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Environment

Climate Change

Policies and Basic Approach


How we respond to climate change and increasingly frequent and severe natural disasters – whether through initiatives such as the Sustainable Development Goals (SDGs), the ratification of the Paris Agreement at the United Nations, or other initiatives – is one of the most pressing issues of our time. Businesses must also play their part, and it is becoming increasingly important for companies to act responsibly in supporting the creation of a sustainable society.

The material issues ("Materiality") identified by Mitsui include "secure sustainable supply of essential products", "enhance quality of life", and "create an eco-friendly society", and our Environmental Policy stipulates that we will pursue the kinds of business that will help us act to reduce greenhouse gas (GHG) emissions, as well as mitigate and adapt to climate change. We have positioned climate change as one of the key themes of our sustainability management in our Medium-term Management Plan 2026, and in continuation from our previous Medium-term Management Plan, we will work to transform our business portfolio with the aim of achieving a decarbonized society. Moreover, we position technological innovation in environment and clean tech as one of the core strategic fields, and are working to pursue and expand investment opportunities in these areas.

We have set targets that aim to contribute to the goals of the Paris Agreement and Japan's own medium-term GHG emission reduction targets. Through our global and wide-ranging business activities, we will contribute to the development of economies and societies in many countries across the world and to solutions to the global challenges we face, such as mitigating and adapting to climate change.

Mitsui presented its climate change and Progress on Activities Toward a Decarbonized Society at the Mitsui & Co. Investor Day held on November 30, 2023. Please refer to the link below for more information.


Mitsui & Co. Investor Day 2023: Progress on Activities Toward a Decarbonized Society

Disclosure Based on TCFD Recommendations

Disclosure Policy


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.


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

Governance


Governance System for Climate Change Response

We have positioned addressing climate change as a key management issue. Basic management policy, business activities, and corporate policies and strategies that concern climate change are planned developed, and advised on by the Sustainability Committee, an organization under the Executive Committee.

The Sustainability Committee is structured so that its activities are appropriately supervised by the Board of Directors, and matters discussed by the Sustainability Committee are regularly discussed and reported to the Executive Committee and the Board of Directors. During the fiscal year ended March 31, 2023, agenda items related to the Company's response to climate change were discussed and reported on at Board of Directors meetings, including sustainability promotion results and plans, the evaluation method for executive compensation, and the medium-term management plan. In addition, board members, including directors, auditors, and external directors, held free discussions on the theme of climate change response, creating a forum for active discussion on the topic.

Sustainability Committee

Officer in Charge Makoto Sato (Representative Director, Senior Executive Managing Officer, Chief Strategy Officer (CSO), Chairperson of the Sustainability Committee)
Administrative Office Corporate Sustainability Div., Corporate Planning & Strategy Div.

Governance System for Climate Change Response

Climate Change-Related Discussions

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

Major Climate Change-Related Discussions by the Sustainability Committee over the Past Three Years (FY Mar/2021)

  • Discussion on establishment of GHG-related targets
  • Discussion on climate change scenario analyses
  • Report on investigations into GHG emissions
  • Progress reports and discussions on the progress of initiatives such as the internal carbon pricing system and building of a GHG emissions database

Major Climate Change-Related Discussions by the Sustainability Committee over the Past Three Years (FY Mar/2022)

  • Free discussion and report on roadmap for achieving long-term GHG targets
  • Report on development of GHG reduction contribution calculation tools
  • Free discussion on introduction of ESG assessment in executive remuneration
  • Report on climate change/review of internal systems and policies, and deliberations on future response policy, including internal carbon pricing

Major Climate Change-Related Discussions by the Sustainability Committee over the Past Three Years (FY Mar/2023)

  • Report on Expanding Climate Change Disclosures under the TCFD
  • Deliberations on ESG-linked Officers' Remuneration/Climate Change Assessment Items
  • Report on External Environment and the Challenges Facing Mitsui & Co. in Relation to Climate
  • Report on Progress with Scope 3 and Scenario Analyses
  • Report on Materials of the Investor Day "Path to Green Transformation" presentation
  • Free Discussion and Deliberations on Update and Further Utilization of Internal Carbon Pricing

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.


Reflecting Climate Change Responses in the Executive Remuneration Plan

The company decided to introduce a new performance-linked restricted stock remuneration plan from the fiscal year ended March 2023, which was approved at the Ordinary General Meeting of Shareholders on June 22, 2022. The renumeration plan has been introduced to incentivize the company to fulfill our social responsibilities and to continuously improve our medium-to long-term performance and corporate value. As one of the management evaluation indicators, ESG elements, including our response to climate change are included. For more information, please see "4. Corporate Information, 4. Corporate Governance, (4) Remuneration of Directors and Audit & Supervisory Board Members" in the Annual Securities Report for the fiscal year ended March 31, 2022.


Annual Securities Report for the fiscal year ended March 31, 2023 (9.48MB)

Strategy


Scenario Analysis Policy and Process

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.

Selected Scenarios

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

Major Risks and Opportunities Associated with Climate Change

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

Transition Risk Assessments

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.

Selection of Business 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 : Positive impact on business
  • No change : No change or slight impact on business
  • Negative: 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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Awareness of Business Environment Under Each Scenario Impact on Businesses Based on Awareness of Business Environment Countermeasures
Current Scenario (STEPS, etc.)
Growth in oil demand is expected to gradually slow, with demand peaking in the mid-2030s and then leveling off toward 2050. Demand for natural gas is expected to grow steadily for the power and industrial sectors in emerging Asian countries, centered on China and India.

Transition Scenario (2°C equivalent/APS, etc.)
Oil demand is expected to decline by half through to 2050 amid progress towards decarbonization, mainly through electrification of the transportation sector in developed countries. Natural gas demand is expected to remain firm for the next 5 to 10 years as a substitute for coal-fired power generation. By 2050, however, demand is expected to decline to about two-thirds, centered on the power generation sector, due to the spread of renewable energies. Meanwhile, new demand for hydrogen feedstock and other applications is expected to grow over the long term.

Transition Scenario (1.5°C/NZE, etc.)
Although global demand for natural gas is expected to gradually decline after 2025 and halve between 2030 and 2050, its importance as a raw material for hydrogen is expected to rise together with the global trend toward decarbonization. Meanwhile, oil demand is expected to decline sharply after 2030, falling to about a quarter of current demand by 2050.

Current Scenario (STEPS, etc.)

Transition Scenario (2°C equivalent/APS, etc.)

Transition Scenario (1.5°C/NZE, etc.)

