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| Established: January 20, 2002 |
DENSO's Concept of Environmental Accounting
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1. Targets:
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<Basic activities>
| 1) |
Establish a system to assure the appropriate accuracy and consistency of data for compiling business management indices |
| 2) |
Compile and follow up effectively and efficiently focusing on the data of environmental activities |
| 3) |
Begin compiling data wherever possible |
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2.Purposes:
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| Internal |
| 1) |
Reduce environmental loads |
| 2) |
Effective environmental investment and cost reductions |
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Evaluate economic impact of environmental activities and improve the quality of business decisions |
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Develop cost-consciousness and promote cost reduction activities |
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Heighten employees' motivation for the promotion of environmental activities |
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| External |
| 1) |
Improve transparency with full disclosure policies |
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Disclose the economic efficiencies of environmental activities to stakeholders by publishing information |
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3.Activity policies:
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| 1) |
Calculate data using the guidelines of the Environmental Accounting Guidebook published by the Japanese Environment Agency (presently, the Environment Ministry) |
| 2) |
Give first priority to utilization in business management; environment conservation costs to be disclosed externally include capital investment and expenses (personnel costs, operating costs, etc.) |
| 3) |
Results include the real, actual effects; other effects such as estimates will be interpolated from data derived after definitive calculations
The Effect Index indicates expenditure amounts and quantities. 'Real effects' refers to gross revenue, not the net balance after deducting related costs. |
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4.Effects:
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1) Reduction of current costs (cost reductions due to activities)
2) Reduction of future costs (avoiding environmental risks)
3) Effects of Eco-Fund; SRI (Socially Responsible Investment)
4) Contribution to product revenues (eco-friendly products)
5) Corporate image improvement (improvement of how we are evaluated by society)
6) Comparison with other corporations using standardized data |
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Basics of Environmental Accounting Calculations
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1.Basic principles:
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| 1) |
Include environmental and other business balances for which we attempted to reduce the environmental loads |
| 2) |
Include the range of activities that mainly aim to reduce environmental loads |
| 3) |
Compile all amounts of capital investment in the fiscal year of implementation |
| 4) |
Effects are limited to calculations based on specific verification |
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Application of Calculation Methods of Conservation Costs |
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Calculate for the current fiscal year |
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Facilities are accounted for as a lump-sum cost in the fiscal year placed in service, and depreciation costs are not included
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2.Basic Concepts for Application of Calculation Methods of Conservation Costs
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Production or non-production facilities that contribute to pollution prevention or environmental conservation in business activities |
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| 1) |
Resource conservation or energy conservation equipment |
| 2) |
Incidental facilities for pollution prevention |
| 3) |
Manufacturing facilities of environmentally-conscious products (estimate the extent of contributions individually, and allocate costs on a pro-rata basis) |
| 4) |
Research facilities of environmentally-conscious products (estimate the extent of contributions individually, and allocate costs on a pro-rata basis) |
| 5) |
All manufacturing facilities (estimate the extent of contributions individually, and allocate costs on a pro-rata basis) |
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Environmental conservation costs generated in every division of development and design, manufacturing, and physical distribution management |
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| 1) |
Development and design divisions of environmentally-conscious products |
| 2) |
Expenses and personnel cost of environmental conservation |
| 3) |
Expenses and personnel cost related to Environment Committee and management systems |
| 4) |
Research expenses of environmentally-conscious products |
| 5) |
All design divisions for products (estimate the extent of contributions individually, and allocate costs on a pro-rata basis) |
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3.Basic Concepts of Application of Calculation Methods of the Effects
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| Verify the relevant effect corresponding to environmental conservation costs and calculate both effects and costs in terms of monetary amounts and quantities |
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Real effects
'Real effects' refers to gross revenue, not the net balance after deducting related costs. |
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1) Operating revenues |
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2) Cost reductions and savings |
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Estimated effects |
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'Estimated effects' includes only objective and specific items of the following: |
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| 1) |
Benefit contribution (added value contribution, awareness-raising contribution, and advertising) |
| 2) |
Accident risk aversion (renovation avoidance, regulations) |
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