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Be a 未来 -Creator as Your Partner Sustainability Report 2019 RYODEN CORPORATION Sustainability Report 2019

Sustainability Report · Business area, sales increased greatly. The growth of the business also contributes to the growth of existing business-es such as the FA Systems Business,

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Page 1: Sustainability Report · Business area, sales increased greatly. The growth of the business also contributes to the growth of existing business-es such as the FA Systems Business,

Be a 未来 -Creator as Your Partner

Susta inabi l i ty Report 2019

RYODEN CORPORATION

Sustainability Report 2019

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Page 2: Sustainability Report · Business area, sales increased greatly. The growth of the business also contributes to the growth of existing business-es such as the FA Systems Business,

海外

19拠点1 2

Ryoden Corporation’s business

Business Activities

1. Adhere to laws and regulations.2. Aim for growth with profit3. Take responsibility towards the society as a global company4. Individuals should create their own views, and together create an energetic organization.5. Ensure respect toward the individual’s personality and uniqueness,

and engage in personal development to attain high goals.6. Management and the managers should fulfill their responsibilities.

CSR Policy

Ryoden Corporation is Japan’s largest electronics specialized trading company in the Mitsubishi Electric Group. With factory automation systems, electronic devices, and cooling and heating systems as our mainstay businesses, we pro-vide high value-added solutions that combine cutting edge products and technologies through our global network of 31 operational sites in Japan and 19 operational sites overseas.

Ryoden Corporation’s global network

Be a 未来 -Creator a s Your Partner—Your partner in creating the future together—

Ryoden Corporation aims to be a global solution provider in the electronics industry. Leveraging our superior technological prowess, expertise, and information power, we facilitate the creation of a bright future as our cus-tomers’ partner. Through sound corporate activities that meet the needs of our times, we strives to improve our corporate value while also contributing to the realization of a sustainable society.

Japan: 31 operational sites

Western regions: 5 operational sitesGermany/United States (San Jose, Atlanta, Indianapolis)/Mexico

East Asia Strategic Offices: 8 operational sitesChina (Shanghai, Hong Kong, Dalian, Guangzhou, Chengdu, and Shenzhen)/Taiwan/South Korea

Southeast Asia Strategic Offices: 6 operational sitesSingapore/Thailand (Bangkok and Sriracha)/Indonesia/The Philippines/Vietnam

3 Message from CEO5 Financial Highlights6 Feature Ryoden Corporation

Solutions11 Corporate Governance13 Together with Our Stakeholders16 Environmental Report

CONTENTS

Editorial PolicyOur environmental philosophy is to pass on the environment in a better condition to future generations with whom we share the global environment. This report has been drawn up to inform our stakeholders about the Ryoden Corporation Group’s CSR activities, including our environmental programs, which may be difficult to gauge from descriptions of our business activities alone. This report is designed to be easier to read and to deliver our messages more clearly and precisely, by minimizing the use of jargon and technical terms. We hope this report helps our stakeholders to better un-derstand the Ryoden Corporation Group.

Management Principles

1. Act through sincere marketing activities and the supply of progressive technology, to win the trust and expectations of customers.

2. Address the changes in society, striving for stability and progress in corporate management, while contributing to the community.

3. Respect the character and individuality of each employee, nurturing human resources high in specialization, innovative spirit and creativity.

The Group places a high priority

on helping global environmen-

tal preservation through busi-

ness activities. For this purpose,

our business activities are

founded on our Environmental

Basic Philosophy and Environ-

mental Policy. The Group will

remain dedicated to passing on

a healthier global environment

to future generations.

Stakeholders

TransparencyAccountability

Sustainability Report

Website

ManagementCorporate quality

Customer satisfactionBusiness continuity planning

Contribution to society

Environment Society

Global warming prevention

Recycling society contribution

Employment LaborHuman rights

Health and safety

Cooling & Heating Systems

ICT Facility System

Sales(FY 2019)

240.3 billion yen

FA Systems

Our factory automation devices and mechatronics products lineup provide the best solutions. We facilitate the daily production activities of our customers with our full support systems.

We propose the latest building manage-ment systems to facilitate a highly so-phisticated information society. We also provide proprietary solutions that utilize advanced imaging and video technology.

With cooling and heating devices such as air conditioning devices and refrigerated show-cases, we help create comfortable environ-ments in buildings, stores, factories, and residential homes. We also have an exten-sive lineup of industrial cooling and heating systems.

Component aligning robot system

RFID antenna gateCloud-enabled rental security camera housing

Air-cooled heat pump chiller manufactured by Mitsubishi Electric Corporation

Electronics

This mainstay business has accounted for 65% of consolidated sales since our found-ing. By using our wide-ranging network in Japan and overseas, we provide cut-ting-edge semiconductors and electronic devices.

R-Car M2 SoC for automotive information devices manufactured by Renesas Electronics Corporation

Environmentally friendly products

Green procurement

Internal controlSecurity management

Corporate ethicsCompliance

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3 4

Message from CEO

We aim to become a “Global Solution Provider,” adjusting to the changing business environment.We strive for stable growth and contribute to a sustainable society.

Looking back at FY 2018

We have created new business and “reformed” our business as a response to external environmental changes in our CE 2018 (FY 2016-2018).

Although China had driven the world economy, it saw a slow-ing economic growth while the European economy became stagnant. The global economy entered into a harsh period. Japan’s economy, which had been on a gradual recovery trend due to solid corporate earnings, is also lacking trans-parency following factors such as the deteriorating relation-ship between Japan and South Korea.

In these circumstances where big changes are expected to occur in the business environment, the Group aims to strengthen its business as a “Global Solution Provider” which responds to external changes. The Group has also launched its new medium-term management plan “CE 2018 (Chal-lenge & Evolution 2018)” in FY 2016 and has worked on the plan. The plan’s basic strategies are to stay close to custom-ers, create value based on customer needs, enhance the presence of the Group among customers and in the market, and improve our profitability. In FY 2018, the final fiscal year of CE 2018, we accelerated our activities to make proposals based on customer needs.

As a result of these efforts, the consolidated financial re-sults in FY 2018 posted a 1.6% increase in revenues and a 10.8% increase in operating profit. Energy-saving related business continued to perform strongly, and auto-related business has also remained robust in Japan and Europe, contributing to the favorable results.

Although not having been able to reach the final-year tar-gets of CE 2018, compared to FY 2015, sales and operating profit increased significantly by 8.3% and 53.1%, respective-ly. These figures truly show the results brought by the estab-lishment and promotion of a business model for customer value creation as well as efforts to strengthen the Group’s consolidated profitability. Furthermore, a number of achieve-ments have been made, such as the establishment of a glob-al partners network, further development of global human resources, and reinforcement of the governance framework based on requests in relation to corporate governance.

In particular, the “ICT Facility System” business made a great leap in FY 2018 Although its sales account for only 3.7% of the Company’s sales as a whole, it has grown by 40.3% compared to the previous fiscal year. Sales of ICT net-work-related devices were solid in the information communi-cations area and the medical area. Additionally, due to win-ning of an order of large-scale plant factories in the smart-Agri Business area, sales increased greatly. The growth of the business also contributes to the growth of existing business-es such as the FA Systems Business, the Cooling & Heating Systems Business, the Building Business, and the Electron-ics Business. Going forward, we plan to pursue synergy among these businesses in order to further accelerate our growth.

