Climate Change

Action Plan

Materiality SDGs Targets Issues to Address Business Area Commitment Specific Approach Performance Indicators Degree of Progress
Machinery Company
Address Climate Change (Contribute to Realization of Decarbonized Society)
Taking countermeasures against climate change Overall power generation business We will develop power plants with a good balance between renewable energy power generation and conventional power generation, thereby contributing to the development of countries and regions in a sustainable manner that is optimized for each. Pursue opportunities to invest aggressively in renewable energy power generation through analyses of countries and regions. FYE 2031: Target to achieve a renewable energy ratio more than 20% (equity interest basis) and reflect this to the future strategy.
  • We continue to operate wind power projects in foreign countries (Butendiek and Cotton Plains).
  • We continue to develop projects with Winch Energy Limited., a U.K. established company. Winch Energy Limited. specializes in handles small-scale solar power generation and distribution systems in non-electrified regions (e.g., Africa).
  • We invested in wind farms consisting of Kimball Power Plant (Minnesota, U.S.) and South Fork Power Plant (Nebraska, U.S.) in March 2020.
  • We acquired all equity interests in Bay4 Energy Services, LLC in December 2020. Bay4 Energy Services, LLC operates, maintains and provides asset management services for to approximately 1,400 solar power plants with a total capacity of 1.6 GW in the U.S.
  • Our ratio of renewable energy as a percentage of our total net generation capacity is equivalent to based on our power generation business equity capacity is currently 14.1%.
Zero emission vessels We will contribute to reduce greenhouse gas emissions in the shipping and maritime transportation fields by promoting integrated project that include the development, owning, operation of ammonia-fueled vessels and development of supply chain of ammonia fuel. Aim to materialize the pilot project which includes the development, owning and operation of ammonia fueled vessel led by Japanese industry players and development of supply chain of ammonia as an alternative marine fuel.
  • Build a value chain centered on ammonia fuel through the owning and operation of ammonia fueled vessels and establishing fuel supply chain.
  • Reduce carbon emissions from the maritime industry by promoting the spread of ammonia-fueled vessels from 2025 onward.
 * Because of new commitment, review will be conducted from the next fiscal year.
Sales of passenger cars and commercial vehicles We will achieve the eco-friendly mobility society by strengthening　businesses of electric vehicles (EVs), hybrid vehicles (HVs), vehicles with a reduced environmental impact, and those related. Contribute to spread of eco-friendly vehicles by increasing business of eco-friendly and high-efficiency products, such as EVs, HVs, vehicles with a reduced environmental impact, and related parts. Expand sales of eco-friendly products in response to the expanded lineup of EVs, HVs, vehicles with a reduced environmental impact, and similar vehicles from automakers as our business partners.
  • We have been participating in a small electric truck demonstration experiment since January 2019 in Japan.
  • We are deepening efforts with a company into which we invested in FYE 2018 in China where electric vehicles are spreading rapidly - Dishangtie Car Rental, an electric commercial vehicle rental and maintenance service.
  • We have invested in a ride sharing service company called Via (2019). This is a convenient and cost-effective means of transportation. At the same time, it also contributes to alleviating urban congestion and reducing CO2 emissions. We have been conducting a ride sharing service demonstration experiment on approximately 2,500 ITOCHU employees since October 2019 in Japan. In addition, we have introduced a system focused on transportation operators and logistics operators. We are currently promoting collaboration with a major logistics company (providing a system for new logistics services). This is improving the efficiency of movement and transportation to contribute as an aid in reducing our environmental burden.
Improving water and sanitation infrastructures Water and environmental projects We will contribute to improve the sanitary conditions, the development of economic activities, and the protection of the global environment through the appropriate treatment and effective use of water and waste. Expand water and environment projects to promote the appropriate use and treatment of water and the effective utilization of resources, and reduce the burden on the environment. Expand and diversify the investment portfolio in the water and environment field.

<Water Field>

We are developing have developed a water supply service business in the U.K. and seawater desalination business in Australia and Oman. We aim to continue contributing to stable water supply in regions through seawater desalination, and water supply/ and sewerage businesses. At the same time, we are looking to be involved in solutions-based business for water issues in each industrial sector across a range of industries.

