Sustainability Report 2022

Message from the President

The world is making major moves to becomecarbon neutral by 2050.
The formation of a circular economy society has been increasingly

The third is “investment in human resources to promote business activities.”

highlighted as a means of achieving carbon neutrality. A concrete andOver the medium term, we plan to cultivate 100 business promoters. Thiseffective means to achieve this is to implement a circular economy within

will enhance the sharing of our corporate philosophy, which acts as the rootssociety.

that support the company. Through hiring, training, and retention, we plan toTo this end, we have identified three material items (priority issues). The first

cultivate executives, specialists, and generalists.

is “increasing demand for green materials in the supply chain.” Specifically,

The core of our business is to solve problems that will help realize a circular

this refers to “increased demand for ferrous scrap due to expansion ofeconomy society. Accordingly, our company’s growth and its contribution toelectric furnaces,” “increased demand for nonferrous metals and minor

society move in lockstep. As social contribution is an extension of my own

metals in line with electrification,” and “promotion of advanced resource

business motivations, I am committed to the growth of the ENVIPRO Group.

recycling for waste plastics.”
The second is “reducing labor required in the production process, promotionof data utilization in business activities.” More efficient production that
requires less labor is associated with lower greenhouse gases (GHGs). In
addition, in the circular economy, it is necessary to accurately grasp thecirculation of objects through the use of data.

Of course, we will work with our employees to enjoy this challenge to thefullest.

Sekkyoku Ikkan(means “always be positive”,
the word of Tempu Nakamura)

Forward, MYWAY forward.

Tomikazu Sano

President, Representative Director04

Sustainability Strategy

Business

ESG Initiatives

Financial and Company Data

Sustainability Report 2022

Top Management Interview

Our strengths have emerged out of a single desire:to make people happy.
Our Strengths

was around the time of the Plaza Accord, which led to a recession andGlobal Trading Business has grown accordingly.

My father founded this company. By following his example, I havea strong yen. Since that time, we have overcome the effects of various

We developed our second strength in the 1990s when we installed aworked with the sole intention of making him, and by extension, others,economic waves.

shredder capable of handling large items, such as scrapped cars andhappy. In 1985, my father passed away, and I became president. That

Along the course of this history, the company has developed several

appliances. At the time, it was an investment so large that somestrengths.

considered it reckless. However, this gave us the opportunity to acquire

The first is that we have a trading department that allows us to deal

the advanced shredding and separation technology that would serve as

specifically with other countries. For the 40 years after World War II,

the foundation for our current business expansion. In addition toJapan faced a shortage of ferrous scrap. In the 1990s, however, steel

separation using magnetic force, wind force, specific gravity, and eddy

production reached a plateau and we gradually began to experience acurrents, we have recently been using separation technology like metal

surplus of ferrous scrap. As a result, even when we sourced ferrous

detectors based on various sensors. The plants used in our industry

scrap, there was no market for it in Japan. Because our company was

are mostly custom-made and fabrication is outsourced. We design andfar away from steelmakers’ locations, we could only sell our products

fabricate plants ourselves instead, leveraging our best on-sitethrough trading companies, which presented us with a major sales

expertise. Our plants strongly reflect our own capabilities, allowing us

challenge. We had the idea that we might be able to export our ferrous

to separate waste and other materials more precisely and thoroughly.

scrap to other countries, so we set up a trading department. Our first

This approach increases the value of the items we process, so we cansuccessful exports were to South Korea, and this marked a first for

sell them at higher prices. This, in turn, makes our sourcing more

Japan. Developing our overseas business made us more competitivecompetitive. In the future, we plan to enter the world of chemical

on prices, and we began sourcing ferrous scrap from companies thatseparation at the molecular level: extracting nickel and cobalt from thehad previously been our rivals. This evolution brought us newconcentrated sludge of minor metals collected by physical shredding

functionality and spurred our business expansion from the city ofand the separation of lithium-ion batteries.

