Sustainability at the ITOCHU Groupunderstanding of what society expects of and desires from the company, which we can then apply to our efforts at advancing sustainability. Sustainability

Sustainability at the ITOCHU Group

The Basic Policy on Promotion of Sustainability sets the direction for ITOCHU Corporation's efforts to furthersustainability. It is written in the spirit of our core philosophy, Sampo Yoshi. Meanwhile, we adopted an ESGmindset in organizing and integrating the Basic Policies for CSR Promotion and the Environmental Activities Policies.

Policy & Basic Approach

ITOCHU Group, conducting business globally under the spirit of Sampo Yoshi, the managementphilosophy of merchants in the province of Ohmi, considers that addressing global environmental andsocial issues is one of the top priority issues in its management policy. We contribute to the realizationof a sustainable society based on the ITOCHU Group Code of Conduct, in order to achieve the goals ofThe ITOCHU Group Corporate Philosophy, "Committed to the Global Good."

In keeping with the basic philosophy presented above, the ITOCHU Group sets out the following actionguidelines to promote its sustainability.

(1) Identification ofmaterial issues andpromotion of businessesthat address the socialissues

As a member of the international community, we seek to identifycritical sustainability issues whose resolution will lead to thesustainable growth of society as well as our businesses, and aim toenhance corporate value through our operations.

(2) Establishment ofmutual trust withsociety

We continue to address society's expectations and requests byincreasing the disclosure of information and facilitating two-waydialogues with stakeholders. By pursuing these initiatives, we aim tobecome a trusted Group.

(3) Strengtheningsupply chain andbusiness investmentmanagement to lead tosustainable use ofnatural resources withrespect for humanrights and considerationfor the environment

While engaging in business activities, we respect the legal systemsof each country and international rules, and strive to prevent theoccurrence of environmental pollution and/or human rights andlabor issues that threaten our lives. In addition, we give dueconsideration to the mitigation of and adaption to climate change,the preservation of the global environment, such as through theconservation of biodiversity and ecosystems, and human rightsissues.We endeavor to understand how natural resources are utilized (suchas air, water, land, food, minerals, fossil fuels, animals, and plants)and what consideration is given to human rights and labor issues,both in the businesses where we invest and in the supply chainsrelated to the products we handle. We request our business partnersto understand and implement our concept of sustainability, and aimto build a sustainable value chain.

The ITOCHU Group Basic Policy on Promotion of Sustainability

［Ⅰ］Basic Philosophy

［Ⅱ］Action Guidelines

7

(4) Education andawareness of employeesto promotesustainability

Since promoting sustainability rests in the hands of individualemployees, we conduct employee training and awareness activitiesto deepen their awareness about solving social issues.Along with other conditions to which we have agreed, all employeesobserve domestic and foreign laws and regulations. They also followthis policy when executing action plans for their respective units.With this approach, ITOCHU aims to contribute to society through itsbusiness.

April 2018Masahiro Okafuji

Chairman & Chief Executive Officer

The foundation of ITOCHU Corporation traces back to 1858, the year inwhich Chubei Itoh set out from Toyosato Village, in Shiga Prefecture, toNagasaki as a traveling linen merchant.

The base of Chubei Itoh's business was the spirit of sampo yoshi, whichwas a management philosophy of merchants in Ohmi, a province wherehe was born. The philosophy started in the shogunate era. Due to themerchants' contributions to the society, they were permitted to promotebusiness activities in the region. Since then, not only good for the sellerand the buyer, but also for the society became the managementphilosophy. This can be said to be the roots of today's idea ofsustainability, which requires corporations to balance their businessactivities with the interests of a variety of stakeholders. That spirit isevident in Chubei Itoh's personal motto, "Trade is a compassionatebusiness. It is noble when it accords with the spirit of Buddha by profiting those who sell and those who buy andsupplying the needs of the society."

Our Founder Chubei Itoh and Sampo Yoshi

Our founderChubei Itoh

(1842 - 1903)

Ohmi merchants(courtesy of

Museum of OhmiMerchant)

A daifukucho ledgerfrom the time ofITOCHU's founding

Our founder Chubei Itoh established a "store law" in 1872, and adopted a meetingsystem. The store law was a set of house rules covering what in modern parlancecalled management philosophy, a human resources system and employmentregulations, which subsequently became the foundation of ITOCHU Corporation'smanagement philosophy. Emphasizing communication with employees, Chubei Itohchaired meetings himself. Moreover, he incorporated a series of what were at the timegroundbreaking management systems, including the codification of "sharing of profitby three parties" and western bookkeeping methods. Those initiatives built thefoundations of mutual trust between the store owner and the employees. Since thatera, we have based our corporate management on sustainability.

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

The Roots of a Management Philosophy Inherited Since theFoundation

(*)

8

The headquarters with modernamenities built in 1915

In 2018, ITOCHU Corporation marked its 160th anniversary. Why werewe able to keep developing for such a long period of time? We believethat it is because we have put into practice the spirit of sampo yoshi for160 years, which is the root of sustainability. At the same time, as thebusiness environment has changed with the times, we have establisheda corporate culture that anticipates changes and turns it intoopportunities.

Since the foundation, ITOCHU Corporation has consistently thrived despite the turmoil it has faced in different eras,including two world wars and economic volatility. Starting as a trading company mainly handling textiles, we havefulfilled the role of a trading company that has responsively changed according to the demands of each generation.Furthermore, while significantly changing its products and business portfolios, we have expanded our sphere ofinfluence from upstream raw materials to downstream consumer sales. ITOCHU Corporation has evolved into ageneral trading company, and from there into a globally integrated corporation.

We are convinced that our history has continued for more than 160 years because we have surely upheld andpassed on the spirit of sampo yoshi while remaining an essential component of society by responding to changes,in its expectations in different eras.

160 Years of History and Sustainability

9

Structure and System

We established the Basic Policy on Promotion of Sustainability (P7) to set ITOCHU Corporation's efforts to furthersustainability in accordance with our corporate philosophy and the dynamic environment in which we operate. Ourimplementation of the policy is organized and systematic. In the course of implementation, ITOCHU Corporationdetermines the critical issues with priority need for a solution, then inserts the material issues into SustainabilityAction Plans (P16-23). These plans guide operations in our trading and business investments as we carry out thepolicies in the mid-term management plan, thus helping to solve the aforementioned issues.

Sustainability promotion flow

Promoting Sustainability at ITOCHU Corporation

10

The Sustainability Management Department plans and formulates company-wide action to further sustainability atITOCHU Corporation, which the department's leader, the Chief Administrative Officer, finalizes. Meanwhile, the ESGOfficers and Managers in each unit carry out sustainability actions. The Sustainability Committee, one of thecompany's key committees, holds deliberations and makes decisions concerning policy formulation and importantmatters. In addition to a role in heading the Sustainability Committee, the committee's chair joins meetings of theBoard of Directors, the HMC and the Investment Consultative Committee, and also engages in decision-makingbased on the company's impact on the environment and society by reporting regularly to the Board of Directors tobrief them on our promotion of sustainability. We furthermore engage in dialog with stakeholders within andoutside the company. One example of this is our regularly convened advisory board. This dialog provides anunderstanding of what society expects of and desires from the company, which we can then apply to our efforts atadvancing sustainability.

Sustainability promotion framework (FYE 2020)

Fiscal 2019 Sustainability Committee

Members

Chair: CAO. Members: General Manager of the Corporate Planning & AdministrationDivision, General Manager of the Corporate Communications Division, General Managerof the Human Resources & General Affairs Division, General Manager of the LegalDivision, General Manager of the Sustainability Management Department, GeneralManager of the Investor Relations Department, general managers of the Planning &Administration Departments of each Division Company, corporate auditors

Primary PurviewSustainability action plan review, ISO14001 environmental management review, ESGrelated correspondence report

Structure for Promoting Sustainability

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Efforts: Critical Issues (Material Issues)

In April 2018, ITOCHU Corporation adopted an Environmental, Social and Governance (ESG) mindset to identifymaterial sustainability issues. Addressing these critical issues through our primary business operations is how weare working toward sustainable growth through a reinvented Sampo Yoshi approach that will achieve the goals ofBrand-new Deal 2020.In a sustainability effort to carry out the company's responsibilities for the society of today and the future, we arealso helping to achieve the Sustainable Development Goals (SDGs)* adopted by the United Nations in 2015.

