Environmental Management(Eco-Management)

DENSO’s Companywide Safety, Health, and Environment Committee, chaired by the executive vice president, representative member of the Board and attended by senior management, presidents of overseas regional headquarters, and persons responsible for environmental management at Group companies, meets twice a year. The committee formulates policies, examines the state of progress in related activities, and discusses specific issues and their solutions.

DENSO has established the Energy Subcommittee, the Logistics Subcommittee, the Clean Products Subcommittee, and the Production Environment Subcommittee, which serve under the Companywide Safety, Health, and Environment Committee. These subcommittees are involved in formulating policies for addressing and responding to issues in each business field. At the same time, these subcommittees collaborate with all relevant divisions to promote efforts on a Companywide basis.

The DENSO Group shares environmental policies and guidelines with consolidated environmental management companies expand consolidated environmental management practices.

To steadily move forward with environmental initiatives on a global scale, we are promoting a global structure that centers on six regions: Japan, North America, Europe, Greater Asia, China, and South America. In addition, we have appointed environmental managers at all regional headquarters. Furthermore, we hold meetings of the Global Safety and Environment Committee every year, where we confirm the progress of Eco Vision 2025 and work to resolve any issues. Also, each Group company formulates yearly plans and promotes activities aimed at reaching the targets of Eco Vision 2025. As an effort to check and take action in terms of environmental management on a consolidated basis, we carry out an environmental evaluation of each Group company, both in Japan and overseas. This evaluation aims to enhance the level of environmental management on a local basis by confirming the status of these companies’ efforts to respond to environmental risks and reduce environmental burden (CO₂ emissions, waste production, etc.), as well as their activities that contribute to the environment and society as a whole.

DENSO has acquired ISO 14001 certification, which is an international standard for environmental management systems, at all of its 69 production companies in Japan and overseas, and it works to maintain and update this certification. As a result, 98.6% of all 70 of DENSO’s environmental management sites have acquired ISO 14001 certification. Moreover, one company that has not yet acquired ISO 14001 certification has obtained certification of an alternative system.

In 2016, we completed early transition to the fiscal 2016 version of ISO 14001. In addition, with the aim of strengthening control and improving efficiency, we combined the environmental management systems at our facilities in Japan into a single system in fiscal 2011, for which integrated certification was obtained. Also, in fiscal 2021 we commenced unified certification with domestic Group companies. Since fiscal 2024, we have been pushing ahead with efforts to acquire unified certification at our offices in China.

Going forward, we will further expand the scope of our unified certification on a global basis and step up our efforts to maintain and improve certifications based on the integrated management system.

We have established DENSO Safety, Health and Environmental Standards (DAS) that extend beyond the environmental regulations of the countries and regions in which we operate and apply them to environmental management both in Japan and overseas. We have identified environmental risks, which include environmental accidents, pollution, and violations of applicable laws, based on the location and business scope of each of our plants. This information is used to prevent and minimize risk.

In particular, we reconfirm compliance with laws and regulations related to wastewater and gas emissions in excess of voluntary criteria, leaks of oils and chemical substances, pollution of soil and groundwater, noise and bad odors, and waste disposal and recycling. At the same time, we have reformulated operating and management regulations for industrial specialty gases (specified high-pressure gases and semiconductor gases), chemical substances, and chemicals, and are working to prevent accidents affecting employees and the region.

Regarding complaints from surrounding areas, we strive to prevent any abnormalities, and in the event that an abnormality occurs, we make every effort to minimize the impact and accurately disclose information. Further, we conduct annual emergency response drills in addition to maintaining daily inspection, monitoring, and measurements.

Also, in fiscal 2024, there were no major infractions or lawsuits pertaining to environment-related laws.

DENSO procures materials and components from various suppliers that are active in a wide range of fields. Based on our previously established, globally shared Green Procurement Guideline, we have worked with our suppliers to promote environmental initiatives. These initiatives have helped reduce the environmental burden throughout the entire life cycle of our products. They have also promoted the effective use of resources and energy across the entire Group.

Since fiscal 2018, we have carried out an annual self-assessment to confirm the amount of CO2 reduction in our supply chain and identify water-related risks.

To minimize significant health and environmental risks that stem from manufacturing and using chemicals, regulations related to chemicals have become more stringent in each country around the world. Examples of this include Japan’s Act on the Evaluation of Chemical Substances and Regulation of Their Manufacture, etc.,^*1 Europe’s End-of-Life Vehicles Directive,^*2 and Registration, Evaluation, Authorization and Restriction of Chemicals.^*3 To respond to such regulations, DENSO has been collaborating with its suppliers to establish and operate frameworks for managing chemical substances.

DENSO has added the perspective of carbon neutrality to its CO₂ reduction plans under Eco Vision 2025 and is promoting initiatives in three key areas:

For our Monozukuri activities, we have adopted the target of realizing carbon-neutral electricity by fiscal 2026 (carbon credits to be used with respect to gas) and becoming completely carbon neutral, including gas, by fiscal 2036. To achieve this target, we will continue to promote energy-saving activities, an area in which we excel as a company. At the same time, we will introduce electricity derived from high-quality renewable energy that is optimally economic and utilize carbon credits, among other initiatives. To accelerate investments toward these kinds of efforts to reduce CO₂ emissions, including energy conservation and renewable energy, we have introduced internal carbon pricing (ICP) within our investment decision-making approach.

