The Canon MJ Groupʼs Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Progress of Medium-Term Management Plan
Long-Term Management Objectives (2021–2025) (as of January 29, 2024)

2025 Vision

Operating income

Sales

Of which, IT solutions sales¥58.0 billion¥650.0 billion¥300.0 billion

ROE

Basic Policy 3

Basic Policy 4Strengthen Specialized
Areas and Create New
Businesses

Group Management
Aimed at Continuous
GrowthMeasures

Implement the service-type business model to expand the stock business
Carry out and accelerate strategies for different customer groups

Achievements

Achieved steady growth in the IT solutions business towards the expansion of a service-type business model.
By business area, we focused on expanding the maintenance and operation service/outsourcing area.
We made Tokyo Nissan Computer System (currently TCS) a wholly owned subsidiary in November 2023.
ITS business by customer segment grew steadily in each area toward the 2025 plan figures.

2025 Financial Targets

9.0％*Upward revision in January 2023

Sales results and targets by business area

Medium-Term Management Plan (2022-2025) Basic Policies
1. Expand IT Solutions Business with Profit
2. Increase the Earnings Capacity of
Existing Businesses

Increase the Earnings
Capacity of Existing
Businesses

Expand IT Solutions Business with Profit

Professional corporate group that solves social andcustomer issues using ICT and the power of humans*Upward revision in January 2023

Basic Policy 2

Basic Policy 1

3. Strengthen Specialized Areas and Create
New Businesses
4. Group Management Aimed at Continuous
GrowthSystems integration
services
Maintenance andoperations services/
outsourcing
IT products andsystem sales

Results for the Current Fiscal Year and Progress of Plans(Billions of yen)

2021

2022

2023

2024

2025

(Result)(Result)(Result)(Forecast)(Forecast)

209.4

221.1

70.9

73.0

(Billions of yen)

241.4
82.0

300.0

290.0

268.9

108.0

98.6
55.0

64.0

37.2

47.6

50.5

101.3

100.5

108.8

115.3

118.0

2020

2021

2022

2023

2024 Forecast

75.0
(25%)

2025 Forecast

The IT solutions businessʼs sales target of ¥300.0 billion for fiscal 2025 is expected to be achieved one year ahead of schedule in fiscal 2024
thanks to the inclusion of Primagest into the Group.
Fiscal 2020 results have been reclassified because the network camera business has been counted as an IT solutions business since fiscal 2021.
A certain product business was reclassified in fiscal 2022, but fiscal 2021 results were not changed.
*3
Fiscal 2024 forecast figures were announced on January 29, 2024.
*1

650.0

of which,
IT solutions sales

221.1

241.4

268.9

290.0

300.0

Operatingincome

39.7

49.9

52.5

54.0

58.0

Operating margin

7.2%

8.5%

8.6%

8.6%

8.9%

ROE
•

•

•

•

•

51

8.2%

9.2%

8.7%

8.4%

9.0%

Sales in fiscal 2023 increased by 3.6% year on year due to the expansion of sales of SI services and IT infrastructure services, the recovery of
office MFP supply, and the brisk sales of new digital interchangeable lens cameras. The IT solutions business, which is positioned as a growthbusiness, continued to perform well, increasing by 11.4% year on year.
Operating income in fiscal 2023 increased by 5.1% year on year despite an increase in selling, general and administrative expenses as a result of
aggressive and effective promotional activities following the transition of COVID-19 to a Class 5 infectious disease, as the increase in gross profit
exceeded these factors. A record high was achieved for the third consecutive year.
In fiscal 2024, we expect to increase sales by 3.4% year on year and operating income by 2.9% year on year by further strengthening the earnings
capacity of the Canon product business and expanding sales in the IT solutions business in a manner that also increases earnings capacity. We
expect sales in the IT solutions business to increase by 7.8% due to the strong performance of SI projects for the manufacturing and financial
industries, despite the lack of large IT infrastructure projects which were in the previous year.
In terms of ROE, we will accelerate business investment for growth and reinforce the cycle of reinvesting generated profits into growth businesses, to improve capital efficiency and earnings capacity. We aim to establish a structure that can reliably achieve ROE of 9% or higher, and aim toachieve 10% in the near future.
We revised upward the net sales forecast to ¥645.0 billion in the “Q1 2024 Results Presentation” announced on April 23, 2024. We aim toachieve the 2025 sales target one year ahead of schedule by accelerating the expansion of the strong IT solutions business.

Canon Marketing Japan Inc. | Integrated Report 2023

Progress on ITS business KPIs by customer segment
Large
corporations
Quasi-major
and upper
medium-sizedenterprises

Edge solutions*1
2021

2023

¥23.0

¥27.0

billionbillion

2025

¥45.0
billion(Net sales)

HOME*2 and IT maintenance and operations

Small andmedium-sizedenterprises

2021

2023

2025

135,000

190,000

220,000(Number of contracts)

Security

ITO*3 and BPO

2021

2021

¥32.5

¥21.5

2023

2023

¥37.1

¥26.0

2025

2025

billionbillionbillionbillion¥48.5
billion(Net sales)¥32.0
billion(Net sales)

Create value through a service-typebusiness model

630.0

Enterprise

609.5

Area

588.1

Co-creation with customers

552.1

*2

Full support for customers

Sales

Edge solutions: Imaging solutions, digital document services, mathematical and demand forecasting, low-code development
HOME: IT support cloud service*3
ITO: IT outsourcing service*1*2

Canon Marketing Japan Inc. | Integrated Report 2023

52

The Canon MJ Groupʼs Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Progress of Medium-Term Management Plan

Category

Edge solutions

HOME and IT maintenanceand operation

Security

ITO and BPO

We will help customers
resolve security issues byoffering comprehensive
security solutions for protecting the three management assets of information,
personnel and property, in
two aspects of security,
namely cyber security andphysical security.

ITO will expand high value-added services in andactively invest in the data
center business. BPO willtake advantage of thestrengths of QB5 Inc. todevelop business for awide range of customers.

Focus(Makasete IT DX Series service)

Activity
policyFor imaging solutions, wewill actively form capitaland business alliances toexpand the areas where
we offer value. For digital document services, wewill enhance the DigitalWork Accelerator services
to solve customer issues.

We will expand the onestop support service forplanning, selection, introduction, operation, maintenance, and education
on optimal IT solutions toprovide comprehensive
DX support for SMEs.

In both the printing and camera businesses, we maintain a high market share and improve the unit price per unit
under strategies for specific targets, thereby increasing earnings capacity.

Printing Business

Camera Business

Inkjet printers

2nd

Main
activities
in fiscal
2023(progress of

We expanded the lineup of the Makasete IT DX
Series and released nursing care solutions as anindustry-specific service.

We launched Cato SASE
Cloud, which centrally provides network and security
functions such as VPN on
the cloud.

Unit price per unit +47%

We integrated various IT
infrastructure services
u n d e r t h e S O LTA G E
brand and strengthened
it as the core of IT infrastructure services.

Wide format inkjet printers

Unit price per unit +26%
(vs. fiscal 2018)

Office MFPs

1st

3rd

Unit price per unit +10%

Unit price per unit +14%

16
consecutive
years

1st

Unit price per unit +73%
(vs. fiscal 2018)(vs. fiscal 2018)(vs. fiscal 2018)

the plan)

1st32
consecutive
years(vs. fiscal 2018)

In imaging solutions, weformed a capital and business alliance with AWL,
Inc., and in digital document services, we launched
an invoice receipt service.

Digital interchangeable lens cameras

Laser printers* Domestic volume share
Data source: Company research

Focus
Basic Policy 1

In April 2023, we started offering management support services and education support services as new services that are partof the Makasete IT DX Series. We support
everything from IT investment planning tohuman resource development, in addition
to IT selection, introduction, operation, andmaintenance.
In June 2023, we formed a capital andbusiness alliance with CARE CONNECT
JAPAN, Inc., and released nursing care solutions as the first industry-specific service.
We will continue to promote the expansionof new industry-specific services.

Makasete
Management support services
IT coordination services
Response to changes in laws
and systems

Educational support services

Security pack
Security measures
Data protection

Sales strategy development
support services
SFA support services

Protection against
information leaks

Skill improvement support services
Training support services

PC

Industry-specific services

Expand IT Solutions
Business with Profit

DX Series

Nursing care solutions

Expand IT Solutions
Business with Profit

53

Basic Policy 2

Increase the Earnings Capacity of
Existing Businesses

PC
Operational support service
Network

Basic Policy 4

Basic Policy 3Strengthen Specialized Areas andCreate New Businesses

Group Management
Aimed at Continuous
GrowthMeasures

Ensure continuous growth of the industrial equipment business
Create new businesses

Achievements

For further growth in the industrial equipment business, we steadily shifted towards becoming a platform holder with multi-vendor maintenance capabilities, and focused particularly on expanding semiconductor services in which profitability and continuity can be expected.

Operational support service
ServerOperational support service
Application
Operational support service
Industry A, Industry B, ...

Basic Policy 3Strengthen Specialized
Areas and Create New
Businesses

Basic Policy 4

Expand IT Solutions
Business with Profit

Group Management
Aimed at Continuous
GrowthMeasures

Develop strategies tailored to each customer segment
Further enhance the profitability of main product businesses

Achievements

Carried out strategies for specific targets to increase earnings capacity by intensively carrying out strategies
for different customer segments for the printing business, and stepping up our approaches to the intermediatecustomer group which has strong interests in photography for the camera business.

Canon Marketing Japan Inc. | Integrated Report 2023

Increase the Earnings
Capacity of Existing
Businesses

Maintenance and operation

Basic Policy 1
Basic Policy 1

Basic Policy 2

Basic Policy 2

Increase the Earnings
Capacity of Existing
Businesses

Basic Policy 3Strengthen Specialized
Areas and Create New
Businesses

Basic Policy 4Group Management Aimed atContinuous Growth

Measures

Maximize the value of human capital
Establish an engagement improvement cycle
Accelerate business investments toward growth

Achievements

Had the employees takeConducted DX certification and DX business certification exams as part of efforts to strengthen DX education.
The engagement score for fiscal 2023 increased compared to the previous year.
Proactively carried out M&As and capital investments, and investments insystems and human resources.

[Related page]▶Financial Strategy on
pages 25-28▶Human Resources
Strategy on pages 29-38

Canon Marketing Japan Inc. | Integrated Report 2023

54

The Canon MJ Groupʼs Management Strategy

Business Strategy

Overall Strategy

Functional Strategy

Overview of Businesses by Segment
Our business mainly consists of the Canon product business and the IT solutions business. As for customer segments, Canon MJ
operates in the four specific categories, the Consumers, Enterprise, Area, and Professional segments, and helps many customers
create value.

Consumers

Customer
Individuals
segment

Net Sales, Operating Income, and Operating Margin*132.8

Fiscal 2023 net sales¥138.9billionEnterprise

Fiscal 2023 net sales¥220.3billionArea

We sell Canon products such as cameras, whichhave been manufactured since our founding;imaging products; and inkjet printers, as well as
non-Canon consumer products, to individual customers through retailers, online stores, and otherbusiness formats.

5.2
6.9
2019

136.6

129.5

124.7

10.5

10.2

9.9

10.2

12.3

13.6

13.9

13.4

14.1

2020

2021

2022

2023

We sell Canon products and IT solutions directly
to large corporations and quasi-major and uppermedium-sized enterprises to resolve management
issues that vary by industry and business category. Our Major Account Headquarters is in chargeof large corporations while our General Business
Solution Headquarters is in charge of quasi-major
and upper medium-sized enterprises. Meanwhile,
Canon IT Solutions Inc. is in charge of both customer groups.

195.8

Professional

7.3

10.1
2019

13.9

9.4
2020

2021

Net sales (Billions of yen)
Operating margin (%)¥40.2
billion

8.9

17.1

19.7

5.4
14.4
2019

DX Series

4.0
9.0
2020

37 %
Enterprise

35%

Operating income (Billions of yen)

233.9

226.6

220.8

Area

2023

Net Sales, Operating Income, and Operating Margin*

Makasete

We provide products and solutions for customers
in specialist fields, such as production printing,industrial equipment, and healthcare.

