Environmental Vision

Procuring raw materials and components, and processing them into products, our company provides our customers with its various products. In this process, and in the use of the products by customers, a large volume of resources, including energy, is consumed. To continue our business globally, we need to use limited resources in an efficient and sustainable way.

Toward the realization of zero environmental impact, we will promote the reduction of greenhouse gas emissions in our business activities, a thorough reduction of waste or loss of energy based on the Kubota Production System (KPS), the expansion of the recovery and reuse of waste energy and of the use of renewable energy, water-saving in areas under high water stress, and maximizing the utilization efficiency of resources in the product lifecycle. In addition, we will develop our efforts toward zero environmental impact in our entire business value chain.
However, it is not easy to achieve zero environmental impact. To steadily approach zero environmental impact, we will systematically promote the reduction of greenhouse gases, implementation of energy saving, reduction of waste, conservation of water, and reduction of Volatile Organic Compounds (VOCs). We will also take up a challenge of sustainable business activities that can maintain the Earth’s self-purification capability and carrying capacity.

In addition to the mitigation of climate change (controlling greenhouse gas emissions), Kubota also engages in environmental conservation activities and provides environment-conscious products and solutions to adapt to the effects of climate change (avoiding or minimizing damage brought about by climate change) and to address water and waste issues. In these ways, we are contributing to the realization of a sustainable, especially carbon-neutral and resilient society.

Greenhouse gas emissions from the food sector, including land use in the agricultural field, are said to account for about 24% of the world’s total emissions. It is believed that without efficient food production, greenhouse gas emissions will increase. According to the IPCC’s Sixth Assessment Report, atmospheric concentrations of methane and nitrous oxide, which are far more damaging greenhouse gases than CO₂, are rising and measures are needed to curb their emissions. Also, climate change is affecting the reduction and relocation of arable land, agricultural practices, and even ecosystems. Given the declining number of farm workers owing to the impact of urbanization in rural areas, more efficient food production in limited areas under cultivation is now needed.

In the “food” sector, which is one of our business areas, we believe we can reduce emissions of not only CO₂, but also methane and nitrous oxide, and contribute to more efficient food production by further evolving smart agriculture, the automatic operation of farm machinery, farming technology, and water environment solutions technology. By increasing the productivity of agriculture, we will help reduce greenhouse gas emissions in the agricultural sector by improving the efficiency of agriculture, reducing energy consumption, conserving resources of fertilizer and pesticides, and curbing deforestation intended to expand agricultural land.

Under the influence of climate change, the frequent occurrence and intensified damage of weather disasters have become remarkable. In addition, with available water resources unevenly distributed depending on the regions, the population who cannot access safe water has risen to 1.6 billion people. Even if we succeed in controlling the global rise of temperature due to climate change to less than 1.5°C, the population who has to face water shortages is expected to increase. Also, population increase and improved living standards are assumed to further aggravate the resource and waste problems and agricultural water shortages due to mass production, mass consumption, and mass waste disposal.

In the “water and the environmental” fields, we will provide products, services, and solutions, such as products to contribute to disaster prevention and disaster recovery, and efficient water monitoring and management systems that utilize AI / IoT, which are designed to avoid and mitigate damage due to the influences of climate change, including frequent occurrence of climate disasters, changes in agricultural styles, and increase in the frequency of work-related heatstroke. We will further expand our products, services, and solutions intended to realize advanced recycling of water resources and waste and control water pollution and air pollution, contributing to natural disaster-resistant community-building and the realization of a resilient society.

Based on the scenarios of the Intergovernmental Panel on Climate Change (IPCC) and the World Resources Institute (WRI), we analyzed a social image in 2050 when the temperature rises by 1.5℃/2℃ and 4℃. Global environmental problems, including climate change and water risks, may not only have negative effects on our company's operation in the future, such as soaring energy and water prices and frequent occurrence of natural disasters, but also further aggravate social problems in the “food, water and the environment” fields, which are part of our company's business areas. Also, the delayed responses to these environmental problems may pose a risk to our company's business activities. To continue our global business, we believe it is essential to strike a balance between business development that can contribute to solving social problems toward the achievement of SDGs and ESG management that includes responses to the environmental problems.

