Seiko Epson : Environment

INDEX	CEO Message	Sustainability	Environment	Social	Governance	ESG Data/
at Epson	Appendices

Environment

037 Environmental Vision 2050 038 Natural Capital 039 Our Approach

041 Mid-Term Targets

043 Solving Social Issues Through Inkjet Technology

048 Green Bonds

050 2025 Goals

051 Decarbonization

053 Environmental Technology Development

056 Environmental Performance 057 Responding to TCFD Recommendations

064 Global Environmental Positioning Statement

065 Life Cycle Thinking

068 Products and Services that Reduce Environmental Impacts

069 Minimizing Customer Environmental Impacts

091 Environmentally Conscious Products

102 Product Environmental Information

105 Climate Change/Realizing a Decarbonized Society

1. Production
2. Renewable Energy

1. Value Chain

111 Resources/Forming a Circular Economy 111 Reduction of Waste (Zero Emissions) 112 Preservation of Water Resources 115 Product Recycling

120 Pollution Prevention & Chemical Management

120 Management of Chemical

Substances in Products

1. Production
2. Environmental Risk Management

125 Biodiversity Conservation

126 Conservation of Wildlife Resources in Taiwan

127 Activities in Protected Area (U.K.)

128 Conservation of Natural Environment

130 Conservation of Forests

131 Eco Community

131 Eco Education

132 Development of local and social environmental human resources

135 Eco Technology

136 Environmental Management

INDEX	CEO Message	Sustainability	Environment	Social	Governance	ESG Data/
at Epson	Appendices

Environmental Vision 2050

Environmental Vision 2050

Epson aspires to achieve sustainability and enrich communities. Achieving this aspirational goal will require addressing societal issues and driving transformative change in the way things are done.

Environmental Vision 2050 was conceived not from a perspective of what we can or cannot achieve but from a mindset of what we must achieve as a product creator and manufacturer.

Epson will become carbon negative and

underground resource1 free by 2050 to achieve

sustainability and enrich communities

Goals

Actions

• 2030: Reduce total emissions in line with the 1.5°C scenario2
• 2050: Carbon negative and underground resource free
• Reduce the environmental impacts of products and

services and in supply chains

• Achieve sustainability in a circular economy and advance the frontiers of industry through creative, open innovation
• Contribute to international environmental initiatives

1. Non-renewableresources such as oil and metals
2. Target for reducing greenhouse gas emissions aligned with the criteria under the Science Based Targets initiative (SBTi)

In 2008, Epson established Environmental Vision 2050, a statement of our environmental goals out to the year 2050. The world has since changed. Global efforts to achieve social sustainability are accelerating, with the United Nations adopting Sustainable Development Goals (SDGs) 3 and the Paris Agreement 4 charting a course toward decarbonization. In light of these changes, Epson revised the environmental vision in 2018 and specified three actions that the company should take.

In March 2021, Epson further revised the vision, setting specific goals that reflect Epson's strong commitment to addressing major societal issues such as decarbonization and resource recycling.

1. International goals for social sustainability adopted at the U.N. Sustainable Development Summit in September 2015, aimed at addressing global issues such as climate change, poverty, and human rights. There are 17 sustainable development goals with 169 targets.
2. A legally binding international treaty on climate change. The aim of the agreement is to keep a rise in global average temperature to well below 2 degrees Celsius above pre-industrial levels.

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INDEX	CEO Message	Sustainability	Environment	Social	Governance	ESG Data/
at Epson	Appendices

TOPICS

Carbon Budget

The IPCC 5 Fifth Assessment Report reaffirms that there is a near-linear relationship between cumulative anthropogenic greenhouse gas (GHG) emissions and the global warming they cause. This relationship indicates that there is an upper limit to the cumulative GHGs emissions (the sum of past and future emissions) that can be released into the atmosphere if we are to keep the rise in temperature to a certain level. This upper limit is the carbon budget.

According to the latest IPCC Assessment Report (AR6, released in August 2021), the remaining carbon budget for keeping global warming to within 1.5 is 300-400 bn tonnes. At the current pace of global emissions, the carbon budget will run out in 10 years. The UN's Decade of Action is of the utmost importance for containing global warming and meeting the SDGs.

• Intergovernmental Panel on Climate Change

The carbon budget

1861-1880to	°C
3
relative	2			There is an upper limit to the
1.5
change	1.2			amount of cumulative GHGs
1
		that can be emitted and still
Temperature		as of 2020		limit the rise in global
		Remaining budget for total emissions
	0			temperatures
	Cumulative emissions		Cumulative total anthropogenic CO2 emissions from 1870
				Upper limit for cumulative CO2 that can be
				emitted and still achieve the 1.5°C goal

Epson created this graph by simplifying a graph in the IPCC Fifth Assessment Report

Natural Capital

Business Activities Based on Natural Capital

The resources we use are called "natural capital" and include underground resources, abiotic flows, and ecosystem capital.

The mining of underground resources causes destruction of the biosphere. In addition, when mined resources are used as industrial products, they consume a great deal of energy and emit CO2. In other words, dependence on underground resources is unsustainable.

Epson will dramatically change the way natural capital is used. We will reduce the consumption of new underground resources by utilizing previous mined minerals as above-ground resources and will use abiotic flows as energy sources. Ecosystem capital is renewable and non-depletable if used wisely.

