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Approach to Materiality

Processes for Identifying Material CSR Issues

As a corporate group serving as a public entity of society, the Group promotes Stakeholder Management, aimed at responding to the expectations of stakeholders including customers, employees, local communities, business partners and shareholders. As an indicator of those efforts, the material CSR issues are of great interest to society, and we have identified those issues which have a significant degree of impact on the Group as well. In the process of identifying these material issues, we have utilized the SDGs, which aim to resolve issues in international society, as a means of confirming that our material issues do not deviate from society's requirements.

Processes for Identifying Material CSR Issues

  • 001

    Reacknowledge our social mission and identify the elements and initiatives required for achieving this

  • 011

    Confirm the initiatives established in the Mid-term Business Plan

  • 021

    Confirm business area risks and identify the initiatives required for mitigating risks

  • 031

    Utilize SDGs to confirm that the initiatives identified in (1) to (3) do not deviate from the requirements of society

  • 041

    Group the initiatives identified in (1) to (3) to identify material issues based on discussion in the CSR Committee

  • 051

    Exchange opinions with experts on whether the identification processes and content of material issues are appropriate

01
Reacknowledgment of social mission

"To continue to unwaveringly provide the social infrastructure of logistics"

02
Confirmation of the initiatives established in the Mid-term Business Plan

The Group states in its Mid-term Business Plan that it aims to achieve sustained growth across a broader range geographically and in terms of business areas.

Mid-term Business Plan "First Stage 2018"
  1. Establish the platform for sustainable growth through productivity improvement and advanced logistics solutions
  2. Develop global logistics network through the enhancement and integration of domestic and overseas businesses
  3. Increase in value and optimization of ancillary logistics businesses
  4. Establish talent management system and make best use of diversified talent pool
  5. Employ the latest technology to deliver superior solution to our customers and streamline business activities
  6. Ensure enhancement of the compliance system

* As of FY2017 when Material CSR Issues were identified.

04
Risks in business areas

In addition to various risks overseas and in Japan, the Group as a whole faces and needs to address risks in areas such as governance, systems, the environment, safety, and quality.

Location of Risks in Business Areas

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Main risks

The SG Holdings Group recognizes that the main risks described below may occur, and takes short-term and medium- to long-term action to address them.

Human rights

Particularly overseas, there are risks for addressing violations of human rights of various stakeholders such as workers, consumers, and local residents.

Labor-related

Particularly in Japan, there are risks that need to be addressed as a result of the strengthening of legal regulations, application of new legal regulations, and the strengthening of the enforcement of the law due to the shrinking workforce and work style reforms.

Corruption

Particularly overseas, there are risks of corruption and bribery to be addressed.

Business partners-related

In some cases, the Group uses business partners to provide services. There is a risk that business partners will violate the law or otherwise act inappropriately.

Governance

In businesses in Japan and other countries, particularly in Asia, there are local risks such as embezzlement of payments received and improper accounting.

Information system

Appropriate operation management and freight management utilizing IT are extremely important for the Group's logistics business. There is a risk that operations will be suspended or that customer information will be leaked due to system trouble.

Environment

The Group uses many vehicles, and there is a risk that a variety of actions such as the replacement of vehicles and the installation of dust collectors will be required due to strengthening of environmental regulations in the future.

Safety

There is a risk of administrative penalties or cancelation of permits due to the occurrence of serious accidents, and that it will be necessary to take a variety of action due to the strengthening of labor laws.

Quality

There is a risk that various actions will be required if a quality-related incident occurs.

Occurrence of natural disasters

There is a risk that business continuity will be difficult due to damage to equipment and the suspension of operation of equipment in the event of a natural disaster.

04
Using SDGs to confirm that there is no deviation from social requirements
Mapping of the initiatives identified in (1) to (3) in terms of "interest from society" and "impact on the company"

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SDGs that are highly compatible with the initiatives identified in (1) to (3)
  • 3 GOOD HEALTH AND WELL-BEING
  • 5 GENDER EQUALITY
  • 7 AFFORDABLE AND CLEAN ENERGY
  • 8 DECENT WORK AND ECONOMIC GROWTH
  • 9 INDUSTRY, INNOVATION AND INFRASTRUCTURE
  • 11 SUSTAINABLE CITIES AND COMMUNITIES
  • 13 CLIMATE ACTION
05-06
Material CSR issues identified in (5) and (6)
Initiative Themes[Providing Safe and Secure Services] Traffic Safety,Labor Health and Safety,Quality/[Promoting Environmentally Friendly Business Activities] Climate Change,Circulation of Resources,Coexistence with Nature/[Building an Organization of Diversity and Inclusion] Human Rights,Labor Practices,D&I/[Creating New Value Through Comprehensive Logistics Solutions] Provision of advanced Logistics Solutions,Promotion of Digitalization and Technologies/[Contributing to Communities] Local Contributions/[Promoting Sustainable Procurement] Supplier Management/[Building a Responsible Management Foundation] Corporate Governance,Compliance,Risk Management,Information Security

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Comment from Expert

Kaori Kuroda
Executive Director,
CSO Network Japan

The SG Holdings Group has meaningfully re-identified material CSR issues by utilizing internationally agreed upon SDGs to ensure that there was no deviation from social requirements.
Indicating the processes for identifying material issues and risks in business areas in tables and diagrams also made these easy to understand. I would like to point out that although human rights and labor risks are only shown to be overseas, these also exist in Japan. I think it would be a good idea to identify risks and opportunities for each activity theme for the material issues.

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