Material Sustainability Issues

Sustainable Development Goals (SDGs): Targets for sustainable development to achieve by 2030, adopted inSeptember 2015 by member states of the United Nations

*

Identification and Review Process for Material Issues (P14)Risks and Opportunities Pertaining to Each Material Issue (P15)Sustainability Action Plans (P16-23)

We create new value by proactively exploring new technologies as we adapt to a transforming industrialestablishment by venturing beyond the framework of our existing business.

Reinvent Businesses Through Technological Innovation

As we endeavor to adapt to climate change's impact on business, we further business activities that contribute to alow-carbon society and work to reduce greenhouse gas emissions.

Address Climate Change (Contribute to Realization of a Low-Carbon Society)

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We provide a setting where employees are proud and motivated, and where we can leverage diversity so they canfully exhibit their capabilities.

Cultivate a Motivating Workplace Environment

While showing respect and consideration for human rights in our operations, we bring stability to our business andcontribute to the development of local communities.

Respect Human Rights

With the intention of raising quality of life for all people, we help make healthy, bountiful living possible.

Contribute to Healthier and More Enriched Lifestyles

With aspirations for a recycling-oriented society, we give consideration to biodiversity and other important aspectsof the environment to engage in effective use and steady procurement and supply of resources in line with theirdemand in each country.

Ensure Stable Procurement and Supply

We ensure proper and efficient execution of operations through the Board of Directors' independent, objective andhighly effective oversight of management and highly transparent decision-making.

Maintain Rigorous Governance Structures

13

Since ITOCHU Corporation first identified material issues in 2013, we have conducted regular reviews based ontrends in the international community and the expectations of stakeholders. In fiscal 2019, when the latest mid-term management plan kicked off, we identified seven new critical issues based on the recent adoption of theSDGs, the Paris Agreement on climate change coming into effect and other social developments and changesaffecting business.

Efforts: Identification and Review Process for MaterialIssues

14

Material Issues Risks Opportunities

Reinventbusinesses throughtechnologicalinnovation

Address climatechange (contributeto realization of alow-carbonsociety)

Transition risk

Physical risk

Cultivate amotivatingworkplaceenvironment

Respect humanrights

Contribute tohealthier and moreenriched lifestyles

Ensure stableprocurement andsupply

Maintain rigorousgovernancestructures

Efforts: Risks and Opportunities Pertaining to EachMaterial Issue

Obsolescence of existing businessmodels accompanying the rise of newtechnologies such as IoT and AILabor shortages in developedcountries; flight of excellent talentfrom businesses that are slow tostreamline

Creation of new markets; provision ofinnovative servicesOptimization of human resources andlogistics by utilizing new technology;enhanced competitiveness byreforming how we work

Reduction in demand for fossil fuelsdue to business restrictions ongreenhouse gas emissions

Damage to business due to theincrease in abnormal weather (e.g.,droughts, flooding, typhoons andhurricanes)

Increase in renewable energy andother business opportunities which willcontribute to alleviating climatechangeRetention and acquisition of customersby strengthening supply structuresthat can adapt to abnormal weather

Failure to handle the issue properlycould lower worker productivity, causeexcellent talent to leave, erasebusiness opportunities, and add tohealth-related expenses

Providing a motivating workplaceenvironment raises workerproductivity, improves health andmotivation, retains excellent talent,and enhances adaptability to changeand new business opportunities

Human rights problems occurring inmore geographically expansivebusiness activities could delayoperations or pose a continuity riskInsufficient provision of socialinfrastructure services could erodetrust in the company

Co-existence with local communitiesstabilizes business and retainsexcellent talentConsideration for human rights in thesupply chain and improved workingenvironments will build a safer andsteadier product supply network

Safety and health issues affectingconsumers and service users coulderode trust in the companyChanges in government policy couldimpact business by destabilizingmarkets or social insurance systems

Advancing food safety/reliability andhealth will boost demandGrowth in individual consumption andthe spread of the internet will expandservices in information, finance anddistribution

Impact from a backlash accompanyingthe outbreak of environmentalproblems or worsening relations withlocal communitiesA price-cutting war in consumer goodscould structurally batter the entireindustry

Higher demand for resources due topopulation growth and higher livingstandards in emerging countriesA steady, environmentally-friendlysupply of resources and materials winsclient trust and creates new business

Business continuity risks andunanticipated losses arising fromdysfunctional corporate governance orinternal controls

Establishing robust governance willraise decision-making transparency,enable proper adaptation to change,and lay the foundation for steadygrowth

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As a concrete initiative to address the material issues we have identified, we embed these issues into theSustainability Action Plan for each business sector. Each company deduces the risks and opportunities associatedwith critical sustainability issues in each business sector, formulates a Sustainability Action Plan that stipulates theapproach and success indicators to achieve their medium- and long-term commitments, and holds semi-annualreview meetings for each unit affected by the plan. This implementation of the PDCA cycle advances sustainability.In addition, each unit—headquarters administrative divisions, domestic branches and offices, overseas locations,etc.—formulates a Sustainability Action Plan according to its business and function, the goal being to furtherentrench the foundations supporting business activities.

Efforts: Sustainability Action Plans

After the Materiality is identified, we reflect it in sustainability action plans in each business area as specificmeasures for contributing to the solution of social issues.We promote sustainability by defining the Commitment, which shows how we achieve medium- and long-termgrowth and provide value to society, and specific approach and performance indicators for achieving theCommitment.

Narrow down by Materiality

Risks Opportunities

Reinvent businesses through technological innovation

Obsolescence of existing business models resulting fromthe emergence of new technologies, such as IoT and AI.Labor shortage in developed countries, loss of excellenthuman resources in businesses in which efficiencyimprovement is delayed. And others.

Creation of new markets and provision of innovativeservices.Utilizing new technologies for optimizing humanresources and logistics, increasing competitiveness bypromoting work style reform. And others.

SDGsTargets

Issues toaddress Co Business

area Commitment Specific approach Performance indicators Degree of Progress

Next-generationbusinessDevelopment

TextileCompany

State-of-the-arttechnologies(IoT)

We will build a production ITinfrastructure that will be acommon platform of the supplychain and strive to improve addedvalue and promote sustainableindustrialization.

Introduce the production ITinfrastructure to the main bases of theGroup and contribute to theimprovement of Product, Lifecycle andManagement.

Visualize the supply chains ofthe overall Group to reducecosts, improve quality, andreduce lead time, therebydeveloping a supply systemthat can cater to marketneeds.

Multiple overseas group companieshave prepared Product Life-cycleManagement (PLM) software and weplan to begin using it from June2019. We plan to start looking intoexpanding it to supplier factories andthe ITC Sales Department from FYE2020.

State-of-the-arttechnologies(IC tag, RFID,and ECbusinesses)

We will utilize next-generationtechnologies, such as RadioFrequency IDentification (RFID)tags, to contribute to improvedefficiency, not only in the apparelindustry but also in the associatedlogistics industry.

Improve production and sales efficiencyby making use of AI, and in addition,accelerate the dissemination of RFIDtags in the clothing industry, in an effortto increase the trading volume.

Make use of AI anddisseminate the use of RFIDtags, thereby improvingproduction and operatingefficiency in the supply chain,traceability, and salescapabilities.

In FYE 2019 we reached 87 millionRFID tags sold (a 24% increase overthe previous year). We havepartnered with a leadingmanufacturer in Hong Kong in hopesof encouraging their further spreadin the domestic market.

FoodCompany

Overall food-relatedbusinesses

We will aim to improveproductivity and efficiency byutilizing RPA and AI proactively.

