Environmental Management
Basic Approach
SHI Group recognizes that conservation of the global environment and climate action are issues that are to be prioritized in our effort to realize a sustainable society, and we endeavor to reduce our environmental impact across all operations, including the entire lifecycle of our products, in accordance with our Sustainability Basic Policy.
SHI Group Environmental Policy
In December 2021, SHI Group revised the SHI Group Environmental Policy with the aim of further reducing the environmental impact of all business activities, including the entire product lifecycle, so that we may address environmental issues such as the pressing challenge of climate change.
- 1SHI Group will work to conserve the global environment and endeavor to prevent environmental pollution.
- 2SHI Group will strive to reduce environmental impacts through efforts such as reducing carbon dioxide emissions and waste, reusing and recycling resources, and using energy more efficiently, and work toward achieving a decarbonized and circular society.
- 3SHI Group will work to address impacts of its operations on nature and ecosystems and conserve biodiversity.
- 4SHI Group will strengthen its environmental management structure and continue to operate and improve its environmental management system.
- 5SHI Group will not only comply with environmental laws and regulations but will also establish and apply voluntary standards to assess its environmental performance as needed.
- 6SHI Group will work to raise environmental awareness of everyone involved in its operations through continuous environmental education and awareness programs.
- 7SHI Group will share with and communicate and disclose to all stakeholders this Environmental Policy.
Promotion of Environmental Management
We are committed to environmental management. Every three years since FY2005, we have formulated medium-term environmental plans that set out specific activity targets.
Environmental Management Structure
Management of SHI Group-wide environmental activities is implemented by the General Manager of the General Administration Group and the Environmental Management Division under the supervision of the Officer in Charge of General Administration who is appointed by the President. As the person with ultimate responsibility, the President approves and determines SHI Group's Environmental Policy.
Environmental audits are conducted in conjunction with local status checks to verify the status of environmental management at all manufacturing sites including those of affiliated companies, and the results of these activities are reported and problems shared at environmental management meetings. In addition, environmental education is provided to inform our employees of SHI Group's Environmental Policy, environmental targets, and initiatives.
Activities
- Environmental audits (once/year)
- We audit our manufacturing sites in Japan, China, and Southeast Asia to assess overall environmental management from the perspectives of environmental incident prevention, legal and regulatory compliance, and global warming prevention.
Audit results are evaluated on a five-point scale for each division based on our own evaluation standards, and reported to the Executive & Operating Officers Meeting for improvement.
- Examinations by General Administration Group General Manager (as required)
- In conjunction with environmental audits, the General Manager of the General Administration Group conducts a separate examination and provides guidance to those divisions that the General Manager deems necessary (such as divisions where environmental incidents occurred the previous year, divisions where environmental targets were significantly underachieved, etc.).
- Environmental management meetings (twice/year)
- Environmental Management Meetings are held for works and affiliated companies in Japan to report activity results and share problems. China Environmental Management Meetings are also held for affiliated companies in China with the aim of raising the level of environmental activity performance of these companies.
- Regional activities
- In each region, intraregional meetings are held on the topics of global warming prevention, energy efficiency enhancement, and other themes. Reports are provided on activity progress, case studies presented, and other information shared.
Environmental Risk Assessments
SHI Group regularly conducts environmental risk assessments at each of our sites to preempt environmental incidents.
Additionally, if an environmental incident occurs, we take appropriate action and thoroughly analyze the incident as part of our efforts to prevent any recurrence as well as similar incidents involving comparable equipment or substances at other sites.
SHI Group operates in a manner that bolsters prevention of potential environmental incidents by addressing events that may someday trigger an environmental incident even though the event itself is not classified as such.
6th Medium-Term Environmental Plan
The 6th Medium-Term Environmental Plan, which covered FY2020 to FY2023, set out four material issues and promoted activities to address these.
In FY2023 the final year of the 6th Medium-Term Environmental Plan, we achieved most all of our targets.
