ESG Communication Book 2022
Disclosure Book
Ver. 1© 2022 Sumitomo Corporation

Contents

1

Contents

Environment

Governance2

Editorial policy

20

Environmental Management

95

Corporate Governance24

Climate Change(Including Disclosure based on TCFD)

104

Internal Control

105

Compliance

108

Social and Environmental Risk Management

110

Information Security

111

Stakeholder Engagement112

ESG Quantitative Data

Sustainability of Sumitomo Corporation group3

Our approach to Sustainability

46

Water Resources

4

Sustainability Promotion System

47

Biodiversity

5

Relationship between Various Social Issues
and the Company’s Business

50

Prevention of Pollution

52

Resource Utilization

6

Enhancing Sustainability Management

Feature8

Sumitomo Corporation Group’s
Key social Issues and Goals / Progress© 2022 Sumitomo Corporation

Society57

Human Rights

121

Third-party Assessment64

Supply Chain

123

Commitment to International Codes of66

Human Resources Management

89

Social Contributions Activities

Conduct
124

Principles and Policies Supporting
Corporate Activities

125

Disclosure Based on IBC Stakeholder
Capitalism Metrics

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External
Recognition

Editorial Policy
At Sumitomo Corporation Group, to respond to the interests of our stakeholders, we are working to provide both financial and non-financial corporate information by utilizing various
information disclosure tools. Of these tools, the ESG Communication Book summarizes detailed information about our activities related to sustainability from the perspective of ESG(Environment, Society, and Governance). The below diagram is an overview that shows the information listed in each disclosure tool and its position. Please also refer to the tools
other than this book, such as the Integrated Report.

▌ Sumitomo Corporation Group’s Information Disclosure Tools
Non-financial Information

Integrated Report
ESG Communication Book

Company
Brochure

Concise/
Selected
Information

Newsletter toShareholders(SC NEWS)

Story
Book

Sumitomo
Corporation’s
WebsiteCorporate
Governance
ReportConsolidated
Financial
Statements
Quarterly
Earnings
ReportFinancial Information

Reporting boundary of this book
Sumitomo Corporation and group companies
Reporting Period of this bookBusiness activities mainly in FY2021 (April 2021-March
2022), including some policies and activities before March
2021 and after April 2022.
Date of Issue
Ver.1 September 30, 2022

Sumitomo’s Business Philosophy

Disclosure
Book

Integrated Report

Business Report /Consolidated
Financial
Statements /Financial Statements(Included in Notice ofConvocation)

As a communication tool for all stakeholders, this is an annual report that integrates
our financial and non-financial information. This Integrated Report helps stakeholders
understand the overview of our value creation and the enhancement of corporate
value in the short, medium, and long term as well as corporate strategy and theoverall progress of our business.

Comprehensive/
Detailed
Information

ESG
Communication
Book

Business Report /Consolidated
Financial Statements /Financial Statements(Included in Notice ofConvocation)

Of non-financial information, the ESG Communication Book summarizes detailed
information about our activities related to sustainability from the perspective ofenvironmental, social, and governance (ESG). We provide the latest related
information by disclosing it on our corporate website and updating it as necessary.
Starting with the 2022 edition, we are breaking it up into two books, namely “the Story
Book,” which communicates our mechanisms of value creation, and “the Disclosure
Book,” which provides comprehensive information. The information necessary forstakeholders is disclosed in an easy-to-understand manner.
The Business Report conveys important matters related to business results andstatus of each fiscal year. The Consolidated Financial Statements disclose ourcorporate group’s consolidated financial position and profit/loss. The Financial
Statements disclose our non-consolidated financial position and profit/loss. (All three
are in accordance with the Japanese Companies Act.) Conformed Guidelines〇 Final Report: Recommendations of the Task Force on Climate-related
Financial Disclosures〇 World Economic Forum: Stakeholder Capitalism Metrics

 Referenced Guidelines○ Ministry of Economy, Trade and Industry:
Guidance for Collaborative Value Creation○ ISO26000: Guidance on social responsibility

Sumitomo’s Business Philosophy

Contact

Sumitomo Corporation
Corporate Sustainability Department
TEL: 03-6285-5000
WEB: Sustainability Contact Form
https://www.sumitomocorp.com/en/jp/info/sustainability○ Ministry of the Environment: Environmental Accounting Guidelines. 2005
○ METI / MOE: Calculation and Reporting Manual for Greenhouse Gas Emissions© 2022 Sumitomo Corporation

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ESG
Quantitative Data

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Recognition

Our Approach to Sustainability
Sumitomo Corporation Group will take a step forward in its sustainability management utilizing its strengths. We will create the value that society truly needs by further clarifying
the roles we play in achieving a sustainable society and strategically allocating management resources as we anticipate the shifting business landscape impacted by these social
issues.

▌ Sumitomo Corporation Group’s Sustainability initiatives
Sumitomo Corporation Group has grown into an integrated trading company over the past
100 years since it was originally founded as the Osaka North Harbor Company Limited in
1919. The history of Sumitomo, which formed the basis of Sumitomo's Business Philosophy,
can be traced back to some 430 years ago when its business focused on copper refining
which later advanced to copper mining.
All employees of Sumitomo Corporation learn the history of the Besshi Copper Mines.
Through its modern business management, the Besshi Copper Mines contributed in leadingindustrial development in Japan, however, there were negative impacts on local
communities including deforestation of nearby forests and damage to agricultural crops from
sulfur dioxide emitted by smelters. Management at that time took measures including
reforestation of the Besshi Copper Mines and relocation of the smelting plant to an
uninhabited island off the coast.

▌ What Actions We Need to Take Now
Today, we face many social challenges that threaten the sustainability of society including
climate change, loss of biodiversity, and human rights issues.
Global goals and guidelines are adopted such as the Paris Agreement, the UN’s Social
Development Goals (SDGs), and the Business and Human Rights Guiding Principles, andvarious players including corporations are making efforts to achieve these goals.
In 2017, based on Sumitomo’s Business Philosophy and Sumitomo Corporation Group’s
Corporate Mission Statement, the Group identified the six material issues for achieving
sustainable growth with society. Of the six material issues, four were identified as how eachof our business contributes to society and two were added as our important management
topics. We have been placing the six material issues at the core of our management toconstantly be aware that the business strategies and each business align with the material
issues and making sure that Sumitomo Corporation Group is contributing to society.

“Benefit for self and others, private and public interests are one and the same”, which is one

Sumitomo Corporation Group's Material issuesof the credos of Sumitomo’s Business Philosophy, and the actions taken by ourpredecessors to prioritize the sustainability of natural environment and the local community
over short-term profit, are deeply rooted in heart of every employee at Sumitomo
Corporation. We are confident that our business serves the public interest.
Sumitomo’s Business Philosophy

Today, after 100 years since the Osaka North Harbor Company Limited has established, we
have 70,000 employees working at more than 900 group companies in 81 countries andHowever, social issues such as the climate change have become increasingly serious andhave become a major threat to the sustainability of society. We believe that we now need tomake an even stronger commitment to further identifying the issues that we should address
and the roles that we should take for the development of a sustainable society, and theSumitomo Corporation Group has commenced initiatives to enhance its sustainability
management.
Enhancing sustainability management

regions and we do our business by engaging with multiple stakeholders including customers,
local communities, business partners and employees. Our business as well as ourrelationship with the stakeholders have expanded to a global scale and we believe that our
mission is to protect the planet and pursuing development for the world and better lives forour stakeholders.

© 2022 Sumitomo Corporation

Corporate Mission Statement⇒ For more information on the value creation story,
please see the ESG Communication Book (Story Book).

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Sustainability Promotion System▌ Organization for Promoting Sustainability

Board of Directors

Sumitomo Corporation has established the Corporate
Sustainability Department, which is responsible for theManagement Council

planning of measures to promote sustainability andensuring

their

implementation

throughout

theCorporate Sustainability Committee
Discussion of relevant measures, and information sharingorganization.
Meanwhile, the department coordinates with generalmanagers,

who

are

responsiblefor

Chairperson: Chief Strategy Officer
Members:
General managers of business units’ Planning & Coordination
Department, general managers of related corporate departments
Secretariat: Corporate Sustainability Dept.

promotingsustainability within each business unit, and with thesustainability promoting staff of each business unit’s
Planning & Coordination Department. The department
also works with the sustainability promoting staff ofStructure for groupwide implementation andpromotion of sustainability-related measures

relevant corporate departments and overseas regionalorganizations to ensure that sustainability promotion
measures are fully implemented groupwide and also

Corporate Sustainability Departmentthat the different business units/initiative and regionalorganizations

pursuemeasurestailoredto

Corporate groupthespecifics of their business or region.

Internal Auditing Dept.

Corporate Planning & Coordination Dept.

The Corporate Sustainability Committee acts as an

Corporate Communications Dept.

Global Coordination Dept.

Investor Relations Dept.

IT Governance & Administration Dept.

discusses important policies, measures, and initiatives

Sumitomo Corporation Global Research

Human Resources Dept.

Corporate Legal & General Affairs Dept.

Legal Dept.

Financial Planning & Coordination Dept.

Finance Dept.

initiatives relating tosustainability promotion are

Some important initiatives are subject to the decisionsof the Management Council and the supervision of theBoard of Directors.
© 2022 Sumitomo Corporation

Transportation & Construction Systems Business Unit
Infrastructure Business Unit
Living Related & Real Estate Business Unit
Mineral Resources, Energy, Chemical & Electronics Business Unit
Energy Innovation Initiative

Risk Management Dept. No.1

referred by the committee to the Management Council
and the Board of Directors for further discussion.

Metal Products Business UnitMedia & Digital Business Unit

advisory body to the Management Council andrelating to the promotion of sustainability. Important

Business units / Initiative

Domestic ＆ Overseas organizational structure
East Asia

Asia & Oceania

Europe & CIS

Middle East & Africa

Sustainability managers (general managers of business units’ Planning & Coordination Department)

AmericasJapan

Sustainability promoting staff

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Relationship between Various Social Issues and the Company’s Business
At present, international organizations, national governments, local governments, private enterprises, and other groups and individuals throughout the world are cooperating toachieve common goals for sustainable development: The Sustainable Development Goals (SDGs). The SDGs are becoming the common language for people who are
addressing many social issues to achieve sustainable societies. Our Group has risks and opportunities for various social issues in our business activities covering different
countries and industries, and aims to contribute to the achievement of the SDGs through addressing material issues and to realize a sustainable society.
Major Risks(enhancement of competitiveness)

Major Opportunities(expansion of earning opportunities)

Climate Change

Decreased demand for coal fuel due to GHG emissions
regulations, etc.

Promotion of renewable energy business and environmentallyconscious business, etc.

Water Resources

Continuity risks for business involving production processes inwater shortage areas, etc.

Promotion of water supply and sewerage/freshwater generation
business to contribute to addressing water issues around the world,
etc.

Biodiversity

Impact of shortage of raw materials due to destruction ofnatural ecosystems, reputation loss due to manifestation ofadverse impacts, etc.

Creation and development of business opportunities by maintaining
and protecting ecosystems, improvement of employee motivation,
etc.

Prevention of Pollution

Reputation loss and decreased trust due to the occurrence ofenvironmental problems, etc.

Development and stability of business through harmonious
coexistence with the global environment, etc.

Resource Use

Business continuity risk due to the loss of the public value offorests, etc.

Expansion of forest management business by securing and using
sustainable forest resources, etc.

Human Rights

Hollowing out of human resources, reputation loss anddecreased trust as a result of human rights violation, etc.

Development and stability of local communities and businessthrough harmonious coexistence with local residents, etc.

Work Health and
Safety/Health andProductivity
Management

Decreased labor productivity, hollowing out of humanresources, and business continuity risk due to inappropriate
risk management, etc.

Improvement of labor productivity and employee motivation by
giving due consideration to health, etc.

Human Resources
Management

Hollowing out of talented human resources, decreased laborproductivity, decreased motivation of employees, and business
continuity risk due to lack of appropriate measures andinappropriate working environment, etc.

Human resources retention, enhanced labor productivity, increasein employee motivation, and opportunities to enter new businessareas through providing appropriate human resource development
programs and realizing a fulfilling working environment, etc.

Supply Chains

Business continuity risk and reputation loss as a result of theoccurrence of problems related to the environment, humanresources and labor practices in supply chains, etc.

Development and stability of business by resilient value chains, etc.

Industrial/ Technological Deterioration of existing business and hollowing out of humanresources as a result of the shift to ICT, the disappearance ofInnovation
borders for all industries, and complexity, etc.
Healthcare

Local infrastructure/
Community Planning

Material Issues

Enhancement of existing business and creation of new businessmodels through the shift to ICT, etc.

Medical malpractice-related risks, etc.

Improvement of access to better medical care, enhancement ofefforts to respond to increased demand for drugs, etc.

Business continuity risks as a result of the occurrence ofproblems related to the environment, human resources andlabor practices at sites of urban development andinfrastructure construction, etc.

Promotion of urban development and infrastructure projects mainlyin emerging countries, etc.

© 2022 Sumitomo Corporation

SDGs

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Enhancing Sustainability Management▌ The Enhancement of Sustainability Management that We Seek
In addition to clear commitment to the role we play in achieving a sustainable
society, it is necessary that we focus on the optimal status of companies andPursue sustainable growth with society

their business that will be needed in a sustainable society, such as carbon

Sustainable society

neutrality, circular economy and zero violation of human rights. We need torecognize the paths to achieve them and the challenges to be overcome, andconsider the strategies and allocation of management resources that weshould implement from a long-term perspective.
We believe that capturing and pursuing the ideal state of society will bring

Sustainable growthmore business opportunities. The Sumitomo Corporation Group's sustainability
management is about perfectly aligning the vision of a sustainable society with

Commitments to solve
social issues

the Group's value creation and sustainable growth, and we continue to work on
establishing a management framework to achieve the vision.

Monitoring based on mediumto long-term goals▌ Positioning in the Medium-Term Management Plan SHIFT 2023

Monitoring long-termbusiness outlook

Within the Medium-Term Management Plan “SHIFT 2023” that we formulated

Awareness of the long-term
nature of social issues

in May 2021, we have identified three “SHIFTs”: Business Portfolio SHIFT,
Framework SHIFT, and Management Base SHIFT. In particular, we consider“enhancement of sustainability management” along with DX importantelements to be incorporated in promoting Business Portfolio SHIFT to one thatis both highly profitable and resilient to changes in the business environment
while firmly grasping the two major social trends of digitization and the demand
for sustainability.

© 2022 Sumitomo Corporation

Value creation

Strategic allocation ofmanagement resources
Portfolio based on long-termbusiness outlook

Sumitomo Corporation Group’s value creation model: Financial
capital, Human capital, Intellectual capital, Organizational/Group capital,
Global network capital, Business relation capital, and Brand capital“Enriching lives and the world”
Sumitomo’s Business Philosophy and
Sumitomo Corporation Group’s Corporate Mission Statement

Medium-Term Management Plan SHIFT 2023

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Enhancing Sustainability Management▌ What the Group Will Bring about for the Development of a Sustainable Society
As Sumitomo Corporation works to enhance its sustainability management, it has identified “Mitigation of climate change”, “Circular economy”, “Respect for human rights”, “Development of local
society and economy”, “Improvement of living standard” and “Quality education” as the six key social issues it needs to address, and has set long-term goals and medium-term goals for eachissue. As we pursue these lofty goals, it will be necessary for us to demonstrate our strengths as an integrated trading company. The Group will make use of its human resources, businessexpertise as well as networks and business relationships.
The six social issues will demonstrate our rolein the society and become our guideline to theGroup’s entire business operations.
The six social issues have two themes: thesustainability of society and development andadvancement of society.
The sustainability of society is a globallyshared goal as well as a major premise of theGroup’s business. On the other hand, thesolutions for pursuing the sustainability ofsociety will be generated from further socialand economic development and therefore, we
believe that these two themes are mutuallycomplementary.
Also, we will pursue to achieve these goals
through business activities, however, we willcontributetoprovidingqualityeducation

through our philanthropy as well as humanresources development initiatives.

© 2022 Sumitomo Corporation

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Sumitomo Corporation Group’s Key Social Issues and Goals / Progress▌ Setting Long-term and Medium-term Goals to Address Key Social Issues
Key social issues
Mitigation ofclimate change

Long-term goals Aim for carbon neutrality by
2050 and challenge torealize sustainable energy
cycle

Medium-term goals
 Reduce the Group’s CO2 emissions 50% or more by 2035 (compared to 2019)–––

Reduce CO2 emissions of the power generation business by 40% or more by 2035 (of which reduce 60% or more for coal-fired power generation
business); power generation portfolio in 2035 to comprise 20% coal-fired, 50% gas-fired and 30% renewables (*1) in terms of net ownershipgeneration capacity.
Reduce indirect CO2 emissions (*2) associated with the fossil fuel upstream business by 90% or more by 2035.
Reduce CO2 emissions in all other businesses (*3).

 Establish businesses that will form the foundation for a sustainable energy cycle in society–––

Sustainability of society

CirculareconomyRespect forhuman rights

Develop hydrogen and other forms of carbon-free energy, increase supply of renewable energy (3GW or more by 2030)(*4), and expand new
power and energy services.
Expand businesses encouraging electrification, fuel conversion, improved energy and coal efficiency, and energy conservation.
Capture, store and utilize CO2 via carbon recycling, forestry business, CCS, and emissions credit trading, etc.

 Shift to recyclable, efficienttechnologies and products

 Use renewable and recyclable raw materials, collect waste, and promote improved efficiency of product usage

 Sustainable use of natural
resources Reinforce the sustainable procurement system for major natural resources used by the Group Respect human rights
through all of ourbusinesses and supply
chains Promote and ensure respect for human rights in accordance with the United Nations Guiding Principles on Business andHuman Rights and Sumitomo Corporation Group’s Human Rights Policy

–
–

–

–

–

Expand use of raw materials derived from recycled or renewable resources.
Improve efficiency of product usage and expand businesses that promote longer product life (sharing, sales of used items, leasing, rentals, etc.) .

Identify major natural resource-related commodities requiring sustainable procurement, establish procurement policy, promote certification, andstrengthen voluntary auditing system.

By 2023, achieve 100% participation rate in human rights education based on the Guiding Principles, and 100% implementation rate in regionalorganizations and subsidiaries.
Strengthen risk analysis in human rights due diligence to accurately assess risks in all businesses, including the supply chain, and implement risk
mitigation measures by 2025. Establish a more effective grievance mechanism(*5) based on assessment results.

 Ensure a safe workplace environment–

Strengthen efforts to achieve zero accidents at major business workplaces, focusing on manufacturing, processing, and projects involving largescale construction.

 Achieve a diverse organization grounded in mutual respect––

Provide a safe working environment that is free from discrimination and harassment.
Promote human resource management that enables individuals to demonstrate their abilities regardless of nationality, age, gender, sexual
orientation, gender identity, or any other attributes or values.

(*1) As of 2020：coal 50%, gas 30%, renewables 20% (*2) Indirect CO2 emissions generated by others with the use of fossil fuel (*3) Contribute to CO2 reduction by setting targets for individual businesses(*4) As of 2020：1.5GW (1GW = 1 billion W) (*5) A process that employees, local residents or other stakeholders can use to lodge complaints regarding human rights violations and other issues related to enterprise’sbusiness activities including its supply chain, for resolving such issues© 2022 Sumitomo Corporation

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Sumitomo Corporation Group’s Key Social Issues and Goals / Progress▌ Setting Long-term and Medium-term Goals to Address Key Social Issues
Key social issues

Long-term goals

Medium-term goals

Development and evolution of society Contribute to developmentof local industries andhuman resources Develop local industries, create jobs, and develop human resources through the Group’s global business operations

 Develop industrial andsocial infrastructure Establish industrial and social infrastructure that contributes to the sustainable development of society

Improvement ofliving standard Provide advanced lifestylerelated services

 Deliver advanced lifestyle services that help to solve social issues such as urbanization and aging populations

Qualityeducation

 Contribute to quality
education

 Provide quality and equal learning opportunities through 100SEED(*) activities

Development oflocal society
and economy

–
–
–

–

–
–
–

Promote sustainable, highly productive and value-added industries, and coexist with local communities through business.
Create employment and develop management and highly skilled human resources at the Group's business sites.

Promote infrastructure that enables access to high-quality energy, water, transportation, logistics, communications, and financial services, as wellas businesses that enhance urban functions.

Provide more advanced services and new functions that improve the standard of living, such as mobility, media and telecommunications,healthcare services, and smart city development, based on new technologies and concepts.

Quantitatively expand the scope of learning opportunities.
100% satisfaction of beneficiaries.
Continue to have at least 5% of all employees participate annually (scope is Sumitomo Corporation, regional organizations and Group
companies).

(*) Social contribution activity program with employee participation at Sumitomo Corporation Group▌ Identification Process of Key Social Issues
In FY2019, we launched an internal project team to enhance the sustainability management. Based on the characteristics of our business activities as an integrated trading
company, the project team came up with hypotheses related to important issues deeply involving the Group and picked out several issues from the long list. At the same time, they
conducted surveys and interviews with the general managers of each business unit and division concerning opportunities and risks related to social issues within the strategies andbusiness activities of each organization based on the long list. They then analyzed the relationship of our businesses to each issue. Finally, after comparing their hypotheses withthe survey results and organizing them into categories, the team identified six key social issues. The key social issues and long-term goals were decided in June 2020 after
resolutions by the Management Council and the Board of Directors. We also decided on medium-term goals in May 2021. In this series of processes, opinions were exchanged withexperts on the environment and human rights, institutional investors, international organizations, and others to verify that the expectations of our various stakeholders have been
properly reflected.

© 2022 Sumitomo Corporation9

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Sumitomo Corporation Group’s Key Social Issues and Goals / ProgressSpecific initiatives for the long-term and medium-term goals set for each issue and the progress of those initiatives are monitored by the Corporate Sustainability Committee,
an advisory body to the Management Council. Please see below for the main examples of initiatives for each key social issue.
Mitigation of Climate Change - Representative Initiatives

Long-term goals: Aim for carbon neutrality by 2050 and challenge to realize sustainable energy cycle
Medium-term goals: Reduce the Group's CO2 emissions 50% or more by 2035 (compared to 2019)
Business unit Field

Goals

Progress● Reduce CO2 emissions of the power generation business by 40% or more by 2035 (of which reduce 60% or more for coal-fired power generation business); power generation portfolio in 2035 to comprise 20% coal-fired, 50% gas-firedand 30% renewables in terms of net ownership generation capacity.
Infrastructure

Generation

Reduce CO2 emissions of the power generation business by 40% or more by 2035 (of which reduce 60% ormore for coal-fired power generation business) (compared to 2019)

Reduced CO2 emissions of the power generation business by 4.1% (of which, reduced 3.6%
or more for coal-fired power generation business) (compared to 2019)

Infrastructure

Generation

Power generation portfolio in 2035 to comprise 20% coal-fired, 50% gas-fired and 30% renewables in terms of
net ownership generation capacity

Power generation portfolio at end of FY2021 comprised 53% coal-fired, 31% gas-fired and
16% renewables in terms of net ownership generation capacity● Reduce indirect CO2 emissions associated with the fossil fuel upstream business by 90% or more by 2035.
MineralResources,
Energy,Chemical &Electronics

Upstream offossil fuels

Reduce indirect CO2 emissions associated with the fossil fuel upstream business by 90% or more by 2035
(compared to 2019)

Reduced indirect CO2 emissions associated with the fossil fuel upstream business by 16.7%(compared to 2019)● Reduce CO2 emissions in all other businesses.
Metal
Products

Steelproducts

Measure CO2 emissions in the supply chain, improve measurement accuracy, visualize emissions, verify
methods for reducing emissions, and run proofs of concept

Completed visualization of CO2 emissions (Scope 1/2) at two coil center plants, aiming forgreener procurement of electricity

Metal
Products

Tubularproducts

Aim to go carbon neutral at the next-generation distribution center in West Texas, United States

Completed shift to renewable energy (solar power) for own power consumption

Transportation
Automotive& Construction
parts
Systems

Reduce CO2 emissions at KIRIU by 30% by FY2024 (compared to FY2019)

Reduced CO2 emissions and power consumption following factory refurbishment andinstallation of storage battery systems

Construction
Transportation& mining& Construction
systems
Systemssales

Reduce direct/indirect CO2 emissions from own operations (Scope 1/2), reduce CO2 emissions from customer Completed confirmation of method for calculating CO2 emissions. Reduced electricity
operations (Scope 3), and promote sales of electric machinery and automated machinery
consumption by capturing sunlight, reused used water, constructed an environmentallyfriendly facility, continued promoting the sales of autonomous construction machinery, andbegan selling electric trucks.

Infrastructure

Logistics

At SGL, visualize the transportation part of CO2 emissions (categories 4 and 9 of GHG Protocol Scope 3)
indirectly emitted by the company and operating companies

Calculated and visualized CO2 emissions for domestic and international transportation
handled by SGL (acquired assurance from an external organization), and began supporting
sales and the operating companies of the Group

Living Related& Real Estate

RetailReduce energy consumption and CO2 emissions at SUMMIT storesInstalled energy-efficient refrigeration, freezing equipment and adopted to LED lighting

Living Related& Real Estate

Fresh
Produce

Set a CO2 emissions reduction target and obtained SBT validation and identified projects
Reduce Fyffes GHG emissions to achieve the Science-Based Target in line with the 1.5˚C scenario,
representing a 25% reduction for scope 1 and 2 in CO2 eq./kg of fruit harvested by 2025, and a 10% reduction which will deliver 21% reduction in Scope 1 and 2 (as of 2022)
for scope 3 in CO2 eq./kg of fruit harvested and distributed by Fyffes and its suppliers, from a 2020 base year.

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Mitigation of Climate Change - Representative Initiatives
Business unit Field

Goals

Progress

Living Related& Real Estate

Real estate

Aim to obtain CASBEE evaluation and rating (a type of green building certification) at logistics facilities andoffice buildings owned and developed by Sumitomo Corporation

Obtained new assessments for eight office buildings owned by Sumitomo Corporation(grades: six S and two A)

Living Related& Real Estate

Real estate

At the fund and REIT managed by our group, obtain GRESB, an ESG assessment specific to the real estate
sectorObtained GRESB 4 Stars for SOSiLA Logistics REIT, Inc. and SC Realty Private Investment
Corporation

Living Related& Real Estate

Real estate

Develop projects that meet the "ZEH-M Oriented" standard (reduce primary energy consumption of entire
condominium, including common areas, by at least 20%)

Completed registration as a ZEH developer under the ZEH Developer Program

Media &
DigitalIT

Reduce electricity consumption and CO2 emissions at SCSK data centers, etc.

Set a CO2 emissions reduction target and obtained SBT certification

Long-term goals: Aim for carbon neutrality by 2050 and challenge to realize sustainable energy cycle
Medium-term goals: Establish businesses that will form the foundation for a sustainable energy cycle in society
Business unit Field

Goals

Progress●Develop hydrogen and other forms of carbon-free energy, increase supply of renewable energy (3GW or more by 2030)(*4), and expand new power and energy services.
Infrastructure

RenewableenergyIncrease supply of renewable energy (3GW or more by 2030)

Renewable energy: 1.5GW (as of end of FY2021)

Infrastructure

Thermalpower
generation

Promote a business model utilizing carbon offset technologies (CCUS, hydrogen, etc.) to achieve carbon
neutrality by 2050

Support for host countries to shift power sources to renewable energy, etc.
Considering how to decarbonize and low-carbonize existing coal-fired power generation
businesses such as through new technologies and new fuels●Expand businesses encouraging electrification, fuel conversion, improved energy and coal efficiency, and energy conservation.
Metal
Products

Steel products Participate in trading activities and related businesses for direct reduced iron and electric furnace materials that Currently considering participation in both trade and business, examining functions that cancontribute to decarbonization of the steel supply chain
be provided for the industry-wide goal of decarbonization

Metal
Products

Oil & gas
drilling

Provide services that contribute to the reduction of direct CO2 emissions in oil and gas drilling operations

Supported drilling automation and operational optimization in oil and gas well development byintroducing SEKAL’s software

Transportation Mobility& Construction
Systems

Promote the widespread use of EVs/PHVs/FCVs and the development of EV infrastructureEntered the electric bus service business (completed a retrofit EV bus), entered the electrictaxi service business (trialed an EV taxi operation), and launched a trial of an EV car sharing
service for corporate clients

Transportation Leasing& Construction
Systems

Promote sustainability-related businesses in SMFL (cumulative value of contracts from FY2020 to FY2029: 1
trillion yen)

Increased the cumulative balance in FY2021, including by expanding the solar power
generation business© 2022 Sumitomo Corporation11

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Mitigation of Climate Change - Representative Initiatives
Business unit Field

Goals

Transportation Ship
& Construction
Systems

At Oshima Shipbuilding, continue selling new ships with 30% reduction in CO2 emissions (compared to 2008). Selling fuel-efficient ships to be constructed by Oshima Shipbuilding and have started
Continue developing new ships with 40% reduction in CO2 emissions
development of ammonia fueled ships together with Oshima

Progress

Transportation Ship
& Construction
Systems

Contribute to the reduction of CO2 emissions from both coastal and ocean-going ships by promoting Corvus
Energy marine batteries

Established joint venture with marine battery manufacturer, Corvus Energy.
Will expand sales of battery systems and provide a maintenance service

Transportation Commercial& Construction aviation
Systems

Build and expand next-generation air mobility services utilizing electric vertical take-off and landing (eVTOL)
aircraft and other methods

Conducted proofs of concept in Japan and overseas to facilitate drone-based mobility
services

Transportation Commercial& Construction aviation
Systems

In the aircraft leasing and engine leasing portfolio, increase the portion of more fuel-efficient and moreenvironment-friendly aircraft and engines (target: 70% for aircraft and 50% for engines, of the total portfolio,
respectively)

Reached c. 65% for aircraft and c. 50% for engines, respectively

Transportation Mobility hub& Construction
Systems

Install 1,000 EV chargers at parking spaces in Nordic Countries by the end of FY2024 as a way of supporting
the expanded use of EVs through the deployment of EV chargers at parking spaces.

Number of EV chargers installed: In FY2021, installed 101 new EV chargers as planned.
Will continue to promote installations while ascertaining demand

Transportation Fleet& Construction management
Systems

Build up an EV life cycle management model in which EV is owned over the long term, from use in a vehicle to Invested in DriveElectric, an EV leasing and fleet management business based in the UK
use as a reused battery, utilizing them for both mobility and energy

Transportation Aerospace
Efforts for hydrogen-fueled aircraft businesses, realizing carbon neutral& Construction manufacturing
Systems

At Sumitomo Precision Products, continued to develop technologies for next-generation(hydrogen-powered, electric) aircraft

Transportation Aerospace
Contribute to the reduction of CO2 emissions by achieving lightweight aircraft using metal 3D printing& Construction manufacturing technologies
Systems

Invested in Sintavia, a US-based company with strengths in metal 3D printing technologies.
Promoted the widespread use of parts manufactured with these technologies

EII

Established the Energy Innovation Initiative (EII). Formulated overarching strategy,
and began considering clean energy platform businesses (hydrogen, green power, energy
storage, thermal)

Green energy

Build a combined clean energy services model that leverages our integrated corporate strength,
creating new demand and synergies with mobility, DX, smart infrastructure, etc.

●Capture, store and utilize CO2 via carbon recycling, forestry business, CCS, and emissions credit trading, etc.
EII

Forests

Acquire and expand the scale of forest resources and improve the value of forest assets

Acquired additional forest assets in New Zealand

EII

Green energy

Promote carbon credit businesses that contribute to real CO2 emission reductions

Built a cross-organizational collaboration platform to promote carbon solutions businesses,
and established a dedicated organization© 2022 Sumitomo Corporation

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Circular Economy - Representative Initiatives

Long-term goals: Shift to recyclable, efficient technologies and products
Medium-term goals: Use renewable and recyclable raw materials, collect waste, and promote improved efficiency of product usage
Business unit Field

Goals

Progress●Expand use of raw materials derived from recycled or renewable resources.
Infrastructure

PET bottle
recycling

Expand the PET bottle recycling business (Tomra Japan)

Increased resource recovery by 6% (compared to 2020)

Infrastructure

Logistics

Accelerate considerations for switching to biotech inner bags attached to the inside of containers used fortransportation and storage

Decided on specifications for biotech liner bags. Currently performing various verifications,such as transportation tests and storage tests

Living Related& Real EstateFresh Produce

At Fyffes, all packaging will be compostable, recyclable or reusable by 2025

Completed introduction of compostable, recyclable, and reusable packaging for 98.1% of all
products

MineralResources,
Energy,Chemical &Electronics

ChemicalExpand sales volume of high value-added resins, demand for which is expected to grow with the shift tolighter weight automobiles and EVs

Made steady progress against the planned schedule

MineralResources,
Energy,Chemical &Electronics

ChemicalExpand product sales volumes for a manufacturer of plastic substitute materials (plant-derived materials) inwhich Sumitomo Corporation has invested

Investee commenced construction of a mass-production plant (scheduled for completion
during FY2022)

MineralResources,
Energy,Chemical &Electronics

agriculturalchemical
distribution

Increase the sales ratio of biopesticides (including mixtures with chemical pesticides) to 20%

Increased the sales ratio of biopesticides in FY2021 to 8.5% (actual)(Sales: USD 56.2 million)

EII

Storage battery

Promote the reuse of EV batteries and develop technologies. Create reuse opportunities

Currently developing technologies to build large-scale stationary storage systems based on
the secondary use of EV batteries●Improve efficiency of product usage and expand businesses that promote longer product life (sharing, sales of used items, leasing, rentals, etc.) .
Transportation Automotive& Construction sales &marketing
Systems

Promote product lifetime extension through used car sales and after-sales services

Increased used car sales by 24% and vehicle service, maintenance and repair by 18%
compared with the previous fiscal year

Transportation Mobility hub& Construction
Systems

Promote the EV car-sharing service businessIn addition to car sharing, commenced a subscription service for corporate and private
customers in the second half of FY2021 (16 vehicles)
As for the existing car sharing service, on average, 3,000 users made 9,000 trips per month
Cumulative registered users reached 60,000 for 460,000 trips

Media &
DigitalCommunications Achieve resource savings through the handset lifecycle management businesses(new device sales, collection, refurbishing and redistribution)© 2022 Sumitomo Corporation

Used handsets collection and redistribution to domestic and overseas markets

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Circular Economy - Representative Initiatives

Long-term goals: Sustainable use of natural resources
Medium-term goals: Reinforce the sustainable procurement system for major natural resources used by the Group
Business unit Field

Goals

Progress●Identify major natural resource-related commodities requiring sustainable procurement, establish procurement policy, promote certification, and strengthen voluntary auditing system.
Living Related& Real Estate

Food distribution Promote the sustainable procurement of palm oil

Obtained the Roundtable on Sustainable Palm Oil (RSPO) Mass Balance certification

Living Related& Real Estate

Food distribution Procure and promote the widespread use of Bird Friendly -certified coffee

Maintained Bird Friendly certification

EII

Forests

Obtain forest certification for most of our forested land holdings, and implement sustainable management

Maintained FSC certification for our forested lands and logging concessions, continued toobtain CDP forest assessments, and established and operated our Forest Management
Policy and Sourcing Policy for Forest Products

EII

Forests

Procure only forestry products managed in accordance with internationally recognized certification
programs, of which legality and sustainability have been certified, and monitor reforestation using remotesensing technologies (satellite image analysis)

Conducted a monitoring trial using satellite image analysis. Conducted an independent
questionnaire for suppliers to ensure the legality and sustainability of their products®

®

Respect for Human Rights - Representative Initiatives

Long-term goals: Respect human rights through all of our businesses and supply chains
Medium-term goals: Promote and ensure respect for human rights in accordance with the United Nations Guiding Principles on Business and Human Rights andSumitomo Corporation Group’s Human Rights Policy
Business unit Field

Goals

Progress●By 2023, achieve 100% participation rate in human rights education based on the Guiding Principles, and 100% implementation rate in regional organizations and subsidiaries.
CompanywideーBy 2023, achieve 100% participation rate in human rights education based on the Guiding Principles, and100% implementation rate in regional organizations and subsidiaries.

Completed development of content for human rights education tool (e-learning) (commerced
rollout from FY2022)●Strengthen risk analysis in human rights due diligence to accurately assess risks in all businesses, including the supply chain, and implement risk mitigation measures by 2025. Establish a more effective grievance mechanism based on
assessment results.
Media &
Digital/Living Related& Real Estateー© 2022 Sumitomo Corporation

By 2025, accurately assess risks for all operations, including supply chains

Commenced human rights due diligence on a business-unit basis with the aim of covering all
businesses by 2025. (In FY2021, covered the Media & Digital Business Unit and the Living
Related & Real Estate Business Unit.) Established a consultation desk on our corporatewebsite as part of our grievance mechanism

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Respect for Human Rights - Representative Initiatives
Business unit

Field

Living Related& Real Estate

Food distribution In industries with high human rights risks, understand the human rights risk
situation of suppliers

Goals

Progress
In the area of food distribution, surveyed four suppliers in countries and of products identified as having high human rights risks

Media & Digital

Communications Ensure that business operations comply with our Human Rights Policy

In overseas telecommunications business, we have carried out a human rights impact assessment. And we will tackle and consider
further actions to mitigate and prevent risks.

Medium-term goals: Reinforce the sustainable procurement system for major natural resources used by the Group
Business unit

Field

Goals

Progress●Strengthen efforts to achieve zero accidents at major business workplaces, focusing on manufacturing, processing, and projects involving large-scale construction.
Company-wideーStrengthen efforts to achieve zero accidents

Metal Products

Steel products

Implement intrinsic safety assurance activities and employee training, andConducted self-audits based on a safety self-checklist (150 items) and promoted efforts for improvement based on the audit results
improve activities through PDCA cycle (utilizing TQM management techniques)

Metal Products

Tubularproducts

Under a division slogan of “ZERO Harm,” aim to measure and minimize theLost Time Incident Rate (LTIR) and Total Recordable Incident Rate (TRIR) at
each work site

There was 1 LTI, LTIR and TRIR were 0.2%, and awareness-raising activities, including e-learning and preparation of a disasterprevention rulebook, were continuously conducted with an aim of zero lost time and zero work-related accidents

Transportation& Construction
Systems

Automotive
manufacturing

Reduce the number of work-related accidents

Reduced work-related accidents at KIRIU and achieved zero work-related accidents at SDVTransportation& Construction
Systems

Construction &mining systems
sales/constructi
on equipment
rentalAim for LTIR of 0.25 or less at 50% of operating companies in 2021,
1.0 or less at all companies in 2022, and 0.25 or less at all companies in 2023

Total LTIR was 0.44.
57.1% of operating companies achieved the target LTIR of less than 0.25
Follow-up provided to further reduce accidents

Infrastructure

Power plant
infrastructure
EPC

Aim for zero Lost Time Injuries (LTI) through establishing HSE rules andthrough on-sight training and meetings

HSE rules completed for each project

Living Related& Real EstateFresh Produce

At Fyffes, by 2025 no work-related fatalities and no severe work-related
injuries

Started to have awareness campaigns aiming to encourage behaviour and culture change among the people who use a motorcycle
to get to and from the workplace. Developed and implemented a road safety training program, and began reinforcing the preventive
theme on road. Fyffes has begun the roll out of a companywide safety management system, beginning in Latin America to replace
individual systems

MineralResources,
Energy,Chemical &Electronics

Electronic parts

Maintain zero work-related accidents at Sumitronics (in factories)

Achieved zero work-related accidents

MineralResources,
Energy,Chemical &Electronics

Upstream of
Reduce work-related accidents in the upstream mineral resources and energy
metal resources business (Ambatovy Project)© 2022 Sumitomo Corporation

Implemented e-learning on emergency responses in the event of an accident or a natural disaster, conducted lifesaving courses, andintroduced a system for sharing damage situations

Total recordable injury frequency (TRIF) was 0.09, achieving the annual safety target for the worksite. Highest value since the start of
the Ambatovy Project. Identified causes at the time of the work-related accidents, took thorough measures to prevent recurrence,
and alerted employees. To foster a culture of safety, also continued efforts to formulate a process safety management system, anddefine and implement appropriate standard operating procedures

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Sumitomo Corporation Group’s Key Social Issues and Goals / Progress
Respect for Human Rights - Representative Initiatives

Long-term goals: Respect human rights through all of our businesses and supply chains
Medium-term goals: Achieve a diverse organization grounded in mutual respect
Business unit Field

Goals

Progress●Provide a safe working environment that is free from discrimination and harassment.
CompanywideーProvide a safe working environment that is free from discrimination andharassment

As part of activities raising awareness for human rights and Dowa issues, conducted training for Group executives andemployees led by an outside expert
Organized awareness-raising activities, such as training for the prevention of sexual harassment and power harassment, inorder to eliminate all forms of harassment
Launched a company-wide working group to enhance employee engagement●Promote human resource management that enables individuals to demonstrate their abilities regardless of nationality, age, gender, sexual orientation, gender identity, or any other attributes or values.
CompanywideーPromote human resource management that enables individuals todemonstrate their abilities regardless of nationality, age, gender, sexual
orientation, gender identity, or any other attributes or values

Planned and hosted Diversity Week—an intensive period of diversity and inclusion (D&I) programs—as part of our ongoinginternal awareness-raising efforts to instill D&I in the organization
In Japan, numerical targets were set, mainly for promoting women’s participation and advancement in the workplace, andefforts are being made to permeate and instill D&I through measures and actions aimed at achieving those targets.
Coordination has also been strengthened at overseas regional organizations, such as by supporting the promotion of D&I
measures tailored to the actual circumstances of the sites in each country (holding Global D&I Meetings on a regular basis)

16

Development of Local Society and Economy - Representative Initiatives

Long-term goals: Contribute to development of local industries and human resources
Medium-term goals: Develop local industries, create jobs, and develop human resources through the Group’s global business operations
Business unit Field

Goals

Progress●Promote sustainable, highly productive and value-added industries, and coexist with local communities through business.
Transportation Leasing& Construction
Systems

Expand efforts for the MIRAI 2030™ SDGs lease and introduce
sustainability-related products

Began handling sustainability-linked leases and loans compliant with the Poseidon Principles

Infrastructure

Promote the overseas industrial park business, continue to attract
companies, create jobs, and achieve regional development

Promoted the overseas industrial park business

Expand the introduction of new service menus, with stores functioning as
local community hubs

Maintained contributions to local communities through participation in those communities and events and handling locallygrown vegetables, as well as tree-planting activities and acceptance of technical trainees from overseas Expanded
introduction of the "Health Community Corner," commonly known as "Kenkomi,"* as a new service based on a theme of foodand health

Overseasindustrial park

Living Related Supermarket& Real Estate* A collaborative service by Summit and Tomod’s designed to provide a “food and health” themed community space that isaccessible to local customers.

© 2022 Sumitomo Corporation

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Development of Local Society and Economy - Representative Initiatives
Business unit Field

Goals

Progress

MineralResources,
Energy,Chemical &Electronics

Upstream ofContribute to development of industries in Madagascar
metal resources

Continued to trade with local suppliers and developed human resources by providing training opportunities

MineralResources,
Energy,Chemical &Electronics

Agricultural
input

Helped improve agricultural productivity through the business of direct sales of agricultural materials providing
farming services and agricultural materials. Promoted business value improvement through geographicalexpansion and functional enhancement.

Improve productivity by making agricultural production more stable and efficient●Create employment and develop management and highly skilled human resources at the Group's business sites.
Transportation Automotive& Construction sales &marketing
Systems
MineralResources,
Energy,Chemical &Electronics

Develop human resources in Iraq and Libya

Electronic parts Provide job training and worker education to employees (factories)

Iraq: 93 graduates of job training. Conducted job training in collaboration with UN’s IOM.
Libya: 48 people completed online training.
Maintained 100% job training rate at Sumitronics

Long-term goals: Develop industrial and social infrastructure
Medium-term goals: Establish industrial and social infrastructure that contributes to the sustainable development of society
Business unit Field

Goals

Progress●Promote infrastructure that enables access to high-quality energy, water, transportation, logistics, communications, and financial services, as well as businesses that enhance urban functions.
Transportation Commercial& Construction aviation
Systems

Build and expand the helicopter leasing portfolio, mainly focused on the helicopters for
emergency medical services and disaster relief missions

SMFL has grown its helicopter leasing portfolio by 40% year-on-year from 2020, mainly focused on thehelicopters for emergency medical services and disaster relief missions

Infrastructure

Generation

Contribute to local community and economic development through the steady execution ofexisting projects

Maintained stable operations at existing power plants currently in operation

Infrastructure

Water/ railroads

Expand high-quality social infrastructure (water, railroads)

Increased treatment capacity by 56%（compared to FY2020) by expanding the water business
Received orders for new rolling stock and railway systems, steadily fulfilled contracts, and worked to resolve
the social issue of traffic congestion by expanding the railroad businessMedia &
DigitalCommunications Develop telecommunications infrastructure in emerging countries and roll out various valueadded services on these platforms© 2022 Sumitomo Corporation

Began developing telecommunications infrastructure in Ethiopia

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Improvement of Living Standard - Representative Initiatives

Long-term goals: Provide advanced lifestyle-related services
Medium-term goals: Deliver advanced lifestyle services that help to solve social issues such as urbanization and aging populations
Business unit Field

Goals

Progress●Provide more advanced services and new functions that improve the standard of living, such as mobility, media and telecommunications, healthcare services, and smart city development, based on new technologies and concepts.
Transportation Mobility& Construction
Systems

Improve convenience for consumers through the mobile shop services business that
capitalizes on mobility and provide mobile shop services to revitalize communities

Began demonstration of the mobile shop services business that capitalizes on mobility

Infrastructure

Smart city

Developing infrastructure that contributes to better lifestyles for people through the smart city
development

The North Hanoi Smart City: Progress being made in land expropriation; drafted a town management businessplan and concept

Infrastructure

Overseas
Provide a variety of welfare services to build local infrastructure for employees working at our Provided a variety of welfare services (sales of daily necessities, sales of medical insurance, provision ofindustrial park industrial parks
healthcare services, etc.) via a digital platform for tenant companies and employees at Thang Long Industrial
Parks in Vietnam

Media &
Digital

5G

Promote businesses aimed at realizing a 5G society and sustainable cities (base station
sharing, local 5G)

Established additional local 5G base stations; conducted a proof of concept with cable TV operators andrailroad operators for the development of use cases

Media &
DigitalCATV

Through JCOM, provide online entertainment and lifestyle services that make life moreconvenient and contribute to a comfortable and exciting life

Provided entertainment and lifestyle services, such as CATV, Internet, fixed phone, electric power,
and mobile phone, to 5.58 million households

Media &
DigitalCATV

Through Telemedicine service through cable television(J:COM), provide services that help
resolve social issues in community healthcare services, aging, and other areas

Launched telemedicine service through cable television(J:COM)Media &
DigitalTV shopping

Through Shop Channel, provide products and services that contribute to comfortable andexciting lifestyles

Providing carefully curated products and services such as fashion items and beauty-related products via Shop
Channel, and launching a live commerce business

Living Related& Real Estate

Health Care

Build a domestic healthcare platform to support Japan’s aging society

Provided sales of pharmaceuticals and daily necessities with the functions of a dispensing pharmacy throughthe Tomod’s model of drugstore with dispensing function (237 stores as of the end of FY2021), and enhanced
the functions of dispensing pharmacies by offering home dispensing and online dispensing services

Living Related& Real Estate

Health Care

Provide optimal medical care in optimal locations and help keep the costs of healthcare down Entered the managed care business in Vietnam
in each country

MineralResources,
Energy,Chemical &Electronics

Agri© 2022 Sumitomo Corporation

Leverage new technologies to optimize agricultural inputs, improve productivity, and further
stabilize incomes for crop producers

Through collaboration with operating companies and new business partners, examined precision agriculture
technologies and services that contribute to improved crop yields, and began demonstration projects

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Quality Education - Representative Initiatives

Long-term goals: Contribute to quality education
Medium-term goals: Provide quality and equal learning opportunities through 100SEED activities
Business unit Field

Goals

Progress

CompanywideーQuantitatively expand the scope of learning opportunities

Through the “Mirai School” career education support program, provided career education to 3,800 students at
24 high schools
Through “Pro Bono Educational Support,” assisted eight non-profit organizations (NPOs) strengthen theirorganizational foundations
Through “Educational Support for a Multi-cultural Symbiotic Society,” provided support to eight NPOs and19
children with foreign roots

Companywideー100% satisfaction of beneficiaries

Achieved nearly 100% satisfaction among beneficiary NPOs and high school students

CompanywideーContinue to have at least 5% of all employees participate annually(Boundary is Sumitomo Corporation, regional organizations and Group companies).

