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ANNUAL REPORT 2011

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DISCOVERING OUR POTENTIAL

Sustainability

SUSTAINABILITY AT MC

CREATING SUSTAINABLE CORPORATE VALUE

Creating Sustainable Corporate Value
Aiming to Create Societal and Environmental Value Through Business Activities

Our Corporate Standards of Conduct build upon the foundation of the Three Corporate Principles and establish our expectations with regard to how business should be conducted, encompassing aspects such as commitment to enriching society; respecting human rights and striving to protect and improve the global environment. We have also established an Environmental Charter, which sets out our policy with respect to consideration for the natural environment. We conduct our business activities with reference to all these policies and principles.

Environmental and social issues have evolved over the years significantly and continue to change today. The Midterm Corporate Strategy 2012 defines the creation of "sustainable corporate value" as one of MC's core goals. To achieve this goal through our business activities, which span numerous industrial sectors, we must be quick to grasp wide-ranging changes within the environment and society. Our aim is to generate societal and environmental value while also making a contribution to addressing these issues through our business activities.

As one action to achieve this, in 2010 Mitsubishi Corporation began participating in the UN Global Compact. We have declared our commitment to the UN Global Compact's universal principles in four fields: human rights, labor, the environment and anticorruption. Guided also by the spirit of the Three Corporate Principles, we are promoting initiatives in each of these four fields.

We are also focusing our efforts on creating societal and environmental value through social contribution activities and international contribution activities overseas. We believe it is important in promoting environmental and Corporate Social Responsibility (CSR) -related initiatives to incorporate feedback from all stakeholders, based on an ongoing dialogue.

Actively Tackling Environmental Issues Based on the Environmental Charter

MC views efforts in regards to CSR and environmental affairs as one of its most important management issues. We are therefore actively engaged in promoting a range of initiatives aimed at realizing a sustainable society. These activities encompass every aspect of our business activities. The cornerstone of these activities is our Environmental Charter, which we established in 1996. This charter clearly shows our basic stance regarding environmental affairs to all stakeholders. In 2010, we revised the Environmental Charter, reflecting the fact that environmental awareness and issues evolve over time. This saw us add climate change, biodiversity, and the sustainable use of resources as new items reflecting their importance as environmental themes. Furthermore, we set out to create and improve environmental value, signaling our commitment to boosting businesses that help preserve the environment and reduce environmental impacts.

Mitsubishi Corporation Environmental Charter

At Mitsubishi Corporation we consider the Earth itself to be our most important stakeholder and are continually working towards the realization of a sustainable society through our business activities.

  • We will strive to reduce greenhouse gas emissions by continually implementing new efficiency measures and embracing new technologies.
  • We will promote the sustainable use of natural resources including energy, minerals, food stocks and water throughout our global business operations.
  • We recognize the critical importance of what ecosystems can provide and are committed to protecting ecosystems and mitigating any potential impacts on biodiversity.
  • We will strive to create and enhance environmental benefits by undertaking conservation activities and reducing our environmental footprint.
  • We will continue to actively engage and work with our various stakeholders openly and transparently and disclose information on the environmental impacts of our business operations in an appropriate and timely manner.
  • We will conduct all of our activities in compliance with environmental laws while adhering to international rules and social standards.
CSR & Environmental Framework
CSR & Environmental Framework

MC established the CSR & Environmental Affairs Committee as an organization to discuss basic policy pertaining to environmental affairs and CSR. Furthermore, we appointed a Senior Executive Vice President in charge of CSR & Environmental Affairs with responsibility for supervising activities relating to environmental policies and philanthropic activities.

Meanwhile, the CSR & Environmental Affairs Advisory Committee, which is composed of outside experts, provides advice and recommendations regarding the MC Group's CSR and environmental activities. MC greatly values the objective opinions of external specialists in helping to promote the development of business activities from a global perspective, as well as views from within the company.

ESG Management of Loans and Investments

The CSR & Environmental Affairs Advisory Committee met twice in the year ended March 2011: April and October 2010.

Screening Process for Loan and Investment Proposals

As part of MC's strategic decision-making process, all loan and investment proposals are examined by MC's Executive Committee. The screening and review process is an extensive one taking into account not only financial and legal risks but also environment, social and governance (ESG) factors as well. Proposals for some projects are examined by the Board of Directors as well.

Loan and investment decisions by the Executive Committee are based on advisory input from the Investment Advisory Committee, which in turn bases its advice on comments submitted by specialized internal departments. The process in the Investment Advisory Committee is specifically guided by the following mechanisms:

  • Analysis of environmental and social impacts as well as governances system of loans and investments for all proposals by the Corporate Staff Section and business groups.
  • Screening from an ESG perspective by the Corporate Administration Dept. and the CSR & Environmental Affairs Dept., and submission of opinion as necessary

Environmental and social screening takes into account International Finance Corporation (IFC) guidelines, Guidelines for Confirmation of Environmental and Social Considerations published by the Japan Bank for International Cooperation (JBIC), and other guidelines.

MC has also formulated a CSR checklist for consideration before advancing loan and investment proposals. In addition to screening for environmental criteria, social criteria such as human rights and working conditions are also examined with careful consideration for each country or region's unique circumstances.

Socially Responsible Investment (SRI) Indices

MC has earned a solid reputation for its past CSR and environmental affairs initiatives, and transparency in the disclosure of information. Underscoring this is MC's inclusion in various socially responsible investment (SRI) indices. (As of August 2011)

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