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Medium-Term Environmental Strategy

Medium-Term Environmental Plan 2019: Approach, Targets, and Results

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. It aims to prioritize these issues and promote initiatives for helping to solve them, while also achieving business goals.
To identify its material issues, the Group first made a comprehensive list of environmental issues with reference to international guidelines. 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. The selected material issues were then approved by the Board of Directors.

Identifying Material Environmental Issues Presenting Risks and Opportunities

When formulating the medium-term environmental plan, 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.
Under the Medium-Term Environmental Plan 2019, three issues have been selected as the most important: energy and climate change problems, depletion of resources, and tightening of chemical substance regulations.

Materiality Analysis for the Medium-Term Environmental Plan

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 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 solve social issues. 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 and the Audit Committee established by the Board of Directors to report progress made on environmental management and on issues including climate change.

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.

Organization of Group Environmental Management

New Environmental Targets for 2022

Moving forward with Carbon Minus goals for 2030

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 its entire product lifecycles by 52% compared to fiscal 2005 levels. Two-thirds of that amount, 660,000 tons, will come from CO2 emissions savings generated by customers, suppliers, and society.

Key measures for 2022

To move forward the goal of Carbon Minus status from 2050 to 2030, 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, and it has set the new goal of achieving Carbon Minus status by 2030.

1. In-house initiatives

Konica Minolta will strengthen the Green Factory activities it has been pursuing. In particular, it will increase energy efficiency by promoting digital manufacturing at assembly factories, which have numerous suppliers, through optimal production plans that include on-site productivity improvement and working with suppliers. In addition, it will strengthen its relationship of trust with business partners and strive to support the reduction of CO2 emissions outside the company by stepping up its Green Supplier activities, such as providing expertise to reduce CO2 emissions to suppliers as well as considering and supporting reduction measures.
With regard to renewable energy, the Group has achieved 100% renewable energy at two production sites in China and 43 sales companies in Europe. In the future, it will consider the optimal means for each region globally and strengthen its efforts to expand procurement of electricity derived from renewable energy.

New Sustainable Factory Certification System
The Sustainable Factory Certification System is being launched in fiscal 2020. In addition to 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. This includes expanded adoption of renewable energy and greater promotion of CSR procurement. 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.

Sustainable Factory Certification Criteria Raw material
utilizing site
Environmental Impact reduction Environmental impact reduction to be achieved CO2 emissions 3% reduction annually (9% over 3 years) 2% reduction annually (6% over 3 years)
Effective resource utilization 2% reduction annually (6% over 3 years) 2% reduction annually (6% over 3 years)
Stakeholders Helps to solve environmental issues for the wider society (stakeholders) by using its own environmental technology expertise. Reduces stakeholder CO2 emissions by an amount equivalent to the actual CO2 emissions of the site. 1% reduction annually (3% over 3 years) 2% reduction annually (6% over 3 years)
Guideline Biodiversity and other initiatives Conformity Conformity
For sites with an environmental impact that is less than 1% of Konica Minolta's total, the target is 1% reduction annually (3% over 3 years).

2. Initiatives carried out with suppliers

Konica Minolta has been engaged in a wider range of initiatives beyond Scope 3 CO2 emissions through the supply chain by conducting Green Supplier activities in which Konica Minolta and its suppliers brainstorm and improve together while touring each other’s production sites. By digitizing energy diagnostic tools for factories, and replacing the previous method of sending experts out to visit facilities, suppliers are now able to diagnose, identify problems, and implement measures on their own. This provides efficient support for the environmental activities of even more suppliers. The Group believes that this digital transformation will increase the number of suppliers it can support by more than tenfold.
In addition, the Group already has installed sources of renewable energy at MFP factories in China. It will support suppliers’ shift to renewable energy by providing adoption expertise and coordinating with suppliers at introduction.

New Digital Green Supplier Activities
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 promoting Green Supplier activities using digital transformation (DX) technology.

3. Initiatives to conduct with customers

Konica Minolta combines business strategy with promotion of sustainability management, such that the growth of its business will simultaneously lead to solutions to environmental issues. In addition to reducing CO2 emissions during customer use by improving the energy-saving performance of products, Konica Minolta will also support customers’ businesses and contribute to reducing the environmental impact through operational efficiency improvement. It will do this by providing products and services that encourage customers’ DX, such as: reform of production processes through the provision of digital on-demand printing solutions for packages, labels, and textiles; digital workplaces that promote work style reform that is not bound by paper or location; and new businesses that support workflow transformation with edge-based IoT solutions.
Furthermore, in order to confront this problem as a whole industry, and to dramatically raise environmental problem solving, in June 2020, Konica Minolta, together with 16 companies in Japan, launched a digital environmental platform that aims to improve environmental management efficiency by sharing and accumulating environmental knowledge and expertise among participating companies, and co-creating new value.

New Sustainable Solution Certification System
The Sustainable Solution Certification System is being 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.

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