Environmental Performance
The world’s population, which was 7.3 billion in 2015, is projected to grow to 9.7 billion by 2050 and to 11.2 billion
by 2100.* Global GDP is also continuing to expand, aggravating a host of environmental problems, including
global warming caused by higher CO2 emissions from fossil fuel consumption, the depletion of resources due toincreased demand, and ecosystem destruction. Global-scale efforts are being made to develop approaches thatlighten the burden on the environment so that a prosperous planet can be passed on to future generations.
Hitachi strives to achieve a more sustainable society by addressing environmental problems, which pose amajor challenge for society, based on its corporate mission of contributing to society through the developmentof superior, original technology and products.
* According to World Population Prospects: The 2015 Revision, published by the United Nations.

The Environmental Vision and Hitachi Environmental Innovation 2050
As global warming, resource depletion,
ecosystem destruction, and otherenvironmental issues grow more serious,
companies face increasing demands andexpectations to reduce the environmental
burden of their business activities.
The Intergovernmental Panel on
Climate Change (IPCC) concluded that
limiting global warming “below 2°C relative
to pre-industrial levels” would require “40
to 70% global anthropogenic GHG
emissions reductions by 2050 compared to2010.” The Paris Agreement adopted in
December 2015 at the 21st Conference of
the Parties (COP21) to the United Nations
Framework Convention on Climate
Change—and which came into force inNovember 2016—set ambitious targets,
including a global long-term target of
keeping global warming to below 2°C andefforts to limit the increase to 1.5°C.
Environmental targets have also been set in
the Sustainable Development Goals(SDGs)—the centerpiece of the 2030
Agenda for Sustainable Development,
adopted by the United Nations in 2015—
whose Goal 13 reads: “Take urgent action
to combat climate change and its impacts.”
In the light of these global trends andour own management policy, we created an
Environmental Vision to better define thekind of society that Hitachi envisions from along-term perspective. Our Environmental
Vision envisions a low-carbon society; aresource efficient society; a harmonizedsociety with nature. To achieve such asustainable society, we established a set oflong-term environmental targets called
Hitachi Environmental Innovation 2050.

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Hitachi, Ltd. Integrated Report 2017

Hitachi Environmental Innovation 2050
http://www.hitachi.com/environment/vision/innovation2050.html

Our Business Model

Toward a Low-Carbon Society
We seek to reduce CO2 emissions by 80% compared to fiscal 2010 levels by fiscal 2050 to realize the drop in
global anthropogenic GHG emissions that was deemed necessary in the IPCC’s Fifth Assessment Report. We
will attain this target throughout our value chain. First, this will be achieved by decreasing emissions during
the usage stage of our products and solutions, which account for a substantial share of emissions in thevalue chain. We will contribute to our customers and to society by developing innovative technologies andsolutions, as well as enhancing the efficiency of our products and supplying low-carbon energy. At the sametime, we will also work to cut down on emissions at the production stage of our business activities.

Reduction of CO 2 Emissions During Use

35% CO2 emissions reduction rate by promoting environmentallyconscious designs and expanding sales of products and services
with high energy-saving functions.
Reduction in CO2 Emissions
FY 2010 (base year)
CO2
emissions
Functionsize*

From base year

100％ 35 %reduction＝

FY 2016CO2emissions
Function
size

65％

＝

Strategic Focus

Hitachi is improving the environmental performance of its products
and services with the hope of contributing to the resolution ofenvironmental challenges through the development andpopularization of products and services with high environmental
value. We strike a balance between improving functionality andreducing the environmental burden by using, as our index, thereduction rate per product and service function of CO2 emissions
during usage and of the volume of resources used during the life
cycle. The group of products that demonstrate a high level ofpotential in solving environmental issues are the targets of a planto achieve a 40% reduction in CO2 emissions by fiscal 2018(compared to fiscal 2010 products). In fiscal 2016, we attained a

CEO Message

Improved Environmental Performance in Products and Services* Major functions of products correlated to CO 2 emissions.

Environmentally Conscious Design Assessments
keeping abreast of environmental regulations and ascertaining theenvironment-related needs of our stakeholders. We conduct life
cycle assessments focusing on our main, priority products toquantitatively evaluate their burden on the global environment insuch areas as the consumption of mineral resources, fossil fuels,
and water resources, as well as their impact on global warming
and air pollution. The results of such life cycle assessments aredisclosed to our stakeholders and utilized in improving the designof next-generation products.

