Environmental Policy and Strategy

• Basic Approach and Policy
• Promotion Structure
• Mechanisms and Initiatives
• Environmental Education and Awareness Activities

Basic Approach and Policy

The Olympus Group's environmental initiatives are founded on its Corporate Philosophy, the Olympus Global Code of Conduct and the Environmental Health and Safety Policy^*. The Olympus Global Code of Conduct sets out our policy on the environment and the actions required. The objectives are described with clarity and detail in the Environmental Health and Safety Policy.

* In May 2015, we published the Olympus Group Environmental Policy. This was based on the Olympus Group Environmental Charter adopted in August 1992, to which we added aspects on both environmental protection and economic growth. This Environment Policy was then converted into the Environmental Health and Safety Policy in April 2021, by incorporating environmental health and safety policies to comprehensively manage our EHS activities.

Environmental Health and Safety Policy

Promotion Structure

In the Olympus Group, the CEO and the CAO are appointed as the top executive officers for the environment. Also, the Human Resources Head, who manages human resource development and general affairs including matters related to the environment, health and safety (EHS), serves as the top management for environmental affairs for the entire Group. Under the leadership of the Human Resources Head, the EHS division is responsible for developing Environmental Health and Safety Policy for the entire Group, as well as planning and promoting environmental measures. The division also monitors environmental initiatives across the entire Group, such as the progress of energy reduction targets and implementation status of environmental measures.
We have environmental management divisions for each business division and Group company. The EHS division is responsible for environmental management for the entire Group. Since FY2015, the EHS division has created an information platform for the entire Group to enable efficient gathering of information on environmental initiatives at various global sites that are essential to environmental management, as well as environment-related data and the status of these sites in complying with laws and regulations. In FY2021, the Olympus Group obtained ISO 14001 multi-site certification^*, which covers 12 group companies in Japan and Asia, including the EHS division, to reinforce the group's environmental governance and streamline the environmental management.
To address environmental issues promptly and appropriately, we aim to globally expand the scope of this ISO 14001 multi-site certification.

* A system in which multiple factories and business offices are certified as a single organization

Environmental Management Structure

Status of Acquiring ISO14001 Certification in Olympus Group (As of August 2022)

*1 The scope of certification covers the environmental management division and medical sales management division of Headquarters (Shinjuku).

*2 The scope of certification covers the general affairs division of the Tokyo Facility (Sasazuka).

*3 It had been certified as Olympus Logitex Co., Ltd. before March 2022

*4 It had been certified as Olympus Corporation and Nagano Olympus Co., Ltd. before March 2022

*5 It had been certified as Olympus Scientific Solutions Americas Corp. and Olympus Scientific Solutions Technologies Inc. before August 2022

*6 It had been certified as Olympus NDT Canada Inc. before Augusut 2022

Status of Acquiring ISO14001 Certification in Olympus Group

Mechanisms and Initiatives

Recognition of Environmental Issues

When establishing its Corporate Strategy and Business Plan, the Olympus Group identifies potential risks that could impact on our business operations. The high risks are then extracted, and their risk levels are assessed. Such high risks include business transition risks to keep up with changes in environmental regulations and technologies to adapt climate change, as well as physical risks associated with natural disasters.
Risk evaluation and prioritization are carried out in each organization assuming the impact on the business should the risk become reality, and the likelihood of such. According to the results of such evaluation and prioritization, business plans for the following year or multiple years are established to manage such risks. As for risks related to environmental regulations, the Quality Management function monitors the regulation trends concerning our products, and the EHS division of each company monitors the regulation trends concerning the business site. The state of compliance is regularly assessed while changes are implemented as required.
The management status of those risks posing a high impact on business operations are regularly monitored in each organization and monitoring results are reported to the Group Executive Committee and the Board of Directors. In response to the monitoring results, the CEO may revise the plan details if management efficacy is insufficient.

