P.42 Sustainability Management (Natural Capital and Respect for Human Rights)

42 02. Foundations for Accelerating Transformation

Sustainability Management

Natural Capital｜ https://sumitomocorp.disclosure.site/en/themes/27 ▶

Natural capital initiatives

The Group operates various businesses, including infrastructure, mining, forestry, and agriculture, that are heavily dependent on nature. Therefore, we believe that making decisions with natural capital in mind is essential to ensuring the sustainability of our businesses while minimizing environmental impacts. Based on our medium-term targets for natural capital under our Material Issue, in FY2024, we clarified our definition of what it means to become “nature positive” as follows: “Minimize the impact of our businesses on natural capital and continue to transform our business to preserve and regenerate natural capital.” We are also working to embed this concept across our organization. Through our businesses, we will accelerate efforts to both reduce risks and create opportunities aimed at conserving and restoring natural capital.

Risk mitigation

We made disclosures in September 2025 in accordance with recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD). For our FY2026 disclosure, we expanded the scope of our analysis to cover our entire value chain. We also assessed our dependencies and impacts on nature, together with the related risks and opportunities, to support risk reduction across the value chain.

Key changes from previous disclosures

For further details, please refer to our Sustainability Disclosure website.

Creating opportunities

We note the existence of business opportunities for products and services that promote the shift toward a nature-positive and circular economy. In addition to pursuing businesses with near-term commercialization potential, we are undertaking proof-of-concept projects, as shown below, with a view to future commercialization.

• Joint research into commercialization of domestic production technology for recycled yellow phosphorus
• Feasibility study for commercial production of silicon carbide (semiconductor material) from CO2 and silicon-based waste
• Feasibility study for battery recycling business development in Oceania Respect for Human Rights｜ https://sumitomocorp.disclosure.site/en/themes/30 ▶

Human rights initiatives

Revision of Human Rights Policy

In response to changing international expectations and business conditions, we revised our Human Rights Policy in 2026. We added two new priority areas̶“Technology and Human Rights” and “Environment and Human Rights”̶and reorganized our most significant human rights issues into nine priority areas. We also incorporated information on our remediation efforts and the implementation and operation of our grievance mechanism. In addition, we clarified the Management Councilʼs approval process and oversight responsibilities. At the same time, we renamed the Supply Chain CSR Action Guidelines, revised in 2013, the Sustainable Supply Chain Policy and added provisions on corrective guidance for business partners. We will continue our efforts to promote understanding and adoption of the policy.

Implementation and progress of human rights due diligence

To identify, prevent, and mitigate adverse human rights impacts arising from the Groupʼs business activities and value chain, and to provide appropriate remediation and remedy, we began conducting human rights due diligence in 2020 and developed a Group-wide high-risk business map in FY2024. In FY2025, we began conducting focused human rights due diligence on the electronic materials (EMS*1) business, one of the businesses identified as high risk. Sumisho Global Electronics, which operates this business, is involved in a wide range of processes, from design support and electronic component procurement to printed circuit board assembly and final product assembly, and operates in 10 countries. Given the breadth of these operations, we determined that this business warranted priority attention in order to gain a more detailed understanding of human rights risks and consider appropriate response measures. In FY2026, we plan to conduct on-site assessments and consider necessary response measures based on the findings. *EMS：Electronics Manufacturing Services

High-risk business map

Salient human rights issues related to business activities*2

*1 EMS: Electronics Manufacturing Services *2 For details, please refer to the Human Rights Policy