Environment : Collaboration Across the Supply Chain

Activities for Green Procurement since the publication of the "Green Procurement Standards" in 1999, the Panasonic Group has been promoting the manufacture of eco-conscious products in partnership with our suppliers. In the "Green Procurement Standards", we set up groups of suppliers who support the Panasonic Group's Environmental Policy in supplying products and goods in order to materialize the targets in supplier collaboration with our Group. In addition to cooperation in 'reducing environmental loads in supplier's business operation areas' and 'sharing achievements through collaboration with the Panasonic Group', we are asking our suppliers to 'seek the cooperation of upstream business partners' to expand the scope of activities of reducing environmental impact throughout the entire supply chain. In September 2019, we revised "the Green Procurement Standards" to deepen and widen their influence throughout the entire supply chain—beyond our Group and across society—following the Panasonic Group's environmental action plan.

We also published "Panasonic GREEN IMPACT" in fiscal 2022, regarding information about our contribution to CO₂ emissions reduction from Panasonic Group's business activities and from society in general, indicating our determination by setting our own targets to achieve both 'a better life' and 'a sustainable global environment' at the same time. We will expand this effort throughout the supply chain. In fiscal 2024, we submitted a letter to all of approximately 13,000 suppliers who have business with Panasonic Group across the globe to deepen understanding of our activities of 'Panasonic GREEN IMPACT'.

In response to more stringent and expanded regulations such as EU RoHS Directive, the Panasonic Group has been engaging in continual environmental quality assurance audits of our suppliers since 2005 to improve the management level throughout the entire supply chain. In fiscal 2024, we conducted the audits at some 1,000 suppliers and have supported their efforts to upgrade their management levels for chemical substances in products.

In order to assess greenhouse gas (GHG) emissions across the entire supply chain (scope 3^*1), the Panasonic Group made original calculations based on the Greenhouse Gas Protocol, the international accounting standard for GHG emissions. Since fiscal 2012, the Panasonic Group has estimated its overall GHG emissions in the upstream range by multiplying the volume of materials purchased with the resource-specific GHG emissions per basic unit based on the Input-Output Table published by the Japanese government. The estimation results based on fiscal 2022 data is 21.96 Mt, roughly 14 times the GHG emissions of our Panasonic Group's own production activities.

*1 Other indirect emissions, excluding Scope 1 (direct emissions from facilities owned and controlled by the Panasonic Group) and Scope 2 (emissions from production of energy consumed at facilities owned and controlled by the Panasonic Group).

To reduce CO₂ emissions with our suppliers, Panasonic Group is actively procuring low-carbon materials for aluminum ingots, and irons/steels, such as aluminum ingots refined using hydroelectricity, and recycled irons. In fiscal 2024, we managed to reduce approximately 58,000 tons of CO₂ emissions.

In addition, the procurement of materials by the Group is not limited to materials for the Group's business divisions, as materials are also sold to joint ventures in which Panasonic Holdings has a partial stake. By simultaneously also procuring low-carbon materials for the joint ventures, the Group aims to enhance its purchasing power for low-carbon materials by taking advantage of economies of scale. Although it cannot be directly counted in the Scope 3 emissions for the Group, in fiscal 2023, the reduction in CO₂ emissions for the joint ventures amounted to approximately 41,000 tons. We will continue to expand cooperation with the joint ventures in order to improve our ability to stably procure low-carbon materials and to further reduce CO₂ emissions.

Our group have managed to stably procure and supply raw materials of aluminum products to be used for air conditioners, showcases, etc., utilizing a centralized purchasing system. From fiscal 2022, we have been procuring aluminum ingots refined using hydroelectricity through the centralized purchasing system and supplying it to aluminum processing manufacturers, which is an example for achieving CO₂ emissions reduction, while maintaining a stable procurement price. This is the first initiative in Japan's electrical manufacturing industry.

More specifically, we import aluminum produced at overseas aluminum refineries using hydroelectricity, to Japan. Then, we supply the imported aluminum to multiple aluminum rolling/ extrusion manufacturers in Japan to process them to aluminum plates, etc. Finally, our group procures the processed aluminum products from the manufactures to utilize them in our products.

CO₂ emissions of the aluminum ingots refined using hydroelectricity is reduced to one third of the CO₂ emissions compared to those refined using conventional thermal power. Various aluminum products processed from the aluminum ingots become one of our various products in different forms such as air conditioners fin materials, aluminum frames for housing facilities, and lithiumion battery casings. Since fiscal 2022, we have maintained a consistent supply of more than 8,000 tons of aluminum refined using hydroelectricity in Japan, thereby reduction of CO₂ emissions by 57,000 tons per year has been achieved. Procurement of such aluminum ingots under our metal supply scheme utilizing a group-wide centralized purchasing system also stabilizes the price of aluminum ingots in the market.
In addition, the Group also procures and supplies aluminum metal derived from hydroelectric power generation to Prime Planet Energy & Solutions Inc., a joint venture in which Panasonic Holdings has a partial stake. By also conducting procurement for this company, which manufactures lithium-ion batteries for EVs, the increased volume increases our purchasing power and it is possible to achieve more stable procurement. Separate to the materials for the Group's business, this scheme reduces the CO₂ emissions for Prime Plant Energy & Solutions by approximately 39,000 tons per year.
We will continue to expand this scheme to work for procurement stability and price stability for low-carbon materials from the perspective of the entire Group, including joint ventures.

Since fiscal 2010, Panasonic Group has been working together with our suppliers in ECO-VC Activity^*2 for procurement, aiming to reduce GHG emissions and achieve Recycling-oriented Manufacturing while also streamlining costs. This activity was expanded to China and other regions in Asia where full-fledged operation started in fiscal 2013, and further extended to a global scale in fiscal 2015. On its 15th anniversary in 2024, we renamed the ECO-VC Activity as 'ECOVC' to reposition it as an activity for value creation with our suppliers.

We have stored case examples of ECOVC in a database for broader and effective use throughout the Panasonic Group. At the same time, as for outstanding activities, we provide awards in occasions such as 'ECOVC awards and information exchange meeting'. Furthermore, the Panasonic Group formulated "an Environment Vision 2050" in 2017 to achieve 'a better life' and 'a sustainable global environment' compatibly, aiming for societies where residents use clean energy and live a more comfortable lifestyle. Under the vision, through the development of products, technologies, and solutions relevant to energy creation, storage, saving, and management, the Panasonic Group has worked towards creation and more efficient utilization of energy which exceeds the amount of energy used.

We added renewable energy to conventional evaluation items such as energy conservation (CO₂ emission reduction), cost reduction, resources conservation and use of recycled materials in fiscal 2019. In addition, since fiscal 2024, we have promoted decarbonization and reduction of CO₂ emissions in conjunction with the Panasonic Green Impact, collaborating with our suppliers.

We will continue this ECOVC with our suppliers aiming to achieve CO₂ emissions reduction of 110 million tons from OWN IMPACT by 2050, as described in the "Panasonic GREEN IMPACT".

*2 ECO-VC Activity: Value Creation Activities