Formulation of New Environmental Targets: "SMFL Group Sustainability Action Plan"

Sumitomo Mitsui Finance and Leasing Company, Limited (President and CEO: Tetsuo Imaeda, hereinafter "SMFL") announces the formulation of its new environmental targets, the "SMFL Group Sustainability Action Plan," to further advance initiatives towards carbon neutrality, building on the achievements of its "Medium-to-Long-Term Environmental Targets" set in FY2022.

Background of Formulation Until now, our company has promoted initiatives for realizing a decarbonized society based on the "Medium-to-Long-Term Environmental Targets" with FY2025 as the final year. Recently, there has been an increasing demand to accelerate responses to climate change issues, and corporate sustainability has become the most important management issue.

This time, the SMFL Group has taken its conventional targets a step further, setting targets that comply with more transparent international standards (Paris Agreement "1.5°C level"), and shifting its focus from voluntary offsets through carbon credits to direct reductions in GHG emissions, thereby promoting highly effective initiatives. Furthermore, the new environmental targets primarily focus on goals centered on GHG emission reductions, and the expansion of sustainability-related businesses under the "Medium-to-Long-Term Environmental Targets" has been transferred to KPIs for material issues.

New Environmental Targets: "SMFL Group Sustainability Action Plan" The SMFL Group aims to achieve carbon neutrality by 2050, setting interim targets for FY2030: "42% reduction in Scope 1 and 2 for the consolidated group (compared to FY2024)" and "targets contributing to the reduction of Scope 3 and societal GHG emissions."

For targets contributing to the reduction of Scope 3 and societal GHG emissions, we aim for a new aircraft model ratio of 80% or more in the transportation business. In the real estate business, SMFL and its strategic subsidiary, SMFL Mirai Partners Co., Ltd., will work on calculating and disclosing emissions (Scope 3 Category 13) from properties they own. Furthermore, in the global environment business, by aiming to achieve 1.5GW of domestic solar power generation output, we will promote the spread of renewable energy and contribute to the reduction of GHG emissions.

In the action plan for contributing to GHG reduction, we will promote the measurement of GHG reduction contributions in circular economy businesses and initiatives for SAF (Sustainable Aviation Fuel) businesses through inter-departmental and inter-group collaboration, thereby advancing effective initiatives for realizing a decarbonized society across the entire SMFL Group.

Through the initiatives of the new environmental targets, "SMFL Group Sustainability Action Plan," the SMFL Group will contribute to the reduction of GHG emissions not only within the company but also across the entire supply chain and society as a whole, thereby contributing to the realization of a sustainable society.

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