Prevention of Pollution and Resource Circulation

Action Plan

Risks Opportunities
  • Negative impacts on the natural environment including those related to resource circulation
  • Deterioration of relations with local communities and subsequent loss of social license to operate
  • Industry exhaustion due to increased price competition
  • Increased resource demand due to population growth and enhanced living standards in emerging economies
  • Creation of customer trust and new business opportunities through stable and sustainable supply chain practices
Materiality SDGs Targets Issues to address Business area Commitment Specific approach Performance indicators Degree of Progress
Textile Company
Ensure stable procurement and supply
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Stable supply of industrial resources and materials Environmentally friendly materials (sustainable materials) such as recycled fibers We will accelerate initiatives for the recycled fiber business, not only to create new businesses but also to help solve the global problem of apparel waste and reduce petroleum-derived materials. Work aggressively on the recycled fiber business and lead the industry in promoting the use of sustainable materials. Commercialize the recycled fiber business as soon as possible. Increase the ratio of sustainable materials to materials we trade. We are aiming to strengthen our supply chain from raw materials to finished products, with a focus on sustainable raw materials. Thus, we have conducted multiple investment and planning projects for suppliers of Lyocell and recycled polyester and these are progressing well.
Machinery Company
Respect human rights
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Improving hygiene infrastructures Environmental projects We will contribute to improving the hygiene environment, the development of economic activities, and the protection of the global environment through the appropriate treatment and effective use of waste. Expand environment projects to promote the appropriate use and treatment of the effective utilization of resources, and reduce the environmental impact. Expand and diversify the investment portfolio in the environment field.

Environment Sector

We invested in four Waste Management Projects in the UK and awarded a 25-year Waste Management and Resource Recovery Project in Belgrade, the republic of Serbia in 2017.

Policy and Basic Concept

Prevention of Pollution

ITOCHU's Environmental Policy states in item (3) that within its business activities, ITOCHU shall prevent and reduce environmental pollution caused by chemical substances and oils, reduce emissions of air pollutants, and reduce and properly process hazardous waste and wastewater. In addition, as stipulated in item (1) of our Environmental Policy, ITOCHU will fulfil its responsibility by enacting the following statement: We shall comply with international declarations, agreements, and treaties, as well as with the laws and regulations of the countries and regions in which we operate. We shall also comply with any other agreements that we have consented to.

Resource Circulation

As per item (4) of our Environmental Policy, ITOCHU "contributes to the formation of a circular society by promoting the sustainable use of resources (such as fossil fuels, minerals, food, animals and plants), resource conservation measures, and waste reduction and recycling across our business investments and the supply chain of our products and services."
On April 2018, we announced material ESG (environment, society, and governance) issues that must be managed for the sustainability of the business and society. Among them, the topic of "stable procurement and supply" stood out as one of our most important issues. We therefore aim to realize a circular society by incorporating environmental considerations, including biodiversity, making effective use of natural resources, and stably procuring and supplying resources in line with the demands of each country.

Ensuring Legal Compliance by the Chemicals Division

The chemicals and synthetic resins handled in the Chemicals Division and the products made with these are used in every aspect of our lives. This means that they are extremely useful. On the other hand, many of these chemicals are toxic or dangerous in nature. Therefore, they are regulated by a great many related laws and regulations in various settings (e.g., manufacture, sales, transportation and storage).
These chemicals are connected to serious problems concerning public health and environmental conservation. Accordingly, the laws and regulations on the trading of chemicals are diverse and extremely strict. The penalties for violating these laws and ordinances are also very heavy. Many chemicals require permission to be handled as products. However, if this permission is revoked as a result of violating laws and ordinances, it could seriously affect the business of the Chemicals Division.
There is an international trend to minimize risks at the level of the entire supply chain of chemicals. Against this background, both advanced nations and developing nations have started to introduce new regulations and to make large-scale revisions to existing regulations. Consequently, the regulatory environment in the handling of chemicals is expected to become ever stricter in the future.
With awareness of the above, we recognize the importance of compliance with laws and ordinances in addition to knowledge of products and the industry as a company that handles chemicals. Our basic policy is that each individual should engage in business in accordance with the requirements of laws and ordinances upon correctly understanding the laws and regulations concerning the products that they are in charge of handling.

