In December 2018, Mitsui declared its support for the Task Force on Climate-related Financial Disclosures (TCFD). In accordance with the recommendations of the TCFD and as a responsible company operating globally, we actively promote information disclosure with an awareness of stakeholder demands.

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Disclosure Based on TCFD Recommendations (December 2023) (PDF 595KB)

Climate Change-Related Discussions

There were 14 major climate change-related discussions by the Sustainability Committee over the past three years.

Sustainability Advisory Board

We have established the Sustainability Advisory Board (formerly the Environmental and Societal Advisory Committee), a group comprising external experts in societal and environmental topics such as climate change. The Sustainability Committee uses information and advice from Sustainability Advisory Board members in their deliberations. In fiscal year ended March 2023, the Committee held a meeting to discuss climate change initiatives.

Please refer to the links below for more information on Mitsui's Sustainability Management Framework and the activities of the Sustainability Committee.

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• Our Approach to Sustainability: Sustainability Governance and Oversight
• Our Approach to Sustainability: Sustainability Committee
• Our Approach to Sustainability: Sustainability Advisory Board

Since declaring our support for the TCFD recommendations in December 2018, we have been engaged in a step-by-step scenario analysis process to enhance the resilience of our strategy by responding flexibly to changes in the global business environment. Traditionally, business units have analyzed risks, countermeasures, quantitative impact, etc. for their selected businesses and discussed them at the Sustainability Committee; however, in response to its growing importance, we have integrated scenario analysis into the formulation process for the business plan starting the fiscal year ending March 31, 2023. By incorporating scenario analysis into the business planning process, which is approved by the Board of Directors after reporting and deliberation by the Executive Committee, the results of scenario analysis are confirmed and deliberated by management and reflected in the business plan and business portfolio strategy.

We are conducting scenario analysis in short- (0-1 year), medium- (1-10 years), and long-term (10-30 years) timeframes up to the year 2050. We conduct scenario analysis of transition risks(*1) and opportunities with reference to the scenarios set out in the World Energy Outlook (WEO) published by the (International Energy Agency) IEA. In addition, with reference to the RCP (Representative Concentration Pathway) used by the IPCC (Intergovernmental Panel on Climate Change), Mitsui has conducted analysis of investment assets above a certain value by surveying the impact of physical risks(*2) based on natural disasters that have occurred over the last five years.

*1. "Transition risks" refer to risks caused by changes in policy/legal regulations, technology development, market trends, market evaluation, etc.
*2. "Physical risks" refer to the risk of physical damage caused by increases in natural disasters and abnormal weather arising from climate change.

• IEA Stated Policies Scenario (STEPS): Scenario that reflects the current policy targets of each country
• IEA Announced Pledges Scenario (APS): Scenario that assumes all of the government’s announced pledges are implemented
• IEA Net Zero Emissions by 2050 Scenario (NZE): Scenario for achieving the goal of limiting global warming to less than 1.5°C compared to pre-Industrial Revolution level
• IPCC RCP 8.5 scenario: Scenario in which the world's average temperature rises by around 4.0°C by 2100

Mitsui is engaged in a wide range of business in countries and regions around the world, and we view the diverse risks and opportunities presented by climate change as important factors that we must consider when formulating our business strategies. We are identifying the short-, mid-, and long-term risks and opportunities that accompany climate change, and we review them periodically. We also review each segment in response to changes in the macroenvironment and trends, and adjustments in our business portfolio, along with other changes in the internal and external environment, and reflect them in our business strategy in a timely manner.

Transition Risks	Policy and Legal Risks	Shift to the use of decarbonized energy due to various national and regional policies (changes in energy and power mix) Government-imposed restrictions on greenhouse gas emissions, with carbon taxes and cap-and-trade emissions-credit schemes
	Technology Risks	Changes in supply and demand in markets for existing commodities and services or the obsolescence of existing production equipment and facilities accompanying the introduction of new technologies geared toward climate change or the development and dissemination of alternative products
	Market Risks	Changes in demand for fossil fuel-related products and services and deterioration in value of Mitsui's ownership interests Fund procurement risks due to the adoption of decarbonization policies by financial institutions and insurance companies
Physical Risks	Acute Risks	Interruption of the operations of project companies in Australia and the United States, etc., due to cyclones and hurricanes
	Chronic Risks	Impact of global warming on agricultural and marine products or impediments to operations accompanying rising sea levels

Further, for each of our segments we have analyzed the internal and external environment and identified risks and opportunities.

Segment	Risks	Opportunities
Mineral & Metal Resources	Decrease in demand for raw materials (iron ore, metallurgical coal) due to increase in Electrical Arc Furnace usage in anticipation of efforts to reduce GHG Increase in the cost of environmental measures and carbon taxes Increase in the difficulty for obtaining environmental permits	Expansion of recycling businesses in response to circular economy Increase in demand for raw materials for secondary batteries, copper, and aluminum accompanying the spread of vehicle electrification
Energy	Decrease in demand for fossil fuel Increase in the cost of environmental measures	Expansion of market for LNG and gas businesses that have a relatively low environmental impact Expansion of CCS/CCUS* business Expansion of market for biofuel, hydrogen/ammonia fuel, and other next-generation energy Expansion of business for Energy Solutions Business, including emissions credits and energy management businesses
Machinery & Infrastructure	Change in the social conditions surrounding coal-fired thermal power businesses Change in the supply and demand of existing businesses accompanying the creation of new technologies and new markets Impact of geopolitical risks and extreme weather on cargo transportation volumes	Development of renewable energy generation businesses Increase in demand for power trading and grid stabilization services that help address rising power system volatility Circular economy and Expansion of ZEV (Zero Emission Vehicle) business Expansion of business related to the shipping business using next-generation fuels
Chemicals	Change in demand for fossil fuel-derived chemicals Change in industrial structures due to strengthening of environmental restrictions	Expansion of recycling business in anticipation of a recycling-based society Increase in demand for biochemicals and energy-saving materials Increase in demand for forests as a source of absorption and emission credit businesses
Iron & Steel Products	Decrease in demand for materials and drilling equipment for the energy sector	Reform of steel production, processing and supply chains responding to decarbonized society Increase in demand for maintenance businesses to contribute to extending life of infrastructure Increase in demand for lighter vehicles and highly efficient motors accompanying spread of electric vehicles
Lifestyle	Change in food-producing regions accompanying global warming, etc. Impact on supply chains of extreme weather	Rising need for securing food resources and securing stable food supplies
Innovation & Corporate Development	Reduction hedging demand for fossil fuel-related commodities	Increase in demand for asset management business targeting natural capital and energy transition assets Increase in hedging demand for commodity trading contributing to a sustainable society

* CCS = Carbon Capture and Storage; CCUS = Carbon Capture, Utilization and Storage

We use multiple climate change scenarios for the selected business to assess the impact of transition risks on financial planning and business strategies, and use the results to investigate necessary countermeasures.

Selection of Business for Scenario Analyses

In consideration of scale of business operations and climate change impact, upon categorizing business as "high", "medium" or "low" priority, we have selected "high" priority business as targets for scenario analyses.

Results of Scenario Analysis

The results of scenario analysis for the ten businesses selected for this study are shown below. The scenarios referred to in the scenario analysis are organized into Current and Transition Scenarios as follows.

• Current Scenario: A scenario in which current climate related initiatives of each country are maintained, demand (mainly in emerging countries) for fossil fuels and other resources that emit GHGs remains to a certain extent, and business practices which could impact climate change continue (STEPS, etc.).
• Transition Scenario: A scenario in which there is a slowdown in demand for fossil fuels and other resources that emit GHGs, and a rapid increase in demand for renewable energy and other resources, as a result of the international development of advanced initiatives and systems to address climate change as well as a shift towards energy conservation and electrification driven by widespread decarbonization and technological innovation (APS, NZE, etc.).

