Environment : Mid-term to Long-term Environmental Vision

What we should be in the future as the Panasonic Group and solution for global environmental issues

The true mission of the Panasonic Group is to achieve both of 'material and spiritual prosperity', in other words 'an ideal society with affluence both in matter and mind' that is pursued by our founder Konosuke Matsushita in his entire life. In 1932, the founder declared his ambition to create an ideal society over a span of 250 years. Since then, taking over the founder's ambition, we have solved social issues by manufacturing useful products and providing useful services, etc., while seeking for happiness of individual customers. At present, the biggest obstacles preventing us from achieving our mission are global environment issues. In order to reduce depletion of limited natural resources and urgent problems caused by climate change or global warming as much as possible, it is indispensable to take actions to achieve net zero CO2 total emissions in society at large as early as possible.
Panasonic has acted promptly to fulfill our corporate responsibility and contribution; and in January 2022, we announced the Group's long-term environmental vision "Panasonic GREEN IMPACT (PGI)" that leads to achieve much greater contribution to definitely solve such problems and we have accelerated our activities to reduce environmental loads through our value chains, and at the same time, to contribute to reduce CO2 emissions discharged from society and customers.

Regarding global environment issues, not only for global warming, but also for the depletion of limited natural resources, importance of confronting with their effects on our business activities, our customers, and society in the same manner is growing. Panasonic has worked on both effective use of resources and maximization of customer value for a long time. In order to recognize that improving resource efficiency contributes to decarbonization, reduce resource consumption, and set contribution to achieve sustainable society as basis of business operations, we established 'a Circular Economy (CE) Group Policy' and disseminated it internally and externally in November 2023. We will identify CE issues according to characteristics of each business division, and lead them to formulate and implement strategies and action plans based on the policy.

Circular Economy Group Policy (Excerpts from three circularity principles)

  1. Maximize the product lifetime and maintain the material value with a focus on circular business models and product design, extended servicing, as well as through further enhancing recycling activities.
  2. Minimize the use of materials and extend the usage of recycled and renewable materials.
  3. Take a joint approach with customers and partners for establishing circularity-oriented business operations, information sharing, and product usage options.

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Circular Economy Group Policy

The Panasonic GREEN IMPACT is the long-term vision of the Panasonic Group, reflecting our sincere determination to address global environmental issues and contribute to solving them through the impact of our business actions.
Acknowledging the contribution of resource efficiency to decarbonization as well as a necessity for decreasing resource consumption due to the earth's limited natural resources, we establish this Panasonic Group-wide Circular Economy Policy as a contribution to achieving a sustainable society.

Circular Economy describes an economic system aiming for the most efficient use of material resources along the product lifecycle. Within the frame of this policy, Panasonic Group Companies define their dedicated approaches, targets, and individual action plans based on the following circularity principles:

  1. Maximize the product lifetime and maintain the material value with a focus on circular business models and product design, extended servicing, as well as through further enhancing recycling activities.
  2. Minimize the use of materials and extend the usage of recycled and renewable materials.
  3. Take a joint approach with customers and partners for establishing circularity-oriented business operations, information sharing, and product usage options.

By establishing this circular economy policy, we will promote the transition of our business from linear to circular as part of our green transformation (GX) activities inside and outside Panasonic.

Panasonic GREEN IMPACT

PGI is an overview of environmental strategy for our respective business fields back casted from the reforms to be implemented by 2030, looking ahead to creation of sustainable society by 2050. With a classification of PGI into fulfillment of own responsibilities (❶ OWN IMPACT), opportunities to contribute (❷ CONTRIBUTION IMPACT and ❸ FUTURE IMPACT), and positive ripple effects on our customers and society (+INFLUENCE), it was declared to create an impact by 2050 from our emissions reductions of more than 300 million tons*1 in total for ❶, ❷ and ❸: that is approx. 1% of the global CO2 emissions of 31.7 billion tons*2 in 2020. We aim at 'to achieve net zero emissions for all of our operating companies (Scope 1 and 2 in ❶)' and 'to create avoided CO2 emissions of approx. 100 million tons (❷) as our interim milestones, and we formulated "the GREEN IMPACT PLAN 2024", our action plan for 2022-2024.

*1 2020 energy-derived CO2 emissions (Source: IEA)
*2 The emissions factor is fixed to the 2020 emissions level in order to properly measure the amount of own efforts to CO2 reduction.

Panasonic GREEN IMPACT To realize 'a better life' and 'a more sustainable global environment', the Panasonic Group will strive to achieve carbon neutrality together with society, by increasing impacts from various actions that will contribute to reduce CO? emissions of our own and of various fields of society.

The Panasonic Group aims to achieve both a better life and a sustainable global environment, by creating impacts from actions that reduce our own CO2 emissions, contribute to avoiding CO2 emissions of society, and realize a circular economy.

❶ OWN IMPACT
We will achieve net zero emissions from all of our value chains (110 million tons*3), with decarbonization effects in society*4. Specifically, we will achieve net zero for total emissions from our business activities (Scopes 1, 2, and 3), including emissions from our operating companies (Scopes 1 and 2) by fiscal 2031, emissions from manufacturing components and materials (Scope 3, Category ), and emissions in product use (Scope 3, Category 11).

*3 Fiscal 2021 actual results
*4 Improvement in CO2 emissions factor for electricity by respective electric power suppliers.

❷ CONTRIBUTION IMPACT
In our present business fields, we will contribute 100 million tons or more in avoided emissions from society and our customers. We will visualize the avoided emissions by each product or service, and use the avoided emissions as a common measure in society at large.

❸ FUTURE IMPACT
We plan to achieve avoided emissions of 100 million tons or more by creating new technologies and business fields.

+ INFLUENCE
These are communication activities to generate PGI. We will have positive ripple effects on reforms in the energy demands and supply, and decarbonization through transformation in behaviors of customers, relevant business operators, governments, and investors. Although the direct impact on reduction cannot be calculated at present, we will move forward in this direction, being convinced that this is part of our mission.

