Sojitz Corporation - Climate Change 2019 · Sojitz Corporation - Climate Change 2019 C0. Introduction C0.1 (C0.1) Give a general description and introduction to your organization

Sojitz Corporation - Climate Change 2019

C0. Introduction

C0.1

(C0.1) Give a general description and introduction to your organization.

Sojitz Corporation was formed out the union of Nichimen Corporation and Nissho Iwai Corporation, both companies that boastincredibly long histories. For more than 150 years, our business has helped support the development of countless countries andregions. Today, the Sojitz Group consists of approximately 400 subsidiaries and affiliates located in Japan and throughout the world,developing wide-ranging general trading company operations in a multitude of countries and regions. As a general trading company,the Sojitz Group is engaged in a wide range of businesses globally, including buying, selling, importing, and exporting goods,manufacturing and selling products, providing services, and planning and coordinating projects, in Japan and overseas. The Groupalso invests in various sectors and conducts financing activities. The broad range of sectors in which Sojitz operates includes thoserelated to automobiles, plants, energy, mineral resources, chemicals, foodstuff resources, agricultural and forestry resources,consumer goods, and industrial parks.

C0.2

(C0.2) State the start and end date of the year for which you are reporting data.

Startdate

End date Indicate if you are providing emissions data for pastreporting years

Select the number of past reporting years you will be providingemissions data for

Row1

April 12018

March 312019

No <Not Applicable>

C0.3

(C0.3) Select the countries/regions for which you will be supplying data.AustraliaChinaIndonesiaJapanMalaysiaPhilippinesRussian FederationSingaporeSri LankaThailandUnited Kingdom of Great Britain and Northern IrelandUnited States of AmericaViet Nam

C0.4

(C0.4) Select the currency used for all financial information disclosed throughout your response.JPY

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C0.5

(C0.5) Select the option that describes the reporting boundary for which climate-related impacts on your business are beingreported. Note that this option should align with your consolidation approach to your Scope 1 and Scope 2 greenhouse gasinventory.Equity share

C1. Governance

C1.1

(C1.1) Is there board-level oversight of climate-related issues within your organization?Yes

C1.1a

(C1.1a) Identify the position(s) (do not include any names) of the individual(s) on the board with responsibility for climate-related issues.

Position ofindividual(s)

Please explain

ChiefExecutiveOfficer(CEO)

The Board of Directors, chaired by the Chairman of the Board, is the highest decision-making body reviewing and resolving fundamental policies andmost important cases , including renewable energy and LNG projects related to climate change measures, concerning the management of theGroup The Board of Directors also supervises business execution through proposals of important matters and regular reports from the executingbody.

C1.1b

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(C1.1b) Provide further details on the board’s oversight of climate-related issues.

Frequencywithwhichclimate-relatedissues areascheduledagendaitem

Governancemechanismsinto whichclimate-related issuesare integrated

Please explain

Scheduled– somemeetings

Reviewing andguidingstrategyReviewing andguiding majorplans of actionReviewing andguiding riskmanagementpoliciesReviewing andguiding annualbudgetsReviewing andguidingbusiness plansSettingperformanceobjectivesMonitoringimplementationandperformance ofobjectivesOverseeingmajor capitalexpenditures,acquisitionsanddivestituresMonitoring andoverseeingprogressagainst goalsand targets foraddressingclimate-relatedissues

Managing Environmental and Social Risk =Risk Management by the Sustainability Committee / Reports Submitted to the Board ofDirectors (Supervisory Body)= Sojitz Group classifies and defines the many risks associated with our businesses according to ourBasic Code of Corporate Risk Management, and we establish a risk management policy and management plan for these risks eachyear, based on a resolution by the Board of Directors. Among these risks, countermeasure policy and initiatives regardingenvironmental and social risk are deliberated by the Sustainability Committee. These policies and initiatives may then be put intoaction following a report to the Management Committee and Board of Directors. Deliberation by the Sustainability Committee Sojitzhas established six Key Sustainability Issues (Materiality) (human rights, environment, local communities, resources, humanresources, and governance) which all organizations are expected to address, as well as accompanying CSR policies. In establishingthese focus areas and policies, we referenced international standards—such as the SDGs to be met by 2030—and identified issuesfacing our business in the long term, including environmental issues like climate change. Specifically, the Sustainability Committeedeliberates policies related to response to environmental and social risk, climate change countermeasures, promotion of supply chainCSR, ESG disclosure, environmental ISOs, promotion of the Sojitz Wood Procurement Policy, social contribution activities, and otherCSR topics. Establishing Action Plans for Departments and Offices The policies and items resolved by the CSR Committee andreported to the Management committee and Board of Directors are made known to employees not only through the company intranet,but also through regularly held briefing sessions with each department, organized by the CSR Committee secretariat. In addition toexamining a project’s business plan, deliberation on all business investments and loans require projects to be analyzed andevaluated for risks to the environment (climate change-related risks) and risks to society (the risk of impacting local residents, laborsafety-related risks, etc.) A project’s value must be confirmed from a sustainability perspective prior to resolution.

C1.2

(C1.2) Provide the highest management-level position(s) or committee(s) with responsibility for climate-related issues.

Name of the position(s) and/orcommittee(s)

Responsibility Frequency of reporting to the board on climate-relatedissues

Sustainability committee Both assessing and managing climate-related risks andopportunities

More frequently than quarterly

C1.2a

(C1.2a) Describe where in the organizational structure this/these position(s) and/or committees lie, what their associatedresponsibilities are, and how climate-related issues are monitored (do not include the names of individuals).

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・ Sustainability Committee　

Important matters concerning Sojitz Group’s sustainability are deliberated by the Sustainability Committee, chaired by the President &CEO.

The Sustainability Committee is an executing body directly under the President & CEO. Its members include the CFO, the COO incharge of Corporate Planning and Sustainability, corporate officers in charge of executive management, and the COO in charge ofHuman Resources, General Affairs, and IT Operations. Including the CEO, the membership includes three Directors. Additionally, oneAudit & Supervisory Board Member attends meetings as an observer. Information deliberated and discussed by the committee is laterreported to the Board of Directors and the Management Committee.

・ Organizations to Promote Sustainability

The Corporate Sustainability Office is an organization dedicated to promoting sustainability, under the management of the ExecutiveOfficer in charge of Corporate Planning. The organization functions as secretariat to the Sustainability Committee and works togetherwith relevant Sojitz Group organizations on sustainability-related efforts.

・ Management of Environmental/Social Risk (including Climate Change)

= Management through the Sustainability Committee and Management Committee; reporting to the Board of Directors, whichoversees committee operations =

We categorize and define the many risks to which Sojitz Group’s businesses are exposed, in accordance with the basic rules of riskmanagement. Additionally, the Board of Directors resolves a risk management policy and plan each year, which is tailored to thoserisks.

For risks that can be categorized as environmental or social risks—including climate change-related risks, we implementcountermeasures and policies which have been both discussed by the Sustainability Committee and reported to the ManagementCommittee and Board of Directors each quarter.

＝ Sustainability Committee Discussions＝

Sojitz has set 6 Key Sustainability Issues (Human Rights, Environment, Local Communities, Resources, Human Resources, andGovernance) and policies for work on these issues. In identifying these issues and setting policies, we referred to international norms(such as the SDGs, which we aim to meet by 2030) and selected long-term issues related to our business (such as climate change,which we address through the Key Sustainability Issue of “Environment.”)

Concrete examples of the policies discussed by the Sustainability Committee include those regarding response toenvironmental/social risk, climate change countermeasures, promotion of supply chain sustainability, ESG disclosure, environmentalISOs, promotion of our wood procurement policy, and social contribution activities.

The Sustainability Committee primarily discusses methods for collecting and managing environmental data on energy usage, CO2emissions, waste generation, water usage, etc., and ways to reduce these amounts; understanding of KPIs including those for CO2emissions, as described in Scope 1-3; scenario analysis of power generation and coal businesses; disclosure of the company’sdecision to stop investment in coal-fired power businesses; disclosing the company policy to reduce thermal coal interests by half ormore before 2030; and disclosing that the company will not acquire any new thermal coal interests. In this way, we aim to continue totake responsibility for climate change in relation to our business.

We have set sustainability goals aligned with 6 Key Sustainability Issues for each department and for the company as a whole. TheSustainability Committee also monitors progresses on each goal.

＝Supervision by the Board of Directors＝

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The Sustainability Committee met a total of five times during FY2018. They reviewed the company’s response toenvironmental/social issues including climate change and evaluated investment projects deliberated by the Finance and InvestmentDeliberation Council from a sustainability perspective. They also monitored progress on each of our targets.

The Sustainability Committee regularly reported the contents of these meetings to the Board of Directors (the supervisory body to thecommittee). The Board of Directors then provided concrete instruction to the committee, such as asking them to assess impact on thecompany based on scenario analysis and to construct an environmental/human rights risk management framework for supply chains.

C1.3

(C1.3) Do you provide incentives for the management of climate-related issues, including the attainment of targets?Yes

C1.3a

(C1.3a) Provide further details on the incentives provided for the management of climate-related issues (do not include thenames of individuals).

Who is entitled to benefit from these incentives?Board/Executive board

Types of incentivesMonetary reward

Activity incentivizedEmissions reduction project

CommentRemuneration of Directors is comprehensively determined by taking into account business results and non-financial aspects ofperformance (including a response to climate change etc).

C2. Risks and opportunities

C2.1

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(C2.1) Describe what your organization considers to be short-, medium- and long-term horizons.

From(years)

To(years)

Comment

Short-term

0 1 As part of the criteria required by ISO14001, Sojitz carries out the PCDA cycle as part of its action plan each year to achieve its long-term vision for 2050 called the "Sustainability Challenge," and its "Sustainability Goals," which are set to be achieved within the periodof the Medium-term Management Plan 2020.

Medium-term

1 3 For the "Promotion of Sustainability Management" as set forth in the Medium-term Management Plan 2020, Sojitz will strive to furtherincorporate the perspective of sustainability in management and more deeply merge its businesses with solutions to environmental andsocial issues. As one approach, we have set "Sustainability Goals" for each Key Sustainability Issue (materiality) to achieve within theperiod of the Medium-term Management Plan 2020. Each goal is set to strategically increase sustainability through the promotion ofvarious businesses and initiatives.

Long-term

3 32 In order to continue to "create value and prosperity," as set forth in its corporate statement, Sojitz has established a long-term vision for2050 called the "Sustainability Challenge." This vision was formed based on the Paris Agreement's call for countries to set targets for2050 to realize a decarbonized society, as well as the global issues addressed in sustainable development goals (SDGs). ＜Sustainability Challenge＞ We aim to create sustainable growth for both Sojitz and society by working to help achieve a decarbonizedsociety through our business activities, and by responding to human rights issues, including those within our supply chains.

C2.2

(C2.2) Select the option that best describes how your organization's processes for identifying, assessing, and managingclimate-related issues are integrated into your overall risk management.Integrated into multi-disciplinary company-wide risk identification, assessment, and management processes

C2.2a

(C2.2a) Select the options that best describe your organization's frequency and time horizon for identifying and assessingclimate-related risks.

Frequency ofmonitoring

How far into the futureare risks considered?

Comment

Row1

Six-monthly ormore frequently

>6 years Sojitz conducts scenario-based analysis, using the three scenarios for 2040 published in the IEA-issued "WorldEnergy Outlook" as a basis for anticipating risks and other impacts to the company.

