Sumitomo Faces Shareholder Revolt Over Empty Climate Action Rhetoric

Mighty Earth Report Underscores Investor Concerns at Fossil Fuel Dependence

UPDATE: March 2022:
Sumitomo Corporation updated its climate policy to eliminate the loophole that would have allowed them to construct the Matarbari 2 power plant. Mighty Earth applauds this development and urges them to hasten its withdrawal from coal power generation globally.

UPDATE: June 2021

At Sumitomo Corporation's 2021 annual general meeting, 20% of shareholders, representing an estimated $2.53 billion in shares, voted in defiance of management and supported the resolution on climate change.
While it was positive to see Sumitomo respond to pressure and announce a shift away from the coal and natural resource side of the business and towards renewable energy, much more needs to be done to be consistent with the Paris Agreement.
Investors need to push Sumitomo to rule out involvement in the Matarbari 2 coal plant in Bangladesh, exit from all coal generation globally by 2040 (not the late 2040s), end its involvement in wood biomass, and adopt a no deforestation ("NDPE") policy. See our report for our full recommendations for Sumitomo regarding climate change.

Read the report

(Washington D.C) –Japanese conglomerate Sumitomo Corporation will face unprecedented investor pressure at its Annual General Meeting on June 18 for its failure to take adequate steps to reduce its massive global carbon emissions footprint, the Washington, D.C. environmental campaign organization Mighty Earth said today.  That pressure comes in the form of the first-ever climate resolution targeting a Japanese trading company by shareholders demanding that the firm align its strategies with the objectives of the 2015 Paris Agreement. The Paris Agreement aims to limit global warming to well below 2 degrees Celsius, and pursue a limit of 1.5 degrees Celsius, compared to pre-industrial levels.

The resolution reflects growing investor impatience with companies failing to implement substantive climate action policies. The resolution comes on the heels of last year’s resolution at Mizuho Financial Group and comes just ahead of a similar resolution at Mitsubishi UFJ Financial Group later this month.

A Mighty Earth report released today underscores the urgency of that shareholder resolution by detailing Sumitomo’s deep involvement in the dirtiest and most environmentally destructive forms of energy production across its global operations. The report, “Smokescreen: Sumitomo’s ‘Carbon Neutral’ Failures,” reveals how Sumitomo is one of the chief industrial facilitators of Japan’s addiction to coal through business lines ranging from ownership of massive coal mines to owning and constructing highly polluting new coal-burning power plants in Southeast Asia, to importing wood to be burned in coal plants.

“Sumitomo is a company at the center of global coal and biomass networks that mine, chop, finance, ship and burn the most destructive fuels on earth,” said Roger Smith, Mighty Earth’s Japan Project Manager.” “We’re starting to see shareholders question Sumitomo Corporation’s environmentally-friendly platitudes about achieving ‘carbon neutrality,’ in three decades’ time while simultaneously laying plans to continue highly-polluting fossil fuel operations for another twenty plus years. Sumitomo needs to adopt a stringent climate plan that quickly moves the company away from fossil fuels and towards clean, renewable energy.”

In May 2021, Sumitomo updated its climate plan to meet its professed goal of “contributing to addressing the many issues related to climate change mitigation and the realization of a carbon-neutral society.” But the new report lays out how the actual climate policy is still far from Paris-aligned and allows the firm to burn forests for fuel, start construction of two new coal power plant units in Bangladesh, increase the share of natural gas in its portfolio, operate thermal coal mines until 2030, and run coal power plants until the late 2040s. Sumitomo continues to rely heavily on imported forest biomass despite its high near-term carbon emissions and lacks a no deforestation policy with safeguards against degrading sensitive forest ecosystems, including those in North America.

While little known outside Japan, the company has begun to dramatically increase imports of wood pellets from the U.S. and Canada as “biomass fuel” where wood is burned in power plants to produce electricity. A Sumitomo pellet-producing company recently faced criticism for its plans to log old-growth forests in British Columbia, and Sumitomo’s chief supplier in the Southeastern United States uses whole trees from already distressed ecosystems.

With wood pellet production in both the U.S. and Canada rapidly increasing, and Japan serving as the world’s fastest-growing market for pellets, scientists have sounded the alarm. This February, 500 academics wrote an open letter to President Biden, Prime Minister Suga, and other world leaders to warn them against shifting from burning fossil fuels to burning trees stating, “Trees are more valuable alive than dead both for climate and for biodiversity. To meet future net-zero emission goals, your governments should work to preserve and restore forests and not burn them.”

