P.10 Message from the President and CEO

10 Introduction

Message from President and CEO

Q6.

How are you responding to the current rise in geopolitical risks?

As I mentioned earlier, the business environment is changing at an unprecedented pace, driven by the emergence of geopolitical and related risks, advances in AI, and other factors. In recent years, geopolitical risks have been on the rise around the world̶due to political upheavals, conflict outbreaks, and the like̶and these risks are affecting corporate activities. Against this backdrop, it is increasingly important to appropriately analyze and respond to a diverse range of risks. These include macro-level political and economic developments, direct and indirect impacts on our businesses and supply chains, energy security risks, policy change risks, and regulatory trends. To this end, we are working to strengthen our intelligence capabilities. We have stepped up information gathering and analysis by establishing a dedicated team and launching the Intelligence Council to discuss country risk and economic security– related risks. Our aim is to identify emerging and changing risks at an early stage and analyze how they could affect our businesses and supply chains. We then consider the necessary measures and Group-wide policies, determine the appropriate course of action, and take proactive steps accordingly. For example, the recent closure of the Strait of Hormuz has affected our trading businesses with the Middle East. On the logistics front, however, we have been working with relevant parties on various measures̶such as changing ports of call, unloading cargo en route, and exploring alternative routes̶and these efforts are proving effective. Going forward, we will also focus on analyzing major risks that could have more prolonged and widespread impacts and considering appropriate responses, while carefully assessing where the opportunities and risks lie for the Company. Through these initiatives, we will strengthen our ability to address risks and enhance our resilience while creating new opportunities for growth.

Q7.

How do you position sustainability within the Groupʼs growth strategy?

Sustainability is a source of competitive advantage that underpins medium- to long-term growth in corporate value. Without conserving and restoring the global environment and natural capital, and without respect for human rights, neither human activity nor corporate growth and value creation can be sustained. That is precisely why we have not wavered from our goal of achieving carbon neutrality by 2050. At the same time, we must pursue a realistic transition toward 2050 in stages, taking into account economic conditions in each country, technological maturity, economic viability, energy security, and rising geopolitical risks. To do so, we need the ability to interpret regional needs and determine where the opportunities and risks lie. The pace and path toward decarbonization vary from region to region. That is why, rather than imposing a single solution, we must provide practical solutions tailored to the conditions of each country and region in order to accelerate progress toward decarbonization. Given growing concerns about energy security, I believe that local production and consumption of energy will become an even more important concept than ever before. The Group is engaged in renewable energy businesses around the world, including offshore wind power generation in Europe, geothermal and waste-to-energy power generation in Asia, and solar and wind power generation in India. By leveraging the expertise we have accumulated through these businesses, we will help achieve both stable energy supplies and decarbonization in each country. Sumitomoʼs Business Philosophy of “Benefit for self and others, private and public interests are one and the same” embodies the idea that our businesses should benefit both ourselves and society. Here, our aim is to transform sustainability into a competitive advantage and create economic value through socially meaningful business activities. We will continue to make this approach the cornerstone of growth that is unique to the Sumitomo Corporation Group. Businesses that contribute to sustainability might appear to involve costs or risks in the short term. Over the medium to long term, however, businesses that fulfill their social responsibilities and are valued by society will ultimately be the strongest. Enhancing both social and economic value is the key to achieving sustainable growth for the Group.