Mitsubishi Corporation

1
Mitsubishi Corporations Approach to
Environmental and Social Issues and Payments for
Ecosystem Services (PES)

• Poverty Environment Partnership Meeting,
  Washington, D.C. -
• Session II Private Sector Views and Experiences
  on Ecosystem Services, Environment and Poverty
• November 19, 2007
• James Brumm, Executive Vice President Mitsubishi
  International Corporation (MIC) and President,
  Mitsubishi Corporation Foundation for the
  Americas

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Todays Objectives

• I. Mitsubishi Corporation and CSR
• Who is Mitsubishi Corporation?
• Discuss Benefits of Conducting Business
  Responsibly
• Review Mitsubishi Corporations Guidelines for
• Corporate Social Responsibility (CSR)
• Review MC CSR Initiatives in North America
• II. Mitsubishi Corporation and PES
• Review MCs Participation in Payments For
• Ecosystem Services (PES)

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• I. What is Mitsubishi Corporation (MC) and How
  Does It Manage Its Environmental and Social
  Impact?

4
The Mitsubishi Companies History

• The Mitsubishi Companies have a common root in a
  marine transportation business established in
  1870
• By the early twentieth century, this had evolved
  into a diversified company and then
  into a conglomerate, or zaibatsu, consisting of
  many different companies this
  diversified company played a central role in the
  modernization of Japanese industry
• Post-World War II, the conglomerate was split
  into independent companies some
  use the Mitsubishi name, some not

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The 29 Main Mitsubishi Companies

• The Mitsubishi Companies cover a wide variety of
  businesses
• The Mitsubishi Companies function as fully
  independent entities today
• The companies conduct their business activities
  separately but do cooperate in some areas such as
  philanthropy and public affairs.

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Overview of Mitsubishi Corporation Japans
Largest Trading Company
Consolidated Companies
Parent Company
5,375Consolidated 55,867
Offices Worldwide
Employees
More than 200 in 80 countries worldwide
More than 500
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Mitsubishi Corporations Worldwide Network
Mitsubishi Corporations primary offices around
the world are shown below. In addition, its
global presence includes hundreds of subsidiaries
and affiliates.
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Mitsubishi Corporations Business Units

• Energy Business Group
• Develops and invests in oil and gas projects
• Handles products relating to crude oil petroleum,
  liquified petroleum gas, liquified natural gas
  and carbon
• Chemicals Group
• Supplies raw materials for synthetic resins and
  fibers, chemical fertilizers, inorganic raw
  materials, industrial salts, plastics, electronic
  materials and life-science products
• Sells to numerous industries
• Living Essentials Group
• Supports three basic requirements of daily life
• Clothing
• Food
• Housing
• Industrial Finance Group
• Provides equity and debt in various industrial
  sectors
• Provides value added logistics and insurance
  services

• Business Innovation Group
• Creates and fosters new businesses in innovative
  fields, including
• Human care services
• Information communication technology
• New energy and environmental business
• Media consumer business
• Machinery Group
• Builds and expands value chain by applying
  industry knowledge and capabilities to project
  development, networking and financing
• Metals Group
• Offers a unified value chain from ingots an other
  raw materials to processed or finished metals
• Engages in trading and investment

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Benefits of Conducting Business Responsibly

• Improves financial performance by developing new
  business areas
• Reduces regulatory oversight by mitigating risks
• Attracts investment by the Socially Responsible
  Investment community
• and pension funds
• Improves long-term sustainability of business
• Enhances brand image and reputation
• Reduces operating costs
• Allows for competitive advantage
• Attracts and retains employee talent

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Corporate Social Responsibility MCs Guidelines

• Three Corporate Principles
• Corporate responsibility to society
• Integrity and fairness
• International understanding through
• trade

• Code of Conduct
• Basic corporate principles, such as respect for
  law, human rights and the environment
• Standards of Conduct
• Guidelines for corporate business activities
• Environmental Charter
• Environmental guidelines for corporate action to
  create sustainable business

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Corporate Social Responsibility Other MC
Guidelines
U.N. Declaration of Human Rights, ILO Core Labor
Standards and the Volunteer Principles on
Security and Human Rights Green Office
Policy Volunteer Leave Policy Marine
Policy Forestry Policy Code of Business Conduct
Policy on Political Activity Antitrust and
Competition Law Compliance Guidelines Employee
Harassment Policy Securities and Insider Trading
Policy Antiboycott Compliance Manual Compliance
Hotline
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Corporate Social Responsibility Management

