Establishment and Certification of Science Based Targets (SBT)

As the impact of climate change becomes more urgent globally, companies are being asked to reduce their emissions of greenhouse gases as a measure to counter global warming. The Sumitomo Forestry Group has announced the formulation of SBTi* and set new greenhouse gases reduction target for the entire Group in June 2017 and was certified as SBT in July 2018. Sumitomo Forestry Group’s new SBT is as follows:

  • 1. Scope 1&2: 21% reduction of greenhouse gas emissions compared to 2017 (base year) by 2030.

  • 2. Scope 3: 16% reduction of total greenhouse gas emissions from Category 1 and Category 11 compared to 2017 (base year) by 2030.

Sumitomo Forestry Group will further strengthen its energy-saving activities, promote use of renewable energy, and other initiatives to reduce greenhouse gas emissions and mitigate climate change based on the SBT.

* The SBTi was established in 2015 as a collaboration of four organizations - CDP (formerly the Carbon Disclosure Project), the UN Global Compact, the World Resources Institute (WRI) and the World Wide Fund for Nature (WWF). The SBTi defines and promotes best practice in science-based target setting, to help companies determine a pathway for reducing their emissions in line with what is required to keep global temperature increase below 2 degrees Celsius compared to pre-industrial temperatures. In Japan, the Ministry of the Environment has translated this in Japanese as “Corporate 2℃ Target” and is supporting company efforts.

SBT

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Toward to SBT Certification Goals

In July 2018, the Sumitomo Forestry Group greenhouse gas emissions reduction targets have been officially approved by international SBT initiative (SBTi). Its progress and results are explained below.

Target Details Base Year
FY2017
t-CO2e
FY2018
t-CO2e
Rate of Change
%

Scope 1&2: 21% reduction of greenhouse gas emissions compared to 2017 (base year) by 2030.

369,785 381,613* 3.2

Scope 3: 16% reduction of total greenhouse gas emissions from Category 1 and Category 11 compared to 2017 (base year) by 2030.

8,895,066 9,009,596 1.3

* The fiscal 2018 increase in greenhouse gas emissions was caused by the start of full operations in April 2018 at the Hachinohe Biomass Power Generation plant.

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Greenhouse Gas Emissions per Scope Based on the GHG Protocol

Since fiscal 2012, the Sumitomo Forestry Group has ascertained the volume of its CO2 emissions according to different scopes*1 based on the GHG Protocol, a set of widely used international accounting tools for quantifying GHG emissions. In view of the increasing demand of renewable energy in recent years, the Sumitomo Forestry Group entered the biomass power generation business in 2011 and has begun operation of Okhotsk Bio Energy in December 2016 as a consolidated subsidiary. This power plant uses coal as supplemental fuel for smooth operation and maintenance while using wood leftover from logging as the primary fuel. Therefore, the total CO2 emissions in Scope 1 and 2 for fiscal 2018 at the Sumitomo Forestry Group were 381,613t-CO2e, a 3.2% increase compared to the previous year.

In addition, when looking by business, our plants in Japan and the power generation business make up 56.9% while our plants overseas compose 29.0%. We started to calculate Scope 3 in fiscal 2013 and the targets for this calculation largely expanded in fiscal 2015 and fiscal 2017. Among these results, the impact in category 11, “emissions during use of detached houses sold,” is acknowledged to be a major factor, and the increase in residential and construction operations in fiscal 2020 of Net Zero Energy House (ZEH) projects is expected to reduce CO2 emissions volumes while the homes are in use.

In the future, we will work to meet targets via SBT*2 in an effort to take greenhouse gas emissions reduction to another level.

*1 The GHG Protocol requires businesses to disclose their greenhouse gas emissions according to the following categories
Scope 1: Direct GHG emissions of a company, including emissions from fuel consumption. E.g. CO2 emissions from the use of gasoline for company vehicles.
Scope 2: Indirect GHG emissions from the generation of purchased electricity and heating. E.g. CO2 emissions from the use of electricity by offices.
Scope 3: GHG emissions occurring in the supply chain. E.g. CO2 emissions generated during the use of products sold.

