Long-Term Outlook Policy (Environmental Vision 2050)

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.

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.

Environmental Vision 2050

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

Furthermore, we are committed to creating 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 innovation attempts, 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.

Growth Strategy Based on Risks and Opportunities

Future predictions about the sharp increase in demand for space cooling represent an important opportunity for us because air conditioning is our core business. At the same time, the increase in electricity consumption and greenhouse gas emissions attributed to air conditioning represents a major risk to the continuity of the air conditioning business in a society that demands de-carbonization because climate change is a worldwide issue.

Therefore, in addition to mitigating environmental and climate change impacts by curtailing electricity consumption and preventing refrigerant leakage, we will develop and spread higher energy-efficient air conditioners and refrigerants with a lower global warming potential. Daikin will also create new environmental solutions, such as the efficient utilization of energy tied to buildings. This will enable us to balance contributions to social issues including climate change with the further growth of our businesses.

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

Note:

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

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

Daikin has established a greenhouse gas emissions reduction target after analyzing the future of its business operations in order to reduce these emissions to net zero while bringing the added value nature of air to people around the world. With the base year set at 2019, we aim to reduce greenhouse gas emissions by 30% or more in 2025 and by 50% or more in 2030 compared with emissions without measures (business as usual (BAU)). Measures to achieve these goals will be implemented under Fusion Strategic Management Plans.

Initiatives in the Medium-Term Management Plan for Achieving Environmental Vision 2050

The three themes of the growth strategy for achieving our environmental vision have been incorporated into the nine key themes of the Fusion 25 Strategic Management Plan. We will now implement this plan aiming to strike a balance between resolving social issues and business growth.