Sustainability at the ITOCHU Group

Environment

Society

Governance

Sustainability at the ITOCHU Group
Policy & Basic Approach
The ITOCHU Group Basic Policy on Promotion of Sustainability
ITOCHU Group, conducting business globally under the spirit of "Sampo-yoshi", the management philosophyof merchants in the Ohmi province of Japan (present-day Shiga Prefecture) which is our Corporate Mission,considers that addressing global environmental and social issues is one of the top priority issues in its
management policy. We contribute to the realization of a sustainable society based on the ITOCHU Group
Code of Ethic Conduct, in order to achieve the goals of The ITOCHU Group Corporate Guideline of Conduct,"I am One with Infinite Missions."(1) Identification of Material Issues and Promotion of Businesses that Address theSocial Issues
As a member of the international community, we will identify and assess material issues where we cancreate the most social and environmental value for that can enhance the sustainable growth of bothsociety and our business.

(2) Establishment of Mutual Trust with Society
We will take necessary measures to ensure that we disclose accurate and clear information andmaintain a communicative relationship with our stakeholders. In doing so, we aim to be receptive andresponsive to the expectations and demands of society.

(3) Strengthening Supply Chain and Business Investment Management to Lead to
Sustainable Use of Natural Resources with Respect for Human Rights andConsideration for the Environment
While engaging in business activities, we respect the legal systems of each country and internationalrules, and strive to prevent the occurrence of environmental pollution and/or human rights and labor
issues that threaten our lives. In addition, we give due consideration to the mitigation of and adaption
to climate change, the preservation of the global environment, such as through the conservation of
biodiversity and ecosystems, and human rights issues.
We endeavor to understand how natural resources are utilized (such as air, water, land, food, minerals,
fossil fuels, animals, and plants) and what consideration is given to human rights and labor issues,
both in the businesses where we invest and in the supply chains related to the products we handle. We
request our business partners to understand and implement our concept of sustainability, and aim tobuild a sustainable value chain.

(4) Education and Awareness of Employees to Promote Sustainability
We believe that the promotion of sustainability starts with each and every employee. Therefore, we willtake necessary measures to educate our employees on the material sustainability issues we haveidentified and nurture a sustainability mindset among the workforce. Every employee is expected toadhere to this policy by executing respective action plans drafted in alignment to this policy.
April 2020
Fumihiko Kobayashi
Member of the Board
Senior Managing Executive Officer
Chief Administrative Officer

7

Sustainability at the ITOCHU Group

Environment

Society

Governance

Structure and System
Promoting Sustainability at ITOCHU Corporation
We established the Basic Policy on Promotion of Sustainability (P7) to set ITOCHU Corporation's initiatives tofurther sustainability in accordance with our corporate mission and the dynamic environment in which we operate.
Our implementation of the policy is organized and systematic. In the course of implementation, ITOCHU
Corporation determines the critical issues with priority need for a solution, then inserts the material issues into
Sustainability Action Plans (P14-22). These plans guide operations in our trading and business investments as we
carry out the policies in the mid-term management plan, thus helping to solve the aforementioned issues.

Sustainability Promotion Flow8

Sustainability at the ITOCHU Group

Environment

Society

Governance

Structure for Promoting Sustainability
The Sustainability Management Department plans and formulates company-wide action to further sustainability at
ITOCHU Corporation, which the Sustainability Chairperson served by the Chief Administrative Officer finalizes.
Meanwhile, the ESG Officers and Managers in each unit carry out sustainability actions. The Sustainability
Committee, one of the company's key committees, holds deliberations and makes decisions concerning policy
formulation and important matters. In addition to a role in heading the Sustainability Committee, the committee'schair joins meetings of the Board of Directors, the HMC and the Investment Consultative Committee, and also
engages in decision-making based on the company's impact on the environment and society by reporting regularly
to the Board of Directors to brief them on our promotion of sustainability. We furthermore engage in dialog withstakeholders within and outside the company. One example of this is our regularly convened advisory board. Thisdialog provides an understanding of what society expects of and desires from the company, which we can thenapply to our initiatives at advancing sustainability.

Sustainability Promotion Framework (FYE 2021)

FYE 2020 Sustainability Committee

Members

Chair: CAO. Members: General Manager of the Corporate Planning & Administration
Division, General Manager of the Corporate Communications Division, General Managerof the Human Resources & General Affairs Division, General Manager of the Legal
Division, General Manager of the Sustainability Management Department, General
Manager of the Investor Relations Department, General Managers of the Planning &Administration Departments of each Division Company, Corporate Auditors
1. Revision of ITOCHU Corporate Mission
2. Formulation of the Corporate Ethical Code of Conduct, Revision of policies in line withPrimary Purview

revision to the corporate mission, Sustainability action plan review, ISO14001
environmental management review, TCFD progress and disclosure contents, SCOPE3
calculation results and next term issues

9Sustainability at the ITOCHU Group

Environment

Society

GovernanceInitiatives: Critical Issues (Material Issues)
In April 2018, ITOCHU put forth material sustainability issues that incorporate an ESG perspective.Addressing theseissues through its main business will help ITOCHU accomplish its FYE 2019-2021 Medium-Term Management Plan's
goal of achieving ongoing growth through ITOCHU Mission, the spirit of "Sampo-yoshi". ITOCHU's sustainability
initiatives, which aim to fulfill our responsibilities for the society of today and the future, also contribute to theachievement of the Sustainable Development Goals (SDGs)* adopted by the United Nations in 2015.
* Sustainable Development Goals (SDGs): Targets for sustainable development to achieve by 2030, adopted in
September 2015 by member states of the United Nations
Identification and Review Process for Material Issues (P12)
Risks and Opportunities Pertaining to Each Material Issue (P13)
Sustainability Action Plans (P14-22)

Material Sustainability Issues

Evolve Businesses through Technological Innovation
We create new value by proactively exploring new technologies as we adapt to a transforming industrial
establishment by venturing beyond the framework of our existing business.

Address Climate Change(Contribute to Realization of Low-Carbon Society)As we endeavor to adapt to climate change's impact on business, we further business activities that contribute to a
low-carbon society and work to reduce greenhouse gas emissions.

10Sustainability at the ITOCHU Group

Environment

Society

Governance

Cultivate a Motivating Workplace Environment
We provide a setting where employees are proud and motivated, and where we can leverage diversity so they canfully exhibit their capabilities.

Respect Human Rights
While showing respect and consideration for human rights in our operations, we bring stability to our business andcontribute to the development of local communities.

Contribute to Healthier and More Enriched Lifestyles
With the intention of raising quality of life for all people, we help make healthy, bountiful living possible.

Ensure Stable Procurement and Supply
With aspirations for a recycling-oriented society, we give consideration to biodiversity and other important aspectsof the environment to engage in effective use and steady procurement and supply of resources in line with theirdemand in each country.

Maintain Rigorous Governance Structures
We ensure proper and efficient execution of operations through the Board of Directors' independent, objective andhighly effective oversight of management and highly transparent decision-making.

11

Sustainability at the ITOCHU Group

Environment

Society

GovernanceInitiatives: Identification and Review Process for MaterialIssuesSince ITOCHU Corporation first identified material issues in 2013, we have conducted regular reviews based ontrends in the international community and the expectations of stakeholders. In fiscal 2019, when the latest midterm management plan kicked off, we identified seven new critical issues based on the recent adoption of theSDGs, the Paris Agreement on climate change coming into effect and other social developments and changes
affecting business.

12Sustainability at the ITOCHU Group

Environment

Society

GovernanceInitiatives: Risks and Opportunities Pertaining to EachMaterial Issue
Material Issues

Evolve businesses
throughtechnologicalinnovation

Risks

Opportunities

Obsolescence of existing businessmodels accompanying the rise of newtechnologies such as IoT and AI

Creation of new markets; provision of
innovative services

Labor shortages in developed
countries; flight of excellent talentfrom businesses that are slow tostreamline

Optimization of human resources andlogistics by utilizing new technology;enhanced competitiveness byreforming how we work

Transition risk
Address climatechange (contributeto realization of alow-carbon
society)

Cultivate a
motivating
workplaceenvironment

Respect humanrightsContribute tohealthier and moreenriched lifestyles

Ensure stableprocurement andsupplyMaintain rigorous
governancestructures

Reduction in demand for fossil fuels
due to business restrictions on
greenhouse gas emissions
Physical risk
Damage to business due to theincrease in abnormal weather (e.g.,droughts, flooding, typhoons andhurricanes)
Failure to handle the issue properly
could lower worker productivity, cause
excellent talent to leave, erase
business opportunities, and add tohealth-related expenses
Human rights problems occurring in
more geographically expansive
business activities could delay
operations or pose a continuity risk
Insufficient provision of social
infrastructure services could erode
trust in the company
Safety and health issues affecting
consumers and service users could
erode trust in the company
Changes in government policy could
impact business by destabilizing
markets or social insurance systems
Impact from a backlash accompanying
the outbreak of environmental
problems or worsening relations withlocal communities
A price-cutting war in consumer goods
could structurally batter the entire
industry
Business continuity risks andunanticipated losses arising from
dysfunctional corporate governance orinternal controls

