Jump to section
View Sumitomo Corporation's Sustainability : Natural Capital
The Sumitomo Corporation Group aims to achieve sustainable growth and to help solve social issues in accordance with “Sumitomo’s Business Philosophy” and “Corporate Mission Statement”.
Our Group’s business activities depend heavily on the ecosystem services generated by the diverse natural capital of the Earth, while also having impacts on them. For this reason, as stated in “Environmental Policy”, we recognize that giving due consideration to environmental conservation, including natural ecosystems, and to the maintenance and conservation of biodiversity is an important issue for our Group.
As challenges surrounding natural capital—including climate change and the loss of biodiversity—have grown more serious in recent years, our Group updated Material Issues in May 2024, newly setting forth “Preserve and regenerate natural capital”. In addition, looking ahead to 2030, the target year of the Kunming-Montreal Global Biodiversity Framework, we have set “Promotion of initiatives toward nature positive by 2030” as a medium-term target. Together with this, in order to foster understanding of this medium-term target and to strengthen our initiatives, we have defined our Group’s efforts toward nature positive as “minimizing the impact of our business on natural capital and continuing to transform our business toward the preservation and regeneration of natural capital”.
Our Group will work to understand how our businesses depend on and impact nature throughout the entire value chain, assess the business risks and opportunities arising therefrom, and pursue both the preservation and regeneration of natural capital and the enhancement of corporate value.
| Material issues | Long-term goals | Medium-term goals |
|---|---|---|
| Preserve and regenerate natural capital |
|
|
Water is an essential natural resource. However, due to an increase in water demand as a result of population growth and economic development, there will be more and more areas where water will become scarce. According to the Organization for Economic Co-operation and Development (OECD), water demand is projected to increase by 55% between 2000 and 2050 and, in 2050, 240 million people will have no access to clean water and 1.4 billion people will be without access to basic sanitation.
Our Group conducts its business around the world, including in highly water-stressed areas. Recognizing that water resources are finite, we regard this issue from both risk and opportunity perspectives. To pursue sustainability in the use of water in our business activities, we strive to ensure the appropriate management of water use, promote recycling and reuse, and thoroughly implement proper wastewater treatment. In addition, we will work to address water-related challenges through initiatives such as the development of water infrastructure businesses.
Sumitomo Corporation Groups business covers a wide range of areas around the world. As described in the Environmental Policy, the Group complies with environment-related laws and regulations and contributes to creating a recycling society. We consider it important not only to comply with laws, ordinances and standards to prevent pollution caused by waste water, sludge, exhaust and other wastes but also to reduce environmental impact through waste reduction, reuse and recycling in order to achieve a sustainable society. We will continue to address relevant issues through our business activities.
Efforts to Reduce Environmental Impacts in the Agrochemical / Fertilizer Sales Business
In June 2022, Sumitomo Corporation endorsed the philosophy of the Taskforce on Nature-related Financial Disclosures (TNFD)* and joined the TNFD Forum, which supports and endorses TNFD activities. In January 2024, following a resolution by the Board of Directors, we registered as a “TNFD Early Adopter”, committing to early adoption of the disclosure recommendations published by the TNFD in September 2023, leading to this disclosure in September 2025.
Through disclosures aligned with the TNFD Recommendations and ongoing dialogue with stakeholders, we aim to accelerate efforts to preserve and regenerate natural capital through our business activities.
Our responses to the six general requirements are as follows.
The Board of Directors is responsible for determining important management matters based on our Group’s diverse sustainability-related risks and opportunities as well as dependencies and impacts, including nature-related issues, and for overseeing the decision-making and business execution carried out by the Management Council and executive officers. The Board of Directors receives reports at least semi-annually on the analysis of, and responses to, risks and opportunities across the entire business portfolio, including those related to sustainability. It also receives annual reports from the Corporate Sustainability Department on the analysis of, and responses to, sustainability-related risks and opportunities as well as dependencies and impacts recognized in individual businesses, together with monitoring indicators, thereby overseeing the initiatives of the executive side, including the Management Council.
In addition, in accordance with internal regulations, decision-making on important management matters and business execution are carried out by the Management Council and executive officers. To assess and manage diverse sustainability-related risks and opportunities as well as dependencies and impacts and to make effective decisions, the Management Council makes comprehensive decisions after consulting the Corporate Sustainability Committee and other bodies.
We have also established the Sustainability Advisory Board, comprising outside experts who provide advice on sustainability, including nature-related issues, to the Corporate Sustainability Committee, thereby reflecting their input in management decision-making on complex and specialized issues. The addition of natural capital to our Material Issues in May 2024 and the strengthening of related initiatives have been advanced with advice from the Sustainability Advisory Board.
Our Group establishes various policies through discussions at the Board of Directors and the Management Council, and operates its businesses based on those policies. For details of the governance structure and various policies, please refer to “Sustainability Management” and “Governance of Sustainability Management” on our website.
Our Group aims to be a global corporate group that broadly contributes to society, and sets forth respect for human beings as the foundation of our management stance in Corporate Mission Statement. In accordance with international standards such as the UN “Guiding Principles on Business and Human Rights”, we have established “Human Rights Policy”.
As part of our commitment to respecting human rights, our Group respects international norms concerning the rights of Indigenous Peoples, such as the “United Nations Declaration on the Rights of Indigenous Peoples” and the principle of “free, prior and informed consent (FPIC)”. In addition, in business activities in regions where Indigenous Peoples reside, we operate while recognizing the unique culture and history of Indigenous Peoples, complying with the laws, regulations, and environmental permits applicable in each country and region, and giving due consideration to Indigenous Peoples and local communities.
For the implementation and progress of human rights due diligence, including the results of organizing sector- and product-specific risks for high-risk businesses, and for individual initiatives, please refer to “Respect for Human Rights” on our website.
