Hitachi Group
Corporate Social Responsibility Report 2008

Contents

001

To Our Stakeholders

049

Awareness of Social Issues

050

Educational Initiatives

002

commitment Message from the President

053

Environmental Initiatives

004

vision Hitachi’s CSR Vision

055

Social Welfare Initiatives

007

dialogue Hitachi’s Environmental Strategy

056

Six Foundations Promote Diverse Activities

010

activities Hitachi Embraces the Challenge of Reducing CO2 Emissions

058

Partnerships with NPOs

060

Support for Volunteer Activities

016

CSR Management

		 CSR Activities of the Hitachi Group
Corporate Governance061

Collaborative Creation with Suppliers

061

Sharing CSR Awareness

061

Implementation of Survey of Suppliers’ CSR Promotions

017

Strengthening Governance062

Promoting the Use of Environmental Management Systems by Suppliers

018

Internal Control

063

Partnerships

019

Group Management

064

Improving Supplier Relations with an Open-Door Policy

020

CSR Promotion Activities

065

017

Employees: The Key to Hitachi’s Future020

Toward Realization of the Three-Year Roadmap

065

Creating a Work-Friendly Corporate Culture022

Full Implementation of the CSR Policy

065

Openness: Promotes the Expression of Employees’ Full Potential

Compliance and Risk Management065

Challenge: Supports Growth024

Compliance Framework

067

Diversity : A Base for the Healthy Expression of Individuality

024

Compliance Education

071

Securing the Health and Safety of Employees

026

Protecting Personal Information and Information Security

073

Supporting Enriched Lives for Employees and Their Families

027

Export Control

028

Risk Management

024

029
029

Risk Response for Employees and Families
Protecting Intellectual Property

075

Next Eco

		 Environmental Action for a Sustainable Society
076

Eco-Mind & Global Environmental Management

030

Respect for Human Rights

076

Environmental Awareness and Action

030

Human Rights Policy

077

Emission Neutral

030

A Total Commitment to Human Rights Awareness079

Environmental Action Plan and Achievements032
		

Next Society
Hitachi: Living Together with Society
Monozukuri and Services from the Customer’s Perspective

080

Environmental Management System

081

GREEN 21 Evaluation System Activities

082

GREEN 21 Awards

085

Environmental Education

033

Toward the Strengthening of Monozukuri

085

Environmental Accounting

035

Quality Assurance (QA) Activities

089

Environmental Impact Data for Corporate Activities

040

Building Customer Feedback into Our Products

090

Next-Generation Products & Services

Universal Design090

Expanding Lineup of Eco-Products

095Managing Chemical Content of Products

033

042
045

Communication with Shareholders and Investors

045

Policy on Information Disclosure

096

Supporting Global Ecodesign046

Proactive IR Approach096

Sustainable Business Model

047

General Meeting of Shareholders

099

Super Eco-Factories & Offices

047

Basic Policy for Prevention of Takeovers

099

Super Eco-Factories and Offices

048

Results of External SRI Assessments in Fiscal 2007

100

CO2 Reduction in Production Processes

102

CO2 Reduction in Offices and Other Buildings049

Working in Harmony with Local Communities

103

Increasing Transportation Efficiency

104

Management of Chemicals

106

Efficient Use of Resources

109

Worldwide Environmental Partnerships

109

Environmental Communication

110

Participation in Exhibitions

111

External Environmental Commendations

112

Company Profile

		 Hitachi Group Profile
		 Economic Performance

115

Comparative Table with GRI Guidelines

123

Indexes by Category

123

Policy, Vision, and Guidelines

124

Organization and Management

125

Systems

126

Educational and Awareness-Raising Activities

127

Result Data

128

Stakeholder Feedback

129

Inquiries

Reporting the CSR Activities of the Hitachi Group
Information about CSR activities in fiscal 2007 (April 2007–March 2008)
is available in two formats: Hitachi Group Corporate Social Responsibility
Report 2008, a PDF that can be accessed on the Web, and Hitachi Group
Corporate Social Responsibility Report 2008 Digest. The PDF edition
contains comprehensive information on policies, actual programs, andquantifiable results. The digest focuses on reporting areas of activity the
Hitachi Group has particularly emphasized.

Reporting the CSR Activities of the Hitachi Group

http://www.hitachi.com/csr/
Detailed
information

Hitachi Group
Corporate Responsibility
Report 2008

PDF

The address of the CSR section of the Hitachi, Ltd. Web site iswww.hitachi.com/csr/

DigestbookletCharts, graphs, and other illustrative materials have, based on the conceptof Universal Design, been presented for optimum legibility for people whohave difficulty with color perception.

Latestinformation

CSR (corporate social responsibility)
section of the Hitachi, Ltd. Web site

Hitachi Group
Corporate Responsibility
Report 2008 Digest

To Our Stakeholders
Using the Corporate Credo “contributing to society through the development of superior originaltechnology and products,” Hitachi has contributed to the resolution of various social problems—with the support of our stakeholders—from our foundation to the present. Now that social issues,
like corporate activities, have become global, corporations are playing an increasingly importantrole in the realization of a sustainable society. Hitachi aims to bring about a society where people
can live in comfort and safety within a better global environment. To realize this type of society, we
will continue to take up the challenge of resolving the fundamental problems of a global society,making full use of the Hitachi Group’s knowledge, know-how, and experience.
This report provides our stakeholders with an account of the activities and initiatives that Hitachi
considers most important for a company with a deep sense of social concern and responsibility.
In particular, we focus on global environmental problems of great concern throughout the world,
describing Hitachi’s initiatives and future direction. In addition to this report, we have posted moredetailed information on the Web site to promote a deeper understanding of these issues and ourrole in their resolution.
Through this report and the Web site, we hope to engage in an ongoing dialogue with you.
July 2008

Etsuhiko Shoyama

Kazuo Furukawa

Chairman of the Board

President and Chief Executive Officer

Scope of This Report
Period:		Companies:		
Scope of data:
Financial data		Social data
Environmental data

The main period covered is fiscal 2007 (April 1, 2007 through March 31, 2008)
Companies covered under consolidated reporting of the Hitachi Group
Hitachi, Ltd. and 911 consolidated subsidiaries (including modified entities to which the equity method of consolidated reporting applies)
and 171 affiliated companies that use the equity method
Scope of data indicated under each item
Hitachi, Ltd. and 249 consolidated subsidiaries (including companies outside Japan)

Related Reports
We report on the financial performance of Hitachi, Ltd. in the “Financial Highlights” and Annual Report. Research and development and intellectual property (intellectual
property rights and brands), which are major aspects of the technology management of Hitachi, Ltd. and its major subsidiaries, are covered in the “R&D and Intellectual
Property Report.”
Twenty-one Hitachi Group companies and 13 business divisions and production facilities publish their own reports on environmental and social contribution activities.
In addition, 44 Hitachi Group companies and 8 business divisions and production facilities provide information on their Web sites.
Guidelines Referred to in Preparing This Report“Environmental Reporting Guidelines” (FY 2007 version), Ministry of the Environment, Japan“Environmental Performance Indicators Guideline for Organizations” (FY 2002 version), Ministry of the Environment, Japan“Environmental Reporting Guidelines 2001—With Focus on Stakeholders,” Ministry of Economy, Trade and Industry, JapanGRI Sustainability Reporting Guidelines 2006, Global Reporting Initiative* This CSR Report is published on an annual basis.

List of companies included in the scope of the environmental data
http://www.hitachi.com/environment/activities/more/companylist.html

001commitment

Message from the President
Looking to Tomorrow, Hitachi Works to Address the Issues of Today

Some 40 years ago, when the telephone network in Japan was limited, I worked as a new Hitachi
employee on developing the country’s automated telephone switching systems. Installing automatic
switchboards took me to places all over Japan, and waiting at the end of my stay at each job were
the happy smiles of people who could now connect calls without a switchboard operator. This
unforgettable experience was the starting point of my commitment to CSR.
Recently, I have made frequent visits to nations throughout Africa and Asia. Many times I haveseen people suffering there because of poverty, especially the problems these communities facewith the lack of food and water resources. Looking across the world, I see many regions that lackan adequate social infrastructure. When I remember those happy smiles some 40 years ago, I
am committed now more than ever that in countries where Hitachi is expanding I would like tocontribute—if only in a small way—to efforts that solve these problems. I firmly believe that our
corporate management will enable us to pursue the sustainable development of society and ourcompany as complementary goals.

Using Our Combined Resources to Lessen Environmental Problems
I believe that CSR has three core components: sustainable development, the environment, andhuman welfare. If problems associated with these three components are not solved in a balanced
way, I think true happiness and sustainability for humankind as a whole cannot occur. As theworld’s population has grown dramatically over the past 100 years, the concentration of CO2 in
the atmosphere has similarly increased. I feel strongly that today—when it is clear that climatechange resulting from increased CO2 emissions presents serious challenges to sustainable socialand economic development—the time has come for us to combine our resources to work for theprotection of the global environment.
The Intergovernmental Panel on Climate Change (IPCC) has said that if global temperaturesrise by 2050 to a level that exceeds temperatures in the pre-Industrial era by 2°C, there will be
a profoundly negative impact on the Earth’s climate. To prevent this, the IPCC believes it will benecessary by 2050 to stabilize CO2 concentrations to below 450 ppm.
In December 2007, the Hitachi Group announced Environmental Vision 2025, a plan that set
the ambitious goal of contributing to the IPCC target by helping to reduce CO2 emissions from theuse of Hitachi Group products worldwide by 100 million tons before 2025. Reaching this goal will
require us to vigorously promote monozukuri (manufacturing that combines innovative technologies
with experience gained over many years) and to convert—to a high degree—all of our products into
solutions that are compatible with the environment and confront the greatest ecological challengeof our time.
The Hitachi Group has already provided the world with a large number of technologies
that meet this standard, including technologies for nuclear power generation, as well as forsupercritical pressure coal-fired power generation that is highly effective at reducing a coal power
plant’s negative environmental impact. Additional examples of environmental protection solutions
from Hitachi include superconducting high-efficiency power transmission using amorphous

Hitachi Group Corporate Social Responsibility Report 2008 | commitment | Message from the President 002

transformers, hybrid drive systems that reduce CO2 emissions from diesel rail engines, lithium-ion
batteries for hybrid cars, and power saving innovations for energy-intensive data centers.
The rate of increase for global warming is exceeding projections. To protect the environment,
including reducing global warming, I would like, as quickly as possible, to execute our plan so thatthe world will say, “Hitachi’s determination and actions have indeed positively altered the course ofcurrent trends.”

Toward a Sustainable Society: Social Trends and Management Approach
As globalization progresses, there are many Group employees working in every region of theworld. At the same time, the number of stakeholders has increased, making it more important
than ever to have dialogues with them and to enhance management transparency. I will align theGroup’s management approach with social trends and stakeholder needs, and by doing this, build
the foundation for both business and society to achieve sustainable development.
I would also like to work to ensure that Hitachi employees worldwide, who support both thecompany’s businesses and their families, can lead happy lives now and in the future. To accomplishthese goals, I hope to promote the creation of a workplace environment where every employee
can be healthy in body and mind, make full use of their talents, and appreciate the challenges andrewards of social activities, such as work- and community-based volunteering.
History will come to recognize the value of what we do. It is with this sense of conviction andurgency that I wish to take on these challenges and enthusiastically move forward with my work,
while cherishing the feeling of joy that comes from seeing the smiling faces of happy people.
July 2008

Kazuo Furukawa
President and Chief Executive Officer
Hitachi, Ltd.

Hitachi Group Corporate Social Responsibility Report 2008 | commitment | Message from the President 003

vision

Hitachi’s CSR Vision
Hitachi is tackling the basic issues faced by global society, aiming to realize
a sustainable world through innovation

The vision of the Hitachi Group is to realize a world that is safer and more comfortable to live inby harnessing our knowledge and technologies to resolve the basic issues facing global society,based on the Fundamental Credo.
In fiscal 2007, referring to the social issues being discussed in Japan and around the world,
including the United Nations Millennium Development Goals and the World Business Council for
Sustainable Development, we conducted a review of the relationship between the problems faced
by global society and Hitachi’s business and social contribution activities. We identified areas
where our strengths could be fully utilized, including the global environment, safety, and health andmedicine. In response to global environmental issues, we formulated Environmental Vision 2025,
and members of the Hitachi Group resolved to work closely together to achieve our objectives.
In fiscal 2008, through dialogue with our diverse range of stakeholders, we will strive to havemore stakeholders’ voices reflected in our management approach and projects in order to promote
CSR activities that accord with the best direction for society as a whole.
Fundamental Credo
The basic credo of Hitachi is to further elevate its founding concepts of harmony, sincerity and pioneering
spirit, to instill a resolute pride in being a member of Hitachi, and thereby to contribute to society through thedevelopment of superior, original technology and products.
Deeply aware that a business enterprise is itself a member of society, Hitachi is also resolved to strive
as a good citizen of the community towards the realization of a truly prosperous society and, to this end, toconduct its corporate activities in a fair and open manner, promote harmony with the natural environment,
and engage vigorously in activities that contribute to social progress.
(Adopted June 1983, revised September 1996)
Hitachi Group Vision
We will contribute to the solution of fundamental global issues, and pursue the realization of a better,more prosperous global society, in line with Hitachi’s founding spirit, utilizing the Group’s knowledge andtechnology.
(Adopted January 2006)
CSR Policy of the Hitachi Group
1. Commitment to Corporate Social Responsibility (CSR)
The Hitachi Group, including all its executives and employees, recognizes CSR as a vital part of corporate
activity and is therefore committed to a course of social responsibility in accordance with this CSR policy forthe sustainable development of society and business.
2. Contribution to Society through Our Business
The Hitachi Group will contribute to the building of a prosperous and vibrant society by providing safe, highquality products and services through business activities based on its excellent research, technology andproduct development.

Hitachi Group Corporate Social Responsibility Report 2008 | vision | Hitachi’s CSR Vision 004

3. Disclosure of Information and Stakeholder Engagement
The Hitachi Group will disclose information openly and transparently in order to maintain and develop a
relationship of trust with its various stakeholders, and act responsibly towards them through various meansof communication.
4. Corporate Ethics and Human Rights
The Hitachi Group will undertake its business based on the principles of fairness and sincerity, act with theutmost respect for human rights and pursue a high sense of corporate ethics in the global business market
which encompasses diverse cultures, morals, ethics, and legal systems.
5. Environmental Conservation
The Hitachi Group will strive to minimize environmental effects and utilize resources towards the developmentof a sustainable society that is in harmony with the environment.
6. Corporate Citizenship Activities
The Hitachi Group will promote social contribution activities as a good corporate citizen in order to realize abetter society.
7. Working Environment
The Hitachi Group will make every effort to create a pleasant and motivating working environment for all its
employees and to fully support those employees who desire self-fulfillment and self-development throughtheir work.
8. Responsible Partnership with Business Partners
The Hitachi Group will make every effort to promote fair and sound business practices among our business
partners by fostering a common awareness of social responsibility.
Adopted March 2005
(For the specific plans and achievements of each policy, see page 22)

Hitachi’s Response to a Third-Party Expert Opinion on Our CSR Activities
Third-Party Expert Opinion—Essential “Communication Reform”
First, as part of Hitachi’s promotion of CSR communication, I appreciate the idea of dividing theinformation provided between the printed medium with a limited number of pages and the electronic
medium, where more detailed information is provided. Furthermore, I enjoyed the organizationof the printed report, which is simple and easy to understand and contains many officers’ andstakeholders’ opinions. While I also appreciate the description of how Hitachi is tackling its mostimportant CSR tasks, I would like to know more about the actual investigation process and whatrole the opinions of stakeholders play in the identification of issues. I think Hitachi is required toshow clearly how it views our greatly changing world, avoiding risks and turning them into business
opportunities. I understand that this year’s report is in the process of change, but I think moreessential “communication reform” may be needed. If Hitachi adopts the approach of determining
its methods based on each target, I believe the quality of its CSR communication will improve.

Peter D. Pedersen
Chief Executive, E-Square Incorporated

Peter D. Pedersen

Chief Executive of E-Square Incorporated, a CSR and environmental consulting firm, known for his pioneering role in bringing the Lifestyles of Health and Sustainability(LOHAS) movement to Japan. Born in Denmark, since graduating from the University of Copenhagen with a degree in cultural anthropology he has worked as acorporate consultant specializing in environmental and management consulting and international symposia aimed at small and medium-sized businesses. He becamepresident and CEO of E-Square in 2000.

Hitachi Group Corporate Social Responsibility Report 2008 | vision | Hitachi’s CSR Vision 005

Hitachi’s Response—Raising the Quality of Dialogue with Society
For last year’s CSR Report we received various opinions from readers, saying that there were
too many pages, that the important message was difficult to understand, or that the information
disclosed was not enough. Based on this feedback, in addition to reducing the number of pagesby half and making the report easier to understand, we produced this digest featuring the global
environmental problems that Hitachi is particularly focusing on, while providing more detailed
information in a PDF file. We are developing new systems that address these issues: the process
for investigating important issues reflecting the opinions of stakeholders, as well as the risk
avoidance and converting risk into business opportunities pointed out by Peter D. Pedersen. We
hope to report the results from next year onwards. For example, we are promoting dialogues withsociety on a global level and investigating important issues that have a deep impact on society
and management. We are also striving to have this information reflected in management decision
making and to disclose related information.

Masahiro Hayashi
Executive Vice President and Executive Officer,
and Chair of the CSR Promotion Committee, Hitachi, Ltd.

Hitachi Group Corporate Social Responsibility Report 2008 | vision | Hitachi’s CSR Vision 006

dialogue

Hitachi’s Environmental Strategy
Thinking about the future of the environment—
Hitachi contributes to reducing CO2 emissions
by 100 million tons in at least one year by 2025

From Environmental Vision 2015 to Environmental Vision 2025
In December 2007, we set out our environmental management and business strategies inEnvironmental Vision 2025. Through Environmental Vision 2015, formulated in 2006, we havepromoted activities aimed at becomng “emission neutral”—balancing the direct environmental
impact with a lower indirect social environmental impact—by fiscal 2015. (See page 79.)
Environmental Vision 2025 was formulated with the aim of further lessening the social
environmental impact that contributes to reducing CO2 emissions from Hitachi Group products by
100 million tonnes in at least one year by 2025.
Key Points of Environmental Vision 2025
Strengthening Measures to Counter Global Warming• Reduce CO2 emissions from the use of Hitachi products by 100 million tons in at least one year before
2025
Strengthening Hitachi’s Environmental Businesses• Work to make all Hitachi Group products Eco-Products by 2025
• Use the Hitachi Group’s total technological strengths to pursue environmental efficiency for all aspects ofour business, including materials, parts, components, products, systems, services and solutions• With the global market in mind, develop global warming prevention technologies, invest to strengthenbusinesses, and promote collaborative projects with other organizations
Reinforce overall CSR activities by integrating environmental efforts with other aspects of social
contribution activities

Hitachi’s Approach to Achieving the 2025 Emissions Reduction Target(100 million
tons per year)

Global CO2 emissions extension scenario
Global CO2 emissions halving scenario (compared with 2000)

500

420
400
300

Including the 100 million ton
CO2 emissions reduction
from Hitachi Group products

226

200

230
113

100
0

Target for halving
CO2 emissions

1990

2000

2010

2020

2030

2040

2050 (year)

Source: IEA (International Energy Agency), World Energy Outlook 2007

Hitachi Group Corporate Social Responsibility Report 2008 | dialogue | Hitachi’s Environmental Strategy 007

dialogue
Takashi Hatchoji, Chief Environmental Strategy Officer of the Hitachi Group, asked Junko Edahiro,
President of e’s Inc., about her expectations regarding corporate engagement with environmental
issues.

Photo right: Junko Edahiro is an environmental journalist and translator engaged in speaking, writing and translating on environmental issues. Ms. Edahiro is amember of the Cabinet Secretariat’s Council on the Global Warming Issue and a visiting researcher at the University of Tokyo’s Research into Artifacts, Center forEngineering (RACE).
Photo left: Takashi Hatchoji is Chief Environmental Strategy Officer of Hitachi, Ltd. and President of the Hitachi Research Institute.

Bringing Environmental Vision 2025 into the Actions of Every Hitachi Employee
Hatchoji: Ms. Edahiro, you are well known as the Japanese translator of Al Gore’s An Inconvenient
Truth, and you have consistently offered proposals to address global environmental problems fromthe citizens’ perspective. To begin with, please tell us what is expected of corporations.
Edahiro: I see the global environmental problem as a problem of human happiness. Our way of life
has been to work at companies, receive money for our labor, and use this to buy things to realize
happiness. But today, the more we buy the worse the global environment becomes, and that
leads to unhappiness for ourselves and for our descendants. I want enterprises to deeply consider
what actions they should take to create happiness for both present and future generations. In thatsense, Environmental Vision 2025 draws my attention as a longer-term plan for the Hitachi Group.
Hatchoji: The Japanese government is advocating the Cool Earth 50 initiative to halve CO 2
emissions and other greenhouse gases by 2050. From the perspective of corporate activities,
however, nearly 50 years is too long a time. So Hitachi prepared Environmental Vision 2025 toset interim goals for the year 2025, focusing on three approaches: First, we want to contribute tosociety through our business activities. Specifically, Hitachi contributes to reducing CO2 emissions
from the use of our products by 100 million tons a year. Next, we intend to strengthen management
to build more harmonious relations with society. Finally, we want to share our environmental
understanding through active communications.
Edahiro: Reducing CO2 emissions by 100 million tons a year is symbolically important, but thatfigure is difficult for the average person to grasp. Also, to really establish your plan as a vision
shared throughout your organization you may find it necessary to speed up building a framework
for every employee to adopt CO2 reductions as their own issue.

Hitachi Group Corporate Social Responsibility Report 2008 | dialogue | Hitachi’s Environmental Strategy 008

Hitachi Should Take the Position of Going beyond Technology
Hatchoji: The Japanese government has made innovation one of the main pillars for addressing
global environmental problems, and has identified 21 revolutionary technologies required to achieve
CO2 emission targets. Hitachi has experience and knowledge in most of these technologies. I am
always keenly aware that, in addition to technological progress, the most important thing is to havenew technologies adopted by society.
Edahiro: The first point I want to make is that there are limits to what technology can do to solve
environmental problems. People’s expectations for technology have been growing every year, but
it is important to explain the distinction between what technology can and cannot accomplish.
Otherwise, there is a real risk that people will eventually lose their trust in corporations pursuing
technological development. From now on, companies should work to accurately convey both thepotential and the limits of technology. What’s more, from the perspective of spreading technology,
it will become necessary to change the assumptions that technologies are based on.
Hatchoji: What do you mean by changing the assumptions?
Edahiro: One example is viewing carbon emissions as liabilities, which began as a proposal by
European financial institutions. Japanese enterprises often say “the customer is king,” but in somecases seeing only from the customer’s viewpoint results in a short-term perspective that will not
move society forward. I think we need to make an effort to change the viewpoint of society itself by
asking such questions as, “What do we want for the future of the earth?” and “What must we do
now to achieve it?”Hatchoji: Given the demands for greater corporate interaction with society, we need to view
and promote our corporate statement “Inspire the Next” with renewed feeling. I also think that“co-creative partnerships,” in other words collaboration across organizations, will become
immensely important in the future. It should be possible to accomplish a great deal throughcollaboration that transcends enterprise boundaries. I expect breakthroughs by working together
with external research institutes and rival companies, as well as the spread of technology throughteamwork with customers and research centers.
Edahiro: Yes, there are times when one times one equals three or even four. I expect Hitachi tocontinue building up such strategic relationships.
After the Dialogue
Hatchoji: I found Ms. Edahiro’s opinions on what the public expects from corporations to be very
helpful. I was reminded of our responsibility as a global corporation to propose new businessmodels in line with our vision for the future of society, and the importance of broadly conveying ourcorporate approach from the perspectives of our stakeholders. Hitachi will continue pursuing ideal
environmental management while advancing our environmental strategies.

Hitachi Group Corporate Social Responsibility Report 2008 | dialogue | Hitachi’s Environmental Strategy 009

activities—Hitachi Embraces the Challenge of Reducing CO2 Emissions (1)Generating Electricity
Clean coal-fired thermal power generation
to support tomorrow’s electricity supply

R&D staff at the integrated research facility for combustion and flue gas treatment research,
Babcock-Hitachi K.K. Kure Division, Akitsu Works, Hiroshima Prefecture, Japan

Coal Attracts Renewed Interest as an Energy Resource
The IEA (International Energy Agency) estimates that about 1.6 billion people still live without
electricity. Total electricity consumption is projected to rise sharply with the economic growth andinsatiable demand of developing nations.
So, what types of energy will support this increase in global energy consumption? The IEA,
estimating future electric power generation by energy source, projects that coal-fired thermal
power generation will continue to rise and reach 46 percent of total electric power generation in
2030.
The greatest reason for this growth is that coal is a resource with a stable supply. Coal reserves
are plentiful and distributed across many regions. If resource extraction continues at today’s rate,
we may run out of oil in 41 years and natural gas in 61 years, but there are coal reserves for
155 more years, providing a stable supply into the future. With advances in denitrification anddesulfurization technologies, which remove the nitrogen oxides (NOx) and sulfur oxides (SOx) thatcause acid rain, coal has been attracting renewed attention as a resource for the stable supply ofcomparatively low-priced electricity.

Toward More Efficient Coal-Fired Electric Power Generation
It is, however, also essential to address the emissions issue because large quantities of CO2
are released when generating electric power from coal, which is a fossil fuel. Hitachi has beenworking to improve the efficiency of coal-fired thermal power, seeking to reduce CO2 emissions bygenerating more electricity from a smaller amount of coal.
Coal-fired thermal power plants burn pulverized coal inside boilers to generate steam, providingpressure to rotate steam turbine generators. In this process, the electricity generation efficiency
increases as the steam temperature and pressure rises. The technology called supercriticalpressure thermal power generation is based on this fact. Hitachi has succeeded in commercializing
ultra-supercritical pressure thermal power generation with steam at a world-record temperatureand pressure of 620°C and 25 MPa (250 times atmospheric pressure).
This technology has improved transmission end (net) efficiency (an indicator of the percentage

Hitachi Group Corporate Social Responsibility Report 2008 | activities | Hitachi Embraces the Challenge of Reducing CO2 Emissions 010

of input energy converted into electric power) from 30 percent to 42 percent, reducing CO2
emissions by approximately 20 percent compared with conventional power plants. Hitachi is
now working to further increase the steam temperature to 700°C to achieve a transmission end
efficiency of 48 percent.

Analysis Technologies Support Reliability
It normally takes 36 months from the start of contruction to completing a thermal power plant. In
other words, three years is needed to prove new technologies. To overcome this limitation, Hitachi
has been developing analysis technologies for computer simulations of the combustion conditions
inside boilers. Hitachi’s simulations showing the combustion of pulverized coal are among the mostprecise in the world. Extremely reliable boilers that can withstand ultra-high pressures are a key
component for ultra-supercritical pressure steam power generation. These analysis technologies
have made Hitachi a pioneer in this field.
Since the early 1980s, Hitachi has been accumulating technologies for future coal-fired
thermal power generation. Hitachi’s 40 percent market share for denitrification and desulfurizationequipment demonstrates this. The Hitachi Group has constructed eight ultra-supercritical pressure
thermal power generation plants in Japan and 21 overseas, including the Walter Scott, Jr. Energy
Center Unit 4 in the U.S., making Hitachi a world leader.
Together with J-POWER and the Chugoku Electric Power Co., Inc., we have begun working
on the commercialization of integrated coal gasification combined-cycle power generation, which
gasifies coal as a fuel to turn gas turbines but also turns steam turbines using exhaust heat. We
are also working to develop exhaust gas CO2 recovery technologies through this joint project.
Coal burning technologies brought about the Industrial Revolution and remain indispensablefor our daily lives. Hitachi will continue striving to develop innovative technologies for the future,sustainable use of coal consistent with the needs and expectations of our stakeholders.

Walter Scott, Jr. Energy Center Unit 4

Electric Power Generation Plants (1970–2030)		
Energy supply
composition ratio(2005–2030)

Average annual
growth rate(TWh)

16,00012,0008,000’71–’05 ’05 – ’30
Total
3.8%
2.7%
Coal
3.8%
3.1%
Oil
0.2% -1.0%
Natural Gas
5.0%
3.3%

1970

1980

1990

Supercriticalpressure boiler
Coal

Steam

Stream turbine

Generator
Electricity

Controlequipment

Water
AQCS (Air Quality Control Systems)(flue gas treatment)

4,000
0

High Efficiency Coal Thermal Power Plant

2000

2010

2020

2030 (Year)

Coal-fired power generation is projected to continue steadily increasing because of
stable supply and advantageous generation costs.
[Sources] 1997–2002: IEA, “Energy Balances of non-OECD Countries” (2004)
2005–2030: IEA, “World Energy Outlook” (2007)

Flue
gas

Clean gas

The basic process of coal-fired thermal power generation is to burn pulverized coal inside a boiler and generate thesteam to rotate a turbine. The combustion exhaust gas is eliminated after cleaning using desulfurization anddesulfurization equipment. Hitachi has developed all of the technologies needed for more environmentally friendly
coal-fired thermal power plants.

Hitachi Group Corporate Social Responsibility Report 2008 | activities | Hitachi Embraces the Challenge of Reducing CO2 Emissions

011

activities—Hitachi Embraces the Challenge of Reducing CO2 Emissions (2)Using Electricity
Greatly reducing electric power consumption
at data centers by completely redesigning facilities

Katsuya Koda (General Manager, Strategy Planning & Development Office, Information and Telecommunications Systems Group, Hitachi, Ltd.)is in charge of the data center energy reduction project

While the IT revolution is improving efficiencies in such diverse areas as production, distribution
and communications, increasing electric consumption by IT equipment is emerging as a newenergy problem. This is most conspicuous at data centers, which house company servers†1 andstorage devices, and provide maintenance and operation services. In recent years, along with thedramatic advances in IT equipment integration and performance, the heat generated by servers
and storage devices is sharply up. Consequently, data centers now need a great deal of energy to
reduce the heat from IT equipment.
To address this problem, in October 2007 Hitachi launched the Cool Center 50 data center
energy reduction project, with the goal of reducing data center electricity consumption by up to 50
percent over the next five years. Hitachi will also build a world-class environmentally friendly data
center fully adopting state-of-the-art green IT technology†2 in 2009.
Investigation of the electricity consumed at data centers tells us that the IT equipment
itself consumes less than half of the total power. Most of the rest is used by facilities such as
air conditioning, power supply units, and other peripheral equipment. The Hitachi Group has
accumulated broad know-how about power-saving IT equipment, highly efficient air conditioning
especially designed for data centers, uninterruptible power supplies (UPSs), electric powertransformers, and large-scale plant construction. Making use of all this expertise, we are
aggressively going ahead with the Cool Center 50 project.
To achieve the goal of up to a 50 percent reduction in data center electric power consumption,
Hitachi is going to introduce highly efficient air conditioners and electrical equipment that Hitachi
has developed, and will optimize the placement of IT devices and air conditioners. These activities

Hitachi Group Corporate Social Responsibility Report 2008 | activities | Hitachi Embraces the Challenge of Reducing CO2 Emissions 012

are expected to achieve a 20 percent reduction in electric power consumption. We will realize thefull 50 percent reduction by introducing servers and other IT equipment that conserve energy, andby using other energy conservation operating technologies.
Our new data center will also function as a prototype test bed. We intend to broadly disseminate
the technologies developed by the Cool Center 50 project to the world at large as one of ourcontributions to global environmental conservation.
†1 Servers: Computers for business use†2 Green IT Technology: Reduction of the environmental load from IT equipment, and IT use linked toenvironmental conservation

Hitachi Universal Storage Platform

Estimated IT Equipment Electric Power Consumption(trillion Wh)

12 times

600

550

500
400
300

5 times240
Televisions
PCs

200
100
0

Servers
Networkequipment

47
2006

2025

2050 (Year)* The Ministry of Economy, Trade and Industry projects
that electric power consumption from IT equipment will increase
to five times the 2006 level by 2025 and 12 times by 2050.

Hitachi Group Corporate Social Responsibility Report 2008 | activities | Hitachi Embraces the Challenge of Reducing CO2 Emissions 013

activities—Hitachi Embraces the Challenge of Reducing CO2 Emissions (3)Controlling Electricity
Commercialization of Hybrid Drive Ecology Trains

Staff of the Hitachi, Ltd. Industrial Systems Group, Transportation Systems Division who developed the hybrid drive technology(standing in front of the first electric locomotive manufactured in Japan).

Today, railroads are considered to be very energy efficient transportation systems. However,compared with electric trains, the diesel trains that run on non-electrified lines have low energy
efficiency, and their exhaust gases contain large quantities of nitrogen oxides (NOx) and otherhazardous substances. Nevertheless, considering the construction costs of electric lines andother above-ground equipment, in practical terms it would be difficult to electrify the non-electrified
segments of the Japanese railway network, which are mostly local branch lines. Presently, there
are approximately 3,000 diesel railcars running in Japan, and they account for less than 6 percentof the nation’s total rolling stock.
The energy efficiency of electric trains has been greatly increased through the introduction ofelectrical regenerative brakes, which feed energy generated from braking back into the electriclines for use by other trains. Capturing the braking energy generated by diesel trains—which run
on engine power—is more difficult, and that has been one of the main reasons for their relatively
poor energy efficiency.
To solve this problem, Hitachi has been jointly working, since 2001, on the commercializationof a hybrid drive system with the East Japan Railway Co. (JR East). One easy way to understandthis approach is to imagine trains that carry their own electric power plants. The system’s basic
configuration is to use the diesel engine to produce electricity and then use that electricity to drive
the motor. Lithium-ion batteries are placed in between the generator and the motor, enabling thereuse of energy generated from braking, just as in hybrid cars.
Of course, this configuration has different problems than those associated with hybrid cars. To
eliminate noise inside train stations, the engines are stopped and the motor runs on batteries alone
until a speed of 25 km per hour is reached. For that reason, the batteries must be charged when

Hitachi Group Corporate Social Responsibility Report 2008 | activities | Hitachi Embraces the Challenge of Reducing CO2 Emissions

014

the trains arrive at train stations. To make this possible, Hitachi has developed battery charge
management control technologies that make detailed assessments based on such factors as train
running speed and the slope of the railway tracks.
JR East’s Kiha E200 hybrid railcar series, the world’s first in commercial use, have been in
operation on the Koumi Line in Nagano Prefecture, Japan since the summer of 2007. Comparedwith conventional diesel trains running on the same line, the Kiha E200 railcars reduce fuelconsumption by 10 percent and emissions of harmful substances by 60 percent. Hitachi
will continue striving to improve efficient electricity control technologies to further reduce theenvironmental impact from railways.

