Integrated Report 2020 For the year ended March 31, 2020 Integrated Report 2020 Opening the Way www.mitsubishicorp.com Printed in Japan Business Management Model To meet the needs of society, the Mitsubishi Corporation (MC) Group seeks to achieve growth together with society through a business management model that relies on three core strengths: the collective capabilities to adopt a holistic view across numerous industries, the foresight to identify New Seeds of Growth, and the execution skills to achieve growth. Business Management Model Management Professionals Through its more than 130 Business Units and a global The key to achieving this shift from a business investment network of around 1,700 companies in 90 countries and model to a business management model will be in regions, the MC Group has access to virtually every industry developing and producing an even larger number of highly worldwide. Capitalizing on its collective capabilities to adopt skilled management professionals who are able to respond a holistic view across numerous industries, it is shifting flexibly to the changing business environment and who away from a mindset that looks simply to invest in past proactively engage in managing businesses. MC will pursue sources of growth. By leveraging its strengths to become companywide initiatives to develop its management more deeply involved in business management, the MC professionals, and through the businesses they create, MC Group seeks to create new value by transforming its will in turn be contributing to both society and the growth of businesses, as well as to raise corporate value by reforming the company. We are working to enhance the corporate its business structures through consolidation and other value of the MC Group by achieving this virtuous growth means. cycle. Approximate Number of Group Companies: 1,700 The MC Group aims to create sustainable corporate value while simultaneously generating economic value, societal value and environmental value through its businesses. Forging a new path with business management. MITSUBISHI CORPORATION 01 Companywide Initiatives Alongside shifts in the geopolitical landscape, advances in digital technology and the emergence of platform companies are ushering in a business model transformation known as the Fourth Industrial Revolution. Given these changes to the external environment, MC adopts a holistic view across numerous industries to pursue a business portfolio strategy that examines the next business fields to enter and the fields for asset replacement companywide, deliberately rotating businesses through a series of project cycles inherent to the Company as part of a Value-Added Cyclical Growth Model. Furthermore, in order to adapt quickly to changes in the environment, MC is implementing a number of HR system reforms. These include ensuring that employees gain the right experience to become management professionals earlier in their careers, being more meritocratic to ensure that the right people are assigned to the right positions and utilizing management talent more widely and effectively throughout the MC Group. Creating the Next Industry 02 MITSUBISHI CORPORATION Reciprocal Growth Between the Company and Employees The MC Group has continued to adapt its business model to respond to the needs of society. The driving force behind our success is our highly ethical management professionals who have the foresight to identify New Seeds of Growth and the execution skills to achieve that growth. The MC Group will continue to accelerate the development of its management professionals by actively providing opportunities for personal growth, aiming to further strengthen the link between professional growth and company development. Number of Business Groups Value Creation Beyond Business Group Walls The MC Group takes a holistic view across numerous industries based on a framework that focuses on the main themes of Midterm Corporate Strategy 2021: portfolio management, HR development and digital strategies. Aiming to identify New Seeds of Growth that may have been previously overlooked through a traditional mindset, including industrial restructuring and technological innovation, MC and each of its Business Groups are working to jointly identify projects and respond to the rapid progression of industrial digitalization (DX). Currently, 10 various ideas are under discussion that transcend the walls between Business Groups, and these have already produced numerous candidates for investment projects. We will carefully examine these candidates and then seize the opportunity at the appropriate time to execute them. MITSUBISHI CORPORATION 03 Table of Contents MC’s Vision SECTION 01 08 Corporate Philosophy and Vision 10 Path of Value Creation 12 Message from the President and CEO Section 01 introduces 18 Midterm Corporate Strategy Progress and Highlights the value creation story 22 Message from the CFO of MC. 26 Investment and Capital Strategy in Midterm Corporate Strategy 2021 28 Risk Management MC’s Value Creation SECTION 02 38 The Sustainable Growth that MC Seeks 40 The Strengths of MC: Collective Capabilities 42 The Strengths of MC: Foresight and Execution Skills Section 02 introduces the strengths and 46 Framework Supporting Value Creation mechanisms that serve as 46 Overview and Identification Process of Key Sustainability Issues (Materiality) the source of value 48 Sustainability Initiatives creation. 