Introduce and utilize new technologies,especially in the sectors around retailthat are facing a serious labor shortage,thereby maintaining social convenience.At the same time, disperse humanresources to new services with the aimof further improving convenience in theconsumer-related sector.

FYE 2019: Start experimentaloperations that apply RPA andAI.

All of us, including our subsidiariesand related companies are activelyintroducing Robotic ProcessAutomation (RPA) in order toimprove productivity and efficiency.

We will aim to create innovativeservices and new business byintegrating assets and newtechnologies of the ITOCHUGroup.

Increase contact with consumers bypromoting the retail business in ourefforts to understand consumerbehaviors, and combine the wide rangeof products, functions, and expertise ofthe Group to create unique new valuethat will be profitable for consumers andcommunal society.

Promote the deployment ofnew products and newservices throughcollaborations with the retailbusiness operated by theITOCHU Group.

We are promoting new projectsrelated to electronic money etc. withgroup companies like UFHD.

ICT &FinancialBusinessCompany

Businessincubationthroughventureinvestment,focused onFinTech, IoT,AI and etc.

We will try to create newindustries with acquiring cutting-edge innovations and businessmodels such as IoT, AI, andFinTech.

Seeking chance to invest in and makepartnerships with startups, in order todevelop new businesses.

Achieve success new serviceand business development.

We have invested in just over 10startups in the fields of FinTech andhealth care. By implementing newcashless services, we are helping toimprove the distribution efficiency ofhome delivery companies, and thestore management efficiency ofretailers.

16

Risks Opportunities

Transition risk

Physical risk

Address climate change (contribute to realization of low-carbonsociety)

Reduction in demand for fossil fuels due to businessrestrictions on greenhouse gas emissions

Damage to business due to the increase in abnormalweather (e.g., droughts, flooding, typhoons andhurricanes)

Increase in renewable energy and other businessopportunities which will contribute to alleviating climatechangeRetention and acquisition of customers by strengtheningsupply structures that can adapt to abnormal weather

SDGsTargets

Issues toaddress Co Business area Commitment Specific approach Performance indicators Degree of Progress

Takingcounter-measuresagainstclimatechange

MachineryCompany

Overall powergenerationbusiness

We will develop power plantswith a good balance betweenrenewable energy powergeneration and conventionalpower generation, therebycontributing to thedevelopment of countries andregions in a sustainablemanner that is optimized foreach.

Pursue opportunities to investaggressively in renewableenergy power generationthrough analyses of countriesand regions.

FYE 2031: Target to achieve arenewable energy ratio morethan 20% (equity interest basis)and reflect this to the futurestrategy.

In FYE 2019, we accomplished followings in thefield of development of renewable energy.Launching commercial operation of the finalunit (No. 3 unit) of the Sarulla Geothermal IPPProject in Indonesia, Completion of the Saga-Ouchi Solar Power Plant in Saga Prefecture.

MachineryCompany

Sales ofpassenger carsand commercialvehicles

We will achieve the eco-friendly mobility society bystrengthening businesses ofelectric vehicles (EVs), hybridvehicles (HVs), vehicles with areduced environmentalimpact, and those related.

Contribute to spread of eco-friendly vehicles by increasingbusiness of eco-friendly andhigh-efficiency products, such asEVs, HVs, vehicles with areduced environmental impact,and related parts.

Expand sales of eco-friendlyproducts in response to theexpanded lineup of EVs, HVs,vehicles with a reducedenvironmental impact, andsimilar vehicles fromautomakers as our businesspartners.

In Japan, we participated in the field test oflight electric trucks. We invested in two projectsin China where the sales of electric vehicles isincreasing drastically.1) EV rental and maintenance service companyDishangtie Car Rental (Shenzhen) Co., Ltd.,2) Chinese emerging EV manufacturerZHICHEAUTO Technology (Shanghai) Co., Ltd.

Metals &MineralsCompany

Energy &ChemicalsCompany

Oil & Gas LNG(LiquefiedNatural Gas)Projects

Development and productionof natural resources withconsideration in the reductionof greenhouse gases.

Partnering with experiencedoperators with high technicalstrength in the development andproduction of natural resources.

Pursuing opportunities to takepart in LNG projects (i.e. LNG ornatural gas emits lessgreenhouse gases than theother fossil fuels).

We have begun concrete discussion concerningparticipation in a new liquefied natural gas(LNG) project.

FoodCompany

ProvisionsFresh foods

We will reduce the impact ofabnormal weather on thebusiness with the aim ofensuring the stable supply ofagricultural crops.

Decentralize production areas bycollaborating with Groupcompanies.

FYE 2021: Aim to develop otherareas following the Philippines inthe Fresh Produce Business.

In FYE 2019 we selected candidates for newproduction areas. From FYE 2020 on, we planto specifically promote the fruits and vegetablesbusiness in new production areas.

GeneralProducts& RealtyCompany

Cementalternativessuch as slag

We plan to expand the use ofsustainable byproducts (slag)as a substitute material forthe cement which is vital tofields like construction andcivil engineering.

Establish continuous, stablebusiness flow between ironworksas the supplier of slag and otherbyproducts and demanders.

Consider investment,participation, etc. in the slagbusiness and focus efforts oncreating demand, especially indeveloping countries, with theaim of establishing continuous,stable business flow.

MiningbusinessEnvironmentalbusinessMaterial-relatedbusiness

We will realize stable energysupply as our social missionand responsibility while fullyconsidering itsenvironmental impact.We will contribute toreducing greenhouse gasesthrough businesses relatedto lighter-weight vehiclesand Electric Vehicles (EVs).

Continue to be involved in thedevelopment of technologiesthat contribute to thereduction of greenhouse gasesemissions, includingtechnologies for carbon dioxidecapture and storage (CCS) andcarbon dioxide capture andutilization (CCU).Aim to develop an appropriateportfolio of coal assets by fullyconsidering its environmentalimpact.Strengthen initiatives inbusinesses that contribute tothe development of lighter-weight vehicles and shift toEVs (aluminum, copper, andother businesses).

Contribution to thedevelopment of a low-carbonsociety by committing totechnologies that help reducegreenhouse gases emissions.Development of an optimalasset portfolio by fullyconsidering socialrequirements, including thoserelated to the shift to a low-carbon society.Implementation and expansionof businesses that contributeto developing lighter-weightvehicles and shifting to EVs.

Carbon Capture and Storage (CCS): Wecontinue to carry out information collectionand analysis through observation andinterviews with Japan CCS Co., Ltd. andcompanies conducting CCS projects overseas.Carbon Capture and Utilization (CCU): Alongwith joining research organizations andcollecting information, we are also engaged inspecific projects.We have considered our policy towards thecoal business through actions such asanalyzing multiple scenarios based onsuggestions made by the Task Force onClimate-related Financial Disclosures (TCFD).Consequently, we publicly announced ourpolicy commitment in February 2019. This is:1) - We will not acquire new thermal coalmining interest., and 2) - Regarding theexisting thermal coal mining projects, we willcontinue to review it and contribute to thedevelopment of a sustainable society whileresponding to the social demands of stablesupply of energy to domestic and overseascustomers.The amount of transactions for aluminumcastings/die-cast materials for vehiclesincreased 6% in FYE 2019 over FYE 2018,contributing to the development of light-weight vehicles.

The volume of transactions to developingcountries is expected to increase by 50% fromthe previous year.We are engaged in continued consultationconcerning planning and investment for theslag business.

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Risks Opportunities

Cultivate a motivating workplace environment

Decline in labor productivity, loss of excellent humanresources, missed business opportunities, increase inhealth-related expenses, and other events that wouldresult from failure to take appropriate measures, andothers.

Improvement of labor productivity and health andmotivation, securing of excellent human resources,enhanced capability of responding to changes andbusiness opportunities, and other events that will resultfrom the creation of a workplace that provides jobsatisfaction, and others.

SDGsTargets



Improvingoperatingefficiencyandaddressingthe issue oflong-workinghoursthroughwork stylereform

Head-quarters

HumanResourcesAffairs

We will promote awell-balanced workingstyle and reduce thetotal number ofworking hours, aimingto improve employeeengagement.

