Growing Together

Report on Responsibility & Sustainability

2011

Report on Responsibility & Sustainability

2011

CONTENTS
2

Message from the President and CEO

To Achieve Prosperity and Realize theDreams of Our Stakeholders
3

Message from the Chair of the CSR
Promotion Committee

How We See CSR in the Sumitomo
Corporation Group5

Special Dialogue

With All Our Partners across Regional,
Generational and Organizational Boundaries
11 Sumitomo’s Business Philosophy / Sumitomo Corporation
Group’s Corporate Mission Statement

13 Company Information

Editorial Policy
The Sumitomo Corporation Group is constantly striving to achieve
prosperity and realize the dreams of its stakeholders by implementing its
Management Principles. Serving as the universal and unchanging value
and foundation for such endeavors is Sumitomo’s business philosophy,
which teaches us to place prime importance on integrity and soundmanagement, and not to pursue easy gains.
The Sumitomo Corporation Report on Responsibility &Sustainability 2011 is edited under the theme: “Growing Together.”
Under this theme, Sumitomo Corporation’s ideas and principles related
to CSR, and the business activities we carry out based on these ideas
and views are reported, taking as examples our telecommunications
infrastructure business to support socio-economic development in
Mongolia, our food businesses that ensure a stable supply of safe foods
and a wide range of our businesses that pursue the development ofsustainable energy supply. As a new approach of our CSR reporting, wesummarize how each business unit works to create social value in a waythat seeks a more comprehensive fulfillment of CSR, as well as theoriginal “strengths” of the Sumitomo Corporation Group.
For readers who would like to learn more about our CSR, we poston our Web sites reports on various themes, including our management
systems, any detailed or additional data and more recent practices.

http://www.sumitomocorp.co.jp/english/society/index.html

14
15

Project Report 1
Building a Telecommunications
Infrastructure in Mongolia to Contribute toits Socio-economic Development

19

Project Report 2
Supporting Healthy and Enjoyable Meals for
the World in the New Age

23

Project Report 3
Operating a Wide Range of Businesses
to Pursue Sustainable Energy Supply

26 Social Value Creation within Our Seven

The Sumitomo Corporation Group regards this report as animportant communication tool to connect us with our stakeholders. We
always appreciate feedback from our readers.

Scope of the Report
Period covered: April 1, 2010 to March 31, 2011
(Some activities starting on or after April 1, 2011 are included.)
Organizations covered: Sumitomo Corporation and the Sumitomo
Corporation GroupIn this report, “Sumitomo Corporation” and “the Company” refer to thenon-consolidated organization of Sumitomo Corporation. “The Sumitomo
Corporation Group” and “the Group” refer to the entire organization of
Sumitomo Corporation Group.
Publication schedule: Reports on environmental issues have been publishedannually since 1999, when the ﬁrst Environmental Report was published.
The title of the report was changed in 2003 to Social and Environmental
Report, which started to include social issues, in 2007 to Sustainability
Report, and in 2010 to Report on Responsibility & Sustainability.
The previous issue was published in September 2010.
The next issue is scheduled for publication in the fall of 2012.

Business Units

Referenced Guidelines

27

Metal Products

29

Transportation & Construction Systems

31

Infrastructure

33

Media, Network & Lifestyle Retail

35

Mineral Resources, Energy,
Chemical & Electronics

37

General Products & Real Estate

39

New Industry Development & Cross-function

41 Social Contribution Activities
43 Third-Party Review

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Report on Responsibility & Sustainability 2011

ISO26000 (Guidance on Social Responsibility)
Charter of Corporate Behavior (September 14, 2010), Nippon Keidanren(Japan Business Federation)GRI Sustainability Report Guidelines 2006, Global Reporting Initiative* Please refer to the following site for the content index.

http://wwww.sumitomocorp.co.jp/english/society/report.html“Environmental Reporting Guidelines 2007 — Towards a Sustainable
Society—” issued by Ministry of the Environment, Government of Japan“Environmental Accounting Guidelines 2005” issued by Ministry of theEnvironment, Government of Japan

Disclaimer
This report describes activities of Sumitomo Corporation and its subsidiaries andassociated companies (i.e., the Sumitomo Corporation Group) at the current time andin the past, as well as predictions, forecasts and plans for the future. These predictions,forecasts and plans are hypotheses or decisions made based on the information
available when the report was written, and therefore may include some level of
uncertainty. The results of business activities or occurrences in the future may differ fromthe predictions, forecasts and plans described in this report. Hence, readers should
recognize that the Sumitomo Corporation Group is not responsible for such events.

Message from the President and CEO

To Achieve Prosperity and Realize the Dreams of
Our Stakeholders
I would like to extend my deepest condolences and sympathy
both personally and on behalf of the Sumitomo Corporation
Group to all who were affected by the Great East Japan
Earthquake. Our Group is committed to continuous support forpeople and communities in the affected areas, and we sincerely
hope for their recovery at the earliest possible time.
Uncertainty is increasing around the world. A variety ofissues that threaten the sustainable development of theinternational community are becoming more and moreevident. Examples of these issues include: budget deficits
and public debt issues in developed countries; an imbalance
between the demand and supply of resources, energy,
food, water, etc. primarily due to rapid economic growthin emerging countries; droughts and other climate change
issues as a result of global warming; poverty and infectious
diseases; political unrest in the Middle East, Africa and othernations; and many more. As the globalization of the economy
advances, private corporations should assume greater
responsibilities and play a larger role in finding solutions to
the issues shared by all the people of the Earth.
Under these circumstances, the Sumitomo Corporation

Japan has faced extremely difficult times in its history, such

Group launched a new medium-term management plan for FY

as the reconstruction period after WWII and the oil crisis. And

2011-2012, “f(x)” (f-cross), in April 2011. We will carry on withour country has successfully overcome those challenges. At

the basic policies and measures adopted under our previous

the Sumitomo Corporation Group, we also went through thoseplan with a view to the next 10 years, “FOCUS’10”—represented

periods, asking ourselves what roles and functions we shouldby the “f” in “f(x)”—and at the same time undertake theplay as a good corporate citizen, anticipating future change andexecution—whence the x—of our business model innovation,

upgrading our business to stay relevant to society. In doing so,based on a proper understanding of the true nature of the

we have grown together with Japanese society—and ultimately

various societal challenges that we confront in various businessglobal society. As a global citizen, we will continue to use ourfields. In doing so, every single member of our Group will work

strengths to deliver new and greater value together with our

together with our partners to achieve cross-boundary growthpartners and many other people around the world, aiming toacross regions, generations, and organizations.

build a better and more sustainable society.

For the Sumitomo Corporation Group, a globalorganization that constantly stays a step ahead in dealing with

October 2011change, creates new value, and contributes broadly to society,
our CSR means simply following our Management Principles:“To achieve prosperity and realize dreams through soundSusumu Katobusiness activities.”

President and CEO

Report on Responsibility & Sustainability 20112

Message from the Chair of the CSR Promotion Committee

How We See CSR in the Sumitomo Corporation Group

Masayuki Doi
Director
Managing Executive Ofﬁcer
General Manager
Corporate Planning &Coordination Group

How we see CSR in the Sumitomo
Corporation GroupAt the preamble to the Management Principles, the Sumitomo
Corporation Group states its corporate vision as “We aim to bea global organization that constantly stays a step ahead in
dealing with change, create new value, and contributes
broadly to society.” And the phrase “To achieve prosperity andrealize dreams through sound business activities” follows as
the corporate mission.
For the Sumitomo Corporation Group, CSR means
promoting responsible corporate activities by placing prime
importance on integrity and sound management with utmost
respect for the individual and fulﬁlling our corporate mission to
become the ideal organization set out in the vision; in otherwords, translating our Management Principles into speciﬁc
actions and outcomes through our business activities andsocial contribution activities. We achieve prosperity and realize
the dreams of our stakeholders by playing our role as acorporation in solving social issues and ultimately building asustainable society. This is our mission in society and thefundamental basis of our CSR.
Underlying the idea is the principle to create new value forthe sustainable growth of society and the Group. We
accomplish this by building closer relationships with various
stakeholders across the whole Group, correctly understandingsocial issues and strategically planning our business activities
to solve those issues.
Based on these ideas for CSR, the Sumitomo Corporation
Group will continue pursuing the sustainable growth of society
and our Group based on our Management Principles.

Efforts to enhance our CSR practices
The Sumitomo Corporation Group operates its businessglobally, building a wide variety of value chains in many regions
and business ﬁelds. Close collaboration among our sevenbusiness units and our regional organizations in 138 locations
across 65 countries around the world makes our successful
global operations possible.

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Report on Responsibility & Sustainability 2011

Our Group strives to help create a better society bycreating and delivering new value. We aim to gain a proper
understanding of the true nature of the various societal
challenges that we confront in various business ﬁelds andidentify the most effective ways to use our strengths toaddress them, while implementing solid governance practices.
We believe that we will be able to contribute to the sustainable
development of society and achieve our own sustainablegrowth to a greater extent if our social value creation has moresigniﬁcant meaning and the social issues we intend to address
are more urgent and have broader implications. This belief isconsistent with the approach to social corporate responsibility
under ISO 26000 released November 2010.
Earlier this year, we took a new measure to enhance our
CSR practices even further. We conducted individualinterviews with our representative directors, who are also
general managers of our seven business units that fulﬁll oursocial responsibilities through our business operations. Basedon the results of the interviews, this 2011 report includes thesocial value creation charts, which offer a summary of eachbusiness unit’s analysis of the social and environmental
context, our goals for social value creation to achieve throughits business activities, and our capabilities to provide solutions
the business unit can demonstrate toward its social value
creation goal.
We hope the social value creation charts of our sevenbusiness units will help you gain a more comprehensive pictureof our CSR practices through our various business operations.
October 2011

Please refer to the following websites on our Corporate
Governance and Management Principles:
Corporate Governancehttp://www.sumitomocorp.co.jp/english/company/governance/index.html
Internal Control and Internal Audits / Compliance /Risk Management / Human Resources Management
http://www.sumitomocorp.co.jp/english/company/management_policy/index.html
Environmental Management
http://www.sumitomocorp.co.jp/english/
society/environment/env_policy.html

Major CSR Promotion Activities
The “Aritai” Project

CSR Workshop

The Sumitomo Corporation Group will mark its 100th anniversary in
2019. In our “Aritai” Project last year, we held workshops to discusseach organization’s ideal image of its business for the next 10 years,
namely, what we “want to be” (the meaning of “aritai” in Japanese)
in a decade, and the actions necessary to realize this ideal image
from three key perspectives: global power structure, industrial
structure and our expected role as an integrated trading company.
The workshops were participated in by team leaders andother employees in equivalent positions, who play a central role in
the frontline operations of the Group’s 25 divisions and regional
units in Japan and abroad, as well as general managers of thosedepartments, divisions, and business units. The participants held
in-depth discussions regarding how their organizations andbusinesses should be in 10 years’ time and what “growth stories”
and roadmaps they should follow to reach those respective goals.
The results of the workshops were made visible in a uniﬁed format
and shared across the entire Group.
After the completion of this project, we will continue this action of
making visible and sharing long-term ideal images on the front lines
under our new medium-term management plan, “f(x)” (f-cross).

Following 2009, we held a series of CSR workshops inNovember and December 2010 to provide employees with anopportunity to better understand what CSR means to theSumitomo Corporation Group. In the workshops, participants
discussed how best we should integrate CSR practices into
our business activities, particularly in connection with oursocial value creation.
A total of 44 participants joined the workshops from eachbusiness unit and regional unit and chose a real businessproject of each to review
the value of theirbusinesses from theirstakeholders’ point ofview. In the case study,
they also examined
processes to develop
new partnerships withstakeholders and toredesign and create new
CSR workshop
business models.

Please refer to the following websites on:
The Sumitomo Corporation Group CSR Action
Guidelines for Supply Chains
http://www.sumitomocorp.co.jp/english/
society/sccsr/index.html

Support for the UN Global Compact
http://www.sumitomocorp.co.jp/english/
society/global_compact/index.html

Our response to the Great East Japan Earthquake
We would like to extend our deepest condolences andsympathy to those who were affected by the Great East Japan
Earthquake in March 2011.
Sumitomo Corporation took an immediate response to thedevastating earthquake and tsunami by launching an
emergency response team headed by the President & CEO.
Under the team, we promptly conﬁrmed the safety status of
our Group’s employees, started relief efforts, checked thestatus of our business partners and clients, provided support
for them and took other necessary measures.
Fortunately, it was conﬁrmed that all the employees of ourgroup companies in the affected area were able to survive thedisaster safe and sound, although our Group’s ofﬁces andother facilities have suffered some damage.
In the wake of that calamity, the Sumitomo Corporation
Group wasted no time in making concerted efforts to collectand deliver relief supplies to the devastated areas andprovided ﬁnancial contributions. In addition to this emergency

support, we are also committed to providing humanitarian
support and support for industrial reconstruction in the region
over a long period of time. We have been thinking how best
we can provide support by using our strengths and extensive
business network and geographical reach as an integrated
trading company, and turning the conclusion reached into
speciﬁc actions.
Examples of our support for industrial rehabilitation
efforts include sponsorship of the project “Signal of Hope”
to facilitate early recovery of ﬁshing ports and thereby
resumption of ﬁshing operations in the Tohoku region. As
humanitarian support, wehave been engaged invarious activities under ourvolunteer programs thatwere launched based on
the needs in thedisaster-struck region andour employees’ will.

We will continue to release announcements on our response to the Great East Japan Earthquake on the following website:
http://www.sumitomocorp.co.jp/english/announcement/atten.html

Report on Responsibility & Sustainability 20114

Growing Together: Making the greatest use of
our value-creation capability
Davis: Mr. Kato, when you made a commemorative speech tocelebrate the centennial anniversary at Tsingua University* in
China this April, you used the phrase “Growing Together.” I was
impressed with the phrase and your idea. Could you elaborate
more on this?

Special Dialogue

Kato: I first used the phrase “Growing Together” in my New
Year’s speech to our employees. I used it as a fundamental
idea for sustainable growth. Sumitomo Corporation is first andforemost a trading company. That means we never work alone in
our creative business. We cannot carry on our business without alarge number of partners, not to mention our customers. If we areto keep growing further, it is not enough that we should grow on
our own. We need our partners to grow too, wherever they are

Each and every employee working in cooperation with all ourpartners to build a better societyWith All Our Partners across Regional, Generational andOrganizational Boundaries
Now a Japan’s integrated trading company with more than 90 years of history, Sumitomo Corporation has beenleading the Japanese business scene. In that period, we have consistently grown and transformed ourselves tokeep offering new value in changing times. While we have already faced with global-scale challenges concerning theenvironment, energy, food, water and other issues, the massive scale of the earthquake and tsunami this year broughta new, unprecedented level of challenges to Japan. How can the Sumitomo Corporation Group use its integrated
corporate strength in value creation to make a responsible contribution in such a world? How can we build the future?
In the following dialogue, Professor Scott Davis of the College of Business at Rikkyo University and Susumu Kato,
President and CEO of Sumitomo Corporation, discuss the Sumitomo Corporation Group’s ideas on building asustainable society and identify the direction it should follow in pursuing the creation of new value.

Susumu Kato
President and CEO

5

Report on Responsibility & Sustainability 2011

located in the world. This is the idea of “Growing Together” that I
wanted to address.
Davis: That is a great phrase that expresses an important idea.
But I believe that it is not a totally new idea. Rather, it should be
the basic philosophy of all trading companies.
Kato: That’s right. As stated in our Management Principles,
our basic idea is to “constantly stay a step ahead in dealing
with change and create new value.” The value we create must
be recognized as valuable by our customers and partnercompanies. In order to create value that is recognized by otherorganizations, we need to have accurate understanding on
what is needed at the current time. Again, the idea of “Growing
Together” serves as a base. In my speech at Tsingua University, I
wanted to address the idea of “Growing Together” for the people
from that prestigious academic institution with its long history.
Davis: I see. To me, corporations seem to be divided into
two groups. While one group of companies tries to create
value from a long-term view, the other group places focus on
acquiring existing assets—value created by others—from ashort-term perspective. Of course, both of these approaches
are necessary and it is important for companies to keep theseapproaches in balance. What is your idea on this, Mr. Kato?
Kato: Creating new value and acquiring existing assets sharesome aspects, but they are not the same. When creating newvalue, we seek value that can be recognized as valuable by ourpartners. Such value is beneficial to both parties and makes acontribution to society. How much of a contribution we maketo society with our new value and how we do it will directly
affect our own business achievements. So, value creationis undoubtedly important. But we also carry on business byacquiring and using existing assets. What is important whenusing an existing asset is to multiply its value. The success of
this approach depends on how much creativity and integration
we can employ in the project.
Davis: In other words, when using a wide range of capabilities
with a clear vision, value creation and value acquisition become
one. And the idea of “Growing Together,” or the idea of“coexistence and co-prosperity,” plays a role in this stage, too.

