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.
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Sojitz Group’s Decarbonization Policies and Targets
We at Sojitz Group believe it is our responsibility to reduce the Group’s CO2 emissions (Scope1 and 2) in our business activities in order to contribute to the realization of a decarbonized society. Additionally, Sojitz acknowledges the necessity for initiatives that cover CO2 emissions (Scope3) within our supply chains.
While segments of our supply chain with high Scope3 emissions can be considered high risk due to future emissions reduction pressure.
Sojitz Group recognizes the opportunities that present themselves as new avoided emissions businesses and are moving towards creating these initiatives. Sojitz will continue to accumulate avoided CO2 emissions as defined in Scope4.
Specifically, we have set policies and targets for both existing and new businesses based on forecasted technological trends and a careful examination of risks and opportunities.
For existing businesses, emission reduction targets will be set based on separate international protocols for CO2 emissions (Scope categories). 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.
【Existing Businesses】
＜Scope1 and Scope2 Targets＞
Scope1 encompasses all of the CO2 generated directly by the company from burning resources such as coal and gas. Scope2 mainly refers to the CO2 generated by the company’s consumption of electricity. Sojitz Group recognizes its responsibility to reduce Scope1 and Scope2 emissions as it develops a wide range of businesses. For all existing businesses acquired prior to April 2020, Sojitz aims to reduce overall emissions by 60% before 2030, which includes reaching net zero emissions for Scope2. For Sojitz businesses acquired from April 2020 onwards, we aim to achieve net zero emissions by 2050.
| Scope1+2 | Reduce emissions 60% by 2030; achieve net-zero emissions by 2050 *1 For Scope2: 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.
＜Scope3 Targets (Natural Resource Interests)＞
Scope3 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 (Scope1 and 2). Sojitz therefore views addressing these Scope3 emissions as a major social responsibility.
For this reason, Sojitz has established the following strategic targets for natural resource interests. In its 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.
＜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.
【New Businesses】
Sojitz aims to achieve net-zero carbon emissions for all new businesses by 2050.
The aforementioned goals are based on the current future forecast and will be subject to review in accordance with social trends and technological developments.
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 in preparation for the coming age of decarbonization by increasing the company’s business resilience. At the same time, Sojitz sees the shift to decarbonization as a new opportunity that can be leveraged to develop new businesses, not only within the power 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 Medium-term Management Plan 2023 which began in 2021, we have pursued the aforementioned decarbonization policies and other measures, as well as measuring and tracking Scope3 and Scope4 (avoided) emissions.
As stated in the news release, “Sojitz Corporation Announces Organizational Reforms and Executive Appointments” dated December 26th, 2023, Sojitz newly established the Energy Transformation Department as a specialized organization for businesses in the new energy and decarbonization field. The Energy Transformation Department will collaborate with each business division to create and accelerate growth of energy transformation (EX) projects and businesses.
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.
Related Pages
【Sojitz's decarbonization Road Map】
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 Scope1 and 2 emissions
＜Existing Businesses＞
- ■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
＜New Businesses＞
- ■Sojitz aims to achieve net zero emissions in 2050, just as we aim to achieve net zero for existing businesses. Midterm milestones for 2030 to be established as required.
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
Reduction of Scope1 and Scope2 Emissions
Note: FY2019 data includes companies sold off as of FY2020.
Sojitz Group’s Electricity Consumption
| FY2018 | FY2019 | FY2020 | FY2021 | FY2022 | |
| Total electricity consumption | 136,636 thousand kWh | 220,930 thousand kWh | 263,805 thousand kWh | 266,035 thousand kWh | 295,770 ★thousand kWh |
| -Of total electricity, amount of electric power from renewable energy used | ー | 162 thousand kWh | 210 thousand kWh | 760 thousand kWh | 3,015 thousand kWh |
| -generated internally utilizing renewable resources | ー | 0 thousand kWh | 4 thousand kWh | 70 thousand kWh | 1,582 thousand kWh |
| -purchased renewable energy electricity amounts | ー | 162 thousand kWh | 206 thousand kWh | 680 thousand kWh | 1,433 thousand kWh |
| -purchased non-fossil fuel certificates | ー | 0 thousand kWh | 0 thousand kWh | 10 thousand kWh | 0 thousand kWh |
Scope3/Natural Resource Interests
| Approach |
|
|---|---|
| Policy(※) |
|
| Action |
|
【Result】
Reduction of Emission in Natural Resource Interests.
