Climate Change
Policies on Climate Change Issues
We put an importance on the international determinations stipulated in the Paris Agreement, and we set “Policies on Climate Change Issues” in order to contribute to achieve the carbon neutrality goal of society in aligned with the Agreement.
The Board of Directors adopted a resolution concerning the Group's policies on climate change issues in 2019 and we have been regularly reviewing our policies. In May 2024, in response to recent changes in the external environment, including climate change countermeasures and energy security, we have updated our equity generation capacity-based ratio target among the Group's climate-related targets. In addition, we have added a commitment to reduce indirect CO2 emissions from general coal mines to zero by the end of 2020s, and to work on natural gas only in projects that contribute to the realization of a carbon neutral society.
Basic Policy
- Aim to make the Sumitomo Corporation Group carbon neutral in 2050(*1).
Develop technologies and business models for creating a sustainable energy cycle by reducing CO2 emissions and achieving negative emissions(*2) for society as a whole. - In addition to reducing and absorbing CO2 emissions from our business, we will contribute to the carbon neutralization of society through cooperative initiatives and recommendations made with business partners and public institutions.
Policy on Business Activities
- Promote renewable energy, efficient energy utilization and fuel conversion that contributes to reducing CO2 emissions throughout society. We will also work to offer new energy management and mobility services utilizing renewable energy and also to materialize hydrogen technologies and applications.
- In the power generation business, we provide a stable supply of the energy, essential for the economic and industrial development of local communities. At the same time, we continuously shift management resources to renewables and other energy sources with low environmental burden in the power generation portfolio.
- Regarding the development of thermal power generation and fossil energy concession, we will work on the premise of carbon neutralization in 2050.
- We will not be involved in any new coal-fired power generation business neither IPP (Independent Power Producer) nor EPC (Engineering, Procurement, Construction). For IPP business, we aim to reduce CO2 emissions by 60% or more by 2035 (compared to 2019) and we will end all the coal-fired power generation business in the late 2040s.
- We will not make any further investment in the thermal coal mining interest and aim to achieve zero production from thermal coal mines by the end of the 2020s. We will only undertake upstream gas development that contribute toward society’s energy transition.
- The scope of business targeted for carbon neutralization is as follows
[Scope1・2] Direct CO2 emissions from Sumitomo Corporation and its subsidiaries, as well as indirect CO2 emissions from the generation of energy used by each company (however, for power generation businesses, emissions from those affiliated companies under the equity method are also included)
[Scope3] Indirect CO2 emissions associated with the use of energy resources produced by fossil energy concession of Sumitomo Corporation Group, its subsidiaries, and affiliated companies under the equity method.
Carbon neutrality means net-zero CO2 emissions that combine CO2 emissions from our business and our contributions to CO2 emission reduction. - Negative emission refers to the absorption, capturing, and removal of CO2 emitted in the past and accumulated in the atmosphere.
Governance
Governance
Structure for Responding to Climate Change Issues
Overseeing
- The Board of Directors is responsible for making decisions on important management matters based on our Group's climate change-related risks and opportunities, and for supervising the execution of business operations. For decision-making on important management matters regarding climate change, the Board of Directors deliberates and determines on the formulation and revision of climate-related policies, important individual cases, which are submitted to the Board of Directors after review by the Management Council and other bodies.
- Also, the Board of Directors receives reports on macro-environmental analyses and responses to climate change issues several times a year and supervises the efforts of the business execution side.
- In addition, to ensure that the Company's officers, including directors, are more aware of our commitment to the advancement of sustainability management, evaluation based on the non-financial indicators including “climate change” is used to calculate the amount of the remuneration of officers. For more details, please visit our website “Executive Remuneration Plan.”
Execution of Duties
- Management Council and executive management are responsible for decision-making and business execution of important climate-change management matters of our group. The Management Council makes comprehensive decisions after consulting with the Corporate Sustainability Committee and other committees in order to assess and manage climate change-related risks and opportunities and make effective decisions.
- In addition, with regard to sustainability-related initiatives and responding to risks and opportunities, the Corporate Sustainability Department, which is a specialized organization in charge of planning and disseminating measures to promote sustainability within the Company, and related corporate organizations such as the Corporate Planning & Coordination Department, which plans the Company's overall management plan and important measures, as well as and the person in charge of sustainability promotion in each business group, and overseas regional organizations work together. Based on information provided by the Company's internal research organizations, the business groups, overseas regional organizations, etc., we formulate and promote company-wide plans and measures.
- In addition, we have established the Sustainability Advisory Board, which is comprised of outside experts on ESG, to obtain advice and recommendations on our overall sustainability management including response to climate change.
<Climate change governance structure (as of June 2024)>

Strategy: Climate Change-Related Risks and Opportunities
Accelerated new growth driven by GX (Green Transformation)
We have promoted the creation of next-generation businesses that contribute to the realization of a carbon-neutral society under prior Medium-Term Management Plan (FY2021-2023), including the promotion of sustainable management and the establishment of EII (Energy Innovation Initiative), a company-wide cross-functional organization. In the new medium-term management plan started from FY2024, we will further strengthen businesses where they have strengths and competitive advantages through green transformation in the short term. At the same time, we pursue green transformation considering time frame to monetization (including market formation) in various industries fields and create new strengths for the future in the mid- to long-term. To this end, we have begun efforts to visualize GHG emissions throughout our supply chain, including the calculation and analysis of Scope 3 emissions. In addition, in addressing climate change issues, we intend to promote GX while taking into account the impact on human rights and natural capital in an integrated manner.

Steady Advancement of the Business Portfolio SHIFT
( Achieving Carbon Neutrality across the Group )
Toward the Group‘s goal of becoming carbon neutral by 2050, we have established specific milestones for CO2 emission reduction as shown in the chart below and are steadily promoting them.
Milestones for CO2 emission reduction toward carbon neutrality of the Group (Millions of t-CO2e)

- Includes estimated figures after the construction and operation of the businesses for projects still under construction and emissions from equity-method affiliates
- Indirect CO2 emissions from the use of energy resources produced by fossil energy concession of Sumitomo Corporation, its subsidiaries, and affiliated companies under the equity method
- Direct CO2 emissions of Sumitomo Corporation and its subsidiaries and indirect CO2 emissions of the generation of energy used by them
- Through means recognized by international standards such as capture and storage by forests and other technical methods
Coal-fired power generation business
Sumitomo Corporation policy
- No involvement in any new coal-fired power generation business, neither in IPP nor EPC, without any exception
- End all coal-fired power generation business by the late 2040s
Approach to efforts
From the perspective of our social responsibility, including the development of local communities and economies and our obligation to supply, we will pursue every option, not eliminating the possibility of accelerated withdrawal from the business, while implementing the following efforts to accelerate the decarbonization of our Company and society as a whole.
- Consensus building based on sincere dialogue with host countries, local communities, and other stakeholders
- Pursuit of consideration and efforts toward the decarbonization and low carbonization of existing facilities
- Maximum support for host countries to shift power sources to renewable energy and other sources
Strategy: Scenario analysis (Climate Change-Related Risks and Opportunities)
Climate scenario selection
- We analyzed the impacts of transition risks and opportunities to our business models toward 2050, using IEA’s and PRI’s scenarios, in order to identify new business opportunities and assess businesses’ resilience in the case of the occurrence of significant changes of our business environment. In terms of the timeframe of the analysis on risks and opportunities, we set mid-term: by 2030 and long-term points: by 2050.
- The scenarios mentioned above are used as references to analyze our business activities and do not prejudge our future management policies and business strategies.

Identifying the Businesses for Which to Perform Scenario Analysis
- Our scenario analysis scope encompasses all of our business sectors which will be highly affected by business environment changes related to climate change mitigation, regardless of the scale of the business.

