ITOCHU Group, conducting business globally under the spirit of “Sampo-yoshi,” the founding spirit and our Corporate Mission, considers that addressing global environmental and social issues is one of the top priorities in our management policy. We have formulated this policy based on The ITOCHU Group Corporate Guideline of Conduct, “I am One with Infinite Missions,” and The ITOCHU Group Code of Ethical Conduct for the realization of sustainable society.
Identification of Material Issues and Promotion of Businesses that Address the Social Issues
As a member of the international community, we will identify and assess material issues where we can create the most social and environmental value for that can enhance the sustainable growth of both society and our business.
Establishment of Mutual Trust with Society
We will take necessary measures to ensure that we disclose accurate and clear information and expand the information we disclose, and maintain a communicative relationship with our stakeholders. In doing so, we aim to be receptive and responsive to the expectations and demands of society.
Strengthening Sustainable Supply Chain and Business Investment Management
We will promote sustainable business activities by preventing and continuing to give consideration to problems for the conservation of the global environment, climate change mitigation and adaption, pollution control, resource recycling, protection of biodiversity and ecosystems, and basic human and labor rights. We will endeavor to effectively use resources (such as air, water, land, food, minerals, fossil fuels, animals and plants), respect human rights and consider occupational health and safety in the businesses where we invest and in the supply chains of the products we handle. We request our business partners to understand and implement the concept of sustainability in the ITOCHU Group, and aim to build a sustainable value chain. We will respect the legal systems of each country and international norms. We will strive to understand the cultures, traditions and customs of countries and regions around the world. We will then engage in fair and sincere corporate activities.
Education and Awareness of Employees to Promote Sustainability
We believe that the promotion of sustainability starts with each and every employee. Therefore, we will take necessary measures to educate our employees on the material issues we have identified and nurture a sustainability mindset among the workforce. Every employee is expected to adhere to this policy by executing respective action plans drafted in alignment to this policy.
Fumihiko Kobayashi
Member of the Board Executive Vice President Chief Administrative Officer
Reference Guidelines and Principles for Promoting Sustainability
In promoting sustainability, we refer to international guidelines and principles such as The Ten Principles of the United Nations Global Compact and Sustainable Development Goals (SDGs) adopted by the United Nations in September 2015. The guidelines and principles we refer to are listed below.
The Paris Agreement (COP21)
The Ten Principles of the United Nations Global Compact
GRI Standards
International Integrated Reporting Framework (IIRC)
IFRS ISSB S1, S2
The Environmental Reporting Guidelines issued by the Ministry of the Environment
ISO14001 (Environmental Management System)
ISO 26000 (Social Responsibility)
TCFD Recommendations
TNFD Recommendations
Universal Declaration of Human Rights (UDHR)
UN Guiding Principles on Business and Human Rights
Sustainable Development Goals (SDGs)*
United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP)
Basic Principles on the Use of Force and Firearms by Law Enforcement Officials
OECD Guidelines for Multinational Enterprises
Keidanren: Charter of Corporate Behavior, Global Environment Charter
Japan Foreign Trade Council: Shosha’s Corporate Environmental Code of Conduct, Supply Chain CSR Action Guidelines, Long-term Vision for Climate Change Measures
Sustainable Development Goals (SDGs): Following the 2015 deadline for the Millennium Development Goals (MDGs), the SDGs set goals for sustainable development by 2030. The 17 goals address issues such as poverty, starvation, energy, climate change and social equality.
ITOCHU Group’s Concept of Sustainability
Guided by our founding spirit and corporate mission of “Sampo-yoshi” (good for the seller, good for the buyer and good for society). ITOCHU seeks not only to achieve profit but also to help address social issues, in line with the trust and expectations placed on us by our diverse stakeholders, including our shareholders, investors, business partners, and employees. In April 2018, we adopted an environmental, social, and governance (ESG)-oriented management approach, identifying seven Material Issues (key sustainability issues) from two perspectives: societal impact and business impact. We believe that addressing these Material Issues in terms of both the associated risks and opportunities will serve to enhance our corporate value over the medium- to long-term.
In our management policy, “The Brand-new Deal: Profit opportunities are shifting downstream,” announced in April 2024, we have stated that we will achieve the enhancement of corporate brand value alongside growing earnings and shareholder returns.
Our Group has viewed change as an opportunity over the course of our development for more than 160 years. As a result, from upstream to downstream, and from raw materials to retail, our influence has expanded; we have developed while shifting the composition of the products we handle and our business areas in line with the times. We thus believe that constantly creating new value beyond the boundaries of our existing business is especially important in enhancing our group’s corporate brand and generating synergies with financial growth. Building on strengths like our points of contact with the consumer sector and based on the market-oriented mindset of all employees, we aim to further enhance our corporate brand value by listening to the voices of the market, society, and consumers, while continuing to steadily refine the qualitative aspects of our business activities.
Material Issues
ITOCHU put forth Material Issues that incorporate an ESG perspective when we formulated the previous medium-term management plan as of April 2018. Addressing these Material Issues through our core business, we will contribute to a sustainable society. ITOCHU’s sustainability initiatives aim to fulfill our responsibilities for the society of today and the future. Also, these initiatives are contributing to the achievement of the Sustainable Development Goals (SDGs)* adopted by the United Nations in 2015.
Sustainable Development Goals (SDGs): Targets for sustainable development to achieve by 2030, adopted in September 2015 by member states of the United Nations
Evolve Businesses through Technological Innovation
We are creating new value by proactively exploring new technologies as we adapt to changing industry structures by venturing beyond existing business frameworks.
