ESG Communication Book

2021
Ver. 2© 2021 Sumitomo Corporation

0ESG Communication Book
Contents
 Editorial policy

・・・・・・・・・・・・・・・・・・・・・・・2

 Top message

・・・・・・・・・・・・・・・・・・・・・・・3

 Sustainability of Sumitomo Corporation group ・・・・・・・・・・・・・・・4

 Social

・・・・・・・・・・・・・・・・・・・・・・・ 60
・・・・・・・・・・・・・・・・・・ 60

Human rights

Work health and safety / Health and productivity management ・・・・ 66
Human resources management

・・・・・・・・・・・・・・・・・・・76

Supply chain

・・・・・・・・・・・・・・・・・・・92

Business Philosophy and Corporate Mission Statement ・・・・・・・・・・・6

Industrial and technology innovation

・・・・・・・・・・・・・・・・・・・94

Material issues
Relationship between various social issues
and the company's business
Enhancing sustainability management

・・・・・・・・・・・7

Healthcare

・・・・・・・・・・・・・・・・・・・95

・・・・・・・・・・・9

Local infrastructure / Community planning・・・・・・・・・・・・・・・・・・・97

・・・・・・・・・・11

Social contributions

・・・・・・・・・・・・・・・・・・100

Medium-term Management Plan

・・・・・・・・・・22

Sustainability promotion system

・・・・・・・・・・23

Corporate governance・・・・・・・・・・・・・・・・・・107

Commitment to international codes of conduct

・・・・・・・・・・24

Internal control

・・・・・・・・・・・・・・・・・・116

Compliance・・・・・・・・・・・・・・・・・・117

Social and environmental risk management

・・・・・・・・・・・・・・・・・・120

Information security

・・・・・・・・・・・・・・・・・・122

Stakeholder engagement

・・・・・・・・・・・・・・・・・・123

Our approach to sustainability

 Feature・・・・・・・・・・・4

・・・・・・・・・・・・・・・・・・・・・・25

Our climate change initiatives：Disclosure based on TCFD
DX X Sustainability
 Environment

・・・・・・25

・・・・・・・・・・・・・・・・・40
・・・・・・・・・・・・・・・・・・・・・・41

Environmental management

・・・・・・・・・・・・・・・・・41

Climate change

・・・・・・・・・・・・・・・・・45

Water resources Governance・・・・・・・・・・・・・・・・・・・・・・・107

 ESG quantitative data

・・・・・・・・・・・・・・・・・・124

・・・・・・・・・・・・・・・・・50

 Third-party assessment

・・・・・・・・・・・・・・・・・・132

Biodiversity

・・・・・・・・・・・・・・・・・52

Prevention of pollution

・・・・・・・・・・・・・・・・・55

 Principles and policies supporting corporate activities

Resource use

・・・・・・・・・・・・・・・・・57© 2021 Sumitomo Corporation

・・・・・134

 Disclosure based on IBC Stakeholder Capitalism Metrics ・・・・・135

1

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Editorial policy
At Sumitomo Corporation Group, to respond to the interests of our stakeholders, we are working to provide both financial and non-financial corporate information by utilizing various information disclosure tools.

Of these tools, the ESG Communication Book summarizes detailed information about our activities related to sustainability from the perspective of ESG (Environment, Society, and Governance).
The below diagram is an overview that shows the information listed in each disclosure tool and its position. Please also refer to the tools other than this book, such as the Integrated Report.

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

Integrated Report

As a communication tool for all stakeholders, this is anannual report that integrates our financial and non-financial
information. This Integrated Report helps stakeholders
understand the overview of our value creation and theenhancement of corporate value in the short, medium, andlong term as well as corporate strategy and the overall
progress of our business.
Click here for details

ESG
Communication
Book

With regard to non-financial information, the ESG
Communication Book summarizes detailed information
about our activities related to sustainability from anenvironmental, social, and governance (ESG) perspective.
It is published on our corporate website, and information is
updated occasionally during the year.

Business Report・Consolidated
Financial Statements・
Financial Statements

The Business Report conveys important matters related tobusiness results and status of each fiscal year. The
Consolidated Financial Statements disclose our corporategroup’s consolidated financial position and profit/loss. The
Financial Statements disclose our non-consolidated
financial position and profit/loss. (All three are inaccordance with the Japanese Companies Act.)

ESG

Company
Brochure

Concise/
Selected
Information

Newsletter toShareholders(SC NEWS)

Communication

Book

Integrated Report
Business Report・Consolidated Financial
Statements ・Financial Statements(Included in Notice ofConvocation)

Corporate
Governance
ReportConsolidated
Financial
Statements
Quarterly
Earnings
ReportSumitomo Corporation’s
WebsiteFinancial Information

Comprehensive/
Detailed
Information(Included in Notice ofConvocation)

Click here for details

Reporting Scope of this book

Conformed Guidelines

Sumitomo Corporation and group companies

Final Report: Recommendations of the Task Force on Climate-related Financial Disclosures

Reporting Period of this bookBusiness activities mainly in FY2020 (April 2020-March 2021), including somepolicies and activities before March 2020 and after April 2021.

Date of Issue
Ver.1 September 10, 2021
Ver.2 April 28, 2022
© 2021 Sumitomo Corporation

World Economic Forum: Stakeholder Capitalism Metrics

Referenced Guidelines○ Ministry of Economy, Trade and Industry:

Guidance for Collaborative Value Creation○ ISO26000 : Guidance on social responsibility○ Ministry of the Environment:
Environmental Accounting Guidelines. 2005

Contact
Sumitomo Corporation
Corporate Sustainability Department
TEL: 03-6285-5000
WEB: ​Sustainability Contact Form
https://www.sumitomocorp.com/en/j
p/info/sustainability○ METI / MOE: Calculation and Reporting Manual for Greenhouse Gas Emissions2

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Top message
President and CEO

Chairperson of the Corporate Sustainability Committee

Our corporate mission statement carries on Sumitomo’s business philosophy, which has

Sustainability management involves both “sustainable corporate growth” and “contribution
to the development of a sustainable society.” I believe that future corporate activities should
combine the two as a single initiative. Companies can demonstrate value creation story
over the long term by anticipating future changes in the business environment and realizing
those two pursuits together.

formed the foundation for Sumitomo’s businesses over the course of approximately 430
years. One of the credos of this philosophy states: “Benefit for self and others, private
and public interests are one and the same. This credo underscores the importance that
Sumitomo’s business activities not only benefit Sumitomo, but must also benefit society
around us in order to achieve sustainable growth together.
We announced our new Medium-Term Management Plan “SHIFT 2023” in May 2021.
Through the reinforcement and expansion of businesses that apply our strengths as wellas the development of next-generation businesses from a medium- to long-term
perspective, we aim to make a shift into a business portfolio that has even higher
profitability and downturn resilience. We believe that continuing to create value neededby society will lead to the Group’s sustainable growth. Under this belief, we will further
advance our initiatives to enhance the functionality of sustainability management while
keeping contribution to solving social issues at the forefront of our mind, working toward
the realization of a sustainable society and enhancement of corporate value.
As the Group’s corporate message――“Enriching lives and the world”―― implies, wewill aim to further enrich the world, society, and people’s lives. We will continue to act on
our principles to get it done and create new value. We will move forward, shaping thefuture, and staying ahead.

Representative Director
President and Chief Executive Officer

Masayuki Hyodo© 2021 Sumitomo Corporation

The Sumitomo Corporation Group has been practicing sustainability management, which
pursues sustainable growth together with society, with an essential management theme,“the achievement of a sustainable society. Since FY2020, we have also been promoting
the enhancement of sustainability management. Specifically, among the social issues theworld is tackling, we identified six key social issues that are especially relevant to theGroup’s business activities. We have formulated long-term and mid-term goals to contributeto resolving each of those issues. For companies, social issues could be both opportunities
and risks in the medium to long term. The sustainable growth of companies will depend on
how well they are able to gain business opportunities ahead of time amid a changing
business environment. It will also depend on how they can manage risks while recognizing
and assessing them.
We believe that 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 ofcompanies. We hope this ESG Communication Book will help our stakeholders better
understand our sustainability management.
I appreciate your confidence in us.
Representative Director
Senior Managing Executive Officer

Hideki Yamano3

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

Sumitomo Corporation Group’s sustainability initiatives
Sumitomo Corporation Group has grown into an integrated trading company over the past
100 years since it was originally founded as the Osaka North Harbor Company Limited in
1919. The history of Sumitomo, which formed the basis of Sumitomo's Business
Philosophy, can be traced back to some 430 years ago when its business focused on
copper refining which later advanced to copper mining.
All employees of Sumitomo Corporation learn the history of the Besshi Copper Mines.
Through its modern business management, the Besshi Copper Mines contributed inleading industrial development in Japan, however, there were negative impacts on local
communities including deforestation of nearby forests and damage to agricultural crops
from sulfur dioxide emitted by smelters. Management at that time took measures including
reforestation of the Besshi Copper Mines and relocation of the smelting plant to an
uninhabited island off the coast.
“Benefit for self and others, private and public interests are one and the same”, which isone of the credos of Sumitomo’s Business Philosophy, and the actions taken by ourpredecessors to prioritize the sustainability of natural environment and the local
community over short-term profit, are deeply rooted in heart of every employee at
Sumitomo Corporation. We are confident that our business serves the public interest.
【⇒ Sumitomo’s Business Philosophy Page 6】

Today, after 100 years since the Osaka North Harbor Company Limited has established,
we have 70,000 employees working at more than 900 group companies in 81 countries
and regions and we do our business by engaging with multiple 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 believethat our mission is to protect the planet and pursuing development for the world and better
lives for our stakeholders. 【⇒ Corporate Mission Statement Page 6】© 2021 Sumitomo Corporation

What actions we need to take now
Today, we face many social challenges that threaten the sustainability of society including
climate change, loss of biodiversity, and human rights issues.
Global goals and guidelines are adopted such as the Paris Agreement, the UN’s Social
Development Goals (SDGs), and the Business and Human Rights Guiding Principles, andvarious players including corporations are making efforts to achieve these goals.
In 2017, based on Sumitomo’s Business Philosophy and Sumitomo Corporation Group’s
Corporate Mission Statement, the Group identified the six material issues for achieving
sustainable growth with society. Of the six material issues, four were identified as howeach of our business contributes to society and two were added as our importantmanagement topics. We have been placing the six material issues at the core of ourmanagement to constantly be aware that the business strategies and each business alignwith the material issues and making sure that Sumitomo Corporation Group is contributing
to society.
【⇒ Sumitomo Corporation Group's Material issues Page 7, 8】
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 weshould address and the roles that we should take for the development of a sustainable
society, and the Sumitomo Corporation Group has commenced initiatives to enhance its
sustainability management.
【⇒ Enhancing sustainability management Page 11 to 21】

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Our approach to sustainability
The Sumitomo Corporation Group pursues the creation of new businesses and the enhancement of existing businesses based on Sumitomo's Business Philosophy and the Sumitomo Corporation Group's
Corporate Mission Statement that has been passed down over the years. We accomplish it by anticipating changes in the times and quickly assessing the challenges of the global environment and society
while combining the management base comprised of seven types of capital with the diverse business functions of the business group. The Sumitomo Corporation Group contributes to realizing asustainable society by creating social, environmental, and economic value through the business activities. The mechanism for this entire process of value creation is illustrated in the Value Creation Modelpresented here.
In our corporate activities, we will implement sustainability management that aims to achieve sustainable growth under sound governance. We will do so through a continual awareness of material Issues
that illustrates how our businesses should be connected to society and key social issues that we should contribute to solving.

Value Creation Model of the Sumitomo Corporation GroupKey social issues andlong-term and medium-term goals（Page 11-21）

Business Philosophy andCorporate Mission Statement（Page 6）

Environment

Social（Page 41-59） （Page 60-106）

Governance（Page 107-123）

Material issues（Page 7- 8）© 2021 Sumitomo Corporation

Please refer to the Integrated Report for information on measures
to strengthen our management base, which will be enhanced
through the continuous implementation of this value creation model.

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Business Philosophy and Corporate Mission Statement
Our business was founded on 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 spirit of “Benefit for self and others, private and public interests are one and the sameˮ and inaccordance with Sumitomo’s Business Philosophy and Sumitomo Corporation Group's Management Principles. To deal with the change of the times, we have accordingly changed our businessthrough 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 sustainable growth 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(Source: Sumitomo Historical Archives)
Article 2 advocates the importance of having an enterprisingspirit to generate profits quickly and faithfully while adapting to a changing 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 serves as the timeless principles Sumitomo Group companies follow in their activities.
There are also several other credos that are contained in Sumitomo’s Business Philosophy.
One example is: “Benefit for self and others, private and public interests are one and the same.”
To put it another way, Sumitomo’s business, while benefiting Sumitomo, must also benefit thenation and benefit society. This represents the corporate vision that the Sumitomo Corporation
Group as a whole must pursue at all times.
The second credo is “Grand Design.” This derives from copper mine management, Sumitomo's
core business in its early days, which required long-term vision and continuous effort. This
attitude of viewing business from a broad and long-term perspective and working for the benefitof the entire nation and society based on foresight of the future has been inherited frompreceding Company operators.
The third credo is “People are our most important asset.” The cultivation and development of
human resources has always been our most important concern regardless of the times.
Sumitomo’s Business Philosophy thus stresses the need for an enterprising spirit to stay a stepahead in dealing with change, while ascribing importance to maintaining integrity and soundmanagement, avoiding easy gains, and working for the public interest, without being misled byshort-term immediate changes. This philosophy has continuously formed the basis of Sumitomo
Corporation Group‘s business for more than 400 years.

Sumitomo Corporation Group’s Management Principles are a contemporary translation of
Sumitomo’s Business Philosophy, which was devised 400 years ago, using simplified language
and a clear structure, and rewritten from a more global perspective. The Activity Guidelines
provide guidance on how each company as well as their executives and employees should
behave as they conduct daily business activities to realize the Management Principles.

© 2021 Sumitomo Corporation

As declared in the Management Principles,
our corporate mission is to support ourshareholders, clients, local communities,
employees, and everyone else around theworld in their endeavors to achieve economic
and spiritual prosperity and realize their
dreams through our sound business activities.
We also maintain—throughout our businesspractices—a unique management style that
respects the personality of each Individual
and places prime importance on integrity andsound management, which represent theessence of Sumitomo’s Business Philosophy,
while cherishing a corporate culture thatallows each employee to take the initiativeand demonstrate creativity that is conductive
to continuous reform and innovation.
By sharing the values presented in theManagement Principles and the Activity
Guidelines across the Group to materialize
them in specific business activities, we aim to
be a global organization that constantly stays
a step ahead in dealing with change, creates
new value, and contributes broadly to society.

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Material issues
Sumitomo Corporation Groups Material Issues
In April 2017, Sumitomo Corporation Group identified its material issues that
illustrate the relationships between its business activities and society. We havedefined the Six Material Issues to achieve Sustainable Growth with Society as animportant factor in developing business strategies and in the decision-making
process for individual businesses. Going forward, we will pursue sustainablegrowth by resolving these issues through our business activities.

Leveraging our trust-based relationships with customers and partners across the globe and utilizing our business expertise, we willsecure 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.

Contributing to the Development of Local Communities andIndustries
We steadily procure and provide goods and services to meet theneeds of people in various countries and regions and contribute todeveloping industrial platforms. Through these means, we will
create a virtuous cycle in which we can grow and develop
together with local communities.

Establishing a Foundation for 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 physical andmental health of people around the world.

Providing Diverse “Accessibility”
We provide diverse accessibility to open up the possibility ofcreating new value. To this end, we will improve mobility for safeand 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 that places prime
importance on integrity and sound management with utmost respect for the individual and our Corporate Culture full of vitality andconducive to innovation.
Developing Human Resources and Promoting Diversity
In order to create new value and innovation by allowing our diverse
personnel to fully exercise their abilities in a variety of fields, we will
promote the development and empowerment of human resources,
which represent our most important management resources.
© 2021 Sumitomo Corporation

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 sound management.

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Material issues
Implementing Material Issues in the company’s business
Sumitomo Corporation Groups material issues
illustrate, in an easy-to-understand way, how thegroup addresses social issues through its businessactivities in accordance with its Management
Principles

so

as

to

contributetoachieving

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 societysustainable societies. These material issues show
stakeholders and our company's executives andemployees how the group applies the Management
Principles.

The

entiregroupisinvolvedinaddressing these issues.
Material issues initiatives include: implementation of
the Management Principles in individual business

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 businessactivities and the provision of the value necessary
in our society from a long-term perspective; carefulmanagement of impacts of the entire group'sbusiness activities on society and the environment;
and a grasp of business opportunities in the longterm trends of social issues to strategically develop
business projects that contribute to addressing
social issues.
We believe these initiatives help enhance the longterm business growth and stability of our company,

Increase in stability and growth potential
on management and corporate value in the long-term
Better recognition from shareholders and stakeholders
Increase in employees’ motivation

constantly improve our group's value, receive highevaluations and trust from various stakeholders,
and raise employees' motivation.
© 2021 Sumitomo Corporation

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Relationship between various social issues and the company's business
At present, international organizations, national governments, local governments, private enterprises, and other groups and individuals throughout the world arecooperating to achieve common goals for sustainable development: The Sustainable Development Goals (SDGs). The SDGs are becoming the common language forpeople who are addressing many social issues to achieve sustainable societies. Our Group has risks and opportunities for various social issues in our business activities
covering different countries and industries, and aims to contribute to the achievement of the SDGs through addressing material issues and to realize a sustainable society.
In response to opinions and expectations received from many stakeholders, including representative ESG rating organizations, we have divided our initiatives into 12
major categories to provide an easy-to-understand explanation. On the following page, specific cases for solving social issues are shown for each business unit.
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.

Biodiversity

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

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

Prevention of Pollution

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

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

Resource Use

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

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

Human Rights

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

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

Work Health and
Safety/Health andProductivity
Management

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

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

Human Resources
Management

Hollowing out of talented human resources, decreased laborproductivity, decreased motivation of employees, andbusiness continuity risk due to lack of appropriate measuresand inappropriate working environment, etc.

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

Supply Chains

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

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

Industrial/
TechnologicalInnovation

Deterioration of existing business and hollowing out of human Enhancement of existing business and creation of new businessresources as a result of the shift to ICT, the disappearance of models through the shift to ICT, etc.
borders for all industries, and complexity, etc.

Healthcare

Medical malpractice-related risks, etc.

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

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

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

Local infrastructure/
Community Planning© 2021 Sumitomo Corporation

SDGs

Material Issues

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Relationship between various social issues and the company's businessBusiness description of each Business Unit in solving social issues
Business Unit

Metal Products

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

Transportation &Construction Systems

Infrastructure

EV car-sharing in Sweden

Sewage treatment plant in
Rio Grande do Sul Province

Cable TV operator
JCOM Head office entrance

Motor grader used for ground leveling

Reverse Vending Machine

Mobile phone shops managed
by T-Gaia Corporation

Lunar module manufactured byispace (illustration)

Dorper Wind Farm Pty Ltd. inSouth Africa

Companywide DX promotion

KANDA SQUARE

Agrochemical project in Brazil (AgroAmazonia Produtos Agropecuarios
Ltda.)

Distributed Solar PowerBusiness

Page 47

Page 16, 45

Page 16, 46

Page 16, 48

Page 46, 48, 49

Page 16, 27, 46, 49

Page 54

Page 53Media & Digital

Living Related & Real Estate

Mineral Resources, Energy,
Chemical & Electronics

Interior of Summit supermarket,
Summit Store Hon-Amanuma

Cerro Verde Copper Minein the Republic of Peru

SC Foods “Yongenton Silky
Pork®”

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

EII

Utilization of Forest
Resources in New ZealandBusiness
ExamplesSteel Service CenterLong rail transport vessel

Climate Change
Water Resources

Page 50, 51

Biodiversity

Page 54

Prevention of
Pollution

Page 56

Resource Use
Human Rights
Work Health and
Safety/Health andProductivity
Management
Human Resources
Management

Page 18
Page 74

Green
Hydrogen

Page 55, 56

Page 17

Page 17

Page 17

Page 64

Page 18, 63, 64

Page 64

Page 75

Page 17, 57

Page 73

Page 73

Page 93

Page 93

Page 93

Page 95

Page 96

Page 19, 82

Supply Chains
Industrial/technolog
ical innovation

Renewable
EnergyPage 40

Page 40, 94

Page 40, 94

Healthcare
Local Infrastructure/
Community
Planning© 2021 Sumitomo Corporation

Page 20, 99

Page 19, 20

Page 20, 97, 98

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Enhancing sustainability management
The Enhancement of Sustainability Managementthat we seek
Enhancing sustainability management at Sumitomo
Corporation goes beyond identifying issues and setting
goals.

Pursue sustainable growth with society

Sustainable society

In addition to clear commitment to the role we play inachieving a sustainable society, it is necessary that we
focus on the optimal status of companies and theirbusiness that will be needed in a sustainable society,such as carbon neutrality, circular economy and zeroviolation of human rights. We need to recognize thepaths to achieve them and the challenges to be
overcome, and consider the strategies and allocation ofmanagement resources that we should implement from along-term perspective.
We believe that capturing and pursuing the ideal state ofsociety will bring more business opportunities. The
Sumitomo
Corporation
Group'ssustainability
management is about perfectly aligning the vision of asustainable society with the Group's value creation andsustainable growth, and we continue to work on
establishing a management framework to achieve thevision.

Sustainable growthCommitments to solve
social issues
Monitoring based on mediumto long-term goals

Monitoring long-termbusiness outlook
Awareness of the long-term
nature of social issues

Value creation

Strategic allocation ofmanagement resources
Portfolio based on long-termbusiness outlook

Sumitomo Corporation Group’s value creation model: Financial
capital, Human capital, Intellectual capital, Organizational/Group capital,
Global network capital, Business relation capital, and Brand capital“Enriching lives and the world”
Sumitomo’s Business Philosophy and
Sumitomo Corporation Group’s Corporate Mission Statement© 2021 Sumitomo Corporation

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Enhancing sustainability management
What the Group will bring about for the development of a sustainable society
As Sumitomo Corporation works to enhance its sustainability management, we have identified six key social issues related to our business that we address throughour business and corporate activities.
The six key social issues are: “Mitigation of climate change”, “Circular economy”, “Respect for human rights”, “Development of local society and economy”,“Improvement of living standard” and “Quality education”.
As we pursue these lofty goals, it will benecessary for us to demonstrate ourstrengths as an integrated trading company.
The Group will make use of its humanresources, business expertise as well as
networks and business relationships. The six
social issues will demonstrate our role in thesociety and become our guideline to theGroup’s entire business operations.

Key social issues and long-term goals for Sumitomo Corporation GroupThe six social issues have two themes: thesustainability of society and development
and advancement of society.
The sustainability of society is a globallyshared goal as well as a major premise of
the Group’s business. On the other hand, thesolutions for pursuing the sustainability ofsociety will be generated from further socialand economic development and therefore,
we believe that these two themes aremutually complementary.
Also, we will pursue to achieve these goals
through business activities, however, we willcontribute to providing quality education
through our philanthropy as well as humanresources development initiatives.

© 2021 Sumitomo Corporation

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Enhancing sustainability management
Key social issues and long-term goals for Sumitomo Corporation GroupFor development and advancement of society, we identified developmentof 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 theworld. Helping to develop the communities where we do business is acommon challenge to all our business operations. The Group willcontribute to industrial development as well as human resource
development in the local communities and will endeavor to provide
industrial and social infrastructure.
The world's population continues to grow, and many areas are facing
problems such as aging and urbanization. The Group will make effort toprovide advanced life-related services that contribute to a better life forall people.

Quality education plays an important role in the development of local
communities and economies, which enriches people's lives and leads tocreation of a sustainable society. The Group will promote various
activities, including philanthropy, to contribute to quality education.

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 are urgent
issues that are indispensable for realizing a sustainable society. The
Sumitomo Corporation Group seeks to become carbon neutral in its
business by 2050 and develop sustainable energy cycles and create
new business.
The circular economy through recycling, reuse, reproduction, resourcesaving 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, and working on sustainable procurement of
natural resources.
Respect for human rights is a universal issue that must be achieved inany 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's business and supply chains.

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

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Setting long-term and medium-term goals to address key social issues
Key social
issuesMitigationof climatechangeLong-term goals

Aim for carbon
neutrality by 2050
and challenge torealizesustainableenergy cycle

Medium-term goals (newly set)

Sustainability of society

CirculareconomyRespect
for humanrightsReduce the Group’s CO2 emissions 50% or more by 2035 (compared to 2019)– Reduce CO2 emissions of the power generation business by 40% or more by 2035 (of which reduce 60% or more for coal-fired power
generation business); power generation portfolio in 2035 to comprise 20% coal-fired, 50% gas-fired and 30% renewables (*1) in terms of
net ownership generation capacity.
– Reduce indirect CO2 emissions (*2) associated with the fossil fuel upstream business by 90% or more by 2035.
– Reduce CO2 emissions in all other businesses (*3).
Establish businesses that will form the foundation for a sustainable energy cycle in society– Develop hydrogen and other forms of carbon-free energy, increase supply of renewable energy (3GW or more by 2030)(*4), and expand
new power and energy services.
– Expand businesses encouraging electrification, fuel conversion, improved energy and coal efficiency, and energy conservation.
– Capture, store and utilize CO2 via carbon recycling, forestry business, CCS, and emissions credit trading, etc.



Shift to recyclable,
efficienttechnologies andproducts

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

Sustainable useof natural
resources

Reinforce the sustainable procurement system for major natural resources used by the Group– Identify major natural resource-related commodities requiring sustainable procurement, establish procurement policy, promote certification,and strengthen voluntary auditing system.



Respect humanrights through allof our businesses
and supply
chainsPromote and ensure respect for human rights in accordance with the United Nations Guiding Principles on Business and Human
Rights and Sumitomo Corporation Group’s Human Rights Policy– By 2023, achieve 100% participation rate in human rights education based on the Guiding Principles, and 100% implementation rate inregional organizations and subsidiaries.
– Strengthen risk analysis in human rights due diligence to accurately assess risks in all businesses, including the supply chain, andimplement risk mitigation measures by 2025. Establish a more effective grievance mechanism(*5) based on assessment results.
Ensure a safe workplace environment– Strengthen efforts to achieve zero accidents at major business workplaces, focusing on manufacturing, processing, and projects involving
large-scale construction.
Achieve a diverse organization grounded in mutual respect– Provide a safe working environment that is free from discrimination and harassment.
– Promote human resource management that enables individuals to demonstrate their abilities regardless of nationality, age, gender,
sexual orientation, gender identity, or any other attributes or values.

(*1) As of 2020：coal 50%, gas 30%, renewables 20% (*2) Indirect CO2 emissions generated by others with the use of fossil fuel (*3) Contribute to CO2 reduction by setting targets forindividual businesses (*4) As of 2020：1.5GW (1GW = 1 billion W) (*5) A process that employees, local residents or other stakeholders can use to lodge complaints regarding human rights
violations and other issues related to enterprise’s business activities including its supply chain, for resolving such issues© 2021 Sumitomo Corporation

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Setting long-term and medium-term goals to address key social issues
Key social
issuesDevelopme
nt of local
society andeconomyLong-term goals

Medium-term goals (newly set)

Development and evolution of societyDevelop local industries, create jobs, and develop human resources through the Group’s global business operations– Promote sustainable, highly productive and value-added industries, and coexist with local communities through business.
– Create employment and develop management and highly skilled human resources at the Group's business sites.

Establish industrial and social infrastructure that contributes to the sustainable development of society– Promote infrastructure that enables access to high-quality energy, water, transportation, logistics, communications, and financial services,
as well as businesses that enhance urban functions.

Provideadvanced
lifestyle-related
servicesDeliver advanced lifestyle services that help to solve social issues such as urbanization and aging populations– Provide more advanced services and new functions that improve the standard of living, such as mobility, media and telecommunications,healthcare services, and smart city development, based on new technologies and concepts.

Contribute toquality education

Provide quality and equal learning opportunities through 100SEED(*) activities– Quantitatively expand the scope of learning opportunities.
– 100% satisfaction of beneficiaries.
– Continue to have at least 5% of all employees participate annually (scope is Sumitomo Corporation, regional organizations and Group
companies).

Contribute todevelopment oflocal industries
and human
resources

Developindustrial andsocialinfrastructure

Improveme
nt of living
standardQualityeducation

(*) Social contribution activity program with employee participation at Sumitomo Corporation Group

Monitoring of progress and disclosure of information
Going forward, the Company will disclose the initiatives and progress with achieving each goal in its communication materials, including the ESG
Communication Book and the Integrated Report which are published annually.

© 2021 Sumitomo Corporation

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Key social issues：Mitigation of climate change
Long-term goal：Aim for carbon neutrality by 2050 and challenge to realize sustainable energy cycle
 Medium-term goal： Reduce the Group’s CO2 emissions 50% or more by 2035 (compared to 2019)
Business description

Business description

Reducing Electricity Consumption at Data Centers, etc

Conserving Energy and Reducing CO2 Emissions at Supermarkets

SCSK, a member of the Group, is making efforts to reduce theAt our Group Summit, we established the “GO GREEN”
Challenge Declaration based on our SDGs, and we arepromoting solutions to social and environmental issues,
including the achievement of virtually zero CO2 emissions by
2050.

power consumption of IT equipment and server cooling air
conditioning equipment at its data centers. It is aiming for thetarget of 1.5 degrees Celsius established by the SBT (*)
certification standards, and will promote power saving and theuse of natural energy to reduce greenhouse gas emissions.

netXDC Chiba Center No. 3(*) SBT=Science Based Targets. They are greenhouse gas emissions reduction targets set by companies
for the next 5 to 15 years that are consistent with the levels required by the Paris Agreement.

In terms of specific initiatives, we are promoting energy
conservation and furthering reductions in CO2 emissions by
Solar panels installed on building walls
striving to improve our refrigeration and freezing facilities,
which account for 50-60% of our electricity consumption, as
well as changing our lighting, which accounts for 10-20% of ourelectricity consumption, to LED lighting, among other efforts.
”GO GREEN” Challenge Declaration
In addition, we’ve introduced solar power at some stores.

 Medium-term goal： Establish businesses that will form the foundation for a sustainable energy cycle in society
Business description

Business description

Developing Our Renewable Energy Business

Establishing
An
International
Hydrogen Supply Chain

The Group is engaged in a variety of renewable energy businesses around the world, from wind power

CO2-freeBy utilizing the abundant water resources and hydroelectric(onshore and offshore) to solar power, geothermal power, hydroelectric power, and biomass power.

power in Sarawak, Malaysia, we are studying theIn addition to supporting society by supplying electricity (creating social value), we also aim

production of CO2-free hydrogen and the export of MCH

to reduce greenhouse gas emissions through the creation of new renewable energy businesses(methylcyclohexane) to Japan in collaboration with SEDC

(creating environmental value), and we will continue to expand our business model globally to secure(Sarawak Economic Development Corporation), a company

stable, long-term profits (economic value) through a sustainable electricity sales business.

© 2021 Sumitomo Corporation

Offshore wind turbines,
also known as “egrets”

run by the state government, and ENEOS Corporation.

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Key social issues：Circular economy
Long-term goal：Shift to recyclable, efficient technologies and products
 Medium-term goal： Use renewable and recyclable raw materials, collect waste, and promote improved efficiency of product usage
Business description
Achieving a Recycling-oriented Society through our Maxicon Rental BusinessFor about 30 years, Sumisho Global Logistics Co., Ltd., as one of our group companies, has been developing“Maxicon foldable container rental business" mainly for food and cosmetic products in liquid bulk to be transported
and stored safely. This business has contributed to solving social issues such as resource conservation andimprovement of transportation efficiency to reduce CO2 emission, but the main material of the inner bag installedinside Maxicon is polyethylene, which we believe may result in our next challenge to deal with the waste disposal
problem. Currently, we are trying to develop a new inner bag made of plant-derived resin containing more than 10%
of biomass materials to be certified by the third party organization for realizing the recycle-based society throughout
Installing inner bag inside Maxicon container

the whole supply chain

Environmentally friendly reusable
container “Maxicon (1000L)”

Long-term goal：Sustainable use of natural resources Medium-term goal：Reinforce the sustainable procurement system for major natural resources used by the Group
Business description

Business description

Acquisition of FSC® certification, an international standard
for forest management

Joining the RSPO (Roundtable on Sustainable Palm Oil)

Forests are a vitally important resource for the sustainable development of the world. We

in 2019. Further, our consolidated

We became an ordinary member of the RSPO

have acquired FSC® certification, an international standard, for all 2.66 million hectares ofsubsidiaries SC Foods Co., Ltd.

our forested land in the Russian Far East and most of our 37,000 hectares of forested land

and Summit Oil Mill Co., Ltd. obtainedin New Zealand. This is so that we can have our forest management objectively evaluated

RSPO supply chain certification in 2021.

and certified as being conducted in an appropriate manner that takes the environment andlocal communities into consideration. ⇒ See Page 57 for details.
© 2021 Sumitomo Corporation

Forest we own in the Russian Far East

⇒ See Page 93 for details.

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Key social issues：Respect for human rights
Long-term goal：Respect human rights through all of our businesses and supply chains Medium-term goal：Promote and ensure respect for human rights in accordance with the United Nations Guiding Principles on Businessand Human Rights and Sumitomo Corporation Group’s Human Rights Policy
Business description

Business description

Supplier Management in the foods business

Human rights initiatives at Fyffes

As a trading company that specializes in food and food products,
SC Foods is engaged in a comprehensive range of activities,
from product development, selection of production sites aroundtheworld,
procurementofrawmaterials,
andproduction/processing management to logistics and domestic
distribution. Its goal is to promote respect for human rights
throughout the value chains in which the Group’s businesses are
involved. SC Foods is engaged in supply chain management withthe aim of providing safe, trustworthy, and high-quality productsthat respect human rights and other sustainability issues.

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 ever corporate-wide Human Rights Impact
Assessment in January 2020, through its partner BSR. The human rights impact assessment was
conducted through reviews of existing Fyffes policies and procedures and interviews with internaland external relevant stakeholders, including NGOs, employees and customers. In addition,
Fyffes chose five countries to do an in-depth analysis - Belize, Colombia, Costa Rica, theDominican Republic, and Honduras. The countries were chosen due to their importance to Fyffes⇒ See Page 63 for details.

 Medium-term goal： Ensure a safe workplace environment
Business description
Continuing and developing the health and safety
management system we have cultivated over the years
The Metal Products Business Unit has continued to engage in health andsafety management initiatives to protect the lives and safety of its
employees. Typical examples of such initiatives include, the global initiatives

as well as their potential risk profile.

⇒ See Page 63 for details.

 Medium-term goal：Achieve a diverse organization grounded inmutual respect
Business description
Establishing Sumitomo Corporation Group’s Global
HR Management Policy
In December 2020, we established the Sumitomo Corporation
Group's Global HR Management Policy. The policy sets forth ourfor zero accidents in Steel Service Center Business Groups (steel products

vision and establishes important concepts with regard to humanrelated business) and the global HSSE management system for eliminating

resources management around the world, and will be used as theoccupational and environmental accidents in the tubular products business.

basis for all human resources policies so that we can implement

We will continue to pursue zero accidents in both the steel and tubular products businesses andhuman resources management aimed at creating new value.

fulfill our social mission by creating ever better work environments. ⇒ See Page 74 for details.
© 2021 Sumitomo Corporation⇒ See Page 77 for details.

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Key social issues：Development of local society and economy
Long-term goal：Contribute to development of local industries and human resources Medium-term goal：Develop local industries, create jobs, and develop human resources through the Group’s global business operations
Business description

Business description

Develop and operate industrial parks internationally to create jobs and promote sound regional
development

Offering job training programs

The overseas industrial park business was launched to meet the needs of customers looking to expand its overseas
production, based on the idea of providing comprehensive support functions for such companies as one package. We are
now operating industrial parks in Southeast Asia such as the Philippines, Vietnam, and Myanmar, and also in South Asia
such as in the suburbs of Chennai in south India. Our industrial park business is truly one stop: from land acquisition to fullThrough our consolidated subsidiary Toyota
Iraq, we are implementing a job training
program

for

young

internallydisplaced

persons in Iraq to help them acquire skills,

scale development, attracting companies, day to day operations, and tenant company

with the goal of offering stable employment

support. We aim to continuously exceed customer expectations and improve our support,

opportunities and a foundation for building

utilizing the Sumitomo Corporation group's strengths and services, such as logisticalan independent life for the future.

warehouse management andsupport and procurement of production materials to provide a more comprehensive support. Thang Long Industrial Park II (Vietnam)⇒ See Page 82 for details.

customer services

Trainees receiving craning on
vehicle maintenance, parts

Long-term goal：Develop industrial and social infrastructure Medium-term goal：Establish industrial and social infrastructure that contributes to the sustainable development of society
Business description
Helping to promote the development of railroad infrastructure
We have been implementing projects to supply rolling stock and railway systems to countries throughout Asia, including the Philippines, Indonesia, Taiwan,
Thailand, Myanmar, and Vietnam, as well as to North America. Of these, the Philippines is one of our most important markets. We have been involved in theconstruction of all of the urban railways that currently run through the Manila metropolitan area, which includes Lines 1, 2, and 3.
The Philippines marks one of the highest rates of economic growth among the ASEAN countries. With a population of over 100 million, the population of theManila metropolitan area is experiencing rapid growth, and traffic congestion resulting from the large concentration of people poses a serious issue. We willcontribute to the Philippines’ economic development by utilizing our extensive experience in developing railroad infrastructure, providing access that is
inexpensive and convenient, and both improving the environment and eliminating economic losses by reducing traffic congestion.
© 2021 Sumitomo Corporation

Conceptual rendering of completed Manila Metro railcar

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Key social issues：Improvement of living standard, Quality education
Long-term goal：Provide advanced lifestyle-related services
 Medium-term goal： Deliver advanced lifestyle services that help to solve social issues such as urbanization and aging populations
Business description

Business description

Solving Social Issues through Developing 5G Infrastructure and Solutions

Contributing to solving local social issues through smart city developmentin North Hanoi

5G is a key technology for promoting DX and an important platform that will have an impact on

We will integrate the real estate business and infrastructuresociety in general. We are working on the "base station sharing business" and the "local 5G

business, both of which the Group has extensive experiencebusiness for regional communities." Through the expansion of "base station sharing," we aim torealize a 5G society as soon as possible and lessen the environmental impact by reducing the
installation of base stations. At the same time, we will use “local 5G" to solve social issues andachieve industrial DX in various fields such as factories, universities, railroads, and disasterprevention, and realize more convenient and developed regional communities.
⇒ Page 98 for details

in, and undertake efficient management of urban development
utilizing digital infrastructure*. At the same time, we will utilize
various smart services and the data obtained from these
initiatives to promote urban development for achieving
sustainable growth.
* Integrated IoT platform for integrating, accumulating, andanalyzing urban data

Long-term goal：Contribute to quality education
 Medium-term goal：Provide quality and equal learning opportunities through 100SEED(*) activities

Pleasant living environment
surrounded by waterfronts andother natural scenery(*) Social contribution activity program with employee
participation at Sumitomo Corporation Group

Activity description
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 activity program to discuss together and carry out globally. By participating in a three-step process—POST (post social issuesof interest), DISCUSS (discuss the actions to be taken), and ACT (carry out those actions)—each employee takes ownership of the solutions tosocial issues, puts the Sumitomo Business Philosophy and Sumitomo Corporation Group Management Principles into practice, and achieves
sustainable growth with society. We will provide our diverse human resources, our most important management resources, and their time on allorganizational levels to address quality education with the aim of creating a sustainable society. ⇒ Page 104 for details© 2021 Sumitomo Corporation

Information on activities and their progress
will be released from time to time on
corporate websites and other media.

