Strategy

Honda's Sustainability

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’ behavior and decision-making.

In order to achieve both the creation of growth opportunities for the Company and a sustainable society, 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 both meet stakeholders’ expectations and needs by providing products and services of value, fulfill its corporate social responsibility such as by considering the impact on the environment and society, as well as 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.

Honda's Sustainability

Roadmap for Sustainable Growth

Honda is facing numerous social issues that have been much discussed, including poverty and refugee problems, human rights issues, climate change, energy problems, improving occupational health and safety, and the aging of society. Within this context, for Honda, which undertakes a diverse range of businesses globally, understanding its opportunities and responsibilities in the value chain will also be essential for identifying priority issues in management. In addition, in order to swiftly respond to and overcome rapid changes in the business environment, it is necessary to set forth Honda’s future direction in the form of a vision.

The “2030 Vision” embodies an ideal image of what Honda wants to be in the year 2030 in order to continue being “a company that society wants to exist” in 2050, when the Company will have marked more than 100 years since its founding.

In formulating the Vision, Honda examined long-term environmental changes from two perspectives: forecasting, or looking ahead to the future from the present point in time, and backcasting, or looking back from 2050 to the present. As the Company continues operating existing businesses, how is it going to transform and evolve the value of existing businesses in accordance with the significantly changing expectations of society and the needs of Honda customers?

Moreover, how is Honda going to create unprecedented new value in motorcycle, automobile and power products businesses, as well as new areas beyond the framework of its existing businesses?

In order to formulate a vision that will enable the realization of sustainable growth over the long term, Honda has examined the direction of the transformation of its businesses toward 2030 from the three perspectives of “Current, Transformation and New.”

Roadmap for sustainable growth

roadmap

Materiality Matrix

Evaluation of Issues from the Stakeholders’ Perspective (Materiality Matrix) 

Toward achieving our long-term vision which is based on the Honda Philosophy, key issues to be addressed are organized from our perspective and from the viewpoint of our stakeholders. The materiality matrix provides the essential framework for organizing these issues. By creating and employing this matrix, we confirmed the coverage of overall issues and clarified where each of them is positioned.

The materiality matrix was prepared in two stages; identifying issues and then categorizing them according to their materiality. Issues were identified through dialogue among members of respective operating divisions within the Company and the process took into account various viewpoints including global and value chain perspectives, the status of technological innovation, Sustainable Development Goals (SDGs)*1 and social issues pursuant to the Paris Agreement. We evaluated the materiality of these issues in light of the views of stakeholders through dialogue with leading environmental, social and corporate governance (ESG) rating agencies and NGOs in Europe and the United States that focus on sustainability issues. The contents were also evaluated and assessed by management at the Company’s Sustainability Strategy Committee meetings and other occasions.

This resulted in the successful visualization of critical issues on a priority basis as a mobility company, including the realization of a carbon-free and collision-free mobile society. We believe our efforts should contribute to the achievement of certain SDGs, notably Goal 13 “Take urgent action to combat climate change and its impacts”; Goal 7 “Ensure access to affordable, reliable, sustainable and modern energy for all”; and Goal 3 “Ensure healthy lives and promote well-being for all at all ages.” Critical issues specified based on the views of stakeholders are being reflected in company-wide strategy and incorporated into respective business activities to achieve the Company's vision.

Materiality matrix

Materiality matrix

Sustainability Management Structure

Structure for Deliberating Sustainability Initiatives

 

Honda organized the Sustainability Strategy Committee, chaired by the Executive Vice President and COO, as a platform to discuss and assess policy and initiatives related to sustainability activities.
 Through this Committee, we identify the challenges in realizing the long-term vision of the Company, referring to the expectations and demands of key stakeholders recognized through dialogue, and deliberate on material issues at the management level, including verifying progress of response and implementation.
 From FY2018, it has been decided that sustainability issues are discussed in one committee in a more integrated manner, including environmental and safety-related domains that were discussed in a different committee until the previous fiscal year.
 Honda determines corporate strategies through the Executive Council and Board of Directors, taking into consideration the key challenges examined here. Then the Company breaks them down into policies and measures for business and functional operations and subsidiaries for actual execution.