*2 Science Based Targets. These targets are set for companies to achieve reduction goals in-line with scientific knowledge to limit the raising average temperature around the world to 2°C or less.

Scope 1 and Scope 2 CO2 Emission TrendsIndependent assurance

Scope 1 and Scope 2 CO2 Emission Trends

* Electric power generation (Mombetsu Biomass Power Generation, Hachinohe Biomass Power Generation) figures are excluded.

Scope 1 and 2 Breakdown by Business (FY2018)

Scope 1 and 2 Breakdown by Business (FY2018)

FY2018 Scope 1 and 2 CO2 Emissions Breakdown

(Thousand t-CO2e)

Domestic and Overseas Office Domestic
Non-Office
Overseas
Non-Office
Total
Scope 1 28 213 22 264
Scope 2 16 11 90 118
Total 45 224 113 382

Scope 3 Emissions by CategoryIndependent assurance

Scope 3 Emissions by Category

Scope 3 Emissions by CategoryIndependent assurance(three years)

(Thousand t-CO2e)

Category Boundary of Emissions included in the Category FY2016 FY2017 FY2018

1 Purchased products and services

Emission from upstream of products and services purchased by Sumitomo Forestry 1,228 2,543 2,625

2 Capital goods

Emissions from upstream of purchased equipment 61 71 72

3 Fuels and energy-related activities excluded from Scope 1 and 2

Emissions from the upstream of purchased fuels, electricity, heat capacity, and water 9*2 21*2 20*2

4 Transport and deliver (upstream)

Emissions from Sumitomo Forestry distribution from suppliers of purchased products and services in (1) and emissions due to logistics services other than (1) for costs incurred by Sumitomo Forestry. 268 420 433

5 Waste generated through businesses

Emissions from waste treatment and its transport 10 8 8

6 Business trips

Emissions related to business trips of employees such as use of public transportation and accommodation 1 2 2

7 Employee commute

Emissions from employee commuting 3 5 5

8 Leased property (Upstream)

(Emissions from use of upstream leased property such as office buildings, heavy machinery, vehicles, and facilities are included in Scope 1 or 2) - - -

9 Transport and deliver (downstream)

Emissions during transport of products sold 7*2 106*2 107*2

10 Processing of sold products

Emissions from processing of raw wood into plywood as well as of sold precut processing of sold lumber 50 52 54

11 Use of sold products

Emissions during use of homes sold 2,054 6,352 6,384

12 Disposal of sold products

Emissions from demolition and disposal of homes sold by the Company 42 47 48

13 Leased property (downstream)

(Tenants must belong to the Group and the figures are included in Scope 1 and 2 of the Group) - - -

14 Franchised

(excluded) - - -

15 Investment

Emissions from the investees (based on the Company's proportional share) 91 90 117

*1 Figures through fiscal 2016 are calculated domestically, and from fiscal 2017, they are calculated for overall Group companies. Some of the numerical values that are used are data such as that from the database published by the Ministry of the Environment. The data with greater accuracy will be obtained progressively in the future by requesting the provision of primary data.

*2 From fiscal 2017, the estimated overseas transport distances have been set as follows. Short distance: 20 km; Medium distance: 500 km; Long distance: 1,000 km

FY2018 Total Greenhouse Gas Emissions Accrued From Corporate ActivitiesIndependent assurance

FY2018 Total Greenhouse Gas Emissions Accrued From Corporate Activities

Emission Trends in Scope 1, 2, and 3

Emission Trends in Scope 1, 2, and 3

* The scope of calculation of Scope 3 expanded from the traditional three categories to fifteen categories as of fiscal 2015.

* The scope of calculation of Scope 3 expanded from the traditional domestic scope in Japan to the entire Sumitomo Forestry Group as of fiscal 2017.

