Hitachi Construction Machinery

Global

Scope 3

HCM Group has been calculating CO2 emissions over product lifecycle since FY 2007, and CO2 emissions over the entire supply chain, including Scope 3, since 2009. These emissions calculations are carried out in line with the “Fundamental Guidelines Regarding the Calculation of Greenhouse Gas Emissions by Supply Chains” produced by the Ministry of the Environment and the Ministry of Economy, Trade and Industry. We receive third-party evaluation of primary categories including category 11 (Usage of sold products) and category 1 (Materials), which both have particularly high emissions within Scope 3.

The figures for Category 11 and Category 1 were calculated using the following methods.

◇ Category 11: Calculation of the CO2 emissions volume from the use of sold products
The six main domestic and international product groups covered:
mini excavators, excavators, wheel loaders, dump trucks, compaction equipment, and crawler cranes

(1) CO2 emissions volume from each product (per unit) [Mt/year] = {average annual operating hours [hrs./year] x average engine power [kW] x fuel consumption rate (fixed) [ℓ/kW per hour]*1 x fuel consumption improvements*2 x basic unit of CO2 [kg/ℓ]} x engine loading ratio*3/1,000
*1 Based on the MLIT Loss Calculation Table and table by JCMA (Japanese Construction Mechanization Association)
*2 Productivity (digging force, actual fuel consumption) scaling ratio against the standard machine (2006)
*3 Comparison of idling state and work with the engine running

(2) Annual CO2 emissions volume from the use of sold products
Using the calculation in (1) above, the annual CO2 emissions volumes for each product are totaled from the unit sales for each product each year, and further multiplied by the number of useful years for each product
*Mini excavators, excavators, wheel loaders, and dump trucks, are multiplied by seven years (for domestic use) and nine years (for international use)
*Compaction equipment and crawler cranes are multiplied by a uniform 10 years

◇Category 1: Calculation of CO2 emissions volume from purchased goods and services
The six main domestic and international product groups covered:
mini excavators, excavators, wheel loaders, dump trucks, compaction equipment, and crawler cranes
Calculated by multiplying the amount of product materials HCM has purchased or obtained by the basic unit of CO2 emissions from the product’s resource consumption stage to the production stage

(1) CO2 emissions volume from product materials (t-CO2) = weight per unit (t/unit)*1 x units shipped x (steel weight (kg) ÷ total materials weight (kg)) x basic unit of CO2 emissions volume from iron and steels (kg/kg)*2
*1 Weight per unit: The weight of main models in each model groups is applied
*2 Reference for basic units: IDEA (Inventory Database for Lifecycle Analysis) developed and supplied by the National Institute of Advanced Industrial Science and Technology and the Japan Environmental Management Association for Industry

(2) CO2 emissions volume from purchased goods and services
Totals the CO2 emissions volume for each product based on (1) above

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CO2 emission ratio for the entire supply chain

Scope Category Classification CO2 Emission
(t)
Third party Evaluation Year on year rate Total Scope Cover Rate Criterion, Method, Prerequisite, Other
Scope1 Direct Emission 51,188 15.0% All Domestic and Overseas Production/Non-production Bases for Consolidation 100% Conversion Coefficient Source: Amendment to the Energy Conservation Act)Calculation Method: Amendment to the Energy Conservation Act)
Scope2 Indirect emissions from energy generation (electrical power etc) 137,234 5.8% All Domestic and Overseas Production/Non-production Bases for Consolidation 100%
Scope 3 (upstream) 1 Purchased Products/Services 1,477,680 17.4% The six main domestic and international product groups 100% Detail is given above as category 1
2 Capital Goods 103,196 2.7% All Domestic and Overseas Production/Non-production Bases for Consolidation 100% Conversion Coefficient Source: The emissions basic unit database for the calculation of an organization’s greenhouse gas emissions generated by the supply chain (ver.2.1)Calculation Method: Fundamental Guidelines Regarding the Calculation of Greenhouse Gas Emissions by Supply Chains Ver2.1

Note) Purchased fuels are excluded in category 3

3 Fuel and energy related activity not covered by Scope 1 & 2 8,225 11.6% All Domestic and Overseas Production/Non-production Bases for Consolidation 100%
4 Shipping, delivery (upstream) 9,331 41.7% HCM main production facilities 40% Conversion Coefficient Source: Amendment to the Energy Conservation Act)Calculation Method: Amendment to the Energy Conservation Act)
5 Waste generated through normal operations 10,344 ▲12.8% All Domestic and Overseas Production/Non-production Bases for Consolidation, Emissions caused by the shipping of waste produced in-house are the target 100% Emissions from waste treatment that is operated in a company (Emissions from transport is calculated in category 9)

Conversion Coefficient Source: The emissions basic unit database for the calculation of an organization’s greenhouse gas emissions generated by the supply chain (ver.2.1)Calculation Method: Fundamental Guidelines Regarding the Calculation of Greenhouse Gas Emissions Generated by Supply Chains Ver2.1

 

6 Business Travel 3,110 11.6% All Domestic and Overseas Production/Non-production Bases for Consolidation 100% Conversion Coefficient Source: The emissions basic unit database for the calculation of an organization’s greenhouse gas emissions generated by the supply chain (ver.2.1)Calculation Method: Fundamental Guidelines Regarding the Calculation of Greenhouse Gas Emissions Generated by Supply Chains Ver2.1

Note) Number of employees is as of Dec. 1, 2017

7 Employee Commuting 12,526 11.0% All Domestic and Overseas Production/Non-production Bases for Consolidation 100%
8 ease Assets (upstream) 0 100%
Scope 3 (downstream) 9 Shipping, Delivery (downstream) 22,746 ▲11.7% Main Domestic and Overseas Production Bases for Consolidation 90% Conversion Coefficient Source: Amendment to the Energy Conservation Act) Calculation Method: Amendment to the Energy Conservation Act)

Note)
– Own expense is included
– Transporting waste in included (exclude oversea’s)
– Transport between countries is excluded

10 Manufacturing of Sold Products 0 100%
11 Usage of Sold Products 16,404,736 1.6% The six main product groups in operation globally
(Note)
100% Detail is given above as category 11
12 Disposal of Sold Products 39,310 ▲21.8% All products of the HCM Group that are scrapped due to end of life etc. 100% Conversion Coefficient Source: The emissions basic unit database for the calculation of an organization’s greenhouse gas emissions generated by the supply chain (ver.2.1) Calculation Method: Fundamental Guidelines Regarding the Calculation of Greenhouse Gas Emissions by Supply Chains Ver2.1
13 Lease Assets (downstream) 0 100%  –
14 Franchises 0 100%
15 Investments 0 100%  –

※ “―”: Non-applicable item
(Note) mini-excavators, excavators, wheel loaders, dump trucks, compaction equipment, cranes

Energy/CO2 Reduction Heat Conversion from the Amount of Energy Reduction (GJ) Amount of CO2 Saving (t-CO2) Criterion, Method, Prerequisite, Other
Energy/CO2 Reduction from Products/Services 47,544,968 3,600,000 Conversion Coefficient Source: IEA, or the Public Works Quantity Survey Criterion from the Ministry of the Land, Infrastructure, Transport and Tourism Calculation Method: Amount of energy reduction = (amount of energy used by reference product – amount of energy used by developed products) x no. of products sold x contribution rate
Reference model: FY 2005 Products and Services
CO2 emissions from biological sources 40.632 2.8 Fuel containing BDF (Bio Diesel Fuel) is used in the forklifts. Reference for conversion coefficient: Revised Energy Conservation Law; Calculation Method: Revised Energy Conservation Law
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