Environment, Progress Report. Health,andSafety

Transcription

1 Environment, Progress Report Health,andSafety 23

2 Contents Corporate Environmental, Health, and Safety Policy 1 To Our Stakeholders A Message from the Chairman and Chief Executive Officer 2 About This Report For More Information 3 Executive Summary 22 Highlights 4 Company Profile Xerox at a Glance 5 Policy, Goals, and Strategy Integrating Environmental, Health, and Safety Considerations into Xerox Business 1 Waste-Free Products Sustainable Design 18 Translating Policy Into Practice Waste-Free Product Showcase 2 Accessible Products Designing for Universal Use 21 Waste-Free Facilities An Ongoing Commitment 27 Environmental Remediation Compliance Penalties 28 Employee Well-Being Health and Safety at Xerox 32 Employee and Community Involvement Partnerships for Progress Xerox Corporation is committed to the protection of the environment and the health and safety of its employees, customers, and neighbors. This commitment is applied worldwide. The following principles shall govern all business practices in the design, manufacture, procurement, marketing, distribution, maintenance, reuse/recycling, and disposal of products and related services: Protection of the environment and the health and safety of Xerox employees, customers, and neighbors from unacceptable risks takes priority over economic considerations and will not be compromised. Xerox operations must be conducted in a manner that safeguards health, protects the environment, conserves valuable materials and resources, and minimizes risk of asset losses. Xerox is committed to designing, manufacturing, distributing, and marketing products and processes to optimize resource utilization and minimize environmental impact. All Xerox operations and products are, at a minimum, in full compliance with applicable governmental requirements and Xerox standards. Xerox is dedicated to continuous improvement of its performance in environment, health, and safety.

3 I believe passionately that good citizenship is good business. It s good for our communities, good for our people... and, ultimately, good for Xerox. For more than 4 years, Xerox has adhered to a set of core values that include succeeding through satisfied customers, valuing our employees, and behaving responsibly as a corporate citizen. These beliefs infuse everything we do at Xerox including our firm commitment to protecting the environment and the health and safety of our employees. Embodied in our environmental, health, and safety policy is a central principle that our company will not take unacceptable risks with the environment or people s health and safety in pursuit of economic gain. This policy is put into practice by the talented and energetic people of Xerox. Employees across the company invest their time and energy toward the success of programs such as Zero Injury, Emergency Preparedness, and Waste-Free. Their involvement reflects the shared responsibility we practice each day in upholding our corporate values. Protecting Xerox employees from harm in the workplace is among my highest priorities. Our Zero Injury program, designed to prevent workplace injuries and illnesses, has yielded good results. Accident and illness rates have dropped by 5 percent since the program s inception in I will not be satisfied until we reach benchmark levels of employee protection. Like other companies, our focus on emergency preparedness has been heightened since September 11, 21. While more work is yet to be done, the comprehensive deployment of our emergency response standard has made us better prepared than ever to deal with incidents that could potentially harm our employees or the surrounding communities. Xerox s environmental programs illustrate that good values and good business are not only possible but synergistic. Our goal simply stated is to make Waste-Free Products in Waste-Free Factories to help our customers attain Waste-Free Workplaces. In 22 alone, our pioneering efforts in remanufacturing and parts reuse diverted 161 million pounds of waste from landfills and saved our company several hundred million dollars. You ll find many similar success stories throughout this report. There is only one constant in today s business world and it is change. Regulatory schemes are more complicated. Customer expectations have grown. Pressing environmental problems of the 21st century, such as global climate change and rapid deforestation, pose a sense of urgency. In response, our company has committed to two new initiatives in 23. First, we have made formal a continuing commitment to reduce our energy consumption and associated greenhouse gas emissions across the company. Second, we have deployed a stringent set of requirements to companies that supply paper to Xerox for resale. These requirements will ensure that Xerox paper is sourced from sustainably managed forests. Additionally, we are investing in technology to reduce the environmental impact of our products. We are also designing products and solutions that are usable by a greater base of potential customers, including those with disabilities. To Our Stakeholders A Message from the Chairman and Chief Executive Officer Sincerely, Anne M. Mulcahy Chairman and Chief Executive Officer I believe passionately that good citizenship is good business. It s good for our communities, good for our people... and, ultimately, good for Xerox. It means protecting our employees, our communities, and the environment from harm, and it means striving toward a sustainable world. I pledge that Xerox will continue to work toward these goals it is part of our heritage and our future. 1

4 About This Report Xerox s 23 Environment, Health, and Safety Progress Report is the ninth in a series of annual reports documenting our progress toward goals for protecting the environment and safeguarding the health and safety of Xerox employees, customers, and neighbors. This report reviews worldwide performance during the 22 calendar year. It also includes some discussion of 23 goals and activities. Safety performance data cover Xerox operations and subsidiaries during the 22 time period. Environmental results show full-year performance of Xerox manufacturing, research and development, and equipment recovery/recycle operations. Xerox changed the scope of its manufacturing operations significantly in 21, outsourcing most office equipment production to Flextronics International, a global electronics manufacturing services company. Starting in 22, Xerox performance data with the exception of solid waste data do not include results for these transferred operations. For More Information The following environmental, health, and safety materials are available from the Xerox contacts listed at right or the Internet: Xerox Environment, Health, and Safety Progress Reports, 2-23 Material Safety Data Sheets Product Safety Data Sheets Business Guide to Waste Reduction and Recycling Brochures: Because We Can t Remanufacture the Earth Environment, Health, and Safety: A Record of Progress Facts About the Safety of Xerox Products Facts About Ozone Protecting our Planet is a Group Project: Join In This report supports our continued efforts to maintain an open dialogue with audiences interested in Xerox s environmental, health, and safety initiatives, including employees, customers, investors, government agencies, non-governmental organizations, and the media. Each year, Xerox strives to enhance the value of this report, incorporating international reporting best practices and feedback from readers. Please send your comments and suggestions to: Xerox North America Environment, Health, and Safety Xerox Corporation 8 Phillips Road, Bldg F Webster, New York 1458 U.S.A. Telephone: (8) TTY: (866) xerox.ehs@mc.usa.xerox.com Xerox Europe Environment, Health, and Safety Bessemer Road Welwyn Garden City Hertfordshire AL7 1HE England Telephone: Elaine.Grange@gbr.xerox.com The 22 Xerox annual report and information about corporate commitments to social responsibility and diversity are available from 2

5 Xerox demonstrated continued progress toward key environmental, health, and safety goals in 22, improving the performance of our products and facilities for the benefit of our customers, employees, and neighbors. Executive Summary 22 Highlights Goal: Waste-Free Products Prevented 161 million pounds of material from entering landfills through the reuse and recycling of Xerox equipment and supplies. Enabled energy savings of 51 million therms (1.5 million megawatt hours) through the reuse of parts and the sale of ENERGY STAR products. One hundred percent of eligible new Xerox products met the stringent requirements of the international ENERGY STAR and Canada s Environmental Choice EcoLogo. Fifty percent complied with Germany s Blue Angel. One hundred percent of new products offered two-sided (duplex) capability, promoting efficient use of paper. Goal: Safe and Accessible Products Designed the Xerox Copier Assistant software as an alternative to the touchscreen interface, making it easier for customers with disabilities to operate Xerox products. Energy Savings (Millions of Therms) Product Energy Savings Energy Saved in Use (ENERGY STAR) Energy Saved in Manufacture (Parts Reuse) Avoided CO 2 Emissions // Xerox Copier Assistant Avoided CO 2 Emissions (Thousands of Tons) Designed all new products to include requirements consistent with the U.S. Government s Section 58 accessibility standards for people with disabilities. Goal: Waste-Free Facilities Beneficially managed 97 percent of hazardous waste through treatment, recycling, or energy recovery through fuels blending. Recycled 92 percent of non-hazardous solid waste generated in all Xerox facilities. Xerox s worldwide equipment recovery and recycle operations achieved a 96 percent recycle rate. Maintained ISO 141 certification for global manufacturing sites. Goal: Safe Workplace and Healthy Workforce Maintained injury levels well below industry averages. Further improved our safety record with a 7 percent reduction in the rate of Total Recordable Incidents and a 2 percent decline in the Day Away from Work case rate. Continued the global deployment of our emergency preparedness standard, verifying that all operations have documented emergency response plans in place. 22 Hazardous Waste Management 3% Treated Off-Site 4% 3% Recycled Off-Site Disposed 5% Recycled On-Site 1% Fuels Blended 75% Treated On-Site Workplace Injury Rates Total Recordable Incidents Day Away From Work Cases 2 1 Per 1 Employees //

6 Company Profile Xerox at a Glance U.S. Dollars (Millions) U.S. Dollars (Billions) Thousands of Employees Employees Worldwide U.S Revenue Net Income Other Areas Europe U.S. Product Portfolio Xerox provides offices and production-printing environments with a wide array of offerings. Our product portfolio includes printing and publishing systems, digital presses, multifunction systems, copiers, printers, and fax machines. Our line of supplies includes toners, inks, print/copy cartridges, and printing materials. Xerox software, solutions and services including operation of in-house production centers help customers streamline processes for managing documents and information. Scope of Business Operations Xerox sales and service operations support commercial and government customers in the United States, Canada, Europe, and more than 12 countries in Africa, Central and South America, Eurasia, and the Middle East. Our products are sold via direct sales, telebusiness, and the Internet, as well as independent resellers, agents, and concessionaires. Xerox has research and manufacturing sites in ten countries around the world. Manufacturing operations build office printers, production printing systems, and imaging supplies (toners, inks, photoreceptors, print/copy cartridges). They also remanufacture and recycle machines and supplies that customers return to Xerox. Xerox s five research and technology centers develop technologies and engineering concepts for next-generation Xerox products and solutions. Research is focused in the following key areas: marking systems, materials, digital imaging, document solutions, and services. Founded 196, as The Haloid Company 1961, renamed Xerox Corporation Corporate Headquarters 8 Long Ridge Road P.O. Box 16 Stamford, Connecticut 694 U.S.A. Chairman and Chief Executive Officer Anne M. Mulcahy Vice President, Environment, Health, and Safety Jack C. Azar Stock Information Xerox is publicly traded on the New York Stock Exchange; symbol XRX. 4

