The IHI Group has positioned addressing climate change as one of its material issues and is doing everything possible to accomplish this. Climate change has an enormous social and economic impact and is a vital issue for companies to address in order to realize sustainability, and one that the IHI Group believes it should focus on.
The Group supports the goal set by the Paris Agreement of holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels and has adopted the IHI Carbon-Neutral 2050 plan. The Group has developed a climate transition plan, under which it aims to achieve effectively zero greenhouse gas (GHG) emissions throughout its value chain by 2050.
The Group seeks to contribute to reducing GHG emissions throughout society, to this end, engages with Japanese government agencies on climate change-related matters, provides policy recommendations through industrial associations, and promotes the setting of appropriate rules at the international level. The Group actively participates in third-party initiatives related to climate change policies, regulatory systems, and market development. By aligning the insights gained from these activities with the IHI Group’s climate transition plan and reflecting them in its business portfolio and technology development, the Group ensures consistency between external developments and its corporate strategy.
Participation in Third-Party Initiatives
The IHI Group participates in climate change related initiatives. Participation in such initiatives is decided on by the Management Committee and the Board of Directors.
TCFD
The IHI Group became a signatory to the Task Force on Climate-related Financial Disclosures (TCFD) by resolution of the Board of Directors in May 2019. This framework plays a role as a tool to formulate strategies able to strengthen risk management and cultivate business opportunities.
GX Future Consortium
The IHI Group endorsed the GX League Basic Concept announced by Japan’s Ministry of Economy, Trade and Industry in February 2022 and joined the GX League in April 2023. In April 2026, the GX Future Consortium was established to take over the functions of the GX League and the TCFD Consortium, and the IHI Group transitioned to membership in the new consortium.
The IHI Group is a member of various industry associations relating to climate change. The Group has set targets that align with or surpass the goals set in climate change response measures formulated by government agencies and industry organizations, and is implementing activities aimed at carbon neutrality. In cases where it is deemed that there is a wide disparity between the strategy adopted by a given industry organization and the goals of the Paris Agreement, the Group will consider the best way to respond to this, which may include leaving the organization.
Clean Fuel Ammonia Association (CFAA)
As a member of the Board of Directors of the Clean Fuel Ammonia Association (CFAA), IHI is working toward the social implementation of fuel ammonia. The CFAA aims to build a value chain centered on the use of clean ammonia as a fuel and raw material. IHI aims to contribute to the realization of a low-carbon society by formulating strategies, developing related technologies, and promoting initiatives for their implementation in society.
IHI participates in international symposia and seminars held by the CFAA to obtain new knowledge and exchange information. It also undertakes activities in collaboration with the CFAA that are directed toward realizing widespread adoption of fuel ammonia and building the value chain.
Carbon Recycling Fund Institute
As a corporate member of the Carbon Recycling Fund Institute, IHI is involved in promoting carbon recycling innovation. It aims to simultaneously address the problem of global warming and improve global access to energy; by providing grants for research relating to carbon recycling and undertaking awareness raising activities, its goal is to support carbon recycling innovation.
Besides its involvement in the Institute’s research grant activities, IHI also participates actively in the Carbon Recycling University* activities. In addition to building relationships with external partners through the Institute, IHI is also helping to support the development of advanced carbon recycling technologies.
Carbon Recycling University: A program that helps younger employees of member companies of the Institute to develop a problem-solving mindset.
Activities with International Standardization Organizations
The IHI Group is involved in activities that relate to putting in place the international rules needed for solving global problems, and as part of these efforts, the Group is engaged in standardization activities with the International Organization for Standardization (ISO). With the aim of ensuring appropriate use of fuel ammonia for boilers used in electricity generation, the Group has participated, alongside other companies and the CFAA, in the joint development of a Technical Specification* (ISO/TS 21343) which specifies implementation procedures and reporting processes for exhaust gas environmental performance evaluation testing; IHI served as the project leader with the cooperation of Professor Kobayashi of Tohoku University. This Technical Specification was formally issued on January 14, 2025.
Technical Specification (TS): A Technical Specification addresses work still under technical development, or where it is believed that there will be a future, but not immediate, possibility of agreement on an International Standard.
