As Sojitz seeks to create value and prosperity as described in our Corporate Statement, we aim to maximize our two types of value—“value for Sojitz” and “value for society.”
Through our previous business activities, we have sought to transform the solution to social issues into our strength as a company as we have expanded and grown our businesses. We have been involved in a number of resource businesses in Japan and overseas to help solve society’s need for energy and security, and these efforts have been reflected in our earnings.
While climate change is attracting more attention and the world’s shift towards carbon neutrality continues to accelerate, simple energy generation and consumption is no longer sufficient; more eco-friendly power generation and consumption methods are needed.
To this end, we have set forth our contribution to the realization of a decarbonized society in the Sustainability Challenge, our long-term sustainability vision for the year 2050. In addition to accelerating the reduction of CO2 emissions from Sojitz Group's existing businesses to increase our resilience in a decarbonized society, we will also utilize this transition as an opportunity to build a wide range of new businesses in a variety of fields, not only in the energy sector, as we move forward. In this way, we will expand our profit-earning opportunities as "value for Sojitz " as we seek to create "value for society " in the form of achieving a decarbonized society.
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.
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.
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 400 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, in March, 2021, Sojitz moved 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 original 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.
Moreover, these targets are based on a roadmap of technological and societal trends forecasted in each decade leading up to the realization of a decarbonized society, and we formulate our actions and approach in line with these trends.
As a result, 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.
In formulating and updating this decarbonization roadmap, we invite outside experts to stakeholder dialogues every year to stay up to date on the latest trends.
In addition, we hold internal discussions with the COOs of each business division, and make policy decisions based on discussions held by the Board of Directors, the Management Committee, and the Sustainability Committee.
Sustainability Promotion Cycle
Stakeholder dialogues (FY2020)
Based on the policies outlined above, we will reduce our share of carbon-heavy “brown businesses,” and increase our share of “green businesses” that contribute to CO2 reduction in society as well as of businesses that support this transition, so as to make our overall business portfolio greener. Global debate is still ongoing on definitions of green, brown, and transition businesses. We will continue to monitor developments, including the most-advanced EU taxonomy.
Sojitz Group's actions taken in response to climate change are discussed by the Sustainability Committee and reported to the Management Committee and the Board of Directors. The Board of Directors supervises these activities and gives direction.
In addition, when deliberating business investments and loans, the Sustainability Committee analyzes and evaluates risks related to climate change, confirms the value the project, and makes the determination to move forward with the investment or loan.
We have established the Corporate Sustainability Office as a working organization to support the Sustainability Committee. The Corporate Sustainability Office carries out the instructions of the Sustainability Committee and confirms the deliberations of the Finance & Investment Deliberation Council from the perspective of sustainability, including climate change.
The Sustainability Committee's activities include establishing company-wide sustainability-related policies and goals, constructing frameworks for their implementation, and monitoring various measures that utilize the ISO 14001 environmental management system standard.
Sustainability Committee Members (Current as of June 20, 2023)
Asterisk (*) indicates a Director
Double asterisk (**) indicates a Representative Director
1: Endorsement of TCFD
Sojitz Group is actively working to disclose information and improve transparency by utilizing the TCFD*1 framework regarding risks and opportunities related to climate change.
*1: In August 2018, Sojitz declared its endorsement of the final recommendations of the TCFD (Task Force on Climate-related Financial Disclosures).
2: Efforts to Reduce CO2 Emissions
We are implementing initiatives to tackle climate change in line with each of our policies and targets. Currently, we are holding dialogues with the major CO2 emitters within Sojitz Group to discuss CO2 reduction measures.
Reduction Measures for Scope 1 and 2 Emissions
- ・Initially focus on electricity (Scope 2) where clear alternatives exist, i.e. renewables
- ・Review businesses from perspective of decarbonization, etc. against obsolescence risks with view to possibility of exiting
- ・For Scope 1, 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 the 30 billion yen MTP2023 budget for non-financial investment in human resources and organizational reform.
Reducing Scope 3 Emissions
Scope 3 mainly refers to indirect CO2 emissions in supply chains. However, as trading companies are involved in extensive supply chains from upstream to downstream, it is difficult to clearly ascertain these emissions.
We will therefore identify business areas that have a significant impact on our growth and business performance, as well as on society, and will seek to identify and measure their Scope 3 emissions. We will then consider individual policies to implement in each business area.
As a first step, we have addressed the coal interests held by Sojitz Group. If all of the coal interests (thermal coal and coking coal) currently held by Sojitz Group were burned, it would generate approximately 400 million tons of CO2. Because this potential amount is so large, we have established a policy of reducing our interests in coal used for power generation (thermal coal)—which can already be replaced by renewable energy—to zero by 2030, and to reduce our interests in coking coal (which is used as a reductant in steel production) to zero by 2050, assuming that alternative reductants such as hydrogen and ammonia will become widely used in the 2040s and beyond.
3: Our Approach to Climate Change-Related Opportunities
Sojitz Group sees the current shift to a decarbonized society as an opportunity, and we are creating businesses in a wide range of fields, not only within the energy sector, but also in the recycling-related (circular) business sector.
To achieve these aims, under Medium-term Management Plan 2023, we have consolidated resources for businesses related to the environment (including power generation), healthcare, and infrastructure into the Infrastructure & Healthcare Division. In the metals and mineral resource fields, we have renamed the division the Metals, Mineral Resources & Recycling Division and are focused on expanding the recycling business in anticipation of the circular society that will follow the realization of a decarbonized society.
Initiatives from FY2018–FY2020
FY2021 Press Releases:
We are considering adopting Scope 4 as a measure of our aforementioned contributions to achieving a decarbonized society. Scope 4 refers to the amount of CO2 global emissions reductions resulting from a company’s products and services. Although the calculation method for Scope 4 has not yet been established, the standardization method is under consideration at the ISO and other organizations.
We will keep a close eye on this trend towards Scope 4 standardization and continue our efforts to measure and understand it in detail as we consider incorporating it into our future targets.
1: Scope 1 and Scope 2 Emissions
CO2 Emissions (Sojitz Group)
Scope Breakdown CO2 Emissions (Sojitz Group)
|Breakdown of CO2 Emissions
(Direct emissions from use of fuels such as city gas)
(Indirect emissions from use of purchased electricity and heat)
Target for Scope 1 and 2 Emissions Reduction
2: Renewable Energy Usage (Sojitz Group)
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||-|
3: Reduction of Thermal Coal Interests