SANGO Group Report

2021

Contact:
Corporate Planning Division ESG Promotion Section, Sango Co., Ltd.
1-3-1 Mutsuno, Atsuta-ku, Nagoya-shi, Aichi-ken, 456-0023
TEL: 052-882-1301 FAX: 052-872-6885

https://www.sango.jp/

Cover photo:Students from a nearby elementary school participatingin the harvest of rice grown at the head officeCorporate Profile
An automotive parts manufacturer supporting the development of
all countries and regions

Outline (as of March 31, 2021)■ Head office
1-3-1 Mutsuno, Atsuta-ku, Nagoya-shi, Aichi-ken, 456-0023
TEL: 052-882-0035 FAX: 052-882-3562[ECO35 Contact] TEL: 052-882-3575 FAX: 052-882-3562

Main productsCompany name

Sango Co., Ltd.

Mufflers, exhaust systems, exhaust manifolds, vehicle body products,

Representative

President Kozo Tsunekawa

door impact beams, other automotive parts, cold forged products, cold finished steel bars,

Head office

1-3-1 Mutsuno, Atsuta-ku, Nagoya-shi, Aichi-ken

FoundedJune 1, 1928

drawn pipes, carbon steel pipes for mechanical structures,

Incorporated

June 1, 1950

Capital

608 million yen

Sales

Non-consolidated gross sales: 209.6 billion yen

machined / ground steel bar products
History
Jun. 1928

Founded Tsunekawa Ironworks. Began stamping businessSep. 1934

Began business relationships with Toyoda Automatic Loom Works, Ltd.

Aug. 1937

Began business relationships with Toyota Motor Corporation

Jun. 1950

Incorporated to form Sango Co., Ltd.

Sep. 1950

Established Takakura Plant (former Nagoya Plant, current Head Office)

MUFG Bank, Ltd., Sumitomo Mitsui Banking Corporation,

Mar. 1954

Commenced production of the muffler and exhaust system

Mizuho Bank, Ltd., Bank of Nagoya, Ltd.

May 1962

Established the muffler and exhaust system laboratory at Nagoya Plant

Aug. 1967

Established Miyoshi Plant (plant specializing in cold finished steel bars)

Nov. 1973

Completed the engineering and technical research center at the Toyota Plant
Introduced the Toyota Production System in Sango operations

Consolidated gross sales: 420.8 billion yen■ Plants

Eight plants in central Japan

Non-consolidated: 2,676 Consolidated: 7,106

Number of
employees

Main Banks

Toyota Technical Center + R&D Center
Established in June 1963
3-1 Konosu-cho, Toyota-shi, Aichi-ken, 471-0836
TEL: 0565-28-3535 (main) FAX: 0565-28-9080

Yawatayama Plant + R&D Center

Established in May 1990
5-35 Yawatayama, Miyoshi-cho, Miyoshi-shi,
Aichi-ken, 470-0224
TEL: 0561-32-3501 (main) FAX: 0561-32-0235

Miyoshi Plant

Established in August 1967
47 Inoguchi, Miyoshi-cho, Miyoshi-shi, Aichi-ken,
470-0224
TEL: 0561-32-3511 (main) FAX: 0561-34-0157

No. 3 Miyoshi Plant

Established in August 2002
63 Ikemorida, Miyoshi-cho, Miyoshi-shi, Aichi-ken,
470-0224
TEL: 0561-33-3595 (main) FAX: 0561-33-3594

Fukuta Plant

Established in August 1973
1-1 Miyashita, Fukuta-cho, Miyoshi-shi, Aichi-ken,
470-0294
TEL: 0561-34-0035 (main) FAX: 0561-34-1240

Inabe Plant

Established in March 2008
1-1 Fujigaoka, Fujiwara-cho, Iinabe-shi, Mie-ken,
511-0508
TEL: 0594-46-5135 (main) FAX: 0594-46-3560

Customers

Toyohashi Plant

Established in December 1986
3-33 Akemi-cho, Toyohashi-shi, Aichi-ken, 441-8074
TEL: 0532-23-3515 (main) FAX: 0532-23-3519

Toyota Motor Corporation,

Toyota Industries Corporation,

May 1976

Hino Motors, Ltd.,JTEKT Corporation,

Jan. 1987

Daihatsu Motor Co., Ltd.,KYB Corporation,

Arvin Sango, Inc., a joint venture with Arvin Industries, was foundedin the United States (started overseas operations)

Nissan Motor Co., Ltd.,

Toyota Tsusho Corporation,

Aug. 1994

Built the Technical Center at Yawatayama Plant

Mitsubishi Motors Corporation,

Sumitomo Corporation,

Isuzu Motors, Ltd.,Asai Sangyo Co., Ltd.,

Nov. 2008

Completed the Muffler Museum at the head office (formerly ECO35)

Subaru Corporation,

Metal One Corporation,

Jun. 2015

Mazda Motor Corporation,

Canox Corporation,

Built the 2nd Technical Center at Sango's Toyota Technical Center(former Toyota Plant)

May 2016

Built the Guangzhou Sango R&D Center in China

Oct. 2017

Built the ASI Technical Center in the United States(random order)

Komeno Plant

Established in March 2002
2438-1 Kamiaiba, Fujiwara-cho, Inabe-shi, Mie-ken,
511-0502
TEL: 0594-46-8635 (main) FAX: 0594-46-8636■ Domestic and Overseas Companies

Sales (Consolidated)

Secondary steel processing 9%(Billion yen)

Asia andAustralia

5,000
A
■

3,802

4,000

3,880

4,045

4,019

8%

4,208

Sales
composition bybusiness field*

3,000
A Sango Hokkaido Co., Ltd. ■B Sango Kanto Co., Ltd.
■
Established in February 2007
41-2 Masago-cho, Tomakomai-shi,
Hokkaido, 059-1373
TEL: 0144-51-5135

Established in November 2008
1100-5 Hanya, Shimotsuma-shi,
Ibaraki-ken, 304-0005
TEL: 0296-45-0035

C Sanpuku Co., Ltd.
■

Established in January 2003
185-8 Koishihara, Oaza, Buzen-shi,
Fukuoka-ken, 828-0044
TEL: 0979-84-0735

SE Center

Established in October 2018
Shinjuku Mitsui Building No. 2,
Room No. 1606, 3-2-11 Nishishinjuku,
Shinjuku-ku, Tokyo, 160-0023
TEL: 03-5909-3935
FAX: 03-3347-1135

D Sango Technical Research■Sales
composition byregion*2,000

Institute10
Established in April 201417-12 Sakurada-cho, Atsuta-ku, Nagoya-shi,
Aichi-ken, 456-0004
TEL: 052-884-3531
C■

China 17%

B
■

D
■

Japan

49%

1,000

Europe0

Automobile parts 91%
2016

2017

2018

2019

2020

26%

* Results for Sango Co., Ltd. and consolidated subsidiaries for FY 2020.

8

9

1

7

Turkey (STI)Countries where technical assistance isprovided to foreign companies

6

Sango Turkey, Inc. (TUR)
Established in March 2002

5
3
2

India (SIAP)

MexicoMalaysia

Portugal

BrazilIndonesia

Spain

Argentina

TaiwanSouth Africa

Thailand

UK

India

Czech Republic

Canada (ASCI)

10Arvin Sango Canada, Inc. (CAN)
Established in June 2011

USA (5 plants) (ASI)

Arvin Sango, Inc. (USA) + R&D Center
Established in January 1987

Sango India Automotive Parts Pvt. Ltd. (IND)
Established in December 2012

4

Thailand (STEM)

Sango Thai Engineering & ManufacturingCo., Ltd. (THA)
Established in July 2020

1

Indonesia (SID)

PT. Sango Indonesia (IDN)
Established in April 2012

China Guangzhou (GSC)

Guangzhou Sango Automotive Parts
Co., Ltd. (CHN) + R&D Center
Established in August 2004

China Xiangyang (XSC)

Xiangyang Sango Automotive Parts
Co., Ltd. (CHN)
Established in April 2012

China Tianjin (TSC)

Tianjin Sango Automotive Parts
Co., Ltd. (CHN)
Established in April 2003

10 Mexico (SAM)■

Sango Auto Parts Mexico, S.A. de C.V.
(MEX)
Established in December 20142

Product Overview
Exhaust system[Exhaust manifolds]

Single wall tubular manifolds[Emission control devices][Mufflers][Exhaust system parts][Heat recovery devices]

Air gap manifolds

Catalytic converters (spin formed)

Urea SCR system

Spin-formed sub-mufflers

Dual mode mufflers(internal valve)

Exhaust control valves

Heat collectors

Roof side rails

Floor cross members

Radiator supports

Front floor reinforcements

Door impact beams

Cross members

Door hinges

Differential intermediate shafts

Propeller shafts

Carbon steel pipes for mechanicalstructure purposes

Cold finished bars (drawn)

Steel wire for cold heading andcold extruding (drawn)

Cold forged products

Body, chassis

A-pillars

Drive system

Reduction gears

Secondary steel

Cold finished bars

products manufactured with cutting-edge
processing technologies
34Special FeatureThinking about the present and future of Sango

CSR = What is the social responsibility of Sango

Even as the world changes ininfinite ways, we will survive
and stay profitable,
and we will contribute to theworld of manufacturing.

