Contents. About the cover design. Editorial Policy. Scope of the Report. Issue Date. For Inquiries. For a boundless future...

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2 Editorial Policy Concerning the publication of a web-based Environmental Report This is the first web-based version of the Ajinomoto Group s environmental report,. The group has been publishing environmental reports since fiscal However, recognizing that environmental initiatives are part of the group s broader CSR, environmental reporting was included in the group s brochure-based CSR report starting in fiscal However, despite the fact that the group s environmental initiatives are expanding daily and becoming more advanced, and the fact that there are many details that should be reported, it is not possible to provide adequate reporting in just the brochure-based version due to space limitations. The Ajinomoto Group has received feedback from stakeholders requesting more detailed reporting on the group s wide range of environmental initiatives and their characteristics. Accordingly, the Ajinomoto Group has prepared a new report to be provided on the web as a PDF file, in a format that has relatively fewer size limitations. The new report also offers readers a new method of information access by leveraging the operability of the Web and PDFs. The Ajinomoto Group will continue its efforts to create the ideal environmental report for its stakeholders. The group welcomes readers feedback and opinions. Key features This report is organized under specific topics, each of which covers available background information, objectives, performance, and a recommended future course. Each section is designed as separate topic sheets, enabling the readers to take out the sheets concerning a relevant topic. Various link information is provided on the topic sheets to help to achieve relevance between the topic sheets, while maintaining the individuality of each topic. Links to information in this report (The pertinent locations in the text are marked with.) Links to information within the Ajinomoto Group The report attempts to clearly describe the philosophy, background, and direction of the Ajinomoto Group s environmental initiatives. The titles and subtitles in each section are used to describe the significance and objectives of each initiative within the group s overall vision. Each section includes past initiatives as much as possible to provide background as well as future directions. The report attempts to clarify environmental initiatives that have priority status in view of the Ajinomoto Group s business characteristics. The report attempts to incorporate many examples and give concrete shape to the presented information. The report covers topics that reflect the expansion of environmental considerations, such as in the supply chain and product lifecycle. Past data was reaggregated as much as possible to enable comparisons of annual changes in instances in which new data aggregation methods were adopted or scopes were changed. (As a result, figures may differ in some cases from figures reported in previous reports.) Contents Editorial Policy / Scope of the Report 1 Environmental Vision and Initiatives Overview Message from the Director Responsible for Environmental Management 2 History of Environment-conscious Management at the Ajinomoto Group 3 Ajinomoto Group Environmental Philosophy and Basic Policies 7 Environmental Vision: Ajinomoto Group Zero Emissions 8 Fiscal 2005 Goals and Results (Summary) 10 Environmental Management Environmental Management System (EMS) 14 Environmental Risk Management 16 Environmental Audits 18 Environmental Education 20 Greening of the Supply Chain 22 Various Environmental Initiatives Biodiversity Relationship 25 Environmental Research and Technology Development 27 Initiatives to Prevent Global Warming 32 Initiatives to Reduce Water Usage and Wastewater Impact 36 Initiatives to Reduce Waste 38 Effective Utilization of By-products 40 Proper Management of Chemical Substances 44 Measures against Soil Pollution 46 Environmentally Friendly Containers and Packaging 47 Logistics-related Efforts 52 Environmentally Friendly Buildings 55 Environmental Initiatives in Offices 57 Communication with the Community 58 Scope of the Report Scope of this report This report describes the environmental initiatives of the Ajinomoto Group, and covers the 111 companies (as of March 31, 2006) subject to the Ajinomoto Group Environmental Management measures as defined in the company s Environmental Regulations, namely Ajinomoto Co., Inc. and its consolidated subsidiaries, as well as affiliate companies that play a considerable role in the group s environmental management. As for statistics on performance, the report covers the group s 91 major business sites, which include two sites in Japan and four sites outside Japan newly added to the scope of the previous report because of acquisition, business expansion or improvements in data availability. With this scope of coverage, 80 to 90% of the entire Ajinomoto Group* under the consolidated financial accounting system is covered in terms of the number of companies, sales figures, and number of employees. * Ajinomoto Group refers to Ajinomoto Co., Inc., and its consolidated subsidiaries and affiliates that are subject to reporting under the equity method. Period covered by this report April 1, 2005 to March 31, 2006 (fiscal 2005) Note: Past items and data as well as more recent activities outside of this period are included where it was deemed appropriate. Appendix A Chronology of Environmental Activities 60 Supplementary Resources The Ajinomoto Group Environmental Philosophy and Basic Policies (Full Texts) Major Changes and Enhancements to the Revised Ajinomoto Group Environmental Philosophy and Basic Policies Environmental Accounting Data on Major Individual Business Sites Both In and Outside Japan List of ISO Certified Business Sites Database of LC-CO2 Emissions Factors for Materials Related to the Food Industry Issue Date November 2006 (The next issue is scheduled for November 2007.) For Inquiries Environment Department, CSR Division, Ajinomoto Co., Inc. Tel: Fax: en_soshiki@ajinomoto.com About the cover design For a boundless future... The cover design uses a Möbius strip, an infinity symbol, reflecting the Ajinomoto Group s wish to build a recyclingoriented, sustainable society. 1

3 Environmental Vision and Initiatives Overview Message from the Director Responsible for Environmental Management Message from the Director Responsible for Environmental Management The global environment is currently deteriorating as an outcome of humans vigorous economic activity. It is probable that the Earth could fall into a dangerous state of affairs if this situation continues. Building a sustainable society in which all people, including future generations, can enjoy a productive natural environment and better standards of living is the most important challenge we must address. As a corporate citizen, the Ajinomoto Group will accept the responsibility of working on this challenge through its corporate activities. Tsuyoshi Miura CSR Division General Manager Member of the Board & Corporate Senior Vice President A business dependent on the bounty of nature The Ajinomoto Group is expanding its businesses related to food and health in a number of countries and regions. The main raw materials for those businesses are local agricultural and marine products. We recognize that our business is dependent upon the bounty of nature, and want to contribute aggressively to the sustainability of the global environment out of a deep sense of gratitude toward nature. We will leverage the technology and knowledge cultivated by the Ajinomoto Group to conserve the global environment and secure stable supplies of food resources. At the same time, the entire group will support agricultural, livestock, and fisheries industries that do not place a burden on ecosystems, while making maximum use of natural cycles. Switching to an environmentally conscious business model As expected, the Ajinomoto Group complies with environmentrelated laws and regulations. In addition, we established the Ajinomoto Group Zero Emissions vision in order to minimize every environmental impact generated through our business activities. In order to advance group-wide efforts both in and outside Japan, the Ajinomoto Group has built ISO compliant group-wide environmental management systems in and outside Japan to drive these initiatives forward. Starting with the completion in fiscal 2003 of certification acquisition by all organizations of Ajinomoto Co., Inc., which is at the center of the group, consolidated subsidiaries whose businesses cover manufacturing, packaging, logistics, and engineering have been taking action to obtain certification. We are stepping up our efforts even more, and are determined to recast our very business activities into an environmentally conscious model. The expansion of environmental issues requiring the Ajinomoto Group s attention Environmental problems thus far Environmental pollution Wastewater, waste, chemical substances, etc. Global warming, resources and energy issues, etc. Sustainability issues, including ecosystems Environmental issues coupled with the safety and reliability of food, and with trust Ecosystem conservation, biodiversity, social systems, etc. Publication of the first web-based environmental report We have been publishing environmental reports since fiscal 2000 in order to widely communicate the Ajinomoto Group s approach to the environment and details of its environmental initiatives to society. Recognizing that environmental initiatives are part of our broader CSR, we included our brochure-based environmental reporting inside our CSR report starting in fiscal However, because the CSR report covers all of our CSR activities, reporting about environmental initiatives is kept to a minimum of important points. Accordingly, in fiscal 2006 we decided to publish the Ajinomoto Group Environment Report 2006 as a web-based environmental report, in addition to the brochure-based Ajinomoto Group CSR Report 2006, in order to provide a more detailed understanding of the Ajinomoto Group s environmental initiatives. This web-based environmental report is a place where we can include detailed data and examples. Looking ahead, we plan to leverage the capabilities of the Web to make our reporting more complete. The Ajinomoto Group will continue to steadily improve its environmental initiatives. We will use the Web, pamphlets, and dialogues continually to communicate this process to our stakeholders. We welcome opinions and feedback from readers about the contents and presentation of this report. 2

4 Environmental Vision and Initiatives Overview The History of Environment-conscious Management at the Ajinomoto Group The History of Environment-conscious Management at the Ajinomoto Group The Ajinomoto Group has been steadily stepping up its approach to environmental initiatives. It has switched from passive environmental responses that focus on compliance with laws and regulations to proactive environmental conservation efforts in which the group voluntarily reduces its environmental impact. Now the group has also adopted environment-conscious management in an attempt to combine good business with environmental consciousness. Moving ahead, the Ajinomoto Group will contribute to the creation of a sustainable society through its business while continually advancing environment-conscious management. Development of Environmental Initiatives The 1950s and 1960s were an era when the Ajinomoto Group s environmental initiatives consisted of individual responses. In the 1970s, initiatives at the organizational level were begun. At Ajinomoto Co., Inc., the Environmental Preservation Committee was jointly established by Central Research Laboratories and the Kawasaki Plant. This launched the environmental responses stage. In 1990, Ajinomoto Co., Inc. inaugurated its Environmental Meeting, which is chaired by the Vice President, as a sub-body under the Management Committee at its Headquarters. The Environmental Committee was established the following year, and company-wide environmental initiatives across all businesses were started in earnest. With the launch of companywide, across-the-board working groups in products, offices, production processes, and new technology, the company in 1991 introduced the Eco-Index System environmentally friendly guidelines for Containers and Packaging. In 1993, the Environment Department was established at Headquarters as a permanent department that would focus exclusively on environmental issues. In 1997, the Ajinomoto Group instituted its Environmental Philosophy and Basic Environmental Policies, which clearly call for the group to respond to global environmental problems and voluntarily reduce environmental impact, as well as its Environmental Regulations, which are a set of operating rules. During this decade, the group gradually advanced to the environmental conservation stage. From 2001 to 2002, the Ajinomoto Group s environmental initiatives finally entered the stage of aspiring to environmentconscious management. Since then, the group has been working to minimize all environmental impact in every business domain in line with the Ajinomoto Group Zero Emissions environmental vision. The objective is to achieve compatibility between the environment and corporate growth by recasting the group s very business activities and business model in an environmentally conscious mold. In 2003, Ajinomoto Co., Inc., which serves as the group s headquarters, changed the formal Japanese name of the Environment Department to better reflect its commitment to environment-conscious management, although its former English name remains the same. Currently, the Ajinomoto Group is advancing to the stage of contributing to a sustainable environment and society by developing its environment-conscious management style even further as part of its commitment to CSR and sustainability. Details of the group s initiatives toward that end are reported in the Ajinomoto Group CSR Report 2006 and the Ajinomoto Group Environmental Report See the Chronology of Environmental Activities section for the history of the Ajinomoto Group s environmental initiatives. Development of the Ajinomoto Group s environmental initiatives Commitment to CSR Commitment to sustainability New Environmental Philosophy CSR Vision and Basic Policies Environmental and social sustainability issues Environmentconscious management Corporate ( management ) itself Environmental conservation (Voluntary initiatives) Environmental responses (Passive) Voluntary reduction of environmental impact Global environmental issues Pollution countermeasures, pollution prevention Environmental Philosophy and Basic Policies Global environmental issues Voluntary reduction of environmental impact Ajinomoto Group Zero Emissions Compatibility between the environment and corporate growth Work for the environment through business activities. Recast business activities and business model in an environmentally conscious mold. Improve initiative-taking Expand scope of initiatives

5 Environmental Vision and Initiatives Overview The History of Environment-conscious Management at the Ajinomoto Group A Look Back at Initiatives up until Fiscal 2005: The Progress of Environment-conscious Management Masayuki Hirata Former General Manager of Environment Department (Fiscal 2005) CSR Division, Ajinomoto Co., Inc. The progress of environment-conscious management Environmental initiatives can be divided into three stages: environmental responses since about 1970 when the group focused on compliance with laws and regulations; environmental conservation in which the group voluntarily reduced environmental impact; and environment-conscious management that attempts to integrate environmental consciousness with good business. In this categorization, the Ajinomoto Group has finally entered the third stage that of advancing environment-conscious management. A strong commitment on the part of top executives is vital to the realization of environment-conscious management. On top of this, efforts must be securely underpinned by three support elements: management system, performance, and communication. In line with this principle, the Ajinomoto Group has identified its top priority issues in a preservation plan. The primary objective of the Ajinomoto Group Medium- to Long-term Environmental Preservation Plan, the group's six-year plan for fiscal 2005 to fiscal 2010, is to implement environment-conscious management group-wide. The following are three priority issues from that plan, which the group is currently working on. Priority issues from the Ajinomoto Group Medium- to Long-term Environmental Preservation Plan Priority issues Specific goals 1. Establishment and firm implementation of an environmental management system 2. Minimization of environmental impact 3. Strengthening of social and environmental communication Complete group-wide acquisition of ISO certification and implement its operation. Promote green containers & packaging, and the Ajinomoto Group Zero Emissions Plan. Publish CSR reports and environmental reports, and hold stakeholder dialogues. Backbone of environment-conscious management Performance Management Environmental Philosophy and Basic Policies Commitment of top management Communication Environmental preservation plan and priority issues With the previous Three-year Environmental Preservation Plan that was employed from fiscal 2002 to fiscal 2004, the Ajinomoto Group secured a good footing for environmentconscious management by achieving full regulatory environmental compliance and establishing a system for environmental conservation. The following are three priority issues from that plan. The Ajinomoto Group steadily achieved results by working group-wide on these issues. Priority issues from the Ajinomoto Group Three-year Environmental Preservation Plan 1. Construction of a mechanism for achieving environmentconscious management (Group-wide acquisition of ISO certification) 2. Strengthening environmental conservation management (Compliance with environment-related laws and beginning of work on the Ajinomoto Group Zero Emissions Plan) 3. Strengthening corporate brand power from an environmental perspective (Improve environmental PR) Establishment of an environmental management system (EMS) The Ajinomoto Group has continued to work on the establishment of an EMS following the completion of its previous threeyear environmental plan. The group required over 100 business sites and subsidiaries in and outside Japan to acquire ISO certification. A few are behind the original schedule, but most targeted sites are on track to have obtained certification within fiscal The most important thing is not to acquire the certification, but to firmly implement the EMS and achieve concrete results. The Ajinomoto Group goes beyond mere compliance with the local environment-related laws and regulations in each region, and is working to voluntarily reduce environmental impact. Switching from minimization of impact to a totally new business model Formerly, each group business site and subsidiary undertook environmental initiatives individually. The group subsequently established the Ajinomoto Group Zero Emissions environmental vision and an action plan to be used to advance that vision through fiscal The aim of the Ajinomoto Group s zero emissions vision is to minimize every environmental impact generated from all business domains regardless of the existence or level of laws and regulations in each country and region. The group s performance goals include very stringent targets; some are ten times stricter than regulatory targets. As described in this report, the Ajinomoto Group has been steadily making progress toward its goal of minimizing environmental impact. 4

6 Environmental Vision and Initiatives Overview The History of Environment-conscious Management at the Ajinomoto Group Looking ahead, the group recognizes that it will have to recast its very business activities in an environmentally conscious mold through radical technological innovations and business model reforms. The group will have to drive its efforts toward the minimization of environmental impact even further, in part by working to improve resource productivity in order to transform the resources in which it invests into the highest value-added products and co-products possible. P O I N T! Priority initiatives through fiscal 2005 and future challenges Organic wastewater The Ajinomoto Group uses large quantities of water in the fermentation production process, which is a core Ajinomoto Group business, and generates large quantities of organic wastewater. Consequentially, reducing the impact of wastewater is a particularly important performance goal. A concentrated liquid by-product is generated during fermentation. It contains mainly nitrogen and various amino acids. For some time now, the group has effectively utilized this liquid as an organic fertilizer, distributing it on agricultural fields near its plants (mostly located in areas outside Japan where agriculture forms the industrial base). Currently, the Ajinomoto Group treats wastewater with a lower pollutant load at treatment facilities using activated sludge, and then releases it in accordance with the wastewater regulations for that region. However, the Ajinomoto Group Zero Emissions Plan sets common worldwide group standards for BOD* and nitrogen concentrations that are up to ten times more stringent than the existing standards in Japan. The group ventured to establish such stringent goals because it is guided by the basic philosophy of minimizing environmental impact, and also because it forecasts that wastewater standards will eventually become stricter. Accordingly, the group reasoned that it should start its efforts as soon as possible. Meeting the nitrogen standards in particular has become a steep challenge at fermentation plants. * Biochemical oxygen demand: The amount of oxygen used for biochemical oxidation by a unit volume of water at a given temperature and for a given time. BOD is an index of the degree of organic pollution in water. Greenhouse gases The Ajinomoto Group has established the following goals regarding the reduction of greenhouse gas emissions (primarily CO2): a 20% reduction in CO2 emissions per unit of production in and outside Japan by 2010 compared to the fiscal 2002 level, and a 6% reduction in absolute emissions in Japan compared to the Ajinomoto Group's fiscal 1990 emissions. However, achieving absolute emissions reductions is very difficult while attempting to expand business in Japan. Going forward, the Ajinomoto Group will really need to think hard about this issue. Containers and packaging The Ajinomoto Group has been working on the greening of containers and packaging since before the Containers and Packaging Recycling Law came into effect in 1996 in Japan. With the revisions made to the law in June 2006, the importance of those initiatives has only increased. The group will have to establish a voluntary action plan and set-up its efforts for promoting the three Rs (reduce, reuse, recycle) in relation to containers and packaging. Containers and packaging are important for food companies, as they serve to keep foods safe and sanitary. Consequentially, the ability to promote the three Rs is somewhat limited, and efforts are further complicated by the fact that products cannot be marketed successfully without consumer acceptance. Public awarenessbuilding programs are important then to encourage the cooperation of consumers. Toward Greater Promotion of Environment-conscious Management Hidehiro Shinohara General Manager, Environment Department CSR Division, Ajinomoto Co., Inc. I think that the promotion of environment-conscious management means to promote the provision of highly environmentally friendly products and services by ratcheting up environmental consciousness across all business processes, from the procurement of raw materials through consumption. The Ajinomoto Group s environment-conscious management has reached the stage of moving from the minimization of impact from its business activities to radically reforming its business model, while strategically promoting environmental initiatives that are coupled with its own business operations. To that end, the Ajinomoto Group must advance its environmental initiatives while always keeping track of the environmental effects of all its business activities, including interactions along the supply chain, as well as for the entire life cycle of its products. Thus far, the Ajinomoto Group has worked on building a recycling-oriented business model in the field of amino acid fermentation production, and succeeded in establishing a Biocycle business model. The group must now learn from this successful model and establish a group-wide environmentally conscious business model. The company is already participating in an investigative commission that focuses on environmental consciousness in food products and a collaborative study group among industry, academia, and government that promotes quantitative assessment of the environmental impact of food 5

7 Environmental Vision and Initiatives Overview The History of Environment-conscious Management at the Ajinomoto Group products using LC-CO2 and other measures. These initiatives are intended to advance environmental consciousness in food products, for which demand from society has increased notably. The Ajinomoto Group has made use of the knowledge gained through these activities in studying product development, raw material procurement, and the manufacturing process. Going forward, our goal is to enhance the environmental friendliness of the Ajinomoto Group s products by promoting environmentally conscious technological innovations and business model reforms, in addition to the initiatives undertaken thus far, such as the use of environmentally friendly containers and packaging. Moreover, with the worsening of the global environment, the securing of food resources is forecast to become more difficult. As a manufacturer of food products, the Ajinomoto Group will pursue the sustainability of food through the utilization of its technology and knowledge as part of its commitment to CSR. In thinking about the worsening of the global environment and the increasing world population, it is obvious that the group must stress its environment-conscious management even more. The Ajinomoto Group is committed to continuously advancing its environment-conscious management while always paying attention to the global environment, social trends, and consumer needs. The group s goal is to contribute to the creation of a sustainable society through the group s business as it pursues the sustainability of food. Toward that end, the Ajinomoto Group will implement, from a more functional and more social perspective, the systems it has built thus far for promoting environment-conscious management. These include the environmental management systems based on ISO certification, the acquisition of which will be complete at almost all targeted business sites in and outside Japan during fiscal

