![](https://aiesg.co.jp/wp-content/uploads/2023/10/2301017_NikkeiEV1-1.jpg)
We recently published a commentary report on a Nikkei newspaper article published in August this year on our website.
[Commentary] Nikkei article: aiESG supply chain analysis of electric vehicle (EV) production and ESG indicators worsening due to 'de-China'.
https://aiesg.co.jp/report/2301016_nikkeiev1/
In this report, aiESG provides an overview of how the US Inflation-Reduction Act (IRA) will affect Japanese manufacturers, based on an independent analysis conducted by aiESG.
This additional analysis was also published in the November issue of Nikkei ESG, 'Barriers to entry for ESG information set up by the EU'.
Nikkei ESG has published an analysis of EV by aiESG.
https://aiesg.co.jp/news/231017_nikkeiesg/
[Additional analysis.
Independent analysis by aiESG suggests that ESG indicators for EV in Japan will deteriorate in the same way as in the US.
Many Japanese cars are sold in the USA and the impact of the Inflation-Reduction Act (IRA) may extend to Japanese manufacturers as well. Therefore, apart from a joint analysis with the Nikkei Shimbun, aiESG conducted its own ESG assessment of Japanese electric vehicles.
First, a comparison of ESG assessments of Japanese and US electric vehicles as of 2021 shows that Japanese indicators exceed US indicators in all categories in human rights risks. Conversely, in environmental risks, Japanese indicators fell below those of the USA in almost all categories. (Figure 1)
The difference in the supply chain, with Japan having a higher proportion of South-East Asian countries and the USA having a higher proportion of Latin American countries, is likely to have an impact on the differences in the indicators.
![](https://aiesg.co.jp/wp-content/uploads/2023/10/image-3.png)
Next, an analysis of changes in ESG ratings for Japanese electric vehicles in 2021 and 2030 showed that, as in the USA, indicators worsened in 2030 for many items. (Figure 2)
The fact that the global market is similar for batteries, which have the greatest impact on the environmental and human rights risks of electric vehicles, and that both Japan and the USA have the same major sourcing countries, may explain the similar trends in the indicators in both countries.
![](https://aiesg.co.jp/wp-content/uploads/2023/10/image-4.png)
[Summary.
Major ESG challenges lurk in the trend away from EV production in China
Previous report.In aiESG, an analysis of aiESG, which can trace supply chains across borders to the end, revealed that both environmental and human rights aspects worsen in the ESG assessment if China is excluded from the US electric vehicle supply chain. The shift in the supply of batteries and other components from China to countries around the US, such as Mexico, and beyond to Latin America and Africa, is thought to have an impact on the deterioration of ESG indicators.
In addition, the supply chain for batteries, which have the largest impact on ESG indicators among the various components of electric vehicles, is similar worldwide. For this reason, in this report, aiESG conducted its own analysis of Japanese electric vehicles in the same way as for US electric vehicles, and found that ESG indicators may deteriorate in Japanese vehicles in the same way as in the US in the future.
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*Related articles*.
The results of aiESG's analysis of EV were published on the front page of the Nihon Keizai Shimbun.
https://aiesg.co.jp/news/230815_nikkei/
[Commentary] Nikkei article: aiESG supply chain analysis of electric vehicle (EV) production and ESG indicators worsening due to 'de-China'.
https://aiesg.co.jp/report/2301016_nikkeiev1/