Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Resource Circulation
• Biodiversity
• Human Rights
• Employee Well-being
• Governance

Environmental Achievements

• Reduced electricity consumption by 4.6% compared to FYE 2020 levels at Tokyo and Osaka headquarters and branches in Japan.
• Achieved a 93.4% recycling rate at Tokyo headquarters.
• Reduced paper consumption by 38% compared to FYE 2019 levels at ITOCHU Corporation.
• Switched Tokyo Head Office to real CO2-free electricity.
• Launched RENU project aiming to realize a circular economy in the textile industry.
• Developed garbage bags and shopping baskets made with marine plastics.

Social Achievements

• Reduced annual average overtime hours by 11% compared to before the introduction of the morning-focused working system.
• Implemented Dress-down Days initiative.
• Introduced initiatives to support balancing cancer care and work.
• Supported a project to reintroduce manatees into the wild in the Amazon.
• Supported the Project for Protecting Green Turtles, an Endangered Species.

Governance Achievements

• Maintained Board diversity with one-third or more outside directors and women representation.
• Implemented a robust risk management system.
• Established a Whistleblowing Compliance Management System.

Climate Goals & Targets

Environmental Challenges

• Climate change impacts on agricultural and forestry-related harvests.
• Transition risks related to fossil fuels.
• Supply chain disruptions.
• Water stress in certain regions.

Mitigation Strategies

• Diversifying producing areas for agriculture.
• Investing in renewable energy and new energy sources (hydrogen, ammonia).
• Strengthening supply chain resilience.
• Improving water efficiency and reducing water consumption.
• Implementing due diligence for investments and financing projects.

Supply Chain Management

Supplier Audits: Surveys and questionnaires on more than 50 major suppliers annually.

Responsible Procurement

• Sustainability Action Guidelines for Supply Chains
• Product certifications (e.g., FSC, MSC, RSPO)
• Traceability systems

Climate-Related Risks & Opportunities

Physical Risks

• Abnormal weather (droughts, floods, typhoons)
• Reduced agricultural yields

Transition Risks

• Reduced demand for fossil fuels
• Increased costs due to carbon taxes and CCS

Opportunities

• Increased demand for renewable energy
• Development of new energy sources (hydrogen, ammonia)

Reporting Standards

Frameworks Used: GRI Standards, TCFD Recommendations, UN Global Compact

Certifications: ISO 14001

Third-party Assurance: KPMG AZSA Sustainability Co., Ltd.

UN Sustainable Development Goals

• Goal 7: Affordable and clean energy
• Goal 12: Responsible consumption and production
• Goal 13: Climate action
• Goal 14: Life below water
• Goal 15: Life on land

ITOCHU's initiatives contribute to these goals through renewable energy investments, waste reduction and recycling, climate change mitigation, and biodiversity conservation.

Sustainable Products & Innovation

• Recycled polyester (RENU project)
• Garbage bags made from marine debris
• Shopping baskets made from marine plastic waste
• Smart Star energy storage systems

Awards & Recognition

• Minato Ward Waste Reducing Business Operator Commendation (Tokyo Headquarters)

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Several well-known brands adopted recycled materials from the RENU project (a circular economy initiative in the textile industry).
• Achieved 100% handling ratio of certified or high-level management confirmed materials (ahead of schedule) in sustainable forest resources.
• Developed garbage bags and shopping baskets made with marine plastics.
• Developed recycling technology for multi-layer film packing materials.

Social Achievements

• Reduced annual average overtime hours by 11% compared to before the introduction of the morning-focused working system.
• Positive answer rate to the “employee engagement” item in the FYE 2019 engagement survey was 76%.
• Job turnover due to cancer and long-term illnesses continues to be 0%.
• Increased the number of customers and loan balance in retail finance business in the Philippines and Indonesia.

Governance Achievements

• Maintained the diversity of the Board of Directors (one third or higher percentage of outside Directors).
• Maintained a majority of the members of the Governance and Remuneration Committee and Nomination Committee coming from outside the company.
• Registered with the Whistleblowing Compliance Management System.

Climate Goals & Targets

Environmental Challenges

• Obsolescence of existing business models resulting from the emergence of new technologies.
• Labor shortage in developed countries.
• Reduction in demand for fossil fuels due to business restrictions on greenhouse gas emissions.
• Damage to business due to the increase in abnormal weather.
• Impact of opposition movement resulting from the occurrence of an environmental problem.
• Occurrence of business continuity risk or unexpected loss resulting from the malfunction of corporate governance or internal control.

