Sustainability Medium-term Plan 2026

Overview of the Sustainability Medium-term Plan 2026

NEW

June 2022
release

1. Sustainability at the Inabata Group2. Materiality: Descriptions and Relevant Business Segments

NEW

3. Materiality: Risks, Opportunities, and Main Initiatives

NEW

4. Materiality: Long-term Vision, Strategy, KPIs, and Targets© 2024 Inabata & Co., Ltd.

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1. Sustainability at the Inabata GroupThe Inabata Group has continued to manage its business with a respect for people basedon trust, in keeping with its Mission, “People come first, based on the spirit of ‘love (ai)’and ‘respect (kei),’ and together we strive towards contributing to the development ofsociety.” We believe that this commitment to valuing people and society can contribute to
the realization of a sustainable society, which is the goal of the international community
today.
Over the past several years, we have seen a clear acceleration in social trends
demanding sustainable corporate management. We acknowledge this as evidence that
there are greater expectations on corporations and the business sector to address amountain of social issues that need to be resolved, such as environmental conservation,
respect for human rights, attention to the employee working environment, and fairtransactions.
These social issues represent a major risk to corporate activities in the future. However,
we also believe that, by taking proactive and appropriate action, we will find major
opportunities for sustainable growth at our Group. That is why we address sustainability
as an important management issue.
Over the more than 130 years since our founding, we as a trading company have fulfilled
the role of resolving our customers’ ever-changing challenges from their perspectives andconnecting the value chain in better ways, while responding promptly to the socialchanges of the time and contributing to the needs of customers and society. As we live inan age where prospects are uncertain and the future is difficult to forecast, we believe
this approach of ours will enable us to play an even more important role through theprovision of value that takes account of risks and opportunities.
To make ourselves necessary to society as a trading company in a timeless manner, we
strive to enhance corporate value over the long term and realize a sustainable society
through the whole range of our business activities.
© 2024 Inabata & Co., Ltd.

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2. Materiality: Descriptions and Relevant Business Segments
The Inabata Group’s materiality consists of three material issues associated with creating sustainable value that the Group aims
to realize through the provision of products and solutions, and three material issues associated with strengthening the foundation
for business continuity that constitutes the basis of corporate activities.

Creating Sustainable Value
Materiality

Key points

Contributing to a decarbonized
and circular society,sustainable use of natural capital

We will focus on environment-related businesses, such as environmental load-reducing products, inareas including renewable energy, alternative fuels, recycling, and electric vehicles to build adecarbonized and circular society. We will also promote the sustainable use of natural capital in ourbusinesses related to building materials and food. We will take steps based on our environmental
management system to reduce GHG emissions, reduce waste and increase the reuse of resources,
prevent pollution, and conserve water resources and biodiversity to conserve the environment.

Contributing to safety, security,
and well-being

We will provide solutions that contribute to safety, security, and well-being through our mobility, food,and life science businesses. Chemicals are fundamental to a wide range of industries. We will maintaina high awareness of the responsibility associated with chemical substance management, product safety,
and quality.

Providing value through resiliencein procurement and supply
functions

Providing flexible and optimal dealings is an important function of Inabata Group as a trading company.
In an uncertain, unpredictable society, the functions of the Inabata Group provide even greater value asa solution provider for changing customer and social needs.
We will deliver value through resilience in procurement and supply functions by strengthening our
supply chain management. To achieve this, we will use our global network and leverage ourmultifaceted functions as a trading company, such as product development, partnerships, and logistics
expertise.

© 2024 Inabata & Co., Ltd.

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2. Materiality: Descriptions and Relevant Business Segments
The Inabata Group’s materiality consists of three material issues associated with creating sustainable value that the Group aims
to realize through the provision of products and solutions, and three material issues associated with strengthening the foundation
for business continuity that constitutes the basis of corporate activities.

Strengthening the Foundation for Business Continuity
Materiality

Key points

Respecting human rights in thespirit of love (ai) and respect (kei)and growing together with local
communities

We respect the human rights of stakeholders associated with Inabata Group activities based on ourcore value of respecting people with the spirit of love (ai) and respect (kei).
We will share value with the people and to develop and grow with the local communities where we dobusiness around the world.

