Business Continuity Management System

The Sumitomo Forestry Group has established the BCM Subcommittee to respond to business interruption risks, such as natural disasters and infectious diseases, which are extremely difficult to prevent through corporate efforts and may have a significant impact on the functions of the head office. We are raising the awareness of our business continuity management (BCM) system and enhancing it, while making business continuity plans (BCPs), reviewing and improving them and conducting training based on the plans.

In fiscal 2025, the BCM Subcommittee met twice. Through this subcommittee, we inspected the status of business continuity systems at Group companies and worked to promote further development of these systems based on the inspection results.

Resilience Certification

In July 2021, Sumitomo Forestry acquired Resilience Certification (certification for organizations contributing to national resilience)*, which is given to business operators who are actively engaged in business continuity and social contribution activities. In 2019, we formulated the BCM Regulations and have been working to review and improve the BCM system. In addition, since the occurrence of the Great East Japan Earthquake, through the Wooden Home Builders Association of Japan, to which we belong, we have concluded agreements on disaster prevention and reduction with local governments around the country, and we were recognized for working to revitalize local communities and solve social issues in addition to creating safe and secure communities. In July 2025, as in July 2023, we were awarded renewal of this certification in recognition of the ongoing efforts. We will continue to accelerate our efforts to increase resilience in order to minimize the impact of business disruptions and recoveries from major disasters and pandemics.

*A system in which the Association for Resilience Japan examines and certifies businesses that are actively engaged in business continuity initiatives based on the Guidelines for Certification of Organizations Contributing to National Resilience established by the National Resilience Promotion Office, Cabinet Secretariat.

Initiatives for Continuity of Critical Operations

In the BCM Regulations, Sumitomo Forestry assumes both a crisis that may result in the suspension of head office functions and a crisis that may simultaneously cause damage affecting the residential safety of a large number of homes. Based on these assumptions, we have formulated a business continuity plan (BCP). This BCP specifies key operations, such as confirming the safety of employees and their families and making various payments. It also includes measures such as establishing a system that enables the continuation of important operations at two bases—Tokyo and Osaka—and conducting remote backups of various systems and data necessary for carrying out operations in the event of an emergency.

Training and Education Activities

Sumitomo Forestry is conducting emergency response training to enhance its ability to respond to a disaster.

In particular, our head office in Osaka, where the executive officer in charge of BCM has been assigned since 2024, conducted an initial response drill in April and November 2025, assuming the occurrence of a large earthquake directly beneath the Tokyo metropolitan area, which will necessitate the Osaka head office to respond to the needs of customers in the housing business. Moreover, in December 2025, we conducted a drill assuming the occurrence of a Nankai megathrust earthquake in Tokyo.

Through these drills, we are working to establish an information sharing system and examine a decision-making process to be implemented in the event of a disaster as well as measures to make prompt and appropriate responses after the occurrence of a disaster,

Strengthening Business Continuity Plans across the Supply Chain

In order to prepare for the potential disruption of its housing business supply chain following a disaster, Sumitomo Forestry shares the data about the building specifications and construction processes adopted in its housing business as well as information about the progress made at its construction sites with its business partners including component makers and building contractors. By enabling the advanced procurement of materials and production in this way, we are striving to reduce the risk of a disruption to our operations. However, there were some delays in material procurement and constructions due to the worldwide spread of COVID-19 in 2020.

In light of this situation, if a supplier is affected by an earthquake or other natural disaster or accident such as fire, we ask the supplier about the extent of damage and make every effort for continued supply from the supplier. We are now exploring ways to reinforce this system, including systemization for more quickly ascertaining the actual situation at affected suppliers. In addition, Sumitomo Forestry works to build a system to secure at least two suppliers for each material to be procured (or a supplier who has at least two production bases for the material) as a general rule to ensure preparedness against these types of unforeseen situations.

To address delays in the procurement of materials, we are having continuous discussions with suppliers. As a short-term measure, we are asking suppliers where delays have occurred to increase inventory. As a medium- to long-term measure, we are working to reduce risks through the decentralization of production facilities—for example, by the establishment of production sites in multiple countries rather than relying on a single country.

Sumitomo Forestry also reviews its suppliers of materials, with supplier evaluations conducted every year for determining whether to continue business with them. Business continuity items, such as systems for ensuring alternative supply routes during a disaster, have been added to these evaluations. We will continue these efforts to further reduce risks that may interrupt our business operations in the future.

Continuity of Customer Service

Sumitomo Forestry has call centers in Tokyo and Okinawa to provide 24-hour, 365-day after-sales service and respond to a range of inquiries from customers.

For the call centers, Sumitomo Forestry has also developed a mechanism against a disaster. Specifically, if either of the call centers is affected by a disaster, the other call center will take over the disaster-affected center’s functions until its recovery. Through our centralized emergency system, we can share the information about the damage caused to owners of Sumitomo Forestry homes nationwide, enabling us to make prompt responses to disasters and respond quickly to the owners’ requests for repairs.