The data collection period for fiscal 2023 is from January to December 2023.

Boundary of Greenhouse Gas Emissions (Organizational Range)

Unless otherwise noted, the greenhouse gas emissions presented in this report are for domestic and foreign consolidated subsidiaries and affiliates with substantial influence on management decision-making. Furthermore, the boundaries of calculating the greenhouse gas emissions by scope are as shown below.

• Scope 1, 2 and 3
• Domestic and foreign consolidated subsidiaries and affiliates with substantial influence on management decision-making.

Types of Greenhouse Gases Subject to Data Collection

The types of greenhouse gases collected for this report are carbon dioxide, methane and dinitrogen oxide. Moreover, hydrofluorocarbons are not subject to data collection if in trace amounts (less than 1%).

Scope 1 Emissions

The greenhouse gas emissions both inside and outside of Japan are calculated by using heat conversion factor and carbon dioxide emission coefficients stipulated in the Act on Promotion of Global Warming Countermeasures, and the heat conversion factor measured at the biomass power generation plant.

The waste used for energy at manufacturing plants (wood waste and waste plastics) and wood pellets are also converted to amount of heat, and the greenhouse gas emissions (CO₂e) are calculated using the CH₄ and N₂O emission coefficients stipulated in the Act on Promotion of Global Warming Countermeasures.

The greenhouse gases emission coefficient for biomass combustion is being considered to be changed to the coefficient used in the National Greenhouse Gas Inventory Report of JAPAN (NIR) submitted by the Japanese government under the United Nations Framework Convention on Climate Change (UNFCCC), and the emissions calculated using this factor are also disclosed for reference.

Scope 2 Emissions

The greenhouse gas emissions caused by use of purchased electricity in Japan are calculated by the carbon dioxide emission coefficient for each power provider stipulated in the Act on Promotion of Global Warming Countermeasures. In addition, the performance of January to December 2023 is calculated using the emission coefficient for each power provider for submission in 2024.

The greenhouse gas emissions due to the use of purchased heat are calculated by the emission coefficient stipulated in the Act on Promotion of Global Warming Countermeasures.

The greenhouse gas emissions caused by use of purchased electricity overseas in fiscal 2023 are calculated by the latest emission coefficient (2021) of each country according to the IEA Emission Factors 2023 issued by the International Energy Agency (IEA). However, Canyon Creek Cabinet Company in the United States uses market-based emission coefficient.

Scope 3 Emissions

Category 1. Purchased goods and services

■ Portion of outside contracts during construction of wooden detached houses

∑ (energy use during on-site construction per home × emissions coefficient by energy source) × Portion of outside contracts used in houses completed in the current fiscal year

■ Purchased products

∑ (Quantity and amount (excluding tax) of procured product or sales × Emissions per weight or per price)
Overseas companies handling housing sales: Sales per unit of housing in Japan is calculated and multiplied to the sales of each overseas company.
Domestic companies handling timber and building materials: Sales per unit of timber and building materials in the Timber and Building Materials Business is calculated and multiplied to the sales of each affiliate company.

Furthermore, emission calculations have been excluded from any sales of Timber and Building Materials Division recognized as sales made only from fees when arranging goods or services provided through another interested party.

[2022 Expansion Scope]

■ Products purchased for apartments and medium to large scale buildings, and the portion of outside contracts during construction
∑ (Total floor area of apartments and medium/large scale buildings x Emission intensity per floor area)

■ Products purchased for custom-built detached houses
∑ (Quantity and amount (excluding tax) of procured product or sales × Emissions per weight or per amount)

■ Portion of outside contracts during construction for remodeling, housing exteriors construction, and other construction work
∑ (Outsourcing cost (excluding tax) x emission intensity per amount )

■ Portion of outside contracts for forestry business
∑ (Domestic harvest volume x Intensity per harvest volume) + Σ (Overseas harvest volume x Intensity per harvest volume by country)

Category 2. Capital goods

∑ (Capital goods procurement value by all Group companies (excluding tax) × Per unit emissions by industrial division)

Category 3. Fuel- and energy-related activities (not included in scope 1 or scope 2)

■ Procurement

∑ (Energy and water use × Per unit emissions of energy source)

■ Transport from retailers

*The target of calculations is the use on operational sites such as plants

∑ (Energy use (weight conversion) × Estimated transport distance × Per unit use of fuel in ton-kilometers × emissions coefficient)

*Calculation based on transportation scenario

Category 4. Upstream transportation and distribution

■ Transport in Japan

∑ (Amount procured by each plant ×Estimated transport distance ×Per unit use of fuel in ton-kilometers × emissions coefficient)
Emissions related to owner shipments (value to report based on the energy saving law; however, this excludes waste transport)

*Waste transport is included in Category 5

■ Transport by sea

∑ (Amount of import products procured × Distance to transport by sea from the country of procurement × Per unit emissions of ship transport)

[2023 Expansion Scope]

