Visualization of CO2 emissions
Efforts to Quantify GHG Emissions
for Steel Supply-Chain
Sumitomo Corporation Group has identified “mitigation of climate change” as one of the key social issues. As a long-term goal, the Group will aim for carbon neutrality in its business and to realize sustainable energy cycle by 2050, and also will aim to achieve its mid-term goal, which is to reduce GHG emissions by 50% or more by 2035 compared to 2019 levels.
To achieve these goals, Sumitomo Corporation Global Metals Co., Ltd. (hereinafter “SCGM Group”) set up a working group in 2021 and has been working on calculation and quantification of GHG emissions for Steel Supply-Chain (hereinafter “the work”).
CO2 Emissions in 2021
We carried out the calculation as follows and specified SCGM Group GHG eimissions as 565,125t-CO2 in Scope 1, Scope 2 and Scope 3 (Category 4 : upstream transportaton and distribution). For the ratio by scope, more than 98% comes from Scope 3 category 4(upstream transportaton and distribution). This category is not what we can control directly but quantified in the work because we think it is our function as bearer of steel supply chain and also it will help the achievement of carbon neutralization in steel industry by striving to reduce GHG emissions with our customers.
1. Boundary of the Data Aggregation
Scope1:Sumitomo Corporation Global Metals Co., Ltd. and its four consolidated subsidiaries
Scope2:Sumitomo Corporation Global Metals Co., Ltd. and its four consolidated subsidiaries
Scope3 Category 4 (upstream transportation and distribution):Sumitomo Corporation Global Metals Co., Ltd.
※The target range of domestic transportation is from steel manufacturers to customers including transit warehouse. Although this range includes a transportation of products which is owned by the steel manufacturers and also arranged transportaion by them, we decide this range as the target because our scope of "the work" is to quantify GHG emmisons in whole steel supply chain. On the other hand, transportation from outsourcing factory and warehouse to customers which we own and arrange transtportation is out of the target range because of a restriction of collection of related data
(above is shown in Picture 1).
The target range of overseas transportation is export trading. In particular, from public ports and steel manufacturer's port to overseas ports. Domestic transportation from steel manufacturers to public ports is included in this range.
We quantified within the above target range of our top 4 suppliers, which covers 85% of our sales quantity in FY2021
Scope 1 and Scope 2 are calculated by multiplying the energy consumption at each site and the CO2 emission factors shown below. Energy consumption is calculated by following method.
・Electricity, hot and cold water, gas, diesel, kerosene: Calculated by purchase quantity as consumption.
・Gasoline: Estimated consumption with purchase cost and annual average price of gosoline by country or estimated consumption with mileage and average fuel consumption.
Source of CO2 emission factors is as follows.
Scope1:(Domestic/Overseas) Emission factors are based on "the Catalog of calculation methods and emission factors for GHG emissions accounting, reporting, and disclosure systems" published by Japan's Ministry of the Environment.
Scope2:(Domestic) Emission factors are based on "the catalog of calculation methods and emission factors for GHG emissions accounting, reporting, and disclosure systems" published by Japan's Ministry of the Environment.
For electricity, adjusted emission factors of individual power companies in "Emission factors by electric power provider (for calculation of GHG emissions by specific emitters) -FY2020 results-" are used, which is refered in the catalog above.
(Overseas) Emission factors are based on the country-specific data in 2019 listed on "Emissions factors 2021", an IEA(International Energy Agency) satatistics.
Scope3 is calculated based on the ton-kilometer method. Source of CO2 emission factor is as follows.
Scope3:(Domestic/Overseas) Emission factors per ton-kilometer by transport mode in "the Common guideline for calculation methods of CO2 emissions in the logistics industry Ver.3.1" published by Japan's Ministry of Economy, Trade and Industry, and Ministry of Land, Infrastructure, Transport and Tourism.
3.Third Party Assuarance
As a result of this initiative, we obtained third-party assurance from KPMG AZSA Sustainability Co., Ltd., which conducted the assurance engagement in accordance with International Standard on Assurance Engagements (ISAE) 3000 and ISAE 3410 of the International Auditing and Assurance Standards Board.
Please refer to "Independent Assurance Report" for further details about the assurance engagement.
Since its foundation in 2003, Sumitomo Corporation Global Metals Group has been committed, based on an enterprising spirit, to creating new value through its metal products business and to contribute to building a sustainable and prosperous society in the dynamically changing global market. Activities to address various social issues, including the Sustainable Development Goals (SDGs), have also become critical management issues for companies. At the same time, these challenges provide valuable opportunities as well.
"Mitigation of climate chage" is one of the key social issues which SCGM group will adress. And we carried out the calculation of GHG emmisions of SCGM group in FY22 as the first activity to solve the issue. While We will strive to improve the accuracy and expand the target range of calculation in Scope1, Scope2 and Scope3, we will set a GHG emissions reduction target of SCGM group and promote the execution of concrete measures to its achievement. Furthermore, as a company bears steel distribution, we will cotribute to industry-wide carbon nertrality through more active effort to GHG emissions reduction and absorption in whole steel supply chain while utilizing above data. From now on we will face social evolution with passion, take solid steps toward a better future and aim to help build a sustainable society throuh the provision of high-added value to all stakeholders, including customers and business partners.