More than ５%of employees participated at the Head Office and regional organizations in Japan and overseas.
100SEED received a special award at the 19th Corporate Philanthropy Award in recognition of company-wide
efforts involving both employees and management© 2022 Sumitomo Corporation

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Environmental Management
Policy and Concept

Sumitomo Corporation Group Environmental Policy

Throughout its 400-year history, Sumitomo Group has

Ⅰ. Basic Policy

pursued industrial development in harmony with local

The Sumitomo Corporation Group recognizes that environmental issues are global in scale and that they are longrange concerns affecting future generations. As a global organization, the Sumitomo Corporation Group, throughsound business activities, will strive to achieve sustainable development aimed at both social and economic progressand environmental preservation.

communities and the natural environment. Based on thisfoundation, Sumitomo Corporation Group pursues businessactivities in such a way as to promote environmental
conservation. Recognizing that various initiatives such as
creating a low-carbon society that alleviates climate change,
preserving biodiversity and the global environment, using
energy, water and resources sustainably, preventing pollution
and controlling waste emissions are the most important andlong-term concerns that all individuals and organizations
must address, we have established our Environmental Policy
as detailed on the right. Sharing this policy, Sumitomo
Corporation Group companies are committed to reducing theenvironmental impacts of their business activities as well as
to improving the environment through their business activities,
based on the ISO 14001 environmental management system.

Ⅱ. Basic Guidelines
In pursuing its diversified business activities both within Japan and overseas, the Sumitomo Corporation Group shallcomply with the following guidelines, and, through cooperation between its Group companies, work to achieve the aimsof its environmental Basic Policy.
1 Basic stance with regard to the environment:
To place great importance on protecting the global environment as a good corporate citizen in accordance with theSumitomo Corporation's Activity Guidelines.
2 Compliance with environmental legislation:
To strictly observe legislation related to environmental matters not only in Japan but also overseas, and to abide by
any agreements made.
3 Caring for the natural environment:
To place great importance on preserving the environment, including the natural ecosystem and biodiversity.
4 Response to climate change:
To place great importance on mitigating climate change and adapting to its impact.
5 Efficient use of resources and energy:
To be mindful of the finite availability of resources and energy and strive to use them both efficiently and effectively.
6 Contributing to the building of a recycling-oriented society:To endeavor to help build a recycling-oriented society by reducing waste and reusing and recycling resources.
7 Promotion of businesses that contribute to environmental preservation:
To utilize our integrated corporate strength to promote businesses and projects, which contribute to environmental
preservation and reduction of the impact of society on the natural environment.
8 Establishment of environmental management:
To use an environmental management system to prevent environmental pollution and set environmental objectives
and targets which are regularly reviewed and continuously upgraded.
9 Disclosure of the environmental policy:
To communicate this Environmental Policy to all people who are working for or on behalf of the Sumitomo
Corporation Group, as well as disclosing it externally.

© 2022 Sumitomo Corporation

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External
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Environmental Management
SystemTarget and Result▌ Environment Management Structure
Sumitomo Corporation Group has established, based on the environmental policy, theenvironmental management structure with the Corporate Sustainability Committee as the centerof the structure. As for the ISO 14001 Environmental Management System (EMS), since Tokyo
and Osaka offices of Sumitomo Corporation acquired the Group's first ISO 14001 certification inJune 1999, the coverage of the system has been extended continuously. About 20,000
employees in domestic locations of Sumitomo Corporation and certain group companies
participate in these environmental management activities. At the ISO 14001 Group Companies
Conference, which consists of Sumitomo Corporation and ISO 14001 integrated certificationgroup companies, we share the environmental activities, and report to Corporate Sustainability
Committee if necessary. Depending on the importance of the subject, Corporate Sustainability
Committee discusses and reports to the Management Council and the Board of Directors.

To achieve carbon neutrality and a circular economy by 2050, Sumitomo Corporation (nonconsolidated in Japan) has set a base year and long-term goals for electricity consumption,water withdrawal and waste emissions on Non-consolidated in Japan and is promoting
environmental improvement activities.
Long-term goals (Non-consolidated in Japan)
Electricity
Consumption

To reduce electricity consumption per square meter by an average of at least 1%
annually and at least 20% until FY2035 both from base year of FY2013.

Water Withdrawal

To reduce water consumption per employee by an average of at least 1% annuallyfrom base year of FY2010.

Waste Emissions

To reduce waste emissions per employee by an average of at least 1% annuallyfrom base year of FY2010.

The targets converted from long-term goals, results of FY2021, targets of FY2022 are as follows.
Index║ ISO14001 Environmental Management System
Management Council

Electricity
Consumption

Corporate Sustainability Committee(Chairman: )ISO14001 Group Companies
Conference(Secretariat: Corporate Sustainability Dept.)

Environment Management
Representative
Sumitomo Corporation

ISO14001 Integrated Certification Group Companies

EMS Officers(GM of Corporate Sustainability Dept.)EMS Officers

EMS Promoters

EMS Promoters

Eco Leaders

Eco Leaders

All employees working each office© 2022 Sumitomo Corporation

ISO14001 Integrated Certification Group Companies(Sumitomo Corporation and 25 Group companies as of April 2022)

Water
Withdrawal

Waste Emissions

Results of theBase year

Targets of
FY2021Results of
FY2021

Targets of
FY2022

Consumption
(MWh)

7,859

5,553

3,368

5,486

Intensity(MWh/m2)

0.10790.09960.06050.0986

Withdrawal(m3)

32,191

20,1906,711

20,393

Intensity(m3/employee)

6.93

6.20

2.02

6.14

Emissions
(t)

508

319

46

322

Intensity(t/employee)

0.109

0.098

0.014

0.097

The figures in the table below are calculated from the fuel, heat and electricity consumption dataon non-consolidated in Japan with appropriate GHG emission factors, and the GHG emissionsof FY2013 (the base year) are calculated as 5,626t-CO2e and targets and results for FY2021
and FY2022 are as follows.
Index
GHG Emissions（Scope1/2）

Total(t-CO2e)Results of theBase year

5,626

Targets of
FY2021

3,514

Results of
FY2021

1,793

Targets of
FY2022

2,208
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Environmental Management
Targets
Sumitomo Corporation Group promotes activities that are beneficial to the environmental improvement and reduce environmental negative impact. Further, as the whole Sumitomo Corporation
Group, we follow to a policy related to climate change that stated in Medium-Term Management Plan “SHIFT 2023”, in which we aim to achieve carbon neutrality in 2050. At Sumitomo Corporation,
Eco Leader identifies the environmental aspects of each department and evaluates their impacts, and defines risks and opportunities considering relevant compliance obligations. Based on the
results, EMS Promoters specify significant environmental aspects, risks and opportunities for each Business Unit and the Corporate Sustainability Department reviews them for the entire company.
At the Corporate Sustainability Committee, we review the achievement of the environmental targets and decide new objectives for the following year.
Environmental Objectives

FY2021 Major Environmental Achievements

Comply withenvironmental laws andregulations• Implement continuing education program on the
Waste Disposal and Public Cleansing Act and otherenvironment-related laws/regulations• Held trainings featuring outside instructors by Corporate Sustainability Department• Conducted education of legal compliance in e-learning environmental course

Pursue environmentallysound projects• Expand renewable energy businesses• Promoted renewable energy businesses both in Japan and abroad: participated in an offshore wind
power generation project in Europe, implemented the solar power project in Australia and in Minamisoma
City in Fukushima Prefecture, Japan, in Thang Long Industrial Park II, Vietnam, geothermal power plantin Indonesia and New Zealand, use of renewable energy fund, etc• Promote businesses that help create a recyclingoriented society• Promote other businesses to reduce environmental
burdenManage and reduce
environmental burden• Measure and reduce electricity consumption/gas
consumption/water withdrawal and waste generation
at all sites in Japan• Measure and reduce the environmental
burden/impact of business activities• Assess environmental impact in relevant supply
chains and work to reduce such impact

Promote environmental
education andcommunication related toenvironmental issues• Hold events, including awareness-raising seminars
related to environmental conservation• Promote effective use of environmental management
systems• Expand disclosure of non-financial information© 2022 Sumitomo Corporation• Promoted businesses to create a recycling-oriented society, to reduce environmental burden:
Sustainable forest management, verification of a large-scale power storage system utilizing reused EV
batteries in Satsumasendai City in Kagoshima Prefecture, initiatives to expand the introduction of electricbuses, promotion of hydrogen-related businesses including efforts for Japan-Australia Hydrogen Supply
Chain Development, Sales of lithium carbonate produced in the U.S, etc•

Electricity consumption/gas consumption/water withdrawal and waste generation decreased in FY2020
due to COVID-19 lockdown or working from home.
In FY2021, office work increased and those environmental burdens increased compared to theprevious year.
• Measured consolidated environmental data

• Conducted environment assessments on mine development and mining operation businesses abroadand on domestic construction and real estate businesses, as well as Environmental Management• Continued to hold trainings on environment-related laws/ordinances• Held seminar on climate change measures• Conducted e-learning environmental course which was completed by 100% of new employees• Publication of ESG Communication Book 2021
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External
Recognition

Environmental Management
Activities▌ Internal Environmental Audit▌ Environmental Educational Activities

Sumitomo Corporation conducts internal environmental audits on an annual basis to ensure theenvironmental management system of Sumitomo Corporation and group companies with
ISO14001 integrated certification are properly functioning.

Sumitomo Corporation Group develops a variety of educational programs to help its employees
engage in environmental conservation. We raise environmental awareness among all Group
employees by organizing such programs as trainings on environmental laws and regulations aswell as global environmental issues given by outside experts.

〈Audit Priority Items〉(1) proper establishment of environmental targets,(2) management of progress in implementing the environmental action plan,(3) evaluation of compliance with legal requirements and(4) implementation and enhancement of environmental training.
As a result of the audits in 2021, serious nonconformity was not found.

▌ External Audit
In February 2022, the third-party audits wereconducted by an independent auditingorganization, Japan Quality Assurance
Organization, for the renewal of the current
ISO 14001 certification status. We received
approval as a result of the audits.
ISO14001 Management System Certificate© 2022 Sumitomo Corporation

Theme

Summary

Number of
Activities

Training on the
ISO 14001
Environmental
Management System(release of video)

The management principles, environmental
contribution activities and the processes of anenvironmental management system in accordancewith the ISO 14001 international standard.

All year roundTraining for internal
environmental
auditsThe basics and processes of internal environmental
audits, through exercises, to be able to conduct
audits effectively.

Twice a year

Trainings on industrial
waste disposal

Practical knowledge, including responsibilities ofindustrial waste generators, contract criteria andproper disposal methods.

Twice a year

Trainings onenvironmental laws andregulations

The latest trends in environmental laws andregulations, basic knowledge on these, and points tonote to comply with the laws and regulations.

Twice a year

Basic environmental
education（e-learning）

Sumitomo Corporation Group’s environmental policy
and its environmental management system.

once a year

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Recognition

Our Climate Change Initiatives: Disclosure Based on TCFD
The issue of climate change is an important issue that must be overcome to bring about a sustainable society. Global efforts towards the faster realization of a carbon neutral
society are accelerating. We value the global consensus of the Paris Agreement, and in order to play a more active role in achieving the carbon neutralization goals of society set
forth in the agreement, we reviewed our “Policies on Climate Change Issues” in May 2021. We have set medium-term goals that show a clearer action plan for “Climate Change
Mitigation” and its long-term goals, one of our six important social issues. (For medium-term goals, please refer to P.8 and P.43) Subsequently, in February 2022, we reviewed
our "Policies on Climate Change Issues" again, and we now state that we will not be involved in any new coal-fired power generation business neither IPP (Independent Power
Producer) nor EPC (Engineering, Procurement, Construction).
Policies on Climate Change Issues
Basic Policy Aim to make the Sumitomo Corporation Group carbon neutral in 2050*1.
Develop technologies and business models for creating a sustainable energy cycle by reducing CO2 emissions and achieving negative emissions*2 for society as awhole.
 In addition to reducing and absorbing CO2 emissions from our business, we will contribute to the carbon neutralization of society through cooperative initiatives andrecommendations made with business partners and public institutions.
Policy on Business Activities
 Promote renewable energy, efficient energy utilization and fuel conversion that contributes to reducing CO2 emissions throughout society. We will also work to offer
new energy management and mobility services utilizing renewable energy and also to materialize hydrogen technologies and applications.
 In the power generation business, we provide a stable supply of the energy, essential for the economic and industrial development of local communities. At the sametime, we continuously shift management resources to renewables and other energy sources with low environmental burden in the power generation portfolio. (in 2035:
20% for coal-fired, 50% for gas-fired, and 30% for renewables in terms of net ownership generation capacity*3)
 Regarding the development of thermal power generation and fossil energy concession, we will work on the premise of carbon neutralization in 2050.
We will not be involved in any new coal-fired power generation business neither IPP (Independent Power Producer) nor EPC (Engineering, Procurement, Construction).
For IPP business, we aim to reduce CO2 emissions by 60% or more by 2035 (compared to 2019) and we will end all the coal-fired power generation business in thelate 2040s.
We will not make any further investment in the thermal coal mining interest and aim to achieve zero production from thermal coal mines by 2030.
*1 The scope of business targeted for carbon neutralization is as follows[Scope1・2] Direct CO2 emissions from Sumitomo Corporation and its subsidiaries, as well as indirect CO2 emissions from the generation of energy used by eachcompany (however, for power generation businesses, emissions from those affiliated companies under the equity method are also included)[Scope3] Indirect CO2 emissions associated with the use of energy resources produced by fossil energy concession of Sumitomo Corporation Group, its subsidiaries,
and affiliated companies under the equity method.
Carbon neutrality means net-zero CO2 emissions that combine CO2 emissions from our business and our contributions to CO2 emission reduction.
*2 Negative emission refers to the absorption, capturing, and removal of CO2 emitted in the past and accumulated in the atmosphere.
*3 As of 2020：coal 50%, gas 30%, renewables 20%© 2022 Sumitomo Corporation

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Our Climate Change Initiatives: Disclosure Based on TCFD
▌ Governance（Structure for Responding to Climate Change Issues）
 With regard to the various opportunities and risks related to climate change issues involved in
the Group's diverse business activities, the Board of Directors receives periodic reports on
strategies in the Group's diverse activities each business field, their progress, and the status ofrisks affecting the company's entire business portfolio, and monitors whether appropriate
management is being carried out. In addition, the Board of Directors adopts resolutions
establishing policies on the Group's responses to climate change problems and discusses theBoard of Directors
Decision making, supervision

handling of important issues related to policies on responses to climate change issues.
 For example, our Management Council repeatedly discussed the path for achieving the Group‘slong-term goal of “Aim for carbon neutrality by 2050 and challenge to realize sustainable energy
cycle,” the policies of our power generation and energy-related businesses, and the initiatives
necessary to realize a carbon neutral society. Based on these discussions, the Board of
Directors adopted a resolution to establish medium-term goals for "Climate change mitigation"and to review the "Policies on Climate Change Issues.” The Group holds biannual strategic

Management Council
Decisions on formulation andimplementation of strategies• Continuous monitoring• Strategic business promotion• Companywide risk management

Corporate Strategy
Promotion Committee
Corporate Sustainability
Committee

conferences with the participation of Management Council members to discuss strategies ineach business field including measures for addressing social problems such as climate change
under the Medium-term Management Plan.
 In addition to the measures taken by individual business units with regard to the opportunities
and risks presented by climate change issues, the Corporate Sustainability Department, a
dedicated organization for dealing with social problems, the Corporate Planning & Coordination
Department, which creates the company's overall management plans and formulates key

Corporate Planning &Coordination Department

Corporate Sustainability
Department

Information collection, analysis of
circumstances, reporting

Risk Management
Organizations

Overseas Sites

initiatives, and the risk management organizations work together, formulating company-wide
policies and promoting necessary initiatives. Based on information provided by investigative
organizations and sales organizations within the Group, overseas sites, and other parties, they
deliberate on company-wide measures.
 The Corporate Sustainability Committee (chairperson: Chief Strategy Officer, secretariat:
Corporate Sustainability Department) follows global climate change mitigation trends and the
Corporate Strategy Promotion Committee(chairperson: Chief Strategy Officer, secretariat:

Corporate Planning & Coordination Department) deliberates on strategies and risk management

Sumitomo Corporation
Group Business Portfolio
Business Units and Initiative
Pursuit ofOpportunities

Responses to
Risks

Circumstances Concerning
Climate Change Technological Innovation
 Regulations, carbon pricing
 Mitigation of global climatechange Abnormal weather, natural
disasters

measures related to climate change. The two committees provide reports and refers issues tothe Management Council, which makes critical decisions regarding climate change-related
measures.
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Recognition

Our Climate Change Initiatives: Disclosure Based on TCFD
▌ Strategy: Climate Change-Related Risks and Opportunities
Steady Advancement of the Business Portfolio SHIFT
To overcome the issue of climate change, it is necessary to bring about a carbon
neutral cycle by shifting to decarbonization technology and renewable energy acrossthe industry and utilizing emitted CO2.We will respond to the risks posed by changes
in various technologies and business models due to decarbonization as we globallydevelop businesses in a wide range of industries. At the same time, we will steadily
advance the Business Portfolio SHIFT by meeting the new social needs that arise in
response to these changes and cultivating diverse business opportunities.
Vision for our Business Portfolio SHIFTIn April 2021, we established a new business organization, the Energy Innovation
Initiative (EII),to create next generation businesses that will contribute to the realizationof a carbon neutral society, and we are steadily advancing our initiatives to create thenext generation businesses that will contribute to the realization of a carbon neutral

society, and we are steadily advancing our initiatives to create next generation
businesses while recognizing the changes in social structure brought by the energy
transition in global society as a business opportunity. Specifically, these efforts arebeing carried out in the three focused areas of “developing carbon-free energy” (suchas hydrogen and next generation bio-energy), “expanding power & energy services”(such as large-scale storage batteries and distributed power resources), and “CO2
capture, storage and utilization.” In addition, our existing business units are also making
efforts to realize a carbon neutral society, and we will strengthen our crossorganizational efforts with EII, to expand synergies in the future. The Group will not only
steadily implement the various measures set forth in the Medium-Term Management
Plan “SHIFT 2023” to ensure Business Portfolio SHIFT, but also form a strong portfolio
to solve social issues from a long-term and medium-term perspective, thereby creating
new value.
the business activities

Enhancement of sustainability management

Steadily implementing the medium-term goals at all thebusiness units.
Utilizing supporting measures such as internal carbon pricing.

Thermal power
generation
business(

Carbon neutralizationof our businessOur group’s Value Creation Model: Integrated Report P.13)

bubble ：image of business scale which ourgroup expand

・Our initiatives and milestone of
CO2 reduction

Fossilfuel
upstreambusiness

Renewable energy
Next-generationenergy Development of carbon-free energy
 Expansion of power & energy services

Contribute to realization ofa carbon neutral society
・Creating next-generation
business centered on EII© 2022 Sumitomo Corporation

dotted ：social, environmental, and economic
circlevalue which our group create throughImage of 2050

Current image

CO2
capture,storage,andutilization

EII’s threefocused areas
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Recognition

Our Climate Change Initiatives: Disclosure Based on TCFD
▌ Strategy: Climate Change-Related Risks and Opportunities
Contribute to Realization of a Carbon Neutral Society (Creation of Next Generation Businesses Centered Around the EII)
We are promoting business development in the EII’s three focused areas and cross-organizational efforts with existing business units to build decarbonized, recycling energy
businesses. We are globally advancing various stages of business development to create next generation businesses that contribute to the realization of a carbon neutral society.

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External
Recognition

Our Climate Change Initiatives: Disclosure Based on TCFD
▌ Strategy: Transition Risks and Opportunities Related to Climate Change With regard to the problem of climate change, various regulations may be introduced in the future to encourage carbon emissions reductions and decarbonization, in the longterm, advances in international deliberations, revisions to the greenhouse gas reduction plans of individual countries, and changes in the technologies and markets of diverse
industrial fields may bring about various changes in our Group's business environment.
 We are analyzing the impact on businesses including power generation/energy and resource-related businesses, automobiles, aircraft, shipping business, steel, chemicals,
cement, aluminum smelting, and real estate, which are presumed to be fields that face a relatively high risk of change in the business environment. These include changes intechnology related to climate change mitigation and the introduction of regulations. It is assumed that there are risks that affect business activities in these fields. By recognizing
the magnitude of the risks through regular scenario analysis and considering appropriate countermeasures, we are working to keep the negative impact on businessperformance to a minimum. We are also strengthening initiatives that contribute to the development of business opportunities, such as the construction of carbon-free andrecyclable energy systems.
Scenario Analysis
 We see climate change as a major issues faced by the entire world, and we identify businesses on which climate change will have a significant impact and perform scenario
analysis based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
Climate scenario selection
 In the event of significant changes to the business environment, from the perspective of objectively evaluating new business opportunities and business resilience, we are
analyzing the impact on business by 2050 using the below scenarios. In doing so, we primarily reference the IEA’s (International Energy Agency) World Energy Outlook 2021,
and Energy Technology Perspective 2020, Net Zero by 2050 Roadmap for the Global Energy Sector. These scenarios are referenced as examples of possible changes in thebusiness environment of each sector for long-term trends in global climate change mitigation, and do not necessarily represent assumptions for our management policies orbusiness strategies.

Approx.
2.1℃

APS (Announced Pledges Scenario):

A scenario, in which all pledges on climate change by national governments, including Nationally Determined Contribution (NDC) and long-term net-zero targets, areassumed to be met within the given time frame*Less than 2.1°C increase by 2100 (50% probability)

SDS (Sustainable Development Scenario):

Towards the achievement of the goals of the Paris Agreement and the SDGs, a sustainable growth scenario that achieves carbon neutrality by 2070
*Less than 1.65℃ increase by 2100 (50% probability)

Referenced
scenarios

Approx.
1.5℃

NZE (Net Zero Emission Scenario):

A scenario that backcasts global accomplishment of net zero by 2050
*1.5℃ increase by 2100 (50% probability)*Although World Energy Outlook 2021 by IEA was published in October 2021, the analysis and responses are based on risks and opportunities due to changes in theexternal environment that occurred after the publication.
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External
Recognition

Our Climate Change Initiatives: Disclosure Based on TCFD
▌ Identifying the Businesses for Which to Perform Scenario Analysis
 Our scenario analysis scope encompasses all of our business sectors which will be highly affected by business environment changes related to climate change mitigation, regardless of the scale of thebusiness.
 This fiscal year, we have conducted scenario analysis for businesses in energy, resources, transportation, materials industry, and real estate after referencing and confirming developments in Climaterelated Disclosure Standards*1 by the International Sustainability Standards Board (ISSB), trends in technological changes, and the introduction of regulations.
*1 We referred to the draft released on March 31, 2022 (including Climate-related Disclosures). We will continue to monitor the developments of the standards closely.

Scenario analysis scopeBusiness sectors selected for scenario analysis
Energy: Thermal power generation (coal and gas), Renewable energy power
Resources: Thermal coal and coking coal, Natural gas and LNG, Metals and rare
metals (nickel, copper, and iron ore)
Transportation: Vehicles (automobile parts manufacturing & sales/finished vehicles
sales business), Shipping (shipbuilding business/ship trading business/ship owningbusiness), Aviation (lease business/parts manufacturing)

Business scale

generation, Next generation energy (hydrogen, ammonia, synthetic methane)

Material industry sector: Steel (steel products & tubular products manufacturing &sales business), Cement (distribution business), Chemicals (manufacturing/tradebusiness), Aluminum (smelting business)
Real estate sector: Office buildings/residential building sales business

Impact of change in business environment related toclimate change mitigation▌ Results of Scenario Analysis
 For the trends in supply and demand changes related to the sectors identified for scenario analysis, energy, resources, transportation, materials industry, and real estate, the future market trends for eachsector listed in the main scenarios presented by the IEA are evaluated on five levels for 2030 and 2050: “sharp increase to increase”, “increase to moderate increase”, “neutral”, “moderate decrease to
decrease” and “decrease to sharp decrease”. The forecasts for demand trends and the business environment shown by these scenarios include many potential risks and uncertainties.
 Our business environment, policies and initiatives related to each sector describe the policies and initiatives that consider the factors and certainty of various changes in the business environment shownin these scenarios and the circumstances unique to our business. Furthermore, with regard to the development of thermal power generation and fossil energy concession businesses, we are working on
the premise of achieving carbon neutrality in 2050, and financial information including exposure*2 is provided for thermal power generation (coal and gas), thermal coal and coking coal, and natural gas
and LNG, which include these businesses.
[[Indication of referenced scenarios(macro environment)]

Common to all scenarios
APS
SDS
NZE

[Trend of supply and demandchanges in the referenced
scenarios (macro environment)]：Significant increase toincrease：Slightly decrease
to decrease：Increase to
Slightly increase：Neutral：Decrease to
Significant increase*2 Consolidated total assets and guarantee for investments accounted for using equity method© 2022 Sumitomo Corporation

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Environment

FeatureSocialESG
Quantitative Data

Governance

Our Climate Change Initiatives: Disclosure Based on TCFD
▌ Results of Scenario Analysis (Summary) The results of the APS, SDS, and NZE scenario analysis show that in 2030 and 2050, in each scenario, we are taking specific measures
to address business risks and opportunities upon examination of our policies on countermeasures. Below is a summary of our business

External
Recognition

Trends of Supply and Demand Changes in Referenced Scenario(Macro Environment)：Significant increase toincrease：Slightly decrease
to decrease：Increase to
Slightly increase：Decreaseto Significant increase：Neutralenvironment, policies, and initiatives in relation to the trends of supply and demand changes under the referenced scenarios(macro
environment).
SectorTrends of Supply and Demand Changes inReferenced Scenario (Macro Environment)
Business

2030

Thermal power generation (coal and gas)
EnergyRenewable energy power generation
Next generation energy (hydrogen,ammonia, synthetic methane)
Thermal coal and coking coal

Resources

Natural gas and LNG
Metals and rare metals (nickel, copper, andiron ore)
Vehicles (automobile parts manufacturing &sales/finished vehicles sales business)

Shipping (Shipbuilding business/ship trading
Transportation business/ship owning business)
Aviation (lease business/parts
manufacturing)
Steel (steel products &Steel sheets
tubular products
manufacturing &sales
Material

business)

Tubular products

industry sector Cement (distribution business),
Chemicals (manufacturing/trade business)
Aluminum (smelting and refining business)
Real estate
sectorOffice buildings / residential building sales
business© 2022 Sumitomo Corporation

2050

Our business environment,
policies and initiatives
2030

2050

The business environment for our business is positioned as neutral or increase for about 90% of the entire business inthe year 2050 under NZE/SDS/APS. In addition, we recognize that future supply and demand forecasts for the markets
related to our businesses are generally stable or growing. Based on this, we have confirmed that we are steadily
advancing our Portfolio SHIFT by identifying and responding to our business risks and opportunities. Below are themain policies and initiatives of our business with “sharp increase to increase” and “decrease to sharp decrease” insupply and demand change trends for the referenced scenarios (see the next page onward for details).
[Trends in Supply and Demand Changes in Reference Scenario: Businesses Indicated as "decrease to sharp
decrease"]- Thermal power generation (coal and gas): We have indicated in our climate change policy that we will withdraw fromcoal-fired power generation and shift the allocation of management resources to power generation projects with lower
environmental impact. Most of the existing thermal power generation businesses are based on long-term contracts withgovernments of host countries, thus the risk of a significant deterioration in the commercial viability of individual
projects is not considered low, but we will continue to monitor changes in the business environment.
- Thermal coal and coking coal: The weight of thermal coal concession in our resource portfolio is relatively small, andwe will maintain a reasonable level of competitiveness, while the thermal coal mine will reach the end of its mine life in
the near future. As part of our climate change policy, we aim to achieve zero equity production from thermal coal minesby 2030.
[Trends in Supply and Demand Changes in Reference Scenario: Businesses Indicated as "sharp increase to increase"]- Renewable energy power generation: We have set goals to have the scale of our renewable energy provided at over3GW by 2030 and the net ownership generation capacity ratio to move from 20% to 30% for renewable energy by 2035.
- Next generation energy: We promote the expansion of businesses related to carbon-free energy such as hydrogenand ammonia, for which demand is expected to grow in the future.
- Shipping/Aviation: We promote the development and introduction of ships and aircraft aimed at improving fuelefficiency and utilizing decarbonized and low-carbon fuels.
In addition, we are not only promoting existing businesses but also working to create new businesses in the businesses
indicated as “neutral”, “increase to moderate increase”, or “moderate decrease to decrease". Regarding the thermal
coal and coking coal business, tubular products business, and real estate business, all of which have differing trends insupply and demand changes for each scenario around 2030 in the transition toward 2050, we will continue to closely
monitor market trends and other factors while steadily advancing the Portfolio SHIFT.

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[Display of referenced scenarios(macro environment)]

 Energy sector: Thermal power generation (Coal and gas)
Referenced scenarios (Macro environment: changes in thermal power
generation output)
2020

2030

Com
Coal-fired power generation will gradually be phased out in developed countries
mon
APS

Coal-fired power generation will
decline by approx. 16%

and by approx. 70% by 2050

SDS

Coal-fired power generation will
decline by approx. 41%

to almost zero by 2050

NZE

Coal-fired power generation will
decline by approx. 70%

to zero by 2040

Gas-fired power generation
Demand for gas-fired power
Com generation is maintained as a
mon substitute for coal-fired power
generation

Significant differences arise
between scenarios

APS

Gas-fired power generation
increases by approx. 4%

and decreases by approx. 10% by 2050

SDS

Gas-fired power generation
remains roughly the samedeclining by approx. 68% by 2050

NZE

Gas-fired power generation
remains roughly the samedeclining by approx. 96% by 2050

APS
SDS

：Significant increase toincrease：Slightly decrease
to decrease：Increase to
Slightly increase：Decreaseto Significant increase：Neutral

NZE

Our business environment, policies and initiatives
2050

Coal-fired power generation

External
Recognition

Trends of Supply and Demand Changes in Referenced Scenario(Macro Environment)

Common▌ Strategy: Transition Risks and Opportunities Related to Climate Change〈Scenario Analysis〉

ESG
Quantitative Data

Governance

We will shift our allocation of management resources from coal-fired power to power businesses with low
environmental impact, such as renewable energy, and we will not be involved in any new coal-fired power
generation business neither IPP(Independent Power Producer) nor EPC (Engineering, Procurement,
Construction). Furthermore, we plan to complete all of our contracts and end all the coal-fired power generation
business in the late 2040s. *1 Most of our existing thermal power generation businesses are based on long-term
contracts with national power companies in host countries including developing nations where power demand
continues to increase. Provisions are included in power sales contracts that hedge against risk of economic
losses not attributable to us. We have also obtained guarantees from the host countries regarding theperformances of these contracts, and we are covered by NEXI foreign investment insurance as necessary. Thus,
we consider that the risks for the significant deterioration of the commercial viability of individual projects to be low.
Regarding coal-fired power generation, there is a gradual decline starting in developed countries, as shown in thereferenced scenarios (macro environment) on the left, and in either scenario, there is a significant decline by 2050
or 2040. As mentioned above, our coal-fired power generation business is based on long-term contracts withnational power companies in host countries. Although it is currently unforeseeable, considering a possibility thatsignificant impacts and incidents could occur to the continuation of the business in the future due toenvironmental changes toward decarbonization, we regularly monitor the exposure status throughout thecompany, the outstanding balance of investments, loans, and guarantees for each business, the status ofbusiness operations, and various aspects of the environment surrounding coal-fired power generation business at
a management level.
While contemplating the development of local communities and economies and our obligation to supply electric
power as stabilized power supply, we will pursue various options, without eliminating the possibility of accelerated
withdrawal from the business to realize decarbonization of our company and society as a whole, pursuing thedecarbonization and low-carbonization of existing facilities and providing maximum support for host countries toshift power sources to renewable energy and other sources.
≪Reference values≫
Coal-fired power generation business

As of Mar. 31,
2022

Estimate for 2035

Latter half of the
2040s

Outstanding investments, loans andguarantees *2

290 billion yen

150 billion yen

Zero

Net ownership generation capacity

5.2GW

About 2GW

Zero

*1 Regarding coal-fired power generation, we aim to reduce CO2 emissions by 60% or more by 2035 (compared to 2019) and will end all the coal-fired power generation business in the late 2040s.
*2 Includes all outstanding balances of investments, loans, and guarantees (assumed amount at the peak for a project before completion) for all coal-fired power generation projects, regardless of investment
scheme or contract type. Calculations are based on the exchange rate at the end of March 2022 <YEN/US$>; 122.39 yen.

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Social[Display of referenced scenarios(macro environment)]

 Energy sector: Renewable energy power generation
Referenced scenarios (Macro environment: changes in renewable energy
power generation output)
2020

2030

External
Recognition

Trends of Supply and Demand Changes in Referenced Scenario(Macro Environment)

Common▌ Strategy: Transition Risks and Opportunities Related to Climate Change〈Scenario Analysis〉

ESG
Quantitative Data

Governance

APS
SDS
NZE

：Significant increase toincrease：Slightly decrease
to decrease：Increase to
Slightly increase：Decreaseto Significant increase：NeutralOur business environment, policies and initiatives
2050

To overcome the issue of climate change and bring about a carbon neutral society,
the Sumitomo Corporation Group is engaged in various renewable energy

Com
mon
APS

SDS

NZE

Increasing global trend toward carbon neutrality accelerates the use of renewable energy as a main
source of power in many countries
Power generation from renewableenergy sources increases by approx.
110%
Power generation from renewableenergy sources increases by approx.
140%
Power generation from renewableenergy sources increases by approx.
200%

Approx. 5-fold by 2050. As a result, the ratio ofrenewable energy sources in power generation
reaches approx. 70%

businesses such as wind, solar, geothermal, hydroelectric, and biomass. While
providing the stable supply of energy essential for the development of economies
and industries in local societies, we are putting forward a policy of continuing to shift
managerial resources to a power generation portfolio with low environmental impact.
We have set goals to have the scale of our renewable energy provided at over 3GW

Approx. 6-fold by 2050

and shift the power generation capacity ratio from 50% to 20% for coal, 30% to 50%
for gas, 20% to 30% for renewable energy.

Approx. 8-fold by 2050. As a result, the ratio ofrenewable energy sources in power generation
reaches approx. 90%

 Energy sector: Next generation energy (hydrogen, ammonia, synthetic methane)
Referenced scenarios (Macro environment: changes in hydrogen production
and Ammonia supply)
2020

2030

Our business environment, policies and initiatives
2050
We launched Energy Innovation Initiative (EII) in April 2021 to promote the

Com
mon

Hydrogen is positioned as a top environmental policy mainly in developed countries

APS

Hydrogen production increases to
2.5 EJ* (ammonia supply is zero)

Hydrogen production increases to 22.7 EJ* and ammonia
supply increases to 0.5 EJ by 2050

SDS

Hydrogen production increases to
4.0 EJ (ammonia supply is zero)

Hydrogen production increases to 34.6 EJ, andammonia supply increases to 3.2 EJ by 2050

NZE

Hydrogen production increases to21.4 EJ, ammonia supply increases
to 1.0 EJ

Hydrogen production increases to 69.7 EJ,
ammonia supply increases to 1.6 EJ by 2050

expansion of businesses related to hydrogen, ammonia, and other carbon-freeenergies. Through this initiative, we will contribute to the stable supply of hydrogen,ammonia, and other next-generation energies for which demand is expected toincrease in the future, thereby expanding our earnings while contributing to therealization of a decarbonized society.

* 1EJ (=1,018J) is equivalent to the heat value of approximately 25.8 million kL of crude oil (EJ: exajoules)© 2022 Sumitomo Corporation

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Sustainability of
Sumitomo
Corporation group

FeatureEnvironment
Environment

Our Climate Change Initiatives: Disclosure Based on TCFD

SocialGovernance[Display of referenced scenarios(macro environment)]

Common▌ Strategy: Transition Risks and Opportunities Related to Climate Change〈Scenario Analysis〉
 Resources sector: Thermal coal and coking coal
Referenced scenarios (Macro environment: changes in coal demand)
2020

2030

APS
SDS
NZE

ESG
Quantitative Data

External
Recognition

Trends of Supply and Demand Changes in Referenced Scenario(Macro Environment)：Significant increase toincrease：Slightly decrease
to decrease：Increase to
Slightly increase：Decreaseto Significant increase：NeutralOur business environment, policies and initiatives
2050

We will not acquire new interests in the thermal coal mine development, and we plan to aim forzero equity production volume from thermal coal mines by 2030. The weight of thermal coal

APS

SDS

NZE

interests in our resource portfolio is relatively small. Going forward, mines of currently owned

Coal demand declines by less than
10% (more than 80% is demand
from countries without zeropledges* that aim solely at emission
reductions after 2030)

interests are scheduled to reach the end of their mine life in the near future. Also, theCoal demand declines rapidly after 2030, especially in
China, and will decline by approx. 50% by 2050

concession produces high-grade coal, which is in relatively high demand, and is costcompetitive, making it resistant to price declines even when there is a drop in demand.
Regarding coking coal, with the shift to electric furnaces that use scrap and the practical

Coal demand decreases by approx. 30%

and by approx. 80% by 2050

Approx. 55% decline in coaldemand (65% in power sector and
20% in industrial sector) due toaccelerated cessation of power
plant licensing.

By 2050, new coal mine construction and expansionof existing mines are no longer needed, and demanddecreases by more than 90% (80% of coal used isequipped with CCUS) due to the spread ofsteelmaking by hydrogen reduction and the shift toelectric furnaces

application of iron-making process with low CO2 emissions, it is forecast that demand forcoking coal will decrease in the long term. However, it is predicted that steel businesses thatuse blast furnaces with CCUS technology installed will be preserved for the time being. In
addition, we believe that a certain level of demand will be maintained for the interests we holdas they produce hard coking coal, which is considered rare among coking coals.

As of March 31, 2022 Thermal / coking coal Exposure: 80 billion yen*Countries without net zero targets

 Resources sector: Natural gas and LNG
Referenced scenarios (Macro environment: changes in natural gas demand)
2020

2030

Our business environment, policies and initiatives
2050

In the transition phase to a low-carbon society, gas will be used as a replacement power fuelfor coal. It will continue to play an important role as chemical raw material and fuel for

Com
mon
APS
SDS

NZE

Natural gas demand increases in all scenarios for the next five years, but then diverges among
scenarios and is not consistent across countries/regions
Natural gas demand increases approx.
6%
Natural gas demand remains stablethrough 2030
Natural gas demand declines byapprox. 5%

Natural gas demand peaks in the 2030s and thendeclines to approx. 4% in 2050
then declines by approx. 40% by 2050
Natural gas demand decreases by approx. 55% by
2050 as new gas fields no longer need to be developed
due to the increase in low-carbon fuels (about 70% of
the natural gas used is equipped with CCUS)

transportation. In particular, it is anticipated that LNG demand will increase focused on China,
India (which does not have a pipeline for import), and the ASEAN nations. It is expected thatbusiness opportunities will increase in the Asian Pacific (including India). Going forward, we will
focus on strategic regions in the medium-to-long term perspective, and we will work to create anatural gas and LNG value chain. Furthermore, we will contribute to the stable supply ofenergy to the appropriate regions while securing the demand of Transition Fuel as a necessaryenergy source by introducing environmental technologies such as CCS/CCUS and bypromoting the best mix of renewable energy sources in response to changes in the external
environment and the transition to a decarbonized society.

As of March 31, 2022 Crude oil, gas, LNG Exposure: 70 billion yen© 2022 Sumitomo Corporation

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Sustainability of
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Corporation group

FeatureEnvironment
Environment

Our Climate Change Initiatives: Disclosure Based on TCFD

SocialGovernance[Display of referenced scenarios(macro environment)]

APS
SDS
NZE

 Resources sector: Metals and rare metals (nickel, copper, and iron ore)
Referenced scenarios (Macro environment: Changes in nickel and copper demand and Steelproduction)
2020

2030

2050

External
Recognition

Trends of Supply and Demand Changes in Referenced Scenario(Macro Environment)

Common▌ Strategy: Transition Risks and Opportunities Related to Climate Change〈Scenario Analysis〉

ESG
Quantitative Data

：Significant increase toincrease：Slightly decrease
to decrease：Increase to
Slightly increase：Decreaseto Significant increase：NeutralOur business environment, policies and initiatives

Regarding nickel, to respond to growing global demand, we are proceeding withprojects as a producer in the Republic of Madagascar. We sell the products to Japan,

SDS

Nickel demand increases approx.
100%, copper demand increases
approx. 30%, steel production
increases approx. 2% from the2019 level

By 2040, nickel
demand increases
approx. 180% andcopper demand
increases approx.
45%
Steel production to increase by approx. 7% by 2050

NZE

Demand for electric vehicles and storage batteries increase more than 50-fold, accompanied bya sharp increase in demand for nickel and other key minerals. In addition, demand for copper for
power lines doubles due to the expansion of power networks. Steel production to increase byapprox. 12% from 2020 (approx. 9% increase through 2030)© 2022 Sumitomo Corporation

Europe, North America, and Asia, and we are aiming to create further business
opportunities.
Regarding copper, through investing in copper mines overseas, we are involved incopper refining and the sale and production of copper bullion which are the upstreamof the copper production value chain.
Regarding iron ore, through our projects in South African and Brazilian mines, we
contribute to stable supply of commodities to Asia with a focus on China and Japan.
We will continue to secure sources for stable supply while paying close attention to
the impact on demand due to changes in the iron-making and steel-making
processes in response to decarbonization in the steel industry, and also to theimpact of an increase in the ratio of electric furnace steel.

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Sustainability of
Sumitomo
Corporation group

FeatureEnvironment
Environment

SocialGovernance[Display of referenced scenarios(macro environment)]

Our Climate Change Initiatives: Disclosure Based on TCFD

CommonAPS▌ Strategy: Transition Risks and Opportunities Related to Climate Change〈Scenario Analysis〉

SDS
NZE

 Transportation sector: Vehicles (automobile parts manufacturing & sales / finished

ESG
Quantitative Data

External
Recognition

Trends of Supply and Demand Changes in Referenced Scenario(Macro Environment)：Significant increase toincrease：Slightly decrease
to decrease：Increase to
Slightly increase：Decreaseto Significant increase：Neutralvehicles sales business)
Referenced scenarios (Macro environment: Changes in Sales of passenger vehicles
and EVs’ share)
2019
2020

2030

Our business environment, policies and initiatives
2050

At the Sumitomo Corporation, we are involved with the manufacture and sales offinished vehicles, automobile finance, and automobile leasing. The handling ofOEMs are accelerating their efforts to go carbon neutral in their supply chains, ahead of otherindustries

Com
mon

APS

SDS

EVs will account for roughly 40% of
the sales of passenger vehicles by2030. There will be a significant
reduction in demand for internal
combustion engine parts

NZE

EVs will increase their share inannual vehicle sales to approx. 64%,accounting for approx. 20% of theworld's vehicle ownership, as EVs
become more widely used due to theintroduction of new laws andregulations in various countries© 2022 Sumitomo Corporation

manufacturing business, so we consider the direct impact to automobile-related
businesses due to the switch to EVs to be limited. Also, as a response to carbon

In SDS and NZE, sales of passenger
vehicles will remain steady, driven by
economic growth in developing andemerging nations. Sales will increaseby 18% compared to 2019 in 2030. On
the other hand, consumers' preference
for car ownership will change due tothe development of MaaS
The share of EVs in annual vehicle
sales will increase from 4.6% in 2020
to approx. 30%, accounting for approx.
14% of the global vehicle ownershipinternal combustion engine parts is less than a few percent of the parts

neutralization, including OEM supply chains, we will investigate the use of carbonfree energy and low-carbon and carbon-free technology in manufacturing andtransporting parts. With the switch to EVs and developments in MaaS, changes tothe business model of our automobile-related businesses are conceivable. However,we see these changes as business opportunities. We will develop new businessfoundations, including car sharing businesses and parking businesses, creating
added value for existing businesses, and reviewing our product portfolio.
In addition, we are also working on new power and energy service businesses suchas large-scale storage batteries business, battery reuse business, green electricity
platform business, hybrid energy service business, etc., which will lead to ourbusiness opportunities in a society where EVs and renewable energy will be widelyused.