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Enhancing sustainability management
A step forward in our Sustainability Management：Material issues and 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 tosociety 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 align with the material issues and making sure thatthey 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© 2021 Sumitomo Corporation

Key social issues and long-term goals for Sumitomo ration 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 progress21

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Medium-term Management Plan SHIFT 2023
In May 2021, we formulated the Medium-Term Management Plan SHIFT 2023 to cover the three-year period from FY2021 to FY 2023. We will focus on the following three measures : a shift
in our business portfolio to one that is both highly profitable and resilient to changes in the business environment while firmly grasping the two major social trends of digitization and thedemand for sustainability ; a shift in our framework which will lead to steady implementation of the PDCA cycle after brushing up individual business strategy discussions in depth and crossorganizational efforts and decisions on the allocation of management resources ; a shift in the management base which will be achieved by enhancing governance and human resourcesmanagement, maintaining and improving our financial soundness . We will complete thorough structural reforms and achieve a return to a new long-term growth trajectory by focusing onthese three shifts .
In SHIFT 2023, we have identified "enhancement of sustainability management" as an important element, along with DX, in our growth strategy of promoting a shift in our business portfolio.
We will transform our business activities suitable for a sustainable society and pursue sustainable growth together with society.
We are strongly committed to addressing social issues and will promote strategic allocation of management resources by backcasting from a sustainable society to determine business
opportunities and risks with regard to the long-term changes in the business environment.

SHIFT 2023 Overview

Medium-Term Management Plan SHIFT 2023
© 2021 Sumitomo Corporation

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Sustainability promotion system
Organization for Promoting Sustainability
Sumitomo Corporation has established the Corporate
Sustainability Department, which is responsible for theplanning of measures to promote sustainability andensuring their implementation throughout the organization.
Meanwhile, the department coordinates with generalmanagers,

who

are

responsibleforpromotingsustainability within each business unit, and with thesustainability promoting staff of each business unit’s
Planning & Coordination Department. The department
also works with the sustainability promoting staff ofrelevant corporate departments and overseas regionalorganizations to ensure that sustainability promotion
measures are fully implemented groupwide and also thatthe different business units and regional organizations
pursue measures tailored to the specifics of their businessor region.
The Corporate Sustainability Committee acts as anadvisory body to the Management Council and discusses
important policies, measures, and initiatives relating to thepromotion of sustainability. Important initiatives relating tosustainability promotion are referred by the committee tothe Management Council and the Board of Directors forfurther discussion. Some important initiatives are subject
to the decisions of the Management Council and thesupervision of the Board of Directors.

© 2021 Sumitomo Corporation

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Commitment to international codes of conduct
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
to join in the GC and currently has over 13,000 companies
and organizations 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 officers 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 of the board member companies. In FY2020, we took
part in working 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 areprovided insight from specialists. This knowledge is utilized to help the Company
promote Sustainability.
© 2021 Sumitomo Corporation

The Global Compact's 10 Principles
Human Rights
1.
2.

Businesses should support and respect the protection
internationally proclaimed human rights; andmake sure that they are not complicit in human rights abuses.

ofLabour Standards
3.
4.
5.
6.

Businesses should uphold the freedom of association and theeffective recognition of the right to collective bargaining;
the elimination of all forms of forced and compulsory labour;
the effective abolition of child labour; andthe elimination of discrimination in respect of employment andoccupation.

Environment
7.
8.
9.

Businesses should support a precautionary approach toenvironmental challenges;
undertake initiatives to promote greater environmental responsibility;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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Our climate change initiatives： Disclosure based on TCFD
The issue of climate change is an important issue that must be overcome to bring about a sustainable society. Global efforts towards the faster realization of a carbon-neutral society areaccelerating. We value the global consensus of the Paris Agreement, and in order to play a more active role in achieving the carbon-neutralization goals of society set forth in the agreement,
we reviewed our “Policies on Climate Change Issues” in May 2021. We have set medium-term goals that show a clearer action plan for “Climate Change Mitigation” and its long-term goals,
one of our six important social issues. (For midium-term goals, please refer to Page 14 and Page 39)

Basic Policy Aim to make the Sumitomo Corporation Group carbon neutral in 2050(*1).
Develop technologies and business models for creating a sustainable energy cycle by reducing CO2 emissions and achieving negative emissions(*2) for society as a whole.
 In addition to reducing and absorbing CO2 emissions from our business, we will contribute to the carbon neutralization of society through cooperative initiatives andrecommendations made with business partners and public institutions.

Policy on Business Activities
 Promote renewable energy, efficient energy utilization and fuel conversion that contributes to reducing CO2 emissions throughout society. We will also work to offer newenergy management and mobility services utilizing renewable energy and also to materialize hydrogen technologies and applications.
 In the power generation business, we provide a stable supply of the energy, essential for the economic and industrial development of local communities. At the same time, we
continuously shift management resources to renewables and other energy sources with low environmental burden in the power generation portfolio.
(in 2035: 20% for coal-fired, 50% for gas-fired, and 30% for renewables in terms of net ownership generation capacity(*3))
 Regarding the development of thermal power generation and fossil energy concession, we will work on the premise of carbon neutralization in 2050.
We will not be involved in any new coal-fired power generation business neither IPP (Independent Power Producer) nor EPC (Engineering, Procurement, Construction).
For IPP business, we aim to reduce CO2 emissions by 60% or more by 2035 (compared to 2019) and we will end all the coal-fired power generation business in the late 2040s.
We will not make any further investment in the thermal coal mining interest and aim to achieve zero production from thermal coal mines by 2030.
(*1) The scope of business targeted for carbon neutralization is as follows[Scope1・2] Direct CO2 emissions from Sumitomo Corporation and its subsidiaries, as well as indirect CO2 emissions from the generation of energy used by each company (however, for power generation
businesses, emissions from those affiliated companies under the equity method are also included)[Scope3] Indirect CO2 emissions associated with the use of energy resources produced by fossil energy concession of Sumitomo Corporation Group, its subsidiaries, and affiliated companies under the equity method.
Carbon neutrality means net-zero CO2 emissions that combine CO2 emissions from our business and our contributions to CO2 emission reduction.
(*2) Negative emission refers to the absorption, capturing, and removal of CO2 emitted in the past and accumulated in the atmosphere.
(*3) As of 2020：coal 50%, gas 30%, renewables 20%© 2021 Sumitomo Corporation25

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Governance

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Our climate change initiatives： Disclosure based on TCFD
Governance（Structure for Responding to Climate Change Issues）
 With regard to the various opportunities and risks related to climate change
issues involved in the Group's diverse business activities, the Board of
Directors receives periodic reports on strategies in the Group's diverse
activities each business field, their progress, and the status of risks
affecting the company's entire business portfolio, and monitors whether
appropriate management is being carried out. In addition, the Board of
Directors adopts resolutions establishing policies on the Group's responses
to climate change problems and discusses the handling of important issues
related to policies on responses to climate change issues.
 As a recent example, our Management Council repeatedly discussed thepath to achieve the Group‘s long-term goal of “becoming carbon neutral in
our business activities by 2050 and taking on the challenge of realizing asustainable energy cycle,” the policies of our power generation and energyrelated businesses, and the initiatives necessary to realize a carbon-neutral
society. Based on this, the Board of Directors reviewed the “Policy on
Climate Change Issues” and resolved the medium-term goals for “Climate
Change Mitigation.” The Group holds biannual strategic conferences withthe participation of Management Council members to discuss strategies ineach business field including measures for addressing social problems
such as climate change under the Medium-term Management Plan.
 In addition to the measures taken by individual business units with regard
to the opportunities and risks presented by climate change issues, theCorporate Sustainability Department, a dedicated organization for dealing
with social problems, the Corporate Planning & Coordination Department,
which creates the company's overall management plans and formulates
key initiatives, and the risk management organizations work together,
formulating company-wide policies and promoting necessary initiatives.
Based on 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 Corporate Strategy Promotion
Committee (chairperson: Chief Strategy Officer, secretariat: Corporate
Planning & Coordination Department) deliberates on strategies and risk
management measures related to climate change. The two committees
provide reports and refers issues to the Management Council, which makes
critical decisions regarding climate change-related measures.
© 2021 Sumitomo Corporation

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 Strategy
Promotion Committee
Corporate Sustainability
Committee

Corporate Sustainability
Department

Information collection, analysis of
circumstances, reporting

Risk Management
Organizations

Overseas Sites

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： Disclosure based on TCFD
Strategy: Climate Change-Related Risks and Opportunities
To overcome the issue of climate change, it is necessary to bring about a carbon-neutral cycle by shifting to decarbonization technology and renewable energy across the industry andutilizing emitted CO2.
We will respond to the risks posed by changes in various technologies and business models due to decarbonization as we globally develop businesses in a wide range of industries. At thesame time, we will cultivate diverse business opportunities and meet the new social needs that arise in response to these changes.

Develop new businesses for realizing a sustainable energy cycle
We established the Energy Innovation Initiative (EII), a new businessorganization that aims to create next-generation businesses that
contribute to the realization of a carbon-neutral society, in April 2021.
This organization aims to develop a decarbonization and recycling
energy system and is engaged in cross-organizational efforts.
Specifically, these efforts are carried out in the three priority fields of“developing carbon-free energy” (such as hydrogen and nextgeneration bio-energy), “expanding power & energy services” (such aslarge-scale storage batteries and distributed power resources), and“CO2 capture, storage and utilization”.
These three priority fields do not exist independently of each other but
rather are interrelated, forming a single energy system. It will create
new value by combining and uniting these fields. The EII calls this “thenew energy management business” and is pursuing the creation of anext-generation business by combining related demand and synergy.
The various projects of the EII include ones already commercialized
and ones in different stages from field testing to social implementation.
Work is underway to establish a sizable earnings base with 2030 as
one possible target.
In addition to these initiatives, we will continue to build businesses thatserve as the basis for the sustainable energy cycle of society. This will
be achieved through expanding the supply of renewable energy andthe switching of fuels, electrification, and improvements to energy andcarbon efficiency across various industries, along with the expansionof businesses that promote energy conservation.

© 2021 Sumitomo Corporation27

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Our climate change initiatives： Disclosure based on TCFD
Strategy: Climate Change-Related Risks and Opportunities With regard to the problem of climate change, various regulations may be introduced in the future to encourage carbon emissions reductions and decarbonization, in thelong term, advances in international deliberations, revisions 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.
 We are analyzing the impact on businesses including power generation/energy and resource-related businesses, automobiles, aircraft, shipping business, steel, chemicals,
cement, aluminum smelting, and real estate, which are presumed to be fields that face a relatively high risk of change in the business environment. These include changes
in technology related to climate change mitigation and the introduction of regulations. It is assumed that there are risks that affect business activities in these fields. By
recognizing the magnitude of the risks through regular scenario analysis and considering appropriate countermeasures, we are working to keep the negative impact on
business performance to a minimum. We are also strengthening initiatives that contribute to the development of business opportunities, such as the construction of carbonfree and recyclable energy systems.

Scenario Analysis
 We see climate change as a major issues faced by the entire world, and we identify businesses on which climate change will have a significant impact and perform scenario
analysis based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

Climate scenario selection
 In the event of significant changes to the business environment, from the perspective of objectively evaluating new business opportunities and business resilience, we are
analyzing the impact on business by 2050 using the below scenarios. In doing so, we primarily reference the IEA’s (International Energy Agency) World Energy Outlook
2020, and Energy Technology Perspective 2020, Net Zero by 2050 Roadmap for the Global Energy Sector. These scenarios are referenced as examples of possible
changes in the business environment of each sector for long-term trends in global climate change mitigation, and do not necessarily represent assumptions for ourmanagement policies or business strategies.
•

NZE (Net Zero Emission Scenario):
A scenario that backcasts global accomplishment of net zero by 2050
*1.5℃ increase by 2100 (50% probability)

Referenced
scenarios•

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

STEPS (Stated Policies Scenario):
A public policy scenario in line with policies already announced by governments and Nationally Determined Contribution (NDC) submitted by each country*Less than 2.7℃ increase by 2100 (50% probability)© 2021 Sumitomo Corporation

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Our climate change initiatives： Disclosure based on TCFD
Strategy: Climate Change-Related Risks and Opportunities
Identifying the businesses for which to perform scenario analysis
 Our scenario analysis scope encompasses all of our business sectors which will be highly affected by business environment changes related to climate change
mitigation, regardless of the scale of the business.
This fiscal year we are conducting scenario analysis after confirming trends in technological changes and the introduction of regulations for businesses in power,
energy, transportation, materials industry, and real estate.

Scenario analysis scopeBusiness sectors selected for scenario analysis
Resources: Thermal coal and coking coal, Natural gas and LNG, Metals andrare metals (Nickel, copper, and iron ore)

Transportation: Vehicles (Manufacture and sales of automobile parts/salesof finished vehicles), Shipping (Shipbuilding/ship ownership and operation),
Aviation(Lease business)

Material industry sector:

Business scale

Electric power: Power generation (Coal and gas), Renewable energy

Steel (Steel sheets & tubular products

manufacturing &sales), Cement (Distribution business),
Chemicals (manufacturing/trade), Aluminum (Smelting and refining business)

Real estate sector: Office buildings/residential building sales business

Impact of change in business environment related toclimate change mitigation

Results of scenario analysis
 For the recognition of the business environment related to the sectors identified for scenario analysis, power, energy, transportation, materials industry, and realestate, the future demand trends for each sector listed in the main scenarios presented by the IEA are evaluated in three levels: positive, neutral, and negative. The
forecasts for demand trends and the business environment shown by these scenarios include many potential risks and uncertainties. Also, our policies and initiatives
related to each sector describe the policies and initiatives that consider the factors and certainty of various changes in the business environment shown in thesescenarios and the circumstances unique to our business.
© 2021 Sumitomo Corporation

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Our climate change initiatives： Disclosure based on TCFD
Strategy: Transition Risks and Opportunities Related to Climate Change <Scenario Analysis>
Electric power sector Power generation (Coal and gas)

Business
environment
assessment

NZE／SDSSTEPS• In SDS, coal-fired thermal power is reduced to about 80% compared to 2019 in 2040. Gas-fired thermal power
temporarily increases as a substitute but decreases about 34% compared to 2019 in 2040.
• In NZE, there are no new coal-fired thermal power plants at the current point in time. In developed countries, coal-fired
thermal power without CCUS is abolished in 2030 and is abolished globally in 2040. Gas-fired thermal without CCUS
power peaks in 2030 and decreases 90% compared to 2020 by 2040.

• For 2040, demand for coal-fired thermal power
generation will decrease by about 14% from2019. Demand for gas-fired thermal power
generation is expected to increase by about 16%
in 2040 from 2019.
• Power generation demand for gas-fired thermal
power increases about 16% compared to 2019 in
2040.

Negative

Our policies andmeasures

NeutralWe will shift our allocation of management resources from coal-fired thermal power to power businesses with low environmental impact, such as renewable energy. Regardingcoal-fired thermal power businesses, we will not work on new projects, and we plan to complete all of our businesses and withdraw by the latter half of the 2040s. Most of ourexisting coal-fired thermal power generation businesses are based on long-term contracts with governments of developing nations where power demand continues to increase.
Provisions are included in power sales contracts that hedge against risks in return volatility caused by changes in the legal system. We have also obtained guarantees from thegovernments regarding the performances of these contracts, and we are covered by NEXI foreign investment insurance. Even with demand for coal-fired thermal power
decreasing across society as a whole, risks for the significant deterioration of the commercial viability of individual projects are not considered to be high. However, we willcontinue to monitor changes to the surrounding business environment.

 Power generation (Renewable energy)

Business
environment
assessment

Our policies andmeasures© 2021 Sumitomo Corporation

NZE／SDS

STEPS• With carbon-neutral trends growing globally, renewable energy is increasingly becoming a primary power source in many
countries. In NZE/SDS, consumer demand for renewable energy increases.
• In SDS the total renewable energy ratio which includes solar and wind power, increases 22% compared to 2019 in 2040,
and the renewable energy ratio is 36%. In NZE, in 2050 there is a 59% increase compared to 2020, and the ratio is 88%.

• Demand for renewable energy sources is
expected to increase by 83% in 2040 from 2019.

Positive

Positive

To overcome the issue of climate change and bring about a carbon-neutral society, the Sumitomo Corporation Group is engaged in various renewable energy businesses such as
wind, solar, geothermal, hydroelectric, and biomass. While providing the stable supply of energy essential for the development of economies and industries in local societies, weare putting forward a policy of continuing to shift managerial resources to a power generation portfolio with low environmental impact. We have set goals to have the scale of ourrenewable energy provided at over 3GW and share the power generation capacity ratio to be move from 50% to 20% for coal, 30% to 50% for gas, 20% to 30% for renewableenergy.

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Our climate change initiatives： Disclosure based on TCFD
Strategy: Transition Risks and Opportunities Related to Climate Change <Scenario Analysis>
Resources sector
 Thermal coal and coking coalBusiness
environment
assessment

Our policies andmeasures

NZE／SDSSTEPS• In SDS, due to impacts from the shift from low-grade to high-grade coal, the reduction and streamlining of coal-fired
thermal power, and hydrogen reduction in steel, demand will fall 65% compared to 2019 in 2040.
• In NZE, demand for coal will drop rapidly. The creation of new coal mines and expansion of existing mines will become
unnecessary. Demand for coking coal will decrease at a slower rate than thermal coal. Existing production sources will
cover demand until 2050. Demand for coal will fall over 90% compared to 2020.
• In NZE, the implementation of CCUS is proceeded significantly in the 2040s, and CCUS will be applied to about 80% ofcoal production facilities in 2050.

• Demand for coal-fired thermal power generation
will decline, and by 2040, demand for coal will
decline by about 12% from 2019.

Negative

Negative

We will not acquire new interests in the thermal coal mine development, and we plan to aim for zero equity production volume from thermal coal mines. The proportion of thermal
coal interests in our energy portfolio is relatively small and we are maintaining satisfactory competitiveness. Going forward, each mine is scheduled to reach the end of its mine life
gradually. Regarding coking coal, with the shift to electric furnaces that use scrap and the practical application of iron-making process with low CO2 emissions, it is forecast thatdemand for coking coal will decrease in the long term. However, it is predicted that steel businesses that use blast furnaces with CCUS technology installed will be preserved forthe time being. We believe that the superiority of our high-quality coking coal interests will be maintained.

 Natural gas and LNG

Business
environment
assessment

Our policies andmeasures© 2021 Sumitomo Corporation

NZE／SDSSTEPS• In SDS, while gas-fired thermal power will replace coal-fired thermal power as a source of power, demand for natural gas
will remain persistent until around 2030, and in 2040 will decrease 12% compared to 2019. In 2040, demand for LNG will
increase about 1.5 times globally compared to 2020. In NZE, to bring about carbon neutrality by reducing gas-fired
thermal power, the development of new gas fields will not be necessary. Usage of natural gas will peak in the mid-2020s,
decrease after 2030, and in 2050 will decrease 55% compared to 2020, with LNG decreasing 60%.
• In SDS and NZE, gas fuel is increasingly replaced with hydrogen and biomass fuel, and mainly in Europe, regulations
may become stricter.

• There is no switch to renewable energy as a
power source, and as a replacement for coalfired thermal power, demand for natural gas and
LNG increases about 30% compared to 2019 in
2040.

Negative (NZE) / Neutral (SDS)

NeutralIn the transition phase to a low-carbon society, gas will be used as a replacement power fuel for coal. It will continue to play an important role as chemical raw material and fuel fortransportation.
In particular, it is anticipated that LNG demand will increase focused on China, India (which does not have a pipeline for import), and the ASEAN nations. It is expected thatbusiness opportunities will increase in the Asian Pacific (including India). Going forward, we will focus on strategic regions in the medium-to-long term perspective, and we will work
to create a natural gas and LNG value chain.

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ESG Quantitative
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Our climate change initiatives： Disclosure based on TCFD
Strategy: Transition Risks and Opportunities Related to Climate Change <Scenario Analysis>
 Metals and rare metals (Nickel, copper, and iron ore)Business
environment
assessment

Our policies andmeasures

NZE／SDS

STEPS• With the dissemination of renewable energy and electric vehicles, in NZE, demand for metal resources(rare metals) will increase seven times compared to 2020 in 2030, and in SDS will increase by roughly
four times compared to 2020 in 2040.
• In SDS and NZE, it is believed that demand for iron ore will increase steadily, supported by robust
demand for steel.

• While the dissemination speed of EV and renewable energy isslow, expansion to a certain extent is visible, and by 2040
demand, for metal resources will be roughly double compared to2020.
• Steel demand will increase compared to NZE and SDS, and as aresult, demand for iron ore will also increase.

Positive

Positive

Regarding nickel, to respond to growing global demand, we are proceeding with projects as a producer in the Republic of Madagascar. We sell the products to Japan, Europe,
North America, and Asia, and we are aiming to create further business opportunities.
Regarding copper, through investing in copper mines overseas, we are involved in copper refining and the sale and production of copper bullion which are the upstream of thecopper production value chain.
Regarding iron ore, through our projects in South African and Brazilian mines, we contribute to stable supply of commodities to Asia with a focus on China and Japan. Goingforward, so that we do not lose sales opportunities due to supply not keeping up with the rapid increase in demand for metal materials, we will continue to promote the securing
and expansion of procurement sources in line with increasing demand for rare metals in light of market trends, securing scarce resources based on trends in the circular economy.
With regard to iron ore, we will continue to secure sources for stable supply while paying close attention to the impact on demand due to changes in the iron-making and steelmaking processes in response to decarbonization in the steel industry, and also to the impact of an increase in the ratio of electric furnace steel.

Transportation sector
 Vehicles (Manufacture and sales of automobile parts/sales of finished vehicles)
Business
environment
assessment

Our policies andmeasures© 2021 Sumitomo Corporation

NZE／SDSSTEPS• In SDS and NZE, sales of passenger vehicles will remain steady, driven by economic growth in developing nations.
Sales will increase by 18% compared to 2019 in 2030. On the other hand, consumers' preference for car ownership willchange due to the development of MaaS.
• In SDS, EVs will account for roughly 40% of the sales of passenger vehicles by 2030. There will be a significant
reduction in demand for internal combustion engine parts.
• In NZE, the diffusion of EVs will increase with the introduction of restrictions in various countries. By 2030 EVs willaccount for 60% of the sales of passenger vehicles, and by 2035 the sale of gasoline passenger vehicles will be
forbidden. In SDS and NZE, carbon neutralization initiatives for the OEM supply chain will speed up.

• The sales of passenger vehicles will increase 30%
compared to 2019 by 2030. The EV ratio willremain at 20%, and there will be a limited
reduction in demand for internal combustion
engine parts.
• The carbon neutralization of OEMs will develop
gradually.

NeutralNeutralAt the Sumitomo Corporation, we are involved with the manufacture and sales of finished vehicles, automobile finance, and automobile leasing. The handling of internal
combustion engine parts is only a small proportion of the parts manufacturing business, so we consider the direct impact to automobile-related businesses due to the switch to
EVs to be limited. Also, as a response to carbon neutralization, including OEM supply chains, we will investigate the use of carbon-free energy and low-carbon and carbon-freetechnology in manufacturing and transporting parts. With the switch to EVs and developments in MaaS, changes to the business model of our automobile-related businesses areconceivable. However, we see these changes as business opportunities. We will develop new business foundations, including car sharing businesses and parking businesses,
creating added value for existing businesses, and reviewing our product portfolio.

32Sustainability of
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Corporation GroupFeatureEnvironment

SocialGovernance

ESG Quantitative
Data

Third-party
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Our climate change initiatives： Disclosure based on TCFD
Strategy: Transition Risks and Opportunities Related to Climate Change <Scenario Analysis>
 Shipping (Shipbuilding/ship ownership and operation)

Business
environment
assessment

Our policies andmeasures

NZE／SDSSTEPS• In SDS and NZE, demand for marine transportation will remain steady. In SDS, demand will rise roughly 3.3 times compared to2019 in 2070, and in NZE, it will rise roughly 2.7 times compared to 2020 in 2050. On the other hand, with IMO restrictions andthe dissemination of LNG ships, there is the possibility the demand for ships that emit large amounts of CO2 will decrease.
• In SDS, the rate of low-carbon-fuel (ammonia, hydrogen, and biofuels) will be a little over 5%, and the reduction in CO2 emissions
by improving fuels and optimization of logistics will be vital. In NZE, low-carbon-fuel will comprise less than 20% of all ships.
• By 2050, in SDS, more than 50% of fuel consumption will be low-carbon-fuels, and in NZE, it will be over 80%.

• The demand for marine shipping will
increase 3.6 times compared to 2019 by
2070.
• Demand for ships with high CO2emissions may decrease slowly.
Dissemination of low-carbon-fuels will
also be gradual.

NeutralNeutralAt the Sumitomo Corporation, we are involved in shipbuilding, and we also own and operate our own ships. As a result of CO2 reduction targets by IMO and changing preferencesfrom shippers, we assume that the shift from heavy fuel oil ships to low CO2 emission fuels and heavy oil dual-fuel ships will continue in the medium to long term. While monitoring
regulations of nations and trends in markets and technology, we believe that we will be able to create new business opportunities and flexibly respond to changes in the businessenvironment as a result of the move to a carbon-neutral society by promoting the review of the product lineup of our manufacturing businesses and our portfolio of ships.

 Aviation (Lease business)

Business
environment
assessment

Our policies andmeasures© 2021 Sumitomo Corporation

NZE／SDS

STEPS• While the behavior of some consumers has changed and they are avoiding using aircraft, demand for air travel is steady driven by
the economic growth of developing nations. In SDS, demand for air travel will increase around 2.5 times compared to 2019 by
2050. In NZE, demand for air travel will increase 1.7 times compared to 2019 by 2050.
• In SDS and NZE, the switch to fuel-efficient aircraft and engines will progress due to ICAO regulations. In 2030, SAF (Sustainable
Aviation Fuel) will comprise 7% of total aviation fuel consumption. In NZE, this will be about 18%, of which almost all will be biojet
kerosene (a type of liquid biofuel). In 2050, the SAF percentage will increase to roughly 50% in SDS and 78% in NZE, with theremainder being offset by BECCS (Bio-Energy CCS) and DAC (Direct Air Capture).

• Changes in consumer behavior will belimited. Demand for air travel will
increase 3 times compared to 2019 by
2050.
• The switch to fuel-efficient aircraft andengines will progress to a certain
extent, and the dissemination of SAF
will be moderate.

NeutralNeutralAt the Sumitomo Corporation, we are involved in the lease of aircraft and engines along with the manufacture of some aircraft parts. Going forward, it is assumed that the shift tofuel-efficient aircraft will continue in the long term due to ICAO regulations. However, for our aircraft and engine lease business, we procure new aircraft and engines for lease,reflecting on the demand from each passenger airline company. We also continuously replace our aircraft and engine portfolio through sales at the end of the lease. Therefore, bymonitoring market and technology trends and laws and regulations regarding aircraft fuel efficiency, we believe we can respond flexibly to changes in the business environment bycontrolling the risk of reductions in leasing fees and aircraft price.

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Our climate change initiatives： Disclosure based on TCFD
Strategy: Transition Risks and Opportunities Related to Climate Change <Scenario Analysis>
Material industry sector
 Steel (Steel sheets & tubular products manufacturing and sales)
NZE／SDS
Business
environment
assessment

Our policies andmeasures

STEPS• In terms of SDS/NZE, global steel demand is to remain robust until 2050.
• Green Steel activities, e.g., use of carbon-free energy and efficient hydrogen use, is to speed up, with SDS target set on
2070 and NZE target on 2050.
• In SDS/NZE, greater demand for decarbonization in the supply chain is expected from users.

• In addition to increased demand, material
efficiency has not declined, resulting in an
approx 30% increase in production in 2050
compared to 2019.

NeutralNeutralSumitomo Corporation engages in the processing and marketing of steel sheets, tubular products and other steel products. Because the business operation excludes nearly all of
the steel refining process, CO2 emission is limited. If demand for decarbonization in the supply chain rises among the end-users, of which the leading customers are in the fields oftransportation systems, household appliances, energy, etc., demand is likely to shift to recycling-derived steel products and in the long term to products that utilize decarbonizationand decarbonization technology, represented by direct reduction steelmaking utilizing hydrogen. For this reason, effort will be directed to cultivating business opportunities thatemerge from the carbonization of steelmaking technologies, in coordination with the leading customers and business partners.

 Cement (Distribution business)

Business
environment
assessment

Our policies andmeasures© 2021 Sumitomo Corporation

NZE／SDS

STEPS• Alongside growth in power generation with renewable energy sources and in energy-related infrastructure, the SDS target isset at 2040, with NZE target at 2030. Global cement demand is expected to increase but decline by 2050, remaining roughly
constant vis-à-vis the 2020 level.
• The ratio of clinker ash (cement material) that rates high in CO2 emission is expected to fall from roughly 71 to 60 percent interms of SDS and from 70 to 57 percent for NZE.
• In terms of SDS/NZE, roughly 2/3 of CO2 emission in the cement production process derives from raw materials. Carbon
neutrality will be promoted with CCUS, by switching from fossil fuel-derived energy to carbon-free energy.

• The growth in demand, combined with theabsence of dip in material efficiency, is
expected to result in increase in production
output by more than around 20% comparedin 2050.
• Clinker ash ratio does not decline, and little
progress is made in reduction of CO2
emission from manufacturing process.

NeutralNeutralSumitomo Corporation engages in cement distribution business. Because the business operation excludes nearly all of the cement production process, CO2 emission is limited.
While effort is underway for transition in fuel used in the cement productions process to clean energy sources and research conducted on replacement of limestone used as theprincipal raw ingredient with other materials, Sumitomo Corporation is utilizing its own information network to explore into effective CCUS technologies, etc., in the cement
industry.

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Third-party
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Our climate change initiatives： Disclosure based on TCFD
Strategy: Transition Risks and Opportunities Related to Climate Change <Scenario Analysis>
 Chemicals (manufacturing/trade)

Business
environment
assessment

Our policies andmeasures

NZE／SDS

STEPS• Alongside growth in power generation with renewable energy sources and in energy-related infrastructure, the global
demand for chemical products is expected to grow by 30% in 2050 vis-à-vis the 2019 level in terms of SDS. 30s%
growth is expected vis-à-vis the 2020 level in NZE.
• In terms of SDS/NZE, fossil fuels have been used as raw material for petrochemical products. For this reason, use offossil fuel is expected to remain to a certain degree, and carbon neutrality will be promoted through activities based on
use of carbon-free energy and CCUS.

• The growth in demand, combined with the absenceof dip in material efficiency, is expected to result inincrease in production output by more than 30% in
2070 vis-à-vis SDS.
• Market share of chemical products manufactured
with materials other than fossil fuels fails to rise,
resulting in continued application of conventional
manufacturing methods.

NeutralNeutralSumitomo Corporation engages in petrochemical product trade and manufacturing. In petrochemical product manufacturing,, naphtha produced by refining petroleum and gas isused as the principal raw material. Carbon dioxide is released in huge quantity from fossil fuel energy used in the synthesis and decomposition processes. In the long term
process of energy decarbonization, the supply of naphtha used as raw material is expected to decline, and demand for use of renewable energy is expected to grow. Sumitomo
Corporation expects to continue gaining revenues from global trade by adjusting changes in supply and demand in petrochemical product raw materials and finished productmarkets and at the same time plans to monitor trends in customer demands and in relevant technologies, in order to explore into business opportunities in the effective use of
biomass materials and chemical product manufacturing utilizing CCU (carbon dioxide capture and utilization).

 Aluminium (Smelting business)

Business
environment
assessment

Our policies andmeasures

NZE／SDSSTEPS• In terms of SDS, dissemination of electrified vehicles and reduction in weight of transport vehicles are expected toincrease demand in aluminum by roughly 20% in 2040 over the 2018 level (*).
• Although developments in aluminum is not explicitly referred to in NZE, demand for the material is to increase further,even when compared with the SDS, with wider use of electrified vehicles.
• In SDS/NZE, user demand is expected to grow for aluminum smelted with renewable energy-powered electricity.

• Dissemination of electrified vehicles, etc., is
expected to increase aluminum demand by morethan 60% in 2040 vis-à-vis the 2018 level.
• User demand for aluminum smelting powered withrenewable energy-derived electricity is not likely to
spread, and manufacturing with conventional
production method is likely to continue.

NeutralNeutralSumitomo Corporation's aluminum production business in southeast Asia chiefly utilizes hydroelectricity. For this reason, future risks pertaining to carbon pricing is expected tobe limited, and the business is likely to remain competitive in the medium and long range. For this reason, future demand for decarbonization in the supply chain from end-users
is expected to present business opportunities where Sumitomo Corporation is able to utilize its strengths.

(*) Limited to demand forecast data for smelted aluminum only; refer to WEO 2019 figures.
© 2021 Sumitomo Corporation

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Our climate change initiatives： Disclosure based on TCFD
Strategy: Transition Risks and Opportunities Related to Climate Change <Scenario Analysis>
Real estate sector
 Office buildings/residential building sales businessBusiness
environment
assessment

Our policies andmeasures

NZE／SDSSTEPS• In terms of SDS/NZE, real estate demand is expected to remain strong with growth in population in newly emerging anddeveloping countries. In terms of NZE, floorspace and commercial and residential buildings is expected to increase byroughly 1.2 times over the 2020 level by that year 2030 and by 1.7 times in that year 2050.
• In NZE, all new buildings built as of the year 2030 are to be compliant with "zero-carbon ready" criteria.
• In terms of existing structures in industrialized nations, roughly 28% are expected to be renovated to satisfy the criteria interms of SDS and roughly 45% in NZE. In NZE, 85% of all buildings in 2050 are to be compliant with "zero-carbon ready"criteria in 2050.

• Real estate demand is expected to remainrobust.
• Dissemination of environment-conscious
structures and changes in customer preferences
are expected to remain moderate

NeutralNeutralSumitomo Corporation engages in real estate business, including office buildings, commercial facilities, residential housing, distribution facilities and real estate funds. In view ofthe fact that energy consumed in buildings and homes is perceived as a source of CO2 emission and in face of demand for zero carbon emission, continued effort will be directed
to improving energy efficiency and to introduction of renewable energy in the course of installation of new facilities in new buildings and facility updates in existing buildings. For
office buildings, distribution facilities and real estate fund operations, action will be taken to acquire environment-related certification. In residential home business, attention is
directed to development of ZEH condominium complexes.

(*) Structure to undergo decarbonization by 2050 by means of high energy efficiency and choice of energy sources for the purpose and to achieve zero carbon emission without additional changes in facilities.

Progress in decarbonization across sectors
As the scene in the new decarbonization targets and rise in existing target levels by various countries at the April 2021 Leaders Summit on Climate, global acceleration isunderway for activities aimed at realizing carbon neutrality at an early stage. In addition to decarbonization effort by individual industries in each country and region, actionis underway to promote decarbonization across industries, with establishment of carbon pricing and promotion of sustainable financing.
The introduction and reinforcement of CO2 emission trade and carbon tax by various nations have combined with the carbon border adjustment mechanism under study
in Europe and other regions, raising the possibility of impact on supply chain in various industries across national and regional boundaries. Forecast on carbon pricing
differs by region. As of 2040, it is expected to be in the range of 125-140 dollars/t-CO2 in SDS and 30-205 dollars/t-CO2 in NZE scenario. Carbon pricing levels in termsof carbon tax and emission trade in the future are expected to hugely affect business performance, chiefly in the carbon-intensive industries.
Additionally, financial support is provided in the use of decarbonization and decarbonization technologies in various nations and regions. For this reason, effort isunderway to develop sustainable financing guidelines, including the EU taxonomy.
Because the weight of carbon-intensive manufacturing businesses is limited in Sumitomo Corporation's business portfolio, the direct impact of the aforementioned
developments is expected to be limited. However, attention will be directed to the impact of these decarbonization promotion measures and policies on the supply chainsthat are linked to Sumitomo Corporation’s business operations, in order to explore into new business opportunities with attention to changes in technologies and businessmodels through decarbonization.

© 2021 Sumitomo Corporation

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Our climate change initiatives： Disclosure based on TCFD
Strategy: Physical risks related to climate change and countermeasures
Because Sumitomo Corporation Group engages in business activities over a wide range of industrial sectors in various countries, possible escalation in climate change is likely to cause thefollowing risks to become chronic and impact its business operations.
(For sector category and characteristics of risks per sector, referred to UNEP FI reports on physical risks, etc. / For analysis on water stress and temperature rise, refer to Representative
Concentration Pathway (RCP) 8.5 scenario by the Intergovernmental Panel on Climate Change (IPCC).)
Awareness of the impact of physical risks in each sector
Chronic
AcuteSectorPrincipal business related to the risk described at leftPower
generation

Water shortage resulting in decline in production
efficiency and in operation efficiency

Damage on facilities, disruption of operation, etc.,
caused by flooding and huge rainstorms

Thermal power generation in Southeast Asia, Middle East and Africa; renewable energy
power generation, including solar power generation, etc., in Japan

Resource &interest

Rise in temperature & water shortage resulting in
decline in production efficiency, disruption in
operation, risk of flooding with rise in sea level, etc.

Damage on facilities, disruption of operation, etc.,
caused by flooding and huge rainstorms

Mining operations in North America, South America, Australia, Africa, etc.; energy
interests in Southeast Asia, Middle East & Europe; and sales of such resources andenergyRaw materials

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

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

Manufacturing, processing, sales, etc., of metal products, transportation equipment andparts, chemical products, materials, etc.

Transportation
systems

Water shortage resulting in decline in production
efficiency, disruption of operation, etc.

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

Manufacturing and sales, etc., of transportation equipment and parts

Real estate

Delay in project schedule, rise in air-conditioning
cost, decline in property value with a rise in sea
level, etc., resulting from rising temperature

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

Office building leasing, development of commercial complexes & distribution facilities,
condominium sales, etc.

Agriculture

Rise in temperature & water shortage resulting in
decline in production efficiency, etc.