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Energy Consumption from Business Activities

The Sumitomo Forestry Group consumed 3,015,835 MWh* of energy in fiscal 2018. The energy consumption of the Group increased due to the start of trail and full-fledge operations of the Mombetsu Biomass Power Generation and Hachinohe Biomass Power Generation Businesses.

The start of full operations at the Hachinohe Biomass Power Generation Plant makes up a dramatic amount of the rise in energy consumption, but this power consumption is forecast to decline from fiscal 2019. The energy consumption in business other than the power generation business has declined thanks to various energy-saving activities.

* The Balance of Input & Output is calculated according to the TJ unit based on the Environmental Reporting Guidelines issued by the Ministry of the Environment. Both are equivalently calculated for the amount of energy consumption.

Energy Consumption Trends Over Four Years

Energy Consumption Trends Over Four Years

* Data for Alpine MDF Industries Ltd. has been excluded because the company was sold in March 2017.

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Reducing CO2 Emissions from Offices

At offices, the Sumitomo Forestry Group CO2 emissions in fiscal 2018 were 30,455t-CO2, a 14.1% reduction compared to the base year (fiscal 2013) for the former Mid-Term CSR Management Plan (and a 4.4% year-on-year decrease).

All business sites of Group companies in Japan are advancing the introduction of fuel-efficient vehicles to make 503 of the 556 company-owned vehicles introduced during fiscal 2018 fuel-efficient vehicles (for a 90.5% adoption rate of fuel-efficient vehicles). In addition, the Group has encouraged employees who drive on the job at offices and business sites of Group companies in Japan to participate in the Eco Training course run by the Japan Automobile Federation (JAF).

The Group has also worked to reduce power consumption. In the Housing and Construction Division, power consumption has been reduced by moving to a “free address” office system (where personnel are not assigned to fixed desks) to make more efficient use of office space. In addition, the division has also proceeded to install solar power generation systems and LED lighting at its model homes and other business sites.

The Group will continue to reduce CO2 emissions by such means as reducing prolonged working hours and raising awareness among employees.

 

Former Mid-Term CSR Management Plan
Reduce total CO2 emissions from all offices of domestic and overseas consolidated companies by 7% compared to fiscal 2013 by fiscal 2020

Chiba Branch Narita Model Homes (Built-in Solar Panels)

Chiba Branch Narita Model Homes (Built-in Solar Panels)

CO2 Emissions (t-CO2) from Offices

FY FY2013
(Baseline)
FY2016
(Results)
FY2017
(Results)
FY2018
(Results)
FY2018
(Target)
Total CO2 emissions 35,440t-CO2 32,660t-CO2 31,871t-CO2 30,455t-CO2 31,407t-CO2
Compared to 2013 Percentage Change - 7.8%
reduction
10.1%
reduction
14.1%
reduction
11.4%
reduction

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Reducing CO2 Emissions Outside Offices

To address CO2 emissions collectively, the Group set manufacturing plants of Sumitomo Forestry Crest and the Agro-Products division of Sumitomo Forestry Landscaping (formerly Sumirin Agro-Products Co.), as well as Tsukuba Research Institute, the Tokyo Metropolitan Area Recycling Center, Sumirin Fill Care (formerly Fill Care Co.), Kawanokita Development, and Japan Bio Energy as domestic non-office category constituents, as well as overseas manufacturing plants of RPI, ASTI, KTI, VECO, NPIL, SRP, and CCC in addition to OBT, and Canyon Creek as overseas non-office category constituents with their respective reduction targets.

In fiscal 2018, the start of full operations at Hachinohe Biomass Power Generation caused an increase of 2.8%.