C2.2b

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(C2.2b) Provide further details on your organization’s process(es) for identifying and assessing climate-related risks.

(i)How are climate-related risks identified and evaluated for Sojitz Corporation as a whole and for individual Sojitz offices.

Sojitz has established 6 Key Sustainability Issues (materiality), one of which includes "contributing to the

global environment through our businesses," which we define as identifying climate change-related risks and opportunities. Inaddition, Sojitz has set CO2-related risk assessment surveys as part of the "Sustainability Challenge," its long-term vision forcontributing to the realization of a decarbonized society, and its "Sustainability Goals" set to achieved within the Medkum-termManagement Plan. The Corporate Sustainability Office will serve as the secretariat, confirming the state of each department'sprogress on policies, including those relating to addressing climate change. Additionally, measures to address risk are confirmed andreported to the Management Committee and Board of Directors at the Sustainability Committee meeting chaired by the president heldevery quarter before each measure is carried out. At the facility-level, we conduct scenario analysis for facilities such as our powerplants to confirm risk at each facility. We also conduct measures to address necessary environmental issues related to climatechange at each subsidiary. At Sojitz Corporation, we conduct surveys and investigations to confirm the status of response measures.

(ii)What is the process for determining the relative importance of climate-related risks, and how do you define the substantive,financial, and strategic impacts on the business.

In addition to examining a project’s business plan, deliberation on all business investments and loans require projects to be analyzedand evaluated for risks to the environment (climate change-related risks). A project’s value must be confirmed from a sustainabilityperspective prior to resolution. One of the ways we confirm climate change risk is by conducting a scenario-based assessment ofour power generation businesses, as an important business area in our portfolio and one at high risk of impact from environmentalregulations. Our scenario analysis uses three scenarios (current policy scenario, new policy scenario, and sustainable developmentscenario) prepared by the International Energy Agency (IEA) to map forecasts leading up to 2040, with our analysis taking intoaccount any regulations which may be introduced to major countries where we do business, as well as each scenario’s assumedimpact on our business.Imagining and analyzing the impact on our company based on multiple scenarios reflecting actual progress onenvironmental tax systems and other regulations has enabled us to develop a forecast for how we can respond to changingconditions in the future. For all scenarios, we came to the conclusion that any impact on our business would be limited.

C2.2c

(C2.2c) Which of the following risk types are considered in your organization's climate-related risk assessments?

Relevance&inclusion

Please explain

Currentregulation

Relevant,alwaysincluded

Sojitz has joined several power generation projects in the US. We assume that the introduction of a carbon tax would see our companybear additional carbon tax pass-along costs, which poses a risk to our profits. We conducted a scenario analysis for our powergeneration projects in May 2019 and conducted trial calculations of carbon tax costs based on the 1.5℃ scenario. This trial calculation isone way in which we assess risk.

Emergingregulation


There is a risk that Sojitz's business will be impacted by certain scenarios such as the introduction of carbon taxes in countries that didnot previously have a carbon tax, or the rise of existing carbon taxes in the country in question. We conduct scenario analysis for ourpower generation plants using each scenario prepared by the International Energy Agency (IEA) in the "World Energy Outlook" toforecast the potential business impacts. We assess risk by confirming these emerging regulations which the New Policy Scenario ispremised upon.

Technology Relevant,alwaysincluded

In terms of the renewable energy sector, Sojitz is working on wind power businesses in Ireland and Taiwan, as well as solar powerbusinesses in Japan, Chile, and Germany. Wind power and solar power equipment is becoming more efficient and affordable thanks totechnological advancements. This has lead to our business expanding and becoming more profitable. We conducted a scenario analysisfor our power generation businesses in May 2019, based on the 1.5℃ scenario. This was used to map supply/demand forecasts for thegas-fired, renewable energy, and solar power fields leading up to 2040, with our analysis taking into account any regulations which maybe introduced and any technological developments assumed to impact business. We assess risks by keeping up to date ontechnological innovations in solar power plants, EVs, and other fields which would have a significant impact on our business.

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Legal Relevant,alwaysincluded

Environmental issues may arise that result in the suspension or termination of business acitivities, wastewater disposal and cleanup,lawsuits and compensation for damages, or damage to reputation. Additionally, there is also the risk of climate change-relatedregulations such as the Paris Agreement posing challenges to business continuity. Executive officers responsible for risk managementare appointed, and evaluations and management of risks are carried out according to the Risk Management Policy and Plan formulatedby these risk management executive officers. The Internal Control Committee (chaired by the President & CEO) monitors themanagement of these risks. In addition, the Board of Directors regularly receives reports from organizations including the Internal ControlCommittee, supervising risks by delegating appropriate actions to be taken. Specifically, Sojitz has established a long-term vision andobjectives for response to Key Sustainability Issues (Human Rights, Environment, Resources, Local Communities, Human Resources,and Governance). The Sustainability Committee oversees progress on these objectives, and the Finance & Investment DeliberationCouncil confirms their relevence in terms of social and environmental risks and sustainabiilty. Additionally, the Group has established anEnvironmental Policy, Human Rights Policy, and CSR Action Guidelines for Supply Chains, and ensures that all Group members aremade aware of these policies. We require that the legal risks of all projects be confirmed using a dedicated checklist. While it is difficult topick specific examples, some include whether environmental impact assessments required by the laws of each country are carried out, orwhether exhaust-related laws are complied with when building factories. Although there is a low-likelihood of such a legal breachoccuring, it would have a major impact on the business. Therefore, we use the dedicated checklist to ensure compliance. As legal risksrequire immediate action, there is a direct reporting system to the president.

Market Relevant,alwaysincluded

Executive officers are appointed to evaluate and manage risks according to the Risk Management Policy and Plan, which includesmanaging market risks such as fluctuations in fossil fuel commodity prices. The Internal Control Committee (chaired by the President andCEO) monitors the management of these risks. In addition, the Board of Directors regularly receives reports from organizations includingthe Internal Control Committee, supervising risks by delegating appropriate actions to be taken. Specifically, the Group minimizes marketrisks through such means as matching assets and liabilities (e.g., long and short commodity exposures) and hedging with forwardexchange contracts, commodity futures/forward contracts and interest rate swaps. One specific example of market risk is price fluctuationrisks for resource trading for coal, oil, and LNG.

Reputation Relevant,alwaysincluded

Inadequate response to climate change-related issues could damage the company's reputation. Executive officers are appointed toevaluate and mange risks according to the Risk Management Policy and Plan, which includes reputation-related risks. The InternalControl Committee (chaired by the President & CEO) monitors the management of these risks. In addition, the Board of Directorsregularly receives reports from organizations including the Internal Control Committee, supervising risks by delegating appropriateactions to be taken. Specifically, Sojitz has established a long-term vision and objectives for response to key Sustainability Issues(Human Rights, Environment, Resources, Local Communities, Human Resources, and Governance). The Sustainability Committeeoversees progress on these objectives, and the Finance & Investment Deliberation Council confirm their relevance in terms of social andenvironmental risks and sustainability. Additionally, the Group has established an Environmental Policy, Human Rights Policy, and CSRAction Guidelines for Supply Chains, and ensures that all Group members are made aware of these policies. When dealing withreputational risks, we consider the first step to be taking legal measures to address the issue before taking measures that go beyondwhat is legally required, in order to minimize reputational risk, such as the risk of censure by NGOs. As reputational risks requireimmediate action, there is a system for reporting directly to the president.

Acutephysical


For the industrial park business we are developing in Asia, there is the risk that in the event of climate change-induced drought or anotherunexpected event, the wastewater treatment facilities used within the parks may suspend operations due to power plants' restrictions onelectricty supply, thereby violating environmental standards regarding wastewater. Revenue received from management of our Long Ducand Loteco industrial parks in Vietnam could decrease if we are ordered to stop operations as a penalty for violating environmentalstandards regarding wastewater.

Chronicphysical


If the long-term effects of climate change cause frequent droughts, wastewater treatment facilities may suspend their operations due torestrictions on power supplies from hydroelectric power plants. In this event, there is a risk of breaching environmental standards forwastewater at Sojitz-operated industrial parks in Asia. A breach in wastwater standards could result in an order to suspend operations atSojitz's Long Duc and Loteco industrial parks in Vietnam as a penalty, decreasing operating income from industrial parks. Additionally,long-term climate change-related risks are assessed using written surveys, which are reported and confirmed by the SustainabilityCommittee.

Upstream Relevant,alwaysincluded

There is a risk of Sojitz's feed business, particularly the procurement of feed materials, being impacted over the long-term by climatechange conditions such as unseasonable weather, frequent droughts, and a rise in average temperatures. We conduct written surveysto assess climate change-related risks within our supply chains, which are confirmed by the Sustainability Committee.

Downstream Relevant,alwaysincluded

In December 2015, the Paris Agreement was established at COP21. While the provisions of the agreement do not specify exactreduction volumes, a goal is set to keep the rise of global temperatures below 2 degrees Celsius, and to limit the temperature to 1.5degrees Celsius. Japan has set out to reduce greenhouse gas emissions 26% by 2030 from the emissions volumes recorded in 2013.These international commitments could lead to stricter environmental taxes and the implementation of a national emissions tradingsystem. The breakdown of the 26% emissions cut includes 4.1% reduction from forest management and CFC measures, as well as21.9% reduction by switching from fossil fuels (coal, natural gas, and oil) to renewable energy, and returning to nuclear energy. Sojitzhas businesses related to fossil fuels (coal, natural gas, and) and fossil fuel trading. If restrictions are placed on our power plant buyers,demand for fossil fuels will decline. Over the long-term, this could potentially lower the value of our assets, as well as reduce the scale oftrading and profitability. A written questionnaire is used to assess climate-related risk within our supply chains, which is evaluated by theSustainability Committee.

Relevance&inclusion

Please explain

C2.2d

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(C2.2d) Describe your process(es) for managing climate-related risks and opportunities.

[Physical Risks and Transition Risks]

＝ Risk Management by the Sustainability Committee / Reports Submitted to the Board of Directors (Supervisory Body) ＝

Sojitz Group classifies and defines the many risks associated with our businesses according to our Basic Code of Corporate RiskManagement, and we establish a risk management policy and management plan for these risks each year, based on a resolution bythe Board of Directors. Among these risks, countermeasure policy and initiatives regarding environmental and social risk (includingrisk related to climate change) are deliberated by the Sustainability Committee. These policies and initiatives may then be put intoaction following a report to the Management Committee and Board of Directors.

＝ Deliberation by the Sustainability Committee ＝

Sojitz has established 6 Key Sustainability Issues (Materiality) as areas to be addressed on a Group-wide basis: human rights, theenvironment, local communities, resources, human resources, and governance. In establishing these focus areas, we referencedinternational standards such as the SDGs to be met by 2030, selecting issues that will affect Sojitz over the long-term such as climatechange-related issues that include physical risks and migration risks. The Sustainability Committee reviews these issues everyquarter.

＝ New Investment Projects ＝

In addition to examining a project’s business plan, deliberation on all business investments and loans require projects to be analyzedand evaluated for risks to the environment (climate change-related risks) and risks to society (the risk of impacting local residents,labor safety-related risks, etc.) A project’s value must be confirmed from a sustainability perspective prior to resolution.

◆Examples of physical risks: Operations at Sojitz Group's industrial parks in Vietnam being impacted by the suspension ofhydroelectric power during droughts

◆Examples of transition risks: Rising costs for Sojitz's gas-fired power plants due to higher carbon taxes in the future

[Physical Opportunities and Transition Opportunities]

The Finance & Investment Deliberation Council confirms a project's value (including physical/migration opportunities) from asustainability perspective prior to the resolution and carrying out investments.

