KONICA MINOLTA

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Medium-term Environmental Strategy

Environmental Targets and Results of the Medium-Term Sustainability Plan 2022

Environmental Material Issue Evaluation and Identification Process

Companies today must address a wide range of environmental issues, such as climate change and resource depletion. In light of this, recent changes in society, and the evolving business environment, Konica Minolta has identified material issues related to the environment. The company aims to prioritize these issues and promote initiatives for helping to solve them, while also achieving business goals. Konica Minolta has identified five material issues from the perspective of sustainability and then analyzed the material issues related to the environment — “addressing climate change,” “using limited resources effectively,” “ensuring social safety and security (safety of chemical substances)” — in even more detail so that it could set specific measures.

To identify its material issues, the Group first made a comprehensive list of environmental issues by incorporating international guidelines, as well as various stakeholder requirements. Then, it identified key issues based on their importance to stakeholders and their importance for the business. To determine importance to the business for each issue, the impacts were quantitatively evaluated using five levels. Risk analysis was used to calculate the amount of profit that would be lost if a certain risk materialized, as well as the amount of profit that could be generated if a potential opportunity was seized. In determining the importance of each issue, the Group maintained objectivity by seeking the opinions of outside experts.
The Group Executive for Corporate Sustainability, who chairs the Group Sustainability Promotion Committee, verified this evaluation process and the resulting material issues, before identifying the ones that should be prioritized.

Identifying Material Issues from Both Risks and Opportunities

When evaluating and identifying material issues related to the environment, Konica Minolta identified various environmental factors related to its business in terms of both risks and opportunities. Based on these findings, material issues were selected where solutions can lead to business growth. The company reviews each material issue annually to ensure the issues selected and related plans are appropriate.
Through this process, goals for reinforcing the business are matched with environmental targets. The plan then becomes a commitment for both top management and the entire organization, resulting in effective environmental management.
The Medium-Term Sustainability Plan 2022 identifies the three most important issues as “addressing climate change,” “using limited resources effectively,” and “ensuring social safety and security (safety of chemical substances).”

  Materiality Items (Opportunity)
1 Develop manufacturing processes with low energy, resource and CO2 load
2 Support workstyle reforms for a paperless, ubiquitous society
3 Build a waste-free customer supply chain using on-demand manufacturing
4 Reduce loss in customer work flow and supply chain
5 Improve safety and security measures in preparing for irregular climate patterns and natural disasters
6 Support early testing and drag development for unanticipated illness
7 Contribute to solutions for agricultural and food problems and new chemical substance regulations
8 Leverage ESG factors to strengthen customer engagement
9 Build ecosystems that efficiently resolve environmental problems and create new innovation
10 Leverage DX to dramatically reduce CO2 at suppliers 
11 Cut costs by improving energy efficiency
12 Introduce renewable energy in anticipation of stakeholder demands
13 Cut costs by improving resource efficiency
14 Respond to environmental requests from customers
15 Respond to ESG investment/relations, sustainable finance
16 Create technologies to upcycle unnecessary plastic
17 Earn support from stakeholders for approach to diversity
18 Contribute to water infrastructure, help to counter obsolescence, and support monitoring
19 Create technologies that contribute to use of renewable energy and new energy
20 Create technologies that contribute to ecosystem recovery 

  Materiality Items (Risks)
1 Ban on substances that contaminate ecosystems and damage the health of people (response to stricter regulation on chemical substances)
2 Higher costs for materials, resources, paper and concerns about their supply due to a spike in energy prices, insufficient raw materials and irregular weather
3 Supply chain interruption following large-scale climate disasters
4 Increase in procurement and manufacturing costs due to new emission regulations, carbon taxes, restrictions on the use of fossil fuels and other
5 Response to new regulations on product energy efficiency and markets
6 Demands from stakeholders for renewable energy
7 Decrease in opportunities for paper output in offices (increasing shift to paperless offices due to skyrocketing energy costs/raw material shortages)
8 Decrease in competitiveness due to inadequate response to circular economy (unsustainable use of resources, decline in product competitiveness due to designs using depletable energy)  
9 Material and product supply risks due to regulations on plastic use
10 Response to customers’ environmental demands
11 Drop in social trust due to insufficient governance at business partners
12 Soil contamination
13 Collection and recycling of used products
14 Depletion of resources (precious metals)
15 Delayed response to government procurement standards
16 Delays or stoppages in procurement and production due to depletion of water resources and water risks
17 Costing of virtual water
18 Impact of ecosystem destruction due to manufacturing and use of raw materials
19 Soil contamination
20 Water contamination
21 Legal compliance and management of waste 

Important Environmental Issues for Product Life Cycles

Konica Minolta identifies material environmental issues, including risks and opportunities, throughout its value chains. These are issues that need to be specifically addressed by relevant departments including product planning and development, procurement and production, as well as sales and service. The Group also determines when business risks and opportunities related to important environmental issues are likely to materialize, based on short, medium, and long-term perspectives.

