Komatsu Environmental & Social Report 2008

Part of this pamphlet (from page 1 to48) was printed using “Morino ChonaiKai Forest Thinning Support Paper,” theresult of a partnership between Office
Chonai-Kai, an environmental nonprofit
organization working to support usedpaper recycling, and Iwate Prefecture’s
Iwaizumi-cho municipality, which is
working to promote forest restoration.

Komatsu has been participating in the national movementin Japan to mitigate climate change known as “TeamMinus 6%.”This report was printed using soy ink.

CSR Department and Environmental Affairs Department
2-3-6, Akasaka, Minato-ku, Tokyo 107-8414, Japan
Komatsu website
http://www.komatsu.com/CompanyInfo/csr/
Komatsu welcomes your comments.
E-mail: kankyo@komatsu.co.jp
CSR Department
TEL: +81-3-5561-2616
FAX: +81-3-3505-9662
Environmental Affairs Department
TEL: +81-3-5561-2646
FAX: +81-3-3582-8332

HEER080808 Printed in Japan

Environmental & Social Report 2008

Message from Top Management

The Basic Stance of Management at the Komatsu Group is to enhance Quality and Reliability
and thereby maximize corporate value. We consider corporate value to be the total sum oftrust given to us by society and all stakeholders, and we pursue business operations firmly
grounded in that philosophy.
Komatsu places the environment among our highest management priorities. We are reducing
environmental impact in all aspects of business operations, from product development toprocurement, manufacturing, logistics, sales, and after-sales service.
In the area of product development, we have continued to introduce “DANTOTSU products”(unique and unrivaled products) to the market. We have given particular attention to reducing
fuel consumption—and therefore carbon dioxide (CO2) emissions—during product operation,a stage in the product lifecycle responsible for a large portion of total CO2 emissions. Among
our recent innovations is the PC200 hybrid hydraulic excavator, the world’s first hybrid
construction equipment vehicle, which was announced in May 2008 and which reduces
CO2 emissions by 25%. We are also pleased to have released a 2-ton model of our hybrid
electric forklift truck. First developed in FY2007, the Komatsu hybrid emits 20% less CO2
than standard electric forklift trucks. We will maintain our commitment to delivering productswith lower environmental impact.
CO2 Emission Reductions in
Manufacturing
(%)
100

100
90
80

78.3

80.0 or less70

Manufacturing operations realized a significant achievement in FY2007 when our plants inJapan surpassed earlier than scheduled our FY2010 target of reducing CO2 emissions by
20% per unit of manufacturing value from the level of achievement in FY2000. In addition, weare striving to bring CO2 emissions in logistics to their FY1990 levels by FY2010. In January
2007 in Japan, construction was completed on the Ibaraki Plant, adjacent to the port ofHitachinaka, and on the Kanazawa Plant, next to the port of Kanazawa. Since then we havebegun building a new plant neighboring the Kanazawa Plant to manufacture super-large
construction equipment. These new plants will allow us to further reduce CO2 emissions
during overland product transportation by shortening shipping distances.

0
(FY)

2000

2007

Target for2010

100 or lessOur endeavors to mitigate environmental impact go beyond CO2 emission reductions,extending to providing on-site recycling options, remanufacturing used components (parts)
in our “Reman” business at the global level, recycling used rubber crawler shoes, reducing
waste generation and recycling as part of our zero emissions activities at manufacturing
facilities, and meeting the requirements of REACH, a new EU regulation on chemical
management that has come into force. We are also working to quantify and visualize theeffects of our environmental initiatives through environmental accounting, as a means ofmaximizing environmental performance while minimizing economic costs. Our subsidiaries
outside Japan, sales agencies, rental companies, and business associates are cooperatingwith Komatsu as we advance our environmental activities based on still higher objectives.

Target for2010

The entire Komatsu Group remains firmly devoted to strengthening its corporate governance.
We are redoubling our efforts in disclosing corporate information to earn the trust of society
and our stakeholders and in contributing to society.

CO2 Emission Reductions in
Logistics
(%)
100

100

92
90
80
70
0
(FY)

1990

2007

Product Development

Target for
FY200865%

DANTOTSU
models out of
total products
sold in FY2007
53%

The important obligation of fulfilling corporate social responsibility requires us to formulatea corporate structure to promote it. Moreover, all our employees around the world must
consider necessary steps to address various issues individually through global teamwork
in conjunction with our partners. By realizing just such a company, Komatsu intends tocontribute to the realization of a sustainable society.

Kunio Noji
President and CEO

Contents

1 Developing Hybrid Hydraulic Excavators

Message from Top Management ........ Inside front cover

Overview of the Komatsu Group . ................... 2

Comparison of Fuel Consumption(%)
100

Compared toFuela standard
model Consumption

Maximum of 41% Reduction(Estimation of
Average Use)

80

Company Profile......................................................... 2
2007 Highlights........................................................... 3

Measured Data from
Actual Use by Customer

25% Reduction–30%

Environmental Activities.................................. 4

–31%
–41%

60

Special Story40

0PC200-8
Standard
Model

PC200-8
HybridCompany A Company B Company C(waste soil
(civil(sludgedisposal) engineering) disposal)
Actual results of the PC200-8
Hybrid model

ss P. 42 Developing Hybrid Electric Forklift Trucks
Energy Conservation Functions of the HybridElectric Forklift Truck
1.5-ton gasoline-poweredmodel

1.5-ton standard electricpowered model

FB15HB-12

FB15HB-12(New in May 2007)

Total CO2 emissions
over five years

32,300 kg-CO2

Total CO2 emissions
over five years

10,400 kg-CO2

Total CO2 emissions
over five years

8,300 kg-CO2

Activities for Society..................................... 20

ss P. 123 Developing Small AC Servo Presses
Effect on environmental impact
Material production processes
Machine manufacturing processes
Operation
Disposal

85.8
Mechanicalpresses

35.0
45.5

H2W200

0

20

40

60

80

100 (%)

ss P. 142

CO2 Emissions(1,000 t)
400

100

100

(%)

101.0 100.2

100

95.0
324

300

86.8

200

227

306
83.5

Ibaraki Plant adjacent to the port ofHitachinaka in Japan

100

224

268

280

90

279
81.2

85.6

78.3
82.0

80
80 or less
70

71.6

70 or less
66.30(FY) 1990
2000
2003 2004 2005 2006 20072010
Manufacturing value: The total production cost excluding direct material
cost, other facilities’ components, and procured components
Total amount of CO2 emissions by the entire Komatsu Group
manufacturing facilities in Japan
Index per unit of manufacturing value by Komatsu Group
manufacturing facilities in Japan (compared to FY2000)
Index per unit of manufacturing value by Komatsu manufacturing
facilities and Komatsu Castex plants (compared to FY1990)

0

ss P. 15

Kanazawa Plant adjacent to the portof Kanazawa in Japan

Komatsu’s Social Contribution Activities in Africa............ 20
Activities for Society/Communication with
Stakeholders. ........................................................... 22
In Cooperation with Employees................................. 24
Social Contributions.................................................. 27

Managerial Structure.................................... 30
The Basic Stance of Management............................. 30
Corporate Governance.............................................. 31
Promoting Compliance and Risk Management. ......... 33
Quality and Reliability................................................ 34

Data............................................................... 38
Data on Environmental Impact Resulting from
Business Activities.................................................... 38
Environmental Accounting......................................... 40
Environmental Management...................................... 42
Environmental Data by Manufacturing
Facility in Japan ...................................................... 44
Overview of Komatsu’s Environmental andSocial Activities to Date............................................. 47
External Commendations on Environmental
Conservation and Social Activities andExternal Evaluations.................................................. 47
Environmental Data by Manufacturing Facility
outside Japan........................................................... 48

Data

4 Reducing CO Emissions in Manufacturing and Logistics

Special Story

Managerial Structure

Provisional Calculations of CO2 Emissions over
the Life Cycle of the Small AC Servo Press(Per unit of manufacturing)AC servo press(overall effects)

Activities for Society

Received
the Ministerof Economy,
Trade andIndustry Awardin the Awards
for EnergyConserving
Machinery

Komatsu Introduces the World’s First Hybrid
Hydraulic Excavator.................................................... 4
I Pursuing Environmental Management
Komatsu’s Relationship with the Environment. ......... 6
Komatsu Earth Environment Charter........................ 7
Environmental Action Plan and
Results for FY2007.................................................. 8
Environmental Management Structure................... 10
I Mitigating Climate Change
Mitigating Climate Change at Komatsu. ................. 12
I Creating a Sound Material-cycle Society
Komatsu’s Initiatives to Bring abouta Sound Material-cycle Society. ............................ 16
I Minimizing Environmental Risks
Environmental Risk Management. ......................... 19

Environmental Activities

20

PC200-8 Hybrid(Announced in May 2008)

Overview ofthe Komatsu Group

Mitigating Climate Change at Komatsu

Independent Review on
Environmental & Social Report 2008 ......................... 49
Notes from the Editor................................................ 49

1

Company Profile

Overview ofthe Komatsu Group

Company name:
Komatsu Ltd.
Established:
May 13, 1921
Head Office:2-3-6, Akasaka, Minato-ku, Tokyo 107-8414, Japan
Representative:
President and Chief Executive Officer Kunio Noji
Capital:Consolidated¥67,870 million (US$678 million*)		
as of March 31, 2008 (Amounts less than		
1 million have been omitted.)
Net sales:
Consolidated¥2,243,000 million (US$22,430 million*)(for the fiscal year** ended
Non-consolidated ¥926,700 million (US$9,267 million*)
March 31, 2008)	*U.S. dollar amounts are converted at the rate of ¥100 = US$1.00, theprevailing rate announced by the Federal Reserve Bank of New York on
March 31, 2008.
	**Komatsu’s fiscal years end on March 31. “FY2000,” for example, meansfrom April 1, 2000 to March 31, 2001.

Main
lines of business Manufacture and sale of construction and mining equipment,	(Komatsu Group):utility equipment (small construction equipment), forestry
equipment, industrial machinery, etc.
Komatsu Group profile: Number of companies (consolidated subsidiaries) 165

Number of employees: (as of March 31, 2008)
Consolidated
39,267
Non-consolidated
6,873
Consolidated subsidiaries in Japan
18,570Consolidated subsidiaries outside Japan 20,697
Number of employees by region: (as of March 31, 2008)
Japan
18,570
North America
4,059
Latin America
5,027Europe and CIS
3,909
China
2,645
Asia (excluding Japan and China) andOceania
4,027
The Middle East and Africa
1,030(as of March 31, 2008)

Changes in Consolidated Sales(billion
yen)
2,000

2,243.0
1,893.3

Sales by Operation (FY2007*)Sales by Region (FY2007)

Industrial machinery,
vehicles, and others
345.4

Asia (excluding
Japan andChina) andOceania348.4

1,701.91,500

15%1,434.7
1,196.4

China
189.9

85%

500

10%
23%

8%

2,243.0(billion
yen)
19%

0

(FY) 2003

2004

2005

2006

2007

*From April 1, 2007 to
March 31, 2008

Scope of This Report

Japan
505.2

16%

2,243.0(billion
yen)

1,000

The Middle East
and Africa
230.6

Construction andmining equipment
1,897.6

Europe and CIS
427.7

8%

16%
North
America
352.5
Latin America
188.7

Komatsu (parent company) manufacturing facilities, specifically the following four plants:

 he Awazu Plant (including the Defense Systems Division, Industrial Machinery Division [Komatsu Plant, Kanazawa Plant], and Komatsu Machinery Corporation), the Osaka Plant, the Oyama Plant (includingT
the Koriyama Plant, Komatsu Cummins Engine Co., Ltd., Industrial Power Alliance Ltd., Komatsu Castex Ltd. [Oyama Plant], and GIGAPHOTON, Inc.), and the Mooka Plant (including the Ibaraki Plant).

Komatsu Group manufacturing facilities in Japan, specifically the above four plants and the following six business units:

 onstruction Equipment Electronics Division (including Komatsu Electronics, Inc.), Komatsu Utility Co., Ltd. (Tochigi Plant, Kawagoe Plant), Komatsu Engineering Corp. (Awazu Plant), Komatsu House
C
Ltd., and Komatsu Castex Ltd. (Himi Plant).

Komatsu Group manufacturing facilities outside Japan, specifically the 18 business units appearing in the world map below.
*Komatsu carries on business operations directly and through 165 subsidiaries and 43 equity method affiliates organized under the laws of countries throughout the world. In this report on environmental andsocial activities, “Komatsu” and “Komatsu Group” are at times used informally to refer to the activities of all or some of the Komatsu family of companies, without regard to their separate legal identities.

Komatsu Forest AB

Komatsu America Corp.,
Peoria Manufacturing Operation
Komatsu UK Ltd.

Komatsu Shantui Construction
Komatsu Hanomag GmbH
Machinery Co., Ltd.
Komatsu Mining Germany GmbH
Komatsu (Changzhou) Construction
Machinery Corporation
Komatsu Group manufacturing
facilities in Japan
Komatsu (Changzhou)
Foundry Corporation
Komatsu (parent company)
manufacturing facilities
Komatsu Utility
Bangkok Komatsu Co., Ltd.
Hensley Industries, Inc.
Europe S.p.A.

Komatsu America Corp.,
Candiac Manufacturing
Operation

Komatsu America Corp.,
Chattanooga Manufacturing
Operation
Komatsu America Corp.,
Newberry Manufacturing
Operation

Komatsu Mexicana S.A. de C.V.
L&T-Komatsu Limited
PT Komatsu Indonesia Tbk
Komatsu do
Brasil Ltda.
Major Changes since the 2007 Edition
T In April 2007, Komatsu Zenoah Co.’s outdoor power equipment business was transferred to Husqvarna Japan Ltd.
Its business data has retroactively been eliminated from this report’s performance data and environmental accounting.
T In April 2007, the Koriyama Plant of Komatsu Zenoah Co., which manufactures hydraulic components, was absorbed by Komatsu Ltd.
Its performance data is reported under the Komatsu (parent company) Koriyama Plant.
T In April 2007, the mini construction equipment business of Komatsu Zenoah Co. and Komatsu Forklift Co., Ltd. merged to become Komatsu Utility Co., Ltd.
The mini construction equipment business is reported under the Komatsu Utility Co., Ltd. Kawagoe Plant, while the forklift truck business is reported under the Komatsu Utility Co., Ltd. Tochigi Plant, the sameas in the 2007 report.
*With regard to activities for society, this report contains some activities of Komatsu Group companies not mentioned above.

2

2007 Highlights

In June 2008 Komatsu launched its PC200-8
electric hydraulic hybrid excavator, the world’s
first hybrid construction equipment vehicle. The
Komatsu Hybrid System maintains the basic
functionality of the PC200-8 standard model
while reducing fuel consumption by approximately 25%.

Hybrid Electric Forklift Truck Receiving
a Ministerial Award

Mitigating Climate Change in
Manufacturing Operations

Komatsu’s hybrid electric forklift truck received
The Minister of Economy, Trade and Industry
Award, the highest distinction in the FY2007(28th) Awards for Energy-Conserving Machinery
sponsored by The Japan Machinery Federation.

Komatsu implemented various improvements
throughout the company in FY2007, guided
primarily by the All Komatsu Energy Saving
Working Group. As a result, CO2 emissions perunit of manufacturing value have decreased by
21.7% compared to the FY2000 level. Onceagain Komatsu has achieved its medium- tolong-term objectives ahead of schedule.

Overview ofthe Komatsu Group

PC200-8 Hybrid Excavator

CO2 emission reductions perunit of manufacturing value(compared to FY2000)
Target for FY2010:
20% reductions
Results for FY2007:

21.7% reductions
ss P. 4

ss P. 12

ISO14001 Integrated Certification for the
Komatsu Group in Japan

Educating in Japan Environmental Affairs
Representatives at Chinese Subsidiaries

Komatsu added its major non-manufacturing
facilities that had not previously been certified—the Head Office, Research Division, and Techno
Center—to its four plants that had alreadyacquired integrated certification, thereby attaining
integrated certification for the Group in Japan.

Seventeen personnel in charge of environmental affairs at nine Chinese subsidiaries wereinvited to Japan for seven days of educationand training in environmental management,
beginning March 3, 2008.

ss P. 10

Promoting Recovery from the Niigata-ken
Chuetsu-oki Earthquake in Japan andOther Disasters
Komatsu provides various types of assistanceso that areas impacted by natural disasters canrecover as quickly as possible. The company donates or lends construction equipment
and facilities necessary for rescue and recovery
activities. It also makes monetary donations.
Komatsu assisted the areas affected by the
Niigata-ken Chuetsu-oki earthquake in July 2007
by providing a temporary building for a nurseryschool free of charge.

ss P. 28

ss P. 11

ss P. 15

Removing Anti-personnel Landmines
The demining machine for anti-personnel
landmines developed by Komatsu was firstused in September 2007 in Afghanistan. Since
then, Komatsu’s second and third demining
machines were shipped to Cambodia andthe fourth one is expected to arrive in Angola,
Africa in August 2008. This report’s “Special
Story” section discusses anti-personnel landmine removal in Africa in greater detail.

ss P. 21

Promoting Sports through Judo

Formulating The KOMATSU Way

One of the main focal points of Komatsu’ssocial contributions has been the field of sports.
Komatsu has been promoting judo for years
through the Komatsu Women’s Judo Club. In
November 2007, the company donated support
for the establishment of the Jining Komatsu
Judo Facility in the city of Jining, Shandong
Province, China.

FY2007 marked the second year since theKomatsu Group formulated The KOMATSU
Way to define the Group’s strengths and clarify
the convictions, attitudes, and know-how that
support those strengths. The Group is now
engaged in human resources development toensure that Group companies around the worldtake up this philosophy. When fostering The
KOMATSU Way outside Japan, Komatsu takes
great care to make it relevant to each country and culture, mindful of differences amongthem.

ss P. 28

ss P. 303

Special
Story

Komatsu Introduces the World’s First Hybrid
Hydraulic Excavator

Environmental Activities
From ice shelves breaking up in Antarctica to desertification advancing in
Africa, global climate change is taking different forms around the world. Global
warming is the most urgent environmental problem that we face today. It is
partly caused by CO2 which construction equipment also emits. We estimatethat CO2 emissions from all construction equipment working around the world
account for about 0.35%* of the global fossil-fuel CO2 emissions. By improving
fuel economy of our equipment, we hope to make our part of contributions,albeit small, to halting global warming.
We believe that any environmental problem becomes more serious whenpeople fall into thinking that it is too big a task for one person or company.
Representing our 10-year research efforts, the PC200-8 hybrid hydraulicexcavator demonstrates our commitment, as a manufacturer, to doing what we
can to reduce CO2 emissions.
We are also reducing the emissions of nitrogen oxide (NOx) and particulatematters (PM) from our equipment in compliance with international regulations.
New, more stringent regulations will become effective in 2011. We don’t justfollow regulations but hope to set the pace for the industry.
*Based on our own estimation by using 2004 data for global fossil-fuel CO2 emissions and those of fourmain construction equipment types, hydraulic excavators, bulldozers, wheel loaders and dump trucks.

Announcing the Hybrid Hydraulic Excavator
Komatsu invited journalists and industry analysts to the Roppongi Hills Arena in Minato-ku, Tokyo, Japan in May 2008 to announce the Komatsu
hybrid hydraulic excavator. The event included an address by President and CEO Kunio Noji and a presentation involving the excavator, followed
by a lively question and answer session with participants.

4

The Komatsu Hybrid System
Komatsu Hybrid System
InverterPower generation
Inverter motor

Electric motor toturn the upper
structure

Utilizes electricity
discharged from thecapacitor when theengine accelerates.

Recovers energy,
when turning slows
down in loading
operation.
Capacitor
Efficiently andinstantaneously storesand discharges
electric energy.

The upper structure turning

Comparison with Standard Construction Equipment
While standard equipment normally uses a hydraulic motor to turn theupper structure, for this movement, we have developed an electricmotor exclusively for the Hybrid System, which recovers regenerative
energy when the upper structure’s turns slow down. Through the useof this new motor, we have achieved a hybrid excavator.
Standard construction equipment uses only diesel engines for
power, whereas our new hybrid excavator utilizes regenerated energy
to assist the engine when it is accelerating, enabling the use of theengine in a low revolution zone with high-efficiency combustion. In
addition, while the engine runs idle, our hybrid excavator keeps therevolution at a super low level, thereby achieving impressive reductions in fuel consumption.

100

25% Reduction(Estimation of
Average Use)80

Measured Data from
Actual Use by Customer

Comparison with Hybrid Cars: Capacitors vs. BatteriesHybrid cars require a large amount of electric energy when they startmoving and accelerating, then they can run with relatively stableengine revolution. By comparison, construction equipment has toaccommodate dynamic and frequent fluctuations of the engine revolution, for example, for excavation work. To assist the engine for such
fluctuations, the PC200-8 Hybrid is mounted with a capacitor.
Automotive batteries work on the principle of chemical reactions,thus it takes time for them to discharge electricity, lacking sufficient
support when applied to construction equipment. Meanwhile, capacitors can instantaneously and efficiently recover, store and discharge
electricity.

Instantaneousness

Construction
equipment

Maximum of 41% Reduction

–30%

–31%
–41%

60

*Computed according to our internal-use standard concerning average waysof using construction equipment.

40
20Power density(Frequent use of large power)(%)

Compared to the PC200-8 standard model, we have achieved
an average of 25% reduction in fuel consumption. Furthermore, inthe field tests with our customers, we have confirmed the maximum
reduction of 41% at a jobsite where the machine’s upper structure
turns more frequently.

Capacitors vs. BatteriesComparison of Fuel Consumption
Compared toFuela standard
model Consumption

Electric power
assistance at the time ofengine acceleration
Environmental Activities

Outline of the Komatsu Hybrid System
Our proprietary Komatsu Hybrid Hydraulic System recovers energy
generated when the upper structure reduces its speed while turning,
stores the energy in the capacitor, and uses it to assist the power ofthe engine via the power generation motor when the engine accelerates. To ensure high reliability and durability, we manufacture allcomponents of the Komatsu Hybrid System in-house, except forcapacitor cells.

EngineForklift trucks
Batteries

Capacitors
Cars

0
PC200-8
Standard
Model

PC200-8
HybridCompany A Company B Company C(waste soil
(civil(sludgedisposal) engineering) disposal)
Actual results of the PC200-8
Hybrid modelContinuousness
Energy density (Longer use of small power)

5

Komatsu’s Relationship with the Environment
Komatsu promotes environment-friendly activities throughout the entire Group to realize its vision of “What Komatsu Can Do andWhat It Must Do” for the global environment and the sustainable development of society.

Komatsu conducts its business activities in a way that takes environmental conservation and social
responsibility into consideration at every stage of the product lifecycle, including development,
manufacturing, logistics, sales, and after-sales service.
Measures to mitigate global warming (activities to reduce CO2 emissions) constitute Komatsu’s
most important environmental conservation activities. Proactively constructing plants with state-of-theart equipment next to ports has yielded significant drops in CO2 emissions during the manufacturing
and logistics stages. In the sales and after-sales service stages, the company has cooperated withlocal sales and after-sales service agents to promote social and environmental conservation activities.
In the development stage, the company forecasts major cuts in CO2 emissions during the usage stage
by devising construction equipment and forklift trucks featuring outstanding performance focused on
reduced CO2 emissions and fuel consumption.
Komatsu considers corporate value to be the total sum of trust given to it by society and all
corporate stakeholders. Holding this as a priority, the company responds to demands from society
through communication with stakeholders and social contribution endeavors.

Tadashi Okada
Environmental Activities

Executive Officer
General Manager, Corporate
Planning Division
Supervising Environment

international standard for environmental management, boosted its
environmental performance during the manufacturing stage, andoffered products with environment-friendly designs.
In line with the Komatsu Earth Environment Charter revisedin 2003, the Komatsu Group embarks on global initiatives acrossbusiness areas, with subsidiaries responsible for implementation.
The company seeks to achieve the following corporate principles:(1) Contributions to realization of a sustainable society, (2) Simultaneous realization of environmental and economic performance, and(3) Observance of corporate social responsibility.

Business Activities andTheir Impact on the Environment

Pursuing Environmental Management

In recognition of the fact that its business activities affect a numberof stakeholders, most notably the residents of the area surrounding
its activity sites, the Komatsu Group is promoting activities that will
reduce environmental impacts. Komatsu has focused its environmental activities chiefly in the area of construction and mining equipment.
As its primary initiatives, Komatsu has introduced an environmental
management system (EMS) based on ISO14001, a widely accepted

Relationship of the Komatsu Group’s Business Activities with the Environment•Provision of environment-friendly products and services•Creation and operation of a transaction network for usedcomponents (parts), information on “Reman” sales, etc.

Sales and Services•Activities based onhealth and safety andenvironmental guidelines

Logistics•CO2 reductions inlogistics•Improvement oftransport efficiency•Improvement ofpacking material

Komatsu
employee

Development•Environment &Economy•LCA design•Medium-term targets
for development ofenvironmental
technology

aP. 15, 18

Communications
satellite

Sales and after-sales
service agents

Sales, Rentals, and Services

Use•Reduction ofenvironmental impacts
during the productusage stage•Provision of solutions
for customers’
environmental
activities•Promotion of
fuel-efficient operation
Products •Product support
through use of IT
aP. 4–5, 12–14, 36

Products

Reuse of products

Local
community

Komatsu
employee

Reuse

Reuse of parts

aP. 12–14
Business
associatesaP. 12–14, 17

Sales andafter-sales
service agentsaP. 11

Customer

Reuse
ReduceProcurement ofMaterials•Green procurement

Remanufacturing of usedcomponents (parts)(“Reman” business)

Manufacturing

CO2
NOx
ParticulatematterUse

aP. 17aP. 11, 14
Recovery•Mitigation of climate change(energy conservation)•Effective utilization of resources(zero emissions)•Environmental risk management•Elimination of hazardous
chemical substances•Termination of use of organic
chlorinated cleaning solvents

Recycling of materials(outsourcing)
RecycleaP. 15, 18–19

Komatsu
employee

Disassembly
Proper disposal ofwaste (outsourcing)

6

Used vehicles

Komatsu Earth Environment Charter
Rooted in its vision for realizing a sustainable society laid forth in the Komatsu Earth Environment Charter revised in July 2003,
the Komatsu Group seeks to promote activities that, from a global viewpoint, reflect its awareness of its social responsibilities.

Komatsu Earth Environment Charter(July 2003 revision)

Corporate Principles
1. Contributions to Realization of Sustainable Society
The Komatsu Group recognizes conservation of the earth’s environment for a sustainable society as among the most important tasks
for mankind in the 21st century.
The Komatsu Group endeavors to contribute to this task by actively integrating environmental conservation into all of its businessactivities. The Komatsu Group reaffirms its long-term commitment to this effort as an important management priority.

