Environmentally Conscious Management
Basic Approach

Canon’s Approach to Environmental Assurance

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

Approach

Canon addresses the four material topics identified in the environmental domain, including Climate Change, Resource Efficiency, Chemical Substances and Biodiversity, throughout the entire product life cycle. Especially in the field of Climate Change, to achieve net zero CO₂ emissions, we are working to improve the energy efficiency of Canon products over their lifecycle through a range of environmental activities, including designing smaller, lighter products; making distribution more efficient; saving energy at production sites; utilizing renewable energy sources; and improving the energy efficiency of products during usage and other stages of the lifecycle. We have moved ahead with the introduction of renewable energy mainly in Europe and Asia, and will continue to promote the strategic utilization of renewable energy in consideration of its availability and economic viability in each region. We will also seek to reduce our CO₂ emissions by using fewer virgin resources and more recycled materials. In addition to our own efforts, we will collaborate on initiatives with stakeholders throughout the value chain. Over the long term, we aim to incorporate the products of innovation to reduce CO₂ emissions using various approaches, including the achievement of our SBTi^* targets. Through the power of innovation and technology, Canon will not only reduce CO₂ emissions in our own operations but also help lower CO₂ emissions across society.

* Science Based Targets initiative: A global body that promotes setting greenhouse gas emission reduction targets in line with climate science

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 energy-efficient 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	Expansion of sales opportunities for products and solutions that contribute to reducing CO2 emissions throughout society	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 Other Issues

	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 resource efficiency Increased demand for products/consumables that contribute to a resource efficiency (e.g., remanufactured products) Enhanced corporate image through publicity of our advanced approach to resource efficiency 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 resource efficiency
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