50 Supply Chain Management Corporate Governance SECTION 03 54 Highlights for the Year Ended March 31, 2020 58 Overview of Corporate Governance 58 MC’s Basic Policy on Corporate Governance Section 03 introduces MC’s corporate 59 Board of Directors governance, which acts as 60 Board of Directors’ Advisory Bodies a foundation for value 62 Audit & Supervisory Board Members/Audit & Supervisory Board creation. 64 Outside Directors and Outside Audit & Supervisory Board Members 67 Overview of Remuneration Package 04 MITSUBISHI CORPORATION Reference Information SECTION 04 72 Members of the Board and 90 Food Industry Group Audit & Supervisory Board Members 92 Consumer Industry Group 74 Executive Officers 94 Power Solution Group 75 Organizational Structure 96 Urban Development Group 76 Business Groups at a Glance 98 Global Network (Countries and Regions) 78 Description of Business Activities: Balance of Risk Money Outstanding Business Groups 100 in 12 Countries 78 Natural Gas Group 102 Financial Highlights 80 Industrial Materials Group 104 ESG Data 82 Petroleum & Chemicals Group 106 Corporate Information 84 Mineral Resources Group 107 Shareholder Information 86 Industrial Infrastructure Group 88 Automotive & Mobility Group Publication of Mitsubishi Corporation Integrated Report 2020 In Midterm Corporate Strategy 2018—Evolving In this integrated report, we present our specific tic perspective on the MC Group as a whole. In Our Business Model from Investing to Managing, initiatives aimed at maximizing corporate value the process, we have referred to the reporting formulated in May 2016, Mitsubishi Corporation by focusing on the MC Group’s strengths and framework propounded by the International (MC) described a policy of simultaneously gener- transcending Business Group boundaries to Integrated Reporting Council (IIRC) and other ating triple-value growth through our busi- steadily develop new pillars of future growth. guidelines. We hereby affirm the legitimacy of nesses: economic value, societal value and Looking ahead, we will continue to do our the preparation process and the accuracy of the environmental value. utmost to ensure that our integrated report content of disclosure with respect to this inte- The systems introduced during this period serves as an effective communication tool that grated report. are already making steady progress and deliver- positively contributes to constructive stakeholder September 2020 ing results. To accelerate our initiatives for fur- dialogue. To do so, we will strive to improve the ther growth, we formulated a new management clarity of our reporting based on the valued direction for the three years starting from the feedback we receive from our stakeholders. fiscal year ended March 31, 2020 called In the course of preparing this report, we Kazuyuki Masu Midterm Corporate Strategy 2021—Achieving have worked closely with each of our internal Member of the Board, Executive Vice President, Growth Through Business Management Model. departments to provide a summary of our holis- Corporate Functional Officer, Chief Financial Officer Forward-Looking Statements This integrated report contains forward-looking statements about Mitsubishi Corporation’s future plans, strategies, beliefs and performance that are not historical facts. They are based on current expectations, estimates, forecasts and projections about the industries in which Mitsubishi Corporation operates and beliefs and assumptions made by management. As the expectations, estimates, forecasts and projections are subject to a number of risks, uncertainties and assumptions, they may cause actual results to differ materially from those projected. Mitsubishi Corporation, therefore, wishes to caution readers not to place undue reliance on forward-looking statements. Furthermore, Mitsubishi Corporation undertakes no obligation to update any forward-looking statements as a result of new information, future events or other developments. Risks, uncertainties and assumptions mentioned above include, but are not limited to, commodity prices; exchange rates and economic conditions; the outcome