Communication Book
2020

Vol.3

ESG Communication Book
Contents
 Editorial Policy
 Top Message

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・1  Social
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・2

 Sustainability of Sumitomo Corporation Group
Business Philosophy and Corporate Mission Statement
Material Issues

・・・・・・・・・・・・・・・・・・・3
・・・・・・・・・・・・・・・・・・3

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・4
Value Creation Model ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・6
Medium-term Management Plan ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・7

How to Understand Sustainability/Sustainability Promotion System
Social issues and the Group's Business Activities
Enhancing Sustainability Management

・・・・・・・8

・・・・・・・・・・・・・・・・・・・10

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・12

 Feature・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・17
Our Climate Change Initiatives
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・17
Initiatives on Respect for Human Rights

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・27
The Challenges of New Value Creation with a View to the Next 100 Years・・32
 Environment
Environmental Management

Human Resources Management ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・62
Supply Chain

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・77

Industrial and Technology Innovation
Healthcare

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・79

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・80

Local Infrastructure / Community planning ・・・・・・・・・・・・・・・・・・・・・・・・・・・・82
Social Contributions
 Governance・・・・・・・・・・・・・・・・・・・・・・・・・・・・84
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・89

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・89
Corporate Governance・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・97
Compliance・・・・・・・・・・・・・・・・・・・・100
Social and Environmental Risk Management
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・102
Information Security

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・34  ESG Quantitative Data・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・104

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・34

Water Resources・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・42

Resource UseWork Health and Safety/Health and Productivity Management ・・・・・・・・・53

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・103

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・38

Environmental Pollution

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・52

Stakeholder Engagement

Climate Change
Biodiversity

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・52

Human Rights

 Third-party Assessment

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・112

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・44  Principles and Policies Supporting Corporate Activities
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・47
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・51

・・・・114

ESG Communication Book
Editorial Policy
Non-financial Information

Concept behind Sustainability Information
Disclosure

WebsiteSumitomo Corporation publishes an integrated reportas a communication tool to disclose information toinvestors and other stakeholders. In th e Integrated
Report, financial information is combined with nonfinancial information and initiatives to increase th e

ESG
Communication
Corporate
Book

Company
Brochure

Concise/Selected

corporate value over the long term are reported.
Information
We publish ESG (Environment, Social, Governance)
Communication Book to report detailed information onsustainability, mainly non-financial information, fromthe ESG perspective.

Governance
ReportIntegrated
ReportNewsletter toShareholders(SC NEWS)

Fact
Book

Consolidated
Financial
Statements

Comprehensive/Detailed
Information

Business
Reports

Quarterly
Earnings
ReportReporting Scope
Sumitomo Corporation and group companies

Financial Information

Reporting PeriodBusin ess acti vities mainly in FY2019 (April 2019March 2020), including some policies and activities
before March 2019 and after April 2020.

Date of Issue
Vol.1 : August 4, 2020
Vol.2 : October 22, 2020
Vol.3 : March 9, 2021

Referenced Guidelines

Contact○ Ministry of Economy, Trade and Industry:
Guidance for Collaborative Value Creation

Sumitomo Corporation○ ISO26000 :Guidance on social responsibility○ Ministry of the Environment:
Environmental Accounting Guidelines. 2005
○ METI / MOE:
Calculation and Reporting Manual for Greenhouse Gas
Emissions

Corporate Sustainability Department
TEL: 03-6285-5000
https://www.sumitomocorp.com/en/jp/info​1

ESG Communication Book
Top Message
Chairperson of the Corporate
Sustainability Committee

President and CEO

Sumitomo’s Business Philosophy handed over for 400 years and expressed as“Benefit for self and others, private and public interests are one and the same”(meaning that Sumitomo’s business, while benefiting Sumitomo, must also benefit
the nation and society) is the foundation of Sumitomo Corporation Group’s
management and business activities and is retained in our Management Principles.
We are curre ntly clarifying the roles that the Sumitomo Corporation Group must
play to address various social issues while enhancing sustainability managementthat can strategically allocate management resources in anticipation of long-termchanges in the business environment and create the value that society truly needs.
Climate change, in particular, is an extremely critical issue that must be overcome
in order to achieve a sustainable society and we are committed to aim at making
our group’s business carbon neutral in 2050.

As a part of its efforts to enhance sustainability management, this fiscal year the
Sumitomo Corporation Group identified six key social issues that it will work toaddress. The Group also set long-term goals linked to those issues. Furthermore,
we have committed to setting medium-term goals, incorporating them into
concrete action plans, and implementing those plans as per schedule. We believethat defining social issues that we will face, clarifying the paths to achieving ourgoals, and openly sharing our progress are all part of the social responsibility
required of companies.
We are also convinced that pursuing the ideal society will lead to the creation ofeven more business opportunities. The ESG initiatives of the Sumitomo
Corporation Group are positioned to contribute to the creation of a s ustainable
society and as our own innovation measures for the creation of new business, andwe will carry them out in collaboration with various stakeholders.

Aim high, act on our principles and execute. Sumitomo Corporation Group will act
as one in unceasing challenges for new value creation to realize our dreams.

Through our business activities, we will become a better member of society. Thisis the true embodiment of our corporate message—Enriching lives and the world.
We hope that our actions will live up to your expectations.

Representative Director
President and Chief Executive Officer

Representative Director
Senior Managing Executive Officer

Masayuki Hyodo

Hideki Yamano2Sustainability of
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Business Philosophy and Corporate Mission Statement
Our business was founded o n Sumitomo’s Business Philosophy and Sumitomo Corporation Groups Management Principles. The year 2019 will mark the 100th anniversary of
our company. Since our foundation, we have always placed importance on trust and certainty based on the s pirit of “Benefit for self and others , private and public interests
are one and the sameˮ and in accordance with Sumitomo’s Business Philosophy and Sumitomo Corporation Group's Management Principles. To deal with the change of thetimes, we have accordingly changed our business through our constant effort to stay a step ahead and create new value so that we can contribute broadly to society.
Sumitomo’s Business Philosophy and Sumitomo Corporation Group's Management Principles have supported our growth over the last 100 years and will ensure sustainablegrowth and help create long-term corporate value over the next 50 and 100 years.

Sumitomo’s Business Philosophy

Corporate Mission Statement

Sumitomo’s Business Philosophy has been refined throughmany generations based on the Founder’s Precepts“Monjuin Shiigaki,” which Masatomo Sumitomo (1585-1652),
the founder of the Sumitomo family, wrote and handed on todescribe how a merchant should conduct business.
The basic points of Sumitomo’s Business Philosophy havebeen passed on in the form of the two articles of theBusiness Principles.
Article 1 emphasizes the utmost importance of integrity, while
Founder’s Precepts of Sumitomo
Article 2 advocates the importance of having an enterprising(Source: Sumitomo Historical Archives)
spir it to generate profits quickly an d faithfully while adapting to a changin g society , andrenovating business operations while avoiding the pursuit of easy gains or acting carelessly.
Sumitomo’s Business Philosophy, which has been passed on since the Founder’s Precepts
was written , still serv es as the timeless principles Sumitomo Grou p companies follow intheir activities.
There are also several other credos that are contained in Sumitomo’s Business Philosophy.
One exam ple is: “Benef it f or self and other s, private and public interests are one and thesame.” T o put it an other way, Sumitomo’s business, while benefiting Sumitomo, must also
benefit the nation and benefit society . This represents the cor porate vision th at the
Sumitomo Corporation Group as a whole must pursue at all times.
The secon d credo is “Grand D esign.” Th is derives from copper mine managem ent,
Sumitomo's core busin ess in its early days, which requ ired lon g-term vision an d continuous
effort. This attitu de of viewin g bu siness fr om a broad and lon g-term perspective andworkin g f or the benefit of the en tire n ation an d society based on f oresigh t of the future h as
been inherited from preceding Company operators.
The third credo is “People are our most importan t asset.” The cultiv ation and developmentof human resources has always been our most important concern regardless of the times.
Sumitomo’s Bu siness Philosophy thus stresses the need f or an enterprising spirit to stay a
step ahead in dealin g with change, while ascribing im portance to maintainin g integrity andsound m anagement, av oiding easy gains, and working for the public interest, without being
misled by sh ort-term immediate changes. This philosophy has continuously f ormed thebasis of Sumitomo Corporation Group‘s business for more than 400 years.

Sumitomo Cor poration Group’s Man agem ent Principles are a contem porary tran slation of
Sumitomo’s Business Philosophy, which was devised 400 y ears ago, u sin g simplified
language and a clear structure, and rewritten from a more global perspective. The Ac tiv ity
Guidelin es provide guidance on h ow each com pany as well as their ex ecutiv es andemployees sh ould behave as they con duct daily business activ ities to realize theManagement Principles.
As declared in the Managem ent Principles,
our corporate mission is to su pport ourshareholders, clients, local communities,
employees, and every one else around theworld in their endeavor s to achieve
economic and spiritual prosperity andrealize their dreams throu gh our soundbusiness activities. We also maintain—
throughout
ourbu sinesspr actices—aunique man agem ent style that respects the
personality of each Individual and places
prime im portance on integrity an d soundmanagemen t, which represen t the essenceof Sumitomo’s Business Philosophy, whilecherishing a corporate culture that allows
each employ ee to take the initiative anddemon strate creativity that is con ductive tocontinuous reform and innovation.
By sh aring the v alues presented in theManagement Pr inciples and the Activity
Guidelin es across the Group to materialize
them in specif ic business activities, we aim
to be a global organization that constantly
stays a step ahead in dealin g with change,
creates new value, and c ontribu tes broadly
to society.

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Material Issues
Sumitomo Corporation Groups Material Issues
In April 2017, Sumitomo Corporation Group identified its material issues th at
illustrate th e relationships between its business activiti es and society. Th ese
material issu es are important elements that we should refer to in making decisions
on growth strategies and the management of individual business lines.

Leveraging our trust-based relationships with customers and partners across the globe and utilizing our business expertise,
we will secure our growth and address social issues simultaneously by fulfilling our Corporate Mission: “To achieve
prosperity and realize dreams through sound business activities.”
Achieving Harmony with the Global Environment
To realize recycling-oriented society and mitigate climate change,
we are working to establish frameworks for the efficient use ofresources and stable supply of renewable energy. In doing so, wewill achieve growth in harmony with the global environment.
Establishing a Foundation f or Comfortable and Enriching
Lifestyles
We strive to realize more convenient and comfortable lifestyles by
providing goods and services for daily use while also responding toneeds for high-quality lifestyles in order to support the physicaland mental health of people around the world.

Contributing to the Development of Local Communities andIndustries
We steadily procure and provide goods and services to meet the needsof people in various countries and regions and contribute to developing
industrial platforms. Thro ugh these means, we will create a virtuous
cycle in which we can grow and develop together with local
communities.
Providing Diverse “Accessibility”
We provide diverse accessibility to open up the possibility of creating
new value. To this end, we will improve mobility for safe and efficient
flow of people and goods, and expand the network connecting
information and finance.

As a prerequisite for resolving the issues listed above, we strive to maintain and enhance our Management Style thatplaces prime importance on integrity and sound management with utmost respect for the individual and our Corporate
Culture full of vitality and conducive to innovation.
Developing Human Resources and Promoting Diversity
In order to create new value and innovation by allowing ourdiverse personnel to fully exercise their abilities in a variety offields, we will promote the development and empowerment of
human resources, which represent our most importantmanagement resources.

Enhancing Governance
We will enhance our ability to draft and implement strategies forachieving sustainable growth and to provide appropriate supervision ofthese strategies, all while maintaining transparency. In this manner,
we will improve management efficiency and maintain soundmanagement.

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Material Issues
Material Issues Initiatives
Sumitomo Corporation Groups material issues
illustrate, in an easy to under stand way, how th egroup addresses social issues through its businessactivities in
Principles

soaccordance withastoits Management

contributetoachievingsustainabl e societies. These material issu es show

Important factor on decision-making process＝ making decisions on strategies and individual investments base on the trend of
long-term social issues and attitude towards provision of value required by society

stakeholder s and our company's executives andemployees

how

Man agemen t

Principles.

the

group
The

appliesentire

group

th e
is

Practice on Management
Principles through Each BusinessControl of Impacts to Social /Environmental Issues on Business

Strategic Development of Businessfor Solving Social Issues

Provision of value, governance,and risk control respond tolong-term social trend

Social/environmental risk
management on our groupand supply chain

Allocation of resources toemerging fields / Creationof next-generation businessinvolved in addressing these issues.
Material issues initiatives include: implementationoftheMan agem ent

Principles

inindividual

business activiti es and th e provision of the value
necessaryinoursocietyfromalong-term

perspective; careful managemen t of impacts ofthe en tire group's business activiti es on society
and the en vironment; and a grasp of business
opportunities in the long-term trend s of social
issu es to strategically develop business projects
that contribute to addressing social issues.
We believe th ese initiati ves help enh ance th elong-term business growth and stability of our

Increase in stability and growth potential
on management and corporate value in the long-term
Better recognition from shareholders and stakeholders
Increase in employees’ motivationcompany, constantly improve our group's valu e,receive high evalu ations and trust from various
stakeholders, and raise employees' motivation.

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Value Creation Model
Sumitomo Corporation Group’s value creation model is stood on its management base, which comprise global networks of numerous group companies andoffices, business relations in diverse industries, human resources and business know-how generated through such networks and relations, as well as thestrong trust and stable financial basis which we have developed over many years. Sumitomo’s business philosophy and management principles are placed at
the core of our value creation model. Along these lines, we will train and utilize our human resources, who are our most important management resource,
and combine our management base to create diverse businesses and ensure governance over the entire scope of our activities. In the current movement ofinnovation and social issues, we will stay a step ahead in dealing with changes. Through our activities of upgrading our existing businesses and developing
new frontiers, we will provide new values and contribute to the creation of a sustainable society. This is exactly how Sumitomo Corporation Group createsvalues.

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Medium-term Management Plan
In May 2018, we formulated “Medium-Term Management Plan 2020” to cover the three-year period from FY2018 to 2020. The plan was designed in response to abusiness environment in which the structure of industry is undergoing major change, with the rapid advance of Io T, AI, and other technologies resulting in the accelerationof the integration and globalization of all industries. The plan calls for ongoing initiatives to enhance the management bases, while placing the main focus on promotion of
growth strategies, as we continue with “unceasing challenge for new value creation.”
More specifically, we focus our efforts on the following three strategies to drive our growth strategies: “increase the value of existing businessesˮ to pursue the maximum
potential of each business and respond promptly to changes in the business environment; “create next-generation businessesˮ by identifying emerging fields in anticipationof social changes and issues and create systems for the development of value-creating businesses; and “leverage business platformsˮ to aim for organic and multilevel
collaboration between our businesses on the strength of our rich variety of contacts with different industries, societies, and regions. We also identified three fields -healthcare, social infrastructure, and technology x innovation -- that are expected to gro w significantly despite the accelerating change in the business environment, basedon megatrends and our material issues. Through the creation of new next-generation business opportunities in these fields, we will build new revenue streams from a longterm perspective with the aim of improving our corporate value not o nly during the three-year period of the current Medium-Term Management Plan but over next 10 and
20 years.
The Medium-Term Ma nagement Plan 2020 also calls for enhancing the management base to support gro wth strategies. Specific efforts include the reinforcement ofsupervisory functions of the Board of Directors and the enhancement of Group governance through internal control as well as creation of a corporate culture where diverse
human resources and individuality can be effectively used.

Medium-Term Management Plan 2020

~Unceasing Challenge for New Value Creation～

Creating the next-generation businesses:
Allocating management resources to 3 growth fields in prioritized manner
Growth Fields

Case

Technology x Innovation

・Acquisition of a stake in Sekal AS, a developer of automated oil andgas drilling process control software (Metal Products)
・ 5G-related business (localized 5G solutions and base-station
sharing) (Infrastructure / Media & Digital)
・ Investment in Elephantech Inc. in the printed electronics field(Mineral Resources, Energy, Chemical & Electronics)●Revolution in industry structure

and business models due to theshift to ICT and the disappearanceof borders for all industries

Healthcare●Aging of society/Inflation of
medical expenses●Technology innovation, such as
IoT and AI●Changes in industry Structure

・Promotion of managed care business in Malaysia (Living Related &Real Estate)Social infrastructure●Population growth/Advance ofUrbanization●Shift to private-sector outsourcing●Climate Change Issues

・ Acquisition of AIMO Park, a parking lot business operator in
Northern Europe (Transportation & Construction Systems)

Integrated Report 2019 『Implementation of Medium-Term Management Plan 2020』7

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How to Understand Sustainability / Sustainability Promotion System
Structure for Promoting Sustainability
Sumitomo

Corporationhas

establish ed

th e Corporate

Sustainability Departm ent, which is r espon sible for theplanningofmeasurestopromotesustainability

andensuring their implementation throughout the organization.
Meanwhile,thedep artment

coordinateswithgeneralmanager s, who ar e responsible for promoting sustainability
within each business unit, and with the sustainability
promoting

staff

of

each

businessunit’sPlanning&

Coordination Department. The department also works withthe su stain ability promoting staff of relevant corporate
departments and over seas r egional organizations to en surethat

sustain ability

implemented

promotiongroupwideandmeasures
al so

that

are

the

fully

different

business units and regional organizations pursue measur es
tailored to the specifics of their business or region.
The Corporate Su stainability Committee acts as an advisory
body to the Man agem ent Council and discusses important
policies, measur es, and initiati ves rel ating to th e promotionofsustain ability.

Importantinitiatives

rel atingtosustainability promotion are referred by the committee tothe Manag ement Council and the Board of Directors forfurther discussion. Some important initiatives are subject
to the deci sions of the Man agem ent Council and thesupervision of the Board of Directors.

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How to Understand Sustainability / Sustainability Promotion System
UN Global Compact
The Global Compact (GC) was proposed by the former UN
Secretary General Kofi Annan at the World Economic Forum(in Davos) in 1999 and officially launched in 2000 at the UN
Headquarters in New York.
The GC is an initiative aimed at realizing the sustainablegrowth of the global economy through the voluntary
participation of businesses in a worldwide network. The UN
invites companies and organizations from around the world tojoin in the GC and currently has over 13,000 companies andorganizations from approximately 160 countries participating.
The GC has compiled 10 universal principles recognized by the international community
based on international agreements in the areas of human rights, labour standards ,environment and anti-corruption. Participating companies adopt the 10 principles into
their business operations and strategies and are expected to assume responsible andcreative leadership as a good corporate citizen for the purpose of achieving sustainablegrowth.
In March 2009, Sumitomo Corporation Group signed the UN Global Compact

anddeclared its support for the 10 principles, shares the same values as our Corporate
Mission Statement. We are raising the awareness of our o fficers and employees aroundthe world regarding their purpose and making efforts to further increasing our corporate
value by constantly seeking out areas of our business activities that can be improved inlight of the values advocated by the 10 principles.
We are also actively participating in the activities of Japan’s local network, Global Compact
Network Japan, as one o f the board member companies. In FY2019, we took part inworking groups on: environmental management related to climate change, biodiversity
and other environmental issues; human rights due diligence; reporting; supply chain;
SDGs ; and ESG. Through this involvement, we acquire information on recent global
trends in these areas, learn of examples of superior initiatives, and are provided insightfrom specialists. This knowledge is utilized to help the Company promote Sustainability.

The Global Compact's 10 Principles
Human Rights
1.

Businesses should support and respect the protection of internationally2.

proclaimed human rights; andmake sure that they are not complicit in human rights abuses.

Labour Standards
3.

Businesses should uphold the freedom of association and the effective

4.

recognition of the right to collective bargaining;
the elimination of all forms of forced and compulsory labour;5.
6.

the effective abolition of child labour; andthe elimination of discrimination in respect of employment andoccupation.

Environment
7.

Businesses should support a precautionary approach to environmental
challenges;

8.

undertake initiatives to promote greater environmental responsibility;

9.

andencourage the development and diffusion of environmentally friendly
technologies.

Anti-Corruption
10. Businesses should work against corruption in all its forms, including
extortion and bribery .

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Social Issues and the Groups Business
At present, international organizations, national governments, local governments, private enterprises, and other groups and individuals throughout the world arecooperating to achieve common goals for s ustainable 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 will contribute to achieving various SDGs and realizing of a sustainable society throughaddressing material issues in our diverse business activities covering different countries and industries.
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 in water shortage areas, etc.

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

Impact of shortage of raw materials due to destructionof natural ecosystems, reputation loss due tomanifestation of adverse impacts, etc.

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

Environmental
Pollution

Reputation loss and decreased trust due to theoccurrence of environmental 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 of forests, etc.

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

Human Rights

Hollowing out of human resources, reputation loss and Development and stability of local communities and businessdecreased trust as a result of human rights violation, etc.through harmonious coexistence with local residents, etc.

Biodiversity

Work Health and
Safety/Health andProductivity
Management
Human Resources
Management

Supply Chains

Industrial/
TechnologicalInnovation
Healthcare

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

SDGs

Material Issues

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

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

Human resources retention, enhanced labor productivity,
increase in employee motivation, and opportunities to enternew business areas through providing appropriate humanresource development programs and realizing a fulfilling
working environment, etc.
Business continuity risk and reputation loss as a result of Development and stability of business by resilient value chains,
the occurrence of problems related to the environment, etc.
human resources and labor practices in supply chains,etc.
Deterioration of existing business and hollowing out of
Enhancement of existing business and creation of new businesshuman resources as a result of the shift to ICT, themodels through the shift to ICT, etc.
disappearance of borders for all industries, andcomplexity, etc.
Medical malpractice-related risks, etc.
Improvement of access to better medical care, enhancement ofefforts to respond to increased demand for drugs, etc.

Local infrastructure/ Business continuity risks as a result of the occurrence of Promotion of urban development and infrastructure projects
Community Planning problems related to the environment, human resources mainly in emerging countries, etc.
and labor practices at sites of urban development andinfrastructure construction, etc.

* This book consists of the items above based on the expectations of a representative ESG rating organization for our company.

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Infrastructure

Media & Digital

ESG Quantitative
Data

Third-party
Assessment

Social Issues and the Groups BusinessBusiness Unit

Metal Products

Transportation &Construction Systems

EV car-sharing in Sweden

Sewage treatment plant in
Rio Grande do Sul Province

Steel Service Center

Motor grader used for groundleveling

Reverse Vending Machine

Telecommunications business
in Myanmar (MPT)Long rail transport vessel

Lunar module manufactured byispace (illustration)

Dorper Wind Farm Pty Ltd. inSouth Africa

Promoting DX Groupwide

Remarkable improvement in thesafety of workers through theintroduction of non-contact tags

J:COM 4K Demo Event

Living Related & Real Estate Mineral Resources, Energy,
Chemical & Electronics

Interior of Summit supermarket,
Hon-Amanuma store

San Cristobal silver, zinc andlead mine

Business Examples

Climate Change

P39,40

P38,P39

Water Resources

P42,P43

Biodiversity

P46

Environmental Pollution

P50

P45
P47,P48,P50

P51
P28
P61

P28,P31

P28

P60

P53,P60

P78

P78

P80

P81

P67
P79

P79

Healthcare
Local Infrastructure/
Community Planning

Agrochemical project in Brazil (AgroAmazonia Produtos Agropecuarios
Ltda.)

P43
P46

Supply Chains
Industrial/technologicalinnovation

Diademed sifaka (Propithecus
diadema), critically endangered
species (Ambatovy Project)

P39,P41

P49

Human Rights
Human Resources Management

Forest owned by Terneyles

P39

Resource UseWork Health and Safety/Healthand Productivity Management

SC Foods “Yongenton Silky Pork®”

P83

P82

* This book consists of the items above based on the expectations of a representative ESG rating organization for our company.

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Enhancing Sustainability Management
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 theshifting business landscape impacted by these social issues.
Sumitomo Corporation Group’s Sustainability Initiatives

What We Need to Do Now

Sumitomo Corporation Group has gro wn into an integrated trading company overthe 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 400 years ago whenits 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 leading industrial development in Japan, however, there were
negative impacts on local communities including deforestation of nearby forestsand 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 thecoast.
“Benefit for self and others, private and public interests are one and the same”,
which is one of the credos o f Sumitomo’s Business Philosophy, and the actions
taken by our predecessors 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 o ur business serves the

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, and various players including corporations are making efforts toachieve these goals.

public interest.

【⇒Sumitomo’s Business Philosophy P3】

Today, after 100 years since the Osaka North Harbor Company Limited has
established, we have 70,000 employees working at more than 900 gro up
companies in 81 countries and regions and we do our business by engaging withmultiple stakeholders including customers, local communities, business partners
and employees. Our business as well as our relationship with the stakeholders
have expanded to a global scale and we believe that our mission is to protect theplanet and pursuing development for the world and better lives for our
stakeholders. 【⇒Corporate Mission Statement P3】

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 each of our business contributes to society and two wereadded as our important management topics. We have been placing the six
material issues at the core of our management to constantly be aware that thebusiness strategies and each business align with the material issues and making
sure that Sumitomo Corporation Group is contributing to society.
【⇒Sumitomo Corporation Group's Material Issues P4-5】
However, social issues such as the climate change have become increasingly
serious and have become a major threat to the sustainability of society. We
believe that we now need to make an even stronger commitment to further
identifying the issues that we should address and the roles that we should takefor the development of a sustainable society, and the Sumitomo Corporation
Group has commenced initiatives to enhance its sustainability management.
【⇒P12-16. Enhancing Sustainability Management P12-16】

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What the Group Will Bring About for the Development of a Sustainable Society
As Sumitomo Corporation works to enhance its
sustainability management, we have identified six key
social issues related to our business that we address
through our business and corporate activities.
The six key social issues are: “Mitigation of climatechange”, “Circular economy”, “Respect for humanrights”, “Development of local society and economy”,“Improvement of living standard” and “Quality
education”.
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, business expertise as well as
networks and business relationships. The six social
issues will demonstrate our role in the society andbecome our guideline to the Group’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 globally shared goal aswell as a major premise of the Group’s business. On
the other hand, the solutions for pursuing thesustainability of society will be generated from furthersocial and economic development and therefore, we
believe that these two themes are mutuallycomplementary. Also, we will pursue to achieve thesegoals through business activities, however, we willcontribute to providing quality education throughour philanthropy as well as human resources
development initiatives.

Key social issues and long-term goals for Sumitomo Corporation Group13

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Key Social Issues and Long-Term Goals for Sumitomo Corporation GroupFor development and advancement of society, we identified
development of local society and economy, improvement of living
standard, and quality education as the key social issues.
The Group's business is expanding to countries and regions
around the world. Helping to develop the communities where
we do business is a common challenge to all our business
operations. The Group will contribute to industrial
development as well as human resource development in thelocal communities and will endeavor to provide industrial andsocial infrastructure.

We identified mitigation of climate change, circular economy, and respectfor human rights as social issues that must be addressed to pursue asustainable society.
Preventing global warming and mitigating climate change areurgent issues that are indispensable for realizing a sustainable
society. The Sumitomo Corporation Group seeks to becomecarbon neutral in its business by 2050 and develop sustainableenergy cycles and create new business.

The world's population continues to grow, and many areas arefacing problems such as aging and urbanization. The Groupwill make effort to provide advanced life-related services that
contribute to a better life for all people.

The circular economy through recycling, reuse, reproduction,
resource-saving product development, and sharing is an
important element for maintaining social sustainability. The
Group will contribute to achieve circular economy by recycling,switching to resource-saving technologies and products, andworking on sustainable procurement of natural resources.

Quality education plays an important role in the developmentof local communities and economies, which enriches people's
lives and leads to creation of a sustainable society. The Groupwill promote various activities, including philanthropy, tocontribute to quality education.

Respect for human rights is a universal issue that must be
achieved in any place and at any time. The Group operates
business while engaging with multiple stakeholders including
customers, local communities and employees, and we will
strive to respect human rights throughout the Group'sbusiness and supply chains.

Long-term goals for individual key social issues include, for example, aiming carbon neutrality in 2050, which will be addressed on a long-term basis.
Meanwhile, there are goals that we must constantly work on, such as respecting human rights in all businesses and supply chains. We will set specificmedium-term targets for achieving these long-term targets, monitor KPI, and take actions while disclosing our progress to stakeholders.

14Sustainability
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Enhancing Sustainability Management
For Taking a Step Forward in Our Sustainability Management (the Material Issues and the Key Social Issues)
Sumitomo Corporation has identified its material issues in 2017 which are the Group’s priority issues in order to sustainably grow in harmony with society.
Based on Sumitomo’s Business Philosophy and Sumitomo Corporation Group’s Corporate Mission Statement, we organized how each business in our
portfolio contributes to society and classified them into four material issues. In addition, two issues were added, which are our important management
topics. We have been placing the six material issues at the core of our management to constantly check that the business strategies and each business alignwith the material issues and making sure that they are contributing to solve the social issues.
On the other hand, with the newly identified key social issues and their long-term goals, Sumitomo Corporation Group will take a step forward in its
sustainability management by defining the role it plays in achieving a sustainable society.
We believe that both of these initiatives are essential in order to understand how our business relates to social issues and also to make clear commitments
to society.
Six Material Issues to Achieve Sustainable Growth with Society●Important issues that should be prioritized by making the most of our strengths
through business activities●Illustrate how our business contributes to society●The basis of mid to long-term management strategies and individual business activities●Confirm that all strategies and businesses are compatible with the material issues

Key Social Issues and Long-Term Goals for Sumitomo Corporation Group●Social issues closely related to our business activities●Commitment to the role of the Group in achieving a sustainable society●Set medium-term targets and KPIs and monitor progress15

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Enhancing Sustainability Management
The Enhancement of Sustainability Management that We Seek
Enhancing sustainability management at Sumitomo
Corporation goes beyond identifying issues andsetting goals.

Sustainability Management at Sumitomo Corporation GroupIn addition to clearly commit to the role we play inachieving a sustainable society, it is necessary that
we focus on the optimal status of companies andtheir business that will be needed in a sustainable
society, such as carbon neutrality, circular economy
and zero violation of human rights. We need torecognize the paths to achieve them and thechallenges to be overcome, and consider the
strategies and allocation of management resourcesthat we should implement from a long-term
perspective.
We believe that capturing and pursuing the ideal
state of society will bring more business
opportunities. The Sumitomo Corporation Group's
sustainability management is about perfectly aligning
the vision of a sustainable society with the Group's
value creation and sustainable growth, and wecontinue to work on establishing a management
framework to achieve the vision.

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Our Climate Change Initiatives
 Climate change is a critical issue that the world must work as one to overcome in order to realize a sustainable society. Companies are being called on to play amajor part in tackling this issue.
 In order to create sustainable energy cycles and help solve climate change problems by realizing a carbon neutral society, this fiscal year, the Board of Directors
adopted a resolution concerning the Group's policies on responses to climate change issues and clarified the Group's roles.
Basic Policy● Aim to make the Sumitomo Corporation Group carbon neutral in 2050*.
Develop technologies and business models for creating a sustainable energy cycle by reducing CO2 emissions
and achieving negative emissions** for society as a whole.
●In addition to reducing and absorbing CO2 emissions from our business, we will contribute to the carbon neutralizationof society through cooperative initiatives and recommendations 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 andindustrial development of local communities. At the same time, we continuously shift management resources torenewables and other energy sources with low environmental burden in the power generation portfolio.
(By the target year of 2035, we aim to shift the composition of the portfolio in terms of net ownership generation
capacity as follows: coal 50% to 30%; gas 30% to 40%; and renewables 20% to 30%)
●Regarding the development of thermal power generation and fossil energy concession, we will work on thepremise of carbon neutralization in 2050.
* The scope of business targeted for carbon neutralization is as follows[Scope1・2] Direct CO 2 emissions from Sumitomo Corporation and its subsidiaries, as well as indirect CO 2 emissions from the generation of energy used byeach company (however, for power generation businesses, emissions from those affiliated companies under the equity method are also included)[Scope3] Indirect CO 2 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 CO 2 emissions that combine CO 2 emissions from our business and our contributions to CO 2 emission reduction.
** Negative emission refers to the absorption, capturing, and removal of CO 2 emitted in the past and accumulated in the atmosphere.

Additional notes: In 2019, the Company has established the following policies regarding coal-fired power generation business and thermal coal mining business. In addition, the revised policy sets
carbon neutrality by 2050 and the development of coal-fired power generation and fossil energy concession will be operated to meet the goal.
 We will not have new development in the coal-fired power generation business. However, we make a decision individually about new development in cases where the project is essential to theeconomic and industrial development of the local community and where the project is complying with the policies of the Japanese and host country governments based on the international
initiatives to mitigate climate change issues.
 In the thermal coal mining business, we limit our equity share coal production to our current levels, and desist from new mine development projects.