- Business models selected for scenario analysis
Identified climate-related risks and opportunities
- The problem of climate change can be broadly classified into two categories: transition risks posed by changes in policies and regulations, technological developments, market trends, and market evaluation, etc., and physical risks posed by an increase in natural disasters and extreme weather conditions due to climate change.
- The Group operates globally in a variety of industries and has identified and analyzed the following climate-related risks and opportunities that could affect the Group's forecasts. For specific details, please see the results of the scenario analysis below.
Category | Identified risks and opportunities | Relationship with business models |
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Transition risks and opportunities | Risks Our business environment may presumably be affected by introducing regulations for reducing GHG emissions or decarbonization in the future, strengthening international climate actions, updates of each country’s GHG reduction target and changes of technologies and market trends in broad industrial sectors. Opportunities Our business environment may presumably be affected by increase of societal needs for low-carbon and energy-saving products and services and creation of new climate-favored market, corresponding to introducing regulations for reducing GHG emissions or decarbonization and change of preferences of consumers. |
Business models with relatively higher risks described left are electricity generation and energy resource; automobile; aircraft; shipping; steel; chemicals; cement; aluminum smelting; real estate.Throughout the analysis on these business models, we periodically recognize risks to affect our business activities in taken up business models and gravity of the risks and consider implementing necessary measures to minimize negative impacts on our performance. In order to take advantage of opportunities, we have been strengthening our business activities to contribute to realizing a carbon neutral society by formulating strategies including investing in potential businesses such as next generation energy and increasing evaluations of existing climate-related businesses through improving business efficiency. |
Physical risks | Chronic physical risks Our business environment may presumably be affected by occurrence of average temperature increase, precipitation pattern change and sea level rise in a continuous and chronic manner. Acute physical risks Our business environment may presumably be affected by intensification of extreme whether events such as storms, floods, droughts, and forest fires in an acute manner |
We analyzed physical risks described left focusing on power generation including renewable energy,upstream energy resource, real estate, agriculture and forestry businesses as areas with relatively higher physical risks in terms of possessing larger scale assets or requiring more natural resources for their operation.We manage these physical risks by assessing impacts related to local weather conditions and geological factors before investing, conducting continuous assessment after involved, clarifying scope of contractual responsibility and securing coverage of damage insurance. |
Results of Scenario Analysis
- The macro environment for the models identified for the scenario analysis is based on a five grade evaluation of future market trends for each sector in 2030 and 2050, as described in the main scenarios presented by the IEA and other organizations. The forecasts for demand trends and the business environment shown by these scenarios include many potential risks and uncertainties.
- Our business environment, policies and initiatives related to each sector describe the policies and initiatives that consider the factors and certainty of various changes in the business environment shown in these scenarios and the circumstances unique to our business. Furthermore, we are working on the premise of carbon neutralization in 2050 for thermal power generation, fossil energy concession, and other business activities by Sumitomo Corporation and its subsidiaries and disclose the related indicators.
- About 70% of the business environment for the analyzed businesses is positioned as neutral or increase in the year 2050 under NZE/APS/STEPS. We then identified risks and opportunities for each of our businesses and confirmed that we are steadily taking steps to mitigate risks and seize opportunities. Below is a summary of the macro environment that the scenarios represent, and please refer to the bottom of the page for a description of our policies and initiatives considering these scenarios.
Trends of Supply and Demand Changes in Referenced Scenario (Macro Environment)





Referenced scenarios (Macro Environment) |
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Sector | Business | 2030 | 2050 | |
Energy | Thermal power generation (coal) | ![]() |
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Thermal power generation (gas) | ![]() |
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Renewable energy power generation | ![]() |
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Next generation energy | Hydrogen, ammonia, synthetic fuels | ![]() |
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Storage battery, energy management | ![]() |
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CCUS | ![]() |
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Resources | Thermal coal | ![]() |
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Coking coal | ![]() |
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Iron ore | ![]() |
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Natural gas and LNG | ![]() |
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Nickel | ![]() |
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Copper | ![]() |
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Transportation | Vehicles | ![]() |
* | |
Shipping | ![]() |
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Aviation | ![]() |
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Material industry sector | Steel | Steel sheets | ![]() |
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Tubular products | ![]() |
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Cement | ![]() |
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Chemicals | ![]() |
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Aluminum | ![]() |
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Real estate sector | Office buildings / residential building sales business | ![]() |
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Other | Forestry | ![]() |
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- No 2050 trend for sectors with “*” because of insufficient data for the scenario
Strategy: Transition Risks and Opportunities Related to Climate Change〈Scenario Analysis〉
Energy sector
- Thermal power generation(coal and gas)
- Renewable energy power generation
- Next generation energy (Hydrogen・ammonia・synthetic fuels)
- Next generation energy (Energy management businesses and storage battery)
- Next generation energy (CCUS)
Thermal power generation(coal and gas)
Referenced scenarios (Macro environment: changes in thermal power generation(coal and gas) output)

Our business environment, policies and initiatives
Our Businesses
Thermal power generation (coal and gas) businesses
External Environment, Risks and Opportunities
Regarding coal-fired power generation, there is a gradual decline starting in developed countries and in all scenarios, there is a significant decline by 2040 or 2050. While gas-fired power generation as a percentage of total power generation will decline over the medium to long term, we expect that investigations will continue into reducing CO2 emissions through the use of hydrogen, CCUS, and other new technologies. However, to advance the energy transition, we expect gas to remain an important power generation source because, from the perspective of stability of power supply, a certain level of gas-fired power generation will be required.
Our Policies, Strategies, and Initiatives
We have set policies on power generation businesses (*1) and we have been shifting our allocation of management resources from thermal power to power generation businesses with low environmental impact, such as renewable energy. In FY2023, we ceased the operation of coal-fired power plant in Japan. We believe that gas-fired power generation is an important power generation method that will play a bridging role in the energy transition, and a dispatchable power supply role to support power supplies as renewable energy power generation spreads. We also have high expectations, and are implementing initiatives, for innovative low-carbon technologies, including the use of green hydrogen, to help achieve carbon neutrality. While contemplating the development of local communities and economies and our obligation to supply electric power as stabilized power supply, we will pursue various options, without eliminating the possibility of accelerated withdrawal from the business to realize decarbonization of our company and society as a whole. We will pursue the decarbonization and low-carbonization of existing facilities and providing maximum support for host countries to shift power sources to renewable energy and other sources. We are utilizing our extensive know-how in power generation businesses to deliver high-efficiency, high-quality power supplies with outstanding environmental performance in countries around the world.
<Reference>
Coal-fired power generation business*1 | As of Mar. 31, 2024 | Estimate for 2035 | Latter half of the 2040s |
---|---|---|---|
Outstanding investments, loans and guarantees*2 | 310 billion yen | Approx. 150 billion yen | Zero |
Net ownership generation capacity | 5.2GW | Approx. 2GW | Zero |
- Regarding coal-fired power generation, we aim to reduce CO2 emissions by 60% or more by 2035 (compared to 2019) and will end all the coal-fired power generation business in the late 2040s. Please visit our Sustainability website for more details.
- We disclose all of our outstanding balances of investments, loans, and guarantees for all coal-fired power generation projects, regardless of investment scheme or contract type, for your reference. Result of March 31, 2024 is calculated based on the exchange rate at the end of March 2024 <YEN/US$>; 151.4 yen.
Resources sector
Thermal coal
Referenced scenarios (Macro environment: changes in thermal coal production

Our business environment, policies and initiatives
Our Businesses
Upstream
External Environment, Risks and Opportunities
The energy policies of many countries, especially developed countries, include plans to shift from coal-fired power generation to gas-fired power generation and then renewable energy, so demand for the thermal coal used in coal-fired power generation is forecast to decline.
Our Policies, Strategies, and Initiatives
We will not acquire new interests in the thermal coal mine development, and we plan to reduce equity production volume from thermal coal mines to zero by the end of 2020s. The weight of thermal coal interests in our resource portfolio is relatively small. Going forward, mines of currently owned interests are scheduled to reach the end of their mine life in the near future. Also, the concession produces high-grade coal, which is in relatively high demand, and is cost-competitive, making it resistant to price declines even when there is a drop in demand.
<Reference>
As of March 31, 2024 Thermal / coking coal Exposure: 80 billion yen
Transportation sector
Vehicles
Referenced scenarios (Macro environment: Changes in Sales of passenger vehicles and EVs’ share)

