Honda Motor Company Honda Motor Company included a separate Corporate Governance Report (CGR) in its 2017 Annual Report. First, the CGR states, among other

Honda

SUSTAINABILITY

REPORT

2017

Honda SUSTAINABILITY REPORT 2017contents

Performance Report ■Environment ■Safety ■Quality ■Human Resources ■Social Activity ■Supply Chain

Overview3Editorial Policy1 Honda Philosophy2 Message from the President and CEO4 Sustainability Management5

GRI Content Index7 Assurance8

Contents

6

01

Performance Report

Environment・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・24

Safety・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・43

Quality・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・49

Human Resources・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・61

Social Activity・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・74

Supply Chain・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・85

GRI Content Index・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・96

Assurance・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・104

Contents

Editorial Policy・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・02

Honda Philosophy・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・03

Overview・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・04

Message from the President and CEO・・・・・・・・・08

Sustainability Management

Vision・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・09

Materiality Matrix・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・11

Sustainability Management Structure・・・・・・・・・・・・・・・・・・・・・・・・・12

Corporate Governance・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・13

Compliance・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・16

Risk Management・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・18

Research and Development・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・19

Innovation Management・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・20

Stakeholder Engagement・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・21

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3

4

5

6

7

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● 対象組織

Honda SUSTAINABILITY REPORT 2017editorial policy

Performance Report ■Environment ■Safety ■Quality ■Human Resources ■Social Activity ■Supply Chain

Overview3Editorial Policy1 Honda Philosophy2 Message from the President and CEO4 Sustainability Management5

GRI Content Index7 Assurance8

Contents

6

G4-5,G4-13,G4-14,G4-20,G4-21,G4-22,G4-23,G4-28,G4-29,G4-30,G4-31,G4-32

02

Editorial Policy

1

・●Organizations covered This report covers the entire Honda Group, which consists of Honda Motor Co., Ltd. and its 442 group companies in and outside Japan (comprising 367 consolidated subsidiaries and 75 affiliated companies accounted for by the equity method). Sections that do not cover the entire Honda Group are indicated as such with a reference to the specific scope. Furthermore, unless the context otherwise requires, the terms “we,” “us,” “our,” “Company” and “Honda” as used in this Sustainability Report each refer to the Honda Group.

・●Period covered This report focuses primarily on the activities undertaken during FY2017 (April 1, 2016 – March 31, 2017), and also includes past background information and activities conducted up to the time of publication, as well as other matters including future outlook and plans.

・●Guidelines This report has been developed in accordance with the “Comprehensive” option of the Global Reporting Initiative (GRI) G4 Guidelines. For details, please refer to the GRI Content Index (⇒ p. 96).

* The guideline referenced in calculations and/or the basis for calculations is shown in the corresponding sections.

In 2016, Honda joined the GRI GOLD Community, a global, multi- stakeholder network program. It has over 550 members from 69 countries and includes diverse companies and organizations, from civil society groups and companies to United Nations agencies and intergovernmental agencies. Honda seeks to realize a sustainable world by proactively leveraging such networking opportunities.

・●Assurance Honda obtained the independent practitioner’s assurance of the environmental data for the year ended March 31, 2017. For more details, please refer to the Independent Practitioner’s Assurance section of the report (⇒ p. 104). Data indicated with received the independent practitioner’s assurance.

・●Date of publication Publication of this report: June 2017

Planned publication of next report: June 2018

Honda releases a Sustainability Report every year.

・●For inquiries regarding this report, please contact: Honda Motor Co., Ltd.

Sustainability Planning Division, Corporate Planning Supervisory Unit

2-1-1 Minami Aoyama, Minato-ku, Tokyo, Japan 107-8556

Tel. +81-3-5412-1159

・●Published by Corporate Planning Supervisory Unit, Honda Motor Co., Ltd.

・●Cover page pictogram The design of the pictogram on the cover page symbolizes Honda’s concept of sustainability.

