Hitachi Construction Machinery

Global

Environmental Value Creation Initiatives

HCM Group is aiming for a sustainable society and working to create environmental value.

HCM Group is formulating an environmental CSV (Creating Shared Value) strategy to achieve an environmental vision based on the three key themes of “Low-Carbon Society”, “Resource Efficient Society” and “Harmonized Society with Nature.”

This environmental CSV is to address social issues through HCM’s businesses, products, and solutions. Our long-term goals up to FY2030 are developed in line with “Hitachi Environment Innovation 2050.” We have concentrated these long-term targets into a medium-term plan and environmental action plan for individual fiscal years, while formulating four categories and more than 30 KPIs to promote environmental conservation activities.

Environmental CSV Policies

Moving towards the realization of a low-carbon/recycling-oriented society which is strong on climate change, efforts to build “environmentally conscious infrastructure” are expanding globally.

Together with our stakeholders, we intend to pursue low carbon/resource recycling in global infrastructure development through “construction machinery and systems equipped with superior environmental technology” and “development with the vision to solve environmental issues,” as well as contributing to infrastructure that can respond to disasters caused by climate change.

Our three policies aimed at creating environmental value

1. Manufacturing of Construction Equipment

– Work with our suppliers to realize a highly streamlined supply chain that lowers environmental impact.

2. Utilization of Construction Equipment

– Collaborate with our customers to increase the efficiency of construction machinery and systems during use.

– Improve infrastructure and business processes that positively contribute to the environment.

3. Challenge with and through Construction Equipment

– Together with people around the world, face the challenge of creating environmentally-friendly infrastructure in new fields and areas.

These policies are directly connected to HCM Group’s long-term corporate value creation aimed at “To pass on a productive environment and prosperous cities to future generations. Hitachi Construction Machinery Group helps to create comfortable living spaces.”

HCM Group Products and Environmental Value

HCM Group is working towards the realization of a low-carbon, recycling-oriented society, and coming from both product and solution angles in its three product themes, is tackling the task of creating environmental value via its business.

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The Specifics of Environmental Risks and Opportunities

Policy for Environmental Risks and Opportunities

HCM Group has positioned the uncertainty attributable to “climate change” and “water” as a serious management task in addition to the environmental risk analysis that we have conducted to date, and are formulating a CSV strategy aimed at minimizing the risks of “climate change” and “water”, while maximizing our business opportunities.
As we examine risks and opportunities under the categories of “regulation”, “physical impact”, and “others”, we quantitatively analyze occurrence frequency, occurrence time as well as impact level, and determine materiality.

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 2°C scenario, and the urgent risk and chronic risk of physical risks in the 4°C scenario. Typical risks in the 2°C scenario and the 4°C scenario are as follows.

Regulatory Risks and Opportunities
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
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 HCM Group has been working on can contribute to adaptation, and we believe this will be a new business opportunity for HCM Group.

2. Water-Related Risks and Opportunities

 Initiatives for Water-Related Risks and Opportunities
HCM 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. HCM 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. HCM 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.

CSV Long-term Target

CSV Long-Term Plan

As at March, 2020

CSV Target 2010 2020 2030 Progress against 2030 Target
CO2 saving rate by products Reference Year 19% 33% 64%
Fuel Reduction Target of Products 2010 2020 2030 Progress
Hydraulic Excavators Reference Year 30% 35% 63%
Wheel Loaders 30% 40% 32%
Hybrid Hydraulic Excavators 45% 50% 80%
Basic Unit Target in Production 2005 2020 2030 Progress
Improvement Rate of Energy Basic unit Reference Year 20% 40% 84%
Improvement Rate of Waste Basic unit 25% 40% 103%
Improvement Rate of Water Basic unit 42% 50% 112%

*1 GHG Emission (Greenhouse Gas Emission): At our company, CO2 is mainly applied
*2 LCC: Life Cycle Cost

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