionally in Noda, Chiba Prefecture we completed land
improvement work for the SBS Group's largest distribution center,and have completed preparations for the start of construction.
As a result, the Logistics Business generated net sales of
240.772 billion yen (up 27.6% over the previous fiscal year) andoperating income of 6.278 billion yen (a 37.3% rise), marking asignificant improvement in both sales and profits.

In the Property Management Business, we transferred 30% of
the Company's interest in the Nagatsuta Logistics Center as we didin the previous fiscal year, and operating income of 2.417 billion yen
was recorded. However, as rental income fell in connection withthis securitization, net sales in the Property Management Businessstood at 7.82 billion yen (down 4.5% from the previous fiscal year),while operating income was 3.787 billion yen (down 3.2%).

Other Businesses
While the Temporary Staffing Business and Marketing Businessrecorded higher sales and profits, other businesses saw a fallin overall profit from the impact of the Environmental Businesstemporarily suspending operations in connection with facility
upgrades. Combined, other businesses generated net sales of
6.972 billion yen (a 3.8% increase over the previous fiscal year),while operating income stood at 186 million yen (a 31.8% drop).

Capital Investment
Factorial Analysis of the Change in Net Sales
in the Logistics Business (100 million yen)

1,886

2018

+521
+27.6%

Contributions of SBS Ricoh Logistics(from half year to full year)+381

Expansion of B-to-C and B-to-Small-B+87

Increased Sales from the Opening of
New Distribution Centers+16

Increased shipping volume fromexisting customers, acquisition of new
projects and optimization of fees

+37

2,407

2019

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

4,572

2018

SBS Ricoh Logistics profit contribution
Effect of increased sales(excluding SBS Ricoh Logistics)
Fee optimization
Improvements to unprofitable 3PL operations+414

Capital Investment+226

Distribution center launch expenses-131

Goodwill and PPA (fromhalf year to full year)
Increased personnel
and subcontracted
transportation costs

6,278

11.7

+677

+310

+37.3%2019+912

M&A costs (previous period)+1,705The SBS Group has actively pursued investments in logistics
facility development and plans to increase the total floor area offacilities developed in-house by approximately 430,000 square
meters (approximately 495,000 square meters when leasing is also
included) over a six-year period from 2018 to 2023.
The Nanko Logistics Center (Suminoe Ward, Osaka) thatentered operation in March 2019 has a floor area of around 61,000
square meters. Capital investments made in fiscal 2019 totaled
11.710 billion yen. In the Logistics Business, we made investmentsof 12.025 billion yen on the construction of logistics facilities,
routine vehicle upgrades, and so on. In the Property Management
Business, investments of 153 million yen were made in areas suchas repairs for lease properties. In other businesses, we madeinvestments of 319 million yen to install extra solar power generating
equipment and in other areas. Also note that in the fiscal year underreview, there were no major equipment sales or removals.

-306
-397

billionyen

Change in Capital Investment Amount (million yen)
2015

2016

2017

2018

2019

11,142

10,455

9,576

11,607

11,710Logistics Business 10,248

Total

Property Management
Business
Other Businesses

9,575

8,727

10,77012,025

101

491

832

502

153

616

708

60

151

319

SBS GROUP BUSINESS & CSR REPORT 20201112Business Overview and Financial Status

Assets and Liabilities
As of the end of fiscal 2019, total assets stood at 180.047 billion
yen, an increase of 8.250 billion yen over the previous fiscal year.
While inventories declined due to the sale of the Company's
interest in the Nagatsuta Logistics Center, since notes and accounts
receivable as well as cash and deposits increased due to businessexpansion, current assets rose 2.4 billion yen compared with theend of the previous fiscal year, standing at 64.376 billion yen.
In terms of fixed assets, in addition to an increase in property,
plant and equipment including buildings associated with completionof the Nanko Logistics Center, increases in vehicles, delivery
equipment and land were also recorded. For investments andother assets, investments in securities rose in connection with theacquisition of driving schools. As a result, fixed assets increased by
5.850 billion yen to 115.671 billion yen.
Liabilities stood at 125.97 billion yen, an increase of 2.346 billion
yen compared with the end of the previous fiscal year. In terms ofcurrent liabilities, the main factors behind the increase are higher
notes and accounts payable due to increased sales, with a rise in
short-term loans payable also contributing. However, in long-term
liabilities, long-term loans payable declined due to our capitalprocurement control.
Net assets stood at 54.077 billion yen, an increase of 5.93 billion
yen compared with the end of the previous fiscal year. While thiswas mainly due to net income attributable to owners of parent
recorded at 6.079 billion yen, a 22 yen per-share dividend payment
amounting to 873 million yen also factored into the increase.
* The "Partial Amendments to Accounting Standard for Tax Effect Accounting" ASBJ
Statement No. 28 dated February 16, 2018) was adopted from the beginning of
the fiscal year under review. In descriptions concerning financial status, the figures
are compared with those of the previous fiscal year after this accounting standard
has been applied retroactively.

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 pursue thestable growth of the 3PL business by systematically iterating on acycle of the in-house development and securitization of logistics
facilities. In the interests of maintaining a balance between proactive
investment activities and maintaining financial health, we have set
30% as a target shareholders’ equity ratio.
In fiscal 2019 the shareholders' equity ratio rose 2.0 points fromthe previous fiscal year to 25.1%, moving closer to the target level.
Meanwhile the net DE ratio, which represents the ratio of net
interest-bearing debt to shareholders' equity, shifted from 1.44 in theprevious year to 1.21, due to a reduction in total interest-bearing debt
and increase in shareholders' equity.
Moving forward, we will continue to undertake business operationthat is mindful of financial health and pursue the optimum balance
between investment and returns.

Change in Consolidated
Balance Sheet (100 million yen)

+24

644

Total assets

171.7

1,098

Fixed assets

billion yen

+59

1,157
584

Current
liabilities

+44

629

Total assets

+83

651

Long term
liabilities

-21

631

180.0
billion yen
As ofDecember 31,

481

+59

541

2019

Change in the shareholders’ equity ratio■Shareholders’ equity■Total Assets (100 million yen)2010 224

965

23.3

2011

247

1,008

24.6

2012

274

1,044

26.3

2013

289

1,083

26.7

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

23.1

1,717

25.1

1,800

Shareholders' equity ratio (%)

Change in net DE ratio■Shareholders’ equity■Net interest-bearing debt (100 million yen)

2010

226

372

1.64

2011

249

390

1.57

2012

274

381

1.39

2013

286

392

2014

307

512

1.66

2015

264

515

1.95

1.37

2016

319

471

1.48

2017

357

449

1.26

2018

393

2019

Shareholders’equity ratio

2018

619

Current assets

Net assets

As ofDecember 31,

445

565
539

1.44
1.21
Net DE Ratio (times)

25.1

%

Net Interest-bearing Debt = Long-term Debt & Short-term Debt + Corporate
Bonds - Cash and Deposits
Net De Ratio = Net Interest-bearing Debt ÷ Shareholders' Equity

Cash Flow
As of December 31, 2019, cash and cash equivalents ("cash,"hereafter) had increased by 2.192 billion yen to 18.495 billion yen
from the end of the previous fiscal year. The main reasons for thechanges in each cash flow are as follows.

Cash Flows from Financing Activities
In financing activities, net cash decreased by 2.084 billion yen
due to repayments of long-term loans payable exceeding proceeds.
Compared with the previous fiscal year in which syndicated loan for
acquisitions was employed, net cash fell to 16.899 billion yen.

Cash Flows from Operating Activities
Net cash provided by operating activities was 16.872 billion
yen, mainly due to income before income taxes of 9.9 billion yen,depreciation and amortization of 7.07 billion yen and a decrease
in inventories of 1.769 billion yen due to the sales of equity in the
Nagatsuta Logistics Center, despite a 1.387 billion yen increasein trade receivables associated with sales growth. This marks anincrease of 4.474 billion compared with the previous fiscal year,
mainly due to rising earnings capabilities.

Cash Flows from Investing Activities
Net cash used in investing activities was 12.579 billion yen, falling
9.853 billion yen compared with the previous fiscal year, when theacquisition of SBS Ricoh Logistics took place. In terms of major
outlays, expenditures for the acquisition of property, plant andequipment and intangible assets totaled 10.54 billion yen, including
the acquisition logistics facility land and construction work for
the Nanko Logistics Center and a planned construction work forfacility in Noda, Chiba Prefecture, as well as vehicle replacements.
Expenditures to acquires shares in affiliate companies amounted to
1.271 billion yen.

Balance of Cash andCash Equivalents as ofDecember 31, 201918.4

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 sufficient internal reserves, to maintain continuous
dividends, and improve the level of dividends in line with businessperformance.
The Company's basic approach is to issue once-yearly dividendsof surplus funds. In the fiscal year under review, the Company
increased the planned year-end dividend of 28 yen per share by
2 yen, to 30 yen per common share. This was done due to thestrong performance of the logistics business among major Group
companies including SBS Ricoh Logistics, and in light of theCompany's financial position and operating results.
In this way, we have worked to reinforce shareholder return byeffectively tripling per-share dividends in ten years.

Year-end Dividend
Per Common Sharebillionyen

Change in the Balance of Cash and Cash Equivalents (million yen)
2018

163

2019

2010

3,000
3,000

+168

2011

Investing CF

-125

2012

30

10

40

2013

30

10

40

-20

184

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 atinvestment 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 forthe purpose of investment. The procured funds are put to the best and most effective
use within the Group through a cash management system. Specifically, this system
adjusts funding surpluses and shortages between subsidiaries (cash pooling) andperforms payment operations on their behalf.

yenChange in Dividends (yen) * Change is shown with 2010 as the base year.

Operating CF

Financing CF

30

2015

0

2016

17

2017

18

2019

■Commemorative Dividend
January 2012
1:100 Stock Split

15

2014

2018

■Regular Dividend

June 2014
1:3 Stock Split

16
3

21

33

Quarterly dividend based on
the end of March 2016
standard: 16 yen+ year-end dividend: 17 yen

22
30 (planned)

SBS GROUP BUSINESS & CSR REPORT 202013

14

External Environment and Management Strategy

The SBS Group supports the efficient corporate activities of its customers by playing a part in the supply chain basedon its combined proposal-making capabilities, expertise and problem-solving abilities as a group of 3PL companies
possessing logistics functions in every direction. Moreover, as a company involved with logistics, a part of social
infrastructure that is vital to people’ s daily lives, we promote CSR management rooted in consideration for theenvironment, ensuring safety, engagement with society and sound management.

Medium-to-long-term Management Strategies
M&A Policy
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 andwelcome new human resources into the Group. We also implement
measures to enhance Group-wide synergistic effects, including
market development, expanded sales channels, and the sharing
and enhancement of service provision, knowledge, people andorganizational capital.
This approaches also represent the practical implementation ofgoals 8, 9 and 17 of the Sustainable Development Goals (SDGs).

the future we will strive to establish a service model that is uniqueto the SBS Group to help customers solve their logistics related
issues by incorporating the introduction of automation technologies,
AI-related equipment and other advances.

Logistics Facility Development and Maintaining Financial
Health through the Securitization of Existing Facilities
We work to develop logistics facilities in-house in order topromote the expansion of the 3PL business and higher service
levels, and maintain financial health through the systematic
securitization of existing facilities.

Promoting selection and concentration of businesses
overseas
We clarify which regions and businesses should be advanced
and pursue their selection and concentration.

Further Strengthening of the 3PL Business andEstablishment of a Unique Service Model
The SBS Group is employing a range of methods to enhance
its strength in the 3PL business. We will proactively consider andimplement measures to expand new orders through web marketingand improved sales capabilities, pursue efficiency improvements byenhancing field capabilities, and proceed with M&A activities to raise
the level of business and expand the fields in which we operate.
In addition to proposing 3PL including logistics facility
development as a unique solution offered by the SBS Group, in

About the 3PL Business3PL (third-party logistics) is a service where we propose logistics reforms toconsignors and are entrusted with their logistics operations on a comprehensive
basis. The SBS Group defines logistics services meeting the criteria of directcontracts with consignor companies, medium-to-long-term plans and the joint
entrustment of multiple services as 3PL. As part of the 3PL business we are
entrusted with and undertake a range of operations arising in the supply chain field
on behalf of customers, including transportation, packing, storage, cargo handlingand information management.
The SBS Group leverages its strengths in consulting to achieve customers’ ideal
logistics visions, the development and operation of information systems, thein-house development and provision of logistics centers and outstanding low cost
operations to provide valuable 3PL services to customers in every line of business.

EconomyThe External Environment Surrounding the SBS GroupThe SBS Group monitors and analyzes short, medium andlong-term effects of the external environment to make critical
determinations of risks and opportunities. The impact of
COVID-19 has also been incorporated as a basis ofmanagement strategy formulation.