EVs will account for 100% of annual vehicle sales by
2050, with no new ICE vehicles being sold after 2035

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Sustainability of
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FeatureEnvironment
Environment

Our Climate Change Initiatives: Disclosure Based on TCFD

SocialGovernance[Display of referenced scenarios(macro environment)] Transportation sector: Shipping (Shipbuilding business/ship trading business/shipExternal
Recognition

Trends of Supply and Demand Changes in Referenced Scenario(Macro Environment)

Common▌ Strategy: Transition Risks and Opportunities Related to Climate Change〈Scenario Analysis〉

ESG
Quantitative Data

APS
SDS
NZE

：Significant increase toincrease：Slightly decrease
to decrease：Increase to
Slightly increase：Decreaseto Significant increase：Neutralownership and operation business)
Referenced scenarios (Macro environment: changes in shipping demand and the ratio of lowcarbon fuels in marine and aviation fuel consumption)
2019
2030
2050
2020
Com
mon

Shipping demand is expected to increase under the SDS/NZE scenario due to a modal shift and otherfactors. Fuel efficiency regulations will be tightened, and the use of low-carbon fuels will accelerate

APS

Ratio of low-carbon fuels in marine
and aviation fuel consumption
remains only about 6%

SDS
NZE

Demand for marine transportation increases by about 230% from 2019 through 2070
Ratio of low-carbon fuels in marine fuel consumption will increase to more than 50%
Shipping demand will increase by
Shipping demand increases by about 167% by 2050.
about 43% from 2020. Ratio of lowThe share of low-carbon fuels in ship/aircraft fuelcarbon fuels in ship/air fuel consumption
consumption will increase to about 81%
will increase to about 17%

Our business environment, policies and initiatives
At the Sumitomo Corporation, we are involved in shipbuilding, trading, andownership and operation businesses. As a result of CO2 reduction targets by IMO*
and changing needs from shippers, we assume that the shift from fuel oil ships to low
CO2 emission fuels and fuel oil dual-fuel ships will continue in the medium to longterm. While monitoring regulations of nations and trends in markets and technology,
we will create new business opportunities for the realization of a carbon neutral or
low-carbon society by reviewing our product lineup and portfolio of ships in the
shipbuilding business and by promoting businesses related to energy storage system(batteries) for ships.
*International Maritime Organization

 Transportation sector: Aviation (lease business/parts manufacturing)
Referenced scenarios (Macro environment: changes in aviation demand and the ratio of lowcarbon fuels in marine and aviation fuel consumption)
2019
2020

2030

Com
mon

In SDS/NZE, while some consumers are changing their behavior to avoid air travel, demand for air
travel remains strong, driven by economic growth in developing/emerging countries. In addition,
ICAO regulations are driving a shift to fuel-efficient aircraft and engines

APS

Ratio of low-carbon fuels in shipping/aviation fuel consumption is about 6%

SDS
NZE

Aviation demand will increase by
about 35% by 2019
Aviation demand will increase by
about 88% from 2020. Low-carbon
fuels as a share of ship/aircraft fuelconsumption increases to about 17%© 2022 Sumitomo Corporation

and about 135% by 2050
Aviation demand increases by about 166% by 2050.
Ratio of low-carbon fuels in ship/aircraft fuelconsumption will increase to about 81%

2050

Our business environment, policies and initiatives
At Sumitomo Corporation, we are involved in the lease of aircraft and engines alongwith the manufacture of some aircraft parts. Going forward, it is assumed that theshift to fuel-efficient aircraft will continue in the long term due to ICAO* regulations. In
our aircraft and engine leasing business, we procure new leased aircraft and engines
reflecting the demand of each client airline, and we have begun development of
biofuels and other products. We also continuously replace our aircraft and engine
portfolio through sales at the end of the lease. Therefore, by monitoring market andtechnology trends and laws and regulations regarding aircraft fuel efficiency, we
believe we can respond flexibly to changes in the business environment bycontrolling the risk of reductions in leasing fees and aircraft price.
* International Civil Aviation Organization
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FeatureEnvironment
Environment

SocialOur Climate Change Initiatives: Disclosure Based on TCFD

Governance[Display of referenced scenarios(macro environment)]

Common▌ Strategy: Transition Risks and Opportunities Related to Climate Change〈Scenario Analysis〉
 Material industry sector: Steel (steel products & tubular products

APS
SDS
NZE

ESG
Quantitative Data

External
Recognition

Trends of Supply and Demand Changes in Referenced Scenario(Macro Environment)：Significant increase toincrease：Slightly decrease
to decrease：Increase to
Slightly increase：Decreaseto Significant increase：Neutral

manufacturing and sales business)
Referenced scenarios (Macro environment: changes in steel production and oil and gas
investment amount)

Our business environment, policies and initiatives

Steel products

2019
2020

2030

2050

Sumitomo Corporation engages in the processing and sales of steel sheets,
tubular products and other steel products. Because our business operation
excludes nearly all of the steel manufacturing process, CO2 emissions are limited.

Com
mon

Global steel demand toward 2050 is strong in SDS/NZE. On the other hand, consumer demand for
decarbonization toward steel supply chain will increase

SDS

Steel production up about 1% from2019

up about 3% from 2019 by 2050

NZE

Steel production up 9% from 2020

up 12% from 2020 by 2050

For tubular products, the NZE scenario assumes that oil and natural gas
investment will decrease by about 47% through 2050. Simulations based on this
scenario assume a 10% to 30% reduction in revenues for the tubular business.
However, we are establishing a new earnings pillar by promoting various energy
transition-related businesses with major oil companies with whom we havestrategic partnerships, and by realizing the drilling automation business. If
demand for decarbonization in the supply chain rises among the end-users, ofTubular products (steel pipes)

2020

which the leading customers are in the fields of transportation systems,

2030

2050

household appliances, energy, etc., demand is likely to shift to recycling-derived
steel products and in the long term to products that utilize decarbonization and

Com
mon

Oil and gas demand trends and investment amount differ significantly among scenarios

APS

Oil and gas demand trends andinvestment amount differ significantly
among scenarios

Increase of about 38% through 2050

NZE

Oil and gas investment amountincrease by about 11%

Decreases about 47% with zero new development
through 2050

© 2022 Sumitomo Corporation

decarbonization technology, represented by direct reduction steelmaking utilizinghydrogen. For this reason, effort will be directed to cultivating business
opportunities that emerge from the carbonization of steelmaking technologies, incoordination with the leading customers and business partners.

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Sustainability of
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Corporation group

FeatureEnvironment
Environment

Our Climate Change Initiatives: Disclosure Based on TCFD
▌ Strategy: Transition Risks and Opportunities Related to Climate Change〈Scenario Analysis〉
 Material industry sector: Cement (distribution business)
Referenced scenarios (Macro environment: changes in cement production andclinker*-to-cement ratio)
2019
2020

2030

SocialESG
Quantitative Data

Governance[Display of referenced scenarios(macro environment)]

CommonAPSSDS
NZE

External
Recognition

Trends of Supply and Demand Changes in Referenced Scenario(Macro Environment)：Significant increase toincrease：Slightly decrease
to decrease：Increase to
Slightly increase：Decreaseto Significant increase：NeutralOur business environment, policies and initiatives

2050

Sumitomo Corporation engages in cement distribution business. Because thebusiness operation excludes all of the cement production process, CO2 emission is

APS

Ratio of clinker ash is about the sameas current (0.71)

SDS

Cement production to increase by
about 2% from 2019

NZE

Ratio of clinker ash decreases to0.65 as CCUS is implemented in the
manufacturing process

limited. While effort is underway for transition in fuel used in the cement productions
process to clean energy sources and research conducted on replacement oflimestone used as the principal raw ingredient with other materials, Sumitomo

Cement production to remain almost flat through 2050

Corporation is utilizing its own information network to explore into effective CCUS
technologies, etc., in the cement industry*A component of cement. Most of the carbon dioxide generated in the cement production process isgenerated in the clinker production process.

 Material industry sector: Chemicals (manufacturing/trade business)
Referenced scenarios(Macro environment: changes in chemical demand)
2019
2020

2030

Our business environment, policies and initiatives
2050

Sumitomo Corporation engages in petrochemical product trade and manufacturing.
In petrochemical product manufacturing, naphtha produced by refining petroleum
and gas is used as the principal raw material. Carbon dioxide is released in huge

Com
mon

Demand for chemicals will increase as power generation from renewable energy and energyrelated infrastructure expands

quantity from fossil fuel energy used in the synthesis and decomposition processes.

SDS

Demand for chemicals will increaseby about 21% from 2019raw material is expected to decline, and demand for use of renewable energy is

NZEDemand for chemicals to increase by
about 24% from 2020and by about 29% by 2050

In the long-term process of energy decarbonization, the supply of naphtha used as
expected to grow. Sumitomo Corporation expects to continue gaining revenues fromglobal trade by adjusting changes in supply and demand in petrochemical productraw materials and finished product markets and at the same time plans to monitor
trends in customer demands and in relevant technologies, in order to explore intobusiness opportunities in the effective use of biomass materials and chemical
product manufacturing utilizing CCU (carbon dioxide capture and utilization).

© 2022 Sumitomo Corporation

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Environment
Environment

FeatureOur Climate Change Initiatives: Disclosure Based on TCFD

SocialGovernance[Display of referenced scenarios(macro environment)]

Common▌ Strategy: Transition Risks and Opportunities Related to Climate Change〈Scenario Analysis〉
 Material industry sector: Aluminum(smelting business)
Referenced scenarios (Macro environment: changes in aluminum demand)※Referring to WEO2019

2018年

2030年

2050年

APS
SDS
NZE

ESG
Quantitative Data

External
Recognition

Trends of Supply and Demand Changes in Referenced Scenario(Macro Environment)：Significant increase toincrease：Slightly decrease
to decrease：Increase to
Slightly increase：Decreaseto Significant increase：NeutralOur business environment, policies and initiatives
Sumitomo Corporation's aluminum production business in southeast Asia chiefly
utilizes hydroelectricity. For this reason, future risks pertaining to carbon pricing is
expected to be limited, and the business is likely to remain competitive in the

Com
mon

DS/NZE will see increased demand from customers for aluminum smelted using renewable energy
derived electricity

SDS

Aluminum demand will increase by about 20% in 2040 compared
to 2018

medium and long range. For this reason, future demand for decarbonization in the
supply chain from end-users is expected to present business opportunities where
Sumitomo Corporation is able to utilize its strengths.

 Real estate sector: Office buildings/residential building sales business
Referenced scenarios (Macro environment: changes in floor space in commercial andresidential buildings and renovation ratio of buildings)
2020

2030

2050

Our business environment, policies and initiatives
Sumitomo Corporation engages in real estate business, including office buildings,
commercial facilities, residential housing, distribution facilities and real estate funds.

Com
mon

In SDS/NZE, real estate demand remains strong due to population growth in emerging/developing
countries

APS

About 10% of existing residentialbuildings are renovated

NZE

Over 20% of existing residentialbuildings are being retrofitted, with
"Zero Carbon Ready" buildings
accounting for 20% of the total

In Japan, in order to achieve carbon neutrality by 2050, energy-saving performanceequivalent to the ZEH/ZEB standards will be required for new buildings after 2030 inview of the fact that energy consumed in buildings and homes is perceived as asource of CO2 emission and in face of demand for zero carbon emission. Under

Floor space in commercial and residential buildings
will increase by about 1.7 times from 2020 levels.
Retrofitting of current building stock progresses, with
"Zero Carbon Ready" buildings accounting for 85% of
the totalsuch circumstances, continued effort will be directed to improving energy efficiency
and to introduction of renewable energy in the course of installation of new facilities
in new buildings and facility updates in existing buildings, based on customer
demand and technology trends. For office buildings, distribution facilities and realestate fund operations, action will be taken to acquire environment-related
certification. In residential home business, attention is directed to development of
ZEH condominium complexes.

© 2022 Sumitomo Corporation

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Sustainability of
Sumitomo
Corporation group

FeatureEnvironment
Environment

SocialGovernance

ESG
Quantitative Data

External
Recognition

Our Climate Change Initiatives: Disclosure Based on TCFD
▌ Strategy: Transition Risks and Opportunities Related to Climate Change 〈Scenario Analysis〉

Progress in decarbonization across sectors
Such as the presentation of a 1.5°C compliant target at COP26 (the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change) in
November 2021, global acceleration is underway for activities aimed at realizing carbon neutrality at an early stage. In addition to decarbonization effort by individual
industries in each country and region, action is underway to promote decarbonization across industries, with establishment of carbon pricing and promotion of sustainablefinancing, in addition to reducing emissions throughout the supply chain, including Scope 3, and expanding decarbonized products based on LCA.
The introduction and reinforcement of CO2 emission trade and carbon tax by various nations have combined with the carbon border adjustment mechanism under study inEurope and other regions, raising the possibility of impact on supply chain in various industries across national and regional boundaries. Forecast on carbon pricing differs byregion. As of 2050, it is expected to be in the range of 160-200 dollars/t-CO2 in APS, 95-160 dollars/t-CO2 in SDS and 55-250 dollars/t-CO2 in NZE scenario. Carbon pricing
levels in terms of carbon tax and emission trade in the future are expected to hugely affect business performance, chiefly in the carbon-intensive industries.
Additionally, financial support is provided in the use of decarbonization and decarbonization technologies in various nations and regions. For this reason, effort is underway todevelop sustainable financing guidelines, including the EU taxonomy.
Because the weight of carbon-intensive manufacturing businesses is limited in Sumitomo Corporation's business portfolio, the direct impact of the aforementioned
developments is expected to be limited. However, we monitor the latest trends in climate change risks and opportunities, referring to the ISSB (International Sustainability
Standards Board) exposure draft (including Climate-related Disclosures) released on March 31, 2022, and other relevant documents, and attention will be directed to theimpact of these decarbonization promotion measures and policies on the supply chains that are linked to Sumitomo Corporation’s business operations, in order to explore
into new business opportunities with attention to changes in technologies and business models through minimization of risks and decarbonization.
[Disclaimer regarding forecasts]
The projections and forecasts contained here are based on information available as of the date of this announcement, and on certain assumptions and projections. Therefore,
actual results and performance may differ significantly due to various uncertainties, including future economic trends and market prices. Neither the company nor the
information providers assume any responsibility for any errors in the information posted or for any damages incurred based on the information presented.
© 2022 Sumitomo Corporation

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FeatureEnvironment
Environment

SocialGovernance

ESG
Quantitative Data

External
Recognition

Our Climate Change Initiatives: Disclosure Based on TCFD
▌ Strategy: Physical Risks Related to Climate Change and Countermeasures
Because Sumitomo Corporation Group engages in business activities over a wide range of industrial sectors in various countries, possible escalation in climate change is likely to cause the following
risks to become chronic and impact its business operations. (For sector category and characteristics of risks per sector, referred to UNEP FI reports on physical risks, etc. / For analysis on water
stress and temperature rise, refer to Representative Concentration Pathway (RCP) 8.5 scenario by the Intergovernmental Panel on Climate Change (IPCC).)
Awareness of the impact of physical risks in each sector
Chronic
Acute
Water shortage resulting in decline in production efficiency
Damage on facilities, disruption of operation, etc., caused by flooding andEnergyand in operation efficiency, risk of submergence due to sea
huge rainstorms
level rise, etc.
Rise in temperature & water shortage resulting in decline in
Resource &Damage on facilities, disruption of operation, etc., caused by flooding andproduction efficiency, disruption in operation, risk of flooding
Interest
huge rainstorms
with rise in sea level, etc.
SectorPrincipal business related to the risk described at left

Rise in temperature & water shortage resulting in decline inproduction efficiency, disruption in operation, etc.

Damage on facilities, disruption of operation, delay in raw
materials/product shipment, etc., caused by flooding and huge rainstorms

Transportati Water shortage resulting in decline in production efficiency,
on systems disruption of operation, etc.
Delay in project schedule, rise in utility cost, decline inReal estate property value with a rise in sea level, etc., resulting fromrising temperature
Rise in temperature & water shortage resulting in decline in
Agriculture
production efficiency, etc.

Damage on facilities, disruption of operation, delay in raw
materials/product shipment, etc., caused by flooding and huge rainstorms

Thermal power generation in Southeast Asia, Middle East andAfrica; renewable energy power generation, including solar power
generation, etc., in Japan
Mining operations in North America, South America, Australia,
Africa, etc.; energy interests in Southeast Asia, Middle East &Europe; and sales of such resources and energy
Manufacturing, processing, sales, etc., of metal products,
transportation equipment and parts, chemical products, materials,
etc.
Manufacturing and sales, etc., of transportation equipment andparts

Delay in project schedule, decline in property value caused by structural
damage & flooding, etc., caused by flooding and huge rainstorms

Office building business, retail facilities business, residential
business, logistics facility business, etc.

Disruption in operation, etc., caused by huge rainstorms, flooding or
drought

Agriculture & import and wholesale of food products, retail sales
business, etc.

Rawmaterials

Physical risks are largely divided into chronic risks that have continual and chronic impact on business activities (e.g., rise in average temperature, change in rainfall pattern and rise in sea level) and acute risks caused byunforeseen disasters (e.g., escalation of abnormal weather conditions such as huge rainstorms, flooding, drought, etc.). The impact is wide-ranging, including direct impact related to production site facilities and working
conditions and indirect impact on a broad range of supply chains for raw materials and products. In view of Sumitomo Corporation's business operations over a broad range of fields and regions, studies will be conducted
on investments related to impact of the region's weather conditions, geographical factors, etc., continual assessment after project participation, identification of its own scope of liability under contract terms and conditions,nonlife insurance contracts, etc., for management of such risks. In the following analysis, we focused on power generation, energy and natural resources, real estate, and agriculture, and analyzed their physical risks
based on the location of their main sites, focusing on two main factors: water stress and continuous temperature rise.
 The analysis of water stress on power generation business showed there are regions with possibility of possible water shortage. However, water used in the business operation, e.g., cooling water for the power
generation operation, etc., is supplied by seawater, water production facilities within the power plant, etc., leading to the conclusion that the risk of operation disruption caused by water shortage, etc., is not significant.
 In the study of resource & interest business in terms of water stress and continual temperature increase risk, there were regions found to have relatively high risk of long-term increase in the number of days whentemperature reaches 35°C or higher and possibility of water shortage. Sumitomo Corporation plans to execute risk control through assessment of disaster risks vis-à-vis geographical conditions, etc., definition ofworking conditions with sufficient attention to temperature and other conditions, subscription to nonlife insurance, etc.
 In the real estate business, sufficient research and analysis are being conducted on flooding risks for various locations during the development studies stage. Property projects are being selected through conservative
assessment of risks based on information from hazard maps and specific conditions of each property site, etc. In promoting project development, measures are being taken on physical risks in order to minimize them.
For this reason, risks in the business portfolio as a whole is not considered significant.
 In the analysis of temperature rise and water stress for major agricultural sites in each country, there are regions with possibility of increase in the number of days when temperature rises to 35°C or higher and of
possible water shortage. Although adverse impact is anticipated on such agricultural operations if such risks affect agricultural product quality, output, etc., Sumitomo Corporation has diversified crops and regions in
the business and has therefore built risk resistance to a certain degree in terms of total performance.
© 2022 Sumitomo Corporation

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Our Climate Change Initiatives: Disclosure Based on TCFD
▌ Risk Management
 Our Group's activities cover businesses across a broad range of fields and regions and involve various social issues. We always attach great importance to these social
issues, and in order to appropriately control the social and environmental impact of the entire Group's business activities, establish policies such as the Environmental
Policy, Human Rights Policy, CSR Action Guidelines for Supply Chain Management, Anti-Corruption Policy, and Compliance Guiding Principles, and publicize andthoroughly enforce them within the Group.
 We evaluate social and environmental risk and confirm response measures as part of our deliberation processes when considering and implementing new business froma broad perspective. In particular, with regard to climate change, we confirm the following with regard to risks (and opportunities) related to business continuity being
impeded by the inability to appropriately respond to changes in the business environment resulting from social and environmental problems such as climate change.
• The impact of climate change such as the frequent occurrence of natural disasters and abnormal weather• The impact of the introduction of regulations• The impact of technology changes, etc.
• The potential for the expansion of business or the improvement of business performance through advances in climate change mitigation and adaptation to climatechange With regard to our existing business, as well, we regularly monitor the overall management status of these risks to each business, including social and environmental risks.
In addition to managing risk related to individual businesses, we assess the status of companywide social and environmental risks and develop systems that enable theseassessments to be used to make strategic management decisions.
 With regard to the handling of the risks of climate change, each business organization assesses the introduction of regulations and market changes for related businesssectors and conducts business activities, and as a part of companywide portfolio management, the Corporate Sustainability Department summarizes the status of majorrisks to the Group, taking into consideration global efforts relating to climate change and regulatory trends. The results are periodically reported to the Management
Council and the Board of Directors. If there are any unacceptable risks from the perspective of the portfolio as a whole, measures including reduction of exposure areinvestigated with organizations responsible for risk management.

© 2022 Sumitomo Corporation

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Recognition

Our Climate Change Initiatives: Disclosure Based on TCFD
▌ Metrics and Targets▌ Results

Targets：Effort for carbon neutrality║ CO2 Emissions

The Group has adopted the following as its basic policy on climate change
issues.
 Reduce CO2 emissions 50% or more by 2035 (compared to 2019)[ Power generation business ]CO2 emissions: Reduce 40% or more (of which 60% reduction or more forcoal-fired power generation business)
Net ownership generation capacity: coal 20%, gas 50% renewables 30%[ Fossil fuel upstream business ]CO2 emissions *1: Reduce 90% or more

Index

(Thousand t-CO2e)
Result of 2019
（The base year）

Result of
2021

Percentage ofchangeReduction targets of2035

Entirety

59,93955,497▲7.4%

50％ or morePower generation
business *2

43,12641,368▲4.1%

40％ or more

34,452

33,202▲3.6%

60％ or more

15,808

13,162▲16.7%

90％ or more

Of which, coal-fired
power generation *2
Fossil energy
concession

Figures for active power generation projects and fossil energy interests are calculated with the advice ofa third party.
*2 Includes estimates for projects under construction.

 For coal-fired power generation business, no further involvement in IPP(Independent Power Producer) nor EPC (Engineering, Procurement,
Construction) business and will end all the coal-fired power generation
business in the late 2040s. For thermal coal mine interest, no additional
investment and aim to achieve zero equity production from thermal coalmines by 2030.

║ Net ownership generation capacity portfolio（Figures noted inbrackets indicate net ownership generation capacity）

 increase supply of renewable energy (3GW or more by 2030)

Coal

54％
（5,240）53%(5,208)20％

Targets：Effort for carbon neutrality (As of 2021)

Gas

31％
（3,011）31%(3,011)

50％

Renewable energy *3

15％（1,397）16%(1,516)

30％

Total

100％
（9,651）

100%(9,737)

Scope Direct

1

Sumitomo
Corporation/
Subsidiaries
Associatedcompanies(equitymethod)emissions

Scope Indirect emissions

2

from acquired
electricity etc.

Approx. 1 million tons

(Excluding power generation business)
Thermal power generation business(Includes estimates for projects
under construction.)

Approx. 41 million tons

Scope Other indirect3

emissions

Fossil energy
concession
Approx. 13
million tons

*1 Indirect CO2 emissions by others associated with the use of energy resources produced© 2022 Sumitomo Corporation

Index

Result of March 31, 2020
（The base year）

Result of March 31,
2022║ Net ownership generation capacity of Renewable energy
Index
Renewable energy *3

Result of March 31, 2020
（The base year）

Result of March 31,
2022

1,397

1,516

(MW)
Targets of 2035

(MW)
Targets of 2030
3,000 or more

*3 Includes capacity held by a fund whose management company is 51% owned by Sumitomo Corporation.
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Climate Change
Activities║ Business Description

Renewable Energy Related BusinessWe have entered power generation business using renewable energy, which is expected to grow as a medium- to long-term energy source, contributing to mitigating climate change.
As of March 31, 2022
FuelSolar power

Wind power

Power plant

Country

Generation
Capacity（MW）

Osaka Hikarinomori Project

Japan

10.0

Solar Power Saijo

Japan

29.0

Solar Power Kitakyushu

Japan

16.0

Solar Power Tomakomai

Japan

15.0

Solar Power Minamisoma/Kashima

Japan

59.9

Solar Power Minamisoma/Haramachi

Japan

32.3

EVM/EVM2

Spain

14.0

Thang Long Industrial Park
(TLIP)/TLIPⅡ/TLIPⅢ

Vietnam

11.0

Oga Wind Power Plant

Japan

28.8

Summit Wind Power (Kashima)

Japan

20.0

Abukuma Wind Power Plant

Japan

147.2

Datang Sino-Japanese (Chifeng) New
China
Energy50.0

Stanton Wind Energy

USA

120.0

Cimarron Ⅱ Wind

USA

131.1

Ironwood Wind

USA

167.9

Dorper WindSouth Africa

100.0

Mesquite Creek Wind

USA

211.2

© 2022 Sumitomo Corporation

FuelPower plant

Country

Generation
Capacity（MW）

Northwind

Belgium

216.0

Nobelwind

Belgium

165.0

Northwester2

Belgium

219.0

Galloper

UK

352.8

Race Bank

UK

573.3

Summit Handa Power

Japan

75.0

Summit Sakata Power

Japan

50.0

Summit Myojo Power

Japan

50.0

Sendai-ko Biomass Power

Japan

112.0

GeothermalPower

Muara Laboh

Indonesia

85.0

Hydraulic power

CBK

Philippines

792.0

Offshore wind
power

Woody biomass

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Climate Change
Activities║ Business Description
Green Building Initiatives and Issuance of Green Bonds
n our real estate business, we have formulated and implemented basic policies related to environmental,●Energy Saving Equipment
Costs related to renewal of air-conditioning equipment, conversion of lighting fixtures to LEDs, andsocial and governance (ESG) issues.As a real estate management company, Sumisho Realty Management

introduction of power storage systems (expected energy savings of 10% compared with conventional

Co., Ltd. (“SRM”) believes that incorporating ESG elements into investment decisions and operation

systems)

processes is essential to maximizing value of medium- to long-term investor. For SOSiLA Logistics REIT, Inc.

● Renewable Energy(“SLR”) and other fund properties under the company’s management, it has had its real estate performance

Acquisition or installation of renewable energy power generation facilities (installed on the premises or

evaluated by CASBEE, DBJ Green Building, LEED, BELS, and so on. Also, SOSiLA Logistics REIT Inc. has
been awarded “4 Stars” in the 2021 GRESB Real Estate Assessment and the second highest “B Level” for theon the rooftop of the property)
Property Name

Evaluation

SOSiLA Yokohama Kohoku

Rank A

oriented asset management through green finance. In July 2022, SLR issued 1,600 million yen Green Bonds

SOSiLA Sagamihara

Rank A

with aims to strengthen the funding platform by expanding the ESG investor base, along with promoting ESG

SOSiLA Kasukabe

Rank Ainitiatives. Proceeds procured through Green Finance are used for the acquisition of existing or new assets

SOSiLA Kawagoe

Rank AGRESB Public Disclosure, which measures the quality of ESG disclosure.

Certification Obtained

SLR is the first J-REIT that has formulated a green finance framework since IPO. It aims to promote ESG-

(including scheduled acquisition) of Eligible Green Assets that satisfy any of the following eligible criteria, used

SOSiLA Nishiyodogawa I

Rank Afor the renovation of Eligible Green Assets, or repayment and edemption of loans (including Green Loan) andSOSiLA NishiyodogawaⅡ

Rank A

Investment Corporation Bonds (including Green Bonds) required for these.

SOSiLA Ebina

Rank S

LiCS Narita

Rank ACASBEE: 9 properties＜Eligibility Criteria＞

SOSiLA Itabashi●Green Building
Any of the following items that have been or will be certified

LEED: 2 properties

203 North LaSalle

Building (New Building)A RankPLATINUM

Atlanta Financial Center

SILVERSOSiLA Yokohama Kohoku☆☆☆☆☆

SOSiLA Sagamihara☆☆☆☆☆

SOSiLA Kasukabe☆☆☆☆☆

SOSiLA Kawagoe☆☆☆☆☆

SOSiLA Nishiyodogawa I☆☆☆☆☆

Renovation of the owned assets which meet the following;

SOSiLA Ebina☆☆☆☆☆

i. To aim for improving environmental benefits such as reducing CO2 emission, energy consumption or water

SOSiLA NishiyodogawaⅡ☆☆☆☆☆

・B+ rank, A rank, or S rank in CASBEE certification
・Three-star, four-star, or five-star DBJ Green Building certification
・Three-star, four-star, or five-star BELS certification
・Silver, Gold or Platinum in LEED certification● Renovation of existing building

consumption (10％ or more decrease in its volume)ii. To improve the certification level by one rank, acquisition or reacquisition of the certifications© 2022 Sumitomo Corporation

BELS：9 properties

☆☆☆☆
☆☆☆☆☆
Acquisition of major environment-related certifications at fund properties managed by
Sumisho Realty Management Co., Ltd. (as of July 2022).
LiCS Narita

SOSiLA Itabashi

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Water Resources
Activities

Policy and Concept
Water is an essential natural resource. However, due
to an increase in water demand as a result of
population growth and economic development, there
will be more and more areas where water will become
scarce. According to the Organization for Economic
Co-operation

andDevelopment(OECD),

water

demand is projected to increase by 55% between
2000 and 2050 and, in 2050, 240 million people will
have no access to clean water and 1.4 billion people
will be without access to basic sanitation.
Our Group conducts its business around the world,
includinginhighlywater-stressed

areas.

Fully

recognizing the finiteness of water resources, weapproach relevant issues both in terms of risk andopportunity through our efforts to reduce water
consumption, improve efficiency, and establish water
infrastructure.

▌ Water Business
While water demand is expected to increase on a global basis as a result of population growth, urbanization and industrialization, theinfrastructure environment to ensure the supply of safe and hygienic water has not been improved and water issues are expected to
become even more serious. In response, in the 21st century, water business that aims to address water issues has started attracting
people's attention globally. Increasing awareness that developed countries are responsible for contributing to achieving a safe andhygienic living environment in developing countries has also contributed to the increased attention to water business.
We regard water business combining water supply and sewerage systems as an important pillar of social infrastructure. Based on thisrecognition, we are engaged in various business projects around the world. We have been expanding our water business from BOOT
and BOO business*1 using private-sector capabilities*2, such as water and sewage treatment and seawater desalination, to fully
privatized business in promising markets around the world, including areas with rapidly increasing water demand. We have realized
substantial achievements in these business areas. We will continue to take on challenging issues in globally expanding and multifacetedwater business by supplying safe and secure water using Japanese technology and responding to the demand for reducing social costs
by using private capital.
*1 BOOT (Build–Own–Operate–Transfer) is a form of providing services under a long-term contract with the public sector and, after the contract period,transferring the business assets to the public sector
BOO (Build-Own-Operate) is a form of providing services under a long-term contract with the public sector as in BOOT but the assets will bemaintained by the business operator.
*2 Use of private-sector capabilities: Use of business operation capabilities and funds of the private sector for business projects that have traditionallybeen conducted and financed by the public sector to increase efficiency
Country© 2022 Sumitomo Corporation

Business description

Business category

BrazilInvestment in BRK Ambiental, a top Brazilian company engaged in water business, holds assets of 23
business projects of water supply and sewerage and industrial water treatment (our indirect ownership ratio is14%). We are participating in promising water supply and sewerage business in Brazil.

Water supply andsewerage businessUK

We acquired 50% of the shares of Sutton & East Surrey Water, a UK water business company, and became
involved in fully-privatized water business in the UK.

Water supply business

China

We established Capital Summit at 40% share ratio with Beijing Capital Eco-Environment Protection Group, aSewage treatment
leading water infrastructure company in China. Capital Summit operates sewage treatment plants in Shandong
business
Province and Zhejian Province.

Oman

We have been awarded a seawater desalination project using reverse osmosis membrane technology andprivate-sector capabilities/funds. Commercial operation was started in February 2016.

Seawater Desalination
business
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Biodiversity
Policy and Concept

BBOP Principles on Biodiversity Offsets

Sumitomo Corporation Group’s business activities largely depend on the wealth of Earth’s
diverse living organisms as well as from the biodiversity that is generated by their many
networks. Therefore, our Environmental Policy recognizes placing great importance on

1Adherence to the mitigation hierarchy: A biodiversity offset is a commitment to compensate forsignificant residual adverse impacts on biodiversity identified after appropriate avoidance,
minimization and on-site rehabilitation measures have been taken according to the mitigation
hierarchy.

2

Limits to what can be offset: There are situations where residual impacts cannot be fullycompensated for by a biodiversity offset because of the irreplaceability or vulnerability of thebiodiversity affected.

3

Landscape Context: A biodiversity offset should be designed and implemented in a landscapecontext to achieve the expected measurable conservation outcomes taking into account available
information on the full range of biological, social and cultural values of biodiversity and supportingan ecosystem approach.

4

No net loss: A biodiversity offset should be designed and implemented to achieve in situ,
measurable conservation outcomes that can reasonably be expected to result in no net loss andpreferably a net gain of biodiversity.

5

Additional conservation outcomes: A biodiversity offset should achieve conservation outcomes
above and beyond results that would have occurred if the offset had not taken place. Offset
design and implementation should avoid displacing activities harmful to biodiversity to otherlocations.

6

Stakeholder participation: In areas affected by the project and by the biodiversity offset, theeffective participation of stakeholders should be ensured in decision-making about biodiversity
offsets, including their evaluation, selection, design, implementation and monitoring.

7

Equity: A biodiversity offset should be designed and implemented in an equitable manner, whichmeans the sharing among stakeholders of the rights and responsibilities, risks and rewards
associated with a project and offset in a fair and balanced way, respecting legal and customaryarrangements. Special consideration should be given to respecting both internationally andnationally recognised rights of indigenous peoples and local communities.

8Long-term outcomes: The design and implementation of a biodiversity offset should be based onan adaptive management approach, incorporating monitoring and evaluation, with the objective ofsecuring outcomes that last at least as long as the project’s impacts and preferably in perpetuity.

9

Transparency: The design and implementation of a biodiversity offset, and communication of its
results to the public, should be undertaken in a transparent and timely manner.

10

Science and traditional knowledge: The design and implementation of a biodiversity offset
should be a documented process informed by sound science, including an appropriate
consideration of traditional knowledge.

preserving the environment, including the natural ecosystem and biodiversity as animportant issue for us. We make efforts to understand how our business activities that may
have a significant impact on biodiversity depend on such biodiversity, as well as what kindof impact such activities have on biodiversity, in order to minimize their impact on
ecosystems and contribute to ecosystem restoration.
In the process of reviewing new projects and monitoring existing projects, we also assess
social and environmental risks including impact on ecosystems, and check the status ofmanagement and improvement.

Activities
Business and Biodiversity Offsets Program (BBOP) is an initiative to prepare international
standards regarding biodiversity offsets, participated in by companies, governments, NGOs
and other specialists. BBOP is referred to by the Convention on Biological Diversity andhas become recognized as an international standard regarding biodiversity offsets. We, asa Japanese company, participate in
the program through the Ambatovy
Project in Madagascar. (Refer tothe next page.)© 2022 Sumitomo Corporation

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Biodiversity
Activities║ Business Description
Ambatovy Project Contributing to Sustainable Development in Madagascar

After starting the construction of pipelines, habitats of endangered animals were foundOne of the examples of collaboration between BBOP and Japanese companies inon the routes where the construction was planned. In response, we changed 24 routes in

implementing biodiversity offsets is a nickel mine development project in Ambatovy in
Madagascar in which we have made a capital participation. This is the Ambatovy Projectin Madagascar, one of the largest-scale mine development projects in the world, which
has been developed since 2007 in preparation for increasing demand for nickel, cobalt
and other metals.
In the Ambatovy Project, many new facilities, such as mining sites, refinery plants andpipelines, need to be constructed and operated, which poses substantial impacts on thesurrounding environment. Particularly in Madagascar, there remains a globally precious
natural environment where as many as 1,000 species of endangered animals are living.
We give careful consideration to these natural habitats in developing and operating thetotal to bypass these habitats. We are also promoting a large-scale biodiversity offset
program under the “no net loss, net gainˮ concept. This is an approach to mitigate
impacts of the development on ecosystems by restoring or creating another ecosystem.
Specific measures include the conservation of a forest area of 6,800 ha in the Ankeranaarea, which has an ecosystem similar to that of the development site of the project. In an
attempt to offset the net loss of biodiversity, we are implementing measures to protect
four conservation areas of more than 14,000 ha in total, equivalent to about nine times
the affected areas, such as protection of areas near the mine site, tree replanting after
the installation of pipelines, and tree replanting on the mine site after the closure of themine.

project. In developing and implementing plans for the project, special emphasis is placedon environmental management in compliance with not only Madagascar national laws but
also various guidelines, such as the World Bank safeguard policy, the International
Financial Corporation's (IFC) Performance Standards, the World Health Organization(WHO) standards, and the Equator Principles.
In the project, rigorous measures have been applied to protect the environment, including
efforts to maintain biodiversity, in compliance with the aforementioned and various other

Coquerel's Sifaka (Propithecus coquereli),endangered species

standards. For example, in developing the mining area, we created a buffer zone aroundthe mining site of about 1,600 ha to ensure protection of wild animals. When trees are cut
down to develop the mine site, felled trees are left on site for a while so that animals
inhabiting these trees can move into the buffer zone. We also conduct ecosystem surveys
jointly with international environmental NGOs. If endangered or other species that need to
be protected are identified in such a survey, we adopt various programs designed toreduce impacts on ecosystems, for example, relocation of such species to a sanctuary
and use of a fish farming system.
© 2022 Sumitomo Corporation

Diademed sifaka (Propithecus diadema), criticallyendangered species

Golden Mantella (Mantella aurantiaca),
critically endangered species

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Biodiversity
Activities║ Business Description║ Business Description

Bird Friendly® Coffee

Bird-strike Prevention in Wind Power Generation

Sumitomo Corporation Group has imported and supplied Bird In 2019, this project was recognized by the Japan Committee

Dorper Wind Farm generates electricity using wind in a

Friendly®-certified coffee (BF®-certified coffee) since 2004 as

mountainous area of about 130 km2 in Eastern Cape,of the International Union for Conservation of Nature andpart of our biodiversity-friendly activities, which ensures a Natural

Resources(IUCN)

asacooperative

project

South Africa. In the Doper wind power generation project,stable income for farmers. Since FY2014, SC Foods Co., Ltd. authorized by the Japan Committee for the United Nations

measures to prevent bird strikes are implemented.

started dealing in BF®-certified coffee. BF®-certified coffee is

Decade on Biodiversity (UNDB-J)*2. This authorization

Windmills are installed in pastures and bird strikes aregrown under the shade of natural forest trees to conserve the means that the project is an important activity to conservecaused by birds that flock to feed on the carcasses ofenvironment and provide migratory birds a place to rest. The biodiversity as well as an activity that has achieved results

livestock and other animals. We therefore ensure to

BF certification was created by the Smithsonian Migratory toward meeting the Aichi Biodiversity Targets*3. We willremove animal carcasses found in the power plant.

Bird Center (SMBC). As of July 2022, 53 farms and continue our efforts to contribute to protecting migratory birds

We also hire local residents to visually confirm if there is

agricultural cooperation in 12 countries*1 are certified and and ecosystems through this project.

any endangered bird species circling around thepart of the proceeds are used for SMBC's research, surveys *2 The committee was established in September 2011 to encourage

windmills and, if detected, to send an emergency noticeand conservation activities.

the participation and cooperation of all sectors in Japan to promote

to stop the operation of the windmills. It is our aim toefforts to conserve biodiversity and ensure its sustainable use.

achieve a harmonious balance between wild animal*3 New international targets to conserve biodiversity, which wereconservation and wind power generation business.

*1 12 countries: Ethiopia, Peru,El Salvador, Columbia,

adopted by the 10th Conference of Parties (COP10)

Guatemala, Nicaragua, Bolivia,
Honduras, India, Thailand,
Mexico, Venezuela

Harvest of BF®-certified coffee© 2022 Sumitomo Corporation

This project has been recognized as a project recommended
by the Japan Committee for the United Nations Decade on
Biodiversity (UNDB-J).

Dorper Wind Farm Pty Ltd. in South Africa
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Prevention of Pollution
Policy and Concept
Sumitomo

Corporation

Activities
Group’sbusinesscovers a wide range of areas around the world.
As described in the Environmental Policy, the║ Business Description
Efforts to Reduce Environmental Impacts in the Agrochemical / Fertilizer Sales BusinessGroup complies with environment-related laws

Our major mission in the realm of agrochemical/fertilizer business is to provide

As an IPM effort, we are spreading the use of a communication disruptor

and regulations and contributes to creating a

the best-quality agrochemicals/fertilizers that fulfill the needs of farmers(pheromone agent) developed by Shin-Etsu Chemical Co., Ltd., which

recycling society. We consider it important notworldwide with the aim of contributing to increasing the productivity ofuses insect's natural sex pheromone. It is harmless to non-target organisms,

only to comply with laws, ordinances andagricultural crops. We select and combine functions such as import,

and not only reduces the population of the target pest but is also effective on

manufacturing, wholesale and direct sales by taking into account thepests that enter inside plants and are hard to control.

characteristics

It can also be expected to reduce the pesticide resistance of pests. This

standards to prevent pollution caused bywastewater, sludge, exhaust and other wastes
but also to reduce environmental impact
through waste reduction, reuse and recycling

of

each

market,

and

we

are

currently

conducting

agrochemical/fertilizer business in over 30 countries.

control method is currently applied by about 60% of orchards in France. In the

In some areas, unfortunately, farmers and distributors inappropriately dispose

European region, we have expanded our sales territory to include Poland,of emptied plastic bottle containers and aluminum bags of agrochemicals,

Bulgaria and Russia since 2015. In Russia, Summit Agro LLC, a local

in order to achieve a sustainable society. We

which can pollute the environment. There are also concerns that agrochemical

distributor, is recognized as the first company to have introduced

will continue to address relevant issues

remains in such containers could lead to an accident and adversely affect thepheromone agent to the country.

through our business activities.

environment. Agro Amazonia Produtos Agropecuarios Ltda. in Brazil and

In addition, we put our efforts into reducing the amount of conventional

Summit Agro Mexico S.A. de C.V. in Mexico involve other companies in thechemical fertilizer applied and reducing environmental impacts on farmland byaindustry to make joint efforts to collect and recycle empty containers of

expanding the sales of coated fertilizers (allowing farmers to control the paceagrochemicals to promote environmental conservation.

of fertilizer elution and enhance the effective utilization rate of fertilizer

Efforts are also made to reduce the environmental impacts of agrochemicals

constituents, thereby reducing the amount of fertilizer applied) andthemselves,abiostimulants (which increase plants’ tolerance to diseases and pests as wellbioagrochemical manufacturer in Spain, and application of integrated pest

as to cold/heat stresses by enhancing their innate immunity and vitality,

management (IPM), which does not depend on agrochemicals alone and has

thereby enabling the use of reduced amounts of fertilizer).

includinginvestment

in

Futureco

BioscienceS.A.,

low environmental impacts.

Investment in a bio-agrochemical
manufacturer in Spain© 2022 Sumitomo Corporation

Agrochemical project in Brazil(Agro Amazonia Produtos Agropecuarios Ltda.)

Use of apheromone agent

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Prevention of Pollution
Activities║ Business Description
Reducing the Environmental Impact of Marine Fuel
Since 1952, we have been supplying marine fuel to shipping companies in Japan and abroad. To

We have signed a Memorandum of Understanding with five partners, including A.P.

contribute to reductions in the shipping industry’s environmental impact, we are also working to supply

Moller - Maersk A/S, regarding a joint study on the commercialization of the ammonia

LNG fuel, which emits no sulfur oxides and contains 40-70% fewer nitrogen oxides and 20% lessfuel supply for ships in Singapore. Through this initiative, we aim to contribute to thecarbon dioxide than conventional fuels. Specifically, through a joint venture with Uyeno Transtech Ltd.,

decarbonization of the shipping industry by introducing and spreading ammonia fuelYokohama-Kawasaki International Port Corporation, and the Development Bank of Japan Inc., wethroughout the world through the creation of a comprehensive supply chain that includes

placed an order for an LNG bunkering vessel in February 2019 which is scheduled for completion in

the supply, transportation, storage, and bunkering of ammonia fuel.

FY2022.
TheInternational

Maritime

Organization(IMO), a specialized agency of the United
Nations, has formulated a strategy to halvegreenhouse

gas

(GHG)

emissionsfrommaritime transportation globally by 2050
compared to 2008 levels. In this context, it isbelieved that ammonia will be the next
generation of alternative marine fuels thathave the potential to contribute significantly to
reducing GHG emissions in the shipping
industry because it does not emit CO2 during
combustion. Green ammonia in particular has
the potential to be a major factor in making
the shipping industry carbon-free, as it isproduced solely from renewable electricity,water, and air and emits no CO2 during its
lifecycle.
© 2022 Sumitomo Corporation

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ESG Communication Book

Environment
Environment

FeatureSocialESG
Quantitative Data

Governance

External
Recognition

Resource Utilization (Effective Use of Forest Resources)
In addition to providing food and timber products, forests contribute to the conservation of biodiversity and mitigation of climate change by capture and storage of CO2.
The Sumitomo Corporation Group, that conducts business using these precious forest resources, will maximize the environmental and social value provided by forest resources
while striving to strengthen governance to prevent deforestation and human rights violations.
Environmental Value

Social Value- Conservation of biodiversity through proper forest management- Job creation in the region and vitalization of the local economy- Capture and storage of CO2 through proper forest management and reforestation- Stable supply of high-quality wood products- Utilization of unused wood such as wood from thinning- Stable supply of electricity from renewable energy sources, unaffected by weather conditions, throughbiomass power generation businessTrading business of wood products for building materials andwood chips for paper manufacturing

Forestry BusinessSocial aspects

Environmental aspects-Biodiversity conservation through proper forest
management-Job creation in the local community-Capture and storage of CO2 through proper forest
management and reforestation-Contribution to building local communities,
including philanthropic activities

Manufacture

Environmental aspects

Social aspects- Trading of products with low environmental
impact, and fixation of carbon absorbed by thewoods through distribution of these products- Stable supply of wood materials- Trading of products with traceability

Grow

Use

Trading business of biomass fuels

Forestmanagement
cycle

Our forest management
maintains the ecosystem forexample inhabited by wild
horsesHarvestPlant
The forest area of the North Island in New
Zealand is as vast as 80% of the 23 wards
in Tokyo

Sustainability challenges in forest dependent business- Enhance sustainable procurement- Thoroughly implement corporate governance, including group companies- Manage social and environmental risks in the supply chain- Reduce CO2 emissions from manufacturing and transportation phases, etc.

