Addressing Climate Change

★: Assured by an independent assurance provider

The extreme weather events and other adverse effects of climate change will have a major impact on people’s lives around the world. Addressing these changes will require a two-pronged effort focusing on mitigation (reducing and absorbing greenhouse gases) and adaptation (working to stem or lessen the current effects of climate change as well as harnessing the new climatic conditions). One of the most important issues will be carrying out these efforts and simultaneously realizing a sustainable society that supports economic development. The Sumitomo Chemical Group is working hard from various perspectives on Goal 13 of the SDGs—climate action.
To this end, in June 2017, Sumitomo Chemical joined over 100 other global business leaders in supporting the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), which was founded by the Financial Stability Board (FSB).* Through our support of these recommendations, we will reassess the impact of climate change on the Group and continue to promote disclosures, beginning with those related to our action on climate change, as we work to develop a sustainable society and spur the shift toward a low-carbon economy.

  • FSB: An international organization whose members include central banks, financial regulatory authorities, and ministries of finance from 25 major countries.
  • Climate change is one of the most important challenges that our society is facing. Sumitomo Chemical as a global company is committed to actively provide solutions for climate change, mitigation and adaptation. We believe the better disclosure of information on climate-related risks and opportunities will further encourage our initiatives towards a sustainable world.

    President Tokura’s statement support of the TCFD recommendation

Management System

Sumitomo Chemical is addressing climate change as one of its Responsible Care activities (see page 23 “Organization of Responsible Care Activities”). Although final decisions on key matters are the purview of the Responsible Care Committee, information on pertinent issues is also shared at the Board of Directors meetings, Management Meetings, Works GM Meetings, Group Company President Meetings, and other venues, bringing more depth to the discussions.
A wide range of specific issues related to energy and greenhouse gases are taken up for detailed discussion at Department GM Meetings, 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, and business sectors. Information is also shared via Liaison Meetings of Corporate Departments, which hold discussions related to the ESG issue of climate change action.

Measures to Reduce Greenhouse Gas Emissions

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. In fiscal 2017, we made steady progress toward our targets for the unit energy consumption index and unit CO2 emission index through a reduction in the amount of steam used and introduction of cogeneration facilities as well as other efforts.

Energy Consumption and Greenhouse Gas Emissions

The Group’s greenhouse gas emissions for fiscal 2017 onward are calculated in accordance with the GHG Protocol.

Greenhouse Gas Emissions

(Thousands of tonnes of CO2e)

 Sumitomo Chemical and
Group Companies in Japan★
Overseas Group CompaniesTotal
Scope 1 6,107 571 6,678
Scope 2 326 755 1,080
Total 6,432 1,326 7,758

Note: When adding the results of one overseas Group company to the results of Sumitomo Chemical and Group companies in Japan, Scope 1 emissions total 6,232 thousand tonnes of CO2e★ and Scope 2 emissions total 638 thousand tonnes of CO2e.

Going forward, we will continue to expand the scope of overseas Group companies assured by an independent assurance provider.

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 used to produce 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). In addition, the amount of energy used by Sumitomo Chemical’s non-production sites is included from fiscal 2017. In addition, the amount of energy used by Sumitomo Chemical’s non-production sites is included from fiscal 2017.

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.

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 (tonnes).
  • 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 (tonnes) at production bases per production volume (tonnes).
  • 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
(Thousands of Tonnes of CO2e)
1. Purchased goods and services★ 1,985
2. Capital goods 111
3. Fuel- and energy-related activities not included in Scopes 1 and 2★ 290
4. Upstream transportation and distribution★ 57
5. Waste generated in operations★ 28
6. Business travel 7
7. Employee commuting 8
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 945
13. Downstream leased assets -
14. Franchises -
15. Investments -
Total 3,475

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.; and Taoka Chemical Co., Ltd.).
  • Category 4 does not include Taoka Chemical Co., Ltd.

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 175,000 tonnes 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).

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 OlysetTM Net was introduced as a tool for helping prevent a rise in malarial infections due to climate change at COP22, which was held in Morocco in November 2016, and COP23, which was held in Germany in November 2017. It was also introduced at Japan’s Ministry of the Environment’s Climate Change Adaptation Platform, Japan’s Ministry of Economy, Trade and Industry’s Climate Change Adaptation Good Practices by Japanese Private Sector, and other venues.

Measures for the Risks and Opportunities of Climate Change

By analyzing the physical impacts of climate change and the risks associated with adjusting social systems, we are studying the possible effects climate change could have on our businesses. We are also looking to determine promising new business opportunities based on the analysis of various scenarios. Looking ahead, we plan to publicly release our findings on our website, in the Annual Report, and via other media.

Working with Global Chemical Companies

Sumitomo Chemical served as the chair of the Global Working Group on Energy and Climate Change of the International Council of Chemical Associations (ICCA) between June 2016 and June 2018. During this time, we led joint international research surveys related to helping reduce GHG emissions through chemical products and technologies. We also worked to promote the spread of the results of the research surveys.

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 2017, unit energy consumption fell (improved) by 3.4% compared with fiscal 2016. We will continue to improve unit energy consumption by our target of 1% or more.

Reduction of Environmental Impact in Logistics Operations (Sumitomo Chemical)

Energy Consumption

CO2 Emissions

Notes: Data (energy consumption, CO2 emissions) for previous fiscal years has been retroactively adjusted to enhance accuracy.