Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced CO2 emissions by 0.59 million tons from FY2013 to FY2019
• Improved CO2 emissions per unit of crude oil equivalent throughput by 0.6% in FY2019
• Maruzen Petrochemical achieved a reduction in energy use equivalent to about 600 kiloliters of crude oil per year through modifications to its ethylene manufacturing facilities.
• Wind power generation capacity reached 266,000 kW by FY2019.

Social Achievements

• Endorsed the “Declaration of Biodiversity by Nippon Keidanren (Japan Business Foundation) and its Action Policy”
• Implemented zero-discharge operation in Hail Oil Field development, reducing environmental impact.
• Engaged in satoyama (village forests) conservation activities through the “Cosmo no Mori” project.
• Partnership agreement with e-Mobility Power, Inc. to install rapid charging equipment for EVs at service stations.

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Unplanned suspensions at refineries resulted in almost flat energy consumption rate compared to the previous year despite energy conservation efforts.

Mitigation Strategies

• Continued striving for energy conservation both physically (high-efficiency equipment) and non-physically (energy-efficient operation).
• Installation and operation of the No. 2 cogeneration facility at Sakai Refinery.
• Expansion of energy efficiency through use of the utility balance optimization calculation system.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• FY2018 Achievement Award from the Japanese Association for Petroleum Technology

Environmental Metrics

ESG Focus Areas

• Climate change countermeasures
• Clean technology opportunities
• Product specifications and clean fuel blends
• Structural reform of businesses that are the foundation for revenue
• Occupational safety & health management
• Diversity and equal opportunity
• Ethics and integrity
• Risk management
• Compliance
• Safe operations and stable supply

Environmental Achievements

• CO2 emissions were reduced approx. 1% due in part to the decline in the operating rate of a plant which was a result of the regular maintenance (turnaround maintenance).
• Reduction of greenhouse gas emissions by adopting a utility balance optimization calculation system
• Increase of the capacity of the No.2 Catalytic Reforming Unit's high-efficiency heat exchanger at Chiba Refinery
• Chiba Refinery's No.2 Catalytic Reforming Unit had a plate-type heat exchanger. We replaced this heat exchanger to increase the heat-exchanging capacity in FY2020. This has further reduced fuel consumption, contributing to energy conservation and a reduction of CO2 emissions.
• Maruzen Petrochemical's energy-saving initiative: two-dimensionally processed impellers were replaced by three-dimensionally processed impellers to enable the more efficient production of refrigerant. This has enabled more efficient operations than before and allowed the company to reduce its energy usage by about the equivalent of 2,300 kiloliters of crude oil per year.

Social Achievements

• Cosmo Oil became Japan's first oil wholesaler to obtain Platinum Kurumin certification from the Minister of Health, Labour and Welfare in 2018, under the Act on Advancement of Measures to Support Raising Next-Generation Children.
• The rate at which childcare leave is taken, which was 3% in FY2015, rose to 32% in FY2020.
• As of June 1, 2021, employees with disabilities are 2.36% of the total workforce (statutory percentage: 2.30%).
• Cosmo Energy Holdings, Cosmo Energy Exploration & Production Co., Ltd., Cosmo Oil Co., Ltd., Cosmo Oil Marketing Co., Ltd., Cosmo Oil Lubricants Co., Ltd., and Cosmo Business Associates Co., Ltd. were recognized by the Ministry of Economy, Trade and Industry (METI) under the 2021 Certified Health and Productivity Management Organization Recognition Program (large enterprise category).

Governance Achievements

• In April 2021, Chiba Refinery was certified as a super nintei jigyosha (tokutei nintei jigyosha).
• The percentage of female directors is 20%
• In FY2020, there was no major work-related accidents or major accidents at the Group.
• Cosmo Energy Holdings has been included in the FTSE4Good Developed Index for 19 consecutive years since 2003 when the Company was adopted.
• The Company was also selected as a constituent of the FTSE Blossom Japan Index, which the Government Pension Investment Fund (GPIF) has adopted as an Environmental, Social and Governance (ESG) investment index for Japanese equities for the fifth consecutive year.

