Climate Change Data

Hitachi Zosen Inova

Climate Impact & Sustainability Data (2020-04 to 2020-09, 2021, 2022, 2024)

Reporting Period: 2020-04 to 2020-09

Environmental Metrics

ESG Focus Areas

  • Clean energy and water
  • Environmental conservation
  • Disaster resilient & prosperous community
  • Climate change
  • Environmental pollution
  • Shortages of energy and water
  • Natural disasters
  • Sustainable Development Goals (SDGs)

Environmental Achievements

  • Received orders for reconstruction of the Edogawa Incineration Plant, construction and operation of Energy-from-Waste (EfW) plants, and construction of a sludge recycling center.
  • Working on the world’s first methanation project using CO2 emitted from EfW plant to build a new carbon cycle society model for EfW plants.
  • Completion of the installation and on-site trial run of the first seabed-mounted flap-gate type seawall.

Social Achievements

  • Commenced the operation of Yonago Land-Based Aquaculture Center, a demonstration facility of Japan’s first land-based recirculating aquaculture system for chub mackerel.
  • Recording of food processing using the food defense & management recording system, and detection and removal of foreign materials mixed in cut vegetables and food ingredients using foreign substance separation equipment.

Governance Achievements

  • Launched the new medium-term management plan “Forward 22”

Climate Goals & Targets

Environmental Challenges

  • Impact of COVID-19 on business
  • Decline in highly profitable projects
  • Decrease in large-scale projects
  • Decrease in orders received for marine diesel engines, press machines for automotive industry and process equipment as a result of a decrease in capital investment caused by COVID-19
Mitigation Strategies
  • Maintained business execution system through work-style reform, such as simplifying the operation and improving its efficiency and adopting the teleworking system.
  • Securing the sturdiness of the supply chain and promoting the utilization of digital technologies such as IoT and AI.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: SDGs

Sustainable Products & Innovation

  • Desalination plants
  • Movable filtration systems
  • Sewage and industrial wastewater treatment systems
  • Energy-from-Waste (EfW) plants
  • Biomass power generation plants
  • Wind and solar power generation plants
  • Fiber filtration system for combined sewage system
  • Seabed-mounted flap-gate type seawalls
  • Shield tunneling machines
  • Foreign substance separation equipment

Reporting Period: 2021

Environmental Metrics

Total Carbon Emissions:24,823 tCO2e/year
Total Energy Consumption:4,885 TJ/year
Water Consumption:1.04 million t/year
Waste Generated:9,431 tons/year

ESG Focus Areas

  • Environmental preservation and protection
  • Corporate governance
  • Compliance
  • Creation of new products and new businesses
  • Supply chain
  • Occupational health and safety
  • Climate change
  • Resource cycle
  • Water shortage
  • Natural disasters
  • Deterioration of infrastructure facilities
  • Low birthrate and aging in Japan
  • Urbanization of emerging countries

Environmental Achievements

  • CO2 emissions were 42% lower than the base year of fiscal 2013, making significant progress toward the fiscal 2030 target of 50% reduction
  • Recycling rate of 93.2%
  • Landfill ratio of 2.7%

Social Achievements

  • Improved employee satisfaction, particularly work-life balance (72.9% satisfied)
  • Designated a Health & Productivity Management Outstanding Organization
  • Initiatives to support childcare leave, including a 100% Childcare Leave by Men Declaration

Governance Achievements

  • Annual evaluation of the effectiveness of the Board of Directors
  • Response to corporate governance code
  • Establishment of a Sustainability Promotion Committee

Climate Goals & Targets

Long-term Goals:
  • Net zero emissions by 2050
Medium-term Goals:
  • Achieve effectively zero emissions by FY2050
  • Raise operating income margin to 10% by 2030
  • At least 4% of management positions are held by women by FY2025
  • Train 500 DX human resources by 2025
Short-term Goals:
  • Reduce CO2 emissions by 50% compared to FY2013 by FY2030

