Materiality and progress
Materiality
Epson sees achieving sustainability in a circular economy, advancing the frontiers of industry, improving the quality of life and Fulfill our social Responsibility as key themes for solving societal issues.
Key Sustainability Topics, KPI, and FY2021 Results
Key Sustainability Topics
In the 2021 fiscal year, Epson selected 12 key sustainability topics to enable us to address four newly identified priority issues (materialities). Epson has incorporated these topics in its mid-range action plans and is driving initiatives to address societal issues and contribute to the SDGs.
Key Sustainability Topics, KPI, and FY2021 Results
There are 12 key sustainability topics. The table below summarizes the initiative topics, key performance indicators (KPI), and FY2021 results for two of the ESG-related materialities that emphasize corporate sustainability (achieve sustainability in a circular economy and fulfill our social responsibility). The KPIs for the other materialities (advance the frontiers of industry and improve the quality of life) will be announced after FY2023.
1. Materiality: Achieve sustainability in a circular economy
| Key Sustainability Topics | Initiative Topics | Key Performance Indicators (KPI) | FY2021Targets | FY2021Results | FY2022 Targets | Click here for details |
|---|---|---|---|---|---|---|
| Decarbonization initiatives | Using energy-saving equipment and facilities, removing greenhouse gases, engaging suppliers, and pursuing carbon-free logistics to become carbon negative by 2050 | Scopes 1 and 2 GHG emissions reduction ratio | Reduced by 17% compared to FY2017 | Reduced by 41% compared to FY2017 | Reduced by 21% compared to FY2017 | Environment "Decarbonization" |
| Scope 3 GHG emissions (per unit of business profit) reduction ratio | Reduced by 22% compared to FY2017 | Reduced by 38% compared to FY2017 | Reduced by 28% compared to FY2017 | |||
| Using renewable electricity to achieve RE100 | Renewable electricity adoption ratio | Japan: 100% | Achieved 100% renewables in Japan (since November 2021) | Maintain at 100% domestically | Environment "Use of Renewable Energy" | |
| Closed resource-loop initiatives | Becoming underground resource1 free by 2050:
|
Closed-loop materials usage ratio | 20% | 20% Began using recycled plastics in high-capacity ink tank printers |
≥ 20% | Environment "Closed resource loop" Environment "Management_Environmental Performance" |
| Final landfilled ratio2 | ≤ 1% | 0.90% Increased metal recycling within the Group |
≤ 1% | |||
| Customer environmental impact mitigation | Maximizing avoided emissions with products and services that have a lower environmental impact3 | Emissions avoided through products & services | ≥ The previous year | 0276,00 tonnes-CO2e A 107% YoY |
≥ The previous year | Environment "Products and Services that Reduce Environmental Impacts" Environment "Management_Environmental Performance" |
| Environmental technology development | Eliminating virgin plastics and closing resource loops by using Dry Fiber Technology to produce recycled materials and natural materials.
|
Progress of development process | Develop materials & test prototypes |
Selected material candidates for prototyping |
|
Environment "Environmental Technology Development" |
| Establishing high-added-value recycling technology for used metal | Progress of development process | Begin reusing waste wafers | Began recycling of waste wafer | Develop technology for expanding the types of materials recycled |
1 Non-renewable resources such as oil and metals
2 Ratio of landfilled amount of production resources against the volume of resources injected
3 Quantified the contribution of products and services toward GHG emissions reductions
2. Materiality: Fulfil our Social Responsibility
| Key Sustainability Topics | Initiative Topics | Key Performance Indicators (KPI) | FY2021 Targets | FY2021 Results | FY2022 Targets | Click here for details |
|---|---|---|---|---|---|---|
| Increasing stakeholder engagement | Responding to needs and social demands by strengthening dialogue with stakeholders | Social support activities, monetary value of support | Set social contribution activity targets | Determined FY2022-FY2025 targets (0.1% or more of sales revenue) | ≥ 0.1% of sales | Corporate Citizenship |
| Number of dialogs with shareholders and investors and reflecting opinions on management | ≥ 200 meetings with shareholders & investors | 239 times | ≥ 200 meetings with shareholders & investors | Stakeholder Engagement "Shareholders & Investors" | ||
| Evaluation indices of external evaluation agencies | Acquire high recognition4 | Acquired high recognition | Acquire high recognition | Evaluation by External Parties |
||
| Realizing responsible supply chains | Reinforcing supply chain BCM | Impact on customers due to disruption and stagnation in supply chain (Aiming to have no impact on sales in FY2024) | Minimize procurement, manufacturing, and logistics stoppages and disruptions so that sales are not impacted | Sales were affected due to difficulties in parts procurement and stagnation of the logistics function caused by COVID-19 | Impact on sales Half that compared to FY2021 | Governance "Internal Control System_Supply Chain Business Continuity Management" |