In our Energy segment, we are promoting continued efforts in the energy supply business, focusing on gas and LNG businesses with relatively low GHG emissions for the purpose of providing a stable supply base for sustainable growth around the world.
Accordingly, in order to enhance our risk tolerance to sudden changes in supply and demand trends, we will continue to work on improving asset value, including strengthening the competitiveness of existing business assets, reducing GHG emissions, and decarbonization initiatives, while considering the global energy and geopolitical situation.
Particularly for new projects, we will carefully select highly competitive projects, taking into account potential future carbon costs including policy changes and the introduction of carbon taxes in each country, and build a well-balanced portfolio of business assets, including implementing timely asset recycling. While contributing to the low-carbon and decarbonization of the entire value chain, we will continue to work on upstream development of natural gas, which is a transition energy and can be used as a feedstock for next-generation fuels, and to increase our liquefaction capacity. Utilizing our upstream business knowhow, and while paying attention to technological development trends and regulatory reforms in each country, we aim to realize the early commercialization of our CCS/CCUS business and geothermal business, along with our hydrogen and ammonia business, leveraging our gas upstream assets and our existing customer network.
Positive No change Negative
While faced with the dual challenge of needing to expand quantity and improve quality, renewable energy will steadily expand, and fossil fuels will remain indispensable as a primary energy source for the time being. Although oil demand is expected to peak and then remain flat or decline in all scenarios, the impact is limited due to the expected increase in the ratio of gas production in our overall crude oil and gas equity production in the future. Natural gas is an important transition energy source with relatively low environmental impact and a realistic solution to meet growing demand while addressing climate change challenges.
Although we expect strong demand for LNG/natural gas particularly in Asia in the medium term under both Transition Scenarios, there is a risk that the value of upstream assets will be impacted if demand declines under the Transition Scenario (1.5°C). Therefore, ongoing verification and monitoring of demand trends and their impact on our business is necessary.

Please scroll horizontally to look at table below.

Impact on net income and assumptions in Transition Scenarios
2°C equivalent/APS, etc. 1.5°C/NZE, etc.
FY Mar/2030
Small
FY Mar/2040
Small
FY Mar/2050
Small
FY Mar/2030
Large
FY Mar/2040
Large
FY Mar/2050
Medium
In our analysis of the Transition Scenarios in the Upstream Oil and Gas Business and LNG Business, we assume that the supply-demand balance will be reflected in commodity prices over the medium to long term due to the highly marketable nature of the commodities, and we analyze our assets with reference to the IEA World Energy Outlook (APS scenario/NZE scenario) and other market outlooks, with a focus on the downward resilience of our assets to commodity prices.
In this analysis, we assume that we will continue to hold our assets until the end of production, since the main purpose of this analysis is to assess the impact on our existing business.

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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Awareness of Business Environment Under Each Scenario Impact on Businesses Based on Awareness of Business Environment Countermeasures
Current Scenario (STEPS, etc.)
In developed countries, demand is expected to gradually decline from the 2030s against a backdrop of declining crude steel production and lower blast furnace ratios due to utilization of ferrous scrap, while demand in India and Southeast Asia is expected to grow from the late 2020s onward due to addition of blast furnaces in the region. Global demand for metallurgical coal is expected to increase moderately from current levels through to 2050.
The supply of metallurgical coal is expected to remain flat over the medium to long term as increases in new projects and other factors will be offset by the termination of existing mines, resulting in a tightening of the supply-demand balance.

Transition Scenario (2°C equivalent/APS, etc.)
Demand for metallurgical coal is expected to remain flat over the medium to long term and remain at current levels in 2050, due to further acceleration in the use of ferrous scrap and alternative raw materials in developed countries, as also expected in the Current Scenario.
On the supply side, countries are stepping up their efforts to address climate change, making it more difficult to obtain development permits and financing for new projects or expansion plans. As a result, supply is expected to decrease, and the supply-demand balance may become even tighter.

Transition Scenario (1.5°C/NZE, etc.)
Greater demand for decarbonization is expected to drive a shift towards more efficient steel use, and both crude steel production and metallurgical coal demand are expected to decline further compared to the other scenarios.
New projects or expansion plans may be more difficult to implement under the Transition Scenario (1.5°C), resulting in a decline in supply and a further tightening of the supply-demand balance.

Current Scenario (STEPS, etc.)

Transition Scenario (2°C equivalent/APS, etc.)

Transition Scenario (1.5°C/NZE, etc.)

As demand for metallurgical coal is expected to remain strong over the medium to long term, we will strive to improve the quality of our assets while maintaining stable supplies to customers. We will closely monitor changes in the external environment, and strengthen our efforts such as utilizing the methane gas produced and shifting to alternative fuels and raw materials, with a view to realize a decarbonized society together with our business partners.
No change Negative Negative
Under the Current Scenario, demand for metallurgical coal is expected to remain flat or increase slightly, and the competitiveness of our assets will be maintained, and therefore business profitability is expected to remain strong.
Under the Transition Scenarios (2°C equivalent/APS, etc., 1.5°C/NZE, etc.), new projects and expansion plans are expected to slow down on the supply side in response to declining demand, resulting in a decline in the volume of supplied. Although our assets will remain competitive, there is expected to be an increase in costs relating to the introduction of emission reduction technology, environmental compliance, and financing.
Continuous close attention must be paid to the business impact that these costs have on metallurgical coal prices, along with the business impact of policies and policy trends in each country.
Additionally, we are no longer adding to our assets that only produce thermal coal.

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Impact on net income and assumptions in Transition Scenarios
2°C equivalent/APS, etc. 1.5°C/NZE, etc.
FY Mar/2030
Large
FY Mar/2040
Small
FY Mar/2050
Small
FY Mar/2030
Large
FY Mar/2040
Small
FY Mar/2050
Small
In our analysis of the Transition Scenarios in the Metallurgical Coal Business, supply, demand, and commodity prices of steelmaking raw materials are analyzed with reference to the IEA World Energy Outlook (APS scenario/NZE scenario) and other outlooks, as well as trends toward carbon neutrality by consumers. The carbon cost of GHG emissions from the business is also taken into account.
Since the main purpose of this analysis is to determine the impact on the existing business, it is assumed that the existing business will continue to be held until the end of mining operations.

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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Awareness of Business Environment Under Each Scenario Impact on Businesses Based on Awareness of Business Environment Countermeasures
Current Scenario (STEPS, etc.)
Fossil fuel-based power generation will gradually decline over the long term, particularly in developed countries. Meanwhile, demand for new power plants is expected to continue in the medium term in some emerging countries where electricity demand will continue to grow and where renewable energy alone is not sufficient to meet supply needs.