Fostering and strengthening thehuman capital driving the value
creation

People driving the creation of new value are the Group’s greatest asset. People trusted by our clients tobecome their best partners by demonstrating high ethics, passion, and providing solutions from a global
perspective are the source of sustainable value creation. The resourcefulness of our employees is whatenables us to continuously produce value.
We believe that an organizational culture that recognizes diversity and values free and open
discussions and teamwork will have high employee satisfaction and will support ongoing sustainablegrowth for both employees and the Company. We will continue to promote new workstyles, diversity &inclusion, employee engagement, human resource education and skill development, and occupationalsafety and health.

Enhancing governance and risk
management

We maintain a strong corporate governance system as a fundamental element of our continuous efforts
to enhance corporate value. The system ensures management transparency and fairness provides afoundation for swift and decisive decision-making.
We are also strengthening group governance in Japan and overseas and are fortifying our risk
management, which encompasses compliance, corruption prevention, business continuity management,
and information security.

© 2024 Inabata & Co., Ltd.

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2. Materiality: Descriptions and Relevant Business Segments
The materiality of creating sustainable value identifies the areas where our business is focused. The table below outlines how
the focus areas are linked with the business segments.

Creating Sustainable Value
Information& Electronics

Chemicals

Renewable energy★

★

Alternative fuels★

Recycling★

★

★

Electric vehicles

★

★

★

Materiality

Contributing to a decarbonized
and circular society

Sustainable use of natural
capitalContributing to safety, security,
and well-being© 2024 Inabata & Co., Ltd.

Plastics★

Building materials★

Food
MobilityLife Industry

★

★

★

Food

★

Life Science

★

★

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3. Materiality: Risks, Opportunities, and Main Initiatives
Creating Sustainable ValueContributing to a decarbonized and circular society;sustainable use of natural capital
Response

Risks and Opportunities
Risks≫

Rising costs associated with stricter policies, laws, and regulations for climatechange≫Lower earnings associated with stricter policies, laws, and regulations and lower
consumer demand for petroleum-based plastics≫

Lower earnings associated with changes in production areas, yield, quality, etc.
of agricultural and marine products due to climate change≫

Reputational decline and exclusion from supply chains due to inadequate
disclosure of climate change impacts and natural capital use≫

Damage to Company bases and supply chain disruptions due to intensifying
extreme weather events≫

Reputational decline due to greenwashing

Main Initiatives

Risk

Opportunities◼ Promote activities to reduce GHG emissions toward
carbon neutrality◎◎◼ Introduce renewable energy◎◎◼ Disclose information appropriately in accordance with
the Task Force on Climate-related Financial
Disclosures (TCFD) recommendations and other rules○○◼ Expand sales from the environment-related business(e.g., clean technology)◎◼ Acquire sustainability certifications○

Opportunities≫

Growing demand for renewable energy and batteries≫

Growing demand for products adapted to changing corporate and consumer
behavior associated with global warming≫

Growing demand for biomass, recycled, and biodegradable plastics and the like≫

Growing demand for sustainable agricultural and marine products≫

Higher corporate evaluation owing to the consistent promotion of environmental
activities and appropriate information disclosure◼ Formulate, revise, and operate business continuity
plans (BCPs)○○◼ Diversify suppliers and outsourcing partners, anddecentralize inventories◎◎

Note: The symbols in the Response column indicate the importance of the initiatives (◎＞〇).
© 2024 Inabata & Co., Ltd.

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3. Materiality: Risks, Opportunities, and Main Initiatives
Creating Sustainable ValueContributing to safety, security, and well-being
Response

Risks and Opportunities
Risks≫

Rising costs and exclusion from supply chains associated with stricter policies,
laws, and regulations for chemical substances≫

Rising costs at manufacturing bases associated with stricter regulations
concerning product safety and quality≫

Exclusion from supply chains as a result of inadequate measures or information
management concerning product safety and quality in the trading company
business≫

Reputational decline and higher litigation risk as a result of inappropriate
responses to local communities and residents concerning environmental andother aspects at manufacturing bases

Opportunities≫

Growing demand for businesses related to safe and reliable foods as a result ofchanging consumer needs≫

Growing demand for the life science business as a result of the spread of
infectious diseases and their prevention≫

Growing demand for environmentally and socially conscious components, etc. in
the mobility-related business≫

Higher reputation and credibility as a result of appropriate disclosure andsharing of information about safety and security in the value chain based onrecognition that products are ultimately provided to consumers

Main Initiatives

Risk

Opportunities◼ Strengthen management of compliance withchemical substances regulations◎◎◼ Strengthen product safety, quality control, and thepertinent measures required of a trading company○○◼ Strengthen supply chain and value chain
management◎◎◼ Expand the food-related business◎◼ Expand the life science-related business◎◼ Expand the mobility-related business◎Note: The symbols in the Response column indicate the importance of the initiatives (◎＞〇).
© 2024 Inabata & Co., Ltd.

