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Theme 3 : Growing with Society

Our Suppot for Midori-kai member companies(Environment)

Environmental Impact of Suppliers

Our Suppot for Midori-kai member companies(Environment)

1. Green Procurement Guidelines

Komatsu established the Komatsu Earth Environment Charter in 1992 and declared that they would engage in environmentally conscious business activities to realize a sustainable society. However, social demand for the reduction of environmental burdens and responses to climate change is increasing. Considering this background, Komatsu has established and released the Green Procurement Guidelines, which supplement the environment-related issues described in the CSR Procurement Guidelines. By using these guidelines, we preferentially promote green procurement, which is conscious about the environment, and of the raw materials and procured components/parts, which are important elements in our production. It also prompts business partners to develop their own environmental management activities.

 

komatsu csr, env, Procurement Division

2. Support for Those Obtaining Environmental Management Certifications

We have requested all member companies of the Midori-kai in Japan and China to obtain certifications for environmental management systems (EMS), such as ISO14001 and Eco-Stage, and provided them with instructions and support for obtaining the certifications. In Japan, all 156 member companies have obtained the certifications, and we began to check the renewal status of the certifications in 2018. In China, 58 out of the 59 applicable companies have already obtained the certifications, and we expect that all the companies will obtain them by the end of FY2021. We encourage suppliers in U.S., Europe and the Midori-kai Thailand that are among our 352 level-3 critical suppliers to obtain similar certifications, aiming to ensure that 86% of these suppliers (including all manufacturers and excluding trade companies) have been certified by the end of FY2022.

Over ten years have already passed since the Midori-kai members in Japan obtained the certifications. Like in the case of the safety and health activities, it is important to follow-up the status of the certifications in each company's business activities. To realize this, we will start environmental audits, which we have conducted internally, mainly for the outsourcing companies of the Midori-kai from 2020. Through written surveys on compliance with environment-related laws and regulations, etc. and on-site inspections at each company's offices, we will inspect how EMS has taken root on site and link the results to our support for their improvement in the future.

Environmental audits

Number of Midori-kai Member Companies with EMS Certifications 

Region Number of member companies Number of companies which have obtained certification Percentage of companies with certification
FY2017 FY2018 FY2019 FY2020 Progress Target
Japan

156

156

156 156 156

100%

100%
China

59

53

55 57 58

97%

Thailand 31 - - - 16

52%

North America

44

19 19 19 19

43%

86%
Europe

39

29

29 32 35

82%

Total 329 257 259 264 284 86%  
komatsu csr, env, Procurement Division

3. Responding to Climate Change: Greenhouse Gas Reduction in the Supply Chain

In 2012, as a solution to tight power supply/demand and the steep increase in electricity costs following the Great East Japan Earthquake, we began to roll out activities to reduce the power consumption of 96 Midori-kai members in Japan by setting a target reduction in electricity consumption of at least 15% compared to 2010. This target was achieved in FY2016, with an average reduction of 20%. As a result of the expansion of these activities thoroughly across all our suppliers, some suppliers have won the ECCJ Energy Conservation Grand Prize Award. Since 2017, despite large fluctuations in the amount of production, we have worked to maintain and improve the reduction level through independent improvements at each company. In the second half of FY2019, we also set a target of reducing greenhouse gas emissions from all kinds of energy, including heavy oil, gas and electric power, by 15% (by the end of FY2024, compared to 2010). As a first step, we conducted a fact-finding survey of ten casting and forging companies and heat treatment companies which emit large amounts of greenhouse gases, and began to provide them with information about the improvements that we had actually made. While providing concrete support to help these 10 companies to improve, we will also request that the 201 suppliers that fall under our Critical Suppliers-Level 2 set self-reduction targets in sequence and take tangible measures to reach those goals.

