April 22, 2021
OMRON: Addressing Societal Issues Head-on with a Unique Corporate Philosophy Management
OMRON ESG Presentation Report
"To improve lives and contribute to a better society."
These are the words of founder, Kazuma Tateishi in 1959, as codified in OMRON Corporate Motto. Since then, the company has been engaged in business based on a "public nature" such that companies exist to help society, paired with the determination to take on the challenge as a leader of innovation in helping to create a better society going forward.
In light of the COVID-19 pandemic, OMRON has been taking a hard look at how it expresses its aspirations as inherited over the past 60 years, along with how it plans to tackle the future's major challenges, such as those related to energy, the environment, and climate change.
At the OMRON 2020 ESG Presentation held on March 1, 2021, the company stated that its sustainability efforts are embedded into its principles, and it was able to boldly declare: "Thanks to OMRON's unique principles, even in a crisis like COVID-19, our global employees were able to tackle head-on the mission of solving social issues through our Business."
Sustainable Brands Japan - Editorial Bureau Reports.
The OMRON spirit: Continuing to help the company battle COVID-19 in a practical way
Mr. Tsutomu Igaki, as Executive Officer, Senior General Manager, Global Investor & Brand Communications HQ, introduced an example of the internal protocols used in fighting COVID-19. In April 2020, OMRON Italy's healthcare business was able to continue under government permission while lockdowns were being implemented throughout Italy. While the number of patients requiring ventilators was on an upward trend, OMRON's team quickly took hold of the situation, highlighting a possible risk of medical nebulizer shortage, then making the decision to increase the production of medical nebulizer according to need at each site. OMRON continued to work with the responsibility of providing reliable supply even amid the ensuing turmoil.
Also due to COVID-19, there is an increasing demand for the sterilization and disinfection of internal spaces in building structures, but this work also carries the risk of a secondary infection. With focus on this as a social issue, an employee in charge of OMRON's control equipment business in Poland created a new UV irradiation robot that utilizes the advantages of one OMRON's mobile robots. This robot solution, which carries out unmanned work inside buildings and which has greatly contributed to reducing the risk of secondary infections, is now being deployed in more than 10 countries around the world, including France, Mexico, and Korea.
At the root of these voluntary and challenging efforts is, of course, the words of OMRON Corporate Motto, inherited as "Our Mission," and its corporate philosophy, defined as "Our Values." However, simply raising such as a talking point does not make it any easier to take action. OMRON has thus established a Management Philosophy based on its principles and has incorporated that philosophy into its business and management systems.
Specifically, OMRON will manage its business with a stance centered on three pillars: management practice from a long-term perspective; honest and transparent management based on globally consistent policies; and stakeholder engagement that promotes management together with stakeholders. According to Mr. Igaki: "In order to clearly identify our position, OMRON continues to focus on dialogue, including in the disclosure of ESG information, with its stakeholders. Taking this management stance, we will engage in responsible dialogue with all stakeholders while working toward building cultivate strong relationships."
Executive Officer, Senior General Manager, Global Investor & Brand Communications HQ
Accelerating environmental initiatives via two aspects
Next, Mr. Igaki talked about "E" (i.e., the environment) in OMRON's ESG stance regarding environmental efforts. The main characteristic of this stance is in the medium-term management plan of VG2020 (Value Generation 2020), in which performance targets, business strategies, and sustainability goals are linked--thus synergizing them. OMRON has also established a vision for the environment, i.e., its "Green OMRON 2020," based on its principles.
Mr. Igaki went on to say: "The improved society described in our corporate mission is a sustainable society in and of itself. Specifically, it is the creation of a decarbonized society, a recycling-forward society, and a society that coexists with nature. Following the Paris Agreement, we set forth 'OMRON Carbon Zero' in 2018, and at the same time, it participated in the Science-Based Target initiative (SBTi). Furthermore, in 2019, we announced our support for the Task Force on Climate-related Financial Disclosures (TCFD). We are proceeding with initiatives that utilize such frameworks."
According to Mr. Igaki, OMRON's environmental actions consist of two initiatives: contributing to the environment through the provision of products and services that are useful to society and reducing the environmental impact throughout all business activities. As an example, OMRON will expand the provision of environmentally supportive products (such as power conditioners used in solar power generation) and enhance its energy conservation efforts, along with improving efficiency in the operation of our factories. OMRON's efforts are characterized by taking action from all sides of such initiatives.
Utilization of renewable energy and efficiency improvements in area units
OMRON's energy solutions business works to contribute to the expansion of the use of renewable energy in society. Mr. Taisuke Tateishi, as Executive Officer, Senior General Manager, Energy Solutions Business HQ, OMRON SOCIAL SOLUTIONS CO., LTD. reported on such details at the ESG Presentation.
