Honda has long been a leader in sustainability in the global automotive industry. The carmaker introduced the CVCC engine in the early 1970s to cut smog-forming emissions, and it 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 reduce or eliminate tailpipe emissions of vehicles in use.
But what about the environmental impact of products at the end of their useful life?
As part of its ambitious goal of achieving zero environmental impact of its products and operations by 2050, Honda is pursuing resource circulation, working to recapture products at the end of their life and recycle or reuse 100% of the 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 circulation.
Achieving resource circulation requires major innovations in the design and end-of-life recovery of its products and in the procurement of parts, goods, and services to reduce its environmental impact.
Design for Resource Circulation
At the heart of Honda’s resource circulation efforts is product design.
Here, the company views sustainability holistically, selecting materials and creating design elements that prioritize longevity and recyclability. This is especially critical, as the initial design phase determines 80% of a product’s environmental impact.
“Honda’s commitment to sustainable materials isn’t just about using recycled plastics and other reusable materials; it’s about rethinking the entire product life cycle,” says Mathew Daniel, indirect procurement department lead at Honda. “By designing for disassembly and maintainability [ease of maintenance], we envision everything we purchase, from parts for our vehicles to forklifts used in our factories, being reused or recycled, reducing our environmental footprint and generating new business value.”
Maximizing Useful Life
Honda is exploring the entire scope of its corporate purchasing to maximize the useful life of the goods it buys while avoiding unnecessary purchases.
The process begins with the simplest of questions, Daniel says. “Do we even need to purchase this good in the first place? If we do, can we buy less of it? If not, can we purchase it in a different composition that is more sustainable? Those three questions enable us to develop specifications that will help us achieve the rest of our strategy,” he says. “This includes maximizing useful life, hopefully yielding a second or third life before having to reclaim the raw materials.”
Honda has collaborated with GEP, a leading global provider of procurement and supply chain solutions, to implement and accelerate its sustainability goals. “The approach Honda is taking toward sustainability focuses on integrating the right strategies into every aspect of the business, particularly procurement and supply chain,” says Vengat Narayanasamy, vice president of consulting at GEP.
“Honda’s comprehensive view of resource circulation—from design to end-of-life management—ensures that it is not just meeting its environmental goals but also setting new standards for the industry,” Narayanasamy says. “Additionally, its focus on creating and purchasing durable, repairable products ensures that what it purchases and produces stays in service longer, reducing the need for new resources and cutting down on waste.”
By minimizing the extraction of virgin resources, Honda is helping preserve natural ecosystems and biodiversity. At the same time, reducing waste through circular practices is helping mitigate pollution and greenhouse gas emissions.
Transforming Procurement Processes
Honda focuses on more than the sustainability of its direct materials. The company spends billions of dollars annually on indirect goods and services and is looking at resource circulation in this space as well. Extending the life of purchased goods such as IT hardware, equipment, and office furnishings can reduce overall capital expenditure.
However, purchasing sustainable goods may initially increase capex, so the success of such resource circulation initiatives is in finding solutions that maximize sustainability and protect profitability.
“From an operational perspective, our goal is to keep the indirect goods that we purchase in service as long as possible, at their highest possible value, and then recover them for reuse,” Daniel says.
Honda is taking steps to create a resource circulation center with three key functions.
The first is a control tower that will set policies, track effectiveness, and streamline corporate activities.
The second is a physical operation focused on dismantling end-of-life assets and recycling essential raw materials like steel, aluminum, and copper.
The third function, the “second-life lab,” will explore new ways to repurpose 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 facet of its operations, Honda is not only achieving its goals but also setting a new standard for what’s possible in the realm of sustainable practices,” Narayanasamy says.
Blueprint for a Sustainable Future
The journey Honda is taking toward resource circulation is more than just a commitment to sustainability—it’s a bold step toward reshaping the future of the automotive industry.
With the expertise of partners like GEP, Honda is pioneering new standards in sustainability.
It’s a clear message to the industry: embracing resource circulation is a necessity for driving meaningful change.
Learn how GEP can help your organization achieve sustainability goals
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