Contents/Editorial Policy

Message from the President

Nikon Group Profile

Nikon’s Sustainability

Business Activity

Environment

Society/Labor

GovernanceCorporate Citizenship Activities

Materiality 1
Creating Social Value Through Core Technologies ............................................. 027
Nikonʼs Social Value Creation .................................................................................................................... 028

Materiality 2
Ensuring Trustworthinessby Maintaining and Increasing Quality .................................................................................... 035
Nikon Monodzukuri (Manufacturing) ............................................................................................ 037
Ensuring Quality and Safety ........................................................................................................................ 039
Customer Satisfaction ......................................................................................................................................... 044

Business Activity

Investment Support
Through Open Innovation

Venturecompanies

Venture capitalcompanies

18 13

Customer Satisfaction

Procurement Partner Quality
Management System
Assessments

Conducted for

88.4% 84companies
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Contents/Editorial Policy

Message from the President

Materiality 1

Nikon Group Profile

Nikon’s Sustainability

Business Activity

Environment

Society/Labor＞ Creating Social Value Through Core Technologies

GovernanceCorporate Citizenship Activities＞ Ensuring Trustworthiness by Maintaining and Increasing Quality

Creating Social Value Through Core Technologies
Reason for Priority
Companies are considered public institutions and have a responsibility to contribute to the sustainable development of society
through transparent and fair business activities.
Moreover, in recent years, amidst the emergence of social issues of global importance, companies are required to innovate in waysthat will transform social systems and lifestyles, and to contribute to solving these issues through their businesses.

Nikon's Approach
Imagine society in 2030, it is likely that not only will people's values, lifestyles, and outlooks on life shift, but so too will social
frameworks on topics like climate change and resource scarcity shift. Furthermore, there will likely be an accelerated shift intechnologies, such as with the advent of Industry 5.0. In the midst of this mega-shift, we believe that people will focus moreon creative, self-fulfilling work and value-driven consumption, and that there will be greater co-creation between humans
and machines.
In April 2022, Nikon announced a new Medium-Term Management Plan in which its Vision 2030 (for the year 2030) is tobecome a key technology solutions company in a global society where humans and machines co-create seamlessly .
Over its 100 years of history, Nikon has cultivated ultra-precise Monodzukuri (manufacturing) capabilities, eminently present
in its lithography systems. It has also cultivated a brand that has popularized digital cameras worldwide and greater trust
among its stakeholders. Leveraging these strengths, we will provide solutions closely tied to customer experience value andthe generation of innovation, and expand possibilities for people in a world where humans and machines co-create moreseamlessly. We will also contribute to the realization of a prosperous and sustainable society by providing innovative valuethat will help address societal and industrial challenges, including those presented in the SDGs.

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Contents/Editorial Policy

Message from the President

Nikon Group Profile

Nikon’s Sustainability

Business Activity

Environment

Society/Labor＞ Creating Social Value Through Core Technologies

GovernanceCorporate Citizenship Activities＞ Ensuring Trustworthiness by Maintaining and Increasing Quality

Nikon’s Social Value Creation
Contributing to Society ThroughBusiness Activities
The Nikon Group aspires to be a company that contributes
to the sustainable development of society through thecreativity of new value through its businesses based on its
Corporate Philosophy of Trustworthiness and Creativity.
In its Sustainability Policy, we are committed to helping
solve environmental and social challenges as well as
achieve Sustainable Development Goals (SDGs) throughour business activities by delivering unique Nikon products
and services. In addition, we have selected Creating
Social Value through Core Technologies as a materiality.
To put this into practice, in April 2022, Nikon announced
a Medium-Term Management Plan with sustainability
strategy as one of its management foundations.
Under this plan, our Vision 2030 is to become a key
technology solutions company in a global society where
humans and machines co-create seamlessly . With this,we will focus our efforts on building industries that will
expand possibilities for people and quality of life (QOL)
that will make lives better in the fields of Factory, Energy,
Healthcare, and Life & Entertainment. Specifically, in the
Factory area, we will become a lead player in flexible
manufacturing systems with Robot Vision and Material
Processing. We will also contribute to the diversificationand sophistication of devices with digital lithography.
In the Energy area, we will leverage optical processing
machines to promote energy efficiency improvementswith fine processing and re-use with additive processing.
In the Healthcare area, we will support drug discovery
that lightens the burden on doctors and patients, aiming
to achieve regenerative medicine for everyone. In the Life
& Entertainment area, we will support a society where

people are connected in ways that transcend time andspace and virtual and reality with image infrastructure
production technologies.
In a world where humans and machines co-create moreseamlessly, we will use these efforts to contribute to

the achievement of the SDGs and the realization of asustainable society, especially in the areas of safety andwork environment, decarbonization, circular systems forresources, health, and enriched spirit.