Three Ellipses = “Creating the Joys,” “Expanding the Joys” and “Ensuring the Joys for the Next Generation” (⇒ p. 10)

Six Precise Circles = Motorcycles, Automobiles, Power Products and New Businesses for the future (⇒ p. 04)

Supporting Hands = The desire of stakeholders who empathize with Honda’s initiatives (⇒ p. 21)

Disclaimer This report contains past and current factual data of Honda Motor Co., Ltd. as well as plans and outlook and future projections based on its management policies and management strategies as of the date of publication. These future projections are assumptions or decisions derived from the information available at the time this report was produced. Please note that the results of future business activities and events may vary depending on changes in conditions and circumstances. This report may also contain corrections, restatement or significant changes to information provided in previous reports.

Honda SUSTAINABILITY REPORT 2017philosophy

Performance Report ■Environment ■Safety ■Quality ■Human Resources ■Social Activity ■Supply Chain

Overview3Editorial Policy1 Honda Philosophy2 Message from the President and CEO4 Sustainability Management5

GRI Content Index7 Assurance8

Contents

6

G4-56,G4-DMA

03

Management Policies ・● Proceed always with ambition and youthfulness. ・● Respect sound theory, develop fresh ideas and make the most

effective use of time.

Maintaining a global viewpoint, we are dedicated to supplying products of the highest quality yet at a reasonable price for worldwide customer satisfaction.

Fundamental Beliefs

Company Principle

Honda Philosophy The Honda Philosophy, bequeathed to the Company by its founders Soichiro Honda and Takeo Fujisawa, is composed of Fundamental Beliefs (Respect for the Individual and The Three Joys), the Company Principle and Management Policies. The Philosophy forms the values shared by all Honda Group companies and all of their associates and is the basis for Honda’s corporate activities.

Moving beyond words alone, Honda incorporates the Philosophy into educational programs for its associates and gives it life by turning it into action, from everyday business activities to management decision-making, so that every person in the Company can responsibly continue putting the Philosophy into practice.

Additionally, Honda engages in corporate activities under the concept of “Free and Open, Challenge, Co-evolution” – that is, the concept of bringing into play Honda’s corporate culture of “taking up the challenge without fear of failure, free from the prejudice of preconceived ideas, and with a foundation of teamwork based on trust.”

Society’s expectations toward Honda continue to evolve with the times. As a responsible global company, Honda will undertake the resolution of problems while listening to the voices of its diverse stakeholders so as to meet their expectations and earn their trust.

Respect for the Individual

Initiative Initiative means not to be bound by preconceived ideas, but think creatively and act on your own initiative and judgment, while understanding that you must take responsibility for the

results of those actions.

Equality Equality means to recognize and respect individual differences

in one another and treat each other fairly. Our company is committed to this principle and to creating equal opportunities

for each individual. An individual’s race, sex, age, religion, national origin, educational background, social or economic

status have no bearing on the individual’s opportunities.

Trust The relationship among associates at Honda should be based on mutual trust. Trust is created by recognizing each other as individuals, helping out where others are deficient, accepting

help where we are deficient, sharing our knowledge, and making a sincere effort to fulfill our responsibilities.

The Three Joys

The joy of buying The joy of buying is achieved through providing products

and services that exceed the needs and expectations of each customer.

The joy of selling The joy of selling occurs when those who are engaged in selling

and servicing Honda products develop relationships with a customer based on mutual trust. Through this relationship,

Honda associates, dealers and distributors experience pride and joy in satisfying the customer and in representing Honda to

the customer.

The joy of creating The joy of creating occurs when Honda associates and

suppliers involved in the design, development, engineering and manufacturing of Honda products recognize a sense of joy in our customers and dealers. The joy of creating occurs when

quality products exceed expectations and we experience pride in a job well done.

2

Honda Philosophy

・● Enjoy your work, and encourage open communications. ・● Strive constantly for a harmonious flow of work. ・● Be ever mindful of the value of research and endeavor.