＜CO2 emissions for supply chains＞
- ◆ Thermal coal
| Scope | Emission volumes (t-CO2) |
Calculation methods / Other | ||
|---|---|---|---|---|
| Scope1 and 2 | - | - | ||
| category（*） | ||||
| Scope3 | 1 | Purchased goods and services | 1,293,426 | Calculated by multiplying the production of thermal coal traded by Sojitz (including that from the mines in which Sojitz holds equity interests) by an emissions factor. |
| 2 | Capital goods | - | - | |
| 3 | Fuel- and energy-related activities (not included in Scope1 or Scope2) |
- | - | |
| 4 | Upstream transportation and distribution | 182,569 | Calculated by multiplying the sold thermal coal traded by Sojitz (including that from the mines in which Sojitz holds equity interests) by transportation distance and emissions factors, or by multiplying fuel consumption by emissions factors. Transportation distance is calculated up until the trader in the case where the sales destination is a trader and Sojitz is unable to ascertain the destination beyond them. | |
| 5 | Waste generated in operations | - | - | |
| 6 | Business travel | - | - | |
| 7 | Employee commuting | - | - | |
| 8 | Upstream leased assets | - | Not applicable based on the specific attributes of the business | |
| 9 | Downstream transportation and distribution | - | - | |
| 10 | Processing of sold products | - | Not applicable based on the specific attributes of the business | |
| 11 | Use of sold products | 19,433,869 | Calculated by multiplying the thermal coal traded by Sojitz by an emissions factor. | |
| 12 | End-of-life treatment of sold products | - | Not applicable based on the specific attributes of the business | |
| 13 | Downstream leased assets | - | Not applicable based on the specific attributes of the business | |
| 14 | Franchises | - | Not applicable based on the specific attributes of the business | |
| 15 | Investments | 350,617 | Scope1 and Scope2 emissions of the coal mines in which Sojitz holds equity interest. | |
| Total | 21,260,481 | |||
| Total for supply chain | 21,260,481★ | |||
* Supply chain categories are in accordance with established GHG protocol
- ◆ Oil & Gas
| Scope | Emission volumes (t-CO2) |
Calculation methods / Other | ||
|---|---|---|---|---|
| Scope1 and 2 | 193,886 | This represents the total of Scope1 and Scope2 emissions of power plants of consolidated subsidiaries. | ||
| category（*） | ||||
| Scope3 | 1 | Purchased goods and services | - | Not applicable based on the specific attributes of the business |
| 2 | Capital goods | - | - | |
| 3 | Fuel- and energy-related activities (not included in Scope1 or Scope2) |
28,232 | Calculated by multiplying the fuel and electricity consumption of the consolidated subsidiaries operating power plants by emissions factors. | |
| 4 | Upstream transportation and distribution | - | Not applicable based on the specific attributes of the business | |
| 5 | Waste generated in operations | - | - | |
| 6 | Business travel | - | - | |
| 7 | Employee commuting | - | - | |
| 8 | Upstream leased assets | - | Not applicable based on the specific attributes of the business | |
| 9 | Downstream transportation and distribution | - | Not applicable based on the specific attributes of the business | |
| 10 | Processing of sold products | - | Not applicable based on the specific attributes of the business | |
| 11 | Use of sold products | - | Not applicable based on the specific attributes of the business | |
| 12 | End-of-life treatment of sold products | - | Not applicable based on the specific attributes of the business | |
| 13 | Downstream leased assets | - | Not applicable based on the specific attributes of the business | |
| 14 | Franchises | - | Not applicable based on the specific attributes of the business | |
| 15 | Investments | 2,278,968 | The sum of the emissions from the power plants of the companies in which Sojitz holds equity interest, calculated by multiplying the fuel and electricity consumption by emission factors, and the emissions calculated by multiplying the production of oil and gas by emission factors. | |
| Total | 2,307,199 | |||
| Total for supply chain | 2,501,086★ | |||
* Supply chain categories are in accordance with established GHG protocol
(※)Approach to reducing interests
Setting FY2018 as the base year, Sojitz plans to reduce its total interests in thermal and coking coal at a rate that exceeds the reduction rate in seaborne trade of coal as described in the 1.5℃ scenario.
Scope4/Avoided emissions
| Approach |
|
|---|---|
| Action |
|
＜Accumulation of Scope4 (avoided) emissions＞
For example, in the case of renewable energy businesses, the difference between the average CO2 emissions from electricity generation in a country (unit = CO2 volume / kwh), and the CO2 emissions of our renewable energy business (zero) is the amount of avoided emissions.
Calculation method: (CO2 emissions per kwh in the country – CO2 emissions per kwh in the Sojitz project ) × amount of power generated by the Sojitz project
Note: This is just an example, as the calculation standard is currently under consideration by the ISO.
Approach to our power generation business
【Sojitz will limit CO2 emissions efficiency to below the level required by the 1.5℃ scenario.】
| Approach |
|
|---|
(※)＜Limiting Our Emissions Factor＞
The emissions factor is the amount of CO2 per amount of electricity generated.
Formula: Emissions factor = CO2 emission quantity / electricity generated.
The green line below shows the decreasing emissions factor requirement under the 1.5℃ scenario over time. Sojitz will keep the value of its own emissions factor below the requirements of the 1.5℃ scenario.
【We will continue to create renewable resource power generation projects for the benefit of society.】
| Approach |
|
|---|
Image of Asset Transformation
【Increasing “Green” Portion of Assets】
＜Approach＞
Reduce share of carbon-heavy Brown businesses, increase share of Green Businesses that contribute to CO2 reduction in society and “Transition Businesses” which support the transition, so as to make overall business portfolio greener. Global debate still ongoing on definitions of green, brown, and transition. Developments to be monitored, including the most-advanced EU taxonomy.