Kiha E200 operating on the Koumi LineEngine generates
electricity

Acceleration
Batteries
discharge

Train
Stops

Maximum Speed

BrakingEngineStartsTrain
Starts~25 km/hr ~30 km/hr

Coasting

Electricity Generation
Batteries Charging & Electricity Discharge

Hybrid Drive System Electricity Control

Batteries arerecharged* The hybrid drive system starts the train using batteries,
and recharges the batteries using electricity from braking
and from the engine while the train is running.

Hitachi Group Corporate Social Responsibility Report 2008 | activities | Hitachi Embraces the Challenge of Reducing CO2 Emissions 015

CSR Activities of the Hitachi GroupCSR Management

The CSR activities of the Hitachi Group are following a roadmap
to a better, more affluent society for all humankind

A CSR group meeting

Message from Executive in Charge
Achieving Conscientious Corporate Management Backed by Transparency
One of Hitachi’s founding spirits is sincerity. From our earliest days, we highly valued strong ethics.
Yet, the standards and norms expected of us today are undergoing major changes—against a
backdrop of increasingly global enterprise, coupled with more diverse stakeholders. To adapt,
we must not only adhere to international standards and guidelines, but ensure managementtransparency and find mutual understanding with stakeholders. In addition, we will take the initiative
to set new social norms and standards of expectation. As a global corporation, we want to boost
every employee’s ethical awareness while respecting human rights, cultural diversity and values.
In addition, our other activities need to be socially beneficial and build stronger ties of trust withsociety as a whole.
Toshiaki Kuzuoka
Vice President and Executive Officer,
in Charge of Legal & Corporate Communications,
Corporate Brand Management, and Management Audit, Hitachi, Ltd.

Hitachi Group Corporate Social Responsibility Report 2008 | CSR Management | CSR Activities of the Hitachi Group 016

Corporate GovernanceBy enhancing corporate governance, the Hitachi Group is promoting speedier,more efficient management and is meeting the expectations of stakeholders
as a business that merits the public’s trust

Strengthening Governance
Hitachi, Ltd., a company that operates on the committee system,†1 endeavors to boost theefficiency of management oversight by bringing in outside directors and speeding up decision
making by giving executive officers broader powers. We have also set up a Group-wide system ofinternal controls, strengthened governance and management efficiency, and have worked hard toearn the trust of all stakeholders.
To reinforce the Group headquarters’ role, we have established guidelines on the environment,compliance, risk management, and internal audits. As well, we have implemented internal audits ofGroup companies. We are striving to boost corporate value through close communications with all
stakeholders.
†1 Committee system: A corporate governance system where a board of directors makes basic policy decisions
and oversees the execution of business by executive officers, while the executive officers, appointed by theboard of directors, execute the company’s business affairs

Governance Structure of Hitachi, Ltd.
General Meeting of Shareholders
Election

Board of Directors(13 members, including 5 from outside )Nominating Committee
Audit Committee Compensation Committee( 5 members, including ( 5 members, including ( 5 members, including
3 from outside )3 from outside )3 from outside )Election

Supervision

Executive Officers: Timely execution of company business

Executive Compensation
At Hitachi, Ltd., compensation for each director and executive officer is set by the Compensation
Committee in accordance with Japanese corporate law governing companies with committees.
Compensation for directors and executive officers consists of monthly salaries and retirement
allowances, together with year-end allowances for directors and performance-based bonuses
for executive officers. While compensation for directors is generally fixed, performance-based
bonuses for executive officers are determined individually according to business performance andthe outcome of work carried out under the officers’ management. Monetary compensation is thebasis of the compensation system. Beginning with compensation for fiscal 2008, the compensation
scheme for directors and executive officers has been revised to eliminate retirement allowances. In
fiscal 2007, executives were compensated as follows:

Hitachi Group Corporate Social Responsibility Report 2008 | CSR Management | Corporate Governance017

Summary Compensation Table
Category

Salaries and year-end allowancesor performance-based bonuses
Recipients (number)

Retirement allowances

Total amount(millions of yen)

Total amount(millions of yen)

Recipients (number)

Directors(outside directors)

11
(5)

266
(66)

2
(−)

245
(−)

Executive officers

29

861

3

165

Total

40

1,127

5

411

* The number of directors receiving salaries and year-end allowances does not include two who served concurrently as executive officers.
* The retirement allowances for directors were paid to the two directors who resigned at the expiration of their terms of office at the conclusion of the 139th ordinary
general meeting of shareholders held on June 20, 2008.
* Of the three executive officers listed as receiving retirement allowances, two resigned on March 31, 2008, and one resigned on March 31, 2007.

Internal Control
As a public company listed on the New York Stock Exchange, Hitachi, Ltd. is registered with
the U.S. Securities and Exchange Commission and is subject to the Sarbanes-Oxley Act.†2 A
comparable internal control evaluation and reporting system (J-SOX†3) came into effect in Japan at
the beginning of fiscal 2008.
Hitachi is committed to full compliance with these and other applicable laws and regulations.
Beyond that, we consider it an important social responsibility to re-engineer our internal control
systems, to improve the transparency and credibility of our businesses, and to strengthen ourmanagement structure by clarifying, examining, and visualizing our management and operationalframeworks.
Hitachi, a conglomerate of many companies, has adopted a framework that assigns
accountability at the group level, including responsibilities for the design and operation of internal
controls. Accordingly, Hitachi Group companies are required to revise, document, and evaluate
the effectiveness of their operations in line with common guidelines for specific levels of corporate
scale and business content. Management assessment of each company is collected at the grouplevel, and is reported to Hitachi, Ltd. along with the certification.
†2 Sarbanes-Oxley Act (SOX): Section 404 of this act, enacted in July 2002, mandates company managementwith the responsibility of establishing, maintaining, and evaluating internal control over financial reporting,and requires that control be assessed by independent auditors.
†3 J-SOX: A framework for evaluating and reporting internal control over financial reporting under the Japanese
Financial Products Transaction Law, which came into effect in April 2008

Internal Control Handbook

Hitachi Group Corporate Social Responsibility Report 2008 | CSR Management | Corporate Governance 018

Hitachi Internal Control Assessment Framework
Management
assessment
reportFinancial
Services
AgencyHitachi, Ltd.
CEO and CFO*2
ReportInternal Control
Committee

Internal Control
Committee Office

Board of Directors
Audit Committee
Internal audit
reportInternal audit
reportInternal Auditing
OfficeMonitoring

Certification, Management
Assessment Report*1 SEC:
Securities andExchange Commission*2 CFO:
Chief Financial Officer

Hitachi Group HQs(Hitachi Group HQsand Hitachi, Ltd.
Business Groups)

ReportReportAudit

Independent auditors

SEC*1

Hitachi Groupsubsidiaries

Group Management
In the Hitachi Group, we strive for a management approach that fosters synergy among companies
by nurturing connections—while respecting each company’s independent creativity. In a quest for
strategies to maximize Group synergy and make optimal use of Group management resources,
Hitachi, Ltd. is currently developing whole-group management policies through the Group Strategy
Committee established in April 2006.

Hitachi Group Corporate Social Responsibility Report 2008 | CSR Management | Corporate Governance 019

CSR Promotion Activities
Corporate social responsibility (CSR) is founded on the understanding
and practice of each individual employee.
Based on the CSR Policy of the Hitachi Group,
we have formulated a Three-Year CSR Roadmap andare promoting a wide range of activities to nurture this spirit of CSR

Toward Realization of the Three-Year Roadmap
In 2006, the Hitachi Group created the Three-Year CSR Roadmap, a medium-term plan for CSR
activities that reflects stakeholders’ expectations and requirements, and aims to make Hitachi
an advanced global CSR company. In line with that roadmap, Hitachi has been pursuing CSR
activities with goals set in a variety of fields.
In fiscal 2007, we prepared the Corporate Ethics and Compliance Handbook and took steps
to strengthen compliance. Also, we sought to have Group companies around the world cultivatea heightened awareness of CSR. To launch an array of strategic CSR activities in fiscal 2008, weselected themes common throughout the Hitachi Group, as well as evaluation criteria tools forvisualizing CSR activities.
Three-Year Roadmap Concept
Toward an advanced
global CSR company

Medium-Term Business Plan

Level of CSR Evolution

Realization of ideals

Determination ofcurrent statusbased onthe CSR Policy of
the Hitachi Group

April 2006

Verification andvaluation of
CSR activities

April 2007

Optimization of
CSR activities andimplementation ofstrategic CSR

April 20082010

Group-wide efforts
to resolve issues
in society

March 2009

Structure of Hitachi Group CSR Promotion
President

SeniorExecutive
Committee
CSR
Promotion
Committee

Senior Executive Committee:
Decides CSR management policies
at the executive level
CSR Promotion Committee:
Consists of Executive Officers responsible for CSR
Discusses policies and plans for CSR activities
CSR Promotion Teams:
Consists of managers responsible for CSR
in each department. Prepares,
implements and follows up on
detailed plans for CSR activities

Corporate
Communications Division
CSR Promotion Department(Secretariat )CSR Promotion Teams:
Group Management,
Corporate Brand Management,
Customer Satisfaction, Overseas Operations,
Employee Relations & Human Resources,
Legal Affairs, Corporate Citizenship,
Environmental Conservation, Compliance,
Quality Assurance, Procurement,
Public Relations

Business groups
Group directors& CEOsCSR promotion officers

Production
facilities

Affiliated companies
President
CSR promotion officers

Affiliatedcompanies

Overseassubsidiaries
Hitachi, Ltd., 910 consolidated subsidiaries,
and 171 companies that use the equity method

Hitachi Group Corporate Social Responsibility Report 2008 | CSR Management | CSR Promotion Activities 020

Results of CSR Activities in Fiscal 2007 and Goals/Plans for Fiscal 2008
This table summarizes the main CSR activities and results based on the Hitachi Group Three-Year
Roadmap in fiscal 2007, as well as plans for future activities.
CSR Policy of the
Hitachi Group

Fiscal 2008 Goals/Plans• Prepared CSR e-learning courses(in 12 languages) for use overseas
and implemented them first in
Europe• Held CSR workshops andseminars overseas (in North
America and seven Asian countries)• Incorporated CSR training into
the education curriculum for newcompany employees (in China)

pp.
22–23

• Implement CSR e-learning courses in theAmericas as well as China and other Asian
countries• Continue holding CSR workshops andseminars overseas• Visualize CSR activities(development and use ofevaluation tools)• Organized social expectations
by CSR focus and prepared (draft)
evaluation tools for CSR activities

p. 20• Engineer plan-do-check-act (PDCA) cycle
through the adoption of Group-shared CSR
visualization tools (tentative name)• Select Hitachi Group’s
CSR activities• Focused on social issues
in relation to Hitachi business
operations and selected theenvironment as a common theme

p. 20• Incorporate materiality process and define
the material issues• Steadily implement
various measures bySupervisory Office for
Monozukuri• Conduct Group-wide
sharing of in-house
good practices of PS risk
assessment*1• Re-implemented exhaustive
quality and reliability education
through, for example, training
for general managers tofurther strengthen monozukuri(manufacturing)• Reorganized quality control
benchmarks and standards, andpromoted full compliance

pp.
33–39

• PDCA cycle-driven work process
improvement and full compliance• Identify themes for CS
activities in each businessand promote activities toimprove CS• Conducted field surveys of CS(customer satisfaction) activities
by three business groups and twoGroup companies, and identified
issues for attention

pp.
40–42

• Skills development of sales divisions aimed
at boosting CS activities

3. Disclosureof informationand stakeholder
engagement• Formulate Global Security
Guidelines• Determine appropriate
contents and scope of
information disclosed to themedia and investors• Hold regular progress
reports on structural reformof business, based on
management policies andimprovement of IR activities• Formulated Global Security
Guidelines• Clearly documented andimplemented disclosure policies• Held five business group IR
presentations during the year
• Publicized management policies
using a variety of opportunities

pp.
45–48

• Expand the dissemination and disclosure of
information highlighting priority initiatives• Expand communication with stakeholders inJapan and overseas• Refine CSR Web site and improve searchfacility

4. Corporate
ethics andhuman rights• Review Business Ethics
Handbook and promote
education• Revised as Corporate Ethics
and Compliance Handbook anddistributed it to employees in Japan• Implemented complianceeducation in three Asian countries

pp.
24–31

• Implement corporate ethics and complianceeducation programs that utilize the Corporate
Ethics and Compliance Handbook• Continue implementing complianceeducation programs in Asia

5. Environmental
conservation• Formulate separate
integrated environmental
management system (EMS)
plans for business groups
and for Group companies• Drafted outlook and plans forthe creation of an integrated
environmental management system(EMS) for business groups andGroup companies• Hitachi Global Storage
Technologies earned integrated
EMS certification (for integrating
10 plants: two domestic, eightoverseas)

pp.
80–81

• Earn integrated EMS certification for fourGroup companies• Increase Super EcoProduct registration ratio
to 8%• Register 8 Super EcoFactories• Achieved 8% Super Eco-Productregistration ratio• Registered eight Super EcoFactories

pp.
90–
108

• Boost Super Eco-Product registration ratio
to 15%• Register 16 Super Eco-Factories

2. Contribution tosociety throughour businessResults in Fiscal 2007

• Ensure that all employeesof overseas Group
companies are familiar with
the CSR Policy of the Hitachi
Group

Achievement
Level

Page(s)1. Commitment tocorporate social
responsibility

Activities in Fiscal 2007

Hitachi Group Corporate Social Responsibility Report 2008 | CSR Management | CSR Promotion Activities 021

6. Corporate
citizenshipactivities• Implement programs
using the global
environment as a theme• Expand support programsin education (expansionof regions for promoting
Universal Design)• Implemented overseas programson environmental themes (EUHitachi Science and Technology
Forum, China Fellowship Program)• Planned and implemented areforestation volunteer tour to China• Extended and implemented
educational assistance programs(Universal Design) in Nagoya
and Yokohama. Implemented 19
elementary school programs,
including in Tokyo

pp.
49–60

• Commence alignment of charitable
activities with business objectives• Implement programs on global
environmental themes• Plan and pursue new social contribution
programs to satisfy needs in emerging
countries• Plan and pursue existing social contribution
programs for aging and other social issues• Expand educational programs (for example,
Universal Design in new regions)

7. Working
environment• Promote HR diversification• Enhance activities fordiversity (Group-wide
information sharing, hiring
female managers)• Continue implementationof global manager training(1,000 trainees)• Encouraged diversity awarenessat all Group companies, hosted
forums for managers and HR
administrators and disseminatedinformation through Web sites andother channels• Promoted active appointment offemale managers• 800 personnel had global
manager training

pp.
65–74

• Promote improved diversity awarenessGroup-wide• Continue encouraging active appointmentsof female managers• Plan and pursue initiatives (develop andimplement trial training curriculum) for
reaffirming Hitachi founding spirit and ideals

8. Responsible
partnership withbusiness partners• Monitor CSR activitiesof business partners andestablish evaluation method• Qualitatively improve theenvironmental management
systems of green suppliers
through HI-KES *2• Develop environmental
procurement courses• Implemented substantive
monitoring of major suppliers(140 companies) using checklists
prepared by the Japan Electronics
and Information Technology
Industries Association (JEITA)• Assorted education courses(once a month), aided small andmedium-size suppliers to develop
environmental management
systemspp.
61–64• Have Group companies implement CSR
monitoring of suppliers and share supplierinformation• Assist small and mid-size suppliers to
improve environmental management systems
through MMM Club*3 activities: Achieved: Partially achieved*1 PS (product safety) risk assessment: The process of assessing the extent of risk to product safety and determining whether that risk can be tolerated*2 HI-KES: Activities implemented by Hitachi to support the environmental safety programs of suppliers based on the Kyoto Environmental Management System
Standards (KES; see page 62), a specified non-profit organization*3 MMM Club: An organization run primarily by suppliers who have acquired KES environmental certification through Hi-KES activities. The three Ms come from thefirst letter of mottainai (reducing wastefulness)

Full Implementation of the CSR Policy
In 2006, Hitachi prepared the CSR Policy of the Hitachi Group Guidebook and distributed it toabout 9,700 managers. English and Chinese language versions were also prepared and are now
being used by 90 Hitachi Group companies around the world. Furthermore, CSR e-learningclasses have been set up and are now in use by 68 Group companies in Japan.
For overseas Group companies, we hold workshops designed to instill a better understandingof CSR fundamentals, local social issues, and Group CSR policies. In fiscal 2007, we held
workshops and seminars for more than 150 managers in seven Asian countries, as well as in North
America. In China, we integrated CSR lectures into our Group-wide training programs for new
employees in an effort to ensure that they get a solid understanding of CSR from their first day. In
Europe, we held “Ideas Competition” to solicit innovative ideas on CSR activities from employees
and reward those who share ideas that we can use. We produced e-learning content for new
ideas and drew as many as 135 candidates.
Starting in fiscal 2008, we will develop new e-learning courses in 12 languages, including
English, Chinese, German, and French, and will distribute them to overseas Group companies.
We have also expanded the range of our workshops and are striving to improve Group employee
awareness of CSR.
Every year, Hitachi gauges employees’ CSR awareness with the Business Process and Opinion
Survey. In fiscal 2007, about 80 percent of surveyed employees of Hitachi, Ltd. responded that they“think Hitachi is engaged in CSR-related activities,” essentially the same percentage as 2006. This

Hitachi Group Corporate Social Responsibility Report 2008 | CSR Management | CSR Promotion Activities 022

indicates that Hitachi has cultivated fairly complete, widespread awareness and understanding by
employees of CSR-related activities by distributing CSR reports and by publishing CSR information
on internal and external Web sites. We will continue to promote awareness through ongoing
employee education programs and the dissemination of extensive CSR information related to ourbusiness operations from a global perspective.

A sample e-learning screen used for “Ideas Competition” in Europe

TopicsHitachi Earns Excellent Corporate Citizen in China and The Most Responsible Company Awards
Hitachi (China) Ltd. and Hitachi Elevators (China) Co., Ltd. (see page 84) won the Excellent Corporate
Citizen in China Award, sponsored by China’s Ministry of Civil Affairs, the Committee of Corporate
Citizenship, and the China Central Television Business Channel. Chosen by experts and private citizens,companies receive this award for corporate performance and social responsibility. In fiscal 2007, about 50
companies from China and abroad were selected.
Hitachi (China) Ltd. won the third Most Responsible Company Award, becoming the first Japanesecompany to do so. This award is sponsored by the Chinese News Weekly, the Chinese Red Cross
Foundation, and the China Consumers’ Association.
Photo: Winners of the China Excellent Corporate Citizen Award (at center, Minoru Tsukada, Senior Vice President and Executive Officer of Hitachi, Ltd., whoat the time held the positions of Chief Executive and Chief Information Officer for China)

Hitachi Group Corporate Social Responsibility Report 2008 | CSR Management | CSR Promotion Activities 023

Compliance and Risk Management
The Hitachi Group, with involvement in businesses that impact public welfare andoperations that handle vital information, places top priority on compliance andethical business conduct and is committed to every category of risk management,
including protection of personal information and Business Continuity Planning (BCP)

Compliance Framework
The Hitachi Group operates on the principles of “conformance with the law and business ethics”
and “fair and disciplined competition.” In February 2002, Hitachi, Ltd. established the Compliance
Division, reporting directly to the president, which carries out compliance education and audits ofthe business activities of Hitachi, Ltd. and other Group companies.
Expanding the Whistleblower System
In April 2003, Hitachi instituted a “companywide whistleblower system” with the aim of preventing
illegal or unethical behavior, promptly addressing infractions, and enhancing the ability to selfgovern. In response to the enactment of the Whistleblower Protection Law, we extended thesystem in October 2004 to include all present and former Group employees, employees ofsuppliers, and temporary staff. We also adopted a system in December 2003 for employees toreport any problems straight to the directors, and in May 2004, we revised the system to accept
anonymous reports.
Report Processing Flow
1 . Reporting

Individuals who
submit reports

2 . Investigation Initiation NoticeCompliance Divisionor outside attorneys

3 . Feedback on Investigation Findings

Compliance Education
Raising Compliance AwarenessTo have a stronger CSR focus and to account for recent changes in the law, Hitachi, Ltd. hascompletely revised the Business Ethics Handbook that all employees—including temporary staff—
relied on as a code of conduct and reissued it as the Corporate Ethics and Compliance Handbook.
Specifically, we expanded the sections on human rights, information disclosure, and contributions
to local societies, and made other subjects easier to understand. In fiscal 2008, we will use thisrevised handbook for training and education programs and will have all Group companies strive
for heightened ethical awareness and a renewed commitment to total compliance.

Hitachi Group Corporate Social Responsibility Report 2008 | CSR Management | Compliance and Risk Management 024

The Corporate Ethics and Compliance Handbook Table of Contents
Sincere and Fair Business Activities• Operating Activities• Provision of Safe High-Quality Products and Services• Observance of Engineering Ethics• Procurement Activities• Respect for the Hitachi Brand
Environmental Protection
Relations with Society• Disclosure of Company Information• Use of Inside Information and Prevention of Insider Trading• Contributions to Local Communities• Relations with Politics and Government Administration• Prohibition of Anti-social Transactions• Observance of Laws Governing Imports and Exports• Observance of Laws and Respect for the Culture and Customs of Each Nation• Regarding Gifts, Business Entertainment, etc.
Respect for Human Rights
Management Foundations• Management and Use of Information• Management and Preservation of Company Assets• Arranging a Work Environment That Draws Out Employee Strengths
Revised February 2008
The Corporate Ethics and Compliance Handbook Table of Contents (excerpt)
http://www.hitachi.com/csr/csr_images/handbook_en.pdf

Antimonopoly Compliance Education
In 2006, it was determined that violations of the Japanese Antimonopoly Law had occurred duringcontract bidding solicited by the Metropolitan Expressway Public Corporation (now Metropolitan
Expressway Co., Ltd.). The Hitachi Group responded by carrying out Group-wide training from
August through October 2007 to thoroughly familiarize all sales managers with the amended
Antimonopoly Law. In October 2007, we also invited a visiting researcher from the Fair Trade
Institute to speak before the Group’s compliance officers, and in March 2008 we brought in an
outside attorney to speak to compliance officers about the whistleblower system. In these andother ways, we are working hard to raise awareness of compliance issues throughout the Group.
Seminars in Asia
Over 100 Hitachi Group companies are operating throughout Asia (in seven countries, excluding
Japan and China). Ensuring that every employee has strong ethical standards requires special
emphasis on local laws and regulations. Hitachi Asia, responsible for operations in the Asian
region, has been holding Corporate Ethics and Compliance Seminars for Group companies. In
fiscal 2007, around 100 managers participated in seminars held in the Philippines, Indonesia, andIndia. In fiscal 2008, we plan to increase education by holding seminars in more Asian countries.
While respecting the local laws and regulations, we will strive to develop employees with highethical standards.

Hitachi Group Corporate Social Responsibility Report 2008 | CSR Management | Compliance and Risk Management 025

A corporate ethics and compliance seminar in Asia

Protecting Personal Information and Information Security
The Hitachi Group emphasizes two points in policies to protect personal information andinformation security:(1) Precautionary measures and prompt security responses
Hitachi clearly classifies information assets to be protected and takes safeguarding measures based on
vulnerability and risk analysis. We also have an emergency manual for security breaches, written from thestandpoint that they are inevitable, not potential.
(2) Promotion of stronger ethical and security awareness among data users
Hitachi has prepared a curriculum tailored to various personnel levels—staff, managers, etc.—and is
working to raise the prevailing sense of ethics and security awareness through Group-wide education usinge-learning. We are also working on the use of audits to identify and address problems early on.

Basic Approach to Information Security Governance
Clearly designate assets to be protected• Sort through information assets and conduct risk analysis

Raise user literacy• Educate managers and staff• Enforce rigorous use of checklists

Information
assetsto be protected

Put in place preventive measures• Apply IT to leak prevention• Apply rigorous managerial measures

Establish information security system• Put in place managerial framework (appointment of ofﬁcer in charge of information security, etc.)• Establish system for reporting breaches

Protecting Personal Information
In line with our Policy for Information Security and Standards on Information Security Measures,
we have worked hard to prevent information leaks and unauthorized disclosure of information byholding e-learning courses for all employees, including temporary workers, and by implementing
periodic audits. In February 2007, we earned Japan’s Privacy Mark certification.†1 In July 2007,
Odaira Memorial Tokyo Hitachi Hospital became the first corporate-affiliated hospital in Japanto obtain that certification, following an examination by a screening organization specialized inhealthcare.
In 2007 alone, 17 Hitachi Group companies earned Privacy Mark certifications, and as ofHitachi Group Corporate Social Responsibility Report 2008 | CSR Management | Compliance and Risk Management 026

March 2008, the total rose to 58. Additional Hitachi-affiliated hospitals are seeking certification in
fiscal 2008 and will reinforce personal information management as they prepare for the scheduled
renewal of the Privacy Mark in February 2009.
†1 Privacy Mark: Certification awarded by the Japan Information Processing Development Corporation (JIPDEC)
to companies and organizations recognized for properly managing personal information

Personal Information Protection Policy
http://www.hitachi.com/privacy-e/index.html

Efforts toward Information Security
The rapid spread of digital information and computer networks has made it crucial for businesses
to keep information secure, if they are to keep the public’s trust. The Hitachi Group is working toprevent security breaches by applying, more rigorously than ever, the Three Rules for Preventing
Leakage of Confidential Information. Using this system to minimize damage in the event of abreach, we promptly contact customers, report to the responsible government agency, investigate
the cause, and take steps to prevent a reoccurrence.
In fiscal 2007, the Hitachi Group moved to guard against information leaks associated with the
Winny file-sharing program by prohibiting the use of privately owned computers for work-related
purposes, distributing copies of a checking tool to all Group employees, and having employees
delete all previously saved work-related data.
In July 2007, we also compiled a set of Global Security Guidelines for Group companies
overseas, and we are instructing them in the prevention of information leaks by conforming tothese guidelines.
Three Rules for Preventing Leakage of Confidential Information
Rule 1.
In principle, confidential information cannot be taken from the workplace.
Rule 2.
Permission must be obtained from an immediate supervisor to take any confidential information from theworkplace.
Rule 3.
Security precautions should always be taken when storing confidential data on a laptop computer, external
storage device, etc., and when taking such a device out of the workplace.

Export Control
As a matter of basic export-control policy, Hitachi, Ltd. upholds the Hitachi Standards of Corporate
Conduct, which state that the company “shall help maintain international peace and security
through compliance with trade laws and regulations.” We adopted rules for control of security
exports on the basis of this policy in 1987, and we continue to strive for the strictest possible
export controls. This means investigating the destination, application, and buyers of all goods andtechnologies intended for export and promoting all legal procedures.
In addition, Hitachi, Ltd. is taking steps to promote Group-wide export controls by providing
guidance on rules and a framework for export control, as well as supporting education and training
to ensure that all Hitachi Group companies follow similar policies and practices for export control.
We are also committed to ensuring that Hitachi Group companies doing business in countries

Hitachi Group Corporate Social Responsibility Report 2008 | CSR Management | Compliance and Risk Management 027

around the world comply fully with local export laws and regulations.

Risk Management
With major earthquakes, epidemics, terrorist attacks, and other disasters occurring throughout
the world, we are committed to business continuity plans (BCPs)†2 as an important element ofrisk management. Because our operations are so widespread and play such an important role insociety in Japan and overseas, we are working to enhance our BCPs to minimize the impact onsociety of any interruption in business operations.
Business Continuity Plans (BCPs)
In August 2005, Hitachi set up an Expert BCP Promotion Panel, which in December 2006
completed the Guidelines for Developing Business Continuity Plans. Using the example of anelectronic components plant hit by an earthquake, the guidelines clearly prioritize the operations
that should be restored, depending on estimated risk and impact of interruptions. Using the BCP
guidelines, all production plants and offices can operate more efficiently and employ level-headedrisk management procedures following an emergency.
In February 2007, representatives from 110 Group companies got a detailed briefing on BCP
policy. By March 2008, major Group companies had formulated BCPs.
†2 Business Continuity Plan (BCP): A plan for ensuring the continuation of core operations and prompt restoringof operations to normal in the event of a disaster or accident.

Guidelines for Developing Business Continuity Plans

Emergency Simulation Exercises
In March 2008, Hitachi, Ltd. Hokkaido Area Operation in Sapporo conducted a simulation exercise
modeling an earthquake with a seismic intensity in the upper 6 range. Simulating a wide rangeof adverse circumstances triggered by such a disaster, the exercise provided practice for rescue
operations, community volunteer activities, equipment inspection, evacuation, and other activities.
About fifty employees split into two teams, one to take requests for assistance and provide
information, and another to respond to requests. Through this lifelike experience, they learned toexercise calm judgment and act quickly in a tense emergency situation.
Each year since 1998, the Hitachi Group has held a similar drill at a designated production
facility, and it has now completed exercises at ten facilities in eight prefectures. We are also holding
monthly drills using a satellite communication system.

Hitachi Group Corporate Social Responsibility Report 2008 | CSR Management | Compliance and Risk Management 028

Risk Response for Employees and Families
In April 2008, for a global outbreak of avian (bird) flu and other strains of influenza, we set up a
special organization called the Risk Management Headquarters. With the president serving as
CEO, this organization plays a central role in ensuring the safety of Group employees and their loved
ones. We are adding resources to the development of BCPs for a range of socially indispensable
Group operations, including those for healthcare, security, and social emergencies.
Risk Management Frameworkt*OGPSNBUJPODPOTPMJEBUJPOt4JNQMFPSHBOJ[BUJPOt%JSFDUMJOLUP
top management

Decisionmaking

1SFTJEFOU FYFDVUJWFWJDFQSFTJEFOUT FYFDVUJWFPGmDFST

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Getting the right information
to the right people
at the right time

ActionEmployees & family members (1 million)

Decision making, notification and action are conducted in that order

Protecting Intellectual Property
Basic Policy on Protection of Intellectual Property
The basic policy of Hitachi, Ltd. regarding intellectual property rights (IPR) is that these rights must
be respected. Hitachi respects the intellectual property rights of other companies and expects
other companies to respect Hitachi’s.
To be certain of honoring other companies’ IPR, Hitachi, Ltd. works hard to avoid patent
infringements during product development, stipulating in Group regulations that preliminary surveys
must be carried out to determine the coverage of other companies’ patents. Before making use ofanother company’s intellectual property, we negotiate with the company and obtain a license forthat purpose.
For our own intellectual property, we will generally provide licenses to businesses wishing to
make use of these assets, operating on the principle of compensated sharing. If another business isfound to have violated Hitachi’s IPR, Hitachi will encourage that business to acquire the necessary
licensing and will take legal action, if necessary.
Hitachi is also taking aggressive measures to stamp out counterfeit goods around the world,
including those from China and other parts of East Asia, the Middle East, and Africa. This means
working with local authorities to protect the Hitachi brand by uncovering violations of Hitachi’s overallbusiness, as well as to various trademarks, Web sites and domain names, and other intellectual
assets. Through these measures, Hitachi is bolstering the confidence of markets, consumers, andgovernment agencies in Hitachi, maintaining order in markets where Hitachi products circulate,and protecting consumers who trust the Hitachi brand and purchase the products.

Hitachi Group Corporate Social Responsibility Report 2008 | CSR Management | Compliance and Risk Management 029

Respect for Human Rights
The Hitachi founding spirit of harmony, sincerity, and pioneering spirit
is fundamentally rooted in a humanitarian philosophy,
and in all business operations we respect the human rights of all of our stakeholders

Human Rights Policy
In the global business arena, it is vital that companies respect cultural diversity and conduct
themselves with integrity and honesty, backed by a strong respect for human rights. Supported bya humanitarian philosophy, Hitachi respects the human rights of all stakeholders. We also respect
the international ideals of the Universal Declaration of Human Rights, the International Covenantson Human Rights, and the United Nations Global Compact†1 and we are striving to improve thegeneral level of awareness with all Hitachi stakeholders.
†1 Global Compact: Universal principles relating to human rights, labor, and the environment proposed by thenUN Secretary-General Kofi Annan at the World Economic Forum in January 1999.