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3. Materiality: Risks, Opportunities, and Main Initiatives
Creating Sustainable Value

Providing value through resilience in procurement and supply functions
Response

Risks and Opportunities
Risks≫

Supply chain disruptions due to natural disasters, infectious diseases, and otheremergencies≫

Supply chain disruptions due to geopolitical risk≫

Supply chain disruptions as a result of inadequate measures to manage
inventories, transport, and outsourcing partners≫

Reputational decline and exclusion from supply chains as a result of inadequate
efforts to source minerals responsibly≫

Reputational decline and exclusion from supply chains as a result of inadequate
measures to address human rights risk in the supply chain≫

Reputational decline and exclusion from supply chains as a result of inadequate
measures to quantify and reduce GHG emissions (Scopes 1, 2, and 3)

Opportunities≫

Increases in sales opportunities as a result of appropriately addressing
geopolitical, environmental, social, and other global risks and providing optimal
solutions for client supply chains≫

Greater value provision as a result of building robust supply chains that properly
manage inventories, transport, and outsourcing partners≫

Greater resilience in business activities owing to the appropriate formulation andoperation of BCPs≫

Higher credibility from business partners through appropriate disclosure of GHG
emissions and other information

Main Initiatives

Risk

Opportunities◼ Strengthen supply chain management that takes
account of geopolitical, environmental, social, andother global risks◎◎◼ Formulate, revise, and operate BCPs○○

◼ Diversify suppliers and outsourcing partners, anddecentralize inventories◎◎◼ Appropriately respond to requests from business
partners, including information disclosure andquestionnaires○○◼ Implement human rights due diligence (DD) in the
supply chain◎◎◼ Ensure responsible minerals sourcing◎◎

Note: The symbols in the Response column indicate the importance of the initiatives (◎＞〇).
© 2024 Inabata & Co., Ltd.

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3. Materiality: Risks, Opportunities, and Main Initiatives
Strengthening the foundation
for business continuity

Respecting human rights in the spirit of love (ai) and respect (kei) andgrowing together with local communities
Response

Risks and Opportunities
Risks≫

Litigation risk, reputational decline, and lower productivity due to human rights
violations in the Company or Group companies≫

Litigation risk and reputational decline due to human rights violations at bases,
etc. in the local community≫

Operational stoppages, reputational decline, and worker shortages caused bybacklash from the local community≫

Operational stagnation or stoppages due mainly to shrinking economy, worker
shortages, and deteriorating security as a result of community erosion

Opportunities≫

Higher reputation resulting from corporate attitudes and actions that respecthuman rights≫

More vibrant workplaces and higher productivity through respect for humanrights at the Company and Group companies≫

Smoother business operations as a result of building relationships of trust andgrowing together with the local community

Main Initiatives

Risk

Opportunities◼ Implement human rights DD (human rights DD
digital survey) in the Company and the Group◎◎◼ Instill the corporate philosophy, and implementhuman rights education, in the Company and the
Group

◎

◎

◼ Strengthen compliance and anti-corruption efforts◎○◼ Raise awareness of the internal whistleblowing
system◎○◼ Create opportunities to engage with external
stakeholders○○◼ Promote social contribution activities○○

Note: The symbols in the Response column indicate the importance of the initiatives (◎＞〇).
© 2024 Inabata & Co., Ltd.

