Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Exceeded the target of 21% improvement in green points for domestic sites (based on fiscal 1998 levels), achieving a 37.2% improvement.
• Reduced production-related CO2 emissions by 15% compared with fiscal 1990 levels.
• Reduced final disposal volumes to 64%.

Social Achievements

• Established Hitachi You and I, a subsidiary employing mentally disabled persons.
• Implemented Hitachi Value, a set of standards outlining a code of behavior and shared values for employees.
• Actively participated in social contribution activities, including donations to disaster relief efforts.

Governance Achievements

• Established the Senior Executive Committee for Environmental Policy.
• Implemented an environmental management system based on ISO 14001 standards.
• Introduced a CO2 Emissions Reduction System to assess and incentivize emission reduction targets.

Climate Goals & Targets

Environmental Challenges

• Decrease in unit values due to a decline in sales affecting energy saving at facilities.
• Failure to achieve the goal of abolishing the use of lead solders in fiscal 2001.
• Incident involving the release of CFCs into the atmosphere by a Hitachi affiliate.

Mitigation Strategies

• Strengthening activities in areas where green points dropped.
• Continuing technology development to abolish lead solders (new target of fiscal 2003).
• Taking responsibility for the CFCs incident and working with recycling contractors to improve audit quality and strengthen management practices.

Supply Chain Management

Supplier Audits: Completed surveys on 2000 suppliers by March 2002.

Responsible Procurement

• Green Procurement Guidelines distributed to suppliers.
• Requesting information from suppliers regarding environmental preservation activities and product details.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Global Reporting Initiative (GRI), Ministry for the Environment (Japan) Environmental Report Guidelines, Ministry for the Environment (Japan) Environmental Performance Indicators for Business, Ministry of Economy, Trade and Industry (Japan) Environmental Reporting Guidelines

Certifications: ISO 14001 (manufacturing base in 1999, aiming for all non-manufacturing sites in 2002)

Sustainable Products & Innovation

• Eco-products (240 products, 1,504 model types)

Awards & Recognition

• Green Award for Social Contribution

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Increased the ratio of Eco-Product sales to total sales to 47 percent.
• Reduced CO2 emissions in Japan by 259,000 tonnes (86% of 1990 level).
• Reduced CO2 emissions per unit production outside Japan by 3.3% (2003 baseline).

Social Achievements

• Distributed Eco Badges to all 400,000 Hitachi employees to foster environmental awareness.
• Launched environmental programs in preschools and elementary schools in China.
• Participated in community activities in Singapore raising environmental awareness.

Governance Achievements

• Established an integrated environmental management system (EMS) covering the entire Hitachi Group.
• Achieved RoHS compliance in July 2006.
• Made significant progress towards REACH compliance.

Climate Goals & Targets

Environmental Challenges

• Increased CO2 emissions outside Japan due to production transfers and new factories.
• Increased greenhouse gas emissions (HFCs, PFCs, SF6) due to expanded production.
• Increased CO2 emissions from transportation due to increased shipments of basic materials.

Mitigation Strategies

• Investing in energy-saving measures (7.7 billion yen in Japan).
• Systematically installing scrubbers to reduce PFC emissions.
• Implementing a modal shift to rail and marine shipping to reduce transportation energy consumption.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Green Procurement Guidelines

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Guidelines 2006, Global Reporting Initiative Environmental Reporting Guidelines (FY 2007 version)

Certifications: ISO 14001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Eco-Products
• Super Eco-Products
• Energy-efficient products
• Products with reduced environmental burden

Awards & Recognition

• Environmental Goo Grand Prize 2008
• GREEN 21 Awards
• Minister of the Environment Award for Activities to Prevent Global Warming (2006)
• Eco-Rail Mark

Environmental Metrics

ESG Focus Areas

• Prevention of Global Warming
• Conservation of Resources
• Preservation of Ecosystem

Environmental Achievements

• Reduced CO2 emissions by 21% in Japan (from fiscal 1990 levels) and by 5% outside Japan (per unit of production, compared with fiscal 2003 levels)
• 53% of all sales were from environmentally conscious Eco-Products (exceeding the 48% target)
• Achieved all targets in the Fiscal 2009 Environmental Action Plan

