Environmental Value Creation Initiatives
Hitachi Construction Machinery Group Products and Environmental Value
In 2021, the Hitachi Construction Machinery Group reorganized materialities (key issues) from the viewpoints of relevance to our business and the expectations of society and identified “Product and technology development contributing to climate change mitigation and adaptation” and "Conversion to recycling-oriented business model" as our materialities. Aiming to realize a decarbonized and recycling-oriented society, we work to create environmental value through our business from the perspective of products and solutions.
Environmental Risks and Opportunities
Hitachi Construction Machinery Group is working on the actualization of a sustainable society which exists in harmony with the environment as one of the top management priorities. By conducting risk assessments and scenario analyses of future forecasts and impacts on the business environment going forward, we seek to avoid or mitigate losses caused by possible future climate change, as well as to explore potential opportunities to create new businesses. We grasp the impact of climate change and water risks on our business and are working to minimize risks and maximize business opportunities.
1. Climate Change Risks and Opportunities
Hitachi Construction Machinery has organized a task force within the company to identify risks and opportunities with a large financial impact by performing quantitative analysis of policy and regulatory risks, technical risks, market risks and reputation risks in the 1.5°C scenario, and the urgent risk and chronic risk of physical risks in the 4°C scenario. Typical risks in the 1.5°C scenario and the 4°C scenario are as follows.
Regulatory Risks and Opportunities (1.5℃)
Restrictions regarding fuel consumption, CO2 and air pollution and regulations such as carbon taxes are being introduced globally, and these are affecting business practices with respect to products and factories. However, we believe that promoting the development of decarbonization technologies, energy-saving performance and cleaner emissions of products and services will lead to product competitiveness and further business opportunities. We believe that regulations and taxation systems that are adopted in countries around the world will bring risks and opportunities for Hitachi Construction Machinery’s business operations such as products and production.
Risks and Opportunities Presented by Physical Factors（4℃）
Extreme weather that is a frequent occurrence in recent years is said to be one of the effects of global warming. Owing to large typhoons and the flooding of rivers, production activities at plants, and transportation of parts and products, etc. have been affected throughout the supply chain. It is thought that the impact of such abnormal weather will become a risk for business continuity.
Meanwhile, countries and regions are beginning to promote adaptation of measures to circumvent and mitigate damage caused by the impact of climate change. The disaster prevention and reduction technologies, products, and solutions that Hitachi Construction Machinery Group has been working on can contribute to adaptation, and we believe this will be a new business opportunity for Our Group.
2. Water-Related Risks and Opportunities
Initiatives for Water-Related Risks and Opportunities
Hitachi Construction Machinery Group recognizes that the shortage of water resources is a serious environmental issue equivalent to climate change. The waste and contamination of water resources will present a serious crisis not only to our own production activities but also to local communities. Our Group has conducted activities analyzing water intake risks utilizing the WRI Aqueduct Water Risk Atlas Tool at individual production plants and has attained a thorough understanding of the importance of water in each area. Hitachi Construction Machinery Group has conducted activities analyzing water intake risks utilizing the WRI Aqueduct Water Risk Atlas Tool at individual production plants and has attained a thorough understanding of the importance of water in each area.
We consider water risk as the water intake and drainage in a region with a production base. The amount of water intake is controlled on a per-unit basis, and for wastewater, a voluntary standard value is set, and measures have been taken to ensure thorough on-site treatment.
However, infrastructure development for water shortages, floods, etc. is required throughout the world. Hitachi Construction Machinery believes that contributing to infrastructure development including water access and forest conservation through products and solutions will lead to the expansion of business opportunities.
Shifting to a Resource-recycling Business
The unsustainable business model of mining, using, and then disposing of resources will eventually reach its limits. Hitachi Construction Machinery Group contributes to resource recycling through its value-chain business, which consists of businesses such as parts remanufacturing business that uses advanced recycling technology to reduce resource input, and rental and used equipment business that extends the operating life of machines through maintenance and contributes to reducing the number of discarded vehicles, also parts and service business that work to extend the lifespan of machines through appropriate maintenance using IoT.
