CSR FOR ITOCHU

CSR for ITOCHU Corporation
ITOCHU Corporation is pursuing multi-faceted corporate activities in various regions of the world and a wide
range of fields. As such, ITOCHU is well aware of its impact on the global environment and international society.
Being “Committed to the Global Good,” we will continue to contribute to building a sustainable society going forward.

ITOCHU Mission and Values
ITOCHU founder Chubei Itoh first launched a wholesale linen
business in 1858. For more than 150 years since, ITOCHU has
passed down the spirit of sampo yoshi (good for the buyer,
seller and society), a management philosophy embraced by

The ITOCHU group respects

Ohmi merchants that is the source of its CSR thinking today.

the individual, society, andAfter considering ways to demonstrate its commitment to
the future in its Commitment

society as an international corporation and to put this commit-

to the Global Good.

ment into practice, in 1992 ITOCHU formulated “Committed to
the Global Good ” as a corporate philosophy. The conceptual
framework for this philosophy was reorganized in 2009. In
order for all employees to properly understand the responsibility that the ITOCHU Group is charged with fulfilling for society
and to make this philosophy an integral part of actions every-

Am I communicating vision and moving forward with others?

day, its core element, “Committed to the Global Good,” was
Am I proud to say I am involved in the work?

set as the ITOCHU Mission for the entire ITOCHU Group.
Accompanying this is a new set of five values, called the

Am I including the ideas and skills of a variety of people
to create the best result?

ITOCHU Values, considered vital for enabling each employee to

Am I taking responsibility for and caring intensely about
what I am doing?

fulfill their role in realizing the ITOCHU Mission. To embed the
ITOCHU Values, ITOCHU has formulated “5 self-tests” that

Am I actively trying new things and pursuing innovative solutions?

employees can refer to in order to determine that the fivevalues are present in their actions.

The Ten Principles of the United Nations Global Compact

ITOCHU’s Participation in the
United Nations Global Compact

Human Rights
Principle 1: Businesses should support and respect the protection of internationallyproclaimed human rights; andPrinciple 2: make sure that they are not complicit in human rights abuses.

LabourPrinciple 3: Businesses should uphold the freedom of association and the effective
recognition of the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labour;
Principle 5: the effective abolition of child labour; andPrinciple 6: the elimination of discrimination in respect of employment and occupation.

Environment
In April 2009, ITOCHU Corporation joined the United Nations

Principle 7: Businesses should support a precautionary approach to environmental
challenges;
Principle 8: undertake initiatives to promote greater environmental responsibility; andPrinciple 9: encourage the development and diffusion of environmentally friendly technologies.

Global Compact, a global initiative to achieve the sustainablegrowth of the international community. In compliance with the
Global Compact’s ten principles in the areas of human rights,
labour standards, the environment and anti-corruption, ITOCHU

Anti-corruption

is striving to fulfill its corporate mission of “Committed to the

Principle 10: Businesses should work against corruption in all its forms, including
extortion and bribery.

Global Good.”

6

CSR for ITOCHU Corporation

Sampo Yoshi and ITOCHU CSR

Basic perspective on CSR at ITOCHU

ITOCHU Corporation is strongly aware that companies are also members of society, and that a company cannot remainsustainable unless it coexists with society as a good corporate citizen, and meets the expectations of society throughits business activities. We at ITOCHU Corporation believe that corporate social responsibility (CSR) lies in corporate
thought and action on the question of how to play a role in building sustainable societies through business activities.
This approach ties into a management philosophy of sampo yoshi held by the Ohmi merchants, which forms thecornerstone upon which our founder Chubei Itoh built his business. We believe that it is our mission to understanddiverse values as a truly global enterprise, meet the expectations of society, and continue to be a company that isneeded by society.

Our founder Chubei Itoh and sampo yoshi

ITOCHU traces its origins back to 1858, the year in which
Chubei Itoh set out from Toyosato Village in Shiga
Prefecture on a journey to Nagasaki as a traveling linen
merchant.
Chubei Itoh grounded his business in the spirit of sampo
yoshi, a management philosophy embraced by merchantsin the feudal province of Ohmi, where he was born. In
adherence with their sampo yoshi philosophy, as well as
being good for the seller and the buyer, Ohmi merchants

Our founder Chubei Itoh(1842-1903)

contributed to the economies of the regions they visited.
In the shogunate era, Ohmi merchants came into
existence and their economic activities were permitted
because they were regarded as being good for society.
This can be said to be the roots of today's idea of CSR,
which calls on companies to balance their businessactivities with the interests of a variety of stakeholders.
That spirit is evident in Chubei Itoh's personal motto,“Trade is a compassionate business. It is noble when it
accords with the spirit of Buddha by profiting those whosell and those who buy and supplying the needs ofsociety.”7