* Tsingua University: Established in 1911, Tsingua University is one of the mostprestigious universities in China. Since 2007, Sumitomo Corporation has been offeringcourses bearing its company name.

Developing our integrated corporate strength, thecore competence of Sumitomo Corporation Group
Davis: Creating new value requires many different capabilities.
You’d need good marketing skills to know the needs of society andproduction capabilities to develop a new market. You also have tohave a good vision to successfully take the initiative in the market.
Kato: Exactly. We cannot survive in the coming times without
such integrated corporate strength. Therefore, it is very
important to be ready to take action and try new things before
being told. To this end, we started the “Aritai” Project* as acompany-wide project last year, based on the idea that we haveto encourage employees to be more proactive.

Professor Scott Davis
College of Business, Rikkyo University

Report on Responsibility & Sustainability 20116

Special Dialogue
With All Our Partners across Regional, Generational and Organizational Boundaries

Davis: Integrated corporate strength has been stressed as thecore competence of the Sumitomo Corporation Group. It has avery profound meaning and there are more than enough reasons
to emphasize the importance of this as an advantage to Sumitomo
Corporation Group. Meanwhile, it is also rather difficult to understandthe real value of this concept. To tell you the truth, I had not fully
understood the concept until I learned about the “Aritai” Project.
Kato: The “Aritai” Project served as an opportunity to motivate
each employee to plan a new direction for business and propose
the idea in our company. How did the explanation of the “Aritai”
Project help you to understand our integrated corporate strength?
Davis: The ideas of “Aritai” (the long-term ideal images oforganizational units at every level of the Company, or what theywant to be) vary a lot among different organizational units. There
are many kinds of “Aritai” depending on the region in the world or
the business field the organizational unit deals with in its business.
But when all the ideas are combined, they make a perfect portfoliowith different fields and regions evenly distributed in good balance.
I see such collaboration and cooperation among organizational

units serving as the key and a basic premise for the integrated
corporate strength of the Sumitomo Corporation Group.
Kato: I am very glad to hear that. In fact, that is one of myplans. If the results of discussions in each organizational units
are shared with other units, including overseas units, throughout
the Company globally, they can stimulate other units, serve
as a hint for new ideas, or give the opportunity to start a newcollaborative project among different units. If that happens, theintegrated corporate strength we have long developed can befurther enhanced and more effectively used.
Davis: Now I understand why many people at Sumitomo
Corporation often mentioned the activities of otherorganizational units when I talked with them before. They arealways interested in what is going on in other units and think
about the future of the Company globally, paying attention to
the balance of business companywide. The idea of “Growing
Together” has already been fully working within the corporationand making stable growth possible.
Kato: That’s right. The boundaries—between countries,
industrial fields and companies—are becoming lower in every
level in the current world. It doesn’t make sense to build
boundaries between our organizational units at any level,
including business units, regional units, corporate groups,
divisions and departments within a company. If we are tounderstand the needs of the age in a timely manner andcreate new value that effectively meets the most current
needs, different organizational units must cooperate and sharethe same vision. The idea of creating new value by taking
advantage of different strengths is very important. In doing
so, we can expect further development of our advantage—
integrated corporate strength. That is exactly what we
expressed in the phrase we used in the new medium-term
management plan, “cross-boundary growth.”* The “Aritai” Project: Please refer to p. 4.

Creation and Provision of Diversiﬁed
Values to Meet Social Need

“Integrated Corporate Strength,” the corecompetence of the Sumitomo Corporation Group“Integrated Corporate Strength” is our driving force in market competition, and the core competenceof the Sumitomo Corporation Group. It consists of a business foundation and diverse functions thathave been developed through the long history of the business activities of the Group.
Our business foundation comprises the integrity of Sumitomo Corporation Group; its global
network, which covers every corner of the world; global relations with more than 100,000 partnercompanies worldwide; and intellectual capital, including superior human resources.
On this business foundation, we have built various functions in different areas, such as risk
management, business development, market intelligence & information gathering and analysis, IT
solutions, logistics solutions, and ﬁnancial services.
We integrate this business foundation and our functions strategically and organically to meet awide range of needs and to create new value. This capacity is what we mean by our “integrated
corporate strength.”7

Report on Responsibility & Sustainability 2011

Strategic and Organic
Integration
Logistics
SolutionsMarket Intelligence &Information Gatheringand Analysis

Business
Development

IT Solutions
Risk
Management

Financial
ServicesCont
inual Enhations
ncement of Func
Integrity
Global Network

Co

Intellectual Capital
Global Relations

ntin
ion
dat
ual S
Foun
trengthening of the BusinessFor Sustainable Growth—From “Focus’10” to “ f(x)” (f-cross)
The Medium-term Management Plan for fiscal 2009 and 2010

FOCUS’10 “A Growth Scenario on a New Stage”
Fundamental Principles
Promote medium/long-term growth by enhancing ourvalue-creation capability while reinforcing soundness
and efﬁciency
Promote company-wide growth by leveraging thediversity and strengths of our businesses

The Medium-term Management Plan for fiscal 2011 and 2012

f(x) (f-cross)“cross-boundary growth throughbusiness model innovation”

Basic Policy
We will carry on with the basic policies and measures adopted under
our previous plan with a view to the next 10 years,
FOCUS’10—whence the f—and at the same time undertake theexecution—whence the x—of our business model innovation. We aredoing this to meet the demands of the times based on our Corporate
Mission Statement, which define value creation as our corporate
vision, with the aim of achieving growth together with all our partners
across regional, generational, and organizational boundaries.

The four key actions under “f(x)”1. Make visible and share long-term ideal images on the front lines.
3. Enhance our integrated corporate strength on a global basis.

Medium-term Management Plan for further
growth depends on a future-oriented
development of human resources
Davis: I learned that the theme of the new Medium-termManagement Plan that started in fiscal 2011 is f(x)(f-cross)and its key phrase is “cross-boundary growth.” Could you
explain more about your intention in this phrase?
Kato: In “FOCUS’10,” our 2009–2010 Medium-termManagement Plan, we aimed at writing “a growth scenario
on a new stage” with a view to the next 10 years. In f(x), we
will carry on with the basic policies and measures adopted
under our previous plan and undertake the execution of ourbusiness model innovation to achieve growth together with all
our partners across regional, generational, and organizationalboundaries, or what we call “cross-boundary growth.”
Davis: I believe the growth across the three types ofboundaries you mentioned includes not only organizational
growth but also the growth of each employee.
Kato: That’s right. Growth of each employee is the basic andprimary premise, and the paradigm shift we have recently
experienced is the best opportunity for us to prove it. For
example, “growth across regional boundaries” can be translated
into development of human resources so that our employees
will act with a global point of views across regional boundaries
in order to respond to the globalization that expands the market
from the developed countries to emerging countries.
Davis: Now that the regional boundaries have become lower,
it is a good opportunity for corporations to develop humanresources with global views. Then what do you see in the next
key phrase, “growth across generational boundaries”?

2. Accelerate strategic resource management.
4. Strengthen human resources management on a company-wide level.

Kato: “Growth across generational boundaries” means that thecurrent generation, who are responsible for the current growth,should also recognize their responsibility for the growth of thenext generation. This is essential for the sustainable growth of
the Group. We want the Sumitomo Corporation Group to be agroup that sustains, keeps growing and receives respect fromsociety not only for the next five or 10 years, but for 50 years
or 100 years to come. To achieve this goal, teamwork acrossgenerational boundaries to achieve cross-generational growth isvery important.
Davis: I see. That is, growth of the Group cannot be
expected without the growth of younger generations,because they are the ones who will decide the future of theGroup. And does “growth across organizational boundaries”
mean cooperation across organizational units as we havejust discussed?
Kato: Yes, it does. But it does not end with cooperation acrossthe organizational units within the Company. We need people
who can coordinate a great variety of organizations, including
the different units in the Company and partner companies
globally, or someone like a “concert master” in a symphonyorchestra, if you will. That’s what we aim at in our humanresources development. In order to implement large scale
projects, such as social infrastructure development, we haveto lead the project to success by ensuring that many partners
with different functions cooperate together and that we utilize
the strength of each partner in the most effective way. What
are necessary in such process are continuous efforts and theattitude of “Growing Together.”
Davis: To create larger value, it is important to have theability to maximize the potential of each individual and all theothers involved.

Report on Responsibility & Sustainability 20118

Special Dialogue
With All Our Partners across Regional, Generational and Organizational Boundaries

Kato: That’s right. If you have these abilities, your growth
will be accompanied by the growth of your partners. And
you can solve the issues facing society through successful
accomplishment of the project and create a better society.

What an integrated trading company can dofor society after 3.11
Davis: Giving solutions to social challenges through businessactivities is a major social responsibility for integrated trading
companies. You are expected to play a significant role in theissues the world is facing currently, such as environmental andenergy conservation, food shortage, poverty and hunger. In
Japan, the devastating earthquake and tsunami of March 11th,
and the disaster-triggered nuclear plant accident, wreaked
massive damage on the whole society. How do you think the
Sumitomo Corporation Group can deal with this situation?
Kato: First, I would like to express my deepest condolences
and sympathy to all the victims of the earthquake that occurredin March. The Sumitomo Corporation Group will continue giving
the maximum support available to the people in the affectedareas for as long as possible. We organized a Long-term
Recovery Support Promotion Team to implement various formsof support and examine specific methods of contribution.
Davis: What do you think are the prospects for Japanesesociety in the post-3.11 era?
Kato: Japan after the earthquake impressed me in two ways.
First, I was greatly moved by the patient recovery efforts of thepeople in the affected areas. They are working hard to recoveramid such devastation. At the same time, people in other areasof Japan demonstrated strong willingness to cooperate to help
people in the afflicted areas, which also impressed me. Also, I
was astonished and touched by the support and help extended
to Japan from more than 160 countries and regions all over theworld in a variety of forms. This proves that people in the world
have a great interest in Japan and they hope for mutual growth
between their countries and Japan. These two encouraging
forces make be believe that Japan will be able to survive andrecover from the disaster, using its wisdom and knowledge.
Davis: The calm attitudes and disciplined behavior of Japanesepeople during the emergency impressed the whole world. I
was impressed, too. On the other hand, what concerns meis the pessimistic attitude about the future that has prevailed
throughout Japanese society since the disaster.
Kato: To clear the pessimistic clouds overhead, we need anattitude to challenge the future and a solid determination to
make society better. To invigorate the country, we have toencourage the young to develop their skills so that they cangive back to society.

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Report on Responsibility & Sustainability 2011

Davis: And I believe that integrated trading companies canprovide a good environment in which young people can develop
value creation capabilities.
Kato: Yes, by working in an integrated trading company like
Sumitomo Corporation, young people can have the opportunity
to work and develop ideas for creating a new business modelthat is needed by society. Also, since integrated trading
companies have many associated companies and operatemany different kinds of businesses, even young employees
can have the chance to get involved in the managementof an associated company. In this respect, an integrated
trading company can offer a lot of opportunities for young
employees to grow as business professionals. We will takethese opportunities to develop the capabilities of our young
members, not only to support the sustainable development of
the Sumitomo Corporation Group, but also to support the futureof Japan and build a more prosperous society.

For the Sumitomo Corporation Group,
pursuing business means fulfilling CSR
Davis: Sumitomo Corporation’s efforts to develop humanresources for the future are not limited to Japan. You areactively carrying out human resources development programs
overseas, particularly in China and other parts of Asia.
Sumitomo Corporation offers courses at Tsingua University andruns scholarship programs*.
Kato: As a global company, we naturally work on humanresources development in every part of the world. Of course
it would be great if young people who studied through ourprograms end up working with us at the Sumitomo Corporation
Group, but that is not our primary intention. We believe that it
would mean a lot for society as a whole if young people whotake one of the courses we offer or use our scholarship to study
will play a role in the development of their own country.

Davis: I agree with your ideas. If a region is developed
industrially, it means new business opportunities will emerge
in the region. And more importantly, it is valuable for local
communities to have those educated young people who arewilling to work as members of the community.
Kato: We believe that locally oriented human resources
development is important not only in terms of educational
support but in business practices, too. To obtain successful
results in business projects, we have to produce benefits bothfor ourselves and for the local community. In other words, wehave to build a win-win relationship with the local community.
The benefits we bring to the local community must be morethan temporary gains. We must help build a foundation onwhich the local community can keep growing by themselves in
the future.
Davis: I see. So the Sumitomo Corporation Group sees it
as more important to develop human resources that will
support local industries in the future than to bring short-term
financial benefits, because it will mean continuous benefits
to the local communities.
Kato: Yes. Some people mistakenly believe that a social
contribution means donation, even at making a loss, butthat is not a true contribution. That kind of charity cannot
last long, nor will it lead to growth of those supported. Truesupport means to help people to become self-supportive byimproving their capabilities.
Davis: In addition to your own growth, the growth ofyour partners counts. That is exactly what you mean by“Growing Together.”

Kato: Yes. For example, the natural resources development
projects that we are operating in several parts of the world are
not only about mining and exporting ore or mineral crystal.
We design a business model where more value can be added
to the product. In order to add value to the product, we needadequate technologies and industries. When technologies andindustries are developed, jobs are created. The knowledge,
skills and business knowhow people gain through their jobs will
become a foundation that will bring growth to industry in thatcountry. Only after completing these processes can we gain theunderstanding and trust of the local people.
Davis: That is a great contribution you make. In other words,
when the Sumitomo Corporation Group pursues its businessactivities, it makes a direct social contribution. For the
Sumitomo Corporation Group, the pursuit of business means
fulfillment of CSR.
Kato: Yes, that is what we intend to do. Otherwise, we cannot
make a long-term social contribution. Business operations andCSR should not be two separate acts. Rather, CSR should be
an extension of our business practices. Or CSR and businesspractices should mean one and the same thing.
Davis: That is very encouraging. I am very pleased to havelearned about CSR at the Sumitomo Corporation Group.
Thank you very much.
Kato: Thank you very much.

* Scholarship programs: Sumitomo Corporation established the Sumitomo Corporation
Scholarship program in 1996 to provide scholarships for university students in China,
Vietnam, Indonesia, Thailand and other Asian countries as a means to support humanresources development for the future of the developing countries in Asia.

Report on Responsibility & Sustainability 201110

Sumitomo’s Business Philosophy / Sumitomo Corporation Group’s Corporate Mission Statement

Sumitomo Corporation Group’s Corporate Mission Statement
Founded on the Sumitomo’s Business Philosophy
Sumitomo has always been sincere in conducting its business, contributing to achieving prosperity and realizing the dreams ofour business partners, our society and all other stakeholders. As a result, we have built up trust, and this has helped us to develop
new businesses and create a cycle of positive growth. The Management Principles and Activity Guidelines of the Sumitomo
Corporation Group are founded on Sumitomo’s business philosophy that has been passed on for 400 years.

The Founder’s Precepts“Monjuin Shiigaki”
The Founder’s Precepts “Monjuin Shiigaki”
is a letter sent by Masatomo Sumitomo(1585–1652), the founder of Sumitomo anda religious man, to his family members in his
old age. It succinctly describes the guiding
principles of his business operations.
At the beginning, it urges the reader“Not only in matters of business but inall situations, make efforts with deepest
gratitude in every aspect.”
The precepts also include suchteachings as “When goods are offered to
you below the normal market price, underno circumstances should you ever purchasesuch goods, for their origins are unknown
and they are probably stolen property,”“Never give shelter to a stranger, no matter
who it might be; also, never take a stranger’s
goods into your custody, no matter how
innocent they might appear” (these acts
were prohibited by the government), and“No matter what someone might say toyou, never lose your temper or speak harshwords; politely explain your position until
an understanding can be reached.” These
teachings have been handed down and form
the base of Sumitomo’s business philosophy.
They are still seen in today’s principles, suchas “no pursuing easy gains” (i.e., only making
a profit on a fairly priced transaction that canbe explained with confidence), “compliance”
and “integrity and sound management.”