Disruption in operation, etc., caused by hugerainstorms, flooding or drought

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

Physical risks are largely divided into chronic risks that have continual and chronic impact on business activities (e.g., rise in average temperature, change in rainfall pattern and rise in sea
level) and acute risks caused by unforeseen disasters (e.g., escalation of abnormal weather conditions such as huge rainstorms, flooding, drought, etc.). The impact is wide-ranging,including direct impact related to production site facilities and working conditions and indirect impact on a broad range of supply chains for raw materials and products. In view of Sumitomo
Corporation's business operations over a broad range of fields and regions, studies will be conducted on investments related to impact of the region's weather conditions, geographicalfactors, etc., continual assessment after project participation, identification of its own scope of liability under contract terms and conditions, nonlife insurance contracts, etc., for managementof such risks. In the following analysis, we focused on power generation, energy and natural resources, real estate, and agriculture, and analyzed their physical risks based on the location of
their main sites, focusing on two main factors: water stress and continuous temperature rise.
 In the study of resources & energy interest business in terms of continual temperature increase risk, there were regions found to have relatively high risk of long-term increase in thenumber of days when temperature reaches 35°C or higher and possibility of water shortage. Sumitomo Corporation plans to execute risk control through assessment of disaster risks visà-vis geographical conditions, etc., definition of working conditions with sufficient attention to temperature and other conditions, subscription to nonlife insurance, etc.
 The analysis of water stress on power generation business showed there are regions with possibility of possible water shortage. However, water used in the business operation, e.g.,cooling water for the power generation operation, etc., is supplied by seawater, water production facilities within the power plant, etc., leading to the conclusion that the risk of operation
disruption caused by water shortage, etc., is not significant.
 In the real estate business, sufficient research and analysis are being conducted on flooding risks for various locations during the development studies stage. Property projects are being
selected through conservative assessment of risks based on information from hazard maps and specific conditions of each property site, etc. In promoting project development,
measures are being taken on physical risks in order to minimize them. For this reason, risks in the business portfolio as a whole is not considered significant.
 In the analysis of temperature rise and water stress for major agricultural sites in each country, there are regions with possibility of increase in the number of days when temperature rises
to 35°C or higher and of possible water shortage. Although adverse impact is anticipated on such agricultural operations if such risks affect agricultural product quality, output, etc.,
Sumitomo Corporation has diversified crop varieties and regions in the business and has therefore built risk resistance to a certain degree in terms of total performance.
© 2021 Sumitomo Corporation

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Our climate change initiatives： Disclosure based on TCFD
Risk Management
 Our Group's activities cover businesses across a broad range of fields and regions, and involve various social issues. We always attach great importance to thesesocial issues, and in order to appropriately control the social and environmental impact of the entire Group's business activities, establish policies such as theEnvironmental Policy, Human Rights Policy, CSR Action Guidelines for Supply Chain Management, Anti-Corruption Policy, and Compliance Guiding Principles, andpublicize and thoroughly enforce them within the Group.
 We evaluate social and environmental risk and confirm response measures as part of our deliberation processes when considering and implementing new businessfrom a broad perspective. In particular, with regard to climate change, we confirm the following with regard to risks (and opportunities) related to business continuity
being impeded by the inability to appropriately respond to changes in the business environment resulting from social and environmental problems such as climatechange.
••••

The impact of climate change such as the frequent occurrence of natural disasters and abnormal weather
The impact of the introduction of regulations
The impact of technology changes, etc.
The potential for the expansion of business or the improvement of business performance through advances in climate change mitigation and adaptation toclimate change With regard to our existing business, as well, we regularly monitor the overall management status of these risks to each business, including social and environmental
risks. In addition to managing risk related to individual businesses, we assess the status of companywide social and environmental risks and develop systems thatenable these assessments to be used to make strategic management decisions.
 With regard to the handling of the risks of climate change, each business unit assesses the introduction of regulations and market changes for related business sectors
and conducts business activities, and as a part of companywide portfolio management, the Corporate Sustainability Department summarizes the status of major risks
to the Group, taking into consideration global efforts relating to climate change and regulatory trends. The results are periodically reported to the Management Council
and the Board of Directors. If there are any unacceptable risks from the perspective of the portfolio as a whole, measures including reduction of exposure areinvestigated with organizations responsible for risk management.

© 2021 Sumitomo Corporation

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Our climate change initiatives： Disclosure based on TCFD
Metrics and Targets

Results

Targets：Effort for carbon neutrality

CO2 Emissions

The Group has adopted the following as its basic policy on climate change issues.
 Reduce CO2 emissions 50% or more by 2035 (compared to 2019)
Power generation business
CO2 emissions: Reduce 40% or more (of which 60% reduction or more forcoal-fired power generation business)
Net ownership generation capacity: coal 20%, gas 50% renewables 30%
Fossil fuel upstream business
CO2 emissions (*1): Reduce 90% or more
 For coal-fired power generation business, no further involvement in IPP(Independent Power Producer) nor EPC (Engineering, Procurement,
Construction) business and will end all the coal-fired power generation
business in the late 2040s. For thermal coal mine interest, no additional
investment and aim to achieve zero equity production from thermal coal minesby 2030.

Index(Thousand t-CO2e)
Result of 2019

（The base year）

59,93955,367▲7.6％

50% or morePower generation
business (*1)

43,126

40,581▲5.9％

40％ or more

34,45232,337▲6.1％

60％ or more

15,80813,811▲12.6％

90％ or more

Of which, coal-fired
power generation (*1)

Fossil energy
concession

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

Net ownership generation capacity portfolio（Figures notedin brackets indicate net ownership generation capacity）

Directemissions1

Sumitomo
Corporation/
Subsidiaries
Associatedcompanies(equitymethod)2

from acquired
electricity etc.

Scope Other indirect3

emissions

Result of 2020

Coal

54％
(5,240)53％(5,208)

20％

Gas

31％
(3,011)31％(3,011)

50％

Renewable energy (*2)

15％
(1,397)16％（1,509)

30％

Total

100%
(9,651)

100%(9,731)

Approx. 1 million tons

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

Approx. 43 million tons

Fossil energy
concession
Approx. 16 million
tons*1 Indirect CO2 emissions by others associated with the use of energy resources produced*2 As of 2019

© 2021 Sumitomo Corporation(MW)

Result of 2019
（The base year）

Index

Targets：Effort for carbon neutrality(*2)

Scope Indirect emissions

Percentage of
Reduction targets of 2035
changeEntirety

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

Scope

Result of 2020

Net ownership generation capacity of Renewable energy
Index

Renewable energy (*2)

Result of 2019
（The base year）
1,397

Result of 2020
1,509

Targets of 2035-

(MW)
Targets of 2035
3,000 or more(*2) Includes capacity held by a fund whose management company is 51% owned by Sumitomo Corporation.

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DX X Sustainability
Through its Group companies, Sumitomo Corporation conducts business globally on a wide range of industrial fields and has many business sites and customer bases. In order to solve onsite problems, create new customer value, and solve social issues, in addition to providing functions for trading and business investment, we collaborate with Group companies, such as
SCSK, to provide digital transformation solutions from the comprehensive perspective unique to an integrated trading company.

Business description

Business description

Initiatives for Inter-Company EV Sharing and Energy Managing Using EVs

Digital transformation
communication

Against a backdrop of decreased opportunities for mobility in conjunction with thewidespread practice of remote work due to the COVID-19 pandemic and the acceleration of
initiatives that take environmental issues into consideration, the optimal status of companyowned vehicles and vehicles for company use is being called into question, and there are
expectations regarding the use of digital technologies for optimum use.
The Sumitomo Corporation Group is developing a MaaS for Business service that proposes
the best mobility mix from among the various forms of mobility available to corporations, andwe are currently working to develop a new service model, referred to as e-MaaS for
business, that utilizes electric vehicles (EVs). In collaboration with Nippon Gas Co., Ltd. and
REXEV Inc., we launched a trial of an EV car sharing service for corporate clients in March
2021. Two EVs are located in a car port with solar panels on the roof. The vehicles are used
for car sharing by multiple companies during business hours. In addition, digitaltechnologies are employed to measure the rate of charging using renewable energy
generated by the solar panels, calculate the amount of CO2 emissions reduction, and verify
the possibility of energy management and environmental contribution.
In addition to achieving optimal use of company cars and giving consideration to theenvironment, in the future, we will investigate even more convenient and appealing newservices and create new value.

in

the

production

site

utilizing

local

5G

In order to resolve the issues of labor shortage and lack of skilled workers brought on byfalling birthrate and aging population, automation, greater work efficiency, etc., have begun
urgently necessary in recent years in manufacturing in Japan. To resolve these issues,interest is growing in the use of local 5G communication as infrastructure (*).
In 2021, Sumitomo Corporation conducted a pilot experiment for production site DX utilizing
local 5G network at Summit Steel Osaka Factory, in cooperation with Sumitomo Corporation
Global Metals, Sumitomo Shoji Machinex, Grape One, etc. The experiment specificallyfocused on automation of visual inspection through high-resolution image AI analysis andremote quality inspection with high-resolution image transmission in the local 5G
environment. It became an effort that paves the way for the future of the production plant
where various solutions are put into operation in a local 5G environment. The knowledge
and experience gained through the experiment utilizing the local 5G infrastructure that
supports social change is expected to be applied beyond manufacturing to a broad range ofsectors, including medicine.
(*)The pilot experiment was selected by the Ministry of Internal Affairs and Communications(MIC) as a consignment project involving the investigation/examination of technologicalconditions for local 5G at manufacturing plants (automation of visual inspections and remoteverification of quality) in connection with its FY2020 Development Demonstrations for
Realizing Local 5G to Solve Local Issues.

Beyond Mobility
Nippon Gas head office parking lot (Chuo-cho,Kagoshima City)© 2021 Sumitomo Corporation

Tackling the challenges of new “Beyond
Mobility” business that integrates mobility anddifferent industries

Summit Steel Osaka Factory in operation (1)Summit Steel Osaka Factory in operation (2)40Sustainability of
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Environmental management
Policy and Concept
Throughout its 400-year history, Sumitomo Grouphas pursued industrial development in harmony
with local communities and the natural environment.
Based on this foundation, Sumitomo Corporation
Group pursues business activities in such a way as
to promote environmental conservation.
Recognizing that various initiatives such as creating
a low-carbon society that alleviates climate change,
preserving biodiversity and the global environment,using energy, water and resources sustainably,
preventing pollution and controlling waste
emissions are the most important and long-term
concerns that all individuals and organizations must
address, we have established our Environmental
Policy as detailed on the right.
Sharing this policy, Sumitomo Corporation Group
companies are committed to reducing theenvironmental impacts of their business activities
as well as to improving the environment throughtheir business activities, based on the ISO 14001
environment management system.

Sumitomo Corporation Group Environmental Policy
Ⅰ. Basic Policy
The Sumitomo Corporation Group recognizes that environmental issues are global in scale and that they are long-range
concerns affecting future generations. As a global organization, the Sumitomo Corporation Group, through sound businessactivities, will strive to achieve sustainable development aimed at both social and economic progress and environmental
preservation.

Ⅱ. Basic Guidelines
In pursuing its diversified business activities both within Japan and overseas, the Sumitomo Corporation Group shall comply
with the following guidelines, and, through cooperation between its Group companies, work to achieve the aims 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.

© 2021 Sumitomo Corporation

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Environmental management
SystemTargets and Results

Sumitomo Corporation Group has established, based on the environmental policy, theTaking account of the results of the 2℃ target set forth by the Paris Agreement, Sumitomo
Corporation sets long-term goals for electricity consumption, water consumption and waste
emissions and promotes environmental improvement activities respectively.

environmental management structure with the Corporate Sustainability Committee as theLong-term goals (Non-consolidated in Japan)

Environmental Management Structure

center of the structure. As for the ISO 14001 Environmental Management System (EMS),
since Tokyo and Osaka offices of Sumitomo Corporation acquired the Group's first ISO
14001 certification in June 1999, the coverage of the system has been extended
continuously. About 20,000 employees in domestic locations of Sumitomo Corporation andcertain group companies participates in these environmental management activities. At the
ISO 14001 Group Companies Conference, which consists of Sumitomo Corporation andISO 14001 integrated certification group companies, we share the environmental activities,
and report to Corporate Sustainability Committee if necessary. Depending on theElectricity Consumption
Water Consumption
Waste Emissions

To reduce water consumption per employee by an average ofat least 1% annually from base year of FY2010.
To reduce waste emissions per employee by an average of atleast 1% annually from base year of FY2010.

The targets converted from long-term goals, results of FY2020, targets of FY2021 are as
follows.
Index

importance of the subject, Corporate Sustainability Committee discusses and reports to theManagement Council and the Board of Directors.

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

Electricity
Consumption

Water
Consumption

Waste Emissions

Results of theBase year

Targets of
FY2020Results of
FY2020Targets of
FY2021

Consumption
(MWh)

7,859

5,673

3,074

5,553

Intensity(MWh/m2)

0.10790.1006

0.0551

0.0996

Consumption(m3)

32,191

20,4504,234

20,190Intensity(m3/employee)

6.93

6.26

1.3

6.2

Emissions
(t)

508

323

43

319

Intensity(t/employee)

0.109

0.099

0.013

0.098

The figures in the table below are calculated from the fuel, heat and electricity consumption
data with appropriate GHG emission factors, and the GHG emissions of FY2013 (the baseyear) are calculated as 5,626t-CO2e and targets and results for FY2020 and FY2021 are as
follows.
Index
ISO14001 Integrated Certification Group Companies (Sumitomo Corporation and 25 Group companies as of April 2021)
Group Companies with ISO 14001 Certified (19 Group companies as of June 2021)© 2021 Sumitomo Corporation

GHG Emissions

Total（Scope1・Scope2） (t-CO2e)

Results of theBase year
5,626

Targets of
FY2020
3,678

Results of
FY20202,396

Targets of
FY2021
3,514

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

FY2020 Major Environmental Achievements

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

Pursue environmentallysound projects• Expand renewable energy businesses• Promoted renewable energy businesses both in Japan and abroad: participated in an offshore wind
power generation project in Europe, implemented the solar power project in Australia and in Minamisoma
City in Fukushima Prefecture, Japan, in Thang Long Industrial Park II, Vietnam, geothermal power plantin Indonesia, use of renewable energy fund, etc• Promoted businesses to create a recycling-oriented society, to reduce environmental burden: Sustainable
forest management, verification of a large scale power storage system utilizing reused EV batteries in
Satsumasendai City in Kagoshima Prefecture, investment in Taiwan’s largest electric bus manufacturer,
Promotion of hydrogen-related businesses including efforts for Japan-Australia Hydrogen Supply Chain
Development, Sales of lithium carbonate produced in the U.S, Investment in a plant-based plastic
substitute material manufacturing business, etc• Promote businesses that help create a recyclingoriented society• Promote other businesses to reduce environmental
burdenManage and reduce
environmental burden• Measure and reduce electric power/gas consumption
and waste generation at all sites in Japan• Measure and reduce the environmental
burden/impact of business activities• Assess environmental impact in relevant supply
chains and work to reduce such impact

Promote environmental
education andcommunication related toenvironmental issues• Hold events, including awareness-raising seminars
related to environmental conservation• Promote effective use of environmental management
systems• Expand disclosure of non-financial information© 2021 Sumitomo Corporation• Reduced the consumption of electric power/gas/water and waste generation at office year-on-year• Measured consolidated environmental data
• Conducted environment assessments on mine development and mining operation businesses abroad andon domestic construction and real estate businesses, as well as Environmental Management• Continued to hold trainings on environment-related laws/ordinances• Held seminar on climate change measures• Conducted e-learning environmental course which was completed by 100% of new employees• Publication of ESG Communication Book 202043

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Environmental management
Activities
Internal Environmental Audit

Environmental Educational Activities

Sumitomo Corporation conducts internal environmental audits on an annual basis

Sumitomo Corporation Group develops a variety of educational programs to help its

to ensure the environmental management system of Sumitomo Corporation andemployees engage in environmental conservation. We raise environmentalgroup companies with ISO14001 integrated certification are properly functioning.

awareness among all Group employees by organizing such programs as trainings onenvironmental laws and regulations as well as global environmental issues given by<Audit Priority Items>

outside experts.

(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 2020, serious nonconformity was not found.

External Audit
In March 2021, the third-party audits were

Theme

Summary

Number of
Activities

Training on the
ISO 14001
Environmental
Management System

The management principles,environmental contribution activities
and the processes of an environmental
management system in accordance with the
ISO 14001 international standard.

Twice a year

Training for internal
environmental
auditsThe basics and processes of internal
environmental audits, throughexercises, to be able to conduct
audits effectively.

Twice a year

conducted by an independent auditingorganization,

Japan

Quality

Assurance

Organization, for the renewal of the current
ISO 14001 certification status. We received
approval as a result of the audits.
ISO14001 Management System Certificate© 2021 Sumitomo Corporation

Practical knowledge, including
Trainings on industrial responsibilities of industrial waste
waste disposal
generators, contract criteria andproper disposal methods.

Twice a year

Trainings onenvironmental laws
and regulations

The latest trends in environmental
laws and regulations, basic knowledge onthese, and points to note to comply with thelaws and regulations.

Twice a year

Basic environmental
education（e-learning）

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

once a year

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Climate change
Policy and Concept
The impact of climate change is a
global threat to the stability of society
andtheenvironment
acrossgenerations. Considering that climatechange is also a serious risk to ourgroup, which is globally engaged invarious business areas, we haverecently reviewed the group‘s policy on
climate change in response to relevantinternational trends. For details of thepolicy, please refer to the Special
Section on Page 25.

Activities
Renewable Energy Related BusinessWe have entered power generation business using renewable energy, which is expected to grow as a medium- to long-term
energy source, contributing to mitigating climate change.
As of March 31, 2021

Fuel

Solar
power

Power plant© 2021 Sumitomo Corporation

Generation
capacity（MW）

Country

Generation
capacity（MW）

Northwind

Belgium

216.0

Nobelwind

Belgium

165.0

Northwester2

Belgium

219.0

Galloper

UK

352.8

Fuel

Power plant

Osaka Hikarinomori Project

Japan

10.0

Solar Power Saijo

Japan

29.0

Solar Power Kitakyushu

Japan

16.0

Solar Power Tomakomai

Japan

15.0

Japan

59.9

Race Bank

UK

573.3

Japan

32.3

Summit Handa Power

Japan

75.0

EVM/EVM2

Spain

14.0

Summit Sakata Power

Japan

50.0

Oga Wind Power Plant

Japan

28.8

Summit Myojo Power

Japan

50.0

Japan

20.0

Sendai-ko Biomass Power Japan

112.0

China

50.0

Muara Laboh

Indonesia

85.0

Stanton Wind Energy

USA

120.0

CBK

Philippine
s

792.0

Cimarron Ⅱ Wind

USA

131.1

Ironwood Wind

USA

167.9

Dorper Wind

South
Africa100.0

Mesquite Creek Wind

USA

211.2

Solar Power
Minamisoma/Kashima
Solar Power
Minamisoma/Haramachi

Summit Wind Power(Kashima)
Datang Sino-Japanese(Chifeng) New Energy
Wind
power

Country

Offshore
wind
power

Woody
biomass

Geothermal
Power
Hydraulic
power

45

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Climate change
Activities
Other Eco-Friendly BusinessBusiness description

To address climate change issues, we have entered power generation businessusing renewable energy. Our efforts also include eco-friendly business using newtechnology to promote the use of renewable energy and to increase energy
efficiency.

Project

Details

Secondary Useof Lithium-ion
Batteries for
EVsPower storage business by recycling lithium-ion batteries used forelectric vehicles (EVs), enabling stable power supply with renewable energy
sources and stable power supply by power companies and maintenance of its
quality.

Production of
CO2-FreeHydrogenCO2-free hydrogen can be produced via electrolysis of water using renewableenergy such as solar, wind, hydro power, and geothermal power. The goal is tocreate a supply chain for CO2-free hydrogen from two perspectives: to build“local production for local consumption” model, which aims to expand the use ofhydrogen by fostering demand based on local characteristics; and to create aninternational large-scale value chain that manufactures and transports large
volume of hydrogen in areas with abundant sources of renewable energy.

Initiatives forcreating acarbon fiber
business

We are considering expanding into the business of manufacturing and recyclingbase materials and composites for carbon fiber, which are lighter and stronger
than conventional materials such as steel.
Carbon fiber composite materials are increasingly being used for a variety of
applications, including aircraft, automobiles, wind power generation, pressure
vessels, and sports/leisure equipment. They will help reduce environmental
impact by conserving energy through weight reductions.

CCUS (Carbon
Capture,Utilization andStorage）

We are a shareholder of Japan CCS Co., Ltd. (JCCS). The company isconducting demonstration tests on the use of CCS technology, which involves
capturing and storing CO2 in the ground, as well as chemical synthesis of CO2.
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. Since 2021,
the company has been participating in the Asia CCUS Network to shareknowledge with and educate Asian countries with regard to CCUS.

© 2021 Sumitomo Corporation

Ecological Solution Using Solar Panels
T-Gaia Corporation, which operates about 2,000 mobile phone shops in Japan,
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 shops, distribution warehouses, restaurants andother facilities. The use of clean power generated by solar panels helps reduce CO2
emissions and address climate change. It also allows shops 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 is also planning to deploy electric vehicles(EVs) as an energy storage combined with power generation system in cooperation
with Sumitomo Mitsui Auto Service Company, Limited, which is engaged in car leasing.
In the event of a disaster, electric power will be supplied from solar panels as well as
the batteries of EVs to resume the operation of shops as quickly as possible and toensure the safety and security ofcustomers and staff members.

Solar panels
DOCOMO Shop
Use of clean power

Use as emergency
electric power supply

Use surplus
power for EVs

Battery chargers: the bottom left of the picture Installation of solar panels, EVs and battery chargers at
mobile phone shops

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Climate change
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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 conduct market research on energy storage systems, promote
the sale of these systems, and introduce them in Japan and other areas in Asia.
The energy storage system provided by Corvus Energy consists of 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 lessvibration and 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, andlabor-saving inspections, and eventually contributes to achieving zero emissions ofgreenhouse gases from ships.

© 2021 Sumitomo Corporation47

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Climate change
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Business description

Business description

Green Building Initiatives

Use of Agricultural Soil Carbon Storage technology

In our real estate business, we have formulated and implemented basic policies related to environmental, social

Sumitomo Corporation and Indigo Agriculture (hereinafter, “Indigo”) are pleased to announce thatand governance (ESG) issues.

the parties have entered into a Memorandum of Understanding to explore new businessAs a real estate management company, Sumisho Realty Management Co., Ltd. believes that incorporating ESG

approaches to improve the sustainability of Sumitomo's existing businesses, looking at a wide

elements into investment decisions and operation processes is essential to maximizing value of medium- to long-spectrum of areas centering on agricultural technology and soil carbon storage in Japan and Asia.

term investor. For SOSiLA Logistics REIT, Inc. and other fund properties under the company’s management, it
has had its real estate performance evaluated by CASBEE, DBJ Green Building, LEED, BELS, and so on. Also,
SOSiLA Logistics REIT Inc. has been awarded “4 Stars” in the 2021 GRESB Real Estate Assessment and thesecond highest “B Level” for the GRESB Public Disclosure, which assess the width of ESG disclosure.

●Acquisition of major environment-related certifications at fund properties
managed by Sumisho Realty Management Co., Ltd. (as of July 2021).
Certification Obtained

CASBEE: 6 properties

LEED: 3 properties

BELS：7 properties© 2021 Sumitomo Corporation

Property NameSOSiLA Yokohama Kohoku
SOSiLA Sagamihara
SOSiLA Kasukabe
SOSiLA Kawagoe
SOSiLA Nishiyodogawa I
SOSiLA NishiyodogawaⅡ
203 North LaSalle
Miami Tower
Atlanta Financial Center
SOSiLA Yokohama Kohoku
SOSiLA Sagamihara
SOSiLA Kasukabe
SOSiLA Kawagoe
SOSiLA Nishiyodogawa I
SOSiLA Ebina
SOSiLA NishiyodogawaⅡ

Evaluation
Rank A
Rank A
Rank A
Rank A
Rank A
Rank APLATINUMGOLDSILVER
★★★★★
★★★★★
★★★★★
★★★★★
★★★★★
★★★★★
★★★★★

One potential collaboration includes Sumitomo’s investment in agricultural carbon offsets throughIndigo Carbon, a program designed to support farmers in transitioning to practices that reduce
atmospheric carbon dioxide levels by maximizing soil carbon sequestration and abating on-farmemissions. Agriculture, currently a major carbon emitting industry, has the potential to be anature-based solution to climate change. Through a set of farming methods, known asregenerative practices – including crop rotation and cover cropping – farmers have the ability tocurtail on-farm carbon emissions and pull atmospheric carbon dioxide into their soils. To support
farmers in transitioning to these practices, the Indigo Carbon program provides a financial
incentive to farmers in the form of a third-party-verified carbon credit for soil carbon
sequestration and on-farm emissions reductions. Sumitomo Corporation will collaborate with
Indigo to explore new businesses approaches tohigher added value for existing businesses, looking〈Environmental Preservation
Agriculture〉
Green manure, crop rotation,
Using compost, etc.

at a wide spectrum of business areas centering on
agricultural soil carbon storage. Additional areas of

Respiration,
photosynthesis

exploration include: sale of carbon-neutral LNG andsteel oil/gas pipes with carbon credits; generation ofcarbon credits in Japan and Asia; and expanding the
distribution of Indigo’s biological seed treatments.
Under the Agreement, Sumitomo Corporation andIndigo are exploring potential paths to addressing the
global challenge of achieving a low-carbon society.

Degradationbymicroorganis
ms

Soil
CarbonCarcasses,
crop
residues,
etc.
Undecompose

organic carbond(Long-term
storage)

Agricultural Soil Carbon Storage

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Climate change
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Business description

Business description

Promoting an Energy-saving Society through Funding Startups

Efforts to Establish an International CO2 Free Hydrogen Supply Chain

We invest in Elephantech Inc., which has successfully developed its original methodof manufacturing flexible printed circuits (FPC) board based on inkjet printing
technology. This technology can reduce waste, energy consumption and water
consumption to less than one-tenth compared to the conventional method, in which

Sumitomo Corporation, in collaboration with the Sarawak Economic Development

unnecessary parts of copper foil are melted, thus significantly reducing
environmental impact. Unlike the conventional technology designed to remove
unnecessary parts, the inkjet-based manufacturing technology allows the printing ofmaterial only on the necessary parts. It is expected that this inkjet-based technology
will become the international standard in the future.
Automobile manufacturers that aim to reduce the weight of their vehicles haveshown an interest in the application of this technology to In-Mold Electronics (IME,
integral molding of resin and electronic circuits). We, in cooperation with othercompanies that invested in Elephantech at the same time we did, will focus ourefforts on creating new value based on Elephantech's technology. We will aim, forexample, to establish global supply chains in the FPC licensing business andSilver nanoink
commercialize in-vehicle IME.
Copper plating
Base material
printing

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

© 2021 Sumitomo Corporation

The simple manufacturing process canshorten the lead time.

Utilizing the plentiful water resources and hydroelectric power available in Sarawak, Malaysia,
Corporation (SEDC) and ENEOS Corporation, is studying the production of CO2-freehydrogen, hydrogen utilization in Sarawak, and the export of hydrogen to Japan in the form of
MCH (methylcyclohexane).
In November 2019, we launched a feasibility study with SEDC, a company operated by thestate government, and ENEOS Corporation joined the project in October 2020. We will begin
by producing CO2-free hydrogen for local consumption by 2023, and once we have
expanded hydrogen utilization and production in the state, we will promote the export ofhydrogen to Japan via MCH and thus contribute to establishing a CO2-free hydrogen supply
chain.

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 to realize a low-carbon
society and a recycling society, and to compliance with environment-related laws andregulations. When assessing whether to join membership 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. However, due to anincrease in water demand as a result of population growthand economic development, there will be more and moreareas where water will become scarce. According to theOrganization for Economic Co-operation and Development(OECD), water demand is projected to increase by 55%
between 2000 and 2050 and, in 2050, 240 million people will
have no access to clean water and 1.4 billion people will be
without access to basic sanitation.
Our Group conducts its business around the world, including
in highly water-stressed areas. Fully recognizing thefiniteness of water resources, we approach relevant issues
both in terms of risk and opportunity through our efforts to
reduce water consumption, improve efficiency, and establish
water infrastructure.

活動
Activities
Water Business
While water demand is expected to increase on a global basis as a result of population growth, urbanization andindustrialization, the infrastructure environment to ensure the supply of safe and hygienic water has not been improved andwater issues are expected to become even more serious. In response, in the 21st century, water business that aims toaddress water issues has started attracting people's attention globally. Increasing awareness 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 have been expanding ourwater business from BOOT and BOO business*2 using private-sector capabilities*1, such as water and sewage treatment andseawater desalination, to fully privatized business in promising markets around the world, including areas with rapidly
increasing water demand. We have realized substantial achievements in these business areas. We will continue to take onchallenging issues in globally expanding and multifaceted water business 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 traditionally been 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 thebusiness 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 be maintained by thebusiness operator.

Business description

Business
category

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

Water supply andseweragebusinessUK

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

Water supply
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.

Sewagetreatment
businessOman

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

Fresh water
generation
business

Country© 2021 Sumitomo Corporation50

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Business description
Water Business in Brazil
We hold shares in BRK Ambiental, the largest private water supply and sewerage company in Brazil, with 23 subsidiary companies engaged in water supply andsewerage and industrial water treatment, and have been involved in water business in Brazil. Due to the low penetration rate of water supply and sewerage systems
in Brazil, infrastructure needs to be established and relevant business operations need to be improved. The aim of our business project is to provide services of watersupply and sewerage in about 100 municipalities in 13 provinces with about 15 million residents in Brazil. We contribute to expanding the use of water supply andsewerage systems and improving their operational quality in Brazil with high quality Japanese operational know-how and technology.
We use our expertise gained through our extensive experience in water business and send our knowledgeable employees to operate water business in Brazil. We
consider that the stable provision of water infrastructure contributes to improving the regional water environment and furthermore developing regional communities.

Sewage treatment plant in Rio Grande do Sul Province© 2021 Sumitomo Corporation

Water treatment plant in the State of São Paulo51

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Biodiversity
Policy and Concept

BBOP Principles on Biodiversity Offsets

Sumitomo Corporation Group’s business activities largely depend on thewealth of Earth’s diverse living organisms as well as from the biodiversitythat is generated by their many networks. Therefore, our Environmental

1

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

2

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

3

Landscape Context: A biodiversity offset should be designed and implemented in a landscapecontext to achieve the expected measurable conservation outcomes taking into account available
information on the full range of biological, social and cultural values of biodiversity and 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 taken place. Offset design
and implementation should avoid displacing activities harmful to biodiversity to other locations.

6

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

7

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

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

9

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

10

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

Policy recognizes placing great importance on preserving the environment,
including the natural ecosystem and biodiversity as an important issue forus. We make efforts to understand how our business activities that may
have a significant impact on biodiversity depend on such biodiversity, as
well as what kind of impact such activities have on biodiversity, in order tominimize 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
Business and Biodiversity Offsets Program (BBOP) is an initiative toprepareinternational

standards

regardingbiodiversity

offsets,

participated in by companies, governments, NGOs and other specialists.
BBOP is referred to by the Convention on Biological Diversity and has
become recognized as an international standard regarding biodiversity
offsets. We, as a Japanese company, participate in the program throughthe Ambatovy Project in Madagascar. (Refer to the next page.)© 2021 Sumitomo Corporation52

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Biodiversity
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Business description
Ambatovy Project Contributing to Sustainable Development in Madagascar
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, one of the largest-scale mine development projects in the world,which has been developed since 2007 in preparation for increasing demand for nickel,
cobalt and other metals.
In the Ambatovy Project, many new facilities, such as mining sites, refinery plants andpipelines, need to be constructed and operated, which poses substantial impacts on thesurrounding environment. Particularly in Madagascar, there remains a globally precious
natural environment where as many as 1,000 species of endangered animals are living.
We give careful consideration to these natural habitats in developing and operating the
project. In developing and implementing plans for the project, special emphasis isplaced on environmental management in compliance with not only Madagascar nationallaws but also various guidelines, such as the World Bank safeguard policy, theInternational Financial Corporation's (IFC) Performance Standards, the World HealthOrganization (WHO) standards, and the Equator Principles.
In the project, rigorous measures have been applied to protect the environment,
including efforts to maintain biodiversity, in compliance with the aforementioned andvarious other standards. For example, in developing the mining area, we created abuffer zone around the mining site of about 1,600 ha to ensure protection of wild
animals. When trees are cut down to develop the mine site, felled trees are left on site
for a while so that animals inhabiting these trees can move into the buffer zone. We
also conduct ecosystem surveys jointly with international environmental NGOs. If
endangered or other species that need to be protected are identified in such a survey,
we adopt various programs designed to reduce impacts on ecosystems, for example,
relocation of such species to a sanctuary and use of a fish farming system.

© 2021 Sumitomo Corporation

After starting the construction of pipelines, habitats of endangered animals were foundon the routes where the construction was planned. In response, we changed 24 routes
in total to bypass these habitats. We are also promoting a large-scale biodiversity offset
program under the “no net loss, net gainˮ concept. This is an approach to mitigate
impacts of the development on ecosystems by restoring or creating another ecosystem.
Specific measures include the conservation of a forest area of 6,800 ha in the Ankeranaarea, which has an ecosystem similar to that of the development site of the project. In an
attempt to offset the net loss of biodiversity, we are implementing measures to protect four
conservation areas of more than 14,000 ha in total, equivalent to about nine times theaffected areas, such as protection of areas near the mine site, tree replanting after the
installation of pipelines, and tree replanting on the mine site after the closure of 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

Bird-strike Prevention in Wind Power Generation

Sumitomo Corporation Group has imported and supplied

In 2019, this project was recognized by the Japan

Bird Friendly®-certified coffee (BF®-certified coffee) sinceCommittee of the International Union for Conservation ofmountainous area of about 130 km2 in Eastern Cape, South

2004 as part of our biodiversity-friendly activities, which

Nature and Natural Resources (IUCN) as a cooperative

Africa. In the Doper wind power generation project, measures

ensures a stable income for farmers. Since FY2014, SC

project authorized by the Japan Committee for the United

to prevent bird strikes are implemented.

Foods Co., Ltd. started dealing in BF®-certified coffee. BF®-

Nations

This

Windmills are installed in pastures and bird strikes are caused

certified coffee is grown under the shade of natural forest

authorization means that the project is an important activity

by birds that flock to feed on the carcasses of livestock andtrees to conserve the environment and provide migratory

to conserve biodiversity as well as an activity that hasother animals. We therefore ensure to remove animal

birds a place to rest. The BF certification was created byachieved results toward meeting the Aichi Biodiversity

carcasses found in the power plant.

the Smithsonian Migratory Bird Center (SMBC). As of May

Targets*3. We will continue our efforts to contribute to

We also hire local residents to visually confirm if there is any

2020, 52 farms and agricultural cooperation in 12

protecting migratory birds and ecosystems through thisendangered bird species circling around the windmills and, if

countries*1 are certified and part of the proceeds are usedproject.

detected, to send an emergency notice to stop the operation*2 The committee was established in September 2011 to encourageof the windmills. It is our aim to achieve a harmonious

the participation and cooperation of all sectors in Japan to promotebalance between wild animal conservation and wind power

efforts to conserve biodiversity and ensure its sustainable use.

generation business.

for SMBC's research, surveys and conservation activities.
*1 12 countries: Ethiopia,
Thailand, El Salvador,
Columbia, Peru, Nicaragua,
Bolivia, Honduras, India,
Mexico, Dominica, Guatemalaon

Biodiversity(UNDB-J)*2.

*3 New international targets to conserve biodiversity, which wereadopted by the 10th Conference of Parties (COP10)

Harvest of BF®-certified coffee© 2021 Sumitomo Corporation

DecadeDorper Wind Farm generates electricity using wind in aThis project has been recognized as a project
recommended by the Japan Committee for theUnited Nations Decade on Biodiversity (UNDB-J).

Dorper Wind Farm Pty Ltd. in South Africa

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Prevention of pollution
Activities
活動

Policy and Concept
Sumitomo

Corporation

Groupsbusiness covers a wide range ofBusiness description

areas around the world. As described

Efforts to Reduce Environmental Impacts in the Agrochemical/Fertilizer Sales Businessin the Environmental Policy, theOur major mission in the realm of agrochemical/fertilizer business is toprovide the best-quality agrochemicals/fertilizers that fulfill the needs offarmers worldwide with the aim of contributing to increasing the
productivity of agricultural crops. We select and combine functions suchas import, manufacturing, wholesale and direct sales by taking 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 ofagrochemicals, which can pollute the environment. There are also
concerns that agrochemical remains in such containers 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 ofagrochemicals 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.

Group complies with environmentrelated laws and regulations andcontributes to creating a recycling
society. We consider it important not
only to comply with laws, ordinancesand standards to prevent pollution
caused by waste water, sludge,
exhaust and other wastes but also to
reduce environmental impact throughwaste reduction, reuse and recycling
in order to achieve a sustainable
society. We will continue to address
relevant issues through our businessactivities.

Agrochemical project in Brazil (Agro Amazonia Produtos Agropecuarios Ltda.)© 2021 Sumitomo Corporation

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, and not only reduces the population of the target pest but isalso effective on pests that enter 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 our sales territory to include
Poland, Bulgaria and Russia since 2015. In Russia, Summit Agro LLC, alocal distributor, is recognized as the first company to have introduced apheromone agent to the country.
In addition, we put our efforts into reducing the amount of conventional
chemical fertilizer applied and reducing environmental impacts on
farmland by expanding the sales of coated fertilizers (allowing farmers tocontrol 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 offertilizer).

Investment in a bio-agrochemical manufacturer in Spain

Use of a pheromone agent

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Business description

Business description

Tomra Japan: Creating and deploying a PET bottle recycling system in which consumers
take part actively

Reducing the environmental impact of marine fuel

Reducing the usage of plastic resources while ensuring its effective consumption - importance of this issue isincreasing year by year as a measure for addressing global environmental issues, such as marine litter andglobal warming. In this context, horizontal recycling, in which used PET bottles are recycled into new PET
bottles, is growing more widespread as a method of sustainable resource recycling. Tomra Japan is a joint
venture between TOMRA Systems ASA (Norway) and our company. In addition to selling equipment such as
reverse vending machines (RVMs) for the efficient collection of used PET bottle, we have also created anddeployed a recycling system whereby we collect PET bottles from RVMs installed at convenience stores aswell as supermarkets and deliver them to recyclers. RVMs only collect PET bottles after their caps and labels
are removed by the consumers, this enables us to collect high-quality resources with fewer impurities.
Through those activities, where consumers actively take part in collecting and recycling higher-quality
resources in an efficient manner, Tomra Japan is contributing to reduction of the environmental burden anddevelopment of the recycling-based society.
.

Reverse Vending Machine

Slogan of the TOMRA Group ：「RETURNS INTO VALUE」© 2021 Sumitomo Corporation

Circulation recycling system with RVM as a platform

Since 1952, we have been supplying marine fuel to shipping companies inJapan and abroad. To contribute to reductions in the shipping industry’s
environmental impact, we are also working to supply LNG fuel, which emits
no sulfur oxides and contains 40-70% fewer nitrogen oxides and 20% lesscarbon dioxide than conventional fuels. Specifically, through a joint venturewith Uyeno Transtech Ltd., Yokohama-Kawasaki International Port
Corporation, and the Development Bank of Japan Inc., we placed an order
for an LNG bunkering vessel in February 2019, and we plan to start
supplying LNG fuel to ships in Tokyo Bay beginning in 2022.
The International Maritime Organization (IMO), a specialized agency of theUnited Nations, has formulated a strategy to halve greenhouse gas (GHG)
emissions from maritime transportation globally by 2050 compared to 2008
levels. In this context, it is believed that ammonia will be the next
generation of alternative marine fuels that have the potential to contributesignificantly to reducing GHG emissions in the shipping industry because it
does not emit CO2 during combustion. Green ammonia in particular has
the potential to be a major factor in making the shipping industry carbonfree, as it is produced solely from renewable electricity, water, and air andemits no CO2 during its lifecycle. We have signed a Memorandum ofUnderstanding with five partners, including A.P. Moller - Maersk A/S,
regarding a joint study on the commercialization of the ammonia fuel supply
for ships in Singapore. Through this initiative, we aim to contribute to thedecarbonization of the shipping industry by introducing and spreadingammonia fuel throughout the world through the creation of acomprehensive supply chain that includes the supply, transportation,
storage, and bunkering of ammonia fuel.

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活動

Policy and Concept
Humans depend on the socially beneficial functions of forests. Forests are therefore asignificantly important resource for the sustainable development of the world. Morethan 1.6 billion people in the world receive benefits from forests, such as food, water,houses, fuel, medicinal plants and means of livelihood. Sumitomo Corporation Group,
which is engaged in wood business using such precious forest resources, has been
expanding its business to include forest management with the aim of securing andusing forest resources in a more sustainable manner than before.
In line with the concept of sustainable forest management, which means that
activities using forests should be conducted in such a way as not to lose the sociallybeneficial functions of forests, the Group sets its business goals in such a way as tofulfill its social responsibilities and in compliance with the Environmental Policy andSupply Chain CSR Activity Guidelines.