8.4

2022

6.9

5.5

15.6

12.0
2021

2022

Net sales (Billions of yen)
Operating margin (%)

229.7

7.8

7.6

18.2

17.5

2023

Fiscal 2023 Breakdown of
Net Sales by Business Segment
IT solutions business

44%

2023

(after reclassiﬁcation)

Operating income (Billions of yen)

Net Sales, Operating Income, and Operating Margin
43.7

Fiscal 2023 net sales

22%

2023

5.1

5.1

We provide Canon products and IT solutions tosmall and medium-sized enterprises in Japan by
fully leveraging our diverse channels for indirect
sales through business partners and system partners and direct sales through Canon System &Support Inc.

CustomerSpecialist fields
segment

6%(after reclassiﬁcation)

220.3

202.7

190.6

184.6

223.7

billionConsumers

Operating income (Billions of yen)

268.3

¥229.7

Professional

Net Sales, Operating Income, and Operating Margin

Customer
Small and medium-sized enterprises
segment

Fiscal 2023 net sales

138.9

9.9

Net sales (Billions of yen)
Operating margin (%)

Customer Large corporations and quasi-major
segment and upper medium-sized enterprises

134.7

Fiscal 2023 Breakdown of
Net Sales by Customer Segment

41.7
30.7

3.7

31.5

1.6

1.9

2019

2020

12.6
7.9

6.2

40.2

5.2

3.6

2.5
2021

Net sales (Billions of yen)
Operating margin (%)

9.0

2022

2023

Canon product business, etc.

56%

Operating income (Billions of yen)*In fiscal 2024, we transferred the organization of some sales channels in the Area segment to the Consumer segment. Accordingly, the results for fiscal 2023 have been
reclassified between these segments.

55

Canon Marketing Japan Inc. | Integrated Report 2023

Canon Marketing Japan Inc. | Integrated Report 2023

56

The Canon MJ Groupʼs Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Consumers Segment
As we value our connection with customers, we will promote
one-to-one marketing and create customer value that exceeds
expectations to further strengthen proﬁtability
Senior Vice President, Director of Consumers Business Unit

Koichi Mikami

We sell Canon products such as cameras, which have been manufactured since the time of
our founding; imaging products; and inkjet printers, as well as non-Canon consumer products,
to individual customers through retailers, online stores, and other business formats.

Segment Targets/Our Strengths
Net Sales, Operating Income, and Operating Margin
139.3

138.9
10.2

14.1

9.8

13.7

127.5
10.2

13.0

2023
2024
2025
(Results)(Forecast)(Forecast)
Net sales (Billions of yen)
Operating income (Billions of yen)
Operating margin (%)

2023 Performance Highlights• Sales of digital interchangeable lens cameras remained strong thanks
to increases in opportunities to take pictures and increases in sales of
the EOS R series.
• Sales of inkjet printers decreased due to a shrinking market.
• Sales of IT products rose slightly because sales of high-performance
PCs and PC peripherals remained strong.
Our Strengths• Leading share of the digital interchangeable lens camera market• A membership organization and a diverse menu of services forcustomers with a strong interest in photography• Detailed services and support systems for photographers• Marketing capabilities from the customerʼs perspective, including
product exploration and channel development

Awareness of the Market Environment
Opportunities• Increasing number of photo opportunities dueto the recovery of demand for events andtravel• Growing needs for video creation centeredaround social media• Growing needs for broadcast camera systems
to communicate natural disasters in real time

Risks

• Shrinking digital interchangeable lens camera
market due to further functional improvements
in digital devices• Reductions in print volume due to changes inprinting environment

Toward Achieving the Goals of Our Medium-Term Management Plan
In the consumer market, where trends and technological innovation are rapidly changing and emerging, we strive to deliver valuethat exceeds customer expectations. In the camera business, we will promote one-to-one marketing to strengthen our connection
with the intermediate customer group by focusing on expanding sales of full-frame models, and enhancing service menus. In theprinting business, we will expand sales channels in the SOHO market and e-commerce market, focusing on the sales of high-unitprice products. Furthermore, we will accelerate the creation of new businesses that will become pillars of earnings, and aim to
maintain sales and improve earnings capacity.

57

Canon Marketing Japan Inc. | Integrated Report 2023

Case Study
Fostering of Photographic Culture / Creating Customer Experience Value Tailoredto Each Individual Customer
We promote a variety of activities for customers witha strong interest in photography, including professionals and avid photography enthusiasts. The Canon
Photo Circle has been enriching the photographic
lifestyles of its many members since 1954 by providing a wide range of information, such as introductions
to the works of professional photographers, details
on new products, and shooting and printing techniques. Meanwhile, the Canon Photo Contest, which
was established in 1953, is said to be the largest of
its kind in Japan and has received numerous entries
from professionals and amateurs alike. Furthermore,
we have been a special sponsor of the Photo Koshien(National High School Photography Championships)
since its first event, and supported the developmentof creativity and sensitivity in high school students(584 schools participated in 2023). In 2024, we consolidated user accounts (IDs) into Canon ID for the
purpose of providing optimal information and support
for photo and video activities tailored to each customerʼs needs. This makes it possible to conveniently
use the applications and services provided by Canonwith a single account.
We will continue tocontribute to fostering photo culture,and help our customers enjoy photography more.
Club photo session̶a subjectspecific event under the guidanceof a professional photographer

Incorporating Canonʼs Imaging Technology into Our Broadcasting Activities
Broadcast lenses handled by our broadcasting business enable high-definition video production atbroadcasting stations and in the video productionindustry. In addition, broadcasting camera systems,
known as weather-cams, which are installed at broadcasting stations and key points such as airports andcoastal areas, contribute to society by conveying
real-time images of heavy rain, storms, earthquakes,
and other natural disasters.
In recent years, the demand for video content has
rapidly grown in the video production market, and agreat deal of content is being produced and distributed. In fiscal 2021, Canon Inc. brought together its

long-cultivated imaging and network technologies todevelop a remote camera system for video production that offers high image quality and streamlines
photographic workflow. We will continue to deliver
such products and solutions that address the growing
needs of customers
for remote methodsof video productionthat offer greater efficiency andlabor-saving merits.
BU-43U outdoor remote camera
installed on a building rooftop

Initiatives for Creation of New Value
We are actively taking on the challenge to explore
new businesses that fit the times from a market-in
perspective, as we sense changes in the environment.
One example is the PowerShot V10, a new concept
camera developed and launched to expand the baseof the video market.
Based on the catchphrase “Letʼs Vlog 365 days ayear,” it is equipped with a 1.0-type CMOS sensor anda large-diameter microphone for serious functions
while enjoying easy video shooting with a smartphone-like design.
We are working to provide new imaging value toour core customers of video creators and vloggers,
as well as to smartphone users who have never purchased a camera before.
Furthermore, it is not limited to consumer use, but
is also envisioned for use in the B2B market as video
shooting equipment.

In addition, the Privacy Talk wearable noise reduction device supports comfortable online communication in various places and environments by reducing
oneʼs own voice and minimizing surrounding noise.
Ichikara Lab, Canon MJʼs first in-house start-up,
handled everything from concept planning to productcommercialization and marketing.
We will continue to listen to the voices of our customers, and explore and create new products andservices with an eye to the future.

PowerShot V10 vlog camera

Privacy Talk wearable noise
reduction device

Canon Marketing Japan Inc. | Integrated Report 2023

58

The Canon MJ Groupʼs Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Enterprise Segment
Aiming to increase sales and proﬁts for ﬁve consecutive ﬁscal years
Through in-depth analysis of customers and industries andthe use of proprietary technologies, we will enhance the quality ofour proposals and deepen co-creation with our customers, thereby
transforming our service-type business into a new pillar of earnings

Canon IT Solutions Inc.

We are co-creating the future with our customers by leveraging
our unique technologies and developing highly skilled professionals,
thereby achieving ITS3000 ahead of schedule.
President, Canon IT Solutions Inc.

Senior Vice President, Director of Enterprise Business Unit

Hiroyuki Matsumoto

We provide Canon products, IT solutions and BPO services that help resolve the various industry- and business-specific issues of our vast range of customers, from large corporations toquasi-major and upper medium-sized enterprises, public agencies, and educational institutions.

Segment Targets/Our Strengths
Net Sales, Operating Income, and Operating Margin
231.2

220.3

8.9

249.0

8.9

9.0

20.5

22.5

2023 Performance Highlights• Sales of IT solutions increased significantly due to an increase in thenumber of large-scale SI projects and the solid performance of thesecond data center• Sales of office MFPs increased due to recovery of product supply.
Sales of laser printers increased thanks to multiple large deals in the
fourth quarter.

Akira Kanazawa

Canon IT Solutions is a systems integrator that engages in the development, operation, andmaintenance of systems for a wide range of sectors, primarily manufacturing and finance, andprovides services to businesses centered on data centers. On the strength of our high levels of
quality control, we offer a vast array of solutions that make use of our very own software andmathematical technologies that have been cultivated over many years.
Aiming to realize VISION 2025, Canon IT Solutions Inc.ʼs vision for fiscal 2025, we will strengthen management based on our
medium-term management plan, which places emphasis on processes and key performance indicators, and forge even further
ahead with the development of our three VISION 2025 business models: the service-type business model, the systems integration model, and the business co-creation model.
With the service-type business model, we will address the issues shared by many of our customers by drawing on our technology and knowledge of various industries and businesses accumulated to date. The systems integration model will facilitate ourdevelopment of systems that capture the essence of our customersʼ issues and underpin their businesses at every stage of the
IT life cycle, including maintenance and operations. With the business co-creation model, we will look into business-related issues
that our customers are unaware of and co-create solutions from a DX point of view. We also remain committed to developing
highly skilled professionals so that we can provide even greater value to customers through these three business models. As thecenterpiece of the Canon MJ Groupʼs ITS3000 strategy, Canon IT Solutions will orchestrate the achievement of this strategy.

Our Strengths

19.7

2023
2024
2025
(Results)(Forecast)(Forecast)
Net sales (Billions of yen)
Operating income (Billions of yen)
Operating margin (%)• Deep and extensive customer base developed throughlong-standing solid relationships with our customers• System construction and development capabilities by approximately 3,500 system engineers mainly from Canon IT Solutions• Highly sophisticated technological capabilities such as proprietary software technology, mathematical technology, language
processing technology, and image analysis technology• Collective strength that allows us to provide a range of IT infrastructure services centered on data centers as well as proposals,
development, maintenance and operations of Canon products
and systems

Awareness of the Market Environment
Opportunities• Expansion of IT investment accompanying business model transformation• Greater demand for IT solutions and BPO due todiversified business processes in response to theneed to improve operational efficiency, enable
employees to concentrate on core duties, and offset the declining workforce• Growing demand for security measures in response
to rising cyberattacks and information leaks

Risks• Lack of talent and intensifying competition
for securing highly skilled professionals in the
IT market• Rapidly increasing number of paperless offices due to widening adoption of telework anddigital workflow

Toward Achieving the Goals of Our Medium-Term Management Plan
The MA Headquarters and GB Solution Headquarters will steadily expand existing businesses, such as Canon products, document
solutions, and imaging solutions, while Canon IT Solutions will expand systems integration services as well as solutions such as
mathematical and demand forecasting and low-code development. Moreover, each organization within the business unit will work
together to create and expand a new service-type business model through co-creation with customers and turn it into a pillar of
earnings. To these ends, we will expand business by investing in human capital and leveraging synergies with Group companies
both inside and outside of the Enterprise Business Unit.

