Honda Motors

RATING

SECTOR

Automotive (Automotive and Suppliers)

WEBSITE

CONTACT

2-1-1, Minami-Aoyama, 
Minato-ku,
Tokyo 107-8556,
Japan

Tel: +81-(0)3-3423-1111

STOCK EXCHANGE

LISTING

  • RobecoSAM Sustainability Index Bronze Class rating (2016-2019)
  • A-rating on CDP Japan 500 Climate Change Report 2018
  • Component of the Dow Jones Sustainability World Index 2019 (3 years in a row)
  • Top 4 for the global Automobile sector and added to the DJSI World
  • Component of the Dow Jones Sustainability Asia/Pacific Index 2019 (5 years in a row)

EMPLOYEES

219,722

CHIEF SUSTAINABILITY OFFICER

Raminta Jautokas

AWARDS

  • 2019 Climate Leadership Awards presented by Innovative Partnership Certificate
  • 2019 Local Hero for Sustainability presented by the city of Aalst, Belgium

CONTENT SOURCE

FURTHER READING

Report created by Muge Acar

Honda Motor

SECTIONS :  Sustainability    Evaluation  •  Progress  •  Watch  •  Overview

Company Activity

Honda Motor Co., Ltd. is a Japanese public multinational conglomerate corporation primarily known as a manufacturer of automobiles, aircraft, motorcycles, and power equipment. The company was founded by Soichiro Honda on September 24, 1948, and is headquartered in Tokyo, Japan.

Honda engages in the manufacture and sale of automobiles, motorcycles, and power products. It operates through the following segments: Automobile, Motorcycle, Financial Services, and Power Product and Other Businesses.

  • The Automobile segment manufactures and sells automobiles and related accessories.
  • The Motorcycle segment handles all-terrain vehicles, motorcycle business, and related parts.
  • The Financial Services segment provides financial and insurance services.
  • The Power Product and Other Businesses segment offers power products and relevant parts.

Company Sustainability Activity

The Honda Philosophy forms the values shared by all Honda Group companies and all of their associates and is the basis for Honda’s corporate activities and the associates’ behaviour and decision-making.

Honda has set striving to be “a company that society wants to exist” as its direction for the 21st century. It is also advancing initiatives known as “Creating the Joys,” “Expanding the Joys” and “Ensuring the Joys for the Next Generation.”

The “2030 Vision” is one milestone indicating in concrete terms the direction Honda ought to take toward realizing these objectives. For Honda’s sustainability, it is important to meet stakeholders’ expectations and needs by providing value through its products and services.

It is also equally important to fulfill its corporate social responsibility such as by considering the impact on the environment and society and to contribute to the resolution of social issues through its business activities. To this end, Honda is devising medium- and long-term strategies that consider the roles it should fulfill and contributions it should make.

Further, these are matched to the characteristics of each region around the world, using the materiality matrix, which assesses issues based on both stakeholder and Honda’s corporate perspectives, as its guide.

Highlights

  • Honda released their 2030 vision in 2019 with 3 main perspectives: “Creating the Joys,” “Expanding the Joys” and “Ensuring the Joys for the Next Generation
  • Honda introduced the Triple Zero approach, unify its three “zeroing” efforts: “climate change issues,” “energy issues” and “efficient utilization of resources

Targets

REDUCING ENVIRONMENTAL FOOTPRINT 

  • Honda is striving to eliminate CO2 emissions in products and business activities in the future by utilizing renewable energy.
  • In 2014, the Company announced its aim to cut total corporate CO2 emissions to halve in half by 2050 (compared with 2000 levels) by reducing CO2 emissions through efficiency improvements of internal combustion engines, reducing CO2 emissions by introducing environmentally innovative technologies and diversifying energy sources, and reducing CO2 emissions intensity from the use of motorcycles, automobiles and power products worldwide by 30% from the 2000 base year level by 2020.
  • The Company has set an interim target for 2020 and aims to establish technologies that diversify home energy sources and reduce CO2 emissions from personal mobility and home living to zero.
  • Honda plans to introduce solar power generation of 11.4 MW in 2020 for the use of renewable energy.
  • Honda has set a target to electrify two-thirds of its global automobile sales by 2030.

BIODIVERSITY 

  • Recognizing that its business activities can have an impact on biodiversity, Honda has long been putting a great deal of effort into activities that have aimed the conservation of biodiversity.

