Domestic Case Example

Supporting the Creation of a Forest and Forestry Master Plan for Itoshima City, Fukuoka Prefecture

Sumitomo Forestry is providing consulting in planning of forest maintenance and forestry development conducted by local municipalities by taking advantage of its wealth of knowledge in forest management cultivated in company-owned forests over a long period of time. As part of these efforts, we supported the creation of a Forest and Forestry Master Plan in Itoshima City, Fukuoka Prefecture as an initiative to use local forest resource since January 2016.

Positioning of the Master Plan

For methods to create this master plan, we are zoning areas that consider attributes such as the growth rate and accessibility of forests as well as the environmental conservation functions after grasping the amount of forest resources within the city limits through aerial laser measurement. Sumitomo Forestry formulated a harvesting plan and a plan for forest road networks that would be optimal to haul wood cultivated in the forest out by defining policies for conducting operations in the forest for each zone. Moreover, we also examined the systems to build to execute measures in line with this master plan.

Creation of Master Plan

For methods to create this master plan, we are zoning areas that consider attributes such as the growth rate and accessibility of forests as well as the environmental conservation functions after grasping the amount of forest resources within the city limits through aerial laser measurement. Sumitomo Forestry formulated a harvesting plan and a plan for forest road networks that would be optimal to haul wood cultivated in the forest out by defining policies for conducting operations in the forest for each zone. Moreover, we also examined the systems to build to execute measures in line with this master plan.

In 2023, based on prepared master plan, a detailed five-year logging plan was created, and support is provided to make sure this master plan is contributing to regional forestry promotion.

Comprehensive Partnership Agreement to Turn Forestry to a Growth Industry with Nagato City, Yamaguchi Prefecture

Sumitomo Forestry entered into a comprehensive partnership agreement to turn forestry and timber industry to a growth industry with Nagato City, Yamaguchi Prefecture in September 2019 for the purpose of promoting development of the forest and timber industry in Nagato City in order to revitalize the local economy.

Past Initiatives

In April 2017, the Forestry Agency selected Nagato City was selected as a region to turn forestry and timber industry to a growth industry by the Forestry Agency and has worked toward that goal. The Nagato City launched a committee to promote turning forestry and timber industry to a growth industry with various subcommittees to conduct repeated assessments through local representatives and experts toward revitalization of forestry. As a result, Nagato City and other local relevant bodies took the lead in establishing Refore Nagato in July 2020 as a general incorporated association to handle local forest management.

Effects of the Comprehensive Partnership Agreement

The partnership agreement between Sumitomo Forestry and Nagato City aims to increase local production of logs, secure and train forestry workers, and expand wood demand. By treating the forests throughout Nagato City as a single entity, we will also execute efficient forest maintenance and promote sustainable forest management to further turn forestry to a growth industry.

In 2023, we conducted on-site proof of concept, surveys, and proposals to study branding for the utilization of city-grown timber in the city, and to expand material production, and insuring demand for timber through the use of smart technology and other means.

Partnership Agreement Overview

• Promote harvest and replanting
• Stably produce and use container seedlings
• Develop and standardize container seedling production technology and train business operators
• Establish and manage organizations central to forest management
• Identify the quantity of forest resources and the intention of forest owners
• Adopt and effectively utilize ICT in forestry and wood industries
• Adopt and effectively utilize forestry machinery in forest
• Take advantage of business approaches that heighten motivation of forest owners and forestry businesses
• Secure human resources and support their retention in forestry and wood industries
• Build a cooperative supply chain with local city sawmills and other forestry businesses
• Drive demand for locally produced wood both inside and outside of the city

Promotion of Forests and Forestry DX in Maniwa City, Okayama Prefecture

Since June 2023, we have been implementing “Forestry DX Promotion Business” under contract business in Maniwa City, Okayama.