<Environmental Field>

  • We operate four municipal solid waste incineration and power generation plants (waste to energy plant) in the U.K.
  • We are currently constructing a municipal solid waste incineration and power generation plant (waste to energy plant) and a new leachate-controlled landfill in Serbia. We aim to start full commercial operations in 2022.
  • We acquired a 20% stake in Environment Development Company Ltd. (EDCO) in November 2020. EDCO is providing integrated hazardous waste management services in Jubail Industrial City in Saudi Arabia. We are aiming to enhance the functions of our efforts that to capture strong demand for waste management services in light of intensifying environmental regulations in each the industrial sector and the growing awareness of ESG and SDGs more generally in the same way as in the water field.
Metals & Minerals Company
Address Climate Change (Contribute to Realization of Decarbonized Society)
Taking countermeasures against climate change
  • Resource recycling business
  • Mining business
  • Environmental business
  • Materials-related business
  • We will realize stable resource supply as our social mission and responsibility while fully considering its environmental impact.
  • We will contribute to climate change issues through businesses that help to reduce greenhouse gases (e.g., lighter-weight vehicles and electric vehicles (EVs)) and the stable supply of essential materials.
  • Take the lead in developing recycling-orientated business.
  • Promote efforts for the social implementation of hydrogen and ammonia as next-generation resources and raw materials in client industries (e.g. steel and power).
  • Promote businesses to contribute to the stable supply of nickel, PGM and other materials necessary in the manufacture and supply of hydrogen, green materials and energy, and storage batteries.
  • Continue to be involved in the development of technologies that contribute to the reduction of greenhouse gas emissions, including technologies for carbon dioxide capture and storage (CCS) and carbon dioxide capture and utilization (CCU).
  • Promote efforts to completely withdraw from thermal coal mine interests while continuing to realize stable resource supply as our social mission and responsibility through trading in regards to our coal business.
  • Implementation and expansion of businesses that contribute to developing lighter-weight vehicles and shifting to EVs (e.g., aluminum and copper).
  • Promote recycling-orientated business.
  • Promote efforts for the social implementation of hydrogen and ammonia as next-generation resources and raw materials in client industries (e.g., steel and power).
  • Promote examination toward technological development and commercialization to contribute to a reduction in greenhouse gas emissions, including hydrogen, green material and energy production, and carbon dioxide capture and storage (CCS) and carbon dioxide capture and utilization (CCU).
  • Strive to withdraw from thermal coal mine interests.
  • Realize efforts in businesses that contribute to developing lighter-weight vehicles and shifting to EVs (e.g., aluminum and copper).
  • We decided to conduct a commercialization survey of a by-product hydrogen project in northern Kyushu together with NIPPON COKE & ENGINEERING CO., LTD. and a Belgian maritime transportation company Compagnie Maritime Belge B.V. for the early social implementation of hydrogen.
  • We are promoting a collaborative examination on the manufacturing of metal resources in an environmentally-friendly scheme with a major resource supplier.
  • We are continuing to conduct a large overseas demonstration project to culture of euglena together with euglena Co., Ltd. as an effort to contribute to the promotion of carbon dioxide capture and utilization (CCU). We undertook this as a New Energy and Industrial Technology Development Organization (NEDO) project in October 2020.
  • We are promoting the examination of other carbon dioxide capture, utilization and storage (CCUS) technologies and various efforts that will lead to a reduction in CO2 emissions.
  • We are continuing to examine a development plan to realize the Platreef project in the PGM/nickel business where demand is expected to grow significantly due to the worldwide spread of electric vehicles and fuel cell vehicles.
  • We are contributing to the effective utilization of limited resources and the supply of environmental materials by promoting 3R+W (reduce / reuse / recycle + waste management) through our supply chains toward the realization of a sustainable society. Specifically, we are steadily promoting efforts in venous industries. This includes the reuse and recycling of FamilyMart store facilities and fixtures, the expansion and increase in sophistication of metal scrap and waste treatment, and strengthening of cooperation with the REVER HOLDINGS CORPORATION general recycling company we invested into last year.
  • We conducted a continuous review of our thermal coal mine interests, based on our thermal coal business efforts policy that we announced in February 2019. As a result, we decided to divest our Drummond thermal coal mine interests in Colombia that accounts for the majority of the ITOCHU's thermal coal interests. We did this based on our new policy to completely withdraw from thermal coal mine interests with a perspective of strengthening contribution and efforts to SDGs as per the Outline of Medium-Term Management Plan that we announced in January 2021.
  • We are currently promoting business in North America with Nikkeikin Aluminium Core Technology Company, Ltd. which we invested into in FYE 2020 for the manufacturing of aluminum parts for automobiles. In addition, we will continue to promote aluminum raw material and product trading to contribute to the development of lighter-weight vehicles.
Energy & Chemicals Company
Address Climate Change (Contribute to Realization of Decarbonized Society)
Stably supplying energy taking into account climate change and the environment Oil/gas interests and liquefied natural gas (LNG) projects We will produce resources (transition fuels) taking into account a reduction in greenhouse gases. We will provide a stable supply of energy to contribute to the development of industry and the construction of infrastructure. Work on resource development projects in collaboration with superior partners who have advanced technical capabilities and abundant experience. Pursue opportunities to participate in LNG projects with a relatively low environmental burden in fossil fuels while keeping in mind the stable supply of energy in the transition phase toward the realization of a sustainable society. We are continuing to hold discussions with superior partners to realize participation in new LNG projects.
Efforts to optimally and continuously supply renewable energy
  • Energy Storage System
  • Power & Environmental Solution
  • We will continue to stably supply the Energy Storage System that are the key to the efficient and optimal utilization of renewable energy.
  • We will aim to strengthen our Energy Storage System business chain and establish a circular model through the battery recycling business in particular.
 We will continue to sell Energy Storage System equipped with optimal charging/discharging software based on machine learning (AI) and we will establish a recycling and reuse business with repurposed batteries from EV.
  • Number of storage batteries sold.
  • Use of recycled and reused batteries.
  • We have sold a cumulative total of approximately 43,000 units (430 MWh) of energy storage systems as of the end of March, 2021.
  • Our customers are making the maximum use of the solar power they generate in their homes for their own consumption with our grid share service (AI control) that we have been equipping as standard and selling in systems since November 2018.
  • We started an effort to collect and resell rare metals (e.g., nickel and cobalt) contained in failed batteries in collaboration with an external recycling company. This is currently at the demo plant level. However, we are continuing to promote it with a view to commercialization.
  • We procured approximately 1,300 kWh and are currently building a reuse scheme in this fiscal year in our reuse battery utilization business.
Working on new fuel efforts toward the realization of a carbon-neutral society / recycling-orientated low-carbon society Production and supply of hydrogen and fuel ammonia, and procurement and supply of renewable fuels We will aim to build a production and supply structure for new fuels to contribute to the reduction of greenhouse gases on a life cycle assessment basis toward the realization of a sustainable society. Work on hydrogen and ammonia which are expected to serve as next-generation energies and fuels that do not emit carbon dioxide when burned. Also work on renewable fuels (derived from waste oils) to contribute to the reduction of greenhouses gases emitted from aircraft and large vehicles that are difficult to convert from internal combustion engines. Build a new fuel value chain to be able to realize production, efficient transportation and supply by utilizing collaboration with superior partners and our track record in development and trading. * Because of new commitment, review will be conducted from the next fiscal year.
Working on efforts in carbon dioxide capture and storage (CCS) business toward the realization of a carbon-neutral society and inclusive and sustainable economic growth Building of CO2 capture chains using CCS We will aim to build CO2 capture chains to contribute to the reduction of greenhouse gases toward the realization of a sustainable society. Refine CO2 storage technologies - an application of petroleum development technologies - and enhance access to CO2 capture chains (e.g., collection and transportation) to link them to CO2 storage technologies. Build a CO2 transportation and storage business model by uncovering CO2 capture needs at places where CO2 is emitted in client industries across our companies. * Because of new commitment, review will be conducted from the next fiscal year.
Working on efforts to optimally and continually supply renewable energy Renewable energy independent power producers (IPPs) / renewable energy-related materials procurement / dispersed power source efforts
  • We will realize a stable supply of renewable energies through the development, ownership and operation of renewable energy power plants (solar power, biomass and wind power).
  • We will stimulate renewable energy power generation inside and outside of Japan through renewable energy-related materials procurement.
  • We will realize a world where renewable energy is commonplace by spreading solar power generation as an independent power source that does not rely on the power gird through the deployment of solar power dispersed power sources.
 Expand the scale of our renewable energy assets with the stable operation and new development of renewable energy plants and establish dispersed power sources in Japan with a focus on the conversion to virtual power plants (VPP).
  • Scale of our renewable energy assets
  • Scale of our dispersed power sources
 * Because of new commitment, review will be conducted from the next fiscal year.
Food Company
Address Climate Change (Contribute to Realization of Decarbonized Society)
Taking countermeasures against climate change Fresh food field We will examine and promote measures that contribute to tackling climate change. We will utilize green energy in our processed food business.
  • New boiler and power plant operating situation.
  • Situation of the utilization of raw materials in boilers and power plants.
    • (1) Situation of the utilization of all food residue generated in pineapple processing factories.
    • (2) Situation of the utilization of non-standard products that cannot be sold as food, generated in banana plantations.
 Starting of the plant operation was delayed due to restrictions of the movement of overseas engineers due to the COVID-19 pandemic. We expect full-scale operation to start at the beginning of 2022.
General Products & Realty Company
Address Climate Change (Contribute to Realization of Decarbonized Society)
Taking countermeasures against climate change Cement substitute material such as slag We plan to expand the use of sustainable byproducts (slag) as a substitute material for the cement which is vital for construction and civil engineering. Establish continuous, stable business between Steelworks as the supplier of slag and Users. Consider investment, participation, etc. in the slag business and focus efforts on creating demand, especially in developing countries, with the aim of establishing continuous, stable business. We are currently in discussions concerning investment and participation in the slag business.

Policy and Basic Concept

Climate change is one of the most pressing global issues today. Lack of urgency and commitment to addressing climate change concerns can potentially threaten not only the earth's ecosystems, but also the survival of humankind . Given the global nature of our operations, it is a top management priority for us to address these issues such as climate change. As stipulated in item (2) of our Environmental Policy, we shall reduce greenhouse gas emissions and increase the efficiency of energy use within our own operations, as well as externally provide products and services that contribute to the mitigation and adaptation to climate change. And as such, ITOCHU will fulfil its social responsibility by promoting responses to climate change.