[Domestic]
Downturn due to consumption tax hikes and the impact of
the COVID-19 pandemic
Slumping employment or income environment, inbounddemand or capital investment sentiment
Stock market instability
Impact of the postponed 2020 Tokyo Olympics andParalympics
●

●

●
●

[World]Global economic slowdown due to COVID-19
Uncertain overseas situations
Demands to disclose information on awareness of climatechange and action to address it●●●Developing and Enhancing Management Foundations
Maximizing Group Synergy
To survive intensifying competition, it is vital to ensure thetransparency and efficiency of management while maximizing
Group synergy. In particular, as the management infrastructureof SBS Ricoh Logistics, which joined the Group in fiscal
2018, is highly complementary to the existing management
infrastructure of the SBS Group, we will continue to reinforce
the cooperative framework with the company.

To that end, we are taking steps to improve personnel
systems, hire and cultivate talented human resources, anddevelop 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.

Continual Promotion of CSR Management
Retaining and Cultivating Human Resources, Developing
a Pleasant Workplace
To continue to achieve future growth, it will be essential
to retain the logistics human resources promoting our core
3PL business, the global human resources driving overseas
development and the professional human resources driving
logistics facility development and incorporating futuretechnological innovations. At the same time, with the dwindlingworking population, we see the stable retention of drivers andother management resources that support the foundations of
the logistics business as a key management issue.

In addition to ensuring work safety and taking measures
to prevent traffic accidents, we implement thoroughenvironmental conservation initiatives, including the promotionof eco-driving and measures to reduce the environmental
impact attributed to our vehicles and logistics facilities.
Moreover, we pursue the further enhancement of ourcorporate governance system that includes these initiatives.

Human Resources and Society[Human Resources]
Worsening labor shortages
Worsening work environments for truck drivers
and aging drivers
Expected increase in foreign workers
Long-term decline in the working age population

●
●

●
●

[Society]
Emergence of the COVID-19 pandemic
Emerging effects of climate change
Requirements for appropriate operational
management of vehicles and stronger safetymeasures
Review of labor laws and regulations
Demands to adopt working style reforms
Demands for productivity improvements acrossJapan
Changes to human rights awareness and action
Definitive action on diversity●

Market●●[Basic Trends]
Diversification of services
Smaller and more frequent lots
Demands for stable and flexible transportation
capabilities
Increased competition due to e-commerce business
operators developing in-house logistics systems
Cooperation on logistics
Supplementary of logistics functions and services
Alliances with other companies including industry
players

●
●
●

●

●

●
●
●

●
●

●
●

[COVID-19]
Expanded role of logistics in society
Increased operational constraints
Remote work demands●●●[Logistics Technology (LT)]
IoT, AI, big data, automation
Telematics
ETC 2.0●●●

SBS GROUP BUSINESS & CSR REPORT 2020

15

16

Ascertaining and Responding to Management Risks

The SBS Group makes every effort to avoid risks that could impact its
management results, financial situation or share price, and to respond
whenever such risks emerge.

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 need to 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 risks, and strives toprevent risks from occurring or minimize the damages that
occur in the event of an emergency.

We have currently established 15 categories of risk events
that have the potential to affect the SBS Group's short,medium and long-term management results, share price andfinancial condition. While the risks differ as to whether they aremainly caused by external factors, caused by mistakes or otheraction by the SBS Group or exhibit both aspects, we manage
all of these risks in a comprehensive fashion in the interest ofenhancing the soundness and continuity of management.
Additionally, in light of the enormous impact on the global
economy and business activities of the SBS Group due to the
COVID-19 pandemic, from fiscal 2020 "risks associated withpandemics" has been added as a new risk event.

SBS Group Risk Management Regulations (Key Points)● Basic Policy

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 andevaluate the implementation status and effectiveness of themeasures taken to address risks. The results of the evaluation
are reported to the SBS Group CSR Promotion Committee forapproval.
This cycle is repeated annually in an effort to not only ensurethat existing risks are being appropriately handled, but to also
prevent newly emerging risks.

In light of the social significance of the SBS Group, on a daily
basis its officers and employees shall manage risks by placing
the highest priority on safeguarding human life and ensuringsafety, and in the event a risk occurs, endeavor to contain therisk, minimize damages and enable a quick recovery.
● Establishment and operation of the Risk Management

CouncilMonitoring, evaluation and approval of measures to addressrisks● Emergency risk response

Establishment of Business Continuity Plan

Report to CSR
Promotion Committee

Verify andevaluate

Identify

The Risk Management Process

Implement response
measures

Examine andanalyzeManagement Status of Major Risks

Risks due to changes in
economic conditions[Short-term]
Likelihood of Occurrence

Overview

EffectResponse Status

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

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
and equivalent increased costs due
to sharp rises in global oil prices orthe effects of currency exchange
markets.

In implementing M&A activities as animportant growth strategy and developing logistics facilities to promote
the 3PL business, we primarily
procure funding through loans fromfinancial institutions, and a worseningof the financial environment could bea factor in rising costs.

Difficulties in obtaining funding forstrategic investments, or increased
interest rates to finance loans could
occur.
Additionally, these situations could
conflict with provisions in the case ofdebt with financial covenants.

Measures including paying downinterest-bearing debt through thesecuritization of logistics facilities andoperating cash flow, and securing
fixed interest rates.

When
expandingits
existing
businesses and entering new fields ofbusiness, the SBS Group implements
M&A activities, capital participationand capital tie-ups as part of its
business strategy. There is a risk thatthese activities might not go as wellas initially planned.

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

Thorough due diligence conducted inadvance

The SBS Group pursues logistics facility development and sales operations
as part of its property managementbusiness. There may be cases inwhich the posting of sales and profits
is delayed or is disproportionately
allocated to certain time periods dueto the timing of when an order for alogistics facility is received, the scaleand specifications of the project, orthe timing for completion or sale.

The posting of sales and profits may
be delayed or disproportionately
allocated to certain time periods dueto the timing of when an order for alogistics facility is received, the scaleand specifications of the project, orthe timing for completion or sale.

Degree of Impact
Potential for Control

Risks due to sharp rises infuel prices[Short, Medium and Long-Term]
Likelihood of Occurrence
Degree of Impact
Potential for Control

Risks associated with aworsening financial environment[Short-term]
Likelihood of Occurrence
Degree of Impact

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

Creation of budgets that incorporate
fuel price fluctuations (predictions)by keeping close watch on market
trendsSwitching to logistics services withhigher fuel efficiency through the
adoption of eco-driving practices, thephased introduction of next-generation
vehicles, and other measures.

Potential for Control

Risks due to M&A activities[Short-term]
Likelihood of Occurrence
Degree of Impact

Careful arrangements with the top
management of the company to beacquired* Even in the cases of capital participation or
tie-ups, similar action is taken.

Potential for Control

Risks due to the propety
management business[Short and Medium-term]
Likelihood of Occurrence
Degree of Impact
Potential for Control

Development of logistics facilities
predicted on securing customers* We begin construction work on facilities after
determining tenant consignors and sales
destinations, as well as factors such as
intended use, specifications, rent and rental
period.

SBS GROUP BUSINESS & CSR REPORT 2020

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Ascertaining and Responding to Management Risks

Management Status of Major Risks

Risks due to legislative changes[Short and Medium-term]
Likelihood of Occurrence
Degree of Impact
Potential for Control

Risks related to natural disasters
and other incidents[Short, Medium and Long-Term]
Likelihood of Occurrence
Degree of Impact
Potential for Control

Risks associated withpandemics[Short, Medium and Long-Term]
Likelihood of Occurrence
Degree of Impact

Overview

EffectResponse Status

The SBS Group's operation is affected byvarious laws and regulations, and changes
to these laws and regulations in response tochanging social conditions. In our core logistics business, for example, various businesslaws related to logistics apply to cargo vehicletransportation operations, warehousing services and customs brokerage. In the property
management business, the Building Standards
Act and Financial Instruments and Exchange
Act play a part, and in personnel support, theWorker Dispatch Act must be followed.

New burdens could be imposed,or changes could be required in business expansion due to systems being
revised, strengthened or subjected
to a different interpretation based onrelated laws and regulations changing
in line with changing social conditions.

Collecting information through industry
groups and other organizations

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

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
to consignor 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
to prevent the spread of infections,and if the situation worsened, it could
even threaten continued operations.

An outbreak of infectious disease
imposes various constraints on
the business activities of the SBSGroup. Taking measures to prevent infections would be a factor increasing
costs. Additionally, if a considerable
number of infections occurred at theoperating sites of the SBS Group or
its business partners, the Group or its
business partners could be forced torestrict or shut down operations.

Strict enforcement of hand washingand disinfection

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 thevictims, suffer a decline in credibility
among customers and society, orbe subjected to action imposed byauthorities, such as being suspended
from operating vehicles or conducting
business.

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

The SBS Group utilizes computersand networks for a range of applications
from business systems to manage
customers’ cargo information, inventory control and customs processing
to in-house systems that handle
accounting, staff, salaries and otheroperations. There is a risk of thesesystems failing or operating incorrectly
due to malfunction, computer viruses,
hacking, natural disasters or otherincidents.

If any of these systems were to faildue to malfunction, computer viruses,
hacking, natural disasters or other incidents, the provision of services to customers and business partners may beinterrupted, business processing may
be delayed, or operations could bethrown into confusion.

Promotion of Group-wide security
measures, training and awarenessraising under the Information Security
Promotion Meeting

Potential for Control

Risks due to serious incidents[Short-term]
Likelihood of Occurrence
Degree of Impact
Potential for Control

Risks due to system shutdowns[Short and Medium-term]
Likelihood of Occurrence
Degree of Impact
Potential for Control

Preparations and actions in anticipationof legislative changes

Periodic implementation of training toprepare for major disasters and otherincidents
Ensuring earthquake proofing of majorbuildings used for business
Decentralization of major businesssites to the extent possible

Hygiene management for businesssites and vehicles
Consideration given to incorporating
infectious disease preparedness intobusiness continuity plans (BCP)

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

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

Risks related to the managementof customer information[Short and Medium-term]
Likelihood of Occurrence
Degree of Impact

Overview

EffectResponse Status

The businesses conducted by the
SBS Group involve handling large
amounts of customer information,
including personal information, andthere are potential risks of the leakingof customer information or thedestruction of data.

If an incident such as the leaking ofcustomer information or destructionof data were to occur, the trust
earned from customers could be
lost, and the incident could affect theGroup's business performance andfinancial situation.

Clearly establishment of the proper
management of customer informationin corporate ethics regulations

The SBS Group conducts its
business activities based on laws
related to the logistics business and awide range of rules and social norms.
Infringements of 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 lossof social credibility, suspension ofbusiness from customers, or claims
for costly monetary penalties orcompensation.

Continued implementation of measures
ensuring the proper management ofcustomer information and personal
information as part of information security
management

Potential for Control

Risks related to compliance[Short and Medium-term]
Likelihood of Occurrence
Degree of Impact
Potential for Control

Establishment of the SBS Group Codeof Behavior and SBS Group Compliance
Regulations
Conducting awareness-raising activities,
monitoring, confirming and investigatingcompliance violations and driving
improvements, primarily through the SBSGroup Compliance Meeting in whichGroup companies take part
Distribution of awareness-raising tools andperiodically conduct awareness surveys

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

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 andregions 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 ora lack 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
and regions in which we operate

The SBS Group recognizes theimportance of human resources andfocuses on hiring activities, educationand training, but there is intensecompetition to continually secure thenecessary human resources, andsuch efforts may not proceed asplanned.

If we are unable to secure humanresources in a timely fashion,
experience a large exodus of humanresources to elsewhere or if the development of human resources does notproceed according to Group plans,
our business development, operating
results or growth forecasts could besignificantly impacted.

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

Due to the advance of climatechange, the businesses of the SBSGroup could be affected by changes
to the environment or systems
surrounding the market (transitionalrisks) or phenomena such as abnormal weather and rising temperatures(physical risks).

The rising price of CO2 emissions,costs to shift to low-emission technologies, the sharp rise in fuel energy
costs and similar developments leadto increased operating expendituresand put pressure on management.
In addition, abnormal weather events
could damage products and operating assets or reduce production
capacity.

Degree of Impact
Potential for Control

Risks related to the acquisitionand development of humanresources[Medium-term, Long-term]
Likelihood of Occurrence
Degree of Impact

In keeping with our Basic Policy on
Human Resource Development, conducting various education and training for
all Group employees and support
their skills advancement and careerdevelopment

Potential for Control

Risks associated with climatechange[Medium-term, Long-term]
Likelihood of Occurrence
Degree of Impact
Potential for Control

Promoting systematic business strategies
and environmental strategies based on a
low-carbon approach
Strengthening environmental management
systems
Stockpiling for emergencies
Enhanced disaster response management* See p. 29-30 for details.

SBS GROUP BUSINESS & CSR REPORT 2020

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Contributions to the SDGs

End hunger, achieve food security andEnsure healthy lives andimproved nutrition and promote sustainablepromote well-being for all

agriculture

at all ages
TargetTarget2.1: By 2030, end hunger and ensure access by all

3.6: By 2020, halve the number of global deaths andpeople, in particular the poor and people ininjuries from road traffic accidents.

vulnerable situations, including infants, to safe,

3.9: By 2030 substantially reduce the number of deaths

nutritious and sufficient food all year round.

and illnesses from hazardous chemicals and air,water, and soil pollution and contamination.