8 Environmental Vision and Initiatives Overview Ajinomoto Group Environmental Philosophy and Basic Policies Ajinomoto Group Environmental Philosophy and Basic Policies The Ajinomoto Group s business endeavors related as they are to food and health are dependent upon the bounty of nature. The group is committed to contributing proactively to sustainability and to minimizing its environmental impact so that all people, now and in future generations, can enjoy productive natural environments and better standards of living. Proactively Contributing to Sustainability The Ajinomoto Group, in an effort to protect the environment and ensure sustainable business growth, established an Ajinomoto Group Environmental Philosophy and Basic Policies in 1977, and has been independently working on environmental initiatives in line with that philosophy and basic policy. With a view to further expanding its efforts, the group revised its Environmental Philosophy and Basic Policies in April 2006 with the aim of minimizing the group s environmental impact, and in order to further promote initiatives in the field of sustainability, which the group sees as responsibilities of a truly global corporation. Revision of Environmental Philosophy and Basic Policies In April 2006, the Ajinomoto Group revised its Environmental Philosophy and Basic Policies for the first time since their establishment in While underscoring the previously stated resolve that business activities will be conducted in harmony with the environment and that business practices will be constantly improved to ensure this occurs, the revised version added a declaration of the Ajinomoto Group s management commitment to contribute proactively to sustainability as a truly global corporation. The change was based in part on the significant changes in the business environment and global environmental issues that have occurred during the past eight years. In addition, the revisions also ensured greater consistency with the group s CSR Vision and its efforts to achieve zero emissions. This step will help the company to strengthen both its environmental initiatives and its CSR management in a coordinated fashion, which is noted as a basic strategy in the Ajinomoto Group Fiscal Medium- to Long-Term Management Plan, - dvance10. The Ajinomoto Group takes every possible opportunity to promote communication, as the group values dialogue with all stakeholders, including its employees. In working on the above revisions, the group compiled the final proposals based on opinions solicited from group employees in and outside Japan. Everyone had an opportunity to contribute. As a result of this inclusive approach, the philosophy and basic policies reflect the essential uniqueness of the Ajinomoto Group and its food and health businesses. They express a sense of appreciation for the natural environment that sustains the earth and all of its people, and emphasize the importance of protecting ecosystems and biodiversity. Ajinomoto Group Environmental Philosophy and Basic Policies Ajinomoto Group Environmental Philosophy (abridged) The Ajinomoto Group is committed to contributing to environmental and social sustainability, which assures a rich natural environment and affluent lives for all the people of the world, including future generations. We appreciate nature s blessings our Food and Health business depends on them so we strive to reduce adverse impacts on the global environment and local ecosystems as well as to use recycling-oriented production methods to make the most of natural resources. Furthermore, as a responsible global corporation, we endeavor to continuously improve our business operations to keep them in harmony with the global environment. Basic Policies (abridged) 1. Attitude We fully comply with relevant laws and regulations. We also closely monitor global trends in sustainability, the environment and biodiversity, and strive to be a positive force in society by responding to emerging trends quickly and appropriately. 2. Management system We address sustainability issues sincerely through our environmental management system. 3. Performance We endeavor to reduce adverse environmental impacts on ecosystems. Understanding the importance of finite natural resources, we make a genuine effort to conserve resources and energy and promote recycling. 4. Technology development We strive to develop new technologies and systems that enhance sustainability. 5. Communication We provide education and training on sustainability for our employees. We hold dialogues on the group s initiatives for sustainability with our stakeholders. We pursue partnerships and collaboration with our stakeholders with the goal of enhancing environmental and social sustainability both globally and locally. Click here for full texts of the Ajinomoto Group Environmental Philosophy and Basic Policies. Click here for information on major changes and enhancements on the revised Ajinomoto Group Environmental Philosophy and Basic Policies. 7

9 Environmental Vision and Initiatives Overview Environmental Vision: Ajinomoto Group Zero Emissions Environmental Vision: Ajinomoto Group Zero Emissions The Ajinomoto Group established the Ajinomoto Group Zero Emissions environmental vision to give embodiment to the ideals described in the group s Environmental Philosophy. In line with this vision, the Ajinomoto Group is working to minimize the environmental impact generated from all its business domains. Taking this vision a step further, the group is aiming to reform and innovate its business activities into a model of environmentally friendly business practices. Environmental Vision: Ajinomoto Group Zero Emissions In approval of the zero emissions concept put forward by the United Nations University in 1994 toward the realization of a sustainable society, the Ajinomoto Group established the Ajinomoto Group Zero Emissions environmental vision. Ajinomoto Group is promoting initiatives aimed at transforming all the resources it takes in into valuable products and coproducts, while reducing the amount of waste and any other environmental impacts from its business activities. The Ajinomoto Group s awareness of its environmental impact The Ajinomoto Group has a steady history of voluntarily acting to reduce its environmental impact by treating plant wastewater, working to save resources, etc., in addition to complying with environmental regulations and preventing environmental pollution. Nevertheless, the group s globally expanding business activities entail a hard truth namely, that the group does impact the global environment on a scale commensurate with its operations. This raises a challenge for the Ajinomoto Group, whose business activities are dependent upon the bounty of the global environment including agricultural, livestock, and fisheries resources, to realize sustainable business growth while ensuring sustainable environmental and resource management. The Ajinomoto Group sees the elimination or minimization of environmental impact in other words, zero emissions as the ultimate means for overcoming this challenge. Major environmental impact factors caused by the Ajinomoto Group s business activities (FY 2005 results) Zero emissions: Minimizing environmental impact The concept of zero emissions was first put forward by the United Nations University in 1994, with a view toward achieving a sustainable society in place of the current mass-consumption society. At the heart of the idea is an attempt to completely utilize resources by having industrial clusters use each other s waste, just like different families, genera and species live together symbiotically in natural ecosystems. The term zero emissions refers to the concept of embracing the progress of technology and frameworks for maximizing the use of resources, as well as reducing emissions of waste. The Ajinomoto Group approves of this concept of zero emissions. As such, it has adopted the Ajinomoto Group Zero Emissions environmental vision, focusing on all of its environmental impacts, as well as resources used across the group s businesses. Objective of the Ajinomoto Group Zero Emissions vision The Objective of the Ajinomoto Group Zero Emissions environmental vision is the minimization of all types of environmental impact generated in all business domains, based on the Ajinomoto Group s own, uniform global standards. These standards extend beyond production activities and apply regardless of the existence and/or level of laws and regulations in a particular country or region. Ajinomoto Group Zero Emissions The Ajinomoto Group s own, uniform global standards Minimization of all types of environmental impact generated in all business domains Energy consumption CO2 2.3 million tons Water consumption Wastewater 200 million tons Raw material consumption Waste, waste - products By-products, etc. 2.2 million tons Specifically, in pursuit of the Ajinomoto Group Zero Emissions vision, the group aims to move beyond the bounds of the mere reduction of environmental impact. The Ajinomoto Group aspires to transform all the resources it takes in into valuable products and co-products, and to reform its business activities into a model of the zero emissions ideal. A good example of a pioneering effort that the group has been working on for the past 30 years is the Bio-cycle. This is a resourcerecycling production framework based on inter-industry cooperation, such as among the agriculture, agro-based and amino acid fermentation industries. The Ajinomoto Group s Bio-cycle efforts demonstrate that substances that are normally considered 8

10 Environmental Vision and Initiatives Overview Environmental Vision: Ajinomoto Group Zero Emissions waste are actually valuable resources and provide double economic and environmental benefits. Through the implementation of its Zero Emissions vision, the Ajinomoto Group is determined to achieve sustainable development as a corporation and to contribute to protection of the global environment and the realization of a sustainable society. Sustainable business growth See the Fiscal 2005 Goals and Results page for specific goals and results under the Ajinomoto Group Zero Emissions Plan Ajinomoto Group Zero Emissions Plan Examples of targets to be achieved by fiscal 2010 Minimizing environmental loads Cost reductions Promoting operations and products that minimize impact on the environment Environmental Management System ISO certification Implementation of environmental assessment Implementation of internal audits Environmental education Pursuing Zero Emissions for the Ajinomoto Group Reduced by-products and waste Reduced wastewater impact Reduced CO2 emissions Environmental impact reduction theme Reduced container and packaging material Reduced unsold products Reduced waste, including kitchen refuse See the Effective Utilization of By-products section for more information about the Bio-cycle. Ajinomoto Co., Inc. is a member of the United Nations University Zero Emissions Forum (UNU-ZEF) Ajinomoto Group Zero Emissions Plan In fiscal 2004, the Ajinomoto Group established the Ajinomoto Group Zero Emissions Plan as a six-year action plan to use for the development of the Ajinomoto Group Zero Emissions vision through fiscal The plan describes specific initiatives and sets concrete targets. The targets the Ajinomoto Group has set for itself include items that are about ten times more rigorous than standards set by current laws and regulations. The Ajinomoto Group is confident that rising to the challenge of meeting such voluntarily high targets will not only improve environmental performance significantly, but also stimulate the group s creativity and accelerate its dramatic technological and business model innovations. The Ajinomoto Group is currently increasing its efforts under this plan. 9

11 Environmental Vision and Initiatives Overview Fiscal 2005 Goals and Results (Summary) Fiscal 2005 Goals and Results (Summary) In fiscal 2004, the Ajinomoto Group concluded its initiatives based on the Fiscal Ajinomoto Group Three-year Environmental Conservation Plan. In fiscal 2005, Ajinomoto moved forward with its environmental initiatives based on a new six-year plan. The group is working to further improve its efforts by evaluating its accomplishments each fiscal year. Ajinomoto Group Fiscal Medium- to Long-term Environmental Conservation Plan and Results Since fiscal 2005, the Ajinomoto Group has been proactively enacting its environmental initiatives based on a new six-year plan, the Ajinomoto Group Fiscal Medium- to Long-term Environmental Conservation Plan. Outline of the Ajinomoto Group Fiscal Medium- to Long-term Environmental Conservation Plan Management: From establishment to steady implementation of environmental management system (EMS) Performance: Establishment and steady implementation of the Ajinomoto Group Zero Emissions Plan Communication: Improving assessment of corporate value from a CSR perspective Main goals through FY10 Main goals through FY05 Assessment Review of FY05 performance Overview of initiatives Developments for FY06 Philosophy / Basic policy CSR Vision Establish and implement CSR Vision as a truly global corporation. Environmental Philosophy and Basic Policies Hold to Environmental Philosophy and Basic Policies as a truly global corporation Establish group CSR Vision Revise group Environmental Philosophy and Basic Policies In September 2005, established Ajinomoto Group CSR Vision and the Ajinomoto Group Vision for CSR Achievements by 2020 In April 2006, after incorporating employee dialogue into revision process, revised and published Ajinomoto Group Environmental Philosophy and Basic Policies Establish goals and roadmaps for each business Raise awareness within group Solicit opinions from stakeholders Implementation of environmental management system (EMS) Steadily implement EMS within new internal company system Enhance internal environmental audits* 1 Rebuild global EMS structure to make it more consistent with business domains Enhance internal environmental audits Rebuilding is progressing at each internal company Effectively utilized suggestions from internal environmental audits to improve EMS Continue rebuilding systems for each internal company Greening of organizational operations Acquisition of ISO certification Acquire certification at 128 business sites, including all Ajinomoto Co., Inc. organizations and main business sites of consolidated subsidiaries* 2 Group environmental audits Efficiently implement group environmental audits* 3 Environmental assessments Improve mechanism and steadily implement assessments Environmental performance reporting Establish a quick reporting system Compile and report statistics for all business domains worldwide Utilize information for internal management in each business domain Environmental education and awareness Raise awareness of executives and other levels of management Maintain and improve employees competence through professional education and training Enhance skills and knowledge of internal environmental auditors Acquire certification at a total of 108 sites Apply steadily at new sites Comply with ISO14001:2004 Develop into integrated management system Conduct audits at 35 sites Coordinate audits with related audits performed by Corporate Division Prioritize Expand coverage of assessments to include sales of new products Accelerate performance reporting Prepare to adopt new performance reporting system in FY06 Raise awareness of executives and other levels of management through regular provision of information Steadily implement environmental awareness education for employees based on fiscal year plan Systematically implement stratified education Continue training of internal environmental auditors (850 in total) and start follow-up courses Acquired certification at a total of 95 sites Formed plans for acquiring certification at new sites Completed ISO14001:2004 certification process Made headway toward building of integrated quality, environmental, and safety systems in Japan, Thailand, Brazil, and France; also made headway toward moving from certification of individual business sites to company-wide certification Conducted audits of 27 sites Conducted environmental audits together with operational audits by the Internal Auditing Department again, following the previous year Thoroughly conducted expanded environmental assessments Made progress on environmentally friendly product development Accelerated reporting compared to previous year, but efficiency and accuracy remain challenges Preparations for adopting new system (ASREP* 4 ) progressed on schedule Provided executives with environmental information monthly Conducted group-wide environmental awareness education using annual self-awareness education video Conducted stratified education for new employees, newly appointed managers, and employees who changed job roles and functions Held 19 training courses for internal environmental auditors, bringing the total number of attendees to date to about 1,200 auditors, and held 11 follow-up seminars Consider joint audits together with various audits conducted by the Corporate Division Efficiently implement global reporting with the new system (ASREP) Greening of business activities Environmental R&D Develop environmentally efficient production and business processes Develop essential technology for achieving Ajinomoto Group Zero Emissions Plan objectives (such as technology for energy and resource conservation, effective utilization of byproducts, and treatment of wastewater) Develop green plastics (PBS) Research strategic environmental measures Environmentally friendly containers and packaging Implement group-wide initiatives designed to improve Eco-Index assessment scores Set benchmarks based on Eco-Index assessments of in-house and competitors products Develop new environmentally efficient process technology Accelerate basic development and development of commercialization technology / Diversify technology Develop green plastics (PBS) Participate in outside research groups (such as on LC-CO2 and environmental impact assessments of processed foods) Make and implement operational revisions of container and packaging assessments Conduct Eco-Index assessments of all in-house products Study outer containers and other logistical factors, in addition to retail product packages Check guidelines and direction for products marketed outside Japan Vigorously communicate results of initiatives to the public Comply with revision of Japan s Container and Packaging Recycling Law Made headway toward developing process technologies for energy conservation and wastewater load reduction Quickly installed technology in plants, and made headway in diversifying technology for effectively utilizing by-products and creating high added value Started using PBS in packaging for some gift products Researched LCA of food products with the Food Products Study Group of the Institute of Life Cycle Assessment, Japan Made operational revisions of assessments and made them generally known Conducted Eco-Index assessments of main in-house products and competitors products (the form of containers and packaging tends to be similar, and Ajinomoto s products do not show a clear superiority) Logistical factors not yet studied Guidelines for products marketed outside Japan not yet established Participated in two exhibitions and in the Container Diet Campaign Started studying internal system with a view to establishing voluntary action plan following law revisions Self-assessment 10

12 Environmental Vision and Initiatives Overview Fiscal 2005 Goals and Results (Summary) Main goals through FY10 Main goals through FY05 Assessment Review of FY05 performance Overview of initiatives Developments for FY06 Greening of business activities Green procurement Promote procurement in line with the Ajinomoto Group Green Procurement Guidelines Increase rate of purchase of environmentally friendly products using an indirect materials purchasing system (Ajinomoto Co., Inc.) Manufacturing Dramatically improve environmental efficiency through adoption of new technology (Ajinomoto Group Zero Emissions Plan) Improve all types of environmental impact Marketing & Sales Reduce waste products Logistics Promote modal shift Improve logistics efficiency and promote green logistics Provide trade partners with explanations of policy/intentions Monitor performance for purchasing environmentally friendly products using an indirect materials purchasing system Dramatically improve environmental efficiency through adoption of new technology (Ajinomoto Group Zero Emissions Plan) Reduce various environmental impacts (see table below for detailed information) Achieve 0.5% return ratio for household dry goods in Japan (Ajinomoto Co., Inc.) Maintain or improve rate of modal shift Build an environmental management system for the AJINOMOTO LOGISTICS CORPORATION Group Began providing main trade partners with explanations of policy/intentions Listed environmentally friendly products first in the indirect materials purchasing system s catalogue of goods Ajinomoto Co., Inc. achieved a rate of 64.1% for purchases of environmentally friendly indirect materials, a 5 point increase over the previous fiscal year Improved productivity through adoption of new process technology (fermentation related divisions) Adopted new wastewater treatment technology (BDN* 5 equipment) at business sites in Brazil and Peru Reduced consumption of boiler fuel oil by utilizing waste vegetable oil (Ajinomoto Frozen Foods Co., Inc.) Reduced waste products by weight by 40% over the previous fiscal year to 1,340 tons Reduced value of returned goods by 18% over previous fiscal year to 670 million Reduced return ratio by 0.1 point over the previous fiscal year to 0.5% Obtained approval for Eco Rail Mark* 6 (Ajinomoto Co., Inc., and Ajinomoto Frozen Foods Co., Inc.) Undertook efforts toward acquiring ISO certification for AJINOMOTO LOGISTICS CORPORATION Group (acquired block certification in May 2006) Achieve FY06 target rate of 80% for purchases of environmentally friendly products using an indirect materials purchasing system Execute Ajinomoto Group Zero Emissions Plan Communication with society Environmental reporting and communication of environmental information Improve systems to strengthen CSR communication Publish CSR Report early Proactively disclose information and promote dialogues with stakeholders Promote publication of individual site reports for all business sites Relationship with local communities Always present group activities honestly from the viewpoint of local residents Cooperation with NPOs and diverse stakeholders Contribute to consensus-building toward creation of a recycling-oriented society through cooperation with stakeholders Reorganize websites and increase information provision Publish CSR Report in September 2005 Promote publication of site reports for main affiliates and business sites Create an environmental communication symbol Open plants to local residents and create opportunities for them to actually experience Ajinomoto s production and environmental activities, in addition to holding regular dialogues Utilize fruits of dialogues with NGOs, NPOs, and other environmental groups as a fresh perspective in future environmental initiatives Reorganized website to match overall CSR framework, and started posting specific news on environmental initiatives Published CSR Report in mid-september (about 1 month early) Ajinomoto Frozen Foods Group prepared to publish an individual environmental report on its website Created mark for new communication symbol, and used new mark for environmental advertisements, awareness posters, and presentation materials Greatly increased plant visitors at main business sites; started well-received Eco Tour at Kawasaki Administration & Coordination Office; expanded environmental monitor system Studied concepts for establishing guidelines for environmentally friendly food products while participating in the Green Purchasing Network s Food Products Study Group Enhance content of Environmental Report and post it to website Publish CSR Report in September, and move the details of Environmental Report to website Publish environmental report for the Ajinomoto Frozen Foods Group in September Proactively help build a recycling-oriented society through cooperation with various stakeholders (GPN activities, etc.) Self-assessment Ajinomoto Group Zero Emissions Plan and Results The Ajinomoto Group Fiscal Medium- to Longterm Environmental Conservation Plan calls for the steady accomplishment of the Ajinomoto Group Zero Emissions Plan, with the aim of minimizing the environmental impact generated in all the group s business domains. In fiscal 2005, each division produced its own roadmap and worked toward achieving the group s goals Ajinomoto Group Zero Emissions Action Plan Reduce emissions of greenhouse gases Reduce possession of CFCs Reduce pollutant load of wastewater Reduce waste Goals through FY2010 Item Scope Specific goals Unit CO2 emissions Gross CO2 emissions Amount of specified CFCs in possession Concentrations of pollutant load in wastewater Unit volume of wastewater discharged Resource recovery ratio Ajinomoto Group All production sites All production sites in Japan All production sites Discharge points from wastewater treatment facilities at all production sites BOD 10 ppm, TN 5 ppm All production sites Reduce by 20% or greater against production weight (compared to FY02) All production sites and non-production sites Reduce emissions per monetary unit of sales by 20% (compared to FY02) Maintain gross emissions of 484,000 tons or less (corresponding to 6% reduction compared to FY90 level) All non-production sites in Japan Do not allow increase from FY02 performance All product logistics divisions in Japan Do not allow increase from FY02 performance Reduce to zero by FY07 Achieve a ratio of 99% or greater Assessment Review of FY05 performance Overview of initiatives Emissions per monetary unit of sales increased by 2% compared to FY02, but decreased by 18% per unit of production volume 506,000 tons of gross emissions, exceeding the FY10 achievement goal by 22,000 tons Emissions increased by about 800 tons (29%) compared to FY02 Emissions increased by about 2,000 tons (5%) compared to FY02 Specified CFCs were used as a refrigerant in production-use refrigerators, and made progress on replacement of equipment In FY05, destroyed about 6 tons of CFCs and safely stored about 42 tons Goals achieved at 12 of 48 targeted sites (an increase of six business sites over previous fiscal year) Reduced by 26% compared to FY02 Achieved resource recovery rate of 97.9% overall and 99% or greater at 33 of 94 targeted sites (improved 0.1 point over previous fiscal year and added 9 business sites) Reduce unsold products (household products in Japan) Amount produced Resource recovery ratio Food Products Company of Ajinomoto Co., Inc. All sales divisions in Japan All sales divisions in Japan Reduce by 50% by FY07 (compared to FY02) and do not allow increase thereafter Achieve a ratio of 99% or greater Reduced amount produced by 65% Achieved resource recovery rate of 86% *1. Internal environmental audits: Internal audits based on the requirements of the ISO environmental management system standard, performed within the scope of certification. *2. For consolidated subsidiaries, covers business sites that perform manufacturing, packaging, logistics, and engineering. The scope has changed due to M&As, business expansion, and changes in the unit of certification (as of March 31, 2006). *3. Group environmental audits: Operational audits relating to the environment, performed at group business sites by auditors from the Environment Department of Ajinomoto Co., Inc. *4. ASREP: The group-wide Ajinomoto System of Environmental Performance Reporting. *5. BDN: Biological Denitrification, an advanced wastewater treatment technology. *6. Eco Rail Mark: A certification mark awarded by the Railway Freight Association and approved by Japan s Ministry of Land, Infrastructure and Transport, to companies and products that use a certain percentage or greater of rail freight. 11

