Basic Policy

In addition to supply function of producing wood, forests have diverse public benefits such as water source recharge, prevention of landslides, CO₂ absorption and fixation as a countermeasure to global warming, preservation of biodiversity, and recreation.

The Sumitomo Forestry Group advances sustainable forest management both in Japan and overseas to ensure that wood resources will be available in perpetuity while preserving these public benefits of forests. In addition, we are promoting acquisition of forest management certification in Japan and overseas in each business of upstream forest management, midstream timber distribution and manufacturing, and downstream wooden construction.

In our domestic forestry business, we will pursue profitability through wood production in Company-owned forests, while at the same time practicing sustainable forest management that ensures legality and takes biodiversity and local culture into consideration, and obtain and maintain 100%*¹ forest certification in forests subject to certification.

As for the overseas forestry acquisition, below are the guiding principles for selection when obtaining new forests areas.

1. Forests areas that have good relationships with surrounding villages and local communities.
2. Forest areas where HCVA*², HCSA*³ and FPIC*⁴ can be implemented, environmental risks can be eliminated, and no environmental problems were identified in the past.
3. Forest areas with third-party forest certification (FSC^®-FM is preferable and FSC-CW and PEFC certification are acceptable as well).

*1Except for land leased to Kawanokita Development and surrounding forests

*2High Conservation Value Assessment: inspection and assessment to establish conservation policies for areas specified as having high conservation value, such as rare flora and fauna habitat

*3High Carbon Shock Assessment: inspection and assessment to specify and restrict development in areas with high carbon absorption volumes so that the volume of carbon retained by forests does not decline when forest land is converted to other uses

*4Free Prior Informed Consent: Prior sharing of information and consensus formation with indigenous people and others in cases where there is likelihood that operations could impact the lands, territories or resources of indigenous people

Forest Management and Wood Usage

Forest management, certification, and operations area in FY2023

*1Forest Management (FM) certification authenticates sustainable forest management by having a third-party inspect based on objective indicators with focus on: (1) compliance with laws and system frameworks, (2) forest ecosystem and biodiversity maintenance and conservation, (3) respect for rights of indigenous people and local communities, (4) maintenance and enhancement of forest productivity

*2Pengelolaan Hvtan Produksi Lestari (PHPL) is an Indonesian certification of sustainable production forest maintenance

*3Area of planted forest was calculated using the actual number of seedlings distributed and the number of seedlings planted per hectare (The number of trees planted per hectare is planned annually for each tree species)

*4[Forest certification system] FSC^® [Certification number] SA-FM/COC-002083 [Certification body] Soil Association

*5[Forest certification system] FSC^® [Certification number] SA-FM/COC-005493 [Certification body] Soil Association

*6Managed area based on forest fund (as of February 2024) 45,600 hectares

*7Planted Forests in Australia (as of February 2024): 957 hectares

Cultivation

The Sumitomo Forestry Group manages a total of approximately 48,000 hectares of company-owned forests in Japan and a total of around 240,000 hectares of company-owned planted forest area overseas. We strive to maintain and improve the forest's public benefits by implementing appropriate management for forest growth in these forests, such as afforestation, clear underbush, pruning, and thinning.

Carbon stocks*¹ of company-owned forests in Japan at the end of fiscal 2023 were 13.84 million t-CO₂ (+120,000t-CO₂ from the previous fiscal year). Carbon stocks at overseas planted forests were 51.91 million t-CO₂ (-730,000t-CO₂*²).

*1Formula to Calculate Carbon Stock
Stem volume per hectare of forest × biomass expansion factor × (1 + ratio of underground area to aboveground area) × volume density × carbon content ×CO₂ conversion factor
Parameters such as Stem volume and expansion factor are based on own plot data for domestic forests, WSL, and MTI, while OBT and TPF refer to standard values of each country, etc. For protected forests in overseas forests, carbon fixation is assumed to be zero for non-forested and low accumulation areas such as rivers, lakes, roads, etc., and degraded forests in WSLs and MTI.

*2Decrease due to revision of method for calculating carbon storage in Indonesian production forests

Carbon Stock of Forests in Japan and Overseas

Reforestation

Harvesting and using wood alone will lead to a diminishing of forest resources that will be used to produce wood products. The Sumitomo Forestry Group therefore promotes sustainable forest management by always planting new trees after logging.

In fiscal 2023, we planted forests on 164 hectares in Japan, and on 7,326 hectares overseas. The newly planted trees will absorb CO₂ during their growth and retain it as carbon.