A Message from the Executive Director in Charge of Sustainability

Sustainability that lives in Sumitomo Rubber Philosophy

I have been in charge of corporate strategy and DX promotion, and from January 2024, I was also put in charge of the Sustainability Management Promotion HQ.
Sumitomo’s business began as a copper refining industry, and we have been engaged in tree planting and other activities to combat the pollution caused by our business. As the Sumitomo Business Philosophy states, “Benefit for self and others, private and public interests are one and the same,” we believe that sustainability management is the roots of our business.
In promoting sustainability management, there may be a temporary negative financial impact, which may require understanding and cooperation from related departments. If we only pursue profits with concern for short-term financial impact, we will not be able to respond to social issues. Without forgetting the roots of our business as described above, we will promote various measures more efficiently and promptly by integrating sustainability measures into our management strategy with a long-term orientation and perspective of creating social value.
We are implementing specific measures based on the Long-Term Sustainability Policy: “Driving Our Future Challenge 2050” *¹ that was formulated in 2021. To improve its viability, the promotion system consists of working groups under the umbrella of the Sustainability Promotion Committee, which is directly supervised by the Board of Directors, and six subcommittees that deal with carbon neutrality and other important issues.

*¹ Based on “Our Philosophy,” we have established the Long-Term Sustainability Policy for 2050 to ensure the sustainable development of the Company and society.

Initiatives for “Pursuing the Development of a Decarbonized Society” and “Building a Circular Economy”

In the environmental field, we have set two key issues: “pursuing the Development of a decarbonized society” and “building a circular economy.”
For “pursuing the Development of a decarbonized society,” we aim to achieve carbon neutrality through business activities focused on reducing CO₂ emissions. We had set a target of 50% reduction in emissions compared to 2017 levels by 2030 for Scope 1 (direct emissions by the Company) and Scope 2 (indirect emissions from the use of electricity, heat, and steam supplied by other companies), but we are on track to achieve that goal and have decided to raise the target to a 55% reduction. This is a sign that the Group’s decarbonization efforts are making steady progress. We are also taking industry-leading steps to decarbonize fuels as part of our initiatives to achieve carbon neutrality. The utilization of hydrogen energy at our Shirakawa Factory in Fukushima Prefecture has enabled the mass production of tires that are the first in Japan^* to achieve carbon neutrality in Scopes 1 and 2. We will continue to take on the challenge of utilizing hydrogen energy in the tire manufacturing process, placing importance on long-term perspectives and a spirit of innovation. Specifically, we plan to install hydrogen production equipment on the premises of our own factories and start new verification testing so that we can apply it to our own production of hydrogen gas, which we have been procuring from other companies until now.

* Based on Sumitomo Rubber Industries’ own research (as of January 2023)

Additionally, we have set a 2030 reduction target for Scope 3 (emissions by other companies and users other than Scope 1 and 2), which accounts for more than 90% of the Group’s CO₂ emissions. In addition to quantitative targets, we have set KPI targets for emissions during use by product users (Category 11), which account for a high percentage of emissions. We will promote the development of materials, design, and manufacturing technologies to create lightweight tires and improve wear resistance, which will be even more important in the future, to increase our competitiveness and contribute to CO₂ reduction.
With regard to “building a circular economy,” we are increasing the usage rate of sustainable raw materials and have started an internal project to expand sales of retread tires^* as part of the TOWANOWA business model designed to support a circular economy through the tire business. In Japan, many used tires are reused as heat sources, so we believe that shifting to material and chemical recycling will contribute to resource conservation and CO₂ reduction.
In 2023, we also set KPIs for our 2030 targets to realize the TOWANOWA Concept,and are working to steadily achieve our goals.

* Retread Tires: tires that are reused by replacing the tread rubber (the part in contact with the road surface) that has been worn away by driving, thereby restoring the tire’s functionality.

Japan Retreaders’ Association website (Japanese only)

As a Company that Uses Natural Rubber, a Gift from Nature

The use of natural rubber, a natural capital, as a raw material for products is one of our business risks. Last year, based on the Taskforce on Nature-related Financial Disclosures (TNFD) recommendations, we conducted an analysis of the impact of the Group’s operations on nature.
Expansion of natural rubber plantations has caused deforestation in some parts of the world, which have become hotspots. Since our analysis confirmed that the Tire Business in particular is highly dependent on and affected by nature, we plan to conduct a more detailed analysis that includes the Sports Business and Industrial Products Business.
Furthermore, with regard to the procurement of natural rubber, we believe that human rights due diligence efforts are important due to risks including child labor on the plantations. As we work to strengthen supply chain management, we clearly state our policy of respect for human rights in our Procurement Guidelines and strive to ensure that all suppliers understand and practice it. In January 2021, we began using a monitoring tool provided by EcoVadis SAS to evaluate our suppliers in terms of human rights, governance, and the environment.
The natural rubber supply chain is very complex. Therefore, it is a challenge to secure the traceability^* of producers, including smallholders. By using tools such as RubberWay®, we are working to make natural rubber procurement more sustainable.

* The process of tracking and making traceable records of manufacturing and processing activities, as well as the receipt and placement of orders, to clarify when, where, and by whom a product was produced.

As a Company that Handles Tires

One of the risks we are aware of is the problem of particles emitted from the interface between tires and road surfaces (TRWP^*) while driving. In the future, as the number of EVs increases and gasoline-powered vehicles decreases, and as the regulations on exhaust emissions from vehicles starts to apply in the EU (Euro 7), vehicle exhaust emissions will be expected to be on a downward trend. As a result, efforts to reduce the environmental impact of particles generated from brake pads and interface between tires and road surfaces will become even more important. We have been working to reduce TRWP emissions by improving the wear resistance of our tires, and we will continue to promote these efforts in cooperation with industry associations.
We will use sensing technologies to monitor tire wear conditions and feed the data back into development to create tires with an even lower environmental impact.

* Tire and Road Wear Particles

Raising the Level of Technical Development and Contributing to the Solution of Social Issues

Creating environmentally friendly products will not solve all social issues. For example, reducing the amount of raw materials used in tires to make them lightweight can improve environmental performance while reducing costs. Despite these benefits, weight reduction can also have negative effects such as increased noise when driving and shorter product life due to shallower grooves.
In response to these issues, we have experience in developing ENASAVE 100, a 100% fossil resource-free tire, so we believe that we have a solid foundation for innovation to solve social issues. Furthermore, in addition to utilizing sensing technologies, which is one of our strengths, we would like to contribute to solving social issues by raising the level of technical development while investing in various simulation and analysis tools.
We are currently interviewing employees to develop a long-term strategy for 2035. When talking about their vision for the Company 10 years from now, we often hear employees express their desire to become an environmentally friendly company. To evolve into the “environmentally friendly company” that our employees envision in 10 years, we will steadily pursue our goals while making timely and appropriate business decisions that are focused on our mid- to long-term goals.