The impact of the Current Scenario and the Transition Scenarios on the selected businesses from the present day to 2050 is shown in the following three levels. In addition, for the Upstream Oil and Gas Business and LNG Business, Metallurgical Coal Business, and Thermal Power Generation Business, which we have judged to be particularly important in terms of scale of business operations and climate change impact, we have analyzed the impact on net income for the fiscal years ending March 2030, 2040, and 2050 and presented them in three levels based on our assumed base case, taking into account our understanding of the business environment and various scenarios. The analysis is based on internal carbon pricing, and pricing is set with reference to definitions and prices published by external organizations such as the IEA, taking into account factors such as the country/region of the subject assets, and time frame. The 2°C scenario is equivalent to approximately $1-$200/ton for developed countries and approximately $0-$200/ton for other regions over the period to 2050. For the 1.5°C scenario, prices are generally $1-$250/ton for developed countries and $0-$200/ton for other regions.

Impacts on the Selected Businesses

• : Positive impact on business
• : No change or slight impact on business
• : Negative impact on business

Quantitative Impact on the Selected Businesses

Large: -USD300 million or more
Medium: -USD100million or more but less than -USD300 million
Small: - less than USD100 million

Upstream Oil and Gas Business and LNG Business

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FY March 2024 Q1-3（April-December）Financial Results Presentation Material (P.26 Energy: Main Businesses) (PDF 6.29MB)

Metallurgical Coal Business

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FY March 2024 Q1-3（April-December）Financial Results Presentation Material (P.24 Mineral & Metal Resources: Main Businesses) (PDF 6.29MB)

Thermal Power Generation Business

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Power Generation Businesses (Gas-Fired Power Generation Business, Coal-Fired Power Generation Business, Oil-Fired Power Generation Business) as of March 31, 2024 (PDF 381KB)

Iron Ore Business

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FY March 2024 Q1-3（April-December）Financial Results Presentation Material (P.24 Mineral & Metal Resources: Main Businesses) (PDF 6.29MB)

Offshore Oil and Gas Production Facilities Business

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Gas Distribution Business

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LNG Shipping Business

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Renewable Energy Business

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Power Generation Businesses (Renewable Energy Business) as of March 31, 2024 (PDF 381KB)

Next-Generation Energy Business

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Forest Resources Business

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We operate a wide range of businesses in various countries and regions, which may be affected by the manifestation of physical risks if climate change causes an increase in extreme weather events.
Accordingly, when we invest in new businesses, in order to ensure appropriate risk management, we conduct physical risk analysis while taking advice from outside experts as necessary. We also review the effectiveness of countermeasures onsite at each business after making an investment.

In the event that physical risks materialize, while placing the highest priority on protecting human lives, we have established crisis management policies for business continuity that take into consideration coexistence with local communities. We have also taken measures to mitigate and adapt to risks, such as obtaining insurance coverage, securing multiple suppliers, enhancing our facilities. We will continue to assess the adequacy of our risk management measures on a regular basis. To review the appropriateness of our current risk response, we utilized an analysis tool developed by ERM, an environmental consulting firm, to analyze the impact of physical risks on our portfolio companies in the future, as follows.

The location of the main assets of the selected investments and the physical risks of the 4°C scenario in 2030 are as follows.

The results of our analysis indicate that the four physical risk hazards that will have a particularly significant impact on the Company in 2030 and 2050 under the 4°C scenario are extreme heat, wildfires, water stress & drought, and tropical cyclones. The number of companies at high risk of extreme heat will be approximately 80% of the 65 companies analyzed in 2050. With regard to risk of wildfire and water stress/drought, nearly half of the companies analyzed will be at high risk in 2050, and the number of companies at high risk of wildfires will approximately double. Many companies are currently at high risk of tropical cyclones, and although there will only be a small increase in the number of companies at high risk, there is concern that the frequency and magnitude of their occurrence will make damage more severe. A summary of each physical risk hazard and the measures to address them are shown below, with the risk level determined by the number of companies at high physical risk.

• 4 companies or less
• 5-14 companies
• 15-24 companies
• 25-34 companies
• 35 companies or more

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We identify company-wide material risks across organizational boundaries and implement a wide range of initiatives to hedge and control risks. For this purpose, Mitsui has established an integrated risk management system that centrally manages company-wide risks, through the Portfolio Management Committee under the Executive Committee. Under the integrated risk management system, the Corporate Staff Divisions, which act as the secretariat, manage risks from a company-wide perspective. Material risks we assume include those related to the environment, society and governance, such as risks from climate change, compliance, and infectious disease, disasters, terrorism, etc. We position risks regarding climate change (physical and transition) in particular as second in importance only to business investment, geopolitical, and country risks and are taking corresponding measures. For details of our risk management structure, please refer to the following page.

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Risk Management

For Mitsui & Co., which operates in countries and regions around the world, the policies of each country and region related to climate change have a significant impact on the profitability and sustainability of each of our businesses. We use the climate-change scenarios published by the IEA and other organizations when we analyze scenarios involving businesses that have significant impacts, to gain an understanding of business impacts both in terms of risk and opportunity, and when considering investment projects, M&A, and other business decisions, we determine business priorities and take these scenarios into account.

In conducting business, we have put in place a system to ensure that utmost consideration is given to the environment and society in projects at all stages, including at the launch of a new business, during operations, and even at the time of withdrawal from the business. Our Sustainability Committee discusses response policies and measures regarding environmental and social risks (including climate-change risk), then reports to the Executive Committee and the Board of Directors, which then applies them following approval.

1. Scope 1 and 2, and Scope 3 Category 15 (Investments) of the Company and its consolidated subsidiaries (including un-incorporated joint ventures):
   Formulating Mitsui's goal to achieve net-zero emissions as our Vision for 2050, and aiming to halve GHG impact by 2030 compared to the fiscal year ended March 2020, as the pathway to achieve the above goal.
2. Scope 1 and 2 of the Company and its consolidated subsidiaries:
   Halving GHG emissions by 2030 compared to the fiscal year ended March 2020.
3. The ratio of renewable energy in our power generation portfolio:
   Raising the ratio of renewable energy to over 30% by 2030.

*: un-incorporated JVs = un-incorporated joint ventures

Results

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(Unit: Million t-CO2e)

*un-incorporated Joint Ventures

Breakdown of GHG emissions by target/forecast boundary

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(Unit: Million t-CO2e)

*1 Forecasts based on investment plan in the 2026 Medium-term Management Plan and the Oct 2023 financial results announcement (other than targets for halving GHG impact by 2030 and halving Mitsui/consolidated Scope 1+2).
*2: Baseline year emissions include projected increase in emissions from thermal power plants upon becoming fully operational for which investment decisions had already made as of the fiscal year ended March 2020.
*3: Vs the 43 million t-CO2e of the baseline year.

GHG impact refers to the amount of our emissions minus the amount of absorption and offset and the GHG emission reduction contribution amount we achieved through our business activities. We not only focus on reducing our own emissions, but also on contributing to the transition to a decarbonized society through our business activities. Going forward, we will accelerate our company-wide initiatives by setting specific goals, including our reduction contribution amount.
Net zero emissions in 2050 means to reduce our emissions to effectively zero by subtracting only the amount of absorption and offset from our emissions. The reduction contribution amount is not included in the 2050 target figures, though we will continue to actively contribute to GHG emissions reductions for society as a whole through our business.

We promote emission reduction (Reduction) and reduction contribution (Opportunity & Transition) in a variety of ways, taking advantage of the cross-industrial business structure that only a sogo shosha can offer.

Path to Halving GHG Impact

We aim to halve our GHG impact from 34 million tons in the fiscal year ended March 2020 to 17 million tons in the fiscal year ending March 2030. In the fiscal year ending March 2026, the final year of the current Medium-term Management Plan, the GHG impact is expected to be approximately 27 million tons. For the period from the fiscal year ending March 2024 to the fiscal year ending March 2026, we expect the increase in emissions of approximately 3 million tons due to the projected emissions from thermal power plants upon becoming fully operational for which investment decisions had already been made as of the fiscal year ended March 2020 and other factors as well as the decrease in emissions of approximately 7 million tons due to the asset divestment of thermal power plants and other factors.

