Setting purpose
The company's stated purpose, as the expression of the means by which a business proposes solutions to economic, environmental and social issues. Corporate purpose should create value for all stakeholders, including shareholders.

Sumitomo Corporation believes that establishing and maintaining better governance and pursuing its business activities will help to grow and develop sustainably. In addition, such efforts will help Sumitomo Corporation to enhance its corporate value over the mid-to-long term and to fulfill its social mission as a corporation. Sumitomo Corporation believes that this will also serve the interest of its shareholders and all other stakeholders, including clients, employees, and local communities, and Sumitomo Corporation plans to maintain unstinting efforts to improve its governance further in future.

This is mentioned in Section 2.2 of "Sumitomo Corporation Corporate Governance Principles".

Governance body composition
Composition of the highest governance body and its committees by: competencies relating to economic, environmental and social topics; executive or non-executive; independence; tenure on the governance body; number of each individual's other significant positions and commitments, and the nature of the commitments; gender; membership of under-represented social groups; stakeholder representation.

We disclose the composition of the highest governance body (Board of Directors (Audit & Supervisory Board Member system)), and its members (Directors: 6 internal, 5 external (of which, 2 female members), Audit & Supervisory Board Members: 2 internal, 3 external (of which, 1 female member) on Governance-related data. We also disclose the information on our Corporate Governance Report, Integrated Report, "Sumitomo Corporation Corporate Governance Principles" as well as in the Notice of Convocation for our Ordinary General Meeting of Shareholders. Regarding the number of each individual's other significant positions and the nature of commitments, Sumitomo Corporation discloses the status of main duties, in accordance with laws and regulations, in the business report section in the Notice of Convocation as well as other reference documents for the Ordinary General Meeting of Shareholders.

The basis for the Sumitomo Corporation Group’s operations can be found in Sumitomo’s Business Philosophy, which has formed the foundation for Sumitomo’s sustainable development over the course of 400 years. One of the credos of this philosophy states: “Benefit for self and others, private and public interests are one and the same.” We interpret this credo advocates Sumitomo’s business activities must benefit not only Sumitomo, but also society around us to achieve sustainable growth together.

In 2017, we identified Material Issues for achieving sustainable growth with society. By constantly clarifying the relationship between our strategy and business with the Material Issues, we have been conducting sustainability management with the awareness that our business activities will contribute to solving social issues.

In 2020, to further enhance the sustainability management and clarify our role in realizing a sustainable society, we have identified six Key Social Issues that we address through our business and corporate activities. The six Key Social Issues are: “Mitigation of climate change,” “Circular economy,” “Respect for human rights,” “Development of local society and economy,” “Improvement of living standard” and “Quality education”. In addition, we have set long-term goals for each issue and medium-term goals that indicate more specific initiative.
For more information on the progress towards the each goals, please see here.

When identifying the six Key Social Issues, we launched an internal project team, which first created a long list of global socialissues based on the UN Sustainable Development Goals. Also, considering the characteristics of our business activities as an integrated general trading company, the project team came up with hypotheses related to important issues deeply involving the Group and picked out several issues from the long list. At the same time, they conducted surveys and interviews with the general managers of each business unit and division concerning opportunities and risks related to the social issues within the strategies and business activities of each organization based on the long list. They then analyzed the relationship of our businesses to the each issue. Finally, after comparing their hypotheses with the survey results and organizing them into categories, the team identified the six Key Social Issues. The Key Social Issues and the long-term goals were decided in June 2020 after resolutions by the Management Council and the Board of Directors. We also decided on the medium-term goals in May 2021. In this series of processes, opinions were exchanged with experts on the environment and human rights, institutional investors, international organizations, and others to verify that the expectations of our various stakeholders have been properly reflected.

1. Total percentage of governance body members, employees and business partners who have received training on the organization’s anti-corruption policies and procedures, broken down by region.
2. 1. Total number and nature of incidents of corruption confirmed during the current year, but related to previous years; and
   2. Total number and nature of incidents of corruption confirmed during the current year, related to this year.
3. Discussion of initiatives and stakeholder engagement to improve the broader operating environment and culture, in order to combat corruption.