Social Achievements

• Signed a memorandum of agreement with China’s NDRC on friendly collaboration for establishing a low-carbon society and resource recycling
• Reached an agreement with a Canadian electric power company for R&D on carbon capture and storage (CCS) and other low-carbon technologies
• Launched the GREEN 21 Award program to encourage environmental activities and disseminate best practices

Governance Achievements

• Introduced an in-house company system in October 2009, giving business groups and subsidiaries the same responsibilities and authority as listed Group companies
• Implemented the Hitachi Group Ecodesign Management Guidelines to establish environmentally conscious design procedures
• Received third-party reviews on methods for calculating reduced CO2 emissions for 10 products

Climate Goals & Targets

Environmental Challenges

• Resource depletion of metals
• Water shortages in many countries
• Ecosystem destruction due to water pollution

Mitigation Strategies

• Developing technology for separating and recovering rare earth magnets from end-of-life products
• Providing water and sewage facilities, as well as water treatment
• Developing technology for ballast water purification

Supply Chain Management

Responsible Procurement

• Green Procurement Guidelines

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Guidelines (G3), Environmental Reporting Guidelines (2007), Ministry of the Environment, Japan, Environmental Reporting Guidelines 2001—With Focus on Stakeholders, METI, Japan

Certifications: ISO 14001

Third-party Assurance: Bureau Veritas Japan Co., Ltd.

Sustainable Products & Innovation

• Eco-Products
• Super Eco-Products

Awards & Recognition

• Dow Jones Sustainability World Indexes (DJSI World)
• SAM Sustainability Yearbook 2010 (Silver Class)
• Green IT Award 2009
• 36th Environment Prize
• 19th Global Environment Awards
• 13th Environmental Communication Awards

Environmental Metrics

ESG Focus Areas

• Global Warming Prevention
• Resource Conservation
• Ecosystem Preservation
• Human Rights
• Diversity Management
• Supply Chain Management
• Corporate Governance

Environmental Achievements

• Helped reduce CO2 emissions by 22.74 million tonnes (target almost reached)
• Increased sales ratio of Eco-Products to 84%
• Reduced CO2 emissions per unit production by 22%
• Reduced water use per unit production outside Japan by 52%
• Reduced waste generation per unit production by 9% (High Functional Materials Group) and 16% (Assembly Industry Group)

Social Achievements

• Created the Hitachi Group Human Rights Policy
• Increased the ratio of female employees to 16.0 percent
• Increased the employment ratio of people with disabilities to 2.02% at Hitachi, Ltd. and 1.95% for the entire Group
• Implemented social contribution activities based on medium-term themes for education, the environment, and social welfare

Governance Achievements

• Appointed a majority of independent outside directors to the Board of Directors
• Established CCOs in all in-house and Group companies, as well as regional CCOs
• Implemented annual Corporate Ethics Month

Climate Goals & Targets

Environmental Challenges

• Difficult conditions across the Eurozone
• Global warming from greenhouse gases
• Water shortages and pollution
• Increasingly global and complex risks
• Growing geographic scope of operations increasing business travel to dangerous areas
• Counterfeit products
• Supply chain disruptions

Mitigation Strategies

• Strengthening governance and risk management systems
• Developing and implementing human rights due diligence
• Implementing business continuity plans (BCPs)
• Strengthening compliance framework
• Operating a 24-hour international travel call center system
• Conducting supplier audits
• Anti-counterfeiting activities
• CSR procurement initiatives

Supply Chain Management

Supplier Audits: 12 supplier audits in fiscal 2012 (10 in China, one in Korea, and one in Indonesia)

Responsible Procurement

• Hitachi Guidelines for Procurement Activities
• Hitachi Group Supply Chain CSR Deployment Guidebook
• Green procurement initiatives

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters

Transition Risks

• Changes in energy supply and demand

Opportunities

• Development of energy-efficient products and services

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Guidelines (G3.1), ISO 26000: 2010

