| Basic Concept for Environmental Accounting |
| Establishing
an Environmental Accounting System |
The Ricoh
Group is making continuous efforts
to establish a sustainable management
that will help it to survive the current
prolonged business competition. The
Ricoh Group first reorganized and
defined its idea of sustainable management
and then examined indicators used
to evaluate and analyze the level
of sustainable management. At present,
a new environmental accounting (environmental
management accounting) framework is
under consideration to be used as
a tool to measure and manage environmental
management indicators by product unit
and function (division). All information
obtained is consolidated under this
environmental management information
system.
- Environmental
Management Indicators
- Environmental
management indicators are needed
to appropriately evaluate the
level of sustainable management
and facilitate further improvement.
To this end, the indicators should
be set based on the three factors
shown below.
|
| (1) |
Economic
Benefits of Environmental
Conservation Activities |
| |
This
factor shows how
economically rational
environmental
conservation activities
are. |
| |
 |
| |
If
the quotient is
one or greater
(i.e., the economic
benefits are equal
to or greater
than the environmental
costs), then sustainable
management is
considered valid. |
|
| |
 |
| |
If
the quotient is
one or greater
(i.e., the sum
of economic benefits
and social cost
reduction is equal
to or greater
than the environmental
conservation costs),
then environmental
management is
considered valid. |
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 |
| |
This
equation is used
to evaluate improvements
in the efficiency
of investments
and other projects. |
|
| (2) |
Environmental
Efficiency of
Business Activities |
| |
This
factor shows whether
the environmental
impact of business
activities is
acceptable and
whether those
activities respond
to social requests. |
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 |
| |
This
equation is used
to evaluate whether
environmental
impact corresponds
to business size. |
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| |
 |
| |
This
equation is used
to evaluate whether
profit corresponds
to environmental
impact. |
|
| (3) |
Environmental
Management |
| |
This
factor is used
to determine whether
the environmental
management process
is appropriate. |
| |
In-house
audits, site reports,
environmental
technology development
process, environmental
labels, green
purchasing, and
other aspects
are included. |
|
|
|
- Environmental
accounting needs to work as a
tool to measure the economic efficiency
of environmental conservation
activities and the environmental
efficiency of business activities
mentioned above.
Corporate environmental accounting
works as a tool to measure the
economic efficiency of environmental
conservation activities and environmental
efficiency of business activities
of the company as a whole.
|
| Indicators
of Environmental Accounting |
- Development
of Indicators
- The
Ricoh Group set indicators to
evaluate, analyze, and disclose
the environmental conservation
efficiency of business activities
individually and as a whole.
Such indicators as the eco-efficiency
(EE) value and eco-ratio were
once used mainly to compare the
cost effectiveness of investments
and projects. Those indicators
are therefore excluded from corporate
environmental accounting and used
only in segment environmental
accounting in this report. The
EE value and eco-efficiency index
(EEI), which are indicators used
to determine any improvements
in environmental impact, are now
called the eco-improvement (EI)
value and ecoimprovement index
(EII), respectively, taking into
consideration the original meaning
of the terms. The definition of
EEI was changed from "an
index that represents improvements
in environmental conservation
activities" to "an index
that compares the total environmental
impact amount with sales."
In addition to the indicators
mentioned above, new ones were
created for this report.
| Indicators |
 |
Eco-improvement
value (EI Value)
= Environmental
impact reduction
amount/environmental
conservation costs
(ton/hundred million
yen) |
| |
 |
To
determine how
much environmental
impact per ¥100
million in environmental
conservation costs
is reduced for
each environmental
impact item |
|
|
Eco-ratio
= Gross profit/environmental
impact amount
(ton/hundred million
yen) |
| |
|
To
determine the
amount of value-added
from business
activities obtained
per one-ton equivalent
of environmental
impact discharged |
|
|
Eco-improvement
index (EII) =
Total environmental
impact reduction
amount (1)/Total
environmental
conservation cost
amount (thousands
of yen) |
|
Improvement ratio
of social cost
(IRS) = Total
social cost reduction
amount (2)/Total
environmental
conservation cost
amount (thousands
of yen) |
| |
|
To
determine whether
the reduction
in ((1) environmental
impact/(2) social
cost) is efficient |
|
|
Eco-index
= Gross profit
(thousands of
yen)/total environmental
impact amount
(1) |
|
Ratio
of profit to social
cost (RPS) = Gross
profit/total social
cost (2) |
| |
|
To
determine whether
any profit is
made when a company
conducts business
activities at
the appropriate
level((1) environmental
impact/(2) social
cost) |
|
|
Eco-efficiency
index (EEI) =
Sales (thousands
of yen)/total
environmental
impact amount
(1) |
|
Ratio
of sales to social
cost (RSS) = Sales/total
social cost (2) |
| |
|
To
determine whether
a business activity
at the appropriate
level ((1) environmental
impact/(2) social
cost) is suitable
for its scale |
|
|
Ratio
of eco effect
(REE) = Environmental
effect (total
economic benefit
+ total social
cost reduction
amount)/total
environmental
conservation cost |
|
Ratio
of eco profit
(REP) = Total
economic benefit/total
environmental
conservation cost |
| |
|
To
determine whether
an environmental
conservation activity
is conducted in
an economically
rational way |
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|
 Scope of Collection of Environmental Impact and Environmental Accounting Data |
Environmental impact and environmental accounting data are collected from Ricoh's production and non-production sites and Ricoh Group companies that have established their own sustainable management systems.
