Respecting Human Rights
Initiatives

Salient Human Rights Risks for Canon

We have identified 11 items as salient human rights risks that may arise in the Canon’s business activities, including the supply chain. These include discrimination based on factors such as race, gender, or religion; harassment; child labor; forced labor; unpaid wages/low wages; excessive overtime work; occupational health and safety; and protection of privacy. As shown in the table below, various measures are taken to prevent and mitigate these risks.

Salient Human Rights Risks for Canon

Grievance Mechanism

Canon Inc. has set up an internal reporting system through which employees can report specific human rights concerns. We also work to raise awareness of the reporting system via the company intranet and training programs, among other measures, and are taking steps to ensure its appropriate use.

Canon Inc. also has a reporting system through which external stakeholders can report specific human rights concerns associated with Canon’s corporate activities.

Both the internal and external systems maintain the privacy of informants to ensure that Canon does not treat them unfairly for reporting. We also take into consideration the convenience of informants, such as enabling anonymous reporting.

The facts in any reported case are investigated, where it is received. If it is ultimately deemed that there is a problem, we take necessary measures to remedy the problem and prevent recurrence, including issuing warnings or guidance to the employees at fault or relevant departments, as well as disciplinary action or transfers.

We have established similar internal reporting systems at almost all Group companies, both in Japan and overseas, enabling employees to report concerns in local languages.

The table below indicates reported human rights-related cases and reported cases where compliance violations were found over the past three years. There were no cases of serious human rights-related compliance violations.

Reported Human Rights-related Cases and Compliance Violations

(no.)

Responsible Business Conduct Hotline

Human Rights Awareness Training

Since 2021, we have been carrying out human rights awareness training program for employees to instill basic knowledge about business and human rights and raise awareness of the Canon Group Human Rights Policy and other human rights initiatives at Canon. Training programs held overseas reflect national and local characteristics, with each company optimizing the content and translating it into each language.

Participation Rates in the Canon Group Human Rights Awareness Training Program

To further improve the working environment and help deepen mutual understanding between the company and employees, Canon Vietnam has issued an employee handbook, covering the Canon Group Code of Conduct, the RBA Code of Conduct, and the internal rules of Canon Vietnam, including respect for human rights.

Stakeholder Engagement

The OECD Due Diligence Guidance for Responsible Business Conduct states that it is important for companies to engage with stakeholders when identifying and assessing the actual or potential adverse impact caused by corporate activities, and when devising measures to prevent or mitigate such impact. In addition to the Canon Workers’ Union, Canon is engaged in dialogue with institutional investors, suppliers, and business partners.

Stakeholder Engagement: Example 1 (Canon Workers’ Union)

To identify and assess salient human rights risks and to consider measures for prevention, we organized dialogues with the union relating to issues that represent human rights risks for employees, including discrimination based on factors such as race, gender, or religion; harassment; excessive overtime work; occupational health and safety; and protection of privacy. Through dialogues in 2024, we identified trends in corporate responses to human rights issues and exchanged opinions on a wide range of concerns, including the active participation of women in the workforce, issues involving lesbian, gay, bisexual, trans and queer (LGBTQ+) and people with disabilities, and consultations about harassment and efforts to address these issues, as well as concerns about employee career development and telework and other types of flexible work styles. The results of these discussions are taken into consideration when we identify and assess salient human rights risks for Canon and consider preventive measures.

Stakeholder Engagement: Example 2 (Business Partner, Industrial Equipment)

Canon develops, manufactures and sells semiconductor steppers and other industrial equipment on a global basis. One of the salient human rights risks in the industrial equipment sector is the risk of accident or worker injury to employees of Canon or subcontractors during the transport or the installation of equipment. The massive size and mass of these systems means that any lack of OHS care could result in a serious accident such as being caught in machinery or falling from a height. As well as taking steps to prevent injury to its employees, Canon Inc. regularly discusses safety issues with delivery/installation subcontractors, including examples of near-misses and rule violations, and related problems.

Respect for Human Rights of Employees

Prevention of Excessive Overtime Work

We have instituted a system to accurately ascertain the working hours of employees at overseas production sites deemed to be subject to a notably high risk of excessive overtime work. Actual results on working time management, including overtime work, are reported annually to the HR division of Canon Inc. Work guidelines were introduced to Canon Group production companies based in Asia in 2015 as part of human rights risk-related initiatives. In 2022, we overhauled these guidelines to make them consistent with RBA standards, extending them to all our domestic and overseas Group production companies.

Respect for Freedom of Association and the Right to Collective Bargaining

As stated in the Canon Group Human Rights Policy, Canon respects freedom of association and the right to collective bargaining. We also strive to address various labor issues by promoting dialogue between labor and management. For example, the labor agreement between Canon Inc. and the Canon Workers’ Union commits both sides to work in good faith to peacefully resolve issues in a timely manner.

Prevention of Harassment

In line with the principle of respect for humanity that Canon has followed since its foundation, Canon not only prohibits discrimination on such factors as gender or occupation, but also maintains a zero-tolerance policy on harassment, which it communicates to all management executives and employees. In addition to sexual harassment and abuse of authority (power harassment), Canon Inc.’s employment rules and Harassment Prevention Provisions prohibit other forms of harassment, including maternity harassment. These provisions have been disseminated throughout Group companies in Japan, and many have instituted similar rules based on them. In a further effort to maintain a comfortable workplace environment, Canon Inc. and its many Group companies in Japan have established a Harassment Hotline. Confidentiality surrounding employee consultations is strictly maintained and a firm guarantee against unfair treatment is provided to victims and informants. In terms of preventing harassment, regular liaison meetings are held for persons responsible at Canon Inc. operational sites and Group companies in Japan, enabling the operational status of hotlines to be monitored and shared. Meeting participants review procedure manuals and share knowledge on how to respond to reports of harassment.