A Total Commitment to Human Rights AwarenessWe link awareness of human rights to actions by highlighting human rights in the Corporate Ethics
and Compliance Handbook of Hitachi (see page 25), making certain that all employees are awareof these issues.
To assess how far awareness of human rights has spread, we conduct internal audits of HitachiGroup companies throughout the world, verify education programs, and monitor complaints andrequests for counseling. In fiscal 2007, we sought the views and recommendations of human rights
experts. In the future, we will act on these views and publish the progress made on respect forhuman rights.
Provisions declaring respect for human rights(1) We will respect every person’s character and individuality
We will respect every person’s character and individuality in the recruitment and treatment of employees,
the conduct of commercial transactions, and all other company activities, and not engage in any acts that
impair individual dignity or discriminate on the basis of sex, age, nationality, race, ethnicity, ideology, belief,religion, social status, family origin, disease, disability, etc.
(2) We will establish information ethics
We will establish information ethics for the respect of human rights and the maintenance of security in
information handling, to prevent in advance the emergence of problems from personal information leaks,
computer viruses, and unauthorized access.
(3) We will advance employment and commercial transactions
with proper consideration to corporate social responsibility
We will hire employees in accordance with the governing domestic, foreign and local laws in each country
and region. For example, we will not use child labor which employs children below the minimum working
age or coerced labor that is against the will of the workers. Moreover, we will not procure goods or services
from enterprises that utilize child labor or forced labor.
Excerpted from the Corporate Ethics and Compliance Handbook

Hitachi Group Corporate Social Responsibility Report 2008 | CSR Management | Respect for Human Rights 030

Respect for Human Rights in the Pursuit of Business

Procurementt Partnerships
t Fair trade
Working Environmentt Clean, safe workplacest Support for work-life balance

Products
t Consumer safetyt Universal Design

Respectfor
Human Rights

Hiring and Managing Personnelt Employing challenged peoplet Support for the careeradvancement of women

Information Disclosuret Accessibilityt Protection of personal information
Environmental Protectiont Preserving the global
environment for future generations

Social Contributions
t Activities to promote a humanitarian spirit

VoicesHuman Rights at the Core of CSR

Makoto Teranaka
Secretary-General, Amnesty International JapanTo date, corporate violations of human rights
have been seen in many areas of Africa, Asia,and elsewhere. Moreover, with globalization,
the human rights gap between companies andsociety has widened. To close this gap, it is crucial
to make respect for human rights a core part ofcorporate social responsibility. Many companies
have been urged to show more consideration
for human rights during procurement. I urge
you, instead of viewing it as a procurement
issue, to consider respect for human rights as amanagement policy.
Hitachi’s CSR reports address the issue ofhuman rights. However, they should detail specificefforts, along with progress. It is necessary also tomeasure the effectiveness of those efforts throughdialogues with independent organizations and to
put their conclusions and recommendations into
action. In particular, I would like to see Hitachi
disclose more information about how it addresses
human rights issues as they relate to employees,
suppliers, and regions of operation.

Hitachi Group Corporate Social Responsibility Report 2008 | CSR Management | Respect for Human Rights 031

Hitachi: Living Together with Society

Next Society

Hitachi’s innovations and activities are creating a rich society together
with our customers, suppliers, employees and local communities

Genki Club—an in-company day care center supporting a balance between work and family

Message from Executive in Charge
Building a Corporate Culture of Tackling Problems
Hitachi is engaged in a wide range of projects and activities throughout the world. Therefore, I
believe it is Hitachi’s responsibility to contribute to local communities—around the globe—by
responding to the problems faced by all regions, countries, and people. As a corporation that
pursues monozukuri, we have an immense responsibility for the quality and reliability of our
products and services.
It is Hitachi’s mission to create new value by providing innovative products and services
intended to help realize a sustainable society. To fulfill this mission, we must reconsider the origins
of monozukuri and further promote initiatives for the diversification of employees and ways ofworking. This will enable us to build a corporate culture where all employees can create new value,
as well as tackle difficult problems facing current and future generations.
Masahiro Hayashi
Executive Vice President and Executive Officer of Hitachi, Ltd.,and Chair of the CSR Promotion Committee(in charge of sales and global business management)

Hitachi Group Corporate Social Responsibility Report 2008 | Next Society | Hitachi: Living Together with Society 032

Monozukuri and Services
from the Customer’s Perspective
From the beginning, Hitachi has placed the highest priority on quality.
We believe in always acting from the customer’s perspective

Toward the Strengthening of Monozukuri
At Hitachi, we approach monozukuri from the customer’s perspective, holistically applying a wide
range of technologies, know-how, and management skills to the total process—from productdevelopment and design to production, sales, and services. While striving to improve designs,
production technology, and quality control, we are also focusing on nurturing outstanding
technicians and passing on the technologies that we have developed.
Six Committees Dedicated to Strengthening Core Technologies
When broken turbine blades were discovered in two nuclear power stations in Japan in June
2006, we established the Supervisory Office for Monozukuri under the president the following
September to further strengthen monozukuri capabilities, improve customer confidence, and tohand down Hitachi’s founding spirit.
Recognizing that it is Hitachi’s mission to respond to the expectations of society throughmonozukuri, we have set up six committees to investigate challenges, such as strengthening
project management, improving quality and reliability, and standardizing and sharing knowledge(examples of accidents and lessons learned, specialist knowledge, know-how, etc.). The goal is tofurther improve monozukuri. Executive officers from the head office serve as chairpersons of thesecommittees, supervising and promoting their activities.
In fiscal 2007, the committees’ activities included promoting innovation in the development,
design and production processes; taking various initiatives to strengthen project management;
clearly defining the development processes that improve quality; standardizing and sharing
knowledge about monozukuri; and publishing and distributing to employees HITACHI no Kokoro, abooklet that strengthens awareness of Hitachi’s basic philosophy.
Through these activities, as well as enhancing our high-quality monozukuri and ability tosolve problems on the production front lines, we will continue to respond to the expectations ofcustomers and all our diversity of stakeholders.

Hitachi Group Corporate Social Responsibility Report 2008 | Next Society | Monozukuri and Services from the Customer’s Perspective 033

Committees of the Supervisory Office for Monozukuri and Their Activities
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1BSUOFSTIJQTBOEDPNQMFNFOUBSZSFMBUJPOTIJQTBNPOHDPNNJUUFFT* PM (project management): A method of managing the progress of a project as a whole while coordinating staff, funds, equipment, materials, scheduling, etc.

The HITACHI no Kokoro booklet, used for Hitachi Group employee training

Successful Participation of Hitachi Group Employees
in the International Skills Festival for All, Japan 2007
In November 2007, seven Hitachi Group employees in seven occupations took part in theInternational Skills Festival for All, Japan 2007 (ISF2007).†1 Four of them won gold medals andone received a bronze medal. About 800 people from 46 countries and regions took part incompetitions in 47 occupations including CNC turning, welding, sheet metal work, and electronic
device assembly. Hitachi employees have now won gold medals in five consecutive WorldSkills
Competitions (WSCs) and, including those at ISF2007, have won 37 gold medals in total.
At Hitachi, we believe that “making things makes people.” Ever since the founder of Hitachi,
Namihei Odaira, set up a school for apprentices, we have placed great importance on humanresource development. Hitachi employees have taken part in every tournament since the first
WSC national tournament in 1963, making participation in the WSCs a part of our development of
human resources that foster core technicians.
The highly skilled technicians who participate in the WSCs are the nucleus of Hitachi’s staff on

Hitachi Group Corporate Social Responsibility Report 2008 | Next Society | Monozukuri and Services from the Customer’s Perspective 034the production front lines. Through these activities, we are striving to improve the level of skills andpass them on at all of our production sites in order to provide the highest quality products in theworld.
†1 World Skills Competition: An international tournament held, in principle, once every two years to promote
professional training, improve skill levels, and encourage international exchanges among skilled workers.
Hitachi provided support as an official sponsor of this year’s tournament. Since the event has been combinedwith the International Abilympics (for physically challenged technicians), it was renamed the International
Skills Festival for All.

The five participants who won medals at ISF2007

ISF2007: Hitachi Group Results by Occupation
Occupation

Division

Name

ResultWelding

Hitachi Works, Hitachi, Ltd.

Masaki Kobayashi

Gold medal

Construction Metal Works

Hitachi Works, Hitachi, Ltd.

Akihito Sakamoto

Gold medal

Industrial Control

Information System Control Division, Hitachi, Ltd.

Katsuya Nakui

Medallion For
Excellence

CNC Turning

Nanotechnology Product Business Group, Hitachi HighTechnologies Corporation

Akira Fujimoto

Gold medal

CNC Milling

Nanotechnology Product Business Group, Hitachi HighTechnologies Corporation

Akitomo Ebine

Gold medal

Mechanical Engineering
CAD

Nanotechnology Product Business Group, Hitachi HighTechnologies Corporation

Komei Osuga

Bronze medal

Refrigeration

Shimizu Works, Hitachi Appliances, Inc.

Yuhei Konagai

11th place

Quality Assurance (QA) Activities
The Hitachi Group has passed on the quality-first monozukuri tradition ever since the beginning.
Quality assurance (QA) activities are performed throughout the Group at every stage—from productplanning to delivery and services—based on our unifying slogan “providing customers with thehighest quality products and services.” The following are examples of QA under the headings ofhuman resources, technologies, and organization & control.

Hitachi Group Corporate Social Responsibility Report 2008 | Next Society | Monozukuri and Services from the Customer’s Perspective 035

Quality Assurance Flow Chart
Product Manufacturing Process

Quality Assurance Activities

Market trends

Product planning

Design review

DesignPrototype evaluation/approval
Purchased goods

Management of purchased goods

Manufacturing*OMJOFRVBMJUZDPOUSPM 2$

Inspection

Improving inspection techniques

Shipment/delivery

Feedback to each activity

Customers’ needs$PMMFDUJOHmFMEEBUB
BOEBGUFSTBMFTTFSWJDFT

Customers

Activities Supporting Quality Assurance
Human resourcest1FOFUSBUJPOPGOCHIBO HIROI spiritt*NQSPWFNFOUPGUFDIOJDJBOT
ethical awarenesstEducation on quality and reliabilityt*NQSPWFNFOUPGRVBMJUZmSTU
awareness...

Technologiest2VBMJUZSFMJBCJMJUZDPNNJUUFFtProduct safetytObservance of technicalregulationstAssessment of quality
management...

Organization & control
t$POUSPMPGEFGFDUJWFQSPEVDU
accidentst2VBMJUZmSTUDPOUSPMTZTUFNtOCHIBO HIROI (gleaning)t1SPEVDURVBMJUZJNQSPWFNFOU...

* In-line QC: Review and verification for identifying potential defects at development and prototype stages of product lifecycle

OCHIBO HIROI: Human Resources / Organization & Control
OCHIBO HIROI (gleaning) is Hitachi’s program for adopting the customer’s perspective whenreflecting on past accidents and working to prevent reoccurrences. Started in 1951 as a council
at the highest levels of company management for reviewing serious accidents, the credo of thisprogram is “the spirit of OCHIBO HIROI is customer satisfaction” and “don’t put a lid on mistakes
or problems.” The direct technical and motivational causes leading up to accidents are thoroughly
investigated to ensure that there is no future reoccurrence. Similar products are also examined toprevent the same kind of accident.
Employee Training to Improve Quality and Reliability: Human Resources
At the Hitachi Group, we develop courses tailored to every technical and skill level for divisions
involved with design and quality assurance, including “Reliability: Fundamentals and Applications,”“Product Safety,” and “Engineering Ethics.” Our “Engineering Ethics” course introduces managers
to the views of experts and reviews examples of applied ethics. As well, discussions are held on
real-life workplace issues, recognizing that it is vital for every engineer to think and act ethically as
an individual. More than 40,000 employees have taken our general e-learning course “Introduction
to Engineering Ethics.”
Individual production facilities have also been implementing their own employee training
programs for specialized skills. At Hitachi Ltd., Hitachi Works, for example, we have set up a
training center to upgrade manufacturing, inspection, and maintenance skills and also provide
young quality assurance employees with practical training in “QC seven tools.”†2 As well, lectures
are given by experts on such topics as “Attitude for Quality Assurance Personnel.”†2 QC (quality control) seven tools: Seven statistical methods needed to pursue quality control: (1) pareto
diagram, (2) cause-and-effect diagram, (3) histogram, (4) checklist, (5) scatter diagram, (6) control chart, andHitachi Group Corporate Social Responsibility Report 2008 | Next Society | Monozukuri and Services from the Customer’s Perspective 036

(7) stratification (grouping of data by common factors)

QC training

Improving Product Safety: Technologies
The Hitachi Group is dedicated to providing safe products and services by combining wide-ranging
expertise with technologies covering planning, research, design, manufacturing, quality assurance
and maintenance.
When developing products, our top design and verification priority is the safety of life, healthand property. For example, we design consumer electronics with safety mechanisms to prevent,if a component fails, serious injury due to fire or electric shock. We also do forced ignition testing
to confirm product safety in the unlikely event that a product catches on fire, and take othersteps to ensure thorough safety precautions. Risk assessments are done based on broad-based
cooperation among Hitachi divisions and research laboratories.
TopicsHitachi Appliances Wins METI First-Place Award for Companies
That Have Contributed to Product Safety
Hitachi Appliances, Inc., a Group company that makes home electronics, won METI’s first Award for
Companies That Have Contributed to Product Safety, placing first in the Large Manufacturers and Large
Importers Division. This award, established during 2007, was presented by METI Minister Akira Amari lastNovember. It encourages independent action that promotes product safety, fostering a safer, more securesociety.
Hitachi Appliances received the award for many safety-related activities, including using systems thatgauge acceptable levels of risk and systems that recognize employees who discover faulty products, aswell as educational programs that help employees identify, assess and experience incidents related to
product safety.
Photo: Award ceremony Image: Logo mark for “companies that have contributed to product safety”

Hitachi Group Corporate Social Responsibility Report 2008 | Next Society | Monozukuri and Services from the Customer’s Perspective 037

Promoting Compliance with Technical Laws: Technologies
Amid widespread concern over product liability and the environment, relevant laws have become
increasingly complex. The Hitachi Group is actively engaged in promoting compliance withtechnical laws for manufacturing. Based on the three core themes of understanding legal trends,
developing quality management systems compliance, and raising compliance awareness, Hitachi
has developed a “legal map” linking products with the applicable laws, and is working to keep
all production facilities fully informed and up to date on changes in the legal environment. In
fiscal 2005, a compliance diagnosis system was developed, and by fiscal 2007, 17 offices had
implemented this system for self-evaluation and diagnosis. We plan to use this system in all Group
production facilities.

Product Development Process

Planning

Specifications

Improving processes

DesignPurchasing

Improving
implementation

Products andservices
Manufacturing

Monitoring
implementation of
improvements*

Successive
monitoring

Customers

Outline of Compliance Diagnostic System

Field

Evaluation of processes
and implementation
Compliance Diagnostic System* Monitoring with Hitachi’sCompliance guidelines

Hitachi-Quality Monozukuri through Improved Work Processes: Technologies
To provide excellent products and services, it is necessary to improve the quality of individual work
processes, such as planning, design, and manufacturing. For this reason, we constantly apply
and continually improve the PDCA†3 cycle during each process. At the Hitachi Group, we use thein-house developed Hitachi Evaluation System for Quality Management.
Through this system, the extent to which a project is following set processes and whether there
are problems with those processes can be determined quantitatively. This makes it possible to use
data on successful cases at other offices stored within the system, and to deal with the problems
that are uncovered. For business divisions requiring considerable improvement, a specialist teamevaluates the quality of processes and focuses on eliminating weak points. As of March 2008, thissystem was being used at 28 Hitachi offices and will be implemented at every Group company infiscal 2008.
†3 PDCA (plan-do-check-act): Operating an organization taking these four steps as a single process.

Hitachi Group Corporate Social Responsibility Report 2008 | Next Society | Monozukuri and Services from the Customer’s Perspective 038

Hitachi Evaluation System for Quality Management
Division

Framework( Work rules )Product development projectWork process
Plan Specifications Design Procurement Manufacture

Product

Implementation( Compliance with rules )Evaluation( Based on ISO 9001)

Improvement

Application of best practices
to other production facilities
Hitachi evaluation
system for quality
management system

Accumulation of best practices

Best practices

Response in Case of Product Malfunction or Damage: Organization & Control
If any of our products malfunction, we work to minimize adverse effects for consumers, mobilizing
all divisions affected to mount a rapid response. In serious cases, where consumer safety is
involved, we assess the scope of damage and thoroughly investigate the cause of the accident.
We then submit a status report to top management within 24 hours of the incident. Therefore, we
strive to implement a quick, appropriate response, while simultaneously sending timely reports to
the Ministry of Economy, Trade and Industry (METI) and publishing information about the incident
on our Web site.
If necessary, we recall a product over concern about possible malfunctions or accident,
then we make a public announcement through newspaper advertisements and/or Web siteannouncements to inform consumers about repairs or exchanges.
Response Flow in the Event of Product Malfunction
Obtaining information

Quality Assurance Division

Customer liaison

Fire department, police department

Company officers

Ministry of Economy,
Trade and Industry

Confirming
accident status
Investigative committee on
serious product accidents

Flow of information

ReportOnsiteinvestigation
Product
investigation

Investigation ofdamage scope

Decision concerning
serious product accident

Product recall
Serious productaccident

Disposition and reporting

Investigation of
cause

Customer

Accident
occursNewspapers
Web site
Notification

Sharing of information

Hitachi Group Corporate Social Responsibility Report 2008 | Next Society | Monozukuri and Services from the Customer’s Perspective 039

Building Customer Feedback into Our Products
We made our Customer Satisfaction (CS) Management Guidelines one of the pillars of business
management, and we continue to improve CS, with the goal of “creating innovation throughcollaboration with customers.” We use customer satisfaction surveys tailored to each business
operation, then analyze the opinions submitted, and incorporate this information into productdevelopment and business activities.
Customer Satisfaction Management Guidelines• Our customers determine the value of products and services• Information from our customers is the source of improvement• Offer prices and quality that are competitive• Respond rapidly to keep our promises to our customers• Adopt systems that prevent accidents and minimize their impact
Formulated in 1994

CS Activities of the Information & Telecommunications Systems Group
Using the concept of uVALUE,†4 the Information and Telecommunications Systems Group is
working to bring about a more prosperous society by “collaborating to create the best value forour customers.” Beginning with the customer’s perspective, we take annual surveys to evaluate
our products and services. Within the company, employees make evaluations to better understandcustomer needs and issues, as well as the quality and speed of our response to requests. We also
survey employee opinions on the workplace environment, which includes internal communications
and decision-making speed. The results are combined with the customer surveys and analyzed
from many perspectives to assess how Hitachi’s activities are reflected in customer satisfaction,with the goal of making improvements.
The customer surveys for fiscal 2007 were reorganized to help customers respond moreeasily to the Information & Telecommunications Systems Group, and we have begun to send to
customers any findings that they might find interesting or useful. Through these efforts, we areraising employee awareness, promoting communication within the Hitachi Group, and incorporating
the customer’s viewpoint into our operations.
For the fiscal 2007 customer survey, we obtained customer understanding and cooperation forgiving, in an amount equivalent to the compensation that would have gone to survey respondents,
a donation to the non-profit organization Good Earth Japan (see page 59).
†4 uVALUE is an operational concept that combines the Hitachi Group’s diverse business activities with IT.
This approach—working toward the realization of a richer society—is intended to create value in a society
characterized by ubiquitous IT.

Hitachi Group Corporate Social Responsibility Report 2008 | Next Society | Monozukuri and Services from the Customer’s Perspective 040

CS Efforts in the Information & Telecommunications Systems Group

Correct incorporation intouVALUE-based operations

Employee attitude survey

Achievinga higher order of CS

Employee self-evaluation

Requests/demands

Suggestions/complaints

Society, customers
Collaboration to create value

Synthesis of survey results

Customer questionnaires

CS Activities for Home Appliances
Hitachi receives various opinions, including questions and complaints, from customers regarding
home appliances, such as plasma TVs and washing machines, via Hitachi Answer Center anda Web site. Hitachi Appliances, Inc., which handles Hitachi’s home appliance business, hasdeveloped a system for carrying customers’ voices into the development of new products andservices. Hitachi Answer Center receives more than 530,000 emails a year. All customer callson product selection, repairs, questions, and complaints are kept in computer files and can besearched and indexed as needed.
In addition, consumer questionnaires are conducted on products in use, and the opinions
received are incorporated into the design of new products and services.
Voice of Customer Flow Chart
Repair request

Information on after-sales services

Individual business groups
Quality assurance department

Feedback on improvements

Customers

Response

Service
Information
CenterInformation sharing
Design department

Inquiry
Response: Response activities

Customer
SupportCenterInformation sharing
Filed in database: Flow of information

Feedback

Manufacturing department: Sharing of information

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How Customers’ Voices Are Reflected in Hitachi Appliances, Inc.

In products and services

In creating easy-to-use
products
In developing humanresources

E-wave (intranet)

Checking customer information on new products andcomplaints reported from various sections of the company
and using this information for product planning and service
improvement.

Voice of Customer Solution (VCS) Meetings

Regular discussion meetings to respond to customer
dissatisfaction chaired by the president and attended by theheads of business groups and executives representing design,
manufacturing technology and quality assurance departments.
The meetings are convened four times a year.

Lifestyle Research Center

Ease-of-use and design of prototypes and production models
are tested by consumers, and the information is used increating future products.

CS Dojo (training for improving customer
satisfaction)

Employees are given an opportunity to directly hear the voicesof consumers. For example, designers go to the Hitachi
Answer Center to listen to the voices of customers, and thenincorporate their perspective into new designs.

Response to Product Defects: Free Repair of Electric Heating Coils
Some of the 177,073 single and multiple electric heating coils that Hitachi manufactured from 1984
through 2004 unintentionally caused fires. The fires were caused because the ON switch protruded
from the coil body, and therefore was prone to inadvertent contact with objects and people. The
coils turned on accidentally, and in some cases, ignited material placed on top of them.
In response, Hitachi Appliances and Hitachi Housetech, both manufacturers and sellers of
the coils, set up an electric heating coil countermeasures headquarters, and, through TV andnewspaper ads, gathered information from consumers and are now making improvements in theswitch design.
In addition, 13 companies in the electric heating coil industry (including the two Hitachi
companies) established the Council on Electric Heating Coils for Small Kitchen Units in June 2007,
which jointly published newspaper ads, and investigated and implemented measures to preventa reoccurrence. As of January 2008, 61.2 percent of the Hitachi-manufactured units had been
repaired or recalled. To prevent further accidents and strengthen product safety, these efforts willcontinue.

Universal Design
Universal Design (UD) is the concept that all products and services should be useable by anyone,
regardless of age, gender, nationality, or disability.
The UD perspective is essential because Hitachi is deeply involved in society and in people’s
daily lives in wide-ranging ways: consumer electronics, information services and public systems.
In order to offer better products and services, we continually make improvements through a threestep process of basic research, product development, and information/educational programs.
Universal Design Processes for Elevators
During basic research, we began by establishing a research objective based on what people arelooking for in an elevator, considered within the context of society and our business operations.
Then we went out into the community accompanied by people who have vision or hearing
disabilities, or those in wheelchairs, to observe and study firsthand how they use elevators.
We also surveyed 358 people by questionnaire, including the elderly, wheelchair users, andforeigners living in Japan. We then analyzed the results to pinpoint the problems that these people
were experiencing.

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During product development, we prioritized the problems that were revealed and began
studying and proposing specific solutions. Focusing on the solutions with the most promise, wecreated prototypes (full-scale test models) and had them evaluated by 120 subjects, including
people in wheelchairs, the elderly, the vision or hearing impaired, and healthy people. On the basisof these evaluations, we adopted a number of ideas to be applied to product development, suchas a flashing destination floor button and a color LCD (liquid crystal display) indicator.
To inform and educate, we launched PR activities, such as product announcements, andheld presentations for customers and sales units to promote understanding of UD and to gather
feedback. At the same time, to spread the acquired knowledge about UD activities throughout
the company, we are standardizing the results of these efforts, creating “tools,” such as design
guidelines and a database.

Investigating how elevators are actually used

Studying elevator prototypes

Creation of a database, guidelines

Support forbusiness activities, education

Measures to inform and educate
PR, support for educational activities,
creation of guidelines & a databasePR activities

Application to products

Prototype creation & evaluation

Idea evaluation

Idea selection

Product development
Multiple monitoring studies and tests conducted using prototypes
and results incorporated into products

Analysis

Questionnaire surveys
Field studies

Basic researchStudies to characterize various
users and their behavior

Setting objectives

Customer needs, social context, business context

Process of Universal Design Activities

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Topics
Status Display System for Train Stations That Monitors Operational Anomalies
Universal Design is being used in many ways, including in foreign languages and Braille in ticket machines
at railway stations.
When an accident or delay occurs in the railway system, information is usually given out only throughPA announcements or in written messages. To convey this information in an easier way to understand,
Hitachi has developed a status display system that converts written information into graphic form,showing information on train delays on a map. This system was designed through repeated experiments
based on opinions received from station employees and train passengers, with the goal of making it asconvenient as possible. A glance at the display provides accurate information about train locations anddelays, helping non-Japanese speakers, the hearing impaired and others to grasp the situation—even if
they cannot understand or hear public announcements. By March 2008, 150 systems had been installedin 27 East Japan Railway stations. Plans are to install systems in all Tokyo metropolitan stations that have
50,000 or more passengers a day.
Image: Transport information screen of emergency display system
Photo: Emergency display system in Tokyo Station

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Communication with Shareholders and Investors
The Hitachi Group is dedicated to enhancing communication
with shareholders and investors while providing them,in a fair and appropriate way, with the information they needto make sound investment decisions

Policy on Information Disclosure
Hitachi, Ltd. communicates with shareholders and investors in accord with a disclosure policythat sets the following basic policy: Hitachi seeks to maintain and develop trust relationships
with its stakeholders, including shareholders and other investors, customers, business partners,
employees and regional communities. It will fulfill its responsibility to stakeholders by disclosing
information in a fair and highly transparent manner, and by conducting various communication
activities.
Hitachi discloses not only information required by laws or regulations, but also management
and financial information it regards as useful in deepening stakeholder understanding of Hitachi
management policy and business activities.
Disclosure Policy
1. Basic Policy
Hitachi’s corporate credo is to contribute to society through the development of superior, originaltechnology and products. With this in mind, Hitachi seeks to maintain and develop trust relationships withall stakeholders, including shareholders and other investors, customers, business partners, employees andregional communities. We will fulfill our responsibility to stakeholders by disclosing information in a fair andhighly transparent manner, and by conducting various communication activities.
2. Information Disclosure Standards
Hitachi discloses information as appropriate in a fair and highly transparent way, in compliance with the laws
and regulations of the stock exchanges on which the Company is listed.
Hitachi discloses not only information required by laws and regulations, but also management
and financial information that is regarded as useful in deepening stakeholder understanding of Hitachi
management policy and business activities. Hitachi also discloses non-financial information on the socialand environmental impact of Hitachi Group activities. Hitachi’s stance on disclosure recognizes that society
regards the above information as important.
3. Disclosure Methods
Hitachi uses appropriate means to disclose the information required by laws and regulations of the stock
exchanges on which the Company is listed. The Company also posts this information on Web sites
immediately after it is disclosed.
Hitachi also discloses information not required by laws and regulations by distributing news releases,
holding press conferences and presentations, posting information on Web sites, and conducting otherdisclosure activities in an appropriate, precise and timely manner.
4. Quiet Period
Hitachi stipulates a quiet period of a certain length prior to earnings announcements to prevent information
leaks and to maintain disclosure fairness. During this period, Hitachi refrains from answering inquiries aboutbusiness performance and related matters.

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5. Forward-looking Statements
For disclosures, Hitachi may make statements that constitute forward-looking statements that reflect
management’s views with respect to certain future events and financial performance at the time of disclosure
and include any statement that does not directly relate to any historical or current fact. Such statements are
based on information available at the time of disclosure and are subject to various risks and uncertainties.
Certain forward-looking statements are based upon assumptions of future events which may not prove
to be accurate. Hitachi discloses the factors that could cause actual results to differ materially from thoseprojected or implied in forward-looking statements.

Proactive IR Approach
Hitachi, Ltd. conducts a wide range of IR activities including corporate strategy briefings for
institutional investors and analysts, tours of production and R&D facilities, participation in investor
meetings sponsored by securities firms, and holding explanation meetings for individual investors.
In fiscal 2007, in addition to the financial information meetings for each fiscal quarter, Hitachi
held five business strategy explanation meetings in business fields such as electric power,
information and telecommunications, and flat-screen TVs. In May 2007, President Furukawa helda progress report meeting on “management of collaborative creation and profits” as an important
aspect of Hitachi’s management policy.
Hitachi management executives held more than 70 meetings with institutional investors
and analysts in Japan and overseas, including two visits to investors in the United Stations andEurope. As well, IR divisions in Japan and overseas held over 300 meetings during the year.
Hitachi is making every effort to feed back within the Group the opinions of institutional investors
and analysts voiced at these meetings and to ensure that they are reflected in management andbusiness administration.
In January 2007, Hitachi revised the Web site that provides information for shareholders andinvestors. We continue to disclose information in a timely manner, for example, by posting materials
used in various explanation meetings. On our exclusive Web site for individual investors, we alsoendeavor to provide information that promotes a deeper understanding of the Hitachi Group.

Business strategy explanation meeting on information and telecommunications

Publications Providing Business Information• Financial Statements• Financial Reports• Annual Reports• R&D and Intellectual Property Report• Business Reports• Financial Highlights (main financial data)• Hitachi Group CSR Reports• Form 20-F filed with the U.S. SEC

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General Meeting of Shareholders
At Hitachi’s Ordinary General Meeting of Shareholders, we offer audio-visual reports designed togive shareholders a thorough understanding of our situation. The President and Chief Executive
Officer reports on management matters and some of this information is posted on the Hitachi Web
site for shareholders and investors following the meeting.
To ensure that shareholders are able to study financial proposals far in advance, in addition tosending written notices of the convening of meetings, this information is also posted on the Web
site for shareholders and investors.
Investors
http://www.hitachi.com/IR-e/index.html

Trends in Shareholder Composition

March 2006

Other institutions
3.8

Financial institutions& securities firms

Individuals

Foreign investors

27.1

29.5

39.6

National &local governments
0.00

3.8
March 2007

27.6

28.1

0.00

40.5

3.7
March 2008

27.2

27.0

0.00

42.1

(Unit: %)Basic Policy for Prevention of Takeovers
The Hitachi Group invests considerable management resources in basic research for the future andfor the development of pioneering products and businesses. To ensure that these management
measures bear fruit, it is necessary to maintain the continuity of management policies over acertain period of time. To this end, Hitachi actively informs shareholders and investors not onlyof the management results of each term but also management measures looking ahead to the
future.
Hitachi, Ltd. does not deny the significance of stimulating corporate activities or the economy
through the transfer of management control rights. However, regarding purchases with the aimof acquiring large amounts of shares of Hitachi and Hitachi Group companies, it is necessary to
cautiously assess the impact that such a purchase or purchase proposal would have on Hitachi’s
corporate value and shareholders’ joint profits, based on considerations such as the purchaser’s
business profile, future plans and past investment behavior.
At present there is no imminent concern that any particular party will acquire a large amount of
Hitachi’s shares, and Hitachi has not established any special measures (“anti-takeover measures”),
should such a purchaser appear. Nevertheless, as a natural duty to our shareholders andinvestors, we constantly monitor Hitachi share transactions and movements, and if a party appears
attempting to purchase large amounts of shares, Hitachi will immediately take the measuresconsidered most appropriate. Specifically, this will involve assessing the purchase proposal withthe assistance of external experts, negotiating with the purchaser and, in the event that such anacquisition does not contribute to the corporate value and joint profits of shareholders, to promptly

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determine the need for and contents of specific countermeasures and set up a framework for theirimplementation. A similar response will be made in the event of any attempt to purchase large
amounts of the shares of any Hitachi Group company.

Results of External SRI†1 Assessments in Fiscal 2007
Institution

Index

Companies selected

EIRIS

FTSE4Good Global Index*

Hitachi Chemical Co., Ltd. / Hitachi Capital Corp. / Hitachi Metals, Ltd. /Hitachi Software Engineering Co., Ltd. / Hitachi High-Technologies Corp. /Hitachi Maxell, Ltd.

Morningstar

SRI Index

Hitachi, Ltd. / Hitachi Chemical Co., Ltd. / Hitachi Metals, Ltd. / Hitachi
Construction Machinery Co., Ltd. / Hitachi Information Systems, Ltd. /Hitachi Cable, Ltd. / Hitachi High-Technologies Corp. / Hitachi Transport
System, Ltd. / Hitachi Maxell, Ltd.

* FTSE4Good Global Index: An index developed in the UK by EIRIS, Ethical Investment Research Services, which evaluates corporations, apart from specific industries,
based on their environmental, social, and human rights performance†1 SRI (Socially Responsible Investment): An approach to investing where shares are selected partly on thebasis of criteria relating to corporate social responsibility (CSR)

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Working in Harmony with Local Communities
Nurturing People, Connecting to the Future: Based on these commitments,
the Hitachi Group engages in social contribution activities
in the areas of education, the environment and social welfare

Awareness of Social Issues
From global warming—and other environmental problems—to poverty and hunger, social issues
are intensifying. As a good corporate citizen, Hitachi looks for ways to help and take action. Using
our Social Contribution Philosophy and Policy, we have prioritized education, the environment, andsocial welfare. Making full use of human and physical resources, finances, and technology, wetake wide-reaching action: fostering family education and the healthy growth of children and teens;fostering young researchers; sponsoring international student and teacher exchanges; educating
people about the environment; assisting environmental NGOs; narrowing the digital divide; andhelping people with disabilities.
Hitachi, Ltd. and five domestic foundations have donated over 1.4 billion yen to fund thesesocial programs. Hitachi is committed to a broad range of initiatives that build a brighter future,
while developing our enterprise in harmony with society.
Social Contribution Philosophy and Policy
Philosophy
The Hitachi Group strives to demonstrate its corporate citizenship in response to social needs andexpectations, while endeavoring to enrich the quality of life and realize a better society.
PolicyThe Hitachi Group promotes various social contribution activities to build a vibrant society based on
fostering leadership to implement reformation for the next era. This is achieved by making optimal use of
our knowledge and information technology in three specific areas, namely, education, the environment, andsocial welfare.
Adopted Feburary 2002

Breakdown of Funding for Social Contribution Activities
Other

Social welfare
19%

Environment

Culture and the arts

4%
9%

25%

Total expenditure
1.412 billion yen
43%
Scholarships and education

Breakdown by field* Note: Data on Hitachi, Ltd. and fivedomestic foundations for fiscal 2006

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Approach to Social Contribution Activities
Individual fulfillment
Local
communities

Volunteer activities, etc.