© 2022 Sumitomo Corporation

Applying logging methods (e.g.,ribbon cutting) that allows naturalregeneration by leaving the parent
trees intact

Biomass power
generation business

Environmental aspects

Environmental aspects- Conservation of forests through effective use of unusedmaterials

Power source that contributes to climate change mitigation
using renewable resources as fuel- Trading of products with traceability

Social aspects- Capture and storage of CO2 through proper forest
management and reforestation- Stable supply of electricity from renewable energy sources,
unaffected by weather conditions

Social aspects- Revitalization of the forestry industry and expansion of forest
maintenance through the use of domestic timber- Stable supply of high-quality, traceable wood chips andpellets to customers

Strengthen corporate governanceto maximize corporate value
Implement measures to strengthen governance- Revitalization of local economy and job creation in the region

Measures to solve sustainability challenges in business- Established "Forest Management Policy" and "Sourcing Policy for Forest
Products" and guidelines- Monitor and improve business operations in line with the above policies andguidelines- Implement due diligence by utilizing international certification systems andconducting audits using satellite imagery etc.
-Collaborate with suppliers
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FeatureEnvironment
Environment

SocialGovernance

ESG
Quantitative Data

External
Recognition

Resource Utilization (Effective Use of Forest Resources)
We established the Sumitomo Corporation Group Forest Management Policy in March 2022. Furthermore, in order to reinforce due diligence to mitigate risks, we also set
Operational Guidelines for putting the policies into actions.
Policy and Concept

Sumitomo Corporation Group Forest Management Policy
Scope of application
Forestry business directly managed by Sumitomo Corporation and its Consolidated subsidiaries. In addition, otherforestry business that Sumitomo Corporation and its subsidiaries are involved in management are included if
determined to be material.

GovernanceThis policy was approved by the Management Council and the Board of Directors of Sumitomo Corporation. If any
serious issues arise in implementing this policy, measures and corrective action plans will be discussed at the
Corporate Sustainability Committee and reported to the Management Council and the Board of Directors.

Commitment
Based on the principles of zero deforestation and respect for human rights, Sumitomo Corporation will strive toimplement the following in its sustainable forest management, with the cooperation of its Group companies.
Environmental aspects:
We will not engage in development that leads to gross deforestation, or the conversion of natural forests intoplantations for forestry business.
We will not develop forests with high conservation value (HCVF), or forests with high carbon stock (HCSF) suchas in peatlands. We will work to protect endangered species and reduce the impact of our forestry business on
ecosystems. We will conduct thorough management to prevent forest fires and will not conduct any operations
which can cause forest fires. We will engage in forest conservation and reforestation.
Social aspects:
We will conduct our forestry business with consideration for human rights in accordance with the Sumitomo
Corporation Group’s Human Rights Policy.
We will respect human rights as stipulated in the “International Bill of Human Rights” and the International Labor
Organization’s “Declaration on Fundamental Principles and Rights at Work,” and we will operate in accordancewith the “United Nations Guiding Principles on Business and Human Rights.”
We will respect international norms related to the rights of indigenous peoples, such as the “United Nations
Declaration on the Rights of Indigenous Peoples” and the “principle of Free, Prior and Informed Consent (FPIC).”We will support local communities through creating employment and offering educational programs related toforests.

Operational guidelines for Forest Management Policy
Risk assessment and monitoring:
We will conduct environmental and social risk assessments in accordance with theSumitomo Corporation Group Forest Management Policy before starting any new forest
management. In addition, we will continue monitoring the status of our environmental
and social commitments after the project started.
Certification:
In addition to the above monitoring, we will make effective use of the internationallyrecognized forest management certification system for the forests managed by theGroup and promote obtaining certification.
Stakeholder dialogue:
In order to prevent global deforestation and forest degradation, we will promote thesustainable use of forest resources in society through dialogue with our stakeholders in
the regions where our forests are located. We will develop a grievance mechanism* torespond to issues raised by our stakeholders.
Disclosure:
In order to implement forest management with high level of transparency, we will strive todisclose information on our initiatives in accordance with the Sumitomo Corporation
Group Forest Management Policy.
Reviewing process of the Guidelines:
The Business Units will annually report on implementation of the policy to the Corporate
Sustainability Department. Based on the report, the Corporate Sustainability Department
will annually review the necessity of updating the Operational Guidelines. If any serious
issues arise in implementing this policy, measures and corrective action plans will bereported to the Management Council and the Board of Directors.
* A process that employees, local residents or other stakeholders can use to lodge
complaints regarding human rights violations and other issues related to enterprise’sbusiness activities including its supply chain, for resolving such issues© 2022 Sumitomo Corporation

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FeatureEnvironment
Environment

SocialGovernance

ESG
Quantitative Data

External
Recognition

Resource Utilization (Effective Use of Forest Resources)
Policy and Concept

Sumitomo Corporation Group Sourcing Policy for Forest Products
Scope of application
Logs, wood products (plywood, lumber, veneer, laminated timber), wood chips and wood pellets traded by
Sumitomo Corporation and its Consolidated subsidiaries.

GovernanceThis policy was approved by the Management Council and the Board of Directors of Sumitomo
Corporation. If any serious issues arise in implementing this policy, measures and corrective actionplans will be discussed at the Corporate Sustainability Committee and reported to the Management
Council and the Board of Directors.

Commitment

Operational guidelines for Sourcing Policy for Forest
Products
Monitoring:
In order to procure forest products in accordance with the “Sumitomo Corporation Group
Sourcing Policy for Forest Products,” we will promote the use of products that have beencertified by reliable international forest management certification systems. Additionally, we
will request detailed information from suppliers through audit activities such asquestionnaires and on-site visits.
In order to ensure compliance with the Commitment, we will conduct supplier risk
assessments and consult with non-compliant suppliers to request improvements. If noimprovement is observed, we will consider reviewing the transaction.
Stakeholder dialogue:

In accordance with the principles of zero deforestation and respect for human rights, Sumitomo Corporation will
strive together with its Group companies to source products based on this policy while cooperating with suppliersand customers.

In order to prevent global deforestation and forest degradation, we will promote theEnvironmental aspects:
We will not procure materials sourced from lands associated with destructive forest use or development whichleads to gross deforestation causing significant environmental impacts.
We will not procure materials sourced from lands associated with serious environmental issues including thedestruction of forests with high conservation value (HCVF) or high carbon stock (HCSF) such as in peatlands.
We will not procure materials produced from genetically modified wood.
We will procure in compliance with the Washington Convention to protect endangered species.

We will develop a grievance mechanism* to respond to issues raised by stakeholders.

Social aspects:
We will procure products harvested in forests where human rights are respected in accordance with the Sumitomo
Corporation Group’s Human Rights Policy.
We will respect human rights as stipulated in the “International Bill of Human Rights” and the International Labor
Organization’s “Declaration on Fundamental Principles and Rights at Work,” and we will operate in accordancewith the “United Nations Guiding Principles on Business and Human Rights.”
We will respect international norms related to the rights of indigenous peoples, such as the “United Nations
Declaration on the Rights of Indigenous Peoples” and the “principle of Free, Prior and Informed Consent (FPIC).”We will not procure materials produced from illegally logged wood.

Reviewing process of the Guidelines:

sustainable use of forest resources in society through dialogue with our stakeholders,
including suppliers and customers.

Disclosure:We will strive to disclose the status of our initiatives based on the “Sumitomo Corporation
Group Sourcing Policy for Forest Products,” including reporting on monitoring results.

The Business Units will annually report on implementation of the policy to the Corporate
Sustainability Department.
Based on the report, the Corporate Sustainability Department will annually review thenecessity of updating the Operational Guidelines.
If any serious issues arise in implementing this policy, measures and corrective actionplans will be reported to the Management Council and the Board of Directors.
* A process that employees, local residents or other stakeholders can use to lodge
complaints regarding human rights violations and other issues related to enterprise’sbusiness activities including its supply chain, for resolving such issues© 2022 Sumitomo Corporation

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FeatureEnvironment
Environment

SocialESG
Quantitative Data

Governance

External
Recognition

Resource Utilization (Effective Use of Forest Resources)
Activities

Results
We are selling the certified log, certified wood products and wood chips from║ Business Description

forests owned by the Sumitomo Corporation Group in Russia (OAONew Zealand Timber Business

Terneyles) and New Zealand (Summit Forests New Zealand).

In New Zealand, a sustainable supply of timber resources is provided in a 30-year cycle through aharmonious arrangement with local communities under the environmentally friendly forest management
system of planting trees, growing them, cutting them down, and replanting them. In the approximately
52,000 hectares of forest owned by Summit Forests New Zealand, besides protecting water resources

FY2021 Results
Certified log (Russian)

145 thousand m3

Certified log (New Zealand)

234 thousand m3

and primeval forests and co-existing in harmony with thewildlife, the company has also forged friendly relationships

Certified wood products(Russian)with the indigenous Maori people in the course of runningits business. Moreover, most of the company’s forest
holdings are FSC ® -certified, which offers objective proof

56 thousand m3

Veneer

185 thousand m3

Softwood laminated lumber

24 thousand m3

Hardwood lumber/laminatedlumber

4 thousand m3

Wood chips (Russian)that the company is managing the forest appropriately.

Russia Timber Business

Softwood lumber

Forest owned by SFN

In 2004, to be certified that we manage forests appropriately with consideration for the environment
and local communities based on objective evaluation, OAO Terneyles obtained FSC® Certification*1,
an international standard, for part of 2.87 million hectares of the forest area in the Russian Far East.
After receiving FSC-FM certification*2 in 2004 as the first company in the Russian Far East, Terneyles
made improvements one by one to meet the requirements for the FSC-CoC (Chain-of-Custody)
certification*3. In 2011, the company successfully acquired the certification for all of its products, from78 thousand BDT*1 FSC® Certification: a global forest certification system provided by FSC（Forest Stewardship Council®)*2 FSC-FM (Forest Management) Certification: confirms that the forest is
managed in a proper way.
*3 FSC-CoC (Chain-of-Custody) Certification (the management of processing anddistribution processes): verifies that FSC® certified material is identified or kept
separated from non-certified material throughout the chain.

round wood to lumber, laminated timber, veneer, and woodchips. Sumitomo Corporation also received
the FSC-CoC certification, and the supply chain for providing customers with FSC ® -certified products
from raw materials logged by Terneyles was completed.
<Notes>Currently we do not trade FSC certified Russian wood products as FSC has suspended all trading
certificates in Russia. The Russia-related business described in the ESG Communication Book 2022 is based on
the period from January to December 2021.
© 2022 Sumitomo Corporation

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FeatureEnvironment
Environment

SocialESG
Quantitative Data

Governance

External
Recognition

Resource Utilization (Recycling and Circulation Business)
Policy and Concept

Activities

A variety of issues that threaten the sustainability ofsociety have been brought to the fore, such as the║ Business Description

growing

Tomra Japan: Creating and Deploying a PET bottle Recycling System in Which Consumers Take Part Actively

world

population

and

the

associatedincreases in demand for resources and energy and in
the volume of waste. Rather than continuingtheconventional practices of mass production,
mass consumption and mass disposal, building
circular economy systems through recycling, reuse,
reproduction, resource-saving product development,
and sharing, and reducing dependence on natural
resources are important for

maintaining social

sustainability.
The

Group

resources
sustainable

will make effective use of limited

andcontributeresource

resource-saving

to

the

realizationofrecyclingbyswitchingtotechnologies

andproducts,

working on sustainable procurement ofandnaturalReducing the usage of plastic resources while ensuring its effective consumption - importance of this issue is increasing year by
year as a measure for addressing global environmental issues, such as marine litter and global warming. In this context, importanceof resource recovery system is increasing, to materialize and enhance sustainable resource recycling. Tomra Japan is a joint
venture between TOMRA Systems ASA (Norway) and our company. In addition to selling equipment such as reverse vending
machines (RVMs) for the efficient collection of used PET bottle, we have also created and deployed a recycling system whereby wecollect PET bottles from RVMs installed at supermarkets as well as convenience stores and deliver them to recyclers. RVMs only
collect PET bottles after their caps and labels are removed by the consumers, this enables us to collect high-quality resources withfewer impurities. Through the supply of high-quality recovered resources, Tomra Japan has been contributing to horizontal recycling,in which fresh PET bottles are made from used PET bottles. In addition to such activities, in 2021 the company launched a new
brand named “bottlium” with the aim to contribute to the recycling of PET bottles into polyester clothing. By recycling PET bottles
into clothing that can be repeatedly washed, continuing the horizontal recycling of PET bottles, and encouraging consumers toactively take part in collecting and recycling higher-quality resources in an efficient manner, Tomra Japan will continue to contributeto the reduction of environmental burden and the development of a recycling-based society.

resources.

Official Brand Web Site

Circulation recycling system with RVM as a platform© 2022 Sumitomo Corporation

Reverse Vending
Machine“bottlium” – New brand of recycled PET bottle by
Tomra Japan. Made from the high-quality
resources (used PET bottles) collected by Tomra
Japan, through chemical agent-free aqueous
cleaning process.
The highest quality expands the possibilities forvarious applications such as hollow fibers.
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FeatureEnvironment

SocialSocialGovernance

ESG
Quantitative Data

External
Recognition

Human Rights
Policy and Concept
In May 2020, we established the "Sumitomo Corporation Group’s Human Rights Policy" that represents our commitment to respect human rights through human rights due
diligence, stakeholder engagement, education and so on, in order to fulfil our corporate social responsibility and to grow sustainably with society.

Sumitomo Corporation Group’s Human Rights Policy
Sumitomo Corporation declares in its management principles that it aims to be a global organization that contributes broadly to society and places prime importance on utmost respect for theindividual. We will respect human rights to fulfill our corporate social responsibility, and pursue sustainable growth with society.
Sumitomo Corporation became a signatory in 2009 to the “Ten Principles of the United Nations Global Compact”, which advocates for values common to its own management principles,
including those regarding human rights and labor. We also respect the “International Bill of Human Rights” and the International Labor Organization’s “Declaration on Fundamental Principles
and Rights at Work”, and we operate in accordance with the “United Nations Guiding Principles on Business and Human Rights”.
1. Scope of application
Sumitomo Corporation endeavors to ensure that all executives and employees within its group fulfill their responsibility to respect human rights. In addition, we encourage our suppliers andbusiness partners to accept, understand and practice this policy so that we can work together to fulfill our social responsibilities, including respect for human rights in the relevant value chain.
2. Human rights due diligence
Sumitomo Corporation strives to identify and to prevent or mitigate any adverse impact on human rights through the application of human rights due diligence processes. Where we identify thatour group’s practices have caused or contributed to an adverse impact on human rights, we will endeavor to take appropriate remedial measures.
3. Compliance with relevant laws
Sumitomo Corporation will comply with national and regional laws and regulations applicable to its group operations. When those laws and regulations are incompatible with internationallyrecognized human rights, we will seek to employ measures to respect international human rights norms.
4. Stakeholder engagement
Sumitomo Corporation will seek to improve and progress human rights measures through engagement and dialogue with relevant stakeholders.
5. Education
Sumitomo Corporation will appropriately educate its executives and employees within its group in order to ensure that this human rights policy is understood and implemented effectively.
6. Reporting
Sumitomo Corporation will disclose appropriate information regarding its efforts to respect human rights.

© 2022 Sumitomo Corporation

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FeatureEnvironment

SocialSocialESG
Quantitative Data

Governance

External
Recognition

Human Rights▌ Human Rights Due Diligence
In accordance with the Sumitomo Corporation Group Human Rights Policy, Sumitomo Corporation began human rights due diligence in 2020 so that we can identify, prevent, and correct how weaddress any adverse human rights impact that the Group business activities may cause or contribute to. As a first step in FY2020, we identified salient human rights issues that should be addressedwith priority so that we can assess impacts and risks concerning human rights throughout the Group. In FY2021, we expanded applicability of our human rights due diligence to all our businesses
according to our medium-term goal of “Strengthen risk analysis in human rights due diligence to accurately assess risks in all businesses, including the supply chain, and implement risk mitigation
measures by 2025.” In order to pursue this goal, we started our human rights due diligence by business unit, and in the first year FY2021, we conducted it for the Media & Digital Business Unit andLiving Related & Real Estate Business Unit and identified and assessed human rights risks in all related Strategic Business Units (SBUs). Our human rights due diligence is conducted through aprocess in accordance with international guidelines including the United Nations Guiding Principles on Business and Human Rights, United Nations Guiding Principles Reporting Framework, andOECD Due Diligence Guidance for Responsible Business Conduct.
<Process of Human Rights Due Diligence in Business Units>
After conducting a desktop survey in which we identified human rights issues mainly

Identification
Identification ofof Eight
Eight Salient
Salient Human
Human
RightsRights Issues
Issuesbut not limited to our eight main salient human rights issues and referred to theexamples of human rights risks which actually occurred in global business activities ofourselves or other companies. We started conducting human rights due diligence for
the Media & Digital Business Unit and Living Related & Real Estate Business Unit
which are considered to have a relatively higher human rights risk than otherbusiness units.
Interviewing all related SBUs of both business units with the support from outside

Identification
Identification andand Assessment
Assessment ofof Human
Human
RightsRisks
inBusiness
Units
Rights Risks in Business Units

Desktop surveys
・ Desktop surveys
・ Discussions with exerts on business and human rights
・ Discussions with exerts on business and human rights
・ Interviews with all SBUs of each business unit
・ Interviews with all SBUs of each business unit
→ Identification of businesses which need to be→ Identification of businesses which need to be prioritizedprioritizedexperts, we confirmed the situation in each business and actual human rights risks
including the impact on stakeholders, such as local residents and others related tothe supply chain and business activities of each business. Besides, we identified
potential risks that could be anticipated and discussed the status of any responses
being taken. In light of these findings, and from the perspectives of the possibility tomaterialize human rights risks which we identified and their severity if materialized,
we prioritized SBUs, or individual businesses within SBUs, to focus on. With thecooperation of the Corporate Sustainability Department and relevant SBUs and group

Labor conditions

Health and safetyof local residents

Freedom of associationand the right tocollective bargaining

Land rights

Forced laborand child labor

Discriminationand harassment

Occupational
health and safety

Personal information
PrivacyPrevention and Mitigation of Human
Rights Risks

・ Incorporation in the risk management systems of each
SBU/business

Reassessment of Human Rights Risks

・ Reassessment in light of the effect of human rights risk
prevention and mitigation measures taken

Follow-Up and Monitoring
・Assessment of initiatives concerning human rights

companies, we are now considering and implementing concrete measures to preventor mitigate the identified human rights risks.
We will identify and assess human rights risks in other business units as well, andimplement measures to prevent or mitigate those human rights risks in each SBU.
Through ongoing monitoring of each, we will also implement the plan-do-check-act(PDCA) cycle to identify new initiatives.

© 2022 Sumitomo Corporation

Information Disclosure

・Periodic disclosure of initiatives concerning human rights
and their effects* Promotion of human rights due diligence in SBUs and businesses other than that conducted
through the above human rights due diligence58

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FeatureEnvironment

SocialSocialGovernance

ESG
Quantitative Data

External
Recognition

Human Rights▌ Human Rights Due Diligence
In all SBUs of the Media & Digital Business Unit and Living Related & Real Estate Business Unit, we identified and assessed actual and potential human rights risks, and confirmed that concrete
initiatives, such as supplier surveys and improvement activities, have been commenced for human rights risks of concern associated with the nature of the business (product or region, etc.) Startingfrom SBUs and businesses identified through discussions as being high risk in terms of human rights, we will consider and implement countermeasures and promote improvements. Through thisprocess, we are again promoting, to officers and employees of the Sumitomo Corporation Group, the understanding and entrenchment of the company’s responsibility to respect human rights. We arealso driving concrete initiatives for human rights education according to the UN Guiding on Business and Human Rights Principles, and we developed a training program for all officers and employees
in FY2021.

Eight Salient Human Rights Issues
in the Group’s business〈Media & Digital Business Unit〉

Main human rights issues
Labor conditions,

Identified actual and potential risksDiscriminatory statements and expressions may be included in the video









(AI and data）© 2022 Sumitomo Corporation



Health and safetyof local residents

Land rights

Discriminationand harassment

Personal information
Privacy

To establish human rights policies and procurement policies and publicize to suppliers.

To consider risk prevention and mitigation measures, such as warning related staffs andConfirmed that each business has been aware of the risks and has been working
thoroughly to ensure legal compliance.

infringement of the right to know and freedom of expression by shuttingof expression
New human rights issues

The overseas telecommunications business is subject to the risk of

Occupational
health and safety

introducing education programs for them.

marketing business..

Privacy
The right to know and freedom

Personal information leaks and privacy violations especially in digital

Forced laborand child labor

To understand actual human right situation of supply chain.

distribution, entertainment content and advertisements.

Personal information

Freedom of associationand the right tocollective bargaining

Assessment and countermeasuresand subcontractors.

Forced labor and child labor
Discrimination and harassment

Concern about human rights issues in supply chain: indirect suppliers

Labor condition

To continue initiatives to contribute to respect for human rights in the Myanmar
telecommunications business based on human rights assessments.

down or interception of communications.


Discrimination or privacy violations may occur through the use of data or

To conduct survey and case studies on the trends of legal and governance.

algorithms.

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FeatureEnvironment

SocialSocialGovernance

ESG
Quantitative Data

External
Recognition

Human Rights
Eight Salient Human Rights Issues
in the Group’s business▌ Human Rights Due Diligence〈Living Related & Real Estate Business Unit〉
Main human rights
issuesLabor conditions(wages and working
hours),
Occupational
health and safety
Freedom of
associationand the right tocollective bargaining

Labor condition

Freedom of associationand the right tocollective bargaining

Forced laborand child labor

Occupational
health and safety

Health and safetyof local residents

Land rights

Discriminationand harassment

Personal information
Privacy

Identified actual and potential risks

In the real estate related business, attention must be paid to labor conditions andAssessment and countermeasures


Room to further consider broad communication of human rights and procurement policies

occupational health and safety of not only to parties contracting directly with ourwhen in discussions or contracting with construction contractors and other subcontracting

company but also of parties related to the supply chain, including construction

business partners.

contractors and property-owning management contractors.


It is important to establish mechanisms for obtaining feedback from workers,Confirm that initiatives are being implemented to develop human rights due diligence

including employees on agricultural land, in respect to the freedom of association

processes, including interviews with employees, and to establish and publicize contact

and right to collective bargaining.

points for listening to the opinions of workers and other stakeholders.

Forced labor and childSome domestic businesses are employing foreign technical trainees.

labor



The food distribution business must be on the lookout for forced labor and childthe foreign technical trainees and to preventing adverse impacts on the workers in terms

labor upstream (agricultural land) in the supply chain.

of labor conditions and occupational health and safety. Going forward, continue efforts toConfirm that consideration is being given to understanding the employment situation ofmaintain and improve the working environment through regular discussions with theinterns themselves.


Confirm that initiatives are being implemented to investigate and improve the situation
after risks are materialized, and to identify and investigate supply chains with a highpotential risk.

Land rights,
Health and safety

In the real estate related business, preparations must be made for situations that
impact land rights and the day-to-day lives of local residents.

Confirm legal compliance and briefings/discussions with local governments andcommunities.

of local residents＜Future Initiatives＞
We will continue these initiatives in FY2022 and thereafter, while identifying and assessing human rights risks in other business units as well. Starting from high-risk businesses identified through thisprocess, we will consider and carry out concrete action plans to prevent and mitigate risks. We will continue to monitor the progress of implementation of the action plan and endeavor to disclose of
the results and other information. On top of the human rights due diligence, we will continue other efforts, including internal awareness raising activities through the human rights education program
which we developed in FY2021 for all officers and employees, dialogue with stakeholders, and information disclosures.

© 2022 Sumitomo Corporation

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Quantitative Data

Governance

External
Recognition

Human Rights
Activities〈Discrimination and harassment〉• See P.71 for information on harassment training.
• See P.106 for information on the Speak-Up System.
〈Personal information and privacy〉• See P.110 for information on Information Security Policy and internal education.

Regarding a grievance mechanism, Fyffes has already implemented a global,
independent grievance mechanism, available in the language of our employees via
telephone or online since April 2019. In accordance with the mitigation plan, it wasagreed to run a broader campaign internally to make sure that all employees were awareof the hotline. Fyffes does not tolerate any forced labor nor migrant human rights║ Business Description
Human Rights Initiatives at Fyffes

violations and continues to conduct and participate in internal and third-party ethical andsocial audits, including Sedex Members Ethical Trade Audit (SMETA) audits throughout

Fyffes, one of our group companies and, one of the world’s leading companies in thea large proportion of its supply chain, such as Fyffes owned farms, various grower

production and wholesaling of fresh produce, completed its first ever corporate-wide

partners and ripening facilities. In the UK, Fyffes Group Ltd has regular audits on its

Human Rights Impact Assessment in January 2020, through its partner BSR. The humanlabor providers and investigates any signs of forced labor, e.g. retention of passports etc.

rights impact assessment was conducted through reviews of existing Fyffes policies andFyffes has formed a Human Rights Core Team and they are responsible forprocedures and interviews with internal and external relevant stakeholders, including

implementing 11 mitigation measures to address the 13 salient human rights risks.

NGOs, employees and customers. In addition, Fyffes chose five countries to do an in-

Fyffes has committed to conducting a human rights impact assessment annually with an

depth analysis – Belize, Colombia, Costa Rica, the Dominican Republic, and Honduras.

independent consultant every third year. In January 2022, Fyffes published its first

The countries were chosen due to their importance to Fyffes as well as their potential risk

Human Rights Report, way ahead of its competitors and the vast majority of its

profile. The Assessment highlights the 13 most relevant human rights risks for Fyffes, andcustomers.

Fyffes Global Sustainability Steering Committee has endorsed the Company’s Human

In 2021, Fyffes published its first Sustainability Report. The report shared its13 ambitious

Rights Mitigation and Management Plansustainability targets under the four focus areas "Stewardship for the Planet,"

which provides a framework to manage,"Enriching People’s Lives," "Healthy Food for

mitigate and help resolve identified risks.

Healthy Lives," and "Fyffes Principles of

Out of 13 identified human rights risks,

Responsible

3 priority areas emerged from Fyffes

sustainability targets are aligned to eight

analysis

Unitedfor

its

immediateaction:Business

Nations

Conduct.“

Sustainable

FyffesDevelopment“access to a grievance mechanism,”

Goals and include six targets relating to“child labor” and “migrant worker laborhuman right, including a commitment to train

violations and forced labor”.

100% of its employees, contractors and supply
chain workers on human rights.

© 2022 Sumitomo Corporation

Sustainability Report

Human rights Report

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Human Rights
Activities║ Business Description║ Business Description

Supplier Management in the Foods Business

Black Economic Empowerment Act in South Africa

We also urge suppliers and other trading partners as well as business partners to take action inorder to promote respect for human rights throughout entire value chains related to Sumitomo
Corporation Group businesses. As a specialized food and food products trading company that is
involved in all processes from product development to selection of production areas in regions
around the world, procurement of ingredients, production and processing management, logistics,
and domestic distribution, SC Foods Co., Ltd. conducts supply chain management so that it can
provide safe, reassuring, and high-quality products that take into consideration sustainability
including respect for human rights. When selecting new suppliers, SC Foods conducts data surveys,
and when determined to be necessary, also performs on-site visits. With regard to existing
suppliers, more detailed questionnaire surveys are conducted of suppliers of products such as
coffee, sugar, and sesame seed from certain countries with high human rights risks to confirm that
there are no issues. To strengthen these management cycles even further, SC Foods introduced asystem of implementing on-site inspections once every five years, even with respect to existing
suppliers in 2019. During the COVID-19 pandemic, it has been difficult to conduct on-site
inspections, so SC Foods have initiated investigate alternate methods such as remote inspections.
See P.65 for information on acquisition of certification.

Human Rights Audit Implemented at Thailand Chicken Processing Plants
In March 2019, with the appointment of external experts, Sumitomo Corporation implemented ahuman rights audit at three chicken processing plants operated by Thai business partners. Cases
have come to light in Thailand of infringement of the human rights of foreign workers in laborintensive industries such as poultry rearing, seafood processing, and garment manufacture. We
make periodic visits to the processing plants of its business partners to check that regulations onhuman rights and other areas are stringently observed. This audit was carried out with particularfocus on the work environment of foreign employees.
The audit team visited the plant and the employees’ dormitory to check for forced overtime working,confiscation of identification documents, and labor health and safety issues, which are cited ascommon human rights risks in the poultry industry. In addition, employees of non-Thai nationality
from Cambodia, Myanmar, and other countries were randomly selected for interview. The audit
found no human rights issues relating to foreign workers at any of the three locations and theprocessing plants demonstrated proactive communication with us and a strong commitment tofurther improvement of operations.
To fulfill its social responsibility in the supply chain, Sumitomo Corporation Group will continue toaddress human rights issues in its relationships with important suppliers and to carry out audits,taking account of local conditions and industry practices in those countries and regions withconcerns over human rights risk.

© 2022 Sumitomo Corporation

Due to the history of apartheid in South Africa, there are policies that aim to reduce inequality inrights and opportunities for black people to participate in economic activities and to improve theirsocial status. It is required to include at least a certain number of black companies in a businessproject and to give back part of the profits to the community.
To comply with such policies, Dorper Wind Farm company, in which we invest, offers cooperation in
improving the living environment of local residents and creating new jobs. Specific efforts include
donation of equipment and refurbishment of buildings at kindergartens, schools and hospitals
located close to the power plant, and support to restaurants operated by black women. Throughthese activities, we appoint local companies where possible. A portion of the shares of Dorper Wind
Farm company are owned by local sponsors run by local residents and dividends distributed tosuch sponsors are used for various projects that meet the needs of local residents.

Dialogue with Local Residents in Mining Projects
In promoting resource development projects, understanding of local areas is essential. In thedevelopment project of the Ambatovy nickel mine in Madagascar, we have taken the initiative inhaving dialogues with the government and local residents, in cooperation with the diplomatic corps
and lending banks group since the start of the development. We use these dialogues to share ourbelief that “this project is extremely important to the future of Madagascarˮ and deepen the mutual
understanding of the significance of the project. In the Ambatovy project, we also promote theemployment of people in Madagascar and improve their skills. In FY2021, 93% of all workers are
Madagascar people, and we are systematically working on technology transfer and humanresource development for them. We have a complaint system to receive any kind of complaints,
including human rights violations, in cooperation with local communities, in order to prevent
accidents associated with the project and address them
if they occur. Employees and external stakeholders are
eligible to access this system. Project staff
appropriately respond to complaints while protecting
personal information. Since 2016, the Ambatovy project
has joined the Voluntary Principles on Security and
Human Rights (VPSHR) program in partnership with
NGOs, the Madagascar government and othercountries' embassies.
An elementary school built within the project site

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活動▌ Respect for the Rights of Children▌ Sumitomo Corporation Group Statement for
UK Modern Slavery Act 2015

As the world population is mostly made up of children and younger generations, theWe set out the steps Sumitomo Corporation Group has taken to help ensure that modern

Sumitomo Corporation Group is aware that its corporate activities have an impact on the lives

slavery and human trafficking are not taking place in SC Group's business or supply chains.

of children both directly and indirectly. For companies, children are family members of

The statement is approved by the board of directors of Sumitomo Corporation as the parent

employees, as well as important stakeholders who will play future roles in the sustainable

company of Sumitomo Corporation Group.

development of society. Based on this recognition, we signed the United Nations Global
Compact in its support of the Ten Principles, and respect Children’s Rights and Business
Principles. We are committed to preventing the violation of children’s rights through ourStatement for UK Modern Slavery Act 2015

▌ Training Seminars on Human Rights

business and social contribution activities.

Sumitomo Corporation Group’s business activities cover a wide range of countries, regions and▌ Respect for the Rights of Indigenous Peoples

suppliers, customers and business partners, instead of acting alone, in promoting the entire

industrial fields. We therefore consider that it is necessary for the Group to cooperate with

As part of its commitment to respect human rights, the Sumitomo Corporation Group respects

supply chain to promote CSR throughout the entire supply chain. Since FY2014, we have held

global standards pertaining to the rights of indigenous peoples, including the United Nations

seminars with external experts and e-learning on human rights issues that need special

Declaration on the Rights of Indigenous Peoples, and the principle of “free, prior and informed

attention in business activities. The seminars cover a wide range of topics, including theconsent (FPIC).” In business operations in areas where indigenous peoples reside, we

relationship between companies and human rights issues, actual cases of reputational risks

recognize their unique culture and history and comply with applicable laws and regulations offrom human rights and how to assess the influence of human rights. Comments from seminareach country or region.

participants include “Since the Group is engaged in diverse business activities all around the▌ Concept Concerning the Use of Security Companies

can better understand relevant issues”.

In the operation of its business in countries around the globe, the Sumitomo Corporationworld, we should continue awareness-raising activities so that as many employees as possible

Group uses security companies to protect the safety and security of its employees. When

▌ Establishment of Sustainability Consultation Desk

necessary, we may use armed security personnel, recognizing the human rights risks involved

We opened a consultation desk in our website to receive any opinions or requests onand complying with laws and regulations of the countries in which we operate. We selectsecurity companies in accordance with the Voluntary Principles on Security and Human
Rights and the Basic Principles on the Use of Force and Firearms by Law Enforcement
Officials.

⇒ For more information on social and environmental risk management, see P.108, 109.
We have put in place a companywide framework to apply when starting new businesses,
including review and periodic monitoring, in order to appropriately manage the social andsustainability-related issues such as human rights or environment from our stakeholders. Any
opinions or requests will be promptly shared internally through Corporate Sustainability
Department that specializes in addressing sustainability-related issues, and necessary actions
will be taken to resolve issues. As set forth in the mid-term goals of key social issues, having
risk assessments through human rights due diligence and sustainability-related comments fromour stakeholders, we are aiming to establish a more effective grievance mechanism for our
stakeholders.

Sustainability Contact Formenvironmental impacts including human rights.
© 2022 Sumitomo Corporation

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Supply Chain
Activities

Policy and Concept
活動
The Sumitomo Corporation Group is engaged in globally-oriented business in a wide range of fields. It is our responsibility to appropriately manage
impacts caused by our business activities, including extensive supply chains, on society and environment. The Sumitomo Corporation Group has
established the CSR Action Guidelines for Supply Chain Management. Through the implementation of these guidelines, we are aiming to realize asustainable society by working together with our suppliers and business partners to achieve responsible value chain management. The Company
provides numerous opportunities to promote the understanding and entrenchment of these guidelines, including training for new employees and locally
hired employees, meetings within business units and domestic and overseas regional organizations, and pre-departure briefings with employees being
sent on overseas assignments in order to promote sustainable supply chain management. In the event that we find violations of these guidelines in our
supply chains, we will urge the suppliers, business partners or contractors, etc. to remedy and improve the situation, while providing support to them as
needed. However, if there are no improvements to the situation by them, we will consider carefully whether to continue our business with them or not.

▌ Supplier Management
In monitoring social and environmental
risks in each business, we confirm thestatus of supplier management based onthe "Sumitomo Corporation Group CSR
Action Guidelines for Supply Chains”▌ Conflict Minerals Policy

7. Ensure the quality and safety of products and services

The Dodd-Frank Act, which was enacted inJuly 2010, requires US-listed companies totrace the country of origin of minerals usedin their products within their supply chainsto determine whether or not "conflictminerals“* produced in and around the
Democratic Republic of the Congo areincluded. The results must be reported
annually to the U.S. Securities andExchange
Commission
(SEC)
and
disclosed on their websites. Such reporting
is not mandatory for the Sumitomo
Corporation Group itself because it is not
US listed. However, if it is revealed that a
conflict mineral is used by our partnercompany, our reputation could be harmed
and it may affect customer selections. We
therefore gather relevant information
regularly and managed it unitarily.

8. Ensure fair business transactions, to abide by all applicable laws, rules and regulations, and to prevent extortion, bribery and all other formsof corrupt business practices
9. Ensure appropriate information security* The Dodd-Frank Act defines conflictminerals as tin, tantalum, tungsten and gold.

The Sumitomo Corporation Group CSR Action Guidelines for Supply Chain Management
The Sumitomo Corporation Group aims to be a global organization that, by constantly staying a step ahead in dealing with change, creating new value,and contributing broadly to society, strives to achieve prosperity and realize the dreams of all our stakeholders through sound business activities in strict
adherence to our Corporate Mission Statement, and the management style principle contained therein, wherein prime importance is given to integrity
and sound management with the utmost respect being paid to the individual.
In order to promote sustainability and social wellbeing in accordance with our mission, the Sumitomo Corporation Group hereby sets down these CSR
Action Guidelines for Supply Chain Management. With a view to further strengthening the global relations which form one of the foundations of our corecompetence of integrated corporate strength, we request our suppliers and business partners to kindly accept, understand, and practice theseguidelines so that together we can achieve responsible value chain management.
Our suppliers and business partners are expected to:
1. Respect human rights and not to be complicit in human rights abuses
2. Prevent forced labor, child labor and the payment of unfairly low wages
3. Not engage in discriminatory employment practices
4. Respect the rights of employees to associate freely in order to ensure open and fair negotiations between labor and management
5. Provide employees with safe and healthy work environments
6. Protect the global environment and give due consideration to biodiversity

10. Cooperate with members of local host communities and contribute to sustainable regional development
11. Disclose information regarding the above in a manner both timely and appropriate.
© 2022 Sumitomo Corporation

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Supply Chain<Notes>Currently we do not trade FSC certified Russian wood products as FSC has suspended all trading certificates in
Russia. The Russia-related business described in the ESG Communication Book 2022 is based on the period fromJanuary to December 2021.

Certification
活動║ Business Description║ Business Description

Measures Taken through Sustainable Supply Chain Certification

Measures Taken in the Chemical and Electronics Industries
Sumitomo Shoji Chemicals Co., Ltd. is mainly engaged in trading business of chemical and

RSPO: Roundtable on Sustainable Palm Oilelectronic products, which are involved in various industries and have a multitude of

We became an ordinary member of the RSPO in 2019. Further, ourconsolidated subsidiaries SC Foods Co., Ltd. And Summit Oil Mill Co.,
Ltd. obtained RSPO supply chain certification in 2021.

applications. Before starting business transactions, the company confirms that each2-1036-19-100-00

FSC® : Forest Stewardship Council

supplier of raw materials does not use conflict minerals, which are key funding sources for
local armed groups, and appropriately manages chemical substances contained in theirproducts in line with customer's demands, to make sure that no issues related to the

We obtain FSC® -CoC certification, an international forest

environment and human rights have been reported. Sumitomo Shoji Chemicals is amanagement certification system, and provide customers withmember of Sedex, a nonprofit membership providing a world’s largest platform to manage

FSC® -certified products mainly from our group-companies.

and share ethical organization data within supply chains, with the aim of ensuring ethicaland responsible business practices in global supply chains. The company has also passed

PEFC™：Program for the Endorsement of Forest Certification Schemes
We obtain PEFC™ CoC certification, an international forest management.
SBP: Sustainable Biomass Program
In September 2019, we became the first Japanese company
to obtain SBP certification for CoC (Chain-of-Custody) andCollection and Communication of data. SBP is a certification
system providing assurance that woody biomass used inenergy production is sourced from legal and sustainablesources.
ISCC PLUS：International Sustainability & Carbon Certification PLUS
We obtain ISCC PLUS, an international certification for bio-based products. This allows
us to trade ISCC certified products.

the human rights and environmental audit of Sedex. Sumitomo Shoji Chemicals agrees on
the Green Partner Environmental Quality Approval Program of its clients, whose objectives
include the promotion of environmental protection. It also requires its suppliers of raw
materials to agree on a green procurement program and other relevant programs and tocomply with environment-related laws and regulations, and follows their implementation.

║ Business Description
Expression of Support for UN Food Systems Summit
Sumitomo Corporation expressed its support for the United Nations Food Systems
Summit (FSS), declaring that it will contribute to global sustainable food systems througha range of food and agricultural businesses conducted by the Sumitomo Corporation
Group. The FSS, held in September 2021 in New York, was the first international forum
having discussions on the sustainability of food systems as a global common agenda and

ASI：Aluminium Stewardship Initiative
We are a member of the Aluminium Stewardship Initiative (ASI), the global aluminium

setting a vision for the future. The summit was being held based on the belief of UN

industry organization. As an active participant in trading aluminium materials and products

would be crucial for delivering the Sustainable Development Goals (SDGs).

globally, we support ASI activities and standards across the global aluminium value chain.

© 2022 Sumitomo Corporation

Secretary-General Antonio Guterres that transformation to sustainable food systems
Our commitment

Ministry of Agriculture, Forestry and Fisheries
FSS related websites (Japanese language only)
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HR Management: Overview of the HR Management Cycle
Policy and Concept▌ HR Initiatives Centered around the Global HR
Management Policy
The systems and environment surrounding employment are changing
rapidly. In Japan, a major shift is taking place in the individual’s view
about work from career advancement within a particular company
based on lifetime employment to realizing a career and personal
growth matching their own preferences.
In response to these changes, we have set forth a vision for
employees (SC People) and companies (SC Organization) in a new
era within our Global HR Management Policy. Based on the conceptsof expanding top-tier professionals, implementing thorough “Pay for
Job, Pay for Performance,” and enhancing people management skills,
we are striving to establish a work environment and workplace culture
to serve as a foundation for growth and to improve the HR
management cycle of recruitment, development, right talent to the rightassignments, performance management, and fair treatment.
Our vision for individuals and organizations is to provide a place where
highly motivated talent can realize autonomous growth and selfactualization and for their passion in taking on challenges to become
the driving force for organizational growth and value creation, with thatcycle, in turn, attracting further top-tier professionals to enrich ourreservoir of human capital.
The roughly 74,000 people that make up the Group’s diverse humanresources will drive the creation of new value, maximizing theperformance of SC People and SC Organization to achieve that vision.

© 2022 Sumitomo Corporation

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HR Management: Global HR Management
Policy and Concept▌ Global HR Management Policy
Sumitomo Corporation established the Sumitomo Corporation Group’s Global HR

In addition, to promote D&I in accordance with this policy, we are reinforcing HR management

Management Policy in September 2020. This policy sets forth the vision and concept of HR

under the Medium-Term Management Plan “SHIFT 2023” by implementing various measuresmanagement on a global basis for the creation of new value. It is used as the foundation forin both Japan and overseas offices according to the local D&I context.

each HR initiative.

To survive this revolutionary era where business is becoming more diverse and challenging ona global scale, it is essential to effectively use a mixture of diverse wisdom from diverse
individuals to improve our competitiveness. With a focus on the diversity of our global talent,▌ What We Aim for
Based on this policy, we seek to increase talent throughout the Group who can create newvalue on a global scale, sharing the Group’s vision and mission, and maintaining highaspirations and a continuous intrinsic motivation with Enterprising Spirit. We also aim tobuild a “Great Place to Work” on a global scale, where individuals continuously andpassionately create new value. We aim to be an organization recognized for nurturing talentthat continuously take on new challenges throughout the world.

▌ Promotion of Diversity & Inclusion (D&I)
The business environment surrounding the Sumitomo Corporation Group has been rapidlychanging and the regions and business fields in where we operate, as well as businessmodels have also been rapidly diversified. For us to address such changes and continue todevelop in a sustainable way, it is essential to put D&I as one of the cores of ourmanagement strategy.
Based on the understanding of this environment, the Sumitomo Corporation Group positions
D&I as a “Source of value creation, innovation and competitiveness” in its Global HR
Management Policy and seeks to eliminate all barriers that impede D&I and leverage themix of diverse wisdom to achieve our vision.

© 2022 Sumitomo Corporation

especially on the individual’s strengths, we will combine our forces to further accelerate ourgrowth strategies. As a basis for achieving this, the concept of inclusion, in other words,
creating an atmosphere that recognizes, respects, and accepts the individual’s uniquenessplays a key role. . It is essential that we practice inclusion and make effective use of ourdifferences as a source of competitiveness.
Simply focusing on surface level diversity and eliminating systems and mechanisms that
impede inclusion based on nationality, gender, age, sexual orientation, gender identity and soon, is not enough. We believe that it is also important to focus on deep level diversity that
includes different opinions, ideas, values, abilities, skills and experiences, and the eliminationof unconscious bias based on psychological barriers. We will respect the differences
mentioned above and aim to set a direction through mutual contribution of wisdom andthorough discussions among a diverse team with shared aspiration, principles, and vision, andfollow through by taking action through the cooperation of all employees.
In promoting the growth strategy of the Group, it is necessary to promote the right talent to theright assignments on a global basis, to strategically develop talent and organization, and tonurture a culture and awareness within the Group to support these points, also taking into
consideration deep level diversity. Under the common vision set forth in the Global HR
Management Policy, we will collaborate with the overseas organizations to pursue D&I in theGroup on a global consolidated basis.

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HR Management: Recruiting
Policy and Concept▌ Basic Policy on Recruiting
As a company that engages in global business, Sumitomo Corporation Group requires humanresources who are attuned to our businesses and principles, have high aspirations and acontinuous intrinsic motivation with Enterprising Spirit, and a willingness to create new value on
a global scale. Our basic policy is to conduct fair and equitable recruitment that respects
fundamental human rights without discrimination, and hires employees based on theprofessionalism, abilities, experience, potential, and aspirations of applicants regardless of■ Internships for University and Graduate Students
We offer internships to university and graduate students every year to have them experience thebusiness of an integrated trading company and to provide an opportunity to support thedevelopment of their career views. In FY2021, we conducted a three-day online program, using
Sumitomo Corporation’s distribution facility operation as the subject, providing an experiencesimilar to that of the actual business. Participants were able to experience the process of bringing
a business into reality, and through this process also develop their career views as well as deepen

nationality, gender, age and other attributes. In addition to hiring new graduates, we actively

an understanding of the process of new value creation.

recruit mid-career human resources talent hires and flexibly recruit other talented individuals〈Number of Past Participants〉

throughout the year in line alignment with our management and business strategies.