Business Purpose

Our expectation for Maniwa City, a place short of forest management personnel, is that staff of city government and forestry association will be able to autonomously use digital data to promote efficient and systematic forest maintenance. This business aims to systematize a method of creating a forest maintenance plan after setting a model region and maintaining digital data, and to spread the method to respective staffs.

Details of Initiatives

In this project, we selected a model area in Maniwa City and obtained highly accurate forest resources by laser measurement. After utilizing these data and taking disaster resilience and economic efficiency of forestry into consideration, zoning was carried out to classify roles of forests, such as forests recommended for reforestation and forests to be converted into mixed conifer and broadleaf forests. Based on the zoning results, priorities for clearcutting and thinning were set from a long-term perspective and incorporated into specific forest maintenance plans. After discussing this series of works with staff of city government and forestry association, we organized it as a method unique to Maniwa City. We hope that results of this project will accelerate forest maintenance in Maniwa City.

Started Collaboration to Provide Services for a Forest Value Creation Platform

Sumitomo Forestry and NTT Communications Corporation (NTT Com) have launched a collaboration to provide a platform service to revitalize creation and distribution of forest carbon credits under J-Credit Scheme*¹.
Under concept of “connecting forests and society”, this collaboration will utilize cloud-based services including GIS*² to integrate and manage domestic forest resource information and location information on the platform, and develop services for forest owners who are credit creators, screening organizations, and credit buyers. This is the first initiative in Japan to comprehensively support creation, screening, and transaction matching of forest carbon credits.
Sumitomo Forestry's extensive know-how in value chain related to “tree” and forest management will be combined with specialized ICT technology of NTT Com to create high-quality*³ carbon credits and promote the distribution of highly transparent*⁴ carbon credits. Prior to this service, we started a proof of concept (PoC) for credit creators and buyers in April 2023. Both companies aim at realization of decarbonization society and maximize of forest value through this collaboration.

Background and History

In addition to reduction of CO₂ emissions, carbon credit offsets are becoming increasingly important, such as start of the GX League*⁵ activity in 2050 with integration of obstetrics and governments toward carbon neutral. In August 2022, the J-Credit Scheme was revised to make it easier to obtain credit certification for afforestation after logging. As a result, it is expected that the amount of forest carbon credits issued will increase.
On the other hand, amount of forest carbon credits issued and used in Japan is small compared to credits derived from renewable energy and energy conservation. In order to revitalize the creation and distribution of forest carbon credits, it is important to solve the problems faced by the three parties: credit creators, assessment institution, and credit buyers.

Overview of this collaboration

By utilizing information from Forest Value Creation Platform to support creation and distribution of forest carbon credits, we will solve problems of credit creators, buyers, and designated operational entity.

Content of Service

• Management of information on forest management projects (forest management, afforestation and reforestation activities) including map information and images: ① ② ③ ④
• Credit issuance support for forest owners and forestry entity: ①
• Improving efficiency of examination work by bettering list of documents necessary for credit certification and monitoring after creation: ②
• Provision of highly transparent trading opportunities through disclosure of various data on credits: ③
• Promotion of matching between credit creators and buyers by improving searchability of forest carbon credits demanded by buyers: ③

*1A scheme in which national government certifies amount of CO₂ emissions reduced through introduction of energy-saving equipment and use of renewable energy, as well as amount of CO₂ absorbed through appropriate forest management as credits

*2Geographic Information System. It visualizes geographic information on a computer map (digital map) and uses it to derive information relationships, patterns, and trends in an easy-to-understand manner.

*3Forest carbon credits not only contribute to prevention of global warming by absorbing greenhouse gases, but also prevent sediment disasters, water source recharge, and conserve biodiversity.

*4Carbon credit means “maintenance of carbon sequestration in the future (persistence)” required for forest carbon credits. Through this platform, which visualizes information on a map, we monitor whether forests are subject to carbon credits purchased in this platform are properly managed and ensure their persistence.

