Talanoa Japan- A portal of best practices to shape the future on climate change

Sekisui House, Ltd.
Sekisui House’s Decarbonization Business – Changing the Future for a Happy Life

http://www.sekisuihouse.co.jp/

Question 1 – Where are we?
The commitment (planned and/or announced) as well as the actions taken so far that are in line with aimsof Paris Agreement, the 1.5/2 degrees’ goal and the transition towards a net-zero emission society by thismid-century [Maximum 300 words]• In 2008, we were the first Eco First company in Japan to make a decarbonization declaration that aims
“to achieve zero CO2 emissions throughout the full housing lifecycle from production to disposal by2050”. At the same time, we also aimed for the realization of a hydrogen society in order to increase
the proportion of renewable energy here in Japan, where the differences among the four seasons are soprominent.
• From 2009, in order to realize our goal of creating a post-carbon society, we commenced sales of ourenvironmentally friendly Green First houses, which achieved a 50%+ reduction in CO2 emissions from1990 levels. “Green First” means that the most important thing is caring for our global environment.
In addition to PV systems, Green First homes also use fuel cells, which are one of the keys to theadvent of the hydrogen society.
• On hearing of the Japanese government’s decision to “make ZEH the standard for new housing inJapan by 2020,” from 2013 we commenced sales of our Green First ZERO ZEH models.
• In 2015, on hearing that approximately 30% of global CO2 emissions were from buildings, we joined
the COP21 Global Alliance for Buildings and Construction with the aim of reducing building andconstruction-related CO2 emissions. Of the 70 participating institutions from throughout the world,
the only ones from Japan were the Tokyo Metropolitan Government and Sekisui House. We declaredthat we would take the initiative to reduce emissions in the household sector by 39.3%.
• In 2017 we joined RE100 and declared that we would source 100% of our electricity for businessactivities from renewable energy by 2040.
• In 2018, our goal of reducing CO2 emissions from our business by 35% and CO2 emissions from rental
housing and detached houses by 45% by 2030 was certified by the SBT Initiative.

Progress made so far against the above commitments, including success stories, case studies and gaps
[Maximum 300 words]• In FY2017, ZEH accounted for 76% of newly built detached housing, with the total cumulative
number exceeding 35,000 houses, making us the top seller of ZEHs in the world.
Our ZEH mass construction was awarded second place in the Sustainable City Grand Prize Division ofthe Green Solutions Awards 2017.
• In February 2017, in Kanazawa we completed the first project in Japan where all rental units wereZEH.
• In 2019 we are scheduled to complete the first apartment building in Japan where all units will beZEH.

• In 2016 we built the resilient, energy self-sufficient Higashi-Matsushima City Disaster-Ready Smart
Eco-Town in Higashi-Matsushima City, Miyagi Prefecture, which had been especially hard hit by thetsunami from the Great East Japan Earthquake. This town has a micro-grid and supplies power
generated by the PV system to the area rather than supplying it to the grid, meaning that even if thepower network goes down, electricity can still be supplied as normal for a minimum of three days, andif the power is out for a longer period, then electricity could still be supplied at minimal levels on acontinual basis.
• By 2017, we had installed a cumulative total of approximately 700 MW worth of PV systems on
customers’ homes.
• In 2015, we constructed Sekisui House Eco First Park as a facility to educate and increase social
awareness about global warming prevention, ecosystem preservation and resource recycling. We are
spreading the word about living a lifestyle that will prevent global warming, the creation of gardens
with biodiversity, and the recycling of 100% of building and construction waste.

Quantitative impact so far with respect to mitigation, adaptation, resilience and/or finance [Maximum 300words]• The average CO2 emissions of newly-built detached housing (including housing other than ZEH)
provided in FY2017 were reduced by 41,681 t-CO2/year over 1990 levels, achieving a reduction in
CO2 emissions of 83.6%.
• The annual CO2 emission reduction from the 35,881 ZEH providing during the period from 2013 to2017 is approximately 100,000 tons.
• Higashi-Matsushima City Disaster-Ready Smart Eco-Town achieves an annual reduction in CO2emissions of 307 t-CO2/year.
• During the period from 2009 to January 2018, the number of houses sold with fuel cells was in excessof 48,000, making Sekisui House the world leader.
• In 2018, the cumulative number of visitors to Sekisui House Eco First Park broke the 10,000 mark.