Targets

ITOCHU has set the following three items as environmental targets for pollution prevention and resource circulation (FYE 2019) and is promoting initiatives to this effect.

  1. Prevention of environmental pollution and compliance with laws and regulations:
    We will perform advance environmental risk assessments according to the ESG Checklist for Investments for all investment projects. We will promote efforts to improve the management level by checking the environmental management system, compliance and environmental performance situation through internal audits. We will select group companies and then visit them to survey their environmental management situation.
  2. Promotion of awareness activities:
    We will hold workshops and promote learning on the Waste Management and Public Cleansing Law and the Soil Contamination Countermeasures Act for ITOCHU and group company employees. We will set target values and then review results based on them.
  3. Resource conservation, promotion of resource circulation, and understanding of results
    ITOCHU will set numerical targets for the reduction of the waste we discard, the promotion of recycling, and the reduction of our paper and water consumption even in our office activities in addition to considering the environment when performing our business activities. We will also gradually expand the scope of environmental performance data we collect from group companies in Japan and overseas offices to understand the actual situation and utilize that in our future environmental conservation activities.

In our Tokyo Headquarter building, we are implementing resource saving measures. Targets and indicators we track to manage our performance are noted in the table below. ITOCHU sets numerical targets for the reduction of the waste we discard, the promotion of recycling, and the reduction of our paper consumption.

  FYE 2019 (Results) Single Year Target Target for the Fiscal Year Ending March 31, 2021
Volume of waste discarded by our Tokyo Headquarters

Reduction of 35% compared to FYE 2011

Reduction of 10% compared to FYE 2011

Reduction of 20% compared to FYE 2011

Recycling rate in our Tokyo Headquarters

93%

90%

90%

Paper consumption in our Tokyo Headquarters

Reduction of 16% compared to FYE 2011

Reduction of 3% compared to FYE 2011

Reduction of 3% compared to FYE 2011

Structures and Systems

Due diligence regarding pollution prevention and resource circulation in business investment projects

We assess in advance the impact on the market, society and the environment by business investment projects in Japan and overseas engaged in by ITOCHU and our Japanese subsidiaries. We do this with the ESG Checklist for Investment, which includes assessment criteria to evaluate performance on pollution prevention and resource circulation among potential investments. We make requests to external specialist organizations to conduct investigations in advance for projects requiring a professional point of view. The project is then only undertaken upon confirming that there are no problems in the results of those investigations.

ITOCHU considers ensuring stable procurement and supply to be a material issue. We work to effectively utilize and to ensure stable procurement and supply of resources according to demand in each country with consideration for the environment (e.g., biodiversity). In doing this, we are aiming for a recycling-oriented society.

Compliance with laws and regulations in the divisions handling chemical substances

At ITOCHU, the Chemicals Division has cross-functional oversight of our management of chemical substances. This includes oversight of the sales departments that handle chemical substances, which sit within the Chemicals Division, as well as relevant subsidiaries that handle chemical substances. In addition, the Chemicals Division has oversight of any sales divisions and subsidiaries outside of their direct control if chemical substances are used.
We strive to comply with laws and regulations through a management method based on a combination of thorough inquiries to specialized external consulting organizations and the use of a centralized management system to track environmental legal compliance. The management system was developed internally in 2016 and allows us to confirm and record applicable laws and measures at the chemical substance level for each product. We also provide training and educational opportunities to relevant sales staffs, supplemented by e-learning materials and handbooks that summarize the main points of relevant laws.
The external consulting organization that we currently employ for chemical substance management is Techno Hill Co., Ltd. (Headquartered in Chuo-ku, Tokyo; Representative Director: Kazuyuki Suzuki). Techno Hill has comprehensive knowledge regarding the field of chemical substances and provides us with informed advice on management systems, applicable laws and regulations for each product, and general trends movements in the industry.

Management Structure for Emergency Response and Accident Response

ITOCHU responds as below in accordance with our accident and emergency response regulations.
If an accident occurs during the handling or storage of toxic or hazardous substances, we respond as follows in line with the Pharmaceutical Key Toxic and Hazardous Substance Risk Prevention Procedures Manual.