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Impact of Business Risks and Opportunities Related to Important Environmental Issues

As current environmental and social issues become even more serious, Konica Minolta will face even greater risks to its business. In the long term, manufacturing will need to be revolutionized to protect the global environment. Alternatives will need to be found for fossil fuels and similar resources, and energy efficiency will need to be optimized for both production and product usage. In the short and medium terms, fossil resource prices will likely rise, the need for energy conservation will increase further, supply chains could be disrupted due to abnormal weather events, and paperless offices will probably become commonplace. Unless it takes suitable measures now, the Group will likely be faced with larger capital expenditures, higher costs, and lost business opportunities. Failure to comply with new chemical control regulations, including those that restrict certain chemical content in products, could lead to lost sales opportunities and lower revenues.
On the other hand, Konica Minolta believes it can create business opportunities by providing solutions to help solve these environmental issues. By actively introducing cutting-edge technology and combining it with Konica Minolta's strengths in imaging IoT technology and digital input and output, the Group is transforming itself into a digital company with insight into implicit challenges. The aim is to create solutions that help resolve social and environmental issues, including climate change. With regard to the global environment, the Group is working to address issues such as climate change, resource depletion, and waste by incorporating them into its medium and long-term business strategies. For example, environmental impact can be lowered by reducing production, transportation, inventory, and disposal in the manufacturing industry. Konica Minolta believes that it is contributing to this solution by providing on-demand equipment for industrial printing of materials such as packaging, labels, and textiles. Since excessive paper consumption is an issue in many companies, the Group is promoting a shift to paperless offices by providing digital workplace solutions that improve work flow efficiency. The Group is also working to reduce the enormous amount of energy that companies use to perform big data analysis these days, by offering and promoting onsite data analysis in the form of edge computing. These efforts illustrate how Konica Minolta sees environmental management as a key business strategy. In short, the company believes the purpose of environmental management is both to achieve business expansion and improve environmental issues.

Target Setting Process

The President has ultimate responsibility for and authority over all environmental management including climate change issues and is also accountable for its effectiveness. The President appoints the Group Executive for Corporate Sustainability (Group Sustainability Management Representative) to execute sustainability management and handle sustainability and environmental measures. The Group Executive formulates a medium-term plan for sustainability, which is then approved by the Board of Directors as a corporate management plan. In addition, the Group Executive for Corporate Sustainability reports monthly to the President, the chairman of the Board of Directors, and the Audit Committee established by the Board of Directors to report progress made on environmental management and on issues including climate change. The Audit Committee summarizes the important issues from those reported as matters to report at the Board of Directors meetings.
Konica Minolta has established a Group Sustainability Promotion Committee headed by the General Manager of the Corporate Sustainability Division, which serves as the organization implement the medium-term sustainability plan for the whole Group. The committee, in which persons responsible for sustainability promotion in each key division participate, deliberates the Group’s medium-term sustainability plan and annual plans. It also checks quarterly progress and conducts investigations related to the Group’s sustainability issues, including environmental ones.

Environmental Strategy of the Medium-Term Sustainability Plan 2022

Creating a foundation for Carbon Minus
GX Green Transformation

With the goal of achieving Carbon Minus status by 2030 instead of 2050, Konica Minolta's target for 2022 is to reduce CO2 emissions across the entire product lifecycle by 53% compared to fiscal 2005 levels. Three-fourths of that amount, or 720,000 tons, will come from CO2 emissions savings generated by customers, suppliers, and society.

Key measures for 2022

To achieve the goal of Carbon Minus status even faster, it is necessary to accelerate both the reduction of the company’s CO2 emissions and the support for CO2 emissions reduction outside the company. Konica Minolta believes that the use of digital transformation (DX) can dramatically reduce CO2 emissions from both sources.

