Epson is combating climate change by reducing greenhouse gas emissions in production (scopes 1 and 2) and across its value chain (scope 3) to help drive a transformation toward a decarbonized future, as envisioned by the Paris Agreement. Epson also contributes to society by developing energy saving products and further developing inkjet technology.

• Goal
• Risks & Opportunities (Responding to TCFD)
• Climate Change (Performance)

• Use of Renewable Electricity

The 2015 Paris Agreement set a goal of keeping the increase in average global temperature to well below 2℃ above pre-industrial levels. Epson has set targets for reducing GHG emissions in the value chain to achieve this 2℃ goal as well as the goals of Epson 25 Renewed. Epson's targets have been approved by the Science Based Targets initiative as being consistent with climate change science.

GHG reduction targets

Scope 1: Direct GHG emissions from the use of fuels, etc.
Scope 2: Indirect GHG emissions from purchased energy, etc.
Scope 3: Indirect GHG emissions of the entire value chain

Epson has set FY2025 targets for reducing direct emissions associated with its business activities (scopes 1 and 2 emissions) and for reducing indirect emissions (scope 3 emissions). To achieve these SBTs, we are working in concert with our customers and partners to provide eco-conscious products and services that will both drive business growth and increase corporate value.

Under a company-wide cross-functional organization, each site is increasing the feasibility of decarbonization by implementing reduction measures such as production innovation, equipment and facilities renewal and investment, and the use of renewable electricity.

Main actions for reducing emissions

• Production innovations
• Investment in updated facilities and equipment such as plant infrastructure, scrubbers, and solar power systems
• Use of renewable electricity: Procurement of renewable electricity that uses local natural resources, etc.
• Other reductions to be achieved by power utilities reducing their GHG emissions factors

Renewable Electricity Use

Epson expects its energy use to increase as production increases in line with its long-term growth strategy. Therefore, all Epson sites and businesses are implementing energy-saving measures and increasing the use of renewable energy to achieve our SBT.
In 2021, Epson joined the international initiative RE100, which aims to drive a transition on the part of corporation to the use of 100% renewable electricity for their business activities by 2050. With the acceleration of our efforts in introducing renewable electricity, the global transition to 100% renewable electricity was completed at all Epson group sites¹ on schedule in December 2023. We will continue to utilize renewable electricity moving forward.
¹ Excludes some sales sites and other leased properties where the amount of electricity cannot be determined

Carbon Pricing

Carbon pricing, an instrument that captures the costs of GHG emissions across society, is seen as a way to spur action and innovation in support of lower carbon emissions. Epson prepared payback period criteria and guidelines that incorporate carbon pricing principles to evaluate (study the feasibility of) potential investments for reducing GHG emissions. They were introduced on a trial basis in FY2018 and were formally adopted in 2020.

Under the Epson 25 Renewed Corporate Vision, we are seeking to provide environmental value and mitigate environmental impacts along with our customers. In each product category, we set targets (metrics) that are linked to product value. Ultimately, we have an ambitious goal of reducing scope 3 emissions per unit of value added that is linked to a management performance indicator.

Epson's inkjet technology saves resources. Our printers, which do not use heat to print, draw comparatively little electricity while consumables and limited lifetime parts require only infrequent replacement. Using Epson inkjets instead of laser printers can cut users' electricity consumption and reduce the environmental impacts of society as a whole. Based on the guidance published by the World Business Council for Sustainable Development (WBCSD) and confirmed by a third-party organization, Epson calculated that the emissions avoided through the replacement of laser printers with Epson's inkjet printers in fiscal year 2023 amount to 15.1 thousand t-CO2e¹. Moving forward, we will apply the calculation logic developed for A3 color inkjet printers to other product categories, further visualizing the contribution to reducing our customers' environmental impact.

¹ Based on the calculation method confirmed by Mizuho Research & Technologies, Ltd., the value is obtained by multiplying the difference between the weighted average of the publicly available lifetime CO₂ emissions of major laser printers in the global market and the lifetime CO₂ emissions of Epson's A3 color inkjet printer by the number of Epson A3 color inkjet printers sold in a given fiscal year.

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The Task Force on Climate-related Financial Disclosures (TCFD) released its final report in June 2017. The TCFD encourages businesses to publicly disclose their medium- to long-term risks and opportunities related to climate change as financial information. Epson takes this as a call to develop resilient management and corporate health, able to adapt to all sorts of transitions in the face of climate change with impacts of a scope and scale we cannot predict.

Epson's initiatives to mitigate global warming revolve around reducing CO2 emissions by switching to renewable energy, conserving energy, and reducing global emissions of greenhouse gases (GHG) other than CO2.