• Environmental Social Responsibility Committee
  and CSR Task
• Force includes senior level and midlevel
  managers from each
• business group
• Surveys are conducted at certain investments
  around the world
• regarding working conditions, environmental
  impact and supply chain
• issues, especially for agricultural and apparel
  products
• Social and environmental risks are examined for
  loans and
• investments using Japan Bank for International
  Cooperation (JBIC)
• and International Finance Corporation (IFC)
  guidelines
• Environmental impact assessments are conducted
  with suppliers and
• more than 400 business investments
• MCs Environmental Management Organizational
  Structure includes
• 400 Department Environmental Officers, who
  within various
• departments are to promote environmental
  responsibility

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CSR MCs Sustainability Measures

• Sustainability Report
• Covers economic, environmental and social impact
  of MC (prepared with reference to the Global
  Reporting Initiative guidelines)
• Listing on Socially Responsible Investment (SRI)
  Indices
• MC has achieved and maintains listing on the
  FTSE4 Good Index and the Dow Jones Sustainability
  Index
• Carbon Disclosure
• MC reports its carbon impact through the Carbon
  Disclosure Project

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CSR Education and Communication at MIC

• Internal
• Periodical CSR lunches for employees
• Annual Earth Day event
• Volunteer Leave Policy
• Earthwatch volunteer program
• Global Coral Reef Conservation Project Volunteer
  Program
• Other volunteer events (Coastal Cleanup, NYCARES,
  etc.)
• Coverage of CSR issues in internal newsletters
• External
• Environmental breakfasts
• Distribution of MC Sustainability Report to key
  stakeholders
• Stakeholder engagement formal and informal
  stakeholder dialogue

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CSR MCs Community Investment in North America

• Corporate Giving
• Support of various causes in the communities
  where we do business
• - Mitsubishi Corporation Coral Reef Conservation
  Project
• - Mitsubishi International Corporation corporate
  giving to New York cultural institutions, mostly
  Japan related initiatives
• - MC Subsidiary Giving i.e. Alberta Pacific
  Forest Industries gave 1 million to
  scholarships, environmental education, local
  charities in 2004
• Foundation Giving
• The Mitsubishi Corporation Foundation for the
  Americas supports environmental causes throughout
  the Americas
• Example Major grant to the American Bird
  Conservancy and Pronatura Mexico to establish a
  shorebird reserve in Sinaloa, Mexico
• Employee Involvement
• Matching gifts, corporate drives, volunteer
  projects
• Example Annual employee participation in
  Earthwatch projects

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MCs Sustainable Business Opportunities Al-Pac

• MCs Diversity of Business Allows for
  Opportunities in Sustainable Initiatives. For
  example
• Alberta Pacific Forest Industries (Al-Pac) is
  70 owned by MC and
• is the worlds largest Forest Stewardship
  Council (FSC)-certified
• forest in the world
• FSC is endorsed by the World Wildlife Fund,
  Greenpeace and the
• Sierra Club and provides assurance that Al-Pac
  is operating in a
• socially and environmentally responsible
  manner
• Alberta Pacific Forest Industries is North
  Americas only pulp mill to
• achieve carbon neutrality by sequestering
  carbon through poplar
• plantations and avoided deforestation
• Al-Pac is also active in engaging with local
  First Nations
• communities

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• II. Mitsubishi Corporation (MC) and Payments for
  Ecosystem Services

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Mitsubishi Corporation Foundation for the
Americas and Payments for Ecosystem Services
Forest Trends

• Starting in 2005, Mitsubishi Corporation
  Foundation for the Americas (MCFA) began a
  four-year grant to Forest Trends to support the
  strengthening of the institutional foundations
  for promoting the use of pro-poor payments for
  ecosystem services in Latin America
• This is the first direct grant by the
  Foundation for PES
• Forest Trends is bringing together a range of
  sectors, including corporations, governments and
  non-government organizations, from across Latin
  America to examine cases of PES and foster
  innovation
• In 2007, Forest Trends brought together people
  working in PES in Brazil, Colombia and Peru
• Through this grant, Forest Trends has supported
  PES capacity building workshops throughout Latin
  America, for example through a conference in Peru
  in October 2007
• Forest Trends has developed Getting Started
  brochures about PES in English, Spanish and
  Portuguese
• Forest Trends is active in including community
  perspectives in discussions of PES and has
  increased community-based content on the
  Ecosystem Marketplace (www.ecosystemmarketplace.co
  m), which is available in English, Spanish and
  Portuguese

