Approaches to Reduce the Environmental Impact of Chemical Substances

In order to prevent contents of hazardous substances prohibited under the EU RoHS Directive*1, published in 2002 and revised in 2011, and the like to Panasonic products, it is important not on to pay attention to the contents at the stage of product design, but also to ensure that specified substances are not contained in products to purchase.

Therefore, Panasonic has rolled out the "Do not accept! Do not use! Do not ship!" campaign throughout the each production process from designing to shipment inspection in production activities at business sites across the world since October 2005. Specifically, as for the stage of inspection for incoming components, we have established a mechanism to check and analyze whether specified chemical substances are included by introducing an analyzer. In addition, we have supported to establish a Product Chemical Substances Management Structure, by periodically conducting environmental audits for suppliers of components/materials which may have high risks of containing specified chemical substances.

Specified chemical substance management system

To ensure compliance with the Directive, Panasonic has been promoting the “Do not accept! Do not use! Do not ship!” campaign throughout the various production stages from designing to shipment inspection in business sites.

Meanwhile, as represented by the enforcement of the REACH regulation*2 in the European Union, the world is moving toward the goals agreed at the World Summit on Sustainable Development (WSSD) held in 2002, which is to produce and use all chemical substances in a manner that minimizes their impact on human health and the environment. In support of the precautionary approach proposed in the Rio Declaration made at the Earth Summit in 1992, Panasonic aims at manufacturing products in line with our basic policy of reducing the use of chemical substances that might adversely affect human health and the environment throughout their lifecycles. As for concrete activities, we have worked to comply with relevant regulations such as EU RoHS, as a matter of course. In addition, we have worked to reduce the environmental impact of our products by (1) identifying hazardous substances contained in our products, (2) evaluating these substances on their environmental impact, and (3) voluntarily reducing or discontinuing their use in case of any environmental risks.

*1 Directive on the Restriction of the use of certain Hazardous Substances in electrical and electric equipment
*2 Regulations on the registration, evaluation, authorization, and restriction of chemical substances.

Process to Reduce the Environmental Impact of Chemical Substances

We aim to reduce the environmental impact of our products by (1) identifying hazardous substances contained in our products, (2) evaluating these substances on their environmental impact, and (3) voluntarily reducing or discontinuing their use in case of any environmental risks.

In order to definitely implement such activities described above, we issued Panasonic Chemical Substances Management Rank Guidelines that specifies prohibited chemical substances and management substances concerning products and activities at factories. We request to take actions to the chemical substances in accordance of the guidelines, not only to Companies in the Panasonic Group, but also to our suppliers. In fiscal 2013, we added Level 3 of prohibited substances to the category of the Chemical Substances Management Rank Guidelines (For Products). We not only consider nonuse of the prohibited substances, or the substances to be prohibited under laws and regulations, but we also consider to prohibit concerned substances that may adversely affect human health and the environment in the future. Further, we are striving to comply with relevant laws and regulations, and mitigate effects of toxic substances on human health and the environment by increasing the number of globally prohibited substances (Level 1) beyond boundaries of countries subject to the applicable laws and regulations from 21 substances/groups in fiscal 2015 to 25 substances/groups in fiscal 2021.

The Chemical Substances Management Rank Guidelines (For Products) and relevant documents, which includes clear description of prohibited substances and management substances,, is available for your downloaded from the following website. (Green Procurement).