- No 2050 trend for vehicles because of insufficient data for scenario
Our business environment, policies and initiatives
Our Businesses
Sales of automobiles, manufacture and sales of automobile components, automobile finance, automobile leasing, car sharing, parking lot operation, etc.
External Environment, Risks and Opportunities
Sales of passenger cars are forecast to increase, especially in emerging countries, and the ratio of EV sales in new car sales are forecast to increase in all the scenarios as fuel efficiency regulations tighten. In terms of automobile components, demand for internal combustion engine parts expected to decline with the spread of EVs, but demand for tires is expected to increase with the associated increase in automobile body weight. If car prices increase as a result of the introduction of carbon tax and so on, there is a risk that new car sales will decline. At the same time, however, demand for automobile finance and leasing businesses is forecast to increase.
Our Policies, Strategies, and Initiatives
In addition to manufacturing and selling automobiles and automobile components, we are engaged in a wide range of businesses in the MaaS field. We see the spread of EVs and developments in MaaS as business opportunities. For example, as part of our parking business in Northern Europe, we are expanding the charging networks essential for the spread of EVs and the EV subscription services using our parking facilities. In Japan, we are working on new business opportunities such as providing fleets of EVs for commuter use, workplace charging facilities, and solar power generation services. Demand for internal combustion engine parts is expected to decline with the spread of EVs, but we consider ourselves to have a limited financial exposure as these parts account for less than a few percent of our parts manufacturing business. We are investigating and implementing a range of initiatives, such as use of carbon-free energy and low-carbon and carbon-free technology to contribute OEM’s supply chain carbon neutrality.
Material industry sector
Steel
Referenced scenarios (Macro environment: Changes in steel production and oil and gas investment amount)

Our business environment, policies and initiatives
Our Businesses
Trading of steel flat rolled products and tubular products, and other steel products with necessary fabrication process. Related investments are included.
External Environment, Risks and Opportunities
The demand for steel flat rolled products is expected to increase in emerging countries, but a shift to local consumption in the producing countries is anticipated. While, the demand for steel pipes, mainly used for oil and natural gas industries, is expected to decrease in the long term. However, the need for energy security is becoming more prominent, and the demand for environmentally friendly natural gas is expected to remain stable for the time being. In response to the societal demand for decarbonization and low carbonization, efforts to reduce carbon emissions, such as using hydrogen-based steelmaking methods with lower CO2 emissions, shifting to electric furnace materials are expected to accelerate. Additionally, an increase in demand for various steel materials and pipes is anticipated due to the construction of green infrastructure such as wind power generation and CCUS.
Our Policies, Strategies, and Initiatives
Our company will collaborate with strategic partners to promote the sale of green steel products and explore new business opportunities that contribute to the greening of the steel industry. We also aim to capture the demand for steel flat rolled products and pipes associated with the construction of green infrastructure. In response to the energy transition pursued by integrated energy companies, which involves the greening and diversification of energy sources, we will promote related businesses and continue to focus on the sale of highly corrosion-resistant steel pipes needed for natural gas development. Furthermore, we will actively utilize new technologies that contribute to the decarbonization and low carbonization of the steel and energy industries and focus on capturing the surrounding business of CCUS.
Real estate sector
Office buildings/residential building sales business
Referenced scenarios (Macro environment: changes in floor space in commercial and residential buildings and renovation ratio of buildings)

- Because the data has not been updated in the scenario, last year's ratings and figures are quoted.
Our business environment, policies and initiatives
Our Businesses
Office buildings, commercial facilities, residential housing, distribution facilities and real estate funds
External Environment, Risks and Opportunities
Demand in the real estate sector is forecast to increase in light of population increases and urbanization in emerging and developing countries and increasing refurbishment of existing buildings. On the other hand, a major challenge for buildings is to reduce CO2 emissions by reducing energy consumption.
In Japan, in order to achieve carbon neutrality by 2050, energy-saving performance equivalent to the ZEH/ZEB standards will be required for new properties after 2030 as part of demand for CO2 emission reductions through improved energy efficiency. If unable to meet these requirements, the risks are that real estate prices will fall, and demand will decline due to increased operating costs. However, meeting the requirements offers opportunities for increased earnings as demand for ZEH/ZEB-compliant building increases and property values increase.
Our Policies, Strategies, and Initiatives
We are involved in development and operation of a range of real estate properties. To reduce both embodied carbon, which is emitted through construction, and operational carbon, which is emitted during the use of buildings, we are adopting the latest equipment including smart meters and EMS, updating facilities, and introducing renewable energy, based on trends in customer demand and technologies. In addition, we are cooperating with tenants to implement environmentally friendly initiatives and working on acquiring environmental certification and developing properties to the ZEH/ZEB standards.
Other
Forestry business
Referenced scenarios (Macro environment: changes in size of forest area)

