- Panasonic joins World Business Council for Sustainable Development (WBCSD)
- Participates in first international meeting for realization of green transformation (GX)
- Supports industry/academia/government efforts to standardize methodologies for measuring CO2 reduction contributions and introduce these standards worldwide
Global Effort to Measure Environmental Contribution and CO2 Emissions Reduction
Panasonic Group’s long-term environmental vision, “Panasonic GREEN IMPACT” demonstrates the company’s commitment to ACT to achieve a sustainable future. Under this vision, the group aims to reduce CO2 emissions from its operations to virtually net zero by 2030 and to create an impact that reduces CO2 emissions by more than 300 million tons1 by 2050, or about 1%2 of the current total global emissions.
Most people are familiar with Scope 1, 2 and 3 emissions—Scope 1 covers direct emissions from owned or controlled sources; Scope 2 refers to indirect emissions from the generation of purchased electricity, steam, heating and cooling used by a company; and Scope 3 covers all other indirect emissions that occur within a company’s value chain.
While the evaluation of environmental initiatives is being emphasized through CO2 measurements such as Scope 1-3, recent discussion has focused on “avoided emissions.” Avoided emissions are emission reductions that occur outside of a product’s lifecycle or value chain and are the result of the use of the product.
More specifically, avoided emissions are the difference between existing emissions (baseline) and reduced emissions. They can be achieved through energy-saving products and systems or the application of digital technologies (e.g., AI, IoT, etc.). Practical examples include a more energy-efficient appliance or replacement of an energy-intensive activity (commute to a workplace) with a digital alternative (teleconferencing).
Companies, governments and standards organizations can refer to well-established methodologies for assessing the outcomes of environmental initiatives undertaken in accordance with Scopes 1, 2 and 3. But when it comes to avoided emissions, more work needs to be done in terms of both standardizing the methodologies used to measure the impact of these activities and introducing these standards worldwide.
Global Green Transformation Conference 2022
As part of this effort to standardize the acknowledgement and evaluation of avoided emissions contributions, Panasonic announced on October 7, 2022 that it had joined the World Business Council for Sustainable Development (WBCSD; headquarters: Geneva, Switzerland). WBCSD conducts research and advocacy on economic, environmental and social issues with the aim of realizing a sustainable future. The WBCSD and other corporate CEO coalitions are actively working together to encourage companies to contribute to the transition to a sustainable society.
The same day, Panasonic took part in the Global Green Transformation Conference 2022 (GGX 2022). Hosted by Japan’s Ministry of Economy, Trade and Industry (METI) and held in Tokyo, GGX 2022 was the first international meeting for the realization of green transformation (GX). Panasonic delivered a keynote presentation during the Panel Discussion on Standards and Evaluations for Promoting Green Products/Services.
Representing Panasonic Holdings Corporation at the GGX 2022 panel discussion was Tatsuo Ogawa, Chief Technology Officer & Executive Officer. Joining Ogawa were Peter Bakker (president and CEO, WBCSD), Xavier Denoly (senior vice president of sustainability development, strategy & sustainability, Schneider Electric), Reiko Hayashi (director and deputy president, BofA Securities Japan Co., Ltd.) and Shinichi Kihara (deputy director-general for technology and environment, METI). The discussion was moderated by Prof. Jun Arima of The University of Tokyo Graduate School of Public Policy.
The following three points summarize the discussion among Ogawa and the other panelists participating in GGX 2022 regarding the need for a unified approach to assessing avoided emissions:
- A universal, standard metric for measuring avoided emissions will promote investment by companies in products and systems that reduce CO2 emissions;
- Governments and capital markets will use the metric to compare the performance of companies and reward “good” companies for their reduction contribution; and
- A transparent methodology behind the metric will ensure that the assessment protocol is seen as credible by government and society
Looking at point number one, Panasonic, which ranks in the top three of the Nikkei BP ESG Brand Survey in 2022 (Japanese), announced in its GREEN IMPACT PLAN 2024 that it aims to increase the group’s CO2 reduction contribution to 38.3 million tons by FY2025. Avoided emissions will be critical to achieving this target, and when he took the stage at GGX, Panasonic CTO Tatsuo Ogawa clearly explained that avoided emissions are an opportunity—but that making the most of this opportunity will require a unified and credible methodology for measuring the reduction contribution to society.
He explained that while companies can measure reductions in CO2 emissions associated with their business activities, measuring a company’s contribution to society through its efforts to promote avoided emissions is currently quite difficult. This challenge is important to Panasonic because under the PGI, the group will seek to achieve a reduction impact of more than 300 million tons of CO2 emissions by 2050—300 million tons is equivalent to “about 1%” of total global CO2 emissions. Of this amount, 200 million tons will come from reduction contributions.
Turning to point number two, participants agreed that capital markets and government have still not figured out how to identify “good” companies—companies investing in avoided emissions strategies and generating positive outcomes—and reward them for their endeavor.
This is a critical point, because ongoing advances in technology and the application of AI, IoT and other digital solutions means that the CO2 emission reduction contribution of products and services will be significant. For example, Panasonic predicts that promotion and adoption of fuel cell systems, including pure hydrogen fuel cells and ENE-FARM, by FY2031 can yield an emission reduction contribution of 6 million tons—or 30 times the level of FY2021.
As for point number three, panelists agreed that setting clear rules for assessment and measurement is essential for avoiding claims of greenwashing.
Toward the Future
The International Electrotechnical Commission (IEC) is now moving ahead with IEC 63372, a draft international standard for GHG Avoided Emissions with the intention of publishing the final standard in 2024. Panasonic, together with a consortium of like-minded companies aiming to realize a decarbonized society, will continue to pursue cross-industry consensus on a unified decarbonization contribution protocol, global communication and rule formation, as well as promotion of products, systems, and services that increase its reduction contribution.
1 2019 energy-derived CO2 emissions: 33.6 billion tons (Source: IEA)
2 CO2 emission factor is based on the year 2020