Water Resources Conservation

Action Plan

Materiality SDGs Targets Issues to Address Business Area Commitment Specific Approach Performance Indicators Degree of Progress
Machinery Company
Respect human rights
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Improving water and hygiene infrastructures Water and environmental projects We will contribute to improving the hygiene environment, the development of economic activities, and the protection of the global environment through the appropriate treatment and effective use of water. Expand water and environment projects to promote the appropriate use and treatment of water and the effective utilization of resources, and reduce the environmental impact. Expand and diversify the investment portfolio in the water and environment field.

Water Field

We own a water supply service business in the U.K. and Spain and a seawater desalination business in Australia and Oman. We are continuing to work to expand our seawater desalination and water supply/sewerage business.

Policy and Basic Concept

We understand that water stress and shortages of potable water supply are an increasing global concern. Areas suffering from water shortages are expected to expand due to global economic development and population growth, as well as changes in precipitation patterns due to climate change. However, initiatives to identify new sources of freshwater have yet to see a breakthrough. For example, people have been looking for ways to turn seawater, earths largest source of water covering approximately 97.5% of all water sources, into freshwater, but at our current technology only 0.01% of seawater can be converted for human use.
Under such circumstances, ITOCHU is aware that the sustainability of water resources is indispensable for business continuity in the various businesses we are developing around the world, including those in water stressed regions. Item (5) "Conservation and Effective Use of Water Resources" of our Environmental Policy states that "We shall reduce water consumption through efficient water use and recycling, as well as be take necessary measures to appropriately treat effluents." To ensure the sustainable use of water, we are committed to raising awareness of water sustainability in our corporate culture and integrating the concern into our business decision making process. In existing businesses, we will conduct a comprehensive assessment of water consumption to improve our water efficiency and reduce water consumption.

Given these global circumstances, ITOCHU Corporation has identified its water-related business as a material area. As such, we are committed to enhancing our global capability regarding our seawater desalination business and our water supply and sewerage concession businesses, which we have been engaging in since 2014. We believe that these initiatives will allow us to contribute to solving water stress and shortage issues around the world.

Targets

ITOCHU sets numerical targets for the reduction of water consumption.

ITOCHU develops water and hygiene infrastructure, and appropriately treats and effectively utilizes water and waste. Through this, our water resource related business contributes to improving the hygiene environment, developing economic activities and conserving the global environment. We are promoting the appropriate use and treatment of water, and the effective utilization of resources through expansion of our water and environmental business. In this way, we are working to reduce our environmental impact.

In our Tokyo Headquarter building, we are implementing resource saving measures to recycle water through the creation of reclaimed water. This allows us to improve our water consumption efficiency in the office. The targets and indicators we track to manage our performance are noted in the table below.

Qualitative Targets

Item Boundary Target FYE 2020 Results and Evaluation
Risk Assessment for Investment and Financing Projects

ITOCHU Corporation

Conduct a preliminary risk assessment using the ESG Checklist for Investments, which incorporates a dedicated section to water risks.

On-Site investigation for Group Companies

ITOCHU Group

Select Group companies involved in businesses where water use is a material risk and conduct on-site investigation on the status of water management.

We selected Group companies in areas where water resources are particularly important and conducted an on-site investigation for one of them.

Compliance with Laws and Regulations

ITOCHU Group

Continued awareness and response to domestic and foreign laws and regulations related to water resources (water withdrawal / discharge)

There were no legal violations related to water withdrawal and discharge.

Enhancement of Data Collection

ITOCHU Group

Gain a better understanding of our water impacts by expanding the scope and level of detail by which we collect and monitor water-related performance data for domestic and overseas Group companies as well as overseas subsidiaries.

Targets in Water Stressed Regions

Item Boundary FYE 2020 Target FYE 2020 Results and Evaluation
Initiatives in Water Stressed Regions Risk Assessment for Investment and Financing Projects

ITOCHU Corporation

Conduct a preliminary risk assessment using the ESG Checklist for Investments, which incorporates a dedicated section to water risks.
Conduct preliminary risk assessments on water resources for projects and investments in water stressed regions where water resources are critical to operations, such as beverages, agriculture and mining.