Question 2 - Where do we want to go?
Vision of the future for your organization and/or sector in terms of its possible role in achieving the 1.5/2
degrees’ goal and a net-zero emission world by this mid-century [Maximum 300 words]
At Sekisui House we believe that our mission is to make a better society, a better future and to provide
our customers with a happy life. A happy life is based on health, comfort, safety and security, and thesethings cannot be achieved through housing alone, but require us to care for the global environment.
Because housing has a long lifecycle, in order to achieve these goals it is necessary to ensure that newlybuilt housing has zero CO2 emissions. In 2009 we commenced the sale of housing that reduced CO2
emissions by 50% or more while allowing people to live in comfort. In 2013 we moved to ZEH and by
2017 our ZEH ratio had increased to 76%.
However, this represents only 8.3% of all newly-built homes in Japan in 2017, so in order to achieve theParis Agreement’s goal of limiting global warming to under 2°C, all newly built housing needs to beZEH. Sekisui House wants to be the leader in this arena and increase the ZEH ratio in Japan as a whole.
This means not only detached houses, so since 2017 we have been engaged in creating ZEH
condominiums. Furthermore, we see the role of Sekisui House to create the ZEH market and promote
the post-carbon society by making all houses ZEH. Although we are now also developing our businessoverseas, as of yet there are no ZEH outside of Japan, so in the future it is our aim to develop ZEH
globally as well.
With regard to CO2 emissions from offices and factories, together with our customers we plan to pursue
decarbonization while employing roof-mounted PV systems, etc. We are also pursuing decarbonization
throughout our entire supply chain to realize sustainable procurement.

Possible and potential new commitments and pledges of to achieve the 1.5/2 degrees’ goal and a net-zeroemission world by this mid-century [Maximum 300 words]• At present, the ZEH ratio among newly-built houses in Japan is low, but this is due to problems suchas a low degree of awareness regarding ZEH and the higher costs involved. Therefore, in addition tostressing the importance of dealing with climate change, we will increase awareness regarding ZEH
and make ZEH the standard for all newly-built homes. The Japanese government has made it a goal tohave half of all new housing built as ZEH by 2030.
• In the same way, there is hardly any ZEH rental housing on the market, awareness regarding ZEH islow, and even if there were people wanting to live in such housing it is currently not possible to grant
them their wish. By creating a market for ZEH rental housing, increasing awareness, and increasing
the stock of such housing, we intend to be able to grant the wishes of as many people as possible to livein ZEH.
• In terms of apartment buildings, such as condominiums, it is currently difficult to make ZEH high-riseapartment buildings due to the difficulty of installing PV systems. However, we plan to make thispossible by developing ZEH technology that can be used on such buildings.

• Since Sekisui House was established in 1960, we have built more than 2,380,000 homes. Although weare already the global leader in terms of ZEH, ZEH still only accounts for about 1.5% of Sekisui House
housing stock. We are therefore working to incorporate ZEH features in such existing homes in orderto reduce related CO2 emissions.
• We are also working to expand ZEH concepts to commercial facilities, such as hotels, which we believe
will be an area of significant growth in the near future.

Foreseen positive impact of these commitments once they are realized, including contributions to thesustainable development agenda [Maximum 300 words]• Currently, the Japanese government has made it a goal to have half of all new housing (420,000homes) built as ZEH by 2030. However, there are 53.4 million homes in Japan, so even if they achieve
this goal by 2050, it will still mean that ZEH will account for only 15–16% of the total number ofhomes. If, however, all new housing were to be built as ZEH by 2030, then approximately 20% of all
homes would be ZEH by 2050.
• Although the number of ZEH condominiums is not increasing, 540,000 new condominiums will bebuilt this year, so if the concept of building new condominiums as ZEH can be promoted then a major
reduction in CO2 emissions can be achieved because condominiums account for 30% of all homes inJapan.
• People wanting to live in ZEH rental housing will chose to do so if it is possible for them to find such
ZEH by searching on the Internet, etc. As this happens there will be a ripple effect, which will further
promote ZEH condominiums.
• It is not possible to reduce CO2 emissions from all houses in Japan to zero by relying solely on new
ZEH as described above. Renovation of existing homes to bring up them up to ZEH standards isrequired, and as an industry leader, Sekisui House will promote such renovation with a view toeliminating CO2 emissions from the entire housing lifecycle by 2050.
• Following the phase-out of the FIT (feed-in tariff) system, in line with our commitment to RE100, wewill create a platform whereby we purchase surplus power from our customers, and if this concept canbe popularized throughout Japan, then it will encourage more companies to join RE100.
• In terms of housing construction, procuring materials from companies that are actively seeking tobuild a low carbon society in line with the UN’s SDGs (carbon neutral procurement) minimizes Scope 3emissions and promotes the transition to a low-carbon society among Japanese industry as a whole.

