In FY2017, as part of our effort to strengthen ESG risk management, Marubeni conducted research and analysis of all products and projects handled by the company for potential ESG risks, through collaboration with an external consultant with objective perspectives and methods.

For the risk analysis, we referred to the ESG risk-related data published by international organizations, government organizations, research institutions, NGO organizations, etc., then narrowed down the focus to approximately 30 products and projects that are generally likely to have potential ESG risks, and applied detailed risk analysis on them.

Risk Research in the Supply Chain

Marubeni shares the Basic Supply Chain CSR Policy (hereinafter “Basic Policy”) with the suppliers, and thoroughly requests them to comprehend, as well as cooperate and comply with the Basic Policy. We conduct due diligence analysis and risk assessment through questionnaires and on-site surveys, to all suppliers, new and existing. When a non-compliance case is confirmed, we provide guidance or reconsider doing business with the supplier. By ensuring widespread and thorough understanding of the Basic Policy, we work to reduce social and environmental risk.

ESG Risk Research/Analysis Process

1.Preparation for ESG risk evaluation

Review and organize all products/projects handled by the company

2.Conduct ESG risk primary evaluation/analysis

Step 1: Conduct ESG risk evaluation for all products/projects ⇒ Specify high-risk products/projects
Step 2: Conduct risk evaluation of high-risk products/projects by ESG issue ⇒ Narrow down to the final list of high-risk products/projects

3.Conduct ESG risk secondary evaluation/analysis

Step 1: Create risk profiles of the final high-risk products/projects
Step 2: Conduct general ESG country risk analysis for Marubeni’s supplier/project countries

General Environmental/Social Risk Evaluation in Supplier/Project Country (for image only)

• General ESG country risk evaluation		Supplier/project country
  		Country A	Country B	Country C	Country D	Country E
  Environment	Biodiversity	■high	■low	■very high	■high	■low
  	Water use	■moderate	■moderate	■moderate	■low	■high
  	Climate change	■low	■low	■high	■high	■low
  	Natural disaster/ pollution	■high	■low	■moderate	■low	■high
  Social	Working hours	■moderate	■high	■moderate	■low	■low
  	Wages	■low	■low	■low	■low	■high
  	Forced labor	■low	■low	■high	■low	■low
  	Child labor	■high	■low	■moderate	■low	■moderate
  Governance	Corporate governance	■moderate	■high	■moderate	■very high	■moderate

  * The levels for each country in the chart are not representations of actual research results

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4.Steps for the Future

From FY2018, we will take a step-by-step approach to make detailed analyses according to Marubeni’s products/projects, and examine the need for ESG risk reduction measures.