Complying with TCFD
1. Disclosure Based on TCFD Recommendations
1-1. Disclosure Policy
In August 2018, Sojitz declared its endorsement of the final recommendations of the TCFD.
Sojitz Group is actively working to disclose information and improve transparency by utilizing the TCFD framework regarding risks and opportunities related to climate change.
1-2. Status of initiatives according to the TCFD framework
Governance
The Sustainability Committee, chaired by the President & COO, meets at least four times a year. Policies, issues, and other matters discussed by the Sustainability Committee are brought up for deliberation or are reported to the Management Committee and the Board of Directors. The Board of Directors supervises this process and gives directives as necessary.
Risk Management
The Sustainability Committee evaluates and identifies GHG emissions risks in each business conducted by Sojitz Group.
In addition, Sojitz confirms individual business risks as part of the deliberation process of the Finance & Investment Deliberation Council and shares this information with each business division through the Management Committee. Furthermore, Sojitz holds stakeholder dialogues to discuss and confirm the impact of climate-related risks and opportunities on our businesses.
Strategy
【Formulating Sojitz’s actions and approach based on anticipated technological trends for each decade】
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.
1-3. Transition Risks
【Conducting scenario analysis of future risks and opportunities】
Based on external investigations and internal analysis, we are working on sequential scenario analysis of the business fields believed to present the greatest risks and opportunities to our Group’s business activities, management strategy, and financial planning. The scenario analysis is then analyzed to determine financial impact.
In addition, we will further strengthen our efforts in the area of circular economy, which is essential for achieving a decarbonized society.
1-4. Physical Risks
In addition to preparing for transition risks, we are also planning ways to address physical risks in the event that climate change cannot be curbed and global warming continues to progress. To begin with, we are examining the risks to our assets, primarily focusing on water-related risks such as floods and droughts.
Sojitz conducts regular surveys to confirm impacts on Sojitz’s businesses by utilizing the Aqueduct analysis tool for water risk assessment that references the 4-degree scenario (RCP8.5) provided by the World Resources Institute. Under Medium-term Management Plan 2023, Sojitz addressed physical risks classified by the TCFD framework and measured the financial impacts for company assets identified as having potential flood-related risk, which was considered an acute physical risk.
Amount of damages to company assets (tangible fixed assets) in the event of a flood: JPY 29 billion
- Tangible fixed assets in the “Extremely High” and “High” category in the Aqueduct analysis tool as of end of March 2025.
Metrics and Targets
Sojitz Group has established its policies and targets to fulfill its commitment to contributing to the realization of a decarbonized society, as set forth in Sojitz’s long-term sustainability vision for 2050, the “Sustainability Challenge” and has been promoting initiatives based on these policies and targets.
In response to changes in the external environment surrounding decarbonization and ESG, as well as changes in the Group’s business portfolio, Sojitz has revised its decarbonization policy by setting a new interim target for 2035 toward achieving net zero by 2050, in addition to the existing 2030 target (March 2026).
● Sojitz Group's Policies Toward Achieving a Decarbonized Society Click for details
Targets
[Scope 1・Scope 2 Targets]
For businesses in operation as of FY2019, Sojitz aims to reduce energy-related CO2 emissions by 60% by 2030 compared with FY2019 levels, including achieving net-zero for Scope 2.
In addition, for businesses in operation as of FY2024, Sojitz aims to reduce total GHG emissions by 40% by FY2035 compared with FY2024 levels, including achieving net impact zero* for Scope 2. For businesses thereafter, Sojitz aims to achieve net zero by 2050.
* Net impact zero means a concept whereby Sojitz’s own emissions are reduced to zero after deducting carbon removals and offsets, as well as avoided emissions achieved through its businesses.
| Scope1・Scope2 | ・Net zero by 2050 (Scope 1・Scope 2) ・Businesses in operation as of FY2019: 60% reduction in energy-related CO2 emissions by FY2030*1 Including net zero for Scope 2 by FY2030 ・Businesses in operation as of FY2024: 40% reduction in GHG emissions by FY2035*2 Including net impact zero for Scope 2 by FY2035 |
|---|---|
| Coal-fired power generation | Sojitz currently has no coal-fired power generation assets and does not plan to acquire any in the future. |
Scope of reporting: These targets apply to Sojitz Corporation (non-consolidated), all consolidated subsidiaries in Japan and overseas, and unincorporated joint ventures subject to reporting under Sojitz’s management control approach.
*1 Energy-related CO2 emissions, with FY2019 as the base year.
*2 GHG emissions, with FY2024 as the base year.
[Scope 3 Targets (Natural Resource Interests)]
Scope 3 refers primarily to GHG emissions generated throughout the supply chain. Trading companies are involved in extensive supply chains ranging from upstream to downstream.
As of FY2019, if all of Sojitz’s resource interests were combusted, the resulting GHG emissions would amount to approximately 200 million tons, far exceeding the approximately 1 million tons of GHG emissions generated from the Sojitz Group’s own direct energy use (Scope 1・Scope 2).
In recognition of the heightened social responsibility associated with resource interests, we have set out the following policies and targets since 2019.
Targets for Resource Interests Businesses
| Thermal coal interests | Reduce to half or less by 2025; zero by 2030 *3 |
|---|---|
| Oil interests | Zero by 2030 |
| Coking coal interests | Zero by 2050 |
- *3 Based on the book value of asset holdings in resource interests, with FY2018 as the base year.
Sojitz has developed a roadmap that outlines technological trends and social developments by decade on the path toward a decarbonized society, and, based on this roadmap, examines and organizes its responses and approach.
The above targets have been formulated taking into account such forward-looking assessments, including the future operating environment and actual business conditions. Accordingly, these targets are based on current future assumptions and will be flexibly reviewed in response to changes in social trends and the pace of technological innovation.
Progress
As of March 2025, progress toward the 2030 targets shows that Scope 1 and Scope 2 emissions have been reduced by approximately 40%, while thermal coal interests have already been reduced by approximately 90%.
Reduction of Emission in Resource Interests:
2. What is TCFD?
TCFD stands for Task Force on Climate-related Financial Disclosures. The TCFD is an initiative created by the Financial Stability Board (FSB) based on the request from the G20 seeking a review of the financial industry from the perspective of financial stability and preventing loss of assets as the financial world undergoes fundamental and serious changes in transition to a low-carbon economy.
TCFD encourages companies to assess and consider future financial effects that result from the risks and opportunities presented by climate change.
3. TCFD-recommended Framework for Climate-related Financial Disclosures
TCFD presents a voluntary framework for helping businesses disclose climate-related financial information. The TCFD recommends disclosure in relation to risks and opportunities linked to climate change in terms of four themes: governance, strategy, risk management, and metrics and targets.
Additionally, it recommends incorporating climate-related scenario analysis as a distinctive part of strategic planning.
Governance
- Ensure oversight by the Board of Directors
- Define the role of management in assessing and managing risks and opportunities
Risk Management
- Describe the processes for identifying and assessing risks
- Describe the processes for managing risks
- Integrate those processes into overall risk management
Strategy
- Identify the climate-related risks and opportunities over the short, medium, and long term
- Describe the impact on the company's businesses, strategy, and financial planning
- Incorporate scenario analysis in strategic planning
Metrics and Targets
- Set targets for evaluating risk
- Disclose greenhouse gas emissions and the related risks
- Describe the targets and relevant Key Performance Indicators to manage risks