- Because the data has not been updated in the scenario, last year's ratings and figures are quoted.
- Temperature ranges used in PRI’s FPS and RPS scenarios are similar to those used in IEA’s APS and NZE scenarios respectively.
ー The temperature range in PRI’s FPS scenario (rise of less than 1.8°C by 2100) is similar to the temperature range in IEA’s APS scenario (rise of 1.7°C by 2100).
ー The temperature range in PRI’s RPS scenario (rise of 1.5°C by 2100) is similar to the temperature range in IEA’s NZE scenario (rise of 1.5°C by 2100).
Our business environment, policies and initiatives
Our Businesses
Forestry business
External Environment, Risks and Opportunities
With the trend toward carbon neutrality, the United Nations, COP26, and national governments are establishing many targets for such objectives as stopping forest destruction and land degradation, and increasing forest protection and the size of forest areas. In each of the scenarios to the left, forest area is forecast to increase in size by 2050.
Under these circumstances, while monitoring of illegal logging and activities that can lead to deforestation will be strengthened, we believe that sustainable forest management and timber supply will increase in value.
Also in the future, demand is forecast to increase for carbon removal credits that recognize absorption of CO2 in forest cultivation processes, and for alternatives to petrochemical products by using low environmental impact forest products from sustainable logging. We therefore expect competition around investment and development will intensify among countries and companies in this field.
Our Policies, Strategies, and Initiatives
We established the Forest Management Policy and the Sourcing Policy for Forest Products in 2022 as part of efforts toward sustainable forest management and sourcing of forest products. We also set Operational Guidelines for putting the policies into actions and conduct annual monitoring in accordance with these guidelines.
In line with these policies, we will expand our forestry business on the assumption of sustainable forest management. While supplying conventional forest products, we will also work to develop new products and businesses that contribute to the capture, storage, and utilization of CO2.
[Disclaimer regarding forecasts]
The projections and forecasts contained here are based on information available as of the date of this announcement, and on certain assumptions and projections. Therefore, actual results and performance may differ significantly due to various uncertainties, including future economic trends and market prices. Neither the company nor the information providers assume any responsibility for any errors in the information posted or for any damages incurred based on the information presented.
Strategy: Physical Risks Related to Climate Change and Countermeasures
Each year, we identify the Group's sectors and businesses affected by physical risks and inspect the status of their response to these risks. In particular, for businesses with large outdoor sites or those that require large amounts of natural resources for operations, we use assessment tools to analyze the degree of impact of physical risks and individually check the status of their response.
[Identification of Risks and Status of Response at Sumitomo Corporation]
Since the Group operates in a wide range of sectors around the world, we refer to UNEP FI reports describing the impact of physical risks on major sectors, as well as other reports. We identify the major risk characteristics for each of our sectors that are likely to have a significant impact, as well as the major businesses we are involved in, as shown in the table below. This year, we have added forestry to this list.
Physical risks are largely divided into chronic risks that have continuous and chronic impacts on business activities, (e.g., rise in average temperatures, change in rainfall patterns, rise in sea level, etc.) and acute risks caused by unforeseen damage (e.g., escalation of extreme weather conditions such as huge rainstorms, flooding, drought, and forest fires, etc.). The impact is wide-ranging, including direct impact on production site facilities and working conditions, and indirect impact on a broad range of supply chains of raw materials and products. For our business in a broad range of fields and regions, we manage such risks by assessing the impact of local weather and geographical factors on our business at the time of investment, conducting continued assessments after participation in the business, clarifying the scope of contractual responsibility, and concluding nonlife insurance policies.
Sector | Awareness of the impact of physical risks in each sector | Principal business related to the risk described at left | |
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Chronic | Acute | ||
Energy | Water shortage resulting in decline in production efficiency and in operation efficiency, risk of submergence due to sea level rise, etc. | Damage on facilities, disruption of operation, etc., caused by flooding and huge rainstorms | Thermal power generation in Southeast Asia, Middle East and Africa, Wind power generation in Japan and overseas, biomass power generation in Japan, solar power generation, and other renewable energy generation businesses, etc. |
Resource & Interest | Rise in temperature & water shortage resulting in decline in production efficiency, disruption in operation, risk of flooding with rise in sea level, etc. | Damage on facilities, disruption of operation, etc., caused by flooding and huge rainstorms | Mining operations in North America, South America, Australia, Africa, etc.; energy interests in Southeast Asia, Middle East & Europe; and sales of such resources and energy |
Raw materials | Rise in temperature & water shortage resulting in decline in production efficiency, disruption in operation, etc. | Damage on facilities, disruption of operation, delay in raw materials/product shipment, etc., caused by flooding and huge rainstorms | Manufacturing, processing, sales, etc., of metal products, transportation equipment and parts, chemical products, materials, etc. |
Transportation systems | Water shortage resulting in decline in production efficiency, disruption of operation, etc. | Damage on facilities, disruption of operation, delay in raw materials/product shipment, etc., caused by flooding and huge rainstorms | Manufacturing and sales, etc., of transportation equipment and parts |
Real estate | Delay in project schedule, rise in utility cost, decline in property value with a rise in sea level, etc., resulting from rising temperature | Delay in project schedule, decline in property value caused by structural damage & flooding, etc., caused by flooding and huge rainstorms | Office building business, retail facilities business, residential business, logistics facility business, etc. |
Agriculture | Rise in temperature & climate change resulting in decline in production efficiency, etc. | Disruption in operation, etc., caused by huge rainstorms, flooding or drought | Agriculture & import and wholesale of food products, retail sales business, etc. |
Forestry | Temperature change resulting in changes in the growth environment, etc. | Decline in asset value of forest resources, etc., caused by natural disasters | Forestry business in Russia, New Zealand, etc. |
[Results of Risk Analysis of Susceptible Businesses and Status of Response]
While physical risk includes a variety of risks, we have conducted a more detailed risk analysis of the sectors and businesses identified on the previous page as being susceptible to physical risk based on the factors such as having large outdoor locations or requiring a large amount of natural resources for operations.
In addition to power generation, upstream resources and energy, real estate, and agriculture businesses, we also conducted a risk analysis of forestry businesses this year using assessment tools such as the RCP8.5 scenario*1 based on the IPCC*2 scenario of a 4°C rise by 2100, mainly in terms of water stress, flooding and sea level rise, temperature rise, and forest fires, based on information such as the geographical information of major business sites, while considering the actual conditions of the businesses. For these businesses, we also confirmed that risk management was being conducted appropriately by assessing the impact of local weather and geographical factors on our business at the time of investment, conducting continued assessments after participation in the business, clarifying the scope of contractual responsibility, and concluding nonlife insurance policies.
Sector | Analysis Results and Status |
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Energy | Analysis of water stress on power generation business showed there areregions with possible water shortage. However, water used in our thermal power generation business, which uses large amounts of water for cooling, is supplied by seawater, water production facilities within the power plant, etc., leading to the conclusion that the risk of operation disruption caused by water shortage, etc., is not significant. |
Resource & Interest | In the study of the resource & interest business in terms of water stress and continual temperature increase risk, there are regions found to have relatively high risk of long-term increase in the number of days when temperature reaches 35°C or higher and possibility of water shortage. Sumitomo Corporationplans to execute risk control through assessment of disaster risks vis-à-vis geographical conditions, etc., definition of working conditions with sufficient attention to temperature and other conditions, subscription to nonlife insurance, etc. |
Real estate | In the real estate business, sufficient research and analysis are being conducted on flooding risks for various locations during the development studies stage. Property projects are being selected through conservative assessment of risks based on information from hazard maps and specific conditions of each property site, etc. In promoting project development, measures are being taken on physical risks in order to minimize them. For this reason, risks in the business portfolio as a whole are not considered significant. |
Agriculture | In the analysis of temperature rise and water stress for major agricultural sites in each country, there are regions with a possible increase in the number of days when temperature rises to 35°C or higher andpossible water shortage. Although adverse impact is anticipated on such agricultural operations if such risks affect agricultural product quality, output, etc., Sumitomo Corporation has diversified crops and regions in the business and has therefore built risk resistance to a certain degree in terms of total performance. |
Forestry | In the analysis of forest fire risk in the forestry business, it was confirmed that the risk is low for the forest assets currently owned by the Company. For our forests, we are taking measures in accordance with fire prevention plans, etc. In the risk analysis based on TNFD*3framework, our forest assets in New Zealand were analyzed as a whole for natural disaster risk, including floods, etc. (For details of the analysis results, please refer to the Trial Analysis Based on TNFD’s Beta Framework). |
- Representative Concentration Pathway: A scenario in which the temperature rises by 4°C by 2100
- Intergovernmental Panel on Climate Change:Intergovernmental Panel on Climate Change
- Taskforce on Nature-related Financial Disclosures: A global initiative aimed to develop and deliver a risk management and disclosure framework for organizations to report and act on evolving nature-related risks.
Risk Management
- Our business activities are comprised of a broad range of fields and regions and corelated with various social issues. Therefore, we formulated several policies to properly address social and environmental impacts resulting from our business activities and these policies are fully publicized in our group in order to take account of the various social issues.
- In detail, we evaluate social and environmental risks and check each business plan on how to respond to the risks as a part of our deliberation processes when considering and executing new businesses. Especially on climate change, we assess following climate-related risks and opportunities resulting from various adverse effects and business environmental changes from climate transition, which may possibly have negative impacts on our business activities’ feasibility:
- Impacts of climate change such as the frequent occurrence of natural disasters and extreme weather events
- Impacts of introduction of regulations
- Impacts of technology changes, etc.
- Potentials of business expansion and performance improvement resulting from mitigation and adaptation action in markets
- Regarding our existing business, we regularly monitor both companywide and individual business management status on social and environmental risks in order to make use of such monitoring information for strategic decisions.
- Regarding response to climate-related risks, we regularly report the Board of Directors and the Management Council about the risk information from which each Group collecting climate-related regulations and market’s changes when it expands its businesses and the Corporate Sustainability Department collecting and analyzing global climate trends including specific climate actions and regulations. In case that there are any unacceptable risks from the perspective of risk management for our business portfolio, measures including reduction of exposures may be considered and executed in collaboration with organizations responsible for risk management.
Metrics and Targets
Metrics and Targets
Targets:Effort for carbon neutrality
The Group set “Policies on Climate Change Issues” and long- and medium-term goals for Material Issues, and aim for realizing carbon neutrality by 2050 as well as contributing to carbon neutrality of society. The main points made in the policy and in the long-term and medium-term goals are as follows. Please check “Policies on Climate Change Issues” and “Material Issues” for details.
- Reduce the Group’s CO2 emissions 50% or more by 2035 (compared to 2019) Of which, Reduce CO2 emissions of the power generation business by 40% or more by 2035 (of which reduce 60% or more for coal-fired power generation business)
- For coal-fired power generation business, no further involvement in IPP (Independent Power Producer) nor EPC (Engineering, Procurement, Construction) business and will end all the coal-fired power generation business in the late 2040s
- For thermal coal mine interest, no additional investment and reduce indirect CO2 emissions generated from thermal coal mines to zero by the end of the 2020s
- Increase supply of renewable energy (5GW or more by 2030)
- The scope of business targeted for carbon neutralization is as follows
- Direct CO2 emissions from Sumitomo Corporation and its subsidiaries, as well as indirect emissions from the generation of energy used by each company (however, for power generation businesses, emissions from those affiliated companies under the equity method are also included)
- Indirect CO2 emissions associated with the use of energy resources produced by fossil energy concession of Sumitomo Corporation Group, its subsidiaries, and affiliated companies under the equity method
Index: Internal carbon pricing utilization index for achieving carbon neutrality
From April 2023, we have been operating an internal carbon pricing (ICP) system to calculate carbon emission costs, environmental values and avoided emissions. We utilize analysis from the system to consider companywide measures to create new climate-related business opportunities and check potential impacts on future businesses for decisions on investment.
In the ICP system, we use the outlook on carbon price of the Net Zero Emission Scenario (NZE) in the World Energy Outlook 2023 published by the IEA.
<Carbon price in our ICP>
($/t-CO2)
2030 | 2035 (*) | 2040 | 2050 | |
---|---|---|---|---|
Advanced economies with net zero emissions pledges | 140 | 172.5 | 205 | 250 |
Emerging market and developing economies with net zero emissions pledges | 90 | 125 | 160 | 200 |
Selected emerging market and developing economies (without net zero emissions pledges) | 25 | 55 | 85 | 180 |
Other emerging market and developing economies | 15 | 25 | 35 | 55 |
- Carbon prices in 2035 are average figures of 2030 and 2040 from the NZE in the World Energy Outlook.
Results
CO2 Emissions (*1)
(Thousand t-CO2e)
Index | Result of FY2019 (The base year) | FY2023 | Percentage of change | Reduction targets of 2035 | |
---|---|---|---|---|---|
Entirety | 59,939 | 51,606 | ▲13.9% | 50% or more | |
Sumitomo Corporation and its subsidiaries (other than power generation) (*2) | 1,005 | 782 | ▲22.2% | - | |
Power generation business (*3) | 43,126 | 39,632 | ▲8.1% | 40% or more | |
Of which, coal-fired power generation (*3) | 34,452 | 32,820 | ▲4.7% | 60% or more | |
Fossil energy concession (*4) | 15,808 | 11,192 | ▲29.2% | - | |
Of which, thermal coal mine interest | 12,538 | 10,164 | ▲18.9% | Zero emissions by the end of the 2020s |
- Figures for active power generation projects and fossil energy interests are calculated with the advice of a third party.
- Direct CO2 emissions from Sumitomo Corporation and its subsidiaries, as well as indirect CO2 emissions from the generation of energy used by each company
- Includes estimates for projects under construction and emissions from those affiliated companies under the equity method
- Indirect CO2 emissions associated with the use of energy resources produced by fossil energy concession of Sumitomo Corporation, its subsidiaries, and affiliated companies under the equity method.
Net ownership generation capacity of Renewable energy
(MW)
Index | Result of March 31, 2020 (The base year) |
Result of March 31, 2024 | Targets of 2030 |
---|---|---|---|
Renewable energy (*) | 1,397 | 2,075 | 5,000 or more |
- Includes capacity held by a fund whose management company is 51% owned by Sumitomo Corporation.
<Reference> Net ownership generation capacity portfolio
(MW)
As of March 31, 2024 | |
---|---|
Coal-fired power generation | 5,172 |
Gas-fired power generation | 2,994 |
Renewable energy (*1) | 2,075 |
Total | 10,241 |
- Includes capacity held by a fund whose management company is 51% owned by Sumitomo Corporation.
Contributing to the sustainable development of local communities and the global environmental protection through the renewable energy business in Japan
Operating six solar and two wind power plants in Japan
Among power stations sourced by renewables such as solar, wind, biomass and geothermal energies, solar (photovoltaic) power plants generate the greatest amount of electricity in Japan. So called "mega-solar (far-over-MW photovoltaic)" power plants started to be constructed across the country in 2012, after the introduction of the Feed-in Tariff system.
In the 1990s, Sumitomo Corporation began importing polysilicon and other materials for Japanese photovoltaic panel manufacturers, while exporting their products to overseas markets. We subsequently started the development of mega-solar power plants in Europe and the United States, and from 2012, in Japan. Today, we own and operate mega-solar projects at six locations nationwide.
Construction of wind power plants came into full swing in Japan in the early 2000s, before mega-solar projects gathered momentum. Sumitomo Corporation started the commercial operation of its first wind power plant in 2004, when wind power generation had just begun to take off. We then launched several projects, including those in Kashima, Ibaraki Prefecture and Oga, Akita Prefecture, which are well into the operational stage today.