The SBS Group’s Initiatives

The SBS Group’s Initiatives(1) Support for food banks(1) Promotion of transportation safety management(2) Sincere Challenge 2030 (medium-to-long-term
environmental plan)

11SDGsRelated to the SBS Group’s Initiatives

Promote sustained, inclusive and sustainableeconomic growth, full and productive employment
and decent work for all
TargetAs a "3PL corporate group possessing omnidirectional logistics
functions," the SBS Group focuses on the Sustainable Development
Goals (SDGs) representing the myriad issues the world faces andthe direction of their solutions. We regard contributions to achieving
the SDGs as one of the cornerstones of our management policy.

8.2: Achieve higher levels of economic productivity through diversification,technological upgrading and innovation, including through a focus on
high-value added and labor-intensive sectors.
8.5: By 2030, achieve full and productive employment and decent work for
all women and men, including for young people and persons withdisabilities, and equal pay for work of equal value.
8.8: Protect labor rights and promote safe and secure working environments
for all workers, including migrant workers, in particular women
migrants, and those in precarious employment.

Agenda 2030, which all 193 United Nations member

The SBS Group’s Initiatives

nations agreed to adopt in September 2015, is a plan to(1) Declaration on Respect for Human Rights and Elimination of Harassment

end extreme poverty, inequality and injustice and preserve
the global environment over 15 years to achieve a better
future. The Sustainable Development Goals (SDGs) that this(2) Basic Policy on Human Resource Development and Education & Training
Planplan sets out reflect the future role of the economic
community and how corporate activities should be
conducted.

Ensure sustainable consumption andTake urgent action to combat climate change

production patterns

and its impacts

TargetTarget12.5: By 2030, substantially reduce waste generation

13.3: Improve education, awareness-raising andthrough prevention, reduction, recycling andhuman and institutional capacity on climate

reuse.

change mitigation, adaptation, impact reduction

The SBS Group’s Initiatives(1) Sincere Challenge 2030 (medium-to-long-term
environmental plan)(2) Expanded functionality of the reverse logistics
businessand early warning.
The SBS Group’s Initiatives(1) Sincere Challenge 2030
(medium-to-long-term environmental plan)(2) Climate Change Risks and Countermeasures

Ensure inclusive and equitable quality

Ensure access to affordable,

education and promote lifelong learning

reliable, sustainable and modern

opportunities for allenergy for all

TargetTarget4.3: By 2030, ensure equal access for all women and men to affordable and7.2: By 2030, increase substantially the share of renewable energy in thequality technical, vocational and tertiary education, including university.
4.4: By 2030, substantially increase the number of youth and adults who
have relevant skills, including technical and vocational skills, foremployment, decent jobs and entrepreneurship.
The SBS Group’s Initiatives

global energy mix.
7.3: By 2030, double the global rate of improvement in energy efficiency.
The SBS Group’s Initiatives(1) Transmission of Renewable Energy through Solar Power Generation(2) Sincere Challenge 2030 (medium-to-long-term environmental plan)(1) Basic Policy on Human Resource Development and Education & Training
Plan(2) Scholarship Program (Foundation) for Students Receiving Social Care

Build resilient infrastructure, promote
inclusive and sustainable industrialization,

Make cities and human settlements inclusive,and foster innovation

safe, resilient, and sustainable

TargetTarget

9.1: Develop quality, reliable, sustainable and resilient infrastructure,

11.2: By 2030, provide access to safe, affordable, accessible andincluding regional and trans-border infrastructure, to support economic

sustainable transport systems for all, improving road safety, notably bydevelopment and human well-being, with a focus on affordable and fair

expanding public transport, with special attention to the needs of thoseaccess for all.

in vulnerable situations, women, children, persons with disabilities and9.4: By 2030, upgrade infrastructure and retrofit industries to make themolder persons.

sustainable, with increased resource-use efficiency and greater

11.6: By 2030, reduce the adverse per capita environmental impact of

adoption of clean and environmentally sound technologies andcities, including by paying special attention to air quality and municipal

industrial processes, with all countries taking action in accordance withand other waste management.

their respective capabilities.

The SBS Group’s Initiatives

The SBS Group’s Initiatives(1) Addressing modal shift(1) Reinforcement of logistics infrastructure, enhancement of IT and LT(2) Reinforcement of logistics infrastructure, enhancement of IT and LT(2) Fostering logistics research (foundation)(3) Risk management(4) Program to foster logistics research (foundation)(5) Sincere Challenge 2030 ((medium-to-long-term environmental plan)

Protect, restore and promote sustainable use of terrestrial
ecosystems, sustainably manage forests, combat

Strengthen the means of implementation

desertification, and halt and reverse land degradation andand revitalize the global partnership forhalt biodiversity loss

sustainable development

TargetTarget15.8: By 2020, introduce measures to prevent the introduction and17.17: Encourage effective partnerships: Encourage and promote effective

significantly reduce the impact of invasive alien species on land,

public, public-private and civil society partnerships, building on theand water ecosystems and control or eradicate the priority species.

experience and resourcing strategies of partnerships.

The SBS Group’s Initiatives

The SBS Group’s Initiatives(1) Cooperation with environmental conservation efforts(1) Partnerships associated with business activities and CSR management(2) Support for the social sector

SBS GROUP BUSINESS & CSR REPORT 2020

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CSR Promotion in the SBS Group

What does it mean to deliver goods?
To deliver goods is to connect goods with people
To connect goods with people is to link people's lives together, and to connect society
We will continue to deliver goods
To bring stability to people's lives and realize a sustainable society

The SBS Group promotes corporate social responsibility(CSR) and management in an integrated way based on the

Organizational Structure
CSR Promotion Committee

Group Management Philosophy and Code of Behavior.
We have classified important CSR themes into four fields,
namely environment, safety, social and governance. For each

Risk Management Meeting
Compliance Meetingof these fields, we have further established important tasks
and promotional measures, which we tackle in an ongoing andmulti-faceted fashion. As two of these fields, the environmentand safety, are regarded as major issues for the Group's corebusiness of logistics, we focus on them with the highest priority.

Environmental Management Promotion Meeting
Transportation Safety Promotion Meeting
Information Security Promotion Meeting

Promotional organizations (Group meetings) have been set
up for each of the four fields to implement activities and share
information. Additionally, the CSR Promotion Committee,
which oversees these organizations, comprises representativesof SBS Group companies and assumes a pivotal role incoordinating the promotion of CSR activities as a Group-wideorganization. The committee's remit includes determining policy
and approving specific measures.

Safety and HealthCommittee

SBS Kamata
Foundation

CSR Management Framework
Promotion Organization
FieldsEnvironment

Main Issues

Consideration of
the environment(reduction of CO2
emissions, energy
conservation)

Important Tasks[Three pillars ofenvironmental measures]
Eco-driving (vehicles)
Energy conservation (facilities)
Environmental actions(employees)

Major Initiatives

Sincere Challenge 2030
Eco and safe driving training
Introduction of eco-friendly vehicles
Modal ShiftIntroduction of energy-saving lights
Creation of renewable energy
Environmental actions taken within a
5-meter radius

Issue-Specific Group
Meetings

Integrated CSR
Meeting(managers of the departments
responsible at each Group
company)(representatives fromGroup companies)

Environmental
Management Promotion
Meeting

Safe driving training
Eco and safe driving training
Analysis of near-miss accidents
Regular health checks, SAS screening tests
Thorough prevention of
accidents
Introduction of digital tachometers anddash cams(education, healthmanagement, factor analysis
Driver contests
and risk prediction)
G-Mark certification
Enhanced safety measures
Fire prevention measures at logistics
facilities
Transportation safety
management

Ensuring Safety(zero accidents)

Safety & Social

Human resource
development
Social Engagement

Occupational health andsafetyQuality control
Social contribution
Internal control
Internal reporting hotline
Compliance training

GovernanceSound Management

Risk management
Information security
measuresBusiness continuity
management

Transportation
Safety Promotion
Meeting

CSR
Promotion
Committee

United Group training / correspondence
coursesCounseling services provided by industrial
physiciansFirst aid courses / introduction of AEDs
Commending social contributions
Subsidized projects
Support for the social sector

Safety and HealthCommittee
SBS Kamata Foundation

Compliance tools
General workplace consultation office
Auditor hotline
Outside reporting hotline
Business continuity planning (BCP)
Information security seminars
e-learning
Investigations of response to targeted attacks

Compliance Meeting
Risk Management
Meeting
Information Security
Promotion Meeting

SBS GROUP BUSINESS & CSR REPORT 2020

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Key Indicators

Environment(Fiscal 2019 Results)

Environment

For details about our basic policy on the environment and the structure
for promoting environmental initiatives, please check our website.
TOP → CSR Initiatives
https://www.sbs-group.co.jp/sbsh/csr/

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

1,570

Number of eco-friendly
vehicles introduced(cumulative total)

3,955

Amount of freighttransported by rail

270,509

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

51tbusiness sites

Total CO2 emissions(compared with theprevious year)

0.5

CO2 emissions per unitof sales (compared withthe previous year)

20.16% increase% decrease

Review of Fiscal 2019 Initiatives (Environment)
2030 mid-to-long-term environmental plan (fiscal 2019 results
are listed on page 27), including, CO2 emissions per unit of sales
as mentioned above. We will continue to tackle these efforts
next year and beyond.
The number of business sites that have installed energy-saving lighting increased to a cumulative total of 50 sites, including
partial installations. Compared with the lighting used previously,
this is seen as having the effect of reducing CO2 emissions byapproximately 2,200 tons annually.

In fiscal 2019, SBS Ricoh Logistics became a member of the
SBS Group. Additionally, in part due to the strong performanceof the logistics business, total CO2 emissions and usage ofmajor energy sources recorded their highest levels since webegan measurements. On the other hand, CO2 emissions perunit of sales have decreased by 8.39%, indicating an improvement in environmental performance.
We have largely achieved the goals set out in Environmental
Action 2020, the action plan that is part of our Sincere Challenge
Energy Usage and CO2 Emissions (Scope 1, Scope 2)

Facilities

VehiclesElectric PowerLight Oil

52,264,114 kWh

63,874 ℓ

LP GasType A Heavy Oil

49,044 m

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

49,758 ℓ

3

26,072,555 ℓ

Running Water

City Gas

444,803 m

149,681ℓ

3

Gasoline

11,817 ℓ
Vehicle Total

Facility Total

65,157 t 5.0% decrease

26,090 t 17.4% increase
Total Emissions

91,247 t 0.5 % increase
Scope 1

Scope 2

Direct Emissions from Energy Sources

Indirect Emissions from Electric Power Purchasing, etc.

66,868 t 3.5% decrease

24,379 t 13.44% increase* Increase or decrease is in comparison to the previous year

Usage of Electric Power, Paper and Water (fiscal 2019)

Electric Power

Paper

Water

Usage

Usage

Usage

52,264,114 kWh

53,685,272 sheets

149,681 m

Specific Consumption

Specific Consumption

Specific Consumption

270,000 kWh

2,770.28 sheets

7,72 mYear-to-year

Year-to-year

Year-to-year

14.64% increase (specific consumption)

11.09% decrease (specific consumption)

15.18% decrease (specific consumption)

3

3* Specific consumption is per employee (fiscal 2019: 19,017 employees)

SBS GROUP BUSINESS & CSR REPORT 2020

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26

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 2020). We will workon this plan in a sincere and proactive 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 of carbon emissions
from vehicles and facilities)
Promotion of resource recycling (effective use and recycling of waste)
Conservation of natural resources (reduction of use of copying
paper and water)Long-term Strengthening reduction of CO2 emissions from vehicles (formulationand implementation of plan for introduction of next-generation
vehicles)Strengthening Reduction of CO2 Emissions from Vehicles
If based on Japan’s nationally determined contributions interms for target energy-derived carbon dioxide emissions ineach sector in the Paris Agreement made at the Framework
Convention on Climate Change, 2030 energy-derived CO2
emissions in 2030 will need to be a 26% reduction from 2013
levels (24% reduction from 2005 levels, corresponding toroughly 927,000,000 tons of CO2), and in the transportation
sector, a reduction of 28% from 2013 levels (32% reduction

from 2005 levels), or roughly 163,000,000 tons of CO2. To
achieve these reductions by the year 2030, the SBS Groupcalculates it will need to replace at least 1,000 medium-sized
vehicles with next-generation vehicles (such as electric orhydrogen-powered vehicles). Moving forward, we will pay close
attention to national policies and the development trends ofautomotive manufacturers to formulate solid plans and find theright time to introduce these vehicles.

Action Plan
In fiscal 2018, the SBS Group managed to achieve its goals for
reduced CO2 emissions per unit of sales, reduced water usage
per employee, improved eco-friendly vehicle ownership rate,
eco-driving promotion, environmental action awareness-raising,and support for environmental groups.

