TOKYO -- With the Paris Agreement on climate change coming into effect and global investors becoming increasingly mindful of social responsibility policies, more and more Japanese companies are making the most of emissions trading, with Sony and construction company Shimizu the most recent examples.
Sony expects to buy credits worth some 70,000 tons of carbon dioxide, or just under 10% of the total emissions at its domestic offices and factories for the year ending March 2021. The company will make the purchase through various mechanisms, including the Japanese government-managed J-Credit Scheme. The total amount spent will likely run to several million dollars.
When a company buys carbon credits, it is considered to have reduced emissions by an equivalent amount.
World Bank statistics show that the global carbon-credit market came to $34 billion in 2015. Japan, however, contributed a mere 46.8 billion yen ($425 million), according to the country's Environment Ministry.
Shimizu has gone a step further and nominally achieved carbon neutrality for the year ended in March at its more than 2,000 domestic locations.
The company was able to cut some 30,000 tons of emissions at its overseas operations, allocating the reduction to offsetting domestic emissions through the U.N.'s Clean Development Mechanism. Shimizu is committed to pressing ahead with the scheme in fiscal 2017.
Global institutional investors are increasingly looking at environmental, social and governance criteria in screening their targets. This has led to companies like Osaka Gas and construction company Obayashi to also begin emissions trading.