Itochu

Stakeholder engagement
The company discloses the frequency and channels it uses to engage with its stakeholder groups.

Sustainability strategy and accountability
The company has group-wide targets on key sustainability topics for the most material parts of its value chain.

Ecosystem conversion and restoration
The company is committed to minimizing ecosystem conversion and discloses various activities to achieve this goal.

GHG emissions
Itochu has a time-bound target to reduce its scope 1, 2 and 3 emissions and reports progress against these targets. Additionally, the company reduced its scope 1, 2 and 3 greenhouse gas emissions compared to the previous year.

Solid and air pollution
Itochu is reducing the production of hazardous waste and demonstrates an active commitment to plastic use reduction and transitioning towards sustainable packaging. The company also reports regularly on air quality parameters of emissions of harmful air pollutants.

Water
Itochu reports how much water is withdrawn for its own operations in water-stressed areas. The company also demonstrates reducing water withdrawal in its own operations.

Indigenous Peoples’ and land rights
Itochu is committed to respecting Indigenous Peoples’ rights. Also, the company discloses its processes to identify and recognise the rights of Indigenous Peoples when activities in its own operations may impact their rights, and describes how it obtains Indigenous Peoples’ free, prior and informed consent.

Act ethically
The company has a strict policy against bribery and corruption, which is applied consistently throughout its operations. It also includes specific anti-bribery and anti-corruption clauses in all contracts involving direct business relationships.

Provide and promote decent work
The company provides information about the percentage of women in its workforce for different employee categories. it also discloses a target to implement a general employer action plan by the end of fiscal year 2024. This plan includes having 25% of new employees female, 25% of the overall workforce consist of women, and 9% of the managerial positions held by women.

Respect human rights
Itochu has made a publicly available policy statement that demonstrates its commitment to human rights. It has established a direct hotline accessible to all workers. This hotline allows workers to raise complaints or concerns, whether related to the company’s practices or human rights issues, using their real names or anonymously. Additionally, the company discloses its processes for identifying human rights risks and impacts within its own operations. It conducts human rights risk assessments through group company fact-finding surveys, which involve on-site visits alongside external experts.

Extending its efforts to its supply chain, the company has a publicly available policy statement which expects suppliers to respect the core labour rights established by the International Labour Organization (ILO). It also conducts supplier surveys as part of its due diligence process.

Lobbying
The company has an opportunity to disclose a list of trade associations of which it is a member. Additionally, it has an opportunity to disclose a clear and detailed framework for assessing the alignment of its trade associations with its sustainability targets and to report (potential) misalignments.

Stakeholder engagement
The company has an opportunity to disclose an overview of the issues raised during its stakeholder engagement activities.

Sustainability strategy and accountability
Itochu has an opportunity to disclose its process for identifying and prioritising its most relevant sustainability topics and impacts. Also, it reports consistently against some targets including social inclusion, water, climate and ecosystem conversion. However, it could report consistently against all its targets. Additionally, while the company discloses a remuneration policy related to sustainability, it has an opportunity to link this policy to improvement in nature-related objectives and social issues. Lastly, it could further disclose whether its highest governance body has expertise with respect to the company’s most material sustainability topics.

Ecosystem conversion and restoration
Itochu does not have a commitment to ensure zero conversion. While the company discloses some evidence of addressing conversion, this does not guarantee DCF-aligned practices.

Furthermore, Itochu is not committed to restoring ecosystems and it does not disclose details and outcomes of ecosystem restoration projects in areas affected by its own operations or by its suppliers.

GHG emissions
Crucially, all its scope 1, 2 and 3 targets need to align with a 1.5-degree trajectory.

Impact and dependencies assessment
While Itochu conducts assessments to identify the environmental impacts of its operations and across its product lifecycle from raw material procurement to disposal, it has an opportunity to disclose the results and methodology of these assessments. Although the company acknowledges its dependence on natural resources, it has yet to identify and disclose its specific dependencies on nature, both within its own operations and in its upstream business relationships.

Invasive species
The company has not identified any activities that could lead to the introduction of invasive alien species in its own operations.

