Environment : Creation of Circular Economy Business

Creation of Circular Economy Business

In our drive to promote the efficient use of resources and to maximize customer value, we are working to create businesses based on a circular economy model. Our first business model is our "sharing service." The service consists of bicycle parking areas; three were created inside Tsunashima SST*1 and at Hiyoshi Station. On top of this, 30 IoT-linked electrically-assisted bicycles with power-saving smart lock have been made available to residents of the town, employees at commercial facilities, and the neighborhood in a trial project to study how to operate and manage an IoT-linked electrically-assisted bicycle service. During this trial period, we are gathering and analyzing data, including users' needs for bicycles, areas of movement, and travel distances, to create an optimum management system for this bicycle service. We also provided IoT-linked electrically-assisted bicycles in the shared bicycle station in TENKUU no MORIZONO MIYOSHI MIRAITO, a large, newly developed residential area in Miyoshi City, Aichi Prefecture, marketed by Toyota Housing Corporation of the Prime Life Technologies Group.*2 This was our first time to supply IoTlinked electrically-assisted bicycles and we plan to expand sales in the future.

IoT-linked electrically-assisted bicycles

Moreover, in January 2022, we started a two-year trial of an IoT-linked electrically-assisted bicycle sharing service for residents of apartments in Japan*3. Demand for electrically-assisted bicycles has recently increased due to their convenience and comfort for short-distance trips. However, owning an electrically-assisted bicycle is sometimes difficult for those living in an apartment with a small parking space or because use of the bicycle is infrequent. For this reason, we decided to conduct a field trial of a closed bicycle sharing service where the IoT-linked electrically-assisted bicycles are shared among residents of the same apartments, to assess the feasibility of the service and identify potential issues in service operations. In this trial, six households in "noiful base Komagome"*4, a rental property managed by our group company, share three IoT-linked electrically-assisted bicycles stationed in the apartment. Residents can reserve and unlock the bicycles using a dedicated application. The property manager monitors the usage of the IoT-linked electrically-assisted bicycles through a customized management software. When a bicycle's battery becomes low, the manager replaces it with a fully charged one stored in the charging locker. We are seeking to add value to properties that are further away from the nearest train station and also utilize the batteries in the charging locker for emergencies, such as a power blackout. Based on the results from this trial, we aim to develop a new and highly convenient transportation service.

Moreover, as a model for "products as a service," we have implemented a scheme to provide display cases with refrigerators/freezers, combined with a refurbishment service for those refrigerators and freezers: Instead of selling refrigeration equipment to supermarkets, convenience stores or other food retailers, the service offers "food refrigeration" as a value.
The refurbishment scheme focuses on inspecting and repairing display cases that have been used at retail chain stores for reuse at other retail stores. These services are expected to reduce maintenance and energy costs, and at the same time it will facilitate cheaper, low-budget store renovations by making business management more efficient.

As another model for providing cooling value, we have also started a rental service using the VIXELL® cool box to realize a safe and secure means of transportation for pharmaceuticals.*5 Pharmaceutical transportation sites require strict temperature control, tracking management, and work efficiency. In FY 2021, many employers conducted workplace vaccinations to help prevent the spread of COVID-19. As with pharmaceuticals, strict temperature control (e.g., 2-8°C) is required for the transportation and storage of vaccines. This makes it difficult to store vaccines in household refrigerators.*6 Therefore, while it is common for companies to buy refrigerators intended for storing pharmaceuticals to store vaccines for workplace vaccinations, purchasing refrigerators for the limited period of workplace vaccination programs and disposing of them away afterward is not appropriate when building a sustainable society. Therefore, our Group is working to ensure sustainable production patterns by renting out VIXELL units as temporary storage for vaccines. When they are no longer needed, we refurbish them and rent them out to other companies. This initiative also contributes to the sustainable consumption of refrigerants for customers, as refrigerators installed in workplace offices can be used to freeze refrigerants.

VIXELL and application for the test

Another IoT-based service that we offer is the Akari E Support*7 service, a lighting leasing service for corporate customers.

By paying a monthly fee, customers can enjoy the LED lighting of their choice, as well as additional services such as repairs, without owning the lighting. The monthly fee includes the long-term leasing fee for the LED lighting, repairs to maintain lighting performance, general insurance for movable properties, and energy-saving certificates, thereby reducing the costs for maintenance and energy.

Another example is the offer for an optional service for Panasonic laptop users called Battery Life Cycle NAVI.*8 The service is designed to prolong the life and increase the value of our products. Through this service, the full-charge battery capacity is automatically monitored and when the capacity deteriorates beyond a specific criterion, a notice is displayed on the laptop screen. The customer can then apply for a new battery, which is sent to them at no extra charge. This enables users to continue enjoying the extended operational hours of a new battery while maintaining their long-used and familiar PC.