◆Examples of physical opportunities: Seawater desalination projects in developing countries

◆Examples of transition opportunities: LNG power plants in the U.S./renewable energy businesses in Japan, Peru, and Ireland

C2.3

(C2.3) Have you identified any inherent climate-related risks with the potential to have a substantive financial or strategicimpact on your business?Yes

C2.3a

(C2.3a) Provide details of risks identified with the potential to have a substantive financial or strategic impact on yourbusiness.

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IdentifierRisk 1

Where in the value chain does the risk driver occur?Direct operations

Risk typeTransition risk

Primary climate-related risk driverPolicy and legal: Mandates on and regulation of existing products and services

Type of financial impactIncreased costs and/or reduced demand for products and services resulting from fines and judgments

Company- specific descriptionCoal interest-based businesses are a key part of our portfolio and may be greatly impacted by climate change risks. They are alsobusinesses which we assume will be directly or indirectly impacted by environmental regulations related to CO2 emissions. Wehave both thermal coal interests in Indonesia, as well as coking coal interests in Australia, with our total holdings reaching about 7million tons. We assume that in the future, climate change will cause these businesses to be subject to environmental tax/carbontax/emissions trading, increase rehabilitation costs, facilitate the spread of renewable energy and energy-saving technologies, altercountries' energy mixes and government polices, make renewable energy more price competitive, and push down the financialcosts of loans and insurance. In accordance with this international agreement, countries of the world may introduce harsherenvironmental taxes and emissions trading at the country level. To break down this 26% reduction target: 4.1% is planned to comefrom forest management and CFC countermeasures, while 21.9% will be based on the shift from fossil fuels (coal, natural gas, oil)to renewable energy and the restarting of Japan's nuclear reactors. One of Sojitz's nine divisions has both holdings and tradingbusinesses related to fossil fuels (coal, natural gas, oil), and in the long term, these initiatives may impact profits received fromthese holdings or impact the scale of their trading business.

Time horizonLong-term

LikelihoodLikely

Magnitude of impactHigh

Are you able to provide a potential financial impact figure?Yes, a single figure estimate

Potential financial impact figure (currency)37600000000

Potential financial impact figure – minimum (currency)<Not Applicable>

Potential financial impact figure – maximum (currency)<Not Applicable>

Explanation of financial impact figureIf coal-fired power demand and coal prices continue to fall due to climate change, our company might, in the mid- to long-term, seethe value of our coal mines decline, be forced to impair or ground these assets, and find trading-based revenue decrease. However,impact on our business should be limited. By accumulating non-resource business assets, we will mitigate the impact to company-wide profits. We will also continue to conduct a wide variety of business through our nine business divisions and continue to replaceunderperforming assets. Our coal interests belong to the Metals & Mineral Resources Division, serving as a pillar of the division'sprofits. The division's gross profit for the year ended March 31, 2019, was JPY 37.6 billion.

Management methodBased on a hypothetical scenario created to estimate, better understand, and control the impact of climate change-related risks andopportunities for our coal interests, we conducted a scenario analysis in May 2019 to estimate impact to our company and confirmstrategy for dealing with that impact. Assuming demand and price outlooks for our coal interests, we compared production costs foreach of our mines and conducted a scenario analysis in May 2019. We concluded that our coal business was adequately costcompetitive. That same month, we announced two policies: that in principle, Sujit would acquire no new thermal coal interests, andthat the company would reduce thermal coal assets by half or more by 2030. In the past few years, we have reduced the amount ofthermal coal interest-related assets we own to make the entire company more resistant to climate change impact, as well asincrease investment in and loans to businesses which could provide opportunities in the future. We plan to continue theseinitiatives. =Method of Management Cost Calculation= Our coal interest-based businesses belong to the Metals & Mineral

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Resources Division. The division made JPY 14.5 billion in investment and loans in other businesses, outside of thermal coal.

Cost of management14500000000

Comment

IdentifierRisk 2


Risk typeTransition risk

Primary climate-related risk driverPolicy and legal: Increased pricing of GHG emissions

Type of financial impactIncreased operating costs (e.g., higher compliance costs, increased insurance premiums)

Company- specific descriptionPower generation businesses are a key part of our portfolio and may be greatly impacted by climate change risks. They are alsobusinesses which we assume will be directly or indirectly impacted by environmental regulations related to CO2 emissions. Wehave power generation projects in Japan, Vietnam, Indonesia, Sri Lanka, Oman, Saudi Arabia, Mexico, and the US, with the totalpower generated by our holdings reaching approximately 1,300MW. We assume that in the future, climate change will cause thesebusinesses to be subject to environmental tax/carbon tax/emissions trading, increase rehabilitation costs, facilitate the spread ofrenewable energy and energy-saving technologies, alter countries' energy mixes and government polices, make renewable energymore price competitive, and push down the financial costs of loans and insurance. In accordance with this international agreement,countries of the world may introduce harsher environmental taxes and emissions trading at the country level. To break down this26% reduction target: 4.1% is planned to come from forest management and CFC countermeasures, while 21.9% will be based onthe shift from fossil fuels (coal, natural gas, oil) to renewable energy and the restarting of Japan's nuclear reactors. Sojitz's powergeneration business belongs to a sector easily impacted by CO2-related regulations. In the event that this impact causes the scopeof environmental taxes to expand, forcing us to procure emissions reduction credits from the market, the cost would increaseaccording to the amount of CO2 emitted by Sojitz Group's offices, factories, power plants, and other facilities. This would potentiallyimpact our profits.


LikelihoodLikely






Explanation of financial impact figureOur company's profits may be impacted in the case that the scope of businesses subject to environmental tax expands or we endup in a situation where we are forced to purchase emissions credits from the market. Our total CO2 emissions for FY2018 came to913,884 tons (total of Scope 1 and Scope 2). If we were obligated to purchase carbon credits for even 10% of that amount, usingthe unit price for carbon credits in 2025 given by the IEA World Energy Outlook's SD Scenario, costs could grow as high as JPY622 million (USD 5.76 million), at USD 63/ton-co2e.

Management methodBased on a hypothetical scenario created to estimate, better understand, and control the impact of climate change-related risks andopportunities for our power generation businesses, we conducted a scenario analysis in May 2019 to estimate impact to our

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company and confirm strategy for dealing with that impact. We were able to estimate impact on our power generation businessesby conducting scenario analysis of several scenarios which assumed environmental tax and other environmental regulations wouldbecome more widespread. We made plans for dealing with any such reforms in the future and concluded that impact on ourcompany would be limited. Additionally, we announced that we would divest our coal-fired power generation assets and acquire nonew coal-fired power generation businesses. =Management Cost Calculation Method= Our power generation business belong tothe Energy & Social Infrastructure Division. For FY2018, the division made JPY 30 million in investments and loans, primarily inrenewable energy businesses which are resilient to impact from climate change and businesses which represent good businessopportunities.


Comment

IdentifierRisk 3


Risk typePhysical risk

Primary climate-related risk driverChronic: Changes in precipitation patterns and extreme variability in weather patterns

Type of financial impactReduced revenue from decreased production capacity (e.g., transport difficulties, supply chain interruptions)

Company- specific descriptionFor our industrial parks in Greater Asia, droughts and other sudden events stemming from climate change pose the risk that wastewater treatment operations would be suspended due to limits on electricity provided by local power plants, forcing us to violatewaste water standards. [Impact on our company] We own a stake in Vietnam's Long Duc and Loteco Industrial Parks, andpenalizing the business for violating waste water standards by suspending operations could reduce our revenue from managementand operation of the parks. (Same as above.)


LikelihoodLikely






Explanation of financial impact figureIf the order to suspend operations remains effective for one month, the industrial park's revenue could decrease by as much asJPY 302 million (=USD 2.8 million).

Management methodAmong our industrial park projects, Long Duc has had emergency power generators installed since 2013 and Loteco since 1997.These second as a system for dealing with any reduced electricy supply caused by droughts and other sudden events stemmingfrom climate change. As a result of installing these emergency generators and adjusting our electricity usage in cooperation withthe power company for many years, we can receive preferential power supply from the power company. =Management CostCalculation Method= Cost of installing backup generators for use in a disaster at the Long Duc and Lotic Industrial Parks: JPY 260million (USD 2.4 million)

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Comment

C2.4

(C2.4) Have you identified any climate-related opportunities with the potential to have a substantive financial or strategicimpact on your business?Yes

C2.4a

(C2.4a) Provide details of opportunities identified with the potential to have a substantive financial or strategic impact onyour business.

IdentifierOpp1

Where in the value chain does the opportunity occur?Direct operations

Opportunity typeProducts and services

Primary climate-related opportunity driverDevelopment and/or expansion of low emission goods and services

Type of financial impactIncreased revenue through demand for lower emissions products and services

Company-specific descriptionThe Paris Agreement was adopted at COP21 in December 2015. Although the total reduction amount was not clearly stated withinthe document, it does say that signatories will do their best to "keep global warming within two degrees of pre-industrial levels andto limit the increase to 1.5 degrees maximum." Bolstered by this international movement towards "no and low carbon," thegovernments of the world are strengthening CO2-related regulations. Companies have been called upon to use renewable energy,and it is becoming more an more likely that many companies will take it upon themselves to up the percentage of renewable energythey use. This will lead to more business opportunities for Sojitz's renewable energy business. Sojitz has worked for many years toaccumulate relevant business expertise, such as choosing to join solar power projects overseas ahead of our competitors. Inaddition to Sojitz's 12 solar plants in Japan and three overseas, we are also involved in an onshore wind power project in Europe.Sojitz's power generation businesses are predicted to continue showing high average annual growth (25%) from the end of FY2012to the end of FY2020 (including projects still under construction). Among those, the renewable energy business saw growth climbto around 30% last year. Sojitz is using this expertise to increase the number of renewable energy-related businesses we operatearound the world. In recent years, our company has continued to expand this segment laterally, growing to include not only solarpower, but other businesses, such as a wind power business overseas.

Time horizonMedium-term

LikelihoodLikely




Potential financial impact figure – minimum (currency)

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<Not Applicable>


Explanation of financial impact figureGross profit for FY2018: JPY 18.7 billion Starting from our acquisition of a solar power plant in Germany, our operations nowencompass 12 solar power plants in Japan. We have used the knowledge and experience honed on these projects to diligentlydevelop other renewable energy businesses, thereby responding to rapidly spreading decarbonization trends worldwide by helpingthe environment. As renewable energy demand is expected to grow in the future, we forecast an increase in revenue. Gross profitfor the Energy & Social Infrastructure Division, which includes our renewable energy businesses, came to JPY 18.7 billion forFY2018.

Strategy to realize opportunity1. Explanation of current activities： Starting from our acquisition of a solar power plant in Germany, our operations nowencompass 12 solar power plants in Japan. We have used the knowledge and experience honed on these projects to developother renewable energy businesses globally, thereby responding to rapidly spreading decarbonization trends worldwide by helpingthe environment. We have also branched out into power generation in different regions with difference sources, such as ourinvolvement with wind power and biomass projects in Europe, the US, and Asia/Oceania. 2. Example of current activities/casestudy： Of our renewable energy projects, FY2018 saw several enter commercial operations: the Matsuzaka (35MW),and twoother solar power plants in Japan; and the Solem-1/2 (Mexico, 348MW) solar power plants overseas. In terms of on-shore windpower, we joined a 223MW wind power project by acquiring a stake in Evalair and joined a wind power project in the US. We alsojoined our first off-shore wind power project, the Yunlin Off-shore Wind Power Plant (640MW) in Taiwan. The total output of Sojitz'srenewable energy projects is approximately 1.5GW (as of the end of June 2019). Basis for Calculating Cost of RealizedOpportunities：The Energy & Social Infrastructure Division, which oversees the renewable energy businesses, plans toaccumulate JPY 50 billion in business assets over the course of Medium-term Management Plan 2020 (FY2018 - FY2020).