Honda SUSTAINABILITY REPORT 2017overview

Performance Report ■Environment ■Safety ■Quality ■Human Resources ■Social Activity ■Supply Chain

Overview3Editorial Policy1 Honda Philosophy2 Message from the President and CEO4 Sustainability Management5

GRI Content Index7 Assurance8

Contents

6

G4-4

04

HondaJet

Motorcycles Honda offers a broad lineup from commuter models, which herald motorization in many regions around the globe and are loved by people the world over, to sports models that give people a taste of the joy of riding dynamics.

The Honda Super Cub continues to be an ultra long seller as a leading commuter model for nearly six decades. It continues to offer daily mobility to many users around the world, with cumulative global production topping 97 million units.

In 2016, Honda revamped the CBR1000RR, offering Honda’s interpretation of a modern super sports motorcycle. In addition, the Honda X-ADV, which combines the high-level strength of adventure models and the convenience of commuter models and aims to carve out a new category, was launched in April 2017.

In this way, Honda continues to lead the industry as a top motorcycle manufacturer.

Power Products Honda has been providing annually a total of six million power products to customers in more than 150 countries and regions based on a diverse range of items that feature Honda’s general purpose engines, including tillers, generators, snow throwers, lawnmowers, pumps and outboard engines. Further, through development and commercialization of electrification of products, Honda continues to offer new values that are useful in various facets of people’s daily lives, such as an innovative robotic lawnmower, Miimo, and a portable battery inverter power source, the LiB-AID E500.

The Company is also leasing the Honda Walking Assist Device, an assistive device for use in the training of walking. The device has been developed based on the theory of human walking, which Honda has accumulated through its robotics technology.

Looking ahead, Honda intends to continue to deliver products useful in everyday life to people across the world and spread the joy of helping others by maximizing and pursuing the potential of internal combustion engine and electrification technologies.

Aircraft and aircraft engines Honda began delivery of the HondaJet to the world at the end of 2015 as a new proposal for personal mobility. Based on Honda’s proprietary technology, including Over-The- Wing Engine Mount (OTWEM), HondaJet provides a top-class mobility experience in the sky. Sales started in North, Central and South America as well as Europe, and the aircraft has been very well received by the market. Honda also started taking orders in Southeast Asia in May 2017.

Honda has also developed an aircraft turbofan engine in collaboration with General Electric (GE), which is ranked number one in the aviation industry. Honda Aero, Inc. was established to produce the GE Honda HF120, while GE Honda Aero Engines LLC was established as a 50-50 joint venture with GE to sell the engine. The HF120 is a lightweight, compact, high-efficiency and high-performance turbofan engine with high thrust. Armed with these superior characteristics, sales of the HF120 engine will be expanded to include other aircraft manufacturers by leveraging the success of the HondaJet.

Automobiles Honda has started production of the new NSX at a dedicated plant in North America. This car, boasting exceptional performance and quality, is assembled solely by associates who are master technicians and builders. This has only been made possible thanks to a history spanning 34 years in automobile production in North America. Honda infused the NSX with state-of-the-art technology based on a desire to convey the joy of driving in today’s world. This spirit is one of the enduring features of Honda that people feel when they get behind the wheel of any one of our cars.

From the N-BOX mini-vehicle sold in Japan through global best-sellers the Civic and HR-V/Vezel to the Ridgeline pickup truck in North America, Honda has a full lineup of automobiles.

In addition, the Acura is being marketed in the United States and China as Honda’s luxury brand. The Acura, with the brand slogan of “Precision Crafted Performance” since its inception 30 years ago, boasts models befitting the slogan, notably with the aforementioned NSX.

HF120 turbofan engineCivic SedanCBR1000RR SP HR-VWave110 Miimo Honda Walking Assist Device

Honda’s Business DomainsOverview

Principal Businesses Segments Creating New Businesses3

Honda SUSTAINABILITY REPORT 2017overview

Performance Report ■Environment ■Safety ■Quality ■Human Resources ■Social Activity ■Supply Chain

Overview3Editorial Policy1 Honda Philosophy2 Message from the President and CEO4 Sustainability Management5

