Sustainability

Protecting and Conserving the Environment

Why is this important?

Basic Approach

In 2008, we formulated “Action for Green” as our environmental vision, positioning “environmental value” as the main concept in initiatives to realize a society that achieves a beneficial balance between lifestyle enrichment and the environment. To create this value, Canon seeks to supply products and services that enrich people’s lives while also reducing environmental impact, based on initiatives across the entire product lifecycle.

Canon is working to reduce environmental impact by focusing on four material areas: (1) contributing to a carbon-free future; (2) contributing to a circular economy; (3) eliminating hazardous substances and preventing pollution; and (4) contributing to a society in harmony with nature.

Materiality

We analyze how our business activities relate to environmental issues and needs. We then assign them a level of priority based on the relative level of interest among stakeholders, ascertained with the help of surveys, and the relative impact on our business activities. (See Materiality Matrix diagram below.)

In a survey conducted in 2020, the most important issue identified by Canon stakeholders was “promotion of energy conservation and utilization of renewable energy.” This response reflects recent upgrading of government policies in each country and region aimed at realizing net-zero CO₂ emissions goals alongside corporate initiatives in response to greater social demand.

Another issue generating stakeholder interest was “reuse and recycling of used products,” reflecting increased awareness of the circular economy. These issues have a substantial impact on activities at Canon sites and on the cost and competitiveness of our products. They also have a relatively high impact on Canon business activities, and are positioned as highpriority areas in the materiality matrix.

Toward the realization of a sustainable society, Canon believes that it is important to drive forward and develop initiatives of this kind throughout the product lifecycle, taking careful note of social issues and needs, the level of stakeholder concern, and the other wideranging changes in the world around us.

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
Circular economy	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 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	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
Hazardous 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

Risks

Opportunities

Circular
economy

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

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

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

Hazardous
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

Approach

GRI102-11
GRI102-15
GRI103-1
GRI103-2

Based on our environmental vision of “Action for Green,” Canon is working to reduce environmental impact by focusing on four material areas: (1) contributing to a carbon-free future ; (2) contributing to a circular economy ; (3) eliminating hazardous substances and preventing pollution ; and (4) contributing to a society in harmony with nature.

Protecting and Conserving the Environment

For 2050

We aim to achieve net-zero CO₂ emissions for entire product lifecycles^* by 2050.

For 2030

By consistently achieving our target of an average annual improvement of 3% for the index of lifecycle CO₂ emissions per product unit, including Scope 3 as well as Scope 1 and 2 emissions, we aim to realize a 50% emissions reduction in 2030 compared to 2008 levels.

Approach

To reach net zero CO₂ emissions, we will rigorously improve efficiency throughout product lifecycles, further promoting energy efficiency in design, production, and distribution. Since 2008, Canon has consistently met its target of an average annual improvement of 3% for the index of lifecycle CO₂ emissions per product unit. We will continue to build on this record of achievement going forward. 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 CO₂ emissions through advances in the recycling of resources. In addition to our own efforts, we will collaborate on initiatives with stakeholders throughout the value chain. We will take every possible measure to achieve net-zero CO₂ emissions over the longer term, incorporating innovation wherever it occurs in society. At the same time, by making a wide range of technologies and IT solutions available, Canon will not only reduce CO₂ emissions in our own operations but also help lower CO₂ emissions across the society.

* Scope 1: Direct emissions (city gas, LPG, light oil, kerosene, non-energy-related greenhouse gases, etc.)
Scope 2: Indirect emissions (from use of electricity, steam, etc.)
Scope 3: Supply chain-related emissions (emissions from purchased goods and services, upstream transportation and distribution, and utilization of sold products).

Medium-term Environmental Targets (Three-year Plan)

With a view to what we aim for in 2050 and 2030, we set Medium-term Environmental Targets in line with our three-year management plan, and we review the targets each year.

Canon sought a single integrated indicator to measure the progress achieved across all environmentrelated activities, from energy and resource conservation to recycling, and to also highlight the efficiency of these activities in terms of achieving a beneficial balance with business activities. We therefore established the index of lifecycle CO₂ emissions per product unit, and set an overall target of achieving a 3% average annual improvement in the index as part of the Canon Group Medium-term Environmental Targets.

This overall target is subdivided into a product target and an operational site target. The product target is set at a 3% average annual improvement in the index of CO₂ emissions per product unit associated with raw materials and product utilization. The operational site target includes target figures for reduction per basic unit in energy consumption, total waste emissions, water consumption and controlled chemical substance emissions. In this way, we will make continuous progress toward meeting our overall target.

Progress in 2021

Against the target of a 3% average annual improvement in the index of lifecycle CO₂ emissions per product unit, we realized an average annual improvement of 4.3% between 2008 and 2021 for a cumulative total improvement of 42%. In 2021, we progressed with related activities, including initiatives in both operations and product design to improve energy efficiency based on the whole product lifecycle. Unfortunately, disruption of logistics operations owing to COVID-19 and other factors limited the rate of achievable improvement. However, this disruption is temporary and we expect to return to a path of continuous improvement.