EnvironmentDisclosure in line with the Recommendations of the TCFD

The climate-related financial disclosures in line with the Recommendations of the TCFD here in English page is under the renewal.
This page was last updated as of December 15, 2020, and not in line with the latest version updated on September 15, 2021 as shown in Japanese page.


Recognizing the importance of climate-related financial disclosures, the Marubeni Group affirmed the recommendations of the TCFD*1 in February 2019. We are endeavoring to evaluate risks and opportunities engendered by climate change and to enhance related disclosure.

1 The Task Force on Climate-related Financial Disclosures (TCFD) was established by the Financial Stability Board (FSB).

Stance on Climate Change

Marubeni Group's Recognition on the current climate-related issues

The Marubeni Group recognizes climate change as a global and highly urgent social issue, and identifies it as one of its Environmental and Social materiality.

Recognizing the growing expectations and needs for the role to be played by the private sector under the Paris Agreement, in which the international community cooperates to reduce greenhouse gas emissions, we believe that contributing to climate change countermeasures through our business will lead to the sustainable growth of the Marubeni Group.

Basic Stance on Climate Change

The Marubeni Group is striving to anticipate shifts in society linked to climate change and to create growth opportunities while mitigating related risks.

(1) GHG emissions-reduction business creation

One aim of our growth strategy is to create new businesses to reduce emissions of greenhouse gases (GHGs), especially GHG emissions by other emitters*2. At the same time, we are working to reduce the GHG emissions of the Marubeni Group.

2 GHG-emitting entities not in the Marubeni Group, notably business partners and suppliers of products and services

(2) Flexibility to revise business portfolio

With businesses expected to face obsolescence or downward earnings pressure due to climate change, we will consider alternatives, including exiting the business. To avoid damaging corporate value, we aim to revise our business portfolio at the appropriate time and to change asset allocations accordingly.

For example, we declared that, as a basic rule, we will not enter any new coal-fired power generation business, and will cut our net power generation capacity from coal-fired power generation business, which is approximately 3GW as of the end of the fiscal year 2018, in half by 2030 through the announcement of “Notification Regarding Business Policies Pertaining to Sustainability (In Relation to Coal-Fired Power Generation Business and Renewable Energy Generation Business)" (September 18, 2018).

(3) A highly diversified business portfolio

The Group’s business portfolio is highly diversified, providing a high degree of resilience to climate change. Potential impacts on the Group’s finances due to the risks within specific industries or businesses are expected to be limited.

<Profit structure of the Marubeni Group (consolidated basis)>
Profit structure of the Marubeni Group (consolidated basis)

Governance

Figure: Climate Change Governance System
Figure: Climate Change Governance Structure

Our governance structure ensures adequate Board supervision of important climate change-related issues.

Specifically, the Sustainability Management Committee, an advisory body to the President, leads the assessment of any climate-related opportunities/risks in accordance with the Recommendations of the TCFD, deliberation of related strategy, risk management, setting and review of metrics and targets, and monitoring, based on the progress of climate-related innovation and changes in the external environment. It reports at least annually to the Board of Directors. Important matters are deliberated and voted on by the Corporate Management Committee and by the Board of Directors.

The Sustainability Management Committee is chaired by the Representative Director (Chief Sustainable Development Officer) and also includes External Directors and External Audit & Supervisory Board Members in an advisory role. The Committee manages and oversees sustainability issues from an independent external perspective.

Strategy and Specific Initiatives

[Outline of the assessment results of climate-related opportunities and risks]

Figure: Process of identification of opportunities and risks and materiality assessment
Figure: Process of identification of opportunities and risks and materiality assessment

The Marubeni Group strives to implement strategic measures for climate-related opportunities and risks based on “Basic Stance on Climate Change.”
In the fiscal year 2019, we have identified the major climate-related opportunities and risks and conducted materiality assessment for the Marubeni Group by considering the potential impact on each business division under the two global warming scenarios* of 1.5˚C and 4˚C based on the Recommendations of the TCFD. Thereafter, we have identified major climate-related opportunities and risks that have a relatively significant impact on the Marubeni Group as a whole based on the materiality assessment for each business division. Specific implementation methods are described later.

The major climate-related opportunities and risks for the Marubeni Group as a whole, as well as the particularly material opportunities and risks, and respective response policies are as follows:

● Major climate-related opportunities/risks

  1. Adoption of renewable energy and other forms of energy not dependent on fossil fuels; related policy measures to cut emissions
  2. Changes in market demand due to transition to low-carbon or decarbonized forms of transport, with more new business opportunities
  3. Trading and business opportunities related to transition to circular economy

● Businesses representing major opportunities
As a business that represents major opportunities particularly in the Marubeni Group, we have identified the renewable energy generation business and formulated the business policy to acquire opportunities.