Activities in the International Aviation Industry
To strengthen its global carbon neutrality initiatives, IHI joined the International Aerospace Environmental Group (IAEG), a nonprofit organization that promotes sustainability activities within the international aviation industry, in April 2025. IAEG is a nonprofit organization comprising aerospace companies from around the world and is dedicated to collaboratively developing and sharing innovative solutions to address environmental challenges facing the industry. Through cooperation among aviation companies, IAEG works to establish industry-wide standards and provide practical solutions that can be applied to key environmental issues across the sector.
The IHI Group supports laws, policies, regulations, and so on relating to climate change and responds to them appropriately at each domestic and overseas business site. In particular, IHI is a specified business operator under the Act on Rationalization of Energy Use and Shift to Non-fossil Energy (the Energy Conservation Act), and as such, is obligated to make efforts to reduce energy consumption intensity by an average of 1% per year. In the IHI Group Environmental Action Plan, which is formulated every three years, the Group sets reduction targets in line with the Energy Conservation Act. By implementing energy-saving measures at each site, the entire Group is promoting the efficient use of energy.
Under its environmental governance framework, the IHI Group has established dedicated subcommittees on climate change to formulate policies, develop strategies, identify risks, and consider and promote measures to address them. While these activities were previously conducted through task forces, the Group transitioned to a subcommittee structure to enhance continuity and execution of its initiatives.
Currently, the Group is advancing efforts to achieve carbon neutrality across its entire value chain through the following subcommittees: the Carbon Neutrality Subcommittee, which is responsible for planning and implementing carbon neutrality initiatives at production plants across the Group’s business areas; the Climate Transition Plan Subcommittee, which is responsible for developing the Group’s climate transition plan; and the Procurement Decarbonization Subcommittee, which is responsible for reducing Scope 3 Category 1 GHG emissions.
The IHI Group supports the Paris Agreement’s target of limiting the global average temperature increase to well below 2°C above pre-industrial levels, and striving to limit the temperature increase to 1.5°C above pre-industrial levels. Based on this commitment, the Group has established the “IHI Carbon-Neutral 2050” initiative, under which it aims to achieve carbon neutrality across its entire value chain by 2050.
The Group aims to halve direct and indirect GHG emissions (Scope 1, 2) from its business activities compared to fiscal 2019 by fiscal 2030 and achieve effectively zero emissions by 2050. In the short-term, the Group sets targets for reducing GHG emissions and energy consumption intensity under its Environmental Action Plan, which is formulated every three years.
The Group also aims to achieve effectively zero GHG emissions released in upstream and downstream processes (Scope 3) by 2050. The Group has developed the Scope 3 Emissions Reduction Roadmap and is promoting reduction effort with a particular focus on Category 11 (use of sold products) and Category 1 (purchased products and services).
IHI Carbon-Neutral 2050
Our 2050 goal to achieve carbon neutrality throughout the entire value chain
Risk and Opportunity Due to Climate Change
The IHI Group conducted simple scenario analyses of five business domains for which the impacts of climate change are considered significant from the perspectives of transition and physical risks: the energy business, bridge and water gate business, vehicle turbocharger business, rotating machinery business, and the civil aero-engine business.
The first step set ① a carbon-neutral world as the highest transition risk and ② a world greatly impacted by climate change as the highest physical risk in our own independent scenarios drafted with reference to external scenarios created by the International Energy Agency (IEA) and Intergovernmental Panel on Climate Change (IPCC). The second step identified risks and opportunities for all five business domains. The third step assessed the impact each business has. For the assessment, the time horizons were defined as short term (one year), medium term (three years), and long term (through 2040). The fourth and last step drafted countermeasures according to our findings.
Countermeasures set to address the two extreme worlds anticipated by these IHI scenarios enhance the resilience of IHI Group businesses against future risks.
The IHI Group can also reduce risks against the harshest world facing both these scenarios (① and ②) at the same time by integrating the countermeasures for each.
The IHI Group divides the risks and opportunities identified for each of the five business domains and the countermeasures into two categories: 1. risks, opportunities, and countermeasures specific to each business and 2. risks, opportunities, and countermeasures shared across all businesses.
In the future, the IHI Group will enhance its ability to leverage scenario analyses in business strategy through efforts, such as assessing the financial impact of climate change.
