Responding to Climate Change (TCFD)

Our Response to the Climate Change Problem

Among the myriad issues that society currently faces, we believe that climate change stands out as one of the most important and pressing issues in the world today. Thus, while fully abiding by the Act on the Rational Use of Energy and the Shift, etc., to Non-Fossil Energy (Energy Saving Law), the Act on Promotion of Global Warming Countermeasures (Global Warming Law) and other environmental laws and regulations, the Sumitomo Rubber Group is also committed to fulfilling our corporate social responsibilities in other ways, including harnessing the advanced technical capabilities that we have amassed since our founding in order to tackle the challenges of reducing greenhouse gas emissions and so forth.

Supporting the Task Force on Climate-Related Disclosures (TCFD)

Having announced our support for the TCFD in June 2021, the Sumitomo Rubber Group now strives to actively disclose information concerning both the risks and the opportunities that climate change presents with respect to four key areas of our business: Governance, Strategy, Risk Management and Metrics/Targets.


Climate Change Governance Framework

The President of Sumitomo Rubber Industries, Ltd. is responsible for all matters pertaining to the issue of climate change within the Sumitomo Rubber Group. As such, the president actively participates in discussions and deliberations concerning climate change at meetings of our Sustainability Promotion Committee, which sets policy for our entire group. Meanwhile, the Vice President of Sumitomo Rubber Industries, who also serves as the Chairperson of the Sustainability Promotion Committee, oversees the promotion of efforts to combat climate change.

The Sustainability Promotion Committee holds biannual meetings, which provide opportunities for following up on and sharing information about activities related to climate change and other environmental issues as well as other sustainability efforts. At these meetings, the committee also discusses obstacles to the achievement of our long-term policies and deliberates on measures to overcome these. So that the Board of Directors may oversee and supervise sustainability activities, information concerning climate change, etc. is also included in reporting at Board Meetings.

Environmental Management System

Climate Change Governance Framework


Managing Risks Related to Climate Change

Chaired by the President of Sumitomo Rubber Industries, Ltd., our Risk Management Committee holds biannual meetings in order to oversee and supervise risk management activities and check on the overall effectiveness of our Risk Management System. The Sumitomo Rubber Group has established internal risk management rules for analyzing various business risks that coincide with climate change risks and assessing measures to address these risks. The results of risk analysis and countermeasure proposals are reported to the Risk Management Committee and the Board of Directors for discussion and deliberation. We also conduct annual assessments of climate change risks in order to account for external changes, such as updates to targets established under the Paris Agreement and the results of new scientific research.

Meanwhile, the Sustainability Promotion Committee is responsible for promoting environmental efforts and overseeing our Environmental Management System. The committee’s policy decisions are reported to the Board of Directors and concerned business divisions, after which the committee manages and follows up on targets, etc.

Risk Management

Analysis of Climate Change-Related Risks and Opportunities

Risks and opportunities Category Estimated timing of materialization Expected circumstances Planned response and initiatives
Risks Transition risks Market Medium term Higher energy cost at production bases Growing costs incurred by production bases for energy transition, etc.
  • Discuss the introduction of hydrogen and other renewable energy sources
Growth in logistics costs in step with surging energy prices
  • Discuss the utilization of multiple logistics contractors
Surging prices for fossil-based raw materials Higher costs for raw material procurement
  • Discuss the optimization of cost and pricing
  • Discuss the expansion / consolidation of the scope of raw material suppliers
Policy and regulatory Medium term Ever higher requirements for the reduction of CO2 emissions
  • The need for production adjustment due to limitations on CO2 emission volumes
  • The enforcement of import regulations in Europe and the United States based on the volume of CO2 emissions from products
  • Growth in financial burden arising from various carbon taxations
  • Gather information regarding technologies capable of reducing CO2 emissions to counter growing costs for emission reduction measures
Physical risks Acute Medium term Increasing severity and frequency of natural disasters Damage of production facilities
  • Conduct inspections of buildings and facilities in place at production bases and implement countermeasures
Long term Outbreak of pandemics Operational stoppage due to the disruption of factory lines and supply chains
  • Periodically review business continuity plans (BCPs)
Chronic Medium term Rising temperatures due to climate change and a decline in snowfalls, etc. Deterioration of the outdoor sporting environment
  • Develop sports equipment that gives due consideration to the mitigation of physical and mental burden placed on players
Negative impact on raw material procurement due to, for example, surges in natural rubber prices as a result of poor natural rubber harvests
  • Develop technologies aimed at enhancing natural rubber productivity and provide guidance to farmers
  • Diversify natural rubber suppliers
  • Develop technologies to produce natural rubber from sources other than the Para rubber tree
A decline in sales of studless tires
  • Allocate more funds to investment in R&D necessary to enhance tire performance
Opportunities Products and services Short to medium term Strengthening of environmental regulations applied to automobiles and growing public awareness regarding the protection of the Earth’s environment and the imminent danger of natural disasters Growing demand for next-generation tires due to the spread of CASE/MaaS
  • Create new economic and societal value through the realization of SMART TYRE CONCEPT for the development of tires and peripheral services
  • Provide a tire-related solution business that contributes to the enhancement of driving safety and the reduction of environmental burden via the incorporation of AI and IoT
Growing demand for eco-friendly products and fuel-efficient tires
  • Develop products made using biomass and recycled raw materials with smaller environmental footprints
  • Reduce the volume of plastics used in packaging and otherwise develop products with lower environmental footprints
Growing need for earthquake countermeasures
  • Develop a robust lineup of vibration control dampers for detached houses by applying vibration control technologies now used in bridges and buildings
Long term Outbreak of pandemics Growing global public awareness of hygiene
  • Expand the supply of rubber parts for medical applications