Fujinomiya and Shizuoka Prefecture out to the rest of the country. Our

Our third strength comes from the fact that we have an environmental

Tomikazu SanoPresident,
Representative Director05

Sustainability Strategy

Business

ESG Initiatives

Sustainability Report 2022

Financial and Company Data

Achieving Low-Carbon Processes: QCD + C (Carbon Neutrality).
consulting company that enables us to make concrete proposals.

element of C (carbon neutrality) to the manufacturing process. We canpermeation of our corporate philosophy. The specific strengths that I

Bright Innovation, founded in 2016, started as a consulting firm tomake concrete proposals because we have processing technologies

have mentioned must evolve and develop with the times. We will

support CDP responses and the planning of decarbonization strategy.

including those needed for physical plants. Going forward, we believe

further hone and entrench our existing strengths. We will continue

More recently, the company has expanded into consulting related to

we will be able to differentiate ourselves through our consulting

working to evolve and turn areas of technologies and expertise that are

the circular economy. Conventionally, the elements essential to thefunction, by developing and combining a traceability system for thenot yet strengths for us into future areas of strength, through corporate

manufacturing industry have been expressed by the initialism QCD

circular economy.

alliances and M&A. In this way, I believe that we can find many more(quality, cost, and delivery times). We advocate QCDC, which adds the

Our greatest strength is our corporate culture, which is based on theopportunities in our area of business.

Our Role in the Overall Circular Supply Chain
RecyclingEN

VIPRO Group

Reuse

Carbon neutrality

Recreating
resource value

Eliminating CO2 emissions
in the resource
recycling processC o ll eSteelLIBsSun5 Supply of green materials

Reductionof waste

c ti o

4 Remanufacturing

Production ofgreen materialsly

3 Recycling

Intermediate
processingpp

Above-groundresources(waste)Remaing
turfacnu

2 ReuseGreen materials

Recycling

1 Recovery of above-groundresources (waste)

Waste disposal

Us

Remanufacturinge

S alesSup

M a n u f a c t u ri n gur
Proc

ply chainem

ent

Plastics

RubberConversion torecycled
raw materials

Green product

Conversion torecycled material

Reproduction(Materials that meet
performance requirements)(Products made fromrecycled materials)

Intermediateprocessing

Recycled
raw materials

Conversion torecycled materials

Reproduction

Processing
methodShredding

Separation

Steelmaking

Rolling

Material

Shredded mixture

Ferrous scrap

Semifinished steel

Steel products

Processing
methodShredding ∙ separation

Advanced separation ∙concentration

Material

Shredded mixture

Black mass

Smelting and otherchemical processing
Cobalt sulfate/nickel sulfate precursor

Processing
methodShredding ∙ separation

Pelletization

Resin compounds

Forming

Resin material pellets

Formed resin products

Assembly
Battery cells

Material

Separated plastics

Resin raw materialpellets

Processing
methodShreddingShredding

Desulfurization ∙ extrusion

Forming

Material

Shredded EPDM products

EPDM chips

Recycled rubber sheets

Formed rubber materials

06

Sustainability StrategyBusiness edium-Term Management PlanM(Sustainability Strategy)
Financial Targets of the Medium-Term Management Plan
(Sustainability Strategy)

ESG Initiatives

Financial and Company Data

Sustainability Report 2022

Resource Circulation Businessfuture, we plan to add our own technologies to overseas locations toIn the Resource Circulation Business, we will continue to pursue

establish resource processing bases, not just distribution bases.

initiatives for further growth while building on our existing business.
The company’s activities include the collection of gold, silver, andLithium-ion Battery Recycling Businesscopper sediment sludge from incineration ash, the recycling ofWe are promoting the Lithium-ion Battery Recycling Business as aincineration ash as a resource, cleaning and dismantling work broadly

strategic business to drive corporate growth. We believe this businessacross Japan, and the advanced recycling of plastics. In particular, I

will truly come into its own after 2030. We will start operating athink of the collection of gold, silver, and copper sediment sludge fromhydrometallurgical plant in 2025. By 2027, we intend to increase theincineration ash as my “lifework.” It is said that each ton of

number of plants producing black mass, the raw material for theincineration ash contains a gram of gold. It seems to me a waste tohydrometallurgical plant, to four (in Japan and overseas) and establish

To realize a decarbonized society by 2050, we will create QCDC

think that rather than being extracted, such gold might be recycled

a system for collection and production. VOLTA is in charge of thismanufacturing processes, promote RE100, and reduce CO2 emissions

into cement or disposed of in landfills. I also believe we could see

business. In 2020, we made VOLTA independent from the Resourcefrom our plants. According to the Ellen MacArthur Foundation, a shifttechnological breakthroughs in plastics recycling. Without the addition

Circulation Business because we believed this would facilitate theto renewable energy alone can only address 55% of the world’s CO2of technology, municipal waste is just that: waste. But I believe wasteemissions, but the remaining 45% can be addressed by a circular

plastics will become an important resource once chemical recycling

economy. The full utilization of recycled resources can thus help

technology becomes an established part of the social system.

(Fiscal year ending June 2027)

Net sales ¥Ordinary
profitROE

75 billion¥ 5 billion
13 %reduce CO2 emissions. In addition to the conventional value of using
recycled resources, their environmental value has begun to increase.

