LIXIL makes pioneering water and housing products that solve everyday, real-life challenges, making better homes a reality for everyone, everywhere.
Progress in FYE2023
The 2015 Paris Agreement seeks to keep the rise in global average temperature well below 2°C above pre-industrial levels, and aims to limit that rise to 1.5°C. To achieve this, the world must reduce CO2 and other greenhouse gas emissions to net-zero by 2050. Buildings account for about 28% of the world's energy-related CO2 emissions, with residential sections alone accounting for 17%.*1
Due to the increase in global population, total household use of water has increased six-fold since 1960.*2 By 2050, more than 40% of global population is likely to experience water stress.*3 Indeed, in 2022, 2.2 billion people did not have access to safely managed drinking water.*4*5
Furthermore, global resource consumption is expected to more than double by 2050.*6 To help change this situation, the world is gradually shifting from a one-way economy, which mines resources, makes products in large quantities, and eventually discards them, to a circular economy that closes resource loops.
In order to realize LIXIL’s Purpose of “making better homes a reality for everyone, everywhere,” we have determined Water Conservation & Environmental Sustainability as one of the three pillars of our Impact Strategy and positioned the following six areas as priority material issues.
Climate Change Mitigation and Adaptation
Environmental Impact of Product Lifecycle
Conservation of Biodiversity
The LIXIL Environmental Vision 2050, which was compiled in FYE2020, declared a commitment to Zero Carbon and Circular Living and stipulated Climate Change Mitigation and Adaptation, Water Sustainability, and Circular Economy in the above material issues as focus areas for realizing the vision. As a springboard for promoting these focus areas, we have been striving to reduce environmental burden across the product lifecycle and to strengthen our company-wide environmental management. We are also working to conserve biodiversity which is the common foundation for the three focus areas. By 2050, we aim to achieve net-zero carbon emissions and preserve water and natural resources in operations, housing and lifestyle solutions for future generations as we seek to become a leading company in environmental sustainability.
In order to achieve our Environmental Vision, we will go beyond simply fulfilling our corporate responsibility to minimize the environmental burden of our business and products, and also create new value in the environmental field together with all stakeholders in order to have an even greater positive impact on the global environment and society.
LIXIL seeks to achieve net-zero CO2 emissions by 2050 by both striving to reduce the environmental burden of our business processes and providing environmentally friendly products and services. Furthermore, we believe that it is important not only to reduce the CO2 emissions generated directly by LIXIL’s business processes, products, and services, but also to reduce CO2 emissions across our society as a whole.
We also promote ways to adapt to climate change by providing products and services to help mitigate the damage caused by climate change, such as higher rainfall, large-scale typhoons and other natural disasters, and rising temperatures.
As a leading company in the water-related product industry, providing products such as toilets, kitchen systems, prefabricated bathrooms, and faucets, LIXIL strives to help achieve global water sustainability so that people can get the most out of the water they use.
To this aim, we promote responsible water usage by pursuing more efficient water use in our business processes, reducing water consumption particularly at sites where water resources are scarce, and helping reduce water use overall by offering water-saving products and services. We also work with governments and the broader public sector to improve access to safe and hygienic water, and use water purification technology in areas with access to tap water to provide even safer, more delicious water. These initiatives enable us to create environmental value for water.
LIXIL uses a variety of resources, including metals, timber, resin, and ceramics. We promote company-wide initiatives to promote the sustainable use of raw materials and the recycling of resources across all stages of the product lifecycle, from procurement to manufacturing, product use and disposal. We pursue circular manufacturing based on the use of recycled materials and the designing of products to facilitate reuse. We are also pursuing initiatives based on the LIXIL Plastics Action Statement to reduce the amount of plastic used, recycle plastic, and develop alternative materials.
From FYE2023, we expanded our material issues to include “Conservation of Biodiversity.” We consider biodiversity to serve as the common foundation for our three focus areas in the environment domain and believe that it is vital to address the issue of biodiversity in order to ensure sustainable LIXIL growth. The success of LIXIL’s business activities is reliant on water, minerals, and other resources, while, at the same time, those business activities may affect climate change, resource depletion, water pollution, air pollution, and other issues. We continue to pursue activities to help conserve biodiversity by understanding these relationships and developing and implementing initiatives in the three focus areas. With regards to our procurement activities, we have established policies for conserving biodiversity in the Green Procurement Guidelines and sought the cooperation of our suppliers in this mission.