Cost to realize opportunity50000000000

Comment

IdentifierOpp2





Company-specific descriptionWe adopted the COP21 Paris Agreement in December 2015. Although the provisions do not contain any clear target for total CO2emission reduction, they do state that we will keep the increase in global average temperature to well below 2℃ above pre-industrial levels and limit the increase to 1.5℃. To comply with these international conventions, many countries may introduceharsher environmental taxes and emissions trading at the national level. In terms of supply, the US has rapidly risen to prominencethanks to the shale gas revolution, while on the demand side, China, India, and other emerging countries in Asia are poised to leadfuture growth, and we predict their governments and business sector will promote the rapid introduction of natural gas and LNG.The history of Sojitz's LNG business stretches over roughly 50 years. We have built a track record since the 1970s, operating anintegrated LNG business encompassing everything from gas field development to liquefaction, transport, and receiving. Throughdeep involvement with everything from construction to management of those projects centered on high-efficiency gas-fired powerplants, we have accumulated new technologies and operations experience. We are also able to put together financing plans forthese projects quickly, utilizing our worldwide network of excellent customers and government agencies and business insight. Weexpect Sojitz to have even more business opportunities in the future, as demand increases for LNG-based power generation. Sojitzhas already begun work on solid natural gas/LNG power generation projects in Indonesia, Sri Lanka, Bangladesh, Myanmar,Vietnam, and the US. We completed the closing of a natural gas power plant in the US and an LNG-to-Power project in Indonesia.We are developing other LNG-to-Power and natural gas power plants in Sri Lanka, Bangladesh, Myanmar, Vietnam, and the US, aswell. Although the total power generation capacity of our natural gas and LNG-based generation projects has already met theMedium-term Management Plan's target of more than 1,000MW (including projects under construction), we plan to further expandoperations through continued efforts.

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LikelihoodLikely






Explanation of financial impact figureWe have positioned gas-to-power as a core business area, as it is expected to grow into the pillar that supports increasing energydemand in emerging countries in Asia. In pursuit of greater follow-through and reproducibility for our gas-to-power businesses, wewill maximize the synergy gained by merging the team which has handled our historically strong integrated LNG businesses withthe team most skilled in PPP/PFI projects for gas-fired power plants. As LNG demand is expected to increase in the future, weforecast an increase in revenue. Gross profit for our Energy & Social Infrastructure Division, which includes our LNG businesses,came to JPY 18.7 billion for FY2018.

Strategy to realize opportunity1. Explanation of current activities： We have positioned gas-to-power as a core business area, as it is expected to grow into thepillar that supports increasing energy demand in emerging countries in Asia. We will maximize the synergy gained by merging theteam which has handled our historically strong integrated LNG businesses with the team most skilled in PPP/PFI projects for gas-fired power plants. There is also rising demand in the US. To meet the country's massive energy needs, we are doing more to helpcreate a low-carbon society through our business managing and operating cutting-edge, high-efficiency gas-fired power plantswhich use the country's abundant and cheap shale gas as fuel. Our resource-based operations are working to increase these kindof LNG-related businesses assets we have accumulated. 2. Example of current activities/case study： We have already begunwork on solid natural gas/LNG power generation projects in the US and Asian countries,then completed the closing some of them.Although the total power generation capacity of our natural gas and LNG-based generation projects has already met the Medium-term Management Plan's target of more than 1,000MW, we plan to further expand operations. Basis for Calculating Cost ofRealized Opportunities： The Energy & Social Infrastructure Division, which oversees the LNG businesses, plans to accumulateJPY 50 billion in business assets over the course of Medium-term Management Plan 2020 (FY2018 - FY2020).


Comment

IdentifierOpp3





Company-specific descriptionWe adopted the COP21 Paris Agreement in December 2015. Although the provisions do not contain any clear target for total CO2emission reduction, they do state that we will keep the increase in global average temperature to well below 2℃ above pre-industrial levels and limit the increase to 1.5℃. Following international trends in decarbonization and low-carbon, experts predictthat governments will strengthen their CO2-related regulations, companies will put CO2 management at the forefront of product

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lifecycles, and users will increasing demand products that can be recycled or reused. Sojitz Group is creating a new earningsfoundation by expanding our aircraft business value chain based on ample experience in the industry (over 900 aircraft sold assales representative for passenger aircraft in Japan). Of those, we have a part-out business which sells used components andequipment from decommissioned aircraft. In this sense, increased demand for reusing and recycling both benefits our companyand helps reduce energy consumption through effective use of resources. Sojitz aims to promote reuse of aircraft parts as a way tomore effectively use resources and reduce waste. Among 30 aircraft newly purchased and dismantled since 2015, we have fullysold the parts for only 2, with us currently working to sell parts from the remaining 28 (as of April 30, 2019). Our efforts to procureobsolete and decommissioned aircraft, disassemble those aircraft, and sell their parts are proceeding smoothly for the most part,and we will continue them in the future.


LikelihoodLikely






Explanation of financial impact figureSojitz Group's part-out business buys decommissioned or obsolete aircraft, disassembles the aircraft and conducts maintenanceon the parts together with partners, and sells the parts to other companies in the aviation industry. As effective use of aviationindustry resources via recycling and reuse of decommissioned aircraft is expected to increase, we forecast an increase in revenue.Gross profit for our Aerospace & Transportation Project Division, which includes our part-out business, came to JPY 15.5 billion forFY2018.

Strategy to realize opportunity1. Sojitz Group's part-out business buys decommissioned or obsolete aircraft, disassembles the aircraft and conducts maintenanceon the parts together with partners, and sells the parts to other companies in the aviation industry. Although it started as an exitstrategy following our new aircraft sales, financing, lease structuring, flight management, and remarketing businesses, it has nowexpanded to the massive US and European markets. In this way, we contribute to the effective use of aviation industry resources bygiving new life to aircraft that had fulfilled their original purpose. Our aircraft operations are working to increase these kind ofrecycling-related businesses assets we have accumulated. 2. Sojitz aims to promote reuse of aircraft parts as a way to moreeffectively use resources and reduce waste. Among 30 aircraft newly purchased and dismantled since 2015, we have fully sold theparts for only 2, with us currently working to sell parts from the remaining 28 (as of April 30, 2019).Our efforts to procure obsoleteand decommissioned aircraft, disassemble those aircraft, and sell their parts are proceeding smoothly for the most part, and we willcontinue them in the future. Basis for Calculating Cost of Realized Opportunities：The Aerospace & Transportation ProjectDivision, which oversees the aircraft businesses, plans to accumulate JPY 40 billion in business assets over the course of Medium-term Management Plan 2020 (FY2018 - FY2020).


Comment

C2.5

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(C2.5) Describe where and how the identified risks and opportunities have impacted your business.

Impact Description

Productsandservices

Impacted The number of rewewable energy projects and LNG power generation projects has grown. We have also entered the business of recyclingused parts from aircrafts. Additionally, we are invovled in the EV-related materials and parts business. Under the current Medium-termManagement Plan, we are increasing operating assets in the power generation sector (which includes the aforementioned businesses) toJPY 50 billion.

Supplychainand/orvaluechain

Impacted 1. Impact on Our Business Areas Sojitz Group has established Key Sustainability Issues (Human Rights, Environment, Resources, LocalCommunities, Human Resources, and Governance) and policies such as the Environmental Policy, CSR Action Guidelines for SupplyChains, and Human Rights Policy. We work to mitigate environmental/social (human rights) risk in our business activities by ensuring theseissues and policies are observed and understood, educating suppliers about our policies, and assessing risk to improve operations. Forclimate change-based risks which could have a huge impact on the global environment, ecosystems, social systems, or our corporateactivities, we have carefully watched for trends following the Paris Agreement, in government policies and regulations aimed at low-carbonor decarbonization, as well as analyzed their impact on relevant businesses within Sojitz group. However, it is worth noting that any issuesrelated to the environment, workplace health and safety, or human rights which arise within our business activities or supply chains, orcriticism from local citizens or environmental/human rights protection groups with regards to those issues, could negatively impact SojitzGroup's business performance or financial standing if we are forced to suspend or cease business activities, clean up environmentalpollution, deal with lawsuits, pay compensation for damages, or suffer a hit to our reputation. Sojitz is committed to preventing climatechange through its Wood Procurement Policy, which states that the we will not handle wood that comes from high conservation valueforests. This Policy extends to all of our suppliers who handle wood products. Out of Sojitz Group's approximately 1,500 suppliers, we willidentify wood suppliers in countries with high country risk, as well as the wood that comes from our largest wood suppliers. For these woodsuppliers, we investigate 1) wood traceability in the country of origin, and 2) suitability of forest management, which impacts our supplychains. Gross profit for our forest resource-based businesses came to JPY 38.7 billion for the year ended March 31, 2019, placing us amongthe top of the industry.

Adaptationandmitigationactivities

Impacted Our Long Duc and Loteco Industrial Parks in Vietnam would be impacted. One adaptive strategy we have adopted in dealing with risksposed to these projects is to install an emergency power generator as a means of responding to power supply cuts from hydroelectric powerplants during droughts. Installation costs for the emergency power generator totaled JPY 270 million (USD 2,400,000).

Investmentin R&D

Impacted The number of investment projects pertaining to the renewable energy business and LNG power generation business have increased.During the current Medium-term Management Plan, Sojitz will increase investment in the power generation sector to JPY 50 billion, whichincludes advancing the renewable energy and LNG power generation businesses.

Operations Impacted In the LNG power generation business, we aspire to achieve higher operational efficiency. In the U.S., we entered the business of managinggas-fired power plants, which demonstrate cutting-edge efficiency and are fueled by cheap and abundant American shale gas. During thecurrent Medium-term Management Plan, Sojitz will increase investment in the power generation sector to JPY 50 billion, which includes theLNG power generation business and gas-fired power plant business.

Other,pleasespecify

Pleaseselect

C2.6

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(C2.6) Describe where and how the identified risks and opportunities have been factored into your financial planningprocess.

Relevance Description

Revenues Impacted At the time it drafts its three-year medium-term management plan, Sojitz reviews all of its businesses from a sustainability perspective,factoring in the impact of climate change. The scope of the review covers a wide range, encompassing sales, currency, operating costs,capital/liabilities policy, acquisitions, and asset management efficiency. In the renewable energy business, which is considered topresent climate change-related opportunities, a business plan was drafted to include budgets for sales, costs, and capital investment.Sales in the power generation sector, which includes renewable energy businesses, decreased by JPY 24,000milion from FY2017toFY2018. Related administrative departments have created financial policies, including capital policies, which impact all areas.