Transition Scenario (2°C equivalent/APS, etc.)
Fossil fuel-based power generation is expected to decline at a faster rate in the medium to long term than under the Current Scenario, particularly in developed countries.
Although developed countries are shifting to renewable energy sources, a certain amount of coal-fired power generation demand is expected in emerging countries even as late as 2050. In addition, demand for gas-fired power generation as a transition energy source is expected to continue over the medium to long term in both developed and emerging countries.

Transition Scenario (1.5°C/NZE, etc.)
Electricity demand is expected to increase significantly in the medium to long term against the backdrop of rapid progress in decarbonization trends, with demand increasing by 50% in 2050 compared to the Current Scenario. Compared to the 2°C equivalent/APS, etc. scenario, fossil fuel-based electricity generation is expected to decline at a faster rate, and by 2050, power plants with decarbonization facilities such as CCUS will become mainstream. The share of renewable energy is expected to further increase, with renewable energy, mainly wind and solar, supplying the majority of electricity demand.

Current Scenario (STEPS, etc.)

Transition Scenario (2°C equivalent/APS, etc.)

Transition Scenario (1.5°C/NZE, etc.)

Amid the global trend towards low carbon and decarbonization, we will work to transform our power generation portfolio and improve quality in accordance with changes in the environment. Specifically, we intend to reduce our coal-fired thermal power footprint from our power generation capacity over the medium to long term, while increasing the ratio of renewable energy in our power generation portfolio, including hydroelectric power, to over 30% by 2030, and continue with the transformation of our power generation portfolio as necessary to achieve net zero by 2050.
In addition, as a responsible power producer, we will continue to examine ways to improve the efficiency of our existing thermal power assets, including utilizing CCUS, ammonia co-firing, and other technologies.
We will consider new gas-fired power projects, taking into account the need for gas-fired power as a transition energy source in accordance with each scenario, as well as potential future carbon costs the power supply mix, and electricity demand outlook for each region.
No change Negative Negative
The impact of changes in the external environment on our existing business is limited, as most of our power asset portfolio is based on long-term power purchase agreements—in which consideration is paid for the generation capacity rather than for generated volume. However, under the Transition Scenarios, the global trend towards decarbonization will rapidly accelerate, which may affect the business viability of some assets after power purchase agreements expire, and therefore ongoing verification and monitoring of stranded asset risks is required.

Please scroll horizontally to look at table below.

Impact on net income and assumptions in Transition Scenarios
2°C equivalent/APS, etc. 1.5°C/NZE, etc.
FY Mar/2030
Small
FY Mar/2040
Small
FY Mar/2050
Small
FY Mar/2030
Small
FY Mar/2040
Small
FY Mar/2050
Small
In analyzing the Transition Risk Scenarios, we calculate the impact by assuming that carbon costs will be passed on to off-takers in accordance with the PPA provisions during the terms of long-term power purchase agreements (PPA), and that we will review our holding policy for assets that remain in the red after the PPA ends and carbon costs are reflected. In addition, the sale of some assets based on the recycling strategy for thermal power generation assets is also factored into the analysis.

Power Generation Businesses (Gas-Fired Power Generation Business, Coal-Fired Power Generation Business, Oil-Fired Power Generation Business) as of December 31, 2023 (PDF 121KB)

Iron Ore Business

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Awareness of Business Environment Under Each Scenario Impact on Businesses Based on Awareness of Business Environment Countermeasures
Current Scenario (STEPS, etc.)
Although crude steel production in China, the world's largest producer, is expected to decline in the future, this is expected to be offset by increased production in India and Southeast Asia. We predict that global crude steel production will remain steady over the medium to long term.

Transition Scenario (2°C equivalent/APS, etc.)
With higher rates of use of electric furnaces, and an increase in production of direct-reduced iron, which mainly uses high-grade ore, we expect an increase in demand for high-grade ore, and a corresponding increase in premiums and discounts for high-grade iron ore/low-grade iron ore.

Transition Scenario (1.5°C/NZE, etc.)
In response to the growing demand for a shift to low carbon, the use of scrap iron and direct-reduced iron is expected to further expand, and crude steel production itself is expected to decrease due to more efficient steel use. Iron ore demand is expected to decrease compared to the Transition Scenario (2°C equivalent/APS, etc.).

Current Scenario (STEPS, etc.)

Transition Scenario (2°C equivalent/APS, etc.)

Transition Scenario (1.5°C/NZE, etc.)

For the foreseeable future, we will work to strengthen the competitiveness of our assets while providing stable iron ore supplies to customers, and continue to closely monitor the rate at which electric furnace production methods spread as a means of low-carbon and decarbonization in the steel industry, and the speed of change regarding new steelmaking technologies. In addition, we will strengthen efforts towards realizing a decarbonized society together with our business partners, while closely monitoring changes in the external environment.
No change No change Negative
Although crude steel production is expected to be affected by a peak-out in China in the mid-2020s, India and Southeast Asia are expected to offset the decline in China. Crude steel production and iron ore demand are expected to remain steady over the medium to long term under both the Current and Transition Scenario (2°C equivalent/APS, etc.). Under the Transition Scenario (1.5°C/NZE, etc.), iron ore demand is expected to decline relative to other scenarios. The Transition Scenario (2°C equivalent/APS, etc.) incorporates an increase in premiums and discounts for high-grade and low-grade ore, but the impact on overall earnings will be limited. A similar trend is expected under the Transition Scenario (1.5°C/NZE, etc.), however downward pressure on iron ore prices and profitability is expected due to lower demand. The business impact of policies and policy trends in each country will need to be continuously examined.

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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Awareness of Business Environment Under Each Scenario Impact on Businesses Based on Awareness of Business Environment Countermeasures
Current Scenario (STEPS, etc.)
Demand for new production facilities will decline over the medium to long term in line with a slowdown in oil demand growth; however, the timeline of this will differ by region.

Transition Scenario (2°C equivalent/APS, etc.)
Oil demand will decline earlier than under the Current Scenario due to the promotion of electrification in developed countries, dropping by half through to 2050. As a result, demand for new production facilities is expected to decline faster than under the Current Scenario.

Transition Scenario (1.5°C/NZE, etc.)
Oil demand is expected to decline sharply after 2030, and fall to about a quarter of the current level by 2050. With the rapid decline in demand, crude oil prices are expected to fall to about half by 2030 and one-quarter by 2050, compared to the Current Scenario. As a result, demand for new production facilities is expected to decline more than under the Transition Scenario (2°C equivalent/APS, etc.).

