2018 CSRReport CSR Report 2018 Editorial Policy Period Covered by This CSR Report Guidelines Referenced April 1, 2017 through March 31, 2018 (fiscal 2017). ■ GRI Standard Some activities conducted in fiscal 2018 are This report presents information on the standard alsocovered. disclosures. The GRI Content Index is published on the following Boundary of This CSR Report website: https://global-sei.com/csr/download/ Sumitomo Electric Industries, Ltd. and its consolidated subsidiaries (358 companies) ■ Environmental Reporting Guidelines 2012 issued In this CSR Report,“Sumitomo Electric,”“the Company” by the Ministry of the Environment of Japan. or“our company” refers to Sumitomo Electric Industries, Ltd.,“Group companies” or“affiliates” refers Efforts to Improve the Reliability of to the consolidated subsidiaries of Sumitomo Electric, the Disclosed Information and“the Sumitomo Electric Group” or“the Group” refers to Sumitomo Electric and its Group companies. ● To ensure the accuracy and completeness of the ● When quantitative information is disclosed, performance indicators, we have engaged an Sumitomo Riko Company Limited, Nissin Electric independent third party to provide assurance on Co., Ltd. and Sumitomo Densetsu Co., Ltd., which them, and the indicators subject to the assurance are listed on stock exchanges in Japan, and their are marked accordingly. In addition, comments consolidated companies are excluded. In some on our initiatives and disclosure from an external cases, Sumitomo Electric alone or only the expert in this field are published to enhance the Company and limited consolidated subsidiaries or credibility. some of the equity-method companies are included. The items referenced within such a specifically Introduction of the Disclosed Media limited boundaries are indicated in the text or Other Than This CSR Report footnotes in the table or graph. CSR promotion activities conducted by our affiliates are introduced The acquisition of ISO 14001 certification and a table in P73 to 74. showing correlation of employee support programs with relevant laws are published on the following ● For details of the boundary of data collection for website: environmental indicators, see Explanation of the https://global-sei.com/csr/download/ Boundary in P65. Date of Publication November 2018 (Last CSR Report: published in November 2017; and next CSR Report: scheduled for release in November 2019) 01 CSR Report 2018 Basis for Management Basis for Management 03 Basic Value Standards Business Outline 05 Top Message 07 Mid-term Management Plan 22VISION 09 Financial and Non-Financial Highlights Business Outline 11 Our History and Business CSR 13 Automotive REPORT 14 Infocommunications 2 018 15 Electronics 16 Environment & Energy CONTENTS 17 Industrial Materials Governance 18 R&D Group 19 Global Business Expansion 21 2017 Highlights Governance 23 Corporate Governance 25 Risk Management Group's CSR Activities 27 Compliance 29 Respect for Human Rights Group's CSR Activities 30 Relationships with Stakeholders 31 CSR Management 33 Targets and Actual Results in Fiscal 2017 / Category Core Targets for Fiscal 2018 Social Core Category 35 CSV Activities Social Contribution C ontribution 39 Social Contribution Activities Core Category Quality 41 Product Quality & Product Safety Quality Core Category Supply Chain 45 Supply Chain Core Category Human Resources 49 Diversity 53 Safe and Sound Workplace Supply Chain 57 Human Resource Development 59 To Become a Company with the Highest Level of Safety Core Category Environmental 61 Environmental Management Preservation 66 Activities to Prevent Global Warming Huma 69 Promotion of Resource Conservation and Recycling n Resources 70 Reduction of the Release of Harmful Chemical Substances 71 Initiatives to Address Water Risks 72 Environmentally Conscious Products Preservation Environmental 73 Promotion of CSR Activities in Affiliates 75 Independent Third Party Assurance Report 76 Comments from an External Expert CSR Report 2018 02 Basic Value Standards The Sumitomo Spirit The Sumitomo Spirit grew out of the guiding principles set down in his later years by the founding father of the House of Sumitomo, Masatomo Sumitomo (1585 - 1652), in Monjuin Shiigaki (the Aphorisms of Monjuin, which describes how a merchant should conduct his business). The Sumitomo Spirit has been passed down and elaborated through the history of Sumitomo, which mainly operated copper business. The essence of the Spirit was distilled in the“Business Principles” codified in 1891. Also integrated into the Sumitomo Spirit are other beliefs and principles behind business decisions, and remarks made by Sumitomo managers, which have been handed down through generations. The pioneering ideas of the Sumitomo Spirit, which also reflect today's