Foundations

Active operations as Hitachi Group foundations
Dissemination of information

Enhanced brand value

Business partners

Actively engaging in social contribution activities to enhance brand value
Supporting the volunteer activities of employees
Social contribution activities that allow us to fulfill our duty to society,such as disaster assistance

Stockholders

Hitachi Group
companies

Vitalization of business activities
through more flexible thinking andgreater desire to work

Customers

Hitachi Group
employees

Realization of a better society

Social Contribution Activities of the Hitachi Group

Educational Initiatives
Hitachi runs a teacher exchange program, accepts international students and researchers, andconducts other initiatives on a global scale to help foster the next generation’s leaders. We also
devote much energy to science education, given that increasing numbers of young people areturning away from the sciences.
Education Case Study 1:
Hitachi Volunteers Implement Educational Support Program
Since 2005, the Hitachi Group has been conducting an educational outreach program on Universal
Design staffed by employee volunteers. Aimed at students in the higher grades of elementary
school, in 2007 the program was delivered 38 times in 19 locations in Tokyo, Nagoya, andYokohama. Hitachi president Furukawa participated in an outreach class at Komagome Public
Elementary School in Tokyo’s Toshima Ward on October 12, speaking to the children about theimportance of Universal Design. Plans are underway to both expand the program geographicallyand to take up a variety of other themes.

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VoicesPresident Furukawa Joins Volunteer Classes

Kazuo Furukawa
President and CEO of Hitachi, Ltd.

Participating in actual classes in this way, I was
excited by the flexibility and richness of thechildren’s imaginations. I hope they will learn theimportance of looking at things from the users’
point of view, and of being considerate to others.
Participating in a volunteer activity, I also felt that
it is becoming increasingly important to contributeto society and local communities using Hitachi’s
strengths in technology, services, and design. As
a global corporation, we must understand that it
is already a given that we need to contribute to
the creation of a more prosperous society. Our
ongoing participation in classes such as these has
deep significance because it not only contributes
to the education of the next generation, but also
communicates to them the passion that we at
Hitachi put into making things.
Photo: President Furukawa with students

Education Case Study 2:
Supporting Children’s Studies with a Web Site and Events
Since October 2000, Hitachi Maxell, Ltd. has operated Maxell Kids Wonder Library, a Web site
devoted to providing information and support for elementary and middle school children in theirstudies and in their daily lives, as well as publicizing various events sponsored by the company. In
addition, Hitachi Maxell has created an exhibit called Kids Wonder Rally at the Science Museumin Tokyo’s Chiyoda Ward that gives elementary and middle school students a chance to have fun
while they learn about the company’s products.
All of these activities are intended to support education that nourishes children’s sensibilities
and the richness of their imaginations, and to counteract the recently observed trend towards
declining interest in the sciences.

Events Sponsored by Hitachi Maxell
Event

PurposeResults

Battery-Powered Craft Competition

Learning the joy of making things and the properuse of batteries through construction of craft
projects using batteries

The 2007 competition had 119 entries, and thewinning projects were featured on the Web site

Mediapost Competition

Encouraging freedom of expression through using
information technology

A winner of the 2007 Minister of Education,
Culture, Sports, Science and Technology Award
of Encouragement

Campaign to Check and Replace
Batteries in Emergency Alarms

Increasing the awareness of emergency alarms
and instilling the habit of checking batteries

In three campaigns so far, replacement batteries
have been provided to 18,300 first graders in
271 elementary schools

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Maxell Kids Wonder Library educational Web site

Kids Wonder Rally exhibit at the Science Museum

Education Case Study 3:“Science Kids”: A Radio Program Encouraging Children’s Interest in Science
To bring science education to children and youth, Hitachi High-Technologies is sponsoring “Science
Kids,” a radio program (on Nippon Cultural Broadcasting, or NCB, a Japanese radio station) aimed
at elementary school students. The concept is to present science as “an exciting field, rich in
new discoveries and the appeal of mystery solving,” encouraging children to experience and learn
the wonders of science. During the 2007 summer school vacation, a special event was held at
NCB’s event hall where about 40 elementary school students were invited to watch the tapingof a broadcast, take part in a science experiment show, and have some hands-on experience
with the Miniscope,® a desktop electron microscope developed by Hitachi High-Technologies. It is
hoped that these experiences of Hitachi Group technology will stimulate the younger generation’s
budding interest in science.

Hands-on experience with the Miniscope,® a desktop-size electron microscope

Education Case Study 4:
Hitachi International School Teachers Exchange Program (HISTEP)
The Hitachi Group has been actively implementing HISTEP, a cross-cultural teacher exchange andeducational project intended to promote communication and cultural understanding among North
American, European and Japanese teachers. The goal is to create deeper relationships between
Hitachi and local communities. The HISTEP program facilitates cross-cultural communication byhaving Japanese, European, and North American teachers visit each another’s classrooms, talkwith one another, and participate in special classes. In the 21 years since this program began, 261
teachers from Japan, North America, and Europe have participated.

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Part of HISTEP is an educational forum sponsored by Hitachi, which was held in July 2007 at
the Keidanren Kaikan in Tokyo’s Chiyoda Ward. The forum was attended not only by European
and North American teachers participating in HISTEP, but also by some 130 representatives ofthe Ministry of Education, Culture, Sports, Science and Technology, the National Institute for
Educational Policy Research, education-related NGOs, and academics. The theme of the forum
was “How Can Education Increase Communication?” The keynote speech was delivered by
Kazuhiro Fujiwara, then principal of Wada Junior High School in Tokyo’s Suginami Ward, while
Mayumi Ujioka of the editorial board of the newspaper Asahi Shimbun served as the facilitator of
the forum’s discussions, which ranged from issues of communication in the IT era to the roles ofschools, communities, and families in improving communication through education.

A HISTEP special class

Education Case Study 5:
The 10th EU Hitachi Science & Technology Forum on the Theme of “Environment”
The tenth EU Hitachi Science & Technology Forum was held in Paris in May 2007. This was avenue for experts from government, the private sector, and academia to debate and propose
ways for science and technology to help resolve European issues. Each year there is a different
theme in a different country. This tenth anniversary forum, for about 150 people, had the theme“Energy, Environment, and Sustainable Society.” Presenters included Neil Hirst, director of Energy
Technology and R&D at the International Energy Agency; Kathryn S. Fuller, chair of the Ford
Foundation Board of Trustees; and the University of Tokyo’s Professor Ryoichi Yamamoto. The
proceedings report was distributed to the European Commission and the European Parliament.

A photograph of the forum

Environmental Initiatives
The Hitachi Group’s social contribution activities protect the environment and foster anenvironmentally oriented mindset, with the aim of realizing a sustainable society.
The Environmental Case Study 1:
Promoting Afforestation around the GlobeIn September 2007, in cooperation with Green Network, a non-profit organization (NPO), 19 Group

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employees and family members volunteered for an afforestation project in the Horqin Desert in
China’s Inner Mongolian Autonomous Region. They learned about desertification there—thought
to be one of the sources for dust and sand blown as far as Japan—and about the importanceof restoring desert plant life. Then, cooperating with Japanese language students from the Inner
Mongolian University for the Nationalities, they planted poplar and elm trees and cared for treesthat had been planted before. Together, they deepened communication and friendship with thelocal people, and raised awareness among Hitachi employees about the value of volunteering.
Hitachi, Ltd. is a special sponsor of the Forests for the Future Project in Thailand organized by
the Foundation for Global Peace and Environment. This project, part of the Billion Tree Campaign,is a global initiative proposed by the UN Environment Programme (UNEP). During 2008, employees
and family members of local Hitachi Group companies will plant trees in Thailand's Sirindhorn
International Environmental Park.

Afforestation project in China’s Horqin Desert

Environmental Case Study 2:
Tree Planting in the “Forest of Ease”
Hitachi Engineering and Services Co., Ltd. has responded to the Forestry Agency’s Corporate
Forests program by leasing 2.1 hectares of nationally owned forest in Ibaraki Prefecture. Beginningin fiscal 2007, trees were planted on this property, dubbed the “Forest of Ease.” Already, in thecourse of the past fiscal year, 300 employees and family members have planted some 6,200
cryptomeria and cypress trees. This project is intended to continue for the next 60 years,
contributing to the preservation of the local environment.

Planting trees in the “Forest of Ease”

Environmental Case Study 3:
Green Curtain Project
Hitachi Chemical Co., Ltd. has adopted the Green Curtain Project as the centerpiece of its efforts
to contribute to society, and is expanding this participation throughout the Hitachi ChemicalGroup.
The green curtain concept uses vines and other climbing plants to cover windows and walls of

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buildings, cutting exposure to direct sunlight and at the same time using the natural transpiration†1from the leaves as a coolant. When it was initiated on an experimental basis at Namie Hitachi
Chemical Co., Ltd. in the summer of 2005, it reduced the building’s expenditure for electricity by
20% from the same period the previous year. In fiscal 2007, this project was expanded to nine
worksites of five Group companies. In fiscal 2008, the number of sites is expected to double. With
the cooperation of the NPO Green Curtain Support Group and government agencies, plans areto broaden the concept to employees’ homes and to schools, to raise eco-consciousness, andbroaden the project’s scope.
†1 Transpiration: the evaporation of water from the aerial parts of plants, such as the leaves, after it has beendrawn into the plant from the roots. When a green curtain is in place, the heat-absorbing effect of transpiration
lowers the temperature in the vicinity of the leaves, producing a pleasant coolness.

Example of a green curtain in place

Environmental Case Study 4:
Beautification Activities by Employees near Their Workplaces
In May 2007, Hitachi Capital Corporation began a campaign of volunteer environmental activities
by the employees of all Hitachi Capital Group companies. September and February are designatedbeautification months to clean up near workplaces, collect cardboard and plastic bottle caps forrecycling, and to donate to charity any proceeds from recycling.
In fiscal 2007, about 1,000 employees from 20 sales offices and Group companies acrossJapan participated in this program, organized by the environmental activities leaders at each
workplace.
The motto for Hitachi Capital’s social contribution activities is “Once you’ve made a start, nomatter how small, never quit. There’s value in sticking with something.” And that is what they
intend to do in the future.

Volunteers taking part in beautification activities near their workplace

Social Welfare Initiatives
Hitachi engages in these activities to create a better society by enriching lives—through support

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for the healthy development of young people and activities that help the socially and economicallydisadvantaged reintegrate into society.
Social Welfare Case Study:
Wheelchair Basketball Workshop
Since 2005, the Hitachi Group and the Japan Paralympics Caravan Executive Committee havejointly sponsored the Hitachi Group Wheelchair Basketball Experience Workshop. This programis intended to nurture a richer sense of humanity and raise awareness of participation in sportsby physically challenged people. It gives participants the opportunity to both watch and playwheelchair basketball and to meet and talk with wheelchair basketball athletes.
The third of these events, held in the city of Sendai in February 2008, was attended by about
100 local elementary school students and 10 Hitachi Group employees and family members.
Everyone got a good workout, as they were amazed and impressed by the difficulties of this sport,such as passing and shooting using only the upper body.

The Hitachi Group Wheelchair Basketball Experience Workshop

Six Foundations Promote Diverse Activities
Hitachi has six foundations located both in Japan and the U.S. that are active in many areas,
including promoting family and science education, inviting university teachers and researchers
from Southeast Asia, protecting the environment, supporting the healthy development of young
people, and working on corporate citizenship initiatives in the U.S.
Hitachi’s Foundations• The Odaira Memorial Hitachi Education Foundation• The Hitachi Environment Foundation• The Kurata Memorial Hitachi Science and Technology Foundation• The Hitachi Mirai Foundation• The Hitachi Scholarship Foundation• The Hitachi Foundation (U.S.A.)
Hitachi’s Foundations
http://www.hitachi.com/Int-e/skk/hsk10000.html

Foundation Case Study 1:
The Hitachi Environment Foundation:
A Forum for Activity Reports by Assisted Environmental NPOs
In 2002, The Hitachi Environment Foundation initiated an Environmental NPO Assistance Program
to provide financial assistance to NPOs, NGOs, and other voluntary organizations whose activities

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correspond to the foundation’s focus on “harmonizing the environment and the economy” and“harmonizing the environment with science and technology.” In December 2007, organizations
receiving financial assistance in the first through fifth years (2002–2006) of the program convened
a forum to report on their activities. The keynote address, given by Junko Edahiro, Co-Chief
Executive of Japan for Sustainability, was followed by activity reports from 14 NPOs receiving
Hitachi Environment Foundation assistance. A poster-making session after the presentations wasanother way to raise awareness and share information among the participants.

Forum for Activity Reports by Assisted Environmental NPOs

Foundation Case Study 2:
The Hitachi Scholarship Foundation:
Support for Human Resource Development in Southeast Asia
The Hitachi Scholarship Foundation, established to support training for those who will create thefuture of Southeast Asia, sponsors a variety of programs: scholarship support enabling university
faculty members from six Southeast Asian countries to study in Japanese postgraduate programs;
the invitation of researchers in the natural, human, and social sciences to come to Japan as visiting
research fellows; financial assistance to recent graduates; and others. From its establishment in1984 through the end of fiscal 2007, the foundation has invited 138 Southeast Asian university
faculty members to Japan. Of these, 123 have returned to their countries and their faculty
positions, and in addition to their teaching and research duties, are active in promoting academic
communication and cooperative research with Japanese universities. The graduation ceremonies
held each year for the scholarship students also provide a venue where the students, their faculty
advisors, embassy personnel from the home countries, representatives and employees of the
Hitachi Group, and student’s host families in Japan can all meet and get a chance to know one
another.

President Furukawa chats with scholarship students at the graduation ceremony

Hitachi Group Corporate Social Responsibility Report 2008 | Next Society | Working in Harmony with Local Communities 057

Voices
Supplementing Research by Learning about
Japanese Traditions and Culture

Tanyanubab Anantana
Faculty member, Chiang Mai University, Thailand
Enrolled in the doctoral program in the Department
of Industrial Engineering and Management,
Tokyo Institute of Technology

My research topic is Empirical Analysis of New
Product Development and Its Effectiveness,
and I am currently collecting survey data on theJapanese manufacturing industry. One of theattractive aspects of this activity is that I get tomeet and work with a lot of different people.
I have been in Japan for a year and threemonths, and have been learning not just about
my research topic but also about Japanesetraditions and culture. When I first got here, I wasa bit confused by the Japanese working styleand communication with Japanese people, but inthe course of my daily life and studies, it has all
become more familiar to me. When I return to myuniversity in Thailand, I hope to be able to passon to my students what I have experienced andlearned here.

Partnerships with NPOs
Participation in the NPO-IT Promotion Council
The Information and Telecommunications Systems Group of Hitachi, Ltd. is participating in the
NPO-IT Promotion Council, created at the instigation of Microsoft Corporation and the NPO
C’s (Coalition for Legislation to Support Citizens’ Organizations).†2 The council, with participantsfrom IT companies, NPO support organizations, and the community of IT engineers, assists inthe effective use of information technology by NPOs, and is sponsoring a variety of events andseminars for that purpose.
†2 C’s (Coalition for Legislation to Support Citizens’ Organizations): An independent non-profit organization
established in 1994, C’s was instrumental in passing, and have played a main role in revising, the NPO Law
and the system for certified non-profit organizations. C’s has continued to play a key role promoting thecreation of institutional support for civic action.

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Voices
Supporting NPO Activities with Information Technology
According to Masaatsu Takehara of Microsoft, “As part of our global CSR activities, we’ve begun to giveassistance with information technology to NPOs, which tend to have meager operational bases and IT
infrastructures. By pooling the resources of a lot of organizations and results, we hope to expand ourpartnership and give employees of our member companies an opportunity to get involved with NPOs.”
Akira Matsubara of C’s had this to say: “NPOs in general are not strong in disseminating information,
so they have high hopes for contacting people from the corporate world and getting some advice atseminars and at other venues. In order to create new relations for cooperation and mutual benefit among
the member companies and participating NPOs, we are asking everyone to keep cooperating by sharing
their know-how and experience by taking the opportunity to pass on information.”
Through these activities, we are studying the best ways for us to connect and cooperate with NPOs.

Masaatsu Takehara (right)
Manager, Corporate Social Responsibility Office
Strategic Planning Department
Legal Affairs and Strategic Planning Headquarters, Microsoft Japan
Akira Matsubara (left)
Executive Director
C’s (Coalition for Legislation to Support Citizens’ Organizations)

Hitachi Construction Machinery Fully Supports Good Earth Japan
Hitachi Construction Machinery and Yamanashi Hitachi Construction Machinery have been
manufacturing anti-personnel land mine clearance equipment. Simply clearing land mines does
not help the living conditions of local people in developing countries. From the years of civil war,
land mines still buried under the ground, together with the poor agricultural environment, havedestroyed the lives of local people throughout Cambodia. Hitachi’s goal is to make ex-minefields
safe so children can play with happy smiles. In March 2007, the NGO Good Earth Japan wasestablished to help Cambodian people achieve self-reliance. Hitachi Construction Machinery gives
great support to Good Earth Japan. Good Earth Japan started with agricultural training and built
schools at Slab Pang village, Battambang Province.

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Mine-clearing machinery at work in Cambodia		An agricultural training class

Support for Volunteer Activities
Hitachi supports employees taking the initiative to engage in volunteer activities by giving theminformation, their time, and financial assistance.
Hitachi provides information about volunteer activities through seminars, the company intranet,and other media. In fiscal 2007, we sponsored seven seminars. Hitachi has instituted special annual
paid vacation time (in addition to regular annual paid vacations) that may be used for volunteer
activities or other forms of personal growth. Financially, there is a twice-annual volunteer support
program called “The Growing Tree” that provides financial assistance for the activities of non-profit
organizations in which Hitachi employees are volunteering or actively participating. In fiscal 2007,
assistance was given in 21 cases, for a total of 4 million yen.
Overseas Social Contribution Activities
Activity

Promoting Campany

Activity Content

Hitachi Community Action PartnershipDay designated by city of Tarrytown, NY

Hitachi Group (North America)

The city designated May 11 as Hitachi Community Action Partnership Day inrecognition of years of social contribution activities by CAC.*

Wearing jeans and pink clothing,employees collected money for charities

Hitachi Europe Ltd.

Fundraising for a variety of causes has been carried out: “Jeans for Genes Day”
for children suffering from genetic diseases; “Wear Pink Day” for the elimination ofbreast cancer; and “Movember” for raising awareness of prostate cancer. Employees
participated wearing jeans or pink clothing, growing beards, etc., seeking to expand
the circle of charitable involvement. In fiscal 2007, they raised £1,060 (about
230,000 yen).

Recipient of the Investment in People
Award

Hitachi Asia Ltd

Received the Investment in People Award intended to encourage the entrepreneurial
spirit. This award was given by the Foreign Minister of Malaysia in recognition of thescholarship program for overseas exchange students, the program for nurturing thenext generation of Asian leaders, and other contributions.

Support for education in Thailand

Hitachi Group (Thailand)

A donation of 200,000 baht (about 750,000 yen) was made to Thai-Nichi Institute ofTechnology in Bangkok to contribute to the fostering of Thai human resources and thedevelopment of the Thai and Japanese economies.

Given an award by Singapore’s National
Council of Social Services

Hitachi Group (Singapore)

In recognition of many years of support (beginning in 1991) for the Orchard Road
Christmas Light-up, a Community Chest award was received from the National
Council of Social Services of Singapore. Donations raised from the public during thelight-up event and contributions from the Hitachi Group are supporting more than
150 welfare programs, including support programs for children, physically challenged
people, and elderly citizens.

Donation of a dormitory to the Hitachi
Hope Elementary School

Hitachi (China) Ltd.

A dormitory building for students from distant locations was completed in November
2007 and donated to this Hitachi-supported school in the suburbs of Shanghai.

Assistance for Chinese university
students

Hitachi Chemical Co., Ltd.

Scholarships were awarded to students at Shanghai Jiao Tong University withoutstanding academic records and whose families’ economic situation made itdifficult to meet tuition and other costs. In fiscal 2007, scholarships were given to five
students. In fiscal 2008, the amount of the scholarship awards is expected to double,
and the program is to be extended to students at Tsinghua University, as well.

Donations for blizzard relief in China

Hitachi Group (China)

To provide relief from the disastrous blizzard of Januray and February 2008, 500,000
yuan (about 7,500,000 yen) was donated through China’s Ministry of Commerce.

* CAC: Community Action Committees formed by North American employees of Hitachi Group companies

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Collaborative Creation with Suppliers
The Hitachi Group procures raw materials, parts, and services
from companies all over the world.
By forging strong partnerships with these suppliers,
we aim to provide highly reliable products and services

Sharing CSR Awareness
The Hitachi Group values partnership and openness with suppliers. We are committed tomaintaining and improving the mutual understanding and trust of our suppliers over the long term.
While providing equal business opportunities, we select suppliers from around the globe based on
the principle of open competition.

Implementation of Survey of Suppliers’ CSR Promotion
In 2005, we revised the Guidelines for Procurement and Business Transactions—the basis of ourbusiness transactions—and asked about 5,000 suppliers worldwide to conduct CSR activities inline with these guidelines. In 2007, using the Supply Chain CSR Deployment Guidebook createdby Japan Electronic and Information Technology Industries Association (JEITA), we issued aquestionnaire on CSR promotion by our main suppliers (about 140, including global corporations).
We will build a database of the results of this survey and share this information throughout theGroup. We have also asked our suppliers to perform information security audits.
Guidelines for Procurement Activities
These guidelines define business transaction standards which shall be applied to all HITACHI executives
and employees in connection with their activities purchasing necessary materials, products, services, andinformation from outside sources.
1. Overall procurement activities of Hitachi shall adhere to the “HITACHI Company Conduct Standards.”
2. HITACHI shall maintain proper partnerships, mutual understanding, and reliable relationships with
suppliers with a view to the long term results.
(1) HITACHI shall treat all suppliers impartially and be prohibited from favoritism such as giving unfair
priority to any specific suppliers.
(2) HITACHI respects fair business dealings with suppliers and will avoid any improper act which mightcause a loss to a supplier apart from normal and customary business transactions(3) HITACHI shall keep suppliers’ trade secrets strictly confidential and prevent them from being
revealed or improperly used.
3. HITACHI develops suppliers to maintain competitiveness from a worldwide point of view.
(1) HITACHI responds to all suppliers’ offers sincerely, and is always willing to offer the informationnecessary for suppliers to complete on an even playing field.
(2) HITACHI shall periodically check and review suppliers’ performance and will consider offering moreadvantageous business opportunities when comparison with other resources allows.

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4. Through a designated selection process, suppliers shall be evaluated by product quality, reliability,
delivery, price, suppliers’ business stability, technical development ability, fair and transparent information
release, compliance with societies’ rules, regulation compliance, respect for human rights, environmental
preservation activities, social contributions, good working environment, and recognition of social
responsibilities with business partners.
(1) HITACHI shall not request quotations from a supplier with whom there is no intention to enter into afuture business relationship.
(2) In accordance with specified internal procedures, the role and responsibility for specifications,terms and conditions, product acceptance and inspection belongs to each Requester,
Procurement Department and Inspection Department.
(3) Procurement Departments shall be a representative of HITACHI when contracting with suppliers.
5. HITACHI members are prohibited from receiving any personal gifts or offers from suppliers.
Revised in April 2005
* All companies in the Hitachi Group act in accordance with these guidelines. In the Corporate Ethics and Compliance Handbook, revised in February 2008, we statethat we will not procure from suppliers that use child labor or forced labor, and this has been disseminated throughout the Group.

Promoting the Use of Environmental Management Systems by Suppliers
For green procurement,†1 we encourage all suppliers that are using environment management
systems (EMSs) to acquire certifications. For small and medium-sized suppliers using EMSs, we
support the acquisition of simpler EMS certification, such as KES,†2 Eco Stage†3 and Eco-Action
21.†4 In partnership with suppliers, we organized the MMM Club†5 with these suppliers as members,
using information exchanges and training courses to promote qualitative EMSs improvement.
For handling chemicals, for which regulations, etc., are becoming stricter throughout the world,
we require suppliers to manage them meticulously, to accumulate information on chemicals in
Hitachi Group products in every process of corporate activities, and to record all this informationin the product chemical content management system. This information is shared and used within
the Group.
†1 Green procurement: The procuring of parts and materials with reduced environmental impact from suppliers
that are actively protecting the environment.
†2 KES: A Japanese environmental certification system administered by the KES Environmental Organization,
an NPO.
†3 Eco Stage: An assessment system being promoted by the Eco Stage Institute to support environmental
management. Eco Stage is a registered trademark of Mitsubishi UFJ Research & Consulting Co., Ltd.
†4 Eco-Action 21: An environmental certification system operated by the Institute for Global Environmental
Strategies, based on the Eco-Action 21 Guideline formulated by the Ministry of the Environment.
†5 MMM Club: An organization run primarily by suppliers who have acquired KES environmental certification
through Hi-KES activities. The three Ms come from the first letter of mottainai (reducing wastefulness).
Green Procurement Guidelines
http://www.hitachi.com/environment/library/pdf/en/pdf/green5.0pg.pdf

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Hitachi Environmental Certification Scheme

Eco Action 21

Eco Stage

Registered as Green Supplier

KES
Promoted by Hitachi, Ltd. in cooperation with the KES Certification Division

Register with Green Procurement System

ISO 14001

VoicesEmployees’ Environmental AwarenessImproved by KES Acquisition

Kazufumi Watanabe
President and CEO, Taiyo Kogyo Co., Ltd

Based in Ibaraki Prefecture, Japan, Taiyo Kogyo
uses precision sheet metal processing technology to produce enclosures for large-capacity
data storage devices and automotive devices.
The company had been promoting environmental
activities since the 1990s. After taking part in a
Hitachi environmental seminar for suppliers, thecompany applied for KES Step 2 and obtained
certification in 2005.
President and CEO Kazushi Watanabe commented: “With improving employee awarenessas our theme, we have been using employees’
ideas and steadily working toward our goal as
an extension of the small-scale group activities
we have been conducting for the past 40 years.
These activities include saving energy by having
each division draw up an electricity management
chart and sorting trash using colored labels. We
have always engaged in dialogue with Hitachi andthey have advised us on how to conduct environmental activities. I gave a report on these achievements at an MMM Club meeting.”
Photo below: Trash boxes with colored labels

Partnerships
Collaborative creation (joint activities) with trustworthy, technologically advanced suppliers isessential for product development. Hitachi strengthens partnerships with suppliers throughtechnology exchange meetings and meetings on business plans and supply policies in eachbusiness group. The Hitachi Partner Day is held once a year to promote policy and strategy
sharing, as well as mutual understanding between the president and top executives of Hitachi’sbusiness groups and top executives of our main suppliers. In fiscal 2007, about 160 executives
from 69 suppliers took part in the Hitachi Partner Day.
The Hitachi Group carries out joint development with suppliers that possess cutting-edge

Hitachi Group Corporate Social Responsibility Report 2008 | Next Society | Collaborative Creation with Suppliers 063

technologies. We also provide guidance and support to a large number of suppliers, both in Japanand overseas, to ensure that their technology and quality meet Hitachi standards. For example, we
provided SJJ Railway Materials & Supply, a specialized Chinese manufacturer of parts for railroadcars, with guidance on railroad car welding technologies and helped them improve their quality andproduction management. After doing this, we began full-fledged transactions with the company inthe second half of fiscal 2006, and have steadily continued these relations ever since.

Improving Supplier Relations with an Open-Door Policy
Hitachi is proactively creating opportunities to broaden our transactions through an open-door
policy. We are striving to forge links with SMEs by cooperating with local government SMEassistance organizations and by holding product shows and business meetings for membersof the Hitachi Group. In response to the Chuetsu earthquake in Niigata Prefecture, we held the
Niigata New Technology and Construction Method Show and Business Meeting in fiscal 2005.
In fiscal 2007, we held the Osaka Prefecture Hitachi Group Show and Business Meeting together
with the Osaka Industrial Promotion Organization and the Osaka SME Support Center. Hitachi isplanning to hold similar shows for local governments in fiscal 2008.
Among overseas countries, Hitachi is focusing on India, which is undergoing rapid economic
growth as an emerging market. In fiscal 2007, with the aim of procuring software, we organizeddelegations of Hitachi Group members that visited India three times in order to cultivate andincrease the number of suppliers there.

Hitachi Group Corporate Social Responsibility Report 2008 | Next Society | Collaborative Creation with Suppliers 064

Employees: The Key to Hitachi’s Future
Hitachi is committed to creating a work environment that respects diversity,
enabling employees to harness their full potential and aspire to high goals

Creating a Work-Friendly Corporate Culture
Hitachi, Ltd. is working hard to nurture human resources that can meet the requirements of the
new age and to create a better work environment where all employees can give full expression totheir individual abilities. This endeavor is guided by three key words: (1) openness to encourage
frank communication and to provide employees with opportunities to express their full potential,(2) challenge to aspire to high goals and personal transformation, and (3) diversity to respectindividuality.

Openness: Promotes the Expression of Employees’ Full Potential
The Hitachi Group has instituted a range of initiatives designed to encourage frank, open
communication so that employees can achieve their full potential. These include personnel system
reforms, an employee awareness survey, and the 360-Degree Feedback Program.
Personnel Systems
At Hitachi, Ltd., our personnel system is designed to assess the strengths and achievements of
employees fairly and transparently and to reflect these findings in salaries and bonuses. Elements,
standards, and methods of evaluation are fully disclosed as employees meet their evaluators toarrive at a shared assessment. In the course of these discussions, employees receive feedbackon their strengths and weaknesses as well as guidance on achievement of business goals andcapacity building. An evaluation manual is used to minimize disparity. As a further step, employees
are surveyed annually to review the evaluation process, and follow-up work is done to ensure its
proper management.
Survey of All Employees
Hitachi, Ltd. conducts an annual survey of all 41,000 employees to check on such matters as
employee satisfaction, workplace culture, and views on management. Known as the “Business
Process and Opinion Survey” (B.O. Survey), the survey is conducted through the Hitachi intranet.
Results are analyzed for each workplace and are used in personnel policies and business culture
transformation.
360-Degree Feedback Program
In this program, about 10,000 managers attend workshops and engage in e-learning to understandfeedback from their superiors, colleagues, subordinates, and junior staff members, with the helpof expert instructors. Understanding feedback in turn enables managers to reassess their own
strong points and areas needing improvement, as a capacity-building exercise.

Challenge: Supports Growth
Because we believe that maximizing employee potential is vital for continuing to provide new value,
we work hard to improve employees’ abilities and their careers.

Hitachi Group Corporate Social Responsibility Report 2008 | Next Society | Employees: The Key to Hitachi’s Future 065

Employee Capacity Building
For capacity building, Hitachi supplements in-house education—based on on-the-job training—withgroup education. This group education has six educational programs: “Management Development,”“Education for Engineers,” “Production Worker Training,” “Education for Internationalization,”“Sales Education,” and “Training by Job Function.” These programs are offered across the HitachiGroup in conjunction with educational institutions, such as the Hitachi Institute of Technology, theHitachi Institute of MONOZUKURI Skills and Engineering, and the Hitachi Institute of Management
Development. In addition, in order to expand educational opportunities for employees, Hitachi
has also developed a unique e-learning system (Japanese, English, and Chinese), enabling Group
companies to use it.
Supporting Career Development
Hitachi works to create an environment in which employees can discuss their careers with theirsupervisors to deepen mutual understanding between both parties and enable both to tackle theirjobs with a clear vision.
Hitachi also operates the “Career Development Workshop,” a development support program
designed to foster independent human resources. It helps participants achieve self-realization,
enabling them to develop a deeper self-understanding, including their reasons for working andliving and their values in relation to work, and to set their personal career goals accordingly.
Hitachi has established a “Group Open-Placement System” for employees in Japan toexpress their will and desires through job transfers. As of March 2008, 21 Group companies wereparticipating in this system; in fiscal 2007, there were 35 transfers.
Hitachi has also adopted an “Intracompany Free Agent (FA) System” allowing employees toapply directly for transfers to other divisions. During fiscal 2007, 80 applications were received,
leading to 19 transfers.
Global Manager Training
With Hitachi’s operations taking on an increasingly global perspective, it is absolutely criticalthat the various Hitachi domestic and offshore managers working on the front line of global
business understand our history, founding spirit, company operations, common values, corporate
philosophy, and basic management skills. To instill this understanding, Hitachi operates the fourday course “Global Fundamental Course—Ready to Inspire,” which offers the same training to all
Hitachi managers around the world.
Since fiscal 2006, when it was launched, the course has been attended by more than 800
people. In the years ahead too, we plan to enhance the course content while broadening theregional and personnel scope, and training methods.
Reward System for Employee Inventions
Many Hitachi employees are engaged in research and development, including some 1,200 with
doctorates. Hitachi has developed the Reward System for Employee Inventions to stimulate
research and promote outstanding inventions.
Hitachi provides rewards for patent applications and registrations, as well as performance
rewards given at the stage where revenues are drawn from patent use and/or patent licensing
income. For performance rewards in particular, Hitachi works to ensure objective evaluations of theextent to which patents have contributed to Hitachi’s business and to provide equitable payment
for patents that have made a “substantial contribution.”

Hitachi Group Corporate Social Responsibility Report 2008 | Next Society | Employees: The Key to Hitachi’s Future 066

To ensure fair and transparent operation of the system, Hitachi has developed invention
reward criteria and made these known to employees. An Employee Invention Rewards Internal
Arbitration Committee has also been set up to receive inventors’ claims and to determine theamount of payment for invention rewards that are offered. Hitachi’s Invention Information systempromotes communication between inventors and business divisions, enabling inventors to makeinquiries themselves to business divisions for information on internal or external use of patents andto confirm the basis for payment for invention reward calculations.
The “Annual Top 100 Rewards for Use of Patents” presidential award was launched in fiscal
2005. In addition, since 2006, the “Top 50 Rewards for Patent Applications” award has been given
to inventors aged 35 years and younger based on their records for their first five years at Hitachi.