Solar power plants in Minamisoma stand as a symbol of restoration from the earthquake disaster
Our latest initiative in solar power generation is the development of a mega-solar power plant with a generation capacity of 92,000 KW in Minamisoma, Fukushima Prefecture, which suffered devastating damage from the Great East Japan Earthquake. In 2012, one year after the earthquake disaster, we began drawing up a plan to build a solar power plant with cooperation from the local municipality with the aim of making use of coastal land that subsided due to the tsunami. After overcoming numerous challenges, commercial operation commenced in March 2018 for the first phase of construction, and in December 2018 for the second phase of construction.
Fukushima Prefecture aims to expand its renewable energy power generation capacity to meet 100% of the prefecture's demand by around 2040. Installed on a vast plot of 150 ha land, which is 32 times the size of the Tokyo Dome stadium, the two solar power plants will not only contribute to achieving this target, but also stand as a symbol of restoration from the disaster for the regional people.
Sumitomo Corporation has the vision of operating its plants over the long term, even after the Feed-in Tariff period has ended, to continue supplying environmentally friendly and cost-competitive electricity to society. The prerequisite for fulfilling this vision is to build a relationship of trust with the local communities. The only way our facilities can sustain operations over decades to come is to be accepted and loved by the local people.


Realizing optimal electricity management through Group-wide collaboration
Solar and wind power generation is susceptible to weather conditions. As a means of compensating for this weakness and ensuring stable electricity supply, Sumitomo Corporation is looking to use the storage batteries in its renewable energy business in pursuit of optimal electricity management. Furthermore, we are seeking to supply the electricity continuously and stably to consumers, in cooperation with Summit Energy Corporation, a subsidiary engaged in electricity retail business, who own and operate large-scale biomass power plants within the Group.

Developing new renewable energy power generation projects
The Japanese government has revised upward the 2030 target for the proportion of renewable energy in the domestic energy consumption mix to up to 38%. The Sumitomo Corporaton Group meanwhile, has a medium-term goal of increasing its renewable energy power supply capacity to at least 3 GW in combined total by 2030 and, toward this end, is expanding the development of carbon-free energy projects. These include a number of new projects started in Japan, namely: a biomass energy plant in Sendai, Miyagi Prefecture (March 2021); an onshore wind farm extending across Tamura, Okuma, Namie and Katsurao, Fukushima Prefecture (April 2022); and another onshore wind farm in Tosashimizu and Mihara, Kochi Prefecture.
Also eyed are new business areas such as domestic offshore wind power generation, which is currently the subject of global attention, and district energy management businesses that provide renewable energy for local consumption.
Drawing on our long years of operational experience in solar, wind and biomass power generation, we are confident that we can contribute to the development of Japan's renewable energy power generation industry and the realization of a sustainable society.
Sustaining Indonesia’s power supply with geothermal power generation
Renewable energy that is less susceptible to climate conditions
Geothermal power generation is a method used to generate electricity with a renewable energy source. The mechanism itself is simple: ground water is heated by deep underground magma near volcanoes, and the resulting steam turns the turbine of a generator that produces electricity. As it requires no fossil fuel consumption, geothermal power generation has a low environmental impact. Also, the cost of generating electricity is unaffected by fuel market fluctuations. Compared to other renewable energy sources such as solar and wind power, geothermal energy is undisturbed by climate conditions. Accordingly, this generation method can deliver electricity on a stable basis.
However, geothermal power generation entails some risks. It is unclear to know if enough hot water or steam (i.e. geothermal fluid) can be obtained for power generation until after a deep well has been drilled. In fact, some projects must be aborted as a result of drilling 2,000 to 3,000 meters in depth. Developing geothermal energy projects requires know-how of surface level surveys, ability to fund wells for drilling, ample time, and even a certain amount of luck.


