Japan’s three biggest automakers are facing the greatest risk from climate change among global auto companies because much of their manufacturing remains concentrated in the island nation, according to a study by Greenpeace.
Toyota, Honda and Nissan will face major challenges ranging from hurricanes and flooding to high temperatures and water shortages, in the coming years based on where their factories are located, said the environmental-advocacy group, which analyzed data from Moody’s ESG Solutions on physical risks.
When it comes to environmental, social and governance issues, the spotlight is usually on the impact that manufacturers have on the climate, or society. Yet, as changes in the weather make the impact of natural disasters more frequent and intense, automakers will face “a high level of physical risk” of damage and disruption at their operational facilities as well as supply-chain disruptions, Greenpeace said.
To an extent, the list reflects the realities of geography. The Japanese automakers,which also have factories in Asia, have facilities scattered across an archipelago that is susceptible to typhoons. The word itself means “big wind” in Japanese. Toward the bottom of the list of major automakers facing less climate risk are Volkswagen Group, Stellantis and other European automakers with manufacturing facilities in northern climates.
Japanese automakers were heavily affected by the 2011 earthquake and tsunami, which disrupted production and the supply chain. In response, Toyota and others retooled their supply chains -- an overhaul that analysts say helped them ride out the chip shortage better than others.