Climate Change Strategy

The potential impacts of climate change on the business activities of the Sumitomo Rubber Group are numerous. For example, the adoption of more stringent regulations or systems to combat climate change in countries around the world may require our production bases to transition to new types of energy or make other changes that would have the effect of increasing expenses, which, in turn, may have a negative impact on our financial situation and overall business performance. Rising temperatures may lead to more frequent and more intense typhoons, flooding or other natural disasters, which could damage our production facilities or otherwise cause any number of disruptions to our operations. Climate change may also lead to lower yields of natural rubber, resulting in skyrocketing prices for this key raw material while making procurement activities in general more difficult. Decreasing snowfall may result in decreased demand for winter tires. And these are just a few of the many risks that we face from climate change.

In order to contribute to the fight against climate change, the Sumitomo Rubber Group is aiming to achieve full carbon neutrality at all of our factories by the year 2050. In addition, we are committed to working harder than ever before to push ahead with various groupwide efforts to mitigate the effects of climate change, including developing and promoting the use of environmentally friendly products (such as fuel-efficient tires) and services (such as sensor technology to prevent driving with underinflated tires) as well as reducing the life cycle environmental impact of our products through green procurement, green logistics and improving the energy efficiency of manufacturing processes. At the same time, we are proceeding with preparations to respond to the shifts in demand that may accompany climate change, including increased demand for next-generation tires coinciding with the rise of CASE and MaaS as well as increasing demand for fuel-efficient tires and other tires that serve to reduce the environmental impact of mobility. Having done so, we will continue to monitor and assess the financial and other impacts of climate change on our business while working to mitigate and adapt to these impacts.

Initiatives to Achieve Carbon Neutrality

Natural Capital

Climate Change Scenario Analysis

●2°C scenario
Under the 2°C scenario, we have identified growing demand for fuel-efficient and other tires that serve to reduce the environmental impact of mobility and the expansion of tire-related solution businesses (including those utilizing sensing technologies) as main positive impacts. On the other hand, we anticipate growth in operational costs due to the introduction of carbon pricing as well as a drastic rise in the cost of investing in facility replacement aimed at transitioning to hydrogen and other renewable energy in response to tightening regulations on CO2 emissions.

●4°C scenario
Under the 4°C scenario, we have identified growing demand for tires capable of adapting to severe environments subject to high or low temperatures, heavy rainfalls or snowfalls, etc., as a main positive impact. Simultaneously, we estimate such negative impacts as a decline in sales of studless tires in step with fewer snowfalls and growth in investment costs associated with the R&D necessary to enhance tire performance.

In addition, we forecast that the increasing severity of climate disasters could result in the stoppage of factory operations due to flooding, while the instability of natural rubber supply may cause raw material prices to grow ever higher.

