Environment (Climate Change)

Independent Practitioner’s Assurance

Environmental performance indicators marked with a star (★) for FY2024 (the year ended March 2025) have received independent practitioner’s assurance from KPMG AZSA Sustainability Co., Ltd.

Independent Assurance Report

Sumitomo Corporation Group’s CO2 Emissions targeted for Carbon Neutrality

• We set “Policies on Climate Change Issues” and aim for realizing carbon neutrality by 2050. The scope of business targeted for carbon neutralization includes the power generation businesses and fossil energy concession businesses in addition to Scope 1 and 2 of the Submitting Company and its subsidiaries. As for the results of power generation businesses, including the base year, we have included the estimated figures after the construction and operation of the businesses, even if the project is still under construction.
• For details, please refer to [Climate Change Initiatives].

GHG Emissions

• The boundary is on a consolidated basis and includes Sumitomo Corporation, consolidated subsidiaries and Joint operations.
• We apply the operational control approach in the GHG Protocol to decide the boundary. Thus, we include all emissions from businesses only when we have operational control over the businesses from FY2023 instead of the method that we applied until FY2022, which we include emissions from joint operations corresponding to the investment ratio as of the end of March.
• GHG emissions quantification is subject to uncertainty when measuring activity data, determining emission factors, and considering scientific uncertainty inherent in the Global Warming Potentials.
• CO2 emission factors for electricity: (market based method)
  (Non-consolidated in Japan) From FY2024, basic emission factors of individual power companies (adjusted for non-fossil power sources) were used. Adjusted emission factors were used from FY2021 to FY2023, and basic emission factors were used in FY2020.
  (Consolidated subsidiaries in Japan) The average emission factors of all power companies.
  (Overseas) Emission factors from electricity generation are based on the latest country-specific statistics provided by the IEA (International Energy Agency). For FY2024 results, the factors are derived from 2022 data listed in "CO2 EMISSIONS FROM FUEL COMBUSTION 2024 EDITION". A power generation company has been using emission factors published by its country of location since FY2024.
• CO2 emission factors other than those from electricity generation are based on a manual for GHG emissions accounting, reporting, and disclosure systems published by Japan’s Ministry of the Environment.
• The breakdown of 7,120 thousand t-CO2e from Scope1 energy-related CO2 and Scope2 in FY2024 by business activity is 672 thousand t-CO2e for business other than power generation and 6,449 thousand t-CO2e for power generation.
• The main reason for the increase in FY2024 compared to FY2023 is that a power generation plant operated throughout the entire fiscal year.

GHG Emissions（Scope1 <Non energy-related CO2 and GHGs other than CO2>）

• The boundary is on a consolidated basis and includes Sumitomo Corporation, consolidated subsidiaries and Joint operations. In FY2020, the boundary covered consolidated entities excluding Joint operations, and from FY2021 onward covers consolidated including Joint operations.
• We apply the operational control approach in the GHG Protocol to decide the boundary. Thus, we include all emissions from businesses only when we have operational control over the businesses from FY2023 instead of the method that we applied until FY2022, which we include emissions from joint operations corresponding to the investment ratio as of the end of March.
• Until FY2022, we had been calculating Scope1 (other than energy-related CO2) including our subsidiaries’ emissions on the condition that they emitted more than 3,000 t-CO2e in total of each GHG in accordance with “Calculation, Reporting, and Disclosure System” of Ministry of the Environment of Japan. From FY2023, we have abolished the 3,000 t-CO2e threshold and calculate all emissions except for minor emission.

GHG Emissions（Scope3）

• The boundary is Sumitomo Corporation (in Japan) and includes the head office, domestic branches and sub-branches.
  For GHG emissions on a consolidated basis (Scope 3), please refer to the following link.

  GHG emissions (Scope 3 <consolidated>)
  

• GHG emissions quantification is subject to uncertainty when measuring activity data, determining emission factors, and considering scientific uncertainty inherent in the Global Warming Potentials.
• GHG emissions from category4 (Upstream transportation and distribution) include the transport of cargo within Japan for which Sumitomo Corporation is the cargo owner and are calculated based on a manual for GHG emissions accounting, reporting, and disclosure systems published by Japan’s Ministry of the Environment. Sumitomo Corporation complies with the Act and reduces the use of energy of transportation through promotion of modal shift (utilization of railroads and vessels), optimization of delivery routes and loading on vehicles, promotion of eco-driving, etc. We have set a target of reducing the use of energy from Upstream transportation and distribution per shipping weight by at least 1% annually in Japan.
• GHG emissions from category5 (waste) are calculated from all general waste of Sumitomo Corporation. The results were calculated using the emission intensity for each type of waste, which is published in the emission intensity database for calculating greenhouse gas emissions and other emissions by organizations throughout the supply chain. The calculation of GHG emissions for FY2024 uses the emission intensity database Ver.3.5.
• GHG emissions from category6 (due to overseas business trips) are from flights departing from and arriving in Japan that Sumitomo Corporation employees took. Business trip destinations are classified into 12 areas and passenger-kilometers are estimated based on the travel distance between Japan and representative airport of each area. GHG emissions due to overseas business trips are calculated by applying CO2 emission factors published by the UK‘s Department for Energy Security and Net Zero to the passenger-kilometers.
• GHG emissions from category7 (commuting) are those from the commuting of Sumitomo Corporation‘s employees working in Japan, calculated by using the emissions factors per passenger-kilometer for passenger transport by transport mode published in the Ministry of Land, Infrastructure, Transport and Tourism publication “CO2 Emissions in the Transport Sector” up to FY2020. After FY2021 results were calculated using emission intensity per number of employees and working days by work type and city classification, which is published in the emission intensity database for calculating greenhouse gas emissions and other emissions by organizations throughout the supply chain. FY2024 results were based on this database (Ver. 3.5).
• GHG emissions from Category13 (downstream leased assets) were calculated until FY2022 for the shared areas of buildings owned by Sumitomo Corporation leased to other companies, but were included in Scope1 and Scope2 as a result of refinement of the boundary from FY2023.