Circular Economy Group Policy

The Panasonic GREEN IMPACT is the long-term vision of the Panasonic Group, reflecting our sincere determination to address global environmental issues and contribute to solving them through the impact of our business actions.
Acknowledging the contribution of resource efficiency to decarbonization as well as a necessity for decreasing resource consumption due to the earth's limited natural resources, we establish this Panasonic Group-wide Circular Economy Policy as a contribution to achieving a sustainable society.

Circular Economy describes an economic system aiming for the most efficient use of material resources along the product lifecycle. Within the frame of this policy, Panasonic Group Companies define their dedicated approaches, targets, and individual action plans based on the following circularity principles:

  1. Maximize the product lifetime and maintain the material value with a focus on circular business models and product design, extended servicing, as well as through further enhancing recycling activities.
  2. Minimize the use of materials and extend the usage of recycled and renewable materials.
  3. Take a joint approach with customers and partners for establishing circularity-oriented business operations, information sharing, and product usage options.

By establishing this circular economy policy, we will promote the transition of our business from linear to circular as part of our green transformation (GX) activities inside and outside Panasonic.

Environmental Action Plan "GREEN IMPACT PLAN 2024"

As milestones in reaching the 2050 reduction targets of 300 million tons set in "the Panasonic GREEN IMPACT," our long-term environmental vision, we set out the fiscal 2031 target linked to our groupwide business strategy, and formulated "the GREEN IMPACT PLAN 2024 (GIP 2024)," the three-year environmental action plan from fiscal 2023 to fiscal 2025, for which we are working on.
Under GIP 2024, we have set out the fiscal 2025 targets for OWN IMPACT: CO2 emissions reduction across our entire value chain (VC) (Scopes 1, 2 and 3), CONTRIBUTION IMPACT: Avoided CO2 Emissions for customers and society and the Resource/Circular Economy (CE).
In OWN IMPACT, we plan to cut down CO2 emissions from our entire VC of 110 million tons in fiscal 2021 to 31.45 million tons in fiscal 2031 and to 16.34 million tons in fiscal 2025 respectively as our businesses grow. As a part of this plan, we are aiming to achieve net zero CO2 emissions in our factories ('Zero- CO2 factories') for all of our operating companies by fiscal 2031 under the drive to achieve net zero emissions from our business activities (Scopes 1 and 2).
In CONTRIBUTION IMPACT, we plan to achieve avoided emissions for customers and society of 93 million tons*5 in fiscal 2031 and to 38.3 million tons in fiscal 2025*5.

Key 3 activities for our Resources/CE are;

  1.  Maintain the global factory waste recycling rate constantly at 99% or higher (zero emissions)
  2.  Increase the total recycled resin used over three years to 90,000 tons
    (Double the total recycled resin usage of 43,300 tons over fiscal 2020 to 2022)
  3.  Newly establish at least 13 CE business models by fiscal 2025, aiming at efficient resource utilization and customer value maximization

Additionally, we plan to continue working on the issues of 'biodiversity', 'water', 'chemical substances', 'local communities', and 'compliance', paying attention to the scale of social issues and empathy with our customers and society and corresponding to our business fields and regional characteristics and needs.

*5 Calculated with emissions factor (IEA 2021) at the time of the PGI formulation (FY2021).)

Status of the second year of GIP 2024

The CO2 emissions from our entire value chain (VC) increased to 126.52 million tons in fiscal 2024 (negative in OWN IMPACT) with increase of 19.01 million tons from 107.51 million tons in fiscal 2021. For the Scopes 1 and 2, there had been progress in both energy conservation and introduction of renewable energy with 44 Zero- CO2 factories and CO2 reduction of 0.68 million tons. Scope 3 emissions, which come from during use of our products, account for 70% of all of our own emissions, and have increased due to expansion of business fields subject to the calculation (increased by 5.1 million tons compared with fiscal 2021). On the other hand, the avoided emissions for our customers and society (CONTRIBUTION IMPACT) have reached 36.97 million tons, which is an increase over fiscal 2021, thanks to the growth of our core businesses and further visualization of the avoided emissions in our businesses.
In the area of resource/CE, our factory waste recycling rate reached 99.3% globally, maintaining our target figure. The amount of used recycled resin has remained at 29.6 thousand tons in total over two years since fiscal 2023. We are now working hard to make up the lost opportunities by strengthening our competitiveness, e.g., enhancing and stabilizing our supply chain from waste resin recovery, to reprocessing and reuse. Finally, we launched three new CE business models. This makes a total of 13 business models, which enabled us to achieve the fiscal 2025 target one year ahead of schedule.

GREEN IMPACT PLAN 2024 (Fiscal 2025 and 2031 targets, and Fiscal 2024 actual results)

GREEN IMPACT PLAN 2024 (Fiscal 2025 and 2031 targets, and Fiscal 2024 actual results)

*6 Classification according to the GHG protocol (Accounting and Reporting Principles).
*7 Amount obtained by subtracting the amount of emissions in the relevant fiscal year from the amount of emissions in fiscal 2021.
*8 Amount calculated by subtracting the lifetime CO2 emissions after introduction from the lifetime CO2 emissions assuming that the Group's products and services do not exist, using the IEC 2021 value as the emission factor.
*9 Amount of resources recycled/(Amount of resources recycled + Amount of landfill).
*10 Mass of recycled materials contained in the recycled resin used in our products.
*11 Includes Scope 1, 2 and Scope 3 Category 11, plus increases or decreases in Category 1 (procurement), Category 12 (disposal), and other indirect emissions. The figures in the parenthesis is a comparison between fiscal 2023 results and fiscal 2021 results (starting point) reflecting the equivalent amount of emissions from the products whose calculations became available after 2021.
*12 The CO2 emissions factor for electricity calculated with the IEA World Energy Outlook's 2° C scenario.