59

Canon Marketing Japan Inc. | Integrated Report 2023

Joint Proposal by Canon MJ and Canon IT Solutions (Edge Solutions)“Large-Scale Disaster Rapid Response Solution” for Property and Casualty Insurance Companies
With the occurrence of large-scale disasters such as
earthquakes and extreme rainfall events on the risein recent years, expediting procedures from on-site
investigation (damage assessment) to payment has
become an urgent issue for property and casualty
insurance companies in order to support the reconstruction of the lives of disaster victims.
Our Large-Scale Disaster Rapid Response Solution
for property and casualty insurance companies aims
to support efficient damage assessment and prompt
insurance claim payment through various IT services.
Its main services include: a payment process video
distribution service that outlines the series of procedures from application to receipt of insurance
claims and can be viewed even at the time of adisaster when it is difficult to make a phone call; animage-sharing system for damage assessment thatallows policyholders to complete the assessment
process by simply taking and sending their own pictures of the damage; a visit appointment & route
optimization system where the policyholders are able
to schedule a visit by an assessor if necessary andthe optimal route of dispatch for the assessor is automatically assigned; a flood damage witnessing appthat allows assessors to complete insurance claim
payment procedures simply by entering informationon the flood damage at the site into a tablet device
in the event of a storm or flood disaster; and an electronic storage service that digitizes procedures related to insurance claim application in disaster-stricken
areas, making it possible for information to be shared
and retrieved quickly.
Among these services, the visit appointment &route optimization system utilizes the same mathematical technology from Canon IT Solutions applied inlogistics optimization solutions.
Our solutions were put to use during the Noto
Peninsula earthquake that occurred in January 2024.
We will continue to provide solutions that leverage
our IT and extensive business knowledge to help
speed up support for victims of large-scale natural
disasters.
Simple claim
application
procedures
Policyholder

Watch the video to checkthe procedures
Report the status ofdamage via website
Request an investigation
via website
Efficient damage
assessment
Flood damage
witnessing app

Speedy claim
payment
Property and casualtyNon-life insurance company
Payment process
video distribution
service
Image-sharing
system for damage
assessment
Visit appointment& routeoptimization
systemElectronicstoragesystemAssessor

Canon Marketing Japan Inc. | Integrated Report 2023

60

The Canon MJ Groupʼs Management Strategy

Business Strategy

Overall Strategy

Functional Strategy

Area Segment
Aiming to increase sales and proﬁts forfour consecutive ﬁscal years
We will expand the scope of DX support from IT investment
planning to education to provide total support for business
innovation for SMEs with room for development
Yasuyuki Uotani

We provide Canon products and IT solutions to small and medium-sized enterprises in Japanby fully leveraging our diverse channels for indirect sales through business partners and system partners and direct sales through Canon System & Support Inc.

Segment Targets/Our Strengths

229.7

7.6

235.0

7.8

245.0

8.0

2023 Performance Highlights• Sales of IT solutions increased thanks to recovery of the supply of business PCs, winning multiple projects for building IT infrastructure, andan increase in the number of orders for the Makasete IT DX Series.
• Sales of office MFPs increased due to recovery of product supply.
Sales of laser printers decreased due to a rebound from the shipment
increases resulting from the recovery of supply in the previous year.

17.5

18.3

2023
2025
2024
(Results)(Forecast)(Forecast)
Net sales (Billions of yen)
Operating income (Billions of yen)
Operating margin (%)• Diverse sales channels that span across the country, such as ourbusiness partners that serve prominent local firms, system partners that are mainly involved in the systems integration business,
and Canon S&S, which engages in direct sales• Ability to propose optimal solutions by combining Canon products, ERP packages, security products, maintenance and operations services, and a variety of other products and services

Awareness of the Market Environment
Opportunities• Rising demand for IT investments as SMEs look
to digitalize their business• Rising demand for security risk measures• Responding to amendments to laws pertaining
to SMEs• Growing demand for business PCs and related
products following the end of Windows 10
support• Expanding AI and cloud services markets

Risks• Lack of talent and intensifying competition
for securing highly skilled professionals due todeclining labor population• Reductions in print volume at offices due tochanges in working styles• Business succession risks due to aging anddeclining labor population

Toward Achieving the Goals of Our Medium-Term Management Plan
IT investment is drawing greater interest among customers of SMEs as a solution to issues such as the need to streamline operations due to labor shortages and strengthen security.
Together with our diverse sales channels throughout the country, we will work to (1) expand sales of document solutions that
capture digitalization trends, (2) expand security solutions sales partners, and (3) accelerate the incorporation of Canon products
and solutions into partnersʼ sales strategies and expand integrated IT solutions services that cover the selection, introduction,
maintenance, and operation of IT equipment. In this way, we will accelerate supporting SME customers in solving their issues andin their business innovation.

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Canon Marketing Japan Inc. | Integrated Report 2023

Takeshi Hiraga

Canon System & Support is in charge of the direct sales of Canon products and IT solutions andconsulting services for SMEs in Japan. Leveraging our nationwide business network and groupsynergies, we provide support services on a one-stop basis for planning IT investments, selecting and implementing the most optimal solutions to customersʼ issues, day-to-day operations
after implementation, maintenance when problems arise, and education.
Over the years, we have been providing customers with the tools and infrastructure for communicating information to as many
people as possible and to people as far away as possible, which are essential to the continuity of our customersʼ businesses, andhelping ensure stable operations in the process. Since the 1990s, we have been addressing the changing needs associated withthe proliferation of PCs and the internet by providing a range of solutions, including corrective maintenance for PCs and security
devices, in a timely manner. Nowadays, SME customers are faced with issues such as uncertainty with regard to the implementation of DX and a lack of personnel with IT knowledge. In response to these needs, we provide a comprehensive line of support
services to assist our customers in conducting business, such as by helping them plan IT investments and select and implement
appropriate IT system, ensuring stable operations through support for day-to-day maintenance and operations when problems
occur, and offering IT literacy training support. We will continue to help customers evolve their business through the use of IT byacquiring and developing highly knowledgeable and skilled personnel.

Development of the Makasete IT DX Series to Fully Support the IT Environment of SMEs

Our Strengths

19.5

President, Canon System & Support Inc.

Providing new value in line with changing markets and society
For SME customers in Japan, the Group has provided, and supported the stable operation of, tools andinfrastructure that respond to the changing times tohelp customers communicate information to as many
people as possible and to people as far away as possible, through collaboration between local business
partners and Canon System & Support. In line with
this, we are also developing internal business systems
and training human resources for these systems.
In the past, we established a maintenance andrepair structure to minimize customer downtime
as copiers and MFPs became more popular. As theInternet became widespread in the 2000s, Canon
System & Support has established a support structure and provided IT maintenance services by training
engineers to assist the stable operation of PCs andnetworks. In recent years, we have been pursuing initiatives to resolve issues when they are first received
at our customer support center that handles calls for
PC and network problems, without dispatching engineers to the customerʼs site.
While pursuing such initiatives, Canon System &Support focused on the fact that customersʼ IT infrastructure issues are related to day-to-day operations,reviewed its IT maintenance system, and added maintenance and operation services to the Makasete IT DX
Series to strengthen operational support services. We
have now started an initiative to receive calls fromthe customers of our business partners at the customer support center, and we will continue to workwith our business partners to help customers in moreregions to facilitate their business.

Expanded IT maintenance service menu to meet customer needs
Market andcustomer needs

Net Sales, Operating Income, and Operating Margin

At Canon System & Support, we strive to continue expanding
our proﬁtable service-type business by addressing
the concerns of SME customers across Japan throughour comprehensive line of support services.

Canon S&S

Vice President, Director of Area Business Unit

Canon System & Support Inc.

Means of communicating information by customers are changing.

Recently, customers are faced with:・Diversification of security threats ・Shortage of IT-related human resources
・Business transformation through DX ・Response to changes in laws

Spread of PCs and the Internet
MFPs and fax machines
Centered around paper

Stable operation of devices
Before 2000

Need forstable operation of PCs

Failure support for PCs
2001

Failure recovery for
network connections,email, etc.
Responding to network problems
2011

Makasete IT DX Series

Security packseries(Security measures)

2021

Maintenance andoperation*Renewal of maintenanceand operation menuManagement support/educational support
Industry-specificSupport service for implementation of the Act
solutionsconcerning Preservation of Electronic Books (Nursing care and welfare industry)

2022

2023

2024 –

Providing one-stop service forplanning, selection, introduction, operation, maintenance, and education
Providing value to meet customer needs

Canon Marketing Japan Inc. | Integrated Report 2023

62

The Canon MJ Groupʼs Management Strategy

Business Strategy

Overall Strategy

Functional Strategy

Professional Segment
We provide products and solutions for customers in specialist fields, such as production printing, industrial
equipment, and healthcare.
Production Printing

Healthcare

Working to expand sales and further improve proﬁtability
We will enhance our solution business for workﬂow innovation topromote the digitalization of the printing industry

Aiming to achieve net sales of ¥20.0 billion as soon as possible andimprove the proﬁt margin
As one of Japanʼs leading independent systems integration vendors
in healthcare, we provide comprehensive support for our customersʼ
digitization needs and contribute to improving the quality of healthcare

President, Canon Production Printing Systems Inc.

Katsumi Ueda

We propose a range of solutions that combine hardware and software in the data printing services, publication and commercial printing, industrial printing, point-of-purchase systems, large
format printing, document services, and other business fields.

2023 Performance Highlights• Although we were able to receive multiple orders for the ProStream highspeed continuous feed printer and the Colorado industrial printing printer,
which led to the development of the publication and commercial printing
market, data printing service market, and industrial printing market, sales
in this business area decreased due to the loss of multiple projects forhigh-speed continuous feed printers in the previous fiscal year.
Our Strengths• Long-cultivated software development capabilities for workflow innovation• High level of technical capabilities that have supported the stable operation of products and software• Solution proposal capabilities for solving potential customer issues• Strong organizational capabilities with integrated sales, planning,development, and services

Toward Achieving the Goals of Our
Medium-Term Management Plan
In the printing market, which is transitioning fromanalog to digital, we aim to transform our business portfolio so that we become a solutions
company that can resolve diverse and complex
customer issues through total solution proposals
combining hardware, such as high-speed continuous feed printers, and software, including pre- andpost-printing processes, and contribute to the
expansion of the Canon MJ Groupʼs profits.

Aiming for dramatic growth to realize net sales of ¥50.0 billion in the future
As a robust and resilient platform holder that is indispensable to ourcustomers, we address domestic needs with superior overseas technologies
Shunichi Minezaki

We procure semiconductor-related equipment, testing and measuring equipment, and opticalmeasuring equipment from Japanese and overseas manufacturers and sell them primarily tosemiconductor manufacturers, and also provide installation and maintenance support.

2023 Performance Highlights• Although sales of power semiconductors for automobiles, related services, laser interferometers, and the component businessgrew steadily, sales in this business area decreased due to theabsence of multiple projects for semiconductor manufacturingsystems, etc. in the previous fiscal year.
Our Strengths• Ability to research and discover outstanding products
from overseas based on the latest technological trends• Highly specialized personnel who import a variety of
unique products and provide sales, installation, and maintenance support for these products

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Canon Marketing Japan Inc. | Integrated Report 2023

Toward Achieving the Goals of Our
Medium-Term Management Plan
The semiconductor market is expected to continue tosee strong investments, boosted by government subsidy policies. By expanding sales of the semiconductor
service business, in which profitability and continuity
can be expected, we will strengthen our revenue baseto one that is resilient to market changes. We will alsosteadily pursue partnerships with overseas business
partners and launch new businesses, and expand thescale of our non-semiconductor businesses to achieve
the enhancement of the scale of our businesses withthe aim of improving profits.

Yoshinobu Kuroi

As a systems integrator that offers a wide range of IT solutions and services to the medical
and healthcare sectors, centered on electronic medical records, we provide a one-stop service
that covers everything from system proposals and development to installation, operations, andmaintenance.

2023 Performance Highlights• Sales in this business area increased significantly thanks to theacquisition of a new customer base of medium and large-sized
hospitals as a result of the transfer of the medical information
systems integration business from Canon Medical Systems.
Additionally, there was an increase in the number of projects
due to the mandatory introduction of online insurance eligibility
verification systems as a national policy in Japan, and expansion of sales of electronic prescriptions
Our Strengths

Industrial Equipment

Executive Oﬃcer, Group Executive of Industrial Equipment

President, Canon ITS Medical Inc.

• Possession of a specialized and advanced structure specific to medical information systems integration, covering development, assembly, installation, operations, andmaintenance• Efficient provision of solutions that meet customer needs
through the development and offering of cloud services thatcomply with medical guidelines

Toward Achieving the Goals of Our
Medium-Term Management Plan
The spread of electronic medical records in medical settings is expected to progress under thegovernment-led Medical DX Vision 2030. We
promote essential DX in the field by combining
hardware and software from a broad range of
products to solve issues that vary from customer
to customer, ranging from hospitals to clinics anddispensing pharmacies. In addition, by demonstrating the effects of the business integration
with Canon Medical Systems, we will solidify
our customer base, expand our stock business,
and aim to achieve ¥20.0 billion in net sales andimprove earnings capacity.

