Nikon Environmental Report 2003

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1 Nikon Environmental Report 23

2 Scope of Report This environmental report contains information on the impact of Nikon Corporation s facilities on the environment, and measures undertaken for fiscal year 23 (April 1, 22 to March 31, 23) at Nikon Corporation. It encompasses the head office, as well as the Ohi, Yokohama, Sagamihara, Kumagaya and Mito plants. The report also includes information on activities during the term, plans for future activities, and information on group companies. Reference Environmental Report Guideline (2) by the Ministry of the Environment Web Environmental preservation Corporate profile Investor relations Next issue December 24 Major features The first renewal of ISO 141 certification including group companies is nearing completion. (See page 8) The rate of eco-glass utilisation in optical designs has climbed to more than 9%. (See pages 1, 13) All plants developed zero emission systems with the goal of eliminating emissions which eventually become landfill. (See pages 1, 2) Despite our best efforts toward the reduction of CO2 emissions, we fell short of our target. (See pages 17, 2) Nikon introduced a new three-year plan, Nikon Environmental Action Plan for Fiscal 24 (from fiscal 24 to fiscal 26). It emphasises the regulation of chemical materials crucial for the future of Europe, as well as for our continued expansion. (See page 11) Reduction of environmental loading was a prime consideration in the construction of the new Nikon Ohi West Building. (See page 29) Issued by Environmental & Technical Administration Dept. NIKON CORPORATION Contact Environmental Administration Section Environmental & Technical Administration Dept. NIKON CORPORATION 1-6-3, Nishiohi Shinagawa-ku Tokyo Japan tel: fax: Contents Scope of Report; Major Features; Contact... 2 Message from Management... 3 Company Profile; Major Products of Nikon Group; Net Sales; Number of Employees... 4 Environmental Policy... 5 Nikon and the Environment Environmental Management Organisation/Environmental Management System... 8 Environmental Accounting... 9 Environmental Action Plan Activities in the Product Environment Product Assessment Environmentally Sound Optical Glass (eco-glass), Lead-free Solder Examples of Environmentally Friendly Product Development Future Activities Containers and Packaging Examples of Implementation in Sales and Distribution Activities in the Workplace Environment Energy Conservation Promotion of Reduction and Recycling of Waste Zero Emissions... 2 Control of Chemical Substances Prevention of Pollution and Protection of Air and Water Green Procurement Activities Encompassing the Product and Workplace Environments Environmental Education/Awareness Activities Contributing to Society Topics History of Environmental Preservation Activities... 3 Questionnaire The cover design expresses a world where Nikon s corporate activities are in harmony with nature. The lens, the foundation of Nikon corporate activity, projects air, water and earth onto a green leaf symbolising life. 2

3 Message from Management Recycling coexistence these are key concepts that have served as guidelines for the broad range of activities we have undertaken in the name of environmental preservation since 1992, when we issued the Nikon Basic Environmental Management Policy. The world we live in is experiencing numerous difficulties, including global warming and the pervasion of pollutants into the environment. There is considerable pressure being brought to bear on corporations to take a more proactive stance with regard to preservation of the environment. These activities are becoming a key index used in assessing corporate performance. We at Nikon are cognizant of these changes, and we have continued to intensify our efforts to comply with ever-changing requirements. Our execution of the plan outlined in the Groupwide Nikon Environmental Action Plan, initiated in June of 2, has enabled us to make great strides toward fulfilling our goals in this, the final year of our midterm plan. We achieved zero emissions for all Nikon plants, a full year ahead of schedule. All of our plants and nearly all of our core Group companies have earned ISO 141 certification. Our efforts to minimise the environmental impact of our products continue unabated. This includes IC steppers, LCD steppers, cameras, microscopes, measurement instruments, surveying instruments, binoculars and special equipment. One of our primary objectives has been to increase the usage of ecoglass, and we have made great strides in this area eco-glass used in optical designs has climbed to more than 9%. We have encountered difficulties in pursuit of our goal of a significant reduction in CO2 emissions, widely recognised as the chief cause of global warming, at many manufacturing facilities. However, we maintain our dedication to achieving this goal, and will not be deterred. As we approach fiscal 26, we have reviewed and revised the Nikon Environmental Action Plan. Major changes include emphasis on implementation of environmental preservation activities on a Groupwide basis, and taking measures to comply with the increasingly stringent chemical substance regulations in Europe and elsewhere. We pledge to do everything within our power to support and advance the prosperity and fulfillment of humankind. We hope that this report provides a clear picture of our position on the environment, and we welcome and greatly appreciate your input. Shoichiro Yoshida Chairman of the Board and Chief Executive Officer Teruo Shimamura President, Member of the Board and Chief Operating Officer 3

4 Company Profile Company Profile Corporate Name: Head Office: Established: Capital: (as of March 31, 23) Net Sales: (for year ended March 31, 23) Number of Employees: (as of March 31, 23) Primary Business: NIKON CORPORATION Fuji Bldg., 2-3, Marunouchi 3-chome, Chiyoda-ku, Tokyo , Japan Tel: July 25, ,66 million Major Products of Nikon Group 468,958 million (Consolidated) 342,626 million (Non-consolidated) 13,184 (Consolidated) 5,986 (Non-consolidated) Manufacture and sales of optical instruments Net Sales (Non-consolidated) (Millions of Yen) 391,32 4, 38,64 325, , ,82 3, 293, ,57 23, ,19 259, ,495 24,897 21,49 2, 1, 91/3 92/3 93/3 94/3 95/3 96/3 97/3 98/3 99/3 /3 1/3 2/3 3/3 (Fiscal year-end) Net Sales (Consolidated) (Millions of Yen) 5, 483, , ,958 Precision Equipment Business (Precision Equipment Company*) Imaging Products Business (Imaging Company*) IC steppers/lcd steppers Film cameras/digital cameras/interchangeable lenses/ Speedlights/Photographic accessories/film scanners 4, 342,626 3, 2, 1, 288, ,37 231, , ,89 372, ,799 35,764371,8 Instruments Business (Instruments Company*) Customised Products Business (Customised Products Division*) CMP Business (CMP Division*) Sport Optics Business (Nikon Vision Co., Ltd.) Biological microscopes/industrial microscopes/ Stereoscopic microscopes/measuring instruments/ Inspection equipment Customised equipment/space-related equipment/ Astronomy-related equipment/ Nuclear power-related equipment/optical components CMP systems Binoculars/Monoculars/Fieldscopes/Fieldmicroscopes/ Loupes/Large-objective-diameter binoculars/ Sightseeing binoculars/laser rangefinders 4, 3, 2, 1, 91/3 92/3 93/3 94/3 95/3 96/3 97/3 98/3 99/3 /3 1/3 2/3 3/3 (Fiscal year-end) Net Sales in Japan and Export Sales by Region (Consolidated) (Millions of Yen) 5, 7,32 53,754 46,713 78, ,395 4,436 95,194 52,1 95, ,61 4, ,676 75, , ,272 5,239 65,172 81,815 22, ,55 12,849 76,864 1, , ,54 Surveying Instruments Business (Nikon-Trimble Co., Ltd.) Total stations/gps products/pulse laser stations / Theodolites/Automatic levels 99/3 /3 1/3 2/3 3/3 Japan North America Europe Asia (Fiscal year-end) Other Areas Eyewear Business (Nikon-Essilor Co., Ltd.; Nikon Eyewear Co., Ltd.) Ophthalmic lenses/hearing aids/ophthalmic frames/ Sunglasses/Pendant loupes *These companies/divisions are part of Nikon Corporation s internal structure. Net Sales by Industry Segment (Consolidated) (Millions of Yen) 5, 4, 4% 1% 3, 2, 1, 58% 28% 99/3 /3 1/3 2/3 3/3 (Fiscal year-end) Precision Equipment Imaging Products Instruments Other Number of Employees (Non-consolidated/Consolidated) (Number of employees) 15, 13,894 14,328 13,184 12,761 12, 11,946 9, 6, 6,739 6,675 6,582 6,486 5,986 3, 99/3 /3 1/3 2/3 3/3 Non-consolidated (Fiscal year-end) Consolidated 4