<ITOCHU Corporation>

<ITOCHU Group>

<ITOCHU Corporation Itself>

Improvingthe health ofemployees

Head-quarters


We will improve thehealth of employeesto create anenvironment that willenable individualemployees to betterdemonstrate theircapabilities. We willbuild a system thathelps employees withcancer or long-termillness to create abalance betweentreatment and work,thereby fostering aculture of mutualsupport.

Sustainabledevelopmentofemployees'capabilities

Head-quarters


We will developtraining programs ona global basis thatrespond to thechanging times andbusiness needs. Wewill also utilizetraining programs tocontinuously produceexcellent humanresources.

Positive response rate of 71% to"education & training" items on the theFYE 2019 engagement survey.

Creating anenvironmentthat allowsdiversehumanresources toexercisetheirpotential

Head-quarters


We will prohibit alltypes ofdiscrimination,including those basedon age, gender andnationality, andrespect human rights.We will create anenvironment that willpermit the activeparticipation ofemployees whosework hours are limiteddue to childcare,nursing care, diseasesor similarcircumstances.

Promote the morning focused workingsystem.Conduct regular monitoring of employees'work situations.Promote work automation with IT tools,including the robotic process automation(RPA), as well as mobile work.Promote projects for improving theoperating efficiency at each organization.

Efficient way of working, appropriateworking hours management, andeducational and awareness-raisingactivities at the ITOCHU Group.

FYE 2021: Reduce the annualaverage overtime hours by at least10% compared to the period prior tothe introduction of the morning-focused working system.FYE 2021: Percentage of employeeswho leave the office building at20:00 or later at 5% or fewer.FYE 2021: Paid leave acquisition rateat 70% or higher.Rate of positive responses to the"employee engagement" item in theengagement survey: 70% or higher.

Hours of overtime per person: 11%reduction(FYE 2018) compared to priorto introduction (FYE 2013)Workers left 8:00 p.m. or later: 5％ (FYE2018)Leave utilization rate:66％ (FYE 2018),36% (in first half of FYE 2019)Planned to complete approximately 100scenarios for RPA in FYE 2019. Alsointroduced the data analysis tool(HANABI).Three divisions (the Fresh Food Division,Automobile, Construction Machinery &Industrial Machinery Division, andFashion Apparel Division) are planned toimplement BPR (Business Process Re-engineering) on an organizational level inFYE 2019.Positive response rate of 76％ to"employee engagement" items on thethe FYE 2019 engagement survey.

Keep the percentage of employees whoreceive regular medical checkups at 100%.Establish well-equipped in-house clinicsand a system for supporting eachemployee in receiving personalized medicalcare.Promote measures for helping employeescreate a balance between cancer treatmentand work.Offer healthy dishes in the employeecafeteria.Promote the program for supportingsmoking cessation treatment expenses.Utilize Re: Body, a health managementwebsite for employees, and continue toprovide special programs for employees atrisk for lifestyle-related diseases.

Percentage of employees whoreceive regular medical checkups:100%.FYE 2021: Improve health indicators(such as BMI) compared to FYE 2017values.FYE 2021: Percentage of employeeswho leave work due to cancer orlong-term illness at 0%.FYE 2021: Rate of employees foundto have a high level of stress in thestress check at 5% or lower.

100% participation in medical checkups(FYE 2018).Improvement of health indices (such asBMI) : -3.1% compared to FYE 2011(FYE2018).Support for living with cancer:maintained a 0% rate of job separationdue to cancer or long-term illness. Ourgoal of "balancing work and illness" hasbeen reflected in our performanceindicators from FYE 2019.Rate of high-stress individuals accordingto stress checks: 3.1% (FYE 2019)."Re:Body" usage: continuedimplementation of special program forthose at risk of a lifestyle disease (117participants in FYE 2019). Heldcompany-wide walking event.

Continue to develop and provide trainingprograms at all jobs levels.Continue and enhance overseasdeployment of interns and languagetrainees.Offer diverse career path options andexperience in diverse works throughregular rotation.Foster career awareness among employeesby enhancing personnel assessment,career vision training, career counsellingsystems and other programs/systems.

FYE 2021: Annual E&D expensesexceeding one billion yen.Rate of positive responses to the"education and training" item in theengagement survey: 60% or higher.FYE 2021: Percentage of career-trackemployees who acquire business-level English skills in their first eightyears at the company at 100%.FYE 2021: Percentage of career-trackemployees who are deployedoverseas in their first eight years atthe company at 80% or higher.

Continue fair and equitable recruitmentand promotion.Create a work climate of mutual respectand support.Reasonable accommodations concerningthe work environment of people withdisabilities.Respond to LGBT considerations andprovide employee training on LGBT.Enhance on-site day-care centers andnursing care support services.Enhance individual support for employeesprovided in accordance with their life stageand career.Promote flexible ways of working bymaking use of mobile work.Support the active participation of seniorhuman resources over 65 years old.

FYE 2021: Percentage of femalecareer-track employees among allcareer-track employees: 10%.FYE 2021: Percentage of femalecareer-track employees amongemployees in leadership positions at10%.FYE 2021: Proportion of ourworkforce with disabilities at 2.3%.

9.5% of career-track employees arefemale (as of January 2019).7.7% of supervisory positions are female(as of January 2019).Promoted human rights by carrying outtraining programs with the TokyoMetropolitan Human Rights PromotionCenter (TMHRPC). Also sharedinformation within the company aimed atmaintaining fair employment screening(July 2018).Percentage of disabled employees:2.19% (as of January 2019).

18

Risks Opportunities

Respect human rights

Business delay or business continuity risk resulting fromthe occurrence of a human rights problem in businessactivities that expands (geographically).Decline in credibility that may result from defects in thesocial infrastructure services we provide. And others.

Stabilization of business or securing of excellent humanresources resulting from harmonious coexistence withlocal communities.Establishment of safe, stable supply system for productenabled by the consideration of human rights andimprovement of work environment in the supply chain.And others.

SDGsTargets



Establishing asupply chainreflectingconsiderationfor humanrights and theenvironment

TextileCompany

Supply chainmanagement

We will promoteinformation-sharing in theoverall Group andestablish a safe, securesupply chain, therebyhelping customers withrisk reduction andcontributing to sustainableeconomic development.

Make Group-wide efforts toreview the social andenvironmental safety of thesupply chain and makeimprovements as necessary,thereby promoting theestablishment of a safe,secure commodity supplysystem.

FYE 2024: Establish andvisualize the supply chain ofthe overall Group, frommaterial procurement to sales,to ensure a responsibleprocurement policy.

In FYE 2019 we conducted an investigation of 50 ofour suppliers from the standpoint of Environmental,Social and Governance (ESG) criteria. In FYE 2020we plan to increase this to 80 companies, andcontinue to work to establish a healthy supply chain.

Improvingwater andhygieneinfrastructures

MachineryCompany

Water andenvironmentalprojects

We will contribute toimproving the hygieneenvironment, thedevelopment of economicactivities, and theprotection of the globalenvironment through theappropriate treatment andeffective use of water andwaste.

Expand water andenvironment projects topromote the appropriate useand treatment of water andthe effective utilization ofresources, and reduce theenvironmental impact.

Expand and diversify theinvestment portfolio in thewater and environment field.

Water Sector

We are participating in Water Supply and SewerageTreatment Companies in the UK and Spain, SeawaterDesalination Projects in Australia and Oman. OurProject in Oman started commercial operation in2018. We continue to invest in portfolio in the watersector.

Environment Sector

We invested in four Waste Management Projects inthe UK and awarded a 25-year Waste Managementand Resource Recovery Project in Belgrade, therepublic of Serbia in 2017.


MachineryCompany

Overallelectric powerand plantprojects

We will contribute toimproving the quality oflife of all stakeholders inthe supply chain andbusiness investmentdestinations.