GRI Content Index7 Assurance8

Contents

6

05

Honda’s Value Creation HistoryOverview

1948 Establishes Honda Motor Co., Ltd.

1948 Formulates “The Three Joys”

1958 Launches the Super Cub

1990 Introduces flex-time/child-care leave system

1986 Secures top place in U.S. CSI Study

2006 Develops flexible- fuel vehicle (FFV) that runs on ethanol for Brazil

2050 Aims to halve CO2 emissions compared to 2000 levels

2012 Achieves cumulative power products production volume of 100 million units

1946 Establishes Honda Technical Research Institute

1970 Establishes Driving Safety Promotion Center

1971 Launches low-pollution CVCC engine

1981 Launches Honda Electro Gyro-Cator (navigation system)

1996 Launches world’s first self-regulating, two-legged humanoid walking robot

1960 Separates R&D Center into an independent entity (Honda R&D Co., Ltd. established)

1960 Introduces human resources qualification system

1963 Starts automobile production (T360 mini truck)

1947 Starts production of the A-Type auxiliary bicycle engines

1993 Honda’s general-purpose engine first in world to receive approval for conformity with U.S. exhaust gas regulations

1997 Attains ISO14001 certification in Belgium and at the Hamamatsu Factory and Tochigi Factory

1987 Launches Japan’s first airbag-equipped automobile

1981 Completes first domestically produced automobile equipped with driver assist features for persons with upper-arm disabilities (Civic)

2012 First in industry to disclose estimated CO2 emissions from product use globally (Scope 3)

2030 Two-thirds of automobiles sold to be electrified vehicles

1949 Starts production of first motorcycle, the Dream D-Type

1953 Communicates policy of “120% Quality”

1953 Commences Power Products business (releases general-purpose H-Type 2-stroke engine)

1999 Launches Insight, the first hybrid car in the United States

2002 Develops the FCX fuel cell vehicle

2014 Establishes world’s first single-package Smart Hydrogen Station in conjunction with Iwatani Corporation

2014 Secures 100% in disclosure score for CDP 2014

2015 Launches Honda Walking Assist Device for use in the training of walking

2015 Commences sales of the HondaJet

2016 Revises Honda Corporate Governance Basic Policies

2016 Achieves cumulative global automobile production volume of 100 million units

2010s onward

1940s ~ 1970s

1980s ~ 2000s

1,944

271

2,979

711 157 300

142

943

105

1,1431,304

460

226272

1,105

724

14,805

1,172

Joy of mobility to 28,000,000 people transcending national borders

Company name: Honda Motor Co., Ltd. Established: September 1948 President, CEO & Representative Director: Takahiro Hachigo Capital: 86,067 million yen (as of March 31, 2017)

*The graphs show unit sales (retail) of motorcycles, automobiles and power products (in units of 1,000) in each of the six regions. [April 2016 to March 2017] The symbol ● represents the approximate locations of Honda Group companies.

Motorcycles Automobiles Power products (1,000 units)

Motorcycles Automobiles Power products (1,000 units)

Motorcycles Automobiles Power products (1,000 units)

Motorcycles Automobiles Power products (1,000 units)

Motorcycles Automobiles Power products (1,000 units)

North America Regional headquarters: Honda North America, Inc. (U.S.A.)

South America Regional headquarters: Honda South America Ltda. (Brazil)

Japan Honda Motor Co., Ltd. Honda R&D Co., Ltd. Honda Engineering Co., Ltd.

China Regional headquarters: Honda Motor (China) Investment Co., Ltd. (China)

Europe, Middle East and Africa Regional headquarters: Honda Motor Europe Ltd. (U.K.)

Asia & Oceania Regional headquarters: Asian Honda Motor Co., Ltd. (Thailand)

Motorcycles Automobiles Power products (1,000 units)

Honda SUSTAINABILITY REPORT 2017overview

Performance Report ■Environment ■Safety ■Quality ■Human Resources ■Social Activity ■Supply Chain

Overview3Editorial Policy1 Honda Philosophy2 Message from the President and CEO4 Sustainability Management5

GRI Content Index7 Assurance8

Contents

6

G4-3,G4-4,G4-5,G4-6,G4-7,G4-8,G4-9,G4-20,G4-21,G4-EC8

06

Unit sales and principal operation basesOverview

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