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Corporate InformationSustainability

Engaging with the Risks and Opportunities of Climate Change

Hitachi sees climate change risks and opportunities as important management issues. We are therefore setting long-term environmental targets through 2050 and clearly outlining our policy of contributing to the achievement of a low-carbon society. In addition, given the global regulatory and policy trends in climate change, we will launch business strategies to minimize risks and maximize opportunities. To that end, the Executive Sustainability Committee was created in 2017, with the Hitachi president serving as chairman and members including other top executives. Group-wide measures on climate change are advanced by establishing KPIs in our Environmental Action Plan.

Regulatory Risks and Opportunities

Carbon taxes, energy consumption taxes, and emissions trading systems may be newly introduced or further strengthened, representing risks impacting directly on management costs on top of those incurred in complying with the environmental regulations and policies of countries and regions around the world. To mitigate such risks, we have been reducing or minimizing cost burdens by enhancing production efficiency and introducing energy-saving measures. Our energy-saving investments in fiscal 2016 totaled approximately 9.1 billion yen.

We also regard the energy-efficiency standards and regulations for products as opportunities for business expansion. If our products did not meet such standards, we would risk losing sales opportunities, but Hitachi not only clears the required norms, we also develop energy-saving products and services that go beyond the prescribed standards. We can thus increase the likelihood of our energy-saving products and services being selected by our customers and gaining fuller market penetration, thereby expanding our business.

Risks and Opportunities Presented by Physical Factors

Hitachi has a worldwide business presence and believes that disasters due to the impact of global warming—like powerful typhoons and heavy rainfall—represent serious business continuity risks. In choosing sites for new plants, for example, we take potential flood damage into consideration, and we have established the Hitachi Group Guidelines for Developing Business Continuity Plans that outline measures to be taken in times of disaster.

At the same time, we perceive the increase in demand for natural-disaster countermeasures in various countries and regions as business opportunities for our disaster-prevention solutions. Hitachi uses the latest IT tools to analyze and evaluate data pertaining to people's daily lives, meteorological and other natural trends, and the operation of social infrastructure, providing solutions that lead to a proper climate change response and creating new business opportunities.

Other Risks and Opportunities

A company's approach to climate change issues influences stakeholders' evaluations and affects customers' choice of products and services. It can become either a risk to business continuity or an opportunity for sales expansion. Hitachi upholds long-term environmental targets of reducing the CO2 emissions throughout our value chain by 50% in fiscal 2030 and 80% in fiscal 2050. Toward this goal, in fiscal 2016, we achieved 35% reductions in CO2 emissions from the use of products and services through the promotion of environmentally conscious design during the development stage, as well as through the increased sales of products and services with high energy-saving performance. Furthermore, we have improved energy use per unit by 12% through energy-saving investments in high-efficiency facilities and equipment and by moving forward in production efficiency by utilizing IoT. In the future, we will switch to a low-carbon business structure; develop innovative devices and materials that contribute to the reduction of the environmental burden; develop and popularize ultra-efficient products and low-carbon energy; and offer energy-conserving social system solutions through the wide-ranging and integrated harmonization of disparate systems.

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