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Mitsubishi Corporation Foundation for the
Americas and Payments for Ecosystem Services O
Boticario Foundation

• Starting in 2006, the MCFA began support for the
  O
• Boticario Foundations Oasis Project, which
  aims to use
• payments for ecosystem services to protect the
  watershed
• around Sao Paulo, Brazil
• The Guarapiranga watershed basin encompasses 90
• thousand hectares of Atlantic forest and serves
  the water
• supply for nearly 4 million people
• Oasis is the first watershed protection project
  in Brazil that
• involves private landowners
• Key conservation areas are selected and an
  environmental
• valuation model developed by environmental
  economists
• and legal experts is applied 28 properties
  have undergone
• a preliminary environmental assessment
• The first five-year contracts with landowners
  will be signed
• this autumn, which will include a biannual
  assessment of the
• property

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Mitsubishi Corporation and Payments for Ecosystem
Services Katoomba

• Katoomba is an international network of
  environmental and market experts
• dedicated to conservation
• MC has been supporting Katoomba since its second
  meeting in 2000
• In 2006, MC supported the tenth Katoomba
  gathering in Sao
• Paulo, Brazil, which was Katoombas first
  regional event
• MIC is now an active participant in the Tropical
  Americas Katoomba Group
• steering committee, which looks for creative
  market solutions to environmental
• problems in Latin America
• The Tropical Americas Katoomba Group meets in
  person and virtually
• throughout the year in support of various PES
  initiatives throughout the region
• i.e. the group has offered valuable commentary
  on the national PES strategy
• being developed for the government of Colombia

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Mitsubishi Corporation and Payments for Ecosystem
Services Carbon Emissions Credits

• MC is the number one Japanese company involved
  in Clean Development
• Mechanism (CDM) projects
• In 2000, MC invested 5 million and staff in the
  World Bank Prototype Carbon Fund to
• help reduce greenhouse gas emissions in
  developing countries
• MC also established Natsource Japan, a pioneer
  in the field of emissions credits
• trading
• MC is now involved in U.N.-approved Clean
  Development Mechanism (CDM) projects
• that are reducing the equivalent of
  approximately 12 million tons of CO2 per year
• MC is currently examining more than 25 new
  emissions reduction projects in Asia, the
• Middle East, Europe, South America and
  elsewhere
• MC is involved in the worlds largest Clean
  Development Mechanism (CDM) project,
• which will significantly lower the CO2
  emissions of a Chinese chemical plant
• MC is to join the Climate Group, an organization
  dedicated to advancing government
• and business leadership on climate change
• Climate change will continue to provide both
  risks and opportunities for the company

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Mitsubishi Corporation and Payments for Ecosystem
Services Carbon Emissions Credits
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Mitsubishi Corporations Views on Payments for
Ecosystem Services

• The Mitsubishi Corporation Foundation for the
  Americas sees PES as one of many tools for
  conservation and poverty alleviation. It is not
  a panacea.
• Payments or compensation for ecosystem services,
  combined with education, can serve as an
  important incentive to protect the environment
• Mandatory carbon markets are becoming
  increasingly important and NGOs, governments,
  donor agencies and the private sector are going
  to have to work together to ensure that these
  markets are helping to achieve environmental and
  development objectives
• As individuals and companies opt to offset their
  carbon and biodiversity impact the voluntary
  carbon and biodiversity markets will grow in
  importance and corporations will expect quality
  products with bundled services

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• Thank you for the opportunity to meet today.
• Please visit our web site www.mitsubishicorp-us.c
  om
• Questions? Please contact
• James Brumm, EVP, General Counsel Director
• james.brumm_at_mitsubishicorp.com
• Tracy Austin, Director of Corporate
  Communications
• tracy.austin_at_mitsubishicorp.com
• Mark Keegan, Corporate Communications Manager
• mark.keegan_at_mitsubishicorp.com