7 Policy, Goals, and Strategy Integrating Environmental, Health, and Safety Considerations into Xerox Business Vision and Goals The value of responsible corporate citizenship has been firmly embedded in Xerox culture since the company s inception. We consider protection of the environment and the health and safety of our people to be fundamental components of our commitment to good corporate citizenship. Xerox s environmental, health, and safety policy, established in 1991, provides a solid foundation for the development of goals applicable to our global operations. Today, Xerox s strategic environmental, health, and safety goals are organized into five categories: Safe Workplace and Healthy Workforce, Waste-Free Facilities, Safe Products, Accessible Products, and Waste-Free Products. While there is still work to be done, we have made significant advances toward these goals, as shown below. More Than a Decade of Progress Vision Goals Performance Provide Value to Employees and Society Safe Workplace & Healthy Workforce Waste-Free Facilities Results of the Zero Injury program, initiated in 1997: 5% reduction in Total Recordable Injury rate. 47% reduction in Day Away From Work case rate. 92% reduction in air emissions from facilities that manufacture Xerox supplies (our most chemically intensive operations) since Improvement in non-hazardous solid waste recycling rate from 56% to 92% since % or more of hazardous waste managed beneficially since 1999 through treatment, recycling, or fuels blending. 19% reduction in water use since % decrease in energy consumption since Provide Value to Customers Safe Products Accessible Products Waste-Free Products Design requirements for materials safety, mechanical and electrical safety, and ergonomics are integrated into the Xerox product development process. No product is launched until these criteria are satisfied. Products are designed to be usable by a wide range of customers, including those with disabilities. Starting in 22, all product designs included requirements consistent with the U.S. Government s Section 58 accessibility standards. Xerox Copier Assistant software, introduced in 23, makes it easier for people with disabilities to use the copy function of Xerox office products. Nearly 1.4 billion pounds of waste diverted from landfills since 1991 through equipment end-of-life strategies. Up to 8% reduction in product energy consumption since 199. ı Product features such as duplex copying/printing help customers make efficient use of paper. 1% of products introduced in 22 offered duplex capability. Xerox has achieved its goal of minimizing product emissions of ozone and dust. Today s emission levels are well below the strictest regulatory limits. ı Energy consumption of the Xerox CopyCentre C32 Color digital copier compared to the Xerox 534, introduced in 199. Customer use patterns affect energy consumption. 5

8 Policy, Goals, and Strategy Policy Deployment The Environment, Health, and Safety organization is charged with ensuring company-wide adherence to Xerox s environmental, health, and safety policy. The governance model we employ to accomplish this task includes clearly defined goals, a single set of worldwide standards, an array of programs that integrates environmental, health and safety considerations into business operations, and an audit process that ensures conformance to these requirements. Corporate Reporting Relationships Business Group Operations Worldwide Manufacturing and Supply Chain Services Environment, Health and Safety Organization Audit Program Board of Directors Audit Committee Chairman and Chief Executive Officer Chief Financial Officer Corporate Controller Xerox Management Audit Committee Business Ethics and Compliance Office Standards Environmental, health, and safety standards are our primary tool for ensuring compliance with corporate policies and goals. Applicable to all operations worldwide, these standards establish specific requirements for product and materials safety, packaging, environmental management and reporting, workplace safety, emergency response, and asset protection. Xerox employees access these standards via the company s internal web site. Operational Programs Effective deployment of environmental, health and safety goals and standards relies on full integration into ongoing business practices. Five key programs serve this integration function throughout the company: Zero Injury Program The Zero Injury program is designed to ensure the safety of Xerox employees around the world. Our ultimate goal is benchmark safety performance. Launched in 1997, the program trains managers in safety management and holds them accountable for their organizations safety performance. The Environment, Health, and Safety organization develops awareness and training programs, tracks performance worldwide, and provides guidance as needed to correct deficiencies. Emergency Preparedness Xerox requires each of its operations to have a documented emergency response plan in place outlining actions to be taken in the event of potential Environmental, Health and Safety Governance Model Environmental, Health, and Safety Corporate Policy Environmental, Health, and Safety Strategic Goals Safe Workplace & Healthy Workforce Waste-Free Facilities Safe Products Accessible Products Waste-Free Products Environmental, Health, and Safety Standards Zero Injury Program Emergency Preparedness ISO 141 Environmental Management EH&S Integration into Product Development Process Supply Chain Management Xerox Business Divisions and Operations Environmental, Health, and Safety Audit Program 6

9 emergencies. Training programs ensure that employees are aware of the plans and understand evacuation procedures and rescue and response methods. Routinely scheduled management reviews, drills, and corporate audits ensure that plans comply with Xerox standards and regulations. ISO 141 Environmental Management System All company manufacturing operations employ ISO 141-conforming environmental management systems to ensure compliance with regulations and Xerox standards, identify environmental impacts, and set reduction targets. All of our major manufacturing operations have been certified to ISO 141 since In 22, we completed the certification of all manufacturing operations. Product Development Process Xerox integrates environmental, health, safety, and accessibility criteria into the earliest stages of Xerox product design and development. Products adherence to safety standards, ecolabel criteria, accessibility requirements, and end-of-life strategies is reviewed at each major phase of the development process. Failure to meet these requirements can delay product launches. Supply Chain Environmental, Health, and Safety Management Since 1998, Xerox has asked its materials and components suppliers to meet specific environmental, health, and safety requirements. The requirements, updated in 23, are part of our supplier assessment program and form the basis for competitive assessments. Xerox s primary contract manufacturer for office products, Flextronics International, must also comply with strict standards for product safety. Any modifications to Flextronics product manufacturing process, including parts substitutions with a potential health or safety impact, must be approved prior to implementation. Xerox also carefully manages suppliers that provide recycling and waste disposal services. Xerox uses a well-established audit process to ensure that these vendors practices are safe, environmentally sound, and compliant with all regulations. Xerox requires these companies to document the final disposition of material, including electronic scrap, sent to their facilities. Audit Program A well-established audit program measures our success in implementing environmental, health, and safety goals and targets. Research, manufacturing, and service operations undergo audits at least once every three years. Xerox audit teams evaluate operations against Xerox standards, regulations, and industry guidelines to identify environmental, health, and safety risks and potential areas of non-compliance. Local managers, with the assistance of audit teams, develop action plans to correct deficiencies. Situations that pose a significant risk of environmental damage, injury to employees, or regulatory non-compliance receive special attention from senior management and are tracked for resolution. The audit program has proven to be an important mechanism for identifying and correcting performance gaps. At the same time, it offers a valuable opportunity to share best practices among facilities. Business Ethics and Compliance It is vital to create a corporate culture that supports managers and employees when the inevitable day-to-day conflicts with competing business objectives arise. Xerox s code of conduct and related employee training, being deployed by the Xerox Business Ethics and Compliance Office in 23, give employees detailed guidance on maintaining this commitment in daily operations. The company CEO builds employees awareness of their responsibility to our corporate environmental, health and safety commitment through an annual ethics letter. Each employee must confirm his/her understanding of this commitment through a formal acknowledgment process. Environmental, health, and safety goals are fully integrated into Xerox operations. Environmental, Health, and Safety Requirements for Xerox Materials and Components Suppliers Comply with applicable government environmental, health and safety regulations. No ozone-depleting substances in manufacturing or processing of parts/materials supplied to Xerox. No toxic heavy metals including cadmium, mercury, hexavalent chromium, and lead in packaging. No polybrominated biphenyls or polybrominated diphenyl ethers in parts/materials supplied to Xerox. By January 1, 25, eliminate cadmium, mercury, hexavalent chromium, and lead from parts/materials supplied to Xerox. Mark plastic parts with recycling codes, as defined by ISO standards. Environmental Plank of Xerox s Ethics Policy Xerox is committed to protecting the environment and the health and safety of its employees, customers, and the communities where it does business. Xerox will operate in a manner that conserves natural resources and will comply with all laws regulating these matters. 7

10 Policy, Goals, and Strategy Working to Become a Sustainable Company For more than a decade, Xerox has deployed its Waste-Free goal of making Waste-Free Products in Waste-Free Factories to help our customers attain Waste-Free Workplaces. This effort has produced dramatic improvements in the environmental performance of our company, as described throughout this report. In moving toward a sustainable future, we recognize that we must further reduce the environmental impact of Xerox s own operations. At the same time, we must continue to extend the reach of our environmental, health, and safety policies across the product life cycle. In 23, we launched two new initiatives that will enable future progress in both of these areas. The first is a formal commitment to reduce Xerox s energy consumption and associated greenhouse gas emissions. The second expands Xerox s influence on the supply chain with a set of new environmental, health, and safety requirements for companies that provide paper to Xerox for resale. The U.S. Environmental Protection Agency sponsors Climate Leaders, a voluntary industry-government partnership that encourages companies to develop long-term comprehensive climate change strategies and set greenhouse gas emissions reduction goals. Climate RESOLVE was created by The Business Roundtable (BRT), a Washington, D.C.-based association of chief executive officers of the largest U.S. corporations. The program helps participating companies take voluntary action to reduce, offset, sequester or avoid greenhouse gas emissions. Reductions in Energy and Greenhouse Gas Emissions Energy management is not new for Xerox. Over the last several years, we have reduced energy consumption within our operations through the use of high-efficiency lighting, the installation of motion detectors that turn off lights when rooms are unoccupied, and the implementation of energy management programs. We have also reduced energy consumption associated with the manufacture of Xerox products through our remanufacturing and parts reuse program. By reusing parts, Xerox avoids the energy expenditures associated with the extraction of raw materials and fabrication of parts. In addition, Xerox designs its products to be energy efficient, allowing customers to reduce their consumption of energy and associated greenhouse gases. Environmental, Health and Safety Requirements Across the Supply Chain Waste-Free Goals 23 Company-Wide Commitment to Reduce Greenhouse Gas Emissions Parts and Components Suppliers Contract Manufacturing Paper Suppliers Xerox Operations (Research, Development, Manufacturing, Remanufacturing, Marketing, Sales, Distribution, Services) Transportation Services Xerox Customers (Product Use) 23 Paper Sourcing Requirements Environmental, Health, and Safety Supplier Requirements Recycling and Waste Disposal Services Material Flow Xerox EH&S Requirements Outsourced Operation 8 Xerox extends environmental, health, and safety requirements to its own operations and those of its suppliers. In 23, Xerox has strengthened requirements for paper suppliers and has expanded company-wide our commitment to reduce energy and greenhouse gas emissions.