As described in our company creed and corporate principles,

improper use of authority, or people working according to their

Sango's mission is to "contribute to society by developing ourown individual values, which in turn, could lead to a decline inhuman resources, manufacturing skills, and environmental

Sango's organizational capabilities.

policy." COVID-19 has seriously damaged the economy and

Therefore, we have decided to review the division of duties fordrastically changed our lifestyle. However, the daily corporate

the purpose of sound organizational management, humanactivities that embody our mission remain unchanged as ourresource development, improving manufacturing efficiency, andsocial responsibility.

risk management. As president of Sango, the purpose of the

One of our FY 2020 management initiatives is to begin amanagement education that I conducted at the beginning was

review of the division of duties. Since its founding, Sango has

to ask all departments the following question: "The mission of

had a family-like bond at its roots, and we should preserve thisthe company is clear. So what is your department's mission?"

corporate culture. However, if it is only our family-like

The first step for Sango to fulfill its social responsibilities is foratmosphere that takes the lead, this could easily result in suchits employees to clearly recognize his or her own mission andproblems as vagueness in where responsibility lies, rampantrole.

Formulating a mid-term vision as we look to a long-term vision"Long-term 2030" is a management vision that was formulated
in FY 2018, and we made subtle steps forward with it last fiscal
year. However, the COVID-19 crisis is causing the majority ofcompanies to struggle with their long-term outlooks. With thisin mind, Sango formulated the "Mid-Term Business Plan 2025"
that proposes goals to achieve after five years—it has ashorter time axis to allow for course correction in response tochanges, and enables a more concrete Long-term 2030, which
was relatively abstract.
For the 2025 Mid-term Business Plan, I would like all groupcompanies to know that it is essential to generate profits first
and to strengthen the company's business foundation as thepremise for all other activities. Keeping an eye towards the

President

near future, let's continue the "Company-wide earnings

Kozo Tsunekawa
Company Creed

Three intertwined elements of prosperity

Hierarchy of Our Policies
and Principles

Environmental
PolicyManufacturing
Skill
Development

Human
Resource
Development

5

Family-like bond Teamwork

Long-term 2030

Mid-Term Management Plan 2025

Fiscal year policies

Basic stancetechnology, such as air-conditioning pipes

Maintaining existing business and building new business growth■ Completion and operation of the SAM Plant in Mexico■ Expansion of sales to new customers
Business reform■ Based on a newly clarified division of duties, threeelements of education: company planning (Hoshin),organizational HR, and profit planning■ Distribution of PCs to plants, web conferencing systems,
and improvement of the IT environment for
telecommuting, and morecommunity, and to become a company that enables the employees of Sango to play an active role (5).
To this end, while flexibly responding to changes in business conditions, we will build a solid earnings
base (3) and manufacturing capabilities ((2) and (4))" to grow into a sustainable company ((1) to (5)).

CSR Policy

Corporate Principles
Creation of
Sango products that
contribute to the global society■ Development of motor shafts, etc. for electrification■ New products that make use of pipe processing

We aim to identify the path and shape of our business for the future (1), contribute to society and the

Corporate Principles

With a steadfast commitment to
the preservation of our family-likebond and teamwork, and thedevelopment of our humanresources, manufacturing skills,
and environmental policy, we
shall persevere in our challenge
to create Sango products that
contribute to the global society.

New approaches

Mid-Term Business Plan 2025

CompanyCreedfor our company and for ourselves.

strive towards our goals together.

SANGO WAY (Code of conduct)

Prosperity for our country,

improvement activities" that we launched in 2020, as we all[Progress of long-term 2030](1) Reform business structureManagement policy /Basic outline(Enhancements for 2025)(2) Strengthen engineering and R&D capabilities(3) Reform the earnings structure(4) Promote manufacturing innovations that ensure safety and quality(5) Enhance human resource development and workplace capabilities

6Special project

Dialogue

By looking objectively
at Sango's CSR,
we are considering our future andPresidentsocial raison d'etre.

Kozo Tsunekawa

Professor, Faculty of Law,
Politics and Economics, Chiba University
External director of Sango

Kaoru Shimizu

outside of Istanbul, and then all of us gathered acorns. "We

Hokkaido for several years, handle QC activities. We had

and educate employees with the profits gained from actual

plant these around the plant," he said.

good results when there was a boost in internal awareness.

worksite operations, and then carry this on to start the next

Shimizu: Sango is a company that is fully implementing CSR

In this way, Sango has been working around the world toI think it was a good example of acceleration occurring if

job.

initiatives in terms of both quality and quantity. As far as I can"plant trees and restore nature," and I think the motivation

there was an overwhelming driving force.

Therefore, there is soundness in the assumption thatsee, top management has led the CSR initiatives

behind these actions is based on nothing but passion.

People in the field support the manufacturing of Sango,"compliance and governance are in place, and profits are

What does an overview of Sango's CSR reveal?

themselves.

Tsunekawa: There's no greater sense of purpose, though.

so I was pleased with the praise regarding the production

made by actual worksite operations," and there are also

The location of the head office is on the site of an old plant.

Shimizu: Employees don't need to be very aware of thesite.

social contribution activities such as tree planting. These

When it was decided to close the plant, there were proposals

moment when they gather seeds and plant trees. They'll see

Shimizu: That is one of the positive results achieved by actual

could be said to be two important pillars.

to sell the site or build commercial facilities, but President

their president working next to them and feel a sense ofworksite operations. It is often thought that CSR is a different

Tsunekawa: I see. Eiichi Shibusawa wrote about similar

Tsunekawa remained steadfast in his view that, "No, we will

teamwork. They'll then realize that "This was the purpose theapproach from actual worksite operations, but corporate

matters in his book "Rongo (Analects of Confucius) andbuild our own facilities that contribute to environmental

whole time" only after seeing the trees that grow up oversocial responsibility is primarily based on the pursuit of profit.

Soroban (abacus)." "Human beings need to refine theirconservation." No one could have imagined it at the time, buttime. This is Sango's CSR, as repetition of these activities is

To fully carry out CSR is to implement operations to employ

character and pursue their profits through capitalism."in the 15 years since then, the trees everyone planted havepassed on vertically through the hierarchy and spreads

grown thickly to create the "Sango Forest." This wooded area

horizontally as well.

is home to wild ducks and fireflies, and students from local"Hard work with uncertainty on what it will accomplish in theelementary schools come to experience rice planting. Seeing

future will benefit someone over the years." It's similar to the

how this land has changed, I can see how this was aessence of "learning," which I teach at university.

practical implementation of CSR.
Tsunekawa: We also asked you to take part in an inspection

CSR Policy

To be a company
that contributes to

Impressive ESG activities in FY 2020

society, is trusted,of our overseas companies.

