Environmentally Conscious Management
Basic Approach

Canon’s Approach to Environmental Assurance

Acting on the foundation of its Approach to Sustainability (→P07), Canon works to protect and conserve the global environment in line with the Canon Group Environmental Charter and the Canon Environmental Vision.

Confirming the Effectiveness of Environmental Management

Canon uses an internal environmental audit to confirm the effectiveness of its environmental management system. The audits are composed of headquarters environmental audits performed by Sustainability Headquarters, and operational site environmental audits and product environmental audits conducted by the audit divisions of operational sites and products operations. Mutual cross-site audits are carried out in certain locations.

Results of internal environmental audits are compiled by the Group audit management section of Sustainability Headquarters and reported to the CEO and the CFO of Canon Inc. in management reviews. In 2022, the audits found no major nonconformity or violations. From the perspective of continual improvement and prevention, we are taking steps to rectify even minor findings in operations management.

Obtained ISO 14001 consolidated certification (External audit)

All Manufacturing and marketing companies worldwide obtain ISO 14001 consolidated certification as an objective third-party evaluation of EMS effectiveness. As of 2022, ISO 14001 certification covers Canon Inc. as well as 120 Group companies (564 operational sites) in 40 countries and regions. We received the positive evaluation from the accreditation body that “within the context of a business environment undergoing great change, the Canon Group as a whole has identified new risks and opportunities associated with prospective expansion into new business domains, and has incorporated these in its EMS.”
The acquisition of consolidated Group certification has supported strengthening of corporate governance and efficient environmental management. Sustainability Headquarters oversees Canon’s environmental assurance activities and reports on the progress of relevant activities for the approval of the CEO of Canon Inc. as well as the CFO.

Certifications Obtained

Environmental Performance Evaluations Coordinated with Business Management

Through environmental performance evaluations, the outcomes of the environmental activities at individual Headquarters divisions, operational sites and marketing companies are evaluated and scored twice yearly. Since 2001, these scores have been incorporated alongside business performance in consolidated performance evaluations. Sustainability Headquarters sets the environmental evaluation criteria and carries out the evaluations, which account for approximately 10% of the overall consolidated performance evaluation. Criteria for environmental evaluation mostly cover compliance with laws and company rules, achievement of environmental targets, improvement in the environmental performance of products, and environmental communication. The evaluation results are announced within the Group on a half-yearly basis. The results are used in the evaluation of the executive officer in charge of a Headquarters division and the president of a Group manufacturing or marketing company. In this way, Canon incorporates the environment into its business performance evaluation.

Environmental Performance Evaluation Process

Monitoring of Progress toward Environmental Targets

Each operational site makes a monthly report to Sustainability Headquarters regarding its energy consumption (CO₂ emissions volume), waste generation volume, chemical substance emissions volume, and water utilization volume. The GEC aggregates the data to monitor progress toward environmental targets and reports monthly to the Board of Directors, business department general managers, and the executive management of Group companies. Additionally, the evaluation and the risks identified are subject to the PDCA cycle for environmental assurance activity within the shared framework of the Group’s ISO 14001-based environmental management system.

Risks and Opportunities

Even as consumer lifestyles grow more affluent, various environmental problems are emerging, including climate change, resource depletion, pollution, and loss of biodiversity. In response to the issue, debate within the global community is increasing on how to achieve carbon neutrality and how to realize a circular economy. Recognizing the business impact of environmental issues, many companies see the importance of helping address these issues in partnership with national and local governments, experts and other stakeholders. Canon identifies business risks and opportunities by envisioning different ways in which society will change based on information received from specialized institutions and government agencies.

Major Climate-related Risks and Opportunities

	Risks and opportunities		Financial impact	Action
Risks	Transition risks	Stricter energy-efficiency regulation and associated compliance costs (products/sites)	High	Achievement of environmental targets based on the reduction of environmental impact throughout the product lifecycle Collection, analysis and adaptation of information on environmental regulations
	Transition risks	Increased business costs from economic measures to reduce emissions (e.g., carbon tax)	Medium	Achieve energy consumption targets at operational sites Promotion of energy conservation activities at each operational site through cooperation among development, production, facility, and environmental departments
	Physical risks	Negative impacts on operations caused by increasingly severe extreme weather events such as typhoons and floods	Medium	Formulation of BCPs and relocation of high-risk operational sites to higher ground
	Reputational risks	Negative external evaluation due to insufficient information disclosure	Low	Disclosure of the approach and the status of efforts in response to climate change
Opportunities	Products and services	Expanded opportunities for sales of energyefficient products with low lifecycle CO₂ emissions	High	Achievement of environmental targets based on the reduction of environmental impact throughout product lifecycles Development, manufacture, and sales of products that realize a beneficial balance between energy conservation and enrichment of people’s lives
	Products and services	Contribution to CO₂ emissions reduction at societal level through sales of various innovative products and solutions (hardware/software)	High	Achievement of environmental targets based on the reduction of environmental impact throughout product lifecycles
	Energy efficiency	Reduction of energy costs by improving production and transportation efficiency	Medium	Achieve energy consumption targets at operational sites Replacement and introduction of high-efficiency facilities and transportation methods
	Energy sources	Expanded opportunities for use of renewable energy through lower associated costs	Medium	Switch to renewable energy sources
	Others	Enhanced corporate image due to proactive climate-related disclosures	Low	Disclosure of the approach and the status of efforts in response to climate change

Major Risks and Opportunities in the Areas of Materiality

	Risks		Opportunities
Resource efficiency	Transition risks	Increased procurement costs of raw materials due to resource constraints Stricter resource-efficiency regulation and associated compliance costs (products/services) Increased costs for collection and recycling of used products in each region	Business cost reduction through improved resource efficiency Enhanced competitiveness through 3R design and development of advanced technologies that promote a circular economy Increased demand for products/consumables that contribute to a circular economy (e.g., remanufactured products) Enhanced corporate image through publicity of our advanced approach to resource recycling Offering the value of CO₂ emissions reduction effect through efforts to recycle resources
	Physical risks	Impairment of stable water supply and impacted business operations due to extreme weather events
	Reputational risks	Damage to corporate image from slow transition to circular economy
Chemical Substances	Increased chemical substance management costs due to strengthened and expanded regulations Suspension of production or disruption to parts supply chain due to serious noncompliance by suppliers Damage to corporate image due to poor regulatory compliance		Supplying safe products and maintaining competitiveness through more advanced chemical substance management Cost reduction through increased management efficiency, including within the supply chain Enhanced corporate image through contribution to international standardization
Biodiversity	Reduced supply and higher cost of printing paper due to declining forestry resources Restraints on business activities due to disruption of local ecosystems		Application of our products and technologies to ecosystem conservation Enhanced corporate image through contribution to local communities

Environmentally Conscious ManagementBasic Approach