Introduction

Management

Environmental

Social Innovation

Environmental

Achieving a Decarbonized Society

Environmental

Efforts to Achieve a Decarbonized Society

Advancing Our Environmental Vision andLong-Term Environmental Targets

As the response to climate change becomes more of a global

Environmental Governancetinues to change in dramatic ways. At the 27th Conference of

Achieving a Decarbonized Society

the Parties (COP27) to the United Nations Framework	Efforts to Achieve a DecarbonizedSociety

Convention on Climate Change in Sharm el-Sheikh, Egypt, in

Contributing to a Decarbonized Society
Through the Decarbonization BusinessContributing to a Decarbonized Society at
Business Sites (Factories and Offices)
Climate-related Financial Information Disclosure(Based on TCFD Recommendations)
Achieving a Resource-Efficient Society
Achieving a Harmonized Society with Nature
Environmental Data

trend, the roles required of governments and companies con-November 2022, participants called for effective and equitableclimate change action, along with further increases in greenhouse gas reduction targets by nation.
To help build a decarbonized society, Hitachi has set thetarget and strive to achieve carbon neutrality throughout thevalue chain by fiscal 2050 as part of the long-term environmental targets we call Hitachi Environmental Innovation 2050.
Under GX for CORE, one of the two pillars of our green strategy, we accelerate measures to reduce our own CO2 emissions to achieve carbon neutrality by fiscal 2030 at ourbusiness sites (factories and offices). Under GX for GROWTH,
we reduce emissions related to the use of products and services sold, which account for a large portion of CO2 emissions
in Hitachi’s value chain. Since improvement in this area is the
key to reducing CO2 emissions in the value chain, we contrib-

ApproachSocialMateriality

Governance

Assurance

Hitachi Sustainability Report 2023

035

GRI 2-13/2-24/3-3

Environmental Strategy for Achieving a Decarbonized Society
Targets

Activities

Initiatives for Achieving a Decarbonized Society(1) Achieve carbon neutrality at our own business sites and production activities (by fiscal 2030)• Introduce energy-saving and renewable energy equipment.
• Procure 100% non-fossil electricity across all business sites.
(2) Achieve the world’s highest level of energy conservation in products• Achieve energy conservation by developing products that take the environment into consideration from the design stage.
(3) Work with procurement partners toward a decarbonized society• Distributed Sustainable Procurement Guidelines and Green Procurement Guidelines, requesting all procurement partners to set
greenhouse gas reduction targets• Based on the results of a questionnaire survey on climate change-related initiatives among environmental focus partners in
FY2021, we selected 21 new environmental advanced partners with whom to hold discussions in FY2022.
(4) Support businesses that contribute to the carbon neutrality of society as a whole• Power grids business to support the expansion of renewable energy.
• Provision of energy-efficient high-speed trains and storage battery hybrid trains for the spread of carbon-free mobility.
• Provide Lumada solutions that support the realization of a decarbonized society through digitalization.
(5) Develop technologies to realize the transition to a decarbonized society• Development of high-efficiency products, energy management systems and hydrogen-related technologies.

ute to customer decarbonization and that of society throughproducts and services having with low environmental impact.
Hitachi will continue to grow businesses that contribute togreen policies and to the decarbonization of society as a wholethrough collaborative creation with stakeholders.
Ratio of CO2 Emissions at Each Stage of Hitachi Value Chain
in Fiscal 2022
Procurement of
Raw Materials
and Parts

Production

Transport

Use of Products
and Services

9.6%

0.6%

0.1%

89.1%

Waste Disposal/
Recycling

Others (Capital
goods, etc.)

0.1%

0.5%

Green Strategy• GX for CORE: Achieve carbon neutrality at business sites (factories and offices) by FY2030. Reduce CO2 emissions by 50% compared with fiscal 2010 levels by fiscal 2030 and achieve carbon neutrality across the entire value chain by fiscal 2050
• GX for GROWTH: Contribute to the decarbonization of customers and society through products and services having with low environmental impact (CO2 avoided emissions: 100 million metric tons in fiscal 2024)

P.029 Green Strategy
P.036 Expanding the Decarbonization BusinessP.039 CO2 Emission Reduction at Business Sites (Factories and Offices) and Hitachi Carbon Neutrality 2030
P.108 Responsible Procurement
Hitachi Integrated report 2023 / Green Strategy (P.024)* Percentages may fluctuate due to changes in our business portfolios

https://www.hitachi.com/IR-e/library/integrated/

Note: Hitachi normally refers to suppliers (including suppliers, vendors or providers) as procurement partners who build business together on an equal footing.

Introduction

Environmental
Environmental
Advancing Our Environmental Vision andLong-Term Environmental Targets

Management

Social Innovation

Approachto a decarbonized society through businesses that reduce

Achieving a Decarbonized Society

CO2 emissions and collaborative creation with customers.

Climate-related Financial Information Disclosure(Based on TCFD Recommendations)
Achieving a Resource-Efficient Society
Achieving a Harmonized Society with Nature
Environmental Data

Assurance

Hitachi Sustainability Report 2023

Approach036

GRI 305-4/305-5

Activities

Achieving a Decarbonized Society

Contributing to a Decarbonized Society at
Business Sites (Factories and Offices)

Governance

Expanding the Decarbonization Business

Hitachi provides value to customers and society, contributing

Society Through the Decarbonization
Business

SocialContributing to a Decarbonized Society Through the Decarbonization Business

Environmental Governance	Contributing to a Decarbonized

Environmental

Examples of Decarbonization Business: A Hitachi Focus

Power grid solutions· Contribution to the mass adoption of renewable energy through HVDC*1· Enhancing efficiency of transformers, high voltage products, and power transmission/distribution

Grid automation· Advancing smart grid control, etc.

Power generation· Widespread use of power generation systems that utilize non-fossil energy
sources such as wind and nuclear power

Railway business· Enhancing energy-saving features of rolling stock· Developing smart operating systems· Enhancing maintenance service efficiency through rolling stock monitoring

Finance and public oriented
solutions· Promoting digital solutions

Data centers· Developing smart data centers

Servers/storage· Enhancing energy-saving features of servers and storage

Smart logistics· Improving energy-saving features through fully IT-enhanced logistics

Factory automation· Enhancing energy efficiency through shorter lead times

Water business· Enhancing efficiency of water and sewage systems

Industrial products· Enhancing efficiency of industrial products· Electrification of fossil-fuel equipment

Smart cities· Reducing CO2 through comprehensive urban energy management solutions

Home appliances· Enhancing energy efficiency of home appliances· Promoting connected home appliances

Smart therapies· Enhancing energy-saving features of medical devices

Elevators· Enhancing energy-saving features of elevators and escalators throughreplacement· Enhancing energy efficiency through total building solutions

Hitachi operates under three business domains: Green Energy
and Mobility, Digital Systems and Services, and Connective
Industries. Among these domains, we are growing the follow-

Green Energy & Mobility

ing businesses, which contribute to decarbonization.
• Businesses that help to accelerate the energy shift aimed atrealizing decarbonization, and that provide safe, comfortable, and clean mobility (Green Energy and Mobility)• Businesses that help to reduce CO2 emissions by using
cutting-edge digital technologies to improve the efficiency ofsystems that underpin society (Digital Systems and Services)• Businesses that help to decarbonize industries and cities by