11 In 23, Xerox strengthened its commitment to reducing energy consumption and associated greenhouse gas emissions across all operations. We are now developing a company-wide methodology for measuring greenhouse gas emissions and establishing a baseline inventory. In 24, Xerox will set corporate targets for reducing greenhouse gas emissions through 212. Xerox recently joined the U.S. Environmental Protection Agency s Climate Leaders and The Business Roundtable s Climate RESOLVE. Both programs are voluntary initiatives to help companies develop long-term climate change strategies. Paper Sourcing As one of the largest brands of cut-sheet paper in the world, Xerox recognizes its obligation to ensure the responsible management of forests that provide raw materials for the production of paper. To this end, Xerox adopted in 2 an environmental position on sourcing paper. The position states that our goal is to source paper from companies committed to sound environmental, health, and safety practices and sustainable forest management. In support of our position, we have issued in 23 a set of stringent requirements for companies who provide paper to Xerox for resale. The requirements, which cover all aspects of papermaking, from forest management to production of finished goods, will be included in our existing supplier qualification process. All Xerox paper suppliers worldwide must meet these new requirements to continue doing business with Xerox and must submit detailed documentation, on an annual basis, verifying conformance. Key elements of the requirements include: Commitment to compliance with all applicable environmental, health, and safety regulatory requirements, including forestry codes of practice and regulations governing legal harvesting of wood. An effective mill environmental management system and objectives for continual improvement in environmental performance above and beyond regulatory compliance. An effective procurement process that: Ensures the exclusion of illegally harvested wood raw materials. Ensures the exclusion of wood raw materials derived from forest areas of significant ecological or cultural importance unless certified to a Xerox-accepted sustainable forest management standard. Encourages all suppliers of wood raw materials to practice sustainable forest management. Strict limits on the use of hazardous materials, including exclusion of elemental chlorine, in the processing and content of Xerox papers. We recognize that one of the most significant challenges paper companies will face in meeting Xerox s requirements will be to demonstrate that they are safeguarding forest areas of significant ecological or cultural importance. Xerox fully supports multi-stakeholder efforts to develop information sources and tools that will help suppliers identify these areas on their own forestlands and in their procurement of wood raw materials from third parties. Xerox expects its suppliers to take full advantage of these resources as part of their sustainable forestry efforts. Xerox is working toward a sustainable future by reducing the environmental impacts of its own operations and those of its suppliers. Xerox Position on Paper Sourcing Xerox Corporation sources its paper from companies committed to sound environmental, health, and safety practices and sustainable forest management in their own operations and those of their suppliers. Our intent is to protect the health and integrity of forest ecosystems, conserve biological diversity and soil and water resources, safeguard forest areas of significant ecological or cultural importance, and ensure sustainable yield. Companies must be committed to compliance with all applicable environmental, health, and safety regulatory requirements in the countries where they operate. In 23, the Xerox Foundation has extended financial support to NatureServe, a nonprofit organization that is developing tools to help forest managers identify plant and animal species and ecological communities requiring protection. 9

12 Waste-Free Products Sustainable Design Xerox s commitment to becoming a Waste-Free company spans more than a decade. An ambitious set of Waste-Free goals and supporting programs have helped us put this commitment into practice. As a result, each new generation of Xerox products offers increasing functionality while conserving energy and materials and requiring fewer hazardous substances throughout the product life cycle. Xerox continued to make good progress toward our Waste-Free Product goals in 22: Xerox equipment remanufacture and supplies reuse/recycle programs diverted 161 million pounds of material from landfills. Energy-efficient product features enabled energy savings of 37 million therms (1.1 million megawatt hours). Parts reuse saved an additional 14 million therms (4, megawatt hours) of energy. Waste-Free Product Goals and Initiatives Waste-Free Product Goals Efficient use of materials and energy Minimal use of hazardous substances Low emissions and noise Sustainable Product Design Initiatives Equipment remanufacture and parts reuse/recycle Supplies return and recycle programs Energy-efficient design Efficient use of paper Recycled content in equipment, supplies, and packaging Design to Xerox worldwide product environmental performance standards All newly introduced products achieved Xerox s strict standards for minimal use of hazardous materials and emissions of noise, ozone, and dust. The efforts of Xerox engineering teams to incorporate increasingly challenging targets for energy efficiency, reuse/recycling, and minimized use of hazardous materials into future product designs will ensure continued advances in these areas. The deployment in 22 of a revised, more stringent environmental, health, and safety standard for Xerox packaging will drive progress in this area as well. One measure of the success of our Waste-Free focus is the number of Xerox products that meet the world s most widely recognized certifications for product environmental performance the international ENERGY STAR, Canada s Environmental Choice EcoLogo, and Germany s Blue Angel. One hundred percent of the eligible products that Xerox introduced in 22 met ENERGY STAR and Environmental Choice EcoLogo criteria, while 5 percent complied with Blue Angel performance standards. Ecolabel-Qualified Products ENERGY STAR Canada s Environmental Choice EcoLogo Germany s Blue Angel Percentage of Xerox Product Models Introduced 1% 8% 6% 4% 2% % // Note: Percentages represent the proportion of product models introduced in a given year that are eligible for ecolabel certification (i.e., within the scope of an ecolabel program) and that meet ecolabel criteria.

13 Each new generation of Xerox products offers increasing functionality while conserving energy and materials and requiring fewer hazardous substances throughout the product life cycle. Integrating Waste-Free Goals into Product Design Xerox recognized early in our drive for Waste-Free Products that the best results both environmental and financial are achieved when products are designed from the outset with Waste-Free goals in mind. Customer feedback, combined with a forward-looking view of global trends in technology, regulations, and ecolabels such as ENERGY STAR, has shaped the development of a comprehensive set of Xerox product environmental, health and safety performance standards. The standards incorporate Waste-Free goals as well as requirements encompassing electrical and mechanical safety, ergonomic design, electromagnetic emissions, fire resistance, and materials safety. Products being developed undergo a careful review by Xerox business teams and the Environment, Health, and Safety organization at each stage of Xerox s Time to Market product development process. These ongoing reviews ensure that environmental, health, and safety requirements are fully satisfied by all Xerox products, whether they are designed by Xerox or suppliers. Xerox test facilities ensure that products comply with the strictest safety regulations. Our anechoic chamber in Webster, New York, measures product emissions of, and immunity to, electromagnetic radiation. The following pages describe the sustainable product design practices that have been most significant in moving Xerox toward its Waste-Free Product goals. Xerox s Time to Market Product Development Process Strategic Planning Technology Assessment Product Definition and Design Product Launch Product Delivery Market Research Competitive Trends Regulatory Trends EH&S Technology Needs EH&S Design Standards Product Accessibility Requirements Product Safety Materials Safety Environmental Requirements Ergonomic Design Remanufacture/ Recycle Product Accessibility Environmental Marketing Customer Communications Customer/Sales Support Customer Satisfaction Surveys and Feedback Xerox conducts a careful review of the chemical composition of all Xerox products and supplies to ensure that materials are safe for customer use. The Xerox Time to Market product development process is the mechanism we use to deploy environmental, health, and safety product performance standards. Xerox engineers consider environmental, health, and safety requirements in the earliest phases of product design. Business teams regularly assess developing products to ensure that these criteria are fully implemented. 11

14 Waste-Free Products Equipment Remanufacture and Parts Reuse The practice of converting end-of-life copying and printing equipment into new products and parts is one that Xerox pioneered. We developed a comprehensive process for taking back end-of-life products from customers in the early 199s, establishing a remanufacture and parts reuse program that forms the foundation of our Waste-Free initiatives. All Xerox-designed product models available today have been developed with remanufacturing in mind. Our approach to managing products at end-of-life translates into significant environmental and financial benefits. Equipment remanufacture and the reuse and recycling of parts prevents millions of pounds of waste from entering landfills each year 143 million pounds in 22 alone. The practice of reusing parts reduces the amount of raw material and energy needed to manufacture brand new parts, generating several hundred million dollars in cost savings each year. We estimate that in 22, energy savings from parts reuse totaled 14 million therms (4, megawatt hours) enough energy to light more than 32, U.S. homes for a year. Since its inception in the early 199s, Xerox s equipment remanufacture and parts reuse/recycle program has kept nearly 1.4 billion pounds of waste out of landfills the equivalent of more than 2 million machines. This is enough material to fill New York s Empire State Building more than three times. Designing for Reuse Xerox has been able to maximize the end-of-life potential of products and components by incorporating reuse considerations into the design process. Machines are designed for easy disassembly and contain fewer parts. Parts are designed for durability over multiple product life cycles. Parts are also easy to reuse or recycle, and are coded with disposition instructions. As a result, equipment returned to Xerox can be remanufactured rebuilt to as-new performance specifications, reusing 7 to 9 percent by weight of machine components, while meeting performance specifications for equipment with all new parts. Xerox Equipment Recovery and Parts Reuse/Recycle Process Raw Materials Fabricate New Parts Build Product Process Parts for Reuse (Equipment Remanufacture or Conversion) Recycle Parts Recycle Materials (Third Party) Alternative Uses Sort/Inspect Disposal Goal: Zero to Landfill Deliver Customer Use Return to Xerox Dismantle Xerox has further extended its ability to reuse parts by designing product families around modular product architectures and a common set of core components. These advances offer Xerox multiple options for giving new life to old equipment. A returned machine can be rebuilt as the same model through remanufacture, converted to a new model within the same product family, or used as a source of parts for next-generation models. Improved processes for forecasting equipment returns from customers have allowed Xerox to increasingly rely on previous generations of equipment as a source of components for products in development. Xerox products whose designs are based on previous models may have 6 percent of their parts in common with older equipment. As the pace of technological innovation has shortened product life cycles, our ability to reuse parts across product generations has become increasingly important. 12

15 Ensuring Product Quality Xerox has developed unique processes and technologies to ensure that all Xerox products, regardless of their reused/recycled part content, meet the same specifications for performance, appearance, quality, and reliability. Signature Analysis is one such technology. It enables Xerox engineers to determine the life expectancy of motors and other electromechanical components. Using this technology, we test new parts to determine a signature an acceptable range for the noise, heat, or vibration that parts produce while in use. We then test the same characteristics in parts from returned equipment. Only those parts whose signatures are consistent with those of newly built parts are approved and processed for reuse. Xerox has been using Signature Analysis technology in its equipment disassembly and remanufacture operations since Prior to its introduction, the reuse potential of returned parts was predetermined based on average life expectancy data. Some parts were consistently scrapped, while others were consistently approved for reuse. Today, using Signature Analysis, Xerox is able to identify unacceptable parts that might otherwise have been approved for reuse, improving equipment reliability and customer satisfaction. Xerox also identifies many useful parts that would otherwise have been scrapped, reducing unnecessary waste and eliminating costs associated with the purchase of new parts. The full integration of equipment remanufacture and parts reuse processes with traditional manufacturing operations is another critical element of Xerox s strategy for ensuring consistent quality for all products. Machines with reused/recycled parts are built on the same manufacturing lines as newly manufactured equipment, and they undergo the same rigorous quality assurance tests. As a result, products with reused/recycled parts carry the same Xerox guarantees, warranties, and service agreements as Xerox equipment made from all new parts. Meeting Customer Requirements Customer acceptance of reused/recycled parts was a significant challenge for Xerox s program throughout the 199s. Today, with more than a decade of proof, we find that far fewer customers share the misperception that products with reused/recycled parts are inferior to those built from all new parts. Xerox continues to educate customers about the quality and reliability of reused parts. And, whenever necessary, we promote environmentally responsible purchasing policies and practices that eliminate barriers to reuse by focusing on the quality and performance of products regardless of recycled content. Percentage of Xerox Product Models Introduced Note: Percentages are the proportion of Xerox-designed product models introduced each year that are designed for remanufacture. This metric was first developed in Waste Diverted from Landfills through Parts Reuse/Recycle // Note: Data cover the remanufacture and reuse/recycle of Xerox equipment and parts at Xerox facilities and those of our contract office equipment manufacturer, Flextronics. Energy Savings (Millions of Therms) Products Designed for Remanufacture Millions of Pounds 1% 8% 6% 4% 2% % 9% 9% 9% 1% 1% Reductions in Energy and CO 2 Emissions from Parts Reuse 1 Feedstock Energy Saved Process and Transport Energy Saved // ı Energy savings represent the difference between the energy required to build new parts and the energy required to process parts for reuse, assuming an average machine composition of 6 percent plastic and 4 percent steel. Energy savings calculations encompass feedstock energy (the energy content of the petroleum and coal raw materials converted to plastic and steel, respectively) and energy required to process and transport materials throughout the life cycle. Life cycle energy data was obtained from Franklin Associates, Ltd. Energy savings were converted into avoided emissions of carbon dioxide using a U.S. energy profile and emissions factors calculated by the U.S. Environmental Protection Agency and Department of Energy. Feedstock energy was excluded from this conversion. Parts Recycled Parts Reused CO 2 Emissions Avoided Avoided CO 2 Emissions (Thousands of Tons) Xerox uses Signature Analysis testing technology to determine the usable life of parts from returned equipment. 13