2. Simultaneous Realization of Environmental and Economic Performance
Environmental Activities

The Komatsu Group is committed to improving both environmental performance and economic efficiency, as a group of companies working toward superior manufacturing for customer satisfaction. To this end, the Group constantly takes up the challenge ofadvancing technologies to develop creative products that improve both environmental performance throughout the product’s life
cycle and the product’s economic performance at the same time.

3. Observance of Corporate Social Responsibility
Each company of the Komatsu Group seeks to be a respected corporate citizen of the local community in nations around the world.
Each company strives to fulfill its corporate social responsibility, including compliance with applicable laws and regulations on environmental conservation, as well as voluntary involvement and participation in community programs to address environmental concerns,
and through dialogue and coordination with regulatory authorities, local leaders, and the public. Each of the individual Komatsu Group
companies is responsible for fulfilling its independent legal obligations.

Guidelines for Corporate Activity
Pursuing Environmental Management

1. Framework for Global, Group-wide Environmental Management System
1) Production facilities of the Komatsu Group, already with ISO certifications, will work to maintain and improve their environmental management system, while other production facilities, yet to be certified, will strive to acquire ISO certifications as soon as possible.
The Komatsu Group will also work to introduce and improve an environmental management system in all business domains
other than production, and to implement a program of continuous improvement in environmental performance and in-house environmental auditing.
2) The Komatsu Environmental Committee develops environmental action plans for the Komatsu Group. Each division or affiliatedcompany of the Komatsu Group is responsible for establishing its own mid- to long-term targets based on Group-wide actionplans and for developing and implementing specific action plans.
The Komatsu Environmental Committee also develops common guidelines for an environmental manual for the Komatsu Group,and based on them, each division and affiliated company is responsible for providing for its own rules and procedures in accordance with respective circumstances.

2. Development of Products and Technology with Superior Environmental Quality and Economic Performance1)	The Komatsu Group seeks to develop and provide to customers superior products with world-leading environmental quality andeconomic performance. The Komatsu Group seeks to meet or surpass emission control performance and other environmental
requirements applicable to its construction and mining equipment products. The Komatsu Group establishes common mid-range
technology development goals for each business domain, and each development center is responsible for promoting the development of such technologies in a planned manner.
2)	The Komatsu Group seeks to develop and provide superior environmental products and systems designed to offer customers
optimal solutions in their environmental conservation efforts.

3. Promotion of Zero Emissions1)	The Komatsu Group works to facilitate Zero Emissions manufacturing at all of its manufacturing facilities worldwide by extending
such activities as piloted and achieved at its manufacturing facilities in Japan.
The Komatsu Group also works to facilitate Zero Emissions and other environmental activities of its suppliers. To this end, theKomatsu Group seeks to expand its Green Purchase program and also offers technological support when suppliers may need to
introduce environmental management systems.
2) The Komatsu Group promotes reduction of environmental impacts of its sales and product support activities. The Komatsu Group
offers support to its distributor and affiliated rental companies in Japan by setting up model cases, providing environment-related
information, establishing environmental management guidelines and undertaking other activities. For distributors and affiliated rental
companies overseas, the Group also strives to extend similar activities, as appropriate considering their respective conditions.
3)	The Komatsu Group works to improve life cycle assessment of its products and build a circulation-based business systemdesigned to reduce environmental impact throughout product’s life cycle.

4. Management of Environmental Risks and Observance of Corporate Social Responsibility1)	Each division and affiliated company of the Komatsu Group is responsible for observing applicable environmental standards andregulations of the country or region where it is located as well as its own internal policies and standards, and working to improveits capability to anticipate and address environmental impacts.
2) The Komatsu Group promotes the consciousness of Group employees to the importance of environmental conservation and the
responsibility of employees to fulfilling the Komatsu Group’s commitment to this principle. To this end the Group also promotes education on environmental conservation for employees and special training for environmental management and auditing personnel.
3)	The Komatsu Group promotes disclosure of information concerning its performance of environmental conservation activities. Eachdivision and affiliated company of the Group promotes such disclosure as appropriate based on local circumstances.

7

Environmental Action Plan and Results for FY2007
Komatsu has formulated an Environmental Action Plan (implementation policies) in each field for the practical implementation of
the Komatsu Earth Environment Charter. Komatsu specifies its operational targets every fiscal year and keeps checking yearly
developments, facilitating establishment of a strong base to implement the Action Plan.

Environmental Management
Implementation policies

Objectives for FY2007

Results for FY2007

Medium- and long-term objectives

1. Implement Environmental Action Plan

Draw up and promote thePlan•Conducted internal environmental auditing•Held Environmental Affairs Meeting in Europe

2. Environmental education and training:
Implement the Plan

Draw up and promote thePlan

Formulate and publish thecommunication plan
Establish control with astandard set of indices in
Komatsu Group facilities•Held 14 types of courses with over 4,700
participants•Conducted environmental education andtraining for personnel in charge ofenvironmental affairs at Chinese subsidiaries•Published the Japanese version in July and theEnglish version in August•Compared the development of Komatsu’s four
manufacturing facilities by applying standard
indices for assessing environmental impact

Strengthen sales- and service-related
environmental activities
Strengthen environmental activities
outside Japan
Continue activities in Japan and extend
activities to facilities outside Japan

Objectives for FY2007

Environmental Activities

3. Environmental communication:
Publish an environmental & social report
4. Environmental accounting:Manage operations using standard
indices for assessing environmental
impactFurther
information
P. 11

P. 11
P. 42

Reinforce quality of content; release
report earlier than in previous years
Expand horizontally to Group
manufacturing facilities—

Results for FY2007

Medium- and long-term objectives

Further
information

Develop engine compliant
with standards•Under research/development

P. 12–
P. 13

Develop wheel loader
Develop hydraulicexcavator
Develop bulldozer
Promote the plan

•Developed D31/D37/D39-22 small bulldozer
to comply with emission standards•Developed PC2000 super-large hydraulicexcavator, improving fuel efficiency by 10%

Develop engine and vehicles compliant
with Tier 4 emission standards in the
U.S., Europe, and Japan, effective 2011
Expand number of models compliant
with Tier 3 emission standards,
effective 2006

P. 40

Research and Development
Implementation policies
1. Reduce the environmental impact ofconstruction equipment•Develop lower-emitting diesel engines•Proactively meet exhaust emission
standards

Pursuing Environmental Management•Meet noise and vibration standards•Meet medium-term targets fordevelopment of environmental
technology

Promote the plan

•EU noise standards: Continued to meet themore stringent noise control directive thatwent into effect in 2002
•Reduction of substances of environmental
concern: Worked to substitute for chromium(VI) and reduce use of chloroprene rubber•Started preparations for new EU regulation on
chemical substances (REACH)(Prepared to introduce a system to control
chemical substances contained in products)

Comply with EU Stage II standards on—noise emission levels and EU standards
on operators, effective 2006
Attain medium-term targets for
P. 17
development of environmental
technology
P. 14

2. Reduce the environmental impact ofindustrial machinery•Address environmental issues fromforge rolling machines

Develop small AC servo
press

Expand number of servo press models•Developed small AC servo press, realizing
improvements in productivity (1.4 times) andsubstantial reductions in electrical energy used
(CO2 emission reductions of 55%)

3. Reduce the environmental impact ofindustrial vehicles•Develop environment-friendly forklift
trucksDevelop hybrid electric
forklift trucks•Developed and commercialized hybrid electric Expand number of hybrid electric forklift P. 12
forklift trucks, achieving energy conservation of truck models
up to 20%

4. Provide solutions for customers’
environmental activities•Promote on-site recycling using mobile Expand scope ofcrushers/recyclers
application and promotesocial recognition of on-site
recycling engineering
5. Promote reuse and recycling•Promote Reman business
Expand and promote
Reman business

P. 14•Promoted on-site recycling of construction
residuals at point of generation by mobile
crushers/recyclers

Expand range of machines in themobile crusher/recycler series; expand
areas of applicability

P. 16•Promoted Reman business (remanufacturingof used components [parts]) on a global basis

Promote reuse and recycling throughfurther improvements inrecycling-related technology for parts

P. 17

Topics
Receiving an Award from the Minister of the Environment of Japan forEnvironmental Conservation at the Oyama Plant
Shinichi Kobayashi, Section Head of the Environment and Energy Conservation Group in the General
Affairs Department, has spent much of his career preventing pollution and conserving the environment at
the Oyama Plant. Kobayashi disclosed the know-how gained through creating the framework for the
Oyama Plant’s zero emissions activities, which were a first for the construction equipment industry. This
has led to the spread of zero emissions activities across the construction equipment industry while helping
to achieve zero emissions throughout the Oyama Industrial Park.
His quiet dedication highly regarded, Kobayashi was recognized in June 2008 by the Minister of theEnvironment of Japan with an award for being a Contributor to Local Environmental Conservation.

8

P. 12–
P. 13

Manufacturing
Further
information
P. 10•Improved 21.7% from the level ofachievement in FY2000; attained a 3.6%
improvement over the previous year

Further promote
improvements

P. 15

Attain recycling ratio of 99%
or more•Attained recycling ratio of 99.6% across theentire Komatsu GroupP. 18

Improve 3% over previous
fiscal year

•Accomplished a 4.4% reduction in the volume
of waste generated per unit of manufacturing
value from the level of achievement in FY2005

Maintain zero
emissions; attain zero
emissions at the
Komatsu Group
manufacturing facilities
outside Japan
Achieve by FY2010

Improve 2% over previous
fiscal year

•Accomplished a 10.7% reduction in thevolume of water used per unit ofmanufacturing value from the level ofachievement in FY2005

Further promote
reductions

P. 18

Firmly ensure the control ofchemical substances andreduce volume of released
chemical substances•Accomplished a 3.6% reduction in the volumeof VOCs released per unit of manufacturing
value from the level of achievement in FY2005

Achieve by FY2008
and FY2010

P. 19
P. 43

No tanks requiring
renovations•All 142 tanks renovated by FY2004

Address sequentially all P. 43
underground tanks inoperation for 20 ormore years

Results for FY2007

Acquire integrated
certification for the KomatsuGroup in Japan•Acquired integrated certification for KomatsuGroup manufacturing facilities in Japan andmajor Group companies in Japan, including
the Komatsu Head Office

Improve 1% year on year

•Achieve a reduction of more than 15% by FY2010 in
the volume of waste generated per unit ofmanufacturing value from the level of achievement in
FY2005 at the Komatsu Group’s manufacturing
facilities in Japan•Achieve a reduction of more than 10% by FY2010 in
the volume of water used per unit of manufacturing
value from the level of achievement in FY2005 at the
Komatsu Group’s manufacturing facilities in Japan
4. Environmental risk management•Implement voluntary reductions on the release ofchemical substances
Substitute reductions in the volume of VOCs released,
which accounts for the majority of the volume released•Implement voluntary reductions on VOCs
Achieve a reduction of more than 20% and 50% by
FY2008 and FY2010, respectively, in the volume of
VOCs released per unit of manufacturing value fromthe level of achievement in FY2005•Implement permanent measures required to renovate
underground tanks in operation for 20 or more years
by the end of FY2001 at the Komatsu Group
manufacturing facilities in Japan

P. 18

Pursuing Environmental Management

Objectives for FY2007

1. Environmental management system*: Encourage
Komatsu Group manufacturing facilities both in andoutside of Japan to acquire ISO14001 certification by
the end of FY2005
2. Mitigation of climate change (energy conservation)•Make a 20% or more improvement by FY2010(average results from FY2008 to FY2012) in thevolume of CO2 emissions per unit of manufacturing
value from the level of achievement in FY2000 at the
Komatsu Group manufacturing facilities in Japan
3. Effective utilization of resources•Maintain or make further progress on attainment ofzero emissions at the Komatsu Group manufacturing
facilities in Japan

Environmental Activities

Medium- andlong-term objectives
Acquire integrated
certification for theentire Komatsu
company

Implementation policies*Komatsu is responsible for setting overall direction for Komatsu Group companies regarding environmental management. Each subsidiary is responsible for the implementationof related policies and measures.

Procurement and Logistics
Implementation policies
1. Green procurement•Promote improvements at suppliers throughthe establishment of environmental
management systems and by specifying
matters that require environmental
consideration
2. Environmental conservation in logistics•Develop and commercialize integrated
Information Clearing House (ICH) system inheavy material logistics in Japan beyond
individual corporate frameworks•Achieve “zero packaging”: Conserve
resources and reduce waste through thereuse of packaging materials

Objectives for FY2007

Results for FY2007

Medium- and long-term objectives Further
information

Conduct support andawareness-raising activities forthe establishment ofenvironmental management
systems at suppliers•Established Midori-kai Environment
Committee for business associates(64 companies participating) to support
activities to introduce environmental
management systems

Have all suppliers acquire
environmental management
system certification by
FY2008

P. 11

Fully implement integrated
transport reform in Japan•Reduced CO2 emissions per unit of net sales
by 6.7% compared with the level ofachievement in FY2006•Shipped 75% of products manufactured at
the Ibaraki Plant through the port ofHitachinaka•Shipped 75% of products manufactured at
the Kanazawa Plant through the port ofKanazawa•Finalized decision to build Kanazawa Plant
No. 2

Include as priority activities
and promote theimprovement of the loading
ratio during transport and theincrease in size of transport
containers, both of which are
effective in reducing CO2
emissionsP. 15

Assess effectivenessP. 15

Improve logistics throughconstructing new plants at
portside
Make general-purpose
containers returnable•Reduced CO2 emissions per unit of net sales Continue to revise packaging
generated during the production and disposal
processes for packaging materials by 10%
compared with the previous fiscal year

P. 18

Results for FY2007

Further
information
P. 11

Sales and Services
Implementation policy

Objective for FY2007

1. Carry out occupational health and safety andenvironmental conservation activities at sales
agencies and rental companies based on relevant
guidelines

Enhance awareness of•Visited 11 sales agencies and rental
environmental issues
companies to give instruction at sessions
through sessions to explain •Conducted education and training by means
contents of guidelinesof Safety and Environment Newsletter

Medium- and long-term objective
Support activities by all sales
agencies and rental companies
through the Group’s
environmental guidelines

9Environmental Management Structure
Komatsu has established an environmental management structure grounded in ISO14001, a widely accepted international standard
for environmental management, for its Group companies, including manufacturing facilities outside Japan. To fulfill one aspect of its
corporate social responsibility, Komatsu conducts thorough environmental education and training for its employees.

Overview of Environmental Management Structure
Recognizing that environmental issues are an integral part of its corporate mandate, the Komatsu Group established the Earth Environment
Committee in 1991 and created its environmental management structure. Following this environmental initiative, the Group formulated theKomatsu Earth Environment Charter in 1992 and launched its environmental conservation activities. Komatsu’s Strategy Review Committee
is responsible for matters of corporate management while the Earth
Organizational Chart of the Environmental Management Structure

Environment Committee is in charge of examining individual policies.
After the Earth Environment Committee formulates environmental
policies, executive officers of the respective divisions and subsidiarycompanies are responsible for further developing and applying thesepolicies to meet their objectives in accordance with the functions of
their own division or company. The officer in charge of environmental
conservation activities at each business unit implements these policies.
For environmental issues of particular significance, subcommittees ofexperts or working groups established in each division study them anddevelop solutions in concert with other divisions.
Research and development divisions

President and CEO

Environmental Activities

Manufacturing divisions

Corporate Level Control(Corporate Planning Division,
Environmental Affairs Department)

Sales and services divisions
Business units

Strategy Review Committee

Affiliated companies

The highest executive body to study
and review basic policies, plans, andstrategies involved in top-priority corporate affairs. This committee consistsof the standing executive directors.

Manufacturing facilities outside Japan: Person in
charge ofenvironmental
management

Research
Earth Environment Committee

Pursuing Environmental Management

The Earth Environment Committee
has ultimate authority for approving
Komatsu’s environmental conservation measures. Its meetings are held
biannually. Its mission includes formulating specific environmental actionplans based on the Guidelines for
Corporate Activity of Komatsu’s EarthEnvironment Charter and determining
Komatsu Group’s overall direction inenvironmental conservation. Chairedby an executive director in charge ofenvironmental management, it consistsof executive officers responsible forindividual divisions.

Global Safety andEnvironmental Affairs Meeting
Chaired by an executive in charge ofsafety and environmental issues, thismeeting consists of officers responsible for environmental management
in Komatsu manufacturing facilities
both in and outside Japan. Meeting
every two years as a rule, it provides
a platform to implement measuresformulated by the Earth Environment
Committee and to exchange information related to environmental conservation worldwide.

Environmental Committee

Environment Management Groups

Development
Development Meeting

Environment Technology Working Groups

Manufacturing
Manufacturing Technology Meeting

Environment Management Personnel Liaison Council
Environmental and Energy Saving Working Groups

Logistics Meeting

Logistics Manager Liaison Council

Manufacturing Facility Environment
Management Committee

Environment Promotion Team

Procurement
Procurement Meeting

Procurement Control Manager Meeting

Sales and service
Komatsu Japanese Dealer Meeting

Liaison Council (Service division in Japan)

Affiliated Companies’ Environmental
Management Conference

Liaison Council (Rental division in Japan)

Environmental Management Conference
for Manufacturing Facilities outside Japan

10

Acquiring ISO14001 Integrated Certification for
the Komatsu Group in JapanThe Group will now pursue integrated certification covering all its
affiliates in Japan.

Komatsu has been engaged in a Group-wide initiative to acquire
ISO14001 certification, an international standard for environmental management systems, with a view to enhancing management quality throughstrengthening systematic steps towards environmental conservation.
Manufacturing facilities both inside and outside Japan have until
recently been certified individually, beginning with the Oyama Plant in1997. In FY2005, Komatsu Ltd.’s (the parent company’s) four plants(the Awazu, Osaka, Mooka, and Oyama Plants) acquired integrated
certification managed by the General Manager of manufacturing division. This represented the first step towards integrated certification
for the entire Group. As the second step, in FY2007 Komatsu added
its major affiliates in Japan and non-manufacturing facilities that had
not previously been certified—notably the Head Office, Research
Division, and Techno Center—to the above four plants, attaining integrated certification for the Group in Japan, managed by the executive
officer supervising environmental affairs.

Environmental Education and Training
The Komatsu Group’s fundamental education system distributes the
responsibility for education such that the parent company develops
educational materials and provides educational services on commonly relevant academic issues for use by Komatsu Group companies, whereas instruction regarding more hands-on matters, including
unique features and points particular to individual business units, areconducted by relevant divisions in each business unit.
In FY2007, Komatsu administered the curriculum for environmental education and training in the same manner as in FY2006. In
preparation for extending ISO14001 integrated certification across all
Group companies in Japan and the entire Group, Komatsu increased
the number of internal environmental auditors and provided refresher
courses for them. To enhance its environmental risk management
capabilities systematically, the company encourages employees toobtain a suitable environment-related certificate.

Holding the Third European Health,
Safety, and Environment Meeting in Italy

In the sales and after-sales service fields as well, Komatsu has been
supporting its sales agencies and rental companies focused onsafety and environmental activities.
nDistributing the Komatsu Group’s Environmental Guidelines
In April 2005, Komatsu introduced environmental guidelines in Japanon a national scale by distributing the Environmental Guidelines: A
Manual for Komatsu Sales Agencies and Rental Companies to its 33
sales agencies and 25 Group rental companies at the time. These
guidelines lay out points and standards to be observed for environmental issues directly pertinent to operations at sales agencies andrental companies (waste treatment, waste oil treatment, oil management, and treatment of wastewater from washing vehicles).
Using a Plan-Do-Check-Action (PDCA) approach in implementing
the guidelines, Komatsu encourages these agencies and companies
to improve their environmental activities. Aiming to steadily expand
PDCA activities into all sales agencies and rental companies, representatives of Komatsu once again visited agencies and companies
that had implemented the guidelines, holding sessions to explain
their contents at 11 companies in FY2007. Komatsu has repeatedly
cooperated with sales agencies and rental companies in checking
the environmental aspects of their sites, conditions, and equipment,
giving on-site guidance and proposing remedial actions when necessary. In FY2007, a total of 204 sites received this assistance.
Komatsu provides support for these agencies and companies
to improve in the areas of safety and the environment by organizing safety promotion activities when industrial accidents occur andby distributing a Safety and Environment Newsletter. As a result,an awareness of the environment has thoroughly permeated theseworkplaces and various improvements have been seen.

Pursuing Environmental Management

The Third European Health, Safety, and Environment Meeting

Supporting Environmental Activities at
Sales Agencies and Rental Companies

Environmental Activities

Following upon the Second European Health, Safety, andEnvironment (HS&E) Meeting hosted by Komatsu Forest AB in
FY2006, Komatsu Utility Europe S.p.A. held the Third HS&E Meetingon October 1 and 2, 2007. A total of 12 representatives from six
European subsidiaries and the Komatsu Ltd. Head Office participated in the meeting.
Komatsu Utility Europe provided an overview of its plant operations and held a plant tour. It then explained its management structure and recent activities in the fields of health and safety and environmental conservation. This was followed by an exchange of views
among all the participants. The General Manager of the Safety and
Health Administration Department at the Head Office participated forthe first time, with the meeting taking up safety issues in addition toenvironmental concerns.
To intensify Group-wide information exchanges, the KomatsuGroup is planning to convene the Global Safety and Environmental
Affairs Meeting in Tokyo in September 2008, with personnel from
Asia, the Americas, and other regions also participating.

they visited the Osaka Plant to observe environmental conservation
activities. Tours and meetings to exchange opinions will be held at
Chinese subsidiaries, focusing on areas to be improved in keepingwith the guidelines presented.

Educating in Japan Environmental Affairs
Representatives at Chinese Subsidiaries
Seventeen personnel in charge of environmental affairs from nine
Chinese subsidiaries were invited to Japan. They received educationand training in environmental management for seven days beginning
March 3, 2008.
At the Oyama Plant, Komatsu clarified environmental conservation guidelines to be upheld across the Group. These guidelines
were drawn up based on reporting from both Komatsu Ltd. andChinese subsidiaries about recent environmental activities as wellas the results of surveys conducted at its subsidiaries in 2007. Afterexchanging views on this topic, participants toured the facilities of the
Oyama Plant and nearby related waste recycling businesses. Next

Giving guidance on
separation chamber
maintenanceSupporting Suppliers to Introduce
Environmental Management Systems
To reinforce environmental management at suppliers, Komatsu has
been urging its major business associates to acquire certification in
an environmental management system (EMS). In FY2008, Komatsu
will continue to support the introduction of EMSs at all major business associates in Japan, aiming at having them acquire ISO14001
or Eco-stage (a simpler EMS certification for small companies).

Education and training for personnel in charge of environmental affairs(touring a wastewater processing facility at the Oyama Plant)11

Mitigating Climate Change at Komatsu
Komatsu works to reduce CO2 emissions generated through its business activities.
The company also delivers fuel-efficient products that help customers promote their environmental activities.

Mitigating Climate Change through Products and Services
Hybrid Electric Forklift Trucks

Environmental Activities

The world’s first hybrid electric forklift truck features two electric
power systems, namely conventional batteries and capacitors. Thesesystems can reduce power consumption by up to 20% compared to
Komatsu’s standard electric-powered forklift by quickly storing andreusing regenerative energy derived from deceleration and F/R shifting. Its inverter-type high-speed battery charger and sealed battery
have eliminated the shortcomings found in standard electric-powered
vehicles (for example, decreasing power as energy is consumed,
short operating times between charges, and cumbersome maintenance requirements), achieving significant energy conservation andsuperior performance capacity and functionality.

This forklift truck demonstrates outstanding durability and reliability even in the most challenging operating environments. Its compact
design makes it the same size as a standard electric-powered vehicle
for its load capacity.
nBeing Recognized at the FY2007 (28th ) Awards for EnergyConserving Machinery
Komatsu’s hybrid electric forklift truck received The Minister of
Economy, Trade and Industry Award, the highest distinction in the
FY2007 (28th) Awards for Energy-Conserving Machinery sponsoredby The Japan Machinery Federation.

Awards ceremony of the
FY2007 (28th ) Awards
for Energy-Conserving
Machinery

Mitigating Climate Change

PC2000 Super-large Hydraulic Excavator

Hybrid electric forklift truck(1.5-ton model [above],
2.5-ton model [right])

Energy Conservation Functions of the Hybrid ElectricForklift Truck
1.5-ton gasoline-poweredmodel

1.5-ton standard electricpowered model

FB15HB-12

Achieved a20%
reduction in energy
usage compared
to standard electricpowered models

Total CO2 emissions
over five years

32,300 kg-CO2

Total CO2 emissions
over five years

10,400 kg-CO2

Total CO2 emissions
over five years

8,300 kg-CO2

Reusing regenerativeelectric energy efficiently
via capacitors

Reuse*Comparison using 1.5-ton forklift trucks
The CO2 coefficient has been calculated in accordance with guidelines devised
jointly by the Ministry of Economy, Trade and Industry and the Ministry of Land,
Infrastructure and Transport of Japan (April 2006), for operating times of 4hours/day, 240 days/year, for 5 years. Komatsu test data has been used for fuelconsumption amounts and vehicle load conditions. CO2 emission volumes mayvary according to customers’ operating conditions.

12nImproving Fuel Efficiency by 10%
The PC2000 reduces fuel consumption by 10%*1 compared with theprevious model. This hydraulic excavator features a clean, powerful,and highly fuel-efficient new-model engine along with an on-demand
power control system to provide power at the most suitable level foreach operation. These features combine to achieve dramatic reductions in fuel consumption through a system-wide control appropriate
for the load it is excavating, with the fan rotational speed responding
to operating oil and water temperatures as well as pump and engine
output changing as the workload demands. Owing to its new highpower Komatsu-manufactured engine, the PC2000 has cleared U.S.
emission standards*2.
nReducing Time for Inspections, Maintenance, andOverhauls
The PC2000 requires less time and fewer worker-hours for inspections, maintenance, and overhauls because of its simplified systems
and the clustering of power units in a single location. Furthermore,
lowering the operating temperature of its hydraulic system lengthens
time between overhauls and reduces maintenance costs.

PC2000 super-large hydraulic excavatornDelivering Safe and Comfortable Work Areas
The engine, cooling fan, hydraulic pumps, and other noise-producing
elements are clustered in a single location, insulated acoustically withsound-absorbing blades. This arrangement contributes to low-noise
operations that satisfy EU noise standards, creating a safe and comfortable work area.
*1 Compared to the previous model operating in E0 mode. Operating conditions
during use may cause this value to vary.
*2 Only the U.S. Environmental Protection Agency (EPA) has stipulated emission
standards for the 560kW-and-above engine class mounted on this vehicle.

