Sumitomo Realty & Development

Sumitomo has developed a low-carbon transition plan. It includes financial projections and is informed by climate scenario analysis that has considered the implications of a below 2°C scenario. However, it only extends to 2025 and only covers the company’s ambitions to reduce absolute emissions by 10%. To improve, the company should extend all aspects of its plans to net zero. Although Sumitomo has implemented board-level oversight of climate change, there is no evidence that its board has adequate climate expertise or receives incentives linked to emissions reduction indicators.

Sumitomo does not detail how it works with its clients to reduce emissions. The company can improve by creating a client-engagement strategy, governed by a clear policy and integrated into business decision-making. This is important as the company works across construction, property development and property management and will have both suppliers and clients for each. Furthermore, both the company’s client and supplier engagement will benefit from specific emissions reduction targets.

Sumitomo has demonstrated plans to increase its low-carbon building share. The company intends to adopt the ZEH-M building’s standard for all condos designed and developed from October 2021. Additionally, the company has established a Green Finance Framework that aims to raise a total of $9.4 bn by 2025 and can only be used to fund projects that will receive a rating of 3 stars (out of a possible 5) or higher in the DBJ Green Building Certification. The company can improve by quantifying the proportion of buildings that these commitments apply to and reporting the expected emissions reduction.

Sumitomo has set two targets, firstly to achieve a 50% reduction in absolute emissions by 2030, compared to 2014 and an interim target to reduce total emissions by 10% by 2025 compared to 2014. The company is not on track to meet either target as currently its absolute emissions are rising. The company should set long-term targets and additional intermediate targets at gaps of no more than five years between the reporting year and its furthest target end date. Setting regularly spaced intermediate targets incentivises near-term actions towards its longer-term goals.

Sumitomo aims to reduce its emissions by 10% by 2025 and 50% by 2030 compared to 2014. It has developed a transition plan, based on a below 2°C scenario, that runs to 2025. Long-term plans are not disclosed.

Sumitomo plans to introduce, what they term ‘green power’ to 30% of tenant office spaces. The company also commits to 100% of condo developments and 60% of custom home orders being ZEH-M designs. In addition, 20% of remodelling orders will use high thermal insulation products. The company plans to raise USD 9.4 billion in green finance to fund such projects.

The company is engaged in the research and development of enhanced insulation technologies. However, the company does not report the amount invested in this research. The company is working with its construction partners to increase the use of renewable energy but does not set emissions reduction targets for those partners.

Sumitomo does not disclose sufficient emissions data to analyse its recent emissions intensity trends.

Sumitomo has developed a short-term transition plan with targets, based on a below 2°C scenario and with a strong financial plan. However, based on available emissions data, the company is not making the progress needed to achieve its goals.

No evidence was found that Sumitomo commits to social dialogue or engages with the categories of stakeholders on a just transition. Furthermore, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders.

No evidence was found that the company undertakes low-carbon transition planning to mitigate the social impacts of the transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in its just transition planning.

No public commitment by Sumitomo  was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found that the company actions to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found that the company’s assesses employment dislocation risks.

No public commitment by Sumitomo was found stating its intention to re- and up-skill workers displaced by the transition to a low-carbon economy. Additionally, no evidence was found that the company re- and up-skills workers in a way that ensures gender balance and inclusion of vulnerable groups.

No relevant disclosure was found to show if Sumitomo identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders.

No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

While Sumitomo has a grievance mechanism available to workers, no evidence was found that the mechanism is available to external stakeholders. Moreover, no policies or commitments are available to display if the company relates to respecting other human rights was found in the public domain. This includes the necessary policies and systems by which the company can ensure respect for basic human rights in its operations and supply chain.

No evidence was found that Sumitomo commits to respecting the health and safety of its workers and expects the same commitment of its business relationships. The company does disclose the average annual salary of employees which has achieved paying all workers a living wage. However, no evidence was found that the company discloses the proportion of its direct workforce covered by collective bargaining agreements and the company’s required working hours. While the company discloses the gender of its workforce by employee category, no relevant disclosure was found of additional indicators of workforce diversity. While the company sets target related to gender equality, no evidence was found that the company commits to gender equality and women’s empowerment.

No policies or commitments that Sumitomo relates to key ethical business topics – personal data protection, tax, bribery and corruption, and lobbying and political engagement – was found in the public domain. This includes ensuring ethical business conduct throughout its operations and in its relationships with business partners.