Certifications: ISO 14001

Third-party Assurance: Bureau Veritas Japan Co., Ltd. (environmental); Ernst & Young Sustainability Co., Ltd. (governance and social)

Sustainable Products & Innovation

• Eco-Products
• Eco-Products Select
• High-efficiency gas turbine generators
• Multi-split air-conditioning system
• PC server HA8000/RS220
• ROPITS (Robot for Personal Intelligent Transportation System)
• Highly efficient permanent magnet synchronous motor

Awards & Recognition

• Dow Jones Sustainability World Indexes (DJSI World)
• United Nations Global Compact
• Energy Conservation Grand Prize 2012
• 9th Eco-Products Awards

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced CO2 emissions through products by 27.47 million tonnes (exceeding the target of 24 million tonnes)
• Increased Eco-Product sales ratio to 89%
• Increased number of Eco-Products Select models to 210
• Reduced energy use per unit by 14% (exceeding the target of 11%)
• Reduced waste and valuables generation per unit by 24% (exceeding the target of 19%)
• Reduced water use per unit (outside Japan) by 39% (exceeding the target of 26%)
• Reduced VOC atmospheric emissions per unit by 43% (exceeding the target of 38%)

Social Achievements

• Launched Global Human Capital Management Strategy
• Conducted Hitachi Insights, a global employee survey
• Increased number of female managers in Japan
• Implemented Work-Life Balance-Up! Month
• Launched Women's Interactive Network (WIN) in Europe
• Developed a new e-learning program on building an inclusive workplace in Europe
• Exceeded the legally mandated employment rate for people with disabilities in Japan

Governance Achievements

• Adopted the committee system for corporate governance
• Appointed a Hitachi Group Chief Compliance Officer (CCO)
• Formulated the Hitachi Group Human Rights Policy
• Launched the Global Brand Campaign
• Reinforced risk management system
• Implemented Hitachi Group Conflict Minerals Procurement Policy

Climate Goals & Targets

Environmental Challenges

• Climate change risks (regulatory changes, market shifts, damage to facilities from extreme weather)
• Supply chain risks (human rights violations, conflict minerals)
• Global corruption risks

Mitigation Strategies

• Developing a comprehensive enterprise risk management framework
• Implementing human rights due diligence
• Conducting CSR audits of suppliers
• Developing BCPs for key operations
• Strengthening compliance framework
• Using the US Foreign Corrupt Practices Act Resource Guide as a reference

Supply Chain Management

Supplier Audits: 16 supplier audits in China and the rest of Asia in FY2013

Responsible Procurement

• Hitachi Guidelines for Procurement Activities
• Hitachi Group Supply Chain CSR Deployment Guidebook
• Green Procurement Guidelines
• Conflict Minerals Procurement Policy

Climate-Related Risks & Opportunities

Physical Risks

• Damage to facilities from extreme weather
• Water shortages

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Use of IT for big data analysis

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Guidelines (G3.1), ISO 26000: 2010

Certifications: ISO 14001

Third-party Assurance: Ernst & Young Sustainability Co., Ltd., Bureau Veritas Japan Co., Ltd.

Sustainable Products & Innovation

• Eco-Products
• Eco-Products Select
• Environmentally conscious products and services

Awards & Recognition

• Dow Jones Sustainability World Indexes (DJSI World)
• Nadeshiko Brand designation
• Diversity Management Selection 100
• Kurumin certification
• Prize for Excellence in the 17th Environmental Communication Awards

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Eco-Product sales ratio rose to 93% (target: 88%), contributing to a reduction of an estimated 32.19 million tonnes of CO2 emissions (target: 28 million tonnes).
• Reduced energy use per unit by 16% (target: 13%).
• Reduced waste and valuables generation per unit by 25% (target: 21%).
• Reduced water use per unit (outside Japan) by 43% (target: 28%).
• Reduced VOC atmospheric emissions per unit by 43% (target: 39%).

Social Achievements

• Appointed female head of CSR and Environmental Strategy Division as senior executive-level director.
• Hitachi Insights survey showed improvements in employee engagement across various categories.
• Employment ratio of people with disabilities topped Japan's legally mandated ratio (2.03%).
• Launched the Hitachi Group Career Seminar for Young Women to support women's career development.
• Implemented the Hitachi Group Women Leaders’ Meeting to enhance networking and career advancement for women.

