Material Sustainability Issues

In April 2018, ITOCHU put forth material sustainability issues(Materiality)that incorporate an ESG perspective.
Addressing these issues through its main business will help ITOCHU accomplish Brand-new Deal 2020's goal of achieving ongoing growth through a reinvented sampo yoshi approach.
Sustainability initiatives of ITOCHU, which fulfills its responsibilities for the present and future society, also contribute to the achievement of the Sustainable Development Goals (SDGs)*, which were adopted at a UN Summit in 2015.

  • SDGs: Sustainable Development Goals to be achieved by 2030, which were adopted by United Nations member states in September 2015

Material Sustainability Issues

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Materiality:Reinvent businesses through technological innovation
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We will create new value by working on new technologies proactively and trying to respond to changes in the industrial structure beyond the framework of existing businesses.

Example of initiativeUtilization of AI, IoT and Fintech

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We are working to evolve our Group's value chains into next-generation ones, centering on FamilyMart UNY Holdings Co., Ltd. In 2017, we established an operating company that promotes Fintech-related businesses with FamilyMart UNY Holdings. Therefore, we strive to promote businesses related to Fintech, including electronic money, credit cards, point programs and ID by involving Group companies.

Materiality:Address climate change
(contribute to realization of low-carbon society)
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We will strive to adapt to the impact of climate change on business. At the same time, we will work to promote business activities aimed at contributing to realization of low-carbon society and reduce greenhouse gas emissions.

Example of initiativeOffshore wind power plant operated off the German North Sea Coast

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Given the growing demand for renewable energy, we participate in a power generation project in Germany with the CITTIC Group, with which we have formed a strategic business alliance and capital participation. With a total power generation capacity of 288 MW, it is one of the largest offshore power generation projects being operated off the German North Sea Coast. It supplies a sufficient amount of electricity for approximately 370,000 houses for standard German families, thereby contributing to the shift to a low-carbon society.

Materiality:Cultivate a motivating workplace environment
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We will create an environment that enables each employee to fully demonstrate their capabilities with pride and motivation by taking advantage of diversity.

Example of initiativeSupport measures for balancing cancer care and work

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In 2017, we began to provide support for balancing cancer care and work. The support measures include cancer screenings, which we conduct in cooperation with the National Cancer Center for the first time among private companies, and the estabishment of a system of support to balance cancer care and work, including an internal coordinator for this purpose. By promoting health management in this way, we will achieve a work environment in which all employees can remain motivated, find their work challenging and fully demonstrate their capabilities.

Materiality:Respect human rights
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We will take initiatives for the respect and consideration for human rights through our business activities to stabilize our businesses and contribute to the development of local communities.

Example of initiativeDesalination project in Australia

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In Victoria, Australia, we have constructed and are operating one of the largest desalination plants in the world (with a daily output of approx. 400,000 tons) with Suez.
While access to safe water as one of the essential human rights has become a social issue, we are contributing since its completion in 2012 to the development of local communities with this social infrastructure, which has been capable of meeting 30% water demand of people in Melbourne, Victoria.

Materiality:Contribute to healthier and more enriched lifestyles
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We will contribute to realizing a healthy, rich life, aiming to improve the quality of life of all people.

Example of initiativeInitiatives for Promoting People's Good Health

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In response to the progress of aging and similar issues that are recognized as social problems in developed countries, we contribute to promoting people's good health and creating a dynamic society in through sales of advanced medical devices, the business of supporting the operation of designated regional cancer care hospitals, pharmaceutical development, and the business of supporting health management using ICT.

Materiality:Ensure stable procurement and supply
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We will work to ensure the effective utilization and stable procurement and supply of resources in accordance with demand in each country, in consideration of biodiversity and other environmental issues, aiming to achieve a recycling-oriented society.

Example of initiativePulp business in Finland

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METSA FIBRE of Finland, one of the world's largest softwood pulp producers and our business investment destination, promotes the sustainable use of forest resources. The company's pulp production processes generate electricity and the company provides the surplus not required by its plants to the surrounding region to contribute to the local environmental preservation.

Materiality:Maintain rigorous governance structures
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We will implement highly effective supervision of management from an independent, objective standpoint and ensure appropriate, efficient execution of operations by improving the transparency of decision-making.

Example of initiativeStrengthening the corporate governance function

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To ensure appropriate, efficient execution of operations, we promote effective measures for strengthening the monitoring function of the Board of Directors and improving the operation of the Board of Directors.

Selection and Review Process of the Materiality

Since ITOCHU Corporation identified material issues for the first time in 2013, the company has regularly reviewed the issues based on trends in international society, expectations of its stakeholders. In response to the recent social circumstances and changes in the business environment, such as the adoption of SDGs and the entry into the Paris Agreement, we took the medium-term management plan that commenced in fiscal 2019 as an opportunity to identify seven new material issues.

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Risks and opportunities for each Materiality

Materiality Risks Opportunities
Reinvent businesses through technological innovation
  • Obsolescence of existing business models resulting from the emergence of new technologies, such as IoT and AI.
  • Labor shortage in developed countries, loss of excellent human resources in businesses in which efficiency improvement is delayed. And others.
  • Creation of new markets and provision of innovative services.
  • Utilizing new technologies for optimizing human resources and logistics, increasing competitiveness by promoting work style reform. And others.
Address climate change (contribute to realization of low-carbon society)
  • Decline in demand for fossil fuels resulting from business regulations on greenhouse gas emissions and other changes.
  • Damage to business by increased occurrence of abnormal weather (such as drought, flooding, typhoons and hurricanes). And others.
  • Increase of business opportunities related to renewable energy and other contributors to climate change mitigation.
  • Retaining/acquiring customers with measures, including strengthening the supply system to adapt it to abnormal weather. And others.
Cultivate a motivating workplace environment
  • Decline in labor productivity, loss of excellent human resources, missed business opportunities, increase in health-related expenses, and other events that would result from failure to take appropriate measures, and others.
  • Improvement of labor productivity and health and motivation, securing of excellent human resources, enhanced capability of responding to changes and business opportunities, and other events that will result from the creation of a workplace that provides job satisfaction, and others.
Respect human rights
  • Business delay or business continuity risk resulting from the occurrence of a human rights problem in business activities that expands (geographically).
  • Decline in credibility that may result from defects in the social infrastructure services we provide. And others.
  • Stabilization of business or securing of excellent human resources resulting from harmonious coexistence with local communities.
  • Establishment of safe, stable supply system for product enabled by the consideration of human rights and improvement of work environment in the supply chain. And others.
Contribute to healthier and more enriched lifestyles
  • Decline in credibility that would result from the occurrence of a problem related to the safety or health of consumers and service users.
  • Impact on business of destabilization of the market or social security system based on policy change. And others.
  • Increase in demand for food safety and security and health improvement.
  • Expansion of information, financial and logistics services resulting from an increase in consumer spending or penetration of the Internet. And others.
Ensure stable procurement and supply
  • Impact of opposition movement resulting from the occurrence of an environmental problem and worsening relationship with local communities.
  • Structural exhaustion of the overall industry caused by the occurrence of price competition, mainly in the consumer-related sector. And others.
  • Increase in resource demand attributed to an increase in population and improvement of living standard in emerging countries.
  • Winning customer trust or creating new businesses with a stable supply of environmentally friendly resources and materials. And others.
Maintain rigorous governance structures
  • Occurrence of business continuity risk or unexpected loss resulting from the malfunction of corporate governance or internal control, and others.
  • Improvement of transparency in decision-making, appropriate response to changes and establishment of a stable basis of growth enabled by the establishment of a firm governance system, and others.