Tsunekawa: The WAY2 activities, which won the "gold prize atand grows

Shimizu: I remember being impressed when I visited thethe QC Circle Championship" had quite an impact.

company in Turkey about eight years ago. After satisfactorily

The Tokai area is the backyard of TOYOTA, so thesustainably

completing a plant tour on a Saturday, the president ofcompetition was tough. Winning the gold prize for a first-time

Sango Turkey, Inc. then said, "We will meet at 7 a.m.

entry was an outstanding achievement.

tomorrow." I wondered what was going on. We went to a park

We requested that a QC professional who has been at Sango

E

S

G

Environment

SocialGovernance

Environmental challenge

Higher customer satisfaction

Corporate governance

Human-friendly workplace

Participation in local communities

ComplianceThree pillars
supporting the policy
Fundamental
approaches
Relations withstakeholders

Employees

Suppliers

Customers● A range of work-styles toaccommodate member
diversity and lifestyles● Development of a safe work
environment where
everyone can work withpeace of mind

● Striving for mutual
development through strong
partnerships built on trustand fairness● Delivering satisfaction that
goes beyond customer
expectations through safe,
high-quality products● Development of productsthat are friendly to people
and the environment

Local communities● Actively participating in social
contribution activities as a good
corporate citizen andcommunicating with the local
community through dialog● Promoting manufacturing that isfriendly to the local environment

Major initiatives for FY 2020 based on ESG *Details of each initiative are available on the following pages

E

S

Tree planting

7

Best Practice CertificationG

WAY2 activities

Certification of Health andProductivity Management Organization

Survey for compliance awarenessWorkshop for preventing power harassment

8Dialogue

Ideas and experiences obtained from the COVID-19 crisis

go, we would like to start by connecting the head office andwas able to view us objectively from outside the company.

linked to society and the world.

the Fukuta plant remotely.

Shimizu: Sango is a rare company in that it has no debt andI have made the decision that Sango will contribute tosociety in an everlasting way as a sustainable company.

Another challenge triggered by the COVID-19 crisis waspossesses a number of assets. Even throughout themask production at Sango for the first time in our history.

COVID-19 crisis, Sango hasn't had to resort to going to the

It would have cost us billions of yen to buy the appropriatebanks for help. However that's why now, after some of theseequipment, so in the end, we decided to manufacture masks

assets have been depleted during the crisis, they will need to

the Sango way with the equipment we had, which we

be built up again. It's never easy for companies to survive.

achieved after some hardship. With the lack of masks in

Tsunekawa: For a sustainable society, it is necessary for

2020, we distributed 30 masks each to all of our employees.

Sango to survive, isn't it. Even for the SDGs that have been

Other companies also asked to purchase some of our masks

frequently mentioned recently, Sango would like to be

for their employees. We hope that this valuable experience

constantly aware that its corporate activities contribute towill be useful in the future of Sango.

them, and that the daily labor and activities it carries out are

Shimizu: In FY 2020, the world is trending toward DX*1, as

The value of being a sustainable company

remote operations have rapidly advanced both at work and in

Tsunekawa: About this time a year ago, our sales declined byschool.

approximately 40% together with the decline in domestic

However, there's no need to digitalize everything, although it

vehicle production. It was an unprecedented crisis. At that

does make sense not to fear adopting only those things thattime, Mr. Shimizu, our external director, said, "President

make life easier. In Sango's case, for example, you could

Tsunekawa, Sango is a company with assets." His words

reduce costs if you could provide technical guidance tohelped me a little, because it is my role to protect theoverseas companies online.

interests of our employees. Up until then, I thought it was

Tsunekawa: Yes, that has been the plan. Since there arenormal for a company to have assets. As such, it was verysignificant hurdles to starting on a global scale from the getvaluable once again to receive advice from a person who

In an ever-changing environment,
Sango continues to contributeas a member of society in a waythat is true to itself.

*1 DX: Digital transformation. The concept that continuously evolving digitalization enriches people's lives

Comment：President Tsunekawa

Manufacture of Sango's masks

Change ourselves, change our company.

A project that was launched amid a serious lack ofmasks.
We achieved in-house mask production of 90,000 units
per month. Everything was done from scratch.

Mask with SANGO's logo

01

Individual growth

Have a sense of responsibility for the work one has been assigned,
and take work quality and improvements a step further, regardlessof title or age.

02

Taking on challenges

To have each and every one of us change our mindset and take onchallenges for new initiatives to overcome these difficulties, despite
the surrounding environment being very harsh.

03

Teamwork

To create a cross-departmental team regardless of hierarchicalrelationships, and to put systems in place for cooperative work to
overcome difficulties. Among these initiatives, to promote
Members involved in the project9

Special project

Sango's own mask production equipment

communication to unify Sango.

In the automotive industry, the CASE wave has
surged ahead, the COVID-19 crisis has occurred on a
global scale, and our work environment has changed
completely in FY 2020. Now, with everyone having to
make changes, "Change ourselves, change ourcompany" is the message I gave to my employees.
This is a good opportunity to change both the values
we have built and the way we are used to carryingout our duties. Division of duties and earnings
improvement activities are also part of this effort.
However, even though people understand that they
have to change themselves, they back down whenthose changes will have an impact on their position
and work. I want them to overcome this hurdle.
"Change" is not a matter of theory, rather it is an"actual change in words and actions." Once achange in behavior takes root, the future of thecompany will naturally become brighter.
10

CSR Activity ReportE

ESG Environment

Approach for environment
CSR stands for

CSR stands for "Corporate Social Responsibility." Companies are members of

C : Corporate

society, and they are deeply involved with and constantly influencing many

S : Social

people. This includes employees, customers, and local residents, as well as

R : Responsibility

companies not only pursue profits, but also take responsibility in consideration

suppliers located domestically and overseas. There is the concept that

Long-term environmental vision: Sango Environmental Challenge 2050
Towards a better global environment in 2050, the Sango Group will strive for a balance in economic growth and preservation of the
global environment. For the realization of a sustainable society, the Sango Group will work on 5 challenges aimed at creating 3
areas of value.
Reduction ofenvironmental burdens
through business activities

CO2of their impact on society. The objective of companies engaging in CSR is togain social trust.

Environmentally responsible
production sites

5th Challenge
Environment
・Reduction of CO2・Tree planting,etc.

S

Governance・Work style reform
・Promotion of diversity,
etc.

G

N

CH

K
EC

A

ESG is an acronym for Environment, Social, and Governance, which are essential for

Waste

D

PurposeOverburden

ISO14001

companies to continue to grow sustainably.

4thThis is a term that is relevant to CSR.

Challenge

In 2028,300 thousand trees

To be a company that contributes to society, is trusted, and grows
sustainably

Three pillars
supporting the policy
Fundamental
approaches
Relations withstakeholders

E

S

G

Environment

SocialGovernance

Environmental challenge

Higher customer satisfaction

Corporate governance

Human-friendly workplace

Participation in local communities

Compliance

Suppliers

Customers● A range of work-styles toaccommodate member
diversity and lifestyles● Development of a safe work
environment where
everyone can work withpeace of mind

● Striving for mutual
development through strong
partnerships built on trustand fairness● Delivering satisfaction that
goes beyond customer
expectations through safe,
high-quality products● Development of productsthat are friendly to people
and the environment

Local communities● Actively participating in social
contribution activities as a good
corporate citizen andcommunicating with the local
community through dialog● Promoting manufacturing that isfriendly to the local environment

CSR is familiar to all employees of the Sango Group. As part of CSR activities, this report reports on ESG activities.
11

Development and design of highvalue-added products that contribute tocustomers' environmental values

2→ Contribute to CO₂ reduction by
improving fuel efficiency

Minimization of
new vehicle
CO2 emissions

・Utilization of exhaust heat・Weight reduction

Exhaust heatrecovery device[Consolidated management by the Sango Group (from September 2019)]

Reduction of emissions andwaste from production
activities through innovations
in manufacturing methods

Created a mid- to long-term plan for the Sango Group and commenced operations

Reduction of discharge (CO2, waste, chemical substances, water, etc.)
in all business activities

Total CO2
emissionst-CO ₂

128,56840%

reduction

Total waste

t

6,155

2030

reduction

3,624

79,487

2016

35%

2016

2030

Promoting Sango Environmental Challenge 2050 activities by the entire corporate group
The Sango Group is conducting environmental challenge activities based on
the plans below. In FY 2020, as ACTION2, we conducted a voluntary
inspection of the environmental management status of the entire corporategroup, and confirmed issues at a web conference. In FY 2021, the entire
corporate group will share the targets and plans outlined in the "1stEnvironmental Action Plan (mid- to long-term environmental action plan)*" andfurther promote Groupwide activities. (Creation of a foundation linked to
ACTION3 "Horizontal roll-out of improvement examples")[Action to strengthen activities of affiliates in Japan and overseas]

1

ACTION

Training tour
Implemented

2

ACTIONManagement status check・Energy and resource savings activities
・Brand management
・Legal compliance[Structure for promotion]

Environment Committee

Sango

Domestic affiliates

Overseas affiliates

Energy and resource savings in design and development:
Environmental Product Development Subcommittee
Energy and resource savings in production preparations:
Environmentally Innovative Production Methods Subcommittee
Energy and resource savings in manufacturing:
Environmental Impact Reduction Subcommittee* See pages 13 and 14
Implementationplans & purposes

Employees

3

2nd Challenge

350 thousand trees

3rd Challenge

Solving social problems

Development of products and technologies
that are environmentally-friendly
throughout their life
cycle, from material
procurement to design,
manufacturing, usage,
disposal, and recycling.