Activities▌ Basic Measures Relating to Recruiting: Internships
We hold various seminars relating to recruitment and create numerous opportunities to support
the career development of post and undergraduate students.
■ Next Leaders' CampWe are holding Next Leaders’ Camp as a program that supports development of the career
views of students. With the aim of offering true career education that goes beyond justrecruitment activities, the program helps to resolve the questions and concerns that students
may have when considering their careers. The Next Leaders’ Camp includes a “Global
Program” and a “Sustainability Program”. The “Sustainability Program”, for example, offers
lectures on the social context of demands for sustainability and actual business analysis usingcase studies from our company. Its aim is to deepen the participant’s understanding of the role

FY2019: 190 / FY2020: 164 / FY2021: 148▌ Recruitment of Mid-career Human Resources

The business environment surrounding us is changing rapidly. In order to survive the competitionin this age of tremendous changes, we need to take on the challenge of doing business in new
fields while expanding and advancing our existing businesses. To respond to these businessneeds, in line with our business strategy, we recruit mid-career professionals with diverse
expertise and knowledge. Our mid-career hires have a wide range of backgrounds and include
lawyers, public accountants, and those with other qualifications, as well as people with experiencein the manufacturing, finance, media, IT, and other industries. These professionals from various
fields are making use of their respective expertise for the benefit of our company.
Sumitomo Corporation recruits mid-career workers not only for their expertise and knowledge. We
expect these employees who have diverse backgrounds, to revitalize the company andorganizations with their ways of thinking, work methods, out-of-the-box ideas, values, and help us
enhance our competitive strength. Sumitomo Corporation will continue to promote mid-career
recruitment along with the employment of new graduates for the retention of a diverse workforce.

of Sumitomo Corporation Group and the values that we should demonstrate. One participating▌ Utilizing the Alumni Network

student commented, “I was able to notice important values when thinking about my own career”

The SC Alumni Network was established in FY2019 to provide opportunities for alumni now〈Number of Past Participants〉
FY2019: 591 / FY2020: 1,322 / FY2021: 2,548

working in other companies to interact with current officers and employees of Sumitomo
Corporation. The purpose of the network is to foster an open corporate culture while creating new
business opportunities by merging various knowledge and personal networks inside and outside
the company. Alumni are expected to play a supporting role in securing talent while working to© 2022 Sumitomo Corporation

create a more interconnected network.

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HR Management: Development
Policy and Concept▌ Basic Concept of Talent Development

Activities

For the Sumitomo Corporation Group our talent are the most important management capital.
The Global HR Management Policy established in 2020 describes the “ideal individual” as “aperson who is creating new value on a global scale, sharing SC Group’s vision and mission,and maintaining high aspirations and a continuous intrinsic motivation with Enterprising Spirit”.
The most important thing when bringing this into reality is for each individual to enhance theirabilities, or expertise which are valued globally. A combination of on-the-job and off-the-job
training is essential for developing a group of such top-tier professionals.
By “generalizing and conceptualizing” experiences through “introspection and reflection” onwork successes and failures and by acquiring skills and knowledge necessary for pursuing work,
our talent become capable to engage in more advanced assignments.

Introductory
programperspectives, experiences, aptitudes is important, and therefore, we focus on careerdevelopment training to ensure that as many people as possible can work with high motivationand comprehensively demonstrate their professionalism. Moreover, there are training programs
which enhance people management skills and promote D&I so that supervisors can address
well as individual growth. We also offer long-term programs for selected employees that allow

Executive
positionsManagement＊

Training forexecutive officers

Training for new
corporate officers

Training for new
department heads

Training for newteam leaders

Training for new in Grade“Advanced Professional”

Selection for promotion

Training for new in Grade“Professional One”

Selection for promotion

Follow-up training for new
employees

Training for new employees

Level-Specific Programs

be active in each field. In addition, we believe talent development based on individual career

employees to acquire the knowledge and skills necessary for business management. Many of
those completing the program have been playing a leading role in managing group companies
in Japan and abroad. In our efforts to enhance the development of our talent, in addition to in-

＊

Basic
programD&I program, liberal arts program, Human resources management program, Career development program, Trading businessprogram, investment-related program, Legal program, DX program, Liberal arts program, strategy and marketing program, etc.

Long-term Program for
Selected Employees

Elective
Program

As Sumisho Business College (SBC), we organize 300 courses of OFF-JT training a year andthat offers individuals various types of programs to acquire the knowledge and skills needed toand motivate team members and lead diverse human resources to link organizational growth as

Sumitomo Corporation Group Personnel Development Programs
Non-Management▌ An Introduction to our Talent Development Programs© 2022 Sumitomo Corporation

Domestic and Overseas Executive programs

house training programs, we make effective use of external high-level training programs, suchas overseas executive programs.
Number of Hours for Ability Development Training
in FY2021（Non-consolidated）
SBC

Business unit
training (Non-SBC)

Total number oftraining participants

14,204
employees

30,672 employees

Total number oftraining hours

65,983 hours

53,911 hours

Number of training hours
per employee

12.9 hours

10.5 hours

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HR Management: Development
Talent Development Programs
1. Level-Specific Programs

3. Long-Term Programs for Selected Employees

At the time of promotion, we arrange training programs that offers

Long-term programs for selected employees are intended to foster a management perspective and for participants tounderstanding to the internal rules and literacy necessary formake self-reform as well as to acquire skills for practical leadership, which can be difficult to obtain through short-term

conducting business. From new employee to senior management,

programs. Participants in each program are selected from among those who are demonstrating their abilities at theparticipants in the training will understand what is expected of them

forefront of business and those who are expected to take on leadership roles in the future. These long-term programs

and what roles they should fulfill, thereby acquiring tips on how tocontribute to develop and foster Top-tier professionals to be active in various fields.

transform themselves. We offer Level-Specific Programs for theentireSumitomo

Corporation

Group.

Throughtheprogram■Sumitomo Executive Management Program

participation, they build a rich network within the Sumitomo

Targeting department and division managers who are expected to fill executive manager roles in the future andCorporation Group. In these programs, emphasis is placed on

expected to possess a companywide management perspective, this program provides opportunities to acquire thefostering leadership that can contribute to society through business,

comprehensive vision, mindset, and determination that executives should have. This is achieved through in-depth

offering participants an opportunity todialogue and debate with senior management and lectures on management literacy from outside instructors andgain awareness forexperts. Approximately 30 employees participate, attending a total of 18 sessions over about eight months. At theautonomous personal growth.

conclusion of the program, participants give a presentation to the entire company where they discuss their vision for the

2. Selective ProgramsMore than 80 different selective programs are available, covering

future and their ideas for transforming the company to achieve another 100 years of evolution.

comprehensive knowledge and skills, from basic to advanced levels,■ MIRAI Creator Program (MCP)

that will be needed to play a leading role as an executive who canThis program targets section managers (and the next generation of section managers) who will fill the position ofcontribute to society through business. After completing theleaders driving business in the future, and who are expected to have the ability to develop strategies and understand“Introductory Seminars” and the “Basic Seminars” where employees

the philosophy of leadership. The program fosters leaders able to analyze their own values from a range of

can acquire the basic skills and general knowledge (standard skills

perspectives and establish their leadership philosophy, and then refine their ability to conceptualize business andand knowledge) required to work for an integrated trading company,

develop strategies, formulate strategies for ongoing profits, and create next-generation business models. Approximately

employees can choose any of the programs where they can learn

25 employees participate, attending a total of 20 sessions for approximately seven months. At the conclusion of theabout knowledge and skills required for them to effectively pursue

program, participants give a presentation to the business unit manager where they discuss strategies for the businesstheir work. Regardless of their current department or job, employees

unit for the next 10 years and concrete actions for achieving those strategies.

are supported with training so that they can learn, or continuelearningtheliteracy,

specialized

knowledge,

theories,andframeworks required for management.
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HR Management: Development
Talent Development Programs
3. Long-Term Programs for Selected Employees

4. Overseas and Domestic Programs

5. In-house Education and Awareness-raising on Respectfor Human Rights■PX（Personal Transformation）ProgramThis is a new program created in 2021 for non-managerial

As a global business group, the Sumitomo Corporation

As a global organization contributing broadly to society, the Sumitomo

personnel. The 10-session program, conducted overGroup offers many intern programs to develop employees

Corporation Group holds management principles that place prime

seven months, is intended to make participants become

who can work effectively around the world.

importance on integrity and sound management with utmost respect foraware of their personal and the company’s strengths andThese include a trainee program designed to develop talent

challenges through dialogue with business leaders from

who can play an active role on the global stage, a language

the same age and people in different industries to support

training program that develops language and regional

their growth. Moreover, this program encourages personal

specialists, an overseas study program primarily fortransformation by following

acquisition of an MBA, a venture intern program designed

the process of new businessthe individual. Based on this principle, the Group developed the“Human Rights Policy” and the “CSR Action Guidelines for Supply
Chain Management” that take into consideration human rights andother various issues. We will respect human rights to take our social
responsibility and pursue sustainable growth with society.
With the above considered, we have established a committee toandto foster individual strengths in domestic startups, and aparticipants acquire abilities as professionals who would

global intern program that focuses on business in emerging

be valued outside the company.

countries.

■Participation in Domestic and Overseas Executive

discrimination, people with disabilities, foreign residents, Human rights

Each year, 80 to 100 trainees in these training programs

violations on the Internet and other issues related to human rights

Programs at the Company’s Expense

are dispatched to different regions of the world, including

every year. We also invite external lecturers to conduct annual human

Employees who are potential candidates for future

Japan.

rights training to raise employee awareness of human rights issues.

creation(strategy

formulation

andexecution),

executive management positions in their respective
organizations are sent to executive programs at domestic
and overseas business schools at the company’s expense.
Each year, at least 30 employees are sent to businessschools in Japan, and at least 30 employees are sent toleading business schools overseas, with the objectives of

The number of trainees dispatched in FY2021
Overseas
trainees
Language trainees
International
students
Ventureinternship
Global internshipfostering awareness and thinking as a future executive,
acquiring comprehensive management knowledge andexecutive decision-making capabilities, and growing
through interactions with other personnel and executives.

© 2022 Sumitomo Corporation

promote human rights and Dowa issues, and we have a forum to
discuss internal issues on human rights such as Dowa issues, Buraku

We also distributed e-learning content on respecting human rights inbusiness and conducted other internal educational programs for further
action.
In addition, training seminars on mental health and human resourcesmanagement have been conducted. In Level-Specific Programs for
managers, programs on harassment prevention have also been added
to maintain a harassment-free work environment and to provide
suggestions on how to address harassment if it occurs. Through these*The language training program was suspended in
FY2021 due to the impact of COVID-19.

efforts, we provide employees with education and raise theirawareness to thoroughly prevent human rights violations at work.

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HR Management: Development
Activities▌ Sumitomo Corporation Global HRD Center- A training center to develop global talent and for the use as a strategic
multipurpose facility -║ Business Description
Job Training Programs at Toyota Iraq
Sumitomo Corporation conducts job training programs through Toyota Iraq, a subsidiary,
to create local opportunities for stable employment and enhance the skills of job seekers.
Prolonged conflict in Iraq has had tremendous impacts on the people, and more than 3
million people have been forced to leave their homes and have become internallydisplaced persons (IDPs).
Over recent years, employment has become a more serious issue for the younger
generation in particular, and creating local skills training and employment opportunities isan urgent matter. Because of such problems, Toyota Iraq has been working with the
UNDP since 2016 to conduct job training programs for such IDPs. Starting in 2020, thecompany has also been working with the International Organization for Migration, an
organization affiliated with the United Nations, to conduct new programs offered topersons other than IDPs as well. To date, 93 persons have completed a total of 8 job
training programs. These graduates have been offered support in finding work at local
companies, and the programs themselves are continuing.
Sumitomo Corporation hopes to achieve sustainable development of local communities
through these programs and will continue to support the creation of job opportunities andskill enhancement in Iraq through these business activities.

The Sumitomo Corporation Global HRD
Center in Ginza, Tokyo serves as a training
center to develop global talent as well as a
strategic multipurpose facility. International
colleagues from different organizations andcountries all over the world meet at thisfacility for intensive discussions on the future
visions and strategies of the Sumitomo
Corporation Group.

Sumitomo Corporation Global HRD Center

Trainees receiving training on vehicle maintenance,
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HR Management：Right Talent to the Right Assignments
Activities▌ Enhancement of Talent Management
Talent development does not happen overnight. There is a need to envision, develop anddeploy human resources required for the growth of each business in the medium to long-term.
In order to assign talent continuously and strategically in line with business strategies on a
global basis, the Sumitomo Corporation Group implements the measures below to help all
talent to play an active role, regardless of whether they belong to Sumitomo Corporation nonconsolidated, overseas offices or group companies.

▌ Advancing Global Measures to Develop Talent
Aiming to recruit and develop talent who can lead global business operations, the Sumitomo
Corporation Group is focusing on promoting and developing locally hired employees in its
overseas offices and Group companies.
As part of these efforts, we conduct training programs for locally hired employees at different
career levels, such as senior executives, managers, and senior staffs. These training programs
establish a shared sense of the Sumitomo Corporation Group's corporate DNA and strengthen

Preparation of Successor
Development Plan

Definition of Key
Positions

Development ofManagerial Talent

the sense of unity among employees as members of the Group by reaffirming participants'
understanding of Sumitomo’s Business Philosophy and the Group's management principles.

▌ Global Talent
Sumitomo Corporation Group promotes placing the right talent to the right assignments on a
global basis, regardless of nationality and affiliation. Based on this policy, locally hired staff andemployees of overseas offices and group companies are transferred beyond the borders of
Key positions involving group management
needed to execute group strategy. Portionin blue shaded area: General Manager andabove envisioned in the case of
Headquarters

Each key position candidate will be selected not
only for the next generation but also its following
generation, and a successor training plan willthen be put in place. Additionally, candidates are
periodically reviewed and replaced.

To enable key position candidates toacquire the necessary experience, skills,
and abilities, we will effectively combine job
rotation, job assignment, and off-the-job
training.

Create a global human resources
database

To visualize our talent pool, we have a global humanresources database which includes overseas talent as
well.

Introduce the Global Mobility Policy

Common Groupwide rules on employment conditions
and welfare packages to be applied in the case oftransfer between overseas bases.

Introduce the Global Grading System

To compare what level of talent are present across theGroup, we have introduced a common Groupwide
personnel grading framework.

countries and companies. We positively appoint local staff to executive positions of overseas
offices to promote our policy of placing the right talent to the right assignments on a global basis.

Executives / upper managements In regional offices: 32© 2022 Sumitomo Corporation

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HR Management：Right talent to the right assignments
Activities▌ Optimal Allocation Under New Human Resource System
Under the new human resource system, to achieve the “Intrinsic motivation/Great
Place to Work” described in the Global HR Management Policy, we conduct talent
allocation after thorough alignment with the company’s expectations and theindividual’s career aspirations. As an integrated trading company, continuous▌ Succession Planning / Enhancement of Talent Database
To continuously realize strategic allocation of talent as well as the development andappointment of managerial talent across our consolidated global network andaccording to our business strategies, we undertake succession planning for the next
generation, and the generation after that, for key positions (equivalent to HQ generaldevelopment of talent who possess a variety of knowledge and expertise is essential

manager and above) at Sumitomo Corporation, overseas offices or group companies.

for the sustainable creation of value tailored to the social issues of the times, and we

To ensure that candidates for key positions are equipped with the necessary

will continue assignment rotations to expand this talent pool. To develop Top-Tierexperience, skills, and other requirements, we develop their capabilities accordingly,

Professionals as specified in the policy, a more diverse rotations will be required, andso that we can enhance the talent pool both quantitatively and qualitatively. As tools to

we anticipate cases such as longer term assignments in a particular field to enhanceachieve this, in addition to adopting a job grading framework which enables tothe talent’s expertise in that field.

compare job size on a global basis, we are also working to create an HR database ofhuman resources including talent in overseas offices and group companies. In 2019,▌ Shift of Talent Under SHIFT 2023
As we re-allocate company-wide managerial resources, in addition to the financial

we also adopted the Global Mobility Policy as a set of groupwide rules stipulatingcompensation and benefit packages for international assignments. This serves as aplatform for promoting assignment of talent across countries and regions.

aspects, we are addressing human resource aspects by undertaking optimal allocationof talent in conjunction with the reconstruction of the business portfolio as well as
strategic talent allocation to businesses covered by the strategic investment fund. To
undertake and accelerate this shift, we are tracking the overall and company-wide
movement in our talent under SHIFT 2023, while strongly promoting matching oforganizational talent needs and individual aptitudes and aspirations, and expanding inhouse recruiting systems.

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HR Management: Performance management / Fair Treatment
Activities▌ Absolute Evaluation / 360-degree Evaluation
As part of our current efforts to reform talent management, we are implementing a range of

Through these evaluation systems and career assessments, we aim to provide support for themeasures that enhance people management skills in dealing with individuals. We havedevelopment of the individual and open diverse paths which closely attuned to each of them.

introduced an “absolute evaluation” system that focuses on the individual. Instead of comparing

In addition, we organically combine talent development measures, such as our in-house

specific actions, progress, and outcomes against those of others, the evaluation is based on the

recruiting system and regular staff rotations, with talent development tools, such as ourdegree of achievements of the individual’s assignments and assignment-related objectives. We

various Off-JT training programs. The aim is to support self-sustaining growth and diverse

have also adopted a “360-degree evaluation” as a mechanism for improving the objectivity andcareer development for each individual so that we can continuously develop Top-Tiervalidity of the “absolute evaluation,” and dealing sincerely with the individual to draw out theirprofessionals.

potential. The 360-degree evaluation is currently applied to managers and above, however, bysoliciting wide-ranging comments from colleagues involved through work, the supervisors can▌ Evaluation based on the Progress of Strategy Execution

make their final evaluation based on those comments. In this way, we aim to achieve a greater

We introduced evaluations based on the progress of strategy execution as a measure tolevel of information on how others see the individual, which improves the people management
skills of the supervisors and enables them to deal more sincerely with their subordinates, and it
also provides opportunities for the subordinates to gain better insights as well.
In addition, a career assessment interview is held once a year between supervisors andsubordinates to help reflect and align the career views of the subordinates with their supervisor.
In these interviews, we review the individual’s career goals, experience, aptitude, andchallenges from the medium to long-term perspective as we align company expectations forwork and personal development needs with the individual’s own aspirations. This also aims tofacilitate communication and help individuals understand that the interviews offer opportunities
for superiors and subordinates to deal comprehensively with career plans and challenges toovercome. We are expanding our training programs to improve such communication skills tocreate references for effectively communicating with subordinates.

enhance each individual’s commitment in accomplishing each organizational strategy. Under
this system, progress toward achievement of the KAIs and KPIs established at the SBU level isevaluated and reflected in individual bonuses. This leads to the internal sharing of goodpractices toward KAI/KPI execution and the enhancement of the overall PDCA cycle for theaccomplishment of each organizational strategy.

▌ Investment Performance-linked Compensation
We have adopted “a system of compensation linked to investment performance” as part of ourefforts to strictly select investments and strengthen post-investment value-creation. By reflecting
the performance of new investment projects in remuneration, this system seeks to improve theprobability of success of new large-scale investments, and also the sense of ownership of theindividual executing the investment.

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HR Management: Work Environment / Workplace Culture
Activities▌ Inheritance of Sumitomo's Business Philosophy
Sumitomo's Business Philosophy stresses the need for an enterprising spirit to stay a step ahead in dealing with change, while ascribing importance to maintaining integrity and sound management,
avoiding easy gains, and working for the public interest, without being misled by short-term immediate changes. This philosophy has continuously formed the basis of Sumitomo Corporation Group'sbusiness for more than 400 years. With the aim of experiencing and assimilating Sumitomo’s Business Philosophy, which is the basis of the Group’s Management
Principles, we conduct training annually at Besshi Copper Mine in Niihama City, Ehime Prefecture (Trainings in FY2020 and FY2021 were cancelled due to the spreadof COVID-19). The Besshi Copper Mine continued to produce copper for approximately 280 years from its opening in 1691 to its closure in 1973 and supported thefoundation of Sumitomo's business. The visit of this mine is an opportunity to reconfirm the role that the Sumitomo Corporation Group should play in society. Also, allemployees learn the history of Besshi Copper Mine upon joining the company.

▌ Measures to Accelerate D&I
Sumitomo Corporation sees the active participation of female employees inbusiness as an important pillar of Diversity & Inclusion, and we have formulated

For two weeks from March 7 to 18, 2022, we held Diversity Weeks 2022 asaction plans with the aim of advancing this further. As for promoting a more

our first company-wide D&I event in Japan. Diversity Weeks is a set period

active involvement of women in business in Japan, we have set the following
goals to be achieved by 2030.

Diversity①Female Manager ratio: At least 20% or more
②Female Department General Manager ratio: At least 10% or more

Promoting
ActiveParticipationof Female
Employees in
Business

Weeks③Female Director and Audit & Supervisory Board Member ratio*: At least 30%

during which we focus on the conduction of D&I programs. The aim is toremind all our officers and employees that D&I is the source ofcompetitiveness, and help trigger specific changes in their behavior tofurther drive D&I. We will continue this on an annual basis, also eyeing

or moreglobal collaboration in order to further cultivate D&I awareness.

*In support of the “Challenge toward 30% by 2030” announced by KEIDANREN (Japan
Business Federation) in March 2021

To achieve these goals, we are reinforcing talent development, allocation, andrecruitment centered on the new HR system introduced in FY2021 and areworking to create an environment where each individual can demonstrate their

Sumitomo Corporation offers various programs to help its caregiving

full potential.

Support forIn addition, in order to support our employees to balance life events and career

Balancingsuch as seminars and individual consultation sessions (once a month) on

Work andcaregiving and creation of “Handbook for Managing Work-Caregiving

Long-term

Balance”, we are working to create a work environment where employees

Care

who have entered the life stage of caregiving can continue playing an active

development, we have reinforced tangible aspects including the establishment ofinternal policies that go beyond regulatory requirements and have addressed theintangible elements such as correcting long working hours, encouraging
employees to take paid leave, and reforming employee awareness with the aimof creating an environment that facilitates active participation in the company
after childbirth and childcare.
© 2022 Sumitomo Corporation

Action Plan (Japanese)

employees to continue work with a sense of security. Through activities

role at work.
Support for Balancing Work and Long-term Care
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Activities▌ Measures to Accelerate D&I
Sumitomo Corporation offers various options that are available both for men andAs part of its efforts in corporate social responsibility and toward diversity, Sumitomo

women with the aim of creating a work environment where diversified employees

Corporation Group has been promoting the employment of people with disabilities.

who have entered the life stage of child-rearing can exert their maximum

In 2014, we established Sumisho Well Support Co., Ltd., a special subsidiary

performance. When an employee files a notice of pregnancy or childbirth for
Support for
BalancingWork andChild-rearing

company, and we have worked with them since then to employ people withthemselves or their spouse, we provide information on the childcare leave systemand confirm their interest through a survey. If they are interested in using thePromotion ofsystem, we assist them (men and women) through the process of using childcare

the Employment

leave.

and Retention of・ Support Handbook for Balancing Work and Child-rearing

People with・ Childcare Consulting Services

Disabilities

・ Partnering with Childcare Facilities

Support for Senior Employees’ Activities© 2022 Sumitomo Corporation

binding of business profiles, and business-related data input. They are extremely
important for the business activities of our company. In conjunction with the
expansion of business, the number of employees has also increased, and we have
Sumitomo Corporation Group will continue to rely on the uniqueness of each of our

Supporting employees in balancing work and childcare

Abolishment ofa Seniority
Based Talent
Allocation

outsourced general office tasks, scanning documents for digitization, printing and

66 employees (including 47 people with disabilities) as of July 2022. Going forward,

・ Support for Employees Stationed Overseas with Children
We are developing working environments where every employee can work withintrinsic motivation regardless of their age.
In both our new HR management system adopted in FY2021 and post-retirement
re-employment system revised in FY2022, we follow the basic concepts of “payfor job” and “pay for performance.” By eliminating underlying ageism and ensuringthat we assign the right talent to the right places according to the strengths andexpertise of the individual employee, we are promoting the selection of talented
young employees.
On the other hand, for senior employees who have a wide range of experienceand extensive knowledge, we have other support measures to help developing astrengths-based career path. This includes encouraging autonomous careerdevelopment and offering opportunities for recurrent training throughout theircareers.
・CLP (Career & Life Planning) Training
・Career Assessment Interviews
・Support to Find a New Job Outside the Company

disabilities and provide them with opportunities to participate.
Employees of Sumisho Well Support are engaged in various tasks, such as

employees with disabilities to help in our creation of added value.
Promotion of the Employment of People with Disabilities

The Sumitomo Corporation Group Compliance Policy (established March 2019) andthe Employment Rules codify that no fear or discomfort shall be caused throughsexualized speech or conduct, harassment, slander or defamation, intimidation,
violent behavior, or the like on the basis on sexual orientation or gender identity.
Raising

We believe that acquiring appropriate knowledge concerning LGBTQ* individuals is

Awareness ofimportant and provide information to employees through various training. We also

LGBTQ*

created an LGBTQ consultation desk, set out employment rules that enable thesame sex partners of employees to enjoy certain employee programs, and aretaking various other measures to create work environments free from any
discrimination to LGBTQ employees.
* LGBTQ: L=Lesbian, G=Gay, B= Bisexual, T=Transgender, Q=Questioning, Queer

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Policy and Concept▌ Health and Productivity Management
Basic Policy

Safety Measures in Uranium Mining“To achieve prosperity and realize dreams through sound business activities” is one of the

Our Group’s development of uranium mines, production and sales of uranium concentrates*1,

management principles of the Sumitomo Corporation Group.

Based on this principle, ourand trading of various kinds of nuclear fuels containing radioactive materials comply with eachmission is to ensure the economic and spiritual prosperity of people around the world, including

country's laws and regulations based on the IAEA (International Atomic Energy Agency)

our employees, shareholders, clients, and local communities, and to fulfill their dreams. We also

standards. With our highest priority on HSSE (Health, Safety, Security and Environment), we

believe that in order for every employee to maximize his/her performance, good physical andplace the utmost importance in ensuring the safety of onsite employees and local residents.

mental health is essential, without which it is not possible to continuously create new value.

Specific measures taken in production and sales of uranium concentrates include theBased on this, the Sumitomo Corporation Group formulated the Declaration of Iki-iki Waku-

measurement of radiation exposure of all those entering and leaving the plant, and the

waku Health and Productivity Management. The Group implements various efforts based on

management and monitoring of cumulative radiation doses in employees*2. Furthermore, thethis declaration and by taking into account the actual situation of each group company. We will

uranium concentrates and various kinds of nuclear fuels we deal in are all used for peacefulcontinue to promote health management with a focus on three aspects: “improvement of healthpurposes such as power generation. Our relevant activities comply with security trade control-

literacy” to enable employees to continue working in good health, “reassurance in emergencies”

related laws and regulations.

to be well-prepared for unexpected illness, and “global medical support,” which is unique to*1 Products manufactured in the said business are natural uranium concentrates, and waste materials produced in mines

integrated trading companies. Also, Medium-Term Management Plan “SHIFT 2023” positions
health management at the core of our human resources strategy.
Declaration of Iki-iki Waku-waku Health and Productivity Management

and refining plants are limited to a small amount of low-level (naturally occurring) radioactive waste derived from therefining process. Such waste materials are appropriately treated in accordance with IAEA standards and Kazakhstan’slaws. Furthermore, no high-level radioactive waste or medium-level radioactive waste has been produced in the businessfor the two years from FY2020 to FY2021. In addition, a management structure for ensuring safety and quality has been
put in place.
*2 We have established an internal standard for the maximum permissible exposure of workers that is stricter than the laws
and regulations of Kazakhstan, where we conduct the business, and we are compliant with such standard. Further, no
external radiation leaks have occurred in the two years from FY2020 to FY2021.

Declaration of Iki-iki Waku-waku Health and Productivity Management
The Sumitomo Corporation Group aims to be a company in which all employees work with energy (Iki-iki), excitement (Waku-waku), and in good health, taking on challenges to create newvalue.
Our Group’s Corporate Mission is: “To achieve prosperity and realize dreams through sound business activities.” In order to fulfill this mission, it is necessary for all employees to perform attheir highest level and to continue to create new value. To this end, it is crucial that each employee maintain good health.
As a human resources strategy, the Sumitomo Corporation Group will engage in “health and productivity management” that allows employees to work with energy, excitement, and good health,and creates value by further enhancing existing measures for maintaining and promoting employee health.
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SystemHealth Management Promotion Structure

Employee Engagement: Health and Safety Committee

Health management is carried out through the following structure to maintain and

Sumitomo Corporation holds a monthly health and safety committee meeting, which isenhance the health of employees under the direction of the Assistant CAO who servesattended by labor union officials on behalf of employees, to receive reports on worksite

as the Safety and Health Manager.

patrols by an industrial physician and discuss health promotion for employees andbetter work environments. A roundtable conference on work styles is also held twice a

Employees

Sumitomo Corporation seeks to enable all employees to generate newvalue while working in good health.

Declaration of Iki-iki Waku-waku Health andProductivity Management

year by management and the labor union, where participants exchange opinions with aview to improving work styles qualitatively and quantitatively in terms of appropriate
working hours for union members.
Crisis Management System
We employ workers in many parts of the world. In order to prepare for the incidents,

1. Improve health literacy

accidents and disasters that could occur anywhere in the world, each employee needs
to be aware of risks on a daily basis and to take appropriate safety measures. At the
2. Reassurance in emergencies

Implementation
systemsame time, each organization also needs to develop an infrastructure for safety

3. Global medical support

measures to prepare for emergency. In addition, in the event of an emergency, it is

Employee Relations &Compensation Dept. Manager(Safety and Health Manager)

important to establish a support system and promptly resume business operations with

Employee Relations &Compensation Dept.

Safety and HealthCommittee (meets monthly)

Labor Union

Corporate Health
Insurance Society

reporting to the president by appointing the executive in charge of human resources,

Clinic (internal medicine
and dentistry)

SCG Counseling Center

Consultations

Officers & Employees(Duty to Maintain Health)

We have therefore centralized reporting of all domestic and international emergency
cases to the Disaster Response and Safety Management Dept. and ensure prompt

Industrial Physician

Exams &
Consultations

a sense of speed.

general affairs and legal affairs as General Manager of Emergency measures. This
Use

Koriton Massage Roomstructure also allows us to provide necessary support in a prompt and centralizedmanner. If a major natural disaster occurs, our fundamental policy is to prioritize (1)protecting human life, (2) mutual assistance, and (3) prompt recovery of business
operations. We have stated this in manuals and inform employees.

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SystemReporting of Work-related Accidents

OHSAS 18001-certified Facilities

We take measures to prevent work-related accidents. If an accident occurs, it must be

Consolidated subsidiaries that have already obtained OHSAS 18001 are transitioning

immediately reported to the Employee Relations & Compensation Department. The

to the standard ISO 45001, which was issued in March 2018.

numbers of work-related accidents reported in Sumitomo Corporation alone are as

As of December 2020, following 4 of 372, or 1.1% of Sumitomo Corporation

follows:

consolidated companies, have been certified to OHSAS 18001 certification.

Number of work-related accidents

Edgen Murray（Middle East, Asia Pacific）

FY2017FY2018FY2019FY2020

FY2021

FUJIWA MACHINERY INDUSTRY (HUBEI) CO., LTD.

2 accidents

1 accident

3 accidents

2 accidents

2 accidents

Infinite Energy Holdings Pty Ltd.

If a work-related accident or disaster occurs at Sumitomo Corporation or any of its

Minera San Cristóbal S.A.

affiliated companies despite our prevention efforts, it must be immediately reported to
the Disaster Response and Safety Management Information Liaison Committee led byRepresentative Director/Senior Managing Executive Officer as chairman. Managers ofmajor departments of the Corporate Group serve as members the Disaster Response
and Safety Management Information Liaison Committee. At the end of every month,they are required to submit a monthly report to the Manager of the Planning &Coordination Department of each Business Unit (Executive Officers, Directors) to keep
executives informed of the current situation. Measures to address work-related
accidents, such as investigations and responses to relevant issues, and prevent themfrom recurring are taken appropriately. Important issues are determined by theDisaster Response and Safety Management Information Liaison Committee andparticularly important ones are reported to the Management Council by Chairman(Representative Director/Senior Managing Executive Officer) to discuss and decideupon.
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HR Management: Work Environment / Workplace Culture
SystemClinicSumitomo Corporation has an in-house clinic (internal medicine and dentistry) tosupport employees’ health management on a day-to-day basis.

SCG Massage
Room"Koriton“

The “Koriton” massage room was opened in the Harumi Triton Square in April
2008 as a place where SCG employees can receive relaxing therapy.

Subsidies for
Costs of Health
Checkups andComplete
PhysicalExamination

The in-house clinic provides services such as periodic health checkups (for thoseunder 35), a health checkup immediately after joining the company, and healthcheckups before and after overseas transfer. Employees aged 35 and older are
required to undergo a complete physical examination at an external medical facility.
Its cost can be covered by the corporate health insurance society.

Reimbursement of Influenza
Vaccination
Expenses

As a part of efforts to prevent infectious disease, the corporate health insurance
society reimburses the full amount of flu vaccination expenses for insureds andtheir dependents.
Indication
Percentage of Employees
Undergoing Health Checkups

Health Results
Indicators

Stress check Implementation
rate
Smoking rate

Target

FY2017FY2018FY2019FY2020

FY2021

100%

100%

100%

100%

100%

100%

90％

90.2%

88.1%

88.5%

89.9％

90.6%

10％

-

‐

18.0%

ー

13.7%

15％

-

‐

4.6%

2.9％

19.1%

Rate of female employees under
35 years old who undergo
gynecological exams

Conduct of
Employee
HealthAwareness
SurveyAfter the Declaration of Iki-iki Waku-waku Health and Productivity Management
was announced, a health awareness survey has been conducted annually startingin 2019 to measure the effects of health management measures andpresenteeism*.
* A condition where an employee reports to work but experiences a decline in thework performance that derives from some physical or psychological problem.

© 2022 Sumitomo Corporation

HealthGuidancefor Younger
Employees
Expanded

Health guidance is provided by a health nurse from the in-house clinic to younger
officers and employees who have shown deterioration of health data or physicalchanges since joining the Company or in conjunction with changes in their living
environments. From FY2022, we are planning to implement an Under 40s healthsupport program in collaboration with the corporate health insurance society.
List of Seminars Conducted

Expansionof HealthManagement
Seminars

Seminar Title

Number ofparticipants

July 2019

Eyestrain Seminar

95

August 2019

Acidophilus Seminar

67

October 2019

Sleep Improvement Seminar

94

January 2021

Women's Wellness Issues and Corporate Life
Seminar138

December 2021

Sleep Improvement Seminar

221

February 2022

Women's Health Seminar

108

MentalHealthcare

We provide self-care education, and training for managers, on mental health andhow to make use of the SCG Counseling Center.

Expanded
Measures
Supporting
Women’s
HealthTo improve the rate of young female employees undergoing gynecological exams,
we have partnered with medical facilities, and raised the subsidy from the corporate
health insurance for the exams. We are also increasing activities such as holding
seminars and sharing information to raise awareness of health issues that are
specific to women.

Support for
Quitting
Smoking

All office floors at Head Office are now designated as non-smoking areas.

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Recognition

HR Management: Work Environment / Workplace Culture
Activities

The Sumitomo Corporation Group established the SCG CounselingCenter in the Head Office to support employees to work energetically andwith enthusiasm. This center is staffed with multiple counselors to help
solve various problems and concerns.
ServiceproviderSCG
CounselingCenterServices

Eligible users

Activities

Counseling in person

Mainly for
employees in Tokyo

Counseling by phone

All employees

Qualified counselors provide
counseling to employees inJapan and overseas.
Qualifications of thecounselors include seniorindustrial counselors, clinicalpsychotherapists, career
consultants, and family
consultants.

Counseling by visiting the Employees in
employee's site
offices and outsideof Tokyo including
overseas

SCG
CounselingCenterExternal
contracting
company

Various seminars

All employees, andtheir families whenaccompanying themoverseas

Implementing seminars for
managers, generalemployees, employees
overseas, and employees'
families

Consultation

Management

Consultation for managers
regarding how to respond totheir subordinatesCounseling in person

All employees

Contracting external
companies to provide
counseling in person, by email, phone, and visiting theemployee's site.

Counseling by phone, byvisiting the employee's
site

Advanced

We introduced an advanced healthcare expense coverage program for

Healthcare

employees to cover substantial financial burden for treatment of medical

Expenseconditions not covered by insurance.

Coverage
ProgramHospital

Introduced© 2022 Sumitomo Corporation(1) Medical
expenses

Employee(3) Payment ofbenefits(2) Request

Sumitomo
Corporation

HealthSupportServices to
Employees
Stationed
Overseas

Measures
AgainstGlobal Health
IssuesSumitomo Corporation has more than 1,000 employees and their family
members stationed in 66 countries and regions (as of April 2022). We
provide these expatriates working in different environments from Japan
with healthcare services to maintain their health, such as an annual healthcheckup. Counseling services provided by our in-house clinic and the SCG
Counseling Center are also available for those with mental and physicaldisorders.

Currently, many countries around the world are struggling with serious
health issues, such as HIV (AIDS), tuberculosis and malaria, and COVID19. The Sumitomo Corporation Group is determined to take active
measures against these global health issues.
To ensure that officers and employees of our Group have accurate
information about these infectious diseases and take preventive measures,
the Company provides health checkups in advance for officers andemployees who are assigned overseas and when necessary, encouragethem to be vaccinated. We also provide a variety of training prior to theirdeployment. Moreover, we started e-learning and seminars on safetymeasures in response to requests by employees preparing for their firstoverseas business trip and for those looking for the latest information on
infectious diseases. These programs aim to enhance awareness of crisis
management and disseminate accurate and up-to-date information. We
make these programs available to all the Group officers and employees
within and outside Japan. Through these activities, we support employees’
health and safety while they are overseas.

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FeatureHR Management: Work Environment / Workplace Culture
Activities▌ Education on Crisis Management
Sumitomo Corporation offers a variety of training programs andseminars in order to foster crisis awareness and to equip each
employee with necessary knowledge.
As a countermeasure against natural disasters, each year we
conduct emergency response exercises of the Crisis Management
Team and on each floor of the Tokyo Head Office in anticipation ofan earthquake under the Tokyo Metropolitan region. Throughout theGroup, we also develop, and conduct exercises for, impact based
BCPs that can be used to respond to multiple disasters, including
not just earthquakes, but also typhoons, floods, pandemics, etc..
Seminars on safety measures are divided into 4 grades and 6
courses,

allowing

participants

to attend according to theirexperience and learning levels. Also, we support the developmentof manuals on safety measures in each business site, and we haveestablished a system that can provide prompt and effective relief
and support through cooperation with domestic and international
partners in case of emergency.
We also develop safety net system as part of our daily operations.
For example, we have introduced a system to obtain real-time
information on troubles in various parts of the world (e.g., terrorism,
serious accidents, severe weather, natural disasters, etc.) and pushforward the information to employees posted or on business trip invarious regions. Another example is a system to provide support
when emergency medical care is needed.

SocialSocialEnvironment

Governance

ESG
Quantitative Data

External
Recognition<Notes>Currently we do not trade FSC certified Russian wood products as FSC has suspended all trading certificates in
Russia. The Russia-related business described in the ESG Communication Book 2022 is based on the period from January
to December 2021.

║ Business Description║ Business Description

Measures Taken in Logging of Raw WoodPT FUMAKILLA INDONESIA

The incidence of occupational accidents in the forestry industry

Under the slogan “protecting people‘s lives,” Fumakillais higher than those in other industries. The ratio of serious

Indonesia has been working for over 30 years in theaccidents, including deaths, is also very high. To cope with thisIndonesian market, where protection of people from Dengue

situation, we comply with the international safety management

fever, malaria and other infections is a daily concern. It has

standards required for Forest Stewardship Council (FSC)

made slow but steady efforts in spreading its high-quality

certification by OAO Terneyles in Russia in which we invest. If

mosquito repellent coils to every corner of the region. As a

we receive instructions as a result of an audit for the renewal

result, it now has the largest share in the Indonesian marketof the certificate, we take improvement measures immediately.

and contributes to addressing local social issues. In terms ofWe have thus been certified consecutively since 2004. We

social contribution, not only the product performance but also

have

prevent

the marketing method applied there (a business model called

occupational accidents. Our efforts to reduce occupational

BOP to deliver products directly to general users in emerging

safety and health-related risks include: inclusion of safety

countries) are significant. With completion of a new research

management rules into the internal regulations; inclusion oflab with the latest equipment in FY2021, the company now

safety-related items in a job description contract with analso has a new product development system in place for

employee;

Management

pursuing greater efficacy and safety. Since its foundation in

Department; and onsite inspection by the Safety Management

1991, we have been continuing our investment (current sharealso

implemented

establishment

variousofthemeasures

Safetyto

Department at plants and work sites of the company.

of 20%). Our employees assigned there also support the local

When the Safety Management Department determines it

operation of Fumakilla.

necessary to make improvements, each onsite manager isrequired to develop an improvement plan and report it to thepresident. After completing the improvement, the manager also
must report its result. The Safety Management Department isrequired to make a list of occupational accidents that haveoccurred in the last month based on reports provided by eachsite and report it to the president. If necessary, the department
develops an improvement plan and give each site an
instruction to implement improvement measures.

© 2022 Sumitomo Corporation

Mosquito repellent coil of Fumakilla

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HR Management: Work Environment / Workplace Culture
Activities║ Business Description
Continuing and developing the health and safety management system we have cultivated over the years
The Metal Products Business Unit continues to develop

Specifically, we encourage the introduction of Total Quality

as a part of the organizational culture. In order to put this into

globally in various industries, and in all of its business

Management (TQM) at each company in order to establish

practice, we assigned ISO 45001 experts to major overseas

activities, the unit places the utmost importance on ensuring

the foundations of an effective safety system and further

bases and developed an IT system, for sharing local lessons

the health and safety of its employees, implementing several

instill a culture of safety in all aspects, from the management

and good practices globally across the Group, and an

key measures in support of this philosophy. Typicalthat leads the company to the manufacturing sites of

education program including e-learning courses. In this way,

examples are the global initiatives for zero accidents in Steelbusiness companies. We constantly seek to improve thewe are focusing our efforts on developing environments

Service Center Business Groups(Steel products related

quality of management and ensure consistency individual

where our employees can work safely and with peace ofbusiness) and the global HSSE management system fortargets as well as striving to enhance awareness of safetymind.

eliminating occupational and environmental accidents in theandGoing forward, we will continue to fulfill our social mission by

tubular products business.

communicating the status of these defined targets.

building a better working environment, aiming for “Zero

The Steel Service Center Business Groups (Steel products

An example of support activities is the support for provided

Accidents” in both the steel and tubular products business.

related business) conducts business in more than ten

periodic self-audits conducted by companies based on acountries, including Japan, and in a wide variety of industries

150-item safety checklist provided by the Safety & TQM

including automobiles, electrical machinery, electronics, andPromotion Team responsible for visiting major customers,building materials. In each case, safety measures areformulating action plans for identified areas of improvement

tailored according to the conditions of each Steel Service

and following up on the status of improvement (during theCenter Business Group. Central to the implementation of

COVID-19 pandemic, this activity has been conducted bythese safety measures, at each of the sites, is the Safety &online conferencing).

TQM Promotion Team in the Steel Products Business

In

Planning Dept, of Sumitomo Corporation Global Metals Co.,established a 12-item HSSE management system based onLtd., which performs that role of an internal advisor andthe slogan “Beyond Zero Harm”(Eradication od Occupational

provides support for the elimination of occupational accidents.

and Environmental Hazards) to promote and establish HSSE

© 2022 Sumitomo Corporation

incentives

thetubularbycontinuously

products

relatedmonitoringbusiness,

we

and

have

HSSE Management System PDCA Cycle

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Quantitative Data

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Recognition

HR Management: Work Environment / Workplace Culture
Activities║ Business Description“G-CMSD HSE Initiatives” Aiming to achieve Zero Serious Incidents by combining
the expertise of the Global Construction and Mining Systems Division
The Global Construction & Mining Systems Div. (G-CMSD) established the G-CMSD HSE Promotion Office in2018. By making full use of its global human resources, the HSE Promotion Office started implementing Health,
Safety & Environment (HSE) activities with the aim of eliminating serious industrial incidents and improving
HSE activities at all G-CMSD Group companies.
The office formulated a vision and HSE standards, publishes a monthly Safety News report, issues Safety
Alerts to share examples of incidents, and has conducted safety inspections (gap analysis) of the Group
companies. From FY2022, it plans to extend these efforts further with the addition of safety audits. As part ofsafety education, it also conducts safety training for new division members and all employees who aredispatched overseas. To facilitate communications within the Group, the office is encouraging further activities
such as creating a portal in March 2021 and the introduction of Safety Awards, which recognize excellence
among the Group companies.

Activities are implemented by using
HSE experts from Group companies

Construction Machinery Business
Construction Equipment Rental Business Expanded Globally
In Japan and the United States, which are advanced construction equipment rental
countries, we are developing the business through TAIYOKENKI RENTAL CO., LTD., andSunstate Equipment Co., LLC, respectively. Because customer needs are growing morediverse with increased awareness of workplace safety and productivity, we aim to provide
new value by upgrading services utilizing IT and DX, such as enhancement of rental
products and offering of various rental apps.
In addition, we acquired Aver Asia (S) Pte Ltd., which has operations throughout Southeast
Asia, in December 2020 in order to expand into this area where mechanization and rental
demand are expected to increase in conjunction with economic growth. We will takeadvantage of the knowledge of business operations cultivated in Japan and the UnitedStates while also efficiently allocating managerial resources between group companies.
By providing and promoting the use of highly reliable and economically efficient machinery,
we will contribute to the realization of a sustainable circular economy.

Safety Alerts are used to share
information about findings andcorrective actions of incidents.

© 2022 Sumitomo Corporation

Safety inspections are conducted at each company. Best practices
are identified and shared for other Group companies to emulate.
Activities are implemented by using HSE experts from Group
companies

Machinery yard at Sunstate Equipment

Corporate culture of people and teamwork

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ESG
Quantitative Data

External
Recognition

HR Management: Work Environment / Workplace Culture▌ Workstyle Reform
As per our Global HR Management Policy, we aim to build a “Great
Place to Work” where diverse individuals continuously andpassionately create new value. In this context, we offer a range ofwork style options so that each individual, with their diverse values
and lifestyles, to maximize their performance both at work and in
private to enrich their overall quality of life. By cultivating anenvironment that enables employees to work autonomously andflexibly, we promote an output-oriented approach to work to generatehigh added value.