Status of CO2-related indicators in fiscal 2024

CO2 emissions (upper part of figure)
Our CO2 emissions in fiscal 2024 totaled 126.52 million tons, which was an increase of 19.01 million tons compared with 107.51 million tons in fiscal 2021 (negative in OWN IMPACT) This was significantly affected by our activities implemented as our responsibilities in the last 3 years, i.e., expansion of the items subject to our emissions reduction and refinement of the calculation formulas. On the other hand, the fiscal 2021 figure using the items subject to fiscal 2024 was 138.6 million tons. Therefore, this represents a reduction of 12.08 million ton over the three years since fiscal 2021.
The CO2 emissions from during use of products (Scope 3, Category 11), which accounts for more than 70% of the entire emissions across the value chain, have increased to 91.03 million tons from 56 businesses in fiscal 2024, compared with 85.93 million tons from 33 businesses in fiscal 2021. This fiscal 2024 figure includes emissions from those businesses for which the emission calculation formulas were established in fiscal 2022 and later, and CFC emissions from refrigerant-related equipment during use by customers from fiscal 2023. We aim to reduce CFC emissions during use by spreading refrigerants with low environmental loads (CO2 refrigerant/propane). In fiscal 2023 we also added the calculation methods to reflect negative impact from disposal of refrigerants after refining the calculation methods with an aim to collect more refrigerants from refrigerant-related equipment disposed by customers (Scope 3, Category 12). We will recognize the reduction targets in Scope 3 accurately as our Group's responsibilities, and we will continue to improve the accuracy of Scope 3 figures through reviewing the scope and the calculation methods.

Avoided CO2 emissions (lower part of figure)
The avoided CO2 emissions from our products and services (CONTRIBUTION IMPACT) in fiscal 2024 reached 36.97 million tons, steadily approaching the fiscal 2025 target of 38.3 million tons. The number of businesses subject to this calculation has increased from 28 in fiscal 2021 to 56 in fiscal 2024. The total avoided emissions of 26 businesses, which we have been working on visualization (28 as of fiscal 2021), was 27 million tons in fiscal 2024. This was a 3.53-million-ton increase compared with 23.47 million tons in fiscal 2021. The main reason for this was the decrease in the avoided emissions from cylindrical lithium-ion batteries for in-vehicle use, which produce the biggest amount of avoided emissions in our Group, as a result of the refinement of the emission calculation methods from the viewpoint of their life cycle. (If the calculation method for cylindrical lithiumion batteries for vehicles had not been refined, the figure would have been 28.70 million tons, an increase of 5.23-million-tons.) On the other hand, visualization has newly progressed in the 30 new businesses and produced 9.97 million tons of avoided emissions in fiscal 2024.
Panasonic GREEN IMPACT is our vision to aim at carbon neutrality together with customers and society by accumulating diligent efforts (ACT), taking our Group's responsibilities and opportunities seriously to prevent climate change as early as possible. We believe that reducing the 'emissions' and increasing the 'avoided emissions' should be accelerated at the same time, after we understand accurately and rationally that the 'emissions' and the 'avoided emissions' respectively have different concepts and utilization purposes, and our Group responsibilities (emissions) are not offset by contributions to our customers and society (avoided emissions), in other words, these two measurements are 2 sides of the same coins, i.e., inextricably linked.
The avoided emissions in particular still have a lot of issues to be addressed to become a measurement used commonly in society, as the flexibility in its calculation methods is high. Once calculation methods become standardized and turn out to be different from our methods, we will review our calculation methods, and updating our targets and numbers of the results using the standardized calculation methods, while regardless of updating calculation methods, we will contribute to the achievement of carbon neutrality of society by enhancing our competitiveness to reach the goals of each business. We will continue to report contents of changes and their progress in avoided emissions as proof of our accelerating efforts in both business transformation and growth.

GREEN IMPACT PLAN2024 (GIP2024): Status of CO2-related indicators in fiscal 2024

Avoided CO2 Emissions

CONTRIBUTION/FUTURE IMPACT is commonly referred to as the avoided CO2 emissions (hereafter, avoided emissions). Avoided emissions are an indicator of the value of the amount of assumed CO2 emissions reduction made of customers and society through introducing our products and services, compared to the amount when not introduced (Reference Scenario, also called as the Baseline Scenario). Both 'emissions' and 'avoided emissions' are CO2-related indicators; however, 'emissions' are a measurement of the CO2 amount that should be reduced across our value chain (VC), while 'avoided emissions' measures the amount of contribution to decarbonization by our customers and society through our businesses. Thus, the methods of calculation and usage for these two indicators differ. Also, 'avoided emissions' cannot be used to offset the 'emissions' from VC of own company.

Formulation of international standards for the calculation methods for the avoided emissions are still in progress. We are actively involved in discussions*14 aiming at establishing international standards, while developing, disclosing, and improving rational calculation methods based on the guidance and policy, and IEC discussions. In case that the standardized calculation methods will become different from our methods, we will of course comply with the adopted standards and work to achieve the targets after correction of our targets in accordance with such new standards. In addition, both our calculation methods and the evidence data stated in this data book have been verified by a third-party organization, in order to enhance the objectivity of the disclosed information.

Definition of the Avoided Emissions*13

The avoided emissions are defined as positive impact on society by a solution in terms of CO2 emissions reduction when comparing to those in the reference scenario where the solution is not used.

*13 We edited the definition based on the Guidance on Avoided Emissions by WBCSD (March 2023).

The total CONTRIBUTION IMPACT of our products and services sold in fiscal 2024 was 36.97 million tons across our 56 businesses. This value was equivalent to the last year's figure in total as a result of the reduction amount caused by refinement that had made to the calculations related to cylindrical lithium-ion batteries for in-vehicle use, despite the increase from the seven products and services newly quantified. Panasonic classifies CO2 emissions reduction effects into four categories depending upon the type of contribution:

Electrification: Spreading electrified appliances and components that use energy more efficiently than those that use fossil fuels.
Replacements: Spreading products with improved energy efficiency while providing the same efficacy as conventional products.
Solutions: Optimizing power consumption throughout entire building spaces and facilities.
Others: Various contributions other than the above, including clean power generation, heat insulation, and reducing delivery.

