Sustainable Future Built on Multifaceted Coordination

Embutsu:The keywords of decarbonization and resource-efficiency have attracted considerable attention in the context of achieving a sustainable society. Back in the 1960s, the term “pollution” was used for the environmental problems of the time. Hitachi has grappled with a wide variety of challenges since then, right up to the present-day issue of climate change. While environmental challenges are challenges for all of humanity, we tend to see them differently depending on our particular standpoint or perspective. Professor Takaoka, how do you see the circumstances surrounding the environmental challenges of today from your perspective in the field of environmental engineering?

Takaoka:Fifty years ago, in 1972, the Club of Rome^*1 published its first major report, “The Limits to Growth.” The report made the case that, “If the present growth trends in world population, industrialization, pollution, food production, and resource depletion continue unchanged, the limits to growth on this planet will be reached sometime within the next one hundred years.” Since then, there has been concern about the depletion of resources such as metals and fossil fuels. The limits of planet Earth are something we need to be thinking about on the basis of scientific knowledge, asking how we can make effective use of finite resources.

As you noted, people perceive environmental challenges differently depending on their particular perspective. While this requires us to distinguish between local challenges and those that matter to the entire world, this does not mean the two are unrelated. One example is the question of how to dispose of artificial materials such as plastics. Seen as a local matter in the past, the issue is increasingly becoming global in scope and negotiations for an international convention on plastic pollution are currently underway. On the other hand, as different localities address environmental challenges differently and have their own forms of social infrastructure, resource recycling needs to be achieved in ways that best suit their respective circumstances.

While climate change, for example, is a major challenge that Japan shares with the rest of the world, it also faces a parallel problem in the form of a shrinking population. At the same time as population increase is pushing societies around the world in the direction of higher consumption of resources such as food, Japan faces a shrinking number of consumers. It seems unlikely that both problems can be resolved through a common approach.

Embutsu:With environmental conventions and other such measures being taken globally, where do you see scope for Japanese manufacturers to exert influence?

Takaoka:I believe that Japan is a leader in the disposal of environmental pollutants. On the other hand, there have been some remarkable advances made overseas in technologies for dealing with plastics. Rather than continuing to use existing recycling technologies and systems, Japan also needs to be upgrading its practices to keep pace with current progress.

The European Union (EU) has proposed the idea of a circular economy^*2 whereby it is seeking to make solutions to the issue of environmental pollution an integral part of the economic system, including through the use of digital technologies that were not even imagined in the 2000s. In Japan, not only do we need to catch up with international developments while facing up to these societal changes, but we also need to take advantage of our own distinctive strengths to serve as a model for what new solutions might look like.

Embutsu:Along with national and regional differences, there are also different standpoints, such as those of academia and the private sector, on how to think about and address the problem of environmental protection. Onishi-san and Hanami-san, how do you see this from a business unit perspective? Also, can you tell us about what your respective divisions within Hitachi are doing about this?

Onishi:In our 2024 Mid-term Management Plan, Hitachi set targets of achieving carbon neutrality at all our business sites (factories and offices) by FY2030 and throughout our value chain by FY2050. To help customers reduce their carbon footprint, we have also set explicit numeric targets for our contribution to carbon dioxide (CO₂) reduction in FY2024. In the Water & Environment Business Unit where I work, our business primarily involves things like tendering for engineering projects, such as water infrastructure for public sector utilities in Japan and our utilities solution business for industrial customers.

One thing that I have noticed through my involvement in this work is that public perceptions of resource recycling are changing significantly, both within Hitachi and among our customers. A lot of people have started to question why we can’t create useful resources out of things that used to be disposed of or treated. For example, rather than asking how we can treat wastewater, people are wanting to know how wastewater can be processed, recycled, and reused to serve as a resource.

In the past, our business was primarily based on two-way relationships, between Hitachi and local governments in the case of the public sector and between Hitachi and companies in the industrial sector. In order to get serious about resource recycling, however, I believe we need to build systems that take account of a wide range of stakeholders, including suppliers of parts and materials and the end users who actually use the products, and indeed we are currently working to do so.

Hanami:While the industrial workplace is seeing significant advances driven by new technologies such as digital twins, I believe we have now reached a point where we need to take the next step toward resolving societal challenges.

Meanwhile, supply chains in industry encompass many stakeholders, from materials production to the manufacturing and assembly of parts and transportation to the end user, with the various participants addressing environmental issues based on their own standpoints. Each company operates its business on the basis of its own key performance indicators (KPIs), a way of doing things that is not always optimal when considering the totality of the supply chain. While individual companies will continue doing what makes sense in their own context, what has to happen next, I believe, is for us to start thinking about how to optimize the supply chain as a whole.