Mitigation Strategies

• Utilizing new technologies for optimizing human resources and logistics.
• Strengthening supply structures that can adapt to abnormal weather.
• Promoting work style reform.
• Increasing renewable energy and other business opportunities.
• Winning customer trust or creating new businesses with a stable supply of environmentally friendly resources and materials.
• Establishing a firm governance system.

Supply Chain Management

Supplier Audits: More than 50 major suppliers a year

Responsible Procurement

• Sustainability Action Guidelines for Supply Chains
• Supplier-specific codes of conduct
• Third-party body certifications (e.g., RSPO)

Climate-Related Risks & Opportunities

Physical Risks

• Damage to business due to the increase in abnormal weather

Transition Risks

• Reduction in demand for fossil fuels due to business restrictions on greenhouse gas emissions

Opportunities

• Increase in renewable energy and other business opportunities which will contribute to alleviating climate change

Reporting Standards

Frameworks Used: GRI Standards, TCFD Recommendations, UN Global Compact, SDGs

Sustainable Products & Innovation

• Recycled materials from RENU project
• Garbage bags and shopping baskets made with marine plastics
• Bioplastics

Environmental Metrics

ESG Focus Areas

• Climate Change
• Biodiversity
• Human Rights
• Governance
• Supply Chain Sustainability
• Employee Well-being
• Resource Circulation

Environmental Achievements

• Reduced Scope 1/2/3 GHG emissions by 5.7% compared to FYE 2019.
• Achieved a 51.8% reduction in power consumption at Japanese bases compared to FYE 2011 (exceeding initial target).
• 100% of Pulp, Woodchips, and Wood Products & Materials transactions handled as certified material or intensively managed.
• Sales of nocoo environmentally-friendly garbage bags contributed to a reduction in plastic use of 1,293 tons and a reduction in CO2 emissions of 3,531 tons.
• Reduced waste and promoted recycling in office activities.
• Reduced paper consumption by 59% compared to FYE 2019.

Social Achievements

• Increased the ratio of women among all executive positions to 21%.
• Increased the positive response rate to employee engagement survey to 78%.
• Achieved a 64.7% paid leave acquisition rate.
• Conducted human rights due diligence in food, textile, forest goods, and metals businesses.
• Sustainability Survey conducted for 305 suppliers with zero noncompliant suppliers requiring corrective action.

Governance Achievements

• Maintained Board diversity with 40% outside directors and 20% female directors.
• Established a Governance, Nomination and Remuneration Committee chaired by an outside director.
• Incorporated climate change and ESG/SDGs response into executive evaluation.
• No major compliance violations in FYE 2024.

Climate Goals & Targets

Environmental Challenges

• Obsolescence of existing business models due to technological advancements.
• Labor shortages.
• Transition risks from reduced demand for fossil fuels.
• Physical risks from extreme weather events.
• Human rights issues in the supply chain.
• Supply chain disruptions.
• Maintaining rigorous governance structures.

Mitigation Strategies

• Promoting digital transformation and work style reform.
• Investing in renewable energy and other clean-tech businesses.
• Strengthening supply chain resilience.
• Conducting human rights due diligence and sustainability surveys.
• Developing alternative sourcing strategies.
• Strengthening internal controls and corporate governance.

Supply Chain Management

Supplier Audits: 305 suppliers in FYE 2024

Responsible Procurement

• Sustainability Action Guidelines for Supply Chains
• Supplier-specific codes of conduct
• Third-party certifications (e.g., RSPO, MSC)
• Sustainability surveys

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Droughts
• Floods
• Rising temperatures

Transition Risks

• Decreased demand for fossil fuels
• Increased carbon pricing
• Regulatory changes

Opportunities

• Growth in renewable energy, energy storage, and low-carbon technologies.

Reporting Standards

Frameworks Used: GRI Standards, TCFD Recommendations, TNFD Recommendations, UN Global Compact

Certifications: ISO 14001

Third-party Assurance: KPMG AZSA Sustainability CO., Ltd.