Chemical Substances Management Rank Guidelines (For Products)

Rank Definition
Prohibit Level 1 (1) A substance contained in products that is prohibited by existing laws and regulations; or a substance
where the upper limit of concentration is specified.
(2) A substance that will be prohibited in products by laws and regulations or where the upper limit of concentration will be specified within one year after the revision date of this Guidelines. Note that there is a case that a substance is specified as the Level 1 prohibited substance more than 1 year before the enforcement date, because of the enforcement dates of the law and the Rank Guidelines.
Level 2 Substances other than those specified as Level 1 and to which either of the following criteria applies:
(1) Substances to be prohibited in products after a certain period by a treaty, law, or regulation.
(2) Substances that are prohibited in products by the Panasonic Group prior to the effective period specified by a treaty, law, or regulation.
(3) Substances whose use is voluntarily restricted by the Panasonic Group.
Level 3 Any substance other than those specified as a Level 1 or Level 2 Prohibited Substance that is under review for prohibition by laws, regulations, etc., and the clarification of substitution-related issues as well as the timing for prohibition will be reviewed by the Panasonic Group in light of future legislation trends.
Manage Substances whose actual use in products needs to be understood and for which consideration needs to be given to human health, safety and hygiene, adequate treatment, etc. The intentional use of these substances is not restricted, but their use and contained concentration must be monitored.

Note: The laws, regulations and the substances subject to the above table are chemical substances specified as Class I Specified Chemical Substances under the Act on the Evaluation of Chemical Substances and Regulation of Their Manufacture, etc.; toxic substances whose manufacture etc.
is prohibited by Article 55 of the Industrial Safety and Health Act; EU RoHS Directive; and Annex XVII of the EU REACH Regulation. For more details, see the chapter on Specified Managed Substances in the Chemical Substances Management Rank Guidelines (For Products).

Chemical Substances Management Rank Guidelines (For Factories)

Rank Definition
Prohibit Use of the following substances should be immediately discontinued:
Carcinogens for humans
Ozone depleting substances
Substances whose use is prohibited by Panasonic
Chemical substances designated as Class I Specified Chemical Substances by the Japanese Act on the Evaluation of Chemical Substances and Regulation of Their Manufacture, etc.
Substances whose manufacture is prohibited by the Japanese Industrial Safety and Health Act
Substances whose manufacture and use are prohibited by international treaties
Reduce Substances whose use, release and transfer should be identified and reduced.
Substances other than prohibited substances that might pose risks to human health and the environment.

Note: Covered legislation include: PRTR Act (chemical substances), environmental criteria under the Basic Environment Act; the Industrial Safety and Health Act; and the Stockholm Convention. For more details, see the contents on The Aim of Establishing the Chemical Substances Management Rank Guidelines (For Factories) in the Chemical Substances Management Rank Guidelines (For Factories).

History of Our Initiatives to Reduce the Environmental Impact of Chemical Substances

*3 Excluding applications where the quality such as safety cannot be ensured, or applications where the material is designated by laws and regulations.
*4 A reduction activity that promotes cutbacks in the use, release, and transfer of chemical substances by 33% in three years and by 50% in six years, compared to the fiscal 1999 level.

Management of Chemical Substances in Products

To minimize the environmental impact of chemical substances contained in products, we endeavor to identify chemical substances used in the components and materials of our products. In addition, for substances that are prohibited in products in major developed countries because of laws and regulations such as the European RoHS Directive, we manage the substances not to be used and/or contained in our products by designating them as prohibited substances except the substance for specific usage which is unavoidable to use its substitution. We will also conduct environmental impact assessments for the managed substances contained in our products. As for a substance whose impact on human health and/or the environment cannot be ignored, we plan to reduce or prohibit use of the substance.

Continuously updating information concerning chemical substance contents

The electrical and electric products Panasonic manufactures and sells consist of various raw materials and components supplied through a long supply chain from material manufacturers to many component manufacturers. To contribute to the achievement of the global goals set at the WSSD, it is important for us to disclose and communicate information on the chemical substances used in our products across the supply chain, for which we must promote cross-industrial initiatives to establish and disseminate an effective system. Panasonic is a member of the Joint Article Management Promotion consortium (JAMP). Approx 440 major companies from various industries, such as chemical, component, and equipment manufacturers are also members of JAMP. We are proactively formulating, utilizing, and disseminating chemical substance management standards and systems through this organization.

