Director, Executive Officer
What Sustainability Means to Me
My first encounter with the concept of “sustainability” was over 30 years ago during my college days in the Faculty of Agriculture, in the context of sustainable agricultural development. At that time, changes in domestic and international markets—such as a shortage of agricultural workers in Japan due to population decline and aging, and an expected expansion of the global agricultural market due to population growth overseas—led the government to revise its basic agricultural policy. The new policy emphasized efficient and stable management, aligning prices with market evaluations and promoting exports, signaling a shift from focusing solely on domestic needs to long-term sustainable development.
My initial understanding of sustainability was shaped by Japan’s declining food self-sufficiency and the liberalization of beef and orange imports under the Uruguay Round of GATT (1986 –1994). At that time, Japan’s agricultural and livestock industries were widely considered strong, making it difficult to view “sustainability” positively, as the term implied struggling for survival amid dire circumstances. However, the 1987 United Nations report Our Common Future highlighted sustainable development as meeting the needs of the present generation without compromising the ability of future generations to meet theirs. Although I only learned this concept much later, the idea of balancing environmental and the economic objectives, rather than seeing them in conflict, was particularly compelling.
Since then, sustainability has become linked to corporate social responsibility (CSR), which gained momentum in the 1990s, and ESG, which originated in investment practices, providing a framework to reconcile social and environmental concerns with economic growth. The adoption of the 17 UN Sustainable Development Goals (SDGs) in 2015 set a target for achieving a sustainable world by 2030. With 2025 marking the 10th anniversary of their adoption, only five years remain to reach these goals. This raises a key question: what path should the Company pursue, and what legacy will it leave over the next five years and beyond?
Sustainability the Kanematsu Way
Kanematsu’s sustainability initiatives began with the establishment of the Environmental Issues Committee in 2006, followed by the Corporate Social Responsibility (CSR) Committee in 2008. Comprised primarily of support divisions, the CSR Committee emphasized a strong sense of “responsibility” and “management.” In 2020, it was reorganized into the Sustainability Management Committee, which continues to oversee our sustainability efforts today.
At that time, I served as the Company’s secretary- general and was involved in establishing the new committee. I remember struggling to design a system that would promote sustainability from a strategic perspective. A distinctive feature of the current sustainability management system is that executive officers from all seven business areas serve as committee members, while the general managers overseeing each sales division participate as expert members. The involvement of these business area leaders helps foster a sustainability-oriented mindset that is closely aligned with the Company’s operations and interests. Furthermore, with the committee chaired by the planning executive responsible for formulating the Group’s basic management strategy and allocating management resources, the system ensures that the entire Group works collaboratively to advance sustainability without bias toward any particular business area, and the key matters can be communicated directly with the Board of Directors.
Supply Chain Sustainability is the Responsibility of Trading Companies
Appointing planning executive as committee chair also strengthens alignment with management strategy. Under “integration 1.0,” the medium-term management plan launched in the fiscal year ended March 31, 2025, we set a goal of becoming a solutions provider leading the transformation of efficient and sustainable supply chains over the next five years. We view DX as representing efficiency, and GX and sustainability as representing sustainability. By leveraging these tools to deliver new added value (solutions) to the supply chain, we aim to collaborate with our business partners to secure revenue sources and improve expected profit growth by making the supply chain itself more sustainable.
In addition, the Company’s portfolio, consisting entirely of non-resource businesses with low volatility, contributes to a reduction in capital costs. Together, these factors form a strategy to enhance market valuation, including an increase in PER. As a company rooted in the trading business, much of our strength lies in the information we gather daily from our business partners. Our strategy is to sharpen this advantage further, building a lasting competitive edge, which we view as a core responsibility of a trading company. I believe that sustainability can be achieved only through strategic planning, enabling everyone to share the same vision.
Improving ESG Scores
As a result of a three-year plan launched in 2022 to improve our FTSE Russell score, we achieved our target and in 2024 and were included in the FTSE Blossom Japan Index, one of the domestic ESG indices adopted by the GPIF.
Kanematsu Group ESG scores
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| FTSE Russell | 1.4 | 1.4 | 2.8 | 2.9 | 3.4 |
| S&P Global | 14 | 27 | 32 | 41 | 45 |
| MSCI | BB | BB | BBB | BBB | A |
| CDP (Climate Changes) | - | - | B | B | B |
Key Issues Discussed by the Sustainability Management Committee (FY2025)
- -Disclosure of sustainability initiatives, including human rights, biodiversity, climate change (CDP)
- -Reporting and analysis of greenhouse gas emissions for the fiscal year ended March 2024
- -Review of progress on initiatives contributing to greenhouse gas emissions reduction
- -Compliance with the European Sustainability Disclosure Directive (CSRD)
Sustainability promotion framework (as of April 1, 2025)