2023 Overview

In the 2023 fiscal year, Epson accelerated the use of renewable energy in addition to driving site-based energy-saving initiatives, enabling us to progress toward our SBT Initiative-validated 2025 target of reducing scope 1 and scope 2 greenhouse gas (GHG) emissions by 34% compared to FY2017. This boosted the percentage of renewable energy from less than 1% in the past to about 69% (and 96% in the case of electricity).
Although an increase in energy consumption is expected in order to achieve the goals of the mid-term business plan, Epson will continue to pursue its target, focusing on reduction measures such as production innovation, alongside the utilization of renewable electricity.

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Epson is proactively working to reduce the direct and indirect emissions associated with its business and production activities (scopes 1 and 2 emissions). However, it is indirect emissions that occur in the value chain (scope 3 emissions) that account for the vast majority of Epson's GHG emissions. The lion's share of scope 3 emissions are emissions during the use of our products (category 11: use of sold products) and emissions associated with the procurement of raw materials (category 1: purchased goods and services). Therefore, Epson has incorporated these two categories in its SBT (science-based target). In the future, we will switch from an intensity target based on reducing emissions as a percentage of business profit to a more ambitious reduction target that is in line with the 1.5℃ scenario.

Logistics Initiatives

Epson is reducing GHG emissions by increasing the efficiency of product, part, and waste transportation. We are making products smaller (which increases shipping efficiency), rethinking our logistics centers, innovating the loading and packing processes (to boost loading efficiency), and reconsidering shipment departure and arrival frequencies and number of trips.

Cooperation with Suppliers

Epson and its suppliers can help address societal challenges and achieve sustainability by aligning their approach to supply chain CSR.

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The use of renewable electricity is a key means by which Epson seeks to reach its goal of achieving decarbonization. In line with this, Epson declared, in March 2021, that it would switch to 100% renewable electricity to meet the electricity needs at all Epson Group sites¹ around the world by 2023. In November 2021, the switch was completed in Japan. The global switch to renewable electricity was completed on schedule in December 2023. The Epson Group consumes approximately 872 GWh² of electricity per year. By sourcing renewables to cover this demand, Epson expects to reduce its annual CO2 emissions by approximately 400,000 tonnes.

¹ Excludes some sales sites and leased properties where the amount of electricity consumed cannot be determined.
² For the fiscal year 2023, the results include cogeneration systems (CGS) electricity and self-generated electricity. Since it is difficult to procure renewable energy fuels or green gas certificates that meets the RE100 technical criteria, we have achieved 100% renewable electricity by voluntarily applying renewable energy certificates equivalent to the amount of electricity used.

Scope1 & 2 emissions and electricity consumption in FY2023

More than 70% of Epson's GHG emissions came from the consumption of electricity in fiscal 2017. As a result of our prior efforts to achieve decarbonization by switching to renewable electricity we use, the ratio of GHG emissions from electricity declined to about 10% in fiscal 2023. At home and abroad, we have increased the percentage of renewable energy to 96% of electricity usage by selecting the optimal renewable electricity in each region, such as hydropower and wind power, and by proactively investing in on-site electricity generation.

In Japan, Epson purchases Shinshu Green Electricity, CO2-free value-added electric power produced locally with abundant water sources in Nagano Prefecture using Nagano Prefectural hydroelectric power. This is both reducing Epson's GHG emissions and increasing local consumption of locally produced energy. In the Tohoku area, where Epson has a semiconductor fabrication plant and which accounts for about half of Epson's domestic electricity consumption, Epson uses another CO2-free value-added electric power to reduce GHG emission from electricity usage. In November 2021, Epson completed the transition to 100% renewable electricity for all its domestic sites in Japan.

Our overseas production and sales sites have also completed the transition to using 100% renewable electricity in December 2023. In addition to generating electricity with a rooftop mega-solar power plant, our production site in the Philippines switched to a mix of geothermal and hydroelectric power in January 2021. In addition, our production site in Bekasi, Indonesia, began using biomass power generation in July 2022. The procurement of geothermal power, which is being actively developed by taking advantage of the resources of volcanic islands, and sustainable biomass power using Palm Kernel Shells (PKS; a byproduct of the palm oil production process) and wood chips as fuel, are examples of energy use that aligns with regional characteristics.

Case of onsite solar power generation

* Power Purchase Agreement: Onsite Solar Power Generation Service

The use of renewable energy (energy from natural sources) is one of the most effective ways to reduce GHG emissions. Accordingly, Epson is implementing plans to expand its use of renewable energy long-term. However, there are obstacles to expanding renewable energy use, including costs and supply limitations in some regions. Recognizing that there is nothing one company alone can do about these obstacles, Epson decided to declare its support for the important policy recommendations below as one solution. The realization of these recommendations will make it easier to take actions that minimize the impact on future climate change.

Coordinated global action is essential to combat climate change. We at Epson will therefore continue our efforts toward decarbonization, including by supporting future such recommendations. When deciding whether to join or continue our association with industry groups, we check whether the group's climate change initiatives are aligned with Epson's own policies.

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