This case study is based on the 2018 Sustainability Report by Honda published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Due to the extremely large volume of transportation that takes place throughout the manufacturing process at Honda, increasing efficiency, reducing environmental burden, compliance and risk management in logistics, are all critical issues for Honda. In order to reduce logistics emissions Honda took action to:
- identify global CO2 emissions
- expand modal shifts
- increase the ratio of longer carriers
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With this case study you will see:
- Which are the most important impacts (material issues) Honda has identified;
- How Honda proceeded with stakeholder engagement, and
- What actions were taken by Honda to reduce logistics emissions
What are the material issues the company has identified?
In its 2018 Sustainability Report Honda identified a range of material issues, such as responding to climate change and energy issues, reducing traffic fatalities, assuring outstanding product quality, respecting human rights. Among these, reducing logistics emissions stands out as a key material issue for Honda.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups Honda engages with:
|Stakeholder Group||Method of engagement|
|Customers||· Customer satisfaction surveys
· Enjoy Honda
|· Shareholder meeting and briefings for institutional investors|
|· Dialogues concerning local government policies and available technologies
· Feasibility studies
|Economic and Industry organisations||· Participation in councils|
|International organisations||· Participation in international initiatives
|NGOs||· Regular communication
· Response to surveys and questionnaires
|· Merchantability verification for products
· Co-development of technologies
|· Communication with journalists
· New model launch events
|Suppliers||· Supplier networking events
· Supplier risk assessments
|Dealers||· Dealer Conferences/briefings|
|· Plant tours
· Social activities by associates
|Associates||· Associate satisfaction surveys
· Dialogue between executives and associates
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Honda engaged in dialogue with leading environmental, social and corporate governance (ESG) rating agencies and NGOs in Europe and the United States.
In its 2018 Sustainability Report Honda reports that it took the following actions for reducing logistics emissions:
- Identifying global CO2 emissions
- Honda is working to improve transportation efficiency in the shipping of vehicles and equipment, parts shipped between plants, parts for services and repairs, and parts collected from suppliers. Additionally, in FY2017 Honda started managing CO2 emissions in the transportation of automobile production parts, which make up the majority of international marine transport. In FY2018, Honda continued its efforts to identify CO2 emissions for all products around the world, by steadily expanding the scope to other product domains.
- Expanding modal shifts
- Honda tries to expand its modal shift, i.e. switching means of transportation from trucks to ship and rail transportation, with a focus on transportation to distant regions. For example, in Vietnam, the distance between Honda’s production facility on the outskirts of Hanoi in the north and the major market of Ho Chi Minh City in the south is over 1,700 km. For this reason, Honda is replacing conventional trucks with ship and rail transport for long-distance shipments between north and south. As a result, Honda will achieve reductions in CO2 of 27% with rail transport and 65% with ship transport, compared with conventional truck transport. In addition, Honda is working to increase efficiency in each transport mode and is introducing, in rail transport, freight cars specially designed for shipping automobiles with high load efficiency.
- Increasing the ratio of longer carriers
- In India, Honda reduced CO2 emissions by approximately 6,226t per year by improving the transport efficiency of completed vehicles from its factory to dealers. Honda India implemented this initiative in collaboration with logistics service providers and dealers, in which longer carriers transport two or more dealers’ clubbed orders on the same route, if one dealer order is less than six cars. Previously, Honda India used small carriers with four car capacity for small quantity dealer orders.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standard addressed in this case is: Disclosure 302-2 Energy consumption outside of the organization
Disclosure 302-2 Energy consumption outside of the organization corresponds to:
- Sustainable Development Goal (SDG) 7: Ensure access to affordable, reliable, sustainable and modern energy for all
- Business theme: Energy efficiency, Renewable energy
- Sustainable Development Goal (SDG) 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
- Business theme: Energy efficiency
- Sustainable Development Goal (SDG) 12: Ensure sustainable consumption and production patterns
- Business theme: Energy efficiency, Transport
- Sustainable Development Goal (SDG) 13: Take urgent action to combat climate change and its impacts
- Business theme: Energy efficiency
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1) This case study is based on published information by Honda, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:
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