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PRESIDENT’S COMMITMENT
Fully Committed to Recovery in the Disaster
Region and of the Japanese Economy

We will strive to solve
social issues and create
new corporate value
through CSR rooted in thefront-lines of business.

I would first like to extend my deepest sympathies to everyone
affected by the Great East Japan Earthquake that occurred on March
11, and express my sincere gratitude for the words of encouragement
for Japan received from so many countries around the world. The
entire ITOCHU Group is committed to offering its full support to theregion. The role of private-sector corporations like us in a crisis ofunprecedented proportions is to provide the kind of highly targeted,long-term support that cannot be provided by the government. In
talking with local people in the disaster area, I came away with astrong sense of the necessity to meet a truly diverse set of needs
going forward. Recovery efforts are currently transitioning from emergency post-disaster relief to regional revitalization and economic
recovery. We intend to accurately identify changing local needs andcontinue providing sustained support through our main businesses asa general trading company with many functions. Furthermore, amid
concerns that Japan’s international presence is waning, we will reaffirm the importance of the roles general trading companies play, andtackle business with the resolve of a company set on driving Japan’s
economy forward. (See pages 5 and 6)

Shifting to Proactive Management and Rigorously
Practicing a Front-line Approach to CSR
Our new medium-term management plan, “Brand-new Deal 2012,” wasset in motion in April 2011. The name evokes something completely
new, while also suggesting a new set of measures. Under the banner ofthe new ITOCHU, we will shift to a distinctly proactive management
approach and promote the basic policies of strengthening front-line
capabilities, proactively seeking new opportunities, and expanding ourscale of operations. Effective April 2011, we implemented a majororganizational restructuring of the largest scale in 11 years, going fromseven Division Companies to five and reducing administrative divisions
at the head office from 16 divisions to 11, in an effort to expedite andincrease the efficiency of operations. (See page 13)
We also revised our basic policies for CSR promotion, adding“through a front-line approach” to “communication with stakeholders”
as well as new policies on promoting businesses that help solve social
issues and involvement in and contributions to the development oflocal and global communities. First of all, communication through aMasahiro Okafuji
President andChief Executive Officer

Medium-Term Management Plan

Basic Policies 䡲 Strengthen Our Front-line Capabilities

Brand-new Deal 2012

䡲 Proactively Seek New Opportunities
䡲 Expand Our Scale of Operations

FY2012–FY2013

Measures by
Key Sector

Guided by the basic policies of “Strengthen Our Front-line
Capabilities,” “Proactively Seek New Opportunities,” and“Expand Our Scale of Operations,” every officer and employee
is moving with assertive and forward-looking action to “Earn,
Cut, Prevent!” in the drive to create a new ITOCHU.
2

䡲 China: Aggressively Expand Business
Machinery-related:䡲
Increase and Accumulate Assets
Natural Resources:䡲
Expand and Upgrade Businessfront-line approach fundamentally means interacting humbly withother people as equals. In my own experience, visiting customers
directly and communicating with them from their perspective whileconstantly thinking about the issues affecting their industry translates
into a sustained business relationship. There is an enormous difference in the quality of information you acquire by going to the site,
getting a feel for the atmosphere and listening, compared to justhandling something over the phone. There were many times I learned
the customer’s expectations for ITOCHU and their concerns just basedon offhand remarks.
The business of a general trading company spans a range ofcountries and industries. We recognize that we must understand the
expectations placed on us and concerns about us through communication on these various front-lines of countries and industries andincorporate them into our businesses. Furthermore, to exist in harmony with society we must identify what stakeholders expect of us
and what concerns they have about us, which means communicationon the front-lines is highly important. Based on this understanding wewill further strengthen communication with diverse stakeholders on
our many front-lines.

considerable size and strength. This is one of the reasons companies
strive for growth. ITOCHU, for its part, intends to give equal weight toincreasing revenues and helping solve social issues.
At the same time, we believe that in conducting business aroundthe world it is important to actively participate in society as a memberof the local community and the global community and to contribute todevelopment at the local level, even outside of our businesses.
ITOCHU will continue to energetically engage in social contribution
activities all over the world.

Developing Human Resources for Front-line CSR
Conducting business in a multitude of countries with differing culturesand laws necessarily takes partners that are locally rooted, have astrong sense of ethics and are trusted by society. When selecting
partners we place a great deal of emphasis on the company’s values
and ethical outlook. Moreover, in order to effectively carry out a joint
project with a partner, human resources must be developed who arecapable of communicating in a timely and straightforward manner. It
is said that people are the real assets of a general trading company,and for ITOCHU human resources are our lifeblood—we are among
the top companies in Japan in terms of money spent on training perperson. We spare no expense when it comes to human resources
development. Last year we launched a new program targeted atyounger employees for short-term study of Chinese and other specialty languages, and began sending them to China and other countries positioned as priority markets where the languages are spoken.
Through the program we hope to train more locally rooted specialists
in the respective markets. These personnel will promote locally rooted
CSR with high proficiency as professionals in their industries.

General Trading Companies Should Actively Workto Solve Social Issues
Guided by “Committed to the Global Good,” the mission of ITOCHU,
we are working to solve social issues at the global level. People
pursue prosperous, affluent lives in both a material and spiritual
sense. We want to help people enjoy prosperous and better lives.
Linking this intention to the creation of sustainable societies may beconsidered the ultimate form of CSR. This also leads to the practice of
sampo yoshi (good for the buyer, seller and society), which was trumpeted by the Ohmi merchant Chubei Itoh, the founder of ITOCHU.
For this reason as well we must do what we can for society throughour businesses to help solve social issues, specifically climate change
and human rights concerns. Corporations must also operate based on
the idea of helping solve social issues by anticipating market growthover the long term and establishing a foothold in those markets. We
believe that businesses in the early stage of development are precisely
what general trading companies should be involved in, and in our new
medium-term management plan, renewable energy (see pages 9 and
10) and rechargeable batteries are positioned as priority sectors. Active
involvement by general trading companies, which build value chainsfrom upstream to downstream, helps markets emerge, promotes
technology advances, raises efficiency and fosters businesses. Throughthis cycle we hope to help solve issues facing society. However, getting
involved in businesses in booming but unstable markets requires

Basic Policies for
CSR Promotion
FY2012–FY2013
Alongside the drafting of its management plan, ITOCHU formulated basic policies for CSR promotion, with the aim of globallypromoting CSR with direct linkages to the management plan.
Through integrated CSR and management promotion, ITOCHU
seeks to promote CSR via its core business activities.

Creating New Corporate Value with Society
The relationship between companies and society is currently undergoing considerable change. In the midst of this change, we must be
fully aware of the impact of our business activities on society andmust not inadvertently become indirectly complicit in any humanrights violations or incidents of environmental pollution. ITOCHU has
taken part in the United Nations Global Compact since 2009, a set ofuniversal principles on human rights, labor, the environment andanti-corruption, and we continue to work to raise awareness within
the company and among suppliers.
Serious engagement in creating value that can be shared with society
through our businesses will raise our competitiveness and lead to further
growth. We will take on the challenge of creating new corporate value by
further strengthening the front-line capabilities that enable successful
performance as industry professionals by each and every employee.

 Strengthening communication with stakeholders through afront-line approach Promoting businesses that help solve social issues
 Strengthening supply chain management (Respect for humanrights and consideration for the environment) Promoting education on CSR and environmental conservation
 Involving in and contributing to development of local andglobal communities

3

GREAT EAST JAPAN EARTHQUAKESteps Taken After theGreat East Japan Earthquake
The Great East Japan Earthquake that occurred on Friday, March 11, 2011, caused widespread damage throughout eastern Japan.
Immediately after the disaster, ITOCHU set up a BCP (Business Continuity Plan) Response Headquarters and began taking steps torestore operations and provide the affected areas with assistance in the form of monetary donations and supplies.
Over the longer term, we will continue to spare no effort in the execution of our business activities in order to provide the necessary
support to recovery efforts in the region.

Major Steps Taken in the
Immediate Aftermath

Basic BCP Structure(As of April 2011)

Rearguard Support Team

Human Resources & General Affairs Division

Secure safety of personnel in building
Secure safety and restoration of Company facilities
Secure back-up office Procure supplies

After the scale of damage from the earthquake and tsunami
BCP Response
Headquarters
became clear, the BCP Response Headquarters was set up
company corporate planning
General Manager
Operational Response Team Division
divisions, and others
over the weekend (March 12, 13) and began operating on
Restore operations at Division Companies, etc.
March 14 with the initial aim of ascertaining the safety of
Respond to customers (including Group companies)
Corporate
Planning
our employees and sustaining business operations.
IT Planning Division
System Response Team
& Administration
Our primary focus was on establishing a structure to
Division Supervision
Restore information and communications systems
provide support for the damaged Tohoku Branch. We thenassessed the situation at Group companies to determine
Human Resources &Personnel Response Team
General Affairs Division, Secretariat
what support they needed, and provided assistance accordConfirm safety and whereabouts of officers and employees
Secure safety and key staff to start restoration efforts
ingly. The disaster wreaked havoc on the transportation
networks in Tokyo and surrounding areas, preventing many
Corporate Communications Division
PR Response Teampeople from traveling to work on the following Monday. In
External PR
response, we used internal emergency contact networks,
our email system for verifying safety and whereabouts(sending of group email), and our intranet and extranet to communicate with our employees in the early hours of the 14th about coming
Donations and Supplies
in to work that day.
Of the monetary donations of ¥400 million made by ITOCHU, one part
Although the earthquake overturned office fixtures and caused
we used to support a wide range of activities in those areas hardest
other damage to the Tohoku Branch, normal operation was resumed
hit by the earthquake and tsunami through the local governments ofbarely ten days later on March 22. While the state of emergency that
Miyagi Prefecture, Iwate Prefecture, Fukushima Prefecture, Ibaraki
prompted enactment of the BCP was rescinded on March 29, the BCP
Prefecture and Aomori Prefecture. Another part of the donations was
Response Headquarters will remain in place to mount a response to
made through an NPO, JAPAN PLATFORM, a consortium of NPOs, theanticipated power shortages.
business community, and representatives from government agencies.
Also, another point of having a BCP is to have specific preventive
This part was used to fund the activities of NPOs working on thesteps of some kind already in place, not just enact them when catasground. Emergency relief supplies were prepared, packed, and delivtrophe strikes. Going forward, ITOCHU will do all it can to prevent
ered in accordance with the requests of the disaster relief headquarfurther tragedy and help those in the region who have already suffered.
ters for the affected areas. Our deliveries of SPAM®, a canned,
precooked meat product, were particularly well received as it requires
neither refrigeration nor a can opener.
Actions by the BCP Response Headquarters

Donations & Supplies of Food, Clothing, etc.

Confirmed safety and whereabouts(ITOCHU Corporation employees, Group company employees)
䡲 Confirmed damage status (branches, Group companies)
䡲 Secured and reestablished ways to contact employees
䡲 Responded to employees䡲

Clothing 10,000 items of underwear, children’s clothing, and towels
Food
3,000 boxes containing a total of 72,000 cans of SPAM** Of which, 1,500 boxes (36,000 cans) were donated by Hormel Foods Corporation, theAmerican maker of SPAM®.

Flexibility in coming to/returning from work, limited business trips

䡲 Business continuity-related matters䡲 Preparing for large-scale aftershocks and sporadic, large-scale blackouts

Continuing Power Conservation Efforts
The invocation in Japan of Article 27 of the Electricity Business Act
has mandated a 15% year-on-year reduction in peak electric powerusage. To ensure that it clears this hurdle, ITOCHU set a conservation
target at the Tokyo Headquarters Building that represents a 25%
reduction from the previous fiscal year. We are effectively combining
the use of an energy management system with several energy-saving
measures, including a switch to LED ceiling lights, the use of LED
desk lights, optimal air-conditioning settings, and the use of energysaving software on PCs. Power consumption at the Tokyo Headquarters Building is also posted to the Company intranet approximately
every 30 minutes as a way to promote active participation in the

Emergency power generation, emergency food supplies, cafeteria food supplies,
emergency supplies, etc.

䡲Preparing to sustain normal operations during planned blackouts
and expected power shortages during summer
Set up an Osaka BCP organization, examined issues in each organization,
promoted a BCP network

䡲 Social contribution (including support to affected areas)
Provisioned ¥400 million in donations, and provided clothing and foodConducted fundraising activities
Transported food to the Tohoku Branch and Group companies
Met requests to conserve energy (adjusted room temperatures, lighting
intensity, elevator use, toilet facilities)

䡲 Provided information to employees and outside stakeholders
4New Program Initiated to Encourage Employees
to Volunteer in Relief Efforts

effort to save energy. As concern that the problems surrounding theelectric power supply in Japan will grow protracted, ITOCHU will offer
energy management and energy-saving solution businesses to meetcustomer needs.

In May, ITOCHU set up a system for supporting employees wanting tovolunteer for relief efforts. A Workers’ Volunteer Program organized by
the Joint Committee for Coordinating and Supporting Voluntary Disaster
Relief Activities, with recruitment handled by the 1% (One Percent)
Club*. Employees were also directed to the “Kankeiren Volunteer Bus,”
with recruitment efforts handled by the Kansai Economic Federation(Kankeiren). In addition, ITOCHU is encouraging employees to takevolunteer leave to participate in the program, and is paying the actual
costs for participation (transportation, board, and other costs). As aGroup we intend to encourage more and more employees to give theirtime to help those in need, and in doing so contribute to the recovery of
the affected regions.

The Great East Japan Earthquake Recovery
Assistance Site
In May 2011, ITOCHU launched a new website, the Great East Japan
Earthquake Recovery Assistance Site, on its intranet to share information on the support activities of ITOCHU employees and the ITOCHU
Group itself.
Posted on the website are up-to-date
information on the Group’s assistanceprograms and employee volunteers, updates
from the Tohoku Branch on local conditions,
reports submitted by volunteers and more.
We intend to use this site to keep employees
informed about support activities for fostering recovery over the long term.

* Established by Keidanren in November 1990. Members are enterprises and individuals who pledge tocontribute 1% or more of their operating profits or disposable incomes to social contribution activities.

Volunteer Report

Charity Concert Held in Sendai

Don’t Think, Do

Every year for the past 20 years, ITOCHU has been holding a concert
in the lobby of its Tokyo Headquarters. This year however, the event
was moved to Sendai in an effort to help cheer up communities
affected by the recent disaster. Held on July 19, the concert saw anaudience of 1,000 treated to a performance of classical music by the
New York Symphonic Ensemble. A talk show featuring actress Keiko
Takeshita, the audience’s guide to the evening’s entertainment,
Masahiko Ichiriki, president of regional news company Kahoku
Shimpo, and ITOCHU chairman Eizo Kobayashi was also held during
the event. Donations collected from those attending were presented to
the Kiwanis Club of Sendai Children’s Fund.

Before going up to Tohoku I had seen pictures of the destruction on the TV
and read about it in the news, so I thought I knew what I was getting into. I
was wrong. Seeing something in print and witnessing it in person, right infront of your eyes, are two very different things. I still wonder whether or not
what I did in Tohoku will be able to actually accomplish anything of value. Be
that as it may, I believe we should take action without hesitation. I reallythink that the Workers’ Volunteer Program was a very good chance toparticipate in volunteering, especially because it was supported and encouraged by my employers at ITOCHU. It has become easier now to participate involunteering compared with how thesituation was in thepast. Please makethat first step. The
experience reallychanges people. I
hope that many more
people have such an
opportunity to help
those affected by thiscatastrophe.
Far left: Satoshi Takagi

New York Symphonic Ensemble

Chairman Kobayashi in conversation with
President Ichiriki

Satoshi Takagi, Legal Division

Growing Post-Disaster Volunteerism Rieko Ueda, Textile
Company, Planning &from Western Japan
Administration Department

Produce from Affected Areas Served Up at the
Employee Cafeteria

After the earthquake struck, I was eager to volunteer to help. But the
distance of the the Tohoku area from western Japan, among other things,
ended up becoming barriers to me doing so for a while. However, I finallymanaged to volunteer thanks to the Kansai Economic Federation, a volunteer leave of absence from ITOCHU, and my colleagues, who shared myworkload during my absence. I was greatly encouraged by all of this
support. I am grateful for the incredibly valuable experience that volunteering gave me. Before leaving, I was unsure whether I was physically strong
enough to help, and worried that I might end up getting in the way. But
once I arrived, those concerns were quickly brushed aside as I took on the
mud and grime all around me with a shovel tightly in hand. This is just one
indication of the virtual mountain of work that needs to be done there. Now
that I and everyone
else who took partare highly aware of
the situation, I hopethat we can help
encourage more
people from westernJapan to volunteer inrebuilding thestricken northeasternregion of the country.

Many farmers in the affected areas have had difficulty selling theirproduce. This is a direct result of many consumers avoiding all
goods grown or reared in the prefectures close to the troubled
Fukushima Daiichi Nuclear Power Plant. As a show of support, theTokyo Headquarters has made a point of sourcing as much of thevegetables for the salads and side dishes offered at its cafeteria,
from such producers as of April. The same is true for the liquor
served by the cafeteria in the evenings. With roughly 1,600 employees patronizing the Tokyo headquarters establishment alone, we
hope that this initiative will play a part, no matter how small, in
helping local
agriculture
through thisdifficult time.

Left: Rieko Ueda
Steps taken at theemployee cafeteria

5

CSR FOR ITOCHU

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

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

The ITOCHU group respects

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

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

society as an international corporation and to put this commit-

to the Global Good.

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

Am I communicating vision and moving forward with others?

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

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

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

ITOCHU Values, considered vital for enabling each employee to

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

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

Am I actively trying new things and pursuing innovative solutions?

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

The Ten Principles of the United Nations Global Compact

ITOCHU’s Participation in the
United Nations Global Compact

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

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

Environment
In April 2009, ITOCHU Corporation joined the United Nations

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

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

Anti-corruption

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

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

Global Good.”

6

CSR for ITOCHU Corporation

Sampo Yoshi and ITOCHU CSR

Basic perspective on CSR at ITOCHU

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

Our founder Chubei Itoh and sampo yoshi

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

Our founder Chubei Itoh(1842-1903)

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

Ohmi merchants(courtesy of Museum of
Ohmi Merchant)

CSR for ITOCHU Corporation

The roots of a management philosophy passed down for 150 years

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

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

A daifukucho ledger fromthe time of ITOCHU's
founding

150 years of history and CSR

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

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

CSR for ITOCHU Corporation

Basic Policy on CSR and Promotion System

Approach to CSR promotion at ITOCHU Corporation

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

Basic Policies for CSR Promotion

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

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

9CSR for ITOCHU Corporation

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

CSR promotion through CSR action plans

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

CSR promotion system at ITOCHU Corporation

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

CSR promotion system

10

CSR for ITOCHU Corporation

Stakeholder Relations

Stakeholders of the ITOCHU Group

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

*

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

11CSR for ITOCHU Corporation

Respect for Human Rights

Policy on Respect for Human Rights

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

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

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

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

Raising Awareness Internally of Respect for Human Rights

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

12

CSR for ITOCHU Corporation

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

FY2010Workshops for Organization Heads

972 people (*)

466 people

190 people

147 people

Training for New Recruits*

FY2011

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

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

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

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

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

Human Rights in the Supply Chain

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

13

CSR for ITOCHU Corporation

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

ITOCHU Corporation FY2011-FY2012 Medium-Term Management Plan

Replies to the CSR Report 2010 questionnaire for employees
Questionnaire for

Questionnaire for

employees of

employees of

ITOCHU Corporation

overseas blocs

Total

Number of employees

5,160

1,913

7,073

Number of replies

4,343

1,255

5,598

Reply rate

84.2%

65.6%

79.1%

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

Questionnaire for employees of

ITOCHU Corporation

overseas blocs

１

Promoting businesses that help solve social issues

Relationships with employees

２

Ensuring a transparent corporate governance

Global warming countermeasures

structure

３

Employees relations

Promoting businesses that help solve social issues

14

CSR for ITOCHU Corporation

CSR workshops

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

A CSR Workshop

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

CSR seminars

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

Inside CSR seminar of the 2010 6thtime

Internal CSR Seminars in the past
1st seminar

Human rights / labor issues

2nd seminar

Global warming and the business of general trading companies

3rd seminar

The social impacts and roles of information technology in Japanese society

4th seminar

Loss and recycling in food distribution

5th seminar

Biodiversity and corporate initiatives

6th seminar

Procedures for assessing environmental and social risk in project finance

15

CSR for ITOCHU Corporation

Implementing CSR Initiatives at Group Companies

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

Workshop for CSR representatives ofgroup companies

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

Group companies targeted for CSR implementation at a glance

Organization
Textile Company

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

ICT & Machinery Company

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

Energy, Metals & Minerals

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

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

General Merchandise

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

Company

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

Food Company

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

Construction & Realty Division

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

Headquarters Business

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

Organization

Services Co., Ltd., Superex Corporation.

16

ITOCHU GLOBAL CSR MAP

ITOCHU GLOBAL CSR MAP

U.S.A.

Conducting ITOCHU CSR through Business Activities

Initiatives in Lithium-ion
Battery-related Business

ITOCHU Corporation is a general trading company with business operations worldwide.
Through business domains spanning upstream areas like raw materials to downstream areas such as retailing,
ITOCHU is working through trading and business investment to support the lives of people everywhere.

JAPAN

CHINA

Water Resource
Recycling Business

Integrated
Recycling
Business at
Dalian Changxing
IslandFood Safety
Management
Support for
Chinese Business
PartnerSPAIN

P09 HIGHLIGHT

Solar Thermal Power Generation
Business with Abengoa Solar

P 10 H IG H L IG H T

Grain Export Terminal
Project on the US West
CoastWind Power
Project with GE

Development of Energy-savingHomes Utilizing Solar Powerand Other Technologies

P 09 H IG H L IG H T

Introducing E-Statements
for ORICO Credit Cards

Establishment of Largest Solar
Distribution Company in US
P 10 H IG H L IG H T

Fashion Earth PROJECT

Biomass Power
Project

Logistics Network
Enhancement in
China
INDIA

SAUDI ARABIA

Pre-Organic Cotton Project

Rehabilitation of Seawater
Desalination Plant

VIETNAMP10 HIGHLIGHTECUADOR

Bioethanol
Production
Project withPetrovietnam
Oil Corporation

Documentary Report
Project on Supply
Chains (Cacao)

P 11– 12 H IG H L IG H T

MALAYSIA

Conserving Forests with
Hunting WorldINDONESIA

Karawang Industrial
Park Aims for Harmony
with Society
BRAZILP 10 H IG H L IG H T
TextileCompany

Food
CompanyMore details of each project are available on
the ITOCHU corporate website CSR pages

Production of Bioethanol with Bunge

Items with this mark are part of
Taking on the Challenge of Renewable Energy

ICT & Machinery
Company

Construction &Realty Division

Energy, Metals &Minerals Company

Headquarters
Business
Organization

http://www.itochu.co.jp/en/csr/activities/renewable_energy/
Item with this mark is part ofChemicals, Forest
Products & General
Merchandise Company

Documentary Report Project on Supply Chains

http://www.itochu.co.jp/en/csr/supply_chain/reportage/?step=03
Information on other projects can be found in “ITOCHU Global CSR Map”
on the CSR top page of the ITOCHU corporate website.

http://www.itochu.co.jp/en/csr/

17

HIGHLIGHT
For the Prosperity of Future Generations

Taking on the Challenge ofRenewable Energy
The following is an introduction by field to ITOCHU Corporation’s involvement in renewable energy projects worldwide.

Core Subjectsof ISO 26000

Bolstering activities in the renewable energy sector is cited as a priority
area in our medium-term management plan, “Brand-new Deal 2012.”
Wind, solar, geothermal and other renewable energies are expected tosee growth going forward as major sources of energy due to better
government policy and greater knowledge in countries around theworld, lower technology costs, and other factors. ITOCHU intends toinvest in power generation assets and other facilities that utilize theserenewable energy sources and take part in manufacturing and distribution projects for products like bioethanol. Through these initiatives wewill take on challenges that affect the entire planet: reducing greenhouse gas emissions and addressing resource depletion.