13

Increase in renewable energy andother business opportunities which willcontribute to alleviating climatechangeRetention and acquisition of customers
by strengthening supply structuresthat can adapt to abnormal weather

Providing a motivating workplaceenvironment raises worker
productivity, improves health andmotivation, retains excellent talent,and enhances adaptability to change
and new business opportunities
Co-existence with local communities
stabilizes business and retains
excellent talent
Consideration for human rights in the
supply chain and improved working
environments will build a safer andsteadier product supply network
Advancing food safety/reliability andhealth will boost demand
Growth in individual consumption andthe spread of the internet will expand
services in information, finance anddistribution
Higher demand for resources due topopulation growth and higher living
standards in emerging countries
A steady, environmentally-friendly
supply of resources and materials wins
client trust and creates new business
Establishing robust governance willraise decision-making transparency,
enable proper adaptation to change,
and lay the foundation for steady
growthSustainability at the ITOCHU Group

Environment

Society

GovernanceInitiatives: Sustainability Action Plans
As a concrete initiative to address the material issues we have identified, we embed these issues into the
Sustainability Action Plan for each business sector. Each company deduces the risks and opportunities associatedwith critical sustainability issues in each business sector, formulates a Sustainability Action Plan that stipulates theapproach and success indicators to achieve their medium- and long-term commitments, and holds semi-annual
review meetings for each unit affected by the plan. This implementation of the PDCA cycle advances sustainability.
In addition, each unit—headquarters administrative divisions, domestic branches and offices, overseas locations,etc.—formulates a Sustainability Action Plan according to its business and function, the goal being to further
entrench the foundations supporting business activities.
After the Materiality is identified, we reflect it in sustainability action plans in each business area as specificmeasures for contributing to the solution of social issues.
We promote sustainability by defining the Commitment, which shows how we achieve medium- and long-term
growth and provide value to society, and specific approach and performance indicators for achieving theCommitment.

Narrow Down by Materiality
Evolve Businesses through Technological Innovation
Risks

Opportunities
Creation of new markets and provision of innovative
services.
Utilizing new technologies for optimizing humanresources and logistics, increasing competitiveness bypromoting work style reform. And others.

Obsolescence of existing business models resulting fromthe emergence of new technologies, such as IoT and AI.
Labor shortage in developed countries, loss of excellent
human resources in businesses in which efficiency
improvement is delayed. And others.
SDGs
Targets

Issues toAddress

Business
Area

Commitment

Specific Approach

Performance Indicators

Degree of ProgressState-of-thearttechnologies(IoT)

We will build a production IT
infrastructure that will be acommon platform of the
supply chain and strive toimprove added value andpromote sustainableindustrialization.

Introduce the production IT
infrastructure to the main basesof the Group and contribute to
the improvement of Product,
Lifecycle and Management.

Visualize the supply chains of
the overall Group to reduce
costs, improve quality, andreduce lead time, thereby
developing a supply systemthat can cater to market
needs.

We were aiming to start operation in June 2019.
However, the installation work and system training
took time. Therefore, we actually started operationin January 2020. IPA Hong Kong has started
utilizing this with business that utilizes the
production background of IPA Vietnam. We plan toroll this out in other areas in sequence.

State-of-thearttechnologies(IC tag, RFID,
and ECbusinesses)

We will utilize nextgeneration technologies,
such as Radio Frequency
IDentification (RFID) tags,
to contribute to improved
efficiency, not only in theapparel industry but also in
the associated logistics
industry.

Improve production and sales
efficiency by making use of AI,
and in addition, accelerate thedissemination of RFID tags in
the clothing industry, in an effort
to increase the trading volume.

Make use of AI anddisseminate the use of RFID
tags, thereby improving
production and operating
efficiency in the supply chain,
traceability, and sales
capabilities.

We sold 60 million RFID tags in FYE 2020. We gave
proposals to improve operational efficiency (e.g.,
supply chain optimization and an improvement in
the accuracy of understanding inventory). We havestarted examining a partnership with an overseas
company concerning the tag material to introduce
eco-friendly goods that do not require garbage
separation.

Overall foodFood
relatedCompanybusinesses

We will aim to improve
productivity and efficiency
by utilizing RPA and AI
proactively.
We will aim to create
innovative services andnew business by
integrating resources andnew technologies of the
ITOCHU Group.

We will improve productivity
and optimize operations byintroducing and utilizing newtechnologies in the distribution
field in which labor shortages
are becoming more serious.
We will create unique newvalue by combining the wide
ranging product lineup,functions and expertise of ourgroup based on retail customer
needs.

Promotion of further
business processing reengineering utilizing RPA andAI.
Promotion of thedevelopment of new
products and new services
through the food wholesale
business developed by the
ITOCHU Group.

We are working to improve productivity and to
optimize business. For example, we areproactively introducing RPA in the group including in subsidiaries and associatedcompanies.
We are promoting the optimization of distribution
centers and the computerization of paper
information to save labor. In addition, we areworking to reduce delivery vehicles bycontinuously optimizing delivery routes.
We are providing marketing tools that improvethe convenience of consumers to retail customers
through our group food wholesale company.

Realization of new service andbusiness developments.

Continuing from the previous fiscal year, we haveincreased new overseas VC investments (e.g., in
new technology and healthcare fields). We havemade over ten investments. We are currently
working with these companies to develop new
businesses. In particular, this fiscal year, we plan todevelop fintech-related services. This willcontribute to developing new solutions andincreasing profits, by improving operational
efficiency of retailers and e-commerce operators.

Aim to develop new
businesses and cultivate newcustomers by taking fulladvantage of the businessfoundations possessed by the
ITOCHU Group.

We are currently promoting a digital strategy in
FamilyMart - the subsidiary. We released the
FamiPay smartphone app with barcode payment inJuly 2019. We have achieved labor savings in
FamilyMart stores. For example, register service
time has been reduced to one third of what it was
before.
In addition, we have already promoted inboundbusiness and released a capital and businessalliance with a startup that has independently
developed a humanoid AI agent with advanced
recognition technology.

Co

TextileCompany

Nextgeneration
business
Development

Businessincubation
ICT &throughFinancial venture
Business investment,
Company focused on
FinTech, IoT,
AI and etc.

The 8thConsumer
relatedbusiness

We will try to create newindustries with acquiring
cutting-edge innovations
and business models suchas IoT, AI, and FinTech.

Seeking chance to invest in andmake partnerships withstartups, in order to develop
new businesses.

We will aim to create
innovative services and new
business by integrating
assets and new technologiesof the ITOCHU Group.

Increase contact with consumers
by promoting the retail businessin our efforts to understandconsumer behaviors, andcombine the wide range of
products, functions, andexpertise of the Group to create
unique new value that will be
profitable for consumers andcommunal society.

14

Sustainability at the ITOCHU Group

Environment

Society

Governance

Address Climate Change (Contribute to Realization of Low-Carbon
Society)
Risks

Opportunities

Transition risk
Reduction in demand for fossil fuels due to businessrestrictions on greenhouse gas emissions

Increase in renewable energy and other business
opportunities which will contribute to alleviating climatechangeRetention and acquisition of customers by strengthening
supply structures that can adapt to abnormal weather

Physical risk
Damage to business due to the increase in abnormal
weather (e.g., droughts, flooding, typhoons andhurricanes)
SDGs
Targets

Issues toAddress

Co

Business Area

Overall power
Machinerygeneration
Companybusiness

Sales of
Machinery passenger carsCompany and commercial
vehiclesTakingcountermeasuresagainstclimatechangeTakingcountermeasuresagainstclimatechangeSpecific Approach

Performance Indicators

Degree of Progress

Pursue opportunities toinvest aggressively inrenewable energy power
generation through analysesof countries and regions.

FYE 2031: Target to achieve arenewable energy ratio morethan 20% (equity interest
basis) and reflect this to the
future strategy.

We achieved a renewable energy rate of 12.5%
through capital alliances with Winch Energy, which is acompany in the U.K. that is involved in small-scalesolar power generation and distribution systems in
non-electrified areas such as Africa, and VPP Japan,
which is a company involved in the solar distribution
power business in Japan.

Expand sales of eco-friendly
products in response to the
expanded lineup of EVs, HVs,
vehicles with a reduced
environmental impact, andsimilar vehicles fromautomakers as our business
partners.