16 Waste-Free Products Millions of Pounds Xerox Green World Alliance: Total Waste Diverted from Landfills Xerox Green World Alliance Toner Containers Waste Toner Cartridges Reuse and Recycling of Supplies: The Green World Alliance The Xerox Green World Alliance reuse/recycle program for supplies is a central element of our strategy to achieve Waste-Free Product goals for efficient use of materials and energy. Partnerships with Xerox customers have made this program a success. In 22, the Green World Alliance prevented more than 18 million pounds of waste from entering landfills worldwide. Xerox has well-established methods for collecting and reprocessing spent print/copy cartridges, toner containers, and waste toner from Xerox office and production equipment. Prepaid return labels and the packaging from new supplies allow customers to ship these materials back to Xerox for reuse and recycling. For cartridges and waste toner bottles, Xerox includes return labels in boxes of new supplies. Labels for toner containers are available from Xerox upon request. Returned products are cleaned, inspected, and then remanufactured or recycled. Remanufactured cartridges, containing an average of 9 percent reused/recycled parts, are built and tested to the same performance specifications as new products. Similarly, waste toners qualified for reuse may account for 25 percent of the weight of new toner, without any compromise in toner functionality. The reuse of waste toner saves several million dollars each year in avoided raw material costs. Through the Green World Alliance, customers worldwide returned more than 6.5 million cartridges and toner containers to Xerox in 22. Nearly 9 percent by weight of these returned materials were remanufactured or recycled. Xerox also processed 2.4 million pounds of post-consumer waste toner for reuse. The plastic bottles customers used to return waste toner to Xerox more than 19, in number were recycled. At the same time, Xerox continued its practice of designing toner containers to incorporate post-consumer recycled plastic, achieving an average of 36 percent recycled content for toner bottles sold in 22. ı In 23, Xerox is strengthening the Green World Alliance program in several ways. We have upgraded our Green World Alliance web site, making it possible for customers to download prepaid return labels directly from the site rather than requesting them by phone or . Xerox is continuing to qualify new cartridges and black waste toner for remanufacture. Engineers are also investigating methods for remanufacturing color waste toner and identifying reuse and recycling options for black toners not suitable for remanufacture. One such option is using reprocessed waste toner as a colorant in newly built plastic parts. All of these efforts are helping us move toward our goal of responsibly managing all waste associated with Xerox supplies. ı This figure is based on North American sales. Xerox return programs for supplies, including the photoreceptors pictured above, provide significant environmental benefits. In 22, these initiatives diverted 18.3 million pounds of material from landfills worldwide. 14

17 Energy Efficiency Xerox has followed a comprehensive approach to reducing product energy consumption over the past decade, achieving significant reductions in several phases of the product life cycle. First, the company s remanufacture and parts reuse program, described in the preceding pages of this report, has reduced the amount of energy required to build equipment. This is because it takes much more energy to build a new part from raw materials than it does to process a part for reuse. Second, product design features such as automatic power-saver modes have substantially lowered the energy consumed by products during the customer use phase of the life cycle. Together, these initiatives have dramatically reduced the energy needs of Xerox products, generating cost savings for Xerox and its customers and notable benefits for the environment. We have substantially reduced the energy required to manufacture and operate Xerox products. In 22 alone, we estimate that Xerox ENERGY STARqualified equipment in customer locations around the world several million machines enabled energy savings of 37 million therms (1.1 million megawatt hours). These energy savings translate into an avoidance of approximately 619, tons of carbon dioxide emissions. By remanufacturing equipment with reused parts in 22, Xerox saved an additional 14 million therms of energy (4, megawatt hours) and prevented 79, tons of carbon dioxide emissions from entering the atmosphere. In total, the energy saved in 22 through ENERGY STAR product features and equipment remanufacturing is enough to light more than 1.2 million U.S. homes for a year. Energy Savings (Millions of Therms) Reducing Product Energy Consumption During Use For more than a decade, Xerox equipment has been designed to enter a power-saver mode after a specified period of non-use. Because office equipment is often inactive for portions of a workday and may be left on overnight, this power-saver feature has the potential to substantially reduce energy use. Xerox formalized its commitment to energy-efficient product design in 1993, joining the U.S. Environmental Protection Agency s ENERGY STAR Office Equipment program as a Charter Partner. Since then, we have introduced more than 23 copier, printer, fax, and multifunction products that have earned the ENERGY STAR. Each of these has been carefully designed with energy-saving features that bring value, efficiency, and flexibility to our customers work environments. One hundred percent of eligible Xerox products introduced in 22 met ENERGY STAR criteria. Environmental Benefits of Product Energy Efficiency Programs Energy Saved in Use (ENERGY STAR) Energy Saved in Manufacture (Parts Reuse) Avoided CO 2 Emissions // Note: Energy savings from parts reuse represent the difference between the energy required to build new parts and the energy required to process parts for reuse (refer to footnote on page 13 for more details). Annual energy savings from ENERGY STAR features are calculated by comparing the annual energy consumption of Xerox ENERGY STAR-qualified product types to non-energy STAR counterparts. Savings are aggregated across the estimated number of Xerox ENERGY STAR-qualified machines in customer locations worldwide. Energy reductions are translated into avoided carbon dioxide emissions using U.S. Environmental Protection Agency, U.S. Department of Energy, and International Energy Agency conversion factors Avoided CO 2 Emissions (Thousands of Tons) Advances in fusing technology and new electronics architectures have made today s Xerox office equipment significantly more energy efficient than comparable 199 models, even while offering customers enhanced functionality, including color capability. For example, the annual energy consumption of the ENERGY STAR-qualified Xerox CopyCentre C32/C4 Color digital copiers is 8 percent ı less than that of the Xerox 534, introduced in 199. The annual energy consumption of the ENERGY STAR-qualified Xerox CopyCentre C32/C4 Color digital copiers is 8 percent ı less than that of the Xerox 534, introduced in 199. ı This calculation assumes that customers do not manually power off equipment at the end of each workday. 15

18 Waste-Free Products Xerox multifunction systems further reduce the amount of energy required to provide customers with copy, print, fax, scan, and capabilities by combining the functions of multiple products into one machine. The annual energy consumption of a Xerox WorkCentre or WorkCentre Pro multifunction system is approximately 4 percent less than the combined annual energy consumption of the individual ENERGY STAR-qualified Xerox Multifunction Systems: Inherent Environmental Benefits copier, fax, and printers it replaces. Energy savings increase to 7 percent if a multifunction system replaces individual products that are not ENERGY STAR-qualified. ı Annual energy consumption of an office copier, four laser printers and a fax: 1292 kwh 4% reduction Annual energy consumption of a multifunction system: 772 kwh Product energy efficiency is becoming an increasingly important customer consideration. Accordingly, Xerox continues to invest in breakthrough technologies required to achieve further reductions in product energy consumption. Current research is focused on further reducing fusing energy, developing lower-melting toners, and designing ultra-low power electronics. 16 Multipurpose Recycled Paper (3% recycled content) Digital Color Graphics (3% recycled content) Planet+ (TCF) 1% Recycled Planet Light Paper The U.S. Environmental Protection Agency estimates that manufacturing a piece of paper requires ten times more energy than making a copy. As a result, Xerox products are designed with reliable two-sided (duplex) capability and other features that allow customers to use paper efficiently. Xerox software products such as DocuShare and DigiPath also help customers reduce paper consumption by facilitating print-on-demand and distribute-then-print workflows. In addition to designing equipment and software that help customers use paper efficiently, Xerox offers a wide array of paper products incorporating environmental considerations. We estimate that more than 95 percent of all Xerox paper is manufactured using elemental chlorine-free (ECF) or totally chlorine-free (TCF) bleaching or de-inking processes. Xerox recycled papers are designed for optimal performance in our equipment and must meet the same performance specifications as virgin products. Today, Xerox offers multipurpose papers with up to 1 percent post-consumer recycled content. Transparencies, tabs, colored papers, and several premium products for digital color printing applications contain 25 to 3 percent recycled content. Planet Light, a 7 gram per square meter (g/m 2 ) paper available in Europe, achieves the same characteristics of a heavier-weight 8g/m 2 sheet using less fiber. A new plastic paper ream wrap that Xerox introduced in the U.S. in 23 also conserves resources it is 45 percent lighter than the wrap it replaces. New environmental requirements 2 that Xerox has issued to its paper suppliers in 23 encompassing sustainable forest management and fiber sourcing, strict limits on the use of hazardous materials in the processing and content of Xerox paper, and reusable/recyclable packaging will ensure continued advances in environmentally responsible paper design. Xerox has also committed to expanding its recycled product offerings in 23 and 24. ı These calculations use U.S. Environmental Protection Agency energy data for non-energy STAR products and incorporate Agency assumptions about customer usage patterns. 2 Refer to page 9 for additional detail about these requirements.