Community involvementand development

Global Power Generation Volume by Fuel Type (2007–2035)(1 trillion kWh)

Background to Renewable Energy
and ITOCHU’s RoleThe
Environment

20
Liquid fuels
Natural gas
Nuclear power
Coal
Renewable energy

15

10

5

0
2007

2015

2020

2025

2030

2035 Year

Source: Compiled by ITOCHU Corporation from “International Energy Outlook 2010,” published by the U.S. Energy Information Administration (EIA)

Solar Energy

ITOCHU is working to form competitive value chains by organically linking upstream raw
materials, midstream intermediate products, and downstream system integration andpower projects being developed in Japan, North America and Europe.

Partnership with Abengoa Solar of Spain in
Solar Thermal Power Generation Business

Establishment of SolarNet Holdings, Largest
Solar Distribution Company in US

In December 2010, a partnership was formed with a major Spanish
solar thermal power generator, Abengoa Solar, to develop solar power
projects in Asian and European countries. An agreement was alsoreached to jointly construct two 50 megawatt concentrating solar
thermal power plants in Extremadura in western Spain and carry out
power generation business. ITOCHU will take a 30% stake. Commercial
operation is scheduled to start in 2012, with power generated at theseplants sold to the grid based on the Spanish feed-in tariff system*.
Taking advantage of abundant sunlight in Extremadura, the two plants
will produce enough energy to meet the electricity needs of about
52,000 households and achieve emissions reductions totaling approximately 63,000 tons of CO2 per year.

The solar power distribution business has been expanding significantly
in recent years due to heightened environmental awareness and government support measures. ITOCHU has been developing its solar
business in the US, one of the three major solar markets in the worldalong with Europe and Japan, acquiring system integrators* Solar
Depot in June 2007 and SolarNet in April 2009. These two companies
were integrated in February 2011 to further bolster the business,creating SolarNet Holdings, the world’s largest solar distribution company for mainly household and industrial use. Going forward, synergistic effects from integration will be targeted through unification of sales
networks and reducing costs.
* System integrator: Operator that handles design, sales, and construction of solar power generation systems that combine solar cell modules and peripheral equipment* Feed-in tariff system: A system for purchasing electricity at preferential rates designed topromote the use of renewable energy sources

Similar solar thermal power plant also operated by Abengoa (image courtesy of Abengoa)

Example of past SolarNet projects: Beringer Vineyards, California

18

Wind PowerIn May 2010 ITOCHU and General Electric agreed to comprehensively
partner in uncovering joint investment projects around the world in the
renewable energy sector and signed a memorandum of agreement to thiseffect. The agreement strengthens the two companies’ partnership in
anticipation of increased investment opportunities in renewable energies
at the global level. GE and ITOCHU have cooperated on two joint wind
power projects to date.

Keenan II Wind Power Project in Oklahoma

GE Chairman and CEO Jeff Immelt and ITOCHU President & CEO
Masahiro Okafuji

World’s Largest Wind Power Project
Shepherds Flat, Oregon

The total power capacity of the Keenan II wind farm in the U.S. stateof Oklahoma, which ITOCHU invested in with GE in October 2010, is
152 megawatts (66 2.3-megawatt wind turbines). A 20-year powerpurchase agreement has been signed with Oklahoma Gas & ElectricCompany, and power will be supplied to approximately 45,000
households in Oklahoma. The project is expected to reduce greenhouse gas emissions by roughly
413,000 tons annually. Commercial operation commenced in
December 2010. The wind farm’s
operations and maintenance ishandled by NAES Corporation, awholly owned subsidiary of
ITOCHU and one of the world’s
major power plant operation andmaintenance service companies.

The second joint project with GE after Keenan II is the Shepherds Flat
wind farm in Oregon, which is slated for completion in 2012. Total
capacity will be 845 megawatts (338 2.5-megawatt turbines), andwhen completed it will be the world’s largest wind power project.
Power will be supplied to approximately 235,000 regular households
in California under a 20-year power purchase agreement with
Southern California Edison, a California power utility. The project will
reduce greenhouse gas emissions by approximately 1.5 million tons
annually, and uses 2.5 megawatt wind turbines from GE Energy. The
turbines are larger than other models and generate power using
permanent magnets. The technology used in the generators is highly
reliable and highly efficient. It will improve connectivity with the gridand help reduce wind power costs. The project also includes laying
approximately 150 kilometers of road and stringing roughly 270
kilometers of power lines.

Keenan II wind farm

Bioenergy

ITOCHU is promoting projects that utilize bioenergy, a renewable energy that has
garnered attention because it addresses the global problems of resource depletion andreduction of greenhouse gases.

Participating in Largest Biomass
Power Project in the U.S.

Initiatives with Bungein Brazil

Bioethanol Production Projectin Vietnam

ITOCHU will develop, invest in and operate abiomass power project in northern Florida
through Tyr Energy, a U.S. independent power
producer. The power plant will be the largest
biomass power project in the U.S., with agenerating capacity of 100 megawatts, andwill be fueled by wood chips and tree thinnings. After going into commercial operationin 2013 the project will supply power toapproximately 70,000 households based on a
30-year power supply agreement with thepower utility in Gainesville, Florida. Operations
and maintenance will be performed by NAES,
a wholly owned subsidiary of ITOCHU and oneof the world’s largest operation and maintenance service companies. We intend toactively develop and promote renewableenergies through project initiatives.

ITOCHU has been developing production andsales projects for bioethanol and sugar madefrom sugarcane with Bunge, a major U.S.
agribusiness firm, in the Brazilian states ofMinas Gerais and Tocantins since 2008. Plans
call for expanding the total ethanol production
capacity of both projects to approximately
500,000 kiloliters. The ethanol will be solddomestically in Brazil but also exported to
North America, Europe and Japan. In addition,
bagasse, fibrous matter that remains after thesugarcane is crushed, is effectively utilized asfuel for onsite power generators, with any
surplus power sold in the country. Brazil is amajor bioethanol producer, accounting for
approximately 30% of the global market, andis working to provide stable supplies of highly
cost competitive bioethanol.

ITOCHU is taking part in a fuel bioethanol
production project in Binh Phuoc Province,
Vietnam in partnership with Petrovietnam Oil
Corporation of the Petrovietnam Group,
Vietnam’s national oil and gas company.
Commercial production of bioethanol fromcassava, which is cultivated extensively in
Vietnam, is slated to commence in the springof 2012 with targeted output of approximately 100,000 kiloliters annually. Bioethanol
produced by the project is expected to be
distributed to the market through gas stations
affiliated with Petrovietnam Oil. Vietnam is
expected to promote the production andsupply of ethanol-gasoline blends going
forward as a domestically produced alternative to gasoline.

Biomass Power Generation Plant

Sugarcane being harvested

19

Gas station selling
ethanol-gasoline blends

HIGHLIGHT
Documentary Report Project on Supply Chains
Vol. 3

How Chocolate
Reaches Your Doorstep
ITOCHU believes that informing the public about where products originate is vital to its role as a trading
company. Accordingly, since 2009 ITOCHU has conducted the “Documentary Report Project on Supply
Chains,” offering a glimpse across the entire supply chain of individual products that it handles.

Issues Surrounding Chocolate and ITOCHU’s Role

Core Subjectsof ISO 26000

ConsumerissuesCommunity involvementand development

continuously visits cacao-producing countries to work with local suppliers inensuring that consumers receive a stable source of high-quality cacao beans.
As a part of efforts to maintain the sustainability of cacao cultivation,
we contribute to the KAOKA Fund in Ecuador to support the activities of
local farmers involved in cultivating regional cacao varieties and help raise
their standard of living.

Cacao is produced in equatorial regions far from Japan, so cacao production faces challenges common to agriculture in tropical regions: inconsistent harvests and quality due to irregular weather patterns, and crop
damage due to pests and disease. As a result, cacao farmers often struggle to maintain a decent standard of living.
As a major supplier of cacao beans to the Japanese market, ITOCHU

Ecuador

Cultivation
HarvestQualityinspection
and Control

Fermentation
Drying

Chocolate Starts as Tropical Fruit

From Seed to Cacao Bean

Cacao is a tropical plant that grows
mainly within 20 degrees latitudeof the equator.
Cacao trees are generally
planted and cultivated between tallshade trees. The shade provided
Cacao flowers. Many, manyby the branches allows just theextremely small flowers bloom
right amount of tropical sunlight to on each tree, but only some
get through. Saplings are grownbear fruitfrom seeds, and healthy saplings
are then planted in the ground.
Saplings are often grafted as away to maintain high-quality,
stable cacao cultivation. For
example, in Ecuador, agricultural
Cacao pod. The seeds, which
cooperatives use regional cacao
are used to make chocolate,varieties that are highly disease
are contained in the fruit’s
resistant as their crop foundation, white pulp
which are then grafted to cacao
branches that produce highly aromatic fruit: this enables
production of a stable supply of high-quality cacao.
Cacao trees bloom with countless small flowers, but lessthan three percent of the flowers end up bearing fruit. Small
insects serve as pollen go-betweens and once pollinated it takes
about six months for the flowers to grow into fruit that can finallybe harvested. The period from the start of cultivation to when thetrees bear fruit is around three to six years. High-yield hybrid
cacao varieties may bear fruit in less than two years. Cacao is atropical fruit, so it can be eaten as a fruit. Regional Ecuadoriancacao varieties include fruit with a sweet, flower-like aroma.
There are also hybrid varieties that produce fruit with a refreshing lemon-lime aroma.
Cacao seedpods (=fruit) contain seeds that are used to makechocolate. Once the pods are harvested they are split open andthe fleshy pulp and seeds are removed as soon as possible.
Farmers harvest the cacao pod and remove the pulp from thepods all by hand. The next step is fermentation.

Pulp and seeds taken from cacao pods are fermented for several
days. Yeast, acetic bacteria and other microorganisms activate
various chemical reactions during the process of fermentation,
which creates the basis of the chocolate aroma and foundation of its
flavor. White pulp containing the seeds is gradually reduced during
fermentation, eventually leaving only the seeds, which turn brown.
For agricultural cooperatives and export companies withwell-established quality control systems in place, the entire
harvest to fermentation process is managed by co-op farmers,
contracted farmers, or directly owned farms from various regions;furthermore, the entire process until the start of fermentation iscompleted in the same day. It is also common for farmers notaffiliated with any cooperative or organization to sell to brokers
after individually conducting fermentation and drying. Even within
the same country, there are various routes for the harvest to
fermentation process.
After being fermented cacao seeds (cacao beans) contain water,
so they are dried until the remaining water content is only 7% to
8%. There are several drying methods, including drying the beans
under the sun or drying them with a mechanical dryer that uses gas
heat. Since the climate is tropical, with high humidity and a rainyseason, organizations like agricultural cooperatives and export
companies that consolidate and process cacao in large quantities
tend to use both sunlight and mechanical drying methods.

Shipment

Careful Inspection of
Cacao Beans

Cacao beans are not shipped forexport until they pass quality inspections for aroma, flavor, water content
and other characteristics. If the watercontent is high, it is adjusted again
before shipping. Cacao beans arealso split open to inspect for moldand insect damage.
Cacao beans produced in various
regions are consolidated and exported
to Japan, but prior to export thetraceability of the beans is verified.

Pulp and seeds harvested by farmers are transported
to fermentation facilities. They are carried by donkey
on mountain paths

Left: Cacao pulp and seeds at the start of fermentation.
Surface covered with banana leaves
Right: Fermentation in progress. Color gradually turns brown

20

KAOKA Fund and UNOCACE Initiatives
Chocolate is made from cacao beans, and the cultivation of these beans is highly dependent on small
farmers in tropical regions. Likewise, Ecuador also
depended on many small farmers for the cultivation of
its highly aromatic cacao; however, after World War I,
the country lost its means to export. As a result, theproduction balance greatly deteriorated and crop
disease spread: these combined factors devastated theindustry. Moreover, the international cacao market
lacked stability and the situation gradually grew worse.
Given this background, the Union of the Ecuador
National Cacao Producers (UNOCACE) was establishedin 1999 to support farmers and help raise crop quality.
KAOKA, a French manufacturer of organic

Farmer undergoing training
on grafting cacao trees

chocolate, runs a project that involves returning a
portion of sales proceeds to cacao production
activities. Starting in 2002, KOAKA began supporting the UNOCACE through proceeds from its
project fund. The fund primarily works to re-train
farmers on the cultivation of regional domestic
cacao, while also supporting the production techniques and livelihoods of small farmers by returning the added value gained from high-quality cacao
to the farmers. The project has also received
support from the chef Toshi Yoroizuka, who createssweets with KAOKA products. The ITOCHU Groupsupports the project as well by donating to thefund and selling related products.

Chocolate
processing

Confection created by
Chef Toshi Yoroizuka

Confectionary
manufacturers
Everyday Chocolate
CandiesSpecialty
shops

Chocolate mass is processed into
chocolate candies by confectionary
manufacturers. Some companies
create chocolate by roasting the
cacao beans themselves.

From Cacao Beans to Chocolate
Chocolate imported into Japan goes to chocolate
manufacturing facilities after passing throughquarantine for residual agricultural chemicals andother quality and health inspections.
Pebbles, cacao branches and other foreign
substances are removed in the cleaning process
and the beans are then roasted. Roasting is a major
factor determining chocolate quality, as is the blendof cacao beans that is used. The roasted beans arecrushed and the shell removed and then pulverized
in a grinder to make a paste called cacao mass.
Chocolate dough is made by adding sugar andcocoa butter to the cacao mass. For milk chocolate, milk powder is also added. Fine particles of
cacao, sugar and other ingredients are ground witha precision-crafted metal roll refiner to createsmoothly textured chocolate flakes. Next the flakes
are processed for an extended period of time in amachine called a conche to complete the process.
Chocolate made through this process is thentempered, put into containers, cooled and hardened or is transported to confectionary manufacturers in melted form via tanker trucks.
Confectionary manufacturers process the
chocolate into various sweets and candies anddeliver them to consumers through retail outlets.

Consumers

Professional
ChocolateSome cacao beans with
distinctive aroma and flavor,
like regional Ecuadorian cacao,
are processed into chocolate
for specialty shops. The
chocolatiers at such shops
create chocolate sweets thatbring out the characteristics ofthis type of chocolate.

Cacao farmers. Famers fromvarious production regions
gather for joint technical training
run by the cooperative

Reflections After the Inspection Visit
Everyone is familiar with sweet, delicious chocolate, butwhat people are less familiar with is what chocolate ismade from, the cacao bean, and where and how it isgrown. Most cacao beans are cultivated in agriculturalareas far from urban centers in countries near the equator. Cacao beans are produced on the other side of theworld, in places like Ecuador, where this inspection was
conducted. Cacao beans are able to reach the Japanesemarket safely and securely, only through the efforts, trustand cooperation of producers and exporters.
What is important in the cacao supply chain is that
ITOCHU serves as a bridge between cacao producers
and chocolate consumers, who are
far removed from one another, andlink all the steps on the path from
cacao tree to chocolate.

Technical advisor on cacao and chocolate.
Also participates in producer technology
café-CACAO Representative development in various countries, including a
Cacao Hunter®
chocolate development project in Indonesia

Mayumi Ogata undertaken by the Asian Development Bank.

21

BUSINESS AND CSR

CSR AND
OUR BUSINESSITOCHU Corporation combines trading, business investment andother functions to develop a variety of businesses around the world,
and is promoting CSR through its business activities to realize asustainable society.

Business Outline of ITOCHUThe businesses of the ITOCHU Group comprehensively encompass upstream raw materials
business areas through to downstream retailbusiness areas, enabling it to provide a wide
variety of goods and services that support
people’s everyday lives. In order to advancebusinesses worldwide, we make the fullest useof our capabilities as a Sogo Shosha (general
trading company). In other words, we trade,invest in businesses, and add value to thesebusinesses through their overall coordination.
Precisely because ITOCHU develops businessacross such a broad range of industries andbusiness areas, our emphasis is on promoting
CSR that is deeply rooted in the respective
front-lines of these businesses.

General Meetingof Stockholders
Board of Directors

President & CEO

HMC
Directors, Auditors& Executive
Officers Meeting

Corporate
Auditors’ OfficeInternal Audit Division
Secretariat

Resource Development
andMaterials Procurement

Business overview

Major products and services

Providing new values andimpressions in fields ranging frombrand fashion-related merchandise to hi-tech industrial fibers
and materials.

Fiber raw materials; industrial
materials; textile, apparel and fashion
goods; brand marketing, including
food and daily living-related products.

ICT & Machinery Company
CSR at this Division Company

Developing an international society andcreating an affluent lifestyle throughenvironment-friendly businesses
Business overview

Major products and services

Partnering with a host of Group
companies to develop wide-ranging
businesses and services to lead thenext generation in the fields of ICT
and machinery

Industrial plants; ships; automobiles;
construction; machinery; aircraft;electronic devices; IT, media andmobile businesses; medical
equipment and materials

Energy, Metals & Minerals Company

Trading

Business Investment

Corporate Planning &Administration Division

Domestic Offices
Overseas Offices

Wholesaling

CAO & CCO
Human Resources & General Affairs
Division
Corporate Communications Division
Legal Division

Retail/Service

CSR Promotion Through
CSR Action Plans
ITOCHU Corporation has five Division Companies involved in substantially different lines ofbusiness; therefore, sustainability issues thatarise vary markedly. To steadily promote CSR
through their business activities, each Division Company, and the administrative divisions that support them, takes the lead in
identifying important social issues to confrontand creating frontline-driven CSR actionplans. CSR is then advanced in line with
PDCA cycles. Refer to the following website
to view reports on the CSR activities andaction plans at each Division Company.

CSR at this Division Company

Promoting CSR through the development
and stable supply of resources and energy
Business overview

Major products and services

Contributing to global economic
progress and the protection of the
global environment through thedevelopment and stable supply of
resources and energy

Crude oil; petroleum products; LPG;
LNG; nuclear fuel; Dimethyl ether(DME); bio fuel; iron ore; coal;
aluminum; steel scrap; steel products

Chemicals, Forest Products & General Merchandise Company
CSR at this Division Company

Caring for the natural environment andensuring the safety of chemical substances
CFO• Investor Relations Department• Group Accounting Support & IFRS
OfficeFinancial Division
General Accounting Control Division
Global Risk Management Division

Business overview

Major products and services

Expanding in the two fields ofgeneral merchandise and chemicals
in search of a higher order ofcontact between affluence and theenvironment

Housing materials; logs and lumber;woodchips, pulp and paper; crude
rubber and tires; shoes; organic
chemicals; inorganic chemicals;
plastics; consumer-related products

IT Planning Division

CSR at this Division Company

Food Company
CIO

Chief Executive(Headquarters Business Organization)

Financial & Insurance Services
Department
Logistics Services Department
CSR at Headquarters
Business Organization

Responding to the needs of consumers
and society with environmental
consideration
Business overview

Major products and services

Engaged in food businesses in the value
chain that extends from food resource
development in Japan and overseas,production and processing, through tointermediate distribution and retailing

Grain; ingredients for animal feed;fats and oils; sugar; beverages; dairy;
agricultural, livestock, and marine
products; frozen and processed
foods; other food products

Providing services and solutions
with abundant creativity

Chief Executive (Construction & Realty Division)

Business overview

Major products and services

CSR at Construction & Realty Division

Providing services in thefields of finance, insurance
and logistics by going
beyond the frameworks ofa Division Company

Financial services and debt/
equity financing business;insurance brokerage andreinsurance business,
logistics solutions

Providing “secure,” “safe” and“highly functional” facilities

Executive Advisory Officer for
Kansai District Operation
http://www.itochu.co.jp/en/csr/activities/
actionplan/

Contributing to the realization of a healthy,
prosperous, and active society

Research & Business Development
Division

CSO
Manufacturing andProcessing

Board ofCorporate Auditors
Corporate
Auditors

Textile Company
CSR at this Division Company

HMC: Headquarters Management Committee
CSO: Chief Strategy Officer
CAO: Chief Administrative Officer
CCO: Chief Compliance Officer
CFO: Chief Financial Officer
CIO: Chief Information Officer

22

Business overview

Major products and services

Developing facilities and providing
creative services in the real-estate andconstruction business fields as a global
and general trading company

Real estate-related businesses; realestate solutions; private financeinitiative (PFI) projects; trade inconstruction facilities, machinery andmaterials* In April 2011, ITOCHU reorganized its former seven Division Companies
into five Division Companies; headquarters administrative divisions werealso reorganized by function from 16 divisions into 11.

CSR and Our Business

CSR at the Textile Company
CSR at this Division Company

Contributing to the realization of a healthy,
prosperous, and active society
The Textile Company places a top priority on further improving the safety of
its products and services as well as customer satisfaction in its CSR activities.
It also strives to promote environment-friendly businesses and expand its CSR
activities into our group companies.
Hitoshi Okamoto
President, Textile Company

CSR Action Plans

Key points of our FY2012 action plans
We will expand monitoring surveys of overseas manufacturing plants to group companies from this fiscal year, and wewill aim for further advancements in supply chain management through employee education. We will also continue topromote environment-friendly businesses.

*：Achieved：Nearly achieved：Unachieved

23

CSR and Our Business

Major CSR initiatives

Pre-Organic Cotton Program
We are promoting the rollout of products made of preorganic cotton material through collaboration with wellknown brands that support this program, as a crossdivisional project in the Textile Company. Particularelements of this project that have been well received byconsumers are, first of all, the traceability of the cotton
used, from harvest through until it reaches the hands ofthe consumer, and the consideration taken with regards
the associated environmental burden. Fiscal 2011 was thethird year of the program, with 300 tons of certified
organic cotton harvested out of this program.
Going forward, we will continue working to spread preorganic cotton, aiming for production that is kind to both

Cotton harvesting on one of our farms in India

the Earth’s environment as well as producers.

Fashion Earth PROJECT
An initiative was started in 2010 to procure CO2 emission
credits from a number of sources, including a UN-certified
wind power generation project in India, and sell blue hangtags with FEP-original CO2 emission rights to apparel
manufacturers. This project has led to the reduction of
about 4,000t of CO2 to date.
In 2011, the International Year of Forests, a green FEP
tag that supports forest preservation projects in Japan
based on Ministry of the Environment systems will be
developed with co-operation from the “more trees”
organization. This activity gives both apparel
manufacturers and consumers an opportunity tocontribute to environmental conservation by having
apparel makers attach FEP hang tags on their products,
Blue and green FEP hang tags

and having consumers purchase products with these tags.
By calling on wide-ranging participation by apparel
manufacturers, we aim to spread environmental
conservation initiatives to the across the industry as awhole, contributing to the prevention of global warming.

24

CSR and Our Business

CSR initiatives by major group Companies

Conserving Forests with Hunting World
Under a campaign bearing the slogan “Save the
Elephants,” Hunting World has been contributing 1% ofsales of charity goods to the Borneo Conservation Trust’s“Green Corridor Plan” from 2008.
This “Green Corridor Plan” will connect fragmented
sections of forest to re-establish continuous, natural
migratory pathways that wild animals can negotiate inorder to protect the rich ecosystem of forests, startingwith Bornean elephants.
These support funds have now enabled the purchase of
4.6 acres of private land that connects separated
protected areas.

Borneo bag by Hunting World

Going forward, Hunting World will continue to promote
initiatives for enabling our co-existence with nature.

25

CSR and Our Business

CSR at the ICT & Machinery Company
CSR at this Division Company

Developing an international society andcreating affluent lifestyles throughenvironment-friendly businesses
The ICT & Machinery company will endeavor to develop and promote
environment-friendly businesses and products which will reduce theenvironmental impact of our operations, and develop new businesses in awide range of fields to contribute to the prosperity of local communities andinternational society, as well as to the establishment of safe and affluent
lifestyles.