The TCFD* Recommendations published in June 2017 encouraged companies to effectively disclose climate-related financial information in a consistent, comparable, reliable and clear manner to promote appropriate investment decisions by investors. This comes from the observation that climate change related risks and opportunities will increase in the future. ITOCHU regards climate change as one of the most important issues facing the world. In May 2019, we publicly announced our commitment to support the TCFD recommendations. As such, we are undergoing a comprehensive review of our climate change initiatives along the core elements outlined in the TCFD recommendations: governance, strategy, risk management and business evaluation metrics (Indicator) and targets (Goal). Where possible, we are continuously updating our climate-related information disclosure to better align with the recommendations.
This undertaking is providing us with insight into what climate-related risks and opportunities are material to ITOCHU Group as a whole. Moving forward, we will leverage the TCFD recommendations and its recommended tools such as scenario analysis to prioritize climate change actions and initiatives, as well as consider strategic directions on how we wish to evolve and adapt our portfolio.

  • TCFD stands for the Task Force on Climate-related Financial Disclosures. The TCFD was established by the Financial Stability Board (FSB) at the request of the G20 to examine how to best disclose climate-related information and how financial institutions should address climate-related risks and opportunities.

Governance

[Figure]

At ITOCHU Corporation, the Sustainability Committee, which is one of our core internal committees, is assigned the highest level of executive responsibility regarding climate change issues. The Committee, chaired by our Chief Administrative Officer (CAO), deliberates and makes decisions on important items such as our policy and strategy on climate-related risk and opportunity management, greenhouse gas (GHG) emissions reduction targets, and other relevant initiatives. The CAO sits on the Board of Directors, and regularly reports on developments in our sustainability program to the Board, allowing the Board to have oversight of our social and environmental sustainability initiatives. The CAO also participates in the HMC and the Investment Consultative Committee, providing climate-related input into the business strategies and investment strategies we pursue.

ITOCHU Corporation's climate-related policies and company-wide action plans are planned and drafted by the Sustainability Management Division, and following the CAO's approval, is finalized upon deliberation at the Sustainability Committee. The Committee also assigns relevant responsibilities to the ESG Officers and Managers in each unit to carry out aspects of the plan.
We furthermore regularly engage in dialogue with internal and external stakeholders such as through the Sustainability Advisory Board to gain a better understanding stakeholder expectations and general trends. Feedbacks received through these engagements are leveraged in updating our climate change program.

Committee and Reporting to the Board of Directors Frequency of Meetings and Reports Main Items Deliberated or Reported on
(FYE 2019 to FYE 2021)
Sustainability Committee
  • Usually held 1 ～ 2 times a year
  • Results
    Once in FYE 2019
    2 times in FYE 2020
    Once in FYE 2021
  • FYE 2019
    Announcement of support for the TCFD recommendations
  • FYE 2020
    Disclosure based on the TCFD recommendations, calculation of Scope 3 GHG emissions
  • FYE 2021
    GHG reduction target, Disclosure based on the TCFD recommendations
Reporting to the Board of Directors
  • Periodic reports are made at least once a year
  • Results
    Once in FYE 2019
    2 times in FYE 2020
    Once in FYE 2021
  • FYE 2019
    Announcement of support for the TCFD recommendations
  • FYE 2020
    Disclosure based on the TCFD recommendations, calculation of Scope 3 GHG emissions
  • FYE 2021
    GHG reduction target, Disclosure based on the TCFD recommendations

Strategy

ITOCHU considers the climate change problems as one of the important challenges facing the world. Accordingly, we are examining the transition and physical risks concerning climate change. We then utilize scenario analysis of the TCFD recommendations as a tool when examining our business strategies and portfolio reorganization.
We analyze scenarios in the following steps.

Climate Change-related Risks and Opportunities

Major Climate Change-related Risks and Opportunities
Short, Medium and Long-term
Climate-Related risks and Opportunities		 Impact of Climate-related Risks and Opportunities on the Organization's Business, Strategy, and Financial Planning
Transition Risks and Opportunities Policy and Legal Risks If countries around the world take a more aggressive approach in their GHG emissions reduction targets and subsequently strengthen laws and regulations regarding corporate emissions, fossil fuel demand may see a sharp decrease
Technology Risk Business opportunities that contribute to combatting and adapting to climate change are expected to increase (e.g. renewable energy)
Market Risk Demand for certain products and services may decrease due to market risks related to public policy, laws and regulations, or technological advancements (e.g. clean technology)
Physical Risk Acute Risk Operations may be impacted or damaged by increased occurrences of abnormal weather patterns (e.g. droughts, floods, typhoons, hurricanes, etc.)
We may be able to strengthen customer retention and/or attraction by strengthening our supply chain resilience to extreme weather patterns and promoting stable supply as a value proposition
Chronic Risk Our capability to maintain and increase the quantity of agricultural and forestry-related harvests, as well as products manufactured using these yields, may be impacted by climate-related changes such as increasing temperatures and likelihood of droughts.

Scenario Analysis

Scenario Selection

We conducted a scenario analysis for our business segments that are likely to be heavily affected by regulatory and physical climate change impacts, regardless of the size of the segment business. Selection of business segments with high climate-related risk exposure was conducted by referencing the TCFD recommendations' list of non-financial industries potentially most affected by climate change and the transition to a lower-carbon economy (i.e. energy, transportation, materials and buildings, and agriculture, food, and forest products).
Following the first round of scenario analyses we conducted in FYE 2019, which were conducted for the coal business and the power generation business, in FYE 2020 we decided to cover the oil and gas upstream development business due to its exposure to transition risks (i.e. public policy and legal risks). In addition, in FYE 2020, we newly selected the Dole business and the pulp business as projects subject to scenario analysis due to their high exposure to climate-related physical risks.

Definition of Scenario Groups

We established the two scenarios below with reference to the International Energy Agency (IEA) and Intergovernmental Panel on Climate Change (IPCC) when examining scenario analysis.

Scenario 4℃ <2℃
Image of society

The policies of countries, such as the Intended Nationally Determined Contributions (INDC) established in accordance with the Paris Agreement, are implemented. Nevertheless, the average temperature at the end of this century rises by 4℃. This is a society in which there is a high likelihood climate change (e.g., a rise in temperature) will impact business.

The average temperature rise is kept below 2℃ until the end of this century. Bold policies and technological innovation are promoted. This is a society in which social changes due to the transition to a de-carbonized society are highly likely to impact business.
Reference scenarios Transition aspects
  • Stated Policies Scenario
    (IEA WEO2019)
  • Reference Technology Scenario
    (IEA ETP2017)
  • Sustainable Development Scenario
    (IEA WEO2019)
  • 2℃ Scenario
    (IEA ETP2017)
Physical aspects
  • RCP8.5 (IPCC AR5)
  • RCP2.6 (IPCC AR5)
Risks and opportunities

Risks and opportunities in terms of physical aspects will be more likely to surface

Risks and opportunities in terms of transition aspects will be more likely to surface
  • The IEA WEO 2019 Sustainable Development Scenario is the following scenario: The world works to keep the rise in temperature to less than 2℃ – if possible, 1.5℃. At the same time, this is a scenario in which the targets of everyone being able to use energy and improving air pollution are achieved.

