CSR / Environment

Climate Change

Relationship between Climate Change and Business

Climate-Related Risks and Opportunities

There are a number of efforts, including the Paris Agreement, underway to realize a carbon-free society. In 2017, the Task Force on Climate-related Financial Disclosures (TCFD) was established by the Financial Stability Board (FSB), an organization promoting international financial stability. The TCFD has released recommendations for disclosing information on the risks and opportunities of climate change for companies.

Sharp considers the risks and opportunities of climate change to be important managerial issues. It has established the Sharp Global SER Committee as a means of governance over risks and opportunities. This committee, comprising senior executives such as heads of Sharp in-house companies and business units, makes medium- and long-term assessments of risks and opportunities. In line with the risk items stipulated by the TCFD, Sharp tackles climate-related risks by classifying them into two: risks associated with shifting to a carbon-free economy, and the risks of the physical impacts of climate change. It also positions as opportunities the alleviation of climate change through the provision of products and services and works to take advantage of these opportunities.

Risks Associated with Shifting to a Carbon-Free Economy

Sharp has production bases in Japan, China, other parts of Asia, North America, and Europe. Under current regulation trends, there is a possibility of impacts from a carbon tax. Due to factors such as high interest in the climate change problem since the enactment of the Paris Agreement, there is a chance of an increase in taxes in Japan in the form of taxes to counter global warming. In Japan, Sharp's production bases account for about 75% of energy used by all Sharp domestic facilities, meaning there is a risk of a major impact. In response to this risk, Sharp is making production more efficient and energy-saving in order to minimize the burdens of cost. And because failure to comply with standards and regulations on product energy efficiency means a risk of losing sales opportunities, besides thorough compliance with existing standards and regulations, Sharp keeps abreast of changes in laws and whenever possible takes part in opportunities for policy making.

Risks of the Physical Impacts of Climate Change

There is a potential risk that the larger scale of natural disasters—bigger typhoons and heavier rainfall—resulting from climate change will affect Sharp production bases and suppliers. There is the risk that disaster-stricken production bases will experience operation stoppages and disruptions to employees' daily lives, and that suppliers will become unable to deliver goods, resulting in risk to business continuity. Sharp has several production bases in Southeast Asia that are susceptible to floods; flooding in 2011 in Thailand resulted in damage to factories such as those producing home appliances. Besides carrying out reinforcement work on buildings susceptible to flood damage, Sharp is taking measures such as ensuring it has multiple suppliers and creating a manual for what to do in case of natural disasters.

Climate-Related Opportunities

Sharp believes that working to alleviate climate change through business activities will bring the company new opportunities. One of the goals of SHARP Eco Vision 2050, the long-term environmental vision, is to create more clean energy than the total amount of energy consumed in Sharp's entire supply chain, which the company is progressing toward by expanding clean energy. Sharp is also aggressively developing environmentally conscious products, including ones with greater energy performance, as part of efforts to provide the world with highly efficient products and services.

Greenhouse Gas Emissions Based on the GHG Protocol Initiative

Sharp calculates greenhouse gas emissions based on the GHG Protocol*1 and then works to limit those emissions resulting from customer use of Sharp products and from Sharp's business activities, including those in the supply chain.

  • *1 The GHG Protocol is an international standard for calculating greenhouse gas (GHG) emissions. It was jointly established by the World Business Council for Sustainable Development (WBCSD), a coalition of the world's leading companies, and the World Resources Institute (WRI), a United States-based think tank.

Greenhouse Gas Emissions by Scope 1/2/3 Categories Based on the GHG Protocol Initiative (Fiscal 2018)

