Panasonic Corporation is a Japan-based company with over 500 consolidated subsidiaries. The company operates in numerous business segments; these segments include Appliances, Automotive and Industrial Systems, AVC Networks, and Eco Solutions. The AVC Networks segment is engaged in the development of digital cameras and mobile phones. The Eco Solution segment is engaged in the development, manufacture and sale of lighting equipment, housing-related materials and equipment, PV power and storage systems, and ventilation fans.
In its Green Plan 2018, Panasonic outlines its targets on five key impact areas: CO2 reduction, water conservation, recycling, chemical substance management, and biodiversity. To date, the company has performed well in meeting and even exceeding these targets in most areas, and has been effective in integrating environmental best practices in its operations as well as in its product line. For example, the company has developed a range of “Eco-conscious” products and performs a number of assessments based on environmental criteria. Additionally, the company adopted recycling-oriented manufacturing processes that include reduced material usage and higher recycling rates of those materials, in line with Panasonic’s long-term zero-waste goal. For its supply chain, Panasonic has developed chemical substance guidelines, human rights policies, and incorporates Green Procurement Standards, which all of its suppliers must adhere to. The company has also developed business continuity plans, which is particularly important given its pronounced involvement in Japan, a country facing many environmental and natural risks. These risk management steps make Panasonic more resilient to systemic risks in the long term by ensuring the functionality of its business franchise even in times of crisis.
Panasonic is improving its conflict mineral sourcing practices, but lacks transparency in terms of identifying which of its suppliers are conflict free smelters and how the company is auditing supplier performance in this area. Furthermore, the company has a combined CEO and Chair, and has no compensation committee.
Industry: Consumer Discretionary
To the best of our knowledge the above information is accurate and was obtained from sources we believe to be reliable. Neither the information presented above nor any opinion expressed shall be construed as an offer to sell or a solicitation to buy the security. The views expressed are those of portfolio management as of 3/31/2017 and may not reflect current opinions or subsequent events.