MINIMIZING WASTE AND LITTERING 

  • Honda aims utilization of resources one of the material issues and is actively promoting 3R (Reduction/Reuse/ Recycling) activities as well as ensuring proper processing when disposing of end-of-life products.
  • The goal is to keep cost-incurring waste generated from corporate activities under 240,000 tons in 2020.

MANAGING WATER 

  • Honda is making an effort to reduce water intake with an aim of keeping water intake incorporate activities under 29 million m3 in 2020.

PRESERVATION OF CLEAN AIR

  • Honda recognizes that air pollution has been a critical issue since the 1960s has sought to resolve this issue through the development of technologies that clean the gas emitted from its products

HEALTH AND SAFETY

  • As part of their 2030 vision, Honda aims to be “collision-free mobile society”. 
  • Honda is conducting safety promotion activities in three areas: “Human (Safety Education),” “Technology (Vehicle Technologies)” and “Communication (Telecommunication Networks)” with the aim of realizing a collision-free mobile society.

WORK ETHICS

  • Honda upholds the idea of “Respect for the Individual” in the Honda Philosophy and includes “Respect of Human Rights” in the Honda Code of Conduct to show its policy to “maintain its stance as a company committed to practicing fairness and sincerity and respect human rights.
  • Honda is also striving to create an open organizational culture that allows associates to report any violation related to human rights to their respective superiors or resolve the issue among themselves.

DIVERSITY

  • For Honda, diversification of the workforce means to enhance its total strength by providing equal opportunities to people regardless of their personal attributes, such as race, nationality, cultural background, age, gender, gender identity, sexual orientation, past career, educational background and having disabilities or not.

Progress

REDUCING ENVIRONMENTAL FOOTPRINT 

  • August 2012 Honda disclosed estimates of all FY2012 GHG emissions from its entire value chain in conformity with the GHG Protocol, currently the world’s most widely used GHG emissions accounting standard.
  • Honda has formulated and is promoting initiatives under a goal to reduce the CO2 emissions intensity of motorcycles, automobiles and power products by 30% from 2000 levels by 2020.
  • From 2018 to 2019 their total GHG emissions increased from 314.18 to 316.06
  • In North America, Honda conducts credit trading with the portion exceeding the amount set forth in GHG and Corporate Average Fuel Economy (CAFE) laws and regulations and is working efficiently to reduce GHG
  • Honda is developing the Honda Smart Home System (HSHS) to reduce CO2 emissions from personal mobility and home living to zero
  • The Company is seizing all new business opportunities by pushing forward with the development of plug-in hybrid electric vehicles (PHEV), electric vehicles (EV) and fuel cell vehicles (FCV)
  • Honda is also working to promote electrification company-wide including the delegation of its Yorii assembly plant in Japan as its flagship production site for electrified vehicles 
  • Honda R&D Americas, Inc. (HRA) is undertaking research on an algal biomass system. This research involves exhaust emitted from dynamometers (“dynos”) used for vehicle testing. 
  • HRA is also collaborating with Ohio University, renowned for algal research. The project involves converting wastewater, which would normally be a pollutant, into fertilizer for algal farming.
  • Research on the algal biomass system aims to reduce CO2 emitted during business activities. This mechanism not only reduces CO2 but also reduces environmental loads such as waste oil and wastewater. It also enables the creation of new energy sources. In other words, this truly represents Honda’s “Triple Zero” initiative.
  • HRA set up an algal farm in May 2018. Since the farm is still in a pilot phase, the annual amount of captured CO2 is 1t so far.
  • Honda commenced lease sales of the electric motorized scooter “PCX ELECTRIC” in November 2018 in response to climate change and energy diversification
  • As emissions from “use of products” account for approximately 80% of CO2 emissions from Honda’s entire product life cycle, Honda sets unique product guidelines at an advanced level for reducing their Carbon emission due to their products. These guidelines are formulated under their Honda Environmental Performance Standard (HEPS) formulated in 2011.
  • Since 2018, Honda is taking part in CDP’s supply chain program (an international initiative by institutional investors requesting companies for disclosure of information on climate change policies) and requesting disclosure of risks and opportunities related to Greenhouse Gas (GHG) emissions and the environment from suppliers in addition to information on matters relating to Honda’s operational domains.
  • The Saitama Factory’s Yorii assembly plant achieved a 30% reduction in per unit energy use
  • In FY2019, Honda utilized a total of 300 GWh of electricity generated through renewable energy such as solar and wind power
  • In the production of automobiles, solvents found in paint and thinner used mainly in paint processes can generate Volatile Organic Compounds (VOC), the cause of photochemical oxidants. Honda’s production activities in the past have sought to reduce VOC emissions through the introduction of a highly efficient paint process using robots, installation of equipment to incinerate and purify VOC. and the introduced Honda Smart Ecological Paint that eliminates a middle coating process from a commonly used 4-coat/3-bake auto body painting process to realize a 3-coat/2-bake water-based painting process, thus reducing the generation of VOC. 
  • Honda continues to carry out fixed-point observation and reporting on ecosystems in collaboration with “Monitoring Sites 1000” (a project for promoting the monitoring of survey sites of important ecosystems) 
  • Honda works to ensure the appropriate management and reduction of chemical substances contained in automotive components from the product design and development stages in order to reduce those materials that impact the environment.
  • Laws and regulations have been introduced in each country to ensure the appropriate management of chemical substances and the reduction of harmful substances contained in automotive components. 
  • These legislations are based on a goal set by the United Nations 
  • Honda is moving ahead with the reduction of four types of heavy metals (lead, mercury, hexavalent chromium and cadmium) that are considered to have negative impacts on the environment 
  • Honda is working to expand the modal shift to switch the transportation method from trucks to rail and ship transport, and to facilitate the technological advancement of packaging materials. 
  • In Vietnam, the distance between Honda’s motorcycle production facility in Hanoi and the major market of Ho Chi Minh City is over 1,700km. Honda reduced CO2 emissions by approximately 1,000t. By truck transport to rail and ship transport for motorcycle shipments to its warehouse in the south. 
  • In India, CO2 emissions were educed by 330t annually by switching the transportation method from the motorcycle factory to the sales base and replacing conventional truck transportation with rail transportation
  • Honda introduced a third-party audit in Japan in 2016 for suppliers with large business volume and significant influences on the Company in line with rising expectations worldwide to fulfill corporate social responsibility that also includes the supply chain. 
  • Honda North America Inc., Honda’s U.S. subsidiary, participates in four of the workgroups established by the Automotive Industry Action Group (AIAG) to strengthen sustainability in the supply chain

