Identifying Hotspots and the Disclosure of Non-financial Information: Mitsubishi Shokuhin Co., Ltd.

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Published

23 January, 2024

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  • Mitsubishi Shokuhin intended to actively disclose non-financial and financial information. 
  • Measuring Scope 3 emissions, a type of non-financial information, was an important theme that needed to be addressed early on.
  • Terrascope helped them classify and measure a large amount of emissions data.

Mitsubishi Shokuhin is a food trading company that deals mainly in processed foods, low-temperature foods, alcoholic beverages, and sweets. With the purpose of contributing to the realisation of a sustainable society through the food business, the company is pursuing its role as a sustainable food lifeline, keeping pace with various changes in the business environment.

Active disclosure of non-financial information

Mitsubishi Shokuhin has set 2030 targets along with sustainability priority challenges to realize a sustainable society, and is working to reduce CO2 emissions to realize carbon neutrality in 2050. It has voluntarily identified Scope 1 and Scope 2 emissions and has actively disclosed its current emissions and progress made toward its reduction targets in the Integrated Report and other documents. One risk that may materialize with climate change is the “introduction of carbon pricing.” Based on an analysis that carbon pricing may have a large effect on food supply chains, the company concluded that the visualizing Scope 3 emissions early on would help with the building of a sustainable supply chain, and has been working with Terrascope to measure Scope 3 emissions, aiming for disclosure by the end of FY2023.

Massive amounts of Scope 3 data

The amount of CO2 emitted indirectly by a company, specifically by the supply chain (Scope 3) is typically said to account for over 80% of the total CO2 emissions (Scope 1 + 2 +3) of a company. It was believed that the data for measuring Scope 3 was scattered across the company and that the amount of data was significant. Terrascope has studied measurement methods from transaction data collection methods, integration of different data formats up to visualization, together with major manufacturers and retailers across Japan. For example, Mitsubishi Shokuhin has over 240,000 SKUs which stand for stock keeping units, and each SKU is managed differently (e.g., at room temperature or at low temperature). Terrascope has been working with Mitsubishi Shokuhin to sort this vast amount of data with AI.

Measuring Scope 3 and identifying hotspots

Terrascope is a SaaS carbon measuring/management platform and is an ideal tool for measuring and managing Scope 3 emissions holistically. Mitsubishi Shokuhin and Terrascope first classified the over 240,000 SKUs into around 2000 similar product categories, then calculated the carbon foot print of each category based on the representative packaging and ingredient composition of each product category. This data was entered into Terrascope and visualized as shown below.

  • Scope 3 emissions accounts for around 99% of Mitsubishi Shokuhin’s overall emissions (Scope 1 + 2 + 3).
  • Over 80% of Scope 3 emissions are from Category 1 “Purchased goods and services.
  • By category, the frozen foods and alcoholic beverages product categories emits the most CO2.
  • The next largest share consisted of Category 4 “Upstream transportation and distribution, followed by Category 12 “End-of-life treatment of sold products” or emissions from the treatment of food waste and plastic packaging.

Effects and future plans

Through Terrascope’s functionality, Mitsubishi Shokuhin was not only able to visualize Scope 3 on a corporate level, but also to identify hot spots on a product category level. We hope that in addition to serving as a guide when setting reduction targets in the future, that the know-how including templates created during this measurement will help reduce the manpower and time needed for calculating emissions and that an even more in depth measurement will be taken for FY2022 and beyond. Furthermore, the company plans to switch over to primary data based on the hotspots identified, and disclose data based on even more detailed analysis methods to further pursue ESG value.