Environmental Management
/ Eco Indicator and Environmental Accounting
Eco Indicator (EI)
The DENSO Environment Committee began investigating environmental indicators in fiscal 2002, defining the concept that our business growth must be in harmony with society's sustainability. The indicators should be a tool to measure our activities. The committee developed and trialed the Eco Indicator (EI) to analyze our environmental-preservation activities.

Eco Indicator Stages

Developing the Eco Indicator
Key points in developing the Eco Indicator were 1) to develop a method which was unaffected by fluctuations in production volume, and 2) to increase the accuracy of data used. For the first point, we defined the EI as environmental impact divided by revenues. To ensure accuracy we defined 34 factors affecting the environment, such as recyclability ratio, lead content, and CO2 emissions, and categorized them into three ranks by degree of effect. These factors are averaged to produce indexes.

Eco Indicator Computation

Environmental Efficiency Boosted by 10% in Two Years
The EI was calculated on a trial basis in fiscal 2002, indicating a 10% improvement in environmental efficiency in the two years since the base year of fiscal 2000, and an 18% improvement for the three-year period starting in fiscal 1999. Results confirmed that the major contributors were a reduction in PRTR-controlled substances, "paperless" operations, and waste reduction (zero emissions).
We are continuing to improve environmental efficiency, aiming to achieve an EI of 80, set as the final goal for fiscal 2005 in EcoVision 2005.

Eco Indicator Trends and Major Contributing Factors
Note: Indexed to 2000 levels as 100


Environmental Management
/Our Environmental Perspective
Environmental Team
The Environment Committee, established in 1992 with the company president as chairperson, evaluates and adopts company-wide policies, objectives and strategies related to environmental protection. Five subcommittees were established in 2000 for specific areas such as product technology and energy, and specialized working and study groups such as the Energy Conservation Process Research Council were formed to respond to the changing environmental situation. To support for environmental management that is compatible with consolidated management, the DENSO Group (Domestic) Environment and Safety Committee and DENSO Group Overseas Regional Environment Committee were created in 1999.
In March 2003 the committee was restructured to strengthen strategic planning functions, and the five subcommittees were grouped into three sectors organized by function-products, manufacturing, and environmental communication. A new "substances of environmental concern" (SOC) project was launched to further reduce the use of chemical substances and heavy metals.


Environmental Management
/Consolidated Environmental Management
Implementing a Support System Using Information Technology
As part of consolidated management, a survey of group companies was conducted in fiscal 2001. Results showed that there was strong demand for shared environmental information, including group-company activities, introductions of specific improvement projects, and information on legal and regulatory issues.
DENSO addressed these concerns by launching the shared environmental information system in August 2002 for Japan-based companies, along with trials by overseas companies. Users can access the database to retrieve a variety of environmental information.

DENSO Group Eco and Safety Communication System


Development and Design
/Helping Prevent Global Warming from
  Car Air Conditioners
The World's First CO2 Car Air Conditioner
In December 2002, the wolrd's first car air-conditioning system which does not use HFC refrigerant was installed into the world's first fuel-cell automobile.
The CFC-substitute refrigerant
Toyota FCHV
with CO2 car air conditioner
HFC-134a is widely used as a car air-conditioner refrigerant, because it poses no danger to the ozone layer. Unfortunately, it does contribute to global warming.
In response, DENSO turned to CO2 (carbon dioxide), which has a low global-warming coefficient, and began research into a new type of air conditioner using compressed CO2 for cooling and heating. We finished developing the system in June 2001, and the system was installed in a fuel-cell hybrid vehicle (FCHV).
The system will be widely available after a variety of improvements including basic performance enhancements, weight and cost reductions, developing

CO2 Car Air Conditione
CO2 car air conditioner
Features of CO2 refrigerant
1 Global-warming coefficient only 1/1300th of HFC-134a
2 Natural compound; non-toxic and non-combustible
3 CO2 can be refined and distilled from chemical-plant emissions, eliminating the need for any special refrigerant-manufacturing processes
4 Large heat-pump effect (ability to transfer heat) through refrigerant compression and expansion


Development and Design
/Cleaning up Exhaust Emissions
New Common-rail System Overseas Manufacturing Begins
Ten Major New Products Award ceremony
(November 2002)
The new common-rail system with a fuel-injection pressure of 1,800 bar, developed in fiscal 2001, entered production in Thailand at SDM*1 in June 2002, and in Hungary (DMHU)*2 in November 2002. The common-rail system also was selected by Mazda Motor Corp. for its new Atenza model (sold in Europe as the Mazda 6).
Compared to the old system at 1,450 bar, the new design reduced PM generation by 80% to 90%, clearing the next-generation European exhaust-gas regulations scheduled to take effect in 2005. The system was recognized in 2002 by the receipt from the Nikkan Kogyo Shimbun (Japan's leading industrial publication) of the 45th Ten Major New Products Award in 2002.
* 1 SDM: SIAM DENSO Manufacturing
* 2 DMHU: DENSO Manufacturing Hungary