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3. Materiality: Risks, Opportunities, and Main Initiatives
Strengthening the foundation
for business continuity

Fostering and strengthening the human capital driving the value
creation
Response

Risks and Opportunities
Risks≫

Lower productivity and competitiveness due to a decline in employee well-being(state of being physically, mentally, and socially satisfied)≫

Lower productivity and competitiveness due to a decline in employee skills andabilities≫

Incorrect assumptions, judgment errors, and lower competitiveness due to a lackof diversity≫

Lower productivity, reputational decline, and higher staff turnover due to a toxic
work environment that is detrimental to psychological safety≫

Loss of opportunities to hire outstanding talent due to inadequate diversity andinclusion initiatives such as system designs, information transmission, and thesocial evaluation of companies

Main Initiatives

Risk

Opportunities◼ Conduct organizational monitoring (e.g., employee
engagement surveys) on an ongoing basis◎◎◼ Instill the corporate philosophy that is based on thespirit of love (ai) and respect (kei)◎◎◼ Encourage diverse work styles◎◎◼ Hire people who have integrity and are in line with
our human capital strategy◎◎◼ Promote talent management and human resources
development◎◎◼ Foster diversity and inclusion◎◎◼ Advance health and productivity management◎◎

Opportunities≫

Higher productivity and competitiveness due to an increase in employee wellbeing≫

Higher productivity and competitiveness due to an increase in employee skills
and abilities≫

Proper judgment and higher competitiveness owing to organizational diversity≫

Higher productivity, staff retention rates, and reputation owing to a positive work
environment that is conducive to psychological safety≫

Hiring of outstanding talent thanks to strong diversity and inclusion initiatives
such as system designs, information transmission, and the social evaluation ofcompanies

Note: The symbols in the Response column indicate the importance of the initiatives (◎＞〇).
© 2024 Inabata & Co., Ltd.

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3. Materiality: Risks, Opportunities, and Main Initiatives
Strengthening the foundation
for business continuity

Enhancing governance and risk management
Response

Risks and Opportunities
Risks≫

Occurrences of scandals, as well as lower competitiveness and management
quality, due to lack of corporate governance≫

Increases in lawsuits and fines, along with reputational decline, due tocompliance violations≫

Increases in lawsuits and fines, along with reputational decline, due toinadequate information security measures≫

Occurrences of scandals, poorer financial performance, and reputational decline
due to insufficient risk management

Main Initiatives

Risk

Opportunities◼ Enhance corporate governance◎○◼ Strengthen compliance and anti-corruption efforts◎○◼ Raise awareness of the internal whistleblowing
system◎○◼ Take thorough measures to ensure information
security, including cybersecurity◎○◼ Tighten risk management◎○

Opportunities≫

Better management and higher competitiveness due to stronger corporate
governance≫Higher credibility and reputation due to robust compliance≫

Smoother business management, as well as higher credibility and reputation,
due to adequate information security measures≫

Higher management quality, competitiveness, and reputation due to stronger
risk management

Note: The symbols in the Response column indicate the importance of the initiatives (◎＞〇).
© 2024 Inabata & Co., Ltd.

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4. Materiality: Long-term Vision, Strategy, KPIs, and Targets
Long-term Vision

Long-term Targets
GHG emissions (Scopes 1 and 2): Reduce emissions by 42% by FY2030, compared to FY2022 levels; and achievecarbon neutrality by FY2050.

Long-term Aims
≫ A decarbonized and circular society, and rich natural capital for society and the planet≫ A society in which human rights are respected, people feel safe and secure, and their well-being is maintained≫ A state of sustainable growth where the value provided by the Company, co-created with its business partners, isseen as indispensable to society≫ A situation where all employees in Japan and overseas, who are critical for sustainable growth, are physically andmentally healthy, work with enthusiasm in a style that fits the individual and in appropriate roles, and enjoy a highlevel of well-being

Relevant United Nations Sustainable Development Goals© 2024 Inabata & Co., Ltd.

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4. Materiality: Long-term Vision, Strategy, KPIs, and Targets

Creating
sustainable value

Contributing to a decarbonized and circular society; sustainable use of natural capital
Contributing to safety, security, and well-being
Providing value through resilience in procurement and supply functions

Strategy

KPIs and Targets (April 2024 to March 2027)

Boundary‒ Achieve carbon neutrality in businessactivities≫ Reduce GHG emission (Scopes 1 and 2) by 25% comparedto FY2022 levels

Consolidated‒ Contribute to the global environment
through the business≫ Achieve net sales of 100 billion yen*1 for environment-related
business