The IHI Group will proactively incorporate the concepts pursued by TCFD signatories in management policies and business strategies, contributing not only to the sustainable development of our Company, but society as a whole.
Scenario Analysis Process
External reference scenarios:
A carbon-neutral world IEA 2DS (qualitative assessment based on the ETP2017 Global technology penetration in LDV stock by scenario, global electricity generation, etc.)
A world greatly impacted by climate change RCP 8.5 (qualitative assessment based on the portions relating to wind and flood damage risk of IPCC AR5 WG2)
IHI Group Scenarios
High-transition risk scenario
This scenario presents ① a carbon-neutral world where society at large shifts to mitigate climate change and stop all GHG emissions.
High-physical risk scenario
This scenario ② presents a world greatly impacted by climate change that needs to adapt to the physical impact and directly confront drastic devastation by natural disasters.
Key Risks and Opportunities under the Defined Scenarios and Related Response Measures
Category
Risk/ Opportunity
Relevant Business
Description of Risk/ Opportunity
Response Measures
1.5℃ scenarioScenario with significant transition risks (Scenario ①: A carbon-neutral world)
Policy and Legal Regulations
Risk
Common
Increase in procurement costs due to stricter environmental regulations on materials, parts, and energy
Work with suppliers to reduce and eliminate carbon emissions across the entire supply chain
Review procurement policies and specifications based on LCA
Risk
Common
Increase in operating costs due to stricter energy and GHG emissions regulations for factories, construction sites, and offices
Reduce energy use and GHG emissions by improving production and logistics process efficiency and advancing energy management
Shorten construction periods and reduce costs through labor-saving and remote operations enabled by DX and improved construction methods
Reputation
Risk
Common
Loss of order opportunities and decline in social credibility and ESG ratings due to an evaluation that climate change measures are insufficient
Proactively and transparently disclose information on performance and plans for products and services that contribute to climate change mitigation and adaptation
Clarify policies and targets through dialogue with stakeholders
Technology
Risk
Energy Rotating Machinery Civil Aero-Engines
Decline in market competitiveness and loss of sales opportunities due to delays in developing decarbonization and low-carbon technologies
Make strategic technology development investments in priority areas based on policy, technology, and market trends
Accelerate practical application of advanced technologies, such as electrification and advanced composite materials, and expand their application to products
Market
Risk
Energy Vehicle Turbochargers Civil Aero-Engines
Decrease in demand for products and services that consume fossil fuels
Accelerate practical application of fuel conversion and other decarbonization technologies and expand product lineups
Build governance and business portfolio management systems capable of responding quickly to rapid changes in market structure
Market
Opportunity
Energy Rotating Machinery Civil Aero-Engines
Increase in demand for products and services that contribute to low-carbon and decarbonized solutions
Invest in and improve productivity to strengthen manufacturing capacity for nuclear-related equipment and other products
Accelerate practical application of process gas compression technologies that promote carbon recycling and fuel conversion
Accelerate practical application of advanced technologies, such as electrification and advanced composite materials, for civil aero-engines and strengthen solution proposal capabilities
4℃ scenarioScenario with significant physical risks (Scenario ②: A world greatly impacted by climate change)
Acute and Chronic
Risk
Common
Suspension or reduction of business activities due to damage to factories, construction sites, offices, and supply chains caused by weather disasters such as typhoons and floods
Strengthen disaster prevention and mitigation measures at factories and offices, diversify critical sites, and establish alternative production systems
Strengthen supply chain resilience and develop and regularly review business continuity plans (BCPs)
Market
Opportunity
Bridges and Water Gates
Increase in demand for flood control and water utilization infrastructure to prepare for extreme weather events such as heavy rain, flooding, and drought
Provide total solutions and expand supply capacity by leveraging engineering, manufacturing, and maintenance capabilities for water gates, dam facilities, and related equipment
Acute and Chronic
Opportunity
Energy Bridges and Water Gates
Contribution to the early restoration of infrastructure damaged by weather disasters
Establish systems and processes to respond quickly to requests in the event of a disaster, including securing equipment, materials, and personnel in advance and strengthening collaboration with partner companies
Financial Impacts
IHI assesses the impacts of climate change on its business and financial performance from both transition risk and physical risk perspectives.
