Environmentally Conscious Management
Disclosure in Line with TCFD Recommendations
Canon regards "protection and conservation of the global environment," including response to climate change, as one of the most important management issues (materiality). In order to solve issues, not only in our own business activities such as development, production and sales, but also in manufacturing raw materials and parts at suppliers, transportation to dealers, customer use, disposal, and recycling of products, we are working on reducing our environmental impact at each stage of the life cycle.
Canon has been working to reduce CO2 emissions throughout the entire product lifecycle with the aim of achieving net zero emission by 2050. This improvement is attributable to our having undertaken various environmental activities that include developing smaller and lighter products, streamlining logistics operations and engaging in energy-saving initiative at production sites, developing products that are energy-efficient and recycling products. We will steadily reduce CO2 emissions by steadily achieving the "Canon Group Medium-Term Environmental Target", "Improvement index per life cycle CO2 product, with an average annual improvement of 3%."
Moreover, we endorse the recommendations of the Task Force on Climate Related Financial Information (TCFD), established by the Financial Stability Board, and we will continue to disclose recommended information through sustainability reports and websites.
Governance
Environmental targets, including climate change responses, are approved by the CEO. Medium-term and long-term plans are formulated by the Sustainability Headquarters, and approved by the CEO after discussions among board directors and other executives. The Sustainability Headquarters plays a central role in the groupwide efforts to achieve these targets, and reports the progress of the targets to the management every month and the annual review to the CEO.
Our company has also established a Risk Management Committee based on a resolution of the Board of Directors. Serious risks related to environmental laws and regulations and natural disasters are assessed by the Risk Management Committee, and the results are reported to the Board of Directors.
Strategy
Based on information from specialized institutions and government agencies, Canon conducts numerical simulations of lifecycle CO2 reductions using the climate change scenarios of the Intergovernmental Panel on Climate Change (IPCC) and other inputs. When evaluating potential operational sites, Canon first assesses locations to confirm the local water availability using AQUEDUCT, a water-risk mapping tool provided by the World Resources Institute* for quantitative evaluation and reconfirmation of water risk in regions where production sites are located. We also try to conserve water based on local conditions. In response to higher flood risks due to the rise in abnormal weather patterns, we have relocated facilities to higher ground or selected land at higher elevation when constructing a second factory at a site.
By responding appropriately to climate change in this way, we can identify business risks and opportunities while also formulating medium- to long-term strategies. See P.17 for further details of risks and opportunities.
In order to reduce risks and expand opportunities, we recognize the importance of both mitigating CO2 emissions and adapting to physical risks from the perspective of entire product lifecycles, and we have formulated and implemented action plans accordingly. We are also working to reduce CO2 emissions through efforts to realize a resource efficiency.
For example, remanufacturing of printers can reduce CO2 emissions from the procurement of new raw materials and parts processing. In the closed-loop recycling of ink and toner cartridges, plastic is pelletized from collected cartridges and reused as raw material, thus reducing CO2 emissions from procurement and transportation of new raw materials.
Major Climate-Related Risks and Opportunities
| Risks and opportunities | Financial impact | Action | ||
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| Risks | Transition risks | Stricter energy-efficiency regulation and associated compliance costs (products/sites) | High |
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| Increased business costs from economic measures to reduce emissions (e.g., carbon tax) | Medium |
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| Physical risks | Negative impacts on operations caused by increasingly severe extreme weather events such as typhoons and floods | Medium |
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| Reputational risks | Negative external evaluation due to insufficient information disclosure | Low |
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| Opportunities | Products and services | Expanded opportunities for sales of energy-efficient products with low lifecycle CO2 emissions | High |
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| Expansion of sales opportunities for products and solutions that contribute to reducing 2 emissions throughout society | High |
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| Energy efficiency | Reduction of energy costs by improving production and transportation efficiency | Medium |
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| Energy sources | Expanded opportunities for use of renewable energy through lower associated costs | Medium |
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| Others | Enhanced corporate image due to proactive climate-related disclosures | Low |
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Risk Management
Identified climate change risks and opportunities are managed in accordance with the ISO 14001 PDCA cycle. Our company has established a Group-wide environmental management system, based on ISO 14001, at all of its business sites around the world as a mechanism to continuously improve its environmental assurance activities. In order to promote (DO) environmental assurance activities in conjunction with the activities of each division (Product Group, business sites, and Group companies), the Environmental Management System determines (PLAN) medium-term and annual environmental targets, and formulates priority measures and implementation plans to achieve them, which are reflected in business activities. In addition, we conduct environmental audits to check the status of initiatives and issues in each division, and conduct environmental performance evaluations that incorporate environmental and CSR aspects into performance evaluations (CHECK), leading to continuous improvement and reinforcement of environmental assurance activities (ACT).
These Responses to risks and opportunities are reflected in company-wide environmental targets and priority measures. Our company considers the environment as part of its management evaluation. The achievement of environmental targets and the results of environmental and CSR activities by each division are evaluated and scored twice a year in the environmental performance evaluation conducted as an indicator of the consolidated performance evaluation system, which evaluates the performance of the entire Group. The evaluation results are reported to the CEO and other senior management.
Metrics and Targets
Canon is aiming to achieve net zero CO2 emissions over entire product lifecycles by 2050. To achieve this goal, we have set an overall target to reduce Scope 1 and 2 emissions by 42% in 2030 compared to 2022, and reduce Scope 3 (categories 1 and 11) emissions by 25% compared to 2022. These targets have been validated by SBTi.
In addition, since 2008, we have been working toward an overall target of a 3% average annual improvement in the index of lifecycle CO2 emissions per product unit. By continuing to meet this target, we will achieve a 50% improvement in 2030 compared to 2008 levels. As of 2023, the average rate of improvement since 2008 had exceeded the average target, at 3.95%, representing an improvement of 44.4% compared to 2008. Lifecycle CO2 emissions were 7,468,000 t-CO2 (aggregate value for Scope 1, 2 and 3). These GHG emissions data are certified by an independent third party every year, and the latest certification occurred in 2023.