Responding to Climate Change

Shareholders and Investors, Suppliers and Other Trade Partners, Local Communities, Global Environment

Basic Approach

The Sumitomo Riko Group has set greenhouse gas (GHG) reduction targets with the aim of becoming carbon neutral by 2050, and is making company-wide efforts to reduce not only its own CO2 emissions (Scope 1 and 2) but also CO2 emissions from its supply chain (Scope 3).
In terms of reducing our own emissions, we are taking a two-pronged approach, not only by switching to renewable energy sources but also by reducing production energy. We are also promoting climate change mitigation and adaptation by fully demonstrating our core technologies in manufacturing, materials, and product development. With regard to the supply chain, we are also promoting planning and implementation to reduce CO2 emissions related to the purchase, transportation, and disposal of raw materials, parts, and other materials.

Medium- and Long-Term Targets for GHG Reduction

Item Target Year CO2 Reduction Target Value
Sumitomo Riko Group Long-Term Environmental Vision 2050 2050 Achievement of Carbon Neutrality
2029 Sumitomo Riko Group Vision (2029V) FY 2029 Scope1+2  30% decrease from FY2018
Scope3  15% decrease from FY2018

2025 Sumitomo Riko Group Mid-term Management Plan (2025P)

FY 2025 Scope1+2  20% decrease from FY2018

Acquisition of SBT Certificate

In April 2021, the GHG emission reduction targets of the Sumitomo Electric Group, including Sumitomo Riko, were certified under the SBTi (Science Based Targets initiative). The target values were set as "30% reduction of Scope 1+2 by FY2030 based on FY2018 standards, and 15% reduction of Scope 3 by FY2030 based on FY2018 standards."
These targets are consistent with the Paris Agreement (Well Below 2°C: WB2°C: the level at which the global temperature increase is well below 2°C above pre-industrial levels). As the IPCC AR6 Synthesis Report indicates, further efforts to reduce GHG emissions are needed, so we have decided to advance the target achievement year by one year, with a view to the 1.5°C target in the "Environment 2029V" announced in 2023.

Endorsement of the TCFD

In June 2022, the Sumitomo Riko Group expressed its endorsement of the TCFD's recommendations. Based on the recommendations, we will actively disclose information on both the risks and opportunities posed by climate change to our business from the four perspectives of "Governance," "Strategy," "risk management," and "indicators and targets," and will strive to further enhance our corporate value through specific measures.

Efforts to Reduce GHG Emissions in Business Activities

The Sumitomo Riko Group is working to reduce GHG emissions by introducing high-efficiency production equipment, improving steam leaks, consolidating production lines, and expanding solar power, as well as proposing reductions through energy audits.

GHG Emissions (Sumitomo Riko Group)

The overall GHG emissions of the Sumitomo Riko Group in fiscal 2022 were reduced by 21.1% compared to fiscal 2017. In addition, the fiscal 2022 emissions intensity of production decreased by 32.4% compared to fiscal 2017.
*1 The denominator of the intensity is the sales amount (after elimination of internal transactions) in the scope of aggregation.
*2 In FY2022, CO2 emission coefficients for electricity are the 2019 country-specific coefficients listed in the IEA " CO2 Emissions Factors 2021".
*3 CO2 emission coefficients other than those for electricity are those listed in the "Manual for Calculation and Reporting of Greenhouse Gas Emissions" published by the Ministry of the Environment.
*4 Intensity is not included in the guarantee.

*The quantitative data in this section is assured by a third-party organization.

Energy Consumption (Sumitomo Riko Group)

Energy consumption of the entire Sumitomo Riko Group in FY2022 decreased by 7.9% compared to FY2017.
*1 Intensity is not included in the guarantee.
*2 Denominator of the intensity is the sales amount (after elimination of internal transactions) in the scope of aggregation.

