Governance

Organization and Systems

The Sustainability Management Division plans and formulates company-wide action to further sustainability at ITOCHU Corporation, which the Sustainability Chairperson served by the Chief Administrative Officer finalizes. Meanwhile, the ESG Officers and Managers in each unit carry out sustainability actions. The Sustainability Committee, one of the company’s key committees, holds deliberations and reviews policy formulation and important matters. In addition to a role in heading the Sustainability Committee, the CAO joins meetings of the Board of Directors, the Headquarters Management Committee (HMC) and the Investment Consultative Committee. The chair also engages in decision-making based on the company’s impact on the environment and society by reporting regularly to the Board of Directors to brief them on our promotion of sustainability. We furthermore engage in dialog with stakeholders within and outside the company. One example of this is our regularly convened advisory board. This dialog provides an understanding of what society expects of and desires from the company, which we can then apply to our initiatives at advancing sustainability.

Sustainability-related Governance Structural Chart (As of June 21, 2024)

CAO: Chief Administrative Officer
HMC: Headquarters Management Committee

Board of Directors

ITOCHU group recognizes that responding to sustainability issues is an important management issue. The Board of Directors approves the Group’s policies, strategies and related business promotion concerning sustainability, and oversees the appropriateness of sustainability disclosure information.
The Board of Directors oversees the appropriateness of material issues through a review of key issues such as policies to respond to risks and opportunities for each material issue, the specific approach outlined in Sustainability Action Plans to responding to them, the performance indicators of the results of the response to them, and the degree of progress on them.
The Board of Directors also oversees the execution of business and investment strategies to respond to sustainability-related risks and opportunities including environmental and social risks. (That includes a review of strategies and divestment decisions). To explain details, we use the ESG Checklist for Investment as an advance ESG risk assessment on all our new investment projects. The checklist helps us to understand and analyze the status of sustainability-related risk policies, systems and initiatives. HMC, which deliberates on important projects, verifies sustainability-related risks and opportunities. Moreover, after investing in projects, we conduct multifaceted management such as monitoring and reviews of group companies to avoid sustainability-related risks, on-site visits and surveys to prevent environmental pollution, and human rights due diligence.
For management along the value chain, we conduct an annual sustainability survey to check the status of ESG initiatives of our suppliers. In addition, initiatives related to risks and opportunities regarding climate change are analyzed and disclosed based on the TCFD, and similarly those for natural capital are based on the TNFD frameworks. The CAO periodically reports on its sustainability-related deliberations and initiatives to the Board of Directors which then oversees them.

Skills and Competencies of the Board of Directors

Our CAO has specialized experience and knowledge in the field of the SDGs and ESG. The CAO receives periodic reports about twice a month from the Sustainability Management Division in charge of planning and implementing various sustainability-related measures. Furthermore, we invite external experts to give talks and exchange opinions at meetings of the Sustainability Advisory Board held every year. Through those opportunities, we deepen our knowledge about sustainability-related trends in the world, the expectations in our company and the issues we should tackle.
The CAO, our representative director, is a member of the HMC which discusses our general management policy and important management-related matters. At the same time, the CAO concurrently serves as the chair of the Sustainability Committee. The CAO decides matters deliberated upon in meetings of the Sustainability Committee as the person with overall responsibility for sustainability. The HMC then approves important matters after they have been decided upon by the CAO. The CAO reports those decisions to the Board of Directors about three times a year together with the status of the main activities to promote sustainability. We believe this structure gives the Board of Directors the competency when overseeing sustainability.

Sustainability Committee

The Sustainability Committee deliberates on the formulation and implementation of various measures to respond to sustainability-related matters. The committee identifies, assesses and manages the setting of sustainability-related targets, the state of progress on those targets, and current sustainability-related risks and opportunities. The Board of Directors oversees the promotion of business and investment strategies to respond to sustainability-related risks and opportunities. (That includes a review of strategies and divestment decisions.) In addition, at the executive level, the managers of each company concurrently serving as those in charge of ESG and the managers of headquarters administrative division participate in the Sustainability Committee as core members. The committee receives reports on sustainability-related matters from the Sustainability Management Division and those in charge of promoting ESG in each company and headquarters administrative division. It then manages and monitors the progress on the various measures and initiatives.