Reducing CO2 Emissions for Komatsu
Construction Equipment in Operation
A large proportion of the CO2 emitted over the lifecycle of construction
equipment is generated during the operating stage. To reduce CO2
emissions during operations, Komatsu increases machine efficiency
and develops new products, such as the PC200-8 hybrid excavator.
CO2 Emissions over the Lifecycle of Construction
Equipment
Effect on environmental impact
Manufacturing processes

D31/D37/D39-22 Small Bulldozer

0

Disposal
0.4

91.5

20

40

60

80

100 (%)

Joining in the “Go for it! Let’s Reduce CO2Emissions by 1 kg per Day per Person” Campaign
in JapanSince October 2007 Komatsu has called on all employees in Japanto join in the national campaign to reduce their CO2 emissions by
1 kg per person per day. As of May 2008, 1,549 employees had
registered for the campaign. This amounts to annual emission
reductions of 540 t-CO2, equivalent to 27% of the emissions generated by the Head Office. Komatsu is aiming to have 3,000 employees registered for the campaign by the end of FY2008.

Mitigating Climate Change*3 Electronically controlled HSTs are featured on Komatsu wheel loaders as well.

8.1

Operation

Environmental Activities

Equipped with a new-model engine featuring “ecot3,” the state-ofthe-art diesel engine technology, the D39PX-22 meets the latest
emission standards for Japan, the U.S., and Europe. The electronically controlled Hydro-Static Transmission (HST)*3 makes it possible
to select a vehicle speed smoothly with the up/down switch. The user
enjoys maximum engine power no matter what vehicle speed setting
is in use. Komatsu positioned the radiator at the back to produce aunique “super slant nose” design, slimming down the front engine
hood to create optimal visibility in front of the vehicle. The D39PX-22
is also equipped with a swing-type cooling fan (a flip-up hydraulicallydriven fan). Its radiator core can be checked and cleaned with ease.
A cab damper mount suspends the cab to significantly reduce
vibrations from regular running and shocks from sudden drops, minimizing operator fatigue.

D31PX-22 small bulldozer

TopicsOffsetting CO2 Emissions through Tree
Planting at the Field Testing Department

Educational Tour Targeting Climate
Change Mitigation

Komatsu has been restoring greenery to the site of its Field Testing
Department, retaining wooded areas and afforested land to thegreatest extent possible, returning greenery to slopes, and planting trees on vacant areas for development. This has increased
on-site CO 2 absorption. In FY2007, the site’s CO 2 absorption
volume reached 1,686 t-CO2, surpassing its emission volume of
1,683 t-CO2. The Field Testing Department also distributes cherry
tree saplings to the local community.

From November 2006 to September 2007, 12 Komatsu Groupbusiness units across Japan hosted a lecture on the theme ofclimate change and showed the movie An Inconvenient Truth, withsome 800 employees participating.
The Komatsu Group wishes to have every employee address
the extremely important environmental issue of climate change not
only at the workplace but also in their daily lives.

Trees lining the approach

A lecture on climate change mitigation

Parking area (preserved forest anddump trucks)

13

Small AC Servo Press

Industrial Machinery

Environmental Activities

Komatsu has developed small 200- to 300-ton AC servo presses andlarge 1,600-ton servo trial presses. These presses have succeededin conserving energy and reducing resource use tremendously to adegree never achieved by conventional mechanical presses.
nDeveloping the Small 200- to 300-ton H2W AC Servo Press
SeriesKomatsu has developed the H2W servo
press series, small presses replacing theconventional clutch brake with an AC
servo drive that operates independently
on the left and right sides. The AC servo
drives make these presses free-motion,
leading to superior features compared toconventional mechanical presses.
T R educed resource use: Machine size
reduced from 1,440 kg to 1,295 kg

SIT

Servo amplifier

Servo amplifier
Eccentric
shaft encoder

Eccentric
shaft encoder

Servo
motor

Servo
motor

Decelerator

Decelerator

Linear sensor

Linear sensor

H2W200 small servo press

Provisional Calculations of CO2 Emissions over the Life Cycleof the Small AC Servo Press (Per unit of manufacturing)

Mitigating Climate Change

Effect on environmental impact
Material production processes
Machine manufacturing processes
Operation
Disposal

85.8
Mechanicalpresses

35.0

AC servo press(overall effects)

45.5
0

20

40

60

80

100 (%)T H igh formability: Enhanced formability of processing-resistantmaterials such as high-tensile steel
T High productivity: 40% increase in productivity (compared to theprevious model)
T High precision: Bottom dead point accuracy to ±20μm
nDeveloping a Large 1,600-ton AC Servo Trial Press
By replacing the clutch brake and die cushion used in a conventional
mechanical press with an AC servo drive, Komatsu has developed alarge AC servo trial press for die assemblies for automotive applications. Equipped with an AC servo drive, this trial press recreates theoperations of multiple press types employed at automotive manufacturers using die assemblies all on a single press.

Reducing the Use of Substances of Environmental Concern andComplying with the EU REACH Regulation
Responding to the increase in environmental conservation
awareness around the world, Komatsu has been making efforts
from an early stage to reduce the use of asbestos, lead, andother substances of environmental concern. In FY1999, usingchemical substances banned under Japan’s Law Concerning
the Examination and Regulation of Manufacture of Chemical
Substances Control and other regulations in developed countries
as a base, Komatsu stipulated its own list of substances banned
from use and substances approved for use only in limited circumstances (see chart below) and began comprehensive controlof substances of environmental concern. The company has
already reduced its reliance on substances approved for limited
use in keeping with its medium-term targets for development ofenvironmental technology.
In response to the enactment of the EU regulation addressing Registration, Evaluation, Authorisation and Restriction ofChemicals (REACH) in 2007, Komatsu reviewed the list of substances approved for limited use and revised the designationof certain substances to “reduced” or “banned” as appropriate.
Through cooperation with suppliers, the company has initiateda system to strengthen control of substances of environmental
concern in products.

Substances of Environmental Concern Banned or
to Be Reduced for Use in Products

Procurement

Sending information

Management
on technical drawings CAD (technicalsystem fordrawings)
technical drawings

Supplier

Sendingsurveyforms

Substances of Environmental Concern Banned or to
Be Reduced for Use in Products
Designation

BannedTo be reduced(subject tolimited use)

14

Database forparts subjected
to surveys

97•Inputting specifications of
substances of environmental
concern contained in products•Checking for targeted substances
upon release of technicaldrawings

Supplier survey
management

Number of Name of substancesubstances•PCBs •Asbestos •Specified
chlorofluorocarbons •Trichloroethylene•Triethanolamine •Chromium (VI)*•Cadmium* •Polybrominated biphenyl(PBB)*, polybrominated diphenyl ether (PBDE)*•Polycyclic a romatic hydrocarbons*•Lead •Mercury •Arsenic •Selenium•Hydrofluorocarbons •Methanol•Hexachlorobenzene

DesignSupplier
Sendingcompletedsurveys

Database for
substances ofenvironmental
concern

E-BOM*Scheduled to be banned by January 2010

•Checking for targeted
substances upon parts
registration•Responding to survey
results•Summarizing information
on targeted substancesMitigating Climate Change in Business Operations
Reducing CO2 Emissions in Manufacturing

Reducing CO2 Emissions in Logistics

CO2 Emissions(1,000 t)
400

100

100

(%)

101.0 100.2

100

95.0
324

306

86.8

300

83.5
224

268

280

90

279
81.2

85.6

78.3
82.0

100

80
80 or less
70

71.6

70 or less
66.30(FY) 1990
2000
2003 2004 2005 2006 20072010
Manufacturing value: The total production cost excluding direct material
cost, other facilities’ components, and procured components
Total amount of CO2 emissions by the entire Komatsu Group
manufacturing facilities in Japan
Index per unit of manufacturing value by Komatsu Group
manufacturing facilities in Japan (compared to FY2000)
Index per unit of manufacturing value by Komatsu manufacturing
facilities and Komatsu Castex plants (compared to FY1990)

0

Main Manufacturing Division Initiatives
OCutting stand-by electricity of manufacturing equipment
OUsing low-pressure air blowers in drying process (reduction of pressurization)
OIntroducing inverter-controlled pumps and motors
OPainting plant roofs with heat-insulating paint
OIntroducing high-efficiency lighting
ODistributing compressors

Supply Side Initiatives Conducted Mainly throughESCO Services*
FY

Initiative

2002 •Awazu Plant: Absorption chiller cascade cooling, thermal recycling of cutting oil•Komatsu Zenoah Kawagoe Plant: Cogeneration
2003 •Oyama Plant: Displacement air-conditioning equipment, high-efficiency
lighting•Osaka Plant: Displacement air-conditioning equipment, high-efficiency
lighting•Komatsu Zenoah Koriyama Plant: Cogeneration, displacement
air-conditioning equipment
2004 •Awazu Plant: Cogeneration, displacement air-conditioning equipment
2005 •Oyama Plant: Displacement air-conditioning equipment, high-efficiency
lighting in new plant•Komatsu Castex Himi Plant: Welding improvements (cupola furnace →high-frequency furnace)
2006 •Oyama Plant: Change of the energy source to natural gas for gas turbine
cogeneration

Through operations at new plants and reforms in product shipping,
Komatsu reduced its CO2 emissions per unit of net sales generated through shipping by 6.7% in FY2007 compared with the level ofachievement in FY2006.
nLaunching Operations at the Ibaraki Plant
In January 2007, Komatsu’s Ibaraki Plant was founded adjacent to
the port of Hitachinaka in Ibaraki Prefecture, Japan. The new plantbegan its full-scale operations in FY2007, manufacturing wheeledlarge construction equipment for use in mining. The Ibaraki Plant
shipped 75% of its manufactured products (calculated by productweight) through the port of Hitachinaka.
Komatsu has also launched exclusive-use inland shipping forlarge construction equipment between this port and the exporting
ports of Tokyo and Yokohama, enabling the company to use roll-on/
roll-off shipping for 23% of the products (calculated by weight) being
shipped through Hitachinaka.
nLaunching Operations at the Kanazawa Plant andCommencing Construction of Kanazawa Plant No. 2
In January 2007, the Kanazawa Plant was completed on a site adjacent to the port of Kanazawa in Ishikawa Prefecture, Japan. The plantbegan its full-scale operations in FY2007, manufacturing large presses. Seventy-five percent of products manufactured at the Kanazawa
Plant (calculated by product weight) were shipped through the portof Kanazawa, reducing CO2 emissions by 80 tons (a 30% decrease)
compared to traditional shipping from the Komatsu Plant.
Komatsu has decided to build Kanazawa Plant No. 2 adjacentto the port of Kanazawa to reduce both overland shipping costs
and CO2 emissions still further. Construction has already begun,
with a goal of launching manufacturing operations in August 2009.
Kanazawa Plant No. 2 will manufacture the PC4000 super-large
hydraulic excavators, with all manufactured products to be shipped
through the port of Kanazawa.

Ibaraki Plant adjacent to the port ofHitachinaka in Japan

Mitigating Climate Change

227

200

Environmental Activities

To mitigate climate change, Komatsu has adopted as an indicator CO2 emissions per unit of manufacturing value with regard toelectricity, fuel gas, fuel oil, and any other type of energy used in its
manufacturing operations. From 2007, the company has establishedeven more stringent medium- and long-term objectives, aiming toachieving a 20% or more reduction in CO2 emissions by FY2010
compared to the FY2000 level. In FY2007, Komatsu implemented
improvements throughout the company, guided primarily by the All
Komatsu Energy Saving Working Group. As a result, CO2 emissions
per unit of manufacturing value have decreased by 21.7% comparedto the FY2000 level. Once again Komatsu achieved the medium- tolong-term objectives ahead of schedule.

nMeans for Further Improvement
As for energy conservation on the demand side, the manufacturing
divisions lead company-wide activities to reduce energy consumption and refine drying processes. The Energy Saving Working Grouphas implemented these initiatives across all business units. As forconservation on the supply side, since FY2001 the utility administrative divisions have led a shift to energy conservation equipment
through Energy Service Company (ESCO) services, bringing significant effects. Moreover, Komatsu has shifted to low-carbon energy
generation by changing the fuel for large-scale cogeneration facilities
to natural gas, shifting from cupola furnaces to electrical furnaces,and eliminating monogeneration, in which thermal energy is notrecovered.

Kanazawa Plant adjacent to theport of Kanazawa in Japan*Energy Service Companies (ESCOs) provide comprehensive services with regard toenergy conservation in factories or buildings, conserving energy while maintaining
the same performance as before. They guarantee that energy conservation effects
will result from the measures they recommend.

15

Komatsu’s Initiatives to Bring about a Sound Material-cycle Society
Promoting on-site recycling using mobile crushers/recyclers, recovering and remanufacturing used components(parts), and effectively utilizing waste derived from manufacturing operations help Komatsu contribute to thecreation of a sound material-cycle society.

Providing Solutions for Customers
On-site Recycling

Environmental Activities

Komatsu develops environment-friendly products. To address environmental concerns from society, the company applies the mostappropriate technologies to offer high-quality, efficient solutions.
nPromoting On-site Recycling through Mobile Crushers/
Recyclers
Komatsu’s mobile crushers/recyclers process residuals generated atconstruction sites as a type of on-site recycling. Residuals are effectively utilized without leakage from the site and the introduction ofvirgin materials is unnecessary, reducing impact to the environment.
In response to illegal dumping that has become a social problem inrecent years, Komatsu has proposed the “e2 separation process”
based on the principles of recycling on-site. Soil intermixed with
waste is roughly separated in advance by using mobile screens. The
soil is then reused as resources. Since this takes place entirely within
the construction site, the costs of waste disposal and waste transport
are dramatically reduced, solving environmental and cost challenges
simultaneously.
In FY2007, Komatsu added rough crushing specifications to theBR300S-2 dual-axle shearer and also to the BR580JG-1, whose
other features include an engine satisfying emissions standards
and the fully automatic crusher that had been well received on the
BR380JG. These specifications result in large-scale work capacity
and resistance to wear and abrasion from processing the earth.

Tree felling
Recycling
Tree planting
on slopes
Mulching
materials

Felled trees
Boulders

Unusable soil

Banking Paving
Roadbed materials
Grading materials

Creating a Sound Material-cycle Society

BR580JG-1 fully automatic crusher

The e2 Separation Process

BM883F mobile
screenBR683 mobile
screenUndersizedmaterials

0–10

10–20

Over 20High quality
soil

Surplus soil

Controlled
landfill site

BR480RG mobile
impact crusher

Soil intermixed
with waste

Hand
sorting

Materials ofproper size

Nonflammable

Flammable
RC40

Oversized
materials

Controlled
landfill site

Controlled
landfill site
BR380JG mobile oversizedmaterials crusher

RC40 manufacturing

16Effective Utilization of Resources in the Provision of Services
T increasing the range of items covered under its Reman operations
T f urther improving the usage rate of remanufactured parts
through the development of parts made to suitable sizes or
those designed exclusively for future remanufacturing use, andT developing recycling-related technologies.
The Group is carefully considering the future of the Reman businessin regions not currently covered by its existing Reman Centers to further advance recycling and reuse.

Reuse and Recycling Activities
nPromoting the Reman BusinessIn its “Reman” business, the Komatsu Group remakes used engines,
transmissions, and other construction and mining equipment components into “remanned” components (parts) having the same quality
as newly manufactured ones and provides them back to the market.
The Group is promoting the Reman business at eight Reman Centersaround the world.
“Reman,” an abbreviation of “remanufacturing,” offers customers
the following benefits.
T Quality and performance guaranteed to be the same as those of
new components
T Lower cost for “remanned” components than new ones
T R educed construction equipment idle time through proper
inventory levels of “remanned” components
T Resource conservation and waste reduction through the reuse
and recycling of components
A new Reman company in Jakarta, Indonesia began operationsin 2007 to provide “remanned” components globally. This promotes
reuse and recycling activities in new regions as well as in regions covered by existing centers.
nProviding Reman-related Information
The Komatsu Group has set up “Reman-Net,” networking Komatsu
Reman Centers around the world. The Group is actively using thisnetwork to develop Reman operations for reusing and recycling items
at the global level. IC tags and two-dimensional codes are employed
to manage components’ remanufacturing history and track their
quality and durability information. This important information is provided as feedback to the Group for developing components (parts)
with appropriate life spans.
nAcquiring ISO14001 Certification for Reman Centers
The eight Komatsu Reman Centers around the world have been
pursuing ISO14001 certification to further environmental conservation. Five of the centers have been certified and the remaining threecenters in the U.S., South Africa, and Indonesia are working to attainit. These centers advance environmental conservation through daily
operations and inspections for maintaining and renewing certification.
nFuture Steps
To further increase the reuse rate of used components (parts), theKomatsu Group is reducing the amount of disposed parts throughEnvironmental Activities

Launching Expanded Recycling of Used Rubber
Crawler Shoes and Rubber Pads

Creating a Sound Material-cycle Society

There has been a strong desire to recycle used rubber crawler shoes
and rubber pads, types of waste unique to construction equipment
posing various disposal complexities. Comprised of about 50% steel,these shoes and pads represent a valuable resource for material
recycling. The Komatsu Group has focused on them as a major focal
point in advancing recycling.
nInitiatives at Recycling Management Centers
Komatsu Ltd. and nine other construction equipment manufacturers have worked jointly with five rubber crawler shoe manufacturers
in Japan to establish Recycling Management Centers as the parent
organization for new recycling endeavors by the Japan Construction
Equipment Manufacturers Association. In December 2007, theRecycling Management Centers received authorization from the
Ministry of the Environment of Japan as nationwide recycling collectors*, and from early 2008 they have been formulating concrete
recycling activities.
Making full use of its sales and service network for construction
equipment, Komatsu collects used rubber crawler shoes and pads
efficiently from businesses all around Japan that are discarding these
items. Almost 100% recycling is possible, including the use of thermal recycling by means of a melting furnace that has been certified
by the Ministry of the Environment of Japan for recycling. Recycling
Management Centers each cover a smaller geographical area ofJapan and began their operations in March 2008 in the Chubu regionof central Japan. In August 2008, they are expected to expand theiractivities to a nationwide scale.
*A system of special exceptions through which it is unnecessary to get thepermission of each local public body for waste treatment, even though suchpermission is fundamental under the legal system governing waste treatment
operations in Japan. To qualify under this system, the items in question must
be waste and treatment must be conducted by the manufacturer of the items inquestion across an extended area for the purpose of ensuring waste reduction orother proper waste treatment.

Overview of Recycling System in Japan for Used Rubber Crawler Shoes and Rubber Pads
Using trucks

Sales and service agencies
Businesses
discarding
items

Using JRcontainers

Loading

Delivering

Collection points(branches,
Collecting
sales divisions)

Designatedtransaction
location

Shipping
companies

Disposal facilities
Selling

Intermediate
treatment

Steel products
Roadbed materials

Melting furnace

Reportingupon
completion

Japan Construction Equipment Manufacturers Association (Recycling Management Centers)
Scope of activities for nationwide recycling: Flow of information: Flow of items to
be recycled: Recycling coupons: Manifests

17Effective Utilization of Resources in Business Operations
Effective Utilization of Resources in Manufacturing

Environmental Activities

nWasteIn tandem with reducing the volume of waste generated during
manufacturing operations, Komatsu conducts zero emissions*activities to recycle waste materials.
In FY2005, Komatsu achieved its objective of reducing the volume of waste generated per unit of manufacturing value by 50% at
its manufacturing facilities in Japan from the level of achievement in
FY1998. Since FY2006, Komatsu has been working to achieve newly
established medium-term targets. The new targets are(1) continuing zero emissions activities and(2) achieving a 15% or more reduction by FY2010 in the volume
of waste generated per unit of manufacturing value comparedwith the FY2005 level.
In FY2007, Komatsu continued to achieve zero emissions throughstrict waste separation and utilization of waste material as valuables, boasting a recycling ratio of 99.6%. The company’s greater
production volume has caused an increase in the amount of waste
generated for three years in a row, beginning with FY2005. However,Komatsu reduced by 4.4% the volume of waste generated per unit ofmanufacturing value compared with FY2005 (a 4.3% reduction compared with the previous fiscal year), attaining its single-year targetof an average 3% reduction per year. The company will redouble its
waste separation efforts to achieve its medium-term objective.

Creating a Sound Material-cycle Society*Komatsu defines “zero emissions” as a waste material recycling ratio of 99% or
more.

Volume of Waste* Generated by Komatsu andthe Komatsu Group Manufacturing Facilities in Japan(1,000 t)

(%)
200

40

200

38.2
30

24.8

97.7

30.5

31.6

100

99.9

99.6

99.5

99.6

95.6

150

27.6

114

120

20

99.4

48.5

10
0

28.5

(FY)

1998

100
85.0
50

2003 2004 2005 2006 2007

2010

0

Coverage of data: Komatsu Ltd. and the Komatsu Group manufacturing facilities
in Japan
Disposed volume
Recycled volume
Index per unit of manufacturing value (compared to FY2005)
Recycling ratio*In keeping with changes to the definition of the volume of waste generated, figuresfrom previous fiscal years have been modified accordingly.

nConserving Water Resources
Since FY2006 Komatsu Group manufacturing facilities in Japan havetaken up a new medium-term target of achieving a 10% or more
reduction by FY2010 in the volume of water used per unit of manufacturing value compared with the FY2005 level.
Although overall water usage has risen in step with increases
in manufacturing volume, the company has reduced the volume ofwater used per unit of manufacturing value by 10.7% compared with
FY2005 by reusing water during processing and eliminating wasteful
day-to-day practices. In particular, the Osaka Plant and the Komatsu
Utility Kawagoe Plant reduced their usage volume more than 40%
per unit of manufacturing value compared with FY2005. In the years
to come Komatsu will make further attempts to reduce the volume ofwater resources used.

18

Volume of Water Resources Used by Komatsu andthe Komatsu Group Manufacturing Facilities in Japan(million
m3)
8

(%)
100
88.7
6.35

6

5.97

5.67

5.55

89.3

90.0 or less

6.06

100
75

4

50

2

25

0

(FY)

2003

2004

2005

2006

2007

2010

0

Supply waterIndustrial water
Groundwater
Index per unit of manufacturing value (compared to FY2005)

Effective Utilization of Resources in Logistics
nImprovements in Packaging
In FY2007, Komatsu expanded its returnable packaging endeavors
beyond the improvements in specialized shipping containers alreadyunderway to include general-purpose containers. This led to an 8%
increase in packaging return ratio across plants at Komatsu and aconsequent 10% decrease in CO2 emissions generated during the
production process for steel and other packaging materials per unitof net sales.
Returnable packaging has lowered packaging costs and CO2
emissions while conserving the earth’s resources. Komatsu will continue to revise its packaging in FY2008.

Environmental Risk Management
To minimize environmental risks accompanying manufacturing activities, Komatsu is committed to acting in strict compliance withthe legal requirements of national and local authorities. In addition to thoroughly implementing pollution mitigation and prevention
measures, Komatsu is reducing the volume of chemical substances that it handles and uses.

Komatsu Group companies are responsible for reporting environmental measurement results periodically and archiving them in strict
compliance with applicable laws and regulations of national and local
authorities.
In FY2007, the Komatsu Group experienced no environmental
infractions or accidents in Japan.
nPCB Waste Management
Komatsu conducts proper storage and management of PCB wastes
from transformers and other such items in accordance with Japan’s
Law Concerning Special Measures Against PCB Waste and Waste
Disposal and Public Cleansing Law. As of March 2008, the KomatsuGroup as a whole was in possession of approximately 630 drums of
PCB wastes.
In Japan, the Kitakyushu Office of the Japan Environmental Safety
Corporation (JESCO) started PCB waste treatment in December
2004. Komatsu now plans to arrange for early treatment of PCB
wastes, first from the Head Office in FY2008 and then from its
regional facilities.
nSoil Contamination Countermeasures
The Earth Environment Committee has established guidelines for theinvestigation of soil contamination in Japan. Komatsu investigatesthe condition of soil contamination at business units that are planned
to be sold, closed, or demolished and, if necessary, takes suitablemeasures under the supervision of the local authority concerned.
Komatsu conducted voluntary soil investigations at business units
currently in operation to check for contamination by organic chlorinebased chemical compounds (VOCs), which had in previous years
been used in cleaning solvents and otherwise.
Since 2005, in Japan Komatsu has been surveying VOC contamination of soil at the Group manufacturing facilities and also
its Research Division and other non-manufacturing facilities. As of
FY2007 all investigations have been concluded except at one affiliate.
In FY2007 surveys were completed at the Komatsu and Osaka
Plants and the Komatsu Utility Tochigi Plant. Thus far soil contamination has been detected at a total of six business units. In each case,the company submitted a report to local authorities and launched
remedial measures to clean up the sites in as short a timeframe as
possible. Komatsu will pursue reliable cleanup measures and maintain monitoring of site boundaries.

The enforcement of the Pollutant Release and Transfer Register(PRTR) Law*1 of Japan obligates industrial plants to, on an annual
basis, keep track of the amounts of Class I specific chemical
substances (for substances handled in quantities of 1 ton ormore) released and transferred and file notice with the authorities.
Komatsu supervises the management of all relevant substances,even when quantities handled are less than 1 ton.
nReducing PRTR-related Substances
Among chemical substances subject to the PRTR, toluene, xylene,
and ethylbenzene are the three substances making up almost 99% of
the volume emitted by Komatsu and Komatsu Group manufacturing
facilities in Japan. A breakdown of those emissions shows that mostare released into the air. For some of these substances, Komatsu has
been able to reduce its emissions volume by changing the constituent
parts to those with less impact on human health. However, due to anincrease in the usage volume of paints as a result of substantially greater production volume, emissions volume has continued to increase.
The Komatsu Group will continue to execute initiatives to reduce
the amount of environmental impact through improvements towards
the proper control of such substances, mainly through the reductionof VOC*2 releases.
n Komatsu Guidelines for the Control of Chemical Substances
To develop products that take the environment into account andreduce environmental risk, Komatsu is implementing comprehensive controls in keeping with the Komatsu Guidelines for the Control
of Chemical Substances. Based on established criteria for risk
assessment, Komatsu has classified chemical substances subject
to supervision into the three ranked categories of prohibited substances (1,399 types), substances to be reduced (2,824 types), andsubstances to be controlled properly (1,280 types). The company
is controlling the amounts of release and transfer of each individual
chemical substance.
At the end of FY2003, Komatsu introduced a Chemical SubstanceManagement System across the company including its affiliatedcompanies to facilitate the execution of these guidelines. By incorporating this system into its EMS, in FY2004 Komatsu improved thedegree to which it can prevent environmental pollution by assessing
and addressing environmental impacts in advance. In the context of
future increases in manufacturing volume, how to achieve reductionsin the volume of chemical substances handled and released will certainly be a critical issue.
nReducing VOC Releases
VOCs found in paints account for over 90% of the volume of chemical
substances released by Komatsu. In FY2007 the company achieved
reductions in VOC releases per unit of manufacturing value comparedwith FY2006. This was realized through partial changes to the painting system at the Awazu Plant from a base coat/top coat dual-coat
method to a method using paints that deliver the same performancethrough a single application. Improvements in coating efficiency ateach manufacturing facility also contributed to the overall reduction.
However, VOC releases have continued to rise due to the significant increase in manufacturing volume. To control this rise,
Komatsu reformulated the target and revised the plan based on
concrete strategies coordinated with its action plan. The new target
is to achieve reductions in VOC releases per unit of manufacturing
value of over 20% and 50% by FY2008 and FY2010, respectively,
compared with the FY2005 level. In future years the company willbe thoroughly implementing revisions such as (1) converting tohigh-solid type paints (to reduce the amount of VOCs contained
therein), (2) increasing coating efficiency, (3) converting to waterbased paints, and (4) converting to powder coatings.