We have started up a product chemical substance management system in fiscal 2005. From July, 2009, Panasonic’s 10,000 suppliers of materials and components provided us the data on chemical substances contained in their products, using JAMP’s data transmission formats (JAMP_AIS and JAP_MSDSplus).

Meanwhile, in Japan alone, the workload of upstream suppliers increased, as a number of hazardous substance inspections were carried out throughout the supply chain using own company format. Having recognized the issues obtained from the inspections, the Ministry of Economy Trade and Industry proposed a new scheme to introduce "chemSHERPA," for sharing and exchanging information on chemicals contained in components and products. Because the format adopted for chemSHERPA complies with IEC62474, the international standard on material declaration for the electrical and electronic machinery industry and their products, we agreed to use chemSHERPA format, and in January 2018, started full-scale use of chemSHERPA as a data gathering format. With the supply chain expanding to a global scale, it is particularly important for overseas suppliers to deepen their understanding on the handling of hazardous chemical substances. Therefore, we carried out education programs for persons in charge of chemical substance management and suppliers at more than 100 of our business sites in ten countries including China and other Asian countries. At the same time, we completed conversion from JAMP format to chemSHERPA by June, 2018, when the JAMP format became unusable.

(The JAMP website was merged into chemSHERPA on March 15, 2019)

While the Japanese automotive industry has been using the JAMA/JAPIA sheet*5 to share information on chemicals used in products in the supply chain, IMDS*6 is actually the de-facto standard material data system used by the international automotive industry. With the backdrop of the Japanese automotive industry now shifting to IMDS from JAMA/JAPIA sheets, in October 2020 we undertook a full data migration to IMDS for use in our automotive business. We held seminars to more than 200 suppliers and completed a successful data migration. This means that we can now obtain data for the materials in the components received from our suppliers through IMDS into our management system for the chemical substances in our products, and, at the same time, we can deliver product chemical data to our customers. The system thus makes for easier material data communications throughout the supply chain.

Companies that procure electronic components need to fully understand the information on the substances contained in the components at the point of selection or usage in order to comply with the EU RoHS Directives and REACH regulations. Particularly, as the REACH Substances of Very High Concern (SVHC) List is updated every six months, those companies expect their suppliers to speedily provide information on the latest substance to Panasonic. In order for the companies procure electric components to speedily and effectively understand information on chemical substance contents, we have published a table of RoHS and REACH compliance status on our website since November 2012. The table covers our RoHS Directive compliance information and the substances designated in the RoHS / REACH Confirmation Report for all our major generic electronic components.

*5 The standard material data format in the Japanese automotive industry (standardized by the Japan Automobile Manufacturers Association and the Japan Auto Parts Industries Association).
*6 International Material Data System: Material data system for automotive industry that is globally used.

For products covered by the Act on the Promotion of Effective Utilization of Resources of Japan, the Panasonic Group does not manufacture, import, or sell products that contain specified chemical substances which exceeds the limited value in non-exempt parts. For more details, see Information on the Content of specified chemical substances Chemical Substances in Covered Products below.

In June 2015, the Act on Preventing Environmental Pollution of Mercury was enacted to implement measures agreed in the Minamata Convention on Mercury. The act requires manufacturers of products containing mercury to provide information such as labelling so that such products are appropriately sorted and discharged when being disposed of. In order to communication information concerning the mercury used in our products to customers, we have established a new webpage, Information Based on the Act on the Preventing Environmental Pollution of Mercury, in May 2017.

Assessing the Impact of Chemical Substances

Scientifically identifying the impact on human health and the environment of products containing chemical substances is vital to the development of products with low environmental impact. We are engaging in activities designed to assess the levels to which customers are exposed to substances of very high concern (SVHC), as well as safety during product usage.