Initiatives in FY 2019 and our future growth strategy

Continuing to strengthen existing core businesses and invest in growing businesses.

In concrete terms, our business strategy for current core businesses in FY 2019 is to continue to aim for high profitabil-ity by adding new value based on customer needs. In the FA Systems Business, the Cooling & Heating Systems Business, and the Building Business, we strive to create new business models and expand our business scope through promoting our solutions business, while making most of our core tech-nologies and assets. In the Electronics Business, we work on initiatives such as reinforcing our product lineup of function devices, modules, and systems, whereby promoting various risk hedge and thorough portfolio construction.

On the other hand, we aim to establish the bases for our growth businesses: smart-Agri Business, healthcare, and network at an early stage through the timely investment of management resources. Furthermore, we intend to strength-en our business incubation function through building an inter-nal development framework, so that we can continuously create new next-generation businesses. In the smart-Agri Business, we plan to quickly establish a business foundation through increasing business orders of large-scale plant facto-

ries, while implementing initiatives in the development and commencement of operation for next-generation plant facto-ry systems. In the Healthcare Business, we plan to cultivate markets in areas such as “healthy life expectancy” and “health and productivity management” to prepare for super-aging so-ciety.

Alongside such business strategies, we also continue to develop and strengthen our business promotion base, in-cluding improvement of governance, securing and cultivating human resources, and promoting IT strategies.

Our consolidated financial results in FY 2019 are forecast to slightly decrease in both revenues and profit. The Cooling & Heating Systems Business is expected to stay solid follow-ing its strong performance in FY 2018. The ICT Facility Sys-tem Business, which has been rapidly growing, is also ex-pected to significantly expand as the smart-Agri Business accelerates. However, it seems inevitable that the FA Sys-tems Business and the Electronics Business are affected by trade friction, and therefore the overall forecast is slightly neg-ative.

Creating value with our stakeholders

Contributing to a sustainable society through business activities, while focusing on environmental management.The Group’s corporate statement, “Be a 未来-Creator as Your Partner,” reflects our stance that each and every one of us should partner with customers and create the future together. The Group has been doing business with over 2,000 compa-nies, serving as a supplier or a provider. In addition to our partners through business activities, the Group’s business activities are supported by various stakeholders, such as our shareholders, local community, employees and their family members. Going forward, we hope to contribute to a sustain-able society through our business activities with the aim of achieving further growth as a company, while maintaining a good relationship with our stakeholders.

The Group deems that the environment is an important management theme to achieve a sustainable society. In order to promote unique business activities which include environ-mental activities, we are implementing initiatives all over our supply chain, such as the globalization of our environmental activities by means of expanding the certification scope of ISO 14001 obtained in Japan to overseas offices as well as reducing greenhouse gas emissions. We are also working on integrating environmental activities and business activities to-gether, whereby globally providing our total energy manage-ment system in which photovoltaic system is installed at fac-

tories and office buildings. As a result of these initiatives, we ranked 10 among trading firms in the 22nd Nikkei Environ-mental Management Survey, an objective indicator for the performance of corporate environmental activities.

The joint efforts with local community is also one of our im-portant management themes. We have been promoting so-cial contribution activities with due consideration for biodiver-sity since 2007, which was our 60th anniversary. We have been making these efforts for 13 years, having 700 and over participants in FY 2018 at 24 regions worldwide. Each oper-ational site steadily continues to conduct activities tailored to its regional situation, such as green conservation and clean-ing activities.

Our employees and their family members are important stakeholders of the Group. Beside creating a rewarding workplace environment, we are promoting measures towards work-life balance as well as enhancing workplace diversity, in order to enrich the lives of more people through working at Ryoden Corporation.

Going forward, the Group continues to aim for a sustain-able society and improved corporate value through our busi-ness activities, together with our stakeholders.

CEO

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5 6

Feature

Ryoden Corporation Solutions

Ryoden Corporation helps to conserve the global environment and promote human health through its business activities.

The Ryoden Corporation Group is working with our trusted partner companies to offer the best solutions to address customer needs and challenges in the field, which are identified through our close relationships with customers.We are committed to meeting the demands of customers and society and helping to conserve the global environ-ment and promote human health by focusing on five areas: EMS and the environment, safety and security, produc-tion facilities, industrial refrigeration/heating, and building instrumentation.

* The Company conducted a share consolidation (consolidation of two shares of common stock into one share) with the effective date of October 1, 2017. Accordingly, profit per share, net assets per share, and cash dividends per share for the fiscal year ended March 31, 2018 were calculated on the assumption that the Company conducted the share consolidation at the beginning of the fiscal year ended March 31, 2018.

*“Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28 issued on February 16, 2018), have been applied from the beginning of the fiscal year ended March 31, 2019. Accordingly, total assets for the fiscal year ended March 31, 2018 are those after retrospectively applying the accounting standard.

Financial Highlights

(Yen)

(FY 2015) (FY 2016) (FY 2017) (FY 2018) (FY 2019)

171.98165.44

32.0242.61

66.70

(Yen)

(FY 2015) (FY 2016) (FY 2017) (FY 2018) (FY 2019)

5648

222624

(%)

(FY 2015) (FY 2016) (FY 2017) (FY 2018) (FY 2019)

49.449.1 50.5 49.6 47.8

Profit per share Cash dividends per share Equity ratio

(%)

(FY 2015) (FY 2016) (FY 2017) (FY 2018) (FY 2019)

2.3

1.72.1

1.2

2.1

(%)

ROE

(FY 2015) (FY 2016) (FY 2017) (FY 2018) (FY 2019)

5.84.9

3.02.3

5.7

4.23.7

2.72.0

3.9

ROA

(persons)

(FY 2015) (FY 2016) (FY 2017) (FY 2018) (FY 2019)

1,2511,2841,2841,2761,251

Operating profit to net sales ROE/ROA Number of employees

(Millions of yen)

(FY 2015) (FY 2016) (FY 2017) (FY 2018) (FY 2019)

240,312236,494219,225221,990237,877

Sales(Millions of yen)

(FY 2015) (FY 2016) (FY 2017) (FY 2018) (FY 2019)

5,6245,078

2,730

3,673

4,992

Operating profit(Millions of yen)

(FY 2015) (FY 2016) (FY 2017) (FY 2018) (FY 2019)

3,7313,588

1,3881,846

2,891

Profit attributable to owners of parent

75th term(FY 2015)

76th term(FY 2016)

77th term(FY 2017)

78th term(FY 2018)

79th term(FY 2019)

Sales 237,877 221,990 219,225 236,494 240,312Overseas sales 66,342 54,439 48,919 50,111 45,826Ratio of overseas sales (%) 27.9 24.5 22.3 21.2 19.1