5 Environmental Policy Nikon made its official stance regarding environmental management activities in 1992, when it created and implemented the Nikon Basic Environmental Management Policy, and has continued to be active in environmental conservation. In March 2, we devised the corporate strategy called Vision Nikon 21, which describes the direction of Nikon Group activities. Nikon also redefined its corporate philosophy for the new century, using the keywords Trustworthiness and Creativity. Guided by our new philosophy, we will continue to pursue the goals of the Nikon Basic Environmental Management Policy. Corporate Philosophy Trustworthiness Nikon: Is trusted and loved by people worldwide. Exists and prospers in harmony on all levels throughout the world. Creativity Nikon: Creates new values by maintaining pride and faith in our business and by encouraging entrepreneurial spirit. Appeals to people all over the world and satisfies them with efficient and useful products and services. The Nikon Basic Environmental Management Policy Purpose of the Policy Nikon enacted the Nikon Basic Environmental Management Policy in 1992 in order to express its commitment to improvements in its local environment as well as globally, and to act as the foundation for its environmental management activities. Nikon believes that pollution prevention measures and the efficient use of resources are vital steps that must be taken, in order to be able to hand on to the next generation a healthy environment that is capable of supporting the continued development of society. In fiscal 22, the Nikon policy underwent a major revision in response to the anticipated needs of the coming recycling society. An outline of our action guidelines is presented at right. Action Guidelines (1) We will make every effort to promote waste reduction, reuse and recycling, while encouraging energy and resource conservation, waste reduction and conscientious waste processing, with the goal of creating an environmentconscious recycling society. (2) We will perform environmental and safety reviews at every stage of planning, development and design, in order to provide products that fully comply with environmental protection aims. (3) At every stage of production, distribution, use and disposal, we will actively introduce materials and equipment that are effective in protecting the environment, strive to develop and improve technologies in this area, and work to minimise environmental burdens. (4) We will meet targets for reduction of environmental burdens and use of harmful substances, and continue to improve our environmental management system through environmental audits and other means. (5) We will develop and follow a rigorous code of standards, in addition to observing all environmental conservation treaties, national and regional laws and regulations. (6) We will conduct ongoing education programmes to further employee knowledge of environmental issues and promote employee involvement in environmental activities. (7) We will provide Nikon Group companies and suppliers with guidance and information to promote optimal environmental protection activities. (8) We will participate actively in the environmental protection programmes of society at large, and implement information disclosure. The Nikon Environmental Symbol This symbol was created and introduced in 1998 to represent the environmental conservation and improvement activities being undertaken by the Nikon Group. 5

6 Nikon and the Environment A corporation is like a living organism, functioning within the global environment. As it grows, it provides products and services to society and continues to grow, and during this time it consumes various resources and energy, and generates numerous types of waste. It is crucial that we recognise the importance of recycling and conservation particularly reductions in the use of energy and resources. We must also continue working to reduce our waste output until it has virtually been eliminated. It is imperative that corporations be aware of the impact their operations may be having on the environment, and implement more sophisticated ecological management programmes. Nikon is continuing its efforts to reduce waste materials, and we are also actively pursuing unique activities such as the development of eco-glass, which will significantly reduce our environmental loading. Nikon operates based on its corporate philosophy, Trustworthiness and Creativity, and today we are applying the experience and technology gained through decades of work in the field to form a new, environmentally harmonious corporation. Air Waste Processing Recycling Primary environmental loading Input Energy PRTR substance Electricity Gas Heavy oil Water Dichloromethane Toluene Lead and lead compounds Boron and boron compounds 156,2 6, ,268 5,197 1,285 1,648 1,916 (thousand) kwh (thousand) m 3 Kl (thousand) m 3 kg kg kg kg Disposal Energy Electricity, Fossil fuels Output CO2 Exhaust PRTR substance exhaust Disposal Electricity Gas Heavy oil Dichloromethane Toluene Lead and lead compounds Boron and boron compounds Amount of waste generated Amount recycled Amount of landfill 59,912 12, , ,45 2, t - CO2 t - CO2 t - CO2 kg kg kg kg t t t <Target Plants> Ohi, Yokohama, Sagamihara, Kumagaya and Mito 6

7 Disposal Processing Exhaust gases CO2, NOx, SOx, Others Products Durability, Energy-saving Development, Design, Procurement, Production, Packaging, Transport Raw materials, Components, Chemical substances Water Waste water Phosphorous, Oils, Suspended solids, Others Processing Disposal 7