For mobility products, we are working to reduce CO₂ emissions to the greatest extent possible by promoting the development of electrification technologies. Furthermore, we are working to achieve negative CO₂ emissions through technologies that create green energy using hydrogen. Through these efforts, we will aim to achieve carbon neutrality across all of society. Moreover, to balance these environmental initiatives with business growth, we are holding regular discussions on reshuffling our business portfolio based not only on profitability and growth potential but also on CO₂ emissions and the reduction of these emissions and are promoting reshuffling efforts accordingly.

Climate Change-related Targets
(CO₂ Emissions Reduction) (Benchmark year: Fiscal 2021)

In 2021, with a view to achieving carbon neutrality at our plants, we began to introduce ICP into our business viability assessments to serve as an indicator for investment decisions. The introduction of this system is aimed at accelerating capital investment in energy conservation and renewable energy power generation by theoretically converting CO₂ emissions into profit or loss and factoring this into business viability assessments when considering capital investments that involve an increase or decrease in CO₂ emissions.
ICP is set by region and updated annually, after comprehensively taking into account carbon taxes, the prices of certified emissions reductions, and other market prices in addition to the Company’s future CO₂ reduction targets.

We will help reduce CO₂ emissions from vehicle use by developing products and systems that support the popularization of HEVs, BEVs, FCEVs, and other xEVs. In addition, we will apply the electrification technologies cultivated in the automotive industry to the field of air mobility in an effort to significantly reduce CO₂ emissions.

We will establish technologies that use energy in a highly efficient manner, regardless of location or time, and work to popularize them on a global basis. By doing so, we will help realize an energy-recycling society.
For example, we have commenced verification tests for SOFCs,*¹ which create electricity from hydrogen, and SOECs,*² which produce hydrogen from electricity, by utilizing the heat management and material technologies that we have cultivated in the automotive field. Through these kinds of verification tests, we will pursue the efficiency of fully utilizing green hydrogen energy and the durability of being able to safely use energy systems over long periods of time. By doing so, we will take on the challenges of development aimed at balancing environmental sustainability and economic viability.*³

*1 SOFCs: Solid oxide fuel cells
*2 SOECs: Solid oxide electrolysis cells
*3 This initiative is being supported by the Development of Technologies for Realizing a Hydrogen Society project, sponsored by the New Energy and Industrial Technology Development Organization (NEDO)

We view the “resolution of social issues through our business” as the bedrock of our management, and we believe that contributing to carbon neutrality will lead to ongoing improvements in our competitiveness. In fiscal 2022, we introduced a mechanism to periodically reorganize our business portfolio.
CO₂ emissions, profitability, and growth potential of each of DENSO’s business fields are visualized, and the positioning and future direction of each product range is discussed at the Strategy Deliberation Meeting, which is attended by all senior executive officers.
Using this mechanism, we have made decisions on whether to downsize or withdraw from the internal combustion business, promoted a shift in resources to electric vehicle products, and have begun to transition to new businesses such as those that utilize renewable energy.

DENSO is a member of the Japan Auto Parts Industries Association (JAPIA) and the Japan Business Federation (Keidanren). As a member of these organizations, DENSO takes part in the decision-making process in various advisory councils.
Both JAPIA and Keidanren recognize climate change as a serious issue and have therefore endorsed the goals of the Paris Agreement and the efforts by the Japanese government to achieve carbon neutrality. DENSO supports the direction toward which the international society, the Japanese government, and industrial organizations are heading in this regard. At the same time, we have incorporated carbon neutrality as a goal of our Green Strategy and are promoting the transition to electrification from the perspectives of automotive components and systems. Furthermore, we aim to achieve carbon neutrality in the manufacturing process, striving toward decarbonization in every stage of the process. We have also commenced verification tests for applying the thermal management and material technologies cultivated through our experience with automobiles to SOFCs, which create electricity from hydrogen, and SOECs, which produce hydrogen from electricity. Through these efforts, we strive to reduce not only our CO₂ emissions but also emissions across all of society, thereby contributing to the realization of a carbon-neutral society.
At JAPIA, in particular, one of our senior executive officers serves as the chair of the environmental committee, playing a central role in promoting carbon neutrality within the industry. For example, we actively support the realization of carbon neutrality across the entire automotive components industry through such efforts as holding study sessions and surveys for organization members and creating and sharing guidelines for promoting initiatives geared toward carbon neutrality. At the same time, we are collaborating with the Japanese government and other industrial organizations to proactively promote carbon-neutral activities from a broad range of perspectives. These activities include holding scientific discussions and providing recommendations on measures to combat climate change together with organizations in other industries such as the Japan Automobile Manufacturers Association and working with such organizations to promote verification tests and hold exhibits.

To realize the carbon-neutral targets that we have established, it is essential that we gain the cooperation of our stakeholders, such as our customers and suppliers, who underpin DENSO’s business activities. Also, by introducing our approach to carbon neutrality and examples of relevant initiatives to a broad range of stakeholders, we believe we can contribute to carbon neutrality across all of society, not just within the framework of DENSO itself.
To that end, we are creating opportunities for dialogue with our stakeholders regarding our carbon-neutral initiatives in such ways as organizing briefing sessions for suppliers to explain our carbon-neutral policies and opening a showroom aimed at co-creating new ideas by sharing examples of our energy-saving initiatives.