Toru Matsushima
President, ICT & Machinery Company

CSR Action Plans

Key points of our FY2012 action plans
In fiscal 2012, we will continue to actively engage in renewable energy business such as biomass, geothermal, andwind power, as well as water-related business such as desalination plants, while pursuing management objectives with
due regard for our obligations to the environment and society.
In addition to existing initiatives, we will aggressively promote new businesses such as green tech, smart grids, andsecondary batteries, providing products and services that contribute to a secure, safe, and affluent society at the sametime as protecting the environment.

26

CSR and Our Business*：Achieved：Nearly achieved：Unachieved

27

CSR and Our Business

Major CSR initiatives

Participation in the rehabilitation of a desalination plant in Saudi Arabia
In April 2011, ITOCHU won an order to rehabilitate the
Shoaiba Phase 1 Seawater Desalination Plant from Saline
Water Conversion Corporation (“SWCC”) of the Kingdomof Saudi Arabia through the Arabian Company and
Sasakura for Water & Power, a joint venture with local
capital in the country. The plant to be rehabilitated is amulti-stage flash (MSF) desalination plant constructed in
1988. It is possible for normal plant life (20-25 years) to
be extended by another 15 years or more by replacing
heat exchanger tubes and other corroded components
and modifying the venting system in the evaporator. In
Saudi Arabia, where a large majority of water demand forhousehold use is met through desalination plants, watersupply is tightening due to rapid population growth and

SWCC seawater desalination plant in Shoaiba, Saudi
Arabiaindustrialization. ITOCHU will aim to boost orders forrehabilitation as well as to win orders for new plant
construction, contributing to the stable supply of water
through this business.

Alliance with major US electric utility in lithium-ion battery businessAn agreement was signed with major US electric powercompany Duke Energy in November 2010 regarding an
alliance in the smart grid (next-generation electricity
transmission network) and renewable energy fields. As afirst step, evaluation and testing will be carried out for the
re-use of lithium ion batteries (“LiB”) that have been used
for a certain period of time for household and industrialuse. Evaluation will use automotive lithium-ion batteries
produced by US battery system manufacturer Ener1, Inc.,an Indiana-based company in which ITOCHU owns astake, for a range of applications and analyze battery
management and the potential impact on the existing
power grid. The initial objective is to develop, with Duke
Energy, a product ready for commercialization.

A conceptual diagram for LiB second-life applications

28

CSR and Our Business

CSR at the Energy, Metals & Minerals Company
CSR at this Division Company

Promoting CSR through the development andstable supply of resources and energy
We promote CSR with the entire ITOCHU Group, while pursuing the following
missions: 1) development and stable supply of resources and energy; 2)development of new energy that are kind to the earth; and 3) initiatives forrecycling-related businesses.
Ichiro Nakamura
President, Energy, Metals & Minerals
Company

CSR Action Plans

Key points of our FY2012 action plans
As a global company, we will promote environmental management and businesses that are environmentally friendly
both domestically and at overseas Group companies. We will also continue to promote CSR education and training.

29

CSR and Our Business*：Achieved：Nearly achieved：Unachieved

Major CSR initiatives

Integrated Recycling Business at Dalian Changxing Island, China
The Energy, Metals & Minerals Company, together with amajor Japanese recycling company and Chinese partners,
established an integrated recycling business for steel,
nonferrous scrap, consumer electronics, home appliancesand plastics, Dalian New Green Recycle & Resources
Corporation, at Dalian Changxing Island Harbor Industrial
Zone in China, with a groundbreaking ceremony held on
24 December 2010.
Going forward, Dalian New Green, as the only recycling
facility licensed by the Chinese Government at Dalian
Changxing Island Harbor Industrial Zone, is planning toinstall cutting-edge equipment and sophisticatedJapanese environmental technology to further improve
Rendering of the completed facility

operations. The aim is to start operations in January 2012and set this facility apart as a model for all integrated
recycling centers built in China in the future.

Partnership with Abengoa Solar of Spain in solar power generation businessIn December 2010, a partnership was formed with amajor Spanish solar power generator, Abengoa Solar, todevelop solar power projects in Asian and European
countries. An agreement was also reached to jointly
construct two 50 megawatt concentrating solar power
plants in Extremadura in western Spain and carry out
power generation business. ITOCHU will take a 30%
stake. Commercial operation is scheduled to start in2012, with power generated at these plants sold to thegrid based on the Spanish feed-in tariff system (*) .
Taking advantage of abundant sunlight in Extremadura,
the two plants will produce enough energy to meet the

Similar solar power plant also operated by Abengoa(image courtesy of Abengoa)

electricity needs of about 52,000 households and achieve
emissions reductions totaling approximately 63,000 tonsof CO2 per year.
*

Feed-in tariff system: A system for purchasing electricity
at preferential rates designed to promote the use ofrenewable energy sources

30

CSR and Our Business

Establishment of SolarNet Holdings, largest solar distribution company in US
The solar power distribution business has been expanding
significantly in recent years due to heightened
environmental awareness and government support
measures. ITOCHU has been developing its solar businessin the US, one of the three major solar markets in theworld along with Europe and Japan, acquiring system
integrators (*) Solar Depot in June 2007 and SolarNet in
April 2009. These two companies were integrated in
February 2011 to further bolster the business, creating
SolarNet Holdings, the world’s largest solar distribution
company for mainly household and industrial use. Goingforward, synergistic effects from integration will betargeted through unification of sales networks andExample of past SolarNet projects: Beringer Vineyards,
California

reducing costs.
*

System integrator: Operator that handles design, sales,
and construction of solar power generation systems thatcombine solar cell modules and peripheral equipment

31

CSR and Our Business

CSR at the Chemicals, Forest Products & General Merchandise
Company
CSR at this Division Company

Caring for the Natural Environment andEnsuring the Safety of Chemical Substances
We constantly strive to improve the quality and safety of our products in a
broad scope of business areas, and ensure a smooth and stable supply of
products and services that precisely respond to the needs of our customers.
We do this while giving maximum consideration to the environment, thus
contributing to everyone's quality of life.

Satoshi Kikuchi
President, Chemicals, Forest Products &General Merchandise Company

CSR Action Plans

Key points of our FY2012 action plans
We will promote increased business in internationally certified forest products and low-formaldehyde products as wellas lithium-ion batteries as an environment-friendly business. We will also work as a Group to bolster supply chain
management through efforts to secure traceability for suppliers and strengthen education and training in chemical
product-related laws and safety.

*：Achieved：Nearly achieved：Unachieved

32

CSR and Our Business

Examples of Key Initiatives

Initiatives in Lithium-ion Battery-related Business
The Chemicals Division is focusing on lithium-ion
batteries, where demand is expected to grow for use inelectric vehicles and hybrid vehicles, with businessadvances made to date in the area of component andmaterials production.
As a step in securing lithium resources, ITOCHU
Corporation invested in U.S.-based resource development
company Simbol Materials in fiscal 2011. Simbol isdeveloping and promoting operations whereby lithiumcompounds are produced by extracting lithium from used
geothermal brine at geothermal power plants in southern
California. Simbol’s manufacturing technology is being
further developed and refined ahead of commercial
production.
Geothermal brine well in southern California

Using the unique advantages found in geothermal brine,
such as the carbonated gas and heat it contains, not only
enables competitive production of lithium compounds but
also enables an environmentally friendly business with areduced carbon footprint.

CSR Initiatives by Major Group Companies

Promoting Protection of Water Resources and Resource Recycling
ITC Green & Water Corp.
ITC Green & Water Corp. has been working for some 30
years to develop and improve technologies for cleaningorganic effluent such as livestock wastewater. The
company has leveraged its expertise in wastewater
treatment to create a new business with a system for
improving substratum and water quality in dam reservoirs
and ports that have become polluted due to oxygen
depletion. The company also operates an environmental
solutions business that contributes to resource recycling
with its integrated treatment system, from wastewater
treatment to making effective use of sludge. One example
is an initiative to compact organic sludge, which had
conventionally been treated as waste, and compost or

Compound lagoon for livestock

convert it into fuel.

33

CSR and Our Business

CSR at the Food Company
CSR at this Division Company

Responding to the needs of consumers andsociety with environmental consideration
We aim to conduct good businesses that can contribute to society by ensuring
a stable supply of safe products, checking multiple aspects of food safety, andpaying attention to preserving the environment. In this manner, we strive toearn the trust of our customers and local communities.
Yoshihisa Aoki
President, Food Company

CSR Action Plans

Key points of our FY2012 action plans
We will continue advancing initiatives that meet a variety of societal needs, such as promotion of a procurementbusiness to secure stable food resources, monitoring food safety through creation of inspection systems/supply chain
management/internal audits, and promotion of prepared food recycling for environmental protection/waste productreduction.

*：Achieved：Nearly achieved：Unachieved

34

CSR and Our Business

Examples of Key Initiatives

Food safety management support for Chinese business partner
The Food Company places the Chinese market at thecenter of its strategy, with its largest initiative in China
being the creation of a business partnership with the Ting
Hsin Group, the leading food/distribution group in China.
As a result of China’s high growth, demands for foodsafety are increasing rapidly, and providing Japan’s
advanced food safety management knowhow can be amajor differentiating factor. Therefore, we visited 13
major manufacturing plants/restaurants in China andTaiwan from 2010, and have been making wide-ranging
recommendations and proposals for improving on-site
hygienic/operational processes and management methods
with the cooperation of Universal Food Co., Ltd. Executive
Officer Toshio Watanabe (currently seconded to Nippon
Inspection of a Ting Hsin Group restaurant

Access Inc.), an expert on food safety management
within the ITOCHU Group and a holder of the ISO
inspector qualification. This initiative is also contributing
greatly to building good relations with the Ting HsinGroup.

Promotion of food resource procurement focused on stable supply and assured safety
Populations and income levels are rising sharply aroundthe world, including in Asian countries, and global
demand for grains is expected to increase in the future.
Meanwhile, consumers are increasingly aware of foodsafety, with rising demands for assuring safety andestablishing traceability. The Food Company will create a
global distribution network connecting the supply anddemand sides of this business and promote food resource
procurement, while focusing on the stable supply ofgrains and assuring safety. One such initiative isconstruction of a new grain export terminal in Longview,
Washington (U.S.A.), mainly for exports to Asia.
Operations are scheduled to start in 2011.
Grain export terminal (as of May 2011)35

CSR and Our Business

CSR at the Construction & Realty Division
CSR at the Construction & Realty Division

Providing “secure,” “safe,” and “highly
functional” facilities
We will provide secure and safe facilities and services offering a high degreeof customer satisfaction. We will develop facilities, centered on highly
functional homes with environmental awareness, and provide “secure,” “safe,”and “highly functional” facilities and services not only in Japan but overseas aswell based on the concept of Socially Responsible Property Investment (SRPI)
as a general trading company.

Kenji Okada
Chief Executive for Construction & Realty

CSR Action Plans

Key points of our FY2012 action plans
We will provide facilities and services focused on security, safety, and consideration for the environment, in line withrules and monitoring systems established internally, and also bolster protection of private information.

*：Achieved：Nearly achieved：Unachieved

36

CSR and Our Business

Examples of Key Initiatives

Development of energy-saving residences that utilize solar power and other technologies
There is a great deal of interest at present around theconcept of ecology. Accordingly, we are promoting the“eco-condominium of the future” in our Crevia brand of
ITOCHU Group condominiums, contemplating a more
fulfilling future for people, homes, and the environment
regarding ecology encapsulated by the slogan, “Make
Original Tomorrow.” By including various energy-saving
technologies in overall plans and exclusive spaces, we
aim to contribute to society and the environment while
also allowing residents to actually feel the benefits in their
daily lives. At the Crevia Futakotamagawa condominium(Setagaya Ward, Tokyo), solar panels and storage
batteries are combined to store electricity generated fromsolar power and used to light common spaces at night(LED lighting), with the goal of electrical self-sufficiency.

Overview diagram of the electricity storage system at theCrevia Futakotamagawa condominium

Karawang Industrial Park aims for harmony with Indonesian society
Karawang Industrial Park (KIIC, development area 1,140ha=equivalent to the area of Chiyoda Ward, Tokyo), which
ITOCHU has invested in and operated from 1992, is an industrial park that provides “an environment for focusing on
main businesses with a sense of security” for tenant companies.
It is the only Indonesian industrial park to have acquired both ISO 9001 and 14001 certifications, and CSR activities
are conducted jointly with tenant companies with an aim of co-existence and co-prosperity with neighboring
communities.
In addition to direct support such as supplying baby food to infants and providing scholarships to junior and seniorhigh school students, an agricultural park has been established within the industrial park with the cooperation of Bogor
Agricultural University, with programs conducted to instruct local farmers in the cultivation of high-value-added
vegetables and catfish farming, as well as environmental improvement. We are also providing support for local
healthcare facilities and small businesses.

37

CSR and Our Business

Excited schoolchildren with donated notebooks, baby food distribution, the agricultural park project, activities topreserve endangered tree species, health checks for children

38

CSR and Our Business

CSR at the Headquarters Business Organization
CSR at the Headquarters Business Organization

Providing services and solutions with
abundant creativity
We will contribute to the realization of an affluent and sustainable society both
domestically and overseas through the provision of services and solutions in
the fields of finance, insurance and logistics.

Kenji Okada
Chief Executive for Construction &Realty; Chief Executive for Financial &Insurance Services, Logistics Services

CSR Action Plans

Key points of our FY2012 action plans
We will work to generate financial business in environmental and new energy fields, consumer-related fields, promote
insurance coverage for large projects, build and expand distribution networks and strengthen supply chain
management, mainly in China and the rest of Asia.

39

CSR and Our Business*：Achieved：Nearly achieved：Unachieved

Major CSR initiatives

Contributions to local communities in overseas distribution business
The Logistics Services Department conducts logistics operations throughout Asia. In China, where we have a networkof around 90 locations that cover the entire nation, our operations are led mainly by Itochu Logistics (China) Co., Ltd.
and Ting Tong Logistics Co., Ltd., in what is the leading Japanese distribution network. By utilizing this network, wehave extended our reach into the country’s interior and are able to deliver consumer goods to all corners of China. In
this way and others, we are expanding business opportunities for ITOCHU Corporation itself as well as customers andcontributing to local communities from the standpoint of distribution. We have also begun expanding distribution
networks in India and Indonesia.

Itochu Group China Logistics Network

40

CSR and Our Business

CSR initiatives by major group companies

Introducing E-Statements for Credit Cards
Orient Corporation (Orico)
Orico is providing a new Web service called “e-Orico
Service” whereby users can access their card information,such as charged amounts and use history online. As aresult, Orico is able to suspend the mailing of accountstatements and new usage guides issued each time whencash advances are used. Resources and energy will besaved by digitizing paper statements that had hitherto
been mailed and putting them on the Web. Also, the riskof personal information leaks is alleviated. Transfer
details can be notified quickly by e-mail, and since
documents are in digital format, data can be saved on
PCs, making it easier for users to organize their finances.

41

Corporate Governance and Internal Control/
ComplianceCorporate Governance

ITOCHU operates its business in accordance with the ITOCHU Group Corporate Philosophy and Code of Conduct. Our
fundamental policy is to work toward the long-term preservation and enhancement of our corporate value by building
positive and effective relationships with our stakeholders. To execute our business activities in a fair and efficientmanner in accordance with our fundamental policy, we are increasing the transparency of our decision-making process
and constructing a corporate governance system that incorporates appropriate monitoring and supervisory functions.

Features of ITOCHU’s Corporate Governance System

ITOCHU is a company with the Board of Directors and corporate auditors (the Board of Corporate Auditors). The
corporate auditors including outside corporate auditors monitor and audit business management independently andobjectively. And ITOCHU elected outside directors at the General Meeting of Shareholders held in June, 2011, for the
purpose of further increasing the effectiveness of the supervision of management by the Board of Directors andimproving the transparency of decision making.
Comprising 14 directors (including 2 outside directors) as of June 24, 2011, the Board of Directors makes decisions onimportant management matters and supervises each director's business management.
ITOCHU has adopted an Executive Officer System in order to separate the decision-making and supervisory functionsof the Board of Directors from its implementation of business management.
One feature of ITOCHU's corporate governance system is the HMC (Headquarters Management Committee), a
supporting body of the CEO, where company-wide management policy and important issues are discussed anddecided.
In addition, management issues in individual areas of responsibility are discussed and screened by various internal
committees in order to support the decision making of the CEO and the Board of Directors. Moreover, ITOCHU isdeveloping and implementing a system for incorporating third-party opinions in which outside experts become
members of some internal committees.
The table below details steps ITOCHU has taken to strengthen corporate governance.

42

Corporate Governance and Internal Control / Compliance

Steps Taken to Strengthen Corporate Governance
1997

1999

Introduced the Division Company

To accelerate decision making / increase efficiency of

Systembusiness management

Introduced Executive Officer System

To strengthen decision-making and supervisory functions of
the Board of Directors

2007

Shortened the terms of office of

To clarify management responsibility during terms of officedirectors and executive officers to
one year
2011

Introduced an Outside Directors

To increase the effectiveness of the supervision of

Systemmanagement and improve the transparency of decision
makingIncreasing the Effectiveness of the Supervision of Management by the Board of Directors(Introduced an Outside Directors System)
ITOCHU has elected 2 outside directors at the General Meeting of Shareholders held in June, 2011. The outside
directors are believed to further increase the effectiveness of the supervision of management by the Board of Directors
and improve the transparency of the Board of Directors' decision making by providing their monitoring and supervising
functions to the internal directors and management advice based on various perspectives from their neutral andobjective position.

Relationship of Outside Directors with ITOCHU
Name
Yuko Kawamoto *1

Reason for Appointment
ITOCHU has elected her, anticipating that she will use her wealth of knowledge on
corporate management nurtured through her long expertise as a management
consultant and a professor of a university's graduate school and supervise thecorporate management of ITOCHU from an independent perspective. And she has nomaterial interests in ITOCHU.

Kazuyuki Sugimoto *1

ITOCHU has elected him, anticipating that he will use his insight on public financeand financing nurtured through his many years of experience at the Ministry of
Finance and supervise the corporate management of ITOCHU from an independent
perspective. And he has no material interests in ITOCHU.

*1

Yuko Kawamoto and Kazuyuki Sugimoto are independent directors as prescribed by domestic financial instrument
exchanges, such as the Tokyo Stock Exchange.

Systems to Ensure Effectiveness of Supervisory Functions

ITOCHU appoints five corporate auditors, of whom three are outside corporate auditors. Standing corporate auditors
strengthen audit functions by regularly attending meetings of the Board of Directors and other in-house meetings andworking in cooperation with ITOCHU's independent external auditors and other audit bodies inside and outside
ITOCHU. ITOCHU's Audit Division is responsible for internal audits. Aiming to facilitate exchanges of information andclose collaboration, members of this division meet regularly with corporate auditors to discuss such matters as internal
audit planning. In addition, the Corporate Auditors' Office, reporting directly to the Board of Corporate Auditors,
supports corporate auditors.

43

Corporate Governance and Internal Control / Compliance

Relationship of Outside Corporate Auditors with ITOCHU
Name
Ryozo Hayashi *1

Reason for Appointment
ITOCHU has elected him, anticipating that he will provide auditing from an
independent perspective by utilizing his wealth of experience at the Ministry of
Economy, Trade and Industry and the former Ministry of International Trade andIndustry, and his long-term perspective and broad vision as a professor of auniversity's graduate school. And he has no material interests in ITOCHU.

Keiji Torii *1

ITOCHU has elected him, anticipating that he will provide auditing from an
independent perspective by utilizing his many years of experience and insight as aformer executive of a major financial institution. Before being appointed as a
Corporate Auditor of ITOCHU, he had served as an executive of a major financial
institution, with which ITOCHU has dealings, but he retired from his position at thefinancial institution before being appointed as a Corporate Auditor of ITOCHU and hehas no material interests in ITOCHU at present.

Masahiro Shimojo *1

ITOCHU has elected him, anticipating that he will provide auditing from an
independent perspective by utilizing his wealth of experience and expertise as alawyer in the field of corporate legal practice and international business law. And hehas no material interests in ITOCHU.

*1

Ryozo Hayashi, Keiji Torii and Masahiro Shimojo are independent auditors of ITOCHU as prescribed by domestic financial
instrument exchanges, such as the Tokyo Stock Exchange.

Comments from Corporate Auditor

My major activities at the Ministry of Economy, Trade and Industry as well as at the
University of Tokyo were focused on corporate governance and corporate social
responsibility. Based on my experiences, I intend to contribute to the enhancement ofmanagement performance by introducing an outside perspective and by focusing on
enhancing the corporate governance system.
The current business environment surrounding major global companies, such as
ITOCHU, is unprecedentedly difficult. The opportunities and risks that such companies
face change swiftly and drastically. In such a business environment, management is
Ryozo Hayashi
Corporate Auditor

required to show both strong leadership to pursue the business opportunities and an
effective corporate governance system that limits risks. In particular, ITOCHU, as one of
the largest trading companies engaged in diversified businesses around the world, has
not only to perform a wide range of operations skillfully but also to maintain a balance
between the realization of short-term business performance and the maintenance ofsustainable long-term value creation. As a corporate auditor, I will monitor management
performance and advise management with a view to developing a strong and wellbalanced management system, which is an imperative to coping with these challenges.
In developing such a system, I will keep reminding myself of the interests of ITOCHU
shareholders as well as the interests of a wide range of other stakeholders.

44Corporate Governance and Internal Control / Compliance

ITOCHU's Current Corporate Governance System*1*2

Each Division Company has a Division Company President.
Internal control systems and mechanisms have been implemented at every level of ITOCHU. Only the main internal control
organization and committees are described herein.
Further, the Internal Control Committee receives reports from internal departments related to internal control on thedevelopment and operation of respective internal controls for which they are responsible; evaluates and confirms the overall
development status of internal control; and reports items for improvement to the HMC and Board of Directors.

45

Corporate Governance and Internal Control / Compliance

Principal Internal Committees
Name
Internal Control Committee

Objectives
Deliberates on issues related to the development of internal control
systems

Disclosure Committee

Deliberates on issues related to business activity disclosure and on issues
related to the development and operation of internal control systems in
the area of financial reporting

ALM Committee

Deliberates on issues related to risk management systems and balance
sheet management

Corporate Officer

Deliberates on issues related to the compensation of corporate officers,

Compensation Consultative

including their compensation after retirement

Committee
Compliance Committee

Deliberates on issues related to compliance

CSR Committee

Deliberates on issues related to corporate social responsibility,
environmental problems, and social contribution initiatives

46

Corporate Governance and Internal Control / ComplianceInternal Control System
On April 19, 2006, ITOCHU’s Board of Directors established the Basic Policy regarding the Internal Control System andmade a commitment to continuously improve internal control systems.
The following highlights some noteworthy initiatives under the Basic Policy regarding the Internal Control System.

Initiatives to Further Enhance the Reliability of Financial Reporting

In order to further enhance the reliability of our consolidated financial reporting, Chief Operating Officers, etc. areappointed as Chief Responsible for Internal Control to establish a Group-wide line of responsibility. And the Disclosure
Committee is designated as a steering committee to maintain and improve the internal control system to comply with
the internal control reporting system.
Furthermore, a new organization called the Internal Control Promotion Department promoting a risk-base approachhas been created in parallel with the existing Internal Control Testing Department within the Internal Audit Division, inorder to increase the effectiveness and the efficiency of the internal control system.
Results of the independent assessment conducted by the Internal Control Testing Department are submitted to eachrelated unit and are used to establish and maintain the adequate internal control system. This Plan-Do-Check-Act cycle
enables ITOCHU to improve the internal control system.