Governance Achievements

• Increased patent application ratio outside Japan from 47% in FY2009 to 59% in FY2014.
• Implemented human rights due diligence guidance document.
• Established a global grading system for job evaluations across the Hitachi Group.

Climate Goals & Targets

Environmental Challenges

• Aging infrastructure in developed countries and chronic power shortages in emerging countries.
• Fluctuations in renewable energy output affecting power grid stability.
• Extreme weather events causing natural disasters and impacting business operations.
• Supply chain risks related to human rights and environmental issues in emerging markets.
• Growing concerns about cybersecurity threats to social infrastructure.

Mitigation Strategies

• Developed integrated generation/transmission and distribution systems for stable electricity supply.
• Developed energy storage solutions to balance supply and demand with renewable energy.
• Developed wide-area grid stability solutions using IT to prevent blackouts.
• Implemented CSR monitoring and audits of suppliers to mitigate risks.
• Implemented “defense in depth” strategies to protect against cyberattacks on control systems.

Supply Chain Management

Supplier Audits: 20 suppliers audited in FY2014

Responsible Procurement

• Hitachi Guidelines for Procurement Activities
• Hitachi Group Supply Chain CSR Deployment Guidebook
• CSR Monitoring (self-checks)
• Green Procurement Guidelines
• Conflict Minerals Procurement Policy

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events, flooding

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Expansion of business in energy-saving equipment and high-efficiency devices; growth in disaster-prevention information systems and other disaster-related products and services.

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Guidelines (G4), ISO 26000

Certifications: ISO 14001

Third-party Assurance: KPMG AZSA Sustainability Co., Ltd. and Bureau Veritas Japan Co., Ltd.

Sustainable Products & Innovation

• Eco-Products, Eco-Products Select

Awards & Recognition

• Prize for Excellence in Environmental Reporting at the 18th Environmental Communication Awards
• Climate Performance Leadership Index 2014 (CDP)
• Grand Prize for Excellence in Energy Efficiency and Conservation (Hitachi Appliances Inc.)
• Prime Minister’s Commendation for Efforts Toward the Formation of a Gender-Equal Society (Chairman Emeritus Takashi Kawamura)

Environmental Metrics

ESG Focus Areas

• Social Innovation
• Collaborative Creation
• Environment
• Corporate Governance
• Human Rights
• Labor Practices
• Fair Operating Practices
• Customer Satisfaction
• Community Involvement and Development

Environmental Achievements

• Achieved 95% Eco-Product sales ratio
• Reduced energy use per unit by 16% (compared to FY2005)
• Reduced waste and valuables generation per unit by 28% (compared to FY2005)
• Reduced water use per unit by 41% outside Japan (compared to FY2005)
• Reduced VOC atmospheric emissions per unit by 50% (compared to FY2006)
• 36.49 million metric tons of CO2 emission reductions through products and services

Social Achievements

• Increased number of female managers in Japan to 3727 (6.4% of total)
• Achieved 2.08% employment rate of people with disabilities at Hitachi, Ltd. and 2.14% for the entire Group in Japan
• Reduced occupational accident rate to 0.07 (January to December)
• Implemented human rights due diligence in procurement
• Implemented various work-life balance support systems

Governance Achievements

• Strengthened Group-wide compliance framework globally
• Implemented a Group-wide whistleblowing system
• Established a set of tax-related regulations for Group-wide compliance
• Revised Hitachi Global Compliance Program
• Implemented a new business structure to bolster frontline functions and accelerate collaborative creation with customers

Climate Goals & Targets

Environmental Challenges

• Global warming, resource depletion, ecosystem destruction
• Supply chain disruptions due to natural disasters
• Corruption risks in global operations
• Counterfeit goods
• Water-related risks

Mitigation Strategies

• Established Hitachi Environmental Innovation 2050 targets
• Developed procurement BCPs
• Implemented a consistent compliance structure across the Hitachi Group
• Operates a rigorous regime against counterfeit goods
• Surveys business sites to minimize water-related risks, and promotes Water Solutions business

