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Sustainable Management

at the Ricoh Group

Ricoh Co., Ltd.

Susumu Nakamaru

Corporate Councilor

2004.05.13

2004 WEC Gold Medal Colloquium

HO 040513

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Contents

１． Concept of Corporate Social Responsibility

２． Recognition of CSR of the Ricoh Group Toward Sustainable Development

３． CSR Management

４． Environmental Management

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As of March 31, 2004

Ricoh GroupRicoh Group

・ Multifunction Equipments (B/W)

・ Multifunction Color

・ Laser printer

1. Solutions Provider including Office Equipment Sales

2. Mainly Copier Sales

- No. 1 in Digital Copier Sales in Japan

- No. 1 in Digital Copier Sales in Europe

- No.1 in Digital Copier Sales in US

3. Consolidated in FY2003

- Net Sales \1,780,245 Million

(US$16.3 billion)

- Net Income \91,766 Million

(US$841 million)

- No. of Employees 76,000 　　　　　

Main ProductsMain Products

Copier-based networkabledigital systems that copy, print, fax & scan

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“Social Responsibility”

What is the raison d’etre of the existence of the corporation as a member of society, and what must it deliver to society ?

- General Responsibility

- Business Responsibility

- Social Standing Responsibility

by no means new, but…

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CSR: Typical Interpretation

CSR implies; - providing society with economic value “economic”- “primary responsibility”

- contributing to society by giving back to society part of the corporate profits “cost” or “philanthropy”

- taking steps to prevent corporate misdeeds and scandals “statutory measures” or “compliance”

Touches on some aspect of CSR but fails to capture its essence

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The Essence of CSR

1. CSR aims to achieve synergetic development of corporations and society

2. CSR is an “investment” to be positioned at the core of business activities

3. CSR is a voluntary and autonomous initiative

The reason why CSR can contribute to Sustainable Development and improved competitiveness

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Contribution of CSR

1. CSR reduces future risks (Risk management) - encouraging corporations to engage in prior review of risk factors which constitute investor concerns

2. CSR generates future profits (Business case ) - to stay ahead of the curve of changing social needs - driving force in corporate transformation - to ensure more stable and long-term profits

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The horizontal

“Corporate

Governance”

axis must be

established in order

to meet Corporate

Social Responsibility

to stakeholders in

4 objects : Market,

Environment,

People and Society.

Criteria for Evaluating Corporate Social Responsibility

II: Corporate Governance

Status Evaluation

Stakeholders

-Customers

-Shareholders

-Suppliers

-Competitors

　-Current Generation

-Future Generations

　-Employees

-Executives

　-Local Communities

-Civil Society

-Global Community

I: Corp

orate Social R

espon

sibility

Market

Prin

ciples an

d L

eadersh

ip

Implement

Target - Setting

Commitment by Top Management

Environment

People

Society Process Performance

Man

agemen

t System

s

Com

plian

ce

Disclosu

re and

Com

mu

nication

Process Performance

Process Performance

Process Performance

Source: “The 15th Corporate White Paper, 2003/3 ” by the Japan Association of Corporate Executives (KEIZAI DOYUKAI ）( http://www.doyukai.or.jp/en/)

Evaluation Fields →

↓

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Ricoh’s Corporate & Management Philosophy

Corporate Philosophy

Management Philosophy

To constantly create new value for the world at the interface of people and information

To be a good global citizen with reliability and appeal

To think as an entrepreneurTo put ourselves in the other person’s place

To find personal value in our work

Love your neighborLove your countryLove your work

Our Purpose

Our Goal

Our Principles

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1. World No.1 Product

- Winners in the 21st century -

“GROUP VISION” The 14th Mid Term Management Plan

- Each organization and employee observes the law and acts based on corporate ethics- We willingly take part in and support social activities- As a word citizen, we are passionate about the environment, and committed to reaching the top rank in environmental preservation

