Sustainability topics and contribution to SDGs
Sustainability topics and contribution to SDGs “Hitachi Rail will reduce its environmental impact, develop a sustainability culture and improve quality of life for our people and communities”
(A. Razeto, Group Head of CSR and Sustainability)
The UN Environment Programme’s Emissions Gap Report 2020 found that global greenhouse gas (GHG) emissions hit a new high of 59.1 gigatonnes (Gt) of CO2 equivalent in 2019.
Over the past decade, emissions have continued to increase at a rate of 1.5% per year, rising in all major economic sectors.
The Company has three major levers to tackle climate change:
▪ Reduce GHG emission (Increasing the efficiency of the operations and reducing Supply chain emissions).
▪ Risk Management (Updating investment criteria and reduce portfolio of assets).
▪ Business model Innovation (Transforming the existing business model and pursuing growth in ‘green’ opportunities).
The transportations systems play a crucial role in the development of all cities. Recognizing that people’s way of life can be enriched by enhancing transportation systems and improving connectivity, the company engages in collaborative creation with customers and other partners to bring this about.
As a systems integrator serving all aspects of railways for 18.5 billion people (both metro and railway line users), Hitachi Rail helps people connect with one another and contributes to the revitalization of communities and the development of cities by supplying innovative railway solutions that are safe and highly reliable, utilising advanced information and control technologies. These include high-speed rolling stock, technology for autonomous operation, and preventive maintenance.
The ‘Think Responsibly and Act Sustainably’ initiative is at the heart of the way the company designs and plans products, and defines the solutions to develop with partners and deliver to customers.
Hitachi Rail has identified the UN Sustainability Goals that it is able to help reach:
▪ Directly, through management models which enable the Company to follow a path of sustainable growth and guarantee a cohesive culture of responsibility, and promote sustainable actions by individual collaborators.
▪ Indirectly, through the achievement of the company’s mission, which is to develop railway and mass transit systems and create increasingly sophisticated products and solutions that are safe, convenient, efficient and environmentally sustainable.
Materiality Analysis
To define which sustainability topics are considered material, Hitachi Rail has conducted a new materiality analysis.
The internal analysis carried out assessed the level of the materiality of various issues along with the company’s performance as well as the possibility of improving both its competitive advantage and reputation.
Hitachi Rail has reached out and performed a stakeholders engagement initiative in order to give the chance to both its employees and external stakeholders to assess the company’s priorities in terms of Sustainability, Welfare, and compliance with SDGs targets.
The analysis has been developed with an online tool and in full compliance with GRI Standards. A total number of almost 400 people have been involved and contacted, split between both top management and external stakeholders (suppliers, clients, partners etc.) with a detailed questionnaire – available in different languages – asking for their opinion on matters ranging from energy efficiencies to through air quality, data protection and protection of diversity and equal opportunities.
The topics analysed were then associated with the Sustainable Development Goals and the respective Targets. Since each material topic can cross multiple SDGs, the criterion for arranging the latter was to first associate them with the most significant topic as defined by the materiality analysis.
SDGs Materiality Matrix
Sustainable growth
Hitachi Rail considers CSR as its business contribution to sustainability, for which we all have a responsibility, and develops its commitment through specific climate action plans.
The Hitachi Rail Action Plans covers a 10-year period and will ensure emissions are reduced through a series of innovative and wide-ranging actions.
The plans have defined actions, objectives and targets to accelerate the process of reducing CO2 emissions and to design and develop concrete solutions. Hitachi Rail has an impact on most SDGs in four important ways:
▪ Products and solutions.
▪ Managing the activity responsibly and its assets.
▪ Continuous training.
▪ The measurement of its performance against the reduction plan.
Delivering a sustainable, safe and high-quality railway business
While greenhouse gas emission reduction is one of the company’s most important targets, it is not the only target that must be achieved in order to accelerate Hitachi Rail’s sustainable and environmental business operations.
Hitachi’s updated mid-term strategy, concrete targets, performance measurements, and transparent disclosure are the drivers of the company’s day-to-day activities.
Hitachi Rail set targets based on achieving emission reductions through direct action both within operations and throughout the value chain for manufacturing high quality products, solutions and Operations, Service & Maintenance.
Recently the Hitachi Group announced its commitment to being carbon neutral at all of its sites by 2030 and an 80% reduction in CO2 emissions across the company’s value chain by 2050.
We are supporting these goals through our Decarbonisation Strategy:
▪ Mobility as a Service: Making already sustainable Rail travel even more attractive by integrating Hitachi Rail’s services with other modes of transport using data from the Internet of Things.
▪ Creating new electrified railways or powering trains with batteries, and Decarbonising our industrial footprint in line with UN’s Science-based targets.
Hitachi Rail contribution to net-zero
Hitachi Rail Strategy and Commitment pass through a system of very well integrated elements. In this situation, every change also brings opportunities, and it is clear that imagination is the key to shaping the future.