Environmental Challenges

  • Climate change risks and opportunities (physical and transition risks)
  • Supply chain disruptions
  • Securing operators due to population decline in Japan
  • Intensified competition to acquire human resources
  • Declining quality of human resources
  • Unpredictable risk events (pandemic, geopolitical risks, natural disasters)
  • Soaring raw material prices
  • Weak yen
  • Disruptions in the supply chain
Mitigation Strategies
  • Scenario analysis forecasting energy-from-waste, biogas, and wind power until 2050
  • Development of automation and remote supervision technologies
  • Expansion of operation and maintenance services
  • Improving fundraising ability by upgrading our corporate credit rating
  • Separation of non-core assets and businesses
  • Introduction of the SAP enterprise resource planning system
  • Active investment in fields with high conformity with the Group’s vision
  • Strengthening risk management, including escalation clauses and confirmation of procurement costs
  • Careful selection of local partners
  • Use of public trade insurance

Supply Chain Management

Supplier Audits: Self-Assessment Questionnaire (SAQ) to main business partners

Responsible Procurement
  • Fair and impartial transactions
  • Protection of confidential information
  • Promotion of environmental protection
  • Compliance with laws
  • Mutual growth based on trust relationship
  • Promotion of development procurement

Climate-Related Risks & Opportunities

Physical Risks
  • Intensifying natural disasters
Transition Risks
  • Carbon taxes
  • Regulatory changes
  • Changes in energy mix
Opportunities
  • Increased demand for EfW plants, biogas plants, and offshore wind power plants

Reporting Standards

Frameworks Used: IIRC

Certifications: ISO 14001, ISO 9001

UN Sustainable Development Goals

  • SDG 6
  • SDG 7
  • SDG 9
  • SDG 11
  • SDG 13
  • SDG 14
  • SDG 15

The Group’s business policies and business-based activities contribute to achieving SDGs.

Sustainable Products & Innovation

  • Kompogas® facilities
  • Methanation facilities
  • Offshore wind power
  • Space sterilizer ACSTERIA
  • Marine SCR systems
  • Hydrogen generation systems

Awards & Recognition

  • Deal of the Year Award (PFI Awards 2021)
  • Special award at the 2nd Deep Learning Business Utilization Awards

Reporting Period: 2022

Environmental Metrics

Total Carbon Emissions:224.5 kt-CO2e/year (FY2022)
Scope 1 Emissions:208.6 kt-CO2e/year (FY2022)
Scope 2 Emissions:15.9 kt-CO2e/year (FY2022)
Scope 3 Emissions:7.2 kt-CO2e/year (FY2022, reference value)
Total Energy Consumption:4,611 TJ/year (FY2022)
Water Consumption:1,426,000 m3/year (FY2022)
Waste Generated:8,091 tons/year (FY2022)

ESG Focus Areas

  • Carbon neutrality
  • Resource circulation
  • Safe & prosperous community development
  • Sustainable procurement
  • Maximization of people’s well-being
  • Enhancement of corporate governance
  • Maximization of the environment’s recovery power

Environmental Achievements

  • Reduced CO2 emissions by 39.3% from 2013 levels in FY2022 (Scope 1 & 2)
  • Products (including licensees) reduced CO2 by 22.06 million tons per year worldwide in FY2022
  • Final landfill rate of 2.4% and recycling rate of 92.7% in FY2022

Social Achievements

  • Men taking childcare leave: 49.5% in FY2022
  • Employee engagement index: 55.9% in FY2021, improved by approximately 5% in FY2023
  • Ratio of female employees: 8.4% in FY2022
  • Ratio of female new graduate hires: three-year average of 42.4% for administrative jobs and 11.2% for technical jobs

Governance Achievements

  • Established the Sustainability Promotion Committee in March 2022
  • Established an Environmental Data Management Committee in March 2022
  • Established the Investment Committee in April 2023 to manage business investment risks
  • Increased independent outside directors to half of the Board in June 2023

