Sustainability Strategy

As part of our efforts, we are working to collect GHG emissions data (Scope 1, 2) and enhance its accuracy across the entire SMFL Group to achieve our medium to long-term environmental targets. Additionally, we are expanding the calculation categories for Scope 3 disclosures and promoting disclosures on a consolidated basis. In FY2024, we published our first TCFD Report, in which we disclosed our strategies in each of the environment, real estate, and aircraft fields, areas that are expected to be particularly affected by climate change. Since recognizing the business risks and opportunities associated with climate change and reflecting them in the business unit strategies will lead to sustainable business development, we will continue to deepen and expand our awareness going forward.

Our contributions to customers and society through businesses are also steadily expanding. In FY2025, we merged the Environmental and Energy Business Unit and the Circular Economy Division, which was an internal organization of the Product Promotion Unit, to newly create the Global Environment Business Unit. By combining our environmental and energy and circular economy businesses into one business unit, we have given ourselves added impetus and realize even greater value provision as the SMFL Group. Sustainability businesses reached ¥775.9 billion in FY2024, and we will continue to steadily build up our cumulative contract value toward our final FY2025 target of ¥1 trillion.

For our sustainable growth, it is essential to establish new core businesses. We believe it will be of particular importance to build our future portfolio with an eye toward environmental value. Looking ahead to the next medium-term management plan and beyond, we will contribute to society by building an asset portfolio that places a greater emphasis on environmental value.

Issues in the area of sustainability are becoming increasingly crucial, and the expectations society places on companies are also becoming ever greater. Overlapping the creation of social value and expansion of economic value, the SMFL Group will take on the challenges of resolving social issues in partnership with its diverse stakeholders.

Sustainability Governance

Consistent with the goal to be "chosen for its commitment to SDGs," which is part of the Vision outlined in the "SMFL Way," SMFL established the SDGs Promotion Committee to actively promote SDGs management initiatives. Decisions regarding sustainability are reviewed by the SDGs Promotion Committee, resolved at and reported to the Management Committee, and in principle supervised by the Board of Directors at least once a year.
The SDGs Promotion Committee sets the President as its chairman, general managers of related corporate staff departments and the business planning department of each business unit as its members, and the Sustainability Promotion Department as its secretariate. This committee formulates policies regarding SDGs management initiatives, deliberating on and promoting various measures across the organization, and monitoring the status of SDGs management. Topics for discussion in FY2024 included medium- to long-term environmental targets, the circular economy, human rights due diligence, non-financial information disclosure, solving social issues outside of business, and sustainability education.

Diagram of SMFL's SDGs Promotion Structure. Under the Management Meeting, there is an SDGs Promotion Committee. The Committee Chairman is the President, the Vice Chairman is the Executive Officer in charge of the Planning Department, and the Secretariat is managed by the Sustainability Promotion Department. The SDGs Officer and all officers and employees are positioned below, with members from all departments participating.