Additionally, in order to address the diversification of values resulting from recent changes in work styles, lifestyles, and communication methods, it is important for each employee to have a proper, common understanding of harassment. Therefore, we carried out an e-learning program on preventing harassment for all employees of Canon Inc. in 2024, and plan to gradually roll out the program to Group companies in Japan going forward.

Evaluation & Improvement of Human Rights Risk-related Activities at Canon Group Production Sites

We are using the RBA’s Self-Assessment Questionnaire (SAQ) to assess the risk of human rights violations at 64 Canon Group production sites worldwide and confirm that the sites are not making use of child labor or forced labor and are respecting workers’ freedom of association and right to collective bargaining, and identified risks at some sites and made the following improvements:

• Made regulations clearly state that the company will not retain originals of personal ID documents or other personal documents
• Conducted evacuation drills when it is dark outside
• Established a framework for giving reasonable consideration to requests related to employee disabilities, religious practices, etc.

In addition, Canon conducts internal audits, including on-site inspections, and undergoes regular external audits. In 2024, 22 sites worldwide underwent VAP audits by the RBA. The number of sites holding valid certification as of the end of February 2025 is as follows:

Sites with RBA VAP Audit Certification* (as of end-February 2025)

• * Includes sites that underwent VAP audits and obtained certification in 2023

Some items were pointed out at sites that were audited in 2024, and we are taking corrective actions as follows:

Items Identified and Addressed through the 2024 VAP Audit

After Undergoing the RBA VAP Audits

We have seen improvements in the corporate culture and the engagement of our employees through the activities related to the RBA.
In getting ready for the VAP audit, we first conducted an internal audit based on the RBA’s requirements. We looked at the actual situation, including whether employee’s working hours were within the standards and whether their wages were paid properly. If necessary, we improved our management system by reviewing internal rules and processes and adjusting them appropriately. Through these measures, we also strengthened our cooperation with the various divisions, including human resources, health and safety, and procurement.
One employee commented: “The company’s commitment to the RBA Code of Conduct really showed that they care about our human rights.” This gave me a strong sense that our employees also had a positive take on the company’s initiatives for VAP audit.

Prevention of Child and Forced Labor and Unreasonable Restrictions on Movements

We use the RBA’s SAQ at Canon Group production sites in Japan and overseas. Based on the survey responses, we confirm that there is no evidence of child or forced labor or any unreasonable restrictions on workers’ movements on the site or while at work. In addition, to mitigate the risk of forced labor, we have confirmed through the SAQ that Group companies do not retain originals of employee personal ID documents or other personal documents, and that they have put regulations in place that clearly stipulate this.

To prevent child labor, we thoroughly check the age of employees when they enter the company, and we have developed a response flow in case an employee who is under the minimum working age is found.
In addition, young workers under the age of 18 are prohibited from working any overtime or night time, or engaging in dangerous work, thereby giving consideration to their health.

Respect for Human Rights in the Supply Chain

Canon joined the RBA in 2019, with the aim of further improving the CSR model of our supply chain.
We formulated the Canon Supplier Code of Conduct, based on the RBA Code of Conduct, to promote procurement activities that take proper account of labor, health and safety, environmental concerns, and management systems. We also collect letters of agreement concerning adherence to the Code of Conduct from major suppliers. In addition, by conducting annual questionnaire-based self-assessments, we are working to identify, assess, and prevent human rights risks among our suppliers, including the use of child or forced labor, unreasonable movement restrictions, or excessive working hours.
For some major suppliers, Canon verifies the results of the self-assessments and conducts on-site audits, providing advice on preventing and mitigating human rights risks as needed. In line with our support for the Keidanren-led Declaration of Partnership Building initiative, Canon is committed to cooperation and co-existence with business partners and strives to avoid unreasonable requests for cost reductions, orders with short turnarounds that do not reflect appropriate cost bearing, and requests for sudden changes in specifications. We also make efforts to set prices that take into account the impact of higher labor costs. Canon is also working with suppliers and industry bodies on responsible mineral sourcing initiatives. In addition, we issued the Canon Sustainability Supplier Guidelines in July 2024, summarizing our efforts in recent years to address key issues for achieving sustainability, including climate change and human rights, as well as our requests for cooperation from suppliers and surveys. Going forward, we will reinforce our efforts to promote sustainable procurement in the supply chain together with our business partners.

Supply Chain Management

Ongoing Monitoring

Canon continuously monitors compliance with the content set out in the Canon Group Human Rights Policy. We also pursue ongoing efforts to improve our identification and assessment methods for human rights due diligence, and periodically review them throughout the Group. We also review the Group’s human rights initiatives in accordance with social demand, dialogue with stakeholders, and Canon’s business operation.

Compliance with Modern Slavery Act

Canon identifies the risks of forced labor, human trafficking, or child labor within the Group and in our supply chain and publishes an annual statement in accordance with the slavery laws of various countries.

Compliance with Modern Slavery Act