Climate Change: Targets

Key GHG Metrics and Disclosure Highlights

MC has set GHG emissions reduction targets taking into account the Paris Agreement, which aims to limit global warming to well below 2°C and preferably 1.5°C above pre-industrial levels by the end of the century. We are advancing a variety of measures to achieve these targets.We have set GHG emissions reduction targets on a consolidated basis and work closely with our operating companies to collect emissions data and implement reduction initiatives on a consolidated basis. Furthermore, we utilize our environmental management system (EMS) to gather essential information for policy planning. In FY2020, we expanded the scope of our survey through a major update to the environmental performance survey system, and we continue to improve the accuracy and timeliness of both qualitative and quantitative data on our GHG reduction initiatives.

Targets

MC is committed to creating MC Shared Value（MCSV） by pursuing both portfolio decarbonization and optimization. To achieve this, we have set the following two goals toward the realization of a decarbonized society.

1) GHG Emissions Reduction Targets

  • We will continue to reduce greenhouse gas (GHG) emissions across our businesses as part of our responsibility as a diversified global company.
  • Our FY2030 GHG emissions reduction target has been reset to 30%-50% below the FY2020 baseline, driven by portfolio optimization and increased procurement of renewable energy.
  • By pursuing a strategy that integrates our own emissions reductions with broader societal contributions, we will make steady progress toward net-zero emissions by 2050.

We have been using the equity share approach to calculate GHG emissions. However, to clarify the scope of responsibility for our emissions, we will adopt the financial control approach starting in FY2025. Furthermore, we are in the process of refining our GHG emissions calculations based on the GHG Protocol in preparation for the future application of the SSBJ standards. Businesses currently included within the scope of our existing targets will remain subject to our emissions reduction targets. Please refer to the figure below for details.

Our Progress to Date

MC continuously tracks progress against its reduction targets. Actual performance figures for Scope 1 and 2 GHG emissions toward our reduction target are as follows:

GHG Emission Reduction Plan and Achievements to Date
GHG Emission Reduction Plan and Achievements to Date
*1 From FY2024, figures are calculated using the financial control approach. As a result of this methodological change, base-year figures have been restated, and certain emissions previously reported under Scope 1 and Scope 2 have been partially reclassified to Scope 3, Category 15 (Investments).
*2 Furthermore, in line with refinements to calculations under the GHG Protocol’s financial control approach to align with SSBJ disclosure standards, the following revisions have been implemented. Where accounting standards are revised or there are other significant changes to　calculation methodologies, figures will be recalculated as necessary.
(1) Emissions from jointly controlled entities, which were previously accounted for under Scope 3, Category 15, have been reclassified to Scope 1 and Scope 2.
(2) Emissions from leased assets that were previously included within Scope 1 and Scope 2 and Scope 3, Category 15, and within the scope of our targets, have been reclassified to Scope 3, Category 13 (Downstream Leased Assets). These emissions remain within the scope of our reduction target.
(3) Emissions associated with operating leases, which were previously excluded from the scope of calculation, have been newly included in Scope 1 and Scope 2.
*3 The revisions described above will not be applied retrospectively to prior fiscal-year results. They will take effect from FY2026 results onward, as preparation for SSBJ-compliant disclosure is currently ongoing and further adjustments may be required.
*4 The boundary for the FY2030 target remains consistent with the base-year boundary. Reduction plans and measures related to GHG emissions targets will be flexibly adjusted in consideration of technological progress, economic feasibility, and policy and regulatory developments.
*5 In cases where targets are not achieved notwithstanding ongoing emissions reduction efforts, we will consider the use of offsetting measures through internationally recognized mechanisms, including carbon removals (e.g., carbon credits).
Note: Emissions for each fiscal year from FY2025 onward may remain flat or increase year-on-year due to the commencement of operations for projects for which investment decisions had already been made as of the base year.

2) Non-Fossil% in Power Generation Business

We aim to achieve a 100% non-fossil fuel ratio in our power generation business by 2050 through portfolio rebalancing, fuel switching, and leveraging new technologies.

Scope 1 & 2

In order to clarify the scope of responsibility for our emissions, we adopted the GHG Protocol’s financial control approach for emissions calculation as of FY2025. Under this approach, GHG emissions from subsidiaries and joint operations will be disclosed as our Scope 1 and 2 emissions, while emissions from affiliate companies will be disclosed as Scope 3 Category 15 emissions. While emissions from joint ventures have historically been disclosed under Scope 3 Category 15, we plan to disclose them as Scope 1 and 2 starting from FY2026 disclosure, following a revision of calculation methodology.