Current Scenario (STEPS, etc.)

Transition Scenario (2°C equivalent/APS, etc.)

Transition Scenario (1.5°C/NZE, etc.)

Considering the scenario of declining demand in the medium to long term, we will work to transform our businesses into a field where we can utilize the expertise we have accumulated from our existing business (e.g., floating offshore wind power).
No change No change No change
Many of our projects related to offshore oil and gas production facilities, such as FPSO facilities and drillships, that continue beyond 2030, are based on committed long-term use by customers under long-term contracts. Therefore, the impact of the Current and Transition Scenarios on existing businesses is expected to be limited. However, under the Transition Scenario (1.5°C/NZE, etc.), a significant decline in oil demand and oil prices beyond 2030 may impact the continuity of production activities of energy companies, and will require continuous verification and monitoring of the impact on business.
Gas Distribution Business

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Awareness of Business Environment Under Each Scenario Impact on Businesses Based on Awareness of Business Environment Countermeasures
Current Scenario (STEPS, etc.)
Natural gas demand is expected to increase steadily in line with rising gas demand in emerging countries.

Transition Scenario (2°C equivalent/APS, etc.)
Natural gas demand is expected to remain firm for the next 5-10 years due to its use as a substitute for coal-fired power generation, however through to 2050, demand is expected to fall to about two-thirds, with the majority of this reduction in the power generation sector, due to the spread of renewable energy. In emerging countries, gas demand is expected to increase, but grow at a slower pace than under the Current Scenario.

Transition Scenario (1.5°C/NZE, etc.)
Global natural gas demand is expected to gradually decline after 2025 and halve from 2030 to 2050. Oil demand is also expected to decline sharply after 2030, falling to about a quarter of current demand by 2050.

Current Scenario (STEPS, etc.)

Transition Scenario (2°C equivalent/APS, etc.)

Transition Scenario (1.5°C/NZE, etc.)

We will continue to work on improving asset value, including decarbonization initiatives such as biogas utilization and GHG emissions reduction. For new projects, we are working in consideration of potential future carbon costs.
No change No change Negative
Our gas distribution businesses located in emerging countries are granted exclusive long term concession rights in each of the concession areas. Under the Current and Transition Scenarios (2°C equivalent/APS), in which gas demand in emerging countries is expected to increase in the medium to long term, the impact on existing businesses is expected to be limited.
Under the Transition Scenario (1.5°C/NZE, etc.), demand for gas is expected to decline in emerging countries due to a decrease in associated gas production resulting from a decline in oil production, and a rapid increase in the share of renewable energy in the power generation sector, potentially impacting business revenues due to lower gas distribution volumes.
LNG Shipping Business

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Awareness of Business Environment Under Each Scenario Impact on Businesses Based on Awareness of Business Environment Countermeasures
Current Scenario (STEPS, etc.)
Demand for natural gas is expected to grow steadily over the long term for use in the power and industrial sectors in emerging Asian countries, and therefore, demand for operation of ships for natural gas is expected to increase.

Transition Scenario (2°C equivalent/APS, etc.)
Demand for natural gas is expected to continue in the medium to long term as a substitute for coal-fired thermal power generation, and demand for operation of ships is expected to increase through to 2050.

Transition Scenario (1.5°C/NZE, etc.)
Natural gas demand is expected to decline after the mid-2020s due to global decarbonization, and demand for ship operations is expected to decline through to 2050.

Current Scenario (STEPS, etc.)

Transition Scenario (2°C equivalent/APS, etc.)

Transition Scenario (1.5°C/NZE, etc.)

With consideration for medium- and long-term supply and demand and price trends, we will strive to maintain and improve the profitability of individual businesses, as well as working to ensure stable and streamlined operations, and at the same time identify and capture growth opportunities in new businesses including next-generation fuel tankers and new fuel carriers.
No change No change Negative
In the LNG shipping business, most of the recent projects have secured earnings based on long-term contracts. Therefore, in all scenarios, the impact on the Company's earnings will be limited in the near term. However, under the Transition Scenario (1.5°C/NZE, etc.), there is a risk that the value of assets will be impacted after the end of long-term chartering, as demand is expected to decline toward 2050, and the impact on our business requires close monitoring.
Renewable Energy Business

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Awareness of Business Environment Under Each Scenario Impact on Businesses Based on Awareness of Business Environment Countermeasures
Current Scenario (STEPS, etc.)
Demand is expected to increase substantially over the medium to long term in response to low carbon and decarbonization trends and energy security.

Transition Scenario (2°C equivalent/APS, etc.)
Demand is expected to increase substantially at a faster rate than in the Current Scenario. Electrification and other factors, especially in developed countries such as the U.S. and Australia, will drive demand growth, and by 2050 the majority of electricity demand is expected to be met by renewable energy sources.

Transition Scenario (1.5°C/NZE, etc.)
Rapid progress in the global low carbon and decarbonization trend is expected to drive the spread of electrification, and electricity demand will rise significantly in the medium to long term, increasing by 50% in 2050 compared to the Current Scenario. The share of renewable energy is expected to further increase compared to the Transition Scenario (2°C equivalent/APS, etc.), with the majority of electricity demand expected to come from renewable energy sources, mainly wind and solar, by 2050. Continued large-scale investments will be required for the promotion of renewable energy, and demand is also expected to increase for power grid reinforcement, storage batteries, demand response, etc., to ensure the stability of power networks in each region.

Current Scenario (STEPS, etc.)

Transition Scenario (2°C equivalent/APS, etc.)

Transition Scenario (1.5°C/NZE, etc.)

In line with the global trend towards decarbonization, we will work to transform and improve the quality of our power generation asset portfolio in response to the changing environment. Specifically, in order to raise the ratio of renewable energy in our power generation portfolio to over 30% by 2030, we will engage in large-scale renewable energy projects including solar power, onshore wind power, and offshore wind power, as well as local production for local consumption type distributed renewable energy projects, to meet local demand.
In addition, in view of the potential for intensified competition among operators, we will aim to capture added value by establishing a renewable energy business cluster, leveraging our comprehensive strengths to engage in peripheral fields including the production and sale of green hydrogen, ammonia, and methanol using renewable energy, clean energy sales, EV infrastructure, and offshore wind power infrastructure.
Positive Positive Positive
While the renewable energy industry is expected to experience significant growth in demand, competition is likely to intensify as the number of operators in the segment grows.
Meanwhile, supply-demand balance adjustment needs are expected to expand in some regions in order to cope with grid instability caused by the rapid increase in the rate of renewable energy sources. In addition, the energy solution business utilizing digital technology is also expected to expand.
The Electric Vehicle (EV) market is also expected to grow with the support of government policy in various countries, and demand for clean power is expected to grow.