Value Creation

We conduct Environmentally Conscious Design Assessments for
all products and services involving a design process to ensure
environmentally conscious design and development. Thirty
environment-related areas are assessed for their impact on climatechange, resource depletion, and environmental pollution(ecosystem degradation) at each stage of the product life cyclewith a view to reducing the environmental burden. To meet the IEC
62430* criteria for environmentally conscious design, in addition to
implementing these assessments, we are advancing
environmentally conscious design and development by integrating
this process into our existing management system, such as by* The standard developed by the International Electrotechnical Commission
concerning environmentally conscious design for electrical and electronic products.

Products and Solutions that Help Create a Low-Carbon Society

An oil-immersed transformer (left) and molded transformer.

Energy savings

26

MWh/year* Comparison of loss between Hitachi’s silicon steel transformer andamorphous transformer (3,000 kVA capacity, 22 kV/6.6 kV, 50 Hz models
at 40% load factor).

Hitachi, Ltd. Integrated Report 201769

Performance

Transformers convert the high-voltage electricity produced at power
plants into low-voltage electricity that can be used more safely. Since
voltage is applied to the coil where electricity is flowing so thatelectricity can be used at any time, the occurrence of no-load loss
(standby power) in which power is lost even when electricity is not
being used cannot be avoided. Decreasing the no-load loss oftransformers that operate 24 hours a day, 365 days a year, over amean lifespan of about 25 years could lead to huge energy savings.
Hitachi Industrial Equipment Systems Co., Ltd. uses anamorphous alloy with outstanding magnetic properties in the ironcores around which coils are wound. This has resulted in an annual
reduction of about one-fifth in no-load loss compared with previous
silicon steel transformers* and an annual reduction of 26 MWh in
total loss, including load loss, during use.

Management & Governance

Reducing CO2 Emissions Through Energy Savings
Amorphous Transformers

Reducing CO2 Emissions with Renewable Energy
Down-wind Turbine System
Hitachi has installed 162 wind turbines in Japan (as of February
28, 2017) and is actively developing this business to contribute to
the growth of the renewable energy sector. In Hitachi’s originaldown-wind system, the rotor is on the downwind side of thetower. The system’s weather vane effect enables turbines toswitch to the free-yaw operation mode in blackout conditions,such as during storms, preventing the dangers posed by crosswind. The characteristic makes the down-wind system very safe.
Down-wind turbines also generate energy efficiently by capturing
upward blowing winds in mountainous and hilly areas.
At a new wind power plant of the Aoyama-Kogen Wind Farm
Corporation, located on the Aoyama plateau in Mie Prefecture,
Hitachi supplied 40 down-wind turbines. The output is 80 MW, thelargest in Japan.*1 Hitachi is also taking part in research for the
Fukushima Floating Offshore Wind Farm Demonstration Project of
the Agency for Natural Resources and Energy, Ministry of
Economy, Trade, and Industry.

A 5 MW floating wind turbine(courtesy of the Fukushima Offshore Wind Consortium).

330 kt-CO /year*

CO2 emissions
reduction amount22(amount for the 162 wind power
turbines installed by Hitachi)*1 According to a list of wind power generation facilities installed in Japan(as of March 31, 2016), compiled by the New Energy and Industrial
Technology Development Organization (NEDO).
*2 Comparison with LNG thermal power generation. Calculated from the life cycle
CO 2 emissions for each type of power generation listed in the Evaluation ofLife Cycle CO 2 Emissions of Power Generation Technologies, published by theCentral Research Institute of Electric Power Industry (July 2010).

Reducing CO2 Emissions During Transport
Railway Systems
Among the various modes of transportation, railways have among
the lowest CO2 emissions. As a comprehensive railway systems
integrator, Hitachi is a global provider of railcar and transportsystems, including signaling and train management systems, andwill continue to deliver total railway systems for greater efficiency
and environmental consciousness.
Hitachi’s aluminum A-train rolling stock is lighter thanstainless steel rolling stock, for example, enabling trains to run
at high speeds with less energy. Outside of Japan, A-train
production has also begun in a UK plant and additional orders
have been received for 63 AT-300 cars for a railway insouthwest England. Together with an order received in July
2015, the total is for 236 cars (36 trains).
The use of silicon carbide (SiC) in carriage inverters reduces
energy loss during operation and cuts mass and volume by 40%.
Energy savings are achieved through both lower electrical energy
use and the contribution of these inverters to lighter rolling stock.

