SGH

Third-Party Opinion

Third-party opinion of CSR-related information generated by SG Holdings

Mami Oku
Professor, Tokyo Metropolitan University

1. Evolving Communication

CSR communication by SG Holdings to stakeholders is evolving year by year in terms of both methods and content. With regard to communication methods, a CSR Report in report format had been issued until last year, but this approach was revised in 2020 by establishing CSR/ESG website, which contains CSR information including the SDGs Communication Book 2020 aimed at a general wide range of stakeholders, and relevant information including the ESG Data Book 2020 aimed at ESG investors.

In terms of content, SG Holdings provides abundant information, starting with a top message that conveys strong convictions and a clear vision. In addition to the initiatives taken by SG Holdings and their results, the company has communicated its efforts to obtain objective evaluation from outside, such as actively striving to earn various forms of certification and awards.

In addition, the SDGs Communication Book 2020 introduces comments from employees in a variety of occupations and departments with photographs, providing a living view showing their true faces. Furthermore, the ESG Data Book 2020 summarizes changes over time and the status of achievement of targets each year concerning each indicator identified in environmental, social and governance aspects, enabling readers to easily understand the progress of initiatives.

In this way, the necessary information is carefully reviewed with an awareness of different stakeholders, and steps are taken to be accurate, easy to understand and interesting for readers, raising expectations for further advancement and depth.

2. Looking Ahead

I would like to point out the following improvements that could be made regarding the content of the SDGs Communication Book 2020 and the ESG Data Book 2020. Firstly, I will address the SDGs Communication Book 2020. Under the title of "7 Facts, 7 Actions!" the book describes facts and actions by SG Holdings worldwide and in Japan related to the seven SDGs compatible with the seven material CSR issues identified in the medium-term management plan covering the three years from fiscal 2019. For example, "Traffic Safety" is positioned in relation to Goal 3 in the SDGs (Good Health and Well-Being), advocating "Education and technology supporting traffic safety to halve the number of deaths and injuries from road traffic accidents occurring throughout society" as action by SG Holdings in response to the fact of "One life is lost worldwide every 24 seconds in traffic accidents, with 1.35 million people fatalities each year." Furthermore, in relation to Goal 13 (Climate Action) "Contribute to a carbon-free society through the promotion of environmentally friendly business such as environmentally friendly vehicles and modal shift" is described as the action taken against the fact of "Completely eliminate CO2 emissions caused by humans to limit warming to +1.5℃." All of the actions clearly contribute to improvement of the facts, but there is substantial distance between the two and it is unclear how and to what extent initiatives by SG holdings actually contribute to the improvement of facts. For example, in relation to Goal 13 mentioned above, it is necessary to clarify how much the introduction of environmentally friendly vehicles and the utilization of rail freight transport reduces total annual emissions, in addition to how SG Holdings' business as a whole will be made carbon neutral and by when this will be achieved. The top message mentioned that the SG Holdings will "undertake deeper study of the risks and opportunities presented by climate change" as a group endorsing the TCFD." Including this point, it is essential for SG holdings to draw its own roadmap toward decarbonization.

Secondly, I will address the "ESG Data Book 2020." The book includes indicators with medium- to long-term goals, but length of period that the "medium- to long-term" covers is not being identified, and some of the goals remain to be only qualitative. Of course, some goals being qualitative is unavoidable, but more efforts to set quantitative goals are required. As for environmental indicators such as "reduction of CO2 throughout the entire group" with regard to climate change and "promotion of 3R business throughout the Group as a whole" with regard to the circulation of resources, it is highly preferable to set quantitative goals for both of them. It is necessary to clarify the timing of goals, set medium- and long-term goals as quantitatively as possible, and present all information related to goals and results of annual initiatives, analysis and evaluation of results, future improvements and direction as a package.

I continue to look forward to future development of initiatives and communication by SG Holdings.