Ohmi merchants(courtesy of Museum of
Ohmi Merchant)

CSR for ITOCHU Corporation

The roots of a management philosophy passed down for 150 years

Our founder Chubei Itoh established a “store law” in 1872. Also, he adopted a meetingsystem. The store law was a set of house rules covering what in modern parlance wewould call management philosophy, a human resources system, and employment
regulations, which subsequently became the foundation of ITOCHU Corporation's
management philosophy. Emphasizing communication with employees, Chubei Itohchaired meetings himself. Moreover, he incorporated a series of what were at the time
groundbreaking management systems, including the codification of “sharing of profit by
three parties” (*) and Western bookkeeping methods. Those initiatives built thefoundations of mutual trust between the store owner and employees. Since that era, wehave based our corporate management on CSR.
*

Sharing of profit by three parties: In a predominately feudal era, this was an extremely
progressive philosophy of sharing profits with employees. The store's net profit was divided
among three parties: the store owner, the store's reserve fund, and store employees.

A daifukucho ledger fromthe time of ITOCHU's
founding

150 years of history and CSR

In 2008, ITOCHU Corporation marked its 150th anniversary. Why has ITOCHU continued
to develop? Because ITOCHU has over 150 years put into practice the spirit of sampo
yoshi, a management philosophy trumpeted by Ohmi merchants that is the source of its
CSR thinking today. At the same time, as the business environment has changed withthe times, ITOCHU has built a corporate culture that anticipates change and turns it into
opportunities.
Since its foundation, ITOCHU Corporation has consistently thrived despite the turmoil it
has faced in different eras, including two world wars and periods of economic volatility.
Launched as a trading company mainly handling textiles, ITOCHU Corporation has
fulfilled the role of a trading company that has responsively changed according to thedemands of each generation while significantly changing its product and businessportfolios-expanding its sphere of influence to include areas from upstream raw
materials through to downstream consumer sales. As it has grown, ITOCHU Corporation
has evolved into a general trading company and from there into a globally integrated
corporation.
We are convinced that our history has continued for 150 years because we have surely
upheld and passed on the spirit of sampo yoshi while remaining an essential componentof society by responding to changes in its expectations in different eras.

8“Itoh Itomise” thread andyarn store at the time of its
opening in 1893

CSR for ITOCHU Corporation

Basic Policy on CSR and Promotion System

Approach to CSR promotion at ITOCHU Corporation

We at ITOCHU Corporation believe that fulfilling our social responsibility through our business activities is important.
To make sure that CSR is systematically implemented involving the whole organization, we established basic policies
for CSR promotion as a corporate-wide policy and drafted CSR action plans in each organization to promote CSR.
In addition, we communicate with our various stakeholders to grasp the expectations and demands of society towards
our company and leverage these for the promotion of CSR.

Basic Policies for CSR Promotion

Alongside the drafting of its management plan, ITOCHU
formulated basic policies for CSR promotion, with the aimof globally promoting CSR with direct linkages to the
management plan.
In the “Basic policies for CSR promotion” during theperiod of the “Brand-new Deal 2012” plan, which covers
fiscal 2012 to fiscal 2013, we made revisions to reflect
the results of an annual employee questionnaire about
the Company's CSR Report. Below are the main points of
the new policy.

1.Strengthening communication with stakeholders through a front-line approach
Strengthening front-line capabilities is one of the basic policies of the medium-term management plan. At the business
front-lines of all division companies, ITOCHU will work to understand the needs of stakeholders through more intensive
communication with them by each and every employee, and take advantage of and reflect those needs in businesses
and operations.
2.Promoting businesses that help solve social issues
A sustainable society is essential for ensuring the continuity of businesses. In order to ensure the continuation of one's
businesses, a company must do what it can for society through its businesses to help solve social issues such as
climate change and human rights abuses. ITOCHU aims to help solve social issues through businesses that respond tosocial needs.
3.Strengthening supply chain management (Respect for human rights and consideration for theenvironment)
As a company that develops business around the world, ITOCHU views supply chain management as an important
issue to be addressed. Preventing human rights, labor, environmental and other problems, and working for
improvement together with suppliers, ITOCHU in April 2009 formulated “ITOCHU Corporation CSR Action Guidelines for
Supply Chains.” Based on these action guidelines, ITOCHU conducts annual supplier surveys regarding human rights,
labor, the environment and other matters, and requests suppliers' understanding of ITOCHU's approach and suppliercooperation in putting it into practice.
4.Promoting education on CSR and environmental conservation
The expression of CSR rests in the hands of each individual employee. This is why it is critical that all employees
correctly understand the kind of CSR that the ITOCHU Group should engage in. In a bid to have a CSR mindset takeroot among all employees, ITOCHU conducts education on CSR and environmental conservation through a wide rangeof training and other programs, and all organizations conduct lively discussions about CSR action plans.

