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 president and the executive officer in charge of Responsible Care are both charged with ensuring that the Group is addressing climate change. Key matters are regularly discussed at Sustainability Promotion Committee Meetings (refer to “Sustainability Promotion System”) and Responsible Care Committee Meetings (refer to “Promoting Responsible Care Activities”), which are Company-wide committees where the relevant measures to take are determined. The Responsible Care Committee also assesses and monitors risks related to climate change issues. The content of these meetings is reported to the Board of Directors as appropriate.

Organization of Addressing Climate Change

A wide range of specific issues related to energy and greenhouse gases are taken up for detailed discussion at Companywide Science Based Targets (SBTs) GM Meetings, SBT Promotion Working Groups, 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
SBT Promotion Working Group Process & Production Technology & Safety Planning Department general manager Corporate Planning Office, Research Planning and Coordination Department, Process & Production Technology & Safety Planning Department, Responsible Care Department, and Environmental Burden Reduction Technology Development Group Proposing various multi-faceted measures to achieve 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

For goals and results for Addressing Climate Change, refer to Environmental Activity Goals and Results.

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.

 Greenhouse Gas Emissions ★

(Thousand tons of CO2e)
 Sumitomo Chemical and Group Companies in Japan

Overseas Group Companies

Total
Scope1 5,673 496 6,169
Scope2 288 759 1,048
Total 5,962 1,255 7,217

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-production 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.
  • Due to two overseas subsidiaries significantly changing the CO2 conversion
    coefficient of their electric power seller from the one used in the previous fiscal
    year, overseas emissions in fiscal 2019 were around 93,000 t-CO2e lower than if they had used the same coefficient.

Unit Energy Consumption

Notes:

  • The figures are indexed to energy consumption (GJ) per sales
  • The figures are indexed to fiscal 2018 at 100 because we aim to improve at least 3% over the three years of our Corporate Business Plan (FY2019–2021)

Status of Scope 3 GHG Emissions

★: Assured by an independent assurance provider

(Thousand tons of CO2e/year)
CategoryEmissions
FY2017FY2018FY2019
1. Purchased goods and services 1,985 2,132 2,276 ★
2. Capital goods  111 394 151
3. Fuel- and energy-related activities not included in Scopes 1 and 2 290 298 581 ★
4. Upstream transportation and distribution 57 61 60 ★
5. Waste generated in operations 28 30 35 ★
6. Business travel  7 7 10
7. Employee commuting  8 9 11
8. Upstream leased assets  <1 <1 <1
9. Downstream transportation and distribution <1 <1 <1
10. Processing of sold products  ̶ ̶ ̶
11. Use of sold products 44 44 40 ★
12. End-of-life treatment of sold products  945 780 879
13. Downstream leased assets  ̶ ̶ ̶
14. Franchises ̶ ̶ ̶
15. Investments  ̶ ̶ ̶

Notes:

  • For Scope 3 data, indirect greenhouse gas emissions from business activities throughout the supply chain are calculated 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.
  • Category 11 figures are N2O converted into CO2

Examples of Initiatives

Strategy: Addressing Risks and Seizing Opportunities

We set up an organization dedicated to addressing climate change in the Responsible Care Department. This organization identifies risks and opportunities that climate change issues present to the Sumitomo Chemical Group over a medium to long term and analyzes their magnitude and the scope of their impact on the Group. As for risks, we are mainly taking measures to achieve our Science Based Targets (SBTs), while as for opportunities, we are primarily focusing on the development and promotion of our Sumika Sustainable Solutions (SSS)-designated products and technologies. The progress of our specific measures is reported in management meetings, meetings of the Sustainability Promotion Committee, the Responsible Care Committee, the Plant Manager’s Meeting, and Group President Meeting. In addition, to ensure that each effort continues to progress steadily, we hold various meetings that engage our plants, laboratories, business sectors, and Group companies.

Scenario Analysis

Scenario analysis, with regard to climate change, is a method in which we consider multiple scenarios, predict the impact of climate change and changes in the business environment due to long-term policy trends, and study the potential impact of these changes on our business and management. The Sustainability Promotion Committee currently leads our scenario analysis initiative. We will continue to work on climate change issues by closely monitoring anticipated new changes in the business environment, while also taking a two-front approach of addressing risks and seizing opportunities.