Segment Targets
Net Sales, Operating Income, and Operating Margin

13.0
9.0

3.6

Production
printing

46.0

44.0

40.2

Percentage of segment sales

9.3

Healthcare

24 ％

38 ％

Fiscal 2023
percentage ofsegment sales
4.1

6.0

2023
2024
2025
(Results)(Forecast)(Forecast)
Net sales (Billions of yen)
Operating income (Billions of yen)
Operating margin (%)

Industrial equipment

38 ％Canon Marketing Japan Inc. | Integrated Report 2023

64

The Canon MJ Groupʼs Management Strategy

The Canon MJ Groupʼs Management Strategy

Business Process Outsourcing (BPO)

MarketingAchieving Drastic Business Growth through Our Unrivaled
Business-Speciﬁc BPO Services in the Promising BPO Market

We will continue to provide the highest quality at
the lowest cost to continue to be chosen by customers

Senior General Manager, BPO Management Center

In 2018, the Company reorganized its business units from a structure based on product and sales channels to one based on markets and customers. At the same time, in order to support our business units more efficiently, we established an organization that
integrated the product planning functions and service and support functions throughout the Company.
We have since reshaped the organization, and our business units are now underpinned by four sections: the Business Innovation
Section, the Business Products Marketing Section, the IT Products Marketing Section, and the Service & Support Section.

Junji Asano

Canon MJ Groupʼs BPO provides business process outsourcing services to a broad
range of customers, including large corporations, quasi-major and upper medium-sizedenterprises, as well as administrative bodies such as central government ministries andagencies and local governments, based on the trust that we have cultivated through ourprinting and IT solutions businesses. We aim to execute high-quality operations on thebehalf of our customers by introducing the latest technology and improving operations.

Customers

Individuals

Segment

Consumers

Large corporations and Small and medium-sized
quasi-major and upper
enterprises
medium-sized enterprises

Specialist fields

Structure
The BPO Management Center consists of more than 1,400 members from Canon MJ and four BPO-related Group companies:
At Canon MJ, we are developing a business platform that enables us to provide even better services, such as service planning,
operational infrastructure development, and audits. Meanwhile, Canon BizAttenda is in charge of performing the businessplanning process of each project, managing their operations, and making improvements while Canon Business Support works
to streamline internal business processes and enhance operational quality.
We have also teamed up with Canon Production Printing Systems Inc., a provider of on-demand color printing and data
printing services, as well as highly specialized external partners to develop a structure that is even more conducive toaddressing the increasingly sophisticated needs of our customers.
We have also been focusing on developing services specialized in specific operations and industries in recent years. In
August 2022, we welcomed QB5 Inc. to the Group, which provides BPO specialized in human resources and labor operations,and in March 2024, we welcomed Primagest to the Group, whose strength lies in BPO specialized in financial industry.

Enterprise

Area

Professional

BPO

Marketing Headquarters
Organization integrating the product planning functions and service
and support functions throughout the Company●Business Innovation Section●IT Products Marketing Section●Business Products Marketing Section ●Service & Support Section

Administrative bodies (including central government
ministries and agencies and local governments)

Routine tasks

Temporary tasks

Entrusted operations

Entrusted operations

Routine tasks

Visualization ofbusiness processes

Entrusted operations

Business consulting
function

BPO

Document digitalization, screening work, help desk, HR-related tasks, etc.
Develop according to customers’ business issues

IT solutions
Digital document services

Group Headquarters

Private sector (including finance, manufacturing,and distribution)

Document management tools

AI Optical Character
Recognition (OCR)

Our customersʼ business environment has undergone drastic changes in recent years, including the increasing speed of technological developments, and they are striving to enhance their competitiveness in accordance with these changes.
We believe that in order to meet our customersʼ expectations, it is essential that we create highly competitive products, solutions, and services by adopting new technologies ahead of our customers, calmly analyzing the rapid and complex changes inmarkets, and exploring and developing growth markets. We achieve high productivity by advancing these processes efficiently
based on overall optimization.

Workflow

Data centers

BPO Management Center

Individual and corporate customers
Marketing functions

Toward Achieving the Goals of Our Medium-Term Management Plan

Digital documents
Printing

Creating value-added solutions through combinations
Imaging solutions

Cybersecurity

External cutting-edge
products and services

The demand for BPO services is expected to increase as employment status and workstyles are being reviewed amid worsening labor shortages. Canon MJ helps customers overcome such social hurdles as the labor shortage and workstyle reform
through the BPO services it provides. We are establishing and rolling out industry-specific services based on the knowledge
gained from large-scale projects involving screening work for financial institutions and administrative agencies.
We are also enhancing services for a wide range of departments, including internal IT support within the customerʼs company and agency service related to human resources. Going forward, we aim to expand BPO services that utilize Canonʼs unique
technological capabilities in document digitization and imaging solutions in an aim to improve sales and profits.

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Canon Marketing Japan Inc. | Integrated Report 2023

Canon Marketing Japan Inc. | Integrated Report 2023

66

The Canon MJ Groupʼs Management Strategy

Overall Strategy

Functional Strategy

Business Strategy

MarketingBusiness Innovation

Service & Support

Creating new solutions and services centered around our strengths
in imaging and digital documents

Continuing to be chosen by customers by refining products andtechnologies and achieving both high quality and high productivity

The role of the Business Innovation Section is to continue developing new solutions and services
from a customerʼs perspective by combining our assets, centered on our strengths in digital
documents, imaging, and security.
In imaging solutions, we have formed alliances with multiple vendors in Japan and overseas toexpand video analysis solutions utilizing video and AI, and we continue to create new services
that realize a safe and secure society and improve productivity.
In digital document services, we provide services that are compliant with laws and regulations, asset management platform services for important customer documents, and services
specific to businesses and industries, centered around the DigitalWork Accelerator Series.
We are also developing and providing total security solutions that combine our strengths,
including solutions to prevent the leakage of confidential documents and data, by linking physical security that uses imaging technology with cybersecurity.

We aim to continue to be chosen by our customers by offering after-sales support that ensures
our customers use our products and services safely and with peace of mind, and that exceeds
expectations.
Keeping a birdʼs-eye view of the value chain, we play a central role in quality managementof the products and services handled by the Canon MJ Group, while valuing a customer-driven
approach.
The Group will expand the area of solutions to social issues through its business by combining the Canon product business and the IT solutions business. We continue to address theissues faced by our customers and ”negatives” by refining the specialized skills of engineers
responsible for quality evaluation of the systems and solutions used by customers, call center
staff responsible for maintenance and operation support after installation and assembly, andengineers responsible for repairs and recovery.

Group Executive of
Business Innovation Section
Marketing Headquarters

Ryuji Nakata

The Canon product business is promoting the installation of NETEYE*1
that uses IoT technology. We remotely monitor the operating status ofcustomer equipment and achieve timely onsite inspections.
As a result, this contributes to the stable operation of equipment andthe planned actions of engineers, which improves productivity.
We have also established a system to define the skills required ofengineers and measure skill levels on an annual basis, thereby upgrading
human resources.

Continuing to achieve top market share through the provision ofadvanced Canon products and services*1

Canon Marketing Japan Inc. | Integrated Report 2023

Operating status
3F

Cloud

2F

1F

Achievements in office MFPs
1.4 times the number of units handled per person (vs. fiscal 2019)

Group Executive of
Business Products Marketing Section
Marketing Headquarters

Yasukazu Sawada

Customer Expectations and Requests Are an Essential Source of Growth for the Company
In the midst of rapidly changing environments surrounding our customers and the Company, we believe it is important to understand thevoices of customers and continuously improve and reform business processes.
To continue living up to customer expectations and requests, we actively collect customer feedback based on the six elements of customer
satisfaction*2 through various customer contact points and our own surveys. We continue the activity cycle, in which we analyze this feedback, which leads to improving value chain processes and changing employee behavior.
We aim to stay connected to our customers, and to be a company that continues to be chosen by new customers, as a result of improving
customer satisfaction*3.

Taking on the challenge of profitable growth and evolution
by supporting DX for customers through the provision of
cutting-edge security products and services

67

An online support service that monitors the conditions of equipment using the internet toensure comfortable operating environments

Online Support Service

Canon MJ

IT Products Marketing

The need for cutting-edge information and communication technology (ICT) solutions continues
to grow due to advances in cloud computing, qualitative changes in business through AI, andrising security risks. We provide solutions to such issues with the aim of supporting the digitaltransformation (DX) activities of our customers. In the security business, we are conducting
research and development in the field of cybersecurity with Group companies to provide solutions in accordance with the size of our customersʼ businesses in the hope that the Canon MJ
Group comes to be associated with security solutions.
By providing customers with Canon products in combination with various IT products, wehave developed a system that can help optimize a wide range of business environments andcontribute to customersʼ DX onsite.
We continue to take on the challenge of profitable growth and evolution toward the realization of “ITS3000,” while also expanding the areas in which we contribute to creating new value.

Hiroshi Kashihara
Pursuing a High Product Operating Rate to Achieve both High Quality and High Productivity

Business Products Marketing

The role of the Business Products Marketing Section is to resolve the document-related issuesof our customers and help them focus on their core operations by providing high-quality Canon
products and solutions that are easy to use as well as services that ensure these products andsolutions are utilized in a safe and secure manner.
To achieve this, we share the feedback we receive from customers regarding their expectations, requests, and other matters with Canon Inc. to develop and supply products and solutions of superior value. Furthermore, in response to the environmental demands of society, we
continue to improve resource circulation flows, such as collecting, reusing, and recycling usedproducts, to contribute to a sustainable resource circulation society. These are also our key
roles. We continue to work on improving quality and minimizing costs throughout the entire
value chain process, from product manufacturing to product delivery and after-sales support, inorder to be the company of choice for many customers.

Vice PresidentGroup Executive ofService & Support Section
Marketing Headquarters*2*3

Customer expectations, perceived quality, perceived value, customer satisfaction, willingness to recommend, and loyalty
Highest-ranked in the 2023 Japan Color MFP Customer Satisfaction Study, Small Office Market Division (Maintenance Service Factor), conducted by J.D. Power Japan

Executive Oﬃcer
Group Executive of
IT Products Marketing Section
Marketing Headquarters

Shinya Kondo

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68

The Canon MJ Groupʼs Management Strategy

The Canon MJ Groupʼs Management Strategy

Group IT Strategy

Intellectual Property Strategy

Leading the digital transformation of the business divisions
and headquarters to achieve the Canon MJ Group 2025 Vision
We aim to be a group of IT/digital professionals

Enhancing intellectual property by accumulating knowledge ofcutting-edge technologies to support the achievement of
the Medium-Term Management Plan (2022-2025) and promote
the creation of new businesses

Senior Vice President, In charge of Group IT, Business Process Innovation Project

Senior General Manager of Legal andIntellectual Property Headquarters

Senior General Manager of IT Headquarters

Yukihiro Sasabe

Hirokazu Uchio

We are using our “information, communications and security technology” and “operations and business” expertise to provide systems and services and encourage the digitaltransformation of existing businesses and the creation of new businesses.

To meet the expectations of a variety of customers who count on us to provide safe,
secure, and high-quality products and services, we are firmly protecting technologies
within the Canon MJ Group through rights and strengthening our intellectual property
governance. We also provide a one-stop service in order to integrate intellectual property activities across the Group.

Group IT Strategy that Supports Transformation to a Service-Type Business Model
We are integrally promoting digital transformation with ourbusiness divisions and headquarters. As frameworks for facilitating transformation, which serve as the platform, we areworking on three priority measures: restructuring our management foundation, strengthening IT security, and developing
human resources who foster transformation.
Of these measures, we are making particularly strong headway with “restructuring our management foundation.” As the2025 Vision

Group proceeds with its transformation into a service-typebusiness model, we are sequentially reforming our businessprocesses and mission-critical system in order to adapt flexibly to changes in the business structure and to increase
productivity taking into account the declining number of
employees.