Our current focus is on the Lifestyle business (including heat pump equipment, lighting equipment, refrigerators, and photovoltaic power generation systems) and the Energy business (including cylindrical lithium-ion batteries for in-vehicle use), which together comprise approximately 50% of Group sales. Although electricity demands increase as electrified appliances spread, by continuously increasing the efficiency of energy use in appliances themselves and the spaces they are connected to, we will reduce the load on grid power and promote renewable energy in each region.

*14 Such as the guidance and policies related to the avoided emissions published by WBCSD and the GX League in March 2023, and discussions in the IEC. (For more details, see Recognition of Avoided CO2 Emissions and Activities to Develop Value, Standardization).

For further examples of our avoided emissions products that contribute to CO2 reduction for customers and society, see the following website.

To achieve the decarbonization of society, efforts by both energy power suppliers and users are indispensable. Assuming that use of renewable energy will increase through the efforts by energy power suppliers, we will improve energy efficiency in each of our various products and services, while contributing to energy use optimization in socioeconomic systems, such as in mobility, whole spaces of buildings, etc., and supply chain processes. We continue to calculate and disclose avoided emissions with rational methods as a proof of accelerating both the reforms and growth of our businesses to contribute to decarbonization.

The avoided emissions can be an indicator to identify companies and solutions that contribute to CO2 emissions reduction by visualizing emissions across their VCs. Utilizing the avoided emissions as a part of business evaluation and adding the avoided emissions as deciding factor for investment should stimulate competition among businesses that can potentially contribute to decarbonization. We expect this will help build robust and efficient carbon-neutral VCs.

CONTRIBUTION IMPACT

CONTRIBUTION IMPACT

*15 Air to Water
*16 Building Energy Management System
*17 Home Energy Management System

Electrification Hot-Water and Heating Systems with Heat Pump (EcoCute, A2W*18)

*18 A2W (Air to Water) : Air-to-water Heat Pumps bound for Europe

Product life stages subject to avoided CO2 emissions

Raw materials Manufacturing Transportation Use Disposal/Recycle

Sales regions: Japan for EcoCute, and Europe for A2W

Overview
A heat pump is equipped with electrification technology that captures heat energy from the ambient air and transfers it to heat water or air utilizing the characteristic that temperature changes when gas is compressed or expanded. With the technology, the equipment with heat pump is 2.4 to 4.3 times more energy-efficient compared to the equipment uses heat energy from fossil fuel combustion.*19 Furthermore, on the premise that the ratio of renewable energy use in each energy sources will increase year by year as the electrified equipment with heat pump is spread, whereas CO2 is always emitted from gas equipment in combustion of city gas, we will contribute to accelerate the transition to a decarbonized society.

*19 Our own calculation based on information in METI's 'Top Runner Program'.

Avoided CO2 emissions mechanism
Compared to the average hot-water and heating systems with gas combustion type that are water heaters widely available in markets, our heating equipment with heat pump with equivalent capacity emit less CO2 from the electricity used throughout their lifetimes, therefore, the difference of CO2 emissions becomes avoided emissions.

Average CO2 emissions from water & air heating energy by one gas heating equipment and one heating equipment with heat pump.

Calculation formula of avoided emissions

Amount of activities Avoided emissions for a given amount of activities CO2 emissions-related values and factors Period
[Amount of activities] (Units) The number of units that replaced existing gas heating equipment in the total annual sales volume*3 | *3Japan: Approximately 70% of sales are heating equipment with heat pump replacing gas heating equipment. (Source: Industrial association data). Europe: 100% of sales are heating equipment with heat pump replacing gas water heaters. (We deemed that the replacement of existing A2Ws can be ignored as the sales started in 2008.) |  * (Annual city gas consumption per gas heating equipment (m3) *gas CO2 emission factor (kg CO2 /m3) - Annual power consumption per unit of the heating equipment with heat pump (kWh) * Electric power CO2 emission factor per sales region (kg CO2 /kWh)) * Period | Annual avoided emissions by one heating equipment with heat pump replacing a gas heating equipment. | /Electric power CO2 emission factor: Japan - 0.487 kg/kWh, and Europe - 0.277 kg/kWh (Source: IEA 2021)/City gas CO2 emission factor: 2.240 kg/m3 (Source: Document by Ministry of the Environment)

Baseline (Subject to comparison)
CO2 emissions from gas combustion to capture heat energy required for heating the same amount of water or air. Conventional gas by gas combustion is predominantly used in Europe where there are many cold climate areas. (Transformation of an A2W to its electrification is possible by using gas pipe used for the existing gas heating equipment.)

Coverage of quantification (Way of thinking and its rationalization)
When the heating equipment with heat pump is in use. We deemed that CFP* of the equipment when it is in use can be ignored because both of a heating equipment with heat pump and a gas heating equipment show a relatively greater CFP when they are use.*21

*21 79.9% for 'in use' of CO2 emissions in the value chain (VC) of the Panasonic heating equipment with heat pump. (FY2020 Panasonic actual result)

*CFP (Carbon Footprint of Products): CO2 emissions converted from GHG emissions throughout the entire product life cycle—from raw material procurement to disposal and recycling of a product and service (per one unit).

Amount of activities (Unit)

EcoCute: The number calculated by the following equation: the annual sales volume in Japan x 70%*22 which is the replacement ratio of gas heating equipment with heating equipment with heat pump.
*22 Data from a Japanese industrial association. The calculation excludes the number of replacements of an endof-life EcoCute with a new unit.

A2W: The number of annual sales of A2W in Europe (Unit)*23
*23 We deemed that replacement ratio of old A2Ws with new ones can be ignored as the sales started in 2008.

Avoided CO2 emissions per unit of amount of activities (Basic unit)
Regarding the annual energy consumption used for the same amount for heating water or air, which was converted to CO2 emissions, difference between those of heating equipment with heat pump and gas heating equipment.

Period (Flow method: Include entire lifetime CO2 emissions of the product in its first sales year)

  • The holding years of repair parts
  • CO2 emissions reduction effect continues during that period.

Electrification Cylindrical Lithium-ion Batteries for In-vehicle Use

Product life stages subject to avoided CO2 emissions

*The calculation formula has been revised from a life cycle perspective since disclosure Sustainability Data Book 2023.