Minimization of
production activity emissions(CO₂, waste)company that is indispensable for society.
Currently,

5 Challenges

Creation ofa societyin harmony
with nature[Number of trees planted]

society through six initiatives that serve as the basis for the pillars, and becoming a

1st Challenge

1

Sango
Environmental
challenge
2050

4・Tree planting activities
・Biotope development activities
・Elimination of invasive species

Sango aims to make ESG the three pillars supporting its policy, contributing to local

Tree planting

Minimization oflife cycle
CO2 emissions

Establishment ofan environmental
management system

Preservation of biodiversity and protectionof our natural environment to realize asociety where humans and nature co-exist
in harmony

CSR Policy of Sango

Environmentally-friendly throughour products

5

Unevenness

AO・Fair and transparent
management
・Aggressive disclosureof information,
etc.

CT

E

SocialPreservation of
the natural environment

CO2

Contributing to the sustainability ofsociety and customers

Creation of an environmental management
system, control of environmental risks, andthe prevention of contamination in
conjunction with continuous improvement(enhanced operations and management)

PL

ESG stands for

Expansion and creation ofmarkets for products that
contribute to the environment

CO2

3

ACTION

Horizontal
roll-out of
improvement
examplesCompany environmental preservation activity (Tree planting):
Harmony with Nature Subcommittee

Function departments / function meetings(See P15 to 16 for the activities of each subcommittee.)12

ESG EnvironmentE

ESG Social

ESG Environment

Sango Group Targets in 2022: The 1st Environmental Action Plan (Mid- to Long-Term Environmental Action Plan)
Category

Expansion and creation ofmarkets for products that
contribute to the environment
Reduction of environmental burdens through business activities
Preservation of
the natural environment
Reduction of environmental burdens
through business activities

13

ESG Governance

Five challenges for the "2050 Environmental Vision"

1

Initiative items for business risks and opportunities

Specific implementation matters

Challenge towards theDevelopment of products and technologies that are environmentally-friendly throughout their life cycle,
minimization of life cycle from material procurement to design, manufacturing, usage, disposal, and recycling
CO2 emissions

2

Challenge forminimization of
new vehicle CO2
emissions

3

Challenge forminimization of
production activity
emissions(CO2, waste)

4

Challenge forcreation ofa society in harmony
with nature

5

Challenge forestablishment ofan environmental
management system

Development anddesign of highvalue-added
products that
contribute tocustomers'
environmental
valuesReduction ofemissions andwaste fromproduction
activities throughinnovations in
manufacturingmethods

Preservation of
biodiversity andprotection of
our naturalenvironment torealize a society
where humans andnature co-exist inharmony

Build aconsolidated
environmental
management
system, manage
environmental risk,
and carry out
prevention andcontinuous kaizen(strengthen
operations andmanagement)

Target for FY 2022○：Target achieved△：Still some issues, but target expected to be achieved in 2022

Target for FY 2020

×：Not achieved

Results for FY 2020

Evaluation

Receive the External Environmental Promotion Award

Receive the External Environmental Promotion Award

Gave a presentation at the Final Qualifying Competition for the External
Environment Promotion Award△

Product development that contributes to top-classfuel efficiency

a. Product weight reduction
b. Development and mass-production of new products that utilize exhaust heat

Achieve 100% of each development goal
Two or more new items

Achieve 100% of each development goal
Find one or more new item(s)With regard to each development target, there are delays in achievement
for some items this fiscal year due to changes in the business environment
Development will continue towards reestablished targets to recover fromthe delay△

Product development for next-generation vehicles

c. Development and mass-production of thermal management products fornext-generation vehicles

One or more new item(s)One or more new item(s) with the prospect of transitioning
to project implementation

Of the items under consideration, one item has the prospect of transitioning
to project implementation○(1) Development of innovative low CO2 emission
production technology

d. Development of production technology to reduce CO2 emissions of newly introduced
equipment[Main reductions] ・Process consolidation / reduction
・Mfg method change (new processing method)・Improved productivity
・Shift to equipment / tooling that is simpler, slimmer, more compact
・Optimization (reduction) of weld / processing parameter・Improved operational availability of robots / equipment
・Optimization of logistics and layout

Planned CO2 emissions reduction:-40% (compared to benchmark)Note: The target value is the reduction ratio compared tothe manufacturing method in the benchmark year
(around 2013)

Planned CO2 emissions reduction:-35% (compared to benchmark)Take up reduction item in each product group (business)
and achieve:
At least 1 item

・Reduction by making equipment simple, slim, and compact :○ Exhaust systems ⇒ -71.1% (27.5 t)・Reduction achieved by reducing number of processes:○ Shaft parts ⇒ -75.4% (133 t)
・Reduction achieved by increased productivity (autonomation):○ Cross members (single component) ⇒ -46.7% (10.7 t)* Average for target projects in each product group: -63%○

(2) Development for low waste production
technologies

e. Development of production technology to reduce waste emissions of newly introduced equipment[Main reductions] ・Reduction of processing oil / cleaning fluid
・Change from hydraulic cylinder to electric system / reduce hydraulic oil
use with a servo-based system
・Reduction of waste water in the cation coating line

Planned waste reduction: -30% (compared to benchmark)Note: The target value is the reduction ratio compared tothe manufacturing method in the benchmark year
(around 2013)

Planned waste reduction: -30% (compared to benchmark)Take up reduction item in each product group (business)
and achieve:
At least 1 item

・Reduction of sludge and waste fluid by using simplified lubrication:○ Shaft parts ⇒ -100% (2.1 t)* Revised to achieve a process that does not generate waste○

f . Thorough elimination of waste when using energy▶ Activities to eliminate air leaks▶ Activities to turn off power to equipment when not in operation

Reduce power consumption to less than 50% during lunch
breaks (compared to peak power usage)(2018 benchmark was average of 68%, it was 65% in 2019)

Power consumption during lunch breaks(compared to peak power usage): 58%

Power consumption during lunch breaks (compared to peak power usage):
59% -6% reduction compared to last year△

g. Tracking of energy consumption "gentan'i" (basic consumption unit) by process and by
product and activities to reduce energy usage

Energy consumption unit (gentan'i) per product group: -5%

Track gentan'i (basic consumption units) and carry out
energy consumption reduction activities for new lines

Installation of D/B line in Fukuta Plant○

h. Introduction of energy-saving equipment with a high return on investment
i . Renewal of old equipment

Always introduce the top of class item

Scheduled equipment renewal: 22 items

Renewed equipment: 14 items

×

Promotion of the use of renewable energy

j. Study potential expansion of areas introducing renewable energy in accordance witheconomical efficiency and CO2 reduction effects

Introduce a centralized monitoring system

Collect information on panels and equipment, etc.
(Freeze put on solar power generation facility installation)

Collected information at Web exhibitions and manufacturer's briefings○

Reduction of waste in daily production activities

k. Introduction of equipment to reduce oil-containing wastewaterl. Introduction of hydrochloric acid waste treatment equipment

Oil-containing wastewater: -20%
Hydrochloric acid waste: -20%(compared to 2016)

k. Introduction of reduction equipment at Fukuta Plant
l . Verification of introduction to Inabe Plant

k. Toyohashi Plant is working on an in-house purification system forhydroforming lubricants and waste fluids
l . Began a study of investment reduction due to the long investment
recovery period of 10 years△

Reduction of water consumption and waste
in the production process

m. Study water use reduction activities, taking into account the water conditions in eachcountry and region
Promotion of effective utilization of water resources, use of stored rain water, and water
conservation

