Sustainable environmental management indicators -Environmental Liabilities-

Understanding environmental liabilities

Companies are responsible for environmental contamination and anything that can lead to environmental contamination, whether caused by their past, current, or future business activities, and they must therefore make efforts into the future to prevent contamination or its expansion. They must also take all necessary measures such as purification and repair if and when contamination occurs. In fiscal 2007, the Ricoh Group began to examine its sites for possible soil/ underground water contamination, asbestos and PCBs-related hazard, as well as recognizing the obligation to return sites to their original state, in order to appropriately reflect the impact on corporate performance of the cost of fulfilling that responsibility (environmental liabilities) in financial accounting. Based on the assessments of our facilities, conducted jointly by the accounting, environment, and facility divisions, the Group estimated (1) the amount of asset retirement obligations1 calculated in compliance with the accounting standards, (2) the amount that could become liabilities in financial accounting in the future in compliance with laws or contracts, and (3) the costs of purification the Ricoh Group will carry out according to its own policies, although such purification is not required by laws or contracts. The estimated future expenditure for asset retirement obligations of the Ricoh Group to dispose of asbestos and PCBs and to return buildings and land to their original state was ¥1,890 million2 as of the end of fiscal 2012. In addition, the Group provided ¥1,170 million and ¥90 million in reserves for soil purification and PCB-related purification, respectively.

  • 1Payment obligation required by laws or contracts concerning the future retirement of fixed assets. This obligation includes that for the retirement of harmful substances contained in fixed assets. In Japan, the Accounting Standard for Asset Retirement Obligations was introduced in fiscal 2010.
  • 2Soil/underground water contamination: ¥220 million; asbestos: ¥1,650 million; other hazardous substances: ¥20 million
Implementation flow and roles of the environmental liabilities calculation project

image:Implementation flow and roles of the environmental liabilities calculation project

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