In this disclosure, after understanding the dependencies on and impacts on natural capital across our Group’s entire business, including the value chain (hereinafter “VC”), we identified priority sectors and priority businesses and assessed material dependencies, impacts, risks, and opportunities. In line with the following process, we disclose the high-level assessment of our entire Group and the results of the analysis of nature-related issues in Mining and Agriculture sectors.
Key Changes from Previous Disclosures：
To understand the overall picture of dependencies on and impacts on natural capital across our Group’s entire business, we conducted an assessment using “ENCORE”. In previous years, the assessment targeted direct operations; this time, we expanded it to the VC to assess dependencies on and impacts on nature. In conducting the expanded assessment, because the “ENCORE” assessment results had been updated since the previous assessment, we again conducted an assessment of the entire business, including direct operations.
We classified our Group’s entire business into 14 sectors*, organized the business stages in each business’s VC, and conducted the assessment.
| Previous classification | This time |
|---|---|
| “Homebuilding-Construction”, “Construction Material Production” and “Infrastructure Builds” | “Construction & Real Estate” |
| “Hydroelectric Power Generation”, “Geothermal Power Generation”, “Solar Power Generation” and “Thermal Power Generation” | “Power Generation” |
Heat Map (High-level Assessment)
Following the high-level assessment, to more accurately identify business stages with high dependencies and high impacts, we integrated the ENCORE assessment results and conducted an assessment along the two axes of dependencies and impacts.
Impacts on nature were confirmed to be large, led by “Extraction” in Mining sector and “Raw material production” in Agriculture, followed by “Raw material production” in the Retail, Construction & Real Estate, Digital, Automotive, and Transportation & Construction Systems sectors.
Dependencies on nature were confirmed to be large in “Raw material production” in sectors such as Agriculture, Forestry, Retail, and Apparel, and in “Extraction” in Mining sector.
By expanding the scope of this analysis to the entire VC, we confirmed that there are business stages with high dependencies on and impacts on nature outside of direct operations as well. Thus, we recognized the necessity of analysis including the VC, and we also conducted examination including the VC in the subsequent LEAP analysis of the priority sectors.
Focusing on Mining and Agriculture sectors, which were assessed as having large dependencies and impacts in direct operations based on ENCORE information, we conducted a detailed assessment of nature-related issues in these sectors, including the entire VC.
In examining dependencies and impacts at the sector level, we followed these steps:
① In examining dependencies and impacts at the sector level, in addition to the ENCORE assessment results, we referred to various sources such as the TNFD sector guidance and the SASB Standards, and organized how the Mining and Agriculture sectors generally depend on and impact nature at each VC stage.
② We confirmed the presence or absence of risk-materialization cases in the countries of direct operation at each VC stage, and updated the assessment to reflect the actual situation in our Group’s countries of operation.
③ After setting the assessment criteria for judging materiality for each dependency and impact, we identified material dependencies and impacts by sector and VC stage. For businesses outside direct operations, the dependencies and impacts were organized in general terms.
![Important risks and opportunities [Mining]](/img/27/en/27_image_34.png)
◎Material dependencies and impacts
○ Dependencies and impacts relevant to the sector but judged to be of lower importance to our Group
Red frame: business stages involving direct operations
In the mining sector, the relationship with nature is particularly deep at the development and extraction stages. Material dependencies were assessed for “freshwater supply, water flow regulation, and water purification”, which are necessary for operations; and “regulating and maintenance services (climate regulation, flood and storm mitigation, rainfall pattern regulation, and soil and sediment retention)”, which are important for stable operations. In addition, impacts were assessed as material from various perspectives, including “changes in land and freshwater use” associated with land development; “greenhouse gas emissions” from heavy machinery and other equipment; “water use” required for operations; “waste generation” from tailings and other materials; related “water and soil pollution”; “emissions of air pollutants”; and “disturbances” caused by noise and vibration from heavy machinery and other sources.
![Important risks and opportunities [Agriculture]](/img/27/en/27_image_35.png)
◎ Material dependencies and impacts
○ Dependencies and impacts relevant to the sector but judged to be of lower importance to our Group
Red frame: business stages involving direct operations
In the agriculture sector, the relationship with nature is particularly deep at the raw material production stage. Material dependencies were assessed for “freshwater supply and water flow regulation” and “pollination”, which are necessary for growth; “soil quality regulation and water purification”, which are important for plant growth; “regulating and maintenance services (climate regulation, flood and storm mitigation, rainfall pattern regulation, and soil and sediment retention)”, which reduce damage from water and sediment disasters; and “biological control”, which is important for protection from pests and diseases. In addition, impacts were assessed as material from the perspectives of “changes in land and freshwater use” and “water use” due to the development of cultivated land; “water and soil pollution” and “disturbances” due to fertilizers and agricultural chemicals; and “waste generation”
We examined what nature-related risks and opportunities arise from the identified material dependencies and impacts, and then assessed and identified the risk and opportunity items of particular importance to our Group from the perspectives of likelihood of occurrence and qualitative importance (impact on business continuity, impact on society and the environment, and financial impact). The main risk and opportunity factors involving our Group’s direct operations are as follows.
![Material Risks and Opportunities [Disclosure Image] * Text revised](/img/27/en/27_image_36.png)
![Material Risks and Opportunities [Disclosure Image] * Text revised](/img/27/en/27_image_37.png)
Because the importance of nature-related dependencies, impacts, risks, and opportunities differs greatly by location, it is necessary to consider regional characteristics. For the 29 material locations associated with the priority sectors (Mining and Agriculture), we conducted a location analysis to identify businesses located in ecologically sensitive areas and further identified priority locations by associating the assessment of material dependencies (“freshwater supply”) and impacts (“water use”, “land / freshwater use”, and “pollution”).
