Corporate Profile

●Corporate Profile Corporate name Konica Corporation ●Message from the President 1 Paid-in capital ¥37,519 million (as of March 31,2003) Founded 1873 ●Business Structure and Products 2 Incorporated 1936 ● Sustainability 3 Stock exchange Tokyo (First Section listing since 1949), Osaka, listings ●Konica & the Environment Nagoya, Frankfurt, Dusseldorf Number of 4,032 (as of March 31, 2003) Environmental Targets and Results 4 employees Head office Global Warming Prevention 6 26-2, Nishi-Shinjuku 1-chome, Shinjuku-ku, Tokyo 163-0512, Japan Zero-Waste Initiatives 8 Branch offices Kansai (Osaka), Sapporo, Tohoku, Nagoya, “3R” Policy 10 Chugoku, Shikoku, Kyushu Industrial centers Tokyo(Hino,Hachioji), Odawara, Kobe, Kofu Management of Chemical Substances 12 Number of 93 (as of March 31,2003) Disclosure and Community Dialogue 14 subsidiaries Environmental Management Systems 16 & Performance Net Sales (Consolidated)

●Konica & Society ¥559,041 million (fiscal year 2002) Stakeholder Relationships 20 17.0% Shareholders/Investors 21 47.6% Customers /Consumers 21 16.4% 41.9% Local Communities 23 52.4% 24.7% Suppliers/Business Partners 24 Employees 24 Share of Consolidated Share of Consolidated Net Sales by Business Net Sales By Region Global Citizenship 27 Photographic materials Japan ●Data Section Business machines North America Europe EcoLeaf Environmental Labeling 28 Asia and others Environmental Accounting 30 Reporting Period Environmental Performance Data 33 Fiscal 2002 ●Konica’s Commitment 36 & Environmental Charter Domestic operations : April 1, 2002 ～ March 31, 2003 ●History of Konica 37 Overseas operations:January 1, 2001～ December 31, 2002

Scope of Report Coverage Konica Group Worldwide ■ Konica Corporation ■ Subsidiaries Photographic materials Business machines 20 domestic subsidiaries 19 domestic subsidiaries 15 overseas subsidiaries 21 overseas subsidiaries (as of March 31, 2003) This report covers the entire Konica Group, including domestic and overseas operations. It focuses mainly on Konica manufacturing facilities, since these have a comparatively higher environmental impact. ●Konica Corporation Industrial Centers Hino Industrial Center in Tokyo/Hachijoji Industrial Center in Tokyo/Odawara Industrial Center/Kobe Industrial Center/Kofu Industrial Center ●Domestic Manufacturing Subsidiaries （Konica Optics Products Corporation (Yamanashi, Kofu), Konica Minolta Supplies Manufacturing Co., Ltd., Konica Technoproducts Corporation (Sayama, Tsuru, Kashima), Konica Chemical Corporation (Fukushima, Notes: 1. The Konica Minolta Group was newly formed upon the integration of Shizuoka), Konica Packaging Co.,Ltd. the operations of Konica Corporation and Minolta Co.,Ltd.and Note:Yamanashi Konica Co., Ltd. and Kofu Konica Co.,Ltd. merged on April 1, 2002, to form the establishment of Konica Minolta Holdings, Inc. on August 5, Konica Optics Products Corporation. 2003.Please visit the following Website for more information. Note: Konica System Equipment Co.,Ltd. and Konica Denshi Co.,Ltd. merged with the device production management operations of Konica Corp. on October 1, 2002, to form Konica http://konicaminolta.net/ Te chnoproducts Corporation. 2. This report is an English-language translation of the Japanese ●Overseas Manufacturing Subsidiaries version of the Konica Group Sustainability Report published in Konica Manufacturing U.S.A., Inc., Konica Supplies Manufacturing U.S.A., Inc., July 2003. Konica Graphic Imaging International, Inc., Konica (Dalian) Co., Ltd., Konica Photochem (Thailand) Co., Ltd. Message from the President

Toward Sustainable Development

The fundamental principle of achieving sustainable development was put forward at the 1992 Earth Summit in Rio, and companies are now being called upon to adopt concrete measures following last year’s Johannesburg Summit. I certainly believe that we must be committed to fulfilling our corporate social responsibilities, in addition to achieving economic growth, to build a sustainable society. Konica is an imaging solutions company, a concept that expresses our desire to provide creative and positive solutions in the field of imaging to create a new world of inspiration. We understand, however, that this vision cannot be realized without fulfilling our responsibilities to society. To be socially responsible means not only to comply with laws and regulations but also to meet our stakeholders’ expectations. I believe that to become a sustainable company we must prove worthy of the longstanding trust of all our stakeholders through our actions. As a manufacturer, we have always been strongly aware of the fact that environmental management of production operations is one of our most critical social responsibilities. From my experience in the management of manufacturing operations, I place importance on the approach of evaluating things by checking the facts on the frontlines. This emphasis also applies to our environmental activities. Our basic stance is that steady progress toward the resolution of environmental issues must be based on quantitative assessment of effectiveness and consequences, and on reliable data. In the fiscal year ended March 2003, detailed data collection and analysis delivered achievements in CO2 reduction, zero-waste initiatives, product lifecycle assessment, and environmental accounting and other activities. The common thread through these activities is“Without measurement, there is no control.”-the newly formulated environmental policy for the Konica Group adopted in April 2003. We are also committed to further enhancing the transparency of our activities to achieve greater corporate accountability. We are thus working to improve the presentation of our activities to stakeholders, by explaining our activities in a concrete and easily understandable manner. For that purpose, we have expanded the sections of our report on social activities and changed the report’s title to the Konica Group Sustainability Report. Your feedback is greatly appreciated and will be reflected in our future activities. July 2003

Fumio Iwai President and Chief Executive Officer 1 Business Structure and Products

A New Group System On April 1, 2003, Konica adopted a holding company structure under which all its businesses were spun-off into wholly owned subsidiaries. The new Konica Group consists of one holding company, four business companies and two common function companies. The Company will strive to maximize overall Group corporate value and fulfill the expectations of its shareholders, customers, suppliers and all stakeholders through clear delineation of responsibility, independent management, flexible organizational administration and speedy decision-making.

Previous Structure New Structure (from April 2003) (Fiscal ▲ 2002) Konica Photo Imaging Corporation Production and sale of cameras, color film, ID photo systems and services, inkjet media, and other items Consumer Imaging Company

Inkjet paper

“Revio KD-510Z” “Konica CENTURIA SUPER 400” digital camera color film

Konica Medical and Graphic Corporation Production and sale of medical and plate-making films, processing equipment, and other items Medical & Graphic Company Business companies

“Digital Konsensus Pro” digital minilab “REGIUS Model 350” 3-D direct digitizer for medical use

K onica Corporation Konica Business Technologies Corporation (holding company) Production and sale of copiers, other office equipment, related consumable supplies and other items

Office Document Company

“Sitios 7145” Polymerized digitalcopier toner

Konica Opto Corporation Production and sale of optical equipment and related devices, electronic materials and other items Optics & EM Technology Company

Double-sided aspherical Microcamera units Camera-lens unit plastic objective lenses

Konica Technology Center Corporation companies Common Research and development; intellectual property administration and services function

Konica Business Expert Corporation

Various management support and back-office functions and services (IT, logistics, environment)

Note: The Konica Minolta Group was newly formed upon the integration of the operations of Konica Corporation and Minolta Co., Ltd. and the establishment of Konica Minolta Holdings, Inc. on August 5, 2003. Please visit the following Website for more information. 2 http://konicaminolta.net / Sustainability

“Toward Sustainable Development”

Agenda 21, adopted at the 1992 Rio Earth Summit, set a new agenda for sustainable development with the strong commitment of industry. Konica understands that the three interdependent and mutually reinforcing pillars of sustainable development are economic development, social development and environmental protection. We have been taking action worldwide to establish these three pillars.

Becoming a Sustainability-Oriented Company

To fulfill our responsibilities as a corporate citizen, Konica is accelerating measures to promote sustainable management. We will formulate an appropriate vision for social activities that balance environmental and economic activities based on compliance-centered management.

Commitment to Sustainability Reporting

Recognizing the need for accountability, Konica has published environmental reports in Japanese and English in previous years. While these have incorporated the “ triple bottom-line” concept described in GRI sustainability guidelines, this year’s report is more oriented toward the concept of sustainable development, including more information on Konica’s involvement in society. This emphasis is reflected in the report’s new title : the Konica Group Sustainability Report.

Reduced Eco-impact Environmental Management Sustainable Company

Environment Environment (Earth) (Earth)

Environment Environmental (Earth) Management Compliance Economy Economy Society (Shareholders (Shareholders (people) / Investors) /Investors)

Tr iple bottom-line

3 Konica環境と & the Keeping Harmony with the Environment Environment Konica is aware that its business activities have an impact on the environment コニカ because they involve using resources and discharging waste. While this cannot be entirely avoided, Konica aims to conduct its business so as to minimize its environmental impact.

Environmental Targets and Results

Results of Fiscal 2002 Environmental Program Item FY 2002 Target FY 2002 Result FY 2002 Topics Complete preparations for Group-wide ISO14001 Unified certification scheduled in Complete preparations certification by end of FY 2002 July 2003 for unified company certification to Create system to promote and implement environmental Consolidated environmental construct systems policies via management of environmental accounting accounting introduced in FY 2002, that enable budgets: including overseas subsidiaries implementation of ・Introduce at all consolidated subsidiaries ・Results disclosed in July 2002 independently verified integrated ・Introduce independent verification systems ・Budget application to facility environmental policies ・Establish systems for results evaluation and Zero Waste investment decision-making procedures investments tested Initiatives Achievement of zero-waste status: Attainment at 4 new sites, Achieve zero-waste status at three new sites, bringing total to 11 sites pp.8–9 Promote zero-waste bringing total to 10 initiatives as part of response to a recycling- Next step at sites that have achieved zero-waste status: oriented society Set and meet targets for minimizing waste All sites engaged in reduction of 3R Policy generated in all processes aggregate site emissions by 30% relative to FY 2000 benchmark pp.10–11

Promote global warming countermeasures: (1) Reduce greenhouse gas emissions by 57,000 tons (1) Reduction of 58,000 tons Global Warming achieved (CO2 equivalents) (2) Plans being adjusted by each Prevention Promote global (2) Revise plan for greenhouse gas emissions business company environmental reductions through FY 2005 pp.6–7 conservation Final water usage reduction target adopted: reduction of water usage Formulate plan to reduce water usage by 20% relative to FY 2002 benchmark by end of FY 2007 Management of Chemical Reduce risks based on Konica Comprehensive ・Use of 1,4-dioxane completely Chemical Substance Safety Management Plan phased out Substances ・Revised master plan formulated pp.12 –13 Subsidiary sites and operations Establish chemical substance handling criteria for Konica inspected by occupational health Disclosure and Group professionals Reduce Community environmental Site report issuance initiated and Dialogue risks Expand issuance of site reports and open dialogue Community Environmental with local communities on environmental risks Dialogue held at Tokyo Industrial pp.14 –15 Center

・Full-scale inspections carried out at all sites where preliminary Formulate response plans and roadmaps for all potentially inspections had identified problems hazardous chemical substances, including past soil ・Manual compiled on the soil survey contaminants process that is required prior to sale of disused laboratory sites Activities ongoing; Konica participated in Japan Green Boost green purchasing of parts and chemicals Procurement Survey Standardization Initiative (JGPSSI) Green purchasing ・Agreed target of total fleet inclusion ratio of 10% by FY2005 (based on Formulate plan for introduction of low-emission vehicles Tokyo government guidelines) ・Target already achieved at five sites

4 Environmental Targets and Results

［Konica Environmental Policy］ The Konica Group aims to promote sustainable development alongside profitable growth. We incorporate environmental, economic and social perspectives into our business strategy. We aim to ensure that all aspects of our business activities are compatible with harmonious co-existence with the environment. Our basic stance is that steady progress toward the resolution of environmental issues must be based on quantitative assessment of effectiveness and consequences, and on reliable data: Without measurement, there is no control. (Excerpted from the Konica Environmental Policy, adopted on April 1, 2003)

In line with ISO14001 (unified certification scheduled in July 2003), the table below includes mid- term targets as well as fiscal 2003 targets.