Summary of the Scenario Analysis

  1. Common for all scenarios: Situations that can be expected in both 2°C scenario (reduced GHG emissions) and 4°C scenario (business as usual)
  2. CCUS: Carbon dioxide capture, utilization and storage.
  3. Assumptions based on the “World Energy Outlook (WEO) 450 Scenario” published by the International Energy Agency (IEA), a scenario that is in line with the 2°C target under the Paris Agreement.

Initiatives Toward Achieving Science Based Targets (SBTs)

Sumitomo Chemical has identified major risks of climate change problems impacting the Group’s businesses. These include a cost increase in the event that countries around the world introduce carbon pricing or raise the price for carbon, as well as damage to its production facilities due to intensified climate disasters caused by a rise in temperature. To address these risks, we are taking various group-wide measures to help mitigate climate change. For example, in October 2018, we at the Sumitomo Chemical Group were certified by the Science Based Targets (SBT) initiative for our targets for the reduction of greenhouse gas (GHG) emissions, becoming the first diversified chemical company to receive this certification. Toward the achievement of these targets, we have included the Group’s Scope 1+2 GHG emissions in our KPIs. We are also working on various initiatives, such as switching to LNG fuel for our plants, employing the latest highly efficient equipment, and cutting back on energy consumption across the board. In addition, in order to reduce Scope 3 emissions, we have launched an engagement effort with our major suppliers to ask them to set their own reduction targets.

Our Sustainability Promotion Committee and Responsible Care Committee oversee these efforts and their progress.

GHG Emission Reduction Targets Certified as SBTs

KPI: Amount of Group’s GHG emissions (Scope 1+2)

Contributing to Reducing GHG Emissions by Switching Fuel for Thermal Power Generation-Establishment of Niihama LNG Co., Ltd.

In April 2018, Sumitomo Chemical established Niihama LNG Co., Ltd. with Tokyo Gas Engineering Solutions Corporation, Shikoku Electric Power Co., Inc., Sumitomo Joint Electric Power Co., Ltd., and Shikoku Gas Co., Ltd. Niihama LNG’s main business is to supply gas to the premises of our Ehime Works, and to a new liquefied natural gas-based thermal power plant, to be built by Sumitomo Joint Electric Power. Construction is in progress, with the start of operations scheduled for February 2022. By partnering with these companies, Sumitomo Chemical will work to promote and expand the use of natural gas, which can contribute to reducing GHG emissions, while also promoting stable and efficient use of energy.

Supplier Engagement-Briefing Session

In November 2019, we held a briefing session for about 30 major suppliers of ours in Japan to present our initiatives toward achieving our SBTs, and to ask our suppliers to set their own GHG emission reduction targets. Going forward, we will organize follow-up meetings and briefing sessions with our suppliers individually, with the aim of having their reduction targets set by fiscal 2024.

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.

Osaka Works: Shifting to LED

The Osaka Works is working to conserve energy by actively installing more LEDs. In the Eco-First Commitments (refer to "Eco-First Commitments"), promoting the installation of LED lighting at worksites is given as an example of a way to reduce greenhouse gas emissions (CO2) through energy conservation, and this effort will contribute to that end goal.

By fiscal 2019, the Osaka Works had upgraded around 78%, or 14,400, lights to LEDs. This is the highest rate among all the Group’s worksites, which average 48%. Due to the complex nature of the worksite, it is difficult for the Osaka Works to carry out unified energy conservation initiatives. However, the Works will continue shifting to LED lighting going forward as a major initiative with far-reaching effects on both the Works and research.

  • Example of LEDs at the Works: Upgrading the lighting of the gym at the Works

Electrolysis Plant: Achieving Benchmarks* (FY2018, FY2019)

The electrolysis plant electrically breaks down saltwater into chlorine, hydrogen, and caustic soda. The Act on Rational Use of Energy prescribes an industrial top runner program (benchmark program).

