Accountability to Stakeholders

ITOCHU emphasizes dialogue with its shareholders, investors, and other stakeholders from the perspective of achieving sustainable growth and enhancing corporate value over the medium to long term. We now strive to reflect input obtained in investor meetings, general meetings of shareholders, and one-on-one meetings into our management strategies and financial and capital policies. Through commitment-based management, we are striving to expand corporate value and sustain a positive cycle through effective engagement. Investor relations activities in FYE2023 include the followings.

Activity	Times	Content
Investor briefings on financial results for analysts and institutional investors	4	Held presentations for analysts and institutional investors every quarter, through investor briefings or web conferences.
Briefings on operating segments, projects and site tours and sustainability briefing for analysts and institutional investors	1	We hold meetings for analysts and institutional investors to explain specific themes, such as strategies of individual operating segments. (Topic of FYE2023 : Sustainability Briefing )
Overseas IR roadshow	5	Visited Europe, North America, and Singapore to have individual meetings with overseas institutional investors.
Conferences sponsored by securities companies	6	Attended conferences sponsored by securities companies and held individual meetings mainly with overseas institutional investors.
Meetings for individual investors	3	Held meetings for individual investors through web conference and at securities companies etc.
Disclosure of IR-related materials on website	－	Disclose Investor Relations-related materials on our website. Following materials are available: financial statements, presentation materials for investors’ meetings (including Q&As), materials used in segment-specific briefings, TSE filings, annual securities reports (yuka shoken hokokusho), quarterly securities reports (shihanki hokokusho), the status of corporate governance, convocation notices for General Meetings of Shareholders, reports (hokokusyo) and annual and notice of general meeting of shareholders.

Examples of Measures Launched as a Result of Dialogue

Q1：The shareholder returns policy unveiled along with “Brand-new Deal 2023,” the medium-term management plan, was vague and less attractive than expected.

A1：We again studied market expectations gained through dialogues with investors and shareholders after announcing the medium-term management plan, and announced the New Dividend Policy with FYE 2022 Q2 financial results. Also, we announced repurchase of own shares* to increase the shareholder returns on January 2022.
＊Total number of shares to be repurchased: 20,000,000 shares (maximum)
　Total amount: 60,000,000,000 yen (maximum)

(Reference)

Brand-new Deal 2023 New Dividend Policy

Announcement Regarding Repurchase of Own Shares

Q2：ITOCHU’s policies for the coal-related business should be announced.

A2：We announced Coal-related business policy on February 2019. We also announced “Promoting decarbonization by fully divesting from thermal coal mining assets.” on January 2021. Only 3 months later, we sold Drummond thermal coal mine interest in Colombia, which was the largest thermal coal asset for ITOCHU. Further, we sold Ravensworth North thermal coal mine interest on March 2022.

(Reference)

ITOCHU’s coal-related business policy

FYE 2022–2024 Medium-Term Management Plan P11

Q3：Please outline initiatives on climate change.

A3：After conducting a TCFD scenario analysis, we announced our endorsement of the TCFD. Further, we set and announced a roadmap for achieving the Japanese government’s goal of carbon neutrality by 2050 in “Brand-new Deal 2023,” the medium-term management plan. In addition to the steady implement of the policy for the coal-related business, we actively work on renewable energy businesses such as energy storage systems business to reduce GHG emissions. We respond to the needs of society and customers through our operation as a general trading company.

(Reference)

Participation in TCFD Consortium (Task Force on Climate-related Financial Disclosures)

Brand-new Deal 2023

Q4：I would like to hear the Company’s thoughts on parent-subsidiary listings.

A4：We provided detailed explanations on the significance of owning listed Group companies and benefits for subsidiaries in our Corporate Governance Report and Annual Report. The detailed explanations are updated as needed.

(Reference)

Corporate Governance

Annual Report 2022 P101

Q5：Please present the concrete outcomes of collaboration with CITIC and CP Group, as well as the delisting of FamilyMart.

A5：In the Annual Report, we presented “Advertising & Media Businesses” and “Making the Supply Chain More Efficient” as concrete results of privatization of FamilyMart. We recognize the needs to address the progress of collaboration with CITIC and CP Group, which is slightly behind the schedule.

(Reference)

Annual Report 2021 P62-65

Actions towards achieving management that is conscious of capital costs and stock prices

With our corporate mission “Sampo-yoshi,” we allocate management resources based on a comprehensive understanding of ITOCHU’s cost of capital. In line with our management strategies, which take into account the business environment, we prioritize resource allocation accordingly. Additionally, while we consider ROE as an important indicator, to actively practice management that is conscious of the cost of capital, we strive to maintain and enhance a high ROE that surpasses ITOCHU’s cost of capital and to optimize the balance between our financial soundness and shareholder returns. Our management policies and strategies that enable these efforts are clearly disclosed in our management plan and medium-term management plan, as well as in our annual report. We also conduct thorough explanations during shareholder meetings, business results summary briefings, and other various explanatory sessions to ensure understanding of shareholders and investors, etc.

Policy / Target and Evaluation
In our medium-term management plan, we have set a target range for ROE of about 13% to 16% during our medium-term management plan period. For FYE 2022 and FYE 2023 results, our ROE stood at 21.8% and 17.8% respectively, surpassing and achieving the ROE target.
Additionally, the PBR of FYE 2022 and 2023 results was 1.45 times and 1.30 times respectively. During FYE 2022 to 2023, our stock price reached record high 22 times.

(Reference)

Corporate Governance Report