Scenario Risks and opportunities Expected circumstances Impact assessment (positive) Impact assessment (negative)
2°C scenario* Growth in demand for products and services capable of contributing to the mitigation of climate change Expansion of the market for products and services designed to contribute to the reduction of greenhouse gas (GHG) emissions
  • Growing demand for fuel-efficient tires and eco-friendly tires
  • Expansion of tire-related solution businesses, including those utilizing sensing technologies
  • Growth in R&D investment costs due to the increasingly intensifying competitive environment
Introduction of carbon pricing Rising carbon prices

USD100/t in developed countries (2030)

  • Promotion of carbon neutrality
  • Growth in operational costs due mainly to rising energy prices
Tightening of regulations on GHG emissions Strengthening of measures to reduce CO2 emissions
  • Promotion of carbon neutrality
  • A drastic rise in the cost of investing in facility replacement aimed at transitioning to hydrogen and other renewable energy sources
Rises in raw material costs Utilization of recycled resources
  • Expansion of ethical consumption
  • Growth in costs related to procurement, R&D, production and other undertakings due to the revision of raw material content (incorporation of biomass, etc.)
4°C scenario Increasing severity of climate change Expansion of the market for products and services related to adaptation to climate change
  • Growth in demand for tires capable of adapting to ever more severe environments (high or low temperature extremes, heavy rainfalls or snowfalls, etc.)
  • A decline in sales of studless tires due to fewer snowfalls
  • Growth in R&D investment costs necessary to enhance tire performance
Increasing severity of climate disasters due to rising temperatures Stoppage of factory operations due to flooding
  • Rising operational costs due to factory stoppage
Destabilization of raw material (mainly natural rubber) supply
  • Rising raw material costs

*We adopted RCP2.6 issued by the Intergovernmental Panel on Climate Change (IPCC) as part of the IPCC Fifth Assessment Report.

●Scope Specified by the Climate Change Scenarios

Scenarios adopted by the Sumitomo Rubber Group
RCP2.6 assumes that the global temperature rise will highly likely span 0.3°C to 1.7°C


1. All business fields (however, the analysis mainly pertains to the Tire Business as this business is expected to significantly affect both the Group’s financial position and GHG emissions).
2. Source: Climate Change 2014: Synthesis Report (Japanese translation provided by the Ministry of the Environment)

Setting of Internal Carbon Pricing

To create a framework for promoting internal activities in order to achieve our carbon neutrality targets, we introduced Internal Carbon Pricing (ICP), setting ¥8,000 (USD70)/t-CO2 as the reference price on a trial basis in 2022. We then officially adopted the ICP approach in 2023. Although we had previously applied ICP to investment in energy-saving measures, we now implement ICP to examine all investment projects that could possibly affect the volume of CO2 emissions.

  • Current ICP: ¥10,000(USD70)/t-CO2

Metrics & Targets

In February 2021, the Sumitomo Rubber Group committed to achieving carbon neutrality by the year 2050. That August, we unveiled our “Driving Our Future Challenge 2050” Long-Term Sustainability Policy, which sets forth various long-term targets with respect to carbon neutrality and beyond. These targets include reducing total CO2 emissions from all of our global factories by 55% compared with 2017 levels by the year 2030 before achieving full carbon neutrality by the year 2050.

In order to achieve these targets, we are not only working to reduce energy consumption while expanding cogeneration and the use of solar power but are pursuing a proof of concept project toward utilizing hydrogen, which is already being hailed as a next-generation energy source of the future. At the same time, we are advancing and expanding the technologies that we developed to create fossil resource-free tires so that we may increase the biomass and recycled content of our products as another means of contributing to the realization of carbon neutrality.

Carbon Neutrality Targets

Long-Term Sustainability Policy: Carbon Neutral (Scopes 1 & 2)

· We aim to reduce our CO2 emissions by 55% by 2030
and to achieve full carbon neutrality by 2050


All Products Consisting of 100% Sustainable Raw Materials by 2050

Long-Term Sustainability Policy: Increasing Usage Rate of the Sustainable Raw Material

Targets for Sustainable Raw Material Content

  2030 2050
Tire Business Tires 40% 100%
Sports Business Golf balls 20% of All Practice Golf Balls Sold 100% of All Golf Balls Sold
Tennis balls Launch of 100% Sustainable Tennis Balls 100% of All Tennis Balls Sold
Industrial Products Business All Products (Content by Weight) 40% 100%