1) We have been participating in a small electric truck
demonstration experiment since January 2019 inJapan.
2) We are deepening efforts with two companies into
which we invested in FYE 2019 in China where electricvehicles are spreading rapidly - Dishangtie Car Rental,
an electric commercial vehicle rental and maintenanceservice, and Zhicheauto Technology (Singulato Motors),
an emerging electric vehicle manufacture.
3) We have invested in a ride sharing service called Via(2019). This is a convenient and cost-effective meansof transportation. At the same time, it also contributes
to alleviating urban congestion and reducing CO2
emissions.

We will achieve the ecofriendly mobility society
by strengthening
businesses of electricvehicles (EVs), hybrid
vehicles (HVs), vehicles
with a reduced
environmental impact,
and those related.

Contribute to spread of ecofriendly vehicles by
increasing business of ecofriendly and high-efficiency
products, such as EVs, HVs,
vehicles with a reduced
environmental impact, andrelated parts.

Continue to be involved in
the development oftechnologies that
contribute to the reductionof greenhouse gases
emissions, including
technologies for carbon
dioxide capture andstorage (CCS) and carbon
dioxide capture andutilization (CCU).
Aim to develop an
appropriate portfolio ofcoal assets by fully
considering its
environmental impact.
Strengthen initiatives inbusinesses that contributeto the development oflighter-weight vehicles andshift to EVs (aluminum,
copper, and otherbusinesses).

Contribution to thedevelopment of a low-carbon
society by committing totechnologies that help
reduce greenhouse gases
emissions.
Development of an optimal
asset portfolio by fully
considering social
requirements, including
those related to the shift to a
low-carbon society.
Implementation andexpansion of businesses that
contribute to developing
lighter-weight vehicles andshifting to EVs.

Partnering with experienced
operators with hightechnical strength in thedevelopment and productionof natural resources.

Pursuing opportunities to takepart in LNG projects (i.e. LNG
or natural gas emits lessgreenhouse gases than theother fossil fuels).

We will continue to sell
storage batteries equippedwith optimal
charging/discharging
software based on machinelearning (AI) and we will
establish a recycling andreuse business with
repurposed batteries fromEV.

Number of storage batteries
sold
Use of recycled and reusedbatteries

Metals &MineralsCompany

Mining business
Environmental
business
Material-related
business

We will realize stableenergy supply as oursocial mission andresponsibility while fully
considering its
environmental impact.
We will contribute to
reducing greenhousegases throughbusinesses related tolighter-weight vehicles
and Electric Vehicles(EVs).

Energy &Chemicals
Company

Oil & Gas LNG(Liquefied NaturalGas) Projects

Development andproduction of natural
resources withconsideration in the
reduction of greenhousegases.

Efforts tooptimally
and conti- Energy &nuously
Chemicals
supplyCompany
renewableenergyTakingcountermeasuresagainstclimatechangeCommitment
We will develop power
plants with a good balance
between renewableenergy power generationand conventional power
generation, thereby
contributing to thedevelopment of countries
and regions in asustainable manner that is
optimized for each.

Food
Company

GeneralProducts& Realty
Company

Storage battery
related power andenvironmental
solutions

We will continue tostably supply the storage
batteries that are thekey to the efficient andoptimal utilization ofrenewable energy.
We will aim tostrengthen our storage
battery business chain
and establish a circularmodel through thebattery recycling
business in particular.

Fresh food field

We will examine andpromote measures that
contribute to tacklingclimate change.

We will utilize green energy
in our processed foodbusiness.

Utilization as a source of
renewable energy forprocessed food manufacturing
plants by generating biogas
power using pineapple
leftovers generated in the
manufacturing process of theDole processed food business.

Cement substitutematerial such asslag

We plan to expand the useof sustainable byproducts(slag) as a substitutematerial for the cement
which is vital for
construction and civilengineering.

Establish continuous, stablebusiness between
Steelworks as the supplierof slag and Users.

Consider investment,
participation, etc. in the slag
business and focus efforts oncreating demand, especially indeveloping countries, with theaim of establishingcontinuous, stable business.

15

We are working to start an overseas demonstration
project to culture Euglena together with euglena Co.,
Ltd. This project will help promote Carbon dioxide
Capture and Utilization (CCU) technologies.
This project has potential to be applied over existing
thermal power plants and manufacturing plants that
emit carbon dioxide and is expected to be rolled out
to a wide range of industries.
We have properly reviewed our asset portfolio to see
if it is duly in line with our policy announced in
February 2019 (1) not to acquire any new thermal
coal mining interest and (2) regarding the existing
thermal coal mining business, we will continue toreview it and contribute to the development of asustainable society while responding to the social
demands of stable supply of energy to domestic andoverseas customers.
As a result the review, following on from the sale of
our interests in the Rolleston thermal coal mine in theprevious fiscal year, we have concluded this year anagreement for acquiring the interests in a new coking
coal mine (Longview coking coal mine) in December
2019.
The amount of transactions for aluminum
castings/die-cast materials for vehicles has increasedby 10% in FYE 2020 over FYE 2019, contributing to
the development of light-weight vehicles.

We are holding concrete discussions with regards toparticipation in new LNG projects.

* Because of new commitment, review will be
conducted from the next fiscal year.

We are currently building biogas power plants at twoplants in the Philippines. These are scheduled to becompleted in the first half of FYE 2021.

We expect a 65% increase year-on-year in theamount we handle to developing countries.
We are currently in discussions concerning investment
and participation in the slag business.

Sustainability at the ITOCHU Group

Environment

Society

Governance

Cultivate a Motivating Workplace Environment
Risks

Opportunities

Decline in labor productivity, loss of excellent humanresources, missed business opportunities, increase inhealth-related expenses, and other events that would
result from failure to take appropriate measures, andothers.

Improvement of labor productivity and health andmotivation, securing of excellent human resources,enhanced capability of responding to changes andbusiness opportunities, and other events that will result
from the creation of a workplace that provides job
satisfaction, and others.

SDGs
Targets

Issues toAddress

Co

Business
Area

Commitment

Specific Approach

Performance Indicators

Degree of Progress<ITOCHU Corporation><ITOCHU Corporation>
Improving
operatingefficiency
andaddressing
the issue of
longworking
hours
throughwork stylereformHuman
HeadResources
quarters
Affairs

We will promote awell-balanced working
style and reduce thetotal number ofworking hours, aiming
to improve employee
engagement.

Promote the morning focused working
system.
Conduct regular monitoring of
employees' work situations.
Promote work automation with IT
tools, including the robotic process
automation (RPA), as well as mobile
work.
Promote projects for improving theoperating efficiency at eachorganization.

<ITOCHU Group>
Efficient way of working, appropriate
working hours management, andeducational and awareness-raising
activities at the ITOCHU Group.

FYE 2021: Reduce theannual average overtime
hours by at least 10%compared to the periodprior to the introduction of
the morning-focusedworking system.
FYE 2021: Percentage of
employees who leave theoffice building at 20:00 orlater at 5% or fewer.
FYE 2021: Paid leaveacquisition rate at 70% or
higher.
Rate of positive responses
to the "employee
engagement" item in theengagement survey: 70%
or higher.

We have reduced annual average overtime hours by
11% compared to before the introduction of themorning-focused working system (achieved in FYE2018).
We have 5% of employees leaving the building after 8
p.m. (FYE 2019).
We have 67% of employees acquiring paid leave (FYE
2019).
We plan to complete approximately 100 scenarios in
FYE 2019 for RPA. We will also introduce a data
analysis tool (HANABI). We are currently running 151
scenarios. (As of February 2020)
In FYE 2019, we plan to implement BPR (business
improvement) at the organization level in threedivisions (Fresh Food Division, Automobile,
Construction Machinery & Industrial Machinery Division
and Apparel Division).
The positive answer rate to the "Employee
Engagement" item from the FYE 2019 Engagement
Survey was 76%. *We did not conduct a survey in FYE
2020. The latest data is for FYE 2019.

Keep the percentage of employees who
receive regular medical checkups at
100%.
Establish well-equipped in-houseclinics and a system for supporting
each employee in receiving
personalized medical care.
Promote measures for helping
employees create a balance between
cancer treatment and work.
Offer healthy dishes in the employee
cafeteria.
Promote the program for supporting
smoking cessation treatment
expenses.
Utilize health management web tools
for employees and continue to provide
special programs for employees at ahigh risk for lifestyle-related diseases.

Percentage of employees
who receive regular
medical checkups: 100%.
FYE 2021: Improve healthindicators (such as BMI)
compared to FYE 2017
values.
FYE 2021: Percentage of
employees who leave work
due to cancer or long-term
illness at 0%.
FYE 2021: Rate of
employees found to have ahigh level of stress in the
stress check at 5% orlower.