19 Minimal Use of Hazardous Substances To reduce the use of chemicals considered harmful to human health or the environment, Xerox has established a set of requirements that govern product design and materials selections. Xerox toxicologists conduct a comprehensive assessment of all new products and materials to ensure conformance with these criteria. In 22 and 23, Xerox s efforts to eliminate materials of concern from our product line have focused on six chemicals lead, mercury, cadmium, hexavalent chromium, and two types of bromine-based flame retardants. A new European law bans these chemicals from information equipment beginning in July 26. Xerox has already eliminated brominated flame retardants from its products. We are now partnering with suppliers to identify and develop alternatives for parts containing the remaining materials. Since there is very little cadmium or hexavalent chromium in our equipment, Xerox s primary focus has been on mercury and lead. We are phasing out the mercury-containing lamps that scan images and back-light user displays in some of our products. We are also investigating alternatives to lead-containing solders and wire insulation. Low Emissions and Noise Xerox designs its products to strictly control emissions of chemicals and noise, consistent with the criteria of the world s strictest ecolabels. As a result, current products have achieved chemical emission levels that are well below global regulatory requirements often at or near the detection limit of our measurement equipment and are considered to have a negligible impact on customers work environments. Since 1991, ozone and dust emissions from office and production copying and printing systems have decreased by more than 5 percent. Future Xerox products will be developed to maintain these low levels. Sophisticated noise prediction models developed by Xerox experts make it possible to identify potential noise sources in the earliest stages of product design, even before prototypes are available for testing. This modeling technology has proven to be a cost-effective way of designing low-noise equipment. The Xerox DocuColor igen3 Digital Production Press incorporates Xerox s latest low-noise innovations. This color press exhibits noise levels that are 8 percent (7 decibels) lower than those of a traditional offset press. Environmental, Health, and Safety Requirements for Materials Used in Xerox Equipment and Supplies Compliance with applicable global registration, hazard communication, and waste handling and disposal regulations for materials of concern. No use of materials that: Are carcinogenic, mutagenic, or cause adverse developmental or reproductive effects. Pose a toxicity hazard to humans or aquatic species. Can cause a permanent adverse impact to the skin, eye, or respiratory system. Are considered hazardous waste. No use of asbestos, benzene, ozone depleting substances, polybrominated flame retardants, polychlorinated terphenyls, or polychlorinated biphenyls (PCBs). As of January 1, 25, no use of cadmium, mercury, hexavalent chromium, or lead. Restricted use of 23 additional materials. Approval for use requires a Xerox-conducted safety assessment. Toward the Future Maintaining leadership in sustainable product design requires an ongoing effort. In 2, Xerox committed itself to a challenging new set of product environmental goals that parallel customer expectations. These goals exceed Xerox design standards and establish stretch targets for future products. A particular focus has been placed on product energy efficiency, the elimination of hazardous materials, and reuse/recyclability of equipment and supplies. Each year since 2, Xerox has reviewed and revised these goals to reflect the latest developments in technology and marketplace requirements. As Xerox continues to expand its focus from copiers and printers to integrated document management solutions, we are able to combine Xerox equipment, software, and expertise to enable customers to share documents and the information they contain in ways that further minimize material and energy resources. And as Xerox scientists continue to develop innovative technologies, we are committed to maximizing their capability to transform the way society works, ultimately helping Xerox customers do more with less. Xerox s noise chamber and precision instruments evaluate product noise emissions from Xerox products and components (like the heat exhaust fan pictured above) to ensure conformance with company standards. 17

20 Translating Policy Into Practice Waste-Free Product Showcase Digital Color Press Technology Innovative design features coupled with digital technology make Xerox s new DocuColor igen3 Digital Production Press an environmentally preferable choice for the commercial printing industry. Compared to traditional offset printing presses, the DocuColor igen3 creates little waste, emits 8 percent less noise, and neither generates hazardous waste ı nor uses hazardous materials. DocuColor igen3 Digital Production Press Up to 97 percent of the parts in this three-ton machine and 8 percent by weight of the waste it generates can be reused or recycled. This 8 percent figure includes the machine itself, empty toner bottles, waste developer, and packaging. The dry inks are non-toxic and have a transfer efficiency rate of nearly 1 percent, reducing the potential for waste. Emissions of chemicals such as ozone and dust are strictly controlled to the same levels achieved by Xerox office machines and are well below regulatory limits. Every part that is lifted, pushed, or pulled during machine assembly, operation, or service has been engineered and evaluated to minimize the risk of injury to Xerox employees and customers. Digital print-on-demand technology reduces paper use and excess inventory by making it economical to print books and brochures as they are ordered. Under the direction of Dr. Hadi Mahabadi, pictured above, materials scientists at the Xerox Research Centre of Canada have perfected new EA toner technology. The Xerox DocuColor 3535 printer/copiers and CopyCentre C32/C4 Color copiers are among the latest products to feature EA toner. Emulsion Aggregation Toner In July 21, the Xerox Research Centre of Canada announced emulsion aggregation (EA) technology, a breakthrough process for producing color toner. Developed over eight years and protected by more than 1 patents, the EA method chemically builds toner particles to any desired shape or size. Traditional toner manufacture involves mechanical grinding of large particles of solid colored plastic into smaller ones, followed by a classification process which sorts out toner particles of the desired size. Compared to this conventional method, the more precise EA technology conserves energy and nearly eliminates out-of-specification toner waste. EA toner also reduces the amount of energy and waste associated with printing. The extremely small size and round shape of EA toners make it possible to more uniformly charge these toners and transfer them efficiently to receiving paper. The result is sharper color images and fine lines, less toner per printed page, and a significant reduction in toner waste. By eliminating fuser oil, EA technology conserves resources while eliminating potential service calls for oil streaks. EA toner also exhibits image fixing capability at lower temperatures, reducing per-page product energy consumption. The Xerox CopyCentre C32/C4 Color copiers, DocuColor 3535 printer/copiers, and WorkCentre Pro 32/4 advanced multifunction systems are the latest Xerox color products to offer the environmental advantages of EA toner. 18 ı According to applicable national waste regulations worldwide.

21 Xerox has introduced a number of products and supplies in 22 and 23 with environmental features that demonstrate our latest advances toward Waste-Free Product goals. Digital Multifunction Systems Xerox multifunction systems offer inherent environmental benefits. By combining the functions of multiple products into one system, Xerox has significantly reduced the raw materials and energy required to provide customers with copying, printing, faxing, scanning, and ing capabilities. Xerox has expanded its line of office multifunction systems in 23 with new black-and-white and color-enabled WorkCentre and WorkCentre Pro models ranging from 16 to 9 pages per minute. Products are modular and easy to upgrade so that customers buy only the functions they need, conserving resources. Advanced controller technology enables concurrent operations true multitasking that make it possible for a multifunction system to replace several individual machines. Scan to file and scan to features eliminate the need to fax or mail hard-copy documents, helping customers reduce paper inventory and minimizing the negative environmental impact of delivering documents by air or ground transportation. This entire line of multifunction systems, including color-enabled products, has earned the ENERGY STAR. Solid Ink Color Printers Solid ink printers use ColorStix ink solid blocks of ink at room temperature. During the printing process, these sticks are melted and jetted through piezoelectric print heads. Images are printed onto a rotating drum and offset onto paper in a single pass of the print engine, achieving nearly 1 percent ink transfer efficiency. By eliminating print cartridges and minimizing the number of other consumable items that must be replaced throughout the life of the machine, solid ink printing conserves valuable material resources. Solid ink printing also generates 95 percent less waste during use than a typical color laser product. Fewer consumables translate into lower operating costs, increased reliability, and ease-of-use. The Phaser 82 is the newest Xerox product featuring solid ink. SmartPaper: Reusable Electronic Paper SmartPaper, a recent Xerox invention, has significant resource-conserving potential. Like traditional paper, it is thin, lightweight, and flexible. Unlike conventional paper, however, it is electronically writeable and erasable and can be reused thousands of times. WorkCentre M15 WorkCentre Pro 65 WorkCentre Pro 4 Color Phaser 82 and ColorStix WorkCentre M55 WorkCentre Pro 9 Gyricon LLC, a wholly owned subsidiary of Xerox, is charged with bringing SmartPaper to market. Gyricon s first application of this technology is SmartPaper esignage Systems. These wireless systems give customers the ability to instantly change the content of pricing or informational displays from one central location, reducing the waste and labor associated with daily management of traditional cardboard signage. In 23 and 24, Gyricon is conducting pilot tests of its esignage solutions with several major customers in the retail, hospitality, and education industries. SmartPaper contains millions of small two-color beads sealed in a thin layer of transparent plastic. When voltage is applied to the surface, the beads rotate to show one color or the other, producing an image. 19

22 From the earliest stages of product development, engineering teams incorporate features that make Xerox products easy to operate. Accessible Products Designing for Universal Use The Xerox Copier Assistant The Xerox Copier Assistant gives customers with disabilities an alternative to the touchscreen for programming copy jobs. Xerox Copier Assistant software is loaded on a personal computer that connects to a Xerox product through an existing external port. The software displays an enlarged user interface on the computer monitor. Embedded text-to-speech software gives a user voice directions for programming a job and reports the job s status as it proceeds to completion. Xerox has developed the Xerox Copier Assistant as an alternative to the touchscreen interface, making it easier for a greater base of users to operate Xerox products. Designing products that are user-friendly for a broad array of customers has been a standard practice at Xerox for more than three decades. Our engineers consider the variation in customers physical characteristics and cognitive function from the earliest stages of product development. We create products that require minimal force to push buttons, lift document covers, and open doors, and we place controls within reach for a wide range of people. User interfaces are designed for reading clarity under a variety of environmental conditions, and buttons are easy to identify and activate. Over the years, we have also developed dozens of accessories such as angled consoles, braille console labels, and start print footswitches to help customers with disabilities be more productive in the workplace. We are proud of these efforts. However, we recognize that there is still a segment of our potential customer base people with certain disabilities and age-related disorders that may have trouble using our products. Closing the Gaps In 21, Xerox completed a thorough assessment of our products, including hardware and software, using the U.S. Government s Section 58 accessibility standards ı as our guide. We found that our products met or exceeded many of the requirements of this standard. However, the assessment revealed some gaps in our products. Our software and web interfaces, for example, were not completely compatible with assistive technology such as screen readers. In the last two years, we have made most of the necessary changes to make our products fully compatible with assistive technology. For future product designs, we have incorporated product accessibility design requirements into our Time To Market product development process. One of the most difficult accessibility problems we encountered during the assessment process centered on the touchscreen technology that allows users to program copy, scan, and fax jobs on Xerox multifunction systems. While providing valuable navigational capability on our feature-rich digital systems, the touchscreen is difficult to use by customers with certain disabilities including visual, tactile, and mobility impairments. Xerox solved this problem for the copy function with the development of the Xerox Copier Assistant. Designed with input from the Association for the Blind and Visually Impaired, the Xerox Copier Assistant helps users, regardless of their abilities, to easily program copy jobs. The Xerox Copier Assistant has earned awards from several organizations, including the Information Technology Association of America and the Regional Center for Independent Living. The Xerox Copier Assistant is available today for nearly all currently marketed Xerox office multifunction systems. ı In 21, amendments to the U.S. Rehabilitation Act of 1973 became effective requiring that electronic and information technology developed, procured, maintained, or used by the U.S. federal government be accessible to all persons including those with disabilities. The U.S. Government Access Board developed Section 58 accessibility standards in support of this amendment. 2