Strengthening Risk Management

ITOCHU has established internal committees and responsible departments in order to address the various risks
associated with its business operations, such as market risk, credit risk, country risk, and investment risk. At the sametime, ITOCHU has developed the risk management systems and methods to manage company-wide and specific risks.
Those include a range of management regulations, investment criteria, risk exposure limits, and transaction limits, aswell as reporting and monitoring systems. Moreover, ITOCHU regularly reviews the effectiveness of its risk
management systems. As part of such efforts, the ALM Committee protects the ITOCHU Group’s assets throughdeliberations on balance sheet management as well as analysis and management of risk.

Organizations to Secure the Appropriateness of Financial Reporting (PDCA Cycle)

47

Corporate Governance and Internal Control / Compliance

Basic Policy Regarding the Internal Control System
The Company has established the following internal control systems, which are necessary to ensure that executive
officers' implementation of duties are in compliance with laws and statutory regulations and articles of incorporationand ensure the appropriateness of other operations. Below is a summary of the Basic Policy regarding the Internal
Control System, which the Board of Directors approved on April 19, 2006.(It has been partially revised on May 6,
2011.)
Notes

1. System to Ensure Compliance by Directors and Employees to Laws, Regulations and the
Articles of Incorporation(1) Corporate Governance(1) As the decision-making body, the Board of Directors which comprises of Directors and Outside Directors is todecide important matters in accordance with laws and regulations, the Articles of Incorporation, the “Board of
Directors Regulations,” and other internal regulations, and as the supervisory body, the Board of Directors is tosupervise the performance of the directors.
(2) Each director is to carry out such director’s functions and duties as designated by the Board of Directors inaccordance with laws and regulations, the Articles of Incorporation, resolutions by the Board of Directors, andinternal regulations.
(3) ITOCHU is to adopt the Executive Officer System to strengthen the decision-making function and supervisory
function of the Board of Directors, and to streamline executive decision-making.
Based on the approval of the Board of Directors, executive officers implement their designated duties based ondelegation from the Board of Directors and representative directors.
(4) The corporate auditors are to oversee the performance of the directors based on the “Board of Corporate Auditors
Regulations” and “Auditors’ Auditing Standards.”(2) Compliance(1) Directors, executive officers and employees are to conduct themselves in accordance with the ITOCHU Group
Corporate Philosophy and Code of Conduct.
(2) ITOCHU is to establish a department that oversees all compliance matters, including all matters relating to the CCO(Chief Compliance Officer) and the Compliance Committee. In addition, the “ITOCHU Group Compliance Program”
is to be created to further enhance our compliance system.

(3) Internal Control to Ensure Reliability of Financial Reporting(1) ITOCHU is to have in place internal regulations concerning commercial transactions management and accounting,and is to create the position of CFO (Chief Financial Officer) to ensure the reliability of financial reporting.
(2) ITOCHU is to establish the Disclosure Committee and regularly review and improve the internal control systems toensure the reliability of financial reporting.

(4) Internal Audits
ITOCHU is to establish the Audit Division under the direct control of the President. The Audit Division is to regularly
implement internal audits of all aspects of business operations based on the “Audit Regulations.” Such internal audits
are to examine compliance with laws and regulations, the Articles of Incorporation, and internal regulations, as well as,
among other matters, the appropriateness of the procedures and nature of the exercise of duties and responsibilities.

48

Corporate Governance and Internal Control / Compliance

2. System for the Storage and Preservation of Information Related to Director Duties

The directors are to appropriately store and preserve important documents and related materials concerning theperformance of their duties, including the minutes of the General Meeting of Stockholders, in accordance with the“Information Management Regulations,” the “Document Management Rules” and other internal regulations. All
documents and information so stored and preserved are to be subject to inspection by the directors and auditors at
any time. Further, the Company will establish departments responsible for the timely disclosure of important corporate
information and other information. At the same time, directors will rapidly and comprehensively gather informationthat requires disclosure and implement timely and appropriate disclosure in compliance with laws and statutory
regulations.

3. Regulations Concerning the Management of the Risk of Loss and Other Relevant Risk
Management System
To adequately address the various risks associated with our business operations, such as market risk, credit risk,
country risk, and investment risk, ITOCHU is to establish internal committees and responsible departments, and is todevelop the necessary risk management system and risk management techniques, for example establishing a fullrange of management regulations, investment criteria, risk limits and transaction limits, and developing reporting andmonitoring systems, and managing company-wide as well as matter-specific risks . Furthermore, ITOCHU is toregularly review the effectiveness of the risk management system.

4. System to Ensure Efficient Performance of Directors(1) The HMC and Other Internal Committees
The HMC (Headquarters Management Committee) as a supporting body to the president, and a number of otherinternal committees, are to facilitate the proper and agile decision-making by the president and the Board of Directors.

(2) Division Company System
Under the Division Company System, the position of Company president is to be created at each Company, and each
Company is to manage its business autonomously in accordance with laws and regulations, the Articles ofIncorporation, and internal regulations. Furthermore, each Company is to establish its own numerical targets, andregularly evaluate its performance by comparing against such numerical targets.

(3) Clearly Define the Scope of Authority and Responsibilities
In order to ensure the appropriateness and efficiency of the performance of the management, ITOCHU is to developinternal regulations to clearly define the scope of authority and responsibilities of each corporate officer and divisional
manager.

5. System to Ensure the Adequacy of Operations of the ITOCHU Group (Consisting of
ITOCHU Corporation and Its Subsidiaries)(1) Subsidiary Management System
ITOCHU is to establish a department that oversees all the subsidiaries. Furthermore, relevant departments within
ITOCHU Corporation are to exercise jurisdiction over their responsible subsidiaries, and provide managerial guidance tosuch subsidiaries in accordance with the internal regulations concerning consolidated company management. In
principle, ITOCHU Corporation is to send directors and auditors to each subsidiary to ensure the adequacy of thesubsidiary’s operations.

49Corporate Governance and Internal Control / Compliance(2) Compliance
ITOCHU Corporation is to provide guidance to its subsidiaries for the purpose of implementing a compliance system at
each subsidiary in accordance with the ”ITOCHU Group Compliance Program,” and is to implement full compliance inthe entire ITOCHU Group through education and training.

(3) Internal Audits
All of the operations and activities of the subsidiaries are to be subject to internal audits by the Audit Division.

6. Matters Concerning Supporting Personnel to Auditors and Independence of Such
Personnel from the Directors
ITOCHU is to establish the Corporate Auditors' Office under the direct jurisdiction of the Board of Corporate Auditors
and is to put in place full-time employees with the sole responsibility of supporting the work of the corporate auditors.
The supervisory authority over such employees is to belong exclusively to the corporate auditors, and evaluation ofsuch employees is to be carried out by the corporate auditor designated by the Board of Corporate Auditors. Anytransfer orders or disciplinary actions relating to such employees are to require prior approval by such corporate
auditor.

7. System for Reporting by Directors and Employees to Corporate Auditors(1) Attendance at Important Meetings
The corporate auditors are to attend meetings of the Board of Directors, the HMC meetings, and other important
meetings, and interview the directors and other relevant persons regarding the performance of their duties. In
addition, the corporate auditors are to have the right to inspect all relevant materials.

(2) Reporting System(1) The directors and corporate officers are to regularly report to the corporate auditors about their performance.
Furthermore, in addition to the matters required by laws and regulations, the directors and corporate officers anddivisional managers are to report all the decisions that could have a major impact on the finance or business of
ITOCHU to the corporate auditors immediately after such decisions are made.
(2) Employees are to have the right to report directly to the corporate auditors any matters that could cause serious
damage to ITOCHU.

8. Other Relevant Systems to Ensure the Proper Functioning of Audits(1) Coordination with the Auditors in the Audit Division
The Audit Division is to maintain close communication and coordination with the corporate auditors with respect tomatters such as formulation of the internal audit plan for each business year, and internal audit results.

(2) Retaining External Experts
When deemed necessary, the corporate auditors are to independently retain external experts for the implementation of
an audit.
*

ITOCHU intends to revise and improve these internal control systems tirelessly in order to build systems that are even more
appropriate and efficient. Further, a meeting of the Board of Directors convened on May 6, 2011, evaluated thedevelopments and operations of items pursuant to the basic policy in fiscal 2011 and confirmed that there were no
significant deficiencies or defects.

50Corporate Governance and Internal Control / Compliance

ComplianceGroup Promotion Structure

The ITOCHU Group has compliance officers in each organization within Headquarters and at all Group companies
worldwide. These compliance officers are strengthening compliance by creating systems, conducting education andtraining, responding to individual cases, and any other necessary measures based on directives and support from theirrespective Division Companies, as well as consideration of local laws, business characteristics, and operational formats.
In addition, we conduct simultaneous companywide Monitor & Review surveys every six months. While checking the
progress in implementing compliance measures at all ITOCHU Group companies through these surveys and otheropportunities, the ITOCHU Group is making a concerted effort to find improvements that will enhance its welldeveloped systems for advancing compliance.

Compliance Structure

Major Compliance Measures in Fiscal 2011 and Tasks for the Future

During fiscal 2011, we compiled and distributed to all employees a ComplianceHandbook summarizing rules that each employee is expected to strictly
observe. In conjunction, we conducted a test to confirm understanding ofhandbook contents via an e-learning module.
Additionally, overseas and Group companies received visits and subsequentguidance designed to assess actual frontline conditions and identify risk, as we
pursue activities that emphasize compliance system operations. Furthermore,
we formulated and moved to steadily implement distinctive measures toenhance compliance at each Division Company,based on existing incident
trends, Monitor & Review results, and other data. Along with further
promotion of these measures, we will continue striving to strengthen
compliance with an emphasis on overseas and Group companies.

51

Corporate Governance and Internal Control / Compliance

Bolstering Measures to Fight Corruption

Over the years, ITOCHU has sought to fight corruption by drafting regulations that specifically ban bribes and payoffs,
along with related guidelines, with the aim of supporting the broad prohibition of payoffs to public officials and othersin comparable positions worldwide.
Anticipating more stringent regulations against bribery and corruption worldwide,including enforcement of a majoranti-corruption law in the UK on July 1, 2011,ITOCHU in June revised its own aforementioned regulations andguidelines as a measure to enhance its own responsiveness in this area.
Going forward, we will work to circulate information regarding the aforementioned revisions within ITOCHU and tooverseas blocs. At the same time, steps will be taken to conduct risk assessment and monitoring with respect topayoffs, bribery and similar impropriety.

Global Security Risk Management

To prevent the proliferation of weapons of mass destruction and conventional weapons, Japan maintains strict tradesecurity under the Foreign Exchange and Foreign Trade Act. To observe such laws and regulations, we have
implemented our own internal trade-security control program. Further, to ensure that we do not take part in business
transactions that threaten international peace and security, not only do we meticulously comply with existing
government laws and regulations, but we are voluntarily taking extra measures to ensure that our stakeholders andcorporate reputation are adequately safeguarded through our implementation of a comprehensive global security risk
management program.
The potential intersection of corporate operations with global terrorism or the development and proliferation of
weapons of mass destruction can give rise to reputational and financial risks for ITOCHU and other companies withextensive international business operations.
Accordingly ITOCHU recognizes that, as a responsible member of society and the global business community, we needto manage carefully the potential risks associated with business operations in certain locations. In response to thegrowing field of corporate governance termed global security risk, ITOCHU has developed and implemented corporate
policies, procedures, and internal reporting structures to ensure that we perform rigorous, security-minded due
diligence with respect to projects and transactions in which security issues are implicated.

52

CSR in Our Supply Chain

ITOCHU Corporation's CSR Action Guidelines for Supply Chains

Basic stance on supply chain management

Developing business all over the world, ITOCHU Corporation has positioned supply chain management as an important
issue to be addressed. Preventing human rights, labor and environmental problems, and working for improvement
together with the supplier. We are striving to practice these actions steadily and incorporated them into our basic
policies for CSR promotion as “3.Strengthening supply chain management (Respect for human rights and consideration
for the environment).”
As part of our efforts to promote supply chain management, we established action guidelines in April 2009 in order tohave this philosophy penetrate the entire company and to clearly communicate ITOCHU's stance to suppliers. It is ourintention to present these action guidelines to our suppliers, to deepen the dialogue on human rights, labor andenvironmental conservation, and to ask our suppliers to understand and practice ITOCHU's stance.

ITOCHU Corporation's CSR Action Guidelines for Supply ChainsTo fulfill the ITOCHU Mission, “Committed to the global good,” ITOCHU promotes CSR through its businessactivities, with the aim of achieving a sustainable society.
Due to the characteristics of its business activities, ITOCHU has to keep working to manage its supply chains in
consideration to the social or environmental impact of a variety of products and services handled.
ITOCHU has established the CSR Action Guidelines for Supply Chains to explain its position to suppliers, andexpects and encourages their understanding and implementation of every item mentioned below.
1. Suppliers shall respect the human rights of employees, and never treat employees in an inhumane manner.
2. Suppliers shall prevent forced labor or child labor.
3. Suppliers shall not practice discrimination in hiring and employment.
4. Suppliers shall prevent unfair low-wage labor.
5. Suppliers shall respect the rights of employees to organize, for smooth negotiation between labor andmanagement.
6. Suppliers shall strive to provide employees with a safe and healthy work environment.

53

CSR in Our Supply Chain

7. In the course of their business activities, suppliers shall duly consider the need to conserve ecosystems aswell as local and global environments, and strive to prevent the occurrence of any environmental pollution.
8. Suppliers shall observe all related laws and international rules, and ensure fair transactions and prevent
corruption.
9. Suppliers shall disclose information regarding the above items in a timely and appropriate manner.

54

CSR in Our Supply Chain

CSR Survey of Supply Chains

CSR Survey of Supply Chains

ITOCHU develops various businesses around the world. In order to check the status of our various suppliers, we
conduct survey with a method suited to the characteristics of the goods of each Division Company, along withmandatory questions on the nine items in our “CSR Action Guidelines for Supply Chains.”
In addition to the nine items covering human rights, labor, and environmental issues, we added further items specificto each Division Company. For example, we added check items for forest conservation for the Forest Products &General Merchandise Division (lumber, pulp & paper); product safety items for the Food Company; and items onprotection of intellectual property for our Textile Company. Each Division Company selects target suppliers and createsa survey plan based on such parameters as high-risk countries, products handled, and transaction amounts byreferring to the criteria of the FTSE4Good Index. Sales representatives or locally assigned ITOCHU employees of each
Division Company visit the suppliers, and survey them by means of interviews or questionnaires.
In April 2009, ITOCHU established ITOCHU Corporation’s CSR Action Guidelines for Supply Chains to clearlycommunicate its stance to suppliers. ITOCHU is promoting dialogue on human rights, labor and environmental
protection, as it seeks understanding and implementation of these action guidelines.
Moving forward, in addition to conducting surveys of the actual situation and reviewing survey methods, ITOCHU plans
to continue similar measures at suppliers of overseas offices and Group companies, which were added in the fiscal year
ended March 31, 2011.

Sample checklist for a supply chain survey [Food Company]

55

CSR in Our Supply Chain

CSR Surveys in the Fiscal Year Ended March 2011

In fiscal 2011, we conducted a survey, targeting not only suppliers of ITOCHU Corporation but also suppliers ofoverseas offices and Group companies. As a result, we surveyed 374 companies, including 21 suppliers of overseas
offices and 24 suppliers of Group companies.No serious problems requiring immediate response were found in thesurvey results. We also found that the survey results were more focused this time on the key points, thanks toincreased understanding by the employees conducting the surveys, and we received feedback that participants had
seen improvement due to the continuation of the surveys.
We are committed to continually increasing our employees' awareness in our daily business and to improving the CSR
of our suppliers by continuing these surveys and dialogue with suppliers.

Survey results by organization (FY2009 to FY2011)
FY2011FY2010FY2009Textile Company

24

28

17

ICT & Machinery Company

15

17

12

Energy, Metals & Minerals Company

14

11

8

Chemicals, Forest Products & General Merchandise Company

193

133

149

Food Company

105

93

57

Finance, Realty, Insurance & Logistics Services Company

23

18

18

(*) 374

300

261

Total
*

Includes 21 suppliers of overseas offices and 24 suppliers of Group companies

56

Employee Relations

One of the basic policies of the “Brand-new Deal 2012” medium-term management plan is to “Proactively Seek New
Opportunities.” To this end, ITOCHU will proactively advance efforts to develop and strengthen human resources as the
management foundation supporting a commitment to taking assertive and forward-looking action. Our longstanding
promotion of a global human resources strategy also remains unchanged.

Policies and Tasks for Fiscal 2012For ITOCHU Corporation, human resources are its greatest management assets as a
general trading company.
“Brand-new Deal 2012,” our medium-term management plan launched from fiscal 2012,
outlines a variety of initiatives pertaining to human resources, such as cultivating“industry professionals” and “strong human resources.” By executing the medium-termplan and these measures, we intend to further enhance the structure that will support
utilization of our human resources, enabling our employees to demonstrate their skills
and abilities to the fullest.

Fumihiko Kobayashi
Executive Officer, General
Manager, Human Resources &General Affairs Division

57

Employee Relations

Human Resource Development Supporting the “Seeking of New
Opportunities”

Human Resource Development Supporting the “Seeking of New Opportunities”

Human resources are what support the stable, ongoinggrowth of ITOCHU Corporation.
Our human resource development activities are available
to employees throughout the Group, both domesticallyand in overseas blocs. Based on each employee’s work
experience and abilities, we strive to help them develop
into professionals who play an active role in their businessfield and to provide them with the skills necessary to
manage business on a global level.
Through individual evaluations and feedback, and byproviding valuable job experience via on-the-job training(OJT), we help to cultivate the motivation and willingnessof employees to increase their career opportunities within
the Group. To further the support of employees’ selfdevelopment, we not only provide skills and knowledge
through training but also actively support individual

Basic Structure of Human Resource Development

career development. We will continue to invest
substantially in our human resources, while at the sametime promoting human resource development which isproactively led by the front-lines.

A Variety of Training Schemes

ITOCHU conducts a variety of training schemes that include essential training by
position and job class, as well as select and elective training. We have a wide range ofprograms for the development of global management human resources, including global
development programs (such as the GEP, GLP and GNP) (*) , and workshops fororganization managers. We also have a system for sending new employees overseas,
instituted in 1999 as a means of fostering English proficiency and an international
perspective in our young employees. As a follow-up to this program, we launched a newprogram designed to dispatch Junior staff overseas training for multi-language. Our plan
is to develop candidates who will become specialists in each target market in the future.
We also offer a wide range of training for specific objectives, such as “Career vision
support training” and distinctive training based on the human resource strategies ofeach Division Company and administrative division at ITOCHU Headquarters, with theaim of developing industry professionals and diverse human resources.
***

Global executive program (GEP) is one of our core programs for developing global humanresources. Its aim is to develop global executives.
The Global Leadership Program (GLP) is a program designed to foster organization
managers capable of acting on a global stage.
The Global Network Program (GNP) for staff hired locally overseas seeks to help themlearn about the ITOCHU Group’s global operations firsthand through training at ITOCHU
Headquarters, and to create a peer network among program participants.

58

Global development
programEmployee Relations

Human resources development policy and training details (excerpt)
Overview of human resources

Training program name (excerpt)

development system
Development of global management

Global development programs, organization manager training,

talentsending employees to short-term business school programs

Business leader development

Sending of new employees overseas, dispatch of junior staff
overseas to learn Chinese and other languages

Development of industry professionals

Career vision support training, distinctive training for each Divisionand diverse human resources

Company, headquarters administrative division

Number of employees participated in major training programs
Training program name

FY2011 Results

Global development program

108

Organization manager workshops

466

Sending of employees to short-term business school

44

programs overseas
Junior staff overseas training for English and Junior staff

76

overseas training for multi-language
Career vision support training

2767

Comments by Training Participants
Sang-Chul Choi

Global Executive Program (GEP)Division General Manager
Corporate Planning &Business Development
Department
ITOCHU Korea LTD.

Through the GEP training program, I learned about
the requirements of a global leader, and that themost important thing for true communication is thewillingness to learn. During the course of various
discussions with executives, I gained a tangible
appreciation for how much ITOCHU is changing andthe role we have to play in the future.

Shinji Ishikawa

Junior staff overseas training for English

Chemical Compliance Team,
Chemicals Division

I was posted to the U.S. state of Maine under thesystem, Junior staff overseas training for English.
By actually living locally, I came into contact withdifferences in cultures and values that can’t becommunicated by video and voice alone. I feel it wasa major step on the path to becoming a global
human resource.

59

Employee Relations

Ryoko Nagao

Junior staff overseas training for multi-

Supply Chain Facilities
Development Section,
Construction & Realty
Department No. 2

language
Every day was stimulating and allayed my uneaseahead of my posting.
While interacting with various bright, kind andpassionate Chinese people, my preconceived imageof China changed. In addition to learning thelanguage, I developed a keen sense of the Chinese
economy, which continues to go from strength tostrength. I really appreciated this wonderful
opportunity.

60

Employee Relations

Global Human Resources Strategy Enters a New Stage

Global Human Resources Strategy Enters a New Stage

Since fiscal 2008, ITOCHU has been promoting a global human resources
strategy in order to maximize the value of human resources and optimize thetalent development of the Group on a global basis. In parallel, an environmentis being developed that will allow employees to take on new challenges by
respecting their diverse values and individuality, heightening their motivation,and optimally bringing their skills and talents to the fore, all without regard tonationality, age or gender. In promoting this global human resources strategy,
each Division Company, the Human Resources & General Affairs Division at
ITOCHU Headquarters, and Global Talent Management Centers (GTECs) infour major cities worldwide had, by fiscal 2011, come together to create acommon global platform, including standardized evaluation items and a global
human resources database. From fiscal 2012, focusing on individual
employees, we will strengthen human resources strategy in core overseas
markets such as China and Asia in order to secure, develop, and optimize
personnel that will contribute to business development worldwide.

Talent Management Process

Specific Initiatives
1.

We are inviting employees from our overseas blocs worldwide to come to our headquarters forapproximately two years as a form of HR development through actual operations. These employees areprovided the opportunity to master business operations, gain a firm understanding of our corporate
philosophy and culture, and build interpersonal networks. At the same time, this initiative encourages ourheadquarters to become more global in its outlook. (From April 1, 2008 to March 31, 2011, a cumulative
total of 54 employees have been accepted.)2.

We are assigning, promoting, and developing human resources on a global basis regardless of nationality,
using the ITOCHU Global Classification (IGC) as a common measure of job level/level of responsibility for alljobs and positions worldwide.

3.

We promoted a globally shared human resources strategy through the ITOCHU Global Recruitment website,a channel that human resources desiring local recruitment overseas can also utilize. In addition, we
conducted an internship in English for foreign university students in August 2010 as a form of PR targeting
talented human resources.

4.

We have incorporated the five ITOCHU Values, formulated as the new ITOCHU Mission, into the humanresource requirements for ITOCHU leaders. These requirements are reflected in our hiring standards andour evaluation and HR development programs led by internal instructors, enabling us to hire and develop
human resources suited to ITOCHU’s values globally.