Hitachi Rail is committed to reducing the impact of its activities on the environment. Central to this is how the company aims to influence the impact of its supply chain, its own operations, and the products and services it offers to its customers.
For its customers, the latest innovations focus on reducing life cycle consumption of material and energy from its own products, using recycled or otherwise sustainable materials and adopting new solutions from renewable energy sources for traction (eg. Battery trains). Across Hitachi Rail’s portfolio of rolling stock, signalling and turnkey solutions, the company is using digital technologies to achieve better outcomes for customers with less impact on the environment.
For rolling stock, the ROCK train provided to Trenitalia is made from 95% recyclable material. Hitachi Rail’s signalling solutions team are pioneering new ‘Zero-Infrastructure’ train control technologies which replace line-side equipment with cloud-based solutions connected through satellite communications.
Our operations teams acquired the remote condition monitoring company Perpetuum, whose analytics technology extends the safe service life of bogies – further reducing industrial and financial waste of inefficient maintenance regimes.
Hitachi Rail encourages its suppliers to participate in energy efficiency and other similar programs to reduce their own emissions.
Material Recovery is an innovative technological practice that must be further developed and tested for the recycling of electronic equipment and the use of materials. Hitachi Rail continues to promote the use of recycled materials and low greenhouse gas emissions, innovate the processes of recycling products, and design increasingly efficient products and solutions in terms of reducing emissions (GHG).
Road map to sustainability
Hitachi Rail aim to become an influencer leader of CSR and Sustainability, thanks to its capability to:
Identify future business opportunities
Develop new market opportunities and solutions for green targets.
Development and adoption of technologies and solutions.
Deliver sustainability on projects product/services development.
Have a premises management for Environmental and Sustainable impact.
Strengthening stakeholders relations and for stable societies and markets
▪Develop new market opportunities and solutions for green targets.
▪Development and adoption of technologies and solutions.
▪Implement concrete projects on product/services development.
▪Promote sustainable products referring to its social and environmental impacts.
Using a common language and shared purpose
▪ Adopt a company consistent roadmap to every relationship with external and internal stakeholders.
EcoVadis
EcoVadis aims to improve the environmental and social practices of businesses by leveraging the influence of the global logistics chain. It has defined a methodology to assess Corporate Social Responsibility through analysing their policies and their implementation and the results achieved.
The assessment focuses on 21 topics divided into four categories: Environment, Employment and Human Rights, Ethics, and Sustainable Procurement.
Hitachi Rail’s CSR&S department has taken over the complete management of the sustainability ratings. At the date of publication of this Report, it has achieved the following results:
• Hitachi Rail STS has confirmed its Gold Medal Award for the second consecutive year.
• Hitachi Rail SpA has received the Silver Medal Award.
As well as recognising the company’s vision and efforts in the field of CSR, the certification also helps customers to achieve their sustainability and environmental targets.
In addition to our registration through EcoVadis as described above, Hitachi Rail is also undertaking a market review with the intention to leverage third party data providers including EcoVadis to provide visibility of risks and performance of our suppliers against core CSR themes and to support and drive the sustainability agenda within the supply chain.
CSR & Sustainability risks management approach
For each material topics of sustainability, Hitachi Rail has identified risks and opportunities and the management approach for their mitigation.
MITIGATION OF CLIMATE CHANGE
Risk description
▪ Environmental impact of production processes, product composition and increase in energy consumption.
▪ Possible negative effects on the activities to be carried out influenced by climate change.
▪ Increased energy consumption costs.
Risk management
▪ Analysis and assessment of risk to climate change at the international level.
▪ Implementation of operational control procedures.
▪ Definition of environmental objectives.
WASTE AD AFFLUENT MANAGEMENT
Risk description
▪ Failure to comply with the regulations by the company and suppliers on projects / activities
▪ Changes to the legislation with sanctioning risks.
Risk management
▪ System for monitoring the evolution of regulations worldwide.
▪ Adoption of projects aimed at reducing the production of factory waste and waste water management.
AIR QUALITY
Risk description
▪ Environmental impact of production processes, product composition and the need to reduce or eliminate the use of hazardous substances.
▪ Increase in technology investment costs.
▪ Changes to laws that involve risks of penalties.
Risk management
▪ Implementation of monitoring systems for processes and plants.
▪ Designing better solutions
▪ Specific training on company standards and changes in terms of process and product.
OCCUPATIONAL HEALTH AND SAFETY
Risk description
Failure to comply with Regulation contractual requirements or company procedures in identifying occupational health and safety hazards.
Incorrect, or inadequate assessment of the risks which the hazards identified create in our particular circumstances of use.
Failure to re-asses following changes to hazard identification or risk assessment requirements.
Risk management
Compliance with the company HSE Risk Management System.