Digital Systems &Services

creating a resilient supply chain (Connective Industries)

Connective Industries*1 HVDC: High Voltage Direct Current

Introduction

Environmental

Social Innovation

Environmental

SocialGovernance

Assurance

Hitachi Sustainability Report 2023

037

CO2 Emissions Reduction as Avoided Emissions
Approach

Environmental

Management

Materiality

Hitachi calculates the contribution to decarbonization throughHitachi contributes to the reduction of customer CO2

The World Business Council for Sustainable Development

Advancing Our Environmental Vision andLong-Term Environmental Targets

collaborative creation with customers as CO2 avoided emis-

emissions mainly in the following three areas:

issued guidance in March 2023 on avoided emissions. In

sions. We convert the amount of the contribution to customer(1) Contribution via conversion to non-fossil energy

Japan, the GX League*2 is considering the use of avoided

Environmental Governancedecarbonization via Hitachi products and services into CO2Contribution by providing key components for the introduction

emissions in relation to disclosures and the assessment of

Achieving a Decarbonized Society

emissions. We expect an average 126.1 million metric tons ofof non-fossil energy including renewable energy, such as HVDC

climate-related opportunities. A unified guide on specificCO2 avoided emissions per year during the Mid-term(2) Contribution via energy conservation­calculation methods for products and services is under dis-Management Plan 2024, compared to our original target ofContribution by providing energy-saving features through thecussion, and Hitachi is participating in these discussions.

approximately 100 million metric tons per year in fiscal 2024.

optimization of highly efficient products and controls, such asContributing to a Decarbonized Society at
Business Sites (Factories and Offices)
Climate-related Financial Information Disclosure(Based on TCFD Recommendations)
Achieving a Resource-Efficient Society
Achieving a Harmonized Society with Nature
Environmental Data

Hitachi calculates CO2 avoided emissions based on ahigh-efficiency industrial equipment

comparison of customer CO2 emissions from the use of(3) Contribution via electrification

Hitachi products and services during the fiscal year in ques-Contribution through the electrification of products currently

tion with emissions from Hitachi products and services

using fossil energy, including the electrification of industrial

during the base year. In principle, the base year for this cal-equipment*2 A place where companies aiming to achieve sustainable growth with a view to
becoming carbon neutral by 2050 and coming social changes collaborate withcompanies engaged in similar initiatives, as well as entities from across industry,
government, and academia.

culation is fiscal 2013*1.
*1 In accordance with the base year of Japan’s national CO2 reduction target. For
the consolidated energy-related company, we set fiscal 2020 as the base year
based on the year the company joined the Hitachi Group.

Calculating CO2 Emissions Reduction as Avoided Emissions① Conversion to Non-Fossil Energy② Energy savings③ Electrification• We calculate the amount of CO2 emissions reduced by using
non-fossil energy sources compared to electricity supplied fromthe grid• We calculate the amount of CO2 emissions reduced by improving
energy efficiency compared to products and services with equivalent functions• We calculate the amount of CO2 emission reductions compared
to products and services before electrification

Examples: HVDC, wind turbines, etc.

Examples: Compressors, elevators, etc.

Example: Electrification of industrial equipment

CO2 Avoided
Emissions

Grid power fromthermal power
generation, etc.

Non-fossil-derived
electricity from wind
power generation, etc.

CO2 Avoided Emissions

CO2 Avoided Emissions
CO2 Emissions

Society Through the Decarbonization
Business

CO2 Emissions

	Contributing to a Decarbonized

CO2 Emissions

Achieving a Decarbonized Society

Old Products

New Products

Transportation/­
industrial engines(fossil fuels)

Transportation/
Industrial Motors

Introduction

Environmental
Environmental

Management

Social Innovation

Improving the Environmental Performance ofProducts and Services Through Eco-Design
SystemActivities

Materiality

Environmental

SocialGovernanceApproach

CO2 emissions related to the use of products and services
account for the largest proportion of emissions in our value

Hitachi promotes eco-designs by applying our Environmentally

chain. To reduce these emissions, Hitachi sets reduction rate

Environmental GovernanceConscious Design Assessments to steadily improve environ-targets per unit based on fiscal 2010 levels for each product or

Achieving a Decarbonized Society

mental performance throughout the Group. This assessment

service targeted. We use functional size*1 as the denominator

Achieving a Decarbonized Society

identifies a total of 30 environmental impact categories thatand CO2 emissions as the numerator in our target equation.

Contributing to a Decarbonized Society at
Business Sites (Factories and Offices)
Climate-related Financial Information Disclosure(Based on TCFD Recommendations)
Achieving a Resource-Efficient Society
Achieving a Harmonized Society with Nature
Environmental Data

affect climate change, resource depletion, and ecosystem

In fiscal 2022, we achieved our target with a reduction

degradation at each stage of the life cycle of products andrate of 15% against a target of 12%. The achievement of thisservices. In this way, we assess the reduction of environmental

target was driven by the introduction of new models of highimpact from business activities across multiple perspectives.

energy-saving equipment used in industrial equipment andsocial infrastructure.

Initiatives for Improving Environmental Performanceof Products and Services

company to the calculation of Hitachi Group emissions,• Promoting environmentally conscious processes: In accor-

resulting in a significant increase in emissions throughout thedance with the IEC 62430*1 criteria, promote environmentally conscious processes in designing and developing
products and services, including by meeting environmental

company that are used widely in the global power infrastruc-regulatory requirements and ascertaining the environment-­

ture. Hitachi will continue to bring energy-efficient products torelated needs of our stakeholders within our existing

the market.

­management system.
• Implementing Life Cycle Assessments (LCAs): For ourmain, priority products, quantitatively evaluate their global
environmental burden in such areas as the consumption ofmineral resources, fossil fuels, and water resources, as wellas their impact on climate change and air pollution, disclose the results to our stakeholders, and utilize them in
improving the design of next-generation products.
*1 IEC62430: The standard developed by the International ElectrotechnicalCommission (IEC) concerning environmentally conscious design for electricaland electronic products.

P.051 Approach to Transitioning to a Circular Economy/
Innovation in Product Design

038

Activities

For all products and services involving a design process,Society Through the Decarbonization
Business

Hitachi Sustainability Report 2023

Reduction of Product and Service CO2 Emissions During Use

Advancing Our Environmental Vision andLong-Term Environmental Targets	
Contributing to a Decarbonized

Assurance

We added the emissions of a consolidated energy-related

Environmental Action Plan for 2024 Management Values
Reduction in CO2 Emissions per Unit (Hitachi Group)

From base year

15
reduction%

CO2 emissions
from use of products

100%

Target: 12%

CO2 emissions
from use of products

85%

Function size

Function sizevalue chain. This increase is due to higher emissions from the

FY2010

FY2022use of transformers and other key products provided by the(base year)*1 Function size: Major functions of products correlated with CO2 emissions, suchas their output and volume

Introduction

Environmental
Advancing Our Environmental Vision andLong-Term Environmental Targets

Social Innovation

Environmental

PolicyActivities

neutrality by fiscal 2030 at all business sites (factories and offices) as part of its long-termSociety at Business Sites(Factories and Offices)
Climate-related Financial Information Disclosure(Based on TCFD Recommendations)
Achieving a Resource-Efficient Society
Achieving a Harmonized Society with Nature
Environmental Data

