Sustainability

Sustainability Promotion Flow

In line with our sampo yoshi spirit, we have formulated our Basic Policy on Promotion of Sustainability, taking into consideration our corporate philosophy and changes to the external environment, and we are promoting sustainability in an organized and systematic manner. We have incorporated important issues for priority resolution (material issues) into our Sustainability Action Plan. At the same time, through the Group’s business activities we aim to simultaneously achieve sustainable increases in corporate value and resolve social issues.

Sustainable Increases in Corporate Value

Sustainability Promotion System

The Sustainability Committee is a key internal committee that deliberates and decides on policies and important projects related to promoting Companywide sustainability.

The Sustainability Management Department plans and drafts specific measures that, following approval by the Sustainability Committee Chairperson and CAO, are executed by Group ESG Officers and Managers in each unit. The CAO attends meetings of the Board of Directors, HMC, and Investment Consultative Committee, taking part in deliberations from the standpoint of sustainability, facilitating decision-making that takes impact on the environment and society into account.

In addition, through constructive dialogue that takes place regularly with the Advisory Board and other bodies, we ascertain society’s expectations and requirements, which we strive to incorporate into our sustainability promotion.

Material Sustainability Issues	Examples of Performance Indicators for Sustainability Action Plan	State of Progress in FYE 2019
Reinvent businesses through technological innovation We 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.	Promote the reinvention of business through the application of AI, IoT, fintech, and other new technologies and services Through the use of AI and the popularization and expansion of RFID tags in the textile business, realize higher levels of supply chain productivity and operating efficiency, better traceability, and enhanced selling capabilities	Made strategic investments, mainly in the consumer value chain and in next-generation mobility and electricity and commenced cross-industrial integration Sales of RFID tags: 87 million tags (up 24% year on year) Began collaborating with a leading Hong Kong manufacturer in the aim of further popularization in the domestic market
Address climate change (contribute to realization of a low-carbon society) We 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 a low-carbon society and reduce greenhouse gas emissions.	Build an optimal asset portfolio that takes society’s issues fully into consideration, including the transition to a low-carbon society Promote initiatives aimed at increasing the renewable energy ratio of our power generation business above 20% (based on equity ownership) by FYE 2031	In addition to publicizing our policy on coal-related business initiatives, began a scenario analysis and business impact assessment based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) In addition to existing projects, commenced commercial operations in the geothermal power business and of solar power plants, thereby promoting our renewable energy initiatives
Cultivate a motivating workplace environment We create an environment that enables each employee to fully demonstrate their capabilities with pride and motivation by taking advantage of diversity	By FYE 2021, reduce average annual overtime hours by 10% or more compared to before the introduction of the morning-focused working system Reduce turnover due to cancer and long-term illnesses to zero by FYE 2021	Average annual overtime hours: Reduced by 9% compared to before the introduction of the morning-focused working system Support for balancing cancer care and work: Maintained zero turnover due to cancer and long-term illnesses
Respect human rights We 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.	Comply with societal and environmental maintenance and management standards throughout the entire Group’s supply chain Consider setting a target for sustainable palm oil procurement that takes into account business partners’ conditions and industry trends and liaison with industry groups	Sustainability surveys of suppliers: 343 companies To ensure traceability, we aim to increase the ratio of palm oil we handle that is certified by the RSPO or a similar body to 100% by FYE 2026, and are promoting the handling of third-party-certified products
Contribute to healthier and more enriched lifestyles We contribute to realizing a healthy, rich life, aiming to improve the quality of life of all people.	Promote proper assignment of food safety inspectors in each sales department By FYE 2021, aim to manage the health data of 1,000,000 people obtained from medical checkups	Strengthened screening in supplier selection by increasing the number of people holding Food Safety Management System (FSMS) audit certifications (added three in FYE 2019) The number of people targeted for health data management: Approx. 700,000 Contributed to human health improvements through efforts to make vital data visible and increase health awareness
Ensure stable procurement and supply We 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.	Promote early commercialization of the recycled fiber business and increase our handling of sustainable materials By FYE 2026, make 100% of the wood we handle in the lumber business either certified wood or wood that for which traceability is ensured	Commenced pilot production of cellulose fiber, an environmentally friendly material Increased our handling of products by wood suppliers having wood traceability certification from third-party institutions
Maintain rigorous governance structures The Board of Directors implements highly effective supervision of management from an independent and objective standpoint and ensures appropriate and efficient execution of operations by improving the transparency of decision-making.	Continuously conduct measures aimed at strengthening the supervisory function of the Board of Directors through Board of Directors’ evaluations Monitor various compliance-related measures and continue on-site training, etc.	Maintain the ratio of outside Directors at more than one-third at all times Achieved 20% of the ratio of female Directors at the Board of Directors in FYE 2020 (In addition, two female Executive Officers (not-Director)) Status of on-site training: Attended by 13,178 people, conducted 237 times at 92 companies, including ITOCHU

Please see the “Sustainability Action Plans” page for more details.