The key to achieving this will be common platforms that share data in cyberspace and are capable of intelligently analyzing the entire supply chain. One example relating to CO₂ emissions would be a mechanism for presenting and sharing information on how much CO₂ has been emitted in the process of making and supplying particular parts or products, something that is difficult for users to find on their own. If this platform could be combined with accurate demand prediction, I believe it could boost efficiency along all steps in the supply chain from the supply of parts and materials to distribution and delivery.

In anticipation of such mechanisms, we are working at the Industrial Digital Business Unit to create value by linking together the different types of data generated in industry and in other places where economic activity happens. Along with collecting and coordinating data and running simulations, we are creating robust and resilient supply chains by encouraging improvement not only in the vertical direction from the company workplace up to senior management, but also horizontally across different companies. To achieve this, we are working not only on the management of production lines in physical space, but also on developing enterprise resource planning (ERP) platforms for management and on the optimization of supply chain planning.

Embutsu:So, what you are talking about is the use of digital technology to optimize and operate entire supply chains beyond what any one company can do on its own. In this context, what is happening in the area of international standardization?

Hanami:There were discussions in Europe several years ago about establishing rules for disclosing how much CO₂ is emitted in the process of manufacturing particular products. Vendors have already started to make platforms available that conform to the Gaia-X^*3 data sharing rules and the number of participating companies is rising. Similar activities have also gotten underway in Japan, including work on establishing rules for the sharing of data on the emission of CO₂ in manufacturing processes and how these numbers are to be calculated. Attention is also being paid to maintaining consistency with international rules, with the Ministry of Economy, Trade and Industry and the Ministry of the Environment participating as observers at organizations such as the Green × Digital Consortium^*4.

Embutsu:Among the challenges facing the environment are problems that are not amenable to quick resolution using existing systems and solutions. Goals such as decarbonization and resource recycling demand a higher level of technology than is found in the environmental solutions that business is currently able to supply. What work has the Research & Development Group been doing in this regard?

Suzuki:Our core strategy at the Research & Development Group is to utilize data and collaborative creation to overcome the challenges facing customers and wider society, thereby helping to resolve the issues associated with planetary boundaries^*5 and with well-being. Two projects that commenced during the current fiscal year were the Planetary Boundaries Project and the Well-being Project. While planetary boundaries can be thought of as representing the limits of the earth, we take a forward-looking approach that asks how we can learn where these boundaries lie and how we can continue to grow without exceeding them. In the area of climate change, along with research based on forecasting from current societal systems, such as work toward use of non-fossil fuels, the electrification of mobility, and energy efficiency, we are also identifying areas that warrant attention by backcasting from the sort of society we want to have in 2050, and working on utilizing hydrogen as a source of energy to help achieve carbon neutrality.

With regard to well-being, the ability to choose for one’s self is a vital factor in people’s sense of self-esteem. It is important for people to have a range of possible futures and to be able to choose between them. To this end, we have also been working on the use of a policy recommendation artificial intelligence (AI) to present a number of future scenarios that suit different localities to help build community consensus and inform decision-making on policy.

Embutsu:You are talking about how to help people decide what they should be doing now in anticipation of the future and which path they should follow. I think it is a very admirable endeavor to be able to support government and other decision-making about policy and other matters based on scientific knowledge.

Professor Takaoka, how do you see the future of environmental protection from the perspective of environmental engineering?

Takaoka:The term “circular economy” is one that we frequently hear in recent years. If such an economy were truly circular, it would have no arteries (outflows) or veins (inflows). Currently, however, we still have businesses that operate like arteries (using fresh resources) and others that operate like veins (able to recycle and reuse existing resources). If we are to achieve genuinely cyclic use of resources then those artery companies will need to take active steps to use only resources that are already available. Suzuki-san spoke earlier about the technique of backcasting and in that context what we want is a world where it is not possible to distinguish the arteries from the veins.

Embutsu:The term “waste treatment” will disappear and terms like resource recovery and the trading of valuable materials will take its place. The ideal will be a society in which, rather than being considered waste, sewage and sludge will be seen as treasure troves.

Suzuki:Unfortunately, the distribution and use of recycled materials also pose problems. For a waste material discharged by one industry to be used in another, for example, it first needs to satisfy a number of requirements set by that other industry, such as standards governing input materials. To address this issue, we partnered with the National Institute of Advanced Industrial Science and Technology (AIST) to establish the Hitachi-AIST Circular Economy Cooperative Research Laboratory in October 2022. To create a circular economy that can make efficient use of resources across entire value chains that span different industry sectors, we are undertaking research and development on topics such as determining what sort of society we want and what rules it will require.