  • We will make reports as necessary according to the emergency contact network in the above manual. In addition, we will take prompt action to limit the risks caused by toxic and hazardous substances.
  • In the event of splashing, leaking, outflow, seepage or penetration underground, we will immediately notify the health care center, police station or fire department to that effect when there is a fear of a risk to the health of an unspecified or large number of people. At the same time, we will take measures to prevent risks to health.

Efforts

Acquisition of ISO22301 Certification Aiming for a Safe, Secure and Resistant-to-Disaster Tank Terminal

[Photo]
Tank Terminal

Nagoya Chemport, which is managed and operated by Chemical Logitec Co., Ltd., plays an important part in the supply chain that includes Nagoya and its environs. Its main business is to receive, store and dispense liquid chemicals at Nagoya Port No. 9.
The company spent two years educating and training its employees, enhancing its facilities and developing its structures with the aim of ensuring a safe, secure and resistant-to-disaster chemport. This has been done in preparation for the Nankai Trough Earthquake predicted to strike in the future based on lessons learned from the Great East Japan Earthquake that occurred on March 11, 2011. As a result of these efforts, the site acquired initial ISO22301:2012 certification on May 1, 2014; it was then re-certified on June 15, 2017.
ISO22301 is a management standard to minimize the impact on stakeholders, including customers, and elevate the abilities of organizations to continue providing services by promptly recovering from disasters and accidents that interrupt and hinder business. Nagoya Chemport broke ground to become the first company to acquire this certification in the chemical tank industry in Japan and among ITOCHU Group companies.
We are continuing to review issues inside and outside the organization and working to improve them. In FYE 2016, we provided safety measures training with a scenario of accidents occurring when there are few people to deal with them (e.g., at night and on holidays) in the presence of shippers. We also held night training again in FYE 2018 following on from FYE 2017 to check whether there were any problems with the support for that. We are continuing to work on ensuring safety in the event of a disaster with respect for human life as our number one priority. In addition, we repeatedly hold education and training for organizations and strive on a daily basis to respond to the trust placed in us by our customers.

Food Recycling

ITOCHU makes regular reports on the amount of food we discard and the amount we recycle in Japan to comply with the Food Recycling Law. We are striving to suppress the generation of waste and to promote recycling (e.g. conversion into feed) in line with the reference rate (recycling rate target).

Food Recycling Rate
FYE 2016 FYE 2017 FYE 2018 FYE 2019
Quantity recycled

Waste volume generated (Unit: t)

959.9

828.2

1,816.9

869.0

Amount of recycling (Unit: t)

567.7

544.9

620.6

454.9

Waste volume (Unit: t)

392.2

283.3

1,196.3

414.1

Target (recycling rate target by individual food related operator)

Reference rate

74.8%

75.8%

76.8%

77.8%

Percentage recycled

Recycling rate

64.3%

70.6%

34.2%

52.3%

  • In FYE 2018, 1,001.0 tons were discarded due to a warehouse fire.
  • FYE 2020 recycling rate target: 78.8%

Number One Trader in the World for the Cement Substitute of Blast Furnace Slag

[Photo]
Structure Made with Blast Furnace Slag

Blast furnace slag is a by-product of the steelmaking process. Mixing and using it with cement as a cement substitute makes it possible to save natural resources (e.g., limestone – the raw material of cement). It is an environmentally friendly product that can reduce the CO2 generated during manufacturing by about 40%* compared with when making concrete only with cement.
It is highly durable against seawater and the steel material in it is less likely to suffer corrosion over a long period of time. Therefore, it is widely used in large civil engineering projects at ports.
We have been selling blast furnace slag produced in Japan and overseas in around 10 countries since about 20 years ago. We handle of volume of blast furnace slag that makes us the number one trader in the world for it. In the future, we will build continuous and stable distribution channels and consider investing and participating in the slag business.

