LIXIL makes pioneering water and housing products that solve everyday, real-life challenges, making better homes a reality for everyone, everywhere.
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 positioned Water Conservation & Environmental Sustainability as one of the strategic pillars of our Corporate Responsibility (CR) Strategy as we aim to make better homes a reality for everyone, everywhere. LIXIL Environmental Vision 2050 calls for Zero Carbon and Circular Living and we are working to create environmental value and reduce environmental risks by developing innovative products and services and reducing environmental impact across our business processes.
In order to promote company-wide initiatives and eventually realize this Environmental Vision, we have defined three focus areas: climate change mitigation and adaptation; water sustainability; and circular economy. As a foundation for promoting these focus areas, we are also working to reduce environmental impact throughout product lifecycles and to strengthen our company-wide environmental management.
We updated our Environmental Committee in FYE2022 to create the Environmental Strategy Committee (ESC), in which executive officers also participate as members, with the aim of accelerating our global environmental activities. Chaired by our Chief Technology Officer (CTO), the ESC oversees activities across all our business units, corporate functions, and consolidated subsidiaries through its secretariat office, namely the headquarters environmental management department.
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 environmental issues, and managing and monitoring company-wide environmental targets.
The details of the debate and any resolutions are reported to the Corporate Responsibility (CR) Committee. Decisions on matters of significance or special importance are elevated to the Board of Executive Officers for discussions and approval, followed by the elevation to the Board of Directors for discussions and oversights. The CR Committee identifies and reviews key sustainability issues, including environmental issues, formulates CR Strategy targets and measures, and monitors and supports the implementation of priority initiatives and specific activities.
The execution of sustainability initiatives is reported and reviewed with the Board of Directors twice annually. In addition, when decisions on matters of significance or special importance are made by the Board of Executive Officers, updates may be reported as necessary as part of regular reporting to the Board of Directors by executive officers. We are developing specific initiatives based on the determined strategies and measures and the environmental governance systems established by each business unit.
In FYE2022, the ESC established environmental governance frameworks and has been continuing discussions regarding the creation of new medium-term targets and strategies.
LIXIL determines our code of conduct, conducts audits, creates in-house education and evaluation systems, participates in external initiatives, and enhances environmental disclosure.
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.
• Continually improve environmental management systems and performance
• Adhere to rigorous compliance
• Develop and provide environmentally sound products and services
• Reduce environmental impact in every process of the business operation
• Proactively communicate with all stakeholders
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 FYE2022, 93.7% of targeted sites were certified.
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. 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 also started auditing the environment managers at individual business units in FYE2018.
Furthermore, as part of our environmental risk management, we strive to comply with environmental laws and regulations relating to air, water quality, soil, groundwater, noise, waste, and hazardous chemicals, and we have had zero severe violations that incur fines of $10,000 or more.
We strive to inform and educate employees at different levels of the company about environmental initiatives. We conduct environmental training for new recruits, provide Environmental Management System (EMS) training for EMS promotion managers and operators at each site, and distribute monthly reports on environmental trends to top management, including the directors and executive officers. In FYE2022, we invited external experts to a seminar on “What is expected of companies regarding TCFD” as part of our drive to enhance understanding of the importance of information disclosure that complies with Task Force on Climate-related Financial Disclosures (TCFD) recommendations.
In addition, we evaluate and award environmental activities led by employees at each site. 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.
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.
• Task Force on Climate-related Financial Disclosures (TCFD)
An initiative that seeks to promote the disclosure of information relating to climate change risks and opportunities. LIXIL announced our endorsement in March 2019.
An international corporate initiative that seeks to achieve 100% renewable electricity in business activities. LIXIL joined in October 2019.
• Science Based Targets initiative (SBTi)
An initiative that promotes the achievement of science-based emissions reduction targets that align with the Paris Agreement. LIXIL’s greenhouse gas emission reduction targets were approved as SBTs in November 2017, and we are preparing for revalidation to update to more ambitious targets.
• Japan Climate Leaders’ Partnership (JCLP)
A group of Japanese companies aiming to create a sustainable decarbonized society. The group implements management strategies, fosters corporate cooperation, and makes recommendations to the Japanese government to achieve it. LIXIL has participated since September 2014.
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 2021 relating to water resource management, and also earned an A- rating for our climate action. In addition, we were included for the second 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 proactively formulated countermeasures. Then, in June 2022, we created a new webpage to disclose more detailed accounts of the analysis and countermeasures. Please refer to the following items for more details.