For the location analysis, because external tools capable of analyzing risks by location are currently limited, we used two tools*—“Aqueduct” and “Global Forest Watch”—to analyze four items: “water stress”, “ecosystem sensitivity”, “reduction in tree cover” and “land of Indigenous Peoples and communities”.
As a result of the priority location assessment, the proportion of priority locations in each sector is as follows.
![Priority Location Results — Mining [Summary]](/img/27/en/27_image_38.png)
![Priority Location Results — Agriculture [Summary]](/img/27/en/27_image_39.png)
Our Group undertakes various initiatives to minimize the risks and impacts on nature from our businesses.
First, in our “Environmental Policy”, we set forth giving due consideration to environmental conservation, including natural ecosystems, and to the maintenance and conservation of biodiversity. In addition, to strengthen our response to nature-related risks in the supply chain, we revised the “Sustainable Supply Chain Action Policy” in July 2026, requiring suppliers to give consideration to environmental conservation and biodiversity, among other matters. Furthermore, for certain procurement items with high nature-related risks, we have established individual procurement policies for specific commodities to promote responses to environmental and social issues in the supply chain.
From the perspective of AR3T,* our Group implements initiatives that lead to the reduction of impacts and to opportunities in Mining and Agriculture sectors and others, as follows.
Among the businesses related to the mining and agriculture sectors, we identified priority businesses from a natural capital perspective for our Group, based on the priority location assessment results, the scale of invested capital, and strategic importance, and we conduct a LEAP analysis and monitoring of these priority businesses using the external tools employed in "4.3 LEAP Analysis of the Priority Sectors (Mining and Agriculture)." In addition, the UAE gas-fired power generation business, Hamriyah, which was a priority business in the previous fiscal year, is also subject to this analysis and monitoring.
| Sector | Project |
|---|---|
| Agriculture |
|
| Mining |
|
| Thermal Power Generation |
|
None of the five projects subject to location analysis for Indigenous and Community Lands were found to be situated in areas with a high risk of rights infringement related to such lands or territories. Accordingly, further details on this topic have been omitted. Nonetheless, regardless of the results of the risk assessment, our Group remains committed to respecting human rights and upholds international norms concerning the rights of indigenous peoples, such as the United Nations Declaration on the Rights of Indigenous Peoples and the principle of Free, Prior and Informed Consent (FPIC). In regions where indigenous peoples reside, we recognize their unique cultures and histories, comply with applicable laws and environmental permitting requirements of the respective countries or regions, and conduct our operations with due consideration for indigenous peoples and local communities.
(1) Project Overview
Fyffes, a subsidiary of Sumitomo Corporation (hereinafter “the Business”), engages in a wide range of activities including the production, distribution, and sale of fresh produce. Bananas and pineapples serve as the company’s core product, produced, sourced and procured primarily from Latin America and sold in markets across Europe and North America.
(2) Locate/Evaluate
A location analysis was conducted for farm sites in Latin America, focusing on Water Stress, Ecosystem Sensitivity, and Tree Cover Loss.
The analysis confirmed that none of the sites are subject to high Water Stress. However, in terms of Ecosystem Sensitivity, it was identified that certain sites are located near areas of internationally recognized ecological importance—specifically, Key Biodiversity Areas (KBAs) in Belize and Costa Rica, and a UNESCO Biosphere Reserve in Costa Rica. Additionally, some sites were found to be located in regions experiencing a loss of tree cover.
(3) Assess
Potential Risk Identification and Analysis Results
Based on the sector’s general dependencies and impacts, as well as the results of the location analysis, Ecosystem Sensitivity and Tree Cover Loss were identified as risks requiring particular attention.
Accordingly, scenario analyses were conducted to identify potential future changes in these risks, focusing on both physical and transition risks.
<Physical Risk>
Using the Climate Impact Explorer, a scenario analysis was performed on flood risk, which can significantly affect vegetation cover and ecosystem sensitivity. The results indicated that the risk of flooding is expected to remain low in the future.
<Transition Risk>
The advancement of regulations aimed at preventing deforestation through land-use change—at both national and regional levels—may result in compliance costs, such as those related to enhancing traceability for relevant products. Among the four categories of transition risk—policy and legal, market, technology, and reputation—regulatory risk is considered to be a main risk that needs to be addressed.
Project Assessment and Response Measures for Potential Risks
The Business conducts ongoing materiality analyses on sustainability-related issues and has identified ecosystem conservation, deforestation, and soil erosion as key areas of concern. In line with this recognition, the Business’s banana farm in Costa Rica became the first in the world to obtain the Rainforest Alliance 2020 Certification in 2021. A land conservation program has also been implemented to mitigate soil degradation, covering approximately 20% of all owned land. Specific measures include the designation of conservation areas around banana and pineapple farms, preservation and reforestation of natural vegetation to prevent soil erosion, and biodiversity surveys and conservation planning across farms and approximately 3,000 hectares of conservation zones. Furthermore, various pest and disease management initiatives have been adopted to reduce pesticide use in order to help conserve ecosystems, vegetation cover, and water areas.
As such, the Business is considered to have already implemented effective measures to address potential risks related to ecosystem sensitivity and loss of tree cover.
* For further details on these measures, please refer to the Sustainability Report published by Fyffes.
(4) Prepare
Going forward, the Business will continue its efforts to prevent ecosystem degradation and loss of vegetation cover by maintaining initiatives in designated conservation areas and monitoring the results of biodiversity surveys.
In considering any future farmland development, the Business will also take into account the anticipated increase in regulatory risks and will continue implementing and monitoring measures to prevent deforestation.
| Potential Risk | Indicator | Data | TNFD Indicator Code |
|---|---|---|---|
| Ecosystem Sensitivity | Scope of Terrestrial Ecosystem Conservation | As of 2024, approximately 2,819 hectares of conservation areas have been designated, which accounts for around 20% of the total land owned. | C1.1 |
(1) Project Overview
The Quebrada Blanca Copper Mining Project (hereinafter "the Project") is a copper mining project in the Tarapacá Region of the Republic of Chile, operated jointly with Sumitomo Metal Mining Co., Ltd. (hereinafter "Sumitomo Metal Mining") and major Canadian resource company Teck Resources Limited. Sumitomo Corporation and Sumitomo Metal Mining have participated in the project since 2019. The project entered Phase 2 of its operations in 2023 and plans to carry out continuous, steady long-term production for 25 years or longer.