Operatingcosts

Impacted At the time it drafts its three-year medium-term management plan, Sojitz reviews all of its businesses from a sustainability perspective,factoring in the impact of climate change. The scope of the review covers a wide range, encompassing sales, currency, operating costs,capital/liabilities policy, acquisitions, and asset management efficiency. In the renewable energy business, which is considered to presentclimate change-related opportunities, a business plan was drafted to include budgets for sales, costs, and capital investment. In thepower generation sector, which includes renewable energy businesses, we expect operating costs to rise in conjunction with the build upof operating assets to JPY 50 billion by 2020. Related administrative departments have created financial policies, including capitalpolicies, which impact all areas.

Capitalexpenditures/ capitalallocation

Impacted At the time it drafts its three-year medium-term management plan, Sojitz reviews all of its businesses from a sustainability perspective,factoring in the impact of climate change. The scope of the review covers a wide range, encompassing sales, currency, operating costs,capital/liabilities policy, acquisitions, and asset management efficiency. For renewable energy businesses, which are considered topresent climate change-related opportunities, business plans are drafted to include budgets for sales, costs, and capital investment. As aclimate change-related measure, we have installed a backup generator at our industrial parks in Vietnam. It is possible that the powersupply capacities of neighboring hydroelectric plants will decline during droughts. Therefore, a backup generator contributes greatly tostable operations, effecting a substantial impact on the entire business. (Installation costs for the emergency power generator were JPY270 million (USD 2.4 million.)

Acquisitionsanddivestments

Impacted Global warming has brought growing demand for renewable energy, and this has both created stronger environmental regulations anddiversified market demand around the world. Our revenue may decrease if we do not invest in companies which can meet these diverseneeds. This has led us to use M&A and business tie-ups, so that we can quickly respond to environmental regulations. We acquired a60% stake in Evalair Limited (Head Office: Cork, Ireland) through subsidiary ShaMrock Wind Limited--a joint venture established withMitsubishi Lease & Finance Limited and several Kansai Electric Power subsidiaries--with the goal of operating a wind power plant inIreland. Sojitz's stake, acquired through ShaMrock Wind, amounts to 29.3% ownership of Evalair. Evalair owns and operates five windpower plants in Ireland with a combined generating capacity of 223,000 KW, providing renewable energy-based electricity to Ireland'spower market under the country's feed-in tariff system. Ireland boasts some of the best wind conditions in the world and has set a goal ofhaving 40% of their total energy consumption covered by renewable energy by 2020. It is predicted the country will see many more windpower plants built in the years ahead. Sojitz intends to develop and construct new power plants in Ireland utilizing energy generation-related development and operations expertise accumulated in Japan and abroad. Additionally, Sojitz plans to further nurture itsrenewable energy generation business into a pillar of stable revenue within Europe, by actively working on wind power generationbusinesses not only in Ireland, but in other places in the region anticipating sustainable growth.

Access tocapital

Impacted If we do not take measures to help prevent global warming, we face the risk of damaging our reputation with customers andshareholders, causing our revenue and stock prices to fall. Roughly 45% of Sojitz's shareholders are foreign institutions. More and moreinstitutional investors overseas are interested in ESG investment, and we believe that their reception to our efforts to combat climatechange will have a great impact on our stock prices. Our total market capitalization at the end of December 2018 was JPY 478 billion.Even a 5% drop is stock price would impact our market capitalization by JPY 23.9 billion.

Assets Impacted At the time it drafts its three-year medium-term management plan, Sojitz reviews all of its businesses from a sustainability perspective,factoring in the impact of climate change. The scope of the review covers a wide range, encompassing sales, currency, operating costs,capital/liabilities policy, acquisitions, and asset management efficiency. For renewable energy businesses, which are considered topresent climate change-related opportunities, business plans are drafted to include budgets for sales, costs, and capital investment.Related administrative departments create financial policies, including capital policies, which impacts the full scope of the review. Sojitzhas expanded its operating assets in the renewable energy sector through its solar power plant business (solar power plants in Japan:12, overseas: 3), as well as by entering the onshore wind generator business in Europe. However, during Medium-term ManagementPlan 2020 (FY2018- FY2020), the Energy and Social Infrastructure Division in charge of the renewable energy businesses plans toincrease operating assets to JPY 50 billion.

Liabilities Impacted At the time it drafts its three-year medium-term management plan, Sojitz reviews all of its businesses from a sustainability perspective,factoring in the impact of climate change. The scope of the review covers a wide range, encompassing sales, currency, operating costs,capital/liabilities policy, acquisitions, and asset management efficiency. For renewable energy businesses, which are considered topresent climate change-related opportunities, business plans are drafted to include budgets for sales, costs, and capital investment.Specifically, Sojitz has expanded its operating assets in the renewable energy sector through its solar power plant business (solar powerplants in Japan: 12, overseas: 3), as well as by entering the onshore wind generator business in Europe. However, during Medium-termManagement Plan 2020 (FY2018- FY2020), the Energy and Social Infrastructure Division in charge of the renewable energy businessesplans to increase operating assets to JPY 50 billion. The Medium-term Management Plan includes asset recovery, or the replacement ofassets considered to be climate change-related liabilities. It follows that the Plan has the net debt-to-equity ratio kept under 1.5%, whichimpacts the debt plan.

Other Impacted At the time it drafts its three-year medium-term management plan, Sojitz reviews all of its businesses from a sustainability perspective,factoring in the impact of climate change. The scope of the review covers a wide range, encompassing sales, currency, operating costs,capital/liabilities policy, acquisitions, and asset management efficiency. In the renewable energy business, which is considered to presentclimate change-related opportunities, a business plan was drafted to include budgets for sales, costs, and capital investment. Relatedadministrative departments have created financial policies, including capital policies, which impact all areas.

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C3. Business Strategy

C3.1

(C3.1) Are climate-related issues integrated into your business strategy?Yes

C3.1a

(C3.1a) Does your organization use climate-related scenario analysis to inform your business strategy?Yes, qualitative and quantitative

C3.1c

(C3.1c) Explain how climate-related issues are integrated into your business objectives and strategy.

In continually pursuing the “value and prosperity” named in the Sojitz Group Statement, we have established our “SustainabilityChallenge” based on the Sustainable Development Goals (SDGs) and other trends, such as the way more and more countries, in thewake of the Paris Agreement, are now aiming to achieve a decarbonized society by 2050.

The “Sustainability Challenge” states that “we aim to create sustainable growth for both Sojitz and society by working to help achievea decarbonized society through our business activities and by responding to human rights issues, including those within our supplychains.”

To achieve this goal, we aim to expand our low-carbon businesses over the next 10 years, and we have set Medium-termManagement Plan 2020 targets, with upper management leading our efforts to curtail CO2 emissions from our business activities.

We also conduct scenario analysis of climate-related risks, focusing on power generation and coal businesses. The results of theseanalyses are later reflected in our business strategy.

Results:

① We were able to estimate impact on our power generation businesses by conducting scenario analysis of several scenarios whichassumed environmental tax and other environmental regulations would become more widespread. We made plans for dealing withany such reforms in the future and concluded that impact on our company would be limited. Additionally, we announced that we woulddivest our coal-fired power generation assets and acquire no new coal-fired power generation businesses.

② In our scenario analysis, we compared assumed demand/prices for our coal interests against production costs for our coal mineholdings. We concluded that our coal business was adequately cost competitive. Although the analysis showed long-term impact onasset prices, impact on our company’s finances was limited. We then announced our policy, stating that, in principle, we would nolonger acquire new thermal coal interests, and we would aim to cut our thermal coal interest in half or more by 2030.

C3.1d

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(C3.1d) Provide details of your organization’s use of climate-related scenario analysis.

Climate-relatedscenarios

Details

IEA NPSIEA CPS

・ One way we confirm climate change risk is by conducting scenario analysis of our coal interests (both thermal and coking coal) and powergeneration businesses, as both are important businesses within our portfolio which we assume will be directly or indirectly impacted by CO2 emission-related environmental regulations. ・ In addition to the three scenarios (Current Policy Scenario, New Policy Scenario, and Sustainable DevelopmentScenario) produced by the International Energy Agency (IEA) that describe the outlook leading up to 2040—the furthest forecastable point as of now—we also assumed impact on our business based on the “Special Report on Global Warming of 1.5℃” produced by the Intergovernmental Panel onClimate Change and a long-term supply/demand outlook provided by a third-party agency We believe that these scenarios best match the mid- tolong-term goals Sojitz has set for 2050. ・ Assuming demand/price for thermal vs. coking coal based on several different scenarios, we established“Sustainability Scenarios.” We compared and analyzed product costs for our mining interests in Australia and Indonesia, concluding that our thermaland coking coal businesses remained adequately cost competitive in all scenarios. Additionally, we found that although there would be long-termimpact on our company’s asset prices, impact on company financial standing was limited in these cases. ・ We were able to estimate impact on ourpower generation businesses by conducting scenario analysis of several scenarios which assumed environmental tax and other environmentalregulations would become more widespread. We made plans for dealing with any such reforms in the future and concluded that impact on ourcompany would be limited. This scenario analysis led us to establish the following commitments in April 2019. ・ We will divest half or more of ourthermal coal interests by 2030. (JPY 55.7 billion as of the end of FY2018) ・ In principal, we will acquire no new thermal coal interests. ・ We willconduct no new initiatives with regards to our coal-fired power generation business. (We currently own no coal-fired power plants and have no relatedassets.)

C4. Targets and performance

C4.1

(C4.1) Did you have an emissions target that was active in the reporting year?Intensity target

C4.1b

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(C4.1b) Provide details of your emissions intensity target(s) and progress made against those target(s).

Target reference numberInt 1

ScopeScope 1+2 (location-based)

% emissions in Scope10

Targeted % reduction from base year1

MetricMetric tons CO2e per unit FTE employee

Base year2017

Start year2017

Normalized base year emissions covered by target (metric tons CO2e)58293

Target year2018

Is this a science-based target?No, and we do not anticipate setting one in the next 2 years

% of target achieved7.05

Target statusExpired

Please explainSojitz aims to cut CO2 emissions for our domestic group by 1% per year. 【Formula】 100% - {([FY2018 domestic CO2 emissionstotal] 55,734/ [FY2018 domestic employee] 2,410) ÷ ([FY2017 domestic CO2 emissions total] 58,293/ [FY2017 domesticemployee] 2,343)}=7.05%

% change anticipated in absolute Scope 1+2 emissions4.39

% change anticipated in absolute Scope 3 emissions0

C4.2

(C4.2) Provide details of other key climate-related targets not already reported in question C4.1/a/b.

C4.3

(C4.3) Did you have emissions reduction initiatives that were active within the reporting year? Note that this can includethose in the planning and/or implementation phases.Yes

C4.3a

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(C4.3a) Identify the total number of initiatives at each stage of development, and for those in the implementation stages, theestimated CO2e savings.

Number of initiatives Total estimated annual CO2e savings in metric tonnes CO2e (only for rows marked *)

Under investigation 0 0

To be implemented* 0 0

Implementation commenced* 0 0

Implemented* 1 368

Not to be implemented 0 0

C4.3b

(C4.3b) Provide details on the initiatives implemented in the reporting year in the table below.

Initiative typeEnergy efficiency: Processes

Description of initiativeCombined heat and power

Estimated annual CO2e savings (metric tonnes CO2e)368

ScopeScope 2 (location-based)

Voluntary/MandatoryVoluntary

Annual monetary savings (unit currency – as specified in C0.4)11363281

Investment required (unit currency – as specified in C0.4)0

Payback period4 - 10 years

Estimated lifetime of the initiative6-10 years

CommentActivities to reduce emissions within Sojitz Group (our oil storage depot management business). Calculated the decrease inmessions thanks to the company’s energy saving efforts. Reduced the amount of power used by heating tanks using electricheating, changing lights within the depot to LEDs, and updating the refigeration equipment.

