Biodiversity Initiatives

The Group recognizes that engagement with those particularly affected by environmental degradation and pollution, such as indigenous peoples and local communities, is an essential part of coexisting with nature. We consider this engagement to be one of the key themes in the analysis of nature-related risks and opportunities.

■ Approach and Initiatives for the Human Rights of Indigenous Peoples and Local Communities

The Group’s business activities have an impact on a range of important human rights issues. One of these is respect for the lands and rights of indigenous peoples, and this is clearly stated in our Human Rights Policy. As part of our human rights due diligence, we evaluate the actual and potential risks as well as relevant management systems regarding indigenous lands and rights. We also have a process for investigating corrective measures as necessary.

For details, please refer to “Basic Approach to Human Rights.”

Basic Approach to Human Rights

■ Supply Chain Approach and Initiatives

Based on our Sustainable Procurement Policy, we have created the Cosmo Energy Group Sustainable Procurement Guidelines. They outline specific efforts to be carried out for the supply chain in nine areas: (1) Fair trade and ethics, (2) Human rights and labor, (3) Disaster prevention and safety sanitation, (4) Conservation of environment, (5) Quality and product safety, (6) Information security, (7) Contribution to society, (8) Business continuity plan, and (9) Supplier management.

In the area of conservation of environment, we share our biodiversity initiatives and ask that our business partners (suppliers) understand and support them. We also require them to take action in accordance with our guidelines.

Please refer to the link below for more information.

Supply Chain Management and Sustainable Procurement

■ Management and Reporting System

Various investigation results based on the Sustainable Procurement Guidelines are reported to the Sustainability Strategy Committee, including findings from biodiversity risk assessments, human rights due diligence activities, and supplier assessments. Information deemed especially important is also reported to the Board of Directors.

■ Risk Management

The Group has positioned “strengthening of Group risk management” as one of its material issues. It has established a system to identify all potential risks relating to business activities, appropriately manage various risks, and minimize losses. We are striving to enhance risk management using a cycle of planning, implementation, evaluation, and corrective action.

■ Management System and Processes

Please refer to the link below for more information on risk management at the Cosmo Energy Group.

Risk Management

■ Business Risks Related to Material Issues

To enable investigation of response measures for the Group’s nature-related material issues, we needed to perform location analysis. Based on their positions in the value chain, we identified operational sites with high potential for material issue risks, and conducted risk assessments for those sites.

As part of material issue analysis, we conducted a location analysis using the scenario of a crude oil or petroleum spill at a major site operated directly by the Group. This was based on the assumption that such an oil spill would have an especially large business impact, making it a significant risk.

In addition, we excluded the two material issues of “climate change” and “extraction and depletion of natural resources” from the location analysis because there are no regional differences and freshwater intake is low for relevant sites.

Value Chain and Nature-Related Material Issues and Business Risks

■ Specification of Priority Locations for Material Issues

When assessing the impact of a potential oil or petroleum spill, we checked for areas of biodiversity importance within a radius of 200 kilometers from the Group’s main offshore oil fields, and within 30 kilometers of our coastal operation sites in Japan.

Coastal and Offshore Sites

Using the IBAT biodiversity risk measurement tool and the marine habitat distribution tool Ocean+ Habitats,⁴ we assessed our biodiversity risks and conducted a priority location analysis of areas deemed to be particularly susceptible to natural impacts. As a result, we found that the areas surrounding six Group sites, one located off the coast of the Emirate of Abu Dhabi, as well as others in Hokkaido, Chiba Prefecture, Mie Prefecture, and Osaka Prefecture, include some areas of biodiversity importance.

4. Ocean + Habitats: An online provider of information on marine habitats worldwide, including their health, distribution, and recent changes. It also offers practical data useful for the conservation and restoration of marine ecosystems./span>

Location Analysis Examples (IBAT)

Inland Sites

Using the biodiversity risk measurement tool, IBAT, and the water risk assessment tool, Water Risk Filter,5 we evaluated nature-related material issues for sites directly operated by the Group and identified our priority locations. This was done based on information such as areas of importance for biodiversity and surrounding water pollution levels.

As a result, we determined that none of our inland sites have any areas of importance for biodiversity within their vicinity.

5. Water Risk Filter: An online tool developed by the World Wide Fund for Nature (WWF) and a German company to evaluate water risks near corporate sites

Based on the above results, six sites, including the area off the coast of the Emirate of Abu Dhabi and five sites within Japan, were identified as priority locations. This was due to the presence of priority areas in terms of biodiversity, water pollution, soil pollution, and coral and mangrove habitats.

Evaluation Based on Value Chain Location Analysis

Note: Key Biodiversity Area (KBA): Important area for biodiversity conservation

■ Responding to Material Issues

At the six sites identified as priority locations, we assessed the risk of environmental impact from an oil spill, which would have a large impact on society and consequences for business continuity. We confirmed that the sites have already implemented various measures at this stage, including impact mitigation strategies based on past incidents and spill prevention measures. If any changes occur in operations or the surrounding environment going forward, we will consider additional response measures as necessary.

■ Measures for the Renewable Energy Business

In the renewable energy area, Cosmo Eco Power, which operates the Group’s wind power business, conducts legally required environmental assessments before starting any projects. After operations begin, follow-up surveys are carried out and environmental management is promoted according to the results of these assessments.

Based on this, we believe that our nature impact risks have been mitigated. If necessary, however, we will consider additional location analysis, and expand the scope of the business impact analysis.

■ Efforts to Help Achieve International Targets

Cosmo Energy Holdings has declared its support for the Keidanren Declaration for Biodiversity and Guideline. To fulfill the role of companies set out in this guideline, we are taking action to address the nine areas indicated.

Cosmo Energy Holdings joined the TNFD Forum in October 2023 and the 30by30 Alliance for Biodiversity launched by Japan’s Ministry of the Environment in November 2023.

The term “30 by 30” refers to the goal of effectively conserving 30% of the planet’s terrestrial and marine habitats by 2030. This is a nature-positive initiative that aims to halt the loss of biodiversity and to ensure a net positive impact on the natural environment.
Through our participation in this alliance, we will step up our efforts to conserve biodiversity and natural capital in order to help achieve the 30 by 30 goal.

We will also consider setting indicators and targets that are aligned with the TNFD’s core global dependency and impact indicators.