Water consumption: -3% (compared to 2017)

Investigate leaks and promote countermeasures

Investigation of leaks
Inabe Plant: -1,000 m3/month Yawatayama Plant: -800 m3/month○Management and reduction of environmentallyhazardous substances

n. Strengthening of the management of chemical substances contained in products

No prohibited substances used

No prohibited substances used

No prohibited substances used○

(1) Forest creation activities aimed at increasing theamount of CO2 absorbed / sequestered (*)(*) Amount of CO2 absorbed /sequestered is a value
calculated by the Company's calculation formula,which corresponds to CO2 absorbed by planting
trees

o. Support and guidance for the promotion of tree planting at each group company
p. Provide cooperation for the "Forest of Life 2020" Initiative
q. Study ways to cooperate with government entities in tree planting

・Total number of trees planted: 322,000
・Amount of CO2 absorbed / sequestered: 458 t (total)

・Target number of trees planted for FY 2020: 11,814 trees
Target number of trees planted in total: 300,608 trees
・Total amount of CO2 absorbed / sequestered: 357 t

・Actual result for number of trees planted in FY 2020: 9,238 trees
Actual result for total number of trees planted: 299,284 trees
・Total amount of CO2 absorbed / sequestered: 356 t

×

r. Growing of seedlings for areas affected by the Great East Japan Earthquake

・Total number of shipments: 22,000 seedlings
・Amount of CO2 absorbed / sequestered: 23.8 t (total)

・Scheduled number of shipments: 158 seedlings
・Amount of CO2 absorbed / sequestered: 0.026 t

・Actual shipments: 158 seedlings
・Amount of CO2 absorbed / sequestered: 0.026 t○(2) Conservation of the natural environment throughthe development of a biotope within the company
premisess. Promotion of conservation of the natural environment through the development of
the ECO35 biotope and rice fields
t. Promotion of conservation of the natural environment through development of the
Yawatayama biotope
u. Promotion of conservation of the natural environment through participation in activities for
the All Toyota Harmony with Nature Working Group
Conservation of Yawatayama Plant's biotope ecosystem as Yawatayama strives to be"a plant coexisting in harmony with nature"

Implement the maintenance management plans 100%

Implement the maintenance management plans 100%

Annual activity plan: 100% implemented○

Implement plan 100%

Implement plan 100%

Plan implementation 100%○

Reduction of CO2 emissions in daily production
activities(current mass production lines and infrastructure)(3) Environmental conservation activities incooperation with outside parties
Compliance with the environmental laws of different
countries and regions and implementation ofactivities to prevent environmental accidents

v. Periodic check on the status of compliance with environmental laws
w. Periodic check on the status of preparations for emergencies
x. Development of people who have environmental awareness

Zero (0) abnormalities (problems) or complaints

Zero (0) abnormalities (problems) or complaints

There was 1 abnormality / complaint(It was a minor complaint (within regulation values), and a measures weretaken)

×

Sango Group periodic audit of environmental
activities

y. Field study on of environmental activity implementation, sharing of kaizen information,
application companywide, and confirmation of effectiveness(check of activities that spans the corporate group plants in Japan and overseas)

Visit each group company once a year
Hold global environmental meeting

Visit group companies

Implemented the field survey regarding environmental activities via Web
conference(Method changed due to the impact of COVID-19)○

Promotion of environmental activities
in collaboration with business partners

z. Promotion of green procurement with all suppliers▶ Requests for establishment and operation of an environmental management system▶ Management and reduction of environmentally hazardous substances contained in materials and parts

Hold a supplier meeting once a year

Hold a supplier meeting once a year

Distributed documents to suppliers on raising awareness of chemical
substance management(Method changed due to the impact of COVID-19)○

aa. Further enhancement of the provision of environmentally related information▶ Continuing issuance of the SANGO Group Report▶ Update of the homepage
bb. Communication with government offices and local residents

・Issue the group report annually and post it on the homepage
・Hold events regarding harmony with nature with governmentand civic groups

・Issue the group report annually and post it
・Hold events three times a year

・Issued in July and posted on the homepage○

cc. External evaluations based on active disclosure of information and improvement of thecorporate image

CDP Supply Chain Program: Acquire "Rank B" for climatechange and water

Acquire "Rank B" for climate change and "Rank B" for water

Acquired "Rank B" for climate change and "Rank B" for water△

Proactive disclosure of environmental informationand enhancement of communication

14

ESG EnvironmentE

ESG Social

ESG Governance

ESG Environment

Environmental Impact
Reduction Subcommittee

Energy-saving activity to reduce power usage of equipment on standby
Due to there being day and night shifts, equipment power was always left on except on
weekends. Furthermore, power was being consumed and energy lost even when theequipment was in standby mode. Therefore, we took up "activities to switch off power for
non-operating equipment." We monitor the status of equipment operations using theinternal power monitoring system on an hourly basis, and quickly follow it up with theappropriate department if someone forgets to turn off the power during lunch breaks orafter production ends. We compile the number of times power was not switched off foreach plant and department and manage accordingly. We have also implemented
measures to prevent forgetting to switch off power by using a timer control function, andwe have also replaced the transformers for air-conditioning equipment and power
substations with more efficient ones. These steady efforts have enabled us to achieve
our CO2 reduction targets in FY 2020.

Switch off equipment power and fluorescentlights during breaks.

STEM creates a biotope

Harmony with Nature Subcommittee

The Harmony with Nature Subcommittee is making progress with creating biotopes as part of the effort to develop production plants coexistingin harmony with nature. On July 1, 2020, STEM was born as a result of the merger of YSP and STA, which were Sango group companies inThailand. To commemorate the new start, a biotope was created at Banpho plant. We have aimed to link our biotope with the nearby Toyota
Motor Thailand (TMT) Ban Pho Plant's forest, to create an environment where birds can fly between them. At the September fish release
ceremony, participants released 150 fish which included five different species. In March of the following year, we were able to confirm thenesting of the Asian golden weaver bird, a quasi-endangered species. We feel that the activities have alreadybeen a success.
A wild bird nested
in our biotope!

Every day, several yen at a time, and several
million yen each year, we are wasting moneyin electricity cost.

■ The environmental strategy of our production site was reported in a newspaper article

Asian golden
weaver bird

The Nikkan Kogyo Shimbun reported on our activities to reduce the environmental impact of production
sites. The report detailed these initiatives: activities to reduce power consumed by equipment on
standby, charging unmanned transport vehicles with the power generated by the force of water falling
into the plant cooling tower reservoir, and reusing waste water from a washing process for parts
stamped on an 800 ton press. We have also introduced activities to raise environmental awareness byplacing posters in the public places that describe the June environmental month, and writing individual
workers’ names on gloves so they will be used with care until they are worn out.
[Introduced by]

Activities to make equipment simple,
Environment Innovative Production
slim, and compact

Methods Subcommittee

By simplifying equipment structure and reducing its size, lessmaterial, such as steel, is used for components, which leads toreductions in CO2 emissions, resource depletion and waste
throughout the entire supply chain. The newly improved
equipment was used in exhaust system assembly andcompared with conventional equipment, it was lighter by about 2
tons per unit (a reduction rate of 71%), which also allowed asignificant reduction in the number of air cylinders used tooperate the equipment.

