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Climate Change

Hitachi to eliminate greenhouse gases from supply chain by 2050

Japanese group will work with 30,000 suppliers to shift away from carbon

Hitachi aims for net zero carbon dioxide emissions across its entire supply chain.   © Reuters

TOKYO -- Hitachi has pledged to go carbon neutral across its value chain by fiscal 2050, becoming one of the first Japanese manufacturing powerhouses to set an ambitious sustainability target that covers an extensive supplier web.

The industrial group upgraded its climate goal in a statement Monday. Hitachi previously aimed to reduce direct emissions at its factories and offices to zero in net terms by fiscal 2030, while slashing those from suppliers, customers and other related companies 80% by 2050 from 2010 levels.

"Green technology in a digital world is a real engine for growth, and it's an exciting time to help cities, governments and companies cut carbon whilst accelerating our own potential as a climate change innovator," Chief Environmental Officer Alistair Dormer said.

Hitachi's commitment covers "production, procurement and use of products and services," according to the statement.

Hitachi's supply chain emitted 110 million tons of carbon dioxide equivalent in fiscal 2019, with 96% of the global warming gas being so-called Scope 3 emissions, which come from other players in its value chain that are not part of the group's operations. To achieve the upgraded goal, extensive efforts involving about 30,000 suppliers will be essential.

Hitachi aims to have 13 business sites with net-zero carbon emissions by March 2022, up from just three a year earlier. (Photo by Yoichiro Hiroi)

The Japanese group looks to develop an information technology system for ascertaining precise levels of internal and external energy consumption. The blockchain system will track where renewable energy is supplied, identifying a specific facility down to a specific piece of equipment.

This system was deployed at one of Hitachi's research institutes in Tokyo in February and will be made available to other companies so that they can see energy consumption at factories by fiscal 2022.

Starting this fiscal year, Hitachi is asking suppliers to devise plans for reducing their carbon footprint. The company also revised its green procurement guidelines in July, and has begun creating a medium- to long-term plan with about 800 core suppliers that account for 70% of its purchases.

Hitachi is also bolstering its commitment to prioritize environmentally friendly facilities and equipment when making investment decisions. The group has doubled down on its internal carbon pricing initiative, a practice of putting a price on emissions by equipment, and raised the rate to 14,000 yen ($127) per ton from the previous 5,000 yen.

The price hike promotes a switch to more energy-efficient equipment. Hitachi seeks to have 13 net-zero business sites in March 2022, up from just three a year earlier.

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