Fiscal 2003 Environmental Program Item FY 2003 Target Mid-term Target

Ａ． Integrated indicators for economic, environmental Introduce new environmental management indicators FY2004: Introduce sustainable Commitment to the and social effects development indicators Sustainable Development of Use of environmental FY2005: Incorporate performance Set environmental facility investment standards evaluations based on environmental Society accounting as key accounting into business performance evaluation tool evaluation items

Ｂ． Improved accountability Publish Konica Group Sustainability Report FY2005: improve data on social Improve communication with local communities on Promotion of and transparency aspect included in Konica Group environmental risks Sustainability Report Disclosure –Hold community dialogues (two sites); Issue site reports (four sites)

C. Integrated Group implement FY2007: study feasibility of introducing Environmental ation of all environmental Acquisition of single, Group-wide integrated ISO14001 certification an integrated management system for Management measures environment/safety/quality Reductions at business Reduce greenhouse gas emissions at each business company FY2010: lower greenhouse gas D. (Based on LCA calculation) emissions by 6% relative to FY1990 Implementation of companies –Total greenhouse gas emissions: 1,226,000 tons benchmark Global Warming Countermeasures Reductions at individual FY2010: lower greenhouse gas Reduce greenhouse gas emissions (energy used) at each site emissions by 7% relative to FY1990 sites benchmark

Internal emissions trading FY2004: full-scale implementation Conduct trials of internal emissions trading system of internal emissions trading system system

Product life cycle E. Calculate eco-efficiency of major products for each business FY2004: full-scale introduction of assessments (LCA) new eco-efficiency index for products Development and company FY2004: apply eco-design criteria Supply of Set eco-design criteria for major products to all new products Environment Conscious Products FY2005: raise green procurement ratio Green procurement Formulate green procurement guidelines at each business company for manufacturing materials to 100% at each business company

Reduction in water usage FY2007: achieve the water usage F. Formulate plans for reducing water usage reduction target set in FY2003, Commitment to a relative to FY2002 benchmark Recycling-Oriented Achieve Level 1 zero-waste status at all 14 manufacturing sites Society Zero-waste initiatives FY2005: achieve Level 2 zero-waste in Japan status (defined as a 30% reduction in Level 1 status: min. 90% or more recycling rate, 5% or less final all off-site transferred waste, including disposal rate, reduction in external payments of 90% or more, waste recycled off-site, relative to relative to FY1998 FY2001 benchmark)

FY2004: manage soil contamination G. Prevention of soil Compile new guidelines on soil contamination surveys, issues based on guidelines Reduction of contamination and responses Environmental Risks Reduced use of Konica Comprehensive Chemical Substance Safety Management (atmospheric emissions) Plan targets: ・FY2006: dichloromethane: 120 tons potentially hazardous ・FY2005: methanol: 50 tons substances (atmospheric emissions) ・FY2004: N,N-Dimethylformamide ・Dichloromethane: 169 tons zero emissions ・Methanol: 100 tons (usage) N,N-Dimethylformamide: 10.5 tons ・FY2010 : phase-out ・ 1,2-Dichloroetahane (usage) Chloroform ・Benzene: phase out completely ・Formaldehyde: phase out completely ・1,2-Dichloroethane: 8 tons

5 Global Warming Prevention

CO2 Emissions Not Just a Manufacturing Issue

Our aim is to reduce CO2 emissions of Konica products by calculating the amount of these emissions not only at the production stage but also at all other life cycle stages, including the raw material, distribution, use, recycling and disposal stages.

Collection /Recycling R& ■ Reuse The percentage of reusable parts for Konica copier toner cartridges, pictured opposite, is 95.5%. Reuse eliminates all the energy used in the manufacturing stage, yielding significant reductions in CO2 emissions. 【Life-cycle environmental impact reduction 】 ■ Recycling Systems Collection/ [Total CO2 emissions] LCA-based calculations indicate that compact and % 100 Recycling lightweight designs of current SUCs help reduce the environmental impact of reuse/recycling in terms of lower 80 CO 2 emissions. We have 60

reduced the CO 2 emissions 40

of SUCs by about 80% 20 relative to those of the first

0 SUCs launched with no NICE SHOT Goody BEST Goody BEST (1990) (2002) recycling system. assuming a 100% collection rate

Use

■Energy-Saving Designs 【 CO2 emissions due to electric power consumption】 We are developing highly energy- kg 780 efficient products capable of 800 Use 700 delivering the same performance for substantially less power 600 70% less consumed. For example, over the 400 last six years, we have reduced 244 CO2 emissions of our copiers in 200 the use stage by 70%.

0 U-Bix 4345 Sitios 7045 Sitios 7145 ■“Eco-Flash” Units (1996) (2000) (2002) Sitios 7145 Sal Konica cameras feature energy- saving “eco-flash” units. A 50% improvement in battery life translates into higher energy efficiency. Disposal

Genba Kantoku 28WB ECO

【Product Life Cycle Emissions】

■Konica Group CO2 emissions ■Reductions in CO2 emissions We have achieved a reduction of over 58,000 tons (calculated from LCAs for all products) by business company (CO2 equivalent) in greenhouse gas emissions (relative to assumption of no measures applied) against our target of 57,000 tons for fiscal 2002 (this ■Target ■Actual Benchmark reduction is an estimate relative to the projected 1990 Breakdown of FY2002 reduction of 58,349 tons amount of total emissions if no measures had been 1998 Konica Photo Imaging Konica Medical and applied). However, total emissions exceeded our 2000 Corporation Graphic Corporation 2001 target by 49,000 tons due to rising demand for office 17,555 tons 10,587 tons 2002 equipment. We will explore additional measures and

2003 Konica Business Konica Opto redouble our efforts to attain our long-term target Technologies Corporation Corporation of reducing total emissions by 6% relative to the 6% 2010 reduction from 1990 level 26,435 tons 3,772 tons fiscal 1990 level by the end of fiscal 2010. （1000 tons- CO2） 1,000 1,100 1,200 1,300 1,400 1,500

6 Global Warming Prevention

R&D Production

Compact, Lightweight Higher Productivity 【Energy usage and CO2 emissions】 ■ ■ Crude oil CO2 equivalents equivalents (kl) Designs 138,680 140,178 (tons) The Konica Group is working hard to 140,000 134,549 132,175 300,000 Compactness reduces raw 120,000 reduce CO2 emissions by lowering energy 103,493 250,000 materials and improves transport 100,000 consumption at manufacturing facilities. 200,000 efficiency, lowering CO2 80,000 The focus is not just on Japan, but 150,000 emissions. 60,000 100,000 worldwide. Emission volumes are 40,000

measured and compiled for all sites with 20,000 50,000 the aim of achieving significant overall 0 0 1998 1999 2000 2001 2002 &D reductions. Manufacturing facilities (overseas subsidiaries) Manufacturing facilities (domestic subsidiaries) Konica Corporation (head office, branch offices, industrial centers)

CO2 emissions CO2 emissions (including overseas manufacturing subsidiaries) ■Co-Generation Systems We first introduced co-generation systems in 1987, and have since expanded their use substantially. Currently, we have three systems in operation. These systems Production produce electricity and recyclable thermal energy from a single fuel source. This raises energy efficiency and results in significant energy savings.

CO2 emissions vary hugely between life-cycle stages depending on the type of product. For each product, the chart below shows which life-cycle stage is the most important to tackle to reduce emissions most effectively.

【CO2 emissions during product life cycle】 Distribution ■ Materials ■ Production ■ Transport ■ Use ■ Post-use Distribution Color negative film Color photographic paper ■ Modal Shift Color film processing chemicals We aim to reduce CO2 Color film processing equipment emissions by shifting long- Color paper printer processor distance transportation Medical dry film from truck to rail and Medical dry film marine transport. processing equipment Color proofing system les truck Ink-jet paper Central Delivery TAC bases for LCD panels Sales warehouse center Digital copiers Less Packaging Digital cameras ■ shift Film cameras Simplification and the Central Delivery warehouse center Single-use cameras use of returnable boxes truckRail truck Glass lenses for VTRs are helping to reduce the amounts of packaging. Central Delivery CD pick-up plastic lenses warehouse center truckSea truck 0% 20% 40% 60% 80% 100%

【Planned Internal Emissions Trading System】 ■Objective ■ Trading system ■Benefits Konica’s business spans a number of product We plan to use the cap-and-trade system. The ceiling for For trading purposes, CO2 types and business areas. This can translate total reductions is set at 6% below fiscal 1990 levels; each emissions include those derived into a fivefold difference in the cost of effecting business company will be individually assigned an from products over a life cycle a reduction in CO2 emissions of one ton. To emissions ceiling to achieve the overall target. Business and those generated at the promote efficient emission reductions across companies whose total emissions exceed this level can manufacturing stage. This the entire Group, we plan to internally apply buy rights to cover the gap; those with spare emissions creates a clear link between life market principles to enable reductions to be capacity can sell. Emissions will be traded at fixed prices cycle emissions of products and made at the lowest cost. Monetary conversion for the time being, where prices will be determined by the the responsibility of each of amounts of CO2 emissions should also average Konica Group emissions cost based on business company to reduce provide a positive incentive since the value of environmental accounting data. CO2 emissions. We expect this reduction activities is made explicit. We hope 【Cap-and-trade system】 system to encourage greater 250,000 250,000 220,000 170,000 tons tons Emissions: tons tons Trade raises A's that this system will act as a powerful driving emissions limit efforts on many fronts to reduce force for reducing CO2 emissions across the Ceiling: Ceiling: emissions. 200,000 200,000 Konica Group. tons tons Business co. Business co. Business co. Business co. Business co. Business co. A B A B A B Before reductions After reductions After emissions trading A's emissions exceed ceiling Both A and B achieve targets 7 Zero-Waste Initiatives Sustainable Must Also Mean Economical It is this focus on both recycling promotion and cost reduction that ensures the continuation of effective waste reduction activities.

Targets and Activities Achieve Zero-Waste Status at All Domestic Manufacturing Sites by Fiscal 2003

■ Targets ■Key Feature of Zero-Waste Activites Zero-waste activities entail the recycling of wastes generated in Recycling rate 90% or more production processes to minimize amounts sent to landfill for Final 5% or less final disposal. Our belief at Konica is that such processes must be disposal rate economically self-sufficient if they are to be consistently Reduction in external implemented. Spending money on external recycling would not make Cost reduction payments of 90% or more, economic sense in the long run. Realizing both recycling promotion relative to FY1998 and cost reduction by conducting thorough reviews of wastes is the , key feature of the Konica Group s zero-waste activities. ■ Zero-Waste Initiatives Flow Chart ■Production Reforms To achieve recycling and cost reduction targets at the same time, waste management by external subcontractors (off-site recycling) is not enough. Minimizing waste generation before promoting on-site recycling is the most vital step to take. There are a number of Resources Production Products/ activities services measures for reducing costs through zero-waste activities. Zero- waste initiatives are directly linked to production reforms and, No purchase or therefore, are an important element of corporate management. use of unneeded Thorough items waste reduction ■Zero-Waste Initiatives Must be Continuous The most vital step! Possible if Zero-waste initiatives are one of the three core elements of the On-site recycling all employees work together! medium-term environmental plan. Our initial goal is to attain zero-waste status at all our manufacturing sites in Japan by the Reuse inside Konica end of fiscal 2003. However, achieving zero-waste targets is not Off-site recycling Requires Landfill our ultimate goal. Rather, our focus is on continuously ingenuity! disposal maintaining the attained level, one of the most important minimized requirements of our certification system for zero-waste Other Landfill resources initiatives. Daily management of ISO14001 and annual data analysis also help maintain the attained level. In addition, we Resources are recycled are always looking to improve processes and find new methods but at a cost! … of reducing the total amounts of waste generated. We have also now started zero-waste activities at non-manufacturing sites to ●Realize both recycling promotion and cost broaden this approach. reduction by conducting thorough reviews of wastes.

【Promoting Information Sharing 【Amount of Materials Recycled and Sent for Final Disposal】 in Konica Group】 Promotion of materials recycling has resulted in large reductions in waste sent to landfill. ■Amount of waste ■Amount recycled We are compiling a database of waste-related information ■Amount sent for final disposal 1000 tons 100% Materials recycling rate 50% 32.3 92.5% within the Konica Group. Such systems help to ensure the 29.9 30.5 29.9 30 29.3 27.9 27.3 90% proper disposal of Information 25.3 40% shared 23.7 wastes at all times. Zero-waste via e-mail Industrial 21.9 centers / 80% 30% promotion team subsidiaries 20

Search/use Input Information on 70% 20% subcontractors, 10 environmental technology, 60% 10% waste disposal regulation, Final disposal rate 1.38 1.17 0.99 0.57 0.23 0.7% illegal disposal, recycling 0 Database 50% 0% expertise, internal Group 1998 1999 2000 2001 2002 1998 1999 2000 2001 2002 information, and trends Waste sent to landfill from manufacturing sites in fiscal 2002 totaled 230 tons, a year-on-year reduction of about 60%. On-site recycling at other firms initiatives and adoption of new recycling routes helped to increase the recycling rate to 92.5%, 2.8 points higher than in fiscal 2001.

8 Zero-Waste Initiatives

Zero-Waste Status of Manufacturing Sites (Fiscal 2002)

■ Zero-Waste Status Final Cost reduction Recycling rate disposal rate (￥million) Konica Technoproducts Corporation (Sayama) 96％ 3.7％ 21.1 Konica Corporation (Odawara Industrial Center) 92％ 1.8 ％ 22.2 Konica Optics Products Corporation Site achieved status in FY2001 (Kofu) 97％ 0.7％ 6.3 Site achieved status in FY2002 Konica Minolta Supplies Manufacturing Co., Ltd. 98％ 0.5 ％ 84.4 Site not yet at zero-waste status

■ Recycling/ Reuse of Shipping Materials and Tools ■Development of a Closed Solvent Recycling System Konica Technoproducts Corporation (Sayama) Konica Optics Products Corporation (Kofu)

Reuse and recycling of the shipping container materials and tools used Development of a closed recycling system for the solvents used in the to secure machines during transit has resulted in cost savings of over lens-cleaning process significantly reduced unit purchase costs. This ¥15million. Previously, such items were discarded after the installation involved pilot/full-scale testing and comparison of physical of medical equipment. Separately, cooperation between the quality characteristics, and requiring that suppliers of recyclable solvents assurance, development, and meet stricter specifications unique to Konica. This site also succeeded production departments on inspection in finding a new recycling route for methods for processing equipment glass-polishing sludge as a residue have helped to cut the amount of precipitant for use in steel making. The processing effluent per machine by recycling of a previously non-recyclable over 40%. waste reduced recycling costs significantly.

transport fixtures (in red) Lens-cleaning process

■Development of Waste Liquid Reducing Technology ■ Zero-Waste Initiatives via Small Group Activities Konica Corporation (Odawara I.C., now Odawara Site) Konica Minolta Supplies Manufacturing Co., Ltd.