Weight (tons/unit)[Comparison of CO2 emissions]
3
2
1
0

-71%
Conventional This time

Equipment Department

Tsuyoshi Uemae (left)
Jun Watanabe (right)

15

Fish release ceremony

STEM's biotope

Erika Kochi

Development of a power generation
system utilizing windmills and otherEnvironment Productnon-automotive sectors
Development Subcommittee

To reduce CO2 emissions through improved fuel efficiency inautomobiles, in different product groups such as exhaustsystems, exhaust manifolds, and body parts, we have focusedour development on weight reduction and the use of exhaust
heat. Now we have turned our attention to reducing CO2 in the
non-automotive sector, and we are developing a Darrieus-type
wind-powered generator, which was originally developed bymembers in our 4th Pre-Management program, and we havebeen installing the generator in our plants. In addition to CAE
analysis and manufacturing technology, we are also taking on thechallenge of new electronic control technology, as we study thisas one technology potentially capable of reducing CO2.
[CO2 reduction amount]

0.054 t-CO /year
3.8 trees2* Equivalent to CO2 absorption
by 3.8 cedar trees

Awarded

Bird's nest

STEM

Uthen Intasaneha (left)
Natthakit Charuwatthanakit (middle), Kenji Sakai (right)

Sango's forest and biotope are certified as"Aichi-Nagoya Biodiversity Best Practices"
Kaoru Takano, ESG Promotion Section

As excellent initiatives promoting biodiversity, the activities for Sango's forest and the biotope conservation activities have been certified as an
example of "Aichi-Nagoya Biodiversity Best Practices". This is the title given to 20 particularly outstanding initiatives in Aichi Prefecture.
In addition, two examples of our lanceleaf tickseed elimination activities and the rice planting experience provided to elementary school
students were also selected as "Good Practices."
On October 15, an awards ceremony was held at the Aichi Prefectural
Assembly Building, where we received a commendation certificate from the
Aichi Prefectural Vice Governor and a collection of examples from the
Nagoya City Deputy Mayor. "This commendation is the result of theactivities carried out by your employees as a whole. I express my sincere
gratitude for your hard work." said Vice Governor Aoyama.

Windmill (installed at Head Office (ECO35))

Kei Inoue,

Technology Strategy Section

Wooden certificate

From the left, Deputy Mayor Ito, Department
Manager of Corporate Planning Department
Ito, and Vice Governor Aoyama

Sango's forest and biotope (Head Office (ECO35))

16

ESG EnvironmentS

ESG Social

ESG Governance

ESG Social

Awarded the gold prize at the QC Circle Championship and the Minister of Education,
Culture, Sports, Science and Technology Prize for Creativity
The Sango Group has implemented "WAY² activities" at all workplaces with the aim of revitalizing the workplaces. In FY 2020, the Inabe Plant,
Komeno Production Department's Spoma Circle participated in the "6253rd QC Circle Championship" in which the top circles selected fromthe four districts of Aichi, Shizuoka, Mie, and Gifu competed, and they won the gold prize despite Sango participating for the first time ever.
The theme was "An approach for lightening work load in visual inspections,". The new approach replaced the manual lifting of heavy sports
mufflers in inspection work by using a device that makes the inspection work easy to carry out. Invention members of the Inabe Plant—
Mr. Toru Ogawa and Mr. Yusuke Kobayashi—were also selected for the prestigious Minister of Education, Culture, Sports, Science andTechnology Prize for Creativity in the fields of science and technology.
QC Circle Championship Gold Prize

Mr. Yuki Ito and Mr. Yusuke Kobayashi from Inabe Plant

Minister of Education, Culture, Sports,
Science and Technology Prize for Creativity

Mr. Yusuke Kobayashi and Mr. Toru Ogawa from Inabe Plant

Making wooden-clad thermos bottles in a
training exercise for selected employees(Pre-Management Juku)
Pre-Management Juku conducts a training program for selected
employees who are mid-level and section managers, with the aim ofdeveloping candidates for future executive positions. FY 2020 was thesixth year for this program. With the goal of fostering personnel who
can take on new challenges while responding to the changing times,
this program provided participants with an experience outside theirnormal day-to-day work, as they spent a year working on the theme of"Creating Business based on Product Development", under the
direction of a department manager level advisor. Over the course of ayear, the students in the sixth term used Sango's core technology todevelop stainless steel thermos bottles clad in real wood (WOOD
BOTTLE), achieving prototype production and creating a businessplan. Through Pre-Management Juku, we will continue to support thedevelopment of personnel willing to take on new challenges.

Certified as an outstanding health & productivity management organization
Sango was certified as a "Health & Productivity Management Outstanding Organization 2021" (large
enterprise category). This is an award system of the Ministry of Economy, Trade and Industry and the
Nippon Kenko Kaigi to publicly honor corporations that are engaged in particularly outstanding health &productivity management. Companies who win this award are recognized as a "corporation that is
strategically engaged in the health management of employees from a managerial perspective."
Based on the statement by President Tsunekawa that "Physical and mental health is the foundation for all
activities," we have also begun new initiatives in FY 2020, such as providing opportunities throughseminars on exercise, smoking, and women's health. We will continue to actively engage in activities topreserve and improve the health of our employees' minds and bodies.

It is possible for anyone to easily move theheavy products and carry out visual inspection

External awards
Sango won the Quality Control Excellence Award fromToyota Motor Corporation (TMC), which is their mostprestigious quality control award.
Major awards we received for technology development andquality control in FY 2020

■ Sanpuku Co., Ltd. (Fukuoka)

Quality Excellence Prize from the Kyuaikai■ ASI (USA)

TMNA TEAM Award■ STEM (Thailand)

NPT Nissan Quality Improvement Award
TPCAP Total Service Parts Performances Award■ SIAP (India)

TDEM Quality Excellence Award, TKM Quality Award, etc.

■ TSC (Tianjin)

Tetsuya Aoyama,

Exercise seminar (Inabe Plant)

Safety and Health Promotion Section

Accident prevention activities / Safety education initiatives
At the TPS Promotion Center, risk demonstration training is conducted every four years for all of ouremployees. However, as time passes, a person's sense of danger regarding risks diminishes andaccidents occur. There is a need to experience the risks close by to gain an understanding of the danger
and raise awareness. Thus, to prevent accidents, we established a risk-demonstration dojo in each plant,so that risk demonstrations can be carried out once a year.
Because of the strong belief that "I am responsible for protecting my subordinates," the supervisor
teaches the team leader, and the team leader teaches operators, thereby increasing the safety
awareness of the workplace. At present, 31 demonstration machines at the various plants have beenused for demonstration training with 1,227 employees. With a high level of safety awareness, the whole
workforce is working towards zero-accident workplaces.

TFTM Special Contribution Award

Risk-experience dojo

■ GSC (Guangzhou)

Dongfeng Nissan Mass Production Quality Award /GTE Quality Cooperation Award

From left
Mr. Hirohisa Ichikawa, Mr. Yusuke Matsunaga,
Mr. Hideyo Shiomi, Mr. Daisaku Kido,
Mr. Masaru Wakugawa, Mr. Yusuke Nabetani,
Ms. Maki Kuribayashi

Sota Sugiura,

Human Resources Development Section

17

Toyohashi Plant
Award and trophy received from Toyota Motor Corporation

Yawatayama Plant

Hironao Matsumoto, Safety and Health Promotion Section
18

ESG EnvironmentS

ESG Social

ESG Governance

ESG Social

With Suppliers

Social Contribution Activities

Promotion of the Sango Group Green Purchasing Guidelines
The growing severity of environmental issues poses new risks forcompanies. Since 2018, we have issued the "Sango Group Green
Purchasing Guidelines" to promote environmental management with
our suppliers, as we actively promote procurement of environmentallyfriendly parts and materials, and work to improve environmental
conservation. We will continue to implement conservation activities
throughout the supply chain and continue to promote sustainable
environmental conservation activities.

From

HFC
Greenhouse gases (GHGs)

CO2

Sango

SF6

PFC

N2O

CH4

Supplier

Transport

Masks and other supplies donated to medical sites
On May 20 and 21, following the spread of
COVID-19, Sango donated masks, rubber
gloves, and other items to medical sites tohelp prevent infection by droplets that
contain the virus. With the aim of an earlyend of the spread of COVID-19, Sango iscontinuing to work with governments andrelated organizations to maximize its
support measures.

From

Sango

Summary of the donations[Donated to]
Fujita Health University Hospital,
Toyota Kosei Hospital,
Miyoshi Municipal Hospital[Contents]
50,400 N95 masks
208,000 rubber gloves
1,000 goggles
Masks and rubber gloves donated to medical institutions

Manufacture

Requests to our suppliers

1. Establishment of an environmental management system
2. Reduction of greenhouse gases (GHGs)
3. Reduction of environmental impact on water
4. Promotion of resource recycling
5. Control of chemical substances
6. Creation of a society in harmony with nature* "5. Control of chemical substances" is mandatory, and is the most important
item.

