Addressing Climate Change

Basic Stance

The Sumitomo Chemical Group considers climate change one of the most pressing challenges facing society. To address this problem, we are actively working to reduce greenhouse gases by utilizing the technology we have cultivated as a diversified chemical company. We are also taking action to respond to risks and to seize opportunities related to solving climate change related problems that are having a major impact on people’s lives on a global scale.

Management System

The Group is addressing climate change as one of its Responsible Care activities (refer to “Organization of Responsible Care”). Key matters are regularly discussed at Management Meetings, Sustainability Promotion Committee Meetings, and Responsible Care Committee Meetings, where the relevant measures to take are determined. The Responsible Care Committee also assesses and monitors risks related to climate change issues. A wide range of specific issues related to energy and greenhouse gases are taken up for detailed discussion at Company-wide Science Based Targets (SBTs) GM Meetings, Company-wide Energy Manager Meetings, Department Liaison Meetings on Global Warming, Group Company Information Exchange Meetings, and other gatherings. Through the establishment of these various meetings, we have created a system capable of steadily and swiftly sharing important information in addition to managing energy and greenhouse gases for Works, research laboratories, business sectors, and Group companies.

MeetingCoordinatorMembersContent
Company-wide SBTs GM Meeting Managing executive officer (Responsible Care manager) General managers in charge of SBTs at individual worksites Discussing various measures aimed at achieving SBTs
Company-wide Energy Manager Meeting Responsible Care general manager Section managers in charge of Energy and GHGs at their worksites Sharing and spreading information on initiatives at each worksite
Department Liaison Meeting on Global Warming Responsible Care general manager Section managers in charge of climate change action at the departmental and corporate levels Sharing Company-wide policies and ESG issues
Group Company Information Exchange Meeting Managing executive officer (Responsible Care manager) Managers in charge of climate change action for Group companies Sharing Group policies and issues and promoting best practices

Goals and Results

Goal achieved or steadily progressing: ○  Goal not achieved: △

Note: Further details are provided in the supplementary data (Supplementary Data).

* Within the scope of specified shippers according to the definition stipulated under the Act on the Rational Use of Energy

Energy Consumption and Greenhouse Gas Emissions

The Group’s greenhouse gas emissions for fiscal 2017 onward are calculated in accordance with the GHG Protocol (refer to “Calculation Standards for Environmental and Social Data Indicators”). The boundary of calculation has been expanded to include principal consolidated Group companies, which account for up to 99.8% of consolidated net sales.

(Thousand tons of CO2e)

 Greenhouse Gas Emissions ★

 Sumitomo Chemical and Group Companies in Japan

Overseas Group Companies

Total
Scope1 5,633 432 6,065
Scope2 324 869 1,193
Total 5,957 1,301 7,258

Energy Consumption

Notes:

  • Japanese Standards: Calculated based on the Act on the Rational Use of Energy.
  • Having adopted the GHG Protocol standards for our GHG emission disclosures, we now include the following data previously excluded from calculations: amount of energy consumed in the production of power and steam sold to external parties by Sumitomo Chemical Group (the portion attributable to energy provider subsidiaries was included in years prior to fiscal 2016). The amount of energy consumed by Sumitomo Chemical’s non-production sites and the Group’s non-pro-duction sites is included from fiscal 2017 and fiscal 2018, respectively.

Greenhouse Gas Emissions

Notes:

  • Japanese Standards: Calculated based on the Act on the Rational Use of Energy and the Act on Promotion of Global Warming Countermeasures.
  • Having adopted the GHG Protocol standards for our GHG emission disclosures, we now include the following data that was not included in previous calculations: CO2 emissions from energy sold to external parties by the Group (the portion attributable to energy provider subsidiaries was included prior to fiscal 2016); CO2 emissions from energy use attributable to Sumitomo Chemical’s non-production sites; CO2 emissions from non-energy sources not included in the scope of the Act on Promotion of Global Warming Countermeasures. CO2 emissions from energy use attributable to Sumitomo Chemical’s non-production sites and the Group’s non-production sites is included from fiscal 2017 and fiscal 2018, respectively.