We will aim to achieve our goal of “halving GHG impact by 2030” through a robust combination of emission reduction and reduction contribution projects.

*These figures are based on assumptions as of the end of November 2023 and are subject to change.
*The amount of reduction contribution in this graph includes the figures corresponding to the amount of absorption and offset volume.
*Reduction contribution is not included in “Net-zero emissions”.
*MTMP means Medium-term Management Plan.

Reduction Contribution/Absorption Amount

The Reduction contribution amount is a quantification from a life cycle assessment perspective of the amount of GHG emissions (Scope 1 and Scope 2) by third parties that were reduced and avoided by providing products and services that contribute to the reduction of GHG emissions in society through our business, compared to the amount that would have been emitted if existing products and services had been provided (baseline). The GHG emissions reduction contribution amount is calculated with reference to the guidelines of the WBCSD (World Business Council for Sustainable Development) and the Japan LCA Society, etc. However, since there are no unified calculation rules at this time, we will continue to review the calculation method and disclosure as appropriate, based on international discussions and industry trends. The actual result for FY Mar/2023 is 2,702 thousand tons in total (including Absorption Amount). The breakdown and calculation formula are as follows.
In calculating the reduction contribution amount, we use actual results and publicly available information to the extent possible, but in cases where it is difficult to obtain such information, we make our own assumptions and establish scenarios to the extent reasonable for our calculations.

Reduction Contribution Amount

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Absorption Amount

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(Unit: Million t-CO2e)

• Mitsui and consolidated subsidiaries (including un-incorporated JVs) are calculated according to the control standards (as with Scope 1 and Scope 2)
• Where the same emission source is clearly double-counted among the companies included in the scope of the data, only one is included in the calculation
• In cases where the final product into which an intermediary product is processed cannot be determined, it is excluded from the calculation
• Approx. 60% of total Scope 3 emissions (excluding Category 15) are derived from the trading of third-party products and approx. 40% from the production/manufacturing/processing of products at Mitsui
• Trading of third-party products is where Mitsui buys products produced/manufactured/processed by third parties to sell to processors, end user, etc. It does not include transactions with "traders" where the processor or end user cannot be determined
• Category 1 and 11 energy-related emissions are calculated in line with the International Petroleum Industry Environmental Conservation Association (IPIECA) guidelines
• For ferrous raw materials (iron ore and metallurgical coal), Category 10 emissions from production of crude steel are calculated proportionally by weight
• Category 1, 10, and 11 segment breakdowns only include the relevant segments

Scope 3 represents other companies’ emissions and requires initiatives throughout the entire value chain. Together with our partners and customers, Mitsui is advancing initiatives in every industry in our broad range of businesses, from upstream to downstream, to cut emissions throughout society.

Steel production value chain

* Methanol, ammonia, etc.

Gas value chain

*1 Floating storage and regasification unit

*2 A business providing customers with Carbon Capture and Storage as a Service

Automotive value chain

* Zero Emission Vehicles such as EVs and FCVs that emit no CO2 or other GHG when running

At Mitsui, we introduced the internal carbon pricing system in April 2020 for the purpose of improving the medium to long-term resilience of businesses emitting large volumes of GHG, and to encourage the development of projects that are effective at reducing our, and society's, GHG emissions. Regarding new business projects, in projects with potential risks or opportunities from GHG regulations, etc., we have added analysis of the potential impact of a 2°C and 1.5°C scenario to the project screening factors, as well as the adequacy of countermeasures in the event these risks are realized. We are also using the internal carbon pricing system to assess risks in existing projects. The pricing is based on definitions and prices published by the IEA and other external organizations, taking into account the location and time horizon of the assets, and over the period through 2050 we have applied prices generally in the $1 to $200/ton range for developed countries and $0 to $160/t for the rest of the world under the equivalent of the 2°C scenario, and the $1 to $250/ton range for developed countries and $0 to $200/ton for the rest of the world under the 1.5°C scenario.

As the transition towards a low-carbon or decarbonized society accelerates, we are working to reduce the GHG emissions from our operations while simultaneously engaging in business that contributes to reducing GHG for society. We aim to realize sustainable growth while helping to solve the challenges faced by society. For these reasons, we decided to establish the Environmental ("Green") Business Assessment Working Group, which launched on April 1, 2021. Its role is to carry out comprehensive evaluations as part of the screening process for new projects with the potential to turn climate change responses, such as the development of renewable energy, into opportunities. The evaluations include qualitative factors, such as the strategic significance of initiatives from ESG perspectives.

Aside from our GHG reduction targets, the following environmental indicators and targets have been established and are being monitored on an ongoing basis.

• Energy consumption:
  • Reduce energy consumption intensity, and achieve 100% fossil-free energy use at the Head Office and ranches and offices in Japan, etc., of Mitsui & Co. (non-consolidated) by FY Mar/2030.
• Water Resources:
  • Reduce water consumption at the Head Office and branches and offices in Japan, etc., of Mitsui & Co. (non-consolidated) to less than the amount used in the previous fiscal year, and improve the efficiency of water use.
• Pollution Prevention:
  • Increase the waste recycling rate at buildings owned by Mitsui & Co. as a non-consolidated entity (Head Office, Osaka Office) to over 90% by FY Mar/2030.
  • Reduce paper consumption at the Head Office and branches and offices in Japan, of Mitsui & Co. (non-consolidated) by 50% or more compared to FY Mar/2020 by FY Mar/2030.

For specific performance data, please refer to the following.

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Environmental Performance Data

As a responsible global company, we are advancing and expanding our response to climate change by participating in initiatives that encourage appropriate information disclosure to stakeholders and that make contributions which correspond with the Paris Agreement and the achievement of Japan's medium- to long-term targets for reducing greenhouse gas emissions through initiatives based on international frameworks and wide-ranging partnerships with industry organization in Japan. Our decision to participate in each initiative is made once we have confirmed that it is compatible with our basic policy and initiatives concerning climate change.

TCFD (Task Force on Climate-related Financial Disclosures)

In December 2018, Mitsui declared its support for the TCFD (Task Force on Climate-related Financial Disclosures) recommendations, which aim to facilitate companies to recognize financial impacts arising from the risks and opportunities associated with climate change and to disclose such climate-related information.

TCFD Consortium

The TCFD Consortium was established in 2019 to promote unified action between companies, financial institutions, and other organizations that have declared support for the TCFD and as a forum to further discussion on effective and efficient corporate disclosure of information, as well as the use of disclosed information by financial institutions in making appropriate investment decisions. The Ministry of Economy, Trade and Industry, Financial Services Agency, and Ministry of the Environment participate in the consortium as observers. As a member of the consortium, Mitsui will continue to practice appropriate disclosure in line with TCFD recommendations.

CDP (Climate Change)

Since 2011, we have responded to the questionnaire from the CDP Climate Change, a global disclosure program for corporate information on climate change risks. Based on our response to the questionnaire carried out in 2023, we received the score "A-" in relation to Climate Change.

Maersk Mc-Kinney Moller Center for Zero Carbon Shipping

Reducing emissions is a global issue for the shipping industry. In April 2021, Mitsui became a Strategic Partner of the Maersk Mc-Kinney Moller Center for Zero Carbon Shipping (MMMCZCS), a not-for-profit international research and development center dedicated to the decarbonization of the shipping industry. From May 2022, we have dispatched a secondee to work with other partners to solve technical and commercial issues in the use of low-carbon fuels for marine use.