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Our Climate Change Initiatives
Governance
Structure for Responding to Climate Change Issues
 With regard to the various opportunities and risks related to climatechange issues involved in the Group's diverse business activities,
the Board of Directors receives periodic reports on strategies in theGroup's diverse activities each business field, their progress, andthe status of risks affecting the company's entire business portfolio,
and monitors whether appropriate management is being carriedout. In addition, the Board of Directors adopts resolutions
establishing policies on the Group's responses to climate change
problems and discusses the handling of important issues related topolicies on responses to climate change issues.
 The Group holds biannual strategic conferences with theparticipation of Management Council members to discuss strategies
in each business field including measures for addressing social
problems such as climate change under the Medium-termManagement Plan.
 In addition to the measures taken by individual business units withregard to the opportunities and risks presented by climate change
issues, the Corporate Sustainability Department, a dedicatedorganization for dealing with social problems, the Corporate
Planning & Coordination Department, which creates the company's
overall management plans and formulates key initiatives, and therisk management organizations work together, formulatingcompany-wide policies and promoting necessary initiatives. Basedon information provided by investigative organizations and salesorganizations within the Group, overseas sites, and other parties,
they deliberate on companywide measures.
 The Corporate Sustainability Committee (chairperson: Chief
Strategy Officer, secretariat: Corporate Sustainability Department)
follows global climate change mitigation trends and the Mediumterm
Management
Plan
Promotion
SupportCommittee(chairperson: Chief Strategy Officer, secretariat: Corporate Planning& Coordination Department) deliberates on strategies and risk
management measures related to climate change. The twocommittees provide reports and refers issues to the Management
Council, which makes critical decisions regarding climate changerelated measures.

Board of Directors
Decision making, supervision

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

Corporate Planning &Coordination Department

Corporate Sustainability
Department

Risk Management
Organizations

Overseas Sites

Medium-term Management
Plan Promotion Support
Committee
Corporate Sustainability
Committee

Information collection, analysis of
circumstances, reporting

Sumitomo Corporation
Group Business Portfolio

Business Units

Pursuit ofOpportunities

Responses to
Risks

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

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Our Climate Change Initiatives
Strategy: Climate Change-Related Risks and Opportunities
Sumitomo Corporation engages in global business in a wide rang e of fields, and busin ess environment chang es such as climate chang e and efforts tomitigate it will present risks to our business in each field, but the diverse social needs related to the tackling of the problem of climate change will
also present numerous business opportunities.

[Development of business
opportunities related to climatechange] In order to overcome the problem ofclimate change by stopping the global
warming
causedbyrisingconcentrations of CO 2 and othergreenhouse gasses, it is essential tocreate carbon neutral, sustainableenergy cycles by promoting the use ofrenewable energy, absorbing andreusing CO 2, and reducing energy
usage across industry as a whole.
 Our Group makes predictions about
long-termbusiness
environmentchanges in a wide range of fields, andin addition to our renewable energy
generation business, together withnumerous partner companies, we
engage in multifaceted measures that
contribute to the development of acarbon neutral society, such aspracticing more
efficientenergymanagement, cutting industrial energy
consumption,
sustainable
forestmanagement that contributes tocarbon capture and fixation, andintermittent innovation such as CCUS
and CO 2-free hydrogen production.

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Our Climate Change Initiatives
Strategy: Climate Change-Related Risks and Opportunities[Climate change-related risks and opportunities]
 With regard to the problem of climate change, various regulations may b e introduced in the future to encourage carbon emissions reductions anddecarbonization, and physical damag e is expected to occur as a result of th e intensification of climate chang e. In th e long term, ad vanc es ininternational deliberations, revision s to the greenhouse gas reduction plans of individual countries, and changes in the technologies and markets ofdiverse industrial fields may bring about various changes in our Group's business environment.
 Chang es in the business en vironment related to climate change are exp ected to have relativel y large financial impacts, such as those related to theintroduction of climate change mitigation regulations, in th e fields of power gen eration, en ergy-related bu siness, automobiles, aviation, and ships.
We have been continuously monitoring the impact of fuel regulations in these fields. Currently, the risks being produced by the negative impacts on
individual business fields are not sub stantial, as indicated below. Our business is diversified in various fields and regions, and it is our understandingthat there is little likelihood that risks in a specific area will have a substantial impact on companywide financial results.

Scenario Analysis
 We see climate change as a major issues faced by th e en tire world, and we identify bu sinesses 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
 From the perspective of objectively analyzing new busin ess opportunities and business resilienc e in the even t of major business en vironmentchanges, we perform quantitative scen ario analysis of impact on our business performance in the year s leading up to 2040(*) based on th e following
scenarios in the "World Energy Outlook 2019" issued by th e International En ergy Agency ( IEA). Our forecast data for each sector also uses asreference d ata i ssued by international organizations and industry groups, such as th e "Min erals for Climate Action" report published by the WorldBank.
* Each scenario's periodic profit changes/loss and asset value are indicated in one of three categories -- negative, neutral, and positive

・Stated Policies Scenario (STEPS):

Publicly stated policy scenarios b ased on existing policies and policies to be introduced in the future,such as the nationally determined contributions (NDCs) of individual countries

・Sustainable Development Scenario (SDS):

Sustainable growth scenarios that enable the achievement of SDGs, such as the 2°C target of theParis Agreement, universal energy access, or the elimination of air pollution

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Strategy: Climate Change-Related Risks and Opportunities
Identifying the businesses for which to perform scenario analysis
 Our scen ario analysis scope encompasses all of our business sectors which will be highly affected by business environment chang es rel ated toclimate change mitigation, regardless of the scale of the busin ess. This fiscal year, we have performed scenario anal ysi s after confirming stranded
asset risks, carbon pricing risks(*), and the like for the electric power, resource, transportation equipment, and material industry bu siness sectors. In
our analysis, we referred to the sectors design ated by the TCFD, the EU's su stain able finance action plan, the analysis methodologies of major ESG
evaluation bodies, and them es for which institution al investor initiatives such as th e United Nations Principles for Responsible In vestment (PRI) haveidentified engagement as being a high priority issue.
* Carbon pricing: Amounts levied based on carbon emissions, such as carbon
taxes and emissions trading

Scenario analysis scopeElectric power (coal and gas-fired power generation,
renewable energy, etc.)
Resources (coal, gas, nickel, copper, iron ore, etc.)
Transportation equipment (internal combustion engine
components)
Material industry (aluminum refining, steel manufacturing)

Scenario analysis results

Business scale

Business sectors selected for scenario analysis

Impact of change in business environment
related to climate change mitigation

 We u se the results of electric power, resource, tr ansportation equipment, and material indu stry bu siness sectors sc enario an alysis to forecast
demand, assess bu siness environments, and make predictions reg arding the impact of company policies and measures predicated on these bu sinessenvironment assessmen ts, competitiven ess in our related business sectors, and contract terms, and the impact on our business performance inrelated busin ess sectors. The results are indicated below. These demand forecasts and business environment assessmen ts form our understandingof major scenarios set forth by IEA, etc., and include numerous latent risks and uncertainties.

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Our Climate Change Initiatives
Strategy: Climate Change-Related Risks and Opportunities <Scenario analysis>* We perform quantitative scenario analysis of the impact of climatechange on our business performance in the years leading to 2040.

Electric power sector Power generation (coal and gas)
STEPS

SDS

Business
environment
assessment

The world's coal-fired power generation equipment capacity will remain roughly
the same as now. The amount of gas-fired power generation, which is one of
the lower carbon-emitting fossil fuels, will gradually increase.
Carbon pricing (carbon tax, etc.): Carbon pricing as of 2040 will be roughly
four times FY2018 levels.

There will be no construction of new coal-fired power generation facilities, andexisting power plants will be closed down ahead of schedule, so coal-fired power
generation capacity will be roughly halved. The use of gas-fired power generation,
which emits less carbon, will increase in recognition of its effectiveness as aregulated power supply when incorporating renewable energy. However, as
decarbonization advances, it will peak and then begin to fall.
Carbon pricing (carbon tax, etc.): Carbon pricing in 2040 will be roughly 25 times
FY2018 levels.

Our policies andmeasures

Under the SDS, carbon pricing will grow roughly 25-fold, and for power generation business which involves high levels of carbon emissions, both coal-fired and gasfired power generation, generally speaking, carbon-pricing risk will be commensurately higher, but we will perform the following risk hedging. Our policy is to shift theallocation of management resources from coal-fired thermal power to renewable energy and other power generation with low environmental impact. Many of ourexisting power generation business is based on long-term contracts with national governments in emerging and other countries where demand for electric power
continues to increase, and many of our electric power sales agreement include clauses that hedge the risk of fluctuations in returns due to changes in legal systems
such as CO2 emission regulations. And regarding their implementation, government guarantees from each country are obtained and overseas investment insurance ofNippon Export and Investment Insurance (NEXI) is granted. Thus, it is our belief that our stranded asset risk is low and growth strategies in the power generation
business are highly resilient.

Impact on ourbusiness performance

Neutral (coal)/neutral (gas)Neutral (coal)/neutral (gas) Renewable energy
STEPS

SDS

Business
environment
assessment

Due to the falling cost of renewable energy generation, such as solar and wind
power generation, measures around the world to support the introduction ofrenewable energy, and increased power demand, the use of renewable energy
will become more widespread. By 2040, solar power generation is expected toincrease roughly six-fold and wind power roughly three-fold.

Our policies andmeasures

In order to overcome the problem of climate change and create a carbon neutral society, the Group will carry out renewable energy generation business in a variety offormats, such as wind, solar, geothermal, hydraulic and biomass power generation. Also, one policy in the power generation business is to stably supply the energy
essential for economic and industrial development in local communities and continuously shift management resources towards a power generation portfolio composedof renewable and other energy sources with low environmental impact, and we have set the following targets.
By the target year of 2035, we aim to shift the composition of the portfolio in terms of net ownership generation capacity as follows: coal 50% to 30%; gas 30% to40%; and renewables 20% to 30%

Impact on ourbusiness performance

PositiveAs the use of renewable energy grows, by 2040, solar power generation is
expected to increase roughly 10-fold and wind power roughly five-fold.
Furthermore, there will be major advances in storage batteries and energy
management such as VPP to promote the greater use of renewable energy.

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Strategy: Climate Change-Related Risks and Opportunities <Scenario analysis>* We perform quantitative scenario analysis of the impact of climatechange on our business performance in the years leading to 2040.

Resources sector
 Thermal coal and coking coal
STEPS

SDS

Business
environment
assessment• Thermal coal: Demand will stay roughly unchanged until 2040
• Coking coal: Due to a partial shift to the use of electrical furnaces foriron and steel, demand is expected to decrease leading up to 2040.

Our policies andmeasures(Thermal coal) Demand is forecast to fall in conjunction with the transition to a low-carbon society, but thermal coal interests account for a relatively small
portion of our resource portfolio, the remaining production periods for the assets we possess are relatively short, and we have maintained a corresponding
level of competitiveness, so we believe that even if long-term demand slumps, we can control risk and prevent this from having a significant impact on ourmanagement plans. Furthermore, with respect to thermal coal interests, we plan to limit our equity share coal production to our current levels, and todesist from new mine development projects.
(Coking coal) Under the SDS, we forecast a decrease in demand for coking coal as the result of the use of electrical furnaces that use scrap and new ironand steel refining methods that produce less CO2 . However, the iron and steel refining business, which is supported by strong iron and steel demand andwhich uses high efficiency blast furnaces using CCS and CCUS technologies, will remain solid for the time being, so we believe that our high quality coking
coal interests will maintain their competitive advantage. We will continue to work to improve our competitiveness in the coking coal business.

Impact on ourbusiness performance

Neutral (thermal coal), neutral (coking coal)• Thermal coal: Coal-fired power plants will be increasingly closed ahead ofschedule, and demand for thermal coal will drop rapidly to roughly one
third of current levels by 2040.
• Coking coal: Although iron and steel demand will remain unchanged,
demand is forecast to drop to roughly a half of current levels by 2040 due
to the shift to the use of electrical furnaces and the commercialization of
low-CO2 emission iron and steel refining methods.

Negative (thermal coal), neutral (coking coal) Natural gas and LNG
STEPS

SDS

Business
environment
assessment

Demand is forecast to continue to grow, especially in areas with ongoing
economic growth, such as China, India, and the countries of Southeast
Asia, and global demand is forecast to grow by 30%. Revenue expansion
will be possible through the acquisition of new business interests.

As the shift to renewable energy continues, due in part to the effectiveness ofgas-fired power as a regulated power supply, demand is forecast to growslightly, but as decarbonization advances, demand will begin shrinking, andby 2040 is expected to have shrunk by roughly 10%.

Our policies andmeasuresIn the SDS, we forecast a decrease in demand of roughly 10%, but even through the transition to a low-carbon society, natural gas and LNG will continue
to play important roles as a power generation fuel used as a substitute for coal, as a chemical raw material, and as a transportation fuel. Assuming carbon
neutrality by 2050, in addition to enhancing the competitiveness of our existing business, we will prepare a supply system for markets, especially those in
Asia where demand is expected to grow considerably.

Impact on ourbusiness performance

Positive

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Assessment

Our Climate Change Initiatives
Strategy: Climate Change-Related Risks and Opportunities <Scenario analysis>* We perform quantitative scenario analysis of the impact of climatechange on our business performance in the years leading to 2040.

 Metals and rare metals (nickel, copper, and iron ore)
STEPS

SDS

Business
environment
assessment

The partial shift from vehicles with internal combustion engines toEVs, together with the gradual shift from thermal power torenewable energy sources, is forecast to result in an increase indemand for nickel for use in storage batteries and for copper for use
in conductors as energy becomes increasingly electrified. Iron andsteel demand is forecast to remain solid, backed by population
growth and urbanization.

The shift from vehicles with internal combustion engines to EVs,
together with the shift from thermal power to renewable energy sources,
is forecast to result in a significant increase in demand for nickel andcopper. Iron and steel demand will remain solid, but electric furnaces,
which emit little CO 2 and use scrap as a raw material, are expected to
become more common, so the level of iron ore demand growth isexpected to be gradual.

Our policies andmeasures

Nickel: In order to meet growing global demand, we are promoting business as a producer in the Republic of Madagascar, selling products toJapan, the West, and Asia, and aiming to further develop business.
Copper: We are involved in the production and sales of copper concentrate and copper ingots, upstream elements in the copper bullion production
value chain, through our investments in overseas copper mines. Through this, we are also contributing to the stable domestic procurement ofcopper concentrate.
Iron ore: We are contributing to the stable supply of iron ore resources through mining operations in South Africa and Brazil.

Impact on ourbusiness performance

Positive

Positive

Transportation equipment sector◆ Internal combustion engine components(*)
STEPS

SDS

Business
environment
assessment

Although global population growth will cause transportation equipment
demand to remain solid, there will be a partial shift from vehicles withinternal combustion engines to EVs, so internal combustion engine parts
demand is forecast to remain flat.

For transportation equipment, environmental regulations are forecast to betightened significantly, and structural changes such as shifting to the use of
public transportation is predicted. Demand for internal combustion engine
parts is expected to decline significantly due to major shifts from vehicles
with internal combustion engines to EVs and zero emissions vehicles such as
FCVs.

Our policies andmeasuresIn the transportation equipment sector, the internal combustion engine-related component manufacturing business may be significantly affected inconjunction with the electrification of mobility. We manufacture automobile and aviation components, but internal combustion engine components make upa small share of our business, so we expect the transition risk led by advances in EVs to be limited.
Our transportation related business does not involve manufacturing processes relating to automobile internal combustion engines, or ship or airtransportation business directly subject to fuel regulations, but is primarily in the leasing, finance, and sales businesses, and therefore, at present climatechange has not had a substantial impact. We believe that the effects of long-term changes in product demand in each market can be flexibly handled byreviewing our portfolio of leased assets and handled products.

Impact on ourbusiness performance

NeutralNeutral* Scenario analysis f or our transportation-r elated business was perf ormed only f or internal c ombu stion engin e com pon ents, which are
predicted to be significantly affected by the transition to the use of EVs.

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Strategy: Climate Change-Related Risks and Opportunities <Scenario analysis>* We perform quantitative scenario analysis of the impact of climatechange on our business performance in the years leading to 2040.

Material industry sector◆ Aluminum and iron and steel manufacturing
STEPS

SDS

Business environment
assessment

Aluminum refining: Demand is expected to increase as the result oftransportation equipment weights being reduced in response toenergy saving demands.
Iron and steel manufacturing(electric furnaces): There is potential forthe commercialization of steel manufacturing methods that emit little
CO 2. Electric furnaces will continue to maintain some level of demand.

Aluminum refining: Transportation equipment weights will need to befurther reduced, so demand is expected to increase significantly.
Iron and steel manufacturing(electric furnaces): The commercialization ofiron and steel manufacturing methods that emit little CO 2 is expected tocontinue. Electric furnaces will continue to maintain some level ofdemand.

Our policies andmeasures

We handle a wide range of metal products, from iron and steel products such as steel material and steel pipes to non-ferrous metals such asaluminum and titanium. These metal products are used in a wide range of applications, such as transportation equipment, appliances, officeautomation equipment, oil country tubular goods, pipelines, and more. Our iron and steel manufacturing business in the Americas is performed
using electric furnaces, which have relatively low CO 2 emissions, and our aluminum refining business in Southeast Asia is primarily powered byhydroelectric power, so future carbon pricing risk is limited, and we expect to be able to maintain our competitiveness over the medium and longterm.

Impact on ourbusiness performance

Positive

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Risk Management

Metrics and Targets

 Our Gro up's activities cover businesses across a broa d range of fields and regio ns, a nd
involve various social issues. We always attach great importance to these s ocial issues,and in order to appropriately control t he social and e nvironmental impact of t he entire
Group's business a ctivities, establish policies s uch as t he Environmental Policy, Human
Rights Policy, C SR A ction Guidelines for Supply Chain Ma nagement, Anti-Corruption Policy,
and Compliance Guiding Principles, and publicize and thoroughly enforce them within theGroup.

Target 1: Carbon neutrality initiatives
The Group's basic policies relating to climate change is indicatedbelow.
●Aim to make the Sumitomo Corporation Group carbon neutral in
2050.
Develop technologies and business models for creating asustainableenergy cycle by reducing CO2 emissions and achieving negativeemissions for society as a whole.

 We evaluate social and environmental risk and co nfirm res ponse meas ures as pa rt of o urdeliberation processes when considering and implementing ne w busines s from a broad
perspective. In particular, with re gard to climate cha nge , we confirm the following withregard to risks (a nd opportunities) related to business continuity being impeded by theinability to appropriately respo nd to changes in the business enviro nment res ulting fromsocial and environmental problems such as climate change.
••••

The impact o f climate change s uch as the freque nt o ccurrence 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 t he improvement o f busine ss
performance thro ugh advances in climate change mitigation and ada ptation toclimate change With re gard to our existing busine ss, as well, we regularly monitor the overallmanagement status o f these risks to each busine ss, including s ocial and environmental
risks. In addition to managing risk related to individual busi nesses, we assess the statusof company wide social and e nvironmental risks and develop systems that e nable theseassessments to be used to make strategic management decisions.
 With rega rd to t he handling o f the risks o f climate change, each business unit as sesses
the introduction of regulations a nd market changes for related business secto rs a nd
conduct s business activities, and as a part of companywide portfolio management, theCorporate Sustainability Depa rtment s ummarizes the status of majo r risks to the Group,
taking into co nsideration global e fforts relating to climate change and regulatory t rends .
The res ults are pe riodically reported to the Mana gement Council and t he Board o f
Directors . If there are a ny unacce ptable risks from the pers pective of the port folio as awhole, measures including reduction o f exposure are investigated with organizations
responsible for risk management.

●In addition to reducing and absorbing CO2 emissions from ourbusiness, we will contribute to the carbon neutralization ofsociety through cooperative initiatives and recommendations
made with business partners and public institutions.
Also, o ne policy in the powe r generation business is to stably
supply the energy essential for economic and indust rial
development of local communities and continuously s hiftmanagement re sources to wards a po wer gene ration portfolio
composed o f rene wable and other e nergy so urces with a lo w
environmental impact, and we have set the following targets.
By the target year of 2035, we aim to shift the composition o f theportfolio in terms o f net o wne rship generation capacity as
follows: coal 50% to 30%; gas 30% to 40%; and renewa bles
20% to 30%
Target 2: CO2 Emissions
Sumitomo Corpo ration set the following target co ncerning
electricity consumption taking into account o f the results o f theCO2 target set fort h by t he Pa ris Agreement. If this target isachieved by about FY2035, CO2 emissions over t hat period are
expected to be down approximately 46% compared to FY2013.
Reduce electricity consumption per square meter by an average o f
at least 1% annually and at least 20% until FY2035 both from baseyear of FY2013.

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Initiatives on Respect for Human Rights
Establishment of 'Sumitomo Corporation Group’s Human Rights Policy'
In May 2020, we established the "Sumitomo Corporation Group’s Human Rights Policy" that represents o ur 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 the individual. We will respect human rights to fulfill our corporate social responsibility, and pursue sustainable growthwith 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 theInternational 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 and business 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 that our group’s practices have caused or contributed to an adverse impact on human rights, we will endeavor totake 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 areincompatible with internationally recognized 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 isunderstood and implemented effectively.
6. Reporting
Sumitomo Corporation will disclose appropriate information regarding its efforts to respect human rights.

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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 canidentify, prevent, mitigate and account for how we address any adverse human rights impact that the Group business activities may cause or contribute to.
Our human rights due diligence is conducted through a process in accordance with international guidelines including the United Nations Guiding Principles on
Business and Human Rights, United Nations Guiding Principles Reporting Framework, and OECD Due Diligence Guidance for Responsible Business Conduct. As afirst step in 2020, we identified salient human rights issues that should be addressed with priority so that we can assess impacts concerning human rights
throughout the Group.
<Process of Identification of Salient Human Rights Issues>
The Sumitomo Corporation Group’s business activities extend to various industries
and regions. We started by conducting a desktop survey to confirm the Group’sbusinesses 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 thevalue chains in those businesses. For the survey, we referenced and analyzed
international human rights indices and data, benchmarks relating to human rights
including the Corporate Human Rights Benchmark and Know the Chain, andexamples of human rights risks recognized globally including those involving othercompanies. We also interviewed stakeholders including outside experts concerningbusiness and human rights and exchanged opinions regarding the results of theanalysis of the desktop survey as well as the Company’s initiatives to respect humanrights.
We next hired outside experts and conducted interviews between July andNovember 2020, on 12 internal business teams to compare the desktop survey
results with the understanding of those at the business sites. We also discussed thestatus of managing anticipated human rights risks.
Through these surveys and 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 eight salient
human rights issues within the Sumitomo Corporation Group. The entire process
and the results were reported to the Management Council and Board of Directors.

Identification andAssessment of Human
Rights Risks and Impacts● Desktop survey● Interviews of experts on
business and human rights● Internal interviews→ Identification of salient
human rights issues

Prevention and Mitigation of
Human Rights Risks● Incorporation in risk
management systems

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

Disclosure
Periodic disclosure of
initiatives concerning
human rights and theireffects

Remediation
In cases where an
adverse impact onhuman rights is
identified, an appropriate
remedial measure isinvestigated incooperation with the
responsible departments

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Human Rights Due Diligence<Salient Human Rights Issues>
Through the process described in the previous page, we identified the following eight salient human rights issues within the Group.
Labor conditions (wages
and working hours)

Forced labor and childlabor

Freedom of association and theright to collective bargaining

Workers

Workers

Health and safety of local
residents

Occupational health andsafetyWorkers

Discrimination andharassment

Land rights
Community

Community

Workers
Personal information andprivacy

Workers, etc.

Consumers & Workers

We believe that the human rights of workers throughout the supply chain including Group employees is essential as the foundations of business. In addition to the freedomof association and collective bargaining rights, forced labor and child labor, and discrimination and harassment, which are related to the four core labor standards of theInternational Labour Organization (ILO), we also take action to address labor conditions and occupational health and safety. The Gro up engages in business with strong ties
in local communities centered on the infrastructure business and resource development, and we have a responsibility to protect the health and safety of local residents andland rights. Moreover, since the Group engages in wide-ranging business, we have positioned the personal information and privacy of stakeholders including customers aspriority issues.
Risk

Examples of Potential Human Rights Risks Associated with Our Businesses

Business Unit

SectorSteel Products
Processing
Transportation
Automobile Parts& Construction
Manufacturing
Systems
Power, Industrial
Infrastructure
Parks
Metal Products

TelMedia & Digital communications,e-commerce
Living Related &Real Estate
MineralResources,
Energy,Chemical &Electronics

Food, Textile
Healthcare

MiningFreedom of
association
Labor
Right toconditions
collective
bargaining

Forced
labor
Child
labor

Occupational
health andsafetyHealth andsafetyof localresidentsLand
rights

Personal
Discrimination information
Harassment
Privacy<Future Initiatives and Issues>

For each of these issues, the Group will investigate and carry out actionplans to prevent and mitigate specific risks with priority on areas o f highrisk in the Group’s business. In individual businesses, we will monitor
initiatives to respect human rights that are already underway andperiodically disclose the results. Based on the results of risks assessments,
we will also incorporate human rights into the overall risk management
cycle including supply chain management and work to make
improvements.
The social environment in which we find ourselves is changing a ndtransforming on a daily basis due to advances in digital technologies,
effects from COVID-19, and other factors. In conjunction with this, thestatus of value chains and human rights issues in various businesses arecontinuously changing. The Group will periodically confirm relevant humanrights risks and effects involved in the conduct of our diverse businesses
around the world through dialogue with different stakeholders and othermeans and strive to gain an accurate and detailed understanding.
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Overall Initiatives

Example of a Cross-Business Initiative＜Discrimination and harassment＞
 See P66 for information on harassment training.
 See P98 for information on the Speak-Up System.

＜Personal information and privacy＞
 See P102 for information on Information Security Policy and internal education.

Example of a Cross-Business Initiative
Supplier Management in the Foods BusinessWe also urge suppliers and other trading partners as well as business partners totake action in order to promote respect for human rights throughout entire value
chains related to Sumitomo Corporation Group businesses.
As a specialized food and foodstuff trading company that is involved in all processes
from product development to selection of production areas in regions around theworld, 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 thattake into consideration sustainability including respect for human rights.
When selecting new s uppliers, SC Foods conducts data s urveys, and when
determined to be necessary, also performs on-site visits. With regard to existing
suppliers, more detailed questionnaire surveys are conducted of s uppliers of
products such as coffee, sugar, and sesame seed from certain countries with highhuman rights risks to confirm that there are no issues.
To strengthen these management cycles even further, SC foods introduced a systemof implementing on-site inspections once every five years, even with respect toexisting suppliers, in 2019, and these inspections have been completed forapproximately 20% of suppliers. During the COVID-19 pandemic, it has been difficult
to conduct on-site inspections, so SC Foods will investigate alternate methods suchas remote inspections in the future.
See P78 for information on acquisition of certification.
Related Salient Human Rights Issues

Freedom ofOccupational
Labor conditions association and Forced labor andchild labor
health and safety
right to CB
Personal
Discrimination and
Health and safety
Land rights
information andharassmentof local residents
privacy

Human rights initiatives at Fyffes
Fyffes, one of our group companies and, one of the world’s leading companies in
the production and wholesaling of fresh produce, completed its first evercorporate-wide Human Rights Impact Assessment in January 2020, through its
partner BSR. The human rights impact assessment was conducted throughreviews of existing Fyffes policies and procedures and interviews with internal andexternal relevant stakeholders, including NGOs, employees and customers. In
addition, Fyffes chose five countries to do an in-depth analysis – Belize, Colombia,
Costa Rica, the Dominican Republic, and Honduras. The countries were chosen
due to their importance to Fyffes as well as their potential risk profile.
The Assessment highlights the 13 most relevant human rights risks for Fyffes andFyffes Global Sustainability Steering Committee has endorsed the Company’s
Human Rights Mitigation and Management Plan which provides a framework to
manage, mitigate and help resolve identified risks.
Out of 13 identified human rights risks, 3 priority areas emerged from Fyffes
analysis for its immediate action: ‘access to a grievance mechanism’, ‘child labor’and ‘migrant worker labor violations and forced labor’.
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
was agreed to run a broader campaign internally to make sure that all employees
were aware of the hotline.
Fyffes does not tolerate any forced labor nor migrant human rights violations andcontinues to conduct and participate in internal and third-party ethical and social
audits, including Sedex Members Ethical Trade Audit (SMETA) audits throughout
a large proportion of its supply chain, s uch as Fyffes owned farms, various grower
partners and ripening facilities. In the UK, Fyffes Gro up Ltd has regular audits on
its labor providers and investigates any signs of forced labor, e.g. retention of
passports etc.
Related Salient Human Rights Issues
Labor
conditions
Health andsafety of local
residents

Freedom ofForced labor Occupational
association and and child labor health andsafetyright to CB
Land rights

Discrimination
Personal
andinformation andharassment
privacy

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Business Description
Human Rights Audit Implemented at Thailand Chicken Processing Plants

Dialogue with Local Residents in Mining Projects

In March 2019, with the appointment of external experts, Sumitomo Corporation
implemented a human rights audit at three chicken processing plants operated by Thaibusiness partners. Cases have come to light in Thailand of infringement of the humanrights of foreign workers in labor-intensive industries such as poultry rearing, seafood
processing, and garment manufacture. The Company makes periodic visits to theprocessing plants of its business partners to check that regulations on human rights andother areas are stringently observed. This audit was carried o ut with particular focus 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 as common 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 threelocations and the processing plants demonstrated proactive
communication with the Company and a strong commitment to further improvement ofoperations. To fulfill its social responsibility in the s upply chain, Sumitomo Corporation
Group will continue to address 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 with concerns over human rights risk.

In promoting resource development projects, understanding of local
areas is essential. In the development project of the Ambatovy nickel
mine in Madagascar, we have taken the initiative in having dialogues
with the government and local residents, in cooperation with the
diplomatic corps and lending banks gro up since the start of thedevelopment. We use these dialogues to share our belief that “thisproject 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 the employment of people in
Madagascar and improve their skills. In FY2019, 93% of all workers are
Madagascar people, and we are systematically working on technology
transfer and human resource development for them.
We have a complaint system to receive any kind of complaints, including
human rights violations, in cooperation with local communities, in orderto prevent accidents associated with the project and address them if theyoccur. Employees and external stakeholders are eligible to access thissystem. Project staff appropriately respond to complaints while protecting
personal information. Since 2016, the Ambatovy project has joined theVoluntary Principles on Security and Human Rights (VP SHR) program inpartnership with NGOs, the Madagascar government and other countries'
embassies.

Black Economic Empowerment Act in South Africa
Due to the history of apartheid in South Africa, there are policies that aim to reduce
inequality in rights and opportunities for black people to participate in economic activities
and to improve their social status. It is required to include at least a certain number ofblack companies in a business project and to give back part of the profits to the community.
In South Africa, Dorper on-land wind power generation company in which we have an
investment offers cooperation in improving the living environment of local residents andcreating new jobs, in line with s uch policies. Specific efforts include repair of buildings ofkindergartens, schools and hospitals located close to the power plant, provision ofmachinery to them, and support to restaurants operated by black women.
In these activities, we use local companies as much as possible. About 10% of the stocksof this company are owned by an NPO operated by local residents. It is planned to launchvarious projects that meet the demand from local residents with the dividends as a capitalin the future.

Job creation (Central Purchasing Center)

An elementary school built within
the project site

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The Challenges of New Value Creation with a View to the Next 100 Years
Sumitomo Corporation Group seeks to be a global corporate group that generate new value by continuously anticipating future changes and makes broad
contributions to society. Here, we present that challenges we are undertaking to create new value with a focus on the next 100 years.

Initiative (1)/Zero to One Challenge

Zero to One challenge is an internal entrepreneurial program launched in FY2018
that covers all Sumitomo Corporation Group employees worldwide and helps
individuals who want to achieve something to carry out their ideas. In the initial
year of the program, there were pro jects that achieved the formation of companies
in new business fields where Sumitomo Corporation has not been active in the past.
The images and aspirations of the program participants who have worked withsuch enthusiasm has given rise to widespread sharing o f sentiments within thecompany and reformed employee awareness and has led to the transformation ofexisting business. The FY2020 program has started based on the concept of“creating something from nothing by doing what can be done now and what canbe done only now.” We will continue to unceasingly tackle the challenge of newvalue creation through this program.

Asia

AmericasComments from Challengers in FY2018
Over the past 100 years, numerous 0→1 challenges havecontributed to Sumitomo Corporation’s growth. Is 0→1 no longer
needed, after tremendous growth has been achieved? The
answer is no; the Sumitomo Corporation identity will not allow
this. Through the 0→1 challenge, I will create business to support
the next 100 years.
Taiki Narita, Media & Entertainment Business Dept.

