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 CHRO (Chief Human Resources Officer) 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 Environmental Health and Safety Policy formulated by the Human Resources Head, the EHS division plans and implements environmental measures and 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 2 group companies in Japan and Asia region, including the EHS division, to reinforce the group's environmental governance and streamline the environmental management.

* 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 2023)

Mechanisms and Initiatives

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 an issue we need to address promptly. In May 2021, we added "carbon neutral society and circular economy" to the materiality items. We also set ambitious targets of achieving carbon neutrality^*1 with respect to greenhouse gas emissions from our site operations (Scope 1 and 2^*2) by 2030 and using electricity generated 100% from renewable energy for our site operations by 2030. In addition, in May 2023, we formulated and announced a target of achieving net zero^*3 greenhouse gas emissions throughout the entire supply chain (Scope 1, 2, and 3^*2) by 2040.
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 our site operations^*4 with renewable energy sources by 2030. We are accelerating initiatives to reduce greenhouse gas emissions. We also recognize the importance of environmental impact reduction across the supply chain and continuously implement measures to develop environmentally-conscious products, improve logistics efficiency, set voluntary reduction targets in cooperation with suppliers, and support decarbonization initiatives.

*1 Carbon neutrality refers to reducing greenhouse gas emissions from site operations (Scope 1 and 2) and offset an amount equivalent to the remaining greenhouse gas emissions using carbon offsets, thereby achieving zero emissions overall.

*2 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.
Scope 3: Other, indirect emissions of greenhouse gas emissions (excluding Scope 1 and 2).

*3 Net zero means reducing greenhouse gas emissions (Scope 1, 2, and 3) as much as possible (at least 90%) in line with the latest climate science (1.5°C scenario) and using credits derived from carbon sequestration and removal (such as afforestation and CO2 capture and storage) for an amount equivalent to the residual greenhouse gas emissions (less than 10%) to achieve a balance.

*4 Excluding rental properties, such as sales sites.

Major Environmental Activity Results in Fiscal 2023

Compliance with Environmental Laws and Regulations (FY2023)

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 FY2023, there was one violation and another incident related to environmental laws and regulations, but an appropriate response was implemented and completed. There were no lawsuits, fines, or penalties.

Company Name	Content	Response
Olympus Corporation	Leak of treated effluent	Completed reinforcement of effluent pipe equipment (changed to a stronger material)
Olympus Corporation	The hydrofluoric acid effluent standards were briefly exceeded in effluent.	There was no external release of effluent with hydrofluoric acid and operational changes to treat effluent as industrial waste were completed.

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 and circular economy 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 CHRO (Chief Human Resources Officer), who are the executive officers responsible for the environment including responses to climate change, the Human Resources Head, who manages the environment, health, and safety (EHS) functions, oversees matters related to the environment, health and safety (EHS) for the entire Olympus Group. In addition, an officer responsible for ESG (Environment, Social and Governance) was appointed and set targets for the ESG field including greenhouse gas emissions in the medium- to long-term business plan to promote ESG initiatives by the Olympus Group.

Under the Environmental Health and Safety Policy formulated by the Human Resources Head, the EHS division created an environmental action plan for the entire Olympus Group in line with the ESG targets set in the medium- to long-term business plan, monitors the status of progress of that plan, and makes continuous improvements. In response to progress reports, the executive officers responsible for the environment (the CEO and CHRO) give instructions for any improvements required. The Board of Directors monitors the status of the implemented climate change measures while receiving related reports as necessary. Also, to reinforce the commitment of management to the ESGs and climate change initiatives, 20% of the executive officers' performance-based stock remuneration, a part of our long-term incentive remuneration, is linked to the evaluation results of an external ESG evaluation organization.

Environmental 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 and IEA CPS (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 greenhouse gas 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, the Olympus Group has 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-related 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 greenhouse gas 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 results of scenario analysis are reflected in the Olympus Group ESG strategy, and each responsible function implements specified measures.

*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

During the management strategy and business plan formulation stages, the Olympus Group identifies risks that have the potential to impact the Group’s business and identifies and evaluates those risks that could have significant impacts on business operations. These risks include regulations relating to the environment including climate change, technology and other transition risks, and physical risks resulting from natural disasters.
Identified risks are evaluated and prioritized by each organization based on the degree of impact in the case where a risk materializes and the possibility of occurrence, and based on the results, we formulate single-year and multi-year business plans to manage the risks. Regarding risks relating to environmental laws and regulations, the quality control function monitors developments concerning those environmental laws and regulations related to our products, and the environmental division of each company monitors regulatory developments relating to their business sites, and each periodically evaluates the status of compliance, and takes measures as necessary.
To address those risks that could have a particularly substantial impact on business operations, we periodically monitor the status of organizational risk management and report the results to the Group Executive Committee and Board of Directors. The CEO receives reports on the results of monitoring of the status of risk management, and if measures are ineffective, reviews action plans.

Indexes and Targets

The Olympus Group has set targets of achieving carbon neutrality with respect to greenhouse gas emissions from our site oprations (Scope 1 and 2) by 2030 and using electricity generated 100% from renewable energy at our site operations by 2030. In order to contribute broadly to the development of a decarbonized society, we believe that it is necessary to take action concerning not just the Group’s own greenhouse gas emissions, but all greenhouse gas emissions throughout the supply chain, and in light of this, in May 2023, we set and announced a target of achieving net zero greenhouse gas emissions throughout the entire supply chain (Scope 1, 2, and 3) by 2040. This target is in line with the high-level goal of 1.5°C set as a challenge target under the Paris Agreement.
Achievements during FY2023 include a 45.7% reduction in greenhouse gas emissions compared to FY2020 and a 71.9% introduction rate of electricity derived from renewable energy. To achieve our targets for 2030, we will improve manufacturing and introduce renewable energy at sites in countries around the world and continuously implement measures to develop environmentally-conscious products, improve logistics efficiency, set voluntary reduction targets in cooperation with suppliers, and support decarbonization initiatives.

• 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, assigning 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, forest conservation activities and tree planting activities in areas surrounding its facilities.
International initiatives such as TNFD^*1 and SBTs for Nature^*2 intended to preserve the natural capital of the land, seas, fresh water, and atmosphere, including biodiversity are currently being investigated and are expected to spread worldwide in the future. The Olympus Group is taking action in line with these trends by identifying risks and opportunities relating to natural capital and investigating responses.

*1 Task Force on Nature-related Financial Disclosures. An international organization that develops frameworks for appropriately assessing and disclosing risks and opportunities relating to natural capital and biodiversity in corporate activities. (Source: Ministry of the Environment)

*2 Science Based Targets for Nature. Measurable, actionable, and time-bound objectives relating to the interconnected systems of water, biodiversity, land, and oceans in value chains based on the best available science that allow actors to align with Earth’s limits and societal sustainability goals. (Source: Ministry of the Environment)

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 greenhouse gas 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 (FY2023)