Climate Change

JAPEX has positioned climate change measures as one of its key management issues.

Aiming to contribute to global initiatives against climate change and the government's "2050 Carbon Neutral", the entire JAPEX group is working to reduce GHG emissions and transform its business.

Related

• Sustainability Themes/Materiality

Policy of Measures

JAPEX is organizing policies and implementing measures from four perspectives based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), which calls for disclosure of information on the financial impacts of climate change (TCFD Recommendations).

Governance

Items related to climate change are deliberated, discussed, and reported by upper management as appropriate.

• Having deliberations and discussions regarding the promotion of sustainability, including climate change, at the Sustainability Committee chaired by the president (as needed)
• Monitoring progress of GHG reduction targets by the Risk Management Committee (twice a year, and as needed)
• Reporting to the Board of Directors on the JAPEX's business risks, including climate change, and the sustainability promotion status (once a year for each, and as needed)
• Linking executive remuneration to the achievement of company-wide climate change targets to strengthen climate change governance

Strategies

JAPEX formulates and implements strategies based on the identification of medium- to long-term risks and opportunities associated with climate change, including the impact of the transition to a decarbonized society on our business.

In the "JAPEX Management Plan 2026-2035" announced in April 2026 (hereinafter referred to as the "Management Plan"), we conducted scenario analysis using multiple scenarios published by the International Energy Agency (IEA), including STEPS (1) and NZE (2). Following deliberation by the Sustainability Committee, the results of this analysis were utilized in formulating the new Management Plan.

Furthermore, we continuously evaluate the proportion of investment in risk assets and opportunities from a climate change perspective, aiming to build a sustainable business portfolio even under the most stringent NZE scenario.

Risk Management

JAPEX manages climate change risks within its integrated risk management, which is a company-wide risk identification and assessment process.

Specifically, we monitor carbon taxes, GHG emission targets, and emission regulations in the countries and regions where we operate, reflect these trends in our business risks as appropriate, and implement the necessary measures. In 2017, we also introduced Internal Carbon Pricing (ICP), incorporating risk tolerance regarding carbon taxes and GHG emission regulations into our assessment criteria.

At the Sustainability Committee, we manage our business portfolio, including climate change opportunities, through the process of formulating the Management Plan and monitoring its progress.

JAPEX's major risks and opportunities related to climate change

JAPEX's major risks and opportunities related to climate change are as follows:

Major risks related to climate change

• Transition risk
  
  • Regulations and laws: Increased additional cost burden due to environmental laws such as carbon tax
  • Market and technology: Revenue decline due to lower demand for oil and natural gas
  • Reputation: Difficulty in funding for the E&P business due to the global decarbonization trend, etc.
• Physical risk
  
  • Acute: Impacts on onshore and offshore facilities due to extreme changes in weather, etc.
  • Chronic: Impacts of sea-level rise on onshore and offshore facilities and impacts of water resources depletion, etc.

Major opportunities related to climate change

• Resource efficiency
  • Use of more efficient production and distribution processes: Combined use of decarbonization technologies such as CCUS at production sites
• Products and services
  • Development and expansion of low emission goods and services: Early practical application and commercialization of CCUS, etc.

Related

• Risk Management

Indicators and Targets

In the Management Plan, while upholding the basic principles of JAPEX2050, we will continue to advance initiatives to achieve our emission reduction targets without any changes (a 40% reduction in Scope 1 and 2 emissions in FY2030 and achieving net-zero CO2  emission in 2050). Furthermore, fully leveraging our leading track record and expertise in domestic CCUS projects, we have set a new target of CO2 reduction contribution for society, aiming for a cumulative storage volume of CO2  of 8 million tons or more in FY2035.

Emission reduction targets of JAPEX operations

• Scope 1 (direct emissions) + Scope 2 (indirect emissions)
  
  • Reduce CO2  emission intensity of our group's operations by 40% in FY2030 compared to FY2019
  • Achieve net-zero CO2  emission of our group's operations in 2050
• Contribute to the reduction in Scope 3 (JAPEX's supply chain emissions). 
  • Establishing new technologies and promoting the supply of energy with low environmental impact

Contribution to a net-zero society

• Target of CO2  reduction contribution for society through CCUS
  • Cumulative storage volume of CO2 of 8 million tons or more in FY2035

Since 2013, JAPEX has been participating in the "Keidanren Carbon Neutrality Action Plan (former Low Carbon Society Action Plan)" as a member of the Japan Energy Resources Development Association. We have incorporated the Association's GHG reduction targets into our Sustainability action plan.

Related

• Carbon Neutral Direction & Objective

Efforts toward reduction in Scopes 1 and 2

JAPEX is working to reduce GHG emissions and conserve energy at our sites to achieve reduction in Scopes 1 and 2.

• Reduction of GHG emissions: Effective use of excess gas to reduce flaring (combustion) operations and vent emissions.
• Energy conservation: Improve operational efficiency, identify energy loss through exergy analysis, and implement measures.

CDP Score

CDP is a non-governmental organization (NGO) based in the United Kingdom that runs the global disclosure system to manage private and public companies and organizations' environmental impacts. The CDP score is one of the important indicators to measure their environmental efforts.

JAPEX received a B score in fiscal 2025 based on the annual questionnaire on "climate change."

Related Site

• CDP Official Website