The SBS Group is implementing Environmental Action 2020 as
the action plan of the Sincere Challenge 2030 Mid-to-Long-Term
Environmental Plan. The plan sets six aims and 10 environmental
actions related to priority issues in the medium term, and defines
medium-term goals (currently covering fiscal 2018 to fiscal 2020) to
be achieved.

Environmental Action 2020
Goal
Aim

2018

Preventing
globalwarmingResource
conservation[water andforests]

Resource
recycling

Results

Action2019

2020

At least 3% year-to-year

47.71 t / 100 million

38.09 t / 100 million

Reduction of CO2
emissions per distancetraveled in vehicles

At least 1% year-to-year

0.54 t/km

0.49 t/km

Reduction in water
usage per employee

At least 1% year-to-year

6.71 m3

7.72 m3

3,115 sheets

2,770 sheets

Reduction in PPC
paper usage per
employee

At least 5%
year-to-year

At least 10%
year-to-year

At least 15%
year-to-year

Visualization ofindustrial waste
product recycling

Sampling

Expansion of
applicablebusiness sites

Active promotion

Achievement
Status20.16%
decrease-9.26%

15.05%-11.08%Under consideration

Improved fuel efficiency

At least 1% year-to-year

4.93 ℓ/km

4.93 ℓ/km

NochangeImproved eco-friendly
vehicle ownership rate

At least 3% year-to-year

91.09%

92.45%

1.36-point
increase

Under development

Commendations
awarded to 6
business sites

2,341 vehicles

2,218 vehicles

Eco-driving promotion

Development ofan evaluation
andcommendation
systemLaunch of theevaluation andcommendation
systemFirm
establishment of
the evaluation andcommendation
systemYear-to-year increase in EMS introduction rate

Socialcontribution

2019

Reduction in CO2emissions per unit ofsales

Developmentof greenlogistics
services

Education

2018

Awareness-raising ofenvironmental action(posters, etc.)

Active promotion

Sincere Challenge 2030 posters and"Environmental Actions Taken Within a
5-Meter Radius" posters were displayed.

Support forenvironmental groups

Providing support to at least one group

One environmental group was
supported and provided assistancewith its activities.

-5.25%SBS GROUP BUSINESS & CSR REPORT 2020

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Environment

Climate Change Risks
The SBS Group recognizes risks due to climate change as important management challenges. As an enterprise responsible for partof social infrastructure, risks due to climate change are an issue thatcannot be ignored. To achieve sustainable management, we believe
it is necessary to appropriately ascertain and manage these risks,
and to respond and adapt to them as appropriate.

Risks Due to Physical Impact
To the SBS Group, which maintains many business sitesaround ports and harbors, disasters caused by weather phenomena believed to be affected by global warming, including typhoonsof increased severity, storm surges and frequent torrential rains,pose risks to business continuity. To address these risks, we consider site conditions and facility design with flood damage in mind
when establishing new logistics sites, and have prepared for emergencies with the creation of the SBS Group Business Continuity
Plan, which sets out the measures to be taken in the event of a disaster. Additionally, with rising temperatures in recent years, workers face a significantly heightened risk of heat stroke. To the SBSGroup as an employer of large numbers of drivers and warehousepersonnel, risks to employee health represent a serious issue. We
will take multifaceted measures to deal with these risks, including
the installation of additional water supply equipment, the regular
stocking of supplies, the provision of goods to help workers copewith the heat, careful monitoring of high-temperature warning
information, and efforts to alert workers to the dangers.

Risks Due to Regulations
The strengthening of regulations based on international agreements
such as the United Nations Framework Convention on Climate Change(Paris Agreement) could be a risk that places pressure on management
costs. There is a possibility of new regulations and systems (carbon
taxes, taxes on fuel and energy consumption, etc.) being advanced.
For the SBS Group as a transportation business operator, for example,
we may be pressured to upgrade our vehicle fleet to next-generation
vehicles and switch to more energy-saving facilities at an early stage.
To address these risks, we will pay close attention to national policies
while developing steady plans and make preparations so that we canswiftly invest in vehicles and equipment when the time comes.
SBS Group Business Continuity Plan
This is a plan to ensure business continuity in the event of a major disaster and isprepared in according with the SBS Group basic policy on business continuity
planning. The plan gives top priority to safeguarding people’s lives.

United Nations Framework Convention on Climate ChangeThis convention sets out an international framework to prevent the various adverse
effects that are caused by global warming, with the ultimate aim of stabilizing theconcentration of greenhouse gases in the atmosphere. The Paris Agreement (2015)
was adopted as a new international framework that includes greenhouse gas
emissions reductions for the year 2020 onwards.

The SBS Group’s Climate Change Risks and Countermeasures
Type

Transition

Physical

Cause

Details

EffectDetailed Effects

Countermeasures

Rising greenhouse gas
emissions prices

Strengthening of domestic
environmental regulations due
to international agreements(carbon taxes, taxes on fueland energy consumption,
emissions trading)

Increased operating expenditures (rising legal compliancecosts and rising insurance
premiums)

Pressure on management due to increased operating
expenditures / pressure on management due toincreased costs of environmental investments(increased expenditures from reducing carbon
emissions from vehicles and other facilities) /increased costs and reduced revenue associated withcustomers strengthening CSR procurement efforts

Formulating and executing systematic business strategies (and environmental strategies) based on a
low-carbon approach

Costs to transition to
low emissions
technologies

Pressure on management due
to increased environmental
investment costs

Increased time and costs
spent adopting and deploying
new activities and processes

Increased expenditures from reducing carbon
emissions from vehicles and other facilities
Introduction of next-generation vehicles / introductionof energy-saving measures / introduction of otherenvironmental conservation measures / use andcreation of renewable energy

Formulation and execution ofsystematic business strategies (andenvironmental strategies)

Changes in the market
environment

Market stoppages or the
cutting off of import/export
routes due to disasters or
conflicts caused by global
warming

Sudden and unpredictablefluctuations in energy costs
and energy shortages

Pressure on management or reduced production
capacity from sharply rising fuel and energy costs
and supply shortages causing increased
expenditures

Increased installation and upkeep of
in-tanks to prepare for emergencies/ In addition to the above, supplementary measures such as providing fuel supply services during disasters will be taken

Damage to reputation
due to delays in environmental measures under
decarbonization trends
against the backdrop ofinternational agreements
and other developments

Rise in stakeholder concernsor feedback from negative
stakeholders

Damage to public trust arisingfrom breaches of stakeholder
trust

Falling share prices / reduced competitiveness /personnel exodus

Enhanced environmental management structure (environmental initiatives, information disclosure, etc.)

Other impacts due toclimate change

Risk of customer difficulties
with operations or business
continuity from the effects ofclimate change causing lower
revenue for the SBS Group

Changing sales sources andcombinations therefore leading to reduced sales

Reduced revenue and lost orders due to worsening
financial conditions for customers

Strengthened CSR management
and monitoring of market conditions

Increased severity ofabnormalweatherphenomena including
cyclones and flooding

Increasingly frequent weatherrelated disasters including
typhoons of increasing severity,
frequent torrential rain, heavy
snowfall and so on

Direct damage to facilities andadverse impact on production
capacity and workforce

Compensation for loss of product value due todamage to customer products or flooding, etc. /losses due to direct damage to business assets (business facilities, vehicles, etc.) / accidents suffered by
employees while commuting or at work / reduced
production capacity due to difficulties securing operational personnel or disruptions to vehicle operations

Strengthening of risk countermeasures (hazard management at sites
and the associated responses) anddisaster response management

Rising mean
temperatures

Adverse impacts on thehealth of employees and reduced production capacity
due to rising temperatures

Lower sales and rising costs
due to the adverse impacts
on the workforce (Examples:
health, safety and absenteeism)

Workforce reductions due to employee health hazards such as heat stroke / increased installation of air
conditioning in warehouses and facility/equipment
investments to combat rising truck cabin and bodytemperatures / compensation for loss of productvalue for refrigerated or frozen goods / facility investment to maintain quality to prevent accidents involving products

Implementation of measures,
including careful monitoring ofrelated information and warnings
to workers / increased installationof air conditionings and water supply
equipment, regular stocking of
supplies, provision of goods tocope with the heat / facility andequipment investment to curb
in-vehicle temperatures

Environmental Issues Tackled by the SBS GroupThe SBS Group pursues initiatives to deal with major issues concerning environmental conservation, with a focus on measures that relate
to vehicles and facilities.
Global Environmental
IssuesThe SBS Group’s Initiatives

Global warming

Energy conservation, the creation of renewable energy, promoting
eco driving, introduction of eco-friendly vehicles, modal shift,promotion of eco tires, activity awareness-raising

Air Pollution

Introduction of eco-friendly vehicles, reduction of aging vehicles

Depletion of the ozone
layerCompliance with Act on the Rational Use and Proper Managementof Fluorocarbons

Resource recycling

Company-wide 3R promotion (implemented on a trial basis since
fiscal 2018), promotion of retread tires, activity awareness-raising

Forest conservation

Use of FSC certification, support for conservation groups,
promotion of paperless operations

Water issues

Water conservation, activity awareness-raising

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

1,570(as of December 2019)* Does not include the results of individual training at Group companies.

Number of business sites whereenergy-saving lighting has been
introduced(cumulative total including sites withpartial introduction)

51

businesssites* This initiative has helped curb CO2 emissions by more than 2,200 tons annually.

Modal Shift(fiscal 2019)

Initiatives Related to Vehicles
The SBS Group is striving to foster a deeper culture of
eco-driving through eco-driving (fuel-efficient driving) training(eco and safe-driving training: eco-driving workshops conductedin group settings) and through actual practice (voluntary fuelefficiency management: having drivers ascertain the effects of
their own driving by recording supplied fuel, distances driven
and fuel efficiency by hand to raise awareness of fuel-efficientdriving) in a two-pronged effort.

270,509t

Modal shift is to shift the means of transportation for cargo and people,
and in cargo transportation, it means the movement of goods by cargo
truck is switched to rail or coastal vessel-based transportation. 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 have pursued initiatives,and efforts have also been promoted by Japan’s Ministry of Land,
Infrastructure, Transport and Tourism.

Initiatives Related to Facilities
The SBS Group is promoting energy savings at its facilities
through a range of energy conservation measures including the
introduction of energy-saving lighting (LED, electrodeless lamps,etc.), primarily at existing large-scale centers and new centers.
Energy-saving lighting has now been introduced at 50 businesssites, and the effects of doing so have been visualized. We willcontinue to actively promote these activities.

Other Initiatives
The SBS Group is also addressing modal shift. In addition
to reducing environmental impact, modal shift is a meansof transportation that contributes to society by addressing
the shortage of drivers. In 2015, SBS Logicom took part in
the promotion of modal shift for liquor sellers and helped
drastically reduce CO2 emissions. As a result, we received a jointcommendation as an Excellent Green Logistics Business.

Environmental Actions Taken within a 5-Meter Radiusand Awareness-Raising Concerning the Mid-to-LongTerm Environmental Plan
To encourage each and every employee to consider
the environment, the SBS Group has adopted the slogan“environmental actions taken within a 5-meter radius.” We callon employees to continually put into practice six environmental
actions and also endeavor to raise awareness of the Sincere
Challenge 2030 mid-to-long-term environmental plan.
SBS GROUP BUSINESS & CSR REPORT 2020

29

30

Key Indicators

Safety & Social(Fiscal 2019 Results)

Safety & Social[Safety]

Number ofTransportation Safety
Promotion Meetings
Held

4

Number of Group
Safety Training
Sessions Conducted29Group-average Fuel
Efficiency

4.93

Number of BusinessSites with G-Mark
Certification (certification
rate)

162

Number of Serious
Accidents
For details about our basic policy and promotion system regarding
safety, please check our website.
TOP → CSR Initiatives
https://www.sbs-group.co.jp/sbsh/csr/

0

times

km/l

businesssites (89%)

Review of Fiscal 2019 Initiatives (Safety)
In fiscal 2019, we strengthened our focus on priority areas,
including operational management and other measures
aimed at business optimization, measures to prevent accidents
related to health (measures to deal with sleep apnea
syndrome or SAS, preventing overwork, heat stroke, etc.),

and specific operations as part of fire prevention measures.
We also launched the eco and safe-driving evaluation and award
system as a new measure promoting safe and eco-friendly
practices. We are also pleased to report zero serious accidents
throughout the SBS Group.