Category Emissions
(Thousand Tons CO2)
Notes
Scope 1
(direct GHG emissions from business activities)
265 Emissions from combustion of fuel, etc.
Scope 2
(indirect GHG emissions from energy usage in business activities)
812 Emissions from the use of electricity
Total of Scope 1 and Scope 2 1,077
Scope 3
(indirect GHG emissions from outside the scope of business activities)
1. Purchased goods and services 3,305 Emissions from the manufacture of materials procured for products in the 8 major categories*2 that the Sharp Group sold in the reporting year
2. Capital goods 152 Emissions from the construction, manufacture, and transportation of Sharp Group capital goods (such as equipment, machinery, buildings, facilities, and vehicles)
3. Fuel- and energy-related activities (not included in Scope 1 or 2) 99 Emissions from the procurement of fuels (natural resource extraction, manufacture, and transportation) consumed in the generation of electricity and heat the Sharp Group procures from other companies
4. Upstream transportation and distribution 200 Emissions from the transportation of Sharp Group parts and materials and products manufactured
5. Waste generated in operations 3 Emissions from waste disposal and treatment by the Sharp Group
6. Business travel 11 Emissions from business travel by all employees of Sharp Corporation
7. Employee commuting 11 Emissions from commuting by all employees of Sharp Corporation
8. Upstream leased assets Included in Scope 1 and 2 CO2 emissions
9. Downstream transportation and distribution 33 Emissions from the transportation (from retailers to end consumers) of products in the 8 major categories*2 that the Sharp Group sold in the reporting year
10. Processing of sold products 79 Emissions from processing at destination of Sharp Group products
11. Use of sold products 27,489 Emissions*3 from the use of products in the 8 major categories*2 that the Sharp Group sold in the reporting year
12. End-of-life treatment of sold products 3 Emissions from recycling 4 types of appliances*4 that Sharp Corporation sold in Japan
13. Downstream leased assets Not applicable
14. Franchises Not applicable
15. Investments Not applicable
Scope 3 total 31,385
Scope 1 + 2 + 3 total 32,462
  • *2 LCD TVs, air conditioners, refrigerators, washing machines, air purifiers, microwave ovens, copiers/MFPs, solar cells
  • *3 Annual power consumption of each product × number of units sold × product life × CO2 emission coefficient
  • *4 TVs (CRT TVs, flat-panel TVs), air conditioners, refrigerators/freezers, washing machines/dryers

Curbing Business Activity-Linked Greenhouse Gas Emissions

Fiscal 2018 Objectives Fiscal 2018 Achievements Self-Evaluation
  • Energy intensity: Improve by 20%
    (baseline year: fiscal 2012)
  • Improved by 17%
    (baseline year: fiscal 2012)
Priority Objectives for Fiscal 2019
  • Energy intensity: Improve by 20%
    (baseline year: fiscal 2012)
  • Self-evaluation: ★★★ Achieved more than targeted / ★★ Achieved as targeted / ★ Achieved to some extent

Sharp Group Activities to Control Greenhouse Gas Emissions

Sharp is taking active measures to curb greenhouse gas (GHG) emissions resulting from its business activities in an effort to contribute to the realization of a decarbonized society. The Sharp Group's GHG emissions in fiscal 2018 increased by 14.6% (up 1,077,000 tons CO2) compared to the previous fiscal year due to an expansion of the tabulation range resulting from the acquisition of a subsidiary. The improvement rate of energy intensity was 17%, compared to the baseline year of fiscal 2012.

Each Sharp production base is strengthening efforts involving all equipment and systems—ranging from production lines to utility systems for supplying electricity, gas, and water—to boost energy efficiency and reduce GHG emissions. In particular, at the LCD and electronic component plants, the production, engineering, and environmental departments work together to reduce consumption of base-load energy. Efforts include installing inverters*1 and optimizing the air conditioning in clean rooms*2. Going forward, Sharp will pursue further energy-saving measures and boost production efficiency in line with its business expansion.

  • *1 A device to control the number of motor rotations.
  • *2 A room where the temperature, humidity, and cleanliness are kept at controlled levels.

Amount of GHG Emissions

Energy Intensity (Baseline Year: Fiscal 2012)

  • *3 HFCs, PFCs, sulfur hexafluoride (SF6), nitrogen trifluoride (NF3)

GHG Emissions by Region (Fiscal 2018)

Case Study

Kameyama Plant Wins ECCJ Chairman's Prize for Energy-Saving Activities at 2018 Energy Conservation Grand Prize

The Kameyama Plant (Kameyama, Mie Prefecture) was awarded the ECCJ Chairman's Prize in the Energy-Saving Initiatives category at Japan's 2018 Energy Conservation Grand Prize program for its energy conservation activities centered on outdoor-air processing units. Organized by the Energy Conservation Center, Japan (ECCJ) and supported by the Ministry of Economy, Trade and Industry (METI), this awards program is intended to contribute to the spread of energy conservation thinking in society and to spur the diffusion of energy-saving products. Awards are given to products and business models that excel in energy conservation.

