Idemitsu Kosan

Idemitsu Kosan has set targets to reduce its scope 1 and 2 emissions by 46% by 2030 and achieve zero scope 1 and 2 emissions by 2050. However, these targets could not be assessed for alignment with a 1.5°C pathway, due to a lack of emissions, activity data and indicate whether it plans to use offsets. The company should ensure that its targets align with its 1.5°C pathway and include its scope 3 emissions. Additionally, the company should set intermediate targets no more than five years apart to incentivise near-term actions on its long-term goals. The company should also clearly report its base year emissions and any offsetting it intends to use to allow for a complete analysis of its targets and progress against them.

Idemitsu Kosan conducts R&D in biofuels, biochemicals and biomaterials and solid electrolytes for lithium-ion batteries. The company also aims to support the development and launch of the ammonia supply chain. The company is also carrying out R&D in non-mature mitigation technologies, such as recycling of solar panels, as well as mature and non-mature R&D linked to carbon capture and removal, power-to-chemicals and sustainable aviation fuels (SAFs). However, the company does not report its associated R&D expenditure on these technologies. To meet the sectoral-level expectation for a 1.5°C scenario, at least 77% of the company’s total R&D investments should be dedicated to low-carbon technologies.

Idemitsu Kosan’s scope 1, 2 and 3 emissions intensity remained relatively static between 2019 and 2021. This does not align with the company’s 1.5°C pathway, which requires it to reduce its scope 1, 2 and 3 emissions intensity by about 4% per year between 2021 and 2027. The company does not disclose its expected revenues over the next five years, and more importantly, its share of revenues originating from low-carbon products. Reporting this information will allow the company to demonstrate its financial commitment to transitioning to a low-carbon future and its commitment to its target to reduce its fossil fuel assets by 20% by 2030.

Idemitsu Kosan has formulated Sustainable Procurement Guidelines to support its Basic Procurement Policy. The guidelines cover the environment and discuss promoting green procurement of raw materials and climate change action. However, it is unclear what proportion of suppliers these guidelines apply to. Moreover, despite the guidelines, no evidence was found to suggest the company engages with suppliers on climate change issues or emissions reduction through strategies, initiatives or partnerships. Creating quantified emissions targets for its suppliers will help the company provide clear direction to its whole supply chain.

Idemitsu Kosan has set targets to reduce its scope 1 and 2 emissions by 46% by 2030 compared to 2013. It also has a target to achieve zero scope 1 and 2 emissions by 2050. To support these objectives, the company has low-carbon business models that aim to achieve a renewable energy generation capacity of 4 gigawatts (GW) by 2030, and to produce 500 million litres (ML) of SAFs per year and 2 million tonnes of green energy pellets per year by 2030.

Idemitsu Kosan’s transition plan sets emissions reduction targets and outlines its objectives to achieve zero scope 1 and 2 emissions by 2050. The company aims to do this through ammonia and hydrogen production and discusses the use of blue ammonia and hydrogen, although these plans are in the early stages. Additionally, the company plans to produce synthetic fuels and implement CCUS.

The company plans to support its Energy One Step Ahead strategy with a funding of USD 1.73 billion during FY2023-25. The company also aims to reduce its invested fossil fuel assets by 20% by 2030. Moreover, it uses an internal carbon price of USD 100 per tonne of carbon dioxide to inform investments. In FY2022-23, Idemitsu Kosan started commercial operations of its North American solar and Tokuyama biomass power plants, to increase its renewable energy generation capacity to about 1.9 GW.

Idemitsu Kosan’s scope 1 and 2 emissions intensity remained relatively static between 2019 and 2021. The company has so far achieved 23% of its target to reduce its scope 1 and 2 emissions by 46% by 2030 compared to 2013. Additionally, between 2019 and 2021, the company’s scope 1, 2 and 3 emissions intensity remained relatively static. To align with its 1.5°C pathway, the company needs to decrease its scope 1, 2 and 3 emissions intensity by about 4% annually.

Idemitsu Kosan has set scope 1 and 2 emissions reduction targets, has low-carbon business models and aims for its fossil fuel activities to contribute 50% of its revenue in 2030. Despite this, the company does not report lacks financial information specifically related to its low-carbon transition. Furthermore, the company has yet to set targets which cover its scope 3 emissions, nor has it committed to phasing out the use of fossil fuels.

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 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 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.

The company commits to respecting human rights and the ILO fundamental rights at work, and it expects its business relationships to respect the ILO fundamental rights at work. The company also discloses a human rights due diligence process that includes the identification and assessment of salient human rights risks, such as forced labour, child labour, discrimination, or risks to the rights of freedom of association and collective bargaining. No evidence was found that the company takes action to mitigate these risks in its own operations and in its supply chain and that it engages with affected stakeholders. Moreover, no evidence was found of the company having a grievance mechanism available to workers and external stakeholders.

The company commits to respecting the health and safety of its workers and expects the same commitment of its business relationships. However, no evidence was found of the company having a time-bound target for paying all workers a living wage. No evidence was found that the company discloses the proportion of its direct workforce covered by collective bargaining agreements or its required working hours. The company discloses the gender of its workforce by employee category. However, no relevant disclosure was found of additional indicators of workforce diversity. Furthermore, no evidence was found that the company commits to gender equality and women’s empowerment.

The company commits to protecting personal data. However, no evidence was found of the company having a privacy statement regarding the collection, sharing and access to personal data. While the company discloses its global tax strategy, no relevant disclosure was found of the corporate income tax it pays in each relevant jurisdiction. No evidence was found that the company has a policy prohibiting bribery and corruption and that it includes corresponding clauses in its business relationship contracts. Further, no evidence was found that the company has a lobbying and political engagement policy and that it specifies it does not make political contributions. No relevant disclosure was found of the company’s expenditure on lobbying activities.