Supply Chain Management

Supplier Audits: 20/year

Responsible Procurement

• CSR monitoring (self-checks) of 218 suppliers outside Japan
• Green Procurement Guidelines
• Conflict Minerals Procurement Policy
• Human rights due diligence in procurement

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (typhoons, heavy rainfall)
• Flooding

Transition Risks

• Changes in environmental regulations and policies

Opportunities

• Expansion of business in energy-saving equipment and high-efficiency devices
• Development of disaster-prevention information systems

Reporting Standards

Frameworks Used: GRI G4

Certifications: ISO 14001

Third-party Assurance: KPMG AZSA Sustainability Co., Ltd.

Sustainable Products & Innovation

• Eco-Products and Eco-Products Select

Awards & Recognition

• Dow Jones Sustainability World Index component stock
• RobecoSAM Bronze Class designation
• FTSE4Good Index Series
• Morningstar SRI Index
• MSCI Global Sustainability Indexes
• CDP Climate A List
• Nadeshiko Brand
• Diversity Management Selection 100

Environmental Metrics

ESG Focus Areas

• Climate change
• Resource efficiency
• Harmonized society with nature
• Human capital
• Diversity and Inclusion
• Responsible Procurement
• Quality and Product Safety

Environmental Achievements

• Reduced CO2 emissions per unit of products and services by 19% (compared to FY2010)
• Reduced CO2 emissions per unit at business sites by 5% (compared to FY2010)
• Reduced water use per unit by 26% (compared to FY2010)
• Reduced waste and valuables generation per unit by 14% (compared to FY2010)
• Reduced chemical atmospheric emissions per unit by 21% (compared to FY2010)
• Achieved 6 new Eco-Factories & Offices Select certifications, 2 recertifications, and 64 renewed certifications
• Generated 2.6 times more renewable energy for its own use than the previous fiscal year
• Released Water Risk Guidelines
• Announced goal of realizing carbon neutrality by fiscal 2030 at all business sites (factories and offices)

Social Achievements

• Launched Kyōsō-no-Mori, a research initiative for open collaborative creation
• Established a corporate venture capital fund
• Held the 6th Hitachi Group Women Leaders’ Meeting and 4th Global Women’s Summit
• Established the Safety Management Division and Health and Productivity Management Promotion Office
• Launched a child-care matching service
• Improved Global Employee Survey response rate to 87%
• Implemented job descriptions, performance management, and other systems to clarify employee roles and expectations
• Increased the number of female managers in Japan to 700 (approaching the target of 800)

Governance Achievements

• Established the Hitachi Group Global Procurement Code
• Consolidated general consultation and reporting systems into Hitachi Global Compliance Hotline
• Established the IP Strategy Department and Data Science Group within the Intellectual Property Division
• Conducted CSR audits at 19 suppliers

Climate Goals & Targets

Environmental Challenges

• Climate change risks (transition risks and physical risks)
• Supply chain disruptions
• Water risks
• Achieving carbon neutrality targets
• Maintaining high employee engagement
• Ensuring diversity and inclusion across the Group
• Procurement risks in the supply chain

Mitigation Strategies

• Implemented Hitachi Internal Carbon Pricing (HICP) framework
• Developed alternative sourcing strategies
• Released Water Risk Guidelines and implemented measures based on water risk survey results
• Formulated a plan to make factories carbon neutral
• Implemented People Analytics initiative
• Established a Diversity & Inclusion Development Center
• Established the Hitachi Group Global Procurement Code and implemented CSR monitoring and audits

Supply Chain Management

Supplier Audits: 19/year

Responsible Procurement

• Hitachi Group Global Procurement Code
• Hitachi Group CSR Procurement Guidelines
• Conflict Minerals Procurement Policy
• chemSHERPA

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity of typhoons, floods, and droughts
• Rising sea level
• Chronic heat waves

Transition Risks

• Increased business costs from carbon taxes and emissions trading systems
• Loss of sales opportunities due to delays in technology development
• Impact on sales due to changes in market values

Opportunities

• Increased corporate value and revenue from expanded sales of low-carbon products and services
• Development of energy-efficient products and services
• Provision of solutions to address climate-related natural disasters

Reporting Standards

Frameworks Used: GRI Standards, SASB’s Sustainable Industry Classification System (SICS), TCFD Recommendations

Certifications: ISO 14001

Third-party Assurance: KPMG AZSA Sustainability Co., Ltd.