Compliance with Environmental Laws and Regulations (FY2022)

Olympus continuously develops and maintains internal rules and regulations adapted to statutory requirements, and trains environmental managers and related personnel, as well as monitoring and improving on-site management.
In FY2022, there were no violations or incidents related to environmental laws and regulations. There were no litigation, fines, or penalties.

Long-term targets and measures

The Olympus Group is fully aware that the recent climate change and ecosystem deterioration, brought about by excessive environmental impact and pollution, is the issue we need to address promptly. In May 2021, we added "carbon neutral society and circular economy" to the materiality items. The target of achieving carbon neutrality was set as reaching net zero CO₂ emissions from our site operations by 2030 (Scope 1 & Scope 2^*1). To achieve this target, we continue to improve production efficiency and implement further energy-saving measures, as well as gradually replacing the energy used in all of our site operations^*2 with renewable energy sources by 2030. We also recognize the importance of environmental impact reduction across the supply chain and continue the transportation modal shift, logistical efficiency improvement, reduction in energy consumption and weight of products, and green procurement.

*1 Scope 1: Direct greenhouse gas emissions by combustion of fuels in our sites. Scope 2: Indirect greenhouse gas emissions from our sites use of electricity, heat or steam supplied by other companies.

*2 Excluding rental properties, such as sales sites.

Major Environmental Activity Results in Fiscal 2022

Response to Climate Change

The Olympus Group recognizes that climate change is a serious issue that threatens the global environment, as well as having grave implications for the group's business activities. Based on this awareness, we announced our endorsement of the Recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) in May 2021, as a part of our contribution to building a carbon neutral society-one of the materiality items in our Corporate Strategy. According to the TCFD's recommendations, the Olympus Group will disclose its climate-related financial information in a timely manner.

Governance

The Olympus Group endeavors to reduce the environmental impact from the entire value chain, including product development, procurement, manufacture, logistics, sales, and repair. Under the CEO and CAO, who are the highest environmental responsible officers, the Human Resources Head, who manages human resource development and general affairs, oversees matters related to the environment, health and safety (EHS) for the entire Group.
The EHS functional division creates an environmental action plan, including the reduction target of CO₂ emissions, as well as monitoring the progress of action plan implementation across the entire Group. In response to the progress report, the highest environmental responsible officers (CEO and CAO) give instructions for any improvement required. The Board of Directors continues to monitor the status of the implemented climate change measures while receiving the related reports at least once a year. Also, to reinforce the commitment of management to the ESGs and climate change initiatives, 20% of the executive officers' performance-based stock remuneration, a part of our long-term incentive remuneration, is linked to the evaluation results of an external ESG evaluation organization.

Environmental Health and Safety Policy

Strategy

The Olympus Group identifies risks and opportunities related to climate change for the short-term, medium-term, and long-term periods by using scenario analysis. The influence of climate change on our business activities is analyzed based on the 2-degree scenario: RCP2.6, IEA B2DS (holding the increase in the global average temperature to below 2℃ above pre-industrial levels) and the 4-degree scenario: RCP8.5 (where the increase is assumed to be up to 4℃ above pre-industrial levels), both of which were presented by the International Energy Agency (IEA). We identified that the major risks within the short-term period (one to five years) would be the suspension of factory operations or breakdown of the supply chain due to natural disasters; and the risks within the medium- to long-term period (10 to 20 years) would be an increase in business costs due to the introduction of carbon taxes and further tightening of CO₂ emissions regulations.
Although such climate change risks could affect our corporate strategy and financial plan, we assume that the scope of influence would be limited. For example, the geographical location of our factories in terms of natural disasters, such as typhoons, can be classed as a physical risk. We confirmed that our factories are at low-risk locations and a business continuation plan for each site was created in case of emergency. As a supply chain risk, we have experienced closures of sales sites due to typhoons and flooding across the world. Still, the influence was limited. We also expect an increase in operational costs due to carbon taxes etc. as a transition risk. However, the percentage of energy costs in the factories among overall business costs is small, and, therefore, the impact on our business will be limited.
As a climate change opportunity, we will continue development of environmentally conscious products with energy-saving and other functions, taking the rising requirement for such products-which contribute to CO₂ emissions reduction-as a business opportunity. However, we estimate the impact from this opportunity on our business will not be so large because the majority of our products are already small with low energy consumption, and the nature of our products and services are relatively independent from any impact from climate change.