1．
Sumitomo Corporation and its Group companies have conducted more than 40 seminars and other training programs on anti-corruption and more than 4,600 officers/employees participated in FY2023.

2．
No incident was confirmed in FY2023 in which the Company has been fined nor convicted of bribery of public officials.

3．
Sumitomo Corporation Group implements strict measures to prevent bribery, inappropriate payments, and all other forms of corruption. Specifically, we have established the "Rules for Prevention of Bribery of Public Officials", which regulate the provision of entertainment, gifts, invitations and donations to domestic and foreign public officials as well as the selection of service providers (suchasagents, consultants or other business intermediaries). We extend these rules to overseas offices and Group companies and we also offer ongoing employee education and work constantly to prevent bribery and corruption.

Our "Sumitomo Corporation Group Anti-Corruption Policy", which summarizes the Group’s principles and policies outlined above, sets out the Group’s basic principles in this area and explains our anti-bribery system and our initiatives for the prevention of bribery to our business partners including service providers, and request their understanding and cooperation.

1. Seeking advice about ethical and lawful behaviourand organizational integrity; and
2. Reporting concerns about unethical or unlawful behaviourand lack of organizational integrity.

Our internal rules stipulate "Immediate Report", which means that any issues or potential issues in relation to compliance must be reported immediately to their line manager or to the relevant department of the Corporate Group. Such issues include not only the violation of antitrust/competition laws or anti-bribery/corruption laws but also workplace misconduct, falsification of accounts, or harassment. If reporting through the usual reporting line is difficult for some reason, we maintain a "Speak-Up System" available to officers and employees to report the issue to the Chief Compliance Officer through an internal or external hotline.

In addition, we have developed and launched the group-based Speak-Up System, which enables officers and employees of group companies both in and outside Japan to report compliance-related issues. For more details, please see our website.

Also, appropriate departments respond to advice and reports received from external stakeholders through the Contact Form on our website, etc.

We always attach great importance to these social issues, and in order to appropriately control the social and environmental impact of the entire Group's business activities, establish policies and publicize and thoroughly enforce them within the Group. We have established a company-wide framework such as assessing of social and environmental risks and opportunities at the beginning of individual businesses and regular monitoring of the social and environmental impact of the Group’s entire business activities. Specifically, we check that the business is soundly managed and does not have severe impacts on stakeholders through environmental assessment by an environmental consultant and assessment of human rights and labor issues by a law firm, considering the characteristics of each business.
In addition, through the review process of the project, sustainability-related risks and opportunities are identified and assessed, and measures for value creation as well as prevention of loss of value are discussed and reviewed considering the identified and assessed risks and opportunities.
As follow-up to the investment, through dialogue with group companies and internal audit process, each investee’s status of the comprehensive management of various risks including social and environmental risks are monitored regularly. If an issue arises, remedial action is taken in line with the specifics of the case. When a case relating to the impact of the Group’s business activities is referred to by a local community, a non-governmental organization (NGO), or another stakeholder, we ascertain the facts and engage in dialogue and discussion toward improvement.

In addition to risk management related to individual businesses, we have also put in place a system that enables us to assess the status of sustainability-related risks faced by the entire Group, and to utilize this information in making strategic management decisions. Specifically, in addition to monitoring and reporting to the Board of Directors on the progress of actions based on the long-term and medium-term targets mentioned above, the Group's overall management status is regularly reviewed based on the medium-term management plan to organize the company-wide status of sustainability-related and other types of risks and to discuss future management and response policies. The Management Council and the Board of Directors discuss the future management and handling policies of sustainability-related and other types of risks, and reflect the results in the consideration of specific measures in the medium-term management plan.

Greenhouse gas (GHG) emissions
For all relevant greenhouse gases (e.g. carbon dioxide, methane, nitrous oxide, F-gases etc.), report in metric tonnesof carbon dioxide equivalent (tCO2e) GHG Protocol Scope 1 and Scope 2 emissions.
Estimate and report material upstream and downstream (GHG Protocol Scope 3) emissions where appropriate.

For details on the scope of data reporting and CO2 emissions, please refer to Environmental-related Data.