Monjuin Shiigaki(Source: Sumitomo Historical Archives)

11

Report on Responsibility & Sustainability 2011

Business Principles

Saihei Hirose, Sumitomo’s ﬁrst
Director-General (Source: Sumitomo
Historical Archives)

Rules Governing the Houseof Sumitomo
The Besshi Copper Mine (opened in1691) encountered many adverse
conditions during the Meiji Restoration(in the late 1860s), when the price ofcopper fell, operating costs increased
sharply due to rising prices of rice andother items, and loans to the feudal lords
were uncollectable. At one point, it wasalmost forced to sell out. Saihei Hirose(1828–1914), manager of the mine wholater became Sumitomo’s first DirectorGeneral, acted boldly and modernized theoperation with Western style technologies.
Hirose’s operational reforms saved themine and its community.
In 1882, when serving as DirectorGeneral, Hirose formulated the Rules
Governing the House of Sumitomo,
which consisted of 19 sections and 196
articles, to reflect the business philosophy
the family had followed over its 250year history. The Rules clearly illustrate
Sumitomo’s corporate philosophy in Article
3 in Section I: “We shall practice soundmanagement in order to cope effectively
with the changing times. Under nocircumstances, however, shall we pursue
easy gains or act imprudently.”

In 1891, the Rules Governing the Houseof Sumitomo were separated into twoparts, the family code (corporate rules) andthe family constitutions (the principles ofthe family head), to distinguish ownershipfrom business operations. On thatoccasion, the principle of “integrity” wasintroduced and placed at the beginningof the Rules Governing the House of
Sumitomo with the principle in Article 3,
which then together became the Business
Principles. In 1928, while Sumitomo’s
business expanded into a variety of areas,
including the steel, machinery and chemicalindustries, Sumitomo’s Business Rules
were established. The two articles of theBusiness Principles have been passed
on for generations and still serve as thecorporate rules of all group companies.
Article 1. Sumitomo shall achievestrength and prosperity by placing prime
importance on integrity and soundmanagement in the conduct of its business.
Article 2. Sumitomo shall manage its
activities with foresight and flexibility in order
to cope effectively with the changing times.
Under no circumstances, however, shall it
pursue easy gains or act imprudently.

Business Principles

Sumitomo Corporation Group’s
Corporate Mission Statement

Sumitomo Building Annex, where Nippon
Kensetsu Sangyo’s head ofﬁce was located

Sumitomo Corporation
Management Charter
Osaka North Harbour Co, Ltd., thepredecessor of Sumitomo Corporation, wasfounded in 1919. Later, after World War II,
the company changed its name to Nippon
Kensetsu Sangyo Co, Ltd., starting a newlife as a general trading firm. In 1952, when
the company was incorporated with thecurrent name, the Business Principles werechosen as the management philosophy for
all corporate operations and the foundation
to sustained growth.
While Japan’s economy was growing
rapidly after the war, environmental pollution,
inflation and other public issues started
to arise. Business corporations and theircodes of conduct were challenged to makeclear the relationship between the national
government and corporations, as well as
between citizens and corporations. To
respond to this, Sumitomo Corporation
laid down the Sumitomo Corporation
Management Charter, an original charter
that consists of the Basic Principles ofManagement and the Operational Guidelines.

In the early 1990s, the bubble burst, drastic
the Management Principles, “To achieve
appreciation of the yen continued, and theprosperity and realize dreams throughJapanese economy entered a long period ofsound business activities” describes our
low growth. Sumitomo Corporation had nocorporate mission, while the second item,
choice but to re-examine the status quo of its“To place prime importance on integrity
business transactions and risk management
and sound management with utmost
methods. Against this background, there wasrespect for the individual” shows our
growing management recognition that the
management style, and the third item,
company needed to revert to Sumitomo’s“To foster a corporate culture full of vitality
business philosophy, which had served as theand conducive to innovation” portrays ourbase of Sumitomo’s business operations andcorporate culture.
the driving force in overcoming many crises
The Activity Guidelines were generated
through the last 400 years. This recognition
based on these principles to guide
further heightened in 1996, when the copper
employees in their daily business operations.
incident occurred, leading
to the 1998 establishmentof Sumitomo Corporation
Group’s Corporate
Corporate Vision
Mission Statement.
We aim to be a global organization that constantly stays a
The Corporate
step ahead in dealing with change, creates new value,
Mission Statement,
and contributes broadly to society.
consisting of Management
Principles and Activity
Management <Corporate Mission>t5PBDIJFWFQSPTQFSJUZBOESFBMJ[FESFBNTGuidelines, was compiled
Principles
through sound business activities
based on Sumitomo’s<Management Style>business philosophy,t5PQMBDFQSJNFJNQPSUBODFPOJOUFHSJUZBOE
sound management with utmost respect for
which has been nurtured
the individual
throughout the 400<Corporate Culture>
years of Sumitomo’st5PGPTUFSBDPSQPSBUFDVMUVSFGVMMPGWJUBMJUZBOE
conducive to innovation
history, and today’s global
perspective, in a simple· To act with honesty and sincerity on the basis of
Activityand systematic way.
Sumitomo’s business philosophy and in keeping
Guidelines
with the Management Principles
The preamble to the· To comply with laws and regulations while
Management Principles
maintaining the highest ethical standards
shows the corporate· To set high value on transparency
and openness
vision: “We aim to be a
· To attach great importance to protecting the
global organization that
global environment
constantly stays a step
· To contribute to society as a good
corporate citizen
ahead in dealing with· To achieve teamwork and integrated corporatechange, creates newstrength through active communication
value, and contributes· To set clear objectives and achieve themwith enthusiasm
broadly to society.”
The first item in

Corporate Mission Statement

Report on Responsibility & Sustainability 201112

Company Information
Company Profile (As of March 31, 2011)
Company Name:
Sumitomo Corporation

Consolidated Shareholders’ Equity:
1,619.9 billion yen

Establishment:
December 24, 1919

Fiscal Year End:March 31

Number of Employees:
5,159 (64,886 including consolidated subsidiaries)

Number of Consolidated Subsidiaries:
576 (overseas: 434, domestic:142)

Headquarters:
1-8-11 Harumi, Chuo-ku, Tokyo 104-8610, Japan

Associated Companies (Equity Method):216 (overseas: 161, domestic: 55)

URL:
http://www.sumitomocorp.co.jp/english/

Total:
792 companies

Organization
General Meeting of Shareholders
Board of Corporate Auditors
Board of Directors

Business Units

Company-wide Committees*

Internal Auditing Dept.

Corporate Planning &Coordination Group

Human Resources,
General Affairs & Legal Group

Financial Resources
Management Group

Metal Products Business Unit

Transportation & Construction
Systems Business Unit

Infrastructure Business UnitMedia, Network & Lifestyle
Retail Business Unit

Mineral Resources, Energy,
Chemical & Electronics
Business Unit

General Products &Real Estate Business Unit

New Industry Development &Cross-function Business Unit

Domestic Subsidiaries andOffices

Overseas Subsidiaries andOfficesPresident and CEO,
Executive Officers

Corporate Group* Company-wide Committees: CSR Promotion Committee, Global Environment Committee, Internal Control Committee, Compliance Committee, Information Disclosure
Committee, IR Committee, Human Resources Development Promotion Committee, Work-Life Balance Promotion Project Team, Value Integration Committee, Loan and
Investment Committee, Medium-term Management Plan Promotion Support Committee, ICT Committee,and others.

Consolidated Financial Highlights(Billions of yen)

Results ofOperations

Financial Positionat Year End

RatiosFiscal 2008
U.S. GAAP

Fiscal 2009
U.S. GAAP

U.S. GAAPIFRSGross Profit

934.5

935.2

779.5

863.5

864.0

Net Financial Income(27.6)(21.5)(12.8)

(5.6)

(8.1)

Equity in Earnings of Associated Companies, net

56.9

90.0

76.1

92.2

95.6

Net Income

238.9

215.1

155.2

202.7

200.2

Total Assets

7,571.4

7,018.2

7,137.8

7,269.3

7,230.5

Shareholders’ Equity

1,492.7

1,353.1

1,583.7

1,619.9

1,570.5

Interest-Bearing Liabilities (net)3,247.6

3,186.8

2,781.8

3,041.8

3,056.3

Shareholders’ Equity Ratio (%)

19.7

19.3

22.2

22.3

21.7

ROE (%)

16.1

15.1

10.6

12.7

12.9

ROA (%)

3.0

2.9

2.2

2.8

2.8

Debt-Equity Ratio (net) (times)

2.2

2.4

1.8

1.9

1.9

Note: For more detailed information on financial issues, please refer to our Annual Report.

http://www.sumitomocorp.co.jp/english/ir/

13

Fiscal 2010

Fiscal 2007
U.S. GAAP

Report on Responsibility & Sustainability 2011

Project Report 1

Project
ReportTo achieve cross-boundary growth
together with all our partners
across regions, generations
and organizations

p.15

Building a Telecommunications
Infrastructure in Mongolia to Contributeto its Socio-economic Development

Project Report 2

p.19

Supporting Healthy and Enjoyable Meals
for the World in the New Age

Project Report 3

p.23

Operating a Wide Range of Businesses
to Pursue Sustainable Energy Supply

Report on Responsibility & Sustainability 201114

Project Report1

Building a Telecommunications Infrastructure
in Mongolia to Contribute to its
Socio-economic Development
Mongolia, a country with abundant natural resources, has been growing
rapidly in recent years, buoyed by rising demand for resources in concert
with rapid economic growth in the emerging countries. The country’s grossdomestic product (GDP) per capita increased significantly from US$ 500 in
1996 to US$ 2,200 in 2010.
Until the mid-1990s, the vast country was a sparsely populated landthat did not have a good telecommunications infrastructure. The lackof this basic infrastructure for economic growth was taking its toll on
Mongolia’s development. In 1995, MobiCom Corporation (hereinafter‘MobiCom’), Mongolia’s first mobile phone operator, was established
as a joint venture between Sumitomo Corporation and its Japanese andMongolian partners and this has played a significant role in improving thetelecommunications infrastructure in the country. MobiCom offers a wide
range of telecommunications services, including mobile phone services, forthe sustainable development of Mongolian society.

15

Report on Responsibility & Sustainability 2011

YoshiakiBeninoNaohiroMiki

General Manager
Telecommunication
Business
Department

Assistant General
Manager
Power Energy
Solution Business
Department

Endeavoring to build a telecommunications
infrastructure in Mongolia that will bringsustainable development
Mongolia occupies an area almost four times the size of Japan,
and roughly 80% of the area is grassland. Some 2.8 million
people, including many nomads, live in this vast land. Except
for the nation’s capital Ulaanbaatar, there are few large cities in
Mongolia and the population is geographically dispersed, whichhampered the development of a telecommunications network.
The situation did not change even after the country moved toa market economy after the collapse of the Soviet Union in1990. Recognizing the need to develop a telecommunications
infrastructure for the economic development and the convenienceof people’s lives Mongolian government decided to develop a
mobile phone network—which does not require the installationof phone lines to connect households across the country—andannounced tenders for a mobile phone service license in 1994.
As a result of this, Mongolia’s first mobile phone
operator MobiCom Corporation was born in 1995. Sumitomo
Corporation owns a 34% stake in the company. We hadalready developed relationships of trust with the governmentand business community in Mongolia through our previous
participation in their telecommunications and broadcasting
infrastructure projects, including the supply of international
satellite telecommunications system equipment in 1992 andinternational switching systems equipment in 1993, as partof Japanese official development assistance (ODA) projects.
Leveraging such relationships with local stakeholders andbusiness expertise developed through those past projects,
Sumitomo Corporation and our Japanese and Mongolian
partners, KDDI Corporation (then Kokusai Denshin Denwa Co.,
Ltd.) and Newcom LLC, bid for the license. Newcom LLC is
Mongolia’s first private communications operator, establishedwith the aim of improving the telecommunications environment
in the country. Winning the bidding competition out of threegroups, our team obtained a license as Mongolia’s first mobile
phone service operator in September 1995.

Three MobiCom shareholders and their roles
Sumitomo Corporation
Corporate governanceCorporate planning
Supporting new businesses
Human resources support

KDDI Corporation
MarketingTechnological support
Offering know-how
Human resources support

Newcom LLC
Supporting the management team
Employee training
Local support
Human resources support

MobiCom Corporation

MobiCom Corporation Head Office“Back then, mobile phone penetration was only 3%, evenin Japan. Indeed, there was skepticism within our company
about the viability of a mobile phone business in Mongolia, acountry with a per-capita GDP of just US$ 500 in 1996. We
were told it would be premature to proceed with the plan.
Despite such internal concerns, we knew that a mobile phoneservice had substantial potential in the country, with cities
and villages scattered across a vast area, where no adequate
fixed-line phone network was in place. And more importantly,
it was obvious that developing a mobile phone network andother telecommunications infrastructures were essential for
Mongolia’s development. With the belief that any business thatis essential in developing local communities will succeed in thelong term, we decided to enter that market,” Miki recalled.

Promoting widespread use of mobile phones with anaggressive growth strategy
In March 1996, after a lot of preparatory efforts including theconstruction of base stations and local marketing activities,
MobiCom made its debut as the first mobile phone operator
in Mongolia.
“As a marketing effort, we worked with MobiCom staffs inhanding out pocket tissue advertising packets brought fromJapan, to promote name recognition of MobiCom among the
local population. We also conducted surveys, which included
questions such as ‘What calling rate would make you feel you
want to use a mobile phone?’” Miki explained.
Based on the market research results, MobiCom slashed its
calling rate in the first year of operation from the initial 35 cents
per minute to 21 cents. The company also lowered the deposit
charged to new subscribers. The new prices accelerated
expansion of MobiCom’s subscriber base, allowing the mobile
phone operator to achieve stronger-than-expected results.
For instance, the company’s fifth-year target of subscriber
population was met during the second year.
In 1998, MobiCom introduced prepaid calling plans. These
pay-as-you-go plans that do not require a deposit enjoyedgreat popularity and spurred the widespread use of mobile
phones in the country. When the new plans were rolled out, thecompany was overwhelmed with applications from thousandsof prospective subscribers every day. Prepaid calling plans havebecome the flagship of MobiCom’s service portfolio: 90% of its
customers use these plans.
A second mobile phone operator started operating in
Mongolia in 1999 and currently four companies are competingin the market. Supported by strong consumer confidence in
MobiCom, which contributed to ensuring that mobile phones
take root in Mongolian society as an industry pioneer, MobiCom

Report on Responsibility & Sustainability 201116

Project Report1

Building a Telecommunications Infrastructure in Mongolia
to Contribute to its Socio-economic Development

has been maintaining its leading position in the market. Now,
more than 90% of people in the country use mobile phones,
and over 50% of them are MobiCom customers. According to
Benino, people usually use the moniker “MobiCom” for theirmobile phones in general. As mobile phones have risen in
popularity, the MobiCom brand has become part of Mongoliansociety as mobile phones have been prevailed.
Mobile phones in Mongolia
Number of subscribers

Penetration rate

(Thousands of people)

(%)

3,000

100

92
84
2,400

80

67
1,800

60

46

2,510

1,200

40

2,249
1,763
600

20

1,195
0 0.04
1996

0.9

0
2007

2008

2009

2010

(Year)

Sources: World Bank (1996 to 2009)
ICTPA (2010)

Nurturing local industries under the slogan ofcoexistence and mutual prosperity
For MobiCom, seeking harmonious relationships with local
businesses and local society is one of the basic policies behind
its business operations, although it cannot avoid facing freecompetition in whichever market it operates on a commercial basis.
The mobile handsets business is one of genuine examples
how this policy is applied in an actual situation. MobiCom’s
mobile phone network is based on GSM, the world’s mostcommon network standard, which means that subscribers canaccess the network with any GSM-compatible mobile phone. In
A retail shop selling mobile phones in Ulaanbaatar

17

Report on Responsibility & Sustainability 2011

Prepaid service counter

fact, since MobiCom started its mobile phone operation, many
local businesses and entrepreneurs have opened mobile phone
stores that sell imported low-end and used handsets. Althoughthese vendors are by nature competitors of MobiCom, which
also sells handsets at its own stores, MobiCom has determined
to build a harmonious relationship with them, since they are thebusiness partners who are supporting the mobile phone service
business. As a result, MobiCom’s mobile services are now
sold through around 2,000 special agents and around 13,000
dealers, as well as in some 50 company stores. In other words,
MobiCom’s business has created a new industry, the mobile
phone handset retail business in Mongolia.
The public phone service is another new business.
MobiCom started its fixed wireless phone service, Wireless Local
Loop (WLL), in 2000. At a cost lower than the mobile phoneservice, this wireless telecommunications service has been wellreceived by corporate users. In addition, many commercial
businesses have used the WLL network to launch their own
public phone services at many locations in the urban area.
“Since WLL is a relatively low-margin business, MobiCom’s
board of directors, at one time, discussed whether or not thisservice should be continued. The conclusion they reached
was that as long as the service is truly needed, the company
must continue offering it. I believe that judgment has paved
the way for widespread use of this new telecommunications
tool supplementing the mobile phone service, leading to an
enhanced telecommunications system in Mongolia,” Miki said.
The growth of MobiCom itself, of course, has been
contributing to the economic and social development ofMongolia. At the present time, MobiCom generates revenues
equivalent to 3% of Mongolia’s GDP. It consistently ranks
among the largest tax payers in the country: third in 2009
and fourth in 2010. Starting with only 15 employees, thecompany has grown to employ more than 1,400 in eight groupcompanies. MobiCom Group has contributed to creating some
17,000 jobs, including employees at local contractors anddealers. MobiCom has also been listed among the most popular
prospective employers in Mongolian student surveys.
“Since the beginning, MobiCom has been delegatingdecision-making on daily operations to staff on the ground, while
decisions on major business issues, such as those involving
large-scale capital expenditures, have been made by the boardof directors. Under this longstanding policy, an increasing
number of high-caliber local employees have developed theskills and capabilities necessary as future MobiCom leaders who
can take over the company’s management responsibilities,”
Benino said.

