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:

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.

Total CO₂ Emissions (Scope 1, 2)^{*1 *2}

Total Energy Consumption^*2

Electricity Consumption^*2

Total Gasoline and Diesel Consumed by Company Vehicles^*2

• *
  A checkmark ☑ indicates that fiscal 2019 figures have been assured by KPMG AZSA Sustainability Co., Ltd.

• Independent assurance

• *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)

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.