Also, please see here for our CO2 emission reduction initiatives that we announced as the mid-term goal for climate change mitigation.

TCFD implementation
Fully implement the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). If necessary, disclose a timeline of at most three years for full implementation. Disclose whether you have set, or have committed to set, GHG emissions targets that are in line with the goals of the Paris Agreement –to limit global warming to well below 2°C above pre-industrial levels and pursue efforts to limit warming to 1.5°C –and to achieve net-zero emissions before 2050.

Sumitomo Corporation has been supporting the final recommendations of the TCFD since March 2019. We have also been disclosing information since 2020 on our climate change-related governance, strategy, risk management, targets and KPIs in compliance with the framework recommended by the TCFD. For more information, please see here.

Also, we have identified "Overcome climate change" as one of the Material Issues which are medium- to long- term commitment for the Group to take one step further toward addressing key social challenges that we must undertake. As a long-term goal, the Group will aim to make our businesses carbon neutral by 2050, and also will aim to achieve the mid-term goal, which is to reduce CO2 emissions by 50% or more by 2035 compared with 2019 levels.

Land use and ecological sensitivity
Report for operations (if applicable) and full supply chain (if material):
– Area of land used for the production of basic plant, animal or mineral commodities (e.g. the area of land used for forestry, agriculture or mining activities).
–Year-on-year change in the area of land used for the production of basic plant, animal or mineral commodities. Note: Supply-chain figures can initially be estimated where necessary based on the mass of each commodity used and the average mass produced per unit of land in different sourcing locations.
–Percentage of land area in point 1 above or of total plant, animal and mineral commodity inputs by mass or cost, covered by a sustainability certification standard or formalized sustainable management programme. Disclose the certification standards or description of sustainable management programmesalong with the percentage of total land area, mass or cost covered by each certification standard/programme.

In the AmbatovyProject, a company in the Republic of Madagascar in which we have an equity stake, we are developing mines in an area of 1,600 hectares. We run an offset program in line with guidance from the Business and Biodiversity Offsets Program (BBOP) and IFC Performance Standard 6, and as an initiative to mitigate the impact of development on ecosystems by regenerating or creating other ecosystems. As a specific example, we have offset our impacts across 14,000 hectares of land, or nine timesthe area of our business, including conserving 6,800 hectares of forested land that is similar to the land being developed

Sumitomo Corporation joined the TNFD Forum in June 2022 and conducted a trial analysis based on v0.4 of the TNFD beta framework in FY2023. We also conducted a trial analysis based on the TNFD in FY2024. For the results of the analysis, please see here.

Water consumption and withdrawal in water-stressed areas
Report for operations where material: mega litresof water withdrawn, mega litresof water consumed and the percentage of each in regions with high or extremely high baseline water stress, according to WRI Aqueduct water risk atlas tool.
Estimate and report the same information for the full value chain (upstream and downstream) where appropriate.

For details on our Group's water consumption and water withdrawal from water-stressed areas*, please refer to the Environmental-related Data.

• Water-stressed areas: The regions with high or extremely high baseline water stress, according to WRI Aqueduct water risk atlas tool.

Diversity and inclusion (%)
Percentage of employees per employee category, by age group, gender and other indicators of diversity (e.g. ethnicity).

The Sumitomo Corporation Group has a diverse workforce made up of people who have different lifestyles and values in addition to differences in gender and nationality. It is essential to utilize the rich mix of “knowledge” held by diverse people as a source of competitiveness in order to survive and stay ahead in complex business domains. We will focus on the diversity of our workforce on a global basis, particularly on the strengths of individuals, and bring these strengths together in combination. By doing so, we will drive the progress of our growth strategies.

Gender ratio at Sumitomo Corporation (non-consolidated) as of March 2024:
Male: 3,695 /Female: 1,325

Percentage by age group at Sumitomo Corporation (non-consolidated) as of March 2024:

Pay equality (%)
Ratio of the basic salary and remuneration for each employee category by significant locations of operation for priority areas of equality: women to men, minor to major ethnic groups, and other relevant equality areas.

There is no gap in basic salary and remuneration in each employee category such as gender and ethnicity etc.at Sumitomo Corporation (non-consolidated). Because we have adopted a job grading system, there are no major salary gaps between people doing equivalent jobs.