Abundant geothermal resources in Indonesia
Business models for power generation infrastructure are generally grouped into two main categories: EPC and IPP. EPC refers to construction contracts where the Engineering, Procurement, and Construction of a power plant are contracted. Under EPC arrangements, the contract is typically fulfilled when the completed facility is delivered to the local government or company. IPP stands for Independent Power Producer, where the operator becomes the owner of the generating facility and sells electricity on an ongoing basis.
With a view to the diversification of power sources in the future, Sumitomo Corporation has kept a keen eye on geothermal power generation since the early days when these projects were becoming larger in scale and more practical, and began delivering related equipment in the 1970s. Indonesia has the second highest number of geothermal resources in the world. We began our work in geothermal power generation there in 1995, and won our first EPC contract for a geothermal power plant in 1997. To date, we have been involved in a total of 12 projects (17 units totaling approximately 900 megawatts of power generation capacity). This represents 40 percent of the total geothermal capacity in the country and is the highest among Japanese integrated trading and business investment companies.
Our success with numerous geothermal EPC projects has been built on the productive partnerships we have forged. Our partners include Fuji Electric Co., Ltd. the world's leading manufacturer of steam turbines for geothermal power stations, and an Indonesian company PT. Rekayasa Industri, which take charge of civil construction, installation and local procurement. Among our recent geothermal EPC projects are the Lahendong power station in north Sulawesi and the Ulubelu power station in south Sumatra.


Demonstrating persistence in geothermal IPP project development
Our first geothermal IPP project in Indonesia was the Muara Laboh project, launched in west Sumatra in 2011.
Geothermal power stations are generally developed and built in untouched mountainous areas near volcanoes. Development of a geothermal project beings with construction works which consists of clearing and leveling the ground at the project site. Muara Laboh is located in a remote area, requiring four to five hours of overland travel from the nearest airport. In March 2012, the Project Company which Sumitomo Corporation along with its partners invests in entered into a long-term power purchase agreement over 30 years with the Indonesian state-owned electricity utility. After obtaining a Government Guarantee Letter from the Ministry of Finance of the Republic of Indonesia, the Project Company embarked on trial well drilling.
However, as a result of drilling exploration wells, the need to downscale power generation capacity became clear. We renegotiated with the Indonesian government and the Indonesian state-owned electricity utility regarding the terms and conditions of the project. It took nearly two years before all parties reached a unanimous agreement. The next step was to make financial arrangements for the actual power station construction. After five years of concluding the initial long-term power purchase agreement, we were able to achieve finance close and start the construction work in March 2017.
We were also contracted to provide EPC services for the construction of this plant. To achieve our goal of completing our first geothermal IPP project in Indonesia on time and contributing to the country's electricity supply, we not only leveraged our expertise as an operator that we have cultivated through other IPP projects, but also our extensive experience in geothermal EPC projects and the comprehensive strengths of our electric power infrastructure business as well. Finally, we were able to commence commercial operation in December 2019.
It was unprecedented for a Japanese company to be involved in the development of an Indonesian geothermal power project from the earliest stage, even prior to test drilling. Systemic difficulties made negotiations on project terms and conditions as well as financial arrangements a prolonged endeavor. Despite this obstacle, the successful completion of the power plant was achieved, helping us build a foothold for our next projects in Indonesia. Our projects currently underway include expansion work for the Muara Laboh power plant and the construction of our next geothermal IPP project, the Rajabasa power plant, on Sumatra Island


Indonesia to increase geothermal power generation capacity by 2.5 times by 2030
With the fourth largest population in the world at more than 270 million people, and an economy that continues to grow at around 5 percent per year, shifting to renewable energy and ensuring a stable supply of electricity have been national challenges for Indonesia. Geothermal power generation, which utilizes Indonesia's abundant geothermal resources, has been recognized as an effective means to simultaneously solve both of these issues, and the Indonesian government plans to increase its geothermal power generation capacity from the current 2,400 megawatts to 5,800 megawatts by 2030. The government is looking to Sumitomo Corporation, with its 20-plus years of experience in the construction of geothermal power plants and its experience in Muara Laboh geothermal IPP project, for support in this endeavor.
Geothermal power projects entail unique risks that other power sources do not. Building on our accumulated knowledge and expertise, we will contribute to the realization of a low-carbon society in Indonesia by managing those risks in cooperation with government agencies and financial institutions.



Participation in European offshore wind power projects
Rapid development of offshore wind power generation in Europe
The European Union ("EU") aims to increase its use of renewable energy to at least 32% of the EU's total energy consumption by 2030. In July 2021, the European Commission announced policy packages containing a proposal for raising the target ratio to 40%. Under this circumstance, the development of offshore wind power generation projects is growing rapidly in Europe. This technology involves large turbines installed in the sea that harness the power of the wind to produce electricity. Wind farms are currently being constructed in earnest, mainly in the North Sea, which borders Norway, Denmark, Germany, the Netherlands, Belgium, France and the United Kingdom ("UK").
The greatest advantage of offshore wind power generation is the absence of physical obstacles to wind, such as mountains and buildings. This increases efficiency in energy conversion and facilitates output projection. The vast open spaces of the sea are also convenient for the transportation of turbine blades, a headache for onshore wind power projects situated on restrictive land sites. The North Sea is particularly suited to wind farms since shallow waters stretch out for over 40 kilometers off the coast.

Four Belgian projects
Sumitomo Corporation entered the offshore wind power business in 2014. Under a strategic partnership with Parkwind, a Belgian offshore wind company, we participated in Belwind, Northwind and Nobelwind wind farm projects, then in operation, under construction or in development in the North Sea.
Since August 2018, Sumitomo Corporation has also participated in Northwester 2, the fourth joint project with Parkwind. Construction was completed in May 2020. Recently, the European offshore wind power market has been shifting toward ever larger turbines driven by technology innovation. Northwester 2 is running the world's largest turbines currently in commercial operation. Constructing and operating these huge wind turbines requires stable funding, management skills to see the project through, and operational expertise. Having already accumulated considerable related experience through building and running conventional power plants and participating in onshore wind power projects in North America, China and South Africa, Sumitomo Corporation has been able to bring about successful outcomes in the Belgian projects.


Participation in projects expanding in Europe: From Belgium to the UK and then to France
Sumitomo's European bases for its offshore wind power business are Dusseldorf in Germany (European hub), Leuven in Belgium, London in the UK, and Paris in France. We have been exploring new business possibilities, working locally as an IPP firmly anchored in each locale and utilizing our global network as an integrated trading and business investment company to gather information.
In fact, it was due to our steady local efforts, in addition to our highly acclaimed role in the Belgian projects, that we were able to successively take part in two British offshore wind farm projects, Galloper in 2016 and Race Bank in 2017. Wind farms of Race Bank and Galloper, far larger in scale than their Belgian projects, were completed in March and September 2018, respectively. Sumitomo Corporation's experience and know-how accumulated through the Belgian projects is utilized in the operation of these British wind farms. Following them, we have started the new project Five Estuaries, an extension of Galloper.
In 2018, we took part in the Le Tréport and Noirmoutier offshore wind projects in France, following our participation in Belgium and the UK. Le Tréport project is being developed in the English Channel about 15 kilometers off the coast of France and Noirmoutier project is being developed in the Bay of Biscay about 12 kilometers off the coast of France. We are currently working to achieve financial close*. The two projects have a total power generation capacity of 992 megawatts, enough to meet the consumption needs of 1.64 million people.
As evidenced here, the European offshore wind power market is expanding year by year. Our goal is to expand our business in this field by increasing our participation in projects in European countries, including for floating offshore wind turbine farms, an area for which growth is expected going forward. Today, the renewable energy business, which thus far has largely been supported by government subsidies, is quickly transitioning to a self-supporting model. Sumitomo Corporation is also moving in this direction, pursuing greater stability in power generation and higher cost competitiveness, so as to ensure continuity of power supply in Europe.
- Financial Close: Entering into a loan agreement for a project and meeting the lending requirements

Potential in Asia
Outside Europe, Asia, Oceania, and North America are attracting global attention for their lofty potential in offshore wind power generation.
In Asia, Japan, Vietnam and other countries are whose who draw much attention, not only because of its abundant wind resources over spacious oceans but also thanks to the government's commitment to renewable energy. Although there are obstacles to be overcome, such as frequent typhoons and less extensive shallows than in the North Sea, Sumitomo Corporation believes that it will be able to apply the expertise acquired through the European projects to initiatives in Japan and the rest of Asia and Oceania in the near future.