8 Environmental Management Organisation Nikon first entered into environmental protection activities in 197, when it formed its First Pollution Response Committee. This committee was renamed the Pollution Prevention Committee in 1971, and again in 1973 to be known as the Environmental Improvement Committee. This gave birth to our programme of more practical environmental conservation activities. The environmental management organisation was restructured in 1992 with the enactment of the Nikon Basic Environmental Management Policy, and in 1999, as part of the expansion of and adjustments to the system, we established an Environmental & Board of Directors Chairman of the Board (CEO) President, Member of the Board (COO) Executive Committee Environmental Committee Defines practical policies and standards of achievement for Nikon s environmental management. This committee is chaired by the president of the Business Administration Center. Technical Administration Department within the company. The current environmental management organisation ensures that we are constantly kept abreast of new domestic or international laws, treaties or regulations, or modifications to existing ones, as well as the ever-changing needs of society. Environmental Accounting Sub-Committee Responsible for creation and administration of environmental accounting system. Operating Environment Sub-Committee Responsible for promotion and facilitation of local environmental improvements and global environmental conservation activities considering requirements shared by multiple workplaces. Product Sub-Committee Responsible for researching and devising practical strategies for the environmental friendliness of Nikon products at every stage of product life, all the way to disposal. Packaging Sub-Committee Regional Environmental Sub-Committees (Head Office, Ohi Plant, Yokohama Plant, Sagamihara Plant, Kumagaya Plant, Mito Plant) Promotion of global environmental conservation activities and local environmental improvements everywhere Nikon does business. Business Administration Center Environmental & Technical Administration Department Oversees the environmental management activities of the Nikon Group. Serves as the headquarters for the Environmental Committee. Responsible for devising practical strategies for improving the environmental friendliness of materials used and wastes generated through our product packaging. Green Procurement Sub-Committee Responsible for ensuring environmental impact is considered prior to procurement of materials, and monitoring the environmental conservation activities of suppliers. Nikon Group Environmental Sub-Committee Environmental Management System Responsible for communication and cooperation within the Nikon Group on mutually relevant environmental issues, and promotion of conservation activities. In September 1996, an international standard on environmental management systems (ISO 141) was officially introduced by the International Standards Organisation. The intention of the standard is to promote the self-improvement of environment-related aspects of corporate activities, with the United Nation s policy for ensuring the sustainable development of the human race as its foundation. The Nikon Group s current environmental status and schedule for obtaining ISO certification are indicated below, along with each facility s main activities. The facilities which have been recertified are identified by asterisks (*). Through earning this certification and our dedication to our 8 environmental activities, we have not only achieved improved levels of environmental management, but have also become stricter in our classification of waste, significantly increased our recycling rate for paper, reduced our output of paper and other forms of refuse, and intensified our promotion of energy-conserving measures. This Environmental Management System functions together with the quality standards set forth in ISO 9 guidelines for which each business unit has received certification allowing us to meet our customers needs while showing consideration for the environment, and at the same time supplying high-quality products. Location Date of Approval Primary Activities Ohi Plant Kumagaya Plant Sagamihara Plant Yokohama Plant Mito Plant Sendai Nikon Corporation Zao Nikon Co., Ltd. Tochigi Nikon Corporation Nasu Nikon Co., Ltd. Aichi Nikon Co., Ltd. Kurobane Nikon Co., Ltd. Mito Nikon Corporation Hikari Glass Co., Ltd Nikon Logistics Corporation Okuma Shokai Co., Ltd. Kogaku Co., Ltd. July 1998* August 1998* August 1998* October 1998* April 1999* March 1997* March 1999* September 1999* December 1999* December 1999* December 1999* December 1999* June 2* March 22 May 22 February 23 Development of basic technology, development and design of Imaging Company products Development, design and manufacture of IC steppers Manufacture of optical glass, research and development of lenses Development, design and manufacture of Instruments Company products and LCD steppers Development of manufacturing technology, production of customised products Manufacture of cameras and LCD steppers Manufacture of component devices for IC/LCD steppers, surveying instruments Manufacture of IC/LCD steppers, various optical lenses Manufacture of ophthalmic lenses Manufacture of ophthalmic lenses Manufacture of lenses for microscopes, profile projectors and surveying instruments Manufacture of component devices for IC/LCD steppers, cameras Research, development and manufacture of optical glass Logistics Sales of microscopes and measuring instruments Sales of microscopes and measuring instruments

9 Environmental Accounting Nikon introduced its first comprehensive environmental accounting system in fiscal 21. Environmental accounting involves accounts that show the cost and the effects of environmental conservation activities. Through the introduction of environmental accounting, we aim to improve the effectiveness of our conservation activities, Features Nikon s environmental accounting features the classification of environmental costs and effects in line with our environmental preservation activities. Basic Policy The figures contained in our environmental accounts for fiscal 23 are for Nikon Corporation only. Environmental costs (investments and expenses) are based on Nikon environmental targets and measures, as well as standards set forth in the Environmental Accounting Guideline (22 version) of the Japanese Ministry of the Environment. Cost of Environmental Conservation (Fiscal 23) and implement sustainable environmental policies over the long term with quantifiable results. We are also working to heighten awareness of our environmental conservation activities, through the publication of related information and the clarification of our stance on the environment. Development We established an Environmental Accounting Sub-Committee within the Environmental Committee in June 2, with the aims of creating an environmental accounting system and an appropriate means of operation. This Sub-Committee is active on an ongoing basis. Effects The effects of our environmental activities are shown under the heading Results through Fiscal 23 on the Environmental Action Plan in the next chapter. These results are the actual results of strategies implemented in response to our environmental target values. Unit: millions of yen Category Investment Expenses Main Activities Total Product environment Product development: Containers and packaging Green procurement Energy conservation, reduced use of resources, reduction in use of harmful chemical substances, ozone layer protection Energy-saving design, switch to hot-runner moulds, design products for use with eco-glass Reduction in use of plastics in packaging materials Operation of green procurement guide Product Environmental Accounts Energy conservation Replacement of air conditioning systems, installation of inverters Workplace environment Resource recycling Reduction in use of harmful chemical substances Improvement of office Recycling of waste plastics, promotion of paper reuse, reducing water use Promotion of use of alternative solvents, refurbishment of wash machines Improvement of office environmental performance Workplace Environmental Accounts Response to laws and regulations Operations management for gas and water emissions processing equipment, maintenance of noise and vibration-emitting facilities, waste management, control of dangerous substances Management activities The Ongoing Challenge In addition to trying to collect environmental cost data more quickly and efficiently, we are also aiming to improve our methods for gauging the effects of our activities, so that we can clearly illustrate the relationship between cost and effect. Furthermore, we are ISO 141 related (EMS management, workplace education), introduction of greenery Total Classified According to Guidelines of the Ministry of the Environment (Fiscal 23) Category Cost within business area Pollution prevention costs Global environment conservation costs Resource recycling costs Upstream/Downstream costs Management activities costs R & D costs Social activity costs Environmental damage costs Total Details Operations management for gas and water emissions processing equipment, maintenance of noise and vibration-emitting facilities Energy conservation, reduction in use of harmful chemical substances, control of dangerous substances Waste reduction (recycling of waste plastics, promotion of paper reuse), waste management, reducing water use Containers and packaging measures (reduction of plastics in containers and packaging materials) ISO 141 related (EMS management, workplace education) Energy-saving design, switch to hot-runner moulds, design products for use with eco-glass Financial sponsorship for a wide range of activities Processing contaminated soil Investment 187 Expenses considering more extensive environmental accounting training, and looking at ways in which environmental accounting procedures could be put into use by our manufacturing subsidiaries, whose environmental impact is relatively significant Unit: millions of yen Total , ,143 Scope of Data: Nikon Corporation (Non-consolidated) Applicable Period: April 1, 22 to March 31, 23 * Costs which could not be clarified are in principle not included in these accounts. * Depreciation and amortisation have not been factored into these accounts. * Where a facility has been utilised for several purposes and breakdown is considered complex, the entire cost has been included in the investment cost. * All costs have been rounded up or down to the nearest whole number, so in some cases the totals do not match the figures indicated. 9