Operating profit 4,992 3,673 2,730 5,078 5,624Ordinary profit 4,505 3,296 2,442 5,055 5,648Profit attributable to owners of parent 2,891 1,846 1,388 3,588 3,731Total assets 125,121 119,382 122,763 133,710 132,729Net assets 61,444 60,401 60,975 64,057 65,716Short-term loans 2,706 2,083 761 795 1,358Cash flows from operating activities (4,168) 3,747 4,601 (4,833) 4,479Cash flows from investing activities (1,230) (777) 474 674 (686)Cash flows from financing activities (1,087) (1,550) (2,227) (942) (563)Profit per share (¥) 66.70 42.61 32.02 165.44 171.98Net assets per share (¥) 1,417.10 1,392.47 1,404.51 2,948.86 3,022.78Cash dividends per share (¥) 24 26 22 48 56Operating profit to net sales (%) 2.1 1.7 1.2 2.1 2.3ROE (%) 4.9 3.0 2.3 5.7 5.8ROA (%) 3.7 2.7 2.0 3.9 4.2Equity ratio (%) 49.1 50.5 49.6 47.8 49.4Number of employees 1,251 1,276 1,284 1,284 1,251

EMS and the Environment

We contribute to the improvement of energy efficiency and conservation of the global environment through proposals for photovoltaics and other renewable energy sources, water, air and other environmental sensing, and next-generation energy utilizing hydrogen.1

Safety and SecurityWith the aim of helping to ensure safety and security for people and society through our business activities, we carry out various initiatives including for improving food safety, supporting disaster prevention and re-duction, and effective post-disaster medical services in the field.2

Production FacilitiesWe propose total packages of services ranging from efficiency and labor-saving at production sites to pro-duction management, traceability, cost reduction, inspection/safety systems and assessment/testing sys-tems, in line with the business profile and needs of customers.3

Industrial Refrigeration/Heating

Leveraging our technological prowess and expertise, we propose, design and construct sophisticated air-conditioning systems including for production facilities and testing booths. Building on our experience, we also propose and support the operation of plant factories, which are attracting global attention as a new crop production system.

4

Building InstrumentationDemand for automatic control of buildings is increasing for energy conservation and safety purposes. The Ryoden Corporation Group proposes systems for total management and efficient operation of lighting, air conditioning and security in commercial facilities, factories and office buildings.5

(Millions of yen)

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7 8

Feature Ryoden Corporation Solutions

*1 FlaRevo is currently pending trademark registration.

*1 EMS... Short for “Energy Management System.” A system that monitors and controls energy supply and demand equipment to carry out the most suitable operation while predict-ing energy required.

*2 V2X... Short for “Vehicle-to-everything.” A general term for technologies and systems that allow electric cars with rechargeable batteries, homes, buildings, and power networks to mutually supply power to each other.

Supporting the realization of “ZEB (Net Zero Energy Building)”ZEB stands for Net Zero Energy Building. It is a building that aims for net zero in

annual primary energy consumption in a building while maintaining a comfortable

indoor environment. Although it is impossible to reduce energy consumption in a

building to zero due to human activity, the combination of energy saving technol-

ogies and energy creation technologies can result in net zero energy.

The Ryoden Corporation Group has a considerable track record of selling build-

ing equipment to potential ZEB targets: offices, hotels, hospitals, stores, schools,

meeting places, etc. Based on these experiences, and in collaboration with

Mitsubishi Electric Corporation, a general electrical manufacturing company, and

partner companies, the Group supports business owners as an equipment con-

sultant or energy-saving consultant for the realization of ZEB, through proposing

energy-creation and energy-saving solutions, such as photovoltaic facility and

EMS, on top of main equipment such as air-conditioning, lighting, hot water sup-

ply, ventilation and elevators.

*Excerpted from “2019 Net Zero Energy Building (ZEB) Demonstration Project” released by the Sustainable Open Innovation Initiative in April 2019.

Qualitative definition of ZEB

“ZEB” A building with net zero or negative in annual primary energy consumption

Nearly ZEB A building very close to a ZEB, fulfilling the requirements of ZEB Ready, with annual primary energy consumption close to zero through renewable energy.

ZEB Ready An advanced building that may follow after a ZEB, equipped with high thermal insulation walls and efficient energy-saving equipment.

ZEB Oriented A building that may follow after a ZEB Ready, equipped with high thermal insulation walls and efficient energy-saving equipment, for which necessary measures have been taken toward further energy-saving.

Used at medical facilities

“FlaRevo-Medical,” which applies “FlaRevo” specially to medical facilities, has been highly evaluated by people work-ing at extremely busy medical front. This system will lead to the prevention of various medical accidents through monitoring, drug management, etc.

Shifting from “surveillance camera” to “business camera”

A new future materialized by “FlaRevo”

Wide range of camera selection• Compatible with over 120 manufacturers• Add 1 camera for the minimum unit

Compatible with large-scale systems• Supports 100 units or more

Flexible backups• HDD/NAS backup• Scheduled backup

Business site monitoringShoot

Use of I/O• Use of contact signals

Input from other systems• Bookmark function• Alert display

Output to other systems• Alert notifications• Provide video/still images

Linking systemsConnect

Free video viewing• Multiple monitors can be installed• View video from personal PCs

Web page display• Add various types of information

Cloud• Use on the Internet• Use with mobile devices

Improved viewing environmentSee

Centrally manages all information, streamlining operations, “FlaRevo”The Company offers the video monitoring system, FlaRevo*1 (Flag Revolution), which adopts a VMS (video management system) that contributes to improving operational

efficiency, in addition to the conventional application of surveillance cameras for crime prevention. Implementing this system enables visualization in various scenarios, as

well as remote monitoring of hazardous areas and special areas, and monitoring of equipment to detect and restore defects quickly. In addition, by automatically tagging

the necessary locations in acquired data with flags, searchability is improved and search time is shortened, yielding benefits such as reducing the amount of discarded

defective products. At the Food Safety Expo held in March 2019, this system attracted the attention of many visitors, and many companies showed a positive attitude toward

implementing it.

Cloud-based logistics equipment visualization service “ATLAS-Things”

Safety and SecurityEMS and the Environment

The manufacturing sector, such as the automobile industry, typically uses a huge volume of returnable containers (pallets, reusable boxes, etc.) for transport between

companies and operational sites. However, the difficulty in identifying the stock and location of returnable containers has resulted in problems including the impossibility of

shipments due to unavailability of dedicated containers, and the purchase of extra returnable containers caused by losses or problems. By using a cloud system, “ATLAS-

Things”*2 allows us to provide a secure environment across the world at all times and to reduce the initial introduction cost by substantially cutting back on the system

building cost and operational cost for customers. The RFID*3 and barcode comply with the international standards for the automobile industry (ISO1736x) and the distribution

industry (GS1), as well as the original code system.

Production Facilities

Example of use

*2 ATLAS-Things is currently pending trademark registration. *3 RFID: A system for wirelessly reading and writing RF tag data in which ID information is embedded using radio waves.

Because it employs a cloud service, the system can be introduced quickly from small trials to large-scale en-terprise users.

Flexible support regardless of user’s scale1This service is compatible with the hierarchical structure of the supply chain model. It conforms to the international standards, as well as the original code system. (Automobile industry: ISO1736x / Distribution in-dustry: GS1)

Compatibility with international standards2

Customers can develop local edge systems without placing limits on the readers to be used.