Set rules on due diligencerelated to social andbusiness environmentalsafety for suppliers andbusiness investmentdestinations based on thedistinctive characteristics ofeach business, implementdue diligence, andstrengthen monitoringcontinuously.

FYE 2020: Aim to implementthe due diligence described onthe left in all new developmentprojects.

We observed ESG checklist for all new investment ofdevelopment and also checked 7 main issues onguideline of social resposibility.(Organizational Governance, Human Rights, LaborPractices, The Environment, Fair Operating Practices,Consumer Issues, and Community participaion andDevelopment.)

Sustainableminedevelopmentthat reflectsconsideration ofthe risks inoccupationalsafety andhealth andenvironmentalrisks, and thatcontributes tolocalcommunities


Miningbusiness

Establishmentof an energyresourcesdevelopmentsystem thatgoes well withlocal societyandenvironment


Exploration &Production ofOil & Gas

Contributing in thedevelopment of localsociety by advancingexploration & productionprojects thataccommodate social andenvironmental concern.

Implementation of projectsin compliance with the lawsand regulations of therespective government andinternationally-recognizedadministrative body.


FoodCompany Provisions

We will establish aprocurement system thatconforms to third-partycertification criteria andunique codes of conductof manufacturers as ourcustomers.

Proceed with discussions oftargets for the sustainableprocurement of palm oil bycollaborating with the tradingindustry organization based oncustomers' situations andindustry trends.

By 2025 we aim to switch the palm oil we handle tosustainable palm oil (RSPO/MSPO/ISPO, etc.). On thebasis of the industry trends and customers'circumstances, we are going to improve ourprocurement system to provide sustainable palm oilwith industry groups.

We will promotesustainable developmentof natural resources byfully committing to EHS(environment, health,occupational safety) andharmonious coexistencewith local communitiesin areas which weoperate.We will improve localinfrastructure such asmedical care andeducation.

Ensure the thoroughapplication of the EHSguidelines.Contribute to localcommunities throughactivities for improvingmedical care, educationand infrastructure.

Implementation of annualinternal seminars to ensureour employees are fullyaware of the EHS guidelines.Donations to medical care,education and buildinfrastructure in localcommunities.

We held internal EHS (Environment, Health andSafety) training courses for supervisors andcompany employees belonging to sections engagedin resource development. The attendance rate ofthose subject to this training was 100%.In FYE 2019, we checked five existing projects andone new project under EHS guidelines using thecheck sheet, and set follow-up items.We carried out CSR activities that contribute to thelocal community as part of each project we investin.As an original initiative, our Australian subsidiary,ITOCHU Minerals & Energy Australia Pty. Ltd., co-sponsored citizen awards in the communitiessurrounding the port of our iron ore projects.

Be compliant with HSE(Health, Safety andEnvironment) standards inthe respective governmentand the ones set byinternationally-recognizedadministrative body.Reduction of HSE issues thatinvolve serious damage tohuman beings and/orenvironment.

We are duly complying with the HSE managementstandards set by the governments and relevantauthorities.In accordance with our internal regulations, wemonitor the number of incidents, seriousness andcontents of the cases on a monthly basis,. (In FYE2019, no major operational incidents have beenreported as of the end of February.)

Start procuring coffeebeans in Latin America in away that conforms to theunique codes of conduct ofmanufacturers as ourcustomers.Participate in conferencesof RSPO, a third-partycertification body on palmoil, and start supplyingRSPO-certified oil.

Providing anenvironmentthat enables thefocus to beplaced on stableproductionactivities


Construction

We will operate industrialestates in a high-qualitymanner that will permittenant companies to focuson stable productionactivities.

Undertake furtherimprovements ofinfrastructure facilities and theservice system in industrialestates and continue diverselocal contribution activities.

We continue to carry out the following initiativesat the Karawang International Industrial City

Urbandevelopment inthe Jingu Gaiendistrict

Head-quarters

Rebuilding ofour Tokyoheadquartersby participatingin the JinguGaien DistrictCity AreaRedevelopmentProject

We will strive to contributeto the community throughthe realization ofprosperous complex urbandevelopment focused onsports, culture andcommunication.

Communicate appropriatelywith stakeholders andacquire permissions in theredevelopment studyprocess.

Submit the necessaryapplications and acquire thenecessary permissions (e.g.,plan proposal, executionpermission application andredevelopment constructionpermission).

* Because of new commitment, review will beconducted from the next fiscal year.

Establish a safe, secure,environmentally-friendlyinfrastructure, includingfacilities such as those forpower supply ,industrialwater/wastewatertreatment, security andfire prevention systems, orimprove the existinginfrastructure to make itlike the above.Create employment byinviting companies, and inaddition, promote locally-based contributionactivities.

Provide a service structure that takes into accountsafety, security and the environmentActivities that contribute to neighboring areas.1) Support for establishment of a pediatric healthcontact center, supplying baby food, providingmedical equipment to midwives.2) Provision of scholarships to Jr. high and highschool students.3) Afforestation/donating saplings to localgovernments and establishing agricultural parks.

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Risks Opportunities

Contribute to healthier and more enriched lifestyles

Decline in credibility that would result from theoccurrence of a problem related to the safety or healthof consumers and service users.Impact on business of destabilization of the market orsocial security system based on policy change. Andothers.

Increase in demand for food safety and security andhealth improvement.Expansion of information, financial and logistics servicesresulting from an increase in consumer spending orpenetration of the Internet. And others.

SDGsTargets


Promotinggood healthamong people

MachineryCompany

Sales of leading-edge medicaldevices andprovision ofmedical services

We aim to improve quality of lifeby providing leading-edge medicaldevices and advanced medicalservices in the field of medicalcare, where technologies areinnovated rapidly.

Promote sales of advancedmedical devices, such as MRI-guided radiation therapysystems, and the business ofsupporting the operation ofdesignated regional cancercare hospitals.

Increase the penetration ofadvanced medical devices inJapan, such as MRI-guidedradiation therapy systems.

We delivered radiation therapyequipment to Edogawa Hospital inAugust 2018, our second facility in Japanafter the National Cancer Center Hospitalin March 2017. We are pursuingcollaborative research with NationalCancer Center to establish nationalstandard treatment. Also, withequipment's new technology, we are ableto challeng for pancreatic cancer as wellas other intractable cancers.


Pharmaceuticalproducts

Contributing to the improvementof people’s health and workingenvironment through acceleratingthe development ofpharmaceuticals and otherproducts in fields with significantneeds including cancer-relatedfields.

Actively promoting to supportthe development andmarketing of newpharmaceutical and otherproducts.

Aiming to obtain approvals inAsia and North America for newpharmaceutical and otherproducts of which we areengaged in supporting thedevelopment, and to launchthem into the market.


We will provide value-addedservices for pharmaceuticals andmedical sites, and will contributeto improvement of people'sQuality Of Life (QOL) by utilizingcutting-edge ICT tools.

Store and utilize health dataobtained from health checkup,wearable devices, and bodycomposition scales.

FYE 2021: Managing the healthdata of 1,000,000 people.

The number of people targeted for healthdata management is increasing steadily,and is projected to reach 700,000 peopleby the end of FYE 2019. We are helpingto promote people's health by working tomake vital data visible and increasinghealth consciousness.

Supplyingsafe, securefood

FoodCompany

Overall food-relatedbusinesses

We will select and concentrate onsuppliers who are capable ofmanufacturing and supplying safe,secure food stably.

Increase the number ofpersons with internationalcertifications/qualificationsrelated to judgment on theFood Safety ManagementSystem (FSMS) to enhancethe capability of humanresources for selectingsuppliers.

Proceed with the appropriateallocation of human resources asjudges mentioned on the left tobusiness departments, with theleading role played by the foodsafety management organizationof ITOCHU Corporation.

In FYE 2019 three more personnel werecertified as ISO22000 ProvisionalAuditors. We expect a similar increase inthe qualified personnel in next fiscalyear.

