Chapter 02

Our Strategy

ESG focus
areas5Carbon Neutral Society and Circular Economy
Check 2

Carbon Neutral Society andCircular Economy
Olympus is fully aware that recent climate change,
ecosystem deterioration, and water risks brought about byexcessive environmental impact and pollution are issues weneed to address promptly. Therefore, we are committed toCarbon Neutral Society and Circular Economy as one of themateriality items. We also set targets of achieving carbon
neutrality*1 with respect to greenhouse gas (GHG) emissions
from our site operations (Scope 1 and 2*2) by 2030 andusing electricity generated 100% from renewable energy forour site operations by 2030. In addition, in May 2023, weformulated and announced a target of achieving net zero*3
GHG emissions throughout the entire supply chain (Scope 1,2, and 3*2) by 2040. Check 1
To achieve this target, we continue to improve production
efficiency and implement further energy-saving measures, aswell as gradually replacing the energy used in our site

Targets and Achievements for GHG Emissions and Renewable Energy Rates

operations*4 with renewable energy sources by 2030 toaccelerate initiatives to reduce GHG emissions. We also
recognize the importance of environmental impact reduction
across the supply chain and continuously implement
measures to develop environmentally conscious products,
improve logistics efficiency, set voluntary reduction targets incooperation with suppliers, and support decarbonization
initiatives.
*1	Carbon neutrality refers to reducing GHG emissions from site operations (Scope 1 and 2) andoffset an amount equivalent to the remaining GHG emissions using carbon offsets, thereby
achieving zero emissions overall.
*2	Scope 1: Direct GHG emissions by combustion of fuels in our sites.	Scope 2: Indirect GHG emissions from on-site use of electricity, heat or steam supplied byother companies.	Scope 3: Other, indirect GHG emissions (excluding Scope 1 and 2).
*3	Net zero means reducing GHG emissions (Scope 1, 2, and 3) as much as possible (90% ormore) in line with the latest climate science (1.5°C scenario) and using credits derived fromcarbon sequestration and removal (such as afforestation and CO 2 capture and storage) for an
amount equivalent to the residual GHG emissions (less than 10%) to achieve a balance.
*4 Excluding rental properties, such as sales sites.

Major Environmental Activity Results in Fiscal Year 2023
Primary Policy

Enhancement ofenvironmental
governancesystemTargets

Improveeffectiveness andefficiency of theEnvironmental
Management
SystemPromotion ofenvironmental
management

FY2023 Achievements and Results

FY2024 Targets

 evelopment ofD
long-term environmental
targets to reducegreenhouse gas
emissions throughout
the supply chain

 etting of 2040 net zero targetS(Scope 1, 2, and 3)
Check 1 ormulation of a plan toF
reduce greenhouse gas
emissions throughout
the supply chain andimplementation ofmeasures

 aintenance ofM
ISO 14001 certification

 aintenance of ISO 14001 certification forMglobal major manufacturing sites (Europe,Americas, Australia)
Maintained ISO 14001 multi-site certificationof 10 sites in Japan and 3 sites in Asia
Conducted internal audits for administrative
functions of 8 sites in Japan and 2 sites inAsia

 nsure appropriate
E
response to indicatedpoints in internal
environmental audit andISO 14001 certification
external audit	Inspection on the waste management
process and operational improvements ateach site in Japan	Education on waste and chemical substancemanagement at Olympus SurgicalTechnologies America (138 persons)	Continue to improve the related internal
rules for products and facilities

 xpand target sites forE
the environmental/
health and safety risk
assessment
Continue to improve theenvironmental regulatorycompliance process for
products and facilities reated new Eco-Products*5C(3 new, bringing the total to 668)

 evelop environmentallyD
conscious design
mechanisms to improve
resource recycling in
product lifecycles

 ontinue to improve
Cthe process tocomply withenvironmental laws
and regulations

 nhance inspection forE
compliance status withenvironmental laws andregulations
Education forenvironmental laws andregulations

Product-relatedinitiatives

 reate Olympus
CEco-Products

 ontinue to createCproducts that areenvironmentallyconscious and tailoredto businesscharacteristics

Facilities-related
initiatives

 reenhouse gasGemissions: achievecarbon neutrality(FY2031)Renewable energy
rate: 100% (FY2031)
Emissions volume
intensity: improveby 1% year-on-yearWater use intensity:
improve by 1%year-on-year ontinue to implementCimprovements such as
improving manufacturing
processes, saving ofenergy and material
resources andintroduction ofrenewable energy, etc.,
in accordance with local
characteristics

Environmental
risk reduction
activities

Environmental
initiatives
throughout theproduct life
cycles78Measures

Olympus Integrated Report 2023

*5	Including product creation results in pastbusinesses (Imaging Business, ScientificSolutions Business, etc.)

 reenhouse gas emissions: reduced byG
45.7% (compared to the FY2020)
Renewable energy rate: 71.9%
Check 2
 missions volume intensity: improved byE
0.8% (compared to FY2022)
Water use intensity: improved by 8.6%
(compared to FY2022)

 reenhouse gas
Gemissions: reduce by55% (compared toFY2020)
Renewable energy rate:75%
Emission recycle rate:85%
Improve water use
efficiency (comparedto FY2023)

