Material Issue 5: Corporate Ethics and Governance Structures

Basic Policy

The Sumitomo Forestry Group is reviewing its philosophy system to reflect globalization, diversification, and expansion of our business. Our sustainable management formulated based on our Corporate Philosophy, Our Values, and Code of Conduct also complies with international standards and initiatives as well as other social demands. We are also working to reinforce the mechanism for managing business risk—which also encompasses Group companies—by constantly managing prioritized risks through the Risk Management Committee while strengthening Business Continuity Management (BCM) system against disasters.

Management of Material Issue 5

Within our Mid-Term Sustainability Targets, our Material Issue 5 “Reinforcing risk crisis and compliance structures” is reflected in one broad goal, which we incorporate into our management practices through inclusion in annual activity policy and measures for each department. We also assess the impacts that the material issue has on society and the environment.

 

Targets of Material Issue 5

  • Reinforcing risk crisis and compliance structures

Impact on Society and the Environment

Targets of Material Issue 5 Impact (Influence)
Reinforcing risk crisis and compliance structures
  • Enhancing corporate value (especially for shareholders)
  • Consistently supplying products and supporting the businesses of our suppliers by quickly recovering business in times of emergency

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Management of Each Target

Reinforcing Risk Crisis and Compliance Structures

Specific steps based on issues
and strategies
Indicators for Evaluation Managing department FY2019
target
FY2019
result
FY2019
value
FY2020
target
FY2021
target
Progress check of prioritized risk items set by the Risk Management Committee and share materialized risks Progress management for prioritized risks (conducted on a quarterly basis by the Risk Management Committee) (%) General Administration Department 100 100 100 100
Understand the extent of compliance awareness and enhance channels for reporting misconduct and compliance violations Regular implementation and phased deployment of compliance awareness surveys General Administration Department Sumitomo Forestry Sumitomo Forestry Major group companies in Japan All group companies in Japan and some group companies overseas
Obtain external certification for Business Continuity Management (BCM) Obtaining resilience certification
General Administration Department Sumitomo Forestry Not obtained Sumitomo Forestry and all major domestic group companies All major domestic group companies
Analyze and disclose potential financial impact from climate-related risks that could (potentially) have on the organization Conduct scenario analysis and disclosure consistent with guidance from the Task Force on Climate-related Financial Disclosures (TCFD) Sustainability Department Re-examination of analysis results and expansion of scope of application for two sectors: domestic housing business and timber and building materials business Implement for two sectors, domestic housing business and timber and building materials business Re-examination of analysis results and expansion of scope of application for two sectors: domestic housing business and timber and building materials business Completion of re-examination of analysis results for all business departments, and incorporation into the subsequent mid-term plan.

* Rating
Achieved:◯ Not achieved but improved from previous year:△ Not achieved and declined compared to previous year:✕

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Toward the Future

In fiscal 2019, Sumitomo Forestry conducted a questionnaire to survey employee awareness about compliance. In fiscal 2020, we plan to analyze these results to assess the current state of understanding, better the corporate climate, and heighten awareness. To expand the scope of this assessment, we plan to conduct the same questionnaire at some of our affiliated companies. Although Sumitomo forestry did not obtain the Resilience certification in the year under review, we and our affiliated companies aim to acquire the certification in fiscal 2020.

We implemented TCFD scenario analyses in two departments: the domestic housing business as well as the timber and building materials business. In fiscal 2020, we plan to re-analyze these two departments while expanding the scope and disclosing information about these measures.

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Sustainability Report