Sustainability Management Promotion System

In order to put into practice the Cosmo Energy Group Management Vision and Code of Conduct and to execute duties appropriately and efficiently, the Cosmo Energy Group has established and operates a system for the execution of duties by directors and employees of the Company and Group companies, a risk management and internal audit system to support this execution, and a system to ensure that audits by the Audit & Supervisory Committee are conducted effectively, all in accordance with our Basic Policy on Internal Control Systems. 

In fiscal 2021, when the Group started full-scale sustainability management, it established the Sustainability Strategy Committee, chaired by the Group CEO, to serve as the organization overseeing internal control. The committee played a key role in laying the foundation for the Group’s sustainability management. Through discussions within the committee, sustainability management became increasingly embedded in the Group’s operations, and efforts to integrate financial and non-financial initiatives progressed. Then in April 2025, the Group adopted a new sustainability governance structure with the decision-making role assumed by the Executive Officers’ Committee. As a result, the Sustainability Strategy Committee was replaced by a new Sustainability Strategy Council.

The members of the Sustainability Strategy Council include the executive officers, the general manager of the Corporate Planning Department, the full-time Audit and Supervisory Committee member at Cosmo Energy Holdings, as well as executive officers in charge of sustainability at the core operating companies. The council evaluates the results of efforts to address material issues under the Seventh Consolidated Medium-Term Management Plan and reports important issues to the Board of Directors. In addition, the Sustainability Committee, which is headed by the general manager of the Sustainability Initiative Department, meets as needed, functioning as the practical working body of the Sustainability Strategy Council.

Where necessary, the matters discussed by the Sustainability Strategy Council are shared with Group companies through the Sustainability Liaison Committee. Moreover, the evaluation of progress toward ESG targets has been reflected in executive remuneration since fiscal 2022 as the directors and executive officers promote sustainability management.

Committees have also been established at core operating companies (Cosmo Oil, Cosmo Oil Marketing, and Cosmo Energy Exploration & Production) and the semi-core operating company (Maruzen Petrochemical) according to their respective functions. These committees work with the Company’s Sustainability Strategy Council to ensure that all Group companies move forward in the same direction.

In fiscal 2024, the Sustainability Strategy Committee met six times and discussed 19 agenda items, of which 9 were reported to the Board of Directors for deliberation and further discussion. Since the start of fiscal 2025, the committee’s activities have been carried out by the Sustainability Strategy Council.