Cosmo Energy Holdings (5021) ESG update summary

Governance and oversight

• 2022 board reforms delegated substantial execution authority to the executive committee, strengthening oversight and speeding decisions; independent directors reached half the board in 2024.

• Independent and female director representation increased; executive sessions relay outside directors’ views to management without identifying speakers.

• FY2025 sustainability execution decisions moved to the executive committee, supported by a Sustainability Strategy Council/Committee integrating financial and non-financial discussions.

• Director remuneration limits rose in FY2024; malus and clawback provisions began in FY2025. Annual incentives include ESG and individual evaluations, while long-term stock pay is linked to relative TSR and net D/E ratio.

• The Nomination and Remuneration Committee has five members, four independent outside directors; basic and annual cash pay account for 60%–70% of total remuneration, with the balance stock-based.

Strategy and investment priorities

• A stronger oil-business earnings base was cited as support for taking risks in new businesses, while decarbonization timelines have been delayed and plans must adapt to changing conditions.

• Offshore wind tenders were forgone/deferred on economic grounds amid inflation-driven cost increases and fierce competition; investment decisions emphasize profitability and IRR.

• Annual rolling revisions to the medium-term plan were advocated as conditions change, balancing long-term priorities with prompt decisions and stable energy supply.

Climate and energy transition

• FY2024 Scope 1+2 emissions were 24% below FY2013, against a target of at least 30% reduction by 2030; net zero across Scopes 1, 2 and 3 is targeted by 2050.

• FY2024 emissions fell 460,000 tons YoY, supported by efficiency gains and lower refinery operating rates during maintenance; onshore wind contributed 250,000 tons of CO2 reductions.

• Renewable power generation contributed 590 million kWh, with wind capacity at 320 MW at FY2024 year-end; onshore wind development is progressing toward 900 MW by FY2030.

• The Sakai SAF facility was completed in December 2024, with domestic waste-cooking-oil SAF supply starting in April 2025; hydrogen stations opened in Heiwajima and Ariake, with a third planned around 2027.

• CCS feasibility and FEED studies target FID by FY2026 and project start by FY2030; a CCU biological-conversion study began in March 2025. The 2050 roadmap is under review for policy, costs, market maturity and other changing conditions.