How to create a relationship with the supply chain: carbon neutral, that company does this (in the case of Hitachi, Ltd. (3))
Takeshi Komori
Until the last time, we looked at the overall decarbonization strategy and scope reduction of Hitachi, Ltd. (hereafter, Hitachi). In this final installment, we will look at carbon reduction in the supply chain.
Polite communication is the key to a decarbonization strategy in the supply chain
The stance of working together is important
Hitachi has no reference company for sustainable strategy
Polite communication is the key to a decarbonization strategy in the supply chain
Looking at Hitachi's overall greenhouse gas emissions, "purchased products and services," which are upstream in Scope 3, account for 9.1%. How should we proceed with the reduction of the entire supply chain, including here? There are different difficulties here from reducing the number of companies and users.
Hitachi has long established green procurement guidelines. The latest version, which will be published in July 2021, will include the latest guidelines.
In this, there is an item of "Energy Consumption and Greenhouse Gas Emissions", which is written as follows.
“Your company must set a company-wide greenhouse gas reduction target. Energy consumption and all relevant scope 1 and 2 greenhouse gas emissions must be tracked, documented and Comparisons with targets must be published externally.Your company must seek ways to improve energy efficiency and minimize energy consumption and greenhouse gas emissions.”
(From Hitachi Sustainable Procurement Guidelines)
In addition to creating these guidelines and notifying them, the emphasis is on promoting understanding through polite conversations with suppliers.
The most important thing is the increase in the cost of green procurement.
"At the briefing session, there were questions about costs. In the future, Hitachi will provide technical support and cooperate and propose energy-saving measures. Even so, it is naturally difficult to suddenly achieve zero CO2 electricity.Our goal is to make the entire supply chain carbon neutral by 2050." (Tsutomu Kubo, Hitachi Sustainability Promotion Headquarters)
Among the suppliers, we separately ask partners whose procurement amount exceeds a certain level to separately request the formulation of a CO2 reduction plan, and we are working to obtain their consent one by one.
“I think it is necessary to propose a variety of things in the future, such as the introduction of renewable energy at a low cost, energy conservation diagnosis, and sharing of information on subsidies,” says Mr. Kubo.
The stance of working together is important
According to Mr. Kubo, it is impossible in Japan to ``review contracts for companies that do not meet the targets,'' as in other countries.
"We need a stance of working together. As a supplier, we need to improve our competitiveness, so it's important to promote things according to the situation, such as technical support for energy conservation. Each of them consumes different amounts of energy, and we plan to offer it as a menu.
Start with Tier 1. Tiers 2 and 3 will be very wide, so there will be a question of whether they can be grasped. This is also related to the development of national systems.
The first thing suppliers should do is measure and analyze their own energy consumption and improve the efficiency of equipment usage. This is said to help reduce carbon emissions.
However, it is not just the installation of the system that is important, but also the personnel who use it. “What kind of people are there and how will Hitachi support them?
On the other hand, demand response and negawatt transactions are still difficult in terms of cost.
Hitachi has no reference company for sustainable strategy
The Sustainability Promotion Headquarters, which I interviewed this time, will play a very important role as the engine when promoting decarbonization efforts that include not only Hitachi itself but also the supply chain. Where are the current challenges?
“Hitachi has many businesses, and each business has a different relationship to decarbonization. Since we will be receiving it, it is difficult, including that itself." (Yasunori Nagaoka, Hitachi Sustainability Promotion Headquarters)
“Hitachi is a company that is relatively advanced in terms of decarbonization, so there are few other reference companies.
Hitachi has a wide range of businesses and is expanding globally. That is why decarbonization efforts are not straightforward.
Looking at the sustainable procurement guidelines for suppliers, they cover not only electricity but also human rights, labor issues, and biodiversity on a global level.
“The world trend is really fast. Energy alone will change the situation dramatically. Because we are a global company, it is important for us to catch up with Europe and other advanced regions. There is also a place.” (Mr. Kubo).