Establishment of the Fund to Expand the Renewable Energy Business
In April 2018, Sumitomo Corporation integrated its conventional power and renewable energy business segments and established a global system to enable it to work on power generation projects in a seamless fashion. The company's objective in this area is to establish a robust energy business that contributes to society and preserves the global environment for future generations.
In 2019, Sumitomo Corporation, Sumitomo Mitsui Banking Corporation and the Development Bank of Japan established the first fund through Spring Infrastructure Capital (SIC), a fund management company jointly established by the three companies. The fund—the first fund in Japan to invest in offshore wind power projects overseas—has acquired the UK-based Race Bank and Galloper offshore wind farm as seed assets (assets for investment by the fund). In 2022, SIC established a second fund to acquire solar power generation projects in Japan as seed assets.
Through SIC, we will provide institutional investors with opportunities to invest in renewable energy assets both in Japan and overseas, and contribute to the development of global infrastructure centered on renewable energy.
To protect our planet while guaranteeing the day-to-day comfort and convenience that electricity provides, Sumitomo Corporation continues to vigorously promote its renewable energy business.
Providing the global market with sustainable wood resources
Managing forests to contribute to carbon neutrality across the globe
Wood represents a recyclable resource because trees can be systematically planted, grown and harvested repeatedly. In addition, wood is one of our most familiar resources. Sumitomo Corporation started wood business by importing logs, lumber and veneer into Japan to support the high economic growth of the country. Since the 2000s, the Company has also expanded the business to include forest management, with a view to securing and utilizing forest resources in a more sustainable manner. We are also supplying wood products coming from the forests that we manage, targeting not only Japan's matured market, which does not have much room for remarkable growth, but also markets with high growth potential around the world.
Forests, which absorb and store CO2, can contribute to carbon neutrality across the globe through proper management and harvesting. Sumitomo Corporation also conducts sustainable forest management by practicing environment-friendly harvesting in the forests owned and managed by the Company. Looking ahead, we are committed to further expanding forest resources on a global scale while leveraging the expertise we have built in forest management.

Achieving sustainable forest management in New Zealand through forestation
In March 2013, Sumitomo Corporation acquired forest in New Zealand and subsequently began to manage it through Summit Forests New Zealand. The foreset extends over about 50,000 hectares on the North Island, where Radiata pine is grown and harvested to be exported to China and other Asian countries.
Forest management entails much labor, such as thinning out and pruning. There are also management risks to consider, including damage caused by fires and storms. Moreover, it might also be necessary to establish roads, ports and other infrastructure to transport harvested trees. Despite these challenges, Sumitomo Corporation is engaged in forest management in order to ensure a stable supply of wood on a long-term basis.

In Summit Forests New Zealand, trees are planted, grown and harvested in a cycle of 30 years to supply wood resources in an environment-friendly manner. For this forest, Sumitomo Corporation employs local inhabitants. They have long been engaged in and have vast knowledge of forestry. They are therefore efficiently sharing the work of planting, growing and harvesting trees in the plantation. On an annual basis, trees are hauled from the forest in the volume of about 600,000 m3 (equivalent to the volume of 900 25-meter pools). Nature is preserved in the forest, with wild horses running free.
Sumitomo Corporation is thus managing the forest in harmony with the local environment, instead of just trading wood from the forest, and this approach is highly evaluated by the local people. Also, we are applying advanced technologies to the industry, particularly to support harvesting operations. This involves employing drone and satellite photography systems to grasp the topographic features of plantation areas and to confirm the dimensions of harvesting areas.

Renewable Energy Related Business
We have entered power generation business using renewable energy, which is expected to grow as a medium- to long-term energy source, contributing to mitigating climate change.
As of March 31, 2023
Fuel | Power plant | Country | Generation Capacity (MW) |
---|---|---|---|
Solar power | Osaka Hikarinomori Project | Japan | 10.0 |
Solar Power Saijo | Japan | 29.0 | |
Solar Power Kitakyushu | Japan | 16.0 | |
Solar Power Tomakomai | Japan | 15.0 | |
Solar Power Minamisoma/Kashima | Japan | 59.9 | |
Solar Power Minamisoma/Haramachi | Japan | 32.3 | |
EVM/EVM2 | Spain | 14.0 | |
Thang Long Industrial Park (TLIP)/TLIPⅡ/TLIPⅢ | Vietnam | 25.1 | |
Wind power | Oga Wind Power Plant | Japan | 28.8 |
Summit Wind Power (Kashima) | Japan | 20.0 | |
Abukuma Wind Power Plant | Japan | 147.2 | |
Datang Sino-Japanese (Chifeng) New Energy | China | 50.0 | |
Stanton Wind Energy | USA | 120.0 | |
Cimarron Ⅱ Wind | USA | 131.1 | |
Ironwood Wind | USA | 167.9 | |
Dorper Wind | South Africa | 100.0 | |
Mesquite Creek Wind | USA | 211.2 | |
Amunet | Egypt | 500.0 | |
Offshore wind power | Northwind | Belgium | 216.0 |
Nobelwind | Belgium | 165.0 | |
Northwester2 | Belgium | 219.0 | |
Galloper | UK | 352.8 | |
Race Bank | UK | 573.3 | |
Woody biomass | Summit Handa Power | Japan | 75.0 |
Summit Sakata Power | Japan | 50.0 | |
Summit Myojo Power | Japan | 50.0 | |
Sendai-ko Biomass Power | Japan | 112.0 | |
Geothermal Power | Muara Laboh | Indonesia | 85.0 |
Hydraulic power | CBK | Philippines | 792.0 |
Green Building Initiatives and Issuance of Green Bonds
In our real estate business, we have formulated and implemented basic policies related to environmental, social and governance (ESG) issues. As a real estate management company, Sumisho Realty Management Co., Ltd. (“SRM”) believes that incorporating ESG elements into investment decisions and operation processes is essential for maximizing value of medium- to long-term investor. SOSiLA Logistics REIT, Inc. (“SLR”) has obtained real estate environmental certifications such as CASBEE, DBJ Green Building, LEED, BELS. Also, SOSiLA Logistics REIT Inc. has been awarded “5 Stars” in the 2023 GRESB Real Estate Assessment and the highest “A Level” for the GRESB Public Disclosure, which measures the quality of ESG disclosure.
As the first J-REIT to formulate a green finance framework since IPO, SLR has been promoting ESG-oriented asset management through green finance. In June 2023, SLR issued 3.0 billion yen Green Bonds with aims to strengthen the funding platform by expanding the ESG investor base, along with promoting ESG initiatives. Funds procured through Green Finance are used for the acquisition of existing or new assets (including scheduled acquisition) of Eligible Green Assets that satisfy any of the following eligible criteria, used for the renovation of Eligible Green Assets, or repayment and redemption of loans (including Green Loan) and Investment Corporation Bonds (including Green Bonds) required for these.
<Eligibility Criteria>
- Green Building
Any of the following items that have been or will be certified- B+ rank, A rank, or S rank in CASBEE certification for new construction or for real estate
- Three-star, four-star, or five-star DBJ Green Building certification
- Three-star, four-star, or five-star BELS certification (2016 standard)
- Excluding BEI over 0.75 for logistics facilities
- Silver, Gold or Platinum in LEED certification
- Renovation of existing building
Renovation of the owned assets which meet the following;- To aim for improving environmental benefits such as reducing CO2 emission, energy consumption or water consumption (30% or more decrease in its volume)
- To improve the certification level by one rank, acquisition or reacquisition of the certifications
- Energy Saving Equipment
- Costs related to renewal of air-conditioning equipment, conversion of lighting fixtures to LEDs, and introduction of power storage systems (expected energy savings of 30% compared with conventional systems)
- Renewable Energy
Acquisition or installation of renewable energy power generation facilities (installed on the premises or on the rooftop of the property)
Major environmental certifications obtained by SLR (as of November 2023).
Certifications | Property Name | Evaluation |
---|---|---|
CASBEE: 11 properties | SOSiLA Yokohama Kohoku | Real estate Rank A |
SOSiLA Sagamihara | Real estate Rank A | |
SOSiLA Kasukabe | Real estate Rank A | |
SOSiLA Kawagoe | Real estate Rank A | |
SOSiLA Nishiyodogawa I | Real estate Rank A | |
SOSiLA NishiyodogawaⅡ | Real estate Rank A | |
SOSiLA Ebina | Real estate Rank S | |
LiCS Narita | Real estate Rank A | |
SOSiLA Itabashi | Building (New Building) A Rank | |
SOSiLA Amagasaki | Real estate Rank S | |
SOSiLA Yashio | Real estate Rank S | |
LEED: 1 properties | Atlanta Financial Center | SILVER |
BELS:11 properties | SOSiLA Yokohama Kohoku | ☆☆☆☆☆ |
SOSiLA Sagamihara | ☆☆☆☆☆ | |
SOSiLA Kasukabe | ☆☆☆☆☆ | |
SOSiLA Kawagoe | ☆☆☆☆☆ | |
SOSiLA Nishiyodogawa I | ☆☆☆☆☆ | |
SOSiLA Ebina | ☆☆☆☆☆ | |
SOSiLA NishiyodogawaⅡ | ☆☆☆☆☆ | |
LiCS Narita | ☆☆☆☆ | |
SOSiLA Itabashi | ☆☆☆☆☆ | |
SOSiLA Amagasaki | ☆☆☆☆☆ ZEB Ready |
|
SOSiLA Yashio | ☆☆☆☆☆ ZEB Ready |
GX Concierge, Providing Side-by-Side Support for Decarbonized Management
To realize carbon neutrality, companies need to develop a green transformation (GX) management cycle for the ongoing process of assessing their current GHG emissions, formulating GX strategies and measures, adopting GX solutions, and evaluating and revising the process. Sumitomo Corporation and ABeam Consulting have established a new joint-company called "GX Concierge Inc." to mitigate climate change to carbon neutrality for society. Specifically, GX Concierge provides various GX-related consulting services, including support for measuring GHG emissions, developing a GHG reduction roadmap, and making disclosures under the TCFD. It acts as a one-stop service for all the customer’s needs, from adoption of various Sumitomo Corporation Group’s GX solutions, such as solar power generation and EV leasing businesses, to GHG emission management cloud services for visualizing GHG emissions. With climate change disclosures in line with TCFD recommendations becoming mandatory from FY2022 for companies listed on the Prime Market of the Tokyo Stock Exchange, we have already been providing GX consulting and other support services to our suppliers.
Sumitomo Corporation Group is deeply involved in the supply chains of a wide range of industries, so we aim to work with our suppliers and business partners to tackle climate change mitigation head-on and help realize a carbon neutral society through GX Concierge.