Sustainable
development
Human
HeadofResources
quarters
employees'
Affairs
capabilities

We will develop
training programs on
a global basis that
respond to thechanging times andbusiness needs. We
will also utilize
training programs tocontinuously produce
excellent humanresources.

Continue to develop and provide
training programs at all jobs levels.
Continue and enhance overseas
deployment of interns and language
trainees.
Offer diverse career path options andexperience in diverse works throughregular rotation.
Foster career awareness among
employees by enhancing personnel
assessment, career vision training,career counselling systems and otherprograms/systems.

The positive answer rate to the "Education and
FYE 2021: Annual E&D
Training" item from the FYE 2019 Engagement Survey
expenses exceeding one
was 71%. *We did not conduct a survey in FYE 2020.
billion yen.
The latest data is for FYE 2019.
Rate of positive responses
We have been continually reviewing and developing
to the "education andtraining programs (e.g., the trial introduction of nexttraining" item in thegeneration related training).
engagement survey: 60%
We are running a trial to provide video content as partor higher.
of career vision training with an eye on a learning
FYE 2021: Percentage ofenvironment that meets the diverse needs of ourcareer-track employees
employees.
who acquire business-level
Below is the Outlook Current as of February 20
English skills in their firstin
FYE 2020:
eight years at thecompany at 100%.
Annual E&D expenses forecast ⇒ Over approximately
FYE 2021: Percentage of
1.2 billion yen
career-track employees
Acquisition rate of business level English skills for
who are deployed overseas
career-track employees in up to their eighth year sincein their first eight years at
joining the company ⇒ 100%the company at 80% orOverseas dispatch rate for career-track employees in up
higher.
to their eighth year since joining the company ⇒ 80%

Creating anenvironmentthat allows
diverseHeadhumanquarters
resources toexercisetheirpotential

We will prohibit all
types ofdiscrimination,
including those basedon age, gender andnationality, andrespect human rights.
We will create anenvironment that will
permit the active
participation of
employees whose
work hours are limited
due to childcare,nursing care, diseases
or similar
circumstances.

Continue fair and equitable recruitment
and promotion.
Create a work climate of mutual
respect and support.
Reasonable accommodations
concerning the work environment ofpeople with disabilities.
Respond to LGBT considerations andprovide employee training on LGBT.
Enhance on-site day-care centers andnursing care support services.
Enhance individual support for
employees provided in accordance with
their life stage and career.
Promote flexible ways of working by
making use of mobile work.
Support the active participation ofsenior human resources over 65 years
old.

FYE 2021: Percentage offemale career-track
employees among all
career-track employees:
10%.
FYE 2021: Percentage offemale career-track
employees among
employees in leadership
positions at 10%.
FYE 2021: Proportion of
our workforce withdisabilities at 2.3%.

Improving
Human
Headthe health of
Resources
quarters
employees
Affairs

Human
Resources
Affairs

We will improve thehealth of employees
to create anenvironment that will
enable individual
employees to better
demonstrate theircapabilities. We willbuild a system thathelps employees withcancer or long-term
illness to create abalance between
treatment and work,
thereby fostering aculture of mutual
support.

16

Regular medical checkup rate: 100% in FYE 2020.
Rate of improvement in the health index (e.g., BMI)
compared to FYE 2011: -2% in FYE 2019.
Support for working while receiving cancer care: Job
turnover due to cancer and long-term illnesses
continues to be 0%.
Rate of those found to have a high level of stress in the
stress check: 2.9% in FYE 2020.
Health management web tools for employees
utilization: We are continuing to run a program forthose at a high risk for lifestyle-related diseases among
young employees and we expanded the scope toinclude those who are subject to specific healthguidance (a total of 115 participants in FYE 2020). We
held a company-wide walking event.

The percentage of female career-track employees
among all career-track employees is 9.7% (as ofJanuary 2020).
The percentage of female career-track employees
among those in leadership positions is over 8.1% (as ofJanuary 2020).
Proportion of our workforce with disabilities: 2.16% asof February 2020 (insufficient by one person)
We have been applying to make IHGS applicable as a
special subsidiary in our group since February 2020. We
achieved the required number of hires as of February2020 in the three companies of ITOCHU, Uneedus and
IHGS. We will continue to promote the employment of
those with disabilities over our entire group.

Sustainability at the ITOCHU Group

Environment

Society

Governance

Respect Human Rights
Risks

Opportunities
Stabilization of business or securing of excellent humanresources resulting from harmonious coexistence withlocal communities.
Establishment of safe, stable supply system for productenabled by the consideration of human rights andimprovement of work environment in the supply chain.
And others.

Business delay or business continuity risk resulting fromthe occurrence of a human rights problem in businessactivities that expands (geographically).
Decline in credibility that may result from defects in thesocial infrastructure services we provide. And others.

SDGs
Targets

Issues toAddress
Establishing a
supply chain
reflecting
consideration
for humanrights and theenvironment

Co

TextileCompany

Business
Area

Commitment

Specific Approach

Performance Indicators

Degree of Progress

Supply chain
management

We will promote
information-sharing in theoverall Group and establish
a safe, secure supply
chain, thereby helping
customers with risk
reduction and contributing
to sustainable economic
development.

Make Group-wide efforts toreview the social andenvironmental safety of the
supply chain and make
improvements as necessary,
thereby promoting theestablishment of a safe, securecommodity supply system.

FYE 2024: Establish andvisualize the supply chain of
the overall Group, frommaterial procurement to sales,
to ensure a responsible
procurement policy.

We implemented this in 50 companies in Southwest
Asia (e.g., Vietnam and Indonesia) compared to the 80
companies that was our target in FYE 2020.
Separately, we conducted a fact-finding investigationquestionnaire on the status of compliance with theLabor Standards Act and Industrial Safety and Health
Act for foreign technical intern trainees in 211 sewing
plants in Japan.

Water Field
We own a water supply service business in the U.K.
and Spain and a seawater desalination business inAustralia and Oman. We are continuing to work to
expand our seawater desalination and watersupply/sewerage business.

Improving
Water andwater andMachinery
environmental
hygieneCompany
projects
infrastructures

We will contribute toimproving the hygiene
environment, thedevelopment of economic
activities, and theprotection of the global
environment through theappropriate treatment andeffective use of water andwaste.

Expand water and environment
projects to promote theappropriate use and treatmentof water and the effective
utilization of resources, andreduce the environmental
impact.

Expand and diversify theinvestment portfolio in thewater and environment field.

Establishing a
supply chain
reflecting
consideration
for humanrights and theenvironment

We will contribute toimproving the quality of lifeof all stakeholders in the
supply chain and business
investment destinations.

Set rules on due diligence
related to social and businessenvironmental safety forsuppliers and business
investment destinations basedon the distinctive
characteristics of eachbusiness, implement due
diligence, and strengthen
monitoring continuously.

FYE 2020: Aim to implement
the due diligence described on
the left in all new development
projects.

We are continuing operations to check the core
subjects in the guidelines on social responsibility using
the company-wide ESG checklist in all development
projects where we are investing for the first time. We
are conducting due diligence on individual development
projects to check their social and environmental safety
based on the unique characteristics of each businessprior to investment.

Ensure the thoroughapplication of the EHS
guidelines.
Contribute to local
communities throughactivities for improving
medical care, education andinfrastructure.

Implementation of annualinternal seminars to ensure
our employees are fully awareof the EHS guidelines.
Donations to medical care,education and build
infrastructure in local
communities.

We held internal EHS (Environment, Health and
Safety) training courses for supervisors and company
employees belonging to sections engaged in resource
development. The attendance rate of those subject tothis training was 100%.
We checked the proper compliance to the EHS
guideline by one new project and eight existing
projects in our mining business, and also by one
another resource-related project.
We carried out activities that contribute to the local
community as part of each project we invest in.
As a special initiative, our Australian subsidiary,
ITOCHU Minerals & Energy of Australia Pty. Ltd.,
together with other local group companies,
contributed A$200,000 in total to the Australian Red
Cross Society as support to recover from the damage
caused by the Bushfires.

Implementation of projects incompliance with the laws andregulations of the respective
government andinternationally-recognizedadministrative body.

Be compliant with HSE(Health, Safety andEnvironment) standards inthe respective government
and the ones set byinternationally-recognizedadministrative body.
Reduction of HSE issues thatinvolve serious damage tohuman beings and/or
environment.

We are appropriately complying with the HSEmanagement standards of the government andmanagement body in each country.
We are managing the number of incidents, theirseverity and content monthly in accordance with inhouse regulations. (There have been no serious
operational incidents as of the end of January 2020 inthis fiscal year.)

We will develop a
procurement structurecompliant with third-party
body certification andsupplier-specific codes ofconduct.

