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Environmental Accounting

As a tool for environmental management

With a view to promoting environmental management, Toshiba Group is working to introduce an environmental accounting approach aimed at collecting accurate data on investments and costs required for its environmental conservation initiatives and analyzing the collected data in order to reflect investment effects and cost benefits in managerial decision making.

Environmental costs are calculated in accordance with the Ministry of the Environment's Environmental Accounting Guidelines 2005. To assess benefits, we show reductions in environmental impacts in physical amounts and also calculate benefits on a monetary basis.

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Environmental costs and benefits

Total environmental costs decreased by 12% from 2016 to 18.7 billion yen. The breakdown of environmental costs by business segment shows that the social infrastructure business incurred the largest costs, followed by the electronic device business and then by the energy business.

Total investments decreased by 8% from 2016 to 3.8 billion yen.

The total amount of environmental benefits was 404.2 billion yen. The breakdown of the total is as follows: actual economic benefits were 7.9 billion yen and assumed economic benefits were 396.3 billion yen.

Environmental costs (FY2017)Unit: million yen

Category Description Investments Costs
Total 3,811 18,680
Business area costs Reduction in environmental impacts 2,493 5,587
Upstream/downstream costs Green procurement, recycling, etc. 423 616
Administration costs Environmental education, EMS maintenance,
tree planting on factory grounds, etc.
174 2,716
R&D costs Development of environmentally conscious products, etc. 687 9,556
Public relations costs Support for local environmental activities, donations, etc. 10 28
Environmental damage restoration costs Restoration of polluted soil, etc. 24 177

Breakdown of environmental costs by business segment (FY2017)
[Image] Breakdown of environmental costs by business segment

Environmental benefits (FY2017)

Category Description Reductions in environmental impacts Benefits measured as a monetary value (million yen) Calculation method
Total monetary benefits 404,203  
(A) Actual benefits Costs that can be measured directly as a monetary value, such as electricity and water charges Energy 2,335,791(GJ) -470 Reductions in electricity charges and waste processing costs compared to the previous year, plus sales of valuables.
Waste -12,333,173(t) 8,299
Water 596,261(m³) 48
Total monetary benefits 7,877
(B) Assumed benefits Reductions in environmental impacts measured as a monetary value Reductions in the amount of chemicals discharged 7,213(t) 396,326 To obtain monetary values, we assessed the impact of different substances by using the equivalent amount of cadmium for each substance, which we calculated based on environmental standards and on threshold limit values for chemical substances specified by the American Conference of Governmental Industrial Hygienists (ACGIH-TLV), and then multiplying such amounts by the damage compensation for cadmium contamination. In order to compare different environmental impacts by the same standard, reductions in environmental impacts on the atmosphere, hydrosphere, and soil compared to the previous year are shown alongside monetary amounts that represent the values of such reductions.

Reductions in environmental impacts for actual and assumed benefits indicate differences between FY2016 and FY2017.
Negative benefits indicate that the increase in environmental impacts exceeded reductions due to increases in production and other factors.

With respect to assumed economic benefits, in light of the major impact of Sigma Power Ariake Co., Ltd., which engages in the thermal power generation business, we also present data on changes in environmental benefits for Toshiba Group after excluding Sigma Power Ariake. We will continue to appropriately analyze environmental costs and develop environmental management measures to further increase environmental benefits.

Environmental costs and benefits (including the effects of Sigma Power Ariake)
[Image] Environmental costs and benefits (including the effects of Sigma Power Ariake)

Environmental costs and benefits (excluding the effects of Sigma Power Ariake)
[Image] Environmental costs and benefits (excluding the effects of Sigma Power Ariake)

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Cost benefits of environmental management measures

The figure shows the changes in cost benefits of measures for climate change mitigation and waste disposal over the past three years. We compared the costs incurred in taking measures related to climate change and waste dispose against the total amount of reductions in payments related to energy consumption and waste disposal compared to the previous year as well as sales of valuables during the current year. In the table above, costs are expressed as business area costs and benefits as actual benefits.

In FY2017, measures to dispose of waste brought larger benefits than the costs for implementing them.

The major issue to be addressed going forward is how to overcome two conflicting problems: an increase in emissions of environmental pollutants as a result of business expansion and the need for cost reductions. Toshiba Group will also analyze the cost benefits and other financial aspects of environmental management measures in more detail.

Cost benefits of measures for climate change mitigation and waste disposal
[Image] Cost benefits of measures for climate change mitigation and waste disposal

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Natural capital accounting initiatives

Natural capital refers to capital (stock) generated by nature, including forests, soil, water, atmosphere, and biological resources. Flows generated from natural capital can be regarded as ecosystem services. Business activities are realized by many ecosystem services and natural capital accounting is known as a tool to quantitatively analyze impacts and dependency on the natural capital.

Even in the environmental accounting, costs incurred for environmental conservation activities are aggregated and the reduction in environmental impacts achieved as a result of such activities is measured as a monetary value as well as a physical amount. Natural capital accounting on the other hand, is considered as an initiative to visualize the extent of environmental impacts due to business activities (external diseconomies) and grasp dependency on the natural capital. Since FY2009, Toshiba Group has annually published data on environmental impacts throughout entire product life cycles, including supply chains, which we convert into monetary values using the Life-cycle Impact assessment Method based on Endpoint modeling (LIME).

Evaluating business sustainability from an environmental aspect requires analysis of the complex supply chain on a global basis and use of the results for supplier selection as necessary. In addition, there are various options for reducing the dependency on natural capital: use of renewable energy using photovoltaic, hydroelectric, wind, and tidal power, collecting and recycling used products, expansion of circulative resources, and reusing water in our sites. The ecosystem can also be directly restored through biodiversity conservation activities. We will continue to conduct and develop environmental impacts assessments carried out across the entire product life cycles.

Environmental accounting and natural capital accounting
[Image] Environmental accounting and natural capital accounting

BAU (Business as Usual): Best obtainable value for environmental impacts

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