Consolidated‒ Ensure safe and secure quality throughstronger management of compliance withchemical substances regulations≫ Understand and share trends in chemical substances
regulations in Japan and overseas in a timely manner, andstrengthen the compliance management framework

Consolidated‒ Enhance resilience in procurement andsupply functions by strengthening supply
chain management≫ Clarify the Company’s position on responsible procurement,
and communicate it internally and externally

Non
Consolidated‒ Establish supply chains that respect humanrights≫ Establish the human rights DD cycle*2 for selected
operations as a model case

Non
Consolidated*1. The expected ratio of environment-related business by field in the final fiscal year of the Sustainability Medium-term Plan 2026 is outlined below.
■Energy & power (renewable energy, batteries, etc.) : Approx. 70％ ■Resources & environment (sustainable materials, recycling, water, etc.) : Approx. 20％■Materials & chemicals, agriculture & food, transportation & logistics, and environmental certification : Approx. 10%*2. The human rights DD cycle refers to the following due diligence processes and supporting measures set out in OECD Due Diligence Guidance for Responsible Business Conduct:
1. Embed responsible business conduct into policies and management systems
2. Identify and assess actual and potential adverse impacts associated with the enterprise's operations, products or services
3. Cease, prevent and mitigate adverse impacts© 2024 Inabata & Co., Ltd.

4. Track implementation and results
5. Communicate how impacts are addressed
6. Provide for or cooperate in remediation when appropriate

134. Materiality: Long-term Vision, Strategy, KPIs, and Targets
Strengthening thefoundation forbusiness continuity

Respecting human rights in the spirit of love (ai) and respect (kei) and growing
together with local communities
Fostering and strengthening the human capital driving the value creation
Enhancing governance and risk management

Strategy‒ Improve the well-being (state of being
physically, mentally, and socially satisfied)of employees who support sustainablegrowthKPIs and Targets (April 2024 to March 2027)
1. In employee engagement surveys, achieve an overall response rate of at least 90%, apositive response rate of at least 80% to the statements “I am satisfied to work at theCompany” and “I can identify with the Company’s mission, vision, and managerial
policy, and I want to work to achieve them,” and a positive response rate of at least
70% across all items*3

2. Maintain the ratio of mid-career hires at around 50%
3. Increase the ratio of male employees taking paternity leave to 100%
4. Continue to exceed the legal rate of employment for persons with disabilities
5. Encourage managerial appointments for local employees at overseas subsidiaries‒ Further advance health and productivity
management‒ Focus on investment in human capital

Consolidated

2. Expand the implementation boundary for the human rights DD digital survey to theGroup
1. Increase the ratio of women in managerial positions to at least 8% by March 2028, andto 10% by 2030

‒ Foster diversity and inclusion that makes
the most of diverse individuals

Boundary

1. Achieve a 100% rate of complete checkup
2. Maintain comprehensive health risk found by stress checks at current levels *4
1. Every year, spend more on education and training costs*5 per employee than in theprevious year
2. Maintain the ratio of employees with overseas posting experience at around 40%

1-4
Non
Consolidated
5Consolidated

NonConsolidated

NonConsolidated*3. The positive response rate in employee engagement surveys refers to—of employee responses on the five-point scale (5. Fully agree; 4. Agree; 3. Neither agree nor disagree; 2. Disagree; 1. Fully disagree)—the proportion of
responses 4 and 5, which are the positive responses.
Note: We have corrected an error in the original English translation.(June 5,2024)*4. The rate of complete checkup refers to the proportion of employees who were advised to undergo a complete checkup after the initial health check and actually followed the advice. Comprehensive health risk is an indicator for stressevaluation provided by the Ministry of Health, Labour and Welfare to comprehensively assess to what degree the workplace environment impacts on employee health. The risk is calculated by using four criteria obtained from stresschecks: psychological burden of work (volume), degree of discretion at work, degree of support from managers, and degree of support from colleagues. The national average is calculated as 100: workplace health risk is high if thevalue exceeds 100, and low if the value falls below 100. The value at the Company is currently below 100.
*5. Education and training costs refer to the expenses spent on group training, external training, video learning, and so on at Inabata on a nonconsolidated basis. For FY2022, the costs were 50,776 yen per person. (FY2023 results will be
disclosed in the summer of 2024.)© 2024 Inabata & Co., Ltd.

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