● Contributions to Society Through Creativity

Vision 2030

A Key Technology Solutions Company in a Global Society Where Humans and Machines Co-Create Seamlessly
Sustainable Society
Comfortable Society

Healthy Environment

Mental and Physical Well-Being

Areas Where Nikon Contributes
Safety and Work Environment(Reduce human work/automate and customize)

Decarbonization

Circular Systems
for Resources

HealthEnriched Spirit(More precise and individualized treatment)(Education x Digital)

Contribute to Society through Creativity

Expand Possibilities for People

Materiality 1

Make Lives Better

Industry

Creating Social Value
Through Core Technologies

Quality of Life

Factory

EnergyHealthcare

Life & Entertainment

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Contents/Editorial Policy

Message from the President

Nikon Group Profile

Nikon’s Sustainability

Business Activity

Environment

Society/Labor＞ Creating Social Value Through Core Technologies

Areas and Businesses of Contribution
in the Medium-Term Management Plan
In its Medium-Term Management Plan, Nikon aims to use its
Components, Digital Manufacturing, and Precision Equipment
businesses to provide value in the area of Industry. Likewise,
we aim to use our Imaging Products and Healthcare
businesses to provide value in the Quality of Life area. In thiscontext, we aim to contribute to a sustainable society andgrow our own company by focusing on five areas, with thedelivery of integrated solutions, including finished products,
services, and components as growth drivers.

GovernanceCorporate Citizenship Activities＞ Ensuring Trustworthiness by Maintaining and Increasing Quality● Areas and Businesses Where Nikon Provides Value

Value
Provision
Areas

Industry

Factory

Focus
Areas

Business
Activity

Precision Equipment

Quality of Life

EnergyComponents

Life & Entertainment

Healthcare

Imaging

Healthcare

Digital Manufacturing● Contributions Through Business Activities

Areas Where Nikon
Contributes

Safety and Work
Environment(Reduce human work/
automate and customize)

Precision Equipment

Components

Digital Manufacturing

Imaging

Healthcare

・Contribute to work environments and public transportation infrastructure through sensing, imaging and displays, etc.
・Contribute to urban planning and resilient social infrastructure with image analysis and optical telecommunications

technology
・Contribute to space industry and technology by providing satellite modules, etc.
・Increase energy efficiency in society with additive and fine processing using optics

Decarbonization

・Enhance manufacturing efficiency in robots with sophisticated hands and eyes and device manufacturing processes
・Contribute to a society where people connect transcending time and space and real and virtual leveraging image production

technologies
・Contribute to a healthy global environment with longer lasting light sources and more durability in our products

Circular Systems for
Resources

・Reduce the burden of waste and promote re-use among our customers through turbine repairs and ultra-precision processing,

controls and measurement, etc.
・Aim to achieve a recycling society by strengthening equipment re-use and refurbished systems sales
・Leverage digitalization to help reduce needs

・Reduce the burden on doctors and patients and support drug discovery with early and high-precision evaluation of ailments
Health(More precise medicine and ・Achieve regenerative medicine for everyone with Contract Cell Manufacturing solutionsindividualized treatment) ・Support medicine with high-precision robot modules

Enriched Spirit(Education x Digital)

・Contribute to rich and creative visual expression and culture with imaging equipment and 3D and 4D technology, etc.
・Leverage cameras, microscopes and telescopes to stimulate interest in outer space and the natural sciences and contribute to・Education and training that transcends time and space and real and virtual

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Contents/Editorial Policy

Message from the President

Nikon Group Profile

Nikon’s Sustainability

Business Activity

Environment

Society/Labor＞ Creating Social Value Through Core Technologies

GovernanceCorporate Citizenship Activities＞ Ensuring Trustworthiness by Maintaining and Increasing Quality

Research and Development (R&D)

Open Innovation

Digital Transformation (DX)In Nikon, the Technology Strategy Committee, chaired by
the President, utilizes analyses of macro social issue trends
to analyze business environments and study and evaluate
markets, developing new areas where Nikon should focus
its efforts. For example, the Next Generation Project Divisionand the Digital Solutions Business Unit have been working
together since the previous Medium-Term Management
Plan's period to expand business for optical and EUV-related
components, a short-term growth driver in the Medium-Term
Management Plan, and materials processing and robot vision,
a medium-term growth driver in this plan. Their cooperation
has made steady progress in these areas.
The Technology Strategy Committee also formulates
technology strategies and R&D plans for existing
businesses. These serve as the foundation for the Advanced
Technology Research & Development Division's duties for
R&D of technologies shared by business units and R&D of
future technologies.