Diversity: A Base for the Healthy Expression of Individuality
We believe that people are our most important resource, and therefore we respect individuality andembrace diverse values to let employees harness their abilities as well as build on the synergistic
benefits that this creates. We pursue a range of activities that promote diversity, and aim tocapitalize on the proven increased effectiveness of diverse teams in the achievement of businessgoals.
Work-Life Balance and Support for the Career Advancement of Women
Since 2000, Hitachi has hired more female employees and expanded assistance for child andnursing care. We encourage and assist female employees with their career development
and support the balancing of demands at work and home. In 2006, we launched the Diversity
Promotion Project, reporting directly to the President and CEO, and began building a workplace
where everyone can fully apply their skills. One outcome of the Diversity Promotion Project was
the promotion of more women into management positions, and as a result, by the end of fiscal
2007, Hitachi, Ltd. had 276 female managers—almost a fourfold increase from fiscal 2000. While
the percentage increase is large, the number of female managers needs to continuously grow.
We also explored ways to develop a workplace that empowers women who are mothers andare raising children. In essence, we have embarked on a quest to create energetic and fulfilling
workplaces for all employees, both male and female.
Male/Female Employee Ratio		
As of March 2008
FemaleNumber of New Graduate Recruits in Fiscal 2007
FemaleFemale14%

19%
Total new graduate
recruits
81%

86%
Male
* Data: Hitachi, Ltd.

Male

Female15%

38%

Engineeringand science
graduates

Liberal arts
graduates

85%

62%
Male

Male
* Data: Hitachi, Ltd.

Hitachi Group Corporate Social Responsibility Report 2008 | Next Society | Employees: The Key to Hitachi’s Future 067

Trend in the Number of Female Managers 			Trend in the Number of Employees Using Child Care Leave(People)(People)

300

300

276
247

250
200

200

150

150

189
6

100

73

215
1

183

214

2000

2005

2006

0

2007 (FY)

2005

2006

Trend in the Number of Employees Using Nursing Care Leave

Men
Women

Women
(People)(People)

20

100

17

96

107
0

9
7
10

5
2005

117
1

2

15
7

2

2007 (FY)

Trend in the Number of Employees Working Shorter Hours

Men

0

215

* Data: Hitachi, Ltd.

* Data: Hitachi, Ltd.

10

217
2

50

50
0

Women

250

205

100

Men

2006

50

116
94

107

6
2007 (FY)* Data: Hitachi, Ltd.

0

2005

2006

2007 (FY)* Data: Hitachi, Ltd.

Hitachi Group Corporate Social Responsibility Report 2008 | Next Society | Employees: The Key to Hitachi’s Future 068

Voices
Workplace Improvements throughPeer Networking by Women

Masayo Fujimoto
Senior Manager, Financial Information Systems Dept. I,
Financial Information Systems Division, Hitachi, Ltd.

In fiscal 2006, the Information and Telecommunications Systems Group organized the Women’s
Council (ITWC), and since then has been pursuing a diversity promotion project. I participatedfrom the beginning, and have been involved
mainly in building awareness and creating female
peer networks.
Like many workplaces, we had only a few
women, but in the process of seeking their
par ticipation, we began to hear from more
and more of them that they wanted access tofemale counselors. This led to the creation of apeer network that links female employees. We
began using email magazines and internal social
networking services for more interaction andto share experiences. Through our activities,
women’s voices are being more clearly heard,
helping us to improve the workplace.
My participation over the past two years has
shown me the diversity of needs that employees
have. To ensure that the benefits of networking
are substantial and long-lasting, we will keep at
it. The goal is to create a workplace where all
employees accept one another and achieve abalance between their jobs and private lives,
regardless of gender, and I want to help sustain
our efforts with that in mind.

Employing Retirees (Japan)
To be a company that employees find appealing and worth working for, Hitachi chooses people
with deep experience, technical expertise, and skill. All Group companies have adopted a “life plan
selection framework,” designed to re-employ people aged 60 who want to continue working, andare suited to company-designated positions.
Promoting the Employment of the Physically and Mentally Challenged
As of June 2007, 2,981 physically and mentally challenged people were employed by the HitachiGroup. Workplace improvements have been made so that they are able to apply their skills to
the maximum. Having the physically challenged work with other employees builds mutual
understanding and a wider acceptance of diversity.
While the ratio of people with physical challenges has risen to 2.11 percent of the workforce
at Hitachi, Ltd., it averages 1.76 percent at Group companies in Japan—lower than the legally
mandated ratio. So, Hitachi will continue to hold joint interviews and consultations, striving tocreate more employment opportunities for the physically challenged.

Hitachi Group Corporate Social Responsibility Report 2008 | Next Society | Employees: The Key to Hitachi’s Future 069

Trend in the Employment Ratio for Physically Challenged People
2.11

2.05
(People)

1,300

1.88

Legally mandated
employment ratio

1,150
1,000

(%)

2.0

1.93

1.80
926

1.66

968

1,001

822

850

1.5

731
700
0

June
2003

June
2004

June
2005

June
2006

June
2007

0
* Data: Hitachi, Ltd.

Hitachi You and I Activities
Established as a special subsidiary in Yokohama in October 1999, Hitachi You and I Co., Ltd. hasentered its ninth year of operation. Initially, 10 mentally impaired employees cleaned offices anddormitories in and around Totsuka Ward. Today, there are 73 challenged employees (as of April2008) working at 30 locations in Kanagawa, Tokyo, and Ibaraki prefectures performing a range of
duties, from cleaning and on-site mail delivery to paper shredding/recycling, text processing, andcafeteria services. The following are two accounts provided by employees of the company.
To foster both employees’ joy in work and social independence, Hitachi staff visit work
locations to offer detailed guidance, as well as to hold monthly group education sessions thatprovide simple explanations of job basics and problems that have occurred.
VoicesFriends Working Together
for a Happier Workplace

Tomomichi Takahashi (left)
Yoshiyuki Yamada (right)
Hitachi You and I Co., Ltd.

The following are two accounts provided by
Hitachi You and I employees.
“I per form cleaning duties at employee
dormitories. For operational safety, I recommended that we always carry work gloves, and was
delighted that the company agreed to that idea.”(Takahashi)“I handle shredder operations at a company
located in Shinagawa Ward. I set aside coloredwastepaper, sorting the remainder by size, andremoving staples and so forth. It’s a demanding
job but seeing a happy customer always gives mea lift.” (Yamada)Many workers feel that their own workplaces
are happier and healthier thanks to the friendly
demeanor and hard work of the Hitachi You andI employees.

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Diversity Training in Europe
Believing that it is critically important to have an open corporate culture that embraces diversity,
Hitachi Europe Ltd. has introduced a diversity training program with compulsory participation for
all Hitachi Europe directors and employees working in the United Kingdom.
Working to deepen employee awareness, this program teaches that diversity includes not justdifferences in gender, ethnicity, and ability levels, but other attributes as well, such as age, sexual
orientation, and religion. Participants also learn about issues such as the UK’s age discrimination
prevention regulations, workplace harassment, and bullying. In addition, Hitachi Europe Ltd. hasdeveloped in-house regulations to cover these issues.
We believe that diversity in human resources and employment strengthens the companyemployee relationship and lowers employee turnover, making it a critical issue for the sustainabilityof Hitachi’s business operations.

Securing the Health and Safety of Employees
At Hitachi, ensuring the safety and health of employees is a top priority. We strive to maintain highhealth and safety standards and to make continual improvements.
Worker Health and Safety
After many years ensuring health and safety, Hitachi has accumulated much knowledge andexperience on management, education, maintenance, and the environment. It is now possible
to apply the Group’s “safety and hygiene knowledge” every day. For health management, wehelp employees maintain good health. Employees that work extended overtime, for example, areinterviewed and examined by company physicians and given guidance.
Trends in the Occupational Accident Rate
(%)

2.0
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0

All industries
Manufacturing industries
Electrical machinery sector
Hitachi, Ltd.

2003

2004

2005

2006

2007 (Year)

Hitachi Group Corporate Social Responsibility Report 2008 | Next Society | Employees: The Key to Hitachi’s Future 071

Topics
Maxell Hokuriku Seiki Earns Prime Minister’s Commendation
on Contributors to Public Safety
In July 2007, the Yatsuo Plant in Toyama Prefecture (Japan) owned by Maxell Hokuriku Seiki, Ltd., amember of the Hitachi Maxell Group, received one of the Prime Minister’s Commendations on Contributors
to Public Safety to recognize outstanding industrial safety, including an accident-free record since startup.
The Yatsuo Plant began operating in March 1981 to make videotapes and other magnetic recording media.
As of June 2007, it had achieved a record 26 years and three months accident free—a cumulative 6.2
million operating hours. Labor and management have united to promote safe, healthy working conditions.
Photo: Award ceremony

TopicsHitachi Communication Technologies, Ltd. Carrier Network Division
Achieves Top Japanese Zero-Accident Record
In July 2007, the Carrier Network Division of Hitachi Communication Technologies, Ltd. (located in Totsuka
Ward, Yokohama City) was recognized by the Japan Industrial Safety and Health Association for theireighteenth consecutive year of zero workplace accidents—the longest record in their industrial category.
The Totsuka division has sustained its zero-accident record from August 1978, racking up 134,290,243
hours as of January 2008, topping all others in Japan. The Carrier Network Division works constantly toboost safety awareness and institute preventive measures through an ongoing program that includes asafety and hygiene committee, safety education and training, safety and hygiene enhancement months,
and safety patrols.
Photo left: The “safety tower” within the compound shows the zero-accident level
Photo right: Award ceremony for the zero-accident record by industrial category

Hitachi Group Corporate Social Responsibility Report 2008 | Next Society | Employees: The Key to Hitachi’s Future 072

Promoting Mental HealthIn recent years, maintaining the mental health of employees has emerged as a major social
concern. We have put up a stress-level checklist on our intranet so that employees can easily ratethemselves. We also address mental healthcare by providing access to specialists and counselors.
In addition, an EAP†1 Center has been established to help employees resolve their worries andconcerns through person-to-person, telephone, and in-house online counseling. After ensuring
privacy, findings from these programs are relayed to management for use in improving the work
environment.
†1 EAP (Employee Assistance Program): Provides employees with psychological, physical, and social support

Basic Attitudes to HIV/AIDS
Since 1995, Hitachi, Ltd. has promoted an understanding within the Hitachi Group of HIV/AIDS
based on the following three points.
Basic Attitudes Concerning HIV/AIDS(1) We will actively build AIDS awareness in keeping with the understanding that the most important thing is“to cultivate accurate knowledge and understanding of HIV/AIDS on the part of every employee.”(2) We will respond to known cases of infection by giving the highest consideration to respecting the humanrights of those infected, and consider how to delay the onset of illness.
(3) With a view to protecting the privacy of individuals, no testing for HIV/AIDS will be conducted as a part ofany routine physical examinations for employees done within the company, whether the physical examinationis legally sanctioned or not (i.e., voluntary).

Supporting Enriched Lives for Employees and Their Families
Hitachi has instituted a range of measures designed to support richer and more stable lives for our
employees and their families.
Supporting Employee Self-Help Efforts and Independence
Hitachi has instituted a range of measures designed to support employee self-help efforts andindependence. These include dormitories, company housing, and a housing allowance system,
as well as an asset-building savings program, an employee stock ownership program, groupinsurance and various types of consolation payments. In 2000, a new “cafeteria plan” system wasintroduced that allows employees to select the benefits they will receive. Choosing from a listof options, such as skills development, childcare, nursing care, health promotion and donations,allows employees to tailor a program to their individual lifestyles and needs. Employees can selectthe support that they need—when they need it—within the scope of their “cafeteria points.”
Employee Life-Planning Support through Corporate Pensions
With Japan’s declining birth rate, the aging of society, and the growing diversity of post-retirement
lifestyles, corporate pensions seem positioned to play an increasingly important role.
In response to the diversification of post-retirement lifestyles, changes in the employment
system, and revisions to legal systems, the Hitachi Group has fundamentally revamped
retirement allowances and pensions. Defined contribution and defined benefit plans have been
introduced within the systemic infrastructure—across the Group—to provide life planning support

Hitachi Group Corporate Social Responsibility Report 2008 | Next Society | Employees: The Key to Hitachi’s Future 073

for employees. For defined contribution plans, Hitachi encourages the active participation of
employees in their post-retirement planning through, for example, education on asset management
and investments. For defined benefit plans, Hitachi has boosted the number of benefit options in
response to employees’ diverse needs.

Hitachi Group Corporate Social Responsibility Report 2008 | Next Society | Employees: The Key to Hitachi’s Future074

Environmental Action for a Sustainable Society

Next Eco

The Hitachi Group aims to reduce the environmental impact
over the entire product lifecycle from a long-term perspective,
based on the four points of our Sustainability Compass

The thousands of trees around the Hitachi Central Research Laboratory create a rich, natural environment.

Message from Executive in Charge
Realizing a Sustainable Society
Climate change is most clear in the polar regions: Arctic Sea ice is shrinking to historic lows andthe Antarctic had a massive outbreak of “snow algae,” the result of rising temperatures. While
humanity enjoys the benefits of the global environment, phenomena like these must be seen as
warning signs.
To leave a magnificent global environment for future generations, we aspire to create
an environmentally harmonious society through products and services, and to contribute toenvironmental conservation as a global citizen.
To achieve these goals, environmental action has been made one of the pillars of our corporate
management. The Environmental Vision (p.77) lays out the “blueprint” for a future society, while
the Sustainability Compass (p.77) directs our activities toward the specific targets outlined in theEnvironmental Action Plan (p.79). We will also use information disclosure and dialogue to continue
working with our stakeholders toward a sustainable future.
Shozo Saito
Senior Vice President and Executive Officer in charge of Quality Assurance,
Production Technology and Power Technology, Hitachi, Ltd.

Hitachi Group Corporate Social Responsibility Report 2008 | Next Eco | Environmental Action for a Sustainable Society 075

Eco-Mind & Global Environmental
Management
From instilling Eco-Mind into our corporate culture
to building a systematic environmental management system,
we constantly strive for improvements and enhancements that support
efficient environmental management and activities

Environmental Awareness and Action
The Hitachi Group considers the reduction of global warming, resource recycling, and conservationof ecosystems to be especially important. That is why we have established the Hitachi Action
Guidelines for Environmental Conservation, which outline the Group’s environmental management
policy, the basis of the Hitachi, Ltd. Standards of Corporate Conduct. Using these guidelines, wehave formulated the medium-term Environmental Vision 2015 (Sustainability Compass), used todevelop a concrete Environmental Action Plan with specific targets for the year 2010. We are now
implementing these actions to help us meet our environmental targets. The action plan covers a
range of measures, including steps to counter global warming, efficient use of resources, expanding
the lineup of Eco-Products, and proactive communication on environmental issues. Finally, to verify
the results of our activities and to ensure continual improvement, we have prepared radar chartsthat show the outcome of evaluations carried out in relation to 56 items in eight categories.
Flow of Hitachi Group’s Environmental Activities
Fundamental Credo
Business ethos since foundation of the company

CSR Policy of the Hitachi Group
Environmental conservation included within the eight points of the policy

Environmental Activities

Hitachi Action Guidelines for Environmental Conservation
Environmental management policy

Hitachi’s Environmental Vision ( Sustainability Compass )Direction for environmental management

Environmental Action Plan

GREEN 21 ( Version 3 )Action plan based on the Environmental Vision

Evaluation of results of the Action Plan

Hitachi Group Corporate Social Responsibility Report 2008 | Next Eco | Eco-Mind & Global Environmental Management 076

Hitachi Action Guidelines for Environmental Conservation (excerpt)
The basic philosophy of these guidelines is based on the Hitachi, Ltd. Standards of Corporate Conduct(Rule No. 2272, established on June 28, 1983). These guidelines are intended to set forth Hitachi’s action
guidelines for addressing environmental conservation in relation to its business activities.
PurposeIn order to realize an environmentally harmonious and sustainable society through products and services,
Hitachi is committed to meeting its social responsibilities by promoting globally applicable monozukuri(designing, manufacturing, or repairing of products), which is aimed at reducing environmental burdens of
products throughout their entire life cycles, ensuring environmental conservation.
Hitachi Action Guidelines for Environmental Conservation (full text):
http://www.hitachi.com/environment/activities/more/guideline.html

Environmental Vision 2015
As a global citizen, we will promote innovation throughout the world while developing the potential of the
future generation to pioneer next-generation products and services
co-Mind & Global Environmental Management
Eco-mind & global environmental management
Throughout our entire group, we will create an advanced eco-mind and thepower to transform it into action and build/operate a global management andevaluation system.
ext-Generation Products & Services
Provision of next-generation products and services
We will continue to make innovations for highly competitive products andservices that will contribute to structuring a sustainable society and deploy new
business models.
uper Eco-Factories & Offices
Factories and offices with a high-level of consideration for the environment
We will thoroughly carry out activities for the prevention of global warming andcontinue our efforts to promote recycling, and at the same time, to build up ourbases with consideration for the environment.
orldwide Environmental Partnerships
Collaboration with stakeholders
We will strengthen environmental communications and actively endeavor to
realize concrete partnerships with our stakeholders, while clarifying our
objectives and achievements.

Sustainability Compass* See pages 7–9 for information on Environmental Vision 2025, released in December 2007.

Emission Neutral
Hitachi’s “emission neutral” concept was developed to promote monozukuri (manufacturing) that
reduces the environmental impact of products during their lifecycle. We intend to be emission
neutral by fiscal 2015. Emission neutral means balancing the direct environmental impact andsuppressing the indirect impact. Here, direct environmental impact covers material production,
manufacturing and distribution, while indirect impact covers finished products after they are sold(product use). In fiscal 2007, we introduced systems for analyzing and evaluating our progress
toward becoming emission neutral.

Hitachi Group Corporate Social Responsibility Report 2008 | Next Eco | Eco-Mind & Global Environmental Management 077

The Emission Neutral Philosophy
Direct environmental impact

CO2 emissions
from material
refining

Materials/
rawmaterials

CO2 emissions
from production

CO2 emissions
fromtransportation

Reduction of
CO2 emissions
duringproduct use

Distribution

Use

CO2 emissions
from waste
recycling

Production

Reduction of indirect(product use) impact
Reduction of
CO2 emissionsin productrecovery andrecycling

Recovery/recycling

Outline of Environmental Impact Assessment System
Examples:t"NPVOUPGFOFSHZVTFEt"NPVOUPGXBTUFEJTDIBSHFE

Social environmental impact data
Examples:t*NQBDUSFEVDUJPOUISPVHI&DP1SPEVDUTt-JGFDZDMFBTTFTTNFOUEBUB

Emission neutral analysis
Environmental impact
assessment system

Direct environmental impact datat%JSFDUFOWJSPONFOUBMJNQBDUEBUB
t4PDJBMFOWJSPONFOUBMJNQBDUEBUB

Data for study of Groupenvironmental policies
Data reported to government
agencies/industry organizations

Hitachi Group Corporate Social Responsibility Report 2008 | Next Eco | Eco-Mind & Global Environmental Management 078

Environmental Action Plan and Achievements
For each evaluation item, this chart indicates the results for fiscal 2007 and the achievement level
relative to the target, together with the new target for fiscal 2010.
Category/Item

Corresponding
page

Action goal

Fiscal 2007 target

Fiscal 2007 results

Achievement
level

Fiscal 2010 target

Eco-Mind & Global Environmental Management
Establish an environmental
management systemp. 80

Establish and deploy integrated
environmental management system

Complete EMS plan

1 ISO certification: 1 business
group
Plan completed: 12 businessgroupsObtain integrated EMS certification for each business group /Group company

Raise level of environmental
activities (GPs = green points)

p. 81

Raise GPs of GREEN 21
activities

896 GPs

966 GPs

1,280 GPs

Nurture environmental
literacyp. 85

Boost percentage of employees
receiving Hitachi group-wide training(Internet-based)

55%

77%

90%

Integrate environmental
activities into management
practices

pp. 85–87

Promote environmental accounting

Internal use of indicators for
efficiency in environmental
impact reduction and otherparameters

Reduction in energy usedin production: 2.8 million
kWh/100 million yen
Reduction in final disposal ofwaste generated during production: 284 t /100 milion yen

Internal use of indicators for
efficiency in environmental
impact reduction and otherparameters

Increase percentage of registered
Eco-Products (acceptance rate)
Increase percentage of registered
Eco-Products (registration rate)

85%*1/over 60%*2

97%*1/over 84%*2

100%*1 / over 80%*2

8%

12%

30%

Next-Generation Products & Services
Expand Eco-Products

pp. 90–96

Enhance environmental
efficiency of products(for each targeted product;
basis: FY 2000)

Improve global warming prevention
factorImprove resource factor

25%*1/10%*2

60%*1/10%*2

50%*1/20%*2

35%*1/10%*2

70%*1/10%*2

70%*1/20%*2

Use resources effectively(for each targeted product;
basis: FY 2000)

Increase use of recycled plastic
Reduce volume of packaging used

10%
5%

12%
24%

20%
10%

Promote control of hazardous
substances used in products

Establish comprehensive definitions
and data for hazardous substancecontrol

Conduct full survey of hazardous
substances used in products (25substance groups controlled by
the Hitachi Group)

100% (Hitachi controlled
substances)

Establish data management
system compliant with EU’s
REACH regulation

Systematically promote businessmodels that will reduce theenvironmental burden for the next
generation

Complete work on development/
sales expansion plans

Drafting of plans completed

100% achievement ofdevelopment and sales
expansion plans

Certify Super Eco-Factories & Offices

8 production facilities

9 production facilities

30 production facilities

Reduce CO2 emissions (basis: FY
1990) [Japan]
Achieve specific industry targets or
reduce CO2 per unit of production(basis: FY 1990) [Japan]
Reduce CO2 per unit of production(basis: FY 2003) [outside Japan]

7%

14%

7%

Achieve specific industry
targets or reduce CO2 per unit ofproduction by 21%
2%

Targets achieved
3%

Achieve specific industry
targets or reduce CO2 per unitof production by 25%
5%Reduce SF 6
(basis: FY 2003)
Reduce PFCs (basis: FY 1995)[semiconductors]
Reduce PFCs (basis: FY 2000)[LCDs]

50%

70%

—

7%

54%

—

8%

100%

—

Reduce transport energy per unitof real production (basis: FY 2006)[Japan]

1%

9.7%

4%

Reduce VOC emissions into theatmosphere(basis: FY 2000) [Japan]
Reduce ratio of VOC emissions tototal consumption (basis: FY 2005)[outside Japan]

42%

49%

45%

4%

4%

10%

Reduce volume of waste(basis: FY 2000)
Increase resource recycling rate(basis: FY 2005) [Japan]
Reduce volume of water used(basis: FY 2005) [outside Japan]

14%

22% (total reduction)
24% (per-unit reduction)
5%

20%

4%
4%

7.6%

10%

Develop sustainable businessmodelspp. 96–98

Super Eco-Factories & Offices
Build industry’s mostadvanced factories

pp. 99–104

Reduce CO2 emissions fromenergy sources

Reduce emissions of greenhouse gases other than CO2

Reduce energy used intransportation
Pursue rigorous managementof hazardous substances andreduce emissions

pp. 104–106

Use resources efficiently

pp. 106–108

10%Worldwide Environmental Partnerships
Information disclosure anddialogue

pp. 109–111

Targeted environmental PR

Enhance PR targeted to married
women, younger people

Developed new Web content

Continue PR efforts

Global citizenship activities

pp. 53–55

Promote environmental CSR
activities

Sponsor educational activities toraise eco-awarenessConducted environmental
classes at elementary schools(Japan, China)
Sponsored planting & cleanup
activities

Continue sponsorship ofactivities*1 Information & Telecommunication Systems, Digital Media & Consumer Products*2 Electronic Devices, Power & Industrial Systems, High Functional Materials & Components, Logistics, Services & Others: Achieved: Partially achieved

Hitachi Group Corporate Social Responsibility Report 2008 | Next Eco | Eco-Mind & Global Environmental Management 079

Environmental Management System
The Hitachi Group has developed an Environmental Management System for the Group’s 1,082
consolidated subsidiaries. Under this system, the Senior Executive Committee for Environmental
Policy, chaired by the president of Hitachi, Ltd., deliberates and sets environmental policies andstrategies for the entire Hitachi Group, which are then disseminated throughout the Group via
the Environmental Management Operations Committee. The Environmental Committee and its
subcommittees conduct investigations and develop the technologies and evaluation methods
needed to achieve goals and resolve problems. Organizations are set up to carry out various
environmental activities, and environmental operations officers are appointed to head environmental
operations units in each of the business groups and Group companies.
To promote the PDCA (plan-do-check-act) cycle for environmental activities, Hitachi Group
companies have individually obtained 345 ISO 14001 certifications (as of March 2008). In addition,
the Hitachi Group Environmental Promotion Mechanism obtained ISO 14001 certification in
September 2006 for the Hitachi Group Environmental Promotion Mechanism, adopted withthe aim of leveraging the Group’s combined resources in the pursuit of environmental goals.
This mechanism is centered on Hitachi, Ltd.’s R&D group, the six business groups, as well as
environmental operations officers and environmental operations units in 17 Hitachi Group
companies. It oversees environmental activities in 249 Group companies that together account for
90% of the Hitachi Group’s environmental impact.
To strengthen environmental management, by 2010, we will develop an integrated EMS foreach business group and Group company. In fiscal 2007, Hitachi Global Storage Technologies
received worldwide integrated ISO 14001 certification for its 10 locations (two domestic, eightoverseas) across seven countries—marking the completion of integrated certification by seven of
Hitachi’s business groups and Group companies.
Environmental Management System
Senior Executive
Committee forEnvironmental Policy

Corporate
Environmental Policy
Division

Environmental
Management
Operations Committee

Eco-Management
Committee

Eco-Products
Committee
Environmental
Committee
Eco-Factory
Committee

Business groups
Group directors, CEOs
Environmental operations
officers

Business groups
Environmental management
systems

Major affiliated companies
Presidents
Environmental operations
officers

Sustainable BusinessCommittee

Environmental Management System
under the Hitachi Group Environmental Promotion Mechanism** The Hitachi, Ltd. Corporate Environmental Policy Division and environmental operations divisionsof business groups and affiliated companies form the core of this mechanism.

Affiliated companies
Environmental management
systems

Production facilities
Operation heads
Environmental management
officers
Affiliated companies
Presidents
Environmental management
officers

Production facilities
Operation heads
Environmental management
officers

Regional Environmental Committee

President

Affiliated companies
Presidents
Environmental management
officers

Hitachi, Ltd., 910 consolidated subsidiaries,
and 171 equity method affiliates

Hitachi Group Corporate Social Responsibility Report 2008 | Next Eco | Eco-Mind & Global Environmental Management 080

Status of ISO 14001 Certifications(as of March 2008)

Outside Japan

Japan

Producton
Sites

Non-Production
Sites

Producton
Sites

Non-Production
Sites

183

77

80

5

No. ofcertified sites

Total

345

Europe9
China
30

North America
13

Japan
260

Asia
33

List of ISO 14001-certified sites
http://www.hitachi.com/environment/activities/more/iso14001.html

GREEN 21 Evaluation System Activities
To ensure ongoing improvements and to raise the level of environmental activities, we numericallyquantify evaluations on 56 items in eight categories, assessing the degree to which that year’s
goals have been achieved. The results are made into radar charts for each business group andGroup company for management decision making. GREEN 21 assessment results are used toevaluate each group’s business performance and as an incentive to raise the level of environmental
activities.
While the green procurement category scored poorly in 2006, a better score was achieved
in fiscal 2007 thanks to green procurement liaison meetings to increase understanding ofprocurement operations.
Green Point Average: Results and Targets
FY 2007: 966 GPs
FY 2006: 845 GPs
FY 2010: 1,280 GPs

1. Eco-Management
138 GPs
8. Worldwide Environmental
Partnerships
117 GPs

2. Eco-Mind
135 GPs

160
80

7. Eco-Factories:
Resource Recycling
124 GPs

6. Eco-Factories:
Reducing Global Warming
108 GPs

3. Eco-Products:
Manufacturing
115 GPs

0

5. Next-Generation Product /Service Strategy
126 GPs

4. Eco-Products:
Green Procurement
103 GPs

Categories and Evaluation Items
1. Action plan, environmental accounting, risk management
2. Employee training and education
3. Ecodesign management system, Eco-Products,
control of hazardous substances contained in products
4. Green procurement, green purchasing
5. Business and product strategy, sustainable business, publicity
6. Energy saving at production facilities, environmentally responsible distribution
7. Waste reduction, chemical substance management
8. Information disclosure, communication activities, global citizen activities

Hitachi Group Corporate Social Responsibility Report 2008 | Next Eco | Eco-Mind & Global Environmental Management 081

GREEN 21 Awards
The GREEN 21 Award program was established to energize environmental activities andencourage the dissemination of best practices throughout the Hitachi Group by honoring cuttingedge environmental activities, products, and services within the Group. Leading eco-friendly
products and technologies, as well as ground-breaking initiatives for saving energy, conserving
resources, and recycling, are judged on overall merit, with GREEN 21 green points (GPs) taken
into consideration. Eight GREEN 21 Awards were given in fiscal 2007.
Fiscal 2007 GREEN 21 Awards
Category

Achievement

Grand Prize
DivisionAwardsHonorable
MentionRecipient unit

Developing and delivering main power
converters for Kiha E200 hybrid railcar

Transportation Systems Division,
Industrial Systems Group, Hitachi, Ltd.

Eco-Mind &Global Environmental
Management

Slashing environmental impact from chemical
and water use through process innovation

Hitachi Global Storage Technologies (Shenzhen)

Next-Generation Products& Services

Developing eco-friendly refrigerators,
room air conditioners and washer-dryers

Hitachi AppliancesSuper Eco-Factories &Offices

Improving efficiency of energy use,
winning China Excellent Corporate Citizen Award

Hitachi Elevator (China) Dashi plant

Worldwide Environmental
Partnerships

Promoting science education through theCommunity Partnership Academy of Wisdom

Hitachi Plant Technologies

Eco-Mind &Global Environmental
Management

Promoting global environmental management
Obtaining integrated ISO 14001 certification
Redevelopment of San Jose district

Hitachi Global Storage Technologies

Super Eco-Factories &Offices

Improving efficiency of energy use
Reducing final waste disposal ratio

Hitachi Metals Tottori WorksWorldwide Environmental
Partnerships

Promoting tree planting and Eco-Mind education

Hitachi Engineering & Services

Grand Prize:
Developing and delivering main power converter for Kiha E200 hybrid railcar
The Kiha E200, a hybrid diesel railcar equipped with a hybrid control system developed jointlywith East Japan Railway Co., began commercial operation on the Koumi Line in July 2007. The
Kiha E200 was developed with the goal of reducing the environmental impact of diesel trains thatrun on non-electrified lines and is the first diesel train that produces electricity using regenerative
energy.†1 The regenerative energy produced during braking is converted by a motor into electricity,which charges a battery that powers acceleration as well as air conditioning and lighting in thecars. By reusing energy in this way, the hybrid configuration—along with other technologies suchas an idling stop system—improves fuel consumption by 10 percent.†2 It also reduces nitrogenoxides and particulate matter in exhaust gases by 60 percent†2 and station noise by about 30
decibels.†2 The Kiha E200 has received honors from outside the Hitachi Group as well, winning the
Ministry of the Environment Prize for eco-products in the 2007 Eco Products Awards.
†1 Energy generated by the change in the motor’s RPMs when the train’s brakes are applied. In electric trains,
this electricity is usually transmitted to other trains along the overhead line and reused. With conventional
diesel trains, which are not equipped with electric motors, it was difficult to capture braking energy. However,hybrid technology uses the regenerative energy, raising energy efficiency.
†2 Compared with conventional diesel trains on the Koumi Line.

Hitachi Group Corporate Social Responsibility Report 2008 | Next Eco | Eco-Mind & Global Environmental Management 082

Kiha E200 hybrid railcar

Eco-Mind & Global Environmental Management Award:
Slashing environmental impact from chemical and water use
Hitachi Global Storage Technologies (Shenzhen) Co. is a mass-production plant in China thatmakes disks used in hard disk drives. The disk-manufacturing process typically requires a large
number of chemicals and generates exhaust gases and waste products that contain chemical
substances. In addition, a large volume of wastewater is discharged in the cleaning process. To
address these issues, the plant drew up and implemented an environmental impact mitigation
plan aimed at cutting consumption of chemicals and water resources and limiting the dischargeof volatile compounds that pollute the atmosphere. Typically isopropyl alcohol (IPA) is used in disk
drying following cleaning with distilled water, but the plant developed a warm-water drying process
and reduced the use of IPA by 1,600 liters per day. It also installed a system for recycling wastewater
discharged in the cleaning process that conserves 1,500 tons of water each day. In 2007, the Cityof Shenzhen designated this recycling system a Shenzhen Model Water Conservation Project andrefunded one third of the company’s investment.