Businesses representing major risks

● Businesses representing major risks
As a business that represents relatively major climate-related risks in the Marubeni Group as a whole, we have identified the coal-related business and formulated the business policy to mitigate risks.

[How to identify opportunities and risks and method of materiality assessment]

[How to identify opportunities and risks and method of materiality assessment]

Figure: Outline of scenarios used
Figure: Outline of scenarios used

■ Scenarios used
To identify climate-related opportunities and risks, the assessment was conducted based on the 1.5℃ scenario with reference to the “Special Report on the Impact of Global Warming of 1.5℃” released by the Intergovernmental Panel on Climate Change (IPCC), and 4℃ scenario based on the IPCC's RCP8.5 scenario (high-level reference scenario) by 2050.

Figure: Identification of opportunities and risks, and materiality assessment (image)
Figure: Identification of opportunities and risks, and materiality assessment (image)

■ Methods of identification of climate-related opportunities and risks, and materiality assessment
Based on the 1.5℃ and 4℃ scenarios, we have identified climate-related opportunities and risks on the 13 business divisions (excluding the Next-Generation Business Development Division). The identified opportunities and risks were classified using a matrix based on the impact on the Group (vertical axis) and the likelyhood (horizontal axis), and then materiality assessment for each business division was conducted.

・ Assessment of the impact of opportunities and risks
Items to be assessed: Comparatively assess revenues and expenditures, estimated market size, and sales scale related to identified “climate-related opportunities and risks” in three levels (major, medium, minor) in each business division

・ Assessment of the likelihood of opportunities and risks
Assess the likelihood based on IPCC Fifth Assessment Report (AR5) and IEA, etc.

Reference: Opportunities identified for each business division

In the materiality assessment conducted at business division level, we have classified businesses and services that are identified as those representing major opportunities for each climate-related phenomenon.

Reference: Opportunities identified for each business division

In addition, specific examples of initiatives related to identified opportunities are as follows:

Business and services to be provided Examples of initiatives
Large-scale offshore wind farms (Asia/Europe) and solar power plants (Middle East, etc.) Sweihan photovoltaic independent power project in United Arab Emirates (gross generation capacity 1,177MW) Release
Amin solar PV IPP project in Oman (gross generation capacity 105MW) Release
Offshore wind farm project (gross generation capacity 139MW) in Akita Prefecture Release(20.02.03)
Release(20.03.27)
Community-based multi utilities service using distributed power generation Co-development of community based business in Ina City, Nagano Release
Renewable and distributed power generation facilities, supplying related materials and equipment, and related businesses Investment in WASSHA, a Tanzanian company working to expand supplies of solar power to off-grid regions of Africa Release
Investment in GridMarket, LLC, U.S. company providing development support services for distributed energy resources projects Release
Business alliance on a solar panel recycling business with Tottori Resource Recycling Release
Provision of renewable energy generation solutions business, including system procurement and power plant development support Information (Japanese Only)
Installation/construction of renewable power generation, carbon capture and storage (CCS) and other facilities for a decarbonized future Investment in CCSL, a UK company with Carbon Capture, Utilization (CCU) technology Release
Establishment of renewable energy funds or funds using green finance Investment in photovoltaic power generation facilities in Japan through establishment of Japan Infrastructure Fund Investment Corporation Release
Supplying copper essential to the spread of renewable energy and electrification Strengthening production at Minera Los Pelambres in Chile and certification of financing as a Green Loan Release
Conversion to renewable energy at Minera Centinela/Minera Antucoya Release(19.05.30)
Release(20.04.03)
Supplying CO2-free fuels such as hydrogen and ammonia Demonstration test of hydrogen supply chain construction between Japan and Australia and in Miyagi Prefecture Release(18.04.12)(Japanese Only)
Release(18.08.03)
Feasibility study on ammonia co-firing thermal power generation Release
Sale and sharing of electric vehicles (EVs), clean energy vehicles and other low-carbon products PoC test for optimizing the operation of EV trucks by a joint venture company with Chubu Electric Power with the aim of electrification of large commercial vehicles Release
Supplying materials required for EVs such as lithium-ion battery materials, cobalt, nickel, and aluminum/lightweight materials Signing a memorandum of understanding with Swedish Northvolt AB for collaboration in the lithium-ion battery business through material supply, etc. Release
Signing a memorandum of understanding with Austria AMAG for sales of lightweight and sustainable aluminum Release
Investment in AMI, Canadian company that launches magnesium ingot production and sales business Release
Supplying EV charging infrastructure facilities PoC test related to the development of mass productional multi super-fast EV charger using large refurbished batteries Release
Supplying facilities for recycling businesses, including waste material recycling operations Feasibility study on production and sales business of sustainable aviation fuel in Japan Release
Supply of cellulose nanofiber Business alliance with Chuetsu Pulp & Paper for developing application and sales of cellulose nanofibers Release
Supplying paperboard made from recycled materials Expansion of business at domestic and overseas bases such as Koa Kogyo and Fukuyama Paper Release
Textile products recycling businesses Investment in Circ LLC (formerly TYTON BioSciences LLC), U.S. company with textile products recycling technology Release
Supplying facilities for plant factory Supply of greenhouse equipment for the production of Japanese strawberries to Russian Victoria Estate Release

[Reference] Risks identified for each business division

Each business division is analyzing operations and services identified as potential major risks and considering measures to mitigate these risks. Some of the risk impact assessment done at business division level is outlined below.