International Iron Metallics Association

The International Iron Metallics Association is a worldwide organization with a focus on ore-based metallics (pig iron, hot briquetted iron, direct reduced iron, granulated pig iron). It's members, including Mitsui, account for more than 80% of production and international trade in ore-based metallics. We have been distributing and investing in ferrous raw materials, including ore-based metallics, for a long time and amid a growing focus on these materials in relation to the low-carbonization of the iron and steel industry, we will continue contributing to industry low-carbonization through our business development in this area.

ASI (Aluminium Stewardship Initiative)

ASI was established in 2012 with a vision of maximizing the contribution of aluminum to a sustainable society. As of August 2023, approximately 300 companies and groups have joined ASI, including a variety of stakeholders such as aluminum producers and users and the International Aluminium Institute. Its purpose is to increase sustainability in the aluminum supply chain and contribute to ESG engagement by formulating international standards and establishing certification systems. Mitsui joined in January 2020 and supports these initiatives as a member.

The Copper Mark

The Copper Mark is an assurance framework initially developed by the International Copper Association in 2019 to promote the responsible production of copper and the use of responsibly produced copper products. It certifies responsible copper production at production sites, especially mines and smelters, on the basis of standards consisting of 32 issue areas, including environmental and social factors and governance. 39 copper production sites have been certified under this system out of 51 sites that have committed to participate in The Copper Mark. Certified mines account for over 25% of globally mined copper production. Mitsui is one of 28 companies that support this framework and have joined The Copper Mark as partners (as of March 31, 2023). As a partner, Mitsui will promote the responsible production of copper and the increased use of responsibly produced copper products, while contributing to the sustainable development of the copper business.

Battery Association for Supply Chain

The Battery Association for Supply Chain (BASC) is an organization that promotes the enhancement of the international competitiveness of supply chains related to battery raw materials and components, with the aim of realizing a decarbonized society. BASC was established in April 2021, and Mitsui has been a member since its establishment. Together with other member companies, we are addressing issues such as the international standardization of lithium, and rule-making for the establishment of a battery ecosystem.

Japan Business Federation (Keidanren)

Mitsui is a member of various Keidanren committees, including the following:

• Committee on Responsible Business Conduct & SDGs Promotion, which works to make the Charter of Corporate Behavior well known, disseminate and promote "Society 5.0 for SDGs", and promote corporate social contribution activities
• Committee on Energy and Resources, which promotes energy policies that provide a balance of S+3E (Safety + Energy Security, Economic Efficiency, and Environment)
• Committee on Overseas Development Cooperation, which aims to coordinate with national governments and international institutions for the purpose of developing infrastructure overseas, in particular, in emerging countries
• Committee on Environment, which works to respond to climate change, promote circular economy and mainstreaming of biodiversity, and improve environmental regulations and systems

Japan Foreign Trade Council

As a member of the Global Environment Committee of the Japan Foreign Trade Council Inc., Mitsui is actively involved in activities in the field of climate change. In particular, we monitor energy use for all trading companies and promote reduce/reuse/recycle (3Rs) activities. We also gather information about new energy technology through our business activities, and contribute to the formulation of the Long-term Vision for Climate Change Measures. Mitsui also engages in activities as a member of the Japan Foreign Trade Council's Sustainability Promotion Committee, which studies Sustainability/CSR-related issues and conducts surveys and research about trends in Japan and overseas.

GX League

Mitsui participates in the GX (Green Transformation) League, which launched full-scale operations in the fiscal year ending March 2024 under the leadership of the Ministry of Economy, Trade and Industry. The GX League calls for companies to actively work on GX and acts as a forum for discussing the transformation of the overall economic and social system and creating new markets accordingly for achieving carbon neutrality in Japan and the world. Together with other participating companies, we will continue to actively engage in various initiatives in the GX League.

Japan Hydrogen Association

The Japan Hydrogen Association was established in December 2020 with the aim of building and expanding the hydrogen economy by fostering global alliances and developing a hydrogen supply chain. The organization became a general incorporated association in April 2022, and Mitsui, which has participated in this initiative since the establishment of the preparatory committee and as a Board member, will continue working with other member companies toward the realization of a hydrogen society.

Forest Stewardship Council^® (FSC^®)

The Forest Stewardship Council^® (FSC^®) is an international non-profit organization that promotes management of the world's forests in a way that is environmentally appropriate, economically viable, and socially beneficial, including with regard to respect for human rights. Mitsui has obtained FSC^® forest management (FM) certification (FSC^®-C057355) at 75 of its forests, which in total approximately 45,000 hectares, while Mitsui Bussan Forest Co., Ltd., a Mitsui subsidiary, has obtained Chain of Custody (CoC) certification for the processing and distribution of cut lumber (FSC^®-C031328). As one of the top private-sector suppliers in terms of volume of FSC^®-certified Japanese-grown lumber, Mitsui is helping to promote FSC^® in Japan and to discuss and draft the Japanese version of principles, standards, and risk assessments. Mitsui has obtained FSC^® certification for its forest resources business as well, and promotes responsible management of forest resources.

Carbon Recycling Fund Institute

Carbon recycling policies that see CO2 as a resource to be used and promote innovation in this field are coming to play an important role in Japan's energy policies. The Carbon Recycling Fund Institute was established in August 2019 to promote the creation of carbon recycling innovation with the aim of both addressing the global warming issue and improving energy access throughout the world. Mitsui has been a member since January 2020. We aim to pursue business opportunities and contribute to solving climate change issues by providing access to the latest information regarding CCUS (CO2 Capture, Utilization and Storage), which is important for decarbonization, and by strengthening relationships with other member companies.

The Institute of Applied Energy, Society of Anthropogenic Carbon Cycle Technology

Carbon capture and storage technology can process huge volumes of CO2 and is considered to be an effective way to reduce CO2 emissions. However, in recent years, there has been growing demand for the building of carbon capture and utilization technologies and systems that can also process large volumes of CO2. The Society of Anthropogenic Carbon Cycle Technology was established by the Institute of Applied Energy in October 2018 with the goal of investigating and researching viable technologies for utilizing CO2 and sharing relevant information in order to contribute to the earlier realization of these technologies and their social application. Mitsui has been a member since July 2020.

Clean Fuel Ammonia Association

The Clean Fuel Ammonia Association is an industrial-academic-governmental platform for the development and evaluation of technology, economic evaluation, policy proposal, and international collaboration. It aims to find social applications for energy technologies that use ammonia and to build value chains spanning from the supply to usage of CO2-free ammonia. Mitsui has participated as a member of the Board of Directors since April 2019.

Our Medium-Term Management Plan and Environmental Policy both call for action on climate change, and we are promoting initiatives to reduce our environmental impact through dialogue with suppliers and other business partners along the value chains in which we are involved, with the aim of achieving both economic development and a response to climate change. In addition to renewable energy and modal shift businesses, we are also working to expand and promote various businesses and technologies that contribute to the reduction of CO2 emissions and improvement in energy consumption efficiency.

Making Energy Use Carbon Neutral across All Business Locations in Japan (Using J-Credits)

As one of the concrete measures aimed at realizing our 2050 vision, we offset the CO2 emitted from the use of electricity, fuel and heat at our Head Office and all domestic offices, branches and training centers, by applying carbon credits (J-Credits) generated by affiliate company Konan Utility Co., Ltd. and Mitsui's Forests.

Initiatives in Adaptation to Climate Change — Controlled Environment Agriculture Business in the Middle East

• Nutrition & Agriculture Business Unit

• Infrastructure Projects Business Unit
• Energy Solutions Business Unit

In our power generation business we intend to lower the share of coal-fired thermal power in our equity share of power generation capacity and increase the percentage of renewable energy (including hydropower) to 30% by 2030. As of March 31, 2024, renewable energy, including hydroelectric power, accounted for approximately 29% of Mitsui's total power generating capacity of 10.5GW.

Power Generation Businesses

Please scroll horizontally to look at table below.

(As of March 31, 2024)

* Including assets under construction

Please refer to the link below for more information.