This site manufactures photographic paper and is also one of This site is working to attain zero-waste status by using an approach our bases for collecting and recycling consumable supplies based on the activities of small groups focusing on different for Konica products that have achieved significant cost processes. This approach covers everything from copier toner reductions. In addition, we have successfully developed the production to the drums that contain photosensitive materials and technology to reduce the amount of waste liquids from service engineer maintenance kits. One major success has been the fast-growing ink-jet paper internal recycling of polymerized production by 90%. A technology toner, which has generated annual developed for reducing chlorine savings of about ¥40 million. This concentrations of the waste liquid effect will be multiplied with the start- helps to overcome previous up of polymerized toner production at obstacles to recycling and expands a new plant, with growing demand for recycling applications. this product is increasing. Internal recycling promises to deliver substantial cost savings.

Waste liquid before and after processing New polymerized toner plant

【Off-Site Recycling Costs and On-Site Recycling Profits】 【Systemic Safeguards Against Illegal Dumping】 Various on-site recycling initiatives have generated substantial results. －Industrial waste management at Konica－ Off-site recycling costs and on-site Amount of waste internally recycled recycling profits The Konica Group has integrated management of ￥ millions 1000 tons ■Off-site recycling costs 15 all the information on the external contractors 2,000 ■Profit from off-site recycling ■Profit from on-site recycling hired to transport and process waste, in a move 1,500 to lower both risks and costs. As part of ISO14001 10 systems, our new approach focuses on the 1,000 continuous implementation of four key elements 500 5 throughout the Group: establishing selection

0 criteria for contractors; use of standardized 1998 1999 2000 2001 2002 service contracts; establishment of waste -500 1998 1999 2000 2001 2002 We are reducing waste sent to external subcontractors through on-site recycling. This approach holds down new material management committees; and development of purchasing costs and subcontracting costs. The annual amount of waste recycled on-site totals nearly 12,000 tons. Konica has systems for sharing information. achieved cumulative savings of more than ¥500 million since beginning zero-waste activities.

9 “3R”Policy Reduce, Reuse, Recycle We employ a“3R”approach to steadily reduce environmental impact by recycling resources. Copiers The full array of nearly 500 parts that go into a single Konica Sitios copier is shown fully disassembled below. We can reuse or recycle approximately 92% of them.

■Copier Recycling Line Our copier recycling line is dedicated to the recycling of used copiers. Here, post-use copiers are carefully disassembled by hand one by one to collect parts and materials. These items are either reused in new copiers or recycled into their various

Parts not yet reusable or recyclable shown in detached segment component materials.

■Zero Toner Waste Inside Copiers Konica’s proprietary Toner Recycling System detects any unused toner on the drum, collects it and then returns it automatically to the toner cartridge for reuse. Prior to this Developer Fresh toner innovation, up to 20% of toner Drum cleaner was routinely left unused in the Drum copier, and had to be collected by service personnel during maintenance checks. This Flow of recycled toner system eliminates waste toner on the customer side.

【Increasing Reusable Parts】 【Closed-Loop Materials Recycling】 Years from now, Konica copiers now under The plastic parts in Konica copiers are first development will return to our recycling line pulverized into a fine powder and blended after our customers have finished using with new plastic chips to form new copier them. Based on eco-conscious design parts. This kind of closed-loop materials guidelines developed internally, we are recycling system helps to reduce waste while trying to ensure that greater reusability also helping to conserve natural resources. and recyclability are built into our copiers at the development stage. For example, to facilitate reuse of parts, only motors and other components that may be used in next-generation copiers are certified as “standard reusable parts.”

10 “3R”Policy

Konica Film-In Single-Use Cameras

(SUCs) Although Konica Film-in SUCs are“Single- Supply of film Use”cameras for customers, the fact is that and other parts used SUCs are collected throughout Japan and reappear in new SUCs after undergoing Other Konica , Konica s recycling and reuse system, including procedures such as sorting, separation, Disassembly, inspection, repair, quality testing disassembly and a strict quality check. Konica has been collecting SUCs since 1990 and reformed the recycling system as pictured

Cooperative exchange schemes Recycled Konica SUCs to the left, to reduce their environmental with other makers (quality checked before shipment) impact. The requirements of this system are taken into consideration when developing SUCs, and as a result, the number of reusable parts as a percentage of the total

Collection of Delivery to number of parts is 90% and the recycling rate used SUCs sales outlets is over 98%.

【Structure of Film-in SUCs】

Order prints Purchase Recycled ・ materials

Battery

Receive prints Take pictures Go shopping ・

Reused and repaired Containers components 【Toner cartridge for Sitios copiers】 We also collect, reuse and recycle toner cartridges for copiers, and tablet chemical cartridges for photo-processing equipment.

【Ta blet cartridges for QD-21 automatic processor】

【A Large Increase in Reuse Ratio】【Reusable and Recyclable Designs】

Major achievements of the past decade ■Use of standardized parts include a sharp increase in the reuse Except for the front cover and flash unit, all Konica Goody series of SUCs are made from ratio and a recycling rate of nearly 100% standardized parts. This makes these products substantially easier to reuse and recycle. for collected ■ Reuse and recycling rates ■Materials integration

SUCs. 100% 100% Single-use camera assembly process All plastic parts in our SUCs 80% 80% Main body unit are produced from the same CuCustomerstomer Reusable parts Quality testing Repair Molding plastics Flash unit Retailer 60% 60% type of polystyrene to ease Front cover Repelletized plastics Photofinishers Dealer Recyclable parts Shredding Separation Back cover Separated metals Used material recycling (except the Other Internal use for 40% 40% Konica Corporation companies Rendered harmless / other Batteries Donated externally recycled lens and flash panel). Material Sorting and separation applications 20% 20% Disassembly Cardboard Recycled paper Reuse rate use is standardized as much Recycling rate 0% 0% 19 9 2 1996 1999 2002 as possible.

11 Management of Chemical Substances Responsible Care Policies and Actions Konica acts under the“Responsible Care”principle to promote correct environmental, safety and health measures throughout life-cycles, from development to disposal.

Customer Safety Konica maintains a chemical safety assessment system Exclude Potentially Hazardous Chemicals to ensure that no hazardous or toxic chemicals enter from Products any products. From the dozens of candidates identified as potentially useful for product development, we Materials research Initial product research Product research Pilot plant tests Product development narrow down the selection to the most appropriate Initial stage selection Short-listing to 10 Short-listing to Material selected Mass production candidates max. 2-3 candidates substances, taking into consideration all aspects of Liaison Hazard/toxicity Environmental evaluation sheet assessment each substance, including their legal status and Safety Literature search Screening Confirmation assess- on prohibited/ Main tests environmental impact. We also maintain lists of ments restricted substances tests tests Safety evaluation Performance prohibited (150) and restricted (400) substances to forum evaluation forum screen out chemicals at the R&D stage. All chemicals that are incorporated into products undergo repeated safety checks at each stage, and their usage risk is evaluated in terms of a points score for toxicity and hazardousness so that only the safest chemicals are ever used in products. Konica will minimize the use of potentially harmful chemicals. Chemical safety testing ■Konica photo-chemicals contain no formaldehyde ■ Konica Film-In SUCs are made using lead-free solder or endocrine disruptors.

■Chemical Substance Management Production Throughout Product Life Cycle Air pollution Purchase Planning/ Reduce atmospheric emissions Development of solvents from production Accident prevention Green purchasing Take measures to prevent soil / Product assessments groundwater contamination, Shift to safer fire and other accidents Plan for use of fewer raw materials and safer chemicals by Occupational Health & Safety the Konica Group Protect health and safety of workers

【MSDS and AIS Systems】 【Preparations in Case of 【Management of PCBs】 We supply MSDS (Material Safety Data Transit Accidents】 A fiscal 2001 comprehensive survey of PCB Sheets) to inform customers using chemical Konica uses the yellow card system to management within the Group gathered products about the nature of any hazards or give drivers of trucks carrying chemicals, information on all PCB contaminated toxicity, as well as information on emergency such as photo-processing chemicals, wastes, personnel responsible for PCB measures in case of accidents. For Konica information on the correct waste control, waste equipment category products such as photographic film we emergency responses to and number, and storage and labeling supply AISs (Article Information Sheets). take in the event of status. Any defects found were resolved accidents. The cards also urgently. We are replacing all PCB- list 24-hour help numbers. containing fluorescent light ballasts and storing the replaced items under strict conditions.

12 Management of Chemical Substances

Site Locality Conservation PRTR and Reduced Use of Potentially Hazardous Chemicals

Material Balance of PRTR Substances at The Pollutant Release and Transfer Register (PRTR) Konica Group facilities system legally requires registration and reporting of all amounts of chemical substances with potentially Released into air harmful effects on the 258.7tons 【Air Emissions of Potentially Hazardous environment that are Chemicals】 emitted or transferred off- (tons) Subsidiaries Konica Corp. Recycled 400.0 Processed 26.8tons on-site 214.5tons site as waste material. 350.0 Handled Consumed Konica’s main focus is on 300.0 (products) 2,853.1tons 250.0 1,440.3tons reducing emissions of 200.0 PRTR substances. Released Released Tr ansferred 150.0 into water into soil off-site 100.0 0.1tons 0.0tons 912.1tons 50.0 Please refer to p.35 for more detailed PRTR data. 0.0 1999 2000 2001 2002

[Konica Comprehensive Chemical Substance Safety Management Plan] We have set new reduction targets for fiscal 2003 onwards. ■Reductions in usage ■Reductions in atmospheric emissions

Benzene Complete phase-out Dichloromethane Reduction of 65% by FY2006 Formaldehyde by FY2003 Methanol Reduction of 50% by FY2005 Chloroform Complete phase-out Ethyl acetate Reduction of 23% by FY2006 1,2-Dichloroethane by FY2010 N,N-Dimethylformamide Complete phase-out by FY2004

Note: Targets do not apply to use of these chemicals for testing or Note: All percentage reductions are relative to levels recorded in FY2000. research purposes.

Distribution/Sale Use Recycling / Disposal Yellow card system Supply safe products Prepared with instructions on Exclude potentially handling accidents during hazardous chemicals Recycling transport of chemicals Product data disclosure Develop products with Environmental manuals (MSDS/AIS) higher recycling rates and Information on accurate reduce hazardous waste environmental management Provide customers with at distribution outlets information for safe use

【Reduced On-Site Use of Potentially Hazardous Chemicals】 【Soil/Groundwater Contamination】 Since 1996 we have been eliminating the use of certain chemicals under the Konica Color Imaging is a subsidiary involved in color photo-processing. direction of the Chemical Substance Safety Management Committee. All use The first company within the color minilab industry in Japan to obtain ISO14001 certification, it has accelerated environmental efforts in recent of trichloroethylene and 【Reduction Progress Status】 tetrachloroethylene has Name of substance Progress status years. Use of photo-processing chemicals has prompted the company to been phased out; use Formaldehyde FY2003 phase-out on course undertake soil surveys at various locations, but no contamination has of 1,4-dioxane was 1,4-Dioxane Phased out during FY2002 been found. Similar Survey site Survey date phased out in fiscal 1,2-Dichloroethane Progress according to plan results were obtained Showa Tennenshoku Co.,Ltd. June 2001 Benzene FY2003 phase-out on course Konica Color Imaging (Kumamoto Sales Office) June 2001 2002. by soil surveys conducted Konica Color Imaging (Sakai Sales Office) January 2002 Chloroform Phase-out projected before at Showa Tennenshoku Konica Color Imaging (Toyonaka Sales Office) January 2002 target date (FY2010) Co.,Ltd. and a Konica Konica Color Imaging (Yonago Sales Office) March 2002 Trichloroethylene Phased out during FY1998 Konica Gelatin Corporation site July 2002 Tetrachloroethylene Phased out during FY1999 Gelatin Corp. site. Konica Color Imaging (Okayama Sales Office) October 2002

13 Disclosure and Community Dialogue Building a Stronger Understanding of Konica

Our aim at Konica is for our environmental activities to be transparent both internally and externally to all our stakeholders, including shareholders, investors, community residents, customers and employees.

Environmental Risk Communication Dialogue with Local Communities (Tokyo Industrial Center)

In September 2002, Konica held Ecology Fair 2002 at the Tokyo Industrial Center in Hino City, Tokyo. This environmental forum targeted both local residents and company employees. To help attendees gain an understanding of Konica’s environmental activities, the forum comprised the presentation of a community environmental report, a lecture and an exhibition. A total of 66 non-employees attended the event. All received an environmental site report explaining the site’s environmental impact. The community environmental report presentation covered a wide range of data on the local environmental impact of the Tokyo Industrial Center and discussed related risks. Site managers led a Q&A session that prompted an exchange of opinions. Prof. Itaru Yasui of Tokyo University, whose research specialty is production technology, gave Kiyoshi Sawada, Tokyo Industrial Center General Manager, answers questions the lecture, on the theme of“Thoughts on the Environment Today and ■Event Participants Tomorrow.”The exhibition covered Konica’s eco-product range and Breakdown discussed the uses and hazards of the solvents used at the Hino site. of ■ Local residents participants On-site questionnaires completed before and after the ■ Out-of-town Participants: 66 ■ Public servants presentations showed that some concerns of participants about (19 local 29% Companies ■ chemicals usage at Konica had been allayed, reinforcing our belief in residents) 43% the value of such dialogue. Moving forward, we intend to increase communication with local residents.

