Sep 15, 2023
Generating Sustainable Impacts / Feature Story
Panasonic Sees Progress on PGI Initiative as the Standardization Effort on Avoided Emissions Picks Up Momentum
- What are Avoided Emissions?
- What are Panasonic’s mid- to long-term targets for avoided emissions?
- What was the key outcome for avoided emissions in FY2023?
- What key products and services are contributing to avoided emissions?
- What are the key challenges for Panasonic in terms of promoting recognition of avoided emissions?
- Commitment to Progress on Avoided Emissions
Konosuke Matsushita, Panasonic’s founder, believed that the ultimate purpose of any business was “the betterment of our society.” His commitment to improving lives through business activities that address social needs and challenges is reflected in the Panasonic Group’s long-term environmental vision, known as “Panasonic GREEN IMPACT (PGI),” which ambitiously seeks to generate positive impacts that reduce CO2 emissions by an amount equivalent to about 1% of current total global CO2 emissions.
While many companies regard “CO2 emissions reduction” as the primary indicator for assessing their responsibility under the Greenhouse Gas (GHG) Protocol, the Panasonic Group believes that another indicator, known as “CO2 Avoided Emissions (avoided emissions),” is equally important. Avoided emissions refers to CO2 emission reductions that occur outside of a company’s value chain. Our strong focus on avoided emissions reflects our commitment not only to achieve our own CO2 emissions reduction targets, but also to contribute to reductions across society and customers.
In this article, Panasonic Newsroom Global unpacks the latest edition of Panasonic’s Sustainability Data Book 2023, explaining the definition of avoided emissions, our mid- to long-term goals for this indicator, key FY2023 outcomes, and key challenges as we continue to pursue a positive impact through the PGI initiative.
What are Avoided Emissions?
Panasonic defines avoided emissions as the difference between existing emissions (baseline) and reduced emissions made possible by the introduction of energy-saving products and systems or the application of digital technologies (e.g., AI, IoT, etc.). CO2 emissions and avoided emissions are different concepts and have different objectives; as such, CO2 emissions cannot be offset by avoided emissions.
What are Panasonic’s mid- to long-term targets for avoided emissions?
Under PGI, Panasonic organizes its environmental impact under three classifications—OWN IMPACT, CONTRIBUTION IMPACT, and FUTURE IMPACT. Of these, CONTRIBUTION IMPACT and FUTURE IMPACT are closely related to avoided emissions.
Panasonic is committed to expanding our avoided emissions impact of approximately 100 million tons through existing products and services (CONTRIBUTION IMPACT) and to include an additional 100 million tons of avoided emissions up to 2050 that have been made possible through the innovation of new technologies and business fields (FUTURE IMPACT).
Under GREEN IMPACT PLAN 2024, the three-year (FY2023-FY2025) environmental action plan, Panasonic aims to achieve avoided emissions of 38.3 million tons by FY2025 and 93 million tons by FY 2031.
What was the key outcome for avoided emissions in FY2023?
During FY2023, Panasonic expanded its avoided emissions impact in terms of both volume and business coverage. In FY2021, the company’s CONTRIBUTION IMPACT (avoided emissions generated by existing businesses) was calculated to be 23.47 million tons from products and services offered by 28 businesses. By FY2023, the avoided emissions generated from our existing products and services were further visualized and calculated and this had increased to 37.23 million tons across 49 businesses.
Shoji Kusumoto, General Manager, Quality & Environment Division, Panasonic Operational Excellence Co., explained: “Our CONTRIBUTION IMPACT expanded during FY2023. This is the result of the PGI concept having penetrated and taken root among our operating companies and of the growing momentum behind our drive to actively contribute to society through our businesses. The products and services that are contributing to avoided emissions continue to expand in terms of both number and product category.”
What key products and services are contributing to avoided emissions?