Results
We are selling the certified log, certified wood products and wood chips from forests
owned by the Sumitomo Corporation Group in Russia (OAO Terneyles) and New
Zealand (Summit Forests New Zealand).
FY2020 Results
Certified log (Russian)

325 thousand m3

Certified log (New Zealand)

383 thousand m3

Certified wood products(Russian)

Softwood lumber

47 thousand m3

Veneer

126 thousand m3

Softwood laminated lumber

29 thousand m3

Hardwood lumber/laminatedlumberWood chips (Russian)© 2021 Sumitomo Corporation

3 thousand m3
55 thousand BDT＜Note＞Regarding trading business of Russian timber, we respondin accordance with each special measure.

Business description
Russia Timber Business (FSC License Number：C009842/C106397/C016535)
In 2004, to be certified that we manage forests appropriately with consideration for theenvironment and local communities based on objective evaluation, OAO Terneyles obtained
FSC® Certification(*1), an international standard, for part of 2.66 million hectares of the forest
area in the Russian Far East. After receiving FSC-FM certification(*2) in 2004 as the firstcompany in the Russian Far East, Terneyles made improvements one by one to meet therequirements for the FSC-CoC (Chain-of-Custody) certification(*3). In 2011, the company
successfully acquired the certification for all of its products, fromround wood to lumber, laminated timber, veneer, and woodchips.
Sumitomo Corporation also received the FSC-CoC certification,and the supply chain for providing customers with FSC®-certified
products from raw materials logged by Terneyles was completed.
Forest owned by Terneyles

New Zealand Timber Business (FSC License Number: C112972)
In New Zealand, a sustainable supply of timber resources is provided in a 30-year cycle
through a harmonious arrangement with local communities under the environmentally friendly
forest management system of planting trees, growing them, cutting them down, and replanting
them. In the approximately 37,000 hectares of forest owned by Summit Forests New Zealand,
besides protecting water resources and primeval forests and co-existing in harmony with thewildlife, the company has also forged friendly relationships with
the indigenous Maori people in the course of running its
business. Moreover, most of the company’s forest holdings are
FSC®-certified, which offers objective proof that the company
is managing the forest appropriately.
Forest owned by SFN(*1) FSC® Certification : a global forest certification system provided by FSC（Forest Stewardship Council®)(*2) FSC-FM (Forest Management) Certification: confirms that the forest is managed in a proper way(*3)FSC-CoC (Chain-of-Custody) Certification (the management of processing and distribution processes): verifies
that FSC® certified material is identified or kept separated from non-certified material throughout the chain.

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Sumitomo Corporation Group Forest Management Policy
We established the Sumitomo Corporation Group Forest Management Policy in March 2022. Furthermore, in order to reinforce due diligence to mitigate risks, we also set Operational
Guidelines for putting the policies into actions.

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

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

Commitment
Based on the principles of zero deforestation and respect for human rights, Sumitomo Corporation will strive to implement thefollowing in its sustainable forest management, with the cooperation of its Group companies.
Environmental aspects:•
We will not engage in development that leads to gross deforestation, or the conversion of natural forests into plantations
for forestry business.
•
We will not develop forests with high conservation value (HCVF), or forests with high carbon stock (HCSF) such as inpeatlands.
•
We will work to protect endangered species and reduce the impact of our forestry business on ecosystems.
•
We will conduct thorough management to prevent forest fires and will not conduct any operations which can cause forest
fires.
•
We will engage in forest conservation and reforestation.
Social aspects:•
We will conduct our forestry business with consideration for human rights in accordance with the Sumitomo Corporation
Group’s Human Rights Policy.
•
We will respect human rights as stipulated in the “International Bill of Human Rights” and the International Labor
Organization’s “Declaration on Fundamental Principles and Rights at Work,” and we will operate in accordance with the“United Nations Guiding Principles on Business and Human Rights.”•
We will respect international norms related to the rights of indigenous peoples, such as the “United Nations Declaration on
the Rights of Indigenous Peoples” and the “principle of Free, Prior and Informed Consent (FPIC).”•We will support local communities through creating employment and offering educational programs related to forests.
© 2021 Sumitomo Corporation

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

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Sumitomo Corporation Group Sourcing Policy for Forest Products
We established the Sumitomo Corporation Group Sourcing Policy for Forest Products in March 2022. Furthermore, in order to reinforce due diligence to mitigate risks, we also set Operational
Guidelines for putting the policies into actions.

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

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

Commitment
In accordance with the principles of zero deforestation and respect for human rights, Sumitomo Corporation will strive together
with its Group companies to source products based on this policy while cooperating with suppliers and customers.
Environmental aspects:•
We will not procure materials sourced from lands associated with destructive forest use or development which leads togross deforestation causing significant environmental impacts.
•
We will not procure materials sourced from lands associated with serious environmental issues including the destruction offorests with high conservation value (HCVF) or high carbon stock (HCSF) such as in peatlands.
•
We will not procure materials produced from genetically modified wood.
•
We will procure in compliance with the Washington Convention to protect endangered species.
Social aspects:•
We will procure products harvested in forests where human rights are respected in accordance with the Sumitomo
Corporation Group’s Human Rights Policy.
•
We will respect human rights as stipulated in the “International Bill of Human Rights” and the International Labor
Organization’s “Declaration on Fundamental Principles and Rights at Work,” and we will operate in accordance with the“United Nations Guiding Principles on Business and Human Rights.”•
We will respect international norms related to the rights of indigenous peoples, such as the “United Nations Declaration on
the Rights of Indigenous Peoples” and the “principle of Free, Prior and Informed Consent (FPIC).”•We will not procure materials produced from illegally logged wood.

© 2021 Sumitomo Corporation

Operational guidelines
Monitoring:•
In order to procure forest products in accordance with the “Sumitomo Corporation
Group Sourcing Policy for Forest Products,” we will promote the use of productsthat have been certified by reliable international forest management certification
systems. Additionally, we will request detailed information from suppliers throughaudit activities such as questionnaires and on-site visits.
•
In order to ensure compliance with the Commitment, we will conduct supplier risk
assessments and consult with non-compliant suppliers to request improvements. If
no improvement is observed, we will consider reviewing the transaction.
Stakeholder dialogue:•
In order to prevent global deforestation and forest degradation, we will promote thesustainable use of forest resources in society through dialogue with our
stakeholders, including suppliers and customers.
•
We will develop a grievance mechanism* to respond to issues raised bystakeholders.
Disclosure:•We will strive to disclose the status of our initiatives based on the “Sumitomo
Corporation Group Sourcing Policy for Forest Products,” including reporting on
monitoring results.
Reviewing process of the Guidelines:•
The Business Units will annually report on implementation of the policy to the
Corporate Sustainability Department.
•
Based on the report, the Corporate Sustainability Department will annually review
the necessity of updating the Operational Guidelines.
•
If any serious issues arise in implementing this policy, measures and corrective
action plans will be reported to the Management Council and the Board of Directors.
* A process that employees, local residents or other stakeholders can use to lodge
complaints regarding human rights violations and other issues related to enterprise’sbusiness activities including its supply chain, for resolving such issues

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

Sumitomo Corporation Group’s Human Rights Policy
Sumitomo Corporation declares in its management principles that it aims to be a global organization that contributes broadly to society and places prime importance on utmost
respect for the individual. We will respect human rights to fulfill our corporate social responsibility, and pursue sustainable growth with society.
Sumitomo Corporation became a signatory in 2009 to the “Ten Principles of the United Nations Global Compact”, which advocates for values common to its own management
principles, including those regarding human rights and labor. We also respect the “International Bill of Human Rights” and the International Labor Organization’s “Declaration
on Fundamental Principles and Rights at Work”, and we operate in accordance with the “United Nations Guiding Principles on Business and Human Rights”.
1. Scope of application
Sumitomo Corporation endeavors to ensure that all executives and employees within its group fulfill their responsibility to respect human rights. In addition, we encourage
our suppliers and business partners to accept, understand and practice this policy so that we can work together to fulfill our social responsibilities, including respect forhuman 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 to take appropriate remedial measures.
3. Compliance with relevant laws
Sumitomo Corporation will comply with national and regional laws and regulations applicable to its group operations. When those laws and regulations are incompatible
with 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 is understood andimplemented effectively.
6. Reporting
Sumitomo Corporation will disclose appropriate information regarding its efforts to respect human rights.
© 2021 Sumitomo Corporation

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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 can identify,
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 Businessand Human Rights, United Nations Guiding Principles Reporting Framework, and OECD Due Diligence Guidance for Responsible Business Conduct. As a first step in2020, 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 toconfirm the Group’s businesses and their value chains, and developed ahypothesis on businesses that may be exposed to high risks and humanrights issues that are closely related to the value 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, and examples ofhuman rights risks recognized globally including those involving othercompanies. We also interviewed stakeholders including outside experts
concerning business and human rights and exchanged opinions regarding
the results of the analysis of the desktop survey as well as the Company’s
initiatives to respect human rights.
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 the status 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’sbusiness 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 theManagement Council and Board of Directors.
© 2021 Sumitomo Corporation

Identification and Assessmentof Human Rights Risks andImpacts● 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 on human rights is
identified, an appropriate
remedial measure isinvestigated in cooperation
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 andworking hours)

Freedom of association and theright to collective bargaining

Workers

Forced labor and child labor
Workers

Workers

Health and safety of local
residents
Community

Community

Workers
Personal information andprivacy

Discrimination andharassment

Land rights

Occupational health andsafetyWorkers, 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 freedom of
association and collective bargaining rights, forced labor and child labor, and discrimination and harassment, which are related to the four core labor standards of the International
Labour Organization (ILO), we also take action to address labor conditions and occupational health and safety. The Group 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 and land rights.
Moreover, since the Group engages in wide-ranging business, we have positioned the personal information and privacy of stakeholders including customers as priority issues.
Examples of Potential Human Rights Risks Associated withRisk

Our Businesses
Business Unit

SectorFreedom of
association
Labor
Right toconditions
collective
bargaining

Steel Products
Processing
Transportation
Automobile Parts& Construction
Manufacturing
Systems
Power, Industrial
Infrastructure
Parks
TelMedia & Digital communications,e-commerce
Metal Products

Living Related &Real Estate
MineralResources,
Energy,Chemical &Electronics

Food, Textile
Healthcare

Mining© 2021 Sumitomo Corporation

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 action plans to preventand mitigate specific risks with priority on areas of high risk in the Group’s business. In
individual businesses, we will monitor initiatives to respect human rights that are alreadyunderway and periodically 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 and transforming on a daily
basis due to advances in digital technologies, effects from COVID-19, and other factors. In
conjunction with this, the status of value chains and human rights issues in various
businesses are continuously 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 other means and strive to gain an
accurate and detailed understanding.

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Activities＜Discrimination and harassment＞

Business description

 See Page 81 for information on harassment training.
 See Page 118 for information on the Speak-Up System.

Human Rights Initiatives at Fyffes＜Personal information and privacy＞
 See Page 122 for information on Information Security Policy and internal education.

Business description
Supplier Management in the Foods BusinessWe also urge suppliers and other trading partners as well as business partners to take actionin order to promote respect for human rights throughout entire value chains related to
Sumitomo Corporation Group businesses.
As a specialized food and food products trading company that is involved in all processes
from product development to selection of production areas in regions around the world,
procurement of ingredients, production and processing management, logistics, and domestic
distribution, SC Foods Co., Ltd. conducts supply chain management so that it can provide
safe, reassuring, and high-quality products that take into consideration sustainability including
respect for human rights.
When selecting new suppliers, SC Foods conducts data surveys, and when determined to benecessary, also performs on-site visits. With regard to existing suppliers, more detailed
questionnaire surveys are conducted of suppliers of products such as coffee, sugar, andsesame seed from certain countries with high human rights risks to confirm that there are noissues.
To strengthen these management cycles even further, SC Foods introduced a system of
implementing on-site inspections once every five years, even with respect to existing suppliers,in 2019, and these inspections have been completed for approximately 20% of suppliers.
During the COVID-19 pandemic, it has been difficult to conduct on-site inspections, so SC
Foods will investigate alternate methods such as remote inspections in the future.
See P.93 for information on acquisition of certification.

Related Salient Human Rights Issues

Related Salient Human Rights Issues
Labor conditions

Freedom of
association andright to CB

Health and safety of
local residents

Land rights© 2021 Sumitomo Corporation

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 ever corporate-wide
Human Rights Impact Assessment in January 2020, through its partner BSR. The
human rights impact assessment was conducted through reviews of existing Fyffes
policies and procedures and interviews with internal and external relevant stakeholders,
including NGOs, employees and customers. In addition, Fyffes chose five countries todo an in-depth analysis – Belize, Colombia, Costa Rica, the Dominican Republic, andHonduras. The countries were chosen due to their importance to Fyffes as well as theirpotential 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, 3priority areas emerged from Fyffes analysis for its immediate action: ‘access to agrievance mechanism’, ‘child labor’ and ‘migrant worker labor violations and forcedlabor’. Regarding a grievance mechanism, Fyffes has already implemented a global,
independent grievance mechanism, available in the language of our employees via
telephone or online since April 2019. In accordance with the mitigation plan, it wasagreed to run a broader campaign internally to make sure that all employees were
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, such as Fyffes owned farms, various grower partners andripening facilities. In the UK, Fyffes Group Ltd has regular audits on its labor providers
and investigates any signs of forced labor, e.g. retention of passports etc. Fyffes hasformed a Human Rights Core Team and they are responsible for implementing 11
mitigation measures to address the 13 salient human rights risks.

Occupational healthand safety

Labor conditions

Freedom of
association andright to CB

Discrimination and Personal information
harassment
and privacy

Health and safety of
local residents

Land rights

Forced labor andchild labor

Forced labor andchild labor

Occupational healthand safety

Discrimination and Personal information
harassment
and 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 ahuman rights audit at three chicken processing plants operated by Thai business partners. Cases
have come to light in Thailand of infringement of the human rights of foreign workers in laborintensive industries such as poultry rearing, seafood processing, and garment manufacture. We
make periodic visits to the processing plants of its business partners to check that regulations onhuman rights and other areas are stringently observed. This audit was carried out with particularfocus on the work environment of foreign employees.
The audit team visited the plant and the employees’ dormitory to check for forced overtime
working, confiscation of identification documents, and labor health and safety issues, which arecited as common human rights risks in the poultry industry. In addition, employees of non-Thainationality from Cambodia, Myanmar, and other countries were randomly selected for interview.
The audit found no human rights issues relating to foreign workers at any of the three locations
and the processing plants demonstrated proactive communication with us and a strong
commitment to further improvement of operations. To fulfill its social responsibility in the supply
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, incooperation with the diplomatic corps and lending banks group since the start of thedevelopment. We use these dialogues to share our belief that “this project is extremely
important to the future of Madagascarˮ and deepen the mutual understanding of thesignificance of the project. In the Ambatovy project, we also promote the employmentof people in Madagascar and improve their skills. In FY2019, 93% of all workers are
Madagascar people, and we are systematically working on technology transfer andhuman 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 order to prevent accidents
associated with the project and address them if they occur. Employees and external
stakeholders are eligible to access this system. Project staff appropriately respond tocomplaints while protecting personal information. Since 2016, the Ambatovy project
has joined the Voluntary Principles on Security and Human Rights (VPSHR) programin partnership 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 inrights and opportunities for black people to participate in economic activities and to improve theirsocial status. It is required to include at least a certain number of black companies in a businessproject and to give back part of the profits to the community.
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 and creating new jobs, inline with such policies. Specific efforts include repair of buildings of kindergartens, schools andhospitals located close to the power plant, provision of machinery to them, and support torestaurants operated by black women.
In these activities, we use local companies as much as possible. About 10% of the stocks of thiscompany are owned by an NPO operated by local residents. It is planned to launch various
projects that meet the demand from local residents with the dividends as a capital in the future.

© 2021 Sumitomo Corporation

Job creation (Central Purchasing Center)

An elementary school built within the project site

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Respect for the Rights of Children

Sumitomo Corporation Group Statement for UK Modern Slavery Act 2015

As the world population is mostly made up of children and younger generations, theSumitomo 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 membersof employees, as well as important stakeholders who will play future roles in thesustainable development of society. Based on this recognition, we signed the United
Nations Global Compact in its support of the Ten Principles, and respect Children’s
Rights and Business Principles. We are committed to preventing the violation of children’s
rights through our business and social contribution activities.

We set out the steps Sumitomo Corporation Group has taken to help ensure that modern
slavery and human trafficking are not taking place in SC Group's business or supply
chains. The statement is approved by the board of directors of Sumitomo Corporation as
the parent company of Sumitomo Corporation Group.

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

Concept 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. Whennecessary, we may use armed security personnel, recognizing the human rights risks
involved and complying with laws and regulations of the countries in which we operate.
We select security companies in accordance with the Voluntary Principles on Security
and Human Rights and the Basic Principles on the Use of Force and Firearms by Law
Enforcement Officials.

For more information on social and environmental risk management,see page 120.
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 andenvironmental impacts including human rights.
© 2021 Sumitomo Corporation

Statement for UK Modern Slavery Act 2015

Training Seminars on Human Rights
Sumitomo Corporation Group’s business activities cover a wide range of countries,
regions and industrial fields. We therefore consider that it is necessary for the Group tocooperate with suppliers, customers and business partners, instead of acting alone, in
promoting the entire supply chain to promote CSR throughout the entire supply chain.
Since FY2014, we have held seminars with external experts and e-learning on humanrights issues that need special attention in business activities. The seminars cover a wide
range of topics, including the relationship between companies and human rights issues,
actual cases of reputational risks from human rights and how to assess the influence ofhuman rights. Comments from seminar participants include “Since the Group is engaged
in diverse business activities all around the world, we should continue awareness-raising
activities so that as many employees as possible can better understand relevant issues”.

Establishment of Sustainability Consultation Desk
We opened a consultation desk in our website to receive any opinions or requests onsustainability-related issues such as human rights or environment from our stakeholders.
Any opinions or requests will be promptly shared internally through Corporate
Sustainability Department that specializes in addressing sustainability-related issues, andnecessary actions will be taken to resolve issues. As set forth in the mid-term goals of
key social issues, having risk assessments through human rights due diligence andsustainability-related comments from our stakeholders, we are aiming to establish a more
effective grievance mechanism for our stakeholders.

65Sustainability of
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Policy and Concept
Safety Measures in Uranium Mining

Basic Policy“To achieve prosperity and realize dreams through sound business activities” is one of the

Our Groups development of uranium mines, production and sales of uranium concentrates(*1),

management principles of the Sumitomo Corporation Group. Based on this principle, ourand trading of various kinds of nuclear fuels containing radioactive materials comply with eachmission is to ensure the economic and spiritual prosperity of people around the world,country's laws and regulations based on the IAEA (International Atomic Energy Agency)

including our employees, shareholders, clients, and local communities, and to fulfill theirstandards. With our highest priority on HSSE (Health, Safety, Security and Environment), we

dreams. We also believe that in order for every employee to maximize his/herplace the utmost importance in ensuring the safety of onsite employees and local residents.

performance, good physical and mental health is essential, without which it is not possible

Specific measures taken in production and sales of uranium concentrates include theto continuously create new value. Based on this, the Sumitomo Corporation Groupmeasurement of radiation exposure of all those entering and leaving the plant, and theformulated the Declaration of Iki-iki Waku-waku Health and Productivity Management.

management and monitoring of cumulative radiation doses in employees(*2). Furthermore,

The Group implements various efforts based on this declaration and by taking into

the uranium concentrates and various kinds of nuclear fuels we deal in are all used foraccount the actual situation of each group company. We will continue to promote healthpeaceful purposes such as power generation. Our relevant activities comply with security

management with a focus on three aspects: “improvement of health literacy” to enable

trade control-related laws and regulations.

employees to continue working in good health, “reassurance in emergencies” to be wellprepared for unexpected illness, and “global medical support,” which is unique tointegrated trading companies. Also, Medium-Term Management Plan SHIFT 2023
positions health management at the core of our human resources strategy.
Declaration of Iki-iki Waku-waku Health and Productivity Management(*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 inaccordance 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 two years from FY2019 toFY2020. 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 isstricter than the laws and regulations of Kazakhstan, where we conduct the business, and we are compliant
with such standard. Further, no external radiation leaks have occurred in the two years from FY2019 toFY2020.

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

© 2021 Sumitomo Corporation

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SystemHealth Management Promotion Systems

Employee Engagement: Health and Safety Committee

Health management is carried out through the following system to maintain and enhance
the health of employees under the direction of the Assistant CAO who serves as the
Safety and Health Manager.

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 to improving
work styles qualitatively and quantitatively in terms of working hours for union members.

Employees

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

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

2. Reassurance in emergencies

Implementation
system

3. Global medical support

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

Employee Relations &Compensation Dept.

Safety and HealthCommittee (meets monthly)

Labor Union

Corporate Health
Insurance Society

SCG Counseling Center© 2021 Sumitomo Corporation

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

On a consolidated basis, the Company employs around 75,000 workers around the world. Inorder to prepare for the incidents, accidents and disasters that will inevitably continue tooccur 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 todevelop infrastructure for safety measures to prepare for an emergency. Also, in the eventof an emergency, we need to understand the 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 Disaster Response and Safety Management Dept. and ensure speedy reporting to
the president by appointing the executive in charge of human resources, general affairs andlegal affairs as General Manager of Emergency measures. This system also enables
provision of necessary support in a timely and unified manner. If a major natural disasteroccurs, our fundamental policy is to prioritize (1) protecting human life, (2) mutual assistance,and (3) prompt recovery of business operations . We have stated this in manuals and inform
employees.

Excellent Health and Productivity Management Enterprise

Industrial Physician
Clinic (internal medicine
and dentistry)

Consultations

Crisis Management System

Use

Koriton Massage Room

Sumitomo Corporation’s efforts relating to employee health have been recognized, and thecompany 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.
Recognized as an excellent health and productivity management enterprise in the
White 500 category

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SystemReporting of Work-related Accidents

OHSAS 18001-certified Facilities

We take measures to prevent work-related accidents. If an accident occurs, it

Consolidated subsidiaries that have already obtained OHSAS 18001 aremust be immediately reported to the Employee Relations & Compensationtransitioning to the standard ISO 45001, which was issued in March 2018.

Department. The numbers of work-related accidents reported in Sumitomo
Corporation alone are as follows:

As of December 2020, following 4 of 372 Sumitomo Corporation consolidated

Number of work-related accidents

companies, or 1.1%, have been certified to OHSAS 18001 certification.

FY2016FY2017FY2018FY2019FY2020

1 accident

2 accidents

1 accident

3 accidents

2 accidents

No fatal accidents were reported. If a work-related accident or disaster occurs at
Sumitomo Corporation or any of its affiliated companies despite our prevention

Edgen Murray (Middle East, Asia Pacific)
FUJIWA MACHINERY INDUSTRY (HUBEI) CO., LTD.
Infinite Energy Holdings Pty Ltd.
Minera San Cristóbal S.A.

efforts, it must be immediately reported to the Disaster Response and Safety
Management

Information

LiaisonCommittee

ledbyRepresentative

Director/Senior Managing Executive Officer as chairman. Managers of major
departments of the Corporate Group serve as members the Disaster Response
and Safety Management Information Liaison Committee. At the end of every
month, they are required to submit a monthly report to the Manager of the
Planning & Coordination Department of each Business Unit (Executive Officers,
Directors) to keep executives informed of the current situation. Measures toaddress work-related accidents, such as investigations and responses torelevant issues, and prevent them from recurring are taken appropriately.
Important issues are determined by the Disaster Response and Safety
Management Information Liaison Committee and particularly important ones arereportedtotheManagement

CouncilbyChairman(Representative

Director/Senior Managing Executive Officer ) to discuss and decide upon.
© 2021 Sumitomo Corporation

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Activities: Employee Health Management
ClinicSubsidies for Costs of Health Checkups and Complete PhysicalExamination

Sumitomo Corporation has set up an in-house clinic (internal medicine and dentistry) tosupport employees’ health management on a day-to-day basis. The internal medicine
department is open five days a week for outpatients, with specialists in lifestyle diseases
such as diabetes and hyperlipidemia, infectious diseases, and the liver, kidney andrespiratory organs. The department also provides employees at high risk of developing
lifestyle diseases with ongoing support, including nutrition counseling by registereddietitians and collaboration between specialists in diabetes and nurses, as well as regularblood tests. At the dentistry department, checkups are provided twice a year in addition toregular treatment. 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 those under 35),
health checkup immediately after joining the company, and health checkup 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 percentage of those who received a periodic healthcheckup, including complete physical examination at an external medical facility, in FY2018
was 100%. Based on results of a periodic health checkup and complete physicalexamination at an external medical facility, the internal clinic provides detailed follow-up
care, and the corporate 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 their dependents.

Health Results Indicators
SCG Massage Room "Koriton“
The “Koriton” massage room was opened in the Harumi Triton Square in April 2008 as aplace where SCG employees can receive relaxing therapy. We have received manyfavorable comments, such as “It‘s very convenient to keep in good shape in a break fromworking” and “The efficiency of my work after massage was improved.” The total
approximately 3,000 people have used the service (Results for FY2019).

Indicator

Target

FY2016FY2017FY2018FY2019FY2020Percentage of
Employees Undergoing
Health Checkups

Keep 100% every year

98.7%

100%

100%

‐

100%

92.2%

90.2%

88.1%

88.5%

89.9％

-

-

‐

18.0%

ー

-

-

‐

4.6%

2.9％

Stress check
Implementation rate
Smoking rate
Rate of female
employees under 35
years old who undergo
gynecological exams© 2021 Sumitomo Corporation

90% by the fiscal year
endingMarch 2021
10% by the fiscal year
endingMarch 2021
15% by the fiscal year
endingMarch 2022

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Activities: Declaration of Health and Productivity Management (1): Improve Health Literacy
Expansion of Health Management Seminars

Employee Health Awareness Survey Conducted
After the Declaration of Iki-iki Waku-waku Health and Productivity Management was

The health awareness survey starkly revealed that a decline in productivity as a result ofannounced in October 2018, a health awareness survey has conducted annually starting

mental disorders, poor sleep, and general malaise or fatigue is a particular problem.

in 2019 to measure the effects of performing health management and to measure

Seminars are held to eliminate these causes. Seminars on seven topics were held throughpresenteeism(*). The survey covered all employees, and the latest response rate was

January 2021. These seminars will continue to be held to raise employee health literacy.

86% (increased 8% compared with last year). The survey starkly revealed that a decline
in productivity as a result of mental disorders, poor sleep, and general malaise or fatigue

List of Seminars Conducted
Seminar Title

Number of participants

January 2018

Stretching Seminar

147

March 2019

Women’s Health Seminar34

May 2019

Smoking Cessation Seminar

5

July 2019

Eyestrain Seminar

95

August 2019

Acidophilus Seminar

67

October 2019

Sleep Improvement Seminar

94

January 2021

Women's Wellness Issues andCorporate Life Seminar138

is a particular problem. Countermeasures to eliminate these causes including healthseminars are being implemented. The survey will be conducted periodically in the future
to verify the effects of health management.
(*) A condition where an employee reports to work but experiences a decline in the work performancethat should be demonstrated as a result of some physical or psychological problem.

Health Guidance for Younger Employees by Public Health Nurses
Expanded
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 of health data orphysical changes since joining the Company or in conjunction with changes in their living
environments. A program is being created so that pre-symptomatic personnel at high riskof developing lifestyle diseases can independently change their lifestyles throughdiscussions with a public health nurse.

Health Guidance Process
InitialInterview(Goal Setting)Observation
Over Time (1stmonth)

Continuous
Over Time(2nd month)

Healthy Lunches Offered at Tokyo Head Office Building Employee
Cafeteria
The employee cafeteria began offering healthy lunches in July 2019. The specific meal

Final Interview(3rd month)compositions and value settings were supervised by a clinic nutritionist based on the Smart
Meal* standards. In September 2019, the company received Healthy Meal and Food
Environment certification as a business enterprise the provides healthy meals (smart meals).

© 2021 Sumitomo Corporation70

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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 educationand training for managers. Through these comprehensive programs taught 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 have also set up a counseling center “for everything, withconfidentiality totally protected,” which is used by a total of over 1,600 employees
annually (result of FY2020). In addition, we conduct an annual stress checkup, which isextended to employees working overseas. The health consultation office within the inhouse 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, the inhouse clinic also has a specialist in psychosomatic medicine available three days a week.

The Sumitomo Corporation Group is an organization that supports its employees so they
can work with enthusiasm, and provides the SCG Counseling Center in the Harumi Triton
Square, where Sumitomo Corporation's Head Office is located. This center is staffed withmultiple counselors to help solve various problems and concerns. Since its establishment inApril 2005, confidentiality has been well protected, and employees have become used toconsulting staff about any problems at this center with ease of mind. (Approximately 1,600
consultation inquiries are made annually.)
ServiceproviderSCG
CounselingCenterExpanded Measures Supporting Women’s Health
Since the incidence and death rates of breast cancer and uterine cancer have been
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, every October we distributed information on health issues
unique to women to all domestic female employees from 2019. Other informational
measures include setting up a Woman’s page on the intranet health management site toprovide information on women’s health. Also, in January 2021, we held Women's
Wellness Issues and Corporate Life Seminar.

Support for Quitting Smoking

External
contracting
company

Services

Eligible users

Activities

Counseling in person

Mainly for employeesin TokyoCounseling by phone

All employees

Counseling by visiting theemployee's site

Employees in offices
and outside of Tokyo
including overseas

Qualified counselors provide
counseling to employees in Japanand overseas. Qualifications of thecounselors include senior industrial
counselors, clinicalpsychotherapists, career
consultants, and family consultants.

Various seminars

All employees

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

Consultation

Management

Consultation for managers
regarding how to respond to theirsubordinatesCounseling in person

All employees

Contracting external companies toprovide counseling in person, by email, phone, and visiting theemployee's site.

Counseling by phone, byvisiting the employee's site

On the occasion of the relocation of the Head Office in September 2018, we designatedoffice floors of the Head Office as non-smoking areas. We have also supported forsmoking, including a subsidy to those who want to quit smoking to buy antismoking gums
and an anti-smoking support program provided by the clinic.
© 2021 Sumitomo Corporation

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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

Sumitomo Corporation has more than 1,000 employees and their family members stationed

cover conditions that give rise to substantial economic burdens as a result of treatmentin 65 countries and regions (as of March 2021). We provide these expatriates working in an

not covered by insurance. The Program was introduced as a part 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 as advanced medical treatment (treatment
requested by the patient). By broadly covering treatment not covered by health insurance,

environment different from Japan with health care services to maintain their health, such as
an annual health checkup. Counseling services provided by a clinic and the SCG
Counseling Center are also available for those with mental and physical disorders. We havea 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 onnecessary vaccinations, local safety conditions, how to prevent infectious disease and otherthe program is intended to support employees who become ill receive treatment with

important issues to employees before overseas business trip and transfer and their family

reassurance and return to work at the earliest possible time or continue working while

members.

receiving treatment.

Measures Against Global Health Problems

Hospital(1) Medical
expenses

Employee(3) Payment ofbenefits(2) Request

Sumitomo
Corporation* Advanced medical treatment refers to cutting-edge and advanced treatment methods
that have been determined by the Ministry of Health, Labor and Welfare to be effective
and safe and are under consideration for coverage by health insurance. Patient
requested treatment is a program whereby healthcare institutions can use unapproved
medications and so on at the request of the patient.

© 2021 Sumitomo Corporation

Currently, many countries around the world are struggling with serious health issues,
including HIV (AIDS), tuberculosis and malaria, not limited to COVID-19. The Sumitomo
Corporation Group is determined to take active measures against these global healthproblems.
In order to ensure that officers and employees of our Group have accurate information
about and protect themselves from these infectious diseases, the Company provides healthcheckups in advance for officers and employees who are assigned overseas and, whennecessary, encourages them to be vaccinated against infectious diseases. We also provide
a variety of training before their assignments. Moreover, we started organizing e-learningand seminars on safety measures in FY2017 in response to requests by employees about
to go on their first overseas business trip as well as those looking for the latest information
on infectious diseases. These programs aim to enhance awareness of crisis managementand disseminate accurate and up-to-date information. We make these programs available toofficers 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.

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Activities
Education on Crisis Management
Sumitomo Corporation provides various trainings andseminars in order to encourage each employee to havecrisis awareness and to acquire necessary knowledge.
As a countermeasure against natural disasters, each year
we conduct emergency response drills of the Crisis
Management Team and on each floor of the Tokyo Head
Office in anticipation of an earthquake under the Tokyo
Metropolitan region. Throughout the Group, we also
promote the development of impact based BCPs that canbe used to respond to multiple disasters, including notjust earthquakes, but also typhoons, floods, andpandemics.
We organize over 90 seminars on safety measures a year,
dividing the programs into 4 grades and 6 courses so thatparticipants can join according to their experience andlearning levels. Also, manuals on safety measures which
each office has prepared is shared with Disaster
Response and Safety Management Dept., in order toensure a prompt and effective initial response when acontingency occurs. We have built a system to provide
prompt and effective relief and support throughcooperation within and outside the country in times of
emergency.
We also develop safety net systems as part of our regular
practice. For example, we have a system that obtains
real-time information on troubles around the world (e.g.,terrorism, major accidents, severe weather, natural
disasters, etc.) and forwards it in push type to employees
who are working on assignment in or taking a businesstrip to various places. Another example is a system toprovide support when emergency medical care is needed.

© 2021 Sumitomo Corporation

Business description

Business description

Measures Taken in Logging of Raw WoodPT FUMAKILLA INDONESIA

The incidence of occupational accidents in the forestry
industry is higher than those in other industries. The ratio ofserious accidents, including deaths, is also very high. To copewith this situation, we comply with the international safety
management standards required for Forest StewardshipCouncil (FSC) certification by OAO Terneyles in Russia in
which we invest. If we receive instructions as a result of anaudit for the renewal of the certificate, we take improvement
measures immediately.
We have thus been certified consecutively since 2004. We
have also implemented various measures to prevent
occupational accidents. Our efforts to reduce occupationalsafety and health-related risks include: inclusion of safety
management rules into the internal regulations; inclusion ofsafety-related items in a job description contract with an
employee; establishment of the Safety Management
Department; and onsite inspection by the Safety Management
Department at plants and work sites of the company.
When the Safety Management Department determines it
necessary to make improvements, each onsite manager isrequired to develop an improvement plan and report it to thepresident. After completing the improvement, the manager
also must report its result. The Safety Management
Department is required to make a list of occupational
accidents that have occurred in the last month based onreports provided by each site and report it to the president. If
necessary, the department develops an improvement planand give each site an instruction to implement improvement
measures.

Under the slogan of “protecting people‘s lives,ˮ Fumakilla
Limited entered the Indonesian market where protectionof people from infections is a major concern in their living
environment. Over the last 30 years, the company has
made slow but steady efforts in spreading its mosquito
repellent coils with high medical effects in every corner ofthe region. As a result, it has now the largest share in theIndonesian market, contributing to the Indonesian market,
contributing to addressing one of the major local social
issues. In terms of social contribution, not only the productperformance but also the marketing method applied there(a business model called BOP to deliver products directly
to general users in emerging countries) are significant.
Since its foundation in 1990, we have been continuing ourinvestment (current share of 20%). Our employees
assigned there also support the local operation of
Fumakilla.

Mosquito repellent coil of Fumakilla73

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Activities
Business description
Continuing and developing the health and safety management system we have cultivated over the years
The Metal Products Business Unit continues to develop
globally in various industries, and in all of its businessactivities, the unit places the utmost importance on
ensuring the health and safety of its employees,
implementing several key measures in support of thisphilosophy. Typical examples are the global initiatives
for zero accidents in Steel Service Center BusinessGroups (Steel products related business) and the global
HSSE management system for eliminating occupationaland environmental accidents in the tubular products
business.
The Steel Service Center Business Groups (Steelproducts related business) conducts business in morethan ten countries, including Japan, and in a wide variety
of industries including automobiles, electrical machinery,electronics, and building materials. In each case, safetymeasures are tailored according to the conditions ofeach Steel Service Center Business Group. Central tothe implementation of these safety measures, at each of
the sites, is the Safety & TQM Promotion Team in the
Steel Products Business Planning Dept, of Sumitomo
Corporation Global Metals Co., Ltd., which performs thatrole of an internal advisor and provides support for theelimination of occupational accidents.
Specifically, we encourage the introduction of Total
Quality Management (TQM) at each company in order to© 2021 Sumitomo Corporation

establish the foundations of an effective safety systemand further instill a culture of safety in all aspects, fromthe management that leads the company to the
manufacturing sites of business companies. We
constantly seek to improve the quality of management
and ensure consistency individual targets as well as
striving to enhance awareness of safety and incentives
by continuously monitoring and communicating thestatus of these defined targets.
An example of support activities is the support forprovided periodic self-audits conducted by companies
based on a 150-item safety checklist provided by the
Safety & TQM Promotion Team responsible for visiting
major customers, formulating action plans for identified
areas of improvement and following up on the status of
improvement (during the COVID-19 pandemic, thisactivity has been conducted by online conferencing).
In the tubular products related business, we haveestablished a 12-item HSSE management system basedon the slogan “Beyond Zero Harm”(Eradication od
Occupational and Environmental Hazards) to promoteand establish HSSE as a part of the organizational
culture. In order to put this into practice we assigned ISO
45001 experts to major overseas bases and developed
an IT system which enables lessons learnt and goodpractices to be shared globally across the group.

Going forward, we will continue to fulfill our social
mission by building a better working environment, aiming
for “Zero Accidents” in both the steel and tubular
products business.

HSSE Management System PDCA Cycle

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Activities
Business description“G-CMSD HSE Initiatives” Aiming to achieve Zero Serious Incidents bycombining the expertise of the Global Construction and Mining Systems Division
The Global Construction & Mining Systems Div. (G-CMSD) established the G-CMSD
HSE Promotion Office in 2018. By making full use of its global human resources, the HSE
Promotion Office started implementing Health, Safety & Environment (HSE) activities withthe aim of eliminating serious industrial incidents and improving HSE activities at all GCMSD Group companies.
The office formulated a vision and HSE standards, publishes a monthly Safety News,issues Safety Alerts to share findings and corrective actions of incidents, and conducts
safety inspections (gap analysis) of the Group companies. It also conducts safety training
for new division members and all employees who are dispatched overseas. With a focus
on continuous improvement, in March 2021 the office created a portal to facilitatecommunications within the Group and encourages further activities such as theintroduction of Safety Awards.

Safety Alerts are used to share
information about findings andcorrective actions of incidents.
© 2021 Sumitomo Corporation

Safety inspections are conducted at each company. Best practices
are identified and shared for other Group companies to emulate.

Construction
Machinery Business

Activities are implemented by using
HSE experts from Group companies

Construction Equipment Rental Business Expanded Globally
In Japan and the United States, which are advanced construction equipment rental
countries, we are developing the business through TAIYOKENKI RENTAL CO., LTD.,
and Sunstate Equipment Co., LLC, respectively. Because customer needs are growing
more diverse with increased awareness of workplace safety and productivity, we aim toprovide new value by upgrading services utilizing IT and DX, such as enhancement ofrental products and offering of various rental apps.
In addition, we acquired Aver Asia (S) Pte Ltd., which has operations throughout
Southeast Asia, in December 2020 in order to expand into this area where
mechanization and rental demand are expected to increase in conjunction witheconomic growth. We will take advantage of the knowledge of business operations
cultivated in Japan and the United States while also efficiently allocating managerial
resources between group companies.
By providing and promoting the use of highly reliable and economically efficientmachinery, we will contribute to the realization of a sustainable circular economy.