Professional corporate group that solves social and customer issues using ICT and the power of humans

Promotion of digital strategies
Problem-solving through data-driven management and the creation of new businesses
Developing an environment fordata-driven management

Frameworks
for facilitatingtransformation

Accompanying the business divisions
to improve or expand their businesses

Creating digital businesses in collaboration
with the business divisions

Strengthening IT security

Developing human resources
who foster transformation

Restructuring our managementfoundation

Develop a system that adapts flexibly
to changes in business and operations

Strengthen the security environment
and technologies that facilitatetransformation

Define and develop IT personnel
who promote transformation

Promotion of digital strategies
To achieve a 25% increase in per-employee productivity* by 2025, in 2023 we focused on data utilization efforts and worked on
the staged development of our data infrastructure through data analysis with our business divisions. In 2024, we intend to reorganize our master data to promote data utilization and data-driven decision making throughout the Company. At the same time,
we plan to restructure our sales and marketing processes.
* Gross profit (value added) per employee compared with 2021 standards

Frameworks for facilitating transformation
Strengthening IT security

Developing human resources who foster transformation

Following the introduction of EDR*1 in 2023, in 2024 we will
strengthen device security by introducing biometric authentication and security chips. In addition, in 2025 we plan to
introduce CASB*2 and promote a shift from traditional perimeter defense security to zero-trust security.

By 2023, 13,951 employees from across the Group have completed an e-learning course to acquire basic knowledge ofdata-driven concepts and data utilization, as part of our effort
to develop human resources in IT solutions. In 2024, we will
add UI/UX and citizen development to the data literacy anddigital marketing selective training programs (workshops thatcover business issues) we conducted in 2023, and we will work
to further enhance the digital literacy of our employees andstrengthen their professional skills. We will also promote skill
certification together with the Human Resources Department.

EDR (Endpoint Detection and Response):
Detects and responds to suspicious behavior on
terminals and other endpoints*2
CASB (Cloud Access Security Broker):
Visualizes and controls the use of cloud services*1

Restructuring our management foundation
By 2023, we have completed the overall formulation of our infrastructure restructuring, including the formulation of abusiness process innovation policy. From 2024, we will sequentially begin innovation to implement new systems basedon this policy, aiming for completion by 2029.

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Canon Marketing Japan Inc. | Integrated Report 2023

Visualization of Added Value and Protection of Intellectual Property through Patents
We appropriately protect the outcome of solution development and research and development to continue to meet
our customersʼ expectations. We visualize the added value
we can provide to customers by acquiring patents, and we
also conduct third-party rights searches (clearance) from thedesign and development stages.

We are also involved in the development of activities tosupport the creation of new businesses at our newly established R&B Promotion Center, and we will work to contributeto further increases in corporate value in the future.

Intellectual Property Strategy to Support the Growth of the IT Solutions Business andthe Creation of New Businesses
Patent portfolio to refine our IT solutions businessby leveraging our unique technological capabilities

Differentiation strategy based on a mix ofintellectual property

In addition to people, goods, capital, and information, theCanon MJ Group values intellectual property as a management resource. In particular, we are actively applying for patents in order to refine our IT solutions business by leveraging
our unique technological capabilities. Over 40% of our current
patent portfolio are patents in the area of security and thefour areas of edge solutions: digital document services, imaging solutions, low-code development, and mathematical anddemand forecasting.
The Canon MJ Group employs many engineers who arefamiliar with AI-related technologies, which are expected tocontinue to grow in the future. AI-related patents accounted
for more than 40% of all new patent applications in 2023, andthe unique technical capabilities in AI are being used to support the IT solutions business.

We recognize that names, designs, and brands are also important
intellectual properties. Our business, intellectual property, andbrand divisions work together to come up with the most appropriate names that are the face of our products and services, andapply for trademark rights.
In this way, the Canon MJ Group is implementing a differentiation strategy based on a mix of intellectual property that
includes technology, names, and even brands.

Patent Portfolio

Cutting-edge technology as an intellectual asset
for the future
The R&B Promotion Centerʼs activities involve working withstartups in a range of new fields. The Intellectual Property
Division has started researching the technologies andcompetitiveness of startups and reporting on their future
prospects. Through these activities, we will learn about
cutting-edge technologies and internally accumulate theacquired knowledge as intellectual assets, which we will use
to create new businesses.

Percentage of AI-related New Patent Applications in 2023

12%
11%
58%

9%
8%
2%

Security
Imaging solutions
Digital document services
Low-code development
Mathematical anddemand forecasting
Others40%

55%

AI (not including
generative AI)
Generative AI
Others5%

Canon Marketing Japan Inc. | Integrated Report 2023

70

The Canon MJ Groupʼs Management Strategy

Overall Strategy

Functional Strategy

Business Strategy

Sustainability Management
Overview of Canon MJ Group Sustainability Activities

Based on our newly established Purpose, we promote sustainability management by taking on the challenge of creating
new value with a focus on future issues

Vice-Chair of Sustainability Promotion Committee

Hatsumi Hirukawa

Promoting Sustainability Management by Expanding the Range and Scope of the Social Issues We Can Solve
Based on Kyosei, the Canon Groupʼs corporate philosophy,
the Canon MJ Group has been working to solve social issues
through its business activities in harmony with people, society, and nature since 1988.
With social issues becoming increasingly complicatedand serious, in January 2024, we declared ourselves a MIRAI
Marketing Company with a view toward continuing to solve
an extensive range of future social issues with the powerof marketing together with various stakeholders to realize
a sustainable society. This expression has been adopted asa symbol of the Group. In addition, we also established theCanon MJ Groupʼs Purpose, Bringing together hopes andideas with technologies to create a future beyond imagining,in January 2024. In an era marked by accelerating change
and growing uncertainty, the Group will look to the future
constantly as a MIRAI Marketing Company and clarify the significance of our presence in society to increase collaborative
creation and cooperation with stakeholders, as well as unite
the aspirations of Group employees and speed up solutions
to social issues. Under our newly established Purpose, wewill promote sustainability management from a long-term
perspective by looking to future issues and boldly taking on
the challenge of creating new value that is free from conventional frameworks.

Sustainability Promotion Committee Put Under Direct Supervision of the Board of Directors in April 2023
The Canon MJ Group established the Sustainability
Promotion Committee in February 2021 as a place for theconsideration of measures to enhance corporate value
by placing sustainability management at the core ofmanagement plans. Matters to be discussed and resolvedby the Sustainability Promotion Committee are important
topics that relate to the core aspects of management andare cross-organizational themes that span multiple othercommittees and divisions. Therefore, we determined that asystem in which the committee operates under the directsupervision of the Board of Directors was necessary, andin April 2023, the committee, which had operated under
the Management Committee, changed to be under the
direct supervision of the Board of Directors. Importantsustainability matters are deliberated by the Sustainability
Promotion Committee and reported to the Board of

Directors to receive opinions and advice, which is thenreflected in subsequent initiatives.
In 2023, the Sustainability Promotion Committee
convened four times. In addition to establishing the Purpose
and implementing measures to instill it throughout theGroup, the committee reviewed, made decisions on, andconfirmed progress with KPIs for material issues, and also
redesigned our social contribution activities.
Structure of the Sustainability Promotion Committee

Board of Directors
Sustainability Promotion Committee

Secretariat:
Sustainability Promotion Division

Committee chair: President
Committee vice-chair : Executive officer in charge of group corporate planning
Committee members : Directors, directors of business units,
and heads of related divisions

Major Initiatives of the Sustainability Promotion Committee

71

2021

2022

2023

2024 (Planned)• Established the Sustainability
Promotion Committee• Determined the sustainability
management framework• Formulated the Environmental
Vision 2050, 2030 Medium-Term
Environmental Targets, andEnvironmental Policy• TCFD endorsement• Full-scale discussions on our Purpose• Finalized our material issues• Explored, determined, and confirmed
progress with KPIs for materiality issues• Moved under direct supervisionof the Board of Directors• Established our Purpose• Explored, determined, andconfirmed progress with KPIs formateriality issues• Roll out measures to instill the
Purpose• Explore, determine, and confirm
progress with KPIs for materiality issues

Conducted e-learning program to instillknowledge on our human rights policy
Established system aimed at realizing
carbon neutrality• Considered and made decisions tojoin various ESG initiatives• Began joint meetings with theBrand Strategy Committee

Canon Marketing Japan Inc. | Integrated Report 2023

Determined high-priority issues for human rights
Explored updates to our environmental targets• Redesigned our social
contribution activities

Formulate KPIs for human capital andexecute measures to achieve them
Increase engagement throughconducting supplier questionnaire• Start new social contribution
activities

At the Canon MJ Group, we definematerial issues as key issues that need
to be addressed immediately in orderto maintain sustainable growth, and are
implementing initiatives to meet the
expectations and needs of our stakeholders. We are also conducting social
contribution activities aimed at solvingsocial issues in areas where it is difficult for our businesses to reach. Bytaking measures to address material
issues and carrying out social contribution activities, we are working to put
our corporate philosophy and Purpose
into practice.

Canon Group Corporate Philosophy

KyoseiCanon MJ Group Purpose

Bringing together hopes and ideas with technologies
to create a future beyond imagining
Material Issues
Strengthening Our Management
Foundation
Meeting the needs of stakeholders

Coexist in harmony with the global
environment
Improve organizational capabilities toenable diverse human resources to thrive
Promote responsible supply chains
Promote risk and crisis management
Implement sound governance

Resolving Social Issues throughBusiness Activities
Meeting the expectations of stakeholders

Social Contribution Activities

Meeting the expectations of stakeholders

Major fields ofsocial contribution activities
Environmental protection
Regional and cultural revitalization
Personnel development
Safe and secure society
HealthProvide solutions that advancepeopleʼs daily lives, work, andsociety

The Sustainability Promotion Committee Monitors Progress with
Material Issues to Meet Stakeholder Expectations and Needs
The Canon MJ Groupʼs Material Issues

Coexist inharmony withthe global
environment

Provide solutions that
advance people’s
daily lives, work, andsociety

Improve organizational
capabilities to enable
diverse human resources
to thrive

Expectations

Promoteresponsible
supply chains

Promote risk
and crisis
management

Implement
soundgovernance

Needs

After sorting the needs of the Groupʼs various stakeholders,
we analyzed the risks and opportunities related to ourbusiness, and identified six material issues throughdiscussions by the Sustainability Promotion Committee.
Due to their cross-sectional and multifaceted nature,
our approach to material issues is spearheaded by the
Sustainability Promotion Committee, which collaborates withthe human resources, procurement, legal affairs, and otherrelevant internal departments as well as the Human Resources
Strategy Committee, Risk and Crisis Management Committee,
and the Quality Improvement Committee, which operate under
the Management Committee. In addition, the Sustainability
Promotion Committee monitors the progress of initiatives,
identifies the gaps between our targets and the progress
made so far, and updates these targets on a regular basis.
In fiscal 2023, our key initiatives for material issues wereas follows. With respect to the environment, we updated
our 2030 Medium-Term Environmental Targets aimed atrealizing carbon neutrality to bring them in line with SBTistandards, and achieved 100% renewable energy for theelectricity used at five of our business sites, including theGroup headquarters and Canon MJʼs office buildings. To

maintain a recycling rate of 99.9% or higher, one of the 2030
Medium-Term Environmental Targets, we also identified
potential risks, and determined and implemented measuresin response. In terms of respect for human rights, as partof our human rights due diligence process, we identified
high-priority issues and determined countermeasures foreach one. For risk and crisis management, we established
KPIs that are linked to the Companywide risk map andimplemented employee training and cyber-attack drills,
among other measures. Additionally, as part of initiatives
to promote sound governance, we appointed one female
outside director to ensure the diversity of the Board of
Directors, established a Special Committee in January2024, and appointed a majority of outside directors to theNomination and Remuneration Committee.
In fiscal 2024, in addition to implementing measuresin accordance with the KPIs we have set, we will work
to reduce Scope 3 emissions, strengthen engagementwith suppliers to address human rights issues, as well
as formulate KPIs and implement measures related tovisualizing the skills of highly skilled IT personnel under ourhuman capital strategy.