Release of an online API3

The service provides a screen that allows users to track the status of the receipt and shipment of products, using a browser as a standard fea-ture. In addition, it is equipped with a data export function that enables various types of analysis with BI tools.

Supporting visualization4

Photovoltaic facilities

EMS*1

V2X*2

Battery equipment

Equipment consultation

Energy-saving consultation

Main ZEB facilities

Air-conditioning Lighting

Hot water supply VentilationElevators

Ryoden Corporation is registered as ZEB Planner

A ZEB Planner, based on the gist of the ZEB Roadmap, is an entity which utilizes the ZEB Design Guidelines or the Technical and Design

Knowhow on the Design of ZEB and Energy-Saving Buildings of each company. A consulting window is established at such entity for the real-

ization of ZEB throughout the general public, with the aim of supporting business and disclosing the activities.

Features of “ATLAS-Things”

ATLAS-Things visualizes the movement of goods in RTIs, something that we couldn’t do in the past.

Users can check logistics information wherever they are

Users can check logistics information wherever they are

ATLAS-Things accumulates the logistics information across companies

ATLAS-Things accumulates the logistics information across companies

Flow of informationFlow of information

Flow of goodsFlow of goods

LocationA

LocationA

LocationD

LocationD

LocationC

LocationC

LocationB

LocationB

LocationA

LocationA

Energy-creation and energy-saving

equipment

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9 10

Feature Ryoden Corporation Solutions

Decentralized big data “PLR (Personal Life Repository)”“Personal data is the new petroleum of the internet, a new currency in the digital world.”As this statement at the World Economic Forum (January 2011), the use of personal data is considered in various fields.While the EU promoted the right to use an individual’s personal data at one’s own will (the right to data portability) following the enforcement of the General Data Protection Regulation (GDPR) in May 2018, America’s GAFA (Google, Amazon, Facebook, Apple) and China’s BATH (Baidu, Alibaba, Tencent, Huawei) are spending huge amounts to collect their own personal data.In line with such a worldwide trend, Japan is also expected to create an environment where a society can manage its own personal data. To prepare for the advent of data portability society, the Company aims to popularize the Personal Life Repository (PLR), Japan’s first decentralized Personal Data Store (PDS) invented by Professor Hashida of the Graduate School of the University of Tokyo.

9

Safety and Security

●Individual merits• A good grasp of the ways personal data are used• Freely disclose personal data to other specified parties

for various benefits

●Business merits• Reduction of costs for personal data management,

operation, and maintenance• The risk of leaks significantly drops for not having

immense amounts of personal data• Able to obtain data from outside the Company’s services

Features of decentralized PDS

Centralized PDS

Data flow Data flow

Decentralized PDS

Individuals Individuals

Companies Companies

Personal data management

Before PLR implementation After PLR implementation

Local governmentsService providersTourist associations

Event information

MaaS

Short for “Mobility as a Service.” A new “mobility” con-

cept realized through the seamless integration of all

transport methods except privately owned cars by up-

loading transport information onto the cloud with ICT*2.

PLR, the key to Smart City

User information of connected car services, travel ser-

vices, and livelihood-related services (hospitals, banks,

administrative organs, etc.) can be managed through

PLR. Using this PLR as a hub for joint data will enable

users to enjoy various Smart City services, including

MaaS.

MaaS, Smart City, and PLR

PLR cloudTravel service

Smart City service

Connected car services

Livelihood-related services

Information on fine dining Hospitals

Banks

Administrative organs

Public services Private-sector services

Service providers

Helpnet(for accidents

and emergencies)

PLR

Non-life insurance company

PLR

House manufac-

turers

PLR

Car dealers

PLR

Car equipment

shops

PLRPLR

PLR

PLR

PLR

PLR

PLR

PLR

PLR

Mediator

Vehicle data

Mediator server

PLR cloudPLR

PLR travel app

PLR allows users to comprehensively share personal information under consent of a user even without anonymization.

Providing anonymized mobility information as big data

Online services• Map data service• AI route guidance• AI voice service

*1 DRM... Short for “Digital Rights Management.” A framework that prevents illegal copying and leakage of digital content such as music, video, and image through encryption and promotes the legal distribution and utilization thereof, and technology to be use for these purposes.

*2 ICT... Short for “Information and Communication Technology.” A general term for technologies related to information processing and communication. Generally referred to as “IT” in Japan, but known as “ICT” internationally.

Third-parties Individuals

PLRPLR

Apps for personal

use

Apps for personal

use

Apps for personal

use

The only PDS with all of the following advantages.

The most economical, secure, and convenient method to respond to GDPR, etc.

1. Low cost ... Dedicated servers not required

2. Security... Data subject. DRM*1 implementation + permission setting through the app

3. Traceability ... Ability to trace data usage

4. Multi-function ... Easy customization according to business type

5. Easy-to-use ... IT literacy and expert knowledge not required

PLR (personal life repository)

……PLR cloud

Normal-ization

Secret key

sharingTraceabilityLow cost

Easy- to-use

SecurityMulti-

function

1 2 3 4 5

Encryption

Safety and Security

1 Emergency support for the userIt takes eight minutes on average for the ambulance to arrive after a 911 call. Subsequent rehabilitation depends on the rele-vant basic life support measures. It has been found that the probability of survival almost doubles if a bystander takes appro-priate life-saving measures while waiting for the ambulance. This app helps with emergency medical care and offers guidance for basic life support, request for relief, and the search for hospitals and AEDs, among others.

2 Emergency support for the user’s familyEmergency guidance for adults and children ▶ Helping the user determine how to respond: whether the symptom or in-jury warrants urgent attention or a wait-and-see attitude.First aid guidance ▶ First aid guidance provided by the Japanese Red Cross Society, indicating how to treat a bone fracture, dislocation or burn, as well as precautions to prevent accidents.

3 Location of medical institutions and AEDs in the surrounding areaSearch for AEDs/search for medical institutions ▶ You can search a map for AEDs and medical institutions located nearby. The map also indicates the distance from the present location and the name of the medical institution. Detailed infor-mation is available by tapping on the list.AED information: Provided by Japan AED Map Hospital information: SCUEL database provided by mecompany, Inc.

*The location display service is only available in Japan.

4 Display of medical checkup results and amount of activityDisplay of medical checkup results, My Medical Chart and amount of activity ▶ Showing the results of medical checkups (in the form of a historical chart)

*You can input the required data by yourself, or import an XML file after giving written consent for the use of personal infor-mation. You can also input data on pre-existing conditions, regular medication and an oral medicine prescription history. The amount of activity (number of steps and calorie consumption) can be shown on a chart.

5 Health supportDisplay of calorie intake and advice on diet and exercise ▶ Input dietary data, and the calorie intake appears on the screen. (You can input data by “text,” “selection from the menu of major stores” and “photo shoot.”) Based on the data, an artificial intelli-gence nutritional manager gives advice on diet and exercise.