2. Solid Relationship with Customers

3. Vital and Motivated Culture

4. Performance Excellence

5. Responsible Activities as a Corporate Citizen

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1. World No.1 Product

- Winners in the 21st century -

“GROUP VISION” The 14th Mid Term Management Plan

- Each organization and employee observes the law and acts based on corporate ethics- We willingly take part in and support social activities- As a word citizen, we are passionate about the environment, and committed to reaching the top rank in environmental preservation

2. Solid Relationship with Customers

3. Vital and Motivated Culture

4. Performance Excellence

5. Responsible Activities as a Corporate Citizen

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　 Business Risk Management WG (’01/3 Corporate Planning Division) (’01/12 General Affairs Division)

Developing management system aiming at being one of the foremost environmental concious companies in the world　 (Corporate Environment Division)

CSR Division

establish-ed as of January 1, 2003

proposal

proposal

proposal

CSR study group(11 divisions, ’02/4) * Examined the Ricoh Groups strong & weak points from the view points of ”CSR,” base on the work of ICSR of WEC * Discuss a desirable CSR management system

Enforcing education of ”Compliance” (’02/9 Legal Affairs Division)

Developing a CSR Management System

Review

edR

eviewed

at the m

anagem

ent

at the m

anagem

ent

comm

ittee com

mittee

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Mission and Function of the CSR Division

The CSR Division establishes and operates a mechanism of ”Risk Management” and promotes observance of laws and corporate ethics. We constantly strive to improve our corporate culture, encouraging vigorous social contribution activities, in order to enhance ”Responsible Action as a Corporate Citizen” globally.

1) Supervision, support and audit of ”Business process risk management”2) Management of observance standard regarding ”Compliance” and supervision of staff education and awareness 3) Crisis management 4) Establishment and operation of support system on a group-wide basis5) CSR communications - internal & external ; (information collection, analysis, report, dialogue, etc.) 6) Operation of the CSR Committee

MissionMission

Function

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Chairman ： Director of CSRVice-Chairman ： General Manager of CSR DivisionMember ： appointed person at each division or company

* Subcommittee to be set for each specific subject

CSR Management Structure

●Person

nel an

d L

abor

●Safety on

Job

●Intellectu

al Prop

erty

●En

vironm

ental

Preservation

●Social C

ontrib

ution

●Deal w

ith m

ass med

ia

●Pu

blic relation

s

●Secu

rity related IT

●Au

dit

The Board

ManagementCommittee

CSR Committee

Daily ManagementGive Seminars

Develop CSR at Subs

Executive O

rganization(A

)

Executive O

rganization(X

)

Head O

ffices

Personnel

Finance and

Accounting

QA

Legal

Audit

Corporate planning

Corporate C

itizenship P

romotion

Corporate E

nvironment

Information T

echnology

Generalized Organization

Group C

ompany

●Accou

ntin

g

●QA

and

prod

uct safety

International Marketing

Production

●Deal w

ith

Su

bcon

tractors

●Intern

ational T

rade

ABCD...

CSR Division

●Legal A

ffairs

Director of CSR

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AchieveAchieveBusinessBusinessTargetsTargets

CorporateCorporateSocialSocial

ResponsibilityResponsibility(CSR)(CSR)

Concept of Ricoh’s CSR

Integrity in Corporate Activities

Harmony with the Environment

Respect for People

Harmony with Society

Preconditions for Business Activities

Business ActivitiesBusiness ActivitiesBasic requirements for continued existence of organization

We are entering an area when both must

be achieved

● ● ●

Responsible Activities as a Corporate Citizen

● ● ●

Com

plia

nce

Ethi

cs

Envi

ronm

ent

Soci

al

Con

tribu

tion

Pove

rty

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Ricoh Group Corporate Social Responsibility CharterEffective January 1, 2004