We will promote procurement
compliant with supplierspecific codes of conduct incoffee bean producing
countries.
We will strengthen thehandling of oil certified by the
RSPO - a third-party
certification organization forpalm oil.
We will support theestablishment of a promotion
and distribution system inJapan for MSPO/ISPO incooperation with domestic
industrial associations. The
aim of this is to encourage
the use of certified oil
systems in producing
countries.

Coffee beans: Promotion of
procurement compliant with
supplier-specific codes ofconduct in our bases in
producing areas incooperation with suppliers.
Palm oil: Promotion ofprogress information
disclosure upon also clarifying
the KPI indicators by
publishing our procurement
policy.

We are currently giving guidance to producers in eachproducing area country to meet the certification
standards. The aim of this is to expand transactions
for certified coffee beans (e.g., those of the
Rainforest Alliance and C.A.F.E Practice).
We have published our procurement policy with ourstarted target of switching all the palm oil we procure
to sustainable palm oil supplied from supply chainscompliant with RSPO/MSPO/ISPO by FYE 2026. We
are promoting the construction of procurement andsupply structures in light of industry trends and thesituation in suppliers.

We will contribute toincreased employment andFresh food field an improved living
environment by fostering
local industries.

We will cultivate new producing
areas. We will do this toexpand employment andimprove the living environment
through diversification of
producing areas in light ofweather risks and through thedevelopment of local industries
in our Dole business.

Aim for the start of thecommercial production andexport of pineapple processed
foods in FYE 2022 bycultivating pineapples in Sierra
Leone as the cultivation of a
producing area followed by thedevelopment program in thePhilippines.

We are promoting the expansion of a pineapple farmand the construction of a pineapple processed food
manufacturing plant in Sierra Leone.

Rebuilding of
our Tokyo
headquarters
by participatingin the Jingu
Gaien District
City Area
Redevelopment
Project

Communicate appropriately
with stakeholders and acquire
permissions in theredevelopment study process.

Submit the necessary
applications and acquire thenecessary permissions (e.g.,plan proposal, execution
permission application andredevelopment execution
permission).

We appropriately communicated with stakeholders in
the examination of the redevelopment and conductednegotiations to obtain the necessary permissions. We
plan to submit the application and acquire thepermissions from FYE 2021 to FYE 2024.

Sustainablemine
developmentthat reflectsconsiderationof the risks in
occupationalsafety andhealth andenvironmental
risks, and that
contributes to
local
communities

Establishmentof an energy
resourcesdevelopment
system that
goes wellwith local
society andenvironment

Overall electric
Machinery
power andCompanyplant projects

Metals &MineralsCompany

Miningbusiness

Energy & Exploration &Chemicals Production ofCompany Oil & Gas

Provisions field
Establishing a
supply chain
reflecting
consideration
for humanrights and theenvironment

Urban
developmentin the Jingu
Gaien district

We will promotesustainable developmentof natural resources byfully committing to EHS(environment, health,occupational safety) andharmonious coexistencewith local communities inareas which we operate.
We will improve local
infrastructure such as
medical care andeducation.

Contributing in thedevelopment of local
society by advancing
exploration & production
projects that accommodatesocial and environmental
concern.

Food
Company

Headquarters

We will strive to contributeto the community throughthe realization ofprosperous complex urban
development focused on
sports, culture andcommunication.

17

Environment Field
We operate four waste incineration and power
generation business projects in the U.K. In addition tothis, we entered into a financing contract for a publicprivate partnership (PPP) waste disposal power
generation project in Belgrade, Serbia in September
2019. We are aiming for operation in 2022.

Sustainability at the ITOCHU Group

Environment

Society

GovernanceContribute to Healthier and More Enriched Lifestyles
Risks

Opportunities

Decline in credibility that would result from theoccurrence of a problem related to the safety or healthof consumers and service users.
Impact on business of destabilization of the market orsocial security system based on policy change. And
others.
SDGs
Targets

Issues toAddress

Co

Business Area

Sales of CuttingEdge medical
Machinerydevices andCompany
provision of
medical services

Energy &Chemicals
PromotingCompany
good healthamong people

ICT &FinancialBusiness
Company

Pharmaceuticalproducts

Supportpharmaceuticaldevelopment
projects
Business ofprovidinghealth caremanagement
solutions forindividuals

Supplyingsafe, secure
food

Food
Company

Overall foodrelated
businesses

Maintenanceof industrial,
logistics, andtransportation
infrastructure

ICT &FinancialBusiness
Company

ICT
infrastructure
construction
business

Providingfinancialservices

Energy usethat takes
intoconsideration
local
communities
and theenvironment

ICT &FinancialBusiness
Company

Domestic andoverseas retailfinance business

Increase in demand for food safety and security andhealth improvement.
Expansion of information, financial and logistics services
resulting from an increase in consumer spending or
penetration of the Internet. And others.

Performance
Indicators

Degree of Progress

Increase the penetrationof advanced medical
devices in Japan, such as
MRI-guided radiation
therapy systems.

Currently operating at National Cancer Center and
Edogawa Hospital. More than 300 patients aretreated including intractable cancer (ex. pancreaticcancer). Since the technology is promising,
Edogawa Hospital is now upgrading the system,
which expected to operate in December 2020. With
joint research with the National Cancer Center, weare on the way to establish the standard procedure
to cure intractable cancers.

Actively promoting to support
the development andmarketing of newpharmaceutical and otherproducts.

Aiming to obtain approvals
in Asia and North America
for new pharmaceuticaland other products ofwhich we are engaged insupporting thedevelopment, and tolaunch them into themarket.

We started selling a non-absorptive liquid toprotect against oral mucositis (a liquid that
controls and relieves the pain of oral mucositis
caused by chemotherapy or radiotherapy whentreating diseases such as cancer) in groupcompanies (from May 2018 in Japan, from July
2019 in China and scheduled for sale in the
future in Korea).
We started full-scale sales with FDA approval in
North America of a pain reliever through groupcompanies (from March 2018).
We started the sale in China of a percutaneousabsorption 5-HT3 receptor antagonist(therapeutic medication for nausea and vomiting
during cancer treatment) (from March 2019).
This drug has been newly listed as a treatment
choice in the Guidelines for the Treatment of
Nausea and Vomiting During Cancer Treatment(published by the Chinese Society of ClinicalOncology in June 2019).

We will provide value-added
services for pharmaceuticals
and medical sites, and willcontribute to improvement ofpeople's Quality Of Life (QOL)by utilizing cutting-edge ICT
tools.

We will optimize healthcare
utilizing medical data.

Realization of newservices and businessdevelopment relating to
medical data
Expansion of existing
business (number ofpeople subject to healthcheckup data
management to reach 1
million by the end of FYE
2021)

With the interest to maintain and promote healthcontinuing to grow in company employees, thenumber of persons subject to health checkup
data management is steadily increasing. We
expect this to reach 750,000 persons by the endof FYE 2020.
We have carried out investments including, SaaS
for dispensing pharmacies, dentistry-relateddata, genomic data and pharmaceutical data. We
will contribute to improve the quality of life withhighly efficient operations by utilizing the
aforementioned data.

We will select and concentrateon suppliers who are capableof manufacturing andsupplying safe, secure foodstably.

Increase the number of
persons with international
certifications/qualifications
related to audit the Food
Safety Management System(FSMS) to enhance thecapability of human resources
for selecting suppliers.

Promotion of theappropriate appointmentof the auditors in eachsales division under theguidance of the ITOCHU
food safety management
organization.

The number of people who have acquired theassistant auditor increased by one in FYE 2020. We
plan to increase this by two people in FYE 2021.
We expect the total number of qualified persons
over our entire group to reach nine.

We will contribute to realize
safe secure, and highly
convenient social
infrastructure throughproviding various ICT
solutions.

Continue to enhance the valueof ICT solutions withmaximizing new
product/service sourcing
functions.

Increase the number ofprocurement partners.

We have newly located seven sourcing companies
which provide ICT solutions and RPA to reinforce
information security this fiscal year (e.g., insystems management field).

Commitment

We aim to improve quality oflife by providing cutting-edge
medical devices and advanced
medical services in the field of
medical care, where
technologies are innovatedrapidly.

Contributing to theimprovement of people’s
health and working
environment throughaccelerating the developmentof pharmaceuticals and otherproducts in fields withsignificant needs including
cancer-related fields.

We work on expanding andcreating the retail financial
market and providing financial
services to individuals tocontribute to enrichingpeople's lives.

Specific Approach

Promote sales of advanced
medical devices, such as MRIguided radiation therapy
systems, and the business of
supporting the operation ofdesignated regional cancer
care hospitals.

Increase the number ofcustomers and loan balanceby expanding and creating theretail financial market.

Increase the number ofcustomers and loanbalance.

