Evaluation Methods -Environmental Accounting FY2005-

During the fiscal year, we reconsidered our method of calculating incidental effects because it became apparent that the conventional method could cause an overestimation. "Ratio of Eco Profit" and "Ratio of Eco Effect," indicators of the cost-effectiveness of sustainable environmental management activities, have been calculated using a new calculation method (see the dashed lines in graph (1)). The results obtained under the conventional method improved from those for fiscal 2004 (see the solid lines in graph (1)). We will basically use the new method in the future. The Eco Index, which indicates the level of sustainable environmental management for the entire business, considerably improved in fiscal 2005 from fiscal 2004 thanks to significant decreases in the final waste disposal amount and emissions of chemical substances subject to PRTR as well as an increase in gross profit on sales (see graph (2)).

Corporate environmental accounting data show that upstream and downstream costs decreased while administration costs increased. As for economic effects, those from sales of recycled products have grown significantly. On the other hand, environmental conservation effects could not offset increases in CO₂ and NOx, which reflected the growth of the business, although the Ricoh Group as a whole is striving to improve its manufacturing processes, aiming to save energy and resources. We, however, succeeded in reducing the final waste disposal amount and emissions of chemical substances subject to PRTR, which allowed us to reduce social costs significantly from fiscal 2004. Also, environmental impact of the Ricoh Group as a whole fell 16%. In the future, we will endeavor to reduce environmental impact to a further degree and promote efforts toward the realization of sustainable environmental management.

• *Represents results after the revision to the method of calculating incidental effects
• *Monetary units are indicated in billions of yen unless otherwise indicated.

• *The reduction in payment for consumed power supply and CO₂ emissions is the annual benefit brought from 8 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.

• *Social effect refers to the cost of waste disposal that customers no longer have to pay.