An AT-300 train for a UK railway company.

CO2 emissions pertransport unit
(passenger)

Railway
emissionsare about

1
7

those ofautomobiles** From Ministry of Land, Infrastructure, Transport, and Tourism data on CO 2
emissions in the transportation sector.

Reducing CO2 Emissions by Improving Automobile Fuel Efficiency
Lithium-Ion Battery Packs
Automobile CO2 emissions are a major environmental issue, andfuel efficiency is being improved through various technologies.
Hitachi Automotive Systems, Ltd. has developed a 48Vlithium-ion battery pack for mild hybrid vehicles. An output density
1.5 times existing levels has been achieved by improving thematerial composition of the positive and negative electrodes andincreasing the amount of lithium that can be stored per unit ofweight. This not only enhances the motor’s torque performance forassisting acceleration but also enables the recovery of substantial
regenerative energy when decelerating and reduces energy loss.
Hitachi contributes to reduced CO2 emissions throughimproved automobile fuel efficiency by providing storage batteries
and other energy-saving automobile parts.

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Hitachi, Ltd. Integrated Report 2017

A 48V lithium-ion battery pack for mild hybrid vehicles.

48V lithium-ion battery packenergy density

1.5

times previous
product

CEO Message

With these efforts the energy use per unit has been decreased
32% compared with fiscal 2010 at the company’s main plants in
Ibaraki Prefecture, contributing to a significant reduction in electric
power costs.

Tsuchiura Works East Building and the Hitachi UH03 hydraulic excavator,
which is included in the list of Japan’s Mechanical Engineering Heritage.

Energy use per unit

32

% reduction comparedwith fiscal 2010

Reduction in Energy Use per Unit

Activity
amount*2

From base year

100％ 12 %reduction＝

We are promoting the use of solar, wind, and other forms ofrenewable energy. During the 2016 fiscal year, Hitachi produced
2,925 MWh of renewable energy for its own use. Hitachi
Computer Products (America), Inc. proactively uses renewableenergy to power its factory, purchasing 8,769 MWh during fiscal
2016. In Japan, we contracted for 1,000 MWh/year of GreenPower through Japan Natural Energy Co., Ltd. to provide powerfor offices, showrooms, and exhibitions.

CO2 Emissions(kt-CO2/year)
5,000

4,000

3,845
3,453

3,355

3,311

3,085

＊

3,000

Management & Governance

FY 2005 (base year)
Energy used
1.75 GL*1

Introducing Renewable Energy

Value Creation

We are working to reduce energy use per unit—an indicator ofenergy efficiency—by systematically improving efficiency, such as
by installing high-efficiency equipment and devices, from LED
lighting to inverter air conditioners, at each facility. In fiscal 2016,
we achieved an improvement of 12% (from a base year of fiscal
2005), against a target of 15%. Part of the reason for not hitting
the target was because of a decline in sales in energy intensive
business divisions, which contracted the denominator in
calculating energy use per unit.
The increase in the total volume of CO2 emissions was due tothe fact that a materials company in the Americas newly became amember of the consolidated Hitachi Group in fiscal 2016. There
was a general decline in regions other than the Americas.
We will continue to harness our expertise in control and IT
technologies to actively pursue energy conservation measures at
our factories and offices and promote the efficient use of energy.

Strategic Focus

Reduction of CO 2 Emissions During the Production StageFY 2016
Energy used
1.95 GL
Activity
amount

88％

2,000

＝

*1 Energy volume used both in and outside the organization (SCOPE 1 and 2).
*2 A value closely related to the emission factor numerators (environmental
burden) of energy use from business activities (for example, production
quantity, output, building floor space, and number of employees).