PRESERVATION OF CLEAN AIR

  • In 1972 Honda announced the CVCC engine, which cleared exhaust gas regulations under the U.S. Clean Air Act of 1970, in 1972 of the CVCC engine, which cleared exhaust gas regulations under the U.S. Clean Air Act of 1970, 
  • Honda has also enhanced the combustion efficiency of engines and cleaned exhaust emissions by promoting conversion from two-stroke to four-stroke engines in motorcycles and power products as well as shifting from a carburetor to the Honda Programmed Fuel Injection (PGM-FI) system
  • The Accord Plug-in Hybrid was the first in the world to achieve SULEV20 status. 
  • Honda has cleared compliance of United States Environmental Protection Agency Phase 3 regulations

MINIMIZING WASTE AND LITTERING 

  • Honda to reduce the weight of the previous design by approximately 20%, which had an average thickness of 3.0 mm, by using less resin in bumper production
  • In FY2019, the Company collected and recycled approximately 160,000 end-of-life bumpers. Collected bumpers are recycled and used for splash guards and other components of the Freed model
  • In FY2019, the number of Honda automobiles collected was approximately 480,000 for fluorocarbons (-2% from the previous fiscal year), approximately 470,000 for airbags (+2%) and approximately 520,000 for ASR ((Automobile Shredder Residue)(±0%). 
  • Recycling rates for gas generators and ASR were 94.2% and 97.3%
  • Collection of end-of-life motorcycles were 1,368 Honda products in 2019, which accounted for 65.0% of all units collected. The recycling rate of Honda products came to 97.4% on a weight basis, enabling them to achieve the target recycling rate of 95% since 2014

MANAGING WATER 

  • The Company is working to recycle and reuse water in manufacturing processes, which utilize about 4.8 million cubic meters of water each year, or about 20% of all water use by Honda. 
  • Honda manages a water conservation fund in North America under the Honda Marine Science Foundation
  • The fund supports the improvement and preservation of coastal areas for future generations through initiatives for marine ecosystem restoration and promoting resilience to climate change. 
  • Around US$200,000 is provided as support every year, which contributes to the preservation of the local environment.
  • Honda has undertaken conservation activities for forest watersheds continuously since 1999 as part of its social contribution program. Production sites protect and manage the forest watersheds that they benefit from and strive to keep them optimized for each region

BIODIVERSITY

  • The Company carried out tree-planting and water-recycling initiatives at its plants in the 1960s and launched the Community Forest program in 1976
  • In 2011, the Company established the Honda Biodiversity Guidelines. 
  • Each of Honda’s key business sites in Japan conducts a survey on the actual conditions of biodiversity and promotes various activities such as thinning, pruning and eradication of non-native species.