Priority Risks
Strengthening employee health management, reducing major accidents, strengthening fire prevention measures at logistics facilities

Priority Issues
Improving fuel efficiency through eco-driving training and enhancing awareness of safe driving
Preventing accidents by conducting safe operational training for trucks and forklifts
Skill improvement initiatives to foster the development of operational managers, health officers and other key personnel

SBS Group Transportation Safety Management
Risk management

Policies and priority issues

Transportation Safety Promotion Meeting

Education and Awareness-raisingGroup safety education

Accident Prevention

Accident factor analysis

Roll calls and alcohol checks

Near miss incident information collection and dashcam
video analysis

Daily inspections●

Operation manager examination preparatory seminars●

Operational manager skill improvement seminars●

Operational manager basic classes●

Operational manager general classes●

Health officer examination preparatory seminars●

Regular first-aid classes●

Eco-driving training●

Eco and safe-driving training●

Truck safe driving training

Stress checks / consultations with industrial physicians●

Forklift safe operation training

Training for persons causing accidents●

Forklift operator contests●

Driver contents

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

Safe Driving and Safe Operation Management

Risk prediction training
Aptitude diagnosis
Regular SAS screening examinations and healthcheckups

Fitting of driving support equipment(digital tachograph, dashcam, rear-view camera)
Business audits, touring follow-ups, business site
self-inspections
Acquiring certification (G-mark) as a business sitewith excellent safety
Truck driver / forklift operator contests
Occupational health and safety movement

Introduction of vehicles equipped with safety features(collision avoidance, reduced braking, road deviation
prevention)
Blood pressure measurements
Heat stroke countermeasures

Safe operation award
Logistics facilities fire prevention measures
Eco and safe-driving evaluation and commendation
system

SBS GROUP BUSINESS & CSR REPORT 2020

31

32

Safety & Social

Education and Awareness-raisingGroup Safety Education
With reports of serious accidents attracting the attentionof society, operation managers have become increasingly
important. The SBS Group focuses on cultivating and improving
the skills of operation managers and strives to raise the level oftransportation safety management capabilities across the Group.
In fiscal 2019, we made further additions to our curriculum for
operational managers.

Meetings

29

Number ofTrainees

713

Safety Slogan
Each year the SBS Group accepts proposals from employees
for a safety slogan to be used in Group-wide awareness-raising
activities to foster pride as professionals with responsibility forsafety. The slogan for fiscal 2020 was selected from 10,393
submissions.

Fiscal 2020 SBS Group Safety Slogan

Give way to one another, and embrace therelaxed presence of mind of a true professional
Mitsuhiro Komoda, Utsunomiya Branch, SBS Logicom Co., Ltd.

SBS Group Safety Education Curriculum Implementation
Status for 2019
Curriculum

Number of
Number of
Sessions Held Trainees

Operation manager examination preparatory seminars

9259

Operational manager skill improvement seminars

1

52

Operational manager basic classes

252Operational manager general classes

2

91

Health officer examination preparatory seminars

1

13

Regular first-aid classes

2

28

Eco-driving training

2

28

Eco and safe-driving training

2

41

Truck safe driving training

3

63

Forklift safe operation training

3

40

Forklift Operator Contests

1

16*

Driver contests

1

29*

Affixing of Eco and Safe Driving Vehicle Stickers
Since December 2017, this sticker has been affixed to all SBSGroup cargo vehicles. The sticker represents our promise tosociety that SBS Group vehicles take the environment and safety
into consideration. We are conscious of being eco-friendly andsafe drivers, and are committed to eco and safe driving.

* participating contestants

Accident Prevention
Driver Health Management

Employee Health Management

The SBS Group not only takes steps to prevent overwork
but also makes thorough efforts to regularly conduct healthcheckups and perform SAS (sleep apnea syndrome) screenings
to prevent accidents attributable to employee health. SAS
screening tests not only involve secondary screening but also
regular monitoring after testing. Additionally, since there has also
been an uptick in accidents related to brain disorders acrosssociety, we continually monitor the state of health of drivers byconducting brain MRI scans as necessary in order to ensure
safety and peace of mind in our transportation operations.

In light of recent rising temperatures, since fiscal 2018 the
SBS Group has stepped up measures to combat heat strokein its warehouses. We have thoroughly investigated information
related to incidences of heat stroke and installed additional
air conditioning equipment to enable proper temperature
management within warehouse facilities. In addition, we actively
advise drivers to run air conditioning continuously. As a result,
we have managed to halve the number of heat stroke cases
compared with the previous year. We will continue to address
this issue with the aim of completely eliminating cases of heatstroke among our employees.

Safe Driving and Safe Operation Management
Driver & Operator Contests

Fitting of Driving Support Equipment

We have been holding contests since fiscal 2016 with the aimof having drivers and operators compete over their knowledgeof advanced driving skills, inspection technologies and related
laws and regulations in order to raise awareness of their social
responsibilities as drivers and operators by honing skills throughfriendly competition and acting as exemplary representativesof their respective workplaces. Each contest will improve theawareness and skills of individual drivers and cultivate a Groupidentity that pursues safe driving and operation.

The SBS Group has proceeded to fit its vehicles with digitaltachographs (including switch-overs from analog systems).
A digital tachograph sounds a warning alarm when a driver
exceeds a speed limit or brakes suddenly. We are also steadilyequipping vehicles with dashcams. The company monitors theserecords and makes drivers aware of areas for improvement
as necessary. In addition, we have made steady progress in
the installation of rear-view cameras, which prevent collision
accidents when a vehicle is reversing.
Number of Vehicles Equipped with Driving Support Equipment

4th SBS Group Driver Contest
Saturday, November 16, 2019
Anegasaki Driving School(SBS Driving School Co., Ltd.)
Competitors: 29
Related Personnel: 188
Total Participants: 217(1) Regular inspections(2) Academic examination(3) Practical driving skills

Digital / Analog
Tachographs

3,692

vehiclesDashcams

3,752

vehicles2nd SBS Group Forklift Operator Contest
Saturday, August 31, 2019
Toyota L&F Customers Center Tokyo
Competitors: 16
Related Personnel: 42
Total Participants: 58(1) Regular inspections(2) Academic examination(3) Practical operating skills

Fiscal 2019 Eco and Safe-Driving Evaluation andCommendation System
Company Name

Branch NameSBS San-Ai Logistics Higashinihon Co., Ltd. Miyagi Sales Office
SBS Logicom Kanto Co., Ltd.

Kawasaki Port Container Terminal Branch

SBS Freight Service Co., Ltd.

Nobukiyo Sales Office

SBS FlecNet Co., Ltd.

Kitami Sales Office

SBS Sokuhai Support Co., Ltd.

Chiba Branch

SBS Zentsu Co., Ltd.

Iwatsuki Branch

Rear-View
Cameras2,407

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

Eco and Safe-Driving Evaluation and Commendation System
In fiscal 2019 the SBS Group launched the Eco and
Safe-Driving Evaluation and Commendation System with theaim of achieving transportation safety and appropriate business
operation by widely disseminating eco and safe-driving
awareness and skills among SBS Group companies. The
system recognizes those business sites in the Group's
six transportation-oriented companies that have exhibited
outstanding results in eco and safe-driving. Fuel efficiency
improvement rate (compared with the previous year) andthe implementation status of safe driving management andsafety education have been established as evaluation items.
In the system's inaugural year, six business sites received
commendations. The SBS Group strives to improve quality inboth environmental and safety terms through this system.
SBS GROUP BUSINESS & CSR REPORT 2020

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34

Safety & Social[Social]Engagement between the SBS Group and Society
The SBS Group undertakes its corporate activities with the
involvement of various stakeholders.
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 and contractors and the local communities where theGroup does business as major stakeholders.
To stakeholders, we commit to putting the customer first, making

appropriate information disclosures, developing a comfortableworkplace, cultivating partnerships and contributing to local
communities, and we endeavor to reflect these commitments
in our corporate activities through wide-ranging dialogue
with stakeholders. We have established a Code of Behavior
prescribing compliance with laws, manners and morals,
environmental conservation and social contribution as acorporate citizen, and strive to coexist with society.

Engagement with Customers
Quality Management System
Each Group company in the SBS Group has established aquality management system and we endeavor to maintain andimprove the quality of the transportation and services we provide.
In addition to the international ISO9001 standard that indicatessystematic requirements for quality management systems, wehave 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.
* See the CSR data on page xx for more information on certification status.

Implementation of Improvement Activities
The SBS Group conducts a wide range of improvement
activities and holds an Improvement Contest designed torecognize achievements in those endeavors and shareoutstanding expertise. For its part, SBS Ricoh Logistics Systemholds a Global KAIZEN Contest under the themes of KAIZEN
and Reform incorporating management issues. Meanwhileat SBS Zentsu, the Home Delivery Division responsible forthe delivery of foods at the four temperature ranges holds
Improvement Example Presentations to develop a comfortableworkplace environment, and has workers compete and learn
home delivery customer service skills through the “Customer
Service Master Contest.” SBS Flecnet holds Business
Improvement Presentations with the aim of providing better
services and developing an improved work environment. Eachof these initiatives is not only an opportunity to raise awarenessof issues and share lessons, but is also positioned as anopportunity to develop a positive corporate culture.

Provision of Information
In addition to disclosing information about the business
operations it is entrusted with, the SBS Group earns the trustof 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 earned a favorable reception
among companies, groups and government organizations as a
medium for disseminating useful information to those responsible
for and involved with logistics, including case studies of logistics
solutions and the latest information. Everything from the expertiseand functions of SBS Logicom logistics services to the ingenuity ofits staff is introduced in an easily understood format that illustrates
SBS Logicom’s collective strength as a logistics company.

Engagement with Employees
Respect for Human Rights and Eradicating Power
Harassment
To coincide with the enactment of power harassment
prevention legislation, the SBS Group established a Declaration
on Respect for Human Rights and the Eradication ofHarassment. In our management philosophy, we at the SBSGroup state the belief that "long-term prosperity is rooted inpaying the necessary attention to people and in the enthusiasmof our employees." In keeping with this belief, we will makeevery effort to respect human rights and prevent harassment.

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 in educational andawareness-raising activities, heed compliance information, acquire
knowledge and development the ability to take action.
Whenever we suffer or witness harassment, we will consult with orreport it to a consultation service and never leave it unaddressed.

Engagement with Business Partners
Diversity
The SBS Group ranks the promotion of diversity among its key
issues in the medium term and is working on the following issues.
1. Cultivating a workplace environment that considers individual
differences to be something of value

The services provided by the SBS Group are supported
through the cooperation of many business partners. We regard
our business partners as fellow entities executing business goals
in tandem with the SBS Group. Accordingly, we endeavor to fulfill
our obligations and develop in step with these business partners,
in keeping with laws and ethics.

2. Conducting diversity & inclusion training and awareness-raising
to eliminate prejudice
3. Enhancing organizational strength through the proactive hiring of
a diverse range of human resources
4. Establishment and enhancement of support for minorities
5. Development of a workplace environment enabling all employees
to maintain a healthy work-life balanceCommunication with Stakeholders
The SBS Group strives to engage in dialogue as well as
disclose and provide information by developing and utilizing
various means of communication with stakeholders.

Development of Telework and Work-From-Home Systems
In response to measures addressing the recent coronavirus
pandemic, telework and work-from-home systems were developed
for the administrative divisions. Remote work functions that had
previously been introduced for a subset of operations were expanded
to cover roughly 90% of employees (as a percentage in SBS
Holdings). In conjunction with these developments, we will establish
new rules (establishment of work-from-home regulations) and revise
existing systems (further systemization of administrative functions).
The SBS Group will ensure that new styles of working can takeroot and work to promote a healthy work-life balance whilestrengthening business continuity functions.

Human Resource Development

Communication
with Employees

Publication of the SBS
Express Groupmagazine
Compliance
Newsletter
ComplianceTraining
Tools

Communication
with Shareholders
and Investors

Responses toInvestors andAnalysts

Media Communication

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. * See the CSR data on pages 47-49 for abreakdown of the curricula.

* Individual educational tools fordivisions and business sites

93

100

Press Releases
IssuedWeb Information(twice a year)/ year50

12

2. We will cultivate human resources through a broad rangeof education and training, and strive to build up the Group’s
personnel-based assets
3. We will assist employees in achieving their self-actualization goals
through life-long education

times

times

times

Total Financial Results
Briefing Attendees

The SBS Group provides wide-ranging education and training
to all employees working at Group companies in accordance withthe following Basic Policy on Human Resource Development.
1. We will implement human resource development as a part ofour management strategy and human resource strategy, andfoster human resources able to contribute to the growth anddevelopment of the Group

7

9

4

WebsiteCommunication

Number of
Visitors

Page Views

1,735,543
8,095,160(141,415)
PV(617,747 PV)* Figures in parentheses are for SBS Holdings, Inc.

Poster for the Declaration on
Respect for Human Rights andElimination of Harassment

SBS GROUP BUSINESS & CSR REPORT 2020

35

36

Safety & Social

Social Contribution Activities
Food Bank Support Through the Provision of SBS GroupResources
The SBS Group began food bank support activities in 2018. A foodbank is an activity or organization that collects from corporates andother 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 Second Harvest Japan (2HJ), the largest food bankin Japan which is based in Asakusabashi, Tokyo. We were looking
for ways to contribute to society through logistics, and 2HJ's needs
for logistics support coincided with our capabilities, leading to theconclusion of a support agreement. We provide support in two
main ways, firstly providing the temporary transportation 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.), but when there is no way to secure a vehicle ormanpower, such as when there are no available vehicles or drivers(who are all volunteers), an SBS vehicle can be used as an alternativetransportation service. On rare occasions when the 2HJ warehouseis full, we receive requests to store supplies and respond as needed.