1,000

0

2012

Japan

Rest of Asia

2013

2014

2015

China

Americas

2016

(FY)

Europe* Includes 958 kt-CO 2/year emitted by a materials company that became
a consolidated member of the Hitachi Group in fiscal 2016.
Notes:• The CO 2 electrical power conversion factor uses the 2005 emission
coefficients for individual countries published by the International Energy
Agency (IEA) in the 2010 edition of CO 2 Emissions from Fuel Combustion.
• Energy-related CO 2 emissions were 1,296 kt-CO 2 (SCOPE 1) and 2,549
kt-CO 2 (SCOPE 2).

Hitachi, Ltd. Integrated Report 201771

Performance

Hitachi Construction Machinery Co., Ltd. uses a network ofJapanese and international affiliates centered on four main plants
in Japan to produce construction machinery and its principal
components. Together with energy reductions during use as theseproducts switch to electric or hybrid power, efforts throughout the
network are also being made to reduce energy consumption in the
manufacturing stage.
The entire Hitachi Construction Machinery Group continues toimplement energy-saving measures and promote greater efficiency
in plant and office lighting and air-conditioning. Several locations
have also introduced IoT technology to further reduce energy
consumption and raise productivity. Specifically, by adopting theEnergy and Equipment Management Service, a key solution
concept under Hitachi’s Lumada IoT platform to comprehensively
control energy data and equipment across multiple businessfacilities, they are able to efficiently analyze and manage electric
power data gathered from equipment at each plant. Energy usage
by the machine tools, robots, and other production equipmentused in plants is finely controlled, reducing standby power andincreasing energy efficiency.

Our Business Model

Reducing CO2 Emissions Through Greater Efficiency with IoT
Building Eco-Factories with Lumada

Realization of a Resource Efficient Society
Together with our customers and society, Hitachi will do its utmost through its business operations to help
build a society that uses water and other resources efficiently. We will expand circulative uses of water byfurther advancing the entire range of water treatment technologies involved in water use from seawater
desalination and other forms of fresh water generation to sewage treatment.
We also aim to improve our usage efficiency of water and other resources by 50% compared to fiscal 2010
levels by fiscal 2050. To achieve this target, we will create products that last longer and use less resources,
make thoroughgoing efforts to collect and recycle used products, reduce the volume of water used in the
production process such as through purification and reuse, and engage in other efforts.

Improving Usage Efficiency of Water and Other Resources
Water Conservation

Reduction in Water Usage per Unit

Hitachi uses water in such production processes as cleaning,cooling, and painting. To reduce water usage through greater
efficiency, we are enhancing our level of water management byinstalling flow meters at more locations, introducing wastewater
treatment devices to increase the use of recycled water, andupgrading water supply facilities at our business sites.
Different countries and regions are affected by water-related
issues in different ways, so we devise appropriate
countermeasures for each region. Our business sites in China,
India, and the Philippines, for example, are striving to reducethe volume of water used by strengthening measures against
water leakage.

Reducing Waste Volume
For fiscal 2016, we set a target of a 12% reduction (from a baseyear of fiscal 2005) for waste and valuables generated per unit,
bettering this by achieving a 13% reduction. Every business site is
reducing waste through onsite recycling of byproducts and scrap
from the production process and efforts to curb use of packing
materials during transport. Under the Zero Emission initiative,
which seeks to minimize landfill disposal, 98 business sites
achieved their zero emission goal* as of fiscal 2016.

FY 2005 (base year)
Amountused 56.62
million m3
Activity
amountFY 2016
From base year

100％ 27 %reduction＝

Amountused 41.34
million m3
Activity
amount73％＝

Reduction in Waste and Valuables Generated per Unit
FY 2005 (base year)
Amountgenerated
1,518 kt
Activity
amountFY 2016
From base year

100％ 13 reduction＝%

Amountgenerated
1,336 kt
Activity
amount87％＝* Defined as a final disposal rate (landfill disposal/waste and valuables) of lessthan 0.5% in any given fiscal year.
Zero Emission Sites
http://www.hitachi.com/environment/activities/data/zeroemission.html

Creating a Resource Efficient Society Through Business
Water Solutions to Protect Global Water Resources
Water covers 70% of the earth’s surface, but only 0.01% of
it is potable. Demand for water, however, is on the rise
globally, with more than 40% of the world’s population
expected to face severe water shortages by 2050.
Hitachi has acquired an extensive record in the waterbusiness as it strives to become a comprehensive water
service provider. We have supplied equipment to around 700
water purification plants and 900 sewage treatment plants inJapan, and over 200 sites in some 40 countries and regions
around the world. We continue building on this experience toprovide a variety of water infrastructure globally.
We are currently moving forward on IoT-based,
optimized, and highly efficient water business solution
offerings, including water supply and sewage systems andseawater desalination plants. For example, our energy-

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Hitachi, Ltd. Integrated Report 2017

efficient seawater desalination plant dilutes seawater withtreated sewage to lower the salt concentration, reducing thepump pressure required for the desalination process andcutting energy consumption by approximately 30%.