Raw materials Manufacturing Transportation Use Disposal/Recycle

Sales regions: North America

Overview
Transition from internal combustion engine vehicles (ICEVs) to electric vehicles (EVs) is expected to hasten decarbonization in transportation sectors all over the world as EVs, in addition to their energy efficiency advantages*24, emit only small amounts of direct CO2. In particular, Battery Electric Vehicles (BEVs) that do not use an internal combustion engine, employ a motor driven by electricity supplied from a rechargeable battery.
Thus the rechargeable batteries that are equivalent to the fuel supply function in an ICEV, are recognized as one of the most important components of the BEV.

*24 Energy efficiency: The percentage of consumed energy that reaches to the wheels;
BEV: 87–91% ICEV: 16–25%.
Source: Yale Climate Connections. August,2022 "Electrifying transportation reduces emissions and saves massive amounts of energy"

Avoided CO2 emissions mechanism
In the case that a BEV and an ICEV with our rechargeable batteries installed drives the same distance, a difference arises between the amount of CO2 emissions converted from fuel consumed by the ICEV and the amount of electricity charged and discharged in the BEV because BEV's energy conversion efficiency to electricity is high.

CO2 emissions throughout the entire product life cycle of an ICEV and a BEV in the U.S.

Refer to CCT (The international council on clean transportation)
Global-Vehicle-LCA-White-Paper-A4-revised-v2.pdf (theicct.org)

Calculation formula of avoided emissions

Amount of activities Avoided emissions for a given amount of activities CO2 emissions-related values and factors Period
[Amount of activities] (Units) The CO2 emissions converted from the number of EVs of the battery capacity sold per year * (CO2 emissions per 1km by an ICEV - CO2 emissions per 1 km by an EV) * Lifetime mileage | Annual avoided emissions by one EV replacing an ICEV *Average annual mileage respectively in Japan, U.S. and Europe x 10 years

Baseline (Subject to comparison)
CO2 emissions for an ICEV throughout the entire product life cycle including gasoline usage

Coverage of quantification (Way of thinking and its rationalization)

The difference in total CO2 emissions for BEVs and ICEVs compared in emissions at each stage for rechargeable batteries or gasoline from mining raw materials, disposal, recycling and emissions during driving respectively.

Amount of activities (unit)
CO2 emissions converted from the number of sold cylindrical lithium-ion batteries for in-vehicle use per year to the number of BEVs.

Avoided CO2 emissions per unit of amount of activities (Basic unit)
Difference in total CO2 emissions per travel distance throughout the entire life cycle for one BEV replacing an ICEV.

Period (Flow method: Include entire lifetime CO2 emissions of the product in its first sales year in one time.)
Lifetime travel distance
= Average annual travel distance respectively in Japan, U.S. and Europe x Vehicle life (10 years)

Avoided CO2 emissions in fiscal 2024: 12.03 million tons

Replacements (Energy Saving) Energy-saving Effects from replaced Home Appliances

Product life stages subject to avoided CO2 emissions

Raw materials Manufacturing Transportation Use Disposal/Recycle

Sales regions: Japan, China, North America, Central and South America, Europe, Southeast Asia, Middle east, etc.

Overview
Improving efficiency of energy consumed by a large number of home appliances now widely used throughout society will reduce the load of local grid power for the use of appliances, lower the hurdle to transform to use renewable energy as their energy source. This facilitates transition to decarbonization society from demand sides. One of the characteristics of home appliances with high durability is that their dominant stage of CO2 emissions (CFP*) in the life cycle is from energy use through the whole period in which product are used by customers and in society. This accounts for 80 to 90% of large home appliances such as lighting and refrigerators. Replacing the product used enough of the life with a new product that has equivalent function and performance in use together with improved energy efficiency will cause effect of reducing CO2 emissions both from users and power suppliers.

Avoided CO2 emissions mechanism
Regarding electric products whose guaranteed year of durability is expired, the total amount of energy saved used in its product life time before and after replacing with a new product with equivalent functions is converted to CO2 emissions.

Example of Hair Dryers

Achieved fast-drying and high airflow through improved motor performance while enhancing the nanoeTM effect (28% less energy consumed compared to conventional products).

[Example] Comparison of CO2 emissions converted from lifetime power consumption between conventional dryers and the latest products.

Calculation formula of avoided emissions

Amount of activities Avoided emissions for a given amount of activities CO2 emissions-related values and factors Period
[Amount of activities] (Number of units) The number of units sold per year*2 * (Annual power Unit: kg/kWh consumption of the product before replacement (kWh) - Annual power consumption of the product after replacement (kWh))*CO2 emission factor for electricity per sales region (kg CO2 /kWh) * Period(7 to 10 years depending on the product) Annual avoided emissions from energy-saving effect by one replaced product *2 'Before replacement' refers to the average penetration status of existing products that can be replaced with a new product with equivalent functions and performance at the time of the sale, per region. The amount of activities was broken down according to each situation and then totaled. CO2 emission factors for electricity (Source: IEA2021)Unit: kg/kWh Regions:Factors,  Japan:0.487, Europe:0.277, North America:0.383, China:0.623, India:0.723, Asia and Pacific:0.386, Latin America:0.252, Middle East & Africa:0.616

Baseline (Subject to comparison)
CO2 emissions converted from lifetime power consumption of the average product in markets at the penetration rate of the product with functions and performance equivalent to the new product per sales region*27.

*27 Example: Dryers penetration rate per country, and the like.

Coverage of quantification (Way of thinking and its rationalization)

When hair dryer is in use. The average CFP* of home appliances are dominant*28 ‘in use’. We deemed that we can ignore the impact from the CO2 emissions difference between those from the products before and after the replacement.

*28 'in use' accounts for approx. 80 to 90% of CO2 emissions in the home appliances value chain.

Amount of activities (unit, peace, etc.)
The number of annual sales depending on the status (penetration rate, etc.) per sales region for the new product.