We reviewed our strategy in FYE2023 to help further accelerate initiatives designed to achieve our Environmental Vision 2050. LIXIL aims not only to fulfill our social responsibilities, but also to create new value, and maximize the impact of our business. With that in mind, we have divided our three focus areas into three phases: Our Operation, Our Value Chain, and Expanding Our Impact, and have stipulated a comprehensive strategic approach and medium-term targets for each of these phases. We will steadily press ahead with various initiatives to maximize our positive impact in each phase in order to reduce environmental risk, seize business opportunities, and generate sustainable growth.
The targets and progress of each focus area are as follows:
|Focus Areas||Phases||Medium-Term Targets||Progress in FYE2023|
|Our operations||50.4% reduction on scope 1&2 CO2 emissions by FYE2031 (BM: FYE2019)||29.9% reduction|
|Our value chain||30% reduction on scope 3 CO2 emissions by FYE2031 (BM: FYE2019)||15.2% reduction*1|
|Expanding our impact||100% ratio of number of energy- and water- saving faucets and toilets sold by FYE2031 (Japan)||Energy and water saving faucets 92.2%
Energy and water saving faucets and toilets 99.2%*2
|100% ratio of number of high-performance windows sold for new detached houses by FYE2026 (Japan)||90%|
|Our operations||Improve water use efficiency by 20% in our operations by FYE2031 (BM: FYE2019)||16.0% improvement|
|Reduce water use at water-scarce sites||Water Sustainability ＞ Our Operations ＞ Initiatives at sites with water risks|
|Our value chain||At the time of FYE2025, 2 billion m3 of total water saved by spreading water-saving faucets and toilets||1.5 billion m3|
|Expanding our impact||Provide safer and better-tasting water||Water Sustainability ＞ Expanding our impact|
|Circular Economy||Our operations||Improve waste recycling rate to 90% in our operations by FYE2026||Across company 88.1%
Asia (excluding Japan) 96.8%
North America 69.0%
|Our value chain||100% of recycled aluminum used in our aluminum extrusion by FYE2031||74%*3|
|Increase the ratio of recycled and renewable materials used in our products||Circular Economy ＞ Our Value Chain ＞ Minimizing use of new resources|
|Eliminate packaging materials made of petroleum-based plastics to be discarded by end users and replace them with marine degradable materials||Circular Economy ＞ Our Value Chain ＞ Minimizing use of new resources|
|Enhance resource-efficient products and solutions||Circular Economy ＞ Our Value Chain ＞ Offering more resource-efficient products|
|Build systems that take back our products and recycle them into new products||Circular Economy ＞ Our Value Chain ＞ Creating a circular economy for products|
|Expanding our impact||Reduce difficult-to-recycle waste plastics by developing innovative materials||Circular Economy ＞ Expanding our impact|
*1 Excluding products not intended for energy and water saving faucets, such as those for exclusive use of hot water filling or full body bathing
*2 Excluding apartment buildings
Please refer to the following items for more details about each focus area.
We are strengthening company-wide management to reduce environmental risks that we seek to address in the LIXIL Environmental Vision 2050 and expand the environmental benefits that we offer to society.
LIXIL has established a governance system in which the Board of Directors oversees the entire sustainability initiatives. We have also established an Environmental Strategy Committee (ESC), chaired by the Chief Environmental Impact Officer (CEIO) who is appointed by the Board of Executive Officers. At the regular meetings of the ESC, which are held at least once every three months, we formulate and implement environmental strategies, including determining rules and policies relating to environmental governance, deliberating and deciding measures to address risks and opportunities due to climate change and other environmental issues, and managing and monitoring company-wide environmental targets.
The results of ESC discussions and resolutions are reported to the Board of Executive Officers quarterly through the Impact Strategy Committee. The Board of Executive Officers discusses and approves targets and action plans on environmental issues and other significant matters. The progress is elevated to the Board of Directors twice a year for discussion and oversight. Matters related to climate change and other environmental issues are also reported to and discussed at the Governance Committee. Thus, we regard responding to climate change as an important issue.