Climate-related phenomenon Projected impact on business Risk mitigation countermeasures Related division
Transition risks Transition to renewable energy sources, with emissions-reduction policy measures Adoption of renewables and the transformation to EVs could negatively impact earnings due to lower sales volumes of fossil fuels. Develop new energy businesses such as hydrogen and ammonia Energy Division
The shift to renewables could impact earnings due to reductions in demand for construction machinery used in coal mining and outsized tires used in mining equipment, alongside big increases in procurement costs due to stricter emissions reduction regulations. Pursue sales opportunities for distributed power sources and related business opportunities Construction, Industrial Machinery & Mobility Division
Shift to EVs Earnings could be impacted negatively by the shift to EVs and other low-carbon vehicles due to higher upfront costs and reduced demand for existing parts and automobiles. Respond to increased sales opportunities linked to EV adoption and growth in demand for battery-charging infrastructure, etc.
Physical risks Changing climate patterns Failure of crop harvests in a major region such as North America due to changes in climate patterns could significantly impact the earnings of grain origination and agri-input businesses. Develop agri-input products and services that help farmers increase productivity Agri Business Division
More extreme weather events
(storms, floods, heavy rain)
Operations could be affected if more extreme weather events paralyzed logistical functions. Develop more geographically diversified procurement/sales networks and production
Impact on the Marubeni Group
Figure: Assessment of the impact
Figure: Assessment of the impact

The most material matters of the Marubeni Group are identified based on the “degree of impact of climate change at industry level” and the “degree of impact on the Marubeni Group”.

We classified the divisions’ business associated with four sectors that are likely to have a significant impact of climate change: ((1) energy, (2) transportation, (3) materials and buildings, (4) agriculture, food, and forest products) as specified in the Recommendations of the TCFD to be the areas representing the high “degree of impact of climate change at industry level,” and then assessed those areas together with the “degree of impact on the Marubeni Group” based on sales and cost scale of the Marubeni Group as a whole. We then identified major climate-related opportunities and risks to the Marubeni Group.

Risk Management

The Sustainability Management Committee undertakes the management and monitoring of the Marubeni Group’s major opportunities and risks related to climate change. Regarding risks in particular, the Committee reviews risk assessments with reference to trends pertaining to sustainability in Japan and overseas areas, mainly in international organizations, governments, industry sectors, and industrial organizations, as well as information related to stakeholders such as investors, financial institutions and non-governmental organizations.

■ Risk management in internal processes
Sustainability risk assessments, including risks related to climate change, have been introduced as part of the risk analysis prior to investment decisions.

Metrics and Targets

Metrics and targets set by the Marubeni Group are as follows. The progress to achieve the targets, which is managed by the Sustainability Management Committee, is disclosed in public once a year as its policy.

Metrics and Targets Progress and initiatives
1. Cut coal-fired net generation capacity in half from end-March 2019 levels by 2030 Approx.2.7GW (as of March 31, 2020)
[Press release for reference] October 4, 2019
Notification Regarding Business Policies & Progress Pertaining to Sustainability (Update to Coal-Fired Power Generation Business and Renewable Energy Generation Business)
2. Expand the ratio of net generation capacity of renewable energy sources to approximately 20% by 2023
  • Start of commercial operation of Sweihan Photovoltaic IPP Project (gross generation capacity 1,177MW) in the United Arab Emirates in April 2019
  • Start of commercial operation of Amin Solar PV IPP Project (gross generation capacity 105MW) in Oman in May 2020
  • Loan agreements signed in December 2019 for Biomass Power Generation Project (gross generation capacity 44MW) in Gamagori City in Aichi Prefecture
  • Power purchase agreement signed for Al Kharsaah Solar PV IPP Project (gross generation capacity 800MW) in Qatar in January 2020
  • Loan agreements signed in February 2020 for Offshore Wind Farm Project (gross generation capacity 139MW) at Akita Port and Noshiro Port in Akita Prefecture
3. Expand “Green Revenue” streams to around ¥1.3 trillion by FYE 3/2024 Approx. ¥770 billion (FYE 3/2020)
4. Reduce greenhouse gas emissions (energy-related) by 25% compared to FYE 3/2019 emissions by FYE 3/2031※3 Click here to view the Environmental Data.

3 consolidated direct and indirect greenhouse gas emissions (Scope 1 and Scope 2)