Material Issue 2

Related SDGs

Basic Policy

Climate change has already caused a number of environmental issues and impacted people's lives. For example, natural disasters in the form of heat waves, torrential rainfall, flooding, typhoons, droughts as well as impacts on biodiversity and food supply. These pose a serious threat to humankind. To mitigate the impacts of climate change, it is important to reduce greenhouse gas emissions. It is needed to reduce these greenhouse gas emissions to net zero by 2050.

Since wood absorbs and fixes CO₂ in the process of growth and only a small amount of CO₂ during emissions occur during production, actively using wood greatly contributes to a decarbonized society.

Since founding, the Sumitomo Forestry Group has been developing its business centered on wood, and will continue to propose further utilization of wood in the fields of forest, wood, and construction. With respect to forest, we will promote zoning forest management to expand conservation forest that absorb carbon dioxide and accelerate logging and replanting of working forests that promote carbon fixation. Carbon offset contributes to decarbonization of other companies and society, and realizes sustainable business. Regarding wood, we will promote long-term carbon fixation value of wood, enhance competitiveness of domestic wood, and promote wooden construction and wood conversion of buildings. In construction, we will contribute to decarbonization of society as a whole by promoting decarbonized architecture by establishing and standardizing decarbonization design methods such as promoting LCCM housing and net-zero carbon buildings in Japan and overseas.

The Sumitomo Forestry Group's internal and supply chains, which provide the value of wood, will steadily implement SBT-based greenhouse gas emissions reduction targets, including the achievement of the RE100.

Impact on Society and the Environment

Management of Material Issue 2 (FY2024)

In Mid-Term Sustainability Targets 2024, Material Issue 2 is divided into 19 evaluation indicators, and management is carried out by incorporating them into annual activity policies and measures of the management department. We also assess the impacts that the material issue has on society and the environment.

Promotion of Decarbonization

Regarding greenhouse gas emissions (Scope 1 and 2), the actual emissions for fiscal 2024 were 155,031 t-CO₂e (a 36.6% reduction compared to fiscal 2021), significantly exceeding the planned target of 193,779 t-CO₂e (a 20.8% reduction compared to fiscal 2021). At the Mombetsu Biomass Power Plant, the coal co-firing rate was reduced by 9.1 points over three years (2022–2024), from 14.3% to 5.2%. Additionally, the increased use of renewable energy for electricity in business operations, exceeding the planned targets, was a major contributing factor. In the Medium-Term Management Plan from 2025, we aim to maintain the coal co-firing ratio of 5.2% at the Mombetsu Biomass Power Plant and further promote the use of renewable energy in business operations to achieve RE100, targeting 162,415 t-CO₂e in the final year of fiscal 2027 (down 33.7% from the fiscal year ended March 2021).

The Sumitomo Forestry Group has set a target for ZEH order rate in an effort to reduce Scope 3 greenhouse gas emissions, especially Category 11 (use of sold products), which represents a particularly high proportion of emissions. The ratio of ZEH in the new custom-built detached houses orders increased by 11.9 percentage points from 67.4% in fiscal 2021 to 79.3% in fiscal 2024, nearly reaching the fiscal 2024 plan target of 80%. On the other hand, it decreased by 0.4 percentage points from 79.7% in fiscal 2023.

We were able to achieve certain results because we disseminated details of the "Children's Eco Housing Support Program," which provides subsidies for renovations that save energy in homes by households with children and young couples, and actively utilized the program. In addition to the tailwind from soaring utility costs, incorporating the program into employee performance evaluations within the company also contributed to these results. We will continue to promote and propose life cycle cost (LCC) benefits to our customers, and aim to expand the adoption of ZEH by including financial elements such as the preferential interest rate program for Flat 35 (Child-rearing Plus).

Promotion of Decarbonization (Scope 1, 2)

*1The calculation method was revised following the update in December 2023 of the heat conversion factor and the greenhouse gas emission coefficients stipulated in the Act on Promotion of Global Warming Countermeasures, and the new method has been used in calculating the fiscal 2024 results. The revised coefficients have also been applied to the reference values used in calculating the planned figures and the rate of change from fiscal 2021

*2The fiscal 2024 plan and results are based on the new standards following the SBT re-application in November 2024

*3Percentage of electricity purchased by the Company generated from renewable energy. Excluding offices and other facilities located in New Zealand, which is aiming to achieve RE100 by 2035 as a whole nation

Promotion of Decarbonization (Scope 3)

*1(1) local seedlings, (2) permeable paving material, (3) green wall construction, (4) rooftop greening, (5) biotope and (6) use of recycled materials

*2At the start of construction of the main unit

*3The figures are for Mombetsu Biomass Electric Power, Hachinohe Biomass Electric Power, Kawasaki Biomass Electric Power, Tomakomai Biomass Power, Kanda Biomass Energy, and Kashima Solar Power Plant. For equity-method affiliates, electricity supply is calculated according to their equity share

Utilization of Sustainable Forest Resources