Structure
Risk Management
When reviewing and making decisions on loan and investment proposals, MC conducts a comprehensive screening process which considers not only economic aspects, but ESG factors as well. From a water resources perspective, MC has set up a screening process for decision-making that first confirms compliance with environmental regulations related to such factors as water discharge and withdrawals (confirmation of regulatory risks), as well as the impact of water withdrawals on surrounding communities, local society, biodiversity, and the impact of climate change on the fresh water environment (confirmation of physical risks). For this screening process, particularly for businesses in areas considered to have high levels of water stress, MC utilizes the World Resource Institute (WRI)’s Aqueduct tool in order to incorporate external perspectives. Besides screening new investment and exit proposals, MC strives to make improvements to existing business investments by monitoring their management practices.
In addition, MC conducts annual surveys of suppliers to confirm their compliance with the Mitsubishi Corporation Policy for Sustainable Supply Chain Management, which outlines MC’s actions to address human rights, labor rights, and environmental issues in supply chains for products with high environmental or social risks. Items covered in these surveys include consideration for impacts on local communities and ecosystems; whether suppliers have policies, strategies, and guidelines designed to prevent river pollution and set and monitor water consumption reduction targets; and the content of any water-related surveys carried out. (See the Supply Chain Management page for additional details).
Water Stress Analysis
In addition to Group-wide efforts to reduce water consumption, we carried out water stress analysis of group companies with high water withdrawal amounts in order to identify priority reduction targets.
The process of analysis and some results are described below.
Process of the Analysis
The top 20 MC Group companies in terms of water withdrawal amounts (accounting for approximately 99.2% of the total water withdrawal amount for companies under MC's financial control) were identified.
WRI’s Aqueduct water stress analysis tool was used to carry out a survey to determine if any of the 20 companies identified were located in areas of high water stress.
Measures designed to reduce water consumption were implemented, together with reduction targets, at any business located in an area of high water stress (rated “High” or above).
Results of the Analysis
According to Aqueduct, a Thai tapioca starch manufacturing and processing company is based in an area affected by high water stress. The company's location, classified as the Mekong River Basin, is generally at high risk of water shortages, droughts, and inadequate wastewater treatment. However, based on the analysis of the impact on operations using the WWF Water Risk Filter— and taking into account business characteristics that we identified after conducting interviews with management during site visits—the company's operational risk score was “Low.“
Establishment of Targets and Initiatives to Reduce Water Consumption
The Company has set a water recycling ratio target of 10% to reduce water consumption per unit of production volume, and is working on water reuse by recirculating water used to backwash microfiltration membranes, etc.