P.59 Risk Management

59 02. Foundations for Accelerating Transformation

▶ Sumitomo Corporationʼs Corporate Governance System｜ https://sumitomocorp.disclosure.site/en/themes/37

Risk Management

Basic policy and framework

We define “risk” as “the possibility of losses due to the occurrence of anticipated or unanticipated situations” and as “the possibility of not achieving the expected return on business activities.” We identify and manage risk factors for each business and have set three items as the goals of our risk management activities: “Stabilize performance,” “Strengthen the financial base,” and “Maintain our corporate reputation.” For each risk factor, in addition to autonomous responses taken by each business group, we implement responses by corporate departments and receive support from various committees consisting of members with specialized expertise. Regarding major risks that have a significant impact on our business operations, we have established a system for monitoring and making decisions at the Management Council and Board of Directors levels. In response to the growing macro risks arising from factors such as geopolitical developments and climate change, which can have both short-term concentrated impacts and long-term widespread effects, the Management Council and the Board of Directors continuously discuss the potential implications for the Companyʼs business operations and the corresponding mitigation measures. Through these discussions, we are working to further enhance and strengthen our risk management framework.

▍Risk factors and key countermeasures