Nikon has adopted open innovation, which actively
utilizes external resources, as a means of accelerating thedevelopment of new products and services and the launchof businesses that will lead to solutions for expanding andintensifying social issues.
Specifically, this includes not only corporate venture
capital investment, but also direct investment in start-up
firms through the establishment of a private fund, as well
as arrangements for providing support and incubation forstart-ups and employees that have developed technologies
or ideas with strong potential. As of May 31, 2023, we areproviding investment support to 18 venture companies
and 13 venture capital firms.

In the new normal after the emergence of COVID-19,
companies have been using digital technologies to transformbusiness models and digital transformation (DX) to leverage
establish competitive advantage. This DX has accelerated
and become essential to improve customer experience andsatisfaction and to innovate to meet future needs.
Knowing this, Nikon intends to strengthen DX as one of its
management foundations in its Medium-Term Management Plan.
Specifically, we will enhance the value we provide tocustomers by expanding our e-commerce and digital
services centered on the Imaging Products business, aswell as strengthening digital marketing by sharing andharnessing customer data internally to improve planning
accuracy and to make dynamic sales proposals. We will
also enhance this value by developing remote support andservice platforms in the precision Equipment business.
In addition, to support these DX initiatives, we will work to
overhaul the Group's IT infrastructure systems, improve its IT
literacy, and develop strong cyber security and data governance.

● Investment Support Through Open Innovation

18 Venture companies● Customer-Oriented DX

Customer Experience and Satisfaction

13 Venture capital companies

Customer Relations

Idea

Nikon can see the customer
The customer can see Nikon

Convert ideas into value anddeliver to the customer quickly

AR・MR

Expansion of e-commerce

IoT

Cloud

Expansion of digital services

Stronger digital marketing
Building remote support and service platforms

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Contents/Editorial Policy

Message from the President

Nikon Group Profile

Nikon’s Sustainability

Business Activity

Environment

Society/Labor＞ Creating Social Value Through Core Technologies

GovernanceCorporate Citizenship Activities＞ Ensuring Trustworthiness by Maintaining and Increasing Quality

Value Provided Through Business Activities
Areas where Nikon contributes; Decarbonization

Riblet Processing that Contributes
to Carbon Neutrality
Shark Skin-like Riblets
A riblet is a biomimetic technology based on the
microscopic pattern of shark skin. Sharks have evolved
the surface of their skin to have a longitudinal grooved
shape, reducing the frictional resistance of contact withthe water and making it possible to swim faster and more
efficiently. Riblets are a microstructure consisting of artificial
longitudinal grooves inspired by this evolution. Researchbegan in this area several decades ago, and swimwear
applying this microstructure to its surface garnered great
attention after it led to new world records.

Benefits of Riblet Processing
By imparting a riblet shape to an object moving against
water or air, it can help reduce frictional resistance. For
example, riblet processing on aircraft fuselages and race
car bodies can reduce frictional resistance to the air,
thereby improving fuel efficiency and increasing speed.
Riblet processing on blades used in applications such as
wind turbines, gas turbines, and jet engines offer potential
improvements in energy efficiency.

Nikon's Unique Laser Processing Technology
Laser processing generally involves irradiating a laser beam
onto an object, such as a metal, to cut or drill a hole. Nikon's
high-precision laser processing technology enables theprecise formation of minute three-dimensional shapes.
In order for maximal riblet effectiveness, they must be
machined to the optimum shape for each object. Nikon's
technology allows for this.
Furthermore, advanced optical technology enables

Riblet Mechanism for Reducing Frictional ResistanceRiblets reduce contact frictional resistance by using vertical grooves
to create distance between vertices and the wall surface andreduce the contact area.

Without riblets

With riblet processing
Cross-section of riblet processing (viewed under electron microscope)

processing a wide variety of materials, including metals,
resins, and fiber-reinforced plastics.