In-House Initiatives

1. Sustainable Factory Activities

Target: Reduce manufacturing CO2 emissions by 18,000 tons in fiscal 2022 (reduce manufacturing CO2 emissions by 7% compared to fiscal 2019)
The Sustainable Factory Certification System was launched in fiscal 2020. Konica Minolta is aiming to have all factories meet the Sustainable Factory certification standards by fiscal 2022. In addition to the environmental impact and cost reduction efforts that have been promoted so far, Sustainable Factories will pursue targets for 2022 in order to meet the expectations of the wider society. While further deepening cooperation with stakeholders such as customers, business partners and local communities, Sustainable Factories will utilize their own technology and expertise to help solve social issues and protect the broader global environment by expanding the participants involved.

  Raw material production site Assembly/high load site
Environmental Impact reduction
Environmental impact reduction standards to be achieved by Konica Minolta production sites*
CO2 emissions 3% reduction annually (9% over 3 years) 2% reduction annually (6% over 3 years)
Discharge volume 2% reduction annually (6% over 3 years) 2% reduction annually (6% over 3 years)
Stakeholders
Helps to solve environmental issues for the broader society (stakeholders) by using environmental technology expertise Konica Minolta acquired at its own production sites. Reduces stakeholder CO2 emissions by an amount equivalent to the actual CO2 emissions of the site.
CO2 emissions at customers, suppliers and broader society
(Amount of Carbon Minus contributions)
1% reduction annually (3% over 3 years) 2% reduction annually (6% over 3 years)
Guideline
Standards for biodiversity and other initiatives to be pursued by Konica Minolta production sites
Guideline compliance status Complying with guidelines on items such as:
  • VOC reduction
  • Biodiversity (water, soil, marine plastic, etc.)
  • CSR procurement
  • Expanding introduction of renewable energy, etc.
For sites with an environmental impact that is less than 1% of the Konica Minolta total, the target is 1% reduction annually (3% over 3 years).
2. Expand renewable energy use

Target: Use renewable energy sources for 10% of procured electricity in fiscal 2022 (double the use in fiscal 2019)
Two manufacturing sites in China and 43 sales companies in Europe have completely switched to renewable sources. Ahead of fiscal 2022, Konica Minolta will consider the optimal methods for each region globally, and reinforce its initiatives to expand the procurement of power derived from renewable energy sources.

Initiatives Carried Out with Suppliers

1. DX Green Supplier Activities

Target: Increase CO2 reductions at suppliers to 17,000 tons in fiscal 2022
In order to collaborate with even more business partners, Konica Minolta began promoting Digital Green Supplier activities in fiscal 2020. The aim is to dramatically reduce CO2 emissions across the entire supply chain by launching Digital Green Supplier activities using digital transformation (DX) technology.
Previously, experts carried out energy diagnostic activities with direct visits to factories; but now, by making these digital, suppliers can carry out all the steps from diagnosis to identification of issues and implementation of measures on their own. This efficient approach means that Konica Minolta can support more suppliers with their environmental activities. Digitalization will allow the company to support more than 10 times more suppliers.

Initiatives Carried Out with Customers

1. Sustainable Solution Activities

Target: Increase customers’ CO2 reductions through product services to 710,000 tons in fiscal 2022

The Sustainable Solution Certification System was launched in fiscal 2020. With the new System, criteria are established for different businesses and product characteristics with respect to certification standards tailored to the individual environmental and social issues that Konica Minolta seeks to help solve. Successful products are certified at one of three levels, based on the degree of achievement. Konica Minolta will further reduce environmental impact by creating products and solutions that meet environmental label standards used around the world.
This system raises products’ energy conservation and cuts CO2 emissions during customer use. Meanwhile, by providing on-demand packages, labels, textile printing solutions through digitalization, it also improves the manufacturing process, supports a digital workplace by promoting workstyle reform transcending paper and place, and promotes work flow reform with edge-type IoT solutions. Providing products and services that encourage customers’ DX supports their business, and the greater operational efficiency also helps to reduce environmental impact.

2. Environment Digital Platform

Target: Create new contributions to CO2 reductions by fiscal 2022

In fiscal 2020, Konica Minolta launched the Environment Digital Platform, an ecosystem for environmental management. Konica Minolta and participating companies share and build up their environmental knowledge and expertise and co-create new value, which will enhance environmental management efficiency. This ecosystem will lead to dramatic increases in the effect of Konica Minolta’s contributions to reducing environmental impact. The program started with 15 participating companies, and this number had already increased to 39 by the end of March 2021. This unique approach to co-creation is expected to keep expanding, going forward.

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