Status of Soil Cleanup in Japan
Business unit

Date survey
concluded

Komatsu Ltd.
Awazu Plant

January 2007 Excavation and removal,soil vapor extraction,
groundwater withdrawal
and aeration,bioremediation
September
Excavation and removal,
2007
groundwater withdrawal
and aeration,bioremediation
November
Soil vapor extraction, air2007
sparging, groundwater
withdrawal and aeration,bioremediation
November
Excavation and removal,
2005
bioremediation
February
Groundwater withdrawal
2006
and aeration

In process

July 2007

In preparation

Komatsu Ltd.
Komatsu Plant

Komatsu Ltd.
Osaka Plant

Komatsu Ltd.
Oyama Plant
Construction
Equipment Electronics
Division in Hiratsuka
Komatsu Utility
Tochigi Plant

Cleanup method

Excavation and removal,bioremediation

CleanupstatusIn process

In process

In process
In process

Surveys revealed no contamination for the following business units in Japan: KomatsuLtd. Mooka and Koriyama Plants, Research Division in Hiratsuka, Techno Center in Izu,
Field Testing Department in Matsuda and Nozu, Komatsu Utility Kawagoe Plant, andNo.1 Plant of Komatsu Castex.

Minimizing Environmental Risks

Chemical Substance Control

Environmental Activities

Compliance and Pollution Mitigation and Prevention*1 L aw Concerning Reporting, etc. of Releases to the Environment of SpecificChemical Substances and Promoting Improvements in Their Management*2 Volatile Organic Compounds: primarily paint solvents

19

Special
Story

Komatsu’s Social Contribution Activities in Africa

The Four th Tok yo International Conference on African
Development was held in Yokohama in May 2008, and July’s
G8 Hokkaido Toyako Summit also took up Development andAfrica as one of its main themes. With Africa now in the spotlight around the world, an important issue is what type of assistance is fitting for Japan. Komatsu considers actions to enrich
the lives of people in local communities to be supportive in thetruest sense. This column introduces two types of Komatsu’s
activities for fulfilling its corporate social responsibility as concrete examples of this assistance.

AfricaRepublic of Angola

Republic of South Africa

Case

1

Supporting Education in the Republic ofSouth Africa
The Komatsu DenRon Community Development Centre

In the suburbs of Plettenberg in southern South Africa stands
a small building known as the Komatsu DenRon Community
Development Centre. Here some 30 young people are acquiring
the basic educational skills they need to find employment.
Activities for Society

Educational Gaps Stemming from Historical Racial
Discrimination and Poverty
Even among African countries with rapidly developing economies,
the Republic of South Africa stands out for having good vocational
opportunities. Still, not all people receive basic education at the levelneeded for employment. The areas surrounding large cities such as
Johannesburg or Cape Town benefit from government-funded primary education to a certain extent, but the educational system is stillinsufficient in towns farther removed.
As you move away from the seaside of the Plettenberg resort areaon the country’s southern coast, poverty becomes widespread, witha large number of unemployed people who did not receive satisfactory primary education or who were unable to go to school during theapartheid era.
Providing Educational Support from DenRon and Komatsu
Despite large numbers of job seekers in Plettenberg, local building
materials/stone quarry company DenRon was experiencing a chronic
shortage of skilled workers and operators. DenRon realized that the
only way to solve this lack of skilled human resources was to provide
the educational opportunities to bring local unemployed people to theminimum level necessary for employment. Komatsu Southern Africa(Pty) Ltd. (KSAf) agreed with its customer DenRon’s thinking, andin July 2007 the two companies established the Komatsu DenRon
Community Development Centre. DenRon provided the premises
and equipment, while KSAf covers the costs of teachers’ salaries
and transporting students to school.
A day at the Centre begins by the school van picking up the students at various locations. Classes begin at 8:30 AM in numeracy andliteracy. Students take a course load tailored to their particular needs,
with each subject having four levels. Students completing Level 4
English enroll in computer classes twice a week.

20

The Centre’s vanbrings students totheir classes fromthree different
areas.

Creating a Springboard towards Employment throughContinuing Education
The Centre’s first graduation ceremony was held in September 2007
for ten students completing the highest level of education. Many ofthem went on to attain full-time employment as hotel employees,
salesmen, and waiters, with DenRon also hiring some of the graduates.
The Komatsu DenRon Community Development Centre is neither
large-scale nor glamorous. However, it emphasizes perseverance,
the most important attribute in human resources development andeducation. KSAf has a strong desire to maintain this project and it
intends to fund the Centre’s operating expenses every year on an
ongoing basis. The Embassy of Japan has also expressed interestin cooperating with the Centre as an endeavor consistent with theSouth African government’s policies in improving the employment
rate of persons who experienced racial discrimination.
KSAf intends to continue this assistance in a way practicable forthe company, providing support that is appropriate for a Japanesecompany and for Komatsu.

KSAf then-President Yasuyuki
Dan (currently KSAf Chairman)at left and DenRon Director
Dennis Derbyshire at right, on
the opening of the Komatsu
DenRon Community
Development Centre in July
2007

To the People of Komatsu

An excerpt of a letter from Centre graduate Maluxole Kleinbooi

While I have spent time in jail, I now have a new perspective on life after achieving Level 4 in both literacy
and numeracy.
I am now employed at a major department store. For the first time ever, I have experienced a senseof self worth. I am very thankful to both Komatsu and DenRon. Thank you so much.
The graduating class of March
2008, with Maluxole Kleinbooi at
the far right

Demonstrating Corporate Social Responsibility Targeting Human Resources Education
Komatsu Southern Africa (Pty) Ltd. President Mike Blom

We at Komatsu Southern Africa (Pty) Ltd. (KSAf) are developing CSR initiatives focused on training and developmentof human resources. Besides our activities in Plettenberg introduced here, we are also considering human resources
development projects in several regions in which we offer sales and after-sales service. One such project will bekicked off in Botswana within 2008.
While the high prevalence of HIV is a serious issue in South Africa, awareness is low particularly in rural areas with
substantial numbers of people living in poverty. KSAf is looking at how we can work with organizations to improve HIVawareness among these communities we operate in.

Case

2

Expanding Anti-personnel Landmine
Removal into Africa with a Good Partner

A demining machine for anti-personnel landmines arriving in Afghanistan

Collaborating with an NPO
Komatsu announced collaboration with non-profit organization (NPO)
Japan Mine Action Service (JMAS) in January 2008 for the removalof anti-personnel landmines. JMAS is staffed primarily by people
who have retired from the Japanese Self-Defense Forces possessing a wealth of experience and technical expertise. Since 2002
JMAS has cleared landmines and unexploded ordnance, dug wells,
and run educational programs, assertively providing technical andhuman resources support in cooperation with various governmentalorganizations around the world. Demining machine technologies at
Komatsu will be combined with the experiences and know-how of
JMAS to bring recovery to affected areas much more quickly, a valuable contribution to those regions.
Joint activities with JMAS will foster community development, firstin Cambodia and second in Angola in Africa.

Activities for Society

Komatsu’s demining machine for anti-personnel landmines was
first used in September 2007 in Afghanistan. In Asian countries,
notably Afghanistan and Cambodia, and various countries inAfrica, there are large amounts of anti-personnel landmines asa legacy of conflicts in those countries. Landmines still give riseto an unending number of victims and regional development isbeing impeded. Komatsu recently expanded its removal of antipersonnel landmines to Africa.

Komatsu Ltd.
President and CEO
Kunio Noji (left) and
JMAS President
Mitsuo Nonaka
at the January
2008 signing of anagreement for the
Cambodia reconstruction project

Supporting Communities Consistently from Landmine
Removal through to Development
First, in the Cambodia reconstruction project already underway,
quicker landmine clearing using demining machines will be followedby revitalization and reconstruction of the local community on the
resulting safe area. The project will include the development of farmland, the building of wells and schools, and the construction or repairof roads and bridges. Komatsu will lend out the demining machinesand various construction equipment free of charge, cover operating
expenditures and the costs of shipping the equipment to Cambodia,
and prepare replacement parts for the vehicles. The construction
equipment was shipped from Japan at the end of May and from July
the persons to conduct the demining received training.
Subsequent operations in Angola have been proceeding according to a plan in cooperation with the Japanese Ministry of Foreign
Affairs and Japanese trading companies. A third local survey was
carried out in January 2008 that almost finalized the area for demining. Since then, necessary procedures have been taken, including
coordination with both the Japanese and Angolan governments, sothat the demining vehicle can arrive in Angola in August and training
can start in September.
Demining begins to be meaningful once mine clearance gets underway using demining machines to build a basis for people’s livelihoods. Komatsu’s partnership with JMAS will be the foundation for
tangible and consistent achievements that will enrich the lives of thepeople in local communities.

21

Activities for Society

Kenji Kinoshita

Sustainable growth can be achieved when a company aims to improve its business performance andwhen the company enjoys trust and support from society and prospers along with it.
Komatsu has adopted the basic managerial approach that corporate value is the total sum of trust
given to it by society and all corporate stakeholders. To strengthen this trust, the company complies
with laws and regulations as a matter of course. It extends these efforts to conserving the environment
in its business operations, holding dialogues with company stakeholders, and contributing to society
by enhancing culture and education, developing the local community, promoting sports, enabling
communities to recover from disasters, and providing humanitarian assistance to disaster-impacted
areas.
Komatsu is dedicated to increasing corporate value and pursuing sustainable growth as thecompany promotes both strong global, Group-wide business operations and activities for society.

Director and Senior Executive Officer,
Chief Financial Officer
Supervising CSR and Corporate
Communications & Investor Relations

Communication with Stakeholders
Taking advantage of various opportunities for communication with stakeholders, Komatsu strengthens partnerships withthem while also incorporating their views into business operations.

Activities for Society

Communication with Shareholders
Along with striving for high managerial transparency, Komatsu provides proper and timely information through constructive approaches to investor relations (IR) around the world. On the same daythat quarterly business results are announced, the company holds
explanatory sessions in Japan for institutional investors and securities
analysts and also releases this information on its website. Corporate
representatives visit institutional investors outside Japan, primarily in
the U.S., Europe, and Asia, to explain recent business performanceand other critical information.
nShareholders’ Meetings
To furnish an opportunity to communicate with individual shareholders, Komatsu convenes shareholders’ meetings in major cities in Japan two to three times annually, with top management
explaining the company’s performance and management strategy.
Shareholders’ meetings were held in December 2007 in the cities of
Nagoya in Aichi Prefecture and Hiroshima in Hiroshima Prefecturewith some 900 and 300 shareholders attending, respectively. A
wide range of questions wasanswered, covering such topics as the business environment surrounding Komatsu
and the company’s businessperformance and social contribution activities. Since theirlaunch in 1997, these meetings
have been convened 25 times,
with over 8,000 shareholders Shareholders’ meeting convened in
Hiroshima in December 2007
participating to date.
nPlant Tour for Shareholders
Komatsu held a plant tour
for individual shareholders at
the Awazu Plant in Ishikawa
Prefecture, Japan in September
2007, drawing about 90 participants. Attendees toured wheel
loader and newly constructedtransmission sections at theplant and watched a demon- Tour for shareholders held at thestration at the testing area. Awazu Plant in September 2007

22

They could examine hydraulic excavators and other construction
equipment in greater detail.
nInformation Disclosure on the Komatsu Website
Komatsu makes sales and profit gains reports, financial statements,
annual reports, and other types of IR materials available on its website in a section titled “Investor Relations.” The website introduces
the presentation materials and a spoken explanation regarding theannouncement of consolidated business results. Komatsu alsobroadcasts footage of interviews with the President and CEO on aquarterly basis to explain the company’s business activities directlyfrom the top management in an easy-to-understand way.
I Komatsu “Investor Relations” website

http://www.komatsu.com/CompanyInfo/ir/

nExternal Evaluations of IR Activities at Komatsu
External organizations have provided Komatsu with the following
evaluations of its IR efforts. Komatsu is committed to conducting IR
endeavors to the fullest possible extent.

T Received the 12th Annual Excellent IR Companies Award from theJapan Investor Relations Association
T Recognized by Nikko Investor Relations Co., Ltd. as having the mostoutstanding website in the FY2007 Ranking Survey of Degree ofExcellence of Web Sites of All Listed Companies
T Recognized by Daiwa Investor Relations Co. Ltd. as one of 296
companies having an excellent IR website
T Ranked 51st (overall ranking) in Investor Relations Site Ranking for2008 by Gomez Consulting Co., Ltd.

Communication with the Local Community
A company cannot continue to operate without a good relationshipwith the people in the local community. Each of Komatsu’s business units tries to harmonize its interests with the local community
and make the company open to society as a responsible corporate
citizen.
Komatsu manufacturing facilities in Japan host regular opportunities to interact with representatives of residents’ associations fromthe surrounding community. For the community to gain a better
understanding of its business activities, each manufacturing facility
assertively seeks to bring representatives from the city and prefecture
to tour the plant and participate in discussions. The company also

regularly holds “open house” days at each manufacturing facility and“Kids’ Tours of Working Vehicles” at the Komatsu Techno Center inIzu, Shizuoka Prefecture (see page 28 for more detailed information).

Communication with Employees
Once every six months, the President and CEO convenes a “Meetingwith the President” at each business unit in Japan. Komatsu top
management explains the state of the company to all employees at
the unit, employing an active question and answer format. Thesemeetings are opportunities for top management and employees
to interact with each otherdirectly.
The content of these meetings held at the Head Office issimultaneously transmitted by
TV broadcast to other business units in Japan and later
published on the company
Intranet in English to share itwith Komatsu Group employ- Meeting with the President held at the
Head Office in May 2008 on the day
ees around the world.
after the announcement of term-end
business results

Partnerships with business associates and sales agents (responsible
for sales and after-sales service) form the foundation of the KomatsuGroup’s business operations. Each division at the company responsible for dealing with business partners exchanges information withthem constructively, facilitating steady and stable relationships of trust.
nStrengthening Partnerships with Business Associates
The Komatsu “Midori-kai” group, an association of the company’sbusiness associates in Japan, has 162 member companies, which
supply roughly 70% of Komatsu’s total procurement in Japan.
Komatsu holds various events to foster communication with Midorikai group members, convening general conferences, round-table dis-

North American version of the Midori-kai
group established in June 2007

nCommunication with Sales Agents
To enhance Quality and Reliability in products and services (seeP. 34) through closer communication with customers, Komatsu andits subsidiaries in countries other than Japan must strengthen their
teamwork with sales and service agents.
Every year, Komatsu convenes a distributors meeting in eachcountry and region. Communication with these agents is deepened
through the participation of Komatsu’s top management, or representatives of subsidiaries in countries other than Japan.

Activities for Society

Communication with Business Associates andSales Agentscussions for managers, and New Year’s informal business functions.
These three annual meetings are attended by representatives fromeach Midori-kai group company as well as Komatsu’s top management, providing a forum for interaction and exchanges of opinions. In
addition to the Chinese version of the Midori-kai group that is alreadyactive, European and North American versions were launched in
2007, covering more than 100 companies outside Japan in total.
Komatsu intends to establish an association of business associates in Asia (otherthan Japan and China) andstrengthen global partnerships
with business associates.

Top management visited
Sydney, Australia in April
2008. Approximately
200 managers and local
employees of Komatsu’sAustralian distributor listened
to a presentation on The
KOMATSU Way, followed bydiscussions.

Social Action Plan and Results for FY2007
Implementation policies
1. Employee affairs•Create pleasant work environments

2. Education and training•Develop human resources globally

3. Health and safety•Provide safe work environments that enable peace ofmind
4. Communication•Communicate with company stakeholders•Establish relationship of trust through timely
information disclosure

5. Social contributions•Promote social contribution activities as a member ofthe local community

Results for FY2007

Medium- and long-term
objectives

Further
information•Reinforced a program to support the fostering of the next
generation•Formulated concrete action plans to reduce employees’ total
number of actual working hours•Established a specialized center to promote hiring of persons
with disabilities

Further implement these
activities

P. 24•Fostered the skills and knowledge of non-Japanese company
executives on an ongoing basis (twice annually)•Shared The KOMATSU Way and extended TQM educationcompany-wide

Establish/deepen
understanding of
The KOMATSU Way
Foster business leaders
globally
Promote TQM education
globally

P. 24–25•Acquired OSHMS certification at Komatsu Ltd. Awazu andOsaka Plants

Further implement these
activities

P. 26•Conducted a plant tour for individual shareholders at the
Awazu Plant in Ishikawa Prefecture, Japan•Convened shareholders’ meetings in Nagoya and Hiroshima,
Japan•Provided more substantial online information for shareholders
and investors

Further implement these
activities

P. 22•Provided assistance to areas affected by large-scale natural
disasters (one instance)•Promoted culture, education, and development of the local
community continually•Promoted sports continually

Further implement these
activities

P. 27–29

23

In Cooperation with Employees
Komatsu endeavors to foster safe work environments that provide peace of mind by implementing measures to reduce workplacerisks and administering a personnel system that accurately reflects the abilities and achievements of employees, an extremely
important corporate asset.

Masakatsu Hioki
Senior Executive Officer
Supervising Compliance,
Legal Affairs, Human
Resources and Education, andSafety & Health Care

Initiatives to better manage personnel and health and safety all have people—namely, Komatsu
employees—as stakeholders. The beneficiaries are not only the employees themselves, but also
their families and other relevant parties, with the effects reaching the local community. We at the
Komatsu Group devote ourselves to the maximization of corporate value, the total sum of trust given
to us by society and all stakeholders. Employees are one of the Group’s important stakeholders and
we recognize our role in enhancing the degree of trust we receive from employees. Towards this end,
we are creating safe work environments that support peace of mind and ensuring opportunities forchallenges and creativity.
In human resources management, Komatsu is committed to treating all employees fairly. We are
steadily implementing measures, continually reminding employees that safety is essential and that
health and safety cannot be attained through quick fixes.
I am determined to fulfill my responsibilities in creating safe work environments with workplacecultures that encourage employees to strive towards higher goals.

Komatsu’s Relationship with Employees
Enhancing the Quality and Reliability of Employees
Activities for Society

For a business, it is said that people, goods, money, information, andtime are valuable assets and resources. Even if the other elements
remain constant, if “people” change, the results will be different.
Therefore, “people”—the employees of Komatsu Group companies—
are an irreplaceable asset for the Group. Komatsu recognizes the roleof the personnel system in raising the quality and reliability of thecompany’s human resources. It therefore endeavors to foster workplaces with opportunities for challenges and creativity. The company
works to maximize the sum of trust from its employees.

Basic Policy on Global Human Resources
Personnel systems reflect the history and the culture of each particular region. It is therefore important to understand correctly andrecognize those differences. At Komatsu, the fundamental principles
common to all Komatsu Group companies for personnel systems arefound in Komatsu’s Code of Worldwide Business Conduct as statedbelow. Each region uses these principles to formulate a personnel
system that has a competitive edge over other companies.
(1) The uniqueness, character, and privacy of individual employees
shall be respected.
(2) Employees shall be fairly appraised and treated. They will not
be unjustly discriminated against for reason of nationality, race,
religion, age, sex, or disability. Should any form of violation bediscovered, such as sexual harassment or any other unlawful
employment practices, it will be investigated and appropriate
actions will be taken.
(3) Komatsu will develop and implement personnel policies with aconsideration for employees’ needs. Human resource policies
and procedures shall be disclosed to the employees as fully as
is appropriate.
(4) In each region, the Komatsu Group will comply with the ordinances concerning the rights of employees.
(Taken from Chapter 5 of Komatsu’s Code of Worldwide BusinessConduct)
In addition to these principles, Komatsu also prohibits the use ofchild labor, which is a problem in certain regions around the world.

24

Komatsu has set forth Komatsu’s Five Principles for Hiring, namely:(1) T he company does not consider age or gender in hiring decisions.
(2) The company does not consider national or regional origins in
hiring decisions.
(3) The company does not consider religious affiliation or beliefs inhiring decisions.
(4) The company does not consider the existence of disabilities
that are not job performance-related in hiring decisions.
(5) The company gives significant consideration to work experienceat other companies or in other industries in hiring decisions.
The company conducts hiring practices based on these five principles and discloses them publicly on its website.

Komatsu’s InitiativesnPersonnel System that Accurately Reflects Employees’
Abilities and Achievements
Personnel systems in Japan are typically based on the assumption that employees will work for a single company for many years.
Therefore, when designing a system, a company must keep in mind
the degree to which continuous employment should be considered.
Komatsu believes that personnel systems emphasizing length of service do not necessarily reflect employees’ abilities and achievements
fairly. Instead, Komatsu has always strived to accurately evaluate theperformance of employees as individuals, incorporating employees’
achievements and abilities into its personnel system as the basis forfair evaluations.
Komatsu has been reinforcing this approach since 2003, revising
its systems for salaries, bonuses, retirement allowances, and otherpersonnel schemes accordingly.
nFormulating The KOMATSU Way and Extending TQM
Education Company-wide
As Komatsu has grown and developed, there has emerged a clear
sense of the corporate strengths that are “quintessentially Komatsu.”
The values and fundamental principles that support those strengths
and the style by which the company puts them into practice were
set down in writing in 2006 as The KOMATSU Way. Komatsu wants
all Group companies including those outside Japan to share this philosophy. The KOMATSU Way continues the reform towards greater
Quality and Reliability and highlights the importance of the individual
workplace (genba) and policy deployment (the ability of employees at
each level to implement management policies and transfer them into

In the spring of 2007, Komatsu
opened the two-year Komatsu
Training Institute in cooperation
with Komatsu College in the cityof Komatsu, Ishikawa Prefecture,
Japan. Selected from among
young Komatsu Group employees, all students live in dormitories and master knowledge
and technical capabilities inmanufacturing technology, TQM,
and the information system communication skills required fora workplace leader of the next generation. Students from Group suppliers
were also part of the class entering in April 2008.

Global Management Seminars are held twice a year for executive candidates
at subsidiaries outside Japan to train future global leaders. In 2007, 24 participants joined in discussions with Komatsu managers and external lecturers
to deepen their understanding of The KOMATSU Way and corporate culture
and history at Komatsu.

Creating Safe Work Environments that
Enable Peace of MindnCreating Safe Work Environments that Enable Peace of Mind
A company must treat its employees fairly if it is to create safe work
environments that enable peace of mind. Komatsu has alreadychanged its personnel system to the kind described earlier that
better incorporates ability and performance. To ensure fair andappropriate evaluations for each individual employee, in April 2004
the company organized refresher training for all managers regarding
how to conduct evaluations. After that, evaluation training is given to
newly appointed managers, backed by e-Learning based follow-up
education. An evaluation committee has been established jointly withthe labor union at each business unit to confirm that evaluations are

Activities for Society

practice). Komatsu has long utilized Total Quality Management (TQM)
to support this capacity and will expand TQM and The KOMATSU
Way as common human resources development methods that areshared by all employees globally.
nDeveloping Human Resources Globally
The development of global human resources is an ongoing theme forthe Komatsu Group. The KOMATSU Way states that Komatsu recognizes anew that one of its vital strengths dwells in human resources
development and employee vitality. It stipulates that based on thisrecognition, Komatsu should educate and train its employees globally to enhance their capabilities. All managers have responsibilities
appropriate for their level. Top management must foster their future
successors; managers must train the people working under them.
A basic principle in human resources development is for individual
employees to aim towards higher objectives and advance their own
careers. The personnel division establishes systems and infrastructure to help employees attain their personal goals while assistingthem in shaping their careers through education and training andscheduled job rotations. The Komatsu Group intends to further bolster investment in people who can sustain corporate growth over theyears. In particular, the Group is organizing programs on a worldwide basis to train employees at Group companies outside Japan,
enhance technical and technological capabilities, and improve performance and raise abilities through TQC education.

conducted properly. Komatsu has provided individual feedback on
evaluations to managers since 1998 and to non-managerial employees since 2001. The company has also set up a consultation officethrough which employees can express complaints and concerns.
Komatsu seeks to build a basis upon which employees can takeon greater challenges. The internal posting of personnel vacancies
was introduced in 1986, with positions now posted twice annually at
regular intervals. Additionally, Komatsu is fortifying the educational
programs that employees can participate in voluntarily both insideand outside the company.
nFurther Enhancing Diversity in the WorkplaceoGender-equal Opportunity
Currently the number of women in managerial positions is low compared with the number of men, and Komatsu recognizes this as an
issue to be addressed. Childcare leave and shorter working hours
are among the working conditions that would contribute to an environment that facilitates productive careers, particularly for women.
In 2007, Komatsu acquired the Japanese Ministry of Health, Labourand Welfare mark designating companies that assist in the growthof the next generation. Since then, the company has advanced discussions on working conditions through the appointment of sevenfemale employees to a newly launched Panel on Fostering Future
Generations. The four major recommendations from the Panel wereincorporated into labor agreement revisions for FY2007, further
improving the company’s approach in this area. These recommendations were: (1) allocating five days of special leave in casesof pregnancy by the employee, delivery by the employee’s wife,and childcare (such as to take care of a sick baby or toddler) by theemployee; (2) extending the eligibility period of shorter working hours
from March 31 after the child turns age four to the child’s completion of the third grade at elementary school; (3) providing monetary
allowances for childcare leave beyond the amount required under thelaw; and (4) providing financial support to offset the costs of nurseryschools and babysitters.
The number of female managers increased from 18 in March 2008
to 19 in April 2008, and the number of employees taking advantageof the system for childcare leave increased significantly, from 16 in
FY2006 to 25 in FY2007. Komatsu will continue to aim to bring about
workplaces that take into account the needs of working parents.
oPromoting a Balance between Work and Private Life
Reducing the total number of actual working hours is one of key
aspects in achieving balance between work obligations and private
lives for employees. Komatsu has worked in coordination with labor
unions on this issue to formulate numerical targets. The company
has brought down to an average level the workload of divisions thatare chronically shouldering intense levels of operations by hiring more
employees, both newly graduated and experienced, and investing innecessary facilities and equipment. Komatsu has each workplaceformulating concrete action plans in order to seriously address working hours management. These plans enforce appropriate numbers ofworking hours by reducing overtime and encouraging employees totake more paid annual leave.
oEmploying Persons with Disabilities
In FY2007, 1.38% of Komatsu’s employees were persons with disabilities, a figure lower than the legal standard of 1.8%. Insofar as
operations at manufacturing divisions involve dealing with heavy
objects, the hiring of persons with disabilities brings with it various
challenges. Recognizing the need to enhance its hiring rate of persons with disabilities, in April 2008 Komatsu established a Business
Creation Center within the personnel division. Designed exclusively toincrease the hiring of persons with mental disabilities, this center now
employs six such persons. Komatsu is determined to work to employ
more disabled persons in the years to come.