039

GRI 302-1/305-4/305-5

Materiality

Achieving a Decarbonized Society	Contributing to a Decarbonized

Hitachi Sustainability Report 2023

Assurance

CO2 Emission Reductions at Business Sites (Factories and Offices) and Hitachi Carbon Neutrality 2030

In working toward realizing a decarbonized society, Hitachi has set the goal of realizing carbon

Contributing to a Decarbonized Society
Through the Decarbonization BusinessGovernanceContributing to a Decarbonized Society at Business Sites (Factories and Offices)

Environmental GovernanceAchieving a Decarbonized Society

Socialenvironmental targets called Hitachi Environmental Innovation 2050.
Our roadmap to achieving this goal sets targets of reducing CO2 emissions by 50%, compared to the base year, by fiscal 2024 and 80% by fiscal 2027 toward realizing carbon neutrality
by fiscal 2030.
CO2 emissions reduction measures at Hitachi include installing energy-saving and renewable energy equipment, engaging in corporate PPA*1 to procure renewable energy with­additionality* , and procuring renewable energy and renewable energy certificates* . Among2

3these, installing energy-saving and renewable energy equipment is expected to incur highcosts relative to the amounts of reduction. However, it will also lead to reduced risks associ-CO2 reduction roadmap (as of Mar. 2023)
Reduction rate in CO2 emissions (%)

Environmental

Management

0

Target50%+

FY2024 Target

50%
50

FY2027 Target

Renewable energy
procurement(purchases +certificates)
36%
Neutralization 10%

Residual emissions
100
2010

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

33%
Corporate PPA
21%

80%

ated with factors including anticipated sharp rises in energy pricing and increased costs fromEnergy saving +RE generation

2030 (year)

carbon taxes and the expansion of carbon tax transactions. It also aligns with our Corporate
Mission—“To contribute to s­ ociety through the development of superior, original technology
and products”—and for this reason as well, we are placing a priority focus on this approach.

Concrete efforts to achieve carbon neutrality at business sites, categorized by location
type (factories, offices), can be outlined as shown below.

Currently, we have set the target at a 33% reduction to be made by fiscal 2030, however weare working to increase that level to 50%.
*1 Corporate PPA: A contract whereby a corporation, municipality, or other legal entity purchases electricity generated by renewable energy from a power producer on a long-term basis (usually 10 to 25 years). PPA stands for power purchase agreement.
*2 Additionality: An increase in effect of installing new renewable energy equipment.
*3 Renewable energy certificate: Accredits the environmental value associated with electricity generation from renewable energy
sources. Unlike the purchase of renewable electricity, acquisition of this environmental value, which is separate from theelectricity itself, is regarded as equivalent to using energy sources that do not emit CO2.

Major Initiatives for Reducing CO2 Emissions at Business Sites (Factories and Offices)• Improve equipment efficiency by introducing and upgrading to high-efficiency equipment(Determine priority measures and manage introduction and upgrade rates)

Factories

Offices• Improve production efficiency and energy use efficiency during production through use of theLumada platform and production technologies cultivated from our long years of experience• Optimize equipment operations and reduce wasted energy by installing smart meters• Review product designs and processes• Optimize control of equipment operations in response to production conditions• Build/move to new facilities with high energy efficiency• Combine and integrate existing facilities• Install energy-saving equipment and optimize equipment operations in collaboration withbuilding owners

Factories
and offices• Install renewable energy systems• Procure electricity from renewable sources• Utilize renewable energy certificates• Utilize renewable energy through corporate PPA• Engage in capital investment to reduce CO through the use of Hitachi Internal Carbon Pricing (HICP)
2

Introduction

Environmental
Environmental

Management

Social Innovation

The Hitachi Internal Carbon Pricing
Framework
SystemEnvironmental

SocialGovernance040

Hitachi Sustainability Report 2023

Assurance

Achievements in Fiscal 2022
Hitachi uses the HICP system to reduce CO2 emissions by converting CO2 reduction benefits of projects to a monetary
values to encourage additional investment, where such projects may not have received investment under the previous mea-

Advancing Our Environmental Vision andLong-Term Environmental Targets

To promote CO2 reduction at its business sites (factories andoffices), in fiscal 2019 Hitachi introduced the Hitachi Internal

In fiscal 2022, monetary investments decreased due to the deconsolidation of materials and construction machinery

Environmental Governance

Carbon Pricing*1 (HICP) framework. Referencing emissions

companies. However, we raised the carbon price from 5,000 yen/t-CO2 to 14,000 yen/t-CO2, resulting in 94 adopted projects

Achieving a Decarbonized Society

trading and carbon taxes globally, we establish internal carbon

and 2,519 t-CO2 in CO2 reductions, nearly twice as much as in fiscal 2021.

Achieving a Decarbonized Society
Contributing to a Decarbonized Society
Through the Decarbonization Business	Contributing to a DecarbonizedSociety at Business Sites(Factories and Offices)
Climate-related Financial Information Disclosure(Based on TCFD Recommendations)
Achieving a Resource-Efficient Society
Achieving a Harmonized Society with Nature
Environmental Data

prices, convert into monetary value as the effect of CO2

surement standard.

We will continue to use HICP, raising the carbon price as necessary to reduce CO2 emissions.

reductions due to investment in equipment that contributes todecarbonization. We add this price to the value of energy
reduction effects, and use the result to evaluate the impact of
our investment. By applying incentives like these, we aim tofurther expand our investment in equipment that contributes
to decarbonization.
Increased burdens from carbon taxes and new emission
regulations can be anticipated in the future. Taking such risk

Hitachi Internal Carbon Pricing (HICP) Framework
Approach to Assessing Investment Effectiveness with HICP
CO2 reduction effects areconverted into monetary value
and added virtually

Investment effect inmonetary terms

factors into account from the stage of equipment investment

Asset values
increaseconsiderations and making investments that contribute todecarbonization a higher priority will help minimize the impactsof future climate change risks and make our company more

CO2
reductioneffects

resilient. The introduction of the HICP framework is instrumental in this process.

Virtual effects are
realized when
Investments areassessedsideration of 2025 carbon taxes and carbon trading prices
the rate to 14,000 yen/t-CO2 in August 2021 in considerationof anticipated carbon taxes and carbon trading prices. We

EnergyreductioneffectEnergyreductioneffectwill leverage this framework to provide early responses to

BeforeAfter

future risks such as carbon taxes as well as to actively pro-

Beforeintroducing HICP

After
introducing HICP

mote the installation of energy-saving and renewable energy
equipment, our highest priority initiative aimed at achievingcarbon neutrality.
*1 Internal carbon pricing: An in-house tool for assessing in monetary terms theamount of carbon generated or reduced in order to voluntarily make investment
decisions and conduct risk management.
*2 ETS: Emission Trading Scheme

Category

FY2019FY2020*1

FY2021*1

FY2022*1

Number of HICP
Projects

35

22

59

94

Investment(Million (JPY))

260

250

1,464

1,185

1,356

447

1,230

2,519

CO2 Emissions
Reduction (t-CO2)

The HICP rate: ¥5,000/t-CO2 ¥14,000/t-CO2
August 2021
*1 Excluding an energy-related company which became a consolidated subsidiaryin fiscal 2020

