"MakingEvery Product Green" (Matsushita Electric)

JFS Newsletter No.12 (August 2003)
"TOWARD A SUSTAINABLE JAPAN - CORPORATIONS AT WORK" ARTICLE SERIES Article No. 3
http://panasonic.net/
http://panasonic.co.jp/eco/

Founded in 1918, Matsushita Electric Industrial Co., Ltd., including its group companies and subsidiaries, has grown to become a comprehensive worldwide electrical and electronic product manufacturer with 290,000 employees in about 40 countries. Its products range from electronic components to consumer electronic products, home appliances, factory automation equipment, information and communications equipment, and housing-related products.

Its annual sales volume in fiscal 2002 amounted to 62 billion U.S. dollars (7.4 trillion yen), with sales distribution in Japan (47%), the Americas (19%), Europe (13%), and Asia/China and other regions (21%). In Japan, Matsushita products are well known as the "National" brand, while overseas, "Panasonic" (global), "Technics" (audio only), and "Quasar" (North America only) brands may sound more familiar. http://panasonic.net/corporate/

As a global manufacturer with a global impact on the environment, Matsushita is also known as a pioneer in environmental management. With this magnitude of operation, its carbon dioxide emissions from domestic facilities alone amount to 0.11 percent of Japan's total CO2 emissions (0.27 percent of emissions in its industry), and its chemical substance emissions and transfers amount to 0.2 percent of the country's total.

Aware of its responsibility, Matsushita has been working not only to reduce environmental impacts throughout the product life cycle, but also to facilitate the realization of sustainable society through the development of and communication about environment-friendly products. Matsushita's goal cannot be more clear and ambitious; it is "to make every product a Green Product."

In this column, we look at Matsushita's standards for environment-friendly products, as well as how the products are being developed and messages communicated, and what kind of ripple-effects they are likely to have on society.

What is a "green product"? The definition varies with each company, but it must be clear and challenging enough to have significant impact. In Matsushita's case, products that feature environment-friendly designs are called "Green Products" (GP), and they are divided into two categories: (1) "products for improving environmental efficiency," which minimize the impact on the environment during product's life cycle, and (2) "products for solving environmental problems," which are developed with the objective of addressing environmental problems.

Furthermore, in pursuit of the ultimate concept of Green Products, Matsushita is developing what it calls "Super GP" (Super Green Products). These products are acknowledged in-house as "sustainability-oriented products" that not only can dramatically improve environmental efficiency but also can create mainstream trends that will facilitate the realization of a sustainable society.

For "products for improving environmental efficiency," the standards are clear and demanding. The product must achieve targets in one or more of the following three categories and be at the industry's top level in the other categories. The three targets in fiscal 2002 were for (1) an energy use index (improve by more than 12 percent from the fiscal 2002 level), (2) chemical substances (introduce lead-free solder and discontinue the use of 6 substances), and (3) a resource-use index (improve by more than 20 percent from the fiscal 2002 level).

In regard to discontinuing the use of hazardous chemical substances, Matsushita made a major breakthrough this year. By the end of March 2003, the company had succeeded in completely eliminating lead-based solder from all Panasonic- and National-brand products produced around the world, affecting approximately 12,000 products. The most basic structure of an electronic product is the connection between parts, and by allowing electricity to pass through the joint a multitude of functions become possible.

Solder has been used to join things for about 5000 years and it has always been assumed that lead was an essential ingredient. Matsushita's lead-free solder will be an important step toward clean production, by minimizing the use hazardous chemicals.

Partly assisted by this breakthrough, 583 models of products developed in fiscal 2002 were identified as Green Products, boosting the share of these products to 41 percent of all products developed in the corporate group (surpassing the year's target of 28 percent by a wide margin). Through newspaper ads and TV commercials, details of how those products achieved environment-friendly designs were communicated to and recognized by the general public. Matsushita's next target is to expand the share of Green Products to 90 percent of the products it develops by fiscal 2010.

Furthermore, this year, for the first time two products were accredited as "Super GP": the "Natural Fluid (HC) Refrigerator" and the "Intelligent Power Device (IPD)." The former is a refrigerator that uses no ozone-depleting CFCs in the refrigerant or for foam insulation material. With newly-developed high-performance vacuum insulation material, the refrigerator makes dramatic improvements in energy efficiency and reduces global warming impacts (measured by what it calls the GHG [greenhouse gas] factor). The fact that the product set a "CFC-free" trend in the industry was seen as having a positive ripple effect in society. The IPD is semiconductor component for switching the amount of power supplied to electrical products. It detects the standby mode and dramatically reduces standby power consumption. As this general-purpose device can applied to many products, it can be expected to contribute to energy conservation in society overall.

At first glance, Matsushita's goal to "make every product a Green Product" may seem overly ambitious. Matsushita president Kunio Nakamura writes eloquently about his company's philosophy in its Sustainability Report 2003. It says, (1) environmental concerns mirror corporate ethics and are corporate-level management challenges, (2) increasing transparency with respect to environmental issues heightens corporate ethical behavior, and (3) when employees take pride in their own work with vigor and enthusiasm and when we conduct business fairly and ethically, this will demonstrate the ability as a corporation to develop prosperously and sustainably in the future. When we read this philosophy, we can see that the above target is not just an ambition. It is a natural and inevitable path firmly rooted in the company's corporate identity.