Environmental Policy / Medium-to Long-Term Environmental Targets / Achievements
Environmental Policy
Basic Philosophy
Recognizing that efforts to address environmental problems are an important responsibility to be fulfilled for society, Sumitomo Mitsui Finance and Leasing Co., Ltd. hereby establishes the following Environmental Policy.
Environmental Policy
- Through our business, we will actively work to harmonize global environmental preservation and pollution prevention with our corporate activities, and contribute to society and the economy.
- We actively engage in the leasing and rental of equipment that reduces environmental impact, as well as the reuse and proper disposal of equipment whose lease terms have expired. We support our customers' efforts to address environmental issues by providing information and solutions.
- We will strive to reduce our environmental impact by conserving resources and energy, and by reducing, reusing and recycling waste.
- We will comply with environmental laws and regulations.
- To achieve this policy, we will set environmental objectives and targets, reviewing them periodically to ensure the continuous improvement of our environmental management system.
- We will strive to ensure that all employees are fully aware of this policy, and will disclose it in writing broadly outside the Company.
June 27, 2017
Masaki Tachibana
President
Sumitomo Mitsui Finance and Leasing Co., Ltd.
Medium- to Long-Term Environmental Targets
The SMFL Group formulated its environmental policy in June 2017, explicitly stating its aims in contributing to the resolution of global environmental issues. In April 2020, as one element of Our Vision within the SMFL Way, the SMFL Group declared its intention to become a company "Chosen for its commitment to SDGs," and since then has been working on various initiatives.
In October 2020, the Japanese government declared its intention for Japan to achieve carbon neutrality by 2050 and has been promoting the decarbonization of society by encouraging companies to take actions. Furthermore, the SMBC Group has announced its goal to be carbon neutral in terms of greenhouse gas emissions for its entire investment and financing portfolio by 2050, and the Sumitomo Corporation Group has declared a goal of carbon neutrality for business activities group-wide by 2050.
The SMFL Group, in the meantime, established medium-to long-term environmental targets in April 2022, with the intention of contributing to the sustainable growth by achieving those targets. The medium- to long-term environmental targets comprise three objectives. Target 1 and Target 2 are r lated to the decarbonization of SMFL and the SMFL Group, and Target 3 aims to contribute to resolving social issues, including the decarbonization of our customers.
Medium- to long-term targets for reducing our greenhouse gas emissions and achievement
Target 1 Net-zero greenhouse gas emissions by SMFL (Achieved)
We achieved Target 1 one year ahead of schedule in FY2022 and maintained net-zero emissions in FY2023. Given that the majority of SMFL's Scope 1 emissions are due to gasoline use in company vehicles, SMFL has taken measures to reduce gasoline consumption. These include a 24% reduction in the number of company vehicles as of the end of FY2023 compared to FY2021, the installation of chargers in preparation for the introduction of electric vehicles (EVs), and the replacement of existing vehicles with environmentally friendly alternatives. Additionally, we have offset the remaining GHG emissions through the use of carbon credits. For Scope 2 emissions, we achieved net-zero by switching to renewable energy sources and utilizing non-fossil certificates. Furthermore, we used all of the non-fossil certificates generated by solar power facilities owned by the SMFL Group, while ensuring the continuity and transparency of our renewable energy procurement within the SMFL Group, from generation to consumption, over the long term.
Greenhouse gas emissions(Scope 1 and Scope 2)
- ※Figures are before the use of non-fossil certificates and carbon credits. (SMFL non-consolidated achieved net zero in FY2023/3 and FY2024/3.)
- ※Figures for FY2020/3 to FY2023/3 are for SMFL non- consolidated (domestic locations only)
- ※Scope 2 emissions are calculated based on market standards. However, in the event factors are unknown for certain overseas bases, the location standard (IEA country-specific factor) is used.
| Vehicles | Vehicles reduced | |
|---|---|---|
| FY2021 | 374 | -29 |
| FY2022 | 336 | -38 |
| FY2023 | 286 | -50 |
Target 2: Net-zero greenhouse gas emissions by the SMFL Group
As far as Target 2 is concerned, in FY2023, we calculated the GHG emissions of the entire SMFL Group for the first time. To further streamline and enhance the accuracy of GHG data collection across SMFL non-consolidated and domestic/overseas Group companies, SMFL implemented SMBC's Sustana® cloud service for calculating GHG emissions in April 2024. Looking ahead, we plan to obtain third-party verification and will utilize the measures already put into place on a non-consolidated basis to achieve our FY2025 targets through stronger collaboration with our domestic and overseas Group companies.
| GHG emissions (Consolidated) t-CO2 | Emissions factor | |
|---|---|---|
| Scope1 | 2,672 | We use the Calculation Methods and Emission Factors List for Calculation, Reporting and Disclosure Systems, as stipulated under the Act on Promotion of Global Warming Countermeasures. |
| Scope2 | 2,501 | For Japan, we use the List of Emission Factors for Electric Power Generation based on the Act on Promotion of Global Warming Countermeasures, and for overseas operations, we use the IEA emission factors and other relevant data. |
Target 3: Expand sustainability businesses
The SMFL Group is focusing on sustainability businesses to help address social challenges, including climate issues, and to support customers in their decarbonization efforts. We initially set a cumulative contract value target of ¥1 trillion for FY2020 to FY2029, but we have moved this target date up to FY2025 while raising the cumulative target to ¥2 trillion for FY2029.