Unit Energy Consumption and Unit CO2 Emissions (Production Bases)

Unit Energy Consumption Index

Notes:

  • The figures are indexed to energy consumption (kl) at production bases per production volume (tons).
  • Values in parentheses are unit figures based on Sumitomo Chemical’s results.
  • Calculated based on the Act on Rational Use of Energy in order to show the Common Energy and Environmental Protection Targets of Sumitomo Chemical Group.

Unit CO2 Emissions Index

Notes:

  • The figures are indexed to CO2 emissions from energy use (tons) at production bases per production volume (tons).
  • Values in parentheses are unit figures based on Sumitomo Chemical’s results.
  • Calculated based on the Act on Promotion of Global Warming Countermeasures in order to show the Common Energy and Environmental Protection Targets of Sumitomo Chemical Group.

Status of Scope 3 GHG Emissions

★ 

Category

Emissions
(Thousand tons of CO2e/year)

1. Purchased goods and services ★ 2,132
2. Capital goods  394
3. Fuel- and energy-related activities not included in Scopes 1 and 2  ★ 298
4. Upstream transportation and distribution ★ 61
5. Waste generated in operations  ★ 30
6. Business travel  7
7. Employee commuting  9
8. Upstream leased assets  <1
9. Downstream transportation and distribution <1
10. Processing of sold products  ̶
11. Use of sold products ★ 44
12. End-of-life treatment of sold products  780
13. Downstream leased assets  ̶
14. Franchises ̶
15. Investments  ̶

Notes:

  • For Scope 3 data, indirect greenhouse gas emissions from business activities throughout the supply chain arecalculated separately by category and then added together. 
  • Calculated for Sumitomo Chemical and Group companies listed on stock indices in Japan (Sumitomo Dainippon Pharma Co., Ltd.; Koei Chemical Co., Ltd.; Taoka Chemical Co., Ltd.; and Tanaka Chemical Corporation).
  • Category 4 does not include Taoka Chemical Co., Ltd., but includes Nippon A & L Inc.

Examples of Initiatives

Responding to Risks and Seizing Opportunities related to Climate Change

The Sumitomo Chemical Group identifies and analyzes the risks and opportunities posed by climate change issues to its business over the medium to long-term, including the size, scope of impacts, and other issues. In addition, we are implementing measures to respond to risks through initiatives for achieving our SBTs, and striving to seize new business opportunities through the development and spread of products and technologies designated as Sumika Sustainable Solutions. Concrete initiatives are reported to management meetings, the Sustainability Promotion Committee, the Responsible Care Committee, the Plant Managers’ Meetings, and the Group-wide President Meetings.

Science Based Target Initiative

Science-based targets (SBTs) are greenhouse gas emissions reduction targets set by companies, based on climate science, to meet the 2015 Paris Agreement goal of keeping the increase in global average temperatures to below 2°C compared to pre-industrial temperatures. In March 2018, medium to long-term plans for greenhouse gas (GHG) reductions were deliberated at our management meeting and we agreed to establish science-based targets (SBTs) in accordance with the Science Based Targets. Then in October 2018, Sumitomo Chemical gained approval from the Science Based Targets initiative for the company’s Group-wide greenhouse gas emissions reduction targets. Sumitomo Chemical is the first diversified chemical company in the world to have obtained this approval.

Our Approved GHG Emissions Reduction Targets

  1. Scope 1: Direct emissions from factory operations, such as fuel use in manufacturing processes
    Scope 2: Indirect emissions from purchases of power and heat from outside the factory
  2. Scope 3: Emissions from the manufacturing and transportation of purchased raw materials
  3. Covers suppliers accounting for 90% of procured raw materials and other items based on weight

Greenhouse Gas (GHG) Emission Volume and Reduction Targets

The baseline year for the Sumitomo Chemical Group’s science-based targets is fiscal 2013, which is the same baseline year used by the Japanese government for GHG emissions reduction targets in accordance with the Paris Agreement. Our Group will focus on reducing its GHG emissions (Scope 1+2) by 57% or more from fiscal 2013 levels by fiscal 2050, while providing solutions for significant GHG reductions in the value chain.