Scenario Analysis Results

We identified the mid-to-long term (short-term to beyond 2030) risks and opportunities relevant to each business type, broken down by items pertaining to procurement, business operations, and market demand. We then prioritized these risk and opportunity items by severity of impact. Regarding items of high importance, we identified variables that have a large impact on the transition and physical aspects and conducted a scenario analysis using financial models that reflect the conditions. Financial impacts were analyzed by measuring the potential impacts of climate change, as well as the outcomes of mitigation and counter-measures we plan to implement. The quantitative information referenced in the scenario analysis leverages data from scenario-based forecasts provided publicly such as by the IEA, but in doing so also reflects our own assumptions and expectations. We are committed to upholding the best analytic accuracy where we can, and will continue to improve upon our scenario analysis approach moving forward.

1. Businesses for Which Transition Risks Are the Main Issues

The main issues for fossil fuel-related businesses are transition risks in the <2℃ temperature band scenario.

Company /
Business Profile		 Machinery Company /
Power Generation Business		 Energy & Chemicals Company / Energy (Crude Oil, Gas and LNG) Development Business
Timeframe By 2040 By 2050
Temperature band scenario <2℃ scenario
Main risks and opportunities Transition
  • Risk: Thermal power generation costs may increase due to the impact of carbon taxes and mandatory capture and storage of carbon dioxide (CCS).
  • Opportunity: The competitive advantage of renewable energy may increase. This also includes technological progress and cost reduction.
  • Opportunity: It may be necessary to increase investment in storage batteries and grids for a significant shift to renewable energy.
  • Risk: Countries may introduce regulations on fossil fuels (e.g., carbon taxes). This may lead to global demand for crude oil shrinking.
  • Opportunity: Demand for LNG may increase centered on Asia as a transition fuel to realize a low-carbon society and as a fuel to support industrial development. This is because it has a relatively low environmental impact for a fossil fuel.
  • Opportunity: Demand for new energies other than fossil fuels (e.g., hydrogen, ammonia and renewable fuel) may increase.
Physical
  • Risk: Power generation facilities may be damaged by natural disasters (abnormal weather).
  • Risk: Upstream development is focused on projects with excellent partners (e.g., major oil companies in the Middle East and Russia). Accordingly, the impact on outdoors work may be limited because of the measures. We also assume the possibility of increasingly serious climate disasters due to climate change will be low.
Business environment under the scenario
Business impact assessment

Transition risks will greatly squeeze income with carbon taxes and carbon capture and storage (CCS) costs. Therefore, the income of thermal power generation may decrease. However, cumulative income is expected to improve due to an increase in renewable energy sales and a decrease in carbon taxes and CCS costs by switching to measures emphasizing renewable energy.

Analysis according to the EBITDA indicator (%)*

[Figure]

Global demand for crude oil is expected to shrink under the 2℃ scenario. Nevertheless, we may be able to maintain earnings by seizing opportunities in the worldwide increase in demand for LNG and the increase in demand for new energies (e.g., renewable fuels). (We have examined multiple scenarios with respect to energy price fluctuations up to 2050.)

Analysis according to the EBITDA indicator (%)*

[Figure]
Measures and policies
Business opportunities
  • We will aim to achieve a renewable energy ratio of more than 20% (equity interest basis) by FYE 2031. We will reflect this in future efforts.
  • We will not develop any new coal-fired power generation business. Part of the reason we will do this is to contribute to the development of a sustainable society.
  • We will accelerate our shift to new energies in our energy business portfolio. We will do this by seizing business opportunities through pursuing synergies with group companies and participating in initiatives in the new energies (e.g., hydrogen, ammonia and renewable fuels) field.
  • We will strengthen efforts on carbon capture and storage (CCS) toward the realization of a carbon-free society in addition to shifting to new energies.
  • We will carefully consider switching to excellent assets with the intention of improving the efficiency of our assets in relation to upstream oil and gas development. We will do this in consideration of the environment.
  • Earnings before interest, taxes, depreciation and amortization (This refers to earnings calculated by adding interest expenses and depreciation expenses to earnings before tax.)
Efforts in the Coal Business

The business environment and measures under the 2℃ scenario in the coal business is as below.

Business environment under the scenario The amount of thermal coal used may decrease in response to technological innovation and regulatory trends under the 2℃ scenario.
Measures and policies
  • We will not acquire new thermal coal mining business.
  • We have already sold our interests in Drummond to realize a carbon-free society ahead of others in the industry even in our existing thermal coal mining business. We did this from the point of view of strengthening our contribution and efforts for SDGs. We will aim to sell our other thermal coal interests by FYE 2024 to completely withdraw from thermal coal interests.
  • We will strongly promote efforts toward technological development and social implementation to contribute to a reduction in greenhouse gas emissions. This includes carbon capture and storage (CCS) and carbon capture and utilization (CCU). On the other hand, there will continue to be a need for thermal power generation as regulated power supplies and backup power supplies for the time being for the large-scale spread of renewable energy. Therefore, we will continue to fulfill our duty to stably supply resources through thermal coal trading.
2. Businesses for Which Physical Risks Are the Main Issues

The main issues for agriculture- and forestry-related businesses are physical risks in the 4℃ scenario.

Company /
Business Profile		 Food Company /
Dole Business		 General Products & Realty Company /
Pulp Business
Timeframe By 2030
Temperature band scenario 4℃scenario
Main risks and opportunities Transition
  • Opportunity: An expansion in the introduction of recycled clean energies (biogas power generation and biomass boilers) utilizing our own organic resources (including pineapple, banana and other food residues, and waste factory liquids) and renewable energies (e.g., solar power generation) may help to lower carbon levels and protect water resources. This may lead to us obtaining the support of consumers with a high level of environmental awareness and to improving our brand value. Furthermore, we may then secure a price advantage when carbon taxes and emission trading systems are introduced.
  • Opportunity: If a carbon tax is introduced in Finland, we will have a competitive advantage. That is because we already use 100% biomass energy in pulp manufacturing.
Physical
  • Risk: There may be a reduction in yields due to abnormal weather (e.g., typhoons and droughts) in banana and pineapple plantations in the Philippines.
  • Risk: The suitable areas for growing trees change for each species with a rise in temperature. In addition, the amount produced decreases depending on the type of tree and region (pine trees in Finland and spruce trees in the south of the country).
  • Risk: Heavy machinery farming in the winter in Finland is premised on frozen soil. However, the soil may soften due to the rise in temperature and harvesting costs may increase.
Business environment under the scenario
Business impact assessment

Decreases in yields due to abnormal weather will be compensated for by an increase in unit yields through improved production methods. Moreover, we will start pineapple production business in West Africa (e.g., Sierra Leone) as part of the diversification of our producing areas in preparation for weather risks. This will allow us to increase earnings.

Analysis according to the EBITDA indicator (%)*

[Figure]

The amount produced is expected to decrease in some areas due to the rise in the global average temperature. Nevertheless, we can continue to improve earnings by increasing the amount of pulp we produce with the augmentation of facilities in afforestation regions where the amount produced is expected to increase and by curtailing the rise in harvesting costs with measures against soil softening.

Analysis according to the EBITDA indicator (%)*

[Figure]
Measures and policies
Business opportunities
  • We will diversify producing areas in preparation for weather risks (e.g., Sierra Leone in West Africa).
  • We will increase unit yields by improving production methods (e.g., improving seedling cultivation methods and introducing irrigation facilities).
  • We will use drones and ICT (agricultural chemical spraying location identification, yield prediction and timely and accurate fertilization) to increase the efficiency of production.
  • The impact on the amount produced will vary between the north and south in Finland. Therefore, we will enhance monitoring of yield changes and examine a flexible production structure including the construction of a new factory.
  • We will give training on the use of special heavy machinery for soft soil and examine even more efficient methods for harvesting in Finland.
  • Earnings before interest, taxes, depreciation and amortization (This refers to earnings calculated by adding interest expenses and depreciation expenses to earnings before tax.)