|
Japan |
|
Ricoh production sites: |
|
| |
Atsugi Plant, Hatano Plant, Numazu Plant, Gotemba Plant, Fukui Plant, Ikeda Plant, Yashiro Plant
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|
Ricoh nonproduction sites: |
|
| |
Head Office, Aoyama Head Office (until November), Ohmori Office, Ohmori Office No. 2, Ginza Office, Ricoh System Center, Shin-Yokohama Office, Ricoh Service Parts Center, Research and Development Center, Software Research Center, Toda Technical Center, Applied Electronics Laboratory, Technology Center
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|
Ricoh Group major manufacturing subsidiaries: |
|
| |
Tohoku Ricoh Co., Ltd.; Hasama Ricoh, Inc.;
Ricoh Unitechno Co., Ltd.;
Ricoh Optical Industries Co., Ltd.;
Ricoh Keiki Co., Ltd.;
Ricoh Microelectronics Co., Ltd.;
Ricoh Elemex Corporation;
Ricoh Printing Systems, Ltd.*1
|
|
Ricoh Group major nonmanufacturing subsidiaries: |
|
| |
Ricoh Logistics System Co., Ltd.;
Ricoh Technosystems Co., Ltd.;
6 sales administration companies; 35 sales companies;
NBS Ricoh Co., Ltd.;
Part Component System Co., Ltd.*2;
Ricoh Leasing Co., Ltd., Ricoh San-ai Service Co., Ltd.*3
|
The Americas |
|
Manufacturing company: |
|
| |
Ricoh Electronics, Inc. (U.S.A.)
|
|
Nonmanufacturing companies: |
|
| |
Ricoh Corporation (U.S.A.) and 2 sales companies
|
Europe |
|
Manufacturing companies: |
|
| |
Ricoh UK Products Ltd. (U.K.)
Ricoh Industrie France S.A.S. (France)
|
|
Nonmanufacturing companies: |
|
| |
Ricoh Europe B.V. (the Netherlands) and 28 sales companies in the region
|
China |
|
Manufacturing companies: |
|
| |
Ricoh Asia Industry (Shenzhen) Ltd. (China)
Shanghai Ricoh Facsimile Co., Ltd. (China)*3
Shanghai Ricoh Digital Equipment Co., Ltd. (China)*1
|
Asia-Pacific Region |
|
Nonmanufacturing company: |
|
| |
Ricoh Asia Pacific Pte. Ltd. (Singapore)
|
1. Only environmental impact data are given in the Business Site Data.
2. Environmental accounting data only
3. Environmental impact data only |
|
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|
Coverage |
Data was
collected in fiscal 2001 from the
Ricoh Group business sites below:
Ricoh Co., Ltd.
The Ricoh Group's manufacturing subsidiaries
both at home and abroad, namely, Tohoku
Ricoh Co., Ltd.; Hasama Ricoh, Inc.;
Ricoh Unitechno Co., Ltd.; Ricoh Optical
Industries Co. Ltd.; Ricoh Keiki Co.,
Ltd.; Ricoh Microelectronics Co.,
Ltd.; Ricoh Elemex Corporation; Ricoh
Electronics, Inc. (North America);
Ricoh Industrie France S.A. (France);
Ricoh UK Products Ltd. (UK); Ricoh
Asia Industry Ltd. (China); Taiwan
Ricoh Co., Ltd. (Taiwan)
The Ricoh Group's domestic non-manufacturing
subsidiaries, namely, Ricoh Logistics
System Co., Ltd.; Ricoh Techno Systems
Co., Ltd.; and Part Component System
Co., Ltd.
The business sites listed below were
also added from fiscal year 2001:
51 domestic sales companies, NBS Ricoh
Co., Ltd., Ricoh Corporation (USA),
Ricoh Europe B.V. (the Netherlands),
Ricoh Hong Kong Ltd. (Hong Kong),
Ricoh Asia Pacific Pte. Ltd., as well
as 7 overseas sales companies. Thus,
the total number of the business sites
covered is 79. |
|
|
Costs |
| Environmental
conservation costs are comprehensively
totaled for such categories associated
with environmental conservation as
depreciation on facilities, personnel
expenses, and overhead expenses. (Cost
items are in accordance with the Ministry
of the Environment's Guideline for
Introducing an Environmental Accounting
System (2002 Version)). |
|
|
Economic Benefits |
In order
to compare environmental conservation
costs and come up with comprehensive
results, economic benefits are calculated
in some aspects, not only in terms
of substantial effects but also expected
and incidental effects. To improve
the accuracy of determining expected
effects, the "contribution to value-added
research and development" item in
this report was calculated based on
actual sales results, and any profit
gained is considered to be the result
of environment-friendly functions.