Initially, we set the HICP rate at 5,000 yen/t-CO2 in con(ETS*2). Subsequently, looking ahead to 2030, we increased

HICP Implementation Results

CO2 reduction = cost reduction
Facilities that generate less CO2 have higher asset values

Introduction

Environmental

Management

Activities and Achievements

Advancing Our Environmental Vision andLong-Term Environmental Targets
Environmental Governance

The Hitachi Environmental Action Plan for 2024 describes atarget of the total CO2 reduction rate at business sites (factoIn fiscal 2022, which was the first year of the Environmental
Action Plan for 2024 (fiscal 2022–2024), we achieved a 40%

Achieving a Decarbonized Society

reduction in total CO2 emissions compared to a target of 32%	Contributing to a DecarbonizedSociety at Business Sites(Factories and Offices)
Climate-related Financial Information Disclosure(Based on TCFD Recommendations)
Achieving a Resource-Efficient Society

Power plants
North America

reduction (compared to a base year of fiscal 2010). To reduce
emissions, we improved facility efficiency through new andupgraded high-efficiency equipment, installed renewable energy

5,000

4,973

4,000
3,000

40
reduction

Environmental Data%

CO2 Emissions*1

Target rate: 32%

100%

57
15

Governance236

To reduce CO2 emissions, Hitachi installs renewable energy

572

cure electricity produced through new renewable energy

8330

equipment located off-premises. We are expanding the use of
3,296

56
18

3,384

1,003

1,039

360

364
185

1,448

derived electricity with electricity derived from renewableenergy sources.

178

1,563

1,538
385

73
43

set by the GHG Protocol.

197

226

2020

180

2021

174

2022*1*2 (FY)

*1 Energy-derived CO2 emissions in fiscal 2022 amounted 459 kt-CO2 (Scope 1)
and 1,079 kt-CO2 (Scope 2, market basis)*2 Fiscal 2022 CO2 emissions of an energy-related company and auto parts-­
related companies, which became consolidated subsidiaries in fiscal 2020, areincluded in the figures above. The materials and construction machinerycompanies were deconsolidated, and the amount of CO2 emitted by thosecompanies in fiscal 2022 was not included. This resulted in a significant
decrease in the total CO2 emissions.

P.063 Environmental Load from Operations

60%

Renewable electricity used will be based on the standards

533
228

2019

P.061 GHG Emissions Throughout the Value Chain
CO2 Emissions

corporate PPA to accelerate the replacement of fossil fuel-­

44
16

133
2,030

554

Achievements in Fiscal 2022
Renewable electricity generation across the HitachiGroup in fiscal 2022 amounted to 706 GWh, anincrease of 3.7 times compared to fiscal 2021. The
amount of renewable electricity used by the HitachiGroup in fiscal 2022 increased significantly from 4% in
the previous fiscal year to 24%.
At 57 sites the United States, Europe, China, Japanand some other countries in Asia, all electricity usedcame from renewable sources. Eleven of these sites
achieved carbon neutrality through enhanced energy-­savings and purchases of credits for neutralization.
In addition, Hitachi Energy is working actively to

FY2010

FY2022(Base year)
Note: Regarding CO2 electrical power conversion factors: We used adjusted conversion factors forindividual power businesses based on the Act on Promotion of Global Warming Countermeasures
in Japan. In China, we used the average emissions factor published by the government for thenational power grid. For other countries, we used the latest values for each fiscal year supplied by
the International Energy Agency (IEA) for individual countries and by power supply companies.
Note: The Environmental Action Plan’s management values do not include amounts for our power plants
in fiscal 2010 (base year) or fiscal 2022
Note: Only for Environmental Action Plan for 2024 management values, emissions of 11.6 kt-CO2 fromthe cancellation of credits for neutralization were deducted from Scope 1. For the figures that
underwent independent assurance, emissions from the cancellation of credits for neutralization
were not deducted.
*1 CO2 emitted from the organization (Scope 1 and 2).

041

Activities

ASEAN, India, Other Asia

2,285

2018

Hitachi Sustainability Report 2023

Introduce Renewable Energy

264

1,000

Assurance

power generation equipment on our property. We also pro4,374

540

2,000

Environmental Action Plan for 2024 Management Values

Compared With Base Year

China
Other

1,167

0

Reduction Rate of Total CO2 (Hitachi Group)

Japan
Europe1,286

equipment, and procured electricity from renewable sources.

Achieving a Harmonized Society with Nature

Social(kt-CO2)

ries and offices).

Achieving a Decarbonized Society
Contributing to a Decarbonized Society
Through the Decarbonization Business

Environmental

CO2 Emissions (Hitachi Group’s factories, offices,and power plants)
GRI 302-1/305-4/305-5

Activities

Environmental

Social Innovation

decarbonize operations through the use of non-fossil
fuel electricity for all of its in-house electricity usage.

Introduction

Environmental

Management

Carbon Neutrality

Contributing to a Decarbonized Society
Through the Decarbonization Business	Contributing to a DecarbonizedSociety at Business Sites(Factories and Offices)
Climate-related Financial Information Disclosure(Based on TCFD Recommendations)
Achieving a Resource-Efficient Society
Achieving a Harmonized Society with Nature
Environmental Data

Governance3 sites (Hitachi Energy Group)
1 site (Hitachi Astemo Group)

9 sites

1 site (Hitachi Industrial Equipment
Systems Group)

China

6 sites

1 site (Hitachi Industrial Equipment
Systems Group)Japan

3 sites

3 sites (Hitachi High-Tech Group)

Asia (Excluding
China and Japan)

7 sites

2 sites (Hitachi Energy Group)

Other

8 sites

North America

Assurance

Achievements in Fiscal 2022
Fiscal 2022 reduction measures focused on improving
loading efficiency for product transportation, utilizing joint

24 sites

EuropeEnvironmental GovernanceAchieving a Decarbonized Society

Social

Hitachi Sustainability Report 2023

042

Hitachi Fleet Management

Sites Using 100% Renewable-Derived Electricity

Environmental

Achieving a Decarbonized Society

Environmental

Locations operating on non-fossil energyCountry/Region

Advancing Our Environmental Vision andLong-Term Environmental Targets

Social Innovation

VehicleVisualization

Centralized fleet management via BPO
AI drive recorders to monitor vehicle operation statustransportation, and optimizing transportation vehicles.
With the deconsolidation of the materials and construction machinery divisions, CO2 emissions from transportation in Japan totaled 26.9 kt-CO2, a decrease of 47.4

kt-CO2, or 64%, compared with fiscal 2021.

Analysis of vehicle operation status and travel routes
Vehicle Data
AnalysisAnalysis of driver tendencies
Continuous monitoring of electrification rates andCO2 emissions—

Case studies of Energy Savings in Eco-Factories & Offices
https://www.hitachi.com/environment/casestudy/index.html#case02

Hitachi Fleet Management Reduces
CO2 Emissions From Business Vehicles
Approach

Reducing Transportation Energy
Consumption
Activities

Hitachi is preparing to electrify our fleet of commercial­vehicles as part of efforts to achieve carbon neutrality byfiscal 2050. However, we must address a variety of issues
that companies face when introducing electric vehicles,

In addition to reducing energy used at our business sites

including the limited choice of electric vehicles and the lack(factories and offices), Hitachi strives to reduce energy usageof charging infrastructure.

during transportation. Each business unit (BU) and GroupTo this end, we created our own fleet management plan tocompany incorporates the rate of reduction in transportation

prepare for fleet electrification at each BU and Group company.

energy use per unit in Japan, with voluntary targets estab-Specifically, we intend to use BPO*1 and AI drive recorders*2 tolished in other countries.

visualize vehicle operating conditions, followed by an analysis of

Our business sites pursue modal shifts to highly efficientcollected driving data and CO2 emissions monitoring. We willtransportation methods by improving truck loading ratios,

use the results of this analysis and monitoring to act to reducetaking other measures to reduce transportation energy

CO2 emissions from existing vehicles and advance the gradual­consumption and switching to the use of eco-cars for

replacement of existing vehicles with electric vehicles to reduce

in-house operations.