Scope 3

In addition to achieving our own GHG emission reduction targets, we consider reductions across the entire value chain, namely Scope 3 emissions, to be equally important, and therefore monitor and disclose our Scope 3 emissions. Since Scope 3 emissions are generated by other entities within our value chain, reducing Scope 3 emissions requires collaboration with a wide range of partners across our supply chains.
As a company operating across numerous sectors with extensive industry connections, we believe that pursuing initiatives that contribute to societal decarbonization (i.e. generating avoided emissions) will help reduce our Scope 3 emissions across multiple categories.
We will continue working toward reducing our Scope 3 emissions through partnerships with stakeholders and by advancing businesses that contribute to societal decarbonization.

Please refer to the ESG Data at the link below for details on GHG emissions (Scope 1, 2, & 3).

Reference
【Our initiatives in collaboration with partners across our supply chain】

Category／Initiatives

 Details

Category 1

 Conforming with MC’s Policy for Sustainable Supply Chain Management Requesting suppliers to protect the environment, including through GHG reduction, and confirming compliance with MC’s Policy for Sustainability Supply Chain Management through an annual survey of suppliers subject to MC’s Sustainable Supply Chain Survey
Procurement of low-emission materials for urban development Adopting materials such as CO2-absorbing concrete and low-carbon asphalt paving for the urban development business
Collaboration with supplier farms Planting trees at farms within the supply chain of our food ingredient import operations

Category 4

 Streamlining logistics

Improving logistics efficiency through DX initiatives in the food logistics business

Category 10

 CO2 capture demonstration project Conducting CO2 capture demonstration projects at steel-making plants in collaboration with multiple partners

Category 11

Initiatives regarding next-generation fuels

 Climate Change : Initiatives | Environment | Sustainability | Mitsubishi Corporation

Initiatives regarding CCS／CCUS

 Climate Change : Initiatives | Environment | Sustainability | Mitsubishi Corporation
Category 13 Leasing low-emission construction equipment Introducing construction equipment with lower environmental impact into the leasing business

Avoided Emissions

Our Efforts to Reduce Emissions

We regard avoided emissions as a quantitative indicator for measuring our contribution to reducing GHG emissions across society and the extent to which we are capturing business opportunities associated with decarbonization.

What are Avoided Emissions?

Avoided emissions refer to the quantified reduction or mitigation of GHG emissions achieved by providing low-emission products and services that help reduce society’s overall GHG emissions, compared to a baseline scenario in which conventional products or services are used.

The basic formula we use for calculating avoided emissions is as follows.

Flow Basis (Lifetime)

This approach evaluates annual avoided emissions by calculating the difference between CO2 emissions from our products manufactured over their entire lifecycle, compared to emissions under a baseline scenario. This category includes materials and other products essential for EVs and similar end-use products.

Stock Basis (Single Year)

This approach evaluates avoided emissions generated within the evaluation year from our products and services. This category covers avoidance from renewable energy projects and similar initiatives.

The term “avoided emissions” includes not only the amount of carbon avoided by our products and services, but also the amount of carbon captured and removed.

Calculation Formula for Avoided Emissions
*Contribution ratios are not taken into account at this point due to calculation limitations.

Our Avoided Emissions

We have selected and assessed the following products that contribute to decarbonization and generate quantifiable avoided emissions.
In principle, calculations are based on production and operating volumes, but forecasts are used for sales volumes and other data that have not yet been compiled for certain products.

Reference

Examples of projects that contribute to avoided emissions that are in the planning stages or will begin operations in the near future

We have estimated avoided emissions for FY2025 and beyond for projects that have not yet begun operations / provision of services, or will begin operations soon. In the future, actual avoided emissions will be calculated based on each project’s operational performance.

Renewable Energy Power Generation Business
Through the operation of solar, onshore wind, hydro, and offshore wind power generation facilities currently under construction, we expect avoided emissions to increase by approximately 470,000 tons per year on a stock basis.
  • *
    The estimated avoided emissions shown above are subject to change depending on actual operations and sales performance of commercial products.

Supplementary Information

【Points to note when calculating the Company's avoided emissions】

  • In calculating the avoided emissions, we use actual (forecast) values and publicly available information whenever possible. However, when data is not readily available, assumptions and scenarios are applied for calculation purposes.
  • We will continue refining calculations and disclosure of avoided emissions based on ongoing international discussions and trends.

【Examples of guidelines used as reference】

  • GX League "Basic Guidelines for Disclosure and Evaluation of Climate-related Opportunities" (2023)
  • WBCSD/WRI "GHG Protocol Corporate Accounting and Reporting Standard" (2019)
  • WBCSD/Net Zero Initiative "Guidance on Avoided Emissions: Helping Business Drive Innovations and Scale Solutions Towards Net Zero" (2023)
  • Ministry of Economy, Trade and Industry "Guidelines for Quantifying GHG Emission Reductions of Goods or Services Through Global Value Chain" (2018)
  • The Institute of Life Cycle Assessment "Guidelines for Assessing the Contribution of Products to Avoided Greenhouse Gas Emissions" (2022)
  • Japan Chemical Industry Association "Guidelines for assessing the Avoided Emissions" (2012)