25

Health and Safety
Message from the Komatsu President
regarding Health and Safety
Komatsu has been disseminating the Message from the Komatsu
President regarding Health and Safety throughout the entire KomatsuGroup. President and CEO Kunio Noji delivered the message that,for the Komatsu Group to foster companies and workplaces with nosafety incidents or illness, all employees must cooperate, managing
health and safety proactively and responding to relevant issues in aprioritized and timely fashion. The major points of his address wereas follows.

Activities for Society(1) The Komatsu Group shall, first of all, strive to “ensure asafe and comfortable work environment” and “maintainand promote employees’ health.”(2) The Komatsu Group shall promote “proactive occupationalsafety and health activities” in order for all employees toachieve the above conditions by working together as oneteam.
(3) Each and every person in a senior management positionof the Komatsu Group shall acknowledge as top priority
tasks the above two matters and shall take the initiative indemonstrating the execution of daily duties accordingly.

Overview of Health and Safety System
The Komatsu Group is implementing the system depicted in the chart
below to strengthen health and safety management.
Overview of Health and Safety System
Organization

Meetings

Komatsu Head OfficeGroup companies and Komatsu divisions

T Safety and HealthAdministration
Department(CentralizedGroup-level office)THuman Resources
Department(CentralizedGroup-level office with
consultative services)

T Plant managers, division head (managers
supervising overall health and safety)
T Division head supervising general affairs
and human resources
T Section head supervising health and safety
T Managers supervising health and safety ineach division, persons assigned to thepromotion of health and safety, persons
overseeing health and safety, etc.
T Employees

TGroup Health and
Safety Committee
TGroup Safety
Supervisor Meeting
T Group Safety and
Health Conference

T Health and Safety Committee

Workplace Safety
In FY2007 Komatsu acquired Occupational Safety & HealthManagement System (OSHMS) certification at the Awazu andOsaka Plants. Through vigorous campaigns, the Komatsu Group has
encouraged employees to join in workplace small-group activities
on safety aiming at “zero accidents.” At the Group Safety and HealthConference, one group from each plant in the Komatsu Group was
invited to report on their activities to facilitate Group-wide endeavors towards “zero accidents.” In FY2008, the Group will steadily
implement OSHMS at plants already certified and promote OSHMS
certification at other Komatsu plants. The Group will redouble its
awareness-raising campaign focused on risk assessment and risk
anticipation with their origin in “zero accidents” small-group activities.
The Komatsu Group plans to spread these activities across theGroup, thereby eradicating work-related accidents throughout theGroup.

26

Incidence Rate of Work-related Accidents(Frequency rate of missed work)(Frequency
rate)
2.0

1.78

1.85

1.95

0.5
0

1.83

1.43

1.5
1.0

1.90

1.11

0.99

0.81

0.81
0.40

0.43

0.50

0.33

0.33

0.40

(FY) 2003

2004

2005

0.78

0.89
0.66
0.44

2006

2007

Komatsu (non-consolidated)
All industries
Construction and mining equipment manufacturing industry
Komatsu Group manufacturing facilities in JapannHealth and Safety Management at Sales Agencies andRental Companies
In FY2004 Komatsu sales agencies and rental companies in Japanbegan creating management systems for occupational safety andhealth. In FY2007 Komatsu supported these agencies and companies in originating follow-up activities to accelerate improvements in
the Plan-Do-Check-Action (PDCA) cycle.
Persons at Komatsu overseeing occupational health and safety
visited offices, maintenance factories, and rental shops at agencies
and companies to determine the extent to which management systems had been put into place and the state of safety management.
The Komatsu personnel confirmed whether the PDCA cycle wasbeing utilized properly at each agency or company and gave practical guidance on implementation, leading to fewer accidents at theseworkplaces in FY2007. Komatsu will be pursuing these activities still
further in FY2008.

Health ManagementnPhysical Health Management
Komatsu has long provided health checks for lifestyle-related diseases. In FY2007 the company took further steps to prevent these
diseases, launching computer-based diagnostic interviews andexpanding the range of the health checks.
Beginning in FY2008, Komatsu will work to improve the healthof employees in cooperation with its health insurance association
to deliver health-related guidance and awareness education andthrough the use of external specialized organizations.
nMental Health Management
Over the years, the Komatsu Group has introduced mental healtheducation and activities to enhance awareness and provided counseling from mental health professionals and the Employee Assistance
Program (EAP), which makes use of specialized external institutions,
helping employees and their families throughout the Group to findsolutions to their concerns. In FY2007, Komatsu administered computer-based stress diagnoses and stress awareness education topromote self-recognition. In FY2008, the Group will begin improving
workplace environments to eliminate or lessen causes of stress.

Social Contributions
As a responsible corporate citizen, Komatsu seeks to act in harmony with people to bring about an enriched society.
Formulating five basic principles, the company has undertaken social contribution programs in four distinct areas.

Basic Stance on Social Contributions
Komatsu believes that raising the Group’s corporate value over thelong term involves more than just managing its business operations.
It must also contribute harmoniously to society as a responsible
corporate citizen. The Group as a whole proactively engages withsociety on a continuing basis to fulfill one part of its corporate social
responsibilities.
Komatsu’s basic stance on social contributions (the purpose andthe five basic principles concerning social contributions) is as follows.
PurposeThe Komatsu Group and its employees will contribute tosociety as members of the local community.
Basic Principles
Contributions shall be:
T Consistent
T In the public interest
T Voluntary
T Acceptable by employees
T Not aimed at advertisement

Supporting the Flower Association of Japan
As one of its contributions to society, Komatsu has been supporting
the Flower Association of Japan since its founding in 1962. Throughthe cultivation and nurture of cherry trees, the Association is helping
engender a beautiful natural environment and an enriched society.

Komatsu opens its Head
Office (Minato-ku in Tokyo,
Japan) rooftop gardens to
the public every Friday from
2 PM to 4 PM. Visitors to theWestern-style deck gardens
and the cherry tree gardens,
maintained by the Flower
Association of Japan, canenjoy the flowers blooming ineach season.

nCreating Places Renowned for Cherry Blossom Viewing
Ever since its founding, the Flower Association of Japan has endeavored to preserve beautiful local environments, focusing on the donation of some 2.2 million cherry tree saplings and the protection andmanagement of established cherry trees. The Association launcheda model undertaking in 2002 to preserve notable venues for viewing
cherry blossoms for future generations. Since 2007 it has conductedsurveys on how the trees in these locations have fared and heldclasses for local residents on how to preserve and care for the trees.
Through these activities, the Association is empowering communities
to create notable sites for cherry blossom viewing.
nNational Cherry Tree Symposium
Every year, the Flower Association of Japan holds the National Cherry
Tree Symposium as a forum for the presentation of various researchfindings related to cherry trees. The 2008 Symposium was held on

Creating local communities
rich in flowers

Activities for Society

nMajor Areas of Activities
Komatsu’s main activities for social contributions are in the following
areas.
T Supporting the Flower Association of JapanT Promoting culture and education and local community developments
T Promoting sports
T Providing humanitarian assistance and recovery from disasters

May 9–10 in the city of Kitami, Hokkaido Prefecture in Japan, withsome 500 people participating, including cherry tree researchers
from around the country and representatives of local governmentswith notable sites for cherry blossom viewing. Topics included
reports on the preservation of notable cherry blossom viewing sites
as well as on activities to revitalize local tourism in which cherry blossom viewing was the main attraction.
nCreating Local Communities Rich in Flowers
Activities to make local communities richer in flowers are in line withthe fundamental philosophy of coexistence between the naturalenvironment and human beings. By building a sound resourcerecycling society and a living environment that is beautiful and comfortable, the Flower Association of Japan aims to raise the qualityof life for local residents. The Association serves as the secretariat
for the Competition of Japan in Bloom (sponsored by the Ministryof Agriculture, Forestry and Fisheries and the Ministry of Land,
Infrastructure and Transport)
held in October every year,with over 1,200 entries fielded annually.

nReinforcing Activities to Raise Awareness
The Flower Association of Japan dispatches speakers to workshops
sponsored by local governments to boost projects to foster notablesites for cherry blossom viewing and local communities rich in flowers. The Association has released a CD-ROM on the topic of creating
popular cherry blossom viewing sites.
oReleasing a CD-ROM
A CD-ROM was released to mark the 45th anniversary of the foundingof the Flower Association of Japan. Through this CD-ROM, non-specialists can understand and take part in the creation of noteworthysites for viewing cherry blossoms.
This CD-ROM introduces some 380 kinds of cherry trees and features simulations of growing cherry trees in typical neighborhoods.
It also has a section in which viewers can come to understand techniques used to revitalize cherry trees at famous viewing locations thatno longer have many blossoms. This CD-ROM presents an opportunity for viewers to enjoy
deepening their knowledge
about cherry trees whiledeveloping a greater interest in famous cherry blossom viewing sites nearby.

Supporting Education and Learning
nIndustry-academia Collaboration
Komatsu has entered into industry-academia collaboration agreementswith four universities in Japan and China, namely Shandong University(China, 2003), Yokohama National University (Japan, 2004), The
Graduate School of Engineering of Osaka University (Japan, 2005), andKanazawa University Graduate School of Natural Science & Technology(Japan, 2005). In addition to pursuing leading-edge technologies collaboratively, through partnerships with nearby Komatsu business units,
Komatsu assists in returning some of the benefits of these activities tothe local communities. The company also concluded agreements toconvene the Osaka University-Komatsu Joint Research Symposiumin cooperation with The Graduate School of Engineering of Osaka
University in 2006 and Lectures on Creating Industrial Machines, the27

first session of a series called Lectures in Cooperation with Society,held jointly with the School of Engineering of The University of Tokyoin 2007. In convening these fora, Komatsu aims to research technologies for an increasingly diverse society while also nurturing humanresources who will advance academic and societal developments.
nDispatching Lecturers to Universities and Engaging in Joint
Research
Komatsu dispatches lecturers upon request to instruct university
students in internal corporate technology development and corporate
management. The company is also involved in joint research to pursue state-of-the-art and future-looking technologies, after discussing
the intersection of Komatsu’s “needs” and the university’s “seeds.”nStudy Tours of Plants for Elementary and Junior HighSchool Students
In response to requests for social studies-related study tours fromlocal elementary and junior high schools in Japan, Komatsu conducts
study tours to see its plants and recycling operations and provides
opportunities to ride construction equipment.

Promoting Sports

Activities for Society

nKomatsu Women’s Judo ClubThe Komatsu Women’s Judo Club was founded in April 1991 aspart of the company’s 70th anniversary commemorative activities.
Since that time the club has won the championship of the All Japan
Company Judo Club Competition four times. Members of the club
have also demonstrated a record of excellence in individual competitions both in and outside of Japan, with one wrestler winning a gold
medal at the Athens Olympics in 2004, among other awards. The
club gladly offers non-Japanese teams opportunities to practice withits members, thereby contributing to the spread and development of
judo around the world. Ayumi Tanimoto has qualified to participate in
the under-63 kg class at the Beijing Olympics in the summer of 2008.

Providing Humanitarian Assistance andRecovery from DisastersnDeveloping Demining Machines for Anti-personnel
Landmines
Making use of technologies developed for construction equipment,
Komatsu has been developing vehicles that safely and efficiently
remove dangerous anti-personnel landmines remaining in regions ofconflict around the world. For further information, please refer to the“Special Story” on page 21.
nProviding Recovery Assistance in Areas Impacted by
Natural Disasters
Komatsu provides various types of assistance so that areas impacted
by natural disasters can recover as early as possible. The company
donates or lends construction equipment and prefabricated houses
necessary for rescue and recovery activities. Komatsu also dispatches personnel and makes monetary donations.
oActivities in FY2007
T Niigata-ken Chuetsu-oki Earthquake (Japan, July 2007)		 • Provided a temporary building for Handa nursery school in thecity of Kashiwazaki		 • Provided condolence money to employees suffering from theearthquake through a donation matching system		 • Donated 20 million yen to Niigata Prefecture

Ceremony to present a
temporary building to the
Handa nursery school in
Kashiwazaki

Contributing to Local Communities

The Komatsu Women’s Judo ClubnEstablishing a Dojo in Jining (China)
In November 2007, Komatsu donated support for the establishmentof the Jining Komatsu Judo Facility in the city of Jining, Shandong
Province, China. Judo wrestlers from Jining were also invited toJapan to participate in joint training sessions with the Komatsu
Women’s Judo Club.
In 1995, Komatsu founded Komatsu Shantui Construction
Machinery Co., Ltd., a manufacturing site, in Jining. Because Jining
is now the home of Komatsu’s three manufacturing subsidiaries,
Komatsu wanted to deepen its relationship with the city. Judo was anatural choice to promote exchanges, as a sport that Komatsu has
been supporting.

nBusiness Units Open to the Public
In addition to opening up its gymnasium, field, tennis courts, and various other recreational facilities, Komatsu hosts various events so as
to foster harmony and a spirit of coexistence with local communities.
n“Open House” Day
Komatsu convenes “open house” days at its business units on aregular basis, taking advantage of various events to enhance the local
community’s understanding of its business operations.
nKids’ Tour of Working Vehicles at the Komatsu Techno
CenterTwice a year, the Komatsu Techno Center (Izu in Shizuoka Prefecture,
Japan) runs a “Kids’ Tour of Working Vehicles,” which allows the children to come into direct contact with large construction equipment.
Through this tour Komatsu aims to foster children’s dreams and furnish an opportunity for parents and children to play together, thereby
encouraging deeper understanding towards construction equipment
and Komatsu’s corporate ideal.

Kids’ Tour of Working Vehicles
Supporting the establishment of
the Jining Komatsu Judo Facility

28

Social Contribution Activities around
the World (FY2007)
Each of the Komatsu Group manufacturing facilities outside Japan
carries out social contribution activities in keeping with the circumstances of their country and region.

Elementary School of Hope)in Yonsheng-xian, Yongbeizhen, Yunnan Province. This
two-story schoolhouse will
be completed in early 2009.

The United StatesoParticipating in a Trinity River Cleanup Event in Dallas
In September 2007, an event was organized to clean up the basin of
the Trinity River, which flows through Dallas, Texas. The Trinity Riverruns through the site of Hensley Industries, Inc., Komatsu’s wholly
owned subsidiary. Hensley provided financial and technical support
and formed a team of employee volunteers to join with other Dallas
citizen volunteers to pick up trash and other waste. Cleaning the river
basin contributes to the safety of the local residents and surrounding
wildlife. It will also markedly reduce the likelihood of people dumping
trash there, according to survey results. The campaign collected about
22,000 lbs (9,900 kg) of trash and general waste, 7,540 lbs (3,400 kg)
of empty cans and bottles, and 20,000 lbs (9,000 kg) of discarded tires
in a single day.

China

oSocial Contribution Fund for Sustaining Education Support
To invigorate social contribution activities still further, Komatsu’s 14
Chinese subsidiaries established the Komatsu China Group Social
Contributions Fund in March 2007. Using source capital contributedby the 14 subsidiaries and donated by their employees, the fundmade its first disbursement to four schools across four provinces
for a total of one million RMB (approx. 15 million Japanese yen).
The Fund for the Development of Chinese Youth served as the intermediary, with each of the schools receiving 250,000 RMB (approx.
3.75 million Japanese yen). In March 2008, a ceremony was held
when construction began on one of the four schoolhouses, theBeiguang Xiaosong Xiwang Elementary School (Komatsu Beiguang

Activities for Society

oParticipating in the “Day of Caring”
In October 2007, employees from the Chattanooga Manufacturing
Operation at Komatsu America Corp. (KAC) participated in the
Chattanooga community support event known as the “Day ofCaring.”This event has been run continually since 1986 to build homes forresidents in need. Low-cost homes for low-income families can bebuilt through the generosity of construction work done by volunteers.
Twenty-five KAC volunteers participated in the day’s events, helping
in the finishing touches including painting, attaching doorknobs, andother tasks.

IndonesiaoProviding Assistance to Flooding Victims in East JavaPT Komatsu Indonesia Tbk (KI) distributed relief to the severely flooded province in East Java in January 2008 after heavy rains caused
the Bengawan Solo River to overflow. The floods caused extensive
damage to homes, schools, and other buildings in the region. In
response, KI dispatched employee volunteers directly to the stricken
area, where they distributed food, clothing, blankets, and other relief
supplies to the refugees. KI instituted a social contributions fund in
2005. Since then, it has been expanding its social contribution activities under the three major themes of contributions to the local community, a scholarship system, and natural disaster recovery. It was
through this fund that KI gave assistance towards the flooding victims
in East Java.

South AfricaoFounding a Job Skills Training Center
Komatsu Southern Africa (Pty) Ltd. (KSAf) has established a job skills
training center in the Plettenberg Bay area on the country’s southerncoast. Called the Komatsu DenRon Community Development Centre,
this institution targets people unable to find work.
An opening ceremony for the joint project was held in July 2007.
Local building materials/stone quarry company DenRon provided
the premises and KSAf is covering the costs of the instructors, staff,
and other human resources. Once the students have mastered basic
academic skills, they complete literacy, numeracy, and computer
skills training courses at the Centre. All courses have four levels, eachwith at least 120 hours of instruction.
Thirty-eight students are currently enrolled, and 18 graduates ofthe program have found jobs in various fields. KSAf continues to be
involved in projects that contribute to the local community, giving
people technical skills and a sense of self-worth. For further information on KSAf’s social contributions, please refer to the “Special Story”
on page 20.

29

The Basic Stance of Management
As the cornerstone of its management, the Komatsu Group has been committed to enhancing Quality and Reliability throughstrengthening corporate governance and Monozukuri, or manufacturing competitiveness, in order to maximize corporate value.

The Basic Stance of Management

The KOMATSU Way

As the cornerstone of its management, the Komatsu Group is committed to enhancing Quality and Reliability in order to maximize corporate value. Komatsu considers corporate value to be the total sumof trust given to it by society and all corporate stakeholders.
This principle of Quality and Reliability not only applies to the
Komatsu Group’s products and services that bring satisfaction tocustomers, but also extends to all other aspects of the Group, including organizations, businesses, employees, and management.

The KOMATSU Way is a statement of values that the Komatsu Groupshould pass down in a lasting way in its management and indeed
wherever it operates. By holding these values in common, the Groupcan build global teamwork that transcends nationalities and generations to amass and fortify the Komatsu Group’s “workplace (genba)
capabilities”—the dynamism of all employees and the entire organization plus the ability to improve their own workplaces and worksites.
This in turn further enhances Quality and Reliability.
nDisseminating The KOMATSU Way and Developing Human
Resources
Komatsu has been disseminating The KOMATSU Way and incorporating it into human resources development in each Group company
around the world, with The KOMATSU Way Division spearheadingthese activities.
To facilitate understanding of The KOMATSU Way, the Group convenes explanatory sessions at Group companies around the globe,
with the President and CEO and other executive officers in charge
visiting locations in person. The Group has made a video and collected employees’ personal experiences with The KOMATSU Way forGroup personnel all around the world to view online. Each business
unit promotes “The KOMATSU Way dissemination month” to ensure
workers take this spirit to heart.
The KOMATSU Way is based on corporate strengths that
Komatsu Ltd., a Japanese company, has embraced for years. To foster it on an international basis, the company makes The KOMATSU
Way easy to understand and relevant to each local area mindful ofdifferences among customs and cultures.
As concrete ways to strengthen worldwide employees’ ability to
improve their performance, the Komatsu Group uses the Total Quality
Management (TQM) nourished in the Group over the years along witheducation and training to raise the level of specific technological or
specialist skills and other management techniques. The Group also
has debriefing sessions in which participants make presentations on
various lessons gained through experiences with hands-on training.

Enhancing Quality and Reliability

Managerial Structure

In particular, the Komatsu Group has been working to strengthen
corporate governance and Monozukuri to enhance Reliability, asource of Komatsu’s strength.
nStrengthening Corporate GovernanceTo increase its corporate value to the greatest possible extent, it isimportant for the Komatsu Group to design a framework in which theGroup can enhance its corporate value in a steadfast manner. Thistask calls for maximizing the total market value of Komatsu sharesand working to expand sales and profits as the company strives tofully satisfy a broad range of stakeholders, especially customers.
Top managers of Komatsu Group companies are expected
to provide solid management with full awareness of corporatesocial responsibility (CSR) while continuously ensuring Quality andReliability in management. Moreover, managers are stepping up therevitalization of the Board of Directors—the core body for corporate
governance—and the establishment of an internal controls system
while enhancing the transparency and soundness of management.
All employees of Komatsu Group companies are expected not topostpone but to promptly work on solutions and corrections when
they discover issues and/or problems related to the rules in all business areas and domains.
nStrengthening Monozukuri
It is critical for Komatsu as a manufacturer to promote reform basedon the Monozukuri concept to enhance its competitiveness.
Monozukuri means that the Komatsu Group has to rise to every
challenge in creating safe and innovative products in the spirit of unified teamwork. This teamwork incorporates every division and partner related to the value chain—the chain of entities through which
added value emerges—spanning from research, development, procurement, manufacturing, sales, and after-sales service divisions to
the management division as well as to business associates and sales
agents. The Group also emphasizes environmental friendliness in all
activities throughout the product lifecycle.

At the Top Management Forum held in April 2008, 13 top managers from
Komatsu Group subsidiaries outside Japan gathered to discuss and reassess
how to spread The KOMATSU Way and incorporate it into human resources
development. Participants each finalized a relevant plan.

30

Corporate Governance
To become a company that enjoys even greater trust from all its stakeholders, Komatsu is strengthening corporate governanceGroup-wide to advocate corporate ethics and maintain and improve transparent and sound management.

Organizational Profile
In 1999 Komatsu Ltd. introduced the Executive Officer System andhas been working to separate management decision-making andsupervisory functions from executive functions within the confines ofthe law. At the same time, the Company has maintained the Boardof Directors with a small number of members and appointed outside
directors and auditors. To improve the effectiveness of discussions inBoard meetings, we have promoted reforms in the operational aspectof Board meetings to ensure thorough discussions of important management agendas and quick decision-making.
nBoard of Directors and Directors
The Board of Directors meets every month and more often as
needed. [The Board met 15 times in the fiscal year ended March 31,
2008.] In Board meetings, directors make decisions on management policies of the Komatsu Group, review and resolve importantmanagement matters, and strictly control and supervise the execution of management duties by all executive management personnel
including the representative directors. At present, of the 10 directors
on the Board, there are three outside directors. When performing
their duties, outside directors offer opinions and suggestions froman independent position, based on their insight and rich experience.
Their attendance rate at Board meetings is high, making contributions to ensure transparent and sound management through theiractive participation in discussions.
nBoard of Corporate Auditors and Auditors
Komatsu Ltd. has consistently ensured that the number of outside
corporate auditors represents at least half of the Board of Corporate
Auditors. There are five corporate auditors, of whom three are outside
auditors. The Board of Corporate Auditors makes decisions concerning audit policies, duty assignments and other relevant matters. Eachcorporate auditor attends Board of Directors meetings and otherimportant meetings, audits the execution of duties by directors, andconducts appropriate audits by meeting every month and hearing
the conditions of execution of management duties from the directors. [The Board of Corporate Auditors met 15 times in the fiscal year
ended March 31, 2008.]

Each outside auditor performs his audits from an independent position throughout the year, based on the audit policies, plans, methods
and assignments resolved in Board of Corporate Auditors’ meetings.
In both Board of Directors’ meetings and Board of Corporate Auditors’
meetings, each auditor offers opinions and suggestions based on his
insight and rich experience.
nCollaboration between Corporate Auditors and the Internal
Audit Department
The Internal Audit Department, in cooperation with other related
departments, regularly audits business bases and affiliated companies both in Japan and overseas, evaluates the effectiveness of
their internal control, reinforces their risk management, and works toprevent frauds and errors. Corporate auditors observe audits by theInternal Audit Department, form their own audit opinions, and give
advice and recommendations to the Internal Audit Department.
In addition to reporting the audit results above to the Board of
Corporate Auditors, the Internal Audit Department maintains closeand substantive collaborations with corporate auditors, for example,
by providing information on a routine basis.
nDirectors’ Remuneration
Concerning the directors’ remuneration, in 1999 we established theCompensation Council membered mostly by experts outside of theCompany to ensure transparency, objectivity, and validity. Total remuneration and other compensation for directors and corporate auditors
are publicly announced.
nInternational Advisory Board
In 1995 we established the International Advisory Board (IAB) to
receive objective advice and suggestions from outside experts, bothforeign and Japanese, for what Komatsu should work for as a global
company. As a general rule, it meets twice a year to discuss andengage in information exchange.

Managerial Structure

Corporate Governance of Komatsu
Shareholders’ Meeting
Elect/Dismiss

Elect/Dismiss
Audit

Board of Corporate
Auditors

Office ofAssistants
to Auditors

Standing: 2
Outside: 3Elect/Dismiss

Audit reports

Independent
PublicAccounting Firm

Board ofDirectors
Internal: 7External: 3

Recommend

Collaboration

Compensation
CouncilInternal audit

ReportAudit Dept.
Elect/Dismiss/Supervise
Internal
audit

ReportAdvise/Suggest

Affiliatedcompanies

Executive Functions

Komatsu sends external
directors and auditors.