Global Trading BusinessFor example, using ferrous scrap for steelmaking in electric furnaces

Overseas sales make up the bulk of operations in the Global Trading

is said to emit only around one-fourth the CO 2 compared toBusiness, but we believe it is time for a model change. I expect thatsteelmaking from iron ore in blast furnaces. In other words, recycled

Japanese demand for ferrous scrap will increase due to the newmaterials such as ferrous scrap are low-carbon raw materials.

construction of large electric furnaces by major steel makers. Accordingly,

We joined the RE100 initiative in 2018. We are already operating withthe amount of ferrous scrap exported from Japan will decrease. Given

97% renewable energy, and we will continue to supply low-carbon

this environment, over the medium term we aim to increase ourbase fuel by reducing the carbon footprint of the production process

handling volume from the current 540,000 tons to 1,000,000 tons.

itself throughout Scope 1, 2, and 3. Our financial targets for the fiscal

We will continue to expand our number of domestic collection points.

year ending June 2027 are net sales of ¥75 billion, ordinary profit ofIn addition, we will focus on increasing our overseas sales and the¥5 billion, and ROE of 13%.

number of products we handle, such as through trilateral trade. In the07

Sustainability Strategy

Business

ESG Initiatives

Sustainability Report 2022

Financial and Company Data

Build a “platform” filled with good quality energy where all employees work energetically.
alliances and other collaboration necessary to ensure development

Capital Investment

industry, the on-site working environment is hard. Thinking of ourhuman resource strategy from a long-term perspective, it is important

speed and secure management resources. In this area, we are
Investment in Existing Businessescombining caution with boldness.

• Expansion of plants• Introduction of new technology,
promotion of DX• Environmental improvement,
strengthening of safety measures

Other Business
In Other Business, we will further strengthen our Environmental
Management Consulting Business as a contact point for the creation ofsocial systems. In addition, Welfare Service Business for People with¥

20billion

Disabilities does not have a large financial impact, but it plays animportant role in shaping the corporate culture. In the future, we will

Recycling of waste incineration ash
after collection of gold, silver,
and copper sediment sludge

ewnersbu

OthProfit distribution

Corporate valuessine

Growth investments
30%
Research and development
10%
Return to shareholders 20% to 30%
Internal reserves
30% to 40%

gclin
recyraftcr
ilastics
Aaste pg of w
cyclinal rehemic

Con
Lithium-iecycling

Battery R• Lithium-ion battery recycling business• Advanced plastic recycling business• Secure human resources andintellectual property

Investment in M&A etc.
• Accelerating growth• Synergy creation• Alliance with growing companies

focus our business on cooperation between agriculture and welfare.

Optimize business portfolio by deepening ourinvolvement in or withdrawing from existing businesses,
aggressively investing in growth areas andsearching new businesses

Investment in Growth Businesses

to nurture people. For several years now, we have been offering abusiness school for the next generation of management. Over thenext five years, we will develop 100 business promoters. We plan toestablish several companies in the future, and I would like thesepeople to experience being the president of a company. To ensure acompany’s future growth, I think it is necessary for people to haveemergent capabilities so they can grow by themselves and for them
to be in a field or organization where they can take the lead and act
with self-discipline. To this end, we will instill our corporate
philosophy, create a bright, open, and pleasure culture, and train
people with a sense of mutual trust, Hands-on learning, a shared

The company has made capital investment totaling around ¥6 billion

vision, a spirit of taking on challenges, wholehearted effort and heart

over the past five years. Now that profit has been rising, we plan tothat cherish people. Naturally, we will need to create an environment

increase this level. We plan to invest ¥20 billion over the next fivefor this.

years. We have already earmarked more than half this amount for new

In the wise words of Peter Drucker, whom I admire, “culture eatstechnologies and DX in existing businesses, investment in expansion

strategy for breakfast.”(including for safety measures), and for growth businesses such as

Above all, we will ensure

Lithium-ion Battery Recycling and advanced recycling of waste plastics.

our employees are well-At this stage, we have no concrete plans for the remainder. My attitudeversed in our corporate

toward investing has been changing.

philosophy and culture,

5カ年目標

Creation of100 Business
Promotors

Executives

and to use this as theResource Circulation, Global Trading, Environmental Management
Consulting, Welfare Services For People With Disabilities

2022

2030

Human Resource Strategy

driving force for ourI believe that our first priority is to improve working conditions; in thishuman resources strategy.

Specialists

Generalists

08