 To grow as a respected enterprise, the Ricoh Group must fully discharge its corporate social responsibility (CSR) from a consistent global perspective and throughout every aspect of its operations. To ensure this, the following principles are to be observed, with the proper social awareness and understanding, compliant with both the letter and the spirit of national laws and the rules of international conduct.Integrity in Corporate Activities1. Every company in the Ricoh Group will develop and provide useful products and services, with high quality, safety, reliability and ease of use, while maintaining security of information and giving proper consideration to the environment.2. Every company in the Ricoh Group will compete fairly, openly and freely, maintaining normal and healthy relationships with political institutions, government administration, citizens and organizations.3. Every company in the Ricoh Group will take responsibility for managing and safeguarding its own information and that of its customers.Harmony with the Environment4. Every company in the Ricoh Group will take responsibility, as a citizen of the world, working voluntarily and actively to preserve the environment.5. Every company in the Ricoh Group, and all employees of each company, will seek to implement technological innovations that reflect environmental concerns and will participate in ongoing activities to preserve the environment.Respect for People6. Every company in the Ricoh Group will, quite apart from corporate group activities, maintain a working environment that is safe and that makes it easier for its staff to do perform their duties, respecting their richly individual characteristics and encouraging their autonomy and creativity.7. Every company in the Ricoh Group will respect the rights of all those connected with it, and will seek to create a cheerful working environment, free of discrimination.8. No company in the Ricoh Group will permit forced labor or child labor, and none will tolerate the infringement of human rights. Harmony with Society9. Every company in the Ricoh Group will, as a good corporate citizen, actively engage in activities that contribute to society.10. Every company in the Ricoh Group will respect the culture and customs of its country or region, and will operate so as to contribute to their development.11. Every company in the Ricoh Group will engage in the fullest possible communications with society, seeking actively to provide the proper and unbiased disclosure of corporate information.

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The Ricoh Group Code of Conduct General Principles

Ethical Corporate Activities• 1. Providing customer-centric products• 2. Free competition and fair trading• 3. Banning insider trading• 4. Managing corporate secrets• 5. Limits on entertainment and gifts• 6 . Doing business with public bodies and • making political contributions• 7. Strict control of exports and imports• 8. Protection and use of intellectual • properties• 9. Participation in anti-social actions• 10. Individual actions against the interests • of the company• 11. Protection of corporate assets

Harmony with the Environment12. Respecting the global environment

Respect for People13.Respect for human rights

Harmony with Society14. Practical contributions to society15. Harmonizing with society Implementation

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Responsible Activities as a Corporate Citizen”

　Responsible Activities as a Corporate Citizen”

　

Risk Management

Crisis Management

Compliance Act in compliance with laws & corporate ethics

Act in compliance with laws & corporate ethics

Overall Framework for Achieving a Vision

Practice and actively support contributions to society

Practice and actively support contributions to society

Compliance Awareness

Make environmental protection a mission

Make environmental protection a mission

Culture Building

Prevention

After-the –fact Response

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2004 “The Year of CSR”

1. Enhance observance of the items to be observed:　　 laws, ethics, employment regulations, standards, manuals, rules

2. Expand area of corporate responsibility:　　 As to people, the earth and society, more than “compliance”, 　　　　 activity level from “contribution” to “responsibility”

Enhancement of daily management by managers　　Standardization

Forming Mechanisms

EducationWell-known

DailyManagement

improvement

Most important thing at present;

Clarify the activities and challenge to specific targets set in person.

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Environmental Management

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The life style based on mass production, mass consumption and mass disposal has caused environmental impactexceeding the level tolerable for the global environment.

Social and economic activities are conducted within a scope tolerable for the natural environment and the natural environment of the earth is constantly conserved.

Nature, society, and economy – All in good balance

Out of balance due to social and economic activities

Good balance is recoveredby the recycling society

Aim for an affluent society with good balance between nature, society and economic activity bybuilding up a recycling society and reducing environmental impact.