Avoided CO2 emissions per unit of amount of activities (Basic unit)
Difference between CO2 emissions converted from lifetime power consumption*29 between those from the products before and after replacement in each sales region.

*29 Example: Rated power in design x annual ‘time in use’ etc.

Period (Flow method: Include entire lifetime CO2 emissions of the product in its first sales year)

  • This was set by product, which can maintain holding a spare parts (5–10 years), optimum operational period for basic performance etc.
  • CO2 emissions reduction effect continues during the period.
  • We deemed that 5 to 10 years for holding spare parts is a conservative estimate as the life of home appliances can be extended with appropriate use and maintenance.
  • With the extended product life, further CO2 emissions reduction effects are also expected because of efficient utilization of resources

*CFP (Carbon Footprint of Products): CO2 emissions converted from GHG emissions throughout the entire product life cycle—from raw material procurement to disposal and recycling of a product and service (per one unit).

Solution (Reducing heat loss) Energy Recovery Ventilators (ERV) System

Product life stages subject to avoided CO2 emissions

*30 Reduction in CO2 emissions from reducing air conditioning heat loss from room spaces during the period of use of the products.

Raw materials Manufacturing Transportation Use*30 Disposal/Recycle

Sales regions: Japan, China, North America, and Europe

Overview
To achieve decarbonization in the consumer and business sectors, it is important to reduce environmental impact from air conditioning at living spaces in houses and offices. Energy Recovery Ventilators (ERV) System reduces heat loss from the interior of buildings and provide comfort maintaining appropriate air quality at the same time. ERV System exchanges heat of indoor and outdoor with a heat exchange element during ventilation and either heat or cool the air before being taken into the building, which reduces air conditioning load. Moreover, the system is equipped with air purifier that is a high performance system. Therefore, ERV System is used in wide areas in residential, commercial, and office buildings, where high air tightness is required including Japan, the U.S., Europe, and China.

Avoided CO2 emissions mechanism
CO2 emissions converted from the reduced amount of power or fuel consumption by adopting this ERV System in room spaces under the same conditions compared to those from average ventilation method for ventilation in the market.

How ERV System works (winter)

* Efficiency varies according to model.

CO2 emissions converted from energy consumption with adjusted heat loss from ventilation

Calculation formula of avoided emissions

Amount of activities Avoided emissions for a given amount of activities CO2 emissions-related values and factors Period
[Amount of activities] Annual system installation volume (The number of heat exchange systems) * (Annual energy consumed by air conditioning in a residential house with conventional ventilation methods (volume of thermal loss) (kWh or liters) * CO2 emission factors by electricity or fuel type in each sales region (kg CO2 /m3) - Annual energy consumed by air conditioning in a residential house with a heat exchange system (volume of thermal loss) (kWh or liters) * CO2 emission factors by electricity or fuel type in each sales region (kg CO2 /kWh or liters)) Annual avoided emissions by installed one heat exchange system * Period | • CO2 emission factor for electricity: 0.487 kg/kWh in Japan, 0.623 kg/kWh in China, 0.383 kg/kWh in North America, and 0.277 kg/kWh in Europe (Source: IEA 2021) • CO2 emission factor for kerosene: 2.49 kg/liter (Source: Data from Ministry of the Environment)

Baseline (Subject to comparison)
CO2 emissions converted from power and fuel consumption per each sales region from the use of air conditioners in a residential house where the current average ventilation systems in the market is installed.

Coverage of quantification (Way of thinking and its rationalization)
Difference 'in use'. 'in use' account for the dominant (approx. 80%) of the CFP* of ventilators,, and effects from other than 'in use' are equivalent with other ventilators. Hence, we deemed that their CFPs when not 'in use' can be ignored.

CO2 emissions equivalent to energy consumed by air conditioning in a residential house with installed air conditioner with conventional ventilation methods (volume of thermal loss)  | CO2 emissions equivalent to energy consumed by air conditioning in a residential house with installed air conditioner with the heat exchange system (volume of thermal loss)

*CFP (Carbon Footprint of Products): CO2 emissions converted from GHG emissions throughout the entire product life cycle—from raw material procurement to disposal and recycling of a product and service (per one unit).

Amount of activities (unit)
The number of annual sales of heat exchange units, which is the core function of the system.

Avoided CO2 emissions per unit of amount of activities (Basic unit)
We calculated the average air conditioning load from an average ventilation method in the living space of a residential house in Japan using our simulation for each sales region.
We then determined the difference in the volume of energy consumed by system operation for air conditioning in living spaces between the conventional ventilation method and the energy exchanged method, and multiplied it by the CO2 emission factors for electricity or fuel*31 by each sales region.

*31 Kerosene was used as the fuel.

Period (Flow method: Include entire lifetime CO2 emissions of the product in its first sales year in one time.)

  • Designed lifetime of ERV System (10 years)
  • CO2 emissions reduction effect continues during the period.

Others (Reducing heat loss) Vacuum Insulated Glass (VIG)

Product life stages subject to avoided CO2 emissions

*32 Reduction in CO2 emissions from reducing loads in cooling or heating in the building during the period of use of the products.

Raw materials Manufacturing Transportation Use*32 Disposal/Recycle

Sales regions: Japan

Overview
One effective means of achieving decarbonization in the consumer and business sectors is through reducing the air conditioning load at spaces in residential houses and offices by maintaining stable room temperatures through improvement of building insulation. According to our estimation, heat loss through the windows in all heat loss in an average detached house in Japan accounts for 30 to 40%. Our Vacuum Insulated Glass (VIG) achieves high insulation while at the same time maintaining its thinness, that can be adopted for existing openings (windows) in buildings as they are. Therefore, VIG has a potential to offer high applicability to a wide range of room spaces in different types of both new and older buildings.

Avoided CO2 emissions mechanism
Vacuum insulated glass (VIG) shows significantly higher thermal insulation compared to those of single-pane glass and Low-E multi-pane glass.*33 CO2 emissions converted from the reduced amount of power of electricity required for operation of air conditioning equipment by installation of the VIG for glass material of buildings.