“There is no guarantee of success even if challenges areundertaken, but growth can be promised.” We work hard every
day based on this belief. Through the 0→1 challenge, we will
experience the development of new paths through action andseek to create new value for the next 100 years.
Yusuke Kinoshita, Wood Resources Business Dept.(right)
Kazunari Ishii, Wood Resources Business Dept / Woodchip & Biomass Dept.(left)

Coolly and accurately observe technology megatrends with anattitude of “starting now” and seize opportunities to change
actions as of tomorrow. Demonstrate the passion that develops
and work hard to achieve dreams. These are the keys to growthin the new era.
Hiroshi Takagi, Digital Solution Business Dept. No.1

I will develop business that solves social problems in sports andculture from the view point of club activities and create new
business fields. As a global company, we are tackling thechallenges of changing Japanese society and the world.
Dai Kawasaki, Digital Solution Business Dept. No.1

Comment from Norifumi Suzuki, CEO, 01Booster Inc.

EMEA-CIS

Zero to One challenge is a program for the employees of
Sumitomo Corporation Group to overcome the frameworks ofexisting businesses and take on the challenges of creating
business from what they want to achieve without being beholder
to short-term profit. As a supporter, I can sense the high level of
employee awareness concerning social contribution and that theirloyalty is increasing as the company develops environments. I am
confident that these initiatives will enhance the value of
Sumitomo Corporation Group over the medium to long term.

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The Challenges of New Value Creation with a View to the Next 100 Years

Initiative (2)/MIRAI LAB PALETTEMIRAI LAB PALETTE is member-based
open innovation lab established in April
2019 as part of the projects marking the100thanniversaryof
Sumitomo
Corporation’s foundation. The concept is
to function as a forum to encountercompletely different types of people andcutting-edge technologies and provide
mutualinspiration
without
being
constrained by custom. It will also go
beyondtheboundaries
ofallorganizations to create new value. The
lab relocated to the Otemachi Building in January 2020 and commenced full-scale
operations as an individualist space with permanent art installations.
The lab offers a variety of programs ranging from fro ntier business to art thatfacilitate encounters with a variety of different people and mutual inspiration. In
addition, development of a lab with a high level of diversity like that of a color paletteis underway with various partners including HAX (see column to the right) and Tokyo
University of the Arts, which collaborated on human resource development in the
VUCA era and sustainable business development.
A major paradigm shift is currently underway globally as a result of the impact of
COVID-19. Each of us can exhibit initiative and creativity, overcome all barriers,
stay a step ahead in dealing with change,
and create new value. We can makecontributions to all stakeholders. This is
the unchanging policy of MIRAI LABPALETTE.
By tackling challenges every day while
trying everything and embracing failure,
we will continue our activities to make
MIRAI LAB PALETTE into a sustainableecosystem for the future.

HAX Tokyo Accelerator Program
Sumitomo Corporation, acting in collaboration
with SOSV investments LLC (an American
venture capital firm) and SCSK Corporation
established HAX Tokyo, the Japanese version of
HAX, the world’s largest accelerator program
focused on hardware.
HAX provides support for prototyping and mass production by hardware
startups in Shenzhen, China and supports capital procurement in San Francisco,USA. HAX Tokyo, meanwhile, is a pre-program to find and support hardware
startups in the seed stage in Japan so they can be sent to HAX Shenzhen. The
selected startups will be taught the fundamentals of startup management,
design thinking methods, and other information through HAX’s own workshops.
At the same time. Outside experts from various companies and personnel from
Sumitomo Corporation will be dispatched to the startups and various persons
from inside and outside the companies will be incorporated to support trials
and business development.
Through
this
program,
Sumitomo Corporation seeks
to expand the scope ofcreation with startups and will
undertakeavarietyofprograms
tobroadly
invigorate Japan’s hardware
industries.

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Environmental Management
Sumitomo Corporation Group Environmental Policy

Policy and Concept
Throughout
its
400-yearhistory,
Sumitomo Group has pursued industrial
development in harmony with local
communities and the natural en vironment.
Based on this foundation, Sumitomo
CorporationGroup
pursuesbu siness
activities in such a way as to promote
environmental conservation. Recognizingthat various initiatives such as creating a
low-carbon society that all eviates climatechange, preserving biodiversity and theglobal environment, using energy, waterand resources su stainably, preven tingpollution and controlling waste emissions
are the most important and long-term
concerns
thatallindividuals
andorganizations must address, we haveestablish ed our Environmental Policy as
detailed on the right.
Sharing this policy, Sumitomo Corporation
Group companies are committed toreducing the environmental impacts of
their business activiti es as well as toimproving the environment through th eir
business activiti es, based on the ISO
14001 environment management system.

Ⅰ. Basic Policy
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.

Ⅱ. Basic Guidelines
In pursuing its diversified business activities both within Japan and overseas, the Sumitomo Corporation Group shallcomply with the following guidelines, and, thro ugh cooperation between its Group companies, work to achieve theaims of 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.

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Environmental Management
SystemTargets and Results

Environmental Management Structure
Sumitomo Corporation Gro up has established, based on the environme ntal policy,
the environmental management structure with the Corporate Sustainability
Committee as the center of t he st ructure. As for t he ISO 14001 e nvironmental
management system (EMS), since Tokyo a nd Osaka offices o f Sumitomo
Corporation acquired t he Group's first ISO 14001 certification in June 1999, t hecoverage of t he system has

been extended co ntinuo usly. Abo ut 20,000

employees in domestic locations o f Sumitomo Corporation and certain groupcompanies participates in these environmental ma nagement activities. At t he ISO
14001 Gro up Companies Co nfere nce, which consists of Sumitomo Corporation
and ISO

14001 integrate d ce rtification group compa nies, we

sha re t heTaking account o f the results o f t he 2℃ target set forth by the Paris
Agreement, Sumitomo Corpo ration sets long-term goals fo r electricity
consumption, water cons umption and waste emissions a nd promotes
environmental improvement activities respectively. The targets converted fromlong-term goals, results of FY2018, targets of FY2019 are as follows.
Long-term goals (Non-consolidated in Japan)
Electricity
Consumption
Water Consumption
Waste Emissions

environmental activities, and report to Corporate Sustainability Committee ifnecessary. Depending o n the importance o f the s ubject , Corporate Sustainability

Results of theBase year

Index

Committee discusses and reports to t he Manageme nt Co uncil a nd the Board of
Directors.

To reduce electricity consumption per square meter by an average of atleast 1% annually and at least 20% until FY2035 both from base year
of FY2013.
To reduce water consumption per employee by an average of at least
1% annually from base year of FY2010.
To reduce waste emissions per employee by an average of at least 1%
annually from base year of FY2010.

Consumption

Electricity Consumption(MWh)Intensity(MWh/m2)

CO2 Emissions（Scope1・Scope2）

Total(t-CO2)
Consumption

Water Consumption(m3)
Intensity(m3/employee)
Emissions

Waste Emissions(t)
Intensity(t/employee)

ISO14001 Integrated Certification Group Companies (Sumitomo Corporation and 25 Group companies as of April 2020)

Targets of
FY2019Results of
FY2019Targets of
FY2020

7,859

5,725

3,959

5,673

0.10790.10160.07020.1006

5,626

4,210

2,891

3,678

32,191

24,232

11,167

20,450

6.93

6.33

3.42

6.26

508

383

117

323

0.109

0.100

0.036

0.099

※The target amount of Electricity Consumption, Water Consumption, and Waste Emissions is calculated
from the intensity of each indicator.
※The base year of CO2 emissions is FY2013. CO2 emissions is the total of Scope1 and Scope2
calculated from target reduction in electricity consumption using the basic emission coefficients ofindividual power companies.
※Scope：Head office, regional offices, branches and sub-branches in Japan

Group Companies with ISO 14001 Certified (18 Group companies as of April 2020)35

Sustainability of
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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 stated in Medium-Term Management Plan 2020 that "we recognize climatechange related issues are important so that we contribute to solve those issues through our business activities as well as to reduce greenhouse gas
emissions.“ At Sumitomo Corporation, Eco Leader identifies the environmental aspects of each department and evaluates their impacts, and identifies 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

FY2019 Major Environmental Achievements

Comply withenvironmental laws andregulations• Implement continuing education program on the Waste Disposal
and Public Cleansin g Act and other environment-related
laws/regulations

Pursue environmentallysound projects• Expand renewable energy businesses• Promote businesses that help create a recycling-oriented society• Promote other businesses to reduce environmental burden• Seminars featuring outside instructors and workshops covering on-site checks at
industrial waste disposal facilities• Conducted education of legal compliance in e-learning environmental course• Promoted renewable energy businesses both in Japan and abroad: par ticipated in an
offshore wind power generation project in Europe, implemented the solar power
project in Australia and in Minamisoma City in Fukushima Prefecture, Japan,
geothermal power plant in Indonesia, Establishment of renewable energy fund, etc• Promoted businesses to create a recycling-oriented society, to reduce environmental
burden: Sustainable f orest management, verification of a large scale power storage
system utilizing reused EV batter ies in Satsumasendai City in Kagoshima Prefecture,investment in Taiwan’s lar gest electric bu s manufacturer, participation in
Demonstration Project for Japan-Australia Hydrogen Supply Chain Development etc

Manage and reduce
environmental burden• Measure and reduce electric power/ gas consumption and waste
generation at all sites in Japan• Reduced the consumption of electric power/ gas/ water and waste generation at officeyear-on-year• Measure and reducebusiness activities• Measured consolidated environmental data

theenvironmental

burden/impactof• Assess env ironmental impact in relevant supply chains and work
to reduce such impact
Promote environmental
education andcommunication related
to environmental issues• Hold events, including awareness-raising seminars related toenvironmental conservation• Promote effective use of environmental management systems• Expand disclosure of non-financial information• Conducted environment assessments on mine development and mining operation
businesses abroad and on construction and real estate businesses, as well as soil
pollution surveys for construction and real estate businesses• Continued to hold trainings on environment-related laws/ordinances• Hold seminar on climate change measures• Conducted e-learning environmental course which was completed by 100% of new
employees

36Sustainability of
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Environmental Management
Activities
Internal Environmental Audit

Environmental Educational Activities

Sumitomo Corporation conducts internal environmental audits on an annual
basis to ensure that the environmental management system of Sumitomo

its employees engage in e nvironmental co nservation. We raise environme ntal

Corporation and our ISO 14001 integrated certification group companies isfunctioning properly.
<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 2019, serious nonconformity was not identified.
External Audit

Sumitomo Corpo ration Gro up develops a variety of educational programs to help
awarenes s amo ng all Group employees by orga nizing such programs as trainings
on enviro nmental laws a nd re gulations as well as global environme ntal issues
given by outside experts.
Theme

Summary

Dates

Numbers ofparticipants

Training on the
ISO 14001
environmental
management
system

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

2019(twice)216

October
2019(twice)94

The basics and processes of internal
Training for internal
environmental audits, throughenvironmental
exercises, to be able to conduct
auditsaudits effectively.

In February 2020, 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.

Trainings on
industrial waste
disposal and on-sitechecks of waste
disposal service
providers

Practical knowledge, including
responsibilities of industrial waste
generators, contract criteria andproper disposal methods, and, at theon-site checks, the key points inselecting proper providers.

October toNovember2019(three times)

271

ISO14001 Management System Certificate

Trainings onenvironmental laws
and regulations

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

May 2019(twice)146

June 2019
to February
2020

668

Basic environmental Sumitomo Corporation Group’s
education
environmental policy and its（e-learning）
environmental management system.

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Climate Change
Policy and Concept
The impact of climate change is agrave global threat to th e stability ofsociety and the en vironment acrossgeneration s.
Consideringthatclimate change is al so a serious risk
to our group, which is globallyengaged in various bu siness ar eas,
we h ave recentl y reviewed th egroup‘s policy on climate change in
response to relevant international
trends. For details of the policy,
please refer to the Sp ecial Section
on P17.

Activities
Renewable Energy Related BusinessWe have entered power generation business using renewable energy, which is expected to grow as a medium- tolong-term energy source, contributing to mitigating climate change.
As of March 31, 2020
FuelSolar power

Wind power

Power plant

Country

Generation
capacity（MW）

Osaka Hikarinomori Project

Japan

10.0

Solar Power Saijo

Japan

29.0

Fuel

Offshore wind
powerPower plant

Country

Generation
capacity（MW）

Northwind

Belgium

216.0

Nobelwind

Belgium

165.0

Northwester2

Belgium

219.0

Solar Power Kitakyushu

Japan

16.0

Solar Power Tomakomai

Japan

15.0

Galloper

UK

352.8

Solar Power
Minamisoma/Kashima

Japan

59.9

Race Bank

UK

573.3

Solar Power
Minamisoma/Haram achi

Japan

32.3

Summit Handa Power

Japan

75.0

EVM/EVM2

Spain

14.0

Woody biomass Summit Sakata Power

Japan

50.0

Oga Wind Power Plant

Japan

28.8

Summit Myojo Power

Japan

50.0

Summit Wind Power (Kashima)

Japan

20.0

Muara Laboh

Indonesia

85.0

Datang Sino-Japanese(Chifeng) New Energy

China

50.0

CBK

Philippines

792.0

Stanton Wind Energy

USA

120.0

Cimarron Ⅱ Wind

USA

131.1

Ironwood Wind

USA

167.9

Dorper Wind

South
Africa100.0

Mesquite Creek Wind

USA

211.2

Geothermal
power
Hydraulic
power

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Climate Change
Activities

Business description

Other Eco-Friendly BusinessTo address climate change issues, we have entered power generation businessusing renewable energy. Our efforts in this regard also include eco-friendly businessusing new technology to promote the use of renewable energy and to increaseenergy efficiency.
Project

Details

Secondary Use of
Lithium-ion
Batteries for EVs

Power storage business by recycling lithium-ion batteries used forelectric vehicles (EVs), enabling stable power supply with renewableenergy sources and stable supply of power by power companies andmaintenance of its quality

CO2-free hydrogen can be produced through water electrolysis using
Production of CO2- renewable energies such as solar power, wind power, hydropower andgeothermal power. Our aim is to establish a complete CO2-free energy
Free Hydrogensystem.
We are making an investment in WarpForge, an Australian company
developing technology to inexpensively manufacture carbon fiber
composites, which are lighter an d str onger than c onven tion al m aterials,
Manufacturing ofsuch as steel. WarpForge's products are expected to be used for
Carbon Fiber
Reinforced Plastic extensive purposes ranging from the cargo beds of trailers and(CFRP)
containers to house construction materials. The replacement of
conventional materials by their products will lead to energy saving,
thereby contributing to reducing environmental impact.
Sale of EV Motor
Drive motor cores for EV/HEV are supplied to major automobile
Cores by Kienle +manufacturers in Europe, which helps reduce CO2 emissions, thereby
Spiess GmbH
contributing to preventing global warming.
(K+S)

CCS (Carbon
Dioxide Captureand Storage)

Our company is a shareholder in Japan CCS Co., Ltd. (JCCS). JCCS
is conducting a CCS demonstration project in Tomakomai using CCS
technology that captures CO2 generated from plants and power plants
before being released into the atmosphere and transfers it to ageological stratum suitable for underground storage in a stablemanner over a long period of time. In December 2018, we joined the
Global CCS Institute (GCCSI) to promote global development,
verification and application of carbon capture and storage (CCS)
through sharing of GCCSI's knowledge and fact-based advice andadvocacy. Our aim is to meet conditions desirable to apply CCS.

Ecological Solution Using Solar Panels
T-Gaia Corporation, which operates about 2,000 mobile phone stores inJapan, entered the solar power business based on “local production for local
consumption” concept through its fully owned subsidiary TG Power Inc.
T-Gaia has been installing solar panels at T-Gaia's mobile phone stores,
distribution warehouses, restaurants and other facilities. The use of clean
power generated by solar panels helps reduce CO2 emissions and address
global warming. It also allows stores and facilities to optimize energy balance
between supply and demand and improve cost efficiency.
Designated by NTT DOCOMO, INC. as a company to install solar power
generation systems at DOCOMO Shops nationwide, T-Gaia is gradually
installing systems at about 300
DOCOMO Shops. The company isalsoplanning todeployelectric

vehicles (EVs) as an energy storage
combined with power generation
systemincooperation
with
Sumitomo
Mitsui
Auto
Service

Solar panels
DOCOMO Shop
Use of clean power

Company, Limited, which is engaged
in car leasing. In the event of adisaster, electric power will be
supplied from solar panels as well as
the batteries of EVs to resume theoperation of shops as quickly as
possible and to ensure the safety
and security of customers and staff
members.

Use as emergency
electric power supply

Use surplus
power forEVs

In addition to the installation of solar
panels at mobile phone shops, the useof EVs and battery chargers has also
been promoted.

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Climate Change
Activities
Business description
Efforts to Reduce Greenhouse Gas Emissions from Ships to Zero
We collaborate with Corvus Energy Holding SA , a leading provider of marine
battery systems in Norway, to co nduct market research on energy storage
systems, promote the sale of these systems, and introduce them in Japan andother areas in Asia.
The energy storage system provided by Corvus Energy consists of a lithium
ion battery module and its control system, whose strength lies in temperature
control of individual battery cells. An energy storage system on a ship
increases the supply of required power and electricity and levels the load
(peak cutting), and thereby improves the ship's fuel efficiency and enables
downsizing of its generators. Ships with an energy storage system can cruise
in a port/harbor or an emissions control area with electric propulsion using
batteries, which generates less or no gas emissions and causes less vibrationand noise, thereby contributing to improving the onboard environment as well.
An energy storage system is a core system for the electrification of ships,
which leads to an improved environment inside and outside ships, improved
fuel efficiency, and labor-saving inspections, and eventually contributes toachieving zero emissions of greenhouse gases from ships.

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Climate Change
Activities
Business description

Business description
事業紹介
Promoting an Energy-saving Society through Funding Startups
スタートアップ企業への出資を通じた省エネルギー社会の推進

Efforts to Establish an International CO2 Free Hydrogen Supply Chain

We invest ジェ
in Elephantech
Inc., which has successfully
its original
当社はインクット 塗布技術をベースとするFlexible
Printed developed
Circuit Board( 以下

Our company, Kawasaki Heavy Industries, Ltd., J-POWER, Iwatani Corporation,
Marubeni and the Australian company AGL Energy Limited participate in a pilot
demonstration of refining and liquefaction of hydrogen gas from brown coal in
Latrobe Valley in Victoria, Australia, and its transportation and shipment, and averification project for the establishment of an international hydrogen supply chain.
The construction of verification facilities started in 2019. The first hydrogen
manufacturing and transportation there is scheduled for a period from 2020 to 2021.
In the verification project, our company is responsible for promoting communication
with the CarbonNet Project*, which is jointly managed by the Commonwealth ofAustralia and the Victoria State Government. We will contribute to completing theverification project with the aim of establishing a CO2 free hydrogen supply chain in
the future.

method of manufacturing flexible printed circuits (FPC) board based on inkjet
FPC)の独自製法の確立に 成功した エレファンテック社へ出資しています。 同技術は、銅
printing technology. This technology can reduce waste, energy consumption andwater consumption to less than one-tenth compared to the conventional method,
箔の不要部分を溶かす従来工法と比べ、廃棄物、消費エネルギー、水使用量を1/1
0以in which unnecessary parts of copper foil are melted, thus significantly reducing
下に出来る、環境負荷が極めて低い技術です。「不要なものを捨て る」 既存の技術ではenvironmental impact. Unlike the conventional technology designed to remove
なく、「
必要な部分にだけ材料を印刷する」インク
ジェ ットベースの製造技術が、今後世界
unnecessary
parts, the inkjet-based manufacturing
technology allows the printingof material only on the necessary parts. It is expected that this inkjet-basedの製造技術のスタンダードになっていくことが期待されます。
technology will become the international standard in the future.
また、同技術のIn Mold Electronics (IME：樹脂成型＋電気回路の一体 成型）
Automobile manufacturers that aim to reduce the weight of their vehicles haveへの転用は車載軽量化を目指す自動車メーカ
同社に同時期に
shown a n interest in the application of ーも興味を示しています。
this technology to In-Mold
Electronics(IME, integral molding of resinand electronic
circuits). We, in イチェーン構築、車
cooperation with
出資した他社とも連携し、FP
Cライセンス事業におけるグローバルサプラ
other companies that invested in Elephantech at the same time we did, will focus
載IME案件での事業化等、同社技術を軸とした新た な 価値創造に挑戦していきます。
our efforts on creating new value based on Elephantech's technology. We will
aim, for example, to establish global supply chains in the FPC licensing businessand commercialize in-vehicle IME.
Base material

Silver nanoink
printing

Copper plating

Advantages of the Elephantech
manufacturing method
Wires can be formed only on necessary
parts, reducing manufacturing costs andenvironmental impact.
Flexible Printed Circuit Board
manufactured by Elephantech Inc.

The simple manufacturing process canshorten the lead time.

*CarbonNet Project: A project managed by Victoria State in Australia for survey and verificationof the commercialization of CO2 recovery and storage

Participation in Initiatives
As a member of the Subcommittee on Global Environment of the Committee on
Environment and Safety of Keidanren (Japan Business Federation), our company
addresses global warming and climate change and helps design environmental
policies that will not harm the economy. We also participate in the Global
Environment Committee of Japan Foreign Trade Council, Inc. to discuss how torealize a low-carbon society and a recycling society, and to compliance withenvironment-related laws and regulations. When assessing whether to joinmembership with an industry group, we confirm whether the group‘s climate change
initiatives are consistent with our policy on climate change. Also, we implement
appropriate climate change countermeasures regardless of the level of influence of
the affiliated industry group.

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Water Resources
Policy and Concept
Water is an essential natural resource for companies.
However, due to an increase in water demand as aresultofpopulation
growthandeconomicdevelopment, there will be more and more areas
where water will become scarce. According to theOrganizationfor
Economic
Co-operation
andDevelopment (OECD), water demand is projected toincrease by 55% between 2000 and 2050 and, in
2050, 240 million people will have no access to cleanwater and 1.4 billion people will be without access tobasic sanitation.
Our Group conducts its business around the world,
including in highly water-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.

Activities
Water Business
While water demand is expected to increase on a global basis as a result o f population growth, urbanization andindustrialization, the infrastructure environment to ensure the s upply 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, waterbusiness that aims to address water issues has started attracting people's attention globally. Increasingawareness that developed countries are responsible for contributing to achieving a safe and hygienic 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 this recognition, we are engaged in various business projects around the world. We havebeen expanding our water business from BOOT and BOO business*2 using private-sector capabilities*1, such as
water and sewage treatment and seawater desalination, to fully privatized business in promising markets aroundthe world, including areas with rapidly increasing water demand. We have realized substantial achievements inthese business areas. We will continue to take on challenging issues in globally expanding and multifaceted waterbusiness by supplying safe and secure water using Japanese technology and responding to the demand for
reducing social costs by using private capital.
*1 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*2 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.

Business description

Business
category

BrazilInvestment in BRK Ambiental, a top Brazilian company engaged in water business, holds assets of
26 business projects of water supply and sewerage and industrial water treatment (our indirectownership ratio is 14%). We are participating in promising water supply and sewerage business in
Brazil.

Water supply
and seweragebusinessUK

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

China

We entered a partnership with Beijing Capital Co., Ltd., a major Chinese water business company
and has been involved in sewage treatment business in China. We currently hold assets inShandong Province and Zhejian Province.

Oman

We have received an order for a fresh water generation project using private-sector capabilities and Fresh water
generation
funds to desalinate seawater using reverse osmosis membrane technology. Commercial operation
business
was started in February 2016.

Country

Sewagetreatment
business

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Water Resources
Activities
Business description

Business description

Water Business in Brazil

Water Consumption Reduction and Wastewater Recycling at Mines

We hold shares in BRK Ambiental, the largest private water supply and seweragecompany in Brazil, with 26 subsidiary companies engaged in water supply and

The San Cristobal mine, which is situated in the highlands 4,000 meters above sea
level surrounded by the Andean mountains in Bolivia, ranks among the world's

sewerage and industrial water treatment, and have been involved in water businesslargest producers of zinc, lead and silver. Water is an important resource for thein Brazil. Due to the low penetration rate of water supply and se werage systems in
Brazil, infrastructure needs to be established and relevant business operations needmine. In this kind of region, the use of water for mining significantly affects theenvironment and local communities. To mitigate such impacts, we define

to be improved.
The aim of our business pro ject is to provide services of water supply and sewerage

operational policies for the rational use and responsible management of water withthe aim of reducing water consumption.

and industrial water treatment in about 100 municipalities in 12 provinces with

Specific efforts include promotion of technological studies to optimize water

about 17 million residents in Brazil. We co ntribute to expanding the use of watersupply and sewerage systems and improving their operational quality in Brazil with

consumption in the ore processing process , continuous implementation of measures
to improve efficiency by collecting and recycling wastewater, and regular monitoringhigh quality Japanese operational know-how and technology.
We use our expertise gained through our extensive experience in water businessof surface and ground water in potentially affected areas to assess the usability inlocal communities. Based on the study results, we use hypersaline ground waterand send our knowledgeable employees to operate water business in Brazil. We

that does not meet the standards for water for drinking, animal husbandry,

consider that the stable provision of water infrastructure contributes to improving
the regional water environment and furthermore developing regional communities.

irrigation and industry as a major underground water so urce for operation. We also
reuse mine wastewater, which accounts for 70% of the water necessary for
operation, with the aim of improving the efficiency of operation and achieving
harmonious coexistence with local communities.

Sewage treatment plant in Rio Grande do Sul
Province

Industrial wastewater treatment plant
operated by BRK Ambiental

San Cristobal silver, zinc and lead mine

A large dump truck carrying ore from a mining site

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Biodiversity
Policy and Concept
Sumitomo Corporation Group’s business activities largely depend on thewealth of Earth’s diverse living organisms as well as from the biodiversity thatis generated by their many networks. Therefore, our Environmental Policy
recognizes placing great importance on preserving the environment, including
the natural ecosystem and biodiversity as an important issue for us. We makeefforts to understand how our business activities that may have a significant
impact on biodiversity depend on such biodiversity, as well as what kind of
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 of management and improvement.

Activities

BBOP Principles on Biodiversity Offsets
1

Adherence to the mitigation hierarchy: A biodiversity offset is a commitment tocompensate for significant 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 ofthe biodiversity affected.

3

Landscape Context: A biodiversity offset should be designed and implemented in alandscape context 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 supporting an 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
and preferably 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 takenplace. Offset design and implementation should avoid displacing activities harmful tobiodiversity to other locations.

6

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

7

Equity: A biodiversity offset should be designed and implemented in an equitable manner,which means the sharing among stakeholders of the rights and responsibilities, risks andrewards associated with a project and offset in a fair and balanced way, respecting legal andcustomary arrangements. Special consideration should be given to respecting bothinternationally and nationally recognised rights of indigenous peoples and local communities.

8Long-term outcomes: The design and implementation of a biodiversity offset should bebased on an adaptive management approach, incorporating monitoring and evaluation, withthe objective of securing outcomes that last at least as long as the project’s impacts andpreferably in perpetuity.

9

Transparency: The design and implementation of a biodiversity offset, and communicationof 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.

Business and Biodiversity Offsets Program (BBOP) is an initiative to prepareinternational standards regarding biodiversity offsets, participated in bycompanies, governments, NGOs and other s pecialists. BBOP is referred to by
the Convention on Biological Diversity and has become recognized as aninternational standard regarding biodiversity offsets. We, as a Japanesecompany, participate in the program through the Ambatovy Project in
Madagascar. (Refer to the next page.)44

Sustainability of
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Activities
Business description
Ambat ovy Project
Madagascar

Contribut ing to Sustainable

Developmentin

One of the examples of collaboration between BBOP and Japanese companies 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
Project in Madagascar, o ne of the largest-scale mine development projects in theworld, 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
and pipelines, need to be constructed and operated, which poses substantial
impacts on the s urrounding environment. Particularly in Madagascar, there remains
a globally precious natural environment where as many as 1,000 species ofendangered animals are living. We give careful consideration to these natural
habitats in developing and operating the project. In developing and implementing
plans for the project, s pecial emphasis is placed on environmental management incompliance with not only Madagascar national laws but also various guidelines, suchas the World Bank safeguard policy, the International Financial Corporation's (IFC)
Performance Standards, the World Health Organization (WHO) standards, and theEquator 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 standards. For example, in developing the mining area, wecreated a buffer zone of about 4,900 ha around the mining site of about 1,800 ha
to ensure protection of wild animals. When trees are cut do wn to develop the minesite, 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 withinternational environmental NGOs. If endangered or other species that need to beprotected 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.

After starting the construction of pipelines, habitats of endangered animals were
found on the ro utes where the construction was planned. In response , we changed
24 routes in total to bypass these habitats. We are also promoting a large-scalebiodiversity offset program under the “no net loss, net gainˮ concept. This is anapproach 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 Ankerana area, which has an ecosystem similar to that of thedevelopment 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 ofareas near the mine site, tree replanting after the installation of pipelines, and tree
replanting on the mine site after the closure of the mine.

Coquerel's Sifaka (Propithecus coquereli),endangered species

Diademed sifaka (Propithecus diadema), criticallyendangered species

Golden Mantella (Mantella aurantiaca), criticallyendangered species

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Business description

Bird Friendly ® Coffee
Sumitomo Corporation Group has imported andsupplied Bird Friendly ®-certified coffee (BF®-certified
coffee) since 2004 as part of our biodiversity-friendly
activities, which ensures a stable income for farmers.
Since FY2014, SC Foods Co., Ltd. started dealing in
BF®-certified coffee. BF®-certified coffee is grownunder the shade of natural forest trees to conserve
the environment and provide migratory birds a place
to rest. The BF certification was created by theSmithsonian Migratory Bird Center (SMBC). As of May
2020, 52 farms and agricultural cooperation in 12
countries*1 are certified and part of the proceeds areused for SMBC's research, surveys and co nservation
activities.
*1 12 countries: Ethiopia,

Thailand, El Salvador,
Columbia, Peru, Nicaragua,
Bolivia, Honduras, India,
Mexico, Dominica, Guatemala

Harvest of BF®-certified coffee

In 2019, this project was recognized by the Japan
Committee of the International Union for Conservationof Nature and Natural Resources (IUCN) as acooperative project authorized by the Japan
Committee for the United Nations Decade on
Biodiversity (UNDB-J)*2. This authorization meansthat the project is an important activity to conserve
biodiversity as well as an activity that has achieved
results toward meeting the Aichi Biodiversity
Targets*3. We will continue our efforts to contributeto protecting migratory birds and ecosystems throughthis project.
*2 The committee was established in September 2011 toencourage the participation and cooperation of all sectors inJapan to promote efforts to conserve biodiversity and ensure
its sustainable use.
*3 New international targets to conserve biodiversity, whichwere adopted by the 10th Conference of Parties (COP10)

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

Bird-strike
Generation

Prevention

in

Wind

Power

Dorper Wind Farm generates electricity using wind in a
mountainous area of about 130 km2 in Eastern Cape,South Africa. In the Doper wind power ge neration
project, measures to prevent bird strikes are
implemented.
Windmills are installed in pastures and bird strikes arecaused by birds that flock to feed on the carcasses o f
livestock and other animals. We therefore ensure to
remove animal carcasses found in the power plant.
We also hire local residents to visually confirm if there
is any endangered bird species circling around thewindmills and, if detected, to send an emergency notice
to stop the operation of the windmills. It is our aim toachieve a harmonious balance between wild animal
conservation and wind power generation business.

Dorper Wind Farm Pty Ltd. in South Africa

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Environmental Pollution
Policy and Concept

Activities

Sumitomo Corporation Groups business covers a wide
range of areas around the world. As described in theEnvironmental

Policy,

the

Group

complieswithenvironment-related laws and regulations andcontributes to creating a recycling society. We
consider it important not only to comply with laws,
ordinances and standards to prevent pollution caused
by waste water, sludge, exhaust and other wastes but
also to reduce environmental impact through waste
reduction, reuse and recycling in order to achieve asustainable society. We will continue to address
relevant issues through our business activities.

Business description
Air/Water Pollution Prevention in Mining Projects“Social license to operate” is a term that means to gain
approval from society to carry out business activities.
The mining business in particular requires initiatives toreduceenvironmental
impactarisingfromdevelopment and to facilitate sustainable developmentof local society. In conducting the mining business, theSumitomo Corporation Group values compliance withlaws and regulations, as well as the concept of a social
license to operate, and works on re habilitation at allmining sites where it operates to minimize its impact
on the ecosystem and contribute to environmental
restoration.
For example, in the San Cristobal Mine in Potosi
Department in Bolivia where dust is easily dispersed bydry, cold and strong wind, air quality is monitored atparticulate matter PM10 observation stations set up inmining sites, debris storage sites, and lodging facilities,
eight in total. In addition, in a community area in San
Cristobal and the Culpina K observation station, air
quality is measured using a cascade impactor, which
can measure particulate concentrations by particle size,for 24 hours every 12 days according to US
Environmental Protection Agency (EPA) standards.
Measures to prevent dust and particulate matter fromdispersing are also taken, including vehicle speed limits
in operation areas, installation of sprinklers, andconstruction of a dome 140 m diameter, the largest inSouth America. Efforts are also made to prevent waterpollution. In our coal business in Australia, a large
amount of water needed in the coal mining process isused in a sustainable manner. Wastewater after
cleaning
mineralsismanagedunderstrictenvironmental
regulations:
Impurities
inthewastewater are deposited until the water quality
reaches a certain level; The water after removing
impurities is reused for coal preparation, prevention ofcoal dust dispersion, rehabilitation and other purposes.