Currently, the company’s CONTRIBUTION IMPACT is mostly in “Lifestyle” businesses, which include air conditioners and lighting, and the “Energy” business, which includes EV rechargeable batteries, accounting for about 50% of Group sales. Panasonic’s CONTRIBUTION IMPACT is further classified into three main business categories: Electrification, Replacements, and Solutions.
The “Electrification” category refers to conversion of fossil-fuel based products and services into more energy-efficient products/services and includes cylindrical rechargeable batteries for EVs and Hot-Water and Heating Systems (A2W). Between FY2021 and FY2023, the CONTRIBUTION IMPACT from this category grew from 9.70 million tons to 17.79 million tons across four businesses.
The “Replacements” category includes products that have reached the end of their useful lives and have been replaced with newer products offering improved energy-saving performance. This category includes, for example, more energy efficient household refrigerators and household air conditioners.
The “Solutions” category includes products and services with improved functions that reduce the amount of emissions generated during use. Products in this category include heat exchange systems, ceiling fans, and both building energy management systems (BEMS) and home energy management systems (HEMS).
Noted Kusumoto, “Our Electrification category has made significant progress, and the Replacements category is maintaining its momentum. We also see plenty of room to increase transparency and disclosure of avoided emissions in other categories as well.”
What are the key challenges for Panasonic in terms of promoting recognition of avoided emissions?
Today, the concept of avoided emissions is not universally recognized, and no uniform standard for avoided emissions has been established. Panasonic believes that it is important for companies and financial institutions who share the same goals to work together to strengthen recognition of avoided emissions and their significance as “a standard measurement” for evaluating a company’s contribution to decarbonization efforts.
To this end, Panasonic is driving discussions on avoided emissions together with other companies, financial institutions, international standards organizations, and government bodies to create an environment in which a company’s contribution to decarbonization can be evaluated transparently and appropriately on the basis of a universal standard.
For example, Panasonic Holdings Corporation has been taking part in the global rule-making effort led by the World Business Council for Sustainable Development (WBCSD) and other leading global companies, academics, and technical experts. As one of the key milestones of this effort, in March 2023, the WBCSD developed and published its “Guidance on Avoided Emissions,” with key guidance about making credible avoided emissions claims.
Panasonic Holdings Corporation is also among the six leading companies participating in the GX League, a 73-member forum for dialog between business, government, and academia that seeks to leverage Japan’s goal of achieving carbon neutrality by 2050 to promote economic growth. The GX Business Working Group (GXBWG) was established to promote rule-making activities to create new business opportunities for Green Transformation, and in March 2023, GXBWG published its “Guidance on Avoided Emissions,” which summarizes the basic concepts for companies and financial institutions to use when disclosing and evaluating climate-related opportunities.
Applying the guidelines published by the WBCSD and GX League, Panasonic disclosed sample avoided emissions calculations for six key business areas in the latest Sustainability Data Book. (Refer to pages 15–20 in Sustainability Data Book 2023 for the sample calculations for key products/businesses)
In addition to our activities to advance standardization, Panasonic also took part in a number of international events during FY2023 to further promote the avoided emissions concept; these events included the Global Green Transformation Conference, International Capital Market Association (ICMA), 2022 United Nations Climate Change Conference COP 27, and Consumer Electronics Show (CES) 2023.
As a result of these efforts to deepen understanding of the significance of this concept, consensus was reached on the “importance of achieving decarbonization along with economic development by implementing the concept of Avoided Emissions” at the COP27 Japan Pavilion seminar held in November 2022. Finally, at the G7 Minister’s Meeting on Climate, Energy and Environment in Sapporo held in April 2023, G7 ministers agreed in a joint statement that “there is value in acknowledging avoided emissions.”
Commitment to Progress on Avoided Emissions
Panasonic continues to lead discussions on the social significance of avoided emissions and the importance of standardization with the aim of creating an environment in which every company’s contribution to decarbonization can be transparently and appropriately evaluated.
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