Climate Change Initiatives

Basic Approach

Today, climate change is a universally recognized problem, and increasing greenhouse gas emissions are making it worse. As the Paris Agreement, an international framework for climate action beyond 2020, and other initiatives give momentum to efforts to reduce greenhouse gas emissions across the globe, renewable energy along with environmentally-friendly products and services are more important than ever.The Fuyo Lease Group is holding up “responding to climate change issues and renewable energy” as one of its materialities (material issues), and working towards climate change mitigation by reducing greenhouse gas emissions from our operations. We carry out business activities in view of risks and opportunities in the business environment that climate change brings. With a BCP in place, we are well prepared for any emergency in which our business activities could be disrupted by the destruction of social infrastructure caused by a natural disaster. We also recognize that business opportunities lie in renewable energy generation and energy-efficient assets leasing businesses. This is an area we will focus upon as one of the strategic areas of the Medium-term Management Plan. We aim to grow our businesses alongside activities to mitigate climate change.

Examples of the risks and opportunities that the Fuyo Lease Group perceives climate change will bring about are as follows:

Risks
  • Impact on business results due to regulations such as carbon tax and major regulatory changes (medium-to-long term)
  • Restrictions on business activities due to damage to social infrastructure etc. resulting from an increase in natural disasters (medium-to-long term)
  • Decline in revenues from electricity sales in the mega-solar business due to the impact of unseasonal weather (medium-to-long term)
Opportunities
  • Increase in demand for renewable energy (medium-to-long term)
  • Increase in demand for leasing energy-saving properties, etc. (medium-to-long term)
  • Increase in demand for environmentally-friendly products and services (medium-to-long term)

As with the other environmental issues, we have established a system for managing climate change countermeasures with the CEO (President of Fuyo Lease) and the Environmental Control Officer (Executive officer supervising the Creating Shared Value Promotion Office). The president, who is our chief executive officer, regularly receives reports on the Group's progress on climate change initiatives, and decides on policies after reporting and discussing particularly important issues with the Board of Directors. We will continue to properly manage and promote our efforts group-wide.

Initiatives to Reduce Greenhouse Gas Emissions

The Japan Leasing Association has formulated a voluntary low-carbon society action plan, which Fuyo Lease has signed on to as a member company.
The Fuyo Lease Group is making efforts to conserve the environment at all our locations by setting targets that lower our CO₂ emissions and energy consumption, and work to reduce power usage, as well as our company vehicles' fuel consumption and exhaust emissions. In 2018, we started to issue green bonds (available only to those businesses that are expected to improve the environment) to raise funds from a variety of sources while promoting renewable energy. In addition, we joined RE100, a business initiative which aims to source 100% renewable energy to power business activities, as the first comprehensive leasing company in Japan. In 2019, we endorsed the Task Force on Climate-related Financial Disclosures’ (TCFD) recommendations. Not only does the Group make direct efforts to reduce its own greenhouse gas emissions but also makes indirect contributions to reducing greenhouse gas emissions through promoting renewable energy by utilizing schemes of lease and finance.

RE100 CDP DISCLOSURE INSIGHT ACTION

Total CO₂ Emissions (Scope 1, 2)*1 *2

2016/3 CO₂ emission intensity:0.31 Total:1,216 5 group companies*3:311 Fuyo General Lease:905 2017/3 CO₂ emission intensity:0.33 Total:1,271 5 group companies*3:307 Fuyo General Lease:964 2018/3 CO₂ emission intensity:0.37 Total:2,074 2 group companies*4:828 5 group companies*3:319 Fuyo General Lease:927 2019/3 CO₂ emission intensity:0.36 Total:1,937 2 group companies*4:758 5 group companies*3:328 Fuyo General Lease:851 2020/3 CO₂ emission intensity:0.29 (t-CO₂/100 millions of yen) Total:2,007 2 group companies*5:178 2 group companies*4:685 5 group companies*3:327 Fuyo General Lease:816 (t-CO₂)

Total Energy Consumption*2

2016/3 Energy consumption intensity:5.83 Total:23,061  Gasoline and Diesel:2,267 City gas:29 Electricity:20,765 2017/3 Energy consumption intensity:6.25 Total:24,392  Gasoline and Diesel:2,414 City gas:31 Electricity:21,947 2018/3 Energy consumption intensity:6.77 Total:38,009  Gasoline and Diesel:11,471 City gas:34 Electricity:26,504 2019/3 Energy consumption intensity:6.82 Total:36,468  Gasoline and Diesel:10,526 City gas:30 Electricity:25,912 2020/3 Energy consumption intensity:5.71 (GJ/100 millions of yen) Total:39,019  Gasoline and Diesel:10,237 City gas:28 Electricity:28,754 (GJ)