Huge dome for the purpose of preventing coal dust
dispersion in the San Cristobal Mine

Coal mine in Australia

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Environmental Pollution
Activities
Business description
Efforts to Reduce Environmental Impacts in the Agrochemical/Fertilize r Sales BusinessOur major mission in the realm of agrochemical/fertilizer business is to provide thebest-quality agrochemicals/fertilizers that fulfill the needs of farmers worldwide withthe aim of contributing to increasing the productivity of agricultural crops. We selectand combine functions such as import, manufacturing, wholesale and direct sales bytaking into account the characteristics of each market, and we are currently
conducting agrochemical/fertilizer business in over 30 countries.
In some areas, unfortunately, farmers and distributors inappropriately dispose of
emptied plastic bottle containers and aluminum bags o f agrochemicals, which canpollute the environment. There are also concerns that agrochemical remains in suchcontainers could lead to an accident and adversely affect the environment. Agro
Amazonia Produtos Agropecuarios Ltda. in Brazil and Summit Agro Mexico S.A. de
C.V. in Mexico involve other companies in the industry to make joint efforts tocollect and recycle empty containers of agrochemicals to promote environmental
conservation.
Efforts are also made to reduce the environmental impacts of agrochemicals
themselves, including investment in Futureco Bioscience S.A., a bioagrochemical
manufacturer in Spain, and application of integrated pest management (IPM), which
does not depend on agrochemicals alone and has low environmental impacts.

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

As an IPM effort, we are spreading the use of a communication disruptor(pheromone agent) developed by Shin-Etsu Chemical Co., Ltd., whichuses insect's natural sex pheromone. It is harmless to non-target organisms, andnot only reduces the population of the target pest but is also effective on pests thatenter inside plants and are hard to control.
It can also be expected to reduce the pesticide resistance of pests. This control
method is currently applied by about 60% of orchards in France. In the European
region, we have expanded o ur sales territory to include Poland, Bulgaria and Russia
since 2015. In Russia, Summit Agro LLC, a local distributor, is recognized as thefirst company to have introduced a pheromone agent to the country.
In addition, we put our efforts into reducing the amount of conventional chemicalfertilizer applied and reducing environmental impacts on farmland by expanding thesales of coated fertilizers (allowing farmers to control the pace of fertilizer elution
and enhance the effective utilization rate of fertilizer constituents, thereby reducing
the amount of fertilizer applied) and biostimulants (which increase plants’ tolerance
to diseases and pests as well as to cold/heat stresses by enhancing their innate
immunity and vitality, thereby enabling the use of reduced amounts of fertilizer).

Investment in a bio-agrochemical manufacturer in Spain

Use of a pheromone agent

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Environmental Pollution
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Business description
TOMRA Japan Limited: Development of Recycling Systems for Beverage Containers
As part of efforts to address global environmental issues, such as marine plastic waste and global warming, reduced and effective use of plastic resources havebecome increasingly important. Despite the necessity of these efforts, used resources are collected at each local municipality's discretion and are not supplied torecyclers in a timely manner.
TOMRA Japan, a joint venture of TOMRA Systems ASA (in Norway) and Sumitomo Corporation, is engaged in the sales of Reverse vending machine (RVM) for
PET bottles and recycle paper systems (RPSs), and resource recovery. TOMRA Japan installs RVMs/RPSs at local convenience stores and supermarkets mainly in
the Kanto area to recover used resources from local residents and supply them directly to recyclers, without the intermediary of municipal governments. This
recycling system helps achieve efficient resource circulation.

Reverse Vending Machine

Slogan of the TOMRA Group ：「LEADING THE RESOURCE REVOLUTION」

Circulation recycling system with RVM as a platform49

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Business description

Efforts to Re duce Env ironmental I mpact in the Steel Pipe Business Utilizing
Digital Technology

Compliance wit h Regulations for Exhaust Emissions
from Vessels

In response to the gro wing awareness of environmental impact reduction in recent years, the oiland gas industry, led by major oil companies such as BP in the United Kingdom and Shell in the
United Kingdom, is required to take prompt action to address climate change and environmental
issues. In response to this trend, s uppliers of materials and equipment to these energy development
companies are required to present specific measures to address environmental issues.
We distribute and manage several 100,000 tons of steel pipes foroil and gas development annually. The major products in thisbusiness is the transportation pipe (line pipe) and OCTG (oilcountry tubular goods) pipe utilized in drilling environments.
Energy development companies and pipeline operation companies,
which are major customers in pipe service and distribution
business, are required to handle enormous amounts of data about
Remarkable improvement in the safety ofworkers through the introduction of nonall stages of the s upply chain, from pipe manufacturing to coating
contact tags
and construction on site. Recently, our company developed adigital platform (SC EVO), consisting of a suite of digital tools thatenable the integrated management of data. In 2019 the tool
focused on material traceability was implemented in a pipeline
project for the first time in the world.
With every piece of pipe tagged with data, the foundation is laid
for future visualization of greenho use gas emissions at each stage
Construction site of a land pipelineof the supply chain from pipe manufacturing to completion ofpipeline construction.
In the oil and gas industry, where traditional data management
methodology has long been used, o ur company’s efforts areprogressive and have earned high marks from customers andsuppliers. We are currently conducting surveys and studies withaffiliated companies with the aim of applying this system to more
SC Digital Platformpipeline projects.

Sumitomo Corporation Group has supplied fuel for vessels toshipping companies in Japan and abroad since 1952. The Groupannually supplies five million tons, which account for abo ut 2.5%of the world demand, the largest of an integrated trading company.
The exhaust gas emitted from fuel for vessels contains sulfur oxide,accounting for 5-10%, nitrogen oxide, accounting for 15-30%, andcarbon dioxide, accounting for about 3% of those in the world.
Consequently, these pollutants have raised concerns overpotentially adverse effects on the human body and environment.
In response, the “International Convention for the Prevention of
Pollution from Ships, 1973, as modified by the Protocol of 1978
relating theretoˮ globally regulates sulfur concentrations containedin fuel oil. In 2020, the International Maritime Organization (IMO)
significantly lowered the sulfur cap in marine fuels from 3.5% to0.5% in general sea areas.
To be prepared for the strengthened regulation, we areconsidering supplying LNG, as a low environmental impact
alternative fuel. LNG fuel emits no sulfur oxides, 40-70% lessnitrogen oxide and 20% less carbon dioxide, compared toconventional fuel oils. As a specific effort, we established a joint
venture in November 2018 with Uyeno Transtech Ltd. andYokohama-Kawasaki International Port Corporation to promote
LNG bunkering business in Tokyo Bay. In February 2019, we
signed a contract agreement on the construction of bunkering
vessels.

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Resource Use
Policy and Concept

Activities

Huma ns depend on the socially bene ficial functions o f forests . Forest s are
therefore a significantly importa nt reso urce for the sustaina ble development of
the world. More tha n 1.6 billion people in t he world receive benefits from forests ,such as fo od, water, ho uses, fuel, me dicinal pla nts and mea ns of livelihood.
75% of a ccessible drinkable wate r originates from basins with fo rests.
Sumitomo Corporatio n Gro up, which is engaged in woo d busines s using s uch
precious forest reso urces , has been expa nding its business to include forest
management with the aim of securing and using forest resources in a moresustainable manner than before.
In line with the conce pt of sustaina ble forest manageme nt, which mea ns that
activities using forests sho uld be co nducted in such a way as not to lose thesocially beneficial functions o f forests , the Gro up sets its busines s goals in s uch a
way as to fulfill its social responsibilities and i n compliance with theEnvironmental Policy and Supply Chain CSR Activity Guidelines.

Results
We are selling the certified log, certified wood products and wood chips fromforests owned by the Sumitomo Corporation Group in Russia (OAO Terneyles)
and New Zealand (Summit Forests New Zealand).

Business description
Terneyles Timber Business in Russia
In 2004, to be certified that we manage fo rests appropriately with consideration
for t he e nvironment and local communities based on objective evaluation, OAO
Terneyles obtained F SC® Ce rtification*1, a n internatio nal standard, for part of
2.6 million hectares o f the forest a rea in the R ussian Far Ea st. A fter receiving
FSC-F M certification*2 in 2004 as the first com pany in the Russian Far East,
Terneyles made improvements o ne by one to meet t he requireme nts for the
FSC-CoC (Chain-of-Custo dy) ce rtification*3. In 2011, the company success fullyacquired the certification fo r all of its products, from ro und wood to lum ber,laminated timber, ve neer, a nd woodchips . Sumitomo Co rporation also re ceived
the F SC-C oC certification, and the s upply chain fo r providing custome rs with
FSC-certified products from raw materials logged by Terneyles was completed.
*1 FSC® Certification : an 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 and distribution
processes): verifies that FSC® certified material is identified or kept separated from non-certified
material throughout the chain.

FY2019 Results
Certified log (Russian)

150 thousand m3

Certified log (New Zealand)

260 thousand m3

FSC License Number

Softwood lumber

50 thousand m3

Terneyles

FSC® C009842
FSC® C106397

Veneer

202 thousand m3

Softwood laminated lumber

28 thousand m3

Summit Forests
New Zealand

FSC® C112972

Sumitomo Corporation

FSC® C016535

Certified wood
products (Russian)Hardwood lumber/laminated lumber
Wood chips (Russian)

5 thousand m3
39 thousand BDT

Forest owned by Terneyles

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Human Rights
Policy and Concept
For more information on human policy, see page 27.

For more information on social and env ironmental risk manage ment,see page 100.

Respect for the Rights of Children

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 and environmental impacts including human rights.

As the world population is mostly made up o f children and younger generations,
the Sumitomo Corporation Group is aware that its corporate activities have an
impact on the lives of children both directly and indirectly. For companies, children
are family members of employees, as well as important stakeholders who will play
future roles in the s ustainable 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 topreventing the violation of children’s rights through o ur business and social
contribution activities.

Sumitomo Corporation Group Statement for UK Modern Slavery Act 2015
We set out the steps Sumitomo Corporation Group has taken to help ensure thatmodern slavery and human trafficking are not taking place in SC Group'sbusiness or supply chains. The statement is approved by the board of directorsof Sumitomo Corporation as the parent company of Sumitomo Corporation Group.
Statement for UK Modern Slavery Act 2015

Respect for the Rights of Indigenous Peoples

Training Seminars on Human Rights

As part of its commitment to respect human rights, the Sumitomo Corporation
Group respects global standards pertaining to the rights of indigenous peoples,
including the United Nations Declaration on the Rights of Indigenous Peoples, andthe principle of “free, prior and informed consent (FPIC).” In business operations inareas where indigenous peoples reside, we recognize their unique culture andhistory and comply with applicable laws and regulations of each country or region.

Sumitom o Cor poration Grou p’s bu siness activities cov er a wide ran ge of countr ies,
regions an d in dustrial f ields. We ther ef ore c onsider th at it is necessary for the Grou p toConcept Concerning the Use of Security Companies
In the operation of its business in countries around the globe, the Sumitomo
Corporation Group uses security companies to protect the safety and security of its
employees. When necessary, we may use armed security personnel, recognizing
the human rights risks involved and complying with laws and regulations of thecountries in which we operate. We select security companies in accordance with theVoluntary Principles on Security and Human Rights and the Basic Principles on the
Use of Force and Firearms by Law Enforcement Officials.

cooper ate with su pplier s, custom ers an d busin ess par tners, instead of ac ting alone, inprom oting the entire su pply chain to pr omote CS R throu ghout the entire su pply chain.
Since FY2014, we hav e held sem inars with ex ternal experts an d e- learning on humanrights issues that need special attention in business activities.
The seminar s cover a wide ran ge of topics, inclu ding therelationship between companies an d human righ ts
issues, actual c ases of r epu tational risk s fr om humanrights an d how to assess th e influence of human rights.
Commen ts from sem inar participants inclu de “S ince theGroup is en gaged in diver se business activities allaround the world, we should c ontinue awar eness-r aising
activ ities so that as many em ploy ees as possible c anbetter understand relevant issues.ˮ

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Work Health and Safety/Health and Productivity Management
Policy and Concept
Basic Policy

Safety Measures in Uranium Mining“To achieve prosperity and realize dreams through sound business activities”
is one of the management principles of the Sumitomo Corporation Group.

Our Groups development of uranium mines, production and sales of uranium
concentrates(※1), and trading of various kinds of nuclear fuels containing

Based on this principle, our mission is to ensure the economic and spiritualradioactive materials comply with each country's laws and regulations based on theprosperity of people around the world, including our employees, shareholders,clients, and local communities, and to fulfill their dreams. We also believe

IAEA (International Atomic Energy Agency) standards. With our highest priority on
HSSE (Health, Safety, Security and Environment), we place the utmost importancethat in order for every employee to maximize his/her performance, good
physical and mental health is essential, without which it is not possible toin ensuring the safety of onsite employees and local residents. Specific measurestaken in production and sales of uranium concentrates include the measurement ofcontinuously create new value. Based on this, the Sumitomo Corporation

radiation exposure of all those e ntering and leaving the plant, and the management

Group formulated the Declaration of Iki-iki Waku-waku Health andProductivity Management. The Group implements various efforts based on

and monitoring of cumulative radiation doses in employees(※2). Furthermore, theuranium concentrates and various kinds of nuclear fuels we deal in are all used forthis declaration and by taking into account the actual situation of each groupcompany. We will continue to promote health management with a focus onpeaceful purposes such as power generation. Our relevant activities comply withsecurity trade control-related laws and regulations.

three aspects: “improvement of health literacy” to enable employees tocontinue working in good health, “reassurance in emergencies” to be wellprepared for unexpected illness, and “global medical support,” which is
unique to integrated trading companies.
Declaration of Iki-iki Waku-waku Health and Productivity Management(※1)Products manufactured in the said business are natural uranium concentrates, and waste materials
produced in mines and refining plants are limited to a small amount of low-level (naturally occurring) radioactive
waste derived from the refining process. Such waste materials are appropriately treated in accordance with IAEA
standards and Kazakhstan’s laws. Furthermore, no high-level radioactive waste or medium-level radioactive
waste has been produced in the business for the three years from 2016 to 2018. 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 suchstandard. Further, no external radiation leaks have occurred in the three years from FY2016 to FY2018.

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 new value.
Our Group’s Corporate Mission is: “To achieve prosperity and realize dreams through sound business activities.” In order tofulfill this mission, it is necessary for all employees to perform at their 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” thatallows employees to work with energy, excitement, and good health, and creates value by further enhancing existingmeasures for maintaining and promoting employee health.

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Work Health and Safety/Health and Productivity Management
Systems
Health Management Promotion Systems

Employee Engagement: Health and Safety Committee

Health management is carried out through the following system to maintainand enhance the health of employees under the direction of the manager ofthe Employee Relations & Compensation who serves as the Safety and HealthManager.

Sumitomo Corporation holds a monthly health and safety committee meeting, which is
attended by labor union officials on behalf of employees, to receive reports on worksite
patrols by an industrial physician and discuss health promotion for employees and better
work environments. A roundtable conference on work styles is also held twice a year bymanagement and the union, where participants exchange opinions with a view toimproving work styles qualitatively and quantitatively in terms of working hours for union
members.

Employees

Sumitomo Corporation seeks to enable all employees to generate
new value while working in good health.

Declaration of Iki-iki Waku-waku Health andProductivity Management
1. Improve health literacy

2. Reassurance in emergencies

Implementation
System

3. Global medical support

Employee Relations & Compensation
Dept. Manager (Safety and HealthManager)

Employee Relations &Compensation Dept.

Safety and HealthCommittee (meets monthly)

Corporate Health
Insurance Society

Sumitomo Corporation has 22 offices in Japan and 114 offices overseas (in 81 countries
and regions) (as of March 31, 2020). On a consolidated basis, the Company employsaround 73,000 workers around the world. In order to prepare for the incidents, accidents
and disasters that will inevitably continue to occur within and outside Japan, each
employee needs to be aware of crises and proper safety measures on a day-to-day basis.
Meanwhile, each organization also needs to develop infrastructure for safety measures toprepare for an emergency. Also, in the event of an emergency, we need to understandthe situation with speed as it is critical to build a support system and promptly resume
business operations.
We have therefore centralized reports on all emergency cases, within and outside Japan,
within the Safety Promotion Division and ensure speedy reporting to the president by
appointing the executive in charge of human resources, general affairs and legal affairs
as its general manager. This system also enables provision of necessary support in atimely and unified manner. Seminars on overseas safety measures are held each year,
and in FY2019, a total of 505 persons attended them.

Excellent Health and Productivity Management Enterprise

Labor Union

Industrial Physician

Sumitomo Corporation’s efforts relating to employee health have been recognized, andthe company was certified as a member of the White 500 category by the Ministry of
Economy, Trade and Industry and the Nippon Kenko Kaigi for the fourth consecutive year.

Clinic (internal medicine
and dentistry)

SCG Counseling Center

Crisis Management System

Consultations

Exams &
Consultations
Officers & Employees(Duty to Maintain Health)

Use

Koriton Massage Room

Recognized as an excellent health and productivity management enterprise in the White 500
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Work Health and Safety/Health and Productivity Management
Systems
Reporting of Work-related Accidents

OHSAS 18001-certified Facilities

We take measures to prevent work-rel ated accidents. If an accident

Consolidated sub sidiaries that have already obtained OHSAS 18001 ar e

occurs, it must be immediately reported to the Employee Relation s &transitioning to the standard ISO 45001, which was issued in March 2018.

Compensation Departmen t. The numbers of work-rel ated

accidents

reported in Sumitomo Corporation alone are as follows:

As of

Number of work-related accidents
FY2016FY2017FY2018FY20193 accidents

1 accident

2 accidents

1 accident

3 accidents

occurs at Sumitomo Corporation or any of its affiliated companies despite
our prevention efforts, it must be immediatel y reported to the Safety
ledbyfollowing 4 of 372 Sumitomo Corporation

Edgen Murray (Middle East, Asia Pacific)

No fatal accidents were reported. If a work-related accident or disaster

Division2020,

certification.

FY2015

Promotion

Decemberconsolidated companies, or 1.1%, have b een c ertified to OHSAS 1800 1

Representative

Director/Executive

Vice

FUJIWA MACHINERY INDUSTRY (HUBEI) CO., LTD.
Infinite Energy Holdings Pty Ltd.
Minera San Cristóbal S.A.

President as Director. Manag ers of major departments of the Corporate
Group serve as members of the Safety Promotion Division. At the end of
every month, they are required to submit a monthly report to the
Man ager of the Planning & Coordination Department of each Bu siness Unit
(Executive Officers, Directors) to keep executi ves informed of the current
situation.

Measurestoaddress

work-related

accidents,

such

as

investigations and responses to relevan t issu es, and prevent them fromrecurring are taken appropriately. Important issu es are determined by the
Safety Measures Implemen tation Headquarters and particularly importantones ar e reported to the Man agemen t Council by the Headqu arters'
Director (Director, Managing Executive Officer) to discuss and decide
upon.

55

Sustainability of
Sumitomo
Corporation GroupFeatureEnvironment

SocialGovernance

ESG Quantitative
Data

Third-party
Assessment

Work Health and Safety/Health and Productivity Management
Activities: Employee Health Management
ClinicSubsidies for Costs of Health Checkups and Complete PhysicalExamination

Sumitomo Corporation has set up an in-house clinic (internal medicine anddentistry) to support employees’ health management on a day-to-day basis. Theinternal medicine department is open five days a week for outpatients, withspecialists in lifestyle diseases such as diabetes and hyperlipidemia, infectious
diseases, and the liver, kidney and respiratory organs. The department also
provides employees at high risk of developing lifestyle diseases with ongoingsupport, including nutrition counseling by registered dietitians and collaboration
between specialists in diabetes and nurses, as well as regular blood tests. At thedentistry department, checkups are provided twice a year in addition to regulartreatment. Dental and oral hygiene education is also offered on an individual
basis as needed.

The in-house clinic provides services such as periodic health checkups (for thoseunder 35), health checkup immediately after joining the company, and healthcheckup 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. The percentageof those who received a periodic health checkup, including complete physicalexamination at an external medical facility, in FY2018 was 100%. Based on resultsof a periodic health checkup and complete physical examination at an external
medical facility, the internal clinic provides detailed follow-up care, and thecorporate health insurance society provides specific health guidance. These services
help employees prevent disease and detect disease at an early stage.

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 and theirdependents.

Health Results Indicators
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. We havereceived many favorable comments, such as "It's very convenient to keep ingood shape in a break from working" and "The efficiency of my work after
massage was improved." A total number of users in FY2019 exceeded 2,800.

Indicator

TargetPercentage of
Keep 100% every
Employees Undergoingyear
Health Checkups
90% by the fiscal
Stress check
year ending
Implementation rate
March 2021
10% by the fiscal
Smoking rate
year ending
March 2021
Rate of female
15% by the fiscal
employees under 35
year ending
years old who undergo
March 2022
gynecological exams

FY2015FY2016FY2017FY2018FY2019

97.9%

98.7%

100%

100%

‐

‐

92.2%

90.2%

88.1%

88.5%

-

-

-

‐

18.0%

-

-

-

‐

4.6%

56

Sustainability of
Sumitomo
Corporation GroupFeatureEnvironment

SocialGovernance

ESG Quantitative
Data

Third-party
Assessment

Work Health and Safety/Health and Productivity Management
Activities: Declaration of Health and Productivity Management (1): Improve Health Literacy
Employee Health Awareness Survey Conducted

Expansion of Health Management Seminars

After the Declaration of Iki-iki Waku-waku Health and Productivity Management

The health awareness survey starkly revealed that a decline in productivity as a

was announced in October 2018, a health awareness survey was conducted in
February 2019 to measure the effects of performing health management and toresult of mental disorders, poor sleep, and general malaise or fatigue is a particular
problem. Seminars are held to eliminate these causes. Seminars on six topics were

measure presenteeism. The survey covered all employees and the response rate
was 78%. The survey starkly revealed that a decline in productivity as a result ofheld through October 2019. These seminars will continue to be held to raise
employee health literacy.

mental disorders, poor sleep, and general malaise or fatigue is a particular
problem. Countermeasures to eliminate these causes including health seminars
are being implemented. The s urvey will be conducted periodically in the future toverify the effects of health management.

List of Seminars Conducted
Seminar Title

Number ofparticipants（※）A condition where an employee reports to work but experiences a decline in the work
performance that should be demonstrated as a result of some physical or psychologicalproblem.

January 2018

Stretching Seminar

147

March 2019

Women’s Health Seminar

34

Health Guidance for Younger Employee s by Public Health Nurses
Expanded

May 2019

Smoking Cessation Seminar

5

July 2019

Eyestrain Seminar

95

August 2019

Acidophilus Seminar

67

October 2019

Sleep Improvement Seminar

94

Health guidance is provided by a public health nurse from the clinic to younger
officers and employees (under 35 years old) who have shown deterioration ofhealth data or physical changes since joining the Company or in conjunction withchanges in their living environments. A program is being created so that presymptomatic personnel at high risk of developing lifestyle diseases can
independently change their lifestyles through discussions with a public healthnurse.

Health Guidance Process
InitialInterview(Goal Setting)

Healthy Lunches Offere d at Tokyo Head office Building Employee
Cafeteria
The employee cafeteria began offering healthy lunches in July 2019. The specific

Observation
Over Time

Continuous
Over Time

Final
Interview(1st month)(2nd month)(3rd month)meal compositions and value settings were supervised by a clinic nutritionist basedon the Smart Meal* standards. In September 2019, the company received threestar Healthy Meal and Food Environment certification, the highest level, as abusiness enterprise the provides healthy meals (smart meals).

57Sustainability of
Sumitomo
Corporation GroupFeatureEnvironment

SocialGovernance

ESG Quantitative
Data

Third-party
Assessment

Work Health and Safety/Health and Productivity Management
Activities: Management Declaration (2): Reassurance in Emergencies
Mental Healthcare

SCG Counseling Center

We provide training on mental health several times a year, including self-care
education and training for managers. Through these comprehensive programstaught by external instructors, trainees are able to comprehensively learn key
points about their own mental healthcare and that of others . About 450
employees (including those from Group companies), mainly young employees
and managers, take this training in the form of 10 sessions per year. We havealso set up a counseling center “for everything, with confidentiality totallyprotected,” which is used by a total of over 1,200 employees annually. In
addition, we conduct an annual stress checkup, which is extended to employees
working overseas. The health consultation office within the in-house clinic, also
covering mental health, is also available to employees working abroad. To
prevent the progression of mental illness and help employees return to work, thein-house clinic also has a specialist in psychosomatic medicine available threedays a week.

The Sumitomo Corporation Group is an organization that supports its employees sothey can work with enthusiasm, and provides the SCG Counseling Center in the
Harumi Triton Square, where Sumitomo Corporation's Head Office is located. Thiscenter is staffed with multiple counselors to help solve various problems andconcerns. Since its establishment in April 2005, co nfidentiality has been well
protected, and employees have become used to cons ulting staff about any problems
at this center with ease of mind. (Approximately 1,200 cons ultation inquiries are
made annually.)
Service provider

External contracting
company

Eligible users

Activities

Counseling by visiting theemployee's site

Qualified counselors provide
counseling to employees inJapan and overseas.
Qualifications of the counselors
Employees outside of Tokyo include senior industrial
including overseas
counselors, clinicalpsychotherapists, career
consultants, and family
consultants.

Various seminars

All employees

Implementing seminars for
managers, general employees,
employees overseas, andemployees' families

Consultation

Management

Counseling in person

All employees

Consultation for managers
regarding how to respond totheir subordinates
Contracting external companies
to provide counseling in person,by e-mail, phone, and visiting
the employee's site.

Counseling by phone

Expanded Measures Supporting Women’s Health
Since the incidence and death rates of breast cancer and uterine cancer havebeen increasing among younger women in recent years, and we started
providing information on a gynecological exam subsidy program during periodic
health checkups. In conjunction with Pink Ribbon month, in October 2019 we
distributed information on health issues unique to women to all domestic female
employees. Other informational measures include setting up a Woman’s page on
the intranet health management site to provide information on women’s health.

Services

SCG Counseling Center Counseling in personCounseling by phone, byvisiting the employee's site

Mainly for employees inTokyo
All employees

Measures Against Smoking
On the occasion of the relocation of the Head Office in September 2018, we
designated office floors of the Head Office as non-smoking areas. We have also
taken measures against smoking, including a subsidy to those who want to quit
smoking to buy antismoking gums and an anti-smoking support programprovided by the clinic.

58

Sustainability of
Sumitomo
Corporation GroupFeatureEnvironment

SocialGovernance

ESG Quantitative
Data

Third-party
Assessment

Work Health and Safety/Health and Productivity Management
Activities: Health Management Declaration (3): Global Medical Support
Advanced Healthcare Expense Program Introduced

Health Support Services to Employees Stationed Overseas

An advanced healthcare expense program (the “Program”) was introduced in
October to cover conditions that give rise to substantial economic burdens as aresult of treatment not covered by insurance. The Program was introduced as apart of efforts to provide “reassurance during emergencies,” of the three pillars of
the health management declaration, so that employees can feel reassured even if
they become ill. The program is not limited to specific conditions such as cancer,
but also covers advanced medical treatment* and treatment not approved asadvanced medical treatment (treatment requested by the patient). By broadly
covering treatment not covered by health insurance, the program is intended tosupport employees who become ill receive treatment with reassurance andreturn to work at the earliest possible time or continue working while receiving
treatment.

Sumitomo Corporation has its offices in 66 countries. A total of about 1,150
employees are stationed around the world along with about 1,160 family membersof theirs. We provide these expatriates working in an environment different fromJapan with health care services to maintain their health, such as an annual healthcheckup. Counseling services provided by a clinic and the SCG Counseling Center
are also available for those with mental and physical disorders. We have a contract
with Emergency Medical Assistance Services, which cover a wide range of support
services from health counseling offered by an external doctor, public health nurse
and other healthcare professionals to emergency transfers. We provide information
on necessary vaccinations, local safety conditions, how to prevent infectious
disease and other important issues to employees before overseas business trip andtransfer and their family members.

Hospital(1) Medical
expenses

Employee(3) Payment ofbenefits(2) Request

Employee
Relations &Compensation
Department

All officers andemployees are covered* Advanced medical treatment refers to cutting-edge and advanced treatment
methods that have been determined by the Ministry of Health, Labour andWelfare to be effective and safe and are under consideration for coverage by
health insurance. Treatments are currently limited to 88 types. Patient
requested treatment is a program whereby healthcare institutions can use
unapproved medications and so on at the request of the patient.

Measures Against Global Health Problems
Currently, many countries around the world are struggling with serious healthissues, including HIV (AIDS), tuberculosis and malaria. The Sumitomo Corporation
Group is determined to take active measures against these global health problems.
In order to ensure that officers and employees of our Group have accurate
information about and protect themselves from these infectious diseases, theCompany provides health checkups in advance for officers and employees who areassigned overseas and, when necessary, encourages them to be vaccinatedagainst infectious diseases. We also provide a variety of training before theirassignments. Moreover, we started organizing e-learning and seminars on safetymeasures in FY2017 in response to requests by employees about to go on theirfirst overseas business trip as well as 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 makethese programs available to officers and employees not only of Sumitomo
Corporation but also of the entire Group within and outside Japan. Through these
activities, we support employees’ health and safety while they are overseas.

59

Sustainability of
Sumitomo
Corporation GroupFeatureEnvironment

SocialESG Quantitative
Data

Governance

Third-party
Assessment

Work Health and Safety/Health and Productivity Management
Activities
Education on Crisis Management
Sumitomo C orporation provides a seriesof seminars on sa fety meas ures in orderto encourage ea ch em ployee to become
more a ware of crises and to learn how toensure their o wn sa fety. We o rganize
over 90 seminars a year, dividing the
programs into 4 gra des and 6 co urses
according to the participants’ experienceand learning levels.
Also, ea ch office has prepared its o wn
manual on safety meas ures , which isshared with the Sa fety Promotion
Division, in order to ensure a prom pt andeffective
initialres ponsewhenacontingency occurs . We have built asystem to provide prompt a nd effective
relief and support thro ugh cooperation
within a nd outside the co untry in timesof emergency.
We also develop safety net systems as
part o f our re gular pra ctice. For example,
we have a system t hat o btains real-time
information o n troubles around the world(e.g., te rrorism , major accidents , severe
weather, nat ural disasters , etc.) andforwa rds it to employees who are
working o n as signment in or taking abusiness trip to various places. A notherexample is a system to provide s upport
when emergency medical care is needed.

Business description

Business description

Measures Taken in Logging of Raw WoodPT FUMAKILLA INDONESIA

The incidence of occupational a ccidents in the forestry industry
is higher than tho se in other indust ries. The ratio o f se rious
accidents , including deaths, is also very high. To cope with thissituation, we com ply with t he international safety mana gement
standards required for Fo rest Ste wards hip Council (FSC )certification by OAO Terneyles in R ussia in which we inve st. If
we receive instructions as a result of a n audit for the renewal o f
the certificate, we take improvement measures immediately.
We have t hus been certified conse cutively since 2004. We havealso implemented va rious measures to prevent occupational
accidents . Our e fforts to reduce occupational safety and healthrelated risks include: inclusion of sa fety management rules into
the internal regulations; inclusio n o f safety -related items in a job
description co ntract with a n employee; esta blishment of the
Safety Ma nagement Department ; a nd onsite inspection by the
Safety Mana gement Depa rtment at plants a nd work sites of thecompany.
When the Sa fety Manageme nt Depa rtment determines it
necessary to make improveme nts, each onsite manage r isrequired to develop an improvement plan and report it to thepresident. After completing the improvement, the ma nager also
must re port its res ult. The Safety Ma nagement Department isrequired to make a list of o ccupational accide nts that haveoccurred in t he last mont h ba sed on report s provided by eachsite and report it to the preside nt. If necessa ry, t he depa rtment
develops an improveme nt plan a nd give ea ch site a n instruction
to implement improvement measures.