Proof of Concept Testing on Aircraft
It is said that about half of the resistance between an
aircraft and the air during flight is the frictional resistancegenerated on the fuselage surface. Riblet processing ona fuselage surface is expected to reduce this frictional
resistance, thereby improving fuel efficiency andreducing CO2 emissions.
Since July 2022, Japan Airlines Co., Ltd. (JAL) has been
engaged in proof of concept flights using an aircraft witha part of the paint film on the lower fuselage exterior
panel using riblet processing by Nikon and O-Well
Corporation. The aircraft, built using a Nikon construction
method, has been confirmed to be sufficiently durable,with over 750 hours of flight time. Friction-reducing
effects from the riblets have been confirmed by theJapan Aerospace Exploration Agency (JAXA).
Furthermore, since October 5th, 2022, All Nippon
Airways Co., Ltd. (ANA) has been operating two aircrafts
equipped with riblet film manufactured using Nikon's
processing technology attached near the roots of themain wings and on the upper surface of the fuselage. If
the film is applied to ANA's
entire fleet of aircraft, it isexpected to improve fuelefficiency by 2%, reduce
jet fuel consumption byapproximately 95,000
Riblet film

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Contents/Editorial Policy

Message from the President

Nikon Group Profile

Nikon’s Sustainability

Business Activity

Environment

Society/Labor＞ Creating Social Value Through Core Technologies

GovernanceCorporate Citizenship Activities＞ Ensuring Trustworthiness by Maintaining and Increasing Quality

Value Provided Through Business Activities
tons, fuel costs by approximately 8 billion yen, and CO2
emissions by approximately 300,000 tons per year.

Illustration of Riblet Processing on Aircraft
In the future, we aim to adopt Nikon-developed equipment
for riblet processing on aircraft fuselages.

Estimated Benefit of Riblet Film Applied to ANA's
Aircraft Fleet
Improved fuel consumption

Approx.

2％

Annual fuel cost savings

Equivalent to260

25m-long
swimming
pools

Annual CO2 reduction

CO2

Approx.

8

Expanding Utilization of Riblet Processing

Approx.

billion yen

300,000

tons*1 Effects calculated based on the following main conditions: Theoretical reduction effectof 6.17% x 80% processing of fuselage surface x 90% flight time at cruising altitude,
applied to currently owned aircraft (calculated by Nikon)

Expanding Educational Possibilities
Through New Video Technology
Volumetric Video: The Next Generation ofVideo Production Technology

Annual jet fuel use reduction
Approx. 95,000 tons/approx.
124,000 kiloliters

Approx.

Areas where Nikon contributes; Enriched Spirit

As the effects of climate change become more pronounced
and the accompanying damage and losses become more
serious, efforts to improve energy efficiency and reduce
CO2 emissions are accelerating in various fields to achieve
the 1.5℃ target, which aims to limit the increase in global
average temperature to 1.5 . Amid this, the frictional
resistance reduction benefits offered by riblets can beutilized in many products. In addition to aircraft and wind
power generation, application fields are expanding toinclude gas turbines, helicopters, rolling stock, ships, drones,
pumps, and household appliances. Nikon will contributeto the realization of carbon neutrality by developing
businesses and providing solutions that take advantage of
its unique riblet processing technology.

Virtual reality (VR) and augmented reality (AR)technologies are widely used in media such as music
videos and movies, enabling new kinds of visualexpression. It also offers use in training and simulation in
potentially hazardous environments, tours of museums
and art galleries from the comfort of one's home or
hospital, and in many other areas that contribute to
the visual arts, industry, and social activities, enrichingpeople's lives.
Volumetric video is attracting attention as the optimal
technology for creating this kind of VR and AR content. This
technology reconstructs 3D data based on image data capturedby multiple cameras. It allows free viewpoint adjustment after thefact and enables conversion into data suitable for the content tobe produced, making it a next-generation content production
technology with great utility value.

A volumetric video production studio at Nikon Creates Corporation, a Group company

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Contents/Editorial Policy

Message from the President

Nikon Group Profile

Nikon’s Sustainability

Business Activity

Environment

Society/Labor＞ Creating Social Value Through Core Technologies

Making Volumetric Video
Accessible via Portability
A typical volumetric video shoot requires a dedicated studiowith dozens of cameras and a green screen background.
It also requires significant processing time for images fromthe many cameras used.
Nikon's portable volumetric video capture system combines
ordinary digital cameras with depth-sensing cameras, using
the captured images and depth data to generate 3D data.
As a result, just four camera units can serve as a shooting
system, making image capture accessible even to thegeneral public. The portable nature of the system allows
data to be generated on the spot and used in real time,
regardless of the shooting location.

their own clay sculptures and dance performances in VR,
using 3D data generated from filming. The students wereable to view the 3D images of their creations from theperspective they preferred, viewing dance movements fromangles that were physically impossible. This technology
is expected to offer children viewing information andexperiences that they have never had before, thereby
fostering their powers of discovery and sensitivity, andimproving their motivation to learn.
Nikon is also working to commercialize delivering
educational solutions using volumetric video. By spreadingthese solutions to more system to more places of
education, we will contribute to improving the quality ofeducation and expanding the potential of each and every
child who will be the leaders of our future.