Examples of GHG Emission Reductions

SumiRiko Chemical and Plastic Products (Thailand) Ltd.
①Introduction of solar power
Solar power is a representative renewable energy source that does not produce GHGs, therefore, the Sumitomo Riko Group is actively adopting it.
In fiscal 2022, solar power is being introduced at our bases in Thailand and China, bringing the total output of the Group to 10.1 MW.
SumiRiko Ohio, Inc.
②Improvement of VOC combustion equipment
At SumiRiko Ohio, Inc., installation of a precious metal catalyst in the VOC combustion equipment made it possible to lower the furnace temperature (from 825°C to 454°C), reducing the amount of gas used and thus contributing to CO2 reduction. (Effect: 1,728t- CO2/year)
[Sumitomo Riko FY2023 Environmental Awards]
Total for the five-month period from July to November
Switching off standby equipment
(Sumitomo Riko Komaki Plant)
③Switch-off activities
We have been engaged in "Switch-Off Activities" with the goal of achieving zero energy waste.
As a result of thorough implementation of Switch-Off Activities mainly at the target factory of Komaki Plant, we were able to reduce wasted energy, and CO2 emissions were reduced by approximately 40% (160 tons/year) during holidays. Sumitomo Riko received an environmental award in FY2023.
*Switch-Off Activities: Activities to reduce the consumption of energy (electricity, air, and steam) that does not contribute to production on holidays.
Energy audit
(SumiRiko Oita Advanced Elastomer Company Limited)
④Implementation of energy audit activities
In order to reduce GHG emissions in production processes, the Sumitomo Riko Group is working to develop human resources capable of independently carrying out energy audits at each base. This fiscal year, energy audits were conducted at two Group companies in Japan. After the diagnosis, we continue to support the personnel in charge of the bases and conduct human resource development.

Initiatives to Reduce GHG Emissions in Logistics

Promoting Modal Shift and Transportation Efficiency

Sumitomo Riko is also working to reduce environmental impact in logistics through efficient transportation, including "reforming transportation methods (modal shift)" and "consolidating cargo and using larger vehicles to make fewer deliveries than before (reduction in the number of deliveries)."
While sales recovered in FY2022, efforts to consolidate cargo volumes and reduce the number of incoming flights, especially from imports and suppliers, resulted in a GHG emissions intensity of 1.68 t-CO2eq/100 million yen, a decrease of 12.0% from the previous year, and a total amount of 2,974 t-CO2eq, a decrease of 4.0% from the previous year.
We will continue our efforts to reduce emissions by consolidating cargo and improving routes.
In recognition of its efforts to reduce CO2 emissions, our group has received external awards, such as the Modal Shift Award.

Related information

GHG Emissions in Logistics (Sumitomo Riko)
*1 Calculation standards for greenhouse gas emissions are based on the "Energy Conservation Law Guidebook for Shippers" edited by the Energy Conservation Measures Division of the Agency for Natural Resources and Energy, and the "Manual for Calculation and Reporting of Greenhouse Gas Emissions" of the Ministry of the Environment and the Ministry of Economy, Trade and Industry.
*2 Denominator for calculating intensity is based on non-consolidated sales of Sumitomo Riko.

GHG Emissions in the Supply Chain

In order to achieve carbon neutrality by 2050, we recognize the importance of understanding not only the direct emissions of GHG (Scope 1) from fuel combustion and indirect emissions (Scope 2) from the use of purchased electricity and other resources in our own business activities, but also indirect emissions (Scope 3) from the procurement of raw materials, use and disposal of products sold, and other sources throughout our supply chain. Based on this understanding, we have to engage in activities to reduce GHG emissions.
The GHG emissions of the entire supply chain of the Sumitomo Riko Group in fiscal 2022 were 8.0% for Scope 1+2 and 92.0% for Scope 3. Going forward, we will implement initiatives to reduce emissions, beginning with those items that are expected to have a large reduction effect.
Breakdown of CO2 emissions (Sumitomo Riko Group)
•Scope1: 79,000t-CO2eq/year
•Scope2: 237,000t-CO2eq/year
•Scope3: 3,606,000t-CO2eq/year
Category 1 = Purchased product/service
Category 11 = Use of product
Other = Categories 2-10, 12-15

Future Issues and Responses

The United Nations' latest report on global warming (the IPCC AR6 Synthesis Report), released in March 2023, strongly urges countries around the world to reduce GHG emissions more drastically and more promptly than the current situation. The Sumitomo Riko Group also believes that it is necessary to steadily advance its current GHG reduction plan, achieve reduction targets ahead of schedule, and set new targets. In order to achieve carbon neutrality, we will work not only on our own, but also with the Sumitomo Electric Group, local neighborhood companies, and companies in other industries to avoid a crisis for the entire planet.


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