Material Issue Identification Process
2. Consider stakeholder needs in relation
to the Groupʼs material issues

1. Sort the needs of stakeholders
Stakeholder Perspective

Information Source

International community

United Nations

SDGs

Japanese government

SDGs Action Platform

Country

Ministry of the
Economy, Trade andIndustry

Practical Guidelines on
Corporate Governance
Systems

Investor

FTSE Russell

ESG rating criteria

Think tankMitsubishi ResearchInstitute, Inc.

Resolving Societal Issues
through Innovation

Inventory List ofSocietal Issues
Integrate,
Arrange,andClassify

The Canon MJ
Groupʼs Growth
Strategies andPolicies

3. Identify material issues
Material Issues

List of societal
expectations

Long-Term Management
Objectives(2021–2025)

Expectations(one criterion)

List of societal
needs

Medium-Term
Management Plan
(2022–2025)

Needs(ﬁve criteria)

4. Implement and monitor
Implementation of the plans discussed andapproved by the Sustainability Promotion
Committee, the progress of which isregularly checked by said committee

A
C

P

D

Canon Marketing Japan Inc. | Integrated Report 2023

72

The Canon MJ Groupʼs Management Strategy

Overall Strategy

Functional Strategy

Business Strategy

Sustainability Management

Initiatives for Material Issues (Management Foundation):
Meet the Needs of Stakeholders
Coexist in harmony
with the global
environment

Canon MJ Group 2030 Medium-Term
Environmental Targets

The Canon MJ Group is promoting activities in line with the Canon MJ Group, plastic ,and water
Environmental Vision 2050 and the Canon MJ Group 2030 Medium-Term Letʼs reduce
Environmental Targets, the interim targets of this vision, in an eﬀort tocontribute to the realization of a sustainable society that coexists in harmony with the global environment.
Realization of Carbon Neutrality
Fiscal 2023 Result

in-house CO2 emissions

8.4% decrease
from fiscal 2021

(compared with fiscal 2021)

We have received third-party assurance from LRQA Limited
for our 2023 GHG emissions data (Scope 1, 2, and 3).

Updating the 2030 Medium-Term Environmental
Targets toward carbon neutrality
In 2024, we updated the 2030 Medium-Term Environmental
Targets, the interim targets of the Canon MJ Group
Environmental Vision 2050, under which we aim to achievecarbon neutrality. We have brought these targets in linewith the SBTi*1 standards as follows. (Canon Group received
SBTi certification)*1

Contributing to Customersʼ CO2 Reduction throughOur Business
Canon IT Solutionsʼ Nishi-Tokyo Data Center Building No. 2
Certified as an Outstanding Specified Anti-Global Warming Facility
In March 2023, Nishi-Tokyo Data Center Building No. 2,
owned and operated by Canon IT Solutions Inc., wasrecognized by the Tokyo Metropolitan Governmentʼs Bureau
of Environment as an Outstanding Specified Anti-Global
Warming Facility (near-top-level business facility). As aresult, along with the No. 1 building, which received thesame designation in 2020, the both buildings of the NishiTokyo Data Center have been recognized as business sitesthat have an outstanding system in place for promoting
measures against global warming. On the strength of
its high-performance facilities and excellent operational
quality, which have been refined through the operation of
the No. 1 building, the Nishi-Tokyo Data Center has madecontributions to reductions in our customersʼ CO2 emissions.

• Reduce Scope 1 and 2 emissions by 42% from 2022
levels by 2030

Qualysite Technologies Started Operations Using 100%
Renewable Energy• Reduce Scope 3 (Category 1, 11) emissions by 25%
from 2022 levels by 2030

In June 2023, Qualysite Technologies Inc., which operates
the Nago Data Center, introduced a third-party photovoltaic
ownership model (on-site PPA) KarE-roof *2 provided by
Okinawa New Energy Development Company, Incorporated,a member of the Okinawa Electric Power Company Group,and started using electricity with an installed photovoltaic
power generation capacity of 80 kW. By using non-fossil
certificates with tracking to cover the shortfall in renewableenergy, it was able to operate using 100% renewable energy.

SBTi (Science Based Targets initiative): An international initiative that recommends the setting of GHG emission reduction targets based on scientificevidence*2

KarE-roof is a service in which photovoltaic power generation facilities andstorage batteries are installed with no initial investment, and the generated
electricity is sold to the installer. Okinawa New Energy Development provides one-stop support from exploring options, installation, maintenance, andremoval.

Contribution to the Realization of a Resource-Recycling Society
Fiscal 2030 Target

Recycling rate of

Fiscal 2023 Result

99.9% or higher 99.9％ or higher

At the Canon MJ Group, we aim to maintain a recycling
rate*3 of 99.9% or higher for end-of-use products collected

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Canon Marketing Japan Inc. | Integrated Report 2023

Maintaining and Expanding the Sale of Plastics as
Valuables at Logistics Centers

Canon MJʼs logistics centers across Japan use stretch film toprevent loads from collapsing during transit and use styrofoam as packaging materials.
Instead of throwing thesematerials away as plastic
waste, some logistics centers make effective use ofthem, selling them as plastic
resources.
Compressed stretch films

Fiscal 2030 Target

38% reduction in

Initiatives to Promote Plastic Waste Reduction
and Recyclingfrom customers, such as printers and MFPs. To date, wehave maintained our recycling rate at over 99.9% for sevenconsecutive years. We will continue to do so by identifying
the potential risks, taking measures in response, andmonitoring progress.
*3

Recycling rate (rate at which end-of-use products are converted into new
resources) = Amount of products disposed of through methods other thanlandfill disposal ÷ Total amount of products disposed of

Recycling Used Clear Folders

Canon MJ ʼ s head office building takes part in the
ASKUL Resource-Recycling Platform operated by ASKULCORPORATION, and collects and recycles used clear folders.
In 2023, we recycled 369 kg worth of clear folders.
Making Effective Use of Returned Products, Etc.

We are working to reduce plastic waste by making effective
use of returned products, etc. In 2023, we made effective
use of returned products by reusing used demo equipment
internally and donating products that were returned due todefective outer packaging. We also pursued an initiative thatinvolved removing parts
from returned inkjet printers
and using them in repairs as
parts that meet our quality
requirements.

Recycled printer part reused for
repairs (paper feed cassette)

Water Risks Initiatives
To reduce water resource consumption, Canon MJʼs head
office building, in cooperation with the Shinagawa Grand
Commons Community Development Council, participatesin the Reclaimed Water Utilization Project promoted by
the Tokyo Metropolitan Governmentʼs Bureau of Sewerage
and uses the recycled water supplied by the bureau in
toilets and other facilities. In 2022, we also reduced water
consumption by installing toilet faucets that make minimaluse of water at our head office building.
In another effort to monitor the Canon MJ Groupʼs water
risk, a water risk assessment was carried out in 2022 atits business sites in Japan using the Aqueduct Water Risk
Atlas,*4 which confirmed that its overall water risk falls underthe “low” or “low–medium” levels.
*4

Aqueduct: A global water risk assessment tool developed by the World
Resources Institute (WRI)

Contribution to Biodiversity Conservation and Pollution Prevention
Furusato (Hometown) Project Activities

Initiatives to Prevent Pollution

Guided by its Groupwide Biodiversity Policy, the Canon
Group is carrying out its Furusato (Hometown) Project withthe aim of preserving beautiful and verdant local communities for future generations. In this project, we promoteparticipation in the activities of collaborating organizations
and work to conserve and raise awareness of biodiversity
based on the My Action Declaration,*5 a set of five actions
to protect biodiversity.

For the Canon MJ Groupʼs products manufactured undercontract, we are working to eliminate hazardous chemical substances based on the Canon Green Procurement
Standards.
We confirm that our business partners have establishedproduct chemical management systems in accordance withthe above Standards. We also conduct surveys of raw materials, parts, and secondary materials of products manufactured under contract to check for environmentally hazardous
substances.

*5

An initiative that enables each of us to feel a sense of connection with biodiversity in our daily lives and take action in our immediate surroundings with thegoal of protecting biodiversity

Chemical Substance Management

Furusato(Hometown)
Project

At the Canon MJ Group, we identify and manage all
chemical substances *6 used for after-sales support for
products and similar purposes. In accordance with theChemical Management Procedure that we establishedinternally, we manage chemical substances appropriately,such as by checking the usage and stored amount of
substances deemed to be harmful or hazardous. In addition,
when we use a new chemical substance, we assess its
environmental impact in advance, thereby judging whether
we can use it or not and confirming the appropriate ways ofusing and storing it, among other points.
*6

These substances include office automation cleaners and industrial lubricants
used for maintenance.

Canon Marketing Japan Inc. | Integrated Report 2023

74

The Canon MJ Groupʼs Management Strategy

Overall Strategy

Functional Strategy

Business Strategy

Supervisory System of the Board of Directors

Sustainability Promotion Committee

The Canon MJ Group has a system in place under which
the Board of Directors supervises matters to be discussed
and resolved by the Sustainability Promotion Committee, as
they are important matters that relate to the core aspectsof management and pertain to the entire organization. The
Board of Directors receives reports on the risks and opportunities associated with climate change from the Sustainability
Promotion Committee at least once a year and monitors the
progress of measures related to such risks and opportunities.

Matters concerning climate change are discussed by the
Sustainability Promotion Committee. The president & representative director, who is the chairperson of the committee,
assumes overall responsibility for all sustainability-related
matters, including climate change. The committee assesses
the impact of climate change on our business once a year or
more and holds discussions concerning our approach to minimizing the identified risks and seizing opportunities.

Risk Management
Risk Management Process

Identify climate change
scenarios andbusinesses impacted
by climate change

Identify importantrisks and opportunities
and arrange concrete
examplesPrepare multiple
scenarios and arrange
assessments on risks
and opportunities

The Sustainability Promotion Division, which oversees matters related to climate change, takes the lead in identifying
the risks and opportunities of climate change and assesses
the situation in cooperation with the relevant internal divisions and Group companies. The Sustainability Promotion
Division also examines responses and countermeasures foreach risk and opportunity, which are reported and proposed

Integration into Companywide
risk management

Assess the impactof each scenario on
our businessfor deliberation to the Sustainability Promotion Committee.
The division also reports and deliberates on certain climatechange-related impacts and matters to risk management
divisions throughout the Company, thereby assuming therole of integrating the impacts of climate change into ourCompanywide risk management.

Strategy
At the Canon MJ Group, we conduct scenario analyses to
identify the various risks and opportunities posed by climatechange to our business. Using the Intergovernmental Panelon Climate Changeʼs Representative Concentration Pathway
C (RCP 1.9) and 4°
C (RCP 8.5) as(RCP) scenarios of 1.5 °well as the International Energy Agency ʼ s Sustainable
Development Scenario (IEA-SDS), the scenario analyses were

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Canon Marketing Japan Inc. | Integrated Report 2023

Time ofOccurrence

Cost ofrenewable energy
facilities

The achievement of CO2 emissions reduction targets and theintroduction of new technologies to accommodate the shift toclean energy would entail the establishment and redevelopment of
renewable energy facilities, leading to higher facility costs.

✓

Low

Short
to longterm

Changesin printing
environment

Changes in the printing environment, such as the increased costof procuring paper due to forest conservation eﬀorts, reductions inpaper use stemming from an increase in customersʼ environmental
awareness, and advances in digitalization, are reducing the printing
needs of customers in certain business ﬁelds.

Reputational
damageThe Companyʼs inability to facilitate the shift to a low-carbon
society may deteriorate its reputation among customers, investors,
and society as a whole.

Damage toproduct storage
facilities

1.5°
C

4°
C

High

Short
to longterm• Provide solutions that are tailored to the needs ofcustomersʼ changing printing environments (provide
digital solutions in increasingly digitalized ﬁelds andmore-eﬃcient printing solutions in areas with highprinting demand)• Expand support for environmentally-friendly paper
such as banana paper

✓

Low

Short
to long
term

Disclose our approach and the status of our measures
to address climate change

Damage to product storage facilities as a result of ﬂooding andother water-related disasters caused by the increasing intensityand frequency of heavy rainfall may impede the Company ʼ sbusiness activities.