Under the slogan of “protecting people's lives,ˮ
Fumakilla Limited entered the Indonesian market
where prote ction o f people from infectio ns is amajor co ncern in their living e nvironment . Overthe last 30 yea rs, the com pany has made slow
but steady efforts in spreading its m osquito
repellent coils with high medical effects in every
corner of the region. As a result, it ha s now thelargest sha re in the Indo nesian m arket,
contributing
tot heIndonesianm arket,contributing t o addres sing one of the ma jor local
social issues. In terms o f so cial contribution, notonly the product perfo rmance but also themarketing metho d a pplied t here (a businessmodel called BOP to deliver products dire ctly togeneral use rs in emerging co untries) aresignificant . Since its foundation in 1990, we havebeen continuing our investment (current share of20%). O ur
employees
assigned
there also
support the
local
operation o fFumakilla.
Mosquito repellent coil of Fumakilla

60

Sustainability of
Sumitomo
Corporation GroupFeatureEnvironment

SocialESG Quantitative
Data

Governance

Third-party
Assessment

Work Health and Safety/Health and Productivity Management
Activities
Business description
Stable Supply of Tubular Products Based on Strict HSSE Management
As one of the major s uppliers of pipes for the Oil &Gas industry, Tubular Products Division is engaged
in diverse pipe supplying activities around theworld. At Tubular Products Division, Health, Safety,
Security and Environment is more than just apriority, it is a core value. We promote a culturethat drives exemplary behavior, incorporating
HSSE as part of o ur everyday lives. To achieve this,we have developed a robust management system,
fully supported by strong leadership engagement,
disseminated throughout all our operations. At theoutset of o ur HSSE journey and to improve our
performance by way o f reducing our occupational
Health, Safety, Security and Environmental
accidents the company introduced the "ZeroHarm" initiative. Since 2014 we have establishedand spread HSSE as our corporate culture underthe “Beyond Zero Harm” framework, focusing on
continual improvement and recognizing HSSE is
not a process in its own right, but an outcome ofbusinessdecisions,strategy,
cultureandperformance.
We developed an HSSE management system thatapplies to all global activities based on continuous
improvement through the PDCA cycle. We also
assigned staff specializing in OHSAS 18001 andISO 45001 to major overseas offices andestablished a global HSSE network connecting all
five regions in the world. Through these efforts,

we are enhancing HSSE management taking into
account regional business activities.
The General Manager of the Tubular Products
Division demonstrates strong leadership andcommitment by publicizing an annual HSSE Policy
and Objectives, these are compatible with thestrategic direction of the organization. The policy
places emphasis on our commitment to ensuring
HSSE as a core value for all, from managers andemployees to customers, contractors and suppliers.
The most impactful HSSE management program is
one that equips any employee to quickly accessthe information they need and report any issue.
Whether that information is reporting an incident,
accessing a training record, or reviewing theresults of a safety audit. Tubular Products are now
leveraging advancements in HSSE management
software, as well as mobile solutions, to improve
the timeliness and consistency of reporting
ensuring better efficiency and greater compliance.
Through continued consultation and stakeholder
engagement we strive to enhance and further
strengthen our HSSE management system to go"Beyond Zero Harm". Simultaneously we will workwith our Supply Chain, Subsidiaries and Partners
to meet and exceed our customers’ expectations
and fulfil our social mission as the top supplierthrough stable supply of tubular products.

HSSE Management System PDCA Cycle

61

Sustainability of
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Corporation GroupFeatureEnvironment

SocialGovernance

ESG Quantitative
Data

Third-party
Assessment

Human Resources Management
Policy and Concept
Basic Policy on Human Resources Management

Relations with Employees (Labor Union)

The Sumitomo Corporation Group is addressing human rights
issues. While complying with laws and regulations in ourcountries of operation, we support and respect the Ten
Principles of the UN Global Compact, as well as theInternational Labour Organization’s core labor standards ofeight conventions in four areas: freedom of association andthe effective recognition of the right to collective bargaining,elimination of all forms of forced or compulsory labor,
effective abolition of child labor, and elimination of
discrimination in employment and occupation. With regard to
the elimination of discrimination in particular, we have clearlystated that no person should be discriminated against due tohuman race, nationality, gender, religion, creed, age, origin,physical or mental disability, or other reasons that are notrelated to business operations. We are also complying withminimum wage requirements based on the labor standards
and labor conventions of each country.

Based on the collective agreement with the Sumitomo Corporation Labor Union, Sumitomo Corporation
provides its employees with explanations of its management policy and the status of its business, as well
as opportunities to discuss wages, labor conditions, personnel affairs, safety and health, and employee
benefits on a regular basis. The agreement defines that the company must maintain and improve
employment conditions and ensure stable lives for employees, and the labor union must keep order anddiscipline at work and make an effort to increase labor efficiency, and both parties must cooperate witheach other in developing the company‘s business. To achieve this objective, we make every effort to haveserious and sufficient 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, such as informal meetings with the president,
round-table discussions on business performance and related issues, personnel systems, and work styles,
and work style improvement seminars and town hall meetings with the president organized jointly withthe labor union. Sumitomo Corporation adopts a union shop system in which all employees are required
to participate, excluding executives above a certain level and employees classified as non-union members
based on an individual agreement taking into account the nature of their jobs. As of March 2020, thenumber of members of the Sumitomo Corporation Labor Union is 3,038, accounting for 59.0% of all
employees of Sumitomo Corporation.

Freedom of
association and theeffective recognitionof the right tocollective bargaining

Freedom of Association and Protection of
the Right to Organise Convention (No. 87)
Right to Organise and Collective Bargaining
Convention (No. 98)

Elimination of all
forms of forced orcompulsory labor

Forced Labour Convention (No. 29)
Abolition of Forced Labour Convention(No. 105)

Effective abolition ofchild labor

Minimum Age Convention (No. 138)
Worst Forms of Child Labour Convention(No. 182)

Elimination of
discrimination in
employment andoccupation

Equal Remuneration Convention (No. 100)Discrimination (Employment andOccupation)
Convention (No. 111)

Activities
Employee Awareness Survey Results
The Sumitomo Corporation Employee Awareness Survey conducted in 2019 determined that items
indicating a high level of satisfaction with the company remained at high levels and that engagement
remains high.
5th Survey(FY2016)

6th Survey(FY2019)

Comparison to Previous
SurveyFeeling of satisfaction with thecompany

3.9

3.9

±0

Work-life management (levelof satisfaction & practice)

3.3

3.4

+0.1

* Subjects: All employees (excluding employees on leave, etc.)* Respondents selected the response that they believe most closely applies on a five-point scale (five is the highest
score).

62

Sustainability of
Sumitomo
Corporation GroupFeatureEnvironment

SocialGovernance

ESG Quantitative
Data

Third-party
Assessment

Human Resources Management: Human Resource Recruiting
Policy and Concept
Basic Policy on Hiring
As a company that enga ges in global business , Sumitomo Corporation re quires
human resources who ca n work effectively in the global are na and are highly
motivated. Conseque ntly, our basic policy is to co nduct fair recruitment that
respects fundamental human rights, and hires employees base d solely on theaptitude and abilities of applicants regardless o f nationality, gender, disabilities,
race, region or sexual orientation.
In addition to hiring new gra duates we consider mid-career hiring as anintegral part of strategic recruitment, a nd we continue to hire talented
employees throughout the year.

Activities
Basic Measures Relating to Hiring: Internships
The compa ny hold various seminars relating to hiring and creates numero us
opportunities to support career development by students.
The compa ny hold various seminars relating to hiring and creates numero us
opportunities to support career development by students.

■ Next Leaders’ CampWe o ffer “Next Leaders’ Camp”, a career support project by Sumitomo
Corporation. With t he aim of e ngaging in true career development that goesbeyond just recruiting a ctivities, we hope to help resolve the do ubts andconcerns that student s may have whe n co nsidering their careers, and to help
them think their o wn careers . Therefo re we have designated t his a Career
Support Pro ject, rather than a n internship. In the “Busines s” se ction,
participants deepened t heir understanding o f the roles of busines s a nd thevalues of busines s to be demo nstrated, through t he lectures on the meaning ofbusiness a nd industry comparison, a nd business analysis work using our casestudies. One participating student commented, “I was able to notice importantvalues when thinking about my own career”<Number of Past Participants>
FY2017: 847 / FY2018: 794 / FY2019: 591■ Internships for University and Graduate Students
We offer interns hips to university and graduate st udents every year in o rder forthem to experience busines s of a n integrated trading company . In F Y2019, we
conducte d a program on the s ubject of new business planning focusing on
telecommunication business in Myanmar dealt by Sumitomo Corporation.
We intro duce “design thinking” a s o ne of the ways o f thinking to avoid beingcaught up in the existing framewo rk so that they ca n make their original ideas
commercialized under new ideas. Furt hermore , we ask them to create businessplanning from t he view point o f o ur Material issues . Through this program we
expect them to have a deep understanding of our new value creation process.
<Number of Past Participants>
FY2017: 74 / FY2018: 87 / FY2019: 190

Recruitment of Mid-career Human Resources
The business enviro nment surrounding us is changing rapidly. In order tosurvive the com petition in this age o f treme ndous changes , we need to takeon t he challenge of doing busines s i n new fields while expanding andadvancing our existing businesses . To this end, we recruit mid-career workers
who have great expertise and knowledge from o utside the compa ny, in
addition to making effective use of our in-house human resources. Our midcareer hires have differe nt backgrounds a nd include lawyers, public
accountants and tho se with ot her qualifications as well as those who haveexperience in the manufacturing, financial, media, IT a nd other industries.
They are making use o f the expertise they have gaine d in their respective
fields fo r the bene fit of o ur compa ny. Sumitomo Corporation recruits midcareer workers not only for their expertise, however. We expect these
employees who have diverse ba ckgrounds , to revitalize the company with
their ways of t hinking, work methods, o ut-o f-box ideas and different
viewpoints and help us enhance our competitive strengt h. Sumitomo
Corporation will continue to fo ster mid-career recruitment along with theemployment of new graduates for the retention of a diverse workforce.

63Sustainability of
Sumitomo
Corporation GroupFeatureEnvironment

SocialGovernance

ESG Quantitative
Data

Third-party
Assessment

Human Resources Management: Human Resources Development
Policy and Concept

Activities
Our Personnel Development Programs

For the Sumitomo Corporation Group, human resources are the most important managerial
resource. Based on its understanding and implementation of the Management Principles andActivity Guidelines, the Sumitomo Corporation Group is committed to contributing to society
across a broad range of areas by leveraging its diverse workforce of people from all walks oflife who are constantly creating new value on a medium- to long-term basis. To meet thiscommitment, the Group is striving to enhance the abilities of individual employees and speed
up human resource development while fostering strategic and planned employment as wellas the development and empowerment of its workforce as whole. For the development of its
human resources, the Sumitomo Corporation Group traditionally provides both OJT and OFFJT. OFF-JT supplements OJT, which forms the foundation of the Group’s human resource
development. In OFF-JT programs, participants look back on their job successes and failures,
generalize/ conceptualize their experiences, and acquire the skills and knowledge required fortheir jobs in preparation for taking on more difficult tasks.

As Sumisho Business College (SBC), we organize 330 courses of OFF-JT training ayear and offer programs that cover the knowledge and skills necessary for business.
In particular, we are focusing on training programs that will contribute toenhancing the abilities of individuals such as change and creativity, logical thinking,execution / realization capability.
We also offer Long-Term Programs for Selected Employees that allows 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
associated companies in Japan and abroad. In our efforts to enhance thedevelopment of human resources, we make effective use o f external training
programs, such as overseas executive programs, in addition to in-house training
programs.
We also constantly conduct a study tour to visit Besshi Copper Mine where thebusiness of the Sumitomo Corporation Group started to give employees anopportunity to feel Sumitomo’s Business Philosophy, which is the source o f theGroup‘s Management Principles. Since FY2017, we have increased the frequency ofthe program and expanded the eligibility requirements to further instill the
Sumitomo Business Philosophy.

Senior Management Initiative
training(＊)

Basic Concept

Number of Hours for Ability
Development Training in FY2019
Total numberof training
participants

14,963 employees

Total numberof training
hours

65,652 hours

Number oftraining hours
per employee

12.7 hours（＊）Training for senior management to discuss ideal decision-making and behavior from a high perspective

64

Sustainability of
Sumitomo
Corporation GroupFeatureEnvironment

SocialGovernance

ESG Quantitative
Data

Third-party
Assessment

Human Resources Management: Human Resources Development
Human Resources Development Programs
1. Level-Specific Programs
Level-Specific Programs are designed to help
employees develop leadership mindsets and the skills
needed for each levels, with the aim of systematic
leadership development. From new employee to senior
management, Participants in the training will
understand what is expected of them and what roles
they should fulfill, thereby acquiring tips on how totransform themselves. We hold Level-Specific
Programs for the entire Sumitomo Corporation Group.
Through the program participation, they build a rich
network within the Sumitomo Corporation Group. In
these programs, emphasis is placed on fostering
leadership that can contribute to society throughbusiness, and programs that enable participants togain awareness for independent personal growth areprovided.

3. Long-Term Programs for Selected Employees
Participants in the programs will work to establish their own management philosophy and acquire skills to foster
self-directed learning and practical leadership, which are difficult to develop under short-term programs.
Participants in the programs are selected from among those who are demonstrating their abilities at the forefrontof business and those who are expected to take on leadership roles in the future. Programs that hone theleadership skills for contributing to society through business are provided. Also, in some of the programs, lecturers
and participants will engage in two-way discussions so that participants can gain a broader perspective onorganizations, the entire company, and society as a whole.
 Leadership Cultivation Program Sumitomo Executive Management Program

Approximately 30 employees participate in this program each year,
during which they review their own leadership style and conduct
with a focus on acquisition of an independent attitude. Participants
are young managers who will become the next generation of teamleaders (department managers). Over the course of six months,
they attend 10 lectures on management skills for drawing out the
motivation and potential of subordinates and maximizingorganizational productivity.

Targeting team leader (department managers) who have the potential to
become executive managers in the future, this program provides theknowledge and skills needed by executives and fosters managerial
perspectives and philosophy to create executive management humanresources who can contribute to society through business. Approximately
30 employees participate each year, attending 30 sessions over about 10
months. At the conclusion of the program, participants give a presentation
to executives on their own managerial vision.

2. Elective ProgramsMore than 70 different selective programs are available,
covering comprehensive knowledge and skills, frombasic to advanced levels, that will be needed to play aleading role as an executive who can contribute tosociety through business.
After completing theIntroductory Seminars and the Basic Seminars where
employees can acquire the basic skills and generalknowledge (standard skills and knowledge) required towork for an integrated trading company, employees
can choose any of the programs where they can learn
about knowledge and skills required for them to dotheir work. In addition, "SC MBA" is prepared toacquire management literacy. It is designed to provide
them with basic theories and frameworks that theyneed to understand, regardless of their present
department or job details.

O v er seas tr ain ing at I MD

As part of the Executive Management Program, acustomized program is implemented in Lausanne,
Switzerland in collaboration with IMD, an overseas
business school, to enable participants to acquire
knowledge and skills are global executive managers.

 Workshop with General Managers of Business Units
This workshop targets general manager and assistant generalmanager class personnel who are expected to hold executive
positions in the future and seek companywide managerial
perspectives. Participants acquire the broad perspectives, thinking,and attitudes required of management by participating in extensive
dialogues and discussions with senior management, Each year, about
30 employees participate, attending eight sessions over four months
and giving a companywide presentation on the future of thecompany.

 Participation in Domestic and Overseas
Programs at the Company’s Expense

Executive

Department and division managers who are potential candidates for
executive management positions in their respective organizations are sent
to executive programs at domestic and overseas business schools at thecompany’s expense.
At least 30 employees participate in the domestic program with a focus on
business schools in Japan, and for the overseas program, at least 30
employees are sent to leading overseas business schools with theobjectives of fostering awareness and thinking as a future executive,
acquiring comprehensive management knowledge and executive decisionmaking capabilities, and growing through interactions with otherpersonnel and executives.

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Human Resources Management: Human Resources Development
Human Resources Development Programs
4. Overseas Dispatch Programs
As a global business group, the Sumitomo
Corporation Group also conducts many overseas
dispatch programs to develop employees who canwork effectively around the world.
Sumitomo Corporation has various training programs
that enable young employees to work overseas
including a trainee program that fosters future
employees who will be sent on overseas assignment,a language training program that develops language
and area specialists, a global intern program that
focuses on business in emerging countries, and astudy abroad program primarily for acquisition of anMBA. Each year, 80 to 100 young employees aredispatched to different regions of the world to work.
The study abroad program in particular sends a small
number of employees each year to the world’s top20 class business school MBA programs and law
schools so we can continuously develop employeeswith advanced specialized knowledge, skills, andpersonal networks.
Number of Students Dispatched

Activities
5. In-house Education and Awarenessraising on Respect for Human Rights
As a global organization contributing broadly to society,
the Sumitomo Corporation Group employs Management
Principles that place prime importance on integrity andsound management with utmost respect for the individual.
Based on this principle, the Group developed the CSR
Action Guidelines for Supply Chain Management that take
into consideration human rights and various other issues.
The first provision of the guidelines is to “respect humanrights and not to be complicit in human rights abuses.”
With the above considered, we have established acommittee to promote human rights and Dowa issues, andwe have a forum to discuss internal issues on humanrights such as Dowa issues, Buraku discrimination, people
with disabilities, foreign residents and other issues related
to human rights every year. We also invite experts fromoutside the company to conduct annual human rights
training to raise employee awareness of human rights
issues. In addition, since FY2015, we have held practicalworkshops on methods for assessing risks of human rights
violations in supply chains. In addition, training seminars
on mental health and human resources management arealso available, and recently, training on sexual and power
harassment has been conducted for all managers. In
Level-Specific Programs for managers, programs on
harassment have also been added to maintain aharassment-free work environment and to provide
suggestions on how to address harassment if it occurs.
Through these efforts, we constantly provide employeeswith correct education and raise their awareness toprevent human rights violations at work.

Sumitomo Corporation Global HRD Center

A training center to develop global talent as well as to be
used as a strategic multipurpose facility

The Sumitomo Corporation Global HRD Center inGinza, Tokyo serves as a training center to develop
global talent as well as a strategic multipurpose
facility. As a training center, it is used to further
strengthen the development of a global and diverse
talent. It also has a versatile multipurpose space,which is used for Head Office functions. International
colleagues from different organizations and countries
all over the world meet at this facility for intensive
discussions on the future visions and strategies of theSumitomo Corporation Group.

Career Adviser
Since April 2007, career advisors (CA) have been
available at each organization with the aim of
improving

employees'

careerdevelopmentandreinforcing the organization through providing
assistance to individuals and organizations. CAs havethree key roles: provision of support and advice toemployees (both subordinates and supervisors), andprovision of support for communication between
individuals and the organization. Through these roles,
they support the creation of a good work
environment where employees can maximize theirabilities and strength.

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Human Resources Management: Human Resources Development
Activities
Business description

Business description

Human Resource s Development for a Large-scale purchasing project of Construction Machinery
Made in Japan, the First of its Kind in Uganda

Job Training Programs at Toyota Iraq

The Republic of Uganda is a landlocked country in EastCentral Africa. The agricultural population accounts for
80% and its major industry is agriculture, which accounts
for 40% of the GDP and 80% of the export revenues. The
Uganda Government promotes economic growth for the
purpose of addressing social issues, such as poverty
reduction. Its main efforts are concentrated on diversifying
export products, mainly agricultural products, and adding
value to them. Among the government priority policies toachieve this goal, the highest priority is placed on theconstruction and maintenance of local roads that are used
to deliver and sell domestically produced agricultural
products safely and promptly in domestic and international
markets. They have developed plans to purchase
construction machinery and vehicles necessary for road
construction.
In response, based on our wide variety of experience inexport sales business over many decades in Africa, we
proposed a scheme for which a customer-oriented
financing can be used. In September 2015, our company
and the Uganda Ministry of Works & Transport signed acontract for large-scale purchases of about 650
construction machines in various kinds and about 500
vehicles. In April 2017, we started delivering them and, in
May 2018, all the machines were installed as planned.
These machines and vehicles are operated at various
places in Uganda. Construction machines and vehicles thathave been supplied by our company are being used forconstructing road networks as scheduled in Uganda,
leading to enhancing the distribution of agricultural
products domestically and internationally. Our contribution

to supporting the transportation infrastructure of thecountry and to building a platform that promotes economic
development will generate a virtuous circle of growth anddevelopment together with local communities.
It is also essential to train operators of supplied
construction machines and vehicles in order to use themover many years.
In this project in Uganda, we placed emphasis not only ondelivering construction machines and vehicles but also
providing education and instruction on how to operatethem correctly. In cooperation with each manufacturer, wetrained a total of 47 operator trainers and about more than
1,000 operators. In addition to sales of construction
machines and vehicles, we also provide after-delivery
services, in cooperation with each manufacturer, including
parts supply, to ensure continuous operation without
problems. We also provide support programs, including
training of machine operators and trainers who educate
machine operators. Through these efforts, we believe wecan contribute to the development of Uganda.

Training of local operators of supplied machines
The vehicle in the photo is a motor grader used for ground leveling.

Sumitomo Corporation provides job training
programs in Iraq via Toyota Iraq, its consolidated
subsidiary. The objective of these programs is tohelp young internally displaced persons (IDPs) in
Iraq acquire technical skills to ensure their stable
employment opportunities in the future and toform the basis of independent living. In Iraq, theprolonged conflict has had tremendous impacts on
the public. More than three million people havebeen forced to leave their homes. The impact on
young people is particularly significant, andcreationofeducational
andemployment
opportunities is urgently needed. In response,
Toyota Iraq, jointly with the UNDP, implemented
job training programs for IDPs five times. A total of
52 young people have so far completed these
programs. It is the hope of Sumitomo Corporationto achieve the sustainable development of local
society. To fulfill this hope, we will continue tosupport IDPs to improve their living conditions in
Iraq through our business activities.

Trainees receiving training on vehicle maintenance, parts
warehouse management and customer services

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Human Resources Management：Utilization of Human Resources（Allocation）
Activities
Enhancement of Talent Management

Advancing Global Measures to Develop Human Resources

Talent cannot be developed overnight. There is a need to envision, develop anddeploy human resources required for the growth of each business in the mediumto long-term. In order to allocate human resources strategically in line withbusiness strategies continuously and on a global basis, the Sumitomo Corporation
Group implements the measures below to help all employees play an active role,
regardless of whether Sumitomo Corporation non-consolidated, overseas offices
or associated companies.

Aiming to recruit and develop personnel 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 staffs, managers, and senior executives.
Through these training programs, nearly 300 participants each year come from allover the world to the Head Office in Tokyo. The programs establish a sharedsense of the Sumitomo Corporation Group's corporate DNA and strengthen thesense of unity among employees as members of the Group by reaffirming
participants' understanding of Sumitomo’s business philosophy and the Group's
Management Principles.

Definition of Key
PositionsDefinition of Key
Position Criteria

Preparation of
Successor
Development Plan

Development ofManagerial Talent

Human Resources Globally Playing a Leading Role
Sumitomo Corporation Group promotes placing the right person in the rightposition at the right timing on a global basis, regardless of nationality andaffiliation. Based on this policy, locally hired staff and employees of associatedcompanies are transferred beyond the borders of countries and companies. We
positively appoint local staff to executive positions of overseas offices to promote
our policy of placing the right person in the right place on a global basis.
Key positions involving
Group management
needed to executeGroup strategy. Portionin blue shaded area:
General Manager andabove envisioned in thecase of Headquarters.

The abilities required of
key positions are definedfrom three viewpoints,"Experience," "Skill /Knowledge," and"Personal Qualities."

Each key position candidate will beselected not only for the next
generation but also the following
generations to come, and a
successor training plan will then be
put in place. Additionally,
according to circumstances,candidates are periodicallyreplaced.

To enable key position
candidates to acquire thenecessary 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 what kind of human resources we have
and where, we will build a Group human resources
database including overseas human resources.

Introduce the Global Mobility Policy

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

Introduce the Global Grading System

To compare what level of human resources arepresent across the Group, we will consider
introducing a common Groupwide personnel
grading system.

Executives / upper managements inregional offices: 2468

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Human Resources Management：Utilization of Human Resources（Allocation)
Activities
Key Allocation of Human Resources to Drive the Growth Strategy

Succession Plans/Enhancement of Human Resources Database

Amid the Fourth Industrial Revolution, as innovation and Digital
Transformation (DX) lead to constantly emerging new business models,the promotion of our growth strategy requires cross-organizational
collaboration transcending the boundaries of industry and geographical

To continuously realize str ategic HR allocation on a global basi s, HR
development and appointment of managerial tal ents according to ourbusiness strategies, we und ertake succession planning covering th e next
and subsequen t gener ations for key positions (approximately 380

location that are reflected in th e divisional and regional structure ofexisting businesses.
To accelerate this movemen t, we are m aking key allocation of talents toorganizations promoting businesses that tr anscend existing divisions
and frameworks. Such organizations include our Corporate Planning &positions equivalen t to the level of general manager in HQ and above)
including overseas regional offices and group companies. To ensure thatcandidates for key positions are equipped with the n ecessary exp erience,skills, and other requirements, we develop their capabilities accordingly,
so that we can enh ance th e talen t pool both quantitatively and

Coordination Departmen t’s Connect & Innovation Center ( CIC), th e DX
Center responsible for promoting DX companywide, and departments
responsible for business development both in Japan and overseas.
Allocation of talents with varied ranges of experience in promoting newvalue creation will drive powerfully both the Expansion of Businessqualitatively.
In addition, we are working to create a job grading system on a global
basis and a HR database including overseas regional offices and groupcompanies. We h ave al so formulated the Global Mobility Policy as ourgroupwide rule stipulating allowances and ben efits packag es for

Support Functions and Manag ement Base Enh ancem ent to support th e
growth strategy of our Medium-Term Management Plan 2020.

international assignmen t. This will serve as a platform to promote
deployment of talents across countries and regions.

Active Use of Interdivisional Job Rotation
In the current business environment, wher e increasing diversificationand complexity leads to discontinuous change into a n ew dim ension, we
believe th at talents equipped with diverse sets of exp erience i s essenti al.
As one of th e HR str ategi es in th e Medium-Term Man agemen t Plan
2020, we are promoting interdivisional job rotation with the aim ofdeveloping talents as futur e executive candid ates. Going forward, we
will continue to implement interdivisional job rotation to develop talentswith a wider range of experience and perspectives, and thereby exp andthe talent pool of management candidates for coming generations.

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Human Resources Management：Utilization of Human Resources（Diversity & Inclusion）
Policy and Concept
Promotion of Diversity & Inclusion
The busine ss e nvironment s urro unding t he Sumitomo Corpo ration Gro up has
been rapidly changing a nd t he regions and business fields in which we operate
and business models have also been rapidly diversified. In order fo r the Groupto address such cha nges and continue to develop in a s ustainable way in an era
called the fourt h industrial revolution, it is essential to include diversity
promotion in its mana gement strate gy. F urthe rmore, in re sponse to expa nding
overseas ma rkets, it has be come urge ntly neces sary to develop humanresources for ma nagement who ca n take a leade rship role in driving businessgrowth globally.
The basic concept o f huma n re sources st rategy de fined in t he Medium-Term
Manageme nt Plan 2020 is “Diversity & Inclusion: Make diversity a source ofcompetitiveness.” It consists o f four elements : “Expand the strengt h ofindividuals,ˮ “Ca pitalize on t he st rength o f individuals ,ˮ “Encoura ge individuals
to challenges,ˮ and “Value , respect a nd include individual differences.ˮ The lastelement supports the preceding three elements.
To survive this revolutiona ry world whe re busines s is becoming diverse andsophisticated, it is essential to effectively use a mixture o f diverse kinds ofknowledge from diverse huma n resources to improve our competitiveness. In
this co ntext, with a focus on the diversity o f o ur huma n resources on a global
basis, particularly on individuals' stre ngths , we will combine their stre ngths tofurthe r accelerate o ur growt h strategies . What is importa nt here is t he co ncept
of inclusion, o r creating an atmos phere that recognizes different individualities
and res pects a nd accepts the diffe rences . Base d on t his co ncept , we need topractice inclusion a nd make effective use of diffe rences as a so urce ofcompetitiveness.
Simply focusing o n visible diversity, such as gende r, nationality, ra ce, a nd a ge,
is not enough. It is also crucial to reco gnize invisible diversity, differe nt opinions ,thought s, ideas, values , a bilities, skills and experience. Our aim is to unite theorganization thro ugh mana ging invisible diversity and to use differe nces as asource of competitiveness to add value and accelerate growth.

In prom oting the gro wth strategy, we need to involve all the employees of theGroup. To use them effectively, it is necessa ry to take into acco unt invisible
diversity and allocate the right person in t he right place at t he right time on a
global basis a nd provide them with the right t raining. We also re cognize thenecessity o f creating t he right organization a nd nurturing culture a ndawarenes s to support it. To do s o, bot h top-down from t he ma nagement a ndbottom-up are important . O ne o f the bottom-up initiatives is the launch of theDiversity & Inclusion Promotion Pro ject in F Y2017 as an advisory bodyreporting to the president . Executives in charge of huma n res ource s, generalaffairs and legal affairs serve a s project leade rs a nd project members withdifferent backgrounds discuss on-site issues and potential.
Opinions a nd suggestions from membe rs of this pro ject a re reflected on thehuman reso urces strategy in t he Medium-Term Ma nagement Plan 2020. In
cooperation with overseas organizations that have launched similar projects , wewill pursue diversity in the Group on a global basis.

Encourage individuals
to challenges
Expand the strengthof individuals

Capitalize on the strengths
of individuals

Value, Respect, Include
individual differences“Diversity & Inclusion”—Make diversity a source of competitiveness—
Basic Concept of Human Resources Strategy

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Human Resources Management：Utilization of Human Resources（Diversity & Inclusion）
Activities
Encouraging More Active Involvement of Female Employees in Business
Promoting active involvement of female employees in business is one of o ur importantmanagement strategies, and we are supporting these efforts through various measures.
Aware of the support required for achieving a satisfying work-life balance, Sumitomo
Corporation has introduced programs to encourage employees to work vibrantly andpositively following maternity and childcare leave in addition to the systems of support
that exceed requirements under the Child Care and Family Care Leave Law and related
laws. For example, Sumitomo Corporation established the Triton Sukusuku Square inhouse daycare center in 2008 to provide childcare services for Sumitomo Corporation
Group employees, distributed a handbook that supports the achievement of balancing aprofessional career and childcare, and introduced a program that supports employees
who only take their children with them while working overseas. We made an action planof promoting women in March 2016 prescribed by The Act on Promotion of Women's
Participation and Advancement in the Workplace.
Action Plan (PDF/74KB)

Maternity and Child-Care Re lated Programs at Sumitomo
Corporation
Attaching great importance to diverse values and lifestyles in personal WLM
fulfillment, we offer various optional programs and are flexible andsupportive in helping employees eliminate any problems or concerns.
One
year
old

Two
Three
years years old
oldEntering
elementary
schoolFinishingelementary school

Support for Balancing Work and Child-rearing
Sumitomo Corporation offers various options that are available both for men and womenwith the aim of creating a work environment where diversified employees who haveentered the life stage of child-rearing can exert their maximum performance abilities.
The Human Resources Department's staff interviews an employee who is to take a childcare leave and her direct supervisor to provide information on relevant programs tofacilitate her taking the leave and returning to work.

Childcare Consulting Services
As part of our efforts to support employees to achieve childcare-work balance, we haveadopted childcare consulting services provided by Poppins to which we outsource theoperation of the in-house nursery.

Re-employment of Former Employees who had to Leave thedue to their Spouse's Transfer

Company

A re -employment program is available for former employees who had to leave
the company due to their spouses overseas transfer if they meet certain
conditions.

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Activities
Consultation on
caregiving issues

Eligibility crit eria

Seminars on caregiving issues

Frequency/period

Once or twice/year

Sumitomo Corporation employees

Consultation sessions on
caregiving issues

Once monthly

Caregiving while working

Flex-time work system
Short working hours

Under the flex-time work system, daily work
hours can be shortened by a maximum of
120 minutes.

When any of the following people needs long-term care:spouse, parent, child, grandparent, sibling, grandchild, or
spouse’s parent

Exemption of overtime work
Exemption of late night work

Short term

T aking a leave of absence for a cert ain period oft ime for caregiving

Sumitomo Corporation offers various programs to help its
caregiving employees work without anxiety. We are working
to create a work environment where employees who haveentered the life stage of caregiving can play an active role atwork. We hold seminars on caregiving issues and individual
consultation sessions on caregiving issues (once a month).
In 2014, we distributed the “Handbook for Managing WorkCaregiving Balanceˮ to all employees.

ProgramLong term

Support for Balancing Work and Long-term CareA leave of absence fornursing careLong-term care leave

When any of the following people needs care:spouse, parent or child

Thirty days for one case as a rule

When any of the following people needs long-term care:
grandparent, sibling, grandchild, or spouse’s parent

Five days annually for one person
Ten days annually for two or more persons

When an y of th e following people needs long-term c are: spouse,
parent, child, grandparent, sibling, grandchild,or spouse’s parent

Three times/person
Up to 365 days in total

Other services available
Long-term care-related support services

Elderly home monitoring services

Cafeteria Plan

http://www.seacare.or.jp(Reference: HR intranet > Work-life management)(Reference: HR intranet > Employee benefits >Cafeteria Plan >User’s manual)Free consultation servic es for issu es relat ed to longterm c are, such us how to us e long-term c are
insurance s ervices, how to get along with c aremanagers and profes sional caregivers, and how tochoose care f acilities; and support s ervices fo r longdistance care and balancing work and long-term care.
*Paymen t by users. Those wo rking in Japan can use“Cafeteria Plan” points.