Development and Design
/Cleaning up Exhaust Emissions
UC Injector Developed for Gasoline-fueled Engines
Injectors are crucial engine parts which inject micro-droplets of fuel into the engine port, creating a fuel mist. The smaller the droplets, the better they mix with the air, and the more complete the combustion becomes. This means that the exhaust has less hydrocarbons (HC) from non-combusted fuel.
DENSO developed a technology for fabricating ultra-small injection holes which produce droplets about 30% smaller. This reduces HC by 5% to 10%, and DENSO also managed to make the new design 25% lighter.
Commercialized as the UC* injector, it has been used since September 2002 in the Toyota Caldina and Camry models sold in Japan, and the Prado model for the U.S. market, all of which have been certified as low-emission vehicles.
* UC: Universal-design Concept

UC Injector

Development and Design
/Improving Recyclability
Substitute-materials Technologies
Lead is commonly added to improve durability of electric-motor brushes. Together with group company ASMO Co., Ltd., a brush manufacturer, DENSO developed a new lead-free material. In advance of European regulations, we eliminated lead from electric motors in 15 million units produced between November 2002 and March 2003.
Hexavalent chrome, used to prevent rust, has been used in many DENSO products as a component of zinc-galvanizing liquid. We began developing substitute technologies in the mid-1990s, gradually introducing them as they became practical. In March 2002 we succeeded in replacing hexavalent chrome with a harmless substance which is now used at our Nishio Plant.


Production
/Promoting Resource Conservation
Results in Japan
We achieved zero emissions* at ten business locations by September 2002, and were able to achieve zero emissions for all 14 locations 18 months ahead of our goal.
DENSO's definition of zero emissions is not limited to industrial waste, but also includes general refuse. It emphasizes recovery of resources (material recycling) rather than recovery of the heat generated by incineration (thermal recycling). For this reason, our plants are developing materials-recycling technologies and new recycling routes not only for industrial wastes, with their large environmental impact, but also general refuse. We have established Eco Plaza recycling centers, where small-volume items are accumulated prior to processing.
Wastes generated in fiscal 2002 were 95 tons (a 99% reduction from fiscal 1990 levels), representing a 99% recycling ratio (a 2% improvement over the prior year).
Activity was expanded to other group companies in fiscal 2002, and already seven domestic and one overseas group companies have achieved zero emissions.
*The DENSO definition of "zero emissions":
 No landfill wastes, representing 100% recycling
 Scope: All industrial and general wastes
 Application range: Direct and indirect landfill
Direct and indirect landfill waste was less than 1% of that of fiscal 1999.

Major Activities in Fiscal 2002


Production
/Energy Conservation
Activities Reducing CO2 Emissions
To achieve EcoVision 2005's target of reducing CO2 emissions from manufacturing plants to 90% of our 1990 level by fiscal 2010, DENSO is focusing on three major efforts: developing the "Perfect Energy Factory" with the smallest possible energy loss, developing new energy-conservation technologies, and installing cogeneration

CO2 Emission Tonnage in Manufacturing and Emissions Per Unit Revenue
Base unit: CO2 emissions per unit revenue


Recycling
/Toward a Recycling Society
CFC/HFC Recovery and Destruction
To prevent specified CFCs (ozone-depleting substances) and their substitutes, HFCs (greenhouse gases) used as refrigerants in automobile air conditioners from being released to the atmosphere, DENSO developed a refrigerant-recovery system in 1990 and began supplying it to service stations and automobile dealers. In 1998 we cooperated with the Japan Automobile Manufacturers Association and the Japan Auto Parts Industries Association to establish a common system for the recovery and destruction of automobile air-conditioner refrigerant. This system made it possible to recover and destroy 15,000 one-liter cylinders of refrigerant in fiscal 2002.
The system was transferred to the Japan Automobile Recycling Promotion Center in August 2002.

Air-conditioner CFC-refrigerant Recovery and Destruction System


Relationships with People and the Community
/Eco-ranger 21
Activity Working with the Community to Protect the Environment
DENSO's Environmental Education Program  Eco-ranger 21

Business, Government, and Local Residents Working Together
DENSO's Eco-ranger 21 environmental education program targets local elementary school children, teaching them about the environment, so that they can grow into environmentally aware adults. The theme of the program is "green, water, and air," things with which the automobile industry is closely involved. This program teaches the importance of protecting the environment with a hands-on approach to nature.
What makes the program special is that: 1) it uses DENSO's resources (e.g., facilities and people) for the courses, and 2) it is planned and operated with organizations specializing in environmental education, in partnership with a wide range of outside organizations, and with the backing of the city of Kariya, Japan, and the cooperation of the Kariya Junior Chamber.
Each course is taught by a variety of instructors, including experts from environmental NPOs, schoolteachers, and DENSO employees. Local university students and residents act as leaders. This is the first environmental program in the area that is run through cooperation by businesses, the government, and local residents.