13 Environmental Vision and Initiatives Overview Fiscal 2005 Goals and Results (Summary) Ajinomoto Co., Inc. has been independently tallying environmental costs since fiscal In fiscal 2000, the company adopted environmental accounting practices based on guidelines published by the Environment Agency (now the Ministry of the Environment). The company uses environmental accounting results to further promote its environmental management initiatives, and continually discloses environmental accounting information in its environmental reports. In fiscal 2005, Ajinomoto Co., Inc. s environmental conservation costs came to about 55 million in total investments and about 4.8 billion in total expenditures. The Ajinomoto Group works to gain a quantitative understanding of the resource inputs it uses and the material and resource outputs it generates to provide goods and services. Data on the input and output balance is beneficial for planning technology and business model innovations that enable the further advancement of environmental initiatives. Fiscal 2005 results Environmental Accounting Click here for detailed data on Ajinomoto Co., Inc. s environmental accounting. Input and Output Balance The Ajinomoto Group is working to minimize environmental burdens by tallying and understanding the yearly material balance for the Ajinomoto Co., Inc. and for consolidated subsidiaries that play a considerable role in the Ajinomoto Group s environmental management. In fiscal 2005, the Ajinomoto Group used about 3.93 million tons of raw materials, about 213 million tons of water, and about 32,200 TJ of energy. It produced about 1.77 million tons of food, amino acid, and pharmaceutical products, and recycled resources into about 2.2 million tons of co-products. In the process, it also generated about 2.3 million tons of CO2, discharged about 201 million tons of wastewater, and produced about 47,000 tons of waste. Please see the Ajinomoto Group Input and Output Balance (FY2005) section for more details. Nevertheless, this business exerts a larger environmental impact, since the production of amino acids using the fermentation method consumes a significant amount of energy in the form of electricity and steam and great quantities of water. This business also represents about 80 to 90% of the group s total release of materials including by-products, waste and emissions, and discharged water. Accordingly, the group is striving to achieve manufacturing process innovations that enable the consumption of fewer resources and less energy, and is making progress in the reduction of wastewater and the effective utilization of by-products. Food-related business To reduce the environmental impact from its food-related business, the Ajinomoto Group must work closely with consumers and distribution channels to reduce waste products, reduce and recover resources from food waste, improve containers and packaging materials, recover resources from these materials after their initial use, and so forth. The group is therefore working not only to reduce the environmental impact generated from its production and sales activities, but also moving aggressively to form alliances with its distribution channels and to conduct awareness campaigns for consumers. In this way, it is striving to help society by reducing its overall impact on the environment, thereby helping to build a sustainable, recycling-oriented society. Pharmaceuticals, specialty chemicals, and packaging material In this business segment, besides energy conservation and waste reduction, the Ajinomoto Group is also focused on the proper use of chemical substances during its R&D and production operations, and committed to strict environmental management. Logistics and services, and other businesses In logistics operations, including warehousing, the Ajinomoto Group focuses its efforts on safety and environmental measures, including the reduction of CO2 from fuel consumption, the prevention of air pollution from exhaust gases, and the proper disposal of waste products in compliance with laws and regulations, as well as on countermeasures against environmental pollution associated with accidents. Consolidated net seles For details on initiatives to reduce water usage, waste, and carbon dioxide emissions, see the sections for: Initiatives to Reduce Water Usage and Wastewater Impact; Initiatives to Reduce Waste; and Initiatives to Prevent Global Warming, respectively. Click here for data on individual business sites both in and outside Japan. Characteristics of environmental impact of Ajinomoto Group by business segment Logistics/services/ offices 10 Pharmaceuticals/ specialty chemicals/ packaging 18 Consolidated net sales: About billion Fermentation 26 Food 46 Fermentation-related business Sales in the fermentation-related business account for about 26% of the consolidated net sales of the Ajinomoto Group. Note: The Ajinomoto Group s business segments categorized according to the characteristics of environmental impact generated by various manufacturing methods, excluding cooperative ventures, such as edible oils, coffee, and dairy products. These categories are different from the business segments based on consolidated financial accounting. 12

14 Environmental Vision and Initiatives Overview Ajinomoto Group Input and Output Balance (FY2005) Fiscal 2005 Goals and Results (Summary) * Scope of reporting: 91 business sites including Ajinomoto Co., Inc. and consolidated subsidiaries that play a considerable role in the Ajinomoto Group s environmental management. The scope expanded by two business sites in Japan and four business sites outside Japan compared to the fiscal 2005 report, due to M&As, business expansion, and new performance reporting capabilities. * Reporting period: April 1, 2005 to March 31, 2006 * Reported data includes some estimated values. INPUT Input of resources and energy Energy 32,200 TJ* Raw materials 3.93 million tons (Main and sub raw materials: 3.77 million tons) Water consumption 213 million tons Pharmaceuticals/ specialty chemicals/ packaging 9 Logistics/services/ offices 3 Pharmaceuticals/ specialty chemicals/ packaging 4 Logistics/services/ offices 2 Pharmaceuticals/ specialty chemicals/ packaging 10 Food 11 32,200 TJ Input of energy Fermentation 77 Food million tons Fermentation 81 Main and sub raw materials consumption Food million tons Water consumption Fermentation 78 * TJ: Terajoule, T (tera) = OUTPUT Substance emissions and environmental impact Product 1.77 million tons Waste disposal (external disposal) 47 thousand tons Input & output relating to the Food Recycling Law Scope of reporting: Household food products produced by 21 companies and 45 business sites in Japan, including Ajinomoto Co., Inc., Ajinomoto Frozen Foods Co., Inc., Knorr Foods group companies, Ajinomoto Packaging Co., Inc., AJINOMOMOTO HEALTHY SUPPLY, INC., Ajinomoto Pharma Co., Ltd., and other group companies in Japan (for product content excluding containers and packaging materials). Production Kitchen waste generated during the process 19,741 tons Waste covered by Food Recycling Law Recycling ratio of food-related waste 98.3 Resource recovery 21,388 tons 580 Unsold products 2,018 tons 21,759 tons External disposal 371 tons By-products / waste and emissions Pharmaceuticals/ specialty chemicals/packaging 2 Food 3 Pharmaceuticals/ specialty chemicals/ packaging 8 Food million tons Release to air 2.3 million tons- CO2 CO2 emissions volume Logistics/services/ offices 1 Fermentation 94 By-products / waste and emissions volume Logistics/services/ offices 2 Fermentation 78 Food 12 Co-products/ resource recovery million tons Resource recovery ratio 97.9 Discharged water Pharmaceuticals/ specialty chemicals/ packaging million tons Discharged water volume Fermentation 80 13

15 Environmental Management Environmental Management System (EMS) Environmental Management System (EMS) The Ajinomoto Group established and is implementing an ISO compliant environmental management system to drive its environmental initiatives forward. In accordance with this system, the group is systematically moving ahead with environmental audits, environmental assessments, environmental performance data aggregation, and environmental education, in addition to pushing the acquisition of ISO certification at its business sites. EMS Promotion System Following the Ajinomoto Group Basic Environmental Policies and Environmental Regulations, the group established and is implementing a group-wide* EMS compliant with ISO standards in order to drive its environmental initiatives forward. The Ajinomoto Group s Environmental Regulations in particular define the group EMS s organizational structure and the responsibilities of each organization, important environmental management matters that must be covered, and the rules for operating the system. EMS organization chart Management Committee Environmental Committee Chairperson: Director responsible for environmental management (Corporate Senior Vice President and General Manager of CSR Division) Members: Chief Environmental Administrators Secretariat: Environment Department Meeting frequency: Twice a year or more [Corporate] Environment Dept. General Affairs & Risk Management Dept. Corporate Planning Dept. Production Management Dept. Food Products Company Amino Acids Company Pharmaceutical Company China Business Strategy & Planning Dept. Ajinomoto Frozen Foods Co., Inc. AJINOMOTO BAKERY CO., LTD. AJINOMOTO LOGISTICS CORPORATION Consolidated subsidiaries and others Unit organization Consolidated subsidiaries and others Unit organization Consolidated subsidiaries and others Unit organization Consolidated subsidiaries and others Unit organization Consolidated subsidiaries, business sites, plants, etc. Consolidated subsidiaries, business sites, plants, etc. Consolidated subsidiaries, business sites, plants, etc. Consolidated subsidiaries, business sites, etc. Note: : Chief Environmental Administrators : Environmental Administrators As of August 1st, 2006 The Ajinomoto Group s Environmental Committee, which meets twice a year (in May and November), is responsible for decision-making for the group regarding environmental initiatives. The committee is chaired by the director responsible for environmental management (Corporate Senior Vice President and CSR Division General Manager of Ajinomoto Co., Inc.) and composed of managers from the Corporate Division, which functions as the group s headquarters, and Chief Environmental Administrators from each internal company and spin-off company who oversee their respective companies businesses. The Chief Environmental Administrators at internal and spin-off companies come from the top management levels. They draw up the group s environmental strategy and medium and long-term plans, establish yearly environmental targets, and assess the group s environmental performance. The Environmental Committee also checks the environmental conservation plans and measures established by each internal company, as well as their performance. Afterward, the committee submits reports to the Ajinomoto Group s Management Committee and Board of Directors for approval. EMS operation conceptual diagram Act Plan Ajinomoto Group strategy and policies Check Group EMS operation Do Act Execution of the group policy Internal and spin-off company EMS operation After the Environmental Committee makes a decision for the group, each internal and spin-off company is responsible for executing the group policy. Each of these companies has established and is operating their own systems for promoting their EMS based on the group s EMS promotion system. EMS Promotion Secretariat Meetings, in which the Environment Department and the EMS offices of each internal company and spin-off company participate, have been held every month since May 2003 to promote environment-conscious management group-wide. The meetings encourage further entrenchment of the group s EMS through practical discussions about the implementation of the group s EMS, and exchange of information among the different internal and spin-off companies. ISO Certification Internal and spin-off company specific issues The Ajinomoto Group needs to undertake unified group-wide environmental activities, since the group is developing business on a worldwide scale across a range of fields, including amino acids, food products, and pharmaceuticals. Accordingly, a total of 121 business sites, including all organizations of Ajinomoto Co., Inc., as well as consolidated subsidiaries engaged in manufacturing, packaging, logistics, and engineering, worked toward the goal of acquiring ISO certification. As of the end of March 2006, a total of 95 sites have acquired certifica- Plan Check Act Plan Check * Scope of the Ajinomoto Group Environmental Management System: Ajinomoto Co., Inc., its consolidated subsidiaries, and its affiliates for which environmental management is an important priority. Do 14

16 Environmental Management Environmental Management System (EMS) tion: all 23 organizations (plants, laboratories, headquarters, and branch offices) of Ajinomoto Co., Inc., and 72 subsidiaries/affiliates both in and outside Japan. In April 2003, Ajinomoto Co., Inc., which is the center of the Ajinomoto Group, acquired collective ISO certification for the headquarters and branch offices (23 sites across Japan). Acquisition of certification by the company s headquarters was a vital and significant step in pushing the group s environmental management system forward. With the headquarters certification, in addition to the previously certified manufacturing and R&D divisions in Japan, all organizations of Ajinomoto Co., Inc. in Japan have completed the acquisition of ISO certification. In fiscal 2005, 30 more sites within the entire group acquired certification, completing the certification of all sites targeted for certification under the scope of EMS coverage of the Corporate Division, Pharmaceutical Company, and AJINOMOTO LOGISTICS CORPORATION including their consolidated subsidiaries. Additionally, during fiscal 2005 the group s certified sites completed updating their systems to comply with the new ISO standards, which were revised in November Moreover, with a view toward creating a more effective management system, the Ajinomoto Group pushed forward with the development of an integrated quality, environmental, and safety management system in Japan, Thailand, Brazil, France, and other places. Also, Ajinomoto Frozen Foods Co., Ltd. and AJINOMOTO LOGISTICS CORPORATION made headway toward acquiring collective certification to replace the existing individual certifications of each site. In fiscal 2006, the Ajinomoto Group plans to continue its certification efforts and bring its total number of ISO certified sites up to 115. The group is also considering expanding the scope of certification to include offices and sales sites. Click here for a list of sites that have acquired ISO certification. Progress toward acquisition of ISO certification Ajinomoto Co., Inc., consolidated subsidiaries in/outside Japan ISO14001 certification schedule Accumulated number of certified sites Number of sites results prospects prospects Ajinomoto Co., Inc. Consolidated subsidiaries in Japan Consolidated subsidiaries outside Japan Total Specific Requirements for EMS Implementation The Ajinomoto Group established Environmental Regulations in order to promote environment-conscious management. These include specific systems and initiatives that are essential elements in the implementation of the group s EMS, including environmental performance data aggregation, environmental assessments, environmental audits, and environmental education. Each system has been carefully established and is being systematically put into practice. See the following sections for details: Fiscal 2005 Goals and Results, Environmental Risk Management, Environmental Audits, and Environmental Education. Systems and initiatives for implementing the Ajinomoto Group s EMS Ajinomoto Group Environmental Philosophy and Basic Environmental Policies Environmental Regulations Conformity with ISO standards Internal audits Environmental assessments Environmental performance data aggregation Environmental education, etc. (Sites) Consolidated subsidiaries outside Japan Consolidated subsidiaries in Japan Ajinomoto Co., Inc Target (FY) 15

17 Environmental Management Environmental Risk Management Environmental Risk Management The Ajinomoto Group is committed to environmental risk management. The group has built a structure for preventing the occurrence of environmental accidents and trouble. Moreover, in the event that environmental trouble does happen to occur, the group rapidly takes necessary measures and works to prevent reoccurrences. The Ajinomoto Group conducts environmental assessments whenever it develops new businesses or launches new products. In this way, the group attempts to minimize environmental risks by assessing beforehand any possible effects on the environment. In addition, the group thoroughly manages equipment and chemical substances in line with applicable laws to prevent the occurrence of environmental accidents and trouble. The group built an emergency response system and conducts response drills in preparation for the possible occurrence of trouble. The Ajinomoto Group is committed to communicating with the public about environmental risks. The group uses its environmental reports to disclose information about environmental trouble that does happen to occur, and provides plant tours to local residents. See the Proper Management of Chemical Substances section for details. sharply from 102 in fiscal 2004 to 227 in fiscal Furthermore, in June 2005, the Ajinomoto Group added to its environmental assessment checklist for product launches, revisions, and discontinuations, thereby strengthening the requirements for investigating environmental friendliness that must be conducted during product development. The Ajinomoto Group will continue to conduct environmental assessments that cover the entire process from procurement of raw materials through use of its products by consumers. In addition to reducing environmental risk, environmental assessments help to raise the environmental awareness of employees who are engaged in business planning and product development. Environmental assessment items Seven types of typical pollution Air, water, noise, odor, soil pollution, vibration, and ground subsidence Environmental Assessments Waste disposal Global environmental issues Proper waste disposal, responsibility of waste generator, etc. Global warming, biodiversity preservation, acid rain, etc. Possible effects on the environment can be evaluated using environmental assessments when the Ajinomoto Group launches new products, starts new businesses, and changes or stops using its conventional raw materials or production processes. As such, the group sees these times as very important opportunities to minimize environmental impact and risk. Specifically, departments responsible for proposals that presumably may have an effect on the environment perform environmental assessments. The Environment Department reviews the results before final approval. Environmental assessments fulfill a risk management function by reducing impact through assessment of environmental effects and verification of the status of compliance with environmental laws. In addition, they also serve to direct an organization toward making more proactive environmental contributions, such as switching over to environmentally friendly business models, products, and manufacturing processes. Emphasizing the importance of this point, in April 2005 the Ajinomoto Group revised its proposal regulations regarding environmental assessments. Before, only important matters relating to the environment were subject to investigation by the Environment Department when proposals were submitted. Now, all matters relating to the environment must be investigated by the Environment Department. Consequently, the number of environmental assessments for proposals increased Management of hazardous substances Creation of a recycling-oriented society Effects of buildings Purchase and sale of real estate New science and technology Corporate social responsibility Product development Substances subject to PRTR, asbestos, new chemical substances, etc. 3Rs, resource and energy conservation, control of waste generation, etc. Right to light, radio disturbance, etc. Soil pollution, accountability, guarantee against defects, etc. Chemical and microbial contamination, etc. Action guidelines, information disclosure, communication with the community, etc. Eco-design, raw materials procurement, logistics, life cycle assessment, etc. Preventing the Occurrence of Environmental Trouble The Ajinomoto Group strives to minimize serious safety and environmental risks using risk management practices. 16

18 Environmental Management Environmental Risk Management For example, manufacturing sites for fermentation-related products store ammonia, which is needed in the production of amino acids. Since ammonia leakage can have serious effects on the environment, the Ajinomoto Group is very thorough in its management of facilities and handling of ammonia, in light of applicable laws. In preparation for potential emergencies, it has installed automatic shutdown systems and equipment to prevent ammonia from leaking and spreading. The group also conducts onsite emergency response drills, and has established a system to communicate and report emergency information to neighborhood residents and administrative agencies. Moreover, the group is working to develop joint disaster prevention systems with local communities in urban districts by opening its operation sites to neighborhood residents. Plants outside Japan, such as those belonging to Ajinomoto Co., (Thailand) Ltd., and Ajinomoto Vietnam Co., Ltd., conduct plant tours for community residents. The Kawasaki Administration & Coordination Office and other plants of Ajinomoto Co., Inc. have adopted environmental monitoring systems in which community residents notify the company immediately upon experiencing something unusual, such as a strange odor. In addition to preventing environmental trouble, the group also works on environmental risk communication with local residents. Neighborhood residents tour a plant belonging to Ajinomoto Vietnam Co., Ltd. See the Proper Management of Chemical Substances section for details. See the Communication with the Community section for details on the environmental monitoring system. Environmental Accidents, Violations, and Complaints The Ajinomoto Group has established a system that enables the group to promptly take necessary steps to address violations of environmental laws and environmental accidents and trouble, should any happen to arise. The group investigates the causes of problems and hiyari, or close calls, * in order to prevent recurrence. Violations of environmental laws and regulations None of the environmental accidents or trouble occurring in fiscal 2005 mentioned above resulted in serious violations of environmental laws or prosecutions. The Ajinomoto Group did, however, receive administrative guidance and requests from local authorities to make improvements in two cases in Japan and seven cases outside Japan. These included an incident where a plant in Japan temporarily exceeded the regulation value for soot contained in gas emitted from incinerators, and an incident where a plant outside Japan exceeded a standard value for wastewater. The group immediately implemented corrective actions in each case and completed the necessary improvements. Number of minor law violations, administrative guidance notices, and requests for improvements (FY2005) Japan Outside Japan Air pollution 1 1 Water pollution 1 3 Waste 1 Other 2 Total 2 Complaints In fiscal 2005, the Ajinomoto Group received 39 complaints (25 in Japan and 14 outside Japan) directed mainly to the group s manufacturing sites from neighborhood residents. The majority of the complaints concerned noise and odors. The group investigated the source of the activities at issue, provided explanations immediately, and took necessary measures in each case. Number of complaints (FY2005) Japan Outside Japan Air pollution 1 Noise 15 1 Odor 7 9 Other 3 3 Total 25 * Close calls (hiyari): For example, an incident in which a spill of processing solution from a storage tank is prevented from spreading outside by having in place a secondary containment facility or emergency shutdown system. Environmental accidents and problems In fiscal 2005, there were a total of 16 environmental accidents or trouble within the Ajinomoto Group in and outside Japan. None, however, had a serious effect on the environment. 17