Power Generation Businesses (Renewable Energy Business) as of December 31, 2023 (PDF 121KB)

Next-Generation Energy Business

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Awareness of Business Environment Under Each Scenario Impact on Businesses Based on Awareness of Business Environment Countermeasures
Current Scenario (STEPS, etc.)
Demand for biofuels and other next-generation energy is expected to continue to grow strongly over the medium to long term, mainly as a replacement for liquid fossil fuels.

Transition Scenario (2°C equivalent/APS, etc.)
Demand for biofuels is expected to grow rapidly in the medium term, and while the growth rate will slow over the long term, demand for biofuels for aviation and marine transportation is expected to continue to expand. Hydrogen and fuel ammonia are expected to grow, replacing natural gas in the medium to long term.

Transition Scenario (1.5°C/NZE, etc.)
Demand for biofuels will grow more than the Transition Scenario (2°C) in the medium term, but will then plateau. However, demand for aviation and shipping applications is expected to grow steadily over the medium to long term. Under the Transition Scenario (1.5°C/NZE, etc.), hydrogen and fuel ammonia demand is expected to grow much faster than under the Transition Scenario (2°C equivalent/APS, etc.) through to 2050.

Current Scenario (STEPS, etc.)

Transition Scenario (2°C equivalent/APS, etc.)

Transition Scenario (1.5°C/NZE, etc.)

In the biofuel business, which is expected to be the center of demand in the medium term, we are working to expand our business leveraging the technology and expertise of our existing investees, after assessing the potential environmental impact. In addition, we are moving forward with initiatives in hydrogen and fuel ammonia, geothermal power generation projects, and other areas, which we view as realistic solutions for realizing a decarbonized society, and we expect to be in great demand in the long term. While these areas are expected to become next-generation alternative energy sources, further technological innovation is necessary for full-scale expansion. Accordingly, we have formed a specialized in-house team and are accelerating these efforts.
Positive Positive Positive
There is a significant expectation that demand for next-generation energy will grow, and promising next-generation energy technologies are in the process of being developed. Along with the development of new government programs, etc. in each country, we expect further accelerated investment in the development of new technologies and lower costs of producing decarbonized energy, stimulating further growth in demand and creating new business opportunities.
Forest Resources Business

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Awareness of Business Environment Under Each Scenario Impact on Businesses Based on Awareness of Business Environment Countermeasures
Current Scenario (STEPS, etc.)
Demand for forest resources (timber, woodchips, etc.) is expected to grow steadily in line with global population growth, and expansion in housing and paper markets in emerging countries, especially in Asia. Additionally, the value of forest resources, mainly plantation timber, is expected to increase due to the tightening of natural forest protection policies and logging regulations in each country.

Transition Scenario (2°C equivalent/APS, etc.)
As in the Current Scenario, demand for forest resources such as woodchips, which are used as a raw material for housing materials and paper, is expected to increase steadily.
In addition, heightened interest in the CO2 absorption capabilities of forest resources and their characteristics as renewable natural materials is expected to result in growth in the market for forest-based emission credits, an increase in the price of emission credits, and an expansion of the market for high value-added wood-derived products such as bio-chemicals.

Transition Scenario (1.5°C/NZE, etc.)
Carbon prices in developed countries are expected to increase by a factor of 1.5 compared to the Transition Scenario (2°C equivalent/APS, etc.), as CO2 emission reduction initiatives are strengthened, and the market for forest-based emission credits is expected to expand, emission credit prices are expected to rise, and the market for wood-based high-value-added products such as bio-chemicals is expected to expand.

Current Scenario (STEPS, etc.)

Transition Scenario (2°C equivalent/APS, etc.)

Transition Scenario (1.5°C/NZE, etc.)

We will expand our forest resources business by accumulating assets based on profitability and risk to serve as a foundation for the creation of environmental value and industrial solutions to social issues. We will aim to maximize the value of forest resources not only by expanding paper and housing applications and emission credit creation, but also by developing new needs for timber materials.
Positive Positive Positive
Under the Current Scenario, an increase in demand is expected for forest resources, especially timber, as renewable and natural materials that contribute to climate change response. Under the Transition Scenario, demand for emissions trading is expected to increase and the price of emission credits is expected to rise, and biochemicals derived from forest resources are expected to be effectively utilized, which we expect will boost profitability.

Physical Risk Assessments

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.

STEP1

Selection of investments highly impacted by physical risks

  • Among our portfolio companies, we selected the top 100 companies with the largest investable assets directly impacted by physical risk and the companies with profits of at least 5 billion yen in the year ended March 31, 2022. From the selected companies, we considered the overall nature of their business, the degree of geographical diversification of their assets, and other factors, and excluded the companies considered to have a low financial impact from physical risks.
  • Finally, we selected 65 companies considered to be highly impacted by physical risks.

STEP2

Future risk analysis using external consultants' analysis tools

  • We have mapped the locations of key assets held by the 65 selected companies.
  • We used ERM's physical risk analysis tool to analyze the increase/decrease in physical risk impact in the following cases:
    - 2030 and 2050 cross section
    - 2°C and 4°C scenarios
  • Physical risk hazards analyzed: flooding, coastal flooding, extreme cold, extreme heat, tropical cyclones, landslides, wildfires, water stress and drought.

STEP3

Review of countermeasures and appropriate actions based on analysis results

  • Based on the results of the physical risk analysis, we reviewed the countermeasures, including:
    - Implementing countermeasures for each risk on a case-by-case basis
    - Developing and annually reviewing BCP
    - Obtaining insurance coverage, etc.
  • We minimize the impact of each physical risk on our business by implementing appropriate countermeasures for each business.
  • Chronic physical risks are regularly monitored, and countermeasures are implemented according to the situation.