Comparison of CO2 emissions from energy consumed by air conditioning in a residential house with/without VIG windows, taking account of the glass’s CFP.*

Calculation formula of avoided emissions

Amount of activities Avoided emissions for a given amount of activities CO2 emissions-related values and factors Period
[Amount of activities] (m2) Amount of VIG sold per year * (Power consumed by air conditioning in a residential house with single-pane or Low-E multi-pane glass*3 per year (kWh/ m2) - Power consumed by air conditioning in a residential house with VIG*3 per year (kWh/ m2)) * CO2 emission factor for electricity (kg CO2 /kWh) * Period (Design life) | Annual avoided emissions achieved by installation of 1 m2 of VIG | CO2 emission factor for electricity Japan 0.487 kg/kWh (Source: IEA 2021) | *3 Calculated based on our simulation using data from the Architectural Institute of Japan. *4 Calculated based on data from the Flat Glass Manufacturers Association of Japan, by Panasonic. | - (VIG’s CFP*2, *4 (kg CO2 / m2) - Single-pane or Low-E multi-pane glass’s CFP*2,*4 (kg CO2 kWh/ m2))

Baseline (Subject to comparison)
CO2 emissions converted from electricity consumed by air conditioning operations in the entire space of a respective residential house in Japan.

For the installation of VIG, it is set that VIG replaces single-pane glass when reforming a house, and replaces Low-E multi-pane glass when building a new house.

Coverage of quantification (Way of thinking and its rationalization)

  • In use: CO2 emissions derived from electricity consumed by air conditioning in an entire residential house.
  • Glass’s CFP*: VIG’s CFP* is greater than that of single-pane or Low-E multi-pane glass, however, there are no CO2 emission from the glass in use.
    The difference between the CFPs* from VIG and single-pane glass is 31% of avoided emissions, and the difference between VIG and Low-E multi-pane glass is 19% of avoided emissions. These differences were subtracted from the avoided emissions, instead of ignoring them.

Amount of activities
Amount of VIG sold per year (m2)

Avoided CO2 emissions per unit of amount of activities (Basic unit)

  • In use: Differences in electricity consumed by air conditioning in residential houses per different type of glass.
    Note: Annual power consumption was calculated by us, using a simulation of a two-story wooden house with a floor space of 120 m2 based on standard weather data from the Architectural Institute of Japan using air conditioning heat load computing software.
  • CFPs* for glass: Calculated by ourselves, per type of glass based on data from the Flat Glass Manufacturers Association of Japan.

Period (Flow method: Include entire lifetime CO2 emissions of the product in its first sales year in one time)

  • Designed lifetime of VIG.
  • CO2 emissions reduction effect continues during the period.
  • We believe that the CO2 emissions effects are estimated from a conservative view because the life of a Japanese residential house is generally deemed much longer.

*CFP (Carbon Footprint of Products): CO2 emissions converted from GHG emissions throughout the entire product life cycle—from raw material procurement to disposal and recycling of a product and service (per one unit).

Others (Reduction of redelivery) Home Delivery Communication Box

Product life stages subject to avoided CO2 emissions

*36 Reduction of CO2 emissions by home delivery services during the period of use of the products

Raw materials Manufacturing Transportation Use*36 Disposal/Recycle

Sales regions: Japan

Overview
In the household business sector in Japan, because of increase in e-commerce trading and increase in the time when none is at home along with changes in lifestyle, load for distribution on couriers is on increase as the number of redelivery of goods increases. Installation of a Home Delivery Communication Box at home can avoid redelivery of goods, lowers the burden for the parcel receivers, and decreases the working hours of couriers workers. At the same time, it reduces CO2 emissions from energy consumption such as fuel for deliveries, which contributes to reduction of load in local distribution networks and decarbonization.

Avoided CO2 emissions mechanism
Reduction of CO2 emissions from energy consumption (combustion of fossil fuel such as gasoline) required for courier workers to redeliver goods, by avoiding redeliveries.

CO2 emissions with and without one Home Delivery Communication Box
(CO2 emissions from a vehicle on redelivery by the courier worker and CFP* of the Home Delivery Communication Box)

Calculation formula of avoided emissions

Amount of activities Avoided emissions for a given amount of activities CO2 emissions-related values and factors Period
[Amount of activities] (Units) The number of home delivery communication boxes sold per year. Avoided emissions per vehicle per redelivery (0.46 kg/redelivery) * Verified data by Ministry of Land, Infrastructure, Transport and Tourism (MLIT) * Annual number of redeliveries (29.5 times/year) * Verified data by Panasonic * Period (Design life of the product) - CFP*1 of a home delivery communication box (37.0 kg/box) * Estimated by Panasonic)

Baseline (Subject to comparison)
CO2 emissions converted from the average energy consumption from redelivery of goods by courier workers, in the case that the receivers of the goods did not receive the goods at the first delivery as they were not at home where a Home Delivery Communication Box is not installed.

Coverage of quantification (Way of thinking and its rationalization)
When the box is in use (avoided emissions from avoided redelivery by installation of a Home Delivery Communication Box). Although the box emits no CO2 when it is in use, the CFP* of the box itself is 20% of entire avoided emissions (by our estimation). However, this was not included in the avoided emissions as it is an additional effect.

Amount of activities (unit)
The number of Home Delivery Communication Boxes sold per year

Avoided CO2 emissions per unit of amount of activities (Basic unit)

  • Avoided emissions per redelivery: 0.46 kg (Source: Verified data by MLIT)
  • The number of redeliveries: Verified data by Panasonic

Period (Flow method: Include entire lifetime CO2 emissions of the product in its first sales year)

  • Designed lifetime of a Home Delivery Communication Box.
  • CO2 emissions reduction effect continues during the period.
  • We deemed that the design life of the Home Delivery Communication Box is a conservative estimate for CO2 emission effects as the box’s life can be extended further with appropriate use and maintenance.

*CFP (Carbon Footprint of Products): CO2 emissions converted from GHG emissions throughout the entire product life cycle—from raw material procurement to disposal and recycling of a product and service (per one unit).