Corporate Citizenship Activities＞ Ensuring Trustworthiness by Maintaining and Increasing Quality● Benefits of Using Volumetric Video in Education
Fostering the power of
discovery

Students can freely choose what theywant to see and easily compare 3D data todevelop their cognitive ability

Improving motivation tolearn

New experiences using the latest expressions
via 3D and head-mounted displays (HMDs),
etc., increase students' positive attitude
toward learning

Use in a variety of subjects

Can be used eﬀectively not only for subjects
such as social studies, science, daily life, artsand crafts, and physical education, but also
for extracurricular activities such as club
activities and cultural festivals

Class Held at Setagaya Elementary School,
Affiliated with Tokyo Gakugei University
Teacher's Comment

New Video Technology Expands
Educational Possibilities
Nikon hopes to expand the use of volumetric video toplaces of education. Therefore, we are participating inScheem-D, a digitalization initiative for university education
promoted by the Ministry of Education, Culture, Sports,
Science and Technology, as well as collaborating withschools, local governments, and educational institutions
to demonstrate a new educational solution using portable
volumetric video.
One demonstration was conducted at a class given at
Setagaya Elementary School, affiliated with Tokyo Gakugei
University. In this class, students were given a hands-on
educational experience in which they were able to watch

GovernanceThe class successfully achieved the objective of
increasing the number of perspectives from which
you can view an artwork. The experience of immersing
themselves in a work of art they themselves created wasvery stimulating for the children.
Volumetric video recordings of children dancing and clay crafts, demonstrating
application in the confined space of a classroom

Parent's Comment
It was very interesting to be exposed to a new kind oflearning.

Children's Comments
When I actually went in, it was different than what I
imagined. It was fun to see me moving around.
Visually synthesized dance and craft data

NIKON SUSTAINABILITY REPORT 2023

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Contents/Editorial Policy

Message from the President

Nikon Group Profile

Nikon’s Sustainability

Business Activity

Environment

Society/Labor＞ Creating Social Value Through Core Technologies

GovernanceCorporate Citizenship Activities＞ Ensuring Trustworthiness by Maintaining and Increasing Quality

Value Provided Through Business Activities
Areas Where Nikon Contributes Safety and Work Environment

An Ultra-Compact Smart Camera
Helping to Evolve Manufacturing Sites
Aiding Automation, Labor Savings,
and DX in Manufacturing
In the field of manufacturing, there is a growing needfor DX to improve productivity, reduce costs, and create
new products and services. Therefore, manufacturers
are using automation and labor savings more and morein processing, assembly, transportation, and inspection
through machine tools, inspection equipment, andindustrial robots. In addition, it is increasingly likely that thework by highly skilled technicians and inspections relying
on the visual acuity of skilled workers will be replacedby robots and systems that utilize smart cameras and AI.
This not only increases the efficiency and productivityof manufacturing sites, but also improves the working
environment and reduces labor shortages, allowing people
to focus on work that only people can do, leading to thecreation of new value and culture.
Through the development and business deployment ofsmart cameras, Nikon will promote DX in manufacturing
and contribute to solving social issues.

Nikon's unique image processing technology accumulated
over its long history in digital cameras. Separating theimage processing unit from the camera head enables anultra-compact design that offers installation freedom forindustrial robots and various other applications.
The new LuFact A2000, announced in November 2022, isequipped with a CPU and dedicated processor to enableedge AI computing. Image data (inspection data) from thecamera head is processed and judged by the A2000-G AI
image processing unit, removing the need for computersat the inspection site. Conventionally, information obtainedat the inspection site has been sent to a server or cloudfor processing, inspection, and judgment. However, withthe edge collecting and processing the data, transmission
frequency and data volumes can be significantly decreased,
thereby reducing the burden on communication
infrastructure and power consumption.

Case Study
An automatic screw tightening equipment at one of Nikon
Group's manufacturing subsidiaries that produces encoders.
This equipment automatically tightens the screws by
analyzing the video captured by the LuFact smart camera to
determine the screw tightening position on the workpiece.
This contributes to labor savings and increased productivity.

CameraBit

Workpiece

LuFact series ultra-compact camera heads

The LuFact Series of
Ultra-Compact Smart Cameras
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