Affluent Society with Good Balance between Nature, Affluent Society with Good Balance between Nature, Society, and Economic ActivitySociety, and Economic Activity

Three P’s Balance (Planet / People / Profit)Three P’s Balance (Planet / People / Profit)

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1. Not only will we comply with all domestic and overseas environmental regulations, but we will also set our own targets to reduce stress on the environment in consideration of social expectations, and we will endeavor to attain our targets

2. We will strive to promote technological innovation which enables us to attain our targets for reducing stress on the environment and, at the same time, we will continuously maintain and improve our environmental conservation system.

3. In development, design and operation of factory facilities, we will always consider harmonization with the environment, and we will strive to prevent pollution, to utilize energy and resources effectively, and to conduct reduction and responsible disposal of waste.

4. In every stage, from planning, development, design, procurement and production to sales, logistics, use, recycle and disposal, we will offer products and services which have less environmental impact and give consideration to safety.

5. Through environmental education, we will strive to enhance the environmental awareness of all our employees and to enlighten and assist them all so that they develop a social viewpoint that enables them to conduct environmental activities under their own responsibility.

6. In every country and region where we conduct our business, we maintain close ties with the local communities and we will contribute to society by positively releasing information on our activities and assisting environmental conservation activities.

Based on our management principles, we recognize environmental conservation as one of the most important missions given to mankind, and we regard environmental conservation as an important element in all our business activities.

Ricoh General Principles on the Environment

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Concept of Recycle-based Society (Comet CircleTM)

1. 1. Determine and Reduce Environmental Impact at All Stages2. 2. Priority on Inner Loop Recycling3. 3. Promoting a Multitiered Recycling System4. 4. More Economically Rational Recycling5. 5. Partnerships at Every Stage and Share Environmental Information Information

5 Concepts

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Concept of Recycle-based Society (Comet CircleTM)

1. 1. Determine and Reduce Environmental Impact at All Stages2. 2. Priority on Inner Loop Recycling3. 3. Promoting a Multitiered Recycling System4. 4. More Economically Rational Recycling5. 5. Partnerships at Every Stage and Share Environmental InformationInformation

5 Concepts 5 Concepts

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１． Environment Management System２． Environmental Management Information system３． Environmental Education and Awareness Promotion４． Provision of Incentives (Strategic Management by Objectives: SMO)５． Social contribution of Environmental Conservation６． Occupational Health and Safety７． Environmental Communication８． Environmental Accounting

PreventionOf Pollution

EnergyConservation

Infrastructures

ResourceConservation＆ Recycling

Area of Environmental Conservation Activities & Environmental Management System

・ Resource Conservation and Recycling・ Energy Conservation・ Pollution Prevention

・ Products・ Business sites

・ Environmental Technology ・ Daily Management & Continuous Improvement

<Area>

<Subject>

<Activities>

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Basic Stance on Environmental Conservation Activities

Environmental Conservation and the pursuit of Economic Value are goals aimed at in the same direction

Ricoh’s Concept

① Activities for environmental conservation is our mission as a

citizen of the earth

② However, we can not exist long if we do only volunteer activities

without business sense.

③ Both goals can be attained at the same time.

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Passive Passive StageStage

Pro-active Pro-active StageStage

ResponsibleResponsible StageStage

PurposeConcept

Activities

Tool

Outside Pressure・ Regulations・ Competition・ Customers

Mission as a global citizen・ Autonomous responsibility ・ Autonomous planning ・ Autonomous activity

Environmental conservation and profit generation are inseparable for continuance

Passive activities following legal regulations, competition and customers

1.High goals reduce environmental impact proactively2.Raise awareness of all employees

Environmental conservation activities =QCD achievement activityEx) Reduce the number of parts Reduce the number of processes Improve the yield & working rates

1.ISO14000 series2.LCA (Environmental impact information system) 3.Environmental volunteer leader development system

1.Strategic management by objectives2. Environmental accounting

Three Steps toward Environmental Management

Compliance

Program

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Environmental Conservation Activities

