• Policy
• The TCFD
• Governance
• Strategy
• Risk Management
• Indicators and Targets
• Risks and Opportunities
• Initiatives
• Data

Policy

In 2020, the Oji Group formulated its Environmental Vision 2050 centered around the goal of net-zero carbon emissions, while also positioning the Environmental Action Program 2030 as a milestone toward achieving its medium-term targets. To achieve our target of reducing greenhouse gas (GHG) emissions by 70% compared to the levels in FY2018, we are working to reduce actual emissions by reducing coal consumption and other emission sources and increasing the net increment in carbon stocks in forests.

Business Model Targeting Decarbonization

The Oji Group engages in a wide array of business activities, including the manufacture of pulp and paper. In light of the substantial amounts of heat (steam) and electricity consumed, these activities accordingly lead to the emission of GHGs commensurate with this energy use. By working to reduce GHG emissions from energy use and facilitating forests’ absorption of CO₂ we are contributing to climate change mitigation.
Pulp and paper mills generate steam and electricity from black liquor produced in the wood pulp manufacturing process and waste wood unsuitable for use in pulp raw materials. The CO₂ emitted during combustion is offset by the CO₂ absorbed by trees during growth. In addition, the waste heat (steam) after generating electricity is reused in the manufacturing process to more effectively use energy. Moreover, steps are taken to utilize the electricity generated by Chitose No. 1 Hydroelectric Power Plant in Hokkaido, a facility that began operating in 1910, as well as the solar power systems on factory roofs. Over and above the in-house consumption of renewable energy at mills, we also continue to pursue renewable energy generation business using biomass, hydroelectric and solar power, and are considering wind power generation projects on company-owned sites.
In addition to practicing Sustainable Forest Management through replanting following harvesting, as well as the planting of elite trees with high growth rates, every effort is made to maintain and facilitate forests’ ability to absorb CO₂.

The TCFD

• *1 The TCFD is a task force established by the Financial Stability Board (FSB) as requested during a G20 Finance Ministers and Central Bank Governors Meeting. In June 2017, the TCFD released its recommendations that encourage companies to disclose the financial implications of climate-related risks and opportunities to help investors make appropriate investment decisions.

Governance

Recognizing that efforts to achieve sustainability, including addressing climate change issues, are an important management challenge, the Oji Group established the Sustainability Committee and the Corporate Sustainability Division in April 2022. The Sustainability Committee deliberates matters that are material to our fulfilling our commitment to sustainability, and it is supervised by our Board of Directors.
The Sustainability Committee is chaired by the Representative Director of the Board and President of Oji Holdings Corporation (CEO), who is responsible for the overall sustainability of the Group, including climate change issues. Composed of Directors and Officers of Oji Holdings Corporation (including the presidents of all COMPANIES and women outside directors), the committee discusses the risks associated with sustainability that the Group is exposed to and measures to address those risks biannually. Matters discussed at the Committee are referred for discussion by and reported to the Group Management Meeting depending on the importance, and after deliberation by the Meeting, the Board of Directors makes decisions regarding the execution of matters. In FY2023, the Human Rights Policy and Environmental Action Program 2030 were revised.
The Corporate Sustainability Division, which is responsible for the integrated management of the Group's sustainability, identifies climate-related risks and opportunities throughout the Group. To properly manage these risks and opportunities, the division shares information about them throughout the Group, and reports monthly to the responsible division director and twice a year to the Group Management Meeting. When a risk or opportunity is significant in the judgement of the division director, it is reported to the Board of Directors. In addition, as the secretariat of the Sustainability Committee, the Corporate Sustainability Division implements matters as determined by the Committee.

Strategy

The climate-related risks and opportunities that we face have been analyzed as shown below. We recognize the importance of transition risks due to policies and regulations such as carbon taxes in the medium term as we move toward 2030, physical risks such as changes in precipitation and weather patterns in the long term as we move toward 2050, and the opportunities regarding the increased demand for low-carbon products in the medium to long term. To overcome the challenges involved in the transition to a decarbonized society, we have set GHG emissions reduction targets and are working to reduce coal consumption, increase the net increment of carbon stocks in forests, and develop wood-derived products that are alternatives to plastics. While continuing our present efforts to limit the negative impact of the transition to a decarbonized society on our business, we will continue to analyze risks and strengthen our climate resilience.^*2

• *2 The climate resilience concept involves organizations developing their ability to adapt to climate change to better manage the associated risks and seize opportunities, including the ability to respond to transition risks and physical risks. (Source: TCFD recommendations)

• Table of risks and opportunities

GHG Emissions Reduction Roadmap

To achieve our FY2030 targets, we are focused on reducing actual emissions and increasing the net increment in carbon stocks in forests.
Of the 16 boilers in Japan that were burning coal as of FY2018, we will terminate the operation of all eight boilers that are fired only by coal by FY2030, excluding backup boilers, and we will switch to gas fuels during the transition phase as we move toward decarbonization. The operation of two boilers was discontinued by FY2023. Plans are in place to discontinue the use of two Oji Materia Co., Ltd. boilers by FY2027, one at its Sobue Mill and one at its Saga Mill. We are also considering reducing coal consumption by changing the composition of the fuels used in coal co-fired boilers.
The plan at the Sobue and Saga Mills is to replace the boilers that only burn coal by installing gas cogeneration systems whose GHG emissions per unit of output energy will be lower than the technical screening criterion of 270 g-CO₂/kWh set by the EU Taxonomy.^*3

• *3 The EU Taxonomy is a classification system established by the European Union to identify environmentally sustainable economic activities. Gas cogeneration systems that meet the criteria are defined as a transitional activity moving towards a climate-neutral economy that contributes to the mitigation of climate change.