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Power Generation Businesses (Renewable Energy Business, Gas-Fired Power Generation Business, Coal-Fired Power Generation Business, Oil-Fired Power Generation Business) as of March 31, 2024 (PDF 381KB)

Investment in Mainstream Renewable Power, which Develops Renewable Energy Businesses Globally

• Infrastructure Projects Business Unit

We are an investor in renewable energy company Mainstream Renewable Power Limited ("Mainstream") through its holding company Aker Horizons ASA ("Aker Horizons"), a Norwegian clean energy investor.
Mainstream is, as a developer of wind and solar generation assets, one of the leading companies in the renewable energy sector, in particular in Latin America and Africa. It has a successful track record of having developed 6.5 GW of generation capacity to financial close-ready stage, including offshore wind farms in UK. Currently, Mainstream has a portfolio of approximately 20.6 GW of high-quality energy assets in Latin America, Africa, and Asia-Pacific, which are currently operating, under-construction or in development phases. Mainstream recognizes energy transition as an opportunity to expand its global portfolio and aims to develop 25 GW of energy assets over the next 10 years.
Aker ASA, the owner of Aker Horizons, was founded in 1841 and is an industrial investment company, the second-largest oil & gas major in Norway. Aker ASA established Aker Horizons as its platform dedicated to investing in, incubating, and developing companies within renewable energy and decarbonization technologies. In addition to Mainstream, Aker Horizons owns Aker Carbon Capture (a CO2 capture and storage development company), Aker Clean Hydrogen (a clean hydrogen and ammonia development company), and Aker Offshore Wind (an offshore wind power development company).
We will contribute to the growth of Mainstream and the enhancement of its corporate value by utilizing our know-how in the construction and operation of large-scale power plants around the world and our global customer network. Through this investment, we will promote the development of renewable energy power sources with a sense of scale, further improve the quality of our power generation portfolio, and accelerate the reduction of GHG emissions in society through our operations.

Investment in India's Large-Scale Renewable Energy Business

• Infrastructure Projects Business Unit

Through our wholly-owned subsidiary MIT Power India, we are an investor in the development of a large-scale renewable energy project promoted by ReNew Power Private Limited, the largest renewable energy company in India. The project will consist of three newly built wind farms in India (900 MW in total) and one solar power plant (400 MW plus a battery storage farm with a capacity of up to 100 MW). The project will provide 400 MW of electricity to Solar Energy Corporation of India Limited ("SECI"), an entity owned by the Indian Ministry of New & Renewable Energy, based on a 25-year power purchase agreement. While it is difficult for conventional renewable energy projects to commit stable electricity supply due to the intermittent nature of winds and solar irradiation, this Project commits electricity supply of 400 MW with high capacity factor on a round-the-clock basis from a portfolio consisting of multiple wind and solar plus battery storage farms. This is the first of its kind in India ("round-the-clock scheme"). The total cost of the project will be around US$1.35billion. The commercial operations are scheduled to start in phases as soon as each site is ready to generate electricity. Mitsui will contribute to the project by using its accumulated knowledge of the electric power business in Japan and other countries to ensure steady progress toward completion and the smooth start-up of commercial operations.
India, the third-largest emitter of GHG, declared its commitment to cut its emissions to net-zero by 2070 at the 26th Conference of Parties ("COP26") held in November 2021 and announced that it will raise its non-fossil energy capacity to 500 GW by 2030. This round-the-clock scheme Project, enabling electricity supply with 100% renewables, is in line with the Indian Government's policy and is expected to play an important role in the future to replace coal-fired generation currently dominant in India. Renewable energy is a business field that is likely to continue to expand in India, where continuous growth in population and GDP is expected. Through this project, we will contribute to solving the power shortage in India and encourage decarbonization.

Hydrogen Related

• Energy Solutions Business Unit

When hydrogen is consumed, it generates no greenhouse gases or environmentally harmful substances. Hydrogen is a focus of attention around the world as a clean fuel that does not generate an environmental burden. With our Energy Solutions Business Unit at the core, we are engaged in a cross-company collaboration utilizing the networks and knowledge of each business segment, working on our hydrogen business in a way that demonstrates our comprehensive strength. We regard the hydrogen business as an effective approach to achieve our net-zero emissions goal. We will work together with our stakeholders to build needed social infrastructure and create profitable businesses.

Green Hydrogen Production Project in Western Australia

• Energy Solutions Business Unit

Renewable hydrogen, which is produced from renewable energy, will play a pivotal role in industrial decarbonization and has significant potential as a clean energy source, as renewable hydrogen emits no CO2 in the production and burning process and can be used in various industries. We are participating in a green hydrogen production project in the Pilbara region of Western Australia. In this project, a joint venture between French energy major Engie S.A. and Mitsui will deploy a 10 MW electrolyzer powered by 18 MW of solar PV to generate and supply renewable hydrogen for an existing ammonia production facility owned by Yara Pilbara Fertiliser Pty Ltd ("YPF"), a wholly owned subsidiary of Yara International ASA, one of the largest producers of nitrogen-based mineral fertilizers on the globe. YPF will use the renewable hydrogen as a zero-carbon feedstock for ammonia production. The project aims to complete its construction and start its production in 2024.

Green Hydrogen Production Business in Europe

• Performance Materials Business Unit

Decarbonization Solutions for the Mobility Sector

• Performance Materials Business Unit

Agricultural Biomass Supply Chain Management Business in India

• Energy Solutions Business Unit

We will work to build value chains that leverage our strengths as a general trading company active across many industries. Examples of these strengths include our partnerships with host countries, our customer base that we have built up over many years, our marketing know-how, and our involvement in the Clean Fuel Ammonia Association.

Low-carbon Ammonia Production Project (UAE)

• Energy Solutions Business Unit
• Basic Materials Business Unit

Together with Abu Dhabi National Oil Company ("ADNOC"), we participate in a low-carbon ammonia projection project. The project is being developed at the TA'ZIZ Industrial Chemicals Zone in the Ruwais Industrial Complex, Abu Dhabi, UAE with ADNOC, Fertiglobe, a urea and ammonia producer and exporter, and GS Energy, a Korean energy-related business company, as project partners. ADNOC started the feasibility study for this project in 2021, and the facility is expected to commence production in 2025, with a production capacity of approximately 1 million tons per annum. Ammonia has been attracting attention as a zero-emission fuel that does not generate CO2 during burning, and also as a carrier for hydrogen. We are examining the potential to import low-carbon ammonia produced in this project to Japan and contribute to the realization of low-carbon power generation in Japan.
In the energy sector, we have been developing and managing liquified natural gas projects with ADNOC in Abu Dhabi since the 1970s. In addition, we have an approximately 50-year track record in handling products in our ammonia business and are the largest Japanese importer of ammonia. We will contribute to this project by utilizing the advantages and know-how obtained through such business.

Clean ammonia production project (U.S.)

• Basic Materials Business Unit
• Energy Solutions Business Unit

We have formed an agreement with U.S. company CF Industries ("CF") to jointly develop a clean ammonia production project in the United States. The project will produce around 1 million tons of clean ammonia per year in the U.S. Gulf of Mexico, with CF as the operational partner, and will leverage CCUS(*1) processes to reduce CO2 emissions by more than 60% compared to conventional ammonia production methods. The two companies plan to jointly conduct a FEED(*2) study with the aim of making a final investment decision (FID) in 2023 and starting production in 2027. Traditionally used for fertilizer and industrial purposes, ammonia is attracting new attention as a zero-emission fuel that does not emit CO2 when burned, and as a means of transporting hydrogen. Mitsui will lead the sales of clean ammonia produced in this project to Japan and other Asian markets, thereby contributing to low-carbon electricity generation in those countries. Mitsui has about 50 years of experience in the ammonia business and holds the largest share of imports into Japan, and CF is the world's largest ammonia producer with extensive operational experience. The two companies will mutually leverage each other's strengths to advance this project.