We plan to improve our group's Air Conditioner Cleaning Service in Japan*9 in early November 2022 by newly setting up a website dedicated for cleaning orders and a cleaning notice service (free of charge) for models covered by the service. To date, the timing for cleaning air conditioners has been left to the discretion of customers. This new service helps customers know the appropriate timing to order cleaning. For conventional air conditioners subject to cleaning, the notice is submitted according to the number of years since purchase. For IoT-linked air conditioners, the number of years since purchase and operational hours etc. are used to determine the cleaning timing. The cleaning order (chargeable) website under development will improve customer convenience by offering easy access to our cleaning service. The technician disassembles the indoor unit into its components - the louver, fan, filter, etc. - and cleans each part by hand. Also, the heat exchanger is cleaned with high-pressure water. We provide the service so that customers can enjoy their air conditioners over many years.

Air Conditioner Cleaning Service

In addition, we are also promoting the following activities based on a circular economy concept. One example is building renovation: A building that we had used as a showroom and for other purposes for nearly 20 years was renovated through a joint effort with our partners. It has been transformed into a business and commercial complex named TENNOZ Rim*10 which includes a co-working space, studio, laboratory, lounge and cafe. We consider renovation projects enabling more effective use of existing structures with additional performance features to be better than activities related to new buildings, as a circular economy business.

Co-working space in TENNOZ Rim

We started a food subscription service demonstration*11 in the cafe in the TENNOZ Rim building. Customers can subscribe to a fixed-rate food service that includes a reusable cup made of resin with a high cellulose fiber content, and they can order one item of food or drink per day served in the reusable cup they bring to the cafe. This service contributes to the reduction of disposable plastic food containers. The project also helps attract people to the Tennozu area, which is recently promoting itself as a center of culture and arts, and contributes to building a circular economy by disseminating eco-conscious containers and reducing plastic waste. We are also promoting the Revalue Project to create new value from factory waste in the form of totally new products through creative design. To date, waste from manufacturing processes for clothes irons, rice cookers and kitchen systems has been used to produce bookends, lighting equipment, tables and other furniture items in creative collaboration with our business partners. The Revalue Project won the Good Design Award 2020 (Business motel category). We plan to develop further projects of that kind and create new value through broader co-creation.

Products created through the revalue project

As another subscription model, we have launched noiful, a subscription service for rental housing that provides high-quality and comfortable lifestyles through advanced home appliances and discerning spaces.*12 In the Japanese real estate market, housing stock numbers (existing housing) is on the rise due to the declining population and other factors. The deterioration of buildings and the increase in vacant houses and vacant apartments is a major social issue. On the other hand, consumer trends show that there is increasing lifestyle diversification. This include the widespread belief that it is better to rent necessary goods when needed rather than to own them. At the same time, the need for more functional living environments is also increasing due to the growing awareness of interior spaces as more time is spent at home. Noiful is a subscription service that provides advanced home appliances offering both functionality and design, customer support for home appliances, repairs and replacements when needed, and home appliance cleaning when moving. Through this service, we will provide property owners and management companies with stable property management by increasing the value of rental housing, and provide residents with an affluent lifestyle free of the need to own that allows them to easily start a comfortable life on the day they move in. Noiful is also committed to the reuse of its home appliances. Through this service, we will establish a new recycling program for home appliances and contribute to the realization of a sustainable lifestyle and society.

In addition, as another subscription model, we will launch a monthly flat rate cleaning platform service using RULO Biz, a small robot vacuum cleaner suitable for cleaning complex small spaces with many obstacles such as furniture.*13 RULO Biz communicates wirelessly with a dedicated server and cleans based on maps sent from the server. A single RULO Biz can be used to clean multiple maps, or multiple RULO Biz units can be operated at the same time. Flexible operations help meet customer needs. In addition, RULO Biz automatically starts cleaning at a specified time, and completes its task by recharging the battery as necessary. That leaves only throwing the garbage out after the cleaning is done, greatly reducing the work that must be done manually by people. In addition to the RULO Biz main unit and system usage fee, the monthly fee for this service includes regular annual inspections and maintenance, as well as the payment for a replacement unit in case of failure. Customers can therefore use it with peace of mind without hindrance to their cleaning schedule.

RULO

As a result of the application for the grant of the Subscription-Based Air Conditioner Promotion Model Project solicited by the Japanese Ministry of the Environment in January 2022, our project was successfully adopted*14. Death from heatstroke is a growing social concern, and 80% of those dying from heatstroke across Japan are the elderly aged 65 and above. In Tokyo's 23 wards, more than 80% of heatstroke deaths in 2021 were of the elderly aged 65 and above. Most of them were found dead indoors and some 90% of cases were not using an air conditioner. Among the cases not using an air conditioner, 20% did not actually have one installed. To prevent heatstroke, installing an air conditioner and promoting appropriate usage are important. However, the initial cost of installing an air conditioner can be an obstacle. To contribute to preventing cases of heatstroke, now a social issue, we are promoting our subscription-based business model targeted at households with elderly members and children. In this model, we are collaborating with local authorities (Kumagaya City, Saitama Prefecture, and Kanuma City, Tochigi Prefecture) and installers through our group's sales and support schemes and structures. We are also gathering statistical data that helps the Ministry of the Environment to establish heatstroke countermeasures, as well as to assess our business feasibility.