Sustainable Products & Innovation

• RENU recycled polyester
• nocoo environmentally-friendly garbage bags
• DESSO eco-friendly flooring
• ECONYL recycled nylon

Environmental Metrics

ESG Focus Areas

• Climate Change
• Biodiversity
• Water Resources Conservation
• Pollution Prevention
• Resource Circulation
• Sustainable Finance
• Human Rights
• Stakeholder Engagement

Environmental Achievements

• Achieved a 51.8% reduction in power consumption at Japanese Bases by FYE 2023 compared to FYE 2011 (exceeding initial target of 30%)
• 100% of pulp and woodchips transactions handled as certified material or under intensive management in FYE 2024
• 92% recycling rate at Tokyo Headquarters in FYE 2024
• Reduced paper consumption by 59% compared to FYE 2019 at ITOCHU Corporation in FYE 2024
• Zero serious environmental accidents in FYE 2024
• Successfully developed and established a mass production system for recycled nylon fishing nets
• Sales of nocoo environmentally-friendly garbage bags totaling 5,622 tons in FYE 2024, contributing to a reduction in plastic use of 1,293 tons and a reduction in CO2 emissions of 3,531 tons

Social Achievements

• Issued US$500 million SDGs Bonds in March 2021
• Entered into a green loan financing agreement in September 2023
• Expanded the textile collection service “Wear to Fashion” to approximately 3,000 locations by March 2024
• Launched the ARChemia Project to transform used clothing into chemical products
• Supported mangrove restoration activities and other biodiversity conservation programs

Governance Achievements

• Incorporated climate change and ESG/SDGs response into the evaluation of each executive since FYE 2021
• Established a multilayered decision-making process for swift decision-making while pursuing investment returns and controlling investment risks
• Supports for the TCFD recommendations

Climate Goals & Targets

Environmental Challenges

• Climate change transition and physical risks impacting various businesses
• Supply chain disruptions due to extreme weather events
• Decreased demand for certain products due to market shifts towards clean technology
• Increased costs due to carbon pricing or regulations
• Potential damage to facilities from natural disasters
• Decreased harvest volumes due to extreme weather in agriculture and forestry businesses
• Risk of diversion of timber use to other products
• Impact on procurement and production from extreme weather in agriculture and forestry businesses
• Potential decrease in crop harvests and logistics disruptions due to extreme weather in feed and grain trade business

Mitigation Strategies

• Developing specific business transition plans and financial plans
• Promoting clean-tech businesses and other businesses that contribute to GHG emissions reduction
• Aiming to have a renewable energy ratio of over 20% by FYE 2031
• Divesting from thermal coal mine interests
• Improving supply chain resilience to extreme weather patterns
• Diversifying production areas and procurement sources
• Increasing unit yield through development of resistant varieties and production methods
• Expanding portfolio of high value-added products
• Diversifying countries from where crops are imported

Supply Chain Management

Supplier Audits: Sustainability surveys conducted for important suppliers

Responsible Procurement

• Code of conduct
• Supplier sustainability requirements
• Procurement policies for certified products

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Floods
• Droughts
• Typhoons
• Hurricanes

Transition Risks

• Regulatory changes
• Market shifts
• Carbon pricing
• Decreased demand for fossil fuels

Opportunities

• Expansion of renewable energy business
• Development of low-carbon technologies (CCUS, hydrogen, ammonia)
• New energy trading opportunities

Reporting Standards

Frameworks Used: TCFD, TNFD, GRI, ISO 26000

Certifications: ISO 14001, ISCC PLUS, ISCC CORSIA, MSC, CoC, GOTS

Third-party Assurance: KPMG AZSA Sustainability Co., Ltd.

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 6 (Clean water and sanitation)
• Goal 13 (Climate action)
• Goal 12 (Responsible consumption and production)
• Goal 15 (Life on land)

ITOCHU's initiatives contribute to these SDGs through renewable energy development, water resource management, GHG emissions reduction, resource circulation, and biodiversity conservation.

Sustainable Products & Innovation

• RENU recycled polyester
• nocoo environmentally-friendly garbage bags
• DESSO eco-friendly flooring material
• ECONYL recycled nylon products
• Sustainable aviation fuel (SAF)
• Biomass polypropylene (bio-PP)

Awards & Recognition

• COP26 Clean Energy Start-up Pitch Battle first prize (MCi)