Offering a wide range of high value-added
services as an integrated telecommunications
company group
With mobile phones attaining a high penetration rate and thematuring of the Mongolian economy and industry, MobiCom has
been aggressively diversifying its telecommunications services
since the mid-2000s. Additional service line-up include: a mobile
content distribution service which offers ring tones, wallpapers,
games, and other contents for mobile phones; operation of web
portal sites; and an Internet access service that offers wired andwireless access to the Internet using MobiCom’s optical fiber
and wireless broadband networks.
In October 2010, MobiCom launched another new service,mobile commerce, enabling users to conduct e-commercetransactions from their mobile phones.

“Given that few Mongolians have a bank account andthere are no common online banking systems in the country,
MobiCom’s mobile-commerce service, which allows users toshop and receive their salaries through their mobile phones, will
make Mongolian people’s lives more convenient and help tostimulate the country’s economic activities, I hope,” Benino said.
As you can see, MobiCom has been supporting thedevelopment of Mongolia by building its telecommunications
network, an indispensable social infrastructure, and delivering awide variety of value-added services. Leveraging our experienceand business know-how obtained through this integrated
telecommunications service provider, at Sumitomo Corporation
Group, we are planning to expand our telecommunications
business into the Far East, Central Asia, South East Asia andother areas around the world.
“Successful implementation of a social infrastructure projectrequires collaborating with a local partner who is truly passionate
about contributing to the development of their country. Our joint
venture in Mongolia is a good example. Without our good local
partner Newcom LLC, the JV would not have been able to growto the point it has today. Working together with local partners,
we will continue to operate our telecommunications businesses
around the world, which help to develop the countries andregions in a sustainable manner,” Benino said.

Stakeholder’s VoiceThe strong ties among the three shareholders from Japan andMongolia has made MobiCom’s success possible
Founded in 1993, Newcom LLC is the first private
telecommunications operator in Mongolia. We offer
telecommunications and other services to corporate clients,and support the management of MobiCom together with
Sumitomo Corporation and KDDI Corporation. Recently,
we have also started an airline business to contribute to thedevelopment of traffic infrastructures in Mongolia, which, justlike telecommunications infrastructures, are necessary for thecountry’s development.
I believe that the strong partnership between the threeshareholders of MobiCom is one of the main reasons why thecompany achieved a rapid growth during the 15 years since
it was established in 1996. While exchanging opinions in an

open and candid manner, the threecompanies have been able to reachMr. Boldbaatar
decisions unanimously at the general
Tserenpuntsag
shareholders’ meetings and the board
Chairmanmeetings. What brings us so closely
Newcom LLC
together is a strong, mutual passion to
make a positive contribution to Mongolian society throughthe development of telecommunications infrastructures. Thismutual goal must have nurtured mutual trust and built win-win
relationships. I hope the three shareholders will continue tobring their own individual expertise and insights together for
further growth of MobiCom Group and further development ofMongolian society.

ColumnSchool Lunch Project for students from financially underprivileged families
Despite rapid economic growth in Mongolia, many households are still facing economic difficulties.
In fact, there are many students who cannot bring a lunch to school for financial reasons.
To provide a better learning and living environment for students in the country, MobiCom started
to provide nutritionally balanced boxed lunches for free at 13 public elementary schools in 2006. The
program, modeled on Japan’s school lunch system, has produced positive results: improved healthand higher attendance rates for students. Inspired by these results, the Mongolian government haslaunched a school lunch program in all elementary schools in the country, and is planning to expand
the program into junior high schools and eventually senior high schools in the future.

Report on Responsibility & Sustainability 201118

Project Report2

Supporting Healthy and Enjoyable Meals
for the World in the New Age
For many years, the Sumitomo Corporation Group has been exploiting its global business network to ensure a stable supply ofsafe and high-quality foods that meet the high standards of Japanese consumers. More recently, we have started to apply theknow-how, which we have developed through our business practices in the Japanese market, to markets in China and other
Asian countries. In this section, the General Manager of the Food Business Division reports on the latest developments andfuture plans for our food businesses that support people around the world by providing healthy and enjoyable meals every day.

Using the Sumitomo Corporation Group’s know-how
and value chains, fully to ensure a stable supplyof high quality foods
For years, the Food Business Divisionof Sumitomo Corporation has beendeveloping a wide variety of foodbusinesses under the slogan, “Farmto Fork.” To ensure a stable supply ofa variety of foods to meet consumer
demand—from cereals and fresh
produce to processed food—wehave constructed global value chains
Shoichi Kato
that cover the whole upstream (sales
Corporate Officerof fertilizers and other agricultural
General Manager
materials), midstream (crop harvesting
Food Business Divisionand picking and export), anddownstream (importing, processing and sales of products) areas.
To deliver safe foods to consumers, we have improved thetraceability of our products. In 2003 we started a Food Safety
Management Team to prevent the occurrence of any foodrelated accidents and to lay down regulations for emergency
countermeasures and information disclosure. The team also
works on employee training, as well as safety management
and awareness-raising in subsidiaries and associatedcompanies both in and outside Japan.

19

Report on Responsibility & Sustainability 2011

The Sumitomo Corporation Group employs these value
chains and safety management system to deliver safe andhigh-quality foods that can meet the high expectations andspecific needs of the Japanese consumer. Items in especiallyhigh demand are fresh produce such as bananas and pork.
Our bananas are grown in farms operated by a groupcompany in Mindanao Island in the Philippines. Quality isensured even during shipment using our low-temperaturetransportation network that covers the full length of the
distribution chain from the farms to the retail stores. To
respond to a variety of consumer needs for bananas, wechose a marketing strategy that offers a big line-up, fromreasonably priced brands to the high-end brands, typified by
Kanjuku-Oh, a brand of highland bananas that are super sweetand have a well flavored taste.
Our original pork brand, Yongenton Silky Pork, isdeveloped specifically to suit the taste of the Japanese
consumer, in cooperation with our partner, Smithfield Foods
Company of the U.S., the world’s largest pork producer. We
deliver safe and tasty pork to the Japanese market with full
quality management and traceability.
In addition to these items of fresh product, we havestarted wheat trading in the Australian market to export
wheat to Asian countries, where a western style diet isbecoming popular.

Developing advanced food businesses in China
and other Asian countries with our ample
experience and know-how
As their economies grow, consumers in China and other Asian
countries are seeking foods of a higher quality in dairy-based
meals. The Sumitomo Corporation Group sees this movement
as an opportunity for us to contribute to improving the diet andenriching the food culture in these countries. We can use theknowledge and techniques from Japan together with our trading
scheme to deliver safe high-quality foods developed in theJapanese market, where consumers are said to have the world’s
highest expectation for their food products. That is why we arefocusing on the food business in Asian countries.
Our top priority in this area is the Chinese market, thelargest food market in Asia. Sumitomo Corporation invested
in Guangzhou Hua Xin Commercial Trading, the largest food
wholesale trading company in South China, in 2007. In 2009,
we purchased some shares of its subsidiary, Shenzhen Hua
Xin Chuangzhan Commercial Trading. These companies now
function as our intermediaries to deliver beverages, alcoholic
drinks, processed food and other high quality products, including
Japanese brands. In China, wholesale companies work as anagency for the manufacturer. In addition to this traditional role,
Shenzhen Hua Xin also functions as a coordinator for a wide
range of food manufacturers and retailers. The company has

gained its status as a unique food wholesaler by learning andincorporating the roles of Japanese wholesale companies thatmeet the needs of retailers in a comprehensive manner.
In September 2010, we launched a comprehensive alliancewith Jilin Grain Group Co., Ltd., a group of leading state-operated
companies engaged in grain collection and processing. The Jilin
Grain Group is located in Jilin Province, a major rice producing
region. Sumitomo Corporation work with the Group to enhancedomestic sales and promote export of rice, and improve quality
by bringing Japanese technologies for rice milling and advanced
chemicals management methods to produce a better quality ofrice. We are planning to develop new businesses, including the
production and sales of high-end brand rice and pre-rinsed rice,which are expected to increase demand from wealthy consumers
and the restaurant industry.
Asia is a big consumer of food, but this is not the only role
the region plays in the world food business. Asia is also a major
producer, and the Sumitomo Corporation Group supports thegrowth of local food production through our fertilizer business inAsia, especially in China, Thailand and Malaysia.
The Sumitomo Corporation Group is continuing to develop
a range of food businesses in China and other Asian countries
while preserving mutual success and prosperity with local foodindustries. We continue our support to enrich the dinner tables
and food culture in the area.

Report on Responsibility & Sustainability 201120

Project Report2

Supporting Healthy and Enjoyable Meals for the World in the New Age

BUSINESS CASE 1
Building value chains in Australia and Asia to ensurea stable supply of wheat to Asian countries
In Asia, typically in China, where the ongoing economic growthhas been upgrading income levels, consumer demand for awider variety of luxury foods, such as different kinds of bread,snack foods, noodles and frozen foods, is increasing. To meetthese needs, demand for high quality wheat is also growing
rapidly in the region. Sumitomo Corporation responded to thesemarket trends by expanding wheat business in Asia. Using ourample experience and business know-how developed throughmany years of stably supplying good quality wheat from major
production areas located throughout the world to Japan, weare developing value chains to supply wheat to China and other
Asian countries.
While China can grow enough wheat to satisfy its own
demand, other countries
in Asia need a stablesupply from othercountries to meet theirgrowing needs. To ensurethat supply, a good value
chain in the upstream,or production areas,is essential. Sumitomo
Corporation concluded
that the best region in
Wheat harvested by Emerald Group
which to construct a
value chain was Australia, a leading producer and exporterof wheat, which is well located to serve as a supply base forAsia. In 2005, we invested in Australian Bulk Alliance (ABA) toenter the grain storage & handling business at inland sites andexport terminals. In 2010, we obtained shares in Emerald Group
Australia Pty Ltd., a major grain trader (crop picking and sales) in
the area and became the only Japanese company to establish
an upstream value chain covering from origination to export.
The supply chain now serves as a distribution infrastructure forthe export and marketing of wheat for South Korea, Taiwan,
Indonesia, Thailand, Vietnam, Malaysia, Singapore and other

Hiroyasu Kurosaki
General Manager
Grain & Oils Department

countries in Asia.
We have also been working to develop downstream value
chains for wheat trading. In 2006, we entered a strategic
partnership with one of the largest flour mills and food groups
in Asia, Singapore-based Prima Limited, to prepare ourselves
for collaboration in Asian markets. In 2008, the joint venture
between Sumitomo Corporation and Prima invested in a wheat
flour milling factory, Qingdao Xinghua Cereal Oil & Foodstuff
Company Limited of Shandong Province in China and entered
the flour milling business in China.
Qingdao Xinghua has developed a comprehensive quality
management system and is highly regarded by its customers.
In China, where the need for safer and tastier foods isincreasing, ever higher demand for these high quality wheat
products is expected.
The Sumitomo Corporation Group is expanding its
measures to develop a business foundation in downstream
value chains from China to other Asian countries to ensurea stable supply of safe and high quality wheat and wheat
processed products to those regions, supporting thewellness and happiness of people by providing them with ahealthy and rich diet.

Factory buildings of Qingdao Xinghua

Value Chain for Our Wheat Trading

21

Harvest and Picking

Infrastructure

Export / Domestic trading

MarketingSales and Processing

Emerald Group

ABA

Sumitomo
Australia Pty Ltd.

Overseas Subsidiaries
and Offices of
Sumitomo Corporation

Food processing
companies(flour milling andoil pressing etc.)
in the importing country

Report on Responsibility & Sustainability 2011

BUSINESS CASE 2
Supporting the sustainable development of Chinese
agriculture with high quality fertilizer
The Fertilizer Department of Sumitomo Corporation works
together with major material suppliers in the world to ensurea stable supply of high quality fertilizer, an essential ingredientin agricultural production, thus contributing to agriculturaldevelopment in Japan. In recent years, we have expanded thefocus of our fertilizer supply business to cover other countries
in Asia and Oceania, including China, Thailand, Malaysia andAustralia. Among these countries, China has been significantly
increasing its fertilizer market.
In 2004, Sumitomo Corporation established Summit Fertilizer(Qingdao) Co., Ltd. in Shandong Province jointly with Qingdao
Soda Ash Industrial Co., Ltd. Under the corporate mission “tofertilize farmland and improve life in rural communities,” we put
the business know-how of Qingdao Soda Ash and Japanesefertilizer technologies together to enhance local production andsales of high quality chemical compound fertilizers.

Summit Fertilizer (Qingdao) Co., Ltd.

The fertilizers produced by Summit Fertilizer (Qingdao)
have many advantages compared to the low-priced fertilizers
conventionally traded on the Chinese market. They containthe three macronutrients (nitrogen=N, phosphorus=P andpotassium=K) and other essential elements in a preciselycontrolled manner. In addition, they are designed to prevent
any overrunning of nutrients after application so that a sufficient
intake of nutrients by the crop plants can be ensured. Although
the new fertilizers are considerably more expensive thanconventional products, sales are steadily improving, due to theincreasing interest in the safety and quality of foods among
consumers and the changing attitudes of farmers in responding
to these new demands from consumers.
To meet the expanding demand, we started a second
production base in China, Summit Fertilizer (Foshan) Co., Ltd.

Akira Umeoka
General Manager
Fertilizer Department

Farmer using Summit Fertilizer products in a rice paddy

in Guangdong Province, increasing the total production to400,000 tons. To meet our next production goal of 1,000,000
tons, we are expanding the lineup from fertilizers designed forvegetables and fruit production to fertilizers for cereal crops,
which are traded in a larger market.
Production and sales of fertilizers are not the only services
these two Summit Fertilizer companies offer to agriculture in
China. We are active in technical seminars and other sales
support services for local sales dealers and farmers. At theseminars, the different features of each fertilizer and sciencebased correct application are explained in detail to encourage
the effective use of high quality fertilizers to increase andimprove the quality and yield of agricultural products.
The Fertilizer Department of Sumitomo Corporation andthe two companies under Summit Fertilizer will continue theirefforts to expand sales and use of high quality fertilizers thatwill support the sustainable development of agriculture andimprovements to the consumer diet in China.