Promoting Sumika Sustainable Solutions

Through the initiative of Sumika Sustainable Solutions, which began in 2016, the Group has been working to develop and promote its products and technologies that help mitigate climate change*1 and facilitate adaptation to climate change.*2 (refer to Sumika Sustainable Solutions)

  1. Reducing and absorbing greenhouse gases
  2. Working to stem or lessen the current effects of climate change as well as harnessing the new climatic conditions

Measures for Adaptation

Understanding that climate change must be addressed, people are paying more attention to the development of products and technologies that can facilitate adaptation to the changes. Under the banner of Sumika Sustainable Solutions, the Sumitomo Chemical Group has certified many of its products and technologies that promote adaptation. These include vector control products (to ward off infectious disease-carrying pests whose spread correlates with climate change), mycorrhizal fungi for use as a soil amendment product (to extend growing periods during droughts by 30% and improve crop yields), and clear acrylic windows for seawalls that protect against high tides and tsunami.

Of these products, the Company’s malaria prevention mosquito net Olyset™ Net was introduced as a tool for helping prevent a rise in malarial infections due to climate change on the side event of COP22, which was held in Morocco in November 2016, and on the side event of COP23, which was held in Germany in November 2017. It was also introduced at Japan’s Ministry of the Environment’s Climate Change Adaptation Information Platform, Japan’s Ministry of Economy, Trade and Industry’s Climate Change Adaptation Good Practices by Japanese Private Sector, and other venues. 

Initiatives Aimed at Reducing Greenhouse Gas Emissions at Each Worksite

Each Sumitomo Chemical worksite helps reduce greenhouse gas emissions, including in the following ways: installing the latest highly efficient equipment; introducing rationalization and energy-saving measures in production processes; switching to lower-carbon fuels and other forms of energy; installing LED lighting; and soliciting employee suggestions on how to further improve our energy-saving efforts. Furthermore, regarding cleanrooms and other facilities where finding ways to save energy is difficult and requires a high level of expertise, we have launched initiatives in cooperation with experts. Information on the state of these activities is exchanged at Energy Manager Meetings, at which representatives from each worksite gather in one location to work on reducing the greenhouse gas emissions of the Company as a whole.

Logistics Initiatives

Sumitomo Chemical continues to promote modal shift, or transportation by more efficient and environmentally friendly modes, such as rail and ship instead of trucks. In fiscal 2018, unit energy consumption fell (improved) by 1.6% compared with fiscal 2017, an average of a 1% improvement over the past five years. We will continue to improve unit energy consumption by our target of 1% or more.

Reduction of Environmental Impact in Logistics Operations (Sumitomo Chemical and Group companies in Japan)

Energy Consumption

CO2 Emissions

Note: Calculated for Sumitomo Chemical and a Group company in Japan (specified consigner: Nippon A&L Inc.)

Feed Additive Methionine Logistics Operations Certified by Government as “Comprehensive Efficiency Plan”

In April 2019, Sumitomo Chemical, The Sumitomo Warehouse Co., Ltd., and Shikoku Kaihatsu Ferry Co., Ltd. jointly have received a “Comprehensive Efficiency Plan” certification from Japan’s Ministry of Land, Infrastructure, Transport and Tourism with respect to the companies’ certain business plan involving domestic transportation by ship in Japan of feed additive methionine produced at the Sumitomo Chemical’s Ehime Works (“Ehime Works”). This certification is issued in accordance with “Act on Advancement of Integration and Streamlining of Distribution Business.”

The Act stipulates, among others, certifying selected business projects or initiatives as “Comprehensive Efficiency Plan,” along with the provision of related supportive measures, where rationalized transportation of materials will make their distribution operations more efficient while at the same time lessening environmental impact or reducing required manpower during the course of materials distribution. If the certification is granted, business operators are entitled to receive various benefits, including special tax treatment.