14%

14%

【Results of Event Questionnaire】 Q.Are you worried about chemicals emitted by Konica facilities? Extremely worried 2% 0% Before Worried about 15 % 55 % 28% some issues event Don’t know

Few concerns 0% 2% After No concerns at all 16 % 16 % 66% event

Exhibition on the use of chemical substances

【Konica Environmental Report 2002】 【Konica Environment Website】 We published details Environmental Report Details of our environmental activities are on the environmental 2002 published on our website. The latest コニカの impact of the Konica 環境への取り組み Environmental Report and previous issues

地 Group during fiscal 球 are all available for download in PDF format. 環 境 と の 2001 in this report, in 調 The site also contains details about our Type 和 を め both Japanese (July ざ III eco-labels, environmental accounting, and し て 2002) and English Material Safety Data Sheets (MSDS). (September 2002). URL: http://www.konica.jp/global/ ［Web-Based Environmental Support］ We accept and reply to environment-related questions environment/ from customers over the Internet. If you have a specific query, please email us at the following address: [email protected]

14 Disclosure and Community Dialogue

Research into Environmental Site Tours Risk Communication We conduct site tours for local residents, students, public servants, companies and Konica has been studying the 【Environmental Risk Communication at Konica】 other groups, both Japanese and foreign. issue of environmental risk 1999 Research begun by Environment Environment-oriented tours have grown communication with Stakeholders and Safety Dept. popular in recent years. for several years. In 2001, an internal committee was formed 2000 Initial participation in Japan Responsible Care Association dialogue to guide such activities and to

oversee the start of a program of 2001 Internal committee formed to consider events. and discuss issue

2002 Community dialogue included in annual environmental policy review

Community dialogue initiated Environmental Site Reports

Konica has been issuing environmental site reports since 2000, covering topics such as PRTR data and gas emissions, emissions management, water usage, and other environmental impact-related matters.

Excerpted from the 2002 Environmental Report published by Odawara Industrial Center

【Eco-Products 2002 Trade Fair】 【EcoLeaf Environmental Labeling】 We participated in the Eco-Products 2002 trade fair, the We disclose eco-impact data for our products largest event in Japan for eco-conscious products in a using the EcoLeaf labeling system. A total of 21 wide range of fields. The three-day event began on Konica products are now labeled this way, more December 5, 2002, and was held at the Big Site complex than any other manufacturer in Tokyo. Approximately 100,000 people attended the in the world (please refer to event, ranging from schoolchildren to specialists from pages 28 and 29 for more government, academia and industry. We exhibited details on the EcoLeaf Konica copiers, SUCs, ID photo systems, cameras, and system). introduced our zero-waste programs.

15 Environmental Management Systems & Performance

Konica’s ■Environmental Management Systems and Environmental Unified ISO14001 Certification Chartar Overall environmental performance targets for the Konica Group Medium-Term are set and broken down by company and site. Each part of the Environmental Plan Fiscal Environmental Group aims to generate continuous improvements through a Program

“ Plan-Do-Check-Action”activity cycle based on the ISO14001 Environmental Environmental Environmental Report White Paper Policies standard (see diagram). Performance data are compiled annually Environmental Objectives and Targets in the form of an internal white paper and results are presented Annual Management Program Program Company- in annual environmental reports. Wide Review Review Site EMS Supervision Supervision Checking and Konica environmental management and audit procedures are Environmental Corrective Action based on ISO14001, the accepted international standard in Data Report this field. All Konica Group sites worldwide are required to Monthly Check and obtain this certification. Konica sales, logistics and service Analysis affiliates are also working to obtain certification.

Holding company ■ Environmental Organization Chart (As of April 1, 2003) Konica Corp. ●Unified Certification Process President Konica moved to a holding company structure Responsible Care Committee Environmental Audit Committee on April 1, 2003, splitting its business into Director in Charge of Chemical Substance Safety Environmental Activities separate companies. To build a stronger Management Committee Regulatory Compliance Environment, Safety & Committee framework for environmental management QC Department within the new Group structure, we have Waste Committee decided to apply for a single, integrated Business Companies (4) Common function companies Konica Medical Konica Business Konica ISO14001 certification for the entire Group. Konica Photo Konica Opto Konica Business and Technologies Technology Imaging Corp. Corp. Expert Corp. As a first step, we created a new environmental Graphic Corp. Corp. Center Corp. Environment Environment Environment Environment Environment Environment management system including domestic committees committees committees committees committees committees subsidiaries in fiscal 2002, and have been Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates Affiliates operating the system since April 1, 2003.

【Environmental Audits】 Based on the ISO14001 standard, all Konica 【Responsible Care (RC) Committee】 Group manufacturing sites undergo an annual Chaired by the president, this committee oversees site compliance with environmental external environmental audit inspection, as well and safety management systems for OH&S, hygiene, and disaster prevention, based as at least one internal audit. on RC principles.

■Compliance with Laws and ●Decommissioning of Waste ■Incidents, Fines and Regulations Incinerators Complaints Based on the ISO14001 standard, We had established guidelines for incinerator In fiscal 2002, the Konica Group was compliance with environmental laws and decommissioning prior to the enactment of a not levied with any environment-related regulations is strongly entrenched across law in Japan requiring measures to counteract fines. There was one incident at the the Konica Group. Each site is required dioxins. We completed the decommissioning Kobe Industrial Center that involved a to create lists of laws relevant to the of the last of our on-site incinerators in fiscal leak of dichloromethane. A full report environmental aspect of their 2001. The dismantling operations at the Hino was made to the local authorities and a businesses, and we have systems to site in Tokyo in fiscal 2002 involved strict clean-up operation is currently regularly update this information. In measures to prevent dioxin contamination of underway. In terms of complaints from addition, compliance is reviewed the site, in line with legal requirements. local residents, there was one instance periodically through various rigorous of a complaint about noxious odors and checking procedures. Regular meetings Decommissioning two related to noise pollution. In all are held to discuss related legal these cases, the problem has been developments and exchange information. investigated and full explanations made Countries are now moving toward to those who filed the complaints. adopting new legislation to create a more recycling-oriented society and to pursue extended producer responsibility. Konica is ready to respond to new environmental legislation in various countries.

New site, minus incinerator, plus greenery

16 Systems & Performance

■Product Environmental Assessments 【Product Life Cycle and Assessment】 Reduced materials PEA conducted (PEAs) / parts no. Material safety at this stage

At the early planning and design stages, PEAs are used to assess Use of recycled resources the environmental impact of a new product during each stage of its Procurement R&D life cycle- from development, production and distribution to Resource/ customer use, collection, and recycling/disposal. Parts reuse energy conservation Ease of reuse At Konica, we have undertaken PEAs for all products since we /recycling Reuse/ adopted common internal assessment criteria in fiscal 1993. Production Materials recycling recycling information Appropriate labeling These criteria are revised as necessary to keep pace with Appropriate user guide advances in relevant technology. From fiscal 2003, we plan to Ease of disposal / processing Issuance of MSDS Minimal by-products introduce detailed quantitative evaluations of products based /waste on LCA (Life Cycle Assessment) methodology, as part of Disposal Use Logistics /sales Proper transportation ISO14001-based structures adopted in our design and standards development operations. Reduced waste Reduced packaging volume generation Product Resource / Recycling of packaging materials longevity energy conservation More compact products Product safety

■Green Purchasing /Green Procurement

●Green Purchasing ●Green Parts & Raw Materials Procurement

Our purchasing goal is to select those products that exert Green procurement of raw materials and parts for product minimal environmental impact over their entire life cycle. We manufacturing also plays an extremely significant role in have participated in the Green Purchasing Network since its reducing environmental impact. These activities began at inception in 1997, and contributed to its formulation of eco- Konica in 1999 with materials and parts for copier production. purchasing guidelines for Japanese organizations. Our own In both value and volume terms, this outweighs purchasing of eco-purchasing activities now cover items ranging from office office supplies by a factor of ten. Green procurement of parts supplies, office equipment, toilet paper, cars and forklift and materials also plays a vital role in determining the trucks to the paper and inks that we use to produce company environmental performance of Konica products. We are pamphlets. currently engaged in an industry initiative to adopt standardized survey methods for green procurement.

■Employee Environmental Training ■Environmental Technology

●Konica College ●Hierarchical Training Programs In April 1999, Konica created a special Recognizing the need for both specialist New recruits and those promoted to unit dedicated to the development of and general expertise in addressing managerial levels always receive environmental technologies, to play a environmental issues, we established environmental training tailored to their part in creating a recycling-oriented Konica College in 1989 to provide level. In-house experts also regularly society. Achievements to date include environment-related training to our give lectures to different groups of the development of a resin additive employees. In fiscal 2002, besides employees on general environmental made from a by-product generated in a course on raising the profile of topics to promote greater awareness of the manufacture of gelatin, a material environmental issues, we also introduced such issues within the Konica Group. used in photographic film; a technology a new course on the latest environmental ●ISO14001 Training for simultaneously reducing activated information to help people track ISO14001-related employee training sludge and fixating CO2 emissions; and developments in this fast-changing field. focuses on raising environmental technologies for recycling by-products awareness and on helping workers to of production processes. In fiscal 2002, adopt new mindsets and eco-oriented the unit found a way to reduce the activities into their daily routines, to aid amount of waste liquid generated (see achievement of performance targets. p.9). A current focus is on ways to cut VOC emissions.

17 ■Environmental Education and Awareness Programs

●Environment Lectures ●Konica Environmental Awards while also promoting exchange of Environment lectures delivered by experts Initiated in 1996, Konica Environmental environment-related information. (from both inside and outside the Awards are presented to Konica Group company) in a specific field have been employees worldwide for achievements in an annual Konica Group tradition since four categories: management, products, 1992, the aim being to share knowledge technology, and other contributions to as widely as possible. Prof. Yasui of environmental efforts. In fiscal 2002, seven To kyo University, who conducts research project awards were presented to groups in the field of production technology, and individuals, bringing the cumulative gave the 11th lecture in 2002, entitled total to 61 awards. Award recipients give “Thoughts on the Environment Today and talks on their projects, helping to raise Konica Environmental Awards ceremony Tomorrow.” We have also decided to internal awareness of environmental issues open these lectures to the public in 【7th Konica Environmental Awards (Fiscal 2002)】 future. Environmental management awards Increased efficiency via integration of Business Support Division, Konica Corp. EMS across industrial centers Environmental management at KSMA Konica Supplies Manufacturing U.S.A., Inc. (KSMA) Creation/implementation of reuse system for copier bodies OD Company, Konica Corp. Environmental product awards

Development of full line-up of energy-efficient monochrome OD Company, Konica Corp. copiers (Sitios Net Pro series, launched in FY2001) Environmental technology awards

Mass-production component mounting using lead-free solder , Konica Denshi Co., Ltd. (now Konica Technoproducts Corp.) (Konica s first mass-production prototype)

Biodegradable bleach technology CI Company, Konica Corp. Environmental contribution awards Consistent and dedicated efforts to promoting energy- Mr. Nobuyuki Furuyo, CI Company, Konica Corp. Prof. Itaru Yasui (Production Technology Research, and water-saving activities Tokyo University)

, ●Testimonial ●Environmental Awareness via ●Children s Eco-Club Exhibition In an expression of gratitude for his Internal Publications In March 2003, the Odawara Industrial unceasing efforts before he retired as As part of a campaign to heighten Center opened a booth at the Eco-Club general manager of the Odawara environmental awareness among Konica Exhibition for children held in a park close Industrial Center, Mr. Haruhiko Sato Group employees, in fiscal 2001 an to the Odawara castle, a Japanese historic was presented with an award by internal publication carried a special site. The booth featured a number of Director Takeo Koitabashi, who is in series of articles on companies and the games and amusing exhibits, such as charge of environmental activities. environment. In fiscal 2002, the same spinning tops made out of toothpicks and , Under Mr. Sato s leadership, the magazine featured zero-waste initiatives, recycled plastic lids (from film cylinders). Odawara site won numerous plaudits the rise of eco-consumerism, sustainable for its success in reducing energy/water development, and the Konica Ecology consumption, cutting waste, contributing Fair 2002. to the local community, and for improving environmental disclosure.

Internal publication featuring zero-waste initiatives

18 Systems & Performance

■External Awards

● Awards Date Activity recognized by award Recipient Name of award Awarding entity awarded Creation of eco-symbiotic Konica Odawara 4th Japan Water Japan Water facility by effective use of Industrial Center Management Awards Management Awards May 2002 water resources (Commendation) & Honors Committee FY 2002 Ministerial Award Model plant for Konica Odawara for Excellence in Plant Minister of Economy, February energy management Industrial Center Energy Management Trade and Industry 2003 (Thermal section)

Sustained achievement and Mr. Nobuyuki Furuyo, FY 2002 Bureau Chief Kanto February merit in promotion of energy Konica Odawara Award for Excellence Bureau of Economy, 2003 management Industrial Center in Energy Management Trade and Industry Excellence in Energy Management Award

● Reduction in Water Consumption at Odawara Industrial Center

【Commendation Received at 4th Japan 【Downward Trend in Water Usage (per-unit consumption)】 Water Management Awards】 （t /m2） Consistent efforts to reduce consumption 0.014 and to reclaim water have had a substantial cumulative effect since 1990, resulting in a 0.013 1Heat pumps installed 50% fall by fiscal 2002 in the amount of water used per unit manufactured, and in 0.012 4Thermal recycling of heated wastewater the absolute amount of water used (relative to fiscal 1990). In recognition, the site 0.011 received a commendation at the 4th Japan 5 0.01 Use of outside air Water Management Awards. for cooling in winter 2Two-stage Over the same ten-year period, the site use of cooling 0.009 water has cut the amount of wastewater discharged from air-conditioning systems 3Reuse of Target 0.008 heated trend line into the Sakawa River, an important local wastewater water source, by about 80%, despite 0.007 increased production volumes. Also, by reducing water use by more than 60% 0.006 6Demand below its annual water-drawing quota set monitoring system by the city of Odawara, the site has 0.005 contributed significantly to local conservation efforts. Finally, the site has 0 also pioneered ways of conserving 90 91 92 93 94 95 96 97 98 99 00 01 02 groundwater by reusing hot wastewater from cooling towers, an approach that promises to be widely applicable to other industrial facilities. 【Participation in 3rd World Water Forum】 Followingthe receipt of this award for 【Water Consumption Comparison】 water management, we were selected from among many companies, NGOs and 1990 (before 1,250 800 700 1,742 other organizations to be one of the few improvements) 200 0 poster exhibition participants at the 3rd 2001 100 (after 400 500 942 World Water Forum that was held in improvements) Kyoto. 0 500 1,0001,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 tons/day Cooling water for freezer condensers Cooling water for on-site power generation

Cleaning water Cooling water for compressors

Other (boiler, purified and drinking water)

19 Konica & Keeping Harmony with Stakeholders Society As a member of society, Konica’s ongoing existence naturally relies on the support of all its stakeholders. For this reason, we believe that achieving sustainability depends on earning the longstanding trust of these various groups of people. To this end, we undertake various activities to build stakeholder relationships.