On Site Investigation for Group Companies

ITOCHU Group

Select group companies operating in water stressed regions and conduct on-site investigation on the status of water management.

We selected Group companies in areas where water resources are particularly important and conducted an on-site investigation for one of them.

Quantitative Targets

Category Boundary Annual Target FYE 2020 Results Review Target
Period Contents
ITOCHU Corporation

Water Withdrawal (Clean Water)

Tokyo Headquarters

Total Volume Reduction Target 1%/Year

22.1% Reduction Compared to FYE 2011

March 2021

15% Reduction Compared to FYE 2011

Water Withdrawal (Clean Water)

Tokyo Headquarters

Total Volume Reduction Target 1%/Year

9.3% Reduction Compared to FYE 2019

March 2025

6% Reduction Compared to FYE 2019

Water Stressed Regions*

Water Withdrawal (Clean Water)

Water Stressed Regions

Reduction Target 1.5%/Year

NA

-

March 2025

9% Reduction Compared to FYE 2020

  • Quantitative targets for water stressed regions cover operations located in areas where the WRI Aqueduct Baseline Water Stress map identifies as "Extremely High Risk".

Structures and Systems

We assess in advance the impact on the market, society and the environment by business investment projects in Japan and overseas engaged in by ITOCHU and our Japanese subsidiaries. We do this with the ESG Checklist for Investment. (The assessment items include water usage situation.) We make requests to external specialist organizations to conduct investigations in advance for projects requiring a professional point of view. The project is then only undertaken upon confirming that there are no problems in the results of those investigations.
ITOCHU considers ensuring stable procurement and supply to be a material issue . We are committed to improving the efficiency of our water consumption and taking necessary measures depending on the abundance of water supply in certain regions. By committing to giving these due considerations, we aim to contribute to the global water crisis.

We conduct an environmental impact assessment, which includes water-related supply chain criteria, for all of the commodities we handle. We have also been conducting annual on-site investigations for Group companies since 2001 to strengthen our environmental risk management. These on-site assessments are conducted for 10 Group companies that we identify as having relatively high environmental impacts. Throughout the assessment, we engage with the senior management team to assess the company's water efficiency performance (water withdrawal and discharge) at facilities such as factories and warehouses as well as the company's compliance with environmental laws and regulations.

We manage water resource risks by using the World Resources Institute's (WRI) Aqueduct for manufacturing bases affiliated with our group.

ITOCHU Group promotes its business activities in compliance with laws and regulations in its business areas related to water usage and discharge. There were no legal violations related to water usage and discharge in FYE 2020.

Initiatives for Effective Use of Water Resources

Business Activity

Enhancing Water Efficiency at the Tokyo Headquarter Building

ITOCHU's Tokyo headquarter building has a greywater production mechanism built in since its completion in 1980. This allows for us to recycle kitchen wastewater, rainwater, spring water, and non-fecal wastewater from washbasins and office kitchenettes to utilize it as toilet water.
The amount of greywater production relies, however, on the amount of rainwater we are able to collect. Therefore, in years when rainfall is relatively scarce, we must rely more on tap water than other years. In order to minimize our reliance on tap water, we have installed water saving mechanisms such as in the toilet facility, washbasins, and the toilets themselves.

Business activities in Water Stressed Regions

Understanding Water Risks at Manufacturing Bases

ITOCHU uses the WRI Aqueduct tool developed by the World Resources Institute (WRI) to identify areas with high water stress levels at manufacturing bases affiliated with our group. With this, we have quantified the water stress levels at all our manufacturing bases in Japan and overseas and have identified areas with a high level of water stress.

Water withdrawal at sites identified as high risk in the Baseline Water Stress parameters is here.

Overall Water Risk Number of Sites
Low risk (<10%)

28

Low to medium risk (10-20%)

65

Medium to high risk (20-40%)

37

High risk (40-80%)

6

Extremely high risk (>80%)

2

Total

138

Water Related Business

ITOCHU considers our water related business to be a priority field. We are deploying seawater desalination business, water treatment business and concession agreement business, which we have been working on since 2014, on a global basis. This is to contribute to solving water problems around the world.