Machinery yard at Sunstate Equipment

Corporate culture of people and teamwork

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Data

Governance

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

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 andhealth, 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 and discipline at work and make an effort to increase labor efficiency, andboth parties must cooperate with each other in developing the company‘s business. To achieve thisobjective, we make every effort to have serious and sufficient discussions on each specific project,while ensuring mutual understanding and trust. In addition to matters for collective bargaining andnegotiations on an official level, we hold various meetings to share opinions on a wide range ofissues, such as informal meetings with the president, round-table discussions on businessperformance and related issues, Human Resources Strategy and personnel systems, and work
styles, and work style improvement seminars and town hall meetings with the president organizedjointly with the 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 natureof their jobs. As of March 2021, the number of members of the Sumitomo Corporation Labor Union
is 3,065, accounting for 59.2% of all employees of Sumitomo Corporation.

with laws and regulations in our countries of operation, we support and respect the Ten
Principles of the UN Global Compact, as well as the International Labour Organization’s
core labor standards of eight conventions in four areas: freedom of association and theeffective 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 clearly stated that no person should be discriminated against due to human race,
nationality, gender, religion, creed, age, origin, physical or mental disability, or otherreasons that are not related to business operations. We are also complying with minimum
wage requirements based on the labor standards and labor conventions of each country.
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 and Occupation)
Convention (No. 111)

Activities
活動
Employee Awareness Survey Results
The Sumitomo Corporation Employee Awareness Survey conducted in 2019 determinedthat 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 toPrevious Survey

Feeling of satisfaction withthe company

3.9

3.9

±0

Work-life management(level of 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).
© 2021 Sumitomo Corporation76

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Human resources management : Global HR Management Policy
Policy and Concept
Global Human Resources Management Policy

Ideal Sought by the Global Human Resources Management Policy

Sumitomo Corporation established the Sumitomo Corporation Group Global Human
Resources Management Policy in September 2020. This policy sets forth the vision andconcept of human resources management on a global basis with the aim of achieving
human resources management for the creation of new value. It is used as the foundationfor each HR initiative.

Based on this policy, we seek to increase talents throughout the Group who can create
new value on a global scale, sharing the Group’s vision and mission, and maintaining highaspirations and a continuous intrinsic motivation with Enterprising Spirit. We also aim tobuild a Great Place to Work on a global scale, where individuals continuously andpassionately create new value. We aim to be an organization recognized for nurturing
talents that continuously take on new challenges throughout the world.

Outline of the Policy
１．Why we established this policy

Objective of establishing this policy“SC people” “SC organization”

２．What we aim for
３．Diversity and Inclusion

Creating value through a mix of wisdom

４．How we realize this aim

The Mindset we value in HR Management（１）Talent recruitment（２）Talent development and training

Attraction of diverse talents
Promote a Spirit of continuous learning（３）For talent success-Performance management-

Evaluate to foster individualand organizational growth（４）For talent success -Right person in right place-

Deploy the right person to the right place
on a global basis（５）Fair treatment

Incentivize the pursuit of “external reward”
and “internal reward”（６）Work environment and workplace culturethat support talents

Create an environment where individuals
can exercise their abilities to the fullest

５．Who takes responsibility for HR management© 2021 Sumitomo Corporation● STRATEGY DRIVEN● GEMBA ORIENTED● FAIR & OBJECTIVE● TRANSPARENT & CONSISTENT● RESPONSIBLE ＆ ACCOUNTABLE● RESPECTFUL IN COMMUNICATION● ETHICAL ＆ COMPLIANT
Autonomous growth of individuals, andpeople management capabilities

Global Human Resource Management Policy

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Human resources management : Human resource recruiting
Policy and Concept
Basic Policy on Hiring
As a company that engages in global business, Sumitomo Corporation requires humanresources who have high aspirations and a continuous intrinsic motivation withEnterprising Spirit and create new value on a global scale. our basic policy is to conduct
fair recruitment that respects fundamental human rights, and hires employees based
solely on the aptitude and abilities of applicants regardless of nationality, gender,
disabilities, race, region or sexual orientation.
In addition to hiring new graduates, we consider mid-career hiring as an integral part ofstrategic recruitment, and we continue to hire talented employees throughout the year.

Activities■ Internships for University and Graduate Students

We offer internships to university and graduate students every year in order forthem to experience business of an integrated trading company. In FY2020, we
conducted a program on new project development that used Sumitomo
Corporation’s electric power EPC business as the subject matter. The program isdesigned to be similar to actual business operations including group work on
contract negotiations. We support the career development of students by enablingthem to experience the business of a real integrated trading company, and we
expect the program will deepen understanding of our new value creation processby having them create business plans in agreement with our Material issues.

Basic Measures Relating to Hiring: Internships<Number of Past Participants>
FY2018: 87 / FY2019: 190 / FY2020: 164

The company hold various seminars relating to hiring and creates numerous opportunities tosupport career development by students.

Recruitment of Mid-career Human Resources■ Next Leaders' CampWe offer “Next Leaders’ Camp”, a career support project by Sumitomo Corporation. With theaim of engaging in true career development that goes beyond just recruiting activities, we hopeto help resolve the doubts and concerns that students may have when considering their careers,
and to help them think their own careers. Next Leaders‘ Camp comprises “Business”, “Global”,
and “Sustainability” sections. In the “Business” section in particular, participants deepened theirunderstanding of the role of business and the value that should be demonstrated throughlectures on the significance of business and thinking frameworks, and business analysis work
using our company’s case studies. One participating student commented, “I was able to notice
important values when thinking about my own career”<Number of Past Participants>
FY2018: 794 / FY2019: 591 / FY2020: 1,322© 2021 Sumitomo Corporation

The business environment surrounding us is changing rapidly. In order to survive
the competition in this age of tremendous changes, we need to take on thechallenge of doing business in new fields while expanding and advancing ourexisting businesses. To this end, we recruit mid-career workers who have great
expertise and knowledge from outside the company, in addition to making effective
use of our in-house human resources. Our mid-career hires have different
backgrounds and include lawyers, public accountants and those with otherqualifications as well as those who have experience in the manufacturing, financial,media, IT and other industries. They are making use of the expertise they havegained in their respective fields for the benefit of our company. Sumitomo
Corporation recruits mid-career workers not only for their expertise, however. We
expect these employees who have diverse backgrounds, to revitalize the company
with their ways of thinking, work methods, out-of-box ideas and different viewpoints
and help us enhance our competitive strength. Sumitomo Corporation will continue
to foster mid-career recruitment along with the employment of new graduates forthe retention of a diverse workforce.

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Human resources management : Human resources development
活動
Activities

Policy and Concept
Basic Concept

Our Personnel Development Programs

For the Sumitomo Corporation Group, human resources are the most important

As Sumisho Business College (SBC), we organize 250 courses of OFF-JT training a year

managerial resource. The Global Human Resource Management Policy established inand that offers individuals various types of programs to acquire the knowledge and skills

2020 describes that the “ideal individual” as “a person who is creating new value on aneeded to be active in each field. In addition, we believe human resource development

global scale, sharing SC Group’s vision and mission, and maintaining high aspirations

based on individual career perspectives, experiences, aptitudes, and issues is important,and a continuous intrinsic motivation with Enterprising Spirit ”.The most important thing toand therefore, we focus on career development training to ensure that as many people asachieve this is the individuals enhance abilities those are effective in globally. And thispossible can work with high motivation and comprehensively demonstrate theirabilities refer “expertise”, and “professionalism”. To develop a group of top-tierprofessionalism.

professions with this expertise and professionalism, OFF-JT makes it possible to engage

management skills and promote diversity and inclusion (D&I) so that supervisors canMoreover,

there

are

training

programs

thoseenhances

peoplein more advanced work by “generalizing and conceptualizing” experiences throughaddress and motivate team members and unite diverse human resources to link

“introspection and reflection” on work successes and failures and by acquiring skills andorganizational and individual growth. We also offer Long-Term Programs for Selected

knowledge necessary for work.

Employees that allows employees to acquire the knowledge and skills necessary for

Sumitomo Corporation Group Personnel Development Programs
Non-Managementbusiness management. Many of those completing the program have been playing a leading
Management

Long-term
Program for
Selected
Employees

Elective Program

Human resources management program / Career development program
D&I program
Executive programs
Sumitomo Executive Management Program
Workshop with General Managers

Senior Management
Initiative training(＊)

Training for new
department heads＊

Trading business program, investment-related program, Legal program, DX program, Liberal arts program,strategy and marketing program, global human resources development program, etc.

PX programrole in managing associated companies in Japan and abroad. In our efforts to enhance thedevelopment of human resources, we make effective use of external high level training
programs, such as overseas executive programs, in addition to in-house training programs.

Training
for
newly
promoted employee

Training
for
newly
promoted employee

New Employee Follow-up Program

Executive
positions

Number of Hours for Ability
Development Training in FY2020
Total numberof training
participants

12,211
employees

Total numberof training
hours

50,806 hours

Number oftraining hours
per employee

9.72 hours

of Business Units（＊）Training for senior management to discuss ideal decision-making and behavior from a high perspective© 2021 Sumitomo Corporation

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Human resources management : Human resources development
Human Resources Development Programs
1. Level-Specific Programs
At the time of promotion, we arrange training programs that offers
understanding to the internal rules and literacy necessary for conducting
business. From new employee to senior management, Participants inthe training will understand what is expected of them and what roles
they should fulfill, thereby acquiring tips on how to transform themselves.
We offer 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 isplaced on fostering leadership that can contribute to society throughbusiness, and programs that enable participants to gain awareness forindependent personal growth are provided.

2. Elective ProgramsMore than 90 different selective programs are available, covering
comprehensive knowledge and skills, from basic to advanced levels, thatwill be needed to play a leading role as an executive who can contributeto society through business. After completing the Introductory Seminars
and the Basic Seminars where employees can acquire the basic skills andgeneral knowledge (standard skills and knowledge) required to work for
an integrated trading company, employees can choose any of the
programs where they can learn about knowledge and skills required forthem to do their work. Among these programs, in the course “SC MBA,”participants can study and have discussions on subjects that are

3. Long-Term Programs for Selected Employees
Long-term programs for selected employees are intended to foster a management perspective and for acquisition of theskills for self-directed learning and practical leadership that can be difficult to obtain through short-term programs.
Participants in each program are selected from among those who are demonstrating their abilities at the forefront ofbusiness and those who are expected to take on leadership roles in the future. These Long-term programs contributedevelop the foster of top-tier professionals to be active in various fields.

■PX（Personal Transformation）ProgramThis is a new program created in 2021 for non-managerial personnel. The 10-session program, conducted over sevenmonths, is intended to be aware of personal and company strengths and its issues for more growth through dialogue
with business leaders from the same age and people in different industries. Moreover, this program encourage personaltransformation by completing the processes of new business creation (strategy formulation and execution), andparticipants acquire abilities as professional human resources capable working outside the company.
• Perspectives and viewpoints
needed by leaders• Understanding market value• Understanding personal
strengths and values

Skill input specifically for
new business formulation

New business formation
by cross-function teams

Phase 1: Enhancing Personal
Understanding

Phase 2: Enhancing conceptual
abilities

Phase 3: Enhancing execution
abilities and leadership

Workshop with General Managers of Business Units

This workshop targets general manager and assistant general manager class personnel who are expected to holdexecutive 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 andgiving a companywide presentation on the future of the company.

generally covered in an MBA program. This course is open to any
employees and they can take any course regardless of direct relation totheir department, so it can support their continuing effort to learn. Throughthe course, participants learn the literacy and fundamental theories andframeworks required to be a managerial.
© 2021 Sumitomo Corporation80

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Human resources management : Human resources development
Human Resources Development Programs
3. Long-Term Programs for Selected Employees Sumitomo Executive Management Program
Targeting team leader (department managers) who have thepotential to become executive managers in the future, this programprovides the knowledge and skills needed by executives and fosters
managerial perspectives and philosophy to create executive
management human resources who can contribute to society
through business. Approximately 25 employees participate eachyear, attending 30 sessions over about 10 months. At theconclusion of the program, participants give a presentation to
executives on the ideal state of

Sumitomo Corporation and theirown managerial vision.
O v e r s e a s t r a i n i n g a t I NSEAD ( co n d u ct e d o n l i n e
in FY 2021)
As o n e s e s si o n o f t h e Exe cu t i ve Ma n a g e me n t
Pr o g r a m, a cu st o mi ze d p r o g r a m i s co n d u ct e d
wi t h I NSEAD b u si n e ss sch o o l o n “ i n t r o sp e ct i o n
a n d b e h a v i o r a l r e f o r m. ” T h e p r o g r a m p r o vi d e s a no p p o r t u n i t y f o r p a r t i ci p a n t s t o e xa mi n e mo r e
d e e p l y t h e i r o wn a xe s, va l u e s, a n d l e a d e r sh i p .

4. Overseas and Domestic Programs
As a global business group, the Sumitomo Corporation Group also
conducts many overseas dispatch programs to develop employees
who can work effectively around the world.
Sumitomo Corporation has various training programs that enable
young employees to work overseas including a trainee program
designed to develop human resources who can play an active role in
the global field, a language training program that develops language
and area specialists, a global intern program that focuses on
business in emerging countries, and a study abroad program
primarily for acquisition of an MBA. Each year, 80 to 100 young
employees are dispatched to different regions of the world to work.

5. In-house Education and Awareness-raisingon Respect for Human Rights
As a global organization contributing broadly to society, theSumitomo Corporation Group employs Management Principles thatplace prime importance on integrity and sound management withutmost respect for the individual. Based on this principle, the Groupdeveloped the “Human Rights Policy” and the “CSR Action
GuidelinesforSupplyChain

Management”

that

take

into

consideration human rights and other various issues. We will respecthuman rights to take our social responsibility and pursue sustainablegrowth with society.

We also introduced a “venture internship” program intended toWith the above considered, we have established a committee todevelop individual skills, through the experience from perspective ofpromote human rights and Dowa issues, and we have a forum tomanagerial at a domestic start-up company (we call it venture),creating business from R&D and promote sales. Through thesetrainee programs in Japan and overseas, we are developing
employees’ highly specialized knowledge or diversified experience.

discuss internal issues on human rights such as Dowa issues, suchas Buraku discrimination, people with disabilities, foreign residents,
Human rights violations on the Internet and other issues related tohuman rights every year. We also invite external lecturers to conduct
annual human rights training to raise employee awareness of humanrights issues.

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

The number of trainees dispatched in FY2020

In FY 2020, we also distributed e-learning content on respecting
human rights in business and conducted other internal educational

Overseas trainees

programs for further action.

executive management positions in their respective organizations

Language trainees

are sent to executive programs at domestic and overseas businessIn addition, training seminars on mental health and human resources

schools at the company’s expense.

International
students

management, and training on sexual and power harassment for all

At least 30 employees participate in the domestic program with a

Global internshipmanagers, programs on harassment prevention have also been

Department and division managers who are potential candidates forfocus on business schools in Japan, and for the overseas program,at least 30 employees are sent to leading overseas business schools

Venture internshipwith the objectives of fostering awareness and thinking as a future
executive, acquiring comprehensive management knowledge andexecutive

decision-making

capabilities,andinteractions with other personnel and executives.
© 2021 Sumitomo Corporation

growing

throughmanagers have been conducted. In Level-Specific Programs foradded to maintain a harassment-free work environment and toprovide suggestions on how to address harassment if it occurs.
Through these efforts, we provide employees with education and* The number of people dispatched in FY2020 decreased due tothe impact of COVID-19

raise their awareness to thoroughly prevent human rights violations
at work.

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Human resources management : Human resources development
Activities
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 insubsidiary, to create local opportunities for stable employment and enhance theskills of job seekers. Prolonged conflict in Iraq has had tremendous impacts on the

global talent as well as a strategic multipurpose facility.
As a training center, it is used to further strengthen theofaglobalanddiverseJob Training Programs at Toyota Iraq
Sumitomo Corporation conducts job training programs through Toyota Iraq, aGinza, Tokyo serves as a training center to develop

development

Business description

people, and more than 3 million people have been forced to leave their homes andhave become internally displaced persons (IDPs). The impact on young people has

talentInternational colleagues from different organizations

been particularly large, and creating educational and employment opportunities isan urgent matter. Since 2016, Toyota Iraq has worked with the UNDP to conductand countries all over the world meet at this facility for
intensive discussions on the future visions andsix job training programs for such IDPs, and to date, 68 persons have completed
the programs. Starting in 2020, Toyota Iraq has worked with the International

strategies of the Sumitomo Corporation Group.
Sumitomo Corporation
Global HRD Center

Career Adviser

Organization for Migration to conduct similar programs for persons other than IDPs.
Sumitomo Corporation hopes to achieve sustainable development of local
communities through these programs and will continue to support the creation of
job opportunities and skill enhancement in Iraq through these business activities.

Since April 2007, Career Advisors (CA) have been available at eachorganization with the aim of improving employees‘ career development andreinforcing the organization through providing assistance to individuals andorganizations. CAs have three key roles: providing consultation to individual
employees (subordinates) and supporting problem solving, providing advice
and proposals to organizational management (supervisors) to improve
workplace environments, and providing support for communications amongindividuals and organizations. By performing these roles, they support thecreation of work environments where employees can demonstrate their fullskills and characteristics as well as career development.

© 2021 Sumitomo Corporation

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 and deploy
human resources required for the growth of each business in the medium- to long-term. In
order to allocate human resources strategically in line with business strategies continuously
and on a global basis, the Sumitomo Corporation Group implements the measures below tohelp all employees play an active role, regardless of whether Sumitomo Corporation nonconsolidated, overseas offices or associated companies.

Aiming to recruit and develop personnel who can lead global business operations, theSumitomo 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 atdifferent career levels, such as senior executives, managers, and senior staffs. These
training programs establish a shared sense of the Sumitomo Corporation Group's
corporate DNA and strengthen the sense of unity among employees as members of theGroup 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

Key positions involving
Group management
needed to execute Groupstrategy. Portion in blue
shaded area: General
Manager and above
envisioned in the case of
Headquarters.

The abilities required of key
positions are defined fromthree 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 tocircumstances, candidates are
periodically replaced.

To enable key position
candidates to acquire thenecessary experience, skills,
and abilities, we will
effectively combine job
rotation, job assignment, andoff-the-job training.

Create a global human resources
database

To visualize what kind of human resources we have andwhere, we will build a Group human resources databaseincluding overseas human resources.

Introduce the Global Mobility Policy

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

Introduce the Global Grading System

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

© 2021 Sumitomo Corporation

Sumitomo Corporation Group promotes placing the right person in the right position at theright timing on a global basis, regardless of nationality and affiliation. Based on this policy,
locally hired staff and employees of associated companies are transferred beyond theborders 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 rightplace on a global basis.

Executives / upper managements
In regional offices: 2883Sustainability of
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Human resources management : Utilization of human resources
Activities
Succession Planning/Enhancement of Human Resources Database

Optimal Allocation Under New Human Resource Systemand specialization is essential for the steady creation of solutions (added value)

To continuously realize strategic HR assignment on a global basis, HR
development and appointment of managerial talents according to our businessstrategies, we undertake succession planning covering the next and after-next
generations for key positions (approximately 380 positions equivalent to the levelof general manager in HQ and above) including overseas regional offices andgroup companies. To ensure that candidates for key positions are equipped with
the necessary experience, skills, and other requirements, we develop theircapabilities accordingly, so that we can enhance the talent pool bothquantitatively and qualitatively.

tailored to the social issues of the times, and we will continue rotations

In addition, we are working to create a job grading system to enable comparison

Under

the

new

human

resource

system,toachievethe“Intrinsic

motivation/Great Place to Work” described in the Global Human Resource
Management Policy, we conduct personnel transfers and allocation in agreementwith the company’s expectations and the individual’s career aspirations after
engaging in communication between supervisors and subordinates even morethan in the past in terms of both quality and quantity. As an integrated trading
company, continuous development of talent who combine a variety of knowledge
toexpand this human resource pool. To develop the top-tier professionals specified
in the policy, however, rather than uniform rotations as in the past, diverse
rotations are needed, and we anticipate cases where assignments in a singled
field will be lengthy to raise specialization in that field.

Human Resource Shifts Under SHIFT 2023

of job size on a global basis and a HR database including overseas regional
offices and group companies. We have also made the Global Mobility Policy as
our groupwide rule stipulating compensation and benefit packages forinternational assignment. This will serve as a platform to promote assignment of
talents across countries and regions.

As we re-allocate company-wide managerial resources, in addition to thefinancial aspects, we are addressing human resource aspects by undertaking
optimal allocation of human resources in conjunction with the reconstruction of
the business portfolio as well as strategic human resource allocation tobusinesses covered by the strategic investment fund. As we undertake this reallocation, we are accelerating the human resource shift while gaining an overall
and company-wide understanding of shifts in human resources during the termof the new medium-term plan, strongly encouraging matching based onorganizational human resource needs and individual aptitudes and aspirations,and expanding in-house recruiting systems.
© 2021 Sumitomo Corporation

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Human resources management : Utilization of human resources（Diversity & Inclusion）
Policy and Concept
Promotion of Diversity & Inclusion
The business environment surrounding the Sumitomo Corporation Group has been rapidlychanging and the regions and business fields in where we operate and business models have also
been rapidly diversified. In order for the Group to address such changes and continue to develop ina sustainable way, it is essential to include Diversity & Inclusion in its management strategy.
Based on this environmental understanding, the Sumitomo Corporation Group positions diversity
and inclusion as a source of value creation, innovation and competitiveness in its Global Human
Resource Management Policy and seeks to eliminate all barriers that impede Diversity & Inclusion
and leverage the mix of diverse wisdom to achieve its vision.
In addition, in order to promote Diversity & Inclusion in accordance with this policy, we arereinforcing human resources management under the Medium-Term Management Plan SHIFT
2023 by implementing various measures at sites in Japan and overseas according to the local D&I
context.
To survive this revolutionary world where business is becoming more diverse and challenging, it isessential to effectively use a mixture of diverse wisdom from diverse individuals to improve ourcompetitiveness. With a focus on the diversity of our global talents, especially on each individual’s
strengths, we will combine our forces to further accelerate our growth strategies. As a basis forachieving this, what is important here is the concept of inclusion, or creating an atmosphere thatrecognizes different individualities and respects and accepts the differences. Based on thisconcept, we need to practice inclusion and make effective use of differences as a source ofcompetitiveness.
Simply focusing on visible diversity and eliminating systems and mechanisms that impede inclusion
based on nationality, gender, age, sexual orientation, gender identity and so on, is not enough. We
believe that it is also important to focus on deep diversity that includes different opinions, ideas,values, abilities, skills and experiences, and the elimination of the unconscious bias based on
psychological barriers. We will respect the differences mentioned above, and aim to find the right
direction through mutual contribution of wisdom and thorough discussions among a diverse teamwith shared aspiration, principles and vision, and turn decisions into actions by bringing out thecooperation of all.
In promoting the growth strategy for all the employees of the Group, it is necessary to promote theallocation of the right talents to the right places on a global basis and strategic talent andorganization development, and to nurture a culture and awareness to support these points, while
taking into consideration the deep diversity. Under the common vision set forth in the Global
Human Resources Management Policy, we will collaborate with the overseas organizations topursue Diversity & Inclusion in the Group on a global consolidated basis.

Encouraging More Active Participation of Female Employees in
Business
Sumitomo Corporation sees the active participation of female employees in business as animportant pillar of Diversity & Inclusion, and we have formulated action plans with the aimof advancing this further. Specifically, we have set targets to increase the ratio of women in
managerial positions to at least 20% and the ratio of female general managers to at least
10% by FY 2030 and, in agreement with the Japan Business Federation’s goal of at least
30% female executives by 2030 announced in March 2021, we set a target of at least 30%
female directors and audit & supervisory board members by FY 2030. To achieve thesetargets, we are reinforcing talent development, allocation, and recruitment centered on the
new HR system introduced in FY2021 and are working to create an environment where
each individual can demonstrate their full potential. In addition, in order to support ouremployees to balance life events and career development, we have reinforced tangible
aspects including the establishment of internal policies that go beyond regulatory
requirements and have addressed the intangible elements such as correcting long working
hours, encouraging employees to take paid leave, and reforming employee awarenesswith the aim of creating an environment that facilitates active participation in the company
after childbirth and childcare.

Action Plan (PDF/74KB)(Japanese language only)© 2021 Sumitomo Corporation

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Human resources management : Utilization of human resources（Diversity & Inclusion）
Activities
Support for Balancing Work and Child-rearing
Sumitomo Corporation offers various options that are available
both for men and women with the aim of creating a work
environment where diversified employees who have entered
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 child care leaveand her direct supervisor to provide information on relevant
programs to facilitate her taking the leave and returning towork.

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

Cooperation withchildcare facilities

Re-employment of Former Employees who
had to Leave the Company due to their
Spouse's Transfer
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.
Other supports

Maternity and Child-Care Related Programs
at Sumitomo Corporation
Attaching great importance to diverse values and lifestyles inpersonal work-life management fulfillment, we offer various
optional programs and are flexible and supportive in helping
employees eliminate any problems or concerns.

© 2021 Sumitomo Corporation

Support system for expatriates who bring their children with them.
Childcare consultant services

Retirement
andreemployment
system due to spouse's transfer
Teleworking system andSuper-flextime system

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Human resources management : Utilization of human resources（Diversity & Inclusion）
Activities

Sumitomo Corporation offers various programs to help its
caregiving employees work without anxiety. We are

Program
Consultation on
caregiving issues

Support for Balancing Work and Long-term Care

Seminars on caregiving issues

Taking a leave of absence for a certain period oftime for caregiving

Managing Work-Caregiving Balanceˮ to all employees.

Caregiving while working(once a month). We distributed the “Handbook for

Short working hours

Once monthly

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

and individual consultation sessions on caregiving issues

Once or twice/year

Sumitomo Corporation employees

Flex-time work system

A leave of absence fornursing care

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＊ It can be taken per hour

＊ It can be taken per hourLong term

active role at work. We hold seminars on caregiving issues

Frequency/period

Consultation sessions on
caregiving issues

working to create a work environment where employees
who have entered the life stage of caregiving can play an

Eligibility criteria

Long-term care leave

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

Three times/person
Up to 365 days in total

Other services available© 2021 Sumitomo Corporation

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 services for issues related to longterm care, such us how to use long-term careinsurance services, how to get along with caremanagers and professional caregivers, and how tochoose care facilities; and support services for longdistance care and balancing work and long-term care.
*Payment by users. Those working in Japan can use“Cafeteria Plan” points.

For those with a family member living
separately who needs long-term care or thosestationed in an overseas office who have afamily member living in Japan who needs longterm care, home monitoring services provided
by SECOM Co., Ltd. or CENTRAL SECURITY
PATROLS 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 to achieve
active involvement of all employees regardless of age. The aim is to provide all
employees with opportunities to play an active role at work. As part of this effort, we
adopted in April 2006 an employment extension system that is available for all employees
who reach the mandatory retirement age of 60 and want to continue working to the age of65.

CLP (Career & Life Planning) Training
CLP training is provided to employees 45 years of age or older to give them an
opportunity to look back on their experience of working at Sumitomo Corporation anddevelop their career and life plans for further improvement in the future, regardless ofinternally or externally.
In this training, we explain the company’s employment extension system and retirement
benefits, public pension plans, long-term care and other insurance systems, and otherrelevant programs, thereby providing information on financial planning, which isnecessary when considering life planning.

Career Assessment Interviews
Employees 45 or older can consult on post-retirement career and life planning when they
conduct their annual interview with their supervisor. In interviews conducted two years
before mandatory retirement, employees who wish to continue working after the
mandatory retirement age are informed by a supervisor about their likely assignment andsalary. By creating an early opportunity to compare the desires of the employee with the
expectations of the organization, we provide support so that employees can makeindependent decisions regarding the flexible work styles that they want after retirement.

Support to Find a New Job Outside the Company
For employees looking for new job opportunities outside the company, we provide reemployment support services such as consulting with a specialist career consultant froma re-employment support firm under contract with the company.
© 2021 Sumitomo Corporation

Promotion of the Employment and Retention of people withdisabilities
As part of its efforts in corporate social responsibility and toward diversity, Sumitomo
Corporation has been promoting the employment of people with disabilities. In 2014, weestablished Sumisho Well Support Co., Ltd., a special subsidiary company, to promote theemployment, retention and career development of people with disabilities. Employees ofSumisho Well Support are engaged in various tasks, such as supplying office stationery, inhouse mail delivery, making name cards, and converting data into PDF files to promote
paperless transactions. In conjunction with the expansion of business, the number of
employees has increased, and we had 56 employees (including 39 people with disabilities)
as of July 2021. We will continue to work together with people with disabilities and help themgrow and encourage them to be independent. Sumitomo Corporation Group as a whole will
strive to achieve the legal employment rate and expand job opportunities for people withdisabilities.

Raising Understanding of LGBTQ* Employees
The Sumitomo Corporation Group Compliance Policy (established March 2019) and the
Employment Rules codify that no fear or discomfort shall be caused through sexualized
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 createdan LGBTQ consultation desk, set out employment rules that enable the same sex partnersof employees to enjoy certain employee programs, and are taking various other measures tocreate work environments free from any discrimination to LGBTQ employees.
(*) LGBTQ ：L= Lesbian, G=Gay, B= Bisexual, T=Transgender, Q= Questioning, Queer

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Human resources management : Creation of work environment
Policy and Concept

Activities
活動

Creation of an Environment Where Diverse Individuals canDemonstrate their Fullest Abilities

Reduction of Overtime

Sumitomo Corporation formed the company-wide “Work-life Balance Promotion

Sumitomo Corporation has promoted a smart work style with smart distinction

Project Teamˮ in April 2005. Since its launch, the team has implemented various

and switchover between “work with full energyˮ and “enjoy private life.ˮ As

efforts. In December 2015, the team's name was changed to “Work-Lifebusiness is becoming diverse and sophisticated, job types and tasks are also

Managementˮ in order to clarify our underlying idea that employees should

becoming diverse. Under these circumstances, the management of working

promote a smart work style over a medium- to long-term perspective andhours by reducing them quantitatively and uniformly does not suit the current

proactively manage work life balance. How to manage work-life balance depends

situation. Merely working long hours does not necessarily result in betteron individual values and lifestyles. We believe a fulfilling life as a whole, both atachievement. In terms of improving global competitiveness, company-wide

work and in private life, produces vitality, which serves as a driving force to create

efforts will be continued to pursue an output-focused work style that generates

new value. In this context, Sumitomo Corporation offers various kinds of options

added value. We have programs for employees to share information on efforts toto help employees address various issues. We also use and promote an output-

raise awareness and other useful information. Examples are shown below:

oriented approach to work, which generates high added value.

Reduction of Overtime- Training and seminars on Labor Management- Regularly holding labor-management roundtable discussions- Awareness raising efforts

Encouragement to Use Entitled Leaves- Promoting to have paid leave utilization- Initiatives for “Premium Fridays”- Spouse maternity leave , Refresher leave, Volunteer leave

Training and Seminars on Labor Management
We provide training on labor management as a part of the new manager
training and new team leader management programs. In 2019, we
conducted a seminar on labor management for all employees to provide
cautionary information relating to labor management in conjunction withlegislation on work style reforms coming into effect in April of that year. We
undertake ongoing educational activities to raise awareness regarding labor
management.

Promotion of Flexible Work Styles- Teleworking system- Super flexible work hours system- Dress Code Modified© 2021 Sumitomo Corporation89

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Human resources management : Creation of work environment
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 company-wide target number of paid leaves tobe taken from 2016 to 2019. The number of days of paid leave taken has steadily
increased, and the target was achieved. Starting in 2020, rather than setting acompany-wide target that applies uniformly to all employees, we adopted a policyof allowing each organization and individual to perform independent management.

Creation of a Work Environment to Realize Self-sustaining andFlexible Workstyles
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 systemapplies to about 4,000 employees working for Sumitomo Corporation in Japan. As arule, 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 ofmore than 100 satellite offices mainly located in Tokyo, which is helpful for them toexpand the work area flexibility. There are no particular restrictions on use, in general.
Employees in different circumstances, such as providing childcare and long-term care,

Targets and Results of Paid Leaves Taken by Employees
2016： each employee taking at least 12 days/ 92.7％
2017： each employee taking at least 14 days / 95.7％
2017： each employee taking more than 16 days on average / 100％

throughout the company, are provided an opportunity to work proactively and flexibly.
Since March 2020, the existing two days per week limit was eliminated in response to
the COVID-19 pandemic, and the system has been operated with consideration forwork-life management such as allowing teleworking while performing childcare or
family care at home. In October 2021, we proposed a best-mix work style that uses
both in-office and at-home work according to what is best for each organization and2018： each employee taking at least 14 days / 94.3％

individual to maintain both employee safety and business continuity. As a result of

2018： the non-binding target set to 16 days / 64.8％

these types of initiatives, the average in-office attendance rate in FY2020 was 24.5%.

2019： each employee taking 16 days off / 82.7％

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 andmanage their own work style, leading to further improvement of the performance bothof the organization and each employee.

© 2021 Sumitomo Corporation90

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Human resources management : Creation of work environment
Activities
Creation of a Work Environment to Realize Self-sustaining and Flexible Workstyles
Dress Code Modified

MIC Selects Sumitomo Corporation for Telework Pioneer 100

As a part of our efforts to develop flexible work environments that promote

MHLM Selects Sumitomo Corporation for the Excellence Prize of Telework

employee autonomy, we focused on work sites and times and introduced thePromotion Company Award

teleworking system and the Super flexible work hours system 2018. To build on

Sumitomo Corporation introduced the teleworking system in November 2018 as a part ofthese systems, in April 2020, we reviewed the dress code to promote changes
in individual and organizational awareness and further promote autonomous
work styles. After organizing current rules on attire, we eliminated dress codes

its workstyle reforms and has focused efforts on new work styles. These efforts have beenrecognized, and the Ministry of Internal Affairs and Communications (MIC) selected
Sumitomo Corporation for inclusion in the Top Hundred Telework Pioneers for FY2019.
Through Top Hundred Telework Pioneers, MIC recognizes companies and organizations

within the scope of common sense appropriate for the work and workplace atwith sufficient achievements that are advancing the introduction and utilization of

the company according to TPO.

telecommuting. In 2019, we implemented an initiative entitled Work Style Transformation
2019 with the aim of further promoting new work styles that make use of new systems. Our
efforts in including continuously informing personnel about teleworking by sharing officers’
accounts of their experience of teleworking via internal newsletters and videos andcompanywide implementation of teleworking were highly evaluated, and we received theAward for Excellence as the most outstanding company in fiscal 2020 in the Minister of
Health, Labour and Welfare’s awards for enterprises that promote telework (Kagayaku
Telework Award).
Going forward, we will implement additional
workstylereformstopromotepaperlessoperations furthermore, enhance employee
IT literacy, improve operational flows, andmake other improvements.

© 2021 Sumitomo Corporation91

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Supply chain
Activities
活動

Policy and Concept
The Sumitomo Corporation Group is engaged in globally-oriented business in a wide range of fields. It is our responsibility toappropriately 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 theimplementation of these guidelines, we are aiming to realize a sustainable society by working together with our suppliers andbusiness partners to achieve responsible value chain management. The Company provides numerous opportunities to promote theunderstanding and entrenchment of these guidelines, including training for new employees and locally hired employees, meetings
within business units and domestic and overseas regional organizations, and pre-departure briefings with employees being sent on
overseas assignments in order to promote sustainable supply chain management. In the event that we find violations of theseguidelines in our supply chains, we will urge the suppliers, business partners or contractors, etc. to remedy and improve the situation,
while providing support to them as needed. However, if there are no improvements to the situation by them, we will consider carefully
whether to continue our business with them or not.
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 andsound management with the utmost respect being paid to the individual.
In order to promote sustainability and social wellbeing in accordance with our mission, the Sumitomo Corporation Group hereby sets down these CSR
Action Guidelines for Supply Chain Management. With a view to further strengthening the global relations which form one of the foundations of our corecompetence of integrated corporate strength, we request our suppliers and business partners to kindly accept, understand, and practice 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.
9.
10.
11.

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 all other forms ofcorrupt business practices
Ensure appropriate information security
Cooperate with members of local host communities and contribute to sustainable regional development
Disclose information regarding the above in a manner both timely and appropriate.

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

Conflict Minerals Policy
The Dodd-Frank Act, which was enacted in July
2010, requires US-listed companies to trace thecountry of origin of minerals used in their products
within their supply chains to determine whether or
not "conflict minerals“(*) produced in and aroundthe Democratic Republic of the Congo areincluded. 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 that a conflictmineral is used by our partner company, ourreputation could be harmed and it may affectcustomer selections. We therefore gather relevant
information regularly and managed it unitarily.
(*) The Dodd-Frank Act defines conflict minerals
as tin, tantalum, tungsten and gold.

Interpretation of The Sumitomo Corporation Group CSR Action Guidelines for Supply Chain Management© 2021 Sumitomo Corporation

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Supply chain
Activities
活動

Certification
認証
Certification

Business description

Measures Taken through Sustainable
Supply Chain Certification
RSPO: Roundtable on Sustainable Palm Oil

Measures Taken in the Chemical and Electronics Industries
2-1036-19-100-00

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

FSC® : Forest Stewardship Council

We obtain FSC® -CoC certification, an international forest
management certification system, and provide customers
with FSC® -certified products mainly from our group-companies.

PEFC™：Program for the Endorsement of Forest Certification Schemes
We obtain PEFC™ CoC certification, an international forest management.

SBP: Sustainable Biomass Program

In September 2019, we became the first Japanese company
to obtain SBP certification for CoC (Chain-of-Custody) andCollection and Communication of data. SBP is a certification
system providing assurance that woody biomass used inenergy production is sourced from legal and sustainable sources.

ISCC PLUS：International Sustainability & Carbon Certification PLUS

We obtain ISCC PLUS, an international certification for bio-based products. This allows us totrade ISCC certified products.

ASI：Aluminium Stewardship Initiative

We are a member of the Aluminium Stewardship Initiative (ASI), the global aluminium
industry organization. As an active participant in trading aluminium materials and products
globally, we support ASI activities and standards across the global aluminium value chain.
© 2021 Sumitomo Corporation

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 ofapplications. Before starting business transactions, the company confirms that eachsupplier of raw materials does not use conflict minerals, which are key funding sources for
local armed groups, and appropriately manages chemical substances contained in theirproducts in line with customer's demands, to make sure that no issues related to theenvironment and human rights have been reported. Sumitomo Shoji Chemicals is amember 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 andresponsible 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 of its clients, whose objectives include the promotion of environmental protection.
It also requires its suppliers of raw materials to agree on a green procurement program andother relevant programs and to comply with environment-related laws and regulations, andfollows their implementation.

Business description
Expression of Support for UN Food Systems Summit
Sumitomo Corporation expressed its support for the United Nations Food Systems Summit(FSS), declaring that it will contribute to global sustainable food systems through a range offood and agricultural businesses conducted by the Sumitomo Corporation Group.
The FSS, scheduled for September 2021 in New York, will be the first international forum
having discussions on the sustainability of food systems as a global common agenda andsetting a vision for the future. The summit is being held based on the belief of UN SecretaryGeneral Antonio Guterres that transformation to sustainable food systems will be crucial fordelivering the Sustainable Development Goals (SDGs).
Ministry of Agriculture, Forestry and Fisheries
Our commitment
FSS related websites (Japanese language only)93Sustainability of
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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 all industries. 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 theexisting frameworks.

Business description

Business description

Participation in a Commercial Lunar Exploration Program

HAX Tokyo Accelerator Program

Sumitomo Corporation has signed a contract with ispace, a company that aims to create
an earth/moon economic sphere by developing a city/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 the moon as one economic zone byrealizing 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 tocreate 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 and infrastructure 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 inspace business since 1994 and has participated in government-led international spacedevelopment through Hamilton Sundstrand Space Systems International, a joint venturewith United Technologies Corporation. Hamilton Sundstrand develops,

In 2019, Sumitomo Corporation, acting in collaboration with SOSV investments LLC(USA-based venture capital firm) and SCSK Corporation, established HAX Tokyo(theJapanese version of HAX, the world’s largest accelerator program focused on hardware).
HAX provides support for prototyping and mass production by hardware startups inShenzhen, China and supports fund raising in San Francisco, USA. HAX Tokyo,
meanwhile, is a pre-program to find and support hardware startups in the seed stage inJapan so they can be sent to HAX Shenzhen. The selected startups will be taught thefundamentals of startup management, design thinking methods, and other information
through HAX’s unique workshops. At the same time, outside experts from various

manufactures and markets space
suits, environmental control systems,
and other products. We have now
started tackling the challenges of thenext stage of space business andentering the new field of commercial
space development.