| Economic
Benefits |
Economic
benefits are calculated as
corporate effects (effects
within the Ricoh Group) and
social effects (effects outside
the Ricoh Group).
|
Substantial
effect
|
:Actual
gains from cost and
energy reduction as
well as sales of recycled
products |
|
| Expected
effect |
:Amount
to which environmental
measures contributed |
|
| Incidental
effect |
:Pollution-
and lawsuit-related
costs avoided |
|
| Social
effect |
:Reduction
in electricity expenses
due to the use of energy-saving
products or reduction
in waste disposal cost
(Japan only) |
|
|
| Effect
Calculation
Method |
| Principal
methods for
effect calculation
are shown
below. |
 Substantial
Effect
|
| Saving
Effect |
Amount
reduced
in electricity,
gas, fuel,
water and
waste disposal
costs.
Effect involving
investment
is taken
into account
assuming
that such
effect will
last for
3 years.
Changes
in production
volume and
personnel
are considered
for factories
and offices
respectively.
|
| Recycling
Effect |
Value of
waste disposal
/recycled
valuable
product
sold.
Value of
recycled
products
sold obtained
by product
recycling.
|
|
Formula
of Expected
Effects
|
Contribution
to
value-added
production |
: |
(Production
output
-
raw
material
costs)
x
business
area
costs/manufacturing
costs |
|
|
|
Effects
of
media
coverage |
: |
Area
of
newspaper
advertisement/newspaper
page
area
x
advertisement
cost
per
page |
|
|
|
Effects
of
environmental
education |
: |
Number
of
people
attending
internal
environmental
education
seminars
x
seminar
fee
for
outside
participants |
|
|
|
Contribution
to
value-added
research
and
development |
: |
Gross
profit
x
contribution
rate
to
gross
margin
using
the
green
point |
|
|
|
Publicity
from
environmental
advertisements |
: |
Number
of
visitors
to
environmental
Web
site
x
unit
price
of
the
environmental
report |
|
|
Formula
of Incidental
Effects
|
| Amount
of
incidental
effect |
:Standard
amount
x
occurrence
coefficient
x
impact
coefficient |
|
|
|
| Items
to
be
calculated |
:Areas
of
improvement
to
prevent
pollution |
|
|
|
| Standard
amount |
:Amount
set
for
lawsuits,
suspension
of
operations,
and
restoration |
|
|
Calculation
Formula of
Social Effect
|
| Total
Electricity
Consumption
=
electricity
consumption
per
product
x
products
sold |
|
| Effect
of
electricity
cost
reduction=
(former
total
electricity
consumption-current
total
electricity
consumption)
x
unit
electricity
cost |
|
| Reduction
in
Waste
Disposal
=
(weight
of
products
recalled-weight
of
waste
for
final
disposal)
x
unit
cost
of
outsourced
disposal |
|
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|
Environmental Conservation Effects |
| For any
given year, the environmental impact
reduction amount can be used in calculating
environmental conservation effects.
There are six environmental impact
items: CO2, NOx, SOx,
biochemical oxygen demand (BOD), final
waste disposal amount, and Pollutant
Release and Transfer Register (PRTR)
substances. |
|
|
Calculation of Social Cost |
In the past,
environmental conservation effects
were calculated in terms of physical
amount. For a clearer comparison with
environmental conservation costs,
environmental impact is now calculated
in terms of monetary value. The monetary
value of environmental impact is termed
"social costs" (costs of external
diseconomies).
The conversion coefficient used is
based on EPS* Indicator
Ver. 2000, which is an impact assessment
method in monetary value. The reference
figure used is  108/t-CO2
(¥11,945/t-CO2).
This figure is almost equal to the
Ricoh Group's reference amount (¥16,000/t-CO2),
which is calculated from investments
to reduce CO2. This
system received internal approval.
At present, the conversion of environmental
impact into monetary value is just
one option, and it needs to be examined
further in the future.
* EPS: Environmental priority strategies
in product design
*What
is social cost?
The environmental impact associated
with business activities has extensively
adverse effects on the global environment.
Consequently, society itself causes
the costs that it should pay. The
costs are called "social costs," and
include those to clean polluted rivers,
those associated with damage to humankind
and ecosystems from air pollutant
emissions, and other costs paid by
society because there is no way to
identify who is responsible for those
costs. For the calculation of social
costs, the environmental impact is
converted into a monetary value by
using the life-cycle impact assessment
method on the estimated damages. |
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Indicators
The Ricoh Group calculates environmental preservation costs and benefits based on calculation formulas and indicators developed by Group companies.
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Environmental accounting before FY 2006
An overview of our environmental accounting from FY 1998 to FY 2005
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