In addition, the use of paper packaging reduces environmental impacts and improves ease of use, promoting ethical consumption (consumption behavior that takes into account the resolution of environmental issues).*15 Specifically, we have been selling dry-cell EVOLTA NEO ethical packages LR6NJ/4H and LR03NJ/4H since October 2021. In recent years, the demand for environmentally friendly packaging has increased due to climate change as a result of global warming and the growing problem of plastic waste. According to a survey conducted by our Group, approximately 90% of consumers feel that there is unnecessary plastic waste and excessive packaging in their daily lives, and approximately 80% of consumers value environmentally conscious packaging when purchasing products. Paper packaging reduced our use of packaging materials by more than 50% when compared to conventional packaging. We have also reduced total CO2 emissions throughout the life cycle of packaging materials, from raw material procurement to manufacturing, use, and disposal, by more than 50%. In addition, eliminating shrink film (plastic film conventionally used to wrap batteries) reduces the time and effort required to open the packaging. The packaging can also be used as a storage bags for batteries that are not immediately used, and can be classified as paper (combustible materials) for disposal. Our Group supports environmentally conscious lifestyles with easy-to-use packaging that lessens the impacts on the environment by reducing the amount of packaging materials used and reduces the time and effort required from the time of opening to their disposal.

Moreover, Panasonic Group has been collaborating with Lawson, Inc. (hereinafter referred to as 'Lawson'), a partner company, on energy saving and reduction of CO2 emissions, and efficient utilization of resources. In July 2020, Lawson opened a prefabricated store that was built using a new assembling method in Nanjing, China. During the construction of the prefabricated store, construction wastes were drastically reduced through using the new prefabricated method and recycled materials. In addition, Lawson has been rolling out refurbishing services for old store equipment to each region in China including Chongqing, while reducing wastes of equipment. Furthermore, with newly introduced latest equipment for energy efficiency and less CO2 emission, and enabled visualization of electricity by a remote monitoring system and energy-efficient control, Lawson opened model environmental friendly stores in Shanghai in April 2021, and Dalian in July 2021. Besides, Lawson reduces impact on environment by reducing energy consumption while maintaining freshness of food through using a unique technology for its cold chain. Panasonic provided the solution for the cold chain that was highly evaluated in China International Import Expo (CIIE) held in 2021.

*1 A next-generation sustainable smart town that was built in Yokohama City, Kanagawa Prefecture, in March 2018. It is being managed by the Tsunashima SST Council organized by Panasonic and 10 other companies in various industrial fields to engage in innovative, eco-friendly activities and to create new services through collaboration among urban community developers, residents and local governments. (https://tsunashimasst.com/EN/)
*2 See https://news.panasonic.com/jp/press/data/2020/10/jn201014-3/jn201014-3.html
*3 See https://news.panasonic.com/jp/topics/204533.html
*4 The first property rented under the "noiful LIFE" property renovation and management service, operated by Living Appliances and Solutions Company. The service is designed to increase the property value and ensure stable renting operations by refurbishing existing properties in a tasteful style and with matching electrical appliances installed. Location: Nakazato 2-21-5, Kita City, Tokyo, Japan
*5 See https://www.panasonic.com/jp/business/vixell.html
*6 The required characteristics of the refrigerator compartment of a home-use refrigerator/freezer are 0°C or higher and 10°C or lower, including during the defrosting period. (JIS C9801)
*7 See https://www2.panasonic.biz/ls/lease/lighting-e-support/
*8 See https://panasonic.biz/cns/pc/letsnote/and_connect/battery.html
*9 See https://news.panasonic.com/jp/press/data/2021/09/jn210921-5/jn210921-5.html
*10 See https://www.tennoz-rim.tokyo/
*11 See https://news.panasonic.com/jp/press/data/2020/09/jn200910-1/jn200910-1.html
*12 See https://news.panasonic.com/jp/press/data/2022/01/jn220119-1/jn220119-1.html
*13 See https://news.panasonic.com/jp/press/data/2022/03/jn220322-2/jn220322-2.html
*14 See https://news.panasonic.com/jp/press/data/2022/03/jn220329-1/jn220329-1.html
*15 See https://news.panasonic.com/jp/press/data/2021/09/jn210906-1/jn210906-1.html