That message is echoed by Meg Fukuzawa of the environmental finance organization Market Forces. “We are at a critical point where near-term targets are critical to reaching the goals of Paris, and Sumitomo’s are clearly insufficient,” Fukuzawa said. “Sumitomo’s plans are not only catastrophic to the climate, but investors should be worried about the possibility of finding themselves exposed to stranded assets if Sumitomo does not phase-out of fossil fuels on Paris-aligned timeframes.”

Not only do these projects have an appallingly-high environmental price, but Sumitomo is also paying a financial cost for its refusal to shift its operations to more environmentally friendly production modes. In FY 2020, Sumitomo Corporation lost ~$236 million (USD) on coal power in Australia, ~$73 million (USD) from sales of Marcellus and Eagle Ford oil and natural gas projects in the US, and ~$491 million (USD) related to costs and delays constructing power plants, including Matarbari 1 in Bangladesh. These losses constituted more than half of Sumitomo’s overall losses of ~$1.4 billion (USD) (153 billion yen).

“Sumitomo has a clear choice,” Smith said. “It can respond to shareholder concerns and reduce its global carbon emissions footprint in line with the goals of the 2015 Paris Agreement and reposition itself as a renewable energy market leader, or cling to its heavily-polluting 20th-century industrial blueprint and continue to rack up financial losses and deepening shareholder antipathy with every year of continued delay.”


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Bad Medicine

It’s likely that antibiotics sold in the US are products of factories that pollute antibiotics into the atmosphere in China and India. 2015’s Bad Medicine report from SumOfUs and Changing Markets connects the dots.

Even as some major players in the pharmaceutical industry make commitments to stem the threat of antimicrobial resistance (AMR) by developing new antibiotics or reforming prescribing recommendations, many are likely aggravating the crisis in their supply chains. According to Bad Medicine, pharmaceutical pollution is a driver of AMR, along with overuse in humans and livestock. The report connects major companies like Pfizer, McKesson, Teva and Aurobindo to factories that have repeatedly been sanctioned for environmental infractions and likely polluted antibiotic active ingredients into adjacent waterways, poisoning local populations and opening the door to a global health crisis.

Read the jaw-dropping report here.

Action on AMR Can't Wait

The CDC estimates at least 2 million people in the US are infected with resistant bacteria each year, and 23,000 people die from those infections. This isn’t a crisis to worry about someday—it’s happening now, and without action, the frequency and severity of AMR will only get worse.

Antimicrobial resistance is an existential threat to modern health care. It has been since shortly after penicillin was discovered. Alexander Fleming had his eureka moment in 1928. By 1940 bacteria were already exhibiting resistance to the drug.

The development of superbugs is evolution we can track in real time. When bacteria come into contact with an antibiotic, most are killed off. But some bacteria survive and develop resistance to that antibiotic, like the microbial version of a flu shot. Fighting these stronger bacteria with the same antibiotic as before won’t be as effective. After enough mutations, a strain completely resistant to that antibiotic—a superbug—could emerge and pass its immunity on to others.

The Evolution of Bacteria on a “Mega-Plate” Petri Dish (Kishony Lab)

Thankfully, people are speaking up. Last year, President Obama introduced the National Action Plan for Combating Antibiotic-Resistant Bacteria and laid out clear goals for our country to fight back the threat of AMR. In September 2016, the UN will host a High-Level Meeting on the issue. From health care professionals to animal rights activists, people are advocating against the practices that exacerbate AMR, like over-prescription, the lack of research into new alternatives, and misuse in livestock. Too many people are taking antibiotics incorrectly or unnecessarily. For too long, pharmaceutical companies have failed to develop new antibiotics, or other alternatives to fighting bacterial infections. And too many farms rely on antibiotics not to heal their keep, but to fatten them up before they go to market.

Polluting manufacturers, however, have flown relatively under the radar in attempts to address the AMR crisis. Waxman Strategies and Changing Markets have identified factory locations primarily in India and China that are linked to massive environmental degradation in the form of pharmaceutical pollution. Independent studies of regions in India, Pakistan, South Korea and Taiwan have found extremely high concentrations of antibiotics (at times surpassing their maximal therapeutic concentrations) in water sources downstream of antibiotic manufacturers. There are also numerous examples of manufacturers that have been sanctioned for environmental malfeasance, yet continue to produce antibiotics for a mass market without proper waste disposal methods in place.

The effects of this contamination are already public health crises in the factories’ locales, effectively poisoning local populations. In the context of antimicrobial resistance, however, this local injustice is also an international one. High concentrations of antibiotics released into the environment from factories create reservoirs of antimicrobial resistance. The impact is similar to that of human and animal waste, but without having been diluted by the digestive process. Superbugs, cultivated in China and India by careless waste disposal and lack of oversight, can then be exported worldwide.

We need action on all of these issues—discovery, over-prescription, misuse in livestock and pollution—to keep the devastating effects of AMR at bay. With any contributor to AMR out there, the efficacy of antibiotics is threatened, and with it modern medicine.