CO2 emissions from business-use vehicles.
*1 BPO: Abbreviation of business process outsourcing. BPO outsources theentirety of a business process to a contractor specializing in said activity.
*2 AI drive recorder: A service that uses AI to analyze recorded driving video andvisualize signs of dangerous driving and driver tendencies.

Optimize the number of vehicles in the fleet basedon vehicle utilization status
Actions to
Reduce CO2Emissions

Encourage eco-driving by controlling sudden
acceleration and braking
Fostering awareness of CO2 reductions via
visualizations of emissions
Phased-in vehicle electrification in consideration of
impact on operations

Introduction

Environmental
Environmental

Management

Social Innovation

Environmental

SocialGovernance

Assurance

Hitachi Sustainability Report 2023

043

Climate-related Financial Information Disclosure (Based on TCFD Recommendations) GRI 3-3
In June 2018, Hitachi announced its endorsement of theinformation disclosure and disclosed information with appro-

Advancing Our Environmental Vision andLong-Term Environmental Targets

recommendations by the Financial Stability Board’s (FSB) Task

priate investment decisions by financial institutions andForce on Climate-related Financial Disclosures (TCFD). The

others. We participated in the consortium as a Steering

P.035 Environmental Strategy for Achieving a Decarbonized Society

Environmental Governancefollowing contains key climate-related financial information in

Committee member and contributed to the formulation ofAchieving a Decarbonized Societyline with the TCFD’s recommendations.

TCFD Guidance 3.0, published in October 2022.

P.039 Contributing to a Decarbonized Society at Business Sites(Factories and Offices)Achieving a Decarbonized Society
Contributing to a Decarbonized Society
Through the Decarbonization BusinessContributing to a Decarbonized Society at
Business Sites (Factories and Offices)	
Climate-related Financial Information

Disclosure (Based on TCFD
Recommendations)
Achieving a Resource-Efficient Society
Achieving a Harmonized Society with Nature
Environmental Data

Seven institutions rated the Hitachi TCFD disclosures
highly in the Excellent TCFD Disclosure, announced in
March 2023, as selected by the Government Pension

Identification and Assessment of Climate-related
Risks and Opportunities

P.015 Framework for Promoting Sustainability Strategy
P.031 Framework for Promoting Environmental Governance

The Hitachi Group operates a broad array of businesses

Investment Fund of Japan (GPIF) domestic equity investment
management institutions.

GovernanceP.027 “Environmental Vision” and “Hitachi Environmental Innovation
2050”

around the world with each business having its own set ofStrategy
Approachrisks and opportunities. We are responding to the impact of
GRI 201-2

climate change by assessing climate-related risks and opportunities in accordance with TCFD classifications. We makeIn fiscal 2016, under our Environmental Vision and considering

sector-specific assessments of risks and opportunities for

the Paris Agreement, the RCP2.6 Scenario*1, and RCP8.5

important business sectors that have a relatively high likeli-

Hitachi sees climate change and other environmental issues

Scenario*2 of the Fifth Assessment Report of the IPCC,

hood of being affected by climate change. Our assessments

as important management issues.

Hitachi created Hitachi Environmental Innovation 2050, long-

are also categorized according to time span, namely shortterm environmental targets and a transition plan toward aterm, medium term, and long-term as defined below.

Structure

Important matters concerning the Group’s sustainability
strategy, including climate change measures, are discussed,

decarbonized society. In this way, we intend to meet the con-and decided on by the Senior Executive Committee and are

tributions required of a global company toward the creation ofpresented to the Board of Directors according to necessity.

a decarbonized society. Moreover, to help limit the global

Hitachi reviewed long-term environmental targets, termed

temperature rise to 1.5°C as recommended in the IPCC 1.5°C

Hitachi Environmental Innovation 2050, which include reduc-special report, in fiscal 2020, we revised our target to achieve

ing CO2 emissions. Our Board of Directors receives a reportcarbon neutrality at Hitachi factories and offices by fiscal

regarding these targets when formulated or revised. In addi-

2030. In fiscal 2021, we revised our target once more totion, the Audit Committee of independent directors conducts

achieve carbon neutrality in our value chain by fiscal 2050.

an audit of sustainability-related operations once a year, andThis goal is in line with the SSP1-1.9 scenario*3 of the Sixth

Hitachi executive officers report on climate-related issues toAssessment Report of the IPCC. Hitachi is committed tothe committee during the audit.

contributing to the creation of a decarbonized society on a

As for TCFD initiatives we conduct outside the company,
Hitachi has participated in the TCFD Study Group on Green
Finance and Corporate Disclosures arranged by Japan’s
Ministry of Economy, Trade and Industry (METI) since 2019.
In addition, we have participated in the TCFD Consortium,
which holds discussions on efforts to link effective corporate

Time Spans for Assessing Climate-related Risks andOpportunities
Time span

Reason for adoption

Short
term

Over the next
three years,
from fiscal
2022 to 2024

Corresponds to the three-year management period covered by the Environmental
Action Plan for 2024 established in linewith the 2024 Mid-term Management Plan

Mediumterm

Through fiscal
2030

Time span of our fiscal 2030 long-term
environmental targets

Long
term

Up to fiscal
2050

Time span of our fiscal 2050 long-term
environmental targets

global scale by declaring and pursuing higher goals.

Degrees of Impact*1 A Representative Concentration Pathway (RCP) scenario under which, at the endof the 21st century, the increase in global temperatures from preindustrial levels is
kept below 2°C.
*2 An RCP scenario that assumes that emissions will continue to rise resulting in an
approximately 4°C rise in global temperatures compared to preindustrial levels.
*3 SSP1-1.9 scenario: Presented in the Sixth Assessment Report of the IPCC. A
scenario that limits temperature increase to less than 1.5°C under sustainable
development.