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 9 (Industry, innovation, and infrastructure)
• Goal 11 (Sustainable cities and communities)
• Goal 13 (Climate action)
• Goal 8 (Decent work and economic growth)

The report mentions contributions to various SDGs through the Social Innovation Business and specific initiatives.

Sustainable Products & Innovation

• Energy-saving products
• Renewable energy systems
• Water-efficient products
• Recyclable products

Awards & Recognition

• CDP A rating for water security, A- for climate change
• Inclusion in Euronext Vigeo Eiris World 120 Index
• Hitachi Construction Machinery selected for DJSI Asia Pacific
• Hitachi Metals, Hitachi Construction Machinery, and Hitachi High-Tech selected for FTSE4Good Index Series
• Hitachi, Ltd. included in Diversity Management Selection 100
• Hitachi, Ltd. received Kurumin and Eruboshi certifications
• Hitachi, Ltd. won silver at the ESG Finance Awards
• Hitachi Integrated Report 2019 awarded Grand Prize at Nikkei Annual Report Awards and Encouragement Prize at WICI Japan Awards

Environmental Metrics

ESG Focus Areas

• Environment
• Resilience
• Security & Safety

Environmental Achievements

• Reduced CO2 emissions per unit of products and services by 20%
• Reduced CO2 emissions per unit at business sites (factories and offices) by 1.4%
• Reduced water use per unit by 24%
• Reduced waste and valuables generation per unit by 14%
• Reduced chemical atmospheric emissions per unit by 33%
• Achieved carbon neutrality at nine sites in the US, Europe, and Japan using renewable electricity.
• Increased renewable electricity used by Hitachi factories and offices to 116,211 MWh (three times the level in fiscal 2019).

Social Achievements

• Launched employee well-being program, resulting in improved scores in all categories of the global employee survey.
• Increased ratio of female executives and corporate officers to 10.1%
• Increased ratio of non-Japanese executives and corporate officers to 11.6%
• Increased number of female managers in Japan to 800.
• Reduced number of fatal accidents in Hitachi Group to 3 and 0 in Hitachi, Ltd.
• Reduced number of lost-time accidents in Hitachi Group to 314 and 4 in Hitachi, Ltd.

Governance Achievements

• Incorporated environmental value as a criterion for executive officer compensation.
• Established the Environment Business Growth Strategy Division to accelerate environmental value creation.

Climate Goals & Targets

Environmental Challenges

• Decreased production due to COVID-19 impacting facility efficiency and CO2 emission reduction targets.
• Supply chain disruptions due to the COVID-19 pandemic.
• Increased number of legal and regulatory violations due to delays in notifications, contract renewals, and poor maintenance (related to COVID-19).

Mitigation Strategies

• Introduced the Hitachi Internal Carbon Pricing (HICP) framework to incentivize investment in energy-saving equipment.
• Introduced renewable energy sources, tripling the previous fiscal year's use.
• Implemented enhanced guidance to high-risk business sites to strengthen compliance activities.
• Developed a work shift optimization solution using CMOS annealing to support remote working.

Supply Chain Management

Supplier Audits: 27 companies

Responsible Procurement

• Green procurement system (A Gree’Net)
• CSR monitoring (271 companies)
• CSR procurement seminars (450 companies)

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity of typhoons, floods, and droughts
• Rising sea levels and chronic heat waves

Transition Risks

• Increased business costs from carbon taxes and emissions trading systems
• Loss of sales opportunities due to delays in technology development

Opportunities

• Increased corporate value and revenue from expanded sales of products and services contributing to climate change mitigation and adaptation
• Provision of solutions to address climate-related natural disasters

Reporting Standards

Frameworks Used: GRI Standards, SASB, TCFD

Certifications: ISO 14001

Third-party Assurance: KPMG AZSA Sustainability Co., Ltd.