For thos e with a f amily member living
separately who needs long-term care o r thosestationed in an ov ers eas office who have afamily member living in Japan who n eeds longterm care, home monitoring servic es provided
by SECOM Co., Ltd. o r CE NTRA L SECU RITYPATROLS Co., Ltd. are available.

“Cafeteria Plan” points can be used for the purposes
below:
to partially cover caring costs
to partially cover costs for care products

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Human Resources Management：Utilization of Human Resources（Diversity & Inclusion）
Activities
Support for Senior Employees' Activities
In terms of securing human resources to ensure the sustainable growth of theorganization, Sumitomo Corporation has been improving the work environment toachieve active involvement of all employees regardless of age. The aim is toprovide all employees with opportunities to play an active role at work. As part ofthis effort, we adopted in April 2006 an employment extension system that isavailable for all employees who reach the mandatory retirement age of 60 andwant to continue working to the age of 65.

CLP (Career & Life Planning) Training

CLP training is provided to employees 50 years of age or older to give them an
opportunity to look back on their experience of working at Sumitomo Corporationand develop their career and life plans for further improvement in the future,
regardless of internally or externally.
In this training, we explain the company’s employment extension system andretirement benefits, public pension plans, long-term care and other insurance
systems, and other relevant programs, thereby providing information on financial
planning, which is necessary when considering life planning.

Career Assessment Interviews

Employees 50 or older can consult on post-retirement career and life planningwhen they conduct their annual interview with their supervisor. In interviews
conducted two years before mandatory retirement, employees who wish tocontinue working after the mandatory retirement age are informed by a supervisor
about their likely assignment and salary. By creating an early opportunity tocompare the desires of the employee with the expectations of the organization, we
provide support so that employees can make independent decisions regarding theflexible work styles that they want after retirement.

Support to Find a New Job Outside the Company

Promotion of the Employment of the Disabled and Retention of
Disabled Employees
As part of its efforts in corporate social responsibility and toward diversity, Sumitomo
Corporation has been promoting the employment of the disabled. In 2014, weestablished Sumisho Well Support Co., Ltd., a special subsidiary company, topromote the employment of people with disabilities and retention of disabled
employees.
Disabled employees of Sumisho Well Support are engaged in various tasks, such as
supplying office stationery, in-house mail delivery, making name cards, andconverting data into PDF files to promote paperless transactions. They are now
indispensable for our company's business activities. In conjunction with the
expansion of business, the number of disabled employees has increased, reaching 45
as of November 2019. We will continue to cooperate with disabled persons and help
them grow and encourage them to be independent. As the Sumitomo Corporation
Group as a whole, while ensuring to meet the legal employment rate for disabled
people, we will further increase job opportunities for disabled people.

Raising Understanding of LGBTQ* Employees
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.
We believe that acquiring appropriate knowledge concerning LGBTQ individuals is
important and provide information to employees through various training. We also
created an LGBTQ consultation desk, set out employment rules that enable the samesex partners of employees to enjoy certain employee programs, and are taking
various other measures to create work environments free from any discrimination to
LGBTQ employees.
＊ Refers to lesbian, gay, bisexual, transgender, and questioning.

For employees looking for new job opportunities outside the company, we provide
re-employment support services such as consulting with a specialist career
consultant from a re-employment support firm under contract with the company.

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Human Resources Management：Creation of Work Environment
Policy and Concept
Creation of an Environme nt Whe re
Demonstrate their Fullest Abilities

Activities
DiverseIndiv iduals can

Sumitomo Corpo ration formed t he compa ny-wide “Work-life Balance Promotion
Project Teamˮ in April 2005. Si nce its launch, the team has implemented
various efforts . In Decem ber 2015, t he team's name was cha nged to “WorkLife Managementˮ in o rder to clarify o ur underlying idea t hat employees s hould
promote a smart work style over a medium- to long-term perspective andproactively manage work life balance . Ho w to mana ge work-life balance
depends o n individual values and lifestyles. We believe a fulfilling life as awhole, both at work a nd in private life, produces vitality, which se rves as adriving fo rce to create ne w value. In this context, Sumitomo Corporation offers
various kinds of options to help employees address vario us iss ues. We also use
and promote an o utput -oriented approach to work, which generates highReduction of Overtime
Sumitomo Corporation has promoted a smart work style with smart distinction
and switchover bet ween “work with full energyˮ a nd “enjoy private life.ˮ As
business is becoming diverse and sophisticated, job types a nd tasks are also
becoming diverse. Under these circumstances , the management o f working
hours by reducing them quantitatively and uniformly does not s uit the current
situation. Merely wo rking long hours does not nece ssarily result in better
achievement. In terms of improving global competitiveness, company -wide
efforts will be continued to pursue a work style that generates adde d value. We
have pro grams for employees to sha re information on efforts to raise awa renessand other useful information. Examples are shown below:

added value.

Reduction of Overtime- Time Management Training sessions held
- Regularly holding labor-management roundtable discussions- Implementing work-style KAIZEN seminars (labor-management collaboration)

Time Management Training
Since 2005, we have bee n providing employees i n Class-A key career
positions with time management training. We are expandi ng the target to awider ra nge o f employees, providing it in a n o ngoing manner as pa rt of our- Awareness raising efforts

employee awareness-raising activities.

Encouragement to Use Entitled Leaves

Work-style KAIZEN Seminars- Quantitative targets set for paid leave utilization- Initiatives for “Premium Fridays”- Spouse maternity leave , Refresher leave, Volunteer leave

Promotion of Flexible Work Styles

Since 2008, jointly with the labor union, we have held work style kaizen
seminars inviting external lecture rs a fe w times annually. Lect urers in thepast include Takeru Kaido , Osamu Hayashi, Akihiro Nakatani, Ts uneo Sasaki
and Yoshie Komuro.

- Teleworking system- Super flexible work hours system- Dress Code Modified

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Human Resources Management: Development of Workplace Environments
Activities
Encouragement to Use Entitled Leaves
Sumitomo 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 target number of paid leaves to be taken in2016 and the adoption of “Premium Fridays” in 2017.

Paid Leaves Taken by Employees
In 2017, a company-wide, quantitative target was set for each employee totake at least 14 days, which was reached by 95.7% of the employees. In
2018, it was set to each employee taking at least 14 days of paid leave andthe non-binding target was set to 16 days, and as a result, the targets wereachieved by 94.3% o f the employees. In 2019, the company-wide,
quantitative target was set for each employee to take 16 days off, which wasachieved by 82.7% of the employees.
The acquisition rate has been steadily increasing over the last four years
since the quantitative targets were first set in 2016, and in order to further
cultivate a “self-driven and output-focused work style”, no targets are set for2020. The paid leaves will be managed by each organization and individuals.

Premium FridaysOn the Premium Friday, it is recommended to take all-day or theafternoon off.



If it is difficult to take a paid day off, it is recommended to use flextime
and leave the office earlier than usual.
In addition to the month-end Friday, which is designated by the Ministryof Eco nomy, Trade and Industry as Premium Friday, it is recommended
that employees take a paid day off or use the flex-time work system onother Fridays of the month, which we collectively call “Premium Fridays.”

Creation of a Work Environment to Realize Self-sustaining andFlexible Workstyles
The objective of the teleworking and the super-flexible work hours system is tocreate a work environment where employees can work proactively and flexibly andto achieve an output-oriented work style that generates high added value. By
allowing employees to work proactively and flexibly, it is aimed to help them makethe time for themselves to maintain good health and improve their self-value,leading to maximizing their performance.

Teleworking System
In November 2018, we adopted a teleworking system, which offers three
options: working at home, working from a satellite office, and mobile working.
This system applies to about 4,000 employees working for Sumitomo
Corporation in Japan. As a rule, eligible employees are entitled to up to 14.5
hours (equivalent to the work hours for two days) of teleworking per week.
They are allowed to work at home or any of more than 100 satellite offices
mainly located in Tokyo, which is helpful for them to expand the work area
flexibility. There are no particular restrictions on use, in general. Employees indifferent circumstances, such as providing childcare and long-term care,throughout the company, are provided an opportunity to work proactively andflexibly.

Super Flexible Work Hours System
In November 2018, we abolished the flexible work hours system, under which
employees 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 individual
employees to design and manage their own work style, leading to further
improvement of the performance both of the organization and each employee.

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Human Resources Management: Development of Workplace Environments
Activities
Creation of a Work Env ironme nt to Realize Selfsustaining and Flexible Workstyles
Dress Code Modified

Creation of a Work Environment to Realize Self-sustaining and Flexible Workstyles MIC
Selects Sumitomo Corporation for Telework Pioneer 100
Sumitomo Corporation introduced the teleworking system in November 2018 as a part of its

As a part of our efforts to develop flexible work

workstyle reforms and has focused efforts on new work styles. These efforts have been recognized,

environments that promote employee autonomy, we

and the Ministry of Internal Affairs and Communications (MIC) selected Sumitomo Corporation forfocused on work sites and times and introduced theinclusion in the Top Hundred Telework Pioneers for FY2019. Through Top Hundred Telework Pioneers,

teleworking system and the Super flexible work hours

MIC recognizes companies and organizations with sufficient achievements that are advancing thesystem 2018. To build on these systems, in April

introduction and utilization of telecommuting. In 2019, we implemented an initiative entitled Work

2020, we reviewed the dress code to promote

Style Transformation 2019 with the aim of further promoting new work styles that make use of newchanges in individual and organizational awarenesssystems. A survey conducted after the program ended indicated that more than 96% of employees

and further promote autonomous work styles. After

felt that the program increased individual productivity, supported improved health, and made theorganizing current rules on attire, we eliminatedworking environment more comfortable, and evaluations were extremely high. In addition, the new

dress codes within the scope of common sense

work styles lead to increased employee engagement, and a majority of respondents indicated thatappropriate for the work and workplace at thepermitting unrestricted work styles indicates that the company trusts employees, and motivation is incompany according to TPO.

turn increased. Going forward, we will implement additional workstyle reforms to promote paperless
operations, enhance employee IT literacy, improve operational flows, and make other improvements.

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Supply Chain
Policy and Concept

Activities

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 a sustainable 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 regionalorganizations, and pre-departure briefings with employees being sent on overseas assignments in order to promotesustainable supply chain management. In the event that we find violations of these guidelines in our supply chains, wewill 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.
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 core competence of integrated corporate strength, we request our suppliers and business partners tokindly accept, understand, and practice these guidelines so that together we can achieve responsible value chain management.
Our suppliers and business partners are expected to:
1.
2.
3.
4.
5.
6.
7.
8.

Respect human rights and not to be complicit in human rights abuses
Prevent forced labor, child labor and the payment of unfairly low wages
Not engage in discriminatory employment practices
Respect the rights of employees to associate freely in order to ensure open and fair negotiations between labor and management
Provide employees with safe and healthy work environments
Protect the global environment and give due consideration to biodiversity
Ensure the quality and safety of products and services
Ensure fair business transactions, to abide by all applicable laws, rules and regulations, and to prevent extortion, bribery and allother forms of corrupt business practices
9.
Ensure appropriate information security
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.

Supplier Management
In monitoring social and environmental risks
in each business, we confirm the status of
supplier
management
based
on
the
"Sumitomo Corporation Group CSR Action
Guidelines for Supply Chains”.

Conflict Minerals Policy
The Dodd-Frank Act, which was enacted inJuly 2010, requires US-listed companies totrace the country of origin of minerals used intheir products within their supply chains todetermine whether or not "conflict minerals"*
produced in and around the Democratic
Republic of the Congo are included. The
results must be reported annually to the U.S.
Securities and Exchange 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 thata conflict mineral is used by our partnercompany, our reputation could be harmed
and it may affect customer selections. We
therefore
gatherrelevant
information
regularly and managed it unitarily.
*

The

Dodd-FrankAct

defines

conflict

minerals as tin, tantalum, tungsten and gold.

Interpretation of The Sumitomo Corporation Group CSR Action Guidelines for Supply Chain Management

77Sustainability of
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Supply Chain
Certification

Activities

Certification

Business description

Measure s Take n t hrough Sustainable Supply C hain
Certification

Measure s
Industry

RSPO: Roundtable on
on Sustainable Palm
PalmOilOil
ofofthethe RSPOWe became ananordinary
ordinarymember
memberRSPO
in 2019.
Further,
our consolidatedin2019.
Further,
our consolidated
subsidiaries
subsidiaries
SCLtd.
Foods
Co.,
Ltd. AndSC
Foods Co.,andSummitOil Mill Co., Ltd.
SummitOil MillCo.,supply
Ltd. willobtainRSPO
willobtainRSPO
chaincertificationinsupply chain certification in 2020.
2020.

Sumitex International Company Ltd. (*) deals
in products ranging from fiber material to final
secondary products, such as clothing andgeneral merchandise. The company aims toachieve sustainable growth in harmony withsociety while paying careful consideration tolabor and other practices in their supply chains.
They conduct work environmental audits ofplants where the production is outsourced,
based on the standards of some customers.
Issues to be audited include not only the work
environment but also child labor, forced labor,
coercion, harassment, discrimination andoccupational safety. The company does not use
manufacturing plants that fail to meet thestandards and only use those that meet the
Sumitomo Corporation Group CSR Action
Guidelines for Supply Chain Management andthe Code of Conduct (CoC) of our customers.

SBP: Sustainable
Sustainable Biomass
SBP:
Biomass Program
Program
In September 2019, we became the
We are first Japanese company obtaining SBP
first Japanese company to obtain SBP
CoC(Chain-of-Custody)
certificationincertification for CoC (Chain-of-Custody)
September 2019. SBP is a certification system
and Collection and Communication ofprovides assurance that biomass manufactured,data. SBP is a certification system
traded and used by certified companies isproviding assurance that woody biomasssourcedfrom legally and sustainably managed
used in energy production is sourced fromforests.
legal and sustainable sources.
FSC:
FSC®Forest: ForestStewardship
StewardshipCouncil
CouncilWe
obtainFSC-CoC
certificatoin,an
We obtain
FSC® -CoC
certificatoin,aninternational
forestmanagement
certificationinternational forest management
system,andprovidewith FSCcertification
system,and customers
providecertifiedproducts
mainlyfrom
our®
customers with FSC -certified products groupcompanies.
mainly from our group-companies.
PEFC：Program
for
PEFC™：Program
forthetheEndorsement
Endorsementof Forest Certification Schemes
We obtain
obtainPEFC
CoC certification,
PEFC™
CoC certification,
an international
forestmanagement.
international
forestmanagement.

2-1036-19-100-00

Taken

Business description
intheText ile

Apparel manufacturing
plant of Sumitex
International Company Ltd.

an(*) As of June 1, 2021, we have sold all shares of Sumitex
International Company Limited.

Measure s Taken in theElectronics Industries

Chemical and

Sumitomo Shoji Chemicals Co., Ltd. is mainly
engaged in trading business of chemical andelectronic products, which are involved in various
industries and have a multitude of applications.
Before starting business transactions, the company
confirms that each 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 makesure that no issues related to the environment andhuman rights have been reported. Sumitomo Shoji
Chemicals is a member of Sedex, a nonprofit
membership organization providing a world’s
largest platform to manage and share ethical data
within supply chains, with the aim of ensuring
ethical and responsible business practices in global
supply chains. The company has also passed thehuman rights and environmental audit of Sedex.
Sumitomo Shoji Chemicals agrees on the Green
Partner Environmental Quality Approval Program ofits clients, whose objectives include the promotionof environmental protection. It also requires its
suppliers of raw materials to agree on a green
procurement program and other relevant programsand to comply with environment-related laws andregulations, and follows their implementation.

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Industrial and Technology Innovation
It is inevitable for the Sumitomo Corporation Group to cope with accelerating technology development and innovative business models that will change the structures of allindustries. To promote business development for the next generation, we have reinforced our business development systems in Silicon Valley in the United States, Europe ,Asia and other regions. We will also promote collaboration with venture enterprises that possess innovative technologies and business models, and collaboration among
business units and overseas offices beyond the existing frameworks.

Business description

Business description

Participation in a commercial lunar exploration program

Venture investments in Silicon Valley

Sumitomo Corporation has signed a contract with ispace, a company thataims to create an earth/moon economic sphere by developing acity/resources on the lunar surface. The contract makes Sumitomo
Corporation a Corporate Partner of HAKUTO-R, the world’s firstcommercial lunar exploration program. The HAKUTO-R program managed
by ispace aims to create a new market consisting of the earth and themoon as one economic zone by realizing the first commercial lunar
exploration and opening up business opportunities on the lunar surface.
Water is essential for extending the human presence to space and theexistence of resources on the moon such as water has been confirmed. It
is expected to create fuel for rockets, etc. by electrically decomposing
water into hydrogen and oxygen. Once the development of the lunar
surface advances through the utilization of water resources andinfrastructure such as an international space station able to accommodate
humans is built, the earth and the moon and everything in-between will
be opened up as a new sphere of human activity. In addition, Sumitomo
Corporation has been involved in space business since 1994 and has
participated in government-led international space development throughHamilton Sundstrand Space Systems International, a joint venture with
United Technologies Corporation. Hamilton Sundstrand develops,
manufactures and markets space
suits,
environmental
controlsystems, and other products. We
have now started tackling thechallenges of the next stage ofspace business and entering the
new field of commercial spacedevelopment.

Through a venture investment fund it established in 2017, the Sumitomo Corporation Grouphas invested in Arevo, Inc. (“AREVO”), a company known for its 3D printing technology using
carbon fiber reinforced composite material. 3D printers produce three-dimensional objects
from design models by adding materials layer by layer. Originally, 3D printing technology wasdeveloped for making prototypes for manufacturers to examine the structure, design, andfunction of products before mass-producing them. In recent years, however, theperformance of 3D printing has improved to the point that the technology is beginning to be
used for manufacturing processes themselves. Capable of making an entire product without
assembling different parts, 3D printers can reduce production cost, inventory cost, andmanufacturing.
AREVO developed a 3D printing technology that uses its unique composite material
combining continuous carbon fiber and resin. Being extremely strong, rigid, and lightweight,
the carbon fiber composite material is expected to find applications in a broad range o findustries such as oil, gas, aerospace and automobiles, as well as in medical and consumer
fields. At the same time, with their software algorithms enabling optimum strength andlightness and their robot arms allowing for additive manufacturing from all directions, AREVO
3D printers can now manufacture diverse product lines, including large-size and lightweight
products that could not have been made by conventional 3D printing technology.
In July 2017, Sumitomo Corporation Group founded a venture investment fund under
Sumitomo Corporation of Americas with an eye to utilizing its experience and networks

Lunar module manufactured by ispace (illustration)

AREVO 3D printerdeveloped through Presidio Ventures, Inc., a venture capital
firm it established in 1998. The recently established fund aims
to expeditiously identify investment opportunities in earlystage venture firms, thereby helping the Sumitomo
Corporation Group to upgrade its ongoing undertakings anddevelop new businesses. We have so far executed twelve
investment deals (as o f the end of April 2020). AREVO is one
more such investment financed by the newly established fund.

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Healthcare
The rece nt rise of me dical expe nses due to the increasingly aging population has become a global social issue. In o rder to res pond to this issue , healthcare markets
need to be rapidly expanded.
The Sumitomo Corporation Gro up added in April 2018 t he Health C are B usiness Department and also established a compa ny-wide working gro up (WG) de dicated to awide ra nge o f healthcare issues . Enha nced efforts will be made to develop ne w business models t hat lead to more effe ctive manageme nt of medical costs t hroughusing existing busine ss infrastructure a nd functions, s uch as Tomo d's chain of drugstore s, which provide pres cription dispe nsing services , and generic m anufact urers
in the U.S.; to expand digital health busines s using technological innovations , s uch as the internet of things (Io T) and a rtificial intelligence (AI); and to develop
healthcare infrastructure in emerging countries.

Business description
Participation in Healthcare Business
The Sumitomo C orporatio n Group is engaged in ope rating drugstores t hat
provide prescription dispe nsing services a nd in providing he althcare services . By
widely disseminating information o n home health ca re and long-term ca reservices a nd promoting the use o f such services, we contribute significantly to
improving access to better healthcare and people's quality of life.
Effo rts in healthcare services business include investment s in eWeLL Co., Ltd., acompany that develops a nd sells business support systems for visiting nursing
service providers, a nd Community Healthcare Coo rdination Platfo rm, Inc.
(CHCP ), which provides business support services to medical a nd nursing ca reproviders in 2017; a nd Integrity Healthca re Co ., Ltd., which develops and sells
online medical cons ultation systems fo r medical institutions in 2018. In 2019,
we entered managed care service in Malaysia.
The iBow, offered by e WeLL, is a cloud service t hat enables users to mana gepatient information from PC or tablet. It was developed in response to the

CHCP aims to create a new integrated comm unity care system, in cooperatio nwith healthcare a nd nursing ca re providers , taking into consideration provisionof funds , busines s m anageme nt expertise , and ma nagement personnel ;establishment o f a coo perative system amo ng healthcare and nursing ca reproviders; a nd a doption o f cutting-edge technology and examples in othe rindustries.
Integrity Healthca re C o., Ltd. o ffers t he Ya Doc telemedicine system, which
provides an e nvironment whe re telemedicine by a physician is com bined withaccum ulated data o n t he daily health condition o f t he patient, based on which
treatment tailored to his/her needs is constantly available.
Manage d care se rvice is a system that promotes afforda ble and better medical
services and co ntributes to people’s healthy life through cooperation betwee n
private health ins ura nce compa nies, ma naged ca re providers a nd medical
facilities.

ncreasing importance ofand need fo r visiting
nursing se rvices for the
purposeofreducing
administrative
burdenon visiting nurses a nd
improving the efficiencyof their services.

Thro ugh these business activities,
we will co ntinue to contribute tocreating a fo undation that ensures
healthy living for people.

YaDoc Online Medical
Consultation System
Business model of eWeLL

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Healthcare
Business description
Access to Better Healthcare and Nutrition
In emerging and developing countries, there has been a rapid increase in the
demand for medicines due to increased population and economic development. In
many of these countries, however, many people are without sufficient access tohealthcare services and medicines due to poor social infrastructure and healthcare
environment, and for financial reasons. The Sumitomo Corporation Group has madesignificant contributions to improving people's quality of life through providing
comprehensive support to players in the pharmaceutical industry, from upstream todownstream, which would not be possible without a global system unique to an
integrated trading company. We have also made efforts to make more medicines
available to the people in emerging countries.
At present, the world pharmaceutical market is worth about 127 trillion yen, of which
about 40% is accounted for by the US market. In the United States, while demand for
medicines is expected to rise as the elderly population is increasing, the governmenthas been working to reduce medical costs. In these circumstances, the use of genericdrugs is expected to grow. We have acquired a 20% stake in the genericpharmaceutical company Upsher-Smith Laboratories (USL), which is owned by a US
subsidiary of Sawai Pharmaceutical Co., Ltd., through Sumitomo Corporation ofAmericas to enter the U.S. generic pharmaceutical business. USL is engaged inresearch and development, manufacturing and selling of generics. Its strengths are
excellent capabilities in product development, stable supply and sales, and a customer
base that have been built through years of business experience.
We take advantage of the strengths unique to integrated trading companies insupplying raw materials and launching new products in order to support USL's
business. We will provide high-quality generics to many patients through USL inorder to thereby contribute to people's mental and physical health.
In Brazil, Russia, Turkey and other so-called "medically emerging countries," thepharmaceutical market has been expanding significantly as their economy isdeveloping and living standards are improving. Their market growth rates haveexceeded the average growth rate of the global pharmaceutical market and are
expected to account for about a quarter of the world market in 2021. Sumitomo
Corporation will place emphasis on strengthening its relationships with local
pharmaceutical manufacturers in these medically emerging countries to promote

the introduction of biopharmaceuticals and other medicines and s upport in local
manufacturing on which each government places emphasis. Through these efforts ,we will be more active in contributing to people's health and better lives.

Drug Discovery
SupportUSL Head Office(Minnesota, USA)

Generic drugs

Commercialization of Cutting-edge Technologies
The in vivo imaging system device marketed by Summit Pharmaceuticals
International Corporation (SPI) enables us to analyze the images of small- to
medium-sized animals without killing or injuring them in basic research and the earlystage of drug discovery. The device contributes to reducing animal experiments.
We provide information on the device and promote its sales in seminars andexhibitions at scientific conferences that are held for university laboratories andother academia, which are major customers of the device. The Sumitomo
Corporation Group has introduced cutting-edge technologies of the Medical
Research Council (MRC). Sir Gregory P. Winter, a professor at MRC Laboratory of
Molecular Biology, was awarded theNobel Prize in Chemistry 2018.
He shared the prize with two otherscientists for the development andapplication of "the phage display of
peptides and antibodies."
We support the pharmaceuticalindustry in these
aspects
tocontribute to addressing social issues.
In Vivo Imaging Forum 201781

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Local Infrastructure/Community Planning
Population growth and urbanization have been rapidly increasing around the world, mainly in emerging countries. In response, the Sumitomo Corporation
Group is accelerating its involvement in urban development and smart city projects and infrastructure construction business. We established the PFI Business
Department and, in April 2018, launched a new working group "Smart City WG" to place more emphasis on developing company-wide business projects.
Business description
Telecommunications Business in MyanmarWe, jointly with KDDI and Myanma Posts and Telecommunications (MPT), started
telecommunications services in Myanmar in September 2014.
The penetration of mobile phones in Myanmar was, at the beginning, about 10%,which has increased rapidly to approximately 150% now. There is no difference inthe use of smartphones among young people between Myanmar and Japan. As ofthe end of March 2020, the number of mobile phone subscribers of MPT was about
27 million people and the company has the highest market share. We are making
constant efforts to deliver Japan-quality services to the Myanmar society, as
demonstrated by the swift deployment of 4G, fourth-generation wireless technology.
The land of Myanmar is 1.8 times larger than that of Japan. As many areas still haveinsufficient infrastructure, such as roads and railways, it sometimes takes
unimaginable hardships to build telecommunications network infrastructure
throughout Myanmar. As a result of our untiring efforts, we have deployed stabletelecommunications network throughout Myanmar, thereby creating jobs in local
areas as well as contributing to eliminating regional disparities in Myanmar.
We are aiming to contribute to the enrichment of people's lives in informationdriven society and the development of various industries in Myanmar by building
nationwide telecommunications infrastructure and providing new services.
Such new services include financial services. Since mobile phones are available
throughout the nation, we have launched mobile money transfer and payment
services, and micro-loans could be the next. With these services, it is aimed toprovide all kinds of financial services at a national level in Myanmar where 80% of
the people do not have bank accounts, and to contribute to the Myanmar economic
growth by providing operating funds to farmers, individuals, and small and medium
businesses, which account for a large proportion in Myanmar.
In Myanmar, only 50% of the population have access to commercial power sources.
We are therefore planning to provide private power generation systems using solar

panels and mobile money, which would enable to expand the use of clean energy
and enrich people's lives.
Our aim is to achieve sustainable growth together with Myanmar society, thereby“contributing to the development of local communities and industries” by developing
essential infrastructure and providing various valued added services through its
telecommunication business.

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Local Infrastructure/Community Planning
Business description

Business description

Car-sharing Business in Stockholm

Retail Finance Business in Indonesia

The urban population in the world is growing. Some estimates show th at 68 % of the global
population will live in urban areas by 2050. Traffic congestion, air pollution and parking shortages

The number of sales of new vehicles in Indonesia
with a population of about 260 million is one

have already b ecome social issu es in some urban cities. In response, people are p aying attention
to efforts to optimize transportation networks and energy consumption using IoT technology.
Our Group launched in October 2018 car-sharing business in Stockholm Sweden through Aimo
Solution AB. We provide free floating car-sharing services u sing a fleet of 300 electric vehicles,
which allow users to pick up and return cars anywhere within a specified zone. Furthermore,

million automobiles and about 6.5 million
motorcycles. This is one of the largest markets in
ASEAN. We provide financing services such as
automobile loans and motorcycle loans throughPT Oto Multiartha and PT Summit Oto Finance,

Aimo Park Sweden AB who is th e biggest parking operator in Sweden joined our group throughacquisition in April 2019 and we are going to provide more convenient customer exp erience bycollaboration with parking and car-sharing. It is aimed in the future to provide, in cooperation
with all kinds of mobility services (buses, trams, subways, etc.), seaml ess and efficienttransportation solutions using common smartphone applications to address i ssu es f aced by urban

collectively as th e OTO Group. The OTO Group has
a network of more than 240 branch offices
throughout Indonesia, mainly in Java andSumatra and has provided its services to a
cumulative total of more than 8.5 million

cities in advanced countries, such as tr affic congestion and parking shortages, as well as tocontribute to building active communities where people enjoy active lives.

customers.
It helps secure tran sportation for a wide range ofincome groups to support local infrastructure.
In Indonesia, the middle-income population willkeep increasing and the current population of
about 180 million is expected to reach 200 million
in 2020. the market i s ther efore also expected to
expand. We will continue our support to help
customers achieve prosp erity and dreams throughautomobile and motorcycle financing business.

Services using a fleet of 300 electric vehicles

A series of processes from searching and booking of avehicle, unlocking and locking of the vehicle, topayment can be completed on the smartphone app.

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Social Contribution Activities
Policy and Concept

Activities

The Sumitomo Corporation Group work to resolve social issu es throughits business acti vities and its social contribution activities with the aim of

FY2019 Social Contribution Activity Costs

contributing to create a su stain able society by fulfilling its Managem ent
Principles and Activity Guidelines as a global business group.

Total social contribution activity costs (unit: million yen)

The Sumitomo Corporation Group’s

Basic Principle s on Social

Contribution Activities
OBJECTIVE
We, as a global organization, will work on social issues through ourbusiness activiti es and social contribution activities with the aim ofbuilding a sustainable society by implementing the Sumitomo
Corporation Group’s Management Principles and Activity Guidelines.

Head office andregional organizations
1,013
Head office
operational
Programs
253

Consolidated
subsidiaries
1,049

General donations/ FY2019 results
advertising, etc.
2,062million yen
586

ACTIVITIESWe will engage in social contribution activities aimed at developing thenext g eneration of human resources who will drive the su stain able
development of society, and contributing to local communities in areas
we do business all over the world. We will also take part in various

Operation at localorganizations in Japanand abroad
175

activities as a good corporate citizen.
APPROACH
We will perform and seek to continuously improve our activities withmodesty and high aspirations and endeavor to maintain a high level oftransp arency while strengthening our relationships with all our
stakeholders.

<Notes>*The values above were calculated using the inclusion criteria of the
Keidanren One Percent Club.
*The values above for local organizations and consolidated subsidiaries
were calculated based on questionnaire results.
*Values reported by overseas offices were converted to yen using theexchange rate as of March 2020.

84Sustainability of
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Corporation GroupFeatureEnvironment

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ESG Quantitative
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Assessment

Social Contribution Activities
Activities
Developing the Next Generation of Human Resources
The TOMODACHI Sumitomo Corporation Scholarship Program (since 2014)

Sumitomo Corporation participates in the TOMODACHI
Initiative, a program of exchange between Japan andthe United States led by the U.S. Embassy in Tokyo andthe U.S.-Japan Council (Japan). We organize ascholarship program for university students that are sent
to the United States 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.

The Sumitomo Corporation Scholarship (since 1996)
We set up the Sumitomo Corporation Scholarship in
1996 as part of our 50th anniversary in the tradingbusiness. Since then, scholarship has been provided
to university students in Asian countries includingIndonesia, Myanmar, and Pakistan. In this way, we
support the development of human resources inemerging Asian countries to build the nation’s
future. The total number of students who havebenefited from the scholarship reached about 16,500 by the end of FY2019.

Contributing to Local Communities in Areas We Do Business
Introducing Japanese Culture（Since 2015）

With the aim of building good relations with local
communities at overseas business bases, we givepresentations and demonstrations on traditional Japaneseculture. The program was hosted in Myanmar(FY2015),
Ghana and Iran(FY2016), Mexico and Cuba (FY2017),
and UAE(FY2019). In 2019, we conducted the programat the Kesennuma Shishiori Marine Product Processing Cooperative in Miyagi
Prefecture, to which Sumitomo Corporation is providing support of industrial recovery
after the devastating tsunami and earthquake of 2011. Indo nesian technical trainees
working at member businesses of the cooperative were invited to such hands-on
experiences as kimono wearing and a traditional Japanese tea ceremony.

