Social Issues and Business Characteristics

Analysis of Business Characteristics and Risks/Opportunities

Factoring in Impacts in the Value Chain and Business Environment

Analysis of Business Environment

The International Energy Agency (IEA) predicts that demand for space cooling will increase sharply by 2050, which will triple worldwide electricity demand for space cooling.

Worldwide air conditioner stock (number of units) and electricity demand

Note: Graph figures compiled by Daikin based on IEA The Future of Cooling

In addition to demand for space cooling, there is growing interest around the world in indoor air quality due to the COVID-19 pandemic.

Results of Survey on Air Quality at Home

Source: Compiled by Daikin based on Sunstar Global Healthy Thinking Report 2021.

Evaluating impact from the value chain

We evaluated the impact our business has on society across the value chain and identified initiatives of high priority.

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• Process for Identifying Key Sustainability Themes

Impact Assessment for Daikin and Society

Our CSR Committee identified the highest priority themes for both Daikin and society after evaluating the impacts our business has on society and narrowing the range of important initiatives.

Materiality analysis

Identification of Key Sustainability Themes

Emphasis Placed on Climate Change

We reviewed key sustainability themes at the time of formulating the Fusion 25 Strategic Management Plan and identified the following seven as top priorities shown in the above figure at right. Climate change is a theme of particular emphasis.

The rapid increase in demand for space cooling predicted mainly in emerging countries represents a major opportunity for Daikin because its core business is air conditioning. The spread of air conditioning is one way to adapt to climate change and it also responds to the need for air purification which increased during the COVID-19 pandemic. However, risks include rising electricity consumption and greenhouse gas emissions from the use of air conditioning. Currently, air conditioning accounts for around 10% of the world’s electricity consumption. With rapid increase in demand in the future, the impacts are expected to become larger.

Given this, Daikin’s mission is to address society’s needs for air in the future and to help reduce society’s carbon footprint. With our long-term vision to achieve net zero greenhouse gas emissions, we are promoting efforts under the key themes of the Fusion 25 Strategic Management Plan.