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Sustainable environmental management indicators -Environmental Accounting FY2009-

Summary

The Ricoh Group disclosed its environmental accounting for the first time in 1999. Subsequently, the Group has introduced corporate environmental accounting to determine the status of sustainable environmental management and disclose related information, as well as segment environmental accounting, that is used to prepare environmental action plans, select measures, and verify achievements. Thus efforts are being made to establish environmental accounting as a tool for sustainable environmental management.

Corporate environmental accounting

The Ricoh Group calculates and announces the cost spent in its business activities for environmental conservation, as well as the conservation and economic effects, as quantitatively as possible. The Ricoh Group prepares such data in compliance with the Environmental Accounting Guidelines 2005?set by the Japanese Ministry of the Environment?by taking the necessary portion from the Eco Balance data and calculating the cost and effect (in quantity and monetary value) of its environmental conservation activities based on its own formulas and indicators. In fiscal 2007, the Group started disclosing its environmental impact from a product lifecycle perspective, in addition to direct environmental impact (i.e., environmental impact generated at business sites).

corporate environmental accounting in fiscal 2009

Segment environmental accounting

This is an environmental accounting tool to forecast the costs and environmental conservation/economic effects of individual investment activities and projects for environmental conservation from among all processes of operations and to evaluate their results, in order to judge the effectiveness of respective measures.

2009
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, parts, etc.
¥357.1 millon Sales contribution ¥1,263.7 million Reduction in payment for consumed power supply ¥376.4 million Reduction in CO2 emissions 6,185.5 tons
  • *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 a month. Internal benefits refer to benefits on gross profits in sales results in fiscal 2008.
2009
Segment environmental accounting of the product recycling business (Japan)
Costs Effects
Economic benefits Effect on environmental conservation
Items Costs*1 Items Benefits
Collection,
recycling,
resource recovery and other
¥8,450 million Sales *2 ¥14,046 million Amount of resource recovery: 26,426 (t) Down 1,951 (t) from that in the previous year Amount of final disposal: 104 (t)
Social effect *3 ¥2,114 million
  • *1Values indicated in the cost column represent the total costs incurred for collecting used products and treatment for recovering resources for recycling. Rise in these costs from the level of the previous year is attributable to expanded scope of items under survey.
  • *2The value of sales indicated under the economic benefits represents the total sales of mainly recycled copiers (including maintenance service charge) and recycled toner cartridges.
  • *3Social effect refers to the cost of waste disposal that customers no longer have to pay.
CO2 reductions and economic effects (based on segment environmental accounting)

CO2reductions and economic effects (based on segment environmental accounting)

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Fiscal 2009 Review of environmental accounting

Environmental accounting is designed to present the costs incurred for environmental conservation activities during a given period in comparison to the resulting environmental and economic benefits. The scope of environmental accounting covers the entire product lifecycle, from the procuring of raw materials, the production and use of the products to recycling and final disposal. In the Fiscal 2009 review of environmental accounting, we re-evaluated the method of calculation.
When gathering data for the fiscal 2009 environmental accounting, we reviewed the method for gathering information on environmentrelated capital spending as well as the recycling business (in Japan) that has an especially large impact. Until then, we had booked only categories directly related to environmental preservation (such as collection and processing costs) as environmental costs. However, starting in fiscal 2009, we included indirect costs incurred in the recycling business. In capital spending related costs, environmentrelated capital spending as well as the depreciation costs for environmental investment (the number within the categories for each environmental cost) both shrank as a result of the improved accuracy of identifying environment-related capital spending.
When we look at the overall trends of the Ricoh Group, gross profit on sales and total environmental impact both declined due to economic changes in Japan and overseas. Therefore, the Eco Index (the ratio of the gross profit on sales to the total environmental impact) recovered to the previous year's levels (See graph (2)).
The Ratio of Eco Profit, an indicator of the cost effectiveness of sustainable environmental management activities, as well as the Ratio of Eco Effect, an indicator that takes into account social cost reduction values, declined further (See graph (1)).
When we look at the fiscal 2009 corporate environmental accounting data(128KB), environmental investments shrank by roughly 30% compared with the previous year, but this is due to the improved accuracy of environment-related capital spending figures, as mentioned earlier. Environmental costs for recycling in both the upstream and downstream processes increased by roughly 20% compared with the previous year.
This was, however, a result of reviewing recycling-related environmental preservation costs. The economic effects turned positive as a result of reflecting a decrease in production due to the world economic slump, cost cuts, and decreases in utility costs and costs for waste disposal.
Recycling related costs, which make up a large portion of economic effects, moved steadily. As a result, total economic effects increased slightly.
Overall, recycling-related items, which make up a majority of costs and economic effects, were relatively strong despite the world economic slump and can be considered to be well-reflected in the economic effects.

  • *Graph (1) shows ratio of eco profit, ratio of eco effect, and ratio of eco effect of the entire product life cycle.
  • *Graph (2) shows eco index, gross profit on sales, and eco index of the entire product life cycle.
Changes in the Ricoh Group's sustainable environmental management indicators

(1) Ratio of eco profit and Ratio of eco effect

(2) Eco indicator

The Ricoh Group's sustainable environmental management indicators (fiscal 2009)
The Ricoh Group's sustainable environmental management indicators (fiscal 2009) Results in fiscal 2009 Calculation formula
REP : Ratio of Eco Profit 1.82 Total economic benefit (36.70) / Total environmental conservation cost (20.17)
REE : Ratio of Eco Effect 1.98 Total economic benefit (36.70) + Social cost reduction values (0.38 + 2.93)] / Total environmental conservation cost (20.17)
Eco Index
2,447.9 Gross profit on sales (822.3) / Total environmental impact (33,592.6) x 105
RPS : Ratio of Profit to Social cost 172.8 Gross profit on sales (822.3) / Total social cost (4.76)
  • *Unit: Billions of yen.
Sustainable environmental management indicators of the entire product lifecycle (fiscal 2009)
Sustainable environmental management indicators of the entire product lifecycle (fiscal 2009) Results in fiscal 2009 Calculation formula
REP : Ratio of Eco Profit 1.82 Total economic benefit (36.70) / Total environmental conservation cost (20.17)
REE : Ratio of Eco Effect 2.40 Total economic benefit (36.70) + Social cost reduction values (8.73 + 2.93)] / Total environmental conservation cost (20.17)
Eco Index 44.6 Gross profit on sales (822.3) / Total environmental impact (1,843,264.5) x 105
RPS : Ratio of Profit to Social cost 3.1 Gross profit on sales (822.3) / Total social cost (261.2)
  • *Unit: Billions of yen.

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An overview of our environmental accounting from FY 1998 to FY 2013

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