To date, we have assessed effects of ceramic fibers used in certain models of commercial microwave ovens. As part of our efforts to comply with the EU REACH regulation which requires preparing information for the safe use of products containing a certain amount of SVHC, we have created and publicized the safety assessment document. The exposure was considered to be nominal with little concern for any effects on human health. Furthermore, usage of ceramic fibers in our products was discontinued in December 2010.

Reduction in Use and Discharge of Chemical Substances

Fluorocarbons (CFC) used as refrigerants, insulating materials, and the like for freezers and air conditioners, have properties which are known to cause ozone layer depletion and global warming. Therefore, Panasonic has devoted to develop the technology to use CO2 as a refrigerant which has extremely low effects on ozone depletion and global warming, and has sold a home water heater using the low CO2 refrigerant since 2001.
Although the low CO2 refrigerant is suitable for heating to maintain a certain degree of temperature, it was difficult to be used in refrigerators and freezers, especially in large commercial equipment due to insufficient cooling efficiency and size. However, with support from the New Energy and Industrial Technology Development Organization (NEDO), Panasonic developed a refrigeration system using CO2 refrigerant, and has delivered CFC-free freezers and refrigeration showcases to supermarkets and convenience stores with the CO2 refrigerant in Japan since 2010. For wall-mounted home air-conditioners (AC), we are promoting changing over from non-inverter types of AC, not only to more eco-friendly inverter types of AC with high energyefficiency, but also to the AC with new refrigerant R32 whose Global Warming Potential (GWP) is low.

In fiscal 2020, we introduced into Hong Kong's window air-conditioner market new models with the industry's first inverter system using the new R32 refrigerant, which has contributed to reduce environmental loads.

OCU-CR2001VF, a fluorocarbon-free freezer using CO<sub>2</sub> refrigerant

OCU-CR2001MVF, a fluorocarbon-free freezer using CO2 refrigerant

FPW-EV085, a display case compatible with a fluorocarbon-free freezer

FPW-EV085, a display case compatible with a fluorocarbon-free freezer

In addition, as measures against ozone depletion caused by HCFCs, a refrigerant called R410 that does not deplete the ozone layer was used in room air conditioners; however, this substance has an issue of its very high very high Global Warming Potential (GWP). Therefore, Panasonic developed a model that uses a new refrigerant R32, which has a lower GWP and introduced it launched sales of the model in 2013. Furthermore, PT. Panasonic Manufacturing Indonesia, which owns the factory for manufacturing room air conditioners in Indonesia, redesigned its production facility that used an ozone-depleting HCFC refrigerant R22 to one using R32 in fiscal 2015, and started supplying new R32-based air conditioners. Thereby, Panasonic contributed to the Indonesian government's initiative to eliminate the use of HCFCs.

Window air-conditioner unit with the new R32 refrigerant, CW-HZ180YA

Mercury lamps are currently widely used as the light source for projectors, because they provide high luminosity easily. However, mercury can have a serious impact on human health and the environment if not treated properly, and the short life of the lamps causes high consumption of resources as well as high environmental impact. For these reasons, Panasonic is developing products that adopt laser light sources.
The PT-RZ31K Series are projectors for professional use that provide high luminosity by employing a high-output semiconductor laser light source module and a heatresistant phosphor wheel. In addition, the cabinet does not use halogenated flame retardant, making the projector an eco-friendly product that contributes to reducing the use of hazardous substances.

PT-RZ31K Series, a laser projector for professional use

Restriction on Use of PVC Resin

Polyvinyl chloride (PVC) is a material of concerns to the generation of hazardous substances from inappropriate disposal, as well as the harmful effects of certain additive agents (phthalates) used to render PVC more pliable. In light of the significant potential for inappropriate disposal of the PVC resin used in the internal wiring of products, due mainly to difficulties associated with the sorting of this resin from used products, we have switched our new products launched from April 2011 to non-PVC.

Restriction on Use of Phthalates

Phthalates are often used in PVC products, and the use of four phthalates*5 will be restricted under the EU RoHS2 from July 22, 2019.