✓

Low

Short
to long
term

Propose measures to be implemented at warehousing
companies and carry out some of the measures

Inability tocommute to work

Employeesʼ inability to commute to work due to transportation orother issues caused by the increasing intensity and frequency of
weather-related disasters may impede the Companyʼs businessactivities.

✓

Low

Mediumto long
term

Maintain and promote a system and framework thatallow businesses to continue to operate as usual evenwhen employees do not come to the oﬃce due totelework or other reasons

Increasein averagetemperatures

The rise in average temperatures may lead to higher air conditioning
costs for data center server rooms and business sites.

Low

Short
to longterm• Consider the establishment of energy-saving
facilities• Improve eﬃciency of heat-source equipment

Rise in sea levels

The number of areas susceptible to changing sea levels may
increase and certain facilities located in low-altitude coastal areas
may incur damage or even become submerged.

Low

Mediumto longtermCollect information on and analyze and address therisk of damages

✓

✓

✓

Impact on Business
Opportunities

Details/Speciﬁc Examples

Measures

Reduction ofenergy costs

Lower energy costs resulting from the increasing adoption ofrenewable energy will lead to a more stable supply of energy.

✓

Low

Mediumterm

Collect information on and consider the adoptionof renewable energy

Increases inorganizational
value throughimproved ability
to address
climate change

A systematic approach to climate change that includes
climate risk assessment and risk diversification measures
will help stabilize business operations and facilitate thedevelopment of solid management and business foundations,spurring improvements in external assessments and stock
prices.

✓

Low

Short
to long
term

Disclose our approach and the status of ourmeasures to address climate change

Increased
opportunities
for systems
integration
servicebusinesses• Increasing need for demand forecasting and supply-demandplanning solutions that help reduce CO 2 emissions by
optimizing and streamlining logistics operations• Declining use of paper in manufacturing processes
and growing need for DX that contributes to greater
productivity along the engineering chain• Rising demand for digitalization and document
management services due to greater emphasis on energy
and forest conservation

High

Short
to longterm

Strengthen solutions businesses that help
customers reduce CO 2 emissions and makeeﬀective use of paper resources

Increased
opportunities
for printer and
MFP businesses

Increased demand for environment-friendly products certiﬁed
with environmental labels, such as printers and MFPs

Short
Moderate to longterm

• Strengthen sales of energy-efficient, userfriendly products• Promote the replacement of VOC-emitting
oﬀset printing presses with on-demand printers

Short
to longterm

Strengthen data center businesses that help
customers reduce CO 2 emissions and ensurebusiness continuity

1.5°
C

4°
C

carried out by selecting risks and opportunities that wereshared throughout the Group as well as the Groupʼs key
businesses that have a significant impact on climate change.
The time of occurrence of risks or opportunities related toclimate change impacts is determined based on short- or
medium- to long-term time frames.

Financial
ImpactShort
to longterm

Formulate
responses to risks
and opportunities
Opportunities

Sustainability Promotion Division

Cooperation between business divisionsand Group companies

Low

Technology Government policies/legal frameworks

Transition risks• Identifies and assesses climate change impacts• Monitors climate change impacts, confirms the progress of measures,and reports to the Sustainability Promotion Committee• Reports and makes recommendations on the identified climate change
impacts to risk management divisions throughout the Company✓

Time ofOccurrence• Holds jurisdiction over climatechange-related matters• Serves as the secretariat of the
Sustainability Promotion Committee

The achievement of CO2 emissions reduction targets would require
the installation of energy-saving equipment, leading to higher
equipment costs.

• Collect information on and analyze and address
recent trends in environmental regulations• Promote measures to achieve the 2030 Medium-Term
Environmental Targets (including the considerationof establishing renewable energy facilities and CO2
emissions reduction initiatives)• Collect information on and consider the adoption ofrenewable energy based on the global situation

Financial
ImpactSustainability
Promotion
Division• Convenes at least four times a year with the president & representative
director as the committeeʼs chair• Confirms the progress of climate change initiatives• Reports important climate change-related matters to the Board of
Directors

Cost of energysaving equipment

Scenario

Sustainability
Promotion Division• Promotes environmental measures,
including climate change response

Physical risks

Deliberate

Sustainability
Promotion
Committee• Approves important sustainability management-related matters(including climate change)• Confirms the progress of measures related to risks and opportunities ofclimate change

MediumModerate to longterm

Chronic

Sustainability
Promotion Committee• Oversees sustainability management
initiatives (including climate change)✓

Classification

Oversee

Details

The implementation of carbon taxes would lead to higher electricity
prices and operating costs, as it would entail the payment of taxes
for the amount of CO2 emitted by the Company and raise the costof generating electricity for the power company.

EnergyDeliberate

Board ofDirectors

Climate Change-Related Functions

Impact ofcarbon tax
implementationon the Company
and suppliersCountermeasures

Resilience

Committee

Board of Directors

Details/Speciﬁc Examples

MarketClimate Change Response Promotion Structure

Systems
Business Data
Printers
Integration
Sites
Centers
and MFPs
Services

Risk

Acute

GovernanceImpact on Business

Reputation

Classification

Initiatives for TCFD Recommendations

Products and services

Coexist in harmony
with the global
environment

Scenario

Sustainability Management

Increased
opportunities
for data center
businesses

Systems Printers
Business Data
Integration andSites Centers
Services
MFPs

✓

✓

• Growing demand for zero-carbon data centers that
contribute to reductions in customersʼ Scope 3 emissions✓• Greater demand for robust data centers that can withstandnatural disasters for the purpose of establishing a business
continuity plan (BCP) as a result of the increasing frequency
of weather-related disasters

High

Short term: to 2025 Medium term: 2026 to 2030 Long term: 2031 to 2050

Metrics and Targets
Aiming to realize carbon neutrality, we are working toachieve our goal of reducing in-house CO2 emissions by 38%(compared with 2021) in the Canon MJ 2030 Medium-Term

Environmental Targets. As of the end of 2023, we achieved
an 8.4% reduction*7 in CO2 emissions compared with 2021.
*7

Please refer to page 73 for our measures aimed at the realization of carbon
neutrality.
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76

The Canon MJ Groupʼs Management Strategy

Overall Strategy

Functional Strategy

Business Strategy

Sustainability Management

Improve organizational
capabilities to enable diverse
human resources to thrive

Improve organizational
capabilities to enable diverse
human resources to thrive

Diversity

Approach to Diversity

Respect for Human Rights

Basic StanceBased on Kyosei, the Canon Groupʼs corporate philosophy, theCanon MJ Group aims to realize a society in which all people,
regardless of culture, customs, language, or ethnicity, canlive and work together in happiness. Through our corporate

activities rooted in Kyosei, we will continue to embrace diversity as we aim to become a company where diverse humanresources with different personalities and values can flourish
and continue to grow by motivating each other.

Empowerment of Women
Eight Canon MJ Group companies have established an
action plan based on their respective issues, which include
the appointment and hiring of female managers.
Canon MJ has acquired two-star Eruboshi (L Star) certification in February 2022. In 2023, we launched the
Empowerment Program, a training program for female chiefs(assistant managers), offering various career development
programs to applicants to support the development of their
future careers. Our action plan sets out our aim to have
women account for at least 6.0% of management positions
and at least 20.0% of chiefs and assistant managers, who

Balancing Work with Childcare and Nursing Care
Aiming to create an environment where employees can work
vibrantly while balancing work with childcare and nursing
care responsibilities, we have a variety of systems in placethat facilitate their career development and allow themto continue to work while focusing
on their personal lives. Both Canon
MJ and Canon IT Solutions haveacquired Platinum Kurumin certification for their excellence in providing
childcare support.

are candidates for management positions, by 2025.
The chart below shows the wage
difference between Canon MJʼs male and female employees.
Wages of Canon MJʼs Female Employees as a Percentage ofMale Employees
All employees

80.8%

Permanent employees

76.5%Part time and contract employees

122.9%

Employing People with Disabilities
Canon MJ strives to create a comfortable workplace environment where all employees, regardless of disability, canmake the most of their abilities and experience and toprovide more employment opportunities for people withdisabilities.

Employees with Disabilities(Non-Consolidated)

Employment rate (%)

148.5

2.20

142.0

2.15

147.5

2.32

policy, which clearly states that we conduct human rights
due diligence, operate a grievance mechanism, conduct
awareness training, and engage in dialogue with stakeholders in order to ensure respect for internationally recognizedhuman rights, including the prohibition of child and forcedlabor, the prevention of unreasonable restrictions on movement and excessive overtime work, and respect for freedomof association and the right to collective bargaining.

Promotion Structure
The Canon MJ Group established the Sustainability
Promotion Committee, chaired by the president & representative director, which discusses, makes decisions regarding,and reviews respect for human rights, one of the material
issues we identified. The committee deliberates and reports
on important matters to the Board of Directors. In addition,

the Sustainability Promotion Division, as the supervising
division, coordinates with relevant departments such as
the Human Resources Department and the Procurement
Department to gain insight into the current situation, andconsiders and executes initiatives to address any issues.

Human Rights Due Diligence

Period covered: January 1, 2023 to December 31, 2023

Number of employees(Number of people)

Based on the United Nations Guiding Principles on Businessand Human Rights, the Canon MJ Group is developing initiatives to promote respect for the human rights of its customers, employees, business partners, and all other stakeholders
involved in the Groupʼs business activities. We promoterespect for human rights by taking measures in accordancewith the Canon Group Human Rights Policy, which was formulated in 2021. We are carrying out activities based on this

139.0

2.29

138.0

2.36

In 2023, the Canon MJ Group identified any adverse impacts
on human rights arising from its business activities in accordance with the United Nations Guiding Principles on Businessand Human Rights, guidelines issued by the Japanese
Government, and other guidance. The Canon MJ Groupʼs
Sustainability Promotion Committee then held discussions

to pinpoint issues to tackle as a priority. Based on this, theSustainability Promotion Committee examined and decided
on countermeasures to be implemented in 2024 for different
rights holders. To reduce human rights risks even further, we
will continue to carry out initiatives based on our plan andconduct activities that lead to improvements.

Rights Holder
High-priority issues

Suppliers Contractors Employees

Discrimination basedon race, gender,
religion, and otherfactors
Harassment
Child labor●

Forced labor●

Customers/
Consumers

Countermeasures in 2024●

Create rules and guidelines on the communication of information such as advertising, PR/websites, and social
media, and ensure compliance●

Ensure all officers and employees are familiar with the Canon Group Code of Conduct●

Raise awareness through training and meetings to prevent harassment
Increase engagement through supplier questionnaire

●

2019

2020

2021

2022

2023

Excessive overtime
work

Have no overtime days (two days a week)/Provide management training to raise awareness about thoroughlymanaging working hours in their departments/Alert employees who might exceed the limit on overtime●●

Improve organizational
capabilities to enable diverse
human resources to thrive

Health and Productivity Management

The Canon MJ Group promotes initiatives to support thehealth of employees and realize health and productivity management based on the principle of “Health First” set forthin the Code of Conduct. Based on our Three-Year HealthManagement Plan, a medium-term plan first rolled out in
2010, and Health and Productivity Management Strategy
Map, formulated in 2022, we engage in health managementwith a focus on cancer, lifestyle disease, and mental health.
As a result of these efforts, 10 Canon MJ Group companies,
including Canon MJ, were selected under the 2024 Certified

Manage and raise awareness of logistics quality continuously, increase efficiency through improvement inbusiness operations, and mitigate work risks●●

Increase engagement through supplier questionnaire
Formulate Health and Productivity Management Strategy Map and seek to further promote health andproductivity management and to prevent occupational accidents●

KENKO Investment for Health Outstanding Organizations
Recognition Program, jointly sponsored by the Ministry of
Economy, Trade and Industry and Nippon Kenko Kaigi.

