Business Sites:Production: Pollution Prevention
–Environmental Risk Management–
Understanding environmental liabilities
- Global/Ricoh Group
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 ¥1,910 million2 as of the end of fiscal 2011. In addition, the Group provided ¥1,250 million in reserves for soil purification.
- 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.
- 2Asbestos: ¥1,640 million; other hazardous substances: ¥60 million; restoring buildings and land to their original state: ¥220 million
Implementation flow and roles of the environmental liabilities calculation project
Environmental Risk Management with Respect to Assets
- Global/Ricoh Group
The Ricoh Group established and enforced the Standard on Environmental Risk Management with Respect to Assets in fiscal 2009, and has been evaluating environmental risks according to the standard. The purpose of this standard is to identify major risks entailed in the acquisition/sale/ lease of property and minimize their impact on business. The standard applies to all acquisitions, sales, and lease of property within the Ricoh Group (all the group companies subject to the consolidated accounting). Our environmental risk management conducted under this standard follows three key principles: (1) to identify significant environmental risks and the related health risks when acquiring, selling and/or leasing property, including cases involved in M&A; (2) to develop plans to manage and reduce the identified risks and implement appropriate measures according to the plan; (3) to provide relevant parties with important information on the identified environmental/health risks at the time of acquiring, selling and/or signing a lease contract for property. If risks concerning contaminated soil, PCBs, asbestos or other substances subject to environmental regulations are identified, the division in charge and the Environment Division will discuss the matter before deciding whether to finalize the property transaction under negotiation.