Climate Goals & Targets

Environmental Challenges

• Fluctuation in crude oil prices due to global trends in oil supply and demand as well as political instability in oil producing countries and surrounding countries; possibility that a commercially viable amount of resources will not be found in a newly awarded exploration block; risk of the asset stranding of oil fields (asset holdings) caused by the energy transition as a long-term trend; and accidents at oil fields and production facilities associated with operations.
• Risks related to petroleum product prices and product demand
• Risks related to accidents at and leakage from refineries and other facilities
• Risks associated with quality issues of supplied products
• Decrease in product sales volumes associated with a decline in demand for jet fuel and other products
• Decrease in sales of car care at service stations during the states of emergency
• A global decline in product prices stemming from the deterioration of the petrochemical product supply-demand balance, the expansion of supply due to new construction/expansion of overseas plants, and market fluctuations resulting from another wave of infection due to COVID-19 variants.
• Changes to government policies and institutions related to renewable energy
• Decline in profitability resulting from intensified competition
• Delay in overseas engineers’ entry into Japan and construction delays

Mitigation Strategies

• Developing and implementing a work-from-home program
• Reviewing costs to secure profits even with low prices
• Recommending that departments where such workstyles are possible work from home
• Having commuters measure their body temperatures, wear masks, disinfect hands, and avoid the 3C's (closed spaces, crowded places, and close-contact settings)
• Maintaining a high operating rate at refineries despite declining demand
• Reinforcing connections with customers, and presence of connections with service station dealers
• Development of brand products (Commitment Compulsory Car Inspection, Cosmo Denki (Electricity), Yasashi (friendly) Car Sharing, and Cosmo My Car Lease)
• Having many employees, mainly those working at the head office, shift to teleworking-based workstyles
• Continuing to provide support for affiliated service stations (distribution of non-contact infrared thermometers, etc.)
• Using digital tools to communicate with service station dealers
• Restricting entry of external people and ensuring thorough disinfection of workplaces at refineries, which has kept operations unaffected
• Promotion of synergy with the Petroleum Business
• Revising schedules
• Promoting teleworking and taking measures to control infection at the head office and other business locations.

Supply Chain Management

Supplier Audits: Evaluated suppliers in accordance with the Cosmo Energy Group's CSR-based Procurement Policy and Cosmo Oil’s CSR-based Purchasing Guidelines

Responsible Procurement

• CSR Procurement Policy

Climate-Related Risks & Opportunities

Physical Risks

• Suspension of operations or incoming or outgoing shipments, and the suspension of the operations of service stations due to climate change

Transition Risks

• Reduction of demand for fuel oil due to progress in the shift from fossil fuels
• Decline in corporate value caused by delayed measures for the creation of a decarbonized society

Opportunities

• Increase of business opportunities related to renewable energy

Reporting Standards

Frameworks Used: GRI Standards, TCFD

Certifications: Platinum Kurumin certification

Third-party Assurance: KPMG AZSA Sustainability Co., Ltd.

Sustainable Products & Innovation

• Cosmo Denki (Electricity) Green

Environmental Metrics

ESG Focus Areas

• Climate change
• Diversity
• Governance
• Safety
• Human Rights
• Supply Chain

Environmental Achievements

• Reduced CO2 emissions by 490,000 tons compared to the FY2013 level (6.97 million tons in FY2021)
• Switched to electricity from virtually 100% renewable energy sources at all 603 service stations directly operated by the Cosmo Energy Group by May 2022.
• Mangrove planting program recognized by PIANC

Social Achievements

• Launched Cosmo Zero Carbon Solution, a package of products including renewable energy and EVs.
• Achieved 50% women in new graduate hires and 5.9% women managers as of April 1, 2022.
• 100% employee health checkup rate.
• 90.6% annual paid leave acquisition rate (FY2021)

Governance Achievements

• Established Sustainability Strategy Committee and Sustainability Committee.
• Linked 10% of executives’ remuneration to ESG evaluation.
• Obtained super nintei jigyosha certification for Chiba and Yokkaichi Refineries.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to geopolitical instability and climate events
• Fluctuations in crude oil and petrochemical product prices
• Intensified competition in the renewable energy sector
• Transition risks associated with decarbonization
• Achieving net-zero emissions by 2050

Mitigation Strategies

• Developed alternative sourcing strategies
• Investing in renewable energy and other new businesses
• Implementing cost reduction measures
• Developing a roadmap for achieving net-zero carbon emissions by 2050
• Collaborating with ADNOC on CCS/CCUS projects
• Improving price competitiveness in offshore wind power projects

