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View Sumitomo Corporation's Sustainability : Compliance
The basis for the Sumitomo Corporation Group's compliance is to win the trust of society by practicing the Activity Guideline that states "to comply with laws and regulations while maintaining the highest ethical standards."
Accordingly, our Group has adopted, and puts into practice on a daily basis, our two key principles of "Giving First Priority to Compliance," which means that compliance takes priority over all activities of the Group and that we must never violate compliance by prioritizing profit over compliance, and "Immediate Report," which means, in the event of a compliance problem, employees must report the situation without delay to their line manager, including the management level personnel, and to the relevant Corporate Group department.
The Sumitomo Corporation Group Compliance Policy was developed and adopted by the Board of Directors in March 2019, based on the previous Compliance Guiding Principles to clarify and adopt our basic policy above throughout the Group. With respect to this policy, educational programs, such as seminars, e-learnings and training programs, are provided on a continuing basis with the aim of spreading and ensuring adoption of the policy throughout the Group, and the Board of Directors supervises the status of such efforts. In addition, at Sumitomo Corporation, including each Overseas Regions and Group companies, we prepare, distribute, and circulate a Compliance Manual, which serves as a guide for officers’ and employees’ day-to-day operations and provides detailed explanations of particularly important matters in the policy from a compliance perspective, including anti-bribery, compliance with laws concerning antitrust/fair competition, and security trade control. We review them for their effectiveness and propriety on a regular basis and revise their contents as necessary in line with changes in our Group’s business and the surrounding environment and circumstances.
Aiming for more agile responses to compliance issues which arise in the Group, Sumitomo Corporation appoints a Chief Compliance Officer, who has ultimate responsibility for compliance. Further, the Compliance Committee, which plans and formulates compliance measures and is chaired by the Chief Compliance Officer, includes not only the Heads of the Departments in Corporate Group but also the General Managers of our Strategic Business Unit of the Business Group, enabling it to examine such measures in a multifaceted way that reflects our actual business operations.
Our Group will actively continue to establish and improve the internal systems that realize our principle of "Giving First Priority to Compliance."
At Sumitomo Corporation and Group companies, our internal rules stipulate and ensure that any issues or potential issues in relation to compliance must be reported immediately to their superiors, including the management level personnel, and to the relevant department of the Corporate Group (“Immediate Report”). These issues include not only the violation of laws concerning antitrust/fair competition and anti-bribery/corruption laws but also workplace misconduct, falsification of accounts, and harassment. Upon occurrence of such issues, the relevant departments use their collective efforts to take prompt and optimum actions and measures on a case-by-case basis.
Our Group operates businesses across multiple countries and jurisdictions and has many points of contact with government agencies, state-owned enterprises, and business partners, and often conducts business indirectly through Group companies, joint ventures, agents. For this reason, there is a structural risk that legal violations or situations that may give rise to such violations may remain latent as actions at the operational level or by third parties, and that recognition by management or Corporate Group departments may be delayed. In light of these business characteristics, we position the “Immediate Report” as a basic principle of our Group to serve as a mechanism that enables early detection of issues and promotes prompt remediation.
For cases in which “Immediate Report” through the usual reporting line is difficult for some reason, we maintain a "Speak-Up System" * available to officers and employees, who become aware of an issue, to report it to the Chief Compliance Officer through an internal or external points of contact since November 2000.
In the event of a compliance problem, the Company promptly takes steps to investigate the concern, primarily through the Legal Department with the aid of external specialists when necessary, and in cooperation with relevant departments in and outside of Japan, to establish the facts and clarify the causes of the incident. Based on the outcome of each investigation, we take corrective measures, disciplinary action, and recurrence prevention measures.
The number of reports in the fiscal year 2025, during day-to-day business activities at Sumitomo Corporation and Group companies, elevated to the management level through “Immediate Reports” relating to issues or potential issues in relation to compliance, was approximately 630. In addition, in the fiscal year 2025, the Compliance Committee of Sumitomo Corporation accepted 49 Speak-Up reports. With respect to these cases, appropriate factual investigations are conducted each time, and where an issue is found, corrective and other responses, including the root-cause analysis, as well as necessary measures to prevent recurrence, are promptly taken. We assess that both systems, “Immediate Report” and “Speak-Up System”, are being operated appropriately in accordance with the relevant circumstances.
The Compliance Committee Secretariat keeps annual records of the details of the circumstances of compliance violations in the Group, the operational status of the Speak-Up System, and the implemented compliance measures and education programs and the Secretariat analyzes, evaluates and uses them to plan future compliance measures. The results and details are deliberated at Compliance Committee meetings and then reported to and discussed by the Management Council, the Audit and Supervisory Committee, and the Board of Directors. Thus, through this process of repeatedly improving and enhancing such measures while using the Plan-Do-Check-Action cycle, we strive to increase awareness of, and ensure compliance throughout, the Group.