With respect to transition risks, the Company recognizes that, as society transitions toward net-zero emissions, demand for certain products and services that directly or indirectly consume fossil fuels may decline over the medium to long term. Conversely, demand is expected to increase in technology areas that contribute to decarbonization, including fuel conversion, the use of non-fossil fuels, and next-generation aircraft engines with enhanced fuel efficiency.
From the perspective of physical risks, the Company recognizes the risk that increasingly severe natural disasters associated with climate change could affect business continuity through damage to facilities and the suspension or reduction of operations. Conversely, the Company views the growing demand for the maintenance and enhancement of social infrastructure as a business opportunity.
In light of these risks and opportunities, the Company continues to invest in research and development in areas such as fuel conversion, the use of non-fossil fuels including nuclear energy, next-generation aircraft engines, and flood control solutions. Through these efforts, the Company is strengthening its business foundation from both climate change mitigation and adaptation perspectives.
Financial Impacts of Climate Change
Category
Transition
Physical
Risks
Decline in revenue due to reduced demand (−) As society transitions toward net-zero emissions, demand may decline for certain products and services that directly or indirectly consume fossil fuels
Impact on business continuity (−) Increasingly severe natural disasters may affect business continuity through damage to facilities and the suspension or reduction of operations
Opportunities
Business opportunities arising from decarbonization needs (+) Including fuel conversion, the use of non-fossil fuels, and next-generation aircraft engines
Growth in adaptation-related demand (+) Including the maintenance and enhancement of social infrastructure, as well as disaster prevention and flood control
Financial impacts
Financial metric affected: Revenue
Potential revenue exposure: Approximately ¥900 billion to ¥1 trillion (long-term impact range)
Revenue vulnerable to transition risks*: Approximately ¥730 billion
Response
<Key response measures common to both transition and physical risks>
Development of fuel conversion technologies
Expansion of the use of non-fossil fuels, including nuclear energy
Development of next-generation aircraft engines with improved fuel efficiency
Enhancement of solutions for social infrastructure, particularly in the areas of flood control and disaster prevention
Continued investment in research and development, particularly in the above areas (R&D expenditure: ¥39.6 billion in FY2025 [Group-wide])
Revenue vulnerable to transition risks: Revenue generated from businesses that are particularly susceptible to the impacts of transition risks.
Risk Management
In addition to short-term business risks, the IHI Group also manages sustainability-related risks that affect the medium- to long-term business environment as a risk to conducting business. In particular the IHI Group assesses the medium- to long-term impact of these risks to the Group and converts them into short-term business risks. The Group has clarified the roles and responsibilities of its Internal Audit Division, corporate divisions, business areas, and business divisions (including affiliated companies), which are managed under a multi-layered risk management framework.
Metrics and Targets
The IHI Group aims to achieve carbon neutrality throughout its entire value chain by 2050.
In fiscal 2023, the Board of Directors adopted a resolution setting a goal of halving the Group’s fiscal 2019 GHG emissions from plants, offices, and other business establishments (Scope 1 and 2) by fiscal 2030.
CO2 Emissions and Energy Consumption: Targets and Results (IHI Group Environmental Action Plan 2023 [FY2023–2025])
(Scope: IHI and consolidated subsidiaries)
