Mid-Term Sustainability Targets of Our 2021 Mid-Term Management Plan and Material Issues

• Mid-Term Sustainability Targets
• Management of Mid-Term Sustainability Targets

Mid-Term Sustainability Targets

In May 2019, the Sumitomo Forestry Group formulated Mid-Term Sustainability Targets that incorporate the sustainability strategies and material issues within the 2021 Mid-Term Management Plan (FY2019 to FY2021). This plan includes promoting further integration of business operations and ESG initiatives as one of the basic policies.

“The Mid-Term Sustainability Targets” is a revision of our previous Mid-Term CSR Plan based on our contributions to achieving the SDGs and the five material issues related to sustainability. Deliberations have been held in each business division and at management level, resulting in the expansion of our list of qualitative targets from 12 to 15 items.

Incorporating specific non-financial targets into our 2021 Mid-Term Management Plan has enabled us to further strengthen the link between our business and sustainability strategies. Not only does this enable us to meet the expectations of society such as SDGs, we believe it will also lead to an increase in corporate value which cannot be determined from a financial perspective alone.

Identification of Material Issues Related to Sustainability

Following the changes in the economic, environmental and social situation, in March 2015, the Sumitomo Forestry Group identified material issues related to sustainability.

The Group surveyed both internal and external stakeholders as well as outside experts, receiving responses from about 2,700 people. In preparing the questionnaire, 27 issues most closely related to the Sumitomo Forestry Group were specified, based on the Sumitomo Forestry Group’s Corporate Philosophy and Our Values, and taking into account such matters as ISO 26000, the international standard on the social responsibility of organizations, and evaluation points linked to socially responsible investment (SRI).

After incorporating management perspectives, the survey results were mapped out against axes of “management” and “stakeholders,” before determining the materiality of each issue. 12 of these issues were identified as being highly material, and rearranged into 5 issues related to sustainability.

In conjunction with the formulation of Mid-Term Sustainability Targets in 2018, we also revised some of our material issues in light of new demands from the society.

We are once again in the process of revising our material issues for the subsequent mid-term management plan that will begin in January 2022.

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Management of Mid-Term Sustainability Targets

In Mid-Term Sustainability Targets, we establish 15 qualitative targets based on contributions to achieving SDGs and on our five material issues. In addition, we specified evaluative indexes (quantitative goals) for each qualitative target item, which serve as our targets for fiscal 2021.

Each group company and department has set “Sustainability Budget” with numerical targets set for the fiscal year and engaging in initiatives to achieving these goals.

The Sumitomo Forestry Group fully implements a PDCA cycle for the progress and achievements of each target at the Sustainability Committee convened two times a year in addition to providing reports to the Board of Directors.

Relationship Between Material Issues and Business

The Sumitomo Forestry Group is building a unique value chain starting from the environment and resources business worldwide as well as procurement, distribution, manufacturing, and fabrication using a global network up through the provision of all types of housing construction and other lifestyle services. The table below indicates the each business in the value chain and 15 qualitative targets set based on the five material issues. We will promote ESG initiatives unified throughout our businesses.

• Contributions to the SDGs and Material Issues

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