23 Waste-Free Factory goals and ISO 141 have dramatically improved our environmental performance. Waste-Free Facilities An Ongoing Commitment Xerox manages environmental performance in its manufacturing operations to an internal benchmark known as Waste-Free Factory. Our commitment to the goals of this initiative, along with global implementation of an ISO 141-compliant environmental management system, has driven environmental performance improvements for over a decade. Note: Environmental performance data in this section represent total quantities for manufacturing, research and development, and equipment recovery/recycle operations. Starting in 22, these data with the exception of solid waste figures no longer include Xerox office equipment manufacturing operations outsourced in late 21 to Flextronics, a global electronics manufacturing services company. Unless otherwise noted, all numbers represent worldwide totals. Air Emissions Xerox facilities released 85 tons of chemicals and particulates to the air in 22, a 54 percent decrease from 21. Nearly all of this reduction is due to the outsourcing of Xerox s office product manufacturing operations. The majority of Xerox s air emissions are from operations that manufacture Xerox supplies toners, inks, and photoreceptors. With a firm commitment to our Waste-Free Factory goals, these facilities have made tremendous progress in reducing air emissions over the last decade. Reduction, reuse and recycling strategies were put in place in the early 199s and are responsible for reducing air emissions by 87 percent between 1991 and Since that time, production level declines and continuous improvements in our processes have resulted in an additional 5 percent reduction from 1991 levels. 22 Air Emissions: Distribution by Type 9% Particulates 28% Dichloromethane Dichloromethane Management: U.S. Facilities Percentage of Waste Generated 1% 8% 6% 4% 2% % 33% 3% Released to Air 67% <1% Other Regulated Pollutants 63% Other Volatile Organic Compounds 97% Reused or Recycled The single largest component of Xerox s air emissions is dichloromethane (methylene chloride), a necessary solvent for the manufacture of organic photoreceptors. Improvements to the efficiency of manufacturing processes, along with state-of-the-art emission control technologies, have resulted in a 95 percent reduction of dichloromethane emissions to air since Whereas a third of the dichloromethane waste generated was released to air in 1991, only 3 percent is released today. The remainder is captured and collected for on-site reuse or off-site recycling. To date, we have not been able to identify another chemical as a suitable replacement, but the reduction of dichloromethane emissions to the air remains a priority. Air Emissions Supplies Operations Worldwide 8 71 Tons // Note: In late 21, Xerox outsourced most of its office product manufacturing operations to Flextronics. Air emissions from these transferred operations are excluded from Xerox totals starting in 22. This change in reporting accounts for nearly all of the reduction in air emissions from 21 to

24 Waste-Free Facilities U.S. Toxics Release Inventory As part of Xerox s commitment to environmental responsibility and Waste-Free goals, we work to continually reduce our releases to the environment. One measure of our progress is the quantity of releases reportable under the U.S. Environmental Protection Agency s Toxics Release Inventory (TRI). Thousands of Pounds TRI Air Emissions , // TRI Air Emissions: Distribution by Chemical 2% Methyl Isobutyl Ketone 9% Methanol 2% Toluene Xerox TRI reports, submitted annually to the Environmental Protection Agency and relevant U.S. state agencies, summarize releases of certain toxic chemicals to air, water and land. Off-site shipments of these chemicals are also reported. The Environmental Protection Agency makes this information publicly available so local communities know the types and quantities of toxic chemicals that are released by nearby companies. Companies are required to report only certain listed chemicals used above a threshold quantity. Four Xerox U.S. facilities met this reporting requirement for at least one chemical in 22. Total releases of TRI-reportable chemicals declined 12 percent between 21 and 22. Ninety-seven percent of waste generated from TRI-listed chemicals was beneficially managed in 22 and only 3 percent was released to the environment. Nearly all of Xerox s TRI-reportable releases in 22 more than 99 percent were to air. Since 1991, TRI releases to air have been reduced by 94 percent. Recent reductions are due primarily to production decreases and decommissioning of processes. However, the vast majority of the overall decrease is due to the installation of state-of-the-art abatement technologies in the early 199s and continuous improvement in our processes. 11% Methyl Ethyl Ketone 22 Management of TRI Chemicals: U.S. Facilities (Pounds) 76% Dichloromethane Xerox Facility To Air Released to Environment To Sanitary To Sewer Landfill Total Beneficially Managed ı Webster, NY Oklahoma City, OK El Segundo, CA Wilsonville, OR Total 65,664 6,13 71, ,664 6, ,89 (3%) 1,999,956 14,167 8, ,22,988 (97%) ı Beneficially managed waste is treated, recycled, or used for energy recovery on- or off-site. Pollution control devices strictly limit air emissions from Xerox facilities. 22

25 Hazardous Waste Xerox strives to minimize hazardous waste generation and to find disposal solutions that are environmentally benign. Ninety-seven percent of hazardous waste generated in 22 was beneficially managed through treatment, recycling, or energy recovery through fuels blending. The remaining 3 percent was incinerated or disposed in landfills permitted to accept hazardous waste. Worldwide hazardous waste volumes increased by 24 percent between 21 and 22. This increase was largely driven by production increases in our Wilsonville, Oregon, facility. Acquired in 2, the Wilsonville facility generates over 7 percent of Xerox s hazardous waste process wastewater associated with the production of advanced-technology print heads for solid ink printers. The facility treats greater than 99 percent of this wastewater on-site by adjusting the ph through a neutralization process. After treatment, the waste can be discharged into local sanitary sewers. Xerox facilities also generated organic solvent waste in 22. Captured using sophisticated reclamation systems, these organic wastes are either processed on-site for reuse or sent off-site for recycling or energy recovery. Off-site recycling converts waste into reusable products. Hazardous waste generated in our largest manufacturing facility in Webster, New York, increased by 11 percent compared to 21 levels. The primary reason for the increase was the consolidation of all North American photoreceptor manufacturing operations into the Webster site. Changes in production processes were a secondary factor. More than 97 percent of the hazardous waste generated at the Webster site in 22 was recycled, treated, or fuels blended. Three percent was disposed of in landfills or incinerated. Reducing the generation of hazardous waste remains a priority and requires innovative engineering solutions. For nearly ten years, Xerox has used dry ice pellets in place of volatile organic solvents to clean returned Xerox equipment in preparation for remanufacture. This substitution has not only contributed to a reduction in hazardous waste, it has reduced cleaning time by 4 percent and lowered cleaning costs by 35 percent. Xerox has achieved additional reductions in hazardous waste with a proprietary process for coating fuser rolls. The improved process achieves 1 percent transfer efficiency of material to the roll and has cut our use of solvent and raw materials by 7 percent. Hazardous Waste Generated Thousands of Tons Webster, NY Xerox strictly limits releases of hazardous materials to the environment and beneficially manages waste through treatment, reuse, and recycling. Wilsonville, OR Worldwide // Hazardous Waste Management 4% Recycled Off-Site 5% Recycled On-Site 1% Fuels Blended 3% Treated Off-Site 3% Disposed 75% Treated On-Site A Xerox technician cleans a returned copier in preparation for remanufacturing. The process involves spraying a stream of frozen carbon dioxide (dry ice pellets) at entire machine hulks as well as at delicate components. Toner, oils, and grime freeze to the surface of the parts and then fall off into a catch pan where they can be vacuumed or swept away. 23

26 Waste-Free Facilities Non-Hazardous Solid Waste Xerox s Waste-Free Factory initiative has focused our efforts on reducing the amount of non-hazardous solid waste generated in Xerox operations, and responsibly managing waste that can not be eliminated. In 22, Xerox operations worldwide collectively recycled 92 percent of their non-hazardous solid waste. Percentage Recycled Non-Hazardous Solid Waste Recycle Rate: All Facilities 1% 8% 6% 4% 2% % 78% 22 Non-Hazardous Solid Waste Management 39% Process Waste Reused or Recycled 87% 87% 9% 92% 8% // % Equipment Waste Disposed 6% Process Waste Disposed 53% Equipment Waste Reused or Recycled In addition to the typical solid waste generated from manufacturing processes and construction and maintenance projects, Xerox manages thousands of end-of-life machines that Xerox customers return each year to our equipment recovery/recycle facilities. The portion of this returned equipment that can not be reused through remanufacture represents over 5 percent of the waste Xerox operations manage. We classify this material as equipment waste. Because of the unique challenges of managing electronic waste, the following sections present separate solid waste management results for Xerox equipment recovery/recycle operations that handle equipment waste and manufacturing operations that manage process waste. Equipment Waste Equipment that has reached the end of its useful life with a customer is returned to Xerox equipment recovery/recycle facilities. To maximize environmental and financial benefits, Xerox first evaluates returned equipment for its reuse potential. Products suitable for reuse undergo the rigorous equipment remanufacture processes described on pages 12 and 13 of this report. Xerox s equipment remanufacture program has given new life to the equivalent of more than 2 million copiers, printers, and multifunction systems while diverting hundreds of millions of pounds of potential waste from landfills. Returned products that can not be remanufactured are designated as equipment waste. Xerox equipment recovery/recycle operations disassemble these machines, removing parts that can be processed for reuse according to stringent standards for quality and performance. The remaining components are recycled or disposed. In 22, Xerox operations managing equipment waste were able to reuse or recycle 96 percent of this material. Equipment Waste: Equipment Recovery/Recycle Operations Reused or Recycled Disposed Thousands of Tons // Xerox manages thousands of end-of-life machines that customers return each year to our equipment recovery/recycle facilities. 24

27 Manufacturing Process Waste Xerox manufacturing operations generated 45, tons of non-hazardous solid waste in 22. This waste stream consists primarily of paper, corrugated cardboard, wood pallets, and waste toner. Eighty-seven percent of this waste was reused or recycled. Toner Waste Toner represents a significant portion of our solid waste stream. During conventional toner manufacture, large toner particles are mechanically ground and classified into the desired particle size. Toner particle size must be strictly controlled to ensure quality and performance. A by-product of the manufacturing process is toner fines that must be excluded from the final product. Several years ago, Xerox achieved a major reduction in solid waste generation by developing a method to recycle these fines back into the manufacturing process. In 22, the reuse of toner fines coupled with the reuse of post-consumer waste toner returned to Xerox from customer sites prevented the disposal of over 4, tons of solid waste. Starting in 23, a new method of manufacturing toner will reduce the generation of toner waste. Xerox s new emulsion aggregation technology chemically builds toner particles of the desired size, nearly eliminating the generation of out-of-specification toner waste. Despite these advances, not all toner can be reused, and to date, only limited recycling outlets have been identified. Meanwhile, several of our North American plants are sending this waste toner to be burned to produce energy or to be recycled for use as a colorant in the manufacture of other products. Our goal is to reduce to zero the amount of waste toner sent to landfills. Process Waste: Manufacturing, Research, and Development Operations Thousands of Tons Reused or Recycled // Closed-Loop Recycling 48 Disposed Water Consumption and Treatment Worldwide water consumption declined 13 percent between 21 and 22. This reduction was due to declines in production as well as outsourcing of operations to Flextronics. Xerox s largest manufacturing facility in Webster, New York, reduced its water consumption by 8 percent between 21 and 22 and by 45 percent since These reductions were due to both process improvements and production decreases. Wastewater from manufacturing processes is treated before discharge into local sanitary sewers. Xerox adjusts the ph of the wastewater and removes suspended solids as necessary. Xerox facilities have also put in place best management practices to prevent unwanted pollutants from entering waterways via surface contamination and run-off. Extensive sampling of wastewater discharges to both sanitary and storm sewers ensures that discharged water meets Xerox s strict requirements. The Webster site was awarded the New York Water Environment Association s Silver Compliance Award in both 21 and 22. Xerox earned the award by demonstrating greater than 99 percent compliance with all permitted wastewater discharge requirements, based on more than 1,7 samples annually. WorkCentre M55 With the cooperation of local partners, Xerox operations in the United Kingdom have developed a closed loop recycling process for plastic parts. The plant recovers over 5 tons of plastic from its equipment recovery operations annually. Nearly 4 tons of these recovered plastic parts are reused. The remainder over 1 tons are regranulated and formed into new parts by Xerox partners for our WorkCentre family of products. Water Consumption Millions of Gallons Webster, NY Worldwide // Xerox s Webster site earned the New York Water Environment Association s Silver Compliance Award in both 21 and