Analysis Results

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

Physical Risk Assessments

Summary of Major Physical Risks Affecting the Company under the 4°C Scenario, and Measures to Address Them

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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  Risk level Risk overview Countermeasures
  Current 2030 2050    
Extreme heat
  • Increased risk of prolonged periods of extreme heat over any given year.
  • Increased risk of adverse effects of heat on employee health and safety, reduced labor productivity, and increased operating costs due to damage to equipment.
  • Implementation of revisions to working methods during periods of extreme heat, such as working earlier in the morning.
  • Installation of more efficient cooling systems.
  • Regular equipment inspections.
Wildfires
  • Increased risk of contract default due to disruption of logistics network, damage to facilities, or reputational risks as a result of wildfires.
  • Formulation of emergency response plans.
  • Consideration and securing of alternative transportation routes.
  • Implementation of facility protection measures, such as burying treated water pipes and using flame retardant paint.
Water stress & drought
  • Risk of increased water stress and water use restrictions in some areas.
  • Risk of higher water procurement costs from reduced productivity and alternative water sourcing if water use is restricted.
  • Formulation of water management strategies.
  • Establishment of water collection and storage facilities.
  • Consideration and securing of alternative transportation routes for water procurement.
Tropical cyclones
  • In areas where tropical cyclones are currently frequent, there is a risk that they will become larger and occur even more frequently.
  • Risk of damage to infrastructure facilities caused by wind storms, and reduced revenues due to production stoppages caused by hazardous working conditions.
  • Surveying of facility systems for durability against high winds.
  • Ensuring backup power supplies.
  • Securing a location to evacuate equipment prone to coming loose in high winds.
  • Fixing of plywood over windows to protect them from damage caused by high winds.
Flooding
  • Increased risk of damage from flooding along coastal and river areas from heavy rains and rising sea levels due to greater depth of inundation. Specifically, revenue damage due to damage to facilities, contract default risk due to production delays and supply delays caused by the severance of supply and raw material procurement routes, and associated reputational risks.
  • Installation of flood diversion barriers and other measures to protect manufacturing sites from flooding.
  • Ensuring alternative modes of transportation.
  • Training for on-site personnel and development of flood-specific evacuation plans.
  • Establishment of weather forecast monitoring systems and early warning systems for flooding.

Risk Management


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.


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.

Metrics & Targets


GHG Reduction Targets

  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)

Targets
(Metrics)
Scope FY Mar/2020
(Baseline year)
FY Mar/2021 FY Mar/2022 FY Mar/2023
1. Halve GHG
(GHG impact)
Scope1/Scope2/Scope3Category 15 (Investment) 34 37 38 34
Breakdown GHG Emissions: 36 39 40 37
Reduction contribution and absorption amount: 2 2 2 3
2. Halve GHG
(GHG emissions)
Scope1/Scope2 of the Company and its consolidated subsidiaries (excluding un-incorporated JVs*) 0.8 0.6 0.6 0.6
3. Increase ratio of renewable energy Renewable energy as a percentage of total power generation capacity in our portfolio 14% 15% 15% 23%

*un-incorporated Joint Ventures

Breakdown of GHG emissions by target/forecast boundary

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(Unit: Million t-CO2e)

Targets Boundary FY Mar/2020
(Baseline year)
FY Mar/2021 FY Mar/2022 FY Mar/2023 FY Mar/2026 FY Mar/2030 2050 vision
Actual Forecast*1
(Underlined figures are Med.-term targets)
Halving GHG emissions by 2030 (1) Mitsui/consolidated Scope 1+2 0.8 0.6 0.6 0.6 0.6 0.4 Net zero
Vs baseline year 100% 75% 78% 76% 81% 50% 0%
Halve GHG impact by 2030 (2) Un-inco. JV Scope 1+2 and Scope 3 category 15 35 39 40 36 33 31  
Baseline year emissions*2 43           Net zero
Vs baseline year*3 - 92% 95% 86% 78% 72% 0%
(1)+(2) 36 39 41 37 33 31 Net zero
(3) Reduction contribution, absorption/fixed amount -2 -2 -2 -3 -6 -14  
(1)+(2)+(3) 34 37 39 34 27 17  
Vs baseline year 100% 109% 113% 100% 79% 50%  

*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.

Breakdown of GHG Emissions by Business

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.

Breakdown of GHG Emissions by Business

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.

Path to Halving GHG Impact

*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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Evaluation Target FY Mar/2023 Baseline Formula
Renewable Energy 2,163 thousand tons Average energy mix of each country
  • Annual power generation (MWh) x emission factor (tCO2e/MWh) x our investment ratio (%)
  • Only the reduction contribution from the operation phase, which accounts for the majority of emissions, is calculated. Emission factors are based on GHG Protocol and International Energy Agency (IEA) Emissions Factors, etc.
  • Assets in operation that have been sold to third parties after we invested in and developed them are also included in the actual results, as we consider them to be our contribution to the reduction. This accounts for 116 thousand tons of the actual results for FY Mar/2023
Emission Credits 284 thousand tons Before project implementation
  • Annual emission credits generated* (tCO2e) x our investment ratio (%)

    *Annual emission credits include emission credits sold to third parties. Emission credits used to offset our own GHG emissions are not included.
    *Includes the amount of emission credits generated through forestry projects (including those expected to be certified).

Next Generation Fuels 10 thousand tons Before project implementation
  • {(GHG emissions over the life cycle of fossil fuels, etc., of which consumption is reduced by our next-generation fuel supply (tCO2e)) - (GHG emissions over the life cycle of our next-generation fuel business (tCO2e))} x our investment ratio (%)
  • In cases where there is no significant difference from the life-cycle comparison or it is difficult to obtain a reasonable basis for calculation, the reduction contribution is calculated only for the fuel consumption stage for simplicity.
Absorption Amount

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Evaluation Target FY Mar/2023 Baseline Formula
Forests 245 thousand tons Before project implementation
  • Annual amount of CO2 absorbed (tCO2) x our investment ratio (%)
  • We calculate the CO2 absorbed by our forestry projects. Emission credits created through forestry projects are calculated as emission credits for the amount of reduction contribution.

GHG emissions (Scope 3) results

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(Unit: Million t-CO2e)

Category FY Mar/2023
1 Purchased goods and services 35.3
Breakdown by segment Mineral & Metal Resources 0.2
Energy 3.1
Machinery & Infrastructure 2.5
Chemicals 12.5
Iron & Steel Products 7.8
Lifestyle 9.2
2 Capital goods 0.8
3 Fuel-and-energy-related activities not included in Scope 1 or 2 1.5
4 Upstream transportation and distribution 3.2
5 Waste generated in operations 0
6 Business travel 0.1
7 Employee commuting 0
8 Upstream leased assets Not applicable
9 Downstream transportation and distribution Included in Category 4
10 Processing of sold products 32.2
Breakdown by segment Mineral & Metal Resources 32.2
11 Use of sold products 83.5
Breakdown by segment Mineral & Metal Resources 20.1
Energy 37.0
Machinery & Infrastructure 26.0
Chemicals 0.4
12 End-of-life treatment of sold products 0.2
13 Downstream leased assets 1.2
14 Franchises Not applicable
15 Investments 33.6
Total 191.5
  • 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

Initiatives to reduce GHG emissions in the value chain

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.