Wage level (%)

1. Ratios of standard entry level wage by gender compared to local minimum wage.
2. Ratio of the annual total compensation of the CEO to the median of the annual total compensation of all its employees, except the CEO.

Sumitomo Corporation Group sets salary level that exceeds minimum wage level in each region. The wage level at Sumitomo Corporation (non-consolidated) in FY2023 is as follows:

1. The standard entry level wage exceeds the minimum wage level in Japan and there is no gap between gender.
   New graduate with master's degree or higher: 290,000 JPY/month
   New graduate with bachelor's degree: 255,000 JPY/month
2. The ratio of the annual total compensation of the President and CEO to the median of the annual total compensation of all its employees at Sumitomo Corporation (non-consolidated), except the President and CEO, is 559:18.
   (President and CEO: 559 mil. JPY, Median of the annual total compensation of all employees at Sumitomo Corporation: 18 mil. JPY)

1. type of operation (such as manufacturing plant) and type of supplier; and
2. countries or geographic areas with operations and suppliers considered at risk.

In accordance with the Sumitomo Corporation Group's Human Rights Policy, Sumitomo Corporation began human rights due diligence in 2020. We identified 8 salient human rights issues, such as "forced labor and child labor", that should be addressed with priority so that we can assess impacts concerning human rights throughout the Group. In line with the results of our FY2020 desktop research, we have been conducting human rights due diligence in each of our business units since FY2021. We identified food and textile related businesses as areas with high risks of forced and child labor in the supply chain, and we confirmed the status of risk management in both business areas by conducting internal interviews. Specifically, in the textile business, CSR audits are being conducted based on standards of some of our customers, at factories where we manage or outsource. Also, the food wholesale business properly manages to minimize the risk of forced and child labor by conducting supplier questionnaire to suppliers associated with high-risk countries or goods, based on the list of TVPRA (Trafficking Victims Protection Reauthorization Act) published by the US Bureau of International Labor Affairs (ILAB).

In addition, as conflict minerals poses a serious risk of forced and child labor, we monitor the risk by regularly checking the status and result of conflict minerals survey in the Group.For more information on our human rights related initiatives, please see here.

1. The number and rate of fatalities as a result of work-related injury; high-consequence work-related injuries (excluding fatalities); recordable work-related injuries; main types of work-related injury; and the number of hours worked.
2. An explanation of how the organization facilitates workers’ access to non-occupational medical and healthcare services, and the scope of access provided for employees and workers.

The coverage of the following data is Sumitomo Corporation (non-consolidated):

1. Work-related fatalities: FY2021: 1, FY2022: 0, FY2023: 0
   High-consequence work-related injuries (excl. fatalities): FY2021: 0, FY2022: 0, FY2023: 0
   Recordable work-related injuries: FY2021: 2, FY2022: 2, FY2023: 5
   We do not disclose the details (i.e. types of work-related injury, number of hours worked).
2. Sumitomo Corporation (SC) promotes the following medical and healthcare services:
   • In-house clinic (internal medicine and dentistry) : All officers and employees of SC have access to the clinic during work hours. Support is provided from the perspective of achieving work/health balance where, in addition to receiving periodic health checkups, people requiring follow-up treatment can consult specialists and have interviews with occupational health physicians within the clinic.
   • SCG Counseling Center, Massage room “Koriton”: All employees of SC Group have access to the services during work hours.
   • Advanced Healthcare Expense Program：This covers conditions that give rise to substantial economic burdens as a result of treatment not covered by insurance and the program is available to all employees of SC. By broadly covering treatment not covered by health insurance, the program can support employees receive treatment with reassurance and return to work at the earliest possible time or continue working while receiving treatment.
   • Health consultation service: Since the incidence and death rates of breast cancer and uterine cancer have been increasing among younger women in recent years, we have set up a consultation service for women’s specific health issues to strengthen the dissemination of such information and to introduce them to medical institutions that offer gynecological exams as a stand-alone service. Furthermore, we are also promoting and strengthening various health management measures through a collaborative health program with the Sumitomo Corporation Corporate Health Insurance Society.