Lunar module manufactured by ispace (illustration)© 2021 Sumitomo Corporationcompanies
andpersonnel
from
Sumitomo Corporation will provide
hands-on support to the startups andvarious persons from inside andoutside the companies will beincorporated to support “PoC”, proof ofconcept, and business development.
To date, three batch programs havebeen provided, and investment in andcollaboration with some promising startups have been implemented.
Through this program, Sumitomo
Corporation
seeks
toexpandcollaboration with startups and will
undertake a variety of programs tobroadly energize Japan’s hardware
industries.

Source: HAX Tokyo HP “Selected companies”

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Healthcare
In recent years, the expansion of medical expenses accompanying the increase in the elderly population has become a global social issue, and the healthcare market is expected to expand
rapidly. The Sumitomo Corporation Group has set healthcare as its Next-generation growth fields in this Medium-Term Management Plan since April 2021 and plans to strengthen andnurture businesses in this field over the medium- to long-term within the company. While utilizing existing business foundations and functions, such as Tomod‘s which operates a drugstore
with a dispensing facility, and the generic pharmaceutical business in the United States, we are strengthening and promoting initiatives for the development of new business models that leadto more efficient control of medical expenses, the expansion of digital health businesses utilizing technological innovations such as IoT and AI, and the development of medical infrastructurein emerging countries.

Business description
Participation in Healthcare Business
The Sumitomo Corporation Group is engaged in operating drugstores that provide
prescription dispensing services and in providing healthcare services. By widely
disseminating information on home health care and long-term care services andpromoting the use of such services, we contribute significantly to improving accessto better healthcare and people's quality of life.
Efforts in healthcare services business include investments in eWeLL Co., Ltd., acompany that develops and sells business support systems for visiting nursing
service providers, and Community Healthcare Coordination Platform, Inc. (CHCP),
which provides business support services to medical and nursing care providers in
2017; and Integrity Healthcare Co., Ltd., which develops and sells online medical
consultation systems for medical institutions in 2018. In 2019, we entered
managed care service in Malaysia.
The iBow, offered by eWeLL, is a cloud service that enables users to manage
patient information from PC or tablet. It was developed in response to thencreasing importanceof and need for visiting
nursing services for the
purpose of reducing
administrative burden
on visiting nurses andimproving the efficiencyof their services.
© 2021 Sumitomo Corporation

CHCP aims to create a new integrated community care system, in cooperation withhealthcare and nursing care providers, taking into consideration provision of funds,
business management expertise, and management personnel; establishment of acooperative system among healthcare and nursing care providers; and adoption of
cutting-edge technology and examples in other industries.
Integrity Healthcare Co., Ltd. offers the YaDoc telemedicine system, which
provides an environment where telemedicine by a physician is combined withaccumulated data on the daily health condition of the patient, based on which
treatment tailored to his/her needs is constantly available.
Managed care service is a system that promotes affordable and better medical
services and contributes to people’s healthy life through cooperation between
private health insurance companies, managed care providers and medical facilities.
Through these business activities,
we will continue to contribute tocreating a foundation 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 toincreased population and economic development. In many of these countries, however, many people arewithout sufficient access to healthcare services and medicines due to poor social infrastructure and healthcare
environment, and for financial reasons. The Sumitomo Corporation Group has made significant contributions
to improving people's quality of life through providing comprehensive support to players in the pharmaceuticalindustry, from upstream to downstream, 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 inemerging countries.
At present, the world pharmaceutical market is worth about 127 trillion yen, of which about 40% is accounted forby the US market. In the United States, while demand for medicines is expected to rise as the elderly population
is increasing, the government has been working to reduce medical costs. In these circumstances, the use ofgeneric drugs is expected to grow. We have acquired a 20% stake in the generic pharmaceutical company
Upsher-Smith Laboratories (USL), which is owned by a US subsidiary of Sawai Pharmaceutical Co., Ltd., throughSumitomo Corporation of Americas 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 ofbusiness experience.
We take advantage of the strengths unique to integrated trading companies in supplying raw materials andlaunching new products in order to support USL's business. We will provide high-quality generics to many
patients through USL in order to thereby contribute to people's mental and physical health.
In Brazil, Russia, Turkey and other so-called "medically emerging countries," the pharmaceutical market has
been expanding significantly as their economy is developing and living standards are improving. Their market
growth rates have exceeded the average growth rate of the global pharmaceutical market and are expected toaccount 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 support in local manufacturing on
which each government places emphasis. Through these efforts, we will be more active in contributing topeople's health and better lives.

© 2021 Sumitomo Corporation

USL Head Office (Minnesota, USA)

Generic drugs

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Local infrastructure / Community planning
Many regions, especially in emerging countries, are experiencing problems such as aging and urbanization. The Sumitomo Corporation Group is accelerating its provision ofadvanced lifestyle-related services that contribute to the resolution of these problems and a more affluent life for all people, and in its participation in urban development, smart
city projects, and infrastructure development projects.
Business description
Community-based Support for All Aspects of Life
Sumitomo Corporation Group has been operating a cable television business in Japan for over 30 years.
JCOM, a Sumitomo Corporation Group company, has expanded its services from the broadcasting andcommunications fields of TV, Internet and fixed-line telephony to include mobile phone, electricity, gas,

J:COM Everywhere

home IoT and other lifestyle-related fields. The number of subscribing households has grown toapproximately 5.6 million (as of the end of March 2021) with the strength of its community-based, attentive
support.
In the electric power business, JCOM launched a retail service for households in 2016 in cooperation with
Summit Energy, a member of our group. The number of subscribing households has grown to over 1 million(as of the end of March 2021), thanks to its ability to save on electricity bills by combining other services
such as TV and Internet without the need for installation.
As part of its efforts to expand new lifestyle-related services, JCOM is providing a remote medical service
called “J:COM Telemedicine” from July 2021. The service allows customers to make an appointment at a
medical institution, have a medical interview, and receive a medical examination via webcam on their home
TV screens. In anticipation of future regulatory reforms, it is considering further expansion of the service toinclude online medication guidance and prescription delivery. JCOM is working to resolve issues incommunity

healthcarebyprovidingface-to-face

support by its staff upon customer's request. In the

Telemedicine

future, JCOM is considering expanding its communitybased lifestyle-related services in collaboration with
Sumitomo Corporation Group businesses such as
mobility and smart cities.
We will continue to contribute to solving regional
issues and creating a foundation for comfortable andexciting lifestyles by providing services that are close
to customers' lives.

© 2021 Sumitomo Corporation

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Local infrastructure / Community planning
Business description
Solving Social Issues through Developing 5G Infrastructure and Solutions
We have positioned 5G as a key technology for promoting DX and an important"Base Station Sharing Business" Service

platform that will have an impact on the society in general and are working on the"base station sharing business" and the "local 5G business for regional
communities."
In the “base station sharing business”, we plan to provide 5G-centered base station
sharing services to mobile carriers through Sharing Design, Inc. established with
Tokyu Corporation in February 2021. 5G requires many base stations as its
coverage area per base station is narrower than that of 4G. Therefore, mobile

5G shared antenna

SharedAntenna

Facility oftelecom A

Facility oftelecom B

Facility oftelecom C

SharedFacility

5G of eachtelecom

Facility oftelecom D• Reduce capital investment foreach telecom

carriers are facing an increased burden of capital investment and a shortage of base

• Environmentally friendly
through sharing

station location in urban areas. Base station sharing is a solution to these problems,Conceptual image of
5G shared antenna coverageand through the expansion of "base station sharing," we aim to realize a 5G society
as soon as possible and lessen the environmental impact by reducing the
installation of base stations.
In the “local 5G business for regional communities," we are providing infrastructureservices mainly to cable TV operators by utilizing the community-based businessand communication infrastructure cultivated over many years in the cable TV
business, as well as the industry-unified wireless core network(*) owned by Grape

Planned Fields of Development for the " Local 5G Business For Regional Communities”
DisasterPrevention
River flooding
monitoring etc

Smart
Factory
Automation ofquality inspectionetc.

One Co., Ltd., a Sumitomo Corporation Group company. “Local 5G" allows local
governments and companies to build and operate their own 5G communication
networks in "limited areas“. We will use “local 5G" to solve social issues and achieve
industrial DX in various fields such as factories, universities, railroads, and disasterprevention, and realize more convenient and developed regional communities.

Railway
Automation of railway
maintenance work etc.

Universities
Upgrading of thecampus network
Sophistication etc.

(*) The industry-unified wireless core network: Shared wireless core network acrossthe cable TV industry© 2021 Sumitomo Corporation98

Sustainability of
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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 that 68% of the global population will live in

The number of sales of new vehicles in Indonesia
with a population of about 270 million is one
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,collectively as the OTO Group. The OTO Group
has a network of 238 branch offices throughout
Indonesia, mainly in Java and Sumatra and has
provided its services to a cumulative total of morethan 9 million customers.
It helps secure transportation for a wide range ofincome groups to support local infrastructure.
In Indonesia, the middle-income population
reached about 200 million in 2020 and will keepincreasing. The market is therefore also expected
to expand. We will continue our support to help
customers achieve prosperity and dreams throughautomobile and motorcycle financing business.

urban areas by 2050. Traffic congestion, air pollution and parking shortages have already become social issues
in some urban cities. In response, people are paying attention to efforts to optimize transportation networks andenergy consumption using IoT technology.
In October 2018, our Group launched a car-sharing business in Stockholm, Sweden through Aimo Solution AB.
With 300 electric vehicles, we provide a flexible and convenient service, enabling customers to pick up and returnvehicles at the parking facilities of Aimo Park Sweden, which our Group acquired in April 2019, or anywhere
within designated zone in Stockholm. By providing our car-sharing service, working with and complementing
public transportation, we deliver seamless and waste-free transportation. We seek to solve various issues thatcities in developed countries are facing, such as congestion and a shortage of parking, and contribute to urban
development that invigorates people and communities.

Services using a fleet of 300 electric vehicles© 2021 Sumitomo Corporation

A series of processes from searching and booking of avehicle, unlocking and locking of the vehicle, to payment
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 issues through its
business activities and its social contribution activities with the aim of contributing
to create a sustainable society by fulfilling its Management Principles and Activity
Guidelines as a global business group.

The Sumitomo Corporation
Contribution Activities

Group’s

Basic

Principles

on

FY2020 Social Contribution Activity Costs
Total social contribution activity costs (unit: million yen)

Head office
operational
Programs
170

SocialOBJECTIVE
We, as a global organization, will work on social issues through our businessactivities and social contribution activities with the aim of building a sustainable
society by implementing the Sumitomo Corporation Group’s Management
Principles and Activity Guidelines.
ACTIVITIESWe will engage in social contribution activities aimed at developing the next
generation of human resources who will drive the sustainable development ofsociety, and contributing to local communities in areas we do business all over
the world. We will also take part in various activities as a good corporate citizen.
APPROACH
We will perform and seek to continuously improve our activities with modesty andhigh aspirations and endeavor to maintain a high level of transparency whilestrengthening our relationships with all our stakeholders.

© 2021 Sumitomo Corporation

General donations/advertising, etc.
434

Head office andregionalorganizations inJapanand abroad
793

FY2020 results
1,654million yen
Operation at localorganizations inJapanand abroad
189

Consolidated
subsidiaries
862＜Notes＞*The values above for local organizations and consolidated subsidiaries were
calculated based on questionnaire results.
*Does not include Associated companies.
*Values reported by overseas offices were converted to yen using the exchange rate
as of March 2021.

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Social contribution activities
Activities
Developing the Next Generation of Human Resources
The TOMODACHI Sumitomo Corporation Scholarship Program (Since 2014)

The University of Tokyo Global Leadership Program (Since 2013)

Sumitomo Corporation participates in the TOMODACHI

Sumitomo Corporation supports this program as a

Initiative, a program of exchange between Japan and theleading partner. Through the program, we aim to develop

United States led by the U.S. Embassy in Tokyo and the U.S.-

the next generation of leaders who can engage inJapan Council (Japan). We organize a scholarship program fortransverse

collaborations

andproposeinnovative

university students that are sent to the United States as

solutions to global issues. We provide financial support toexchange students. We provide not only financial support but
also training opportunities at Sumitomo Corporation of Americas.

the university for sending students to leading overseas

Program participants have access to experiences not available on campus during anadvise to students who engage in practical research andoverseas study break. By FY 2020, 47 students had participated in this program.

serve as a bridge between them and the real world.

universities on a short-term basis. We also provide

The Sumitomo Corporation Scholarship (Since 1996)
We set up the Sumitomo Corporation Scholarship in 1996, the year of our 50th anniversary in the trading business. The purpose of the scholarship is tohelp emerging Asian countries, including Indonesia, Myanmar and Bangladesh, develop the human resources who will lead the countries’ futures. The
number of students who have benefited from the scholarship totaled 16,600 by the end of FY2020.

Contributing to Local Communities in Areas We Do Business
Promoting Barrier-free Movies (Since 2004)

Introducing Japanese Culture（Since 2015）
With the aim of building good relations with local communities at

Sumitomo Corporation promotes the widespread viewing

overseasof barrier-free movies as a part of its initiatives to support

businessbases,

we

give

presentations

anddemonstrations on traditional Japanese culture. Under thiscommunity and social participation by persons with

program, we visited Myanmar, Ghana, Iran, Mexico, Cuba andthe UAE to introduce Japanese culture to a total of 160,000 people.

disabilities. We provide barrier-free versions of movies at

In 2019, we conducted the program at the Kesennuma Shishiori Marine Product Processing

throughout Japan so that visual- or hearing-impaired

no

cost

to

libraries

andvolunteerorganizations

Cooperative in Miyagi Prefecture, to which Sumitomo Corporation is providing support ofindividuals can enjoy movies with their friends andindustrial recovery. Technical trainees working at member businesses of the cooperative werefamilies. So far, about 47,000 people have viewed theinvited from overseas to such hands-on experiences as kimono wearing and a traditional

movies in this activity.

Japanese tea ceremony.
© 2021 Sumitomo Corporation

Social Contribution Activities

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

EMEA & CIS

AMERICAS

Sumitomo Corporation Scholarship Program in the Sultanate of Oman

Social Contribution Activities in Americas Week

Aiming to contribute to private–sector exchange
between Japan and Oman and to thedevelopment of future leaders in Oman,
Sumitomo
Corporation
andSumitomo
Corporation Middle East TZE have launched thescholarship program and have been supporting
Omani students studying at graduate schools inJapan. In FY2019 we supported two students
and in FY2020 we supported three students.

Sumitomo Corporation of Americas holds anannual companywide event, Americas Week,
during which employees carry out social
contribution activities. In 2020, offices acrossthe Americas joined together to partner with
Table for Two, a nonprofit organization
focused on nutritional education and providing
school lunches to students in need throughout the U.S.

We will continue to support several students annually afterwards.

EAST ASIA

Supporting Education in Poverty Areas
In China, Chinese and Japanese employees
cooperated in collecting donations, which werematched with an equal sum by group companies
and then used to support disadvantaged students
in Anhui Province.
In order to expand students' horizons, various
activities have been carried out. This activity waslaunched in 2009 by Sumitomo Corporation(Shanghai) Limited and has now expanded to Sumitomo Corporation China Group.
© 2021 Sumitomo Corporation

Through SC Americas’ generous support, including a special employee Onigirimaking event and social media campaign, SCOA was able to provide 42,300
school lunches to students in need throughout the communities surrounding its
New York, Los Angeles, Houston and Washington D.C. offices.

ASIA & OCEANIA
Reaching Out in the COVID-19 Pandemic
In FY2020, our offices across Asia and Oceania
continued to reach out to local communities
despite challenges posed by the COVID-19
pandemic. Apart from financial aid, donation of
IT equipment and scholarship awards to theneedy, hundreds of volunteers took part invarious activities. Examples include supporting
elderly healthcare, uplifting rural education andpreparing students for the corporate world.

This photo was taken before COVID-19
pandemic.

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Activities
Initiatives at Group Companies
Activity description

Activity description

CAMP workshop (SCSK group)

Contribution to Local Communities in Thang Long Industrial Park in Vietnam

The SCSK Group upholds “Create Our Future of Dreams” as its corporate
philosophy. In cooperation with a range of stakeholders, the Group has been
conducting social contribution activities to solve social issues in order to help
create a sustainable society.
The Group’s Children’s Art Museum & Park (CAMP) is an activity for children—thenext generation of leaders. Through CAMP workshops, children learn various ways
to express themselves. By participating in creative group activities in theworkshops, they also acquire social skills and learn to enjoy acknowledging others
and accepting diversity.
By engaging in creative, collaborative activities and presenting their work in theworkshops, children find how to express themselves in their own way and expand
their circle of communication.
Also, employees of the Group’s bases voluntarily participate in the workshops as
facilitators. They learn a great deal and have satisfying experiences, which help
them develop and increase their work motivation.
Since the activity’s launch in 2001, the SCSK Group has held a total of 899
workshops as of the end of FY2020, in which a total of 18,462 children participated.

We have developed three industrial parks in northern Vietnam: Thang Long Industrial
Parks. More than 210 companies operate in total, which provide for approximately
80,000 direct employment. Sumitomo Corporation, in cooperation with theVietnamese government, is operating the Parks to ensure stable supply of
infrastructure, including electricity and industrial water. The Parks also support tenantcompanies in its employee recruitment and labor affairs.
We organize annual football and marathon competitions at the Parks to promote
community building and increase tenant company satisfaction. We hope that the
COVID-19 pandemic will soon come to an end so that we can resume these events.
In addition, in line with our vision to deeply root our developments within the local
communities, we provide scholarships for nearby students, carry out traffic safety
awareness-raising activities, and donate COVID-19-related medical supplies.
Together through our business and social activities, we will contribute to theprosperity of everyone related to the Parks as well as the sound development oflocal communities.

Granting scholarship money to students ofa local elementary school© 2021 Sumitomo Corporation

Football competition held with the participationof companies located in the Park

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Third-party
Assessment“100SEED” Social contribution activity program looks ahead to the next 100 years
100SEED
100SEED Launched with Global Group Employees to Mark Centennial
Under the 100SEED social contribution activity program, Sumitomo Corporation Group
employees around the world hold discussions and conduct activities in considerationof the society 100 years from now.
Selecting “Quality Education” as the global
theme, Sumitomo Corporation will make useof its human resources to implement thisprogram on a medium- to long-term basis,
thereby contributing to society and achieving
sustainable growth together with it.

POST : Discussing Social Issues to be Addressed in each Region Basedon Online Posts
In order to decide the theme, Employees were encouraged to post social issues fromamong the Sustainable Development Goals (SDGs) to be addressed by the Sumitomo
Corporation Group. In approximately 3,000 posts, #4 of SDGs, Quality Education, received
the most votes, but climate change, 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 perspectivewith the hope of making this initiative asocial contribution activity program for

Mission Statement for 100SEED
We have selected “Quality Education” as the grand theme of the 100SEED (SCEmergent Evolutional Deed) program upheld to mark the Sumitomo Corporation
Group’s 100th anniversary. Under this theme, we are committed to develop andsupport a variety of social contribution activities on a global scale.
Recognizing that “Quality Education” is a vital part of the sustainable
development of society, we will continue to inspire ideas for supporting quality
education to produce the talent needed to solve the many social challenges
facing the world.
By promoting 100SEED, we encourage our SC colleagues around the world tocreate 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 by learning fromothers and pursuing individual ideas through collaboration. We will commit timeand resources to social action that will benefit any of us seeking to better society
through quality education.

discussing together and acting globally.

DISCUSS : Leverage the Sumitomo Corporation Group's Diverse Ideas
to Address Various Social Issues
Specific activities were discussed in each region. In Japan,
to reflect the opinions of many employees concerning action
proposals on education, 31 workshops were conductednationwide and 413 proposals were submitted. Based on
this, experts including researchers and members of NPOs
and government were interviewed and proposals for
activities

wererefined.

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, “Educational Support for a Multicultural Symbiotic Society”, “Career Education”, and “Pro
Bono Educational Support” were selected as the activities
for carrying out the 100SEED concept.

© 2021 Sumitomo Corporation

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100SEED
ACT : Provide our Key Management Resources, Time and Human Resources, with Aiming to Create a Sustainable Society
Through the 100SEED activities, each of our Sumitomo Corporation Group employees will learn, get inspired and broaden own views tocontribute to the creation of a sustainable society while achieving self-growth.

◆Activities at the Head office
In Japan, we have been implementing the following 3 projects, in which 151 employees participated in FY2020.
Educational Support for a Multi-cultural Symbiotic
Society
In Japan, there are at least 50,000 children and youth whohave roots in foreign countries, and are in need ofJapanese language education. However, the level of
support provided by local governments greatly differs, andmany children cannot receive adequate support in theirlocal communities.
Sumitomo Corporation has been cooperating with theJapan Center for International Exchange (JCIE) to assist
NPOs that are supporting these children, aiming to build
an inclusive society in which they can lead fulfilling lives
beyond cultural, habitual, and linguistic differences.
In FY2020, 21 employees helped five NPOs launch theiractivities or plan career support events, and assisted theorganizations with giving learning support to children.
Since April 2021, 44 employees divided into groups havebeen supporting a total of seven NPOs. Their earnest andsincere activities have been highly appreciated by theNPOs, including both the group
activity for pro bono support
and the learning support
activity conducted by individual
employees.

© 2021 Sumitomo Corporation

Career Education Support: “Mirai School”

Pro Bono* Support for Educational NPOs

In the face of rapid structural changes, it is becoming
increasingly important for children to develop “zest forliving” on their own. Under this project, we send our
employees to senior high schools to give lectures tostudents who have not imagined their future to help
them build clear ideas about their future careers. In
the lectures, the employees share our diverse values
and experiences with the students to provide themwith an opportunity to think about their future, thereby
contributing to the development of the next
generation of leaders.
In FY2020, we gave lectures to about 1,800 students
at 13 high schools. Students attending the lectures
have given us positive feedback, saying that “Thelecture changed my ideas about my future career.”
Employees who served as lecturers also commented,“Giving the lecture made me think about my own
career,” and “It increased my interest in social issues.”

Many of educational NPOs are in need ofmanagement support due to the shortage of humanresources. In this activity, Sumitomo Corporation
makes use of our employees’ business skills andexperience to support the enhancement of the NPOs’
management foundation, thereby contributing to thesolution of a range of educational issues.
In FY2020, we assisted six NPOs in the areas ofcommunications, improving operations, fundraisingand strategy planning, and have already seen positive
results in the pro bono activity. For example, one of
the NPOs got commissioned for a project by the local
government because of using the presentationmaterials that we created in the activity.
In FY2021, we will support another six NPOs, and arecommitted to conducting activities to help theorganizations solve their problems and achieve highly
satisfactory results.

In FY2021, we will further
expand our activities, while
extending the areas anddoubling the numbers ofschools and students to visit.

*Pro Bono:
The activities that ourbusiness skills andexperience are offered
free of charge to help
meet social challenges.

Best utilize our skills and experience tohelp the NPOs solve their problems

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100SEED◆Activities at the Regional offices
In Japan and overseas regional offices, we have been implementing 27 projects, in which 545 employees participated in FY2020.
Activities in China

Activities in Thailand

Activities in Turkey

Sumitomo Corporation Shanghai Head Office, Sumitomo
Corporation Tianjin Head Office, Sumitomo Corporation
Guangzhou Head Office, and Qingdao Office, ChangChun
Office have offered internship programs to local university
students at their respective locations since 2009. The purposeof the program is to nurture the next generation of humanresources who will lead the future by offering lectures by
employees, hands-on work experience, and opportunities tothink about future careers.
In 2021, due to COVID-19, the companies jointly held theevent online for the first time a total of 53 students from 10
schools participated in the online program. in a first for the
event, a speech competition was held by student
representatives. They made speeches about their own careerplans. They detailed plans made through an analysis of theirown characteristics, fields of specialization, and future job
market needs.

Educators at every level are facing various difficulties.
Sumitomo Corporation Thailand （SCTL）carries out
the following three activities that are designed to match
their needs with the necessary development tools toprovide sustainable education.
The Button-up project aims at primary school students
who need basic facilities to maintain a healthy body andmind at school. We arrange one-day Activity Based
Learning program to create equity and quality ofeducation for the children in underprivileged location.
The LIGHT UP project aims to train teachers who canutilize the skills they acquire to provide quality education
to young students.
The POWER UP project are designed for young people
to fill a wide gap between student life and working life
after graduating from their universities.

Sumitomo Corporation Turkey gives lessons which
introduce sustainability concept to children in
middle-school via its project called Mission Earth. It
was planned to be conducted face-to-face, but in
vain, since all the schools had been closed due to
COVID-19.
In collaboration with a local NPO, we offer online
classes to adapt pandemic. We support children
who do not have access to online classes by
donating smart tablets so that they can take online
classes.
In the trial class, which took place from April 2021,
a total of 48 students in 5 classes participated.
They were very eager to discuss the problems in
the world around them. Final target is to reach 156
students in Turkey and then expand the project into
other ME countries via regional offices.
Once the pandemic is under control, we willconsider switching to hybrid online and face-to-facelessons. Although meeting the children

The speakers then clarified the points
to improve regarding themselves andthe measures to be taken to actually
make the improvements to promote
understanding of this activity and the
HR system of a multinational
company.
Through this, we will continue todeliver sustainable quality education
for next generations.

© 2021 Sumitomo Corporation

To make these projects successful,
the SCTL 100SEED committee
invited their staff, together withmanagement, to participate as
volunteers in all activities.
With these three projects, we
expect over 100 members will joinhands to contribute to education
development on a yearly basis.

directly at theirschools has more
impact, we also feelthat we can reachfurther and wider with
online lessons.

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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 corporate ethics is in
Sumitomo’s Business Philosophy and Management Principles. The Sumitomo Corporation Corporate Governance Principles were established based on our view that theessence of corporate governance is “improving management efficiency” and “maintaining sound management”, as well as “ensuring management transparency” 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 improving 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 secured the effective
supervisory and monitoring function of management oversight byelecting independent Outside Directors and Outside Audit &Supervisory Board Members and by establishing the Nomination andRemuneration Advisory Committee, comprised mainly of independent
Outside Directors. We have also taken steps to make decisionmaking and execution of operations faster and more efficient byintroducing an executive officer system and establishing theManagement 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 Report© 2021 Sumitomo Corporation107

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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 inexperience, knowledge, expertise, gender, and so on. Persons with asincere 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 forinternal directors, and they are appointed without regard for gender,
nationality, and other such characteristics. Candidates for outside
directors must also have a sincere character, deep insight, and highlevel skills as well as broad-ranging knowledge and experience fromdiverse perspectives and an established track record in their field, andthey too are appointed without regard for gender, nationality, and soon. 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 varietyof perspectives by the Board of 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 the Company islisted, as well as our in-house rules on Standards for Appointment and Independence ofOutside Directors and Outside Audit & Supervisory Board Members. Leveraging a different
type of experience and expertise, each Outside Director contributes to our corporate
governance by providing a variety of independent viewpoints.

In addition, Sumitomo Corporation established the Sumitomo
Corporation Action Plan and, in agreement with the Japan Business
Federation’s goal of at least 30% female executives by 2030
announced in March 2021, we set a target of at least 30% female
Directors and Audit & Supervisory Board Members by FY2030.

© 2021 Sumitomo Corporation

Standards for Appointment and Independence of Outside Directors andOutside Audit & Supervisory Board Members (Japanese language only)

Improvement of Deliberations and Enhancement of Monitoring Functions by
the Board of Directors
We carefully select agenda items requiring discussion by the Board of Directors so that theBoard can concentrate on the deliberation of important matters regarding the Companywide
management such as the business policy and management plan. Each year, the Board of
Directors holds an off-site session to discuss which issues should be given higher priority,and the results are reflected in the selection of agenda items for the coming year. In
addition, the Board of Directors further enhances its monitoring functions regarding theexecution 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 on market 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.

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SystemDirectors and the Board of Directors

2. Evaluation Results Overview and correspondence

Evaluation of the Effectiveness of the Board of Directors

The overall evaluation and analysis by a third party concluded that the Board of Directors

To maintain and enhance the effectiveness of the Board of Directors, each year Directors andopinions were positive.

Audit & Supervisory Board Members engage in analysis and evaluation of the Board’s
effectiveness through self-evaluation and other methods. This is followed by the disclosure ofhas generally been functioning effectively. On the whole, as stated below, a majority offrom Fiscal 2019, adequate time was reserved for themes that require higher priority inoverviews of the results. In fiscal 2020, in order to boost initiatives to further enhance theeffectiveness of the Board of Directors, we conducted interviews by a third party in addition to
conducting a questionnaire survey (anonymous) as in fiscal 2019. The following is andeliberation.
the units but on strategies, challenges and policies to address them, and points have been

for Fiscal 2020, which was reported to and deliberated at the Board of Directors’ meeting held

narrowed down.

on May 7, 2021.

Those covered

In regular reporting to the Board of Directors by business units, as a result of continuous
improvements made thus far, deliberations centered not only on the financial performance ofoverview of the Board of Directors’ effectiveness evaluation and the results of such evaluation

1. Evaluation Methods

As a result of defining agenda items (agenda setting) based on the effectiveness evaluation



The Board of Directors were able to enter into deliberations immediately due to priorbriefings for Outside Directors and Audit & Supervisory Board Members on the Board
meeting’s agenda items. The focus of deliberations has been narrowed down, and this leads

All 11 Directors and 5 Audit & Supervisory Board Members

to a more constructive discussion and effective proceedings. Also, at offsite meetings which
Questionnaire survey (anonymous) and interviews conducted during the period from
Implementation method November 2020 to December 2020.
Note: Implemented by a third party (external consultant).

Evaluation Items

Evaluation process(i) Selection of items to be deliberated on by the Board of Directors(ii) Deliberations based on changes in the external environment and/or management
environment(iii) Adequate provision of information in advance to members of the Board of
Directors(iv) Consensus formation after adequate deliberation(v) Demonstration of roles of Outside Directors(vi) Demonstration of roles of the Chairperson(vii) Demonstration of roles of Directors (other than (v) and (vi))(viii) General evaluation, etc.
The results of analysis of the questionnaire survey and interview responses as
evaluated by a third party (external consultant) were reported to and deliberated at
the Board of Directors.

© 2021 Sumitomo Corporation

are set up apart from the Board of Directors, free and active discussion on important anddiverse management issues took place, supplementing the Board meetings efficiently.


The Chairman of the Board of Directors leads the proceedings in a way that encourages
attendees to speak while promoting adequate discussion in a fair and neutral manner. The
Board meeting is managed to help produce active discussion.

Efforts have been made in Fiscal 2020 to make deliberations more adequate regarding
progress review in mid-term management plan, business strategy and monitoring ofaddressing challenges in each business unit and human resources strategy, etc. Basedon the evaluation results, in Fiscal 2021 as well, it was confirmed to address making
deliberations further more adequate regarding important management strategy and policy
and progress review in new mid-term management plan (including strategy for allotmentof management resources and business portfolio and monitoring of efforts forsustainability management) to further improve the effectiveness of the Board of Directors.

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Corporate governance
SystemDirectors and the Board of Directors

Management Council

Establishment of the Nomination and Remuneration Advisory
Committee

The highest executive level decision-making body

The Nomination and Remuneration Advisory Committee, of which a majority ofmembers 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 and Chief
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 Board of
Directors. In FY2020, the Nomination and Remuneration Advisory Committee
met 11 times to deliberate the abovementioned matters, and submitted theresults thereof as recommendations to the Board of Directors.

The Management Council is the highest executive level decision-making body,with the aim of enabling decisions that take into account diverse opinions andmultifaceted discussions in regard to specific key matters related to
management, within the scope of the 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, in regard tospecific 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 theCompany Investment Committee, the Corporate Strategy Promotion Committee,
the Internal Control Committee, the Compliance Committee, and the Corporate
Sustainability Committee.

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 personsOutsideDirector© 2021 Sumitomo Corporation

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Corporate governance
SystemAudit & Supervisory Board Members and the Audit & Supervisory Board
Enhancement of auditing capabilities

Collaboration between the Internal Auditing Department andaccounting auditors

The Audit & Supervisory Board comprises five members—two Inside Fulltime Audit & Supervisory
Board Members and three Outside Audit & Supervisory Board Members (including one woman). The
Inside Audit & Supervisory Board Members must have a sincere character, deep insight, and high-levelskills as well as specialized business knowledge and a broad range of experience, and they areappointed without regard for gender, nationality, and other such characteristics. The Outside Audit &Supervisory Board Members must also have a sincere character, deep insight, and high-level skills aswell as advanced specialized knowledge, particularly in fields such as law, accounting, or corporate
management, and extensive experience, and they too are appointed without regard for gender,
nationality, and so on. Among the Outside Audit & Supervisory Board Member, one is a legal expert (aformer Chief Justice of the Osaka High Court), one is a certified public accountant with considerable
knowledge of finance and accounting, and the other is a fulltime Audit & Supervisory Board Member ofa listed company and has an experience in business management. All of the Outside Audit &Supervisory Board Members satisfy the criteria on independence set by the Tokyo Stock Exchange, etc.
as well as the Standard for Independence established by Sumitomo Corporation.

To ensure audit efficiency, Audit & Supervisory Board Members interact closely with theInternal Auditing Department, receiving reports on internal audit plans and their results in atimely manner. In addition, Audit & Supervisory Board Members exchange information withand monitor the auditing activities of the accounting auditors through regular meetings. By
attending audit review meetings and observing inventory audits by the accounting auditors,
the Audit & Supervisory Board Members constantly work to improve audit efficiency andquality.

Ensuring audit effectivenessOn taking office, Outside Directors and Outside Audit & Supervisory Board Members havethe opportunity to receive a briefing on 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 andAudit & Supervisory Board Members to acquire the necessary knowledge and update it asappropriate, we additionally supply books and other materials and provide access to otherresources 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 andAudit & Supervisory Board Members, in principle, visit a Sumitomo-related facility during
the first fiscal year of their term of office. Outside Directors and Audit & Supervisory Board
Members are also given the opportunity to make a group companies observation visit to afacility in Japan and to an overseas. Overseas group companies observation visits weresuspended in FY2020 in light of the status of the spread of COVID-19.

Each Audit & Supervisory Board Member attended important meetings such as the Board of Directors
Meeting, received reports form Directors and employees, etc. regarding the execution of their duties,
asked them for explanations as necessary, inspected important internal authorization documents andexamined the status of operations and the financial status regarding the head office and important
operating locations. As for subsidiaries, each Audit & Supervisory Board Member promoted
communication and exchange of information with Directors and Audit & Supervisory Board Members,
etc. of subsidiaries, and receives reports on the subsidiaries’ business as necessary.
The Audit & Supervisory Board Members' Administration Department (four employees) was established
as a specialized organization to support the work of the Audit & Supervisory Board Members. The Audit& Supervisory Board Members participate in personnel evaluations and transfers and so on regardingthese employees to ensure their independence from the Board of Directors.

© 2021 Sumitomo Corporation

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

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Corporate governance
SystemThe knowledge, experience and competencies, etc. (collectively, “Skills”) that the Board of Directors is required to possess, and Skills that Directors or Audit& Supervisory Board Members currently in office possess（as of April 2022）
This table identifies the types of knowledge, experience and competencies, etc. (individually, "Skill" and collectively, “Skills”) that the Board of Directors is required to possess for fulfilling its
roles, and indicates which Directors or Audit & Supervisory Board Members currently in office possess such Skills. In our view, it is important that the Board of Directors as a whole possesses
these Skills. As for the reasons for identifying these Skills, please refer to the explanations in the next page.

Directors
Name

Role

Term ofoffice as
Director

Kuniharu Nakamura

Director, Chairman

Masayuki Hyodo

Knowledge, experience and competencies, etc.（Skills）
Corporate
management

Investment/M&A

ICT/DX/Technology

ESG/Sustainability

Finance/Accounting

Legal/Riskmanagement

HR management& development

12 years

●

●

ー

●

●

●

●

Representative Director, President
and Chief Executive Officer

3 years

●

●

ー

●

●

●

●

Toshikazu Nambu

Representative Director,
Executive Vice President

2 years

●

●

●

ー

●

ー

●

Hideki Yamano

Director,
Senior Managing Executive Officer

3 years

●

●

●

●

ー

ー

ー

Takayuki Seishima

Representative Director,
Senior Managing Executive Officer

2 years

●

ー

ー

ー

●

●

●

Masaru Shiomi

Director,
Managing Executive Officer

1 year

●

ー

ー

ー

●

●

ー

Nobuyoshi Ehara

Outside Director

5 years

●

●

ー

●

●

ー

ー

Koji Ishida

Outside Director

4 years

●

●

ー

ー

●

●

ー

Kimie Iwata

Outside Director

3 years

●

ー

ー

●

ー

ー

●

Hisashi Yamazaki

Outside Director

3 years

ー

ー

ー

ー

ー

●

●

Akiko Ide

Outside Director

1 year

●

ー

●

●

ー

ー

ー

© 2021 Sumitomo Corporation

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Corporate governance
SystemAudit & Supervisory Board Members

Name

Role

Term ofoffice as
Audit &
Supervisory
Board
MemberMichihiko Hosono

Senior Audit & Supervisory Board
Member (Full-Time)

Toshiaki Murai

Knowledge, experience and competencies, etc.（Skills）
Corporate
management

Investment/M&A

ICT/DX/Technology

ESG/Sustainability

Finance/Accounting

Legal/Riskmanagement

HR management& development

2 years

●

ー

ー

ー

ー

●

ー

Audit & Supervisory Board Member(Full-Time)

3 years

●

●

ー

●

ー

ー

ー

Toshio Nagai

Outside Audit & Supervisory Board
Member

5 years

ー

ー

ー

ー

ー

●

ー

Yoshitaka Kato

Outside Audit & Supervisory Board
Member

5 years

●

ー

ー

ー

●

ー

ー

Yukiko Nagashima

Outside Audit & Supervisory Board
MemberNewly
appointed

●

●

ー

ー

ー

ー

●

About the tables on this page and the previous page
1.

This table identifies the types of knowledge, experience and competencies, etc. (individually, "Skill" and collectively, “Skills”) that the Board of Directors is required to possess for fulfilling its roles, and indicates which
Directors or Audit & Supervisory Board Members currently in office possess such Skills. In our view, it is important that the Board of Directors as a whole possesses these Skills.

2.

Since the Company is active in investing in various businesses, we consider “Corporate management” and “Investment/M&A” Skills to be particularly important. Under the ongoing medium-term management plan,“SHIFT 2023,” we are promoting a business portfolio shift with a focus on digital transformation (DX) and the enhancement of sustainability management as two sweeping trends. To this end, we emphasize the Skillof “ICT/DX/Technology” for business reforms or business development through exploiting digital solutions or the mixture of technology and innovation solutions and the Skill of “ESG/Sustainability” for sophisticating
sustainability management. In addition, the Skills of “Finance/Accounting,” “Legal/Risk management” and “HR management and development” are important for supporting or administering the Company’s business
operations.

3.

The key Skills for Audit & Supervisory Board Members on which a high priority is placed are "Corporate management", "Finance/Accounting", and "Legal/Risk management", since they are responsible for auditing
Directors’ execution of duties.

4.

