Guidance for Encouraging Japanese Companies to Address International Initiatives on Climate Change Formulated

1. Background

Recent international initiatives on climate change, (e.g., CDP, RE100 and SBT) require that global companies disclose information on their measures against climate change to participate, and the influence of such initiatives is growing. In response to the movement, Japanese companies are also required to disclose this kind of information. They recommend companies utilize the private standards called “GHG protocols” in calculating and reporting their GHG emissions, and these standards are becoming global.

However, the number of Japanese companies calculating their GHG emissions based on an accurate understanding of the GHG protocol is estimated to be relatively small. In addition, as seen by some consumers’ comments that they have no idea how to either procure renewable energy or internationally claim the value thereof for themselves, Japanese companies are facing difficulties in obtaining sufficient, well-organized information that would allow them to procure renewable energy and receive international recognition for their environmental purchasing practices.

In light of this situation, in October 2018, METI established a Study Group on Encouraging Japanese Companies to Address International Initiatives on Climate Change and, since then, the study group has been holding discussions on approaches for encouraging Japanese companies, under the existing Japanese systems, to calculate their GHG emissions that meet the international initiatives on climate change and to claim the renewable energy value.

Based on the discussion results of the study group, METI formulated Guidance related to “Encouraging Japanese Companies to Address International Initiatives on Climate Change: - Supporting Companies Making Use of Renewable Energy in Japan under Scope 2 Guidance of the GHG Protocol –”.

2. Overview of the guidance

The guidance aims to: help Japanese companies proactively engaging in measures against global warming or utilization of renewable energy to receive favorable assessment from global investors and other stakeholders; and promote such measures and contribute to expanding investment in renewable energy in Japan. To these ends, METI formulated guidance consisting of six chapters as below.

Chapter 1 (Introduction)

This chapter explains the background to the formulation of the guidance, the purpose thereof, target users and other information.

Chapter 2 (Scope 2 Guidance of the GHG Protocol)

This chapter provides an overview of Scope 2 Guidance of the GHG Protocol, an approach to calculating GHG emissions, which is recommended by international initiatives.

Chapter 3 (Approach to following Scope 2 Guidance in calculating scope 2 GHG emissions)

This chapter explains the approach that consumers should take under the existing Japanese systems to calculating scope 2 GHG emissions that meets the standards of Scope 2 Guidance of the GHG Protocol.

Chapter 4 (Procurement of renewable energy (electricity) and claiming of the value thereof)

This chapter describes: the relationships between international initiatives that involve receiving credit in the form of certificates for corporate use of renewable energy and other measures against climate change and domestic certificates or other efforts which involve the disclosure of information on such efforts by companies, and approaches for consumers to procuring renewable energy under the existing Japanese systems.

Chapter 5 (Points to be noted in creating and transferring the renewable energy certificates)

This chapter provides helpful information for consumers who intend to create and/or transfer such certificates.

Chapter 6 (Conclusion)

This chapter explains that METI will periodically revise the guidance based on changes in trends of renewable energy or revisions of the related rules or systems.

Division in Charge

Environmental Economy Office, Industrial Science and Technology Policy and Environment Bureau