| Realizing responsible supply chains | CSR risk levels of suppliers | CSR risk rank of main suppliers (direct materials): 0% high risk | CSR risk rank of main suppliers (direct materials): 0% high risk | CSR risk rank of main suppliers (direct materials): 0% high risk, ≤ 6% middle risk | ||
| Realizing responsible sourcing of minerals |
Conflict-free (CF) ratio of products |
- | - |
Release CF information for CF strategic products |
Supply Chain "Supply Chain Initiatives" | |
|
Survey response ratio5 |
100% survey response ratio | 3TG6survey response ratio: 99% |
100% survey response ratio |
Supply Chain "Responsible Sourcing of Minerals" | ||
| Respecting human rights and promoting diversity | Creating a free and open organizational culture | Organizational climate assessment score for "strength to work in teams" | 3.7 on a scale of 5 | 3.68 | Reset KPI due to change in assessment method7 | Human Resources "Fostering a Better Workplace" Human Resources "Respecting Human Rights" |
| Number of high risk workplaces with "general health risk" in the mental health check | No high-risk workplaces | 2.7% of all workplaces | Consider revising the assessment method7 & resetting the KPI | |||
| Implementation of harassment prevention measures (education and training, case sharing, appointment process, etc.), ensuring to report cases to the head office |
Education & training, case sharing, appointment process checks |
Performed education and training, case sharing, and appointment process checks as planned |
Plan & conduct new training course for managers & for general staff |
|||
| Omission of material cases to the Head Office: 0 | Omission in reporting of material cases to the Head Office: None | Strengthen primary point of contact for harassment consultations & strengthen coordination with the post-report process | ||||
| Respect for human rights through dissemination of the new "Human Rights Policy" within the Group | Embedding and improving the commitment for respecting human rights, human rights due diligence (DD) and relief mechanism | Update the Human Rights Policy | Updated the Human Rights Policy as of April 1, 2022 | Announce the Human Rights Policy and assess and improve the state of human rights DD & remediation mechanisms | ||
| Utilizing human resources in a way that respects diversity |
Female management position ratio (the Company) |
Female manager ratio: 3.6% |
Female manager ratio: 4.1% (as of April 1, 2022), 3.7% (as of March 31, 2022) |
Female manager ratio: 5% |
Human Resources "Diversity, Equity and Inclusion" | |
| 1 or more female executive officers by FY2025 (in Japan) | Enhance internal development | Diversity management training became compulsory; promoted female participation in screened training | Promote the participation of women in training | |||
| Strengthening governance | Reinforcement of compliance management platform | Number of serious compliance violations8 | No serious compliance violations | No serious compliance violations | No serious compliance violations | Governance "Internal Control System" |
| Enhancement of Group compliance level | Implementation ratio of compliance training (e-learning) to all Group employees9 | Completion rate in Epson Group: 100% | Group-wide implementation ratio: 100% | Completion rate in Epson Group: 100% | Governance "Initiatives of Internal Control_Compliance Promotion Activities" | |
| Maintenance and strengthening of governance structure to realize transparent, fair, prompt and decisive decision-making |
Ratio of outside directors on the board of directors |
Maintain the ratio of outside directors on the board at ≥1/3 |
Ratio of outside directors on the board of directors: 50% |
Maintain the ratio of outside directors on the board at ≥1/3 |
Governance "Corporate Governance" | |
| Ratio of outside directors on the nomination & compensation committees | Maintain the ratio of outside directors on the nomination & compensation committees at ≥70% | Ratio of outside directors on the nomination & compensation committees 83% | Maintain the ratio of outside directors on the nomination & compensation committees at ≥80% | |||
| Strengthening information security | Number of serious information security incidents | 0 | 0 | 0 | Governance "Security" |
4 Sustainalytics: Low; FTSE: 4 or higher; Top 50 or higher in "Toyo Keizai CSR ranking"
5 Signifies the ratio of coverage of the survey
6 Abbreviation for conflict minerals, taking the first letters of Tin, Tantalum, Tungsten and Gold
7 Changes designed to achieve greater work engagement
8 Cases of violation that correspond to timely disclosure matters
9 Target: The Company and domestic and overseas subsidiaries
Deciding Materiality
When establishing the Epson 25 Renewed corporate vision in 2021, Epson referenced the societal issues and megatrends described in ISO 26000 and other sources, evaluated them from both a company perspective and a social perspective, and identified the high-priority issues (materialities) that Epson should address to solve societal issues.
Material Trends and Frameworks Referenced
- The Sustainable Development Goals (SDGs)
- Task Force on Climate-related Financial Disclosures (TCFD)
- Macro trends in the social and economic fields, including climate change (European Green Deal Policy, Paris Agreement, etc.)
- Global Japan: 2050 Simulations and Strategies
- GRI Standard
- SASB Standard
- ISO 26000
- Socially Responsible Investing (SRI) survey items
- Responsible Business Alliance (RBA) Code of Conduct