FY2025 Target
KPI
FY2022 Results (Base Year)
FY2023
FY2024
FY2025
A 12,000 t-CO2e reduction in Scope 1 and 2 from those in FY2022 with capital investment
Reduced amount of GHG emissions (Scope1+Scope2)
GHG emissions 215,753 t-CO2e
Financial year target
2,000 t-CO2e reduction compared to FY2022
6,000 t-CO2e reduction compared to FY2022
12,000 t-CO2e reduction compared to FY2022
Results
211,970 t-CO2e
197,274 t-CO2e
158,073 t-CO2e
Compared to FY2022
3,783 t-CO2e reduction
18,479 t-CO2e reduction
57,680 t-CO2e reduction
Reduce energy consumption intensity by 3% in FY2025 from that in FY2022
Reduction rate of energy consumption intensity
Energy consumption intensity 17.0 TJ/10 billion yen
Financial year target
1% reduction compared to FY2022
2% reduction compared to FY2022
3% reduction compared to FY2022
Results
17.6 TJ/10 billion yen
13.6 TJ/10 billion yen
13.3 TJ/10 billion yen
Compared to FY2022
3.5% increase
19.6% reduction
21.5% reduction
“Climate Change” Targets (IHI Group Environmental Action Plan 2026 [FY2026–2028])
(Scope: IHI and consolidated subsidiaries)
Three-Year Targets
FY2026 Target
Scope 1 and 2 emissions of 150,000 t-CO2e or less (a reduction of 41% or more from that in FY2019)
Scope 1 and 2 emissions of 173,000 t-CO2e or less (a reduction of 32% or more in FY2026 from that in FY2019)
Reduce energy consumption intensity by 3% from that in FY2025
Reduce energy consumption intensity by 1% in FY2026 from that in FY2025
Formulate and implement a climate transition plan
Formulate a climate transition plan and incorporate it into business plans
Improve the accuracy of Scope 3 Category 1 and 11 emissions calculations
Obtain third-party verification for Scope 3 Category 1 emissions (FY2025 actual results), in addition to Scope 3 Category 11 emissions
Communicate GHG emissions reduction contributions achieved through products
Select products for calculating avoided emissions and establish estimation and calculation methodologies
GHG Emissions (Scope 1 and 2) and Energy Consumption
(Scope: IHI and consolidated subsidiaries)
Item
FY2022
FY2023
FY2024
FY2025
Breakdown
Third-Party Verification
Third-Party Verification
Third-Party Verification
Third-Party Verification
GHG emissions (Scope 1 + Scope 2) (t-CO2e)*1
215,753
○
211,970
○
197,274
○
158,073
○
Scope1 (t-CO2e)
61,469
○
65,033
○
57,951
○
53,942
○
CO2 (t-CO2)
60,178
○
63,393
○
56,420
○
52,455
○
CH4 (t-CO2e)
447
○ (Domestic Only)
974
○ (Domestic Only)
923
○ (Domestic Only)
808
○ (Domestic Only)
N2O (t-CO2e)
85
○ (Domestic Only)
85
○ (Domestic Only)
76
○ (Domestic Only)
202
○ (Domestic Only)
HFCs (t-CO2e)
469
○ (Domestic Only)
281
○ (Domestic Only)
443
○ (Domestic Only)
388
○ (Domestic Only)
PFCs (t-CO2e)
0
○ (Domestic Only)
0
○ (Domestic Only)
0
○ (Domestic Only)
0
○ (Domestic Only)
SF6 (t-CO2e)
290
○ (Domestic Only)
299
○ (Domestic Only)
90
○ (Domestic Only)
90
○ (Domestic Only)
NF3 (t-CO2e)
0
○ (Domestic Only)
0
○ (Domestic Only)
0
○ (Domestic Only)
0
○ (Domestic Only)
Scope 2 (market-based) (t-CO2)
154,284
○
146,937
○
139,322
○
104,130
○
GHG emissions intensity (t-CO2e/100 million yen)*2
15.9
─
16.0
─
12.1
─
9.6
─
Energy consumption (TJ)*1
2,294
○
2,322
○
2,218
○
2,187
○
Fuel consumption (TJ)
1,019
○
1,070
○
993
○
977
○
Electricity consumption (TJ)
1,230
○
1,184
○
1,146
○
837
○
Heat consumption (TJ)
0
○
0
○
0
○
0
○
Renewable energy used (TJ)
45
○
69
○
79
○
374
○
Energy consumption intensity (TJ/10 billion yen)*2
17.0
─
17.6
─
13.6
─
13.3
─
The total value for each item is rounded off and may not match the figures in the breakdown.
The denominator of the intensity is net sales revenue.
The IHI Group calculated its Scope 3 emissions based on the GHG Protocol and the Ministry of the Environment Guideline*. Within Scope 3, emissions from category 11 (use of sold products) were the highest, followed by category 1 (purchased products and services).
A basic guideline for calculating GHG emissions for organizations across the supply chain.