Internal (Scope 1, 2) Results
In fiscal year 2023, continual improvements in manufacturing,energy-saving measures, updating Company cars toenvironmentally conscious cars, and renewable energy use
were implemented at its sites around the world. Aomori
Olympus installed static electricity removal sheets in its air
conditioning equipment to improve operating efficiency and istaking action to reduce energy losses by installing air flow
meters to identify air leaks and implementing countermeasures.
KeyMed (Medical & Industrial Equipment) Ltd. in Europe
switched some of its company vehicles used for sales activities
to electric vehicles. In April 2022, we converted 100% of theelectricity used at major development and manufacturing sites
in Japan (10 sites) to electricity derived from renewable energy
sources. In April 2023, we did the same for Olympus SurgicalTechnologies America (Gyrus ACMI, Inc.) at its Redmond site inthe United States. For broader renewable energy use, studies
are focusing on widespread adoption, economic feasibility, andother factors in each country. The renewable energy use ratevis-á-vis the total electric power consumption has been
increasing substantially. Olympus Corporation participates in
the Carbon Neutral LNG Buyers Alliance as a part of new
initiatives to reduce GHG emissions, and has started tointroduce carbon neutral LNG*6 to the Hachioji Facility.

External (Scope 3) Results
The Olympus Group ascertains and calculates greenhouse gas
emissions throughout the entire supply chain for each category
and is taking action to reduce greenhouse gas emissions in theentire supply chain through green procurement, improvementof logistical efficiency, development of environmentallyconscious products, and other measures.
Scope 3 greenhouse gas emissions account for
approximately 90% of all Olympus Group supply chain
greenhouse gas emissions (Scope 1, 2, and 3). Among Scope
3 emissions, the percentages from purchased goods andservices (category 1), capital goods (category 2), and upstream
transportation and distribution (category 4) are high.
In fiscal year 2023, we address purchased goods andservices (category 1) by analyzing and evaluating the impact ofCO2 for each supplier with which we do business and requested
the cooperation of suppliers in Japan with measures to set
environment targets with the aim of achieving carbon neutrality(targets in line with the 1.5°C target of the Paris Agreement) andcurtail greenhouse gas emissions. In the future, we will continue
our efforts to ascertain and manage greenhouse gas emissions
throughout the supply chain and collaborate with suppliers toset voluntary reduction targets, support decarbonization efforts,
and reduce greenhouse gas emissions.

*6	Carbon neutral LNG: A type of LNG that offsets GHG generated in the process from the extraction
to the burning of natural gas with carbon credits created by environmental conservation projects.

Targets

Results
FY2020

FY2021

FY2022

FY2023

FY2024FY2031

Greenhousegas emissions(Scope 1, 2)—

Reduced by
0.7% comparedto FY2020

Reduced by
11.1% comparedto FY2020

Reduced by
45.7% comparedto FY2020

Reduce by
55% comparedto FY2020Achievecarbon neutrality

Renewableenergy rate

18.5%

18.5%

23.3%

71.9%

75%

100%

Response to Climate Change (Information Disclosure in Line with TCFD Recommendations)
Olympus recognizes that climate change is a serious issue that threatens the global environment, as well as having grave
implications for the Group’s business activities. Based on this awareness, we announced our endorsement of theRecommendations of the Task Force on Climate-Related Financial Disclosures (TCFD)
in May 2021. According to the TCFD’s Recommendations, we will disclose climate-related
financial information in a timely manner.
Olympus endeavors to reduce the environmental
impact from the entire value chain, including
product development, procurement, manufacture, logistics, sales,and repair. Under the CEO and Chief Human Resources Officer(CHRO), who are the executive officers responsible for theenvironment including responses to climate change, the HumanResources Head, who manages the environment, health, andsafety (EHS) functions, oversees matters related to EHS for theentire Group. In addition, an officer responsible for theGovernanceenvironment, social and governance (ESG) activities was appointed
and set targets for the ESG field including GHG emissions in themedium- to long-term business plan to promote ESG initiatives bythe Group. Under the Environmental Health and Safety Policy
formulated by the Human Resources Head, the EHS division
created an environmental action plan for the entire Group in linewith the ESG targets set in the medium- to long-term businessplan, monitors the status of progress of that plan, and makes
continuous improvements. In response to progress reports, the79

Our Strategy

Chapter 02

ESG focus
areas5

Carbon Neutral Society and Circular Economy

executive officers responsible for the environment (the CEO andCHRO) give instructions for any improvements required. The Boardof Directors monitors the status of the implemented climatechange measures while receiving related reports as necessary.
Also, to reinforce the commitment of management to the ESGs
and climate change initiatives, 20% of the executive officers’
performance-based stock remuneration, a part of our long-term
incentive remuneration, is linked to the evaluation results of an
external ESG evaluation organization.
Environmental Management Structure
CEO/CHRO(Executive Officers Responsible for the Environment)

Human Resources Head(Environmental Management Officer)