19 Environmental Management Environmental Audits Environmental Audits The Plan, Do, Check, Act (PDCA) cycle is indispensable in driving environment-conscious management. The Ajinomoto Group sees environmental audits, the C (check) part of the cycle, as particularly important, and has therefore built a multi-tiered auditing system for monitoring ourselves both internally and externally. Environmental audits play an important role in driving environment-conscious management steadily forward by monitoring the status of progress toward achieving goals and accomplishing plans. The Ajinomoto Group places importance on environmental audits to continuously improve its environmental management system and efficiently develop environment-conscious management. These environmental audits include third party audits and group environmental audits, and revolve around internal environmental audits performed by internal auditors in accordance with ISO standards. Audits are used to monitor the implementation of the group s Basic Environmental Policies and the accomplishment of annual targets at each site. Types of environmental audits Operational sites that have acquired ISO certification Ajinomoto Co., Inc. and its subsidiaries and operational sites primarily related to manufacturing or logistics Subsidiaries and operational sites not included in the scope of group environmental audits Internal Environmental Audits Based on ISO Internal environmental audits are based on a requirement of the ISO standards. They are conducted roughly once every six months to one year at group companies and operational sites that have acquired ISO certification, and at those that are preparing to acquire certification. Internal auditor training Internal environmental audits External (third party) audits Group environmental audits Audits by the Internal Auditing Dept. To maintain and strengthen its environmental management system, the Ajinomoto Group continuously trains internal auditors. In fiscal 2005, the group held 19 internal auditor training courses, which were attended by as many as 500 employees. This brought the total group-wide number of internal auditors in Japan to about 1,200. In addition, as a follow-up for these internal auditors, the group encouraged familiarity with the 2004 version of ISO The group also offered new courses designed to upgrade its internal environmental audits. These courses were held 11 times and attended by approximately 300 people. Group Environmental Audits Group Environmental Audits are performed by qualified auditors from the Environment Department of Ajinomoto Co., Inc. on Ajinomoto Co., Inc. and its subsidiaries in and outside Japan that are mainly engaged in production and logistics businesses. During fiscal 2005, environmental audits were conducted at 32 sites in and outside Japan in an effort to upgrade our level of environmental management. Results are reported to top management and the Environmental Committee. These audits need to be conducted in conjunction with internal environmental audits based on ISO In addition, we must now address the challenge of how to audit the new business segments that come with business expansion, as well as our non-production business activities outside Japan. Achievements of group environmental audits Year of Number of audited operational sites implementation Japan Outside Japan Total FY FY FY FY FY Note: These audits were directly performed by the Environment Dept. Since fiscal 2003, other than these, the Internal Auditing Dept. has conducted audits on environmental issues. Key points of environmental audits for FY Thorough compliance with environmental audit standards by using a self-assessment sheet* 2. Thorough understanding of Group targets by employees 3. Thorough compliance with applicable laws and risk management 4. Promotion of measures to reduce environmental impact * Self-assessment sheet We make it a practice to distribute to each operational site self-assessment sheets that cover audit items so that the auditees can check them in advance and the audit criteria can be thoroughly fulfilled. Items requiring improvement indicated in FY2005 (excerpts) Some business sites are not performing total environmental management. Build a framework for running through the PDCA cycle into the activities undertaken for ISO certification. Enhance risk management of waste treatment in service, logistics and business areas, and strengthen measures to reduce environmental impact, including energy conservation. Proactively reduce environmental impact in accordance with the Ajinomoto Group Zero Emissions Plan. 18

20 Environmental Management Environmental Audits Environmental Audits Performed by the Internal Auditing Department The Internal Auditing Department of the Ajinomoto Co., Inc. audits the overall business of the Ajinomoto Group. Since fiscal 2003, it has included environmental items in those audit criteria. It also performs environment-related audits of operational sites that are not subject to Group Environmental Audits. Cross-Organizational Internal Auditors To effectively operate the ISO internal auditing system, the Ajinomoto Group encourages its internal auditors to work at several different business sites, and not be limited to their own working places. We introduced this practice in the belief that internal auditors who are familiar with actual services will best be able to point things out and request actual performance results. Ajinomoto Co., Inc. s branch offices make use of the merits of multi-site integrated certification by having internal auditors from branch offices in Japan participate in internal audits of other branch offices, along with the EMS staff of the Food Products Company. The benefit of this practice is that it enables internal auditors to deepen their understanding of good initiatives and rapidly share challenges by observing other branches activities in detail. We are planning to expand the exchange of internal auditors among group companies and plants located outside Japan. 19

21 Environmental Management Environmental Education Environmental Education The Ajinomoto Group emphasizes environmental education as a means of contributing to the creation of a sustainable society. The group provides structured education and awareness-development anticipating that each of the group s nearly 30,000 employees can leverage the gained experience to take on specific actions as a global citizen as well as a member of the group. The Ajinomoto Group sees the education and awarenessdevelopment of group employees regarding sustainability and environment-conscious management as an extremely important factor in contributing to the creation of a sustainable society. The group provides structured education and awarenessdevelopment through videos and training sessions with the aim of getting each of the group s nearly 30,000 employees to understand the importance of sustainability to the global environment, society, and the group s business activities. The contents are highly varied, from general awareness education as global citizens to specialized environmental education needed in different job types, including environmental management, wastewater processing, and resource recycling, as well as emergency response training in preparation for the occurrence of environmental trouble. The Ajinomoto Group takes every opportunity to aggressively advance its educational initiatives so that its employees can leverage their experiences to perform specific activities for innovating the group s own business activities to help create a sustainable society. Environmental Education Framework In line with the environmental education aims and plans established under the regulations of its environmental management system (EMS), the Ajinomoto Group provides structured and systematic environmental education and training according to the characteristics of each organization and each employee s responsibilities, duties, and work. Structure and example content of environmental education All employees Top and other levels of management Ajinomoto Group / Ajinomoto Co., Inc. (Corporate Environment Department, etc.) Education for new recruits Yearly educational videos Internal and spin-off companies Awareness education Education for new recruits Management level training Education for newly appointed managers Education for those who have been promoted or changed positions Education for expatriate Japanese staff Training for international group managers Offices, plants, unit organizations Education for new recruits The contents of the group s environmental education can be divided into two types: awareness education as global citizens and group employees, and specialized education and training designed to increase employees competence in their work. Unified Group Environmental Education Awareness education for all employees The Ajinomoto Group has a global operational presence in 23 countries and regions. Its nearly 30,000 employees are involved in a wide range of work. It is important that each of these employees transcend differences in nationality, ethnicity, sex, religion, and other identifiers, and work on the universal challenge of creating a sustainable society. At the same time, the group sees that it is very important for employees to correctly understand what the group is trying to do toward achieving that end. As a first step, the Ajinomoto Group is working to ensure all employees understand the group s commitment to aggressively contributing to sustainability through its business activities, as set out in the Ajinomoto Group Environmental Philosophy and Basic Policies, the Ajinomoto Group Zero Emissions environmental vision, and the group s mid-to-long term and short-term environmental conservation action plans. Every year the Ajinomoto Group produces an environmental education video, which it distributes to business sites worldwide as a common awareness education tool for employees around the globe. The fiscal 2005 environmental education video was produced with the aim of increasing understanding of revisions made to ISO 14001, the basic EMS tool, as well as to highlight details for accelerating the fulfillment of the Ajinomoto Group Zero Emissions Action Plan. In addition, daily communication in connection with the operation of the group s EMS serves as a form of environmental education. Staff in charge of EMS work Staff in charge of other specialized functions Specialized education and training Training for environmental managers and staff Internal auditor training course and follow-up seminar Environmental law study sessions Practical education on environmental assessments Practical education on proper waste management, etc. Acquisition of specialized knowledge and qualifications in environmental conservation Skill improvement training, etc. Environmental education goals and plans Environmental education for new recruits. Scenes from the fiscal 2006 environmental education video. 20

22 Environmental Management Environmental Education Environmental education for top and other levels of management The Ajinomoto Group sees the roles played by top and other levels of management in driving environment-conscious, groupwide management forward as particularly important, since the Ajinomoto Group is developing diversified businesses and has many bases in and outside Japan. Accordingly, the director responsible for environmental management and staff from the Environment Department act as instructors who provide environmental education at various meetings attended by top management at the group and group companies. In addition, in conjunction with annual periodic personnel transfers, the Ajinomoto Group provides education about their new responsibilities and roles to newly appointed managers, and to those who have been promoted or changed positions at Ajinomoto Co., Inc., which is at the core of the group. The content of that education goes beyond merely providing an understanding of one s roles as a manager; it emphasizes an increase in practical competence regarding environmental management as a manager. In like manner, the Ajinomoto Group provides periodic education to group expatriate executives assigned at companies outside Japan. This education includes practical training in which the participants make judgments about hypothetical examples of specific environmental problems. Moreover, the group even provides education about environment-conscious management at executive management training sessions where executives from group companies world-wide gather to learn about the group s management. See the Environmental Audits section for information about the fostering of internal environmental auditors. See the Environmental Risk Management section for information about environmental assessments. Specialized education and training on environmental conservation at offices and plants A particular kind of specialized education and training is needed for employees who work at offices and plants. The Ajinomoto Group provides specialized education according to the different job descriptions of employees who are engaged in environmental conservation work, such as waste management and running environmental conservation equipment. The group is working systematically to ensure that its employees acquire more specialized knowledge and improve their skills in addition to obtaining the qualifications required by law. Response training in a hypothetical emergency situation at a plant. Environmental Education According to Job Description Specialized education for personnel in charge of EMS-related work The Ajinomoto Group provides practical training to staff members who are in charge of EMS-related work the people who are at the core of operating the EMS at each organization so that they acquire the specific knowledge and competence needed to fully carry out their functions reliably. The group sees the education of internal environmental auditors and the environmental managers who are appointed at each organization as particularly important. Moreover, the Ajinomoto Group conducts environmental assessments when developing new businesses and launching new products. The group is aiming to reduce environmental impact, and make its business, products, and manufacturing processes environmentally friendly that is, to make all its corporate activities environmentally friendly by assessing at the planning stage any possible impact on the environment. The Ajinomoto Group places particular emphasis on the environmental education of personnel in departments who are responsible for planning so that the results of environmental assessments can be put into practice. 21

23 Environmental Management Greening of the Supply Chain Greening of the Supply Chain The Ajinomoto Group s business activities are dependent upon a wide range of raw materials and services provided by a number of suppliers and other partnership members all along the supply chain. In addition to properly fulfilling its own role and responsibilities, the Ajinomoto Group is dedicated to deepening its coordination with its business partners in an effort to push the greening of the entire supply chain forward. In line with the Ajinomoto Group Environmental Philosophy and Basic Environmental Policies, the Ajinomoto Group strives for environment-conscious management that advances environmental friendliness in all facets of its business activities. It is important that environmental friendliness extend beyond the product manufacturing stage and cover the entire supply chain from the purchasing of raw materials and the procurement of goods and services, such as the subcontracted manufacture of products, to the marketing and distribution of finished products. Specifically, the Ajinomoto Group follows the practice of green procurement, or the priority selection of environmentally friendly items, when purchasing services and indirect materials such as office supplies, laboratory instruments, and other equipment. In addition, the company asks that its business partners understand the Ajinomoto Group Environmental Philosophy when signing contracts. It also encourages environmental management on the part of subcontractors by requiring that they allow periodic environmental inspections by the Ajinomoto Group after entering into a contract. In these ways, the group is making efforts to green the entire supply chain. In addition to properly fulfilling its own role and responsibilities, the Ajinomoto Group is dedicated to deepening its coordination with its many partners who support the group s supply chain in a further effort to push the greening of the entire supply chain forward. Green Procurement From the manufacturing of products to their marketing, the Ajinomoto Group s business activities are dependent from first to last upon a variety of raw materials and services provided by suppliers and other business partners all along the supply chain. The group s approach to the procurement of these goods and services is an important factor in characterizing the group s economic activities. Moreover, the company sees the importance of calling for direct and indirect cooperation from business partners while making a decision on specifications and paying the appropriate price. Accordingly, the Ajinomoto Group s Environmental Regulations stipulate that the group shall purchase environmentally friendly raw materials, indirect materials, and other resources as part of the environmental conservation activities that the group should undertake. The group is pushing specific efforts toward this end forward with the employment of the Ajinomoto Group Green Procurement Guidelines that were established in June Furthermore, the Ajinomoto Group Basic Purchasing Policy, which was established in May 2006, clearly specifies that the group shall practice CSR in its purchasing transactions and demand the cooperation of business partners. In this way, the group has strengthened the idea of corporate social responsibility in purchasing, including compliance, the ensuring of quality and safety in raw and other materials, green procurement, and the protection of human rights. See the Ajinomoto Group CSR Report 2006 Communicating with Business Partners section for relevant information. Ajinomoto Group Green Procurement Guidelines In June 2004, the Ajinomoto Group established the Ajinomoto Group Green Procurement Guidelines to drive concrete environmentally friendly procurement activities forward. The guidelines, which apply to the Ajinomoto Group both in and outside Japan, are jointly supervised by the Ajinomoto Co., Inc. Purchasing Department and Environment Department. The guidelines indicate three requirements for procurement activities, covering the purchasing of raw materials, indirect materials, and other resources, as well as the contracting of services. The guidelines also require plans for green procurement initiatives and specific targets to be incorporated into medium and long-term environmental conservation plans and other short-term plans. Additionally, group companies outside Japan are required to practice green procurement based on the guidelines, while considering each country s laws, regulations, and country conditions. Summary of the three requirements under the Ajinomoto Group Green Procurement Guidelines 1. Raw materials and other resources shall be procured only after confirming that they pose no social problems, including effects on the environment, and that they are in conformity with applicable laws and regulations. (Note) The Ajinomoto Group Green Procurement Guidelines include an attached table that lists examples of substances that should be given special attention, including substances whose use or inclusion has been banned by relevant law and ordinances, controlled substances, and certain packaging materials that have been banned as a general principle under its own standards. 2. The establishment of an environmental management system (EMS) shall be included among the factors influencing the selection of business partners. Main business partners that have not established an EMS shall be requested to do so. 3. The Green Purchasing Law shall be respected. Priority shall be given to the procurement of goods specified in the Green Purchasing Law, as the proper use of budgets allows. 22

24 Environmental Management Greening of the Supply Chain Specific initiatives Currently, the Ajinomoto Group is continuing to explain the Ajinomoto Group Green Procurement Guidelines to its suppliers and business partners according to the characteristics of each business. As for requesting the establishment of an EMS, the group is working to provide more aggressive support in some instances. In the area of logistics, for example, more than 80% of the AJINOMOTO LOGISTICS CORPORATION Group s deliveries are made in vehicles belonging to delivery companies outside the group. Accordingly, the group is focusing its support on targets it has set for the establishment of EMSs at these delivery subcontractors. See the Logistics-related Efforts section for details about support for the establishment of EMSs in the logistics area. Purchasing of eco goods Each organization within Ajinomoto Co., Inc. uses the company s intranet-based indirect materials purchasing system to buy indirect materials such as office stationary, office furnishing and fixtures, laboratory equipment, and consumable supplies used in the manufacturing process. Since fiscal 2005, it has been possible to monitor the purchasing of eco goods using this system. In fiscal 2005, purchases of eco goods accounted for 64.1% of the value of all purchases of indirect materials (about 13,500 items for the year), an increase of about five points over the previous fiscal year. This increase is thought to be the result of employee education regarding green purchasing, and an improvement in the indirect materials purchasing system that places eco goods at the top of the catalogue. The company has set a fiscal 2006 achievement target of 80% for the entire company. Each organization is systematically working toward this goal. Eco goods registered in the indirect materials purchasing system: Eco Mark products (Japan Environment Association) Green Mark products (Paper Recycling Promotion Center) Products listed on the GPN-DB (Green Purchasing Network) Non-wood Paper Mark products (NPO Non-wood Paper Promotion Association) Recycled Milk Carton Mark products (Japan Milk Carton Recycling Association) Products in conformity with the Green Purchasing Law Environmentally friendly packaging material for raw materials Using environmental friendly packaging materials for transporting raw materials is one environmental initiative that the Ajinomoto Group is undertaking in its procurement of raw materials. Specifically, the group has simplified packaging by eliminating exterior cardboard boxes and using only the interior packages. It has adopted exclusive-use containers designed for repeated use, and also switched to larger containers. These measures have led to decreased environmental impact during transportation and less waste. The Ajinomoto Group is advancing these efforts with the cooperation of raw material suppliers and transportation companies. Returnable container for liquids (exclusive-use container) Simplification of raw material packaging Environmental management of subcontracted manufacturers Among the group s business partners along the supply chain, subcontractors that manufacture Ajinomoto brand products have a particularly deep relationship with the Ajinomoto Group. Society expects them to undertake environmental initiatives corresponding to those carried out by the Ajinomoto Group. Accordingly, the Ajinomoto Group places priority on strengthening environmental management at subcontracted manufacturers in its efforts to promote greening of the entire supply chain. Naturally, this effort helps the group protect the trust that customers place in the Ajinomoto brand. Environmental consciousness incorporated into contract conditions When entering into consignment agreements with subcontracted manufacturers, the Ajinomoto Group explains its environmental approach, including its Environmental Philosophy and Basic Environmental Policies, and asks for their understanding and cooperation. Ajinomoto Co., Inc. clearly defines the responsibilities and roles of the outsourcer and the subcontractor in terms of specific environmental management items. Whenever it commissions a new subcontracted manufacturing job or changes a subcontracted job, the company conducts an environmental assessment and verifies prior to the start of manufacturing whether the subcontractor properly takes environmental considerations into account. Moreover, after commissioning a subcontracted manufacturing job, the group conducts daily management using performance reports from subcontractors and other tools. For important management items, staff from the Ajinomoto Group visit subcontracted manufacturers and perform periodic inspections. For example, between fiscal 2003 and fiscal 2005, environmental staff members from Ajinomoto Frozen Foods Co., Inc. visited about 30 subcontracted manufacturers across the entire length of Japan from Hokkaido to Kyushu to perform environmental inspections. The on-site inspections focused on the status of the operation of equipment for the proper treatment and management of waste and wastewater, which are particularly important matters in the food processing industry. Following the inspections, Ajinomoto 23