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 9 (Industry, innovation, and infrastructure)
• Goal 11 (Sustainable cities and communities)
• Goal 13 (Climate action)
• Goal 8 (Decent work and economic growth)

Hitachi's Social Innovation Business contributes to these goals through various initiatives.

Sustainable Products & Innovation

• High energy-saving products (industrial equipment, social infrastructure equipment)
• Water-efficient products and services
• Renewable energy systems

Awards & Recognition

• CDP A rating for water security, A- for climate change
• FTSE4Good Index Series inclusion
• Dow Jones Sustainability Asia Pacific Index inclusion (Hitachi Construction Machinery)
• MSCI Japan Empowering Women Index inclusion (Hitachi Metals)
• MSCI Japan ESG Select Leaders Index inclusion (Hitachi Metals, Hitachi Construction Machinery)
• WICI Japan Integration Reporting Awards 2020 Gold Award
• Nikkei Annual Report Awards 2020 Semi Grand Prix

Environmental Metrics

ESG Focus Areas

• Decarbonization
• Resource circulation
• Harmonization with nature
• Resilience of social infrastructure
• Safety and security
• Quality of life
• Business with integrity
• Diversity, Equity and Inclusion (DEI)

Environmental Achievements

• Reduced CO2 emissions per unit of products and services by 28% compared to FY2010 (target: 21%)
• Reduced water use per unit by 36% compared to FY2010 (target: 26%)
• Reduced waste and valuables generation per unit by 18% compared to FY2010 (target: 12%)
• Increased renewable energy-derived electricity produced by in-house power generation by 56% compared to FY2020
• Increased purchased renewable energy-derived electricity by 36% compared to FY2020
• 50 Eco-Factories & Offices Select certifications (2 new, 48 renewed)

Social Achievements

• Global employee engagement score of 65% (target: 68% by FY2024)
• Launched a second fund and invested in 17 startup companies
• Increased digital talent to approximately 67,000 people (target: 98,000 by FY2024)
• Rolled out climate change e-learning materials globally (132,773 participants)
• Reduced number of lost-time accidents to 434 (target: 253)

Governance Achievements

• Established a central risk management framework
• Established a Group-wide cross-sectoral organization under the Chief Sustainability Officer to promote decarbonization
• Linked major KPIs to the performance evaluation of executive officers
• Introduced evaluations that consider environmental value into executive compensation

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to COVID-19
• Increased operation of high energy consumption equipment
• Lower production efficiency due to component procurement difficulties
• Not meeting CO2 emission reduction targets at business sites
• Increased total CO2 emissions due to increased operations by materials divisions

Mitigation Strategies

• Developed alternative sourcing strategies
• Implemented investment in energy-saving equipment (59 cases, 1.46 billion yen)
• Introduced Hitachi Internal Carbon Pricing (HICP) framework
• Introduced renewable energy equipment and purchased renewable energy
• Strengthened workplace management and reviewed business processes

Supply Chain Management

Supplier Audits: 25 companies in FY2021

Responsible Procurement

• Hitachi Group Global Procurement Code
• Sustainable Procurement Guidelines
• Green Procurement Guidelines
• Requesting 70% of procurement partners to formulate CO2 reduction plans

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity of typhoons, floods, and droughts
• Rising sea levels
• Chronic heat waves
• Damage to production facilities
• Disruption of supply chains

Transition Risks

• Increased business costs from carbon taxes and emissions trading systems
• Loss of sales opportunities due to delays in technology development
• Impact on sales due to changes in market values

Opportunities

• Expanded sales of products and services contributing to climate change mitigation and adaptation
• Provision of solutions to address climate-related natural disasters
• Development and provision of products and services that emit zero or very little CO2 during their use

Reporting Standards

Frameworks Used: GRI Standards, SASB, TCFD

Certifications: ISO 14001, ISO 45001

Third-party Assurance: KPMG AZSA Substitutability Co., Ltd.

