HIGHLIGHT 5 Aiming for 100% Renewable Energies by 2040

Sumitomo Forestry Group has set forth the reduction of the environmental impact of our business activities as one of its material issues. In July 2018, we formulated a Group target for reducing greenhouse gas emissions, which was certified by the SBT Initiative*1. In addition to energy conservation efforts, we are accelerating our use of increasingly important renewable energies to achieve our goal and have become a member of RE100*2 in March 2020.

Joined RE100 with the Aim for 100% Renewable Energies

In October 2018, the Intergovernmental Panel on Climate Change (IPCC) issued its Special Report on Global Warming of 1.5°C, which published the latest scientific findings regarding global warming. According to this report, limiting global warming to 1.5°C compared with 2°C above pre-industrial levels by the end of this century will have a significant difference in impact on the global environment. Given these scientific findings, COP24 and other international discussion forums are rapidly aligning with the Paris Agreement and shifting their targets from 2°C to 1.5°C.

Sumitomo Forestry Group's long-term greenhouse gas emissions reduction target was certified by the SBT Initiative in July 2018. However, prompted by these new findings and in preparation for revisions in SBTs, we have decided to further reduce the greenhouse gas emissions from our business activities. As part of this effort, in March 2020, we became a member of RE100 and are aiming to use 100% renewable energies.

By 2040, we aim to utilize 100% renewable energy for the electricity used for our Group business activities and for the fuel for our power generation operations.

Sumitomo Forestry Group’s implementation of renewable energy includes solar power generation panels installed at our housing exhibition sites and generated power for our own use (including an adjacent wood fuel chip factory) from our biomass power generation sites. In fiscal 2019, renewable energy accounted for about 16% of our total group electricity usage. To accelerate the implementation of renewable energy, we plan to have each business division set its own targets and tackle the issue as a company-wide initiative.

For Sumitomo Forestry Group to achieve 100% renewable energy for the electricity for our operations, we are utilizing Sumirin Denki, a service where we purchase surplus power as well as supply electricity generated from solar power systems of Sumitomo Forestry home houses. We are also considering installing solar power generation systems in our factories both in Japan and overseas. Furthermore, we will consider a diverse range of procurement methods that take advantage of programs in each country we operate.

Sumitomo Forestry Group will continue to proactively utilize renewable energies to reduce greenhouse gas emissions and contribute to the realization of a sustainable society.

*1 SBT (Science Based Targets) Initiative: An international initiative established in 2015 by four organizations, including the United Nations Global Compact and CDP. On October 15, 2019, the SBT Initiative updated its target validation criteria to 1.5°C. Our decision to become a member of RE100 is part of our effort to aim for greenhouse gas emissions that are in line with this new validation criteria level.

*2 RE100: An international initiative operated through an alliance with the Climate Group, an NGO, and CDP. As of March 25, 2020, 229 companies worldwide are members, of which 32 companies are Japanese.

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Utilizing Sumirin Denki Solar Power Generation for Domestic Electricity Usage

In November 2019, Sumitomo Forestry Group launched Sumirin Denki, a service for owners of Sumitomo Forestry Group homes where we purchase surplus energy generated by their household solar power systems and supply it to others. We began this service with the completion of the government’s FIT (feed-in tariff) fixed-price renewable energy purchase system.

We are working on ways to utilize this energy from Sumirin Denki for our business offices and appropriate it to our domestic electricity consumption. Because Sumirin Denki is based on solar power, we need to think of ways to supply electricity at night and are working on the installation of batteries as well as the procurement of other electricity sources, such as biomass power generation from our own Group operations.

Expanding Solar Power in Our Factories

As Sumitomo Forestry Group, our manufacturing facilities account for about 30% of our total greenhouse gas emissions. To achieve RE100, it is vital that we conserve energy and expand the use of renewable energy in our factories.

In May 2020, a new plant was opened in the Kagoshima Plant site of Sumitomo Forestry Crest, which manufactures interior materials. Under a PPA (Power Purchase Agreement) model to hold down initial costs, we plan to install 1,540 solar power panels in this new factory building, which is forecasted to generate approximately 549 MWh of power annually, reducing greenhouse gas emissions by 260t per year. In addition, PT AST Indonesia, which manufactures and sells musical instruments, parts for musical instruments, wooden building materials and interior housing materials, is constructing a new plant to expand production. About 90% of AST’s greenhouse gas emissions comes from electricity consumption and with the operation of the new plant, electricity consumption is expected to increase. However, we are planning to install 3,384 solar power panels on the roof of the new plant, which will produce approximately 2,181 MWh of power annually, reducing greenhouse gas emissions by about 1,600t.

Both in Japan and overseas, Sumitomo Forestry Group is considering the installation and expansion of solar power panels in our manufacturing sites in an ongoing effort to increase the ratio of renewable energy.

* PPA Model: A system whereby a host loans out factory rooftop space to a power generation company to install solar energy panels and then purchases the electricity generated from these panels for its own use.

Exterior view of the Kagoshima Factory
Installation of solar panels is scheduled for completion in September 2020

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Overseas Approaches to Realizing RE100

Our New Zealand subsidiary Nelson Pine Industries Ltd., which manufactures and sells MDF (medium-density fiberboard), veneer and LVL (laminated veneer lumber), consumes the most electricity within our Group. In New Zealand, a high ratio of power composition is from hydropower, geothermal power and other forms of renewable energy, and was approximately 80% as of 2016. The New Zealand government has set out a goal for 100% renewable energy by 2035, which is when we forecast to achieve RE100.

With the momentum for implementing renewable energy growing in Southeast Asia, we are considering the installation of solar power generation systems at our other manufacturing sites in Indonesia and Vietnam. In the United States and Australia where we are primarily involved in the housing business, we plan to steadily transition to renewable energy thanks to the ability to procure renewable energy at low cost and the issuance of sufficient renewable energy certificates.

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Sustainability Report