Since the Company carries out business transactions and investments all over the world, respective Directors or Audit & Supervisory Board Members are required to have a keen insight from a global perspective.
Knowledge concerning “governance” is another indispensable skill for serving as a Director or Audit & Supervisory Board Member. Because we mandate that all Directors and Audit & Supervisory Board Members
possess such two skills, they are not included in seven Skills that are indicated in the table and selected in paragraph 2 above.

5.

The Skills that the Board of Directors are required to possess may vary according to business strategies or changes in the external environment. This table will be updated from time to time based on the Board of
Directors’ review and discussions on required Skills.

Please refer to our website for the reasons for appointing and summary of expected roles of Outside Directors© 2021 Sumitomo Corporation

Directors and the Board of Directors

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Corporate governance
SystemInitiatives to Ensure Transparency of Business Management

As of June 2021, the Company complies all Principles of the Corporate Governance Code(Before

Establishment of Disclosure Policy
To ensure thatallstakeholders

Status of Compliance with the Japan's Corporate Governance Coderevision in the same month). Please refer to Corporate Governance Report for details.

correctly understand its

businessmanagement policy and business activities, the Company not only discloses
statutorily required information but also actively discloses information on a

Corporate Governance Report

Policy on Cross-shareholdings and Standards for Exercising Voting Rights

their voting rights via internet (including through the Electronic Voting

The Company takes various considerations into account when making decisions about whether to holdshares in other listed companies for purposes other than pure investment. It fully considers issues
such as whether 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 theperspective of investment profit, such as a comparison with the capital cost of individual stocks. Basedon the above, the Company 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 a policy of reducing the holding. The Company also takes various
considerations into account under the internal guidelines when making decisions in exercising its
voting rights. Having fully considered issues from both quantitative and qualitative standpoints, it
adequately exercises voting rights for each agenda based on whether exercising voting rights will leadto enhanced medium- to long-term corporate value at the investee company and the Company and toenhanced value for its own shareholders. When a company holding the Company’s stock for purposes
other than pure investment indicates to dispose of its holdings, the Company respects the decision inprinciple and ensures that their business relationship will not be influenced. In FY2020, under a crisis
response mode, sale of shares in crossholdings companies was actively implemented companywide
as a means of generating cash through a reduction of assets to more strictly manage companywide
cash flows.

Platform for institutional investors operated by Investor Communication

Benefit Pension Plans

voluntary basis.
Corporate Disclosure Policy

Measures Relating
Shareholders

to

the

GeneralMeetingof

We send out a Notice of Convocation to shareholders approximately three
weeks prior to each regularly scheduled General Meeting of Shareholders.
We also provide an English-language translation of the notice on our
website in advance of sending a Notice of Convocation. We allow
shareholders and investors sufficient time to thoroughly examine thepropositions to be resolved at the Meeting by enabling them to exercise

Japan, Inc. [ICJ]). In addition, we stream the General Meeting of
Shareholders live for shareholders on internet. The streaming video of themeeting is posted on our website for a certain period after the close of themeeting.
Ordinary General Meeting of Shareholders© 2021 Sumitomo Corporation

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 andmonitors the operations 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 to periodically 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 performance and the financial position of pension assets, makes
reports to the Management Council and also discloses them to the pension holders.

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Corporate governance
SystemExecutive Remuneration
Executive remuneration plan (● indicates the persons eligible foreach type of remuneration, etc.)

Remuneration standards and remuneration composition ratios of
Executive Directors and Executive Officers•

The Company has established appropriate remuneration standards and remuneration
composition ratios based on its business environment, management strategy and humanresources strategy, with reference to objective 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 that when consolidated
net income and basic profit cash flow are 200 billion yen and the stock growth rate3 reaches
100%, monthly remuneration, performance-linked bonus and stock-based remuneration are as
follows.

Eligibility
Executive
Directors /Executive Officers(*1)

Chairman of
the Board of
Directors(*2)

OutsideDirectors(*3)

Audit &
Supervisory
Board
Members(*4)

Monthly
Remuneration

●

●

●

●

PerformanceLinked Bonus

●

－

－

－

Restricted
Performance
Share UnitBasedRemuneration

●

●

－

－

Type of remuneration,
etc.

Fixed

Varia
ble

CEO: 40: 35: 25
Other Executive Directors: 47.5: 32.5: 20
Potential scenarios of CEO’ remuneration corresponding to various given levels of businessperformance are illustrated below.

(*1) The remuneration of Executive Directors and Executive Officers consists of “monthly
remuneration,” “performance-linked bonus”, and “Restricted Performance Share Unit-based
remuneration.”(*2) The remuneration of the Chairman of the Board of Directors, whose main role is management
supervision as stipulated in the “Sumitomo Corporation Corporate Governance Principles,” consists of“Restricted Performance Share Unit-based remuneration,” which contribute to improving shareholder
value, in addition to “monthly remuneration.”(*3) The remuneration of Outside Directors, who are in a position to supervise management with a highdegree of objectivity and independence, consists solely of fixed remuneration (“monthly remuneration”)
and is provided on a monthly basis.
(*4) The remuneration of Audit & Supervisory Board Members, who are in a position to audit andsupervise management with a high degree of objectivity and independence, consists solely of fixed
remuneration (“monthly remuneration”) and is provided on a monthly basis. The remuneration of each
Audit & Supervisory Board Member is decided through discussions between the Members within the
maximum amount approved by shareholder resolutions.
© 2021 Sumitomo Corporation*”Stock growth rate”＝｛（Average price of Company’s common shares in the month of termination of Evaluation Period + Total amount ofdividends during Evaluation Period ） ÷ （ Average price of Company’s common shares in the month ofcommencement of Evaluation Period）｝
÷｛（Average of TOPIX in the month of termination of Evaluation Period) ÷（Average of TOPIX in the month ofcommencement of Evaluation period）｝

Remuneration System for Executive

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Internal control
Policy and Concept
In order to realize sustainable growthand development for the Sumitomo
Corporation Group by enhancing theoperational quality of each of theGroup companies, we stipulate basic
regulations
for internal control,develop and conduct appropriate
internal control, and access theeffectiveness and take action to
improve it.
To rationally ensure compliance withlaws and regulations throughout theentire Group in relation to businessactivities, safeguarding assets against
loss, effectiveness and efficiency ofoperations, and reliability of financial
reporting, initiatives are being taken to
improve group governance.

© 2021 Sumitomo Corporation

SystemEstablishment of Group Management Policy
Our approach to group management is to respect Jiritsu(*) management of each group company, to contribute to important decision-making at Boardand other meetings through active dialogue based on relationships of trust as a shareholder, and to create new value through collaboration amonggroup companies including Sumitomo Corporation. For the purpose of sharing and implementing this approach within the group, we established theGroup Management Policy (GMP) and have set Jiritsu, dialogue, and collaboration as the three principles of group management. In addition, we aim
to achieve sustainable growth of the Company and each group company and to maximize the corporate value of the entire Sumitomo Corporation
Group by sharing and putting into practice the values set out in the Sumitomo Corporation Group’s Corporate Mission Statement and GMP groupwide.
(*) Jiritsu is the Japanese term. In GMP, we define it to mean “following the rules necessary for the management of a Sumitomo Corporation Group company,
such as the Sumitomo Corporation Group’s management principles, strategies, and policies, to discipline oneself, to think, make decisions, act for oneself inorder to achieve goals, and to be accountable to stakeholders.”

Conducting internal audits on a regular basis
The Internal Auditing Department, which reports directly to the President and Chief Executive Officer, is an independent organization that monitors
the operations of the Group, and audits organizations and operating companies of the Group. As well as reporting the outcome of internal audits
directly to the President and Chief Executive Officer, in principle on a monthly basis, periodic reports are also made to the Board of Directors and the
Audit & Supervisory Board. The department conducts audits periodically on all aspects of internal control, comprising asset and risk management,compliance and business operations. Also, by comprehensively examining and identifying the risks inherent in the organization being audited, it
provides suitable recommendations based on an evaluation of the effectiveness and adequacy of the internal controls of the organization, thus it
expedites improvement and maintenance on auditees’ own initiative. The department will continue contributing to the improvement of internal control
at the Sumitomo Corporation Group based on the Group Management Policy.

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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 trust

Aiming for more agile responses to compliance issues which arise in the Group,of society by practicing the Activity Guideline that states “to comply with laws

Sumitomo Corporation appoints a Chief Compliance Officer (CCO), who has

and regulations while maintaining the highest ethical standards.”

ultimate responsibility for compliance. Further, the Compliance Committee, which

Accordingly, we follow our principles of “Giving First Priority to Compliance,”plans compliance measures, includes the general managers not only of thewhich means compliance takes priority over all activities of the Group and that

Corporate Group but also of the business divisions, enabling it to examine such

we must never violate compliance as a result of giving priority to the pursuit ofmeasures in a multifaceted way that reflects our actual business operations.

profit, and “Reporting Compliance Issues Immediately” or “Immediate Report,”

Our Group will continuously aim to establish and improve the internal systems

which means, in the event of a compliance problem, employees must report thethat realize our principle of “Giving First Priority to Compliance.”

situation without delay to their line manager or to the relevant department of the
Corporate Group.

Compliance Management System

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 the aimof spreading and ensuring the adoption of the policy throughout the group. 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© 2021 Sumitomo Corporation

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Compliance
SystemActivities

Continuous Improvement of the Speak-Up System

Appropriate Responses to Compliance Violations and Preventive Measures

Our internal rules stipulate that any issues or potential issues in relation to compliancemust be reported immediately to their line manager or to the relevant department of the
Corporate Group (Immediate Report). Such issues include not only the violation of
antitrust/competition laws or anti-bribery/corruption laws but also workplace misconduct,
falsification of accounts, or harassment. If reporting through the usual reporting line isdifficult for some reason, we maintain a “Speak-Up System” available to officers andemployees to report the issue to the Chief Compliance Officer through an internal orexternal hotline. Under the System, we provide option to communicate anonymously, andthe fact and details of the report are maintained in the strictest confidence, and it isensured that the whistle-blower is not subject to disadvantageous treatment for making
the report. Efforts to encourage the use of the System include seminars for officers andemployees as well as internal notice
and internal Q&A support, which aredesigned to spread the informationon the System throughout thecompany. Additionally, “Speak-Up
Cards” with an overview of the
System as well as the contact
details for the hotline are distributed
to all officers and employees, andposters are put up on all floors of ouroffice to promote the use of the
System.

In 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 the facts and clarify the causes of the incident, including the appointment of
external specialists when necessary. Based on the outcome, we take corrective measures,
disciplinary action, and preventive measures. The Compliance Committee Secretariat keeps recordsof the details and number of cases occurring in the Group, and other information such as measurestaken to prevent recurrence. These are evaluated and used to plan future compliance measures.
The results are deliberated at meetings of the Compliance Committee, and reports are madeperiodically to the Management Council and the Board of Directors. Through this process of
repeatedly improving and enhancing such measures, we strive to further encourage thoroughcompliance throughout the Group.

Structure of the Speak-Up System

Launch of the SC Global Speak-Up System
The group-based Speak-Up system, which enables officers and employees of groupcompanies both in and outside Japan to report compliance-related issues, has also
been developed and launched.

© 2021 Sumitomo Corporation

Continuous Education Program Initiatives through Compliance Training, etc.
The Compliance Manual, which explains particularly important issues, such as anti-bribery/corruption,compliance with laws concerning antitrust and fair competition and security trade control, iscommunicated to all officers and employees of Sumitomo Corporation.
Both in Japan and overseas, we implement various education programs in order to further
understand and disseminate the “Sumitomo Corporation Group Compliance Policy” and theCompliance Manual for each class of employee, such as newcomers, newly appointed generalmanagers, and newly appointed corporate officers, as well as provide e-learning programs on thesubject matter of the situation at the time for all employees (including seconded employees andthose who working overseas). We regularly confirm the employees’ understanding of Group’s
Activity Guidelines, which is “to comply with laws and regulations while maintaining the highest
ethical standards” by obtaining an annual written pledge from all employees to ensure compliance. In
addition to these regular activities, we hold seminars and training sessions on individual topics suchas anti-bribery/corruption, compliance with the subcontract act and antitrust laws, security tradecontrol, prevention of insider trading, and elimination of harassment on an ongoing basis as required.
Besides, compliance training and detailed awareness-raising activities are conducted in eachbusiness unit and domestic/overseas offices under the supervision of compliance leaders according
to the characteristics of each business unit and region. We also implemented a variety of support
measures to reinforce compliance systems at Group companies including communication of elearning content on Sumitomo Corporation Group Compliance Policy to Group companies.

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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 toprevent all forms of corruption. Specifically, we have established the Rules for Preventionof Bribery of Public Officials, which regulate the provision of entertainment, gifts, invitations,and donations to domestic and foreign public officials as well as the selection of service
providers (such as agents, consultants or other business intermediaries), and conduct
required internal review. In addition, taking into account revisions to the laws andregulations of each country, and advice 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 and implement asystem that takes into account the bribery risk level of each company, 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, whichsummarizes the Group’s principles and policies in this regard. This Policy includes thefollowing statement. “The Sumitomo Corporation Group will not commit bribery or conduct
any activity raising the suspicion of bribing Japanese government or other public officials;
and will as a principle prohibit its officers and employees from providing such officials withentertainment, gifts, or the equivalent. It will not make any offer, payment, promise to pay,or authorize the payment of any money or anything of value to any foreign government orother public official, for the purpose of influencing any act or decision of such official inorder 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 ouranti-bribery system and our initiatives for the prevention of bribery to our business partners
including service providers, and request their understanding and cooperation.

© 2021 Sumitomo Corporation

Measures for Ensuring Compliance with Laws Concerning Antitrustand Fair Competition
We stipulate fair competition in the Sumitomo Corporation Group Compliance Policy andour policy for compliance with laws concerning antitrust in the Compliance Manual. We
have also published a separate manual concerning antitrust/competition laws for ourofficers 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 international frameworks related tointernational trade, as well as Japanese laws and regulations related to trading activities.
Our group companies do likewise. We implement various measures related to security
trade control to prevent weapons or products and technology for civilian use that could be
converted to military use from falling into the hands of states or non-state organizations(terrorists) which may develop weapons of mass destruction. We also provide internal rules,
manuals, and guidelines, hold training sessions, and instruct and monitor as needed toensure compliance with regulations related to tariffs and customs 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 wellas internal rules, we also continuously provide internal training courses and other activities
to raise awareness. In 2021, we held an internal training program for officers andemployees of our company to remind the importance of appropriately managing insider
information at each organization.

119Sustainability of
Sumitomo
Corporation GroupFeatureEnvironment

SocialESG Quantitative
Data

Governance

Third-party
Assessment

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 business activities havea variety of impacts on the global environment and on different stakeholders such as
local communities, business partners, and our officers and employees. To achievesustainable growth together with society, we work to control the social andVariety of sources leading to social and environmental risks• Climate change • Biodiversity• Pollution • Resource depletion• Local residents’ human rights •Employees’ human rights (Health and safety, Forcedlabor, Child labor, Discrimination)

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 athreat to people’s lives or the global environment and does not constrict thesustainability of our management.
As the basis for these initiatives, we have established Environmental Policy, Human
Rights Policy and CSR Action Guidelines for Supply Chain Management to clarify ourapproach to social and environmental issues in the Group’s business operation.
Because the impact of each business on society and the environment and the natureof 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 beadapted 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 the associated risks.

Companywide policies• Environmental Policy• Human Rights Policy• C S R Action Guidelines for Supply Chain Management

Risk management in line with business attributes
and conditions• Recognition of risks faced• Communication with relevant stakeholders• Ascertainment of facts• Response based on legal compliance and alignment withinternational standards

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 legally compliant across the range of socialand environmental issues but also that its response in the area complies withinternational standards on the environment and human rights.

Business units

Appropriate risk management

Within the Sumitomo Corporation Group and its diverse range of businesses, theresponsible business department of individual businesses and the related corporate
departments are working jointly to raise the standard of social and environmental risk
management groupwide, utilizing the knowledge of outside experts.

© 2021 Sumitomo Corporation

Corporate group

Support in specialized areas

External consultants
Provision of expertise120

Sustainability of
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Corporation GroupFeatureEnvironment

SocialGovernance

ESG Quantitative
Data

Third-party
Assessment

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 an environmental
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 soundbasis and that the business activities are not seriously impacting the global environment or local communities, employees, and other stakeholders. In April 2020, in orderto enhance the effectiveness of risk management for each business, taking into account the nature of the business and the characteristics of the region where it operates,
we established a system that considers social and environmental impacts when making decision on a new investment, by utilizing an assessment sheet for social andenvironmental 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 characteristics of the business.
When issues are pointed out by local residents,
nongovernmental organizations (NGOs), or otherstakeholders regarding the impact of theSumitomo Corporation Group’s business activities,
we ascertain the facts and respond by planningand 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 inindividual cases is referred for further discussion
and reported to the Management Council and theBoard of Directors through the related committees.
Under the oversight of the Board of Directors, wework to address social and environmental risks
and strengthen our risk management system.

© 2021 Sumitomo Corporation

121

Sustainability of
Sumitomo
Corporation GroupFeatureEnvironment

SocialESG Quantitative
Data

Governance

Third-party
Assessment

Information security
Policy and Concept

SystemThe Company acknowledges the importance of ensuring information

The information managers in each organization categorize information assets based on their importance,

security, and maintains appropriate measures

give instructions for procedures and methods in order to handle these assets adequately, and work to ensure

including, but notlimited to, the establishment and maintenance of relevant rules,

information security, efficient information-related administrative procedures, and information sharing. For

primarily through IT Strategy Committee, which is chaired by the

personal information, in addition to establishing a Privacy Policy to protect this as appropriate, we have put in

Chief Information Officer (CIO). In October 2017, a new Information

place relevant rules and organizational structures.

Security Policy was established.

We also work on initiatives to minimize risk related to unexpected situations involving information security,

Information Security Policy
1. Recognition of Information Security

Sumitomo Corporation acknowledges the importance of ensuring
information security, and wishes to further enhance the company's
trustworthiness in its business operations. Therefore, Sumitomo
Corporation shall implement appropriate measures including, but notlimited to, the establishment and maintenance of relevant rules andguidelines so as to responsibly manage information assets on aconsolidated basis globally and shall review them regularly.

2. Compliance

Sumitomo Corporation shall comply with any applicable local, regional,
national and international laws and regulations in relation to information
security.

3. Management of Information Assets

Sumitomo Corporation shall preserve confidentiality, integrity andavailability through responsibly managing all information assets including
personal data, and shall take all reasonable precautions in order to prevent
unapproved disclosure, loss or impairment of such data.

4. Response to Information Security Incidents

Whilst making the utmost endeavor to prevent information security
incidents from occurring, in the unlikely event such an incident should
occur, Sumitomo Corporation shall respond promptly to the incident andimplement whatever preventive measures are necessary to avoid
recurrence.

5. Awareness Education of Information Security

Sumitomo Corporation shall regularly promote and maintain the provisionof information security education including, but not limited to, further
heightening the awareness of the importance of responsibly managing
information assets.
© 2021 Sumitomo Corporationsuch as external attacks aimed at theft or destruction of corporate information. As well as using systembased safeguards, we conduct ongoing training and drills for employees while establishing and monitoring
systems at major subsidiaries and other group entities. The Company also coordinates with specialized thirdparty organizations to stay up-to-date on relevant information and to enable swift and appropriate responses.
IT Strategy Committee(Information Security-related)
Information security-related initiatives

President and Chief
Executive Officer

 Planning, drafting, and implementation of
measures Researching and responding to
information leaks, etc.

Chief Information Officer（CIO）（Chief Strategy Officer）

Chairperson：CIO
Vice chairperson：CDO
Members：
CAO, Assistant CAO (General Affairs & Legal),
General managers ofCorporate Planning & Coordination Dept.,
Corporate Communication Dept.,
IT Governance & Administration Dept.,
Global Human Resources Management Dept.,
Corporate Legal & General Affairs Dept.,
Legal Compliance Dept.,
Financial Planning & Coordination Dept.,
Accounting Controlling Dept., Treasury Services Dept.,
Digital Business Division, Digital Business Planning Dept.,
Planning & Coordination Dept., two business Unit
Secretariat：
IT Governance & Administration Dept.,
Information Technologies Planning & Promotion Dept.

Corporate
group

Business units

Domestic
offices

Overseas
offices

Information managers
 Responsible for overseeing information management for organization
 Tasked with swift response measures in the event of an occurrence(or the threat of an occurrence) of unpredicted information security
incidents

Report incidents regarding confidential information leaks, etc., andrespond to those incidents

Privacy policy

122Sustainability of
Sumitomo
Corporation GroupFeatureEnvironment

SocialESG Quantitative
Data

Governance

Third-party
Assessment

Stakeholder engagement
Relationships with Stakeholders

IR / SR Activities

The Sumitomo Corporation Group places importance on dialogue with various stakeholders
around us. To build a relationship of trust with each stakeholder, we proactively provide
information on our activities and ensure continuous communication with them. Throughthese efforts, the Group keeps informed of stakeholders' expectations and concerns, basedon which we will promote our sustainability and improve our long-term value.

We facilitate direct communication with shareholders and other investors, in addition to enhancing
disclosure on our website. During the COVID-19 pandemic, which started in 2020, we have also
been utilizing online tools to maintain dialogue with our shareholders and investors. An executive
officer with responsibility 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 nonfinancial
information, and strengthening relationships of trust with shareholders and investors by displaying
initiatives to increase the corporate value of the Sumitomo Corporation Group over the medium- tolong-term.

Shareholder/investors

Financial
institutions

Government
agencies/ economic
organizations

Local
communities

Sumitomo
Corporation
Group

NGO・NPOBusiness
partners

Customers/
consumers

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 forshareholders, website, reporting to credit rating agencies, etc.

Government
agencies/economic
organizations

Communication with government agencies and international organizations inJapan and abroad, participation in discussion meetings and round-tableconferences with government offices, activities through business and industrial
associations, etc.

Local communities

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

Japan

Business partners
Customers/consumers

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

100

NGOs/NPOs

Cooperation and communication with NGOs and NPOs in business activities,
cooperation in social contribution activities, responses to surveys, etc.

Employees

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

© 2021 Sumitomo Corporation（IR: Investor Relations SR: Shareholder Relations）

Notes: 1. IR events in Japan and SR talks in Japan and overseas are held throughout the year.
2. Meetings for individual investors are all held online.

Number of individual meetings with institutional investors in FY2020
Overseas
EuropeAsia & Oceania

The Americas

Total

30

41

12

83

Meeting for individual investors in FY2020
Number of Meetings (held online)

Number of Participants

4 times

3,804

123

Sustainability of
Sumitomo
Corporation GroupFeatureEnvironment

SocialGovernance

Scope (*1)

Unit

ESG Quantitative
Data

Third-party
Assessment

ESG quantitative data
Environment (Climate change)
Item
GHG Emissions (Scope1, 2) (*2)

Non-consolidated(Components) Scope1<Energy-related CO2>
Scope1<other GHGs>

Consolidated

t-CO2eScope2
Intensity（per 1㎡）

GHG Emissions (Scope3) (*3)

Non-consolidated (in Japan)

t-CO2e/㎡

Logistics
Waste
Overseas Business Trips（*2）

t-CO2eFY2018FY2019FY2020

4,926

4,148

3,233

2,667

1,686,654

1,569,759

1,474,885

2,179,335

934,276

939,346

791,730

1,522,514

-

0

0

4,210

752,378

630,412683,156

652,611

0.062

0.06

0.051

0.043

7,803

5,216

5,501

3,875

6

6

15

5

28,56930,232

22,400

67

709

636

609

140

Downstream Leased Assets

36,89435,23033,66230,294

Total

73,98071,32062,18734,381

Commuting（*1）

Non-consolidated (in Japan)

FY2017The boundary of “Consolidated” is non-consolidated, consolidated subsidiaries and Joint operations. We have added Joint operations to the boundary from FY2020. For Joint operations, the amount equivalent to the investment ratio as of the end of March of the reporting period is included in theenvironmental data. One site of the Joint operations is excluded from the scope of FY2020 because its data collection system is not in place yet.
* CO2 emission factors for electricity:(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) 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.
* Group companies emitting more than 3,000 t-CO2e for each gas per year are subject to the aggregation of Scope1<other GHGs (Non energy-related CO2 and greenhouse gases other than CO2)>, under the Greenhouse Gas Emissions Accounting, Reporting, and Disclosure System in Japan.
In FY2018 and FY2019, we aggregated non-consolidated and consolidated subsidiaries in Japan and the scope of Scope1<other GHGs> was expanded to consolidated (excluding Joint operations) in FY2020.

（*3）* Scope1 <other GHGs> 4,210 t-CO2e in FY2020 was derived from Dinitrogen monoxide (N2O).
* The main reason for the increase of GHG emissions in FY2020 compared to FY2019 is the addition of Joint operations to the boundary of data.
* The CO2 emissions from Joint operation in the power generation business are included in the FY2019 results, which is the base year of Sumitomo Corporation Group's carbon neutrality, and FY2020 results in this book -Our Climate Change Initiatives-. The scope of Sumitomo Corporation Group’s
carbon neutrality includes the following
in addition to the GHG emissions above;
Scope1,2: Direct CO2 emissions from Sumitomo Corporation's affiliated companies under the equity method for power generation businesses, as well as indirect CO2 emissions from the generation of energy used by those companies.
Scope3 : Indirect CO2 emissions associated with the use of energy resources produced by fossil energy concession of Sumitomo Corporation Group, its subsidiaries, and affiliated companies under the equity method.
Please see this book -Our Climate Change Initiatives- for details of the Sumitomo Corporation Group carbon neutral.
* We couldn't collect the environmental data for 38 sites due to COVID-19 lockdown or working from home in FY2019. In FY2018, GHG emissions of these sites were equivalent to about 5.2% of the total GHG emissions.
* GHG 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.
Sumitomo Corporation complies with the Act and reduces the use of energy of transportation through promotion of modal shift (utilization of railroads and vessels), optimization of delivery routes and loading on vehicles, promotion of eco-driving, etc. We have set a target of reducing the use of energy
from logistics per shipping weight by at least 1% annually in Japan.
* GHG emissions from waste are calculated from all general waste of Sumitomo Corporation.
Up to FY2018, emissions were calculated using emission intensity for incineration treatment published by the Carbon Footprint Communication Program. The results after FY2019 were calculated using the emission intensity for each type of waste, which is published in the emission intensity databasefor calculating greenhouse gas emissions and other emissions by organizations throughout the supply chain. The calculation of GHG emissions for FY2020 uses the emission intensity database Ver.3.1.
* GHG emissions due to overseas business trips are the emissions from flights departing from and arriving in Japan that Sumitomo Corporation employees took. Business trip destinations are classified into 12 areas and passenger-kilometers are estimated based on the travel distance between Japan andrepresentative airport of each area. GHG emissions due to overseas business trips are calculated by applying CO2 emission factors published by the UK's Defra to the passenger-kilometers.
* GHG emissions from commuting are those from the commuting of Sumitomo Corporation's employees working in Japan, calculated by using the emissions factors per passenger-kilometer for passenger transport by transport mode published in the Ministry of Land, Infrastructure, Transport and Tourism
publication "CO2 Emissions in the Transport Sector."* GHG emissions from downstream leased assets are those from the buildings that Sumitomo Corporation owns and leases to tenants, using by CO2 emission factors described in the Act on the Rational Use of Energy in Japan.
* GHG emissions (the above Scope1, 2 and Scope3) were 1,641,079t-CO2e／1,537,072t-CO2e／2,213,716t-CO2e in FY2018, FY2019, and FY2020 respectively.

© 2021 Sumitomo Corporation

124

Sustainability of
Sumitomo
Corporation GroupFeatureEnvironment

SocialGovernance

ESG Quantitative
Data

Third-party
Assessment

ESG quantitative data
Environment (Climate change)
Item

Scope（*1）
Non-consolidated

Energy Consumption（*2）

Consolidated
Intensity (per ㎡)

Consolidated
Intensity (per ㎡)

（*1）
（*2）

（*3）

Non-consolidated (in Japan)
Non-consolidated

Electricity Consumption（*3）

Non-consolidated (in Japan)

Unit
GJ

FY2017FY2019FY202049,904

42,63538,06718,097,583

17,748,255

17,062,311

29,574,235

GJ/㎡
MWh

FY201848,472
0.611

0.761

0.720

0.654

7,536

5,773

4,526

3,521

1,535,347

1,412,661

1,534,809

1,525,641

0.098

0.082

0.070

0.055

MWh/㎡

The boundary of “Consolidated” is non-consolidated, consolidated subsidiaries and Joint operations. We have added Joint operations to the boundary from FY2020. For Joint operations, the amount equivalent to the investment ratio as of the end of March of the reporting period is
included in the environmental data. One site of the Joint operations is excluded from the scope of FY2020 because its data collection system is not in place yet.
* Energy conversion factor from electricity consumption: 3.6 (MJ/kWh)。
* Energy conversion factors from other than electricity consumption are based on the Act on the Rational Use of Energy in Japan.
* The main reason for the increase of energy consumption in FY2020 compared to FY2019 is the addition of Joint operations to the boundary of data.
* 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.
* The amount of electricity consumption which generated from renewable energy was 77,852MWh in FY2020.
* Consolidated electricity consumption includes the electricity purchased from power generation companies within the boundary of environmental data.
* We couldn't collect the environmental data for 38 sites due to COVID-19 lockdown or working from home in FY2019. In FY2018, electricity consumption of these sites were equivalent to about 7.1% of the total electricity consumption.

Environment（Water）
Item

Scope（*1）
Non-consolidated

Water Consumption （*2）

Consolidated
Intensity (per employee)（Components of Water Source）

m³

Groundwater

（*3）
（*4）

FY202011,7774,460

130,821,214

118,235,911

20,143,772

93,119,589

3.525

3.420

1.300

―

4.883

3,378,261

4,206,078

4,806,779

110,100,910

13,007,683

56,084,893

4,756,698

2,929,981

31,700,505

Ocean

―

0

0

1,600

Rainwater

―

42

30

525,813

Number of sites

m³

site

―

―

74

60

―

―

366,026

2,041,468――

303,411793,272――

62,615

―

―

―

Ocean

―

―

―

1,600

Rainwater―――

525,798

Water consumption
Consolidated

Rivers, Lakes（*2）

FY201913,897―Groundwater

Water Discharge（Sewer）（*4）

FY201821,609―Consolidated(Components) Third-party sources（*1）

FY2017m3/employee

Third-party sources
Rivers, Lakes

Water consumption in water-stressed areas （*3）

Non-consolidated (in Japan)

Unit

Non-consolidated

m³

m³

21,60913,897

720,797―

11,777

4,460

The boundary of “Consolidated” is non-consolidated, consolidated subsidiaries and Joint operations. We have added Joint operations to the boundary from FY2020. For Joint operations, the amount equivalent to the investment ratio as of the end of March of the reporting period is
included in the environmental data. One site of the Joint operations is excluded from the scope of FY2020 because its data collection system is not in place yet.
* Water consumption has been reduced by installing water-saving device for employee cafeteria and using recycling water for toilet flushing at Head office.
* 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 main reason for the increase of water consumption in FY2020 compared to FY2019 is the reactionary increase due to the lack of the environmental data for some sites by COVID-19 lockdown or working from home in FY2019, and the addition of Joint operations to theboundary of data fromFY2020.
The above water consumption was calculated based in the water risk level of 3 (High) or higher based on the World Resources Institute (WRI)'s "WRI Aqueduct".
Since all sites are discharged into the sewer, it is equivalent to the amount of water consumption.
© 2021 Sumitomo Corporation

125

Sustainability of
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Corporation GroupFeatureEnvironment

SocialGovernance

ESG Quantitative
Data

Third-party
Assessment

ESG quantitative data
Environment（Resources and waste）
Item

Scope（*1）

Waste Emissions（*2）

Non-consolidated
Consolidated
Intensity（per employee）

Non-consolidated (in Japan)

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

Non-consolidated (in Japan)

Recycle Ratio

Unit

Paper Consumption
Intensity（per employee）（*1）

Non-consolidated (in Japan)

FY2019FY2020

190

123

45

46,19644,38133,30536,480

0.043

0.048

0.036

0.013

168

175

111

41

2

6

6

2

98.8

96.5

95.0

96.1

3.32

1.08

7.01

6.29

0

0

0

0

1,000 sheets

22,28018,604

14,5164,559

1,000 sheets/employee

5.604

4.944

4.446

1.400

t/employeet

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

FY2018191t%

Non-consolidated (in Japan)

FY2017t

The boundary of “Consolidated” is non-consolidated, consolidated subsidiaries and Joint operations. We have added Joint operations to the boundary from FY2020. For Joint operations, the amount equivalent to the investment ratio as of the end of
March of the reporting period is included in the environmental data. One site of the Joint operations is excluded from the scope of FY2020 because its data collection system is not in place yet.

（*2）

* The above figures for Japan include general waste but exclude industrial waste and valuable resource.
* 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 the total waste emissions.

Environment（Others）
Item
Percentage of sites covered by ISO14001

Violations of environmental laws and regulations(penalties of one million yen or more, etc.)© 2021 Sumitomo Corporation

Number of caseAmount of penalties

Scope

Unit

Non-consolidated (in Japan)

%

100

100

100

100

Consolidated

%

-

-

19

19

case

0

0

0

0

yen

0

0

0

0

Non-consolidated (in Japan)

FY2017FY2018FY2019FY2020126

Sustainability of
Sumitomo
Corporation GroupFeatureEnvironment

SocialESG Quantitative
Data

Governance

Third-party
Assessment

ESG quantitative data
Society (Personnel data)
Item

Scope

FY2017FY2018FY2019FY202065,662

72,642

74,92020,46525,61925,70027,60428,523

3,984

3,907

3,910

3,973

3,937

1,178

1,184

1,216

1,270

1,303

Total

5,162

5,091

5,126

5,207

5,240

Male

102

107

104

118

102

Female

50

58

91

51

Consolidated

personMale
FemaleNumber of new employees

FY201673,016

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

70,900

Number of employees

Non-consolidated

personNon-consolidated

person

51
153

157

162

209

153

Ratio of female new employees

Non-consolidated

%

33.3

31.8

35.8

43.5

33.3

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

Non-consolidated

％

6.4

6.4

7.2

7.5

7.0

8

7

35

27

24

Non-consolidated

person

0

1

2

5

3

8

8

37

32

27

Total

Number of mid-career employees

MaleFemaleTotal

Employment rate of disabled persons
Number of managers

Non-consolidated%

Male
FemaleNon-consolidated

person

Total

2.11

2.21

2.24

2.24

2.11

2,633

2,599

2,549

2,585

2,587

143

153

169

186

202

2,776

2,752

2,763

2,771

2,789

Ratio of female Managers

Non-consolidated

%

5.15

5.6

6.6

6.71

7.2

Ratio of employees who are covered by a collective bargaining
agreement

Non-consolidated

%

56.4

57.6

59.1

59

59.2

19.1

19

18.8

18.7

19.1

Non-consolidated

year/person

15.8

16.1

16

15.6

16.3

Overall mean

18.3

18.3

18.2

18

18.4

Male

2.3

2.3

1.8

1.8

1.9

2.7

2.6

2.3

2.4

1.7

2.4

2.4

1.9

2.1

1.9

2.4

2.4

1.9

1.9

1.9

Average length of service (years)

Male
FemaleTurnover rate of full-time employees

FemaleNon-consolidated

%

Total
Voluntary turnover rate (Compared to the number of employees of the previous year)（*1）

Non-consolidated%

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

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Society (Work styles)
Scope

Unit

FY2016FY2017FY2018FY2019FY2020

Average monthly overtime hours

Non-consolidated

hours/minutes

11 hours 50 minutes

9 hours 12 minutes

9 hours 53 minutes

7 hours 47 minutes

12 hours 49 minutes

Average annual days of paid vacation acquired（*1）

Non-consolidated

day

15.1

16.8

16.9

17.1

12.9

Spouse maternity leaveNon-consolidated

case

76

74

90

92

83

Leave to look after a sick child

Non-consolidated

case

200

215

237

225

173

Non-consolidated

person

0

1

0

1

0

Non-consolidated

person

71

79

71

73

87

192

158

181

179

189

49

66

71

57

73

Total

241

224

252

236

262

Male

5

2

10

9

34

49

66

71

56

73

Total

54

68

81

65

107

Male

5

0

10

9

32

49

36

54

64

29

Total

54

36

64

73

61

Male

100

ー

100

100

100

90.7

92.3

100

95.6

96.7

91.5

92.3

100

96.1

98.4

Item

Number of employees who took family care leave
Number of employees who took maternity leave
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

FemaleNon-consolidated

Non-consolidated

Non-consolidated

personpersonpersonNon-consolidated

%

Total
Number of individuals using shortened work hour system

Non-consolidated

person

121

129

136

165

173

Number of cases of violations of the Labor standards Act

Non-consolidated

case

4

1

3

3

5

（*1）

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

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Society (Occupational safety and health)
Item

Scope

Unit

FY2016FY2017FY2018FY2019FY2020

Number of occupational accidents

Employees (full-time)Non-consolidated

person

1

2

1

3

2

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

１

２

１

３

1

LTIFR (Lost Time Injury Frequency Rate)

Employees (full-time)Non-consolidated

%

0.10

0.20

0.10

0.29

0.11

Scope

Unit

Society (Human resources development)
Item
Ability development training

Total number of lectures
Number of employees participatingin training
Total hours of training received

Non-consolidated

FY2017FY2018FY2019FY2020session

321

326

340

286

255

person11,868

11,818

14,646

14,963

12,211

59,71862,96775,08965,65250,806

11.6

12.4

14.7

12.7

9.7

hour

Average hours per employee

FY2016

Number of employees dispatched overseas

Non-consolidated

person

1,112

1,101

1,153

1,144

1,098

Number of employees undergoing training overseas

Non-consolidated

person

82

94

96

67

34

Annual education and training cost per employee

Non-consolidated

yen

518,882

478,884

555,403

501,830

325,604

Society (Social contribution)
Item

Social contribution activities

Political donations© 2021 Sumitomo Corporation

Scope

Unit

Expenditure for social contribution
activities

Consolidated

million yen

Number of employees who used thevolunteer leave program

Non-consolidated
Non-Consolidated

FY2016FY2017FY2018FY2019FY2020

1,549

1,556

1,528

1,980

1,654

person

3

3

7

12

1

million yen

24

24

24

28

28

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Governance (Board of Directors, Audit & Supervisory Board, Nomination and Remuneration Advisory Committee)
Item
Board of Directors（*1）

Inside directors

Independent outside directors

Scope

Unit

FY2016FY2017FY2018FY2019FY2020

Male

10

6

6

6

6

Female

0

0

0

0

0

Total

10

6

6

6

6

3

2

3

3

3

1

1

2

1

2

4

3

5

4

5

14

9

11

10

11

Male
FemaleTotal

Nonconsolidated

personTotal
Ratio of female Directors（*1）

%

7

11

18

10

18

Number of Board of Directors meetings

time

18

21

20

16

21

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

Audit & Supervisory Board（*1）

Inside Audit & Supervisory
Board Members

Independent outside Audit &Supervisory Board Members

FemaleNonconsolidated

person

Total
Total
Number of outside Audit & Supervisory Board Members with expertise in financial affairs andaccounting（*1）
Number of Audit & Supervisory Board Meetings
Nomination and Remuneration Advisory
Committee（*1）

15

14

17

15

17

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
Inside members

Independent outside members

personMale
FemaleTotal

Nonconsolidated

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

5

6

7

5

11

（*1）

Figures at the end of June of each fiscal year

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ESG quantitative data
Governance (Remuneration)
Item
Remuneration of Directors

Directors(Excluding outside
directors)

Scope

Remuneration of Audit & Supervisory
Board Members

Audit fees (KPMG AZSA LLC)

FY2018FY2019FY2020

480

474

470

Bonus for Directors

149

174

327

194

―

Stock options

79

64

14

―

―

―

―

73

92

86

―

―

66

70

36

Total

895

769

959

831

592

Monthly remuneration

47

41

67

65

87

Total

47

41

67

65

87

86

86

87

87

87

34

38

38

38

50

Monthly remuneration

Outside Audit &Supervisory Board
Members

Monthly remuneration

Nonconsolidated

Nonconsolidated

million yen

million yen

Non-consolidated

493

495

492

520

508

Consolidated

565

508

540

537

529

1,058

1,003

1,032

1,057

1,037

5

18

13

16

11

Consolidated

24

41

57

83

62

Total

29

59

70

99

73

Total
Fees for non-auditing
services

FY2017530

Inside Audit & Supervisory
Board Members

Fees for auditing services

FY2016667

Restricted stock-based
compensation
Performance share unitbased stock compensation
Outside directors

Unit

Monthly remuneration

Non-consolidatedー

million yen

Governance (Compliance)
Item
Compliance-related seminars and other training programs

Scope
Number of times
Number of participants

Of the above, seminars and other training programs related to antibribery and anti-corruption
（*1）
（*2）

Number of times
Number of participants

Head Office ordomestic/overseas
corporations
（*2）

Unit
time
personFY2018（*1）

FY2019（*1）

FY2020（*1）≥ 270 times≥ 150 times

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

Total of ≥ 19,890 person≥ 180 times

time≥ 70 times

personTotal of ≥ 2,580 persons≥ 80 times≥ 70 times

Total of ≥ 3,100 persons Total of ≥ 10,800 persons

Figures from January to December of each fiscal year
Including training programs conducted by Sumitomo Corporation or its regional offices for business-line subsidiaries in Japan or overseas.
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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 theperformance of Japanese companies in terms of ESG practices. It has also
been adopted by the Government Pension Investment Fund (GPIF) as aneffective 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 2021) 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 incompanies having a strong positive evaluation for ESG
performance.
CDP

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 andIn 2020, we were evaluated B (management level) in the
Climate Change program, A (leadership level) in the
Water Security program and A- (leadership level) in theForests program by the CDP.

governance (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
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 2021)
It is adopted by the Government Pension Investment Fund (GPIF) as aneffective index for ESG investment.
© 2021 Sumitomo Corporation

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 the way
to realization of a decarbonized society by taking
advantage of innovations.