9CSR for ITOCHU Corporation

5.Involving in and contributing to development of local and global communities
ITOCHU is a member of the local communities where it has a business base. At the same time, it is a member of the
global community. Accordingly, in areas even outside the Company’s main business, ITOCHU aims to actively
participate in society as a member of the local community and the global community and contribute to development at
both levels.

CSR promotion through CSR action plans

ITOCHU Corporation conducts various businesses through five Division Companies, the Construction & Realty Division,and the Headquarters Business Organization. To reliably promote CSR in our businesses, each Division Company
defines the CSR issues that are important in its business and formulates the “CSR action plans,” and execute thembased on a PDCA cycle system.
In actual practice, the responsible sales divisions draft and execute the CSR action plans under the lead of the generalmanager of the Planning and Coordination Department and the staff in charge of CSR promotion of each Division
Company.
CSR action plans are also formulated and exercised by each organization such as the Headquarters' administrative
divisions, domestic branches and offices as well as overseas bases in line with the respective businesses and functions.
A pillar of our CSR promotion is that every employee understands the plans and steadily executes them in his or herjob.

CSR promotion system at ITOCHU Corporation

At ITOCHU Corporation, in April 2011 the CSR Promotion& Global Environment Department was moved into the
Corporate Communications Division, with the aim ofenhancing communication with stakeholders. This
department plans and proposes strategies for promoting
CSR, which are deliberated and discussed by the CSR
Committee. ITOCHU also forms a CSR Report Editing
Taskforce, which is made up of members from each
Division Company and administrative divisions. This
taskforce discusses production of the CSR report and CSR
promotion measures.

CSR promotion system

10

CSR for ITOCHU Corporation

Stakeholder Relations

Stakeholders of the ITOCHU Group

Approaching CSR through dialogue with our stakeholders.
In our diverse range of corporate activities conducted worldwide, we place strong emphasis on dialogue with the many
stakeholders that surround ITOCHU. Through these efforts, we promote CSR activities to help solve social issues bycomprehending the expectations and concerns that industry and regional society may have regarding ITOCHU andreflecting this understanding in our business activities.

*

Besides those noted above, the list of our major stakeholders includes many other parties, such as NGOs and NPOs,
financial institutions, government ministries and agencies, mass media, and the coming generations.

11CSR for ITOCHU Corporation

Respect for Human Rights

Policy on Respect for Human Rights

Corporate Philosophy and Code of Conduct of the ITOCHU GroupThe ITOCHU Mission "Committed to the Global Good" stands at the heart of the ITOCHU Group's corporate philosophy.
The “Global good” refers not only to improved living standards, but also a general sense of well-being. ITOCHU, as acompany with diverse operations worldwide, respect human rights and individuality, and is commited to the global
good of society and individuals alike.
Accompanying this corporate philosophy, the ITOCHU Values consist of five values important for fulfilling the ITOCHU
Mission “Committed to the Global Good.” One of those values is “Diversity,” under which the Group holds the humanrights and individuality of every person as important.
Guided by this approach, the Group clearly prohibits the violation of human rights and sexual harassment in its
employment regulations, and has outlined punitive measures to be taken against those who engage in such conduct.

Excerpt from the ITOCHU Group Philosophy and Code of Conduct Booklet
Respecting human rights and individuality
We value the rights and individuality of each person. We show respect and are attentive to others regardless ofgender, race, religion, or position. We don’t discuss matters that cause discomfort; we don’t discriminate or
harass; we respect basic labor rights and eliminate forced labor and child labor.

United Nations Global Compact
ITOCHU Corporation supports the principles of the United Nations Global Compact, guaranteeing the fundamental laborrights of its employees.

Excerpt from the United Nations Global Compact
Human Rights
Principle 1:Businesses should support and respect the protection of internationally proclaimed human rights;
andPrinciple 2: make sure that they are not complicit in human rights abuses.