In the natural world, solar energy is the only energy source used, and all matter circulates without producing waste. We look to learn from nature, avoid producing waste, and repeatedly reuse resources in our business activities.

			Natural Capital
Underground resources	Abiotic flows		Ecosystem capital
Metal/mineral resources,	Soler, wind, water,	Wood, biomass
fossil fuel, etc.	geothermal heat, etc.	resources, etc.
Non-renewable	Renewable	Renewable
Depletable	Non-depletable	Depletable

Ground resources	Use natural capital wisely
Used metals, plastics,
as renewable resources
and other materials
derived from underground
resources
Reused and recycled
resources	Created by Epson based on United Nations Statistics Division data

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INDEX	CEO Message	Sustainability	Environment	Social	Governance	ESG Data/
at Epson	Appendices

Relationship between climate change, biodiversity, and human society

Climate change

Accelerating

Biodiversity loss

Accelerating

Accelerating

CO2 emissions

Ecological impacts

Biosphere

Poverty

collapse

& hunger

Pollution & waste

Extreme weather,

deforestation & water risks

Energy

Industrial

Chemical

products

substances

Resource

Resource extraction

Materials

Materials

extraction

Consumption of geological resources

Mineral resource depletion

	Ecosystem impacts		Unique to human society

Our Approach

Decarbonization Initiatives

The entry into force of the Paris Agreement in 2016 changed the situation in industrial, economic, and other mar- kets, as the focus turned from a low-carbon to a decarbonization strategy. Unlike the earlier Kyoto Protocol, the Paris Agreement, adopted under the UN Framework Convention on Climate Change, set a goal of keeping the average global temperature rise to well below 2°C above pre-industrial levels. To achieve this, emissions must reach net-zero in the second half of the 21st century. Later, in 2018, the IPCC presented the Special Report on Global Warming of 1.5°C, which shows that there are clear benefits to keeping warming to 1.5°C rather than 2°C in terms of the impacts of extreme events such as heat waves and floods. The report brought the world's attention to the need to reach the 1.5°C goal to overcome the climate crisis, prompting widespread global action.

The world needs to cooperate in transitioning societal systems toward net zero emissions by eliminating the consumption of fossil fuels and removing CO2 from the atmosphere.

Climate risks: 1.5°C vs 2°C global warming

	1.5°C	2°C
World population exposed to severe	About 14%	About 37%
heatwaves(at least once every 5 years)	(about 1.7 billion people increase)
World population at risk of flooding	2 times	2.7 times
(relative to 1976-2005)
Global mean sea level rise		10 cm higher compared to 1.5°C
26 - 77 cm	Up to 10 million more people would
(relative to 1986-2005)
	be impacted
Species	6% of insects, 8% of plants and 4%	18% of insects, 16% of plants and
of vertebrates will be affected	8% of vertebrates will be affected
Coral reefs	70 - 90% decline	99% decline
Ice-free summers in Arctic	At least once every 100 years	At least every ten years
Annual catch of marine fisheries	1.5 million tonnes decrease	3 million tonnes decrease

Source: WWF Japan documents based on IPCC SR1.5 SPM & Chapter 3

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INDEX	CEO Message	Sustainability	Environment	Social	Governance	ESG Data/
at Epson	Appendices

Decarbonization goal: carbon negative

Epson aims to become carbon negative, which is defined as limiting emissions of all greenhouse gases (GHG scopes 1, 2, 3) from our business activities, removing from the atmosphere an amount of CO2 corresponding to the remaining GHGs to reach essentially zero GHG emissions, and then removing even more carbon.

First, we will minimize energy-use associated with production and products and switch to renewable energy sourc- es. Closing the resource loop is also effective in reducing GHG emissions, so, along with our goal of becoming underground resource-free, we will move toward GHG-free manufacturing.

Epson is reducing its customers' GHG emissions by providing products that have a smaller environmental footprint during use. We represent the amount of reduction as a measure of our environmental contribution and are creating and manufacturing products that will increase the contribution.

Conceptual Image of Emissions for Becoming Carbon Negative

GHG emissions

0

Closed

Reduction

actions

resource

Forecast

loop

increase

Renewable

energy

transition

Removals

Environmental

contribution

Baseline

Carbon negative

(FY2017)

(2050)

Closed Resource Loop Initiatives

The idea of a circular economy is being advocated as a sustainable economic system to replace the current one- way linear economy of mass production, mass consumption, and mass disposal. In Europe, the European Commission has adopted the Circular Economy Package and has begun taking concrete steps toward transitioning to a circular economy that uses resources more sustainably.

According to an OECD 1 report 2 , global resource consumption is predicted to increase to 167 gigatons in 2060, which is more than double the 79 gigatons consumed in 2011, due to population growth and GDP growth.

1. Organisation for Economic Co-operation and Development. A European-led international organization to which 35 developed countries, including Japan and the United States, are members.
2. Global Material Resources Outlook to 2060

Conceptual image of the circular economy

Input

	Renewable energy Recycle		Leases
	Biomass	Increase efficiency	Rentals
	Circulating			Subscriptions
	materials
Development	Procurement	Manufacturing	Sales	Use	Sharing

High durability	Resource recovery	Refurbish	Repair	Disposal
Long life	Reuse	Resell	Up grade
Resource-saving		Reuse

Collection &

Material recyclingRecycling

Upcycling

Livestock feed & conversion to energy

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