The food bank support is a very meaningful initiative that not only
contributes to strengthening the food lifeline for people in need, butalso contributes to the reduction of food loss, which is a recent social
problem. In the future, we will continue to work together with 2HJ tocreate a society where people have a place they can turn to when
they encounter difficulties with food.

Manufacturers

Importers and Wholesalers

Retail Outlets

Regular Companies

Donations

Food Bank

Orphanages
WelfareFacilities

Local Public Entities
Social Welfare
Councils

NPO
Organizations

Local Food Bank
Organizations

IndividualHouseholds

Food Bank Support Results (Transportation and Storage)
Implementation Date

Logistics

Shipment (Segment)

Support

May 17, 2018

Transportation

209 cases of crackers (Misato to 2HJ Saitama Yashio warehouse)

SBS Logicom(Noda Logistics Center)

October 4, 2018

Transportation

240 kg of brown rice (Goka, Sashima District, Ibaraki Prefecture to 2HJ
Saitama Yashio warehouse)

SBS Logicom(Koshigaya Branch)

October 18, 2018

Storage and Transportation

8,064 bottles of avocado oil * Transported to 2HJ warehouses as needed

SBS Zentsu(Kawaguchi Center)

November 15 toNovember 22, 2018

Transportation

780 boxes of instant ramen noodles (Asahikawa to 2HJ Saitama Yashio
warehouse)

SBS Logicom(Transportation Sales
Development Department)

June 13, 2019

Transportation

February 21, 2020

Storage and Transportation

8,374 cases of Rosti * Transported to 2HJ warehouses as needed

SBS Zentsu(Kawaguchi Center)

July 6, 2020

Storage and Transportation

10,584 cases of granola bars * Transported to 2HJ warehouses as needed

SBS Zentsu(Kawaguchi Center)

1.16 tons of chocolate (Nishi Funabashi to 2HJ Saitama Yashio warehouse)

SBS Logicom(Nishi Funabashi Branch)

The SBS Group's Major Social Contribution Initiatives
Type

Coordination with
the Social Sector*

Nature of Support and Recipients

Details of Support

Reception / Implementation

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 andproposals 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

Social contribution-oriented sales drives

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
OlinasDonation of used stamps (Sumida Ward Council

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

Accepted at any time

Collection of toothbrushes >ToothbrushCollection Program)This initiative collects used toothbrushes and recycles them into new plastic
products, such as flower pots. 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)

Contributing to the
local community(Sumida Ward Welfare Workplace Network <kai>)of Social Welfare)(LION / TerraCycle Japan G.K.)

Others(Collection of used items, etc.)

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

An initiative to send "randoseru*" school backpacks to children in Afghanistan
who still lack 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.
* 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.

Accepted at any time

SBS Kamata Foundation
The SBS Kamata Foundation is a support foundation thatprovides grants for excellent logistics research and offers
scholarships to students receiving social care.
SBS Kamata Foundation Website (https://www.sbs-kamatazaidan.or.jp/)

Logistics Research Grants

Scholarships for Students Receiving Social Care

The foundation conducts aid activities
with the aim of supporting academic
research into logistics, which is part ofthe social infrastructure, and contributing
to the development of the industry as awhole and the betterment of people’s
lives, for instance by using the fruits ofresearch to improve logistics efficiency
and prevent accidents.

This project provides scholarship funding to motivatedNumber of Scholarshipand talented students andRecipients in Fiscal
2019
other persons to prevent
them
from
abandoning
education for economic reasons, with the aim of contributing toequal opportunity in education and the development of humanresources, while helping enhance education and welfare.

Grants Issuedin Fiscal
2019

6

Applicable Research: (1) academic research and (2) the holding ofresearch workshops, symposiums, seminars, etc.
that contribute to the promotion or developmentof logistics are eligible.
* Examples of the themes addressed: improving logistics efficiency, improving safety in cargotransportation and reducing the impact on the global environment (reducing CO2 emissions)through better logistics systems
Grant Amounts: Total of 3,000,000 yen, up to 500,000 yen per individual grant.

57

Application Requirement: Students who are generally at least 18 years
old and have been accepted for enrollment intohigher education, who are children residing in achild welfare home or living in a foster home in
the Kanto region, and who plan to advance touniversity, junior college, a vocational school orsimilar
Scholarship Amounts:

300,000 yen per student (as a higher education
allowance)

Results of Issued Grants and Awarded Scholarships
2015

2016

2017

2018

2019

Logistics Research Grants

6

7

7

9

6

Scholarships Awarded

-

-

30

34

57

Results of Logistics Research Adopted in Fiscal 2019
Grant Amount(thousand yen)

Name of Affiliate Organization

Position

Name

Research Subject

Nihon University College of Commerce

Associate
Professor

Takuya Akikawa

Research into the relationship between carbon dioxide emissions due totransportation and business practices

495

Department of Information Network andCommunication, Faculty of Information
Technology, Kanagawa Institute of Technology

Professor

Jun Usuki

Research into physical inventory management in a warehouse using multiple UAVs

500

Department of Energy and Environmental
Engineering, Interdisciplinary Graduate Schoolof Engineering Sciences, Kyushu University

Professor

Jun Tanimoto

Basic design for a system of fully automated operation based on IoTtechnologies to ensure logistics resilience500

Academic Research Institute, Tokyo Universityof Marine Science and Technology

Assistant
Professor

Toshimasa Asou

Truck driver operational measurement system to facilitate contract
negotiations with shipping consignees

500

Department of International Business andManagement, Faculty of Business
Administration, Kanagawa University

Associate
Professor

Daisuke DoyoStudy of the impact of additive manufacturing on supply chains

500

Faculty of Business Administration, Josai
University

Professor

Shikato Kamimura

Research into cold chain demand trends to promote the export of Japanese
foods to Asia

500

SBS GROUP BUSINESS & CSR REPORT 2020

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38

Key Indicators

Governance(Fiscal 2019 Results)

GovernanceOutside Director

See the SBS Group website for details about corporate
governance. The website includes the SBS Holdings Corporate
Governance Guidelines, which summarize the SBS Group's
basic framework and approach regarding corporate
governance, as well as the Report on Corporate Governancesubmitted to the Tokyo Stock Exchange.
TOP → Investor Relations → Corporate Governancehttps://www.sbs-group.co.jp/sbsh/ir/governance/3(out of 8 directors)

Board of Directors
meeting attendance
rate by outside
directors

100

Assessment of Internal
Control Related to
Financial Reporting for
Fiscal 2019

Valid

%

Corporate Governance● The Company will develop an investor relations structure

Purpose and Basic Approachheaded by the President and Director and will promotedialogue with shareholders and investors in an effort to achievesustainable growth and enhance corporate value over the
medium and long terms.

By achieving the Group Management Philosophy and Code of
Behavior established based on its founding spirit, the SBS Groupaims to maintain a positive relationship with its stakeholders andendeavor to build an effective management structure by enhancing
the efficiency, soundness and transparency of its management. In
addition, the SBS Group will adopt the basic approaches of ensuring
management transparency towards its shareholders and otherstakeholders, maintaining management efficiency and conducting
business activities consistent with business ethics and practicing
CSR management, while striving to enhance and strengthen
corporate governance in keeping with the following policies.

Structure
SBS Holdings has adopted the system of a company with an
Audit & Supervisory Board. Under this system, the Board of
Directors is responsible for making important management
decisions and overseeing the execution of business operations.
Working independently from the Board of Directors, the Audit &Supervisory Board and its members are responsible for conducting
strict auditing of statutory requirements. Several outside directors
are appointed to the Board of Directors to bolster its monitoring
function. SBS Holdings has also adopted an executive officer
system in order to clarify the executive responsibilities of officers
while ensuring the proper delegation of authority. Through these
efforts, SBS Holdings has developed a system that enables
business operations to be carried out flexibly.
To ensure that directors and Audit & Supervisory Board members
fulfill their respective roles as required, when appointed they arebriefed on matters primarily concerning their obligations and responsibilities, and are offered the necessary support for self-improvement.
The reason SBS Holdings has adopted the current structure is toensure a prompt and automatic decision-making body, which is thegreatest strength of SBS Holdings and the SBS Group companies,
and to steadfastly preserve objective and neutral monitoring
functions that support sound management.

● To ensure substantial equality with respect to shareholders, theCompany will endeavor to enhance management transparency
through the proactive disclosure of information, and develop an
environment in which shareholders can exercise their rights
appropriately.
● The SBS Group will make every effort to respect and maintain apositive relationship with its stakeholders, including employees,
customers, business partners and local communities, to enhance
corporate value in the medium and long term, in accordance with
its Group Management Philosophy and Code of Behavior.
● In light of its fiduciary duty to shareholders, the Company’s Boardof Directors will appropriately carry out its roles and responsibilities, including making decisions regarding the implementation ofimportant business of the SBS Group, monitoring the progress ofsuch operations, and supervising the attainment of businessplans and the management philosophy, in the interests of thesustainable growth of the company and the enhancement ofcorporate value over the medium and long terms.

Organizational Chart of Corporate GovernanceAppointment / Dismissal

General Meeting of Shareholders
Appointment / Dismissal

Appointment / Dismissal

SBS Holdings, Inc. (the Company)
Audit

Audit & Supervisory Board

Board of Directors
Supervision

Coordination
Coordination

Reporting
ReportingInstruction

Internal Audit Department

Representative Director
Reporting

Investigation

Accounting Auditor

Audit

CSR Promotion Committee
Corporate Planning / Human Resources /Audit

Finance, etc.

ReportingInstruction

Risk Management Meeting
Compliance Meeting
Environmental Management Promotion Meeting
Transportation Safety Promotion Meeting

Audit and Reporting

Information Security Promotion Meeting

Management
Control

Discussion and Reporting

SBS Group Companies

SBS GROUP BUSINESS & CSR REPORT 2020

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40

Governance

Board of Directors

Audit & Supervisory Board

The Board of Directors meets at least once a month, where it
deliberates over and decides on management issues, newbusiness policies and other important matters. The mattersdeliberated over and decided on by the Board of Directors is set
forth in the Board of Directors Regulations. Decisions are madeon legal matters, major issues related to the business policies
and management of SBS Holdings and the SBS Group, and onother matters to be resolved. Official Authority limit the scope ofmatters handled by the Board of Directors and delegate authority
to the President, executive directors and executive officers.
The Board of Directors comprises eight directors, three ofwhom are outside directors. The outside directors fulfill theirroles and responsibilities to enhance corporate value, including
offering advice and guidance related to management from an
independent standpoint, attending important Group meetings,
and providing recommendations as necessary.

Independent of the Board of Directors, the Audit & Supervisory
Board meets at least once a month. At the meetings, which areattended by Audit & Supervisory Board members and membersof the Internal Audit Department, the status of audits and mattersidentified in audits are reported on, compliance with statutory
requirements is verified, and information is shared to promoterecognition of issues. The Audit & Supervisory Board members
comprise two full-time auditors and two part-time auditors. These
members endeavor to collect information by attending important
meetings such as meetings of the Board of Directors, viewing
important documents and checking the implementation status ofoperations, and strive to enhance the internal checks andbalances function.

Meetings of the Board of Directors and Attendance by
Outside Directors (Fiscal 2019)
Board ofDirectors

Audit & Supervisory
Board

14

14

Outside Directors (3)

100%

100%

Outside Audit &Supervisory Board
Members (2)

91%

91%

Meetings

AttendanceRate (%)

Outside Officers
SBS Holdings has been working to expand its ranks of outside
officers to bolster management supervisory functions. These
efforts are also expected to achieve highly independent andtransparent monitoring functions and play a part in the formationof new ideas and principles that are not beholden to customary
practices. Standards concerning the independence of outside
directors are set forth in the Corporate Governance Guidelines.
With the aim of stimulating discussion at Board of Directors
meetings, materials for Board of Directors meetings are sent tooutside directors and outside Audit & Supervisory Board
members in advance, and at the request of outside directors, thedepartment preparing the agenda items provides advance
explanations, in an effort to minimize the information gap withinternal directors. Additionally, one Audit & Supervisory Board
staff member has been appointed to assist outside Audit &Supervisory Board members in their duties. The Internal Audit
Department, which is the Company's internal auditing body, also
facilitates operations by assisting outside Audit & Supervisory
Board members.

Outside Officers (officers appointed at the Annual General Meeting of Shareholders for the 34th Period [held March 26, 2019] and still in office as of the end of August 2020)
Title

OutsideDirectors

Independent Officer

Name

Reason for Appointment

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 he will continue to reflect
these qualities in the management of SBS Holdings.

Tetsuya Sekimoto

Tetsuya Sekimoto possesses extensive experience and knowledge as an attorney as well as
experience and knowledge as an outside officer, and was appointed on the expectation that theseexperience and knowledge can be utilized for the compliance management of SBS Holdings.

Shuichi Hoshi

Shuichi Hoshi worked for many years as the head of the food logistics department for a general
trading company and was appointed as a director of SBS Holdings on the expectation that he willcontinue to utilize the business experience he accumulated there and managerial acumen he has
cultivated as a company officer.