Key areas and species
While Itochu discloses two species within or near its own locations, there remains a lack of disclosure regarding all species present as well as the status of those species in accordance with national and international conservation lists. Additionally, the company only discloses select locations within its operations that are in or adjacent to important biodiversity areas. Furthermore, the company does not disclose the locations of its suppliers situated in or near vital biodiversity areas, nor does it provide information on species populations within its suppliers’ locations.

Resource exploitation and circularity performance
Itochu has the chance to disclose all its inputs in compliance with international standards. Currently, the company does not provide quantitative reports on its group-wide circularity performance. There is also an opportunity for the company to reveal its efforts towards enhancing soil health or agrobiodiversity in its production or sourcing practices. Additionally, the company could establish and disclose a target focused on improving soil health in its production or sourcing practices, along with reporting its progress in achieving this goal.

Solid and air pollution
Itochu should commit to avoid developing or marketing new chemicals or products with SVHC (substance of very high concern) properties, as well as work on reducing the production of hazardous substances. It has an opportunity to disclose quantitative evidence regarding plastic use reduction and use of sustainable packaging, including the amount of plastic waste generated and proportions directed from or to disposal. The company could also report time-bound targets to reduce air pollutants across the most material parts of its value chain.

Water
Itochu has an opportunity to further improve water withdrawal by setting a time-bound target and engaging with suppliers. Furthermore, it does not disclose relevant information on water pollution or rights to water in its operations or supply chains.

Indigenous Peoples’ and land rights
The company does not show if it is committed to respecting Indigenous Peoples’ rights or land rights of local communities.

Safe, clean, healthy and sustainable environment
The company provides a public statement regarding the harmonious coexistence of communities. However, it has an opportunity to commit to respecting local communities’ right to a safe, clean, healthy and sustainable environment, and to zero tolerance for acts of violence, threats, intimidation or judicial harassment committed against land and environmental rights defenders. Moreover, it should track its actual or potential negative impacts on the health of local communities.

Act ethically
Itochu has an opportunity to provide a clear description of its process for identifying bribery and corruption risks in specific locations or activities related to its operations. Additionally, it should clarify if all stakeholders have access to the mechanism for reporting bribery and corruption concerns.

To further enhance transparency, the company should consider establishing a policy that outlines its approach to lobbying and political engagement. While the company mentions that political donations will be made in accordance with public information disclosure standards, it could also disclose whether these donations are exceptional and provide the criteria for making them.

In order to promote transparency and accountability, the company could disclose its expenses related to lobbying activities. Furthermore, it has an opportunity to state that third-party lobbyists are expected to adhere to the company’s lobbying and political engagement policy.

Provide and promote decent work
To solidify its commitment to workers’ health and safety, the company can formalize its stance in a publicly available policy document. Additionally, it can disclose how it monitors the health and safety performance of its suppliers.

Although the company states that it pays minimum wage to its employees, it can further demonstrate its dedication by committing to pay a living wage and establishing a time-bound target for achieving this goal. It can also clarify how it determines what constitutes a living wage in the regions where it operates.
Furthermore, the company can enhance its expectation of supplier wages by adding a requirement for them to pay a living wage. In doing so, the company should also disclose how it supports suppliers in meeting this requirement.

While the company has acknowledged gender equality and women’s empowerment in a statement, it has the opportunity to translate these ideals into a comprehensive public policy document. Currently, the company has a board with only 20% female representation. By disclosing that it aims to have at least 30% women on the board, the company can showcase its commitment to gender diversity.

Respect human rights
Itochu’s policy statement commits to respecting certain workers’ rights. However, it has the opportunity to address all the fundamental rights at work outlined by the International Labour Organization (ILO), such as freedom of association, collective bargaining, and protection against forced labour, child labour, and discrimination.

While the company does discuss its process for evaluating human rights risks, it could further enhance its transparency by disclosing what it considers to be its most significant human rights concerns. Furthermore, the company has the potential to reveal a global system that addresses, prevents, or mitigates these salient human rights issues.