Our Sustainable History and Value Creation Model
The Roots of Management Philosophy
Our Founder Chubei Itoh and “Sampo-yoshi”
The foundation of ITOCHU Corporation traces back to 1858, the year in which Chubei Itoh set out from Toyosato Village, in Shiga Prefecture, to Nagasaki as a traveling linen merchant.
Chubei Itoh’s business was based on the spirit of “Sampo-yoshi”, the management philosophy of merchants in Ohmi, a province where he was born. The philosophy originated back to the shogunate era, when merchants in Ohmi were permitted to promote business activities in the region due to their contributions to the society. Since then, not only good for the seller and the buyer, but also for the society became the management philosophy. This can be said to be the roots of modern sustainability, which requires corporations to balance their business activities with the interests of multi-stakeholders. That spirit is evident in Chubei Itoh’s personal motto, “Trade is a compassionate business. It is noble when it accords with the spirit of Buddha by profiting those who sell and those who buy and supplying the needs of the society.”
The Roots of a Management Philosophy Inherited Since the Foundation
Our founder Chubei Itoh established a “store law” in 1872, and adopted a meeting system. The store law was a set of house rules covering what in modern parlance called management philosophy, code of ethical conduct, a human resources system and employment regulations, which subsequently became the foundation of ITOCHU Corporation’s management philosophy. Emphasizing communication with employees, Chubei Itoh chaired meetings himself. Moreover, he incorporated a series of what were at the time groundbreaking management systems, including the codification of “sharing of profit by three parties”* and western bookkeeping methods. Those initiatives built the foundations of mutual trust between the store owner and the employees. Since that era, we have based our corporate management on sustainability.
- Sharing of profit by three parties: In a predominately feudal era, this was an extremely progressive philosophy of sharing profits with employees. The store's net profit was divided among three parties: the store owner, the store's reserve fund, and store employees.
160 Years of History and Sustainability
Why were we able to keep developing for such a long period of time? We believe that it is because we have put into practice the spirit of “Sampo-yoshi” for over 160 years, which is the root of sustainability. At the same time, as the business environment has changed with the times, we have established a corporate culture that anticipates changes and turns it into opportunities.
Since the foundation, ITOCHU Corporation has consistently thrived despite the turmoil it has faced in different eras, including two world wars and economic volatility. Starting as a trading company mainly handling textiles, we have fulfilled the role of a trading company that has responsively changed according to the demands of each generation. Furthermore, while significantly changing its products and business portfolios, we have expanded our sphere of influence from upstream raw materials to downstream consumer sales. ITOCHU Corporation has evolved into a general trading company, and from there into a globally integrated corporation.
We are convinced that our history has continued for more than 160 years because we have surely upheld and passed on the spirit of “Sampo-yoshi” while remaining an essential component of society by responding to changes, in its expectations in different eras.
To realize a sustainable society, we embrace an approach to capitalism with greater emphasis on serving all stakeholders. Through our business activities, we will contribute to the achievement of SDGs in such ways as maintaining the foundations of everyday life and protecting the environment.
Based on the spirit of ITOCHU Mission “Sampo-yoshi,” which is also the founding spirit, we have identified seven Material Issues that incorporate the perspectives of the environment, society and governance (ESG) as shown in the diagram below.
We are steadily implementing initiatives through our core businesses to address these Material Issues. In the present medium-term management plan “Brand-new Deal 2023”, in particular, we will actively promote “Business expansion in accordance with a decarbonized society,” “Leading development in the recycling businesses,” and “Sustained growth through strengthening the value chain.”