Address Climate Change (Contribute to a Decarbonized Society)
We are striving to adapt to the impact of climate change on our business activities, while also promoting business activities that contribute to a decarbonized society and seeking to reduce greenhouse gas emissions.
Develop a Rewarding Work Environment
We are developing a work environment where all employees feel proud and motivated, and where they can leverage their diversity to demonstrate their abilities to the fullest.
Respect and Consider Human Rights
We are promoting respect and consideration for human rights in our business operations and ensuring stability in our business, while also contributing to the development of local communities.
Contribute to Healthier and More Affluent Lifestyles
We are striving to improve the quality of life for all people and are contributing to the creation of healthier and more affluent lifestyles.
Ensure Stable Procurement and Supply
We are contributing to the creation of a recycling-oriented society by giving consideration to biodiversity and other environmental issues while undertaking the effective utilization of resources as well as their stable procurement and supply, in line with demand in each country.
Maintain Rigorous Governance Structures
We are ensuring appropriate and efficient execution of operations through independent, objective, and effective oversight of management by the Board of Directors and increased transparency in decision-making.
Identification and Review Process for Material Issues
Since ITOCHU first identified Material Issues in 2013, we have conducted annual reviews based on trends in the international community and the expectations of stakeholders.
The Current Material Issues were identified in April 2018 in consideration of ITOCHU’s sustainable growth and the social impact of its business, based on changes in social conditions and the business environment, such as the adoption of the SDGs and the effectuation of the Paris Agreement, as well as ITOCHU’s corporate mission of “Sampo-yoshi.” While the original Material Issues focused on consideration for the environment and society (CSR), the revisions are based on “our efforts through core business,” “alignment with management strategy,” “medium- to long-term social change,” and “the addition of governance elements.”
Processes of identifying and reviewing the Material Issues are as illustrated.
Step 1Identification of Issues
ITOCHU referred to the international guidelines issued by the International Integrated Reporting Council (IIRC), items assessed by ESG evaluation organizations, etc. We prepared a strategy analysis sheet based on the SDGs, which cover a wide range of social issues, considering internal and external business environments, and international trends. With these approaches, we extracted issues (candidates of Material Issues) for sustainable growth.
Step 2Division Companies Determine Importance and Set Success Indicators
Each of ITOCHU’s Division Companies determined the risks, opportunities and success indicators for their business activities. Concerning risks and opportunities by internal and external stakeholders, Business Impact and Social Impact of dozens of materiality candidates were examined from a medium- to long-term perspective for each Division Company, and mapped on a strategic analysis sheet. We followed the “Sampo-yoshi”, which was our business philosophy and also our corporate mission to identify priority issues to address for sustainable growth.
Step 3Reviews by the Sustainability Advisory Board
ITOCHU created a Materiality Matrix based on both Impact to Management, and Stakeholders Opinions and Expectations. The Sustainability Advisory Board conducted reviews and an exchange of ideas on Materiality Matrix between outside experts with diverse backgrounds and expertise, based on the external environment and trends of other companies. We identified seven Material Issues as follows.
Materiality Matrix
1Evolve Businesses through Technological Innovation
2Address Climate Change
3Develop a Rewarding Work Environment
4Respect and Consider Human Rights
5Contribute to Healthier and More Affluent Lifestyles
6Ensure Stable Procurement and Supply
7Maintain Rigorous Governance Structures
8Improve Infrastructures
9Supply Safe and Secure Products
10Consider Biodiversity
11Conserve Water
12Prevent Air Pollution
13Stimulate Regional Economy through Finance
14Reduce Waste
Step 4Discussion and Decision-Making Among Management
The Sustainability Committee chaired by the CAO held deliberations and confirmed the validity of Material Issues. Then meetings of the Board of Directors chaired by the CEO decided the 7 Material Issues.
Step 5Reviews of Material Issues
Each year, Sustainability Management Division reviews the Materiality Matrix by taking account of the scope of the Company’s business and the concerns raised through the annual Sustainability Advisory Board meetings with external experts and interviews with shareholders for confirming the effectiveness of the current Materiality. The results are discussed by the Sustainability Committee, where Division Companies and headquarters’ administrative divisions also attend, and decided by the CAO, and reported to the Board of Directors.
Discussion Processes with External Stakeholders (Experts)
We received frank opinions from experts who have diverse backgrounds and expertise, who expressed their expectations for ITOCHU, such as “The ESG perspective is becoming more important in the future. Think about how society and the environment affect corporate activities in the medium- to long-term, and respond to social needs with ITOCHU solutions.” as well as opinions based on the investment environment and trends of other companies, and had lively discussions regarding the selection of Material Issues.
Date
January 15, 2018
Topic
Review of material sustainability issues (materiality)
External environment related to sustainability and promotion of sustainability by ITOCHU
Panelists
Sustainability Advisory Board members (Job title at the time)
Ms. Mariko Kawaguchi, Senior Researcher, Daiwa Institute of Research Holdings Ltd.
Mr. Takeshi Shimotaya, Managing Director, Sustainavision Ltd.
Mr. Hidemi Tomita Director Tomita of Lloyd’s Register Japan K.K.
ITOCHU members (Job title at the time)
Fumihiko Kobayashi, Member of the Board, Senior Managing, Executive Officer, Chief Administrative Officer
Yoshihisa Suzuki, Member of the Board, Senior Managing, Executive Officer, President, ICT & Financial Business Company
Tomoyuki Takada, Executive Officer, General Manager, Corporate Communications Division