Changes in electric power consumption(Midori-kai 93 companies)

Independent Practitioner's Assurancecheckmark

Changes in electric power consumption(Midori-kai 93 companies)
 

Change in CO2 emissions(Midori-kai 93 companies)

Independent Practitioner's Assurancecheckmark

Change in CO<sub>2</sub> emissions(Midori-kai 93 companies)
 

Status of setting of targets for the reduction of GHG emissions (156 companies in the Midori-kai)

  Already set Not set/not answered yet
Short-term target

98

58

Medium- and long-term target

32

124

Results of activities in Japan for reducing power consumption from 2012 to 2016 (reduction of electric power consumption rate calculated against the 2010 base unit)

Results of activities in Japan for reducing power consumption from 2012 to 2016 (reduction of electric power consumption rate calculated against the 2010 base unit)
komatsu csr, env, Procurement Division

4. Addressing Water Risks

We are inspecting 135 offices of 96 Midori-kai members in Japan to understand their general water risks, including the above-mentioned heavy rain and tsunami risks, locations, potential and actual water intake/discharge capacities, water quality, and how they address these issues. We also use Aqueduct in these analyses. 
In response to these investigations, we have been conducting activities to reduce water consumption since FY2017. In these activities, the top ten companies in the consumption of clean water are considered to be model companies and we present Komatsu improvement examples and provide guidance on improvement through on-site visits, with a target of 15% reduction of water consumption by FY2021. In FY2018, the target was achieved. Since then, we have voluntarily stayed aware of the amount of water used and have extended the activities to other Midori-kai companies through the distribution of improvement examples from Komatsu and ten other companies.

On-site investigation of water risks

Changes in clean water usage by the top 10 Midori-kai companies

komatsu csr, env, Procurement Division

5. Responding to Environmental Regulations in China

An example of measures to meet regulations in China (Daikyo Machinery Shandong Co., Ltd.: Installation of a welding fume dust collector and exhaust air ducts)

The basic goal of the environmental regulations in China is the elimination of three things: exhaust gases, discharged water, and solid waste. However, when operating under those regulations, the regulations and standards set forth by each local government have priority. Regarding discharged water from plants, to address the aggravated water pollution in rivers and lakes, the standards for BOD/COD (Biochemical Oxygen Demand/Chemical Oxygen Demand), which are indexes of amounts of organic substances in discharged water, are especially strict when compared to the country-wide standards in Japan, and there is an increasing number of cases where centralized water treatment systems for discharged water, etc. need to be installed.
Komatsu checks the regulatory compliance status of the Midori-kai members in China on a regular basis.

In addition, in China, extremely tough environmental regulations were imposed in 2015, mainly in the coastal areas, aiming to improve air pollution issues (PM2.5) drastically. As a result, companies engaging in businesses such as painting, welding, casting and plating are required to take thorough measures to reduce exhaust air, smoke and soot (including VOCs). Working together with member companies of the Midori-kai in China, we provide support for complying with the regulations, including the installation of facilities. As a result of measures taken by the companies, 14 companies had been certified as exempt from the regulations (as green companies) as of March 31, 2019. We will continue to work with each company to reduce risks to our business continuity.
 

komatsu csr, env, Procurement Division

えー24_Our Suppot for Midori-kai member companies(Environment)_Biodiversity

6. Dealing with Biodiversity

Cherry tree planting activity in China (Jining, Shandong Province)

In 2011, Komatsu established “the Declaration of Biodiversity by Komatsu”, a declaration that we will work for the reduction of environmental impact through our business activities and for the conservation of biodiversity through our social contribution activities. Receiving support for our policies from Midori-kai members in Japan and other countries, we are conducting community contribution activities in cooperation with them, such as environmental conservation. We also encourage the companies to implement their own unique efforts in accordance with their own unique situations and geographical locations.

Support for construction and environmental conservation of the Yusen-ji copper mine in Komatsu, Ishikawa prefecture

Progress of Construction at the Yusenji Copper Mine Site
komatsu csr, env, Procurement Division