Highlighting the company's dedication to environmental, social, and governance (ESG) practices, the 123-page Hitachi Energy Sustainability Report 2024 demonstrates its efforts towards a sustainable energy future.
The beginning is powerful, featuring a letter from CEO Andreas Schierenbeck, Chief Executive Officer of Hitachi Energy, in which he expresses:
We need to act, as we cannot afford to stand still, and time is running out. We are experiencing a fundamental shift with the ongoing clean energy transition, and we see that climate change is here. It’s urgent, and we all need to collaborate to deploy technology and remove regulatory barriers to increase the speed to reach the ambitious net-zero goals.
Building on its established "Sustainability 2030 strategy", Hitachi Energy centers its efforts around three pillars:
"Planet, People, and Principles"
This framework is instrumental in guiding their environmental initiatives, supporting an equitable workplace, and promoting ethical business practices aligning with the global UN Sustainable Development Goals (SDGs).
Planet: Environmental Initiatives and Decarbonization
Hitachi Energy is dedicated to reducing carbon emissions and promoting a circular economy as part of its environmental initiatives. The company is determined to achieve carbon neutrality by 2030, utilizing innovative solutions such as EconiQ™.
A significant highlight in the report is the company's focus on biodiversity and ecosystems. Hitachi Energy is actively working to reduce environmental impacts in its supply chain and operations, implementing policies for protecting ecosystems near its facilities. This involves responsible resource use and minimizing waste through recycling and upcycling, an integral part of their circular economy model. These efforts not only align with sustainability goals but also contribute to Hitachi Energy's long-term commitment to reducing the footprint of its operations globally.
People: Advancing Inclusivity and Workforce Wellbeing
The People pillar emphasizes health, safety, diversity, equity, and inclusion (DEI) within the company. Hitachi Energy prioritizes creating a safe work environment for its employees and contractors, aiming to maintain zero harm. Backed by strict safety measures, ongoing training, and dedication to health and wellness initiatives.
Hitachi Energy has made substantial strides in enhancing DEI. By implementing robust policies on human rights and gender equality, it seeks to foster an inclusive environment for all employees. These policies also extend to partnerships and suppliers, ensuring fair treatment and opportunities across the value chain. The company’s commitment to community welfare is evident through various social contributions and local engagement efforts, designed to benefit communities where Hitachi operates. These practices support a just energy transition, making sustainable advancements inclusive and accessible to a broader demographic.
Principles: Ethical Governance and Transparent Practices
The Principles pillar focuses on ensuring integrity and transparency in governance. Hitachi Energy emphasizes the importance of ethical business practices, prioritizing compliance, responsible sourcing, and transparency in its operations. Their Supplier Sustainability program enforces stringent environmental and social guidelines for all suppliers, reducing risks associated with procurement and encouraging sustainable practices throughout their supply chains.
Governance is also a core part of the company’s strategy. Hitachi Energy’s leadership upholds ethical business standards, enforcing codes of conduct and operational guidelines that encourage corporate accountability and responsible decision-making. The report reveals ongoing efforts to promote transparency and trust, evidenced by regular updates and progress tracking against sustainability goals. This is further reinforced by Hitachi Energy's "Material Impact Assessment" conducted in 2023, which integrates stakeholder insights into future planning, showing a deep commitment to stakeholder engagement and responsiveness.
Here are some of the key insights from the report:
1. Increased Investment in Clean Energy
Hitachi Energy is investing an additional $4.5 billion by 2027, focusing on expanding its manufacturing, engineering, digital capabilities, research and development, and strategic partnerships. This builds on a previous $1.5 billion commitment announced in early 2024, aimed at boosting the production of transformers and high-voltage technology to meet the rising demand for renewable energy integration. This funding will enhance facilities in Sweden, where the flagship Ludvika factory and a new campus in Västerås are set to expand their manufacturing and R&D capacities. The expansion will add over 2,000 employees in Sweden alone.
2. Innovations in Grid Technology and Electrification
The report emphasizes the necessity of grid resilience and flexibility in supporting a renewable future. To achieve this, Hitachi Energy continues to develop advanced grid automation solutions, digital twin technologies, and as mentioned earlier its EconiQ™ product line. The EconiQ™ range is eco-efficient, reducing environmental impacts in sectors such as transportation, industry, and data centers. Additionally, the IdentiQ™ digital twin solution provides a digital representation of physical assets, enhancing the monitoring, operation, and maintenance of grid components, which is critical as grids integrate more renewable sources like wind and solar power.
3. Role in Emerging Markets and Global Partnerships
Hitachi Energy is also expanding its reach in emerging markets through strategic collaborations. This includes initiatives in the Asia-Pacific region, such as partnerships with local governments and corporations to support cleaner energy infrastructure in fast-developing economies. For example, in India, Hitachi is scaling up its Technology and Innovation Center to over 4,000 employees, offering advanced R&D services across 40 countries. These collaborations help bridge technology gaps, making advanced, sustainable energy solutions more accessible worldwide.
4. Emphasis on Sustainable Manufacturing and Carbon-Neutral Goals
Aligning with its Hitachi Energy 2030 Plan, the company is prioritizing sustainable practices throughout its operations. Investments are directed toward low-carbon manufacturing and carbon-neutral facilities to support their goal of a carbon-neutral supply chain. Hitachi’s eco-friendly portfolio is also gaining traction, with the company setting up environmentally optimized production lines and reducing its carbon footprint. The report stresses the importance of transforming manufacturing processes to minimize emissions and waste, a critical move given global sustainability demands.
5. Digitalization and Artificial Intelligence (AI) Integration
Digitalization is highlighted as a key driver for accelerating the energy transition. The use of digital twins, AI, and data-driven solutions facilitates efficient and predictive grid management. Hitachi Energy’s focus on AI-powered analytics aids grid operators in optimizing power flows, managing demand peaks, and identifying issues before they impact service. This digital focus is also vital for supporting the global rise of data centers, which are projected to consume a growing share of electricity as digital infrastructure expands to accommodate AI and big data applications.
6. Supporting Global Electrification for a Net-Zero Future
Hitachi Energy underscores electrification as the foundation of a net-zero future, with initiatives that support energy demands from electric vehicles, industrial sectors, and buildings. The report reflects a vision of a highly electrified future where renewable energy powers not just homes and industries but also transportation networks and urban infrastructure. To this end, the company’s investments in high-voltage products and HVDC (high-voltage direct current) technology are crucial in ensuring long-distance transmission of renewable energy from rural production sites to urban demand centers
In essence, Hitachi Energy's 2024 Sustainability Report highlights its substantial efforts in sustainability through innovative solutions, enhanced inclusivity, and strong governance practices. The company’s ongoing commitment to a carbon-neutral, inclusive, and ethically governed energy sector places it at the forefront of global efforts to build a sustainable future.
As I always say, together we are stronger.
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