- 1Strengthen environmental risk management
- 2Reduce CO2 emissions in a consciousness response to climate change
- 3Reduce the environmental footprint of business activities
- 4Conserve biodiversity
Targets & Results (FY2023)
| Benchmark | Item | FY2023 Target | FY2023 Results | |
|---|---|---|---|---|
| Environmental Management | Major environmental incidents | 0 | 0 | |
| Climate change adaptation | CO2 emissions | Total amount (Market-based) | ー | 18% reduction |
| Reduction in CO2 from energy-conserving activities *1 | Japan: 4% reduction (compared to FY2019) |
5.7% reduction | ||
| Total (excluding renewable energy) *1 | Japan: 4% reduction (compared to FY2019) |
4.4% increase | ||
| Environmental footprint reduction | Volume of waste generated (basic unit) *2 | Japan: Maintain (compared to FY2017~2019) |
26.6% reduction | |
| Overseas: 3% reduction (compared to FY2019) | 24.5% reduction | |||
| VOC emissions | Japan: Maintain (compared to FY2019) |
17.6% reduction | ||
| Overseas: 1% reduction (compared to FY2019) | 28.3% reduction | |||
- *1Comparison based on FY2019 actual calculation coefficient
- *2Including hazardous waste
7th Medium-Term Environmental Plan
The 7th Medium-Term Environmental Plan establishes three material issues and promotes initiatives to address these with the aim of achieving SHI Group’s target of carbon neutrality by 2050. Single-year targets are also set and progress monitored.
- 1Reduce total CO2 emissions
- 2Reinforce environmental management
- 3Alleviate environmental footprint accompanying business activities
Data
Environmental Data
The scope of non-financial data provided covers Sumitomo Heavy Industries Ltd., consolidated subsidiaries, and equity method affiliates. Context changes are duly noted in the report.
Site-Specific Environmental Impact Data
SHI Group compiles and manages data on the environmental impact of our works, group companies manufacturing in Japan (outside our works), and key group companies manufacturing overseas.
Environmental Accounting
SHI Group performs environmental accounting based on the Environmental Accounting Guidelines 2005 issued by the Ministry of Environment, which serve as the benchmark for measuring investments, costs and their effects as they relate to environmental conservation.
Environmental Conservation Costs and Effects (Classified According to Business Activity)
| Environmental conservation costs | Environmental conservation effects | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Classification | Principal initiatives | Investment | Cost | Economic effect | Key points | |||||||
| FY 2021 |
FY 2022 |
FY 2023 |
FY 2021 |
FY 2022 |
FY 2023 |
FY 2021 |
FY 2022 |
FY 2023 |
||||
| (1) Costs within business segment | Maintenance/depreciation of equipment reducing environmental load | 808 | 768 | 1,329 | 1,010 | 1,209 | 788 | 381 | 501 | 445 | ||
| Itemization | (1)-1 Pollution prevention costs | Maintenance and management of equipment to prevent air and water pollution, and measurement of equipment noise and vibration | 207 | 71 | 393 | 253 | 189 | 271 | 0 | 0 | 0 | |
| (1)-2 Global environmental conservation costs | Investment in energy-saving measures (power consumption monitoring, energy-saving devices, replacement of lighting, etc.) | 593 | 682 | 857 | 112 | 110 | 43 | 93 | 170 | 36 | Reduction in expenses due to energy/resource savings and 3Rs | |
| (1)-3 Resource recycling costs | Waste reduction, recycling investment (recycling, use of recycled resources) | 8 | 15 | 80 | 645 | 911 | 475 | 287 | 331 | 410 | Reduction in expenses due to waste reduction Sales of valuable resources |
|
| (2) Upstream/downstream costs | Product packaging material reduction, home appliance recycling, and use of both sides of paper | 1 | 1 | 1 | 2 | 2 | 2 | 0 | 0 | 0 | ||
| (3) Management activity costs | ISO14001 standard maintenance and administration, and green space expansion | 13 | 16 | 0 | 155 | 133 | 159 | ― | ― | ― | Economic effect (substantive effect) achieved with environmental conservation measures shown in an appended table. | |
| (4) Research & development costs | R&D for reducing environmental product footprint, and environmental equipment R&D | 3,306 | 1,442 | 3,464 | 222 | 1,303 | 3,105 | ― | ― | ― | ||
| (5) Social activity costs | Regional environmental conservation and greening activities | 2 | 1 | 1 | 19 | 2 | 3 | 0 | 0 | 0 | ||
| (6) Environmental damage compliance costs | Imposition on air pollution load, and charges for green belts and pollution compensation | ― | ― | ― | 1 | 0 | 0 | 0 | 0 | 0 | ||