(Unit: t-CO2e)
Item
Calculation Methods
Scope of Calculation
Emissions
FY2022
FY2023
FY2024
FY2025
Category
Third-Party Verification
GHG emissions (Scope 3) total
184,475,000
403,575,000
357,089,456
341,256,290
─
1. Purchased goods and services
Calculation based on expenditures
IHI and consolidated subsidiaries
4,665,000
5,130,000
5,455,000
2,904,352
〇
2. Capital goods
Calculation based on amount of capital investment
IHI and consolidated subsidiaries
205,000
239,000
326,000
327,000
─
3. Fuel and energy-related activities not included in Scope 1 or Scope 2
Calculation based on consumption of various types of energy
Domestic consumption of electric power and city gas only
13,000
13,000
13,000
10,000
─
4. Upstream transportation and delivery*1
Calculation based on transportation amounts
IHI and some domestic consolidated subsidiaries
1,000
1,000
5,000
27,000
─
5. Waste generated in operations
Calculation based on waste generated
IHI and consolidated subsidiaries
8,000
9,000
9,000
9,000
─
6. Business travel
Calculation based on amounts of business travel expenses
IHI and consolidated subsidiaries
14,000
14,000
14,000
14,000
─
7. Employee commuting
Calculation based on amount of commuting expenses
IHI and consolidated subsidiaries
4,000
4,000
4,000
4,000
─
8. Upstream leased assets
Calculation included in Scope 1 and 2
─
─
─
─
─
─
9. Downstream transportation and distribution
Not covered*2
─
─
─
─
─
─
10. Processing of sold products
Not covered*3
─
─
─
─
─
─
11. Use of sold products
Calculation based on energy consumption by products, GHG emissions intensity takes into account future changes based on scenarios from the government and industry organizations*4
IHI and consolidated subsidiaries
179,565,000
398,165,000
351,263,456
337,960,938
○ (The verification scope is 99.8% based on emissions.)
12. End-of-life treatment of sold products
Not covered*5
─
─
─
─
─
─
13. Downstream leased assets
Calculation included in category 11
─
─
─
─
─
─
14. Franchises
Not covered*6
─
─
─
─
─
─
15. Investments
Not covered*7
─
─
─
─
─
─
The calculation method through fiscal 2023 is based on weight, distance, and energy for each means of transportation. In addition, the scope of calculation through fiscal 2023 is IHI Corporation.
Many products are excluded because they are rarely transported after delivery and installation and as a result, emissions are minimal.
In many instances, finished products are delivered, and even if there are parts, the emissions from assembly and so on are minimal, and as a result, they are excluded.
For calculation method for civil aero-engines, please refer to the reference material below.
Many products are made of metal and are recyclable, thus the final disposal volumes are minimal and the amount of waste is small, and have been excluded as a result.
The IHI Group does not use a franchise format, making it ineligible.
In Ministry of the Environment materials (frequently asked questions and answers on supply chain emissions calculations), category 15 applies to private financial institutions, and accordingly, is excluded.
Mitigating Climate Change (Initiatives to Become Carbon Neutral)
The IHI Group aims to make its complete value chain carbon-neutral by 2050. We are striving to reduce direct and indirect (Scope 1 and 2) GHG emissions from our business activities as well as Scope 3 emissions from the upstream and downstream processes in our value chain.
Reduction of Scope 1 and 2 Emissions
In its business and production activities, the IHI Group is working to reduce CO2 emissions from factories, offices, and other facilities by combining initiatives to improve energy-use efficiency with efforts to promote the use of lower-carbon energy sources.
Its energy-efficient initiatives not only enhance operations but also make all the necessary capital investments. The Group has put in place energy management standards to drive these operational improvements. These standards aim to provide ideal operation conditions and criteria to review operational management. These standards also become a knowledge base to conduct training on energy efficiency through outside experts in an effort to heighten the management quality of Managers. The Group’s capital investments systematically renew aged equipment with energy-efficient equipment and adopt renewable energy sources. To promote the installation of equipment that contributes to reducing CO2 emissions, including energy-efficient equipment, the Group has established an Internal Carbon Pricing system. Under this system, the value of CO2 reductions is calculated by multiplying the projected reduction in CO2 emissions resulting from the installation of eligible equipment by the internally established carbon price of ¥15,000 per ton-CO2e. The resulting CO2 reduction value is then deducted from the investment cost when evaluating the effectiveness of the capital investment. This system has been applied to the facility construction plan since fiscal 2023. Another important aspect to reducing CO2 emissions is shipping and transport. The IHI Group strives to promote modal shifts through greater load efficiency and active use of marine vessels.
