| Toshiba's Environmental Accounts for Fiscal Year 2002
Record Progress in Achieving Environmental Benefits|
12 May, 2003
Tokyo -- Toshiba Corporation today released environmental accounts for fiscal year 2002, from April 2002 to March 2003, detailing the aggregate costs of environmental protection and the benefits realized for the parent company and 66 major subsidiaries in Japan and overseas. The overall figures indicate environmental costs of 29.6 billion yen for the year, outweighed by total benefits of 39.7 billion yen. These positive results show the group's investments in environmental protection making steady progress, as higher benefits are achieved at a lower cost of protection.
Toshiba has issued voluntary environmental accounts every year since FY1999 (to March 2000), in an attempt to gauge the total cost and effectiveness of its environmental activities and to develop an environmental perspective on how to promote and enhance business activities. The sophistication and transparency of the reports have made steady advances each year. The cost of environmental protection has included depreciation of environmental facilities for the last two years; a new category of customer benefits was incorporated into the accounts in 2000, and product coverage was expanded from FY2001. Most recently, calculations of risk prevention benefits have been incorporated into the accounts since FY2001.
This year's accounts show the cost of environmental protection dropping a sharp 20%, to 29.6 billion yen, largely due to lower costs for environmental restoration. In the same period, the value of overall benefits rose almost 10% to 39.7 billion yen.
This year's results follow a trend to lower protection costs and higher benefits that first emerged in fiscal 2000: as cumulative protection measures make their impact felt, results improve. Toshiba attributes this year's rise in benefits to a number of diverse factors, including efforts made at each individual facility, an increasing number of environmentally conscious products that seek to minimize environmental impacts, the more effective use and reuse of resources, and the achievement of 'zero waste emissions' - a final disposal quantity equivalent to 1% or less of the total discharge.
Toshiba is concerned to achieve the highest possible transparency in its environmental accounting. For this reason, classifications of environmental costs and the criteria for calculation follow the 2002 edition of the Environmental Accounting Guidelines issued by Japan's Ministry of the Environment. In addition to this, the company this year took the further step of opening up its environmental accounting methodology and practices to third-party review by the Shin Nihon Environmental Management and Quality Research Institute, an affiliate of Shin Nihon & Co., a Japanese auditing firm. The Institute's inspectors undertook a thorough review that included assessment of data collection and calculation, verification of data and supporting evidence, and interviews with employees. They also inspected manufacturing sites at Toshiba and Group companies. Full details of the review will be reported in the Environmental Report that Toshiba publishes in June 2003.
Refinement of the accounting system will continue in this coming year. As part of its efforts for improved feedback on environmental activities Toshiba has adopted material flow cost accounting, a new accounting methodology for detailed reporting of energy input and waste output in each manufacturing process. Whether or not to include this in the FY2003 environmental accounts is now under review.
Breaking down the results
The following summarizes the total costs and benefits for Toshiba Corporation, 45 Japanese subsidiaries and 21 overseas subsidiaries.
1. Environmental protection cost (billion yen)
2. Benefits (billion yen)
Calculating assumed benefits:
Monetary values are calculated by giving each substance a value determined in terms of cadmium, a weighting based on Japanese environmental standards and the ACGIH-TLV (the threshold limit value for substances in the environment, as determined by the American Conference of Governmental Industrial Hygienists). The result is multiplied by the cost of compensation for cadmium pollution. Assumed benefits quantitatively indicate environmental impacts on the atmosphere, water and soil and can be compared from year to year. Conversion of environmental impacts into monetary values allows comparison of various environmental impacts on the same basis.
Calculating customer benefits:
The benefits of reducing the environmental impacts of products throughout
their life cycles are calculated in terms of number of units and monetary
units appropriate to each stage of the life cycle. A life cycle comprises
a number of phases: 1) procurement of raw materials, 2) manufacturing,
3) transport, 4) use, 5) collection, 6) recycling and 7) appropriate processing.
Customer benefits are understood as reductions in environmental impacts
at the use phase, and are calculated in terms of energy saved, using the
Basis for calculation of risk prevention benefits:
The effects of investments in environmental structures to prevent pollution
of soil and groundwater, such as dikes, are evaluated as benefits to prevent
risks that might otherwise occur in the future. Risk prevention benefits
for each investment are calculated according to the following formula:
3. Breaking Down the Benefits
(1) Actual benefits
(2) Assumed benefits
(3) Customer benefits
4. Index of Environmental Management
The following table shows trends in eco-efficiency and eco-effectiveness, which Toshiba uses as indexes of environmental management. Eco-efficiency indicates the reduction of environmental load against the cost of environmental protection measures, and a higher value indicates greater efficiency. Toshiba's eco-efficiency has improved over the last four years. Eco-effectiveness is the ratio of net sales revenue against total environmental load. This year the value dropped slightly, but the general tendency is toward improvement.
A good working definition of environmental accounting is that it is a tool used to reflect environmental considerations in decision-making. In each year that it has issued environmental accounts, Toshiba has sought to refine and improve the accounting system, and has focused on improving particular aspects of the account. The main areas of concern are show in the figure below. In FY1999, Toshiba focused on improving the second and fourth quadrants, in FY2000 the first quadrant, benefits to society. FY2001 saw a focus on the third-quadrant, risk prevention benefits. The improvements to date provide Toshiba with tools to support prioritization and decision-making in environmental investment projects and wider investment decisions.
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