Environmental Management Environmental Accounting To grasp the efforts for environmental conservation activities from a cost-effect perspective, the Oki group introduced environmental accounting in 1999, pursuing its activities in an efficient way by putting the effect of its investments to maximum use. Fiscal 2005 Environmental Accounting Records In fiscal 2005, we conducted accounting for Oki Electric and 25 group companies (32 sites) in Japan and overseas (the companies falling into the scope of environmental accounting). The results revealed that we are now covering almost 100% of the manufacturing and sales divisions in terms of turnover. The characteristics of environmental accounting in fiscal 2005 were as shown below. The numbers in parentheses are for fiscal 2004. On page 48, you can find separate data for Oki Electric and group companies in Japan and overseas. dThe amount of investments increased more than twofold to 710 million yen (300 million yen). This is due to the introduction of highly efficient freezers as a measure to save energy, and renewing and adding equipment to our waste water treatment facilities as a measure to prevent environmental pollution. dThe costs stayed about the same at 3.03 billion yen (3.15 billion yen). dThe economic benefit amounted to -80 million yen (-400 million yen). The quantities of waste and used products, etc. sold by us increased, so that the expense saving benefit increased by 30 million yen. Although we implemented various energy-saving measures, the increases in raw oil prices affected the results to that the economic benefit is a negative value. dWith respect to the environmental conservation effect, our CO2 emissions shrunk by 20% in absolute quantities thanks to our various energy and resource-saving measures. And since we continued our zero emission efforts, the quantities of final waste processing increased only very little. 'Environmental Conservation Costs dInvestments/Costs (Unit: million yen) Key Activities Category • Pollution prevention cost Investments, and maintenance and management costs for facilities to prevent pollution Business • Global environmental conservation cost Investments, and maintenance and management costs for facilities to conserve energy area cost • Resource recycling cost Investments in facilities for internal processing of organic waste liquids, costs for waste recycling Sub-total Costs for green procurement (chemical substance surveys), costs for improving the aggregation system for chemical substances contained in products) Upstream/downstream cost Cost for acquiring certification, and for maintaining and managing the environmental management system Administration cost Investments into equipment to shift to lead-free soldering, costs for research and development on lead-free soldering R&D cost Costs for the greening of production plants, costs for activities contributing to the community Social activity cost Cost for reserves to respond to environmental damages Other cost Total Investment 2004 2005 72 182 187 326 5 144 264 652 32 2 0 25 1 36 0 0 715 297 Costs 2004 2005 1070 1,051 343 414 622 732 2,035 2,197 254 173 680 514 171 135 2 2 9 11 3,151 3,032 'Environmental Conservation Benefit dEconomic Benefit (Unit: million yen) Category Reduced use of electricity, oils, gases, packaging materials, etc. in business activities Effect from energy and Cost resource conservation reduction Effect from reduction effect of processing costs −356 Reduction of waste through recycling, etc. in business activities Sale of valuable waste generated in business activities Expense saving benefit dEnvironmental Conservation Effect Environmental impact index CO2 emissions (1,000 tons-CO2) Effect 2005 2004 Key Activities Sale of valuables from used products Total −600 −1 −42 240 33 −84 223 20 −399 Final waste Waste emissions processing (tons) Impact 2005 2004 Difference compared to previous fiscal year 310 389 79 38 81 43 Transition of Environmental Accounting 800 700 dCosts 753 415 332 285 297 200 100 98 2001 2002 2003 2004 2005 Fiscal 2,831 2,720 2,974 3,151 40 800 1,012 1,042 200 2,000 133 1,500 106 1,000 33 33 30 694 25 477 20 17 10 200 1 0 1999 2000 2001 2002 38 2003 -200 -400 0 33 33 2004 -84 2005 Fiscal 33 33 -2.77 year -10 25 -13 -399 25 17 17 2000 [Accounting Period] April 1, 2005 through 31 March, 2006 Effect against cost (%) 1,000 3,032 2,500 1999 year 1,200 400 3,190 88 96 98 2002 2003 2004 0 2000 dEconomic Benefit 600 3,070 95 100 500 0 1999 Economic benefit (million yen) Costs (million yen) 500 300 300 3,000 600 400 3,500 273 715 08 2001 0 2005 Fiscal 133 year 106 133 106 Costs per site (million yen) dInvestment Investments for environmental conservation (million yen) Seven years have passed since we started environmental accounting. The graphs below show the investments, costs and economic effects of our environmental conservation activities. 88 96 88 96 [Accounting conditions] (1) The calculation standards are based on the “Environmental Accounting Guidelines (2002 Edition)”published by the Ministry of the Environment. (2) A part of the accounting includes figures relating to affiliated companies located within sites that participated in the environmental impact management. (3) For costs where environmental conservation costs overlap with other costs, only the portion of the costs related to environmental conservation is counted. (4) The depreciation cost of investments is calculated using the fixed installment method for a period of three years. The economic benefit achieved with these investments is calculated for three years, in line with the depreciation period. (5) Personnel costs are calculated by prorating the personnel costs for the total time spent on environmental conservation activities. (6) The cost reduction effect and the environmental conservation effect are the values of the current fiscal year reduced by the values of the previous year. (7) The expense saving benefit represents the value for the current fiscal year. ENVIRONMENTAL REPORT 2006 •