Hello, my name is Kito. I would like to explain our revised medium-term plan. Key environmental changes since the previous announcement of the medium-term plan in 2019 are listed on page two. The COVID-19 pandemic led to a significant fall in demand in our core petroleum business. Acceleration of decarbonization efforts can be anticipated as countries worldwide are pursuing a green recovery, and as the Japanese Prime Minister declared, carbon neutrality by 2050 last October. In addition, resource prices have become extremely volatile due to global monetary easing aimed at economic recovery. We revised our plan based on the understanding that as a company mainly engaging in the fossil fuel business, we must revamp our medium to long-term strategy to become resilient to such environmental changes and to remain a sustainable entity, and that we need to further accelerate our strategies and initiatives. Please look at page three.
The steps taken for the revision are as shown. Please now look at page four. First, I will explain our anticipated long-term business environment. This slide illustrates our long-term energy business environment scenarios towards 2050. If you recall, we had focused on the Prism scenario in the previous medium-term plan. This time, we started with the notion that we should be prepared for a difficult scenario, the Azure scenario. Please look at page five. On the other hand, there is significant variation in the Asian population forecasts, which is an important macroeconomic variable in our anticipated long-term business environment. Amid increased attention on falling global birth rates due to the recent economic downturn, various factors remain extremely uncertain in the long run. Forecasting the global business environment is extremely difficult. However, it is clear that median age is forecasted to increase despite some differences in timing across regions.
We can safely assume that decarbonization and global aging will progress despite the various uncertainties in our future forecasts. The implication for Idemitsu is that we must enhance corporate resilience and engage in steady efforts to overcome the social challenges we will undoubtedly face going forward. Please look at page 11. Next, I would like to explain our basic strategy to achieve our vision for 2030 together with our management objectives. Amid extreme uncertainties in the medium to long-term management environment, we seek to become a resilient corporate entity which can adapt flexibly to any environmental changes. To this end, we will engage in three basic strategies: engaging in ROIC management, evolving the business platform, and creating an open, flat, and agile corporate culture. I would like to explain each one in order. The first basic strategy is to engage in ROIC management.
Future uncertainty has increased significantly since the previous announcement of the medium-term plan due to major environmental changes such as COVID-19 and the shift to carbon neutrality. In order for us to fulfill our responsibility as stated in the 2030 vision, we must strengthen our corporate structure and heighten our risk tolerance. We aim to focus more on efficiency than pursuing size, enhancing our enterprise value by achieving a lighter balance sheet to enhance resilience as a corporation. We plan to go beyond basic portfolio management, incorporating ROIC to the KPIs of each business and establishing a performance management framework which can accurately evaluate results. We will engage in investment decision-making using internal carbon pricing, taking the economic impact of GHG emission volume into account. I will explain our business strategy based on such ROIC management starting on the next slide. Please look at page 13.
Our business strategy is presented here. We will focus on these five points in the petroleum and basic chemical segments. Making apollostation a smart one-stop shop is an initiative which will lead to next generation mobility and community. We will restructure our refineries and offices before the expected fall in demand materializes, while also proceeding with further integration of refinery and chemicals. We will reduce fixed costs and promote a transition of the entire industrial complex to a CNX center in order to achieve an energy material transition. As indicated in the footnote, CNX stands for carbon neutral transformation. Please refer to the reference materials for details on the smart one-stop shop concept and the CNX center concept. In addition, we will continue efforts to turn Nissan Refinery into a profit center.
In the functional materials segment, we aim to rapidly commercialize lithium solid electrolytes and to accelerate development of state-of-the-art materials such as those shown here. In the power and renewable energy segment, we aim to expand development of renewable energy sources and convert Solar Frontier into a system integrator. Through these efforts, we plan to develop a distributed energy business centered around renewable energy. In the resources segment, oil exploration production will shift to gas development in Southeast Asia. In parallel, we will consider CCS initiatives using technologies developed to date. In the coal business, we will reduce mine production volume and shift to low carbon solution businesses such as black pellets and ammonia mixed combustion, thereby contributing to energy transition. We will also focus on the development and expansion of our geothermal business, both domestically and overseas. Please look at page 14.
