For basic views, structure, and targets, please refer to Environmental Management.
For performance data for environmental indicators , please refer to the CSR Book (ESG Data).

To achieve carbon neutrality by 2050, the Group established the Net Zero Factory Promotion Group within the Environment Department in 2023 to systematically promote the creation of a Net Zero Factory^＊ model and its widespread adoption. The Group plans to transform all of its approximately 270 plants into net-zero factories by 2050, by promoting thorough energy conservation in production processes and expanding the introduction of renewable energy such as solar power.

＊ Net Zero Factory: A plant whose annual net GHG emissions are below zero and which is promoting energy conservation and energy creation at a level that serves as a standard for other plants, toward the goal of achieving carbon neutrality by 2050

The Group is striving to achieve its GHG emissions reduction targets by, in addition to promoting self-help efforts such as thorough energy saving, energy productivity improvement, and expansion of introduction of renewable energy including solar power, working to minimize risks while closely monitoring society’s GHG-related trends, such as changes in GHG emission factors of power companies and the supply-demand balance of green electricity.^＊

＊ Green electricity: Electricity generated using energy sources that do not emit greenhouse gases, such as solar, wind, hydro, and geothermal power

Energy saving and energy productivity improvement are extremely important themes for companies, in terms of global warming prevention as well as cost competitiveness improvement. For this reason, the Group has set reduction targets not only for absolute amount of GHG emissions but also for reduction of energy consumption per basic unit, and is vigorously promoting energy saving as the foundation for GHG emissions reduction activities and production activities. Our energy saving activities focus on reducing fixed energy consumption that occurs regardless of production levels, and examining and introducing new energy-saving technologies.

Specifically, the Environment Department and business divisions hold quarterly dialogues on energy productivity improvement, where in addition to checking the progress in the reduction of energy consumption per basic unit, they discuss issues and share useful information on examples of new energy-saving technologies introduced, etc., thereby promoting resolution of issues. The information shared in the dialogues is disseminated across the Group via the Global Environment Promotion Conference, Decarbonization Portal Site, and other channels. In addition, to further promote productivity improvement, the Group is promoting investments in GHG emissions reduction projects by setting budget allocations for investments in CO2-reduction equipment and new technologies, while also implementing the “Energy Saving 200 Kaizen” activities to promote operational improvements.

One of the activities undertaken under “Energy Saving 200 Kaizen” is the reduction of standby power consumption by visualizing per-equipment energy consumption using IoT devices.

Furthermore, the Environment Department is working on the collection of information on, and evaluation of, new technologies that can ead to energy reductions to support the introduction of new technologies that meet each business division’s needs, with the aim of achieving significant reduction of energy consumption.

Regarding the introduction of renewable energy, the Group is systematically promoting energy creation through various means, including on-site (within company premises) and off-site (outside company premises) PPA,^＊ based on the “Medium- to Long-Term Renewable Energy Procurement Guidelines” formulated by the Environment Department and the Procurement Division in FY2023.

＊ PPA: Power Purchase Agreement. A system in which electricity generated by power generation facilities installed and maintained by a power producer at its own expense is supplied to the user for a fee. In the case of on-site PPA, electricity is supplied from power generation facilities installed within

In February 2025, the Company signed its first off-site PPA contract. Starting in May 2025, Sumitomo Electric Osaka Works is supplied with renewable energy equivalent to approximately 13% of its annual electricity consumption from a solar power plant newly constructed by the Kansai Electric Power Company, Incorporated.

The Group has more than 10,000 suppliers of raw materials and parts. To reduce Category 1 emissions, which account for approximately half of Scope 3 emissions, the Group has identified the top 100 emitters, focusing on manufacturers of materials such as copper, steel, aluminum, and synthetic resin, which account for a large proportion of CO₂ emissions, as priority targets for its supplier engagement activities. Specific activities include explaining the Group’s policy to these suppliers and asking them to report their CO₂ emissions and cooperate in emissions reduction. Regarding CO₂ emissions in Category 4 transportation, while responding flexibly to fluctuations in customer demand, the Group will continue to make steady efforts in expanding the use of rail containers and coastal shipping, improving truck loading rates, and reducing the number of trips. Furthermore, through the Green Logistics Subcommittee, which meets twice a year, the Group holds education sessions for Group companies to share information on the Group’s CO₂ reduction performance in transportation and promote CO₂ reduction activities across the Group.

The importance of product LCA is increasing due to a need for the improvement of competitiveness through reduction of product environmental impact and increasing requests from customers for disclosure of the carbon footprint of products (CFP). To respond to such a situation, the LCA Subcommittee was established directly under the Global Environment Promotion Conference in FY2023, and approximately 60 members are assigned to business units and departments to promote LCA. In FY2024, four Subcommittee meetings were held to share the latest information on LCA, including standardization in each industry, trends in the upstream and downstream supply chains, and examples of in-house LCA calculations. Through these activities, the Subcommittee contributes to promoting LCA and raising the level of LCA practice of the entire Group including improved calculation efficiency.
From FY2024, the Group is working to apply LCA in the development of products that achieve both reduced environmental impact and resource conservation, with examples including using LCA methods to evaluate the CFP reduction effects of using recycled copper in products that use copper.

In FY2024, Scope 3 emissions increased by 15.7% (1.1% increase when listed subsidiaries included), against the set emission reduction target of 7.5% compared to FY2018, meaning the target was not achieved. This is mainly due to increased product production.

Of the top 100 emitters, 76 suppliers submitted an annual report on emissions data of products delivered to the Group. In addition to the top 10 suppliers with the highest emissions in the previous fiscal year, an agreement was obtained from the suppliers ranked 11th to 20th to develop and implement emissions reduction plans starting FY2024. Under the belief that supplier engagement is essential to reduce GHG emissions throughout the supply chain, the Group will continue working on supplier engagement on a top-priority basis.