The following data covers training programs for Sumitomo Corporation (non-consolidated) which were conducted by the HR department in FY2023. The trainings are not restricted by gender.

Number of participants: 5,020 employees
Total number of hours of training provided: 106,605 hours (including 44,623 hours by Human Resources Dept.)
Total expenditure: 1.618 bil. JPY

Average training hours per employee: 21.2 hours
Development expenditure per employee: 320,000 JPY

The data for Sumitomo Corporation (non-consolidated) is as follows:

1-1. Absolute number of new graduate hires in FY2023
〈by gender〉Male: 63, Female: 37 (Male 63%, Female37%)
〈by age group〉20s: 100

1-2. Absolute number of mid-career hires in FY2023
〈by gender〉Male: 68, Female: 20 (Male 77.3%, Female 22.7%)
〈by age group〉20s: 18, 30s: 61, 40s: 9, 50s: 0 (20s:20.5%, 30s: 69.3%, 40s: 10.2%, 50s:0%)

2. Average Years of Service per Person/Turnover rate in FY2023 ※Please see Social-related data for the historical data.
〈by gender〉Male: 18 years 11 months/2.8%, Female 16 years 6 months/ 3.5%

Economic contribution

1. Direct economic value generated and distributed (EVG&D), on an accruals basis, covering the basic components for the organization’s global operations, ideally split out by:
   a. Revenues
   b. Operating costs
   c. Employee wages and benefits
   d. Payments to providers of capital
   e. Payments to government
   f. Community investment
   
2. Financial assistance received from the government: total monetary value of financial assistance received by the organization from any government during the reporting period.

1. For items a through e, please refer to p.53 and onwards of the Annual Financial Report for FY2023. For item f, please refer to the "Expenditure for social contribution activities" listed on Social-related data.

2. We do not currently conduct this assessment.

Financial investment contribution

1. Total capital expenditures (CapEx) minus depreciation, supported by narrative to describe the company’s investment strategy.
2. Share buybacks plus dividend payments, supported by narrative to describe the company’s strategy for returns of capital to shareholders.

1. In our new Medium-Term Management Plan "Medium-Term Management Plan 2026" which covers FY2024 through FY2026, we plan to make investments totaling 1,800 billion yen during the period of the new Medium-Term Management Plan, and we will maintain investment discipline and focus on businesses with strengths and competitive advantages in growth areas.

For further details, please refer to [Management Policies, Business Environment and Management Challenges] on p.1 of the Annual Financial Report for FY2023.

2. Sumitomo Corporation aims to increase dividends by achieving medium and long-term earnings growth while adhering to its fundamental policy of paying shareholders a stable dividend over the long term.

The annual dividend for FY2023 was 125 yen per share, in line with the dividend forecast announced at the time of the announcement of the third quarter financial results for FY2023 (February 5, 2024), although the profit for the year attributable to owners of the parent in FY2023 totaled 386.4 billion yen. As a result, the dividend payment for FY2023 was 152,738 million yen (including the amount of share repurchases: 184,803 million yen).

With regard to the shareholder return policy for the period from the "Medium-term Management Plan 2026" that will commence in FY2024 onwards, we have comprehensively taken into consideration the improvement of core profitability through "SHIFT 2023," the ongoing strengthening of our financial base, and securing investment funds for sustainable growth, and have revised it as follows.
・Pay dividends and repurchase our shares in a flexible and agile manner with a total payout ratio of 40% or higher
・Further improve dividend stability and increase dividends in line with profit growth through progressive dividend payments*

Based on this policy, the annual dividends for FY2024 are planned to be 130 yen per share, an increase of 5 yen from the previous fiscal year.
In addition, on May 2, 2024, we decided to repurchase shares (between May 7 and July 19, 2024) up to a maximum value of 50 billion yen.

*Dividends to be maintained or increased

The total R&D cost for Sumitomo Corporation Group in FY2023 is 2,072 mil. JPY.

Please see the Consolidated Statement of Cash Flows, which is listed on p.60 and 61 of the Annual Financial Report for FY2023, for information on income tax paid. We do not currently analyze the total taxes paid except for the income tax.