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.

ご参照Sustainability Challenge

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

Aim of Scope1 and Scope2

Scope1 encompasses all of the CO2 generated directly by the company from burning resources such as coal and gas, etc. 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

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 400 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

New Businesses

For all new businesses, 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

　

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 Department as a working organization to support the Sustainability Committee. The Corporate Sustainability Department 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.

ご参照Systems for Enacting Corporate Sustainability

Sustainability Committee

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 April 1, 2024)

ご参照The Sustainability Committee

<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).

ご参照 TCFD-Recommended Framework for Climate-Related Financial Disclosures and Scenario Analysis

<2> Minimizing Risk

Reduction Measures for Scope1 and 2 Emissions

＜Existing Businesses＞

＜New Businesses＞

Sojitz has included these mechanisms in its 30-billion-yen MTP2023 budget for non-financial investment in human capital and organizational reform.

Measuring and Tracking Scope3 Emissions

Scope3 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. We will therefore measure and track their Scope3 emissions for these areas. Next 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 300 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.

Approach	◆Scope3 refers to annual CO2 emissions in the supply chain. ◆In addition to existing initiatives across Sojitz Group, it is necessary to include measures to reduce CO2 emissions throughout supply chains. ◆Sojitz acknowledges that segments of our supply chain with high Scope3 emissions can be considered high risk due to future emissions reduction pressure.
Policy(※)	◆Reduce thermal coal interests to half or less by 2025, and to zero by 2030. ◆Reduce coking coal interests to zero by 2050.
Action	◆Sojitz Group will identify sectors with high CO2 emissions and use qualitative analysis to assess Sojitz’s supply chains. ◆We will prioritize improvement measures for the power sector for thermal coal and gas businesses, which have a significant impact on earnings and high CO2 emissions. ◆Sojitz Group will quantify Scope3 for thermal coal and gas in the power sector. ◆We will set emissions reduction policies for natural resource interests (stocks) which affect the company and have a global impact.

<3> Seizing Business Opportunities

◆Opportunities under Scope4
Sojitz Group sees Scope3 emissions not only as a risk, but also as an opportunity to create new business that contribute to a reduction of CO2 emissions throughout supply chains as part of initiatives which tie into company growth. In the future, Sojitz will increase Scope4 initiatives which contribute to avoided CO2 emissions.

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.

Recent Releases:

■Carbon Neutral

ご参照Sojitz Begins Construction on one of the Largest-scale Solar Farms by Japanese companies in Australia

ご参照 Sojitz to Provide Green Hydrogen Produced in Australia to Pacific Island Countries

ご参照 Sojitz Begins Commercial Operations of One of Japanese Largest Biomass Power Plants in Tomakomai, Hokkaido

ご参照Sojitz Enters Energy Conservation Business in Australia

ご参照Sojitz, Nissho Electronics, and OMRON Launch Cloud-based Battery Charging Control Service, EV AutoCharge, for Commercial EVs/PHEVs at Sekisui House, a Decarbonization Leader in the Housing Industry

ご参照Sojitz and EMI Establish Joint Venture Company in Indonesia to Begin Rooftop Solar Generation Business

ご参照Kyushu University to Make First Business Investment in Carbon Xtract Corporation, a Company with Revolutionary DAC Technology that Uses Nano-Separation Membranes

■Gas-Related Business (Transition)

ご参照Sojitz Enters Natural Gas-fired Power and Desalination Project in the United Arab Emirates

ご参照 Sojitz Participates in Syrdarya II IPP Project in Uzbekistan

ご参照Helios Investment Partners and Sojitz Corporation start collaborations in West African gas downstream businesses

ご参照Sojitz Joins Scarborough Gas Project in Western Australia via LNG Japan Corporation, also signs a Memorandum of Understanding with Woodside regarding a relationship for future initiatives in the decarbonization and the clean energy fields

■Circular Business (Recycle)

ご参照Sojitz to Begin “Pool Project Kawasaki,” a Verification Test Project for Efficient Collection and Recycling of Plastic Container Waste from Condominiums in Kawasaki City

ご参照 Sojitz Pla-Net and ANA Group launch recycling operation to reduce the disposal of plastic waste

ご参照Sojitz Pla-Net Establishes Plastic Recycling Process that Prevents Contamination Expanding a Closed Recycling Initiative that Reproduces Products Identical to the Original Plastic Product

ご参照 Consortium Formed to Realize Horizontal Recycling for Plastic Bottle Caps through “Cap to Cap” Initiative

ご参照 JX Metals and Sojitz Collaborate with Canada’s Largest Recycler of Household Appliances and Electronic Devices

　

＜Analysis of Scope3 and Scope4 Emissions across the Supply Chain＞

Sojitz performs qualitative analysis of the risks and opportunities it faces based on a matrix that uses industries with generally high CO2 emissions on the vertical axis and the stages of each supply chain on the horizontal axis. In addition, quantitative assessments are performed with regard to the power generation sector, which has been judged to entail particularly high emissions.

<4> Collaborating with Stakeholders

Sojitz participates in METI’s GX League, a forum for cooperation between companies, government, and academic bodies to achieve METI’s strategy for carbon neutrality by 2050. Sojitz is also a member of a GX Business Working Group under the same organization.