Examples of initiatives to reduce GHG emissions

  • Segments :
  • Mineral & Metal Resources
  • Energy
  • Machinery & Infrastructure
  • Chemicals
  • Iron & Steel Products
  • Lifestyle
  • Innovation & Corporate Development
Steel production value chain

Mining & procurement

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Introduction and sale of low-carbon mining machinery

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Introduction of renewable energy in mining operations

Transportation

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Supply of next-generation marine fuel*

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Introducing next-gen equipment to improve marine fuel efficiency

—We Tech Solutions, The Switch Engineering, PowerX

Production

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Low-carbon lumping process for raw steel materials

—Binding Solutions

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Direct reduced iron production

—JV with Kobe Steel, Ltd.

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Electric furnace steel production & scrap supply

—Siam Yamato Steel, Sims, MM & Kenzai Corporation

* Methanol, ammonia, etc.

Gas value chain

Natural gas production & liquification

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Assessing and pursuing introduction of CCS

—Cameron LNG/Hackberry CCS

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Supplying low-carbon energy

—Clean ammonia, RNG: Terreva

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Assessing & introducing efficient/green energy supply at liquification plants, etc.

—Cameron LNG

Transportation & storage

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Optimization of ship fuel economy

—Bearing.ai

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Ammonia FSRU(*1)

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Advanced pipeline repair technology to prevent GHG leakage

—STATS

Sale, usage, recovery

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Provision of CCSaaS(*2)

—Storegga/Acorn CCS, JALMIMI/Assessing commerciality at Angel CCS

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Pursing development and introduction of CO2 vessels

—CO2 storage and liquefied transportation by vessels in Malaysia

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High-efficiency gas thermal power plant operations

*1 Floating storage and regasification unit

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

Automotive value chain

Production, assembly, sales

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ZEV* manufacturing & sales

—CaetanoBus, Letenda

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Parts production & sales for EVs

—Gestamp

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Battery systems production for electric mobility

—Forsee Power

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Production & sale of high-pressure hydrogen tanks

—Hexagon Purus

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Stable supply of battery raw materials

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Material processing for EV motors

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ZEV* demand creation/solution provision

—Edmonton Airport ZEV adoption

Utilization

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Hydrogen station

—FirstElement Fuel

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EV charging system development & supply

—The Mobility House

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Next-gen ethanol generation

—LanzaTech, Galp/HVO

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Production & sale of biodiesel fuel solution equipment

—Optimus

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Large fuel cell vehicle green hydrogen supply

—Hiringa

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EV commercial vehicle fleet management

—Penske Truck Leasing, MITTA, others

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Green hydrogen production

—Lhyfe, Norwegian Hydrogen

Recycling

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Metals (ferrous & nonferrous) recycling

—Sims, MM & Kenzai Corporation

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Lithium-ion battery recycling

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Tire recycling

—Penske Truck Leasing, others

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

Internal Carbon Pricing System

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.

Environmental ("Green") Business Assessment Working Group

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.

Other Environmental Indicators/Targets

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.


Environmental Performance Data

Collaborating with Stakeholders


Participation in Initiatives

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.

Initiatives


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
A controlled environment agriculture facility operated by Zero of ItalyA controlled environment agriculture facility operated by Zero of Italy

In March 2022 we became involved in a controlled environment agriculture (CEA) business in the Middle East. Together with retailer Tamimi Markets of Saudi Arabia, and Zero SRL, an Italian CEA business operator, we established a joint venture and will launch a pilot project to verify the production and sales capabilities of facilities for growing crops in a controlled environment, in anticipation of future large-scale production. Although the consumption of fresh produce is on the rise in the Middle East, the harsh local environment is an issue in raising levels of food self-sufficiency.
In March 2023, we invested in ZERO. We will promote the development of our CEA business not only in the Middle East but also throughout the world.
CEA facilities use less water to grow plants by controlling the volume of water needed (resulting in about a 90% reduction in water use compared to open-field cultivation). They generate 45% less CO2 emissions, and offer stable supplies of produce without being affected by the weather. Due to the close proximity from farm to shelf, food loss during transportation, and CO2 emissions (food mileage) from food transportation can both be reduced.
Due to growth in the world population, it is said that the area of cultivated land per person will decline by around 25%* by the year 2050, compared with 2005. Given this background, the need for low-environmental-impact agricultural production is expanding, and with the growing awareness of environmental and social issues in agricultural production, such as the visualization of food chains, more sustainable agricultural productivity is needed.
By enabling the local production and consumption of fresh vegetables and fruit through the CEA business, we will contribute to improving the local levels of food self-sufficiency, quality, and safety and security.

*United Nations "World Population Prospects 2019 Edition"; Ministry of Agriculture, Forestry and Industry "World Food Supply and Demand Projections for 2050 (2019)"

Renewable Energy

  • 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 December 31, 2023, renewable energy, including hydroelectric power, accounted for approximately 29% of Mitsui's total power generating capacity of 10.9GW.

Power Generation Businesses

Please scroll horizontally to look at table below.

(As of December 31, 2023)

Energy resources Net generation capacity (Mitsui's share) (MW) * Ratio Target
Natural gas 5,470 50% Less than 70%
Coal 2,077 19%
Oil 258 2%
Renewable Energy 3,103 29% More than 30%
breakdown Solar 937    
Hydropower 816
Wind 1,328
Solar thermal 15
Biomass 5
Geothermal 2
Total 10,908 100% 100%

* Including assets under construction

Please refer to the link below for more information.


Power Generation Businesses (Renewable Energy Business, Gas-Fired Power Generation Business, Coal-Fired Power Generation Business, Oil-Fired Power Generation Business) as of December 31, 2023 (PDF 121KB)

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.

Alternative Fuels

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.

Hydrogen Related

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
Delivering green hydrogen Delivering green hydrogen

On April 2022, we invested in French green hydrogen producer Lhyfe SA, established in 2017. Its first plant with wind farm started to operate commercially in 2021. The company's commercial pipeline is 9.8GW of total green hydrogen production capacity for both mobility and industry usage.
Under its "Green Deal" policy, the European Union has set a target of achieving net zero emissions by 2050, as well as installation of 40 GW of renewable hydrogen electrolyzers by 2030. Systems are being designed and introduced to encourage the use of hydrogen. Through our equity participation in Lhyfe, which produces green hydrogen locally for local consumption, we will contribute to the enhancement of Lhyfe's corporate value by developing customers and leveraging synergies with its existing hydrogen-related business. Furthermore, we will establish a hydrogen earnings base in Europe and contribute to the accelerated reduction of GHG emissions via the development of the green hydrogen industry there.