Horizon scanning of regulatory changes, contractual changes and technical journals.
ETHICAL MANAGEMENT OF SUPPLY CHAIN
Risk description
▪ Changes in Government requirements mid contract.
▪ Supplier non-compliance.
▪ Increased volume of Suppliers globally.
Risk management
▪ Compliance with our Supplier Code of Conduct is mandated and required of all suppliers at contracting stage and monitored throughout the lifecycle of the contract.
▪ Implementation of human rights due diligence appropriate to the social circumstances of the countries and regions where Hitachi Rail has operations and the nature of its businesses, products, and services there.
▪ Development and implementation of on going human rights due diligence to include identifying and assessing potential and actual human rights impacts and taking appropriate action to prevent or mitigate risks. The Company will track these processes to ensure the effectiveness of its actions to address impacts and risks and develop mechanisms to report these findings externally.
▪ Completion of risk assessments to identify key vulnerabilities in our supply chain.
▪ Transformation of supply chain to enhance and improve ESG footprint whilst simultaneously managing against future risks
▪ Remediation and management of incidents through internal governance frameworks
▪ Continued surveillance to verify on going compliance.
▪ Escalation process for non-compliance.
PROTECTION OF DIVERSITY AND EQUAL OPPORTUNITY
Risk description
▪ Attracting right talent.
▪ Ensuring equal opportunity
Risk management
▪ Continuing to offer competitive and equitable benefits and compensation.
▪ Promote opportunity and career development.
▪ Ongoing provision of accessible development opportunities.
▪ Further enhance coaching and training on diversity and inclusion topics.
ENERGY EFFICIENCY AND ELECTRICITY FROM RES
Risk description
▪ Growth in costs related to energy consumption.
▪ Lessened ability to compete.
Risk management
▪ Investments to reduce consumption by verifying potential profitability.
▪ Adoption of projects aimed at reducing energy consumption in factories and using energy from renewable sources.
▪ Failure to comply with the regulations by the company and suppliers on projects/activities.
• Changes to the legislation with sanctioning risks.
CIRCULAR ECONOMY, RECYCLE AND REUSE
Risk description
▪ Failure to comply with Regulation by the company or suppliers in the sourcing, use, declaration and disposal of materials.
▪ Failure to anticipate changes which can impact material use.
Risk management
▪ Legislation, standards and professional information sources are pro-actively monitored.
▪ Compliance with existing regulatory, customer and company requirements are assured through the HSE Management System.
WATER CONSUMPTION OPTIMISATION
Risk description
▪ Increase in technology investment costs.
▪ Changes to laws that involve risks of penalties.
Risk management
▪ Implementation of monitoring systems for processes and plants.
▪ Specific training on company standards and changes in terms of process/product.
EMPLOYEE WELFARE, HYBRIDE WORKING MODELS
Risk description
▪ Work and home life pressures and events may result in poor mental health of employees.
▪ Employees may from time to time suffer with medical conditions or have long-term conditions which could affect their ability to carry out their role.
Risk management
▪ Increase continues communications and instutute employee well-being programs.
▪ Develop programmes to support employees mental and physical wellbeing.
▪ Continue to monitor employees’ engagement through annual survey.
RESPECT OF HUMAN RIGHTS
As a member of society we Hitachi Rail can contribute to creating an environment in which human rights are respected. Meeting the responsibility to respect human rights is key to operating as a responsible business, and is accepted to be a baseline expectation.
Risk description
▪ Increasing legislation on businesses to be held accountable for human rights related violations within its own business and operations, as well as by companies within its supply chain.
Risk management
▪ The Company will promote the understanding of internationally recognized human rights, and will respect and not infringe on the human rights of all those involved in our business activities.
▪ Hitachi Rail will assess and prevent potential violations of human rights. In the event of such a violation, we will promptly take internal and external actions to correct and remedy the situation.
▪ The Company will respect individual human rights in the recruitment and treatment of employees and during all other company activities, and will not engage in any acts that may impair individual dignity or discriminate on bases such as sex, sexual orientation, age, nationality, race, ethnicity, ideology, belief, religion, social status, family origin, disease, disability.
▪ Hitachi Rail will strive to resolve issues through sincere and constructive discussion between management and employees, in compliance with the laws, regulations, and labour practices of each country and region, and in accordance with international norms and standards.
▪ Where Hitachi Rail identifies that it has caused or contributed to a negative human rights impact, it will provide for, or cooperate in, legitimate processes to provide remediation.
▪ We The Company adheres to national law and regulation in each market in which It operates. If Hitachi Rail faces conflict between internationally recognised human rights and national laws, it will follow processes that seek ways to honour the principles of international human rights.
▪ Hitachi Rail will provide appropriate training and capacity building in order to embed this policy commitment and will engage with relevant external Stakeholders about addressing potential and actual human rights impacts.