25 Environmental Management Greening of the Supply Chain Frozen Foods Co., Inc. shared information about needed improvements by providing reports to subcontractors, and completed its verification of conditions at subcontractors by having them all submit improvement reports. In fiscal 2006, the group will continue environmental inspections in conjunction with quality inspections. See the Environmental Risk Management section for details about environmental assessments. Environmentally Friendly Distribution and Marketing In cooperation with distributors such as retailers and wholesalers, Ajinomoto Co., Inc. is advancing initiatives to reduce returns of household products and to reduce promotional materials. Initiatives to reduce returns In fiscal 2002, the Ajinomoto Co., Inc. foods business in Japan incurred 1.3 billion in returned dry household products excluding gifts, or a return rate of 1.05%. Most of these products were disposed of as waste. These types of product returns are a wasteful expense for consumers, society, and companies, and have a significant environmental impact. Accordingly, in October 2002 the company launched a Returned Goods Reduction Project, and has been working to reduce returns and their associated logistics costs and environmental impact. With the understanding and cooperation of distributors, the company is aiming to achieve a return rate of 0.5%. Specifically, the company provided education to employees using an educational video on reducing waste products that shows the actual situation of waste disposal, and by holding workshops focused on how to reduce returned goods. The company also undertook awareness-building activities such as implementing tours of waste disposal sites to gain the cooperation of business partners. It also revised its supply and demand system and procedure for making returns. In fiscal 2005, these efforts resulted in significant improvement, achieving 670 million worth of returned dry household goods, a return rate of 0.5%. Proper Management of Industrial Waste Society s demand for the legal and proper disposal of waste and thorough recycling is becoming increasingly stringent. The Ajinomoto Group in Japan commissions waste treatment companies to handle the disposal and recycling of waste generated by the group s business activities. As the sources of the waste, each Ajinomoto group company must take responsibility for ensuring that the commissioned waste treatment companies properly dispose of and recycle their own waste. Accordingly, the group manages the disposal of waste by requiring operational performance reports from, and by conducting on-site inspections at, waste treatment companies. In addition, the Ajinomoto Group is working to reduce risks and promote resource recovery by commissioning work to outstanding waste treatment companies. To that end, the group uses a checklist for evaluating waste treatment companies and operates an intranet homepage concerning industrial waste and recycling management in order to coordinate and share information among group companies. The Ajinomoto Group s homepage for industrial waste and recycling management Initiatives to reduce promotional materials Promotional materials used as displays in the storefronts of volume sellers become waste after they are used. Accordingly, Ajinomoto Co., Inc. incorporates efforts to reduce the amount of materials that go to final disposal when making promotional materials, while improving planning in order to boost efficiency. These efforts include increasing accuracy in estimating the numbers needed or adopting a system whereby only the necessary amount is made each time. 24

26 Various Environmental Initiatives Biodiversity Relationship Biodiversity Relationship Biodiversity is a basic factor that supports the global environment. The Ajinomoto Group is making an effort to understand the relationship between its business and biodiversity and is working to conserve biodiversity, in part to secure a sustainable supply of food resources. The ecosystems that form the global environment are sustained by biodiversity diverse gene pools, diverse populations of species, and the varied roles and the reciprocal and/or interactive roles that they all play. The Ajinomoto Group is committed to providing a sustainable supply of food from nature s bounty. As such, the group uses business environmental assessments to reduce its impact on biodiversity, and is looking for ways to actively contribute to the conservation of biodiversity through its business. The group is moving forward with a variety of efforts, including the conservation of natural ecosystems through the establishment of a sanctuary on companyowned land. Although the Ajinomoto Group does not currently undertake group-wide initiatives designed with the conservation of biodiversity as the main objective, the group does plan to make an effort to pay more attention to the relationship between its business and biodiversity. *1. Certified forest paper: FSC certified paper and other paper made from certified timber from properly managed forests. This paper is not made from illegally felled timber or timber from forests with a high preservation value. *2. Sponsoring NGOs: Greenpeace Japan, FoE Japan, WWF Japan, Global Environmental Forum, and Japan Tropical Forest Action Network (JATAN). To Secure Sustainable Supplies of Food Resources Relationship between the Ajinomoto Group s Business and Biodiversity The Ajinomoto Group does not engage in business activities that pose a direct and significant threat to biodiversity, such as large-scale land development. Nevertheless, as a company that uses agricultural, livestock, marine and water resources as raw materials for production, as well as forest resources for containers and packaging, and as a company that uses biotechnology and genetic resources in its technology development, the group recognizes that its business activities have a strong linkage to biodiversity. The conservation of biodiversity is the most basic and important effort for both maintaining and conserving the global environment, and sustaining and developing the group s business, which is reliant upon nature s bounty (environmental service). In light of this awareness, the Ajinomoto Group pays attention to the relationship between its business and biodiversity, and pays due consideration to biodiversity in many contexts. For example, the group verifies its effects on the local environment, including biodiversity, through the environmental assessments that it performs when considering the procurement of agricultural, livestock and marine resources for the development of new products, and when considering the construction of a plant at a new location. In addition, in line with its commitment to the sustainable use of forest resources, Ajinomoto Co., Inc. has included certified forest paper* 1 in the procurement list for paper in its Green Procurement Guidelines. In fiscal 2005, the company participated in the Conference on Ecologically Ethical Paper Product Procurement, which was hosted by five environmental NGOs,* 2 and thereby deepened its knowledge of this issue. The Ajinomoto Group CSR Vision, which was established in September 2005, has five specific achievements to be accomplished by their CSR by One of those achievements for the group is to have contributed to a sustainable global environment by supporting agriculture, fisheries, and livestock farming, and establishing a recycle-based business model that minimizes the use of exhaustible resources and energy and the production of waste, with the goal of securing safe and sustainable food resources. The Ajinomoto Group is working to identify specific issues including those relating to biodiversity that must be addressed in order to realize this vision. See the Ajinomoto Group CSR Report 2006 for details on the Ajinomoto Group CSR Vision. See the Effective Utilization of By-products page for details on the Ajinomoto Group s recycling-oriented business model. Initiative to Protect Wild Animals: The Ajinomoto Tokai Bird Sanctuary Since 2002, Ajinomoto Co., Inc. s Tokai Plant has been maintaining the nearby Oike pond and its surrounding area (about 5,000 square meters) located on the plant s grounds as the Ajinomoto Tokai Bird Sanctuary. It conserves a natural environment along the water s edge, which is rarely seen in the industrial area surrounding the plant. View of the bird sanctuary 25

27 Various Environmental Initiatives Biodiversity Relationship The bird sanctuary boasts a high population density of wild birds, and serves as a wintering and relay ground for ducks and other migratory birds. Rare insects, such as the chotombo ( butterfly dragonfly ) (Rhyothemis fuliginosa) reproduce here. Native fish live without the intrusion of foreign fish species. In this way, the bird sanctuary is contributing to the preservation of biodiversity. The sanctuary has received tremendous praise from many people, and won the Award for Wildlife Protection (Ministry of the Environment and Society for Preservation of Birds) and Mie Prefecture s Environmental Protection Award in fiscal See the Ajinomoto Tokai Bird Sanctuary homepage for more details (in Japanese only). Birdwatchers Tokai Plant viewed from the bird sanctuary The butterfly dragonfly (right), grey heron (below), and shrike (bottom right) in the bird sanctuary 26

28 Various Environmental Initiatives Environmental Research and Technology Development Environmental Research and Technology Development The Ajinomoto Group has continued to undertake advanced research and technology development in its main business domains, including food products, amino acids, and pharmaceuticals. The group s accumulated knowledge and technology will play a significant role in the preservation of the global environment and the creation of a sustainable society. Ajinomoto Co., Inc. has positioned the environment as one of its three strategic R&D areas. The group is pushing ahead with the development of energy and resource conserving production technologies and eco-materials, as well as research on environmental effect indicators, such as LC-CO2. Amino Acid Fermentation Production and the Environment fermentation microbes. Moreover, the Ajinomoto Group has accumulated knowledge of soil bacteria through its R&D for effectively utilizing the by-products of amino acid fermentation. The Ajinomoto Group, whose history is intimately tied to amino acids, is maintaining its position as a leading global company with its advanced fermentation technology for the production of amino acids. The group will advance research on highly productive microorganisms, develop innovative technologies such as those for energy conserving production processes, improve wastewater treatment techniques, and deploy technology to effectively utilize by-products. Amino acid fermentation production is a bio-industry Effectively recycling biomass is an important step in the creation of a sustainable global environment. Amino acid fermentation production is a resource recycling industry that recycles biomass in cooperation with the agricultural industry. Microorganisms with a variety of functional capabilities, including those that ferment amino acids, play an important role in this process, in addition to agricultural crops. Amino acid fermentation production is an industry rooted in the functional capabilities of these organisms. In other words, it is a bio-industry. Amino acid fermentation production: A system rooted in the functional capabilities of plants and microorganisms Organic fertilizers Agriculture (Sugarcane and cassava cultivation) Soil bacteria Composting bacteria By-products of amino acid fermentation Activated sludge Plants and microorganisms play key roles Amino acid fermentation industry Agricultural crops Raw materials Fermentation microbes The Ajinomoto Group undertakes a wide range of research and technology development to effectively unleash the functional capabilities of these microorganisms. With its knowledge accumulated over 50 years of amino acid fermentation experience and advanced biotechnology, the group is a world leader in development technology for highly productive amino acid Important environmental technology in amino acid fermentation production In terms of its relationship to the environment, amino acid fermentation production requires large amounts of energy and resources, including electricity, steam, and water. It also produces large amounts of by-products and processed wastewater. The Ajinomoto Group s fermentation related business generates about 26% of the entire group s net sales, but accounts for about 80 to 90% of the group s energy consumption and waste. Compared to the group s other businesses, its fermentation related business clearly has a large environmental impact. Accordingly, the Ajinomoto Group is developing highly productive fermentation microbes and low environmental impact processes, as well as optimal commercialization technology that maximizes the microorganisms functional capabilities. Thus the group is developing technologies to make cost competitiveness and low environmental impact compatible across the entire production process. The Ajinomoto Group sees environmental consciousness and cost reduction as one and the same thing, in that they are both efforts to minimize any form of excess work, waste, or inconsistency. Amino acid fermentation production system and important environmental technology Fuel (natural gas, oil), electrical power Water resources ( industrial water, ) river water Raw materials (agricultural carbohydrates) Raw material diversification technology Utility Steam, electricity Clean energy technology Technology for conserving energy and resources By-products Development of highly productive fermentation microbes Effective utilization of by-products Gas emissions (CO2) Amino acid product Development of energy conserving and low environmental impact processes Technology for effectively utilizing by-products Process wastewater Fermentation Wastewater treatment Separation, purification Wastewater discharge Advanced wastewater treatment technology 27

29 Various Environmental Initiatives See the Initiatives to Prevent Global Warming, Effective Utilization of By-products, and Initiatives to Reduce Water Usage and Wastewater Impact sections for detailed information about energy conservation, wastewater, and waste. Environmental Research and Technology Development nitrogen waste from animals. Utilizing lysine and other feeduse amino acids directly contributes to the reduction of excessive nitrogen waste. The Relationship between Feed-use Amino Acids and the Environment Amino acids are essential nutrients for animals and, as such, are used in livestock feed. Proteins, the building blocks of animal bodies, consist of 20 different amino acids. Some of these amino acids cannot be synthesized in animal bodies and must be supplemented in sufficient quantities through formula feeds. These amino acids are called essential amino acids. Typical examples include lysine, threonine, and tryptophan. Providing livestock animals with formula feeds that have a good balance of these amino acids leads to efficient production of high-quality livestock products, such as meat, eggs, and milk. In addition to ameliorating food shortages and leading to the effective utilization of farmland, this practice helps control the excretion of nitrogen, thereby reducing environmental impact. The Ajinomoto Group is undertaking research to clarify the relationship between feed-use amino acids and the global environment, and is working to disseminate knowledge gained from that research. Amino acid score of corn and wheat Leucine Valine Isoleucine Lysine Tryptophan Threonine Corn Phenylalanine + Tyrosine Methionine + Cystine Leucine Valine Lysine Tryptophan Threonine Wheat Isoleucine Methionine + Cystine Phenylalanine + Tyrosine Nitrogen metabolism in pigs (as the ratio to total protein-form nitrogen in conventional pig feeds) Conventional feed 100 Using feed supplemented with amino acids Amino acid supplemented low-protein feed 83 Body protein retention Excretion Reduction by 28% Excretion 44 Air pollution Ammonia emission Emission to soil, groundwater, rivers and lakes Water pollution The protein in feed is digested and absorbed by pigs. However, when pigs are fed a conventional feed, about 60% to 70% of the protein is excreted from the animals bodies, and the surplus nitrogen released into the environment may pollute the soil, water, and air. Supplementing feed-use amino acids will improve the amino acid balance in the feed and will reduce the excretion of excess nitrogen. Mitigating the environmental impact of the livestock industry Controlling the environmental impact of nitrogen waste from domestic animals has become a matter of great concern in the livestock industry. In Europe, the total volume of nitrogen waste from domestic animals is strictly regulated by law, a trend that is spreading throughout countries around the world. The most effective means of reducing nitrogen waste is to use feed-use amino acids. Supplementation with feed-use amino acids such as lysine, which tends to be deficient in livestock animal feeds, helps improve amino acid balance and raise feed efficiency. This practice lowers the protein content in feed and, without compromising animal growth and productivity, enables total nitrogen waste to be reduced by 20 to 50%, and ammonia emissions from the barn to be reduced by up to 50%. The system for controlling nitrogen waste with feed-use amino acids can be explained using lysine as an example. When there is an insufficiency of even one essential amino acid in feed, the efficiency of using other amino acids drops. Natural feed ingredients such as corn and wheat have less than the necessary amount of lysine (see the upper right figure, Amino acid score of corn and wheat). Other amino acids that are in excess compared to lysine are catabolized without being effectively utilized. They generate urea and are secreted from the body as urine. In the case of pigs that are fed a conventional formula feed, about two thirds of the protein in the feed is excreted from the animal s body. If the excrement is not sufficiently treated and excess nitrogen is released into the environment, it may lead to pollution of the soil and water and foul odors. In other words, the imbalance of amino acids in feed ingredients is the cause of excessive (n/d) Reduction in nitrogen excretion with feed-use amino acids 0 15% 11% Crude protein content in feeds Conventional feed Amino acid supplemented low-protein feed* (ppm) 2,500 2,000 1,500 1,000 Contributions to Natural Protein Conservation and Effective Use of Farm Land 500 Feed-use amino acids play a part in the conservation of natural protein sources and effective use of farmland. Generally, soybean meal in feed can be replaced with corn and crystalline L- Lysine using the below formula. This means that using 1.5 metric tons of lysine can save about 50 metric tons of soybean meal % Conventional feed 20% 17.5% Amino acid supplemented low-protein feed* (ppm) 140 Total nitrogen excretion can be reduced by one third to one fifth by providing animals low protein feed to supplement for insufficient amino acids instead of conventional feed. *Low protein feed supplemented with lysine, threonine and other amino acids. 50t soybean meal Amount of nitrogen excreted in manure Pigs Improvement Amount of nitrogen excreted in manure onto barn floor, and ammonia volatilized to the atmosphere Bar graph: Amount of nitrogen excreted in manure Line graph: Amount of ammonia volatilized to the atmosphere = t corn Broilers Improvement Crude protein content in feeds t crystalline L-Lysine 28

30 Various Environmental Initiatives Environmental Research and Technology Development Worldwide utilization of feed-use lysine has been increasing every year, and is estimated at about 770,000 metric tons for fiscal This means about 26 million tons of soybean meal being replaced by 25 million tons of corn and lysine. This is an enormous amount of soybean meal, equivalent to more than 60 percent of annual soybean meal production in the United States. In terms of the total area of farmland needed, the harvest volume per unit of land area is far greater for corn than for soybeans; this is potentially reducing the area of farmland used by as much as 8.4 million hectares. In other words, this amount of land would have to be cultivated and soybean fields created in order to maintain current dietary habits without lysine. This land area is equivalent to about 30 percent of that used for soybean cultivation in the United States, and about twice the whole cultivated acreage in Japan. With the need to respond to the increasing world population and the improvement of dietary habits, effective utilization of valuable natural protein sources and land are extremely important matters. The Ajinomoto Group will continue to deepen its knowledge about the potential for feed-use amino acids to contribute to the sustainability of the global environment and society. Conservation of soybean meal and farmland by using lysine Conventional feed 48.5 corn Farmland needed to produce 48.5 tons of corn About 750 corn 1.5 crystalline lysine Farmland needed to produce corn to make 1.5 tons of lysine About 0.5 hectares 200 soybean meal 50 soybean meal Farmland needed to produce 50 tons of soybean meal 5.1 hectares About 22 hectares Of which 770,000 tons of crystalline lysine worldwide Conservation of 26 million tons of soybean meal Conservation of 8.4 million hectares of farmland Other Basic Scientific Research for Increasing Food Production The world population is expected to reach from eight to ten billion by With the population expanding, meeting the corresponding demand for food has led to large quantities of chemical fertilizer being used in agriculture. The nitrogen content of fertilizer, however, is the largest factor behind the rapid increase in the total amount of fixed nitrogen. Excessive nitrogen that cannot be absorbed by the ecosystem causes serious environmental damage: pollution of underground water, lakes, and marshes; the generation of greenhouse gases; and diminished soil fertility. In this context, the Ajinomoto Group is utilizing its accumulated knowledge of the life science and biotechnology in collaboration with scientists and researchers from around the world to conduct advanced basic research that will contribute to both preservation of the environment and increased food production. (Indicator) 200 Nitrogen content Accumulation of Excess Nitrogen in the Ecosystem Amount of absorbable nitrogen in the ecosystem Total fixed nitrogen content 50 Chemical fertilizer (Year) Excerpt from Science, 294, 1268 (2001) Pollution and eutrophication of neighboring environment (rivers, lakes, marshes and underground water) Loss of soil fertility due to depletion of biodiversity in soil Human and livestock health-related concerns due to accumulated nitric acid content in crops Generation of greenhouse gases caused by residual nitrogen in the soil Excess nitrogen content ( environmental ) load Challenge to agricultural sustainability Research to improve the efficient utilization of nitrogen by plants Ajinomoto Group s Research Institute for Health Fundamentals and Institute of Life Sciences developed a strain of potatoes that requires as little as one fifth the amount of nitrogen for normal growth and harvest as other strains. This was accomplished by incorporating the gene for glutamic acid dehydrogenase (GDH gene) from mold, and the gene for Dof1, a transcription regulator isolated from corn with the help of Dr. Yanagisawa, an associate professor at Okayama University (now an associate professor at the University of Tokyo), into potato genes. A magazine published by the US National Academy of Sciences and other worldwide science magazines and newspapers recognized this development as a significant contribution toward solving environmental problems. 29

31 Various Environmental Initiatives Environmental Research and Technology Development Development of Eco Products Development of raw materials for plant-based plastics Ajinomoto Co., Inc., in cooperation with Mitsubishi Chemical Corporation, is pursuing development of a fermentation-based manufacturing process for succinic acid, the raw material for biodegradable plastic, polybutylene succinate (PBS). Mitsubishi Chemical Corporation, the joint project partner, has manufactured and marketed petroleum-based PBS since April However, with the growing trend toward plantbased materials among consumers, Mitsubishi Chemical was seeking ways to switch to a plant-based material. The joint project was launched to develop an alternative, plant-based PBS material composed of succinic acid, as well as its processing methods, by applying Ajinomoto Co., Inc. s expertise in amino acid manufacturing technology. This research was adopted as a Bioprocess Development Project for Practical Application by New Energy and Industrial Technology Development Organization (NEDO) in fiscal Development has progressed from the laboratory phase to the small-scale production test phase. Commercialization will finally commence in 2006; Ajinomoto Co., Inc. has adopted plant-based plastic trays made from succinic acid for some of its gift products given during Japan s midsummer gift giving season. In the process of conducting R&D, a number of benefits were identified in addition to the fact the plastic is plant-based. Accordingly, the development of uses of PBS is expected to advance further. Assessment of the Lifecycle Environmental Effects of Products The Ajinomoto Group is conducting research to understand the environmental effects of its products throughout their entire life cycles. Ajinomoto Co., Inc. actively participates in related societies and research conferences, and aggressively discloses knowledge gained about the environmental effects of food products, so that it may be widely used in society. LC-CO2 assessment of products In 2003, the Ajinomoto Group released its Ajinomoto Group Zero Emissions Plan. Since then, the group has been moving forward with initiatives designed to minimize every type of environmental impact generated from all its business domains. In pursuing those initiatives, it is essential to understand the products lifecycle environmental effects, from the production of raw materials through processing at the plant, to consumption and disposal in the market, not just the environmental impact generated during the manufacturing process. Accordingly, the Ajinomoto Group is making preparations that will enable the sequential assessment of the lifecycle CO2 (LC-CO2)* of its products, having selected the generation of CO2 as an appropriate representative indicator among the different environmental effects. The Ajinomoto Group is performing test calculations of the LC-CO2 of food products and amino acids and undertaking research on the environmental efficiency of these products, in part through participation in the Food Study Group of the Institute of Lifecycle Assessment, Japan (ILCAJ). LC-CO2 of products Raw materials Process Polybutylene succinate (PBS) and processed samples. Fossil fuel energy Packaging Distribution CO2 impact on the global environment Consumption Disposal * LC-CO2: The total amount of CO2 generated from the usage of fossil fuels such as oil over the entire life of a product from the production of raw materials through processing at the plant to consumption and disposal in the market. LC-CO2 assessment of food products Biomass mark A gift product that comes in a plant-based plastic tray (on sale beginning with the 2006 midsummer gift giving season). Estimating the amount of fossil fuel consumed during the life of the product and figuring the CO2 impact is not an easy matter. There are still a few examples of the LC-CO2 of food products in particular being disclosed to the public. Taking vegetables, which are raw material for processed foods, as an example, the very complicated process they go through up until delivery to the Ajinomoto Group s food products plants 30

