Dialogues with Experts

In April 2019, we sat down for a discussion with four experts
regarding our five materiality themes and our newly formulated
Medium-Term ESG Targets. From each of these experts, representing a variety of perspectives, we received assessments of oursustainability initiatives as well as advice regarding moving forward.

MAKIKO AKABANE / RUMI IDE / YUKI URAGO / JUNICHI MIZUOLOTTE’s materiality and Medium-Term
ESG Targets are highly comprehensible
The newly set Medium-Term ESG Targets focus on five themes, making them highlycomprehensible. It is also noteworthy that the theme of Sustainable Procurement
encompasses the three major raw materials of—cacao beans, palm oil, and paper.
Traceability of cacao beans, palm oil, and other primary commodities is particularly
important both in terms of food safety and reliability as well as sustainable procurement, and I hope that the company continues to work toward achieving these targets.
Looking toward the future, I advise LOTTE to ensure responsible supply chain management that takes into account not only environmental and human rights perspectives
but also animal welfare. As far as quality is concerned, it is commendable that allfactories, including those overseas, have acquired relevant. I also have high expectations for LOTTE’s new proprietary quality assurance system, one of the flagship initiatives within the Food Safety and Reliability category. While I am aware that thesustainability report has been renewed for this edition, I would expect an even higher
degree of disclosure on various initiatives taken by the company. For example, if thecompany discloses information on initiatives taken in their early stages, I believe it canstimulate active conversations both within and outside the company.

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SUSTAINABILITY REPORT 2019

Makiko Akabane
Director Japan, CSR Asia
Career History
Ms. Akabane majored in political science andbiology at Waseda University, and has over a
decade of experience specializing in CSR in
multi-sector and multinational companies. She
spearheaded the launch of CSR sections fora number of companies including Starbucks
Coffee Japan, Ltd., Salesforce.com, Inc., andNikko Asset Management Co., Ltd. She leads
CSR Asia Japan since 2010.

I hope the Company will hit its targets
while reflecting them within.
I am impressed that LOTTE has settled on numerical targets that are ahead of thoseset by the government. Generally speaking, medium– and long-term environmental
goals tend not to manifest quickly, so I would like the company to maintain continuousefforts. For this to take place, it is important that these targets are internalized within
the company. In my personal experience, one effective strategy is to use various incompany tools to regularly communicate these targets, while another is to communicate these targets in combination with the financial merits. As an example of thesecond strategy, one can take the goal of reducing food loss and waste and then explain
how it leads to lower costs. I believe it is also effective to raise awareness because
employees can then do simple actions, such as trying the 30/10 campaign* at socialgatherings.
My view on Environment as a theme is the same as last year, in that I would likecompanies to promote the 3Rs, with particular attention giving to “Reduce.” My hope isthat by reducing the amount of waste overseas we are able to realize the SDG of “leaving no one behind.” In addition, given the inevitability of natural disasters, I have acertain expectation of the company to put forth ideas for products that will improve thequality of life at emergency shelters, in addition to effective ways to eat them. Lastly,
looking at “Demonstrating Employees’ Abilities,” I would like LOTTE to set indicators
related to employee health.
* A campaign to reduce food loss and waste by having guests stay seated for 30 minutes after starting a party and returning to theirseats 10 minutes before the end, to encourage them to enjoy their meals

Rumi Ide
Journalist in the Problem of Food Lossand Waste
Career History
Ph.D. Kagawa Nutrition University (NutritionalScience), MSc University of Tokyo Graduate
School of Agricultural and Life Sciences, BSc
Nara Women’s University. After working at Lion
Corporation and then participating in JICA, held
various positions at Kellogg (JAPAN) K.K.
including section head in the PR department.
Founded office3.11 due to the appalling food loss
and waste of food aid during the 3.11 crisis. Put incharge of PR at Japan’s first food bank, where wewere then awarded the PR Award Grand Prix
Award of Excellence in Social Communication.
Wrote and published The Myth of Best-BeforeDates [Shoumi Kigen no Uso] (Gentosha LiteraryPublication) now in its 4th printing. Awarded
the 2018 Grand Prize in the category of “FoodCulture” for the Second Food Life Journalist
Award for her work focusing attention on the foodloss problem at a national level. Awarded the 2018Yahoo! News Editorial Section Author Award.

I would like greater communication of LOTTE’s
unique initiatives so more people can learn
about LOTTE’s appeal.