ImpactDefinition

Major

Has an impact sufficient to disrupt business or cause it
to substantially decrease or increase

MediumPart of the business is impacted

Minor

There is little impact

Introduction

Environmental
Environmental
Advancing Our Environmental Vision andLong-Term Environmental Targets
Environmental GovernanceContributing to a Decarbonized Society
Through the Decarbonization BusinessContributing to a Decarbonized Society at
Business Sites (Factories and Offices)	
Climate-related Financial Information

Disclosure (Based on TCFD
Recommendations)
Achieving a Resource-Efficient Society

Environmental

Social Innovation

SocialGovernance

Hitachi Sustainability Report 2023

Assurance

044

Responding to Climate Scenario Risks and Opportunities for Each Business
Hitachi operates a broad array of businesses with each business having its own set of risks and opportunities. We therefore selected businesses that have a relatively high likelihood of being affected byclimate change and conducted scenario analyses. In selecting businesses, we considered the factors of, high sales volume within the Group, and relatively high need for fossil fuels when products andservices are used, as well as high CO2 emissions.
The businesses we selected using these criteria were railway systems, power generation and power grids, IT systems, and industrial equipment. For each of these businesses, we considered thebusiness environment under the 1.5°C and 4°C scenarios and how we would respond.
● 1.5°C scenario As projected by the IPCC’s RCP 2.6 climate model, the IEA 450 Scenario, and other scenarios, we are anticipating a world where stringent measures and regulations will be implemented to help realize a decarbonized society. Therefore, we investigated risks and opportunities on the premise of carbon neutrality by fiscal 2050.

Achieving a Decarbonized Society
Achieving a Decarbonized SocietyManagement● 4°C scenario

We focused on there being increased climate-induced natural disasters as a result of lax regulations as projected by the IPCC’s RCP8.5 scenario and other scenarios.

Our assessment of the major risks and opportunities for the selected businesses are outlined in the following table.
The Business Environment, Major Risks and Opportunities, and Strategies under the 1.5°C and 4°C Scenarios
Target businesses

Railway systems

The businessenvironment andmajor risks andopportunities
under the 1.5°C
scenarioBusiness environment

Business environment

Business environment

Business environment

Global demand will continue to grow for railway
transport systems that emit relatively less CO2 per
distance covered will grow with tighter CO2 emission regulations in each country and region.

Global demand will continue to grow for electricity
from non-fossil sources, such as renewable energy
and nuclear power, with tighter CO2 emission
regulations in each country and region. Power
networks will increasingly accommodate renewableenergy produced through distributed power
generation.

Demand for energy-saving, high-efficiency IT
solutions will grow with tighter CO2 emission regulations in each country and region. There will also be
increased demand for data centers and data
analysis systems to accommodate the expansion offinancial services such as investments and loans for
decarbonization businesses, green bond issues,and data utilization businesses.

Global demand for energy-saving industrial equipment will grow with tighter CO2 emission regulations
in each country and region.

Achieving a Harmonized Society with Nature
Environmental Data

Power generation and power grids

IT systems

Industrial equipment

Risks

Risks

Risks

Risks

A decline in competitiveness in the railroad sector if
there are delays in the development of innovativetechnologies of the type expected to contribute to the
reduction of CO2 emissions. Specifically, delays in thedevelopment of new technologies such as dynamic
headways (flexible operations based on passenger
demand) and support for new mobility services (e.g.,
MaaS). Also, a decline in competitiveness due todelays in the timely marketing of effective and sustainable products that comply with increasingly
stringent laws and regulations for decarbonization.

A decline in competitiveness due to delays in thedevelopment of technologies for the transmission of
more renewable energy without compromising thestability of the transmission grid or the quality ofelectricity. A lack of international and regional
cooperation to maintain a balance between supply
and demand in the power grid for renewable energy
generation having large output fluctuations, resulting delays in renewable energy utilization.

Competitiveness will decline if there is a lack oftechnological and human resource development toprovide energy-saving and highly efficient IT solutions and if decarbonized measures for energy-­
intensive data centers are delayed.

Competitiveness will decline if there are delays inthe development of high-efficiency, low-loss
products.

Opportunities

Opportunities

Opportunities

Opportunities

A transition of most long-distance public transportation to the railway sector under the 1.5°C scenario,
since rail is a mode of transportation that contributes
to decarbonization with low CO2 emissions per unit oftransportation. Expanded business opportunities bydeveloping and delivering railroad cars that are moreenergy efficient than existing models, by converting tobi-mode railroad cars, and by increasing the efficiencyof rail services with digital technology.

Expanded business opportunities in conjunction
with rising demand for renewable energy—the key
to a decarbonized future—and with the development of grid solutions, digital service solutions, andenergy platforms that can accommodate thediversification of energy suppliers.

Demand will grow for energy saving and high-­
efficiency information systems that contribute tozero-emissions. There will also be increased
demand for environment-related financial services
as investments and loans for decarbonization
businesses and green bond issues.

Utilization of IoT, digitalization, and connected
systems to develop innovative products and solutions that contribute to CO2 emission reductions
without relying on the energy-saving features ofindividual products.

Introduction

Environmental
Environmental
Advancing Our Environmental Vision andLong-Term Environmental Targets

Management

Environmental

Social Innovation

SocialGovernanceTarget businesses

Railway systems

The businessenvironment andmajor risks andOpportunities
under the 4°C
scenarioBusiness environment

Business environment

Business environment

Business environment

Demand for electric-powered transport will gradually increase even without tighter energy regulations. Damage from typhoons, floods, and othernatural disasters caused by climate change will rise
sharply.

The cost competitiveness of non-fossil energy will
increase as fuel prices gradually increase due toincreased fossil energy consumption, and demand
for renewable energy and nuclear power will
increase moderately. Natural disasters caused byclimate change will rise sharply. Needs will increase
for climate adaptation to protect electric energy
systems from extreme weather events.

Demand for new, high-efficiency technology will
expand as multiplex IT systems in response tonatural disaster BCPs will result in increased energy
consumption. Demand will also grow for social andpublic systems to reduce damage from natural
disasters.

Typhoons, floods, and other natural disasters
caused by climate change will rise sharply.

Environmental GovernanceAchieving a Decarbonized Society
Achieving a Decarbonized Society
Contributing to a Decarbonized Society
Through the Decarbonization BusinessContributing to a Decarbonized Society at
Business Sites (Factories and Offices)

Environmental Data

Non-environmental
market factors(neither the 1.5°C
nor 4°C scenario)

Industrial equipment

Risks

Risks

Risks

Risks

The high frequency of natural disasters will increase
damage to power generation and transmission/
distribution facilities, hamper efforts to restore powertransmission/distribution, and disrupt supply chainsleading to delays in deliveries and the procurementof parts. Increased delays in the development andprovision of power generation, transmission, anddistribution equipment, facilities, and services
capable of withstanding frequent natural disasters.

Natural disasters will exacerbate damage to production facilities, worsen working environments,
and disrupt supply chains leading to delays indeliveries and the procurement of parts.

Natural disasters will exacerbate damage to production facilities, worsen working environments,
and disrupt supply chains leading to delays indeliveries and the procurement of parts.

Disclosure (Based on TCFD
Recommendations)
Achieving a Harmonized Society with Nature

IT systems

045

The high frequency of natural disasters will exacerbate damage to production facilities, worsen
working environments, and disrupt supply chainsleading to delays in deliveries and the procurementof parts.

	
Climate-related Financial Information

Achieving a Resource-Efficient Society

Power generation and power grids

Hitachi Sustainability Report 2023

Assurance

Opportunities

Opportunities

Opportunities

Opportunities

Transport systems more resilient to natural disasters
can be developed. Competitiveness can beenhanced by providing added value in such forms
as energy-saving railcars and adaptability to newtechnologies.

Energy demand will grow as warmer weather leads
to increased use of air conditioning. Demand will
increase for disaster-resilient power generation andtransmission/distribution technologies. Increase thecompetitiveness of existing power transmission anddistribution systems by making these systems more
resilient to extreme weather conditions.