Creation of an
Environment
Where Diverse
Individuals canDemonstrate
their Fullest
Abilities

Reductionof Overtime

Reduction of Overtime- Training and seminars on Labor Management- Periodic labor-management roundtable discussions

Training and Seminars on Labor Management
We provide training on labor management as a part of the newly appointed
manager training and newly appointed team leader training programs. We
undertake ongoing educational activities, including holding seminars onlabor management and productivity improvement, to raise awarenessregarding labor management.

Promoting usage of Entitled Leaves- Promoting use of paid leave- Spouse maternity leave, Refreshment leave, Volunteer leave
Promotion of Flexible Work Styles- Teleworking system- Super flexible work hours system- Free dress code

From the past, Sumitomo Corporation has promoted a smart balance ofwork and life under the concept of “work with full energyˮ and “enjoy private
life.ˮ As business is becoming diverse and sophisticated, so are the job
types and tasks. Under these circumstances, managing uniformly to
reduce working hours is not a suitable option. At the same time, merely
working long hours does not necessarily result in better achievement. In
terms of improving global competitiveness, company-wide efforts are being
taken to foster an output-focused work style that generates added value.
We have various programs to support such a mindset shift and to shareuseful information. Examples are shown below:

Promoting
the Use of
Entitled
LeavesSumitomo Corporation promotes a smart work style with the aim of
improving productivity to achieve the maximum results in a limited time.
Efforts to achieve this goal include the setting of a company-wide target for
the number of paid leaves to be taken in a single year through 2016 to
2019. The number of days of paid leave taken has steadily increased, andthe targets were achieved. Starting in 2020, rather than setting a companywide target that applies uniformly to all employees, we adopted a policy ofallowing each organization and individual to exercise autonomous
management.
Average Paid Leave Taken by Employees
2020: 12.3 days
2021: 12.8 days

© 2022 Sumitomo Corporation

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Recognition

HR Management: Work Environment / Workplace Culture▌ Workstyle Reform▌ 0→1 Challenge
0→1 Challenge is an internal entrepreneurial program launched in FY2018 that covers all

As a part of our efforts to develop flexible work environments that promote theSumitomo Corporation Group employees worldwide regardless of affiliation, title, age, gender,

autonomy of employees, we focused on the “location” and the “time” of workor nationality. It helps individuals in each workplace to realize their new business ideas. The

and introduced the teleworking system and the Super flexible work hours

concept of the challenge is to progress from zero (new ideas never seen before) to one

Dress Codesystem in 2018. To build on these systems, in April 2020, we modified the(creating next-generation businesses). In the initial year of the program, there were projects that

Modification

dress code to further promote mindset shifts in the individual and theachieved the formation of companies in new business fields where Sumitomo Corporation hasorganization as well as autonomous work styles. After reviewing current rules

not been active in the past. The visions and aspirations of the program participants, who haveon attire, we eliminated dress codes as long as it is within the scope ofworked with such enthusiasm and intention to bring their own ideas to reality, have not only led

common sense and appropriate for work and the workplace based on TPO.

to the transformation of existing businesses but have given rise to widespread sharing of

In 2018, we adopted a teleworking system and expanded flexibility aroundwork location, with workers able to work at home or any of the hundreds ofcontracted satellite offices up to a certain number of days. In principle, there
are no restrictions to the use., and employees with different circumstances,
Teleworking
Systemsuch as providing childcare and long-term care are provided an opportunity towork proactively and flexibly. Since March 2020, in response to the COVID-19
pandemic, we have allowed teleworking while performing childcare or familycare at home taking into consideration work-life management. In October 2021,
we proposed a best-mix work style that uses both in-office and at-home work
to manage both employee safety and business continuity. As a result of suchsentiments within the Group and reformed employee awareness as well. The important thing isthat instead of just considering the success of businesses, the program also seeks to develop
employees across the Group and to foster a culture of taking on challenges. About 900
applications to participate in the program were received over the four years from FY2018 to
FY2021. In FY2021, six projects were selected from a total of 123 applications received globally.
The number of applications is one quantitative indicator for the program, but also important isthat people gain experience developing businesses and then go on to play active roles in theorganization going forward. Attending pitch events can stimulate officers and employees of theGroup to take on new challenges in existing businesses themselves and energize theorganization through active participation in internal and external interactions with others.

initiatives, the average in-office attendance rate in FY2021 was 37.8%.
In 2018, we abolished the flexible “work hours system”, under which
Super
FlexibleWork Hours
Systememployees were required to be present during the fixed core hours from 11:00
to 15:00, and newly adopted the “super flexible work hours system.” The new
system has no core hours. Employees can start and end their work at any time
during the flexible time band from 5:00-22:00. This system allows employees
to design and manage their own work style, leading to further improvement ofboth the organization’s and the individual’s performance.

© 2022 Sumitomo Corporation

EMEA-CIS

Americas

Asia

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External
Recognition

HR Management: Work Environment / Workplace Culture
Activities▌ Relations with Employees (Labor Union)▌ Employee Awareness Survey Results / Engagement Survey

Based on the collective agreement with the Sumitomo Corporation Labor Union, Sumitomo

The Sumitomo Corporation Employee Awareness Survey conducted in 2019 showed that items

Corporation provides its employees with explanations of management policy and business status,

indicating “levels of satisfaction with the company” remained at high levels and that employee

as well as opportunities to discuss wages, labor conditions, personnel affairs, safety and health,engagement remains high. From 2022, the Employee Awareness Survey (conducted onceand employee benefits on a regular basis. The agreement defines that the company must

every three years) will be replaced with an annual Engagement Survey. In consideration of themaintain and improve employment conditions and ensure stable lives for employees, and theincreasing mobility of human resources in Japanese society, and the gradual change in thelabor union must keep order and discipline at work and make an effort to increase labor

relationship between companies and their employees, the Engagement Survey will investigate

efficiency, and both parties must cooperate with each other in developing the company‘s

the bond between companies and individuals, and the intrinsic motivation of the employees.

business. To achieve this objective, we make every effort to have serious and sufficient
5th Survey(FY2016)

discussions on each specific project, while ensuring mutual understanding and trust. In addition
to matters for collective bargaining and negotiations on an official level, we hold various meetings
to share opinions on a wide range of issues. They include informal meetings with the president,
round-table discussions on business performance, medium-term management plan and related
issues, Human Resources Strategy and personnel systems, and work styles. We also hold6th Survey(FY2019)

Comparison toPrevious Survey

Feeling of satisfaction with thecompany

3.9

3.9

±0

Work-life management (level ofsatisfaction & practice)

3.3

3.4

+0.1

seminars organized jointly with the labor union. Sumitomo Corporation adopts a union shop
system in which all employees participate, excluding executives above a certain level andemployees classified as non-union members based on an individual agreement considering the* Subjects: All employees (excluding employees on leave, etc.)* Respondents selected the response that they believe most closely applies on a five-point scale (five isthe highest score).

nature of their jobs. As of March 2022, the number of members of the Sumitomo Corporation
Labor Union is 3,062, accounting for 60.4% of all employees of Sumitomo Corporation (nonconsolidated basis).

© 2022 Sumitomo Corporation

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Recognition

Social Contribution Activities
Policy and Concept
The Sumitomo Corporation Group work to resolve social issues through its businessactivities and its social contribution activities with the aim of contributing to create asustainable society by fulfilling its Management Principles and Activity Guidelines as a

Activities▌ FY2021 Social Contribution Activity Costs║ Total Social Contribution Activity Costs (unit: million yen)global business group.

Head office
operational
Programs
228

The Sumitomo Corporation Group’s Basic Principles on Social
Contribution Activities
OBJECTIVE
We, as a global organization, will work on social issues through our business activities
and social contribution activities with the aim of building a sustainable society byimplementing the Sumitomo Corporation Group’s Management Principles and Activity
Guidelines.

ACTIVITIESWe will engage in social contribution activities aimed at developing the next
generation of human resources who will drive the sustainable development of society
and contributing to local communities in areas we do business all over the world. We
will also take part in various activities as a good corporate citizen.

Head office andregionalorganizations inJapanand abroad
818

General donations/advertising, etc.
439

FY2021 results
1,655million yen

Consolidated
subsidiaries
837

Operation at
local
organizationsin Japanand abroad
150

APPROACH
We will perform and seek to continuously improve our activities with modesty and highaspirations and endeavor to maintain a high level of transparency while strengthening
our relationships with all our stakeholders.

© 2022 Sumitomo Corporation＜Notes＞* The values above for local organizations and consolidated subsidiaries were
calculated based on questionnaire results.
* Does not include Associated companies.
* Values reported by overseas offices were converted to yen using the exchange rate
as of March 2022.

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Social Contribution Activities
Activities

Developing the Next Generation of Human Resources

Contributing to Local Communities in Areas We Do Business

The TOMODACHI Sumitomo Corporation Scholarship Program (Since 2014)

Introducing Japanese Culture（Since 2015）

Sumitomo Corporation participates in the TOMODACHI Initiative, a program of exchangeWith the aim of building good relations with local communities at overseas business bases, we

between Japan and the United States led by the U.S. Embassy in Tokyo and the U.S.-Japan
Council. We organize a scholarship program for university students that are sent to the UnitedStates as exchange students. We provide not only financial support but also training
opportunities at Sumitomo Corporation of Americas.
Program participants have access to experiences
not available on campus during an overseas study
break. By FY 2021, 57 students had participatedin this program.

give presentations and demonstrations on traditional Japanese culture. Under this program, we
visited Myanmar, Ghana, Iran, Mexico, Cuba and the UAE to introduce Japanese culture to a
total of 160,000 people.
In 2019, we conducted the program at the Kesennuma Shishiori Marine Product Processing
Cooperative in Miyagi Prefecture, to which Sumitomo Corporation is providing support ofindustrial recovery. Technical trainees working at member businesses of the cooperative wereinvited from overseas to such hands-on experiences as kimono wearing and a traditional
Japanese tea ceremony.

The Sumitomo Corporation Scholarship (Since 1996)
We set up the Sumitomo Corporation Scholarship in 1996, the year of our 50th anniversary inthe trading business. The purpose of the scholarship is to help emerging Asian countries,
including Indonesia, Myanmar and Bangladesh, develop the human resources who will lead thecountries’ futures. The number of students who have benefited from the scholarship totaled
17,000 by the end of FY2021.

The University of Tokyo Global Leadership Program (Since 2013)
Sumitomo Corporation supports this program as a leading partner. Through the program, we aim
to develop the next generation of leaders who can engage in transverse collaborations andpropose innovative solutions to global issues. We provide financial support to the university forsending students to leading overseas
universities on a short-term basis. We also
provide advice to students who engage inpractical research and serve as a bridge
between them and the real world.

Promoting Barrier-free Movies (Since 2004)
Sumitomo Corporation promotes the widespread viewingof barrier-free movies as a part of its initiatives to support
community and social participation by persons withdisabilities. We provide barrier-free versions of movies at
no cost to libraries and volunteer organizations throughout
Japan so that visual- or hearing-impaired individuals canenjoy movies with their friends and families. So far, about
49,500 people have viewed the movies in this activity.

© 2022 Sumitomo Corporation

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Activities

Engaging in a Wide Range of Social Contribution Activities in each Global Region▌ EMEA & CIS▌ Americas║ Sumitomo Corporation Scholarship Program in the Sultanate of Oman

║ Providing over 150 Children with a Year’s Supply of Fresh Food

Aiming to contribute to private–sector exchange between Japan and Oman and to thedevelopment of future leaders in Oman, Sumitomo Corporation and Sumitomo Corporation
Middle East FZE have launched the scholarship program and have been supporting Omani
students studying at graduate schools in Japan since 2019.
Under this Program, Sumitomo Corporation Middle East
provides Omani students studying at Japanese graduate
schools with tuition and living expenses for two years
plus round-trip travel expenses. Additionally, Sumitomo
Corporation supports students in selecting and applying
to graduate schools in Japan, and completing admission

COVID-19 pandemic placed Brazil on the world hunger map creating a need for adequate
nutrition for the immunity, growth and development of children. SC Brazil recognized this needand partnered with Associação Paulista de Apoio a Família (APAF), a local education center inMarch 2022. We launched a Donation Drive to provide fresh vegetables and fruits for daycare
services offered by APAF catering to children ages 0-3 years. We originally aimed to raise
R$500 which would supply 50kg of fresh produce to feed 150 children for approximately one
month. However, our employees rallied together,and we managed to raise R$5,000, which will provide
a years’ worth of fresh fruit and vegetables for the children.

procedures. We are planning to support three students every year.

▌ EAST ASIA
║ Supporting Education in Poverty Areas
In China, Chinese and Japanese employees cooperated incollecting donations, which were matched with an equalsum by group companies and then used to support
disadvantaged students in Anhui Province.
In order to expand students' horizons, various activities
have been carried out. This activity was launched in 2009by Sumitomo Corporation (Shanghai) Limited and has now
expanded to Sumitomo Corporation China Group.
© 2022 Sumitomo Corporation▌ ASIA & OCEANIA║ Bringing Education to Local Children
In the Asia & Oceania region, we provided support tomore than 5,000 people in FY2021 through donations,
volunteer activities and other channels. One example isour collaboration with the NPO Ekmattra Society in
Bangladesh, where we donated educational materials
and IT equipment, and provided online lessons, for local,
disadvantaged youth. In March 2022, we also held ourHappy Day, where our employees and the children wereable to enjoy sports and cultural activities together.
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Social Contribution Activities
Activities

Initiatives at Group Companies║ Activity Description║ Activity Description

CAMP Workshop (SCSK group)

Contribution to Local Communities in Thang Long Industrial Park in
Vietnam

The SCSK Group upholds “Create Our Future of Dreams” as its corporate philosophy. In

We have developed three industrial parks in northern Vietnam: Thang Long Industrial Parks.

cooperation with a range of stakeholders, the Group has been conducting social
contribution activities to solve social issues in order to help create a sustainable society.
The Group’s Children’s Art Museum & Park (CAMP) is an activity for children—the next
generation of leaders. Through CAMP workshops, children learn various ways to express
themselves. By participating in creative group activities in the workshops, they also acquiresocial skills and learn to enjoy acknowledging others and accepting diversity.
By engaging in creative, collaborative activities and presenting their work in the workshops,
children find how to express themselves in their own way and expand their circle ofcommunication.
Also, employees of the Group’s bases voluntarily participate in the workshops as facilitators.
They learn a great deal and have satisfying experiences, which help them develop andincrease their work motivation.
Since the activity’s launch in 2001, the SCSK Group has held a total of 911 workshops as

More than 220 companies operate in total, which provide for approximately 90,000 direct
employment. Sumitomo Corporation, in cooperation with the Vietnamese government, isoperating the Parks to ensure stable supply of infrastructure, including electricity andindustrial water. The Parks also support tenant companies in its employee recruitment andlabor affairs.
We organize annual football and marathon competitions at the Parks to promote
community building and increase tenant company satisfaction. We hope that the COVID-19
pandemic will soon come to an end so that we can resume these events.
In addition, in line with our vision to deeply root our developments within the local
communities, we provide scholarships for nearby students, carry out traffic safety
awareness-raising activities, and donate COVID-19-related medical supplies.
Together through our business and social activities, we will contribute to the prosperity of
everyone related to the Parks as well as the sound development of local communities.

of the end of FY2021, in which a total of 18,655 children participated.

© 2022 Sumitomo Corporation

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Recognition“100SEED” Social Contribution Program Looks ahead to the Next 100 Years
100SEED

100SEED Launched with Global Group Employees to Mark Centennial
Under the 100SEED social contribution program, Sumitomo Corporation Group employees

POST : Discussing Social Issues to be Addressed in each Region Basedon Online Posts

around the world hold discussions and conduct activities in consideration of the society 100“100SEED” is a program that we launched on the occasion of our 100th anniversary. After

years from now.
Selecting “Quality Education” as the global theme,

global discussions in 2019, we launched activities to address educational issues in eachregion from 2020. In FY2021, we conducted 44 projects in 16 countries. Despite the impact

Sumitomo Corporation will make use of its humanof COVID-19, we have been exercising our ingenuity in each region to gradually expand

resources to implement this program on a medium- to

the initiative.

long-term basis, thereby contributing to society andachieving sustainable growth together with it.
Mission Statement for 100SEED
We have selected “Quality Education” as the grand theme of the 100SEED (SCEmergent Evolutional Deed) program upheld to mark the Sumitomo Corporation
Group’s 100th anniversary. Under this theme, we are committed to develop and

Item

Boundary

Unit

FY2020

FY2021

Number of projects(Number of participating
countries)

Sumitomo Corporation
and regional organizations

Projects(Countries)

31
(14)

44
(16)

Number of participating
employees

Sumitomo Corporation
and regional organizations

Employees

696

765

support a variety of social contribution activities on a global scale.
Recognizing that “Quality Education” is a vital part of the sustainable development

In recognition of management involvement,of society, we will continue to inspire ideas for supporting quality education toactivity targets, progress management andproduce the talent needed to solve the many social challenges facing the world.

other KPIs, we won the special “Tanemaki

By promoting 100SEED, we encourage our SC colleagues around the world to(Seeding) Century Award” for 100SEED at

create opportunities and leverage our diverse capabilities and resources so we canthe 19th Corporate Philanthropy Awards.

engage in activities that will dynamically realize our goal of “Enriching lives and theworld.”
100SEED provides us a valuable opportunity for personal growth by learning from

Refer to the following website for more information on this activity◆100SEED Website

others and pursuing individual ideas through collaboration. We will commit time and- Mission Statement for 100SEED

resources to social action that will benefit any of us seeking to better society- Enhancing Sustainability Management and 100SEED

through quality education.

- The Very First Story- ACTIVITIES AROUND THE WORLD© 2022 Sumitomo Corporation

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Recognition“100SEED” Social Contribution Program Looks ahead to the Next 100 Years
100SEED

100SEED Projects Around the World║ EAST ASIA

║ ASIA&OSEANIA

University Student

BUTTON UP / LIGHT UP /Internships: China

POWER UP Project:
ThailandTargeting

local

university

students

Sumitomo Corporation Thailand carries
out the following three activities that arecontributes to the development of thedesigned

next generation of human resources

education

who will lead the future. Activities

downstream: "BUTTON UP" to create

include lectures on the function ofequity and quality of education for the

trading

primary

companies,

hands-onwork

providefromschoolMission Earth

100SEED Days of Service

Educational Support for(SDG Education): Turkey(Volunteer Days): U.S.A.

a Multi-cultural Symbiotic
Society: Japanaround our bases in China, this projectto║ JAPAN║ AMERICAS║ EMEA&CIS

sustainable

upstream

students

toinexperience, and opportunities to thinkunderprivileged location, "LIGHT UP" toabout future careers and study.

train acquired skills to teachers toprovide quality education, and "POWER

Mission

Earth

is

a

project,

incollaboration with a local NPO, which
gives lessons to children in middle
school,introducing

them

to

the

concepts of sustainability and the SDGs.
The project has been restructured into
an online format due to the COVID-19
pandemic, with tablets provided todisadvantaged households.

This project has established a system

In partnership with NPOs providing

where employees can work at volunteer

support to children with non-Japaneseactivities during normal working hours

roots who are living in Japan, thisforproject offers after-school tutoring and

up

to

three

days

Increasing

employeeparticipate

in

each

year.
to

interpreting support for children who

activities,

need help with the Japanese language.

Volunteer Days enable employees to

Pro bono support is also provided tochoosefrommotivation

volunteer
a

range

of

supportactivities in their local communities.

NPOs undertaking these activities tohelp

strengthen

theirorganizational

operation.

UP" to deepen the understanding ofuniversity students regarding business.
Employees: 31 participants

Employees: 814 participants

Employees: 21 participants

Employees: 47 participants

Employees: 388participants

Total activity hours 377 hours

Total activity hours 1,267 hours

Total activity hours 350 hours

Total activity hours 376 hours

Total activity hours 4,112hours

Number of people (organizations) tobe supported: 67

Number of people (organizations) to besupported: 2,435

Number of people (organizations) tobe supported: 213

Number of people (organizations) to besupported: 16

Number of people (organizations)
to be supported: 8

Satisfaction: 100%

Satisfaction: 100%

Satisfaction: 100%

Satisfaction: 100%

Satisfaction: 100%

© 2022 Sumitomo Corporation

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Corporate Governance
Policy and Concept▌ Corporate Governance Principles
Sumitomo’s Business Philosophy and Sumitomo Corporation Group’s Management Principles form the backbone of the Group’s corporate ethics and represent the foundation underpinning ourcorporate governance. Based on this, we established the “Sumitomo Corporation Corporate Governance Principles”, recognizing that the essence of corporate governance is enhancing management
efficiency and maintaining sound management, as well as ensuring management transparency to secure the first two. Efforts to build a better corporate governance system and carry out businessactivities following these principles help the Company to achieve sustainable growth, enhance corporate value over the medium to long term, and fulfill its mission as a good corporate citizen, as well
as benefits the interests of shareholders and all other stakeholders. For this reason, we continuously work to further enhance and improve our corporate governance.

System▌ Corporate Governance System and Characteristics
Sumitomo Corporation, which has adopted an Audit & Supervisory Board system, seeks toensure the effective supervision and monitoring of management. This is achieved through theappointment of Outside Directors and Outside Audit & Supervisory Board Members, who havean independent stance, to incorporate more diverse perspectives in our decision-making andmanagement supervision, and through the establishment of a Nomination and Remuneration
Advisory Committee composed, in the majority, of Outside Directors, to increase theindependence, objectivity, and transparency of the Board of Directors related to the nomination
and remuneration of executive-level management. Furthermore, the introduction of the executive
officer system that clarifies the responsibilities and authority of business execution and theestablishment of the Management Council are among the measures designed to promote
speedier and more efficient decision-making and execution of business as part of the effective
corporate governance system we have put into place. The Management Council is the highest
executive-level decision-making body that takes into account diverse opinions and multifaceted
discussions in regard to specific key matters related to management, within the scope of themandate conferred by the Board of Directors. It meets in principle weekly, and its members
include the President and Chief Executive Officer, Officers in charge of each Corporate Group,
Officers responsible for each Business Unit, and General Managers of each Business Unit.
© 2022 Sumitomo Corporation

Sumitomo Corporation Corporate Governance Principles

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Corporate Governance
SystemDirectors and the Board of Directors▌ Composition of the Board of Directors▌ Adequate Deliberations and Enhancement of Monitoring
Functions by the Board of Directors

The membership of the Board of Directors is appropriate in numerical terms to facilitate

Agenda items for the Board of Directors are carefully selected to promote, more focusedadequate discussion and speedy and rational decision-making, and provides diversity in terms

discussion of management policy and plans and other important matters of relevance toof experience, knowledge, specialism, gender, and other characteristics. Moreover, out of thecompanywide management. “Agenda setting” is carried out where important management

11 Directors appointed, five are independent Outside Directors with differing experiences

topics for the Board of Directors that should be taken up for more intensive discussion

and specializations to ensure appropriate decision-making from more diverse perspectives

covering the next one-year period are set by all Board members through careful considerationand to further strengthen the supervisory functions of the Board of Directors. The Chairman

and discussion. To further strengthen its business execution monitoring functions, the Boardof the Board of Directors convenes meetings of the Board of Directors and presides over themas Chairperson. The Chairman of the Board of Directors supervises management but does notengage in routine operations and has no authority of representation. Furthermore, to allow
mutual checks and balances, the posts of Chairman of the Board of Directors and President
and Chief Executive Officer are in principle separate and not to be held concurrently by thesame individual. In addition, Sumitomo Corporation established the Sumitomo Corporation
Action Plan, and in agreement with the Japan Business Federation’s goal of at least 30%

receives regular progress reports on each business unit/initiative strategy and on the activities
of important committees*1 throughout the year, with the reports followed by a discussion
focusing on companywide issues. Moreover, to further enhance the quality of Board member
discussions, the Board of Directors holds off-site meetings*2 after in-person Board meetings
to more actively discuss important management topics, including management policy andplans as well as ESG issues. In FY2021, off-site meetings were held 13 times, with a total of
9.4 hours spent on discussions.

female executives by 2030 announced in March 2021, we set a target of at least 30% female*1 Compliance Committee, Internal Control Committee, IR Committee, Corporate

Directors and Audit & Supervisory Board Members by FY2030.

Sustainability Committee, IT Strategy Committee, etc.

▌ Independence of Outside Directors

and frank discussions*2 A venue involving all members of the Board of Directors that encourages free

Our five outside directors satisfy the standards on independence set by financial instruments
exchanges on which the Company is listed, as well as our in-house rules on Standards for
Appointment and Independence of Outside Directors and Outside Audit & Supervisory Board
Members. Leveraging a different type of experience and expertise, each Outside Director
contributes to our corporate governance by providing a variety of independent viewpoints.
Standards for Appointment and Independence of Outside Directors andOutside Audit & Supervisory Board Members (Japanese language only)© 2022 Sumitomo Corporation

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Corporate Governance
SystemDirectors and the Board of Directors▌ Evaluation of the Effectiveness of the Board of Directors
To maintain and enhance the effectiveness of the Board of Directors, each year Directors andAudit & Supervisory Board Members engage in analysis and evaluation of the Board’s
effectiveness through self-evaluation and other methods. This is followed by the disclosure ofoverviews of the results. In FY2021, in order to boost initiatives to further enhance the２. Evaluation Results Overview and Correspondence
Analysis of the questionnaire survey and interview results by a third party (external consultant)concluded that the Board of Directors has generally been functioning effectively. On the whole,as stated below, a majority of opinions were positive.
•

items as practiced since FY2020, and this enabled them to carry out sufficient discussion on

effectiveness of the Board of Directors, we conducted interviews by a third party in addition to
conducting a questionnaire survey (anonymous) as in previous fiscal year. The following is an
overview of the Board of Directors’ effectiveness evaluation and the results of such evaluation
for FY2021, which was reported to and deliberated at Board of Directors’ meetings held on
February 24 and March 29, 2022.

important management issues.
•

All 11 Directors and 5 Audit & Supervisory Board Members

Implementation
methodQuestionnaire survey (anonymous) and interviews conducted during the period
from November 2021 to December 2021.
Note: Implemented by a third party (external consultant).

Evaluation items(i) Selection of items to be deliberated on by the Board of Directors(ii) Deliberations based on changes in the external environment and/or
management environment(iii) Adequate provision of information in advance to members of the Board of
Directors(iv) Discussion by the Board of Directors with adequate reflection of stakeholders’perspectives and evaluations(v) Fulfillment of roles of Outside Directors(vi) Fulfillment of roles of the Chairperson(vii) Fulfillment of roles by Internal Directors (excluding Chairman of the Board of
Directors)(viii) Overall evaluation, etc.

Evaluation
process

The results of the questionnaire survey and interview responses collected by a third
party (external consultant) were reported to, and analyzed and evaluated by the
Board of Directors.

© 2022 Sumitomo Corporation

The management review for confirming progress on the Medium-Term Management Plan
“SHIFT 2023” was ample in scope and content and easy to understand.

•Members of the Board of Directors also engage in free and robust discussion at off-site
meetings. They were given extensive pre-briefings, and the questions and opinions

１. Evaluation Methods
Those covered

In FY2021, members of the Board of Directors paid careful thought to the setting of agenda

expressed on those occasions were presented at Board of Directors meetings, helping todeepen their discussion from a wide range of perspectives.
Based on the opinions and comments provided by Directors and Audit & Supervisory Board
Members and the issues that emerged in this evaluation, we will carry out the following actions
to further strengthen and enhance our corporate governance.
•

In FY2022, we will continue to monitor business execution through progress reviews of theMedium-Term Management Plan “SHIFT 2023” (reports on the state of progress in thebusiness portfolio shift, framework shift, etc.), reports on important large-scale investments,
progress management of medium-term goals related to the enhancement of sustainability
management (six key social issues), reports on the status of efforts on digital transformation(DX) and report on the follow-up for new human resource systems, etc.

•

We will strive to further enhance management strategy and policy discussions that take into
account diverse stakeholder perspectives, including shareholders and investors.

•

We will enhance efforts to further leverage the experience and insights of Outside Directors
outside of Board of Directors meetings.
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Corporate Governance
SystemDirectors and the Board of Directors▌ Establishment of the Nomination and Remuneration Advisory Committee
The Nomination and Remuneration Advisory Committee, of which a majority of members are Outside
Directors, and which is also chaired by an Outside Director, has been established as an advisory body to
the Board of Directors. The Committee meets as necessary, and is in charge of reviewing (1) policies andprocedures regarding appointment and dismissal of the President and Chief Executive Officer, (2) policies
and procedures regarding appointment and dismissal of the Chairman of the Board of Directors, (3)nomination criteria for Directors and Audit & Supervisory Board Members, (4) appointment and dismissal of
the President and Chief Executive Officer (including the nomination of a successor of the President andChief Executive Officer), (5) nominations of candidates for Directors and Audit & Supervisory Board
Members (including determination of Representative Directors and Executive Directors), (6) appointment ofManagement Council members, (7) the structures/levels of remuneration and bonuses for Directors andExecutive officers and the limit of remuneration for Audit & Supervisory Board Members, and (8) theadvisor system, and will submit the results thereof as recommendations to the Board of Directors. In
FY2021, the Nomination and Remuneration Advisory Committee met 7 times to deliberate theabovementioned matters, and submitted the results thereof as recommendations to the Board of Directors.

▌ Composition of the Nomination and Remuneration Advisory Committee
Total
Members

Internal
Directors

OutsideDirectors

Committee
Chairman

5 persons

2 persons (President and Chief Executive Officer,

3 personsOutside Director

Chairman of the Board of Directors)

Audit & Supervisory Board Members and the Audit & Supervisory Board▌ Enhancement of Auditing capabilities
The Audit & Supervisory Board comprises five members—two Inside Fulltime Audit & Supervisory Board

The Outside Audit & Supervisory Board Members must also have a sincere character, deep insight, andhigh-level skills as well as advanced specialized knowledge, particularly in fields such as law, accounting, or
corporate management, and extensive experience, and they too are appointed without regard for gender,
nationality, and so on. Among the Outside Audit & Supervisory Board Member, one is a legal expert (aformer Chief Justice of the Osaka High Court), one is a certified public accountant with considerable
knowledge of finance and accounting, and the other is a fulltime Audit & Supervisory Board Member of alisted company and has an experience in business management. All of the Outside Audit & Supervisory
Board Members satisfy the criteria on independence set by financial instruments exchanges on which theCompany is listed, as well as the Standard for Independence established by Sumitomo Corporation.

▌ Ensuring Audit Effectiveness
Each Audit & Supervisory Board Member attends important meetings such as the Board of Directors
Meeting, receives reports form Directors and employees, etc. regarding the execution of their duties, asksthem for explanations as necessary, inspects important internal authorization documents and examines thestatus of operations and the financial status regarding the head office and important operating locations. As
for subsidiaries, each Audit & Supervisory Board Member promotes communication and exchange of
information with Directors and Audit & Supervisory Board Members, etc. of subsidiaries, and receives
reports on the subsidiaries’ business as necessary.
The Audit & Supervisory Board Members' Administration Department (four employees) has been
established as a specialized organization to support the work of the Audit & Supervisory Board Members.
The Audit & Supervisory Board Members participate in personnel evaluations and transfers and so on
regarding these employees to ensure their independence from the Board of Directors.

▌ Collaboration between the Internal Auditing Department and Accounting
Auditors
To ensure audit efficiency, Audit & Supervisory Board Members interact closely with the Internal Auditing
Department, receiving reports on internal audit plans and their results in a timely manner. In addition, Audit

Members and three Outside Audit & Supervisory Board Members (including one woman). The Inside Audit& Supervisory Board Members exchange information with and monitor the auditing activities of the& Supervisory Board Members must have a sincere character, deep insight, and high-level skills as well as

accounting auditors through regular meetings. By attending audit review meetings and observing inventory

specialized business knowledge and a broad range of experience, and they are appointed without regard

audits by the accounting auditors, the Audit & Supervisory Board Members constantly work to improvefor gender, nationality, and other such characteristics.

audit efficiency and quality.

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Corporate Governance
System▌ The knowledge, experience and competencies, etc. (collectively, “Skills”) that the Board of Directors is required to possess, and Skills
that Directors or Audit & Supervisory Board Members currently in office possess（as of September 2022）
This table identifies the types of knowledge, experience and competencies, etc. (individually, "Skill" and collectively, “Skills”) that the Board of Directors is required to possess for fulfilling its roles,
and indicates which Directors or Audit & Supervisory Board Members currently in office possess such Skills. In our view, it is important that the Board of Directors as a whole possesses these
Skills. As for the reasons for identifying these Skills, please refer to the explanations in the next page.

Directors
Role

Term ofoffice as
Director

Director, Chairman

Masayuki Hyodo

Representative Director,
President and Chief
Executive Officer

Toshikazu Nambu

Representative Director,
Executive Vice President

Takayuki Seishima

Representative Director,
Senior Managing Executive
Officer

Reiji Morooka

Hirokazu Higashino

Name

Knowledge, experience and competencies, etc.（Skills）
Corporate
management

Investment / M&A

ICT / DX / Technology

ESG / Sustainability

Finance/ Accounting

Legal / Risk
management

HR management& development

13years
3months

●

●

ー

●

●

●

●

4years3months

●

●

ー

●

●

●

●

●

●

●

ー

●

ー

●

3years3months

●

ー

ー

ー

●

●

●

Representative Director,
Senior Managing Executive
Officer

3months

●

ー

ー

ー

●

●

ー

Representative Director,
Managing Executive Officer

3months

●

●

●

●

ー

ー

ー

Koji Ishida

Outside Director

5years3months

●

●

ー

ー

●

●

ー

Kimie Iwata

Outside Director

4years3months

●

ー

ー

●

ー

ー

●

Hisashi Yamazaki

Outside Director

4years3months

ー

ー

ー

ー

ー

●

●

Akiko Ide

Outside Director

2years3months

●

ー

●

●

ー

ー

ー

Takashi Mitachi

Outside Director

3months

●

●

ー

●

ー

●

●

Kuniharu Nakamura© 2022 Sumitomo Corporation

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SystemAudit & Supervisory Board Members
Name

Role

Term ofoffice as
Audit & Supervisory
Board Member

Knowledge, experience and competencies, etc.（Skills）
Corporate
management

Investment / M&A

ICT / DX / Technology

ESG / Sustainability

Finance/ Accounting

Legal / Risk
management

HR management& development

Michihiko Hosono

Senior Audit & Supervisory
Board Member (Full-Time)

3years3months

●

ー

ー

ー

ー

●

ー

Kazunari Sakata

Audit & Supervisory Board
Member (Full-Time)

3months

●

●

ー

ー

ー

ー

ー

Toshio Nagai

Outside Audit & Supervisory
Board Member

6years3months

ー

ー

ー

ー

ー

●

ー

Yoshitaka Kato

Outside Audit & Supervisory
Board Member

6years3months

●

ー

ー

ー

●

ー

ー

Yukiko Nagashima

Outside Audit & Supervisory
Board Member

1year
3months

●

●

ー

ー

ー

ー

●

About the tables on this page and the previous page
1.

This table identifies the types of knowledge, experience and competencies, etc. (individually, "Skill" and collectively, “Skills”) that the Board of Directors is required to possess for fulfilling its roles, and indicates which

2.

Since the Company is active in investing in various businesses, we consider “Corporate management” and “Investment/M&A” Skills to be particularly important. Under the ongoing medium-term management plan,

Directors or Audit & Supervisory Board Members currently in office possess such Skills. In our view, it is important that the Board of Directors as a whole possesses these Skills.
“SHIFT 2023,” we are promoting a business portfolio shift with a focus on digital transformation (DX) and the enhancement of sustainability management as two sweeping trends. To this end, we emphasize the Skill of“ICT/DX/Technology” for business reforms or business development through exploiting digital solutions or the mixture of technology and innovation solutions and the Skill of “ESG/Sustainability” for sophisticating
sustainability management. In addition, the Skills of “Finance/Accounting,” “Legal/Risk management” and “HR management and development” are important for supporting or administering the Company’s business
operations.
3.

The key Skills for Audit & Supervisory Board Members on which a high priority is placed are "Corporate management", "Finance/Accounting", and "Legal/Risk management", since they are responsible for auditing
Directors’ execution of duties.

4.

Since the Company carries out business transactions and investments all over the world, respective Directors or Audit & Supervisory Board Members are required to have a keen insight from a global perspective.
Knowledge concerning “governance” is another indispensable skill for serving as a Director or Audit & Supervisory Board Member. Because we mandate that all Directors and Audit & Supervisory Board Members
possess such two skills, they are not included in seven Skills that are indicated in the table and selected in paragraph 2 above.

5.

The Skills that the Board of Directors are required to possess may vary according to business strategies or changes in the external environment. This table will be updated from time to time based on the Board of
Directors’ review and discussions on required Skills.
Please refer to our website for the reasons for appointing and summary of expected roles of Outside Director.

© 2022 Sumitomo Corporation

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Corporate Governance
SystemInitiatives to Ensure Transparency of Business Management▌ Establishment of Disclosure Policy
To ensure that all stakeholders correctly understand its business management policy andbusiness activities, the Company not only discloses statutorily required information but also
actively discloses information on a voluntary basis.
Corporate Disclosure Policy▌ Policy on Cross-shareholdings and Standards for
Exercising Voting Rights
As a general rule, the Company will neither acquire nor hold shares in other listed companies
for purposes other than pure investment. However, the Company may decide to hold shares inlisted companies in some exceptional cases when the Company determines that it isappropriate. For such determination, the Company will comprehensively assess and verify thecapital cost of individual stocks and economic rationality and significance of holding the stocks▌ Status of Compliance with the Japan's Corporate
Governance Code
The Company complies all Principles of the Corporate Governance Code. Please refer toCorporate Governance Report for details.

in light of the necessity of partnering or other business needs. Each year, the Board of Directors
reviews whether or not the Company’s holding of listed shares is appropriate. If such annual
review concludes that specific shareholdings are of little significance, the Company will pushahead with the sales of the shares. In FY2021, the Company sold shares of 39 listed stocks(either in whole or in part), amounting to ¥38 billion in total. As of the end of March 2022, theCorporate Governance ReportCompany’s shareholdings in listed companies cover 64 stocks, with the total balance of ¥218.2
billion.
The Company also takes various considerations into account under the internal guidelines
when making decisions in exercising its voting rights. Having fully considered issues from bothquantitative and qualitative standpoints, it adequately exercises voting rights for each agenda
based on whether exercising voting rights will lead to enhanced medium- to long- term
corporate value at the investee company and the Company and to enhanced value for its own
shareholders. When a company holding the Company’s stock for purposes other than pureinvestment indicates intent to dispose of its holdings, the Company respects the decision inprinciple and ensures that their business relationship will not be influenced.

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Corporate Governance
SystemExecutive Remuneration▌ Remuneration Standards and Remuneration Composition
Ratios▌ Executive Remuneration Plan(● indicates the persons eligible for each type of remuneration, etc.)
Eligibility

Type of remuneration, etc.

Executive Directors/Executive Officers
*1

Fixed

Monthly Remuneration
Performance-Linked
Bonus

Chairman of theBoard ofDirectors*2

OutsideDirectors*3

Audit &
Supervisory
Board Members
*4

●

●

●

●

●

－

－

－

●

●

－

－

Taking into account recent performance and the business environment, we will increase
performance-level hurdles for remuneration to provide appropriate motivation to Executive Directors
and Executive Officers for increasing performance. Additionally, remuneration standards andremuneration composition ratio have been set at the appropriate level to increase the acquisition,
retention, and motivation of management, and their performance-linked nature increased,referencing objective remuneration market data*1 from an external specialized agency.
The following is an image of the remuneration of the Representative Director, President and CEO.
*1 WTW’s Executive Compensation Database

Variable Restricted Performance
Share Unit-BasedRemuneration*1 The remuneration of Executive Directors and Executive Officers consists of “monthly remuneration,” “performancelinked bonus”, and “Restricted Performance Share Unit-based remuneration.”*2 The remuneration of the Chairman of the Board of Directors, whose main role is management supervision as stipulated
in the “Sumitomo Corporation Corporate Governance Principles,” consists of “Restricted Performance Share Unit-based
remuneration,” which contribute to improving shareholder value, in addition to “monthly remuneration.”*3 The remuneration of Outside Directors, who are in a position to supervise management with a high degree of objectivity
and independence, consists solely of fixed remuneration (“monthly remuneration”) and is provided on a monthly basis.
*4 The remuneration of Audit & Supervisory Board Members, who are in a position to audit and supervise managementwith a high degree of objectivity and independence, consists solely of fixed remuneration (“monthly remuneration”) and isprovided on a monthly basis. The remuneration of each Audit & Supervisory Board Member is decided through discussions
between the Members within the maximum amount approved by shareholder resolutions.

▌ Revisions to Executive Remuneration
We have partially revised the remuneration plan to ensure that it is based on our environment,
management strategy and human resources strategy, with the aim of reinforcing our group’s
governance, increasing the corporate value over the medium to long term., and achieving its
business objectives. In specific terms, we have amended the details of our remuneration standards,
remuneration composition ratios and performance-linked bonus. Key points of the revisions are as
follows.
1. Review of target range of business results
2. Change to remuneration composition ratio
3. Reflection of stock price growth rate in performance-linked bonuses© 2022 Sumitomo Corporation*2 “Consolidated net income” is equivalent to the “profit attributable to owners of the parent” set out
in International Financial Reporting Standards (IFRS).
Basic profit cash flow” = “Basic profit*” – “Share of profit (loss) of investments accounted for using the equity method” +Dividend from investments accounted for using the equity method.”*“Basic profit” = (Gross profit + Selling, general and administrative expenses (excluding provision for doubtfulreceivables) + Interest expense, net of interest income + Dividends) × (1–31%) + Share of profit (loss) of investments
accounted for using the equity method.
Stock price growth rate = {(Average price of Company’s common shares in relevant fiscal year) ÷ (Average price ofCompany’s common shares in the previous fiscal year)} ÷ {(Average of TOPIX in relevant fiscal year) ÷ (Average of
TOPIX in the previous fiscal year)}
Stock growth rate = {(Average price of Company’s common shares in the month of termination of Evaluation Period + Totalamount of dividends during Evaluation Period) ÷ (Average price of Company’s common shares in the month ofcommencement of Evaluation Period)} ÷ {(Average of TOPIX in the month of termination of Evaluation Period) ÷ (Averageof TOPIX in the month of commencement of Evaluation Period)}

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Recognition

Corporate Governance
System▌ Performance-linked Bonuses
The potential range of business results has been changed from the viewpoint of establishingappropriate remuneration levels based on target performance levels. From the perspective ofreinforcing the relationship with management strategy, the total amount to be paid is determinedin accordance with the performance management index in medium-term management plan
SHIFT 2023, as well as the newly adopted stock price growth rate. Bonuses paid to individual
officers is distributed according to their position and personal evaluation and paid after the endof the fiscal year.

■Change of Potential Range of Business Results
The potential range of business results in terms of consolidated net income and basic profit
cash flow has been changed to ¥200 billion to ¥600 billion. If business results fall outside thisrange, the total amount of performance-linked bonuses to be paid will be decided separately by
the Board of Directors based on the report from the Nomination and Remuneration Advisory
Committee.
■Introduction of Stock Price Growth Rate
The Company added stock price growth rate as a new indicator for determining the total amountof performance-linked bonuses. The aim of this change is to show the results of medium-term
management plan SHIFT 2023 and have officers display a greater commitment to stock pricegrowth. The range of total performance-linked bonuses reflecting stock price growth rate ispresented below.

© 2022 Sumitomo Corporation■Personal Evaluations
Each Executive Director is evaluated on the basis of both financial and non-financial indicators
so that they can become more aware in regard to their commitment to management strategy
and results. Financial indicators mainly consider the status of achievement of the businessplans in the respective areas of responsibility. Non-financial indicators take into account thestatus of achievement of strategies of each SBU measured by KPIs and KAIs as well as thestatus of initiatives to address important companywide issues.
The ratio of financial indicators to nonfinancial
indicators in personal evaluation is 50:50. Of
evaluation based on non-financial indicators,
20% relates to the important companywide
issues of business reform through DX,
enhancement of sustainability management,
and promotion of D&I.

▌ Restricted Performance Share Unit-based Remuneration
To further encourage management to focus onpromoting efforts to increase the Group’s
corporate value over the medium to long termand sharing value with its shareholders, theCompany’s common shares (restricted) in an
amount determined according to theCompany’s stock growth rate during the threeyear evaluation period are provided to officers
each year in principle. The restriction period
will be from the day the shares are provided
until the day the recipient resigns or retires
from all their positions as Director or Executive
Officer of the Company or any other position
determined by the Board of Directors, in orderto realize shareholder value over the medium
to long term.
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Recognition

Internal Control
Policy and Concept
In order to realize sustainable growth and development
for the Sumitomo Corporation Group by enhancing theoperational quality of each of the Group companies, we
stipulate basic regulations for internal control, develop
and conduct appropriate internal control, and access theeffectiveness and take action to improve it. To rationallyensure compliance with laws and regulations throughout
the entire Group in relation to business activities,
safeguarding assets against loss, effectiveness andefficiency of operations, and reliability of financial
reporting, initiatives are being taken to improve group
governance.

System▌ Group Management Policy
Our approach to group management is to respect Jiritsu* management of each group company, to contribute to important decision-making at Board andother meetings through active dialogue based on relationships of trust as a shareholder, and to create new value through collaboration among groupcompanies including Sumitomo Corporation. For the purpose of sharing and implementing this approach within the group, we established the GroupManagement Policy (GMP) and have set Jiritsu, dialogue, and collaboration as the three principles of group management. In addition, we aim to achievesustainable growth of the Company and each group company and to maximize the corporate value of the entire Sumitomo Corporation Group by sharing
and putting into practice the values set out in the Sumitomo Corporation Group’s Corporate Mission Statement and GMP groupwide.
* Jiritsu is the Japanese term. In GMP, we define it to mean “following the rules necessary for the management of a Sumitomo Corporation Group company, such as theSumitomo Corporation Group’s management principles, strategies, and policies, to discipline oneself, to think, make decisions, act for oneself in order to achieve goals, and tobe accountable to stakeholders”.

