ITOCHU : ESG Report 2023

E S G Report

2023

Top Commitment	Sustainability at the ITOCHU Group	Environment

Contents

									2
Society	Governance	SDGs Bond (Sustainability Bond)	Evaluation by Society	Independent Assurance Report

Contents	2
Editing Policy / Corporate Profile	3
Top Commitment : Chairman & CEO	4
Top Commitment : President & COO	5
Message from Chief Administrative Officer	6

Sustainability at the ITOCHU Group

Our Sustainable History	8
and Value Creation Model
Policy & Basic Approach	11
Governance	15
Strategies	19
Risks and Management	23
Metrics and Targets	24
Collaboration with Outside Initiatives	34

Environment

Environmental Policy	38
Environmental Management	39
Climate Change (Information Disclosure	41
Based on TCFD Recommendations)
Prevention of Pollution and Resource	59
Circulation
Water Resources Conservation	69
Conservation of Biodiversity	72
Clean-tech Business	81
ESG Data (Environment)	93

Society

Labor Practices	101
Human Resources Development	113
Occupational Safety and Health	118
Management
Respect and Consideration for	126
Human Rights
Responsibilities to Customers	134
Sustainability in the Value Chain	145
Social Contribution Activities	163
ESG Data (Society)	165

Governance

Corporate Governance	170
Risk Management	190
Compliance	194

SDGs Bond (Sustainability Bond)	201
Evaluation by Society	202
Independent Assurance Report	207

3

Top Commitment

Sustainability at the ITOCHU Group

Environment

Society

Governance

SDGs Bond (Sustainability Bond)

Evaluation by Society

Independent Assurance Report

Editing Policy

ITOCHU's ESG Report is to provide various stakeholders including shareholders, investors, business partners, and others with a deep understanding of our company's sustainability policies, approaches, targets, systems, and specific initiatives. We recognizes that "Meeting the expectations of society through business activities will help maintain sustainability and lead to further growth." With this in mind, ESG Report 2023 reports the details of our sustainable activities in the previous fiscal year together with ESG performance data and our contribution to the SDGs.

Reporting Period

This report principally covers actual data for the fscal year beginning on April 1, 2022, and ended on March 31, 2023 (FYE 2023). However, some of the most recent information on our activities and initiatives are also included.

Corporate Profile

Company Name	ITOCHU Corporation
Founded	1858
Incorporated	December 1, 1949

Headquarters

Tokyo	Osaka
5-1,Kita-Aoyama	1-3, Umeda 3-chome,
2-chome,Minato-ku,	Kita-ku,
Tokyo 107-8077, Japan	Osaka 530-8448, Japan

Chairman & CEO		Masahiro Okafuji
Common Stock		253,448 Million Yen
Number of Offices		Domestic Offices 7
Number of Employees	*	Overseas Offices 86
Consolidated 110,698
	Non-consolidated 4,112
		(As of March 31, 2023)

• The number of consolidated employees is based on actual working employees excluding temporary staff.

Reporting Boundary

This report covers ITOCHU Corporation (7 domestic offices and 86 overseas offices) and its major group companies.

Independent Assurance

The environmental and social performance indicators marked with ★ and ◆ in this report are independently assured by KPMG AZSA Sustainability CO., Ltd. (P207)

Inquiries	ITOCHU Corporation Sustainability Management Division
	TEL: [phone]	E-mail: [e-mail]
Disclosure of Sustainability-related Information
Publication		Contents	PDF	HTML

Publication Information

Publication: September 2023

Next publication (scheduled): September 2024

Previous publication: September 2022

Referenced Guidelines

In promoting sustainability, we refer to international guidelines and principles such as The Ten Principles of the United Nations Global Compact and Sustainable Development Goals (SDGs) adopted by the United Nations in September 2015. The guidelines and principles we refer to are listed below.

● The Ten Principles of the United Nations Global Compact	● Basic Principles on the Use of Force and Firearms by
● GRI Sustainability Reporting Standards (GRI Standards)	Law Enforcement Officials
● International Integrated Reporting Framework (IIRC)	● OECD Guidelines for Multinational Enterprises
● ISO 26000 (Social Responsibility)	● The Environmental Reporting Guidelines issued by the

ESG Report

Annual Report

Corporate Governance Report

Annual Security Report

ITOCHU discloses information on a wide range of topics concerning its sustainability initiatives. The PDF is published as an annual report so as to provide continuous record of our ESG initiatives. In HTML, we provide information on activities carried out during the fscal year in a timely manner.

This report is for a wide range of stakeholders including investors to provide particularly important information on our management performance and future growth strategies, as well as sustainability initiatives, in an integrated form, including fnancial and non-fnancial information, based on the characteristics of our business activities as a general trading company.

This report presents our company's approach to corporate governance and its corporate structure in accordance with the principles stated in the Corporate Governance Code. We provide more detailed information on governance such as institutional design, operational status, and effectiveness evaluation.