* The calculated financial influence was approx. 600 million yen/year based on the carbon tax figures in the World Energy Outlook 2020 by the IEA (2020).

Risk Management

The Olympus Group identifies, assesses, and manages climate change and other environmental risks within the group-wide risk management system that covers all the risks that could affect our business. For more details, see Recognition of Environmental Issues.

Recognition of Environmental Issues

Indexes and Targets

The Olympus Group has set two targets. One is carbon neutrality by 2030 for its site operations (Scope 1 & Scope 2), and the other is switching electricity procurement for its site operations to renewable energy sources also by 2030.
The results in FY2022 were a 25.9% reduction in CO2 emissions compared to FY2018 and the percentage of renewable energy usage reached 18.9%. We continue our production efficiency improvements, energy-saving activities and introduction of renewable energy in business sites across the world.We also pursue the development of environmentally conscious products, green procurement, and improvement of logistical efficiency in order to reduce CO₂ emissions across the life cycles of our products.

• Long-term Targets and Measures
• Results

Response to Water Risk

Regarding our water risk management, an issue in which the world is taking a great interest, we confirmed that none of the major development and production sites in our Group have water risk that is extremely high. For this analysis, we used water risk assessment tools such the Aqueduct Water Risk Atlas by the World Resources Institute (WRI), and the Water Risk Filter by the World Wildlife Fund (WWF), which cover water risk in watersheds and the degree of impact on our operations. Although the influence of water risks on Olympus Group business is low, we are deploying various measures, such as choosing low water risk locations for business sites, reducing water usage in our business activities, appointing drainage system managers, and regular inspections of drainage water.

Number of Major Sites in Different Risk Levels as Defined by the Aqueduct Water Risk Atlas

Total Water Usage by the Result of Water Risk Evaluation as Defined by the Aqueduct Water Risk Atlas

Biodiversity Conservation

There is a concern that the loss of biodiversity will have a serious impact on the global environment and our lives.
The Olympus Group is working to conserve biodiversity, including the management of water use and wastewater and the maintenance of green spaces, through cleanup and forest conservation activities in areas surrounding its facilities.

Green Procurement

Olympus published the "Olympus Group Green Procurement Standard" in 2001.
The Green Procurement Standard, which is also posted on our website, explains the Olympus Group's approach to its environmental activities to all suppliers.
In addition, in our corporate survey that we conduct once a year targeting major suppliers around the world with whom we have ongoing business, we verify whether the suppliers have acquired ISO 14001 certification, reduced CO₂ emissions, water use and waste, and what measures they have taken against chemical substances.
In this way, we are working to raise the level of our environmental activities with suppliers.

Olympus Group Green Procurement Standard

Environmental Education and Awareness Activities

The Olympus Group recognizes the importance of greater environmental awareness by each and every employee and full participation in environmental activities under the Environmental Health and Safety Policy. We are running more environmental awareness activities such as the Olympus Environment Day, a global group-wide event. In FY2022, as part of our Olympus Environment Day initiatives, an environmental e-learning program was conducted involving all Group employees, to promote group-wide awareness of important environmental issues, such as climate change, in working toward the long-term target of carbon neutrality, and the state of environmental activities throughout the Group. We held events adapted to regional characteristics to promote environmental awareness in our major sites with COVID-19 countermeasures implemented.
We have also introduced special training programs to improve our environmental management system and implement it effectively. These include programs on compliance with environmental laws and regulations, and ISO 14001 internal audits at facilities around the world, and site-specific environmental e-learning based on site conditions.

Major Environmental Education Programs
(Olympus and its Japan subsidiaries/FY2022)