Smartphone App for First-Aid and Health Promotion “MySOS forME”This app helps users respond to an emergency by indicating the action to be taken, providing guidance for first-aid treatment and indicating the location of medical institu-tions and AEDs in the surrounding area. Linked with a wearable device, it also facilitates health promotion by measuring the user’s pulse, steps and amount of activity and indicating the results of previous medical checkups, as well as providing advice and calories based on the input of dietary data. We are considering the possibility of linking the app with a variety of wearable devices in the future, thereby diversifying the user environments and service forms, including a Health Option to control blood pressure and glucose levels, a Sports Option with GPS to measure acceleration, a Monitoring Option to detect a fall or severe injury, and a Field Option to detect the occurrence of heat stroke or an accident.

Safety and Security

Participated in “medical training for large-scale earthquakes” as an LPWA telecommunications carrierThe “medical training for large-scale earthquakes” was held on September 7, 2019, under the assumption that an earthquake directly hits Tokyo metropolitan area. As an telecommunications carrier, the Company provided LoRa transmission and reception antennas and LoRaWAN telecommunications services.

Training summary▶ Generally, disaster-struck regions may face the disruption of telecommunications networks. This training is conducted under the assumption that Tokyo’s telecommunication network is severed. Disaster Medical Assistant Teams (DMAT) usually bring a satellite telephone or wireless radios to the disaster site, but it is also necessary to prepare for situations in which the telecommunications equipment fail to receive. This time, LoRa devices, equipped with alarms, were brought and used in the training as a communications method to inform team members of emergency situations, whereby the devices, with wide coverage area and high portability, proved to be highly effective.

Device specs:• Telecommunications standard: LoRaWAN (bidirectional)• Effective area: 1-5 km• Communication method:

1. Device▶Server: Transmitting positional information 2. Server▶Device: Flashing LEDs and alarms

Supporting hospitals

LPWA base station on the rooftop of a hospital in Tokyo area

Emergency headquarters

DMAT members

DMAT members

Display call command

Satellite control center

Satellite

Disaster base hospitals covering the vicinity

Internet

Server

LoRa device

Visibility of about 5 km

LoRa transmission and reception antennas

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11 12

Board of DirectorsWith a view to responding appropriately to the surrounding business environment, Ryoden Corporation introduced a Corporate Officer system to clarify job responsibilities

by speeding up the process of managerial decision-making and separating the supervisory and execution functions to improve agility of execution. Thus, the annual general

meeting held on June 28, 2018 adopted a resolution to modify the Articles of Incorporation to set the number of Board members at twelve or less. As a result, our Board of

Directors now consists of seven directors (including three outside directors).

Nomination & Compensation Advisory CommitteeIn March 2019, in an effort to ensure fairness, transparency, and objectivity in the procedures regarding the nomination and compensation of directors, as well as to fulfill

corporate governance, we established the Nomination & Compensation Advisory Committee, the majority of which is comprised of outside directors. The Committee delib-

erates according to consultations received from the Board of Directors after which the Committee advises the Board of Directors in matters related to the nomination and

compensation of directors.

Executive CommitteeIn order to deliberate on crucial matters regarding the agenda items of the meeting of the Board of Directors and the business execution of the Company, Ryoden Corporation

established the Executive Committee to hold active discussions. Moreover, standing corporate auditors are also in attendance to ensure proper discussions.

Auditor SystemRyoden Corporation’s Audit & Supervisory Board consists of two standing members and two external members. They attend the meetings of the Board of Directors as well

as other key meetings under the audit policy and audit plan drawn up by the Audit & Supervisory Board, and they audit and oversee legal compliance by the directors in

performing their duties, verifying reports from directors and employees of the Ryoden Corporation and its Group and conducting investigations into the business operation

and financial standing of each company. To ensure that audits are conducted adequately, they also regularly exchange information and views with the Company’s Internal

Audit Division and auditing firm.

General Shareholders’ Meeting

Board of Directors

President

Corporate Officer

Divisions, branch offices, Group companies

Internal Audit Division

Audit & Supervisory Board

Auditing firm

Executive Committee

Internal Control Supervisory Committee

Ethics and Legal

Compliance Committee

Risk Management Committee

Committee for Assessment of Internal Control in accordance

with the Financial Instruments and

Exchange Act

Corporate Governance

Corporate GovernanceUnder our Management Principles, the Code of Conduct stipulates that all officers and employees of the Ryoden Corpora-tion and its Group will “promote the development of corporate governance that is beneficial and adequate for business management.” We carry out a wide range of measures to ensure the transparency, ethicality and accountability of our business, information disclosure, compliance with laws, regulations and rules, and the development of a governance sys-tem required by the Corporate Governance Code.

Corporate Governance System

Internal Control Supervisory CommitteeAs an oversight body, we established the Internal Control Supervisory Committee, chaired by the CEO and made up of the Executive Officer with titles, to discuss basic

policies on the internal controls of the Ryoden Corporation Group and verify the activities of other committees.

Ethics and Legal Compliance CommitteeRecognizing compliance as a key managerial priority, we established the Ethics and Legal Compliance Committee chaired by the responsible director and appointed a Legal

Manager to take regular action to ensure legal compliance, fairness and morality in our activities.

Committee for Assessment of Internal Control in accordance with the Financial Instruments and Exchange ActFor the purpose of complying with the internal control reporting system stipulated by the Financial Instruments and Exchange Act and ensuring the credibility of our financial

reporting, we established the Committee for Assessment of Internal Control in accordance with the Financial Instruments and Exchange Act chaired by the responsible di-

rector. The Committee evaluates our internal control system based on the results of internal audits that the Internal Audit Division and Information System Division perform

in accordance with each assessment criterion with respect to the implementation status operating results in the Company.

Risk Management CommitteeTo ensure the continuity and stable development of our business, we established the Risk Management Committee chaired by the responsible directors. The Committee

conducts group-wide risk analysis, and in order to mitigate the risks identified therein, draws up countermeasures considering the probability of occurrence of risks and the

level of impact, etc., and further monitors implementation status.

System of internal controls

The Company deems thorough compliance as one of our important managerial issues. We have therefore set compliance rules in place and have strived to thoroughly

disseminate them to all officers and employees of the Ryoden Corporation and its Group through education. In addition, in an effort to strengthen and expand the system of

internal controls of the Ryoden Corporation and its Group, we established the Internal Control Supervisory Committee chaired by CEO to oversee activities involving internal

control.

Furthermore, to ensure the thorough compliance in our business activities, we established the Ethics and Legal Compliance Committee chaired by the responsible director,

which periodically stipulates matters related to compliance and puts them into practice. On the other hand, the Internal Audit Division audits the status of compliance in the

Ryoden Corporation and its Group. Additionally, we stipulated our resolute stance against anti-social forces in the Ryoden Company Behavior Principles and have thoroughly

disseminated the guidelines to all officers and employees of the Ryoden Corporation and its Group, always paying attention to the maintenance of system. If officers and/or

employees of the Ryoden Corporation and its Group become aware of behavior that is or may be in violation of compliance, they can report the incident using a hotline

system and will receive no disadvantageous treatment.

Compliance system

We stipulated the Basic Rules on Risk Management and, through a Risk Management Committee chaired by the responsible director, identify risks and formulate counter-

measures based on the probability of occurrence of risks, the level of impact, etc. Important matters are discussed at the Executive Committee and the meetings of the

Board of Directors. In this way, we implement multifaceted risk management throughout the Ryoden Corporation and its Group.