10 Environmental Action Plan Nikon implemented its corporate policy statement for group activities, known as Vision Nikon 21, in March 2. This was the basis for the midterm environmental targets we specified in our Nikon Environmental Action Plan 21 for Fiscal 21. Now we have the revised plan, Nikon Environmental Action Plan 21 for Fiscal 23, which separates the targets into 13 categories representing the product and workplace environments as shown below. The results achieved to fiscal 22 are shown below. The following evaluation encompasses fiscal years 21 through 23, as this is the final year of our midterm environmental plan. The Nikon Environmental Action Plan for Fiscal 23 Product Environment Theme Midterm environmental targets Results through fiscal 23 Evaluation 1. Energy conservation (prevention of global warming) Improvement in energy efficiency of 3% or greater for functions on products newly released during fiscal 23, compared with products sold since fiscal out of 16 products selected from among products newly released during fiscal 23 achieved a 3% or greater improvement in energy efficiency. Some examples are introduced on pages 14 and Reduction in use of harmful chemical substances Use of eco-glass in 9% or more of all optical designs in fiscal 23. Begin employing lead-free solder in Printed Circuit Boards from fiscal 23, progressing so that in fiscal 26, 1% of PCBs in consumer products and 5% of PCBs in industrial products will be lead-free. 92% (78%). Unable to implement lead-free solder on PCBs in fiscal 23, but positive results are expected from trial production and testing. 3. Ozone layer protection Reduction of models using ozone layer-damaging HCFC, used as refrigerant for IC and LCD steppers to fewer than 3% of all products shipped in fiscal 23, with ultimate goal of total elimination of use of HCFC by the end of fiscal % (46%). 4. Containers and packaging 4% reduction in plastic containers used in consumer products in fiscal 23, compared with figures for fiscal Total elimination of non-separable multi-material for new packaging from fiscal 21 onward. Use of plastic containers increased by 95% (53% reduction). As in the previous period, no non-separable multi-materials were used. 5. Green procurement Increase suppliers average environmental conservation evaluation by 2 points by the end of fiscal 23, compared with fiscal 2. Increased by 21 points, compared with fiscal 2. (Increased by 7 points, compared with fiscal 2.) Workplace Environment Theme Midterm environmental targets Results through fiscal 23 Evaluation 1. Energy conservation (prevention of global warming) 2% or better reduction in energy consumption per net sales in fiscal 23, compared with figures for fiscal Reduction rate fell to 13% in fiscal 23, compared with fiscal (Reduction rate fell to 16% in fiscal 22, compared with fiscal 1999.) 2. Waste reduction Develop zero-emission system for at least two plants by the end of fiscal 23, and for all plants by the end of fiscal 25. Boost waste recycling rate to at least 85% in fiscal 23. Reduce amount of waste generation per net sales by at least 4% in fiscal 23 compared with figures for fiscal All plants developed zero-emission systems in fiscal % (78%). Reduction rate fell to 31% in fiscal 23, compared with fiscal (Reduction rate fell to 19% in fiscal 22, compared with fiscal 1999.) 3. Reduction in use of harmful chemical substances Reduce use of chlorinated organic solvents in wash by at least 7% in fiscal 23, with goal of elimination of these solvents by the end of fiscal 26. Reduction rate fell to 84% in fiscal 23, compared with fiscal (Reduction rate fell to 62% in fiscal 22, compared with fiscal 1999.) 4. Green procurement Increase the number of new or replacement ecological office supplies by at least 3 over fiscal 21 level, by the end of fiscal new ecological items added since fiscal 2. (259 new ecological items added since fiscal 2.) *In the section titled, Results through fiscal 23, the data in parentheses are results through fiscal 22. Symbols: Circle indicates progress on-schedule; triangle denotes insufficient effort; X represents significant gap between stated goal and actual performance. 1

11 Nikon introduced a new three-year plan, Nikon Environmental Action Plan for Fiscal 24 (from fiscal 24 to fiscal 26), which incorporates considerable revisions to the previous plan. The targets for fiscal 24 are also displayed. Nikon is committed to reaching every one of the targets during the coming period. The Nikon Environmental Action Plan for Fiscal 24 Product Environment Theme Midterm environmental targets Targets for fiscal 24 Energy conservation (prevention of global warming) More than 3% improvement in overall energy efficiency of product models newly released during fiscal 26, compared with figures for fiscal 21. More than 1% improvement. Use of eco-glass in 1% of new consumer product optical designs and in at least 95% of industrial products by fiscal 26. 1% of printed circuit boards in consumer products and more than 5% of new printed circuit boards in industrial products shipped in the second half of fiscal 26 will be lead-free. More than 95% in consumer products and more than 91% in industrial products. Some PCBs in both consumer and industrial products will be lead-free. Reduction in use of harmful chemical substances Elimination of hexavalent chrome, lead, cadmium, mercury, PBB, PBDE and polyvinyl chloride from all consumer products shipped, excluding special materials, by the first half of fiscal 26. Total elimination of HCFC as a refrigerant for IC and LCD steppers shipped by fiscal 26. Notable progress. Reduction of models utilising HCFC to less than 15% of total models shipped. Reduced purchases of products containing hexavalent chrome, lead, cadmium, mercury, PBB, PBDE and polyvinyl chloride to less than 5% of total purchases by fiscal 26. Identification, communication, clear indication and investigation of specific harmful chemical substances. Containers and packaging More than 4% reduction in use of plastic containers for consumer products by fiscal 26, compared with fiscal 21. More than 3% reduction. Workplace Environment Theme Midterm environmental targets Targets for fiscal 24 Energy conservation (prevention of global warming) More than 3% reduction of greenhouse gas emissions per net sales from fiscal 1998 to fiscal 22 (converted for yearly average of CO2 over 5 years) by fiscal 26. More than 1% reduction. Waste reduction Development of a zero-emission system for major manufacturing subsidiaries by fiscal 26. Reduction of the amount of waste discharge per net sales compared with figures for fiscal 21 by at least 2% by fiscal 26. At least one subsidiary. More than 5% reduction. Reduction in use of harmful chemical substances Total elimination of chlorinated organic solvents in wash, including at major manufacturing subsidiaries, by the end of fiscal 26. More than 8% reduction, compared with fiscal Green procurement Introduction of Nikon Green Purchasing Guidelines in fiscal 24, with at least 8% of purchases conforming to the Nikon Green Purchasing Guidelines by fiscal 26. Introduction of Nikon Green Purchasing Guidelines, with at least 6% of purchases conforming to the guidelines. 11