Transport
AssemblyUse

Use of fossil fuels andelectricity(Customer)

Conservation activities carried out throughout the supply chain

Joint quality improvement activities with suppliers

From

Sango

In order to ensure that Sango delivers 100% quality products to customers, we have engaged in joint quality improvement activities withindividual suppliers who are supplying parts to us. Starting every January and continued over the course of the entire year, Sango staff fromthe Quality Assurance Department and Purchasing Department visit each supplier for the purpose of improving quality. The Sango staff works
together with the supplier to create lines and systems that do not generate defects, using a genchi-genbutsu (on-site with actual item)
approach from initial kaizen proposals all the way through implementation and confirmation of results. Taking place several times over amonth's time, in addition to quality, to address the concerns and struggles faced by suppliers, Sango staff can tailor their advice to the
supplier's size and systems, introducing kaizen ideas and using management tools also used by Sango to build systems that enable efficient
production of good products.

Defect prevention activity(Monitoring and kaizen for work requiring special attention or expertise)19

Kaizen activity members

10,000 yuan donated toleukemia patients

From

GSC

Donation of face shields
made by STI

The Nansha government put out a call for donations and GSC
immediately donated 10,000 yuan to a child with leukemia in
Dagang Zhen (village) in
Nansha District, Guangzhou,
where the company is located.
The child's parents weredisabled and could not afford to
pay the high medical fees. On
November 10, we were invited
to a ceremony of gratitude heldby the Nansha government,
and we all prayed for the early
Presented a catalog of donations to
the Nansha government
recovery of the child.

In cooperation with ourmanufacturing engineering andmedical office, and using a 3D
printer, we manufactured faceshields, which are one of theprotective devices required by
medical professionals during thisdifficult pandemic. STI delivereda total of 104 face shields to six
hospitals which have been
responding to COVID-19. We willcontinue to provide assistance asnecessary.

Donations given to facility forpeople with physical disabilities

1,000 fruit baskets
distributed to employees
and people in the region

From

STEM

In 2020, due to COVID-19, we were unable to carry out our yearly
activities including facility repairs for local elementary schools andmaking volunteer visits for recreation activities. Thus, on January
9,2021, which is "Children's Day" in Thailand, we donated sweets,
stationery, toys, and sports articles to a facility for people withphysical disabilities located in
the same province as STEM.
We have a connection with thefacility because we painted thewalls five years ago and also
made donations last year.
We hope that we can carry out
recreational activities together
once again.
Passing on donations to officials of
the facility for people with disabilities

From

STI

Letter of appreciation from thehospitals and the 3D printerFace shield

From

ASI

At the end of FY 2020, all employees received fruit baskets toenjoy with their whole family. This was to express our daily
gratitude to them. Some fruit baskets were also delivered freeof charge to less fortunate families in Madison City.

Hand-delivered to each employee by the head of the plant with gratitude

20

ESG EnvironmentG

ESG Social

ESG Governance

ESG GovernanceCorporate Governance System

Compliance Awareness Activities

Sango has established the corporate governance system shown below. This system enables us to make transparent and fair decisions quickly,
taking into consideration all of our stakeholders, including our employees, shareholders, customers, suppliers, and local communities.

Compliance Promotion Month was held
again this year in October, and President
Tsunekawa sent out the following
message: "An important point in carryingout compliance is to communicate wellwith each other by having thoroughdiscussions. We want employees to share
their values within the workplace, and to
strive to create a culture of openness andtrust in the work environment". For the firsttime, we are also implementing
compliance KYT activities at the
manufacturing workplace and distributing
a hand-carried Sango☆Helpline User
Manual in order to promote complianceawareness among employees. We willcontinue to promote complianceawareness activities on a continuous andplanned basis.

Shareholders Meeting
Auditing

Management
Appoint / Dismiss

Committee

Propose

Executive Personnel Plan Committee

Discuss /ReportCompensation Plan Committee

Appoint / Dismiss

Discuss / Report
Audit

Board of Directors

Cooperate

Decision making / supervising
Instruct / Direct

CSR Committee

Discuss / Report
Financial audits

Management Meeting

Internal Control Committee

Discussion of important issues forbusiness execution
Policy Council

Labor-management
Conference
Branch Labor-management
Informal Meeting

Auditors

ReportInternal audits

Execution of business

Instruct

Cooperate

Cooperate

Profit Planning
Meeting

Executive Officers

DialogFinancial auditors

Sango Grp Audit Office

Poster for Compliance Promotion Month

ReportEach Sango Field / Group companies
in Japan and overseas

The highest decision-making body in the Sango Group is the Board of Directors, which consists of five directors, including one external
director, and it directs and decides on critical issues concerning management and statutory matters. At the same time, to ensure fairness andindependence, our auditors, including external auditors, supervise management and audit how directors are executing their duties.

Internal Control Committee
In order for the corporate governance system to make transparent and fair decisions in a quick and decisive manner, and with a basic
approach for internal control systems to ensure the propriety of work carried out within the organization, our Internal Control / GovernanceCommittee will implement compliance and risk management initiatives.

Corporate governanceInternal whistleblowing
and consultation)

Compliance workshop

Sango☆Helpline

We believe that workshops are crucial in helping avoid
compliance risks, and in FY 2020, we started an introductory
workshop for new employees. A workshop started byexecutive officers to prevent power harassment was expanded
to include all professional positions including GLs, section
managers, team leaders, project leaders and relief staff. As aresult, the scale of the workshop was increased to include
more than 600 participants. In the workshop, we effectively
used the time available for dialog, asking lecturers (legal
advisors) about specific problems. Along with plans to roll thisprogram out to group companies in Japan, we will strive toprovide even better versions of it so that employees will feel amore personal connection to compliance and so that it will be
a program that can be carried out again and again.

We established this system to prevent compliance violations(fraud) in Sango and group companies in Japan, to quickly
detect and resolve them, and to strengthen the compliancesystem. It can be used by executive officers, employees,
temporary employees, and dispatched employees. Compared tothe past, new efforts to familiarize employees with thecompliance system, such as reporting the number of cases incompanywide morning meetings and distributing leaflets, haveresulted in an increased number of reports that include specificfacts and evidence from employees, and the number of reports
leading to an improvement in the compliance system has also
increased. While ensuring both the improvement and resolutionof problems and the confidentiality of reports, we will continue
running this program in an appropriate manner.

Workshop for preventing power harassment (Miyoshi Plant)

LeafletEstablishment of a system to make transparent and fair decisions
in a quick and decisive manner

Internal Control Committee
Authority that controls work processes

Compliance21

Risk management

Establishment of a system to ensure that company employees
carry out their work fairly and justly in compliance with societal
norms

Upon recognition and evaluation of various risks surrounding thecompany, establishment of a policy and system for control

Compliance Committee

Crisis Management Committee

22Topics
Addressing COVID-19 infection
COVID-19, which first occurred in December 2019, spread worldwide in 2020, causing many infections and deaths.
We have implemented various measures to prevent infection under the organization shown below. Having now entered FY 2021,
fortunately no clusters have occurred at our workplace. Our work methods and lifestyles changed significantly in 2020 andthe following is a description of the main activities we have conducted with regard to preventing COVID-19 infection.

[Introduced by]
EG Section,
Miyoshi Administration Department

We can do it! Sango's first mask production
Organization chart for novel coronavirus infection control measures and response to any outbreak of cases

At the end of April 2020, there were no masks available which caused
confusion. President Tsunekawa remarked, "The number of masks wehave stockpiled for employees is decreasing. We can't predict what will
happen in the future. First of all, let's make masks at Sango to protect
our employees and their families." This was the commencement of themask production project.

Companywide Disaster Prevention
Headquarters
Instruct to activate the BCP(Business Continuity Plan)

Crisis Management
Committee

Corporate Disaster Management
Headquarters Office

ReportReport activity status

We knew nothing about mask production,
but we decided to make them anyway.