(2) Locate/Evaluate
Location analyses of Water Stress and Ecosystem Sensitivity were performed for the Project. These analyses confirmed that the level of Water Stress is high at the Project's location. Regarding Ecosystem Sensitivity, there are no areas near the Project site that are considered critical in terms of biodiversity, such as protected habitats, and the risk level was confirmed to be low.
(3) Assess
Potential Risk Identification and Analysis Results
Sector general dependence and impact analysis and location analysis identified Water Stress as a particularly important risk. To assess future changes in latent risk related to Water Stress, we performed scenario analyses of physical and transition risks.
<Physical Risk>
We analyzed future Water Stress forecasts using AQUEDUCT. This analysis showed that for each of the climate change scenarios (Pessimistic, Business as Usual, and Optimistic), Water Stress would remain high in the future (2030, 2050, and 2080)
<Transition Risk>
In Chile, the problem of water resource depletion is widely recognized, and there are on going discussions regarding the need to introduce equipment in reducing the amount of freshwater intake, including sea water desalination. Therefore, there is a possibility that restrictions on the use of terrestrial water may become stricter in the future. Because of this, out of the four transition risk categories of policy and legal, market, technology, and reputation, addressing risks in the policy and legal category is considered especially important.
Potential Risk Identification and Analysis Results
The Project has already installed seawater desalination equipment and more than 90% of the water necessary for the Project is being secured through seawater desalination. Furthermore, over 80% of the used water is reused, significantly reducing the amount of freshwater intake. Therefore, the impact of water intake on local water sources has been minimized, and measures have been taken to address the physical risks caused by continuous, high levels of Water Stress and latent risks related to Water Stress, including transition risks in the policy and legal category.
(4) Prepare
| Potential Risk | Indicator | Data (2024)* | TNFD Indicator Code | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Water Stress | Water withdrawal (ML) |
|
C3.0 | |||||||||||||||
| Water reuse/recycling rate | 84% | A3.2 |
(1) Project Overview
Oresteel Investments (Proprietary) Limited (hereinafter “Oresteel”), an affiliated company of Sumitomo Corporation, is a holding company that invests in Assore, which holds a 50% equity stake in Assmang, a producer of iron ore and manganese ore in South Africa. Based in South Africa, Oresteel indirectly owns multiple mining through its investment in Assore and Assmang (hereafter the “Business”). These include chrome ore mine via Assore, and iron ore and manganese mines via Assmang (a 50:50 joint venture between Assore and African Rainbow Minerals [ARM]).
(2) Locate/Evaluate
For this Business, a location analysis was conducted on Water Stress and Ecosystem Sensitivity. The results confirmed that the areas where the two target mines—Khumani Iron Mine and Black Rock Manganese Mine—are located are subject to high water stress. On the other hand, with regard to ecosystem sensitivity, no protected areas or other biodiversity-sensitive zones were found in the vicinity of the mines.
(3) Assess
Potential Risk Identification and Analysis Results
Based on the sector-level dependency and impact analysis, as well as the results of the location analysis, water stress was identified as a risk requiring particular attention. Accordingly, scenario analyses were conducted to assess how potential risks related to water stress may evolve in the future, focusing on both physical and transition risks.
<Physical Risk>
An analysis using the AQUEDUCT tool was conducted to assess future water stress. The results confirmed that high levels of water stress are expected to persist at the two mine locations under all climate change scenarios— Pessimistic, Business as Usual, and Optimistic—through 2030, 2050, and 2080.
<Transition Risk>
If high levels of water stress continue, potential risks may arise in South Africa such as stricter regulations on freshwater use in the mining sector, and increased costs associated with the implementation of additional facilities or technologies. Among the four categories of transition risk—policy and legal, market, technology, and reputation—regulatory risk and technological risk are considered to be main risks that need to be addressed.
Project Assessment and Response Measures for Potential Risks
At the Khumani Iron Mine, a comprehensive set of measures has been implemented, including water recovery, construction of water storage facilities, and improvements in rainwater management. A target for water usage per ton of production has been set, and performance is being regularly monitored. At the Black Rock Manganese Mine, efforts are underway to reduce total water withdrawal in the region by using reclaimed water, improving rainwater management, and encouraging the use of treated water in nearby communities.
By reducing inland water withdrawals at both mine sites, Oresteel minimizes both the impact on local water sources and the potential operational impact in the event of future water resource depletion. As such, Oresteel is considered to have already implemented effective measures to address potential risks related to water stress.
(4) Prepare
Oresteel operates in compliance with the strict environmental permitting and regulatory requirements of the host country, including those related to water use and ecosystems, and will continue to ensure full compliance with all relevant laws and regulations going forward.
With regard to water stress, identified as a potential risk, we will confirm water use and water reuse/recycling rates through dialogue with operating companies, including the status of efforts at mine sites where targets have not yet been established. We will also continue to closely monitor regulatory developments in the region.
| Potential Risk | Indicator | Data | TNFD Indicator Code | |||||
|---|---|---|---|---|---|---|---|---|
| Water Stress | Water withdrawal (million m3) | Fiscal year* | 2021 | 2022 | 2023 | 2024 | 2025 | C3.0 |
| Khumani | 482 | 466 | 404 | 390 | 494 | |||
| Black Rock | 138 | 110 | 204 | 162 | 222 | |||
| *Operational Water withdrawal | ||||||||
| Water use per ton of production (m3/ton) | Khumani | FY2025: 0.343 (Target: 0.319 or less) | ||||||
| Black Rock | *Quantitative targets to be established in the future | |||||||
(1) Project Overview
Mineração Usiminas S/A (hereinafter "the Project") is a joint venture between Usiminas (70% ownership) and Sumitomo Corporation (30%). In the Serra Azul region of Minas Gerais, Brazil, it operates three mines and it produces and sells iron ore.