Our Business Model

Harmonized Society with Nature
We strive to minimize Hitachi’s impact on natural capital, which bestows the benefits of nature on humankind
by assessing ecosystem impact and advancing measures to minimize the burden at each stage of Hitachi’svalue chain. Moreover, we are preserving the ecosystem through our products and services, such as our air
and water purification systems and environmental monitoring systems. We also endeavor to minimize theenvironmental burden of our factories and offices.

Ecosystem Assessments and Their Implementation

CEO Message

the burden (negative impact) on the ecosystem caused bybusiness activities and maximizing the positive impact, such as byundertaking social contribution activities to protect nature andproviding products and services that preserve the ecosystem.
Regarding impact and other ecosystem preservationassessments, we are deliberating the matter not only within theGroup but also through our participation in activities outside thecompany, such as the biodiversity working group of four Japaneseelectrical and electronic industry associations* and the Japan
Business Initiative for Biodiversity (JBIB).
* The Japan Electrical Manufacturers’ Association (JEMA), Japan Electronics
and Information Technology Industries Association (JEITA), Communications
and Information Network Association of Japan (CIAJ), and Japan Business
Machine and Information System Industries Association (JBMIA).

Strategic Focus

In fiscal 2016 Hitachi created an Ecosystem Preservation Activities
Menu citing the specific activities to be undertaken to promote thepreservation of the ecosystem. We are encouraging each businesssite to advance their own initiatives. This menu was created byadding the pioneering activities of other corporations andorganizations to the list of items that had already been subject toassessment since 2010. It consists of 116 items covering all
aspects of our business operations, including the value chain.
Each business site selects those activities it plans to launch fromthe menu, and the total number of initiatives becomes Hitachi’starget for ecosystem preservation. In fiscal 2016, 144 new
initiatives were launched, far in excess of our initial goal of 30.
In the long term, we seek to minimize the impact on natural
capital and realize a harmonized society with nature by minimizing

Efforts Toward Building a Harmonized Society with Nature

Working together with employees and their families, the HitachiGroup participates in the Japanese Forestry Agency’s Corporate
Forest Program to preserve forests in several locations.
The Group has been conducting tree-planting activities
since 2007 in the Yuyu Forest in Ibaraki Prefecture. Each year
employees and their families gather to plant trees, clear
underbrush, prune, and perform other forest maintenanceactivities. They also take part in activities including environmental
education and handicraft classes using pruned materials.
The Hitachi High-Tech Yasato Forest embarked on a 60-year planin 2005 to cultivate trees. Employees and their families participate in
the work of pruning and thinning to grow a healthy forest.

Hitachi Power Solutions Co., Ltd.
employees at the Yuyu Forest.

Value Creation

Hitachi Group Forestation Activities

Hitachi High-Technologies Corporation
employees at the Yasato Forest.

Integrated Management System for Chemical Substances
Contained in Products
Suppliers

Environmental information
Survey/register

Integrated Management System for Chemical Substances Contained in Products

Registration database

Manage amounts of designatedchemical substances in a productby material and part

Collection database

Manage total amounts ofdesignated chemical substancesby product and businessCommunicate

Customer/society

Environmental information disclosure

Hitachi, Ltd. Integrated Report 201773

Performance

Working closely with suppliers and customers, we gather andmake available information on chemical substances across the
supply chain via the Integrated Management System for Chemical
Substances Contained in Products, which has been in operation
since fiscal 2005. As of March 31, 2017, chemical substanceinformation for more than 1.31 million parts and products was
registered under this integrated management system. In fiscal
2016, we upgraded our system to respond to the shared
information transmission scheme (chemSHERPA) on chemical
substances contained in products.

Management & GovernanceAppropriate Management of Chemical Substances