C4.3c

(C4.3c) What methods do you use to drive investment in emissions reduction activities?

Method Comment

Employeeengagement

We established the Sojitz Group Environmental Policy and implemented e-learning, in-house training, and other activities to educateemployees.

C4.5

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(C4.5) Do you classify any of your existing goods and/or services as low-carbon products or do they enable a third party toavoid GHG emissions?Yes

C4.5a

(C4.5a) Provide details of your products and/or services that you classify as low-carbon products or that enable a third partyto avoid GHG emissions.

Level of aggregationGroup of products

Description of product/Group of productsWe consider the sugar cane-derived “green polyethylene” to be a low-carbon product. We are the largest foreign shareholder inBraskem (Head Office: Sao Paulo, Brazil), South America’s biggest chemical manufacturer, and our business with them stretchesback more than 40 years. In 2012, Sojitz obtained the right to act as sales agent for green polyethylene, a sugar-cane derivedplastic produced by Braskem. We sell this green polyethylene not only in Japan, but in Asia and Oceania as well. Greenpolyethylene is a plastic similar to the ones used to make plastic bags and containers, but derived from plants. While sugar cane,the chief ingredient, is still growing, it absorbs CO2 for use in photosynthesis. This means that when it is burned as waste, it can besaid to produce no net CO2 emissions (what is known as a “carbon-neutral” product). Green polyethylene therefore yields 70% lessCO2 than conventional petroleum-derived plastics, even when you include CO2 emitted during production and transport. In thisway, we expect green polyethylene to help reduce worldwide dependency on oil and prevent global warming.

Are these low-carbon product(s) or do they enable avoided emissions?Low-carbon product

Taxonomy, project or methodology used to classify product(s) as low-carbon or to calculate avoided emissionsOther, please specify (a product generating low CO2 emission)

% revenue from low carbon product(s) in the reporting year1

CommentBy our own standards, it is a product which generates no CO2 emissions when burned as waste.

C5. Emissions methodology

C5.1

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(C5.1) Provide your base year and base year emissions (Scopes 1 and 2).

Scope 1

Base year startApril 1 2017

Base year endMarch 31 2018

Base year emissions (metric tons CO2e)747229

Comment

Scope 2 (location-based)

Base year startApril 1 2017

Base year endMarch 31 2018

Base year emissions (metric tons CO2e)72746

Comment

Scope 2 (market-based)

Base year start

Base year end

Base year emissions (metric tons CO2e)

Comment

C5.2

(C5.2) Select the name of the standard, protocol, or methodology you have used to collect activity data and calculate Scope1 and Scope 2 emissions.Japan Ministry of the Environment, Law Concerning the Promotion of the Measures to Cope with Global Warming, Superceded byRevision of the Act on Promotion of Global Warming Countermeasures (2005 Amendment)

C6. Emissions data

C6.1

(C6.1) What were your organization’s gross global Scope 1 emissions in metric tons CO2e?

Reporting year

Gross global Scope 1 emissions (metric tons CO2e)659251

Start dateApril 1 2018

End dateMarch 31 2019

Comment

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C6.2

(C6.2) Describe your organization’s approach to reporting Scope 2 emissions.

Row 1

Scope 2, location-basedWe are reporting a Scope 2, location-based figure

Scope 2, market-basedWe have operations where we are able to access electricity supplier emission factors or residual emissions factors, but are unableto report a Scope 2, market-based figure

Comment

C6.3

(C6.3) What were your organization’s gross global Scope 2 emissions in metric tons CO2e?

Reporting year

Scope 2, location-based76818

Scope 2, market-based (if applicable)<Not Applicable>

Start dateApril 1 2018

End dateMarch 31 2019

Comment

C6.4

(C6.4) Are there any sources (e.g. facilities, specific GHGs, activities, geographies, etc.) of Scope 1 and Scope 2 emissionsthat are within your selected reporting boundary which are not included in your disclosure?Yes

C6.4a

CDP Page of 5225

(C6.4a) Provide details of the sources of Scope 1 and Scope 2 emissions that are within your selected reporting boundarywhich are not included in your disclosure.

SourceSojitz Group acquisition (a paper manufacturer in Vietnam).

Relevance of Scope 1 emissions from this sourceEmissions excluded due to recent acquisition

Relevance of location-based Scope 2 emissions from this sourceEmissions excluded due to recent acquisition

Relevance of market-based Scope 2 emissions from this source (if applicable)Emissions are relevant but not yet calculated

Explain why this source is excludedBecause it has been acquired within one year.

C6.5

(C6.5) Account for your organization’s Scope 3 emissions, disclosing and explaining any exclusions.

Purchased goods and services

Evaluation statusRelevant, calculated

Metric tonnes CO2e45.34

Emissions calculation methodologyAmount of paper used in FY2018 (pages A4): 20,063,000 Total weight: 20,063,000 x 4g (weight of one page A4) = 80,252,000kgSpecific consumption coefficient used: CFP Standards Database Ver.101 B-JP309005 – printing-grade uncoated paper (rawmaterial acquisition-> pulping -> papermaking -> drying -> packaging): 1.77kg/CO2 e-kg 80,252kg ÷ 1.77 = 45,34t-CO2e

Percentage of emissions calculated using data obtained from suppliers or value chain partners

Explanation[Amount of paper used x emissions per unit of paper produced]

Capital goods



Emissions calculation methodologySpecific consumption coefficient used: SC-DB Ver. 2.3 Table 6/Emissions per price of capital goods 24-000 real estate Emissionsper price of capital goods: 3.77t-CO2eq/JPY 1 million Amount spent acquiring new domestic buildings: JPY542 million x 3.77t-CO2= 2,043.34t-CO2


Explanation[Amount of new domestic acquired real estate x emissions per unit of capital price ]

CDP Page of 5226

Fuel-and-energy-related activities (not included in Scope 1 or 2)



Emissions calculation methodologySojitz’s non-consolidated electricity use for FY2018: 2,501,414kWh Specific consumption coefficient used: SC-DB Ver. 2.3 Table7/Emissions per unit of fuel purchased – electricity 0.0354kgCO2E/kWh 2,501,414kWh x 0.0354 = 88,550t-CO2


Explanation[Amount of electricity used x emissions per unit of fuel purchased]

Upstream transportation and distribution


Metric tonnes CO2e3671

Emissions calculation methodologyTotal CO2 emissions attributable to logistics and distribution in FY2018: 7,341 t-CO2 Upstream: 3,671t-CO2


Explanation[Emissions attributable to Sojitz’s domestic logistics and distribution x emissions per unit related to logistics and distribution]

Waste generated in operations



Emissions calculation methodologyAmount of general industrial waste (FY2018): 232t Specific consumption coefficient used: CFP Standards Database Ver. 101 B-JP309005-incineration (general waste) (including landfill management and leachate treatment) 0.0379kg/CO2e-kg 232,000kg x0.0379 = 8792.8t-CO2


Explanation[Amount of general industrial waste x emissions generated per unit of waste incinerated]

Business travel



Emissions calculation methodologyCO2 Emissions Resulting from BusinessTrips Overseas:5,398t-CO2 *As described in our third-party assessment


Explanation[Emissions related to business trips]

CDP Page of 5227

Employee commuting



Emissions calculation methodology※Emission factors used To calculate emission factors, we use emission units from the "Emissions Unit Values for Accounting ofGreenhouse Gas Emissions, etc., by Organizations Throughout the Supply Chain," published by the Ministry of Economy, Trade,and Industry and the Ministry of the Environment. Bus： 26,904,200yen Train： 301,077,980yen (26,904,200×0.00242)+(301,077,980×0.00137)=477,584.9966kg =478t-CO2


Explanation[The amount of commuting(Bus+Train) x Emission factors]

Upstream leased assets

Evaluation statusNot relevant, explanation provided

Metric tonnes CO2e<Not Applicable>

Emissions calculation methodology<Not Applicable>

Percentage of emissions calculated using data obtained from suppliers or value chain partners<Not Applicable>

ExplanationThe emissions in this category is not applicable because Sojitz does not have upstream leased assets.

Downstream transportation and distribution



Emissions calculation methodologyTotal CO2 emissions attributable to logistics and distribution in FY2018: 7,341t-CO2 Upstream: 3,671t-CO2


Explanation[Emissions attributable to Sojitz’s domestic logistics and distribution x emissions per unit related to logistics and distribution]

Processing of sold products

Evaluation statusRelevant, not yet calculated




Explanation

CDP Page of 5228

Use of sold products



Emissions calculation methodologySojitz Group’s total cars sold worldwide for FY2018: 90,500 90,500 cars x 1,4475Mt-CO2 (emissions per vehicle) = 130,999Mt-CO2e


Explanation[Number of passenger cars sold by Sojitz (FY2018) x emissions per unit]

End of life treatment of sold products



Emissions calculation methodology90,500 cars x 0.847t (scrap produced in disposing of one car) x 0.009tCO2e/t = 690t


Explanation[Number of passenger cars sold by Sojitz (FY2018) x emissions per unit when disposing of scrap metal from passenger vehicles]

Downstream leased assets



Emissions calculation methodology22,065m2 (Head office+Osaka Office) x 0.190t-CO2/m2 x 1 year = 4,192.35t-CO2


Explanation[Gross floor area rented to one tenant company by Sojitz managing subsidiary x emissions per unit]

Franchises





ExplanationWe do not have any franchises.

CDP Page of 5229

Investments





ExplanationInvestments subject to recording as consolidated group companies are collected together under Scope 1+2.

Other (upstream)

Evaluation status




Explanation

Other (downstream)

Evaluation status




Explanation

C6.7

(C6.7) Are carbon dioxide emissions from biologically sequestered carbon relevant to your organization?No

C6.10

CDP Page of 5230

(C6.10) Describe your gross global combined Scope 1 and 2 emissions for the reporting year in metric tons CO2e per unitcurrency total revenue and provide any additional intensity metrics that are appropriate to your business operations.

Intensity figure3.965e-7

Metric numerator (Gross global combined Scope 1 and 2 emissions)736069

Metric denominatorunit total revenue

Metric denominator: Unit total1856190000000

Scope 2 figure usedLocation-based

% change from previous year90

Direction of changeDecreased

Reason for changeEmissions decreased for Sojitz Group companies (thermal power businesses) due to their power plants operating at lower capacity.

C7. Emissions breakdowns

C7.1

(C7.1) Does your organization break down its Scope 1 emissions by greenhouse gas type?No

C7.2

(C7.2) Break down your total gross global Scope 1 emissions by country/region.

Country/Region Scope 1 emissions (metric tons CO2e)

Australia 75212

Indonesia 351600

Philippines 29973

Sri Lanka 141253

Thailand 20303

United States of America 2885

Viet Nam 2296

Russian Federation 342

Japan 35004

Other, please specify (Other countries than the above countries) 383

C7.3

CDP Page of 5231

(C7.3) Indicate which gross global Scope 1 emissions breakdowns you are able to provide.By business division

C7.3a

(C7.3a) Break down your total gross global Scope 1 emissions by business division.

Business division Scope 1 emissions (metric ton CO2e)

Automotive Division 451

Aerospace andTransportation Project Division 2

Machinery and Medical Infrastructure Division 0

Energy and Social Infrastructure Division 169556

Metals and Mineral Resources Division 76010

Chemicals Division 354542

Food and Agriculture Business Division 51786

Retail and Lifestyle Business Division 5278

Industrical Infrastructure and Urban Development Division 23

Corporate 1603

C7.5

(C7.5) Break down your total gross global Scope 2 emissions by country/region.