The production efficiency of the plant is better the higher the temperature of the electrolysis tank, and the raw material seawater is heated using steam before being fed into the tank. To make operations more energy-efficient, we monitor production efficiency and the amount of energy used to heat seawater to determine the optimal operating conditions. We have changed to a control method that further enhances the collection of excess heat, maintains the minimum necessary temperature for the electrolysis tank, and uses steam only for the minimum amount of heating needed. Thanks to our persistence, we have achieved our benchmarks for two consecutive years (fiscal 2018 and 2019).

  • A benchmark is an energy conservation standard that operators in specific industries and fields should achieve over the medium to long term. This makes it clear whether one company’s energy conservation level is greater or less than that of its competitors. Those with a greater level receive more favorable ratings, and those lagging behind are encouraged to ramp up their efforts. The level achieved by only 10% to 20% of operators overall in each industry is set as the standard that operators should aim for (the target level in soda operations is 3.22 GJ/T or less).

Responsible Care Department, Ehime Works Methionine Plant and Electrolysis Plant
Acquiring Certification for the Energy Management System (ISO 50001: 2018)

On February 10, 2020, Sumitomo Chemical’s Responsible Care Department and the Ehime Works methionine plant and electrolysis plant acquired certification for their energy management systems (ISO 50001: 2018). The registration certificate was awarded on February 17, 2020.

With the fiscal 2013 level as the index, the Company is aiming to reduce its organizational greenhouse gas (GHG) emissions 30% by fiscal 2030 and at least 57% by fiscal 2050. These targets were announced internally and externally and their certification as Science Based Targets (SBTs) was acquired in October 2018.

At the two plants at the Ehime Works, a significant consumer of energy, and relevant departments of the Head Office, we constructed energy management systems, began operating them, and eventually acquired certification for them. This was done as the first step in promoting PDCA cycles for specific reduction processes as an organization. Going forward, our policy is to actively promote these management systems as a tool to achieve our SBTs.

  • Left: Mr.Kazuo Tatsukami, President of Audit and Certification Organization JACO
    Right: Yoshihiro Miyoshi, Managing Executive Officer of Sumitomo Chemical Co., Ltd.

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 2019, energy consumption (crude oil equivalent) increased compared with fiscal 2018 due to the rise in long-distance shipping by chemical tankers in response to the scheduled maintenance and repair of Works despite there being no significant change in the volume of cargo transported. As a result, unit energy consumption rose 3.6%, for an average 0.5% improvement over the past five years. We will continue aiming 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 and Unit energy consumption

CO2 Emissions

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

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 established by Sumitomo Chemical under the 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 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).

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.

Moreover, Sumitomo Chemical newly established a Research and Development (R&D) Group, named “Technological Development Group of Environmental Initiatives” in the Petrochemicals Research Laboratory (Sodegaura City, Chiba) on April 1, 2020. The new R&D group’s mission is to develop a process to reduce environmental impact by making the best use of core technologies, including catalyst design and chemical processing design, which the company has cultivated in the Petrochemical & Plastic business. By concentrating research projects currently dispersed across several research laboratories into the Petrochemicals Research Laboratory and by beefing up the number of researchers to about 30, Sumitomo Chemical will accelerate its development exponentially while also focusing on new projects. In addition, the new R&D group will actively collaborate with academia and companies that have advanced technologies, and promote activities to make environmental impact reduction technology into a new business in the Petrochemicals & Plastics Sector.

Sumitomo Chemical has identified environmental impact mitigation as one of the material issues to be addressed by its management. The company will continue to create solutions for social issues, such as carbon cycling technology and greenhouse gas emission reduction technology.

Examples of development projects at the new R&D group

  • Polyolefin manufacturing technology using waste-derived ethanol as a raw material
  • Chemical recycling technology for waste plastics
  • Chemicals manufacturing technology using CO2
  • Innovative energy-saving technology for chemical manufacturing processes
  • Development of energy-saving wastewater processing systems

External Evaluations

Sumitomo Chemical was selected for the A List, the highest evaluation, in the CDP’s climate change action survey for the second consecutive year. (January 2020)

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) and the Excellence Award at the 14th JCIA Responsible Care Awards (Japanese only) for the Group’s initiatives to promote sustainability, with the Misawa Works RC activities used as a case study (May 2020).

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.