(2) Locate/Evaluate
Location analyses of Water Stress and Ecosystem Sensitivity were performed for the Project. These analyses found that the level of water stress is not high in the Project's location. However, with respect to ecosystem sensitivity, the project location was confirmed to be in a region with virgin tropical forest with a high level of biodiversity.
(3) Assess
Potential Risk Identification and Analysis Results
Sector general dependence and impact analysis and location analysis identified the use of terrestrial ecosystems as a risk with a particularly large impact. For the Project, which is located near virgin tropical forest with a high level of biodiversity, changes in land use and pollution (especially pollution caused by tailings) are risks for which measures are of particular importance. Therefore, we performed scenario analysis for physical risks and transition risks to assess how these risks could change in the future.
<Physical Risk>
We used Climate Impact Explorer to perform analysis. Our analysis found that Brazil's Minas Gerais, where the Project is located, has been confirmed to have a higher future risk of flooding and extreme rainfall. If tailing dams or other related facilities were to be damaged, pollutants could be released into the surrounding environment, so there is a latent risk of impact on the area's ecosystem and organisms.
<Transition Risk>
In recent years, there has been growing interest in natural capital and the general public is aware of the potential for pollution from tailing facilities in the mining sector. Based on this, there are risks of the tightening of restrictions on the conservation of land when mines are closed down and on the management of tailing dams and risks of rising costs related to additional measures and the introduction of new technologies. Because of this, out of the four transition risk categories of policy and legal, market, reputation, and technology, addressing risks in the policy and legal category and the technology category is considered to be especially important.
Potential Risk Identification and Analysis Results
The Project has performed environmental impact assessments of land use changes and is implementing amelioration measures that minimize the impact of land changes, such as appropriate waste management measures and measures carried out by the plant and wild animal rescue programs. Furthermore, land with an area larger than the mine's footprint has been secured for forest planting activities, conservation easement, and as a conservation and preservation area for the area's original vegetation. Additionally, a wildlife monitoring program is being implemented in the area where the Project is located, and we are considering using the results of studies in future conservation efforts in the area. Therefore, the Project can deal with latent risks related to changes in land use, including transition risks, through initiatives for mitigating the impact of changes to land characteristics and through conservation and protection activities. We believe these initiatives are also effective in addressing physical risks such as damage to related facilities caused by flooding or localized heavy rains.
With regard to pollution related to tailings, the Project is introducing a highly stable dry stacking system which replaces the traditional tailing dam equipment. This dry stacking system does not release wastewater into the external environment, instead reusing and circulating process water. The Project is managed in compliance with local laws and regulations, including daily visual inspections and geotechnical monitoring as well as monitoring and confirming of water quality.
We therefore believe that these measures can deal with latent risks related to land use and pollution.
(4) Prepare
The Project's operations are performed in compliance with laws and regulations, such as local environmental licensing, concerning water use, ecosystems, and the land of indigenous people, etc. The Project will continue to comply with related laws and regulations. With regard to changes in land use, which have been confirmed to be a latent risk, indicators such as the mining project footprint and the area of conservation and preservation areas, will be monitored.
With regard to pollution, in FY2025, the Project plans to complete our disassembly of the conventional tailing dam, but we will continue to monitor water quality, paying close attention to whether the business activities have an impact on the area's water quality, and the Project will monitor water discharged by the dry stacking system.
| Potential Risk | Indicator | Data (2025) | TNFD Indicator Code |
|---|---|---|---|
| Changes in land use | Area of changes in usage of terrestrial/freshwater/marine ecosystems | Total footprint of mining project: 11km2(1,100ha) | C1.1 |
| Area of protected or restored terrestrial/freshwater/marine ecosystems | Mandated by law or regulation: Environmental Protection Area: 74km2(7,400ha) Legal Reserve: 14.64 km2(1,464ha) |
C1.1 | |
| Pollution from tailings | Wastewater discharge | Discharge of wastewater from the dry stacking system: 0 m3 | C2.1 |
(1) Project Overview
The Hamriyah gas-fired thermal power generation project (hereinafter "the Project") is the first large-scale IPP thermal power generation project in the Emirate of Sharjah, part of the United Arab Emirates. The project is located in Sharjah's Hamriyah area and is made up of three power generation units with a combined output of approx. 1,800 megawatts. The first unit was put into commercial operation in 2021 and the remaining two units were put into commercial operation in 2023.
(2) Locate/Evaluate
Location analyses of Water Stress and Ecosystem Sensitivity were performed for the Project. These analyses confirmed that the level of water stress is high in the Project's location. With regard to ecosystem sensitivity, an area that is a protected habitat was found to exist near the project location.
(3) Assess
Potential Risk Identification and Analysis Results
Sector general dependence and impact analysis and location analysis identified water stress as a risk for which measures were of particular importance. Additionally, with regard to ecosystem sensitivity, the project location is near an area of high importance in terms of biodiversity, so the risk assessment result was "Middle" and there are risks which must be addressed through complementary measures.
To assess how latent risk related to water stress may change in the future, we performed scenario analysis of physical risks and transition risks.
<Physical Risk>
We analyzed future water stress forecasts using AQUEDUCT. As a result of this analysis, we found that for each of the climate change scenarios (Pessimistic, Business as Usual, and Optimistic), water stress would remain extremely high in the future (in 2030, 2050, and 2080).