In FYE2023, the ESC discussed and decided to review our overall strategy, which included the formulation of medium-term targets for pursuing water sustainability and circular economy and the establishment of a comprehensive approach for realizing our Environmental Vision 2050. At the same time, the conservation of biodiversity was added to our list of material issues as the foundation for the three focus areas and as a key issue that needs to be addressed to ensure LIXIL’s sustainable growth.
Striving to help people live in harmony with the earth, LIXIL is committed to continuing our environmentally sound efforts in every aspect of our business activities. To that aim, LIXIL formulated the LIXIL Environmental Sustainability Principles that apply to all employees and all company officers, including directors and executive officers.
We also have an internal environmental auditing system that covers all our production bases as well as nonproduction bases and group companies in Japan. We conduct internal audits at production bases based on ISO 14001 to check that environmental management systems are effective and law-abiding. We also manage hazardous waste and air pollutants using a management system based on ISO 14001. At non-production bases and group companies, we conduct internal audits according to our own ISO-based environmental management systems and are gradually expanding the number of companies covered. We follow up on any matters highlighted by the internal audits and confirm that improvements are being implemented to ensure the effective operation of our management systems.
Our headquarters environmental management department have been auditing the environment managers at individual business units since FYE2018.
We are working hard to achieve ISO 14001 certification at targeted production sites in order to strengthen environmental governance at all relevant locations including group companies. In FYE2023, 94.7% of targeted sites were certified.
We strive to inform and educate all our employees about environmental initiatives. In addition to conducting environmental training for new recruits, we distribute environmental education content via e-learning channels each year in June and provide Environmental Management System (EMS) training for EMS promotion managers and operators at each site. In FYE2023, we started sharing the monthly reports on environmental trends that were previously exclusive to top management, including the directors and executive officers, with all employees on our internal social media. Also in FYE2023, we invited external experts to conduct seminars on "LIXIL’s role in achieving a carbon-neutral society" and "Reducing Scope 3 emissions."
Regarding the compensation system for executive officers, we have introduced stock-linked compensation that helps encourage their contribution to improving the company’s medium- to long-term corporate value, including environmental, social and governance (ESG) factors. For officers who are expected to improve the company’s value over the medium- to long-term, including from an ESG perspective, the ratio of stock-linked compensation to total compensation is set higher based on the deliberation of the Compensation Committee.
We hold our annual LIXIL AWARDS to recognize and celebrate employees’ incredible and exemplary work in line with the strategic initiatives of our LIXIL Playbook. This program applies to all our employees. The LIXIL AWARDS held in June 2023 recognized 794 projects, with 4,200 winners receiving a cash reward. Among the projects awarded, some included an environmental dimension such as reducing CO2 emissions, improving energy efficiency, or performing practical investigations to implement more environmental production processes. Separately, we hold award campaigns in our technology departments in Japan to recognize business sites and units that contribute to addressing environmental issues. Every year awards go to activities that reduce environmental burden at production sites in pursuit of the LIXIL Environmental Vision, and initiatives that promote the development of products and services to help address environmental issues.
LIXIL boasts operations in over 150 countries, and more than one billion people use LIXIL products every day. It is essential to reduce the burden on the environment across the product lifecycle, from raw materials procurement through manufacturing, use, and disposal, in order to proactively conserve the global environment.
We are working hard to reduce the environmental burden of the product lifecycle, positioning it as one of our material issues. We are implementing initiatives as part of our company-wide environmental activities driven by our Environmental Strategy Committee.
In Japan, we conduct an environmental assessment at each stage of the product development process to ensure compliance with environmental laws, and to help reduce the environmental burden of products in all three lifecycle stages: produce, use, and dispose.
|Stage||Items to be considered||Eco product features|
|Produce||Reducing major component materials and parts||Resource-saving|
|Additional reductions from using recycled materials||Recycled material use|
|Efficient assembly and construction||Construction-saving|
|Using lawful, sustainable wooden materials||Lawfully logged wood|
|Use||Reducing energy and water usage in everyday living||Energy-and water-saving|
|Improving performance using natural energy and zero energy use||Energy-creating, zero energy|
|Ease of maintenance and cleaning||Dirt-proofing, easy cleaning|
|Responding to sick-house countermeasures||F☆☆☆☆, etc.*|
|Dispose||Material recyclability of main component materials and parts||Recyclable design|
|Reusability of main component materials and parts||Reusable|
* F☆☆☆☆ (four-star) is the highest rating in the formaldehyde emissions level rating scheme.
