Environmental Accounting: Analyzing Environmental Costs and the Effects of Environmental Conservation

A company's environmental conservation activities are more than just an expenditure of funds; they also represent the values of corporate management. Environmental Accounting pinpoints the environmental expenditures and their meaning to the company as a monetary value.

The most significant aspect of corporate environmental activities is the reduction of the environmental burdens visited upon society. Green Ink Accounting expresses environmental impact reduction through an indicator called "green ink". This method of arriving at a total evaluation through the use of a comprehensive impact indicator is called "Environmental Accounting" in Europe.

The Green Ink Accounting Annual Report summarizes the relation between environmental costs and the effects of conservation as "Environmental Conservation Effectiveness Comparison" Environmental Accounting. It becomes possible to evaluate impact reduction activities and their effectiveness, or the cost spent on them, for various categories by individually calculated ECO points.

Premise for Environmental Cost Totals

Investments and Expenses targeted 50% or more toward environmental conservation.

A. "Environmental Conservation Effectiveness Comparison" Environmental Accounting (FY 1998)

Environmental Impact Reduction Green Ink Data
Social Contribution Green Ink Data

	Expenditures
FY 1998	77.831million yen
FY 1997	94.252 million yen
Improvement	-17%

Summary

FY 1998 Environmental Impact Reduction Green Ink Indicator Related Environmental Costs	+22 ECO 945.263 million yen
FY 1997 Social Contribution Green Ink Indicator Related Environmental Costs	-17 ECO 77.831 million yen
Total Cost	1,023.094 million yen

B. Totals for Environmental Costs in FY 1998

Category		Investment (1000 yen)	Expenses (1000 yen)	Examples
1. Direct Costs for Environmental Impact Reduction		134,371	35,453
Pollution Prevention	Air Pollution Prevention	3,386	4,700	Improvement of incinerators
	Water Pollution Prevention	29,559	14,421	Water quality measurement instruments, waste water processing facilities
	Soil Pollution Prevention	3,776	17	Leak-resistant/proof chemical tanks
	Offensive Odor Prevention	7,823	1,302	Odor removal equipment installed on incinerators
	Noise and Vibration Prevention	9,380	8,543	Sound proof walls
Prevention of Global Warming		3,286	0	Purchase of natural gas-fueled vehicles
Processing and Recycling Costs for Industrial Wastes		77,161	6,470	Equipment to remove pollutants from effluent
2. Indirect Costs for Environmental Impact Reduction		16,008	105,207
Employee Education			2,591	ISO lectures
Costs for EMS (ISO 14001)			36,655	Auditing fees
Environmental Impact Monitoring Measurements		12,222	695	Measurement instruments
Factory Environment Facilities		3,786	7,154	Green Area equipment
Green Purchasing			42,975	Purchase of materials and commodities
Environmental Information Disclosure			15,137	Costs for producing the Environmental Accounting Annual Report
3. Impact Reduction Costs Accompanying Use and Disposal of Products		296,131	652,311
Container and Packaging Recycle Law (commissioning product recycling)			48,057
Costs for Simplified Container Recycling		296,131	18,987	EcoPet, bulk sales
Maintenance of Container Recycling System			414,621	Costs for maintenance of the returnable system, costs for processing one-way containers
Constructing a Societal Recycling System			170,646	Recycling equipment, expenditures to businesses, expenditures for industry activities
4. Social Involvement Costs (Social Contributions)			101,369	Natural conservation campaign expenses, environmental advertisement costs
		446,510	894,340