The world population is expected to approach 10 billion people by 2050, mainly in emerging countries such as Africa and Asia, and the food demand along with the population increase is also expected to increase about 1.6 times. Also, economic development can enhance the need to improve people's living environment, and can result in an increase in global demand for energy and consumption of many resources. The same will be applied to water demand. Water demand will increase, especially in the manufacturing industry and for the use for power generation and for domestic use, and is expected to be about 1.6 times the current demand by 2050.
Increase in food demand and water demand, expansion of energy demand due to urbanization, etc., and cultivation of new land for food production may aggravate the climate change problem. Climate change can have a huge negative impact on people's lives. If rainfall patterns are altered, conventional crop production may become impossible as arid or high precipitation belts shift geographically. Weather anomalies may also cause populations to be affected by more frequent flooding and other water damage.
If we continue our current economic activities and social activities without efficiently utilizing our limited resources, such as energy, people's current lifestyles themselves may no longer be feasible.

We believe that to achieve the goals stipulated in the Paris Agreement, each country will accelerate their moves for energy saving and the reduction of CO₂ emissions, and strengthen related laws and regulations, which should result in a growing concern about climate change among markets and customers. This is why we have assumed that the needs for energy saving, decarbonization, and electrification will be enhanced.

For example, tractors, combine harvesters, rice-transplanters, construction machinery, and diesel engines, which are our company’s major products, are under application of the exhaust gas regulations of Japan, European countries, and the U.S., etc. Our diesel engines are also used for construction machinery, which plays an active role in the development of urban areas. In the future, since regulations for each country’s engines may be tightened, we believe that we need to invest in the development of diesel engines that conform to new exhaust gas regulations. Also, if each country’s efforts toward the mitigation of climate change are advanced, while the ratio of fossil-fuel power generation decreases due to strengthened carbon taxes, energy prices are expected to soar with an increase in the ratio of renewable energy power generation.

As calls for the environmentally sound performance of products grow around the world in connection with climate change, the needs for high-energy-efficiency products and solutions that enable the same effects should be enhanced also in the fields related to water treatment as well as the agricultural machinery and construction machinery that Kubota offers. In our business activities, we also believe that with a risk of increase in the energy procurement cost, energy saving and expansion of the use of renewable energy will become important issues.

If the world's average temperature rises by 4℃, with the changes in the rainfall and climate patterns, weather disasters are expected to further increase, such as with the typhoons and torrential rains which have been observed around the world recently. Depending on the areas, it may be difficult for people to access the safe water required for business activities and livelihood due to drought. These weather disasters may cause a suspension of business activities, affect agricultural produce, and increase damage on the basic needs of people's livelihood such as water infrastructure.

For instance, in coastal regions and rainy regions, heavy rain or flooding may cause inundation of plants, blackouts, logistic suspension, and delayed shipping. Also, with increased frequency and length of these weather disasters, there are concerns over further expansion of damage. Even in the production of farm products, climate change is expected to have negative influences such as causing changes of arable land and a reduction in the amount of harvested crops, and may further affect the sales of agricultural machinery. Climate change may cause the occurrence of drought, which may cause the occurrence of risks for business activities, such as water shortages and restrictions on the amount of water in the relevant regions.

While climate change is expected to affect the changes of arable land and crop production, we believe that the necessity of agricultural solutions for continuing farming even under a range of climate conditions, and of smart agriculture capable of realizing efficient production in limited land, will increase. Likewise, we believe that contributing to the building of a natural disaster-ready city that can maintain people's living environment even after the occurrence of a natural disaster will be our important task.

• The above statements are the outline of the results of scenario analysis based on the proposals of TCFD for the examination of the Kubota Group's Environmental Vision. The world in 2050 may be different from each scenario. We will continue to improve our information disclosure based on the proposals of TCFD.

As people's lives become more and more enriched, new environmental problems to be solved will occur in the future. However, we do not wish to have a new society at the price of the global environment. As a result of analyzing a future society image based on the impact of climate change, the Kubota Group believes that what society expects for us in order to make the world sustainable in or after 2050 is as follows:

• Realization of carbon neutral society aimed at mitigating climate change by curbing greenhouse gas emissions from the agricultural sector
• Realization of resilient society capable of adapting to climate change, such as by preparing for natural disasters and dealing with water /air pollution and waste issues