Risk management

Ryoden Corporation continuously implements countermeasures against unauthorized access to our internal information systems and confidential information, as well as

measures against personal information leaks. In addition, we thoroughly train all officers and employees of the Ryoden Corporation and its Group with respect to aforemen-

tioned matters. We have reinforced security through such means as establishing office security guidelines, applying zone-control to each business location, and using IC-

chip cards for access control. Additionally, we have introduced an integrated management system for computers and servers, for business use, and removed software that

clients have decided not to use.

Initiatives on information security

Nobuo Shogaki Director of Board President*

Hideharu Yamazaki Director of Board Senior Executive Officer*

Shoji Kitai Director of Board Senior Executive Officer

Osamu Tanaka Director of Board Senior Executive Officer

Masamitsu Miyagishi Outside Director

Yoshiko Shirata Outside Director

Masahiro Muroi Outside Director

Officers

Akira Sano Auditor

Reiichiro Kito Auditor

Kentaro Tani Outside Auditor

Hideyo Ishino Outside Auditor

Yasuhiro Souda Senior Executive Officer

Hitoshi Chihara Senior Executive Officer

Masatoshi Nakamura Senior Executive Officer

Shunichi Higashi Senior Executive Officer

Yoshiaki Ogawa Executive Officer

Akira Noda Executive Officer

Takahiro Ozawa Executive Officer

Kazumoto Yogosawa Executive Officer

Ko Oniwa Executive Officer

Toshiaki Natsume Executive Officer

Yasumaru Tokiwa Executive Officer

*Representative directors

Nomination & Compensation

Advisory Committee

Appoint or dismiss Appoint or dismissAppoint or dismiss

Report Report

AdviceReport

Report Instruct or supervise Instruct

Report

Report

Report

Instruct

Instruct or supervise

Report

ReportReport

Report

Audit

Coordinate

Coordinate

Select, remove or supervise

Instruct or supervise

Instruct or supervise

Instruct or supervise

Instruct or supervise

Consultation

Audit Audit

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13 14

The three integrated elements of HR management

Human resources management at Ryoden Corporation is underpinned by one basic principle: pursuing the maximum results for both employee and company. We seek to

enable our people to produce results and, through their work, to increase their own worth in their quest for individual self-fulfillment.

A system of rewards based on each person’s skill level, function, and performanceWe value not just quantitative outcomes but also accomplish-

ment of qualitative behavioral process objectives, thereby nur-

turing a culture that enables employees to set their sights high.

We also draw up a separate training and assignment sheet on

each employee to facilitate their personal development.

A multifaceted approach to education and training

We have a full range of off-the-job training programs based on education in the workplace through people’s work.

Starting from training for new hires, we offer various training programs for employees, which includes training to improve personal and business skills by grade, voluntary

training regardless of grade, training to gain expertise and skills required for the relevant position or task, technical education to promote solution business in collaboration

with relevant divisions, and overseas training with the aim of developing human resources with higher global skills. In particular, as we believe that improvement of communi-

cation skills for the establishment of self-distribution network-type organization is a top priority, we work on such efforts through practical training and management training.

English proficiency trainingAn off-JT program to improve English proficiency through group work with foreign nation-

als, thus promoting crosscultural understanding and global communication skills.

Team-building program for new employeesIn a training facility deep in the mountains, new employees learn firsthand the indispensabil-

ity of teamwork by tackling difficult assignments together while preparing their own meals.

They also develop communication skills that will help them understand each other better.

Together with Our Stakeholders

Our Responsibility to Employees and Their FamiliesTo provide a pleasant working environment for all employees, and to ensure that they find their job rewarding, continues to grow through their job, and develop their skills to work actively in a global scale: these are the basic goals of the Ryoden Corporation Group’s human resources policy. To that end, we respect the diversity of employees and strive to provide em-ployees and their families with a greater sense of security.

Creating a rewarding workplace

We are seeking to energize and ensure the optimal use of human resources by providing opportunities for a wide range of talents and embracing the capabilities, person-

alities and differences of individual employees. Since April 2018, we have promoted a new personnel system to transform the working style.

Introduction of a new personnel system. We will eliminate the line between the main career track and the clerical career track in order to promote the mobility and flexibility of jobs, expand the fields of occupation and add depth to tasks, without the limitations of the existing framework.

1

Empowerment of women. We will seek to create a corporate culture that links the advancement of women to the development of the workplace by expanding the fields of occupation for women while considering the specific working environment facing female em-ployees.

2

Redesigning of career from 60. In order to encourage the effective reemployment of senior talented staff and leverage their wealth of experience and capabilities, we will develop a system for matching their desire to work with the employment needs of the company.3

Towards a self-distribution network-type organization, each section in the Group is working on a project where employees classify and review tasks while monitoring the communication status in their section.In an effort to improve the quality of our work, all employees up to and including managers participate in the project. This initiative not just improve the autonomy or work efficiency for a team but also expand individual work field and deepen work duties without being unnecessarily adhere to conventional vision of work practices, while also promoting the diversification of work styles.

4

Response to changes in working style

Ryoden Corporation seeks to build flexible systems that enable various working styles. For example, we have established a working environment where even male employ-

ees can take paid holidays by such means as extension of period for parental leave as well as provision of three paid holidays for parental care. In addition we have also

established a half-day system that allows employees to take leave by the hour, and increased the amount of subsidy for the purpose of childcare or nursing care in our

welfare system, “cafeteria plan.” Furthermore, we have adopted an expanded flex-time system for the purpose of childcare or nursing care so as to develop working envi-

ronment where employees can work without anxiety.

Striking a work-life balance and embracing diversity

The Company has taken the following initiatives above and beyond the statutory requirement so that our employees may reconcile work with child-rearing.

First, employees may take time off from work before and after the birth of a child in the form of paid maternity or paternity leave. Second, we apply the short working hour

scheme for childcare until the child reaches school age. Third, we allow employees to retain unused annual paid holidays up to a certain limit. The paid holidays thus retained

may be used when the employee has used up the childcare leave but cannot find a nursery for the child. We currently implement a General Employer Plan of Action under

the Act on the Advancement of Measures to Support Raising the Next Generation of Children.

Initiatives in response to the Act on Advancement of Measures to Support Raising the Next Generation of Children

We have prepared the following Plan of Action to develop an enabling working environment for the employees and leverage their potential to the full:

Period: April 1, 2018 to March 31, 2021

Description Objective: Establish a Committee for Promotion of Working Style Transformation to examine how to develop an environment for the further empowerment of employees.

Action: Launch the Committee for Promotion of Working Style Transformation to develop an enabling environment by taking concrete action and carrying out the PDCA cycle.

Ryoden Corporation Plan of Action

Educate

Full range of training programs: by job rank and specialty, for selected employees,

on globalization, etc.

