Honda Motor

Honda has invested significantly in research and development (R&D) into low-carbon innovations. The company invested USD 1,900 million in 2020, equivalent to 56% of its total capital expenditure (CapEx), meeting/exceeding the expectation that automotive companies should be investing 23% of CapEx in low-carbon R&D. The company disclose the environmental investments including R&D that has been invested in electric vehicles. This is a high level of disclosure compared to the rest of the sector.

Honda’s sales of low-carbon vehicles have seen no increase. In 2018, 0.4% of Honda’s sales were low-carbon vehicles, and remained 0.4% in 2020. The company released its first fully electric vehicle in 2020 and hence is somewhat behind the sector. The company is now being more ambitious targeting 40% of sales to be low-carbon vehicles by 2030. Honda should further increase its ambition, with its 1.5°C pathway expecting 64% of sales in 2030 to be low-carbon vehicles.

Honda has no clear strategy, promotional initiatives, or financial incentives to encourage customers to purchase low-carbon vehicles. To meet its target of 50% of sales being low-carbon by 2030, the company should set out a clear strategy to promote its low-carbon vehicles to customers. This can include providing financial incentives, such as charging equipment or discounts, marketing campaigns or customer financing for low-carbon vehicles.

Honda has set an annual emissions reduction target of 1% for its suppliers. The company requests that its suppliers provide emissions data through the CDP supply chain programme. In 2020 80% of procurement spend, representing 13.2% of supplier emissions, responded. However, it is unclear how the collected data is used to reduce emissions and if there are penalties for not meeting the reduction targets. Honda can reduce the emissions in its supply chain by making the reduction targets compulsory.

Honda has set a target to reduce scope 3 emissions by 100% by 2041 and plans to be carbon neutral by 2050. It has set low-carbon vehicle sales targets of 40% by 2030, to 80% by 2035 and then to 100% globally by 2040.

Honda plans to invest 30% of its current R&D resources in electric vehicles by 2025. Details of the technologies this will be invested in are not provided.

In 2020, only 0.4% of Honda’s sales were low-carbon vehicles. In 2020, the company invested USD 1,900 million in mitigation R&D which was 56% of its total CapEx.

Honda’s scope 3 emissions intensity decreased from 92.3 grams CO2 per passenger kilometre (gCO2/p.km) in 2015 to 88.8 gCO2/p.km in 2020. The fuel economy of internal combustion engines (ICE) has not decreased from 2015 to 2020.

Honda has committed to becoming carbon neutral by 2050 but has made little progress to achieve this. An increase in low-carbon vehicle sales, a reduction in the fuel economy of ICE vehicles and a reduction of scope 1 and 2 emissions intensity are required for the company to align with its 1.5°C pathway.