List of Water-related Businesses
Business Content of Initiatives
Water supply and sewer services concession agreement business

We invested in the Bristol Water Group in the UK in 2012. This made us the first Japanese company to participate in the UK water services business. The Bristol Water Group provides water services — from water source management to clean water treatment, water supply and distribution, billing and collection, and customer services — to approximately 1.2 million people.

We invested in CANARAGUA CONCESIONES S.A. in 2014. This is a company which provides water supply and sewer services in the Canary Islands of Spain. This made us the first Japanese company to participate in the Spanish water services business. CANARGUA CONESIONES S.A. currently provides water supply and sewer services to a total of 1.3 million people under a concession agreement with the local government.

Seawater desalination business

We have invested and are participating in a seawater desalination project in Victoria, Australia. This facility is capable of satisfying the water demands of approximately 30% of the population of Melbourne, Victoria. It is a project that has been supporting the stable supply of water to Melbourne since 2012.

We have invested and are participating as the largest shareholder in a seawater desalination project with a daily volume of 281,000 m3. The Oman Power and Water Procurement Company (OPWP), which is under the umbrella of the Oman government, is promoting this project in Barka in the northern part of the country. This is the largest seawater desalination project in Oman. It involves the construction of reverse osmosis membrane (RO membrane) seawater desalination facilities and surrounding facilities. These will be operated for 20 years. The project has started commercial operation in June 2018.

Seawater desalination plant, and osmosis membrane manufacturing and sales

We started delivering multiple seawater desalination plants to Saudi Arabia in the 1970s. Upon entering the 21st century, we established ACWA Power Sasakura (now: Sasakura Middle East Company) with local capital in the country together with Sasakura. We also advanced into the seawater desalination plant rehabilitation business. We established a joint venture company called the Arabian Japanese Membrane Company, LLC with local capital from Saudi Arabia and Toyobo in August 2010. This company manufactures and sells reverse osmosis membrane elements for seawater desalination.

Examples of Initiatives

Stable Supply of Drinking Water Connecting to Life
[Photo]
Seawater Desalination Plant (During Construction)
Largest Seawater Desalination Project in Oman

The demand for water in Oman in the Middle East is expected to grow by approximately 6% a year in the future. The shortage of drinking water has become a challenge together with the increase in the population and urbanization. The Barka Desalination Company in which we are participating entered into a seawater desalination business agreement for a daily volume of 281,000 m3 in Barka in the northern part of Oman toward the stable supply of water in that country in March 2016. This is a public-private partnership project promoted by the Oman government. We have constructed reverse osmosis membrane (RO membrane) seawater desalination facilities and surrounding facilities. These will be operated for 20 years. The facilities started commercial operation in June 2018. This is the largest seawater desalination project in Oman with total operating expenses of approximately 300 million dollars.
The demand for water is growing due to the increase in the worldwide population, economic growth and global warming. In response to this, we consider the water business to be a priority field. Accordingly, we are working to increase our seawater desalination and water supply and drainage businesses. We will continue to promote business that contributes to the effective utilization of water resources in regions around the world in the future.

Cooperation with Stakeholders

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 including water management). 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.

Participation in the CDP (Water Security)

We participate in the CDP, an NGO with the largest database in the world related to environmental information (e.g., water security management of companies). We do this as part of our work to proactively disseminate information about our initiatives on ESG for various stakeholders around the world. We have been answering the written inquiries of CDP Water Security since FYE 2014.

Performance Data

Volume of Water Withdrawal and Wastewater Discharge

The table below gives the water consumption, gray water production volume and wastewater discharge in the Tokyo Headquarters as well as the wastewater discharge in group companies, overseas offices and overseas group companies from FYE 2016 to FYE 2020. Our Tokyo Headquarters has set a target of reducing its water consumption by 6% compared with FYE 2019 levels. We are reducing our water consumption by introducing devices to save water by using gray water for the water used to flush toilets.