* Calculated at a 55:45 ratio for cement and blast furnace slag

Project to reduce our environmental burden with the introduction of side shrink wrap packaging

[Photo]
Bento Box with Side Shrink Packaging

ITOCHU PLASTICS INC. (CIPS) is supporting the introduction of side shrink wrap film in all stores operated by FamilyMart Co., Ltd., its domestic area franchise company locations stores (collectively "FamilyMart") as an effort to reduce our environmental burden. Side shrink wrap film covers only the area where the lids and containers meet for boxed lunch, sushi and noodle products.
FamilyMart completed the introduction of side shrink wrap packaging across Japan in February 2015.
The change from full shrink wrap packaging — which involves entire containers being packaged in wrapping — to side shrink wrap packaging makes it easier to open products, makes it easier to see their contents and offers a strong barrier performance. In addition to this, it reduces garbage, the plastic raw materials used in the packaging and also CO2. This greatly contributes to a reduction in our environmental burden.

  • FYE 2019 results (comparison with conventional wrap film): Approximately 540 ton reduction in plastic raw materials and an approximately 1,935 ton reduction in CO2.

The corporate philosophy of CIPS is as follows: "Providing lifestyle comfort and convenience with chemical and plastic materials. A corporate culture of integrity propelling us forward, together. ITOCHU Plastics." CIPS is promoting corporate activities, including support for the introduction of shrink wrap film, that aim to balance a better global environment and economic growth. The firm is striving to conserve the environment and to contribute to the realization of a sustainable society.

Cooperation with Stakeholders

Compliance with the Containers and Packaging Recycling Law

ITOCHU understands our own manufacturing and import volume of containers and packaging every year to recycle containers and packaging. We then pay a recycling fee to the Japan Containers and Packaging Recycling Association. The aim of this is to contribute to promoting the formation of a recycling-orientated society as a specified business operator prescribed by the Containers and Packaging Recycling Law.

The recycling fee we pay every year is as below.

(Unit:Yen)

Fiscal Year Recycling Fee / Contribution Fee Glass Bottles PET Bottles Paper Containers and Packaging Plastic Containers and Packaging Total
Colorless Brown Other Colors
FYE 2018

Recycling

704,782

29,327

1,057,941

1,792,050

Contribution

9,344

102

9,446

Total amount

714,126

29,429

1,057,941

1,801,496

FYE 2017

Recycling

814,414

708

18,306

631,798

1,465,226

Contribution

0

68

168

47,052

47,288

Total amount

814,414

776

18,474

678,850

1,512,514

FYE 2016

Recycling

770,179

158,548

30,825

292,375

1,251,927

Contribution

0

0

315

13,395

13,710

Total amount

770,179

158,548

31,140

305,770

1,265,637

Initiative Participation (Activities Through Business and Industry Groups)

We are participating in the Global Environment Subcommittee of the Committee on Environment and Safety – an environment and energy related committee of the Japan Business Federation (Keidanren). We are working to realize an environmental policy compatible with the economy (e.g., through promotion of voluntary action plans, and measures for global warming, waste and recycling and environmental risks including water management). We are also participating in the Global Environment Committee of the Japan Foreign Trade Council. We are striving to build a low-carbon society, construct a recycling-orientated society, and to support environmental related laws and regulations.

Performance Data

Paper Consumption

The table below gives our paper consumption for FYE 2016 to FYE 2019 (This is for the Tokyo Headquarters in FYE 2016 and for the total of all ITOCHU bases in Japan from FYE 2017 to FYE 2019). Our Tokyo Headquarters has set a target of reducing its paper consumption by 3% compared with FYE 2011 levels. We are working on reducing our paper consumption by going paperless and ending the use of unnecessary paper.

(Unit: Thousand sheets (A4 equivalent))

  FYE 2016 FYE 2017 FYE 2018 FYE 2019
Copy paper consumption

31,896

34,940

32,949

30,711

Waste Volume

The table below gives the waste volume generated in the Tokyo Headquarters, group companies in Japan, overseas offices and overseas group companies from FYE 2016 to FYE 2019. ITOCHU promotes the separation of garbage. Our Tokyo Headquarters has set a single year target of reducing its waste volume by 10% compared with FYE 2011 levels. We are working to reduce our waste volume through initiatives such as 2-in-1 and double-sided printing. The Tokyo Headquarters won the Minato Ward Waste Reducing Business Operator Commendation in FYE 2015.