As a result of energy savings promoted across the organization through the unified efforts of the production technology department and the environmental department, the Kameyama Plant achieved a reduction in energy consumption equivalent to 5,485 kiloliters of crude oil a year. It also attained an energy reduction of 7.2% across the entire plant through some 194 measures of various kinds over a three-year period.

This is the second award for the Kameyama Plant after it received the METI Minister's Prize in the same category at the 2014 Energy Conservation Grand Prize.

Main Measures Related to Outdoor-Air Processing Units

  • Installation of inverters
    Inverters were installed in the outdoor-air processing units. This ameliorated pressure loss of the airflow-adjusting dampers, thereby reducing electricity consumption.
  • Increased amount of heat recovery
    More heat was recovered by channeling heat during winter months and from heavy-thermal-load systems to cold water coils, thereby reducing the burden of water heating/cooling.
  • Improvements to pressure loss
    Pressure loss was ameliorated by increasing the number of outside-air processing units and reducing the airflow of each unit, thereby reducing electricity consumption.
  • Reuse of water screen/dehumidifier condensate water
    Water screen/dehumidifier condensate water drained from the outside-air processing units was reused, thereby reducing the burden of water cooling and the amount of water used overall.

Award certificate and trophy

Utilizing Renewable Energy

Sharp has introduced PV systems to its domestic and overseas production bases and is advancing the use of renewables to do its part to create a decarbonized society. In fiscal 2018, Sharp generated 9.04 million kilowatt-hours of electricity. This is equivalent to the annual energy consumption amount*1 of roughly 3,000 average households in Japan. Sharp will continue to work hard at reducing carbon emissions even further in the future.

  • *1 Calculated from data from the Federation of Electric Power Companies of Japan

Solar power systems installed on the roofs of Sharp production bases (left: Kameyama Plant; right: NSEC in China)

Identifying and Reducing Environmental Impacts throughout the Life of Products

Sharp performs a life cycle*2 assessment (LCA) on its products to identify their impact on the environment throughout their service life. Converting this impact into CO2 emissions provides a quantitative measure that Sharp uses in its efforts to reduce environmental impacts.

For example, LCD TVs and other consumer electronics have a large impact during use. Thus, by focusing on improving their energy savings, overall environmental impact can be effectively reduced.

LCA Data for LCD TVs

  • *2 The life of a product from materials and parts procurement to manufacture, distribution, use, disposal, and recycling.
  • *3 CO2 emissions during use are calculated using a CO2 emission coefficient (adjusted) announced by Japan's Electric Power Council for a Low Carbon Society (ELCS).
Case Study

Sharp's Smart Storage Battery System Wins ECCJ Chairman's Prize at 2018 Energy Conservation Grand Prize

Sharp's Smart Storage Battery System (JH-FBCC01/JH-FBCC02/JH-FBCC03) was awarded the ECCJ Chairman's Prize in the Products and Business Model category at Japan's 2018 Energy Conservation Grand Prize program. Organized by the Energy Conservation Center, Japan (ECCJ) and supported by the Ministry of Economy, Trade and Industry (METI), this awards program is intended to contribute to the spread of energy conservation thinking in society and to spur the diffusion of energy-saving products. Awards are given to products and business models that excel in energy conservation.

The Smart Storage Battery System is installed in factories, office buildings, and commercial stores, where it carefully controls the charge and discharge of electricity from the storage battery in response to usage conditions. Normally, facilities that use a high volume of electricity enter into high-voltage service contracts*1 with electric utilities, and their base fees are set*2 based on the maximum usage amount (peak demand*3) for the previous year. This system was awarded the prize for its ability to discharge electricity from the storage battery when electricity consumption rises, thereby controlling peak demand and helping to reduce base fees. It was also highly praised for its ability to minimize conversion loss by sending the direct current generated by the PV cells straight to the storage battery without going through a transformer, like an inverter or converter.

  • *1 A contract to receive power supply at a voltage of 6,000 V or more (voltage during transmission varies by electric utility).
  • *2 May differ depending on electric utility and service contract details.
  • *3 Of the average electricity consumption for every 30 minutes, the highest value for a month.