Establishing alogisticsnetwork thatis adapted tochanges inconsumerbehaviors


Distribution

We will provide logistics servicesadapted to changes in distributionthat have resulted from theexpansion of the e-commercemarket in emerging countries.

Establish and promote theoperation of high-value addedlogistics services for businessoperators who sell goods usinge-commerce.

Aim to increase the tradevolume of products in the e-commerce logistics markets inemerging countries.

Maintenanceof industrial,logistics, andtransportationinfrastructure


ICTinfrastructureconstructionbusiness

We will contribute to maintainsafe, secure, and highlyconvenient social infrastructurethrough providing various ICTsolutions.

Continue to enhance the valueof ICT solutions withmaximizing newproduct/service sourcingfunctions.

Increase the number ofprocurement partners.

We have started to deal with five newsuppliers in the field of systemmanagement, etc. By providing ICTsolutions to strengthen informationsecurity, we contribute to the realizationof safe, secure and convenient socialinfrastructure.

In May 2018, our operating companybegan selling non-absorptive liquid forprotecting oral mucositis, under theapproval we received for the productionand distribution of medical device inJapan. (This liquid control and relief painof oral mucositis caused bychemotherapy or radiotherapy whentreating diseases such as cancer.) InFebruary 2019 we also gained approvalfor the production and distribution ofmedical device in China with regards tothe same medicine.We began full-scale sales of the painreliever in North America after acquiringFDA approval through our operatingcompany in February 2018.

Business ofclinicaldevelopmentsupport andpharmaceuticalmarketingsupportBusiness ofprovidinghealth caremanagementsolutions forindividuals

In FYE 2019, we forecast a 20% increasein EC logistics transactions for China'sITOCHU Logistics (China) CO., LTD.based on number of orders.We have started applying the EClogistics business model deployed inChina in India as well. We areconsidering introducing it in Indonesiaas well.

Providingfinancialservices


Domestic andoverseas retailfinance business

We work on expanding andcreating the retail financial marketand providing financial services toindividuals to contribute toenriching people's lives.

Increase the number ofcustomers and loan balanceby expanding and creating theretail financial market.

Increase of the number ofcustomers and loan balance.

We started retail financial business inPhilippines. Also, we started working onP2P lending platform in Indonesia. Loanbalance in each existing business isexpanding as well.

Energy usethat takesintoconsiderationlocalcommunitiesand theenvironment

Head-quarters

District heatingand cooling

We will promote efforts towardenvironmentally friendly regionalenergy use.

Communicate appropriatelywith neighboring stakeholdersin the Jingu Gaien district.

Submit a plan proposal thatgives our specific energy plan inthe redevelopment to the TokyoMetropolitan Government.

* Because of new commitment, reviewwill be conducted from the next fiscalyear.


Maintain the stable operations ofdistrict heating and cooling inthe Jingu Gaien district andpromote the spread of it toneighboring areas.

* Because of new commitment, reviewwill be conducted from the next fiscalyear.

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Risks Opportunities

Ensure stable procurement and supply

Impact of opposition movement resulting from theoccurrence of an environmental problem and worseningrelationship with local communities.Structural exhaustion of the overall industry caused bythe occurrence of price competition, mainly in theconsumer-related sector. And others.

Increase in resource demand attributed to an increasein population and improvement of living standard inemerging countries.Winning customer trust or creating new businesses witha stable supply of environmentally friendly resourcesand materials. And others.

SDGsTargets


Stable supplyof industrialresources andmaterials

TextileCompany

Environmentallyfriendlymaterials(sustainablematerials) suchas recycledfibers

We will accelerate initiativesfor the recycled fiber business,not only to create newbusinesses but also to helpsolve the global problem ofapparel waste and reducepetroleum-derived materials.

Work aggressively on therecycled fiber business andlead the industry in promotingthe use of sustainablematerials.

Commercialize the recycledfiber business as soon aspossible. Increase the ratio ofsustainable materials tomaterials we trade.

We are aiming to strengthen our supply chainfrom raw materials to finished products, with afocus on sustainable raw materials. Thus, wehave conducted multiple investment andplanning projects for suppliers of Lyocell andrecycled polyester and these are progressingwell.


Mining business

We will contribute to thestable operation of variousindustries by maintaining anddeveloping reliable supplychains for essential rawmaterials and fuels.

Acquire equity interests insuperior projects to secureresources to form the basis forthe steady supply of rawmaterials and fuels.

Acquisition of superiorresource projects to pass onto the future generations, inaddition to maintaining andexpanding our existingportfolio of highly resilientmining projects.

Provision ofcommoditiesthat helpachieve asustainablelifestyle

TextileCompany

Brandmarketingbusiness

We will contribute toincreasing the visibility of asustainable lifestyle by takingadvantage of our strengths asa marketing company.

Raise awareness of an ethical,sustainable lifestyle throughbrand business, therebypromoting awareness-raisingnot only in the overall industrybut also among consumers.

FYE 2021 : Take initiativeswith new brands. Have asustainable lifestyleunderstood and instilled morewidely.

This has not led to closing any contracts on anew brands that appeal to ethical lifestyles. Butwe see a need in the market and are continuingto work to achieve this.

Usingsustainableforestresources


We deal in sustainable forestresources to reduce theimpact on the environmentand prevent the increase ofgreenhouse gases.

FYE 2026: Aim to achieve arate of 100% for materialsunder high-level managementor certified ones that wehandle.

We also continue to carry out the followingfor suppliers

Realization ofsustainablesupply ofnatural rubber


Natural Rubber

We shall use our best effortsto establish measures toidentify any suppliersdeveloping on HighConservation Value (HCV)areas, High Carbon Stock(HCS) areas and peatland, inorder to avoid procuringrubber from them.

We will establish a traceabilitysystem to make uncertain rawmaterial procurement supplychain tranceparet.

We aim to procure rawmaterials with traceability andsustainability ensured innatural rubber processingbusiness.

* Because of new commitment, review will beconducted from the next fiscal year.

We have approved capital expenditure todevelop the South Flank iron ore project inwestern Australia, in cooperation with ourpartner BHP, with the goal of maintaining andexpanding our existing superior miningproject. It is an excellent mining area that cansustain operations for 25 years or morestarting in 2021.We have promoted and participated bothexisting and new copper and coking coalexploration projects. This will allow us tosecure excellent interests tied to next-generation prospects.

Woodproducts &materialsPulpWoodchips

Continue to requestsuppliers who have yet toobtain certifications to obtainthem.Conduct sustainabilitysurveys of suppliers and visitthem.

Verifying traceability by conducting individualon-site inspections.Expanding the handling of products subject to"timber traceability verification by third-partyorganizations.


TextileCompany

Supply chainmanagement

We will promote information-sharing in the overall Groupand establish a safe, securesupply chain, thereby helpingcustomers with risk reductionand contributing tosustainable economicdevelopment.

Make Group-wide efforts toreview the social andenvironmental safety of thesupply chain and makeimprovements as necessary,thereby promoting theestablishment of a safe,secure commodity supplysystem.

FYE 2024: Establish andvisualize the supply chain ofthe overall Group, frommaterial procurement to sales,to ensure a responsibleprocurement policy.

In FYE 2019 we conducted an investigation of50 of our suppliers from the standpoint ofEnvironmental, Social and Governance (ESG)criteria. In FYE 2020 we plan to increase this to80 companies, and continue to work to establisha healthy supply chain.

Sustainableminedevelopmentthat reflectsconsiderationof the risks inoccupationalsafety andhealth andenvironmentalrisks, and thatcontributes tolocalcommunities


Mining business


FoodCompany Provisions

We will establish aprocurement system thatconforms to third-partycertification criteria andunique codes of conduct ofmanufacturers as ourcustomers.

Proceed with discussions oftargets for the sustainableprocurement of palm oil bycollaborating with the tradingindustry organization based oncustomers' situations andindustry trends.

By 2025 we aim to switch the palm oil wehandle to sustainable palm oil(RSPO/MSPO/ISPO, etc.). On the basis of theindustry trends and customers' circumstances,we are going to improve our procurementsystem to provide sustainable palm oil withindustry groups.