Wastewater recycling system (Shenzhen Waterworks Model Project, 2007)

Next-Generation Products & Services:
Developing eco-friendly refrigerators, room air conditioners, and washer-dryers
Hitachi Appliances was honored for aiding in the fight against global warming through thedevelopment of energy-saving products (refrigerators, room air conditioners, and washer-dryers).
Both the next-generation refrigerators and air conditioners feature energy-saving innovations.
The refrigerators have the freezer in the middle to minimize exposure to heat from the compressor
and use a vacuum insulation material that is molded to the shape of the insulation panels,
dramatically improving the effectiveness of keeping out heat. The air conditioner boosts efficiency
with an optimally positioned high-density heat exchanger that has an expanded surface area anda highly efficient scroll compressor that reduces energy loss during operation.
The washer-dryer also saves energy with a “blow iron” feature that smoothes wrinkles by
blowing air at 360 km/h, while saving substantially on water and detergent with a “nano-micelleshower” that sprays the laundry all over with highly concentrated nano micelles of activatedHitachi Group Corporate Social Responsibility Report 2008 | Next Eco | Eco-Mind & Global Environmental Management 083

cleaning solution and by making maximum use of leftover bath water in the washing and drying
process.
The refrigerator and air conditioner both received high marks from outside the Hitachi Group
as well, winning the ECCJ (Energy Conservation Center, Japan) Chairman’s Prize in the 2007
Energy Conservation Grand Awards (see pages 93).
Super Eco-Factories & Offices:
Convergence of Eco-Friendly Actions
Hitachi Elevator (China) Co., Ltd. has a factory in Guangzhou, China that handles everything
related to escalators and elevators—from R&D through to maintenance. A river, surrounded bylawns and mango trees, runs close by the factory. The company and the employees have taken
the following steps to maintain the natural environment: the production process and factory havebeen improved to reduce CO2 emissions, including converting from liquefied petroleum gas (LPG)
to natural gas as the fuel for paint sprayers; energy-saving fluorescent lights are now used forfactory illumination; and employees commute on 21 company buses to cut down on using private
vehicles. The company also supports NPO-backed desert greening (afforestation) and releases
a CSR report. In fiscal 2007, Hitachi Elevator (China) won an Excellent Corporate Citizen in China
Award (see page 23).

Hitachi Elevator (China) plant in Dashi Town, Guangzhou

Worldwide Environmental Partnerships:
Promoting science education through the HPT Academy
As a corporation that combines eco-friendly and energy-saving technology to support society’s
infrastructure, Hitachi makes maximum use of resources to convey to children the joy of scienceand the importance of the environment through classes offered at business sites, known collectively
as the Community Partnership Academy of Wisdom. In fiscal 2007, classes were offered at fiveproduction facilities and two Group companies—with about 560 children participating altogether.
The programs sought to promote friendly relations with local children and to make the most of eachfacility’s unique features, while covering topics like water treatment, monozukuri, and recycling.
Employees were responsible for the preparation. With school officials informing us that they are
eager to see more of these classes, we intend to continue the program in cooperation with local
communities.

Hitachi Group Corporate Social Responsibility Report 2008 | Next Eco | Eco-Mind & Global Environmental Management 084

Community Partnership Academy of Wisdom class

Environmental Education
To foster Eco-Mind, the Hitachi Group provides general training to all employees to raise theirknowledge and awareness of environmental activities, as well as specialized training geared toacquiring and applying environmental technology.
General training is offered via the Internet in Japanese and English, and 97,880 employees
have taken these courses (as of March 2008). We also give our managers the environmental
training they need to raise their awareness and understanding of environmental management,
while working to ensure that this knowledge is reflected in management practices.
Specialized training includes EMS auditor training courses, Eco-Product education for
designers and manufacturing units, and Eco-Factory training for environmental management
units.
Training is also provided to support Group companies and production sites that carry out
energy-saving or resource-saving environmental activities under ISO 14001. In addition, designatedpersonnel involved in environmentally sensitive work are instructed in work processes to reduce
environmental impact and are given training in emergency procedures.
Environmental Education and Training System
Leaders

General employees
Group training

Specialized
education

Auditor training

Executive management level

Senior auditor training

Eco-Products development training
Eco-Factory Education

Training foreach company/site
based on ISO 14001

Generaleducation

Eco-Mind education (via the Internet)

Specialized
education
Specialized
education

Training for employees working in certain operations

Education about environmental management

Eco-Mind education for every company/site

Required and actual numbers of legally certified staff
http://www.hitachi.com/environment/activities/more/qualification.html

Environmental Accounting
The Hitachi Group has used an environmental accounting system since fiscal 1999 to promote
efficiency and continual improvements in environmental investments and activities. This system
has also helped stakeholders to gain a deeper understanding of our corporate approach to theenvironment. It provides them with information on how we allocate management resources for

Hitachi Group Corporate Social Responsibility Report 2008 | Next Eco | Eco-Mind & Global Environmental Management 085

environmental activities and on the value created by environmental technologies and Eco-Products.
Our environmental accounting includes depreciation costs.
The effectiveness of our activities is evaluated for both economic and physical effects, which
are based on the degree that environmental impacts are reduced. Economic effects are calculated
based on solid financial data. Physical effects—applying Hitachi’s fundamental philosophyof contributing to society by developing our own advanced technologies and products—are
calculated based on the reduction of environmental impact, not only during the manufacturing
process, but also during use of our products. Moreover, we are reducing environmental impact byusing an “environmental impact reduction ratio” to assess how much each type of environmental
impact is reduced per unit of expenditure.
In fiscal 2007, we invested aggressively in anti-global warming strategies to reduce ourenvironmental impact. As a result, our costs rose by 4 percent over the previous year, and theeconomic effects from reduced energy and resource consumption increased 13 percent. A full46 percent of our total costs consisted of “research and development costs” for development anddesign to reduce the environmental impact of our products. Thanks to these efforts, we were able
to reduce the amount of energy used during production by 720 million kWh.
Costs
Item

Expenses

Overview

Costs (Unit: billion yen)
FY 2005

FY 2006

FY 2007

Business area costs

Costs of maintenance of equipment with low environmental
impact, depreciation, etc.

32.46

39.24

39.72

Upstream/
downstream costs

Green procurement expenses, recovery and recycling ofproducts and packaging, recycling expenses

2.59

2.89

2.79

Management
activities costs

Labor costs of environmental management, implementation andmaintenance of environmental management system

9.76

10.31

11.30

Research anddevelopment costs

R&D for the reduction of environmental impacts caused byproducts and production processes, product design expenses

42.16

41.66

46.63

Social activity costs

Environmental improvements such as afforestation andbeautification, PR and publicity expenses

0.38

1.20

0.48

Environment-related measures, contributions, and levies

2.49

2.89

0.80

89.84

98.18

101.72

13.80

15.48

15.38

Environmental
damage costs
Total
Total investment

Investment in energy-saving equipment and equipment that
directly reduces environmental impacts

Effects
Economic Effects*1
Item
Net income effects
Reduced expenses effects
Total

Overview

Effects (Unit: billion yen)
FY 2005

FY 2006

FY 2007

Profit on sales of recycled waste

7.72

12.28

14.50

Reduction in material costs due to resource saving, reduction in
waste treatment costs due to reduced waste, reduction in power
expenses due to energy saving

17.29

20.15

22.02

25.01

32.43

36.52

Benefits on equipment investment are calculated using the straight-line method over five years, as with costs.
*1 Economic effects includes the following items:
1. Net income effects: benefits for which there is real income, including income from the sale of resalable material and income from environmental technology
patents.
2. Reduced expenses effects: reduction in electricity and waste treatment expenses arising from environmental impact reduction activities

Hitachi Group Corporate Social Responsibility Report 2008 | Next Eco | Eco-Mind & Global Environmental Management 086

Physical Effects*1
Amount Reduced (parentheses: equivalent
number of households)

Item

Overview

Reduction in the amount ofenergy usedduring production

Decrease in amount of energy used due to installation of energysaving equipment

Reduction in the amount of
final waste disposal

Decrease in final waste output volumes due to separation andrecycling activities

Reduction in the amount ofenergy consumed
during product usage

Decrease in energy requirements of Hitachi products

FY 2005

FY 2006

FY 2007

157 million kW(45,000)

159 million kW(46,000)

161 million kW(46,000)

5,254t(18,000)

6,375t(22,000)

10,476t(35,000)

723 million
kWh(208,000)

813 million
kWh(234,000)

723 million
kWh(208,000)

FY 2005

FY 2006

FY 2007

Benefits on equipment investment are calculated using the straight-line method over five years, as with costs.

Efficiency of Environmental Impact Reduction*2
Category
Reduction in energy used during production (million kWh/billion yen)

36

30

28

Reduction in amount of waste for final disposal (t/billion yen)

1,620

1,800

2,840

*2 This is an indicator of the efficiency of environmental impact reduction, calculated as the amount of environmental impact reduction divided by expenses needed forthe reduction.

Cost Ratio by Industry Segment			

1%

Investment Ratio by Industry Segment

2% 10%

15%

29%

5%

5%

44%
31%
34%

16%

8%

Economic Effect Ratio by Industry Segment

Investment Ratio by Countermeasure
Other

1% 6%

11%

4%
14%
9%

66%

43%
Pollution
Pervention

Prevention of
Global Warming

39%
7%
Waste Reduction

Information & Telecommunication Systems
Digital Media & Consumer ProductsElectronic Devices
High Functional & Components

Power & Industrial Systems
Logistics, Services & Others

Hitachi Group Corporate Social Responsibility Report 2008 | Next Eco | Eco-Mind & Global Environmental Management 087

Legal Compliance
The Hitachi Group sets voluntary standards that are stricter than those imposed by law.
Information on major regulatory changes and new legislative trends is shared within the Group in
an effort to reduce environmental risk. In fiscal 2007, the pH value of water discharged from oneof our Chinese plants temporarily surpassed the legal limit, resulting in the imposition of fines, but
prompt measures were taken to neutralize the effluent, and there was no impact on the aquatic
environment. There were no other environmental incidents that resulted in the imposition of fines
or penalties.

Hitachi Group Corporate Social Responsibility Report 2008 | Next Eco | Eco-Mind & Global Environmental Management 088

Environmental Impact Data
for Corporate Activities (Fiscal 2007)
This chart shows resource inputs and environmental impacts pertaining to
the fiscal 2007 corporate activities of the 249 Hitachi Group companies
covered by this report

Corporate Activities ( Japan )†1CO2 emissions

Total input of materials
MetalsIron (including steel sheeting)
1,716 kt
Stainless steel
Aluminum
CopperOther nonferrous metals
Plastics
Thermoplastics
175 kt
Thermohardened plastics
RubberOther materials
ChemicalHandling volume for
substanceschemical substances covered
under the PRTR law
Handling volume forozone-depleting substances
Handling volume forgreenhouse gases

Total volume of products manufactured and sold 4,169 kt including packages
Volume of chemical substances discharged or transferred
Discharge or transfer volume for chemical
4.8 kt *1.01% (FY 2005)
substances covered under the PRTR law
Volume of discharge for ozone-depleting substances 0.1 t (0.01 ODPt †3)
Greenhouse gas SF6
6 t (139 kGWPt)
emissions 22 t PFCs
4 t (36 kGWPt)(192 kGWPt)
HFCs
12 t (17 kGWPt)
Substances sub- SOx
104 t *0.01% (FY 2002)
ject to emissions NOx
814 t *0.14% (FY 2002)
regulations
Total volume of waste generated
613 ktWaste generated
613 kt *0.1% (FY 2004)
Waste reduction
54 kt *0.022% (FY 2004)
Recycling (rate) Volume re-used
103 kt (19%)
550 kt (98%)
Volume of material recycled
413 kt (74%)
Volume of thermal recycled
35 kt (7%)
Final disposal (rate)
9 kt (1.6%) *0.025% (FY 2004)

Water consumption
Surface waterIndustrial waterGroundwaterRainwater

Corporate Activities ( Outside Japan )2,802 kt (2,802 kGWPt †2) *0.2% (FY 2006)

Total energy consumption (crude oil equivalent)1,690,000 kℓ
Electricity
5.18 billion kWh
Oil (crude oil equivalent)
332,000 kℓ
NewElectricity
70 million kWhenergy types
Heat
17,000 kℓ

1,159 kt
44 kt
70 kt
312 kt131 kt168 kt7.3 kt4 kt
735 kt217 kt11 t1,101 t6.080 million m3
7.07 million m3
27.99 million m3
25.74 million m3
0.002 million m3

Volume ofwater reused
60.42 million m3

Total volume of wastewater
Breakdown of
Public waters
wastewater
Sewerage system
by destination
Underground infiltration, etc.
Water quality
BOD
COD

53.28 million m3
42.85 million m3
9.23 million m3
1.19 million m3
421 t
289 t

Total energy consumption (crude oil equivalent)520,000 kℓ
Electricity
1.7 billion kWh
Oil (crude oil equivalent)
77,000 kℓ

CO2 emissions

Total input of chemical substances
ChemicalHandling volume for
substanceschemical substances covered
under the PRTR law

Volume of chemical substances released or transferred
Discharge or transfer volume for chemical substances
covered under the PRTR law
0.5 kt
114 t
SOx
NOx
270 t
Total volume of waste generated
177 ktWaste generated
155 ktWaste reduction
11 kt
Recycling (rate)
92 kt (64%)
Final disposal (rate)
52 kt (33%)

Water consumption
Surface waterIndustrial waterGroundwater

7 kt

13.33 million m3
5.56 million m3
5.01 million m3
2.47 million m3

Volume ofwater reused
4.73 million m3

Total volume of wastewater
Breakdown of
Public waters
wastewater
Sewerage system
by destination
Etc.
Water quality
BOD
COD

1,433 kt (1,433 kGWPt)

13.03 million m3
3.20 million m3
9.18 million m3
0.065 million m3
249 t
758 t

* Ratio of national total, and fiscal year used for comparison. Source for the total figures for Japan was the fiscal 2006 PRTR results listed in the Annual Report on the Environment in Japan 2007. (Ministryof the Environment)†1 Input and Output: Input represents the total volume of energy, materials (raw materials, chemicals, etc.), and water used in manufacturing of products and other business operations. Output represents
the products themselves, as well as the environmental impacts caused in the course of business operations, including CO2 and other chemicals, waste products, and wastewater.
†2 GWPt: Global warming potential (global warming coefficient, in CO2 equivalent tonnes). Converted to amount of CO2 (t) by multiplying greenhouse gas emissions by the global warming coefficient. The
global warming coefficient shows the extent of impact on global warming from a greenhouse gas, compared to the equivalent amount of CO2.
†3 ODPt: Ozone depletion potential converted to CFC equivalent tonnes by multiplying ozone depletion emissions by the ozone depletion coefficient.

Hitachi Group Corporate Social Responsibility Report 2008 | Next Eco | Environmental Impact Data for Corporate Activities 089

Next-Generation Products & Services
The Hitachi Group will continue contributing to a sustainable,
recycling-oriented society by offering products and services
that reduce the impact on the environment by conserving energy
and natural resources, reducing global warming,and reducing the use of hazardous chemicals

Expanding Lineup of Eco-Products
Expanding Lineup of Eco-Products and Super Eco-Products
Hitachi introduced Assessment for DfE (Design for Environment) into product development as away to reduce the environmental impact at every stage of the product lifecycle. The assessment
looks at eight criteria, including resource reduction, product longevity, resource recycling, andease of decomposition. New products that outperform existing products in these criteria are called
Eco-Products.
Some Eco-Products are designated as Super Eco-Products when they achieve anenvironmental efficiency at least 10 times greater than existing products, or when they are industry
leaders or highly regarded. Environmental efficiency is an index of reducing greenhouse gas
emissions, resource use and boosting product or service value. Hitachi is working to expand its
Super Eco-Product lineup. As of March 2008, 1,057 Hitachi Group products (6,216 models) werecertified as Eco-Products. The certification rates were 97 percent for Hitachi’s information andtelecommunications systems, digital media and consumer products, and 84 percent for electronic
devices, power and industrial systems, high functional materials and components, logistics,
services and others. Of these, 74 products and 184 models are Super Eco-Products, or about 12
percent of Eco-Products by sales. The intention is to boost this ratio to more than 30 percent by
fiscal 2010.
Approach to Complete Lifecycle Product Design
Resource Conservation
Materials

Production

Distribution

Usage

RecoveryAppropriate
anddisposal
decomposition

Reuse / Recycling

Environment Assessment
Assessment criteria: Resource reduction, product longevity, resource
recycling, ease of decomposition and processing, environmental conservation, energy efficiency, information disclosure, packaging materials

Hitachi Group Corporate Social Responsibility Report 2008 | Next Eco | Next-Generation Products & Services 090

Eco-Product Certification Trends

Percentage of products certified
as Eco-Products (% by sales)(%)

Percentage of products certified as Eco-Products *1
Percentage of products certified as Eco-Products *2
No. of certified products (no. of models in parentheses)

100

90

80

69

60
40

940
[4,506]

92
79

97
84

1,012
[5,491]

1,057[6,216](No. ofproducts)

1,200
1,000

20
0

800
2005

2006

2007 (FY)0*1 Product categories: Information and telecommunications systems,
digital media and consumer products*2 Product categories: Electronic devices, power and industrial systems,
high functional materials and components, logistics, services and others

Boosting Environmental Efficiency
Hitachi has introduced the concept of “environmental efficiency” as a way of quantitatively
evaluating actions that combat global warming and conserve resources. This product evaluationindex is used to calculate two measures of efficiency of a product’s value for function and lifespan.
The first measure is the ratio of the product’s value to the raw materials used in its production andthe amount of waste remaining when it is disposed (resource efficiency); the second is the ratioof a product’s value to the quantity of greenhouse gases generated during its lifecycle (efficiencyof global warming prevention). We have also adopted “factors” to express improvements inenvironmental efficiency relative to a base year. We calculated the environmental efficiencyof representative Hitachi Group products and published the information in a brochure titledEnvironmental Efficiency of Hitachi Products Based on Factor X.
Definition of Environmental Efficiency and Factors
Definition of Environmental Efficiencyt&GGJDJFODZPG(MPCBM8BSNJOH1SFWFOUJPO 1SPEVDUMJGFTQBO 1¨1SPEVDUGVODUJPOt3FTPVSDF&GGJDJFODZ

 7PMVNFPGHSFFOIPVTFHBTFNJTTJPOTUISPVHIPVU UIFQSPEVDUMJGFDZDMF ë3FTPVSDFWBMVFDPFGGJDJFOUT¨ OFXSFTPVSDFTVTFE JOMJGFDZDMF 2 SFTPVSDFTEJTQPTFEPGJOMJGFDZDMF 3 ) 1SPEVDUMJGFTQBO 1¨1SPEVDUGVODUJPODefinition of Factorst'BDUPSPG(MPCBM8BSNJOH1SFWFOUJPO &GGJDJFODZJOQSFWFOUJPOPGHMPCBMXBSNJOHPG
 FWBMVBUFEQSPEVDUt3FTPVSDF'BDUPS 1SFWFOUJPOPGHMPCBMXBSNJOHFGGJDJFODZPG
 SFGFSFODFQSPEVDU 3FTPVSDFFGGJDJFODZPGSFGFSFODFQSPEVDU 3FTPVSDFFGGJDJFODZPGFWBMVBUFEQSPEVDU5IFTQFDJmFEVTBHFQFSJPEPGBQSPEVDU
5IFRVBOUJUZPGSFTPVSDFTVTFEUPNBOVGBDUVSFBQSPEVDU NJOVTUIFRVBOUJUZPGSFTPVSDFTSFVTFEPSSFDZDMFE
5IFRVBOUJUZPGSFTPVSDFTVTFEUPNBOVGBDUVSFBQSPEVDU NJOVTUIFRVBOUJUZPGSFVTBCMFPSSFDZDMBCMFSFTPVSDFT

Environmental Efficiency of Hitachi Products Based on Factor X

Environmental Efficiency of Hitachi Products Based on Factor X, FY 2007 (English)
http://www.hitachi.com/environment/library/pdf/facterx07_e.pdf
Environmental Efficiency of Hitachi Products Based on Factor X, FY 2007 (Japanese)
http://www.hitachi.com/environment/library/pdf/facterx07_403p.pdf
Environmental Efficiency of Hitachi Products Based on Factor X, FY 2005 (English)
http://www.hitachi.com/environment/library/pdf/facterx05_e.pdf
Environmental Efficiency of Hitachi Products Based on Factor X, FY 2005 (Chinese)
http://www.hitachi.com/environment/library/pdf/facterx05_c.pdf
Environmental Efficiency of Hitachi Products Based on Factor X, FY 2005 (Japanese)
http://www.hitachi.com/environment/library/pdf/facterx05.pdf

Hitachi Group Corporate Social Responsibility Report 2008 | Next Eco | Next-Generation Products & Services 091

Product and package recycling
http://www.hitachi.com/environment/activities/more/wrapping.html

Super Eco-Products(1) LCD Television—Wooo UT Series
Hitachi, Ltd.
Environmentally conscious features
Annual power consumption cut by around 38%*1
Lightweight construction boosts transportation efficiency by 20%*2
Housing made with environmentally conscious halogen-free flame retardant
Compliant with RoHS directive, J-Moss*3 /Green Mark standards
Environmental efficiency
Factor of global warming prevention: 2.3
Resource factor: 2.7
Product features
Slim and lightweight breathtaking design for 360-degree around
Wide viewing angle HD IPS Alpha panel*1 Comparison between UT32-HV700B and 2004 models from the same category*2 Comparison between UT32-HV700B and the Hitachi L32-H01 model from the same category*3 J-Moss (JIS C 0950): Abbreviation for “Japanese Industrial Standard for Marking the presence of the Specific chemical Substances for electrical and electronicequipment.” This regulation, established under Japan’s amended Law for Promotion of Effective Utilization of Resources, requires manufacturers to use J-Mosscontent labeling on all articles in the seven designated product categories that contain any of the six RoHS substances in significant concentrations. A Green Markmay be voluntarily applied to articles for which the content of these substances falls below the designated threshold.

(2) Blu-ray Disc Camcorder—Wooo
Hitachi, Ltd.
Environmentally conscious features
One Blu-ray disc holds as much recorded video as four DVDs,*1 for resource conservation
No styrene foam in packaging
Manual printed on paper made from recycled shipping boxes
Housing made with environmentally conscious halogen-free flame retardant
Compliant with RoHS and WEEE*2 directives
Environmental efficiency
Factor of global warming prevention: 25.5
Resource factor: 41.3
Product features
Total system, including lens, image sensor, and processing engine, supports 1920 × 1080 full HD video
Advanced 5.3 megapixel CMOS sensor*1 Compared with an AVCHD-recorded DVD*2 WEEE directive: Waste Electrical and Electronic Equipment Directive 2002/96/EC, which requires companies to create mechanisms for recovery and disposal ofwaste electrical and electronic equipment

Hitachi Group Corporate Social Responsibility Report 2008 | Next Eco | Next-Generation Products & Services 092

(3) Refrigerator—Featuring a Mid-freezer Layout and Vacuum Compartment
Hitachi Appliances
Environmentally conscious features
Cuts annual power consumption by about 20%* with such features as flexible vacuum insulation, a newcompact, high-performance compressor, and Pulse-Amplitude Modulation (PAM) & low-speed control
Uses non-fluorocarbon (HFC) refrigerant R600a (isobutane) with an extremely low global warming potential(GWP)
Recycled plastic used for circuit board cases, etc.
Compliant with RoHS directive, J-Moss/Green Mark standards
Winner of the ECCJ (Energy Conservation Center, Japan) Chairman’s Prize at the 2007 Energy Conservation
Grand Awards
Prize winner at Energy Conservation Grand Awards for two consecutive years (FY 2006, FY 2007)
Environmental efficiency
Factor of global warming prevention: 3.0
Resource factor: 2.1
Product features
Vacuum compartment uses vacuum storage to protect nutrients, preserve freshness, and prevent
deterioration of easily oxidized foods
Unique thin-walled construction boosts storage capacity by about 150 liters over refrigerators made 10
years earlier—without taking up more space* Comparison between the new R-X6000 and the R-W5700, Hitachi’s model from the same category one year ago(4) Room Air Conditioner—Moisturizing with Ion Mist (S series)
Hitachi Appliances
Environmentally conscious features
Annual performance factor (APF) improved by about 50%* with high-density heat exchanger, high-efficiency
scroll compressor, and IQ-PAM engine
Recycled plastic used for fan of outdoor unit and cabinet of indoor unit
Compliant with RoHS directive, J-Moss/Green Mark standards
Winner of the ECCJ (Energy Conservation Center, Japan) Chairman’s Prize at the 2007 Energy Conservation
Grand Awards
Environmental efficiency
Factor of global warming prevention: 1.8
Resource factor: 1.9
Product features
Stainless steel air ducts and louvers eliminate bacteria inside unit; features self-cleaning stainless steel filter
Ion mist fights airborne viruses, bacteria, and mold spores; breaks down and neutralizes odors in the air andin fabric* Comparison between RAS-S40X2 and RAS-401HX2, Hitachi’s model from the same category 11 years ago. Achieved industry-leading APF 5.8 in size category;
below cooling capacity 4kW/ indoor unit width is 800 mm.

(5) Washer-Dryer—Blow Iron Big Drum
Hitachi Appliances
Environmentally conscious features“Blow iron” and high-speed spin-dry promote fast, low-energy drying; Energy-efficient drying system reuses
heat from the jet fan motor to cut power consumption by about one-half*
Washer-dryer bath-water pump, 2-way circulating pump, and “nano micelle shower” cut detergent use by
about 40% and water use by about 90%*
Recycled plastic used in frame and outer tub
Compliant with RoHS directive, J-Moss/Green Mark standards
Environmental efficiency
Factor of global warming prevention: 6.9
Resource factor: 4.0
Product features“Blow iron” smoothes wrinkles while gently drying laundry by blowing air at 360 km/h
Large-capacity, 60-cm-diameter drum creates strong beating action for high cleaning performance andspreads clothing out during drying to keep it fluffy and unwrinkled

Hitachi Group Corporate Social Responsibility Report 2008 | Next Eco | Next-Generation Products & Services 093

* Compared with FY 2002 Hitachi Appliances model(6) Vacuum Cleaner—Robot Cyclone RS1
Hitachi Appliances
Environmentally conscious features
Triple-flow high-compression cyclone system and Plasma ULPA Construction enable 99.999% dust removal
and make ventilation unnecessary during use for savings on heating and cooling energy
Dirt-sensing head saves energy by detecting floor texture for optimal control of suction, brush rotation
speed, and propulsion
RoHS compliant
Environmental efficiency
Factor of global warming prevention: 1.1
Resource factor: 1.5
Product features
Power Spiral dust removal mechanism cleans filter automatically during each use, allowing a single filter tobe used for about 10 years
Dust case automatically shifts position for easy removal during dust disposal(7) Air Purifier—Cleair
Hitachi Appliances
Environmentally conscious features
Uses artificial zeolite made from coal ash, a byproduct of thermoelectric power generation, as a deodorizing
agent
Uses inverter motor for 6% reduction in power consumption during standard operation, 25% reduction at
lowest airflow setting*
RoHS compliant
Environmental efficiency
Factor of global warming prevention: 18.8
Resource factor: 5.8
Product features
Powerful double deodorizing action using Big HEPA nanotech filter and ion mist for 99% deodorization
High-performance evaporative filter and wing turbofan for humidifying capacity of approximately 600 mL/h

* Compared with FY 2006 Hitachi Appliances model(8) Hard Disk Drive—Deskstar P7K500
Hitachi Global Storage Technologies
Environmentally conscious features
By adoption of innovative technologies in regulator, LSI and power management, achieved 40%* reduction of
power consumption at idle time
By significant improvement of recording density through advanced magnetic technology, achieved 14%*
resource saving by the reduction of magnetic heads and disks
Environmental efficiency
Factor of global warming prevention: 26.8
Resource factor: 31.3
Product features
Energy efficient 3.5-inch hard disk drive for desktop computers
Second-generation perpendicular magnetic recording technology provides superior reliability with large 250
GB-per-platter capacity* Compared with prior HGST model

Hitachi Group Corporate Social Responsibility Report 2008 | Next Eco | Next-Generation Products & Services 094

(9) Amorphous Core Transformer—Super Amorphous XMC
Hitachi Industrial Equipment Systems
Environmentally conscious features
Amorphous alloy*1 used for core, yielding 30% reduction in standby power consumption*2
Energy conservation standard achievement ratio*3 of 140% for FY 2007
Dry-type (not oil-filled) transformer using epoxy resin–encapsulated coils for lower environmental impact
UN-approved technology for use in Clean Development Mechanism (CDM) energy-conservation projects
Winner of Governor of Tokyo Prize in the 2007 Japan Electrical Construction Association Products Contest
Environmental efficiency
Factor of global warming prevention: 1.3
Resource factor: 2.1
Product features
Fire-resistant transformer made with self-extinguishing materials
Improved, wound coil shape for 10% smaller,*4 lighter transformer that fits into a standard case
*1 Use of non-crystalline metal alloy with an amorphous molecular structure makes for low power loss when flux passes through the core; the amorphous alloy can also
be rolled thinner than silicon steel plates, reducing no-load loss
*2 Compared with company’s standard transformers*3 Value expressing the percentage of the target value that a product achieves under Japan’s Energy-Saving Labeling Program, which sets quantitative energy-saving
standards for various categories of electrical equipment according to capacity, function, size, etc.
*4 Compared with company’s earlier amorphous transformers(10) Flexible Flat Cable—Modified II Tin-Plated FFC
Hitachi Cable Fine-TechEnvironmentally conscious featuresThin tape cable facilitates denser wiring in limited spaces
RoHS-compliant lead-free plating has nano-thin zinc coating to solve problem of “whisker” *formation on
lead-free tin-plated surfaces
Replaces gold plating, eliminating need for hazardous substances in manufacturing process and reducing
environmental impact
Winner of Electric/Electronic Component prize in Fourth Monozukuri Parts Awards (sponsored by Nikkan
Kogyo Shimbun)
Product features
Perfect for wiring between circuit boards and between components of electronic devices (computers,
printers, copiers, flat-panel TVs, etc.)
Parallel array of multiple Modified II electrical conductors on a flat plane, separated from one another byinsulating film, allows for a larger number of wires arrayed more closely* Whiskers: Hair- or needle-like crystalline structures that grow from the surface during tin plating—a result of external or internal stresses—that can cause shortcircuits

Managing Chemical Content of Products
Compliance with REACH Regulation
To use chemicals safely, we comply with the REACH regulation,†1 which promotes the safe use ofchemicals. REACH compliance means registering chemical substances exported to the European
Union (EU), as well as notifying and providing information on substances contained in products
covering thousands of chemical types. Because we see registration and notification under the
REACH regulation as a task for the whole supply chain, we are using our participation in JAMP†2
to develop a more effective information exchange system. For even better communications,
we will link REACH compliance with the Group’s Integrated Management System for Chemical
Substances Contained in Products, which contains information on 480,000 parts (March 2008).
†1 REACH: Registration, Evaluation, Authorisation, and Restriction of Chemicals (This EU regulation came into
force on June 1, 2007.)†2 JAMP: Joint Article Management Promotion-consortium

Hitachi Group Corporate Social Responsibility Report 2008 | Next Eco | Next-Generation Products & Services 095

Integrated Management System for Chemical Substances Contained in Products
Environmental
CSR database
Total amount of designatedchemical substances
received and shipped

Disclosure ofenvironmental
information

Supplier

Composition
simulator

Design forEnvironment
(DfE)

Green
procurement

Reduction ofenvironmental
impactParts
composition
information

Purchasing
history

Assembly andprocessing
history

Risk management(Individual producttraceability)

Customers/society

A Gree’ Net
Parts composition
information

Composition
simulator
results

Shipment
history

Sales,
maintenance,and repair history

J-Moss Compliance
The Hitachi Group applies the Green Mark label to products that contain specified chemical
substances that are within established thresholds, in accordance with J-Moss (JIS C 0950), theJapanese industrial standard for “the marking of the presence of the specific chemical substancesfor electrical and electronic equipment” formulated in compliance with the amended Law for the
Promotion of Effective Utilization of Resources.
About J-Moss Green Mark labeling guidelines
http://www.hitachi.com/environment/activities/jmoss.html

Supporting Global Ecodesign
In April 2008, we compiled ecodesign management guidelines in line with Europe’s EuP
Directive,†3 used for assessing product designs from an environmental perspective. To minimize
the environmental impact, Hitachi product guidelines require every operational unit to design
products with less environmental impact in all phases—including planning, design, procurement,
manufacturing and quality control—and to maintain clear design records. Based on these new
guidelines, we will both meet regulatory requirements and lead the industry in lowering productenvironmental impact.
†3 EuP Directive: Directive on Ecodesign of Energy-using Products

Sustainable Business Model
To help realize a sustainable society, the Hitachi Group is committed to building a sustainablebusiness model. We have defined a sustainable business as “a business that reduces theenvironmental burden or otherwise contributes to a sustainable society.” We are working todevelop businesses and solutions that help counter global warming or promote effective use ofresources.

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Businesses that Help Counter Global Warming
The Hitachi Group developed a methodology for reducing CO2 emissions by using energy-efficienttransformers such as the amorphous transfomer made by Hitachi Industrial Equipment Systems
Co., Ltd. In March 2008, this methodology was approved by the United Nations Framework
Convention on Climate Change (UNFCC) as the first Clean Development Mechanism (CDM)†4
methodology in the energy distribution sector.
When electric power is distributed to where it is consumed, a certain amount of power is lostin the process, and the quality of a transformer core can affect how much is lost. The cores of thetransformers used in the Hitachi methodology are made from an amorphous metal alloy, which
reduces standby power loss by one-third over conventional transformers (using Hitachi products
for comparison), helping to cut CO2 emissions.
This methodology can be used by any of the developed countries that have ratified the Kyoto
Protocol. In this way Japan’s advanced energy-saving technology is poised to play a significant
role in the fight against global warming.
†4 Clean Development Mechanism (CDM): System established by the Kyoto Protocol under which developed
countries can earn carbon credits applicable to their own emission reduction targets by transferring funds
and technology to developing nations in the form of projects to reduce greenhouse gas emissions. Projects
must receive approval from the Secretariat for the UNFCC
Amorphous Transformers and the Clean Development Mechanism
Factories

Power plant

Energy is saved by replacing theconventional transformers in the power
grid with Hitachi’s Super Amorphoustransformer. If applied in China, thisapproach could result in a 210,000-ton
reduction in carbon emissions over 10
years (assuming deployment of 750
315-kVA transformers each year).