In FY2025, there were no cases at our company in which monetary losses such as fines or surcharges were incurred as a result of a prosecution by regulatory authorities in relation to unethical conduct (fraud, insider trading, antitrust violations, anti-competitive conduct, market manipulation, misconduct, or violations of other relevant industry laws or regulations).
Our Speak-Up System accepts reports concerning compliance issues at Sumitomo Corporation or Group companies, including compliance with laws and internal rules, misconduct in the workplace, and harassment, including matters relating to the workplace environment. Our System provides, in addition to the Chief Compliance Officer (Compliance Committee Secretariat), various points of contact such as hotline service providers, outside lawyers, and the Audit and Supervisory Committee, and it accepts any information report made by any officer or employee of Sumitomo Corporation and Group companies (including contract workers, dispatch workers and secondees, etc.), specified outsourced workers who are in a business outsourcing relationship and any person who used to be an officer or employee within one year before the day on which the information report is made, as well as such categories of persons working for our business partners. In addition, the group-based Speak-Up system, so-called “SC Global Speak Up System”, which enables officers and employees of each Group companies both in and overseas to report compliance-related issues, has also been established and operated. We accept reports in 16 languages under this System. Furthermore, each Overseas Regions and Group company also maintains its own individual points of contact.
Under the Speak-Up System, an information report can be made anonymously, and regardless of whether an information report is anonymous or identified, the fact and details of the report are maintained in the strictest confidence, and it is ensured that the whistle-blower is not subject to disadvantageous treatment for making the report.
With respect to each report received, fact-finding investigations and root cause analyses are conducted under the direction and instruction of the Chief Compliance Officer, and, depending on the results, corrective measures are taken, disciplinary actions and personnel-related measures are implemented with respect to relevant persons, and recurrence prevention measures are carried out, among other actions, and the matters are handled appropriately. In addition, we obtain advice from multiple external attorneys when responding to individual cases, and we also undertake periodic reviews to validate the proper operation of the Speak-Up System.
Inquiries or reports submitted by outsiders through an “Inquiry” etc on our website are handled by an appropriate department depending on the nature of the inquiry or report.
We, including our Overseas Regions and Group companies, take measures, including those listed below, to encourage the use of the Speak-Up System and to explain in simple terms how the maintenance of strictest confidence and prohibition of disadvantageous treatment is ensured in practice for Speak-Up reporting cases, thereby aiming to improve continuously the workplace environment to ensure that the System can be used without worry.
In order to further enhance understanding and promote the dissemination of the “Sumitomo Corporation Group Compliance Policy” and the “Compliance Manual,” we conduct regular training programs for its officers and employees (including fixed-term employees, contract employees, and temporary staff) both in Japan and overseas. We implement various education programs for each class of employees, such as new comers, mid-career hires, newly appointed managers, and newly appointed organizational leaders, dispatched employees to our Group companies, as well as provide e-learning programs every year dedicated to specific themes according to the current situation for all officers and employees of Sumitomo Corporation, in order to promote and deepen understanding.
Furthermore, by obtaining written pledges ensuring thorough compliance from all officers and employees of Sumitomo Corporation once a year, we periodically reaffirm our Group's Activity Guideline that states "To comply with laws and regulations while maintaining the highest ethical standards." In addition to these regular activities, for risk areas of particular importance in the course of the Company’s business activities, such as anti-bribery/corruption, compliance of antitrust law, subcontract law, security trade control, prevention of insider trading, and elimination of harassment, we conduct theme-specific training sessions and seminars.
In each Business Group, Domestic Offices, and Overseas Regions, we provide relevant compliance training sessions, under the leadership of a compliance leader, depending on the characteristics of the Group or Region, thus engaging in attentive education program initiatives.
We also implement a variety of support measures to reinforce compliance systems at Group companies, including implementation of various education programs for new comers, relating to specific compliance themes, and deployment of e-learning content to Group companies on the Sumitomo Corporation Group Compliance Policy, anti-bribery, laws concerning antitrust/fair competition and other important compliance themes.
Our Group operates businesses across multiple countries and diverse business fields and has a business structure characterized by extensive interactions with a wide range of counterparties. In particular, with respect to anti-bribery and anti-corruption, laws concerning antitrust/fair competition, security trade control, and the prevention of insider trading, the occurrence of violations in these areas may not only result in direct financial losses such as fines and penalties, but may also lead to restrictions on business continuity, deterioration of trust from business partners and investors, and adverse assessments in the capital markets. As such developments could have a significant impact on medium- to long-term corporate value and may directly affect the foundation of the Group’s business, the Group recognizes the occurrence of such violations as particularly important legal and compliance risks in the course of its business operations. Accordingly, the Group places priority on managing these risks and conducts continuous awareness and training activities.