■ Transportation of purchased products from custom-built detached houses and spec homes
∑ (Procurement volume of each house x estimated transportation distance x emission intensity of vehicle transportation)

■ Transportation of purchased products for renovation business
∑ (Procurement value × logistics cost ratio × emission intensity per amount)

Category 5. Waste generated in operations

∑ (Amount of emissions by type of waste × Per unit emissions by the type of waste or processing method)

Category 6. Business travel

Number of employees of all Group companies × Per unit emissions during business trips

Category 7. Employee commuting

■ Type of transportation: Train/bus

Number of employees of all Group companies × Per unit emissions during commute

*Per unit emissions during commute: Calculated from the emissions during commute of Group companies in Japan

■ Type of transportation: Automobile

Number of employees of all Group companies × Per unit emissions during commute by automobiles

*Per unit emissions during commute: Calculated by dividing the costs of commuting by automobiles by average unit price of gasoline of that fiscal year, and then multiplying the emission coefficient of burning gasoline

*Emissions during commute using employee-owned vehicles is included in Scope 1

Category 9. Downstream transportation and distribution

■ Wood yard pick up such as the plywood or fiberboard that is sold

∑ (Sales volume × Estimated transport distance × Per unit fuel use in ton-kilometer × emissions coefficient)

*Calculation based on transportation scenario

[2023 Expansion Scope]

■ Free on Truck for sold materials and lumber

∑ (Sales volume x estimated transportation distance x emission intensity of vehicle transportation)

Category 10. Processing of sold products

■ Plywood work and Precut factories

∑ (Sales volume of log and timber × Per unit emissions during processing)

*Per unit is based on the LCA procurement implemented in the past by the company

[2023 Expansion Scope]

■ Plywood and precut processing of logs and lumber sold by affiliates

∑ (Sales volume of log and timber × Per unit emissions during processing)

Category 11. Use of sold products

■ Emissions during habitability

∑ (Annual energy use per household × Emissions coefficient by energy source) ×　Years of residence period × Number of houses completed by construction method and region for fiscal year

*Emissions related to renovations are omitted because there is a possibility to count a portion of Scope 1 and Scope 2 emissions twice for affiliate companies engaged in the renovations business (Sumitomo Forestry Home Tech)

*Energy use per household (electricity/city gas)：
In Japan : Calculated by using the Building Research Institute's energy consumption performance calculator program
Overseas: Average of dividing amount of fuel and electricity used per state released by the government by number of households

[2022 Expansion Scope]
Σ (Total floor area of medium/large scale buildings x Years of residence period x Emission intensity per floor area)
Σ (Total floor area per apartment x Emissions coefficient per floor area) x Years of residence period x Number of houses completed by type in the current fiscal year
∑ (Annual energy use per detached house × Emissions coefficient by energy source) × Years of residence period × Number of houses completed in the current fiscal year by region
Σ (Annual energy consumption of gas appliances installed during remodeling x Emission coefficient x Useful life)

[2023 Expansion Scope]
Σ (Biomass fuel sold x emission coefficient)

Category 12. End-of-life treatment of sold products

■ Emissions during demolition

∑ (Fuel use during demolition per household × Emissions coefficient by fuel type) × Number of houses completed for the current fiscal year

*Fuel use during demolition per household (diesel/gasoline):
Estimated based on sample surveys conducted by Sumitomo Forestry related to the fuel use in model house demolition in 2006

■ Emissions during disposal (including transport)

∑(Amount of waste during demolition per household × Per unit emissions by volume reduction rate , disposal rate , recycling rate for each type of waste × Per unit emissions by type of waste or processing method) × Number of houses completed in the current fiscal year

*Amount of waste during demolition per household:
The amount of waste produced during demolition annually by Sumitomo Forestry Group for fiscal 2006 is calculated by converting the equivalent building weight of the standard plan (floor area:147m2) of Sumitomo Forestry for fiscal 2010

[2023 Expansion Scope]

■ Emissions from demolition and disposal of spec houses and rental housing

∑ (Emission coefficient at the time of demolition or disposal per floor area × total floor area in current fiscal year)

■ Emissions from demolition of medium - to large-scale construction

∑ (Emission coefficient at the time of demolition per floor area × total floor area in current fiscal year)

■ Emissions from disposal of medium - to large-scale construction

∑ (Amount of waste at the time of demolition per construction unit x emission intensity by type of waste) x Number of houses completed in current fiscal year

Category 13. Leased property (downstream)

[2023 Expansion Scope]

■ Emissions during operation of rental properties

∑ (Floor area of rental properties × emission intensity by use of building or per unit area)

■ Emissions during use of general rooms of elderly care facilities

∑ (Floor area of general rooms of rental properties × emission intensity by use of building or per unit area)

Category 15. Investments

∑ (Scope 1 and 2 emissions from companies the Group invests × Equity interest of Sumitomo Forestry Group)

*Scope 1 and 2 emissions are the public values from the company the group invests or the values released in the Act on Promotion of Global Warming Countermeasures