Stakeholder Relationships At Konica, we divide stakeholders into six principal groups, as illustrated below. This section outlines some of our activities directed at these different groups. Since the“global citizenship”category represents a broad cross- section of public opinion around the world, we include NGOs, public servants and the mass media within this category.

Disaster prevention / emergency responses, Global environment / community cultural culture /education/ activities sports activities p. 23 p. 27

Purchasing and materials Customer support, procurement Local Global Quality Management, communities citizenship p.17, 24 universal-use design p. 21 Suppliers/ Customers/ business Konica consumers partners

Employees Shareholders/ investors

Personnel systems, Shareholder value, HR development / transparency, training, OH&S risks p. 24 p. 21

■ Compliance Committees In April 2003, we established Compliance Committees at each business 【Compliance committee structures】 company to oversee compliance with laws and regulations. Reporting Oversight Additionally, Konica is creating a reporting framework where Audit Committee Holding company (independent) Konica Corp. employees can report non-compliance directly to senior management. Compliance Committee (holding company) Employees can report on illegal or unethical conduct to the Compliance Two common Four business companies function companies Committee of their respective business companies via internal email. Konica Konica Konica Konica Konica Kon ica Photo Medical and Business Opto Te chnology Business These reports are forwarded to the employee’s respective business Imaging Graphic Technologies Corp. Center Expert Corp. Corp. Corp. Corp. Corp. company president and the Compliance Committee of the holding Compliance Compliance Compliance Compliance Compliance Compliance Committee Committee Committee Committee Committee Committee company. Konica also has a framework in place for employees to Employees Employees Employees Employees Employees Employees directly report illegal acts by senior management to the Audit Report Committee, which solely comprises members from outside Konica.

20 Konica & Society

Shareholders/Investors

Aiming to Maximize Shareholder Value The Konica Group places great importance on investor relations (IR). We make consistent efforts to ensure frequent and timely disclosure of all relevant information so that investors can gain a good understanding of all our activities.

Konica Group IR site : URL http://www.konica.jp/corporate /investor/

Customers /Consumers

Increasing Customer Satisfaction: Trust is Key to a“Good Company” It is the customers who buy our products and services that support Konica’s existence. Hence, we believe it is vital to create greater customer satisfaction by answering the needs and queries of our customers.

■Customer Support

We maintain various channels to answer Customer support site : URL We regard photographs as important, customer inquiries on Konica Group http://www.konica.jp/support/ intimate records of personal moments products and activities. in people’s lives. We therefore try to ●Website Support answer all inquiries politely and The Konica website has a special discretely, as quickly as possible. If we Customer Support section. Besides all receive a complaint from a customer, inquiries about products, services and we follow up with a CS survey to repairs, this section offers an updated provide feedback on whether or not our list of FAQs and access to software service was satisfactory. Konica is downloads and product catalogs. We constructing an internal information- respect and protect the privacy of all sharing system to rapidly process personal information supplied by customer inquiries. customers. The main website at www.konica.jp and all other Konica Customer satisfaction Group websites incorporate the latest (CS) survey security features to ensure that consumer privacy is respected and that all data is handled correctly. Proportion (%) who responded“ Yes” ●Customer Call Center ％ 94 We also operate a dedicated Customer 100 88 93 90 Call Center to answer inquiries about all 80 60 Konica products designed for personal 40 use. In fiscal 2002, we received a total 20 of approximately 9,500 inquiries (14% 0 less than in fiscal 2001). 1999 2000 2001 2002

21 ■ Quality Management

We maintain strict quality management ●Quality Assurance and Audit Systems 【感・動・創・造 】 systems to ensure that customers can feel We aim to match international standards Good Company confident about all Konica products and with our quality assurance and audit Strategic policy management services. We also undertake TQM (Total systems. All Konica Group manufacturing Quality Management) programs to improve sites and subsidiaries worldwide are Quality circles our business structure so that we can required to obtain ISO9001 certification deliver more attractive products and as a matter of basic policy. Our sales, Functional-level management satisfying quality. service and distribution facilities are also New product CS QA development ES progressively gaining ISO certification. (Customer (Employee ISO9000-series Certification Satisfaction) Product liability Environment Satisfaction) Status for Konica Group ●TQM at Konica & Safety QC training Other (cumulative) The TQM philosophy, which seeks continual improvement in the quality of The TQM Concept 30 ■ Manufacturing 【 】 ■ Sales /service 25 products, people, operations and The Konic a vision of being a “Good 25 23 23 21 management, is a key focus. TQM is built Company” rests on the pillars of 20 tifications r on three main elements: QA, strategic strategic policy management and quality

ce 15 policy management, and quality circles. circles. This is underpinned by a base of

SO 10

I functional-level management, incorporating Managers, auditors and workers all of 5 2 . elements that target customer and

No 0 cooperate to participate in quality employee satisfaction, such as quality and 1992 1999 2000 2001 2002 assurance programs. cost issues. ■ Universal-Use Design

Universal-use design aims to make ●Copiers products easily usable by as many people The control panel interface features a paper trays offer the same convenience. as possible, irrespective of age, gender or universal-use design that provides barrier- Also, the raised hash marks on the physical ability. This is an important design free access from a sitting position. With operation panel assist visually impaired concept that we aim to incorporate into all slots on the top and bottom, the universal users. Konica products. 【Sitios 7145】 ●Film-In SUCs The Goody series of Konica SUCs feature a large shutter button that is easy to press. Use of gray for the flash switch, wind-on knob and exposure counter provide increased contrast with the black body, making the camera easier to operate.

【Konica MiNi WaiWai Wide-Shot】

Control panel interface based on universal-use design

Raised hash marks aid visually impaired users

Flash switch Shutter button

Paper trays with slots on the top and bottom

22 Konica & Society

Local communities

■ Dialogue Each Konica Group site works to maintain Chemical), hold regular meetings with local can be rapidly distributed from site open channels of communication with the groups. These meetings are aimed at general managers to heads of local local community, including regular providing information on matters of organizations via the General Affairs meetings with local groups, site tours and concern, such as site works, environmental Section. other events. Each General Affairs measures, disaster responses, and new ●Community Environmental Section also plays the vital role of product introductions. Diague maintaining local community contacts. ●Community Contact Network A special event was held in Tokyo in ●Meetings with Local Groups/ Due to their close proximity to residential September 2002 to try to deepen Organizations areas, the industrial centers in Tokyo communication with local communities Various Konica Group sites, notably in maintain local telephone contact networks on environmental issues. This event is Tokyo, Odawara, and Fukushima (Konica to facilitate communication. Information described in greater detail on p.14. ■ Fire-Fighting Training

●Fire-Fighting Training In March 2003, the Hino Fire Dept. and ●Disaster/Emergency Besides evacuation drills, Konica also the Konica fire-fighting squad at this site Response Capabilities trains internal fire-fighting squads held a large-scale joint exercise as part In the event of any unprecedented disaster such as a major earthquake, we at various sites to increase safety of regular spring disaster prevention stand ready to help local services and preparedness for emergencies. drills. A local Konica manager assumed authorities to lead recovery efforts. At 【Internal fire-fighting squad achievements】 leadership of the Hino Fire Dept. for the two sites in Tokyo, we have agreed to Training inspection Konica fire-fighting day to give morale an extra lift. Sep. conducted by Hino squad (Hino) supply local communities with drinking 2002 Fire Dept.: 1st place 【Tokyo Industrial Center sites】 water and shelter. In 2003, we also (Group A from Konica) Designation Plans call for the Hino site to agreed to let the Hino site be designated Training inspection Konica fire-fighting as an emergency be used as an evacuation a local evacuation area. Sep. conducted by Hachioji squad (Hachioji) evacuation area area in case of emergency 2002 Fire Dept.: 3rd place (agreement with Hino City /Feb. 2003).

Cooperation on Plans call for well water used the supply of by the site to be supplied locally in an emergency water from site (agreement concluded with well Hachioji City in March 1996).

Loan of welfare Company facilities (gym, facilities accommodation, etc.) can be loaned in an emergency if the local community makes a request. Signing ceremony for cooperative support agreement in emergencies (Hiromichi Baba, mayor of Hino City (right) and Kiyoshi Sawada, G.M., Business Support Joint training exercise with Hino Fire Dept. Center) ■Other Local Community Activities

●Locality Clean-Up Programs ●Local Festivals ●Sports & Cultural Events Besides daily site cleaning activities, Different sites in Japan hold their own We actively support local culture and we also organize special clean-up days festivals, often in conjunction with local sports. Many Konica Group sites provide at sites once or twice a year, in which residents. These events provide a good personnel to teach occasionally at local all employees typically participate. opportunity for Konica Group personnel photography clubs and for related groups. Workers at the Odawara site also have to participate in local communities and Sites also lend facilities to local sports the opportunity to take part in voluntary build better relations. groups, or for exhibitions. activities to help keep the local Sakawa River clean.

23 Suppliers/Business Partners

The supply and procurement activities of Konica Code of Practice (excerpt) the Konica Group cover suppliers all ＜Relationships with Suppliers＞ around the world. To help maintain the 1 High transparency for all supply and procurement, irrespective of supplier high quality and safety of all our products nationality. and services, we place great emphasis 2 Strict ban on any inappropriate transactions that take undue advantage of a dominant position. 3 No actions toward subcontractors such as invoice non-acceptance, payment delays or on maintaining strong and ethical price cuts. relations with all of our suppliers, 4 Strict ban on illegal acts such as resale price maintenance, trade restraints or monopolistic pursuant to our Code of Practice. actions. 5 Forbearance concerning supplier-related expenses that breach social or international norms. 6 Fo r more information on green purchasing and Strict non-solicitation of entertainment, and non-acceptance if social norms would be breached. procurement, please see p.17. 7 No personal investment in suppliers by employees (though participation in IPOs is permitted). 8 Strict ban on borrowing of money from suppliers by employees for personal use.

Employees

■ Personnel Systems

Personnel System Reform ●Compensation System ●Vacation and Leave System Reflecting performance and ability, the The goal of the personnel system reforms Marriage, compassionate leave, that were initiated in April 2002 is to compensation system provides strong Special occupational injury, accident, ensure that all employees feel motivated personal incentives while retaining enough leave-of- pre-natal, post-natal, maternity, absence creative leave, annual leave flexibility to cope with the diversifying to tackle challenging goals, so that carryover system employees and the company can grow values of employees. Individuals can Extended Childcare, based on personal choose their career track and are paid together. We aim to create new structures leave-of- responsibility, that will draw out the most from our accordingly. Different career tracks have absence voluntary leave system employees, thus enabling the diverse and varying performance-pay elements. The ●Support After Leaving the Company evolving demands of both business and system encourages employees to be Retiree Partnership System of people to be met. bold and not to fear failure. It also aims to 【 】 give employees greater responsibility Konica employees who reach normal and authority. retirement age may apply to continue The Triangle of Motivation 【 】 working if they wish to do so via re-hiring We believe that the right balance between ●Evaluation System and re-assignment. Company approval is “job,”“evaluation and remuneration”and Performance is reviewed on an individual required. “responsibility and authority,”combined basis for a certain position over a fixed with one's choice and approval of each Outplacement Program period of time, and the results lead to the 【 】 factor, maximizes the motivation to work. development of more demanding goals Besides making them eligible for long- for the next stage of a career. Evaluation service awards, Konica provides financial criteria and processes are fully disclosed and other support to long-term employees Job (themes/ to employees, with bosses providing who have reached a certain age, including job category/ feedback and assessments to their outplacement support or help in setting up workplace) subordinates, typically every six months. in business after retirement from the We also make every effort to train company. evaluators to help make the process ・Outplacement preparatory leave Evaluation Responsibility more meaningful, fair and objective. & & ・Training support payments Equal Opportunity Employment Remuneration Authority ● ・Special compassionate allowance (pay/evaluation (position/powers) systems) Part of“Konica’s Commitment”is to respect all employees. Our aim is for the company to respect each employee as a Personal choice and approval partner on equal terms. This partly involves creating a good working environment- one in which sexual harassment does not occur, where freedom of speech is protected, and where people are happy to work.