Driven by our customers' growing interest in sustainability, the cumulative contract value for sustainability businesses reached ¥492.6 billion over the four years to FY2023. We will continue to accelerate our efforts in each business to achieve these targets.
Cumulative contract value
- Main transactions (FY2020–)
-
- Investment in and financing of renewable energy power generation businesses such as solar, wind, hydro and biomass
- SDGs Lease MIRAI 2030® (donation type)/(evaluation type) scheme, SDGs leases in collaboration with companies and government agencies
- Sustainability-linked leases and loans (for both ships and others)
- Environmentally certified real estate development and financing
- Additional main transactions (FY2023–)
-
- Real estate version of SDG leases
Reducing Scope 3 emissions
In addition to the measurement and disclosure of Scope 1 and Scope 2 emissions, society is demanding the disclosure of Scope 3 emissions, which cover indirect emissions from sources other than a company itself. SMSL has been calculating data for certain categories within Scope 3 (refer to the following table) since FY2023. Moving forward, we will work on expanding both the categories and the scope of disclosure.
| t-CO2 | Scope | |
|---|---|---|
| Category3 | 1,118 ※1 | Consolidated |
| Category5 | 3 | SMFL non-consolidated + certain domestic subsidiaries (Tokyo Head Office, Osaka Head Office, Takebashi Office) |
| Category6 | 5,589 | SMFL non-consolidated + certain domestic subsidiaries |
| Category7 | 719 | SMFL non-consolidated + certain domestic subsidiaries |
| Category12 | 29 ※2 | SMFL non-consolidated |
| Category13 | 16,241,114 ※3 | SMBC Aviation Capital |
- ※1 Calculated using Scope 1 and Scope 2 activity data
- ※2Calculated using waste volumes noted on manifests (industrial waste management ledgers)
- ※3 Calculated based on flight data of owned aircraft
Estimates of Contribution to Reducing CO2 Emissions
In our efforts to further expand both social and economic value, we measure our contribution to reducing CO2 emissions as an impact indicator that reflects the influence of our business activities on society and the environment. In FY2023, our renewable energy generation business contributed to a reduction of 380,000 t-CO2, 90 a figure that continues to grow. When including contributions from 60 general leasing transactions, our total reduction contribution is equivalent to 1.14 million t-CO2. Moving forward, we will continue to 30 expand operations across the entire supply chain, including electric power generation, storage, retailing, and energy conservation, to 0 contribute to the realization of a decarbonized society.
Contribution to CO2 reductions, including general leasing
| Renewable energy business | General leasing | |
|---|---|---|
| Scope of calculation | In-house power generation (including PPA), financing and project finance | projects handled by the Environmental and Energy Business Unit General leasing projects for renewable energy equipment handled by the Corporate Business Unit |
| Applicable power generation methods | Solar power, wind power, hydro power, biomass, geothermal | Same as on the left |
| Calculation method | CO2 reduction contribution is calculated by multiplying our share of power generation in each fiscal year by the International Energy Agency (IEA) emission factor. | The estimated reduction amount is calculated using a specific algorithm to determine the power generation volume and then multiplying it by the capacity utilization rate and the IEA emission factor. |
Targets related to Japan's Act on the Promotion of Plastic Resources Circulation
In response to the Act on Promotion of Resource Circulation for Plastics, which came into effect in April 2022, SMFL set two key targets. The first target, announced in June 2023, focuses on reducing the disposal of plastic office supplies used in business activities, and the second target, announced in March 2024, addresses the reprocessing of properties at the end of their leases.
Target 1 Reduction of plastic office supplies used in business activities (Achieved)
- Recycle 100% of used clear files by FY2025
- Ensure that 100% of newly purchased clear files are made from non- plastic materials by FY2025
Target 2 Reprocessing of lease-end assets
- Resource recycling ratio ※ Maintain the 92.8% result achieved in FY2022
- ※The resource recycling ratio is the sum of the re-leasing rate for lease agreements, the ratio of end-of-lease properties sales, and the recycling ratio of end-of-lease properties. This indicator is aimed at promoting resource circulation by maximizing the reuse and recycling of leased properties.
In-house initiatives
Since December 2023, SMFL's clear files are converted into paper-based materials which can be collected for recycling. Through the repetitive in-house use of plastic clear files we have achieved target (1).
In addition, we have replaced approximately 20,000 plastic PET bottles used in service of our customers at locations in Japan annually with PET bottles made of aluminum and steel from FY2024.