Environmental Accounting

We use an environmental accounting system to promote efficiency and to improve our environmental investments and activities, as well as to aid stakeholder understanding by providing information on the extent, efficacy, and efficiency of how we allocate management resources to environmental activities.
Environmental protection costs include environmentally driven R&D costs and capital investment. Environmental protection effects include both economic effects, in monetary terms, and physical effects, or the reduction in environmental load. Economic effects are calculated using data having financial evidence. Physical effects cover the reduction in the social environmental load resulting from the product’s use, as well as decreases in the direct environmental load imposed by the manufacturing process. To help reduce the environmental load as efficiently as possible, we also assess the reduction effect per unit of expenditure.
In fiscal 2008, our environmental protection costs were 98 billion yen, about 4 percent less than 2007. Under the environmental protection effects heading, economic effects also declined, but physical effects improved due to environmentally conscious R&D and product design that yielded a 1 billion kWh decrease in energy consumption. In addition, by continuing global warming countermeasures, we achieved an 18 percent increase in the efficient use of energy during production.

Environmental Protection Costs

Item		Overview	Costs (Unit: billion yen)
			FY 2006	FY 2007	FY 2008
Expenses	Business area costs	Costs of maintenance of equipment with low environmental burden, depreciation, etc.	39.24	39.72	33.31
	Upstream/ downstream costs	Green procurement expenses, recovery and recycling of products and packaging, recycling expenses	2.89	2.79	1.97
	Management activities costs	Labor costs of environmental management, implementation and maintenance of environmental management system	10.31	11.30	11.20
	Research and development costs	R&D for the reduction of environmental burden caused by products and production processes, product design expenses	41.66	46.63	50.25
	Social activity costs	Environmental improvements such as afforestation and beautification, PR and publicity expenses	1.20	0.48	0.35
	Environmental damage costs	Environment-related measures, contributions, and levies	2.89	0.80	0.99
	Total		98.18	101.72	98.06
Total investment		Investment in energy-saving equipment and equipment that directly reduces environmental load	15.48	15.38	10.17

Equipment depreciation costs are calculated using the straight-line method over five years.

Environmental Protection Effects : Economic Effects^*1

Item	Overview	Effects (Unit: billion yen)
		FY 2006	FY 2007	FY 2008
Net income effects	Profit on sales of recycled waste	12.28	14.50	10.90
Reduced expenses effects	Reduction in material costs due to resource saving, reduction in waste treatment costs due to reduced waste, reduction in power expenses due to energy saving	20.15	22.02	18.24
Total		32.43	36.52	29.14

Benefits on equipment investment are calculated using the straight-line method over five years, as with costs.

*1

Economic effects include the following items:

1. Net income effects: benefits for which there is real income, including income from the sale of resalable material and income from environmental technology patents.
2. Reduced expenses effects: reduction in electricity and waste treatment expenses arising from environmental load reduction activities

Environmental Protection Effects : Physical Effects

Item	Overview	Amount Reduced (parentheses: equivalent number of households) *2 *3
		FY 2006	FY 2007	FY 2008
Reduction in the amount of energy used during production	Replacement of existing equipment with highly energy-efficient equipment	159 million kWh (38,000)	161 million kWh (38,000)	158 million kWh (38,000)
Reduction in the amount of final waste disposal	Decrease in final waste output volumes due to separation and recycling activities (compared with volume without sorting and recycling program)	6,375 t (42,000)	7,361 t (49,000)	6,752 t (45,000)
Reduction in the amount of energy consumed during product usage	Decrease in energy requirements of Hitachi products (compared with products prior to major design change)	813 million kWh (193,000)	723 million kWh (172,000)	1,004 million kWh (239,000)

Benefits on equipment investment are calculated using the straight-line method over five years, as with costs.

*2

Calculation for household-number equivalent for energy-use reduction: decrease in energy used during production (or during product use) ÷ total annual power consumption per household. Source: The Energy Conservation Center, Japan, Survey on Standby Power Consumption (FY 2005).

*3

Calculation for household-number equivalent for final-waste disposal reduction: decrease in final waste generated during production ÷ (total annual volume of non-industrial final waste ÷ number of households). Sources: Ministry of the Environment, Annual Report on the Environment in Japan 2005; Statistics Bureau, 2005 Population Census.

Efficiency of Environmental Load Reduction^*4

Item	FY 2006	FY 2007	FY 2008
Reduction in energy used during production (million kWh/billion yen)	30	28	33
Reduction in amount of waste for final disposal (t/billion yen)	1,800	2,000	1,940

*4

This is an indicator of the efficiency of environmental load reduction, calculated as the amount of environmental load reduction divided by expenses needed for the reduction.

Economic Effect Ratio by Industry Segment

• page top