Growth Rate of Outstanding Lendings:(Changes from end of December 2018 to end of
December 2019)
UAF: 107%
EasyBuy: 106%
FRF: 114%
ACF: 722% *Operations initiated in FYE 2019
PDP: 481% *Operations initiated in FYE 2019

Headquarters
District heating
and cooling

We have started new efforts in retail financebusiness in the Philippines and the P2P lending
business in Indonesia since the previous fiscal year.
We have improved the number of customers andloan balance, which are also our KPI in our otherexisting businesses.

We will promote efforts toward Communicate appropriately
environmentally friendly
with neighboring stakeholders
regional energy use.
in the Jingu Gaien district.

Energy &Chemicals
Company

18

Submit a plan proposalthat gives our specificenergy plan in theredevelopment to theTokyo Metropolitan
Government.

We started discussions with the relevant
stakeholders to spread and promote district heating
and cooling to neighboring areas.

Maintain the stable
operations of district
heating and cooling in the
Jingu Gaien district andpromote the spread of it
to neighboring areas.

We have started discussions with the relevant
stakeholders to spread and promote district heating
and cooling to neighboring areas.

Sustainability at the ITOCHU Group

Environment

Society

Governance

Ensure Stable Procurement and Supply
Risks

Opportunities
Increase in resource demand attributed to an increasein population and improvement of living standard in
emerging countries.
Winning customer trust or creating new businesses witha stable supply of environmentally friendly resources
and materials. And others.

Impact of opposition movement resulting from theoccurrence of an environmental problem and worsening
relationship with local communities.
Structural exhaustion of the overall industry caused by
the occurrence of price competition, mainly in the
consumer-related sector. And others.
SDGs
Targets

Issues toAddress

Co

Business Area

Commitment

Specific Approach

Performance Indicators

Degree of Progress

TextileCompany

Environmentallyfriendlymaterials(sustainable
materials) suchas recycled
fibers

We will accelerate initiatives forthe recycled fiber business, notonly to create new businesses
but also to help solve the global
problem of apparel waste andreduce petroleum-derived
materials.

Work aggressively on therecycled fiber businessand lead the industry inpromoting the use ofsustainable materials.

Commercialize the recycled
fiber business as soon as
possible. Increase the ratio ofsustainable materials tomaterials we trade.

We strengthened the supply chain from raw
materials to products with a focus on sustainable
raw materials. We launched the RENU project andare currently expanding the marketing of recycled
polyester globally.

Mining businessWe will contribute to the stable
operation of various industries
by maintaining and developing
reliable supply chains foressential raw materials andfuels.

Acquire equity interests insuperior projects to secureresources to form thebasis for the steadysupply of raw materials
and fuels.

Acquisition of superior
resource projects to pass onto the future generations, inaddition to maintaining andexpanding our existing
portfolio of highly resilient
mining projects.

For the purpose of acquiring superior intereststhat will lead to the next generation, we havedecided to invest in the Longview coking coalmine in the U.S. owned by North Central
Resources, LLC.
This coal mine will produce high-quality coking
coal at strong cost competitiveness.

Brandmarketingbusiness

We will contribute to increasing
the visibility of a sustainable
lifestyle by taking advantage of
our strengths as a marketingcompany.

Raise awareness of an
ethical, sustainable
lifestyle through brandbusiness, thereby
promoting awarenessraising not only in theoverall industry but also
among consumers.

FYE 2021 : Take initiatives
with new brands. Have asustainable lifestyle
understood and instilled more
widely.

We have not entered into a contract with a new
brand. However, we have realized cases using the
fabric of FOOD TEXTILE that reuses ingredientsscheduled to be discarded as dyes in our mainbrand of CONVERSE shoes.

We will aim to establish a
recycling and reuse model.

We will supply recycledresin in collaboration withbrand owners.

Establishment of a recycling
program and sales of recycledresin.

* Because of new commitment, review will be
conducted from the next fiscal year.

Stable supply
of industrial
resources andmaterials
Metals &MineralsCompany

Provision ofcommodities
that help
achieve asustainable
lifestyleTextileCompany

Efforts leading
Energy & Plastic-related
to solutions to
Chemicals environmentalsocialCompany response
problems

Usingsustainable
forestresources

GeneralProducts& Realty
Company

Realization ofsustainablesupply ofnatural rubber

GeneralProducts& Realty
Company

Establishing a
supply chain
reflecting
consideration
for humanrights and theenvironment

TextileCompany

Sustainablemine
developmentthat reflectsconsiderationof the risks in
Metals &occupational
Minerals
safety andCompany
health andenvironmental
risks, and that
contributes to
local
communities

Wood
products &materials
Pulp
Woodchips

We deal in sustainable forest
resources to reduce the impact
on the environment and preventthe increase of greenhousegases.

Continue to request
suppliers who have yet
to obtain certifications to
obtain them.
Conduct sustainability
surveys of suppliers andvisit them.

FYE 2026: Aim to achieve arate of 100% for certified orunder high-level management
materials that we handle.

Wood products & materials: We are continuing
to encourage and review suppliers. We
established a path to achieving ahead ofschedule a rate of 100% for certified or underhigh-level management wood products &materials that we handle in FYE 2021.
Pulp and woodchips: We achieved a rate of
100% for certified or under high-level
management materials that we handle.

Natural Rubber

We shall use our best efforts toestablish measures to identify
any suppliers developing on
High Conservation Value (HCV)
areas, High Carbon Stock (HCS)
areas and peatland, in order toavoid procuring rubber fromthem.

We will establish a
traceability system tomake uncertain raw
material procurement
supply chain tranceparet.

We aim to procure raw
materials with traceability andsustainability ensured innatural rubber processing
business.

We are developing a traceability system using
blockchains. We plan to introduce this around thesecond quarter of FYE 2021.

Supply chain
management

We will promote informationsharing in the overall Group andestablish a safe, secure supply
chain, thereby helping
customers with risk reduction
and contributing to sustainableeconomic development.

Make Group-wide efforts
to review the social andenvironmental safety ofthe supply chain andmake improvements asnecessary, thereby
promoting theestablishment of a safe,
secure commodity supply
system.

FYE 2024: Establish andvisualize the supply chain of
the overall Group, frommaterial procurement to sales,
to ensure a responsible
procurement policy.

We implemented this in 50 companies inSouthwest Asia (e.g., Vietnam and Indonesia)
compared to the 80 companies that was ourtarget in FYE 2020. Separately, we conducted afact-finding investigation questionnaire on thestatus of compliance with the Labor Standards
Act and Industrial Safety and Health Act forforeign technical intern trainees in 211 sewing
plants in Japan.

Mining businessWe will promote sustainable
development of natural
resources by fully committing
to EHS (environment, health,occupational safety) andharmonious coexistence withlocal communities in areas
which we operate.
We will improve local
infrastructure such as medicalcare and education.

Ensure the thoroughapplication of the EHS
guidelines.
Contribute to local
communities throughactivities for improving
medical care, educationand infrastructure.

19

Implementation of annualinternal seminars to ensure
our employees are fully
aware of the EHS guidelines.
Donations to medical care,education and build
infrastructure in local
communities.

We held internal EHS (Environment, Health and
Safety) training courses for supervisors andcompany employees belonging to sections
engaged in resource development. The
attendance rate of those subject to this training
was 100%.
We checked the proper compliance to the EHS
guideline by one new project and eight existing
projects in our mining business, and also by one
another resource-related project.
We carried out activities that contribute to the
local community as part of each project weinvest in.
As a special initiative, our Australian subsidiary,
ITOCHU Minerals & Energy of Australia Pty. Ltd.,
together with other local group companies,
contributed A$200,000 in total to the Australian
Red Cross Society as support to recover fromthe damage caused by the Bushfires.

Sustainability at the ITOCHU Group

SDGs
Targets

Issues toAddress

Establishing a
supply chain
reflecting
consideration
for humanrights and theenvironment

Co

Business
Area

Environment

Society

GovernanceCommitment

Specific Approach

Performance Indicators

Degree of Progress

Provisions
field

We will develop a
procurement structurecompliant with thirdparty body certificationand supplier-specificcodes of conduct.

We will promote procurement
compliant with supplier-specificcodes of conduct in coffee bean
producing countries.
We will strengthen the handling of oil
certified by the RSPO - a third-party
certification organization for palm oil.
We will support the establishment ofa promotion and distribution system
in Japan for MSPO/ISPO incooperation with domestic industrial
associations. The aim of this is toencourage the use of certified oil
systems in producing countries.

Coffee beans: Promotion of
procurement compliant with
supplier-specific codes ofconduct in our bases in
producing areas incooperation with suppliers.
Palm oil: Promotion ofprogress information
disclosure upon also
clarifying the KPI indicators
by publishing our
procurement policy.