*1 CCUS: Carbon dioxide Capture, Utilization and Storage
*2 FEED: Front End Engineering and Design

Distributed solar power generation

• Energy Solutions Business Unit

We have invested in Xurya Pte Ltd. ("Xurya"), the parent company of the Indonesian distributed solar developer for commercial and industrial (C&I) customers, PT Xurya Daya Indonesia. Indonesia has set a national goal of achieving carbon neutrality by 2060, and was also the chair country of the G20 in 2022. The country is promoting further decarbonization and the introduction of renewable energy. Indonesia has one of the largest electricity demand for C&I customers among the ASEAN countries. As the demand for electricity will continue to increase along with economic growth, distributed solar projects as a decarbonization solution are attracting a great deal of attention.
Since its founding in 2018, Xurya has engaged in the development of distributed solar assets for C&I customers, as a leading company in the distributed solar power domain in Indonesia. The company also provides operation and maintenance services for such assets. Xurya has a track record of installing distributed solar assets for more than 160 SMEs and large companies, such as textile and food manufacturers, including Japanese companies.
We aim to contribute to Xurya's growth and Indonesia's decarbonization and renewable energy development policies by leveraging its expertise in the distributed solar business cultivated in countries all over the world and its extensive networks in Indonesia. Through these efforts, Mitsui will contribute to the realization of a decarbonized society.

An Energy Management Business that uses Battery-powered ICT Systems

• Energy Solutions Business Unit

While the amount of new renewable energy is increasing globally, issues such as growing loads on transmission and distribution systems, an imbalance in the burden of electricity charges, and complicated supply and demand coordination are becoming prominent. In response to these issues, we have invested in Stem, Inc. and Sunverge Energy, Inc., two companies that offer energy management services that employ energy storage ICT systems. We are also working on the development of new business models to meet diversifying needs -- for example, providing solutions that package Stem's energy storage system and Forefront Power's distributed solar power. Forefront Power is a wholly-owned subsidiary engaged in the distributed solar business for industrial and commercial consumers and public institutions in North America. Another issue is the increasing volatility in the electricity market due to the rapid spread of renewable energy. We are responding to new needs due to structural changes by providing solutions such as price hedging and supply and demand adjustment functions. In Europe, through such initiatives as our investment in Erova Energy Limited of Ireland, we are doing our part to help business expansion and functional improvement in the electric power logistics sector.

• Energy Business Unit II
• Infrastructure Projects Business Unit

Fukushima Gas Power Co., Ltd., our affiliate company, has two natural gas-fired power generation facilities at its Fukushima Natural Gas Power Plant at Soma, Fukushima Prefecture. These have a total power output of 1.18 million kW. The power generation facilities use a gas turbine combined-cycle system with high power generation efficiency. This combination of a gas turbine and a steam turbine generates a lower level of CO2 than coal-fired or gas turbine-only power generation methods.
This project is in line with Fukushima Prefecture's goals of the "introduction of energy with a low environmental impact" and "new urban development". Through the promotion of this project, Mitsui & Co. will contribute to the economic revitalization in the Hama-dori region of Fukushima prefecture to help in its ongoing recovery from the 2011 earthquake. We will continue to work on the sustainable and stable supply of resources that are essential for social development and the creation of a society that is in harmony with the environment.

• Mobility Business Unit I
• Energy Solutions Business Unit

Among the mobility (transportation) fields that we have defined as our new growth fields, we expect electrification (the shift to electric vehicles) to be particularly promising. In Europe, where the introduction of EVs is gathering momentum, we are building a comprehensive business model that supports the changeover to EVs, including infrastructure, and are expanding it in other regions as well.
We are organically linking several companies in which we have an interest in order to build a new business model that can provide comprehensive solutions. These include EV makers (CaetanoBus-Fabricação De Carroçarias S.A, Letenda Inc.), battery pack manufacturers (Forsee Power SA), and an energy management company that uses EV batteries (The Mobility House AG). For example, if a city considers switching its fixed-route buses to EV, we would like to help the city speed up its changeover to electric vehicles. In concrete terms, we can offer a comprehensive range of services including EV bus supply, battery leasing, and energy management. Furthermore, in future we are also considering businesses involved in the reuse and re-leasing of used batteries. We will begin these initiatives in Europe and the United States, and then expand them to Asia.

ZEV (Zero Emission Vehicle) Bus Operations in Europe

• Mobility Business Unit I

We are an investor in Caetano Bus, S.A. of Portugal. This company has been involved in the development of electric buses since 2010. In 2016 they began the sale of ramp buses used to transport passengers within airports, and in 2017 the company started commercial production and sales of electric transit buses in Europe. We are using our global network to help in the expansion of sales of the company's buses. As an example of Caetano's global expansion, a total of 34 single-deck electric buses were delivered to two London routes in the spring of 2020. The company also completed the development of an FC (fuel cell-powered) transit bus at the end of 2020. Beginning with Germany and Spain, we have started selling FC buses that use Toyota fuel cell systems. In our partnership with Caetano Bus, we will continue looking to provide the optimal solutions suitable for operations seeking to achieve a carbon-free society.

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360° business innovation: FULL CHARGE AHEAD: Assembling an EV value chain for the smart-city era

• Corporate Development Business Unit

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Circular Economy: Initiatives

Participation in the CCS Business

• Energy Business Unit I
• Energy Business Unit II
• Energy Solutions Business Unit

Leveraging our expertise gained through energy resource development and CCS (Carbon Capture and Storage) project development in Europe and other regions as well as our extensive business network, we have been proceeding with business development to expedite CCS commercialization globally.

In the Asia Pacific region, including Japan, we have signed a memorandum of understanding (MOU) with Kansai Electric Power Company to conduct a feasibility study on carbon capture and storage (CCS) value chain development. Based on the MOU, Kansai Electric will lead the study of CO2 capture from its thermal power plants, and Mitsui will lead CO2 transport and storage studies, in order to conduct a full CCS value chain feasibility study.

We are also conducting a joint study with Shell (UK) on CCS value chain business development in the Asia Pacific region, as well as a joint feasibility study on CCS commercialization with Petronas Malaysia, a feasibility study with PTTEP (Thailand) for a CCS project and Joint Crediting Mechanism (JCM) for Arthit Gas Field, and a study with Pertamina (Indonesia) on CCUS.

In addition, we are working with our Cameron LNG project partners, Sempra Infrastructure (U.S.), TotalEnergies (France), and Mitsubishi Corporation, on a joint study to commercialize CCS in the state of Louisiana in the U.S., led by Hackberry Carbon Sequestration, LLC (a wholly owned subsidiary of Sempra Infrastructure). The main objective is to sequester CO2 emission from the Cameron LNG Project into underground storage facilities near the project site, thereby contributing to the reduction of greenhouse gas emissions during LNG production. This study will also examine the possibility of receiving and storing CO2 emitted from local industries in the surrounding areas. Prior to the start of the study, in August 2021 we applied for a permit from the U.S. Environmental Protection Agency for the drilling of an injection well at the proposed CCS project site for annual CO2 storage of 2 million tons.
We position the CCS/CCUS business as one of the energy solutions where we can utilize our strengths, including our expertise in the upstream oil and gas business and our extensive business network, and we will continue to contribute to providing CO2 reduction solutions and supplying low-carbon LNG across the world.