Sustainability management structure from FY2018

 

sustainability management structure

Stakeholder Engagement

Basic Approach

To be a “company that society wants to exist,” Honda must appropriately and accurately convey to society the value that it seeks to offer. Together with this, Honda must put into practice a communication cycle in which it engages in dialogue with diverse stakeholders to grasp and understand the demands and expectations placed on the Company, translate these into concrete measures and implement them, and finally listen to stakeholders’ evaluations of its activities.

Especially in recent years, the growing scale and globalization of companies, along with the rapid proliferation of IT, have heightened the impact of companies on society, and vice-versa. As this process continues to accelerate, Honda considers that stakeholder dialogue is a beneficial tool that leads to a proper understanding of stakeholders regarding the Company’s initiatives while also giving the Company an understanding of changes and risks in the social environment.

Based on this understanding, the various divisions at Honda conduct dialogues globally through a variety of opportunities with the stakeholders engaged in Honda’s business, namely, those stakeholders shown in the diagram below that either are impacted by Honda’s business activities or whose activities impact Honda’s business activities.

In addition, opinions gained from leading ESG rating agencies and NGOs are reflected in the Materiality Matrix, which is utilized in identifying issues Honda ought to be addressing.

Stakeholder engagement

Stakeholder engagement

Cooperation with External Organizations

To carry out our responsibility as a global mobility company, Honda engages in dialogues with government, economic and industry organizations and also cooperates with external bodies. In Japan, Honda personnel serve as vice chairman, committee head and committee member within the Japan Automobile Manufacturers Association, president of the Society of Automotive Engineers of Japan, as well as vice president of the Tokyo Chamber of Commerce and Industry.

In addition, Honda personnel serve as technical committee chairs and other representatives in the international motorcycle and automobile industry bodies such as The International Motorcycle Manufacturers Association (IMMA) and Organisation
Internationale des Constructeurs d’Automobiles (OICA). Furthermore, Honda cooperates with initiatives related to sustainability through membership in the World Economic Forum (WEF) and the World Business Council for Sustainable Development (WBCSD).

At Honda, we delegate authority to regional operations within a certain scope when executing business in respective regions in order to enhance local autonomy and enable speedy decision-making. Political contributions are made following required internal procedures based on the laws and regulations of respective countries.

External Evaluations

Honda Selected to the Dow Jones Sustainability World Index

In September 2017, Honda was selected for the first time as a component of the Dow Jones Sustainability World Index after being ranked fifth in the global Automobiles sector in the annual review of the Dow Jones Sustainability Indices (DJSI), one of the key benchmarks for socially responsible investing. At the same time, the Company was selected for the third consecutive year as a component of the Dow Jones Sustainability Asia/Pacific Index.

The DJSI are investment indices run and offered cooperatively by U.S.-based S&P Dow Jones Indices and Switzerland-based RobecoSAM. The sustainability of the world’s leading companies are evaluated from three perspectives in terms of economic, environmental and social criteria and select companies that demonstrate overall excellence for inclusion in the indices.

Selected for the Third Straight Year with a Bronze Class Rating in the RobecoSAM Sustainability Index

Honda was selected for the third year running with a Bronze Class rating in the Automobiles sector of the Sustainability Award 2018 issued by Switzerland-based RobecoSAM. RobecoSAM evaluates sustainability of approximately 2,500 companies worldwide in terms of economic, environmental and social criteria. Companies deemed to be particularly outstanding in each sector are rated in categories of Gold Class, Silver Class and Bronze Class each year.

RobecoSAM

Securing an A- on the CDP Japan 500 Climate Change Report 2017

In October 2017, CDP released the results of a survey on climate change initiatives and reduction of GHG emissions for 5,000 major companies worldwide.

Honda received an A- rating, a score at the leadership level, in recognition of activities deemed to be best practices in environmental management in the CDP Japan 500 Climate Change Report 2017, one of those categories.

CDP is an international NPO that provides a global system for measuring, disclosing, managing and sharing important environmental information from companies and cities. Company initiatives in environmental challenges are evaluated in the four stages of information disclosure, awareness, management and leadership.

Research and Development

Innovation Management