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Honda has long been a sustainability leader in the global automotive industry. The automaker introduced the CVCC engine in the early 1970s to reduce smog-causing emissions, and produced the first battery electric vehicles in the 1990s and hydrogen fuel cell electric vehicles in the early 2000s, both of which used innovative technologies to reducing or eliminating emissions from the exhaust pipes of vehicles in use.
But what about the environmental impact of products at the end of their life?
As part of its ambitious goal of achieving zero environmental impact for its products and operations by 2050, Honda strives to recycle resources, working to re-collect products at the end of their life and recycle or reuse 100% of materials to create new products.
Creating a circular society supports the company’s goals of achieving carbon neutrality, 100% clean energy use and 100% resource recycling.
Achieving circularity of resources requires major innovations in the design and recovery of end-of-life products and in the procurement of parts, goods and services to reduce environmental impact.
Design for resource circulation
At the heart of Honda’s resource circularity efforts is product design.
Here, the company looks at sustainability holistically, choosing materials and creating design elements that prioritize longevity and recyclability. This is especially critical because the initial design phase determines 80% of a product’s environmental impact.
“Honda’s commitment to sustainable materials is not just about using recycled plastics and other reusable materials; it’s about rethinking the entire product life cycle,” says Mathew Daniel, head of indirect procurement at Honda. “By designing for disassembly and maintenance [ease of maintenance]we envisage that everything we buy, from parts for our vehicles to the forklifts used in our factories, is reused or recycled, reducing our impact on the environment and creating new business value.”
Maximizing useful life
Honda investigates the entire scope of its corporate procurement to maximize the life of the goods it purchases, avoiding unnecessary purchases.
The process starts with the simplest of questions, says Daniel. “Should we even buy this good? If we do, can we buy less than that? If not, can we buy it in another composition that is more sustainable? Those three questions allow us to develop specifications that will help us realize the rest of our strategy,” he says. “This involves maximizing the useful life, hopefully getting a second or third life before the raw materials need to be returned.”
Honda has partnered with GEP, a leading global procurement and supply chain solutions provider, to implement and accelerate its sustainability goals. “Honda’s approach to sustainability is focused on integrating the right strategies into every aspect of the business, especially the procurement and supply chain,” says Vengat Narayanasamy, vice president of consulting at GEP.
“Honda’s comprehensive view of resource circulation—from design to waste management—ensures that it not only meets its environmental goals but also sets new standards for the industry,” says Narayanasamy. “Additionally, its focus on creating and purchasing durable, repairable products ensures that what it buys and manufactures stays in use for longer, reducing the need for new resources and reducing waste.”
By minimizing the exploitation of virgin resources, Honda helps preserve natural ecosystems and biodiversity. At the same time, reducing waste through circular practices helps reduce pollution and greenhouse gas emissions.
Transformation of the procurement process
Honda focuses on more than the sustainability of its direct materials. The company spends billions of dollars annually on indirect goods and services and also looks at the circulation of resources in this space. Extending the life of purchased goods such as IT hardware, equipment and office furniture can reduce overall capital expenditure.
However, purchasing sustainable goods may initially increase capital investment, so the success of such resource circular initiatives lies in finding solutions that maximize sustainability and protect profitability.
“From an operational perspective, our goal is to keep the indirect goods we buy in service as long as possible, at the highest possible value, and then return them for reuse,” says Daniel.
Honda is taking steps to create a resource circulation center with three key functions.
The first is a control tower that will set policies, monitor efficiency and direct corporate activities.
The second is a physical operation aimed at disassembling obsolete assets and recycling basic raw materials such as steel, aluminum and copper.
The third function, the “second life laboratory”, will explore new ways of repurposing used indirect goods. A prime example of this initiative is Honda’s current practice of converting old factory worker uniforms into insulation for use in vehicle assembly.
“By integrating sustainability into every aspect of its operations, Honda not only achieves its goals, but also sets new standards for what is possible in the field of sustainable practices,” says Narayanasamy.
Blueprint for a sustainable future
Honda’s journey towards circularity is more than a commitment to sustainability – it’s a bold step towards reshaping the future of the automotive industry.
With the expertise of partners like GEP, Honda is introducing new standards in sustainability.
It’s a clear message to industry: embracing the circulation of resources is necessary to drive meaningful change.
Learn how GEP can help your organization achieve sustainability goals