▌ Conducting Internal Audits on a Regular Basis
The Internal Auditing Department, which reports directly to the President and Chief Executive Officer, is an independent organization that monitors theoperations of the Group, and audits organizations and operating companies of the Group. As well as reporting the internal audit results directly to the
President and Chief Executive Officer, in principle on a monthly basis, periodic reports are also made to the Board of Directors and the Audit &Supervisory Board.
The department regularly conducts audits on all aspects of internal control, comprising asset and risk management, compliance, and business operations.
It evaluates the effectiveness and adequacy of the internal controls of auditees, taking into account the significance of the inherent risks. At the same time,
it provides appropriate advice for improvements and expedites improvement and maintenance on the auditee’s own initiative, thereby contributing to theimprovement of governance and internal controls within the Sumitomo Corporation Group.

Periodically reports on the internal audit plans
and audit results

Periodically reports on the internal audit plans
and audit results© 2022 Sumitomo Corporation

Conduct internal audits / Provides appropriate advice for improvements,
expedites the improvement and maintenance on auditees’ own initiative

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Recognition

Compliance
Policy and Concept

System▌ Basic Compliance Policy▌ Compliance Management System

The basis for the Sumitomo Corporation Group's compliance is to win the trust of society by

Aiming for more agile responses to compliance issues which arise in the Group, Sumitomo

practicing the Activity Guideline that states "to comply with laws and regulations while

Corporation appoints a Chief Compliance Officer (CCO), who has ultimate responsibility for

maintaining the highest ethical standards."

compliance. Further, the Compliance Committee, which plans compliance measures, includes

Accordingly, we follow our principles of "Giving First Priority to Compliance," which means thatthe general managers not only of the Corporate Group but also of the Business Group, enabling

compliance takes priority over all activities of the Group and that we must never violate

it to examine such measures in a multifaceted way that reflects our actual business operations.

compliance as a result of giving priority to the pursuit of profit, and "Reporting Compliance

Our Group will actively continue to establish and improve the internal systems that realize ourIssues Immediately" or "Immediate Report," which means, in the event of a compliance problem,

principle of "Giving First Priority to Compliance."

employees must report the situation without delay to their line manager, including themanagement level personnel, or to the relevant department of the Corporate Group.
Compliance | Sumitomo Corporation▌ Sumitomo Corporation Group Compliance Policy
The Sumitomo Corporation Group Compliance Policy was developed in March 2019 based on
the previous Compliance Guiding Principles to clarify and adopt the basic policy above
throughout the Group. Educational programs, such as seminars and e-learnings, are provided
on a continuing basis with the aim of spreading and ensuring the adoption of the policy
throughout the Group. Sumitomo Corporation also has the Compliance Manual in place and will
review its effectiveness and propriety on a regular basis and revise the content of the Manual asnecessary.

Sumitomo Corporation Group Compliance Policy | Sumitomo Corporation© 2022 Sumitomo Corporation

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Recognition

Compliance
System▌ Overview of Speak-Up System and▌ Various Points of Contact▌ Operation of the SC Global Speak-Up System

Our internal rules stipulate and ensure that any issues or potential issues in relation toreport compliance-related issues, has been established and operated. We accept reports in 16 languages under this System.

The group-based Speak-Up system, which enables officers and employees of group companies both in and outside Japan tocompliance must be reported immediately (Immediate Report). Such issues include not
only the violation of antitrust/competition laws or anti-bribery/corruption laws but also
workplace misconduct, falsification of accounts, or harassment. If reporting through theusual reporting line is difficult for some reason, we maintain a "Speak-Up System"
available to officers and employees, who face an issue, to report it to the Chief
Compliance Officer through an internal or external hotline. Our Speak-Up Systemprovides various internal and external points of contact, and anonymous reporting is alsoavailable. Also, it is ensured that the whistle-blower is not subject to disadvantageous
treatment for making the report. In the fiscal year 2021, the Compliance Committee of
Sumitomo Corporation accepted 34 Speak-Up reports. The status of the operation of the
Speak-Up System is periodically reported to the Compliance Committee, the Management
Council, the Audit & Supervisory Board and the Board of Directors.
Please refer to our corporate website for more information about theoperation and initiatives for utilization of the Speak-Up System.

status of the

Activities▌ Appropriate Responses to Compliance Violations andPreventive Measures
In case of a compliance problem, the Company, primarily through the Legal Department and the Legal Compliance Department
with the aid of external specialists when necessary, and in cooperation with relevant departments in and outside of Japan,
promptly takes steps to establish the facts and clarify the causes of the incident. Based on the outcome, we take corrective
measures, disciplinary action, and recurrence preventive measures. The Compliance Committee Secretariat annually keeps
records of the details of the circumstances of compliance violations in the Group. These are analyzed, evaluated and used toplan future compliance measures. The results and details are deliberated at meetings of the Compliance Committee and thenreported to and discussed by the Management Council, the Audit & Supervisory Board, and the Board of Directors. Thus,
through this process of repeatedly improving and enhancing such measures while using the Plan-Do-Check-Action cycle, we
strive to increase awareness of and ensure compliance throughout the Group.

▌ Continuous Education Program Initiatives
The Compliance Manual, which explains particularly important issues, such as anti-bribery/corruption, compliance of antitrust
law, and security trade control, is communicated to all officers and employees of Sumitomo Corporation.
Both in Japan and overseas, we implement various education programs for each class of employee, such as new comers,
newly appointed general managers, and newly appointed corporate officers, as well as provide e-learning programs about thetheme according to the current situation for all officers and employees (including secondees and overseas workers) of
Sumitomo Corporation every year, in order to promote and deepen understanding of the Sumitomo Corporation Group
Compliance Policy and the Compliance Manual. In addition to these regular activities, we hold seminars and training sessions
on an ongoing basis as required under a specific theme, such as anti-bribery/corruption, compliance of antitrust law andsubcontract law, security trade control, prevention of insider trading, and elimination of harassment. Furthermore, we also
implement a variety of support measures to reinforce compliance systems at group companies.
© 2022 Sumitomo Corporation

Structure of the Speak-Up System

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Compliance
Activities▌ Anti-bribery/corruption Initiatives▌ Measures for Ensuring Compliance with Laws
Concerning Antitrust and Fair Competition

Based on the principle of "Giving First Priority to Compliance" and as stipulated in the Sumitomo

We stipulate fair competition in the Sumitomo Corporation Group Compliance Policy and ourCorporation Group Compliance Policy, the Group implements strict measures to prevent allpolicy for compliance with laws concerning antitrust in the Compliance Manual. We have also

forms of corruption. Specifically, we have established the Rules for Prevention of Bribery of

published a separate manual concerning antitrust/competition laws for our officers andPublic Officials, which regulate the provision of entertainment, gifts, invitations, and donations toemployees that describes key considerations in daily dealings. Additionally, we endeavor todomestic and foreign public officials as well as the selection of agents, and conduct required

ensure, by measures such as regular internal training, that antitrust/competition laws areinternal review. In addition, taking into account revisions to the laws and regulations of eachobserved.

country, and advice from various external specialists, and changes in other social circumstancesand other factors, we continuously review our internal rules, guidelines, and manuals. Further,
we extend these rules and manuals to overseas offices and group companies and encouragethem to establish and implement a system appropriate for the bribery risk level of each company,
and we also offer ongoing employee education, such as internal seminars, and work constantly
to prevent bribery and corruption in Japan and overseas.
The Group's principles and policies in this regard are summarized in the Sumitomo Corporation
Group Anti-Corruption Policy (enacted and announced in 2017). This Policy includes thefollowing statement: "The Sumitomo Corporation Group will not commit bribery or conduct any
activity raising the suspicion of bribing Japanese government or other public officials; and will asa principle prohibit its officers and employees from providing such officials with entertainment,
gifts, or the equivalent. It will not make any offer, payment, promise to pay, or authorize thepayment of any money or anything of value to any foreign government or other public official, forthe purpose of influencing any act or decision of such official in order to assist it in obtaining or
retaining business." This statement declares the Group's principles in relation to preventing
bribery. Furthermore, through this Policy, we explain our anti-bribery system and our initiatives
for the prevention of bribery to our business partners, and request their understanding andcooperation.

© 2022 Sumitomo Corporation

Sumitomo Corporation Group Anti-Corruption Policy▌ Security Trade Control and Logistics Compliance
As an integrated trading company, Sumitomo Corporation regularly implements various
measures, on a continuing basis, to ensure that we comply with treaties and internationalframeworks related to international trade, as well as Japanese laws and regulations related to
trading activities. Our group companies do likewise. We implement various measures related
to security trade control to prevent weapons or products and technology for civilian use that
could be converted to military use from falling into the hands of states or non-stateorganization (terrorists) which may develop weapons of mass destruction. We also provide
internal rules, manuals, and guidelines, and provide training sessions, instructions andmonitoring as needed to ensure compliance with laws and regulations related to tariffs andcustoms as well as those related to public order and safety.

▌ Prevention of Insider Trading
To prevent violations of insider trading regulations related to our business activities as well as
personal dealings by our officers and employees, we have established "Rules for Preventionof Insider Trading" as well as internal checking systems from various perspective. To ensurecompliance with insider trading regulations as well as internal rules, we also provide, on aregular basis, internal training courses and other activities to raise awareness.
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Social and Environmental Risk Management▌ Basic Principles on Social and Environmental Risk Management
The Sumitomo Corporation Group operates businesses dealing in different products andbusiness models in various regions of the world and its business activities have a variety of
impacts on the global environment and on different stakeholders such as local communities,

Major risks business may pose to society and the environment• Climate change • Biodiversity• Local residents’ human rights
labor, Child labor, Discrimination)• Pollution • Resource depletion• Employees’ human rights (Health and safety, Forced

business partners, and our officers and employees. To achieve sustainable growth together
with society, we work to control the social and environmental impacts of each business of theEnhancing Risk Management

Group, and, by monitoring its entire supply chain, to ensure that the impact of the associatedbusiness activities is not a threat to people’s lives or the global environment and does not

Policies

constrict the sustainability of our management. As the basis for these initiatives, we have

• Sumitomo Corporation Group Environmental Policy• Sumitomo Corporation Group’s Human Rights Policy• S u m i t o m o C o r p o r a t i o n G r o u p C S R Action Guidelines for
Supply Chain Management

established Environmental Policy, Human Rights Policy and CSR Action Guidelines for Supply
Chain Management to clarify our approach to social and environmental issues in the Group’sbusiness operation. Because the impact of each business on society and the environment andthe nature of the risks requiring management focus differ depending on the products dealt with,the business type and the region where it operates, risk management needs to be adapted tothe specific character of the business. Specifically, for each of our businesses, we obtain therelevant data, including information on its interface with society and the environment and theassociated risks. In addition, we ascertain whether serious issues are present by maintaining

Risk management in line with business attributes
and conditions• Recognition of risks faced• Communication with relevant stakeholders• Ascertainment of facts• Response based on legal compliance and alignment withinternational standards

communication channels with local communities, employees, and other stakeholders, andcheck not only that the business is legally compliant across the range of social andenvironmental issues but also that its response in the area complies with international
standards on the environment and human rights. Within the Sumitomo Corporation Group andits diverse range of businesses, the responsible business department of individual businesses

Business units / Initiative
Appropriate risk management

and the related corporate departments are working jointly to raise the standard of social andenvironmental risk management groupwide, utilizing the knowledge of outside experts.

Corporate group

Support in specialized areas© 2022 Sumitomo Corporation

External consultants
Provision of expertise

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Social and Environmental Risk Management▌ Framework for Social and Environmental Risk Management
The Sumitomo Corporation Group has established a companywide framework to perform appropriate monitoring of the social and environmental impact of the Group’s entire business activities. We
have prepared a self-assessment sheet on relevant social and environmental risks to be used at the time of investment application to identify anticipated risks and opportunities in terms of thenature and regional characteristics of each business. Decision-making is then carried out considering impacts on society and the environment. This includes having the Corporate Sustainability
Department participate in discussions as a specialist organization that addresses social issues depending on the risk. We also engage outside experts to check that the business is soundly
managed and does not have serious impacts on stakeholders by using environmental assessment by an environmental consultant and assessment of human rights and labor issues by a law firm,
considering the specifics of each business. As follow-up to the investment, the responsible business department and related corporate departments work together through dialogue with groupcompanies to carry out regular monitoring from the viewpoint of the environment, human rights, labor management, the supply chain, and other aspects. If an issue arises, remedial action is taken inline with the specifics of the case. Internal audits that take into account special characteristics of the business are used to confirm that management operations are legally compliant and meetinternational standards on social and environmental
issues. When a case relating to the impact of theSumitomo Corporation Group’s business activities isreferred to by a local community, a non-governmentalorganization (NGO), or another stakeholder, we
ascertain the facts and engage in dialogue anddiscussion toward improvement. If, as a result of thisprocess of review and monitoring of investments, an
important social or environmental risk is confirmed, theindividual response is reported or referred for further
discussion to the Management Council and the Boardof Directors through the relevant internal committees.

© 2022 Sumitomo Corporation

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Information Security
Policy and Concept

SystemThe Company acknowledges the importance of ensuring information security, and

The information managers in each organization categorize information assets based on their importance,

maintains appropriate measures including, but not limited to, the establishment andgive instructions for procedures and methods in order to handle these assets adequately, and work tomaintenance of relevant rules, primarily through IT Strategy Committee, which isensure information security, efficient information-related administrative procedures, and information sharing.

chaired by the Chief Information Officer (CIO). In October 2017, a new Information

For personal information, in addition to establishing a Privacy Policy to protect this as appropriate, we have

Security Policy was established.

put in place relevant rules and organizational structures.

Information Security Policy
1. Initiatives on Information Security
Sumitomo Corporation acknowledges the importance of ensuring information security

We also work on initiatives to minimize risk related to unexpected situations involving information security,
such as external attacks aimed at theft or destruction of corporate information. As well as using systembased safeguards, we conduct ongoing training and drills for employees while establishing and monitoring

and wishes to further enhance the company's trustworthiness in its business operations.

systems at major subsidiaries and other group entities. The Company also coordinates with specialized

Therefore, Sumitomo Corporation shall implement appropriate measures including, but

third-party organizations to stay up-to-date on relevant information and to enable swift and appropriate

not limited to, the establishment and maintenance of relevant rules and guidelines so as

responses.

to responsibly manage information assets on a consolidated basis globally and shallreview them regularly.
2. Compliance
Sumitomo Corporation shall comply with any applicable local, regional, national andinternational laws and regulations in relation to information security.
3. Management of Information Assets
Sumitomo Corporation shall preserve confidentiality, integrity and availability throughresponsibly managing all information assets including personal data and shall take allreasonable precautions in order to prevent unapproved disclosure, loss or impairment ofsuch data.
4. Response to Information Security Incidents
Whilst making the utmost endeavor to prevent information security incidents fromoccurring, in the unlikely event such an incident should occur, Sumitomo Corporation
shall respond promptly to the incident and implement whatever preventive measures arenecessary to avoid recurrence.
5. Awareness Education of Information Security
Sumitomo Corporation shall regularly promote and maintain the provision of information
security education including, but not limited to, further heightening the awareness of theimportance of responsibly managing information assets.
© 2022 Sumitomo Corporation

IT Strategy Committee

President and Chief
Executive Officer

Information security-related initiatives
 Planning, drafting, and implementation of
measures Researching and responding to
information leaks, etc.

Management
Council(Information Security-related)

Chief Information Officer（CIO）（Chief Strategy Officer）

Chairperson：CIO
Vice chairperson：CDO
Members：
CAO, Assistant CAO (General Affairs & Legal),
Assistant CFO (Accounting), General managers ofCorporate Planning & Coordination Dept.,
Corporate Communication Dept.,
IT Governance & Administration Dept.,
Global Human Resources Management Dept.,
Corporate Legal & General Affairs Dept.,
Legal Compliance Dept.,
Financial Planning & Coordination Dept.,
Treasury Services Dept., Digital Business Division,
Planning & Coordination Dept., two business Unit
Secretariat：
IT Governance & Administration Dept.,
Information Technologies Planning & Promotion Dept.
Digital Solution Business Dept. No.2

Corporate
group

Business units

Domestic
offices

Overseas
offices

Information managers
 Responsible for overseeing information management for organization
 Tasked with swift response measures in the event of an occurrence(or the threat of an occurrence) of unpredicted information security
incidents

Report incidents regarding confidential information leaks, etc., andrespond to those incidents

Privacy policy

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Stakeholder Engagement▌ IR/SR Activities▌ Relationships with Stakeholders（SR: Shareholder Relations）

The Sumitomo Corporation Group places importance on dialogue with various stakeholders

We are working to build relationships with shareholders, investors, and other stakeholders outside thearound us. To build a relationship of trust with each stakeholder, we proactively provide

Company through fair disclosure. The Investor Relations Department has established four guidelines for its

information on our activities and ensure continuous communication with them. Through these

activities. These are Proactive Disclosure, Sincere Dialogue, Timely and Appropriate Sharing, andefforts, the Group keeps informed of stakeholders' expectations and concerns, based on which

Constructive Proposals. Under the supervision of the executive officer with responsibility, the Investor

we will promote our sustainability and improve our long-term value.
Shareholder/investors

Financial
institutions

Government
agencies/ economic
organizations

Local
communities

Sumitomo
Corporation
Group

NGO・NPO

Customers/
consumers

Employees

Business
partners

Stakeholders
Stakeholders/investors
Financial institutions

Government
agencies/economic
organizations

Local communities
Business partners
Customers/consumers
NGOs/NPOs
Employees© 2022 Sumitomo Corporation

Relations Department works with other relevant departments to disseminate information in a timely andappropriate manner and solicit the opinions of external stakeholders through active communication. These
opinions are shared internally as feedback, based on which proposals are made and discussions held that
help to enhance management. Through this cycle of activities, we will deepen external stakeholders’
understanding of the Group and also contribute to the strategy execution and value creation capabilities ofall officers and employees as internal stakeholders, thereby increasing corporate value.

Guidelines and Activities

Major means of dialogue
General meeting of shareholders, Investor meeting for annual results, Investor
Day, integrated report, annual securities report, business report for shareholders,

Proactive disclosure to and sincere dialogue
with external stakeholders

Timely and appropriate sharing with andconstructive proposals to internal stakeholders

We strive for appropriate disclosures and expanded

We provide evaluations and opinions received fromwebsite, reporting to credit rating agencies, various small meetings etc.

explanations

Communication with government agencies and international organizations in

Additionally, we have established opportunities forJapan and abroad, participation in discussion meetings and round-tableconferences with government offices, activities through business and industrial

of

both

financialandnon-financial

information based on our Corporate Disclosure Policy.
proactive dialogue with shareholders and investors
throughout the year to deepen understanding of theassociations, etc.

Group and solicit the opinions of stakeholders.

Dialogue with local residents in business activities and support for communities,

FY2021 Resultssocial contribution activities, etc.
Integrated report, website, advertisements, customer information office, supply
chain survey, etc.
Cooperation and communication with NGOs and NPOs in business activities,
cooperation in social contribution activities, responses to surveys, etc.
Internal magazine, Intranet, training sessions and seminars, labor/management
round-table meeting, employee awareness survey, the speak-up system, etc.

Internal
stakeholders

Investor Relations
Department

External
stakeholders

Number of individual meetings: Approx. 250 times(58 times of which were ESG/SR related)
Number of times management attended
President : 11 CFO : 22 CSO : 6
Business unit meetings
Held

Investor Day 2021
Held

Number of online meetings
held for individual investors
６timesTotal participation
4,838

external stakeholders to internal stakeholders including
management as feedback, which are used for proposals
and discussions that help to improvement management.

FY2021 Results
Number ofManagement Council
reports2

Number of regularmeetings with the
President and Chief
Executive Officer
4

IR Committee
Meets 1 time monthly
in principle

IR quarterly Report*
Published QuarterlyInternal IR meetings: Held
*In-house IR activity report
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ESG Quantitative Data
Environment (Climate Change)★ External Assurance：For more information on the third-party assurance report, please refer to P.137.

Item
GHG Emissions (Scope1, 2)(Components) Scope1<Energy-related CO2>

Boundary

Unit

Consolidated

thousandt-CO2eScope2FY2018
1,570
939
630

FY2019
1,475
792
683

FY2020
2,175
1,523
653

FY2021
2,062 ★
1,389 ★
672 ★

* The boundary of “Consolidated” is non-consolidated, consolidated subsidiaries and Joint operations. We have added Joint operations to the boundary from FY2020. For Joint operations, the amountequivalent to the investment ratio as of the end of March of the reporting period is included in the environmental data.
* CO2 emission factors for（Non-consolidated in Japan) The adjusted emission factors of individual power companies. Before FY2020 results, the basic emission factors were used.
electricity: (market based（Consolidated subsidiaries in Japan) The average emission factors of all power companies.
method)(Overseas) Emission factors from electricity generation are based on the country-specific data in 2019 listed on "Emissions Factors 2021", an IEA (International Energy Agency)
statistics. Before FY2020 results, Emission factors from electricity generation are based on the country-specific data in 2013 listed on "CO2 EMISSIONS FROM FUELCOMBUSTION 2016 EDITION".

* CO2 emission factors other than those from electricity generation are based on a manual for GHG emissions accounting, reporting, and disclosure systems published by Japan’s Ministry of theEnvironment and Ministry of Economy, Trade and Industry.
* The breakdown of 2,062 thousand t-CO2e in FY2021 by business activity is 967 thousand t-CO2e for business other than power generation and 1,095 thousand t-CO2e for power generation.

* The main reason for the increase of GHG emissions in FY2020 compared to FY2019 is the addition of Joint operations to the boundary of data.
We couldn't collect the environmental data for 38 sites due to COVID-19 lockdown or working from home in FY2019. In FY2018, GHG emissions of these sites were equivalent to about 5.2% of thetotal GHG emissions.

（Reference）
Sumitomo Corporation Group’s
CO2 Emissions targeted for
Carbon Neutrality

Item（Components by Activity）

Unit
Business other than power
generation
Power generation business
Fossil energy concession

thousandt-CO2eFY201959,9391,005

FY202055,367974

FY202155,497967

43,126

40,582

41,36815,80813,811

13,162* CO2 emissions by activity are calculated as the target of the Sumitomo Corporation Group's carbon neutrality. This total includes the above [GHG Emissions (Scope1, 2)].
For details, please refer to the special feature [Climate Change Initiatives] in this book .

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FeatureEnvironment

SocialESG
ESG
quantitative data
Quantitative
Data

Governance

External
Recognition

ESG Quantitative Data
Environment (Climate Change)
Item
GHG Emissions (Scope1 <Non energyrelated CO2 and GHGs other than CO2>)（Components）Non energy-related CO2
Methane（CH4）
Dinitrogen monoxide（N2O）
Hydrofluorocarbons（HFCs）
Perfluorocarbons（PFCs）
Sulfur hexafluoride（SF6）
Nitrogen trifluoride（NF3）★ External Assurance: For more information on the third-party assurance report, please refer to P.137.
Boundary

Consolidated

Unit

thousandt-CO2eFY2018FY2019
0
0
0
0
0
0
0
0

FY2020
0
0
0
0
0
0
0
0

4
0
0
4
0
0
0
0

FY2021
232
0
129
103
0
0
0
0

★

* Group companies emitting more than 3,000 t-CO2e for each gas per year are subject to the aggregation of Scope1<Non energy-related CO2 and greenhouse gases other than CO2>, under the Greenhouse Gas
Emissions Accounting, Reporting, and Disclosure System in Japan.
In FY2018 and FY2019, we aggregated non-consolidated and consolidated subsidiaries in Japan and the boundary of Scope1<other GHGs> was expanded to consolidated (excluding Joint operations) in FY2020.
FY2021 covers consolidated (including Joint operations). For Joint operations, the amount equivalent to the investment ratio as of end of March of the reporting period is included in environmental data.

Item
GHG Emissions （Scope3）

Upstream transportation and（Components）
distribution
Waste
Overseas Business Trips
CommutingDownstream Leased Assets

Boundary

Nonconsolidated(in Japan)

Unit

thousandt-CO2eFY201871.32

FY201962.19

FY202034.38

FY2021
33.19

★

5.22

5.50

3.88

4.09

★

0.01
30.23
0.64
35.23

0.01
22.40
0.61
33.66

0.01
0.07
0.14
30.29

0.01
0.57
0.37
28.15

★
★
★
★

* The boundary of non-consolidated (in Japan) includes the head office, domestic branches and sub-branches.
* GHG emissions from Upstream transportation and distribution include the transport of cargo within Japan for which Sumitomo Corporation is the cargo owner, and are calculated based on a manual for GHG emissions
accounting, reporting, and disclosure systems published by Japan’s Ministry of the Environment and Ministry of Economy, Trade and Industry.
Sumitomo Corporation complies with the Act and reduces the use of energy of transportation through promotion of modal shift (utilization of railroads and vessels), optimization of delivery routes and loading on vehicles,
promotion of eco-driving, etc. We have set a target of reducing the use of energy from Upstream transportation and distribution per shipping weight by at least 1% annually in Japan.
* GHG emissions from waste are calculated from all general waste of Sumitomo Corporation.
Up to FY2018, emissions were calculated using emission intensity for incineration treatment published by the Carbon Footprint Communication Program. The results after FY2019 were calculated using the emission
intensity for each type of waste, which is published in the emission intensity database for calculating greenhouse gas emissions and other emissions by organizations throughout the supply chain. The calculation of GHG
emissions for FY2021 uses the emission intensity database Ver.3.2.
GHG emissions due to overseas business trips are the emissions from flights departing from and arriving in Japan that Sumitomo Corporation employees took. Business trip destinations are classified into 12 areas andpassenger-kilometers are estimated based on the travel distance between Japan and representative airport of each area. GHG emissions due to overseas business trips are calculated by applying CO2 emission factors
published by the UK's Defra to the passenger-kilometers.
* GHG emissions from commuting are those from the commuting of Sumitomo Corporation's employees working in Japan, calculated by using the emissions factors per passenger-kilometer for passenger transport bytransport mode published in the Ministry of Land, Infrastructure, Transport and Tourism publication "CO2 Emissions in the Transport Sector" up to FY2020.
FY2021 results were calculated using emission intensity per number of employees and working days by work type and city classification, which is published in the emission intensity database for calculating greenhouse gas
emissions and other emissions by organizations throughout the supply chain (Ver. 3.2).
* GHG emissions from downstream leased assets are those from the buildings that Sumitomo Corporation owns and leases to tenants, using by CO2 emission factors described in the Act on the Rational Use of Energy inJapan.
* The total GHG emissions (total amount of the above Scope1, 2 and Scope3) were 1,537 thousand t-CO2e／2,214 thousand t-CO2e／2,327 thousand t-CO2e in FY2019, FY2020, and FY2021 respectively.
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FeatureESG Quantitative Data
Environment (Climate Change)

Environment

SocialESG
ESG
quantitative data
Quantitative
Data

Governance

External
Recognition★ External Assurance：For more information on the third-party assurance report, please refer to P.137.
Item

Boundary

Energy Consumption

Consolidated

Electricity Consumption

Unit

thousandGJ
MWh

FY2018FY2019FY2020

FY2021

17,74817,062

29,574

28,680 ★

1,412,661

1,534,809

1,525,641

1,645,278 ★

* The boundary of “Consolidated” is non-consolidated, consolidated subsidiaries and Joint operations. We have added Joint operations to the boundary from FY2020. For Joint operations, the amount equivalent to the investment ratio as of the end of
March of the reporting period is included in the environmental data.

* Energy consumption does not include energy derived from biomass fuels.

* Energy conversion factor from electricity consumption: 3.6 (MJ/kWh).
* Energy conversion factors from other than electricity consumption are based on the Act on the Rational Use of Energy in Japan.
The main reason for the increase of energy consumption in FY2020 compared to FY2019 is the addition of Joint operations to the boundary of data.
Electricity consumption includes the electricity purchased from power generation companies within the boundary of environmental data.
* The amount of electricity consumption which was derived from renewable energy was 34,323MWh in FY2021.
* We couldn't collect the environmental data for 38 sites due to COVID-19 lockdown or working from home in FY2019. In FY2018, energy consumption of these sites were equivalent to about 7.3% of the total energy consumption and electricity
consumption of these sites were equivalent to about 7.1% of the total electricity consumption.

Environment (Water)
Item
Water Withdrawal（Components of Water Sources）

Boundary
Third-party sources,
Industrial water
GroundwaterRivers, lakes
Sea
Rainwater

Consolidated

Water Discharge（Components of Water Sources）（Components of discharge destination）

Third-party sources,
Industrial water
GroundwaterRivers, lakes
Sea
Rainwater
Number of sites
Third-party sources
GroundwaterRivers, lakes
Sea

thousandm3

thousand m3/million yen

Water Withdrawal per consolidated revenue
Water Withdrawal inwater-stressed areas

Unit

Consolidated

Consolidated

FY2018118,236

FY201920,144FY202093,120

FY2021

78,107

3,378

4,206

4,807

6,809

110,101
4,757
0
0

13,0082,930
0
056,08531,701
2
526

34,34235,998
3
955

0.022

0.015

0.020

0.014

366

2,041

2,897

thousand
m3

-

Site

-

thousand
m3

-

303

793

895

63
74
15,097
11,173
50
2,974
900

721
2
526
60
52,72348,016
200
3,512
995

956
87
3
955
53
7,205
2,540
230
3,461
974

* The boundary of “Consolidated” is non-consolidated, consolidated subsidiaries and Joint operations. We have added Joint operations to the boundary from FY2020. For Joint operations, the amount equivalent to the investment ratio as of the end of
March of the reporting period is included in the environmental data.
* Of the 78,107 thousand m3 of water withdrawal in FY2021, we have obtained third-party assurance for 24,246 thousand m3★ of water withdrawal excluding Europe and Americas fresh produce business, for which partial estimates have been adopted .
* We couldn't collect the amount of water withdrawal for 38 sites due to COVID-19 lockdown or working from home in FY2019. In FY2018, Water consumption of these sites were equivalent to about 50.5% of the total water withdrawal.
* The main reason for the increase of water withdrawal in FY2020 compared to FY2019 is the reactionary increase due to the lack of the environmental data for some sites by COVID-19 lockdown or working from home in FY2019, and the addition of Joint
operations to the boundary of data from FY2020.
* Locations with a water risk level of 3 (High) or higher are aggregated as water-stressed areas on the World Resources Institute (WRI)'s "WRI Aqueduct".
* In case where it is difficult to grasp the amount of discharged water, we estimate the amount of discharged water by assuming that the amount of water Withdrawal = the amount of discharged water.
As a result of our efforts to determine and refine the data, the amount of discharged water in FY2021 decreased significantly.
Our Group consumes a high percentage of water for fruit cultivation (including evaporation) and recycling without discharging water after use, which results in a smaller amount of discharged water compared to the amount of water withdrawal.
* [Water Withdrawal -Components of Water Source-], [Water Withdrawal in Water-stressed areas], and [Water Discharge] are not subject to assurance engagement.
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FeatureEnvironment

SocialESG
ESG
quantitative data
Quantitative
Data

Governance

External
Recognition

ESG Quantitative Data
Environment（Resources and Waste）
Item

Boundary

Waste Emissions
General waste from Business Operations – Recycled Volume

Unit

FY2018FY201944,38133,30536,48036,413

175

111

41

44

6

6

2

2

％

96.5

95.0

96.1

95.6

General waste from Business Operations – Final Disposal Volume
Industrial waste of plastic - containing products - Waste Volume
Industrial waste of plastic - containing products - Recycled Volume
Industrial waste of plastic - containing products – Thermal Recovery Volume

Non-consolidated(in Japan)tHazardous Waste Emissions
Air Pollutant Emissions

thousandsheetsPaper Consumption

FY2021tConsolidated

General waste from Business Operations – Recycling Ratio

FY2020

-

-

-

151

-

-

-

21

-

-

-

93

1.08

7.01

6.29

1.36

0

0

0

0

18,604

14,516

4,559

5,254

* The boundary of “Consolidated” is non-consolidated, consolidated subsidiaries and Joint operations. We have added Joint operations to the boundary from FY2020. For Joint operations, the amountequivalent to the investment ratio as of the end of March of the reporting period is included in the environmental data.
The boundary of "Non-consolidated (in Japan)" includes the head office, domestic branches and sub-branches.
* Waste emissions are for general waste from business operations; industrial waste and valuable resources are not included.
* We couldn't collect the data on waste emissions for 38 sites due to COVID-19 lockdown or working from home in FY2019. In FY2018, waste emissions of these sites were equivalent to about 0.6%of the total waste emissions.

Environment（Others）
Item

Boundary

Percentage of sites covered by ISO14001

Non-consolidated(in Japan)

Unit© 2022 Sumitomo Corporation

Number of caseAmount of penalties

Non-consolidated(in Japan)

FY2019FY2020

FY2021

100

100

100

100

-

19

19

21

case

0

0

0

0

yen

0

0

0

0

％

Consolidated

Violations of environmental laws and regulations(penalties of one million yen or more, etc.)

FY2018115

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FeatureEnvironment

SocialESG
ESG
quantitative data
Quantitative
Data

Governance

External
Recognition

ESG quantitative data
Society (Personnel Data)
Item

Boundary

Number of employees

Consolidated

Number of temporary employees
Number of employees [Male/Female]personMale

FY2017FY2018FY2019FY2020

FY202173,016

65,662

72,642

74,92074,25325,61925,70027,60428,52328,169

3,907

3,910

3,973

3,937

3,852

1,184

1,216

1,270

1,303

1,298

Total

5,091

5,126

5,207

5,240

5,150

Male

107

104

118

102

75

58

91

51

30

FemaleNumber of new employees

Unit

FemaleNon-consolidated

personNon-consolidated

person

50
157

162

209

153

105

Ratio of female new employees

Non-consolidated

%

31.8

35.8

43.5

33.3

28.6

Ratio of non-fulltime employees, such as contract and temporary employees*

Non-consolidated

％

6.4

7.2

7.5

7.0

6.5

7

34

27

24

14

1

2

5

3

4

Total

Number of mid-career employees

MaleFemaleNon-consolidated

personTotal
Employment rate of disabled persons
Number of managers

Non-consolidated%

Male
FemaleNon-consolidated

personTotal
Ratio of female Managers
Ratio of employees who are covered by a collective bargaining
agreement
Average length of service (years)

32

27

18

2.24

2.11

2.2

2,599

2,549

2,585

2,587

2,566

153

169

184

202

208

2,752

2,763

2,771

2,789

2,774

%

5.6

5.9

6.45

7.2

7.5

Non-consolidated

%

57.6

59.1

59

59.2

60.4

19

18.8

18.7

19.1

19.5

16.1

16

15.6

16.3

16.6

Overall mean

18.3

18.2

18

18.4

18.8

Male

2.3

1.8

1.8

1.9

3.4

2.6

2.3

2.4

1.7

3.0

2.4

1.9

2.1

1.9

3.3

2.4

1.9

1.9

1.9

3.0

Male

FemaleNon-consolidated

Non-consolidated

year/person

%

Total
Voluntary turnover rate (Compared to the number of employees of theprevious year)

37
2.24

Non-consolidated

FemaleTurnover rate of full-time employees

8
2.21

Total

Non-consolidated%* The calculation method has been changed since FY2018, and the past year has also been reclassified.
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SocialESG
ESG
quantitative data
Quantitative
Data

Governance

External
Recognition

ESG Quantitative Data
Society (Work Styles)
Item

Boundary

Unit

FY2017FY2018FY2019FY2020

FY2021

Average monthly overtime hours

Non-consolidated

hours/minutes

9 hours 12 minutes

9 hours 53 minutes

7 hours 47 minutes

12 hours 49 minutes

12 hours 20 minutes

Average annual days of paid vacation acquired*Non-consolidated

day

16.8

16.9

17.1

12.9

12.8

Spouse maternity leaveNon-consolidated

case

74

90

92

83

70

Leave to look after a sick child

Non-consolidated

case

215

237

225

173

169

Number of employees who took family care leaveNon-consolidated

person

1

0

1

0

0

Number of employees who took maternity leaveNon-consolidated

person

79

71

73

87

70

158

181

179

189

156

66

71

57

73

60

224

252

236

262

216

Male
Number of employees eligible for child care leave

FemaleNon-consolidated

person

Total

2

10

9

34

41

66

71

56

73

60

Total

68

81

65

107

103

Male

0

10

9

32

36

36

54

64

29

8

Male
Number of employees who took child care leave

Number of employees who returned to work after taking childcare leave
Ratio of employees who returned to work after taking childcare leave

FemaleFemaleNon-consolidated

Non-consolidated

personpersonTotal
Male
FemaleNon-consolidated

%

Total

36

64

73

61

44

ー

100

100

100

100

92.3

100

95.6

96.7

100

92.3

100

96.1

98.4

100

Number of individuals using shortened work hoursystemNon-consolidated

person

129

136

165

173

200

Number of cases of violations of the Labor standards Act

Non-consolidated

case

1

3

3

5

5

* The calculation method has been changed since FY2018, and the past year has also been reclassified.

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Corporation group

FeatureEnvironment

SocialESG
ESG
quantitative data
Quantitative
Data

Governance

External
Recognition

ESG Quantitative Data
Society (Occupational Safety and Health)
Item
Number of occupational accidents
Number of deaths by occupational
accidents
Number who suffered Lost Time Incidents(LTI)
LTIFR (Lost Time Injury Frequency Rate)

Employees (full-time)
Employees
Employees (full-time)
Employees

Boundary

Unit

Nonconsolidated

case

Nonconsolidated

case

Boundary

Unit

FY2017FY2018FY2019FY2020

FY2021

2

1

3

2

2

0

0

0

0

1

2

1

3

1

1

0.20

0.10

0.29

0.11

0.11

FY2017FY2018FY2019FY2020

FY2021Society (Human Resources Development)
Item
Total number of lectures
Number of employees participatingin training
Total hours of training received

Ability development training*

Nonconsolidated

Number of employees dispatched overseas
Number of employees undergoing training overseas
Annual education and training cost per employee

326

340

286

255

person11,818

14,646

14,963

12,211

62,96775,08965,65250,806

119,894

12.4

14.7

12.7

9.7

23.4

person

1,101

1,153

1,144

1,098

976

person

94

96

67

34

76

478,884

555,403

501,830

325,604

327,587hour

Average hours per employee
Nonconsolidated
Nonconsolidated
Nonconsolidated

919

sessionyen

44,876*Training hosted by the head office targeted at head office employees and locally recruited employees of overseas bases and business companies. Figures from FY2021 include training
conducted by business units in addition to the training organized by HR.

Society (Social Contribution)
Item
Social contribution activities
Political donations© 2022 Sumitomo Corporation

Expenditure for social contribution
activities
Number of employees who usedthe volunteer leave program

Boundary

Unit

Consolidated

million yen

Nonconsolidated
Nonconsolidated

FY2017FY2018FY2019FY2020

FY2021

1,556

1,528

1,980

1,654

1,655

person

3

7

12

1

10

million yen

24

24

28

28

28

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FeatureEnvironment

SocialESG
ESG
quantitative data
Quantitative
Data

Governance

External
Recognition

ESG Quantitative Data
Governance (Board of Directors, Audit & Supervisory Board, Nomination and Remuneration Advisory Committee)
Board of Directors*

Item

Insidedirectors

Independent
outsidedirectors

Boundary

Unit

6

6

6

6

0
6

0
6

0
6

0
6

2

3

3

3

3

1
3
9
11
21

2
5
11
18
20

1
4
10
10
16

2
5
11
18
21

2
5
11
18
22

Male

2

2

2

2

2

Female
Total

0
2

0
2

0
2

0
2

0
2

3

3

3

3

2

0
3
5

0
3
5

0
3
5

0
3
5

1
3
5

Male

Non-consolidated

personMale

Non-consolidated

person

Total

1

1

1

1

1

14
6

17
13

15
6

17
13

17
19

Male

2

2

2

2

2

Female
Total

0
2

0
2

0
2

0
2

0
2

2

2

2

2

2

1
3
5

1
3
5

1
3
5

1
3
5

1
3
5

%

60

60

60

60

60

time

6

7

5

11

7

Non-consolidated
Insidedirectors

Independent
outsidedirectors* Figures at the end of June of each fiscal year

time％

personMale
Female
Total

Total
Ratio of outside directors in the Nomination and Remuneration Advisory
Committee*
Number of Nomination and Remuneration Advisory Committee meetings

FY2021

0
6

FemaleTotal
Number of outside Audit & Supervisory Board Memberswith expertise in finance and accounting*Number of Audit & Supervisory Board Meetings
Ratio of female Directors and Audit & Supervisory Board*
Nomination and Remuneration Advisory Committee*

FY2020

6%
time

Independent
outsidedirectors

FY2019

Male

Total

Insidedirectors

FY2018

FemaleTotal

FemaleTotal
Ratio of female Directors*
Number of Board of Directors meetings
Audit & Supervisory Board*

FY2017

Non-consolidated

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SocialGovernance

ESG
ESG
quantitative data
Quantitative
Data

External
Recognition

ESG Quantitative Data
Governance (Remuneration)
Item
Remuneration of Directors

Boundary

Directors(Excluding outside directors)

Unit

FY2017

Inside Audit & Supervisory Board
Members

FY2020

FY2021Monthly remuneration

530

480

474

470

380

174

327

194

－

513

Stock options

64

14

－

－

-

Restricted stock-based
compensation

－

73

92

86

21

－

66

70

36

65

ー

ー

ー

ー

121

Total

769

959

831

592

1,099

Monthly remuneration

41

67

65

87

95

Total

41

67

65

87

95

86

87

87

87

87

38

38

38

50

54

Nonconsolidated million yen

Restricted performance shareunit-based remuneration

Remuneration of Audit &Supervisory Board Members

FY2019Bonus for Directors

Performance share unit-based
stock compensation

Outside directors

FY2018Monthly remuneration

Outside Audit & Supervisory Board
Monthly remuneration
Members

Nonmillion yen
consolidated

Governance (Compliance)
Item
Compliance-related seminars and other training programs

Of the above, seminars and other training programs related
to anti-bribery and anti-corruption

Boundary
Number of times
Number ofparticipants
Number of times
Number ofparticipants

Unit
time

Head Office ordomestic/overseas
corporations*2

persontime
person2019*1≥270times

Total of ≥19,160person≥80times

2020*1

FY2021(April 2021 to March2022)≥150times≥140times
Total of ≥19,890person≥70timse

Total of ≥ 3,100person Total of ≥ 10,800person

Total of ≥ 20,990person≥50times
Total of ≥ 5,450person*1 Figures from January to December of each fiscal year
*2 Including training programs conducted by Sumitomo Corporation or its regional offices for business-line subsidiaries in Japan or overseas.

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FeatureEnvironment

SocialESG
Quantitative Data

Governance

External
External
Recognition
Recognition

External Recognition
Assessment organizations
FTSE4Good Index Series / FTSE Blossom Japan Index / FTSE Blossom

S&P/JPX Carbon Efficient Index

Japan Sector Relative Index

We were selected in S&P/JPX Carbon Efficient Index, a global environmental stock index

We were selected as a constituent of FTSE4Good Index Series, FTSE Blossom Japan Index
and FTSE Blossom Japan Sector Relative Index . Published by FTSE Russell, an investment

created by S&P Dow Jones Indices in the United States (As of March 2022).It is adopted by
the GPIF as an effective index for ESG investment.

index calculator, FTSE4Good Index Series consists of companies with strong Environment,
Social and Governance (ESG) practices. FTSE Blossom Japan Index and FTSE Blossom
Japan Sector

Relative Index which are also provided by FTSE Russell, measure theperformance of Japanese companies in terms of ESG practices. They have also been adopted
by the Government Pension Investment Fund (GPIF) as an effective index for ESG investment.

SOMPO Sustainability Index
We were selected in the SOMPO Sustainability Index managed by
SOMPO

Asset

Management”)

Management

Co.,

Ltd.

(“SOMPOAsset(As of June 2022) The SOMPO Sustainable

Management, launched by SOMPO Asset Management in August
2012, is a socially responsible investment funds for pension trusts
and institutional investors that invest broadly in companies having astrong positive evaluation for ESG performance.

MSCI: MSCI Japan Empowering Women Index (WIN)

CDP

Sumitomo Corporation is listed as a constituent of the MSCI Japan Empowering Women Index

In 2021, we were evaluated B (management level) in the Climate(WIN), one of the environmental, social and governance (ESG) indices selected by the GPIF.

Change program, A- (leadership level) in the Water Security

This is an ESG index consisting of companies with high gender diversity selected by MSCI USA.

program, and A- (leadership level) in the Forests program by the
CDP.

Zero-Emissions Challenge* The inclusion of Sumitomo Corporation in any MSCI index, and the use of MSCI logos, trademarks,
service marks or index names herein, do not constitute a sponsorship, endorsement or promotion of
Sumitomo Corporation by MSCI or any of its affiliates. The MSCI indexes are the exclusive property of
MSCI. MSCI and the MSCI index names and logos are trademarks or service marks of MSCI or its affiliates.

© 2022 Sumitomo Corporation

In October 2020, We were included in a “List of Companies
Taking on the Zero-Emission Challenge” published by METI
as a company that is paving the way to realization of adecarbonized society by taking advantage of innovations.

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Recognition

External Recognition
Others"Eruboshi" Certification

Telework Pioneer 100

In May 2016, we were certified as a second-highest class "Eruboshi"

We were selected for inclusion in the Top Hundred Telework Pioneerscompany in recognition of the effort to promote the active involvementfor FY2019 by the Ministry of Internal Affairs and Communicationsof female employees on the basis of the Act on Promotion of(MIC). Through Top Hundred Telework Pioneers, MIC recognizes

Women's Participation and Advancement in the Workplace.

companies and organizations with sufficient achievements that are
advancing the introduction and utilization of telecommuting.

"Platinum Kurumin" as a Company that Provides
Superior Childcare Support

Kagayaku Telework Award

We were granted "Platinum Kurumin" certification in June 2015 by the

Sumitomo Corporation won the Excellence Award of the FY2020 Telework Promotion

Ministry of Health, Labor and Welfare (MHLW) in recognition ofproviding superior childcare support among the "Kurumin" certified
companies.

Company Award (Kagayaku Telework Award) presented by the MHLW. This award ispresented to companies and organizations that achieved outstanding results in maintaining
a good work-life balance for employees through the use of telework. The Excellence Awardin particular recognizes companies and organizations with exceptional measures.

Reforming and Diversifying Work Practices
We have been certified by METI as a “White 500” enterprise withoutstanding health and productivity management for six consecutive

DX-Certified Business Operator

years from 2017 to 2022.