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Third-party assessment
Assessment organizations"Eruboshi" certification

Telework Pioneer 100

In May 2016, we were certified as a second-highest class

We were selected for inclusion in the Top Hundred Telework"Eruboshi" company in recognition of the effort to promote thePioneers for FY2019 by the Ministry of Internal Affairs andactive involvement of female employees on the basis of the Act

Communications (MIC). Through Top Hundred Telework Pioneers,on Promotion of Women's Participation and Advancement in the

MIC recognizes companies and organizations with sufficient

Workplace.

achievements that are advancing the introduction and utilization of
telecommuting.

"Platinum Kurumin" as a company that provides

Kagayaku Telework Award

superior childcare support

Sumitomo Corporation won the Excellence Award of the FY2020 Telework Promotion Company
Award (Kagayaku Telework Award) presented by the Minister of Health, Labor andWelfare(MHLW). This award is presented to companies and organizations that achieved
outstanding results in maintaining a good work-life balance for employees through the use of
telework. The Excellence Award in particular recognizes companies and organizations withexceptional measures.

We were granted "Platinum Kurumin" certification in June 2015
by the Ministry of Health, Labor and Welfare (MHLW) in
recognition of providing superior childcare support among the"Kurumin" certified companies.

Digital Transformation Stock (DX Stocks)

Reforming and Diversifying Work Practices
We were certified by METI as a “White 500” enterprise withoutstanding

healthandproductivity

managementfor4

consecutive years (2017, 2018, 2019, 2020).

Sumitomo Corporation was selected as "Noteworthy DX Company
2021" following last year's designation as a "DX Stock 2020" under
the Digital Transformation Stock Selection (DX Stocks) program by
METI and the Tokyo Stock Exchange.
This program encourages wide-ranging initiatives for the digital era
and recognizes companies where DX has been firmly established in
the corporate culture.

Certified as a “Bronze” in “PRIDE INDEX”

DX-Certified Business Operator

In October 2019, we were certified as a “Bronze” in “PRIDE

Sumitomo Corporation was selected as a DX-Certified Business
Operator under METI’s DX Certification System. This system
recognizes DX-Certified Business Operators as companies ready to
pursue DX in accordance with the Act on Facilitation of Information
Processing.

INDEX” in recognition of the effort to support sexual minorities
including LGBT by a private organization “work with Pride”.

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Principles and policies supporting corporate activities
We have established our own principles and policies while respecting international conduct standards.
In accordance with these principles, policies and standards, we are addressing the Six Material Issues to Achieve Sustainable Growth with Society.

Environment
 Environmental Policy
https://www.sumitomocorp.com/en/jp/sustainability/environment-policy Policy on climate change
https://www.sumitomocorp.com/en/jp/sustainability/environmental-management/climate

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

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/materialissues/tax-principles-j.pdf?la=en Sumitomo Corporation Group Compliance Policy
https://www.sumitomocorp.com/en/jp/about/governance/compliance/policy

Social Corporate Disclosure Policy
https://www.sumitomocorp.com/en/jp/about/governance/detail/disclosurepolicy

 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

 Risk Management Basic Policy
https://www.sumitomocorp.com/en/jp/about/governance/risk 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© 2021 Sumitomo Corporation134

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Disclosure based on IBC Stakeholder Capitalism Metrics
Overview
In January 2021, Sumitomo Corporation supported and signed the Stakeholder Capitalism Metrics, a standard for non-financial information disclosure published by theInternational Business Committee (IBC) of the World Economic Forum. Stakeholder Capitalism Metrics is a set of universal and comparable disclosures consisting of 21
core metrics and 34 expanded metrics focused on people, planet, prosperity and governance. While utilizing this Metrics, we will further expand the disclosure of nonfinancial information to our stakeholders.
In FY2021, our disclosure focuses on the Metrics that are of high importance to the Company. We do not currently disclose all of them, but we will continue to review ourdisclosure based on the importance of the Metrics to our company and usefulness to our stakeholders.
：Core MetricPrinciple of Governance
Theme：Expanded Metric

MetricResponse

Setting purpose
The company’s stated purpose, as the expression of the means bywhich a business proposes solutions to economic, environmental
and social issues. Corporate purpose should create value for all
stakeholders, including shareholders.

Sumitomo Corporation believes that establishing and maintaining better governance and pursuing its business activities will help to growand develop sustainably. In addition, such efforts will help Sumitomo Corporation to enhance its corporate value over the mid-to-long term
and to fulfill its social mission as a corporation. Sumitomo Corporation believes that this will also serve the interest of its shareholders andall other stakeholders, including clients, employees, and local communities, and Sumitomo Corporation plans to maintain unstinting efforts
to improve its governance further in future.
This is mentioned in Section 2.2 of "Sumitomo Corporation Corporate Governance Principles".

Governing Purpose

Purpose-led management
How the company’s stated purpose is embedded in company
strategies, policies and goals.

The mission of Sumitomo Corporation is to support all our stakeholders, including shareholders, clients, local communities and employees,
in their endeavors to achieve prosperity and realize their dreams through our sound business activities.
To fulfill this mission, we have established and disclosed management principles and policies including Environment Policy, Sumitomo
Corporation Group Compliance Policy, Sumitomo Corporation Group Anti-Corruption Policy, CSR Action Guidelines for Supply Chain
Management, Policies on Climate Change Issues, and Sumitomo Corporation Group’s Human Rights Policy.
In addition, to pursue the sustainability of our company and society in accordance with our corporate mission, we have been working toenhance the sustainability management since 2020. As part of the efforts, we identified key social issues and set mid- and long-term goals
for each of the social issue. As we strive to solve the social issues through our business, we will disclose the progress in the ESG
Communication Book.
For more information on the key social issues and their mid- and long-term goals, please refer to page 14, 15.

Quality of Governing
Body

Governance body composition
Composition of the highest governance body and its committees
by:competencies relating to economic, environmental and social
topics; executive or non-executive; independence; tenure on thegovernance body; number of each individual’s other significant
positions and commitments, and the nature of the commitments;
gender; membership of under-represented social groups;
stakeholder representation.

We disclose the composition of the highest governance body (Board of Directors (Audit & Supervisory Board Member system)), and its
members (Directors: 6 internal, 5 external (of which, 2 female members), Audit & Supervisory Board Members: 2 internal, 3 external (ofwhich, 1 female member) on page 112, 113.
We also disclose the information on our Corporate Governance Report, Integrated Report, "Sumitomo Corporation Corporate GovernancePrinciples" as well as in the Notice of Convocation for our Ordinary General Meeting of Shareholders.
Regarding the number of each individual's other significant positions and the nature of commitments, Sumitomo Corporation discloses thestatus of main duties, in accordance with laws and regulations, in the business report section in the Notice of Convocation as well as otherreference documents for the Ordinary General Meeting of Shareholders.

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Disclosure based on IBC Stakeholder Capitalism Metrics
Principle of Governance
Theme

Quality of Governing
Body：Core Metric：Expanded Metric

MetricResponse

Progress against strategic milestones
Disclosure of the material strategic economic, environmental andsocial milestones expected to be achieved in the following year,
such milestones achieved from the previous year, and how thosemilestones are expected to or have contributed to long-term value.

Sumitomo Corporation sets quantitative and qualitative management targets in its mid-term management plan and makes efforts toachieve the targets through a thorough plan-do-check-act (PDCA) cycle. In the new mid-term management plan "SHIFT 2023“, which has
started in FY2021, we are also monitoring the social and environmental aspects of our business based on the 6 key social issues thatwere identified in FY2020 as well as their mid- and long-term goals and annual action plans. We will disclose the results starting in
FY2022.
For more information on the key social issues and their mid- and long-term goals, please refer to page 14 to 20.

Remuneration
1. How performance criteria in the remuneration policies relate to
the highest governance body’s and senior executives’ objectives for
economic, environmental and social topics, as connected to thecompany’s stated purpose, strategy and long-term value.

1.
For performance-linked bonuses, from the perspective of reinforcing the relationship with the Group's management strategy, the total
amount to be paid is determined in accordance with the performance management index to be focused on in the mid-term management
plan "SHIFT 2023", and the amount to be paid to individual officers is distributed according to their position and personal evaluation andpaid after the end of the fiscal year.
In addition, each officer is evaluated on the basis of both financial indicators (status of achievement of business plans, etc. in therespective areas of responsibility) and non-financial indicators (business reform through digital transformation (DX), enhancement ofsustainability management, promotion of diversity & inclusion etc.) so they can become more aware in regard to their commitment tomanagement strategy and results. In principle, the ratio of financial indicators to non-financial indicators in personal evaluation is 50:50.

2. Remuneration policies for the highest governance body andsenior executives for the following types of remuneration:– Fixed pay and variable pay, including performance-based pay,equity-based pay, bonuses and deferred or vested shares– Sign-on bonuses or recruitment incentive payments– Termination payments– Clawbacks– Retirement benefits, including the difference between benefit
schemes and contribution rates for the highest governance body,senior executives and all other employees

2.
Remuneration policy 1: Remuneration standards and remuneration composition ratios of Executive Directors and Executive
Officers
The Company has established appropriate remuneration standards and remuneration composition ratios based on its businessenvironment, management strategy and human resources strategy, with reference to objective 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 that when consolidated net income and basic cashflow are 200 billion
JPY and the stock growth rate reaches 100%, monthly remuneration, performance-linked bonus and stock-based remuneration are as
follows.
Remuneration composition ratio (monthly remuneration, performance-linked bonus,
stock-based remuneration):
CEO: 40 : 35 : 25
Other Executive Directors: 47.5 : 32.5 : 20
Remuneration policy 2: Performance-linked bonus
Please refer to item 1 of this section.
Remuneration policy 3: Restricted Performance Share Unit-Based Remuneration
With the aim offering incentives to seek sustainable improvement of the Company's corporate value as well as promoting efforts toincrease our corporate value over the medium to long term, the Company's common shares (restricted) in number determined according
to the Company's stock growth rate (ratio of Company's stock growth and including dividends to the growth rate of TOPIX (Tokyo Stock
Exchange Stock Price Index) ) during the 3 year evaluation period are granted each year in principle. The restriction period will be from the
day the shares are granted and until the day the recipients resigns or retires from all their positions as Director or Executive Officer of theCompany or any other position determined by the Board of Directors.

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Disclosure based on IBC Stakeholder Capitalism Metrics
Principle of Governance
Theme：Core Metric：Expanded Metric

MetricResponse

Material issues impacting stakeholders
A list of the topics that are material to key stakeholders and thecompany, how the topics were identified and how the stakeholders
were engaged.

The basis for the Sumitomo Corporation Group’s operations can be found in Sumitomo’s Business Philosophy, which has formed thefoundation for Sumitomo’s sustainable development over the course of 400 years. One of the credos of this philosophy states: “Benefit for
self and others, private and public interests are one and the same.” We interpret this credo advocates Sumitomo’s business activities must
benefit not only Sumitomo, but also society around us to achieve sustainable growth together.
In 2017, the Group identified 6 material issues for achieving sustainable growth with society. By constantly clarifying the relationshipbetween our strategy and business with the material issues, we have been conducting sustainability management with the awareness thatour business activities will contribute to solving social issues.
In 2020, to further enhance the sustainability management and clarify our role in realizing a sustainable society, we have identified 6 keysocial issues that we address through our business and corporate activities. The 6 key social issues are: “Mitigation of climate change”,“Circular economy”, “Respect for human rights”, “Development of local society and economy”, “Improvement of living standard” and“Quality education”.

Stakeholder
Engagement

When identifying the 6 key social issues, we launched an internal project team, which first created a long list of global social issues basedon the UN Sustainable Development Goals. Also, considering the characteristics of our business activities as an integrated general trading
company, the project team came up with hypotheses related to important issues deeply involving the Group and picked out several issues
from the long list. At the same time, they conducted surveys and interviews with the general managers of each business unit and division
concerning opportunities and risks related to social issues within the strategies and business activities of each organization based on thelong list. They then analyzed the relationship of our businesses to each issue. Finally, after comparing their hypotheses with the survey
results and organizing them into categories, the team identified 6 key social issues. The key social issues and long-term goals were
decided in June 2020 after resolutions by the Management Council and the Board of Directors. We also decided on medium-term goals in
May 2021. In this series of processes, opinions were exchanged with experts on the environment and human rights, institutional investors,
international organizations, and others to verify that the expectations of our various stakeholders have been properly reflected.
Anti-corruption
1.Total percentage of governance body members, employees andbusiness partners who have received training on the organization’s
anti-corruption policies and procedures, broken down by region.

Ethical Behaviour

2.
a) Total number and nature of incidents of corruption confirmed
during the current year, but related to previous years; andb) Total number and nature of incidents of corruption confirmed
during the current year, related to this year.
3.Discussion of initiatives and stakeholder engagement to improvethe broader operating environment and culture, in order to combat
corruption.

1. Sumitomo Corporation and its Group companies have conducted more than 70 seminars and other training programs on anticorruption and more than 11,700 officers/employees participated in FY2020.

2. No incident was confirmed in FY2020 in which the Company has been fined in a large amount nor convicted of bribery of public
officials.
3. Sumitomo Corporation Group implements strict measures to prevent bribery, inappropriate payments, and all other forms of corruption.
Specifically, we have established the "Rules for Prevention of Bribery of Public Officials", which regulate the provision of entertainment,
gifts, invitations and donations to domestic and foreign public officials as well as the selection of service providers (such as agents,
consultants or other business intermediaries). We extend these rules to overseas offices and Group companies and we also offer
ongoing employee education and work constantly to prevent bribery and corruption.
Our "Sumitomo Corporation Group Anti-Corruption Policy", which summarizes the Group’s principles and policies outlined above, sets
out the Group’s basic principles in this area and explains our anti-bribery system and our initiatives for the prevention of bribery to ourbusiness partners including service providers, and request their understanding and cooperation.

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Governance

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Disclosure based on IBC Stakeholder Capitalism Metrics
Principle of Governance
Theme：Core Metric
Metric：Expanded MetricResponse

Protected ethics advice and reporting mechanisms
A description of internal and external mechanisms for:1.Seeking advice about ethical and lawful behaviour andorganizational integrity; and2.Reporting concerns about unethical or unlawful behaviour andlack of organizational integrity.

Our internal rules stipulate "Immediate Report", which means that any issues or potential issues in relation to compliance must be reported
immediately to their line manager or to the relevant department of the Corporate Group. Such issues include not only the violation of
antitrust/competition laws or anti-bribery/corruption laws but also workplace misconduct, falsification of accounts, or harassment. If
reporting through the usual reporting line is difficult for some reason, we maintain a "Speak-Up System" available to officers andemployees to report the issue to the Chief Compliance Officer through an internal or external hotline.
In addition, we have developed and launched the group-based Speak-Up System, which enables officers and employees of groupcompanies both in and outside Japan to report compliance-related issues. For more details, please see our website:
Also, appropriate departments respond to advice and reports received from external stakeholders through the Contact Form on our
website, etc.

Monetary losses from unethical behaviour
Total amount of monetary losses as a result of legal proceedings
associated with fraud, insider trading, anti-trust, anti-competitive
behaviour, market manipulation, malpractice or violations of otherrelated industry laws or regulations.

In FY2020, there was no incident (monetary loss) at Sumitomo Corporation.

Integrating risk and opportunity into business process
Company risk factor and opportunity disclosures that clearly identify
the principal material risks and opportunities facing the company
specifically (as opposed to generic sector risks), the company
appetite in respect of these risks, how these risks and opportunities
have moved over time and the response to those changes. These
opportunities and risks should integrate material economic,
environmental and social issues, including climate change and data
stewardship.

Sumitomo Corporation Group faces a variety of social issues in the course of its wide-ranging business activities. As the world strives toachieve a sustainable society, in 2020, we have identified 6 key social issues and their long-term goals to further clarify our role.
Furthermore, in 2021, based on the long-term goals, we have set mid-term goals to promote more specific initiatives, such as thedevelopment of business opportunities that capture changes in the business environment surrounding each issue and the development ofrisk management mechanism. The progress of these initiatives will be monitored and discussed at the Corporate Sustainability Committee.

Ethical Behaviour

In addition, when making new business investment, we assess its social and environmental impact. The Company Investment Committee*,which the Corporate Sustainability team is a member of, discusses including the perspective of social and environmental risks andopportunities.
*Advisory body to the Management Council, which is the highest executive-level decision-making body
Please see page 9 for our business risks and opportunities identified for various sustainability topics.

Risk and Opportunity
Oversight

Economic, environmental and social topics in capital
allocation framework
How the highest governance body considers economic,
environmental and social issues when overseeing major capital
allocation decisions, such as expenditures, acquisitions anddivestments.

At Sumitomo Corporation, the discussion of management resource allocation is done at the biannual Strategy Meeting where the top
management participates. The decision is finalized at the Management Council, which is the highest executive-level decision-making bodyand is executed under the supervision of the Board of Directors. When setting the areas of business growth fields, which are the focus
points of the resource allocation in each business areas, we also consider opportunities and risks in each business areas that arise fromsocial issues.
When discussing a new investment opportunity in individual business, we consider not only profitability, but also environmental and social
impacts and/or risks based on the uniqueness of the business. If necessary, we hire an external expert and conduct a thorough due
diligence on the environmental and social aspects (i.e. pollution, biodiversity, use of water and other limited natural resources, respect ofhuman rights, occupational health and safety, other workplace environment, impact on local communities etc.) and make the final
investment decision. Also, we continuously monitor the environmental and social impact in the post-investment process as well.
In addition, policies and initiatives pertaining to non-financial aspects that are essential for promoting our sustainability management are
discussed at the Corporate Sustainability Committee and then proposed at the Management Council.
All of these processes are carried out under the supervision of the Management Council as well as the Board of Directors.
For more information on our risk management, please refer to page 120, 121.

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Planet
Theme：Core Metric
MetricGreenhouse gas (GHG) emissions
For all relevant greenhouse gases (e.g. carbon dioxide, methane,
nitrous oxide, F-gases etc.), report in metric tonnes of carbon
dioxide equivalent (tCO2e) GHG Protocol Scope 1 and Scope 2
emissions.
Estimate and report material upstream and downstream (GHG
Protocol Scope 3) emissions where appropriate.

：Expanded MetricResponse
Sumitomo Corporation Group’s greenhouse gas emissions (t-CO2e) for FY2020 are as follows:• Scope 1: 1,526,724(Breakdown of GHG type)
CO2 1,522,514
N2O
4,210
• Scope 2: 652,611• Scope 3 Upstream Transportation and Distribution: 3,875• Scope 3 Waste: 5• Scope 3 Business Trips: 67• Scope 3 Employee Commuting: 140• Scope 3 Downstream Leased Assets : 30,294
For more information such as the reporting boundaries and CO2 emissions, see our Environmental Data available on page 124.
Also, please refer to page 39 for our CO2 emission reduction initiatives that we announced as the mid-term goal for climate change
mitigation.

Climate Change© 2021 Sumitomo Corporation

TCFD implementation
Fully implement the recommendations of the Task Force on
Climate-related Financial Disclosures (TCFD). If necessary,
disclose a timeline of at most three years for full implementation.
Disclose whether you have set, or have committed to set, GHG
emissions targets that are in line with the goals of the Paris
Agreement – to limit global warming to well below 2°C above preindustrial levels and pursue efforts to limit warming to 1.5°C – andto achieve net-zero emissions before 2050.

Sumitomo Corporation has been supporting the TCFD recommendations since March 2019. Please see page 25 to 39 for the disclosure
on governance, strategy, risk management, targets and KPIs related to climate change based on the TCFD recommendations.

Paris-aligned GHG emissions targets
Define and report progress against time-bound science-based
GHG emissions targets that are in line with the goals of the Paris
Agreement – to limit global warming to well below 2°C above
pre-industrial levels and pursue efforts to limit warming to 1.5°C.
This should include defining a date before 2050 by which you willachieve net-zero greenhouse gas emissions, and interim reduction
targets based on the methodologies provided by the Science
Based Targets initiative, if applicable.
If an alternative approach is taken, disclose the methodology used
to calculate the targets and the basis on which they deliver on thegoals of the Paris Agreement.

As stated above, we have a long-term goal of seeking to become carbon neutral in the Group's business by 2050 and we will also
contribute to the carbon neutralization of society. Also, we have set a mid-term goal of reducing the CO2 emissions by 50% or more by2035 compared to 2019 levels.

Also, we have identified "mitigation of climate change" as one of the 6 key social issues which the Group will address to achieve asustainable society. As a long-term goal, the Group will aim to carbon neutralize its business by 2050, and also will aim to achieve its midterm goal, which is to reduce CO2 emissions by 50% or more by 2035 compared to 2019 levels.

For specific action plans and initiatives, please see page 27 and 39.

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PlanetTheme

Nature Loss

Fresh water availability© 2021 Sumitomo Corporation：Core Metric
Metric：Expanded MetricResponse

Land use and ecological sensitivity
Report the number and area (in hectares) of sites owned, leased or
managed in or adjacent to protected areas and/or key biodiversity
areas (KBA).

The Group does not disclose this information, however, we have a process in place to consider the impact on land use and ecosystems
when considering new investments and loans.

Water consumption and withdrawal in water-stressed areas
Report for operations where material: mega litres of water
withdrawn, mega litres of water consumed and the percentage ofeach in regions with high or extremely high baseline water stress,
according to WRI Aqueduct water risk atlas tool.
Estimate and report the same information for the full value chain(upstream and downstream) where appropriate.

The Group's water consumption and withdrawal in water-stressed areas(*) for FY2020 are as follows:• Total water consumption : 40,400 mega liters
Of this, 4.1% in water-stressed areas*• Total water withdrawal : 93,120 mega liters
Of this, 2.2% in water-stressed areas*(*) Water-stressed areas :The regions with high or extremely high baseline water stress, according to WRI Aqueduct water risk atlas tool.

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PeopleTheme：Core Metric
MetricDiversity and inclusion (%)
Percentage of employees per employee category, by age group,
gender and other indicators of diversity (e.g. ethnicity).

：Expanded MetricResponse
The Sumitomo Corporation Group has a diverse workforce made up of people who have different lifestyles and values in addition todifferences in gender and nationality. It is essential to utilize the rich mix of “knowledge” held by diverse people as a source ofcompetitiveness in order to survive and stay ahead in complex business domains. We will focus on the diversity of our workforce on a
global basis, particularly on the strengths of individuals, and bring these strengths together in combination. By doing so, we will drive theprogress of our growth strategies.
Gender ratio at Sumitomo Corporation (non-consolidated) as of March 2021:
Male: 3,937 / Female: 1,303
Percentage by age group at Sumitomo Corporation (non-consolidated) as of March 2021:
Age group

Dignity and Equality

20s

30s

40s

50s

60s

Number of
employees

Over 70s

Total

972

1,395

1,168

1,279

420

6

5,240

％

19%

27%

22%

24%

8%

0%

100%

Pay equality (%)
Ratio of the basic salary and remuneration for each employee
category by significant locations of operation for priority areas ofequality: women to men, minor to major ethnic groups, and otherrelevant equality areas.

There is no gap in basic salary and remuneration in each employee category such as gender and ethnicity etc.at Sumitomo Corporation(non-consolidated).

Wage level (%)
1.Ratios of standard entry level wage by gender compared to local
minimum wage.

Sumitomo Corporation Group sets salary level that exceeds minimum wage level in each region.
The wage level at Sumitomo Corporation (non-consolidated) is as follows:

2.Ratio of the annual total compensation of the CEO to the medianof the annual total compensation of all its employees, except
the CEO.

Risk for incidents of child, forced or compulsory labour
An explanation of the operations and suppliers considered to havesignificant risk for incidents of child labour, forced or compulsory
labour. Such risks could emerge in relation to:a) type of operation (such as manufacturing plant) and type of
supplier; andb) countries or geographic areas with operations and suppliersconsidered at risk.

1. The standard entry level wage exceeds the minimum wage level in Japan and there is no gap between gender.
New graduate with master's degree or higher: 290,000 JPY/month
New graduate with bachelor's degree: 255,000 JPY/month
2. The ratio of the annual total compensation of the President and CEO to the median of the annual total compensation of all its
employees at Sumitomo Corporation (non-consolidated), except the President and CEO, is 32:3.
（President and CEO: 144 mil. JPY, Median of the annual total compensation of all employees at Sumitomo Corporation: 13.5 mil. JPY)
In accordance with the Sumitomo Corporation Group's Human Rights Policy, Sumitomo Corporation began human rights due diligence in
2020. We identified 8 salient human rights issues, such as "forced labor and child labor", that should be addressed with priority so that we
can assess impacts concerning human rights throughout the Group.
Through our desktop research, we have identified food and textile related businesses as areas with high risks of forced and child labor in
the supply chain and we confirmed the status of risk management in both business areas by conducting internal interviews.
Specifically, in the textile business, CSR audits are being conducted based on standards of some of our customers, at factories where wemanage or outsource.
Also, the food wholesale business properly manages to minimize the risk of forced and child labor by conducting supplier questionnaire tosuppliers associated with high-risk countries or goods, based on the list of TVPRA（Trafficking Victims Protection Reauthorization Act）
published by the US Bureau of International Labor Affairs (ILAB).
In addition, as conflict minerals poses a serious risk of forced and child labor, we monitor the risk by regularly checking the status andresult of conflict minerals survey in the Group.
For more information on our human rights related initiatives, please see page 60 to 65.

© 2021 Sumitomo Corporation

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PeopleTheme：Core Metric
MetricFreedom of association and collective bargaining at risk (%)
1.Percentage of active workforce covered under collective
bargaining agreements.

：Expanded MetricResponse
As of March 2021, the number of members of the Sumitomo Corporation Labor Union is 3,065, accounting for 59.2% of all employees of
Sumitomo Corporation (non-consolidated).

2.An explanation of the assessment performed on suppliers forwhich the right to freedom of association and collective bargaining
is at risk, including measures taken by the organization to addressthese risks.
Human rights review, grievance impact & modern slavery(#, %)

Dignity and Equality

1.Total number and percentage of operations that have been
subject to human rights reviews or human rights impact
assessments, by country.
2.Number and type of grievances reported with associated impacts
related to a salient human rights issue in the reporting period andan explanation on type of impacts.
3.Number and percentage of operations and suppliers considered
to have significant risk for incidents of child labour, forced orcompulsory labour. Such risks could emerge in relation to:a) type of operation (such as manufacturing plant) and type of
supplier; andb) countries or geographic areas with operations and suppliersconsidered at risk.

1.In accordance with the Sumitomo Corporation Group’s Human Rights Policy, Sumitomo Corporation began human rights due diligencein 2020.
The Sumitomo Corporation Group’s business activities extend to various industries and regions.
We started by conducting a desk top survey to confirm the Group’s businesses and their value chains, and developed a hypothesis on
businesses that may be exposed to high risks and human rights issues that are closely related to the value chains in those businesses.
We then exchanged opinions with stakeholders including outside experts and also hired outside experts and conducted internalinterviews on 12 business teams to verify the hypothesis. Through these consultations, we classified the human rights issues according to
the likelihood of these issues emerging in the Group’s business and also the degree of severity in case they emerge. As a result, we
identified 8* salient human rights issues within the Sumitomo Corporation Group.
*The 8 salient issues: labor conditions (wages and working hours), freedom of association and the right to collective bargaining, forcedlabor and child labor, occupational health and safety, health and safety of local residents, land rights, discrimination and harassment ,personal information and privacy.
Please see page 61 for details on the human rights due diligence process .
2. Out of cases reported or pointed out by stakeholders including civil society organizations, local communities and regulatory authorities,
there were 8 cases* that are related to the 8 salient human rights issues. We investigate the issues reported by the stakeholders, and if
corrective action is necessary, appropriate measures are considered and implemented.
*Excludes incidents of discrimination and harassments. Also, the occupational health and safety does not include work-related injuries
or fatalities.
3. Please refer to our comments in the section "Risk for incidents of child, forced or compulsory labour“.

Health and safety (%)
1. The number and rate of fatalities as a result of work-related
injury; high-consequence work-related injuries (excluding fatalities);
recordable work-related injuries; main types of work-related injury;
and the number of hours worked.

Health and Well-being© 2021 Sumitomo Corporation

2. An explanation of how the organization facilitates workers’
access to non-occupational medical and healthcare services, andthe scope of access provided for employees and workers.

The coverage of the following data is Sumitomo Corporation (non-consolidated):
1. Work-related fatalities: FY2018: 0, FY2019: 0, FY2020: 0
High-consequence work-related injuries (excl. fatalities): FY2018: 0, FY2019: 0, FY2020: 0
Recordable work-related injuries: FY2018: 1, FY2019: 3, FY2020: 1
We do not disclose the details (i.e. types of work-related injury, number of hours worked) .
2. Sumitomo Corporation (SC) promotes the following medical and healthcare services:•
In-house clinic (internal medicine and dentistry) : All employees of SC have access to the clinic during work hours.
•
Massage room, Counseling Center: All employees of SC Group have access to the services during work hours.
•
Advanced Healthcare Expense Program：This covers conditions that give rise to substantial economic burdens as a result oftreatment not covered by insurance and the program is available to all employees of SC. By broadly covering treatment not coveredby health insurance, the program can support employees receive treatment with reassurance and return to work at the earliest
possible time or continue working while receiving treatment.
•
Health consultation service: Since the incidence and death rates of breast cancer and uterine cancer have been increasing among
younger women in recent years, we started providing information on a gynecological exam subsidy program during periodic healthcheckups. We also have set up a consultation service for women's specific health issues.
For more details, please see page 66 to 75 ,and 129.

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People
Theme

Health and Well-being

Skills for the Future：Core Metric
MetricResponse

Monetized impacts of work-related incidents on organization (#, There was 1 occupational incident at Sumitomo Corporation (non-consolidated) in FY2020, and the financial impact was 50,000 JPY$)(healthcare cost).
By multiplying the number and type of occupational incidents by the
direct costs for employees, employers per incident (including
actions and/or fines from regulators, property damage, healthcare
costs, compensation costs to employees).
Training provided (#, $)Average hours of training per person that the organization’s
employees have undertaken during the reporting period, by genderand employee category (total number of hours of training provided
to employees divided by the number of employees).
Average training and development expenditure per full time
employee (total cost of training provided to employees divided by
the number of employees).

The following data covers training programs for Sumitomo Corporation (non-consolidated) which were conducted by the HR department in
FY2020. The trainings are not restricted by gender.

Monetized impacts of training – Increased earning capacity asa result of training intervention (%, $)The following data covers training programs for Sumitomo Corporation (non-consolidated) which were conducted by the HR department in
FY2020.

1.Investment in training as a percentage (%) of payroll.

1. Investment in training as a percentage (%) of payroll: 1.8％ (training expenditure 1.676 bil. JPY/ total pay roll of 93.399 bil. JPY)

2.Effectiveness of the training and development through increased
revenue, productivity gains, employee engagement and/or internalhire rates.

2. The Sumitomo Corporation Employee Awareness Survey conducted in 2019 indicated that "the level of satisfaction with the company"
remained at high levels. We believe that trainings have contributed to attaining high level of employee engagement.

Number of participants: 5,225 employees
Total number of hours of training provided: 50,806.1 hours
Total expenditure: 1.676 bil. JPY
Average training hours per employee:9.7 hours
Development expenditure per employee: 320,000 JPY（0～5）Assessment
Feeling of satisfaction with thecompanyWork-life management(level ofsatisfaction & practice)© 2021 Sumitomo Corporation：Expanded Metric

5th Survey（FY2016）

6th Survey（FY2019）

3.9

3.9

3.3

3.4

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Prosperity
Theme：Core Metric
MetricAbsolute number and rate of employment
Total number and rate of new employee hires during the reporting
period, by age group, gender, other indicators of diversity andregion.
Total number and rate of employee turnover during the reporting
period, by age group, gender, other indicators of diversity andregion.

：Expanded MetricResponse
The data for Sumitomo Corporation (non-consolidated) is as follows:
1-1. Absolute number of new graduate hires in FY2020<by gender> Male: 102, Female: 52 (Male 62.2%, Female 33.8%)<by age group> All new graduate hires are in the 20s
1-2. Absolute number of mid-career hires in FY2020<by gender> Male: 24, Female: 3 (Male 88.9%, Female 11.1%)<by age group> 30s: 19, 40s: 7, 50s: 1 (30s: 70.4%, 40s: 25.9%, 50s: 3.7%)
2. Average length of years served/Turnover rate in FY2020<by gender> Male: 19.1years/1.9%, Female 16.3 years/ 1.7%

Economic contribution
1.Direct economic value generated and distributed (EVG&D), on an
accruals basis, covering the basic components for theorganization’s global operations, ideally split out by:a) Revenuesb) Operating costsc) Employee wages and benefitsd) Payments to providers of capitale) Payments to governmentf) Community investment

Employment andWealth Generation

1. For items a through e, please refer to Consolidated Financial Statements beginning on page 38 of FY2020 Consolidated Financial
Statements. For item f, please refer to the "Expenditure for social contribution activities" listed on page 129 of this ESG Communication
Book 2021.
2. We do not currently conduct this assessment.

2.Financial assistance received from the government: totalmonetary value of financial assistance received by the organizationfrom any government during the reporting period.
Financial investment contribution

The result for Sumitomo Corporation Group in FY2020 is as follows:

1.Total capital expenditures (CapEx) minus depreciation, supported 1. In our new medium-term management plan "SHIFT 2023" which covers FY2021 through FY2023, we plan to invest and lend about 1.1
by narrative to describe the company’s investment strategy.
trillion yen during the period of the new Medium-Term Management Plan, primarily in the “Steady Business Growth” category where
market growth is anticipated and where the Company’s strengths have already been demonstrated, while recouping our funds by
2.Share buybacks plus dividend payments, supported by narrative
replacing assets in the other three categories. More specifically, we plan to expand investment in the business areas of domestic real
to describe the company’s strategy for returns of capital toestate, construction equipment rental and renewable energy businesses among others.
shareholders.
For more details, please see the "Management Policies, Business Environment and Management Challenges" section on page 1 of
FY2020 Consolidated Financial Statements.
２.Sumitomo Corporation aims to increase dividends by achieving medium and long-term earnings growth while adhering to its
fundamental policy of paying shareholders a stable dividend over the long term. Although profit (loss) for the year attributable to ownersof the parent in FY2020 totaled loss of ¥153.1 billion, the annual dividend for FY2020 is planned to be ¥70 per share. The decision isbased on the fact that our financial soundness is maintained as plannedby tightening cost management, reducing interest bearing liabilities through cash flow management and maintaining risk-weighted assets
within core risk buffer under emergency mode. It is also based on the projection that the profitability is expected to recover and thefinancial soundness is expected to maintain and improve. As a result, the total of dividend paid was 97,916 mil. JPY (by combining thepaid for acquisition of treasury stocks, the total was 97,921 mil. JPY).
Under “SHIFT 2023”, our medium-term management plan for FY2021 - FY2023, we will decide the annual dividend based on our
fundamental policy of paying long-term stable dividends and taking into consideration the status of fundamental earnings capacity, cash
flows, and other factors, with a consolidated payout ratio of about 30% as a guideline, maintaining at least ¥70 per share, the sameamount as the annual dividend for FY2020.
© 2021 Sumitomo Corporation

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Prosperity
Theme：Core Metric
MetricInfrastructure investments and services supported
Qualitative disclosure to describe the below components:
1.Extent of development of significant infrastructure investments
and services supported.

Employment andWealth Generation：Expanded MetricResponse
The 6 key social issues that Sumitomo Corporation has set have two themes: "the sustainability of society" and "development andadvancement of society".
The sustainability of society is a globally shared goal as well as a major premise of the Group’s business. On the other hand, the solutions
for pursuing the sustainability of society will be generated from further social and economic development and therefore, we believe thatthese two themes are mutually complementary.

2.Current or expected impacts on communities and local
The infrastructure business including power generation, water production, transportation and communication, which we provide on aeconomies, including positive and negative impacts where relevant.
global scale, contributes to the "development and advancement of society". We will continue our efforts to contribute to the development of
3.Whether these investments and services are commercial, in-kind local society and economy as well as improving people's living standards through our sound business activities.
While society seeks for sustainable development, the expectation for infrastructure business has also shifted.
or pro bono engagements.
To capture progress in global climate change mitigation, we will expand our renewable energy business and also develop and deploy
carbon free energy such as hydrogen and ammonium business, which are essential in building decarbonization system and sustainableenergy cycle required to realize a carbon neutral society. In addition, we will expand new power and energy services (i.e. large-scalestorage batteries business, battery reuse business, power energy platform business, hybrid energy service business etc.).
Furthermore, not only developing infrastructure as business, but we also have been providing infrastructure as part of our social
contribution initiative. For example, as part of the mining business, roads, bridges, water supplies, hospitals, and schools were constructed
for the local community.
We disclose the impact to environment and society on page 124 to 129.
For more information on our infrastructure business, please refer to page 19, 20 and 51.

Innovation of Better
Products and Services

Community and Social
Vitality© 2021 Sumitomo Corporation

Total R&D expenses ($)
Total costs related to research and development.

The total R&D cost for Sumitomo Corporation Group in FY2020 is 1,856 mil. JPY.

Total tax paid
The total global tax borne by the company, including corporate
income taxes, property taxes, non-creditable VAT and other sales
taxes, employer-paid payroll taxes, and other taxes that constitutecosts to the company, by category of taxes.

Please see the Consolidated Statement of Cash Flows, which is listed on page 45 and 46 of FY2020 Consolidated Financial Statements,
for information on income tax paid. We do not currently analyze the total taxes paid except for the income tax.

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