UN Sustainable Development Goals

• Goal 7: Affordable and Clean Energy
• Goal 9: Industry, Innovation and Infrastructure
• Goal 11: Sustainable Cities and Communities
• Goal 12: Responsible Consumption and Production
• Goal 13: Climate Action

Hitachi's initiatives contribute to these goals through decarbonization efforts, resource efficiency improvements, sustainable product development, and community engagement.

Sustainable Products & Innovation

• High energy-saving equipment
• Electric powertrain systems
• Energy-efficient high-speed trains
• Water-efficient products
• Products with improved energy-saving features

Awards & Recognition

• CDP A List for climate change and water security
• CDP Supplier Engagement Leader
• ISS ESG Prime in ESG Corporate Rating
• Two IEC 1906 Awards
• Award for Contributors to Standardization Activities from the Railway Technology Standardization Investigation Committee
• Encouragement Award from the ITU Association of Japan
• Two Awards for Distinguished Service from the Telecommunication Technology Committee (TTC)
• Eruboshi certification
• WICI Japan Integrated Reporting Awards 2021 Silver Award
• Kurumin certification
• Clean200 inclusion

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance
• Resilience
• Safety and Security
• Quality of Life
• Business with Integrity
• Diversity, Equity and Inclusion (DEI)

Environmental Achievements

• Reduced total CO2 emissions at business sites by 40% compared to FY2010 (target: 32%)
• 199 sites (58%) achieved zero landfill waste (target: 90 sites)
• Reduced water use per unit by 27% compared to FY2010 (target: 22%)
• Reduced chemical atmospheric emissions per unit by 21% compared to FY2010 (target: 5%)
• 126.1 million metric tons of CO2 avoided emissions per year (target: 100 million metric tons)

Social Achievements

• Increased digital talent to 83,000 persons (target: 97,000)
• Improved employee engagement score to 69.5% (target: 71%)
• Achieved zero fatal accidents (target: 0)
• Women and non-Japanese nationals appointed to executive and corporate officer positions reached 11% and 20% respectively (target: 30% each by FY2030)
• 10,000+ users of Happiness Planet service

Governance Achievements

• Amended executive compensation system in April 2023 to include sustainability targets
• Implemented human rights risk assessments for certain Group companies (target: all BUs and major Group companies by FY2023)

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to climate events and geopolitical factors
• Achieving carbon neutrality across the entire value chain by 2050
• Managing risks related to water and biodiversity
• Ensuring responsible procurement practices throughout the supply chain
• Maintaining a safe working environment and preventing accidents

Mitigation Strategies

• Developed alternative sourcing strategies
• Implemented Hitachi Internal Carbon Pricing (HICP) framework
• Developed Water Risk Guidelines and conducted water risk assessments
• Issued Hitachi Group Sustainable Procurement Guidelines
• Established a global occupational health and safety management system and implemented safety training programs

Supply Chain Management

Responsible Procurement

• Hitachi Group Sustainable Procurement Guidelines
• Green Procurement Guidelines
• Sustainability audits

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity of typhoons, floods, and droughts
• Rising sea levels
• Chronic heat waves

Transition Risks

• Increased business costs from carbon taxes and emissions trading systems
• Loss of sales opportunities due to delays in technology development
• Impact on sales due to changes in market values

Opportunities

• Increased corporate value and revenue from expanded sales of low-carbon products and services
• Provision of solutions to address climate-related natural disasters

Reporting Standards

Frameworks Used: GRI Standards, SASB, TCFD

Certifications: ISO 14001, ISO 45001

Third-party Assurance: KPMG AZSA Sustainability Co., Ltd.

UN Sustainable Development Goals

• 13 of the UN Sustainable Development Goals

Hitachi strives to contribute to the achievement of all 17 SDGs

Sustainable Products & Innovation

• SF6-free high-voltage switchgear
• Eco-efficient products
• Energy-efficient high-speed trains
• Energy-saving home appliances
• Energy-efficient IT solutions

Awards & Recognition

• MSCI ESG Ratings AA
• CDP A List company for Climate Change and Water Security
• CDP Supplier Engagement Leader