JH-FBCC02 Smart Storage Battery System
Left: Storage battery; Center: Hybrid power conditioner; Right: Electricity meter

Case Study

Vietnam's First*1 Mega Solar Power Plant Starts Operation

On September 2018, the first mega solar power plant in Vietnam began commercial operation in Thua Thien Hue Province. This plant was a joint construction project involving Sharp Energy Solutions Corporation (SESJ)*2, the Thanh Thanh Cong Group (TTC Group)*3, and the Gia Lai Electricity Joint Stock Company*4 operating under the umbrella of the TTC Group. A completion ceremony was held at the site on October 2018. The ceremony was attended by officials from the Industry and Trade Ministry, officials from the Home Affairs Ministry, and others.

The new plant has an output of approximately 48 MW-dc. This is equivalent to the amount consumed in a year*5 by 32,628 average Vietnamese households. Under a joint project with the TTC Group and others, Sharp also constructed two other solar power plants in Vietnam: one in Binh Thuan Province and one in Long An Province. Each of these plants have a capacity of approximately 49 MW-dc and began operating in May 2019. Sharp remains committed to spreading renewable energy in Vietnam.

  • *1 As of October 10, 2018; based on Sharp research.
  • *2 SESJ is a subsidiary of Sharp Corporation, specializing in energy solutions such as the sales of PV systems and the installation of electrical equipment.
  • *3 The TTC Group is a conglomerate that operates in various sectors, including real estate, energy, agriculture, and education.
  • *4 Gia Lai Electricity plays a key role in the TTC Group's renewable energy business, including photovoltaic, hydropower, and wind power.
  • *5 Calculated at 1,887 kWh per household per year.

Operating solar power plant

Reducing Logistics-Related Environmental Impact

Fiscal 2018 Objectives Fiscal 2018 Achievements Self-Evaluation
  • Energy intensity:
    Improve by average of 1% each year (average for fiscal 2014 to 2018)
  • Energy intensity:
    Improved by average of 3% each year (average for fiscal 2014 to 2018)
★★★
Priority Objectives for Fiscal 2019
  • Energy intensity:
    Improve by average of 1% each year (average for fiscal 2015 to 2019)
  • Self-evaluation: ★★★ Achieved more than targeted / ★★ Achieved as targeted / ★ Achieved to some extent

Reducing the Environmental Impact of Logistics in Japan

Sharp observes a rule set forth in the Japanese Act on the Rational Use of Energy (Energy Conservation Act) that requires specified shippers to reduce energy intensity by 1% or greater per year. All Sharp Group companies in Japan are working to reduce the environmental impact and costs associated with logistics.

In fiscal 2018, Sharp Group greenhouse gas (GHG) emissions from shipping activities in Japan were 19 thousand tons (an increase of 16% from the previous fiscal year). However, for Sharp Corporation, energy intensity was improved by an average of 3% for the most recent five years (fiscal 2014 to 2018).

Sharp is steadily implementing a modal shift*1, a change from conventional trucking to more environmentally friendly modes of transport, such as shipping (non-international coastal trading vessels) and rail (Japan Railways containers). And, by unloading imported goods at harbors chosen for their proximity to their main sales locations, Sharp is reducing re-transport between distribution centers. These efforts enable Sharp to reduce the environmental impact of its distribution activities. For shipments, Sharp has been certified with an Eco Rail Mark*2 by the Ministry of Land, Infrastructure, Transport, and Tourism and the Railway Freight Association.

  • *1 To shift freight transport from conventional trucking to more environmentally friendly modes of transport, such as rail and shipping.
  • *2 Products or companies that use a certain amount of rail transport for freight are given Eco Rail Mark certification. The mark is used on items such as product packaging and brochures to inform the public that a company uses environmentally friendly modes of transport.

GHG Emissions from Freight Shipments (Japan)

Eco Rail Mark certification

Reducing the Environmental Impact of International Logistics

Sharp has a wide range of initiatives to reduce the amount of GHGs that are emitted as a result of international shipping. The company is reducing airfreight volume as it switches to environmentally friendly modes of transport, and it is also improving load efficiency. Further, it is reviewing shipping routes and switching to harbors that are closer to the final destinations for products. Sharp is also switching to suppliers located closer to its factories. In fiscal 2018, Sharp's GHG emissions from international transport were 157 thousand tons, a decrease of 16% from the previous fiscal year.