*5A forum to drive transformation of the entire economic and social system (GX: Green Transformation), in which a group of companies actively engaged in GX will discuss about transformation of the entire economic and social system and practices for creation of new markets together with players who are taking on challenge toward the GX with for cooperation between a group of companies and the government, universities, and academic institutions.

Overseas Case Example

Corporate needs for forest management are diverse. In recent years, a considerable number of companies have been conducting forest conservation and planting activities in developing countries to mitigate the impact on forests in overseas countries and regions where they engage in business activities, and to otherwise fulfill their corporate social responsibilities.

Drawing on its knowledge of forest management in Japan and overseas, Sumitomo Forestry implements its consulting business for the restoration of degraded forests in tropical regions, the rehabilitation of biodiversity, and for the protection and cultivation of forests that takes into account local communities.

Wildlife Conservation Forest Restoration and Regeneration Business

Mitsui Sumitomo Insurance Co., Ltd. has been involved since 2005 in efforts to restore the devastated forests in the Paliyan Wildlife Sanctuary (Gunung Kidul Regency in the Special Region of Yogyakarta) in Indonesia. Sumitomo Forestry has provided associated consulting services.

During the first phase of activities to March 2011, around 300,000 trees were planted on 350 hectares of land. As a second phase of activities since April 2011, Sumitomo Forestry has been organizing agricultural societies to improve the livelihoods of the local people, providing support for an agricultural guidance program aimed at improving the livelihoods of local residents, the establishment of an inclusive organization to examine ways of managing protected forests, and an environmental education program in cooperation with local schools. As a third phase of activities since April 2016, we have been supporting additional planting in areas with few trees in protected forests as well as social forestry through local communities around protected forests. We also cultivated seedlings to be distributed as social forestry. At present, we are in the fourth phase of this project. We have established afforestation technology for 25 native species growing in the karst plateau, which has been designated as a UNESCO World Geopark. Through this project, we are supporting afforestation and nurturing of native species in surrounding communities, as well as afforestation and cultivation of native species at local elementary schools and special schools. Recently, we have been providing seedlings and know-how to local governments for afforestation of native species.

As part of this project, the Company has also opened the doors to its planted forest, seminar house and other related facilities in a positive effort to make information on its experiences and know-how on forest restoration available to the public.

Toward the Commercialization of "Tropical Peatland Consulting" and "High-Quality Carbon Credits Generation"

Sumitomo Forestry and IHI Corporation established NeXT FOREST in February 2023 to provide consulting services for appropriate management of tropical peatlands and to create high-quality carbon credits*¹ by appropriately evaluating value of natural capital, such as amount of carbon accumulated in forests and soils.

Sumitomo Forestry has developed management technologies and ground-based measurement data for forests in Japan and overseas, as well as tropical peatlands in Indonesia. IHI Corporation has developed technologies for the use of satellite data and weather observation and prediction technologies through its long experience in space development. Combining these strengths, Sumitomo Forestry and IHI have launched a consulting business to promote appropriate management technologies for tropical peatlands worldwide. We will also develop a method for precisely evaluating and monitoring amount of CO₂ absorbed by vast forests. In 2023, we developed an initial AI model for tropical peatland management. Introduction of this technology makes it possible to use AI to predict groundwater levels, which only Sumitomo Forestry's experienced engineers can do. In the future, we will use this AI model to contribute to CO₂ emissions and forest fire control in Indonesian and other tropical peatlands.
In addition to the value of carbon absorption as a measure against climate change, we will also aim to create "High-Quality Carbon Credits" by adding value as "Natural Capital*²" such as biodiversity and water cycle conservation, as well as contribute to local communities.

*1A tradable Greenhouse Gases Emissions Reduction Certificate. Emissions are considered as credits when dispersed within enterprises or globally, and the trade unit is 1t-CO₂.

*2For example, trees absorb CO₂ and provide clean water, and nature as a stock (capital) that provides valuable services.