<Transition Risk>
The issue of water resource depletion is widely discussed in the United Arab Emirates, and national strategies, laws, and regulations recognize the importance of maintaining and managing sustainable water resources. Therefore, we believe there is a latent risk of corresponding rising costs, such as the costs of further water-related measures that companies are required to implement. Because of this, out of the four transition risk categories of policy and legal, market, reputation, and technology, addressing risks in the policy and legal category is considered to be especially important.
Furthermore, with respect to ecosystem sensitivity, we believe there are latent risks requiring complementary measures. Specifically, there is a latent possibility of an environmental impact from pollution in the form of hot wastewater from power plant cooling or highly concentrated saltwater (brine) produced by seawater desalination. There are wetlands near the project site with mangrove trees and precious marine ecosystems, so there could be an impact on these ecosystems.
Potential Risk Identification and Analysis Results
Seawater desalination equipment has already been installed, and the project is securing the water it needs for its business activities by desalinating seawater, without using freshwater. This minimizes the impact of water intake on the area's water resources and the impact of the potential future depletion of water resources on the project. We therefore believe that the Project has already put measures in place to minimize risks related to water stress.
With regard to ecosystem sensitivity, we believe the Project may have an environmental impact in the form of pollution such as hot wastewater and highly concentrated saltwater (brine). However, our environmental impact assessment has confirmed that the wastewater and brine is dispersed and diluted on the sea's surface so their impact on the marine ecosystem is minor and within standards. Additionally, the Project performs annual marine ecosystem studies in nearby areas that are home to coral and pearl oysters. These studies have confirmed that there is no wide-scale environmental damage being caused by the project's activities alone, and we believe that we can deal with the latent risks related to ecosystem sensitivity.
(4) Prepare
| Potential Risk | Indicator | Data | TNFD Indicator Code |
|---|---|---|---|
| Water Stress | Water withdrawal | No freshwater is used (seawater is desalinated for use) [Reference] Seawater consumption 2025: Approx. 830 million m3 |
C3.0 |
| Ecosystem Sensitivity | Temperature of warm wastewater | May 2026: |
C2.1 |
The following provides an overview of the assessment methods used for each of the following perspectives: Water Stress, Ecosystem Sensitivity, Tree Cover Loss, and Indigenous and Community Lands.
Water stress levels (Baseline Water Stress) in the regions where business sites are located were assessed using the AQUEDUCT tool. Based on the assessed level, risk was evaluated in three categories: High Risk, Medium Risk, and Low Risk.
The Global Forest Watch tool was used to assess the proximity of business sites to the following ecologically important areas from a biodiversity perspective. Based on the degree of proximity, risk was evaluated in three categories: High Risk, Medium Risk, and Low Risk.
The Global Forest Watch tool was used to assess areas near business sites where there has been significant loss of vegetation cover. Based on the degree of vegetation loss, the risk was evaluated into two categories: High Risk and Low Risk.
The lives and livelihoods of indigenous peoples and communities may be deeply intertwined with natural capital such as land, resources, and water. In order to identify areas where land with such significant dependencies may be distributed, we used the Global Forest Watch to assess the areas around the business sites. Based on the presence and availability of assessment data, the risk was evaluated into three categories: High Risk, Medium Risk, and Low Risk.
Since our Group’s businesses are wide-ranging, their relationship with nature differs by sector and region. As for these business characteristics, we have traditionally advanced initiatives on an individual-business basis. However, to achieve the “Promotion of initiatives toward nature positive by 2030” set as our medium-term target, we believe that the management of risks and impacts and the examination of measures from a more company-wide perspective are also necessary.
Accordingly, this time, in order to conduct analysis at a more comprehensive level, we carried out a high-level assessment of dependencies and impacts across our Group’s entire business, including the VC, together with analysis and examination of nature-related issues at the sector level for Mining and Agriculture sectors, which were considered to be of particularly high priority, and at the business level for certain priority businesses. For the specific methods of examination and the assessment results for material risks and impacts, please refer to “Strategy.”
Note that nature-related risks and opportunities also include those related to climate change; however, we disclose climate-related matters based on the TCFD (Task Force on Climate-related Financial Disclosures). For climate-related risks and opportunities, please refer to “Climate Change.”
In our Group’s risk management, we broadly categorize business activities into “investment” and “commercial transactions,” and identify and manage risk factors specific to each as well as those common to both. “Social and environmental risk” is positioned as one of these risk factors, and nature-related risk is likewise incorporated into and managed within this company-wide framework.
Our Group's business activities span diverse industries and a wide range of regions, and each business brings a variety of impacts to different stakeholders, such as the global environment, local communities, business partners, and our officers and employees. As the social and environmental impacts of our Group’s business activities, as well as the risks that need to be managed as priorities, vary depending on the products handled, the type of business, and the region of operation, risk management must be tailored to the specific characteristics of each business.
Specifically, for each of our businesses, we conduct risk management by striving to recognize the nature of its content and the region where it is located, its interface with society and the environment, and the associated risks; to maintain communication channels with stakeholders such as local communities and employees and thereby ascertain whether serious issues have arisen; and to ensure that, across the range of social and environmental issues, we not only comply with laws and regulations but also respond in accordance with international standards on the environment and human rights.
To appropriately manage the social and environmental impacts of the activities of the entire Group, including its diverse range of businesses, our Group has established a company-wide framework encompassing screening at the time of investment and financing and periodic monitoring. In conducting due diligence for investments and financing, we assess social and environmental risks—such as climate change, destruction of nature, environmental pollution, water-related risks, the working environment and occupational health and safety, and impacts on local communities—taking into account the content of each business and its regional characteristics. To further enhance the effectiveness of risk management, we use a self-assessment sheet specifically focused on social and environmental risks, drawing on risk information based on the SASB Standards and other frameworks, to identify risks and opportunities. We have also established a system under which the Company Investment Committee makes decisions with due consideration of social and environmental impacts.