Number of overseas bloc employees by region (As of March 31, 2011)(Unit: persons)North America

157

Latin America

164

Europe242

Africa38

Middle East

161

Oceania39

East Asia

628

ASEAN & South West Asia

667

CIS

88

Total: 2,184

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Employee Relations

Providing Comfortable Working Environment for Employees

Efforts to Support Employees’ Childcare and Nursing Care

During the course of their working lives, employees inevitably pass through life stages that require them to renderchildcare and nursing care. To enable them to continue working with peace of mind and demonstrate their fullest
potential, ITOCHU has expanded and upgraded systems to help that are far and above those required by law. Thesesystems are available to both men and women, and provide support to employees in their work as well as child and/or
nursing care duties.
In fiscal 2008, along with offering a system for childcare leave, we added systems that allow employees to choose thedays they wish to work and to work shorter hours when raising children. We also established a paternity leave system
as yet another way to support employees in both work and parenting, with the number of employees utilizing thissystem growing each year.
In fiscal 2010, we opened I-Kids, a childcare center for our employees, at a location close to our Tokyo headquarters.
This move was made in light of a widespread social issue where many children are currently waiting for entry tonurseries in the Tokyo metropolitan area, and female workers face difficulties in planning their return from childcare
leave. Subsequently, we took this step to minimize factors that might hinder our employees from continuing theircareers and support their motivation to keep working. Furthermore, in line with revisions to Japan’s Child Care andFamily Care Leave Law, in fiscal 2011, we expanded our system for supporting the participation of male employees inchildcare, and established a new system of nursing care leave, allowing employees to take short periods off from work
as a way to support them in meeting their work and nursing care responsibilities.
Through the continued expansion and upgrade of support and systems of this kind, ITOCHU is creating a working
environment that will enable employees to retain their motivation to continue working.
(Unit: persons)Acquisition of leave according to child care or nursing care related systems
FY 2009
Child care

Parental leave

FY 201030

FY 201143

49（2 males; 47
females）

Leave to nurse sick71

98

125（58 males; 67
females）

children
Shorter working hours for40

3250（1 males;
49females）

child care
Special parental leave

21

16

13（7 males; 6
females）

Nursing care

Paternity leave

48

53

62（62 males）

Nursing care leave

0

0

0

Special nursing care989（3 male; 6 females）--

16（7 males; 9

leave
Nursing carefemales）

responsibilities
Shorter working hours for

1

2

2

247

383

469（285 males; 184

nursing care
Family support leave

females）

62

Employee Relations

Comments from an I-Kids user
Investor Relations Department

Akihide Chiba
I was unable to get my child into an approved nursery school, so I
chose to use I-Kids instead. I was a bit worried at first if my daughter
would adapt to being in daycare. But she quickly became accustomed
to going to I-Kids and seems to enjoy being their each day, which as aparent makes me glad. While commuting to work on the train with a
one year old can be tough, my wife and I both appreciate knowing that
we can continue to work while having her looked after by nursery
Birthday party at I-Kids

school teachers, nutritionists and other staff that we can trust.

Comments from a user of childcare leave
When my second child was born last year, I decided to take leave fromthe Company after discussing the decision with my supervisor and mywife. Thanks to the support of my supervisor and colleagues, I wasable to give my all to helping raise my child during this irreplaceable
time in a baby’s development. Although there are still not many male
employees opting to take leave, as Japan’s birthrate declines and its
population grows older, supporting childcare efforts will become an
HR Management Department,
Human Resources & General
Affairs Division

Takashi Kawasaki

increasingly major social responsibility that companies must fulfill. I
think that more must be done to create an environment andatmosphere that will allow men and women alike to meet theirrespective parental duties.

Acquired “Kurumin” Mark Certification

On July 11, 2011, ITOCHU Corporation obtained approval from the Tokyo Labor Bureau
to display the Next-Generation Certification Mark (affectionately known as Kurumin)
after satisfying approval criteria stipulated by Japan's Act on Advancement of Measures
to Support Raising Next-Generation Children (*) .
In an effort to create working environments suitable for all of its employees, ITOCHU
has a full range of systems in place to support them in balancing their work and parental
responsibilities. Steps taken to embed and promote active participation by more of ourdiverse workforce over the years have included the establishment of an in-house childdaycare center, called I-Kids, in January 2010. Approval to display the Kurumin Mark is
an acknowledgement of ITOCHU's track record in this important area.
ITOCHU will continue to create environments that make diverse working styles possible,
allowing employees to balance work and childrearing, as well as give ample play to theirown skills and abilities.
*

Act on Advancement of Measures to Support Raising Next-Generation Children
The Act on Advancement of Measures to Support Raising Next-Generation Children calls on regional public-sector
organizations to formulate and present local action plans to help reverse Japan's rapidly declining birthrate. Meanwhile
companies, based on the number of employees employed, are mandated to formulate action plans of their own forsupporting employees in balancing work and parental duties, and submit a detailed summary of these to prefectural laborbureaus. (Excerpt from the Ministry of Health, Labour and Welfare (Japanese only)63Employee Relations

Career Counseling

The Career Counseling Center offers a wide range of counseling and support for diverse career stages, ranging fromnew recruits to organization managers. Staffed by several employees certified as career counselors, the department
touches on an array of topics with its clients, including relationships with supervisors, junior staff and peers,
approaches to work, and considerations about one’s own future. A mechanism is in place in which all young employees
go to career counseling at certain milestones after joining ITOCHU as part of their training. Counseling, moreover, isavailable to all employees when choosing a career path, as well as for middle-aged employees looking to extend theiremployment. In the words of one employee, “Since I usually don’t have time on a given day to really sit and consider
my situation, being able to go to career counseling was a very valuable experience for me.”

Employee Health Management

For ITOCHU Corporation, employees are assets, and thus the health management of every single employee isextremely important to ensure that a diversity of employees can freely exert their capabilities.
We have developed an in-house system that allows employees to receive counseling on their health at any time. For
example, the Health Administration Center at ITOCHU’s Tokyo Headquarters, which also serves as a clinic, has 20
specialist physicians on staff, as well as an X-ray technician and a pharmacist. These health maintenanceprofessionals, who each act as a “health concierge,” care for every aspect of health for each employee, providing themwith the support needed to manage their own health.
Where mental health is concerned, we have established a stress management room in-house, and have a system
where employees can talk at any time with a psychiatrist or clinical psychologist.
We are also taking steps to prevent long working hours, including setting days at each business site for early dismissalfrom work. At the same time, we are further strengthening our system for ensuring proper time management as acompany, including utilizing an objective labor time management system based on building entry and exit records.

Employee Safety Measures

To ensure that ITOCHU Corporation employees stationed around the world and their families spend a meaningful
assignment term in safety and good health, we have built a full system not only for incidents, accidents, disasters andother emergencies, but also for health management.
To prepare for emergencies such as diseases or injuries, including preventive measures for infectious diseases in the
dispatched area, we collaborate with multiple medical emergency service companies for a complete support system.

64

Employee Relations

Communications with Employees

Dialogue Meetings with the President

Dialogue meetings that employees can freely take part in are held in an effort
to deepen communication through two-way discussions between employees
and the ITOCHU president.
Although Company-wide Employee Meetings have been held since 2001, fromthis fiscal year the meetings were divided into three sessions in an effort todeepen dialogue. At the dialogue meetings, the president himself can directly
share his passion around management policies and their realization with
employees. At the same time, employees can share their opinions and anyquestions they may have directly with the president. As such, these meetingsare extremely valuable opportunities for two-way communication.
The dialogue meeting for fiscal 2012 took place in August. The meeting was
an exceptionally lively one, and touched on everything from management
policies to more personal topics.

Enactment of Engagement Survey for Employees

ITOCHU continuously surveys the level of engagement present among employees. In fiscal 2011, we conducted asurvey targeting all employees, including those on assignment overseas, with the goal of assessing motivation,satisfaction, and engagement (*) , and utilizing survey results in a range of measures designed to improve employee
engagement and corporate value.
*

Engagement: The degree to which employees, with a strong desire to contribute to ITOCHU, can of their own initiative
optimally capitalize on their own abilities.

65

Employee Relations

Dialogue with the Labor Union

At ITOCHU Corporation, a wide range of issues is discussed with the labor union in order to realize our corporate
mission, “Committed to the Global Good.” In fiscal 2011, we held a number of meetings, including management
meetings with the President and similar meetings with Division Companies. Through opportunities of this kind, laborand management enter repeated and active discussions to build up a healthy relationship that enables both sides torecognize and share challenges currently facing them and to study and implement improvement measures.
Initiatives with the Labor Union in fiscal 2011
Apr. 2010

Chemicals, Forest Products & General Merchandise
Company management meeting

June 2010

Settlement of accountings meeting

July 2010

Management meeting with the President

August 2010

ICT, Aerospace & Electronics Company management
meeting

Ratio of labor union members in April
2011

October 2010

Headquarters management meeting

DecemberMeetings to discuss branches and offices in Japan2010
December

Energy, Metals & Minerals Company management

2010

meeting

February

Management meeting with the President

2011

Comments from the Labor Union President
The ITOCHU Labor Union is involved in a host of measures designed torealize working environments that allow one of the Company’s key
stakeholder groups, its employees, to be more enthusiastic andmotivated, and bring their individual abilities to the fore. As a labor
union, we hope to contribute to CSR activities through active dialogue
with ITOCHU, based on input gathered from a wide array of frontline
operations.
Satoshi Morikawa
President, ITOCHU Labor
Union

66

Employee Relations

Promoting Human Resources Diversification in Japan

Commitment to promoting more diverse human resources in Japan

Promoting efforts to embed and utilize through numerical expansion and systems enhancement
Promotion Plan on Human Resources Diversification 2013 (Japan)
Since December 2003, ITOCHU has promoted efforts to diversify its workforce in Japan. The motivation here is arecognized need to respond to changes in the external environment, such as intensifying competition spurred byeconomic globalization and the race to secure human resources due to Japan’s declining birthrate and aging society.
ITOCHU must also respond to the need to create new businesses, as well as address the disproportionate age makeup
of its workforce.
In fiscal 2010, ITOCHU launched “Promotion Plan on Human Resources Diversification 2013 (Japan),” a new roadmap
aimed at enhancing individual and organizational abilities further by putting an environment in place that leverages
and utilizes the characteristics of each employee without regard to gender, nationality or age. Set to run from April
2009 to March 2014, this new plan outlines concrete measures to implement with emphasis on supporting careerformation for women, seniors and other human resources in their respective fields.
One example of these efforts is the hiring of students from universities overseas to work at ITOCHU Headquarters. By
supporting the push to secure, embed and utilize more diverse human resources, our goal is to create a more
attractive company and corporate culture. Similarly, by reforming consciousness around our approach to work, andthrough measures that encourage appropriate time management and the taking of holidays, we seek to realize
comfortable, dynamic working environments inside ITOCHU.
Number of male and female employees(Unit: persons)
Men

Women

Total

FY 2009

3,161

1,014

4,175

FY 2010

3,191

1,068

4,259

FY 2011

3,201

1,100

4,301

(As of March 31, 2010)

Mid-career hires (career-track)

Total hires of new graduates

67Employee Relations

Supporting the Participation in Society by People with Disability

In 1987, ITOCHU Corporation established Itochu Uneedus Co., Ltd., as a special subsidiary based on the Disabled
Persons Employment Promotion Act (Law for the Employment Promotion of the Disabled) in order to create work
opportunities for those with disability. As of July 2011, the proportion of our workforce with disabilities is 1.99%, which
exceeds the legally stipulated ratio of 1.8%. We will continue to actively support the participation in society by people
with disabilities.

68

Social Contribution

Basic Activity Guidelines on Social Contribution

Following our corporate mission “Committed to the global good,” we have identified five areas of focus in our basic
activity guidelines.

Basic Activity Guidelines on Social Contribution

1. Action on global humanitarian issues
As a globally active enterprise, ITOCHU Corporation shall take proactive approaches tohumanitarian issues around the world and help to build a better, more humane world.
2. Environmental conservation
ITOCHU Corporation shall vigorously pursue activities of environmental conservation andcontribute to sustainable social advancement.
3. Community contribution
As a good corporate citizen, ITOCHU Corporation shall construct favorable relationships, andharmonize its business, with local communities.
4. Growth of future generations
ITOCHU Corporation shall conduct activities to support the sound development of youth as
tomorrow's leaders and work for the emergence of fulfilling and vibrant communities.
5. Support for volunteer work by our employees
ITOCHU Corporation shall provide positive support for the activities of social contribution by eachand every one of its employees.

69

Social Contribution

Social Contribution Activities

ITOCHU Foundation

ITOCHU has promoted social contribution activities aiming
for the sound development of young people since setting
up the ITOCHU Foundation in 1974.
In addition to its present projects, the foundation
searches for new opportunities to help that match theneeds of the times. Current projects include subsidizing
the development of children’s literature collections
Reading aloud from a
subsidized book (Higashi
Motomachi library, Tokyo)(including subsidies for library development at schools
and supplementary schools for Japanese nationals
overseas), and promoting the development of an e-book

Onscreen e-booklibrary.
For details, please refer to the webpages of the ITOCHU Foundation

Providing aid to areas affected by major natural disasters

For humanitarian reasons, we donate money and provide supplies for the emergency relief of people affected bynatural disasters.
By collaborating with local branch offices and related organizations, we provided the following aid.

Recent examples
Flooding in Gansu Province, China¥10,000,000

Flooding in Pakistan¥3,000,000

Flooding in Australia Approx¥8,000,000

Flooding in Brazil¥5,000,000

Earthquake in New Zealand Approx¥1,800,000

Great East Japan Earthquake¥400,000,000

70

Social Contribution

Support activities for the World Food Programme (WFP)

With the hope of alleviating hunger and poverty worldwide, we have been serving as acouncil member of the Japan Association for the WFP, a nonprofit organization that
focuses on building support in Japan for the World Food Programme and its hunger relief
operations.
Every year, employees of the ITOCHU Group participate in Walk the World in Yokohama.
Since 2007, we have made a panel exhibition introducing WFP activities at our Tokyo
head office.
WFP fund-raising

Support the “House for Youth” in Philippines of NGO “Kokkyo naki Kodomotachi (KnK)”

We support the activities of “Kokkyo naki
Kodomotachi” (KnK: meaning Children without Borders),
an NGO that supports street children, children who are
victims of major disasters, and other children indeveloping countries. On December 11, 2009, renovating
was completed for House for Youth, made possible
through support from ITOCHU. Located in the outskirts ofHouse for Youth re-opened
after renovating

Manila (Philippines), House for Youth is a home that helps
young people become independent. It was also put toChildren in the House forYoutheffective use as an emergency evacuation center when typhoons hit the Philippines in September 2009. Moving
forward, the home will provide a wide range of support to approximately 1,000 young people per year.

KnK Reports From the Philippines
KnK's support activities in the Philippines based around House for Youth are
growing. In addition to housing 14 children, House for Youth is also used as avenue each month for computer skills training, a youth development programand development seminars for mothers. We aim to continue using House for
Youth as a base for expanding our community activities to support youth andpeople living in slums.
Together with the staff
members of KnK

71

Social Contribution

ITOCHU baseball class

As part of nurturing young people, thinking that we want to give disabled children theopportunity to challenge themselves in a variety of activities, and that we would like tohelp create opportunities for them to explore their own potential, we have sponsored theclasses since 2007.
The instructor Kazuya Yano, former pitcher for the Yakult Swallows, covered a lot ofground, from sportsmanship, basic movements and other fundamentals that are difficult
to master by practicing at home, to catching fly balls and practicing pitching. Expressing
a common sentiment, one child who participated said, “I am happy because it was theChildren practicing

first opportunity for me to use some of this gear. From now on I want to practice more.” The event is very popular witheveryone including the children, their guardians and the volunteers.

Activities at the Branch Offices

Branch offices in and outside of Japan proactively promote volunteer activities. For further details, please refer to
ITOCHU’s Social Contribution Report.

Supporting Independent Activities by Employees

We have created a system of “Volunteer Holidays” to support the activities of employees. In addition, we support theactivities of Fureai No Network, a staff volunteer organization.

Volunteering in Collaboration with External Organizations (NPOs, NGOs)

We assist in the recruitment of volunteers to participate in the activities of external organizations.

72

Social Contribution

Reports on Social Contribution Activities(From April to December, 2010)

April

Biodiversity seminar at the 2010 new employees' training
We invited Ms. Yumiko Kawamura, Director, Fundraising& Marketing Communications of WWF Japan, and listened
to a talk she gave about what biodiversity was about andwhat we needed to care about. Rather than simply
listening to the lecture, the participants had been given
an assignment in advance and corrected their answers on
this day. The event turned out to be very stimulating. Ina friendly atmosphere, they learned about biodiversity in a way that was easy to understand.

Briefing for Borneo Tree-Planting Tour (Tokyo, Osaka, and Nagoya)We spent four days holding briefings for the tour at bothTokyo and Osaka Head Offices and Nagoya Branch. On
April 13, we invited Dr. Noko Kuze from the Wildlife
Research Center of Kyoto University and took part in aseminar on the ecology of orangutans and the reality of
Borneo. Her lecture using videos had a great impact on
the audience, and made it clearer than ever the reason
why we needed to protect Borneo's forests.

Participation in a tree planting activity in South Korea
On April 10, 20 staff members of ITOCHU Korea, including
its president and vice president, took part in “treeplanting for the future generation.”
After arriving at the site of the subsidized “forest of world
peace” in the Yeongjong Island of Incheon, theparticipants received an explanation about forests andhow to plant trees before going ahead and planting pine
specis in Korea.
Pebbles mixed in with the soil made the job very tough.
But the participants helped one another and felt a senseof fulfillment through the teamwork of achieving acommon goal.

ITOCHU International and ITOCHU Prominent USA employees volunteered to clean up
New York City parkOn a sunny Saturday in April, a team of 24 volunteers
from III and ITOCHU Prominent USA clean up the
Flushing Meadows Park in Queens, New York, locatedbetween the NY Mets Stadium and the US Open Tennis
center. The team cleaned up garbage along the shoreline
and painted the benches.

73

Social Contribution

May

Small environmental tour to learn about Lake Biwa
On May 15, a total of 24 people including staff membersof our affiliates and their families visited the Harie area of
Shiga Prefecture to view kitchens named kabata, andplanted trees in the World Citizens' Forest park where thetree planting activity had also taken place two years ago.
In Harie region, the culture of water and water-usage
called kabata remains since a long time ago. The springwater is drawn into the house and into a pond on the premises with the cleanest water being used for drinking andcooking. The grains of rice stuck to the tableware after a meal are fed to carps in the ponds and after the water ispurified it is flowed into the town's river.

First Volunteer Field Work at Saitama Farming Village (rice planting and taro potato
manuring)
A total of 60 people, including staff members of ouraffiliates and their families, planted rice in the Sagiyama
area of Saitama-shi. Abounding in the scenery of
traditional countryside, this area has excellent access tolarge cities; it is just 20 minutes by car from Omiya and
Urawa. Despite this advantage, many of the fields lie idle
due to a shortage of younger farmers and other factors.
Children, covered in mud, earnestly planted rice. They used a furnace and firewood to cook rice for lunch. The day wasfilled with new experiences for them.

Participation in the Gaienmae cleanup campaign for “Akasaka Aoyama Utsukushii Machi,
Manner no Machi” (Akasaka and Aoyama Beautiful Towns of Well-mannered People)
On May 27 and 28, ITOCHU employees participated in the cleanup campaign organized by the Minato ward ecoconscious consortium. The area we cleaned up this time were the streets around the Gaienmae station.

Accepting university students from China for a one-night homestay
ITOCHU supports and cooperates with the “Get Closer toJapanese Companies and Feel Japan” Project sponsoredby the Japanese Chamber of Commerce and Industry in
China. ITOCHU provides volunteers who host students
from China. The project was established with the purposeof inviting Chinese university students, especially those
who are likely to be future leaders and to help enhancetheir understanding of Japan and Japanese companies. Two families from ITOCHU volunteered this time.

ITOCHU scholarship students' workshop and satoyama preservation volunteer
On May 28, 45 ITOCHU scholarship students gathered at
the Tokyo head office for a workshop and get-together.
Following on May 29, the 45 students and 9 ITOCHU
Group junior staff traveled to Hinode-Machi in Tokyo's
Nishitama district to participate in thinning a bamboo
forest, as part of a satoyama (rural environment)
preservation project.
Upon their arrival, they received instructions from local volunteers before donning safety helmets to charge in thebamboo forest. The hill sides were steep, and also muddy and slippery from the drizzle that day. Once their work wasdone, the volunteers enjoyed the challenge of various bamboo crafts using the bamboo they had cut themselves.
While in the past, bamboo was an integral part of everyday life, declining use of bamboo in recent years has leftbamboo stands in many rural areas neglected, and they often overrun other property. Bamboo's rapid growth alsomeans regular maintenance is needed to keep it in check.

74

Social Contribution

Through this project, the scholarship students and ITOCHU staff not only gained an awareness of the importance ofsatoyama preservation, but were able to deepen their own relationships with one another. Going forward, we plan to
conduct similar joint volunteer projects between our scholarship students and staff about once a year.

Tokyo Sports Festival for the Disabled
Since 1994, staff members of ITOCHU have served as volunteers in the sports festival for the disabled, and the Food
Company provides drinking water for the event.
This year, a total of 7 volunteers from ITOCHU together with their friends supported athletes from Soleil Hana no Sato,a facility for people with the developmentally challenged.

June“Looking at our city from a high place”—Off-campus class for 3rd year students at
Aoyama elementary school in Minato Ward
This year again, 22 third-year students from Aoyama Elementary School visited theTokyo head office on June 3. The purpose of this off-campus class is to look at the city
they live in from a high place and to know what is in their city.

A trip to Disneyland with disabled children
On June 4, 5 volunteers from ITOCHU participated in the KIDS Project 2010. Some of the volunteers were assigned therole of a steering committee, and others were assigned the role of an attendant. Since the project was cancelled lastyear due to the outbreak of influenza, the satisfaction of finally having the great experience they would have enjoyedlast year made the children's smiles all the brighter.

Participation in “End Hunger: Walk the World”
On June 6, 87 ITOCHU employees and families participated in the charity walk foralleviation of child hunger “Walk the World” organized by The World Food Programme(WFP) and Japan Association for WFP. Starting together under a sun that was as hot as
the height of summer, participants enjoyed walking through the atmospheric city of
Yokohama.

AED Seminar by the Japanese Red Cross Society
Four times a year, we held seminars by the Japanese Red
Cross holds at the Tokyo head office, and the first
seminar for this year was held on June 16. 31 employees
took part and learned about first-aid procedures using an
automated external defibrillator (AED).

75

Social Contribution

Participating in the JP Morgan Chase Corporate Challenge in Central Park in New York
（ITOCHU International Inc.）On June 17, 44 runners/walkers of ITOCHU International Inc. and ITOCHU Prominent
USA were among 15,000 participants from 373 companies participating in the 34th
Annual JP Morgan Chase-organized Corporate Challenge to support the Central Park
Conservancy. Members of our team donning ITOCHU-blue T-shirts enjoyed the 3.4 mile
run/walk inside the Central Park.

Blood Donation Drive and Bone Marrow Donor Registration (Tokyo)
The Japanese Red Cross Society conducted a drive for blood donations at the Tokyo head office. A total of 158
employees cooperated in the blood donation drive and 18 employees registered as bone marrow donors.

July

The 2nd Saitama farm volunteer activity (weeding in a paddy field and crawfish fishing)
The seedlings planted in May had grown nicely. The
participants listened to an explanation about a weeding
tool named a takosuriki, before stepping into the paddy
field without taking off their socks. The paddy fields needfrequent weeding because no chemical herbicide is used.
After the weeding, everyone went to a nearby canal for
crawfish fishing. It was a great catch. Many crawfish werecaught in the first cast. However, we heard that once the canal is paved with concrete, no crawfish or other fish canlive there.
After the volunteer activity, some of the participants stayed on the farm and enjoyed digging potatoes and picking
blueberries.

Volunteer activity to cover grapes on the Kimura grape farm in Setagaya
On July 10, 26 people took part in an activity to covergrapes with bags. Covering grapes one by one while
keeping both arms raised is a very strenuous job to do.
But this job can only be done by hand. The participants
experienced a little bit of the hard work that is the daily
life of farmers. Allocated to wine grapes located in lower
areas, children covered them one by one just like grownup participants did.