Waxman blasts egregious biomass rider

Former California Democratic Rep. Henry Waxman is criticizing language in the fiscal 2017 Interior Department and U.S. EPA spending bill he said would amount to a "loophole" that ignores carbon dioxide emissions from the burning of biomass for energy.

"It is absurd to think of burning wood as carbon neutral," Waxman, now chairman of the advocacy firm Waxman Strategies, told reporters in a conference call today. Continue reading.

Michelin Isn’t Reinventing the Wheel, It’s Reinventing the Rubber Supply Chain

Public Radio International’s The World

Scientists estimate that a forest the size of Indiana will be cut down to plant rubber trees over the next eight years. That’s creating biological deserts, driving some of our favorite exotic animals toward extinction…. So, that’s the bad news. Here’s the good: Michelin, the world’s largest buyer of natural rubber, says the deforestation has to stop and it’s pledging to go green. It’s still early, a work in progress, but environmental groups are praising Michelin. Higonnet says Michelin’s shift in tone is huge. Listen to the rest.

Call on Walgreen’s to stop selling blue whale’s food as nutritional supplements

Sign the petition to Walgreens Boots Alliance

Dear CEO Stefano Pessina,

Antarctica is the world’s last great refuge, guaranteed by treaty to be free from commercial exploitation. Unfortunately, this protection didn’t extend to the Southern Ocean that surrounds Antarctica, leaving its immense marine life vulnerable.

Automakers need to stick with fuel efficiency plan

Sacramento Bee op-ed by Henry Waxman

It’s a great success story in the fight against climate change.

The U.S. auto industry has met President Barack Obama’s tough fuel economy and carbon pollution standards, as cars built in 2016 average 25 miles per gallon and emit the lowest rate of carbon ever.

But rather than celebrating this triumph of American engineering and using it as a platform to achieve needed new gains, some auto companies want to roll back the next phase of tougher emissions and efficiency standards.

Read more.

How the Paris Climate Agreement Supercharges the Clean Air Act

Think Progress Article by Greg Dotson and Joe Romm.

A group of leading law professors who work on climate have published a game-changing new legal analysis. It finds that the Paris climate agreement unlocks a previously unused Clean Air Act provision that enables broad authority to use market-based mechanisms to reduce carbon pollution nationwide.

Last December in Paris, the U.S. committed to cut greenhouse gas emissions 26 to 28 percent compared to 2005 levels by 2025. That target appears more than achievable given a variety of existing policies, including congressionally-approved incentives for renewable energy, national fuel economy standards, and the EPA’s Clean Power Plan, which requires states to develop plans to cut carbon pollution and existing power plants. Read more.

A powerful Washington player takes on Walgreens to protect Antarctic krill

The World on Public Radio International

Krill populations in Antarctica have dropped by 40 to 80 percent in the past 30 years. It’s not just from overfishing — krill also need sea ice, which is retreating as the climate warms. With fewer krill, two species of penguins are in rapid decline, and Antarctic blue whales have been pushed closer to extinction.

That's what worries Glenn Hurowitz, director of Lifeline Antarctica, a coalition of organizations working to protect the waters surrounding the southern continent.

“Our vision is to make the southern ocean the last refuge that’s free of commercial and military exploitation. Part of that means not sending these huge ships with vacuum cleaners that suck up krill to the Antarctic Ocean,” says Hurowitz….

Continue reading.


Straight Talk on Indonesia’s Deforestation

Singapore Straits Times

The Indonesian government has stepped up its efforts to fight haze caused by deforestation, but is the private sector doing its part?

The government recently revoked or suspended the land-clearing licences of 27 companies linked to fires. President Joko Widodo announced a ban on new palm oil concessions and peat development, and the new peatland restoration agency (BGA) is putting an all-out effort into ensuring that the government's strong conservation policy is more than just good intentions.

However, the private sector companies that are directly responsible for burning and clearing are not doing all they can to support an Indonesian government that is newly focused on reducing deforestation.

Read More

Vacuuming Antarctica for Krill: The Corporations Plundering the Earth’s Last Frontier

SumOfUs report shows how Walgreens, CVS, and other retailers are selling nutritional supplements that put blue whales and penguins at risk. This exploitation is ultimately dependent on a market for krill-based products. Currently, this route to market is provided by a number of major retailers, including Walmart, Target, CVS, and Walgreen’s. These companies continue to sell krill products despite clear contradictions with their own sustainability commitments. Our message to these companies is simple:

Stop supporting the dangerous exploitation of Antarctic krill. Take the krill off your shelves, and leave it for the penguins and the Antarctic ecosystem. Continue reading.