(Unit:thousand m3)

  FYE 2016 FYE 2017 FYE 2018 FYE 2019 FYE 2020
City water usage by the Tokyo headquarters❖

47

52

43

47

42

Gray water usage by the Tokyo headquarters❖

36

31

34

31

34

Wastewater discharge by the Tokyo headquarters❖

63

63

58

59

60

Wastewater discharge by group companies in Japan*

982

847

14,629

51,913

9,594

Wastewater discharge by overseas offices*

6

6

6

5

5

Wastewater discharge by Overseas group companies*

205

207

11,832

34,380

16,394

  • If we do not know the wastewater discharge, we have calculated it assuming that it is the same as the volume of tap water consumption
  • Due to the increase in the number of companies subject to aggregation, the figure for FYE 2019 has increased significantly compared to FYE 2018.

Water Withdrawal Amount by Withdrawal Source

(Unit:thousand m3)

  FYE 2018 FYE 2019 FYE 2020
Grand total of ITOCHU Group Supplied water usage, industrial water

12,952

9,560

10,649

Groundwater withdrawal (recycled)

0

0

54

Groundwater withdrawal (non-recycled)

17,118

92,899

46,710

Water taken from rivers, lakes, rainwater

43,919

31,740

26,323

Water taken from seawater

0

4,339

10,269

Others (produced water, etc.)

0

0

11

Total

73,989

138,538

94,017

Discharge Amount by Discharge Destination

(Unit:thousand m3)

  FYE 2019 FYE 2020
Grand total of ITOCHU Group Water discharged to treatment facility (e.g. sewage)

57,669

3,664

Water discharged to groundwater

9,243

5,731

Water discharged to rivers, lakes

12,992

10,464

Water discharged to sea

6,453

6,130

Total

86,358

25,989

Water Withdrawal in Water Stressed Regions

The amount of water withdrawal at sites with high risk and extremely high risk (>40%) identified using the WRI Aqueduct tool developed by WRI (World Resources Institute) is as follows.

  FYE 2019 FYE 2020
High risk (40-80%) Number of sites

5

6

Water Withdrawal (thousand m3)

188

2,201

Extremely high risk (>80%) Number of sites

2

2

Water Withdrawal (thousand m3)

583

623

Water Consumption in Manufacturing Processes that are Highly Dependent on Water Resources (Intensity)

Category Boundary Unit FYE 2018 FYE 2019 FYE 2020
Beverage Manufacturing

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

(Water Consumption m3/Production Volume kL)

Not consolidated

2.01

1.95

Environmental Costs Related to Water

Among the environmental conservation costs (FYE 2020) disclosed in the environmental accounting, associated with water are as follows:

  • Cost for water pollution prevention, wastewater treatment cost, grey water production cost, monitoring measurement cost and management cost 10,170 thousand yen
  • Research and development expenses for water risk aversion (donation to Division of Climate System Research, Atmosphere and Ocean Research Institute, the University of Tokyo) 500 thousand yen

Scope of Aggregation

○:in scope of aggregation

  Water Consumption and Wastewater Discharge
Tokyo headquarters

Osaka headquarters

Branches and business facilities in Japan*1 The number of offices including domestic branches: FYE 2016: 13, FYE 2017: 13, FYE 2018: 11, FYE 2019: 13, FYE 2020: 12

Group companies in Japan*2 The number of target companies: FYE 2016: 70, FYE 2017: 65, FYE 2018: 208, FYE 2019: 220, FYE2020: 238

Overseas offices The number of overseas offices: FYE 2016: 16, FYE 2017: 16, FYE 2018: 15, FYE 2019: 30, FYE2020: 29

Overseas group companies*2 The number of target companies: FYE 2016: 44, FYE 2017: 46, FYE 2018: 299, FYE 2019: 282, FYE2020: 286

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 (as of March 31, 2017) for FYE 2016 to FYE 2017. All consolidated subsidiaries are covered since FYE 2018 (coverage 100%).

Independent Assurance

Independent Assurance Report (1.5MB)[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.