TOKYO--Toshiba Corporation today reconfirmed its commitment to making environmental protection an integral part of its operations by publishing environmental accounts for fiscal year 1999, to March 2000. The report adopts guidelines recently announced by Japan's Environment Agency and the company's own standards for analyzing direct and indirect benefits from environmental protection activities. The result is a quantitative picture of the total cost and effects of environmental activities at the parent company and 60 key subsidiaries and affiliates that can be applied to improving environmentally-centered business activities.

The cost section of the report is based on environmental protection guidelines completed by the Environment Agency in March. Toshiba played an active role in developing the guidelines, as a corporate member of the study group on environmental accounting organized by the agency. The guidelines cover capital expenditure, R&D expenditure, recycling, and the costs of reducing environmental impacts derived from business activities, including the cost of preventing pollution and development of environmentally-conscious products; and recycling.

Due to a lack of accepted standards for investigating the benefits of environmental activities, Toshiba devised a two-tier method that seeks to reasonably calculate and represent the economic value. The results cover "direct benefits," directly measurable as a monetary value through cost reductions in utilities, sewerage, and waste disposal including recycling, and "assumed benefits" that estimate the value gained from reducing such environmental loads as use of controlled chemicals or substances.

In calculating assumed benefits, Toshiba sought to quantify as a monetary value the results of reduced environmental impacts on the atmosphere, water and soil. Reductions of exhaust were calculated as a monetary value based on the value of SOx traded in accordance with trading of discharge rights under the U.S. EPA's Acid Rain Program. Gains from reducing drainage were calculated according to the estimated compensation for cadmium pollution in court judgements or settlements. In both measures, environmental standards for chemical substances determined by Japan's Environment Agency were used to evaluate the gravity of impact.

Toshiba Group's environmental costs in fiscal 1999 amounted to ¥36.6 billion benefits totaled ¥19.1 billion, a near 2:1 ratio. However, the company believes long-term potential benefits will increase markedly, if beneficial impact on society and the environment as well as the reduction of risks of negative impact that may be caused on business activities were taken into consideration.

In other words, investment in environmental protection is expected to achieve a greater impact on business activities and the move to a society supporting sustainable recycling than is directly indicated by the monetary values arrived at in Toshiba's environmental accounting calculations

Aggregate benefits

In addition to direct and assumed benefits, Toshiba also calculated "aggregate benefits" as a reference for evaluating the total potential impact of environmental activities. "Aggregate benefits" seek to consider the added value of environmental activities, such as gross profit generated by business activities and depreciation costs, and the proportion of environmental costs to total expenses of factories.

Total benefits in fiscal 1999 amounted to ¥38 billion, ¥23.8 billion at Toshiba Corp. and ¥14.2 billion at subsidiaries. This shows a positive balance of environmental costs of ¥37.6 billion.

Toshiba will be continue to extend environmental activities and will use continued environmental accounting as a key tool for doing so. This March, Toshiba finalized its mid-term environmental protection plan for fiscal 2000 to 2002. Programs cover maximization of zero-emission of waste materials, reduction of chemical waste, reduction of ratio of carbon dioxide emissions to total sales, adoption of lead-free soldering and abolition of HCFC.

Attainment of these targets will be supported by an annual investment of 8 billion yen. The main elements of this year's programs are assuring water quality (2.7 billion yen); energy conservation (2 billion yen) and R&D (1.6 billion yen). Through these and other programs, and through its environmental accounting, Toshiba will promote awareness of the need for greater recycling and environmental protection.

The tables

The following summarizes the total costs and effects for Toshiba Corp., 44 Japanese manufacturing subsidiaries, 2 Japanese subsidiaries directly engaged in environmental protection businesses and 14 overseas subsidiaries.

Environmental protection cost (billion yen)

Benefits (billion yen)

Breakdown of Effects

(1) Direct effects (billion yen)

Note: A minus figure represents a higher environmental load resulting from increased production and exceeding the effects of reducing the environmental impact.

(2)Assumed benefits (billion yen)