Activities to raise awareness of and valorize Avoided CO2 Emissions

Under the current GHG Protocol, it is possible to evaluate CO2 emissions from our business activities; however, it does not take into account the contribution to society through our business (opportunities, i.e., business chance) as of now. On the other hand, although there is a concept of the avoided emissions, in reality awareness of the avoided emissions is still low in society and no uniformed standard for the avoided emissions has been established. Therefore, it is a must to establish a structure to facilitate and encourage respective corporations efforts to decarbonation (technical development and innovation), as well as to contributes to the acceleration of the realization of a carbon-neutral society by preparing environment where respective corporation's contribution to decarbonization is properly evaluated.

Our environmental vision, Panasonic GREEN IMPACT (PGI), sets out the CO2 emissions reduction targets not only for our company but also for society as a whole. It is important to spread significance of the avoided emissions as 'a standard measurement' to evaluate the corporation's contribution to decarbonization efforts and expand awareness of the avoided emissions, together with stakeholders such as corporations and financial institutions who share the same ambitions. Therefore, we are currently implementing the following activities regarding the avoided emissions towards its global standardization, and raising and spreading its awareness

Standardization Activities

International Electrotechnical Commission (IEC)

In September 2020, activities of standardization of a new IEC standard proposed by Japan's proposal started. Specifically, the activities are calculation of the avoided emissions from new technologies, such as AI, IoT, and a digital twin; provision of requirements for the calculation methods; establishment of requirements for communications and information disclosure, and preparation of an international standard IEC63372 titled “Quantification and communication of GHG emissions and emission reductions/avoided emissions from electric and electronic products and systems - Principles, methodologies, requirements, and guidance." A voting has started since May 2024 on the Committee Draft IEC TC111 (Environmental standard for electrical and electronic equipment and systems). If all goes well, the new IEC standard is expected to be published in the early half of 2025. The Panasonic Group has involved and worked on the above activities from their initial stage.

World Business Council for Sustainable Development (WBCSD)

WBCSD is a global organization of approximately 200 leading companies committed to sustainable development, working together to contribute to transformation to sustainable society. Endorsing the principles of WBCSD, Panasonic Holdings Corporation (PHD) joined WBCSD in 2022 to accelerate the Panasonic Group’s PGI activities. In response to the Guidance on Avoided Emissions issued by the WBCSD in March 2023, Panasonic is working in close collaboration with the member companies for revising the standards and promoting activities to disseminate the avoided emissions.

GX League*37

With the aim to establish a system whereby the opportunities for Japan's corporations contributions to climate change such as emissions reduction by their products and services provided to markets is properly evaluated and ultimately to achieve global carbon neutrality, Panasonic, as a leading member of the GX Business Working Group, has participated in the GX League following to the last year, in the area of rulemaking for market creation that is one of the GX League activities.

To expand awareness of the avoided emissions that is one of the disclosure items used in the Panasonic Group's long-term environmental vision in evaluating opportunities related to climate change, we jointly published with other GX league member company a collection of use examples by financial institutions in December 2023, and in May 2024 a virtual collection of recommended information disclosure by our operating companies, following to "the Basic Policy for disclosure and evaluation for opportunities related to climate change" published in fiscal 2023.

*37 GX stands for ‘Green Transformation'. In February 2022, the Industrial Science and Technology Policy and Environment Bureau of the Ministry of Economy, Trade and Industry (METI) announced the GX League Basic Concept. GX League was launched as an apparatus where the company groups who are proactively working for GX with players in industry, government, academia and financial institutions challenge towards GX as a whole to discuss transformation of a whole society, economic and environmental system and implement activities to create new markets.

Appeal of the avoided emissions at international events

As a result of our fiscal 2023 activities for raising awareness and dissemination of the avoided emissions at international events, the activities were clearly stated in the 2023 G7 outcome documents.

We have continued working to raise awareness and valorize the avoided emissions in fiscal 2024.

G7 Ministers' Meeting on Climate, Energy and Environment in Sapporo

In April 2023, "There is value in acknowledging avoided emissions." was clearly stated in the outcome documents.

G7 Hiroshima Summit

In May 2023, "We also encourage and promote private entities' work to foster innovation contributing to the emissions reductions of other entities through decarbonization solutions." was clearly stated in the outcome documents.

GGX x TCFD Summit

At the GGX x TCFD Summit sponsored by the METI as an international event integrating the Global Green Transformation (GGX) meeting and the Task Force on Climate-related Financial Disclosures (TCFD) meeting, held in October 2023, Panasonic Group participated in the panel discussion as a panelist on the themes of corporate problem-solving capabilities and the avoided emissions. Our panelist explained that the avoided emissions are a benchmark for measuring the contribution of each business to solving climate change issues and use of the benchmark will lead to decarbonization of the entire society. He also referred to that while there is a growing interest in the avoided emission as a measurement to evaluate the level of corporations contribution to decarbonization as the avoided emissions was clearly stated in the G7 Summits outcome documents, the avoided emissions are significant in terms of fairness and comparability for corporations.

COP28 (The 2023 Conference of the Parties of the United Nations Framework Convention on Climate Change (UNFCCC))

In December 2023, Panasonic Group participated in the METI-sponsored seminar at the Japan Pavilion and actively involved in discussions with WBCSD, GFANZ (Glasgow Financial Alliance for Net Zero, a global alliance of leading financial institutions engaged in for acceleration of economic decarbonization), BlackRock, and other related organizations. In the seminar with a theme of "Tech for Transition," we discussed rulemaking and technology related to the avoided emissions. In the seminar on "appropriate evaluation of the avoided emissions towards a net zero society," we suggested that, for the financial industry to utilize the avoided emissions as an indicator in evaluating business enterprises and projects, the calculation method should be standardized in order to facilitate a fair and easy comparison for corporations.

CES2024

At the CES 2024 Conference held in January 2024, Panasonic Group announced its intentions to continue to lead society, establish the concept of the avoided emissions, make rules in the area, and ultimately to contribute to its dissemination of the avoided emissions throughout the world, touching upon its participation in the G7 Hiroshima Summit.