Raising Awareness Internally of Respect for Human Rights

Raising awareness through internal training programs
We work to extensively embed understanding of human rights through training programs held each year.
Workshops for Organization Heads
Preventions against sexual harassment and power harassment are discussed at training workshops for all of generalmanagers and managers in the company.

12

CSR for ITOCHU Corporation

Training for New Recruits
In the training program for new recruits, they are instructed to acquire the proper mindset for respecting human rightsthat they should have as members of the ITOCHU family.

FY2010Workshops for Organization Heads

972 people (*)

466 people

190 people

147 people

Training for New Recruits*

FY2011

Held twice in fiscal 2010 (471 in first half of year, 464 in second half)

Establishment of a 24-Hour Employee Consultation Desk System
Employee Consultation Desk and Hotline
ITOCHU has set up an employee consultation desk to allow employees todiscuss problems they may be individually confronting. A “HR Help Guide
Book” has also been posted to the ITOCHU intranet, and efforts to broadly
raise employee awareness of the consultation desk are made as part of astructure that allows employees to consult on issues of concern. An external
Hotline System staffed by independent counselors has also been established.

The “HR Help Guide Book” posted on
the intranet
Career Counseling Center
ITOCHU was one of the first Japanese companies to establish its own Career Counseling Center, where employees canconsult regarding not only their individual careers, but on workplace culture, interaction with colleagues, remuneration,harassment, and other issues. Consultations can take place via phone, fax, email, post, or other means, and are dealt
with by expert office staff.

Raising Awareness Through Various Publications
In an effort to avoid violations of human rights in the workplace, ITOCHU strives to raise awareness of human rights
through a variety of publications distributed to all employees.
ITOCHU’s basic stance regarding respect for human rights is conveyed in a booklet explaining the ITOCHU Group’s
corporate philosophy and code of conduct to all employees.
The Compliance Handbook has pages on respect for human rights, as well as power and sexual harassment, giving
concrete examples of such conduct in an effort to avoid any violations of human rights in the workplace.
A pocket-sized card on proper workplace etiquette details rules on the strict prohibition of any forms of harassment.

Fair and Honest Recruitment
At ITOCHU, recruitment decisions are based solely on an individual’s abilities and merits, for fair and honest
recruitment practices without regard for age, sex, or nationality. A watchdog system for ensuring fair and honest
recruitment is also in place, and employees are selected and notified to serve as watchdogs and to promote awarenessof human rights.

Human Rights in the Supply Chain

Consideration for human rights and labor in the supply chain is an important CSR issue for companies with transactions
that take place on a global scale.
At ITOCHU, each Division Company surveys the actual situation in this regard among its suppliers, checking to ensurethat suppliers are not engaged in forced labor, child labor or any other immoral labor practices.
Click here to read more about surveying actual labor practices in the supply chain.

13

CSR for ITOCHU Corporation

Penetration of CSR at ITOCHUCSR Report 2010 questionnaire for employeesWith publication of the CSR Report 2010, an Employee Questionnaire Survey was conducted again to deepen andassess CSR awareness. This year, 79.1% of the 7,073 employees responded to the survey, a total of 5,598
respondents.
In the questionnaire, ITOCHU Corporation employees selected "promoting businesses that help solve social issues" as
the top theme that ITOCHU Corporation should address; it was the third-highest theme among employees of overseas
blocs. As such, it was made one of the "Basic policies for CSR promotion" in the “Brand-new Deal 2012 (*) .” ITOCHU
will continue to reflect the opinions of employees in CSR, while promoting CSR through its business activities.
*

ITOCHU Corporation FY2011-FY2012 Medium-Term Management Plan

Replies to the CSR Report 2010 questionnaire for employees
Questionnaire for

Questionnaire for

employees of

employees of

ITOCHU Corporation

overseas blocs

Total

Number of employees

5,160

1,913

7,073

Number of replies

4,343

1,255

5,598

Reply rate

84.2%

65.6%

79.1%

<Questionnaire Results Excerpt> CSR Issues that ITOCHU Corporation should address
Questionnaire for employees of

Questionnaire for employees of

ITOCHU Corporation

overseas blocs

１

Promoting businesses that help solve social issues

Relationships with employees

２

Ensuring a transparent corporate governance

Global warming countermeasures

structure

３

Employees relations

Promoting businesses that help solve social issues

14

CSR for ITOCHU Corporation

CSR workshops

As one measure for promoting CSR, the Company holds CSR Workshops ineach organization, where employees take part in discussions about important
CSR themes.
In the CSR Workshops held in fiscal 2011, 10 themes were set with reference
to CSR Report 2010. These themes included “the work of my department and
CSR,” “supply chain management,” “social contribution activities,”“environmental measures,” and "ITOCHU's corporate image." The workshops
were a forum to debate and exchange views on selected themes in eachorganization. 163 workshop reports were submitted, which were attended bya total of 2,238 people.