Promoting Barrier-free Movies (Since 2004)

Sumitomo Corporation promotes the widespreadviewing of barrier-free movies as a part of its
initiatives to support community and social
participation by persons with disabilities. We
provide barrier-free versions of movies at no cost to
libraries and volunteer organizations throughout
Japan and support screenings so that visual- or
hearing-impaired individuals can enjoy movies with
their friends and families.

Assisting Reconstruction after the Great East Japan Earthquake
Sumitomo Corporation Follow-up Program for the Revitalization of East Japan (since 2017)

In the hope of aiding in the recovery of the areas hit by the Great East Japan Earthquake and the rebuilding of victims’ lives, we provided
support to young people involved in revitalization projects in eastern Japan for five years from FY2012. However, numerous problems remain.
Conditions in the disaster-hit regions and people’s situations are constantly changing along with their support needs. To provide ongoingreconstruction support that is closely tailored to local needs, we have revised the program to give more emphasis to in-depth dialogue with
grant recipients, drawing at the same time on our past support experience.

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Sustainability of
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Social Contribution Activities
Activities
Engaging in a Wide Range of Social Contribution Activities in each Global Region

EMEA & CIS

Sumitomo Corporation Scholarship Programin the Sultanate of Oman
Aiming to contribute to private– sector

AMERICAS
Social Contribution Activities in Americas Week
Sumitomo Corporation of Americas holds an

exchange b etween Jap an and Oman and toannual companywide event, Am ericas Week,

the development of future leaders in Oman,

during which employees carry out social

Sumitomo

contribution

Corporation

andSumitomo

Corporation Middle East TZE h ave launch ed
the scholarship program and have been
supporting Omani students studying at
graduate schools in Japan. In FY2019 we supported two studen ts andwill continue to support several students annually afterwards.

EAST ASIA
Supporting Education in Poverty Areas
In China, Chinese and Japan ese employees
cooperated in collecting donations, whichwere m atched with an equal sum by groupcompanies

and

then

u sed

to

supportdisadvantaged students in Anhui Province.
Employees have maintained direct contact
with the stud ents that th ey support by making on-site visits to theirhome province and inviting them to Shanghai. This activity wasactivities.

In

2019,

offices

across the Am ericas hold their own Quality
Education-focused activities, which included
contributing to improvements on the environments within local schools,
hosting reading and discussion groups with public school students,
holding various school supply and book drives, and much more.

ASIA & OCEANIA
Supporting People in need
In Singapore, a diverse range of employees
take part as corporate volunteer s in activities
to support people in need. These activities
take many forms, from help with mobility
and the provision of meals to sport and art
therapy, and attracted th e participation of
105 volunteers in FY2019.

launched in 2009 by Sumitomo Corporation (Shanghai) Limited andhas now expanded to Sumitomo Corporation China Group.

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Third-party
Assessment“100SEED” Social Contribution Program Looks Ahead to the Next 100 Years
100SEED
100SEED Launched with Global Employees to Mark Centennial
On the occasion of the Sumitomo Corporation Group’s 100th anniversary in
2019, Group employees around the world launched the “100SEED” social
contribution program to discuss together and carry out globally.
By participating in a three-step process—POST (post social issues ofinterest), DISCUSS (discuss the actions to be taken), and ACT (carry out
those actions)—each employee takes ownership of the solutions to social
issues, puts the Sumitomo Business Philosophy and Sumitomo Corporation
Group Management Principles into practice, and achieves sustainable

POST: Discussing Social Issues to be Addresse d in each Re gion
Based on Online Posts
A dedicated website was launched in February 2019 to explore the interestsof SC group employees around the world. Employees were encouraged topost social issues from among the Sustainable Development Goals (SDGs)
that concern them and their reasons, and more than 2,500 posts weremade in two months. The posts from Japan; East Asia; Asia & Oceania;
Europe, Middle East, Africa, and CIS; and the Americas were then analyzed,
and in April, representatives from each region selected from among young
employees met to determine the theme on which actions would be taken.

growth with society.

“Quality Education” Selected as Global Grand Theme#4 of SDGs, Quality Education, received the most votes, but climate change,
Three Concepts behind 100SEED☑ Consider social contribution activities that the Sumitomo Corporation
Group should implement by thinking back from what we wish for the
future.
☑ Make efforts to resolve the different social issues around the world bymaking use of diverse ideas suggested by people in the Sumitomo
Corporation Group.
☑ Put action plans to work through visiting, communicating and hands-on
participation at site.

poverty, and the gender gap also received many votes in some regions. The
most urgent issues differ depending on the conditions in each country, but
quality education was selected as the global shared
theme from a long-term perspective with the hope ofmaking this initiative a social contribution program fordiscussing together and acting globally. Meanwhile,
the participants shared the belief that “education willproduce the talent needed for solving many social
challenges.”87

Sustainability of
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Third-party
Assessment“100SEED” Social Contribution Program Looks Ahead to the Next 100 Years
100SEEDDISCUSS: Leverage the Sumitomo Corporation Group's Diverse Ideas
to Address Various Social Issues
In May 2019, DISCUSS was commenced to determine the specific actions in eachregion. In Japan, to reflect the opinions of many employees concerning action
proposals on education, 31 workshops were conducted nationwide and 413 proposals
were submitted. Based on this, experts including researchers and members of NPOs
and government were interviewed and proposals for activities were refined.
Employees voted from the perspectives of support for and intent to participate inactivities, with a total of 4,610 votes cast nationwide. Through this process,multiculturalism, career education, online education, and ProBono educational support
were selected as the activities for carrying out the 100SEED concept.

ACT: Provide Time and Human Resources, our Key Management
Resources, with the aim of Creating a Sustainable Society
The ACT phase commenced in 2020. In the 100SEED social contribution program, we
will provide our diverse human resources, our most important management resources,
and their time on all organizational levels to address quality education with the aim ofcreating a sustainable society. To encourage participation and voluntary action by
employees around the world, we also established the Mission Statement for 100SEED
that touch on the significance and objectives of these activities. Education will produce
the talent needed for solving many social issues and a base for an enriching future.
Sumitomo Corporation Group employees in all regions of the world are going toworksites and working hard in hands-on initiatives so that they can pass on thisaspiration to future generations. Information on activities and their progress will be
released from time to time on corporate websites and other media.

Mission Statement for 100SEED
We have selected “Quality Education” as the grand theme of the
100SEED (SC Emergent Evolutional Deed) program upheld to markthe Sumitomo Corporation Group’s 100th anniversary. Under thistheme, we are committed to develop and support a variety of social
contribution activities on a global scale.
Recognizing that “Quality Education” is a vital part of thesustainable development of society, we will continue to inspire ideas
for supporting quality education to produce the talent needed tosolve the many social challenges facing the world.
By promoting 100SEED, we encourage our SC colleagues aroundthe world to create opportunities and leverage our diverse
capabilities and resources so we can engage in activities that will
dynamically realize our goal of “Enriching lives and the world.”
100SEED provides us a valuable opportunity for personal growth bylearning from others and pursuing individual ideas throughcollaboration. We will commit time and resources to social actionthat will benefit any of us seeking to better society through quality
education.

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Corporate Governance
Policy and Concept
Corporate Governance Principles
Sumitomo Corporation established the Sumitomo Corporation Corporate Governance Principles while keeping in mind that the backbone of our corpo rate ethics is in
Sumitomo’s Business Philosophy and Management Principles. The Sumitomo Corporation Corporate Governa nce Principles were established based on our view that theessence of corporate governa nce is “improving management efficiency” a nd “maintaining sound management”, as well as “ensuring management trans parency” to secure
the first two. Following the Sumitomo Corporation Corporate Governance Principles, we are always seeking to establish the most appropriate managerial system for theCompany and are continuously strengthening our corporate governance to realize management that serves the interests of shareholders and all other stakeholders.

SystemCorporate Governance System and Characteristics
We have developed an effective corporate governance system byimplementing a range of measures . Having adopted an audit &supervisory board member system, we have reinfo rced thesupervisory and monitoring function of management oversight byelecting independent Outside Directors and Outside Audit &Supervisory Board Members and by establishing the Nomination
and Remuneration Advisory Committee, comprised mainly of
independent Outside Directors. We have also taken steps to makedecision-making and execution of operations faster and more
efficient by introducing a n executive officer system andestablishing the Management Council, among other measures.
We will continuously review our corporate governance system as
needed in response to changes in global trends, the social
environment, legal systems and other relevant issues in order tofurther improve and enhance the system.
Sumitomo Corporation Corporate Governance Principles
Corporate Governance Report89Sustainability of
Sumitomo
Corporation GroupFeatureEnvironment

SocialESG Quantitative
Data

Governance

Third-party
Assessment

Corporate Governance
SystemDirectors and the Board of Directors
Composition of the Board of Directors

Independence of Outside Directors

The composition of the Board of Directors ensures diversity in experience, knowledge, expertise,gender, and so on. Persons with a sincere character, deep insight, and high-level skills as well as
specialized business knowledge and a broad range of experience including managerial experience
are selected as candidates for internal directors, and they are appointed without regard for gender,
nationality, and other such characteristics. Candidates for outside directors must also have asincere character, deep insight, and high-level skills as well as broad-ranging knowledge andexperience from diverse perspectives and an established track record in their field, and they too
are appointed without regard for gender, nationality, and so on. In addition, multiple independent
outside directors with different experience and expertise are selected with the aim of reinforcing
appropriate decision making and supervisory functions from a variety of perspectives by the Boardof Directors. The Board currently comprises 11 members, of which five are independent outside
directors (including two women).

Our five outside directors satisfy the standards on
independence set by Tokyo Stock Exchange, Inc. (TSE),
and other financial instruments exchanges on which theCompany is listed, as well as our in-house rules onStandards for Appointment and Independence of Outside
Directors and Outside Audit & Supervisory Board
Members. Leveraging a different type of experience andexpertise, each Outside Director contributes to our
corporate governance by providing a variety of
independent viewpoints.

Improve me nt of Deliberations and Enhance me nt of Monitoring Functions by the
Board of Directors

Outside Directors and Outside Audit & Supervisory Board

Standards for Appointment and Independence ofMembers

We carefully select agenda items requiring discussion by the Board of Directors so that the Board
can concentrate on the deliberation of important matters regarding the Companywide
management such as the business policy and management plan. In addition, the Board of
Directors further enhances its monitoring functions regarding the execution of operation by the
management by receiving reports on the status of progress, issues, and responses to those issues
concerning division strategies in each Business Unit and by its deliberation focusing on those issues.
Moreover, the Board of Directors regularly monitors its status of implementation of the Company’s
overall business by receiving activity reports concerning main committees, and portfolio reports onmarket change risks, country risks, and other intensive risks. Furthermore, the Board of Directors
open-mindedly discusses various key management issues including ESG (environment, social,governance) at off-site sessions to enhance the deliberations at the Board meetings.

90

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Corporate Governance
SystemDirectors and the Board of Directors
Ensuring Diversity in Outside Directors
Respective outside directors have the expertise and experience shown below. They make decisions from diverse perspectives at the Board of Directors' meetings
and are engaged in effective supervision.
Expertise and experience of Outside Directors

Name

Reason for appointment

Term ofoffice as
Director

Member of theNomination andRemuneration
Advisory
Committee

Expertise and experience
Business
Management

Investment

Finance

Law

Government
AgencyInformation
andCommunications

Nobuyoshi
Ehara

Wide-ranging knowledge and a wealth of experience in finance andbusiness management accumulated during many years of engagement
4 years
in a major U.S. Investment Bank and the management of a private
equity firm.

●(Chair)

●

●

●

ー

ー

ー

Koji
IshidaWide-ranging knowledge and a wealth of experience in finance andbusiness management accumulated during many years of engagement
3 years
in a major financial institution and past position as a member of the
Policy Board at the Bank of Japan.

●

●

ー

●

ー

●

ー

Kimie
Iwata

Wide-ranging knowledge and a wealth of experience in business
management, corporate governance, corporate social responsibility,and diversity accumulated in managerial and Outside Director positions
2 years
for private companies, before which she served in a succession of key
positions in the Ministry of Labour (currently the Ministry of Health,Labour and Welfare) over the course of many years.

●

●

ー

ー

ー

●

ー

HisashiYamazakiHighly specialized knowledge and a wealth of experience in law
accumulated over the course of many years as a judge and an attorney 2 years
at law.

ー

ー

ー

ー

●

●

ー

Akiko
Ide

Wide-ranging knowledge and a wealth of experience in information andcommunications, business management, and corporate governanceaccumulated during many years of engagement in a major Newtelecommunications carrier, the management of a group company and electiona full time audit & supervisory board member of the parent (holding)company.

ー

●

ー

ー

ー

ー

●

91

Sustainability of
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Corporate Governance
SystemDirectors and the Board of Directors
Evaluation of the Effectiveness of the Board of Directors
To maintain and heighten the effectiveness of the Board of Directors, eachyear Directors and Audit & Supervisory Board Members analyze and evaluate
its effectiveness through the use of self-evaluations and other means. We
disclosed a summary of the results.
The evaluation of effectiveness of the Board of Directors and its results for
FY2019 is summarized below:
1. Evaluation Methods

2. Evaluation Results Overview
The overall evaluation and analysis by a third party concluded that the Board of
Directors has generally been functioning effectively.
With regard to the items (please refer to below), which had been identified as
issues in FY2018’s evaluation and we worked o n improvement in FY2019, it was
confirmed that the majority of evaluations were positive, citing that improvement
has been seen in each of them.
At the same time, regarding the composition of the Board of Directors,
enhancement of deliberations on matters to be focused on, and further
enhancement of the monitoring function of the Board of Directors, various opinions
and proposals were presented to improve the effectiveness of the Board of Director,
and it was confirmed that there was an awareness of issues.
Based on this, in order to further improve the effectiveness of the Board of
Directors of the Company, the Board of Directors will discuss issues and priority
matters that the Board of Directors should address in the future.

Those covered

All members of the Board of Directors (10 persons) and
Audit & Supervisory Board Members (5 persons)

Major Initiative s in Response to Issues Raised by Board of Directors
Evaluation

Implementation method

Anonymous questionnaire and interviews carried out in
December 2019 and January 2020
Note: A third party (external consultant) was used in the
conduct of the evaluation.

Evaluation Items

1. Composition of the Board of Directors
2. Administration of the Board of Directors
3. Enhancement of discussions at meetings andreinforcement of the monitoring function of the Boardof Directors
4. System for providing support, including information
provision, to Outside Directors
5. Own initiatives, etc.
6. Evaluation of improvement measures, etc.

Evaluation process

The results of analysis of the questionnaire survey andinterview responses as evaluated by a third party (external
consultant) were reported to the Board of Directors.

The FY2018 Board of Directors evaluation recommended reviewing the way inwhich business units conduct regular reporting on strategy, specific initiatives, andtheir progress, and also reviewing the duration of related discussions, while it also
recommended improvements to materials distributed at Board meetings. With
regard to these recommendations, we carried out the following measures to further
improve the effectiveness of the Board of Directors in FY2019:(i)
In Board meetings, discussions are required to be limited to important points
on the agenda in order to secure more time for discussing agenda that are to
be focused on and to enhance discussions.
(ii) Recognizing that management strategy, the management plan, and thebusiness portfolio are matters to be focused on in discussions, regular
reporting by business units on strategy, specific initiatives, and their progress
is required to provide an explanation with a focus on issues in promoting the
Medium-term Management Plan 2020, and solutions and policies to address
the issues; and(iii) Material distributed at Board meetings are required to explain technical terms
in the main body with footnotes, etc. and clarify key points of discussions.

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Corporate Governance
SystemDirectors and the Board of Directors
Establishme nt of t he Nomination and Re munerat ion
Committee

Adv isory

The Nomination and Remuneration Advisory Committee, of which a majorityof 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
and procedures regarding appointment and dismissal of the President andChief Executive Officer, (2) policies and procedures regarding appointment anddismissal of the Chairman of the Board of Directors, (3) nomination criteria for
directors and audit & supervisory board members, (4) appointment anddismissal of the President and Chief Executive Officer (including the nominationof a successor of the President and Chief Executive Officer), (5) nominations ofcandidates for directors and audit & supervisory board members (including
determination of Representative Directors and Executive Directors), (6)appointment of Management Council members, (7) the structures/levels of
remuneration and bonuses for Directors and Executive officers and the limit of
remuneration for Audit & Supervisory Board Members, and (8) the advisor
system, and will submit the results thereof as recommendations to the Boardof Directors. In FY2019, the Nomination and Remuneration Advisory
Committee met five times to deliberate the abovementioned matters, andsubmitted 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, Chairman of
the Board of Directors)

3 persons(See P91)

OutsideDirector

Review of the Senior Advisor and Honorary Advisor System
In May 2019, the senior advisor and honorary advisor system was amended
by resolution of the Board of Directors based on the results of deliberation by
the Nomination and Remuneration Advisory Committee. Henceforth, former
President and Chief Executive Officers and Chairmen of the Board of
Directors shall be appointed as special advisors with a fixed term instead ofsenior advisors or honorary advisors. Special advisors shall receive
compensation commensurate with their duties.

Management Council
Recognizing Management Council as Decision-making Body
In July 2015, the Management Council was reorganized to become thehighest executive level decision-making body, with the aim of enabling
decisions that take into account diverse opinions and multifaceted discussions
in regard to specific key matters related to management, within the scope ofthe mandate conferred by the Board of Directors.
The Management Council, which meets in principle once a week, consists of
the President and Chief Executive Officer, all chief officers of the Corporate
Group, and the general manager of each of the business units. In addition, inregard to specific issues that are extremely important from a companywide
perspective, the Company has established, as advisory bodies to the
President and Chief Executive Officer and to the Management Council,
committees such as the Company Investment Committee, the Medium-termManagement Plan Promotion Support Committee, the Internal Control
Committee, the Compliance Committee, and the Corporate Sustainability
Committee.

93Sustainability of
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Corporate Governance
SystemAudit & Supervisory Board Members and the Audit & Supervisory Board
Enhancement of auditing capabilities
The Audit & Supervisory Board comprises five members—two internal fulltime
corporate auditors and three external corporate auditors. The internal corporate
auditors are persons with a sincere character, deep insight, and high-level skills
as well as specialized business knowledge and a broad range of experience, andthey are appointed without regard for gender, nationality, and other s uch
characteristics. The external corporate auditors must also have a sincere
character, deep insight, and high-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. Two o f the external corporate auditors
are legal experts (one is a former prosecutor-general and the other former chiefjustice of the Osaka High Court) and one is a certified public accountant withconsiderable knowledge of finance and accounting. All of the external corporate
auditors satisfy the criteria on independence set by the Tokyo Stock Exchange aswell as the Standard for Independence established by Sumitomo Corporation.

Ensuring audit effectivenessThe corporate auditors attend meetings of the Board of Directors and otherimportant bodies, receive reports on the execution of duties from directors,
employees, and others, request explanations as necessary, review material
decision-making and other documents, and survey the status of business andresources at the Head Office and main offices. With respect to s ubsidiaries, thecorporate auditors communicate and exchange opinions subsidiary directors andcorporate auditors and receive business reports from subsidiaries as necessary.
The Audit & Supervisory Board Members' Administration Department (fouremployees) was established as a specialized organization to support the work of
the corporate auditors. The corporate auditors participate in personnel
evaluations and transfers and so o n regarding these employees to ensure their
independence from the Board of Directors.

Collaborat ion between
accounting auditors

theInternal

Auditing

Depart ment

andTo ensure audit efficiency, Audit & Supervisory Board Members interact closely with
the Internal Auditing Department, receiving reports on internal audit plans and theirresults in a timely manner. In addition, Audit & Supervisory Board Members
exchange information with and monitor the auditing activities of the accounting
auditors through regular meetings. By attending audit review meetings andobserving inventory audits with the accounting auditors, the Audit & Supervisory
Board Members constantly work to improve audit efficiency and quality. Furthermore,
Audit & Supervisory Board Members attend meetings of the Internal Control
Committee and request reports on the status of internal control systems from otherdepartments responsible for internal control, along with requiring their cooperation
on audits.

Training and information provision for Directors and Audit
Supervisory Board Members&

Training and information provision for Directors and Audit
Supervisory Board Members&

On taking office, Outside Directors and Outside Audit & Supervisory Board Members
have the opportunity to receive a briefing o n areas including the Sumitomo
Corporation Group’s Management Principles, management policy, business activities,
finances, organization, medium-term management plan, and risk management
system. To enable Directors and Audit & Supervisory Board Members to acquire thenecessary knowledge and update it as appropriate, we additionally supply books andother materials and provide access to other resources including seminars and e learning facilities, offering financial support to cover the necessary costs.
To deepen their understanding of Sumitomo’s Business Philosophy, Outside
Directors and Audit & Supervisory Board Members, in principle, visit a Sumitomorelated facility during the first fiscal year of their term of office. Outside Directors arealso given the opportunity to make an on-site observation visit to a facility in Japanand to an overseas facility at least once a year.

94

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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 and business activities,
the Company not only discloses statutorily required
information but also actively discloses information on a
voluntary basis.
Corporate Disclosure Policy

Measures Relating to the General Meeting of
Shareholders
We send out a Notice of Convocation to shareholders
approximately three weeks prior to each regularlyscheduled General Meeting of Shareholders. We also
post an English translation on our website prior to thesending of Notice of Convocation. Such early sending
and posting o f Notice of Convocation ensure sufficient
time for shareholders to thoroughly examine thepropositions to be resolved at the meeting. In addition,
we stream video of the General Meeting of
Shareholders on our website for a period of one year
after the close of the meeting. This year, the meeting
was live-streamed for those shareholders who wereunable to attend.
Ordinary General Meeting of Shareholders

Status of Compliance with the Japan's Corporate Governance Code
As of June 2020, the Company complies all Principles of the Corporate Governance Code. Please refer toCorporate Governance Report for details.
Corporate Governance Report

Policy on Cross-shareholdings and Standards for Exercising Voting Rights
The Company takes various considerations into account when making decisions about whether to holdshares in other listed companies for purposes other tha n pure investment. It fully considers issues such aswhether the shareholding will lead to medium- to long-term growth in profits as a result of maintaining
and strengthening the business relationship with the investee company, from the perspective ofinvestment profit, such as a comparison with the capital cost of individual stocks. Based on the above, theCompany reviews the significance of its shareholdings and reports the results thereof to the Board of
Directors each year. Where the significance of its shareholdings cannot be confirmed, the Company has apolicy of reducing the holding. The Company also takes various considerations into account under theinternal guidelines when making decisions in exercising its voting rights. Having fully considered issues
from both quantitative 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 atthe investee company and the Company and to enhanced value for its own shareholders. When acompany holding the Company’s stock for purposes other than pure investment indicates to dispose of its
holdings, the Company respects the decision in principle and ensures that their business relationship will
not be influenced.

Benefit Pension Plans
The Company has adopted a defined benefit corporate pension plan (contract type). The Company deploys
personnel with financial market and investment experience as investment managers and monitors theoperations of pension assets. When selecting an external asset manager, the Company makes appropriate
checks on its investment performance and management structure including governance and continues toperiodically monitor these during the investment management operations. Furthermore, the Pension
Management Committee, which is chaired by the Chief Administration Officer and composed of managers
in charge of human resources, finance and accounting organizations, verifies the investment performanceand the financial position of pension assets, makes reports to the Management Council and also discloses
them to the pension holders.

95Sustainability of
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Corporate Governance
SystemRemuneration of Directors and Audit & Supervisory Board Members
The details of the structure and level of remuneration and bonuses for Directors, aswell as the limits for remuneration of Audit & Supervisory Board Members, areevaluated by the Nomination and Remuneration Advisory Committee, an advisory bodyto the Board of Directors of which a majority of members are Outside Directors, andwhich is chaired by an Outside Director. The Committee reports the results of its
deliberations to the Board of Directors. In this way we strive to further improve thetransparency and objectivity of remuneration.
The specific composition and decision methods related to remuneration have been
established as follows.

Director Remuneration (Excluding that of t he Chairman of the Board of
Directors and Outside Directors)
The Company has formulated an executive remuneration system according to thefollowing basic policy to realize a plan with the aim of reinforcing our Group’s
governance and increasing our corporate value over the medium- to long-term, andpromoting the Company’s sustainable growth in line with our management strategy.

Remuneration Standards and Remuneration Composition Ratios of Executive
Directors and Executive Officers• The Company has established appropriate remuneration standards andremuneration composition ratios based on its business environment,
management strategy and human resources strategy, with reference toobjective remuneration market research data, etc. provided by external
specialized agencies such as the Willis Towers Watson “Executive
Compensation Database.”• The remuneration composition ratio for Executive Directors is set so thatwhen co nsolidated net income and basic profit cash flow are 300 billion
yen and the stock growth rate reaches 100% monthly remuneration,
performance-linked bonus and stock-based remuneration are 50:30:20,
respectively. The following is a visual representation of each performanceachievement scenario.

Basic Policy
•

•

•

•

In order to retain and acquire superior management personnel who will drive the Group’s
sustainable growth and increase its corporate value over the medium to long term, competitive
remuneration levels shall be established.
By appropriately setting the ratio of fixed remuneration (monthly remuneration) and variable
remuneration (performance-linked bonus which is linked to short-term results and share-based
remuneration (Restricted Stock-based remuneration and Performance Share Unit-based
remuneration) which is linked to medium- to long-term results and shareholder value), the plan
shall function as a robust incentive for achieving sustainable growth.
By focusing on the relationship between the Group’s management strategy and theperformance-linked bonus, the plan shall promote the execution of duties that coincide with its
management strategy and offer strong motivation for achieving specific business objectives.
By further focusing on the interrelationship with shareholder value regarding the stock
remuneration plan, further efforts shall be made to share value with shareholders while
promoting the optimization of business portfolios as well as the improvement of corporate value
over the medium to long term.

※”Stock growth rate”＝｛（Average price of Company’s common shares in the month of termination of Evaluation Period +Total amount of dividends during Evaluation Period）÷（Average price of Company’s common sharesin the month of commencement of Evaluation Period）｝
÷｛（Average of TOPIX in the month of termination of Evaluation Period) ÷（Average of TOPIX in themonth of commencement of Evaluation period）｝

Remuneration System for Executive

96

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Compliance
Policy and Concept

SystemBasic Compliance Policy

Compliance Management System

The basis for the Sumitomo Corporation Group's compliance is to win the trustof society by practicing the Activity Guideline that states “to comply with laws
and regulations while maintaining the highest ethical standards.”
Accordingly, we follow our principles of “Giving First Priority to Compliance,”
which means compliance takes priority over all activities of the Group and that
we must never violate compliance as a result of giving priority to the pursuitof profit, and “Reporting Compliance Issues Immediately,” which means, inthe event of a compliance problem, employees must report the situation
without delay to their line manager or to the relevant department of the
Corporate Group.

Aiming for more agile responses to compliance issues which arise in the Group,
Sumitomo Corporation appoints a Chief Compliance Officer (CCO), who has
ultimate responsibility for compliance. Further, the Compliance Committee,
which plans compliance measures, includes the general managers not only of
the Corporate Group but also of the business divisions, enabling it to examinesuch measures in a multifaceted way that reflects our actual business
operations.
Our Group will continuously aim to establish and improve the internal systems
that realize our principle of “Giving First Priority to Compliance.”

Sumitomo Corporation Group Compliance Policy
The Sumitomo Corporation Group Compliance Policy was developed in March
2019 based on the existing Compliance Guiding Principles to clarify and adopt
the basic policy above throughout the group. Educational programs, such as
seminars and e-learning, are being provided on a continuing basis with theaim of spreading and ensuring the adoption of the policy throughout thegroup. In addition, we have developed the compliance manual. We will
periodically review this manual for its effectiveness and relevance, and revise
its content as necessary.
Sumitomo Corporation Group Compliance Policy

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Compliance
SystemContinuous Improvement of the Speak-Up System
Our internal rules stipulate that any issues or potential issues in relation tocompliance must be reported immediately. Such issues include not only theviolation of antitrust/competition laws or anti-bribery/corruption laws but also
workplace misconduct, falsification of accounts, or harassment. If reporting
through the usual reporting line is difficult for some reason, we maintain a“Speak-Up System” available to officers and employees to report the issue tothe Chief Compliance Officer through an internal or external hotline.
Under the System, the fact and details of the report are maintained in thestrictest confidence, and it is ensured that the whistle-blower is not subject todisadvantageous treatment for making the report.
Efforts to encourage the use of the
System include seminars for officers andemployees as well as internal Q&A
support, which are designed to spreadtheinformation on
the Systemthroughout the company. Additionally,“Speak-UpCards” with an overview of
the System as well as the contact
details for the hotline are distributed toall officers and employees, and posters
are put up on all floors of our office topromote the use of the System.
Launch of the SC Global Speak-Up System
The group-based Speak-Up system, which enables officers and employees ofgroup companies both in and outside Japan to report compliance-related issues,
has also been developed and launched.

Activities
Appropriate Re sponse s to Compliance Violations and Preve ntive
MeasuresIn case of a compliance problem, the Company, primarily through the Legal
Dept. and Legal Compliance Dept. and in cooperation with relevant
departments in and outside of Japan, promptly takes steps to establish thefacts and clarify the causes of the incident, including the appointment of
external specialists when necessary. Based on the outcome, we takecorrective measures, disciplinary action, and preventive measures.
The Compliance Committee Secretariat keeps records of the details andnumber of cases occurring in the Group, and other information such asmeasures taken to prevent recurrence. These are evaluated and used to plan
future compliance measures. The results are deliberated at meetings of theCompliance Committee, and reports are made periodically to theManagement Council and the Board of Directors.
Through this process of repeatedly improving and enhancing such measures,
we strive to further encourage thorough compliance throughout the Group.

Continuous Education Program Initiatives
The Compliance Manual, which explains particularly important issues, suchas antitrust, security trade control, and anti-bribery/corruption, is distributed
to all officers and employees of Sumitomo Corporation.
Furthermore, both in Japan and overseas, we implement various education
programs for each class of employee, such as newcomers, newly appointed
general managers, and newly appointed corporate officers, as well as provide
e-learning programs for all employees. In addition to these regular activities,
we hold seminars and training sessions on an ongoing basis as required.

98

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Compliance
Activities
Anti-bribery/Corruption Initiatives
Based on the principle of “Giving First Priority to Compliance” and as
stipulated in the Sumitomo Corporation Group Compliance Policy, the Group
implements strict measures to prevent all forms of corruption. Specifically,
we have established the Rules for Prevention of Bribery of Public Officials,
which regulate the provision of entertainment, gifts, invitations, anddonations to domestic and foreign public officials as well as the selection ofservice providers (such as
agents, consultants or other businessintermediaries), and conduct required internal review. In addition, taking
into account revisions to the laws and regulations of each country, andadvice from various external specialists, we continuously review our internal
rules and guidelines. Further, we extend these rules and guidelines tooverseas offices and Group companies and encourage them to establish andimplement a system that takes into account the bribery risk level of eachcompany, and we also offer ongoing employee education and work
constantly to prevent bribery and corruption.
In 2017, we announced the Sumitomo Corporation Group Anti-Corruption
Policy, which summarizes the Group’s principles and policies in this regard.
This Policy includes the following statement. “The Sumitomo Corporation
Group will not commit bribery or conduct any activity raising the suspicionof bribing Japanese government or other public officials; and will as aprinciple 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 the payment of any money oranything of value to any foreign government or other public official, for the
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 ofbribery to our business partners including service providers, and request
their understanding and cooperation.

Measure s for Ensuring Compliance wit h Laws Concerning Antitrustand Fair Competition
We stipulate fair competition in the Sumitomo Corporation Group Compliance
Policy and our policy for compliance with laws concerning antitrust in the
Compliance Manual. We have also published a separate manual concerning
antitrust/competition laws for our officers and employees that stipulates key
considerations in daily dealings. Additionally, we endeavor to ensure that
antitrust/competition laws are observed by measures such as regularly holding
internal training.
Security Trade Control and Logistics Compliance
As an integrated trading company, Sumitomo Corporation regularly implements
various measures to ensure that we comply with treaties and internationalframeworks related to international trade, as well as Japanese laws andregulations 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 tomilitary use from falling into the hands of states or non-state organizations(terrorists) which may develop weapons of mass destruction. We also provide
internal rules, manuals, and guidelines, hold training sessions, and instruct andmonitor as needed to ensure compliance with 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 businessactivities as well as personal dealings by officers and employees, our company
has established “Rules for Prevention of Insider Trading” as well as internal
checking systems from various perspectives. To ensure compliance with insider
trading regulations as well as internal rules, we also continuously provide
internal training courses and other activities to raise awareness. In 2019, we
held an internal training program for officers and employees of our company toremind the importance of appropriately managing insider information at eachorganization.