Electricity Consumption*2

2016/3 Electricity consumption intensity:526.43 Total:2,083 5 group companies*3:542 Fuyo General Lease:1,541 2017/3 Electricity consumption intensity:564.30 Total:2,201 5 group companies*3:541 Fuyo General Lease:1,660 2018/3 Electricity consumption intensity:473.61 Total:2,658 2 group companies*4:439 5 group companies*3:588 Fuyo General Lease:1,631 2019/3 Electricity consumption intensity:485.75 Total:2,599 2 group companies*4:452 5 group companies*3:625 Fuyo General Lease:1,523 2020/3 Electricity consumption intensity:421.98 (MWh/100 millions of yen) Total:2,884 2 group companies*5:253 2 group companies*4:489 5 group companies*3:626 Fuyo General Lease:1,517 (kWh)

Total Gasoline and Diesel Consumed by Company Vehicles*2

2016/3  Gasoline and Diesel consumption intensity:16.56 Total:66 5 group companies*3:15 Fuyo General Lease:51 2017/3  Gasoline and Diesel consumption intensity:17.88 Total:70 5 group companies*3:15 Fuyo General Lease:55 2018/3  Gasoline and Diesel consumption intensity:59.03 Total:331 2 group companies*4:263 5 group companies*3:13 Fuyo General Lease:55 2019/3  Gasoline and Diesel consumption intensity:56.86 Total:304 2 group companies*4:238 5 group companies*3:13 Fuyo General Lease:54 2020/3  Gasoline and Diesel consumption intensity:43.29 (L/100 millions of yen) Total:296 2 group companies*5:27 2 group companies*4:208 5 group companies*3:15 Fuyo General Lease:47 (kL)
  • *
    A checkmark ☑ indicates that fiscal 2019 figures have been assured by KPMG AZSA Sustainability Co., Ltd.
  • *1
    Total CO₂ emissions were calculated with the emission factors specified by the government based on the Ministerial Ordinance Concerning GHG emissions Associated with Business Activities of Specified Emitters (The emissions associated with electricity are calculated based on the emission factor issued by power transmission and distribution business operators of where our regional operations and offices are located). Fuyo General Lease and the Groups’ companies are not included in specified emitters. Our scope 1 and 2 emissions were 688 t-CO₂ and 1,319 t-CO₂ respectively.
  • *2
    Data coverage: all domestic locations of Fuyo General Lease, Fuyo Auto Lease, Fuyo Network Service, FGL Group Business Service, Aqua Art, Sharp Finance, Accretive, INVOICE, and FUJITA. Before March 2017 do not include figures of Sharp Finance and Accretive as their data collection began in fiscal 2017. Before March 2019 do not include figures of INVOICE and FUJITA as their data collection began in fiscal 2019.
  • *3
    5 group companies: all domestic locations of Fuyo Auto Lease, Fuyo Network Service, Fuyo Lease Sales, FGL Group Business Service, and Aqua Art.
  • *4
    2 group companies: all domestic locations of Sharp Finance and Accretive.
  • *5
    2 group companies: all domestic locations of INVOICE and FUJITA.

Adapting to climate change

The Fuyo Lease Group is not only engaged in mitigation activities for climate change, but the Group is also carrying out adaption measures for it. We have a business contingency plan in place for responding to extreme weather, which includes measures taken to prepare for massive flooding that could occur at our business sites, or data centers, and we are working to minimize risks.

Energy Conservation via Products and Services

We have partnered with energy-saving equipment manufacturers, construction companies, and companies in other various sectors to help customers save energy through the ESCO service and other programs. The ESCO service provides everything needed to improve energy efficiency, including technology, equipment, personnel, and funding, and achieves energy conservation without compromising a customer's current environment or convenience. As the ESCO service provider, we receive a portion of the actual energy cost savings generated through the service as compensation. In addition, we help our customers reduce costs and CO₂ emissions by introducing various energy saving solutions tailored to their energy usage. Examples of the solutions include energy-saving control and operational improvement for air-conditioning systems and LED lightings, and subsidized leasing.

Promotion of Renewable Energy

As climate change risks increase, the renewable energy market continues to grow with a focus on solar, wind, biomass, small and medium hydro, and geothermal power. Fuyo Lease leverage the know-how gained through our power generation business to offer a host of power generation equipment installation plans that meet a wide array of customer needs. Those include everything from large-scale power plants to rooftop solar panels of distribution warehouses and other commercial facilities as off-grid schemes for self-consumption. Along with various financing options, we introduce them to customers with the aim of taking the use of renewable energy to new heights.At the same time, we are contributing to further expanding the introduction of renewable energy by forming business alliances with venture companies that have advanced renewable energy-related technologies, and supporting industrialization and commercialization.

