These Japanese Auto giants face climate-change risks

According to a Greenpeace analysis, the three largest automakers in Japan are among those at the most risk from climate change because a large portion of their manufacturing is still centred on the island nation.

According to the environmental advocacy group, which examined data from Moody's ESG Solutions on physical risks, Toyota, Honda, and Nissan will face significant challenges in the coming years ranging from hurricanes and flooding to high temperatures and water shortages based on where their factories are located.

The effects that manufacturers have on the environment, society, and governance are frequently in the news when it comes to these topics. However, as climate change increases the frequency and severity of natural disasters, automakers will be at "a significant level of physical risk" of damage to their operational facilities and supply-chain disruptions, according to Greenpeace.

The list partially captures geographic realities. The Asian automakers, who also have operations there, have facilities dispersed over a typhoon-prone archipelago. Japanese for "huge wind" is the word itself. Volkswagen Group, Stellantis, and other European automakers with manufacturing sites in northern climes are near the bottom of the list of significant automakers experiencing less climate danger.

The 2011 earthquake and tsunami had a significant impact on Japanese manufacturers, causing supply chain disruptions and production delays. As a result, Toyota and other companies overhauled their supply chains. According to analysts, this move enabled them to weather the chip scarcity better than other companies.

Toyota pushed back on the study, saying that it has worked to build a “disaster-resilient supply chain,” disclose its emissions and taken steps to secure water supplies. Almost 30 percent of Toyota’s vehicle output came from Japan in the first half.

“Toyota has a solid track record of working within its resources to restore its operations and production in the event of climate change-related disasters, earthquakes and fires with humanitarian assistance and early restoration of affected areas as the utmost priority,” the company said in a statement. “It is impossible to predict exactly when, where, and what kind of disaster will occur in each country and region, we believe it is more important to create a system and human resources to minimize damage through early restoration and other measures.”

Nissan said it conducts long-term assessments of climate-change risks, and takes that into account when setting strategy for its supply chain. “We’ll continue to hold a dialogue with stakeholders and proactively strengthen our activities,” Nissan spokesman Shiro Nagai said.

A spokesperson from Honda declined to comment on the report, which will be published soon.

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