76

Social Contribution

Participation in Komae Waterfront School: Cleaning of Tama River, preparation of
spawning bed for dace, and river safety class
On July 11, a total of 34 people, including staff membersof our affiliates and their children, joined local children in
the waterfront school. It was another hot and muggy day,and looked like it might rain.
First, they walked to the riverside while viewing thebiotope maintained by local people. They competed inpicking up riverside garbage before putting on a life
jacket and entering the river to prepare the spawning bed. To their surprise, they saw some fish coming to the bed
only 30 minutes after the preparation work was over.
The gathering was closed with what every child was waiting for: the safety class. Mr. Ken Nakamoto, the lecturer, gave
the participants a simple and fun explanation about what to do in the event that you are washed away in the river.

Volunteering to make preserved flower corsages for the disabled
On the occasion of the lobby concert at the Tokyo head
office on July 27, 26 employees volunteered to makepreserved flower corsages to present to everyone fromthe Agape Center. Volunteers say that with this activity,
they can be help of others and have fun at the sametime.

2010 ITOCHU LOBBY CONCERT
Every year we invite people from the Agape Center* to a concert held in the lobby of theTokyo head office. This year, 26 people including staff were able to enjoy music playedby the New York Symphonic Ensemble. Volunteers of the ITOCHU Group helped out by
guiding the guests to the lobby.
*

Comprehensive social services for persons with disabilities under the auspices of the Japan
Church World Service

AugustA charity bazaar at the Asahi Beer Evening
On August 3, we held a charity auction and bazaar at the annual event Asahi Beer
Evening. This year, the proceeds and contributions were donated to a youth assistancefacility “Wakamono-no-ie” (House for Youth) located outside Manila and run by aJapanese NGO, Kokkyo naki Kodomotachi (Children without Borders, KnK) . The facility
was rebuilt on December 2009, under financial support from ITOCHU.

A visit to your parent's workplace: the 2nd gathering of the Chemicals, Forest Products &General Merchandise Company
The 2010 Summer Holidays Kids Project was held on
Tuesday, August 17.
Like last year, children of 32 of our employees
experienced the commuter rush hour with their parents
and learned the proper greeting from new recruits in themorning. The children looked nervous while practicing thegreetings in the office.
The highlight of this year's event was the workshop held at the Minato District Aoyama Elementary School, under theguidance of theater director Ms. Minato
It was not long before the nervous children were relaxed and made new friends. In the afternoon, they were divided
into groups to write and perform a short play.

77Social Contribution

This year's event was about teamwork, a sense of achieving goals and self-expression.
The office visit in the evening gave the children the opportunity to see how their fathers and mothers usually work,
which helped renew their views on parents.
Having started under a concept of making children learn how their moms and dads look different during working hours,
the project was in its second year and improved to a higher level.

Users of neighboring facilities invited to the Jingu-gaien fireworks (Tokyo head office)On August 19, the annual fireworks event took place in the Jingu Stadium located by our Tokyo head office. We invitedthe children who use the neighboring facilities to the event.
They jubilantly enjoyed watching the fireworks displayed in front of them.

SeptemberDonating Items through "First Night Kit Program" in New York（ITOCHU InternationalInc.）
In summer, ITOCHU International Inc. volunteers collected hygiene items (soap, shampoo, conditioner, toothbrushes,
toothpaste, ect.), socks, notebooks, pens and small toys for kids for the "First Night Kit Program" run by Jersey Cares.
Jersey Cares is a community based organization in New Jersey. They collect these items for domestic violence shelters,
runaway safe havens, and foster homes. By the end of summer, ITOCHU International, Inc. donated 3 boxes (movingsize) of these items to the Program.

DecemberDonating Christmas Gifts to Foster Children through Angel Tree Program in New York
（ITOCHU International Inc.）
ITOCHU International Inc. sponsored the "Angel Tree Program" organized by the
Forestdale Foster Home, a non-profit agency that assists children and their families in
the Queens area of New York by providing foster care placement, adoption andmentoring services. ITOCHU staff volunteered to purchase and wrap gifts written onangel shaped decorations on the Christmas tree in the company's reception area. Eachangel decoration had the name of a child along with the gift the child wished for. In thecase of very young children, gifts the care givers had deemed suitable. ITOCHUInternational Inc. donated as Christmas presents to 30 children, aged from 2-month to 18-year old, a wide range ofgifts from gift cards and coats to iPods, scooters, walkers, etc. The children were delighted with the gifts, says theThank You letter sent by Jersey Cares.

Visiting Orphanage with New Year presents("CIECO Azerbaijan" Rep. office of ITOCHUOIL Exploration (Azerbaijan) Inc.)CIECO Azerbaijan is rendering assistances to refugees, orphanages and disabled every
year by means of the variety of donation. End of December 2010, three staff members
visited the Orphanage House to interact with disable children, and deliver the presents.
Smile of these children are so pure and sincere, so all members of ITOCHU shed a few
tears.

78

Social Contribution

Reports on Social Contribution Activities(From January to March, 2011)

January

Donating New Calendars to Various Organizations
We donated new but surplus calendars to kindergartens in Saitama and various similar institutions in Tokyo.

Participation in the Akasaka Aoyama Campaign for a Clean Town with No Littering
ITOCHU employees participated in the Akasaka Aoyama Campaign for a Clean Town with No Littering on January 27
and 28, joining forces with employees from neighboring companies to clean up the area in front of Gaienmae Station.

February

Blood Donation Event Held (Osaka Head Office)A blood donation event through the Japanese Red Cross Society was held at the Osaka Head Office building. Sixty-fivepeople participated.

Charity Sale of Valentine’s Day Chocolate
On February 8, we held an in-house charity sale ofchocolate with assistance from the Food Company. This
year, the renowned entertainer and mathematician Peter
Frankel volunteered to assist the sale. Mr. Frankel
supports various needy groups as an individual, and not
only sold chocolates alongside ITOCHU employees but
also gave a marvelous street performance. All proceedsfrom the sale were donated to the NPO Kokkyo naki Kodomotachi (“Children Without Borders”) and will be used to fundeducational support activities for deprived children living in the “House for Youths” that was recently completed in
Manila.

Handmade Stuffed Toys Given to Children in Developing Countries
Twenty-three employees participated in the Happy Toys Project, which is focused on
making handmade stuffed toys. Now in its fourth year, the project is run in cooperation
with FELISSIMO CORPORATION.

Kids' Day in KidZania Koshien
On February 16, we held a family event at the Osaka
Head Office and KidZania Koshien. ITOCHU booked theentire KidZania Koshien complex for the day, and invited
850 children from local elementary schools in Chuo ward,
Osaka, and children of employees to join the event. The
children spent a fun day trying various activities in thefacilities and pavilions, as well as learning about different
types of work.

79Social Contribution

Before visiting KidZania, 50 employees of the ITOCHU Group and their children assembled at Osaka Head Office. There
they divided into two groups for a tour of the ITOCHU workplace. The tour offered the children a chance to see theoffices where their parents work, the staff cafeteria, and the executive boardroom. The goal was to help them tounderstand the importance of working, and foster deeper communication within families.

March

ITOCHU Donates ¥400 Million to Aid Victims of the Great East Japan Earthquake
ITOCHU Corporation has decided to contribute ¥400 million in aid to help the victims of the Great East Japan
Earthquake. Moreover, we are prepared to offer as much support as we can, depending on the needs that arise instricken areas as the situation progresses. We offer our heartfelt sympathy to people in the disaster-hit areas and hopefor a swift recovery.

Collecting Employee Donations for the Great East Japan Earthquake
On March 15 and 16, 2011, we held a two-day emergency
drive to collect donations from employees in the B1basement lobby of our Tokyo Head Office. Further
donations were collected at other ITOCHU sites in andoutside Japan, bringing the total amount collected at theend of March to ¥8.15 million. Donations collected within
Japan were given to the Japanese Red Cross Society, andthose collected outside Japan were given to overseas Red Cross societies or similar organizations, to be used for the
support of people in the areas affected by the disaster.

Material Aid for Disaster-hit Areas
In addition to providing ¥400 million in monetary aid, inMarch ITOCHU also helped to supply food, clothing andother living essentials to the affected areas, including thefollowing.
1.

Clothing
10,000 items of underwear, children's clothing,
and towels are currently being shipped and distributed in Miyagi Prefecture.

2.

Emergency dwellings and rooms for indoor installation (TECCEL products)
These are currently being shipped to emergency shelters in Higashi Matsushima City. Plans are to use them forchanging rooms and other purposes.

3.

“Spam” precooked meat (Canned meat)
1500 cases (36,000 cans) of spam have been shipped to the prefectures of Iwate, Miyagi, and Fukishima.

All the material supplies from ITOCHU mentioned above were secured and delivered in response to requests from theprefectures.

Indonesian Children Send Messages of Encouragement through ITOCHU INDONESIA
Employees at PT ITOCHU INDONESIA have long provided support to local children forced
to search through refuse as a way to help their families survive. When these children
heard about the Great East Japan Earthquake, they wanted to send a message of thanks
and support to the people of Japan in return. Although they had no money to spare fordonations, the children sent letters of support together with drawings addressed to thepeople living in the disaster zone.

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Social Contribution Programs to Commemorate the150th Anniversary
Activities to Restore the Tropical Rainforests and Conserve
Borneo's Ecosystem

A worldwide issue, the striking decline and deteriorationof tropical rainforests and the accompanying collapse of
ecosystems was pointed out at the United Nations
Conference on Environment and Development (UN Earth
Summit) held in Brazil in 1992, but even today it has not
stopped. In addition, it is also said that the destruction offorests is a source of the increase in CO₂ that is a causeof global warming.
The island of Borneo (Kalimantan) is a tropical rainforest
region extending across the three nations of Malaysia,
Indonesia and Brunei. With a surface area that is
approximately 1.9 times that of Japan, it is the thirdlargest island in the world.
Ranked with the Amazon, the island of Borneo is
considered a treasure house of biodiversity, but recently
development has made headway and some of the tropicalrainforests have been damaged to the degree that it is not possible to preserve the ecosystem with naturalregenerative power alone. This program is designed to assist with the regeneration of these damaged rainforests. In
the northeast of Borneo, at North Ulu Segama in the state of Sabah in Malaysia, where ITOCHU supports an area for
rainforest regeneration, WWF, the international conservation organization, is collaborating with the Forestry
Department of the State Government of Sabah, to carry out reforestation of an area of approximately 2,400 hectares.

81Social Contribution Programs to Commemorate the 150th Anniversary

Within the area, the ITOCHU Group is supporting the regeneration of 967 hectares. The land in question is also a
habitat for orangutan s, an endangered species. The reforestation not only protects the orangutans ; it is linked to theprotection of many living creatures whose habitat is here.
Reforestation of 381 hectares had been completed as of the end of June 2011.
It takes a long time to regenerate a tropical rainforest. Five years alone is not enough. However, taking thisopportunity, both employees and Group companies are cooperating, aiming to regenerate a forest where the animals
can live in peace.

Program Description

Recipient

WWF Japan

Term

From FY2010 to FY2014 (five years)

Location

Borneo (North Ulu Segama, Sabah, Malaysia)

Area

967 hectares (approximately half the size of Minato Ward in Tokyo)

Contribution

A total of 250 million yen (including donations from Group companies)

Tree-planting

We will plant species of trees that are appropriate to local conditions with the focus on
the local Dipterocarpaceae species. We will plant trees and undertake maintenance fora period of five years.

Employee

We are involved in local forestation activities (tree-planting, cutting undergrowth),

volunteering

wildlife observation, and other activities by employee volunteers, including those fromGroup companies.

Reforestation Activities by Employee Volunteers

Careful tree planting together with local staff

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Social Contribution Programs to Commemorate the 150th Anniversary

Commemorative photo taken at the ITOCHU Groupreforestation site

Trees planted in 2009 have grown substantially in justnine months

WWF Program Outline*

The reference material predates the decision by ITOCHU to support the project.

Reforestation Activities in the North Ulu Segama on Borneo: Revive! The Forest of theOrang-utan, an Endangered Species
Objective
To undertake reforestation of an area of 2,400 hectares with highconservation priority and requiring human intervention due to severe
deterioration in the state of Sabah, Malaysia.
The Significance of the Location
A diversity of plants and indigenous species, including the orang-utan, inhabit
the island of Borneo, which is a treasure house of biodiversity. To cite one
example, the orang-utan, the mammal that is the symbol of Borneo, is anendangered species of primate that only survives on Borneo and Sumatra. In
2005, WWF established areas of particularly high priority as habitats for theorang-utan on Borneo: three areas on Indonesian territory and in Sabah,
Malaysia. The five areas listed below (in order of importance), in Sabah, are ofparticular significance.
The decline in the headcount for native orang-utans is caused by the overall
decline of forested areas as well as the splitting off of forested areas. Securing
the habitat is directly linked to the preservation of the forest ecosystem on
Borneo.

83

Orang-utan habitat© WWF Japan All Rights Reserved.

Social Contribution Programs to Commemorate the 150th Anniversary

Regionarea (km2)

headcount

Ulu Segama Malua

3,000

5,000

Kinabatangan north

1,400

1,700

Tabin Wildlife Reserve

1,200

1,400

Kinabatangan lower reaches

400

1,100

Kulamba Wildlife Reserve

210

500

Significance of the Activities
In the most important area of Ulu Segama Malua (USM),
logging for timber started in the early 1960s but was
stopped as of January 2008 with the State Government of
Sabah inviting WWF Malaysia to join the team that willproduce a ten-year plan for USM forest management. In
this way, the opportunity for protection is increased andthe work can go ahead in an environment where it is easy
to promote conservation activities to achieve the following
four goals.
1.

To protect the biodiversity and genotype by restoring
the Dipterocarpaceae forests in the lowlands where
many species survive.

2.

To secure for the long term a habitat for large
primates and endangered species.

3.

To save indigenous species from the crisis ofextinction.

4.

To secure for the long term an environment where

Ulu Segama-Malua© WWF Japan All Rights Reserved.

the separated forests are linked together to allow wild
animals to move over a wider range and to secure
food.
Location
In Ulu Segama, and particularly in North Ulu Segama
where deforestation is severe, there are approximately 90
orang-utans, but, since the deterioration is too severe,
there is no prospect for forest regeneration without
human intervention such as planting trees and clearing
the undergrowth. It has been decided to restore 2,400
hectares of forest in this area. The Ulu Segama area is aforest reserve where commercial use is allowed and, as is
the case with other forest reserves, the Sabah Forestry
Department (SFD) owns the land. WWF has alreadyestablished a local officer here and have a team in place© WWF Japan All Rights Reserved.

to monitor the orang-utans. The target area is divided
into three blocks; work has started in one block withfunding from:Marks & Spencer (UK)The Addesium Foundation (Netherlands)
WWF UKWWF Germany
WWF US84

Social Contribution Programs to Commemorate the 150th Anniversary

Local name of species/scientific namecommercial name

Laran

Neolamarckia cadamba

Laran

Binuang

Octomeles sumatrana

Binuang

Seraya Kepong

Shorea ovalis

SerayaKapur Paji

Dryobalanops lanceolata

Kapur

Seraya Tembaga

Dipterocarpus caudiferus

Keruing

Seraya Daun Kasar

Shorea fallax

SerayaKawang Jantung

Shorea macrophylla

Tengkawang

Selangan Jangkang

Hopea nervosa

MerawanUrat Mata Daun Licin

Parashorea mallanonan

White seraya

Seraya Daun Mas

Shorea argentifolia

SerayaSeraya Punai

Shorea parvifolia

Red seraya

Seraya Kuning

Shorea kudatensisi

Yellow seraya

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Social Contribution Programs to Commemorate the 150th Anniversary

News from Borneo: Vol. 2

In the Malaysian state of Sabah of the island of Borneo, where the activities of the ITOCHU Group Forest for Orangutans take place, eleven Company employees and employees of Group companies participated in a tree-planting tour.
We introduce here the fascinating natural environment the participants encountered and their thoughts about the tour.

Kota Kinabalu

The gateway to tours of Borneo, Kota Kinabalu the city isalso a growing commercial center with a population of
approximately 300,000. WWF-Malaysia also has an office
here.
Comments from Participants
The day before we began tree-planting activities, at the
WWF office we heard about plans to create a Green
Corridor stretching some 700 km that would connect the
fragmented forests. While the trees we planted on this tour
would account for only a fraction of the distance of thiscorridor, we felt that we had been entrusted with a majorrole since this was an important area right in the middle ofthe corridor.

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Social Contribution Programs to Commemorate the 150th Anniversary

North Ulu Segama

This is the reforestation area for this project. We aresupporting 967 hectares (207 times the size of the Tokyo
Dome) for forest regeneration. By the beginning ofNovember 2010, approximately 160 hectares of forest had
been planted.
Comments from Participants
Whether from the boat, the car or the plane, the palm tree
plantations we saw seemed to stretch on forever. I was
also struck by the harsh reality of man’s destructive power
in seeing how people have tried to create a new world bychopping down the jungle where so many forms of wild life
lived in balance.
The tragic landscape isn't on some distant planet, but
stretches as far as the eye can see right under the samesky as ours, in a country with an hour time difference fromJapan. This is something we must be careful never toforget.

Sukau

This is a popular location for cruises on the Kinabatangan
River, and a place where you can come across many wild
animals such as crocodiles and proboscis monkeys.
Comments from Participants
The cruise took on a different appearance at night than in
the morning, and made me feel like I really was in the
middle of the jungle. At night, we happened upon rarely
seen slow loris and colorful kingfishers in the trees. As theboat proceeded along the river, we could see the red eyesof crocodiles reflect in the light on the surface of the water!
In the morning, we encountered proboscis monkeys having
breakfast. It was a great location for learning how humans
and animals live side by side.

87Social Contribution Programs to Commemorate the 150th Anniversary

Sandakan

Sandakan is the second city after Kota Kinabalu. It
flourished as trading post and as the heart of British North
Borneo until 1947 when the capital was moved to Kota
Kinabalu.
Comments from Participants
I heard that Sandakan was the second largest city in theprovince of Sabah, but I was surprised at how small it wasand the densely packed old houses. New buildings werebeing constructed on the shabby remnants of the colonialera. I felt mixed emotions. On the one hand, I hope that an
attractive cityscape befitting a tourist destination iscreated. At the same time, I also wish the genial locals cancontinue to live as they have until now.

Sepilok

The Orang-utan Rehabilitation Centre, which returns orangutans on the verge of extinction to the wild, is located here.
Comments from Participants
The sight of orangutans chasing away monkeys that were
trying to pinch the food given to them by their keepers washuman-like. I now understand why they say that thegenetic makeup of orangutans is 96% the same as
humans. While witnessing this spectacle, it reaffirmed forme the importance of forestation so that the number ofprotected orangutans doesn’t increase. After all, this place
was a facility for protecting orangutans that had lost theirparents due to forest development and other reasons.

Tree-Planting Tour

Itinerary
Day1

11/18

Haneda - Kota Kinabalu(Borneo)（WWF Office）

Day2

11/19

Kota Kinabalu - Lahad Datu - Ulu Segama(planting site) - Sukau

Day3

11/20

Sukau - Sandakan - Sepilok(Orang-utan Rehabilitation Centre)

Day4

11/21

Sepilok - Sandakan - Kota Kinabalu

Day5

11/22

Kota Kinabalu - Haneda

Video of the tour

● High-quality video (1 Mbps)● Standard-quality video (300 Kbps)

88Social Contribution Programs to Commemorate the 150th Anniversary

Reforestation Status as of November 2010
As of early November 2010, 163 hectares of forest had been planted (blue portion). At present, approximately 80
hectares is being reforested (green portion), and the aim is to have completed planting 300 hectares by the end of
2010. Work was interrupted between February and May 2010 by a local drought, but is now proceeding steadily. This
tour planted trees in the 110-5 block in the upper left part of the map.

Blue: Reforestation completed
Green: Reforestation in progress
Red: Next planned reforestation area

Tree-planting Report

We took the red-eye from Kota Kinabalu to Lahad Datu, where we left the plane and traveled to the treeplanting site in four 4WD vehicles.

The day before, we learned a lot about methods and the importance of forest protection as well as orangutan
survey methods at the WWF-Malaysia office, which filled everyone with expectation and enthusiasm.

Handy Information 1
The area surrounding the ITOCHU forest has a relatively higher concentration of Borneo orangutans thanother areas. In this area, the lives of 14 orangutans are studied by 5 researchers. The WWF has given
names to currently identified orangutans and continues to conduct surveys. A helicopter is also used to
conduct ongoing surveys from the air.

Under clear skies that belied the rainy season, palm tree plantations spread out before our eyes as we left the
town from the airport. All we could see was palm trees of varying sizes that went on and on.

Here and there, palm trees were immersed in water, and we learned later that just before our visit, heavy rains
had flooded some villages.
All of a sudden the palm trees ended, and we had arrived at our destination, the protected area managed by
the WWF.
This area was definitely different from the jungle image that I had painted in my mind. There were pockets oftall trees here and there under the wide blue sky.

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Social Contribution Programs to Commemorate the 150th Anniversary

After arriving, we assembled for a group photograph shoot first with local workers before we got sweaty andmuddy.
There were lots of girls, so it was a cheerful atmosphere. The workers seemed to be happy as well. Later, weplanted a commemorative tree in front of the board.

After the photo shoot, we went to inspect the growth of the trees that had been planted in the past while
getting bitten by various insects along the way. We saw a small stream in the middle of the jungle inhabited byshellfish and fish.

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Social Contribution Programs to Commemorate the 150th Anniversary

Growth Status of Planted Trees
Pioneer tree variety

Dipterocarpaceae

November 2009 tree-planting

November 2010

November 2010

The photograph on the left shows trees that were planted in February 2010. The trees had grown quite tall injust nine months. A type of tree indigenous to Malaysia with a particularly high growth rate had been planted.
These trees are now around six meters high.

Handy Information 2
The Pioneer tree variety grows quickly, creating shade. In the shade of these trees, Dipterocarpaceae trees, acommonly found local variety of tree, grow slowly, eventually reaching a height of 70 to 80 meters. The fruitand leaves of Pioneer trees are eaten by wild animals.

After eating lunch and drinking coconut juice, we finally headed off to plant trees. We entered the jungle underthe blazing sun.

Under the guidance of the workers who were paired with ITOCHU employees, we carefully planted each tree
one by one.

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Social Contribution Programs to Commemorate the 150th Anniversary

We planted the trees at intervals of eight meters. It was exhausting work just moving through the jungle to thenext planting spot. There were still pockets of abundant flora and fauna in the surrounding area. The indigenous
but endangered Borneo Elephant uses the ITOCHU forest as a refuge.

Eventually, 11 people planted close to 200 trees, which brought smiles to everyone’s faces.

While we were working, we received news that orangutans had been seen in the protected forest. We left thetree-planting site filled with the hope that someday in the near future orangutans would also populate the forest
area we had planted.

Handy Information 3
Orangutans use leaves to make new beds for themselves in the trees every day. However, sometimes they
get lazy and use existing beds.

92

Social Contribution Programs to Commemorate the 150th Anniversary“Heartfelt Thanks to All of You!”This latest tour held two especially moving experiences for me. The
first was confirming with my own eyes that many of the trees weplanted last year have since grown to more than 2 meters in height.
The growth of these trees brought home for me the fact that therestoration of the forest has finally begun. The second experience waswatching every volunteer show such passion for planting new trees
despite the sweltering heat. I was touched by the beauty of seeing
Toshiaki Mizuno

people tackle the challenge of trying to restore a forest, as well as the

Operations Office, WWFJapan

strength of resolve it demands. For me, the tour reaffirmed that thecompassion and actions of individuals will one day make the area anabundant forest again. This ITOCHU program is spearheading activities
to restore the globally important forests of Borneo. We thank ITOCHU
for its continued participation.

Pictures of some of the animals on Borneo we encountered on this tour.

Handy Information 4
The proboscis monkeys and slow loris seen in these photos of the Kinabatangan River basin have fallen in
number so dramatically that they have been placed on the IUCN Red List of Threatened Species. We were
therefore extremely fortunate indeed to see them in the wild.