FYE 2024 Sustainability-related Deliberations and Reports

Sustainability-related Meetings	Members	Number of Meetings Held	Main Approval, Deliberation and Report Contents
Board of Directors	Directors and Audit & Supervisory Board members	4	Deliberations by the Sustainability Committee and decisions by the CAO Social contribution activity reports
Sustainability Committee	Chair: CAO Members: General Managers of the Corporate Planning & Administration Division, Corporate Communications Division, Human Resources & General Affairs Division, Legal Division, Finance Division, General Accounting Control Division, Global Risk Management Division, and Investor Relations Division; General Managers of the Planning & Administration Departments in each Division Company; full-time Audit & Supervisory Board member	3	Disclosure of sustainability-related information in Annual Securities Report Confirmation of the material issues Review of sustainability action plans External ESG assessments Results of environmental and social risks monitoring and review CSRD promotion system Response to climate change Natural capital (biodiversity)/TNFD disclosures ISO14001 environmental management reviews Human rights due diligence and sustainability surveys Human capital

Sustainability Advisory Board

The Sustainability Advisory Board was established to engage outside stakeholders in dialog with our executive management to determine whether the direction we are taking with regards to sustainability is aligned with the needs of society as ITOCHU Corporation’s business grows more diverse and widespread, and then to apply the insights to promoting sustainability.

Overview of the Sustainability Advisory Board 2023

Meeting of the Sustainability Advisory Board

In FYE 2024, we welcomed three experts from industry, academia and the government to discuss the theme of “Natural Capital・Biodiversity・TNFD” in a meeting of the Sustainability Advisory Board we held in February 2024. The experts gave talks on the latest trends from their differing perspectives. After that, ITOCHU introduced “the status of plans toward disclosure of natural capital related information”. There was then a frank exchange of opinions in the question-and-answer session.
Based on the opinions exchanged at this advisory board, we will disclose our risk and opportunity initiatives related to natural capital and the results of our analysis and evaluation based on the TNFD framework. The following comments were made from the three experts with expectations and advice for ITOCHU: “I can see that you are already working on risk management in terms of sustainable procurement,” “I think it is important to change the entire supply chain by purchasing from producers who are making sustainable raw materials,” “There are aspects of nature-related business opportunities for trading companies. How to anticipate and uncover business opportunities is the key to show ITOCHU’s skills.”

Summary of Past Activities

(Job Titles at the Time)

FYE 2024	Natural Capital・Biodiversity・TNFD Sustainability Advisory Board Members Ms.Naoko Hamashima Office for Mainstreaming Biodiversity, Biodiversity Policy Division, Nature Conservation Bureau, Ministry of the Environment Ms.Kaori Fujita Professor, Green Goals Initiative / Graduate School of Life Sciences, Tohoku University and Senior Deputy Editor, Nikkei ESG SDGs Center Mr.Hidemi Tomita Managing Director, LRQA Sustainability K.K. ITOCHU Members Fumihiko Kobayashi Member of the Board, Executive Vice President, Chief Administrative Officer Ryoma Omuro General Manager, Planning & Administration Department, Textile Company Toshio Okudera General Manager, Planning & Administration Department, Machinery Company Osamu Tano General Manager, Planning & Administration Department, Metals & Minerals Company Hajime Sakanashi General Manager, Planning & Administration Department, Energy & Chemicals Company Yoshihiro Kamigaichi General Manager, Planning & Administration Department, Food Company Yasuhiro Takahashi General Manager, Planning & Administration Department, General Products & Realty Company Atsushi Hashimoto General Manager, Planning & Administration Department, ICT & Financial Business Company Tetsuya Mukohata Manager, Planning & Administration Section, The 8th Company Yoshihito Tabe General Manager, Sustainability Management Division (served as Moderator)
FYE 2023	Supply Chains and Human Rights External Lecturer Mr. Ken Toyoda Director for Business and Human Rights Policy, Ministry of Economy, Trade and Industry Sustainability Advisory Board Members Ms. Tomoyo Matsui Professor of Graduate Schools for Law & Politics, The University of Tokyo Mr. Hideki Wakabayashi Director, Japan NGO Center for International Corporation・THINK Lobby Board Member・Director, Global Compact Network Japan
FYE 2022	Carbon Credits Sustainability Advisory Board Members Mr. Fumihiro Kajikawa Director, Environmental Economy Office, Ministry of Economy, Trade and Industry Ms. Yukari Takamura Professor of Institute for Future Initiatives, The University of Tokyo Mr. Hidemi Tomita Managing Director, LRQA Sustainability K.K.
FYE 2021	Response to Climate Change Sustainability Advisory Board Members Ms. Yukari Takamura Professor of Institute for Future Initiatives, The University of Tokyo Ms. Fuyumi Naito Director of Decarbonized Business Promotion Office, Climate Change Policy Division, Global Environment Bureau/ Chief Sustainability Officer, Ministry of the Environment Mr. Hidemi Tomita Director, Lloyd’s Register Japan K.K.
FYE 2020	Sustainable Business Direction in a Circular Economy Sustainability Advisory Board Members Mr. Eiji Hosoda Professor of Business Administration and Information Science, Chubu University, Professor Emeritus, Keio University Ms. Mami Fukuchi Associate Professor of Graduate School of Interdisciplinary Information Studies, The University of Tokyo Mr. Hidemi Tomita Director, Lloyd’s Register Japan K.K.