An Environmental Product Declaration (EPD) is a third-party verified report issued following a quantitative calculation of environment impact (CO2 emissions, etc.) during a product lifecycle based on ISO 14025 – Type III Environmental Declarations. LIXIL is working to obtain EPD certification in each region to serve as third-party verification of life cycle assessment (LCA) results that quantify environmental impact through accumulated inputs and outputs across the product lifecycle from the procurement of raw materials through the manufacturing, use, and disposal of a product.
In Europe, the calculation of CO2 emissions for buildings is becoming increasingly regulated. In FYE2023, the GROHE brand acquired International EPD certification for 18 groups of products (including 774 SKUs). In Japan, we acquired the EcoLeaf environmental label for two sash windows for buildings and our PremiAL series of low-carbon aluminum profiles. LIXIL currently has a total of 56 EPDs for GROHE, American Standard, and LIXIL branded products (as of May 2023).
Across all of our business processes, LIXIL has been seeking to appropriately manage chemicals and reduce substances of concern that can affect human health and environment, helping to resolve environmental pollution issues and improve people’s comfort and lifestyles.
In Japan, LIXIL’s corporate functions of Environment, Procurement, and Quality partner with our technology businesses under the direction of the Chief Environmental Impact Officer to encourage appropriate management and operation of chemical substances in products. We have also established chemical substance management systems at bases and business in countries outside Japan and are pursuing relevant initiatives. We are striving to develop a solid management platform and to further strengthen governance, which will help maintain and improve compliance.
LIXIL strives to appropriately manage any chemical substances contained in our products based on the laws and regulations of each market in which we operate (EU RoHS Directive, REACH Regulation, etc.) and our own guidelines. In Japan, we take action together with the procurement department based on the LIXIL Chemical Substances Management Rank Guidelines that stipulate which substances are not allowed to be included in products and how to control and handle substances that are permitted. Our suppliers are required to collect information that proves the non-use of chemical substances that are not permitted and the content of chemical substances contained in products as stipulated by the guidelines. We collect information on legal and regulatory trends both inside and outside Japan on a regular basis and revise the guidelines when required. We also convey the latest legal and regulatory developments to the relevant departments to promote deeper understanding.
In Japan, we have introduced a dedicated management system for chemical substances in order to appropriately manage information when collecting details on chemicals in products from our suppliers, gathering internal data, and providing information to customers.
GROHE publishes the GROHE Sustainability Position Paper on its website and also discloses it to customers and other stakeholders. The paper is designed to serve as proof of compliance with legal standards for substances that are not permitted to be included in products or which require special management.
In new product development, we prioritize the reduction of substances of concern in our products to meet strong societal demands. We also collaborate with our suppliers to find alternatives to any substances of concern in our existing products.
To stay true to our commitment to combatting climate change and other environmental issues, LIXIL continuously engages in public policy advocacy and discloses information to stakeholders by participating in related initiatives, and industry and business associations inside and outside Japan.
LIXIL is very vocal in our commitment to environmental conservation and participates in initiatives both inside and outside Japan in order to help solve issues at an industry level.
We promote prompt and highly transparent information disclosure in order to earn the long-term trust of our stakeholders.
We are promoting the disclosure of detailed information relating to our environmental activities through responses to CDP, leading surveys in the environmental field.
LIXIL achieved the highest A rating in the CDP Water Security 2022 relating to water resource management for the second consecutive year (five times in total), and also earned a B rating for our climate action. In addition, we were included for the third consecutive year in the highest-rated Leaderboard in the CDP Supplier Engagement Rating, which evaluates initiatives for reducing greenhouse gas emissions across the supply chain.
In March 2019, we announced our endorsement of TCFD and, since then, we have been promoting information disclosure based on TCFD recommendations.
In FYE2020, we conducted a scenario analysis of climate-related risks and opportunities in line with the TCFD recommendations for a portion of our business under a support program by Japan’s Ministry of the Environment. In FYE2022, we further expanded the range of target businesses, conducted a risk and opportunity analysis, and formulated ambitious targets for reducing CO2 emissions. In June 2022, we also created a new webpage to disclose more detailed accounts of the analysis and countermeasures, which was updated in June 2023. Please refer to the following items for more details.