Based on the principle of "Giving First Priority to Compliance" and as stipulated in the Sumitomo Corporation Group Compliance Policy, the Group continuously undertakes efforts to prevent all forms of bribery and corruption in Japan and overseas. The Group's principles and policies in this regard are summarized in the Sumitomo Corporation Group Anti-Corruption Policy (enacted and announced in 2017). This Policy includes the following statement: "The Sumitomo Corporation Group will not commit bribery or conduct any activity raising the suspicion of bribing Japanese government or other public officials; and will as a principle prohibit its officers and employees from providing such officials with entertainment, gifts, or the equivalent. It will not make any offer, payment, promise to pay, or authorize the payment of any money or anything of value to any foreign government or other public official, for the purpose of influencing any act or decision of such official in order to assist it in obtaining or retaining business." This statement declares the Group's principles in relation to preventing bribery. Furthermore, we explain our anti-bribery system initiatives to our business partners, and request their understanding and cooperation.
Sumitomo Corporation Group Anti-Corruption Policy
As part of these initiatives, we have established and operate the “Rules for the Prevention of Bribery of Public Officials“ and related detailed regulations. Specifically, when considering entertainment, gifts, engaging service providers, invitations, donations with respect to domestic and foreign public officials or persons in equivalent positions, prior internal review by the relevant organization is required, and, depending on the outcome, additional review by other organizations is also required. In addition, when engaging service providers, we require not only such reviews but also the commitments regarding the prevention of bribery. Through these measures, we seek to prevent corruption involving domestic and foreign public officials or persons in equivalent positions. Furthermore, with respect to our investment activities, we carefully assess bribery and corruption risks for each individual activity and implement appropriate measures, including due diligence conducted with the involvement of external experts.
We annually verify and evaluate the operation of these measures, including through internal audits. At the same time, we continuously review and improve our internal rules and regulations in light of amendments to laws in each country, advice from external experts, and changes in social circumstances. In addition, we promote the establishment and operation of appropriate anti-bribery systems at our Group companies according to their respective risk levels, and confirm the status of such systems and operations on a regular basis. Through these efforts, our Group works in an integrated manner to prevent bribery and corruption. We also strive to ensure thorough awareness through ongoing internal seminars and other training initiatives across the Group.
In FY2025 , no incident was confirmed in which the Company was fined or convicted of bribery of public officials.
We stipulate in our Group Compliance Policy that we shall engage in “fair competition” and work to ensure compliance with laws concerning antitrust/fair competition. In addition, the Compliance Manual, which is distributed to all employees, explains the background of laws concerning antitrust/fair competition, specific examples of prohibited conduct, and penalties in the event of violations, thereby establishing the principle of antitrust/fair competition. Furthermore, the Company has developed practical manuals for employees that describes key considerations in daily business dealings, thereby promoting a thorough understanding among employees.
Additionally, through regularly conducted compliance training programs organized by function and by employee level, as well as in mandatory programs for all employees, the Company provides explanations of compliance on laws concerning antitrust/fair competition and key considerations as a means to promote awareness. In addition, through various forms of regular internal training (including face-to-face training conducted by external lecturers, e-learning, and video-based training), organized by themes such as horizontal restraints, vertical restraints, mergers, and considerations in the management of Group companies, the Company strives to ensure thorough compliance with laws concerning antitrust/fair competition in Japan and overseas.
Moreover, through regular communication with lawyers specializing in laws concerning antitrust/fair competition in Japan and overseas, the Company collects information on developments among competition authorities both domestically and internationally and disseminates such information internally.
As an integrated trading company, Sumitomo Corporation regularly implements various measures, on a continuing basis, to ensure that we comply with treaties and international frameworks related to international trade, as well as Japanese laws and regulations related to trading activities. Our Group companies do likewise. We implement various measures related to security trade control to prevent weapons or products and technology for civilian use that could be converted to military use from falling into the hands of states or non-state organization (terrorists) which may develop weapons of mass destruction. We also provide internal rules, manuals, and guidelines, and provide training sessions, instructions and monitoring as needed to ensure compliance with laws and regulations related to tariffs and customs as well as those related to public order and safety.
In order to comply with sanctions implemented in coordination by the international community, the Company has established internal rules in the form of “Detailed Rules for Risk Management” for sanctions response. These guidelines define response policies, taking into account the level of risk and the potential impact on management, and include measures such as counterparty monitoring in individual business transactions. In addition, the Company has established a cross-functional Sanctions Response Desk comprising relevant Corporate Group departments, thereby strengthening its management framework to ensure a consistent, company-wide approach to sanctions compliance.
To prevent violations of insider trading regulations related to our business activities as well as personal dealings by our officers and employees, we have established our "Rules for Prevention of Insider Trading" and “Project Management Guidelines”, as well as internal checking systems from various perspectives. To ensure compliance with insider trading regulations as well as internal rules, we also provide, on a regular basis, internal training courses and other activities to raise awareness.
The Sumitomo Corporation Group established the “Sumitomo Corporation Group Tax Principles”, which sets forth its basic stance and code of conduct regarding taxation, under the supervision of the Board of Directors at 2018.
According to the principles, the group will adhere to the tax and related laws and regulations of each country, will not conduct any transaction whose purpose is solely or mainly for tax avoidance or tax mitigation, and will endeavor to enhance tax compliance.