Impact on Existing Strategies and Future Initiatives

As a result of the scenario analyses we conducted on projects likely to be subject to high climate-related risks, we identified no critical impacts that warrant drastic changes in our business strategy. We are also aware that the scope of our scenario analysis comes with limitations, and that we engage in various other business activities subject to climate-related risks worldwide. However, in the current social and environmental climate, we believe that the impact of risks associated with these individual business activities on the Group's overall performance is limited.

Moving forward, we plan to analyze the transition and physical risks of climate change on all projects in our company. We will then further identify and prioritize businesses and projects where particularly significant impacts are anticipated. Based on findings from this exercise, we plan to devise specific measures and initiatives to address climate-related risks across ITOCHU as a whole.

Risk Management

As a global company, ITOCHU continuously monitors the risks and opportunities relevant to its business. This requires following the developments of climate change-related public policies in various countries, abnormal weather conditions around global business sites, and long-term changes in average temperatures. Climate change risks and opportunities are identified based on information on climate change regulations, abnormal weather, and other information obtained through risk analysis process within the Group, including internal companies. Identified climate change risks are incorporated into the overall risk management framework as one of our 18 key risks (Environmental & Social Risk) and are considered and evaluated during business & investment decision process. Thereafter, we respond to them by building information management and monitoring systems at each department responsible for managing these risks on a consolidated basis.

Identification of Climate Change Risks

At ITOCHU Corporation, the Sustainability Management Division and each company collects information on climate-related risks and opportunities in our relevant geographies such as those related to regulatory changes, abnormal weather, technology trends and clean tech market trends. Findings are shared with internal companies, Group companies, and subsidiaries in the supply chain to assess the potential size and scope of the risks and opportunities. Finally, we engage with the Sustainability Advisory Board to receive advisory input, and finally report on our overall findings to the Sustainability Committee, which identifies key climate-related risks upon deliberation.

Corporate Risk Management

The ITOCHU Group is exposed to various risks (e.g. market risk, credit risk, and investment risk) due to the wide-ranging nature of its business. In order to manage these risks, we have established various internal committees and departments. We have also developed an enterprise risk management system and relevant protocols to manage risks comprehensively and individually, such as investment standards, risk and transaction limits, and reporting and monitoring systems.

As part of risk management at the corporate level, the Sustainability Committee engages with other internal committees and responsible departments on the identified climate change risks, such as those related to natural disasters, and ESG investments. The Committee focuses on gathering input on the company's climate change policy, its response plan, its awareness and assessment of climate change impacts on its enterprise risks (e.g. market risks, credit risks, investment risks, etc.), and the cultural integration of risk management systems. Based on deliberations at the Committee regarding the input it gathered, the Sustainability Committee chairman (the CAO) reports to the Board of Directors on major developments more than once a year.

Please click here for risk management relating to company-wide business including climate change.

Business Investment Management

ITOCHU has established a multilayered decision-making process that seeks to realize swift decision-making by delegating discretionary power to each internal company, while pursuing investment returns and controlling investment risks. Depending on the size and terms of a project, a review is conducted at the internal company level or by the HMC (Headquarters Management Committee) and the Investment Consultative Committee. In all cases, ESG risk assessments, including climate change risk, are incorporated into considerations when making investment decisions in the business investment process, which includes climate change risks.

As a member of the HMC and the Investment Consultative Committee, the CAO (Chief Administrative Officer), who chairs the Sustainability Committee, participates in the screening of projects that exceed the authority of the company president. This system reflects the content of deliberations at the specific stage of climate change risk and at the assessment stage of climate change risk for company-wide risk management.

Details are here.

Metrics and Targets

ITOCHU sets target values for a reduction in our GHG emissions and electricity consumption. The targets are as below.

GHG Emissions Reduction Targets

  • Achieving net zero GHG emissions by 2050 to comply with the Japanese government's target. In addition, aiming to offset CO2 to zero by 2040 by actively promoting businesses that contribute to the reduction of GHG emissions.
  • Complying with the Japanese government's interim target by achieving a 40% reduction from 2018 levels by 2030.
[Figure]
  • The Japanese government's target of a "46% reduction" from the 2013 level by 2030 is a "39% reduction" based on the year 2018.

Energy Consumption Reduction Targets

  FYE 2021 Results Single Year Target Target for the Year Ended March 2022
Electricity Consumption of Tokyo and Osaka Headquarters, Branches in Japan and Other branches and business facilities in Japan

Reduction of 4.6% compared with FYE 2020 levels

Reduction of at least 1% annually

Reduction of 30% compared with FYE 2011 levels

Reduction of 47% compared with FYE 2011 levels

ITOCHU Group's Clean-tech goals

ITOCHU has set the following targets for 2030 for the ITOCHU Group's clean tech-related businesses and projects.

  • In the power generation business as a whole, we aim to increase the ratio of renewable energy based on equity capacity from 14.5% in FYE 2021 to over 20% by FYE 2031.
  • By the end of FYE 2031, we aim to sell Energy Storage System (ESS) that functions as a regulator in stabilizing renewable energy supply, with a total electric power capacity 5GWh or more.

Details are here.

Initiatives

Initiatives in Business tackling Climate Change

Toward Sustainable Plantation Operation in Response to Climate Change

[Photo]
[Photo]
Banana Field

ITOCHU acquired the Asian fruits and vegetables business and processed foods business, which supplies canned food and beverages around the world, from Dole Food Company in the U.S. in April 2013.

Since this acquisition, typhoons, drought, and damage from disease and harmful insects have struck the Philippines – our largest production base of major products, which resulted in decrease of the production volume of bananas compared with that of the pre-acquisition. We have continuously looked to restore and increase this production volume by taking various countermeasures such as introduction of new irrigation facilities, expansion of farmland, measures against damage from disease and harmful insects for bananas. In addition, we have invested in facilities for plantations and reviewed cultivation methods for pineapples to improve productivity. We have also been promoting the diversification of production areas to prepare for the risk of unpredictable weather. Furthermore, we have proactively improved our business management through the selection and concentration of businesses and products, and the disposal of unprofitable businesses.

We will continue to aim to be the largest agricultural product integrator in Asia. We will achieve this by developing a structure to increase production of bananas and pineapples in the Philippines.

We are proactively introducing recycled clean energies (biogas power generation and biomass boilers) utilizing our own organic resources (including pineapple, banana and other food residues, and waste factory liquids) and renewable energies (e.g., solar power generation). This serves as a measure against climate change necessary for sustainable business operations. We plan to operate renewable energy facilities with a total capacity of 16 MWe using biogas and solar power generation by the end of FYE 2022. We aim to provide environmentally-friendly products adapted to the low-carbon society of the future.

Utilization of Solar Power Generation in a Joint Venture with Teys in Australia

Teys Australia Condamine introduced 1,034 solar panels in 2015. This has made it possible to generate approximately 506,000 kWh of power annually. Accordingly, approximately 50% of the power used in this facility comes from renewable energy. The introduction of solar power generation has reduced CO2 emissions by approximately 395 tons. Consequently, a reduction in CO2 emissions of approximately 49% has been realized compared with before the introduction of solar power generation.
We also procure beef to be slaughtered and processed from Teys – our joint investment partner in Australia. This firm has formed sustainable operations. It extracts methane gas generated in the slaughter process and reuses it as heat for its factory.