Product Planning

Product Design

Production

Sales & Service

Eliminate unnecessaryFunctions

・ Reduction of parts・ Use common parts・ Long life design・ Energy conservation・ Pursuit of easy to use・ Limit using hazardous chemicals

・ Reduce mfg process・ Increase the yield and the rate of operation・ Increase the utilization rate of subsidiary materials・ Zero waste・ Limit using hazardous chemicals

・ Product collection and recycling・ Simple packing and packaging・ Remote diagonal system

Production:R

educing E

nvironmental Im

pact in the L

ife Cycle of th

e Products

　　　

　　　

Pu

rsue econ

omic valu

e and

attainm

ent of

QC

D　　　

　　　

Sustainable M

anagement

DFEPolicy

Simultaneously realizing environmental conservation and profits

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Global Environmental Management SystemThe program and the organization to minimize its environmental

impact in the whole area of Ricoh Group business activities.

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Balanced Score Card

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＜ Top Desire in The 14th Mid-term Environmental Action Plan ＞1. No.1 Environmental Management in responsible stage with planned profit1. No.1 Environmental Management in responsible stage with planned profit2. Distinguished products and business processes with development of environmental 2. Distinguished products and business processes with development of environmental

technologytechnology

＜ Top Desire in The 14th Mid-term Environmental Action Plan ＞1. No.1 Environmental Management in responsible stage with planned profit1. No.1 Environmental Management in responsible stage with planned profit2. Distinguished products and business processes with development of environmental 2. Distinguished products and business processes with development of environmental

technologytechnology

　　 The 14th Middle-term Environmental Action Plan

Products Sites

EnergyConservation

PollutionPrevention

Resource Saving &Recycling

OperationalManagement

2. Improvement of profitability in recycling business and resource efficiency 4. Promotion of green partnership5. Level-up of Environmental Management System 6. Promotion of environmental social contribution

1. Competitiveness through improvement of product performance and promotion of technology development

3. Cost efficiency in environmental activities in offices and production sites

Technology

Daily Management

Technology

Daily Management

Technology

Daily Management

Daily Management

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Environmental activities beyond a company

１． Activities spread out from a company to its employees

families and its partner

２． Activities spread out from a company to communities

３． Activities spread out from a company to many industries

４． Company’s activities shared by country and municipal

government or work together

５． Joint activities with the world

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Ricoh Group Green Partnership

Recycling Companies

Material RecoveryCompanies

Smelters

Government

Enterprises

General Consumers

Material Manufacturer

Parts Manufacturer

Office Furniture & Stationary Manufacture

GreenProcurement

(Purchase)

GreenProcurement

Guidelines

ＲＩＣＯ

ＲＩＣＯ

ＨＨ

ＧＲＯＵ

ＧＲＯＵ

ＰＰ

Green

Mark

eting

Gre

enP

rocu

rem

ent

Gu

idel

ines

Consigned-Recycling

RecyclingReport

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1. Nurturing Environmental Volunteer Leaders 1. Nurturing Environmental Volunteer Leaders = Program =・ Ricoh nature seminars (Introductory / Intermediate)・ Corporate conference for volunteer leaders・ Activities for volunteer leaders

2. 2. Social contribution toward forest preservation・ Meaning of forest preservation in ecosystem・ Preservation of natural forest and restoration activities of community

forest 　 taking consideration of biodiversity・ Partnership with domestic and overseas NPOs

Fund for Afan Forest (C.W.Nicol), Wild Bird Society of Japan 、 WWF, Conservation International, etc

Partnership with NPOs

Environmental Social Contribution

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Ricoh Group Sustainability Report http://www.ricoh.co.jp/ecology/e-/report/index.html

Environmental 　 communication

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4. Obtainment of reliance from society by disclosing information.

2. World No.1 manufacturer through development of technology

3. Improvement of economical value through Sustainable Development activities

1. Strong leadership by top management and participation of all employees

Summary

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Thank you for your kind attention