Power grid

Officebuildings

Apartment
buildings: Transformer: Power loss

Businesses that Promote the Effective Use of Resources
Hitachi Capital Group, which leases business computers, has developed a system for reusing andrecycling computers returned at the end of their leases. After erasing all data to eliminate the riskof information leakage, the equipment is sold second-hand.

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Recycling previously leased business computers

Support System for Building a Sustainable Society
Working on the premise that the creation of a sustainable society requires individual consumers
to change their behavior, the Information and Telecommunications Systems Group of Hitachi,Ltd., carried out a food navigation demonstration experiment. Smart cards, and other Hitachiubiquitous information technology, were used to provide consumers with information for making
environment- and health-conscious lifestyle decisions at supermarkets and other stores, as wellas through online food retailers. The results were analyzed to determine whether the information
caused them to change their food-buying behavior. The analysis showed that the information did
indeed have an effect; it encouraged environmentally sound buying behavior. This experiment
was carried out as part of a research project, “Development of Core Technologies for Sustainable
Ubiquitous Society,” supported by a grant from the Japan Science and Technology Agency.
Support System for Building a Sustainable Society(2) Based on the consumer’s preferences, information appears on an LCD
monitor on environmental, health, andsafety issues, promoting environmentand health-conscious buying(1) Consumer touches the smart card
to the panel

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Super Eco-Factories & Offices
Super Eco-Factories are designed for the prevention of global warming,
efficient use of resources, and management of chemical substances.
To reduce the environmental impact of production facilities and offices,
the Hitachi Group is setting ambitious goals, such as striving to achieve certificationof Super Eco-Factories as quickly as possible

Super Eco-Factories and Offices
Promoting Super Eco-Factories
The Hitachi Group has introduced Super Eco-Factory Certification as a way to promote industryleading environmental action and develop pioneering best practices.
In fiscal 2007, eight factories and one office were certified Super Eco-Factories. Hitachi aims
to raise the total to 30 by fiscal 2010.
Super Eco-Factory System
Super Eco-Factory
Certification Criteria

1. Energy efficiency
2. Improvements in resource recycling
3. VOC emissions reduction
4. Water recycling
5. Renewable energy use
6. Other (special commendation or
use of original technologies
to meet targets)

Super
Eco-Factories(as of 2006)
Certified as achieving
industry-leading
direct environmental
impact reduction

Eco-Factories(as of 1999)
GREEN 21 activities
Overall assessments ofenvironmental management andenvironmental impact reduction
based on target goals for a given fiscal year

Offices and factories

Super Eco-Factories for LCD Panels
Hitachi Displays and IPS Alpha Technology, which manufacture LCD panels, have a high impact on
the environment compared with other Hitachi Group plants because of their use of energy, water,
and chemicals. To lessen this impact, plants are now using the latest energy-saving equipment andhave adopted energy management systems. Hitachi Displays cut energy consumption by about
15 percent by installing a natural gas cogeneration system and an ice thermal storage system. IPS
Alpha Technology has achieved energy savings of 40 percent through measures such as replacing
a 200-volt power distribution system with a 400-volt system to reduce power loss. In addition, 60
percent of the distilled water is reused in production, thanks to a new advanced water treatment
system.

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Advanced water treatment system (IPS Alpha Technology)

CO2 Reduction in Production Processes
We are taking a global approach to reduce the amount of energy used and greenhouse gases
produced in the production process, as well as transportation-related energy.
Domestic Reduction of CO2 Emissions
The Hitachi Group is striving to achieve two CO2 emission reduction targets: cutting total CO2
emissions to 7 percent below the 1990 level by fiscal 2010; and in the same period, either meeting
specific emission targets set by industry groups, or reducing CO2 emissions per unit of production
by 25 percent (in offices, hospitals, etc.).
In fiscal 2007, as a result of investing 6.4 billion yen in energy saving, Hitachi reduced CO2
emissions by 102,000 tonnes. The Group’s total CO2 emissions fell to 2.802 million tonnes, or 86
percent of the 1990 level.
Alongside energy saving, we are using energy conversion as a way to cut CO2 emissions,
including reducing the use of heavy oil by converting to natural gas as a fuel. Hitachi Cable has
installed a natural gas pipeline at the Tsuchiura Works, reducing CO2 emissions by 5,000 tonnes
per year.
Trends in CO2 Emissions in Japan
CO2 emissions
Trend in CO2 emission reduction rate
(Target values are given in parentheses)(kt CO2/yr)

4,000

(%)

100
3,250

3,000

86

86

2,805

2,802

(93)

100
80
60

2,000
40
1,000
0

20
1990

2006

2007

2010 (FY)0(target)Emissions were calculated using CO2 emission coefficients for eachelectric power company, as published by the Ministry of the Environment

CO2 Emission Reduction outside Japan
With greater production volume, the construction of new factories, and other changes in thebusiness environment, the Hitachi Group has set the target of reducing CO2 emissions per unit ofproduction to 5 percent below the 2003 level by 2010. In fiscal 2007, we cut total CO2 emissions
per unit of production by 3.3 percent over the 2003 level.

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Trends in CO2 Emissions outside Japan
EuropeNorth and South America
Asia (excluding China)
China
CO2 emissions per unit of production(target values are in parentheses)(kt CO2/yr)

100

2,000

97.7

96.7

1,379

1,433

（95）

（%）

100
80

1,200

60

1,000
40
20
0

2003

2006

2007

2010 (FY)0(target)Reduction of Other Greenhouse Gases
The Hitachi Group is working to reduce emissions of greenhouse gases other than CO2 (specifically
PFCs, HFCs, and SF6), and has already met the targets set by industry associations. Concerned,
however, about the relatively large volume of SF6 emissions, the Group as a whole has beenworking toward the goal of cutting those emissions in half (from the fiscal 2003 level) by fiscal
2010. Switching to alternative gases, installing gas scrubbers, and boosting recycling, enabled us
to slash SF6 emissions by 67 percent (from fiscal 2003), far surpassing our target (see page 81 formore information).
Greenhouse Gas Emissions and Breakdown( kGWPt/year )
500

HFC
PFC
SF6

490
70

420
250

0

2003

190
10
50

192
17
36

130

139

2006

2007 ( FY )Using Alternative Energy Sources
The Hitachi Group has been examining production sites for potential use of alternative energy
sources. In fiscal 2007, the Group relied on alternative energy sources for 7,460 kcal of the heatconsumed (44 percent of the previous year) and 57,400 MWh of electricity (79 percent), thanks tothe adoption of new gas cogeneration systems and other measures. In addition, we have invested
in, and contracted with, Japan Natural Energy Co. to generate 500 MWh from wind power tosupply all the electricity needs of the Hitachi Group expo “uVALUE Convention” and 60 percent of
the power for our corporate headquarters.

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Volume of New Energies (Fiscal 2007)
Wind power

Solar power

0.5% 0.4%
Heat(crude oil conversion):
7,460 kl
100%

Electricity:
57,420 MWh
99.1%

Gas co-generation

Gas co-generation

CO2 Reduction in Offices and Other Buildings
In fiscal 2006, Japan’s manufacturing sector achieved a 5 percent decrease in CO2 emissions fromthe baseline year of 1990. However, more vigorous energy saving is needed in the commercial
sector (including offices and service businesses, where CO2 emissions have increased 40 percent
over the same period). The Hitachi Group is actively promoting energy conservation in offices
and service businesses, working toward the goal of a 25 percent cut in CO2 emissions per unit ofoutput, compared with 1990.
Boosting a Hospital’s Total Thermal Efficiency
Unlike offices, hospitals need to maintain an optimum indoor environment around the clock. As aresult, they consume enormous amounts of thermal energy from steam, hot water, air conditioning,and other sources. And because energy consumption fluctuates according to the time of day, dayof the week, and season, hospitals need an efficient energy-management system that can adapt
to variable energy use.
For total energy efficiency, Hitachi General Hospital, a division of Hitachi, Ltd., has adopted agas cogeneration system centered on two gas-engine generators that run on city gas or LPG andprovide both regular and emergency power. The recovered steam and water from the generators
provide a priority heat source for absorption chillers, air conditioners (via heat exchange) and the
hot water supply. Fluctuations in steam pressure are moderated by three quantity-controlled,
compact, once-through boilers. Air-conditioning heat pumps cope with fluctuations in the supply
of cold and warm water, and overall operation is synchronized and coordinated by inverters and an
intelligent control system.
The hospital has also saved energy by replacing four conventional chillers with two energyefficient centrifugal chillers and one brine centrifugal chiller, switching the energy source from city
gas to electricity, and adopting an ice thermal storage system using nighttime power. The result
has been annual energy savings equivalent to 1,000 tons of CO2.

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Gas engine

Waste heat recovery unit
Inverter control panel

Generator

Gas-engine generator

Energy-efficient centrifugal chiller

Energy Conservation in Office Buildings
At Chuo Shoji’s Hitachi-Omori 2nd Building, efforts to conserve energy, including switching toenergy-efficient cooling units, have been going on for some time, but further savings were realized
recently with the installation of an optimal control system. This system controls the pump speed
and adjusts the flow of coolant and cold water in response to variations in air temperature and coldwater temperature. The result has been a 12 percent drop in the amount of electricity consumed
by the air-conditioning system as a whole.
At the same time, Hitachi’s Information & Telecommunication Systems Group headquarters
installed constant-voltage devices on motors and fluorescent lamps—without inverters—to reduce
electricity used when converting electricity from the primary voltage (6,000V) supplied by the powercompany to working voltage (200V or 100V). This is a simple energy-saving system for apartmentbuildings where electrical equipment cannot be altered, since the constant-voltage transformer
can simply be connected to the breaker box.
We will continue to pursue energy conservation in our offices by applying these practices toother locations.

Increasing Transportation Efficiency
The Hitachi Group is lowering the amount of resources used in product packaging and reducing
transportation CO2 by improving load efficiencies. A modal shift to more efficient rail transport
increased the rate of rail shipments from 3 percent in fiscal 2006 to 16 percent in fiscal 2007.
A Modal Shift for Shipping Elevators and Escalators
The Urban Planning and Development Systems Group is promoting a modal shift to rail transport
to reduce the environmental impact of shipping elevators, escalators and components. Elevatorsand escalators have long been shipped to buildings and commercial sites by truck. What is more,
the number of trucks was increasing every year, partly because the varied shapes of the products
made them difficult to stack, but also because shipping had to be coordinated with installation. To
address these problems, stackable packaging was used and the production schedule adjusted
to the delivery date to allow the products to be shipped by rail. At first restricted to Kyushu, therail-transport area has gradually expanded, spreading as far as the Kansai region near the end of
fiscal 2007. At freight rail yards, the products are loaded into large containers, and the result is thatthe volume of rail transport for the group has doubled to 360,000 ton-kilometers. These measures
have reduced annual CO2 emissions by 12 tonnes, while helping to alleviate traffic congestion.

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A Modal Shift for Shipping Household Appliances
In the past, Hitachi Appliances’ Tochigi Works used marine containers to ship household appliances
produced overseas from the Port of Tokyo to Tochigi by tractor-trailer and by rail (40-foot containersonly). In fiscal 2007, however, the company began a drive to accelerate this modal shift by using
trailers with extendable chassis and devising a way to ship 20-foot containers together with the
40-foot containers by rail transport, resulting in an annual 61.7-ton reduction in CO2 emissions.
This undertaking was part of the fiscal 2007 Green Logistics Partnership promotion program.†1
The Tochigi Works has also been shifting to rail transport, using large 31-foot containers thatcan be loaded onto 10-ton trucks for daily shipments of home air-conditioning equipment sent toFukuoka and Sapporo. In fiscal 2007, use of rail freight increased by 12 percent.
†1 A program to support, promote, and expand cutting-edge, inter-industry efforts to improve distribution
systems through cooperation between shippers and businesses in the logistics industry. (Sponsored jointly
by the Japan Institute of Logistics Systems; the Japan Federation of Freight Industries; the Ministry of
Economy, Trade and Industry; and the Ministry of Land, Infrastructure and Transport; with the cooperation of
Nippon Keidanren.)Rail transportation of household appliances in special containers

Domestic Freight by Mode
Rail

Air

Air
Rail

Marine436
126 (3%) (0%)(10%)
Freight inMillion ton-kilometers
1,263
1,097
(87%)

Marine

219
(16%)

1
(0%)

130
(10%) Freight inMillion ton-kilometers
1,356
1,355
(74%)

Truck

FY 2006

Unit: Million ton-kilometers
Percentage of total in parentheses

Truck

FY 2007

Unit: Million ton-kilometers
Percentage of total in parentheses

Management of Chemicals
Chemical Risk Management
In 1998, Hitachi introduced an on-line system in Japan for the Group-wide management ofchemical substances, CEGNET (Chemical Environment Global Network), and began chemical risk
management. When introducing a new chemical, information is collected on hazardous properties
and applicable laws. The Special Committee for Chemical Substances then decides whether to
use this substance. For proper management of any controlled hazardous chemicals, handling is

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closely coordinated with all departments at every facility responsible for design, manufacturing, orpurchasing.
Chemical Risk Management
CEGNET System
Info. on laws & regulations Recording of total quantities
Info. on voluntary control
released and transferred

Risk information Release data

Preliminary inspection for
new chemical substances

Handlingof chemicals

PRTR
reporting

Feedback

Reduction of releases

Prevention of leakage

Reducing VOC Emissions
Building on a program initiated by the Ministry of the Environment to reduce emissions of volatileorganic compounds (VOCs) by 2010, we have adopted our own emissions reduction plan targeting
41 VOCs. We are currently working toward the goal of reducing emissions at Japanese facilities
by 45 percent (from fiscal 2000). In fiscal 2007, our domestic VOC emissions totaled 5.3 kt, 49
percent below the 2000 level.
At our overseas facilities, where increased production is expected to lead to higher levels of
VOC being used, we are working toward the goal of a 10-percent reduction in the ratio of VOCemissions to the quantity used (from fiscal 2005). In fiscal 2007, total emissions from our overseas
facilities was 774 t, representing a 4-point reduction in the percent emitted, compared with thebaseline year of 2005.
Trend in VOC Emissions (Japan)				

Trend in VOC Emissions (outside Japan)
EuropeNorth and South America
Asia (excluding China)
China
Trend in reduction of emissions ratio(Target values are in parentheses)

VOC emissions
VOC reduction rate trend( targets are in brackets )( kt/year )

15

10

100

(%)

(t/year)

100

1,000
800

10.3
56
5.7

5

51

(55)

100

694

97.4

96

752

774

(%)

(90)

100

600

50

5.3

50
400
200

0

2000

2006

2007

2010 (FY)(target)

0

0

2005

2006

2007

2010 (FY)0(target)Survey of Chemicals Covered by PRTR Law
According to Japan’s Pollutant Release and Transfer Registers (PRTR) Law, introduced in April
2001, Hitachi must control all releases of PRTR substances into the atmosphere and public waters,
and all solid-waste transfers or liquid discharge into sewage systems.
Data is collected on all substances handled (10 kilograms or more per year), even when the

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amount is below the minimum for mandatory reporting. In fiscal 2007, Hitachi handled 121 of the
354 substance groups covered by PRTR for a total volume of approximately 223,000 tons, ofwhich 1 percent was released and 1 percent was transferred. In fiscal 2007, 116 facilities submitted
PRTR reports to local governments.
Survey Results for Substances Covered by Japan’s PRTR Law (Fiscal 2007)
Qty. released

Qty. transferred
Styrene
Methylene chloride
Ethyl benzene

1.0% 1.0%

11%
Qty. handled
223 kt
98.0%

Other

1%
2%

8%

Qty. released 41%
2.5 ktXylene37%
Used in products(incl. qty removed and treated)

Quantities handled, released, and transferred

TolueneBreakdown of releases

Percentage of PRTR Chemicals Handled by Industry Segment (Fiscal 2007)
Electronic Devices 1.5%
Information & Telecommunication Systems 0.1%

High Functional Materials & Components 96.4%

Power & Industrial Systems 1.2%
Digital Media & Consumer Products 0.8%

Emission and Transfer Volumes of PRTR Chemicals by Industry Segment (Fiscal 2007)
Electronic Devices 0.9%
Information & Telecommunication Systems 0.7%

High Functional Materials & Components 57.9%

Power & Industrial Systems 36.3%
Digital Media & Consumer Products 4.2%

Preventing Pollution of Soil and Groundwater
Hitachi is working to prevent leaks of chemical substances into the soil or groundwater by
converting underground piping, pits, and tanks to above the ground, making inspections easier.
To prevent leaks, underground tanks not yet converted are rigorously tested for corrosion andinspected using such techniques as ultrasonic testing. A full 90 percent of facilities that have usedchemicals confirmed that they have completed groundwater and soil decontamination, or that
there is no contamination. The remaining facilities are taking countermeasures and monitoring
groundwater.

Efficient Use of Resources
Reduction of Generated Waste
The Hitachi Group promotes monozukuri (manufacturing) that does not use unnecessary resourcesand generates little waste. As part of this effort, we are taking measures to meet the goal of cutting
total waste to 20 percent below the 2000 level by fiscal 2010. In connection with this, Hitachi hasclassified facilities into two groups, according to the characteristics of their operations. One groupaims to reduce the total amount of generated waste, while the other strives to cut waste per unitof production, with each group working to meet its particular reduction target. In fiscal 2006, thefirst group managed to cut total emissions by 22 percent; the second cut its total waste per unit ofHitachi Group Corporate Social Responsibility Report 2008 | Next Eco | Super Eco-Factories & Offices 106

production by 24 percent. Through these measures, total waste fell by 10 percent.
Note that from the viewpoint of resource recycling, materials such as scrap metal, which canbe a valuable resource, are counted as generated waste.
Reduction in Waste Generation
EuropeNorth and South America
China
Asia (excluding China)Japan
Trend in total waste
Trend in waste per unit of production
(%)
100
100
( kt/year )
1,000

78
855

784

76

(80)

768

80
60

500

40
20

0

2000

2006

2007

2010 ( FY )( target )0

Improvement of the Resource Recycling Rate
By exploring methods and applications for effectively using waste as a new resource (“reuse,”“recycle”), in addition to reducing waste generation (“reduce”), the number of Hitachi facilities that
achieved “zero emission”†2 at final waste disposal reached 136 sites (up 17 over the previous year).
In addition, the Group is also improving methods for reducing final waste disposal, shifting fromthermal recycling and materials recycling to reuse. Through this approach, Hitachi is hoping toincrease the resource recycling rate by 10 percent over the level of 2005 by fiscal 2010. To quantify
resource recycling, recycling rates are calculated by coefficients according to type of waste andwaste processing methods, based on the environmental impact from an LCA†3 perspective. Using
this method, we improved our resource recycling rate by 5 percent in fiscal 2007.
†2 Zero emission: The Hitachi Group defines “zero emission” as “reducing final disposal to no more than 1
percent of total generated waste and less than 5 tons per year.”†3 Lifecycle Assessment: A method for evaluating the environmental impact of a product throughout all stagesof its life—from manufacturing and use to disposal and recycling

Flowchart for the Treatment of Waste and Reusable Waste Products (Fiscal 2007)
Japan (unit: kt)

Final disposal
Directfinal disposal

5

RecycledWaste
generated
613

Directly recycled 272
Final disposal
4
after processing

Processed
Processed in-house

66

Processed directly under contract 271

Recycled
288
after processing

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Breakdown of Recycling Methods (Fiscal 2007)
Thermal recycling

6%

Reuse

19%

75%
Material recycling

Minimizing Final Waste Disposal
Employees of the Odawara Works of Hitachi Global Storage Technologies have been working hard
to reduce the final amount of waste at their plant. They succeeded in cutting the final disposal ratefrom 0.42 percent in fiscal 2003 to 0.063 percent in fiscal 2007. To accomplish this, an electric
furnace was installed that reaches 2,000°C and melts glass and ceramic waste (head wafers) that
had previously proved difficult to process for recycling. The ash is then used as paving material
and landfill.
Zero emissions sites
http://www.hitachi.com/environment/activities/more/zeroemission.html

Efficient Use of Water Resources
To cut water use at overseas facilities to 10 percent below the 2005 level by fiscal 2010, Hitachi
is striving to reduce industrial water consumption by recycling cooling water. In fiscal 2007, water
use at overseas facilities fell from 14,280 kt to 13,190 kt, for an 8 percent reduction from the 2005
level.
Trends in Water Use(million m3/year)100
80

EuropeNorth and South America
China
Asia (excluding China)
Japan

73.10

73.18

74.14

2005

2006

2007 (FY)

60
40
20
0

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Worldwide Environmental Partnerships
The starting point of all Hitachi Group activities is creating a sustainable society
together with our stakeholders—customers, local community members,
shareholders, investors, suppliers, and employees.
For this reason, we engage in dialogues with our stakeholders andwork hard to disclose various forms of information

Environmental Communication
The Hitachi Group actively communicates with stakeholders, using opinions expressed to improve
environmental activities and to deepen the understanding of what is being done.
Dialogue with Stakeholders
Hitachi Plasma Display Ltd., which produces panels for plasma TVs, invited people from the local
community to a production site for an informal exchange. The company outlined energy-saving
innovations introduced into the production process and the rigorous standards applied to water
management. Questions and comments from the invitees about environmental activities followed.
The local community admired the environmental concern and action, but requested that more
information be made available to the public. Factory tours, such as this one, and other events
have been featured on Hitachi’s Web site in a series entitled “From the Forefront of Eco-Friendly
Production” to promote public awareness about how we are reducing the environmental impact ofour factories, as well as the eco-friendly features built into Hitachi home appliances.

Explaining the energy management system at the factory (Hitachi Plasma Display Ltd.)International Contribution through Energy-Saving Technology
Hitachi Industrial Equipment Systems was pleased to receive 25 trainees from Thailand visiting
Japan under the Japan External Trade Organization (JETRO) overseas technical scholarshipprogram. The trainees were briefed on energy-saving measures used at plants, and were trained
to use the energy-saving inverters that Hitachi makes. Coming from the Thailand government,
universities, and companies, the trainees are using the knowledge gained to promote energy
saving throughout Thailand.

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Learning to use an energy-saving inverter(Narashino Works, Hitachi Industrial Equipment Systems Co., Ltd.)

Joint Research with European Universities
Hitachi Europe has launched a joint research project exploring carbon sequestration technologies
through strategic partnerships with Darmstadt University of Technology, the Research and Testing
Establishment for Materials and Structures at the University of Stuttgart, Aachen Universityof Technology, the University of Dortmund, and Ruhr University (all in Germany). The project isinvestigating such topics as microstructure simulations and the thermal decomposition of carbon.
Hitachi Europe hopes to develop energy-efficient carbon sequestration technology to contribute toenvironmental protection in Europe and around the world.
TopicsEnvironmental Collaboration
with the Chinese Government
Hitachi launched the China Energy Conservationand Environment Commercialization Promotion
P r o j e c t Te a m to s u p p o r t e n v i r o n m e n t a lprotection and energy conservation in China,
identified as priorities in the 11th Five-Year Plan.
In 2007, Hitachi co-hosted the Hitachi Energy
Conser vation and Environmental Protection
Technology Exchange Conference with China’s
National Development and Reform Commission.
This event contributes to conservation in China
by encouraging environment-related exchanges
and partnerships. In May 2007, under the theme“water,” Hitachi and Sichuan University agreed toshare water treatment technologies.
In January 2008, a presentation on Hitachi
environmental technology, with “eco-cities” as
the theme, was followed by a spirited exchangeof views with more than 300 participants from
160 Chinese government organizations andcompanies.
Photo: Hitachi Energy Conservation and Environmental Protection
Technology Exchange Conference

Participation in Exhibitions
The Hitachi Group participates in exhibitions in Japan and around the world to publicize the Group’s
environmental activities and the strong eco-friendliness of Hitachi technologies and products.

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110

In Japan, Hitachi took part in Eco-Products 2007, displaying 35 products and services
contributing to the realization of a sustainable society based on the theme “Realizing Next Eco:
Creating Eco-Cities.”
Hitachi’s leading-edge technology and techniques were commended at the fair, where Hitachi
exhibited a hybrid railcar, winner of the Environment Minister’s Prize at the Eco-Products Awards,
and the “Developing and Sustaining a Middle-Distance Modal Shift” concept, winner of the EcoProducts Awards Steering Committee Chairperson’s Award.
Outside of Japan, Hitachi showcased 15 products, including home appliances and industrial
machinery, at the International Eco-Products Exhibition in Hanoi, Vietnam. Hitachi demonstrated
innovative communication methods as well, such as having visitors write messages about the
global environment and Hitachi’s environmental activities on cards, which were then pinned on aboard to form an “eco tree.”Environmental message board or “eco tree” (International Eco-Products Exhibition)

External Environmental Commendations
Fiscal 2007 Honors
Award Program (Sponsor)
Eco-Products Awards (4th)(Eco-Products Award Promotion Council)

Energy Conservation Grand Awards (18th)(METI)LCA Japan Forum Awards (4th)(LCA Japan Forum)

Award

Product/Achievement

Recipient(s)Environment Minister’s Prize(Eco-Products division)Hybrid railcar

East Japan Railway Co.
Hitachi, Ltd.

Chairman’s Prize(Eco-Services division)Developing and Sustaining a MiddleDistance Modal Shift

Hitachi Transport System

Energy Conservation Center
Chairman’s Prize

Refrigerators Featuring a Mid-freezer Layout
and Vacuum Compartment(8 models, excluding R-X6000)

Hitachi Appliances

Moisturizing with Ion Mist (s series) room air
conditioners (4 models, excluding RASS40X2)

Hitachi Appliances

Application of “SI-LCA,” an LCA approachfor ICT systems, to product development in
the Hitachi Group

Hitachi, Ltd.

Chairman’s Prize

External environmental commendations
http://www.hitachi.com/environment/activities/more/commendation.html
Environmental reports published by Hitachi Group companies and production facilities
http://www.hitachi.com/environment/activities/more/rpt_open.html

Hitachi Group Corporate Social Responsibility Report 2008 | Next Eco | Worldwide Environmental Partnerships

111Company Profile
Corporate Name:
Incorporated: 		
Head Office: 		Representative:

Hitachi, Ltd.
February 1, 1920 (founded in 1910)
1–6–6 Marunouchi, Chiyoda-ku, Tokyo 100-8280, Japan
Kazuo Furukawa, President and Chief Executive Officer

Hitachi Group Profile
Hitachi, Ltd. and the Hitachi Group make up a corporate group consisting of 1,082 companies: 418
consolidated subsidiaries within Japan and 492 overseas, as well as 83 equity-method affiliates inJapan and 88 overseas. For business activities, there are seven business units, as indicated on
the next page, with total revenues of about 11.2 trillion yen. The Group employs about 390,000
employees.

EuropeNumber of companies: 106
Number of employees: 9,468
Revenues: 1,073,877 million yen

Asia
Number of companies: 271
Number of employees: 105,645
Revenues: 2,167,171 million yen

North America
Number of companies: 75
Number of employees: 16,242
Revenues: 1,023,713 million yen
Asia
Number of companies: 419
Number of employees: 251,702
Revenues: 6,484,496 million yen

Other
Number of companies: 40
Number of employees: 6,695
Revenues: 477,478 million yen

Economic Performance
As of March 31, 2008
Common Stock: 				Number of employees (unconsolidated basis):
Number of employees (consolidated basis):
Number of consolidated subsidiaries: 		
Number of equity-method affiliates: 		

282,033 million yen
40,223			
389,752910 (Japan: 418, outside Japan: 492)
171 (Japan: 83, outside Japan: 88)

Period: Fiscal year ending March 31, 2008 (consolidated basis)
Revenues: 		
11,226.7 billion yen (110% compared with the previous year)
Operating income:
345.5 billion yen (189% compared with the previous year)
Capital investment:
969.0 billion yen (92% compared with the previous year)
R&D expenditure:428.1 billion yen (104% compared with the previous year)
Overseas output as a percentage of consolidated net sales: 24%112

See Web site for economic performance reports
http://www.hitachi.com/IR-e/

Financial Results (consolidated basis)
Revenues and Operating Income
Revenues( billions of yen )12,00010,000Operating income( billions of yen )Revenues
Operating income

11,226.7
8,632.4

9,464.8

9,027.0

10,247.9

1,200
1,000

8,000

800

6,000

600

4,000
2,000
0

345.5

279.0

256.0

184.8

2003

2004

2005

182.5

2006

400
200

2007 ( FY )0

Revenues by Industry Segment in Fiscal 2007 (billions of yen)
Financial Services
445.4 (3%)

Logistics, Services & Others
1,271.4 (10%)

Information
Telecommunication
Systems
2,761.1 (22%)

High Functional Materials &Components
1,875.0 (15%)
Electronic Devices
1,293.5 (10%)
Digital Media &Consumer Products
1,504.6 (12%)

Power & Industrial Systems
3,568.1 (28%)
Total Sales by Industry: 12,719 billion yen
Consolidated Net Sales: 11,226 billion yen

113

Information & Telecommunication Systems

Data center(unification control center)

Hitachi Global Storage
Technologies’
500-gigabyte 2.5-inch
hard disk drive

Large disk array
subsystem

Systems integration, outsourcing services, software, hard disk drives, disk array subsystems, servers, mainframes, PCs, telecommunication equipment, ATMs
Hitachi Communication Technologies, Ltd., Hitachi-Omron Terminal Solutions, Corp., Hitachi Computer Products (America), Inc., Hitachi Computer Products (Europe) S.A.S,
Hitachi Global Storage Technologies Netherlands B.V., Hitachi Electronics Services Co., Ltd., Hitachi Information & Control Solutions, Ltd., Hitachi Information Systems, Ltd.,
Hitachi Software Engineering Co., Ltd., Hitachi Systems & Services, Ltd., Hitachi Data Systems Holding Corp.

Electronic Devices

Hitachi Displays’ 2.9-inch
wide and high definition (WVGA)IPS LCD for mobile phones

Hitachi High-Technologies’
Focused Ion &Electron Beam System

Hitahi Medical’s
fluoroscopic X-ray system

Liquid crystal displays (LCD), semiconductor manufacturing equipment, testing and measurement, medical electronics equipment, semiconductors
Hitachi Displays, Ltd., Hitachi High-Technologies Corporation, Hitachi Medical Corporation, Hitachi Display Devices (Suzhou) Co., Ltd.

Power & Industrial Systems

Ashford Train
Maintenance Centre

Hitachi Construction
Machinery’s
hydraulic excavator

Hitachi Vehicle Energy’s
lithium-ion battery

Nuclear power plants, thermal power plants, hydroelectric power plants, industrial machinery and plants, automotive products, construction machinery, elevators, escalators, railway vehicles
Babcock-Hitachi K.K., Clarion Co., Ltd., Hitachi Construction Machinery Co., Ltd., Hitachi-GE Nuclear Energy, Ltd., Hitachi Industrial Equipment Systems Co., Ltd., Hitachi Via Mechanics, Ltd.,
Hitachi Automotive Products (USA), Inc., Hitachi Elevator (China) Co., Ltd., Hitachi Building Systems Co., Ltd., Hitachi Engineering & Services Co., Ltd., Hitachi Mobile., Ltd.,
Hitachi Plant Technologies, Ltd., Hitachi Power Europe GmbH

Digital Media & Consumer Products

UT (Ultra Thin) LCD TVs

Hitachi Maxell’s
prismatic lithium-ion
rechargeable batteries
featuring thin typeand high capacity

Hitachi Appliances’
washer-dryer

Optical disk drives, Plasma TVs, LCD TVs, LCD projectors, mobile phones, room air conditioners, refrigerators, washing machines, information storage media, batteries, air-conditioning equipment
Fujitsu Hitachi Plasma Display Limited, Hitachi Appliances, Inc., Hitachi Maxell, Ltd., Hitachi Media Electronics Co., Ltd., Hitachi Home Electronics (America), Inc.,
Shanghai Hitachi Household Appliances Co., Ltd.

High Functional Materials & Components

Hitachi Chemical’s
molded plastic rearhatch door

Hitachi Metals’
amorphous alloys
for transformers

Hitachi Cable’s
probe cables for
medical applications

Wires & cables, copper products, semiconductor materials, circuit boards and materials, organic/inorganic chemical products, synthetic resin products, display related materials, specialty steels,
magnetic materials and components, high-grade casting components and materials
Hitachi Cable, Ltd., Hitachi Chemical Co., Ltd., Hitachi Metals, Ltd.

Logistics, Services & Others

Financial Services

Hitachi Transport System has opened a joint
distribution center for the medical industry,
Kansai Medical Distribution Center
General trading, logistics, property management
Chuo Shoji, Ltd., Hitachi Life, Ltd., Hitachi Transport System, Ltd., Nikkyo Create, Ltd.,
Hitachi America, Ltd., Hitachi Asia Ltd., Hitachi (China) Ltd., Hitachi Europe Ltd.

Multifunctional IC card andelectronic toll collection auto card
Leasing, loan guarantees, insurance services
Hitachi Capital Corporation, Hitachi Insurance Services, Ltd.

Major Products & Services Major Consolidated Subsidiaries (As of March 31, 2008)*1 Hitachi-GE Nuclear Energy, Ltd. acquired the nuclear power-related business of the company through a corporate split on July 1, 2007.
*2 Guangzhou Hitachi Elevator Co., Ltd. changed its name to Hitachi Elevator (China) Co., Ltd. on June 29, 2007.
*3 Fujitsu Hitachi Plasma Display Limited changed its name to Hitachi Plasma Display Limited on April 1, 2008.

114

Comparative Table with GRI Guidelines
In formulating the Hitachi Group Corporate Social Responsibility Report 2008, we referred to the
GRI Sustainability Reporting Guidelines 2006 (Global Reporting Initiative).
The following is a comparative table with the GRI Guidelines.