(26 Executive Officers,incl. 4 Directors)

Compliance
Committee, etc

International
Advisory Board

Agree with the selection/Decide the dismissal or the rejection of re-appointment/Confirm suitability or independency of
the independent public accounting firm.
Report audit results

31Improvement of Internal Control
nSystem to Ensure Directors’ Execution of Duties
To ensure the efficient execution of duties by directors, we implement
the following:1) The Board of Directors meets every month and more often as
needed. It strives to maintain transparency and soundness ofmanagement through the participation of outside directors. We
have also established the Regulations of the Board of Directors
and the Standards for Agenda of Board Meetings, thereby clarifying the matters on which the Board of Directors should makedecisions.
2) Together with the introduction of the Executive Officer System,
we have defined the separation of duties for directors, executive
officers and senior managers, and set up internal rules including the Regulations of Decision-Making Authority, to ensure
appropriate and effective execution of duties by directors.
3) To promote efficient management of the Board of Directors, wehave established the Strategy Review Committee consistingof senior executive officers and senior managers. Based on
the reviews of the Committee, each executive officer and eachsenior manager executes his or her duties within the authority
delegated by the Board of Directors.
nFramework to Ensure Appropriateness of Business
Operations of the Komatsu Group1) We have established the Regulations of Affiliated Companies
and relevant rules to contribute to proper and efficient operation of Group management while respecting the independenceof the management of affiliated companies. We have also
positioned the Komatsu Code of Worldwide Business Conduct
as the code applicable to all companies affiliated with theCompany. Based on these regulations and the code of business conduct, each company of the Komatsu Group stipulates
various regulations for the proper promotion of duties.

Managerial Structure322) Impor tant committees of the Company, including theCompliance Committee, Risk Management Committee andExport Control Committee, take actions with the entire Groupin view, and allow representatives of affiliated companies totake part in their meetings as needed.
3) The Company makes particularly important affiliated companies regularly report to the Board of Directors of the Company
on the status of business, including risks and compliance.
4) The Internal Audit Department of the Company audits each division of the Company and implements or supervises auditing ofmajor affiliated companies that belong to the Komatsu Group.
It also monitors and instructs each affiliated company so that it
will build its structure in conformity with the Company’s internal
control and operate it correctly.
nBasic Policy Pertaining to the Elimination of Antisocial
Forces
It is the basic policy of the Company to prohibit the Komatsu Group
from having any relation whatsoever with antisocial movements orgroups that threaten the order and security of civil society from theperspectives of social justice and corporate social responsibility.
1) T his policy is provided in the Komatsu Code of Worldwide
Business Conduct and diffused throughout the Company aswell as each company of the Komatsu Group.
2) The Company works with police and other relevant externalorganizations to prevent the involvement of antisocial movements or groups in its management and quell any harmful
effects they may bring about.
3) The Company is doing its utmost to collect information andreceive education training from external organizations, andshares information throughout the Komatsu Group.

Promoting Compliance and Risk Management
Under the principle of “compliance comes first,” Komatsu has established a framework to ensure thorough compliance withbest practices in business.

Promoting Compliance
Frameworks for Promoting ComplianceTo make certain that the entire Komatsu Group complies with therules of the business community, Komatsu has appointed an executive officer in charge of compliance and established the ComplianceDepartment to handle this issue exclusively. The Compliance
Committee, chaired by the President and CEO, reviews the Group’s
action policies and important issues, while regularly reporting thestate of compliance-related activities to the Board of Directors.
n Komatsu’s Code of Worldwide Business Conduct
The company has formulated Komatsu’s Code of Worldwide
Business Conduct (established in 1998 and revised six times todate) as a compilation of best business practices to be observedby officers and employees of Komatsu Group companies both inand outside Japan. The code addresses fair business practices,non-discriminatory personnel systems, endeavors for the global
environment, appropriate information management, internal control
structure, and other topics. The text of the code has been released tothe public in its entirety.
nEnacting Thorough Compliance
For continual awareness among employees about compliance,
the Group is working to raise their consciousness of best businesspractices by displaying in every Komatsu Group business unit posters listing The Five Principles of Compliance, a condensed version of

Komatsu’s Code of Worldwide Business Conduct. The Group raises
awareness through e-Learning and well-developed compliancerelated education and training tailored to employees’ ranks and thetypes of operations they are responsible for. During internal audits ofKomatsu business units and Group companies, the Komatsu Group
conducts financial audits and monitors compliance with businessrules and safety and environmental practices, leading to early detection of risks and reforms.
nInternal Reporting System
Komatsu established the Business Rule Consultation Office in 1998
through which employees from any Group company can confer
about issues pertaining to best business practices or report questionable actions. By clearly stating in Komatsu’s Code of Worldwide
Business Conduct and Group companies’ workplace rules that
employees using the internal reporting system will not be penalized,
the Group fosters active consultations and reporting, maximizing theusefulness of this consultation system.

The State of Compliance in FY2007
In FY2007, the Komatsu Group experienced no substantial compliance-related infractions or incidents.

Risk Management
Basic Principles and System for Risk Management

The State of Risk Management in FY2007nImplementing a Business Continuity Plan (BCP)* for
Komatsu
Komatsu has formulated a BCP to carry out major operations withoutsuspension, or restore them after only a short suspension, should adisaster or accident occur.
The company conducted a BCP simulation at the Head Office,assuming an earthquake occurring directly beneath the Greater
Tokyo Metropolitan area—a disaster said to be highly likely. The
simulation aimed to empower employees to take appropriate actionsin the event of an actual emergency. Komatsu’s manufacturing plants
have used their BCPs to strengthen the ability of buildings and equip-*A plan that systematizes major operations across the entire company such thatthey can continue without suspension or can be brought back after only a briefsuspension.

Managerial Structure

As Komatsu continues to make efforts to increase its corporate value,
it recognizes problems related to compliance, particularly environment, product quality, accidents, information security, and other matters as major risks for continuous growth and has therefore adopted
the following countermeasures.
T Komatsu has established Risk Management Rules to correctly
recognize and manage risks. The company has appointed personnel to oversee individual risks, further promoting the build-up
of a solid foundation for risk management.
T Komatsu has established a Risk Management Committee todevise relevant policies for the Komatsu Group, evaluate risk
measures in place, and take control of risks when they arise.
The Risk Management Committee regularly reports on its deliberations and activities to the Board of Directors.
T Komatsu will establish an emergency headquarters when serious risks surface, minimize damage, and implement appropriate
measures.

ment to withstand earthquakes and establish or reconfirm their systems governing initial actions to be taken in the event in particular thata business associate suffers damage.

nPromoting Risk Management throughout the GroupTo reinforce the risk management structure across the Group,
Komatsu is refining the level of management at each Group company
through explanatory meetings and study sessions on risk management and BCPs.
Additionally, Komatsu is strengthening its Group-wide system forcommunications in times of emergency by introducing emergency
contact and safety confirmation systems, broad-area wireless devices, and other useful tools.
nConsolidating Information Security
With the Information Security Committee established in 2005 at thecore, Komatsu is developing a structure for information security forthe entire Group and implementing various control measures.
Komatsu has distributed an Information Security Guidebook to
all employees with a view to raising their consciousness of thoroughcompliance with rules. The company has also inaugurated explanatory sessions, education and training (e-Learning), and similar awareness-raising activities at its business units. The company revised its
policy for personal information protection in February 2008, reinforcing its appropriate handling of such information.

33

Quality and Reliability
To pursue Quality and Reliability, Komatsu has established a system for providing high-quality products andservices that are innovative and safe, taking to heart the opinions of customers.

Fundamental Approach to Pursuing Quality Management
The fundamental principle of Monozukuri (manufacturing) lies in
Komatsu’s commitment to Quality and Reliability in order to provide
products—both hardware and software—that customers are happy
to own (see P. 30).
To achieve this, Komatsu puts the customer first as one of its
Basic Managerial Policies, with the pursuit of maximum customer
satisfaction at the foundation. The company carries out a continuous
process of reform and refinement with all divisions responsible forputting this policy into practice, whether in development, manufacturing, sales, after-sales service, or management.
Scope of Komatsu Quality Management
The Basic Stance of Management
Quality and Reliability

Basic Managerial Policy
The Five Guidelines

Corporate Social Responsibility
Komatsu’s Code of Worldwide Business Conduct

Global Environment
Komatsu EarthEnvironment Charter

Managerial Structure

Development
flow of a
product

Assurance ofInnovative Products
and Services
Principles Governing
Quality AssuranceStandards for
Product Safety
Products

Personnel,
Education andTraining of
Human Resources
Basic Policy of
Human Resources
Education and Quality
training management

Scope of Komatsu
Quality Management
Use of indices to increase Komatsu’s Quality and Reliability

In practical implications, Komatsu considers the scope of its quality management as indicated in the chart on the left and uses indicesto promote such management.

Komatsu’s Principles Governing Quality Assurance
Komatsu has established the following principles on quality in its
products and services, which all subsidiaries and employees are
responsible for putting into practice.
Principles that Increase Quality and Reliability
Provide products, services, and systems that are environmentfriendly, safe, and innovative from the perspective of thecustomer.
Definition of Quality Assurance
The company has a responsibility to take actions that will
ensure it is able to provide products and services that thecustomer can purchase and use with a sense of assurance
and satisfaction and use for many years to come.
Principles Governing Quality Assurance(1) Putting customers first, being receptive to the views of thecustomer, and responding appropriately to the customer,
thereby earning the customer’s satisfaction, are fundamental
to the job of every employee and constitute the responsibilityof every employee.
(2) Complying with international standards and the legal
requirements particular to individual countries as a matterof course, and providing products and services that, fromthe perspective of the customer, have incorporated proper
regard for safety and a sense of assurance and that do
not easily malfunction, are fundamental to the job of
every employee and constitute the responsibility of every
employee.
(3) Providing products and services that incorporate proper
regard for global environmental conservation is fundamental
to the job of every employee and constitute the responsibilityof every employee.
(4) Providing products and services that are creative andprovide benefits to the customer is fundamental to the jobof every employee and constitute the responsibility of every
employee.
(5) Giving the customer a sense of safety, assurance,
satisfaction, and the ability to use the product for many
years to come is a source of happiness for every employee.

Mechanisms for Quality Assurance
At Komatsu, all employees in each division, from product planning todevelopment, production, sales, and after-sales service, share a senseof working as a single unit to manufacture products that are safe,
innovative, and of high quality. Through a strengthening of Komatsu’s
unique Monozukuri system, the company is able to introduce competitive DANTOTSU products to the market and provide services andsystems with substantial features.
At each step of the development and production system, meetings are held to consider and evaluate the product. Activities are thenlaunched to have the product’s suitability assessed and enhanced
until the ultimate goal is attained. In this way, the company conducts
quality assurance activities that firmly ensure Quality and Reliability.
Through such activities the company is able to strengthen safetyassurance and satisfaction for its customers while simultaneously
providing products and services that take the global environment into
account and comply with both international specifications and theregulatory requirements of individual countries.

Komatsu’s Mechanisms for Quality AssuranceMarket trends•Assessing market
trends34

Product planning•Clarification ofdesired level of
Evaluation
qualitymeeting•Formulation of
product objectives

Development• Product planningand design
Evaluation• Creation of ameeting
prototype, quality
confirmation testing
objectives

Manufacturing• Mass production
prospects• Mass production

Customer support

Customer satisfaction• Sales• After-sales service•Collection of
information on
product quality in themarket• Conducting customer
satisfaction surveys

on products and their usage and conduct maintenance activities.
They then provide feedback to relevant divisions regarding customers’ views and requirements for products. The company has createda system to increase customer satisfaction through rapid responses
to such information (see chart below).
Moreover, Komatsu maintains a database on product quality sothat the company can respond rapidly upon discovering a quality-related problem and have all the company’s sales and service divisions
able to access the information they need to help remedy the issue.

Structure for Quality Assurance
The majority of Komatsu’s products—construction and mining equipment, presses, and forklifts—are used as manufacturing equipment
at customers’ sites of operation. These products are expected tocontribute to customers through a higher rate of utilization and productivity over long hours every day.
In reflection of these product characteristics, sales and service
staff at Komatsu visit customers to give detailed recommendations
Komatsu’s Structure for Quality Assurance
Customers

Komatsu

Sales agencies

President and CEO

Organization

Customers

Sales
agencies

Sales
andservicedivisions

Quality Assurance Division
Development
division

Quality Meeting

Manufacturing
division

Product Safety
Committee

Proactively addressing customer needs
Analysis of data

Visiting customers•Productqualityissues•Customer
needs

Meetings with customers to exchange views on technologies
Customer satisfaction surveys
Surveys tracking vehicles in operation over many years
Solving problems appearing in information
regarding product quality in the market

Flow ofinformation

Database on productquality in the market

Fulfillment of requirements

Information regarding
complaints•A sense ofassuranceandsatisfaction

Sales and service
information
Vehicle operation
information

Revision of processes
KOMTRAX (Komatsu
Tracking System forconstruction equipment)•Providing products appropriate
for customer needs•Compliance with safety andregulatory stipulations

System for Ascertaining the Degree of Customer Satisfaction•Providing products appropriate for customer needs
Planning, development

Mass production•Customer support activities

Sales

Purchase and use of
products by customers

After-sales service(Feedback)Based on its Principles Governing Quality Assurance, Komatsu has
piloted a variety of initiatives to increase customer satisfaction.
First, Komatsu believes it is extremely important to give serious
consideration to customers’ views and examine them on a continuous basis. Consequently the company conducts regular customer
satisfaction surveys, including post-launch field surveys. Komatsu
uses the results to improve both the products themselves and thestructure promoting quality assurance. The surveys help furnish newvalue to customers as the company develops DANTOTSU productsthat anticipate customer needs in advance and delivers services with
distinct features.
Komatsu is able to raise the level of customer satisfaction throughthese approaches.
nPost-launch Field Surveys and Feedback of Results
As a part of its system for comprehensively assessing customers’degree of satisfaction, Komatsu is moving forward with a postlaunch field survey. Company personnel visit customers who havepurchased newly launched products and request that they evaluatethem.
In concrete terms, these personnel listen to customers’ feedback
on a day-to-day basis regarding the degree of satisfaction towards
the quality and reliability of its products. The company pays care-

Development/manufacturing

Managerial Structure

Increasing the Degree of Customer Satisfaction•Principles guiding productquality•Objectives regarding productquality

Surveys

Post-launch field surveys
1. Survey targets
4. Survey items•Customers who have purchased(1) Degree of customer satisfaction
newly launched products or(evaluations by owners and operators)
vehicles with recent model changes•Operator survey on capabilities and2. Survey periods
functions•Periods of between about six•Ease of maintenance, serviceabilityand 12 months after product•Situation regarding replacement parts
launches(2) Surveys of sales representatives
3. Methods of conducting the surveys(at sales agents)•Direct visits to customers,(3) Surveys of service representatives
interviews(at sales agents)

Evaluation of degree of customer satisfaction (Quality Meeting)35

ful attention to the evaluations, views, and requests concerning its
sales and after-sales service and replacement parts. Komatsu processes and analyzes the gathered data to decide upon objectives for
improvement.
The resulting information is shared across the company, notably
with top management, and provided as feedback to divisions at
every step in the process, including development, manufacturing,and sales and after-sales service. With the means to improve upon
problems and revise the quality assurance system, the company candeliver products and services that satisfy customers.

Surveys Tracking Vehicles in Operation for
Extended Hours*
Komatsu pursues improvements in product durability and reliability
through a system of surveys tracking vehicles in operation for extended hours. This allows the company to provide products satisfying thecustomer and consuming fewer resources.
Komatsu personnel conduct an observational study to investigate
in durability, reliability, economic efficiency, capability, and functionality by physically breaking down vehicles that have been in operationfor extended hours at customers’ worksites. The company assesses
whether or not the results satisfy customers’ expectations and thedegree to which their demands match product quality objectives at
Komatsu. The company designs plans to rectify areas not meeting
Komatsu’s quality standards, later integrating these proposals into
product revisions or the development of new products. This processincreases product durability and reliability and thus extends productlifecycles, leading to greater customer satisfaction and less resource
consumption and waste.

Using IT to Support Customers throughout
the Product Life Cycle
Komatsu uses IT-based remote vehicle management systems known
as the Komatsu Tracking System (KOMTRAX) for conventional
construction equipment and the Vehicle Health Monitoring System(VHMS) for large mining equipment to indicate the current state of
the vehicle’s “health,” its operating status, and other key information.
Using this information to improve vehicle quality or assess customer
needs for after-sales services, Komatsu provides customers support throughout the product lifecycle by increasing vehicles’ rates ofoperation while decreasing their maintenance costs.

Quality Assurance Activities at the Global Level
Komatsu provides products of universal quality at every location
throughout the world by fully implementing quality assurance activities globally. For this purpose, the company aims for uniform technical drawings, manufacturing systems, inspection methods, information collection, and quality management.
Komatsu labels as “mother plants” certain global manufacturinglocations with product development capabilities. These plants serveat the center of global development and manufacturing activities, with
their leading-edge technologies and techniques then transferred toother manufacturing locations around the world. This improves technology and enhances product quality, making them uniform aroundthe globe.

*Defined as vehicles with an operating history of 5,000 hours or more

Promoting Product Safety to Ensure Customer Safety and Assurance
Komatsu puts safety and assurance at the forefront in its quality
assurance activities so that customers can use the company’s products safely and with a sense of assurance. Komatsu has formulatedStandards for Product Safety and associated Principles and has all
employees comply with them in order to deliver products that aresafe, provide a sense of assurance, and can be used for many years.

Managerial Structure

The Komatsu Information System for Product Safety
Customers, sales agents

Relevant governing authorities,
relevant organizations

Internal proceedings (analysis, formulation of response measures)•Safety and regulatory affairs
Research division•Product development• Performance, reliability•Safety mastersystemConfirmation• Development-related
Evaluation

evaluations of productsafety, regulation value,etc.

Quality assurance
division at each plant

Quality assurance
division at Head Office•Incorporation ofquality into products•Responses toregulatory issues
via manufacturing,sales• Product quality•System featuringConfirmation
persons respon- Evaluation
sible for vehicle
inspection and safety• Regulatory materials

Confirmation
Evaluation•Legally required
registrations/applications• Evaluation of appropriate-

ness of safety, safety
standards, etc.

•Information on accidents
occurring with customers•General information
received from customers•Information analysis•Analysis, verification•Consideration of response
measures•Information regarding productquality in the market•Audits of regulatory affairs•Remedial activities•Annual report covering
defective vehicle issues•Quality Assurance Meeting•Direct display on products•Modification of productmanuals, etc.
•Informing of customers(via sealed letter)•Collection of affected
products, repair

36•Determination of
response measures•Reporting to relevant
divisions•Prevention of recurrence, standardization•Implementation of response measures•Reporting and submitting
information to relevant
authorities as provided under
the law•Reporting to relevantorganizations

Information System for Product Safety and Services
In seeking to get information on problems with product safety as
early as possible, Komatsu has established an information systemfor product safety and promptly deals with issues. It continuously
strives to make improvements so that the company, including top
management, can respond quickly through coordinated actions,
including (1) assessments of the cause of the incident and procedures to be taken, (2) contacting the relevant governing authorities,(3) deciding to take remedial measures such as conducting a recallof products still on the market.
Principles Governing Quality Assurance(Regarding product safety)
Complying with international standards and the legal
requirements particular to individual countries as a matter ofcourse, and providing products and services that, from theperspective of the customer, have incorporated proper regard
for safety and a sense of assurance and that do not easily
malfunction, are fundamental to the job of every employee andconstitute the responsibility of every employee.

nProviding Product Safety Information to Customers
Komatsu meets all legal requirements for providing safety information
directly on products or in user’s manuals. The company supplements
this by providing product safety information to customers, mainly
using the methods listed below. The company seeks to address eachparticular situation, with, for example, engineers or top management
visiting customers as the situation might require.

System for Dealing with Recalls
Customers have become more concerned about product safety
in general and product recalls in particular. In response, Komatsu
is reinforcing its organizational strength and its ability to generatecomprehensive and rapid responses for ensuring safety in the marketplace.
Procedure Governing Recalls(1)	P roposal for rectification of the situation based on
information regarding the defect; decision regarding what
measures the company will take towards the market(2)	File notice with relevant authorities as provided under thelaw(3) Inform customers by appropriate means(4)	Take appropriate corrective measures, including, forexample, repair, replacement, or refund
Means for Preventing Recalls(1)	S trengthening of system for collecting information on
product quality in the market(2)	Promotion of technical verification of the problem involvedin the recall and timely decision-making(3)	S trengthening of check system that features persons
responsible for vehicle inspection and safety(4) Regular auditing of recall-related operations
Managerial StructureStandards for Product Safety(1) Compliance
The provision of products and services that comply
with international standards and the legal requirements
particular to individual countries is fundamental to the jobof every employee and constitutes the responsibility of
every employee.
(2) Safety via prevention
The provision of products and services that are safe andprovide a sense of assurance, and do no harm to thecustomer is fundamental to the job of every employee andconstitutes the responsibility of every employee.
(3) Security regarding accidents
The provision of products and services that minimize any
injury that might occur to a customer who has an accident
is fundamental to the job of every employee and constitutes
the responsibility of every employee.
(4) Transparency
The ongoing provision of advance safety warnings after
receiving information from the customer and, in thecase of a defect arising in a product or service, prompt
response measures and the provision of information, arefundamental to the job of every employee and constitutethe responsibility of every employee.
(5) Improvement of organizational climate
In order to create a corporate climate in which productsafety is emphasized, the standardization of the safety
management system and safety techniques as wellas ongoing efforts to improve them are at all times
fundamental to the job of every employee and constitutethe responsibility of every employee.

Methods for Provision of Product Safety Information to
Customers(1) D irect indication on the product itself or in the user’s
manual(2) Direct explanations to customers by Komatsu sales andservice employees and sales and service employees ofsales agencies(3) Telephone consultations with the service division of eachplant and the customer service representatives in quality
assurance divisionsnNumber of Incidents with Recall Notices Filed
Komatsu strictly oversees compliance with legal requirements.
Should a defect somehow be found in its products or services, thecompany initiates rapid correction measures and moves forward withproactive information disclosure.
The number of incidents for construction equipment sold inJapan in which recall notices were filed (see graph below) shows anincrease in FY2005, when Komatsu thoroughly investigated productquality information from the previous five years and decided voluntarily to file notices and take remedial action for ensuring the safety ofvehicles for transporting goods by road. The company will continue
to pursue safety to the greatest extent possible in the years to come.
Number of Incidents with Recall Notices Filed(for construction equipment sold in Japan)(Incidents)

21

20

15
11
10
7

8

8

2006

2007

5

0
(FY)

2003

2004

2005

37

Data on Environmental Impact Resulting from Business Activities

Relationship between Business Activities andthe Environment
The Komatsu Group procures various parts and materials and,through the manufacturing process, utilizes the earth’s resources,
including raw materials, water, energy, and chemical substances,among others, to provide products to customers. Such businessactivities impact the environment at each stage in the process.

The Komatsu Group will continue to provide more highly valueadded products and services while assessing the environmental
impacts resulting from its business activities, formulating mediumand long-term objectives, and introducing measures to reduce suchimpacts.

Environmental Impact Resulting from Business Activities of Komatsu Group Companies, including Facilities outside Japan (FY2007)

Direct Materials
Steel579,000 t*1

Input

Indirect Materials
Paints2,193 t*2
Lubricants
15,892 kR*2

Development

Procurement of Materials•Environment & Economy•LCA design•Medium-term targets fordevelopment of environmental
technology•Green procurement

EnergyElectricity
Heavy oil A
Kerosene
Light oil
Natural gas
LPG
Gasoline
LNG
Coke

736 GWh
17,000 kR
7,000 kR
12,000 kR
13 million Nm3
8,000 t500 kR
10 million Nm3
8,000 tWater Resources
Groundwater 5.8 million m3
Industrial water 0.2 million m3
Supply water 0.9 million m3

Manufacturing(27 Komatsu Group Manufacturing Facilities in and outside Japan)•Mitigation of climate change(energy conservation)•Effective utilization of resources (zero emissions)•Environmental risk management•Elimination of hazardous chemical substances*2•Termination of use of organic chlorinatedcleaning solvents*3
Environmental Risks(Air, soil, and groundwater pollution)
Measures for underground oil tanks Completed*2
Storage for PCB transformers
570 units*3
Groundwater observation wells
95 wells*3
Company on-site landfills
ClosedProduct
Product weight(construction
equipment only)*5
818,000 t
Number of
products(construction
equipment only)*5
46,026 vehicles

Output
Waste
Total amount generated
114,000 t*3
Substances under the Pollutant Release andTransfer Register (PRTR) Law
80.7 t*3

Data

Waste Recycling
Recycling volume

Atmospheric Discharges
CO2500,000 t-CO2
SOx
166 t
NOx
304 t
Substances under
the PRTR Law
1,195.3 t*3Noise andvibration

87,000 t*3
Hazardous waste manifests

Use in other Waste Disposal
Waste materials disposed by subcontractor
industrial
sectors
27,000 t*3(Company on-site landfill of waste materials
0 t)

Water-based Discharges
Wastewater
4.8 million m3*3
BOD emissions
16 t*3
COD emissions
20 t*3
Substances under the PRTR Law(public water areas)
0.0 t*3
Substances under the PRTR Law(sewerage)
0 t*3

CO2 emissions: 	Calculated by multiplying the amounts of electricity, heavy oil, etc. used (see Energy section of Input column) by the “CO2 coefficient” in each area. (In Japan,
the coefficient for fuel is calculated in keeping with the Law concerning the Rational Use of Energy [Revised] and the Mandatory Greenhouse Gas Accounting
and Reporting System that entered into force in April 2006. The coefficient for electricity is calculated in keeping with the guidelines for calculation stipulatedby the Ministry of the Environment of Japan in FY1999, which are based on the Act on Promotion of Global Warming Countermeasures.)SOx emissions:
Calculated by multiplying the “S content by percentage” (based on element tables of suppliers) by the amounts of heavy oil, kerosene, light oil, and coke used.
NOx emissions: 	Calculated by multiplying the “nitrogen oxide emissions units” (obtained at each Komatsu facility) by the amounts of heavy oil, kerosene, light oil, natural gas, and LPG used.		
Emissions and transfer Calculated by the “content ratio of specific chemical substances” contained in indirect materials multiplied by the “discharge or transfer rate.” This calculationof substances covered is based on the PRTR Law, which was designed to mandate the disclosure of the volume of specific chemical substances released into the environment topromote the management of such substances.
by the PRTR Law:

38

Environmental Impact Indicators and Environmental Accounting, Broken Down by Region
Water Resources
CO2
Waste
EnergyEnvironmental Accounting (Expenses)(million
GJ)(millionyen) 21,220

7(million
m 3)

6

6.7

(1,000 t)

6.06

300

306.3

50

20,000

42.6

6

40

5

4

200

2

100

15,000
31.6

30

4

28.1

10,000

3
2

1.4

1

0
Asia
The
Europe(excluding Americas
Japan)

1,390 kR*4

11.3

62.5
0.50

0.5
Japan

20

101.8

1.1

0

EnergyLight oil

Recycled amount
Disposal amount(1,000 t)

PackagingSteel
4,401 t*4
Resins109 t*4Paper
3,819 t*4

Japan

10

28.9

0.22 0.07

0Asia
The Europe(excluding Americas
Japan)

Japan

0

Asia
The Europe(excluding Americas
Japan)Japan

EnergyElectricity, fuel

EnergyFuel

Indirect Materials, Oils

Indirect Materials, Oils

Asia
The Europe(excluding Americas
Japan)

5,000
0

3,040
1,200

310
Japan

Asia
The Europe(excluding Americas
Japan)

EnergyFuel, electricity

Logistics

Sales and Services

Use•CO2 reductions in logistics•Improvement of transport
efficiency•Improvement of packing materials•Provision of environment-friendly
products and services•Creation and operation of atransaction network for usedcomponents (parts), information
on “Reman” sales, etc.