Decarbonization Solutions for the Mobility Sector

  • Performance Materials Business Unit
Hydrogen Cylinders, Distribution Module, and Mobile Hydrogen Refueler Hydrogen Cylinders, Distribution Module, and Mobile Hydrogen Refueler

We have agreed to subscribe for convertible loan issued by Hexagon Purus ASA ("Purus"), a Norwegian company which engages in the manufacture of compressed type 4 hydrogen gas cylinders and systems used in fuel cell electric vehicles (FCEVs) and in the on-road distribution of hydrogen, and which is also involved in the vehicle integration business, and the manufacturing of battery systems for heavy-duty vehicles.
Since 2016, we have been investing in and collaborating with Hexagon Composites ASA, the world's leading manufacturer of carbon fiber reinforced plastic high-pressure gas cylinders. As a subsidiary of Hexagon Composites ASA, Purus has expertise in the manufacture of compressed hydrogen gas cylinders, the design of hydrogen supply systems using these cylinders, and commercial vehicle integration. It has continually enhanced its technology development capabilities, while building a customer base as a business company engaged in the provision of decarbonization solutions for the mobility sector, especially hydrogen-based solutions. Governments in Europe, the United States, and other parts of the world are currently taking concrete steps in response to climate change, including the establishment of subsidy programs, the introduction of restrictions on vehicles with internal combustion engines, and the provision of incentives for purchases of zero emission vehicles (ZEVs). One of these solutions is the use of FCEVs, especially for trucks, buses, and other commercial vehicles. There is also likely to be increased demand for on-road distribution of hydrogen from the production site to the point of distribution. Mitsui will also leverage its strategic alliance with Purus to create new business opportunities relating to decarbonization in the mobility sector in collaboration with Mitsui's business and customer bases. In addition to raising the enterprise value of Purus, Mitsui will contribute to the shift to zero-emission mobility, including not only commercial vehicles, but also in the maritime, rail, and aviation sectors.

Biofuels

Agricultural Biomass Supply Chain Management Business in India

  • Energy Solutions Business Unit
Rice straw processing at Kulbucharan Briquettes plant (Punjab state) Rice straw processing at Kulbucharan Briquettes plant (Punjab state)

We are an investor in Punjab Renewable Energy Systems Pvt. Ltd. ("PRESPL"), a biomass supply-chain management company in India.
India is one of the world's leading agricultural powers. One of the major causes of air pollution in India today is the practice of burning straw stubble and other agricultural residues left after crops have been harvested. To help address this problem, the Indian government has introduced policies to promote the effective utilization of non-edible resources such as biomass residue that does not compete with food. The biomass energy market in India is expected to further expand. Since its start in 2011, PRESPL has utilized the strong network that it has built up with local farmers. The company is expanding its operations in a range of businesses, from the collection and supply of agricultural biomass to the manufacture of briquettes from agricultural biomass and the supply of biomass fuels.
We will use the synergies with our wide range of business assets to support the growth of PRESPL's business and engage in the biofuel business based on agricultural residues in India, and at the same time expand our biofuel business on a global scale. This will help solve air pollution and other societal issues in India, and will also contribute to solving global issues such as global warming.

Fuel Ammonia

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

Electricity Resource Development and Power Management

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.

Natural Gas Electricity Generation

  • 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.

EV (Electric Vehicles)

  • 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.

ZEV (Zero Emission Vehicle) Bus Operations in Europe


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

Industrial Operations & Automation

  • Corporate Development Business Unit

+Automation Inc. ("+A"), our subsidiary, is a logistics robotics services company that addresses issues warehouse operators face, such as the growing complexity of operations due to diversified consumer needs and labor shortages, by leveraging Mitsui's global network-based robot procurement capabilities and the knowledge of its logistics subsidiaries, GLP Japan Inc.'s customer network as a leading logistics real estate company, and Toyota Industries Corporation's engineering expertise as a global logistics solutions provider. With the number of robots installed having exceeded 3,000 as of June 2023, +A is accelerating its service deployment. It is working to further add value through providing "+Hub", a proprietary warehouse execution system that enables the linkage of a variety of robots, material handling equipment and logistics systems. Nowadays, since it is normal for consumers to have anything they could ever want delivered directly to them, it is essential to build sustainable logistics services. Through "Robotics as a Service (RaaS)," a subscription-type service that provides operational design, system development, and utilization support that is tailored to customer's needs, +A is engaged in bringing satisfaction and joy to people working on the front lines of logistics, while enhancing the logistics industry.

Industrial Operations & Automation

Circular Economy/Reuse, Recycle


Circular Economy: Initiatives

Air Quality

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.

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.

Materials

Development of a Recycled Polypropylene Manufacturing Business

  • Performance Materials Business Unit
Recycled polypropylene resin, Existing technology (The past), PureCycle technology (The future) Recycled polypropylene resin
Existing technology (The past), PureCycle technology (The future)

We are working with U.S. company PureCycle Technologies, Inc. ("PCT") on the joint development of a recycled polypropylene resin production project in Japan.
Further recycling and utilization of plastics are required in Japan to deal with ocean plastic pollution and climate change. Polypropylene ("PP") resin is widely used to produce packaging materials and automobile parts, but the recycled PP has limited application due to the residue of additives, such as colorants which is difficult to remove from the resin.
PCT holds IPs to produce a recycled PP resin called Ultra-Pure Recycled Polypropylene (UPRP) from waste plastic, which has similar qualities to virgin resin. In April 2023, PCT completed the construction of its first plant in Ohio, in the U.S., with an annual production capacity of 50,000 tons UPRP. PCT has already sold more than 20 years' worth of recycled PP resin output from its upcoming plant, and is also planning to build large-scale recycling plants in Augusta, Georgia, in the U.S. and in Antwerp, Belgium.
By promoting this joint project, we aim to expand the use of UPRP for consumer goods, food containers, automobile interiors, and other applications. By establishing a supply chain that spans from the securing of supplies of waste plastic, to the manufacture of UPRP, and the supply to customers, we will help to reduce waste plastic and establish a circular economy.

Green Buildings

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

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

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 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.


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

width="100%" class="module_image" alt="Mitsui's Forests" src="/jp/en/sustainability/environment/climate_change/__icsFiles/artimage/2022/07/28/dje_3f2/86_forest-1.jpg" />


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