Full Switchover to Real CO2-free Electricity at Tokyo Head Office

ITOCHU is sourcing its real CO2-free electricity, together with a Non-Fossil Fuel Energy Certificate showing the environmental value of not emitting CO2, from TEPCO Energy Partner, Incorporated, which supplies electricity to the Tokyo Head Office since January 2020. The Non-Fossil Fuel Energy Certificate includes the tracking information (information about type of energy sources and power plant location) of Maebashi Biomass Power Plant (Maebashi, Gunma Prefecture), which is operated by a subsidiary of Kandenko Co., Ltd., and is used at the Tokyo Head Office building in combination with purchased electricity. This initiative can also be used to prove compliance with "RE100," a global initiative of businesses committed to 100% renewable electricity, in response to the global trend towards decarbonization.

Details are here.

Contributing to Emissions Reductions in the Value Chain through Projects and Investments

Renewable Energy Initiatives

ITOCHU is working to resolve social issues through investments in power generation assets and storage batteries utilizing renewable energy sources such as geothermal and wind power, which are expected to grow in the future as key players in energy supply. Please refer to this page for details.

CCS (Carbon Dioxide Recovery and Storage)

We recognize that CCS is an indispensable technology for achieving a decarbonized society. We have invested in Japan CCS Co., LTD. which is conducting a demonstration test in Tomakomai, and are pursuing the commercialization of CCS technology. (By November 2019, cumulative injected CO2 volume reached the target volume of 300,000 tons, and it is currently in the monitoring phase of such injected CO2 under the reservoir.)

Moreover, ITOCHU has entered into an agreement with the Australia-based company Mineral Carbonation International ("MCi") to collaborate on projects to apply carbon utilization technology. MCi's carbon utilization technology produces calcium carbonate, magnesium carbonate, Silica and other useful solid products by combining by-products of the steelmaking process (slag), coal ash produced by thermal power plants or other industrial wastes containing magnesium or calcium such as waste concrete with CO2 to permanently lock away CO2 in a solid form. Carbon utilization has attracted attention from the steel, cement and electricity industries as a technology that could accelerate the global trend towards decarbonization. The materials such as the calcium carbonate manufactured using this technology also serve as raw material for cement, concrete and other construction materials, and are thus expected to cut CO2 emissions in the building, construction and manufacturing industries.

Initiatives for the Tokyo Metropolitan Government Program to Prevent Global Warming

ITOCHU submitted a plan to the Tokyo Metropolitan Government to reduce the CO2 emissions in our Tokyo Headquarters by approximately 15% from the reference value (average value from FYE 2003 to FYE 2005) over five years from FYE 2016 to FYE 2020 based on the Ordinance on Environmental Preservation. Our emissions in FYE 2020 were 6,089 t-CO2. This is an approximately 42% reduction compared to the reference value.

The documents we have submitted to the Tokyo Metropolitan Government so far are as follows.

  • In addition to the Tokyo Headquarters, the adjacent commercial facility of Itochu Garden is also subject to the Greenhouse Gas Emission Reduction Plans submitted to the Tokyo Metropolitan Government.

Cooperation with Stakeholders

Participation in TCFD Consortium

[Logo]

In May 2019, ITOCHU Corporation announced its support for the TCFD, which encourages companies to disclose financial information related to climate change. We also participated in the TCFD Consortium established on May 27, 2019 by Ministry of Economy, Trade and Industry (METI), Ministry of the Environment (MOE), and the Financial Services Agency (FSA) as a body for promoting discussion and deliberation among companies and financial institutions supporting the TCFD mission. By participating in this Consortium, we will engage in the appropriate disclosure of ITOCHU business opportunities and risks associated with climate change.

Initiative Participation (Activities Through Business and Industry Groups)

We are participating in the Global Environment Subcommittee of the Committee on Environment and Safety — an environment and energy related committee of the Japan Business Federation (Keidanren). We are working to realize an environmental policy compatible with the economy (e.g., through promotion of voluntary action plans, and measures for global warming, waste and recycling and environmental risks). We are also participating in the Global Environment Committee of the Japan Foreign Trade Council. We are striving to build a low-carbon society, construct a recycling-orientated society, and to support environmental related laws and regulations. Climate change-related targets set out in the Global Environment Committee are as follows.

2030 Reduction Targets for Domestic Business Activities (Trading Industry)

  • In FYE 2031, we will strive to reduce unit power consumption (Electric power consumption per floor area for the entire company) by 15.7% from FYE 2014 level. (Reestablished July 2018)
  • If we decide the direction regarding such as climate change in various industry groups we participate, we express an opinion in line with our Basic Policy on Sustainability in the decision process, and when it is different from our policy, we will strive to be in line with our policy.

Participation in CDP (Climate Change)

ITOCHU is actively providing information on ESG initiatives to various stakeholders around the world. As part of these initiativess, we participate in the CDP, an NGO that is recognized worldwide as a global standard for corporate environmental information disclosure. Since FYE 2014, we have been responding to the CDP's climate change questionnaire.

Participation in COOL CHOICE

[Logo]

ITOCHU participates in the Ministry of the Environment-led COOL CHOICE climate change campaign aimed at realizing a decarbonized society. We are striving to adjust our air conditioning in the summer and winter and to switch off unnecessary electricity. We also conduct environmental conservation activities from the things that all employees can do in their daily lives. For example, we encourage separation of waste in offices and promote recycling.

Performance Data

Scope of Aggregation

○:in scope of aggregation

Energy Consumption GHG Emission
Energy Consumption in the Japanese Bases of ITOCHU Energy Consumption Attributable to Business Facilities Electricity Consumption Heat and Steam Consumption Fuel Consumption GHG Emissions from Business Facilities Scope1 Total Emissions Breakdown by Greenhouse Gas Type
Tokyo headquarters

○

○

○

○

○

○

○
Osaka headquarters

○

○

○

○

○

○
Branches and business facilities in Japan*1 The number of offices including domestic branches:
FYE 2017: 13, FYE 2018: 11, FYE 2019: 13, FYE 2020: 12, FYE 2021: 11

○

○

○

○

○

○
Group companies in Japan*2 The number of target companies: FYE 2017: 65, FYE 2018: 208, FYE 2019: 220, FYE 2020: 238, FYE 2021: 232

○

○

○

○

○
Overseas offices The number of overseas offices: FYE 2017: 16, FYE 2018: 15, FYE 2019: 30, FYE 2020: 29, FYE 2021: 49

○

○

○

○

○
Overseas group companies*2 The number of target companies: FYE 2017: 46, FYE 2018: 299, FYE 2019: 282, FYE 2020: 286, FYE 2021: 274

○

○

○

○

○
Exclusion Companies expected to be sold within the next five years held for investment management purposes are not included in the scope of the data. Moreover, non-manufacturing site offices with 10 or fewer employees are quantitatively insignificant. Accordingly, they are not included in the scope of the data.
  1. The other business facilities cover business facilities owned or leased by ITOCHU (except facilities for residences).
  2. The group companies in Japan and overseas cover consolidated subsidiaries directly invested in by ITOCHU for FYE 2017. All consolidated subsidiaries are covered since FYE 2018 (coverage 100%).

