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.

Six Material Issues

<Mid-Term Management Strategy ’26（Fiscal 2026-2030）> Materiality and ESG targets

Materiality		Social Issues	Global ESG Targets
Materiality		Social Issues	Indicators	Fiscal 2026 Targets	Fiscal 2030 Targets
Prosperity (Sustainable economy)	Creativity from work	Boosting productivity/Unleashing creativity/ Digital inclusion	①Customer survey scores^*1	Japan:33% North America:35% Latin America:56% Europe:32% APAC^*2:36.2%	Japan:40% North America:38% Latin America:63% Europe:40% APAC^*2:45%
	Creativity from work	Accelerating innovation	②Co-creation projects, as % of total projects^*3	43%	Not disclosed. Only the current fiscal year’s targets are disclosed.
	Safe and secure digital society	Information security and customer privacy	➂Security management maturity^*4(Progress toward FY30 Target)	80%
	Safe and secure digital society	Ethical technology development and utilization	④YoY growth in technology assessment^*5 personnel	30%
	Fair corporate activities	Respect for human rights	⑤% of Ricoh group companies assessed as low risk^*6	50%
		Respect for human rights	⑥Number of high-risk suppliers^*7	0
		Ensuring business ethics and compliance	⑦Compliance maturity^*8	Average 3.0pt
People (Sustainable society)	Inclusive workforce	Employee engagement and inclusion	⑧Engagement Score^*9	3.96	4.14
		Employee engagement and inclusion	⑨% of women in managerial positions	Global 18.3% Japan 9.4%	Not disclosed. Only the current fiscal year’s targets are disclosed.
		Employee skill development	⑩Total number of digital skills at Level 2 or higher^*10	13,200 (cumulative)
	Coexistence with communities	Building relationships with local communities	⑪Employee participation rate in social contribution activities (cumulative basis)	87%
Planet (Sustainable environment)	Zero-carbon society and circular economy	Climate change mitigation and adaptation	⑫GHG^*11 Scope 1and 2 reduction rate（vs. 2015）	65%	75%
			⑬GHG^*11 Scope 3 reduction rate (vs. 2015)	36%	40%
			⑭Renewable energy, as % of total electricity use	57%	85%
		Resource depletion/Resource circulation	⑮Virgin material usage ratio of products	76% or less	60% or less

*1

Percentage of customers who evaluate the company as a “partner that supports problem-solving” through the value it provides, based on surveys aligned with regional strategies.
*2

APAC: Asia Pacific
*3

Ratio of projects involving co-creation with external organizations within the total number of R&D projects
*4

Maturity assessment based on guidelines developed with reference to international standards and frameworks related to cybersecurity
*5

Activities to anticipate and assess the social and ethical impacts of technologies from the planning and development stages, and to reflect risk mitigation measures in products and services
*6

Percentage of group companies that have addressed all key items identified in the Ricoh Group human rights risk assessment
*7

Number of suppliers with multiple non-compliant items against the requirements of the Ricoh Group Supplier and Partner Code of Conduct, which is based on the RBA Code of Conduct
*8

A staged assessment of the extent to which employees’ awareness and systems (compliance framework) for complying with laws, internal regulations, and codes of conduct are embedded and functioning
*9

Uses Gallup’s Q12 mean score (evaluation scores for 12 factors to predict high organizational performance)
*10

Recommended digital certifications and skills defined by Ricoh for each talent category based on the IPA’s DX Skill Standard
*11

GHG: Greenhouse Gas

<21st Mid-Term Management Strategy（Fiscal 2023-2025）> Materiality, ESG Targets, and Performance

Resolving social issues through business

Materiality (Material issues)	Focus Domains	ESG targets in 21st Mid-Term Management Strategy （End of Fiscal 2025）		Fiscal 2023 Results	Fiscal 2024 Results
Creativity from Work	Office services Smart Vision, and others	(i) Customer survey scores^*1	29%	Japan: 26.3% North America: 39.3% Latin America: 64.8%^*2 Europe: 24.5% APAC: 17.4%	Japan: 26.8% North America: 38.6% Latin America: 45.5%^*2 Europe: 28.2% APAC: 30.8%
Community and Social Development	GEMBA(maintenance and services business targeting sites other than offices) Municipal solutions Educational solutions, and others	(ii) Number of people to whom we have contributed by improving social infrastructure	23.5 million people	17.94 million people	22.35 million people
Zero-carbon Society	Eco-friendly MFPs Commercial printing Silicone-top linerless labels Label-less thermal, and others	(iii) GHG Scope 1 and 2 reduction rate (vs. 2015)	50%	47.4%^*3	59.1%
		(iv) GHG Scope 3 reduction rate (vs. 2015)	35%	38.1%^*3	46.8%
		(v) Renewable energy usage ratio	40%	31.0%^*3	43.2%
		(vi) Avoided emissions	1,400 thousand tons	1,059 thousand tons	1,448 thousand tons
Circular Economy		(vii) Virgin material usage rate	80% or less	78.9%	78.3%

*1

The percentage of customers who evaluated us as a digital services company
*2

A survey targeting solution customers in Latin America
*3

Due to changes in organizational structure, the scope of disclosure has been revised and related figures have been recalculated.

Robust management infrastructure

Materiality (Material issues)	ESG targets in 21st Mid-Term Management Strategy （End of Fiscal 2025）		Fiscal 2023 Results	Fiscal 2024 Results
Responsible Business Process	(viii) CHRB score^*4	ICT sector leader	Self-assessment completed. 55% progress toward target	Self-assessment re-performed. 90% progress toward target
	(ix) Compliance with NIST SP800 -171 Coverage of Ricoh’ s core business environment	80% or more	Continued identification and assessment of information to be protected	Identification of information to be protected and formulation of a plan completed. Countermeasures partially completed.
	(x) Low-compliance risk group companies	80% or more	Completed pulse survey for high-risk organizations	Improvement measures developed in the high-risk organization. Implementation partially completed.
Open Innovation	(xi) Contracted Joint R&D ratio	25%	23.0%	22.7%
Open Innovation	(xii) Digital service patent application ratio^*5	60%	54.7%	64.6%
Diverse and Inclusive Workforce	(xiii) Ricoh Digital Skills Level 2 or above rated employees (Japan)	4,000 people	2,855 people	4,658 people
	(xiv) Process DX Silver Stage-certified employee ratio^*6	40%	21.1%	34.2%
	(xv) Engagement score ^*9	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	Global: 3.84 Japan: 3.61 NA: 4.00 LA: 3.95 Europe: 3.90 APAC：4.20
	(xvi) Female-held managerial position ratio	Global:20% Japan:10%	Global:16.5% Japan:7.7%	Global:17.2% Japan:8.4%

*4

CHRB (Corporate Human Rights Benchmark) Score: An international human rights initiative established by institutional investors and NGOs. It evaluates global companies from five sectors: food and agricultural products, apparel, extractives, ICT manufacturing, and automotive manufacturing. (Approximately 250 companies evaluated as the latest benchmark)
*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.)

Materiality Analysis

Materiality-specific process

STEP 1: Identifying Issues
In considering our mid-term management strategy, we assess the risks and business opportunities arising from changes in environmental and social trends—such as increasing demands to address climate change and human rights. At the same time, we evaluate the impact of our business activities on the environment and society, and identify key issues that require action.

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.” By leveraging our strengths, we will further drive business growth through our initiatives. We are pleased to introduce the Ricoh Group’s efforts to help resolve social issues through our business activities.

Resolving Social Issues through Business