Demand will increase for social and public systems
that help reduce damage from natural disasters andfor IT systems required as part of BCP.

Efforts to accommodate IoT products will lead tohigher demand for remote control and remote
maintenance during natural disasters.

● Economic growth will lead to urbanization andpopulation growth around the world which will
drive the railway business globally as an efficient
form of public transport for large numbers ofpassengers regardless of climate conditions.
Market size in Japan and Europe will remain flat,but the Asian market overall will see substantial
growth.
● Long-distance transport will decline going forward as the global pandemic restricts travel andencourages remote work. Although the decline indemand will not be as severe as that for airtransport.
● Competition will grow as major railway manufacturers in various countries will expand theirbusinesses to meet global demand.

● Economic growth, urbanization, and population
growth will push up demand for energy, especially electricity, mainly in developing countries.
● Political trends in each country and region related
to climate change and energy issues, andchanges in public awareness.
● Energy supply and demand will diversify due tovarious factors, such as CO2 emissions, theenvironmental burden, economic performance,
safety, and supply stability.
● Digital technology will develop further to enhance
the stability and efficiency of the power supply.

● Further digitization globally will exponentially
increase the volume of data circulated, accumulated, and analyzed. Experience with the global
pandemic will prompt a shift to remote, noncontact, and online formats, both in our life and work
and will boost demand for digital solutions thatfacilitate such a shift.
● New services and businesses utilizing big data,
IoT, AI, and other digital technology will expand.

● Digitalization, infrastructure renewal, population
decline, and worker shortages will expand theautomation market in industrial countries.
● As the global pandemic forces people to stay ator work from home, demand will grow for factory
automation enabling a handful of workers tooperate a factory.
● The industrial market in emerging economies willgrow due to a rise in production plants.

Introduction

Management

Social Innovation

Environmental

SocialGovernance

Assurance

Hitachi Sustainability Report 2023

046

Environmental

Target businesses

Railway systems

Power generation and power grids

IT systems

Industrial equipment

Environmental

Response to futurebusiness risks(business
opportunities)

Response to business risks under 1.5°C or 4°C
scenarios

Response to business risks under 1.5°C or 4°C
scenarios

Response to business risks under 1.5°C or 4°C
scenarios

Response to business risks under 1.5°C or 4°C
scenarios● Continue to strengthen the railway business as
global demand for railways will increase undereither scenario.
● Specifically, develop and market more energy-­saving railcars and battery powered railcars for
non-electrified sections. Strengthen railway
services through digital utilization such as
dynamic headway (flexible operations in
response to passenger demand) and new mobility services like MaaS.
● Increase competitiveness by strengthening
sustainable activities while adhering to international standards, etc.
● Given the increasing frequency of natural disasters, take risk aversion into account when deciding the location and equipment layout of a newplant. Keep an eye on the supply chain instrengthening our ability to respond to businessdisruption risks in accordance with our BCPs.
Evaluate and analyze organizational structuresand physical locations and reflect the results ofthis work in response measures.

● Continue to enhance the response to relevantmarkets in view of expected higher demand fornon-fossil energy under either scenario.
● Strengthen the provision of grid solutions, digital
service solutions, and energy platforms that canaccommodate the increased use of renewableenergy and diversification of energy supply anddemand management.
● Given the increasing frequency of natural disasters, develop technologies for disaster-resilient
renewable energy systems and disruption-­
resistant power transmission/distribution systems. Take risk aversion into account when
deciding the location and equipment layout of anew production plant. Keep an eye on the supply
chain in strengthening our ability to respond tobusiness disruption risks in accordance with our
BCPs.

● Continue to develop innovative digital technologies, nurture necessary human capital, andenhance digital service solutions that generate
new value in view of the expected growth indemand for digital services and the subsequent
market expansion under either scenario.
● Specifically, enhance competitiveness by providing energy-saving and high efficiency IT solutions
that contribute to the following: zero-emissions;environment-related financial services for decarbonization businesses; social and public systems
to prevent natural disasters, reduce damage, andenhance resilience; and IT systems for BCPs.
● Given the increasing frequency of natural disasters, strengthen our ability to respond to business disruption risks in accordance with our
BCPs.
● Ensure competitiveness by decarbonizing data
centers actively.

● Under either scenario, continue developing
energy-saving, high efficiency products that use
IoT technology. Focus particularly on connected
products with communication features.
Miniaturized, high-efficiency, low-loss products
can also help reduce CO2 emissions.
● Given the increasing frequency of natural disasters, take risk aversion into account when deciding the location and equipment layout of a newplant. Keep an eye on the supply chain instrengthening our ability to respond to businessdisruption risks in accordance with our BCPs.

Partial impact on the revenue of the Railway
Systems Business, which accounted for approximately 6.8% of Hitachi’s revenue at 736.0 billion
yen in fiscal 2022

Partial impact on the revenue of the Energy Sector,
which accounted for approximately 16.4% of
Hitachi’s revenue at 1,787.6 billion yen in fiscal
2022

Partial impact on the revenue of the Digital Systems& Services Segment, which accounted for approximately 22.0% of Hitachi’s revenue at 2,389.0 billion
yen in fiscal 2022

Partial impact on the revenue of the Industrial
Products Business , which accounted for approximately 4.1% of Hitachi’s revenue at 451.1 billion
yen in fiscal 2022

Advancing Our Environmental Vision andLong-Term Environmental Targets
Environmental GovernanceAchieving a Decarbonized Society
Achieving a Decarbonized Society
Contributing to a Decarbonized Society
Through the Decarbonization BusinessContributing to a Decarbonized Society at
Business Sites (Factories and Offices)	
Climate-related Financial Information

Disclosure (Based on TCFD
Recommendations)
Achieving a Resource-Efficient Society
Achieving a Harmonized Society with Nature
Environmental Data

Financial information (sales volumeof each target
sector)Note: The above scenario analyses are not future projections but attempts to examine our resilience to climate change. How the future unfolds may be quite different from any of these scenarios.

Introduction

Environmental
Environmental
Advancing Our Environmental Vision andLong-Term Environmental Targets

Management

Environmental

Social Innovation

SocialGovernance

Assurance

Hitachi Sustainability Report 2023

047

Climate-related Risks (Hitachi Group)
Based on a business-by-business review, Hitachi did not find any significant climate change-related risks that were difficult to respond to risks that present difficulties in response.
When considering whether existing businesses will be viable when a decarbonized society is realized, many businesses that use electricity as their energy must be able to adapt to a decarbonizedsociety by replacing the electricity they use with electricity derived from non-fossil energy sources. On the other hand, businesses that currently use fossil fuels will need to adapt to a decarbonizedsociety by adopting new technologies such as hydrogen and biomass, as well as various measures to offset CO2 emissions. Since many of Hitachi’s businesses use electricity, it is clear that there is little
significant risk arising from the unavailability of fossil fuels.