Masahito Takeda

Masahito Takeda has worked for many years as an auditor and has served as an outside Audit &Supervisory Board Member for SBS Holdings. He was appointed on the expectation that he willcontinue to make use of his past experiences as an member of audit committees and experience asan outside Audit & Supervisory Board member of SBS Holdings in the future auditing of SBS Holdings.

Masato Matsumoto

Masato Matsumoto possesses extensive experience as a corporate manager at a financial institution
along with considerable knowledge regarding finance and accounting. He was appointed on the
expectation that he will continue to reflect his broad knowledge in these areas in the auditing of SBS
Holdings.

Outside Audit &Supervisory
Board Members

Analyzing and Evaluating the Effectiveness of theBoard of Directors
SBS Holdings has been analyzing and evaluating theeffectiveness of the Board of Directors (by conducting surveys ofthe directors and Audit & Supervisory Board members) since
fiscal 2016 in an effort to improve its functioning.
As changes were made to the directors and Audit &Supervisory Board members at the Annual General Meeting of
Shareholders held in March 2019, the questions on the survey
were kept the same as fiscal 2017 and 2018, in order tounderstand the evaluation of the Board of Directors' operation by
the new directors and Audit & Supervisory Board members, andto ascertain impact of their evaluation on the overall operation of
the Board of Directors.
The average evaluation across all survey questions was 4.24
points (with each question graded on a five-point scale),surpassing the previous year's results of 4.23 by 0.01 points.
These evaluation results suggest that the Board of Directors isfunctioning at a largely satisfactory level.
The results of the survey responses and the opinions submitted
by the respondents were shared at the Board of Directors as
issues to be addressed in the future and were the subject ofdeliberation over actions to be taken. The Board of Directors willtake action to further improve its effectiveness following repeateddiscussions.

Director8
3 of whom are outside directors

Board of Directors
Meetings Held

Average Score Obtained in the
Evaluation of the Effectivenessof the Board of Directors* five-point scale

14
4.23
4.24

pointspointsFormat of the Survey (each question graded on a five-point
scale)(1) Composition of the Board of Directors (two questions)(2) Operation of the Board of Directors (five questions)(3) Matters taken up by the Board of Directors (eight questions)(4) Systems supporting the Board of Directors (four questions) 19
questions in total* The survey included a space for respondents to supplement theirassessments and describe other opinions.

Group Governance
The matters deliberated over and decided on by the Board of
Directors include those submitted from SBS Group companies.
In addition, the directors of SBS Holdings have monthly meetings
with the main Group companies to discuss their management
issues in an effort to improve Group governance.
As needed, Audit & Supervisory Board members also attend
the board of directors’ meetings and other meetings of Group
Companies as observers, in an effort to collect information andensure internal control functions.

Corporate Governance CodeSBS Holdings values and respects the basic principles
expressed in the Corporate Governance Code established andpublished by the Tokyo Stock Exchange, Inc. in conjunction with
the Financial Services Agency. In its report on corporate
governance, SBS Holdings reports on its disclosure statusaccording to the principles of the Corporate Governance Codeand provides reasons for any areas in which it is not putting theprinciples of the Code into practice.
SBS GROUP BUSINESS & CSR REPORT 2020

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42

Governance

Officer Remuneration

Appointment and Dismissal of Officers

To ensure objectivity and transparency, the remuneration of
SBS Holdings directors is set by the president in accordance with
the Internal Regulations on Director Remuneration adopted by
the Board of Directors, and is determined after seeking opinionsfrom outside directors. The remuneration of Audit & Supervisory
Board members is determined through consultation by the Audit& Supervisory Board.
The maximum limit on the annual remuneration has been set at
144 million yen for directors of SBS Holdings by resolution of theAnnual General Meeting of Shareholders held on December 22,
1999, and at 50 million yen for Audit & Supervisory members by
resolution of the Annual General Meeting of Shareholders held on
March 26, 2020. Amounts including the remuneration of directors
for the fiscal year under review were determined at the Board of
Directors meeting held on March 26, 2020.
The remuneration of the directors of SBS Holdings comprises
base compensation and performance compensation. The baseremuneration is determined on a per-officer basis. To better link
performance compensation with company performance andincrease objectivity and transparency, consolidated operating
income is used as a measure for evaluation. Amounts for
performance compensation are calculated by taking the sum ofquantitative points based on the achievement of consolidated
operating income targets and qualitative points that assess each
officer's required roles, functions, responsibilities andachievements, and multiplying it by a base amount determinedfor each officer. The target consolidated operating income for the
fiscal year under review was 9 billion yen, and a consolidated
operating income of 10.1 billion yen was achieved.
Also note that in the interest of maintaining independence fromthe operating divisions, the remuneration of outside directors only
comprises base compensation.

SBS Holdings appoints directors, top management such as its
directors and the representative directors of Group companies
and Audit & Supervisory board members who are of excellent
character and have the knowledge, experience and ability to carryout the responsibilities required of them. In addition, we nominate
candidates for outside director and outside Audit & Supervisory
Board member from among those who possess a wealth ofexperience and expert knowledge related to corporate
management and whose characters meet our standards forindependence. In appointing, dismissing and nominating
individuals for these positions, we consult the Board of Directors
after asking outside directors for their opinions in advance. The
Company's articles of incorporate prescribe one-year terms of
appointment for directors, and the reasons for appointing
candidate directors and Audit & Supervisory Board members arelisted in the notice of the Annual General Meeting of Shareholders.
Maximum Limit on the
Remuneration of
Directors

144

Up to

million yen

Actual amounts

74

million yen(excluding outside directors)* The total remuneration of outside directors (outside directors andoutside Audit & Supervisory Board members) is 28 million yen.

Term of Appointment
for Directors

1

year

Officer Remuneration (Fiscal 2019)
Office Category

Total Amount (million yen)Amounts by Type (million yen)

Number of Applicable Officers

Base Compensation

Performance Compensation

74

71

3

5

(excluding outside Audit & Supervisory
Board Members)

15

15

-

1

Outside Officers

28

28

-

6

Directors (excluding outside directors)
Audit & Supervisory Board Members*1: Directors (excluding outside directors) include two directors fulfilling concurrent roles as the representative directors of subsidiaries, and as the performance evaluations of those two directors are carried out by
the subsidiaries in question, they are only paid base compensation as remuneration from SBS Holdings.
*2: The amount of remuneration for outside directors includes the remuneration for one outside director who stepped down at the conclusion of the Annual General Meeting held on March 26, 2019, for the periodof the fiscal year under review during which they held office.

Compliance
Number of times theCompliance Meeting
was convened

Management
The SBS Group has established the SBS Group Code of Behavior
and SBS Group Compliance Regulations, and is committed todeveloping and promoting its compliance systems. 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, theCompliance Meeting also monitors, confirms and investigates compliance violations and drives improvements. In addition, by distributing a
range of awareness-raising materials including the SBS Group
Compliance Manual to all Group employees and thoroughly ensuring
the observance of compliance requirements, the SBS Group makes
every effort to promote fair and ethical behavior and activities.

Number ofcompliance-related
training sessions

2
10* Tiered training + specialist training (harassment)

Number of consultations
fielded by complianceconsultation hotlines

Awareness-raising materials distributed to all employees● Compliance Card
● Compliance Manual● Compliance Rulebook

92

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

Establishment of Consultation and Internal Reporting
Hotlines
The SBS Group has established and operates hotlines throughwhich all employees working in the SBS Group can seek consultationor make reports when they become aware of an issue with theworkplace environment or business operations, or of conduct that
violates laws, internal regulations or corporate ethics. There are three
types of hotline, the “General Workplace Consultation Office (staffedby compliance personnel), the Auditor Hotline (staffed by Audit &Supervisory Board members) and the Outside Reporting Hotline(staffed by attorneys). The General Workplace Consultation Officeallows an employee to select the contact details (direct dial) of theconsultant (male or female) they will speak to.

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
new measures, and when issues come to light in the consultation
or reporting hotlines, corrective measures are implemented.

"General Workplace Consultation Office Counseling room
for all workplace concerns" posters

Reporting and Consultation Flow
SBS Group Employees
Reporting and Consultation

SBS Group Internal Reporting Hotline
Internal reporting hotline

Outside Reporting Hotline

General Workplace
Consultation Office

Attorney hotline

Auditor Hotline

Reporting

Request for Investigation

SBS Group Compliance Meeting(Chairperson: CSR Officer, Administrative
Office: CSR Promotion Department)

ReportingInternal
Investigation
Committee* Established when it
is determined that amatter seriously
impacts management

Reporting

SBSH Board of
Directors

Request for
Investigation

Reporting and Instruction

SBS Group CSR Promotion Committee

SBS GROUP BUSINESS & CSR REPORT 2020

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GovernanceRisk management
Crisis Management Framework

Development of an Intra-Group Emergency Contact

With the SBS Group Risk Management Meeting playing acentral role, information is shared on crisis management mattersunder the jurisdiction of each meeting body. When a determination is made that a crisis has occurred, a company-wide response
is initiated in accordance with the Crisis Management Manual.

Network

Main Crisis Matters

Developing Site Information and Sharing Hazard Risks●

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,●

An emergency contact structure and emergency contact
network is maintained and managed to confirm the safety of
employees and share site damage reports as quickly as possible
in the event of an emergency, facilitating business continuity.

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 themeasures taken to address issues and facilitates coordination
with nearby business sites.
* Government-issued hazard maps are used.

fraudulent accounting or inadequate information management

Ensuring Driver Safety

Disaster Response Management (Business Continuity Plan)

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

Natural disasters such as major earthquakes

Risk Management
Meeting

Transportation Safety Promotion Meeting
Compliance Meeting
Information Security Promotion Meeting

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 andalternate sites during an emergency, coordinating informationsuch 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.

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
SBS Holdings (based in Sumida-ku, Tokyo) has been certified
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 of various
facilities allowing employees to take refuge in the offices. SBS
Holdings is also part of disaster prevention cooperative agreements with Sumida-ku and non-governmental organizations.

Information Security
The SBS Group recognizes that appropriately protecting
and managing 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 risks.

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

Information Security Governance
The SBS Group has established an information security
governance framework through which it strives to maintaina standard 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, but alsoplan and implement prevention, education and awareness-raisingefforts during normal times to control security management
across the Group.

SBS Group Information Security Governance

1. We will observe laws, government-issued guidelines and othernorms related to information security.
2. We will clarify responsibilities related to information security andCSR Promotion Committee

establish 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 andawareness-raising related to information security.

Protection from Threats
We have installed anti-virus tools that use artificial intelligence(AI) to prepare against unknown threats. We have also put in placenext-generation firewalls in an effort to reinforce defenses against
attacks from the inside and outside alike.

Responding to Vulnerabilities
By introducing a security operation center (SOC) service, we haveenhanced monitoring and checking functions. We also perform
inspections of public server vulnerabilities and perform vulnerability
tests on the necessary servers in an effort to maintain safety.

Information
Sharing(Chairperson: President of the SBS Group)
Periodic Reporting

SBS Group Information Security Promotion Meeting(Chairperson: CIO)
Planning andProposal of Meaures

Determination

Planning Subcommittee
Auditing andMonitoring

ReportingExecution

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 various measures

Education and Awareness-raising● Seminars

We offer purpose-built curricula
for information security personnel at various organizational
levels and Group companies.

Fiscal 2019seminarattendees295● e-Learning

We conduct regular awareness-raising activities, including requiring employees
across the Group to undergoe-learning training once a
year.

Fiscal 2019seminarattendees

4,760● Investigating

Third-Party Verification
We periodically commission management reviews by specialist
information security firms to improve the level and quality of our
information security management.

Actual Conditions Using Simulated Emails ofTargeted Attacks

Follow-ups (targeted training, etc.) will be conducted based on the
results in an effort to raise literacy levels regarding these threats.