Among the assessment items on the self-assessment sheet, the evaluation requirements related to natural capital are as follows.
For businesses in which we have already invested or provided financing, we also see the status of social and environmental risk management through processes such as periodic monitoring via dialogue with the operating companies and internal audits, and, where issues are identified, we advance improvements in accordance with the specific character of the business. In addition, when we receive concerns regarding the impacts of our Group's business activities from stakeholders such as local residents and NGOs, we engage in dialogue and consultation based on the actual circumstances and strive to make improvements; furthermore, for material businesses, we strengthen engagement by, for example, providing explanations and holding dialogue on our own initiative.
As a result of such prior screening and monitoring, in responding to significant social and environmental issues in individual cases, we consider appropriate responses—drawing on advice from external experts as necessary—and submit and report these matters to the Management Council and the Board of Directors through the relevant internal committees. Under the oversight of the Board of Directors, we work to strengthen our responses to social and environmental risks and our management framework.
For the approach to social and environmental risks and the details of the management system, please refer to “Risk Management”.
Among the TNFD’s global core disclosure metrics and global additional disclosure metrics, the metrics that our Group measures and discloses in “Environmental Data” and the metrics measured in individual businesses and disclosed in “Strategy” are organized in the table below. Toward the “Promotion of initiatives toward nature positive by 2030,” we will strive to further expand our metrics, monitoring, and improvement.
| No | Driver of nature change | Metric | Scope | Disclosure content / status |
|---|---|---|---|---|
| Climate change | GHG emissions | Consolidated | Scope 1・2 and Scope 3 emissions | |
| C1.0 | Land / freshwater / ocean use change | Total spatial footprint | Individual business | [Mining] MUSA:total footprint of the mining business |
| Extent of land / freshwater / ocean use change | Individual business | [Agriculture] Fyffes:conservation areas | ||
| [Mining] MUSA:Environmental Protection Area | ||||
| C1.1 | [Mining] MUSA:Legal Reserve | |||
| C2.1 | Pollution / pollution removal | Wastewater discharge | Consolidated / Individual business |
Consolidated: Water Discharge |
| [Mining] MUSA:external discharge derived from dry stacking | ||||
| C2.2 | Waste generation and treatment | Consolidated / Non-consolidated |
Waste emissions; recycling, final disposal, and recycling rate of business-related general waste; hazardous waste emissions | |
| C2.3 | Plastic pollution | Non-consolidated | Emissions, recycling, and heat recovery of industrial waste from plastic-containing products | |
| C2.4 | Total non-GHG air pollutants | Non-consolidated | Air pollutant emissions(including NOx and SOx) | |
| C3.0 | Resource use / replenishment | Water withdrawal and consumption from water-scarce areas | Consolidated / Individual business |
Consolidated: water withdrawal in water-stressed areas |
| [Mining] Quebrada Blanca:water withdrawal | ||||
| [Mining] Oresteel:water withdrawal, water use per ton of production | ||||
| C7.2 | Risk | Amount and content of significant fines, penalties, and litigation in the fiscal year due to negative nature-related impacts | Non-consolidated | Environmental law violations;number and amount of fines (fines of ¥1 million or more, etc.) |
| A3.2 | Resource use and replenishment | Water reduced, reused / recycled | Individual business | [Mining] Quebrada Blanca:water reuse / recycling rate at the copper mine and concentrator |
Our Group is also taking on the challenge of new business development related to natural capital. In particular, we see significant business opportunities in creating products, services, and mechanisms that promote the transition to a circular economy. Because the transition to a circular economy also helps to avoid and reduce impacts on nature arising at stages such as raw material production, we consider it an initiative related to reducing nature-related impacts and creating opportunities. Specific examples of such products, services, and mechanisms have begun to emerge, as follows:
In addition, we participate in “Circular Partners (CPs),” promoted by the Ministry of Economy, Trade and Industry, and work to create businesses that contribute to a circular economy through participation in rule-making, networking, and other activities.
In fiscal 2025, we also entered the carbon credit business derived from mangrove afforestation. We view this business as contributing to nature positive by promoting market growth toward decarbonization, contributing to the improvement of ecosystem services—such as securing habitats for diverse organisms and water purification through mangroves—and contributing to the expansion of employment opportunities and the improvement of livelihoods for local residents who cultivate and manage the mangroves.
While our Group undertakes initiatives on both fronts of risk reduction and opportunity creation as described above, we recognize that initiatives toward nature positive are in a developmental stage for society as a whole, with international rules and metrics expected to be formulated and updated going forward. Therefore, with respect to the above strategy as well, while actively engaging in dialogue with stakeholders, including investors, we will accurately grasp future changes in the external environment and reflect them in our Group’s natural capital initiatives.
While water demand is expected to increase on a global basis as a result of population growth, urbanization and industrialization, the infrastructure environment to ensure the supply of safe and hygienic water has not been improved and water issues are expected to become even more serious. In response, in the 21st century, water business that aims to address water issues has started attracting people's attention globally. Increasing awareness that developed countries are responsible for contributing to achieving a safe and hygienic living environment in developing countries has also contributed to the increased attention to water business.
