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Honda Motor Company

Known for Honda, Acura

Honda Motor Company is a publicly listed auto manufacturer headquartered in Tokyo, Japan. In 2019 it had US$137.3 billion in revenue and sales of over 5.1 million vehicles. Honda has a global presence. Its most significant markets are the US and China.

Summary

Honda has a performance score of 7.3 out of 20 against a well below 2-degree pathway. This is lower than Honda’s 2019 performance score of 10.2, when it was assessed against the less ambitious 2-degree pathway.

Honda clearly reports the specific amount it spends on low-carbon research and development (R&D) which is an unusually high and transparent level of disclosure and means its score in this area has doubled since 2019. Honda’s R&D spend is equal to 70 percent of capital expenditure, significantly exceeding the 5 percent threshold for low-carbon R&D spend seen as necessary for the low-carbon transition. This makes Honda a leader in this area of the assessment.

Since 2014 the company has reduced manufacturing emissions from 1.2 tonnes to one tonne per vehicle. The company plans for two thirds of its vehicles to be electric by 2030, with battery electric vehicles (BEV) and plug-in hybrids (PHEV) to make up 15 percent and conventional hybrids 51 percent. BEVs are far preferable to PHEVs and conventional hybrids as they have lower emissions. A focus on conventional hybrids will make it impossible for Honda to achieve emissions reductions in line with its well below 2-degree pathway.

Total score: 7.3/20
Assessment Note: Honda Motor Company received a full ACT assessment in 2019.

Performance module name	Performance module score	Rank (0-30)
Targets	0.2 /3	#18
Material Investment	0.3 /0.4	#7
Intangible Investment	2.4 /2.4	#1
Sold product performance	2.7 /7	#20
Management	1.2 /2.2	#6
Supplier	0.3 /1.2	#10
Client	0.0 /0.8	#15
Policy Engagement	0.1 /1.2	#22
Business Model	0.1 /1.8	#24

Honda does not have a science-based target. It has set combined targets for scope 1 and 2 emissions (from direct operations) and scope 3 emissions (from outside direct operations) together but it is difficult for external assessors to audit and assess consolidated targets. Honda can improve by setting a Science Based Targets Initiative-validated target for each of its scope 1, 2 and 3 emissions. It should also share scenario analysis and stress testing results and extend its low-carbon planning beyond 2030.

Further, its low-carbon vehicle share of 0.3 percent is far below the level required by its decarbonisation pathway (5.7 percent). Honda does little to incentivise customers to switch to low-carbon cars and no evidence of new business models to aid its transition to the low-carbon economy was found. One recent positive move has been Honda withdrawing from Formula 1 to shift resources to researching and building low-carbon vehicles.

See results for

2019
2021

More about the company

Headquarters: Japan
Ownership structure: Publicly listed
Revenue (2019): US$137.3 billion
Number of vehicles sold (2019): 5,177,575
Website: https://www.honda.com/