SBS GROUP BUSINESS & CSR REPORT 2020

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46

CSR Data

CO2 Emissions

Water Usage

CO2 (t)Emissions per Unit of Net Sales

120,000■Facilities

100,000■Vehicles■Emissions per Unit of Net Sales

80,00060,00040,00020,000
0

2015

2016

2017

2018

2019

Facilities

17,347

17,412

16,47522,22326,090

Vehicles

59,46360,20461,026

68,572

65,157

Total

76,81077,61677,50190,79591,247

Emissions perunit of net sales

57.57

55.73

52.09

47.77

38.095

Consumption per Unit (per person: m )Water Resource Usage (t)2100

160,00080

140,000

8.0

60

120,000

7.0

40

100,000

6.0

20

80,0005.0

060,000■ Usage

9.0■ Consumption per Unit

2014

2015

2016

2017

2018

2019

Usage

79,68273,828

101,642

111,175

127,524

149,681Consumption
per Unit

5.66

5.20

7.01

7.45

6.71

7.72

4.0

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

Power Consumption

Copy Paper Usage

Electricity Usage (thousand kWh)

60,000■ Usage

65,000

4.0■ Consumption per Unit

50,0003.5

40,0003.0

30,0002.5

20,000

Copy Paper Usage (thousand sheets)

Consumption per Unit (per person: thousand kWh)

2014

2015

2016

2017

2018

2019

Usage

35,52832,42433,40532,75444,74052,264

Consumption
per Unit

2.52

2.28

2.30

2.19

2.35

2.70

3,500

■ Consumption per Unit

55,0003,300

45,0003,100

35,0002,900

25,0002,700

15,000

2.0

Number of Eco-Friendly Vehicles Introduced

2014

2015

2016

2017

2018

2019

Usage

41,191

41,29546,04944,20559,25153,685

Consumption
per Unit

2,924

2,909

3,173

2,964

3,116

2,770

2,500

Status of Environmental Certifications Acquired(as of the end of fiscal 2019)(Unit: vehicles)

Vehicle Type■ Usage

Consumption per Unit (per person: sheets)

Number of Vehicles

Vehicles complying with new long-term emission regulations(as of the end of fiscal 2019)

Company Name
Total
(number of business sites with certification)

Certification

3,349

SBS Logicom (3), SBS Flec (1)SBS Freight Service (15), SBS Zentsu (5)SBS Sokuhai Support (2)SBS Ricoh Logistics (15)
SBS San-Ai Logistics Higashinihon (8)SBS San-Ai Logistics Kanto (4)SBS San-Ai Logistics Tokyo (6)SBS San-Ai Logistics Chubu (2)SBS San-Ai Logistics Kansai (4)SBS San-Ai Logistics Kyushu (3)68Green Management
Certification

SBS Logicom (4)4

GPN Certification

SBS Logicom

1

215

Hybrid vehicles
CNG vehicles

19

LPG vehicles

368

Electric Vehicles (Commercial Vans)

4
3,955

(Total Low Pollution Vehicles

ISO14001(environmental
management systems)

Reference: Status of air pollutants released by all Group vehicles
NOx (nitrogen oxides) > down 10.93% compared with the previous year
PM (particulate matter) > down 11.72% compared with the previous year

(Green Purchasing Network)* Certified as a delivery service for the Eco Product Net

Investment in the Environment(Unit: million yen)

Investment

Details

2014

2015

2016

2017

2018

2019

Vehicle-related investments

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

2,960

2,830

3,250

3,616

3,791

3,055

Improved fuel efficiency (eco and safe-driving training, etc.)

2

2

2

1

3

1

Investments related to improved
Demand monitoring and energy-efficient lighting, etc.
energy savings at facilities

141

72

9

35

45

131

Investments in global
environmental conservation

Solar power generation, etc.

629

223

0

13

6

6

Environmental management

Environmental management registration and management
activities, etc.

3

3

8

6

3

3

Environmental communication

Internal and external awareness-raising, creation ofreporting materials, etc.

4

5

5

6

6

6

3,739

3,135

3,274

3,677

3,854

3,202

Total

SBS Sokuhai Support Waste Processing
Logistics Handling Volume (fiscal 2019)

Quantity of Renewable Energy Delivered (as of the end of fiscal 2019)
Generating
Capacity(kW)

Facility Name

Generating
Capacity(kW)

Facility Name

514 Takasaki Sales Office2,826 Odawara Sales Branch

Noda Yoshiharu Logistics Center
Shibayama Solar Power Plant(unit: t)

Total Processing
Volume(SBS Group volume)

Item Name

161

Waste plastics

5,007

(401)

210

Recycled plastics

801

(64)

Kawagoe Logistics Center

830 Nagatsuta Logistics Center

935

Scrap metal

1,520

(31)

Nishinihon Logistics Center(Kyotanabe)

617

Toyohashi Logistics Center

221

Waste wood

509

(139)

Shin-Sugita Logistics Center

1,072

980

(045)

Shibayama No. 2 Solar Power Plant

710 Shin-Tokorozawa Logistics Facility

940

8,817

(680)

Kimitsu Branch

268 Nanko Logistics Center

1,490

Yoshikawa Branch

223 Total

11,017

Paper and other waste
Total

G-mark Certification Status (as of the end of fiscal 2019)
Number of newly
certified businesssites

Number ofbusiness sites withexisting certification

Total number ofG-mark-certified
business sites

Number of
G-mark-eligible
business sites

SBS Ricoh Logistics

-

21

21

21

100%

SBS Logicom

2

33

35

37

94.60%SBS Freight Service

-

14

14

14

100%

SBS Flecnet

2

21

23

25

92.00%SBS Zentsu

5

56

61

77

79.20%SBS Sokuhai Support

-

8

8

8

100%

SBS Group Total

9

153

162

182

89.00%

Company Name

G-markcertification
rate

Certification rate of nationwide truck transportation business sites: 30.5% (figure as of December 13, 2019 * from the website of the Japan Trucking Association)

Status of Human Resource Development Initiatives: SBS Group Training Results (as of the end of fiscal 2019) (Unit: number of employees)
Tiered Training

Theme-specific Training

Departmental Manager Training 166 Open Seminars

Specialist Theme Training

Support for Self-Improvement

278 Harassment Training (for Managers and Supervisors) 109 Correspondence Courses

221

61 Eco and Safe-driving Training

19

Manager Advanced Training

23 Training for Mid-Career HiresManager Basic Training

30 Mid-Career Hire Follow-up Training 18 Safe Driving Training Sessions (Truck)

73 TOEIC Test

51

Supervisor Advanced Training

32 OJT Leader Development

29 Business Career Certification

115

Supervisor Basic Training

39 Site Manager Development Training S1 62 Driver contests

29

Mid-career Employees

115 Site Manager Development Training S2 15 Forklift Operator Contests

16

Third-year Employees

36 English Skills Improvement (Group Training)

Follow-up Training for New Employees 70 English Skills Improvement (e-Learning)

70 e-Learning

18 Safe Operation Training Sessions (Forklift)

7 Operation Manager Examination Preparation 156
1 Operation Manager Skill Improvement Training

51

All 37 Subjects

New Employee Training (General) 84 Business Career Certification Exam Preparation 12 Operational manager basic classes

52

Actual Participants: 7,173

Site Leader Enhancement Training 23

Operational manager general classes

91

First-aid Classes

28

Health Officer Examination Preparation

13

Information Security (Group Training)

96

Information Security (e-Learning) 4760

Number of consultations fielded by the
consultation hotline* (as of the end of fiscal 2019)

Status of Quality-Related Certifications Acquired (as of the end of fiscal 2019)
Certification

Company Name (number of business sites with certification)

Total

Details of Consultations

ISO9001

SBS Flec (35) SBS Flecnet (28) SBS Freight Service (15)SBS Zentsu (17) SBS San-Ai Logistics Tokyo (6)101Consultations regarding laws,
regulations and internal rules

48

Consultations regarding
interpersonal relationships in
the workplace

41(Quality Management Systems)

ISO27001(Information Security
Management Systems)

Privacy MarkSBS Logicom (3) SBS Sokuhai Support (2) SBS Ricoh Logistics (24)
SBS San-Ai Logistics Higashinihon (12) SBS San-Ai Logistics Kanto (10)
SBS San-Ai Logistics Tokyo (6) SBS San-Ai Logistics Chubu (12) 93
SBS San-Ai Logistics Kansai (15) SBS San-Ai Logistics Kyushu (9)SBS Staff SBS Freight Service Marketing Partner

4

JAS Organic Agricultural SBS Zentsu (2)Product Subdivider
Certification

2

SBS Logicom

1

Relocation Safety Mark

Number ofConsultations

OthersTotal

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

SBS GROUP BUSINESS & CSR REPORT 2020

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48

Corporate Profile and Stock Information

Corporate Profile* As of December 31, 2019

Company NameSBS Holdings, Inc.

Representative Director

Masahiko Kamata

FoundedDecember 16, 1987

Paid-in Capital

3,920.75 million yen

Net Sales

255.5 billion yen (consolidated)* For the year ended December 31, 2019

Head Office

4-1-3 Taihei, Sumida-ku, Tokyo 130-0012, Japan
Tel: +81-3-3829-2222 (main switchboard)
Fax: +81-3-3829-2822

Lines of Business

Logistics business, real estate business,marketing business, human resources business, etc.

Consolidated Subsidiaries
SBS Ricoh Logistics System Co., Ltd.
SBS San-Ai Logistics Higashinihon Co., Ltd.
SBS San-Ai Logistics Kanto Co., Ltd.
SBS San-Ai Logistics Tokyo Co., Ltd
SBS San-Ai Logistics Chubu Co., Ltd.
SBS San-Ai Logistics Kansai Co., Ltd.
SBS San-Ai Logistics Kyushu Co., Ltd.
RICOH LOGISTICS CORPORATIONRICOH INTERNATIONAL LOGISTICS (H.K) Ltd
RICOH INTERNATIONAL FREIGHT FORWARDING (SHENZHEN) CO., LTD.
SBS Logicom Co., Ltd.
SBS Freight Service Co., Ltd.
SBS Logicom Kanto Co., Ltd.

Representative Director

Masahiko Kamata

Senior Director

Kenichi Iriyama

Director

Masato Taiji

SBS Flec Co., Ltd
SBS Flecnet Co., Ltd.

Director

Katsuhisa Wakamatsu

SBS Zentsu Co., Ltd

Director

Gen Kato

SBS Sokuhai Support Co., Ltd.

Director

Jiro Iwasaki

SBS Staff Co., Ltd.

Director

Tetsuya Sekimoto

SBS Finance Co., Ltd

Director

Shuichi Hoshi

Full-Time Audit & Supervisory Board Member

Yasuhiro Yamashita

SBS Asset Management Co., Ltd.
LMAX Co., Ltd.

Full-Time Audit & Supervisory Board Member

Koki Kakehashi

Marketing Partner, Inc.

Audit & Supervisory Board Member

Masato Matsumoto

Audit & Supervisory Board Member

Masahito Takeda

SBS Logistics Singapore Pte. Ltd

SBS Global Network Co., Ltd.

* As of March 26, 2020
* Three of the directors, Tetsuya Sekimoto, Jiro Iwasaki and Shuichi Hoshi are outside directors.
* Two of the Audit & Supervisory Board members, Masato Matsumoto and Masahito Takeda are outside
Audit & Supervisory Board members.

Stock Information
Number of shares authorized

154,705,200 shares

Number of shares issued

39,718,200 shares

Unit stock system

Yes (100 shares)

Number of shareholders

2,878

Including 75 fractional shares

Major Shareholders* As of December 31, 2019

Masahiko Kamata

14,388,400

36.22%

Japan Trustee Services Bank, Ltd. (trust account)

6,303,100

15.86%SBS Holdings Employee Share Ownership Association

1,374,700

3.46%

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

1,317,700

3.31%

SMBC TRUST BANK Designated Securities Trust

1,200,000

3.02%

TOBU Properties Co., Ltd.

954,800

2.40%

Hiroshi Date

830,900

2.09%

Government of Norway

826,400

2.08%

Junichi Ouchi

800,000

2.01%

Masaru Wasami

365,000

0.91%* The ratio of shares held against the number of shares issued is truncated after the third decimal place.

Distribution of shares by shareholder type
(number of shares issued: 39,718,200 shares)■ Individuals and others

21,693,500 shares (54.62%)■ Financial institutions

10,916,200 shares (27.49%)■ Non-Japanese corporations

4,637,900 shares (11.68%)■Japanese corporations

1,837,700 shares(4.63%)■ Securities firms

692,300 shares(1.58%)

Treasury stock

900 shares(0.00%)

Code of Behavior

Fair and Transparent
Corporate Activities

Promotion of Corporate
Governance

Ensuring Safety

We will engage in fair and transparent corporate activities in accordancewith laws, regulations and the common sense of society.
We will take a resolute stance against antisocial activities and forces.

We will actively disclose information to shareholders and society, andenhance management transparency.
We will respond seriously to proposals regarding management
improvements and similar matters, and strive to achieve open
management with respect to shareholders and society.

We regard being safe with zero accidents as our most importantmission, and will make every effort to ensure safety with an awarenessof our social responsibility and role.
We will observe rules, remain faithful to basic requirements, enhanceknowledge, techniques and skills, and strive to cultivate a culture that
requires safety as essential.

Social Contribution andConsideration of theWith an awareness of our responsibilities as a good corporate citizen,
we will actively contribute to society through our corporate activities.

Environment

As a citizen of the Earth, we will pay attention to environmental issues
and pass on a healthy global environment to those who come afterus.

Customer-First Principle

We will adopt a customer-first perspective and always act in goodfaith 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.

Compliance with Laws
and Regulations

Development of a Fulfilling
Workplace

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, andproperly observe the regulations, rules and manners to be followed in
executing operations.

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 workplacecommunication to ensure a safe and pleasant workplace environment.

SBS GROUP BUSINESS & CSR REPORT 2020

49

50

Contact for Inquiries
CSR Promotion Department, SBS Holdings, Inc.
4-1-3 Taihei, Sumida-ku, Tokyo 130-0012, Japan
Tel: +81-3-3829-2367

Fax: +81-3-3829-2822

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