12 Activities in the Product Environment Product Assessment To minimise the adverse environmental effects of our products throughout their life cycles (see diagram to right), Nikon formulated its own product assessment system in This system makes it possible to quantify the degree of reduction of environmental impact during product development. From 1995 we implemented this system in all product development and design departments, in order to gradually decrease environmental loading caused by our products. Nikon is constantly adding items and standards for assessment. We have introduced a new product assessment system (5th edition) which incorporates stricter standards, in order to boost the efficiency of natural resource usage, energy consumption and harmful substance management. General life cycle for Nikon products Raw material receiving Transport Material, component and product manufacture Usage No longer serviceable Disposal Recycling Features of Nikon Product Assessment System Priority placed on reducing consumption of resources and energy; recycling; long product life; reduction in use of harmful substances; reduction and simplified processing of waste; disclosure of material information. Advance survey and investigation of emerging environmental issues and regulations in each country, and development of Nikon standards that take the characteristics of our products into account. Formulated after thorough discussion among product development teams, material engineers and other related personnel. Make product assessment mandatory in design reviews and related phases of product development sequences, with procedures and standards clearly defined. Continuous revision through item addition and improvement; Version 4 is currently in use. Vigilance in product improvement from one model to the next. Support designers by building and maintaining an environmental database of material information (eco-glass, flame retardants, etc.), explanatory text and documentation. Contents of the Nikon Product Assessment Continuing reduction in product mass, volume, and part count. Assessment and improvement of energy consumption based on Nikon s Power Consumption Efficiency formula (product functionality/power consumed). Pursuit of extended product life and simpler repair. Promotion of recycling of secondary batteries (simplified removal, content marking and explanations). Elimination of specific brominated flame retardants (suppression of dioxin in waste processing). Reduce use of vinyl chloride (added chlorine and lead, cadmium and phthalates can cause problems after waste disposal). Elimination of ozone layer-depleting substances (specified CFCs and alternative substances). Marking of materials used (compliance with ISO international plastic marking standard, parts marking). Reduction in use of harmful substances (heavy metals in materials such as resin, electric wire, solder etc.). Simplified separation of plastics and metals. Reduction in amount of waste generated from consumables; appropriate customer guidance on waste processing. Use of optical glass free of lead and arsenic in optical system components such as lens elements (see page 13). Strict observance of environmental laws and regulations. Overall assessment (comments on degree of improvement, overall assessment points, etc.). Nikon Product Assessment Record In all Nikon product categories, products are assessed at all stages of development, including prototype and mass production. Efforts to improve environmental friendliness are constant. If a product shows improvement in terms of environmental friendliness when compared with the prior model, assessment points are awarded. If the product is about the same, no points are given. If it has deteriorated, points are subtracted. The assessment point scale ranges from 1 to +1. For the eight-year period from fiscal 1996 to fiscal 23, a total of 488 assessments were made under this programme, with an average assessment of points. The current cumulative total exceeds 6, points. Nikon is continuing its efforts to improve and enhance the functionality and performance of all of its products, while releasing new products to world markets, and this assessment indicates that our environmental efforts are gradually being rewarded. Product Assessment Results (through FY23) (Number of assessments) /3 97/3 98/3 99/3 /3 1/3 2/3 3/3 Number of assessments Cumulative total points (Points) 7, 6, 5, 4, 3, 2, 1, Fiscal year-end 12

13 Activities in the Product Environment Environmentally Sound Optical Glass (eco-glass), Lead-free Solder Targets Use of eco-glass in 9% or more of all optical designs in fiscal 23. Begin employing lead-free solder in Printed Circuit Boards from fiscal 23, progressing so that in fiscal 26, 1% of PCBs in consumer products and 5% of PCBs in industrial products will be lead-free. Nikon began full-scale work on the development of eco-glass, the environmentally sound optical glass free of lead and arsenic, in We are employing this new glass in all of our product categories such as IC steppers, cameras and microscopes that incorporate optical systems. History of Eco-glass Development Since Nikon was established in 1917 as the first optical glass manufacturer in Japan, we have placed a high priority on the development and manufacture of optical glass designed for use in optical equipment. As part of our anti-pollution efforts, in the 197s we developed a new composition for optical glass totally free of cadmium, a toxic material. In the 199s, to contribute to the resolution of global environmental problems, we thoroughly reexamined compositions of optical glass bearing in mind the possible effects on the environment. The majority of 7 to 1 types of optical glass contained lead and arsenic. We have recognised that this fact is one of the most significant environmental aspects of our business activities and products. Therefore, we decided to develop a new Nikon offers an extensive range of optical equipment and, given this diversity, some products incorporate parts that may not accommodate eco-glass. As far as technically possible, however, we intend to switch over to the new material. We will take the same stance in replacing solder that contains lead with lead-free solder. environmentally sound glass and employ it in our products. We demanded that the new glass offer optical performance at least equalling that of the glass in use. As such, the optical glass development department and the optical design department initiated a joint effort to investigate a variety of new compositions and design factors. After development was completed and the supply stance solidified, we began introducing eco-glass into our products. In fiscal 1999, the new glass was used across the board in the optical design department. Nikon is working to minimise the risk of environmental pollution (air, water, soil and waste disposal sites) caused by optical glass containing lead and arsenic, as far as possible throughout the entire product life cycle (raw material production, manufacturing, use and disposal). Eco-glass Development Highlights Fiscal 1996 Eco-glass development project launched full-scale. Fiscal 1998 Eco-glass-related items added to Nikon product assessments. Fiscal 1999 Eco-glass database completed; employed across the board in optical design. Fiscal 2 Development of eco-glass composition about 8% complete; eco-glass used in 77.1%* of new optical designs. Fiscal 21 Development of eco-glass composition complete; (cumulative total development cost is 41 million yen); eco-glass used in 86.1%* of new optical designs. Fiscal 22 Eco-glass used in 78.1%* of new optical designs. Fiscal 23 Eco-glass used in 92.2%* of new optical designs. The rates of eco-glass utilisation* in new optical designs in various fields are as shown below. Fiscal 22 Fiscal 23 IC steppers Cameras and digital cameras Microscopes and measuring instruments Surveying instruments, customised products, others Future product development Nikon overall *Rates are calculated based on component units. 73.5% 81.% 83.8% 94.4% 9.8% 78.1% 98.5% 1.% 8.8% 98.2% 94.4% 92.2% Introducing Lead-free Solder As part of our efforts to minimise the use of harmful substances, Nikon is planning to replace existing lead-tin alloy solder with new lead-free solders made from alloys such as tin-silver-copper. One step in the implementation of lead-free solder is the promotion of trials and assessments, using the high-performance, lead-free soldering reflow furnace at the Yokohama plant, and at other facilities among our Group companies. Nikon has also enacted technical lead-free soldering standards for our engineers, and will keep our manufacturing system, as well as group and cooperative companies abreast of the situation. An environmental action plan has been developed for future product plans. See pages 1,11 Lenses and prisms made with eco-glass Eco-glass development High-performance reflow furnace for lead-free soldering 13