28 Waste-Free Facilities Energy Consumption Worldwide energy consumption decreased by 14 percent between 21 and 22, primarily due to production decreases and outsourcing of operations to Flextronics. Because the generation and use of energy produces emissions of carbon dioxide a gas that contributes to global climate change Xerox also tracks energy consumption in terms of equivalent carbon dioxide emissions. Our reduction in energy consumption from 21 translated into a 2 percent decrease in carbon dioxide emissions. 22 Energy Use: Distribution by Type 1% Fuel Oil 49% Electricity 5% Natural Gas 22 Energy Consumption in Equivalent Carbon Dioxide (CO 2 ) Emissions 32% CO 2 from Natural Gas 1% CO 2 from Fuel Oil <1% CO 2 from Cleaning 67% CO 2 from Electricity The implementation of ISO 141-conforming environmental management systems in our worldwide manufacturing operations has helped maintain a focus on energy conservation. Our Webster, New York, manufacturing complex reduced energy consumption by 27 percent between 1996 and 22. This reduction was achieved through investments in energy-efficient equipment and processes, as well as declines in production. Most recently, a Webster site photoreceptor manufacturing operation reengineered its air drying process and redesigned its piping system for chilled process water to achieve annual energy savings of 2 million kilowatt hours. The Webster site also saves energy through free cooling. In winter months, the facility cools process water by running it through pipes outdoors instead of using energy-consuming chillers (industrial air conditioners). In Wilsonville, Oregon, a team of engineers recently implemented a number of energy-conserving projects, including a redesigned hot oil/glycol system for the solid ink manufacturing process, yielding annual energy savings of 3.8 million kilowatt hours. Energy-efficient features of Xerox offices include high-efficiency lighting, motion detectors that turn lights off when rooms are unoccupied, extra insulation, and solar film on windows. As described on page 8 of this report, Xerox committed in 23 to a company-wide effort to reduce energy consumption and associated greenhouse gas emissions. Specific reduction targets will be established in 24. Energy Consumption and Equivalent Carbon Dioxide (CO 2 ) Emissions In Webster, New York, Xerox conserves energy through free cooling. During winter months, manufacturing operations cool process water in outdoor pipes instead of using energy-consuming chillers. Energy Consumption (Millions of Therms) Energy Consumption Webster, NY Energy Consumption Worldwide // CO 2 Emissions Worldwide CO 2 Emissions (Thousands of Tons) 26

29 Our goal is to complete 9 percent of remediation activities by 27. Environmental Remediation Xerox s proactive approach to the clean-up of contaminated sites spans nearly two decades. An initial survey of Xerox facilities conducted in the mid-198s identified 68 sites with soil and/or groundwater contamination. Since then, Xerox has completed remediation activities at 49 sites, including a location in Brazil that was finished in 22. The completion of one additional site is planned for 23. Xerox s development of an innovative remediation technology called 2-Phase Extraction has helped us meet the aggressive schedule we have established for completing remediation projects. The company is currently evaluating the potential of bioremediation technology the use of microorganisms to break down soil and groundwater contaminants into benign compounds to further strengthen our ability to return contaminated properties to a useful and beneficial state. Xerox, along with many other companies, has also been identified as a potentially responsible party for non-xerox sites where we once sent waste for disposal. These locations are part of the U.S. Superfund program, a government effort to clean up hazardous waste sites. Through year-end 22, Xerox had been notified of potential liability at 41 Superfund sites. Xerox has fully satisfied its obligations at 26 of these sites, and we are establishing our level of responsibility at ten more. Xerox does not expect to take further action at five sites where we believe we have no responsibility. To reduce the risk of future contamination, Xerox has implemented environmental management systems in all manufacturing facilities worldwide. As a result, only one new contaminated Xerox site has been identified since We also have a well-established audit process to ensure that companies providing waste disposal services to Xerox operate in an environmentally sound manner. Contaminated Sites Remediated Cumulative Number of Sites Remediated // Outlook Goal 5 61 Compliance Penalties Two Xerox operations were assessed compliance penalties in 22. The California Occupational Safety and Health Administration (CalOSHA) issued an $18, citation to a Xerox distribution center in Compton, California, for failure to post clearance heights for powered industrial trucks. The citation was prompted by an accident that occurred in 21 when an employee driving a powered industrial truck failed to clear an overhead storage rack. The distribution center also received a $375 citation for a minor deficiency in recordkeeping. Xerox operations in Webster, New York, received a citation of $4,619 from the U.S. Environmental Protection Agency (EPA) for the omission of one chemical from an EPA-required annual report of toxic releases for calendar year In both cases, Xerox immediately implemented corrective actions to address problem areas. Coupled with regular reviews of proper Xerox operating procedures and routine auditing of operations, these actions minimize the possibility of future incidents. 27

30 Employee Well-Being Health and Safety at Xerox Per 1 Employees 28 Xerox Workplace Injury Rates Workplace Safety Comparisons: U.S. Total Recordable Incidents Per 1 Employees Total Recordable Incidents Day Away From Work Cases 2.1 Industry Computer Xerox Industry Average and Office (U.S.) Benchmark 21 Equipment Workplace Fatalities // Target 1.7 Year Fatalities Cause.62 Note: All figures represent U.S. rates of injuries and illnesses reportable under the Occupational Safety and Health Act (OSHA). Data is the most current available at time of publication Industrial equipment accident, (through September) Michigan, U.S. ı 22 1 Motor vehicle accident, Jodhpur, India 21 2 World Trade Center attack, New York, U.S. 2 2 Motor vehicle accidents, Texas and Michigan, U.S Workplace violence incident, Hawaii, U.S Motor vehicle accident, Utah, U.S. ı This accident occurred at Gyricon LLC, a wholly owned Xerox subsidiary. The protection of employee safety, health, and well-being is a fundamental element of responsible corporate citizenship. It is also critical to building the kind of world-class work environment that motivates employees to do their best. A comprehensive array of programs integrate this commitment into all facets of Xerox s global operations. Reducing Employee Injuries Xerox has established high expectations for safety performance with its Zero Injury program. Introduced in 1997, the program s goal is to reduce injuries to the lowest possible levels among Xerox s varied employee populations manufacturing personnel, office workers, and technicians who operate and service equipment at customer sites. The Zero Injury program has helped Xerox achieve a 5 percent reduction in our Total Recordable Incident (TRI) rate and a 47 percent decline in our Day Away From Work (DAFW) case rate since Xerox made further improvements in safety performance in 22, although we fell short of our 1 percent year-over-year reduction target. Our TRI rate decreased by 7 percent and our DAFW case rate dropped by 2 percent. Making progress toward benchmark safety levels has been an ongoing challenge for Xerox, with each successive reduction in employee injuries more difficult to achieve. To date, we have instituted procedures for identifying and eliminating hazards that can be addressed through engineering controls and process changes. We are also working to create a pervasive corporate culture that reinforces the value of safe work practices each day and in each Xerox operation. In 23, Xerox is continuing training initiatives started in 22 to strengthen supervisors commitment to their leadership role in promoting safety. We have instituted events, such as Xerox Safety Week and a safety awards program, to remind all Xerox employees of the importance of safety, and we are better integrating safety goals into existing management processes. Following an industrial fatality at Xerox s Gyricon subsidiary in July 23, we are also conducting a reassessment of potentially hazardous mechanical equipment in all operations worldwide to ensure that appropriate safety measures are in place. Xerox will continue to strive toward industry benchmarks in safety and has established a 1 percent improvement target for 23. Motor Vehicle Safety With a large population of Xerox service technicians who spend a significant part of their time driving to and from customer locations, motor vehicle safety is a key component of Xerox s efforts to reduce employee injuries. Safety programs in place worldwide are tailored to local priorities and circumstances. The importance of these programs has been heightened as a result of several motor vehicle-related fatalities since Our North American sales and service operations, which employ more than 5, service technicians, conduct comprehensive driver training and annual reviews of employee driving records.

31 The protection of employee safety, health and well-being is fundamental to good corporate citizenship and to building a work environment that motivates employees to do their best. Additionally, company vehicles incorporate safety features such as daytime running lights, side-impact air bags, and protective caging between car drivers and parts storage areas. Ergonomics Musculoskeletal disorders represent more than 5 percent of our work-related injuries and illnesses. As a result, the application of ergonomic principles is another important element of our injury reduction program. Workers compensation claims attributable to musculoskeletal disorders peaked in Since then, Xerox has taken significant steps to reduce these injuries, and has experienced a steady decline in the number of ergonomic cases and related costs as a result. For example, the rate of musculoskeletal injuries within U.S. operations dropped 4 percent between 1992 and 22. Musculoskeletal Injury Rate: U.S. Operations Per 1 Employees // The ergonomic assessments that have contributed to reductions in musculoskeletal disorders span the full range of Xerox operations. Manufacturing: Nearly every workstation in Xerox facilities worldwide has been evaluated for ergonomic hazards. Ergonomically designed tools and assist devices, such as tilt tables, lifts, and hoists, make it easier for employees to maneuver parts and equipment during assembly. Office: Online ergonomic tools and assistance, including an office self-evaluation program, are available to employees worldwide. Office furniture standards include ergonomic design requirements, including adjustable chairs and keyboard trays. Service: Periodic reviews of service technicians tools ensure they are designed with ergonomics in mind. Tools posing an unacceptable safety risk are replaced. Xerox employees use adjustable fixtures that rotate and reposition parts for easy accessibility during machine assembly. Ergonomic solutions like these have resulted in a 4 percent reduction in musculoskeletal injuries among U.S. employees between 1992 and 22. In addition to correcting problems in existing jobs, Xerox integrates ergonomic considerations into the design of new products and manufacturing processes. The aim is to identify and eliminate potential safety hazards to Xerox employees who will assemble and service our equipment. Medical Services Xerox offers a broad spectrum of employee health and medical services. Medical evaluations targeted to specific populations of Xerox employees are designed to ensure fitness for work, promote good health, and provide early diagnosis and prompt medical intervention for potential health issues. All of our major locations are staffed with professionals trained to respond to medical emergencies. Xerox medical personnel monitor public health issues that have the potential to affect Xerox people and business operations and then define appropriate protective measures. In 23, Xerox closely followed the worldwide outbreak of Severe Acute Respiratory Syndrome (SARS), issuing periodic travel advisories. The National Irish Safety Organization and Northern Ireland Safety Group have recognized Xerox Technology Park in Dundalk, Ireland, for excellence in occupational health and safety. The Dundalk manufacturing site earned these groups prestigious North East Regional Award in 22 and the Best New Entry (Large Size Company) Award in