• [Topics] Mitsui and Kansai Electric Power Sign Memorandum of Understanding on CCS Feasibility Study (January 18, 2023)
• [Topics] Mitsui and Shell to explore feasibility of carbon capture and storage in Asia Pacific (September 8, 2022)
• [Topics] Feasibility Study for CCS Project and Realization of JCM for Arthit Gas Field in Thailand (June 17, 2022)
• [Topics] Mitsui Launches Joint Feasibility Study with Pertamina on CCUS Commercialization in Indonesia (April 7, 2022)
• [Topics] Mitsui Enters into Participation Agreement for Carbon Sequestration Project in the U.S. with Sempra Infrastructure, TotalEnergies, and Mitsubishi Corporation (May 24, 2022)

CCU — Producing Methanol in the U.S. that Effectively Uses CO2

• Basic Materials Business Unit

Our affiliate, Fairway Methanol LLC, decided in March 2021 to expand its facilities to increase methanol production (approximately 130,000 tons per year) by purchasing and effectively utilizing by-product carbon dioxide (CO2) from surrounding plants (up to approximately 180,000 tons per year) as the source. The decision to expand its facilities was made to maximize the effective capacity of the existing plant, and carbon dioxide sourced from neighboring plants will be used as the raw material for the plant's newly added capacity. This is a CCU (Carbon Capture and Utilization) initiative, which involves separating and effectively utilizing carbon dioxide. Under this concept, CO2 is considered a resource that can be reused as a material or fuel, thus realizing carbon recycling to reduce emissions into the atmosphere.
Demand for methanol is expected to grow steadily in the future as a basic raw material for a variety of industries, including housing and construction materials, high-performance resins for automobiles and electronics, and pharmaceuticals. Recently, methanol has also been attracting attention as a key chemical substance that can be sourced from carbon dioxide. Mitsui has been engaged in the methanol trading business for many years. In addition to the business in North America where this expansion will take place, Mitsui is also involved in a methanol production business in Saudi Arabia.
Through the stable supply of methanol, Mitsui is supporting the development of a wide range of industries and contributing to the realization of a sustainable society. Furthermore, to achieve Net-Zero Emissions by 2050, which is the target set in our Medium-term Management Plan, we will make use of our existing businesses and the know-how we have accumulated through them to promote initiatives to realize a decarbonized society.

Development of a Recycled Polypropylene Manufacturing Business

• Performance Materials Business Unit

Certifications

• Performance Materials Business Unit
• Energy Business Unit I

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Responsibilities to Customers: Acquisition of Environment-Related Certification in Company-Owned Forests "Mitsui's Forests", Forest Resources Business, etc.

We aim to invest in environmentally friendly buildings and make energy use in our existing buildings more efficient through environmental and energy-saving measures, in order to build a portfolio of properties that has a low environmental impact.

Otemachi One (Mitsui & CO. Building and Otemachi One Tower)

The DBJ Green Building Certification is a certification system that evaluates environmentally and socially conscious real estate. Otemachi One (Mitsui & CO. Building and Otemachi One Tower), an office building owned by our company and others, has been certified as" one of Japan's top-class, superior buildings exhibiting excellent environmental and social awareness "under the DBJ Green Building Certification.

Japan Logistics Fund, Inc.

• Corporate Development Business Unit

Japan Logistics Fund, Inc. ("JLF"), a listed REIT which is operated by our subsidiary Mitsui & Co., Logistics Partners Ltd., owns and manages 52 logistics facilities (as of May 2023).
With regard to JLF, we actively promote ESG initiatives in the management of logistics facilities. We believe that obtaining objective evaluations and certifications will enable us to understand the positioning and the challenges of JLF's ESG initiatives and allow us to further enhance our efforts, and we are working to obtain green building certification and improve the results of third-party evaluations.

Acquiring External Certification

GRESB Real Estate Assessment

The GRESB* is an annual benchmarking assessment, which measures the ESG integration of real estate companies and funds. In the 2022 assessment, Japan Logistics Fund, Inc. received the highest rating of "Five Stars". In addition, the company received a "Green Star" for the fifth consecutive year in both the "Management Component" which evaluates the company's policies and organizational structure for ESG promotion, and the "Performance component" which evaluates the company's environmental performance and tenant engagement at owned properties. Furthermore, in the GRESB disclosure evaluation, which measures the level of ESG information disclosure, the company was highly evaluated for its ESG information disclosure efforts and received the highest "A Level" rating.

MSCI ESG Ratings Evaluation

MSCI ESG Ratings researches, analyzes, and rates the extent to which companies adequately manage ESG-related risks and opportunities, and provides an overall corporate ESG rating on a seven-point scale from "AAA" to "CCC".
JLF received an "AA" rating in May 2022.

MSCI Japan ESG Select Leaders Index

MSCI Japan ESG Select Leaders Index is composed of companies elected by MSCI from among the constituents of the MSCI Japan IMI Index for excellence in ESG initiatives and has been selected by the Government Pension Investment Fund (GPIF) for its passive management index.
JLF is a constituent of the MSCI Japan ESG Select Leaders Index created and published by MSCI.

SBT for SME certification

JLF has established SCOPE 1.2 greenhouse gas emission reduction targets of 42% below the FY 2021 level by FY 2030 and net zero by FY 2050. Of these, the greenhouse gas emission reduction targets by FY 2030 were recognized by the SBT Initiative, an international organization, as following the goals of the Paris Agreement that "aims to keep the global average temperature well below 2°C above pre-industrial levels and pursue efforts to limit global warming to 1.5°C." JLF has received the SBT (Science Based Targets) for SME certification from the international SBT initiative in 2022.

Green Finance Framework Assessment

We have established the Green Finance Framework with the aim of further promoting sustainability-related initiatives through green finance and strengthening our fund-raising base by expanding the investor base interested in ESG investment. JLF has obtained a Green 1(F) (highest for JCR Green Finance Evaluation (*5)) rating for the competence of its Green Finance Framework from Japan Credit Rating Agency, Ltd. (JCR)

Acquisition of Green Building Certifications

JLF aims to build a low environmental impact portfolio by investing in properties with low environmental impact, and improving energy efficiency through environmental and energy conservation measures in the management of its properties. In addition, when redeveloping owned properties (OBR), the company intends to obtain green building certification after the redevelopment. The company aims to achieve the following targets regarding the percentage of properties owned that have acquired Green Certifications (based on leasable floor area).

• Acquire green certifications in 75% of portfolio in FY 2025.
• Acquire green certifications in 90% of portfolio in FY 2030.

Percentage of Portfolio with Green Building Certification (as of March 31, 2023)

Please scroll horizontally to look at table below.

Type of certification	Number of properties	Leasable area (m2)	Percentage of portfolio (by area)
Certification for CASBEE for Real Estate(*1)	36	974,924.07	70.8%
BELS Certification(*2)	16	469,020.67	34.0%
CASBEE Certification for Buildings (New Construction)(*3)	1	37,378.68	2.7%
Percentage of portfolio with green building certification	41	1,081,645.17	78.6%

As some properties have multiple certifications, the total of the figures for each certification type does not equal the figure for the "Percentage of Green Building Certification".
*1 CASBEE is a method designed to comprehensively assess the environmental efficiency of buildings and promoted throughout Japan under the guidance of the Ministry of Land, Infrastructure Transport and Tourism. Certification for CASBEE for Real Estate is a system where third-party institutions examine and certify assessment results prepared in accordance with CASBEE for Real Estate. The certification rating is represented by the number of stars on a four-tier scale from five stars "★★★★★" ("S") to two stars "★★" ("B").
*2 BELS is a third-party certification system in Japan that indicates the energy efficiency of buildings. Specific indication method is stipulated in the guidelines for energy efficiency labels of buildings, BELS is evaluated based on the same guideline, and the assessment result is represented by a number of stars (one star "★" to five stars "★★★★★"). A Net Zero Energy Building ("ZEB") is a building that aims at zero energy balance with considerably reduced annual energy consumption by saving as much energy as possible with better heat insulation, solar shading, natural energy and high-efficiency equipment, coupled with creating energy by photovoltaic power generation (or other energy generating methods), while maintaining a comfortable environment. In addition, in the BELS certification system, it is possible to obtain certification under 4 levels (ZEB, Nearly ZEB, ZEB Ready, and ZEB Oriented).
*3 CASBEE Certification for Buildings (New Construction) is a system for evaluating the overall environmental performance of a building. It evaluates and rates the environmental performance of buildings based on energy and resource conservation, recycling and other environmental burden reductions as well as interior comfort and landscaping.

