Materiality for the Ricoh Group

Ricoh Group’s Management Strategies and Identification of Material Issues

For the Ricoh Group, an ideal sustainable society is one in which the Three Ps Balance—balance between Prosperity, People and Planet is maintained. In order to create such a society, we will work to solve social issues through business based on the material issues identified by reflecting Ricoh’s Mission Statement, Mid-Term Management Strategy and expectations of our stakeholders, which are reviewed and set in conjunction with the formulation of our Mid-Term Management Strategy every three years.

Seven Material Issues and SDGs

image: Seven Material Issues and SDGs
  [Materiality] [Strategic Intent]
Resolving social issues through business Creativity from Work To provide digital services that transform the way customers work, and help them improve productivity improvement and value creative
Community and Social Development To contribute to the maintenance, development, and efficiency of community and social systems. We leverage our technical expertise and customer connections to expand the areas where we provide value.
Zero-Carbon Society To decarbonize the entire value chain and create business opportunities by contributing to carbon neutrality
Circular Economy To create business opportunities by building a circular economy business mode for ourselves and our customers
  [Materiality] [Strategic Intent]
Robust management infrastructure Responsible Business Process To earn stakeholder trust by taking a holistic view of our supply chain and minimizing ESG risks in our business processes
Open Innovation To shift from a self-sufficient approach to a new value creation process that creates business to quickly resolve social issues
Diverse and Inclusive Workforce To foster a corporate culture where diverse employees can demonsrate their potential and transform themselves and the company into one that is resilient to change

<16 company-wide ESG targets and achievements linked to seven material issues>

Resolving social issues through Business

Materiality
(Material issues)
2030 targets Focus Domains 21st MTS ESG Targets
(End of FY2025)
FY2023 achievements Progress and challenges towards achieving targets by 2025
Creativity from Work
画像:8 働きがいも 経済成長も 画像:9 産業と技術革新の基盤を作ろう
Contribute to “Creativity from Work” of all customers to whom we deliver value​
  • Office services
  • Smart Vision, etc.
(i) Evaluation by customers*1 29%
  • Japan: 26%
  • NA: 39%
  • LA: 65%*2
  • Europe: 25%
  • APAC 17%
Sharing and horizontal deployment of best practices between regions
Community and Social Development
画像:3 すべての人に健康と福祉を 画像:4 質の高い教育をみんなに 画像:11 住み続けられるまちづくりを
Contribute to the enhancement of social infrastructure for 30 million people
  • GEMBA*3
  • Municipal solutions
  • Educational ICT solutions, etc.
(ii) Number of people to whom we have contributed by improving social infrastructure 20 million people 17.94 million people Progressing as planned
Zero-carbon Society
画像:7 エネルギーをみんなに そしてクリーンに 画像:13 気候変動に具体的な対策を
Reduce GHG emissions by 63% for scope 1 and 2, and 40% for scope 3

Switch to 50% renewable electricity
  • Eco-friendly MFPs
  • Commercial printing
  • Silicone-top linerless label
  • Label-less thermal
(iii) GHG scope 1, 2 reduction rate (vs. 2015) 50%​ 50.6%
(iv) GHG scope 3 reduction rate (vs. 2015) 35%​ 38.5%
(v) Renewable energy utilization rate 40% 33.6%
(vi) Reduction contribution amount 1,400 thousand tons 1,059 thousand tons
Circular Economy
画像:12 つくる責任 つかう責任
Ensure efficient use of resources throughout the entire value chain and achieve 60% or less of virgin material usage rate (vii) Virgin material usage rate 80% or less 78.9%

*1 The percentage of customers who evaluated us as a digital services company

*2 A survey targeting solution customers in LA

*3 GEMBA: Maintenance and services business targeting other than offices (e.g., stores and warehouses)

