Cosmo Energy Holdings (5021) ESG update summary

Shareholder meeting and strategic context

• The board concluded Murakami group proposals would not improve enterprise value and could harm shareholder interests; an extraordinary meeting was called for shareholders to judge that conclusion.

• ESG priorities are embedded in the 7th Medium-Term Management Plan and Vision 2030, linking sustainability and business growth.

Sustainability strategy and governance

• Material issues were consolidated into eight priorities, including DX, with KPIs backcast from Vision 2030 outcomes and targets set for the 7th plan.

• The President-chaired Sustainability Strategy Committee reviews materiality KPIs semi-annually and reports to the board; FY2022 discussions covered KPIs, the net-zero roadmap and human-rights due diligence.

• As of October 2023, the board had 9 directors, including 3 women and 4 independent outside directors; a third-party board-effectiveness evaluation was under consideration.

• ESG goals entered annual executive incentives from FY2022; from FY2023, financial performance evaluation used net income excluding inventory valuation effects instead of ordinary income on the same basis.

Climate and clean energy

• Targets are a 30% reduction in Scope 1 and 2 GHG emissions by 2030 versus 2013 and carbon net zero across Scopes 1–3 by 2050; refinery utilization is to remain high through 2030 despite declining petroleum demand.

• CCS studies cover a Sakai-Semboku value chain and shared liquefaction and temporary-storage facilities with Kansai Electric Power, plus marine transport under an MoU with Mitsui O.S.K. Lines.

• CCU pathways under assessment include converting refinery CO2 into methanol, ethanol, synthetic fuels, SAF and chemical alternatives, with technology, emissions impact and investment returns evaluated.

• Clean-energy initiatives include a waste-cooking-oil SAF demonstration plant, a Tokyo collection program, a green-power environmental-value platform, and hydrogen projects with Iwatani and Toda Kogyo; renewables avoided 6.5 ktCO2 in FY2023 Q1.

• Scope 3 initiatives include SAF and other biofuels, green electricity, hydrogen and carbon-recycled products.