In its Medium-term Management Plan, Idemitsu has outlined expansion of growth businesses, creation of next-generation businesses, and harmony with the global environment and society as priority topics. To promote the creation of new business in particular, we established the Next Generation Business Department, which promotes business development that addresses social issues and meets customer needs, in November 2019; the Digital Innovation Department, which promotes the use of digital technologies, in January 2020; and the Innovation Strategy Planning Department, which promotes technology-driven business development, in April 2020. We have crafted strategies that consolidate company-wide technologies and actively draw on external technologies with the aim of quickly achieving the creation of new businesses with an eye toward changes in society, diversifying customer needs, and decreasing environmental burden. Technological innovation is indispensable to achieving the goals of the Paris Agreement, which is an international framework related to climate change. The Idemitsu Group is using the technological development capabilities it has developed over many years of operations to continue generating innovation that will help solve various social issues, including climate change.

Our R&D system is composed of Advanced Technology Research Laboratories, which responsible for corporate R&D, and research laboratories in each department. Each of them carries out specialized development. In addition, we established the Research & Development Committee as a company-wide organization to not only examine the direction of research and development, strategies, and issues throughout the organization, but also to deepen cooperation among laboratories and to strengthen technological capabilities.

Our technologies are highly appreciated by the international community. As an example, Idemitsu and Showa Shell have been ranked 1st and 3rd respectively in the world among the industry subgroups* for three consecutive years since 2017 in the "Opportunities in Clean Tech," which is one of the items evaluated by MSCI, an ESG evaluation organization. (Table below)

We will continue to make the most of its advanced R&D capabilities to contribute to the solution of global issues through collaboration with others.

• * Within GICS (Global Industry Classification Standard), Idemitsu Group belongs to the Oil & Gas Refining and Marketing industry subgroup.