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Management Strategy and Sustainability

Long-Term Outlook Policy (Environmental Vision 2050)

Adopted in 2015, the Paris Agreement contains a target for the latter half of this century of reducing greenhouse gas emissions to net zero and limiting global warming by less than 2°C compared to pre-industrial levels. In the spirit of the Paris Agreement, Daikin has formulated Environmental Vision 2050, with a target of reducing greenhouse gas emissions to net zero by 2050. Besides reflecting this vision in the final three years of the Fusion 20 Strategic Management Plan, we have begun to make a medium- to long-term strategy with targets for 2030.

Formulation of Environmental Vision 2050

Looking long term, we have predicted how society will change by 2050 and have made a list of the risks and opportunities for Daikin's business. Based on this, we have set a direction we must take in using our resources to solve environmental problems.

Forecast of Society in Which Daikin Will Operate in 2050

Based on the relationship between Daikin's business and the global environment, we came up with a long-term environmental to-do list that takes into account what the world will be like for Daikin's business in 2050 judging by current social scenarios.

Forecast of Society in Which Daikin Will Operate in 2050

Daikin referred to the following reports when making its forecasts

*1
World Population Prospects: The 2017 Revision, by the United Nations
*2
The World in 2050, by PwC
*3
World Urbanization Prospects: The 2018 Revision, by the United Nations
*4
Estimates and Forecasts for the World's Waste Generation, by the RISWME
*5
World Energy Outlook 2017, by the International Energy Agency (IEA)
*6
The Future of Cooling, by the International Energy Agency (IEA)
*7
The Future of Forests: Emissions from Tropical Deforestation with and without a Carbon Price, 2016-2050, by the Center for Global Development (CGD)
*8
The Problem of Worldwide Resource Restrictions by 2050, by the National Institute for Materials Science (NIMS)
*9
OECD Environmental Outlook to 2050, by the Organization for Economic Cooperation and Development (OECD)
*10
Quantitative risk assessment of the effects of climate change on selected causes of death, 2030s and 2050s, by the World Health Organization (WHO)

How Daikin Should Proceed Based on Risks and Opportunities

Daikin came up with business risks and opportunities in relation to the environmental problems specified above.
We determined how we should proceed in order to solve these problems based on the company's resources.

How Daikin Should Proceed Based on Risks and Opportunities

Environmental Vision 2050

We will reduce the greenhouse gas emissions generated throughout the entire life cycle of our products.

Furthermore, we will create solutions that link society and customers as we work with stakeholders to reduce greenhouse gas emissions to net zero.

Using IoT and AI, and open solutions, we will meet the world's needs for air solutions by providing safe and healthy air environments while at the same time contributing to solving global environmental problems.

Daikin Environmental Vision 2050

Making a Medium- to Long-Term Strategy toward Achieving Environmental Vision 2050

As a result of analyzing our future air conditioner business so that Daikin products can bring the world new added value for air, and so that our products and solutions can help achieve net zero greenhouse gas emissions, we will formulate targets for 2030, integrate them into the Fusion Strategic Management Plan, and implement measures as action plans.

Making a Medium- to Long-Term Strategy toward Achieving Environmental Vision 2050

Growth Strategy Based on Risks and Opportunities

The forecast for rapidly increasing demand for air conditioning—Daikin's main business—presents us with a huge opportunity. But along with this come risks for the continuation of our air conditioning business: increased air conditioning means greater energy needs, increasing electricity provision costs, and higher greenhouse gas emissions.

We aim to respond to these risks by turning them into opportunities. We will do this by reducing our environmental impact by, for example, developing and spreading the use of high-efficiency air conditioners, creating solutions for buildings that utilize energy effectively throughout the entire facility, and developing and spreading the use of refrigerants with lower global warming potential. In this way, we aim to protect the environment while growing our business.

IEA The Future of Cooling Forecast

In May 2018, the International Energy Agency (IEA) released The Future of Cooling. The report looks at air conditioning and how the rise in its use is driving global energy demand.

According to The Future of Cooling, estimates are for air conditioning demand to rise rapidly and for energy demand for space cooling to triple by 2050.

Worldwide Air Conditioner Stock (Number of Units) and Electricity Demand

Worldwide Air Conditioner Stock (Number of Units) and Electricity Demand
Note:
Graph figures compiled by Daikin based on IEA The Future of Cooling
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