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〔The Environment〕For 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 2005.

Environmental conservation costs

We have invested in Kumagaya factory to build a new Welfare/Material building as well as to revamp the existing production building with air-cooled cooling equipment. 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.

We actively accelerated our investment in incorporating biodegradation materials to develop products that contribute to the environmental conservation, and allocated the investment as the research and development cost.
We are highly aware of the prevention of pollution, and promoting activities such as implementing and maintaining effluent treatment facility and ammonia (NH3) deodorization equipment as well as efforts such as using natural gas as the fuel for boilers.We will continue our proactive efforts to raise awareness of environmental costs and promote environmental investments.

(Unit:10,000yen)

Category Major efoorts FY2018 FY2017 FY2016
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 2,823 22,598 3,392 18,149 22,468 12,784
(2)Global environmental conservation cost Recycling, wastewater reuse, efficient use of resources, industrial waste disposal costs, etc. 2,203 1,103 1,875 1,293 1,127 1,277
(3)Resource recycling costs Water saving, effective use of resources, industrial waste treatment, etc. 149 12,038 781 11,871 6,200 12,079
2. Upstream and downstream costs Green purchasing, cost of recycling containers, packages, etc 0 24,184 0 22,949 0 15,304
3. Costs of management activities Environmental education, committees, ISO-related activities, environmental impact measurement 0 1,105 0 1,362 0 1,265
4. Research and development costs Development of environmentally friendly products 0 20,969 0 22,468 0 24,901
5. Social activity costs Announcement of measures to improve the environment and environmental information 0 955 23 949 49 979
6. Costs to repair environmental damage 0 0 0 0 0 0
total 5,176 82,952 6,071 79,041 29,844 68,597

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

Cost savings due to the adoption of the box noh book, which was calculated as an effect from the fiscal year 2018 to the fiscal year 2017 (the propeller book no longer attached as a separate sheet) has been excluded, have been excluded. This is because the expansion of items has met a certain level, and it is unlikely that major new products will be introduced in the future. In order to reflect the effect of this exclusion we changed the aggregation method of the items related to the cost reduction of the environmental conservation efforts, and we have adjusted the results since 2017 accordingly.

Regarding energy consumption, we reviewed the operation of boilers that use natural gas, and significantly reduced the usage to 528,103 Nm3. As a result, although production volume increased to 121.1% year-on-year, CO2 emissions could be reduced not only per unit, but also in total amount. (Total CO2 emissions 96.9% year-on-year)

We are also actively working on energy saving and resource saving measures, resulting in a total cost savings of JPY6,050,000.

Environmental conservation effects Previous year’s result
(base period)
This year’s result
(comparison period)
Effects in FY 2018 Effects in FY 2017 Effects in FY 2016
Environmental conservation effects on resources invested in business activities Reduction in energy consumption (Electricity) 20,456,101KW 20,984,204KW -528,103KW -6,287,191KW -1,826,602KW
Reduction in energy consumption (Heavy oil) 219,500L 212,750L 6,750L 40,500L -1,500L
Reduction in energy consumption (Kerosene) 172,000L 141,100L 30,900L -18,822L 4,822L
Reduction in energy consumption (Natural gas)
 2,270,119Nm3 1,996,586Nm3 273,533Nm3 -1,073,665Nm3 -388,761Nm3
Environmental conservation effects on environmental impact and waste from business activities Reduction in emissions of substances with environmental impact(CO2 16,177.8t 15,775.7t 402.1t -6,466.3t -568.6t
Reduction in generated waste, etc. 2,811.0t 3,096.3t -285.3t -301.4t 231.2t
Environmental conservation effects Previous year’s result
(base period)
This year’s result
(comparison period)
Effects in FY 2018 Effects in FY 2017 Effects in FY 2016
Economic effects associated with environmental conservation measures (Substantial effects)
Reduction in costs Cost reduction through energy and resource saving 2,520,000 yen
Reduction in waste treatment costs through reuse of resources 3,530,000 yen 3,140,000 yen 3,570,000 yen

We have changed the aggregation method of the items related to the economic impact of the environmental conservation efforts, and applying the new method to the aggregated results since 2018.The past results before 2018 have been so adjusted with the new aggregation method.

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 48 648
(2)Costs related to measures to protect the ozone layer Updating of air conditioners to the inverter type 1,345 408
(3)Costs related to the protection of the atmospheric environment Addition of dust collectors 955 15,337
(4)Costs related to measures to reduce noise and vibration Installation of soundproof walls 301 184
(5)Costs related to measures to protect water, soil and ground environment
 Maintenance of wastewater treatment facilities 1,567 6,305
(6)Costs related to waste recycling Costs incurred for recycling 149 24,196
(7)Costs related to the handling of chemicals Use of biodegradable raw materials 0 20,969
(8)Costs related to natural environment conservation Maintenance of plants and trees on the premises 0 955
(9)Other costs Operation and management costs, etc. 810 13,950
Total 5,176 82,952

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 2018 Year-on-year FY 2017 FY 2016
KOSÉ Sayama Office 6,622 122.1 5,425 5,676
KOSÉ Gunma Office 10,973 126.1 8,703 8,298
ALBION Kumagaya Office 2,512 101.6 2,473 1,898
Total 20,106 121.1 16,601 15,872

Outsourced production by contracted manufacturers is not included.

Kose Sayama Office includes ADVANCE CO., LTD.

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).

The upper part of the power consumption bar graph is the power generated by private power generation.

Data collection for FY 2018

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 2018 (2018/4 to 2019/3)
Data collection scope All factories of KOSÉ Corporation and its affiliate companies in Japan
(ALBION CO., LTD., KOSÉ INDUSTRIES CO., LTD., and ADVANCE CO., LTD.)
Data collection standards In reference to the Environmental Accounting Guidelines 2005 and the Environmental Reporting Guidelines 2012

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