Environmental Accounting

Since fiscal 2001, OMRON has been implementing environmental accounting practices to quantitatively analyze and manage investments and costs associated with environmental conservation, along with the resulting benefits, toward the aim of more efficiently investing in environmental improvement. Based on the OMRON Environmental Accounting Manual that conforms to the Environmental Accounting Guidelines 2005 issued by the Ministry of the Environment, only direct benefits are calculated as economic benefits to make more effective use of environmental accounting for promoting environmental management. In fiscal 2006, environmental accounting was introduced at five additional sites, but integration/consolidation of sites resulted in the elimination of nine sites, resulting in a total of 43 sites implementing environmental accounting, four sites fewer than fiscal 2005.

In fiscal 2006, environmental investments amounted to approximately 300 million yen, while environmental expenses were approximately 4.3 billion yen. Environmental costs decreased approximately 2.9 billion yen compared to fiscal 2005, which corresponded to R & D costs spent to respond to RoHS during the previous year.

Environmental benefits totaled approximately 1 billion yen, due to the significant increase in gain from the sale of valuable resources resulting from soaring prices of metal.

Environmental Conservation Costs

(Units: Millions of yen)

Item		Previous fiscal year		Fiscal 2006		Change (increase or decrease) vs. previous year		Content of major efforts
Item		Amount of invest- ment	Amount of expense	Amount of invest- ment	Amount of expense	Amount of invest- ment	Amount of expense	Content of major efforts
(1) Costs within business area		264.0	515.0	322.1	555.3	58.1	40.3
Break down	(1)-1 Pollution prevention costs	62.5	156.6	57.2	113.6	-5.3	-43.0	Costs for prevention of air, water and soil pollution
	(1)-2 Global warming prevention costs	191.9	118.4	261.4	159.3	69.5	40.9	Costs of energy-saving strategies, prevention of global warming, etc.
	(1)-3 Resource recycling costs	9.6	240.0	3.5	282.4	-6.1	42.4	Cost of waste recycling and processing.
(2) Upstream and downstream costs		0.0	3.6	0.0	814.6	0.0	811.0	Cost of product and packaging recycling, collection, etc.
(3) Management activity costs		0.9	562.8	0.6	479.9	-0.3	-82.9	Cost of environmental promotion activities, obtaining and maintaining ISO 14001 certification, assessing environmental impact, etc.
(4) R & D costs		0.0	6,079.4	0.0	2,423.4	0.0	-3,656.0	R & D costs of eco-friendly products
(5) Social action costs		0.0	16.4	0.0	16.4	0.0	-0.0	Costs of afforestation, local clean up, and other environmental improvement activities
(6) Environmental restoration costs		0.0	53.2	0.0	29.7	0.0	-23.5	Costs of restoring polluted soil or groundwater
Total		264.9	7,230.4	322.7	4,319.2	57.8	-2,911.2

Note: Does not include "Other costs (G)"

Units: Millions of yen

Items with anticipated effect	Previous fiscal year	Fiscal 2006	Change (increase or decrease) vs. previous year
(1) Total investment for the term	41,100	44,400	3,300
(2) Total R & D costs for the term	50,500	52,000	1,500

Environmental Conservation Effects

Description of effects		Classification of index	Unit	Previous fiscal year	Fiscal 2006	Change (increase or decrease) vs. previous year
(1) Effects corresponding to costs within business areas	1) Effects from resources invested in business activities	Energy consumption	(TJ)	1,579.4	1,624.1	45
		Water consumption	(10,000 m³)	98.1	87.3	-11
		Amount of resources invested	(t)	9,921.2	11,718.0	1,797
		Amounts of PRTR substances handled (Chemical substances handled)	(t)	64.7	64.1	-1
	2) Effects related to environment impact and waste products from business activities	Amount of atmospheric CO2 emissions	(t-CO2)	66,312.6	67,899.5	1,587
		Amount of waste water discharge	(10,000 m³)	74.7	70.5	-4
		Amount of waste discharged	(t)	5,234.2	5,946.7	713
		Amount of discharge of PRTR substances (Amount of chemical substances handled)	(t)	7.9	5.4	-3
(2) Effects corresponding to upstream and downstream costs	3) Effects on products and services as calculated from business activities	Amount of containers and packaging used	(t)	2,858.8	2,787.0	-72
(3) Other environmental conservation effects	4) Effects related to transportation, etc.	Amount of transport	(t)	97,138.0	91,261.0	-5,877

Source: Mass balance data

Economic Effects Accompanying Environmental Conservation Efforts

Units: Millions of yen

Items with actual effects		Previous fiscal year	Fiscal 2006	Change (increase or decrease) vs. previous year
(1) Revenue			931.5	931.5
(2) Cost reduction		97.4	25.4	-72.0
Breakdown	(2)-1 Cost reduction due to resource inputs	30.1	20.7	-9.4
	(2)-2 Cost reductions associated with environmental impact and waste discharge	67.3	4.6	-62.7
	(2)-3 Cost reductions in environmental restoration		0.0	0.0
	(2)-4 Other cost reductions		0.0	0.0
Total		97.4	956.9	859.5

Range Covered

		Number of business sites
Production bases	OMRON	5
Production bases	Affiliated companies	12
Non-production bases	OMRON	11
Non-production bases	Affiliated companies	14
Total		42

Fiscal 2006 Results

Environmental Conservation Costs

Environmental Investment

In fiscal 2006 OMRON succeeded in reducing its environmental load by focusing on strategies to prevent global warming. In addition, R & D costs declined as the company is now almost completely compliant with RoHS.

Environmental Costs

Same as above.
Environmental Conservation Effects
An increase in business activity during fiscal 2006 resulted in a growth of about 18% in the use of various resources, but as a result of implementing strategies to prevent global warming and other measures, the overall increase was held to about 2%.
Economic Effects
Due to the sharp rise in the cost of metals, proceeds from the sale of valuable resources increased by about 800 million yen compared with the previous year.