We will promote sustainabledevelopment of naturalresources by fullycommitting to EHS(environment, health,occupational safety) andharmonious coexistence withlocal communities in areaswhich we operate.We will improve localinfrastructure such asmedical care and education.

Ensure the thoroughapplication of the EHSguidelines.Contribute to localcommunities throughactivities for improvingmedical care, education andinfrastructure.

Implementation of annualinternal seminars to ensureour employees are fullyaware of the EHS guidelines.Donations to medical care,education and buildinfrastructure in localcommunities.

We held internal EHS (Environment, Healthand Safety) training courses for supervisorsand company employees belonging to sectionsengaged in resource development. Theattendance rate of those subject to thistraining was 100%.In FYE 2019, we checked five existing projectsand one new project under EHS guidelinesusing the check sheet, and set follow-upitems.We carried out CSR activities that contributeto the local community as part of each projectwe invest in.As an original initiative, our Australiansubsidiary, ITOCHU Minerals & EnergyAustralia Pty. Ltd., co-sponsored citizenawards in the communities surrounding theport of our iron ore projects.

Start procuring coffee beansin Latin America in a waythat conforms to the uniquecodes of conduct ofmanufacturers as ourcustomers.Participate in conferences ofRSPO, a third-partycertification body on palmoil, and start supplyingRSPO-certified oil.

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Risks Opportunities

Maintain rigorous governance structures

Occurrence of business continuity risk or unexpectedloss resulting from the malfunction of corporategovernance or internal control, and others.

Improvement of transparency in decision-making,appropriate response to changes and establishment of astable basis of growth enabled by the establishment ofa firm governance system, and others.

SDGsTargets



Ensuringcompliance Headquarters Compliance

We will make employeesmore aware that ensuringcompliance at any time isour contribution to thecompany and society.

Recognizing attitude ofemployees identifying issuesand ensuring action plans totackle the issues throughperiodic survey and directcommunications.

Continuous directcommunication withemployees through face-to-face training programswhose contents shall beupdated along withmonitoring the measuresaccording to risks,expectations from societyand issues on site whichwill change with the time.

Maintainingandreinforcing agovernancesystem forachievingsustainablegrowth

Headquarters

Corporategovernance

We will implement highlyeffective supervision overthe management from anindependent and objectivestandpoint and ensure theappropriate and efficientexecution of businessoperations by improvingthe transparency of ourdecision-making, aimingto our sustainable growthas well as the medium-and long-termimprovement of ourcorporate value.

Continue to implementmeasures to strengthenthe supervising function ofthe Board of Directors,through an annualevaluation of the Board ofDirectors.

Riskmanagement

We will build a system forgroup risk managementand maintain it to managethe risk of loss and ensurethe appropriateness of ourcorporate group'soperations.

Conduct regular reviews ofrisk management systemsthat have been established,including internal committeesand risk managementdepartments, various rulesandregulations, reporting andmonitoring systems, as well asthe effectiveness of suchsystems.

Maintain a firmgovernance system in themedium- and long-termby establishing a PDCAcycle, includingdevelopment andimplementation of actionplans by the departmentsresponsible for riskmanagement, andmonitoring and reviews byinternal committees.

Based on the results of the Compliance AttitudeSurvey conducted in FYE 2018, we exchangedopinions with all Company Presidents regarding issuesand conditions relating to individual and groupcompanies.In May 2018 we carried out e-learning for allemployees of ITOCHU Corporation concerning theAntitrust Act. ITOCHU also conducted monitoring fromOctober to December 2018 concerning application ofthe Basic Regulations on the Compliance with theAntimonopoly Act, etc. that we have established, oneyear after their introduction. We are currentlyrequesting that principle group companies introducesimilar regulations (implementation expected to becompleted during FYE 2019).The state of the cyclic training conducted in FYE 2019is as follows (as of February 28, 2019).For ITOCHU Corporation: Held 42 times with 1,265attendees.For group companies (conducted for 91 companies):Held 177 times with 10,246 attendees.

Appoint several outsidedirectors, who have a highlevel of independence thatfulfills our independencecriteria and are expected tocontribute to the companymanagement with a highlevel of knowledge in theirrespective fields.Maintain a highly transparentand objective directors' andofficers' remunerationsystem, which can increasetheir motivation tocontribute to our medium-and long-term improvementof our company'sperformance and theimprovement of ourcorporate value.

We have decided to always keep 1/3 or higherpercentage of outside directors.We conducted the evaluation as to the effectivenessof FY 2019 Board of Directors, and released the resultin April 2019.

Each functional department responsible for riskmanagement has reviewed the state of progress ofthe action plans for the first half of FYE 2019.The Global Risk Management Division has compiledinformation on the risk management system—including handling of events that occurred within therelevant period—to the effect that it is functional. TheDivision reported this to the October 2018 InternalControl Committee, which has acknowledged thereport.Moreover, the Division plans to report to the samecommittee, when it is held in the first half of FYE2020, concerning the review of the latter half of FYE2019 and the FYE 2020 action plan.

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Goal 1.End poverty in all its forms everywhere

Goal 2.End hunger, achieve food security and improved nutrition and promote sustainable agriculture

Goal 3.Ensure healthy lives and promote well-being for all at all ages

Goal 4.Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all

Goal 5.Achieve gender equality and empower all women and girls

Goal 6.Ensure availability and sustainable management of water and sanitation for all

Goal 7.Ensure access to affordable, reliable, sustainable and modern energy for all

Goal 8.Promote sustained, inclusive and sustainable economic growth, full and productive employmentand decent work for all

Goal 9.Build resilient infrastructure, promote inclusive and sustainable industrialization and fosterinnovation

Goal 10.Reduce inequality within and among countries

Goal 11.Make cities and human settlements inclusive, safe, resilient and sustainable

Goal 12.Ensure sustainable consumption and production patterns

Goal 13.Take urgent action to combat climate change and its impacts

Goal 14.Conserve and sustainably use the oceans, seas and marine resources for sustainabledevelopment

Goal 15.Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manageforests, combat desertification, and halt and reverse land degradation and halt biodiversity loss

Goal 16.Promote peaceful and inclusive societies for sustainable development, provide access to justicefor all and build effective, accountable and inclusive institutions at all levels

Goal 17.Strengthen the means of implementation and revitalize the Global Partnership for SustainableDevelopment

SDGs (Sustainable Development Goals)

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Efforts: Sustainability Advisory

2018 Sustainability Advisory Board

The Sustainability Advisory Board (formerly the CSR Advisory Board)convened at Tokyo headquarters on January 10 to hold a dialog onsustainability between ITOCHU Corporation management and outsidestakeholders. The Sustainability Advisory Board was established toengage in dialog with outside stakeholders to determine whether thedirection we are taking with sustainability as ITOCHU Corporation'sbusiness grows more diverse and widespread is aligned with the needsof society, and then to apply the insights to promoting sustainability.In FYE2019, we welcomed three experts familiar with the latest trendsin the international community concerning climate change to address amain theme of "how the trading house business can help adapt toclimate change" from different perspectives: industry, academia andgovernment. In a frank exchange of ideas, they offered candid advicebased on the business' impact on society and trends at othercompanies. One of the participants said, "It's important to considerwhat kind of business model to aim for next, and to propose it with thelong term in mind. A trading house is exactly the kind of company thatcan do this." Such high expectations toward ITOCHU shared in theparticipants' views will be applied to promoting sustainability company-wide.

FYE 2019

Climate Change

FYE 2018

Review of material sustainability issues (materiality)External environment related to sustainability and promotion of sustainability byITOCHU

Overview

Sustainability Advisory Board Members (Job Titles at the Time)

Mr. Kenichi Suganuma Ambassador Plenipotentiary and Extraordinary (in charge of climatenegotiations), Ministry of Foreign AffairsMr. Tsuyoshi Mizuguchi Professor of Economics, Takasaki City University of EconomicsMr. Hidemi Tomita Director, Lloyd's Register Japan K.K.