 

Former Mid-Term CSR Management Plan
Set company-specific reduction targets for CO2 emissions; i.e. over 1% average percent per-unit emission reduction between fiscal 2015 to 2020

Major Non-Office CO2 Emission Reduction Performance and Targets (Per-unit Emissions)

Company Name FY2016
(Results)
FY2017
(Results)
FY2018
(Results)
FY2018
(Target)
Sumitomo Forestry Crest Co., Ltd. 4.5%
reduction
4.1%
reduction
2.2%
increase
3.0%
increase
The Agro-Products division of Sumitomo Forestry Landscaping (formerly Sumirin Agro-Products Co.) 54.6%
increase
0.6%
reduction
1.6%
increase
11.7%
reduction
PT. Rimba Partikel Indonesia (RPI) 15.8%
increase
9.6%
reduction
1.2%
reduction
0.5%
reduction
PT. AST Indonesia (ASTI) 16.0%
increase
9.0%
increase
20.6%
increase
4.1%
reduction
PT. Kutai Timber Indonesia (KTI) 3.1%
increase
10.8%
reduction
4.3%
increase
0.8%
increase
Nelson Pine Industries Ltd. (NPIL) 0.7%
reduction
5.8%
reduction
0.2%
increase
23.7%
increase
Vina Eco Board Co., Ltd. (VECO) 5.4%
reduction
38.0%
increase
10.6%
reduction
23.9%
reduction

* Increases and decreases are in reference to respective previous years.

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Reducing CO2 Emissions from Transportation

Under the revised Act on the Rational Use of Energy in Japan, consigners*1 are required to reduce per-unit energy consumption by an annual average of 1% or more in the medium to long term in relation to the transportation of goods. Sumitomo Forestry and Sumitomo Forestry Crest fall under the category of “specified consigner” (annual freight transportation volume is 30 million ton-km*2 or more), obligating them to submit reports to the Japanese Government. Sumitomo Forestry therefore sets a target each fiscal year to reduce per-unit energy consumption*3 in transportation by 1% or more compared to the previous year. Sumitomo Forestry Crest also sets targets to reduce per-unit energy consumption compared to the previous year.

In fiscal 2018, Sumitomo Forestry's per-unit energy consumption was 93.3% compared to the previous year and Sumitomo Forestry Crest's was 98.3%.

Ongoing efforts will be made to reduce CO2 emissions through cooperation with transportation partners on such measures as improving loading efficiency, shifting from land to sea transportation, and utilizing the return leg of construction material deliveries to transport waste.

*1 Cosigners as defined in the Act on the Rational Use of Energy in Japan is someone who transports cargo to carriers for our businesses

*2 Freight transportation volume (ton-kilometers) = freight weight (tons) × distance travelled (km)

*3 Sumitomo Forestry measures energy consumption per unit of volume handled. Sumitomo Forestry Crest measures energy consumption per unit of net sales

Energy Consumption From Transportation, CO2 Emissions and Energy Consumption Per-Unit (FY2018 Performance)

Energy Use (Crude Oil Equivalent) CO2 Emissions Energy Consumption
Per Unit
Sumitomo Forestry 2,550kL 6,821t-CO2 0.00174kL/m³
(Ratio to Previous FY: 93.3%)
Sumitomo Forestry Crest Co., Ltd. 1,953kL 5,188t-CO2 79kL/1,000 Yen
(Ratio to Previous FY: 98.3%)

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Establishment of an Efficient Delivery

Sumitomo Forestry is reducing the CO2 emissions in its transportation processes by bringing together Sumitomo Forestry Home houses from multiple manufactures momentarily at relay centers in 28 locations throughout Japan with a system to consolidate and transport shipments. Home Eco Logistics takes on logistics operations for the Sumitomo Forestry Group with the housing business at the core and also actively puts forward proposals for efficient logistics operations to material manufacturers, housing manufacturers, housing construction companies and building material distributors. In fiscal 2018, we contracted as consultants to provide two construction materials operators with proposals for more efficient internal warehousing operations and inventory management rationalization. As of March 2019, Home Eco Logistics had provided logistics operations to more than 56 client companies. In the future, we will actively strive in cooperative distribution through multiple companies because of insufficient shipment capacity forecast due to a decrease in the amount of new housing construction.

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Sustainability Report