Yuki Urago
Secretary General, Consumers Japan** A nationwide liaison for consumer organizations that participates in various councils
and submits public comments to disseminate opinions on behalf of the consumer
regarding various life-related topics
Career History
Ms. Urago graduated from Kanagawa University.
After seven years of working at a company, shebecame involved in co-op activities while raisingchildren as a full-time housewife. After serving
as a director of the cooperative UCOOP and theJapanese Consumers’ Co-operative Union, she
assumed her current position in May 2017. Sheserves as a council member of the Ministry ofHealth, Labour and Welfare, the Food SafetyCommittee, the Consumer Affairs Agency, andthe Consumer Committee.

I find the contents of LOTTE’s efforts to be easy to understand as it goes through, with aclear path toward reaching these targets. The theme of Food Safety and Reliability holds
particular importance for consumers and is something that LOTTE needs to work atcontinuously. It goes without saying that this is something that needs to take place at
production sites, but at that same time proper inspections are also p­ articularly important. However, food itself comes with a variety of risks. I believe that storefronts andentrances are a very effective means of communicating this sort of information withconsumers, and I hope that LOTTE becomes aware of this in the future. I would also like
LOTTE to promote “food and health” through food education at a variety of locations,using experience-based and other easy-to-remember methods.
I believe that LOTTE should continue to promote its materiality initiatives, and at thesame time, I would like to see greater communication of these unique initiatives so that
more people can learn about LOTTE’s appeal. For instance, LOTTE has established awebsite about “kamukoto (chewing),” but if the effects of proper chewing can be communicated to a large population, including elderly people, LOTTE could potentially contribute to longer, healthier lives. From the viewpoint of Sustainable Procurement, I dobelieve it important that LOTTE be more active in the disclosure of its initiatives related
to cacao beans and other materials.

LOTTE CO., LTD.

SUSTAINABILITY REPORT 201919DIALOGUES WITH EXPERTS

The company deserves praise for taking theproper steps to formulate its materiality.

Junichi Mizuo
Emeritus Professor and Ph.D. in Business
Administration, Surugadai University
Outside Audit & Supervisory Board Member,
Daicel Corporation
Outside Member of the Business Ethics
Committee, Seibu Holdings, Inc.
Career History
After working at Shiseido Co., Ltd., Mr. Mizuo
was a professor at Surugadai University until his
retirement in March 2018, assuming his current
positions. He serves as Deputy Chairman ofthe Japan Society of Business Ethics Society,
Outside Member of the Business Ethics
Committee of Seibu Holdings, Head Researcher
at the Business Ethics Research Center, andin 2010 he was a visiting scholar at the Universityof London. As an author, he has publishedseveral works.

The company deserves praise for taking the proper steps to formulate its materiality.
In addition to current issues, the problem of plastic waste is gaining attention on theglobal stage. I would like LOTTE to look into a response to this issue in the future.
While the company has assembled five materiality themes, it is the employees
who are responsible for business activities, meaning the theme of Demonstrating
Employees’ Ability is the basis for all other themes, and that its related activities need
to be given the highest priority. Although LOTTE was recognized under the 2019 CertifiedHealth & Productivity Management Outstanding Organizations Recognition Program(White 500), I believe the company should continue to improve its health management
further and drive employee satisfaction even higher. In 2016, LOTTE established theDepartment of Employee Empowerment to promote diversity, and I expect that efforts
and results will be reported internally and externally. Specifically, I would like to see
the company establish a work culture that allows male employees to take childcare
leave. By establishing itself as a company where employees can be active members at
any life stage and irrespective of gender, LOTTE will raise its value as an organizationand draw greater attention from students as they enter the workforce. I would like to
see the Company continue its march forward, spurred on by the strong leadership oftop management.

Responding to the Experts

We will put our full strength behind reaching ourMedium-Term ESG Targets.

Kenichiro Sakai
Executive Officer
Head of Corporate Strategy Division
LOTTE CO., LTD.

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LOTTE CO., LTD.

SUSTAINABILITY REPORT 2019

We set new Medium-Term ESG Targets to ramp up our sustainabilityefforts. Starting from this fiscal year, we just kicked off specific actions
to reach these targets. Looking at these expert opinions, I can tell thatour direction is in keeping with the demands of society. Knowing this,we will put our full strength behind reaching these targets.
At the same time, these opinions have also contained valuable advice
pointing toward specific actions we can take, and have highlighted issues
we have yet to take into account. One particular example of an issue weneed to consider is that of plastic waste, which has received a lot ofattention from society. Moving forward, we will deepen internal discussions about how to address this issue. We will also continue to conduct
investigations based on the advice and opinions received from theseexperts, and continue to hold regular dialogues and listen closely tooutside opinions.