A CSR Workshop

The most-selected theme was “the work of my department and CSR,” which was chosen by 63 departments. This wasfollowed by “ITOCHU’s corporate image,” with 41 departments selecting this theme for discussion and debate. A large
number of departments also selected multiple themes for discussion.
Employee questionnaires on the CSR Report every year together with workshops are expected to deepen individual
employee understanding of CSR. Participants in the CSR Workshops expressed positive opinions about them, such as“this sort of opportunity was a meaningful use of department meeting time,” and “I was able to exchange opinionswith colleagues about something we don't normally give much thought to during the course of our normal workday.”We will continue to hold these workshops and think about theme selection and other points for future workshops.

CSR seminars

We regularly organize internal CSR seminars to incorporate the views andopinions on various CSR issues from outside experts.
We plan to continue CSR seminars focusing on CSR issues that requireparticular attention.

Inside CSR seminar of the 2010 6thtime

Internal CSR Seminars in the past
1st seminar

Human rights / labor issues

2nd seminar

Global warming and the business of general trading companies

3rd seminar

The social impacts and roles of information technology in Japanese society

4th seminar

Loss and recycling in food distribution

5th seminar

Biodiversity and corporate initiatives

6th seminar

Procedures for assessing environmental and social risk in project finance

15

CSR for ITOCHU Corporation

Implementing CSR Initiatives at Group Companies

Since fiscal 2007, we have been gradually expanding CSR promotion for majorgroup companies, based on the model methods of ITOCHU Corporation;
establishing CSR action plans and executing these in PDCA cycles. By fiscal
2011, an accumulated total of 48 companies established CSR action plans.
In fiscal 2011, we held CSR training for group companies. The training
program involved workshops that introduced examples of group companies
within the ITOCHU Group that are engaged in advanced initiatives and thelatest trends in CSR, as well as ISO 26000, which was issued in November
2010. Two training sessions were held and were attended by employees from37 companies.

Workshop for CSR representatives ofgroup companies

Looking ahead, we plan to promote the development of CSR according to the nature of the business and scale of eachgroup company.

Group companies targeted for CSR implementation at a glance

Organization
Textile Company

Companies targeted
ITOCHU FASHION SYSTEM Co., Ltd., ROY-NE CO., LTD., ITOCHU MODEPAL
CO., LTD, CI SHOPPING SERVICE CO., LTD., ITOCHU Home Fashion
Corporation

ICT & Machinery Company

ITOCHU Plantech Inc., ITOCHU Automobile Corporation, ITOCHUCONSTRUCTION MACHINERY CO., LTD., ITOCHU Techno-Solutions
Corporation, ITC NETWORKS CORPORATION, ITOCHU ELECTRONICS CORP.,
CAPLAN Corporation, JAPAN AEROSPACE CORPORATION, NANO Media Inc.,
ITOCHU MACHINE-TECHNOS CORPORATION, ITOCHU SysTech Corporation,
ACRONET Corp.

Energy, Metals & Minerals

ITOCHU Metals Corporation, ITOCHU Oil Exploration Co., Ltd.

Company
Chemicals, Forest Products &ITOCHU KENZAI CORPORATION, ITOCHU CHEMICAL FRONTIER Corporation,

General Merchandise

ITOCHU PLASTICS INC., ITOCHU PULP & PAPER CORP., ITOCHU CERATECH

Company

CORPORATION, The Japan Cee-Bee Chemical Co., Ltd., Chemical Logitec
Co., Ltd., VCJ Corporation, ITC Green & Water Corp., ITOCHU Windows Co.,
Ltd., C.I. Kasei Co., Ltd.

Food Company

Yayoi Foods Co., Ltd., ITOCHU Feed Mills Co., Ltd., ITOCHU Rice
Corporation, ITOCHU Sugar Co., Ltd., I-FOODS Co., Ltd., ITOCHU FRESH
Corporation, Universal Food Co., Ltd., NIPPON ACCESS, INC.

Construction & Realty Division

ITOCHU PROPERTY DEVELOPMENT, LTD., ITOCHU Urban Community Ltd.

Headquarters Business

ITOCHU LOGISTICS CORP., FX PRIME Corporation, ITOCHU Orico Insurance

Organization

Services Co., Ltd., Superex Corporation.

16