Priority Issue 2 For the Sake of the Global EnvironmentEnvironmental Accounting

As part of its efforts to fulfill its social responsibility, the KOSÉ Group developed in 1997 the Basic Environmental Policy and the Environment Action Guidelines, under which specific actions have been implemented.
To measure the effects of these actions, the KOSÉ Group performed environmental accounting for this fiscal year as in previous years according to the Environmental Accounting Guidelines 2007.

No retrospective correction of the past figures was made, unless otherwise stated.

Environmental conservation costs

The investments we made included installation of an air-cooling-type cooling system at Kumagaya Office and an inverter-type air-conditioning system at Sayama Office. We also focus our efforts on making our factories more environmentally friendly by improving their performance through repair and overhaul of wastewater treatment facilities, drainage ditches, and other facilities. Lighting systems have steadily been replaced with LED lights to contribute to energy saving.

In allocating costs, we place particular emphasis on pollution prevention, including the maintenance and management of wastewater treatment facilities, deodorizing equipment for ammonia, and the replacement of fossil fuel for boilers with natural gas.
In fiscal 2014, the research and development costs for products that contribute to environmental conservation were mainly allocated to the adoption of biodegradable raw materials.

We will continue our proactive efforts to raise awareness of environmental costs and promote environmental investments.

(Unit: 10,000 yen)

Category Major efforts FY 2014 FY 2013 FY 2012
Investments Costs Investments Costs Investments Costs
1. Business area costs
(1) Pollution prevention cost Prevention of air pollution, water pollution, soil pollution, noise and malodor 9,571 13,165 28,280 61,805 15,271 16,124
(2) Global environmental conservation cost Prevention of global warming and ozone layer depletion 2,683 1,558 3,970 1,595 10,076 3,438
(3) Resource recycling costs Water saving, effective use of resources, industrial waste treatment, etc. 654 9,988 765 13,371 1,178 10,402
2. Upstream and downstream costs Green purchasing, cost of recycling containers, packages, etc. 0 8,810 0 11,530 0 10,669
3. Costs of management activities Environmental education, committees, ISO-related activities, environmental impact measurement 0 1,027 38 1,158 28 1,515
4. Research and development costs Development of environmentally friendly products 0 15,013 0 7,543 0 6,577
5. Social activity costs Announcement of measures to improve the environment and environmental information 0 1,290 0 603 768 1,921
6. Costs to repair environmental damage 0 0 0 0 0 0
Total 12,908 50,850 33,052 97,606 27,321 50,646

The invested amounts are those in the depreciable assets acquired during the data collection period.

The depreciation expense is calculated based on the useful life and using the depreciation method in financial accounting.

For compound costs, the portion related to environmental conservation is calculated by subtraction or proportional division.

Environmental conservation effects

An increase in the number of product items with product information and instructions on the box instead of on a separate package insert has helped save 258.95 million yen. In terms of environmental conservation, this is the equivalent of 62 tons of paper and means that 1,868 trees were saved from being cut down.

The replacement of a portion of energy sources with natural gas contributed to a significant reduction in the consumption of other energy sources.
Our efforts were also focused on energy and resource saving, resulting in a total cost reduction of 333.94 million yen.

Environmental conservation effects Previous year’s result
(base period)
This year’s result
(comparison period)
Effects in FY 2014 Effects in FY 2013 Effects in FY 2012
Environmental conservation effects on resources invested in business activities Reduction in energy consumption (Electricity) 11,857,461KW 11,933,153KW -75,692KW 366,470KW 1,293,329KW
Reduction in energy consumption (Heavy oil) 277,600L 262,750L 14,850L 36,900L 7,750L
Reduction in energy consumption (Kerosene) 176,520L 174,000L 2,520L -5,650L 32,150L
Reduction in energy consumption (Natural gas) 796,378Nm3 825,112Nm3 -28,735Nm3 -69,474Nm3 -254,916Nm3
Environmental conservation effects on environmental impact and waste from business activities Reduction in emissions of substances with environmental impact (CO2) 7,837.6t 8,452.2t -614.6t 264.7t 4.8t
Reduction in generated waste, etc. 2,499.5t 2,580.2t -80.7t -112.2t 110.4t
Environmental conservation effects Previous year’s result
(base period)
This year’s result
(comparison period)
Effects in FY 2014 Effects in FY 2013 Effects in FY 2012
Economic effects associated with environmental conservation measures (Substantial effects)
Reduction in costs Cost reduction through energy and resource saving 26,928 19,441 15,358
Reduction in waste treatment costs through reuse of resources 6,465 4,133 3,261

Reference data on environmental conservation costs

The classification of environmental conservation costs according to their characteristics is shown below.
With regard to investments, the focus was on the adoption of environmentally friendly facilities with energy saving features.
Costs were mainly allocated for the reduction in the generation of waste and its proper treatment, and the promotion of recycling of resources.

(Unit: 10,000 yen)

Environmental conservation costs (Classification according to the types of environmental conservation efforts)
Category Major efforts Investments Costs
(1) Costs related to global warming prevention measures Replacement with LED lights/td> 530 988
(2) Costs related to measures to protect the ozone layer Updating of air conditioners to the inverter type 2,153 486
(3) Costs related to the protection of the atmospheric environment Addition of dust collectors 8,249 7,975
(4) Costs related to measures to reduce noise and vibration Installation of soundproof walls 554 275
(5) Costs related to measures to protect water, soil and ground environment Maintenance of wastewater treatment facilities 768 4,711
(6) Costs related to waste recycling Costs incurred for recycling 654 18,596
(7) Costs related to the handling of chemicals Use of biodegradable raw materials 0 15,013
(8) Costs related to natural environment conservation Maintenance of plants and trees on the premises 0 1,290
(9) Other costs Operation and management costs, etc. 0 1,517
Total 12,908 50,850

Reference data on environmental conservation effects

In fiscal 2006, we started aggregating data on environmental conservation effects by individual offices. The per-unit effects both in the previous and current years were calculated based on the production and energy consumption of each office.

The consumption of manufacturing resources fluctuates in response to various factors, such as production volume depending on the market situation, climate, and social circumstances. Therefore, KOSÉ analyzes environmental conservation effects both in terms of total consumption and per-unit consumption.

Change in production volumes at major manufacturing sites

(Unit: 1,000 dozen)

  FY 2014 Year-on-year FY 2013 FY 2012
KOSÉ Sayama Office 2,060 93.3 2,207 1,423
KOSÉ Gunma Office 8,217 109.3 7,515 7,154
ALBION Kumagaya Office 1,724 116.2 1,484 1,594
Total 12,001 107.1 11,207 10,171

Outsourced production by contracted manufacturers is not included.

Change in the actual overall consumption and the basic-unit equivalent of environmental conservation effects

The total consumption of each energy source only includes substantial consumption that is calculated based on sound grounds within the data collection scope.

* The bar graph in each table shows the total consumption (the scale on the left side) and the line graph shows the environmental conservation effects per basic unit (the scale on the right side).

Data collection for FY 2014

Data for environmental accounting is collected from both KOSÉ Corporation and its manufacturing subsidiaries in Japan from the perspective of group management.

Data collection period FY 2014 (2014/4 to 2015/3)
Data collection scope All factories of KOSÉ Corporation and its affiliate companies in Japan (ALBION CO., LTD., INTERCOSME INC., and ADVANCE CO., LTD.)
Data collection standards In reference to the Environmental Accounting Guidelines 2005 and the Environmental Reporting Guidelines 2007

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