32 Various Environmental Initiatives Environmental Research and Technology Development needs to be clarified. A table of LC-CO2 emissions factors for raw materials for food products or the fermentation industry can be prepared using the Embodied Energy and Emission Intensity Data for Japan Using Input-Output Tables (3EID) published by the National Institute for Environmental Studies, and/or the Industrial Input-Output Tables published by the Ministry of Internal Affairs and Communications. While participating in the ILCAJ Food Study Group, the Ajinomoto Group prepared and published a database of LC-CO2 emissions factors for materials related to the food industry. Life stages of vegetables Raw materials Resources Fossil fuels Resources Fossil fuels Process Inputs Manufacture Fuel oil production Manufacture Electrical power Fuel Electrical power production (power generation) Material inputs & equipment Fertilizer Agricultural machinery Trucks Packaging materials Refrigerated warehousing Trucks Illumination Refrigerator Treatment site Life stage of vegetables Cultivation Harvest Transport Selection Packaging Refrigeration Transportation Market Consumption Disposal Areas where main losses occur Loss Loss Loss Loss Loss Processed foods have the following characteristics compared to homemade foods: (1) They have a smaller CO2 impact because they are produced using intense energy during the processing stage (energy intensity). (2) They can be used as food products for longer periods because they are harvested and processed during the height of the season (long availability). (3) Food loss can be reduced through the systematization of the purchasing and storing of raw materials, and food products with few leftovers can be provided (highly efficient utilization of food materials). On the other hand, making use of these characteristics requires that packaging materials be used, which generates CO2 impact. Ajinomoto Co., Inc. is planning to quantitatively assess these pros and cons from a lifecycle perspective. Click here for Ajinomoto Co., Inc. s database of LC-CO2 emissions factors for materials related to the food industry (in Japanese only). The Ajinomoto Group publicizes this database hoping that many members of society will utilize it to help preserve the global environment and create a sustainable society. LC-CO2 assessment of containers and packaging In 1991, the Ajinomoto Group established the Eco-index for Containers and Packaging, which is a guideline for designing environmentally friendly containers and packaging. Since then, the group has worked to keep the global environment and users in mind in its designs. Revisions made in 2003 add assessment items to reduce CO2 emissions throughout the entire process from the procurement of raw materials for containers and packaging through the transportation of products to disposal. See the Environmentally Friendly Containers and Packaging section for details about the Eco-index for Containers and Packaging and efforts to improve containers and packaging. Outside presentations of LC-CO2 research The Ajinomoto Group is making an effort to disclose the results of its LC-CO2 research to society, in part through presentations at research conferences. Examples of outside presentations Presentation theme Date The Ajinomoto Group Zero Emissions Plan and examples of LC-CO2 calculation Environmental contributions of feed-use amino acids and making a zero emissions manufacturing processes Calculation of LC-CO2 of corn imported to Japan LC-CO2 comparison of tomato sauce pasta by the cooking method LC-CO2 of dietary soybean oil and soybean meal LC-CO2 of refined sugar made from imported sugar LC-CO2 of set menus using actual measurements of cooking and industrial inputoutput tables 5/18/04 5/28/05 8/25/05 12/12/05 5/17/06 Water Re-use Workshop, sponsored by the Water Re-use Promotion Center, at Shokuryo Kaikan Building Tokyo University of Agriculture and Technology High School-University Joint Environmental Seminar at the Tokyo University of Agriculture and Technology Second ILCAJ Food Study Group Seminar ILCAJ Forum News, No. 38 (electronic version) 2005 Report of the ILCAJ Food Study Group 31

33 Various Environmental Initiatives Initiatives to Prevent Global Warming Initiatives to Prevent Global Warming Of all the many environmental issues, the problems of global warming and climate change are the most important common challenges. The Ajinomoto Group has established quantitative targets for the reduction of greenhouse gas emissions in the Ajinomoto Group Zero Emissions Plan, and is working across all its business activities to reach these goals. Additionally, the Ajinomoto Group provides education to its employees who are of course also consumers including encouraging them to participate in national efforts to prevent global warming, and actively cooperates with research projects and studies conducted by professionals. Record on Energy Usage and CO2 Emissions Carbon dioxide and small quantities of refrigerants are the greenhouse gases emitted from the Ajinomoto Group s business activities. The Ajinomoto Group Zero Emissions Plan sets targets of a 20% reduction in unit CO2 emissions compared to fiscal 2002 for all production sites by fiscal 2010, and a 6% reduction in gross CO2 emissions from production sites in Japan compared to fiscal 1990, to 484,000 tons or less. The Ajinomoto Group is working to reduce CO2 emissions and conserving energy in order to meet these goals. develop and adopt better energy-conservation technologies with a view toward achieving its fiscal 2010 targets. See the Fiscal 2005 Goals and Results section for related information. Energy consumption by category (FY2005) Consumption % of total % of total CO2 energy use emissions Purchased electricity Purchased energy (steam) Gas Oil Coal 2 million MWh 1.6 million tons 240 million m million liters 3.2 thousand tons 21.9% 13.0% 33.4% 31.4% 0.3% 32.6% 9.5% 25.1% 32.4% 0.4% Total 32,200 TJ 100% 100% Fiscal 2005 record In fiscal 2005, the Ajinomoto Group used about 32,000 terajoules (TJ) of energy and emitted 2.3 million tons of fossil fuelderived CO2, an increase of about 4% over the previous fiscal year. The group s various efforts to conserve energy and reduce CO2 emissions enabled the group to lower its per-unit emissions by about 7%. However, an increase in production of about 12% resulted in an increase in gross CO2 emissions. About 98% of the Ajinomoto Group s gross CO2 emissions come from production sites. Reduction efforts being conducted at fermentation-related production sites are especially important, because CO2 from fermentation-related production accounts for about 80% of gross emissions. The group is working aggressively to conserve energy and reduce CO2 by improving productivity and yield, and by adopting natural gas cogeneration systems and energy-saving condensing equipment. Emissions (millions of tons) CO2 emissions and unit CO2 emissions Emissions from production sites in Japan Total emissions Per-unit emissions (Fiscal year) * Unit CO2 emissions: Index using unit CO2 emissions per production unit in FY2002 as 100 CO2 emissions by business (FY2005) Japan: 5.2% Outside Japan: 3.6% Food-related Outside Japan: 2.8% Japan: 8.8% Other Logistics/services/offices Japan: 2.0% (outside Japan not counted) Japan: 8.1% Production division Per-unit emissions (%) Outside Japan: 69.5% Progress of the Ajinomoto Group Zero Emissions Plan In fiscal 2005, unit CO2 emissions from all production sites dropped by about 19% compared to fiscal 2002, which has been set as the base year. In this way, the group s environmental efficiency is improving smoothly. However, despite the fact that gross CO2 emissions from production sites in Japan fell about 17,000 tons from the previous fiscal year, to 510,000 tons, this is a reduction of only about 10,000 tons compared to the base year, fiscal The Ajinomoto Group will work to CO2 emissions by region (FY2005) North America South America 10 Europe 14 9 Fermentation-related Total: 2.3 million tons-co2 China 6 Japan 24 Southeast Asia 37 32

34 Various Environmental Initiatives Initiatives to Prevent Global Warming Initiatives to Reduce Emissions of Greenhouse Gases The Ajinomoto Group is undertaking a range of initiatives to reduce CO2 emissions across all its business activities, including logistics, sales, and product development, in addition to production, which is the primary source of greenhouse gas emissions. Moreover, the group emphasizes educational activities for employees and stakeholders with a view toward preventing global warming. Below are some examples of specific initiatives. Initiatives at production sites Production sites, which emit about 98% of the Ajinomoto Group s gross CO2 emissions, are taking a multifaceted approach to conserving energy and reducing CO2 emissions. Initiatives range from large-scale equipment investments and the development and adoption of new technologies to the accumulated effects of small, daily efforts of employees and ideas to improve work procedures. Conversion to clean energy The Ajinomoto Group has conventionally pushed conversion to clean energy, including switching the fuel used at its plants from heavy oil to natural gas. In fiscal 2005, the conversion to natural gas was completed at Ajinomoto del Perú S.A. Currently, conversion construction and planning is proceeding at several plants in Brazil and Indonesia. As a result of these efforts, gas has pulled ahead of oil in fiscal 2005 in terms of the fuel percentage used at the group s plants, and become the most used fuel. Moreover, the plant at Ajinomoto AminoScience LLC of Ajinomoto U.S.A., Inc. has for many years been recovering the methane gas generated at city landfills and using it as a fuel. Plants in South America and Southeast Asia are studying the utilization of unused biomass derived from agricultural produce. In these ways, the Ajinomoto Group is driving the conversion to clean energy forward in many ways. (%) Energy composition by source Oil Gas Purchased electricity/ energy Elimination of flons Some Ajinomoto Group plants store flons (CFCs, HCFCs, HFCs) as refrigerants for use in refrigeration equipment. Flons are greenhouse gases. Accordingly, the Ajinomoto Group Zero Emissions Plan made the elimination of flons a high priority issue. The group is aiming to completely eliminate CFCs and replace HCFCs and HFCs with natural refrigerants that are not flons by fiscal Within the Ajinomoto Group, plants belonging to the group companies of Ajinomoto Frozen Foods Co., Inc. in particular have used comparatively large quantities of the HCFC R-22 as a refrigerant in refrigeration equipment due to the nature of their manufacturing process. Accordingly, in consideration of the time periods for renewing equipment, the company is aggressively switching from equipment that uses flons to nonflon equipment that uses safer natural refrigerants such as ammonia and CO2. As of fiscal 2005, non-flon equipment has been installed on five lines in Japan (renewed and new lines). Moreover, Ajinomoto Frozen Foods Co., Inc. was recently the first in the industry to adopt new technology that uses ammonia and CO2 together as refrigerants. Further information is available at the Ajinomoto Frozen Foods Co., Inc. website at: (in Japanese only) Cogeneration The Ajinomoto Group is installing cogeneration technology, which efficiently uses the energy contained in fuels, into its plants. The group designs and installs equipment that is suited to an array of conditions, including the location of the plant, the type of fuel, and the manufacturing process. For example, the Tokai Plant of Ajinomoto Co., Inc. has been running a combined gas turbine and steam turbine system since Combined system (Tokai Plant, Ajinomoto Co., Inc.) Developing energy-conserving processes The most important and highly effective means of conserving energy and reducing CO2 emissions at the Ajinomoto Group s production sites is to increase the productivity and yield of the production process itself through technological innovation. As a technology-driven company, the Ajinomoto Group maintains and improves upon a high level of technical development capabilities in all the group s production technology fields, from basic and developmental research to commercialization and system technologies. In the area of fermentation-related production, which accounts for about 80% of the group s CO2 emissions, the group possesses highly efficient fermentation microbes, created using world-class biotechnology, as well as optimal commercialization technology that maximizes the capacities of the fermentation microbes. The Ajinomoto Group is aiming for groundbreaking improvements in environmental efficiency through technological development (Fiscal year) See the Environmental Research and Technology Development section for information related to groundbreaking improvements in environmental efficiency through technological development. 33

35 Various Environmental Initiatives Initiatives to Prevent Global Warming Utilizing waste cooking oil as a boiler fuel In addition to making large-scale equipment investments and developing and adopting new technology, the Ajinomoto Group is also pushing the reduction of CO2 emissions through a variety of other means. For example, the Kanto, Shikoku, and Kyushu plants belonging to Ajinomoto Frozen Foods Co., Inc. use waste cooking oil (about 600 tons per year) generated during the production of deep-fried foods as a boiler fuel. This reduces the usage of heavy oil, and in turn reduces CO2 emissions by about 1,300 tons per year. Further information is available at the Ajinomoto Frozen Foods Co., Inc. website at: (in Japanese only) Boiler that uses waste cooking oil (Kanto Plant, Ajinomoto Frozen Foods Co., Inc.) efforts to reduce CO2 emissions from product logistics in Japan. Specifically, the group is aggressively utilizing rail freight transportation, which has a low environmental impact with only one-eighth the CO2 emissions of transport by truck. The Ajinomoto Group s modal shift ratio is among the best in the food industry. In May 2005, Ajinomoto Co., Inc., Ajinomoto Frozen Foods Co., Inc., and Ajinomoto General Foods, Inc. were among the first group of companies approved for the Ministry of Land, Infrastructure and Transport s Eco Rail Mark in recognition of their efforts to utilize environmentally friendly rail freight transportation. In addition, the Ajinomoto Group uses coastal sea shipments for transporting large volumes of liquids. Complying with the revised Energy Conservation Law as a consignor The Energy Conservation Law was revised in 2005 and the new version took effect in April Under the revisions, consignors must monitor and make plans to reduce logisticsrelated CO2 emissions. As a consignor, the Ajinomoto Group in Japan is working aggressively to comply with this law; the group is attempting to improve its logistics-related environmental efficiency, including for transportation commissioned to other companies. See the Logistics-related Efforts section for details. Equipment maintenance Among the various initiatives to conserve energy and reduce CO2 emissions at production sites, the accumulation of daily efforts made by employees is also really important, including efforts to improve the work process through minor process improvements and the maintenance and inspection of equipment. The inspection and control of steam traps is one example. The Ajinomoto Group s plants, which use steam as a form of energy, have networks of pipelines that carry the steam to locations where it is needed. Condensate is formed when steam cools, and the resulting drainage needs to be removed. Steam traps are small devices that remove the drainage from the live steam. Many steam traps are installed along the pipelines. Steam leaks occur unless each one is working properly, resulting in large amounts of wasted energy. At Ajinomoto Co., Inc. s Tokai Plant, detailed inspections of about 500 steam traps are conducted every three years. Steam trap. Acoustically checking for steam leakages. Logistics-related initiatives Modal shift The Ajinomoto Group has placed modal shift at the heart of its Sales initiatives Switching sales vehicles to eco-cars Ajinomoto Co., Inc. has about 300 sales vehicles. Starting in the second half of fiscal 2005, the company began replacing these vehicles with environmentally friendly vehicles when the time comes to renew their leases. The company plans to replace about half (150) of these vehicles by fiscal This move is expected to reduce CO2 emissions from sales vehicles by about 25%. In addition, the company has established ecodriving rules and is working to educate its employees about environmentally-friendly driving habits. Product development initiatives The Ajinomoto Group is pushing forward with research designed to gain an understanding of the CO2 emissions that occur over the entire life cycles of its products. Ajinomoto Co., Inc. includes the generation of life cycle CO2 (LC-CO2) as an environmental assessment item in its Eco- Index for Containers and Packaging, which serves as the group s guidelines for environmentally-friendly design. The Ajinomoto Group then incorporates this understanding of CO2 emissions into its product development activities. Moreover, the Ajinomoto Group actively participates in LC- CO2 research with organizations such as the Food Study Group of the Institute of Life Cycle Assessment, Japan (ILCAJ), and releases the results to the public. See the Environmental Research and Technology Development, and Environmentally Friendly Containers and Packaging sections for details. 34

36 Various Environmental Initiatives Initiatives to Prevent Global Warming Participating in the national Team Minus 6% movement Ajinomoto Co., Inc. is participating in Team Minus 6%, a national movement to prevent global warming promoted by the Japanese government that was launched in Thus far, the group has worked on the Cool Biz, Mission Uchimizu, and My Bag Campaigns as part of the movement s activities. In fiscal 2006, the Ajinomoto Group is expanding its group-wide efforts and calling on all group employees to participate in Team Minus 6%. Further information is available at the Team Minus 6% website at: (in Japanese only) See the Environmental Initiatives in Offices section for detailed information. Mission Uchimizu 2005 On August 10, 2005, the Kawasaki Administration & Coordination Office belonging to Ajinomoto Co., Inc. participated in the Mission Uchimizu 2005 event that was held simultaneously across Japan as part of the national Team Minus 6% movement. This was a grand social experiment to lower the summer heat by 2 C through the traditional Japanese practice of uchimizu, sprinkling water on streets and gardens. On the day of the event, office employees sprinkled 4.6 kl of water, using groundwater that springs up from the construction site of a new research building on the premises and industrial water from fire hydrants. It is estimated that the uchimizu helped radiate 2,500 Mcal of heat away from the ground. Sprinkling water (uchimizu) on the public street in front of the office and on office premises. Further information about the My Bag Campain is available at the Team Minus 6% website (in Japanese only) at: Information Disclosure Concerning Global Warming Countermeasures The Ajinomoto Group s business activities are closely tied to what might be called environmental services provided by the ecosystem. For example, the agricultural raw materials and water resources that the Ajinomoto Group uses to manufacture processed foods and amino acids are tangible benefits of such environmental services. As is widely recognized, global warming and climate change are thought to cause significant changes to a variety of fundamental ecosystem functions. In this sense, climate change is a universal issue and an important challenge for the Ajinomoto Group. Experts including researchers, institutional investors, and NPO personnel are showing a high level of interest in the Ajinomoto Group s record regarding the problem of climate change and risks from its businesses, as well as its countermeasures and strategies. The Ajinomoto Group responds appropriately to this type of interest, and discloses as much as possible the group s point of view and information about the group relating to global warming. For instance, the Ajinomoto Group cooperated with the Carbon Disclosure Project (CDP) survey that was conducted in February Over the joint signatures of more than 200 of the world s financial institutions, the CDP sent out a corporate survey regarding the problem of climate change to 1,800 of the world s leading companies. The Ajinomoto Group provided detailed replies to questions about the problem of climate change and agreed to the disclosure of the contents, and will make an effort to actively contribute to such research and studies relating to global environmental problems. My Bag Campaign Three plants belonging to Ajinomoto Co., Inc. distribute tote bags with the Team Minus 6% logo and Ajinomoto s corporate logo imprinted on them as mementos for people who come to tour the plants. This souvenir is filled with the Ajinomoto Group s hopes that after people go home they will use their own bags instead of disposable plastic bags when going shopping. In this way, the Ajinomoto Group is encouraging everyone to do whatever possible to help contribute to the prevention of global warming by distributing these environmentally conscious mementos. 35

37 Various Environmental Initiatives Initiatives to Reduce Water Usage and Wastewater Impact Initiatives to Reduce Water Usage and Wastewater Impact The 21st century is being called the century of water. The Ajinomoto Group is acutely aware of the importance of paying due consideration to water resources. The group is working to reduce the amount of water needed in its production processes, and is making efforts to minimize the environmental impact of used water. In line with its Ajinomoto Group Zero Emissions Plan, the Ajinomoto Group is aiming for Zero Wastewater Emissions in an effort to minimize wastewater impact. The process effluent discharged during the production of amino acids and other fermentation-related products contains high concentrations of nitrogen and organic substances. These substances raise BOD levels. Accordingly, the Ajinomoto Group is working to reduce process effluent through the adoption of innovative production processes and the development of advanced wastewater treatment technology. Moreover, the Ajinomoto Group overall uses large quantities of water resources as much as 170 million tons to manufacture fermentation-related products. Recognizing the reduction of water usage as an important task, the group is pursuing efforts to develop water-saving manufacturing processes. Water Usage and Wastewater Results In fiscal 2005, the Ajinomoto Group used about 210 million tons of water resources and generated about 200 million tons of wastewater. These levels were comparable to the previous fiscal year. Through a series of various improvements, the fermentation-related production divisions, which account for about 80% of the above figures, were able to reduce wastewater per unit of production by 3% from the previous fiscal year. Water consumption by source & discharged water volume by destination (FY2005) Total water consumption: 213 million tons Total discharged water volume: 201 million tons River and well water (directly for processing): 13% River and well water for indirect cooling: 67% Discharged directly to public waters, indirect cooling water, etc.: 72% Industrial water: 17% Discharged to public sewerage: 3% Tap water: 3% Discharged to public waters after treatment: 23% Irrigation water: 2% Discharged water volume by business (FY2005) Food-related: 12% Other: 8% Total: 201million tons 80% As a concrete target for the goal of achieving Zero Wastewater Emissions, the Ajinomoto Group will bring the BOD in treated discharged water to 10 ppm or less, and the total nitrogen to 5 ppm or less, at all production sites by fiscal In fiscal 2005, 12 business sites (eight in Japan and four outside Japan) achieved this Zero Wastewater Emissions status. While the number of sites that have achieved this goal doubled compared to fiscal 2004, only one fourth of the 47 targeted sites have done so. The Ajinomoto Group plans to continue making efforts to achieve this objective. The group is aiming to reduce its volume of wastewater per unit of production by 20% or greater compared to the fiscal 2002 level Fermentation-related discharged water and unit volume Discharged water volume (Million tons) Unit volume Discharged water volume Unit volume (FY) (Note) Unit volume: Index with 100 as the volume per unit of production in fiscal Development and Adoption of Wastewater Treatment Technology The Ajinomoto Group has adopted wastewater treatment technologies suited to the effluent properties at each plant in order to purify its process effluent. Moreover, the group has developed more advanced wastewater treatment technologies, such as biological denitrification (BDN), and is installing necessary equipment to reduce the high concentrations of nitrogen and BOD substances contained in the effluent discharged during the manufacturing process for fermentation-related products. In fiscal 2005, the Ajinomoto Group installed and commenced operating BDN equipment at plants in Brazil and Peru, after having already done so in Thailand and Vietnam