HEALTH AND SAFETY

  • The company developed various technologies including the driver-side SRS airbag, the world’s first pedestrian dummies and the Advanced Compatibility Engineering (ACE) body structure that helps to protect occupants of both vehicles in a collision
  • In 2000, Honda built the world’s first indoor crash test facility, making it possible to conduct tests that better reflect real-world crash configurations
  • In 1970, Honda established the Driving Safety Promotion Center. Since then, through cooperation with Honda Traffic Education Centers motorcycle/automobile/power product dealers, local corporations and schools, they have provided traffic safety education and training for drivers and riders to more than 6.47 million customers in Japan.
  •  Honda started driving safety promotion activities in Brazil in 1972, it has carried out activities in 39 countries and regions throughout the world including Japan, establishing Traffic Education Centers in various countries and cooperating with local dealers
  • Honda developed an educational program for early elementary school students in 2017, which has since been providing the program nationwide
  • In 1998, Honda developed the world’s first pedestrian dummies, while it built the world’s first indoor, all-weather omni-directional crash test facility in 2000. 
  • In 2003, Honda developed the Roadmap for safety technologies crash-compatibility body and the world’s first Collision Mitigation Brake System (CMBS).
  • In 2014, the Company announced “Honda Sensing/AcuraWatch,” new advanced safety and driver-assistive technologies. “Honda Sensing/ AcuraWatch” is a general term for advanced safety technologies that will lead to automated driving technologies in the future.
  • An Intelligent Transport System (ITS) helps to resolve problems related to road traffic by connecting roadside infrastructure, vehicles and drivers. Under its global safety slogan, “Safety for Everyone,” Honda has been working to realize an ITS to provide safety and security to all road users.
  • Honda has created a “Safety Map” in Japan. Various information, such as emergency braking applied by cars, information on traffic accidents provided by the police and local governments, traffic information provided by local residents and other relevant information, is integrated and analyzed to generate the Safety Map. 
  • Many of Honda’s models have achieved high safety assessments from NCAP in various regions. (NCAP is the New Car Assessment Program. This is a program that tests and evaluates the safety performance of cars, which is performed by public organizations in various regions)
  • Honda’s design and development, production, and sales and service departments are working together to win the top ranking in the Initial Quality Study (IQS) 
  • Honda conducts occupational health and safety audits to check on the operation of an Occupational Safety and Health Management System (OSHMS) and progress in implementing compliance-related matters
  • In April 2014, Honda introduced a Selection-based Welfare Program (Cafeteria Plan) giving associates the options of support for nursing care, as well as life events such as childbirth and child care, including babysitter agent services and child-care items rental.
  • Honda has been certified as a company that supports child-rearing by the Japanese Minister of Health, Labour and Welfare. 
  • In 2009, Honda announced a Mental Health Policy and has since been working on both creating vitality in associates and in the workplace and providing problem-solving support in an organized, systematic and ongoing manner.
  • The Honda Health Insurance Association works under the idea of “realizing a healthy and spiritually-rich life.” and they introduced a Healthy Point Program as an incentive scheme to support associates who are making efforts to prevent diseases and improve their lifestyle habits

WORK ETHICS

  •  In the company’s Code of conduct, Honda requires its associates to “respect fellow associates, interact with them in a sincere and appropriate manner, and never engage in any form of harassment or unjust, discriminatory behaviour in the workplace.”
  • To promote awareness and thorough implementation, Honda provides training on the Honda Philosophy all around the world. The same is ensured for the Honda Code of Conduct by distributing leaflets, posting the relevant information on the corporate intranet and providing training.
  • Regarding human rights, Honda works to identify potential risks by conducting an annual assessment of Group companies to check if their operations comply with the Associate Relations Policies.
  • At the same time, Honda has set up the Business Ethics Improvement Proposal Line in Japan and other regions overseas to receive consultation in a fair and neutral manner.
  • Honda introduced their initiative to regulate healthy working hours by banning overtimes on Wednesdays and Fridays and introducing a policy that’s encouraging all associates to use their allotted vacation time in full and to take regular annual paid vacations and use their vacation time effectively to refresh themselves and increase motivation.
    • Employees at Honda’s total annual working hours averaged 1,909 per associate in 2019, and associates averaged 19.3 paid vacation days.

