Sustainability Foreword

Foreword

Message from Sunil Gupta, Managing Director

[G4-1], [G4-13], [G4-15],[G4-56]

I had the honour of joining the Fuji Xerox Australia team in July 2016 and although this report is primarily a reflection of the two years prior to my appointment, I would like to recognise upfront how proud I am to be part of a team who has exhibited resilience to change over such a transformational period, and an unwavering commitment to our customers.

The industry and broader business environment is undergoing rapid change with technology innovation and a shift to digitisation being major enablers. As a result, our business has continued to change in structure and strategic direction, which has meant our people have had to embrace rapid changes in their work environment, business objectives and performance expectations. The ability to continually adapt and be resilient to change is no mean feat, and will remain a highly desirable attribute of our people for the foreseeable future.

Fuji Xerox Australia has maintained its lead in market share in managed print services[1], office and production solutions and are growing our business in solutions and services. Continuing to help customers solve their management challenges and improve their business processes, as we have for over 50 years, remains a high priority for us.

Throughout this, our commitment to sustainable development, environmentally, socially and economically remains strong. We are led by Fuji Xerox Co Ltd, a United Nations Global Compact (UNGC) LEAD company since 2010, and a signatory to the UNGC since 2002. We view the principles of the UNGC as fundamental to our own values and they are incorporated into the Fuji Xerox code of conduct. We also present the principles to our suppliers as a key requirement for ethical procurement.

We also see opportunity in what we do to contribute to the achievement of the Sustainable Development Goals (SDGs) launched in September 2015. This agenda calls on all UN member states to work collaboratively to achieve sustainable development goals in areas such as poverty, hunger, energy, climate change and peaceful prosperous societies. Fuji Xerox has made a commitment to act through our core business to implement initiatives for achieving the SDGs. As a first step in exploring where Fuji Xerox Australia can have the greatest impact, we have identified connections to the SDGs against material topics for managing our sustainability performance in this report.

Fuji Xerox Australia has been well recognised for a number of years as a leader in sustainability including award recognition in the UN 500 Roll of Honour and a Banksia Award for leadership in sustainability. Most recently, congratulations goes to our team for receiving a High Performers Award from the Australian Packaging Covenant in the Communications and Electronics category for the last three consecutive years. This is testament to our ongoing commitment to packaging sustainability and focus on continuous improvement across our value chain.

Further reflecting on the past couple of years, and with climate change being a compelling focus for society to address, it was great to see that we had reduced our carbon footprint in the report period, with a 12 percent reduction in Scope 1 and 2 emissions in 14/15 exceeding our target of 10 percent over the prior year, and a further 4 percent reduction in 15/16. Our longer term focus is to reduce our Scope 1 and 2 emissions by 30 percent by 2020 over 2005 levels and we have also set a target to reduce our emissions by 5 percent in 16/17 to ensure we remain on track.

We continue to meet our zero waste to landfill commitment for devices, parts and consumables collected from our customers and have been working hard to optimise the logistics for collection of end-of-life parts and consumables across this vast country through state based sortation. This process reduced b-double truck movements by 32,000kms in 14/15 and by 84,000km in 15/16.

Unfortunately our Scope 3 logistics emissions increased in 15/16. This was primarily driven by the need to react to significantly increased sales of equipment. As supply was brought into line with demand, air freight volumes were reduced to 14/15 levels during the latter part of the financial year. Stronger governance was implemented to control the use of air freight, with all air freight orders now requiring senior management approval.

In our paper business we have continued to position ourselves as a trusted advisor on responsible paper procurement with our customers, maintaining our FSC and PEFC chain of custody certification and with 100 percent of papers sold to our Australian customers being either FSC certified, PEFC certified, FSC carbon neutral or made from recycled materials.

It has been a challenging couple of years from an employee engagement perspective. The competitive landscape coupled with multiple changes in the leadership of our business, major system and process changes, and the need for a stringent focus on the profitability of our business, have led us to implement a number of decisions. This included revisions to remuneration benefits and voluntary and involuntary redundancies. While such moves are hard to make and of course challenged employee engagement, they were essential decisions to ensure we remain viable for the long term. That said, our number one focus going forward is employee engagement and we are working to ensure our people believe we are the best company to work for with a safe and enriching work culture and experience.

Our focus on our people extends to supporting the community in which we operate. We have a number of employees already involved in various community initiatives however our numbers have dropped year on year. We are working on ways to encourage more involvement including participation in our Workplace Giving Program (100% matched), mentoring and community initiatives. We also support our employees that are part of volunteer emergency service efforts with additional leave to help. We will be making a concerted effort to provide a diverse range of meaningful opportunities to grow participation across our diverse workforce, with people managers being asked to ensure their people have the time to do so.

I thank our people, customers, shareholders, suppliers and other partners for their loyalty, commitment and support over the past few years. We have had some great successes to be celebrated. Our future looks bright and I look forward to leading this great company into the future.

Sincerely,

Sunil Gupta

Managing Director

Fuji Xerox Australia

[1] Leader in A3 MFD shipments, IDC 2016 & leader in Managed Print Services, Quorcica 2016.