In addition to reducing CO2 emissions from its operating sites, Lion advances product development with a focus on reducing CO2 emissions from sold products at the product use and disposal stages. Specifically, we are developing products that help save water and electricity, making packaging more compact and lightweight, and shifting from petroleum-based raw materials to carbon neutral plant-based raw materials. In 2020, looking at CO2 emissions during and after product use, emission intensity per unit of net sales was down 55% from 1990, while emissions in terms of absolute quantity were down 50%, meeting our targets for 2020.
Lion recognizes that understanding greenhouse gas (GHG) emissions throughout the supply chain is important to realizing a decarbonized society. Accordingly, since 2013, we have calculated GHG emissions throughout the supply chain based on the GHG Protocol Scope 3 standard. In fiscal 2020, our Scope 1, 2 and 3 emissions totaled 4.88 million t-CO2.
Going forward, we will continue to promote and develop products that help reduce emissions during product use, a stage that accounts for a large portion of product life cycle GHG emissions. By doing so, we will work to reduce GHG emissions.
In 2020, Lion was included for a second consecutive year in the Supplier Engagement Leaderboard, a select list of the highest rated companies under the Supplier Engagement Rating (SER) of the CDP, an international non-profit organization that provides systems for environmental information disclosure.
The SER is based on the CDP climate change questionnaire items about governance, targets, value chain (scope 3) emissions and supplier engagement strategies. The rating examines more than 5,600 companies around the world. The companies that receive the highest ratings for their actions and strategies to reduce greenhouse gas emissions and manage climate risk in their supply chains are selected for inclusion in the Supplier Engagement Leaderboard. In 2020, 400 companies, including Lion, were selected for the Leaderboard.
Lion works to reduce CO2 emissions and energy consumption intensity through the following efforts.
As a result of increased truck transport attributable mainly to urgent transport related to the COVID-19 pandemic as well as decreases in rail transport due to natural disasters, Lion’s modal shift rates in 2020 declined year on year. The modal shift rate for intra-company transport was 13% (compared with 15% in 2019) and that for long-distance transport over distances exceeding 500 km was 41% (compared with 46% in 2019).
Due in part to the decrease in modal shift rates, annual CO2 emissions from logistics came to 22,297 tons, up 7% year on year. Energy consumption intensity increased 4.4% compared with the previous year, for a five-year average increase of 4.2%, falling short of Lion’s target average annual reduction of 1% or more. Going forward, we will continue working toward this target.
The Eco Rail Mark system was created by the Ministry of Land, Infrastructure and Transport to certify companies and products that use rail freight transport for a certain portion of product shipment. Because distribution processes are typically opaque to consumers, the Eco Rail Mark is a useful means for companies to indicate that they use or their products are shipped using environmentally friendly rail freight transport.
Lion’s Eco Rail Mark certification was renewed in 2019. The certified Lion products are listed in the Eco Rail Mark pamphlet published by the Railway Freight Association as well as in its advertisements posted in train cars.
The following seven products are certified as surpassing the 30% rail freight transport rate required for product certification (as of March 2021).
In October 2020, Lion and Kao Corporation commenced regular joint two-way transportation between their respective operating sites. This initiative is expected to significantly reduce CO2 emissions.* At the same time, by making long-distance transport more efficient, the initiative is helping to reduce the burden on drivers. Going forward, by expanding joint logistics and improving labor conditions using relay transportation, we will work to improve logistics environments based on mutual understanding and cooperation with our trading partners and logistics contractors.
* 45% reduction in CO2 emissions (total for both companies, compared to previous transportation methods)
In the field of logistics data platforms, Lion is taking a leading role in solving logistics challenges facing the household consumer product industry. Lion collaborated with PLANET, INC., which operates a commercial logistics electronic data interchange (EDI) for the industry, in the preparation of its report outlining logistics EDIs in February 2020. Furthermore, Lion has carried out demonstrations of the use of advanced shipping notices (ASNs) to digitize receipts and simplify inspections, and is rolling out the use of ASNs sent to wholesalers for individual delivery trucks.
Going forward, we aim to promote collaboration between manufacturers, wholesalers and logistics operators to advance the digitization of data and the standardization of processes related to on-the-ground logistics in order to build a logistics EDI for the entire industry. Through these initiatives, we aim to improve work environments, improve labor productivity and reduce environmental burden while building sustainable, resilient supply chains.
Lion promotes the reduction of CO2 emissions during and after product use overseas by selling its proprietary plant-derived detergent ingredient MES*1 to overseas users. We estimate the CO2 emissions reduction achieved by such sales by assuming that MES is used to replace the conventional petroleum-derived detergent ingredient LAS.*2
In 2020 Lion sold approximately 17,000 tons of MES, contributing to a reduction of approximately 33,000 tons of CO2.
*1 MES: Methyl ester sulfonate
*2 LAS: Linear alkylbenzene sulfonate
Scope of Overseas Data
The consolidated overseas Group (excluding sub-subsidiaries)
Lion’s proprietary surfactants methyl ester sulfonate (MES) and methyl ester ethoxylate (MEE) not only offer excellent functionality, but, because they are made from renewable plant-based raw materials, their use in products helps reduce CO2 emissions.
After their use in detergents and other products, surfactants are broken down into CO2 and water by microorganisms in the environment. Because plants absorb CO2 as they grow, when surfactants made from plant-based raw materials break down and release CO2 after their use, there is no net increase in the amount of CO2 in the atmosphere (this is referred to as being carbon neutral). Lion will continue striving to utilize plant-based raw materials.