Scope 1 and Scope 2 Emissions Reduction Roadmap
Reducing Scope 3 Emissions
The IHI Group has devised a roadmap for reducing its Scope 3 emissions, with the aim of achieving net-zero Scope 3 emissions by 2050. In line with this roadmap, the Group is advancing reductions in GHG emissions throughout the life cycle of its products, from material procurement, design, and manufacturing to use by customers, while working steadily to reduce Scope 3 emissions. The Group is also contributing to the decarbonization of society as a whole through businesses such as building a fuel ammonia value chain.
Reducing Scope 3 Category 11 Emissions
The majority of the IHI Group’s Scope 3 emissions fell under category 11 (use of sold products) with coal-fired power plant boilers accounting for most of these emissions during fiscal 2023. However, new boiler construction completed by fiscal 2025, with emissions expected to decrease significantly from fiscal 2026 onwards. The Group also aims to significantly reduce emissions from other products included in category 11 by 2050 by converting to clean energy and improving energy consumption efficiency.
Regarding civil aero-engines, which serve as the IHI Group’s main product, the Group is working with business partners to make its entire supply chain, including material procurement, carbon neutral. Additionally, the Group is making efforts to improve conventional aero engine fuel efficiency and develop revolutionary aero engines with the goal of improving aircraft energy efficiency as a whole. Moreover, the Group will be focusing on developing and expanding the use of sustainable aviation fuel (SAF) production technology, aiming for carbon neutrality across its entire value chain. For other products as well, the Group is advancing higher performance and greater efficiency while promoting the transition to clean energy.
In particular, the IHI Group has taken an interest in fuel ammonia. The Group plans to build a value chain by leveraging its strengths throughout each stage in the process, from fuel manufacturing, receiving, storage, and utilization. This will be beneficial toward expanding the use of fuel ammonia and contributing to reducing GHG emissions among society as a whole.
Reducing Scope 3 Category 1 Emissions
To reduce emissions in Scope 3 Category 1 (purchased products and services), the IHI Group promotes CSR procurement. The Group actively engages suppliers that demonstrate strong environmental performance and prioritize the purchase of products with lower CO2 emissions generated during the manufacturing process. CSR procurement refers to procurement activities that, in addition to meeting fundamental procurement requirements, give due consideration to human rights, labor practices, occupational health and safety, environmental protection, and information management.
The IHI Group believes that increasing the proportion of primary data, which is emissions data obtained directly from suppliers, is essential for improving the accuracy of Scope 3 Category 1 emissions calculations. To increase the proportion of primary data globally in an efficient and standardized manner, the Group has introduced EcoVadis' Carbon Action Manager (CAM). CAM is a platform for collecting, comparing, and managing primary data from suppliers on GHG emissions, emissions reduction targets, and related information. Specifically, GHG emissions are calculated at the purchase-order level by combining procurement transaction data with either publicly available emission factors by product category or supplier-specific revenue-based emission factors derived from EcoVadis metrics data. By prioritizing the use of EcoVadis metrics data, the Group will continue to increase the proportion of primary data used in our calculations.
Scope 3 Emissions Results and Projections
Scope 3 Emissions Reduction Roadmap
Progress of Initiatives to Reduce Scope 3 Emissions
Preparations for Disasters to Continue Business Operations
The IHI Group established rules on organizational structures and actions to be taken in normal times and during disasters and makes preparations for the occurrence of large-scale earthquakes, typhoons, and other wind and flood disasters.
Preventing and Mitigating Disasters through Products and Services
The IHI Group seeks to create safe, secure, and livable communities and is developing infrastructure that is resilient against natural disasters and economical and building systems that integrate disaster and damage forecasts that can minimize human casualties with infrastructure.
As infrastructure development, the Group is conducting timely and appropriate maintenance projects that leverage its advanced maintenance knowledge, sensing technology, and monitoring technology for infrastructure with a focus on bridges. To minimize human casualties and economic losses from disasters, the Group forecasts disasters based on meteorological information and disaster-related sensing data and performs integrated flood control management that optimally controls regional infrastructure (river management facilities including dams, water gates, and drainage pump stations, and agricultural irrigation facilities such as sluice gates).
In addition, the Group contributes to the rapid restoration of normal lives by providing products and services that are useful for recovery from disasters.
