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

Ratings in the table below
Achieved:◯ Not achieved but improved from previous year:△ Not achieved and declined compared to previous year:✕

Reinforcing Risk Crisis and Compliance Structures

Specific steps based on issues and strategies Indicators for Evaluation Managing department FY2020 target FY2020 result FY2020 value 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
Specific steps based on issues and strategies Indicators for Evaluation Managing department FY2020 target FY2020 result FY2020 value FY2021 target
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 Major group companies in Japan Implemented independently by Sumitomo Forestry Not applicable as the initiative is implemented every other year
Specific steps based on issues and strategies Indicators for Evaluation Managing department FY2020 target FY2020 result FY2020 value FY2021 target
Obtain external certification for Business Continuity Management (BCM) Obtaining resilience certification General Administration Department Sumitomo Forestry and all major domestic group companies Not obtained Sumitomo Forestry and all major domestic group companies
Specific steps based on issues and strategies Indicators for Evaluation Managing department FY2020 target FY2020 result FY2020 value FY2021 target
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 More comprehensive informational disclosure through the Sustainability Report, etc. Completion of re-examination of analysis results for all business departments, and incorporation into the subsequent mid-term plan.

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Toward the Future

In February 2020, Sumitomo Forestry conducted a questionnaire to survey employee awareness about compliance. This questionnaire scheduled once every two years will broaden the scope of the survey set for 2022 by including affiliate companies as well. Although Sumitomo forestry did not obtain the Resilience certification in the year under review, we aim to acquire the certification in fiscal 2021.

We implemented TCFD scenario analyses in two departments: the domestic housing business as well as the timber and building materials business. In fiscal 2021, we plan to re-analyze these two departments while expanding the scope and disclosing information about these measures after reviewing future implementation methods and systems.

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Sustainability Report