Occupational healthand safety/
Health hazards andaccidents●

Confirm equipment inventory and compliance with environmental laws, regulations and conventions and checkfor any upgrades of inventory equipment●

Review content of Guidelines for Appropriate Contracting and Induction Training for Staffing Agency Engineers,
raise awareness and hold study sessions about them●

Implement training and awareness-raising activities to prevent the recurrence or occurrence of occupational
accidents at construction subcontractors●●

Manage and identify quality problems and their levels in the market, and implement activities to prevent
recurrence or occurrence●

Confirm worldwide tendency towards tightening personal information protection rules and comply with rules on
the handling of cookie data●

Create rules and guidelines on the communication of information such as advertising, PR/websites, and social
media, and ensure compliance

Invasion of privacy* Please refer to pages 29-38 for initiatives related to human capital.

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Canon Marketing Japan Inc. | Integrated Report 2023

78

The Canon MJ Groupʼs Management Strategy

Overall Strategy

Functional Strategy

Business Strategy

Sustainability Management

Promote responsible
supply chains

Procurement Activities

By disclosing our Basic Procurement Policy on our corporate website, we are committed to developing solid relationships with
suppliers and ensuring awareness of our fundamental approach to procurement activities. We also ensure that products and services are consistently procured at appropriate prices while complying with procurement-related laws and regulations and paying
due consideration to protecting the environment.
Through procurement-related initiatives, we will do what we uniquely can do to help solve social issues and build a sustainable
society, together with each one of our suppliers.

Procurement Basic Policy of the Canon MJ Group
1. We pursue safety and quality and strive to ensure the stable procurement of products and services at appropriate prices
in response to customer needs, for the purpose of driving business activities in a smooth, competitive manner.
2. We practice green procurement, or preferential procurement of environmentally friendly products and services, for the
purpose of protecting the global environment.
3. We strive to provide equal opportunities for transactions and procurement based on fair evaluations, in accordance withlaws and social norms.
4. We undertake procurement activities aimed at building trade relationships with suppliers that are to the long-term
benefit of both parties, with the aim of building a sustainable society.

Promote risk andcrisis management

Risk and Crisis Management

The Canon MJ Groupʼs risk management is discussed by the officer who oversees and promotes risk management, the Risk andCrisis Management Committee, and, depending on the nature of the risk, the Internal Controls Evaluation Committee or the
Quality Improvement Committee, among others. This leads to the implementation of various measures to address risks.

Areas of activity of the Risk and Crisis
Management Committee

Board of Directors

1. Preparation and set up of risk management systems
2. Preparation and set up of crisis management
systems (including BCP)
3. Raising and promoting awareness of corporate
ethics and compliance
4. Information security
5. Internal reporting response

At the Canon MJ Group, the Canon MJ Group Procurement
Regulations internally stipulate equal and fair trade, environmental considerations, and compliance with procurement-related laws and regulations. We regularly provide training
related to this to ensure appropriate, fair business dealings.

With new suppliers, we assess the potential risks prior to
engaging in business transactions and conclude basic agreements at the start of each transaction. In this way, we makesure they are committed to complying strictly with laws andordinances and to engaging in fair and honest transactions
that do not violate corporate ethics or erode social trust.

Promoting Green Procurement
For the Canon MJ Groupʼs products manufactured undercontract, we are working to eliminate hazardous chemical substances based on the Canon Green Procurement
Standards.
We confirm that our business partners have establishedproduct chemical management systems in accordance withthe above Standards. We also conduct surveys of raw materials, parts, and secondary materials of products manufactured under contract to check for environmentally hazardous
substances.

Responsible Mineral Procurement
The Canon MJ Group tackles the challenge of sourcing minerals responsibly in conflict-affected areas in accordancewith the Canon Group Basic Policy on Responsible Minerals
Sourcing. We ensure peace of mind for Canon productcustomers by requesting suppliers to confirm the origins ofminerals in their products and help us eliminate the use of
conflict minerals.

Management Committee

Risk and Crisis Management Committee
Chairperson: Director in charge of Group General Administration& Human Resources Management
Committee vice-chair : Senior Vice President in charge of Group IT
Members: Vice Presidents and above,
Group Executive of Corporate Planning Headquarters,
Group Executive of Brand Communication Headquarters,
and Group Executive of Legal and Intellectual Property
Headquarters

Status and Plan of Key Initiatives for Risk and Crisis Management
2023

2024
Metrics (KPIs)

Evaluation

Metrics(KPIs)

Ensure rigorous risk and crisis management

Hold Risk and Crisis Management Committee meetings at least four times a year,
in principle○

Ongoing

Train employees on risk and crisis management

Provide training on compliance, the BCP, and information security, and quality to
all employees at least once a year○

Ongoing

Address information security risks

Conduct cybersecurity training at least once a year○

Ongoing

Key Initiatives

Ensuring Compliance in Procurement

President & representative director

Raising and Promoting Awareness of Corporate Ethics and Compliance
At the Canon MJ Group, we view compliance not only as theobservance of laws and regulations, but also as upholding
laws and social rules, maintaining social justice, and continuing to meet the expectations of society based on thespirit of integrity (being sincere, honest, and earnest). To

ensure that each individual always acts in good faith withhigh ethical standards and a law-abiding spirit, we promotecompliance activities from the perspective of raising awareness, instilling knowledge, and undertaking organizational
measures.

Promoting Information Security
The Canon MJ Group is working to strengthen its information security infrastructure in order to contribute to the realization of a safe, secure, and sustainable society by meansof business activities that resolve the issues of customers
and society through the power of people and ICT. The Grouptakes measures against cyberattacks and other information
security risks and regards the appropriate handling of information assets used in business activities as an importantmanagement priority. We strive to continue to improveinformation security through the use of third-party certifications, such as the Information Security Management System(ISMS) Conformity Assessment Scheme and the PrivacyMark
System. To strengthen information security governance, theRisk and Crisis Management Committee promotes an information security management system involving all employees
through information security policy and strategy formulation,
monitoring, and assessment.

Quality Management
Conducting Supplier Questionnaire
To achieve a responsible supply chain, we conduct questionnaires for major suppliers with the aim of reducing the environmental impact and preventing/mitigating human rights
violations, and gaining insight into the actual state of affairsof the initiatives suppliers are carrying out.

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Going forward, we will engage with each supplier as necessary based on the results of the questionnaire.

The Canon MJ Group is constantly working to enhancequality so that it continues to provide safe, reliable, andhigh-quality products, services, and support to its customers and earn high levels of customer satisfaction. In
proceeding with our business transformation with the IT
solutions business at the core of our business growth, wehave declared our commitment to continuing to address

customer needs by means of our quality policy, which we
work to ensure awareness of in all of our employees on aregular basis. Moreover, we have established a quality management system that combines the requirements of ISO
9001, the international quality standard, with the Canon MJ
Groupʼs unique framework in an effort to improve customer
satisfaction.

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The Canon MJ Groupʼs Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Sustainability Management

Representative Examples of the Social Value Created
Resolving Social Issues through Business Activities
Enrich lives

Pocket-Sized Telephoto-Type Camera Contributes to a More Fulfilling Life

PowerShot ZOOM is a pocket-sized telephoto-type camera that users can lookthrough like a telescope and also take photos and videos. For example, when
watching a sports game, this enables the user to zoom in on a player by looking
through the camera, and then take a picture of that image. As for watching birds
or other wildlife, users can observe and record their behavior in their natural
habitat while maintaining a sufficient distance. Even when recording daily life
with their family, users can easily take pictures of their children playing and taking part in sporting events from a distance away. PowerShot ZOOM contributes
to a more fulfilling life, as it enables users to capture crucial moments without
missing them, while enjoying scenery that cannot be seen with the naked eye.
Achieve diverse working styles (work) through increased productivity

Resolving Labor Shortages in Nursing Care and Welfare Services by Reducing Workload throughNursing Care Solutions
As the elderly population grows, demand for nursing care and welfare services
is expanding rapidly. Against this backdrop, the labor shortage is becoming
more severe, causing reductions in employee workloads to become a morepressing issue. The Makasete IT DX Series is a one-stop nursing care solutionthat includes the planning, selection, installation, training, operation, and maintenance of equipment and software necessary for improving work efficiency
using ICT, thereby helping to reduce workloads. This encourages the retentionof employees and creates time to interact with facility users, their core duties,
thus contributing to the provision of a fulfilling work environment.
Realize a safe and secure society

Contributing to Disaster Prevention and Mitigation in Local Communities through Smoke
Detection AI and Water Level Measurement AI Services
To create disaster-resilient communities, the national and local governments arepromoting disaster prevention and mitigation using disaster prevention information systems, high-altitude cameras, and various sensor equipment. However, inmost cases, the operation of the high-altitude camera is started after receiving
notification of a disaster. This causes issues, such as delays in disasters being
reported after they occur, and difficulties with confirming the condition of
built-up urban areas. Bind Vision, our image-processing AI collaboration platform, offers AI that can detect smoke and measure water levels. It can detect
abnormalities using AI from images taken and send email notifications, enablinga rapid response in the event of a disaster. This contributes to the realization ofa safe and secure society.

Strengthening Our Management Foundation
Environment

Received Third-party Assurance for Greenhouse Gas (GHG) Emissions

To ensure the reliability of environmental data, the Canon MJ Group conducted third-party verification of its 2023 greenhouse gas (GHG) emission data (Scope 1, 2, and 3) in compliance with the international standard
ISO 14064-3, and received an assurance statement from certification
authority LRQA Limited.
▶ For more information, please refer to our news release below.

https://corporate.canon.jp/newsrelease/2024/pr-0326b(in Japanese only)

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Social Contribution Activities
Regional and cultural revitalization

Smile for the Future Project for Regional Revitalization in Disaster-stricken Areas
and Nurturing Childrenʼs Hearts
Since January 2012, the Canon MJ Group has been implementing the Smile for
the Future project, based on the concept of enjoying photography, as part ofefforts to promote reconstruction and revitalization in the three prefectures
affected by the Great East Japan Earthquake. This program utilizes the Canon
MJ Groupʼs photography expertise and provides opportunities for a wide rangeof people, from children to adults, to take photos and experience photo printing
under the guidance of a photographer teacher. Through this project, we help
foster communication between people and nurture the hearts of children.

Personnel development

School Building Memorials Project for Cultivating the Creativity and Self-Expression of Children
Since June 2014, the Canon MJ Group has been collaborating with Pentel Co.,
Ltd. to carry out the School Building Memorials project to help create memories of elementary school buildings that are to be demolished and replaced or
merged with other schools. Children draw pictures using the school building asa canvas, and document this work and creation process using a camera. These
photos are then blown up, printed, and donated. Through this project, we arecontributing to fostering childrenʼs awareness of the arts field, as well as toregional revitalization through interaction with local residents.
Safe and secure society

Aiming for a Society in which AEDs can Save as Many Lives as Possible

In 2009, the Canon MJ Group began activities to promote proper AED placement and to promote awareness and training. In 2019, Canon System & Support
introduced AEDs at its business sites throughout Japan. At some locations,
AEDs installed outdoors and in company-owned vehicles have been madeaccessible to local residents. Just as important as AED placement is training toincrease the number of people who can use an AED. We provide CPR (cardiopulmonary resuscitation) training by about 400 certified instructors not only
to employees, but also to customers and business partners nationwide. Morethan 230,000 people have taken the course so far. We are currently working toachieve the target of 300,000 people.

Health and productivity management

Workstyle reform

Selected under the 2024 KENKO Investment for
Health Stock Selection

Awarded a 4.5-Star Rating in the 7th Nikkei
Smart Work Management Survey

At the Canon MJ Group, we believe that efforts to maintainand improve employeesʼ health based on the principle of“Health First” set forth in the Canon Code of Conduct lead
not only to the happiness of employees and their families,
but also to the maximization of individual performance,
thereby contributing to the growth and sustainability of
the company. Canon MJ was included in
the 2024 KENKO Investment for Health
Stock Selection, jointly selected by the
Ministry of Economy, Trade and Industry
and the Tokyo Stock Exchange, as acompany that excels in health and productivity management.

Canon MJ was awarded a 4.5-star rating in the 7th Nikkei
Smart Work Management Survey, exceeding the 4.0-starrating in the previous survey. We received higher points
than last year for our technology utilization, innovation
promotion system, and market expansion areas. As aresult, in the three evaluation elements, we received an S
rating for “utilization of human resources,” an S++ ratingfor “innovation,” exceeding
last yearʼs S rating, and an
S+ rating for “market development,” up from last yearʼs
S rating.

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