Carbon Neutrality Target Updated

Sumitomo Corporation (Head Office: Chiyoda-ku, Tokyo; Representative Director, President and Chief Executive Officer: Shingo Ueno) announced today that, to further advance its efforts to address climate change issues, it has updated its carbon neutrality^*1 target and accordingly revised the related Policies on Climate Change Issues, and the medium- and long-term goals under the Material Issue “Overcome climate change.”

Basic Stance on Climate Change Issues

Sumitomo Corporation identified Material Issues that represent its medium- and long-term commitment that goes one step further toward addressing key social challenges that the Group must undertake with the aim of achieving sustainable growth. To address climate change issues, one of the Material Issues, the Sumitomo Corporation Group is working to achieve the carbon neutrality of its businesses by 2050 and its emission reduction target by FY2035. The Group is also taking action to contribute to a carbon-neutral society by developing technologies and business models that can achieve sustainable energy cycles and working in collaboration with business partners and public institutions.

Material Issues

Background and Overview of Updated Carbon Neutrality Target

In light of the completion of the Sumitomo Corporation Group’s Scope 3 emission calculations and disclosures and in anticipation of the application of the Sustainability Standards Board of Japan (SSBJ) standards^*2, Sumitomo Corporation updated the Group’s carbon neutrality target in line with emission categories based on the GHG Protocol^*3 with the objective of strengthening accountability.

The Sumitomo Corporation Group’s Carbon Neutrality Target

Previous Target

Boundary	Thermal power generation business*4, fossil fuel upstream business*5, and Scope 1/2
Level	With FY2019 as the base year, reduce emissions by 50% by 2035 and achieve carbon neutrality by 2050

Updated Target

Boundary	Scope 1/2 and Scope 3 (Category 13 and 15)
Level	With FY2024 as the base year, reduce emissions by 30%* by FY2035 and achieve carbon neutrality by 2050 *85% reduction in Scope 1/2 and 20% reduction in Scope 3 (Category 13 and 15) Note that reducing emissions in the thermal power generation business and fossil fuel upstream business remains as a separate business target.

The boundary of Scope 3 in its carbon neutrality target has been set to include Category 13 (downstream leased assets) and Category 15 (investments), taking into comprehensive consideration the extent to which the Group can engage with emitters in the supply chain and reduction priorities and taking into account our diverse business domains. Pursuant to this expansion of boundary, its emission reduction target is a 30% reduction by FY2035 compared to the base year. In addition, following the update of our carbon neutrality target, the Group accordingly revised the related Policies on Climate Change Issues, and the medium- and long-term goals under the Material Issue “Overcome climate change.”

Going forward, the Sumitomo Corporation Group will continue to strengthen its efforts toward achieving its objectives relating to the Material Issues and its medium- and long-term goals while seeking feedback from various stakeholders.

Contribution to the Carbon Neutrality of Society

The Sumitomo Corporation Group is actively working to create next-generation businesses with the objective of contributing to the carbon neutrality of society. In addition, the Group set “Accelerated new growth driven by green transformation (GX)” as an initiative under the Medium-Term Management Plan 2026, and in the short term, it will use GX to reinforce those businesses in which it has strengths and competitive advantages while taking action to develop new strengths for the future in various industrial fields over the medium to long term.

For details of the background and details of the carbon neutrality target update as well as our initiatives to contribute to the carbon neutrality of society, please refer to the Climate Change Special Website.

Climate Change Special Website

*1 Carbon neutrality means reducing the GHG emissions of the Sumitomo Corporation Group and neutralizing the residual emissions to net zero through internationally recognized methods such as carbon removal
*2 Japan’s sustainability disclosure standards developed by the Sustainability Standards Board of Japan
*3 The international standard for measuring and reporting greenhouse gas (GHG) emissions
*4 Direct CO₂ emissions of Sumitomo Corporation and its subsidiaries and affiliated companies under the equity-method from the thermal power generation business (the entity`s Scope 1), as well as indirect CO<sub>2</sub> emissions from the generation of energy used by each company in its business (the entity`s Scope 2)
*5 Indirect CO₂ emissions associated with the use of energy resources produced by fossil fuel upstream business of Sumitomo Corporation Group, its subsidiaries, and affiliated companies under the equity method (the entity`s Scope 3 Category 11)

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