We are currently giving guidance to producers ineach producing area country to meet thecertification standards. The aim of this is toexpand transactions for certified coffee beans(e.g., those of the Rainforest Alliance and
C.A.F.E Practice).
We have published our procurement policy with
our started target of switching all the palm oil
we procure to sustainable palm oil supplied fromsupply chains compliant with RSPO/MSPO/ISPO
by FYE 2026. We are promoting the constructionof procurement and supply structures in light ofindustry trends and the situation in suppliers.

Fresh foodfield

We will contribute toincreased employment
and an improved living
environment byfostering local
industries.

We will cultivate new producing areas.
We will do this to expand employment
and improve the living environment
through diversification of producing
areas in light of weather risks andthrough the development of local
industries in our Dole business.

Aim for the start of thecommercial production andexport of pineapple processed
foods in FYE 2022 bycultivating pineapples in Sierra
Leone as the cultivation of a
producing area followed by thedevelopment program in thePhilippines.

Food
Company

20

We are promoting the expansion of a pineapple
farm and the construction of a pineapple
processed food manufacturing plant in Sierra
Leone.

Sustainability at the ITOCHU Group

Environment

Society

Governance

Maintain Rigorous Governance Structures
Risks

Opportunities
Improvement of transparency in decision-making,appropriate response to changes and establishment of astable basis of growth enabled by the establishment ofa firm governance system, and others.

Occurrence of business continuity risk or unexpected
loss resulting from the malfunction of corporate
governance or internal control, and others.

SDGs
Targets

Issues toAddress

Ensuring
compliance

Co

Business
Area

Performance
Indicators

Degree of ProgressContinuous directcommunication with
employees through faceto-face training programs
whose contents shall be
updated along with
monitoring the measuresaccording to risks,
expectations from society
and issues on site which
will change with the time.

Registered with the Whistleblowing Compliance Management
System (self-declaration of conformity) on April 10, 2019.
We monitored all ITOCHU Corporation for bribery andcorruption in July and August 2019. We confirmed theapplication status under the Public Officer and Foreign Public
Officer Guidelines, Business Partner Guidelines andInvestment Guidelines based on certificates. We found nomajor problems as a result of that.
We conducted compliance attitude survey on 57,781
employees in ITOCHU Corporation and group companies inAugust and September 2019. The number of employees
subject to this survey increased by approximately 14,000
compared to the previous survey (FYE 2018). The response
rate was 94.9%. This exceeded the response rate for theprevious survey (93.4%).
We provided e-learning on dealing with bribery andcorruption and organized crime for ITOCHU Corporation
employees (January 31 to February 29, 2020).
The situation concerning the implementation of training tours
in FYE 2020 is as follows.
For ITOCHU Corporation : Implemented 53 times with 2,198
attendees
For ITOCHU group companies (implemented in 84
companies): Implemented 195 times with 10,715 attendees

We will make employees
more aware that ensuring
compliance at any time is
our contribution to thecompany and society.

We will implement highly
effective supervision overthe management from an
independent and objective
standpoint and ensure theappropriate and efficient
execution of business
operations by improving
the transparency of ourdecision-making, aiming
to our sustainable growth
as well as the mediumand long-term
improvement of ourcorporate value.

Appoint several outside
directors, who have a highlevel of independence that
fulfills our independence
criteria and are expected
to contribute to thecompany managementwith a high level ofknowledge in theirrespective fields.
Maintain a highly
transparent and objective
directors' and officers'
remuneration system,
which can increase theirmotivation to contribute toour medium- and longterm improvement of ourcompany's performanceand the improvement ofour corporate value.

Continue to implement
measures to strengthen
the supervising function of
the Board of Directors,
through an annual
evaluation of the Board of
Directors.

We will build a system forgroup risk management
and maintain it to manage
Risk
the risk of loss and ensure
management
the appropriateness of ourcorporate group's
operations.

Conduct regular reviews ofrisk management systems
that have been established,including internal
committees and risk
management departments,
various rules andregulations, reporting andmonitoring systems, as wellas the effectiveness of such
systems.

Maintain a firm
governance system in themedium- and long-termby establishing a PDCA
cycle, including
development andimplementation of actionplans by the departments
responsible for risk
management, andmonitoring and reviews byinternal committees.

HeadCompliancequarters

Headquarters

Specific Approach

Recognizing attitude of
employees identifying issues
and ensuring action plans totackle the issues throughperiodic compliance attitude
survey and directcommunications.

Corporate
governance
Maintaining
andreinforcing agovernancesystem forachievingsustainablegrowthCommitment

21(1) The diversity of the Board of Directors (always a one
third or higher percentage of outside Directors; currently
four out of 10 Directors) and the ratio of women (ratio in
the previous fiscal year + 10%; currently two out of 10
Directors) have improved.
(2) We have increased the number of independent
outside members of the Board of Directors and outside
Audit & Supervisory Board Members in the Nomination
Committee to a majority (four out of seven members;+7.1% compared to the previous year). (Four out ofeight Directors: 50% → Four out of seven Directors:
57.1%)We have almost completed the strengthening ofgovernance in structural terms with the implementationof (1) and (2). From the next fiscal year onward, we will
monitor the implementation of our Policy on the
Governance of its Listed Subsidiaries formulated in thisfiscal year and also deal with listing problems involving
ITOCHU and our subsidiaries.
We reviewed the progress situation for the action plans in
the first half of 2019 with each department responsible forrisk management. The Global Risk Management Divisionassembled and made a report to the Internal Control
Committee in October 2019 to the effect that the risk
management structure is functioning. This includes the
response to events that occurred during the applicable
period. It obtained approval for the report from thecommittee.
We reviewed the progress of the second half of FYE 2020
and the action plans of FYE 2021 at the meeting of Internal
Control Committee in April 2020 and obtained approval fromthe committee.

Sustainability at the ITOCHU Group

Environment

Society

Governance

SDGs (Sustainable Development Goals)
Goal 1.End poverty in all its forms everywhere

Goal 2.End hunger, achieve food security and improved nutrition and promote sustainable agriculture

Goal 3.Ensure healthy lives and promote well-being for all at all ages

Goal 4.Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all

Goal 5.Achieve gender equality and empower all women and girls

Goal 6.Ensure availability and sustainable management of water and sanitation for all

Goal 7.Ensure access to affordable, reliable, sustainable and modern energy for all

Goal 8.Promote sustained, inclusive and sustainable economic growth, full and productive employment
and decent work for all
Goal 9.Build resilient infrastructure, promote inclusive and sustainable industrialization and foster
innovation

Goal 10.Reduce inequality within and among countries

Goal 11.Make cities and human settlements inclusive, safe, resilient and sustainable

Goal 12.Ensure sustainable consumption and production patterns

Goal 13.Take urgent action to combat climate change and its impacts

Goal 14.Conserve and sustainably use the oceans, seas and marine resources for sustainable
development
Goal 15.Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage
forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss
Goal 16.Promote peaceful and inclusive societies for sustainable development, provide access to justicefor all and build effective, accountable and inclusive institutions at all levels
Goal 17.Strengthen the means of implementation and revitalize the Global Partnership for Sustainable
Development

22

Sustainability at the ITOCHU Group

Environment

Society

GovernanceInitiatives: Sustainability Advisory BoardFYE 2020 Sustainability Advisory Board
Overview
The Sustainability Advisory Board convened at Tokyo headquarters on
December 6 to hold a dialog on sustainability issues between the
ITOCHU Corporation management and outside stakeholders. The
Sustainability Advisory Board was established to engage outside
stakeholders in a dialog to determine whether the direction we aretaking with regards to sustainability is aligned with the needs of society
as ITOCHU Corporation's business grows more diverse and widespread,and then to apply the insights to promoting sustainability.
In FYE 2020, we welcomed three experts on the latest trends in theinternational community concerning circular economy to address thetheme of "Sustainable Business Direction in a Circular Economy" fromdifferent perspectives of industry, academia and government. In a frankexchange of ideas, they offered candid advice based on the business'
impact on society and trends at other companies. One of the comments
received referred to the expectation of "the Japanese society to have aleading general trading company like ITOCHU to build a new businessstyle promoting coexistence with society." We value the opinions of theexperts and all the participants and hope to reflect them in our efforts
to further advance sustainability on a company-wide basis.
Sustainable Business Direction in a Circular Economy
Sustainability Advisory Board Members (Job Titles at the Time)
Mr. Eiji Hosoda Professor of Business Administration and Information Science, Chubu
University, Professor Emeritus, Keio University
Ms. Mami Fukuchi Associate Professor of Graduate School of Interdisciplinary Information
Studies, The University of Tokyo
Mr. Hidemi Tomita Director, Lloyd's Register Japan K.K.
ITOCHU Members (Job Titles at the Time)
Fumihiko Kobayashi Member of the Board, Senior Managing Executive Officer, Chief
Administrative Officer
FYE 2020

Noriya Hashimoto General Manager, Planning & Administration Department, Textile Company
Tatsuya Hirano General Manager, Planning & Administration Department, Machinery Company
Yoshihiko Ogura General Manager, Planning & Administration Department, Metals & Minerals
Company
Isao Nakao General Manager, Planning & Administration Department, Energy & Chemicals
Company
Kuniaki Abe General Manager, Planning & Administration Department, Food Company
Tsutomu Yamauchi General Manager, Planning & Administration Department, General
Products & Realty Company
Tadayoshi Yamaguchi General Manager, Planning & Administration Department, ICT &Financial Business Company
Tetsuya Mukohata Manager, Planning & Administration Section, The 8th Company
Yoshihito Tabe General Manager, Sustainability Management Department (served as
Moderator)

23

Sustainability at the ITOCHU Group

Environment

Society

Governance

Climate Change
Sustainability Advisory Board Members (Job Titles at the Time)FYE 2019

Mr. Kenichi Suganuma Ambassador Plenipotentiary and Extraordinary (in charge of climate
negotiations), Ministry of Foreign Affairs
Mr. Tsuyoshi Mizuguchi Professor of Economics, Takasaki City University of Economics
Mr. Hidemi Tomita Director, Lloyd's Register Japan K.K.