concepts of compliance and CSR, have been steadfastly inherited as a commonly held asset of Sumitomo Group companies. Business Principles Article 1 Article 2 Sumitomo shall achieve prosperity based on solid Sumitomo's business interest must always be in harmony foundation by placing prime importance on integrity and with public interest; Sumitomo shall adapt to good times sound management in the conduct of its business. and bad times but will not pursue immoral business. Traditional Beliefs and Principles ● Attaching Importance to Technology ● Long-Range Planning Sumitomo's original copper business centered on the nanban-buki This principle is derived from Sumitomo's original experience in (foreign-style) refining technique, which at the time comprised the copper mine management which requires long-term, continuous leading edge of smelting technology. The business policy of valuing consideration. Business development with a future-looking, technology and tackling the development of new technology has long-term view, complemented by a wider perspective to ensure been a driving force in the evolution of Sumitomo business from national and social interests, is one of the factors that have made the very beginning. Sumitomo distinctive. ● Respect for Human Resources ● Mutual Prosperity, Respect for the Public Good Sumitomo's history is accentuated with events that demonstrate This phrase represents the principle that Sumitomo's business the great value that is attached to opinions of those working in the must benefit not only Sumitomo but also the nation and society in field. Over the years, Sumitomo has established a corporate culture general, and everyone in Sumitomo is required to focus not only in which frank discussions are cherished and human resources are on making money but always conduct business in harmony with given the utmost importance. Sumitomo has always considered that public interests. Also demonstrated by its more than century-long people make the enterprise and attached importance to human efforts to solve environmental problems in the Besshi Copper Mine, resources. This tradition has coexisted with the commitment this spirit has always remained unchanged at Sumitomo. among Sumitomo personnel to character cultivation. Monjuin Shiigaki (the Aphorisms of Monjuin) Masatomo Sumitomo was born in 1585 of the late Sengoku Period, in Maruoka, Echizen (now Maruoka-cho, Sakai-shi, Fukui Prefecture) as the second son of a samurai warrior family, but entered priesthood in Kyoto at the age of 12. His intelligence led him to be given the name Monjuin, after Monju Buddhist saint who embodies enlightened wisdom. He later left the priesthood and started his own business to trade books and medicines, which was the origin of the House of Sumitomo. Even after he left the priesthood, many people continued to ask for his teachings and respect his faithful instructions. The fact that the founding father was a widely respected Buddhist priest is the unique feature of the Sumitomo Group. A letter written by Masatomo Sumitomo (Monjuin) in response to a family member's Figure of Masatomo Signboard of the request for guidance on conducting business was Monjuin Shiigaki. Sumitomo (Monjuin)※ medicine shop operated by Masatomo※ Banji-nissei (do your sincere best in not only business but also every aspect of your life) Consisting of five articles, Monjuin Shiigaki contains ideas reflecting the unstable social conditions of Kyoto in the 17th century, when it was written. The preamble admonishes us to pay attention to any matters including business and work wholeheartedly on everything. This precept “Banji-nissei” has been passed down continuously, by way of hoping that each one of us in Sumitomo does not focus only on making money but improves the personality and develops the character. This lofty document urges us to persist in sincere and careful effort and to cultivate good character. Calligraphy work“Banji-nissei,” which was given by The Sumitomo Electric Group positions this “Banji-nissei” as the keyword representing Chairman Wang Jianyi of Futong Group Co., Ltd., China to commemorate the launch of joint ventures the Sumitomo Spirit. ※ Collection of Sumitomo Historical Archives 03 CSR Report 2018 Basis for Management The Sumitomo Electric Group Corporate Principles On the occasion of Sumitomo Electric's centennial celebration in 1997, the Sumitomo Electric Group defined the Sumitomo Electric Group Corporate Principles as a new management philosophy arising from the Sumitomo Spirit. The Corporate Principles underscore our basic policy of commitment to our important stakeholders--our clients, shareholders, society, the environment and our employees--and rededicate the Group to the importance of compliance and trust. Business Outline Each