24 Konica & Society

■ HR Development/ Training

Konica’s aim is to nurture employees ●Hierarchical Training prosper amid fierce competition. who are self-reliant. 【New Employee Training】 【Engineer Forum】 Introductory training courses cover all the This forum provides a way for engineers Self- Reliant People basics of working at Konica. New to sharpen their skills as they take on employees receive front-line experience in the challenge of creating the various Konica’s personnel various areas, including production, sales, dream-inspiring technologies that will policy technology and intellectual property infuse the next generation of Konica products. (1) through field studies and other programs. Self-actualization plus company 【Career & Challenge Course】 development A course provided for mid-career (2) employees, to help them form a clear Self-responsibility plus a spirit vision for their careers and to upgrade of challenge existing skills. (3) 【Hierarchical Training Courses】 Fair/meaningful evaluation and compensation Skills knowledge and other functional training courses are tailored to different levels of the management hierarchy. 【Training Systems】 Environmental and compliance training ●Konica College Based on personal responsibility, are common elements of all training The annual curriculum includes On-the-Job Development programs for employees. approximately 90 lectures, attended by is conducted. ●Selective Training & Development over 3,000 people. Various specialist Manager/ workplace 【Konica Business Leaders Program】 courses target R&D, production, and sales This program aims to train the next personnel and others. The college also OJD ・On-the-job, task- generation of Konica business leaders, to runs a major web-based self-study oriented training cultivate the skills and character needed to program known as the Konica Distance ・Objectives shared with employees respond to rapid change, develop new Learning System (KDLS). business models and help Konica to →Fo r more information on environmental education at Konica College, please see p.17. Skills 【Skills Development Programs (Off-JD)】 Individual Development Programs Category Core aim Content Self- Off-site job Role fulfillment, Training for new employees and various advancement development Hierarchical training self-actualization managerial levels ・Self-motivated career ・Gaining knowledge, and skill development skills; mutual Development of Business Leaders Program, Engineer Training sharpening of skills Selective training ・Individual goal setting next generation Forum, global personnel development ・Building motivation/ opportunities for OJD Development of Courses targeting sales, production, R&D and Konica College other staff; common courses; management Based on personal responsibility specialist skills courses, etc. Self-reflection, Seminars targeting employees aged 47, 55 and Life planning career and post- 59 years retirement planning Company-wide Increased employee Quality management and environmental training knowledge base management, corporate ethics, etc. Group management Stronger Konica Training for middle/junior Konica Group managers, support Group management including all affiliated companies; basic management skill base training; young leadership, etc.

■ Occupational Health & Safety (OH&S)

●Management Structure functional control of environmental and 【Qualified Occupational Health Personnel (Konica Corp.)】 Each Konica Group site has set up its safety management issues, including Industrial Responsible for workplaces physicians and operations management : 1 own OH&S committee to oversee various OH&S and disaster prevention, in line goal-oriented improvement processes. with RC principles. Health managers : 5 Discussion and management of Mental health managers: 2 common issues that affect the entire In July 2001, Konica’s Tokyo Industrial Nurses 6 (5 with OH qualifications) Center created a single group of Group are handled by a central OH&S managers 100 committee chaired by the director specialist staff to oversee OH&S and Besides health checks, industrial w ith environmental and safety disaster prevention issues. This move physicians give training lectures on OH&S responsibilities. This committee promises to lead to improved ways of issues, inspect sites to review chemical reports to the Responsible Care (RC) managing safety issues at other sites management methods, provide guidance Committee, which is chaired by the within the Konica Group via cross- on chemical handling, and are members president. This structure gives cross- functional support. of the central OH&S committee.

25 ●Three-Pronged Approach to 【Three-Pronged Approach to Occupational Health】 Occupational Health Aim: To prevent environmental deterioration at workplaces and to protect the health of workers. Chemicals play a major role at Konica. We have therefore adopted a three-pronged approach to OH focused on the health Working environment Work management Health of employees. management management Prevention of hazard Health of employees monitored 【Working Environment Management】 Working environment occurrence; management through check-ups; study links Organic solvents are the main type of measurement of operational methods/ between health and operations chemicals used in production processes procedures, etc. (correct staff placements) within the Konica Group. We are working

to ensure ever-lower ambient examinations. Any such workers who 【Daily changes in worker exposure levels to solvents】

concentrations of such solvents and record more than 80 hours per month of ppm other chemicals in working environments, overtime are also checked to prevent 150 in part through periodic environmental problems caused by overwork.

measurement. 100 【Work Management】 In fiscal 2000 we established strict internal 50 rules for handling chemical substances. These standards are part of an integrated Group-wide management system with the 0 time 01 44 10 27 22 05 31 10 19 48 48 14 36 53 ： ： ： ： ： ： ： ： ： ： ： 8：5 7 8： 9： 12 11 12 12 13 16 14 15 14 10 following three main objectives: 10 1）Risk assessment of all chemicals prior to use 2）Common chemical usage status/management 2）Survey of the effectiveness of 3）Safety data stored in environmental database protective equipment Substances that exceed specific hazard or All employees underwent a fitting test to toxicity standards are designated “Konica Mental health care guidebook check that protective masks provided an controlled substances. Any on-site published by Konica ” airtight seal. Urine tests to determine handling of the approximately 450 Konica Employees’mental health has also become a solvent concentrations conducted around controlled substances requires the use of key issue in recent years. Clinical experts in the same time were also used to provide yellow labels. The handling of mental health have made on-site visits on a individual feedback to workers on the each specific compound is weekly basis since 1999. We also hold effectiveness of protective masks. covered by a specific MSDS. regular mental health seminars aimed at 3）Overall OH&S risk evaluations based those in managerial positions. In July 2002, on assessment of risk levels we created a company guidebook on this Assessments of individual hazard and issue and distributed it to all employees. All exposure levels were used to classify sites house a wide variety of sports facilities workers by health risk. This level of risk to promote the health of all site workers. was then used to formulate OH&S ●Health Risk Evaluation Due to management guidelines to improve Organic Solvent Use worker safety. We initiated OH&S risk evaluations in fiscal ●OH&S Training 2001 to determine health risks posed by We conduct regular OH&S training chemicals and to plan OH&S counter- sessions, mainly for production staff, to measures. Industrial physicians led a prevent industrial accidents. research project in 2001 and 2002 to evaluate the impact of chemicals use. We have since instituted three measures, in cooperation with Prof. Shigeru Tanaka

Material Safety Data Sheet (MSDS) (Jumonji Women’s University), the Industrial Health Association, the Keio Since 1999, one key research topic has University School of Medicine (Public been the effectiveness of protective gloves, Health Dept.), and chemical firm Sanko masks and related items, undertaken with Co., Ltd. Prof. Shigeru Tanaka (Jumonji Women’s 1）Survey of organic solvent exposure levels University, now Kitasato Univ.). We monitor This project measured daily variations in the on-site use of protective equipment closely. exposure levels of workers handling organic O H&S training session 【Health Management】 solvents. Operations where exposure All employees receive a health check-up spiked were identified and measures once a year. Workers who handle organic were taken to lower ambient solvent solvents are given specific health concentrations.

26 Konica & Society

Global Citizenship

■ Environment ●Konica Charity Photo Contest ●Sakawa River Conservation ●Support for Mt. Fuji National Trust Japan’s national bird, the crane, was on the Conference The Mt. Fuji National Trust is a project to verge of extinction after habitat loss This conference was established in 1960 make the rocky southeastern slopes of to conserve the aquatic environment and severely reduced its numbers. In 1987, a Japan’s most famous mountain greener. preserve the water quality of the Sakawa, Japanese ornithological group established Konica’s internal labor union has a sanctuary for the species in Hokkaido. At an important regional river that flows near participated in this project since 2000, the same time, Konica began participating our Odawara Industrial Center. Chaired planting various trees halfway up the in charity events to help save the crane. by the mayor of Odawara, the conference peak in 2001. Konica Corp. has also Our main contribution is to organize an assembles over 100 local municipal, made financial donations to the cause. annual charity photograph contest, based corporate, fishing and agricultural around the general theme of nature. This organizations in a variety of activities to ●Official Supplier to 2002 Johannesburg Summit provides people with a chance to contribute clean up the river, monitor water quality, ITEC, Konica’s sales agent in South to conservation and sponsor training and educational Africa, was chosen as the official supplier while enjoying programs. A Konica representative of digital copiers and fax machines to the photography. currently holds the group’s vice- chairmanship. We also sponsor a family- Earth Summit held in Johannesburg in oriented photography August-September 2002. class aimed at raising awareness of the need to preserve water quality.

■ Cultural & Educational Activities

●Konica Gallery (British Museum) ●Konica Image Science Promotion ●Konica Youth Summit Scholarship In recognition of the help we supplied in Foundation In an annual tradition, we invite high constructing the Japan section at the The foundation works to promote school students from North Carolina to British Museum in London, part of it photography by funding research into Japan on a cultural exchange. In 2002, was dedicated as the Konica Gallery. image science, and by giving awards six students On display are a number of examples of to up-and-coming photographers. enjoyed a home Japanese arts and crafts, as well as ●Donation of Commemorative stay in Japan, other historical exhibits. Graduation Photographs which included ●Konica Plaza In a project with educational authorities a visit to Kyoto. The Konica Plaza is a permanent exhibition that in the city of Qingzhou, China ●“Dreams & Science 21” aims to introduce the wondrous beauty of (Shandong Province), since 2000 we Summer Show photography to as have distributed free graduation This was a special event held at the wide an audience photographs to over 6,500 school pupils. National Museum of Emerging Science as possible. and Innovation in Tokyo in August 2002 that let elementary and middle school pupils experience the wonders of science. Konica contributed a section on URL the properties of sunlight and the http://www.konica.jp/corporate/culture/ principles of photographic color film. plaza/index.html Children also had the opportunity to experiment with self-made pinhole cameras. ■ Sports

●Konica Track & Field Team medal in the Atlanta Olympics and then The Konica Track & Field Team is our won silver four years later in Sydney. We major contribution to the area of sports. also sponsor an annual training class on The team won the traditional New Year jogging to promote links between the Ekiden relay race from Hakone to Tokyo team and amateur runners. Station for the third year running in early URL 2003. Another team member, Eric http://www.konica.jp/corporate/culture/ Wainaina of Kenya, gained a bronze athlete/index.html

27 EcoLeaf Environmental Labeling

■ Disclosure of Product Information

●World-Leading Tally of 23 EcoLeaf Label Products 【Konica Products with EcoLeaf Labeling】 Digital copiers Registration No. Registration date Konica has adopted the JEMAI“EcoLeaf”labeling system to 1 Sitios 7085 AA-03-015 April 1, 2003 2 Sitios 7085 HV AA-03-016 April 1, 2003 identify products whose life-cycle environmental impact has 3 Sitios7165 AA-03-013 January 21, 2003 been assessed quantitatively. LCA methodology determines 4 Sitios7155 AA-03-014 January 21, 2003 impact, from resource extraction for parts and materials to 5 Sitios7145 AA-02-011 November 18, 2002 6 Sitios7045 AA-02-001 July 8, 2002 distribution, customer use, disposal and recycling. We must also 7 Sitios7035 AA-02-006 September 9, 2002 disclose this data to customers to gain the label for a product. 8 Sitios7135 AA-02-007 September 9, 2002 Single-use cameras (Konica MiNi series) Registration No. Registration date High objectivity and transparency mark this system as an 9 Goody 800 (27 exp.) AC-02-017 March 24, 2003 international pioneer in eco-labeling. Konica was the first 10 Goody 800 (40 exp.) AC-02-018 March 24, 2003 manufacturer to obtain this label, in July 2002, for digital copier 11 NEO SUPER (27 exp.) AC-02-015 February 14, 2003 12 NEO SUPER (40 exp.) AC-02-016 February 14, 2003 and single-use camera models (later, for a film camera). As of 13 Goody BEST (27 exp.) AC-02-001 July 8, 2002 July 2003, Konica boasts a world-leading tally of 21 products 14 Goody BEST (40 exp.) AC-02-002 July 8, 2002 15 NEO ps 800 (12 exp.) AC-02-003 September 9, 2002 that carry the EcoLeaf label. 16 NEO ps 800 (27 exp.) AC-02-004 September 9, 2002 17 NEO ps 800 (40 exp.) AC-02-005 September 9, 2002 ●JEMAI System Certification Obtained by Copier 18 Wai-Wai Wide (27 exp.) AC-02-006 September 9, 2002 Operations 19 Goody (27 exp.) AC-02-012 September 9, 2002 , 20 Goody (40 exp.) AC-02-013 September 9, 2002 In September 2002, Konica s Office Document Company Cameras Registration No. Registration date (now Konica Business Technologies) obtained“System 21 HEXAR RF AE-02-003 January 29, 2003

Certification”from JEMAI for its copier operations. 22 Genba Kantoku Zoom (with auto date) AE-02-002 November 14, 2002 23 Genba Kantoku Zoom AE-02-001 September 9, 2002

, The“System Certification”authorizes the company s

internal operational system for label publication (data collection/processing, verification, and registration/publication systems) and it ensures the reliability, speed and economy of data disclosure with the EcoLeaf label.

Ecoleaf level for camera“HEXAR RF” Ecoleaf level for single-use camera“Wai-Wai Wide (27exp.)”

28 ●Product Environmental Information Essential product information including a summary of life-cycle environmental impacts.

●Product Environmental Information Data Sheet (PEIDS) All aspects of life-cycle environmental impact information in numeric values.

●Product Data Sheet Base information for LCA results on PEIDS.