Sumitomo Corporation was selected as a DX-Certified
Business Operator under METI’s DX Certification System.
This system recognizes DX-Certified Business Operators as

Certified as a “Bronze” in “PRIDE INDEX”

companies ready to pursue DX in accordance with the Act on
Facilitation of Information Processing.

In 2021, we were certified as a “Bronze” in “PRIDE INDEX” inrecognition of the effort to support sexual minorities including LGBT bya private organization “work with Pride”.

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Commitment to International Codes of Conduct▌ UN Global Compact▌ Keidanren / Japan Foreign Trade Council

The Global Compact (GC) was proposed by the former UN Secretary General Kofi Annan in 1999 andAs a member of the Subcommittee on Global Environment of the Committee on Environment andofficially launched in 2000 at the UN Headquarters in New York.

Safety of Keidanren (Japan Business Federation), our company addresses global warming and climate

In March 2009, Sumitomo Corporation Group signed the UN Global Compact and declared its supportchange and helps design environmental policies that will not harm the economy. We also participate infor the 10 principles, shares the same values as our Corporate Mission Statement. We are raising thethe Global Environment Committee of Japan Foreign Trade Council, Inc. to discuss how to realize aawareness of our officers and employees around the world regarding their purpose and making efforts

low-carbon society and a recycling society, and to compliance with environment-related laws andto further increasing our corporate value by constantly seeking out areas of our business activities

regulations. When assessing whether to join membership with an industry group, we confirm whether

that can be improved in light of the values advocated by the 10 principles.

the group‘s climate change initiatives are consistent with our policy on climate change. Also, we

We are also actively participating in the activities of Japan’s local network, Global Compact Network

implement appropriate climate change countermeasures regardless of the level of influence of theJapan, as one of the board member companies. In FY2021, we took part in working groups on:

affiliated industry group.

environmental management related to climate change, biodiversity and other environmental issues;
human rights due diligence; reporting; supply chain; SDGs; ESG; CSV and circular economy. Throughthis involvement, we acquire information on recent global trends in these areas, learn of examples of▌ Stakeholder Capitalism Metrics

superior initiatives, and are provided insight from specialists. This knowledge is utilized to help the

In January 2021, Sumitomo Corporation supported and signed the Stakeholder Capitalism Metrics, aCompany promote Sustainability.

standard for non-financial information disclosure released by the International Business Committee

Commitment to International Codes of Conduct▌ Task Force on Climate-related Financial Disclosures (TCFD)(IBC) of the World Economic Forum (WEF). While utilizing this metrics, we will further expand thedisclosure of non-financial information to our stakeholders.

Sumitomo Corporation recognizes the importance of climate-related financial disclosures and supports
the recommendations of the TCFD*1, and further expand its information disclosure in accordance withthe recommendations.

▌ Japan CCS Co., Ltd. / Global CCS Institute / Asia CCUS Network*1 The Task Force on Climate-related Financial Disclosures was established by the Financial Stability

We are a shareholder of Japan CCS Co., Ltd. (JCCS). The company is conducting demonstration tests

Board (FSB). The final report to recommend further expansion of information disclosure was releasedon the use of CCS technology, which involves capturing and storing CO2 in the ground, as well as

in June, 2017.

chemical synthesis of CO2.

▌ Task Force on Nature-related Financial Disclosures（TNFD）
Our business depends largely on natural capital, and biodiversity conservation is an important issue for

We joined the Global CCS Institute (GCCSI) to meet conditions desirable to apply CCS. Since 2021,
the company has been participating in the Asia CCUS Network to share knowledge with and educate
Asian countries with regard to CCUS.

the company. In June 2022, Sumitomo Corporation joined the TNFD Forum, a network of institutional
supporters who share the vision and mission of TNFD*2. We will make further efforts to conserve
biodiversity going forward.
*2 Taskforce on Nature-related Financial Disclosures. A global initiative aimed to develop and deliver arisk management and disclosure framework for organizations to report and act on evolving naturerelated risks.
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Principles and Policies Supporting Corporate Activities
We have established our own principles and policies while respecting international conduct standards. In accordance with these principles, policies and standards, we are
addressing the Six Material Issues to Achieve Sustainable Growth with Society.

Environment

Governance» Sumitomo Corporation Group Environmental Policy
https://www.sumitomocorp.com/en/jp/sustainability/environment-policy
»
»

»

»

» Corporate Governance Principles
https://www.sumitomocorp.com/en/jp/about/governance/detail» Sumitomo Corporation Group Tax Principles (PDF/69.3KB)
Policies on Climate Change Issues
https://www.sumitomocorp.com/jp/-/media/Files/hq/sustainability/material-issues/taxhttps://www.sumitomocorp.com/en/jp/sustainability/environmental- management/climate
principles-j.pdf?la=en
ISO 14001 Management System Certification» Sumitomo Corporation Group Compliance Policy
https://www.sumitomocorp.com/en/jp/about/governance/compliance/policy
https://www.sumitomocorp.com/en/jp/sustainability/environment-policy#03» Corporate Disclosure Policy
https://www.sumitomocorp.com/en/jp/about/governance/detail/disclosurepolicy
Social» Risk Management Basic Policy
https://www.sumitomocorp.com/en/jp/about/governance/risk
The Sumitomo Corporation Group CSR Action Guidelines»
Information
Security Policy
for Supply Chain Management
https://www.sumitomocorp.com/en/jp/security
https://www.sumitomocorp.com/en/jp/sustainability/csr» Privacy Policy
Supply Chain Management Policies for Specific Commodities
https://www.sumitomocorp.com/en/jp/privacy• Sumitomo Corporation Group Forest Management Policy» Sumitomo Corporation Group Anti-Corruption Policy (PDF/270KB)
https://www.sumitomocorp.com/en/jp/sustainability/csr/activity#01
https://www.sumitomocorp.com/jp/-/media/Files/hq/about/governance/compliance/anticorruption-policy.pdf?la=en• Sumitomo Corporation Group Sourcing Policy for Forest Products
https://www.sumitomocorp.com/en/jp/sustainability/csr/activity#02» Sumitomo Corporation Group’s Human Rights Policy
https://www.sumitomocorp.com/en/jp/sustainability/respect» Support for the UN Global Compact’s 10 Principles
https://www.sumitomocorp.com/en/jp/sustainability/initiative» The Sumitomo Corporation Group's Basic Principles on Social Contribution Activities
https://www.sumitomocorp.com/en/jp/sustainability/contribution© 2022 Sumitomo Corporation

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Disclosure based on IBC Stakeholder Capitalism Metrics
Overview
In January 2021, Sumitomo Corporation supported and signed the Stakeholder Capitalism Metrics, a standard for non-financial information disclosure published by the International BusinessCommittee (IBC) of the World Economic Forum. Stakeholder Capitalism Metrics is a set of universal and comparable disclosures consisting of 21 core metrics and 34 expanded metrics focused on
people, planet, prosperity and governance. While utilizing this Metrics, we will further expand the disclosure of nonfinancial information to our stakeholders. In FY2021, our disclosure focuses on the
Metrics that are of high importance to the Company. We do not currently disclose all of them, but we will continue to review our disclosure based on the importance of the Metrics to our company andusefulness to our stakeholders.

Principle of Governance：Expanded Metric

MetricGoverning

Setting purpose

Sumitomo Corporation believes that establishing and maintaining better governance and pursuing its business activities will help to growThe company’s stated purpose, as the expression of the means by

and develop sustainably. In addition, such efforts will help Sumitomo Corporation to enhance its corporate value over the mid-to-long term

PurposeResponse：Core Metric

There

which a business proposes solutions to economic, environmental

and to fulfill its social mission as a corporation. Sumitomo Corporation believes that this will also serve the interest of its shareholders andand social issues. Corporate purpose should create value for all

all other stakeholders, including clients, employees, and local communities, and Sumitomo Corporation plans to maintain unstinting efforts

stakeholders, including shareholders.

to improve its governance further in future.
This is mentioned in Section 2.2 of "Sumitomo Corporation Corporate Governance Principles".

Purpose-led management

The mission of Sumitomo Corporation is to support all our stakeholders, including shareholders, clients, local communities and employees,

How the company’s stated purpose is embedded in company

in their endeavors to achieve prosperity and realize their dreams through our sound business activities.

strategies, policies and goals.

To fulfill this mission, we have established and disclosed management principles and policies including Environment Policy, Sumitomo
Corporation Group Compliance Policy, Sumitomo Corporation Group Anti-Corruption Policy, CSR Action Guidelines for Supply Chain
Management, Policies on Climate Change Issues, and Sumitomo Corporation Group’s Human Rights Policy.
In addition, to pursue the sustainability of our company and society in accordance with our corporate mission, we have been working toenhance the sustainability management since 2020. As part of the efforts, we identified key social issues and set mid- and long-term
goals
for each of the social issue. As we strive to solve the social issues through our business, we will disclose the progress in the ESG
Communication Book.
For more information on the key social issues and on the progress of the mid- and long-term goals, please refer to P.8 and 9.

Quality ofGoverning Body

Governance body composition

We disclose the composition of the highest governance body (Board of Directors (Audit & Supervisory Board Member system)), and its

Composition of the highest governance body and its committees

members (Directors: 6 internal, 5 external (of which, 2 female members), Audit & Supervisory Board Members: 2 internal, 3 external (ofby: competencies relating to economic, environmental and social

which, 1 female member) on P.119. We also disclose the information on our Corporate Governance Report, Integrated Report,

topics; executive or non-executive; independence; tenure on the"Sumitomo Corporation Corporate Governance Principles" as well as in the Notice of Convocation for our Ordinary General Meeting ofgovernance body; number of each individual’s other significant

Shareholders. Regarding the number of each individual's other significant positions and the nature of commitments, Sumitomo

positions and commitments, and the nature of the commitments;

Corporation discloses the status of main duties, in accordance with laws and regulations, in the business report section in the Notice ofgender;Convocation as well as other reference documents for the Ordinary General Meeting of Shareholders.

membershipofunder-representedsocialgroups;stakeholder representation.
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Principle of Governance
There：Expanded MetricResponse

Progress against strategic milestones

Sumitomo Corporation sets quantitative and qualitative management targets in its mid-term management plan and makes efforts toachieve the targets through a thorough plan-do-check-act (PDCA) cycle. In the new mid-term management plan "SHIFT 2023“, which has
started in FY2021, we are also monitoring the social and environmental aspects of our business based on the 6 key social issues thatwere identified in FY2020 as well as their mid-and long-term goals and annual action plans. We have been monitoring their progress andwe have started disclosing them since FY2022.
For more information on the key social issues and their mid-and long-term goals, please refer to P.8 to 19.

Disclosure of the material strategic economic, environmental andsocial milestones expected to be achieved in the following year,
such milestones achieved from the previous year, and how thosemilestones are expected to or have contributed to long-term value.
Remuneration
1. How performance criteria in the remuneration policies relate to
the highest governance body’s and senior executives’ objectives
for economic, environmental and social topics, as connected to thecompany’s stated purpose, strategy and long-term value.

Quality ofGoverning Body

：Core Metric

Metric2. Remuneration policies for the highest governance body andsenior executives for the following types of remuneration:– Fixed pay and variable pay, including performance-based pay,equity-based pay, bonuses and deferred or vested shares– Sign-on bonuses or recruitment incentive payments– Termination payments– Clawbacks– Retirement benefits, including the difference between benefit
schemes and contribution rates for the highest governance body,senior executives and all other employees

1．From the perspective of reinforcing the relationship with the Group’s management strategy, the total amount to be paid is determinedby newly reflecting the stock price growth rate of the Company (ratio of the Company’s stock price growth rate to the TOPIX growth rate)
in addition to the performance management indicators contained in the Medium-Term Management Plan “SHIFT2023,” and the amount tobe paid to individual officers is distributed according to their position and personal evaluation and paid after the end of the fiscal year. In
addition, each officer is evaluated on the basis of both financial indicators (status of achievement of business plans, etc. in the respective
areas of responsibility) and non-financial indicators (status of achievement of indicators (KPIs and KAIs) that objectively measure theattainment of strategic targets for each Strategic Business Unit (SBU), which are groups of businesses with the same strategy, and statusof making efforts for priority companywide challenges, etc.) so they can become more aware in regard to their commitment tomanagement strategy and results. In addition, each officer is evaluated on the basis of both financial indicators (status of achievement ofbusiness plans, etc. in the respective areas of responsibility) and non-financial indicators (business reform through digital transformation(DX), enhancement of sustainability management, promotion of diversity & inclusion etc.) so they can become more aware in regard totheir commitment to management strategy and results. In principle, the ratio of financial indicators to non-financial indicators in personalevaluation is 50:50.
２．
Remuneration policy 1: Remuneration standards and remuneration composition ratios of Executive Directors and Executive
Officers
The Company has set appropriate remuneration standards and remuneration composition ratios based on current business results andthe appropriate level of business results it seeks to achieve in the future, while also bearing in mind the roles required of Executive
Directors and Executive Officers and referring to objective remuneration market research data, etc. provided by external specialized
agencies such as the Willis Towers Watson “Executive Compensation Database” in order to realize a remuneration system that willcontribute to the acquisition, retention and motivation of the Company’s corporate management personnel.
Remuneration policy 2: Performance-linked bonus
In addition to 1. above, the potential range of business results in terms of consolidated net income and basic profit cash flow is assumed
to be 200–600 billion yen, and if business results fall outside of this range, the total amount of performance-linked bonuses to be paid isdecided separately by the Board of Directors based on report from the Nomination and Remuneration Advisory Committee. In addition, inorder to further promote the efforts of the Medium-Term Management Plan SHIFT 2023, we added the year-on-year stock price growthrate as a new indicator for determining the total amount of performance-linked bonuses, and the total amount to be paid is worked out by
multiplying the amount calculated from consolidated net income and basic profit cash flow by the year-on-year stock price growth rate.
The range of the year-on-year stock price growth rate is 80–120%.
Remuneration policy 3: Restricted Performance Share Unit-Based Remuneration
With the aim offering incentives to seek sustainable improvement of the Company's corporate value as well as promoting efforts toincrease our corporate value over the medium to long term, the Company's common shares (restricted) in number determined according
to the Company's stock growth rate (ratio of Company's stock growth and including dividends to the growth rate of TOPIX (Tokyo Stock
Exchange Stock Price Index) ) during the 3 years evaluation period are granted each year in principle. The restriction period will be fromthe day the shares are granted and until the day the recipients resigns or retires from all their positions as Director or Executive Officer of
the Company or any other position determined by the Board of Directors.

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Principle of Governance
There：Core Metric：Expanded Metric

MetricResponse

Material issues impacting stakeholders

The basis for the Sumitomo Corporation Group’s operations can be found in Sumitomo’s Business Philosophy, which has formed the

A list of the topics that are material to key stakeholders and thefoundation for Sumitomo’s sustainable development over the course of 400 years. One of the credos of this philosophy states: “Benefit for self

company, how the topics were identified and how the stakeholders

and others, private and public interests are one and the same.” We interpret this credo advocates Sumitomo’s business activities must benefit

were engaged.

not only Sumitomo, but also society around us to achieve sustainable growth together.
In 2017, the Group identified 6 material issues for achieving sustainable growth with society. By constantly clarifying the relationship between
our strategy and business with the material issues, we have been conducting sustainability management with the awareness that our businessactivities will contribute to solving social issues.
In 2020, to further enhance the sustainability management and clarify our role in realizing a sustainable society, we have identified 6 key social
issues that we address through our business and corporate activities. The 6 key social issues are: “Mitigation of climate change”, “Circular
economy”, “Respect for human rights”, “Development of local society and economy”, “Improvement of living standard” and “Quality education”.

Stakeholder

In addition, we have set long-term goals for each issue and medium-term goals that indicate more specific initiative.
Progress toward each goal is disclosed on P.10 to 19.

Engagement

When identifying the 6 key social issues, we launched an internal project team, which first created a long list of global social issues based on
the UN Sustainable Development Goals. Also, considering the characteristics of our business activities as an integrated general trading
company, the project team came up with hypotheses related to important issues deeply involving the Group and picked out several issues
from the long list. At the same time, they conducted surveys and interviews with the general managers of each business unit and division
concerning opportunities and risks related to social issues within the strategies and business activities of each organization based on the long
list. They then analyzed the relationship of our businesses to each issue. Finally, after comparing their hypotheses with the survey results andorganizing them into categories, the team identified 6 key social issues. The key social issues and long-term goals were decided in June 2020
after resolutions by the Management Council and the Board of Directors. We also decided on medium-term goals in May 2021. In this series ofprocesses, opinions were exchanged with experts on the environment and human rights, institutional investors, international organizations,and others to verify that the expectations of our various stakeholders have been properly reflected.
Anti-corruption
1.Total percentage of governance body members, employees and1. Sumitomo Corporation and its Group companies have conducted more than 50 seminars and other training programs on anti-corruption
and more than 5,450 officers/employees participated in FY2021.

business partners who have received training on the organization’s

2. No incident was confirmed in FY2021 in which the Company has been fined nor convicted of bribery of public officials.

anti-corruption policies and procedures, broken down by region.

3. Sumitomo Corporation Group implements strict measures to prevent bribery, inappropriate payments, and all other forms of corruption.
Specifically, we have established the "Rules for Prevention of Bribery of Public Officials", which regulate the provision of entertainment,

Ethical Behaviour

2.

gifts, invitations and donations to domestic and foreign public officials as well as the selection of service providers (such as agents,a) Total number and nature of incidents of corruption confirmed

consultants or other business intermediaries). We extend these rules to overseas offices and Group companies and we also offer ongoing

during the current year, but related to previous years; andemployee education and work constantly to prevent bribery and corruption.

b) Total number and nature of incidents of corruption confirmed
during the current year, related to this year.

Our "Sumitomo Corporation Group Anti-Corruption Policy", which summarizes the Group’s principles and policies outlined above, sets out theGroup’s basic principles in this area and explains our anti-bribery system and our initiatives for the prevention of bribery to our business3.Discussion of initiatives and stakeholder engagement to improvepartners including service providers, and request their understanding and cooperation.

the broader operating environment and culture, in order to combat
corruption.
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Principle of Governance
There：Core Metric：Expanded Metric

MetricResponse

Protected ethics advice and reporting mechanisms

Our internal rules stipulate "Immediate Report", which means that any issues or potential issues in relation to

A description of internal and external mechanisms for:compliance must be reported immediately to their line manager or to the relevant department of the Corporate Group.

1.Seeking advice about ethical and lawful behaviour and Such issues include not only the violation of antitrust/competition laws or anti-bribery/corruption laws but alsoorganizational integrity; andworkplace misconduct, falsification of accounts, or harassment. If reporting through the usual reporting line is difficult

2.Reporting concerns about unethical or unlawful

for some reason, we maintain a "Speak-Up System" available to officers and employees to report the issue to the

behaviour and lack of organizational integrity.

Chief Compliance Officer through an internal or external hotline.
In addition, we have developed and launched the group-based Speak-Up System, which enables officers andemployees of group companies both in and outside Japan to report compliance-related issues. For more details,
please see our website:
Also, appropriate departments respond to advice and reports received from external stakeholders through the Contact
Form on our website, etc.

Ethical Behaviour

Monetary losses from unethical behaviour

In FY2021, there was no incident (monetary loss) at Sumitomo Corporation.

Total amount of monetary losses as a result of legal
proceedings associated with fraud, insider trading,anti-trust, anti-competitive behaviour, market
manipulation, malpractice or violations of other relatedindustry laws or regulations.
Alignment of strategy and policies to lobbying

In the course of our global and diverse business activities, we participate in various organizations and meetings,

The significant issues that are the focus of the

including Keidanren (Japan Business Federation), to communicate our opinions. One example of our participation incompany’s participation in public policy development

the public sector is the study of GX (Green Transformation) League established by the Ministry of Economy, Tradeand lobbying; the company’s strategy relevant to theseand Industry (METI) in April 2022 for the purpose of realizing a carbon-neutral society. Through the GX League, weareas of focus; and any differences between its lobbying will communicate our opinions to encourage the creation of new businesses that will help make society carbon neutral.

© 2022 Sumitomo Corporation

positions and its purpose, stated policies, goals or otherIn addition, the amount of our political contribution in FY2021 is 28 million yen. For more information on political

public positions.

contribution, please refer to P.118.

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MetricResponse

Integrating risk and opportunity into business process

Sumitomo Corporation Group faces a variety of social issues in the course of its wide-ranging business activities. As the world

Company risk factor and opportunity disclosures that clearly

strives to achieve a sustainable society, in 2020, we have identified 6 key social issues and their long-term goals to further clarify ouridentify the principal material risks and opportunities facing therole.

company specifically (as opposed to generic sector risks), theFurthermore, in 2021, based on the long-term goals, we have set mid-term goals to promote more specific initiatives, such as thecompany appetite in respect of these risks, how these risks and development of business opportunities that capture changes in the business environment surrounding each issue and theopportunities have moved over time and the response to thosedevelopment of risk management mechanism. The progress of these initiatives will be monitored and discussed at the Corporatechanges. These opportunities and risks should integrate

Sustainability Committee.

material economic, environmental and social issues, including

Progress toward each goal is disclosed on P.10 to 19.

climate change and data stewardship.

In addition, when making new business investment, we assess its social and environmental impact. The Company Investment
Committee*, which the Corporate Sustainability team is a member of, discusses including the perspective of social andenvironmental risks and opportunities.
*Advisory body to the Management Council, which is the highest executive-level decision-making body

Risk and
Opportunity
Oversight

Please see P.5 for our business risks and opportunities identified for various sustainability topics.
Economic, environmental and social topics in capital

At Sumitomo Corporation, the discussion of management resource allocation is done at the biannual Strategy Meeting where theallocation framework

top management participates. The decision is finalized at the Management Council, which is the highest executive-level decision-

How the highest governance body considers economic,

making body and is executed under the supervision of the Board of Directors. When setting the areas of business growth fields,

environmental and social issues when overseeing major capital which are the focus points of the resource allocation in each business areas, we also consider opportunities and risks in each
allocation decisions, such as expenditures, acquisitions andbusiness areas that arise from social issues.

divestments.

When discussing a new investment opportunity in individual business, we consider not only profitability, but also environmental andsocial impacts and/or risks based on the uniqueness of the business. If necessary, we hire an external expert and conduct athorough due diligence on the environmental and social aspects (i.e. pollution, biodiversity, use of water and other limited natural
resources, respect of human rights, occupational health and safety, other workplace environment, impact on local communities etc.)
and make the final investment decision. Also, we continuously monitor the environmental and social impact in the post-investment
process as well.
In addition, policies and initiatives pertaining to non-financial aspects that are essential for promoting our sustainability management
are discussed at the Corporate Sustainability Committee and then proposed at the Management Council.
All of these processes are carried out under the supervision of the Management Council as well as the Board of Directors.
For more information on our risk management, please refer to P.108 and 109.

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PlanetThere：Core Metric

MetricResponse

Greenhouse gas (GHG) emissions

Sumitomo Corporation Group’s greenhouse gas emissions (thousand t-CO2e) for FY2021 are as follows:：Expanded Metric

For all relevant greenhouse gases (e.g. carbon dioxide, methane, nitrous • Scope 1: 1,621
oxide, F-gases etc.), report in metric tonnes of carbon dioxide equivalent(Breakdown by GHG type)(tCO2e) GHG Protocol Scope 1 and Scope 2 emissions.

CO2 1,389

Estimate and report material upstream and downstream (GHG Protocol
Scope 3) emissions where appropriate.

CH4 129
N2O 103• Scope 2: : 672• Scope 3 Upstream Transportation and Distribution: 4.09
• Scope 3 Waste: 0.01

• Scope 3 Business Trips: 0.57

• Scope 3 Employee Commuting: 0.57

• Scope 3 Downstream Leased Assets : 28.15
For more information such as the reporting boundaries and CO2 emissions, see our Environmental Data available on P.112 and 113.
Also, please refer to P.43 for our CO2 emission reduction initiatives that we announced as the mid-term goal for climate change mitigation.

Climate Change

TCFD implementation

Sumitomo Corporation has been supporting the TCFD recommendations since March 2019. Please see P.24 to 43 for the disclosure on governance,

Fully implement the recommendations of the Task Force on Climate-strategy, risk management, targets and KPIs related to climate change based on the TCFD recommendations.

related Financial Disclosures (TCFD). If necessary, disclose a timeline ofat most three years for full implementation. Disclose whether you haveAlso, we have identified "mitigation of climate change" as one of the 6 key social issues which the Group will address to achieve a sustainable society.

set, or have committed to set, GHG emissions targets that are in line

As a long-term goal, the Group will aim to carbon neutralize its business by 2050, and also will aim to achieve its mid-term goal, which is to reduce CO2

with the goals of the Paris Agreement – to limit global warming to wellemissions by 50% or more by 2035 compared to 2019 levels.

below 2°C above pre-industrial levels and pursue efforts to limit warming
to 1.5°C – and to achieve net-zero emissions before 2050.
Paris-aligned GHG emissions targets

As stated above, we have a long-term goal of seeking to become carbon neutral in the Group's business by 2050 and we will also contribute to theDefine and report progress against time-bound science-based GHG

carbon neutralization of society. Also, we have set a mid-term goal of reducing the CO2 emissions by 50% or more by 2035 compared to 2019 levels.

emissions targets that are in line with the goals of the Paris Agreement –to limit global warming to well below 2°C above pre-industrial levels andFor specific action plans and initiatives, please see P.27 and 43.

pursue efforts to limit warming to 1.5°C. This should include defining adate before 2050 by which you will achieve net-zero greenhouse gas
emissions, and interim reduction targets based on the methodologies
provided by the Science Based Targets initiative, if applicable.
If an alternative approach is taken, disclose the methodology used to
calculate the targets and the basis on which they deliver on the goals of
the Paris Agreement.

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ESG
Quantitative Data

External
Recognition

Disclosure based on IBC Stakeholder Capitalism Metrics
PlanetThere

Nature Loss

：Core Metric：Expanded Metric

MetricResponse

Land use and ecological sensitivity

The Group does not disclose this information at the moment, however, we have a process in place to consider theReport the number and area (in hectares) of sites owned, impact on land use and ecosystems when considering new investments and loans.
leased or managed in or adjacent to protected areas

In addition, in June 2022, we joined the TNFD Forum. Through this initiative, we will enhance disclosure of our

and/or key biodiversity areas (KBA).

business activities relating to natural capital and biodiversity.

Water consumption and withdrawal in

The Group's water consumption and withdrawal in water-stressed areas* for FY2021 are as follows.

water-stressed areas• Total water consumption : 70,902 megaliters

Report for operations where material: mega litres ofOf this, 3.5% in water-stressed areas*water withdrawn, mega litres of water consumed and theFresh water

percentage of each in regions with high or extremely• Total water withdrawal : 78,107 megaliters

availability

high baseline water stress, according to WRI Aqueduct

Of this, 3.7% in water-stressed areas*water risk atlas tool.
Estimate and report the same information for the full

* Water-stressed areas :The regions with high or extremely high baseline water stress, according to WRI Aqueduct

value chain (upstream and downstream) wherewater risk atlas tool.

appropriate.

© 2022 Sumitomo Corporation

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Governance

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Recognition

Disclosure based on IBC Stakeholder Capitalism Metrics
PeopleThere：Core Metric：Expanded Metric

MetricResponse

Diversity and inclusion (%)

The Sumitomo Corporation Group has a diverse workforce made up of people who have different lifestyles and values in addition to differences in

Percentage of employees per employee category, by age group, gender

gender and nationality. It is essential to utilize the rich mix of “knowledge” held by diverse people as a source of competitiveness in order to survive andand other indicators of diversity (e.g. ethnicity).

stay ahead in complex business domains. We will focus on the diversity of our workforce on a global basis, particularly on the strengths of individuals,
and bring these strengths together in combination. By doing so, we will drive the progress of our growth strategies.
Gender ratio at Sumitomo Corporation (non-consolidated) as of March 2022:
Male: 3,852 / Female: 1,298
Percentage by age group at Sumitomo Corporation (non-consolidated) as of March 2022:
Age group
Number of employees
％
20s
842
16.30%
30s
1,376
26.70%
40s
1,135
22.00%
50s
1,318
25.60%
60s
472
9.20%
Over 70s
0.10%
7
Total
5,150
1

Pay equality (%)

There is no gap in basic salary and remuneration in each employee category such as gender and ethnicity etc.at Sumitomo Corporation (non-Ratio of the basic salary and remuneration for each employee category

consolidated).

by significant locations of operation for priority areas of equality: women

Dignity and Equality

to men, minor to major ethnic groups, and other relevant equality areas.
Wage level (%)

Sumitomo Corporation Group sets salary level that exceeds minimum wage level in each region.

1.Ratios of standard entry level wage by gender compared to local

The wage level at Sumitomo Corporation (non-consolidated) is as follows:

minimum wage.
2.Ratio of the annual total compensation of the CEO to the median of
the annual total compensation of all its employees, except the CEO.

1. The standard entry level wage exceeds the minimum wage level in Japan and there is no gap between gender.
New graduate with master's degree or higher: 290,000 JPY/month
New graduate with bachelor's degree: 255,000 JPY/month
2. The ratio of the annual total compensation of the President and CEO to the median of the annual total compensation of all its employees at Sumitomo
Corporation (non-consolidated), except the President and CEO, is 144:7.
（President and CEO: 288 mil. JPY, Median of the annual total compensation of all employees at Sumitomo Corporation: 14 mil. JPY)

Risk for incidents of child, forced or compulsory labour
An explanation of the operations and suppliers considered to havesignificant risk for incidents of child labour, forced or compulsory labour.
Such risks could emerge in relation to:a) type of operation (such as manufacturing plant) and type of supplier;andb) countries or geographic areas with operations and suppliersconsidered at risk.

© 2022 Sumitomo Corporation

In accordance with the Sumitomo Corporation Group's Human Rights Policy, Sumitomo Corporation began human rights due diligence in 2020. We
identified 8 salient human rights issues, such as "forced labor and child labor", that should be addressed with priority so that we can assess impacts
concerning human rights throughout the Group.
Through our desktop research, we have identified food and textile related businesses as areas with high risks of forced and child labor in the supply
chain and we confirmed the status of risk management in both business areas by conducting internal interviews.
Specifically, in the textile business, CSR audits are being conducted based on standards of some of our customers, at factories where we manage oroutsource.
Also, the food wholesale business properly manages to minimize the risk of forced and child labor by conducting supplier questionnaire to suppliers
associated with high-risk countries or goods, based on the list of TVPRA（Trafficking Victims Protection Reauthorization Act）published by the US
Bureau of International Labor Affairs (ILAB).
In addition, as conflict minerals poses a serious risk of forced and child labor, we monitor the risk by regularly checking the status and result of conflictminerals survey in the Group.
For more information on our human rights related initiatives, please see P.57 to 63.

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PeopleThere：Core Metric：Expanded Metric

MetricResponse

Freedom of association and collective bargaining at risk (%)

As of March 2022, the number of members of the Sumitomo Corporation Labor Union is 3,062, accounting for 60% of all employees of Sumitomo

1.Percentage of active workforce covered under collective bargaining

Corporation (non-consolidated).

agreements.

For more information on our human rights related initiatives, please see P.88.

2.An explanation of the assessment performed on suppliers for which
the right to freedom of association and collective bargaining is at risk,
including measures taken by the organization to address these risks.
Human rights review, grievance impact & modern slavery (#, %)1.Total number and percentage of operations that have been subject toDignity and Equality

human rights reviews or human rights impact assessments, by country.
2.Number and type of grievances reported with associated impacts
related to a salient human rights issue in the reporting period and an
explanation on type of impacts.
3.Number and percentage of operations and suppliers considered tohave significant risk for incidents of child labour, forced or compulsory
labour. Such risks could emerge in relation to:a) type of operation (such as manufacturing plant) and type of supplier;andb) countries or geographic areas with operations and suppliers

3. Please refer to our comments in the section "Risk for incidents of child, forced or compulsory labour“.

Health and safety (%)

The coverage of the following data is Sumitomo Corporation (non-consolidated):high-consequence work-related injuries (excluding fatalities); recordable
work-related injuries; main types of work-related injury; and the numberof hours worked.
2. An explanation of how the organization facilitates workers’ access to

Well-being

2. Out of cases reported or pointed out by stakeholders including civil society organizations, local communities and regulatory authorities, there were 16
cases* that are related to the 8 salient human rights issues. We investigate the issues reported by the stakeholders, and if corrective action isnecessary, appropriate measures are considered and implemented.
*Excludes incidents of discrimination and harassments. Also, the occupational health and safety does not include work-related injuries
or fatalities.

considered at risk.

1. The number and rate of fatalities as a result of work-related injury;

Health and1.In accordance with the Sumitomo Corporation Group’s Human Rights Policy, Sumitomo Corporation began human rights due diligence in 2020.
The Sumitomo Corporation Group’s business activities extend to various industries and regions.
We started by conducting a desk top survey to confirm the Group’s businesses and their value chains, and developed a hypothesis on businesses that
may be exposed to high risks and human rights issues that are closely related to the value chains in those businesses.
We then exchanged opinions with stakeholders including outside experts and also hired outside experts and conducted internal interviews on 12
business teams to verify the hypothesis. Through these consultations, we classified the human rights issues according to the likelihood of these issues
emerging in the Group’s business and also the degree of severity in case they emerge. As a result, we identified 8* salient human rights issues within
the Sumitomo Corporation Group.
*The 8 salient issues: labor conditions (wages and working hours), freedom of association and the right to collective bargaining, forced labor and childlabor, occupational health and safety, health and safety of local residents, land rights, discrimination and harassment, personal information and privacy.
Please see P.58 for details on the human rights due diligence process.

non-occupational medical and healthcare services, and the scope ofaccess provided for employees and workers.

1. Work-related fatalities: FY2019: 0, FY2020: 0, FY2021: 1
High-consequence work-related injuries (excl. fatalities): FY2019: 0, FY2020: 0, FY2021: 0
Recordable work-related injuries: FY2019: 3, FY2020: 1, FY2021: 2
We do not disclose the details (i.e. types of work-related injury, number of hours worked) .
2. Sumitomo Corporation (SC) promotes the following medical and healthcare services:•

In-house clinic (internal medicine and dentistry) : All employees of SC have access to the clinic during work hours.

•

Massage room, Counseling Center: All employees of SC Group have access to the services during work hours.

•

Advanced Healthcare Expense Program：This covers conditions that give rise to substantial economic burdens as a result of treatment not coveredby insurance and the program is available to all employees of SC. By broadly covering treatment not covered by health insurance, the program cansupport employees receive treatment with reassurance and return to work at the earliest possible time or continue working while receiving treatment.

•

Health consultation service:Since the incidence and death rates of breast cancer and uterine cancer have been increasing among younger womenin recent years, we have set up a consultation service for women’s specific health issues to strengthen the dissemination of such information and to
introduce them to medical institutions that offer gynecological exams as a stand-alone service. Furthermore, we are also promoting andstrengthening various health management measures through a collaborative health program with the Sumitomo Corporation Corporate Health
Insurance Society.

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PeopleThere

Health andWell-being：Core Metric：Expanded Metric

MetricResponse

Monetized impacts of work-related incidents on

There were two occupational incidents at Sumitomo Corporation (non-consolidated) in FY2021, but there was noorganization (#, $)financial impact.

By multiplying the number and type of occupational
incidents by the direct costs for employees, employers
per incident (including actions and/or fines from
regulators, property damage, healthcare costs,
compensation costs to employees).
Training provided (#, $)The following data covers training programs for Sumitomo Corporation (non-consolidated) which were conducted by

Average hours of training per person that thethe HR department in FY2021. The trainings are not restricted by gender.

organization’s employees have undertaken during thereporting period, by gender and employee category

Number of participants: 5,134 employees(total number of hours of training provided to employees Total number of hours of training provided: 119,894hours （including 65,893 hours by Human Resources Dept.)
divided by the number of employees).

Total expenditure: 1,682 bil. JPY

Average training and development expenditure per fulltime employee (total cost of training provided to

Average training hours per employee:23.4 hours

employees divided by the number of employees).

Development expenditure per employee: 330,000 JPY

Monetized impacts of training – Increased earning

The following data covers training programs for Sumitomo Corporation (non-consolidated) which were conducted by

Skills for the Future capacity as a result of training intervention (%, $)1.Investment in training as a percentage (%) of payroll.
2.Effectiveness of the training and development throughincreased revenue, productivity gains, employee
engagement and/or internal hire rates.

the HR department in FY2021.
1. Investment in training as a percentage (%) of payroll: 1.6％ (training expenditure 1.682 bil. JPY/ total pay roll of
100.297 bil. JPY)
2. The Sumitomo Corporation Employee Awareness Survey conducted in 2019 indicated that "the level of satisfaction
with the company" remained at high levels. We believe that trainings have contributed to attaining high level of
employee engagement.
(0~5) Assessment
Feeling of satisfaction with the company

5th Survey（FY2016）：
Work-life management(level of satisfaction & practice) ：© 2022 Sumitomo Corporation

3.9
3.3

6th Survey（FY2019）
3.9
3.4
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Prosperity
There

MetricResponse

Absolute number and rate of employment

The data for Sumitomo Corporation (non-consolidated) is as follows:：Core Metric：Expanded Metric

Total number and rate of new employee hires during the reporting period, 1-1. Absolute number of new graduate hires in FY2021
by age group, gender, other indicators of diversity and region.

Total number and rate of employee turnover during the reporting period,by age group, gender, other indicators of diversity and region.

〈by gender〉 Male: 75, Female: 30 (Male 71.4%, Female 28.6%)〈by age group〉 20s:105
1-2. Absolute number of mid-career hires in FY2021〈by gender〉 Male: 14, Female: 4 (Male 77.8%, Female 22.2%)〈by age group〉 20s: 2, 30s: 11, 40s: 5, 50s: 1 (20s:11.1%, 30s: 61.1%, 40s: 27.8%)
2. Average length of years served/Turnover rate in FY2021〈by gender〉 Male: 19.4years/3.4%, Female 16.5 years/ 3.0%

Economic contribution

1. For items a through e, please refer to Consolidated Financial Statements beginning on P.36 of FY2021 Consolidated Financial Statements. For item f, please

1.Direct economic value generated and distributed (EVG&D), on anrefer to the "Expenditure for social contribution activities" listed on P.118 of this ESG Communication Book 2022.

accruals basis, covering the basic components for the organization’s
global operations, ideally split out by:

2. We do not currently conduct this assessment.

a) Revenuesb) Operating costsc) Employee wages and benefits

Employment andWealth Generationd) Payments to providers of capitale) Payments to governmentf) Community investment
2.Financial assistance received from the government: total monetary
value of financial assistance received by the organization from any
government during the reporting period.
Financial investment contribution

The result for Sumitomo Corporation Group in FY2021 is as follows:

1.Total capital expenditures (CapEx) minus depreciation, supported by

1. In our revised new Medium-Term Management Plan SHIFT 2023 which covers FY2021 through FY2023, we plan to make investments and loans totaling 1,230
billion yen during the period of the new Medium-Term Management Plan, and we will continue to make investments and loans mainly in areas with market potential
and where we can fully demonstrate our strengths. For further details, please refer to [Management Policies, Business Environment and Management Challenges]
on page 1 of the Annual Financial Report for the year ended March 31, 2022.

narrative to describe the company’s investment strategy.
2.Share buybacks plus dividend payments, supported by narrative todescribe the company’s strategy for returns of capital to shareholders.

© 2022 Sumitomo Corporation

2.Sumitomo Corporation aims to increase dividends by achieving medium and long-term earnings growth while adhering to its fundamental policy of paying
shareholders a stable dividend over the long term.
As indicated in our mid-term management plan “SHIFT 2023”, we decided the annual dividend taking into consideration the status of fundamental earnings capacity,
cash flows, and other factors, with a consolidated payout ratio of about 30% as a guideline, maintaining at least 70 yen per share, the same amount as the annual
dividend for FY2020. Profit for the year attributable to owners of the parent in FY2021 totaled 463.7 billion yen, the annual dividend for FY2021 was 110 yen per
share.
As a result, the total of dividend paid was 137,495 mil. JPY (by combining the paid for acquisition of treasury stocks, the total was 137,499 mil. JPY).
In light of the progress made in improvement of our revenue base and financial soundness through the progress in structural reforms, etc., we have reviewed ourdividend policy for FY2022 and beyond from the perspective of our sustainable growth and the long-term interests of our shareholders. In the new dividend policy,
we will decide the amount of annual dividends within a DOE (dividend on equity ratio) range of 3.5% to 4.5% by taking into consideration the status of fundamental
earnings capacity, cash flows, and other factors, with a consolidated payout ratio of about 30% as a guideline. If 30% of the profit for the year exceeds the above
range, we will pay dividends or repurchase our shares for the excess portion in a flexible and agile manner.

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Prosperity
There：Core Metric：Expanded Metric

MetricResponse

Infrastructure investments and services supported

The 6 key social issues that Sumitomo Corporation has set have two themes: "the sustainability of society" and "development andQualitative disclosure to describe the below components:
1.Extent of development of significant infrastructure investments
and services supported.

advancement of society".
The sustainability of society is a globally shared goal as well as a major premise of the Group’s business. On the other hand, the solutions forpursuing the sustainability of society will be generated from further social and economic development and therefore, we believe that these two

2.Current or expected impacts on communities and local economies, themes are mutually complementary.
The infrastructure business including power generation, water production, transportation and communication, which we provide on a global
including positive and negative impacts where relevant.
3.Whether these investments and services are commercial, in-kind

Employment andor pro bono engagements.

scale, contributes to the "development and advancement of society". We will continue our efforts to contribute to the development of local
society and economy as well as improving people's living standards through our sound business activities.
While society seeks for sustainable development, the expectation for infrastructure business has also shifted.
To capture progress in global climate change mitigation, we will expand our renewable energy business and also develop and deploy carbon

Wealth Generation

free energy such as hydrogen and ammonium business, which are essential in building decarbonization system and sustainable energy cycle
required to realize a carbon neutral society. In addition, we will expand new power and energy services (i.e. large-scale storage batteriesbusiness, battery reuse business, power energy platform business, hybrid energy service business etc.).
Furthermore, not only developing infrastructure as business, but we also have been providing infrastructure as part of our social contribution
initiative. For example, as part of the mining business, roads, bridges, water supplies, hospitals, and schools were constructed for the local
community.
We disclose the impact to environment and society on P.112 to 120.
For more information on our infrastructure business, please refer to P.46 and 92.

Innovation of Better Total R&D expenses ($)
Products and

The total R&D cost for Sumitomo Corporation Group in FY2021 is 1,874 mil. JPY.

Total costs related to research and development.

Services
Total tax paid

Please see the Consolidated Statement of Cash Flows, which is listed on P.43 and 44 of FY2021 Consolidated Financial Statements, for

The total global tax borne by the company, including corporate

information on income tax paid. We do not currently analyze the total taxes paid except for the income tax.

income taxes, property taxes, non-creditable VAT and other sales

Community andSocial Vitality

taxes, employer-paid payroll taxes, and other taxes that constitutecosts to the company, by category of taxes.
Total Social Investment ($)

The amount of expenditure for our social contribution activities in FY2021 was 1.655 billion yen and the number of employees who used the

Total Social Investment (TSI) sums up a company’s resources used volunteer leave program was 10. For details, please refer to P.89 to 94 and 118 in the ESG Communication Book.
for “S” in ESG efforts defined by CECP Valuation Guidance.

© 2022 Sumitomo Corporation

136

Independent Assurance Report
To the Representative Director, President and CEO of Sumitomo Corporation

We were engaged by Sumitomo Corporation (the “Company”) to undertake a limited assurance
engagement of the environmental performance indicators marked with ★ (the “Indicators”) for the period
from April 1, 2021 to March 31, 2022 included in its ESG Communication Book 2022 (the “ESG
Communication Book”) for the fiscal year ended March 31, 2022.

Conclusion
Based on the procedures performed, as described above, nothing has come to our attention that causes
us to believe that the Indicators in the ESG Communication Book are not prepared, in all material
respects, in accordance with the Company’s reporting criteria as described in the ESG CommunicationBook.

Our Independence and Quality Control
The Company’s Responsibility
The Company is responsible for the preparation of the Indicators in accordance with its own reporting
criteria (the “Company’s reporting criteria”), as described in the ESG Communication Book.

Our Responsibility
Our responsibility is to express a limited assurance conclusion on the Indicators based on theprocedures we have performed. We conducted our engagement in accordance with the ‘International
Standard on Assurance Engagements (ISAE) 3000, Assurance Engagements other than Audits or
Reviews of Historical Financial Information’ and the ‘ISAE 3410, Assurance Engagements on
Greenhouse Gas Statements’ issued by the International Auditing and Assurance Standards Board. The
limited assurance engagement consisted of making inquiries, primarily of persons responsible for the
preparation of information presented in the ESG Communication Book, and applying analytical and otherprocedures, and the procedures performed vary in nature from, and are less in extent than for, areasonable assurance engagement. The level of assurance provided is thus not as high as that provided
by a reasonable assurance engagement. Our assurance procedures included:Interviewing the Company’s responsible personnel to obtain an understanding of its policy for
preparing the ESG Communication Book and reviewing the Company’s reporting criteria.

Inquiring about the design of the systems and methods used to collect and process the Indicators.



Performing analytical procedures on the Indicators.

Examining, on a test basis, evidence supporting the generation, aggregation and reporting of the
Indicators in conformity with the Company’s reporting criteria, and recalculating the Indicators.



Visiting Summit Handa Power Corporation selected on the basis of a risk analysis.



Evaluating the overall presentation of the Indicators.

We have complied with the Code of Ethics for Professional Accountants issued by the International
Ethics Standards Board for Accountants, which includes independence and other requirements foundedon fundamental principles of integrity, objectivity, professional competence and due care, confidentiality
and professional behavior. In accordance with International Standard on Quality Control 1, we maintain acomprehensive system of quality control including documented policies and procedures regarding
compliance with ethical requirements, professional standards and applicable legal and regulatory
requirements.

/s/ Kazuhiko Saito
Kazuhiko Saito, Partner, Representative Director
KPMG AZSA Sustainability Co., Ltd.
Tokyo, Japan
September 27, 2022

This is a copy of the Independent Assurance Report and the original copies are kept separately by the Company and
KPMG AZSA Sustainability Co., Ltd.

© 2022 Sumitomo Corporation137© 2022 Sumitomo Corporation