Amid increasing climate risks and growing calls from the public and shareholders for corporate climate action, Canon’s newly announced 2030 target significantly reduced its ambition from 50 per cent absolute emissions reduction against 2008 levels, according to new analysis by Transition Asia, a non-profit think tank that focuses on driving 1.5°C-aligned corporate climate action in East Asia.
Released today, the two reports, Analysis of Canon’s New 2030 Targets (also available in Japanese), and Taking Stock of Japan’s Digital Camera Manufacturers’ RE Ambition and Action, find that Canon’s new target is incompatible with IPCC recommendations for 1.5°C mitigation pathways. It is also lower in ambition than many in Canon’s peer group – including Fujifilm, Nikon, Ricoh, Sony and Panasonic - reflective of weak action on grid decarbonisation and RE procurement of merely 4.34 per cent.
Although Canon’s 2030 emissions intensity target remains unchanged between 2021 and 2022, it has lowered its absolute reduction target from 50 per cent reduction from 2008 levels to 30 per cent from 2018 levels. In updating the absolute reduction target base year without achieving emissions reduction between 2008 to 2018, Canon has effectively reduced its overall ambition.
Transition Asia has modelled Canon’s current and recent growth projections, efficiency achievements and energy consumption to forecast Canon’s emissions trajectory from 2022 to 2030. The results indicate Canon would fail to meet the company’s original stated target. Rather than adjusting its approach to address these issues, Canon appears to have lowered its ambition by significantly reducing the absolute target to match the current insufficient action.
It is also estimated that Canon is likely to only achieve a 27.6 per cent reduction in operational (Scope 1 & 2) emissions by 2030 compared to 2010. This is far short of the IPCC 1.5°C recommendation of about 45 per cent reduction from 2010 to 2030.
Lowering ambition puts Canon at odds with its peer group. While Canon itself acknowledges the targets are not science-based, almost all of Canon’s competitors have SBTi-approved 1.5°C targets. In 2021, for instance, Fujifilm and Kyocera updated their 2030 targets showing greater ambition.
The analysis also highlights some of the ways Canon could double down on its climate ambition and stay on track for the 1.5°C alignment. These include investing in RE Power Purchase Agreements (PPAs) or captive power to cover 35 per cent of its electricity demand in Southeast Asia, approximately 135GWh of electricity, where Canon has operations and plans for further expansion.
Presently, it is estimated that Canon would need to increase its annual RE growth rate 28 times to come in line with the IEA, which recommends that G7 countries achieve 60 per cent renewable electricity by 2030.
Canon should also actively call on the Japanese government to deliver on its strategic energy plan and decarbonise the grid to at least 250gCO2/kWh16 by 2030. In fact, Canon is not involved in active policy engagement and has not put forth any policy recommendations, with the Canon Institute for Global Studies having previously spoken out against RE development in Japan.
“To stay competitive among its global industry peers and mitigate growing commercial risks associated with the climate crisis, Canon needs to urgently commit to a 2030 absolute emissions reduction target that is at least equivalent to 45 per cent from 2010 (excluding offsets), and actively engage with its stakeholders to advocate for a 1.5°C-aligned national RE policy in Japan,” commented Carmen Gravatt, Transition Asia’s Co-Director.
Other findings include:
- Canon’s new 2030 absolute emissions reduction target has been approximately halved from its original 50 per cent commitment from 2008 levels to 30 per cent from 2018 levels. In updating the absolute reduction target base year without achieving emissions reduction between 2008 to 2018, Canon has effectively lowered its overall ambition;
- Canon’s current renewable electricity (RE) target of only 4.85 per cent for 2023, is well below its industry peers, almost all of which have SBTi-approved 1.5°C targets and/or have committed to RE100;
- Canon is urged to focus on RE procurement and advocating for grid decarbonisation in its operational geographies - Japan and Southeast Asia – and for the government to remove regulatory barriers.
- While all its peers have committed to 100 per cent RE, Canon has only committed to 4.85 per cent. It also has the lowest current RE procurement, with only 4.34 per cent of its electricity coming from renewable sources;
- Out of the six digital camera manufacturers surveyed by Transition Asia, only Sony is close to the average RE100 commitment and ahead of the IEA Net Zero analysis, which recommends that G7 countries achieve 60 per cent RE by 2030.
About Transition Asia
Founded in 2021, Transition Asia is a Hong Kong-based non-profit think tank that focuses on driving 1.5°C-aligned corporate climate action in East Asia through in-depth sectoral and policy analysis, investor insights, and strategic engagement. Transition Asia works with corporate, finance, and policy stakeholders across the globe to achieve transformative change for a net-zero, resilient future. Visit transitionasia.org or follow us @transitionasia to learn more.
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