32 Employee Well-Being Emergency Preparedness Xerox has established a comprehensive emergency preparedness and response program to protect Xerox people and property, surrounding communities, and the environment. A Xerox corporate standard on emergency preparedness, revised in May 2, requires all Xerox operations worldwide to have documented plans for responding to fires, chemical releases, natural disasters, and other potential incidents. Emergency Preparedness Requirements for Xerox Facilities Perform a risk assessment of potential hazards, such as fire, explosion, chemicals, biological agents, radiation, natural disasters, and security/violence issues. Develop and document a facility-specific emergency response plan to address all identified risks, including provisions for: Emergency response coordination and support personnel. Facility shelter-in-place, evacuation and re-entry. Emergency alerts and employee communications (e.g. alarms). Auxiliary power for emergency lighting and alert systems. Communicate the plan to employees. Conduct training in safe evacuation, shelter-in-place procedures, and rescue and response methods. Conduct annual drills to ensure plan readiness. Review risk assessment and emergency response plan at least annually, revising as necessary. The terrorist attacks of September 11, 21, followed by cases of anthrax in the U.S. postal system later that autumn, profoundly underscored the importance of these plans for all Xerox operations. These events have also prompted us to expand the traditional scope of emergency planning beyond fires and chemical spills to events not previously considered a potential risk. To do so, we are developing provisions for scenarios such as radiological or chemical incidents when it is safer for employees to take shelter inside buildings than to evacuate. Located within 1 miles of a nuclear power plant, our Webster, New York, manufacturing complex is one of the first sites to define detailed shelter-in-place actions for radiological events. A team of safety, environmental, medical, security, and facilities personnel completed this activity in June 23. A site-wide drill conducted in July confirmed that all key elements of the radiological emergency response plan were in place. Several non-radiological incidents that have occurred since then have further tested Webster s shelter-in-place procedures. While identifying areas for improvement, these events have also proven the value of this unique planning. All Xerox operations are integrating emergency preparedness and response planning into existing business review processes. Routinely scheduled management reviews, coupled with drills and corporate audits, verify that plans provide adequate protection to Xerox and its people. Planning for Emergencies Emergency Response (ER) Crisis Management (CM) Business Continuity (BC) Level of Activity ER CM BC Time Emergency response is the initial set of actions taken in an emergency situation to protect Xerox people and property, surrounding communities, and the environment. Crisis management and business continuity planning ensure that Xerox has defined longer-term activities to protect our reputation and our ability to maintain business operations. This schematic demonstrates the relationship between these response phases. 3

33 Monitoring Workplace Exposures To protect employees from unsafe exposures to chemicals and physical agents such as noise and radiation in the workplace, Xerox has defined strict exposure limits for worldwide manufacturing, research, and service operations. For some materials including toners, solvents, and metals Xerox has established limits that go beyond even the strictest regulations and standards to provide additional employee protection. Xerox facilities conduct routine monitoring of employees exposures to workplace chemicals. Monitoring conducted in 22 indicated that 91 percent of employee exposures were within Xerox limits. Among the 9 percent of cases where chemical levels exceeded Xerox limits, two-thirds were protected overexposures cases in which employees avoided unsafe exposures through the use of personal protective equipment such as respirators. The remaining one-third of overexposures were considered unprotected. In all instances, steps were taken immediately to reduce overexposure through engineering controls or adherence to safe job procedures. Health Studies: Establishing the Safety of Toner As one of the world s largest manufacturers and distributors of toners, Xerox has long recognized its responsibility to establish the safety of these materials for employees and customers. We initiated three major health studies nearly 2 years ago to examine the potential long-term health effects of toner. The first of these, completed in 1989, was a comprehensive laboratory study. Results indicated some health effects at very high levels of dust exposure, levels unlikely to be experienced by workers in Xerox plants. Nonetheless, Xerox lowered toner dust levels in our factories at that time and instituted strict controls on dust emissions from Xerox products. Today s machine emission limits are much lower than regulatory workplace exposure limits and the requirements of the strictest ecolabels. A Xerox safety engineer evaluates air quality in an electronics manufacturing clean room operation. Workplace Exposure Limits Respirable Dust Xerox Limit Dutch Limit U.S. Limit Total Dust Milligrams per Cubic Meter The other two health studies focus on Xerox employees who manufacture toner and service our equipment. One uses standardized techniques to compare the causes of death for these Xerox populations to causes of death for the overall U.S. population in order to determine if there are any work-related mortality patterns. This study involves an evaluation of more than 32, people who worked at Xerox between 196 and The second study evaluates the potential health effects of toner on current Xerox manufacturing and service employees exposed to toner, with a focus on the respiratory system. To date, neither of these studies has shown evidence of chronic health effects due to toner exposure. Xerox will continue to evaluate the health effects of conventional toner, as well as new toner and ink technologies, through its ongoing studies. Promoting Employee Wellness Xerox encourages healthy behaviors and a proper balance between work and personal life in a number of ways. Tips on nutrition, fitness, self-care, and other aspects of healthy living are shared with employees through the Xerox intranet and other means. Each Xerox site tailors offerings such as health screenings, fitness classes, and instructional programs to meet local employees needs and preferences. Children of Xerox employees around the world participated in Xerox s 23 Safety Week poster exhibition. 31

34 Employee and Community Involvement Partnerships for Progress Recognizing Employee Contributions Xerox employees form the backbone of our day-to-day efforts to achieve corporate safety goals and commitments to environmental and social responsibility. Working in Xerox facilities and surrounding communities, our people invest their experience, creativity, and energy in putting these commitments into practice. Earth Awards Xerox first established its Earth Awards program in 199 to recognize grassroots employee efforts to practice the Three Rs reduce, reuse, and recycle. Each year, teams and individuals from around the world are nominated in categories such as energy and resource conservation, environmental leadership, and community involvement. The Xerox Earth Awards program recognizes employees contributions to environmental protection. Showcasing environmental innovations throughout the global Xerox community, the Earth Awards program is an important communications vehicle. The program has increased employee awareness of Xerox s environmental goals and initiatives and inspired new efforts throughout the company. Xerox presented Earth Awards to fifteen employee teams in 23. Selected from thirty-four nominations, these teams are responsible for substantial environmental benefits for local communities and cost savings of nearly $2 million for Xerox. Mike Payne (left), Brendan Carragher, and David McDermott (absent from photo) earned an Earth Award by developing new processes for reusing parts, such as motors and solenoids, that were previously scrapped during the remanufacture of Xerox production printers in Dundalk, Ireland. The team s efforts diverted over 6,7 pounds of parts from landfills in 22. Safety Awards Modeled after the Earth Awards, Xerox s Safety Awards program was instituted in 23 to raise awareness of the importance of workplace safety. The program seeks out best practices in all areas of workplace safety, including fire protection, industrial hygiene, and ergonomics. In its first year, the program generated fifty-one nominations from employees around the world. Five individuals and eight teams were honored with awards, including: A team of employees from Xerox s Rampur, India, manufacturing facility that proactively identified and eliminated a potential safety hazard in a standard maintenance procedure for toner manufacturing equipment. These efforts and others have earned the plant an outstanding safety record and recognition including the British Safety Council s 22 National Safety Award. A Xerox team from Mitcheldean, United Kingdom, that implemented a 36-degree safety risk assessment program. In contrast to traditional evaluations limited to equipment hazards, the team s approach gives equal consideration to the processes that employees follow when working with and around equipment. More than 15 evaluations have identified risks and preventive measures for activities ranging from manufacturing tasks to motor vehicle safety. 32 The Xerox Safety Awards recognize employees for leadership efforts in promoting workplace safety. Some of our 23 award winners from Webster, New York, are pictured here. Bill Jackson, who developed a comprehensive safety program for Xerox s New York/New Jersey service organization. By integrating safety considerations into day-to-day business processes, Bill led this organization in reducing the severity of work-related injuries by 66 percent between 21 and 22.

35 Community Outreach As a global business leader, Xerox recognizes the importance of extending our commitment to sustainable growth beyond our corporate boundaries. This page features a few of the many outreach activities that Xerox and its people support. Emergency Response Among the many Xerox people who contributed to emergency response efforts in the days and months following September 11, 21, were the members of the Xerox ambulance crew who traveled from our manufacturing plant in upstate New York to provide medical care for rescue workers at Ground Zero. In recognition of these efforts, the Fire Department of New York City presented the crew with a letter and a plaque of commendation in 23. Earth Day Xerox facilities around the world celebrate Earth Day each year, organizing local events to promote environmental awareness among employees and surrounding communities. In 23, our Rampur, India, manufacturing plant held its ninth annual Earth Day fair, featuring 3-D model and poster competitions and poetry recitations. In Canada, staff volunteers from the Xerox Research Centre participated in the City of Mississauga s annual Earth Day clean-up activities. In 23, the Fire Department of New York City recognized the Xerox ambulance crew for their work at Ground Zero following September 11, 21. Educational Support Xerox sponsors students, research, and coursework in environmental design and management at institutions including Clarkson University in the United States, Imperial College and the University of Surrey in the United Kingdom, and the University of Eindhoven in the Netherlands. Xerox is also working with Syracuse University on indoor air quality research. In 23, Xerox Brazil announced a partnership with SENAI-SP, Brazil s top technical school, to start the largest professional educational center for digital printing in Latin America. The Digital Print Educational Center, opened this year, expects up to 1,8 students annually. The 7,5-square-foot facility houses leading-edge Xerox equipment and features classrooms and workshops for training and developing applications for digital printing technology. More than 4 school children participated in Xerox Earth Day activities in Rampur, India. Xerox Brazil also funds a range of children s educational programs. Each year, the Mangueira Olympic Project gives more than 1,5 children the opportunity to participate in sports activities. Camp Mangueira trains young people preparing to enter the job market. Since the camp s opening in 1988, over 5, adolescents have taken advantage of the program. In the U.S., educational support is central to our community involvement programs. The Xerox Science Consultant Program is a partnership with local elementary schools that sends Xerox engineers and scientists into classrooms twice a month to engage young learners in biology, chemistry, and earth sciences. The program marks its thirty-fifth anniversary this year. Employee volunteers from the Xerox Technology Park in Dundalk, Ireland, were involved in several community outreach programs in 22, including the planting of a wildflower garden three miles from the site. The facility s efforts to share safety expertise with local organizations were recognized with the Irish Health and Safety Authority s 22 Good Neighbour Award. 33