ITOCHU Members (Job Titles at the Time)

Fumihiko Kobayashi Member of the Board, Senior Managing Executive Officer, ChiefAdministrative & Information OfficerYoshihiko Ogura General Manager, Planning & Administration Department, Metals &Minerals CompanyIsao Nakao General Manager, Planning & Administration Department, Energy & ChemicalsCompanyTakumi Imai Acting General Manager, Planning & Administration Department, MachineryCompanyYoshihito Tabe General Manager, Sustainability Management Department (served asModerator)


Ms. Mariko Kawaguchi Senior Researcher, Daiwa Institute of Research Holdings Ltd.Mr. Takeshi Shimotaya Managing Director, Sustainavision Ltd.Mr. Hidemi Tomita Director, Lloyd's Register Japan K.K.

24

FYE 2017

The Impact of Climate Change on Business Activities


Ms. Masako Konishi Deputy Director, Conservation Department and Climate Change EnergyProject Leader, World Wildlife Fund JapanMs. Mariko Kawaguchi Senior Researcher, Daiwa Institute of Research Holdings Ltd.Mr. Yoshihiro Fujii Visiting Professor, Graduate School of Global Environment Studies,Sophia University and Representative Director, Research Institute for Environmental Finance

25

When running sustainability activities, ITOCHU Corporation raises awareness within the company so as to furtherGroup employees' understanding and to apply solutions to social issues in our business in a manner that conformsto the latest global trends.

Efforts: Spreading Sustainability at ITOCHU

"ITOCHU Monthly," our in-house magazine issued every month in three languages(Japanese, English and Chinese) presents information, terminology and initiativesrelating to sustainability. There is also an annual feature on sustainability to furtherembed sustainable practices at the company.

Raising Awareness with "ITOCHU Monthly"

The online Sustainability Test and Employee Questionnaire are conducted every year for all ITOCHU Corporationexecutives and employees worldwide to further spread sustainability in the company and gauge our awareness ofthe subject.

Fiscal Year Theme Participation

2019 "ESG – Climate Change Response, Business & Human Rights" 99.9%

2018 "ITOCHU's Further Growth – ESG Investment" 99.5%

2017 CSR in the New Era for the Sogo Shosha 99.8%

Sustainabilty Test and Employee Questionnaire

26

We have been holding in-house sustainability seminars on a continuous basis since 2007 to bring in outsideinsights and ideas on various sustainability issues.

Sustainability Seminars

The panel discussion

For the sustainability seminar on "Business and Human Rights" onDecember 13, we invited Japan NGO Center for InternationalCooperation (JANIC) Secretary-General Hideki Wakabayashi and Lloyd'sRegister Japan K.K. Director Hidemi Tomita. During the first session, Mr.Wakabayashi gave a keynote address in which he shared discussions atthe UN Forum on Business and Human Rights that convened in Genevaat the end of November 2018. In the second session, Messrs.Wakabayashi and Tomita joined a lively panel discussion guided byquestions on issues people face in business settings to consider howtrading houses operating worldwide should handle human rights issues.Holding the seminar provided a fine opportunity to reexamine theresponsibilities our company should uphold in each of our businesses.

FYE 2019 Business and Human Rights (in the Supply Chain)

FYE 2018 Business and Human Rights (Development)

FYE 2017 What Companies and Consumers Can Do to Create a Sustainable Society

FYE 2016 Global Initiatives and Innovations to Implement Bold Global Warming Countermeasures

FYE 2015 Running a Business to Solve Global Issues

Recent Seminars

27

Efforts: The United Nations Global Compact

In April 2009, ITOCHU Corporation joined the United Nations Global Compact, a globalinitiative to achieve sustainable growth for the international community. The companyis "Committed to the Global Good" as part of our corporate philosophy and in line withthe United Nations Global Compact's 10 principles covering human rights, labor, theenvironment and anti-corruption.

Involvement in the United Nations Global Compact

Human Rights

Labour

Environment

Anti-Corruption

The Ten Principles of the United Nations Global Compact

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.

Principle 3 Businesses should uphold the freedom of association and the effectiverecognition 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.

Principle 7 Businesses are asked to support a precautionary approach to environmentalchallenges;Principle 8 undertake initiatives to promote greater environmental responsibility; andPrinciple 9 encourage the development and diffusion of environmentally friendlytechnologies.

Principle 10 Businesses should work against corruption in all its forms, includingextortion and bribery.

ITOCHU Corporation is the corporate director of Global Compact Network Japan (GCNJ), the local network for theUnited Nations Global Compact in Japan. Our proactive participation in this work also includes sending employeesto provide assistance with their activities.The GCNJ learns from other companies' practices and academics, and also consists of subcommittees fordeliberations and exchanging ideas on specific topics concerning approaches and initiatives for sustainability. InFYE2019, the company participated in the following subcommittees.

Work with Global Compact Network Japan

Human Rights Education SubcommitteeESG SubcommitteeEnvironmental Management Subcommittee

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https://www.unglobalcompact.org/

Other Sources of Reference

When advancing sustainability, we refer to the following kinds of international guidelines and principles, such as theTen Principles of the United Nations Global Compact and the Sustainable Development Goals (SDGs) adopted bythe United Nations in September 2015.

United Nations Global Compact (participant)GRI GuidelinesUN Declaration of Human RightsInternational Integrated Reporting Council (IIRC)UN Guiding Principles on Business and Human RightsKeidanren: Charter of Corporate BehaviorSustainable Development Goals (SDGs)*Japan Foreign Trade Council: "Shosha's Corporate Environmental Code of Conduct," "Supply Chain CSR ActionGuidelines"

Declaration on the Rights of Indigenous PeoplesCDPBasic Principles on the Use of Force and Firearms by Law Enforcement OfficialsOECD Guidelines for Multinational EnterprisesISO 26000

Sustainable Development Goals (SDGs): Following the 2015 deadline for the Millennium Development Goals(MDGs), the SDGs set goals for sustainable development by 2030. The 17 goals address issues such as poverty,starvation, energy, climate change and social equality.

*

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Stakeholder Relations

In our diverse range of corporate activities conducted worldwide, we place strong emphasis on dialogue with themany stakeholders that surround ITOCHU. By engaging in dialogue with our stakeholders in the manner describedbelow, we provide them with information about the activities of the ITOCHU Group, and identify their expectationsand concerns regarding ITOCHU. We will continue to promote our sustainability by reflecting measures foraddressing issues within our business activities, with the aim being to improve our corporate activities.

Stakeholders Main methods of dialogue

Suppliers,Customers, andConsumers

Provision of information through the Annual Report and official websiteNotification of CSR action guidelinesQuality control and fact-finding investigations about the status of CSR at suppliersContact for inquiries

Shareholders,investors, andfinancial institutions

General meeting of shareholdersInvestors meeting on business resultsProvision of information through the Annual Report and official websiteResponse to investigations and ratings performed by socially responsible investorsDebt IR

Political organization,trade association

Participation in the government, the ministries related committees and councilsActivity through the trade association(Japan Business Federation, Japan Foreign TradeCouncil)

Local communities,NGOs, and NPOs

Social contribution activities and volunteer activitiesStakeholder dialogueDialogue with residents of areas around project sitesRegular communication with NGOs and NPOs

Employees

Provision of information via the intranet and in-house magazinesCommunication via training sessions and seminars Provision of career counselingEstablishment of a 24-hour employee consultation desk system Implementation of employee awareness surveysLabor-management meetings (including management meetings and settlement ofaccountings meetings)General employee meetings at each company

Policy & Basic Approach

Besides those noted above, the list of our major stakeholders includes many other parties.*

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(Unit: 1 million yen)

Trade association 77 Social contribution (donation) 169 (163)

Economic association 95

Political association 29

Other association 158

Reference data FYE 2019: The expense of trade association and socialcontribution

31

Documents

Sustainability at the ITOCHU Groupunderstanding of what society expects of and desires from the company, which we can then apply to our efforts at advancing sustainability. Sustainability