38 Various Environmental Initiatives Initiatives to Reduce Water Usage and Wastewater Impact Examples of wastewater treatment technologies adopted by the Ajinomoto Group Wastewater Characteristics treatment method Ammonia stripping A method for removing and collecting ammonia from effluent by gasifying it using a high ph or high temperatures. Pretreatment Advanced treatment UASB Activated sludge process BDN Upflow anaerobic sludge blanket. A wastewater treatment method using anaerobic bacteria. The bacteria decompose organic matter through anaerobic fermentation, producing methane gas. The methane gas is collected and used as a boiler fuel, while It contributes to the reduction of CO2 as a biogas if used instead of fossil fuels. One of the most common biological treatment methods. Effluent containing organic matter is inoculated with purifying microorganisms and processed under aerobic conditions. As the microorganisms multiply, they oxidize and decompose the organic matter. Excess sludge is collected and effectively utilized, such as in fertilizer. Biological denitrification. First, under aerobic conditions, effluent containing organic matter and nitrogen is nitrified and the organic matter decomposed. Then, under anaerobic conditions, denitrifying bacteria perform the denitrification process. Treatment of wastewater with BDN (biological denitrification) Wastewater from the production process is fed into a nitrification tank 1 containing nitrifying bacteria. Nitrogen-containing organic matter Nitrifying bacteria Denitrifying bacteria Nitrate Nitrogen gas The wastewater from the production process contains a lot of nitrogen-containing organic matter. If discharged untreated, this wastewater would place a burden on the environment. The nitrogen in the organic matter is converted to nitrate in an environment 2 that is ideal for the nitrifying bacteria. The treated water from the nitrification tank is fed into a denitrification tank 3 containing denitrifying bacteria. In the nitrification tank, nitrifying bacteria consume (remove) the organic matter, converting the nitrogen in the organic matter to nitrate form. The nitrate in the treated water is converted to nitrogen gas in an 4 environment that is ideal for the denitrifying bacteria. The treated water from which the organic matter was removed still contains the nitrate that was converted from the nitrogen. This water cannot yet be discharged. The remaining treated water contains hardly any organic matter 5 or nitrogen. The converted nitrogen gas is released into the atmosphere (80 percent of the Earth s atmosphere is made up of nitrogen gas). The bacteria used in the treatment are separated and subsequently used as organic fertilizer or soil supplement. The purified water is discharged. 37

39 Various Environmental Initiatives Initiatives to Reduce Waste Initiatives to Reduce Waste Waste that was traditionally just disposed of is now considered to actually be a valuable resource. The Ajinomoto Group is working to control its generation of waste and by-products. At the same time, the group is committed to effectively utilizing the waste and by-products that it does generate, aiming to recover 99% of these as resources. In fiscal 2005, the Ajinomoto Group achieved a group-wide resource recovery ratio of 97.9%. In accordance with the Ajinomoto Group Zero Emissions Plan, the group has been working aggressively to improve productivity and recycle waste and by-products in order to minimize the amount that goes to final disposal. The Ajinomoto Group considers the by-products of its production processes to be valuable resources, and strives to effectively utilize them instead of disposing of them. For example, in the production of amino acids, the use of advanced biotechnology has improved productivity and reduced the generation of by-products. The generated by-products are now effectively utilized and made into co-products such as fertilizers. In the production of food, improving sales forecasting accuracy has helped minimize the wasteful consumption of raw materials and packaging when revising products. In these ways, the Ajinomoto Group is making determined efforts to significantly reduce waste. See the Ajinomoto Group Zero Emissions Environmental Vision section for details on the Ajinomoto Group Zero Emissions Plan. See the Effective Utilization of By-products section for details on the resource recovery of by-products. Fiscal 2005 Waste Reduction Results also increased by 12%, resulting in an improvement of about 7% in the generation of waste and by-products on a per unit of production basis. In addition, by continuing its Returned Goods Reduction Project, which was started in fiscal 2002, Ajinomoto Co., Inc. s sales divisions have been able to cut the return ratio of household products from its food product business in Japan by half. At the same time that it is working to control the generation of waste and by-products, the Ajinomoto Group is also working aggressively to effectively utilize those that it does generate. The Ajinomoto Group Zero Emissions Plan calls for Zero Waste Emissions, defined as the achievement of a resource recovery ratio of 99% at each operation site by In fiscal 2005, 33 of the 93 targeted business sites achieved this goal. The group is committed to continuing efforts toward the achievement of this objective at all targeted operation sites. Waste and by-products generated, and resource recovery ratio, by business (FY2005) Resource recovery ratio: 92.7% Resource recovery ratio: 99.0% Fermentation-related: 2,056 thousand tons Food-related: 76 thousand tons Other waste: 66 thousand tons Total waste generated: 2,198 thousand tons In fiscal 2005, the Ajinomoto Group generated about 2.2 million tons of waste and by-products, an increase of about 5% over the previous fiscal year. However, the group s production See the Greening of the Supply Chain section for details on initiatives relating to marketing and distribution. Waste and by-products generated, and resource recovery ratio ( Thousand ) tons 2,500 2,000 1,500 1, Waste generated 97.7 Waste generated 2, Waste generated 2,198 Waste generated 1,964 1,763 2,152 2,039 1,892 1, Resource recovery ratio Recovered resources Waste disposal (FY) Resource recovery ratio (%) Efforts at Employee Cafeterias The cafeterias at each operation site are continuing efforts to reduce waste by reducing leftovers. These efforts include thoroughly draining wet refuse, and thinking of ways to serve side dishes such that everything is eaten, even the garnishes. In particular, waste at the employee cafeteria in the headquarters of Ajinomoto Co., Inc. has been a challenge for many years. This cafeteria has been recycling used cooking oil into livestock feed, soap, and vegetable diesel fuel (VDF)* since February 2005, and has been recycling wet refuse into livestock feed since March Thanks to these efforts, the employee cafeteria at the company s headquarters now recycles the majority of its waste. One of the reasons behind the generation of wet refuse at cafeterias is miscalculation of the number of patrons and the 38

40 Various Environmental Initiatives Initiatives to Reduce Waste popular menu items on a given day. Prepared ingredients that cannot be used at another time must be thrown out. To address this challenge, Ajinomoto Communications, Inc., which operates the employee cafeteria at the Kawasaki Administration & Coordination Office of Ajinomoto Co., Inc., is making an effort to bring forecasted and actual cafeteria usage closer together. It is doing this by looking at accumulated statistical data on the relationship between factors such as the seasons, the weather, and activities on a given day, and the numbers of patrons and popular menu items. * Vegetable Diesel Fuel (VDF): Diesel fuel made from vegetable oil - a kind of biodiesel fuel. Straining used cooking oil Turing Waste Bread Dough into Livestock Feed A plant belonging to AJINOMOTO BAKERY CO., LTD., which manufactures frozen bread dough, has implemented an initiative to turn waste bread dough, which is invariably generated during production, into livestock feed. Food waste, such as waste bread dough and leftovers, is often recycled into fertilizer. However, there is currently excess supply and no demand in the market. Accordingly, AJINOMOTO BAKERY started this new effort aiming to recycle its waste bread dough, which is full of high quality wheat flour and abundant nutrients, into high quality livestock feed. It installed equipment in its plant to turn waste bread dough into livestock feed, and succeeded in processing a feedstuff that can improve the quality of pork and enhance palatability. In November 2005, the company started marketing the feedstuff as a co-product. A truck collecting used cooking oil Cooperating to Recycle Vegetable Debris at a Hamburger Chain AJINOMOTO LOGISTICS CORPORATION, the group s subsidiary which handles logistics, is cooperating with Mos Food Services, Inc., the company behind the hamburger chain, Mos Burger, by providing logistics services in that company s efforts to recycle food waste. Mos Food Services is making an effort to recycle vegetable debris from its Mos Burger restaurants into compost. AJINOMOTO LOGISTICS CORPORATION collects the vegetable debris when it delivers ingredients to Mos Burger restaurants, thereby reducing the environmental impact. This initiative was started jointly by both companies in 2003 as a Ministry of Agriculture, Forestry and Fisheries-endorsed Demonstration Project for the Establishment of a Combined Delivery and Collection System for Food. In fiscal 2005, experimental runs were conducted at Mos Burger restaurants in the Sendai and Nagoya areas. In the Sendai area, a special AJINOMOTO LOGISTICS truck outfitted with a machine to collect vegetable debris was used. In the Nagoya area, a normal natural gas-driven delivery truck was used with a special folding collection container developed by Mos Food Services. Turning waste bread dough into livestock feed An AJINOMOTO LOGISTICS truck collecting vegetable debris at the same time it delivers ingredients to restaurants. A truck that can collect vegetable debris. 39

41 Various Environmental Initiatives Effective Utilization of By-products Effective Utilization of By-products The Ajinomoto Group s product manufacturing process generates by-products. The group sees these by-products as valuable resources, and is working to recycle them as co-products. The Bio-cycle, which is a system for effectively utilizing by-products that come from the amino acid fermentation production process, is a representative example of the Ajinomoto Group's resource recycling production model. The Ajinomoto Group s manufacturing process generates byproducts, or unintended secondary products. The majority of these by-products are concentrated fermentation liquors derived from the fermentation production process for amino acids, which are the group s primary product. Nearly all the concentrated fermentation liquors are effectively utilized as valuable co-products such as fertilizer and livestock feed. The Ajinomoto Group s system for effectively utilizing the by-products derived from its amino acid fermentation production has been built up over a 30-year period at different locations around the world with a view toward the local recycling of resources. This experience has given the group a foundation to develop various initiatives that are currently being taken to effectively utilize resources from a range of manufacturing processes other than amino acid fermentation production. Below is an introduction to the Bio-cycle, the Ajinomoto Group s representative resource recycling production model, which is a system for effectively utilizing by-products derived from amino acid fermentation production. Amino acid fermentation production Fermentation microbes Raw materials Sugarcane, cassava, etc. Fermentation system Sugars are absorbed by fermentation microbes. Fermentation production By-products Concentrated fermentation liquors, ammonium salts, etc. Fermentation broth Fermentation Products AJI-NO-MOTO, lysine, etc. Amino acids are excreted into the fermentation broth. Fermentation Fermentation microbes produce amino acids from sugar. microbes Sugar Amino acids Amino Acid Fermentation Production and Its By-products The system of amino acid fermentation production Amino acids typified by the umami seasoning AJI-NO-MOTO or the feed-use amino acid lysine, are manufactured from agricultural products such as sugar cane, cassava, and corn using the fermentation method, which utilizes the activity of microorganisms. The Ajinomoto Group undertakes large-scale industrial production using advanced industrial technology and large machinery and equipment. However, the system of producing amino acids which are common nutrients for all living beings from sugar utilizing the functional capabilities of microorganisms is a production method based on life s natural system for recycling matter. By-products as valuable resources The Ajinomoto Group produces about one million tons of amino acids annually. In that process, the group also produces about two million tons of by-products such as concentrated fermentation liquors, or about two times the intended volume of amino acids. The Ajinomoto Group sees these by-products as valuable resources that are produced from agricultural raw materials. The company processes the by-products according to their components and properties, and effectively utilizes them as organic fertilizers and other products in the agricultural sector, thereby properly demonstrating their value. The Ajinomoto Group has achieved a 99% resource recovery ratio for byproducts derived from its amino acid fermentation production. The Ajinomoto Group refers to these fertilizers and other products that it manufactures and markets as co-products, with the same pride as its core product amino acids. By-products are a trove of nutrients By-products value as resources filled with nutrients can be seen in concentrated fermentation liquors, which are the most abundant fermentation by-product. By nature, microorganisms make the nutrients they need to survive. The fermentation microbes used in amino acid production also make a number of nutrients besides amino acids at the same time. Accordingly, concentrated 40

42 Various Environmental Initiatives fermentation liquors, which are the liquid by-product remaining after the target amino acids have been extracted from the fermentation broth, are nutrient troves filled with compounds that are essential to the maintenance of plant and animal life. Effective Utilization of By-products Researching effective utilization based on scientific data Example analysis of concentrated fermentation liquors Nitrogen 5.0% Organic carbon 5.0% Phosphorus (P2O5) 0.2% Amino acids 5.0% Potassium (K2O) 1.0% Organic acids 5.0% Developing uses for by-products and the results of their effective utilization By-products, which are produced in a variety of liquid and solid forms, are processed according to their components and properties. About 90% are effectively utilized as fertilizer, mainly in the agricultural sector. However, the Ajinomoto Group is working to develop a variety of uses based on scientific data, since natural characteristics, crop characteristics, and needs differ from region to region. Research laboratories and centers belonging to Ajinomoto Co., Inc., as well as the group s regional technology development centers and technology departments at plants around the world, cooperate with public research institutes in different countries to advance studies and research about the results of using these fertilizers and other co-products, including assessments of environmental effects. In Thailand in particular, where the Ajinomoto Group has established a specialized subsidiary to commercialize resource recycling in the agricultural sector, the group is strengthening research and technology development functions. The progressing research and development of uses for these co-products is leading to a growing body of scientific knowledge about the effects of their use. This knowledge includes the fact that co-product fertilizers are rich in active ingredients such as organic nitrogen and minerals, and are highly effective at improving the growth and quality of crops, as well as at activating soil microorganisms and the functional capabilities of the soil itself. The Ajinomoto Group believes that this research and development of its co-products has great social significance. See the Environmental Research and Technology Development section for details. See the Ajinomoto Group Intellectual Property Information Disclosure 2006 website for details about environmental research and technology development. Types of by-products and sample uses By-products Uses Concentrated fermentation liquors Microbial cell proteins Solid by-products (Waste activated carbon, excess sludge, by-product salts, filter aids, etc.) Liquid fertilizer: field crops, industrial crops, fruit trees (Asia, North and South America) Liquid feed: cattle (EU, North America), aquaculture (Thailand) Raw material for solid fertilizer (Japan) Silage additive Protein feed: cattle, hogs (EU) Raw material for solid fertilizer Soil conditioners Raw material for cement Fuel, etc. Bio-cycle : A System for Community Recycling of By-products The Ajinomoto Group has created an organic system of resource recycling that effectively utilizes the by-products derived from its amino acid fermentation production process within the local community. This system is called the Biocycle. By working hand-in-hand on this cycle with relevant industries in the community, the group is succeeding in recycling 99% of the by-products derived from its amino acid fermentation production process. The Bio-cycle system was made possible through the close cooperation with local communities that the Ajinomoto Group has been working on for 30 years. It is a fruit of the basic philosophy the group follows when developing a business outside Japan, namely promoting businesses that are rooted in the lifestyles and culture of their local communities. The long-term commitment that has gone into building this recycling-oriented business model is the basis for the improvement in resource utilization that the Ajinomoto Group is currently working on. Bio-cycle Contributes to reduction in CO2 emissions associated with production of chemical fertilizer Accounts for approximately 70% of nitrogen fertilizer required for 500,000 hectares of sugar cane fields Organic fertilizer 1.6 million tons By-products recovered as useful resources Recycling-oriented production process Unitization of by-products 1.6 million tons AJI-NO-MOTO seasoning plant Product AJI-NO-MOTO 500,000 tons Cane molasses (Syrup derived from sugarcane) Sun 500,000 hectares Sugar cane fields Absorption of atmospheric CO2 28 million tons Chemical fertilizer Harvest Sugar cane crop 38 million tons Sugar production plant Sugar (crude) 1.5 million tons 4.2 million tons The chart assumes worldwide annual production of approximately 500,000 tons of AJI-NO-MOTO seasoning produced by the Ajinomoto Group using only sugar cane. The values for sugar cane grown and sugar production represent average global use, while the values for resources used for producing AJI-NO-MOTO and values for by-products are based on actual Ajinomoto Group statistics. 41

43 Various Environmental Initiatives Effective Utilization of By-products The Bio-cycle system and its results A typical example of the Bio-cycle at work can be seen in the production of the umami seasoning AJI-NO-MOTO in Brazil. A locally owned sugar mill runs at the center of extensive sugarcane fields managed by local farmers. In the vicinity of the sugar mill, the Ajinomoto Group operates a fermentation plant. Sugarcane grows and stores sugar by absorbing CO2 from the atmosphere through photosynthesis. About 3,800 tons of sugar cane are harvested from 50 hectares of sugarcane fields and delivered to the sugar mill. The mill produces about 420 tons of raw sugar as a product, and 150 tons of molasses as a by-product. The Ajinomoto Group s fermentation plant uses the molasses as a raw material, and with the use of the capabilities of microorganisms turns it into 50 tons of the umami seasoning AJI-NO-MOTO. The process simultaneously produces 160 tons of liquid and solid by-products that are rich in nutrients. The Ajinomoto Group converts these byproducts into organic fertilizers and returns them to the sugarcane fields that produced the original raw material. Sugarcane grows using the fertilizer, and the resource recycling cycle is repeated. This system has enabled necessary chemical fertilizers containing nitrogen to be reduced by about 70%. The fiber (bagasse) and other remains left over after pressing the sugarcane is combusted and utilized as energy for the sugar mill. In this way, the Bio-cycle also contributes significantly to curbing CO2 emissions. The Ajinomoto Group would like to develop its amino acid fermentation production system into a system that can produce products such as sugar and the umami seasoning AJI- NO-MOTO using only the sun s energy and the carbon, hydrogen, oxygen, and nitrogen cycles, with the addition of only a little extra nitrogen. In this way the Bio-cycle business model, which has important social scientific factors, in addition to production technology and technology to effectively utilize by-products, has become firmly established during the Ajinomoto Group s long history of locally-based business activities. Pursuing the next big leap in the recycling-oriented business model The Ajinomoto Group wants to contribute locally through its businesses to the conservation of the environment, economic development, and improved standards of living. The group wants to take the next big leap with its business model for amino acid fermentation production and turn it into a system that can contribute more to local communities. The group aims to accomplish this through the accumulation and dissemination to the local community of scientific knowledge gained from the Bio-cycle, as well as dialogues with community members. In 2001, the Ajinomoto Group established FD Green (Thailand) Co., Ltd., a specialized subsidiary whose main business is the recycling of resources in the agricultural sector. The company has carved out a position as a top producer of organic fertilizer in Thailand, and is actively conversing with and educating the agricultural population and other members of local communities, as well as providing technological support a precedent for the Ajinomoto Group s environmental initiatives that produced the group s recycling-oriented business model and the Ajinomoto Group Zero Emissions environmental vision. From a company brochure about FD Green (Thailand) Co., Ltd. A beneficial system for the entire local community The basic philosophy that the Ajinomoto Group stands by when developing businesses outside Japan is to promote businesses that are rooted in the lifestyles and cultures of their local communities. The group follows the same philosophy when thinking about resource recycling. The Bio-cycle not only contributes to the effective utilization of resources; rooted in its close relationship to the community, the system goes beyond the mere recycling of resources and produces benefits for the entire local society from different angles, including finished products, by-products, employment, consumption, and lifestyle. Fertilizers manufactured from by-products derived from the Ajinomoto Group s amino acid fermentation production can be supplied at lower prices than chemical fertilizers. Consequently, they contribute to raising the profits of farmers, in terms of both income and outlays, in addition to the benefits to crops and the soil of applying fertilizer. The Ajinomoto Group has a nearly 50-year history of local production that uses local agricultural products as raw materials. Throughout this time, the group has deepened its relationship to local communities, starting with farmers, across all business domains from product development and raw material procurement to employment, manufacturing, distribution, and marketing. Effective Utilization in Different Countries and Communities The Ajinomoto Group has about 30 amino acid fermentation plants in 14 countries, and conducts community-based production activities in each country. The group distributes by-products derived from the amino acid fermentation process as amino acid by-product fertilizers, and is developing other uses according to the circumstances of the agricultural industry in the local community and the location of the plant. 42

