Climate Change
1. Policy and Basic Approach
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.
2. Goals and Targets
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.
2-1. Existing Businesses
2-1-1. Aim of Scope1 and Scope2
Scope1 encompasses all of the CO2 generated directly by the company from burning resources such as 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 |
*1, *2 Reductions from base year of FY2019, scope includes Sojitz Corporation (non-consolidated), consolidated subsidiaries, and unincorporated joint ventures subject to reporting based on Sojitz approach toward control of management
2-1-2. 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 200 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 original goal of reducing thermal coal interests to half or less by 2030.
2-2. New Businesses
For all new businesses, Sojitz aims to realize net-zero carbon emissions by 2050.
2-3. Progress
Decarbonization Policy and Progress Status
As of March 2025, progress in Scope 1 and Scope 2 has achieved approximately a 40% reduction, while thermal coal interests have already achieved approximately a 90% reduction.
2-4. Decarbonization Roadmap
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.
3. Systems
Sustainability Committee Members (Current as of April 1, 2025)
| Committee Chair |
|
|---|---|
| Members |
|
| Observers |
|
| Secretariat |
|
4. Initiatives
4-1. 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.
- In August 2018, Sojitz declared its endorsement of the final recommendations of the TCFD (Task Force on Climate-related Financial Disclosures).
4-2. Minimizing Risk
4-2-1. Reduction Measures for Scope1 and 2 Emissions
Existing Businesses
- Sojitz’s initial aim is to reduce Scope2 emissions by prioritizing transition to renewable energy.
- For Scope1, Sojitz will prioritize an energy transition for low-efficiency coal and petroleum facilities due for renewal.
- For assets using fossil fuels, Sojitz will take a long-term view of potential impacts and consider transition to green alternatives such as hydrogen, ammonia, and e-fuels.
- In addition, Sojitz will consider exit from such businesses that are at risk of becoming obsolete, taking into consideration decarbonization targets and other factors.
- Sojitz will consider the use of carbon offset certificates for its remaining greenhouse gas emissions but will aim to keep the proportion of offsets to an absolute minimum.
New Businesses
- Sojitz aims to achieve net zero emissions by 2050, just as we aim to achieve net zero for existing businesses. Midterm milestones for 2030 to be established as required.
- Sojitz is considering implementing support mechanisms for each business to facilitate smooth transitions.
Sojitz has included these mechanisms in its 30-billion-yen MTP2023 budget for non-financial investment in human capital and organizational reform.
4-2-2. 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 200 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 |
|
|---|---|
| Policy(*) |
|
| Action |
|
-
(*)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.
-
4-3. Seizing Business Opportunities
4-3-1. 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, Sojitz established the Energy Transformation Department as part of Medium-term Management Plan 2026. The Energy Transformation Department is an organization that operates cross-organizationally to accelerate the creation and advancement of businesses and projects in the fields of new energy and decarbonization.
Additionally, we have consolidated our resources in the business fields of 1) the environment (including renewable power generation in Japan and overseas), 2) other forms of power generation, and 3) healthcare, and reorganized these assets under the Energy Solutions & Healthcare Division. We aim to continue to expand business in these fields going forward.
4-3-2. Recent Releases:
Carbon Neutral
Sojitz to Provide Green Hydrogen Produced in Australia to Pacific Island Countries
Gas-Related Business (Transition)
Sojitz Enters Natural Gas-fired Power and Desalination Project in the United Arab Emirates
Sojitz Participates in Syrdarya II IPP Project in Uzbekistan
Circular Business (Recycle)
4-4. 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.
4-5. 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.