Sojitz Group Policies for Realizing a Decarbonized Society
– Striving to Achieve Carbon Neutrality by 2050 –
Sojitz Group has established new policies and targets to fulfill its commitment for realizing a decarbonized society as announced in Sojitz’s long-term sustainability vision for 2050, the “Sustainability Challenge.
Sojitz Group’s Decarbonization Policies and Targets
Based on our assessment of expected future technological trends and a careful examination of risks and opportunities, we have set policies and targets for existing and future businesses.
1) existing businesses, and 2) new businesses that will be initiated in the future. For existing businesses, emission reduction targets will be set based on separate international protocols for CO2 emissions (Scope). For new businesses, Sojitz views the transition towards a decarbonized society as an opportunity for growth, and the company will actively promote diverse new businesses.
＜Scope 1 and Scope 2 Targets＞
Scope 1 encompasses all of the CO2 generated directly by the company from burning coal and gas etc. Scope 2 mainly refers to the CO2 generated by the company’s consumption of electricity. Both types of CO2 emissions contribute to the company’s direct energy usage. Sojitz Group’s annual emissions are close to 1 million tons. While this output is limited when compared to the emissions from interest businesses (Scope 3), Sojitz believes decarbonization is a necessary step to strengthen the resilience of our earnings foundation, and the company has established the following targets as a result.
|SCOPE1+2||Reduce emissions 60% by 2030; achieve net-zero emissions by 2050 *1
For Scope 2: Net-zero emissions by 2030 *2
|Coal-fired power generation||No current projects nor future projects planned|
- *1、*2 FY2019 serves as the base year, with Sojitz and its consolidated subsidiaries included in the scope.
FY2018 was used as the base year when these targets were originally released in March 2021. We have now changed the base year to FY2019 in order to duly reflect the environmental impact of an overseas papermaking company acquired in FY2019. The change allows the papermaking operations to be treated as part of “existing businesses.”
Includes carbon offsets from certificates, introduction of internal carbon pricing under consideration, which supports the reduction of CO2.
＜Scope 3 Targets (Natural Resource Interests)＞
Scope 3 refers mainly to the indirect CO2 emissions generated in the supply chain. Trading companies have extensive supply chains from upstream to downstream. If all of Sojitz’s current natural resource interests were burned, it would generate approximately 300 million tons of CO2. This amount greatly exceeds the 1 million tons of CO2 emissions generated from Sojitz Group’s direct energy use (Scope 1 + 2). Sojitz therefore views addressing these Scope 3 emissions as a major social responsibility.
For this reason, Sojitz will move up the scheduled timeline for achieving its emission reduction targets for thermal coal interests. Sojitz has also newly-established the following policies and targets for oil interests and coking coal interests. In coking coal-related business, Sojitz will actively engage in new business opportunities associated with technological innovations, such as CO2 capture and new iron-making methods to reduce CO2 emissions.
＜Targets (Natural Resource Interests)＞
|Thermal coal interests||Reduce interests to half or less by 2025 zero interests by 2030 *3|
|Oil interests||Zero interests by 2030|
|Coking coal interests||Zero interests by 2050|
- *3 FY2018 serves as the base year, and targets are based on the book value of assets in coal interests.
In May 2019, Sojitz announced its goal of reducing thermal coal interests to half or less by 2030.
For all new businesses initiated going forward, Sojitz aims to realize net-zero carbon emissions by 2050.
The aforementioned goals are based on the current future forecast and will be subject to flexible review in accordance with social trends and technological innovations.
Sojitz’s Perspective on its Responsibility to Achieve a Decarbonized Society
Sojitz seeks to maximize “two types of value” through its business activities— “value for Sojitz” and “value for society”— in order to “create value and prosperity” as set forth in its corporate statement.
Sojitz has continued to expand its business foundation and pursue growth by providing solutions to social problems through its business activities, and these solution-based initiatives have become areas of strength for the company.
In terms of the issue of securing and supplying energy, Sojitz has worked to play a role in providing energy solutions by conducting many resource businesses both in Japan and overseas while simultaneously connecting these solutions to profit for the company.
In recent years, global warming has emerged as a new issue of major importance and attention, and the global trend towards carbon neutrality has accelerated. Under these circumstances, it is necessary to transition from the simple use and supply of energy to new ways of using and supplying green energy.
In order to achieve these aims, Sojitz will accelerate efforts to reduce CO2 emissions for the Group’s existing businesses as preparation for the coming age of a decarbonized society by increasing the company’s business resilience. At the same time, Sojitz sees this shift to decarbonization as a new opportunity that can be applied to future businesses, not only within the energy sector, but in a wide range of business fields. Through these efforts, Sojitz aims to create “value for society” through decarbonization and to expand its earnings opportunities to create “value for Sojitz” in the process.
Under our new Medium-term Management Plan 2023 which began in 2021, we will pursue the aforementioned decarbonization policies and other measures, as well as identify and measure Scope 3 and Scope 4 (avoided) emissions.
As stated in the news release, “Sojitz Corporation Announces Organizational Reforms and Executive Appointments” dated November 27th, 2020, resources will be consolidated for businesses related to the environment (including power generation), healthcare, and infrastructure to strengthen its framework for projects. In the metals and mineral resource fields, Sojitz is focused on expanding the recycling business in anticipation of the circular society that will follow the realization of a decarbonized society.
Background to our policy
Sojitz strives to understand external trends and perspectives in the process of pursuing sustainability, and these are then reflected in our policies and business activities. In addition, through appropriate disclosure, we are putting into practice a cycle that allows all of our stakeholders to gain a deeper understanding of Sojitz’s activities, and to offer us further new opinions.
In the formulation of our decarbonization policy, we held a series of internal discussions based on the outlook of future external trends and on input from outside experts at our stakeholder dialogues.
Sojitz identifies the technological and global trends of each decade and organizes its thinking and policies based on risks and opportunities for Sojitz. Sojitz will continue to monitor external trends and update its approach and ways of thinking.
Reduction measures for Scope 1 and 2 emissions
- ■Initially focus on electricity (SCOPE2) where clear alternatives exist, i.e. renewables
- ■Review businesses from perspective of decarbonization etc. against obsolescence risks with view to possibility of exiting
- ■For SCOPE1, priority on switching away from low-efficiency coal- and oil-fired power generation assets as renewal becomes due. Longer time horizon for gas-fired power generation as alternatives such as hydrogen and ammonia not yet economically justifiable and require further technological innovation.
- ■Carbon offset certificates may be utilized for remaining CO2 emissions but only minimally
- ■Net zero in 2050, just as existing businesses. Interim milestones for 2030 to be established individually.
Support mechanisms to facilitate transitions under consideration for each business. Included in 30 billion yen MTP2023 budget for non-financial investment in human resources and organizational reform.
Data and Results
Note: FY2019 data includes companies sold off as of FY2020.
|FY19||FY20||increase and decrease||rate of change|
|Renewable energy usage||Purchased from external sources||thousand kWh||162.1||205.6||43.5||＋26.8|
|Generated and used by Sojitz Group||0||4.3||4.3||-|
Scope 3/Natural Resource Interests
【We will strive to reduce our coal interests. For other interests, we will focus on measuring and understanding our Scope 3 emissions first.】
Scope 4/Avoided emissions
【We will increase Scope 4 (avoided) emissions.】
Approach to our power generation business
【Sojitz will limit CO2 emissions efficiency to below the level required by the 1.5℃ scenario.】
【We will continue to create renewable resource power generation projects for the benefit of society.】