Further reducing the use of fossil fuels, including gas, is essential for achieving net-zero carbon emissions after FY2030. To this end, we are considering the use of alternative fuels, including hydrogen, ammonia and e-methane (synthetic methane).
Moreover, to increase the net increment in carbon stocks, we are advancing efforts to acquire overseas forest plantations. Making the most of the tree breeding and forest plantation technologies nurtured over the many years that we have been operating, we are engaging in the cultivation of elite fast-growing trees best suited to each region. Moving forward, we are facilitating the absorption of CO₂ while expanding forests with a high net increment in carbon stocks.

Risk Management

The Corporate Sustainability Division examines risks on a Group-wide basis with assistance from external experts, and the Sustainability Committee analyzes them while discussing their importance and prioritizing them. The impact of these risks on our businesses, strategies and finances are assessed quantitatively and qualitatively, using 1.5 °C (2 °C) and 4 °C scenarios for the medium term (2030) and the long term (2050).^*4 The Corporate Sustainability Division is in charge of the overall management of the responses to climate-related risks built upon the Group-wide strategy, and the Sustainability Committee manages the progress of these initiatives. Specifically, to reduce GHG emissions, we have organized a project team and are working to reduce coal consumption and expand the net increment in carbon stocks in forests. Furthermore, climate-related risks are reported to the Group Management Meeting and referred to the meeting for discussion depending on their importance, and they are integrated into company-wide risk management activities.

• *4 Transition risks were analyzed using two scenarios: The IEA’s 2 °C Scenario (IEA 2DS) that shows a pathway to possibly limiting global warming to 2 °C, and the Net Zero Emissions by 2050 Scenario (NZE 2050) that looks at the achievement of net zero CO₂ emissions by 2050. Physical risks were analyzed using the RCP 1.9, RCP 2.6, and RCP 8.5 scenarios. In RCP 8.5, the average global temperature is projected to rise by more than 4 °C and natural disasters are expected to become more frequent.

Indicators and Targets

We have set the following targets in accordance with the 1.5 °C target of the Paris Agreement. The carbon price of 140 USD/t-CO₂ (2030 level in developed countries) in the International Energy Agency (IEA)’s Net Zero Emissions (NZE) scenario is used as the internal carbon price (ICP) for risk analyses and the evaluation of investment decisions.

Our target is to reduce net emissions (actual emissions minus the net increment of carbon stocks) by at least 70% compared to the FY2018 level by FY2030. We will achieve 20% of this by reducing actual emissions (total Scope 1 and 2 emissions), and the remaining 50% by increasing the net increment in carbon stocks of forests.
In FY2023, we reduced net GHG emissions to 5,635 kt-CO₂, a 28.1% reduction compared to FY2018.

Risks and Opportunities

• * This table can be viewed by scrolling horizontally.

• * Note: Impact amount Small: less than 10 billion yen; Medium: not less than 10 billion yen but less than 50 billion yen; Large: not less than 50 billion yen
  Impact levels without an asterisk (*) represent qualitative assessment.

Initiatives

Reducing Actual Emissions

We are working to improve energy efficiency and increase the percentage of renewable energy used to reduce the GHG emissions of our business activities. In FY2023, we reduced actual GHG emissions (Scope 1+2) to 6,849 kt-CO₂e, which is a 12.6% reduction compared to FY2018.

Energy Management System

At our mills and plants, the energy management and production departments hold regular energy conservation meetings. They set energy-saving targets, plan equipment upgrades and operational improvements to achieve these targets, and check the progress and effectiveness of their activities.
KANZAN's Neumühl plant and Walki's Valkeakoski, Pietarsaari and Steinfurt plants have obtained third-party certification of their ISO 50001 energy management systems.

Improving Energy Efficiency

Increasing the Percentage of Renewable Energy Used

Reducing Coal Consumption

We shut down a coal boiler at Oji Materia Nayoro Mill in FY2021 and another one at Oji F-Tex Ebetsu Mill in FY2023. This decreased coal consumption by 25.6% in FY2023 compared to FY2018. Looking ahead, we will continue to reduce coal consumption, and we project that capital investments of approximately ¥100 billion will reduce GHG emissionsby roughly 1,000 kt-CO₂e.

Reducing Emissions from Wood Chip Carriers

Installing Solar Power Systems

Expansion of Net Increment in Carbon Stocks of Forests

• *6 This does not include the 35,000 ha of forest acquired in Uruguay in FY2024.
• *7 The figures for carbon stocks and net increment in carbon stocks exclude those of CENIBRA’s forests planted by third parties and forests where it has been less than two years since they were planted.
• *8Calculated assuming that the amount of O₂ released is the same as the CO₂ absorbed (in moles) 
  Forest carbon stocks: The CO₂ stocks of Oji Forests
  Net increment in carbon stocks of forests: The amount of CO₂ absorbed by the trees in Oji Forests minus the amount of CO₂ stored in the trees felled, which is considered as emissions.

Expand Forest Plantations

• *9 This does not include the 20,000 ha of production forest acquired in Uruguay in FY2024.

Plant fast-growing trees

CENIBRA in Brazil and KTH in Indonesia have long been breeding forest trees. In selecting and planting high-quality varieties, distinguished by their high growth rate and pulp productivity obtained through artificial pollination, efforts are being made to increase the amount of forest growth while facilitating carbon absorption and storage.

Data

• ESG Data