We regard water business combining water supply and sewerage systems as an important pillar of social infrastructure. Based on this recognition, we are engaged in various business projects around the world. We have been expanding our water business from BOOT and BOO business*1 using private-sector capabilities*2, such as water and sewage treatment and seawater desalination, to fully privatized business in promising markets around the world, including areas with rapidly increasing water demand. We have realized substantial achievements in these business areas. We will continue to take on challenging issues in globally expanding and multifaceted water business by supplying safe and secure water using Japanese technology and responding to the demand for reducing social costs by using private capital.
| Country | Activity Description | Business category |
|---|---|---|
| Brazil | Investment in BRK Ambiental, one of the largest private water-related companies, holds assets of 23 business projects of water supply and sewerage treatment (our indirect ownership ratio is 14%). We are participating in promising water supply and sewerage treatment business in Brazil. | Water supply and sewerage treatment business |
| China | We established Capital Summit at 40% share ratio with Beijing Capital Eco-Environment Protection Group, a leading water infrastructure company in China. Capital Summit operates sewage treatment plants in Shandong Province and Zhejian Province. | Sewerage treatment business |
| Oman | We have been awarded a seawater desalination project using reverse osmosis membrane technology and private-sector capabilities/funds. Commercial operation was started in February 2016. | Seawater Desalination business |
Our major mission in the realm of agrochemical/fertilizer business is to provide the best-quality agrochemicals/fertilizers that fulfill the needs of farmers worldwide with the aim of contributing to increasing the productivity of agricultural crops. We select and combine functions such as import, manufacturing, distribution, wholesale and direct sales by taking into account the characteristics of each market, and we are currently conducting agrochemical/fertilizer business in about 40 countries.
In some areas, unfortunately, farmers and distributors inappropriately dispose of emptied plastic bottle containers and aluminum bags of agrochemicals, which can pollute the environment. There are also concerns that agrochemical remains in such containers could lead to an accident and adversely affect the environment. Agro Amazonia Produtos Agropecuarios Ltda. in Brazil and Summit Agro Mexico S.A. de C.V. in Mexico involve other companies in the industry to make joint efforts to collect and recycle empty containers of agrochemicals to promote environmental conservation.
Efforts are also made to reduce the environmental impacts of agrochemicals themselves, including investment in Bio-solution manufacture called Futureco Bioscience S.A., in Spain, Bio Insumos Nativa SpA in Chile and DPH Biologicals LLC in USA, and application of integrated pest management (IPM), which does not depend on agrochemicals alone and has low environmental impacts.
As an IPM effort, we are spreading the use of a communication disruptor (pheromone agent) developed by Shin-Etsu Chemical Co., Ltd., which uses insect's natural sex pheromone. It is harmless to non-target organisms, and not only reduces the population of the target pest but is also effective on pests that enter inside plants and are hard to control.
It can also be expected to reduce the pesticide resistance of pests. This control method is currently applied by about 60% of orchards in France. In the European region, we have expanded our sales territory to include Poland, Bulgaria and Turkey.
In addition, we put our efforts into reducing the amount of conventional chemical fertilizer applied and reducing environmental impacts on farmland by expanding the sales of coated fertilizers (allowing farmers to control the pace of fertilizer elution and enhance the effective utilization rate of fertilizer constituents, thereby reducing the amount of fertilizer applied), biostimulants (which increase plants’ tolerance to diseases and pests as well as to cold/heat stresses by enhancing their innate immunity and vitality, thereby enabling the use of reduced amounts of fertilizer) and microbial inputs (which convert atmospheric nitrogen into plant-available forms such as ammonia, thereby contributing to the reduction of chemical nitrogen fertilizer use, soil improvement, and the mitigation of environmental impact). (equity participation in Naturevo S.R.L, a Romanian company whose main product is such high-performance fertilizers)
Investment in a bio-agrochemical manufacturer in Spain
Agrochemical project in Brazil (Agro Amazonia Produtos Agropecuarios Ltda.)
Use of a pheromone agent
Since 1954, we have been supplying marine fuel to shipping companies in Japan and abroad. To contribute to reductions in the shipping industry’s environmental impact, we are also working to supply LNG fuel, which emits no sulfur oxides and contains 40-70% fewer nitrogen oxides and 20% less carbon dioxide than conventional fuels. Specifically, through a joint venture with Uyeno Transtech Ltd., Yokohama-Kawasaki International Port Corporation, and the Development Bank of Japan Inc., we placed an order for an LNG bunkering vessel to be utilized for LNG fuel supply business in Tokyo Bay.
The International Maritime Organization (IMO), a specialized agency of the United Nations, has formulated a strategy to reduce greenhouse gas (GHG) emissions from maritime transportation globally to zero by around 2050. In this context, it is believed that ammonia will be the next generation of alternative marine fuels that have the potential to contribute significantly to reducing GHG emissions in the shipping industry because it does not emit CO2 during combustion. Green ammonia in particular has the potential to be a major factor in making the shipping industry carbon-free, as it is produced solely from renewable electricity, water, and air and emits no CO2 during its lifecycle.
We have been appointed by the Singapore government to conduct supply chain development for ammonia bunkering in Singapore. We are currently proceeding with the detailed design of an ammonia bunkering vessel and preparation for demonstrations toward full-scale commercialization. Through this initiative, we aim to contribute to the decarbonization of the shipping industry by creating a comprehensive supply chain that includes the supply, transportation, storage, and bunkering of non-GHG emitting marine fuel.
Sumitomo Corporation Group has imported and supplied Bird Friendly®-certified coffee (BF®-certified coffee) since 2004 as part of our biodiversity-friendly activities, which ensures a stable income for farmers. Since FY2014, SC Foods Co., Ltd. started dealing in BF®-certified coffee. BF®-certified coffee is grown under the shade of natural forest trees to conserve the environment and provide migratory birds a place to rest. The BF certification was created by the Smithsonian Migratory Bird Center (SMBC). As of May 2026, 67 farms and agricultural cooperatives in 12 countries*1 are certified and part of the proceeds are used for SMBC's research, surveys and conservation activities.
In 2019, this project was recognized by the Japan Committee of the International Union for Conservation of Nature and Natural Resources (IUCN) as a cooperative project authorized by the Japan Committee for the United Nations Decade on Biodiversity (UNDB-J)*2. This authorization means that the project is an important activity to conserve biodiversity as well as an activity that has achieved results toward meeting the Aichi Biodiversity Targets*3. We will continue our efforts to contribute to protecting migratory birds and ecosystems through this project.