•Reduction of environmental
impact during the productusage stage•Provision of solutions forcustomers’ environmental
activities•Promotion of fuel-efficient
operation

Recovery andDisassembly•Promotion of “Reman,” inwhich used components (parts)
are recovered, remanufactured,and supplied back to themarketReuse of products
Reuse of parts
Recycling of materials(outsourcing)Atmospheric Discharges
77,600 t-CO2*4
CO2

Atmospheric
Discharges
CO2

Atmospheric
Discharges
CO2, NOx, diesel
particulate matter

Data

Atmospheric
Discharges
CO2
Returnable
pallets

Waste oilproducts

Recycling conducted
at oil manufacturers

Noise andvibration

Use in otherindustrial sectors

Hazardous
waste manifests

Waste
disposal

Coverage of Data
*1 Related to construction machinery in Japan (excluding Komatsu Utility Co., Ltd.)*2 Komatsu manufacturing facilities*3 Komatsu Group manufacturing facilities in Japan*4 Logistics from procurement to sales related to construction machinery in Japan*5 Related to construction machinery manufactured in Japan

39

Environmental Accounting

Concept of Environmental Accounting
Komatsu began releasing environmental accounting data in FY1999
to manage ongoing and effective environmental conservation activities and disclose to its customers, shareholders, and all other stakeholders their content, cost, and effects. In FY2000, the company
expanded this environmental accounting to its manufacturing facilities outside Japan.
The costs of environmental conservation are calculated in accordance with guidelines and manuals published by the Ministry of theEnvironment of Japan.
Environmental accounting is still in the developmental stages.
Komatsu intends to monitor efficiently the costs and effects of environmental conservation in light of the life cycles of its products andformulate a new environmental accounting system that can be aneffective tool for evaluating environmental management.

Costs and Environmental Effects ofEnvironmental Conservation
Komatsu’s investment in Japan declined to 888 million yen, a 32%
reduction compared to the high level of the previous fiscal year. This
reflected a drop in environmental conservation-related investment tocover expansions in manufacturing capacity. However, there was a
72% rise over the previous year to 1,215 million yen outside Japan,
owing to an increase in investment in pollution mitigation equipment
and energy conservation measures, in keeping with the growth of themarket for construction and mining equipment.
R&D costs in Japan increased by 21% over the previous fiscal year, to 15,590 million yen. Substantial R&D expenditures weredevoted to reducing the environmental impact of products, especiallynew products such as diesel engines meeting Tier 4 emission standards. As a result, the environmental conservation costs arising from
R&D activities accounted for over 70% of the company’s total expen-

ditures, as in the previous fiscal year. Expenditures at manufacturing
facilities rose by 12% year-on-year due to increased pollution mitigation equipment maintenance fees and waste disposal processing
fees resulting from higher manufacturing volumes. Komatsu began
thorough remediation measures for soil contamination on the land it
currently owns, nearly doubling costs in this area compared to theprevious fiscal year.
Komatsu has disclosed numerical data on the following items
concerning the effects of environmental conservation.
T Environmental performance improvements that can be measured quantitatively
T Net economic effects that contribute to earnings through cost
reduction and avoidance and that can be directly measured inmonetary terms: In FY2007, Komatsu was able to achieve considerable positive economic effects through enhanced energy
conservation measures. Moreover, the reuse of furnace slag inroadbed materials has increased steadily.
The effects of reducing the environmental impact of Komatsu’s
products during use and the non-economic effects of external activities are still being assessed.

Management Based on Environmental Impact
Point (EIP)*1
With the aim of obtaining maximum ecological benefit (environmental
performance) with minimum economic cost (financial performance),
Komatsu integrated a standard set of indices for assessment of allenvironmental impacts attributable to its manufacturing facilities.
Komatsu can therefore express quantitatively (numerically) suchqualitative terms as “environment-friendly plant” and show clearly the
progress of targets and measures.
As a rational environmental impact assessment index (JEPIX)*2
well adapted to the actual conditions of environmental activities inJapan was developed, Komatsu decided to adopt this analyticalEnvironmental Costs (Investments and expenses)
Category

Investment
FY2006

Expenses
FY2007

FY2006

FY2007

Investment* Investment* Contents

Expenses* Expenses* Contents(millions of yen) (millions of yen)(millions of yen) (millions of yen)

1,071

821

3,027

3,413

558

895

2,483

2,305

1. Pollution prevention
cost

669

502

836

1,031

359

571

623

610

2. Global environmental
conservation cost

349

222

1,027

1,082

190

303

3. Resource circulation
cost

53

97

9

22

(2) Upstream/downstream
cost

0

0

0

65

(3) Administration cost

14

14

0

0

(4) R&D cost

219

43

23
0

(1) Business area cost

Data(5) Social activity cost(6) Environmental
remediation cost
Total

•Investment for installation and conversion of pollution
mitigation/prevention facilities (installation of effluent
processing facilities, conversion of coating booths, etc.)•Investment for implementing energy conservation
measures (introduction of solar energy generation,
installation of new ventilation systems, etc.)•Investment for reducing the volume of wastematerials (conversion of recycling facilities,
introduction of equipment for separating waste, etc.)•Investment for beautifying manufacturing sites

647

482

1,164

1,300

1,214

1,213

311

280

1,962

902

613

668

801

594

12,832

15,590

246

836

678

11

13

5

0

8

27

25

0

0

662

1,264

•Investment in research facilities for reduction ofenvironmental impact

125

0

109

45

1,304

888

17,457

21,221

707

1,215

6,219

4,548

*All figures are rounded off to the nearest million yen.

40

Top figure: Komatsu and Komatsu Group manufacturing facilities in Japan
Bottom figure: Komatsu Group manufacturing facilities outside Japan•Cost of maintaining equipment for mitigation/prevention of
air and water pollution and for noise and vibration
prevention (labor and depreciation costs)•Cost of maintaining energy conservation facilities, such ascogeneration systems (labor and depreciation costs)•Waste materials processing cost

•Reduction of the environmental impact of components, etc.
when shipping to outside Japan•Reduction of the environmental impact of mass-production units•Cost of maintaining environmental management systems•Cost of creating green spaces and beautifying
manufacturing sites•Cost of R&D activities to reduce the environmental impact of
products•Cost of R&D activities to develop environment-friendly equipment•Cost of conducting surveys and remedial countermeasuresrelated to soil contamination

technique in FY2002. Visualization and understanding of which process is generating what environmental impact can be done throughthe analytical method known as the “material flow network,” which
was adopted in FY2003.
Since FY2004, the company has raised the level of environmental
management by increasing the number of types of waste undergoing
thermal recycling and chemical substances being assessed. Aiming
to create truly zero emissions plants, Komatsu will be considering
improvements from even more diversified aspects in the years to
come.

As a result, it was found that the manufacturing facility that wasmost effective in reducing its environmental impact in FY2007 was
the Awazu Plant. However, Komatsu could not offset the total rise inenvironmental impact generated through increased manufacturing
volumes by environmental impact reduction activities. Consequently,
EIP improvement rates were negative for every plant.
In FY2007 for the second year in a row, the Mooka Plant obtained
the equivalent value added (manufacturing value) with the least integrated environmental impact. From these facts, it follows that the
Mooka Plant is the “most environment-friendly plant” when expressedin quantitative terms.
Komatsu considers it important to continue evaluating the degreeof conformance to environmental standards set based on timeserial data obtained by using the two indices of overall environmental
impact improvement efficiency and overall environmental impact utilization efficiency. Komatsu has plans to introduce this concept to the
Komatsu Group manufacturing facilities both in and outside Japan topractice ecological business management on a consolidated basis.

*1 An integrated index of various environmental impacts*2 T he Environmental Policy Priorities Index for Japan (JEPIX) was developed at
International Christian University as part of the 21st Century COE Program of the
Ministry of Education, Culture, Sports, Science and Technology.

Assessing the Degree of Environment Friendliness
Komatsu made an attempt to evaluate the environmental impact ofoperations at each of its manufacturing facilities, associate the values
obtained with environmental accounting, and use the two indices
shown in the diagram below to evaluate the degree to which indices
are being met.
Environmental Effects
EIP improvement rate

EIP utilization efficiency

21.1 21.6

10.5 11.0 10.5 10.5 11.7

9.7 8.6 8.6 10.6

1.0

–0.02
–0.31
–0.53 –0.48–2.0(FY) ’03 ’04 ’05 ’06 ’07

0.77
0.02

–0.11–0.09
–0.25
–0.70

–1.0

11.4

0.0

–0.15
–0.71

–0.75 –0.80

–0.82
–1.15

–20.0

’03 ’04 ’05 ’06 ’07’03 ’04 ’05 ’06 ’07

Osaka Plant

Oyama Plant

Mooka Plant

Environmental impact reduction effects

Economic benefits

Items ofenvironmental
impactTangible benefits

Water
consumption

Cost of environmental conservation activities:
costs + investment amounts - depreciation amount
EIP: Environmental Impact Point

Rate ofyear-on-yearchanges (%)–28,039

10.0–9,1205.0–501,422

9.0–27,455

3.6

–817

2.6

6,785

–7.6

Type

Monetary value* Major activities(millions of yen)

Energyconservation

848

Resource
conservation

17

Waste
materials
reduction

265

Gain on saleof valuables

460•Energy conversion, etc.

47

26
•Promotion of recycling through thoroughgoingsorting

Avoidance benefits ofenvironmental risks(see Note below)

Contribution to profits(see Note below)•There were no accidents or
pollution in Japan during
FY2007 that led toviolations of the law.

•Proceeds from mobile
recycling equipment•No litigation costs wererequired in Japan during
FY2007.

103•Proceeds from value added
due to reduced
environmental impact of
products (engines)•Proceeds from Remanbusiness

Data

Waste materials
generation

EIP utilization efficiency:•Manufacturing value in relation to the degree ofenvironmental impact (yen/EIP), used to measure
the amount of monetary value added(manufacturing value) in relation to the degree ofenvironmental impact.
•The company uses this value to assess theenvironmental impact utilization efficiency rate
directly related to business activities.

Top figure: Komatsu and Komatsu Group manufacturing facilities in Japan
Bottom figure: Komatsu Group manufacturing facilities outside Japan

Environmental Effects

CO2 emissions

–10.0

–1.26

’03 ’04 ’05 ’06 ’07

Awazu Plant

Reduction
volume(t/year)

10.0

0.28

0.20

0.08
0

20.0

15.2 16.5 15.4

EIP utilization efficiency (yen/EIP)

EIP improvement rate (EIP/yen)

16.1 15.0 15.5 15.8 16.9

EIP improvement rate:•Effect of environmental impact reduction in relation tocost (EIP/yen) for environmental conservation
activities, used to measure the extent ofenvironmental impact reduction for each monetary
unit of 1 yen for environmental conservation activities.
•The company uses this rate to assess theeffectiveness of environmental conservation activities.

•Reuse of furnace slag for roadbed materials

272

Other

5

Total

1,596

5

453
*Figures are rounded off to the nearest million yen.
Note: Komatsu used statements instead of numeral figures to describe the “Avoidance
benefits of environmental risks” and the “Contribution to profits.” The company willfurther develop concepts and ways to understand effects in these categories. The
sales amounts of businesses for content presented in “Contributions to profits” in
FY2007 are as follows:		 •Mobile recycling equipment business: 9.6 billion yen		 •Engine business: 99.5 billion yen (Total for intra-Group sales from the Engine &Hydraulics Business Division)		 •Reman business: 28.6 billion yen (Worldwide Reman business sales from April
2007 to March 2008)

Effects on Society during the Product Use Stage*
Environmental impact reduction effects Tangible benefits•Environmental impact reduction resulting
from on-site recycling methods•Environmental impact reduction resulting
from product operation•Waste components reduction resulting
from Reman business•Reduction of expenses for processing
waste materials•Savings in operating and maintenancecosts•Reduction of repair costs*Concerning the effects on society derived from product use by customers, themajor items of qualitative information are shown here as a reference.

41

Environmental Management

Environmental Education and Training
Courses in Environmental Education and Training in Japan (excluding general environmental courses)
Organizer

No. Course nameHead Office

1
2
3
4
5
6
7
8
9

Administrative
divisions ofplantsTargetEnvironmental specialists (Komatsu and affiliates)

Advanced environmental education(held every two years)
Overview of the ISO14000 series
Training of internal auditors/
Refresher courses
Development and manufacturing(introductory)
Training of assistant foremen/Training of manufacturing engineers
Training new employees
Lectures on mitigating climate change
Education for enhanced environmental
understanding (e-Learning)
Education to refresh environmental
understanding (e-Learning)
Basic environmental education
Overview of the ISO14000 series
Training of internal auditors
Training new employees
Regulatory education and personnel exchange
Specialist training

Administrators(Komatsu, affiliates, and partner companies)
Environmental auditors(Komatsu, affiliates, and partner companies)
Development and manufacturing staff(for second-year employees)
Assistant foremen/
Manufacturing engineers
New recruits
Komatsu Group managers and employees
Komatsu Group managers
Komatsu Group managers and employees

Participants
FY2004

FY2005

FY2006

FY2007

—

28

—

19

24

42

29

36

19

30

60

51

59

56

73

97

50

50

70

89

125
468

186
308

1,294

767

0

4,675

191

Managers and employees
784
1
269
241
371
Managers and employees
87
2
62
0
2,138
Environmental auditors
113
3
232
76
30
New recruits
859
4
707
418
666
Managers and employees
144
5
590
1,084
788
Environmental conservation practitioners
6
553
277
113
(persons involved in regulatory affairs, etc.)
In addition to the education and training courses listed in the chart above, Komatsu also held explanatory sessions at business associates regarding the introduction of environmental
management systems and at sales agents regarding the Group’s environmental guidelines (see P. 11).

Number of Persons Having Environment-related Certificate
Certificate name

Number of persons with certificate*

Pollution control administrators
Energy administrators
Environmental management
system auditors

FY2004

FY2005

FY2006

FY2007243 (60)
47 (11)247 (60)
49 (11)209 (53)42 (14)192 (51)
39 (14)

9

8

7

8

*Figures in parentheses indicate the number of officers required.

Data

42

Chemical Substance Control and Pollution Mitigation and Prevention
Names of Class I Specific Chemical Substances and the Volumes Released and Transferred (Handled volume of 1 ton or more)
NumberNameunder the
PRTR Law
Ethylene glycol
43

VolumehandledVolume released

Volume transferred

Water

Soil

BuriedSewerage

802.6

0.1

—

—

—

—

Air

Disposed(Unit: tons)

Chemically
Volumetransformed containedor eliminated in products

6.6

—

795.9

311

Manganese and its compounds

793.8

1.2

—

—

—

—

13.7

—

778.8

63

Xylene

765.3

595.5

—

—

—

—

21.3

142.1

6.5

40

Ethylbenzene

474.3

388.1

—

—

—

—

15.4

69.5

1.4

227

Toluene

232.9

198.7

—

—

—

—

7.2

17.2

9.9

68

Chromium and chromium (III) compounds

90.6

0.0

—

—

—

—

2.3

—

88.3

346

Molybdenum and its compounds

61.1

0.0

—

—

—

—

0.1

—

61.0

231

Nickel

27.8

0.0

—

—

—

—

0.5

—

27.3

224

1,3,5-trimethylbenzene

22.6

9.9

—

—

—

—

0.3

1.3

11.1

69

Chromium (VI) compounds*

16.6

0.0

—

—

—

—

4.1

0.0

—

266

Phenol

13.6

0.0

—

—

—

—

1.8

11.7

100

Cobalt and its compounds

10.8

—

—

—

—

—

0.6

0.0

10.2

198

1,3,5,7-tetraazatricyclo (3.3.1.13.7) decane; hexamethylenetetramine

5.3

—

—

—

—

—

0.0

5.3

0.0

30

Bisphenol A type epoxy resin (liquid)

4.1

—

—

—

—

—

1.6

9

Bis (2-ehtylhexyl) adipate

3.9

—

—

—

—

—

243

Barium

2.3

—

—

—

—

—

310

Formaldehyde

2.0

—

—

—

—

25

Antimony and its compounds

1.9

—

—

—

—

—

232

Nickel compounds

1.9

—

—

—

—

16

2-aminoethanol

1.8

—

—

—

299

Benzene1.4

270

Di-n-butyl phthalate

0.0

0.0

—

—

2.5

—

3.9

—

0.0

—

2.0

1.1

—

0.8

—

1.1

—

—

1.8

—

—
2.3
—

0.8
—

0.0
0.7
0.7
—
—
—
—
—
0.7
0.3
—
0.0
—
—
—
—
1.0
*During chrome plating, chromium (VI) compounds become chromium compounds. Therefore, the volume transferred and the volume contained in products are listed under“chromium and chromium (III) compounds.”

Breakdown of the Amount of PRTR-related Substances
Released and Transferred at Komatsu and the KomatsuGroup Manufacturing Facilities in Japan

Changes in the Amounts of PRTR-related Substances
Released at Komatsu and the Komatsu Group
Manufacturing Facilities in Japan

Other 1.9%
Nickel 0.8%
Molybdenum 1.8%
Chromium and chromium (III)compounds 2.7%

1,200

Xylene 17.9%

Chemicallyeliminated7.2%

Ethylene glycol
23.9%

Released
into the air
35.9%
Amounttransferred(waste)
2.4%

600

8

949

880
5.1

4.6

(kg/million
yen)

1,194

1,118

900
Remainattached to
products
54.5%

Manganese andits compounds
23.4%

(t)

5.3

5.0

6

5.1

4

674

Ethylbenzene 11.7%
Toluene 6.0%

2300

Other 0.4%

0

(FY)

2003

2004

2005

2006

0

2007

Xylene 0.6%
Amount released

Ethylbenzene 0.5%
Other 0.8%

Other 1.3%

Ethylbenzene 2.1%

Xylene 4.3%

Index per unit of manufacturing value

Volume of VOCs Released by Komatsu and the KomatsuGroup Manufacturing Facilities in Japan
(t)
1,516

1,500
1,287

(%)

1,588

150

1,347

1,000

99.1

Renovation of Underground Tanks in Operation More Than
20 Years at Komatsu and the Komatsu Group Manufacturing
Facilities in Japan(Numberof tanks)

(%)
99

60

106.6

100

102.4

100

99

99

100

100

100

100
100

87

51

1,025

Data

Note: Substances handled in quantities of 1 ton or more

75
45

96.4

75
36

61

80 or less
50

500

30

50 or less
15
0

(FY)

50
25

20

17

16

25

0
2003
2004
2005
2006
2007
2008
Volume of VOCs released
Index per unit of manufacturing value (compared to FY2005)

2010

0

0

0

2

0

0

0

(FY)1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

0

Percentage of tanks renovatedNumber of tanks renovatedNumber of tanks more than 20 years in operation: 142

43

Environmental Data by Manufacturing Facility in Japan
Overview

Manufacturing facility

Awazu Plant

Location

Komatsu, Ishikawa Prefecture

Hirakata, Osaka Prefecture

Oyama, Tochigi Prefecture

Main products

Small and midsize bulldozers, small hydraulicexcavators, small and midsize wheel loaders,motor graders, large presses, armoredvehicles, etc.

Large bulldozers, midsize and large hydraulicexcavators, mobile crushers/recyclers(crushers, soil stabilizers, tub grinders, etc.)

Engines for construction/industrial
machinery, diesel generators, hydraulicequipment, excimer lasers, etc.

591/113Site/building area

(1,000 m2)(established in 1921)

Osaka Plant(established in 1952)

Oyama Plant

971/225

556/158

Number of employees

4,621

3,238

3,500

Date of ISO14001 certification acquisition

September 1997

July 1997

May 1997*The number of employees includes
those working for Komatsu affiliates
on the premises.

*Established year means as Komatsu Group.

(established in 1962)

Compliance Conditions to Major Regulations

Air
Item

Unit

Facility

Regulatedvalue

Actualvalue

Facility

Regulatedvalue

Actualvalue

Facility

Nitrogen oxides (NOx)ppm

Boiler180

92

Boiler150

20.3

Diesel engine

ppm

Heating furnace

180

20

Metal furnace

180

46.9

ppm

Diesel engine

950

800

Paint drying furnace 230

13.9

ppm

Actual
value

950

840

Gas turbine

70

17

Boiler180

82

Annealing furnace

200

35

K-value regulation

17.5

1.59

Regulation of total emissions (Nm3/h) 1.567

0.002

K-value regulation

7.0

1.88

g/Nm3

Boiler0.3

0.001

Boiler

0.03

0.006

Diesel engine

0.1

0.040

g/Nm3

Heating furnace

0.2

0.001

Metal furnace

0.1

0.013

Boiler

0.3

0.003

g/Nm3

Diesel engine

0.1

0.023

Paint drying furnace

0.1

0.009

Annealing furnace

0.25

0.0021

Electric furnace

0.2

0.001

Sulfur oxides (SOx)—

Soot and dust

Regulated
value

g/Nm3
*Regulated values are in accordance with the Air Pollution Control Law and local regulations.

Wastewater
Regulated value according to
the Water Pollution Control Law

Item

Unit

Regulated Actual value
value
Maximum Minimum Average

Regulated Actual value
value
Maximum Minimum Average

Regulated Actual value
value
Maximum Minimum AveragepH

5.8–8.6

5.8–8.6

7.6

6.6

7.1

5.8–8.6

7.8

6.8

7.4

5.8–8.6

7.4

7.1

7.3

BOD

160 mg/r

80

5.2

ND

2.4

25

3

0.9

1.8

25

12.9

2.7

6.2

COD

160 mg/r

80

38.0

ND

6

25

8

4

5.9

25

17.1

6.1

10.7

Suspended solids (SS)

200 mg/r

120

24.0

ND

4

80

4.4

2

3.0

50

20.0

3.6

9.3

Mineral oils

5 mg/r

5

2.9

ND

1.0

3

0.6

ND

0.3

5

ND

ND

ND

Copper

3 mg/r

3

ND

ND

ND

3

ND

ND

ND

3

ND

ND

ND
0.06

2 mg/r

2

0.3

ND

0.2

2

0.35

ND

0.19

2

0.09

ND

Nitrogen

120 mg/r

120

29

0.5

6.8

120

16.1

8.4

12.3

20

7.6

2.0

4.3

Phosphorus

16 mg/r

16

2.1

0.006

0.48

16

1.62

0.23

0.93

2

0.4

0.2

0.3

Cadmium

0.1 mg/r

0.1

ND

ND

ND

0.01

ND

ND

ND

0.1

ND

ND

ND

Lead

0.1 mg/r

0.1

0.009

ND

0.006

0.01

ND

ND

ND

0.1

ND

ND

ND

Chromium (VI)

0.5 mg/r

0.5

ND

ND

ND

0.05

ND

ND

ND

0.1

ND

ND

ND

Trichloroethylene

0.3 mg/r

0.3

ND

ND

ND

0.03

ND

ND

ND

0.3

ND

ND

ND

Tetrachloroethylene

0.1 mg/r

0.1

ND

ND

ND

0.01

0.00220.00200.0021

0.1

ND

ND

ND

Dichloromethane

0.2 mg/r

0.2

ND

ND

ND

0.02

ND

ND

ND

0.2

—

—

—

3 mg/r

3

0.007

ND

0.004

1

0.0006ND

0.0006

3

ND

ND

ND

Zinc

1,1,1-trichloroethane*Regulated values are in accordance with the Water Pollution Control Law and local regulations. *ND (“not detected”) indicates a value below the lower limit of detection.
*ND is considered to be the lower limit of detection when calculating the average.
*Other items are confirmed to be below the regulated value.

Major Performance

Data

Environmental impact

Item

Actual value

Item

Actual value

Item*Refer to the Relationship between
Business Activities and the Environment(P. 38) for details on the methods used
to calculate amounts.
*Total emissions of waste areexpressed as a composite of theamount recycled (excluding valuables)
and the amount disposed.
*Recycle ratio is calculated by dividing
the amount recycled by the amount
generated.
*Total emissions of BOD and COD are
calculated by multiplying the average
concentration by the amount ofwastewater.

Total CO2 emissions

60,510 t-CO2

Total CO2 emissions

40,905 t-CO2

Total CO2 emissions

84,143 t-CO2

NOx total amount

92,872 kg

NOx total amount

1,705 kgNOx total amount

16,039 kg

SOx total amount

4,785 kg

SOx total amount

0 kg

SOx total amount

Total emissions of waste

3,485 tTotal emissions of waste

2,869 tTotal emissions of waste

7,346 tAmount recycled

3,464 tAmount recycled

2,869 tAmount recycled

7,346 tRecycling ratio

99.4 %

Recycling ratio

100 %Recycling ratio

100 %BOD emissions

5,988 kg

BOD emissions

190 kg

BOD emissions

3,503 kg

6,312 kg

COD emissions

608 kg

COD emissions

Energy consumption

Item

Actualconsumption

Electricity

95,022 MWh

Heavy oil A

5,899 kr

Kerosene

20 kr

Light oil

592 kr*The heat energy conversion factor is
calculated in keeping with theguidelines for calculation stipulatedby the Ministry of the Environment ofJapan in FY1999, which are basedon the Act on Promotion of Global
Warming Countermeasures.

44

COD emissions

2,708,239 m3/year

Wastewater

LPG, et al.
Total

Converted to calorie
equivalents (GJ)

103,319 m3/year

Wastewater

Actual value

100 kg6,081 kg
568,800 m3/year

Wastewater

Item

Actualconsumption

Converted to calorie
equivalents (GJ)

923,856

Electricity

85,147 MWh

827,070

230,651

Heavy oil A

0 kr

0

Heavy oil A

1,027 kr

40,156734

Kerosene

53 kr

1,945

Kerosene

4,483 kr

164,537

22,614

Light oil

0 krLight oil

2,407 kr

107,246

LPG, et al.

169,238

LPG, et al.

Total

998,253

Total

1,285,101*Data for the Awazu Plant include data for the
Komatsu and Kanazawa Plants and Komatsu
Engineering Corp. (Awazu).

0*Data for the Osaka Plant include data for
the Rokko Plant.