14 Activities in the Product Environment Examples of Environmentally Friendly Product Development The entire Nikon group is implementing the Nikon Product Assessment to create new products which offer enhanced power consumption efficiency, are smaller and lighter, use less harmful substances, and utilise eco-glass. We believe these improvements will be most beneficial to the global environment. Here are a few examples: Precision Equipment Company Products i-line scan field IC stepper NSR-SF12 This i-line stepper delivers high-performance exposure for non-critical layers of next-generation DRAMs and MRUs. It has been designed to offer superior cost performance in mix-and-match applications with lens-scanning KrF steppers, the key systems in state-of-the-art semiconductor fabrication lines. The result is superlative productivity for advanced semiconductor manufacturing lines. Overall power consumption efficiency has been improved through enhancements in resolution, total alignment accuracy and throughput, in combination with measures to limit power consumption. <Power consumption efficiency> Increased by 15% over the NSR-SF1 in exposure of a 3mm wafer (internal reference). <Ozone layer protection> New HFC refrigerant with zero ODP (Ozone-Depletion Potential) used for temperature control and air conditioning chillers. <Global warming substances> New HFE refrigerant with low global-warming potential used in equipment internal cooling. Liquid crystal display stepper FX-51S/61S The development of advanced technologies by Nikon, including multilens projection optics and a scanning exposure system has made it possible to attain both the exposure area and resolution needed for 5th- and 6thgeneration plate sizes, both crucial in the production of Liquid Crystal Display (LCD) panels. The FX-51S/61S offer enhanced throughput and significantly improved energy efficiency. <Power consumption efficiency> Increased by 66% over the FX-12S for a 13.3-inch panel, and 125% over the FX-61F (internal reference). <Ozone layer protection> New HFC refrigerant with zero ODP (Ozone-Depletion Potential) used for air conditioning. NSR-SF12 FX-51S/61S Imaging Company Products 1. Film-based cameras and interchangeable lenses Nikon F75 Compared to its predecessor, the small and lightweight Nikon F65, the F75 offers an improved range of easy-to-use functions, with space-saving design implemented from the component level to enable the creation of an even smaller, lighter 35mm SLR camera. <Reduced product volume> 7% less than the Nikon F65 <Reduced product mass> 4% less than the Nikon F65 F75 Lite Touch Zoom 15ED QD The adoption of a new single-motor design and downsized mechanisms make this camera the smallest and lightest in the world among 4x zoom compact cameras with sliding covers. <Reduced product mass> 9% less than the Lite Touch Zoom 14ED QD Lite Touch Zoom 15ED QD AF-S VR Zoom-Nikkor 7-2mm f/2.8g IF-ED This large-diameter telescopic zoom lens features Nikon s exclusive built-in Silent Wave Motor (SWM), and employs a Vibration Reduction (VR) mechanism. Magnesium alloy is used at key points on the lens barrel to provide strength, reduced weight and recyclability, while multifunction parts help lower the total number of parts. Despite its impressive capabilities, the lens is even smaller and lighter than its predecessor. <Reduced product mass> 7% less than the AF-S 8-2 f/2.8d <Eco-glass usage> 1% AF-S VR Zoom-Nikkor 7-2mm f/2.8g IF-ED 2. Digital cameras COOLPIX 54 Nikon s highly advanced optical technologies enable the incorporation of a 4x zoom lens with coverage from 28mm, while still offering reduced weight. The COOLPIX 54 also boasts high energy efficiency. <Power consumption efficiency> 5% higher than D1 COOLPIX 21 This camera is cleverly designed to afford both a compact body loaded with high-performance functions, and a highly ergonomic design for simple, comfortable operation. <Longer battery life> 17% longer than the COOLPIX 755 <Reduced product mass> 19% less than the COOLPIX 755 <Eco-glass usage> 1%, including projection lens COOLPIX54 COOLPIX21 14

15 Targets Improvement in energy efficiency of 3% or greater for functions on products marketed during fiscal 23, compared with products sold since fiscal Reduction of models using ozone layer-damaging HCFC, used as refrigerant for IC and LCD steppers to fewer than 3% of all products shipped in fiscal 23, with ultimate goal of total elimination of use of HCFC by the end of fiscal 25. Instruments Company Products CNC video measuring systems NEXIV VMR-18, VMR-H33 The Nikon NEXIV VMR series of general-purpose, high-precision, non-contact measuring systems are capable of measuring 3D shapes such as electronic parts and precision components, using an optical head with high-power zoom optics and laser auto-focusing, an automatic stage and image-processing capabilities. (See the NEXIV website at for specifications and applications of the NEXIV VMR series.) The new series employs LED light sources in place of halogen lamps, which greatly reduces generated heat and power consumption while enhancing precision. Measurement speed is doubled thanks to improved controllability, optical characteristics and performance. <Power consumption efficiency> 3% higher than the previous NEXIV models <Eco-glass usage> 82% in VMR-18/79% in VMR-H33 <Consumables> Number of halogen lamps has been reduced from six to two NEXIV VMR-18 NEXIV VMR-H33 Nikon Group Products Fieldscope ED82 (straight body)/ed82 A (angled body) To meet the sophisticated needs of avid birdwatchers, these Fieldscopes offer large, 82mm-diameter object lenses with multilayer coatings and the bright, sharp imagery provided by a twe-piece ED lens. The waterproof construction helps prevent fogging and the growth of mould in the optical system even if it is pervaded by moisture, providing the durability and ease of use needed for field observation. The case has also been designed for outdoor use, coloured green to help avoid startling birds and other wildlife. Prisms and lenses use eco-glass, containing no lead or arsenic. <Eco-glass usage> 1% <Extended product life> Bundled Stay-on case protects the body against shock; built-in slide hood; reinforced prism holders; waterproofing <Simplified repairs> Most parts and servicing methods are identical to those of the existing Fieldscope III. Surveying Instrument Pulse Laser Stations NPL-352/332 The successor to the NPL-35, and sister to the DTM-352/332, this Series inherits the unsurpassed reliability of its predecessors through water resistance and long-term field use. It also provides enhanced basic performance, user interface, and is capable of providing a 2m non-prism measurement distance, the longest in its class. <Reduced power consumption> 15% less than the NST-2N Series (battery life increased from 5.5 to 6.5 hours) <Reduced parts count> 1% less than the NST-2N Series <Eco-glass usage> 91% (lead content of optics reduced from the 55.2g of the NST-2N Series to only.32g) <Simplified repairs> The telescope does not have to be disassembled in order to repair the distance measurement system. The new Pulse Laser Stations also feature less complex optics, fewer adjustments, integration of electrical boards, simpler assembly and automated electrical adjustments. These improvements facilitate assembly and significantly enhance repairability. ED82/ED82 A NPL-352/332 NOTE: Most of the above products were introduced in Japan during fiscal year 23. Future Activities We have established a rigorous system for environment-oriented design activities and enhancement of the ISO 141-compliant environmental management system. We are applying this system to the development of products, supported by the more aggressive Nikon Environmental Action Plan (product environment) Product environmental aspect evaluation (assessing current situation) See pages 1,11 Environmental targets for each product, programme to achieve targets Nikon Environmental Action Plan and Nikon Product Assessment, resulting in an entirely new level of environmental friendliness. In addition to using lead-free solders, we are striving to develop products that are free of harmful heavy metals and polyvinyl chloride. Development and design Nikon Product Assessment Design review, product commercialisation meeting 15

