Environment : Collaboration Across the Supply Chain

Collaboration with Suppliers and Transportation Partners

As the Panasonic Group backed by a number of suppliers, we must consider the environmental impacts of our entire supply chain, and not just of our own operations. Through our coordination efforts with suppliers and transportation partners, who form an integral part of our business operations, the Panasonic Group strives to minimize our environmental impact across the entire supply chain, focusing on the reduction of CO2 emissions, resource recycling, chemical substance management, and biodiversity conservation.

Activities for Green Procurement

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.

Estimation and Reduction of Environmental Impacts in Business Activities by Suppliers

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.

Scheme to Procure and Supply Aluminum Ingots Produced using Hydroelectricity.

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.

Sharing Achievements through Collaboration with the Panasonic Group

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

Environmental Achievements Made through Proposals

Items FY2020 FY2021 FY2022 FY2023 FY2024
Number of proposals 772 430 332 264 236
CO2 reductions derived from proposals 280 kt 110 kt 50 kt 80 kt 927 kt
Use of recycled resources derived from proposals 100 t 5 t 1,500 t 600 t 37,000 t
Reduction in resources used derived from proposals 19.9 kt 323 kt 255 kt 40 kt 19 kt

Collaboration with Environmental NGOs

Following the announcement of the "Panasonic GREEN IMPACT", we further enhanced collaborative work with environmental NGOs overseas and deepened our CSR efforts in the supply chain.

Particularly in China, where the number of suppliers of our group is large and there are strong demands in the society for suppliers to properly respond to environmental matters, we are continually working together with the suppliers to reduce environmental loads by from requesting corrective actions as items require improvement for the issues found in the audit, and confirming whether the items are improved, aiming at further pursuing responsible procurement activities.
Through confirming these CSR and environment items on sites, we will continue to comply with new regulations, social norms, and corporate ethics, and conduct procurement activities that fulfill our social responsibilities such as for human rights, labor, safety and health, and global environmental conservation.

Main activities to date

2016

Started collaboration with a Chinese NGO.
Held Panasonic Group briefings on our CSR Procurement Policy and China's environmental regulations for approximately 400 suppliers in Guangzhou, Dalian, and Shanghai, in the same year.

2018

Conducted on-site environmental audits that focused on suppliers responsiveness to environmental issues, together with CSR audits for approximately 20 suppliers per year.

2020

Continually implemented on-site and online audits for more than 20 suppliers per year.

2023

Reinforced the on-site audits at suppliers sites through the Group-wide Supply Chain Compliance Project.

In addition, we are continually improving suppliers CSR and environmental issues, collaborating with an environmental NGO in China, the Institute of Public & Environmental Affairs (IPE), through periodically sharing information on the latest laws and regulations in working group meetings, as well as requesting the suppliers with records of non-compliance for improvement every month.

In the Suppliers Green Supply Chain Evaluation ranking (CITI*3 and CATI*4) that has been published by IPE since fiscal 2015, the Panasonic Group has consistently listed in the top rank each year. Panasonic has been ranked as the second best in the CITI and as the top in the CATI for the household appliances industry (total 37 brands) in fiscal 2024.

*3 CITI : The Green Supply Chain Corporate Information Transparency Index
*4 CATI : The Corporate Climate Action Transparency Index