| Total | 4,129 | 2,228 | 4,796 | 1,408 | 2,648 | 4,058 | 381 | 501 | 445 | |||
Table Showing Change in Environmental Conservation Costs During Last Three Years
| Description of effects | FY2021 | FY2022 | FY2023 |
|---|---|---|---|
| Total environmental conservation costs | 5,537 | 4,877 | 9,300 |
| Total investment | 4,129 | 2,228 | 4,796 |
| Total costs | 1,408 | 2,648 | 4,058 |
| Total research & development costs | 3,528 | 2,744 | 445 |
Economic Effects Associated with Environmental Conservation Measures (Substantial Effects)
| Description of effects | FY2021 | FY2022 | FY2023 | |
| Revenues | Business revenues obtained by recycling waste or used products | 287 | 331 | 410 |
| Cost savings | Reduction in energy costs (electric power and fuel costs) from energy savings | 93 | 170 | 36 |
| Reduction in waste disposal costs from resource savings or recycling | 0 | 0 | 0 | |
| Reduction in costs (labor, materials, repairs and other maintenance and operation costs) | 0 | 0 | 0 | |
| Total | 381 | 501 | 445 | |
Environment & Energy-Saving Capital Investment
SHI Group systematically and actively updates dilapidated equipment and introduces new technologies from the standpoint preventing environmental incidents as well as saving and enhancing energy efficiency. In addition, capital investment amounts are ascertained using a three-point classification comprising environmental equipment, manufacturing energy, and energy efficiency.
In FY2023, SHI Group invested ¥1.63 billion in relevant equipment.
| FY2023 Environment-related capital investment (million yen) | ||||
| Environment-related | Manufacturing energy (Solar power equipment) |
Energy-saving related | Total | |
| Japan | 423 | 587 | 473 | 1,483 |
| Overseas | 0 | 97.5 | 57 | 155 |
| Total | 423 | 684.5 | 530 | 1,638 |
External Assessments & Third-Party Assurances
ISO 14001 Certification
SHI Group has been engaged in environmental activities based on the SHI Group Environmental Policy, and working to obtain certification at each of our works in Japan since 1998.
In 2018, we acquired unified certification for the SHI Group in order to integrate environmental management operational rules and make it more efficient to maintain certification. Currently, we have 43 sites that have been certified.
In addition, all our affiliated companies in Japan and overseas that are not included in the unified certification have acquired certification individually, and we are making every effort to ensure appropriate environmental management. In 1998, we also started acquiring certification for key manufacturing plants overseas. As of 2023, 21 of our sites have acquired certification.
Percentage of SHI Group with certification (based on sales): 79.8%
As we move forward, we will also review environmental activities as a challenge to be addressed in our business and promote such activities throughout the SHI Group.
Third-Party Assured Environmental Impact Data
To provide more reliable environmental impact data, SHI Group has engaged Bureau Veritas Japan to provide third-party assurance of this data.
<Target Data>
The following environmental data for the period from January 1, 2023 to December 31, 2023
･Energy usage in business activities at 31 SHI Group sites in Japan and 41 sites overseas
･Scope 1 and 2 greenhouse gas emissions (CO2 by energy source)
･Scope 3 greenhouse gas emissions (Categories 1, 2, 3, 4, 5, 6, 7, and 11)*
- *Calculated according to SHI Group rules
Response to CDP
CDP Climate Change
CDP is a UK-based international non-governmental organization that collects and analyzes information on the environmental initiatives of companies and cities and publishes the results. It is the world's largest environmental survey, and each year it assigns an eight-level rating (A, A-, B, B-, C, C-, D, D-) based on the responses from companies.
The results of the CDP Climate Change Report are shown in the table below. We are working to improve our score by disclosing information in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and by enhancing non-financial information.
| CDP Climate Change | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
| B | B- | B- | B | A- | A |
CDP Water Security
The results of the water security report are shown in the table below. Similarly, in water security, we are working to improve our scores by enhancing non-financial information.
| CDP Water Security | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
| B- | C | B- | C | A- | B |