I will move on to our second basic strategy, evolution of our business platform. To start, we obtained a DX certification in April. To further accelerate our DX efforts, we seek not only to achieve internal operational reforms, but also to provide value to clients in the ecosystem network. With respect to corporate governance, we will limit the board to a fewer number of directors who are equipped to handle key management issues. As a result, we expect that the board can focus on our most important challenges. When considering director nomination and compensation, we will achieve increased fairness and transparency by relying on external directors. We also aim to achieve a more advanced global governance structure. Please look at page 15. The third basic strategy is to achieve an open, flat and agile corporate culture. Respect for others lies at the heart of Idemitsu's operations.
As we have repeated over and over, people are at the core of our operations and people have infinite energy. Our people are by far our most valuable asset. It is management's responsibility to create a corporate culture where employees with diverse value sets can most effectively leverage their various skill sets while working together to make chemical reactions happen. Based on this basic premise, we are engaging in the three initiatives shown on this slide. We will promote awareness of our corporate mission and the newly formulated vision for 2030 to establish a common foundation for the organization as a whole, thereby enhancing our corporate resilience. We will implement cross-organizational reforms, proactively delegate responsibility, and optimize span of control to achieve personal development and corporate growth at the same time.
While we have always emphasized the importance of diversity and inclusion, we will further promote work style reforms so that personnel with various skill sets can work faster and closer together to achieve greater innovation. Please see page 16. Through the three basic strategies I have just explained, we aim to realize our vision for 2030 and transform our portfolio as illustrated here. Through the energy material transition, the fossil fuel and basic chemicals businesses will evolve into next generation fuel, materials, and circular businesses. Our current initiative to convert apollostation into a smart one-stop shop, including efforts relating to ultra small EV and life support, will evolve into next generation mobility and community. We will also expand development of advanced materials in the domains shown on this slide. Please look at page 17.
We will continue our negative emission initiatives, aiming to achieve carbon neutrality, net zero CO2 emission in scope one plus two by 2050. Please look at page 18. In addition to reducing scope one plus two CO2 emission volume in our own operations, we aim to reduce CO2 emissions from the entire value chain while gaining an accurate understanding of client needs. We will tackle SDGs number seven head on, pursuing the difficult challenge of providing clean energy to everyone. Please look at page 19. Our management targets for fiscal year 2030 are as shown, including operating plus equity income excluding inventory impact of JPY 250 billion, ROIC of 7% and scope one plus two CO2 reduction of 4 million tons. Please look at page 20.
Next, I would like to explain our revised medium-term management targets for fiscal year 2020 to fiscal year 2022 based on our basic strategy and targets towards 2030. Please look at page 21. Our management plan is as shown on this slide. We target net income and operating plus equity income before inventory impact of JPY 220 billion and JPY 410 billion respectively. At the end of fiscal year 2022, which will be the final year of the medium-term plan, we forecast ROE of 8% and cumulative three-year cash flows of JPY 230 billion. Key assumptions are also provided on this slide. Please look at page 22. This slide illustrates trends in operating plus equity income by segment excluding inventory impact. We have already discussed our figures for fiscal year 2020 and fiscal year 2021.
In fiscal year 2022, we expect profits to increase through improvements in overseas petroleum markets, expansion of our functional materials business transformation of Solar Frontier, and improvements in resource prices. Please look at page 23. This slide shows the cash balance during the term of the medium-term plan. We will reduce fixed costs through firm-wide restructuring projects and accumulate cash inflows through proactive asset sales while reducing cash outflows through careful investment selection, achieving free cash flows of JPY 230 billion. As shown, free cash flows will be used for shareholder returns, strategic investments and strengthening of our financial position. Please look at page 24. This next slide shows our investment plan during the medium-term plan. Of the total investments of JPY 570 billion, JPY 270 billion will be used for strategic investments and JPY 300 billion for maintenance.
A breakdown of strategic investments is provided in the pie graph on the right, which sets aside JPY 100 billion for M&A. Major investments in each segment are as shown. A large allocation to the resources segment includes initiatives relating to gas development in Southeast Asia, production of black pellets and geothermal energy. Please look at page 25. Finally, shareholder returns. Shareholder returns are positioned as a key management priority at Idemitsu. We have prepared our shareholder return policy based on this understanding. We plan to achieve a total payout ratio of over 50% on cumulative net income, excluding inventory impact, and to provide stable dividends of JPY 120 per share. That concludes my presentation. Thank you for your attention.