16 Activities in the Product Environment Containers and Packaging Targets 4% reduction in plastic containers used in consumer products in fiscal 23, compared with figures for fiscal Total elimination of non-separable multi-material for new packaging from fiscal 21 onward. Nikon defined its Environmental Policy Regarding Packaging Materials in May 1998, and reviewed it in June 2. This policy has seven main points: 1. Elimination of harmful substances. 2. Reduction in volume and content. 3. Recyclability. 4. Safety and ease of separation of materials. 5. Use of recycled resources. 6. Reusability. 7. Marking regarding packaging materials and handling precautions. The activities implemented based on this policy are as described in the following chart: Non-vinyl chloride film Theme Policy Contents Application Plant-derived filler materials Cushioning film Reinforced cardboard boxes Single-material presentation cases 1. Elimination of harmful substances 2. Reduction in volume and content 2. Reduction in volume and content 2. Reduction in volume and content 3. Recyclability 5. Use of recycled resources 4. Safety and ease of separation of materials Switch from use of vinyl chloride material, which is considered a major source of dioxin, to non-vinyl chloride materials such as polypropylene. Plant-derived filler materials are made from bean and wheat husks. They are significantly safer and more environmentally friendly filler materials than those derived from crude oil. We also use biodegradable resins in packaging containing filler materials. Support with elastic film enables significantly reduced consumption of cushioning material. Adoption of reinforced three-layer cardboard boxes has enabled a significant reduction in weight and volume of packaging in comparison with old-style wooden boxes. Use of film in presentation cases has been eliminated. Cases are now made from paper only, for ease of breakdown and decomposition. Wrapping materials for equipment such as steppers Gap filler (Instruments Company products) Cameras Stepper body (for shipping to certain destinations) Accessories Cushioning film Reinforced cardboard boxes Assembly-type packaging Steel pallet Pulp moulding Dedicated transport containers Polyethylene bags 4. Safety and ease of separation of materials 4. Safety and ease of separation of materials 6. Reusability 5. Use of recycled resources 6. Reusability 7. Marking regarding packaging materials and handling precautions So far, we have achieved the following in our challenge to meet targets: In fiscal 22, use of plastic containers and packaging for consumer products was reduced dramatically 53% in weight against fiscal 1999 levels, through progressive use of pulp moulding and other techniques. However, in fiscal 23, it The filler material and the cardboard are assembled manually for ease of separation later. Old-style packaging involved a fusing of different materials (cardboard and a crude-oil derived filler material). Smoke sterilisation process used with wooden pallets is no longer necessary. This also contributes to conservation of the forests. A paper filler material consisting of 55% recycled paper. This material is gradually being introduced as an alternative to crude oil derivatives. Dedicated containers are used for shipment to certain corporations. All packaging material is marked to facilitate separation. All bags, other than those of extremely small size, are marked with a warning of suffocation risk to infants. Instruments Company products Stepper Cameras, lenses, microscopes Microscopes increased to 95% in weight against 1999 levels, due to the dramatic growth of the digital camera business. Through the use of single-material presentation cases and assembly-type packaging, as well as other methods, from fiscal 22 through 23 we achieved our target of eliminating the use of non-separable multi-material for new packaging in fiscal 23. Activities in the Product Environment Examples of Implementation in Sales and Distribution Steel pallet Pulp moulding Nikon is working tirelessly to reduce the total and long-term environmental impact of its products and services. Since Nikon supplies products worldwide, we must also pay strict attention to sales and distribution activities. The following are some examples of our reuse and recycling efforts in these areas: 1. Sales of used steppers for reuse Nikon Tec Corporation has been collecting used steppers discarded by customers, and reconditioning and reselling them for new users, with the appropriate services supplied. This is an example of Nikon s willingness and capability to reuse its own products. Fiscal 23 saw 12 significant achievements, both domestically and abroad. Nikon is conducting in-depth research on the needs of the semiconductor industry, in order to help companies in the field to expand their businesses. This is another area in which our dedication to environmental preservation, profitability and customer service shines through Recycling of packaging materials and batteries in Japan (1) Packaging materials Nikon have contracted the services of JCPRA (Japan Containers and Packaging Recycling Association) to collect and recycle packaging materials used during the sale of Nikon products. (2) Batteries Nikon and many other companies have engaged in cooperative efforts with JBRC (Japan Battery Recycling Center) to collect and recycle rechargeable batteries for digital cameras and other products discarded by consumers. 3. Recycling of packaging materials and batteries in Europe (1) Packaging materials Our overseas subsidiaries have contracted the services of DSD (Duales System Deutschland) to collect and recycle packaging materials used during the sale of Nikon products. (2) Batteries Our overseas subsidiaries have contracted the services of GRS (Stiftung Gemeinsames Rücknahmesystem Batterien) to collect and recycle batteries for cameras and other products discarded by consumers.

17 Activities in the Workplace Environment Energy Conservation (anti-global-warming measures) Targets 2% or better reduction in energy consumption per net sales in fiscal 23, compared with figures for fiscal Carbon dioxide (CO2), which is released into the atmosphere when fossil fuels are burned, is the main cause of global warming. The Third Conference of the Parties (COP 3) to the United Nations Framework Convention on Climate Change in December 1997 stressed the need for a reduction in greenhouse gas emissions. The control of CO2 emissions through savings in energy use is one way in which global warming may be slowed. Nikon has established a target for savings in energy use including electricity, which is a major source of CO2 emission, of a 2% or better reduction (compared with fiscal 1999 levels per net Energy Use (calculated for electricity)/energy Use per Net Sales sales) by fiscal 23. We improved the efficiency of our air conditioning system and switched to a lighting system that uses energy more efficiently. We have also implemented and promoted various energy-saving measures such as improvements in the manufacturing process and conscientious use of lighting and office equipment. However, due to a slowdown in the semiconductor market and the subsequent drop in net sales, we could not reach our goal of a 2% savings in energy (reduction of only 13% compared with fiscal 1999). (Mwh) 2, (Index) , 12, 8,.76 12, , , , , , , , ,78 164, , , , ,.2 91/3 92/3 93/3 94/3 95/3 96/3 97/3 98/3 99/3 /3 1/3 2/3 3/3 Fiscal year-end. Amount of energy consumed Index of energy use per net sales (Index against turnover in fiscal 1999: 1.) CO2 Emission (t-co2) 8, 7, 6, 47,971 5, 4, 39,311 3, 49,553 4,414 45,111 47,59 36,497 37,743 51,483 41,519 57,45 58,75 46,137 47,78 64,226 62,477 51,863 5,831 65,23 54,182 68,373 67,178 57,214 56,335 72,854 59,912 2, 1, 7,592 7,531 7,454 8,563 8,788 9,645 9,837 11,147 1,858 1,39 1,387 1,21 12,262 1,68 1,68 1,16 1,23 1,176 1,263 1,16 1, /3 92/3 93/3 94/3 95/3 96/3 97/3 98/3 99/3 /3 1/3 2/3 3/3 Fiscal year-end Crude oil Gas Electricity Total Future Energy-saving Strategies We intend to implement the following strategies as we head into fiscal 24. Reduction in harmful emissions from air conditioning Highly efficient operation of utilities facilities Highly efficient operation of manufacturing facilities Renewal of aging facilities/equipment Standardisation of electrical load Integration of electrical facilities Improvements in quality control efficiency *Standard figures for calculating CO2 emissions are taken from the Environmental Activities Evaluation Program (published April 22 by the Ministry of the Environment). 17