The tripartite business plan certified by the Ministry encompasses operations for transporting by ship nearly all the distance of methionine from the Ehime Works to Kobe Port with respect to the expanded production of methionine* as above. In granting the certification, the Ministry duly recognized the distinctive advantage resulting from the business plan that CO2 emissions will lower by approximately 55%, truck transportation will decrease by approximately 94%, and truck drivers’ working hours will drop by approximately 91%, all compared with equivalent instances of the methionine transported to Kobe Port entirely by land.

  • Sumitomo Chemical expanded the production capacity of methionine at the Ehime Works in October 2018 from approximately 150,000 metric tons per annum to approximately 250,000 metric tons per annum. We plan to further increase the amount of methionine transported to Kobe port, a main export port.

Evaluating Water-Related Problems

The Group is evaluating water-related risks at each production base from the perspective of water supply and demand risks and water pollution susceptibility risks.

Evaluating Water Supply and Demand Risks

The Group evaluates the baseline water stress in communities where a plant is located as well as underground water stress, the severity of droughts caused by seasonal changes in the water supply, the water storage capacity of the drainage basin, projected changes in water stress, and the percentage of water resources in the drainage basin that are protected.

Evaluating Water Pollution Susceptibility Risks

The Group evaluates water supply and demand and its fragility in terms of access to drinking water, water pollution, protected downstream areas, and the presence of endangered species in bodies of fresh water identified by the International Union for Conservation of Nature (IUCN).

As a result of the evaluation results, we are taking specific actions to reduce risks going forward for plants evaluated to have high water-related risks.

The BioCarbon Fund*

Sumitomo Chemical finances afforestation projects in developing countries and poverty-stricken countries through the World Bank’s BioCarbon Fund. These projects are geared to contribute to the restoration of abandoned land, the conservation of water resources, biodiversity conservation, and the reduction of greenhouse gases. Since participating for the first time in 2005, Sumitomo Chemical has been involved in multiple afforestation projects, which have led to a combined total of 229 thousand tons in reductions in CO2 emissions.

  • BioCarbon Fund:
     This fund was established by the World Bank to finance projects to plant trees and preserve forests with the objective of acquiring CO2 credits (emissions rights issued based on the volume of CO2 reduced or absorbed as a result of projects designed to reduce greenhouse gases).

R&D Initiatives for Addressing Climate Change

One of the basic policies of the Medium-Term Corporate Business Plan (FY2019–2021) is accelerating the development of next-generation businesses. One priority area of that policy is reducing environmental impact. Sumitomo Chemical has identified energy storage, energy conservation, and carbon recycling as areas of strength that are indispensable to helping solve climate change problems and for which the Company can use the technologies it has cultivated to date.

In the field of energy storage, we are developing next-generation batteries and fully solid state battery materials that help reduce greenhouse gas emissions. In addition, in the field of energy conservation, we strive to develop water treatment processes with low environmental impact and CO2 separation membranes to enhance energy efficiency. In the field of carbon recycling, we are currently working to develop bioprocesses that use synthetic biology and chemical production processes that use carbon capture and utilization (CCU).

Moreover, as an initiative to ensure next-generation energy, we are conducting a survey related to CO2-free hydrogen manufacturing technologies that do not emit CO2 during the manufacturing stage and their effective implementation.

In these fields, we are promoting research and development while actively installing external technologies in collaboration with academia and startup companies.

External Evaluations

Sumitomo Chemical was selected for the A List, the highest evaluation, in the CDP’s climate change action survey. (January 2019)

Sumitomo Chemical was ranked first among 37 chemical companies in Japan in the 10th Corporate Climate Action Survey by the World Wide Fund for Nature Japan (WWF Japan), under the materials industry section. (May 2019) (Japanese only)

The Japan Chemical Industry Association awarded the Sumitomo Chemical Group the Examiner’s Special Award at the 13th JCIA Responsible Care Awards (Japanese only) for the Group’s initiatives aimed at realizing a low-carbon society. (June 2019)

Looking Ahead

The Sumitomo Chemical Group will continue actively working to solve climate change problems using the technological capabilities it has cultivated as a diversified chemical company.