Assign

Respect each individual, rotate people systematically

for training purposes

Evaluate/reward

Salary and benefits, commendations, special

appointments and promotions

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15 16

Together with Our Stakeholders

Together with local communitiesThe Ryoden Corporation Group does business globally, with 31 operational sites in Japan and 19 operational sites overseas. Each of our operational sites performs its activities while being supported by local community. In order for business activities to be operated smoothly, gaining the understanding and cooperation of local community is indispensable. We place importance on our communications with local community, and make constant efforts to maintain close ties with it through our business activ-ities and contributions to region.

Global Environment Conservation Projects in FY 2018

Head Office/Tokyo Branch Office/Ryosho Techno

Bureau of Environment, Tokyo Metropolitan Government, Kiyose Nature Protection Council, Environmental Study Association

Organized by

Total participants

154May, November

Held in

Participation in Tokyo Greenship ActionActivities for the “Matsuyama Green Belt Conservation area in Kiyose” were cooperatively carried out by the Tokyo Metropolitan Government, NPOs, and companies.

Kansai Branch Office: Osaka District

Osaka Prefectural Government

Organized by

Total participants

77December, March

Held in

Participation in the Osaka Adopt-a-River Program

Cleanup activity on the Naniwa Bicycle Road located along the bank of the Kanzaki River, Osaka City

This activity is to ensure that the next generation will take over an urban forest where diverse flora and fauna inhabit.

Nagoya Branch Office

Nagoya Higashiyama Forest Conservation Group in cooperation with the City of Nagoya

Organized by

Total participants

129May, December

Held in

Participation in the Nagoya Higashiyama Forest Conservation Project

Participation in the Lake Inawashiro Cleanup Project 2018

Fukushima Central Television, 24-Hour Television Charity Committee

Organized by

Held in

September

Total participants

10

Total participants

31

Total participants

18Total

participants

19

Total participants

27

Tohoku Branch Office

Participation in a casual event at the Naka Ward Volunteer Center, City of Yokohama

The following groups in Yokohama City: Naka Ward Social Welfare Council, Naka Ward Residents Club, Naka Ward Volunteer Liaison Council

Organized by

Held in

October

Kanagawa Branch Office

Maintenance of grounds (mowing) at the Shimotsuke Sanrakuen children’s home

Shimotsuke Sanrakuen, Kitakanto Branch Office

Organized by

Held in

June

Kitakanto Branch Office: Utsunomiya District

Cutting bamboo grass around the Kakumanbuchi Wetland on Mount Akagi

Committee for Preserving the Natural Environment of Mount Akagi

Organized by

Held in

October

Kitakanto Branch Office: Maebashi District

Cleanup of Hamdeok Beach, Jeju Island, South Korea

★Ryosho Korea Company, Limited

Cleanup of Yellow River Park

Gwinnett County, Georgia, U.S.A.Organized by

Held in

September

Total participants

1

★Ryosho U.S.A., Inc.

Cleanup of Guoshengpu Beach, Wanli District, New Taipei City

Taiwan Environmental Information Association (TEIA)Organized by

Held in

May

Total participants

9

Ryosho Taiwan Company, Limited

Cleanup of Baiyun Mountain, Guangzhou

Independent projectOrganized by

Held in

June

Total participants

8

★Ryosho Electronics (Shanghai) Guangzhou branch

Cleanup of Dalian Botanical Park

Independent projectOrganized by

Held in

May

Total participants

13

★Ryosho Electronics (Shanghai) Dalian branch

Weeding and cleanup of the Xin Hongqiao Central Garden

Ryosho Electronics (Shanghai) Co., Ltd.

Tree planting in Sai Kung West Country Park

Ryosho Hong Kong Company Limited

Mangrove afforestation at Bangpu Recreation Center, Samut Sakhon Province

Ryosho (Thailand) Co.,Ltd

Cleanup of East Coast Park

Independent projectOrganized by

Independent projectOrganized by

Independent projectOrganized by

Government of Hong KongOrganized by

Independent projectOrganized byHeld in November

Held in March

Held in September

Held in AprilHeld in October

Total participants 13

Total participants 25

Total participants 6

Total participants 22Total participants 40

Ryosho Techno Singapore Pte. Ltd.

Planting of tulip bulbs in the gardens of the Hiroshima Peace Memorial Park

Placement of wood chips in green belt areas

Hiroshima Branch Office

Weeding and cleanup of an irrigation channel near the office, as well as in and around the office parking lot

Independent projectOrganized by

Held in

March

Shikoku Branch Office

Participation in the Fukuoka Flower FestivalPlanting tulip bulbs in the flowerbeds in the park

Fukuoka Municipal GovernmentOrganized by

Held in

November

Kyushu Branch Office

Participation in the Sea Turtle Nesting Beach Cleanup

Hamamatsu Municipal GovernmentOrganized by

Held in

May

Shizuoka Branch Office: Hamamatsu District

Participation in the Shizuoka Adopt-a-River Program

Shizuoka Municipal GovernmentOrganized by

Held in

October

Shizuoka Branch Office: Shizuoka District

Cleanup of Kawada Park and Access Roads

Independent projectOrganized by

Held in

June, November

Ryosho Techno Osaka Branch Office

Participation in the All-Kyoto Beautification Drive

Environmental Improvement Bureau, Kyoto Municipal Government

Organized by

Held in

November

Kansai Branch Office: Kyoto District

Greenery Policy Section, Greening Promotion Division, Urban Development Department, Municipal Government of Hiroshima

Organized by

Total participants

15December

Held in

★Activities newly started in FY 2018

Total participants

15

Total participants

15

Total participants

26

Total participants

20

Total participants

11

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17 18

Environmental Report

Environmental ReportThe Ryoden Corporation Group, recognizing the environment as one of our business priorities, is committed to staying close to cus-

tomers and working with our trusted partner companies to provide the best solutions focused on network and monitoring technologies.

Going forward, we will continue to share environmental and health values among all employees and pursue environmental manage-

ment.

Environmental activity initiatives in FY 2019

1 Initiatives for creating a low-carbon society• We newly establish targets for Total Carbon Management (TCM) associated with the figures in our business plans (sales),

and aim to integrate our management with environmental activities.

2 Initiatives for creating a recycling-oriented society• Reduce the amount of final waste disposal • Continued use of FSC certified paper

3 Promotion of social contribution activities with due consideration for biodiversity• Continue and invigorate global environmental conservation activities

Results of environmental activities in FY 2018

<GHG emissions (A)

2,375 t-CO2

Burden on the environment (negative impact)

Contribution to the reduction in GHG emissions (B)

7,871 t-CO2

Benefit for the environment (positive impact)

Total Carbon Management (TCM)* • For the FY 2018 results, we met our goal throughout the Group, achieving (A) was

less than (B).➡Because we largely exceeded our target, we will have to revise our indicators.

* Total Carbon Management: Ryoden Corporation’s original environmental activity aimed at ensuring that Ryoden Corporation’s contribution to the reduction in GHG emissions (B) exceeds the GHG emissions from its business activities (A).

* GHG: Greenhouse gases

Waste• FY 2018 target was met (less volume of final waste disposal from the previous

fiscal year)• Promoted the reclaiming of disposed stock as valuable and reduced industrial

waste discharge

Continued implementation of social contribution activities with due consideration for biodiversity• In FY 2018, RUS and RSH (Dalian and Guangzhou, China), and RKR started so-

cial contribution activities (see pages 15 and 16).