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Social Contribution Programs to Commemorate the 150th Anniversary

Establishing the ITOCHU Scholarship Fund

Assisting Non-Japanese Students to Lead the Next Generation

To celebrate the 150th anniversary of its founding, ITOCHU Corporation
established the “ITOCHU Scholarship Fund” in 2009 in order to reduce thefinancial burden during their study in Japan for foreign students in Japanese
universities. This support will enable them to better focus on their academic
work, while encouraging these students to contribute to the development andstrengthening future ties between Japan and their home countries.
Each year the scholarship will be awarded to 20-30 foreign students in their
third and fourth year, who are currently enrolled in Japanese universities.
Each student will receive ¥1.5 million per year (¥3 million per student over 2

Group photo of the ITOCHU
scholarship students and employees

years), and additional 20 to 30 students will be selected every year.
As part of this program, students are not only provided financial assistance via
the scholarships, but are also given an opportunity to gain a deeper
knowledge about ITOCHU Corporation by taking part in our Company's CSR
activities, including volunteer work, and attending lectures on ITOCHU's
businesses and international operations. These and other steps are part of theCompany's plans to proactively encourage interaction with these students
from abroad.
At the end of May in fiscal 2011, students on scholarship from ITOCHU andyoung employees took part in the Satoyama (rural environment) preservation

Everyone working together to cut
bambooproject in the town of Hinode in Nishitama County, Tokyo. After breaking into groups, the students and employees cut
down bamboo, which was later used by the participants for various handcrafts. Along with recognizing the importanceof Satoyama preservation, the volunteer action provided an opportunity to deepen interaction between the students
and ITOCHU employees.
Through these activities supporting foreign students, whom will one day be leaders, ITOCHU is helping to develop andstrengthen ties between Japan and their home countries in the future. At the same time, this scholarship fund serves
as one of ITOCHU's international social contributions as a truly global enterprise.

94

Our Initiatives for the Environment

Environmental Activities Policies

ITOCHU Corporation positions global warming and other environmental problems as one of the top priority issues in its
management policy. In addition, to fulfill our corporate philosophy “Committed to the Global Good,” we haveestablished an Environmental Policy. Now, we advance our corporate management and activities on a global scale
under this policy, not only to contribute to the prosperity of the present generation, but also from the view point ofwhat we can create to pass on to the next generation, while keeping a strong awareness of global environmental
problems.

The ITOCHU Group Environmental Policy

I . Basic Philosophy
Global warming and other environmental issues are affecting the future of mankind. As a global enterprise,
ITOCHU Group is positioning these issues as one of the most important management policies. ITOCHU Group
contributes to the realization of a sustainable society by promoting “Actively addressing the better global
environment” based on The ITOCHU Group Corporate Code of Conduct, in order to achieve the goals of The
ITOCHU Group Corporate Philosophy, “Committed to the Global Good”.

95Our Initiatives for the Environment

II . Activity Guidelines
In keeping with the basic philosophy presented above, ITOCHU Group pursues a continual improvement of its
environmental management system and defines the following guidelines concerning activities of environmental
conservation.

(1) Prevention of

In all business activities, duly consider the need to conserve ecosystems

environmental pollution

and biodiversity, as well as local and global environments, and strive toprevent the occurrence of any environmental pollution.

(2) Observance of laws andObserve all domestic and foreign laws and regulations related toregulations

environmental conservation, along with other requirements to which wehave subscribed.

(3) Promotion of

Besides promoting activities for conservation of energy and resources asenvironmental conservation

well as reduction and recycling of waste as needed to establish theactivities

recycling-oriented society, endeavor to develop and supply products andservices that help to conserve the environment.

(4) Harmonious coexistence

As a good corporate citizen, aspiring for the prosperity of succeedingwith society

generations and positive contribution to society in general, support local
communities for environmental education and assist in basic researchpertaining to conservation of the global environment.

(5) Promotion of educational

Educate both our own employees and those of Group companies in orderactivities

to raise their awareness of environmental conservation and improve thequality and effectiveness of associated activities.
May 2010

Masahiro Okafuji
President & Chief Executive Officer

ITOCHU Corporation's stance on the environment

ITOCHU Corporation is active in Japan and internationally, offering a wide range of products and services, developing
resources, and investing in businesses. Our activities are closely related to global environment problems.
We believe that a company cannot grow sustainably without awareness of these problems. In 1990, we created a
Global Environment Department, and in April 1993, we documented our environmental activity guidelines in the
ITOCHU's Activity Guidelines on the Environment (the predecessor of our Environmental Policy). In 1997, theseguidelines were revised to the “ITOCHU Corporation Environmental Policy” and we have subsequently revised thispolicy several times, in order to keep up with changing demands over time and reflect them in the Policy's expression.
We also made the following two revisions in May 2010.
1. We changed the name from the “ITOCHU Corporation's Environmental Policy” to “The ITOCHU Group Environmental
Policy,” in order to express clearly that our commitment to environmental issues is shared throughout the ITOCHU
Group, rather than just by ITOCHU Corporation.
2. We revised the Activity Guidelines in our current Environmental Policy, in order to make it clear that ourcommitment goes a step beyond conserving ecosystems, to conserving biodiversity as well. The expression was
thus changed from “conserve ecosystems” to “conserve ecosystems and biodiversity.”96

Our Initiatives for the Environment

Environmental Management

ITOCHU Corporation has formulated an Environmental Policy covering the entire ITOCHU Group. ITOCHU is aware of
the impact that its business activities may have on the global environment. We have thus built a framework forassessing the impact of the products we handle, and in particular before making new investment, in order to prevent
environmental risk.

Environmental Management System

In 1997, ITOCHU Corporation became the first trading company to establish an environmental management system(EMS) based on ISO 14001, and we continue to work to improve our EMS. The system's aim is to comply withenvironmental laws and regulations, and take precautionary approaches to environmental pollution. Specifically, thesystem controls and manages targets through a yearly PDCA (plan-do-check-act) cycle of setting targets forpreventing environmental risk; evaluating and analyzing progress; and acting to achieve our targets.

97

Our Initiatives for the Environment

ITOCHU Corporation's environmental management organization

Our president has the ultimate responsibility for ITOCHU Corporation's environmental management organization. The
president appoints a CAO & CCO who has the authority to determine the environmental policy and environmental
management manual that form the core of our environmental management.
Concrete management work is carried out by the CSR Committee, established to review environmental policies andperform annual reviews of corporate-wide activities. The CSR Promotion & Global Environment Department of the
Corporate Communications Division serves as the CSR Committee's secretariat. Environmental managers, assigned toeach division that is subject to environmental audits (65 total in fiscal 2012), and assisted by eco-leaders (300 total asof May 31, 2011), are responsible for promoting environmental conservation in their respective divisions.

98

Our Initiatives for the Environment

Internal Environmental Audits

In fiscal 2011, In-house environmental audits based on ISO 14001 were carried out in 73 departments. Findings fromthe audits, conducted over roughly six months, are instrumental in taking precautionary approach on theenvironmental risks. Audit teams are comprised of members of the CSR Promotion & Global Environment Department
and employees qualified to serve as In-house environmental auditors (423 registered individuals). These teams carriedout their work this fiscal year as well with an emphasis on auditing legal compliance. This fiscal year marked theintroduction of a new auditing approach – a combined format in which two or three departments were audited at once.
This approach not only boosted audit efficiency but heightened audit effectiveness by encouraging mutual
understanding of other departments.

Results of External Inspections

Each year, ITOCHU is inspected by the Japan Audit and Certification Organization for Environment and Quality (JACO)
in connection to ISO 14001 certification. The fiscal 2011 inspection was to retain certification, and is performed in thefirst and second years of certification. Inspections in the third year are to renew certification, after which the cycle
repeats itself each year. The outcome of the inspection was an overall “improvement” grade and continued
certification, based on an acknowledgement of ongoing system improvement efforts by ITOCHU.

99

Our Initiatives for the Environment

Precautionary Approach to Environmental Risks

In addition to evaluating environmental risks of the products we handle, we are committed to taking a precautionary
approach to environmental risks. This commitment also extends to ITOCHU Group companies, reflecting the need to
identify the impact on the global environment of the business activities of the Group as a whole.

Evaluating Environmental Risks Posed by Products Handled

We handle a wide and diverse range of products on a global scale. We thus carry out our own original environmental
impact evaluations based on our belief that it is vital to evaluate the relationship of these products to the global
environment. We use a so-called LCA (*) -based analysis method at all stage of product life cycle from procurement of
raw materials, production, and use, through disposal of products. If the evaluation shows that the impact on the global
environment by particular products exceeds predetermined benchmarks, then we create manuals and the concrete
procedures to manage transactions of these product.
*

LCA (life-cycle assessment) is a method that evaluates the environmental impact of products at all stages of their life cycle,
from manufacturing, transport and use through to disposal and recycling or reuse.

Fact-finding investigations of Group companies

We began fact-finding investigations of our Group companies after several of themreceived complaints about environmental pollution from their surrounding
neighborhoods in 2001. We analyze about 200 of our roughly 400 Group companies (asof March 31, 2011) with relatively higher levels of impact on the global environment,
and conduct investigations of about 20 of them per year. The evaluation is made using
Q&As between auditors and management, inspections of plants, warehouses, and otherfacilities, surveys of wastewater released into rivers, and assessments of compliance
Inspecting themanagement of partscontaining regulated
substances, at our Auto
Parts Distribution Center in
the United Stateswith environmental laws and regulations.

100Our Initiatives for the Environment

Evaluating the Environmental Impact of New Investment Projects

ITOCHU Corporation and its subsidiaries in Japan employ a CSR and environmental checklist for investments toevaluate in advance the market, social and environmental impact of business investment projects entered via M&A in
Japan and overseas. When specialist insight is needed, ITOCHU calls on specialized external bodies to render anadvance inspection of the project. Action on the project then moves forward once inspection results and the presenceof no major problems are confirmed.

Environmental-Related Consultations (Year Ended March 31, 2011)

In the year ended March 31, 2011, we received a total of 36 inquiries from outside the Company, which were broken
down as follows: environmental groups (6), industry (5), government (5), ratings and evaluation agencies (5), media(5) and local citizens and others (10). The number of inquiries is increasing year by year, particularly regarding theCompany’s measures to address environmental problems. There were no environment-related incidents, problems,
lawsuits or complaints against the Company. Meanwhile, the number of consultations from within the Company and
ITOCHU Group companies has increased. Various environmental education programs have led to greater environmental
awareness among employees. We fielded 65 inquiries regarding Japan’s Waste Management and Public Cleaning Law,
16 about the Soil Contamination and Countermeasures Act, and other inquiries regarding business investments.

101

Our Initiatives for the Environment

Promotion of Environmental Education and AwarenessWe are committed to improving the environmental awareness of the entire ITOCHU Group. To encourage
environmental conservation efforts among our employees we offer a wide range of education programs, as well as
seminars on environmental law, and seminars to raise awareness of global environmental issues, which also target
Group employees.

Seminars

We actively hold seminars in order to ensure that all employees of the ITOCHU Group are aware of and comply withthe requirements of environmental laws and regulations, and in order to raise environmental awareness.

Internal seminars (fiscal 2011 results)(Number of people)
Legal seminars

Times held

Total participants

Seminars on Waste Management and Public Cleansing Law

12

791

Soil Contamination Countermeasures Act

2

217

Global Environmental Management Seminar

In January 2011, ITOCHU sponsored a seminar on the promotion of global
environmental management at the Tokyo Head Office. The seminar was led by invited
speaker Prof. Taikan Oki of the University of Tokyo’s Institute of Industrial Science, whospoke on the theme of “Water, Climate Change and the Global Environment—Finding
Solutions to Problems.” Centered on emerging global environmental issues, the lectureoffered up-to-date information on water-related issues and other concerns close to ourdaily lives. His talk also touched heavily on topics connected to ITOCHU businesses,
including water-related industries, such as desalination plants and water/wastewater
infrastructure, as well as food and energy. The seminar was heard by a large number of
employees (approximately 680), with those unable to attend later viewing an edited
version of the videotaped lecture. Ultimately, the seminar was a rich source of many
insightful suggestions as ITOCHU prepares to strategically promote businesses that
support environmental conservation going forward.

102

Prof. Taikan Oki of the
University of Tokyo’s
Institute of Industrial
Science.

Our Initiatives for the Environment

Co-existence with Society

As a good corporate citizen, aspiring for the prosperity of succeeding generations and positive contribution to society ingeneral, support local communities for environmental education and assist in basic research pertaining to conservationof the global environment.

Summer school programs on the environment

Every year since 1992, we have been organizing “Summer school programs on theenvironment” at the Tokyo Head office, mainly targeting elementary school students of
Minato Ward, Tokyo. The aim of these programs is to promote environmental education
among Japan’s next generation and coexistence with society.Now in their 19th year, thelatest edition of the programs was held in August 2010, with 45 children taking part.
The dynamic, hands-on program featured lectures and a number of experiments led
meteorologists and weathercasters around the theme of global warming.
Experiment showing rising
sea levels caused by global
warming

Supporting Center for Climate System Research, The University of Tokyo

ITOCHU has supported basic research by the University of Tokyo’s Center for Climate System Research (reorganized as
the University of Tokyo Climate System Research System from fiscal 2010) since 1991, and holds an annual “ITOCHU
Symposium” as a forum for publicizing the center’s research findings. The symposium’s 19th annual meeting was heldin January 2011 at the Osaka Head Office, and in February 2011 at the Tokyo Head Office. The research findings
focused on the problem of global warming, with Associate Prof. Kensuke Fukushi presenting a paper titled, “The Health
Risks of Climate Change—Waterborne Infections During Floods” (presented at Tokyo Head Office only), while AssociateProf. Masahiro Watanabe presented a paper titled, “Climate Change and Weather Abnormalities.” A total of around 230
people attended the two symposiums.

103Our Initiatives for the Environment

Office Activities

All employees at ITOCHU Corporation always do their best to reduce environmental impacts not only when conducting
business, but also in their office activities. We tackle environmental conservation initiatives that are achievable in our
immediate surroundings by conserving energy at our offices and recycling waste. The following outline some examplesof those efforts:

Participation in “Challenge 25 Campaign”

ITOCHU Corporation is a participant in the national “Challenge 25 Campaign(*) ” to mitigate global warming. This campaign includes such initiatives asadjusting the air conditioning temperatures during the summer and winter,turning off lights when they are not needed, and setting computers to a"hibernation" mode when away from the desk for extended periods. It also
encourages the separation of trash inside the office and promotes recycling.
As a result, all employees act to protect the environment starting with thelittle things around them every day.
*

The name was changed in January 2010 from “Team Minus 6%” to “Challenge
25 Campaign”

Environmental Conservation at the Tokyo Headquarters Building

ITOCHU Tokyo Headquarters Building consumes the largest volume of energy among all of its offices. You will find thefollowing figures explaining the electricity consumption, total waste, recycled waste volume, usage of water resources
and so forth in Tokyo Headquarters from FY2007 to 2010.

104

Our Initiatives for the Environment

Solar power generation
We installed solar panels on the roofs of our TOKYO headquarters and the adjacent CI Plaza. It has started to generate
electricity since March 2010. The capacity of generation for solar panels is total 100kw which is equivalent to prevailing30 detached house (approximately 3.0kw per detached house). We make use of all clean energy generated solar
power in our TOKYO headquarters and it regards as electric energy (Maximum power generation at moment) covered
3.5 floors lighting.

Electricity Consumption
The table below shows the volume of electricity consumption in Tokyo Headquarters from FY2007 to 2010. We
implemented energy-saving measures such as the installation of inverters for the heating, cooling and ventilation
system, and promoted individual involvement in turning off lights and office equipment. In FY2010, we reduced theelectricity consumption by 4.6%, compared to FY2009.

Year (FY)

Consumption volume

Reduction rate compared to the previous fiscal(MWH)

year (%)

2007

13,765

5.6%

2008

13,472

2.1%

200913,253

1.6%

2010

12,644

4.6%

Volume of Waste and Recycled Waste
The table below shows the total volume of waste, amount of waste recycled, etc. in Tokyo Headquarters from FY 2007
to 2010. The recycling rate has been improving due to individual efforts such as enforcing waste separation.

Year (FY)

Total waste

Amount of waste

Amount of waste

Recycling

volumedisposedrecycled

rate

2007

904 tons

138 tons

766 tons

85%

2008

832 tons

101 tons

731 tons

87.8%

2009

1,013 tons

106 tons

907 tons

89.5%

2010

1,074 tons

106 tons

967 tons

90.1%

105

Our Initiatives for the Environment

Effective Use of Water Resources
Since the treatment facilities for recovered water (gray water, rainwater and spring water) were installed when theTokyo Headquarters was built in 1980, recovered water have been effectively utilized to flush the toilets. The tablebelow shows the amount of water usage in Tokyo Headquarters from FY2007 to 2010.
The change on amount of securing gray water may be caused by the rainfall every year so that city water usage tends
to increase when the rainfall is a little.
Therefore, we take care of saving water to install the devise for economize hand washing water and flushing in toilets.
(Unit: m3)
Year (FY)City water usage

Gray water production

2007

39,604

43,122

2008

48,51437,505

2009

52,56737,3302010

46,53233,553

Tokyo Metropolitan Government Program to prevent Global Warming
ITOCHU Corporation submitted Greenhouse Gas Emission Reduction Plan for FY2006 to 2010 to Tokyo Metropolitan
Government, in accordance with their Ordinance on Environmental Conservation. In the plan, we committed to reduce
CO2 emissions in the Tokyo Headquarters by 4.1% , compared to the benchmark( the average of annual CO2
emissions from FY2003 to 2005), during the period between FY2006 and FY2010. ITOCHU emitted 7,549 tons of CO2
in FY2010 with the reduction rate 18%, compared to the amount of the benchmark.
Those below submitted to Tokyo Metropolitan Government are available in Japanese below.
Greenhouse Gas Emission Reduction Plan for FY2006 to 2010 (Submitted in Dec.2005) (Japanese Only)
Report on Greenhouse Gas Emission for FY2006 (Submitted in June 2006) (Japanese Only)
Mid-term Report (Submitted in June 2007) (Japanese Only)
Report on Greenhouse Gas Emission for FY2008 (Submitted in June 2008) (Japanese Only)
Report on Greenhouse Gas Emission for FY2009 (Submitted in June 2009) (Japanese Only)
Report on Greenhouse Gas Emission (Submitted in June 2010) (Japanese Only)*

The plan submitted to Tokyo Metropolitan Government for greenhouse gas emission reduction includes not only the Tokyo
Headquarters, but also the adjacent commercial facility, “CI PLAZA”.

106

Third-Party Opinion
This third party opinion was written based on the content of the ITOCHU Corporation
CSR Report 2011, and interviews with ITOCHU personnel from three Division
Companies, namely the ICT & Machinery Company, the Food Company, and theChemicals, Forest Products & General Merchandise Company, as well as personnel withresponsibilities in the areas of compliance, human resources, the environment, logistics
and CSR.
In my opinion, ITOCHU has begun to implement PDCA management cycles in its CSR
activities across an expansive range of subjects. These items range from measures toreduce the environmental impact of operations to efforts to promote and enhancediversity in the workforce.

Hideto Kawakita
Chief Executive Officer
International Institute for
Human, Organization and theEarth (IIHOE)

Areas of Excellence

In regard to strengthening compliance, ITOCHU has prepared and distributed a Compliance Handbook based on
concrete examples covering a wide range of subjects. The Company conducted a test to confirm understanding ofhandbook contents via an e-learning module, and has launched Group-wide expansion initiatives. Looking ahead, we
hope that ITOCHU will increase case examples and training regarding knowledge and responses required in each field
and business. We also hope that ITOCHU starts actively opening lines of reporting from outside the company.
In regard to the promotion and enhancement of diversity in the workforce, ITOCHU has been advancing a global
human resources strategy since fiscal 2008. The Company has taken proactive measures and put in place a system forachieving truly global management and organizational frameworks. For example, it has used the ITOCHU Global
Classification (IGC) as a common measure of job level/level of responsibility for all jobs and positions worldwide. At thesame time, it has amassed a database of management personnel at overseas subsidiaries in various countries aroundthe world.
In regard to providing even more comfortable working conditions that enable employees to continue their careers, wehighly commend the fact that 6.14% of all ITOCHU employees were able to take advantage of leave, holidays, orshorter working hours to provide child care, or nursing care for infirm or elderly family members. We hope that similar
programs will spread throughout the rest of the ITOCHU Group. We particularly hope to see the Company increase thenumber of program participants and raise the level of understanding and support for such programs, by providing
examples of employees using nursing care programs. Such employees are expected to grow in number going forward.
Similarly, in regard to providing comfortable working environments for employees, ITOCHU offers health management
support to employees with regard to mental health. There is a system in place whereby employees in their 2nd, 4th
and 10th year at the Company have the opportunity to receive counseling during one-hour interviews.

Areas Where Progress is Recognized Yet Further Efforts Are Desired

The reduction of the environmental impact of one's business, including reducing CO2 emissions at business partners,
has become a key issue for companies across the globe. Accordingly, we hope that, as an important common priority
for all Division Companies, ITOCHU will disclose results on how far it has reduced its environmental impact so far, andits forecasts regarding the extent of future reductions in environmental impact over the medium term.
Regarding the promotion of CSR initiatives in supply chains, ITOCHU conducts traceability surveys of 100 paper, pulp
and wood material suppliers—almost all of its suppliers in these fields. ITOCHU conducts on-site surveys of 79 of these
suppliers. While applauding these efforts, we hope that ITOCHU will obtain a more detailed understanding of theactivities of its suppliers, and develop survey questions that encourage the suppliers themselves to identify issues anddevelop solutions. We also hope that ITOCHU will develop a system for recognizing suppliers that conduct outstanding107

Third-Party Opinion

activities with awards and sharing best practices with other companies.
In regard to reducing environmental impact, we commend ITOCHU's fact-finding surveys of Group companies, whichtarget roughly 20 such companies a year. At the same time, we hope for greater disclosure of information on theactivities of each company in order to encourage Group companies to reduce their environmental impact and work topreserve the environment on their own initiative.
In regard to social contribution activities through its businesses, we highly commend ITOCHU's progress with efforts tooptimally utilize food resources. For example, the ITOCHU Food Company has developed deli pastries using pork grownon feed produced from recycled unsold boxed lunches and bread from supermarkets and convenience stores. Canned
food products have also been donated to organizations operating food banks. We hope that similar perspectives andinitiatives are implemented by ITOCHU's other Division Companies.

Areas Where Further Efforts Are Desired

We understand that ITOCHU, despite being a single entity, is general trading company and as such operates on front
lines all over the world through a multitude of varying business models. We also understand that this makes the global
application of a uniform CSR management policy across all operations difficult. However, we hope that in its major
business models ITOCHU can find certain elements of its CSR management that can be standardized or shared acrossdifferent task areas to allow for a more comprehensive approach, be it as part of aggressive CSR initiatives, or a moredefensive tack.

Hideto Kawakita, Chief Executive Officer
International Institute for Human, Organization and the Earth (IIHOE)

Organization Profile:
Established in 1994, IIHOE is a non-profit organization (NPO) dedicated to promoting "balanced and democratic
development for all life on earth." Alongside its main activity of providing management support to civic groups andsocial entrepreneurs, IIHOE also offers CSR-related support to leading companies.