CASBEE

Yachiyo Logistics Center and Ichikawa Logistics Center II (following their redevelopment), and Yokohama Machida Logistics Center, each received an A rating under CASBEE.

Properties with Certification for CASBEE for Real Estate

Certification	Property
S	M-11 Yachiyo Logistics Center M-37 Fujisawa Logistics Center
A	M-4 ShinKiba Logistics Center M-5 Urayasu Chidori Logistics Center M-6 Funabashi Nishiura Logistics Center M-9 Narashino Logistics Center M-12 Yokohama Fukuura Logistics Center M-13 Yachiyo Logistics Center II M-17 Narashino Logistics Center II M-18 Ichikawa Logistics Center II M-19 Souka Logistics Center M-21 Kashiwa Logistics Center M-22 Musashimurayama Logistics Center M-24 Shin-Koyasu Logistics Center M-25 Misato Logistics Center M-26 Sagamihara Logistics Center M-27 Chiba Kita Logistics Center M-28 Chiba Kita Logistics Center II M-29 Urayasu Chidori Logistics Center III M-31 Shinkiba Logistics Center II M-32 Yokohama Machida Logistics Center M-34 Shiroi Logistics Center M-35 Toda Logistics Center M-38 Hanyu Logistics Center M-39 Saitama Kisai Logistics Center M-40 Kazo Logistics Center M-42 Itabashi Logistics Center T-3 Kiyosu Logistics Center T-7 Fukuoka Hakozaki Futo Logistics Center T-9 Fukuoka Kashiihama Logistics Center T-10 Kasugai Logistics Center
B+	M-14 Urayasu Chidori Logistics Center II M-20 Tatsumi Logistics Center M-36 Ichikawa Logistics Center III T-5 Komaki Logistics Center T-6 Komaki Logistics Center II

Properties with BELS Certification

Certification	Property
Five Star "ZEB"	M-41 Kuki Logistics Center
Five Star ZEB Ready	M-2 Urayasu Logistics Center M-6 Funabashi Nishiura Logistics Center M-11 Yachiyo Logistics Center M-13 Yachiyo Logistics Center II M-17 Narashino Logistics Center II M-19 Souka Logistics Center M-21 Kashiwa Logistics Center M-22 Musashimurayama Logistics Center M-27 Chiba-kita Logistics Center M-30 Zama Logistics Center M-34 Shiroi Logistics Center T-6 Komaki Logistics Center II T-12 Aisai Logistics Center
Five Star	M-15 Ichikawa Logistics Center T-7 Fukuoka Hakozaki Futo Logistics Center

Properties with CASBEE Certification for Buildings (New Construction)

Certification	Property
A	M-2 Urayasu Logistics Center

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Japan Logistics Fund, Inc.: Certification

Mirai Corporation

• Corporate Development Business Unit

Mitsui Bussan & Idera Partners Co., Ltd., our affiliate which manages the assets of listed Real Estate Investment Trust MIRAI Corporation, is promoting sustainability-related measures that include ongoing participation in real estate assessments, and green financing, in accordance with our Sustainability Policy.

Acquiring External Certification

GRESB Real Estate Assessment

Listed Real Estate Investment Trust MIRAI Corporation earned "3 Stars" in the GRESB Real Estate Assessment, based on the relative evaluation of its overall score. MIRAI also earned a "Green Star" in both the "Management Component" which evaluates the company's policies and organizational structure for ESG promotion, and the "Performance component" which evaluates the company's environmental performance and tenant engagement at owned properties.

Percentage of environmental certifications acquired

The percentage of environmental certifications in the portfolio is as follows.

(As of April 24, 2023)

Based on gross floor area
74.7%

Properties with DBJ Green Building Certification

Mirai Corporation has acquired DJB Green Building Certification for eight properties.

List of properties that have acquired DJB Green Building Certification

Certification	Year	Property
4 Stars Properties with exceptionally high environmental and social awareness	2022	Shinjuku Eastside Square
3 Stars Properties with excellent environmental and social awareness	2021	Shinagawa Seaside Parktower
	2022	Rokko Island DC
	2020	Tokyo Front Terrace
	2021	Mi-Nara
	2022	BizMiiX Yodoyabashi
1 Star Properties with satisfactory environmental and social awareness	2020	MI Terrace Nagoya-Fushimi
		Kawasaki Tech Center

List of Properties with CASBEE Real Estate Assessment Certification

Certification	Property
S	MI Terrace Sendai Hirose-dori

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MIRAI Corporation: Third-party Accreditation

Forest Sinks and Emission Credits Business

• Energy Solutions Business Unit

Generation and sale of carbon credits through regeneration of native vegetation

Climate Friendly carbon farming project site

We are an investor in Climate Friendly Pty Ltd ("Climate Friendly"), a company that generates and sells carbon credits through the regeneration of native vegetation on farms in Australia. Climate Friendly is involved in GHG reduction projects through native forest restoration (land use) in Australia.
Climate Friendly is one of the largest carbon farming project services-providers in Australia. It had already achieved 20 million tons of GHG reduction by 2020, and is aiming to achieve a 100 million ton cumulative GHG reduction by 2025. The projects supported by Climate Friendly to restore and regenerate native forests are expected to play an important role in achieving the Australian government's GHG reduction target, by absorbing and sequestering CO2 from the atmosphere, and also improving soil quality and preserving ecosystems and biodiversity.
Demand for emission reduction credits from the private sector has been growing, and is expected to continue to grow steadily. Australia is one of the most important countries for Mitsui's business, and we will proactively work to reduce the GHG footprint of our group companies.

Performance

GHG Emissions

Mitsui has carried out GHG emissions surveys in Japan since the fiscal year ended March 2006, and overseas since the fiscal year ended March 2009. Previously, we disclosed Scope 1 and Scope 2 GHG emissions under the GHG Protocol(*1) control standards(*2). Since the fiscal year ended March 2020, we have additionally disclosed Scope 3, Category 15 (indirect emissions associated with investments), which is emissions from investments in energy, mineral and metal resources and thermal power generation projects not included in Scope 1 and 2, and other affiliated company business areas that fall under Scope 1 and 2. Furthermore, since the fiscal year ending March 2024, we have expanded disclosure to include all applicable Scope 3 categories. We have enhanced the scope of disclosures to promote continuous reviews of our portfolio in response to stakeholders’ wishes and in consideration of our risk tolerance to climate change, which also takes into account Mitsui's strategy of using our wide range of business activities to take on the challenge of new opportunities in an agile way.

*1 GHG Protocol is a GHG emissions calculation and reporting standard formulated through an initiative led by the WRI (World Resources Institute) and the WBCSD (World Business Council for Sustainable Development).
*2 Coverage: Head Office and all offices in Japan, all consolidated subsidiaries (100%) and Un-incorporated Joint Ventures.

• Environmental Performance Data

Our Company-Owned Forests, "Mitsui's Forests," Absorb and Fixate 160,000 Tons of Carbon Dioxide Annually

It is estimated that Mitsui's Forests absorb and fixate approximately 160,000 tons (including emission credits expected to be certified) of CO2 per year, and that they have accumulated approximately 10 million tons(*1). We contribute to the mitigation of climate change risk through sustainable forest management. The public value of Mitsui's Forests is estimated to be approximately 200 billion yen(*2).

*1 Calculation based on the Tier 2 approach in Chapter 4, "Forest Land," in Volume 4 of the "2019 Refinement to the 2006 IPCC Guidelines on National Greenhouse Gas Inventories." In the past, the calculation was based on the Tier 1 approach in the 2006 IPCC Guidelines, but we changed the calculation method in the fiscal year ended March 31, 2021, to improve accuracy.
*2 Calculation based on the "Comprehensive Assessment of Biodiversity and Ecosystem Services" published by the Ministry of Environment