Energy Consumption, Electricity Consumption

• The boundary is on a consolidated basis and includes Sumitomo Corporation, consolidated subsidiaries and Joint operations.
• We apply mutatis mutandis the operational control approach in the GHG Protocol to decide the boundary. Thus, we include all consumptions from businesses only when we have operational control over the businesses from FY2023 instead of the method that we applied until FY2022, which we include consumptions from joint operations corresponding to the investment ratio as of the end of March.
• Energy consumption includes energy derived from biomass fuels since FY2023, but did not include energy derived from biomass fuels before FY2022. To improve the accuracy of calculations, the figure for FY2023 has been revised from 70,340 thousand GJ.
• Energy conversion factor from electricity consumption: 3.6 (MJ/kWh).
• Energy conversion factors from other than electricity consumption are based on the Act on Rationalizing Energy use and Shifting to Non-fossil Energy in Japan.
• Within the boundary of environmental data, electricity consumption includes the electricity purchased from power generation companies and generated from renewable energy sources (excluding biomass) which is consumed in-house.
• The amount of electricity consumption purchased from other companies and the amount of electricity generated in-house which was derived from renewable energy sources (excluding biomass fuels for self-generated and self-consumed use) was 322,716MWh in FY2024.
• The main reason for the increase of energy consumption in FY2024 compared to FY2023 is that a power generation plant operated throughout the entire fiscal year.

Environment (Water Resources)

Water Withdrawal

• The boundary is on a consolidated basis and includes Sumitomo Corporation, consolidated subsidiaries and Joint operations.
• We apply mutatis mutandis the operational control approach in the GHG Protocol to decide the boundary. Thus, we include all water withdrawal from businesses only when we have operational control over the businesses from FY2023 instead of the method that we applied until FY2022, which we include water withdrawal from joint operations corresponding to the investment ratio as of the end of March.
• Of the 1,623,781 thousand m³ of water withdrawal in FY2024, we obtained third-party assurance for 1,567,660 thousand m³★ of water withdrawal excluding the withdrawal for 26 companies in Europe and Americas fresh produce business, for which partial estimates have been adopted.
• The main reason for the increase of water withdrawal in FY2024 compared to FY2023 is that a power generation plant operated throughout the entire fiscal year.
• [Water Withdrawal -Components of Water Sources-] is not subject to assurance engagement.

Water Withdrawal in Water-Stressed Areas (Components of Water Withdrawal)

• Water Withdrawal in water-stressed areas is aggregated locations with a water risk level of 3 (High) or higher as water-stressed areas on the World Resources Institute (WRI)'s "WRI Aqueduct".
• [Water Withdrawal in Water-stressed Areas] is not subject to assurance engagement.

Water Discharge

• The boundary is consolidated and includes Sumitomo Corporation consolidated subsidiaries and Joint operations.
• We apply mutatis mutandis the operational control approach recommended in the GHG Protocol to decide the calculation scope. Thus, we include all water discharge from businesses only when we have operational control over the businesses from FY2023 instead of the method that we applied until FY2022, which we include water discharge from joint operations corresponding to the investment ratio as of the end of March.
• The main reason for the increase of water discharge in FY2024 compared to FY2023 is that a power generation plant operated throughout the entire fiscal year.
• [Water Discharge] is not subject to assurance engagement.

Environment (Resources and Waste)

• The boundary of “Consolidated” is Sumitomo Corporation, consolidated subsidiaries and Joint operations. The boundary of "Non-consolidated (in Japan)" includes the head office, domestic branches and sub-branches.
• We apply mutatis mutandis the operational control approach in the GHG Protocol to decide the boundary of waste emissions. Thus, we include all waste emissions from businesses only when we have operational control over the businesses from FY2023 instead of the method that we applied until FY2022, which we include waste emissions from joint operations corresponding to the investment ratio as of the end of March.
• Waste emissions are for general waste from business operations; industrial waste and valuable resources are not included.

Environment (Others)