Environment (Climate Change)

Independent Practitioner’s Assurance

Environmental performance indicators marked with a star (★) for the year ended March 2024 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 the special feature [Climate Change Initiatives] in this site.

GHG Emissions

• The boundary is on a consolidated basis and includes Sumitomo Corporation, consolidated subsidiaries and Joint operations. We have added Joint operations to the boundary from FY2020.
• 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 the fiscal year 2023 instead of the method that we applied until the fiscal year 2022, which we include emissions from joint operations corresponding to the investment ratio as of the end of March. Calculated on the same basis as FY 2022 results, Scope 1(Energy-related CO2) and Scope 2 for FY 2023 are 5,169 thousand t-CO2e and 588 thousand t-CO2e, respectively.
• CO2 emission factors for electricity: (market based method)
  (Non-consolidated in Japan) The adjusted emission factors of individual power companies. Before FY2020 results, the basic emission factors were used.
  (Consolidated subsidiaries in Japan) The average emission factors of all power companies.
  (Overseas) Emission factors from electricity generation are based on the country-specific data in 2021 listed on "Emissions Factors 2023", an IEA (International Energy Agency) statistics. Before FY2020 results, Emission factors from electricity generation are based on the country-specific data in 2013 listed on "CO2 EMISSIONS FROM FUEL COMBUSTION 2016 EDITION".
• 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 5,057 thousand t-CO2e from Scope1 energy-related CO2 and Scope2 in FY2023 by business activity is 782 thousand t-CO2e for business other than power generation and 4,275 thousand t-CO2e for power generation.
• The main reason for the increase of GHG emissions in FY2023 compared to FY2022 is due to new power generation plants starting operations during FY2023.
• The main reason for the increase of GHG emissions in FY2020 compared to FY2019 is the addition of Joint operations to the boundary of data.
• We couldn't collect the amount of water withdrawal for 38 sites due to COVID-19 lockdown or working from home in FY2019. In FY2018, Water consumption of these sites were equivalent to about 50.5% of the total water withdrawal.
• We couldn't collect the environmental data for 38 sites due to COVID-19 lockdown or working from home in FY2019. In FY2018, GHG emissions of these sites were equivalent to about 5.2% of the total GHG emissions.

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 FY2019, we aggregated Sumitomo Corporation and consolidated subsidiaries in Japan and the boundary of Scope1<other GHGs> was expanded to consolidated (excluding Joint operations) in FY2020. 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 the fiscal year 2023 instead of the method that we applied until the fiscal year 2022, which we include emissions from joint operations corresponding to the investment ratio as of the end of March.
• Until the fiscal year 2022, 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 the fiscal year 2023, we have abolished the 3,000 t-CO2e threshold and calculate all emissions except for minor emission.
• The main reason for the decrease in FY2023 compared to FY2022 is that some joint operations are no longer included due to the change in the boundary.

GHG Emissions（Scope3）

• The boundary is Sumitomo Corporation(in Japan) and includes the head office, domestic branches and sub-branches.
• 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 FY2023 uses the emission intensity database Ver.3.4.
• 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. FY2023 results were based on this database (Ver. 3.4).
• 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 have added Joint operations to the boundary from FY2020.
• 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 the fiscal year 2023 instead of the method that we applied until the fiscal year 2022, 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.
• 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.
• The main reason for the increase of energy consumption in FY2020 compared to FY2019 is the addition of Joint operations to the boundary of data.
• 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) was 176,299MWh in FY2023.
• We couldn't collect the environmental data for 38 sites due to COVID-19 lockdown or working from home in FY2019. In FY2018, energy consumption of these sites were equivalent to about 7.3% of the total energy consumption and electricity consumption of these sites were equivalent to about 7.1% of the total electricity consumption.
• The main reason for the increase of energy consumption in FY2023 compared to FY2022 is due to new power generation plants starting operations during FY2023.

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 the fiscal year 2023 instead of the method that we applied until the fiscal year 2022, which we include water withdrawal from joint operations corresponding to the investment ratio as of the end of March.
• Of the 1,525,114 thousand-m³ of water withdrawal in FY2023, we obtained third-party assurance for 1,479,302 thousand m³★ of water withdrawal excluding the withdrawal for 29 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 FY2020 compared to FY2019 is the reactionary increase due to the lack of the environmental data for some sites by COVID-19 lockdown or working from home in FY2019, and the addition of Joint operations to the boundary of data from FY2020.
• The main reason for the increase of water withdrawal in FY2023 compared to FY2022 is due to new power generation plants starting operations during FY2023.
• [Water Withdrawal -Components of Water Source-], 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 the fiscal year 2023 instead of the method that we applied until the fiscal year 2022, which we include water discharge from joint operations corresponding to the investment ratio as of the end of March.
• In case where it is difficult to grasp the amount of discharged water, we estimate the amount of discharged water by assuming that the amount of water Withdrawal = the amount of discharged water. As a result of our efforts to determine and refine the data, the amount of discharged water in FY2021 decreased significantly. Our Group consumes a high percentage of water for fruit cultivation (including evaporation) and recycling without discharging water after use, which results in a smaller amount of discharged water compared to the amount of water withdrawal.
• We couldn't collect the amount of water withdrawal for 38 sites due to COVID-19 lockdown or working from home in FY2019. In FY2018, Water consumption of these sites were equivalent to about 50.5% of the total water withdrawal.
• [Water Discharge] is not subject to assurance engagement.

Environment (Resources and Waste)

• The boundary of “Consolidated” is Sumitomo Corporation, consolidated subsidiaries and Joint operations. We have added Joint operations to the boundary from FY2020. 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 the fiscal year 2023 instead of the method that we applied until the fiscal year 2022, 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.
• We couldn't collect the data on waste emissions for 38 sites due to COVID-19 lockdown or working from home in FY2019. In FY2018, waste emissions of these sites were equivalent to about 0.6% of the total waste emissions.

Environment (Others)