Country/Region Scope 2, location-based (metric tonsCO2e)

Scope 2, market-based (metric tonsCO2e)

Purchased and consumedelectricity, heat, steam orcooling (MWh)

Purchased and consumed low-carbon electricity,heat, steam or cooling accounted in market-basedapproach (MWh)

Australia 1889 2644

Indonesia 4023 5560

Philippines 5771 9476

Sri Lanka 1798 2962

Thailand 14929 31097

United Kingdom of GreatBritain and Northern Ireland

12 24

United States of America 11646 39703

Viet Nam 8936 20131

Singapore 88 169

Malaysia 141 209

Russian Federation 1815 5095

China 3334 5242

Japan 20275 45972

Other, please specify (Othercountries than the abovecountries)

2161 504678 190

C7.6

(C7.6) Indicate which gross global Scope 2 emissions breakdowns you are able to provide.By business division

CDP Page of 5232

C7.6a

(C7.6a) Break down your total gross global Scope 2 emissions by business division.

Business division Scope 2, location-based emissions (metric tonsCO2e)

Scope 2, market-based emissions (metric tonsCO2e)

Automotive Division 6247

Aerospace and Transportation Project Division 517

Machinery and Medical Infrastructure Division 1873

Energy and Social Infrastructure Division 7274

Metals and Mineral Resources Division 2514

Chemicals Division 15760

Food and Agriculture Business Division 28861

Retail and Lifestyle Business Division 6762

Industrial Infrastructure and Urban DevelopmentDivision

2029

Corporate 4981

C7.9

(C7.9) How do your gross global emissions (Scope 1 and 2 combined) for the reporting year compare to those of theprevious reporting year?Decreased

C7.9a

CDP Page of 5233

(C7.9a) Identify the reasons for any change in your gross global emissions (Scope 1 and 2 combined) and for each of themspecify how your emissions compare to the previous year.

Change inemissions(metric tonsCO2e)

Directionof change

Emissionsvalue(percentage)

Please explain calculation

Change inrenewableenergyconsumption

46102 Increased 6.26 Amounts of purchased renewable energy electricity and electricity generated from Renewable Sources On-site. 【 Formula】 46,102÷736,069=0.06263

Otheremissionsreductionactivities

736069 Decreased 89.76 CO2 emissions decresed by approximately 10% (-83,906t-CO2) due to thermal power businesses's powerplants operating at lower capacity. Scope 1/2 emissions last year totaled 819,975 t-CO2, meaning andecrease of 83,906 t-CO2 over last year. 736,069(t-CO2)÷819,975(t-CO2)×100=89.76%, meaning that werecorded an decrease of 10%.

Divestment 0 No change 0

Acquisitions 0 No change 0

Mergers 0 No change 0

Change inoutput

0 No change 0

Change inmethodology

0 No change 0

Change inboundary

0 No change 0

Change inphysicaloperatingconditions

0 No change 0

Unidentified 0 No change 0

Other <NotApplicable>

C7.9b

(C7.9b) Are your emissions performance calculations in C7.9 and C7.9a based on a location-based Scope 2 emissions figureor a market-based Scope 2 emissions figure?Location-based

C8. Energy

C8.1

(C8.1) What percentage of your total operational spend in the reporting year was on energy?More than 0% but less than or equal to 5%

C8.2

CDP Page of 5234

(C8.2) Select which energy-related activities your organization has undertaken.

Indicate whether your organization undertakes this energy-related activity

Consumption of fuel (excluding feedstocks) Yes

Consumption of purchased or acquired electricity Yes

Consumption of purchased or acquired heat No

Consumption of purchased or acquired steam Yes

Consumption of purchased or acquired cooling No

Generation of electricity, heat, steam, or cooling Yes

C8.2a

(C8.2a) Report your organization’s energy consumption totals (excluding feedstocks) in MWh.

Heating value MWh from renewablesources

MWh from non-renewablesources

Total MWh

Consumption of fuel (excluding feedstock) HHV (higher heatingvalue)

0 3198929 3198929

Consumption of purchased or acquired electricity <Not Applicable> 190 343160 343350

Consumption of purchased or acquired heat <Not Applicable> <Not Applicable> <Not Applicable> <NotApplicable>

Consumption of purchased or acquired steam <Not Applicable> 0 26631 26631

Consumption of purchased or acquired cooling <Not Applicable> <Not Applicable> <Not Applicable> <NotApplicable>

Consumption of self-generated non-fuel renewableenergy

<Not Applicable> 92572 <Not Applicable> 92572

Total energy consumption <Not Applicable> 92762 3568720 3661482

C8.2b

(C8.2b) Select the applications of your organization’s consumption of fuel.

Indicate whether your organization undertakes this fuel application

Consumption of fuel for the generation of electricity Yes

Consumption of fuel for the generation of heat No

Consumption of fuel for the generation of steam No

Consumption of fuel for the generation of cooling No

Consumption of fuel for co-generation or tri-generation No

C8.2c

(C8.2c) State how much fuel in MWh your organization has consumed (excluding feedstocks) by fuel type.

Fuels (excluding feedstocks)Liquefied Petroleum Gas (LPG)

Heating valueHHV (higher heating value)

Total fuel MWh consumed by the organization17225

MWh fuel consumed for self-generation of electricity

CDP Page of 5235

17225

MWh fuel consumed for self-generation of heat0

MWh fuel consumed for self-generation of steam<Not Applicable>

MWh fuel consumed for self-generation of cooling<Not Applicable>

MWh fuel consumed for self-cogeneration or self-trigeneration<Not Applicable>

Comment

Fuels (excluding feedstocks)Crude Oil Heavy



MWh fuel consumed for self-generation of electricity172440





Comment

Fuels (excluding feedstocks)Motor Gasoline








Comment

Fuels (excluding feedstocks)Kerosene

CDP Page of 5236








Comment

Fuels (excluding feedstocks)Natural Gas








Comment

Fuels (excluding feedstocks)Condensate







CDP Page of 5237


Comment

Fuels (excluding feedstocks)Coal








Comment

Fuels (excluding feedstocks)Liquefied Natural Gas (LNG)








Comment

Fuels (excluding feedstocks)Crude Oil Light




MWh fuel consumed for self-generation of heat

CDP Page of 5238

0




Comment

Fuels (excluding feedstocks)Compressed Natural Gas (CNG)








Comment

C8.2d

(C8.2d) List the average emission factors of the fuels reported in C8.2c.

Coal

Emission factor0.00023

Unitmetric tons CO2 per metric ton

Emission factor sourceSC-DM Ver2.3 issued by Ministry of the Environment in Japan

Comment

Compressed Natural Gas (CNG)


Unitmetric tons CO2e per GJ


Comment

CDP Page of 5239

Condensate


Unitmetric tons CO2e per m3

Emission factor sourceLaw Concerning the Rational Use of Energy

Comment

Crude Oil Heavy


Unitmetric tons CO2 per liter


Comment

Crude Oil Light




Comment

Kerosene




Comment

Liquefied Natural Gas (LNG)




Comment

CDP Page of 5240

Liquefied Petroleum Gas (LPG)




Comment

Motor Gasoline




Comment

Natural Gas


Unitmetric tons CO2e per GJ


Comment

C8.2e

(C8.2e) Provide details on the electricity, heat, steam, and cooling your organization has generated and consumed in thereporting year.

Total Grossgeneration (MWh)

Generation that is consumed by theorganization (MWh)

Gross generation fromrenewable sources (MWh)

Generation from renewable sources that isconsumed by the organization (MWh)

Electricity 341973 1905 92573 1352

Heat 0 0 0 0

Steam 0 0 0 0

Cooling 0 0 0 0

C8.2f

CDP Page of 5241

(C8.2f) Provide details on the electricity, heat, steam and/or cooling amounts that were accounted for at a low-carbonemission factor in the market-based Scope 2 figure reported in C6.3.

Basis for applying a low-carbon emission factorPower Purchase Agreement (PPA) without energy attribute certificates

Low-carbon technology typeOther low-carbon technology, please specify (We purchase renewable energy from power companies which sell it.)

Region of consumption of low-carbon electricity, heat, steam or coolingEurope

MWh consumed associated with low-carbon electricity, heat, steam or cooling190

Emission factor (in units of metric tons CO2e per MWh)0

Comment

C9. Additional metrics

C9.1

(C9.1) Provide any additional climate-related metrics relevant to your business.

C10. Verification

C10.1

(C10.1) Indicate the verification/assurance status that applies to your reported emissions.

Verification/assurance status

Scope 1 Third-party verification or assurance process in place

Scope 2 (location-based or market-based) Third-party verification or assurance process in place

Scope 3 Third-party verification or assurance process in place

C10.1a

CDP Page of 5242

(C10.1a) Provide further details of the verification/assurance undertaken for your Scope 1 and/or Scope 2 emissions andattach the relevant statements.

ScopeScope 1

Verification or assurance cycle in placeAnnual process

Status in the current reporting yearComplete

Type of verification or assuranceLimited assurance

Attach the statementIndependent Assuarance Report(1).pdf

Page/ section referencep.1-2

Relevant standardISAE3000

Proportion of reported emissions verified (%)94

ScopeScope 2 location-based



Type of verification or assuranceLimited assurance


Page/ section referencep.1-2


Proportion of reported emissions verified (%)94

C10.1b

CDP Page of 5243

(C10.1b) Provide further details of the verification/assurance undertaken for your Scope 3 emissions and attach the relevantstatements.

ScopeScope 3- at least one applicable category




Page/section referencep.1-2


C10.2

(C10.2) Do you verify any climate-related information reported in your CDP disclosure other than the emissions figuresreported in C6.1, C6.3, and C6.5?Yes

C10.2a

(C10.2a) Which data points within your CDP disclosure have been verified, and which verification standards were used?

Disclosure moduleverification relatesto

Data verified Verificationstandard

Please explain

C6. Emissions data Change in Scope 2 emissionsagainst a base year (not targetrelated)

ISAE3000 Electricity consumption: We obtained KPMG Azusa's limited third-party sustainabilityassurance for Sojitz Group's power consumption (original data used in our Scope 2calculation).

C11. Carbon pricing

C11.1

(C11.1) Are any of your operations or activities regulated by a carbon pricing system (i.e. ETS, Cap & Trade or Carbon Tax)?Yes

C11.1a

(C11.1a) Select the carbon pricing regulation(s) which impacts your operations.Japan carbon tax

CDP Page of 5244

C11.1c

(C11.1c) Complete the following table for each of the tax systems in which you participate.

Japan carbon tax

Period start dateApril 1 2017

Period end dateMarch 31 2018

% of emissions covered by tax5.13

Total cost of tax paid10351980

Comment

C11.1d

(C11.1d) What is your strategy for complying with the systems in which you participate or anticipate participating?

There is no condition allowing for us to transfer carbon tax on electricity sales at our two gas-fired power plants in the U.S. to anotherparty, meaning that we bear carbon tax as a cost. For our scenario analysis based on the IPCC’s 1.5℃ scenario, we included costsassuming the price of carbon tax imposed, and we carefully examined our future business plans and strategies. This showed that thebusinesses were largely stable and could remain profitable, leading us to conclude that impact on our business strategies would belimited.