Item

Index

Items Disclosed

Related Pages in This
Report and Other
References

1. Strategy and Analysis
1.1Statement from the most senior decision maker of the organization(e.g., CEO, chair, or equivalent senior position) about the relevance ofsustainability to the organization and its strategy

Message from the President

pp. 2–3

1.2

Description of key impacts, risks, and opportunities

Hitachi’s CSR Vision
CSR Promotion Activities > Results of CSR
Activities in Fiscal 2007 and Goals/Plans
for Fiscal 2008

pp. 4–6
pp. 21–22

2. Organizational Profile
2.1

Name of the organization

Company Profile

pp. 112–114

2.2

Primary brands, products, and/or services

Company Profile

pp. 112–114

2.3

Operational structure of the organization,
including main divisions, operating companies, subsidiaries, and joint
ventures

Financial Section

Annual Report 2008

2.4

Location of organization’s headquarters

Company Profile

pp. 112–114

2.5

Number of countries where the organization operates, and names ofcountries with either major operations or that are specifically relevant tothe sustainability issues covered in the reportCompany Profile

pp. 112–114

2.6

Nature of ownership and legal form

Financial Section

Annual Report 2008

2.7

Markets served (including geographic breakdown, sectors served, andtypes of customers/beneficiaries)

Financial Section

Annual Report 2008

2.8

Scale of the reporting organization, including:

2.9

2.10

- Number of employees

Company Profile

pp. 112–114- Net sales (for private sector organizations) or net revenues (for public
sector organizations)

Financial Section

Annual Report 2008

- Total capitalization broken down in terms of debt and equity (for private
sector organizations)

Financial Section

Annual Report 2008

- Quantity of products or services provided

Financial Section

Annual Report 2008

- The location of, or changes in operations, including facility openings,
closings, and expansions

Financial Section

Annual Report 2008

- Changes in the share capital structure and other capital formation,
maintenance, and alteration operations (for private sector organizations)

Financial Section

Annual Report 2008

Awards received in the reporting period

Hitachi Earns Excellent Corporate Citizen in
China and the Most Responsible Company
AwardsHitachi Appliances Wins METI FirstPlace Award for Companies That HaveContributed to Product Safety
Maxell Hokuriku Seiki Earns the Prime
Minister’s Commendations on Contributors
to Public Safety
External Environmental Commendations

p. 23

Significant changes during the reporting period regarding size, structure,or ownership including:

p. 37
			
			
p. 72
p. 111

3. Report Parameters
3.1

Reporting period (e.g., fiscal/calendar year) for information provided

Scope of This Report

p. 1

3.2

Date of most recent previous report (if any)

To Our Stakeholders

p. 1

3.3

Reporting cycle (annual, biennial, etc.)

To Our Stakeholders

p. 1

3.4

Contact point for questions regarding the report or its contents

Inquiries

p. 129

Report Scope and Boundary

115

3.5

Process for defining report content, including:- Determining materiality

Hitachi’s CSR Vision

pp. 4–6- Prioritizing topics within the report

Hitachi’s CSR Vision

pp. 4–6- Identifying stakeholders the organization expects to use the report

To Our Stakeholders

p. 1

3.6

Boundary of the report (e.g., countries, divisions, subsidiaries, leased
facilities, joint ventures, suppliers) See GRI Boundary Protocol for further
guidance

Scope of This Report

p. 1

3.7

State any specific limitations on the scope or boundary of the report

Scope of This Report

p. 1

3.8

Basis for reporting on joint ventures, subsidiaries, leased facilities,
outsourced operations, and other entities that can significantly affectcomparability from period to period and/or between organizations

Company Profile

pp. 112–114

3.9

Data measurement techniques and the bases of calculations, including
assumptions and techniques underlying estimations applied to thecompilation of the Indicators and other information in the report

Bases of calculations are described if
necessary

3.10

Explanation of the effect of any re-statements of information provided
in earlier reports, and the reasons for such re-statement (e.g., mergers/
acquisitions, change of base years/periods, nature of business,measurement methods)

Explanation is given if necessary tocomplement data descriptions

3.11

Significant changes from previous reporting periods in the scope,boundary, or measurement methods applied in the report

None

—

3.12

Table identifying the location of the Standard Disclosures in the reportComparative Table with GRI Guidelines

pp. 115–122

Hitachi’s CSR Vision > Hitachi’s Response
to a Third-Party Expert Opinion on Our
CSR Activities

pp. 5–6

Assurance
3.13

Policy and current practice with regard to seeking external assurance
for the report. If not included in the assurance report accompanying
the sustainability report, explain the scope and basis of any external
assurance provided. Also explain the relationship between the reportingorganization and the assurance provider(s)4. Governance, Commitments, and Engagement
Governance
4.1

Governance structure of the organization, including committees under thehighest governance body responsible for specific tasks, such as setting
strategy or organizational oversight

Corporate Governance > Strengthening
Governance

pp. 17–18

4.2

Indicate whether the Chair of the highest governance body is also an
executive officer (and, if so, their function within the organization’s
management and the reasons for this arrangement)

Corporate Governance > Strengthening
Governance

pp. 17–18

4.3

For organizations that have a unitary board structure, state the numberof members of the highest governance body that are independent and/or
non-executive members

Corporate Governance > Strengthening
Governance

pp. 17–18

4.4

Mechanisms for shareholders and employees to provide recommendations
or direction to the highest governance bodyCompliance and Risk Management >Compliance Framework
Communication with Shareholders andInvestors

p. 24
pp. 45–48

4.5

Linkage between compensation for members of the highest governancebody, senior managers, and executives (including departurearrangements), and the organization’s performance (including social andenvironmental performance)

Corporate Governance > Strengthening
Governance

pp. 17–18

4.6

Processes in place for the highest governance body to ensure conflicts ofinterest are avoided

Corporate Governance > Strengthening
Governance

pp. 17–18

4.7

Process for determining the qualifications and expertise of the membersof the highest governance body for guiding the organization’s strategy on
economic, environmental, and social topics

None

—

4.8

Internally developed statements of mission or values, codes of conduct,
and principles relevant to economic, environmental, and social
performance and the status of their implementation

Hitachi’s CSR Vision
Compliance and Risk Management> Raising Compliance Awareness >The Corporate Ethics and ComplianceHandbook (excerpt)

pp. 4–6
pp. 24–25

116

4.9

4.10

Procedures of the highest governance body for overseeing theorganization’s identification and management of economic, environmental,
and social performance, including relevant risks and opportunities, andadherence or compliance with internationally agreed standards, codes ofconduct, and principles

Processes for evaluating the highest governance body’s own performance,
particularly with respect to economic, environmental, and social
performance

Corporate Governance > Strengthening
Governance; Internal Control
CSR Promotion Activities > Toward
Realization of the Three-Year Roadmap
Compliance and Risk Management >Raising Compliance AwarenessRespect for Human Rights > Human Rights
PolicyEco-Mind & Global Environmental
Management > Environmental
Management System

pp. 18–19

None—

pp. 20–22
pp. 24–25
p. 30
p. 80

Commitments to External Initiatives
4.11

Explanation of whether and how the precautionary approach or principle isaddressed by the organization

Compliance and Risk Management > Risk
Management

p. 28

4.12

Externally developed economic, environmental, and social charters,
principles, or other initiatives to which the organization subscribes orendorses

Environmental Activities > Hitachi GroupTeam Minus 6% Campaign (Japanese only)
Environmental Activities > Hitachi
Carries Out a Campaign to Support
Green Electricity through 10,000-Person
Commitment (Japanese only)

Hitachi, Ltd. Web site
(Japanese site)
Hitachi, Ltd. Web site
(Japanese site)

4.13

Memberships in associations (such as industry associations) and/or
national/international advocacy organizations in which the organization:- Has positions in governance bodies

None

—

- Participates in projects or committees

None

—

- Provides substantive funding beyond routine membership dues

None

—

- Views membership as strategic

None

—

Stakeholder Engagement
4.14

List of stakeholder groups engaged by the organization

None

—

4.15

Basis for identification and selection of stakeholders with whom to engage

None

—

4.16

Approaches to stakeholder engagement, including frequency ofengagement by type and by stakeholder group

Hitachi’s Environmental Strategy
Respect for Human Rights > Human Rights
at the Core of CSR
Working in Harmony with Local
Communities > Supporting NPO Activities
with Information Technology
Collaborative Creation with Suppliers >Employees’ Environmental AwarenessImproved by KES Acquisition

pp. 7–9
p. 31

None

—

4.17

Key topics and concerns that have been raised through stakeholder
engagement, and how the organization has responded to those key topics
and concerns, including through its reporting

p. 59
			
		
p. 63

Management Approach and Performance Indicators
Item

Performance Index: Core (C) / Add (A)Economic
Economic Performance Indicators
C
EC1

Direct economic value generated and distributed, including revenues,
operating costs, employee compensation, donations and other community
investments, retained earnings, and payments to capital providers andgovernments

Company Profile
Working in Harmony with Local
Communities > Awareness of Social
Issues; Breakdown of Funding for Social
Contribution Activities

pp. 112–114
p. 49

C
EC2

Financial implications and other risks and opportunities for theorganization’s activities due to climate change

Hitachi Embraces the Challenge of
Reducing CO2 Emissions

pp. 10–15

C
EC3Coverage of the organization’s defined benefit plan obligations

None

—

C
EC4

Significant financial assistance received from government

None

—

None

—

Market presenceA
EC5

Range of ratios of standard entry level wage compared to local minimum
wage at significant locations of operation

117

C
EC6

Policy, practices, and proportion of spending on locally-based suppliers at
significant locations of operation

Collaborative Creation with Suppliers >Guidelines for Procurement Activities;
Green Procurement Guidelines

pp. 61–62

C
EC7

Procedures for local hiring and proportion of senior management hiredfrom the local community at locations of significant operation

None

—

Indirect economic impacts
C
EC8Development and impact of infrastructure investments and services
provided primarily for public benefit through commercial, in-kind, or pro
bono engagement

Working in Harmony with Local
Communities

pp. 49–60

AEC9Understanding and describing significant indirect economic impacts,
including the extent of impacts

Eco-Mind & Global Environmental
Management > Environmental Accounting

pp. 85–87

Hitachi’s Environmental Strategy >From Environmental Vision 2015 toEnvironmental Vision 2025
Eco-Mind & Global Environmental
Management > Hitachi Action Guidelines
for Environmental Conservation;
Environmental Vision 2015

p. 7

Message from the President
Hitachi’s Environmental Strategy
Next Eco: Message from Executive in
ChargeExecutive Officer

pp. 2–3
pp. 7–9
p. 75

Environmental
Management Approach
Brief, organization-wide policy (or policies) that defines the organization’s
overall commitment

The most senior position with operational responsibility

p. 77

Annual Report 2008

Materials
C
EN1

Materials used by weight or volume

Eco-Mind & Global Environmental
Management > Environmental Impact Data
for Corporate Activities

p. 89

C
EN2

Percentage of materials used that are recycled input materials

None

—

C
EN3

Direct energy consumption by primary energy source

Eco-Mind & Global Environmental
Management > Environmental Impact Data
for Corporate Activities

p. 89

C
EN4

Indirect energy consumption by primary source

Eco-Mind & Global Environmental
Management > Environmental Impact Data
for Corporate Activities

p. 89

A
EN5

Energy saved due to conservation and efficiency improvements

Eco-Mind & Global Environmental
Management > Environmental Impact Data
for Corporate Activities

p. 89

A
EN6

Initiatives to provide energy-efficient or renewable energy based products
and services, and reductions in energy requirements as a result of these
initiatives

Eco-Mind & Global Environmental
Management > Environmental Accounting
Next-Generation Products & Services> Expanding Lineup of Eco-Products;
Boosting Environmental Efficiency
Super Eco-Factories & Offices > Using
Alternative Energy Sources

pp. 85–87						
pp. 90–98
			Initiatives to reduce indirect energy consumption and reductions achieved

Super Eco-Factories & Offices > Super
Eco-Factories and Offices; CO2 Reductionin Production Processes

pp. 99–102

CEN8

Total water withdrawal by source

Eco-Mind & Global Environmental
Management > Environmental Impact Data
for Corporate Activities

p. 89

A
EN9

Water sources significantly affected by withdrawal of water

None

—

A
EN10

Percentage and total volume of water recycled and reused

Eco-Mind & Global Environmental
Management > Environmental Impact Data
for Corporate Activities

p. 89

None

—

EnergyA
EN7

pp. 101–102

Water

Biodiversity
C
EN11

Location and size of land owned, leased, managed in, or adjacent to,protected areas and areas of high biodiversity value outside protected
areas

118

C
EN12

Description of significant impacts of activities, products, and services on
biodiversity in protected areas and areas of high biodiversity value outside
protected areas

Working in Harmony with Local
Communities > Environmental Initiatives >Promoting Afforestation around the Globe

pp. 53–54

A
EN13

Habitats protected or restored

None

—

A
EN14

Strategies, current actions, and future plans for managing impacts on
biodiversity

None

—

A
EN15

Number of IUCN Red List species and national conservation list species
with habitats in areas affected by operations, by level of extinction risk

None

—

Emissions, Effluents, and Waste
C
EN16

Total direct and indirect greenhouse gas emissions by weight

Super Eco-Factories & Offices > CO2
Reduction in Production Processes; Trends
in CO2 Emissions in Japan; Trends in CO2Emissions outside Japan

pp. 100–101

C
EN17

Other relevant indirect greenhouse gas emissions by weight

Super Eco-Factories & Offices > CO2
Reduction in Production Processes;
Greenhouse Gas Emissions andBreakdown

pp. 100–101

C
EN18

Initiatives to reduce greenhouse gas emissions and reductions achieved

Super Eco-Factories & Offices > CO2
Reduction in Production Processes; CO2
Reduction in Offices and Other Buildings;
Increasing Transportation Efficiency

pp. 100–104

C
EN19

Emissions of ozone-depleting substances by weight

Eco-Mind & Global Environmental
Management > Environmental Impact Data
for Corporate Activities

p. 89

C
EN20

NOx, SOx, and other significant air emissions by type and weight

Eco-Mind & Global Environmental
Management > Environmental Impact Data
for Corporate Activities

p. 89

C
EN21

Total water discharge by quality and destination

Eco-Mind & Global Environmental
Management > Environmental Impact Data
for Corporate Activities

p. 89

C
EN22

Total weight of waste by type and disposal method

Super Eco-Factories & Offices > Efficient
Use of Resources > Flowchart for theTreatment of Waste and Reusable Waste
Products; Breakdown of Recycling
Methods

pp. 107–108

C
EN23

Total number and volume of significant spills

Super Eco-Factories & Offices >Management of Chemicals > Preventing
Pollution of Soil and Groundwaterp. 106A
EN24

Weight of transported, imported, exported, or treated waste deemedhazardous under the terms of the Basel Convention Annex I, II, III, and VIII,
and percentage of transported waste shipped internationally

None

—

A
EN25

Identity, size, protected status, and biodiversity value of water bodies
and related habitats significantly affected by the reporting organization’sdischarges of water and runoff

None

—

Products and Services
A
EN26

Initiatives to mitigate environmental impacts of products and services, andextent of impact mitigation

Next-Generation Products & Services >Expanding Lineup of Eco-Products

pp. 90–95

A
EN27

Percentage of products sold and their packaging materials that arereclaimed by category

Hitachi Appliances’ Environmental Efforts> Recycling

Hitachi Appliances, Inc.
Web site

Eco-Mind & Global Environmental
Management > Legal Compliancep. 88

Significant environmental impacts of transporting products and othergoods and materials used for the organization’s operations, andtransporting members of the workforce

Super Eco-Factories & Offices >Increasing Transportation Efficiency >Domestic Freight by Modep. 104

Total environmental protection expenditures and investments by type

Eco-Mind & Global Environmental
Management > Environmental Accounting

pp. 85–87

ComplianceC
EN28

Monetary value of significant fines and total number of non-monetary
sanctions for non- compliance with environmental laws and regulations

Transport
A
EN29
OverallA
EN30

Labor Practices and Decent WorkManagement Approach

119

Brief, organization-wide policy (or policies) that defines the organization’s
overall commitment

The most senior position with operational responsibility

Message from the President
Compliance and Risk Management >Compliance Education > The Corporate
Ethics and Compliance Handbook (excerpt)
Employees: The Key to Hitachi’s Future >Creating a Work-Friendly Corporate Culture

pp. 2–3
pp. 24–25

Executive Officer

Annual Report 2008

p. 65

Employment
C
LA1

Total workforce by employment type, employment contract, and region

Company Profile

pp. 112–114

CLA2

Total number and rate of employee turnover by age group, gender, andregion

None

—

A
LA3

Benefits provided to full-time employees that are not provided to temporary
or part-time employees, by major operations

None

—

Labor/Management Relations
C
LA4

Percentage of employees covered by collective bargaining agreements

None

—

C
LA5

Minimum notice period(s) regarding operational changes, including
whether it is specified in collective agreements

None

—

Occupational Health and Safety
A
LA6

Percentage of total workforce represented in formal joint managementworker health and safety committees that help monitor and advise on
occupational health and safety programs

None

—

C
LA7

Rates of injury, occupational diseases, lost days, and absenteeism, andnumber of work-related fatalities by region

Employees: The Key to Hitachi’s Future> Securing the Health and Safety of
Employees > Trends in the Occupational
Accident Rate

pp. 71

C
LA8

Education, training, counseling, prevention, and risk-control programs inplace to assist workforce members, their families, or community members
regarding serious diseases

Employees: The Key to Hitachi’s Future> Securing the Health and Safety of
Employees > Promoting Mental Health

p. 73

C
LA9

Health and safety topics covered in formal agreements with trade unions

None

—

Training and Education
C
LA10

Average hours of training per year per employee by employee category

None

—

A
LA11

Programs for skills management and lifelong learning that support thecontinued employability of employees and assist them in managing career
endings

Employees: The Key to Hitachi’s Future >Challenge Supports Growth > Supporting
Career Development

p. 66

A
LA12

Percentage of employees receiving regular performance and careerdevelopment reviews

Employees: The Key to Hitachi’s Future> Openness: Promotes the Expression of
Employees’ Full Potential

p. 65

Diversity and Equal Opportunities
C
LA13

Composition of governance bodies and breakdown of employees per
category according to gender, age group, minority group membership, andother indicators of diversity

Employees: The Key to Hitachi’s Future> Diversity: A Base for the Healthy
Expression of Individuality

pp. 67–70

C
LA14

Ratio of basic salary of men to women by employee category

None

—

Compliance and Risk Management >Compliance Education > The Corporate
Ethics and Compliance Handbook (excerpt)
Respect for Human Rights > A Total
Commitment to Human Rights Awarenesspp. 24–25

Executive Officer

Annual Report 2008

Human Rights
Management Approach
Brief, organization-wide policy (or policies) that defines the organization’s
overall commitment

The most senior position with operational responsibility

pp. 30–31

Investment and Procurement Practices
C
HR1

Percentage and total number of significant investment agreements that
include human rights clauses or that have undergone human rights
screening

None

—

C
HR2

Percentage of significant suppliers and contractors that have undergone
screening on human rights and actions taken

Collaborative Creation with Suppliers

pp. 61–64

120

A
HR3

Total hours of employee training on policies and procedures concerning
aspects of human rights that are relevant to operations, including thepercentage of employees trained

Respect for Human Rights > A Total
Commitment to Human Rights Awarenesspp. 30–31

None

—

None

—

Compliance and Risk Management >Compliance Education > The Corporate
Ethics and Compliance Handbook (excerpt)

pp. 24–25

Compliance and Risk Management >Compliance Education > The Corporate
Ethics and Compliance Handbook (excerpt)

pp. 24–25

None

—

None

—

Non-Discrimination
C
HR4

Total number of incidents of discrimination and actions taken

Freedom of Association and Collective BargainingC
HR5Operations identified in which the right to exercise freedom of associationand collective bargaining may be at significant risk, and actions taken to
support these rights

Child LaborC
HR6Operations identified as having significant risk for incidents of child labor,
and measures taken to contribute to the elimination of child labor

Forced and Compulsory LaborC
HR7Operations identified as having significant risk for incidents of forced orcompulsory labor, and measures to contribute to the elimination of forced
or compulsory labor

Security Practices
A
HR8

Percentage of security personnel trained in the organization’s policies
or procedures concerning aspects of human rights that are relevant tooperations

Indigenous Rights
A
HR9

Total number of incidents of violations involving rights of indigenous people
and actions taken

Society
Management ApproachC
SO

Brief, organization-wide policy (or policies) that define the organization’s
overall commitment

Compliance and Risk Management
Working in Harmony with Local
Communities > Social Contribution
Philosophy and Policy

p. 24
p. 49

C
SO

The most senior position with operational responsibility

CSR Management: Message from
Executive in Charge
Next Society: Message from Executive in
ChargeExecutive Officer

p. 16

Super Eco-Factories & Offices >Management of Chemicals > Preventing
Pollution of Soil and Groundwaterp. 106

p. 32
Annual Report 2008

Community
C
SO1

Nature, scope, and effectiveness of any programs and practices thatassess and manage the impacts of operations on communities, including
entering, operating, and exiting

Corruption
C
SO2

Percentage and total number of business units analyzed for risks related
to corruption

Compliance and Risk Management >Compliance Education

pp. 24–25

C
SO3

Percentage of employees trained in organization’s anti-corruption policies
and proceduresCompliance and Risk Management> Compliance Education > Raising
Compliance Awarenesspp. 24–25

C
SO4Actions taken in response to incidents of corruption

Compliance and Risk Management >Compliance Education > Antimonopoly
Compliance Education

p. 25

Public Policy
C
SO5

Public policy positions and participation in public policy development andlobbying

Environmental Activities > Hitachi GroupTeam Minus 6% Campaign (Japanese only)

Hitachi, Ltd. Web site
(Japanese site)A
SO6

Total value of financial and in-kind contributions to political parties,
politicians, and related institutions by country

None

—

Compliance and Risk Management >Compliance Education > Antimonopoly
Compliance Education

p. 25

Anti-Competitive Behavior
C
SO7

Total number of legal actions for anti-competitive behavior, anti-trust, andmonopoly practices and their outcomes

Compliance

121

C
SO8

Monetary value of significant fines and total number of non-monetary
sanctions for non-compliance with laws and regulations

Compliance and Risk Management >Compliance Education > Antimonopoly
Compliance Education

p. 25

Product Responsibility
Management ApproachC
PR

Brief, organization-wide policy (or policies) that defines the organization’s
overall commitment

Monozukuri and Services from theCustomer’s Perspective > Quality
Assurance (QA) Activities

pp. 35–39

CPR

The most senior position with operational responsibility

Next Society: Message from Executive in
ChargeExecutive Officer

p. 32
Annual Report 2008

Customer Health and Safety
C
PR1

Life cycle stages in which health and safety impacts of products andservices are assessed for improvement, and percentage of significant
products and services categories subject to such procedures

Monozukuri and Services from theCustomer’s Perspective > Quality
Assurance (QA) Activities > Hitachi-Quality
Monozukuri through Improved Work
Processes

pp.38–39

A
PR2

Total number of incidents of non-compliance with regulations andvoluntary codes concerning health and safety impacts of products andservices during their life cycle, by type of outcomes

Monozukuri and Services from theCustomer’s Perspective > Quality
Assurance (QA) Activities > Response inCase of Product Malfunction or Damage

p. 39

Product and Service LabelingC
PR3

Type of product and service information required by procedures,and percentage of significant products and services subject to suchinformation requirements

Next-Generation Products & Services >Expanding Lineup of Eco-Products

pp. 90–91

A
PR4

Total number of incidents of non-compliance with regulations andvoluntary codes concerning product and service information and labeling,by type of outcomes

None

—

A
PR5

Practices related to customer satisfaction, including results of surveys
measuring customer satisfaction

Monozukuri and Services from theCustomer’s Perspective > Building
Customer Feedback into Our Products

pp. 40–42

Marketing Communications
C
PR6

Programs for adherence to laws, standards, and voluntary codes related
to marketing communications, including advertising, promotion, andsponsorship

Compliance and Risk Management >Compliance Education > The Corporate
Ethics and Compliance Handbook (excerpt)

p. 24–25

A
PR7

Total number of incidents of non-compliance with regulations andvoluntary codes concerning marketing communications, including
advertising, promotion, and sponsorship by type of outcomes

None

—

None

—

None

—

Customer Privacy
A
PR8

Total number of substantiated complaints regarding breaches of customer
privacy and losses of customer data

ComplianceC
PR9

Monetary value of significant fines for non-compliance with laws andregulations concerning the provision and use of products and services

Hitachi, Ltd. annual report
http://www.hitachi.com/IR-e/library/annual/index.html
Hitachi, Ltd. environmental activities
http://www.hitachi.com/environment/
Hitachi Appliances, Inc. environmental activities
http://www.hitachi-ap.com/env_report_e.pdf

122Indexes by Category
To facilitate searching for information on CSR activities, indexes are provided according to thefollowing sections: Policy, Vision, and Guidelines; Organization and Management; Systems;
Educational and Awareness-Raising Activities; Result Data; and Stakeholder Feedback.
Policy, Vision, and Guidelines
Category

Title

Items Disclosed

Related Pages in This
ReportFundamental Credop. 4

Hitachi Group Vision

p. 4

CSR Policy of the Hitachi Group

pp. 4–5

Hitachi’s Environmental Strategy

Environmental Vision 2025

p. 7

CSR
Management

Compliance and Risk Management

The Corporate Ethics and Compliance Handbook(Excerpt) (PDF file: 77KB)

p. 25

Respect for Human Rights

Provisions Declaring Respect for Human Rights

p. 30

Basic Approach to Information Security Governancep. 26

Hitachi’s CSR Vision

SocialPerformance

Environmental
Performance

Personal Information Protection Policy

p. 27

Three Rules for Preventing Leakage of Confidential
Information

p. 27

Guidelines for Developing Business Continuity Plans

p. 28

Basic Policy on Protection of Intellectual Property

p. 29

Monozukuri and Services from the Customer’s
Perspective

Customer Satisfaction Management Guidelines

p. 40

Communication with Shareholders and Investors

Disclosure Policy

pp. 45–46

Basic Policy for Prevention of Takeovers

pp. 47–48

Working in Harmony with Local Communities

Social Contribution Philosophy and Policyp. 49

Collaborative Creation with Suppliers

Guidelines for Procurement Activities

pp. 61–62

Green Procurement Guidelines Ver. 5.0(in English) (PDF file: 469KB)

p. 62

Employees: The Key to Hitachi’s Future

Basic Attitudes Concerning HIV/AIDS

p. 73

Hitachi Group’s Environmental Activities

Hitachi Action Guidelines for Environmental
Conservation

p. 77

Environmental Vision 2015

p. 77

123

Organization and Management
Category
CSR
Management

SocialPerformance

Environmental
Performance

Title
Corporate GovernanceItems Disclosed

Related Pages in This
ReportGovernance Structure of Hitachi, Ltd.

p. 17

Hitachi Internal Control Assessment Framework

p. 19Group Management

p. 19

CSR Promotion Activities

Structure of Hitachi Group CSR Promotion

p. 20

Compliance and Risk Management

Risk Management Framework

p. 29

Monozukuri and Services from the Customer’s
Perspective

Committees of the Supervisory Office for
Monozukuri and Their Activities

p. 34

Quality Assurance Flow Chart

p. 36

Improving Product Safety

p. 37

OCHIBO HIROI

p. 36

Outline of Compliance Diagnostic Systemp. 38

Hitachi Evaluation System for Quality Managementp. 39

Response Flow in the Event of Product Malfunction

p. 39

Emission Neutral

pp. 77–78

Hitachi Group’s Environmental Activities

Eco-Mind & Global Environmental Management

Super Eco-Factories & Offices

Environmental Impact Assessment System

pp. 77–78

Environmental Management System

p. 80

GREEN 21 Evaluation System Activities

p. 81

Chemical Risk Management

pp. 104–105

124

Systems
Category

Title

Items Disclosed

Related Pages in This
ReportCSRManagement

Compliance and Risk Management

Expanding the Whistleblower Systemp. 24SocialPerformance

Working in Harmony with Local Communities“The Growing Tree” Volunteer Support Program

p. 60

Collaborative Creation with Suppliers

Hitachi Environmental Certification Scheme

p. 63

Employees: The Key to Hitachi’s Future

Personnel Systems

p. 65

Survey of All Employees

p. 65

360-Degree Feedback Program

p. 65

Supporting Career Development

p. 66

Reward System for Employee Inventions

pp. 66–67

Environmental
Performance

Eco-Mind & Global Environmental

Life Plan Selection Framework

p. 69

Cafeteria Plan System

p. 73

Defined Contribution and Defined Benefit Pension
Plans

pp. 73–74

GREEN 21 Awards

p. 82

Environmental Accounting

pp. 85–87

Next-Generation Products & Services

Super Eco-Products

pp. 90–95

Super Eco-Factories & Offices

Super Eco-Factories

p. 99

125

Educational and Awareness-Raising Activities
Category
CSR
Management

SocialPerformance

Environmental
Performance

Title

Items Disclosed

Related Pages in This
ReportCSR Promotion Activities

Full Implementation of the CSR Policy

pp. 22–23

Compliance and Risk Management

Compliance Education

pp. 24–25

A Total Commitment to Human Rights Awarenessp. 30

Monozukuri and Services from the Customer’s
Perspective

Employee Training to Improve Quality and Reliability

pp. 36–37

Working in Harmony with Local Communities

Support for Volunteer Activities

p. 60

Collaborative Creation with Suppliers

The MMM Club

pp. 62–63

Employees: The Key to Hitachi’s Future

Employee Capacity Buildingp. 66

Global Manager Training

p. 66

Eco-Mind & Global Environmental Management

Diversity Training in Europe

p. 71

Environmental Education and Training System

p. 85

126

Result Data
Category

Title

Items Disclosed

Related Pages in This
ReportCSRManagement

Corporate Governance

Summary Compensation Table

p. 18

CSR Promotion Activities

Results of CSR Activities in Fiscal 2007 and Goals/
Plans for Fiscal 2008

pp. 21–22

SocialPerformance

Monozukuri and Services from the Customer’s
Perspective

International Skills Festival for All, Japan 2007:
Hitachi Group Results by Occupation

p. 35

Communication with Shareholders and Investors

Trends in Shareholder Composition

p. 47

Results of External SRI Assessments in Fiscal 2007

p. 48

Working in Harmony with Local Communities

Breakdown of Funding for Social Contribution
Activities

p. 49

Employees: The Key to Hitachi’s Future

Male/Female Employee Ratio

p. 67

Number of New Graduate Recruits in Fiscal 2007

p. 67

Trend in the Number of Female Managers

p. 68

Trend in the Number of Employees Using Child Care
Leave

p. 68

Trend in the Number of Employees Using Nursing
Care Leave

p. 68

Trend in the Number of Employees Working Shorter
Hours

p. 68

Trend in the Employment Ratio for Physically
Challenged People

p. 70

Trends in the Occupational Accident Ratep. 71

Environmental Action Plan and Achievements

p. 79

Status of ISO 14001 Certification

p. 81

Green Point Average: Results and Targets

p. 81

Environmental Accounting

pp. 85–87

Environmental
Performance

Eco-Mind & Global Environmental

Legal Compliance

p.88

Environmental Impact Data for Corporate Activities

p. 89

Next-Generation Products & Services

Eco-Products Certification Trends

p. 91

Super Eco-Factories & Offices

Trends in CO 2 Emissions in Japan

p. 100Trends in CO 2 Emissions outside Japan

p. 101

Greenhouse Gas Emissions and Breakdown

p. 101

Volume of New Energies (Fiscal 2007)

p. 102

Domestic Freight by Modep. 104

Trend in VOC Emissions (Japan)

p. 105

Trend in VOC Emissions (outside Japan)

p. 105

Survey Results for Substances Covered by Japan’s
PRTR Law (Fiscal 2007)

p. 106Percentage of PRTR Chemicals Handled, by Industry
Segment (Fiscal 2007)

p. 106

Emission and Transfer Volumes of PRTR Chemicals
by Industry Segment (Fiscal 2007)

p. 106

Reduction in Waste Generation

p. 107

Flowchart for the Treatment of Waste and Reusable
Waste Products (Fiscal 2007)

p. 107

Breakdown of Recycling Methods (Fiscal 2007)

p. 108

Trends in Water Use

p. 108External Environmental Commendations: Fiscal
2007 Honors

p. 111

127

Stakeholder Feedback
Category

Title

Items Disclosed

Related Pages in This
ReportHitachi’s CSR
VisionA Third-Party Expert Opinionp. 5

Hitachi’s
Environmental
Strategy

Dialogue

pp. 8–9

CSR
Management

Respect for Human Rights

Human Rights at the Core of CSR

p. 31

SocialPerformance

Working in Harmony with Local Communities

Supplementing Research by Learning about
Japanese Traditions and Culture

p. 58

Supporting NPO Activities with Information
Technology

p. 59

Collaborative Creation with Suppliers

Employees’ Environmental Awareness Improved by
KES Acquisition

p. 63

Employees: The Key to Hitachi’s Future

Workplace Improvements through Peer Networking
by Womenp. 69

Friends Working Together for a Happier Workplace

p. 70

128

Inquiries
Hitachi, Ltd.
CSR Promotion Department, Corporate Communications Division (For inquiries on this report orCSR activities overall)
1–6–6 Marunouchi, Chiyoda-ku, Tokyo, 100-8280, Japan
Tel: +81-3-3258-1111 Fax: +81-3-4564-1454 http://www.hitachi.com/csr/
Corporate Environmental Policy Division (For inquiries on environmental activities)
1–18–13 Soto-Kanda, Chiyoda-ku, Tokyo, 101-8608, Japan
Tel: +81-3-3258-1111 Fax: +81-3-4564-4074 http://www.hitachi.com/environment/

On the cover: The cover photo shows a bird perched on a branch of the “Hitachi Tree,”a monkey pod tree (also in the photo above) in Moana Loa Garden Park, Oahu Island, Hawaii.

129