EHS Management Division
Regional Headquarters
JapanAmericas

Europe/Middle EastAsia/
Oceania

Subsidiaries/
Facilities

Subsidiaries/
Facilities

Subsidiaries/
Facilities

Subsidiaries/
Facilities

Olympus identifies climate change-related risks andopportunities for the short-, medium-, andlong-term periods by using scenario analysis. The influence ofclimate change on our business activities is analyzed based on the2˚C scenario: RCP2.6, IEA B2DS (holding the increase in the global
average temperature to below 2˚C above pre-industrial levels) andthe 4˚C scenario: RCP8.5 and IEA CPS (where the increase isassumed to be up to 4˚C above pre-industrial levels), presented by
the International Energy Agency (IEA). We identified that the majorrisks within the short term (one to five years) would be the factory
operation suspensions or supply chain breakdowns due to natural
disasters; and the risks within the medium to long term (10 to 20years) would be an increase in business costs due to theintroduction of carbon taxes and tighter GHG emission regulations.
Although such climate change risks could affect our corporate
strategy and financial plan, we assume that the scope of influence
would be limited. For example, the geographical location of ourfactories in terms of natural disasters, such as typhoons, can beclassified as a physical risk. We confirmed that our factories are at
low-risk locations and a business continuation plan for each site
was created in case of emergency. As a supply chain risk, we haveexperienced closures of sales sites due to typhoons and flooding
Strategyacross the world in fiscal year 2023. Still, the influence was limited.
We also expect an increase in operational costs due to carbon
taxes, etc. as a transition risk. However, the percentage of energy
costs in the factories among overall business costs is small, and,
therefore, the impact on our business will be limited.
During the company strategy and business
Risk Management
plan formulation stages, Olympus identifies
and evaluates risks that have the potential to significantly impact
the Group’s business operations. These risks include regulations
relating to the environment including climate change, technology
and other transition risks, and physical risks resulting from naturaldisasters.
Identified risks are evaluated and prioritized by eachorganization based on the degree of impact if the risk materializes
and the possibility of occurrence, and based on the results, weformulate single-year and multi-year business plans to manage therisks. Regarding risks relating to environmental laws andregulations, the quality control function monitors developments
concerning those product-related environmental laws andregulations. The environmental division of each company monitorsregulatory developments relating to their business sites, and eachperiodically evaluates the status of compliance, and takes
measures as necessary.
To address those risks that could have a particularly
substantial impact on business operations, we periodically monitor
the status of organizational risk management and report the results
to the Group Executive Committee and Board of Directors. The
CEO receives reports on the results of risk managementmonitoring, and if measures are ineffective, reviews action plans.
Olympus has set targets of achieving
Indexes and Targets
carbon neutrality with respect to GHG
emissions from our site operations (Scope 1 and 2) by 2030 andusing electricity generated 100% from renewable energy at our site
operations by 2030. In order to contribute broadly to thedevelopment of a decarbonized society, we believe that it isnecessary to take action concerning not just the Group’s own GHG
emissions, but all GHG emissions throughout the supply chain. In
light of this, in May 2023, we set and announced a target ofachieving net zero GHG emissions throughout the entire supplychain (Scope 1, 2, and 3) by 2040. This target is in line with the high
1.5˚C goal set as a challenge target under the Paris Agreement.
Achievements during fiscal year 2023 include a 45.7%
reduction in GHG emissions compared to fiscal year 2020 and a
71.9% introduction rate of electricity derived from renewableenergy. To achieve our targets for 2030, we will improve
manufacturing and introduce renewable energy at sites around theworld and continuously implement measures to develop
environmentally conscious products, improve logistics efficiency,
set voluntary reduction targets in cooperation with suppliers, andsupport decarbonization initiatives.

EnvironmentalChanges

Risks

Opportunities

Measures

2˚C
scenario

Stronger
regulatory action
for a low carbon
societyTransition risks: Increase in procurement and operating
cost* due to carbon tax, carbon emissions trading andstronger regulatory action on greenhouse gas emission byvarious countries and decline in market competitivenessdue to inability to meet stricter regulations on reduction ofgreenhouse gas emissions from our products

4˚C
scenario

Rise intemperature andincreased
extreme weather
eventsPhysical risks: Supply chain disruption caused by
growing scale of natural disasters, such as typhoons,floods, etc. (suspension of deliveries from suppliers and tocustomers due to suspension of distribution bases, repair
centers and sales branches, etc.)

 eduction of businessR
costs by energy-saving
measuresImprovements inmarketcompetitiveness bydevelopment ofenvironmentallyconscious productsImprovements inevaluation bystakeholders

Improvements in energy
efficiency
W ider use of renewable energy
Diversification of suppliersSupport for setting voluntary
greenhouse gas emission
reduction targets anddecarbonization activities incollaboration with suppliers
Environmentally conscious
design in the product/service
design & development stage* The calculated financial influence was approx. 600 million yen/year based on the carbon tax figures in the World Energy Outlook 2020 by the IEA (2020).

Details

80

Environment: https://www.olympus-global.com/csr/environment/
Environmental Health and Safety Policy: https://www.olympus-global.com/csr/effort/activity/principle.html

Olympus Integrated Report 2023