The Idea of Materiality for Marubeni Group

Fundamental Materiality

The Marubeni Group has identified three categories of Fundamental Materiality for living by our Management Philosophy, building a better tomorrow, and accomplishing the goal of ensuring sustainable growth for the company.

1. Human Capital with High Social Value
2. Robust Management Foundation
3. Governance for Coexistence with Society

1. Human Capital with High Social Value
We regard human resources as our most valuable asset in meeting environmental and social demand, and proactively providing solutions. We define “Human Capital with High Social Value” as individuals who are essential not only to the company but also to society. We will nurture Human Capital with High Social Value, and thereby bring about innovation and provide solutions.

To us, Human Capital with High Social Value means:

• Individuals who observe laws and act in conformity with accepted international customs, and who also maintain high ethical standards for the good of society.
• Innovative individuals with the foresight, insight and creativity needed to anticipate social change.
• Individuals with sound judgment and the ability to make correct decisions and act quickly.
• Individuals with the communication skills to truly address the demands of society, with a sense of purpose and responsibility, while also being attuned to the realities of the marketplace. These attributes are the foundation of decision-making, decisiveness and the ability to execute.

2. Robust Management Foundation
We have identified Robust Management Foundation as the second category of Fundamental Materiality, as we believe it is necessary both for maximizing the potential of our human capital and for maximizing corporate value.
We must build a foundation that facilitates the activities of our human capital and establish a truly Robust Management Foundation. If we cannot accomplish this, our human capital will not be able to continue innovating and providing solutions. Enabling our human resources to use our management foundation to the fullest will ultimately lead to maximizing corporate value.

To us, Robust Management Foundation means:

• A fundamentally sound management foundation with a strong brand presence, reputation, sales foundation and network, and financial footing.
• A corporate climate and culture that is capable of producing abundant Human Capital with High Social Value, and can enable that human capital to engage in meaningful work.
• An environment that places importance on the ability to create diverse values and generate quality solutions within a diverse and inclusive organization.

3. Governance for Coexistence with Society
We will endeavor to increase corporate value based on a Robust Management Foundation in which Human Capital with High Social Value develops innovative ideas and continues providing solutions.
Within that framework, and given social expectations and demands, we believe that strengthening our corporate governance system for improved coexistence with society is important to all of our stakeholders. We will deepen our engagement with diverse stakeholders, enhance the effectiveness of the Board of Directors’ oversight function, and bring greater transparency to our management in order to build a governance framework that allows for improved coexistence with society and works toward achieving sustainability.

Environmental & Social Materiality

The Sustainable Development Goals (SDGs) adopted by the United Nations in September 2015 are goals for achieving sustainability and leaving the world a better place for future generations shared by governments, the private sector and civil society. In recognition of this, the Marubeni Group has identified the following four categories of Environmental and Social Materiality in which it can truly make a valuable contribution.

1. Climate Change
2. Sustainable Forestry
3. Human Rights & Co-development with Communities
4. Sustainable & Resilient Value Chains

In addition to the 17 goals and 169 targets of the SDGs, and taking into consideration stakeholders’ expectations and interests as well as the environmental and social impact of our business, our categories of Environmental and Social Materiality are based on the criteria described below. Building on initiatives set out through our Fundamental Materiality, we will contribute to achieving the SDGs and work toward building a better tomorrow.

1. Climate Change

Climate change, which is responsible for phenomena such as global warming, changes in the natural environment and more frequent natural disasters, is a global issue with a broad impact on social and environmental sustainability.
The Marubeni Group has business operations throughout the world, and views climate change as a serious risk. However, we also believe that it presents business opportunities.
We see contribution to climate change mitigation and adaptation as a category of Environmental and Social Materiality. We contribute to climate change countermeasures mainly through the following policies:

・We view climate change-related transfer risk as a business opportunity, and we aim to increase our “Green Revenue” of 700 billion yen in FY2017 to 1.3 trillion yen by 2023.

Green revenue, a part of our business contribution to climate change countermeasures, includes the following.

• Sales of products certified as contributing to sustainable forestry, fisheries, etc.
• Sales from businesses (real estate, etc.) contributing to lessening environmental impact
• Sales from businesses dealing in power generation from renewable energy sources
• Sales from businesses contributing to propagating EV (electric vehicles)
• Sales from businesses (recycling-related, etc.) contributing to waste reduction
• Sales from businesses (water business, etc.) contributing to efficient use of resources

・The Marubeni Group recognizes the importance of climate-related financial disclosures. As new measures to counter climate change, in addition to affirming the recommendations of the TCFD^*1, we will endeavor to better understand the financial impact of both the risks and opportunities brought about by climate change, and also engage in improved climate-related financial disclosure.

• TCFD (Task Force on Climate-related Financial Disclosures): Established by the Financial Stability Board (FSB).

2. Sustainable Forestry

Forests are a precious resource and enrich life on Earth in many ways. The Marubeni Group currently holds around 120,000 hectares of tree plantations across the world (total gross project area is around 300,000 hectares). These forests are run according to management methods for sustainable forestry.
To build a better tomorrow, we have adopted a Forest Management Policy and a Procurement Policy (for Wood-derived Products) to conserve and sustainably use valuable forest resources. By operating our businesses in accordance with these policies, we will promote sustainable forest management and contribute to forest conservation.

3. Human Rights & Co-development with Communities

Due to the globalization of economic activity, serious abuses of human rights against workers and local residents are taking place in relevant countries and regions. Many of these abuses can be remedied or improved by taking human rights into consideration in business activities, and there are growing expectations that businesses should play a role in remedying human rights abuses.
The Marubeni Group does business in 130 locations domestically and internationally^*2 and employs over 50,000 people^*3 of many different nationalities and ethnicities. We are active in a wide range of businesses and conduct global, multi-faceted activities.
To create a better tomorrow, we take a sincere approach to dealing with human rights issues facing the international community. As part of our initiatives, we have included the three basic principles of the United Nations’ Guiding Principles on Business and Human Rights: 1) respect for human rights, 2) due diligence on human rights, and 3) redress in our Basic Policy on Human Rights.

• As of March 31, 2024
• Number of employees of the Group: 50,200 as of March 31, 2024

4. Sustainable & Resilient Value Chains

The Marubeni Group deals with thousands of suppliers in conducting transactions and operating a wide range of businesses on a global scale. We believe that we make important contributions to sustainability through environmental conservation and sustainable social development initiatives throughout our supply chain. To build a better tomorrow, we have identified Sustainable and Resilient Value Chains and working together with our business partners as an essential category of Environmental and Social Materiality. In addition to managing the supply chain, we will also involve buyers of our products and enhance the strength and competitiveness of our entire value chain, which includes not only the Marubeni Group but also our business partners.
As part of our sustainability initiatives, together with stakeholders, we, including our business partners, adopted our Basic Supply Chain CSR Policy in 2008 to manage our supply chain. Subsequently, to advance understanding of and cooperation with the spirit of this Policy, we sent the Policy to suppliers, conducted surveys, and dispatched personnel to suppliers’ manufacturing or production sites to conduct direct on-site inspections. Since we believe that value chain management is important, we will continue taking initiatives toward both suppliers and buyers of our products to resolve issues in this area.
In addition, we have revised our Basic Supply Chain CSR Policy, adopting new Basic Supply Chain Sustainability Policy^*4.

• From FYE 3/2021 to FYE 3/2023, we noticed a total of approximately 23,000 Tier 1 suppliers in the Group of the Basic Supply Chain Sustainability Policy and the Marubeni Group Basic Policy on Human Rights.