OMRON's energy solutions business began in 1934--the year after its founding--with the launch of parts known as "protective relays," which help protect the power supplies of factories and facilities from natural disasters. This business has been continued for more than 85 years.
In 1994, OMRON launched a power converter for photovoltaic power generation, known as a "power converters." Furthermore, with the aim of strengthening its energy business--which is a main area for the company for solving societal issues--the company's Environmental Business Headquarters and the OMRON SOCIAL SOLUTIONS Group, which is in charge of societal system-related business, were integrated in 2020. The aim of this is to promote environmental contribution by leveraging strengths and creating synergies.
Mr. Tateishi said: "As for the progress of our sustainability target set for 2020, we expect the market to be revitalized once the coronavirus is resolved in the future. The need for renewable energy and storage battery systems is growing every year and is expected to continue to expand.."
In Japan, energy consumption is decreasing due to an overall population decline and energy reduction. On the other hand, it is thought that demand for electric power will re-expand as needs for electrification progress. Therefore, from the perspective of controlling CO2 emissions, distributed power generation and storage utilizing renewable energy such as solar power generation and wind power generation will become more important.
Mr. Tateishi explains that the vision of OMRON's energy solution business is to realize a recycling-oriented society for the next generation through energy optimization. Regional-based energy management that considers and controls energy throughout the entire region or area is effective toward achieving this.
As an example, OMRON has signed a comprehensive agreement with Miyazu City, Kyoto Prefecture, and has introduced a PVpower system for fallow land such as abandoned farm land, contributing to disaster prevention & mitigation in the region.
Of course, technological innovation is also necessary to make regional energy management a reality. Energy must be controlled in order to achieve optimum supply & demand conditions at any given time. OMRON Group technology is used for self-consignment systems for power generation in remote locations for various companies, etc., as well as for using large storage battery systems that control charging and discharging--which contribute not only to securing power in the event of a disaster but also to reducing cost.
Executive Officer, Senior General Manager, Energy Solutions Business HQ
OMRON SOCIAL SOLUTIONS CO., LTD.
Greater value via a climate change taskforce
As mentioned above, OMRON is one of the leaders in tackling environmental problems and has been for some time now. Ms. Liu Yue, Senior General Manager, Sustainability Office, chimed in: "Especially in the 10 years from 2011, OMRON has made great strides in responding to climate change." It is said that there are three points to this.
The first is the long-term vision of "VG 2020," which started in 2011. Then, in 2018, "OMRON Carbon Zero" was set up in the wake of the Paris Agreement. Finally, in 2019, OMRON aligned with the TCFD. External evaluations have been particularly remarkable in recent years, with CDP climate change receiving an A- evaluation for the second consecutive year. In addition, OMRON won the top 1% (at the platinum level) for the first time this year at Eco Buddy's, which sets out evaluation criteria for sustainability efforts that include climate change. Ms. Liu also reported on OMRON's climate change efforts in line with the four points recommended by the TCFD: "Governance," "Strategy," "Risk Management," and " Metrics and Targets."
Against this backdrop, as a point of progress this year, OMRON explained the results of a scenario analysis as conducted for its energy solutions business. Through scenario analysis conducted to analyze business risks and opportunities in consideration of medium- to long-term outlooks and new business development, OMRON has shown that it will be more proactive in contributing to climate change issues through its business in the future.
As part of the progress of the carbon-zero initiative aiming for zero emissions by 2050, it was also reported that greenhouse gas emissions are expected to decrease by 51% in FY2020 compared to FY2016 due to thorough energy conservation and the cleanliness of electricity consumption that utilizes renewable energy.
Senior General Manager, Sustainability Office
Power added via OMRON's unique Corporate Philosophy, paired with its management power
In addition, at the ESG presentation, there was a report on the progress of each goal as set by OMRON. From evaluating both the FY2019 results and the FY2020 targets, OMRON can see that the areas of "Reductions in greenhouse gas emissions" and " Appropriate management and reduction of hazardous substances," which are positioned as important sustainability issues, along with "Reduction in waste," "Prevention of air, water, and soil contamination," " Effective usage of water resources," and " Facilitating environmental management," are proceeding as planned.
Ms. Liu concluded the ESG presentation with the following: " As I have mentioned, OMRON's principles have spread globally and continues to evolve. Thanks to OMRON's unique principles, even in a crisis like COVID-19, our global employees were able to tackle head-on the mission of solving social issues through our Business. By solving social issues through our business, OMRON will continue to create economic, environmental and social value, and achieve sustainable growth in corporate value."