Fertilizer seminar

Report on Responsibility & Sustainability 201122

Project Report3

Operating a Wide Range of Businesses toPursue Sustainable Energy Supply
The sustainability of existing energy supply systems has been called into question after the Great East Japan
Earthquake in March 2011. At the Sumitomo Corporation Group, we have been developing various power generation
projects using solar, wind, biomass, geothermal, and other renewable energy sources on a global scale, positioning
these energy sources as an important supplement to fossil fuel energy.
To ensure energy sustainability in the future, we will continue to implement a wide range of projects. For
instance, we will focus on initiatives to promote wider and greater applications of power storage technologies, which
are attracting higher expectations as an enabler of more efficient and effective use of electricity as well as more
flexible responses to changeable energy demands.

Solar power
generation

Promoting greater demand
for solar power
generation acrossthe entire value chainWe, the Sumitomo Corporation Group,
create greater demand for solar
photovoltaic power generation by building an extensive value
chain, ranging from the procurement of raw materials for solar
panels, to the sales of solar panels and the operation of power
generation projects. One of our major milestones in this field, andin power generation projects in particular, is the construction andoperation of a solar power plant with a total generating capacity of
12.6 MW in 2008 on Tenerife Island in Spain, an island receiving
one of the highest levels of sunshine in Europe. This project
has given us a lot of knowledge and experience in solar power
generation. Another milestone is a solar power generation projectin the Puglia region of southern Italy. We have been involved inthis project, which has a total generating capacity of 9.7 MW,
since Feburary 2011 as its largest shareholder. In France, we areparticipating in a solar power generation project in Les Mées, a city
near Marseilles in southern France, with a total generating capacityof 31 MW. The construction of the power generating station isunderway and initial operation is scheduled for the fall of 2011.
Sumitomo Corporation became the first Japanese corporation toparticipate in a solar power generation project in the country. All
these projects, blessed with favorable geographical conditions, areexpected to give back to local communities over the long term,
serving as a stable and environmentally friendly power source.

Solar power plant in Les Mées, a city near Marseilles in southern France

23

Report on Responsibility & Sustainability 2011

Stanton Wind Power Plant in Texas

Wind power
generation

Aiming to become
a global player in wind
power generation projects

The Sumitomo Corporation Groupboasts abundant experience andexpertise in wind power generation
projects, ranging from facilities construction to wind farmoperation. Major wind power generation plants we operate
include: two wind farms in Japan (total generating capacity of
36 MW), the Stanton Wind Power Plant (120 MW) in Texas in
the U.S., and the Datang Sino-Japan (Chifeng) Wind Power
Plant (50 MW) in Inner Mongolia. Latest events in this field include
our investment in the Shepherds Flat Wind Farm Project (845 MW)in the U.S. Under this project, which has an estimated total costof two billion dollars, 338 wind turbines (2.5 MW) produced by
U.S.-based General Electric Company will be installed over a vast
area covering 800,000 square meters. With construction work
scheduled to be completed in the summer of 2012, the wind farm
will become one of the largest wind power plant in the world.
A spiring to become a global player in developing the wind
power generation sector, Sumitomo Corporation will further expand
its business in the U.S. and China, its two largest markets, by fully
leveraging the experience and expertise it has obtained through its
ongoing projects, and aggressively explore and capture opportunities
for new projects in wind power markets in other countries.

Wood-based
biomass
power
generation

Using resources effectively while reducing CO2 emissions

Wood-based biomass power generation, put simply, refers to a type of thermal power
generation that burns wood. Different from conventional thermal power generation using
coal and other fossil fuels, it uses waste wood from construction and demolition, driftwoodfrom rivers, thinned and pruned wood, and other unused wood material as fuel. In addition
to its contribution to effective use of resources, wood-based biomass power generation is
attracting growing attention because of its “CO2-free” nature: i.e., CO2 emissions from the
combustion of wood are offset by absorption of CO2 by the trees used for fuel during their growth period.
Summit Energy Corporation, a member of the Sumitomo Corporation Group, is engaged in this type of power
generation in operating the Summit Myojo Power Itoigawa Biomass Power Plant in Niigata, Japan. The plant
contributes to reducing annual CO2 emissions by more than 80,000 tons.
Ensuring that consistent procurement of wood fuels is the key to biomass power plant operation, we also work
to secure a supply of wood for fuel, including timber offcuts, removed trees, and pruned branches from Japan andcoconut shells from overseas.

Geothermal
power
generation

Using steam extracted
from under the groundeffectively

In geothermal power generation, steam
from underground is used to drive turbinesand generate electricity. The used steam
is cooled and condensed into water,which is returned to the ground. Thanks to this process, this power
generation method entails minimal CO2 emissions and enables astable supply of power over the long term.
Constructing geothermal power plants requires advanced
technologies, including the development of steam turbines resistantto the corrosive impurities contained in steam drawn from deep inthe Earth. In partnership with a Japanese heavy electric machinery
manufacturer which is renowned for its world-class technological

Itoigawa Biomass Power Plant

excellence in this field, the Sumitomo Corporation Group has been
involved in many geothermal power station projects in the U.S., thePhilippines, New Zealand, Indonesia, and many other countries aroundthe world. The aggregate generation capacity of those plants for which
we supplied facilities and were involved in the construction amounts
to over 2,000 MW. In June 2011, we also entered the Turkish market,
where many geothermal power generation projects are expected tobe launched in the future. In addition to the aforementioned supply of
power plant facilities and construction of power stations, we will also
sell electricity generated under long-term contracts.

Wayang Windu Geothermal Power Station in Indonesia

ColumnSummit Energy Group: Playing a key role in the stable power supply with its optimal energy source portfolio
Sumitomo Corporation established Summit Energy
Corporation in 2001, in response to the liberalization ofJapan’s retail electricity market. Summit Energy delivers astable supply of power at competitive prices by achieving
an optimal combination of power sources, which ismade possible by using the network of power generation
stations, including wind and wood-based biomass power
generation plants, of the Summit Energy Group, as
well as partnerships with non-Group corporations andtransactions in wholesale markets.
During the rolling blackouts in the aftermath of the March
11 earthquake in Japan, the Sumitomo Corporation Grouphelped solve power shortages in East Japan. We were praisedfor the fact that our power station in Mihama, Chiba was able
to provide electricity and steam consistently to neighboring
factories, even during that period. In addition, all our power
generation plants in the country increased their outputs andfed back surplus electricity to local electric utility companies.

Electricity

Environmental value
Thermal power
generation

Neighboring
factories

Nihon Kaisui
Co., Ltd.
(equity partner)

Natural gas
Summit Mihama
Power Corporation(Chiba, Chiba)

Fuels

Wind power generation
Summit Wind Power
Sakata Wind Power Station(Sakata, Yamagata)
Kashima Wind Power Station(Kashima, Ibaraki)

Power utility
companies

Coal
Summit Onahama S
Power Corporation(Iwaki, Fukushima)

Biomass
Myojo Cement
Co., Ltd.
(equity partner)

Steam

Electricity retailing
Summit Energy
Corporation

Users of electricity

Buyers ofenvironment value

Sumit Myojo Power
Corporation(Itoigawa, Niigata)

Companies with power
generating facilities
Procurement of fuel for
power generation(Summit Energy Corporation)
Biomass fuels (from Japan and overseas)
Fossil fuels (from Japan and overseas)

Wholesale electricity
marketHydro
Natural gas
Coal
Biomass
Other new energy

Report on Responsibility & Sustainability 201124

Project Report3

Operating a Wide Range of Businesses to Pursue Sustainable Energy Supply

Promoting second-life uses of lithium-ion batteries to help create“smart communities”

In September 2010, Sumitomo
Corporation established the 4R Energy
Corporation, a joint venture with
Nissan Motor Co., Ltd. with the aim ofcommercializing second-life uses for thelithium-ion batteries mounted on Nissan’s electric vehicles (EVs).
EV-mounted lithium-ion batteries usually retain considerable
capacity even after their useful life on an EV has expired.
Given this, there are high expectations for second-life uses
for the used batteries, and this will contribute to successful
implementation of planned smart communities and smart grids.
Public interest in energy storage devices has been
growing in Japan after the calamitous quake and tsunami in
March 2011 and subsequent power shortages, reflecting thenation’s heightened awareness of disaster preparedness.
In particular, a “demand response” function—i.e., storing
electricity generated by solar power generators installed atfactories, residential housing, and other locations and using
the stored power as necessary—is attracting a lot of attention
as a new power supply mechanism. 4R Energy has started ajoint demonstration test with housing companies to look at theperformance of small power storage systems linked to solar.

Solar power EV charging station
Sunlight

Solar batteries

Lithium-ion
batteriesPower
conditioners forphotovoltaic
generation

Electricitypowered
equipment inNissan Global HQ

Gridcontrollers

EV chargers

Stakeholder’s Voice

Sumitomo Spirits

Working together to achieve businesssuccess and offer green solutions to society

A leading integrated trading company that
implements distinct, forward-looking initiatives

Mr. Eiji Makino

Norihiko Nonaka

General Manager
ZEV Strategy Group Department
Global Zero Emission Business Unit
Nissan Motor Co., Ltd.

General Manger
Battery Business
Development Department

EV batteries retain a large residual capacity
even after the end of their usable life in thevehicle. To capitalize on this feature, wereuse, refabricate, resell, and recycle used EV batteries throughour 4R business. This newly launched business makes positive
contributions, not only to our business, but also to society. It helps
to solve the issue of a mounting pile of used EV batteries causedby the growing popularity of EVs, and encourages greater demand
for and use of renewable energy.
In operating this business, successful resale of batteries is
the key to success. However, this market is an unknown territory
for Nissan Motor. In this respect, we have high expectations for
Sumitomo Corporation’s proven capabilities in developing themarket and identifying and capturing business opportunities. It
should also be noted that the open-minded, flexible viewpoint of
Sumitomo Corporation’s staff in the team itself is a great asset to
the JV business.
We are excited about working together with Sumitomo
Corporation to make the 4R business thrive.

25

Another demonstration test is underway with Nissan Motor,
involving EV charging systems that use photovoltaic generation.
This pilot test is part of 4R’s efforts to develop medium-sized
power storage systems for public and commercial facilities thatneed to reduce the power they use during peak hours and shift
their peak demand hours.

Power supply“4Rs” forEV-mounted
batteries

Report on Responsibility & Sustainability 2011

We, the Sumitomo Corporation Group, areworking to establish new business models
and create and deliver new value in ourenvironmental and new energy businesses, through which
we contribute to developing a sustainable, low-carbon, andrecycling-oriented economy. The mission of our forwardlooking new initiatives is consistent with Sumitomo’s businessphilosophy, calling for benefits not only to our own businesses
but also to society and the nation.
Guided by this business philosophy, we have launched the
4R business together with our partner Nissan Motor.
We will strive to grow the 4R business and ensure that it
plays a key role in our efforts to ensure that second-life uses oflithium-ion batteries—a key technology to support efficient useof renewable energy—become part of the social infrastructure.
To this end, we will continue working closely with a wide rangeof corporations in related industries to provide environmental
and energy solutions to society.

Metal Products
p.27

Social Value
Creation within
Our SevenBusiness Units

Transportation& Construction
Systems
p.29

Infrastructure
p.31

This section features our strategic CSR, the activities and capabilitiesof our business units to create social value, which we pursue to fulﬁll
our responsibilities to society in our business operations.
Speciﬁcally, this section highlights our Social & Environmental Context(business surroundings with CSR implications), our Goals for Social
Value Creation (social mission that we aim to achieve through ourbusiness activities), and our Capabilities to Provide Solutions (ourstrengths in fulﬁlling our deﬁned mission) of each business unit.
The three elements are summarized in the following Social Value
Creation Chart which is compiled for each business unit:

Media, Network& Lifestyle Retail
p.33

Social Value Creation Chart for each Business Unit
Social &Environmental Context

Capabilities to Provide
Solutions

Goals for Social
Value Creation

MineralResources,
Energy,Chemical &Electronics
p.35

This Social Value Creation Chart is also used in the “CASE STUDY”
part, in which we pick out a project being conducted by the business
unit in question to describe how we are creating social value withinthat project.

General Products& Real Estatep.37

We hope these charts and the entire section will help you gain a better
understanding of how the Sumitomo Corporation Group integrates
CSR into its wide range of business activities.

New Industry
Development &Cross-function
p.39
Report on Responsibility & Sustainability 201126

Social Value Creation within Our Business Units

Metal Products

The Metal Products Business Unit is working toensure all our partners can create value andimprove their proﬁtability by expanding our value
chain to cover all operations from upstream todownstream, upgrading our functions within eachprocess and driving innovation to enhance
efﬁciency of resource allocation.
Operating a steel service center in Malaysia

Business Unit Overview
Our business covers a broad range of steel products including
sheets, tubular products, and non-ferrous metals such asaluminum and titanium. We have an extensive value chain thatsatisﬁes the diverse needs of customers in a broad range of ﬁelds.
In our steel sheet segment, we provide a full range of services
mainly to automakers and home appliance manufacturers via ourworldwide steel service center network. Such services include steel
products procurement, inventory management, processing andjust-in-time supply. In our tubular product segment, we areenhancing our functions as a total service provider by supporting oil
ﬁeld service companies in addition to supplying tubular products toleading oil and gas companies through our proprietary supply chain
management (SCM) system. In our non-ferrous metal segment, ourpriority is to expand our production centers for mainly aluminum
and aluminum sheets.
Going forward, we will continue to reinforce our business byenhancing our entire value chain from upstream to downstream
operations and improve our functionality.

f(x) Strategies
We aim to expand and upgrade our business by enhancing
value chains in the energy sector as well as the automobile andtransportation equipment ﬁelds, which offer strong growthprospects. We also aim to further strengthen our business baseby expanding aluminum operations and actively capturing
growth in demand for building materials and other products inemerging countries.

Creating Social Value within the Metal Products Business Unit
Social & Environmental Context

Capabilities to Provide Solutions

Goals for Social Value Creation

Compounding difﬁculties in keeping
synchronized growths between the steel
demand-supply and the economic
development by regions.

Provide a wide-range of clients with the globally
integrated information systems originallydeveloped for the inventory management tointegrate the inventory administration into direct
operations management

Achieve greater resource efﬁciency andproductivity through innovative
resource allocation

More comprehensive resource
management required in order to control
raw material cost increases

Increased needs for innovation in order toaddress rising raw material costs driven by
growing global demand, as well as thedepressed prices of industrial products due toincreasing global competition

27

Report on Responsibility & Sustainability 2011

Create long-term trusting relationships
with global partners in diversiﬁed andhighly-specialized ﬁelds

Educate and deploy specialists in highly
dynamic cross-regional matrices ofknowledge and experience

Develop demand-based supply chains
aimed at relevant market optimization to
enable all stakeholders to increase theirabilities of value-creation and thereby
increase their proﬁtability

Reduce the total cost of products for clients

Social Value Creation Goals within the Metal Products Business Unit
Through our business operations, including our
OCTG SCM (oil country tubular goods supply
chain management) service described below andsteel service centers across the globe, the Metal
Products Business Unit is working to reduce ourcustomers’ total cost by reducing inventory
costs as well as mitigating the risk of generating
dead stock.

We also work to ensure that all our
stakeholders will be able to increase value creationand improve their proﬁtability by developing
pull-based, or demand-driven supply chains andoptimizing the relevant markets in their entirety.
We will continue to achieve greater resource
efﬁciency and productivity through resource
allocation that is efﬁcient and innovative.

Shunichi Arai
Director
Executive Vice President
General Manager
Metal Products Business Unit

CASE STUDYOCTG SCM (Oil Country Tubular Goods* Supply Chain Management) Service
Social & Environmental Context
While it is anticipated that global energy
demands will continue to grow in the future
because of the increase in global
population and economic growth primarilyin emerging countries; oil and natural gas,
which will remain primary energy sources,
are unevenly distributed geographically andsuch energy resources that are easily
accessible are becoming depleted.

Simultaneously, the focus on developing
energy resources has been shifting fromconventional oil and natural gas tounconventional sources, typiﬁed by the“shale gas revolution” in the United States.
We strive to contribute to technologicalbreakthroughs and environmentally friendly
resource development for these new
unconventional energy sources.