Climate Goals & Targets

Long-term Goals:
  • Achieve carbon neutrality across the Group by FY2050
  • Realize zero environmental impact and maximize people’s well-being by FY2050
Medium-term Goals:
  • Reduce Scope 1, 2, and 3 GHG emissions by 50% from 2013 levels by FY2030
  • Increase overseas sales ratio to 50% of net sales and operating income by FY2030
  • Achieve 50% of net sales from O&M services by FY2030
  • Increase operating income margin to 10% by FY2030
  • Achieve an annual CO2 reduction effect of approximately 40 million tons by FY2030
Short-term Goals:
  • Reduce Scope 1 and 2 GHG emissions by 34% from 2013 levels by FY2025
  • Increase overseas sales ratio to 40% by FY2025
  • Achieve 50% of net sales from O&M services by FY2025
  • Improve employee engagement index to 70% by FY2025
  • Reduce defect cost to sales ratio to 0.5% or less by FY2025
  • Achieve zero lost time injuries by FY2025

Environmental Challenges

  • Improving operating income margin (4.1% in FY2022, target 10% by 2030)
  • Supply chain disruptions
  • Soaring raw material prices
  • Geopolitical risks
  • Technical problems and defect rates
  • Securing talent
Mitigation Strategies
  • Implementing Forward 25 medium-term management plan focusing on sustainable growth, creation of growth businesses, and sustainable management
  • Expanding O&M services and improving profitability of new EPC projects
  • Expanding overseas businesses
  • Promoting business structural reforms and portfolio management
  • Strengthening human capital
  • Promoting DX strategies
  • Strengthening risk management system

Supply Chain Management

Supplier Audits: 698 suppliers surveyed in FY2022 (approx. 85% of non-consolidated order value)

Responsible Procurement
  • Self-Assessment Questionnaire (SAQ) for suppliers
  • Formulating Basic Procurement Principles with an emphasis on sustainability

Climate-Related Risks & Opportunities

Physical Risks
  • Worsening natural disasters (floods, lightning strikes, etc.)
Transition Risks
  • Introduction of carbon taxes
  • Higher raw material costs
  • Changes in policies, regulations, and energy mix
  • WtE plants may no longer be treated as renewable energy
Opportunities
  • Expansion of overseas markets for waste treatment
  • Increased demand for biogas and offshore wind power plants
  • Expansion of the waste-to-X business

Reporting Standards

Frameworks Used: GRI Standards, TCFD

Certifications: ISO 14001

Sustainable Products & Innovation

  • Waste-to-fuel conversion technologies
  • Biogas plants
  • Wind power generation
  • Hydrogen generation systems
  • Methanation equipment
  • LNG, methanol, and ammonia-fueled marine diesel engines
  • Ammonia tanks
  • Casks and canisters for spent nuclear fuel

Awards & Recognition

  • Highest Rating in DBJ (Development Bank of Japan) Environmentally Rated Loan Program (13 consecutive years)
  • Digital Transformation Certified Company (Ministry of Economy, Trade and Industry)
  • New Diversity Management Selection 100 Winner (Ministry of Economy, Trade and Industry) (2019)
  • 2023 Certified Health & Productivity Management Outstanding Organizations (Ministry of Economy, Trade and Industry)
  • ERUBOSHI (second stage) Certification (Ministry of Health, Labour and Welfare)
  • “Kurumin” Certification (Ministry of Health, Labour and Welfare) (2013, 2015, and 2019)

Reporting Period: 2024

Environmental Metrics

ESG Focus Areas

  • Decarbonization
  • Sustainable Fuel Use

Environmental Achievements

  • Provided guidance on main engine operation using biofuel to reduce greenhouse gas emissions

Climate Goals & Targets

Environmental Challenges

  • Potential reduction in component lifetime due to biofuel use
  • Lower calorific value of some biofuels may require adjustments to fuel supply systems
  • Compatibility issues with some materials and elastomers
  • Lack of long-term experience with biofuels in marine engines
  • Uncertainty regarding the suitability of some biofuel types
Mitigation Strategies
  • Provided technical guidelines and recommendations for biofuel operation
  • Recommended checking compatibility of materials and elastomers with biofuel
  • Advised on adjustments to fuel supply systems for biofuels with lower calorific value
  • Recommended regular monitoring and maintenance of fuel systems
  • Emphasized the importance of fuel analysis and adherence to relevant standards

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ISO 8217, EN 14214, ASTM D6751, ASTM D240, IMO MEPC 79, IMO MEPC 80

UN Sustainable Development Goals

  • 7
  • 13

Use of biofuels contributes to renewable energy (SDG 7) and climate action (SDG 13).