Question 3 - How do we get there?
Ways in which the UN Climate Change process can help you achieve your vision and goals, and how youractions can help in expediting sustainable transitions to climate neutral societies [Maximum 300 words]• Sekisui House is the first Eco First enterprise to make the Decarbonization Declaration and proceedwith efforts to support decarbonization, such as the promotion of ZEH. Although it is necessary toincrease awareness regarding the importance of climate change countermeasures and create markets
where products aimed at decarbonization can be marketed, the UN Climate Change process is helpful
in making people aware of such market formation.
• The promotion of ZEH by government subsidy policies and requirements, etc., not only promotes thetransition to a carbon-neutral society, but also supports the promotion of decarbonization businesses.

Concrete solutions that have been realized while implementing your commitments, including lessons
learnt from success stories and challenges, and case studies that are in line with the 1.5/2 degrees’ goal andcan support the Parties in achieving their NDC goals, enable higher ambition and inspire engagement ofother non-state actors [Maximum 300 words]• One of the characteristics of Sekisui House is the fact that our global warming countermeasures andour business are one in the same. With global warming countermeasures such as the purchasing ofemissions quotas, when business performance deteriorates then global warming countermeasures are[often] terminated. By contrast, with sales of ZEH, which is one of our industry’s global warming
countermeasures, if business performance deteriorates, then strengthening sales of ZEH to cope withthe situation actually continues to promote the reduction of emissions. It is necessary to see global
warming as a problem that should be acknowledged and dealt with as a business, rather than within
the narrow scope of CSR.

Collaboration models with other stakeholders and, in particular, between non-Party stakeholders, national
governments and the UN Climate Change process that have been successful in helping you, or can help
you, achieve your commitments [Maximum 300 words]• Recognized as a top runner in various business categories in the Eco First Program by the Minister ofthe Environment.
• Cooperation with low carbon businesses and enthusiastic policy proposals from enterprises as part ofJCLP (Japan Climate Leaders’ Partnership) activities.
• Member of RE100.
• Certified by the SBT Initiative.
• Participant in the Japan Climate Initiative, JCI.

Opportunities to further scale up action and means to address barriers that can enable even further action
by non-Party stakeholders based on the actions you have taken to implement your commitments. (“We’vemade progress and have made new commitments as described above. This is what I need from nationalgovernments, other non-Party stakeholders and the UN Climate Change process to take even furtheraction…”) [Maximum 200 words for each item below]:•Policy levers• Submission of policy proposals to promote the transition to ZEH by each company/organization.
•Collaboration/cooperation opportunities• Japan Climate Leader’s Partnership• Ecofirst Promotion Council•

Lessons learned based on the experience and progress so far• Not to treat climate change initiatives under the narrow scope of each company’s CSR, but rather tosee climate change as a problem that should be acknowledged and dealt with as a business.
•Public and private financing models• We utilize the subsidies provided by ministries related to the promotion of ZEH (Ministry ofEconomy, Trade and Industry, Ministry of Land, Infrastructure, Transport and Tourism and theMinistry of the Environment).
– Subsidies to support the promotion of investment in energy efficiency.
– Initiatives to promote the transition to a low-carbon society, such as ZEH (detached houses,condominiums).
• The Higashi-Matsushima City Disaster-Ready Smart Eco-Town, which was subsidized by theMinistry of the Environment, was an Independent and Distributed Low Carbon Energy Society
Creation Initiative conducted by the Low Carbon Society Promotion Association.