Program Details (Kariya Course)
Date Course
March 2001
Make an explorer's map
May Caring for bamboo groves and working with bamboo
(making benches)
June Observing shore life and fireflies
July
Make a solar car
Oct.
Forest crafts and tofu making
(parent-child course)
April 2002 Amazing forest discoveries
June Observing shore life and fireflies
July Make a solar car
Oct. Explore your town's environment (parent-child course)
Make big stuff with bamboo
 Program Details (Nishio/Kota Course)
Date Course
May 2002
Amazing leaves
June
Investigating shore life (parent-child course)
July
River fun
Sept. Make a solar car
Oct.
The world of acorns
A Sure Hit with Children
Courses are held five times each year, and are open to children in grades four through six of elementary school. In fiscal 2002, we increased the course size from 20 to 40, and added courses in Nishio/Kota.
"I thought back to my own youth, spent playing in an area full of greenery, when planning the program," says Chinatsu Kawade of the General Affairs Division, writing about the program in DENSO's internal newsletter. "Some children didn't even know that bamboo could bend. But as soon as you set foot into the forest, everything around you is transformed into something you can play with. To see kids who have grown up playing video games become so enthralled in climbing trees or building tree houses, I suddenly felt a deep sense of relief. I hope that once becoming 'Eco-rangers,' dedicated to protecting the environment, the children will become even more active."


Relationships with People and the Community
/Compliance
Compliance
We are complying with the legal regulations of all countries and regions in which we operate worldwide.
We also are committed to ensuring that each of our employees acts appropriately at all times, and to creating
a corporate culture that wins the support of the community.
Code of Conduct
Our basic philosophy is expressed in our mission statement: "Contributing to a better world by creating value together." To carry out this mission, we believe it is essential for everyone involved in our business to comply with legal as well as in-house regulations, and to act within social mores.
To share and reinforce this philosophy among all DENSO employees, we wrote our Code of Conduct in 1998. This guide was distributed to all employees. In addition, we set up a consultation office in our legal department. In October 2002, we revised the guide so that it can serve as a guide for day-to-day activities, urging each of our employees to maintain strong ethics. Our group companies also wrote guides based on ours, and continue to use them today.

Internal Reporting System
We are studying the creation of an internal reporting system (the Help Line) as one way to quickly discover and deal with employees who violate legal or in-house regulations, or who do not act within social mores. To ensure that this system functions effectively, we are considering using outside attorneys to handle reports, so that the maximum protection is given to employees who make reports.


Evaluations and Awards
In fiscal 2002, we again received evaluations and awards from a large number of outside institutions.
We use these as motivation to improve areas and further promote our environmental management.

Outside Evaluations: Environment and the Community
When investors and financial institutions invest in companies, they are giving increasing weight to socially responsible investment (SRI), which evaluates social and environmental factors in addition to company's financial performance. Financial institutions around the world have chosen to invest in DENSO based on the Dow Jones Sustainability World Index (DJSI) and FTSE4Good Global Index (FTSE4Good), which they use to set up investment trusts.
The DJSI, which is run by Dow Jones and Sustainable Asset Management, evaluates the top 2,500 companies worldwide in terms of aggregate market value from the perspectives of economy, environment, and social responsibility. Selected enterprises are used in eco funds, such as SRI funds. In fiscal 2002, about 380 companies (37 in Japan) were selected. FTSE4Good is a similar corporate evaluation run by a company called EIRIS, which was founded by the Financial Times and the London Stock Exchange. In fiscal 2002, 617companies (60 in Japan) were selected.
In Japan as well, the sixth environmental-management survey conducted by the Nikkei Shimbun newspaper ranked DENSO eighth out of 703 manufacturers.

List of Major Outside Evaluations Relating to Environment/Community
Name of Outside Evaluation Sponsor DENSO's Rank
Environmental management level (2002) Nikkei Shimbun
Newspaper
8th out of 703
(Manufacturing Section)
Environmental Image Ranking Nikkei Shimbun
Newspaper
31st out of 703
(Manufacturing Section)
Dow Jones Sustainability Index (2002) Sam Research
(Switzerland)
Selected for 3 straight years
Sustainability Index Innovest (US) AAA in automotive field
FTSE4Good Index EIRIS (UK) Selected
Enterprise Social Responsibility Survey
(Oct 2002)
Asahi Shimbun Foundation Overall 9th out of 418
Winner of Handicapped Employment Award

 


Copyright(c) 2004 DENSO CORPORATION. All rights reserved.