Details of the Green Ink Accounting Report

About fiscal years:
For the period from FY 1998 to FY 2000, green ink indictor figures from FY 1997 were used as a base to calculate comparative improvement percentages. After FY 2001, figures from 2000 will be used to calculate improvement percentages. In addition, in order to keep up with changes in environmental issues, the calculation methods will be revised every three years.

FY 1998 "Environmental Impact Reduction Green Ink" Indicator: +22 ECO

Calculation Method
(1) 1997 to 1998 improvement rates are calculated for data in each of 11 categories of environmental impact (total volumes).
(2) A weight is assigned to each of the 11 categories of environmental impact, according to perceived importance to Takara Shuzo in environmental protection.
* Categories were assigned a weight value of 1 to 5 by the company, based upon discussions and voting by a team of eight composed of three neutral environmental issue researchers and five employees from Environment Services.
(3) 1 ECO is defined as being equal to a 1% improvement in the average of weighted values.
* The methods and calculation process behind the "Environmental Impact Reduction Green Ink" indicator are published along with the results (see p. 6).

Environmental Impact Reduction Green Ink Data

About revisions to the data (revisions from last year's data and this year's early abstract data):
* SOx Values: Values for sulfur revised from official values to actual observed values.
* Electricity: Calculated using purchased electricity, without electricity generated on premises.
* Container and Packaging recycle data: Calculated with most current data.
* ECO calculation order was changed slightly.

Background of the +22 ECO Rating
* Production output reflected in the FY 1998 Green Ink indicator was down 8% from 1997. This creates a natural increase of 8 ECO; the additional 14 ECO is attributable to the results of reduction efforts. (Production volume for FY 1998 was 282,639 kl; for FY 1997, 307,423 kl.)
* Major factors behind the increase include the 100% rate of recycling of waste liquid from the distillation of shochu spirits into raw material for cement; reduction in the use of non-recycled materials in containers and packaging; and reduction in the number of containers not recycled after consumption.

Factory Waste Reduction

(FY 1997) 16,462 tons waste acids: (FY 1998) 1,950 tons (FY 1997) 13,705 tons (FY 1998) 70 tons

Use of non-recycled materials in containers and packaging

(FY 1997) 35,600 tons (FY 1998) 27,600 tons

Containers and packaging not recycled

(FY 1997) 36,600 tons (FY 1998) 28,600 tons

FY 1998 "Social Contribution Green Ink" Indicator: -17 EC

Calculation Method
(1) Social contribution activities for this green ink indicator were limited to two categories: natural conservation activities and environmental education activities.
(2) 1 ECO is defined as an increase of 1% from FY 1997 to FY 1998 in donations to social contribution activities.

Social Contribution Green Ink Data

Natural Conservation Activities
	FY 1997	FY 1998
Keep the Shimanto River Clean Campaign	active	active
Hokkaido Firefly Project	active
Hokkaido Wildlife Fund	active
Harmonist Fund	active	active
Save the Japanese Pine Tree Campaign	active	active
Save the Japanese Bamboo Campaign	active	active

Environmental Education
	FY 1997	FY 1998
Clean CAN Walking	active	active
Recycle Handbook	active
Factory Event: Recycling Education Expo	active	active
In-house Environmental Education Pamphlet	active
Total	94.252 million yen	77.831 million yen
98 / 97	83%
FY 1998 Social Contribution Green Ink Indicator	-17 ECO

Background of the -17 ECO Rating
* Major reasons for the decrease include the closing of two natural conservation campaigns in Hokkaido and reduced expenses for ongoing campaigns.

Notes on Green Ink Accounting

Weighting of the 11 Environmental Impact Categories
Our Green Ink Accounting is a process that integrates improvement in 11 categories of environmental impact, different in kind and measure, into one indicator. Corporate activities to improve the environment vary in content and how they are measured. We call the process of creating one indicator which uses one standard of evaluation and which allows comprehensive decision-making Green Ink Accounting. *1

However, there is no objective or scientific basis for evaluating different environmental issues, from CO2 emissions to factory wastes, on an equivalent basis. The process necessarily incorporates the subjective opinions of the participants.

Takara Shuzo gathered a team of eight individuals - three environmental issue researchers from outside the company and five employees from Environment Services - to discuss 11 environmental impacts from the viewpoint of their importance to Takara Shuzo's environmental conservation activities. This was followed by votes to determine a 5-tier ranking, with the following results:

The burden on the environment from the company's raw material use, water use and effluent are relatively low.	Weight 1
Reduction of CO2 is recognized as a recent priority, as are the related categories of electricity use, fuel use and CO2 emissions.	Weight 3
In comparison to CO2 issues, the company's emissions of SOx and NOx are within standards.	Weight 2
Factory and other industrial waste is a major social issue, and its reduction is a top priority. In particular, our company is lagging in its implementation of 100% resource recycling and is speeding up efforts to achieve this.	Weight 5
Categories related to container waste (containers and packaging that are discarded rather than recycled after the product is consumed) are a major concern for makers of alcoholic beverages, with solutions a high priority.	Weight 4

Participants in the Environmental Impact Category Weighting Discussion
Professor Takashi Gunjima, Doshisha University Economics Department Assistant Professor Masanobu Ishikawa, Tokyo University of Fisheries, Fisheries Department
Tatsuya Nakaji, Chief Researcher, Green Marketing Institute Co.,Ltd.
Yoshihisa Umeda, Shuji Nishio, and Kuniharu Matsumoto, Environment and Quality Insurance Division, Takara Shuzo Co., Ltd.
Akira Yoshida, Yuichiro Suzuki, Environment Services Division, Takara Shuzo Co., Ltd.

*1 There are several examples of this process in Europe. The Environmental Agency of Switzerland is testing a program under which companies multiply annual waste by an "Eco-Factor" coefficient for the environmental impact of materials to calculate "Total Environmental Impact Points". However, it is not a system that can be implemented simply in Japan and includes neither the same type of indicators nor categories as does Green Ink Accounting.