Energy Consumption

Energy Consumption in the Japanese Bases of ITOCHU
  FYE 2017 FYE 2018 FYE 2019 FYE 2020 FYE 2021
Purchased and consumed non-renewable fuel (Unit:MWh)

765

610

525

691

640
Purchased non-renewable power (Unit:MWh)

30,282

29,558

29,306

28,747

27,320
Other purchased non-renewable energy (e.g., steam, heat and cooling water) (Unit:MWh)

8,299

8,206

7,605

7,385

7,401
Generated renewable energy (solar power generation*) (Unit:MWh)

58

58

51

54

60
Energy consumption cost total (Unit:million yen)

564

576

404

537

571
  • Solar Power Generation
    ITOCHU has installed solar panels on the roof of our Tokyo Headquarters and the roof of the adjacent ITOCHU Garden (ex CI PLAZA). These panels started generating power in March 2010. The power generation capacity of the solar panels installed is a total of 100 kW. This is equivalent to the power for 30 regular houses (calculated at approximately 3.0 kW per house). All the clean energy generated is used in our Tokyo Headquarters. This is equivalent to an amount of power used in lighting 3.5 floors in our Tokyo Headquarters (during instantaneous maximum power generation).

(Unit:GJ)

Energy Consumption Attributable to Business Facilities
  FYE 2017 FYE 2018 FYE 2019 FYE 2020 FYE 2021
Tokyo headquarters

134,076

130,977

127,824

126,135

121,290
  • The figures for the Tokyo Headquarters are calculated based on the Tokyo Metropolitan Ordinance on Environmental Preservation.

Electricity Consumption

Our electricity consumption and CO2 emissions attributable to business facilities in FYE 2017 to FYE 2021 are as follows. We have been introducing energy saving facilities (e.g., air conditioner inverters and desktop LED stands). At the same time, all employees are switching off unnecessary lighting and office machines. We also started a trial of a morning-focused working system for regular employees working in headquarters and branch offices in Japan from October 2013. The formal introduction of this in May 2014 has led to a reduction in our electricity consumption.

(Unit:Thousand kWh)

  FYE 2017 FYE 2018 FYE 2019 FYE 2020 FYE 2021
Tokyo headquarters*1

9,331

9,200

9,178

9,055

8,685
Osaka headquarters

434

409

396

384

356
Branches and business facilities in Japan

1,561

1,476

1,440

1,319

1,190
Total of domestic bases of ITOCHU corporation★

11,326

11,084

11,014

10,759

10,231
Group companies in Japan

471,432

798,054

878,025

1,204,830

1,248,258
Overseas offices

3,087

2,224

2,118

2,098

3,515
Overseas group companies

143,485

500,777

590,175

447,462

437,030
Grand total of ITOCHU Group◆

629,329

1,312,139

1,481,382

1,665,148

1,699,034
  • This data has been calculated based on the Ordinance on Environmental Preservation for the Tokyo Headquarters and based on the Act on the Rational Use of Energy for the Osaka Headquarters, branches in Japan, other branches and business facilities. However, companies expected to be sold within the next five years held for investment management purposes are not included in the scope of the data. Moreover, non-manufacturing site offices with 10 or fewer employees are quantitatively insignificant. Accordingly, they are not included in the scope of the data.
  1. ITOCHU is sourcing its real CO2-free electricity together with a Non-Fossil Fuel Certificate since January 2020. The Non-Fossil Fuel Certificate includes the tracking information of Maebashi Biomass Power Plant (Maebashi, Gunma Prefecture) and is used at the Tokyo Head Office building in combination with purchased electricity.

Heat and Steam Consumption

Heat and Steam consumption of the entire Group is as follows.

(unit: GJ)

  FYE 2018 FYE 2019 FYE 2020 FYE 2021
Industrial steam

513,564

494,035

541,932

488,429
Non-industrial steam

17,706

13,998

14,452

15,462
Hot water

10,566

4,781

4,860

5,710
Cold water

106,416

82,139

75,227

67,618

Fuel Consumption

Fuel consumption of the entire Group is as follows.

FYE 2018 FYE 2019 FYE 2020 FYE 2021
Kerosene (Unit:kL)

4,001

4,468

2,609

3,387
Light oil (Unit:kL)

35,577

39,362

41,790

48,460
Gasoline (Unit:kL)

10,774

12,598

12,759

12,688
Heavy oil A (Unit:kL)

25,699

18,289

20,432

18,969
Heavy oil B and C (Unit:kL)

11,711

16,551

25,942

25,546
Coal (Unit:t)

341,192

333,176

315,148

325,431
Petroleum gas Liquefied petroleum gas (LPG) (Unit:t)

6,321

6,614

11,966

11,294
Liquefied petroleum gas (LPG) (Unit:1,000 m3)

2,454

496

472

469
Liquefied petroleum gas (LPG) (Unit:kL)

–

–

186

1,209
Petroleum hydrocarbon gas (Unit:1,000 m3)

2,247

1,860

340

3
Combustible
natural gas		 Liquefied petroleum gas (LPG) (Unit:t)

1,645

3,161

5,698

4,524
Other combustible natural gas (Unit:1,000 m3)

5,762

14,565

14,115

12,761
Town gas etc. Town gas (Unit:1,000 m3)

204,481

33,552

26,692

46,793
Other gas (Unit:1,000 m3)

0.017

158

242

404

Greenhouse Gas (GHG) Emissions

GHG Emissions Attributable to Business Facilities

(Unit:t-CO2e)

FYE 2018 FYE 2019 FYE 2020 FYE 2021
Total of all Japanese bases in ITOCHU★ Scope1

98

91

151

152
Scope2

7,174

6,969

6,740

6,466
Scope1+2

7,272

7,060

6,891

6,619
ITOCHU Group◆ Scope1

1,299,390

1,213,395

1,202,508

1,522,339
Scope2

617,818

771,204

835,916

799,562
Scope1+2

1,917,209

1,984,599

2,038,424

2,321,901

GHG Emissions by Each Business Facility (Scope1+2)

(Unit:t-CO2e)

  FYE 2017 FYE 2018 FYE 2019 FYE 2020 FYE 2021
Tokyo headquarters

6,459

6,307

6,168

6,089

5,846
Osaka headquarters

221

208

172

135

121
Branches and business facilities in Japan

821

757

720

667

651
Total of domestic bases of ITOCHU corporation★

7,501

7,273

7,060

6,891

6,619
Group companies in Japan

340,559

1,280,241

1,361,130

1,526,279

1,611,214
Overseas offices

2,238

1,674

2,769

1,523

2,860
Overseas group companies

98,427

628,021

613,640

503,731

701,209
Grand total of ITOCHU Group◆

448,725

1,917,209

1,984,599

2,038,424

2,321,901
  • GHG emissions of the ITOCHU Group are calculated according to the Management Control Standards (the control approach).
  • The data has been calculated based on the Tokyo Metropolitan Ordinance on Environmental Preservation for the Tokyo Headquarters and based on the Act on the Rational Use of Energy and the Act on Promotion of Global Warming Countermeasures for the Osaka Headquarters, branches in Japan, other branches and business facilities and group companies in Japan. (We have calculated this data by employing the basic emissions coefficients of the power companies.)
  • From FYE 2021, the data has been calculated based on the CO2 conversion coefficient according to the data of 2018 by country of the International Energy Agency (IEA) for overseas offices and overseas group companies. The data before FYE 2019 has been calculated based on the average of the CO2 conversion coefficient between 2010 and 2012.
  • From the FYE 2019 data, GHG emissions other than CO2 from energy consumption, are also included. GHG emissions other than CO2 from energy consumption from group companies that emit more than 3,000 t-CO2e per year are aggregated and disclosed.
  • We initiated collecting data on non-energy related greenhouse gases emissions on a step-by-step basis, starting with FYE 2019 data. Specifically, we started including "CH4 and N2O emissions associated with pig breeding and excrement management" and "HFC emissions due to leaks from refrigerating equipment, etc." with FYE 2019 data, and started further including "CH4 emissions associated with wastewater treatment", "CH4 emissions associated with composting and landfilling waste" and "N2O emissions associated with the use of fertilizer on farms" with FYE 2021 data.
  • The calculation of GHG uses the GHG protocol developed by WRI (World Resources Institute) and WBCSD (World Business Council for Sustainable Development).