Environmental GovernanceAchieving a Decarbonized Society
Achieving a Decarbonized Society
Contributing to a Decarbonized Society
Through the Decarbonization BusinessContributing to a Decarbonized Society at
Business Sites (Factories and Offices)	
Climate-related Financial Information

Disclosure (Based on TCFD
Recommendations)

The following is a summary of Hitachi’s overall risks under the 1.5°C scenario and the 4°C scenario. Given Hitachi’s business format, we have determined that these risks related to climate change canbe addressed.
① Risks related to the transition to a decarbonized economy (applying mostly to the 1.5°C scenario)
Category

Time span

ImpactMain initiatives

Policy and legal

Increased business costs from the introduction ofcarbon taxes, fuel/energy consumption taxes,
emissions trading systems, and other measures

Short to long term

Medium● Shift from fossil fuel-using to non-fossil fuel-using businesses. Promote activities aimed at achieving carbon
neutrality.
● Avoid increases in business costs by further enhancing production and transport efficiency and promoting theuse of non-fossil fuel-based energy. Promote energy-saving equipment by introducing Hitachi Internal Carbon
Pricing (HICP)

Technology

Loss of sales opportunities due to delays intechnology development for products and services for a decarbonized society

Short to long term

Medium● Contribute to reducing CO2 emissions by developing and marketing innovative products and services that lead tothe achievement of long-term environmental targets and expanding the decarbonization business● Promote the development of energy-saving and low-carbon products by implementing Environmentally
Conscious Design Assessments when designing products and services

Market and reputation

Impact on sales due to changes in market values
or assessment of our approach to climate issues

Medium to long term

Minor

● Established goals of carbon neutrality in the Hitachi Environmental Innovation 2050 long-term environmental
targets; participated in COP26 and communicated to the world advanced technologies and initiatives that support the realization of a decarbonized societyTime span

ImpactMain initiatives

Short to long term

MediumAchieving a Resource-Efficient Society
Achieving a Harmonized Society with Nature

Major risks

Environmental Data

② Risks related to the physical impacts of climate change (4°C scenario)
Category

Acute and chronic
physical risks

Major risks
Climate-related risks to business continuity
including increased severity of typhoons, floods,
and droughts (acute risks), as well as rising sea
levels and chronic heat waves (chronic risks)● Considering the possibility of flood damage when deciding on the location or equipment layout of a new plant;measures tailored to the water risks of each manufacturing site will be strengthened in the future based on the
results of a water risk assessment now being conductedIntroduction

Environmental
Environmental
Advancing Our Environmental Vision andLong-Term Environmental Targets
Environmental GovernanceAchieving a Decarbonized Society
Achieving a Decarbonized Society
Contributing to a Decarbonized Society
Through the Decarbonization BusinessContributing to a Decarbonized Society at
Business Sites (Factories and Offices)	
Climate-related Financial Information

Disclosure (Based on TCFD
Recommendations)Management

Social Innovation

Environmental

SocialGovernance

Assurance

Hitachi Sustainability Report 2023

Climate-related Opportunities (Hitachi Group)
To achieve the CO2 reduction targets set forth in our long-term environmental targets and 2024 Mid-term Management Plan, it is important not only to decarbonize our business sites (factories andoffices), but also to reduce CO2 emissions from the use of products and services sold, which account for a large portion of emissions in our value chain. Developing and providing products and services
that emit zero or very little CO2 during their use will not only satisfy customer needs, but also help meet society’s demands for reduced emissions. This represents a business opportunity for us in the
short, medium, and long terms, and constitutes a major pillar of the Social Innovation Business that we are promoting as a management strategy.
Category

Major Opportunities

ImpactMain initiatives

Services and Markets
for Products

Increased corporate value and revenue fromexpanded sales of products and services with
innovative technology that can contribute to themitigation and adaptation of climate change

Major● Expand business areas that contribute to decarbonization.
● Promote decarbonized solutions and services through collaborative initiatives with customers.
● Focusing on the fields of energy, mobility, and connective industries we pursue the greater utilization of digital technology (Green by Digital)and develop products that offer world-class efficiency.

Resilience

Provision of solutions to address climate-related
natural disasters

Medium● Providing flood simulators and evacuation/emergency operation support systems● Providing disaster prevention solutions such as high-performance firefighting command systems

P.036 Expanding the Decarbonization BusinessP.054 Products and Services that Contribute to Resolving Water Issues

P.056 Addressing Risks Related to Water and Biodiversity

Achieving a Resource-Efficient Society
Achieving a Harmonized Society with Nature
Environmental Data048

The results of these studies indicate that Hitachi has not uncovered any significant or difficult-­toaddress climate change-related risks at this stage. We believe we can view our contributions toclimate change action as opportunities. Hitachi believes that we have high resilience in the transition to a decarbonized society in the medium to long term, as we closely monitor market trends
and develop business flexibly and strategically under both the 1.5°C and 4°C scenarios.

Introduction

Environmental

Management

Social Innovation

Risk Management
Structure

Environmental

Environmental

SocialGovernance

Assurance

Hitachi Sustainability Report 2023

049

Metrics and Target
Targets

P.013 Reflecting Sustainability Targets in Executive Compensation
Evaluation

Hitachi identifies, evaluates, and manages climate change-­

Hitachi defines medium- to long-term metrics and targets in

Advancing Our Environmental Vision andLong-Term Environmental Targets

related risks by business unit and Group company to deter-

the Hitachi Environmental Innovation 2050 long-term environ-mine environmental impacts and other factors. The results aremental targets. We also establish and manage short-term

Environmental GovernanceP.027 “Environmental Vision” and “Hitachi Environmental Innovation
2050”

tabulated by the Sustainability Promotion Division of Hitachi,

metrics and targets in detail every three years through theP.030 Environmental Action Plan

Achieving a Decarbonized SocietyLtd., and those risks and opportunities perceived as being

Environmental Action Plan.

Achieving a Decarbonized Society
Contributing to a Decarbonized Society
Through the Decarbonization BusinessContributing to a Decarbonized Society at
Business Sites (Factories and Offices)	
Climate-related Financial Information

Disclosure (Based on TCFD
Recommendations)
Achieving a Resource-Efficient Society
Achieving a Harmonized Society with Nature
Environmental Data

particularly important for the Group as a whole are deliberated

Metrics for climate change mitigation and adaptation use

and decided by the Senior Executive Committee and, if neces-

total CO2 emissions and the reduction rate in CO2 emissions

sary, by the Board of Directors as well.

per unit. Total CO2 emissions from the use of sold products in
Scope 3, which account for most of our emissions given thenature of Hitachi’s business, fluctuate greatly due to changes
in sales volumes and our business portfolio. This has the
disadvantage of making it difficult to see the results of energy
saving and efficiency improvements. Therefore, we haveestablished CO2 emissions per unit as a metric for providing
customers and society with products and services that offer
equivalent value while emitting less CO2. We also set andmanage a metric for avoided emissions that contribute to therealization of a decarbonized society as a whole.
We continue to reduce CO2 emissions generated at ourown business sites (factories and offices) by utilizing the
Hitachi Internal Carbon Pricing (HICP) system, which provides
incentives for capital investments that contribute to CO2
reductions. The carbon price for HICP is set at 14,000 yen
per ton-CO2.
In addition, in April 2021, Hitachi, Ltd. introduced evaluations that take environmental value into account in the executive compensation system with a view to accelerating thecreation of environmental value toward achievement of longterm environmental targets.

P.035 Achieving a Decarbonized Society
P.036 Expanding the Decarbonization BusinessP.039 Contributing to a Decarbonized Society at Business Sites(Factories and Offices)
P.061 Calculating GHG Emissions Throughout the Value Chain(Fiscal 2022)