Concentrating their development resourcesin regions of high geopolitical risk andtechnically difﬁcult ﬁelds, oil and gas
companies are eager to achieve greater
efﬁciency in procurement of the materials
and equipments, such as tubular products.
A variety of technical support is also
becoming more keenly required.

Business Overview
We provide integrated OCTG solutions covering the entire
process from ordering to delivery to the required operational
locations, while forecasting and managing the use of tubular
products using our online systems. We are offering thesecomprehensive services through 17 contracts at 15 locationsin 14 countries across the globe.
To contribute to a stable supply of energy, we will further
strengthen our management capabilities of the entire tubular
products supply chain to offer global oil and gas companies
more advanced services as a total solutions provider.

Scrapping,
re-inspection,
processing

Procurement
departments of oilcompanies

Inspection

Accessory
manufacturing
Support for
demand planning

TIMS, our proprietary
inventory
management system

TubularmanufacturingOn-site use

Processing

Transportation
to the site

Ocean transport

Inventory
management

Local transport

Capabilities to Provide Solutions
We have developed an original online
system, TIMS (Tubular Information
Management Systems), for tracking the
movement of all of our OCTG acrossthe world.

We have a robust customer base, which
includes Oil Majors. We are able to meet ourcustomers’ advanced technological andquality control requirements through ourtechnical consulting company.

Our SCM management company
established in the U.S. is actively engaged instrong support of the launch of new SCM
projects, the upgrade of operational levels of
existing projects, and the development of
global human resources, etc.

* OCTG (Oil Country Tubular Goods): A type of steel pipe used in the extraction of oil and natural gas

Report on Responsibility & Sustainability 201128

Social Value Creation within Our Business Units

Transportation &Construction
Systems
The Transportation & Construction Systems Business
Unit promotes environmentally friendly transportation
systems and contributes to more efﬁcient use ofresources through its global value chain covering fromupstream to downstream operations in automobiles,
ships, aircraft, rail and other transportation systems
as well as construction equipment.
One of our joint-venture projects operating LNG carriers to transport natural gas,a leading source of clean energy.

Business Unit Overview

f(x) Strategies

In automotive operations, our growing global value chain covers
manufacturing, wholesale, retail, leasing, and retail ﬁnanceservices. In the ship business, we hold an equity stake in a
shipbuilding ﬁrm. We are also engaged in ship-owning andoperating as well as trading of ships. In the construction
equipment business, we have the highest transaction volume
among trading companies in sales and rental operations throughour global network. We are also expanding mining equipment
services nowadays. Our aircraft-related operations involve
international trading in civil aircraft, engines and related equipment,
and imports of defense-related equipment. In addition, ourtransportation systems business promotes transportation projects
and has strengths in railcar manufacturing and exports.

Looking ahead 10 years, we will challenge to create
value-added and high-growth type of new businesses while
upgrading our established core businesses. It is reported
that demands for developing natural resources and for
implementation of transportation systems are boosted
because of growth of emerging countries or prevailingurbanization in the world. To such demands, we aim to
make contributions to society at global basis by offering avariety of solutions which may be achieved through ourchallenges toward businesses of transportation andconstruction systems.

Creating Social Value within the Transportation & Construction Systems Business Unit
Social & Environmental Context

Capabilities to Provide Solutions

Goals for Social Value Creation

Increasing population and urbanization
impacts supplies and conﬁgurations of energy
and resources—limits of utilization become
critical issues

Leverage planning expertise in both scope andtime frames to promote long-term developmentof critical new technologies

Promote resource efﬁciency through theintroduction of transportation and construction
equipment that contributes to building a
resource-saving, recycling-oriented society(e.g., rail systems and EVs)

Short-term perspective on infrastructure planning
leads to long-term development costs and reduced
yields on resources in both developing and mature
markets/economies

Solution based services integrated bothhorizontally (wide range of vehicle technology
expertise) and vertically (Finance and EPC)

Advances in technology increase costs anddifﬁculty of effective ﬂeet and infrastructure
management by increasing the knowledge andplanning expertise needed for effective deployment

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Report on Responsibility & Sustainability 2011

Design and implement operations for clientsusing a global matrix of advanced andexperienced human resources

Implement cycle based management of
infrastructure to fundamentally enhance ROI
for clients

Promote early adoption of advanced technologies
that best suit the project’s characteristics

Social Value Creation Goals within the Transportation & Construction Systems Business Unit
Through our business operations, like the railcars
project in the United States described below, theTransportation & Construction Systems Business
Unit is working to produce greater social beneﬁts
by encouraging the early introduction of
cutting-edge technologies that ﬁt projectcharacteristics and improving operational efﬁciency
across the entire lifecycle of our merchandises. Our
business portfolio includes the provision of leasing,renting and other ﬁnancing functions associatedwith the products we deal with, which helps
customers improve their investment efﬁciency.
We will continue to make positive contributions
to achieving more efﬁcient use of resources bypromoting the use of rail projects, electric vehicles,
and other transportation and construction
equipment which contribute to building a
resource-saving, recycling-oriented society.

CASE STUDY

Kazuo Ohmori
Director
Executive Vice President
General Manager
Transportation & Construction
Systems Business Unit

Railcars Project in Chicago, USA
Social & Environmental Context
In the 1980s, there was growing publicconcern over environmental problems and theimpact of the oil crisis on our car-dependentsociety. At the same time, the rapid population
increase in the suburbs of Chicago called for a
substantial expansion of the local transportsystems. As chronic trafﬁc jams revealed thelimitations of automobile-based transportation
systems, there was an urgent need to develop
public mass transportation systems services.

In the early 1990s, we supplied bi-levelpassenger railcars, capitalizing on the growing
need to improve transportation capacity and thetiming for the replacement of existing commuter
trains. As a result, the utilization rates of trains
were improved, which led to improvements ininvestment efﬁciency at our customer. On theoperational front, the new passenger railcars
allowed train conductors to cover a wider area,
reducing labor costs per operational unit.

The Sumitomo Corporation Group, in
association with Nippon Sharyo, Ltd.,
complies with Buy American provisions
calling for the use of American components
more than 60% and local assembly in theStates. We also work closely with local
businesses to revitalize the local economy.
Currently, the construction of a local factory
is underway, aiming at further localization.

Project Overview
Since the 1980s, the Sumitomo Corporation Group has supplied 886 railcars to theUnited States in partnership with Nippon Sharyo. In October 2010, the Sumitomo
Corporation Group in association with Nippon Sharyo received another order for
160 bi-level railcars. We have now supplied most of the passenger railcars
travelling to and from Chicago. We will continue to expand our passenger railcar
business in the US market, aiming to seize opportunities in urban transportation
services and planned high-speed intercity rail system projects.

Capabilities to Provide Solutions
We have strengths in collaborating with avariety of partners to set up projects. Suchpartnerships have allowed us to build
environmentally friendly, comfortable, safe,and fast mass transportation systems. Not
only to conform to the existing standards, wehave been also actively participating in
projects to develop quality passenger railcars
which meet the latest requirements of theFederal Railroad Administration (FRA).

We can conduct effective technology
assessments that enable successful
technical alliance and we select the best
partners based on their regional andfunctional elements relative to our businessstrategy. We are focusing our efforts on a
proposed high-speed intercity rail network
called the Chicago Hub Network andexpansion of urban mass transportation
service networks.

Both from inside the Group and from aroundthe world, we are able to attract, develop, andretain talent that is able to manage overall
projects. These include the management of
product liability/warranties, long-term currency
and other risks, manufacturing and assemblingprocesses, appointments of vendors of major
materials and equipment, program forpurchasing and ﬁnance as well as the
management of regulatory affairs, including
compliance with local procurement provisions,considerations for economicallydisadvantaged, environmental impact
assessment and other requirements.

Report on Responsibility & Sustainability 201130

Social Value Creation within Our Business Units

Infrastructure

The Infrastructure Business Unit is a highly
specialized group striving to contribute toa sustainable society throughinfrastructure enhancement.
Our Al Hidd power generation and desalination project in Bahrain,
the ﬁrst privately managed power and water project in the country(approx. 1,000 MW of power generated and daily 405,000 tons of water treated)

Business Unit Overview
The Infrastructure Business Unit’s vision is to become “a highly
specialized group that contributes to society through infrastructureenhancement.” Our business covers various ﬁelds such as
IPP/IWPP*1, power plant EPC*2, telecommunications, wind
power/water infrastructure, industrial infrastructure and more. In theseﬁelds, by optimally combining trade business and business investment,
we are stably expanding our earnings base. Our competitive advantage
in the power business lies in our strong integrated project management
and execution, including ﬁnance and risk management functions. Our
track record of power plant EPC projects, which covers design,
For more information on our telecommunications
infrastructure projects, please refer to Project Report 1 (from p.15).
For more information on our power generation infrastructure projects,
please refer to Project Report 3 (from p.23).

procurement and construction, currently stands at approximately
47,000 MW, which is the ﬁrst tier among Japanese trading companies.
In the overseas IPP/IWPP ﬁeld, our power generation capacity reachedapproximately 5,300 MW as of March 31, 2011.

f(x) Strategies
Our four basic ƒ(x) (“f-cross”) strategies are to “enhance our humanresources base,” “build a competitive edge through alliances,”“capture growth in emerging countries,” and “strengthen our
optimization of business portfolio.” Guided by these strategies, we will
strengthen our earnings base throughout the mid and long term, while
ﬂexibly evolving our business model to cope with change.
*1 IPP: Independent Power Producer
IWPP: Independent Water and Power Producer*2 EPC: Engineering, Procurement and Construction

Creating Social Value within the Infrastructure Business Unit
Social & Environmental Context

Capabilities to Provide Solutions

Goals for Social Value Creation

Growing needs for infrastructure development inemerging countries and regions which areexperiencing economic growth

Alliance with partners: reconﬁgure
relationships with partners to leveragecompetitive advantages

Promote a sustainable society by developing andimproving infrastructures

A wide variety of limiting factors (e.g., existing andpotential resources, environmental and energy
policies, economic fundamentals) which differ
greatly according to the country/region

Generate innovation by creating the optimal
combination of tangible and intangible resources

Achieve optimal infrastructure development byoffering total solutions best suited to therelevant country/region

Attract, develop, and retain a variety of humanresources with advanced expertise and utilize
them ﬂexibly and effectively

Develop highly reliable infrastructure systems
through our business investments and EPC
businesses that will achieve high performance andstable operation over the long term

Need to develop balanced infrastructure projects
from medium- and long-term perspectives globally

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Report on Responsibility & Sustainability 2011

Social Value Creation Goals within the Infrastructure Business Unit
Through our business operations, including ourgeothermal power generation project in New
Zealand described below, the Infrastructure
Business Unit plans and implements many
infrastructure projects on a full turnkey*3 basis.
We collaborate with various partners around theworld and make the most of their respective
strengths to construct reliable infrastructure
plants that can achieve high-quality performanceand stable operation over the long term. To

develop appropriate infrastructures in an optimal
manner, we offer total solutions that are tailoredto the relevant country/region in terms of theavailability of existing and potential resources,
environmental and energy policies, demography,
industrial structure, and economic fundamentals.
We will continue to work to achieve asustainable society through infrastructureenhancement for electricity, telecommunications,water, industry, and in other key areas.

Takahiro Moriyama
Director
Executive Vice President
General Manager
Infrastructure Business Unit

CASE STUDY
Geothermal Power Generation Project in New ZealandSocial & Environmental Context
Electricity demand in NZ has been growing by
2-3% each year. The country needs new power
stations partly because of the need to replacethose that are aging. The nation’s geographicalimbalance of power also needs correcting.
Currently, electricity generated in South Island,
which has most of the hydro power stations in
the country, is transmitted to North Island, which
consumes most of the electricity generated.

New Zealand, a country with a population of
4.4 million, does not need to develop
large-scale power stations. The country hasbanned fossil fuel-based thermal power
stations and aims to increase therepresentation of renewable energy in its
power supply portfolio to 90% by 2025.

More than 50% of the electricity generated in
New Zealand comes from hydropower stations,which are exposed to signiﬁcant weather risks.
There is high hope for geothermal power
generation as the next leading power source totake over from hydropower. North Island hasabundant geothermal resources. Geothermal
power generation has already been operating in
the island for 50 years.

Project Overview
Geothermal power is a renewable energy. This environmentally friendly power generation
method does not require the use of fossil fuels; rather it uses geothermal resources,
which can be used consistently over the long term. Through our project in the Rotokawa
region of North Island, we were able to contribute to achieving efﬁcient geothermal power
generation. Notable features of the project include geothermal steam turbines with theworld’s largest single unit capacity, which the Sumitomo Corporation Group and ourpartner turbine manufacturer supplied to meet the client’s needs, and the adoption of a
triple ﬂash system*4, carefully designed to make the most of the characteristically highenergy density of local geothermal sources.

Capabilities to Provide Solutions
We are able to collaborate with various
partners, including manufacturers,
engineering ﬁrms, geothermal consultants
and local construction companies to design
the optimal power generation method thatbest ﬁts the geothermal characteristics (e.g.,high energy density) of the project site andorganize an EPC project.

Based on our extensive knowledge andexperience obtained from our involvement inmany geothermal power generation projects
around the globe, we are able to manage andoperate the entire project, from design tomaterials procurement, civil engineering work,
and installation in collaboration with our partners,
complete the full-turnkey contract within thescheduled period and achieve the rated output.

We are able to build a team by attracting
and training local talent to be in charge ofengineering and project management work.
Our human resources development efforts
worldwide serve as the foundation for
future projects.

*3 Full turnkey: A type of contract that delivers all-inclusive services regarding the facilities, including construction and installment*4 The triple ﬂash system : The process of extracting a pressurized mixture of hot water and steam from the ground and releasing the pressure to convert part of the liquid mixture
into steam is operated in three rounds compared with one or two rounds in conventional methods.

Report on Responsibility & Sustainability 201132

Social Value Creation within Our Business UnitsMedia, Network &Lifestyle Retail

In the Media, Network & Lifestyle Retail Business
Unit, we operate consumer-centric businesses byimplementing multichannel strategies that
integrate media, IT and retailing. We are building a
new value creation platform that enables a wide
variety of partners to join and produce synergy.
At Jupiter Shop Channel’s studio

Business Unit Overview
Throughout the ongoing convergence of various media,
including broadcasting and telecommunications, andincreasing diversiﬁcation of consumer spending patterns, theMedia, Network & Lifestyle Retail Business Unit is developing
integrated approaches to create and provide new value
tailored to the diverse lifestyles of consumers.
In the media ﬁeld, we provide both infrastructure andcontent services through our cable television (CATV),
multichannel television programming and ﬁlm-related
businesses. In the network ﬁeld, our business activities centeron IT solutions, Internet-related operations and mobile

communications. In the lifestyle and retail ﬁelds, our main
businesses are TV shopping, supermarkets, drugstores, luxury
brands, and apparel OEM*.

f(x) Strategies
By developing leading businesses in each industry,
strengthening value chains among subsidiaries and afﬁliates,and developing a multichannel retailing strategy which
combines media, IT, and retailing, we will establish a robust
consumer business unique to Sumitomo Corporation.
* OEM (Original Equipment Manufacturing): Contract production of branded merchandise

Creating Social Value within the Media, Network & Lifestyle Retail Business Unit
Social & Environmental Context

Capabilities to Provide Solutions

Goals for Social Value Creation

Prevailing trend for new innovations in industry to
fragment lifestyles and create further complexity anddivisions. The concept of “wellness” is createdoutside that of “happiness”—and the “virtual” spacecreated outside that of the “real” space

Bring long-term view to industry acrossgenerations and business areas inorder to mobilize assets in moreproductive conﬁgurations

Locate users as the beneﬁciaries of new
developments in retail/media industries byintegrating virtual into real life (rich life), and wellness
into happiness (good life)

Taking a positive and proactive response todemographic changes, such as the aging
population and slower or negative population
growth, will pave the way to creating new value

Need to effectively incorporate media and IT
into retailing

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Report on Responsibility & Sustainability 2011

Develop “multi-channeling” as a means to widen
perspective to redeﬁne boundaries between
business models and processes within theindustry and focus on coordinated value creationby continuous reintegration of knowledge,
systems and models

Redeﬁne industry infrastructure as comprising
the processes behind uniting and integrating
services—not the actual services themselves;
selling service platforms not just things

Promote resilience in lifeline industries by replacing“passive sustainability” with a dynamic andeconomically viable resilience

Build platforms for recreating and revitalizing otherrelated businesses in the industry

Social Value Creation Goals within the Media, Network & Lifestyle Retail Business Unit
Through our business operations, including our
SUMMIT Netsuper business described below, theMedia, Network & Lifestyle Retail Business Unit
implements multichannel strategies that integrate
media, IT and retailing, offering a wide range ofservices to meet the needs of customers withvarious lifestyles. The business unit’s unparalleledstrengths lie in the cross-sectoral value chainsdeveloped by our subsidiaries and afﬁliates, whichhave established leadership positions in themarkets they operate in. Leveraging our signaturestrength, we will maintain and expand our efforts
to stay ahead of the curve and create new value toenhance and enrich customers’ lives.