ZEB Ready Certification for Yaesu Avenue Project (tentative title)
Sumitomo Corporation is working with business partners to develop the Yaesu Avenue Project. In June 2023, this project received ZEB Ready certification (for net zero energy buildings) in a first for office buildings that we have developed. The ZEB Ready certification is given to non-residential buildings that are able to reduce primary energy consumption by 50% or more compared to base energy consumption through various energy-saving measures.
This office building achieved a BEI value of 0.48 (52% reduction compared to the standard) by adopting Low-E glass and light shelves on the exterior, high-efficiency air conditioning equipment, changes in room illumination, and the addition of lighting control equipment, thereby realizing an energy-saving building with a low environmental impact.

Using GX Concierge to Visualize GHG Emissions from Logistics Facilities (SOSiLA)
To assist efforts toward decarbonization, we have used GX Concierge to calculate and visualize GHG emissions at logistics facilities developed and owned by us (including our group companies) and SOSiLA Logistics REIT, Inc. To date, the SOSiLA series has been actively pursuing environmental certification in order to provide logistics facilities with high environmental performance to its tenant companies and SOSiLA Logistics REIT, Inc. investors.
As part of efforts to further reduce our GHG emissions, we will work to reduce the full life-cycle of GHG emissions by securing green power for facilities that are currently operating through installation of rooftop solar panels and other initiatives, and by adopting materials with high environmental performance for future facilities.

Operating an Environmentally Friendly Data Center
SCSK Group plays a central role in the IT business of Sumitomo Corporation Group. SCSK conduct management aimed at resolving social issues through business and achieving sustainable growth together with society.
Serving as an IT infrastructure platform to support the accelerating digitalization of customers, SCSK’s data centers are also positioned as an important business in achieving our materiality of "contributing to the global environment."
SCSK Group is working on follow two measures: "mitigation" measures to reduce suppress the progress of global warming by reducing greenhouse gas emissions, such as CO2, and "adaption" measures to prepare for natural disasters associated with climate change.
Contribution to Reducing Environmental Impact - Promotion of Green IT
In the data center business, SCSK Group is reducing greenhouse gas emissions. This includes adopting energy-saving IT equipment, implementing highly efficient cooling and air conditioning systems, and providing services that contribute to power saving, such as server virtualization and cloud services.
Contributing to Building Resilient Society Against Natural Disasters
SCSK’s data centers are certified as robust facilities resilient to natural disasters, ensuring business continuity for customers who utilize the data centers and contributing to strengthening resilience. SCSK group also support customers' business continuity by, for example, preparing some of the rooms in the facility for customers to use as a disaster recovery room in the case of a disaster.
Going forward, the SCSK Group will continue its ambitious efforts to reduce greenhouse gas emissions by promoting further power conservation and the use of natural energy. And will contribute to the realization of a decarbonized society and the development of a sustainable society through the practice of environmentally friendly business activities and the creation of business opportunities.
Retrofitted EV Bus Business with Nishitetsu Group
Sumitomo Corporation is working with Nishi-Nippon Railroad Co., Ltd. (Nishitetsu) to develop a retrofitted EV bus business that converts existing diesel buses into electric vehicles. With reducing CO2 emissions being an important challenge for the bus industry as well, EV buses have become increasingly important in recent years. However, only limited numbers of EV buses have been put into operation so far due to the high price of the vehicles. Focusing on this challenge, we have successfully deployed the Retrofitted EV Bus scheme, together with Nishitetsu Auto Body Tech Co ltd, with practical cost using EV kits powered by RAC Electric vehicles Inc. which is the leading EV bus manufacturer in Taiwan.
This business is an initiative that contributes to various social issues, including development of local society and economy, the circular economy, and mitigation of climate change. By introducing and expanding use of these domestic retrofitted EV buses by Nishitetsu and other domestic bus businesses, we will contribute to decarbonization of the bus industry in Japan.

Hakobune Established to Provide a Service Combining EVs with Energy Management
Hakobune Inc., Sumitomo Corporation established in April 2023, provides “EV x energy management” services. Hakobune provide companies with commuter EVs for employees and workplace charging (WPC) facilities on a monthly subscription basis. If required by the companies, solar power generation equipment can be added to the package. To help employees update their commuting options and help companies decarbonize, Hakobune will provide commuter EV vehicles and WPC equipment for solar charging at workplaces to companies and their employees in areas where cars are critical for commuting. Sumitomo Corporation will make full use of its experience in the automotive and electric power businesses to accelerate its efforts to become carbon neutral through Hakobune's business while providing workers with a comfortable mobility lifestyle, thereby realizing the development of local communities and economies.

Contributing to the Decarbonization of Mining Sites Through the Supply of Trolley-assisted or AHS Mining Dump Trucks
Through our Komatsu dealer business, which currently operates in 12 countries, we are contributing to the decarbonization efforts of mining companies. Specifically, in Canada and Finland, we are supplying products that enable mining operations with reduced CO2 emissions by electrifying some truck haulage processes using a trolley system and improving operational efficiency through the introduction of Autonomous Haulage System (AHS). Because the characteristics of mining sites vary depending on the region and site, decarbonization efforts require providing optimal solutions tailored to those characteristics. Going forward, we will leverage our customer relationship that we have cultivated through our Komatsu dealer business to continue providing new products and services that meet the needs of our customers and on-site operations, thereby contributing to efforts toward decarbonization at mining sites.