18 Activities in the Workplace Environment Promotion of Reduction and Recycling of Waste The manufacturing industry, which evolved as part of the mass production/mass consumption system, is currently at a crossroads in terms of the way things are done. Economic expansion has brought with it yearly increases in the amount of waste produced. Waste was for too long classified as refuse, and simply discarded. As a result, waste has grown in amount and diversity, and there is a great deal of pressure on end- Production, Disposal and Recycling of Waste We implemented programmes to reduce both general and plastic waste, and strictly enforced refuse separation guidelines for this period, which enabled us to control our waste output (including that to be recycled). We also actively promoted the recycling of materials. As a result, the amount of waste disposed of during fiscal 23 represented a 75% (1,5-ton) reduction against the amount recorded for fiscal 1999, and our recycling rate was 89% (up from 59% for fiscal 1999). We also achieved our goal of implementing of-line disposal agencies to devise more efficient methods for disposing of waste. Nikon is committed to the concept of a Resource Recycling Society, in which the world s valuable resources are used as effectively as possible. Through our activities, we are headed in the right direction in pursuit of this objective. zero emission systems at all plants. These results were achieved through utilising waste in RDF (Refuse Derived Fuel), raw material for furnaces and thermal recycling* 1, all of which contribute to the process of recycling. From this point forth, we will maintain our zero emission systems with emphasis on the 3R* 2 principle, and we will work to develop more recycling technologies and foster relationships with recycling agencies. 4, (t) (%) 1 3,5 3, 3,265 2,916 3, , , ,5 2, ,679 2,65 2, ,5 1,928 1, , 5 1,338 1, /3 /3 1/3 2/3 3/3 Fiscal year-end Amount of waste generated Amount recycled Amount of waste disposed Amount of mass reduction Amount of landfill Recycling rate Amount of waste disposed has been designated into two additional categories since fiscal 21, the amount of mass reduction and amount of landfill. *1 The practice of using waste as solid fuel. The waste is ground and separated, and then compressed and shaped and can be used as burnable fuel. Ground waste may be used as raw material in furnaces in place of coke. Certain waste may be burned and the heat released used as an energy source. This contributes both to the reduction of waste and to recycling. *2 3Rs: Reduce, Reuse and Recycle Amount of Waste Generated/Amount of Waste Generated per Net Sales Nikon has set a target to reduce waste generation by fiscal 23 by at least 4% (compared with fiscal 1999 level per net sales) propelled by the momentum created by the 3R principle. In fiscal 23 we reduced the tonnage of generated waste by 1% from the level of the prior year, but because the semiconductor market slumped, corporate net sales also dropped. As a result, the index of waste generated per net sales dropped 31% from fiscal 1999, shy of our target of 4%. (t) 4, 3,5 3, 2,5 2, 1,5 1, 5 1 3,265 2, , , , /3 /3 1/3 2/3 3/3 Amount of waste generated (Index) 1.2 Index of waste generated per net sales Fiscal year-end 18

19 Breakdown of Waste during Fiscal 23 The breakdown of Nikon s waste during fiscal 23 is as shown in the graphs below. (Figures in the graphs have been rounded up or down to the nearest whole number, so some of the graphs do not total 1%). Targets Boost waste recycling rate to at least 85% in fiscal 23. Reduce amount of waste generation per net sales by at least 4% in fiscal 23 compared with figures for fiscal Amount of waste generated, by category Amount recycled, by category Paper Paper 14% 5% 1% 11% 5% 1% Total: 3,45 tons 5% 6% 3% 31% 1% General refuse Wood Garbage Sludge Oil Acid Alkali Plastic Metals Glass/ceramics 5% 11% 16% 12% 5% 6% 11% Total: 2,712 tons 3% 3% 1% General refuse Wood Garbage Sludge Oil Acid Alkali Plastic Metals Glass/ceramics Toxic waste Toxic waste Amount of mass reduction, by category Landfill amount, by category 2% Paper Paper 38% 2% 3% Total: 295 tons 4% 51% General refuse Wood Garbage Sludge Oil Acid Alkali Plastic Metals Glass/ceramics Toxic waste 5% 28% 17% Total: 38 tons 14% 3% 5% 2% General refuse Wood Garbage Sludge Oil Acid Alkali Plastic Metals Glass/ceramics Toxic waste Amount of waste generated, by plant 4% 14% Ohi Plant Yokohama Plant (%) 1. Recycling rate, by category Overall: 89.1% % Total: 3,45 tons 15% Sagamihara Plant Kumagaya Plant Mito Plant % 5.5 Paper General refuse Wood Garbage Sludge Oil Acid Alkali Plastic Metals Glass/ceramics Toxic waste 19

20 Activities in the Workplace Environment Zero Emissions Targets Develop zero-emission system for at least two plants by the end of fiscal 23, and for all plants by the end of fiscal 25. The Nikon Group defines zero emissions as the condition in which no more than 1% of total waste output is disposed of as landfill. In the Nikon Environmental Action Plan, we established as a priority goal the achievement of zero-emission systems at all manufacturing sites for fiscal 25, and have been working to reduce wastes and promote recycling through a variety of programmes. These efforts allowed us to attain our goal during fiscal 23. Nikon s total waste output is about 3, tons per year, and the tonnage that becomes landfill has been reduced to under 1%, or less than 3 tons. Even with this reduction, though, industrial waste landfills serving the Tokyo metropolitan area are expected to be filled in about a year, making it clear that we are dangerously close to the limits of waste disposal through landfill. Waste tonnage can also be disposed of by incineration, but combustion can produce extremely dangerous toxins such as dioxin. Japan has employed incineration as a disposal method for decades, and is now known as the country with the highest dioxin content in its environment. Dioxin, which passes through the food chain and accumulates in the fatty tissues of organisms, is said to function as an endocrine disrupter and carcinogen. It is also passed to infants through breast feeding, and this capability of harming other individuals through indirect exposure has led to widespread restrictions on waste incineration. With the increasing regulations on landfills and incineration, reducing waste generation has become a crucial issue. We fully recognise the importance of reducing the tonnage of wastes generated and sorting them effectively, to preserve our irreplaceable environment for our descendants. Nikon pledges to redouble its efforts to reduce wastes. Definition of zero emissions: No more than 1% of total waste output is disposed of as landfill. Note that this excludes sewerage, household effluent and industrial waste water. Examples of recycling Paper Recycled paper Paper materials (toilet paper) Solid fuel Wood Return to vendors Chips (raw material/compost) Particle boards Thermal recycling Waste compressor (Sendai Nikon Corporation) Garbage Return to vendors Automated garbage disposal machine Animal feed Sludge Fertilizer Cement material Thermal recycling Crusher (Mito Plant) Plastic Raw material Reducing agent for blast furnace Thermal recycling Metals Glass Metal materials Materials Roadbed materials Sorting (Sagamihara Plant) The keys to achieving our goal of zero emissions are reduction of waste emissions and efficient sorting. Nikon plant name Target to develop zero-emission system Major manufacturing subsidiaries Target to develop zero-emission system Ohi Plant Yokohama Plant Sagamihara Plant Kumagaya Plant Mito Plant Fiscal 23 (completed) Fiscal 23 (completed) Fiscal 23 (completed) Fiscal 23 (completed) Fiscal 23 (completed) Sendai Nikon Corporation Tochigi Nikon Corporation Mito Nikon Corporation Zao Nikon Co., Ltd. Kurobane Nikon Co., Ltd. Fiscal 22 (completed) Fiscal 25 Fiscal 26 Fiscal 24 Fiscal 26 2

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