Kansai Electric Power

Kansai Electric Power has set a target to reduce its scope 1 emissions by 50% by 2025 and by 100% by 2050, compared to 2013. However, it lacks a scope 3 emissions target and it has not set sufficient intermediate targets. Furthermore, the company states that it plans to use offsets but does not quantify them. As a result, Kansai Electric Power ‘s targets could not be assessed in the benchmark. Kansai Electric Power should clearly report any offsets it intends to use to allow for a complete analysis of its targets and progress against them. The company should also set intermediate targets no more than five years apart to incentivise near-term action on its longer-term goals.

Nearly a third of Kansai Electric Power’s sold electricity comes from the company’s purchased power for retail. As a consequence, engaging with its suppliers is integral for the company to reduce emissions within its value chain. However, no evidence was found to suggest the company engages with suppliers on climate change issues or greenhouse gas (GHG) emissions reduction through strategies, initiatives or partnerships. The company can improve on this by developing a comprehensive supplier engagement strategy to influence its suppliers to cut down their emissions.

Kansai Electric Power relies on purchased power for nearly 30% of its sold electricity. The company reduced the share of renewable energy in its purchased power from an average of nearly 30% between 2017 and 2021 to only 16% in 2022. KEPCO can improve in this area by eliminating fossil fuels and rapidly ramping up the share of renewable energy in its purchased power.

Kansai Electric Power has set a target to reduce its scope 1 emissions by 50% by 2025 and by 100% by 2050, compared to 2013. It aims to have a 30% share of the nationwide hydrogen supply chain by 2050. However, this includes hydrogen from fossil gas as well as from nuclear sources.

Kansai Electric Power plans to expand its capacity of renewables to 9 gigawatts (GW) by 2040 from 4 GW in 2022. It will invest USD 7 billion into renewables over this period. Kansai Electric Power plans to introduce distributed grids and virtual power plants by 2030. It will co-fire with ammonia and hydrogen by 2030 and will exclusively use hydrogen and ammonia by 2050.

In 2022, low-carbon sources, such as nuclear and hydropower, accounted for 47% of Kansai Electric Power’s energy generation. Kansai Electric Power’s research and development (R&D) is targeted at carbon capture, use and storage (CCUS), light water and small modular reactors (SMRs), smart grids, virtual power plants, vehicle-to-grid, floating offshore wind projects, liquified carbon dioxide (CO2) shipping and advanced monitoring and forecasting technologies. Yet, its low-carbon R&D in 2022 accounted for only 30% of its total R&D. Its low-carbon capital expenditure (CapEx) in 2022 accounted for only 50% of its total CapEx.

Kansai Electric Power emissions intensity trend decreased between 2017 and 2022. This decrease is likely due to Kansai Electric Power nearly doubling its nuclear energy generation between 2017 and 2022. However, Kansai Electric Power relies on purchased power for nearly 30% of its sold electricity. Kansai Electric Power reduced the share of renewable energy in its purchased power from an average of nearly 30% between 2017 and 2021 to only 16% in 2022.

Kansai Electric Power has set a target to reduce its scope 1 emissions by 50% by 2025 and by 100% by 2050, compared to 2013. Yet, Kansai Electric Power’s emissions reduction targets and transition plan are hindered by the lack of a scope 3 emissions target and the lack of a coal phase-out date. The company’s near quadrupling of fossil fuel energy in its purchased power between 2021 and 2022 is inconsistent with its decarbonisation commitments. Unless Kansai Electric Power reconsiders this reliance on fossil sources, it is unlikely that it will be successful in a low-carbon economy.

No evidence was found of the company’s commitment to social dialogue or of the categories of stakeholders the company engages with 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 of the company undertaking just transition planning to mitigate the social impacts of the low-carbon 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 just transition planning.

No public commitment by the company 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 of the company’s action to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks. No public commitment by the company was found stating its intention to reskill and upskill workers displaced by the transition to a low-carbon economy. Additionally, no evidence was found that the company reskills and upskills workers in a way that ensures gender balance and inclusion of vulnerable groups.

No relevant disclosure was found to show if the company 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 the company commits to respecting human rights and the ILO fundamental rights at work, no evidence was found that it expects its business relationships to respect the ILO fundamental rights at work. No further evidence was found of company processes and practices with regard to human rights. The company can improve disclosure on its human rights due diligence process, grievance mechanism and affected stakeholders.

The company expects its business relationships to commit to respecting the health and safety of their workers. It also discloses the gender of its workforce by employee category. However, no other evidence of the company’s commitments or practices related to key decent work issues was found in the public domain. The company can improve disclosure on its own commitments for worker health and safety, women’s empowerment, and living wages, as well as on collective bargaining agreements and additional indicators of workforce diversity.

The company has a policy prohibiting bribery and corruption. However, no other company policies or commitments related to key ethical business topics – personal data protection, tax, and lobbying and political engagement – were found in the public domain. This includes ensuring ethical business conduct throughout its own operations and in its business relationships.