Supply Chain Management

Responsible Procurement

• Sustainable Procurement Policy
• CSR-based Purchasing Guidelines
• Green procurement initiatives

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Changes in energy demand and the energy mix
• Regulatory changes
• Market shifts

Opportunities

• Expansion of renewable energy business
• Development of low-carbon fuels
• Development of CCS/CCUS technologies

Reporting Standards

Frameworks Used: GRI Standards, TCFD Recommendations

Certifications: DX Certification, Super Nintei jigyosha (Chiba and Yokkaichi Refineries)

Third-party Assurance: KPMG AZSA Sustainability Co., Ltd.

Sustainable Products & Innovation

• Cosmo Zero Carbon Solution
• SAF
• Green electricity
• Polymers for photoresists

Awards & Recognition

• Nadeshiko Brand designation
• Certifi ed Health and Productivity Management Organization Recognition Program

Environmental Metrics

ESG Focus Areas

• Climate change countermeasures
• Provision of clean energy, products, and services
• Structural reform of profit-making businesses
• Promoting human resources’ success, health, and job satisfaction
• Commitment to compliance and sharing of philosophy and values
• Strengthening of Group risk management
• Digital transformation (DX)
• Safe operations and stable supply

Environmental Achievements

• Transition to electricity that is virtually all from renewable energy sources at 603 sites, including directly-operated service stations
• Reduced CO2 emissions by 7.2% compared to FY2013 (target 16% reduction).
• Successful transition to electricity that is virtually all from renewable energy sources at 603 sites, including directly-operated service stations

Social Achievements

• Percentage of female managers reached 6.7%, exceeding our target of 6%
• Percentage of women among new graduate hires reached 60%
• Introduced a mentorship program for female employees and mid-career hires.
• Cosmo Oil became Japan’s first oil wholesaler to obtain Platinum Kurumin certification in 2018.

Governance Achievements

• Increased diversity among directors (3/9 female, 4/9 independent outside directors)
• Evaluation of efforts towards ESG targets have been taken into account in annual incentives (since FY2022).

Climate Goals & Targets

Environmental Challenges

• Gap between what we presently recognize as issues and the material issues we have addressed for the past two years.
• Supply-demand adjustment in green electricity businesses.
• High costs and few market incentives for energy storage in Japan.
• Competition for hydrogen and renewable energy resources.
• Concerns about greenwashing and damage to company brand.
• Difficulty in forecasting feasibility and estimated energy recovery during energy transition.
• Unavoidable cost incurred during energy transition, weakening industrial competitiveness compared to China and India.

Mitigation Strategies

• Reevaluation of material issues in April 2023 to promote more effective initiatives.
• Plan for electricity storage business starting small with a demonstration project.
• Engagement with the Japanese government to pursue energy storage business.
• Bolstering green electricity supply chain and forging a new path forward.
• Upfront investments in moonshot projects and breakthrough technologies.
• Collaboration with the government and other stakeholders.
• Investments in HRX, DX, and GX.

Supply Chain Management

Supplier Audits: Evaluations of approximately 900 suppliers; response rate nearly 90%

Responsible Procurement

• Cosmo Energy Group Sustainable Procurement Guidelines (summarizing requests from suppliers in nine categories)

Climate-Related Risks & Opportunities

Physical Risks

• Abnormal weather (storm and flood damage)
• Higher ocean level and tsunamis

Transition Risks

• Introduction of carbon pricing
• Increased cost of purchasing emission credits
• Development of low-carbon and clean technologies
• Change in energy mix
• Change in energy demand
• Change in customer behavior
• Accelerated divestment from petroleum business

Opportunities

• Expansion of renewable energy (wind power generation business)
• Increased demand for low-carbon energy
• Expansion of EV-related service business
• Expansion of CO2 emission reduction business due to developments in CCUS technologies

Reporting Standards

Frameworks Used: GRI, TCFD

Sustainable Products & Innovation

• Cosmo Denki (Electricity) Green
• Cosmo CF-5 biodiesel fuel
• SAF (Sustainable Aviation Fuel)

Awards & Recognition

• Platinum Kurumin certification (Cosmo Oil)