Eco-Leaf labels are classified as Type III eco-labels. For more information about Konica eco-labeling: URL http://www.konica.jp/global/environment/ For more information about the EcoLeaf labeling system information: (Japan Environmental Management Association for Industry) URL http://www.jemai.or.jp/

29 Environment al Accounting

■ Policy Environmental accounting has been used at Konica since 1999 to improve business transparency and support environmental initiatives. The main focus has been on consolidated implementation, management utility, and improving the calculation of environmental effects. After Konica Group integration via ISO14001 certification, plans call for this system to be a key means of continuous improvement from fiscal 2003 onward.

■ Overview of Environmental Accounting in Fiscal 2002 (1) Scope of consolidation The environmental accounts include all Konica Group affiliates in which Konica is a majority shareholder (20 domestic subsidiaries and 13 overseas subsidiaries), but exclude companies whose eco-impact or environmental costs are immaterial. Appointment of environmental accounting personnel at each company ensures data accurately reflect frontline operations. System efficiency is aided by setting qualifying criteria for costs / investments / effects.

(2) Management utility Accounting procedures are developed internally, based on environmental accounting guidelines issued by the Japanese Ministry of the Environment in 2002. Separate teams verify data collected for activities across the Konica Group, divided into the three areas of global warming prevention, recycling-oriented initiatives, and chemicals management.

(3) Calculation of environmental effects: advantages of Konica’s environmental accounting system The major advantage of Konica’s system is the close links it establishes between environmental activities and effects. This enables simple compilation of data on individual measures at the affiliate, business company or consolidated levels, in terms of effects per unit of cost or investment, or in terms of eco-efficiency. System features that permit such linkage are: (1) Calculation of investments, costs and effects for an environmental activity once specified in detail; (2) Evaluation of environmental actions in monetary terms wherever possible, which equates to reduced eco-impact with a corresponding “risk reduction”; (3) Calculation of “planned effects”- to estimate the effects of new products or facilities over a five-year post-introduction period (previously three years) to make the calculation consistent with Konica's management plan. We also use an environmental budgeting system as part of environmental management within the Konica Group.

【Scope of environmental accounting consolidation (fiscal 2002)】

Konica Corporation Domestic subsidiaries Overseas subsidiaries

Konica Marketing Corporation Konica Meditech Service Corporation Konica Europe GmbH Konica Color Imaging Corporation Konica Repro Co., Ltd. Konica Business Machines Deutschland GmbH Konica Packaging Co.,Ltd. Konica Business Machines Japan Konica France S.A.S. Co., Ltd. Konica Chemical Corporation Konica Bureautique S.A.S. Konica Technoproducts Corporation Konica ID Imaging Co., Ltd. Konica UK Ltd. Konica Minolta Supplies Manufacturing Nihon ID System Co., Ltd. Co., Ltd. Konica Business Machines (U.K.) Ltd. Konica Service Co., Ltd. Konica Opto Products Corporation Konica (Dalian) Co., Ltd. Konica Medical Inc. Konica Engineering Co., Ltd. Konica Photo Imaging, U.S.A.,Inc. Kyoritsu Medical Co., Ltd. Konica Logistics Co., Ltd. Konica Medical Imaging Inc. Konica Graphic Imaging Japan Konica Sogo Service Co., Ltd. Konica Manufacturing U.S.A., Inc. Co., Ltd. Konica Information Systems Co., Ltd. Konica Graphic Imaging International, Inc. Konica Business Technologies, U.S.A.,Inc. Konica Supplies Manufacturing U.S.A., Inc.

■ Future Developments Our aim at Konica has been to use environmental accounting to improve disclosure about environmental activities. In line with our new focus on sustainable development, we plan to upgrade the system further to make specific improvements. First, we plan to set new criteria for capital investments and new product development to enable environmental accounting considerations to aid decision making in these areas. Second, we plan to use environmental accounting to evaluate the benefits of environmental activities carried out at each division, as an incentive to higher performance.

30 ■Fiscal 2002 Environmental Accounting Report

●Fiscal 2002 Environmental Accounts Summary Unit: Millions of yen Economic effect Category Investments Expenses FY2002 improvements Planned effects*1 1 Business area cost 2,620 4,947 7,701 1,193 1）Pollution prevention 792 1,952 26 27 (1) Atmospheric pollution prevention 541 883 20 20 (2) Water pollution prevention 125 509 2 7 (3) Soil contamination prevention 74 38 0 0 (4) Noise pollution prevention 11 13 0 0 (5) Vibration pollution prevention 0 6 0 0 Breakdown (6) Odor pollution prevention 5 1 0 0 (7) Ground sinkage prevention 0 1 0 0 (8) Other 36 501 4 0 2）Global warming prevention and energy conservation 655 818 73 374 3）Resource circulation 1,173 2,177 7,601 791 (1) Efficient utilization of resources 27 89 335 13 (2) Water conservation 9 15 42 202 (3) On-site processing industrial waste 1,011 888 5,278 576 (4) Off-site processing industrial waste 125 1,070 1,940 0 (5) Other 0 115 6 0 2 Upstream / downstream cost 3 3,290 3,027 499 3 Administration costs 10 753 0 0 4 R&D costs 24 1,984 518 3,211 5 Social activity costs 0 175 0 0 6 Environmental remediation cost 29 24 0 0 7 Others 0 12 0 0 To t a l 2,686 11,185 11,246 4,903

●Environmental Effects (fiscal 2002 accounts) 【Ef fects associated with business area and upstream/downstream costs】【Effects associated with R&D costs】 Item 2002 Item Planned effects*1 Produc Reduced water consumption 261,778 tons -tion Reduced use of hazardous substances 1,574 tons

Production Reduced electric power consumption 63,850 MWH Reduced NOx/SOx emissions 4,464 Kg

Reduced municipal gas usage 1,417,000 m3 Usage Reduced electric power consumption 62,713 MWH Reduced heavy oil usage 306 KL Lower replacement frequency due to higher durability (material weight conversion) 302 tons Reduced material usage 839 tons 【Effects associated with R&D costs】 Units: Millions of yen External recycling/reuse of wastes 17,375 tons Item 2002 Planned effects*1

Sales Reduced packaging/container usage 212 tons Customer Reduced power consumption 24 1,129 benefits Recycling/reuse of post-use products Higher durability and extended 2,368 tons product life 1,680 14,296

●Risk-reduction effects*2 (fiscal 2002)

Item Usage reduction Risk reduction (tons) (¥ millions)

Global warming prevention Reduced CO2 emissions 58,300 583 Risk associated with chemical use Reduced use of hazardous substances 158 458

*1 Planned effects: Estimated effects of improvements due to newly developed products and capital investments based on initially planned production volumes. *2 Risk-reduction effects: Assessed economic value of future projected environmental-impact reductions due to pollution prevention activities undertaken in the period under review pursuant to internal standards based on Environmental Accounting Guidebook II, the Ministry of the Environment of Japan, March 2001.

31 Environmental Accounting

■Comparison of Fiscal 2002 Unit: Millions of yen Environmental Accounting Budget Result Category Budgeting and Results Investments Expenses Investments Expenses

Spending was largely in line with the amounts 1 Business area cost 2,820 4,217 2,619 4,810 budgeted, with savings in some areas offsetting 1）Pollution prevention 483 1,806 792 1,945 increases in others. Zero-waste status at (1) Atmospheric pollution prevention 31 521 541 877 various sites is beginning to have an impact. (2) Water pollution prevention 255 559 125 509 Global warming and pollution prevention (3) Soil contamination prevention 60 38 74 38 investments increased. Konica plans to (4) Noise pollution prevention 27 49 11 13 increase the use of budgeting to implement (5) Vibration pollution prevention 0 7 0 6 Breakdown effective environmental activities. (6) Odor pollution prevention 73 3 5 1 (7) Ground sinkage prevention 0 1 0 1 (8) Other 36 628 36 499 2）Global warming prevention and energy conservation 413 420 653 784 3）Resource circulation 1,924 1,990 1,173 2,081 (1) Efficient utilization of resources 1,287 772 27 89 (2) Water conservation 8 14 9 14 (3) On-site processing industrial waste 603 665 1,011 888 (4) Off-site processing industrial waste 0 313 125 974 (5) Other 26 226 0 115 2 Upstream /downstream cost 29 2,782 3 2,776 3 Administration costs 43 1,208 10 683 4 R&D costs 0 2,294 24 1,984 5 Social activity costs 0 6 0 174 6 Environmental remediation cost 0 10 29 23 7 Others 0 0 0 12 Tot a l 2,892 10,517 2,684 10,462

Note: The scope of data collation for results has been adjusted to accord with that used during budget compilation.

■Fiscal 2003 Environmental Unit: Millions of yen Accounting Budget Category Investments Expenses

1 Business area cost 1,592 3,739 1）Pollution prevention 824 2,197 (1) Atmospheric pollution prevention 321 1,110 (2) Water pollution prevention 119 521 (3) Soil contamination prevention 57 28 (4) Noise pollution prevention 53 17 (5) Vibration pollution prevention 0 3 Breakdown (6) Odor pollution prevention 14 3 (7) Ground sinkage prevention 0 2 (8) Other 259 512 2）Global warming prevention and energy conservation 476 606 3）Resource circulation 292 935 (1) Efficient utilization of resources 31 63 (2) Water conservation 78 19 (3) On-site processing industrial waste 173 390 (4) Off-site processing industrial waste 10 406 (5) Other 0 57 2 Upstream /downstream cost 2 1,897 3 Administration costs 7 860 4 R&D costs 0 2,874 5 Social activity costs 0 182 6 Environmental remediation cost 0 24 7 Others 0 10 Tot a l 1,601 9,585

Note: Excludes figures for overseas Konica Group companies.

32 Environmental Performance Data

Data Coverage Environmental data is collected in the Konica Corporation Domestic subsidiaries Overseas subsidiaries Manuf.sites Other sites categories indicated in the table. In a Head office Branchoffices Industrial centers Manuf.sites Other sites Energy number of instances, problems with the Water use Water consistency of measurement methods or COD discharges SOx emissions units can make it difficult to disclose Air Particulate emissions certain data. We plan to progressively NOx emissions increase disclosure to include the entire Waste PRTR Konica Group, using the structure provided Occupational Occupational accident: frequency health and by unified Group ISO14001 certification. safety Occupational accident: severity

data covered not covered not applicable

■Aggregate Resource Inputs and Outputs

INPUT OUTPUT

Natural and Electricity CO2 Waste water other gases 215,356 MHW 267,800 tons 4,591,000 m3 65,508,000 m3 Konica

Heavy oil Groundwater COD Waste sent to landfill

15,177KL 4,481,000 m3 15 tons 230 tons (Japan only) (Japan only)

■Energy The increase in energy usage across the Konica Group in fiscal Group manufacturing sites are calculated based on actual 2002 was due to a large increase in production at the Kobe energy consumption data. Industrial Center (Konica Corp.) and to the start of full-scale Use of more energy-efficient co-generation systems powered manufacturing operations at a new plant in the Kofu Industrial by natural and other gases, or heavy oil partially reduced energy Center. Energy consumption was actually reduced at most sites. use from grid electricity.

Including overseas companies, CO2 emissions from Konica

Manufacturing facility energy usage and CO2 emissions Breakdown of Energy Use in Fiscal 2002

Crude oil CO2 equivalents 0.7％ equivalents (kl) 138,680 140,178 (tons) 140,000 134,549 132,175 300,000

120,000 10.9％ 250,000 103,493 100,000 200,000 Natural and other gases 80,000 Electricity 150,000 47.7％ 60,000 Heavy oil 100,000 40,000 40.7％ Other 20,000 50,000

0 0 1998 1999 2000 2001 2002 Manufacturing facilities (overseas subsidiaries) Manufacturing facilities (domestic subsidiaries) Konica Corporation (head office, branch offices, industrial centers)

CO2 emissions CO2 emissions (including overseas manufacturing subsidiaries)

33 Environmental Accounting

■Water

Higher production levels at the industrial centers in Kobe The figures on COD discharges have been expanded since and Kofu pushed up water consumption at Konica fiscal 2000 to include public sewage system data from Corporation in fiscal 2002, but this was more than offset by domestic manufacturing subsidiaries. We are taking savings elsewhere in the Konica Group. measures to make steady reductions in the volume of wastewater discharged and to lower COD concentrations.

Water Use COD (Chemical Oxygen Demand) Discharges

(1000m3) (tons) 7,000 6,498 6,295 25.0 22.7 6,000 5,877 5,676 5,412 20.0 19.9 19.6 20.0 5,000 14.9 4,000 15.0

3,000 10.0 2,000 5.0 1,000

0 0.0 1998 1999 2000 2001 2002 1998 1999 2000 2001 2002 Overseas manufacturing subsidiaries Domestic manufacturing subsidiaries Domestic manufacturing subsidiaries Konica Corporation industrial centers Konica Corporation industrial centers

■Air

The data on atmospheric emissions (SOx/NOx/particulates) within acceptable thresholds. Particulate emissions declined have been expanded to include the fiscal 2001/2002 figures steadily, from 17 tons to 13 tons, during 1996-1999, mainly for domestic manufacturing affiliates. SOx and NOx due to waste incinerator decommissioning and the emissions have been mostly flat over the past few years, installation of bag filter systems, but have since flattened out.