Initiatives in the Solar Power Business

At Fuyo Lease, we operate a total of 35 solar power plants in Japan, supplying electricity to local communities for approximately 57,660 households. In February 2020, we began commercial operation of Namie Sakai Solar Power Plant 1 and 2 in Namie Town, Fukushima Prefecture, Japan. These power plants are the first project in a government designated difficult-to-return zone. The installed capacity of the photovoltaic power plant that started operation this time is approximately 60 MW-dc, and the estimated amount of annual power generation is approximately 60.27 million kWh, which is equivalent to annual power consumption for 16,700 general households*. The plants are the largest solar power plants of the Group.

  • *
    Calculated based on 3,600kW per household

Solar Power Generated (output)/Power Supplied/CO₂ Reduction (estimation)

2016/3 Clean energy supply (output):77 Energy supply when converted into a number of households:23,022 CO₂ reduction by solar power generation (t-CO₂,estimation):30,091 2017/3 Clean energy supply (output):77 Energy supply when converted into a number of households:23,022 CO₂ reduction by solar power generation (t-CO₂,estimation):44,216 2018/3 Clean energy supply (output):102 Energy supply when converted into a number of households:29,902 CO₂ reduction by solar power generation (t-CO₂,estimation):45,997 2019/3 Clean energy supply (output):140 Energy supply when converted into a number of households:40,412 CO₂ reduction by solar power generation (t-CO₂,estimation):70,242 2020/3 Clean energy supply (output):200 (MWdc) Energy supply when converted into a number of households:57,112 (households) CO₂ reduction by solar power generation (t-CO₂,estimation):70,054 (t-CO₂)

Promoting Renewable Energy-Related Infrastructure

Recently, more and more Japanese companies have been joining RE100. However, small- and medium-sized enterprises, administrative agencies, hospitals, and educational institutions do not meet the requirements for joining RE100. To enable these organizations to implement renewable energy initiatives and raise public awareness throughout Japan, efforts are being made to develop a new framework for the 100% renewable energy initiative, “the 100% Renewable Electricity Declaration RE Action,” which small- and medium-sized enterprises can also take part in.
In response to these developments, we have launched “Fuyo 100% Renewable Energy Declaration Support Program.” The purpose of the program is to promote a transition to renewable energy by providing financial support to businesses and organizations that have signed up to “the 100% Renewable Electricity Declaration RE Action.” More specifically, we raise funds from investors and issue green bonds and use the gathered funds to support businesses and organizations that have joined “the 100% Renewable Electricity Declaration RE Action” to incorporate renewable energy and/or energy efficient equipment into their operations. “Fuyo 100% Renewable Energy Declaration Support Program” has been selected as a Model Case for the fiscal 2019 Green Bond Issuance by the Ministry of the Environment in recognition of its uniqueness and contribution to Japan's efforts to promote renewable energy countrywide. As “the 100% Renewable Energy Declaration RE Action” progresses, we are committed to providing active support to our clients in response to their financing needs for renewable energy.

Fuyo 100% Renewable Energy Declaration Support Program Investors→Support Program[Green bonds(Fuyo Lease) (Green Bond Platform)]→RE Action participating organizations[Company A(SMEs), City B(local government), Hospital C, Scool D(education)], RE100 participating company, Company E(large company)

Providing Support for Investments in Renewable Energy-Related Technologies and Their Commercialization

In order to contribute to the further expansion of renewable energy introductions, we provide commercialization support to venture companies possessing cutting-edge renewable energy technologies through investments and business collaborations.

Girasol Energy Inc., with which a capital and business alliance was entered into in fiscal 2019, is a venture company from the University of Tokyo, and is developing the maintenance and management IoT platform PPLC-PV* for solar power facilities. This platform collects and analyzes data such as current, voltage, and temperature, thus making it possible to understand operational status on a panel-by-panel basis and to remotely identify problems as well as abnormalities at an early stage. One of the most important factors in making renewable energy a mainstay power source is the ability to operate power plants stably over a long period of time. We believe that the services provided by this company will contribute to the maintenance and expansion of solar power generation.

We strive to promote the spread of renewable energy and to create new business opportunities through active alliances with these venture companies.

  • *
    PPLC-PV stands for a pulse power line communication for series-connected PV monitoring.
Support results
Investment Timing Partner Description
June 2018 Exergy Power Systems Development and manufacture of next-generation energy storage systems
Mar. 2019 NExT-e Solutions Provision of battery management systems that utilize advanced battery control technologies
Feb. 2020 Girasol Energy Development of IoT platforms for the maintenance and management of solar power facilities

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