Environmental Accounting“Environmental accounting” is a tool for ascertaining the cost and effect of a company’s environmental
activities for use within the company’s routine operations. At the TEL Group, we have decided toadopt an environmental accounting system to quantitatively ascertain the costs associated with ourenvironmental conservation activities and utilize them as gauges of corporate activities.
Fiscal year 2000 marked the second year since the introduction of our environmental accounting
system. Following up on the experiences of fiscal year 1999, when the system was run on a trial basis,
we attempted to extend the scope of the tabulation of environmental accounting data. We intend tomaintain these sorts of environmental conservation activities in the future as well.

■ Fiscal Year 2000 Results
Our fiscal year 2000 environmental costs (investment amount and expense amount) are tabulated
below. The numbers apply to TEL Group domestic plants. Costs for the depreciation of capital
equipment cover purchases made since fiscal year 1999.
In fiscal year 1999, environmental costs included business area cost, management activity costs,
and social activity costs. In fiscal year 2000, an effort was made to include all costs associated withenvironmental conservation. However, it should be noted that results for upstream/downstream
costs are based mainly on branch office information, while research and development costs
represent costs associated with some equipment only.

■ Future Issues
We aim to provide even more accurate environmental conservation costs in the future. Further
consideration needs to be given to calculating upstream/downstream costs and research anddevelopment costs. Furthermore, from the standpoint of the effective utilization of management
resources, it is also necessary to quantify improvements in environmental performance and toascertain their costs and effects. We plan to formulate an approach to ascertaining results and toundertake to quantify results in monetary terms based on this approach.

■ TEL Group’s Environmental Costs
Environmental Preservation
Cost Classifications(FY2000 results in thousands of yen)

Main Activities

Itemization

1. Business area cost

Investment
amountExpenseamount408,264545,705

1.1 Pollution prevention costs

air pollution, water pollution, soil contamination, etc.

142,430

154,066

1.2 Global environmentalcosts

climate change prevention, ozone layer depletion
prevention , etc

165,991

70,8881.3 Resource circulation costs

efficient use of resource, waste reduction, etc.

99,843

320,751

021,441

432

112,966

2. Upstream/downstream costs

green purchasing, green procurement, etc.

3. Management activity costs

environmental education, monitoring and measuring
environmental impacts, etc.

4. Research and development costs

product R&D, etc.

5. Social activity costs

green purchasing, green procurement, etc.

6. Environmental damage costs
7. Other costsTotal

02,4476,500

44,148

repairing damage to the natural environment, andthe like.

00others

00415,196

726,707*Environmental costs include the total amounts for all ascertained costs

■ Major Environmental Costs
Below are several examples of the TEL Group’s major environmental costs.
• Business area cost:(1) Pollution prevention costs: installation of abatement equipment, wastewater neutralizationequipment maintenance expenses, and the like(2) Global environmental costs: installation of equipment for removing chlorofluorocarbons, andthe like(3) Resource circulation costs: installation of kitchin garbage-disposal equipment, expenses involved in reducing and disposing waste, and the like
• Upstream/downstream costs: hybrid car lease and maintenance costs, purchase of environmentally-friendly products, and the like
• Management activity costs: environmental measurement expenses for air/water pollution, soil contamination, etc., environmental education expenses, and the like• Research and development costs: research and development aimed at reducing environmental impact of cleaning systems, and the like• Social activity costs: afforestation expenses, and the like■ Breakdown of Investment Expenditures
Breakdown of Investment Expenditures
Social activity costs
1.6%
Resource
circulation costs
24.0%Managementactivity costs
0.1%
Global evironmental
conservation costs
40.0%

Pollution
prevention costs
34.3%

Global environmental conservation costs
climate change prevention, ozone layer depletion prevention, etc.

Pollution prevention costs
air pollution, water pollution, soil contamination, etc.

Resource circulation costs
efficient use of resource, waste reduction, etc.

Social activity costs
afforestation, support for local environmental activities,
environmental information disclosure, etc.

Management activity costs
environmental education, monitoring/measuring of environmental
impacts, etc.

■ Breakdown of Expenses
Breakdown of Expenses
Resource circulation costs
Upstream/downstream costs
3.0%
Sosial activity costs
6.1%
R&D costs
Global environmental
conservation costs
9.8%
Managementactivity costs
15.5%

Pollution
prevention costs
21.2%

0.3%

efficient use of resource, waste reduction, etc.

Pollution prevention costs
air pollution, water pollution, soil contamination, etc.

Management activity costs
environmental education, monitoring/measuring of environmentalimpacts, etc.

Resource
circulation costs
44.1%

Global environmental conservation costs
climate change prevention, ozone layer depletion prevention, etc.

Social activity costs
afforestation, support for local environmental activities,
environmental information disclosure, etc.

Upstream/downstream costs
green purchasing, green procurement, and the likeR&D costs
product R&D and the like