Yoshio Osawa
Director
Senior Managing Executive
Ofﬁcer
General Manager
Media, Network & Lifestyle
Retail Business Unit

CASE STUDY
Online Supermarket BusinessSocial & Environmental Context
The competitive landscape is becoming
severer today due to the continuing
low-price preference among consumers
and the many new food supermarkets thatare opening, particularly in the Tokyo
metropolitan area. Meanwhile, the grocery
delivery service market has been growing,
mainly due to diversifying lifestyles, better
access to IT infrastructure, and growing
concerns over food safety and reliability.

With its demographics changing rapidly,
Japan has a growing number of working
women and seniors-only households.
Consumer lifestyles have also become
increasingly diversiﬁed. More and more
people feel that physically buying heavy or
bulky items at stores is inconvenient or they
have no time to visit brick-and-mortar stores.

Online shopping has become common in
many product categories, including books,
CDs, tickets, and designer brands. This sea
change is also emerging in the fresh foodmarket, where consumers previouslybought products only after checking themout in the store.

Business Overview
SUMMIT Netsuper Corporation receives customers’ orders for fresh food and householdproducts primarily through its website and ships the orders from its dedicated processing
and distribution centers, rather than from existing physical stores. Our online supermarket
operates 24 hours a day, allowing customers to enjoy shopping any time anywhere. It
offers exclusive items which are not available off the shelf in real stores, and saves
customers from carrying heavy or bulky items home on their own. As a result, SUMMIT
Netsuper has welcomed a growing number of customers, particularly senior citizens andpeople who are busy with parenting, nursing and professional duties.

Capabilities to Provide Solutions
With a spirit of entrepreneurship, we arecultivating a new type of business byproactively responding to future
demographic changes and diversiﬁcation oflifestyles. We are entering new markets
which we consider have high potential fromthe long-term perspective.

We are able to create and grow a new typeof business, the online supermarket, utilizing
a combination of our Group’s expertise. We
can draw on Summit’s know-how in handling
perishable items, Jupiter Shop Channel andSoukai Drug’s know-how in direct marketing,and SCSK Corporation’s expertise insystems development and effective IT use,among others.

We are capable of integrating media, IT andretailing to build an essential service
infrastructure to operate an online supermarket
effectively and efﬁciently. SUMMIT Netsuper isthe ﬁrst web-based supermarket in the Tokyo
metropolitan area that delivers products fromits dedicated distribution centers. This delivery
style allows the online store to carry a wide
selection of special items, such as premium
fresh-from-the-farm products, as well as
regular products available in brick-and-mortar
Summit supermarkets.

Report on Responsibility & Sustainability 201134

Social Value Creation within Our Business Units

Mineral Resources,
Energy, Chemical &Electronics
The Mineral Resources, Energy, Chemical &Electronics Business Unit operates mineral
resources, energy, basic chemicals andelectronics, and life science businesses, and is
working to create new value based on mutual trustwith all our stakeholders by building a platform of
co-existence and mutual prosperity with them.
San Cristobal Mine in Bolivia

Business Unit Overview
We are active in the ﬁelds of mineral resources, energy, basic
chemicals and electronics, and life science.
In the mineral resources & energy business, we deﬁne copper,coal, iron ore, crude oil and gas as key strategic resources. Goingforward, we intend to continue upgrading and expanding our prime
assets with respect to each of these resources. We are alsobuilding depth in our mineral resources portfolio with interests inuranium, zinc, and rare metals such as nickel and cobalt. In trading
activities in such areas as carbon products, ferrous raw materials,
petroleum and gas, we are expanding business globally in China,
Asia and other markets in which we expect demand to grow.
In the basic chemicals and electronics ﬁelds, we trade in
cutting-edge electronic industry materials, as well as raw materials,

organic and inorganic chemicals and plastics. We also actively
develop rare earth resources and conduct EMS* operations. In thelife science ﬁeld, we trade in pharmaceuticals, agriculturalchemicals, household insecticides and pet-care products.

f(x) Strategies
We aim to strengthen our portfolio in both depth and quality toensure that its earnings base is maintained and improved for the
future. Measures include expanding and replacing existing interests,
along with extending and upgrading upstream interests through newinvestments, in addition to ensuring steady execution of current major
upstream projects. Reinforcing distinctive and highly sophisticatedbusinesses in growing and emerging markets will also be important.
* EMS (Electronics Manufacturing Services): The provision of electronics device
manufacturing services on a contract basis

Creating Social Value within the Mineral Resources, Energy, Chemical & Electronics Business Unit:
Mineral Resources and Energy Field
Social & Environmental Context
Increasing world population places ever-greater
stress on existing resource management systems

35

Capabilities to Provide Solutions

Goals for Social Value Creation

Develop and demonstrate extensive
knowledge and skills, which enable us tocreate new value beyond existing categories in
the mineral resources and chemical industries(nurturing people)

Create resource/asset investment/development
cycles in place of unilateral ﬂows of value, whichallow the stable supply of essential materials,
balanced industrial development, affordable andresilient economic development and mutual
wellbeing among stakeholders

Risk of “resource nationalism”—the failure to use
limited assets (resources) to develop the future outof uncertainty due to lack of the ability to generatevision/knowledge to plan ahead

Comprehensively integrated one-set
management, from extraction and processing tomarketing, allows for total process control withhigh efﬁciency and value creation based uponbalanced demand (nurturing business)

Need for a fair mechanism for all stakeholders
from resource-producing countries/regions to theend customer

Local focus in planning how to facilitate thepromotion of local interests in realizing mutually
beneﬁcial development of resources andmarkets (nurturing dreams)

Report on Responsibility & Sustainability 2011

Transform resources into solution and limitations
into staged plans for development which enablelocal communities to enjoy the beneﬁts of theirresources as investments for the future
development of their communities

Promote “compliance in actions” whereby
stakeholders gain mutual respect as partners
in the future

Social Value Creation Goals within the Mineral Resources, Energy,
Chemical & Electronics Business Unit
Through our business operations, including themining project in Bolivia described below, theMineral Resources, Energy, Chemical &Electronics Business Unit has been building afoundation for the continuous creation of newvalue based on mutual trust among stakeholders
that include resource-holding nations, producers,
and customers. We have also been working tobuild a mechanism that ensures our mineral
resources development project will lead to thedevelopment of the local community andultimately sustainable and independent growth.
Moving ahead, our mineral resources andenergy business will continue to focus on
appropriate development of mineral resources,
which enables a stable supply of key materials,
economic growth, and harmonious co-existencewith the local community. In our basic chemicals
and electronics, and life science businesses weare also working to create new value by building
platforms for co-existence and mutual prosperity
with all of our stakeholders.

CASE STUDY

Kuniharu Nakamura
Director
Senior Managing Executive
Ofﬁcer
General Manager
Mineral Resources, Energy,
Chemical & Electronics
Business Unit

San Cristobal Mine Project in Bolivia
Social & Environmental Context
Bolivia introduced a market economy after
its transition to democracy in 1982.
However, the exacerbation of income
inequalities led to frequent anti-government
campaigns, mainly by indigenous people. In
January 2006, Evo Morales became the ﬁrst
indigenous president in Bolivia.

Demand for mineral resources has been
increasing due to the increase in the global
population and economic development
mainly in emerging countries. However,current mineral resources developments
usually take place in locations with relatively
high geopolitical risks and technological or
technical difﬁculties.

While categorized as a developing country
with a GDP per capita of US$1,844, Bolivia
is one of the largest resources-rich countries
in the world, with abundant reserves ofnatural gas, zinc, lead, silver, and others.
The Morales administration is aiming toconnect resources development to thenation’s economic and social development.

Business Overview
Sumitomo Corporation has participated in the San Cristobal Mine Project since its planningphase in 2006. The global ﬁnancial turmoil triggered by the US subprime mortgage crisis in thefall of 2007, which occurred soon after the project started operation in August, severely affected
the project’s performance. However, as a result of our efforts to rehabilitate the project, the mine
has grown to become the world’s sixth largest mine for zinc concentrate by production volume,or the third largest by trade volume. In 2010, it simultaneously obtained three certiﬁcations forthe following international management standards: quality,
environment, and occupational health and safety. This is a testament
to the world-class mining operations of our project, and ourcontributions to the sustainable development of the local community.

Capabilities to Provide Solutions
We can improve the operational systems ofprojects by making full use of our know-howthat we, as an integrated trading company,
have developed through managing a rangeof businesses globally. We can alsoestablish a robust human resources
development plan, bearing in mind
localization of personnel, to ensure thesustainable growth of the project.

We can coordinate integrated value chainsfrom upstream to downstream covering
mining, processing and shipment at the site
as well as worldwide marketing and sales ofcommodities and products.

We encourage mutual prosperity with local
communities by building industrial and civil
infrastructures (roads, bridges, electricity,water, medical services, etc.), raising local
human resources to support thesustainability of their economy even after
closure of the mine and organizing “reverse
trade shows” to help develop local
industries and services.

Report on Responsibility & Sustainability 201136

Social Value Creation within Our Business Units

General Products& Real Estate

As a trusted partner for all our stakeholders, theGeneral Products & Real Estate Business Unit
operates food, materials and supplies, andconstruction and real estate businesses, which
contribute to sustainable lifestyles that enrichpeople’s lives.
Oyamadai Condominium project in Tokyo

Business Unit Overview
We are active in three main businesses closely tied to daily life:
food, materials and supplies, and construction and real estate.
In the food business, we have an integrated business modelthat extends from food production to quality management andsales. This model puts top priority on food safety and reliability,
which are important to customers.
In the materials and supplies business, we are the industry
leader in multiple ﬁelds, including tires, ready-mixed concrete,
lumber and building materials and recovered paper.
In construction and real estate, our core businesses are theleasing and management of ofﬁce buildings and retail facilities,

housing development and sales, and the real estate investment
fund business. Efforts are also focused on large-scale,
mixed-use development projects.
For more information on our food businesses, please refer to
Project Report 2 (from p.19).

f(x) Strategies
We will optimally allocate business resources based on changes
in the industrial structure and regional markets, as we work to
globalize our business operations.

Creating Social Value within the General Products & Real Estate Business Unit

37

Social & Environmental Context

Capabilities to Provide Solutions

Growing expectations for safe, reliable food andhousing, as well as a comfortable, high-quality
living environment

Redesign relevant markets based on the value tothe end customer

Fragmented management of resources in
non-optimized (planned) production chains

Optimize and reintegrate businesses throughdeveloping a long-term relationship of trust witha wide variety of partners

Ineffective use of important and ﬁnite resources,
such as forests, real estate, and farmland

Develop business models that enable
integrated management of tangible andintangible resources

Report on Responsibility & Sustainability 2011

Goals for Social Value Creation
Develop resource markets optimized upon pulldriven resource stewardship models

Create high-quality life spaces where resource
utilization is integrated and optimized to enable
sustainable and rich lifestyles

Create managed “lifeinfrastructures”—platforms for creatingsynergies of knowledge resources in life areas

Social Value Creation Goals within the General Products & Real Estate Business Unit
Through our business operations, including thetimber business in the Russian Far East described
below, in the General Products & Real EstateBusiness Unit, we are working to create fulﬁllingand sustainable lifestyles. To this end, we work
together, sharing our values with like-minded
partners, to build platforms that ensure appropriate
management of ﬁnite resources and create

expertise synergy. In the food, materials & supplies,
and construction and real estate markets in which
we operate, we will continue to strive for total
optimization of the markets by establishing a supply
network that can meet true consumer demands.
As a trusted partner for all our stakeholders, we willcontinue to contribute to creating sustainable
lifestyles that enrich people’s lives.

Shinichi Sasaki
Director
Senior Managing Executive
Ofﬁcer
General Manager
General Products & Real
Estate Business Unit

CASE STUDY
Timber Business in the Russian Far East
Social & Environmental Context
There are limited sources for wood, usedas the main residential building material
and for other applications. In Russia, ourpartner Terneyles has its woodland closer
to Japan, in the Primorskiy Region of theRussian Far East, which is one of the few
forests in the world that consist of both
hardwood and softwood trees that are
older than 100 years.

Although the majority of wood exported
from Russia was previously in the form oflogs, the Russian government is now
encouraging the export of Processed timber
to add more value to the exported material.

It is essential to establish a sustainabletimber business, and this requires not only
the protection of forest resources but also
due consideration for indigenous people
and biodiversity.

Business Overview
Sumitomo Corporation has a 45% interest in Terneyles, Russia’s largest integrated forestry
company. Terneyles manages its extensive forest resources, totaling some 2.6 million hectares,
in an environmentally responsible manner.* The company has acquired Forest StewardshipCouncil (FSC) certiﬁcation for all the forestlands in which it carries out logging.
The Sumitomo Corporation Group has also received Chain-of-Custody (CoC) certiﬁcation,
which is granted to processing and distribution businesses that meet speciﬁc standards inhanding wood from FSC-certiﬁed forests. By managing the entire processes from logging toprocessing and distribution, we can ensure a stable supply of a range of wood products fromlogs to processed wood products to the Japanese, Korean and Chinese markets.
* Terneyles employs a “ribbon cutting (strip felling)” method, in which logging is done in strips, to allow seeds fromsurrounding trees to drop in the logged areas to promote natural growth of new forest. The company also limits its
annual logging to ensure that the volume of trees logged will never exceed the volume of trees grown. The company’sefforts to protect indigenous residents and biodiversity were also recognized by World Wide Fund for Nature (WWF).

Ribbon cutting method

FSC certiﬁcate for all the forest
holdings of Terneyles
and its afﬁliates

Capabilities to Provide Solutions
Based on the ﬁndings from our study on
existing practices in Western countries
which focus on environmental friendlinessand renewable forest resources businesses,
we have started a sustainable timberbusiness earlier than competitors. At thesame time, we were able to identify market
needs, develop an appropriate policy andimplement local production accordingly.

Based on the knowledge, know-how, andbusiness connections developed throughour Russian timber business over many
years, we can work with leading local
partners, with whom we share the samevalues, to adopt an environmentally
responsible logging method to manage theoverall supply chain effectively and efﬁciently.

Keeping an eye on global market
development in an appropriate and timely
manner, we can make forays into ﬂedgling
markets early, grow the market together withlocal partners, and establish a sustainabletimber business there.

Report on Responsibility & Sustainability 201138

Social Value Creation within Our Business UnitsNew Industry
Development &Cross-function
The New Industry Development & Cross-function
Business Unit is engaged in the strategic
development and promotion of businesses in new
growth areas based on our company-wide
perspectives. Our efforts, base on these mediumand long-term views, allow us to create new valuethat helps to achieve sustainable growth for society.
Thang Long Industrial Park in Vietnam

Business Unit Overview
Our business unit was reorganized in April 2010. We currently
provide high-value-added ﬁnancial and logistics services.
These operations were previously conducted by our Financial
and Logistics Business Unit. In addition, business activities in
new industrial ﬁelds, such as the environment and new energy,
were previously spread out among different business units.
These businesses were consolidated in our business unit,
enabling us to develop and promote each business from acompanywide perspective.
In the new industrial ﬁeld, we are strategically developing andpromoting solar photovoltaic power generation, environmental andrecycling businesses, emission trading and greenhouse gas
reduction, and lithium-ion batteries, as well as venture investment
targeting emerging markets and other growth ﬁelds. In ﬁnancial
services, we make a market in commodities including in derivative

products as one of the largest Japanese trading companies. We
also run a leasing business focused on aircraft with Sumitomo
Mitsui Finance and Leasing Co., Ltd. (SMFL), a joint venture of
Sumitomo Corporation. In logistics, we provide comprehensive
logistics services worldwide, principally through Sumisho Global
Logistics Co., Ltd. We also operate multiple high-value-addedindustrial park businesses in Vietnam and other countries.
For more information on our photovoltaic generation projects and
4R project, please also refer to Project Report 3 (from p.23).

f(x) Strategies
We aim to increase our earnings by strategically developing andpromoting business in new growth ﬁelds from a company-wide,
medium and long-term perspective.