Instruct

Crisis Management Subcommittee(Function Responsibility Division)
Employee
Subcommittee

Customer Support
and Operating Status
Subcommittee

Production Support
Subcommittee

Supplier Support
Subcommittee

Instruct

Funding
Subcommittee

Information
Systems Support
Subcommittee

Regional
Information
Subcommittee

Report activity status

Area / Block Manager
HeadofficeFukuta Mfg

FukutaOff / Eng

Yawatayama

Technical
CenterPrecision
Steel

ToyotaToyohashi

Inabe

Group
companies
in Japan

Overseas
groupcompanies

Main infection control measures implemented
Approach

Set rules for use of
the cafeteria

Items implemented

・Flexible eating hours
・Dining room may be used after handwashing and disinfection
・Seats facing one direction, notface-to-face as before
・Employees eat in silence, and leave assoon as the meal is finished

Masaru Wakugawa

Approach

Introduced partitions forprotection against
infection via airborne
droplets at meetings

Items implemented

・If two or more persons are seated at thedesk, a portable partition is set up in
between・Room ventilated by opening the door
during meetings

There were seven working members—four people (from sales, EG,
and maintenance) who had to put off an overseas assignment toprevent COVID-19 infection, two experts in electrical and equipment
fields, and myself, a member by virtue of a sudden recommendation
by my superior to join. "Making masks" was a clear goal, but westarted off without knowing anything about the manufacturing process.
We had experience working with pipes and steel bars, but making amask with a non-woven fabric and elastic strap was a different thing.
We had countless discussions, designed equipment in-house using
hints from YouTube, and built a clean room of our own using othercompanies as benchmarks. It was an unusual project. We had togather materials from various places, while studying them at the sametime.

The completed mask production line

The challenge of making this equipment became
a valuable experience.

determined as such.
But when the project was completed, thanks to everyone's efforts, welearned that everything in our plans was supported by facts. Unlike
iron, non-woven fabrics are soft and would not move in the way wewanted them to during adjustment work. It was a big challenge for us
to take on different approaches, such as changing the tension of
non-woven fabrics or moving the axes of movement—it was all
different from metal processing, but the knowledge we gained was alsosignificant. We were excited to be able to produce the equipment we
had thought up ourselves, and we were excited to see the equipment
actually move! When we were making adjustments, we felt as if wewere caring for our beloved child.

I was in charge of the material supply unit in the equipment
manufacturing team. Although we had experience in repairing andimproving equipment, we had never designed it ourselves. It was our
first experience building equipment from scratch. We had to make adrawing of what we had imagined, but this was very difficult because
many things were not clear to me at first. From the moving parts,
shape and size of the frame, to individual bolts—I could not understandwhy some things were necessary, and why the shapes and sizes wereI don't think there are many opportunities to take on challenges thatare difficult or new in my daily work. But if there is an opportunity to doso, I advise you to take the step forward with courage, rather than
avoiding it. The experience will lead to confidence and improve thequality of your work. Let us continue to take on challenges andcontribute to the company and to society, revitalizing the Japanese andworld economies that have suffered downturns following COVID-19.

Manufactured by Sango Hokkaido

Set up partitions at
office desks forprotection against
infection via airborne
droplets

・In each department, a transparent filmthat does not feel oppressive was
manufactured in-house and set up at thefront, left and right sides of each desk or table

Manufactured by Sango Prototype Production Division

Video conferencing withcustomers to prevent
infection・Video conferencing was expanded not
only to include customers, but alsointernal meetings, and tools used by thecompany such as Zoom, Teams andSkype were introduced

Handed out notices

・Content about refraining from participating
in dinner parties, how often to brush
teeth, and explanation of the three Cs
・Business trips and admission of visitors
were restricted (See Note 1)

Health management

・Employees with a temperature of 37.5
degrees or higher were asked to stay home
・Internal reporting rules were disseminatedfor infection of COVID-19 or for high-risk
contact with infected people, including family

Set rules for disinfection
methods in the workplace
where an infected person
was present

・"COVID-19 Disinfection Procedure
Manual" was created and distributed

Working from home andirregular shifts with earlyand late attendance toprevent mass infection

・Introduced schedule management tablefor working from home
・Corporate laptop PCs for use at homewere registered and security measures
were implemented

Change in training style
In the past, the only way to provide education for different job levels was
through group training, but since FY 2020, we have introduced online
training with Zoom. Initially, it was part of the COVID-19 infection
prevention measures, but it made it possible to participate from otherlocations such as plants, group companies, and from people's own homes,
thereby expanding the opportunities for education. The fact that everyone's
faces were visible also reduced the feeling of distance between thelecturer and the trainees, or between the trainees themselves. This made it
possible for us to exchange opinions with more people compared to grouptraining. In the future, we will examine the implementation methods
according to the objectives of each education program and will provide
education that is independent of environmental changes.

[Introduced by]
Human Resources Development Section

Rie Mibu

Online training scene(Note 1) Responses regarding COVID-19 are comprehensively laid out in the "COVID-19 Response Guide".

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Topics

A look at ESG 2020 by numbers

Approaches by group companies in Japan and overseas

Environment

This fiscal year, various projects have progressed at group companies in Japan and overseas.
Three were selected and are introduced here by each key person.

Arvin Sango Inc.

ASI

Total amount of CO2 discharge

112,558t

RR-CI activities to improve profitability
RR-CI (an abbreviation for "Ryohin (good product), Renka (low price), Cost, Innovation") is an activity in which
Toyota Motor Corporation and its parts suppliers work as a team to review components from the design stage.
I took a leadership role in RR-CI activities for the Camry together with new project production technology and a costplan. Through these activities, ASI was able to propose 54 improvement ideas to customers. We plan to horizontally
expand similar activities to future projects to increase ASI sales and improve profitability.

We compared the GSC
manufacturing process andthe equipment to determine
potential improvement
opportunities.

Sango Hokkaido Co., Ltd.

356t

SocialAverage age

7,121

41.9

Employment rate of persons
with a disability

Ratio of females in management*1

The focus of these RR-CI activities was tobenchmark current Toyota parts against parts
from competitors in North America.

299,284*1

Number of employees

As a part of its activities, ASI
members visited China and GSC(Guangzhou Sango, a groupcompany). The goal was to carryout benchmarking in China.

Total amount of CO2 absorbed /sequestered as a result of planting trees

Total number of trees planted

Ratio of female employees

7.38%

*2

Average number of years
at the company

17.6

*2

Director, R&D Center

Thomas Christen

Sango Turkey, Inc.

STI

Taking on challenges in non-automotive fields

Next generation C-HR exhaust system sales activities

Since 2019, we have been promoting new sales to agricultural
machinery manufacturers that are based in the Hokkaido region.
We will continue to expand sales in Hokkaido, using the high rust
protection and uniform film thickness of 'Cathodic Electrodeposition
Coating', which is a coating method rarely used in Hokkaido.

To win the exhaust system business for the next generation C-HR,
which is the most important project of our major customer Toyota
Motor Manufacturing Turkey Inc., we worked jointly with Japan Sango
from the design stage. As a result, we were able to achieve this goaland ensure customer satisfaction.

2.1%

0.07%

*2

Number of educationalcorrespondence courses

160

Rate of returning to work aftermaternity leave

100%

*2

Number of training courses

56

Number of workers who haveacquired a National Trade Skill Test
& Certification qualification

277

Rate of taking paid leave

79%

Average overtime work hours

Auditors(including 2 external auditors)

Number of Board of Directors
meetings held

Attendance rate at Boardof Directors meetings

21.2h

GovernanceCase study Ayumi, a general purpose trailer truck
From procurement of materials, to welding and cation
painting, we have been working on "Ayumi (slope)," ageneral purpose trailer that is towed by tractors.
Ayumi
Ayumi is used for loading and unloading tractors andcombines. When moving, Ayumi is raised and locked inplace with a pin.
Tractor

Generalpurpose trailer

Sales in non-automotive
fields are growing.

Ayumi

Sales of agricultural machineryand equipment
14

10

Business Department

Yuki Konagaya
25

813.0 million
9.9 million

2019

Performing benchmarking activities
for parts

Reviewing with peers regarding building
methods and cost improvements

Starting from the design stage,
we worked together on SE activities
to increase our competitiveness!
Based on an activity flowchart, we started
cost planning activities earlier thanprevious projects, and progressed with SE
activities with a focus on incorporating theSE ideas into the design. This allowed us
to complete low-cost designs incooperation with Japan Sango.

2020 (FY)

Sales Division Özhan Özdemir

Directors(including 1 external director)

5

Number of cases in internal reporting(Sango☆Helpline)

30/year*2

3

15/yearNumber of employees who took
security training

1,277/year

98.6%

Number of participants in the workshop for
preventing power harassment*1798/year*1 Results for Sango Co., Ltd. and consolidated subsidiaries for FY 2020. *2 Results for Sango Co., Ltd. and Sango Corporation for FY 2020.

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