108

Third-Party Opinion

Response to Third Party Opinion
ITOCHU conducts businesses in a wide range of areas all over the world. As such,
the Company faces markedly different social issues depending on the industry
and region. Therefore, having established basic policies for CSR promotion for
the entire company, CSR activities are promoted by each of ITOCHU'sorganizations in Japan and overseas, including business divisions, centered on
our five Division Companies, and administrative divisions. In this process, theseorganizations identify material issues they face, formulate CSR action plans, andimplement CSR activities according to PDCA management cycles.
In response to this third party opinion, ITOCHU will seek to incorporate several
initiatives into its CSR activities, including providing disclosure of more detailed information to stakeholders,and promoting development of best practices and progressive initiatives throughout the Company, as it strives
to increase the precision of these activities. At the same time, we will continue to enhance two aspects of our
CSR activities that were highly commended, namely compliance and employee relations, while continuing tolisten carefully to the opinions of employees on the front-lines.
Almost all business models of general trading companies are premised on collaboration with business partners,
not standalone operations by a parent company like ITOCHU. We recognize that in promoting CSR, we mustalso work tirelessly to foster an understanding of ITOCHU's principles and policies, as well as activities, among
our customers and business partners. Accordingly, we will work to prepare reports and disclose informationfrom the readers' perspective.
Looking ahead, we will redouble our efforts in regards to strengthening communication with stakeholders
through a front-line approach, one of our basic policies for CSR promotion. Through these efforts, we aim to
help realize a sustainable society by deepening dialogue with the diverse array of stakeholders we face in eachindustry, while sharing a common understanding of issues and building shared values. As such a corporate
citizen, we will continue working to fulfill the ITOCHU Mission–“Committed to the Global Good.”
Yoshio Akamatsu
Director
Senior Managing Executive Officer
CAO & CCO

109

GRI GuidelineGC
Principles

Item

Indicator

DigestFull
ReportWEB

1 Strategy and Analysis
1.1Statement from the most seniordecisionmaker of the organization (e.g.,CEO, chair, or equivalent senior position)
about the relevance of sustainability tothe organization and its strategy.

3-4

2-3

President's
Commitment

1.2

Description of key impacts, risks, andopportunities.

1
3-4

2-3
11

President's
Commitment
Stakeholder
Relations

2 Organizational Profile
2.1

Name of the organization.

18

120

Corporate Profile

2.2

Primary brands, products, and/or
services.

13

22-41

CSR and Our
Business

2.3

Operational structure of the organization,
including main divisions, operatingcompanies, subsidiaries, and joint
ventures.

13

22-41

CSR and Our
Business

2.4

Location of organization's headquarters.

18

120

Corporate Profile

2.5

Number of countries where theorganization operates, and names ofcountries with either major operations orthat are specifically relevant to thesustainability issues covered in thereport.

18

120

Corporate Profile

2.6

Nature of ownership and legal form.

18

120

Corporate Profile

2.7

Markets served (including geographic
breakdown, sectors served, and types ofcustomers/beneficiaries).

13
18

22-41
120

Corporate Profile
CSR and Our
Business

2.8

Scale of the reporting organization,
including:Number of employees;
Net sales (for private sector
organizations) or net revenues (forpublic sector organizations);
Total capitalization broken down interms of debt and equity (for private
sector organizations); andQuantity of products or services
provided.

18

22-41
120

CSR and Our
Business
Corporate Profile
Financial
Statements

2.9

Significant changes during the reporting
period regarding size, structure, orownership including:
The location of, or changes inoperations, including facility openings,
closings, and expansions; andChanges in the share capital structure
and other capital formation,
maintenance, and alteration
operations (for 0private sector
organizations).

18

120

News Release(Relocation of the
Osaka
Headquarters)

2.10

Awards received in the reporting period.

15

63News Releases

Reporting period (e.g., fiscal/calendar
year) for information provided.

1

1

3 Report Parameters
Report Profile
3.1

110

GRI Guideline

3.2

Date of most recent previous report (if
any).

1

1

3.3

Reporting cycle (annual, biennial, etc.)

1

1

3.4

Contact point for questions regarding thereport or its contents.

1

1

Report Scope and Boundary
3.5

Process for defining report content,
including:
Determining materiality;
Prioritizing topics within the report;
and
Identifying stakeholders theorganization expects to use the report.

1

1

3.6

Boundary of the report (e.g., countries,
divisions, subsidiaries, leased facilities,
joint ventures, suppliers).

1

1

3.7

State any specific limitations on the scopeor boundary of the report.

-

-

N/A

3.8

Basis for reporting on joint ventures,subsidiaries, leased facilities, outsourced
operations, and other entities that cansignificantly affect comparability fromperiod to period and/or between
organizations.

-

-

N/A

3.9

Data measurement techniques and thebases of calculations, including
assumptions and techniques underlying
estimations applied to the compilation of
the Indicators and other information in
the report.

18

120

3.10

Explanation of the effect of any restatements of information provided inearlier reports, and the reasons for such
re-statement (e.g., mergers/
acquisitions, change of baseyears/periods, nature of business,measurement methods).

-

-

N/A

3.11

Significant changes from previous
reporting periods in the scope, boundary,or measurement methods applied in thereport.

-

-

N/A

3.12

Table identifying the location of theStandard Disclosures in the report.

1110119GRI Comparative
Table

3.13

Policy and current practice with regard toseeking external assurance for the report.
If not included in the assurance reportaccompanying the sustainability report,
explain the scope and basis of any
external assurance provided. Also explain
the relationship between the reportingorganization and the assurance provider(s).

-107109

Third-Party Opinion

GRI content index

Assurance

4 Governance, Commitments, and Engagement
Governance
4.1

Governance structure of the organization,
including committees under the highest
governance body responsible for specifictasks, such as setting strategy ororganizational oversight.

14

42-52

Corporate
Governance

4.2

Indicate whether the Chair of the highest

14

42-52

Corporate

111

GRI Guideline

governance body is also an executive
officer (and, if so, their function within
the organization's management and thereasons for this arrangement).

Governance

4.3

For organizations that have a unitaryboard structure, state the number ofmembers of the highest governance bodythat are independent and/or nonexecutive members.

14

42-52

Corporate
Governance

4.4

Mechanisms for shareholders andemployees to provide recommendations
or direction to the highest governance
body.

14

42-52
65-66

Corporate
GovernanceCommunications
with Employees

4.5

Linkage between compensation formembers of the highest governancebody, senior managers, and executives(including departure arrangements), andthe organization's performance (including
social and environmental performance).

--

Financial Report
P59 (Japanese
only)(1,258KB)

4.6

Processes in place for the highest
governance body to ensure conflicts ofinterest are avoided.

14

42-52

Corporate
Governance

4.7

Process for determining the qualifications
and expertise of the members of thehighest governance body for guiding theorganization's strategy on economic,
environmental, and social topics.

14

42-52

Corporate
Governance

4.8

Internally developed statements ofmission or values, codes of conduct, andprinciples relevant to economic,
environmental, and social performanceand the status of their implementation.

2

6

ITOCHU Mission

4.9

Procedures of the highest governancebody for overseeing the organization's
identification and management of
economic, environmental, and social
performance, including relevant risks andopportunities, and adherence orcompliance with internationally agreed
standards, codes of conduct, andprinciples.

2, 14

6
42-52

The United Nations
Global Compact
Corporate
Governance

4.10

Processes for evaluating the highest
governance body's own performance,
particularly with respect to economic,
environmental, and social performance.

--

Commitments to External Initiatives
4.11

Explanation of whether and how the
precautionary approach or principle isaddressed by the organization.

2, 14

6
42-52

The United Nations
Global Compact
Corporate
Governance

4.12

Externally developed economic,
environmental, and social charters,
principles, or other initiatives to which
the organization subscribes or endorses.

2

6

The United Nations
Global Compact

4.13

Memberships in associations (such asindustry associations) and/or
national/international advocacy
organizations in which the organization:
Has positions in governance bodies;
Participates in projects or committees;
Provides substantive funding beyondroutine membership dues; orViews membership as strategic.

2

6

The United Nations
Global Compact

1

11

Stakeholder

Stakeholder Engagement
4.14

List of stakeholder groups engaged by112

GRI Guideline

the organization.

Relations

4.15

Basis for identification and selection of
stakeholders with whom to engage.

1

11

Stakeholder
Relations

4.16

Approaches to stakeholder engagement,
including frequency of engagement by
type and by stakeholder group.

1
11-13
15-16

20-21
53-56
22-41
57-68
69-94

CSR in Our Supply
Chain
CSR and Our
Business
Employee Relations
Social Contribution
Investor Relations

4.17

Key topics and concerns that have beenraised through stakeholder engagement,
and how the organization has responded
to those key topics and concerns,
including through its reporting.

1
11-13
15-16

20-21
53-56
22-41
57-68
69-94

CSR in Our Supply
Chain
CSR and Our
Business
Employee Relations
Social Contribution
Investor Relations

18

120

Financial
Statements

5 Management Approach and Performance Indicators
Economic
Disclosure on Management Approach
Aspect: Economic Performance

Principle 7

EC1

Direct economic value generated anddistributed, including revenues, operating
costs, employee compensation, donations
and other community investments,
retained earnings, and payments tocapital providers and governments.

5, 16

4
69-94

Steps Taken Afterthe Great East
Japan Earthquake
Social Contribution
Financial Report P2,
15, 43, 47(Japanese only)(1,258KB)

EC2Financial implications and other risks andopportunities for the organization's
activities due to climate change.

9-10

18-19

Financial Report
P26 (Japanese
only)(1,258KB)

EC3Coverage of the organization's defined
benefit plan obligations.

--

Financial Report
P100 (Japanese
only)(1,258KB)

EC4Significant financial assistance received
from government.

--

Aspect: Market Presence
Principle 1

Principle 6EC5Range of ratios of standard entry level
wage compared to local minimum wage
at significant locations of operation.

-

-

-

EC6

Policy, practices, and proportion of
spending on locally-based suppliers at
significant locations of operation.

16

53-56

ITOCHU
Corporation's CSR
Action Guidelines
for Supply Chains

EC7

Procedures for local hiring and proportionof senior management hired from thelocal community at locations of significant
operation.

15

57-68

Employee Relations

18-19
22-41
70-72

Taking on the
Challenge ofRenewable Energy
CSR and Our
Business
Social Contribution
Activities

Aspect: Indirect Economic Impacts
EC8Development and impact of infrastructure
investments and services provided
primarily for public benefit throughcommercial, inkind, or pro bono
engagement.

9-10
13,16

EC9

Understanding and describing significant
indirect economic impacts, including the

-

113

-

GRI Guideline

extent of impacts.
Environmental
Disclosure on Management Approach17

95-106

Environmental
Activities Policies

Aspect: Materials
Principle 8

EN1

Materials used by weight or volume.

-

-

-

Principle 8,9EN2

Percentage of materials used that arerecycled input materials.

-

-

-

104106

Office Activities(Applicable toTokyo
headquarters)

Aspect: Energy
Principle 8

EN3

Direct energy consumption by primaryenergy source.

-

Principle 8

EN4

Indirect energy consumption by primaryenergy source.

-

Principle 8,9EN5Energy saved due to conservation andefficiency improvements.

-

104106

Office Activities(Applicable toTokyo
headquarters)

Principle 8,9EN6

Initiatives to provide energy-efficient or
renewable energy based products andservices, and reductions in energy
requirements as a result of these
initiatives.

9-10

18-19

Taking on the
Challenge ofRenewable Energy

Principle 8,9EN7

Initiatives to reduce indirect energy
consumption and reductions achieved.

-

Principle 8

EN8

Total water withdrawal by source.

-

104106

Principle 8EN9Water sources significantly affected bywithdrawal of water.

--

Principle 8,9EN10Percentage and total volume of water
recycled and reused.

-

104106

Office Activities(Applicable toTokyo
headquarters)-

Aspect: Water
Office Activities(Applicable toTokyo
headquarters)

Aspect: Biodiversity
Principle 8

EN11

Location and size of land owned, leased,managed in, or adjacent to, protectedareas and areas of high biodiversity value
outside protected areas.

16

81-93

Activities to Restore
the TropicalRainforests andConserve Borneo's
Ecosystem

Principle 8

EN12

Description of significant impacts ofactivities, products, and services on
biodiversity in protected areas and areasof high biodiversity value outside
protected areas.

16

81-93

Activities to Restore
the TropicalRainforests andConserve Borneo's
Ecosystem

Principle 8

EN13

Habitats protected or restored.

16

81-93

Activities to Restore
the TropicalRainforests andConserve Borneo's
Ecosystem

Principle 8

EN14Strategies, current actions, and futureplans for managing impacts on
biodiversity.

17

95-106

Environmental
Activities Policies

Principle 8

EN15

Number of IUCN Red List species andnational conservation list species with
habitats in areas affected by operations,

-

-

114

GRI Guideline

by level of extinction risk.
Aspect: Emisions, Effluents, and Waste
Principle 8

EN16

Total direct and indirect greenhouse gas
emissions by weight.

-

104106

Office Activities(Applicable toTokyo
headquarters)

Principle 8

EN17

Other relevant indirect greenhouse gas
emissions by weight.

-

Principle 7,
8, 9

EN18

Initiatives to reduce greenhouse gas
emissions and reductions achieved.

-104106

Office Activities(Applicable toTokyo
headquarters)

Principle 8

EN19

Emissions of ozone-depleting substances
by weight.

-

Principle 8EN20

NOx, SOx, and other significant air
emissions by type and weight.

-

Principle 8

EN21

Total water discharge by quality anddestination.

-

104106

Office Activities(Applicable toTokyo
headquarters)

Principle 8

EN22

Total weight of waste by type anddisposal method.

-

104106

Office Activities(Applicable toTokyo
headquarters)

Principle 8

EN23

Total number and volume of significant
spills.

--Principle 8

EN24

Weight of transported, imported,
exported, or treated waste deemedhazardous under the terms of the Basel
Convention Annex I, II, III, and VIII, andpercentage of transported waste shippedinternationally.

--

Principle 8

EN25

Identity, size, protected status, andbiodiversity value of water bodies andrelated habitats significantly affected by
the reporting organizationÅfs discharges
of water and runoff.

--

Aspect: Products and Services
Principle 7,
8, 9

EN26

Initiatives to mitigate environmental
impacts of products and services, andextent of impact mitigation.

9-10
13

18-19
22-41

Taking on the
Challenge ofRenewable Energy
CSR and Our
Business

Principle 8,9EN27

Percentage of products sold and theirpackaging materials that are reclaimed
by category.

13

22-41

CSR and Our
Business

Monetary value of significant fines andtotal number of non-monetary sanctions
for noncompliance with environmental
laws and regulations.

-

-

-

Significant environmental impacts oftransporting products and other goods
and materials used for the organization's
operations, and transporting members of
the workforce.

-

22
39-40

CSR at the
Headquarters
Business
Organization

Total environmental protection
expenditures and investments by type.

-

Aspect: Compliance
Principle 8

EN28

Aspect: Transport
Principle 8

EN29

Aspect: Overall
Principle 7,
8, 9

EN30

115

-

GRI Guideline

Labor Practices and Decent Work
Disclosure on Management Approach

3-4
15

2-3
65-66

President's
Commitment
Communications
with Employees

LA1

Total workforce by employment type,
employment contract, and region.

15

57-68

Employee Relations

LA2

Total number and rate of employee
turnover by age group, gender, andregion.

15

-

-

LA3

Benefits provided to full-time employeesthat are not provided to temporary or
part-time employees, by major
operations.

--

ITOCHU
Recruitment(Japanese only)

Communications
with Employees

Aspect: Employment

Principle 6

Aspect: Labor/Management Relations
Principle 1,
3

LA4

Percentage of employees covered bycollective bargaining agreements.

-

65-66

Principle 3

LA5

Minimum notice period(s) regarding
operational changes, including whether it
is specified in collective agreements.

--

Aspect: Occupational Health and Safety
Principle 1

LA6

Percentage of total workforce represented
in formal joint management_worker
health and safety committees that help
monitor and advise on occupational
health and safety programs.

-

-

-

Principle 1

LA7

Rates of injury, occupational diseases,
lost days, and absenteeism, and numberof workrelated fatalities by region.

-

-

-

Principle 1

LA8

Education, training, counseling,
prevention, and risk-control programs inplace to assist workforce members, theirfamilies, or community members
regarding serious diseases.

-

62-64

Providing
Comfortable
Working
Environment for
Employees

Principle 1

LA9Health and safety topics covered informal agreements with trade unions.

-

-

-

Aspect: Training and Education
LA10

Average hours of training per year per
employee by employee category.

-

58-60

Employee Relations

LA11

Programs for skills management andlifelong learning that support thecontinued employability of employees andassist them in managing career endings.

-

58-60

Employee Relations

LA12

Percentage of employees receiving
regular performance and careerdevelopment reviews.

-

58-60

Employee Relations

15

67-68

Promoting Human
Resources
Diversification inJapan

Aspect: Diversity and Equal Opportunity
Principle 1,
6

LA13

Composition of governance bodies andbreakdown of employees per category
according to gender, age group, minority
group membership, and other indicatorsof diversity.

Principle 1,
6

LA14

Ratio of basic salary of men to women by
employee category.

-

Human Rights
Disclosure on Management Approach

116

16

12-13

Respect for Human
RightsGRI Guideline

Aspect: Investment and Procurement PracticePrinciple 1,
2, 3, 4, 5, 6

HR1

Percentage and total number ofsignificant investment agreements that
include human rights clauses or that haveundergone human rights screening.

--

Principle 1,
2, 3, 4, 5, 6

HR2

Percentage of significant suppliers andcontractors that have undergone
screening on human rights and actions
taken.

16

20-21
53-56

CSR in Our Supply
Chain

Principle 1,
2, 3, 4, 5, 6

HR3

Total hours of employee training on
policies and procedures concerning
aspects of human rights that are relevant
to operations, including the percentage of
employees trained.

-

12-13

Respect for Human
RightsAspect: Non-Discrimination
Principle 1,
2, 6

HR4

Total number of incidents of
discrimination and actions taken.

--

Operations identified in which the right toexercise freedom of association andcollective bargaining may be at significant
risk, and actions taken to support theserights.

--Operations identified as having significant
risk for incidents of child labor, andmeasures taken to contribute to theelimination of child labor.

16

6
20-21
53-56

ITOCHU Mission
CSR in Our Supply
Chain

16

6
20-21
53-56

ITOCHU Mission
CSR in Our Supply
Chain

-

12-13

Respect for Human
RightsAspect: Freedom of Association and Collective Bargaining
Principle 1,
2, 3

HR5

Aspect: Child Labor
Principle 1,
2, 5

HR6

Aspect: Forced and Compulsory Labor
Principle 1,
2, 4

HR7

Operations identified as having significant
risk for incidents of forced or compulsory
labor, and measures to contribute to theelimination of forced or compulsory labor.

Aspect: Security Practices
Principle 1,
2

HR8

Percentage of security personnel trainedin the organization's policies orprocedures concerning aspects of humanrights that are relevant to operations.

Aspect: Indigenous Rights
Principle 1,
2

HR9

Total number of incidents of violations
involving rights of indigenous people andactions taken.

-

Disclosure on Management Approach

2, 16

-

Society
6-16
69-94

CSR for ITOCHU
Corporation
Social Contribution

Aspect: Community
SO1

Nature, scope, and effectiveness of any
programs and practices that assess andmanage the impacts of operations oncommunities, including entering,
operating, and exiting.

-

Aspect: Corruption
Principle 10

SO2

Percentage and total number of business
units analyzed for risks related tocorruption.

-

Principle 10

SO3

Percentage of employees trained inorganization's anti-corruption policies and

-

117

-

-

GRI Guideline

procedures.
Principle 10

SO4

Actions taken in response to incidents ofcorruption.

--

Aspect: Public Policy
Principle 1,
2, 3, 4, 5,
6, 7, 8, 9,
10SO5Public policy positions and participation in
public policy development and lobbying.

--

Principle 10

SO6

Total value of financial and in-kind
contributions to political parties,
politicians, and related institutions bycountry.

--

Total number of legal actions for
anticompetitive behavior, anti-trust, andmonopoly practices and their outcomes.

--

Monetary value of significant fines andtotal number of non-monetary sanctions
for noncompliance with laws andregulations.

--

Aspect: Anti-Competitive Behavior
SO7

Aspect: Compliance
SO8

Product Responsibility
Disclosure on Management Approach-

Aspect: Customer Health and Safety
Principle 1

PR1

Life cycle stages in which health andsafety impacts of products and services
are assessed for improvement, andpercentage of significant products andservices categories subject to suchprocedures.

--

Principle 1

PR2

Total number of incidents of noncompliance with regulations andvoluntary codes concerning health andsafety impacts of products and services
during their life cycle, by type ofoutcomes.

--

Aspect: Product and Service Labeling
Principle 8

PR3Type of product and service information
required by procedures, and percentage
of significant products and services
subject to such information requirements.

--

Principle 8

PR4

Total number of incidents of noncompliance with regulations andvoluntary codes concerning product andservice information and labeling, by typeof outcomes.

-

-

PR5

Practices related to customer satisfaction,
including results of surveys measuring
customer satisfaction.

--

Aspect: Marketing Communications
PR6

Programs for adherence to laws,
standards, and voluntary codes related tomarketing communications, including
advertising, promotion, and sponsorship.

-

-

PR7

Total number of incidents of noncompliance with regulations andvoluntary codes concerning marketing
communications, including advertising,promotion, and sponsorship by type ofoutcomes.

-

-

118

GRI Guideline

Aspect: Customar Privacy
Principle 1

PR8

Total number of substantiated complaints
regarding breaches of customer privacy
and losses of customer data.

--

Monetary value of significant fines fornoncompliance with laws and regulations
concerning the provision and use of
products and services.

--

Aspect: Compliance
PR9

119

Corporate Profile
Corporate name
FoundedIncorporated
Headquarters*1

President & CEO
Capital
Number of offices*2

Number of
employees*3
Tokyo Headquarters

ITOCHU Corporation
1858
December 1, 1949
Tokyo: 5-1, Kita-Aoyama 2-chome, Minato-ku, Tokyo
107-8077, Japan
Osaka: 1-3 Umeda 3-chome, Kita-ku, Osaka 530-8448
Masahiro Okafuji¥202,241 million
Domestic offices 9Overseas offices 117
North America 9 Latin America 10 Europe 18
Africa 5 Middle East 17 Oceania 5
ASEAN, Southwest Asia 21 East Asia 24 CIS 8
Consolidated 62,635 Non-consolidated 4,301(As of March 31, 2011)

Osaka Headquarters(North Gate Building)*1 Osaka Headquarters relocated in August 2011
*2 Number of offices as of April 1, 2011
*3 The number of consolidated employees is based on actual working employees excluding temporary staff.

Financial Overview
Total Trading Transactions

Net Income

Consolidated(Billions of Yen)

12,00011,556.8 11,729.1

Consolidated

Non-consolidated (Billions of Yen)
250

14,000Total Trading Transactions by Division Company(Consolidated)
Non-consolidated

217.3

12,065.1
11,392.6200

10,306.8

165.4

6,000

Chemicals,
Forest Products &General Merchandise
Company 18.3%

128.2

5,912.8

5,600.7100

5,027.0
3,842.7

4,000

Machinery Company 7.4%

161.0

150

8,000

Textile Company 5.2%

Finance, Realty,
Insurance & Logistics
Services Company
1.6%

ICT, Aerospace &Electronics Company
5.2%

Food Company
27.2%

175.9

10,000

Other 1%

Energy, Metals &Minerals Company
34.1%(Years ended March 31, 2011)

93.4
77.1

4,310.4

74.2
64.4

Revenue by Region (Consolidated)

63.5

50

2,000

Other 10.1%
Australia 5.8%

0

2007

2008

2009

2010

2011

(Years ended March 31)

0

2007

2008

2009

2010

2011

(Years ended March 31)

Notes:• The financial data of ITOCHU Corporation are presented in accordance with U.S. GAAP.
• “Total trading transactions” is presented in accordance with Japanese accounting practice, and consists of sales withrespect to transactions in which the companies act as principal and the total amount of transactions in which thecompanies act as an agent.
• “Revenue” is attributed to countries based on the locations of the assets.

120

United States
10.3%

Japan 73.8%(Years ended March 31, 2011)