  FYE 2016 FYE 2017 FYE 2018 FYE 2019
Tokyo headquarters building★ Waste volume (Unit: t)

711

674

698

680

Waste non-recycled

36

38

43

48

Waste recycled

675

636

655

632

Recycling rate (Unit: %)

95

94.3

93.8

92.9

Group companies in Japan Waste volume (Unit: t)

23,470

21,947

177,526

4,707,364

Overseas offices Waste volume (Unit: t)

9

33

5

17

Overseas group companies Waste volume (Unit: t)

14,569

10,016

141,392

3,118,634

  • The waste volume of the Tokyo Headquarters includes the amount sold as valuables.
  • Due to the increase in the number of companies subject to aggregation, the figure for FYE 2019 has increased significantly compared to FYE 2018.

Emissions of Sox, NOx, and VOC

Sox, Nox, and VOC emissions for FY2020 are currently being measured and are scheduled to be released in August 2020.

Scope of Aggregation

○:in scope of aggregation

  Waste volume Emissions of Sox, NOx and VOC Paper consumption
Tokyo headquarters

Osaka headquarters

Branches in Japan All five domestic branches (Hokkaido, Tohoku, Chubu, Chugoku & Shikoku, and Kyushu)

Other branches and business facilities in Japan*1 The number of offices including domestic branches: FYE 2016: 8, FYE 2017: 8, FYE 2018: 6, FYE 2019: 8

Group companies in Japan*2 Number of target companies: FYE 2016: 70, FYE 2017: 65, FYE 2018: 208, FYE 2019: 220

Overseas offices Numbers of overseas offices: FYE 2016: 16, FYE 2017: 16, FYE 2018: 15, FYE 2019: 30

Overseas group companies*2 Number of target companies: FYE 2016: 44, FYE 2017: 46, FYE 2018: 299, FYE 2019: 282

Exclusion Companies expected to be sold within the next five years held for investment management purposes are not included in the scope of the data. Moreover, the CO2 emissions of non-manufacturing site offices with 10 or fewer employees are quantitatively insignificant. Accordingly, they are not included in the scope of the data.
  1. The other business facilities cover business facilities owned or leased by ITOCHU (except facilities for residences).
  2. The group companies in Japan and overseas cover consolidated subsidiaries directly invested in by ITOCHU (as of March 31, 2017) for FYE 2016 to FYE 2017. All consolidated subsidiaries are covered since FYE 2018 (coverage 100%).

Independent Assurance

Independent Assurance Report (846KB)[PDF]: The data below marked with a ★ is independently assured through KPMG AZSA Sustainability Co., Ltd. This assurance conforms to the International Standard on Assurance Engagements (ISAE) 3000 and 3410 of the International Auditing and Assurance Standards Board (IAASB).
★: Total electricity consumption and total CO2 emissions attributable to business facilities of the Tokyo Headquarters, the Osaka Headquarters, branches in Japan, domestic branches and other business facilities, CO2 emissions (attributable to distribution), and the volume of waste discarded, recycling rate, water consumption, gray water production volume and wastewater volume for the Tokyo Headquarters.

Independent Assurance Report (846KB)[PDF]: The data below marked with a ◆ is independently assured through KPMG AZSA Sustainability Co., Ltd. This assurance conforms to the International Standard on Assurance Engagements (ISAE) 3000 and 3410 of the International Auditing and Assurance Standards Board (IAASB).
◆: Total electricity consumption and GHG emissions attributable to business facilities of the Tokyo Headquarters, Osaka Headquarters, branches in Japan, domestic branches, other business facilities, group companies in Japan, overseas offices and overseas group companies and the ITOCHU Group in total.

E-learning concerning compliance with chemicals-related laws and regulations

Legal compliance status

  • There were no major violations (e.g., license suspensions)

Results of e-learning on laws and regulations related to chemical substances

  • We hold chemicals related law and regulation e-learning every year
    Chemicals Division alone (participants: 141 / period: October 1 to 31, 2018)
  • We also give information on the same e-learning to the Chemicals Division related Group companies, each division company in ITOCHU other than the Energy & Chemicals Company and also its related Group companies

Handbook on chemical-related regulations

[Photo]

The first edition was issued in 2012, and a revised edition was released in 2016 and is currently being distributed. There are 32 laws and regulations covered in this handbook, each of which outlines important aspects of compliance requirements. The purpose of this handbook is to educate our employees, especially new recruits and sales personnel, on the laws and regulations specific to the chemical industry.