Panasonic classified these substances as Level 1 Prohibited Substances in our Chemical Substances Management Rank Guidelines Ver. 11 (for products) issued in July 2018, and delivery of materials and components contain the phthalates will be prohibited from July 22, 2019. We have classified other phthalates as Level 3 Prohibited Substances, and are promoting their substitution.

We are currently working on creating an analysis and management structure for the four phthalates to ensure their substitution. Since phthalates have a migration characteristic (where a substance from another article migrates through contact), materials may be contaminated by migration from production facilities as well as process equipment containing the four phthalates, which are specified as Level 1 Prohibited Substances. Accordingly, we are also discussing introducing preventive measures against contamination through contact.

To build a structure for incoming inspection for phthalate, we amended the standard for incoming inspection and determined to conduct incoming inspections on supplied components with a high chance of containing phthalates, such as PVCs, elastomers and glues. We have already selected and assessed an analyzer for phthalates to use for these inspections, and installed the analyzer at our business division. The phthalates contained in our products exported to Europe used to be as high as 10 tons. However, total elimination of the phthalates has been completed as of March 31, 2019.

*5 Bis(2-ethylhexyl) phthalate (DEHP), Butyl benzyl phthalate (BBP), Dibutyl phthalate (DBP), and Diisobutyl phthalate (DIBP).

Activities to Reduce Negative Environmental Impact at Factories

Panasonic is working to minimize environmental impact by identifying the hazardous substances used in our products, assessing the impact of such use, and voluntarily discontinuing the use or reducing the release of such substances. Since 1999, we have been conducting the 33/50 Reduction Activity to materialize reduction by 33% in three years and by 50% in six years. In Japan, we started promoting reduction of amounts to use, release, and transfer specified chemical substances at our factories in fiscal 2000. Against the target in our voluntary action plan, a reduction by 50% from the fiscal 1999 level, we achieved a 75% reduction in the chemical substance use and a 62% reduction in the release and transfer in fiscal 2005. Since then we have been continuing the activity, focusing on substances with particularly large amounts of release and transfer, setting a voluntary action target of reduction by 30% compared to the fiscal 2006 level. As a result, we achieved a 46% reduction in the amounts of release and transfer of specified key reduction-target substances across all factories worldwide in fiscal 2011.

Reflecting international trends in chemical substance management, our reduction measures have focused increasingly on particularly hazardous substances from fiscal 2011. Our Chemical Substances Management Rank Guidelines (for Factories) was established in 1999 as a guideline to help manage the above chemical substance reduction activities. In Version 1, the guidelines specified a list of chemical substances to be managed, mainly focusing on carcinogenic substances. The guidelines were later updated to Version 2 in 2000 to include rules concerning the Japan PRTR Law. Version 3, introduced in 2004, additionally covered a list of substances specified by chemical substances management legislation in Japan. The chemical substances covered by Version 4 and later from 2009 are those specified in legislation on human health and environmental impact in Japan, the U.S., and Europe, as well as those specified under international treaties.

Under our Chemical Substances Management Rank Guidelines (For Factories), we have focused our management on select chemical substances that are hazardous to human health and the environment. Further, we have created a unique indicator, the Human Environment Impact,*6 which is used globally in all our factories. Conventionally the chemical substances were managed by "quantity," such as usage amount or emissions/release. However, such quantity-based management has a problem in that some highly hazardous substances do not become subject to reduction or management if the usage amount was small, and therefore would fall out of the scope of impact assessments. In addition, the toxicity criteria varied according to substance types and regional legislation, which made standardized management across the Group difficult. To address this issue, Panasonic worked together with experts from both within and outside the company, reclassified chemical substances based on an overall assessment of their hazardousness, and specified a hazardousness factor for each classification. Specifically, we set a hazard classification to each substance by utilizing carcinogen risk assessments issued by international organizations, together with publically available hazard information and lists of ozone depleting substances. For substances that have multiple hazard information items, the item ranked with the highest hazard risk is used for classification. We utilize this internal indicator as the Human Environmental Impact indicator to promote efforts to ensure reduction of highly hazardous substances with greater environmental impacts, such as carcinogens and ozone depleting substances, according to the risk level. The Panasonic Group Chemical Substances Management Rank Guidelines is also available on the website on our Green Procurement activities to promote collaboration with our suppliers, encouraging them to offer materials that do not contain hazardous substances.