Review of Material Sustainability Issues (Materiality)
External Environment Related to Sustainability and Promotion of Sustainability by
ITOCHUFYE 2018

Sustainability Advisory Board Members (Job Titles at the Time)
Ms. Mariko Kawaguchi Senior Researcher, Daiwa Institute of Research Holdings Ltd.
Mr. Takeshi Shimotaya Managing Director, Sustainavision Ltd.
Mr. Hidemi Tomita Director, Lloyd's Register Japan K.K.

24

Sustainability at the ITOCHU Group

Environment

Society

GovernanceInitiatives: Sustainability Awareness Activities at ITOCHU
While pursuing sustainable activities, ITOCHU raises awareness within the Company so as to further ITOCHU Group
employees' understanding and to apply solutions to social issues in our business in a manner that conforms to thelatest global trends.

Raising Awareness with "ITOCHU Monthly""ITOCHU Monthly," our in-house magazine issued every month in three languages(Japanese, English and Chinese) presents information, terminology and initiatives
relating to sustainability. There is also an annual feature on sustainability to further
embed sustainable practices at the company.

Sustainabilty Test and Employee Questionnaire
The online Sustainability Test and Employee Questionnaire are conducted every year for all ITOCHU Corporation
executives and employees worldwide to further spread sustainability in the company and gauge our awareness ofthe subject.
Theme

Participation

FYE 2019"ESG – Climate Change Response, Business & Human Rights"

99.9%

FYE 2018"ITOCHU's Further Growth – ESG Investment"

99.5%

FYE 2017

CSR in the New Era for the Sogo Shosha

99.8%

25

Sustainability at the ITOCHU Group

Environment

Society

Governance

Sustainability Seminars
We have been holding in-house sustainability seminars on a continuous basis since 2007 to bring in outside
insights and ideas on various sustainability issues.

Recent Seminars
For the sustainability seminar on "Business and Human Rights" on
December 13, we invited Japan NGO Center for International
Cooperation (JANIC) Secretary-General Hideki Wakabayashi and Lloyd's
Register Japan K.K. Director Hidemi Tomita. During the first session, Mr.
Wakabayashi gave a keynote address in which he shared discussions at
the UN Forum on Business and Human Rights that convened in Geneva
at the end of November 2018. In the second session, Messrs.
Wakabayashi and Tomita joined a lively panel discussion guided byquestions on issues people face in business settings to consider how
trading houses operating worldwide should handle human rights issues.
Holding the seminar provided a fine opportunity to reexamine theresponsibilities our company should uphold in each of our businesses.

The Panel Discussion

FYE 2019

Business and Human Rights (in the Supply Chain)

FYE 2018

Business and Human Rights (Development)

FYE 2017

What Companies and Consumers Can Do to Create a Sustainable Society

FYE 2016

Global Initiatives and Innovations to Implement Bold Global Warming Countermeasures

FYE 2015

Running a Business to Solve Global Issues

26Sustainability at the ITOCHU Group

Environment

Society

GovernanceInitiatives: The United Nations Global Compact
Involvement in the United Nations Global Compact
In April 2009, ITOCHU Corporation joined the United Nations Global Compact, a global
initiative to achieve sustainable growth for the international community. ITOCHU will
fulfill our corporate mission of "Sampo-yoshi" in accordance with the United Nations
Global Compact's 10 principles covering human rights, labor, the environment and anticorruption.
United Nations Global Compact (https://www.unglobalcompact.org/)

The Ten Principles of the United Nations Global Compact
Principle 1 Businesses should support and respect the protection of internationally
Human Rights

proclaimed human rights; andPrinciple 2 make sure that they are not complicit in human rights abuses.
Principle 3 Businesses should uphold the freedom of association and the effective
recognition of the right to collective bargaining;

LabourPrinciple 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.
Principle 7 Businesses are asked to support a precautionary approach to environmental
challenges;

Environment

Principle 8 undertake initiatives to promote greater environmental responsibility; andPrinciple 9 encourage the development and diffusion of environmentally friendly
technologies.

Anti-Corruption

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

Work with Global Compact Network Japan
ITOCHU Corporation is the corporate director of Global Compact Network Japan (GCNJ), the local network for theUnited Nations Global Compact in Japan. Our proactive participation in this work also includes sending employees
to provide assistance with their activities.
The GCNJ learns from other companies' practices and academics, and also consists of subcommittees fordeliberations and exchanging ideas on specific topics concerning approaches and initiatives for sustainability. In FYE
2020, ITOCHU participated in the following subcommittees.
ESG Subcommittee
Environmental Management Subcommittee
Supply Chain Subcommittee

27

Sustainability at the ITOCHU Group

Environment

Society

Governance

Other Sources of Reference
When advancing sustainability, we refer to the following kinds of international guidelines and principles, such as theTen Principles of the United Nations Global Compact and the Sustainable Development Goals (SDGs) adopted by
the United Nations in September 2015.
United Nations Global Compact (participant)
GRI Guidelines
UN Declaration of Human Rights
International Integrated Reporting Council (IIRC)
UN Guiding Principles on Business and Human Rights
Keidanren: Charter of Corporate Behavior
Sustainable Development Goals (SDGs)*
Japan Foreign Trade Council: "Shosha's Corporate Environmental Code of Conduct," "Supply Chain CSR Action
Guidelines"
Declaration on the Rights of Indigenous Peoples
CDP
Basic Principles on the Use of Force and Firearms by Law Enforcement Officials
OECD Guidelines for Multinational Enterprises
ISO 26000* Sustainable Development Goals (SDGs): Following the 2015 deadline for the Millennium Development Goals(MDGs), the SDGs set goals for sustainable development by 2030. The 17 goals address issues such as poverty,
starvation, energy, climate change and social equality.

28

Sustainability at the ITOCHU Group

Environment

Society

Governance

Stakeholder Relations
Policy & Basic Approach
In our diverse range of corporate activities conducted worldwide, ITOCHU Group place strong emphasis on
dialogues with various stakeholders. We provide information about the ITOCHU Group activities, and we value theopinions of our stakeholders, both expectations and concerns. For our sustainable growth, we reflect measures inour business activities to further advance sustainability on a company-wide basis.

* Besides those noted above, the list of our major stakeholders includes many other parties.
Stakeholders
Suppliers,
Customers, andConsumers

Shareholders,investors, andfinancial institutions

Political organization,
trade association

Local communities,
NGOs, and NPOs

Employees

Main Methods of Dialogue
Provision of information through the Annual Report and official website
Notification of Sustainability Action Guidelines for Supply Chains
Quality control and Sustainability Surveys on supply chainsContact for inquiries
General meeting of shareholders
Investors meeting on business results
Provision of information through the Annual Report and official website
Response to investigations and ratings performed by socially responsible investors
Debt IR
Participation in the government, the ministries related committees and councils
Activity through the trade association(Japan Business Federation, Japan Foreign Trade
Council)Social contribution activities and volunteer activities
Stakeholder dialogue
Dialogue with residents of areas around project sites
Regular communication with NGOs and NPOs
Provision of information via the intranet and in-house magazines
Communication via training sessions and seminars
Provision of career counseling
Establishment of a 24-hour employee consultation desk system
Implementation of employee awareness surveys
Labor-management meetings (including management meetings and settlement ofaccountings meetings)
General employee meetings at each company
29

Sustainability at the ITOCHU Group

Environment

Society

Governance

Reference Data FYE 2020: The Expense of Trade Association and Social
Contribution(Unit: 1 million yen)
Trade association

63

Economic association

151

Political association

30

Other association

114

Total

358

Social contribution (donation)30

109 (108)