Intensity Figures

CO2 Emissions from ITOCHU's Domestic Sites and ITOCHU Group (Intensity Unit)

(Unit:t-CO2e)

  FYE 2017 FYE 2018 FYE 2019 FYE 2020 FYE 2021
Per employee
(Total of domestic bases of ITOCHU corporation)

1.737

1.660

1.622

1.596

1.538
Per one square meter of all floor space
(Total of domestic bases of ITOCHU corporation)

0.064

0.063

0.061

0.068

0.057
Per MWh of Electricity Consumption
(Grand total of ITOCHU group)

0.524

0.506

0.524

0.502

0.471
  • The denominators of Intensity figures per one square meter of all floor space are as follows:
    FYE 2017 116,528m2, FYE 2018 115,905m2, FYE 2019 115,842m2, FYE 2020 101,545 m2, FYE 2021 114,920 m2
CO2 Emissions by Beverage Manufacturing Companies (Intensity Unit)
Business Profile Company Name (Boundary) Unit FYE 2018 FYE 2019 FYE 2020 FYE 2021
Beverage Manufacturing

Clear Water Tsunan Co., Ltd.
(Soft drink manufacturing and sales business)

(CO2e/production capacity kL)

Non-consolidated

0.091

0.081

0.088

Scope1 Total Emissions Breakdown by Greenhouse Gas Type

(Unit:t-CO2e)

Global Warming Potential (GWP) FYE 2019 FYE 2020 FYE 2021
Scope1 Total emissions

-

1,213,395

1,202,508

1,522,339
Energy consumption carbon dioxide(CO2)

-

1,161,002

1,158,283

1,233,868
Total GHG emissions other than CO2 from energy consumption (t-CO2e)

-

52,393

44,225

288,471
Breakdown non-energy consumption carbon dioxide (CO2)

1

0

0

0
methane (CH4)

25

0

1,459

118,224
dinitrogen monoxide (N2O)

298

17,932

18,439

119,278
hydrofluorocarbon (HFCs)

7,390～10,300

34,461

24,327

50,969
perfluorocarbon (PFCs)

-

0

0

0
sulfur hexafluoride (SF6)

-

0

0

0
nitrogen trifluoride (NF3)

-

0

0

0
  • GHG emissions other than CO2 from energy consumption from group companies that emit more than 3,000 t-CO2e per year are aggregated and disclosed.
  • We initiated collecting data on non-energy related greenhouse gases emissions on a step-by-step basis, starting with FYE 2019 data. Specifically, we started including "CH4 and N2O emissions associated with pig breeding and excrement management" and "HFC emissions due to leaks from refrigerating equipment, etc." with FYE 2019 data, and started further including "CH4 emissions associated with wastewater treatment", "CH4 emissions associated with composting and landfilling waste" and "N2O emissions associated with the use of fertilizer on farms" with FYE 2021 data.
  • The global warming potential (GWP: Global Warming Potential) for the calculation of GHG emissions other than CO2 from energy consumption is based on GWP 100 of the IPCC 4th Assessment Report (AR4).
  • Greenhouse gas emissions other than CO2 have several tens to several tens of thousands of times of greenhouse effect compared to CO2, and t-CO2e is used as a unit for expressing that greenhouse effect equivalent to CO2.
  • In addition to the above greenhouse gas, group companies emit 8,967 t-CO2e as HCFCs, etc.

Costs Associated with Climate Change

Among the environmental conservation costs disclosed as a part of our environmental accounting, costs associated with climate change (FYE 2021) are as follows:

  • Administrative costs of the power generator installed in the Tokyo Headquarters: 1,770 thousand yen
  • Research and development (R&D) expenses for climate change risk aversion (donation to Division of Climate System Research, Atmosphere and Ocean Research Institute, the University of Tokyo): 500 thousand yen

Initiatives Toward Environmental Distribution

ITOCHU is engaged in green distribution to reduce our environmental impact. This is to comply with the Act on the Rational Use of Energy (Energy Conservation Law).

Carbon Dioxide Emissions from Distribution

The carbon dioxide emissions generated due to contracted transport as shippers of ITOCHU is as follows.

CO2 Emissions Attributable to Distribution★
[Graph]

Energy Saving Measures for Distribution

We have established a company-wide common energy saving measures policy as below in regards to energy saving measures for distribution. On top of that, we have formulated concrete measures for each division company.

Transportation Method Selection

Promotion of the use of railroads and domestic shipping
Measures to Improve Transportation Efficiency

Use of transportation with the freight of multiple shippers on one vehicle and mixed loading
Selection of appropriate vehicle types
Increase in the size of vehicles
Optimal transportation routes
Improvement in the loading ratio
Cooperation with Freight Transportation Operators and Recipients of Freight

Review of transportation plans and frequency
Concrete Measures
  1. Transportation Method Selection
    • We will survey and analyze the conditions of long-distance truck transportation. We will then consider a change to the transportation method from business that can be switched to railroad and domestic shipping transportation that has a relatively low environmental impact.
  2. Measures to Improve Transportation Efficiency
    • We will survey the conditions of transportation. We will then consider the selection of appropriate vehicle types and the selection of appropriate transportation routes to further improve loading efficiency and to reduce the energy consumption rate.
  3. Cooperation with Freight Transportation Operators and Recipients of Freight
    • We have decided to check the initiatives toward environmental distribution with internal criterion concerning the appointment of distribution companies. We recommend the appointment of certified companies.
    • We are building a cooperative system together with our suppliers in addition to distribution companies to realize (1) and (2) above.

Independent Assurance

Independent Assurance Report (2.3MB)[PDF]: The data below marked with a ★ is independently assured through KPMG AZSA Sustainability Co., Ltd. This assurance conforms to the International Standard on Assurance Engagements (ISAE) 3000 and 3410 of the International Auditing and Assurance Standards Board (IAASB).
★: Total electricity consumption and total CO2 emissions attributable to the domestic bases of ITOCHU corporation (business facilities of the Tokyo Headquarters, the Osaka Headquarters, branches in Japan, domestic branches and other business facilities), and the waste volume, waste non-recycled, waste recycled, recycling rate, water consumption, gray water production volume and wastewater volume for the Tokyo Headquarters, and CO2 emissions attributable to distribution of ITOCHU Corporation.

Independent Assurance Report (2.3MB)[PDF]: The data below marked with a ◆ is independently assured through KPMG AZSA Sustainability Co., Ltd. This assurance conforms to the International Standard on Assurance Engagements (ISAE) 3000 and 3410 of the International Auditing and Assurance Standards Board (IAASB).
◆: Total electricity consumption and GHG emissions attributable to ITOCHU Group in total.