C11.2

(C11.2) Has your organization originated or purchased any project-based carbon credits within the reporting period?No

C11.3

(C11.3) Does your organization use an internal price on carbon?Yes

C11.3a

CDP Page of 5245

(C11.3a) Provide details of how your organization uses an internal price on carbon.

Objective for implementing an internal carbon priceChange internal behaviorDrive energy efficiencyDrive low-carbon investmentStress test investments

GHG ScopeScope 1

ApplicationWe decide whether to invest in a power generation business after confirming the economic feasibility and sustainability of theproject based on a business plan which takes carbon pricing into account. Carbon pricing is applied to each power plant in whichwe have invested. Currently we are conducting a scenario analysis of held power generation assets.

Actual price(s) used (Currency /metric ton)26950

Variance of price(s) usedWe use the expected price of carbon taxes in 2050 (26,950 yen/ton-CO2e, equivalent to US$245/ton-CO2e), taken from theIPCC’S “Special Report on Global Warming of 15℃,” for internal carbon pricing, applying stress tests to our business plans toconfirm long-term business sustainability.

Type of internal carbon priceShadow price

Impact & implicationThere is no condition allowing for us to transfer carbon tax on electricity sales at our two gas-fired power plants in the U.S. toanother party, meaning that we bear carbon tax as a cost. For our scenario analysis based on the IPCC’s 1.5℃ scenario, weincluded costs assuming the price of carbon tax imposed, and we carefully examined our future business plans and strategies. Thisshowed that the businesses were largely stable and could remain profitable, leading us to conclude that impact on our businessstrategies would be limited.

C12. Engagement

C12.1

(C12.1) Do you engage with your value chain on climate-related issues?Yes, our suppliersYes, other partners in the value chain

C12.1a

CDP Page of 5246

(C12.1a) Provide details of your climate-related supplier engagement strategy.

Type of engagementCompliance & onboarding

Details of engagementIncluded climate change in supplier selection / management mechanism

% of suppliers by number1

% total procurement spend (direct and indirect)3

% Scope 3 emissions as reported in C6.51

Rationale for the coverage of your engagementWe have created a Sojitz Wood Procurement Policy which calls for us to avoid procuring wood from forests with highconservational value, to help prevent climate change and show greater concern for the environment. This policy applies to allsuppliers who provide Sojitz with goods produced using wood. This accounts for approximately 1% of all of Sojitz’s suppliers.

Impact of engagement, including measures of success=Results of 2018 Survey= Our percentage of wood classified as Level B orabove reached 66% for 2018, with wood for which onlytraceabilitycan be confirmed (Level C) totaling 34%. We also reached our targetfor wood lacking traceability (Level D), having fullyeliminated itfrom our procurement. We will continue to work towards raising thepercentage of Level A/B wood we procure and keepLevel D wood outof our procurement. ■Level A (certified wood or wood which is subject to strict management equivalent to that ofcertified wood): 49% of all wood procured (3% increase over previous year) ■Level B (wood which has not been certified, but forwhich we have verified both traceability and suitability of forest management(i.e. that the forest is subject toenvironmentally/socially-conscious forest management): 17% of all wood procured (2% decrese over previous year) ■Level C(traceable wood): 34% of all wood procured (7% increase over previous year) ■Level D (wood lacking traceability): 0% of all woodprocured

Comment

C12.1c

CDP Page of 5247

(C12.1c) Give details of your climate-related engagement strategy with other partners in the value chain.

We work together with WWF Japan on wood procurement, as part of our work towards helping prevent climate change in line withour company's environmental policy.

We have put forth a policy for procuring wood in a way which ensures legality of the wood and which shows consideration for societyand the environment (Sojitz Wood Procurement Policy).

We conduct a hands-on survey each year to determine whether the wood we procure is compliant with our policy, and the method ofsurvey and method of disclosure are both overseen by WWF Japan.

As one of the top lumber importers in japan, our company does its best to suppress illegal logging by confirming the legality of woodwe procure from countries around the world, as well as promote afforestation by confirming that our wood is procured withconsideration for the environment. We anticipate that both our helping to suppress illegal logging and our promotion of afforestationcarry a large impact in helping stave off global warming.

=Results of 2018 Survey=

Our percentage of wood classified as Level B orabove reached 66% for 2018, with wood for which only traceabilitycan be confirmed(Level C) totaling 34%. We also reached our targetfor wood lacking traceability (Level D), having fully eliminated itfrom ourprocurement. We will continue to work towards raising thepercentage of Level A/B wood we procure and keep Level D wood outof ourprocurement.

■Level A (certified wood or wood which is subject to strict management equivalent to that of certified wood): 49% of all wood procured(3% increase over previous year)

■Level B (wood which has not been certified, but for which we have verified both traceability and suitability of forest management(i.e.that the forest is subject to environmentally/socially-conscious forest management): 17% of all wood procured (2% decrese overprevious year)

■Level C (traceable wood): 34% of all wood procured (7% increase over previous year)

■Level D (wood lacking traceability): 0% of all wood procured

C12.3

(C12.3) Do you engage in activities that could either directly or indirectly influence public policy on climate-related issuesthrough any of the following?Direct engagement with policy makersTrade associations

C12.3a

CDP Page of 5248

(C12.3a) On what issues have you been engaging directly with policy makers?

Focus oflegislation

Corporateposition

Details of engagement Proposedlegislativesolution

Other,pleasespecify(Emissionreduction)

Support Acquisition of carbon credits through a joint crediting mechanism (JCM) based on carbon capture, utilization, and storage(CCUS). =Proposal to Policymakers= Sojitz proposed to Lemigas, a company under Indonesia’s Ministry of Energy andMineral Resources, that they implement a CCUS-based JCM in southern Sumatra, and we introduced Japex as theoptimal partner for that implementation. Japex and Sojitz had previously suggested to NEDO(New Energy and IndustrialTechnology Development Organization; a governmental organization) that they conduct a feasibility study if they weregoing to implement a CCUS project in Sumatra which could be expected to acquire a large number of carbon credits,aiming to simultaneously secure energy resources and curtail greenhouse gas emissions. They used NEDO’s capital toselect an F/S business and conduct the F/S.

We proposedthe optimalpartner forLemigas, acompany underIndonesia’sMinistry ofEnergy andMineralResources.

C12.3b

(C12.3b) Are you on the board of any trade associations or do you provide funding beyond membership?Yes

C12.3c

(C12.3c) Enter the details of those trade associations that are likely to take a position on climate change legislation.

Trade associationThe Japan Foreign Trade Council, comprised of Japanese trading companies.

Is your position on climate change consistent with theirs?Consistent

Please explain the trade association’s positionWe set a goal of reducing specific energy consumption (by floor space) to 23.5ℓ/m2 by FY2030, in line with the JFTC's CO2emissions reduction target designed to combat global warming ("Plan for the Realization of a Low-Carbon Society"). This is a22.4% reduction from our baseline year of 2009. Although the Plan for the Realization of a Low-Carbon Society sets the deadlinefor its CO2 reduction targets as "by FY2020," we extended this deadline to FY2030.

How have you influenced, or are you attempting to influence their position?The JFTC holds "Global Environment Committee" meetings four times per year, and during these meetings, we encouraged theJFTC to change to reporting data in specific energy consumption rather than energy usage, since this enables year-on-yearcomparison which more closely matches actual conditions. Our initiative led the JFTC to change from reporting data according toenergy usage, with the organization now reporting specific energy consumption instead.

C12.3f

CDP Page of 5249

(C12.3f) What processes do you have in place to ensure that all of your direct and indirect activities that influence policy areconsistent with your overall climate change strategy?

(1)Direct engagement

Sojitz has set forth a number of sustainability goals as part of the Medium-term Management Plan leading up to 2020. When we setthese goals, we confirmed that the CCUS verification business would align with our goal of “help achieve a decarbonized society,” asset forth in the Sojitz Sustainability Challenge. We then reported the suitability of the business to the Sustainability Committee.

(2)Trade association

We participate in regularly held debriefing sessions of the Japan Foreign Trade Council, confirm matters to report (status of follow-ups on reports submitted to the Ministry of the Economy, Trade, and Industry regarding energy saving measures, proposals whichKeidanren make to the government on behalf of specific industries, etc.), and as necessary, report these to the SustainabilityCommittee and Board of Directors. The content of these reports is also shared with related units and group companies via posting onthe company intranet.

C12.4

(C12.4) Have you published information about your organization’s response to climate change and GHG emissionsperformance for this reporting year in places other than in your CDP response? If so, please attach the publication(s).

PublicationIn mainstream reports

StatusUnderway – previous year attached

Attach the documentar2018e_e.pdf

Page/Section referenceGovernance p. 34 -p.49 Strategy p.8 -p.9、 p.12-p.19 Risk & opportunity p.52 -p.87 Emissions figures p.11

Content elementsGovernanceStrategyRisks & opportunitiesEmissions figures

Comment

PublicationIn voluntary communications

StatusComplete

Attach the documentEnvironmental Data2018(2).pdf

Page/Section referencep.1-p.6

Content elementsEmissions figuresEmission targetsOther metrics

Comment

Publication

CDP Page of 5250

In mainstream reports

StatusComplete

Attach the documentFinancial Results for the year ended March 31_2019.pdfyukashoken_report20190628.pdf

Page/Section referenceyukasyoken_report20190628 -Governance p. 35-p.70 -Strategy p.11-p.13 -Risk & opportunity p.14-p.18 -Other metrics p.19-p.22Financial Results for the year ended March 31 2019 -Other metrics p.11

Content elementsGovernanceStrategyRisks & opportunitiesOther metrics

Comment(Environment / Industrial Infrastructure business) An increase in industrial machinery business raised revenue by 17.82% over theprevious period, bringing it to JPY 134,737,000,000. Meanwhile, revenue contributed by infrastructure-related business broughtprofit for the period up JPY 2,848,000,000 over the previous period, yielding JPY 7,010,000,000 total. Our long-held infrastructurebusinesses steadily contributed to revenue, and we saw a greater number of transactions for industrial machinery alongside healthygrowth in the global economy. The division also constructed a new business foundation through involvement in a hospital facilitymanagement project in Turkey and other projects capable of generating stable earnings, such as a gas-fired power generationproject in the U.S. and renewable energy projects in Japan, the Americas, and Europe.

PublicationIn voluntary communications

StatusComplete

Attach the documentSustainability_Goal.pdfSustainability_challenge.pdf

Page/Section referenceSustainability Challenge p.1-p.3 Sustainability Goal p.1-p.5

Content elementsGovernanceStrategyRisks & opportunities

Comment

C14. Signoff

C-FI

(C-FI) Use this field to provide any additional information or context that you feel is relevant to your organization's response.Please note that this field is optional and is not scored.

C14.1

CDP Page of 5251

(C14.1) Provide details for the person that has signed off (approved) your CDP climate change response.

Job title Corresponding jobcategory

Row1

Representative Director, Senior Managing Executive Officer COO, Corporate Planning Department, Corporate SustainabilityOffice

Director on board

Submit your response

In which language are you submitting your response?English

Please confirm how your response should be handled by CDP

Public or Non-Public Submission I am submitting to

I am submitting my response Public Investors

Please state the main reason why you are declining to respond to your CustomersPrefer to work directly with customer, not through a third party

Please confirm belowI have read and accept the applicable Terms

CDP Page of 5252

Documents

Sojitz Corporation - Climate Change 2019 · Sojitz Corporation - Climate Change 2019 C0. Introduction C0.1 (C0.1) Give a general description and introduction to your organization