Material Issue 2

Related SDGs

Basic Policy

Climate change has already caused a number of environmental issues that badly affect people's lives, including natural disasters in the form of heat waves, torrential rainfall, flooding, typhoons, droughts as well as sea level rise, extinction of various species, and impacts on food supply. These pose a serious threat to humankind. To mitigate the impacts of climate change, it is important to reduce greenhouse gas emissions, and we need to reduce these greenhouse gas emissions to net zero by 2050.

Actively using wood greatly contributes to a decarbonized society, as trees absorb and fix CO₂ in their growth stage, and only a small amount of CO₂ is emitted from the wood production process.

Since its 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. We will promote zoning forest management to expand the area of conservation forests that absorb carbon dioxide, while accelerating logging and replanting in working forests to promote carbon fixation. Carbon offset contributes to the decarbonization of other companies and society and to sustainable business. We will enhance the long-term carbon fixation value of wood, boost the competitiveness of domestic wood, and promote the construction of wooden buildings and the use of wood in buildings. In construction, we will contribute to the decarbonization of society as a whole by promoting decarbonized architecture through the establishment and standardization of decarbonization design methods, including life cycle carbon minus (LCCM) houses and net-zero carbon buildings, in Japan and overseas.

The Sumitomo Forestry Group provides the value of wood across its supply chain. We will steadily work on SBT-based greenhouse gas emissions reduction targets, including the achievement of RE100.

Impact on Society and the Environment

Management of Material Issue 2 (FY2025)

In Mid-Term Sustainability Targets Phase 2 (2025 to 2027), Material Issue 2 is roughly divided into the following two categories and managed through the annual action policies and measures adopted by the department in charge.

Promotion of Decarbonization (Scope 1 and 2)

Regarding Scope 1 and 2 greenhouse gas emissions, our actual emissions totaled 145,779 t-CO₂e in fiscal 2025 (a 40.4% reduction from the fiscal 2021 level), significantly below the planned target of 185,157 t-CO₂e (a 24.4% reduction relative to fiscal 2021). The Mombetsu Biomass Power Plant reduced the use of coal by 1,500 tons, leading to a reduction of about 4,000 t-CO₂e in greenhouse gas emissions.
Additionally, we proactively used renewable energy. In the domestic housing business, we reduced our greenhouse gas emissions by about 4,400 t-CO₂ by transitioning to 100% renewable energy. In the timber and building materials business, we increased our renewable energy usage rate from 31.6% to 43.1%, thereby reducing our CO₂ emissions by about 5,800 tons.
In the construction and real estate business, we acquired Metricon, which caused an increase of our greenhouse gas emissions by about 4,000 t-CO₂e.

The Sumitomo Forestry Group has set a target for its ZEH order reception rate. This effort is aimed at reducing its Scope 3 greenhouse gas emissions, especially Category 11 emissions (from the use of sold products), which represent a particularly high proportion of our emissions. The percentage of orders for ZEHs among orders received by the Group for new custom-built detached houses increased by 13.9 percentage points from 67.4% in fiscal 2021 to 81.3% in fiscal 2025. This nearly reached the fiscal 2025 target of 83%. It also recorded an increase of 2.0 percentage points from 79.3% in fiscal 2024.

We achieved results by raising public awareness of the Japanese government’s childcare green home support program, which provides subsidies for acquiring environmentally friendly houses by households with children and by young couples. Soaring utility costs and the linking of our ZEH sales to employees’ performance evaluations also provided a driving force for the popularization of ZEHs. We will continuously work to popularize ZEHs by highlighting their benefits in terms of life cycle cost as well as the financial benefits they provide to customers.

*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