*6 Human Environmental Impact = Hazardousness factor x Release and transfer amount.

Further, we maintain our compliance in different countries by obtaining the latest information about the various chemical regulations enforced in each country through our regional headquarters and local industrial organizations.

As for the VOC regulations amended in China in 2020, we successfully completed compliance confirmation and replacement with compliant components in each business division thanks to cooperation from local suppliers.

Classification of Hazards

Classification Hazards*7 Hazardousness factor
A Carcinogenicity/Ozone layer depletion x 10,000
B Serious or direct impact x 1,000
C Medium impact x 100
D Small or indirect impact x 10
E Minor impact or not assessed x 1

*7 In addition to carcinogenicity, hazards to human health include genetic mutation, reproductive toxicity, and acute toxicity. In addition to ozone depleting substances, hazards to/substances with impact on the environment include ecological toxicity, substances that impact global warming, and substances that generate photochemical oxidants.

Human Environmental Impact

In fiscal 2021, we were able to reduce Human Environmental Impact by 57% compared to fiscal 2011.

Note: Overseas sites of former SANYO Electric not included in fiscal 2011.

In fiscal 2021, we were able to reduce Human Environmental Impact by 57% compared to fiscal 2011 by substituting highly hazardous substances in paints, improving yields, promoting recycling, introducing substances with low-solvents and hazards, and improving processes, including reviewing the amount of paint or the number of washing cycles, as well as improving the efficiency of removal/deodorization equipment. We will continue our initiatives to minimize the amount of substances with environmental impact released through our production activities.

VOC*8 Emissions

VOC emissions: 2,040 tons in fiscal 2017, and 2,058 tons in fiscal 2018, and 1,994 tons in fiscal 2019, and 1,665 tons in fiscal 2020, 1,508 tons in fiscal 2021.

*8 Emissions of Volatile Organic Compounds (VOC) into the air caused by use. The calculation covers 100 major VOC substances that Panasonic selected from those listed in the Air Pollution Control Act.

Material Balance of Substances in the Management Rank*9

Material balance of substances in the management rank. In fiscal 2021 input: 228,007 tons, removed: 20,464 tons, released into waterways: 40 tons, released to air: 2,758 tons, released into soil: 0 ton, recycled: 15,678 tons, transferred: 749 tons, and shipped as products: 188,319 tons.

*9 Based on the Chemical Substances Management Rank Guidelines (for factories). Includes all the substances specified in the Pollutant Release and Transfer Register Act.
*10 Includes substances transferred as waste, as well as those discharged into the sewage system. Recycled amount which is free of charge or accompanies treatment cost under the Waste Management Law is included in "Recycled." (Different from the transferred amount reported under the PRTR Law.)
*11 The amount of substances converted into other substances through neutralization, decomposition, or other chemical treatment.
*12 The amount of substances recycled with revenue, as well as those recycled free of charge or with any payment.
*13 The amount of substances that have been changed to other substances as a result of chemical reactions, and/or those that are contained in or accompanied with products and shipped out of factories.

Release/Transfer of Substances Requiring Management*14

Release/transfer of substances requiring management came to 3,853 tons in fiscal 2017, and 4,757 tons in fiscal 2018, and 4,592 tons in fiscal 2019, and 3,942 tons in fiscal 2020, and 3,547 tons in fiscal 2021.

*14 Hussmann Parent Inc. and its consolidated subsidiaries not included.