Creating Social Value within the New Industry Development & Cross-function Business Unit
Social & Environmental Context

Capabilities to Provide Solutions
Generate innovations that enable a new market
to be created across existing businesses andindustrial structures

Need to commercialize high-potential,
leading-edge technologies and improveexisting technologies to facilitatesocioeconomic progress at the earliest
possible opportunity

Capability investment—coordinate innovation
across time-scales, markets and functions.
External functional re-integration

Functional reintegration—realize stewardshipof intangible resources within and outside
the Company by leveraging functional
integrations of investment, overview(perspective) and experience

39

Report on Responsibility & Sustainability 2011

Goals for Social Value Creation
Create new markets based upon value
cycles—boundary redeﬁning synergistic
loops of value

Promote deal-changing innovation that redeﬁnes
P/L balances by extending and reconﬁguringindustry and market relationships

Redeﬁne existing business relationships into“win-win” partnerships

Social Value Creation Goals within the New Industry Development & Cross-function Business Unit
Through our business operations, including the“4R” business described below, the New
Industry Development & Cross-function
Business Unit is creating new value by
promoting innovations that enable thecommercialization of high-potential,
leading-edge technologies and the improvementof existing technologies to facilitatesocioeconomic progress at the earliest possible
opportunity. We are striving toward these goals
together with a variety of partners.
To build “win-win-win” relationships with ourhigh potential partners worldwide, we willcontinue to create new markets with asynergetic cycle of value creation to build a
low-carbon, recycling-oriented society.

Yasuyuki Abe
Director
Senior Managing Executive
Ofﬁcer
General Manager
New Industry Development &Cross-function Business Unit

CASE STUDY“4R” Business Aiming at Promoting Second-life Uses of Lithium-ion Batteries
Social & Environmental Context
The widespread use of electric vehicles(EVs), presumably one of the most effective
measures to reduce CO2 emissions fromthe transportation sector, needs to beurgently promoted to address global
environmental issues.

To increase the demand for EVs, it isimportant to overcome the major issues:cost and access to a charging infrastructure.
The key to overcoming these challenges isto reduce the cost to the end user by, forinstance, cultivating the second-life use
market for lithium ion batteries, the most
costly component of EVs. To make thishappen, efforts must be made that extend
beyond the automobile sector.

Smart grids* are attracting a lot of attention
as a next-generation power infrastructure ina low-carbon society. This renewable energy
requires storage devices that store excess
electricity in response to ﬂuctuations inenergy demand.

Business Overview
In September 2010, Sumitomo Corporation established 4R Energy Corporation, a joint
venture with Nissan Motor Co. Ltd. with the aim of commercializing second-life uses forthe lithium-ion batteries mounted on Nissan’s electric vehicles (EVs).
“4R” represents our initiatives to reuse, refabricate, resell and recycle batteries from
EVs. We are developing this business to cultivate the second-life use market for usedlithium-ion batteries from various angles.
In 2011, we started joint demonstration tests with housing companies of energy
storage systems linked to PV for single-family houses. Another demonstration test with
Nissan Motor is also underway as part of 4R’s efforts to develop medium-sized energy
storage systems for public and commercial facilities that need to reduce the power-usage
during peak hours and shift their peak demand hours.

Reuse

Refabricate

Second-lifeuses forbatteries withlarge remaining
capacity

Repackaging
to meetclient needs

RecycleResellRecovery of
raw materials

Resale for various purposes
Repair/replacement parts
Stabilizing output levelsof renewable energy

Capabilities to Provide Solutions
Taking a comprehensive view of multiple
related sectors, such as automobiles,
batteries, housing and commercial facilities,
we can coordinate and createcross-boundary projects with new value. We
can also identify business opportunities andtranslate them into new businesses.

We can plan and execute a new business basedon our broad operational experience in theautomobile industry from upstream (e.g.,
manufacturing) to downstream, as well as our
extensive expertise in a wide range of related areas,such as procuring raw materials for lithium-ion
batteries and manufacturing battery parts.

Taking advantage of the trust-based global
network of the Sumitomo Corporation
Group, we can make proposals toprospective partners in various sectors andcreate new value across multiple industries.

* Smart grid: The next generation power grid that aims at electricity demand/supply optimization by using information and communications technology (ICT)

Report on Responsibility & Sustainability 201140

Social Contribution Activities

Our Social Contribution Activities around the WorldThe Sumitomo Corporation Group, as a global organization, conducts social contribution activities aimed at addressing thesocial issues in many countries and regions around the world, while we work to further strengthen our relationships with local
stakeholders and respect its unique natures and conditions in various areas.
Our social contribution activities are not limited to social support activities such as volunteer work or charity but as much
more diversified.

In Europe, CIS, Middle East and Africa

In JapanSupporting Shakespeare’s Globe Theatre (UK) 1

Supporting the Junior Philharmonic Orchestra 5

Supporting Centrepoint to help young homeless people (UK) 2

Promoting “barrier-free” movies 6

Helping children with disabilities to attend school (Romania)

Cooperating in vocational training for people with disabilities

Supporting Japanese speech contests and Japanese festivals
for children in Moscow (Russia) 3

Donating part of the proceeds from a charity t-shirt saleby Marc Jacobs, a New York-based fashion brand,
to the New York University School of Medicine’s Interdisciplinary
Melanoma Cooperative Group 7

Supporting indigenous people as part of the timber businesswith Terneyles (Russia)
Sending instructors to give skiing lessons at the Japanese Schoolin Teheran (Iran)

Participation in and sponsorship for local clean-up activities
and various events 8Organizing events for local residents hosted by commercial
complexes of the Sumitomo Corporation Group

Supporting improvements to the educational infrastructure
for children (South Africa)

Cooperating in workplace tours and work experience programsfor students and local residents

Establishing a local community center in partnership with
Assmang Limited Chairman Desmond Sacco (South Africa) 4

Donating clothes and other goods to social welfare facilities
and bazaars to support international students 9

Supporting infrastructure and health care improvements
for the local community as part of the Ambatovy
Nickel Mine project (Madagascar)

Supporting environmental NPOs and NGOs through donations
to Keidanren Nature Conservation Fund and World Wide Fund for
Nature (WWF)Blood donation campaigns to support the Japanese
Red Cross Society

1

4

2

5

3

6

7

© 2010 Bushino Kakeibo Production Team

841

Report on Responsibility & Sustainability 2011

9

OBJECTIVE

The Sumitomo Corporation
Group’s Basic Principles on
Social Contribution Activities

ACTIVITIESAPPROACH

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

In Asia and Oceania

In Americas

Sumitomo Corporation Scholarship to help university students in Asia
(various Asian countries) 10

Supporting the Center on Japanese Economy and Business, Columbia
Business School (US)Helping children in poverty-stricken areas in Yunnan, Anhui and Kuangtung
provinces ﬁnish school (China)

Donation to the Stephen Lewis Foundation that works to prevent the AIDS
pandemic in Africa through the provision of education, health care services,food, etc. (US)Internship programs in Shanghai and Guangzhou, and gathering events in
Tianjin for university students (China) 11
Supporting programs of study tours to Japan for Chinese university
students (China)
Courses bearing the Sumitomo Corporation name at Tsinghua University(Beijing) and Nankai University (Tianjin) in China, and Hanoi National
Economics University and Foreign Trade University in Hanoi, Vietnam 12
Cooperating in workplace tours and work experience programs forstudents (Singapore) 13

Donation to Susan G. Komen for the Cure, the world’s largest supportingorganization for breast cancer patients (US) 15
Support for organizing Japan Day, an event to showcase Japaneseculture (US) 16
Donations to the Lincoln Center (US)Donations to the Metropolitan Museum of Art (US)Donations to the Japanese American National Museum (US)Supporting educational and infrastructure improvements for local
communities as part of overseas industrial park development projects (thePhilippines, Indonesia, Vietnam)

Donations to United Way of New York City (US)Supporting educational and health care improvements for local communities
as part of the Tanjung Jati B coal ﬁred power plant project and the Batu
Hijau Mine (copper, gold) project (Indonesia) 14

Supporting educational and infrastructure improvements for the local
community as part of the San Cristobal Mine (silver, zinc, lead)project (Bolivia) 17

Supporting Mid-Columbia Symphony (US)Japanese language education and culture learning for junior high school
students (Vietnam)
Donation to The Warren Centre for Advanced Engineering guaranteed by
the University of Sydney (Australia)

10

12

15

11

13

16

14

17

Report on Responsibility & Sustainability 201142

Third-Party Review

guide the Group through its efforts toward creating new value.
To ensure the Group can exercise its core competence, or the
integrated corporate strength, it is essential to develop employees
who can lead the organization—in other words, employees who
can act like a concertmaster in an orchestra, according to theanalogy used by President & CEO Susumu Kato. I can also see
clearly that the Sumitomo Corporation Scholarships offered indeveloping countries as well as the courses bearing the name of

Ms. Yoko Takahashi
President of Japan
Philanthropic Association

Sumitomo Corporation at overseas universities such as Tsinghua
University in China are conducted as part of its human resources
development efforts as a global organization. The Report’s
special article featuring a dialogue between Professor Davis and

The unprecedented damage caused by the Great East Japan

President Kato is commendable in that it delivers the Group’s

Earthquake on March 11, 2011, has served as a stark reminder

strong and compelling message that CSR is inherent to its

that, just as we cannot live without relying on the blessings ofbusiness operations.

nature, humankind is helpless against the overwhelming power of(1) a mobile phone project in Mongolia, (2) food businesses inrelationship between scientific and technological development andAsian countries based on the experience and know-how obtained

human wellbeing from the ground up.

from operations in Japan, and (3) a wide range of projects to

Reconstruction efforts in the affected areas should aim toachieve sustainable energy supply, are forward-looking activities

create new value, rather than merely bring those areas backfor the sake of future generations, and I assume the Group is

to what they used to be. Key themes of these efforts include

envisioning future expansion of those operations to create societal

creating urban areas which use resources effectively, creating

value. Especially, regarding a sustainable energy supply, thesetowns with organic connections linking their healthcare, welfare

pioneering initiatives by the Group strongly suggest that Japanand education systems, and creating local communities that value

should take a leadership role in creating and implementing abonding with people. Action is already being taken in various

roadmap toward a sustainable energy world.

fields on these key themes.

I’ve learned that Sumitomo Corporation held a series ofConsidering the roles expected of corporations in thisworkshops called the “Aritai” Project last year to discuss eachcontext, I have reviewed the Sumitomo Corporation Report onorganization’s ideal image of its business for the next 10 years,

Responsibility & Sustainability 2011 (the “Report”) to find that

as well as “growth stories” and roadmaps to achieve that ideal

efforts are already underway around the world to create newimages. Sumitomo Corporation’s new medium-term management

value. I believe the accumulated experience and know-how as wellplan, “f(x)” (f-cross), was formulated to incorporate the action

as the people who make up the Sumitomo Corporation Groupof the workshop, making visible and sharing long-term ideal(the “Group”) can make significant positive contributions to theimages on the front lines, as one of the four key actions of “f(x)”.

post-quake reconstruction process and hope to see the Group’s

To achieve the “cross-boundary growth”—meaning the growth

contributions in collaborating with related sectors.

together with all our partners across regional, generational, andA corporation’s management principles and action guidelines

43

I also note that the example projects introduced in the Report:

nature. The disaster has been a wake-up call for us to rethink theorganizational boundaries—specified in the management plan, thecome into play, especially when society stands at a watershed inentire Group needs to develop and implement specific actions.

its history. The Group is committed to its management principles,

I assume that a new section of the Report developed this year

including its commitment “to place prime importance on integrity

is a part of the Company’s efforts toward the same ends. In theand sound management with utmost respect for the individual”

new section, Sumitomo Corporation’s Directors, who are alsoand “to foster a corporate culture full of vitality and conducive toGeneral Managers of its seven business units, state their intended

innovation,” which I note characterizes the Group. This ethos issocial value creation goals and efforts with the case study articles,

also represented by its latest watchword, “Growing Together.”including their social and environmental context, their capabilities

Now more than ever before, these principles will be able toto provide solutions and their goals for social value creation ofReport on Responsibility & Sustainability 2011

each business unit. It is well summarized, taking into account thesociety, play a significant role in improving a company’s CSR-

impact of the relevant issues and each business unit’s actions

related capabilities gradually yet steadily over the long term.

on broader society. While this section is characterized as aExperience in these activities, which may seem irrelevant toreport based on the discussion and practices within and outsidebusiness operations, will serve metaphorically as a “compass”

the relevant business unit, it also represents the business unit’sthat indicates which way to go when addressing inconsistentcommitment towards the future. I believe this section will not only

perspectives in professional and personal lives, rectifying thesend a message to markets and society, but also inspire andimbalance between scientific and technological redevelopment

motivate the employees of the Group.

and Nature, and addressing other issues. As a next step, I hope

In closing, I also would like to comment on the Group’s social

the Group will bring the many activities covered by the Report tocontribution activities. The Group is conducting a wide variety

the next level from the CSR standpoint, evolving them into theof social contribution activities around the world, demonstrating

creative philanthropy that helps drive social change. I believe this

how a corporate citizen should be. A virtuous cycle is created bywill also be important for developing future leaders.

making these exemplary activities visible and sharing them broadly

The Report provides a testament to the Group’s serious andwithin the Group, which leads to fostering and strengthening

solid efforts to achieve its ambitious CSR objectives. As a reader,

the Group’s vibrant, open-minded culture. Social contribution

I look forward to future reports to see further enhancement andactivities, which of course make meaningful contributions toevolution of the Group’s activities in the future.

Response to the Third-Party Review
We would like to thank President Yoko Takahashi for her

with various partners across regional, generational andimportant review of the Sumitomo Corporation Report onorganizational boundaries. Our 2011 report presents

Responsibility & Sustainability 2011.

specific examples of these employees’ efforts under the

As she pointed out in her review comments, for thetheme of “Growing Together.” Another highlight of theGroup, fulfilling CSR means implementing our corporate

report this year is a new section that provides an overview

mission: “to achieve prosperity and realize dreams

of social value creation activities by our business units thatthrough sound business activities,” by firmly maintaining

operate a wide range of businesses. We hope this report

our management style; “to place prime importance on

will help readers to gain a better and more comprehensive

integrity and sound management with utmost respect

understanding of how the Group has been fulfilling its

for the individual,” and upholding our corporate culture;

responsibilities to society in our business activities. We will

“to foster a corporate culture full of vitality and conducive

continue to take various measures to create an even betterto innovation.” In other words, our CSR represents ourand more sustainable society together with our partners

Management Principles contributing to our “aim to be aworldwide by utilizing our original capabilities to provide

global organization that constantly stays a step ahead insolutions. Your continued interest in and support for our

dealing with change, creates new value, and contributes

CSR would be truly appreciated.

broadly to society.”
We are required to respond appropriately to paradigm

We at the Sumitomo Corporation Group will also continue
to do all we can to report our CSR to our stakeholders.

shifts taking place around the world, an example of which
includes a growing interest in developing a sustainable
society, particularly after the Great East Japan Earthquake.
Our employees are at the forefront of a variety of global
business arenas, striving to create new value, collaborating

Masayuki Doi
Chair of the CSR Promotion Committee
Director, Managing Executive Officer
General Manager, Corporate Planning & Coordination Group

Report on Responsibility & Sustainability 201144

For any inquiries or comments regarding this report,
please contact:

Environment & CSR Department

Sumitomo Corporation

1-8-11, Harumi, Chuo-ku, Tokyo 104-8610, Japan
Phone: +81-3-5166-3898 Fax: +81-3-5166-6310
Email: environment-and-csr@sumitomocorp.co.jp
URL: http://www.sumitomocorp.co.jp/english/
Printed in Japan