Climate Change : Policy

Introduction and Mission

The effects of climate change are becoming increasingly severe, with progressively profound impacts on the natural environment, our societies, our business activities, and our everyday lives.
Against this backdrop, there is a growing swell of action across the globe with a collective mission to lower the temperature rise by decarbonising our planet. In 2015, at COP21, 196 parties adopted the landmark Paris Agreement, the goal of which is to limit global warming to well below 2 degrees Celsius, and preferably 1.5 degrees Celsius, by the end of the century. To achieve this ambitious temperature goal, a significant transformation of the current energy supply-demand structure is needed, and governments, institutions and corporations now need to invest heavily in climate change adaptation activities if we are to carve a path to a carbon neutral world by mid-century.
The Paris Agreement has heightened expectations not only for countries and governments to fulfill key roles in mitigating climate change, but also for the private sector. Companies are expected to implement measures to achieve a decarbonised society through their business activities, and there are growing calls for companies to disclose climate change-related information in line with initiatives such as the Task Force on Climate-related Financial Disclosures (TCFD)*1, and the disclosure framework being developed by the International Sustainability Standards Board (ISSB)*2 of the IFRS. As a result, opportunities for dialogue on climate change between companies and investors are expanding - including through the institutional investor initiative, Climate Action 100+, and the TCFD Consortium (launched in Japan in 2019). The purpose of these initiatives is to encourage the disclosure of information to allow investors and other stakeholders to properly monitor and evaluate the climate-related risks and opportunities of companies.
Since its inception in the 1950s, Mitsubishi Corporation (MC) has held the ”Three Corporate Principles” as its core philosophy. These guiding principles inspire us to conduct fair and sound business activities at all times. MC adopted the Environmental Charter and Social Charter in accordance with the Three Corporate Principles, and we commit to increase our corporate value as well as to contribute to the sustainable development of society through the simultaneous generation of economic, social, and environmental value, as a globally integrated business enterprise.
At MC, we believe that while climate change poses significant business risks, it also presents us with new business opportunities for innovation, disruption and growth. Accordingly, MC has set “Contributing to Decarbonized Societies” asone of its material issues as we strive to achieve sustainable growth.
In shifting to a decarbonized society, it is necessary to formulate specific policies that take into account the actual conditions (energy and power mix, geographical conditions and constraints, stage of economic development, population, etc.) that differ from country to country and region to region, and to steadily implement them one by one. Through our global network of offices, subsidiaries and around 1,700 group companies, we work with a wide range of stakeholders around the world each day in developing our business.

  • *1
    The Task Force on Climate-related Financial Disclosures (TCFD) set up by the Financial Stability Board. In June 2017, the TCFD announced its recommendations on climate-related financial disclosures in order for investors to be able to make appropriate investment decisions. MC has decrared support for the TCFD and its recommendations in 2018. And the General Manager of MC’s Sustainability Department served as a TCFD member from 2018 to 2021 and as a planning committee member of the TCFD consortium thereafter. MC is supporting the TCFD’s activities and helping its recommendations to take root throughout the business community.
  • *2
    The International Sustainability Standards Board (ISSB) set up by the IFRS Foundation Trustees. ISSB is an independent, private-sector body that develops and approves IFRS Sustainability Disclosure Standards.

Progress to a Carbon Neutral Society

In October 2021, MC formulated itsRoadmap to a Carbon Neutral SocietyOpen the PDF filein which we declared our goal of acheiving net zero GHG emissions by 2050. As an active player in a variety of industries including resources and energy, we will fulfill our responsibility to provide a stable supply of energy while striving to achieve a carbon neutral society.

Roadmap: Three Core Points

  • GHG Reduction Targets: Halve by FY2030, Net Zero by 2050
  • Approx. 2 trillion yen of Energy Transformation (EX)-related investment by FY2030
  • Integrated EX/DX initiatives to “Create a New Future”

Policy on Coal-fired Power Generation Businesses (IPP and EPC)

In line with "The Roadmap to a Carbon Neutral societyOpen the PDF file", and in response to the 1.5ºC scenario analyses, MC is taking steps to divest from fossil fuels - such as moving to alternative fuel sources and raising the percentage of biomass co-combustion at existing coal-fired power plants. Our goal is to reduce our coal-fired power generation capacity on a net equity basis, in line with the 1.5ºC scenario analyses.

<Independent Power Producer (IPP) Business for Coal-fired Power Generation>

  • As of March 31. 2024, MC’s coal-fired power generation capacity (for businesses in which MC serves the role of Independent Power Producer, or “IPP”), including projects under development and construction, is approximately 0.96GW on an equity share basis (roughly 12% of MC’s total capacity as of the same date).
  • MC has adopted a policy to reduce its equity share to approximately one-third by 2030 (compared to 2020 levels) by not entering into any new coal-fired power generation businesses, with the Vung Ang II project in Vietnam being the last, and to exit all existing coal-fired power generation projects by 2050. Furthermore, we will work to reduce CO₂ emissions in our thermal power generation business by taking steps such as converting to alternative fuel sources. We will subsequently aim to achieve a 100% non-fossil power generation portfolio by 2050 by 1) decarbonizing our thermal power generation business by switching to zero-emission thermal power and 2) further expanding our renewable energy business.

<Engineering, Procurement and Construction (EPC) Business for Coal-fired Power Plants>

  • MC will not enter into any new EPC (Engineering, Procurement and Construction) businesses for coal-fired power plants, with the Quang Trach 1 project in Vietnam being the last. However, MC will continue to provide after-sales services for installed plants in cases such as when MC has a contractual obligation with the relevant power generation company, or when it is requested to do so by the power generation company or equipment manufacturer.
  • Furthermore, MC will continue additional construction work and equipment replacement to reduce the environmental impact of existing coal-fired power plants, while assessing the effectiveness of such measures, as an initiative linked to the transition to a low-carbon/ decarbonized society.