Sustainability Awareness Activities at ITOCHU

While pursuing sustainable activities, ITOCHU engages in various activities to raise awareness within the Company so as to further ITOCHU Group employees’ understanding and to work through business on solutions to social issues in a manner that conforms to the latest global trends.

Recent Sustainability Awareness Activities

ITOCHU conducts general sustainability education for all directors and employees every year, with the aim of promoting sustainability throughout the company and conducting awareness surveys. This training is intended to promote understanding of trends in the environment, business, and human rights, as well as ITOCHU’s initiatives, policies, and measures in response to these trends. In addition, the opinions and level of understanding received from the Employee Questionnaire conducted at the end of the course are utilized in the next year’s training.

	Theme	Participation
FYE 2024	CAO message, “Sampo-yoshi” capitalism, Role of non-financials in enhancing corporate value, Expansion of disclosure requirements, Expansion in environment from GHG to natural capital, Social and human rights	100.0%
FYE 2023	SDGs and Sustainability (Examples: Latest trends, Sustainability Action Plans, GHG emission reduction and climate change measures, business and human rights, supply chain management, etc.)	100.0%
FYE 2022	SDGs and Sustainability (Examples: Latest trends, risks and opportunities of the ITOCHU Group, GHG emission reduction and climate change measures, business and human rights, supply chain management, etc.)	100.0%
FYE 2021	Sustainability Trends (ITOCHU Group Material Issues, Risks, and Opportunities)	100.0%
FYE 2020	Global Sustainability Trends (ESG, SDGs, Climate Change, Supply Chains)	100.0%

Sustainability Seminars

We have been holding in-house sustainability seminars on a continuous basis since 2007 to bring in outside insights and ideas on various sustainability issues.

Recent Seminars

In February 2022, we held a practical seminar titled “Method of Calculating Scope 3 Emissions in the ITOCHU Group.” We are working to improve our abilities so that all related employees can calculate Scope 3 for themselves. Moreover, in April 2023, we held a video training course on the relationship between business and natural capital and biodiversity, and what should be done, mainly for departments responsible for businesses with a high degree of dependence on and impact on natural capital, etc. In October, we held a seminar to deepen understanding of the background and significance of TCFD scenario analysis, mainly for departments conducting scenario analysis. In October, a seminar was held to deepen understanding of the background and significance of TCFD scenario analysis, focusing on the departments that conduct scenario analysis. In both cases, outside consulting firms presented specialized content.

FYE 2024	Training on Biodiversity (basic, practical)
FYE 2024	Briefing for TCFD and Scenario Analysis
FYE 2023	Method of Calculating Scope 3 Emissions in the ITOCHU Group
FYE 2022	When and Where Does CO₂ Occur? Life Cycle Assessment (LCA) Study Session
FYE 2021	Are the SDGs Profitable?
FYE 2019	Business and Human Rights (in the Supply Chain)

Sustainability Trainings

We engage in various sustainability trainings for ITOCHU personnel so as to promote sustainability awareness within our Group. We strive to raise awareness of the environment, human rights, and other aspects of sustainability that must be understood according to each business domain and responsibility.

Training Title	Applicable Employees	Training Details	Participants in FYE 2024
Group ESG Managers Conference	Group ESG managers	Basic knowledge and explanation of work duties for ITOCHU Group ESG promotion supervisors	101
Training New Recruits	New employees	ITOCHU Group sustainability promotion	114
Training in Preparation for Overseas Assignments	Employees designated for overseas assignment	Points of caution related to ITOCHU Group sustainability and promoting sustainability overseas	62
Training for Group Executive Officers	Group executive officers	ITOCHU Group sustainability and importance of Group alliances	130
Training for Newly Appointed Section Managers	New Section Managers	Examples of businesses which promote the ITOCHU Group sustainability and which balance social issues and business feasibility	50
Sustainability Survey Workshop	Employees conducting sustainability surveys	Important items in the Sustainability Action Guidelines for Supply Chains and sustainability surveys	109