SOx (sulfur oxides) emissions NOx (nitrogen oxides) emissions Particulate emissions

(tons) (tons) (tons) 450 16.0 15.0 20.0 14.7 399 394 400 14.0 369 359 12.9 344 350 12.0 15.0 10.5 300 13.0 10.0 9.8 250 8.0 10.0 200 8.0 7.9 6.0 7.4 150 7.1 4.0 100 5.0 2.0 50 0.0 0 0.0 1998 1999 2000 2001 2002 1998 1999 2000 2001 2002 1998 1999 2000 2001 2002 Domestic manufacturing subsidiaries Domestic manufacturing subsidiaries Domestic manufacturing subsidiaries Konica Corporation industrial centers Konica Corporation industrial centers Konica Corporation industrial centers

■Waste Waste (tons) The total amount of waste sent to landfill for final disposal 35,000 32,344 29,296 29,854 30,434 29,911 halved again in fiscal 2002 for the second consecutive year, 30,000 27,905 27,447 （92.5%） falling to 230 tons. The recycling rate rose to 92.5% due to 25,000 （90%） 21,811 23,662 25,211 increased on-site recycling, the development of new 20,000 （78%） （81%） （84%） recycling alternatives. This demonstrates steady progress 15,000 with zero-waste activities. Further details can be found on 10,000 pp. 8-9. 5,000 1,395 1,168 1,047 568 230 （5%） （4%） （4%） （2%） （1%） 0

1998 1999 2000 2001 2002

Domestic manufacturing subsidiaries Konica Corporation Industrial Centers Recycled amount (recycling rate) Final disposal amount (final disposal rate)

34 ■Pollutant Release and Transfer Register (PRTR)

Fiscal 2002 /Konica Corporation and domestic subsidiaries (tons) PRTR Amount Emission amount Amount Amount Amount transferred outside ordinance Chemical substance handled used in treated internally Recycled No. Air Water Soil products (incinerated/decomposed) Waste* Sewage 4 Ethyl acrylate 6.2 0.0 0.0 0.0 6.0 0.0 0.1 0.0 0.0 12 Acetonitrile 332.2 5.7 0.0 0.0 0.0 46.6 269.9 0.0 10.1 15 Aniline 7.4 0.0 0.0 0.0 0.0 0.0 7.4 0.0 0.0 43 Ethylene glycol 3.6 0.0 0.0 0.0 3.6 0.0 0.0 0.0 0.0 45 Ethylene glycol monomethyl ether 8.2 0.0 0.0 0.0 3.3 0.0 4.9 0.0 0.0 46 Ethylenediamine 2.1 0.0 0.0 0.0 2.1 0.0 0.0 0.0 0.0 63 Xylene 29.8 0.8 0.0 0.0 0.0 9.7 19.4 0.0 0.0 64 Silver compounds 697.3 0.0 0.0 0.0 678.5 0.0 9.1 0.0 9.7 65 Glyoxal 1.7 0.0 0.0 0.0 1.7 0.0 0.0 0.0 0.0 95 Chloroform 48.3 8.5 0.0 0.0 0.0 28.3 11.5 0.0 0.0 113 1,4-Dioxane 25.4 0.0 0.0 0.0 0.0 0.0 25.4 0.0 0.0 116 1, 2- Dichloroethane 12.7 3.7 0.0 0.0 7.5 0.0 1.5 0.0 0.0 117 1,1-Dichloroethylene 10.7 0.0 0.0 0.0 10.7 0.0 0.0 0.0 0.0 139 o-Dichlorobenzene 1.0 0.0 0.0 0.0 0.0 0.0 1.0 0.0 0.0 145 Dichloromethane 372.8 221.4 0.0 0.0 7.8 1.5 142.2 0.0 0.0 172 N, N- Dimethylformamide 318.3 5.3 0.0 0.0 1.1 86.2 225.3 0.0 0.0 177 Styrene 554.3 2.4 0.0 0.0 549.0 0.0 2.7 0.2 0.0 212 2,4,6-Trichloro -1,3,5-triazine 18.9 0.0 0.0 0.0 18.9 0.0 0.0 0.0 0.0 (cyanuric chloride)

227 To l uene 210.7 10.4 0.0 0.0 0.0 36.5 163.8 0.1 0.0 230 Lead and its compounds 2.9 0.0 0.0 0.0 1.2 0.0 0.0 0.0 1.7 232 Nickel compounds 5.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 5.4 243 Barium iodide 8.6 0.0 0.0 0.0 3.0 0.0 5.5 0.0 0.0 254 Hydroquinone 23.4 0.0 0.0 0.0 20.7 0.0 2.7 0.0 0.0 259 Pyridine 19.4 0.0 0.0 0.0 2.6 3.6 13.2 0.0 0.0 266 Phenol 2.9 0.0 0.0 0.0 0.2 0.0 2.7 0.0 0.0 270 Dibutyl phthalate 12.1 0.0 0.0 0.0 11.6 0.4 0.1 0.0 0.0 272 Bis (2-ethylhexyl) phthalate 36.4 0.0 0.0 0.0 34.5 1.3 0.7 0.0 0.0 299 Benzene 1.4 0.1 0.0 0.0 0.0 0.0 1.3 0.0 0.0 304 Boron and its compounds 1.4 0.0 0.1 0.0 1.2 0.0 0.0 0.1 0.0 310 Formaldehyde 2.1 0.2 0.0 0.0 1.7 0.2 0.0 0.0 0.0 313 Maleic anhydride 6.3 0.0 0.0 0.0 6.3 0.0 0.0 0.0 0.0 314 Methacrylic acid 50.5 0.0 0.0 0.0 50.4 0.0 0.1 0.1 0.0 316 2,3-Epoxypropyl methacrylate 20.4 0.1 0.0 0.0 19.7 0.0 0.6 0.0 0.0 320 Methyl methacrylate 8.8 0.2 0.0 0.0 7.7 0.0 0.9 0.0 0.0

Note: PRTR Law provisions require that any recycling of PRTR-specified substances be counted as waste disposal, unless the substance is sold commercially.

■ Occupational Health and Safety Occupational health and safety data uses indicators adopted by the Japan Responsible Care Council.

Occupational accident frequency rate Occupational accident severity rate

0.012 0.30 0.011 Number of people injured 0.27 0.25 Frequency rate＝ 0.25 0.010 Millions of hours worked

0.20 0.008 0.006 0.15 0.13 0.13 0.006 Working days lost 0.10 0.004 Severity rate＝ 0.05 0.002 0.002 Thousands of hours worked 0.001 0.00 0.00 0.000 0.000 1998 1999 2000 2001 2002 1998 1999 2000 2001 2002

35 Konica’s Commitment & Environmental Charter

Amid a globalizing business environment, Konica recognizes that clear ethical Konica’s Commitment principles and values must underpin all its activities as an international firm. This stance ensures Konica takes responsibility for its actions, works to promote greater Adopted October 1, 1997 ethicality and transparency in its operations, and maintains a harmonious coexistence with local communities. By respecting these corporate principles of action, Konica hopes to impress all its stakeholders.

Product usefulness Konica shall develop products and services that are of use to society and that will sufficiently 1 and safety take into account safety considerations.

Fairness and transparency Konica shall adhere to the principle of self-responsibility and carry out corporate activities in a fair and transparent manner with due regard to laws and standards of behavior expected 2 of corporate activities by society.

Environmental Konica shall proactively and voluntarily take into consideration environmental issues in 3 conservation its corporate activities in recognition of the fact that they are integral to those activities.

Information disclosure Konica shall disclose to society at large in a timely and appropriate manner information 4 concerning its corporate activities.

Konica shall contribute to society as a responsible corporate citizen by obeying the cultures Social contribution 5 and customs of the regions in which it operates.

Konica shall create a safe and enjoyable working environment that is conducive to work, Respect for employees and nurture and encourage employees to demonstrate their full potential by respecting 6 their individuality.

Preservation of the global environment is one of the most important management Konica’s policies for Konica Corporation. Through environmental, health and safety management, Environmental Charter Konica's commitment goes beyond assuring compliance with environmental laws and Adopted October 1, 1997 Revised May 1, 1995 regulations. Konica is in harmony with the global environment, in all aspects of corporate business management, by making the“Responsible Care”principle a priority, by promoting environmental awareness and participation of employees, and by clarifying environmental policy and commitment to environmental protection.

Products and Services Throughout all stages, from design and production to sales, use and disposal, Konica's products 1 and services shall reflect a strong commitment to environmental, health and safety needs.

Resource and Energy Konica shall strive to conserve resources and energy by promoting recovery and recycling of packaging materials and used products, and by minimizing the consumption of raw materials 2 Conservation and energy.

Developing New Konica shall conduct ongoing research into the environmental, health and safety impact of Knowledge and our products, manufacturing processes and waste products, and shall strive to develop new 3 Technology knowledge and technology to respond to environmental, health and safety concerns.

4 New Business Environmental, health and safety issues shall be given high priority in planning new business.

International Business Environmental, health and safety protection for the nations concerned shall be taken into account 5 in international business, international technology transfer and international trade of chemicals.

Business activities shall be managed with a high priority given to the environment, health and safety of Consideration of Local the local communities. Efforts shall be made to communicate with the local communities to gain their 6 Communities understanding and develop their confidence in Konic a’s environmental, health and safety activities.

Konica shall provide its employees with information and education relevant to their environment, Provision of Information health and safety. Konica shall also provide consumers, government authorities and local 7 communities with information on Konica's efforts to protect their environment, health and safety.

36 History of Konica

Environment Corporate /Product

●Establishment ●Establishment of Konishi College of Photography (now Tokyo Institute of Polytechnics) ●Establishment of Konishiroku Honten Co., Ltd. ●Company name changed to Konishiroku Photo Industry Co., Ltd. ●Company awarded Deming Prize ●Tachibana Hozenkai Foundation established (now Konica Image ●Plant-based environmental project department and management Science Promotion Foundation) committees formed ●Environment Management Department formed at head office ●Internal Environmental Management Standards established ●World-first launch of minilab fitted with a processing system that requires no washing ●First co-generation system installed at Hino Plant ●Konica’s first single-use camera goes on sale ●Aid provided to protect the natural habitat of the Japanese crane ●Company name changed to Konica Corporation; all brands united under started Konica name ●Konica College established; courses on environmental safety initiated ●Konica’s Environmental Policy formulated and adopted ●Konica Gallery opens in the British Museum, London ●Issuance of MSDS to N. American subsidiaries started ●Konica Youth Summit travel scholarships introduced ●Konica awarded Special Corporate Prize for its contributions to culture ●Environmental Protection Center established in North America and the arts ●A Konica copier becomes the first in the world to receive German Blue Angel Mark designation for copiers ● First Environment Lecture event held ●Establishment of Chemical Substance Safety Committee; safety assessment systems initiated ●Product Environmental Assessments introduced ●Use of CFCs as cleaning agents completely phased out within Konica Group ●World-first launch of minilab employing a tablet chemicals replenishment ●First (internal) environmental audits carried out system ●Konica joins the Responsible Care initiative; internal RC Committee established

●Konica joins the Green Purchasing Network ●Konica employee Eric Wainaina (Kenya) wins bronze medal in the men’s ●First soil contamination survey conducted marathon at Atlanta Olympics ●1st Konica Environmental Awards ceremony held ●Hino Plant awarded Deming Executing Prize for 1996 ●Hachioji Industrial Center in Tokyo becomes the first of Konica's domestic manufacturing sites to obtain ISO14001 certification ●Konica awarded 6th Earth Environment Grand Prize from Science and Technology Agency ●Established the Life Cycle Assessment Committee ●Use of trichloroethylene completely phased out within Konica Group ●Issuance of inaugural environmental report honored with 2nd Environment Action Plan award

●Use of tetrachloroethylene completely phased out within Konica Group ●First Eco-Flash units fitted to Konica cameras ●Konica digital copiers receive their first Eco Mark designation in Japan ●Business alliance agreement signed with Minolta, focusing on business machines area ●Konica adopts Type III eco-labels ●Eric Wainaina wins a silver medal in the men’s marathon ●First environmental accounting report published (for FY1999) at Sydney Olympics ●Odawara Industrial Center becomes first Konica Group site to issue ●Konica wins first Japan Quality Recognition Award and Recognition of a site environmental report TQM Achievement ●Yamanashi Konica becomes first Konica Group site to achieve zero-waste ●Konica Track & Field Team wins the 45th New Year’s All Japan Team status Ekiden Race ●World-first launch of biodegradable bleach for use in minilab processing

●Odawara Industrial Center receives commendation at 4th Japan Water ●Konica Track & Field Team wins New Year’s Ekiden Race for Management Awards second year in a row ● First-ever EcoLeaf labels awarded in Japan to Konica digital copier, ●First launch in Japan of SUCs made using lead-free solder SUC and camera models ●Use of formaldehyde in minilab processing chemicals phased out completely ●First dialogue with local community held at Tokyo Industrial Center ●EcoLeaf eco-labeling system of Konica copier operations certified by JEMAI

●Odawara Industrial Center receives Ministerial Award for Excellence in ●Konica Track & Field Team wins New Year’s Ekiden Race for Plant Energy Management third successive year Odawara Industrial Center participates in poster session at 3rd World ● ●Konica and Minolta conclude merger agreement Water Forum

Konica Group Please direct any inquiries or comments to: Sustainability Report ●Konica Minolta Holdings, Inc. ●Konica Minolta Business Expert, Inc. Corporate Communications Quality & Environmental Management Division 2003 1-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo No.1 Sakura-machi, Hino-shi, Tokyo 191-8511, Japan Published : September 2003 100-8211, Japan Facsimile: +81-(0)-42-589-8071 E-mail: [email protected] Next issue scheduled for Phone: +81-(0)-3-6250-2100 publication in mid-2004 Facsimile: +81-(0)-3-3218-1368 E-mail: [email protected] Note: Following the planned integration of Konica and Minolta in August 2003, this report will cover Website: http://konicaminolta.net/ the Konica-Minolta Group, starting in 2004. This report is an English-language translation of the Japanese version of the Konica Group Sustainability Report published in July 2003. 37 E0307GSO This Sustainability Report was printed with soy ink on 100% recycled paper.