Robust management infrastructure

Materiality
(Material issues)
21st MTS ESG Targets(End of FY2025) FY2023
achievements
Progress and challenges towards achieving targets by 2025
Responsible Business Process
画像:16 平和と公正をすべての人に 画像:17 パートナーシップで目標を達成しよう
(viii) CHRB score*4 Top of the ICT sector Self-assessment completed Implementation of definite improvement activities for the identified priority issues
(ix) Coverage rate of company’s core business environment complying with NIST SP800-171 80% or more Identification and assessment of information to be protected underway Early identification and assessment of information to be protected
(x) Ratio of Group companies with low compliance risk 80% or more Pulse survey completed for high-risk organizations Progressing as planned
Open Innovation
画像:9 産業と技術革新の基盤を作ろう 画像:17 パートナーシップで目標を達成しよう
(xi) Weight of joint R&D contracts 25%​ 23%
(xii) Ratio of digital services patent applications*5 60%​ 54.7%
Diverse and Inclusive Workforce​
画像:5 ジェンダー平等を実現しよう 画像:8 働きがいも 経済成長も 画像:10 人や国の不平等をなくそう
(xiii) Number of people with Ricoh Digital Skill level 2 or above (Japan) 4,000人 2,855 people
(xiv) Training rate of Process DX Silver Stage certified personnel*6 40%​ 21%
(xv) Engagement score *7
  • Global: 3.91
  • Japan: 3.69
  • NA: 4.18
  • LA: 4.14
  • Europe: 4.01
  • APAC:4.15
  • Global: 3.79
  • Japan: 3.57
  • NA: 4.00
  • LA: 3.90
  • Europe: 3.92
  • APAC:4.03
(xvi) Female manager ratio 20% (Japan: 10%) 16.5% (Japan: 7.7%)

*4 CHRB (Corporate Human Rights Benchmark) Score: An international human rights initiative

established by institutional investors and NGOs. It evaluates approximately 250 global

companies from five sectors (agriculture, apparel, mining, ICT, and automotive)

*5 Ratio of patent applications related to digital services business to total patent applications

*6 Training rate of personnel with process improvement experience based on a Process DX

model (Denominator is the total number of personnel in the training target organization of each business unit.)

*7 Uses Gallup’s Q12 mean score

Materiality Analysis

Materiality-specific process

画像:Materiality-specific process

STEP 1: Identifying Issues
In considering our mid-term management strategy, we evaluate the impact of changes in environmental and social trends, such as climate change and human rights, on our business activities, as well as the impact of our business activities on the environment and society, in terms of risks and business opportunities, and we identify issues that need to be addressed.

STEP 2: Prioritizing Issues
Prioritize the identified issues based on international guidelines such as the SDG Compass, GRI standards, and the concept of double materiality, as well as management philosophy, management and business strategies, opinions from external stakeholders, and priority management risks in line with the risk management system. The drafts of materiality and ESG targets are then prepared.

Step 3: Management Decision
The materiality and ESG goals are deliberated and decided upon by the ESG Committee, which consists of the CEO as the Chairman, all Internal Directors, and Executive Officers. These decisions are made in conjunction with the financial goals of the mid-term management strategy and are approved by the Board of Directors before disclosure.

STEP 4: Performance Disclosure
Annual performance against ESG targets is disclosed annually by the ESG Committee, after confirmation with management.

Stakeholder opinions referenced
Individual meetings with shareholders/investors/analysts
Feedback from large IR meetings
ESG requests from customers during negotiations
Request in ESG evaluation systems
Opinions from internal stakeholders
Dialogues with external organizations such as JCLP and JCI

Reference Guidelines
SDGs Compass
GRI standard
European Guidelines on non-financial Reporting directive
Ministry of the Environment's Environmental Reporting Guidelines
TCFD
Ten Principles of the United Nations Global Compact
ISO26000

Relationship between executive compensation and ESG indicators

To clarify management's responsibility for ESG initiatives and achieving targets, we have incorporated ESG indicators into executive compensation since the fiscal year 2020.

Relationship to Executive Bonuses

By incorporating the "DJSI* Annual Ratings," which are used as a tool to monitor ESG initiatives, into the performance-based bonus calculation formula for directors and executive officers, we provide incentives for ESG initiatives. Furthermore, executive officers' compensation is also linked to ESG goals within their areas of responsibility, enhancing commitment to achieving ESG targets in each business unit and group headquarters.

* The Dow Jones Sustainability Index (DJSI) is a share index jointly developed by Dow Jones in the US and S&P Global, a company specializing in research on sustainable investment, to measure the sustainability of major companies around the world from the three perspectives of economy, environment, and society.

Relationship to Executive Stock Compensation

Starting from the fiscal year 2023, in addition to bonuses, we have introduced performance-based stock compensation with ESG targets for directors. The number of ESG targets achieved by the company is linked to the payment rate. Furthermore, this system will also be introduced for executive officers from the fiscal year 2024.

Approach to Materiality (Material issues)

The Ricoh Group's policy is to “Align ESG with business growth.” We position ESG initiatives as future financial targets because we look for them to bear financial fruit three to five years hence. We identify four material issues for “Resolving social issues through Business”, and we regard them as particularly significant business opportunities. By leveraging our strengths in these areas, we aim to drive further business growth. We would like to introduce our activities.

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