Sustainable environmental management indicators -Environmental Accounting FY2004-

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Review of Corporate Environmental Accounting in Fiscal 2004

The ratios of eco profit and eco effect, important indicators when measuring the effects sustainable environmental management activities have on cost, dropped about 10% in fiscal 2004 from the previous fiscal year's levels (see graph (1)). This is because environmental conservation cost increased by approximately 7% compared to that in the previous fiscal year, and the economic benefits, particularly incidental effects of pollution prevention activities, decreased significantly. Incidental effects, however, lead to lower costs in implementing measures to avoid risks when the risks of pollution diminish due to the advancement of pollution prevention activities. On the other hand, if the ratios are compared to those at the start of the current environmental action plan (results in fiscal 2001), the ratio of eco profit increased by about 50% and ratio of eco effect about 3% (see graph (1)).
The Eco Index, which indicates the level of sustainable environmental management for the entire business of the Ricoh Group, dropped slightly in fiscal 2004 from that in the previous fiscal year. This is because although total environmental impact decreased marginally, gross profit on sales declined 1.4% compared to the previous year's level. In terms of efficiency, however, in fiscal 2004 it improved approximately 45% compared to that in fiscal 2001, indicating that the level of sustainable environmental management for the entire business significantly rose over the past three years (see graph (2)).

Changes in Ricoh Group's Sustainable Environmental Management Indicators

Changes in Ricoh Group's Sustainable Environmental Management Indicators

Corporate environmental accounting data show that in environmental conservation costs, business area costs and administration costs remained unchanged in fiscal 2004 from those in the previous year. This implies that environmental management costs at business sites are stabilizing. Meanwhile, product recycling costs have increased over the past few years, surging in fiscal 2004. The cost of research and development in reducing environmental impact has expanded as well. These figures show that various costs are incurred in sustainable environmental management activities involving products.
Although it is becoming difficult to reap the economic benefits of environmental conservation activities carried out by business sites, the economic benefits of product recycling have substantially grown in the past few years. Consequently, the economic benefits of sustainable environmental management activities related to products now account for more than 50% of the total benefits, and this trend is likely to become more pronounced in the future.
However, when it comes to the effects of environmental conservation, the total amount of substances that have an impact on the environment have not decreased significantly, and this is true for all kinds of substances. CO2 emissions, in particular, have increased by more than 2% due to production expansion and an extremely hot summer, which remains a challenging issue in the prevention of global warming in the future.
Currently, the Ricoh Group is promoting sustainable environmental management activities by improving the manufacturing process through innovations in energy/resource conservation. At Fukui Plant, for example, costs and the amount of materials and energy used were aggregated, and measures were taken to reduce loss and environmental impact by improving the production process. It was estimated that approximately ¥123 million in raw materials and direct expenses was cut per year thanks to these initiatives. We strive to further reduce the environmental impact of our business operations, thereby intensifying our efforts to promote sustainable environmental management.

Ricoh Group's Sustainable Environmental Management Indicators (Fiscal 2004)
Sustainable environmental management indicators Results in fiscal 2004 Calculation formula
REP: Ratio of Eco Profit 1.81 Total economic benefit (29.98) /Total environmental conservation cost (16.57)
REE: Ratio of Eco Effect 2.01 {Total economic benefit (29.98) + Amount of reduction in social costs (0.03+3.29)}/Total environmental conservation cost (16.57)
Eco Index 1,741.5 Gross profit on sales (¥754,500,000 thousand) /Total environmental impact (433,247)
RPS: Ratio of Profit to Social Cost 119.2 Gross profit on sales (754.5) /Total social cost (6.33)
  • *Monetary units are indicated in billions of yen unless otherwise indicated.
Ricoh Group's Corporate Environmental Accounting in fiscal 2004 (42KB)

Ricoh Group's Corporate Environmental Accounting in fiscal 2004

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Segment Environmental Accounting

Segment Environmental Accounting of Product Energy Conservation (Benefit on cost in color QSU product development)
Costs Effects
Economic benefits Effect on environmental conservation
Item Main costs Costs Internal benefits Customer benefits
R&D cost Cost of developing energy-saving units
400 millon yen Amount of profit contribution
1,894 million yen
Reduction in payment for consumed power supply
1,769 million yen
Reduction in CO2 emissions
28,996(t)
Cost of molds, jigs, parts, etc. 488 millon yen
  • *The reduction in payment for consumed power supply and CO2 emissions is the annual benefit brought from eight hours of operation per day, 20 days of operation a month. Internal benefits refer to benefits on gross profits in sales results in fiscal 2004.
Segment Environmental Accounting of the Product Recycling Business (Japan)
Costs Effects
Economic benefits Effect on environmental conservation
Items Costs Items Benefits
Product recycling cost 682 million yen Sales 3,034 million yen Amount of resource recovery: 33,096(t)
Up 3,868 (t) from that in the previous year
Amount of final disposal: 177(t)
Collection/resource recovery cost 2,893 million yen
Social effect 2,648 million yen
Total cost 3,575 million yen
  • *Social effect refers to the cost of waste disposal that customers no longer have to pay.
Segment Environmental Accounting of Energy Conservation Activities at Business Sites (The Entire Ricoh Group)
Costs Effects
Economic benefits Effect on environmental conservation
Item Main cost Costs Item Benefits Reduction item Amount
Business area cost Cost of global warming prevention ¥576.9 million Reduction in lighting and heating expenses ¥284.6 million CO2 emissions 9,236.7(t)
  • *Reduction in CO2 emissions is a total of amounts reduced through measures to prevent global warming at production sites.
Segment Environmental Accounting of Recycling Activities at Business Sites (The Entire Ricoh Group)
Costs Effects
Economic benefits Effect on environmental conservation
Item Main cost Costs Item Benefits Reduction item Amount
Business area cost Resource circulation cost ¥1,094.4 million Reduction in waste disposal expenses ¥12.3 million Amount of waste disposed/ reduced 2.3(t)
Proceeds from sale of valuables ¥231.2 million
Segment Environmental Accounting of Pollution Prevention Activities at Business Sites (The Entire Ricoh Group)
Costs Effects
Economic benefits Effect on environmental conservation
Item Main cost Costs Item Benefits Reduction item Amount
Business area cost Resource circulation cost ¥397.7 million Reduction in
social cost
¥127.3 million NNOx
SOx
BOD
PRTR substances (Calculated with the conversion potential)
9.4(t)
-0.6(t)
8.9(t)
854.6(t)
Amount of risk avoidance effect (incidental effect) ¥5,936.0 million

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