The fnancial statements have been prepared in accordance with Article 24, Paragraph 1 of the Financial Instruments and Exchange Act of Japan and submitted to the Kanto Local Finance Bureau. We provide more detailed information on our fnancial condition.

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Only)

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● TCFD Recommendations	Ministry of the Environment
● Universal Declaration of Human Rights (UDHR)	● Keidanren: Charter of Corporate Behavior
● UN Guiding Principles on Business and Human Rights	● Japan Foreign Trade Council: Shosha's Corporate
● Sustainable Development Goals (SDGs)	Environmental Code of Conduct, Supply Chain CSR
● United Nations Declaration on the Rights of Indigenous	Action Guidelines
Peoples (UNDRIP)

Forward-Looking Statements

This report contains not only past and present facts, but also forecasts, targets, and plans for the future. These forward-looking statements are based on information available at the time of publication of this report and are subject to a number of factors that may cause actual results to differ materially from those presented in the forward-looking statements. Please use this report at your own discretion.

4

Top Commitment

Sustainability at the ITOCHU Group

Environment

Society

Governance

SDGs Bond (Sustainability Bond)

Evaluation by Society

Independent Assurance Report

Chairman & CEO

Preventative Management that Anticipates the Future

The World Health Organization (WHO) has announced the end of the state of emergency for COVID-19 which spread worldwide since 2020. Japan has also fnally downgraded the legal status of COVID-19 to that of a category 5 common infectious disease.

In the spring of 2020, when the unprecedented catastrophe of COVID-19 struck around the world, we were forced to consider how we should respond to this crisis, how to protect our employees and how to continue our business. Because it was an unprecedented catastrophe which no one expected, rather than predicting when it would be over, I thought, as usual, about the area of prevention in our principles of "earn, cut, prevent" and what opportunities would arise from this crisis precisely because we were in such times. I believe prevention does not mean avoiding risks and halting business, but rather preparing in advance how to respond to the greatest risks which may arise and how to reliably proceed with business. Even if a risk emerges, we can ensure the damage from it will not be fatal by putting this prevention into practice on a daily basis.

The origin of ITOCHU's continued development for more than 160 years is "Sampo-yoshi" (good for the buyer, good for the seller and good for society). However, "Sampo-yoshi" does not mean trying to please everyone; rather, it means analyzing the risks for all three parties and then taking measures suitable for each of them as soon as possible to achieve stable growth for all. That means it is extremely important to collect information about what is happening in society, what may happen and what the market wants. We then need to uncover opportunities and uncertainties-that is, risks-before taking a thorough response to prevent them.

The experience of being given a room with no toothbrush when I went on a business trip to Europe in 2018 made me strongly aware that the market is changing. We have shifted to a decarbonized society- conscious management and have been focusing increasingly on thermal coal divestment and environmentally-friendly businesses such as storage batteries, cellulose fber and energy from waste. Changing our company in line with the changes in our customers and society is my concept of a market- orientated approach. We will continue to put "Sampo-yoshi" capitalism into practice, valuing all our stakeholders with the aim of achieving further sustainable growth in our corporate value.

June 2023

Masahiro Okafuji

Member of the Board Chairman & Chief Executive Officer

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Top Commitment

Sustainability at the ITOCHU Group

Environment

Society

Governance

SDGs Bond (Sustainability Bond)

Evaluation by Society

Independent Assurance Report

President & COO

How to Be a Trusted Company

Restrictions on activity due to COVID-19 have been lifted and there has been a shift to new lifestyles. Together with this, the flow of people is recovering and we are returning to a normal business environment. Moreover, we are starting to see resource prices gradually settling down, and personal consumption is also recovering in many countries. However, the global economy remains in a chaotic state due to various events such as fears of an economic slowdown arising from inflation reduction efforts mainly in Europe and the United States, and instability from concerns about losses on bonds held by fnancial institutions.

Since being appointed President of ITOCHU, I have always kept in mind the importance of being a "trusted player" no matter the circumstances. To achieve this, I believe we need to thoroughly implement the bottom-up approach to management by visiting our customers and understanding with our own eyes and ears what society and our customers need. We need to communicate with all our stakeholders, taking a medium- to long-term perspective and being aware of changes in the environment and the market, as well as changes in the products and services sought by consumers.

The global economic environment is changing dramatically, and the responsibilities sought from companies are also changing dynamically. In order to improve our corporate value, there is a need to expand and evolve in non-fnancial areas such as the environment, social issues and human capital in addition to having strong proft growth and a sound fnancial structure. We are incorporating non-fnancial areas into our management policies, such as our basic policies on "Realizing Business Transformation by Shifting to a Market-oriented Perspective" and "Enhancing Our Contribution to and Engagement with the SDGs through Business Activities," as stated in our Brand-new Deal 2023 medium-term management plan.

In doing so, we seek to be a trusted company that maintains a market-oriented approach amidst societalJune 2023 changes, undertaking business which is attuned to the new needs of our customers and society.

Keita Ishii

Member of the Board

President & Chief Operating Officer