Use of FSC certified paper• The entire company continues to use FSC certified paper for photocopier, includ-

ing our overseas sales companies.

Scope 1, 2, and 3 GHG emissions in FY 2018

Chemical Substance Management in Ryoden Corporation Group

Over 6,000 inquiries processed under chemSHERPA

The Ryoden Corporation Group signed onto the chemSHERPA scheme developed by

the Ministry of Economy, Trade and Industry in April 2017. We responded to only 48

inquiries in the first half of FY 2017, mainly because we still used AIS data in most

cases. However, that number increased to 3,303 in the second half of FY 2018, re-

sulting in a total of over 6,000 inquiries processed since April 2017.

Respond to diverse needs

In addition to chemSHERPA, the Ryoden Corporation Group responds to a wide variety

of needs including for JAMA sheets, ICP data and non-use guarantees. We also com-

ply with ProChemist/AS (electric machinery and electronics industries) and IMDS (au-

tomobile industry), annually providing customers with some 20,000 pieces of

information.

Aiming for higher value added

We are seeking to communicate on the management of chemical substances in prod-

ucts with any suppliers who do not fully understand its importance. We also encourage

suppliers who have not been able to sign onto chemSHERPA to participate in a semi-

nar and we provide consultation on questions and uncertainties.

We will continue these activities for the proper management of information on chem-

ical substances in products and the smooth communication of information.

With the expansion of efforts in chemical substance management on a global scale, companies are increasingly faced with the challenge of complying with chemical sub-

stance management regulations in foreign countries. The Ryoden Corporation Group stays focused on the proper management of information on chemical substances in

products and the smooth communication of information.

Response to chemSHERPA inquiries

* Response rate - Inquiries processed under chemSHERPA/Total inquiries processed

H1 2017

(No. of cases)

■Inquiries processed ■Response rate*

(%)

H2 2017 H1 2018 H2 2018

0

1,000

2,000

3,000

0

20

40

60

3,303

1,490

1,245

48

31.031.0

22.622.6

12.812.8

0.40.4

Changes to environmental activities in FY 2019

FY 2018 Introduction year of TCM• Target A < B ➡ Results largely exceeded the target

• The total amount of the entire Group was evaluated to obtain results. ➡ Sense of participation in TCM at each

operational site was weak.

FY 2019 Review of TCM target setting• Our target figure is FY 2018 B/A result multiplied by the sales growth rate on a planning basis. We aim for even

higher B/A in FY 2019. (Intend to make an association between business plans and environmental activities.)

• In FY 2019 we will set numerical targets for each operational site and include them in TCM.

FY 2019 B/A > FY 2018 B/A ×FY 2019 sales (business plan)FY 2018 sales (actual results)

Ryoden Corporation Group environmental targets for FY 2019

Items FY 2019 targets

Initiatives for creating a low-carbon society

GHG emissions = A• FY 2018 B/A ×

Set the above as our target, and aim to achieve even higher B/A in FY 2019.Contribution to the reduction in GHG emissions = B

Initiatives for creating a recycling-oriented society

Paper usage• Continued use of FSC certified paper• Continued consideration of reducing the use of forms

Discharge of waste • Reduced amount of final waste disposal compared to the previous year

Promotion of social contribution activities with due consideration for biodiversity

• Frame a draft and continue activities at each business location

FY 2019 sales (business plan)

FY 2018 sales (actual results)

FY 2017 FY 2018GHG* emissions

(t-CO2) GHG emissions

(t-CO2)Comparison with

previous fiscal yearTotal GHG emissions (Scope 1, 2, and 3 combined) 7,119,537 7,227,483 102%

Scope 1 and 2 Company cars, offices 1,787 1,773 99%Scope 3 7,117,750 7,225,710 102%

Cat.1 Products and services purchased 759,688 858,498 113%Cat.2 Capital goods 1,135 1,474 130%

Cat.3Fuel and energy-related activities not included in Scope 1 or 2

– –

Cat.4 Transport, distribution (upstream) – –Cat.5 Waste from business activities 4 4 100%Cat.6 Travel 518 522 101%Cat.7 Commuting by employees 269 257 96%Cat.8 Leased assets (upstream) – –Cat.9 Transport, distribution (downstream) 579 596 103%Cat.10 Processing of marketed products – –Cat.11 Use of marketed products 6,355,557 6,364,359 100%Cat.12 Disposal of marketed products – –Cat.13 Leased assets (downstream) – –Cat.14 Franchise – –Cat.15 Investment – –

Scope 1, 2, and 3 calculation formula In reference to the guidelines posted on the Ministry of the Environment website (https://www.env.go.jp/earth/ondanka/supply_chain/gvc/en/), we define the

service life of products, operating time, power consumption by products in use, and various intensity measures in order to calculate the emissions.

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Susta inabi l i ty Report 2019

September 2019

Household Environmental AccountingAs part of our efforts to encourage eco-friendly behavior at home, we calculate and identify our greenhouse gas (GHG) emissions based on the total amount of electricity, gas, water, kerosene, and gasoline used at our employees’ households. Our “household environmental ac-counting” exercise, launched in 2006, aims to encourage ecological and economical behavior by constantly reviewing living activities from an environmentally sound perspective.In addition, employees’ rising awareness of environmental action has been reflected in their proactive efforts toward environmental improve-ment in their private as well as public life. Since 2017, employees of our overseas subsidiaries have also participated in this exercise, with 2018 seeing the largest number of finishers ever. We will keep this up as an environmental activity that our employees can continue while enjoying the benefits to their household budgets. The following graph shows the amount of GHG emissions per household and the trends of participants and finishers in the exercise.

3-15-15, Higashi Ikebukuro, Toshima-ku, Tokyo 170-8448

TEL: +81-3-5396-6111 FAX: +81-3-5396-6448

http://www.ryoden.co.jp

20152014

Emissions (kg) No. of persons

2016 2017 2018

4,000

3,000

2,000 0

20

40

60

80

100

120

GHG emissions per household and the trends of the numbers of participants and finishers

This report uses easy-to-read fonts based

on the concept of Universal Design Font.

This report was printed using environ-

mentally friendly vegetable-based ink.

見やすいユニバーサルデザインフォントを採用しています。

Ryoden Corporation was ranked 10th among trading firms in the 22nd Nikkei Environmental Management Survey held by Nikkei Inc. Since 1997, Nikkei Inc. has

conducted this survey once a year. The survey evaluates initiatives that balance between corporate environmental measures and business operations. From late

December 2018 to early March 2019 the survey was sent out to major listed and non-listed companies, including 1,731 manufacturers and 1,318 non-manu-

facturers. The survey received responses from 360 manufacturing companies and 239 non-manufacturing companies. In the trading firms category, companies

were evaluated using four indicators: (1) system for promoting environmental management; (2) pollution countermeasures and biodiversity support; (3) resource

recycling; and (4) climate change countermeasures.

No. 10 among trading firms in the 22nd Nikkei Environmental Management Survey

■GHG emissions per household ■No. of participants ■No. of finishers

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