DIVERSITY

  • Honda globally pursues workforce diversification believing that these individualities evolve into innovation. 
  • Each of Honda’s six core regions is hiring and developing personnel by setting a target for increasing the proportion of women and minority groups (in terms of race and nationality, etc.) in management and job assignments in accordance with the conditions of each region. In addition, Honda has been implementing a variety of initiatives for all associates worldwide such as facilitating the understanding of the importance of diversity and continually carrying out enlightenment activities.
  • From 2015 to 2017 Honda has established a foundation to realize a world where people can equally develop their careers regardless of gender. 
  • Since 2019, Honda has been exploring ways to strengthen its efforts for all associates, including superiors responsible for managing diverse human resources, experienced associates making up the majority of its workforce, people with disabilities and the LGBT community.
  •  The proportion of female associates in the workforce has increased from 5.0% to 7.6% within the past 14 years. 
    • The ratio of woman in the Honda workplace increased from 1.0 to 1.9 from 2015 to 2019
  • As part of the Company’s efforts to expand women’s roles, it has selected the number of women holding management positions as one management indicator and plans to triple the number by 2020 and realize at least nine times the number by 2025, both compared with 2015. 
  • In January 2015, the Company established the Diversity Promotion Office, an organization specialized in diversifying Honda’s workforce.
  • In August 2018, Honda received the second level “L-boshi” certification from the Ministry of Health, Labour and Welfare as a female-friendly company. 
  • Honda has been recruiting foreign exchange students studying at universities and graduate schools in Japan and started a Global Employment Program to hire human resources directly from overseas labor markets.

COMMUNITY INVOLVEMENT

  • Honda developed the Beach Cleaner in 2006 that cleans up the beaches without harming their ecosystem and in total, the project has been responsible for the collection of some 450 tons of rubbish. 
  • In 1993, American Honda Motor Co., Inc. opened Eagle Rock School, an institution that supports the expansion of educational opportunities and research into new educational methods. The school’s mission is to provide learning opportunities to students who, for a variety of reasons, are unable to adjust to their existing school lives.
  • Montesa Honda S.A. in Spain has provided motorcycle traffic safety education since 1992. This training program includes a wide offer of training courses to cover all rider profiles, from kids aged six years old to experienced riders.
  • In 1994, Honda established its first Southeast Asian Road Safety Education Center in Thailand. In Asia, approximately 48 million people had received road safety training by 2018
  • Honda Motor (China) Co., Ltd. initiated afforestation activities in Inner Mongolia as part of a long-term environmental conservation project. Since 2008, the entire Honda Group in China has been involved, and many associates participate in the activities every year. Over the last 11 years, the project has succeeded in afforesting more than 1,060 hectares of land, with over 90% of planted saplings surviving.

Certificates

  • EPA (Environment Protection Agency) certification 
  • California Air Resources Board certification 
  • “L-boshi” certification (A certification program under the Act on Promotion of Women’s Participation and Advancement in the Workplace)

United Nations Sustainable Development Goals

United Nations SDG Compliance

SDG 3

  • Honda is working vigilantly to reduce their carbon footprint and reduce their waste and improve their recycling activities.

SDG 7

  • The company is working on promoting production activities that are sourced by renewable energy. They are working towards a more sustainable workplace and products. Honda tries to reduce the impact of the users who buy their products on the environment by producing more sustainable products.

SDG 13

  • Honda promotes health and safety in their workplace for their employees. They are providing products that minimize health risks for their customers.

Secondary SDGs : 4, 5, 6, 8, 10, 11, 12, 16, 17

Evaluation

Honda Motors is engaged in sustainability activity. They are dedicated to incorporating sustainability throughout their business.

Honda has clear sustainability initiatives and strategies to reduce its environmental impact and carbon footprint. They are transparent in providing their targets and reporting on their progress. They have clear goals and plans towards becoming more environmentally friendly even in a field that’s difficult to become sustainable. Honda is also very passionate about their impact on their community and their work ethics and diversity in the workplace.

Honda holds several awards and listings. In addition, they have received several industry certificates such as the EPA certification, CARB certification ad the L-boshi certification. Honda is semi-compliant with the UN Sustainable Development Goals.

Considering all of their efforts the company gets a ranking of B.

Analyst Outlook: Neutral

While the automotive and transportation industry have detrimental effects on the environment, Honda is dedicated to incorporating sustainability as a way to combat climate change. Honda has created eco-cars and hybrid vehicles.

Key Points

  • In addition to reducing their environmental footprint, Honda has comprehensive initiatives for diversity and inclusivity for their employees and community
  • Clear sustainability initiatives and strategies
  • Listed in Dow Jones Sustainability Indices, and CDP 
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