99

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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 and business models in various regions of the world and its businessactivities have a variety of impacts on the global environment and on
different stakeholders such as local communities, business partners, and ourofficers and employees. To achieve sustainable growth together with society,we work to control the social and environmental impacts of each business of
the Group, and, by monitoring its entire supply chain, to ensure that the
impact of the associated business activities is not a threat to people’s lives or
the global environment and does not constrict the sustainability of ourmanagement.
As the basis for these initiatives, we have established Environmental Policy,
Human Rights Policy and CSR Action Guidelines for Supply Chain
Management to clarify our approach to social and environmental issues in theGroup’s business operation.
Because the impact of each business on society and the environment and thenature 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 to the specific character of the business.
Specifically, for each of our businesses, we obtain the relevant 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 communication channels with local communities, employees,
and other stakeholders, and check not only that the business is legallycompliant across the range of social and environmental issues but also thatits response in the area complies with international standards on theenvironment and human rights.
Within the Sumitomo Corporation Group and its diverse range of businesses,
the responsible business department of individual businesses and the related
corporate departments are working jointly to raise the standard of social andenvironmental risk management groupwide, utilizing the knowledge ofoutside experts.

Variety of sou r ces lead in g to social an d en vir on men tal r isks
• Climate change • Biodiversity• Pollution• Resource depletion• Local residents’ human rights •Employees’ human rights (Health and safety, Forcedlabor, Child labor, Discrimination)

C ompany w ide policie s•E n v ir onmental Policy•Human Rights Policy•C S R Ac tion G uidelines for S u pply C h ain Man agemen t

Risk manage me nt in line w it h busine ss
attribute s and condit ions•Rec ogn ition of r isk s f ac ed•C om m u nication with r elevant stakeholders•Asc er tainment of f ac ts•Respon se based on legal c ompliance an d alignment
with international stan dar ds

Busine ss unit s

Appropriate risk management

Corporat e group

Support in specialized areas

External consult ant s
Provision of expertise100

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Social and Environmental Risk Management
Framework for Social and Environmental Risk Management
The Sumitomo Corporation Group has put in place a companywide framework to apply when starting new businesses, including review and periodic monitoring,in order to appropriately manage the social and environmental impacts from the overall activities of the Group with its wide-ranging business portfolio.
When implementing due diligence on a new investment, based on the nature of the business, we carry out an environmental assessment through anenvironmental consultant and an assessment of human rights and labor issues through a law firm or similar. By taking these steps, we ensure that the business
is operating on a sound basis and that the business activities are not seriously impacting the global environment or local communities, employees, and otherstakeholders. In April 2020, in order to enhance the effectiveness of risk management for each business, taking into account the nature of the business and thecharacteristics of the region where it operates, we established a system that considers social and environmental impacts when making decision on a newinvestment, by utilizing an assessment sheet for social and environmental risks and by having the Corporate Sustainability Department, a specialized organization
for social and environmental issues, participate in deliberations according to the risk. After the investment, we confirm the status of social and environmental risk
management through processes such as periodical monitoring by dialogue with the group companies and internal audits , and if any issues arise, we work for
improvements according to the characteristicsof the business. When issues are pointed out by
local residents, nongovernmental organizations(NGOs), or other stakeholders regarding theimpact of the Sumitomo Corporation Group’sbusiness activities, we ascertain the facts andrespond by planning and implementing
corresponding improvements through dialogue
and discussion with them. In addition, following
the review and monitoring of new investments
outlined above, the response to any significant
social or environmental issues in individual
cases is referred for further discussion andreported to the Management Council and theBoard of Directors through the related
committees. Under the oversight of the Boardof Directors, we work to address social andenvironmental risks and strengthen our risk
management system.

101

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Information Security
Policy and Concept

SystemThe Company acknowledges the importance of ens uring information security, andmaintains appropriate measures including, but not limited to, the establishment

The information managers in each organization categorize information assets
based on their importance, give instructions for procedures and methods in orderand maintenance of relevant rules, primarily through the Information Security

to handle these assets adequately, and work to ensure information security,

Committee, which is chaired by the Chief Information Officer (CIO). In October
2017, a new Information Security Policy was established.

efficient information-related administrative procedures, and information sharing.
For personal information, in addition to establishing a Privacy Policy to protect

Information Security Policy
1. Recognition of Information Security

Sumitom o C orporation acknowledges the im portance of en suring information
security, and wishes to furth er enhance the com pany's tru stworthin ess in its
business operations. Theref ore, Sumitom o C orporation shall im plemen tappr opr iate measur es inclu ding, bu t not limited to, the establishm ent an dmaintenance of relevant rules an d guidelines so as to responsibly man age
information assets on a con solidated basis globally and shall r eview them regular ly.

2. Compliancethis as appropriate, we have put in placestructures.

relevant rules and organizational

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 system-based safeguards,
we conduct ongoing training and drills for employees while establishing andmonitoring systems at major subsidiaries and other group entities. The Company
also coordinates with specialized third-party organizations to stay up-to-date on
relevant information and to enable swift and appropriate responses.

Sumitom o C orporation sh all c omply with any applic able local, regional, national
and international laws and regulations in relation to information security.

3. Management of Information Assets

Sumitom o C orporation sh all preserve conf identiality, in tegrity an d av ailability
through respon sibly managin g all inf ormation assets inclu ding personal data, an dshall tak e all r eason able pr ecaution s in order to prevent unapprov ed disclosur e,loss or impairment of such data.

4. Response to Information Security Incidents

Whilst m akin g the u tmost en deav or to pr ev ent inform ation security incidents fr om
occurring, in the unlik ely ev ent such an incident should occur, Sumitom o
Cor por ation shall r espon d prom ptly to the inciden t and im plemen t whatev er
preventive measures are necessary to avoid recurrence.

5. Awareness Education of Information Security

Sumitom o Cor poration sh all regularly promote an d maintain the pr ovision of
information security education including, bu t not lim ited to, further heigh tenin g
the awareness of the importance of responsibly managing information assets.

Privacy policy

102

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Stakeholder Engagement
Relationships with Stakeholders

IR/SR Activities

The Sumitomo Corporation Group places importa nce o n dialogue with various
stakeholders a round us . To build a relations hip o f t rust with each stake holder,we proactively provide information o n our activities a nd ens ure continuous
communication with t hem. Through t hese efforts , the Gro up keeps informe d ofstakeholders' expectations a nd co ncerns, based on which we will promote oursustainability and improve our long-term value.

We facilitate direct communication with shareholders and other investors, inaddition to enhancing disclosure on our website. An executive officer withresponsibility for dialogue with shareholders and other investors exercises
overall control of and coordinates such IR initiatives shown below. Also,
related in-house departments contribute to IR initiatives by distributing
information and collecting feedback from shareholders and other investors.
Going forward, the Company will continue to increase the transparency of its
management, implementing fair disclosure at all times, integrating financial
and non-financial information, and strengthening relationships of trust withshareholders and investors by displaying initiatives to increase the corporate
value of the Sumitomo Corporation Group over the medium to long term.

Shareholder/investors

Localcommunities

Business
partners

Financial
institutions
Sumitomo
Corporation
Group
Customers/
consumers

Government
agencies/ economic
organizations

NGOs/NPOs

Employees

Stakeholders

Major means of dialogue

Stakeholders/investors
Financial institutions

General meeting of shareholders, Investor meeting for annual results,
Investor Day, integrated report, annual securities report, business
report for shareholders, website, reporting to credit rating agencies, etc.

Government
agencies/economic
organizations

Communication with government agencies and internationalorganizations in Japan and abroad, participation in discussion meetings
and round-table conferences with government offices, activities throughbusiness and industrial associations, etc.

Local communities

Dialogue with local residents in business activities and support forcommunities, social contribution activities, etc.

Business partners
Customers/consumers

Integrated report, website, advertisements, customer information office,supply chain survey, etc.

NGOs/NPOs

Cooperation and communication with NGOs and NPOs in businessactivities, cooperation in social contribution activities, responses tosurveys, etc.

Employees（IR: Investor Relations SR: Shareholder Relations）

Internal magazine, Intranet, training sessions and seminars,
labor/management round-table meeting, employee awareness survey,
the speak-up system, etc.

Number of individual meetings with institutional investors in FY2019
Overseas

Japan
188

EuropeAsia

The Americas

Total

35

21

20

66

Number of participants in briefing meetings for individual investors in FY2019
Japan（9 locations in 7 cities）

Online

1,294

1,004

103

Sustainability of
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ESG Quantitative Data
Environment (Climate change)
Item
CO2 Emissions（※2）

Scope（※1）
Non-consolidated
Consolidated(Components) Scope1

Unit

Head office, regional offices,branches and sub-branches in Japan and overseas
Non-consolidated, Domestic and overseas consolidated subsidiaries

t-CO2eScope2
Intensity（per 1㎡）
CO2 Emissions（Scope3）（※3）

Head office, regional offices, branches and sub-branches in Japan

t-CO2e/㎡

Logistics
Waste

FY2016FY2017FY2019FY2018

5,190

4,926

4,148

3,233

317,727

1,686,654

1,569,759

1,474,885

64,859934,276

939,346

791,730

252,869

752,378

630,412683,156

0.066

0.062

0.06

0.051

7,420

7,803

5,216

5,501

11

6

6

15

26,51828,56930,232

22,400

751

709

636

609

Downstream Leased Assets

35,14836,89435,23033,662

Total

69,84873,98071,32062,187

Overseas Business Trips
Commuting

Head office, regional offices, branches and sub-branches in Japan

t-CO2e・We couldn‘t collect the environmental data for 38 sites due to COVID-19 lockdown or working from home in FY2019. In FY2018, CO2 emissions of these sites were equivalent to about 5.2% of the total CO2 emissions.
・CO2 emissions (the above Scope1, 2 and Scope3) were 1,760,634t-CO2e/1,641,079t-C O2e/ 1,537,072t-CO2e in FY2017, FY2018, and FY2019 respectively.
・In FY2018 and FY2019, we surveyed non-consolidated and consolidated subsidiaries in Japan, and Scope1 emissions from 6.5 gases were both 0t-CO2e. The scope for 6.5 gases is that group companies emit more than 3,000 t-CO2e per year
under the Greenhouse Gas Emissions Accounting, Reporting, and Disclosure System in Japan.
The boundary is as of the end of March of the reporting period. The detailed boundary of each data are as follows.
（※1）[CO2 emissions (Scope1＜excluding 6.5 gases＞, Scope2), Electricity consumption] FY2016—Non-consolidated, Direct consolidated subsidiaries/all sites, from FY2017—Non-consolidated, Consolidated subsidiaries/all sites[CO2 emissions (Scope1 ＜6.5 gases only＞)] Non-consolidated, Consolidated subsidiaries in Japan[CO2 emissions (Scope3)] Non-consolidated in Japan
CO2 emission factors for electricity:（※2）(Non-consolidated in Japan)：The basic emission coefficients of individual power companies.
(Consolidated subsidiaries in Japan)：The average emission coefficient of all power companies.

(Overseas)（※3）：Emission factors from electricity generation are based on the country-specific data in 2013 listed on “CO2 EMISSIONS FROM FUEL COMBUSTION 2016 EDITION”, an IEA (International Energy
Agency) statistics.
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 the Environment and Ministry of Economy,
Trade and Industry.

CO2 emissions (Scope 3) are calculated and tabulated as follows:・Logistics：CO2 emissions from logistics 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.
：CO2 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 for FY2019 were calculated using the emission intensity for each type of waste, which is published in the emission intensity database (Ver. 3.0) for calculating greenhouse gas emissions andother emissions by organizations throughout the supply chain.
・Overseas business trips：CO2 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 and passenger-kilometers are estimated based on the travel distance between Japan and representative airport of each area.
・Commuting：CO2 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 by transport mode published in the Ministry of Land, Infrastructure, Transport and Tourism publication "CO2 Emissions in the Transport Sector.
・Downstream leased assets ：CO2 emissions from downstream leased assets are calculated based on the energy consumption of 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.
・Waste104

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Environment (Climate change)
Item
Energy Consumption（※2）

Electricity Consumption

Scope（※1）

Non-consolidated

Head office, regional offices, branches and sub-branches
in Japan and overseas

Consolidated

Non-consolidated, Domestic and overseas consolidated subsidiaries

Intensity（per ㎡）

Head office, regional offices, branches and sub-branches in Japan

Non-consolidated

Head office, regional offices, branches and sub-branches
in Japan and overseas

Consolidated

Non-consolidated, Domestic and overseas consolidated subsidiaries

Intensity（per ㎡）

Head office, regional offices, branches and sub-branches in Japan

Unit
GJ

FY2016FY2018FY201948,472

49,904

42,6352,751,000

18,097,583

17,748,255

17,062,311

0.663

0.611

0.761

0.756

8,134

7,536

5,773

4,526

464,3031,535,347

1,412,661

1,534,809

0.105

0.098

0.082

0.070

GJ/㎡
MWh

FY201750,693MWh/㎡

・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.
Electricity consumption of these sites were equivalent to about 7.1% of the total electricity consumption.
・The amount of electricity consumption which generated from renewable energy was 112,045MWh in FY2019.
（※1）
Energy and electricity consumption in FY2016 are those of non-consolidated and direct consolidated subsidiaries/all sites, and from FY2017 are those of non-consolidated and consolidated subsidiaries/all sites. The boundary is as ofthe end of March of the reporting period.
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.
（※2）

Environment（Water）
Water Consumption（Components ofWater Source）

Item
Non-consolidated
Consolidated

Non-consolidated, Domestic and overseas consolidated subsidiaries

Intensity（per employee）

Head office, regional offices, branches and sub-branches in Japan

Unit
m³
m³
/employee

FY201625,463
185,944

FY2017FY2018FY201913,897

11,777130,821,214 118,235,911

20,143,772

21,609

3.525

3.420

―

―

3,378,261

4,206,078――

110,100,910

13,007,683――

4,756,698

2,929,981

Ocean

―

―

0

0

Rainwater

―

―

42

30

Third-party sources
Groundwater
Non-consolidated, Domestic and overseas consolidated subsidiaries

Rivers, Lakes

Water consumption inwater-stressed areas

Scope（※1）
Head office, regional offices, branches and sub-branches in Japanand overseas

Number of sites
Water consumption（components）Third-party sources
Groundwater

Water Discharge（Sewer）（※2）

m³

site
Non-consolidated, Domestic and overseas consolidated subsidiaries
Head office, regional offices, branches and sub-branches in Japanand overseas

m³
m³

5.54

4.883

―

―

―

74

―

―

―

366,026
366,026

―

―

―

―

―

―

25,463

21,60913,897・We couldn't collect the environmental data 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 consumption.
The above figures in FY2017 and FY2018 were excessive due to incorrect aggregation for several sites. Water consumption of those sites in FY2018 were equivalent to about 32.6% of the total water consumption.
・From FY2019, water consumption in water-stressed areas was calculated based in the water risk level of 3 (High) or higher based on the World Resources Institute (WRI)'s "WRI Aqueduct“.
The water consumption up to FY2016 are those of non-consolidated and direct consolidated subsidiaries/office only, and from FY2017 are those of non-consolidated, and consolidated subsidiaries/all sites.
（※1）
The boundary is as of the end of March of the reporting period.
（※2）
Since all sites are discharged into the sewer, the water discharge is equivalent to the amount of water consumption.

0
11,777105

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ESG Quantitative Data
Environment（Resources and waste）
Item
Waste Emissions（※2）

Scope（※1）
Head office, regional offices,branches and sub-branches in Japan and overseas
Non-consolidated, Domestic and overseas consolidated
subsidiaries
Head office, regional offices, branches and subbranches in Japan

Non-consolidated
Consolidated
Intensity（per employee）

Unit

Paper Consumption

191

190

123

44,38133,305

0.081

0.043

0.048

0.036

311

168

175

117

14

2

6

6

95.8

98.8

96.5

95.0

4.84

3.32

1.08

7.01

0

0

0

0

1,000 sheets

25,681

22,28018,604

14,516

1,000
sheets/employee

6.451

5.604

4.944

4.446

t/employeet%Non-consolidated
Intensity（per employee）

Head office, regional offices, branches and subbranches in Japan
Head office, regional offices, branches and subbranches in Japan
Head office, regional offices, branches and subbranches in Japan

FY201946,196

Recycle Ratio

Air Pollutant Emissions（NOx：nitrogen oxide, SOx：sulfur oxide, VOC：volatile organic compound）

FY2018342

Head office, regional offices, branches and subbranches in Japan

Hazardous Waste Emissions

FY20171,433t

Recycled Waste Emissions
Non-recycled Waste Emissions（final waste disposal volume）

FY2016t・We couldn't collect the environmental data 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 thetotal waste emissions.
（※1）

The waste emissions for FY2016 are those of non-consolidated and direct consolidated subsidiaries/office only, and from FY2017 are those of non-consolidated and consolidated
subsidiaries/all sites. The boundary is as of the end of March of the reporting period.

（※2）

The above figures for Japan include general waste but exclude industrial waste and valuable resource.

Environment（Others）
Item
Percentage of sites covered by
ISO14001

Non-consolidated in Japan
Consolidated

Violations of environmental laws
and regulations(penalties of one million yen or
more, etc.)

Number of caseAmount of penalties

Scope

Unit

Head Office, regional offices, branches and sub-branches
in Japan

%

100

100

100

100

Non-consolidated, Domestic and overseas consolidated subsidiaries

%

-

-

-

19

case

0

0

0

0

yen

0

0

0

0

Head Office, regional offices, branches and sub-branches
in Japan

FY2016FY2017FY2018FY2019106

Sustainability of
Sumitomo
Corporation GroupFeatureEnvironment

SocialESG Quantitative
Data

Governance

Third-party
Assessment

ESG Quantitative Data
Society (Personnel data)
Item

Scope

Number of employees

FY2016FY2017FY2018FY201970,90073,016

65,662

72,642

20,313

20,46525,61925,70027,604

4,039

3,984

3,907

3,910

3,973

1,165

1,178

1,184

1,216

1,270

Total

5,204

5,162

5,091

5,126

5,207

Male

108

102

107

104

118

51

50

58

91

Consolidated

personMale
FemaleNumber of new employees

FY201566,860

Number of temporary employees
Number of employees [Male/Female]

Unit

Non-consolidated

personNon-consolidated

person

47
155

153

157

162

209

Ratio of female new employees

Non-consolidated

%

30.3

33.3

31.8

35.8

43.5

Ratio of non-fulltime employees, such as contract and temporary employees（※1）

Non-consolidated

％

6.6

6.4

6.4

7.2

7.5

5

8

7

35

27

Non-consolidated

person

2

0

1

2

5

7

8

8

37

32

FemaleTotal

Number of mid-career employees

MaleFemaleTotal

Employment rate of disabled persons
Number of managers

Non-consolidated

%

Male

2.14

2.11

2.21

2.24

2.24

2,611

2,633

2,599

2,549

2,585

143

153

169

186

Non-consolidated

person

107
2,718

2,776

2,752

2,763

2,771

Ratio of female Managers

Non-consolidated

%

3.94%

5.15%

5.60%

6.60%

6.71

Ratio of employees who are covered by a collective bargaining agreement

Non-consolidated

%

56.5

56.4

57.6

59.1

59

19.3

19.1

19

18.8

18.7

Non-consolidated

year/person

15.6

15.8

16.1

16

15.6

18.4

18.3

18.3

18.2

18

1.6

2.3

2.3

1.8

1.8

3

2.7

2.6

2.3

2.4

1.9

2.4

2.4

1.9

2.1

1.9

2.4

2.4

1.9

1.9

FemaleTotal

Average length of service (years)

Male
FemaleOverall mean

Turnover rate of full-time employees

MaleFemaleNon-consolidated

%

Total
Voluntary turnover rate (Compared to the number of employees of theprevious year)

Non-consolidated%（※1） The calculation method has been changed since FY2018, and the past year has also been reclassified.

107

Sustainability of
Sumitomo
Corporation GroupFeatureEnvironment

SocialESG Quantitative
Data

Governance

Third-party
Assessment

ESG Quantitative Data
Society (Work styles)
Item

Scope

Unit

FY2015FY2016FY2017FY2018FY2019

9 hours 12 minutes

9 hours 53 minutes

7 hours 47 minutes

Average monthly overtime hours

Non-consolidated

Average annual days of paid vacation acquired（※1）

Non-consolidated

day

12.7

15.1

16.8

16.9

17.1

Spouse maternity leaveNon-consolidated

case

80

76

74

90

92

Leave to look after a sick child

Non-consolidated

case

161

200

215

237

225

Number of employees who took family care leaveNon-consolidated

person

0

0

1

0

1

Number of employees who took maternity leaveNon-consolidated

person

57

71

79

71

73

184

192

158

181

179

49

49

66

71

57

Total

233

241

224

252

236

Male

2

5

2

10

9

49

49

66

71

56

Total

51

54

68

81

65

Male

2

5

0

10

9

35

49

36

54

64

Total

37

54

36

64

73

Male

100

100

ー

100

100

97.2

90.7

92.3

100

95.6

97.4

91.5

92.3

100

96.1

Number of employees eligible for child care
leave

Male
FemaleNumber of employees who took child care
leave

FemaleNumber of employees who returned to work
after taking child care leave

FemaleRatio of employees who returned to work
after taking child care leave

hours/minutes 12 hours 41 minutes 11 hours 50 minutes

FemaleNon-consolidated

Non-consolidated

Non-consolidated

Non-consolidated

personpersonperson%Total
Number of individuals using shortened work hour system

Non-consolidated

person

99

121

129

136

165

Number of cases of violations of the Labor standards Act

Non-consolidated

case

2

4

1

3

3

（※1） The calculation method has been changed since FY2018, and the past year has also been reclassified.

108

Sustainability of
Sumitomo
Corporation GroupFeatureEnvironment

SocialESG Quantitative
Data

Governance

Third-party
Assessment

ESG Quantitative Data
Society (Occupational safety and health)
Item

Scope

Unit

FY2015FY2016FY2017FY2018FY2019Number of occupational accidents

Employees (full-time)Non-consolidated

person

3

1

2

1

3

Number of deaths by occupational accidents

Employees

Non-consolidated

person

0

0

0

0

0

Number who suffered Lost Time Incidents (LTI)

Employees (full-time)Non-consolidated

cases

3

1

2

1

3

LTIFR (Lost Time Injury Frequency Rate)

Employees (full-time)Non-consolidated

%

0.29

0.10

0.20

0.10

0.29

Scope

Unit

Society (Human resources development)
Item
Ability development training

Total number of lectures
Number of employees participating in
training
Total hours of training received

Non-consolidated

FY2016FY2017FY2018FY2019session

320

321

326

340

286

person12,351

11,868

11,818

14,646

14,963

54,951

59,71862,96775,08965,652

10.6

11.6

12.4

14.7

12.7

hour

Average hours per employee

FY2015

Number of employees dispatched overseas

Non-consolidated

person

1,099

1,112

1,101

1,153

1,144

Number of employees undergoing training overseas

Non-consolidated

person

97

82

94

96

67

Annual education and training cost per employee

Non-consolidated

yen

531,706

518,882

478,884

555,403

501,830

Scope

Unit

Consolidated

million yen

Non-consolidated

personSociety (Social contribution)
Item
Expenditure for social contribution activities
Number of employees who used the volunteer leave program

FY2015FY2016FY2017FY2018FY2019

1,130

1,549

1,556

1,528

1,980

4

3

3

7

12

109

Sustainability of
Sumitomo
Corporation GroupFeatureEnvironment

SocialESG Quantitative
Data

Governance

Third-party
Assessment

ESG Quantitative Data
Governance (Board of Directors, Audit & Supervisory Board, Advisory Committee)
Item
Number of Directors（※1）

Inside directors

Independent outside directors

Scope

Unit

FY2015FY2016FY2017FY2018FY2019

Male

10

10

6

6

6

Female

0

0

0

0

0

Total

10

10

6

6

6

2

3

2

3

3

1

1

1

2

1

3

4

3

5

4

personMale
FemaleNon-consolidated

Total

13

14

9

11

10

Ratio of female Directors（※1）

Total
%

8

7

11

18

10

Number of Board of Directors meetings

time

17

18

21

20

16

Male

2

2

2

2

2

Female

0

0

0

0

0

Total

2

2

2

2

2

Male

3

3

3

3

3

0

0

0

0

0

3

3

3

3

3

5

5

5

5

5

1

1

1

1

1

Number of Audit & Supervisory（※1）

Inside Audit & Supervisory board
members

Independent outside Audit &Supervisory Board members

FemaleNon-consolidated

person

Total
Total
Number of outside Audit & Supervisory Board members with expertise in financial
affairs and accounting（※1）
Number of Audit & Supervisory Board meetings
Nomination and Remuneration Advisory
Committee（※1）

Inside members

Independent outside members

16

15

14

17

15

Male

2

2

2

2

2

Female

0

0

0

0

0

Total

2

2

2

2

2

2

2

2

2

2

1

1

1

1

1

3

3

3

3

3

5

5

5

5

5

time

personMale
FemaleNon-consolidated

Total
Total
Ratio of outside directors in the Nomination and Remuneration Advisory Committee（※1）

%

60

60

60

60

60

Number of Nomination and Remuneration Advisory Committee meetings

time

2

5

6

7

5

（※1） Figures at the end of June of each fiscal year

110

Sustainability of
Sumitomo
Corporation GroupFeatureEnvironment

SocialESG Quantitative
Data

Governance

Third-party
Assessment

ESG Quantitative Data
Governance (Remuneration)
Item
Remuneration of Directors

Directors(Excluding outside directors)

Scope

FY2017FY2018FY2019

530

480

474

Bonus for Directors

67

149

174

327

194

Stock options

90

79

64

14

―

―

―

―

73

92

―

―

―

66

70

Total

843

895

769

959

831

Monthly remuneration

34

47

41

67

65

Total

34

47

41

67

65

87

86

86

87

87

87

86

86

87

87

35

34

38

38

38

35

34

38

38

38

Inside Audit & Supervisory Board members Monthly remuneration(Excluding Outside Audit & Supervisory
Board members)
Total
Outside Audit & Supervisory Board members Monthly remuneration

Nonmillion yen
consolidated

Nonmillion yen
consolidated

Total
Audit fees (KPMG AZSA LLC)

FY2016667

Restricted stock-based compensation

Remuneration of Audit & Supervisory
Board members

FY2015686

Performance share unit-based stockcompensation
Outside directors

Unit

Monthly remuneration

Fees for auditing services

Nonconsolidated
Total

Fees for non-auditing services

499

493

495

492

520

1,074

1,058

1,003

1,032

537

Nonmillion yen
consolidated
Consolidated
subsidiaries
Total

6

5

18

13

1,057

24

24

41

57

16

30

29

59

70

83

Governance (Compliance)
Item
Compliance-related seminars and othertraining programs
Of the above, seminars and other training
programs related to anti-bribery and anticorruption

Scope
Number of times
Number of participants
Number of times
Number of participants

Head Office ordomestic/overseas corporations
（※2）

Unit
time
personFY2017（※1）≥ 190 times

FY2018（※1）≥ 180 times

FY2019（※1）≥ 270 times

Total of ≥ 14,570 persons Total of ≥ 11,710 persons Total of ≥ 19,160 persons

time≥ 70 times≥ 70 times≥ 80 times

personTotal of ≥ 2,710 persons

Total of ≥ 2,580 persons

Total of ≥ 3,100 persons（※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.

111

Sustainability of
Sumitomo
Corporation GroupFeatureEnvironment

SocialGovernance

ESG Quantitative
Data

Third-party
Assessment

Third-party Assessment
Assessment organizations
FTSE4Good Index Series / FTSE Blossom Japan Index

SOMPO Sustainability Index

We were selected as a constituent of FTSE4Good Index Series and FTSE
Blossom Japan Index. Published by FTSE Russell, an investment index
calculator, FTSE4Good Index Series consists of companies with strong
Environment, Social and Governance (ESG) practices. FTSE Blossom
Japan Index, which is also provided
provided by FTSE Russell, measures
theperformanceofJapanesecompanies in terms of ESG practices.
It has also been adopted by theGovernment Pension Investment
Fund (GPIF) as an effective index for
ESG investment.

We were selected in the SOMPO Sustainability Index
managed by SOMPO Asset Management Co., Ltd.
(“SOMPO Asset Management”) (As of June 2020)
The SOMPO Sustainable Management, launched by
SOMPO Asset Management in August 2012, is asocially responsible investment funds for pension
trusts and institutional investors that invest broadly
in companies having a strong positive evaluation for
ESG performance.

MSCI: MSCI Japan Empowering Women Index (WIN)
Sumitomo Corporation is listed as a constituent of the MSCI Japan
Empowering Women Index (WIN), one of the environmental, social andgovernance (ESG) indices selected by the Government Pension
Investment Fund (GPIF).
This is an ESG index consistingof companies with high gender
diversity selected by MSCI USA.
S&P/JPX Carbon Efficient Index

CDP
In 2020, we were evaluated B (management level)in the Climate Change program, A (leadership level)in the Water Security program and A- (leadershiplevel) in the Forests program by the CDP.
Zero-Emissions Challenge
In October 2020, We were included in a “List ofCompanies Taking on the Zero-Emission Challenge”
published by METI as a company that is paving theway to realization of a decarbonized society by taking
advantage of innovations.

We were selected in S&P/JPX Carbon Efficient Index, a global
environmental stock index created by S&P Dow Jones Indices in the
United States. (As of March 2019)
It is adopted by the Government Pension Investment Fund (GPIF) as aneffective index for ESG investment.

112

Sustainability of
Sumitomo
Corporation GroupFeatureEnvironment

SocialESG Quantitative
Data

Governance

Third-party
Assessment

Third-party Assessment
Assessment organizations"Eruboshi" certification
In May 2016, we were certified as a second-highest class"Eruboshi" company in recognition of the effort to promote theactive involvement of female employees on the basis of the Act
on Promotion of Women's Participation and Advancement in
the Workplace.

Telework Pioneer 100
We were selected for inclusion in the Top Hundred
Telework Pioneers for FY2019 by the Ministry of Internal
Affairs and Communications (MIC). Through Top Hundred
Telework Pioneers, MIC recognizes companies andorganizations

withsufficientachievements

that

are

advancing the introduction and utilization of telecommuting.
"Platinum Kurumin" as a company that provides superiorchildcare support
We were granted "Platinum Kurumin" certification in June

Sumitomo

Corporation

Selected

asaDigital2015 by the Ministry of Health, Labor and Welfare (MHLW) in
recognition of providing superior childcare support among theTransformation Stock (DX Stock) 2020

"Kurumin" certified companies.

Transformation Stock (DX Stock) 2020 by the Ministry of
Economy, Trade and Industry (METI) and the Tokyo Stock

Reforming and Diversifying Work Practices
We were certified by METI as a “White 500” enterprise withoutstanding health and productivity management for 4
consecutive years (2017, 2018, 2019, 2020).

Sumitomo Corporation has been selected as a Digital

Exchange (TSE). The DX Stock program aims to recognize
companies that have dramatically reformed their businessmodels through the use of digital technology in order toachieve new growth and enhance competitiveness.
Sumitomo Corporation has been highly evaluated for our
extensive efforts toward the digital age and for the deep

Certified as a “Bronze” in “PRIDE INDEX”

penetration of DX into our corporate culture.

In October 2019, we were certified as a “Bronze” in “PRIDEINDEX” in recognition of the effort to support sexual minorities
including LGBT by a private organization “work with Pride”.

113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
 Environmental Policy
https://www.sumitomocorp.com/en/jp/sustainability/environment-policy Policy on climate change
https://www.sumitomocorp.com/en/jp/sustainability/environmentalmanagement/climate

 ISO 14001 Management System Certification
https://www.sumitomocorp.com/en/jp/sustainability/environment-policy#03

Social CSR Initiatives for Supply Chain Management
https://www.sumitomocorp.com/en/jp/sustainability/csr

 Human Rights Policy
https://www.sumitomocorp.com/en/jp/sustainability/csr#02

 Support for the UN Global Compact’s 10 Principles
https://www.sumitomocorp.com/en/jp/sustainability/initiative Basic Principles on Social Contribution Activities
https://www.sumitomocorp.com/en/jp/sustainability/contribution

Governance Corporate Governance Principles
https://www.sumitomocorp.com/en/jp/about/governance/detail Sumitomo Corporation Group Tax Principles (PDF/69.3KB)
 https://www.sumitomocorp.com/jp//media/Files/hq/sustainability/material-i ssu es/tax-principles-j.pdf?la=en Sumitomo Corporation Group Compliance Policy
https://www.sumitomocorp.com/en/jp/about/governance/compliance/policy Information Security Policy
https://www.sumitomocorp.com/en/jp/security

 Privacy Policy
https://www.sumitomocorp.com/en/jp/privacy

 Sumitomo Corporation Group Anti-Corruption Policy (PDF/270KB)
https://www.sumitomocorp.com/jp//media/Files/hq/about/governance/compliance/anti-corruption-policy.pdf?la=en Corporate Disclosure Policy
https://www.sumitomocorp.com/en/jp/about/governance/detail/disclosurepolicy

 Risk Management Basic Policy
https://www.sumitomocorp.com/en/jp/about/governance/risk

114