Converted to calorie
equivalents (GJ)

Item

Actualconsumption

Electricity

111,162 MWh 1,079,753

91,959411,142
1,787,547

Koriyama Plant(established in 1995)

Mooka Plant(established in 1971)

Construction Equipment
Electronics Division (established in 1966)
Hiratsuka, Kanagawa Prefecture

Research Division(established in 1985)

Hiratsuka, Kanagawa Prefecture

Koriyama, Fukushima Prefecture

Mooka, Tochigi Prefecture

Hydraulic cylinders, swivel joints,
gear pumps

Large wheel loaders, dump trucks, axles

Control equipment for construction andmining equipment, thermoelectric modules,
temperature control equipment, etc.

R&D on business fields of the KomatsuGroup

296/19492/88

40/2

195/0

421

1,714

518

283

July 2002

April 2000

March 2000

May 2008

Regulated
value

Facility

Cogeneration engine 760

Actualvalue

720

Facility

Regulatedvalue

Actualvalue

Facility

Boiler

180

89

N/A

Diesel engine

950

320

K-value regulation

6.42

K-value regulation

8.0

1.60 or lessTempering (electric) furnace

0.2 less than 0.003

Boiler0.3

0.007

Baking (electric) furnace

0.2 less than 0.003

Diesel engine

0.1

0.040

Cogeneration engine

0.2

0.35

Regulatedvalue

Actual
value

—

—

N/A

—

Regulatedvalue

Actual
value

180

143

Cold/hot water generator 134

35

K-value regulation

11.5

1.47

Service generator

0.1

0.019

Cold/hot water generator

0.26

0.002

Facility
Service generator

—

0.073

Regulated Actual value
value
Maximum Minimum Average

Regulated Actual value
value
Maximum Minimum Average

Regulated Actual value
value
Maximum Minimum Average

Regulated Actual value
value
Maximum Minimum Average

5.8–8.6

7.5

6

6.9

5.8–8.6

7.3

6.4

6.9

5.0–9.0

25

3.3

ND

1.6

25

5.4

ND

2.2

600

40

17

9.6

11.9

120

23.0

4.8

12.0

50

18

2.3

5.4

50

ND

ND

ND

1

ND

ND

ND

5

ND

ND

ND

5

3

2

ND

ND

—

3

ND

ND

—

3

ND

6.0

7.4

5.8–8.6

8.0

7.1

7.5

230

2

49

10

2

ND

1.3

—

—

—

—

25

4

ND

3.3

600

110

ND

30

65

4

ND

3.0

ND

1.2

5

ND

ND

ND

ND

ND

1

0.1

ND

0.06

8.6

ND

ND

—

2

0.1

ND

0.1

2

0.05

ND

0.04

1

0.27

ND

0.10

120

20

20

—

120

31.0

27.0

29.0

—

—

—

—

120

—

—

—

16

2

2

—

16

5.2

3.5

4.4

32

0.6

0.6

0.6

16

—

—

—

0.1

ND

ND

—

0.1

ND

ND

ND

0.1

ND

ND

ND

0.1

ND

ND

ND

0.1

ND

ND

ND

0.1

ND

ND

ND

0.1

ND

ND

ND

0.1

ND

ND

ND

0.1

ND

ND

ND

0.1

ND

ND

ND

0.5

ND

ND

ND

0.5

ND

ND

ND

0.3

ND

ND

—

0.3

ND

ND

ND

0.3

ND

ND

ND

0.3

ND

ND

—

0.1

ND

ND

—

0.1

ND

ND

ND

0.1

ND

ND

ND

0.1

ND

ND

—

0.2

ND

ND

—

0.2

ND

ND

ND

0.2

ND

ND

ND

0.2

ND

ND

—

3

ND

ND

—

3

ND

ND

ND

3

ND

ND

ND

3

ND

ND

—

2

Actual value

Item

Actual value

Item

Actual value

Item

Actual value

Total CO2 emissions

14,231 t-CO2

Total CO2 emissions

15,416 t-CO2

Total CO2 emissions

2,253 t-CO2

Total CO2 emissions

2,607 t-CO2

NOx total amount

93,538 kg

NOx total amount55,545 kg

NOx total amount

0 kg

NOx total amount

310 kgSOx total amount

5,102 kg

SOx total amount

270 kgSOx total amount

0 kg

SOx total amount

83 kg

Total emissions of waste

1,455 tTotal emissions of waste

1,141 tTotal emissions of waste

168 t

Total emissions of waste

135 t

Amount recycled

1,455 tAmount recycled

1,141 tAmount recycled

168 t

Amount recycled

120 t

Recycling ratio

100 %Recycling ratio

100 %Recycling ratio

100 %Recycling ratio

89 %BOD emissions

34 kg

BOD emissions

83 kg

BOD emissions

1,259 kg

BOD emissions

6 kg

COD emissions

244 kg

COD emissions

457 kg

COD emissions— kg

COD emissions

23 kg

20,411 m3/year

Wastewater

Converted to calorie
equivalents (GJ)

38,136 m3/year

Wastewater

Converted to calorie
equivalents (GJ)

18,272 m3/year

Wastewater
Actualconsumption

Converted to calorie
equivalents (GJ)

5,636 m3/year

Wastewater
Item

Actualconsumption

Converted to calorie
equivalents (GJ)

Item

Actualconsumption

Item

Actualconsumption

Electricity

12,633 MWh

121,646

Electricity

28,595 MWh

285,092

Electricity

5,868 MWh

Electricity

4,626 MWh

44,659Heavy oil A

3,138 kr

122,696

Heavy oil A

220 kr

8,602

Heavy oil A

0 kr

0

Heavy oil A

78 kr

3,050

Kerosene

0 kr

0Kerosene

18 kr

660

Kerosene

0 kr

0Kerosene

84 kr

3,083

Light oil

0 kr

0Light oil

1,124 kr

42,937

Light oil

0 kr

0Light oil

47 kr

1,795

0

LPG, et al.

5,542

Total

58,129Item

LPG, et al.

14,658

LPG, et al.

14,189LPG, et al.

Total

259,000

Total

351,480

Total*Data for the Mooka Plant include data for
the Ibaraki Plant.

58,50458,504*Data for the Construction Equipment
Electronics Division include data for Komatsu
Electronics, Inc.

Data

Item

45

Environmental Data by Manufacturing Facility in Japan
Overview

Komatsu Utility Co., Ltd.
(established in 1968)
Tochigi Plant

Manufacturing facility

Komatsu Utility Co., Ltd.
(established in 1965)
Kawagoe Plant

Komatsu Castex Ltd.
(established in 1952)
Himi Plant

Location

Oyama, Tochigi Prefecture

Kawagoe, Saitama Prefecture

Himi, Toyama Prefecture

Main products

Forklift trucks, mini wheel loaders, peripheral
equipment for logistics

Mini excavators

Iron castings, steel castings, molds for
casting, etc.

403/63Site/building area

(1,000 m2)

215/48

107/32

Number of employees

1,038

501

850

Date of ISO14001 certification acquisition

February 1998

July 2002

January 2000
*Komatsu Castex Ltd. is the successor
company of the former Komatsu Ltd.
Himi Plant established in 1952.

*The number of employees includes
those working for Komatsu affiliates
on the premises.

Compliance Conditions to Major Regulations

Air
Item

Unit

Facility

Nitrogen oxides (NOx)ppm

Small boilers*

Regulated
value

(260)

Actualvalue

Facility

Actualvalue

Facility90

Cogeneration engine 950

790

Annealing furnace

200

70

Hot water boiler

100

Annealing furnace (small)

180

18

Calciners

220

1

ppm

Regulated
value

180

ppm
Sulfur oxides (SOx)

—
g/Nm3

Soot and dust

Regulatedvalue

Actualvalue

K-value regulation

7.0

0.37

K-value regulation

9.0

1.52

K-value regulation 17.5

5 or lessSmall boilers*

(0.5)

0.003

Cogeneration engine

0.1

0.052

Fuel sulfur (%)

0.5 or less

Hot water boiler

0.3

0.008

g/Nm3

0.96

Annealing furnace

0.25

0.01or lessg/Nm3

Annealing furnace (small)

0.2

0.01or less

g/Nm3

Calciners

0.15

0.01or lessg/Nm3

Arch furnace

0.1

0.01or less

g/Nm3
*Regulated values are in accordance with the Air Pollution Control Law and local regulations.

*Regulated values of NOx, soot and dust are in accordance with self-regulatory measures, because these boilers are small.

Wastewater
Regulated value according to
the Water Pollution Control Law

Item

Unit

Regulated Actual value
value
Maximum Minimum Average

Regulated Actual value
value
Maximum Minimum Average

Regulated Actual value
value
Maximum Minimum AveragepH

5.8–8.6

5.8–8.6

7.3

7.0

7.2

5.0–9.0

6.5

7.2

5.8–8.6

8

6.8

7.4

BOD

160 mg/r

25

9.2

1.2

6.7

600

170

ND

7

25

4.1

1.1

2.6

COD

160 mg/r

25

7.4

2.2

4.9

600

38

4.7

11.4

120

11

2.7

4

Suspended solids (SS)

200 mg/r

50

10.8

2

5.4

600

170

1.0

4.8

100

20

ND

7.4

Mineral oils

5 mg/r

5

0.6

ND

0.5

5

2.3

1

1.7

5

2.8

ND

0.7

Copper

3 mg/r

3

ND

ND

ND

3

ND

ND

ND

1

ND

ND

ND

Zinc

2 mg/r

2

0.1

ND

0.06

2

0.2

ND

0.14

1

ND

ND

ND

Nitrogen

120 mg/r

20

6.9

4.4

3.0

240

8.8

86.8

60

2

7.85

Phosphorus

16 mg/r

2

0.65

0.25

0.30

32

3.1

ND

0.6

8

0.68

0.07

0.39

Cadmium

0.1 mg/r

0.1

ND

ND

ND

0.1

ND

ND

ND

0.1

ND

ND

ND

Lead

0.1 mg/r

0.1

ND

ND

ND

0.1

ND

ND

ND

0.1

ND

ND

ND

Chromium (VI)

0.5 mg/r

0.1

ND

ND

ND

0.5

ND

ND

ND

0.5

ND

ND

ND

Trichloroethylene

0.3 mg/r

0.3

ND

ND

ND

0.3

ND

ND

ND

0.3

ND

ND

ND

Tetrachloroethylene

0.1 mg/r

0.1

ND

ND

ND

0.1

ND

ND

ND

0.1

ND

ND

ND

Dichloromethane

0.2 mg/r

0.2

ND

ND

ND

0.2

ND

ND

ND

0.2

ND

ND

ND

3 mg/r

3

ND

ND

ND

3

ND

ND

ND

3

ND

ND

ND

1,1,1-trichloroethane

7.7

200

15

*Regulated values are in accordance with the Water Pollution Control Law and local regulations. *ND (“not detected”) indicates a value below the lower limit of detection.
*ND is considered to be the lower limit of detection when calculating the average.
*Other items are confirmed to be below the regulated value.

Major Performance

Data

Environmental impact

Item

Actual value

Item

Actual value

Item

Actual value*Refer to the Relationship between
Business Activities and the Environment(P. 38) for details on the methods used
to calculate amounts.
*Total emissions of waste areexpressed as a composite of theamount recycled (excluding valuables)
and the amount disposed.
*Recycle ratio is calculated by dividing
the amount recycled by the amount
generated.
*Total emissions of BOD and COD are
calculated by multiplying the average
concentration by the amount ofwastewater.

Total CO2 emissions

11,569 t-CO2

Total CO2 emissions

3,375 t-CO2

Total CO2 emissions

73,114 t-CO2

NOx total amount

7,444 kgNOx total amount24,838 kg

NOx total amount

13,532 kg

SOx total amount

4,273 kg

SOx total amount630 kgSOx total amount

14,375 kg

Energy consumption

Item

Actualconsumption

Electricity

13,837 MWh

Heavy oil A

1,624 kr

Kerosene
Light oil*The heat energy conversion factor is
calculated in keeping with theguidelines for calculation stipulatedby the Ministry of the Environment ofJapan in FY1999, which are basedon the Act on Promotion of Global
Warming Countermeasures.

46

Total emissions of waste

1,712 tTotal emissions of waste

358 t

Total emissions of waste

12,898 t

Amount recycled

1,707 tAmount recycled

358 t

Amount recycled

12,731 t

Recycling ratio

99.8 %

Recycling ratio

100 %Recycling ratio

99.4 %

BOD emissions

939 kg

BOD emissions

262 kg

BOD emissions

3,796 kg

685 kg

COD emissions

420 kg

COD emissions

COD emissions

141,159 m3/year

Wastewater

Converted to calorie
equivalents (GJ)

Wastewater

5,412 kg

37,031 m3/year

Wastewater

1,158,465 m3/year

Converted to calorie
equivalents (GJ)

Item

Actualconsumption

Item

Actualconsumption

134,384

Electricity

2,902 MWh

27,821

Electricity

136,078 MWh

1,318,685

63,498Heavy oil A

527 kr20,606

Heavy oil A

2,983 kr

116,635

8 kr

294

Kerosene

0 kr

0Kerosene

1,675 kr

61,473149 kr

5,692

Light oil

161 kr

6,150

Light oil

LPG, et al.

23,925

LPG, et al.

6,878

LPG, et al.

Total

227,793

Total

61,455

Total

0 kr

Converted to calorie
equivalents (GJ)0
144,024
1,640,817

Komatsu House Ltd. (established in 1971)
Shinshiro, Aichi Prefecture

Overview of Komatsu’s Environmental andSocial Activities to Date

Prefabricated structures for businesses

1962
1990
1991

31/10
70
March 2002

1992
1994
1997
1998

Facility

Regulatedvalue

Actualvalue

Boiler250

93

K-value regulation

17.5

0.25

Boiler

0.3

0.03

1999
2000

2001
2002

2003

Regulated Actual value
value
Maximum Minimum Average
5.8–8.6

7.5

6.5

160

14

1.4

6.3

160

67

1.2

16.7

200

9

ND

2.5

5

ND

ND

ND

—

—

—

—

—

—

—

—

120

76

0.6

25.5

16

15

0.2

3.2

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Item

7.0

270 kgSOx total amount

160 kgTotal emissions of waste

167 tAmount recycled

165 t

Recycling ratio

99 %BOD emissions

63 kg

COD emissions

167 kgItem

External Commendations on Environmental Conservationand Social Activities and External Evaluations
2007
Jul.

9,992 m3/year
Actualconsumption

Converted to calorie
equivalents (GJ)Electricity

841 MWh

8,382

Heavy oil A

96 kr

3,754

Kerosene

0 kr

0Light oil

9 kr

T Received Tohmatsu environmental rating of A (38 companies in Japan earning A orabove)
Sep. T Ranked 27th in Nihon Keizai Shimbun newspaper’s 2007 Nikkei Economic Electronic
Databank System—Corporate Appraisal System by Multivariate Statistical Analysis(NEEDS-CASMA) in Japan
Nov. T Selected for the first time for the Excellent IR Companies Award from the Japan
Investor Relations Association
Dec. T Ranked 56th (Komatsu Ltd.), among 520 manufacturers in Japan in Nihon Keizai
Shimbun newspaper’s 11th Nikkei Environmental Management Ratings
2008
Feb. T Received the Minister of Economy, Trade and Industry Award in The Japan
Machinery Federation’s FY2007 (28th Award) for Energy-Conserving Machinery for
its hybrid electric forklift trucks
Mar. T Ranked 1st two years in a row in the Nihon Keizai Shimbun newspaper’s Nikkei PRISM(Private Sector Multi Evaluation System) evaluation of top companies in JapanMay T Hensley Industries, Inc. recognized as Bronze Level member of Clean Texas programin the U.S. (ranking below two Platinum Level and one Gold Level members)
Jun. T Received award from Minister of the Environment of Japan for being a Contributor
to Local Environmental Conservation

Data

812 t-CO2

NOx total amount

2007

2008

Actual value

Total CO2 emissions

Wastewater

2004
2005
2006

T Began continuous support for the Flower Association of Japan since its founding
T Annual Directors’ Caravan for Inter-office Communication launched
T Earth Environment Committee establishedT Company name changed in Japanese public relations to “Komatsu,” with new
corporate brand logotype
T Komatsu Earth Environment Charter and Environmental Action Plan formulated
T First Environmental Report published
T Board of Corporate Auditors established
T Compliance Department establishedT Ethics Committee established
T First edition of Komatsu’s Code of Worldwide Business Conduct published
T Executive Officer system established; Board of Directors reorganized
T Compensation Council established
T All four Komatsu manufacturing facilities acquire ISO14001 certification
T First Global Environmental Affairs Meeting convened
T Environmental Report again published; thereafter, published annually
T Ethics Committee renamed as Compliance Committee
T All seven Komatsu Group manufacturing facilities in Japan acquire ISO14001
certification
T All four Komatsu manufacturing facilities attain zero emissions
T Environmental Affairs Department established
T Komatsu Earth Environment Charter revised
T Corporate Social Responsibility Department established
T First European Health, Safety, and Environment Meeting convened
T GALEO series environment-friendly construction equipment put on the market,
satisfying Tier 3 emission standards, which became effective that year
T Third Global Safety and Environmental Affairs Meeting convened
T All manufacturing facilities in Japan attain zero emissions
T The KOMATSU Way explicitly defined and promotion activities launched
T Seventh edition of Komatsu’s Code of Worldwide Business Conduct publishedT Third European Health, Safety, and Environment Meeting convened
T Environmental education and training conducted for personnel in charge ofenvironmental affairs at Chinese subsidiaries
T FB15HB-12 hybrid electric forklift truck put on the market
T Agreement concluded with Japanese NPO Japan Mine Action Service
T Development of PC200 hybrid hydraulic excavator announced
T ISO14001 integrated certification acquired by the Komatsu Group and all of its
Group companies in Japan

Komatsu Ltd. is included in the Socially Responsible
Investing (SRI) indexes indicated to the right.

359

LPG, et al.

3,423

Total

15,91847

Environmental Data by Manufacturing Facility outside Japan

The Americas
Overview

Manufacturing facilities

CMO

CANDIACPEORIANMO

Komatsu America Corp

KMX

KDB

Hensley

Komatsu
Mexicana S.A. de
C.V.

Komatsu do
Brasil Ltda.

Hensley
Industries, Inc.

Chattanooga
Manufacturing
Operation

Candiac
Manufacturing
Operation

PeoriaManufacturing
Operation

Newberry
Manufacturing
Operation

Location

Tennessee,
U.S.A.

Quebec, Canada

Illinois, U.S.A.

South Carolina,
U.S.A.

Sahagún, Mexico

São Paulo, Brazil

Texas, U.S.A.

Main products

Hydraulicexcavators,
motor graders

Wheel loaders

Large wheel
loaders, large
dump trucks

Utility equipment(small construction
equipment)

Attachments forconstruction andmining equipment

Hydraulicexcavators,
bulldozers

Buckets, teeth,edges andadapters

283

259

502

136

170

713

April 1998

October 1999

March 2002

March 2004

September 2001

January 2002

—

8,462

7,459

20,228

3,763

4,014

36,23436,452
129

Number of employees
Date of ISO14001 certification acquisition
Energyconsumption

Electricity

MWh
kr

328

—

133

—

15

506

Natural gas

thousand m3

1,292

594

2,701

35

—

—

3

LPG, et al.

t

—

—

531

—

Heavy oil, light oil, et al.

LPG

53

LPG

35

LPG

37

LPG

GJ

146,113

49,168288,656

40,27140,646219,165

363,976

t-CO2

7,922

1,218

24,229

2,225

2,183

4,510

20,165

Water consumptiont

16,9895,649

52,205

737

23,30635,07983,664

Total emissions of waste

t

1,617

1,433

3,100

93

5

10,134

26,193

Total energy consumption
Environmental
impactCO2

EuropeOverview

Manufacturing facilities

KUK

KOHAG

KMG

KUE

KFAB

Komatsu UK Ltd.

Komatsu
Hanomag GmbH

Komatsu Mining
Germany GmbH

Komatsu Utility
Europe S.p.A.

Komatsu Forest
AB

Location

Birtley,
United Kingdom

Hannover,
Germany

Düsseldorf,
Germany

Este (PD), Italy

Umeå, Sweden

Main products

Hydraulicexcavators

Wheel loaders,compactors

Ultra-large
hydraulicexcavators

Utility equipment
Forestry(small construction equipment
equipment)

Number of employees

472

581

398

650

377

December 1998

September 2000

July 2002

November 2001

October 2003

MWh

10,030

10,395

7,050

5,182

2,784

kr

1,260

7

8

—

39

Natural gas

thousand m3

1,528

890

1,290

871

—

LPG, et al.

t

—

—

—

—

—

Total energy consumption

GJ

190,772

134,228

114,351

67,205

13,604

Date of ISO14001 certification acquisition
Energyconsumption

Electricity
Heavy oil, light oil, et al.

Environmental
impact

CO2

t-CO2

9,868

7,735

6,507

4,543

248

Water consumptiont

30,716

7,153

16,18015,368

5,462

Total emissions of waste

t

2,161

1,609

5,373

1,867

336

Asia
Overview

Data

KI

BKC

KSC

KCCM

KCF

PT Komatsu
Indonesia Tbk

Bangkok Komatsu L&T-KomatsuCo., Ltd.
LimitedKomatsu Shantui
Construction
Machinery Co.,Ltd.

Komatsu(Changzhou)
Construction
Machinery Corp.

Komatsu(Changzhou)
Foundry
Corporation

Location

Jakarta,Indonesia

Chonburi,
ThailandBangalore, India

Shandong, China

Jiangsu, China

Jiangsu, China

Main products

Hydraulicexcavators,
bulldozers, wheel
loaders

Hydraulicexcavators

Hydraulicexcavators

Hydraulicexcavators

Wheel loaders,hydraulicexcavators, motor
graders

Iron castings andfoundry molds forconstruction andmining equipment

Manufacturing facilities

LTK

718

331

659

420

223

276

June 2000

September 2001

June 1999

December 2000

September 2000

December 1999

MWh

42,291

6,244

9,225

9,380

2,400

22,698

kr

2,988

604

552

1,712

553

835

Natural gas

thousand m3

—

—

—

23

—

—

LPG, et al.

t

102

—

Number of employees
Date of ISO14001 certification acquisition
Electricity
Energyconsumption

Heavy oil, light oil, et al.

LPG

394

LPG

60

LPG

LPG

32 Coal, LPG 8,535

GJ

539,981

93,273

127,634

97,52442,965t-CO2

32,037

6,398

7,950

7,634

3,182

44,640

Water consumptiont99,111

24,33968,656

124,821

41,646

139,000

Total emissions of waste

t

7,603

527

1,219

857

757

17,152

Total energy consumption
Environmental
impact

48

534

CO2

Notes 1. All data, except the number of employees, were derived from performances of all manufacturing facilities during FY2007.
The number of employees was based on the companies’ data as of March 31, 2008.
		 2. Conversion to CO2 and total energy consumption were based on statistical data of each region, country, and that of IEA for 2000.
		 3. Total emissions of waste are expressed as a composite of the amount recycled and the amount disposed.

541,941

Independent Review on Environmental & Social Report 2008

Regarding the Independent Review
Komatsu views the independent review
process as crucial for ensuring the integrity and objectivity of its Environmental &Social Report. For that reason, Komatsu
has received an independent review from
Deloitte Tohmatsu Evaluation and Certification
Organization Co., Ltd., a member of theDeloitte Touche Tohmatsu Group. The results
are as represented below with regard to theinformation appearing in the Environmental &Social Report 2008.
http://www.teco.tohmatsu.co.jp/

Supplementary Explanation regarding the Conducting of Independent Review Procedures
As a supplementary explanation, the following provides an overview of the review procedures conducted during an independent review.
Supplementary explanation regarding independent review procedures
Step 1

Step 2

Step 3

Step 4

Step 5

Formation ofplan for review
process

Execution ofreview

Reporting on
review results

Check of final
version ofreportSubmission of
independent
review report

TReporting results ofreview (revisions andsuggestions)

TFollow-up on issues
identified during
Step 3

TSubmission of
independent review
reportTConfirmation of items
to be included in thereport(1) Scope of information(2) Information collection
process(3) Information collection
method(4) Level of importance ofindividual pieces of
information

TReview of offices andpersons in charge
TInspections ofbusiness units

TFinalization of items to
be reviewed and review
methodology

Executing a review at the
Head Office

Executing a review at the
Oyama Plant

Supplementary explanation
regarding site visits tobusiness units
1. Business units visited inthis review:•Komatsu Ltd. Head Office•Oyama Plant•Koriyama Plant
2. Visits to business units takeplace in a planned rotation.
Records for business units
not visited during thisreview were reviewed at
the Komatsu Ltd. Head
Office.

Executing a review at the
Koriyama Plant

Data

Notes from the Editor
nEditorial Policy for the FY2008 Report
Komatsu published its first Environmental Report in 1994 and its secondin 1997. Since FY2000 the company has published this report annually.
Beginning with the FY2004 report, Komatsu changed the title from theEnvironmental Report to the Environmental & Social Report. Komatsu
has been publishing this report to both fulfill responsibilities to the greater society and conserve the global environment. Each of these areas
ranks among Komatsu’s top managerial priorities.
The FY2008 report again includes “Special Stories,” which first
appeared in the FY2007 edition. One discusses the environment andother covers social contributions, making the report more interesting forthe reader. Komatsu has also made the report easier to understand byhaving articles on environmental activities cover particular objectives,
such as mitigating climate change, creating a sound material-cycle
society, and minimizing environmental risks and by separating the Datasection from the main articles.

nPeriod Covered
This report covers the data for the period from April 1, 2007 to March
31, 2008 as a general rule. However, a portion of the report touches
upon the period after April 1, 2008.
nGuidelines Used
T “Environmental Report Guidelines 2007” (Ministry of the Environmentof Japan)T “ The 2006 Sustainability Reporting Guidelines” (Global Reporting
Initiative [GRI])nSubsequent Reporting Schedule
T Japanese and English versions: Expected July 200949

Komatsu Environmental & Social Report 2008

Part of this pamphlet (from page 1 to48) was printed using “Morino ChonaiKai Forest Thinning Support Paper,” theresult of a partnership between Office
Chonai-Kai, an environmental nonprofit
organization working to support usedpaper recycling, and Iwate Prefecture’s
Iwaizumi-cho municipality, which is
working to promote forest restoration.

Komatsu has been participating in the national movementin Japan to mitigate climate change known as “TeamMinus 6%.”This report was printed using soy ink.

CSR Department and Environmental Affairs Department
2-3-6, Akasaka, Minato-ku, Tokyo 107-8414, Japan
Komatsu website
http://www.komatsu.com/CompanyInfo/csr/
Komatsu welcomes your comments.
E-mail: kankyo@komatsu.co.jp
CSR Department
TEL: +81-3-5561-2616
FAX: +81-3-3505-9662
Environmental Affairs Department
TEL: +81-3-5561-2646
FAX: +81-3-3582-8332

HEER080808 Printed in Japan

Environmental & Social Report 2008