44 Various Environmental Initiatives Effective Utilization of By-products In Brazil, for example, which is a top producer of sugar and oranges, the Ajinomoto Group markets about 50% of its coproducts as fertilizer for sugarcane, and about 40% as fertilizer for oranges. In the Philippines, it markets almost all its coproducts as fertilizer for sugarcane. In Vietnam, it markets about 60% as fertilizer for rubber plantations, and the rest as fertilizer for cultivating sugarcane, pineapples, coffee, and nuts. In Thailand, it markets its co-products as aquaculture feed for raising fish and shrimp in coastal areas. The methods for applying fertilizer are varied, even for the same crops. In addition to dispersion from trucks, fertilizers are applied using diverse methods, including hand casting, mixing in irrigation water, and sprinklers, according to the agricultural situation of the country. Uses of amino acid by-product fertilizers in different countries Pasture grass 4% Coffee 1% Other 2% Coffee, fruit trees 2% Rice, corn 2% Oranges 43% Sugarcane 50% Sugarcane 96% Brazil Philippines Nuts 3% Other 17% Sugarcane 2% Other 1% Coffee 4% Pineapples 5% Sugarcane 11% Vietnam Rubber 60% Aquaculture 97% Thailand Application of amino acid by-product fertilizer (liquid) in different countries Thailand Indonesia Peru Brazil 43

45 Various Environmental Initiatives Proper Management of Chemical Substances Proper Management of Chemical Substances The Ajinomoto Group thoroughly manages chemical substances from purchase through release and disposal. The types and amounts of chemical substances are controlled using databases, and workers are thoroughly educated and trained to make doubly sure that chemicals are handled properly. The Ajinomoto Group uses PRTR* substances, mainly in its pharmaceutical and specialty chemical R&D activities and in the manufacturing of related products. We maintain a database containing the types and amounts of such chemical substances, and appropriately manage them in accordance with rules we have established. We have also prepared various education and training systems for employees who handle these substances, and encourage their acquisition of knowledge and skills and heightened awareness. We make the utmost effort to safely dispose of used chemical wastes in accordance with applicable laws and regulations. * Pollutant Release and Transfer Register (PRTR). A system requiring the investigation and registration of the amounts of environmental pollutants released to all media (air, water, and soil), as well as the amounts that are transferred as waste to waste-disposal companies. * PRTR Law: A law regarding the promotion of improvements in keeping track of and managing the amounts of specified chemical substances released to the environment. Keeping Track of and Managing PRTR Substances In accordance with the PRTR Law,* the Ajinomoto Group s business sites in Japan keep track of the handled, released, and transferred amounts of the 354 Class 1 designated chemical substances that are handled in amounts exceeding 100o per year at a single site. In fiscal 2005, those group sites handled 18 Class 1 designated chemical substances in amounts exceeding one ton per year. In addition, the Ajinomoto Group s business sites outside Japan, mainly those that manufacture specialty chemicals, used 12 of these substances, such as toluene solvents. PRTR Substances and Volumes Released Aggregation scope: Ajinomoto Co., Inc. and its subsidiaries in Japan Aggregation period: April 1, 2005 to March 31, 2006 Accountable Substances: Class 1 designated chemical substances, those used in amounts of 100o/year or more at each operation site Unit: O Amount released to environment Amount Volume Amount Amount Substance name Volume used in transferred decomposed recycled Air Water Soil products to waste N,N-dimethylformamide 686, , ,813 0 Polymer of 4,4 -isopropylidenediphenol and 1-chloro-2,3-epoxypropane 148, ,007 64,875 14,063 0 Toluene 108,614 91, , ,962 0 Acetonitrile 106,660 7, ,430 0 Antimony and its compounds 69, , Pyrocatechol 66, , Formaldehyde 37, , Dichloromethane 34, ,216 31,324 m-phenylenediamine 23, , Decabromodiphenylether 19, , Thiourea 11, ,665 8, ,4 -isopropylidenediphenol 9, , Xylene 7,854 1, , Chlorodifluoromethane 5,491 5, Phenol 3, , Piperazine 2, , Bis(2-ethylhexyl) phthalate 1, , ,3,5-trimethylbenzene 1, Total 1,344, , , , ,870 31,324 Note: 1. The chart lists Class 1 designated chemical substances that were used in amounts of 1000o/year or more across the entire Ajinomoto Group. 2. The amount used in products is the amount of chemical substances released as constituents of manufactured chemical products. 3. The amount decomposed means the amount decomposed and changed into another substance during manufacturing. 44

46 Various Environmental Initiatives Proper Management of Chemical Substances Management of Flons The Ajinomoto Group stores flons as refrigerants for refrigeration equipment. Among these substances, the manufacture of CFCs* 1 and HCFCs* 2 is regulated under the Montreal Protocol as substances that destroy the ozone layer, and HFCs,* 3 with their high global warming potential that ranges from a thousand times to several thousand times that of CO2, are targeted for reduction under the Kyoto Protocol. The Ajinomoto Group Zero Emissions Plan sets the goals of discontinuing the use of CFCs by 2007, and as much as possible replacing refrigeration equipment that uses HCFCs and HFCs with equipment that uses natural refrigerants, depending on the state of development of alternative refrigerants. As of March 31, 2005, the Ajinomoto Group had a store of about 210 tons of flons, about 40 tons of which were CFCs. The group estimates that about 13 tons of flons leaked into the atmosphere during the maintenance of refrigeration equipment. The company plans to further strengthen management to prevent such leakage. See the Environmental Vision page for details on the Ajinomoto Group Zero Emissions Plan. *1 CFC: Chlorofluorocarbon. Manufacture of CFC was banned in developed countries in 1996 under the Montreal Protocol. *2 HCFC: Hydrochlorofluorocarbon. Manufacture of HCFC will be banned in developed countries under the Montreal Protocol beginning in *3 HFC: Hydrofluorocarbon. HFC does not destroy the ozone layer and is known as a CFC substitute, but still has a high global-warming potential. 45

47 Various Environmental Initiatives Measures against Soil Pollution Measures against Soil Pollution The Ajinomoto Group conducts voluntary soil pollution investigations, mainly at production plants in and outside Japan. The company reports any issues deemed to require countermeasures to the relevant authorities, and takes appropriate action at those sites. The Ajinomoto Group has established the following basic policies to prevent and reduce soil pollution. In line with these policies, the group conducts complete evaluations, in order of precedence, of the status of soil pollution at companyowned sites. Whenever sites requiring action are identified, the group will deal with these situations reliably by responding quickly and appropriately under the guidance of the authorities, disclosing information, and taking every possible means to avoid causing trouble to neighborhood residents. Basic policy on soil pollution 1. We will comply with laws and regulations concerning soil pollution. 2. We will manage soil quality so that it has no impact on public health or the surrounding environment. 3. We will disclose necessary information on soil pollution to stakeholders. 4. We will prevent further soil pollution from occurring. Fiscal 2005 Investigation Results Results of main soil pollution investigations Pollution status and Location countermeasures Headquarters of Ajinomoto Fine-Techno Co., Ltd. (adjacent to the Kawasaki Plant of Ajinomoto Co., Inc.) Former site of Mercian Corporation old plant site (site of planned construction of Ajinomoto Co., Inc. new food research building) Lead and organochlorine compounds were found in some soil when a site survey was conducted before reconstructing a building. Reports were submitted to the local authorities and the removed polluted soil was properly treated. At the same time, the company has also been gaining a detailed understanding of the pollution status at the site and studying soil pollution countermeasures. Surplus soil was removed and temporarily stored on the site during building construction. While soil pollution was not found at the site in a voluntary survey conducted in fiscal 2004, appropriate measures were taken to deal with the soil, such as preventing it from becoming airborne, while complying with applicable regulations (construction completed in June 2006). Note: Kawasaki Plant and surrounding area. Implemented mainly in fiscal Ajinomoto Co., Inc. made a general review of the environmental protection construction completed in March 2005 at the Kawasaki Plant of Ajinomoto Co., Inc., and submitted a report to the authorities in June The Ajinomoto Group also undertook anti-pollution construction at the site of Ajinomoto Fine-Techno Co., Ltd., which is adjacent to the Kawasaki Plant. As before, the company also continued to regularly monitor the groundwater at the Kawasaki Plant. Additionally, Ajinomoto Co., Inc. conducts a soil survey whenever buying or selling a site, and takes appropriate action wherever survey results exceed standard values. 46

48 Various Environmental Initiatives Environmentally Friendly Containers and Packaging Environmentally Friendly Containers and Packaging Containers and packaging necessarily come along with products purchased by consumers. The Ajinomoto Group is committed to environmentally friendly containers and packaging, having early on recognized this responsibility as a manufacturer. Moreover, the Ajinomoto Group aggressively encourages cooperation with trade organizations and consumers to promote society-wide efforts to improve the environmental friendliness of containers and packaging. Containers and packaging serve a variety of essential purposes when it comes to maintaining the quality of products. These include being the face of a product that encourages purchase, providing a variety of information about a product s contents, making products more convenient to use, and preserving product content. On the other hand, containers and packaging often end up as trash when the product has been used. Hence the need for environmentally-friendly design that emphasizes careful selection of materials, conservation of resources, and ease of separation at the time of disposal. As a manufacturer, the Ajinomoto Group is aggressively addressing these issues. In addition, the group is pursuing communication with trade organizations and consumers in an effort to build a framework to enable society-wide initiatives that deal with containers and packaging throughout their lifecycles. Original Standards for Environmental Impact Assessments: Ajinomoto Co., Inc. s Eco-Index for Containers and Packaging Ajinomoto Co., Inc. established the Eco-Index for Containers and Packaging to delineate standards and a direction for the selection and design of environmentally friendly containers and packaging. The company actively encourages group companies to utilize the Eco-Index. The company has been using the Eco-Index for Containers and Packaging as original standards for assessment since The Eco-Index is updated as necessary to continually improve the group s environmental efforts. As of September 2006, the group is using version 7 for household products and version 3 for business-use products. Eco-Index for Containers and Packaging Purpose Evaluation item Evaluation points Reduction of environmental loads Contributing to a recycling-oriented society Efficient use of resources Prevention of global warming Promotion of recycling Extra information Reduction in volume of packaging materials Selection of materials Recyclability Labeling Volume of disposed packaging materials Weight-reduction ratio Degree of overpackaging Availability of refill products Reduction in CO2 emissions Assessment items for special points Environmentconscious criteria Universal design criteria Use of materials derived from plants Utilization ratio of recycled products Adaptability to separatedwaste collection Adaptability to recycling systems Reduction in volume for recycling and disposal Availability of environmental labeling (Availability of environmentally conscious labeling) Ratio of weight of individual containers to product content, assuming containers discarded after use (external packaging and cushioning packaging materials are also included for bulk products) Is the weight of individual packaging materials less than that of existing and similar products? Can product content be removed from the container by removing the packaging material in one step? Is the applicable product based on a refillable concept? (not applicable to business-use products) Ratio of reduction in CO2 emissions (LC-CO2) from material procurement to disposal of packaging material Are any plant-derived materials used to contribute to a reduction in CO2 emissions? Amount of recycled materials used for individual packaging Can recyclable portions be easily segregated for disposal? Are materials adaptable to existing recycling systems? Can the volume of container and packaging materials be reduced, after use, for disposal? Is any useful information or labeling related to environmental concerns displayed, in addition to the legally required labels? Are improvements made, compared with existing or competing products, other than those reflected in the above evaluation items? To what extent is universal design considered? Main revisions made thus far: Adopted different assessment criteria for household products and business-use products Amended assessment items in terms of resource recycling instead of waste disposal Replaced the assessment item, heat generation when incinerated, with CO2 emissions Made the Eco-Index useful for business departments to make assessments Included concept of universal design in assessment items /Added consideration of people to the Eco-Index, not just the global environment Assessment of containers and packaging when new products are developed or existing products are improved A Quality Assessment for Newly Developed Products is always performed whenever new Ajinomoto brand products are developed or existing products improved. The Eco- Index for Containers and Packaging is included under the packaging materials assessment item, and is used as the standard for performing environmental assessments of containers and packaging. 47

49 Various Environmental Initiatives Quality Assessment for Newly Developed Products Major items Secondary items 1. Raw material Legitimacy 2. Production process 3. Products 4. Packaging material 5. Display labels Contents Eco-Guidelines for Containers and Packaging Main Household Products Initiatives Past initiatives Safety Public acceptance Quality control measures Development of environmentally friendly products for gift business In 1992, Ajinomoto Co., Inc. introduced paper packages as containers for edible oils, for which the mainstream packaging practice at the time was metal cans. This product packaging which was made of plant-derived material, could be folded easily before disposal, and was sold in a set with oil solidifying agents was praised for its environmental friendliness and won the Japan Packaging Contest s (JPC) highest award, the Minister of International Trade and Industry Award. In 1999, Ajinomoto Co., Inc. released Kankyo-Ippin, a new series of environmentally friendly gift sets. The sets included edible oils in bottles and upright refill pouches (eco-pouches) sold together in pairs in cardboard boxes that were intentionally designed to conserve resources. However, marketing of the gift sets was discontinued, as they were unfortunately too far ahead of their time and did not sell well. Despite experiencing the difficulty of promoting an environmental viewpoint for gifts, the company continued to study how it could deliver environmentally friendly products to consumers. Later, it added a perforated line of cardboard boxes, which made them easier to fold. In 2006, the company introduced a plant-derived plastic tray, using the Ajinomoto Group s fermentation technology, for gifts given as part of Japan s midsummer gift-giving season. Gift that won JPC s highest award (1992) An environmentally friendly gift that included 100% pure oil in a paper package, along with accompanying oil solidifying agents Suitability of package for distribution Measures for environmental protection Must be checked during assessment Released in 1992 Discontinued in 1994 Design considerations (for each material) Material labeling guidelines for packaging material Recent initiatives Environmentally Friendly Containers and Packaging Kankyo-Ippin environmentally friendly gift sets By combining the base and the lid of the box into a single piece, the need for paper was reduced by 16%. Efficient use of resources Efficient use of resources Shape 1 released in May 1999 Shape 2 (vertical box) released in May 2000 (department stores-only [excluding supermarkets]) Discontinued after year-end gift-giving season in December 2001 See the J-OIL MILLS, INC. web page (in Japanese only) for details on products currently being sold, including edible oils in upright refill pouches (eco-pouches) and eco-bottles. See previously published reports for other examples of the Ajinomoto Group s main initiatives Ajinomoto Group Environmental Report 2001 (pp ) Ajinomoto Group Environmental Report 2002 (pp ) Ajinomoto Group Environmental Report 2003 (pp ) Ajinomoto Group CSR Report 2004 (p. 75) Ajinomoto Group CSR Report 2005 (p. 65) Thus far the Ajinomoto Group has continuously reconsidered the sizes and shapes of its containers with a view toward the efficient use of resources, making them lighter, thinner, shorter, and smaller. In addition, the group has recently changed containers and packaging from petroleum-derived plastic trays to paper trays and plant-derived plastic trays, with a view toward an environmentally friendly selection of raw materials. Paper cartons (called cartocans ) adopted (fiscal 2005) Using a vertical box with a perforated opening, the need for paper was reduced by a further 20%. The paper packages are made of lumber derived from the thinning of forests, a process that contributes to the health of the forest. The paper packages can also be recycled after use. In addition, even if some packages are burned after disposal, the Kyoto Protocol does not regard this as contributing to global warming, since the raw materials used in the packages are derived from trees which absorb CO2 as they grow. The packages are also lighter than metal or glass beverage containers, so less CO2 is emitted during transportation by truck. 48

50 Various Environmental Initiatives Environmentally Friendly Containers and Packaging Development and introduction of plant-derived plastic Contributes to reduction of petroleum-derived CO2 Weight of Containers and Packaging over Time See the Environmental Research and Technology Development section for details on the development of plant-derived plastic. Paper trays introduced (fiscal 2005) 30Nand 75Nbottles of AJI-NO-MOTO with shrink film (fiscal 2003) Ajinomoto Co., Inc. developed and introduced plastic film for shrink labels made from polylactic acid, using corn as the raw material. Trays for gift products (launched during 2006 midsummer gift-giving season) In cooperation with Mitsubishi Chemical Corporation, Ajinomoto Co., Inc. developed and introduced a plastic made from plant-derived succinic acid using the Ajinomoto Group s fermentation technology. Reduced the weight of its plastic consumption by 95 tons per year by changing from plastic to paper trays. /Petroleum-derived CO2 reduced by 354 tons per year Changed construction of cup containers (fiscal 2005) Through its efforts to develop and introduce environmentally friendly containers and packaging, Ajinomoto Co., Inc. has reduced the overall weight of containers and packaging used for its products. The main factor was the reduction of weight of glass bottles and metal cans. On the other hand, the weight of plastic consumption alone has been increasing. Social conditions nowadays, such as decreasing household size, diversification of eating habits, and the increased taking of meals alone, may be greatly affecting this trend. Going forward, the Ajinomoto Group will continue fulfilling its responsibilities as a food manufacturer, meeting the detailed needs of its consumers while paying increased consideration to the environment. Expenses for Outsourcing Recycling Services and Weight of Containers and Packaging by Container Material Type for Products Sold by Ajinomoto Co., Inc. Over Time Weight ( thousands ) of tons PET bottles (for beverages) Plastic Paper 2005 Glass bottles Recycling Outsourcing Expenses Cardboard Metal cans Recycling Outsourcing Expenses ( millions) Note: Expenses for outsourcing recycling services are estimated based on the weight of the containers and packaging of the year before the previous fiscal year. Improving Society-wide Efforts Reduced the weight of its paper consumption by seven tons per year after confirming that insulation effectiveness and sufficient strength were maintained after removing one layer of insulating paper from paper cups. Also reduced the weight of its plastic consumption by scalingdown the dimensions of inner packets and changing the material used for the lids. Knorr soups in cups (four kinds) Reduced consumption of inner packets (fiscal 2005) Coordination with distributors and raw material makers is essential for manufacturers to design, develop, and market environmentally friendly products. Society-wide efforts, including the cooperation of consumers and the development of frameworks by the government, are also important for ensuring that containers and packaging get separated according to the developers intentions and utilized effectively after products are delivered to consumers. The Ajinomoto Group regards this point as important and therefore works aggressively on communicating with its stakeholders. Communication with consumers Reduced the weight of its plastic consumption by eight tons per year by scaling-down the dimensions of inner packets and making the material even thinner. Five serving packages of dried soups (four kinds) In recent years, society s eating habits have become extremely diversified. Containers and packaging have also necessarily become diversified in order to meet these new consumer needs. Depth of environmental awareness on the part of the consumers who select products is important in reducing the use of containers and packaging. 49

51 Various Environmental Initiatives Environmentally Friendly Containers and Packaging The Ajinomoto Group is working to enhance communication with its consumers in the belief that establishing a framework in which the environmental friendliness of its products is a primary factor behind consumer purchasing is a shortcut to the creation of a sustainable, recycling-oriented society. In fiscal 2005, the Ajinomoto Group participated in two exhibitions to introduce its environmentally friendly containers and packaging and universal design efforts. the communication of environmental information using familiar products. Packaging Exhibition for Daily Living 2005 (October 2005) Ajinomoto Co., Inc. has continuously participated in the Packaging Exhibition for Daily Living, which is put on every two years by the Japan Packaging Institute. The company exhibited products in different scenarios (purchasing, using, storing, and disposing) that demonstrated the thought that went into the containers and packaging in each of three themes: environmental, universal design, and value-added packaging. The company also made an exhibit entitled, Eco-Packages People Want. Before making these packages, the company first asked consumers to send in their ideas for environmentally friendly designs. The resulting sample containers were actually produced based on these customer ideas. The exhibit included a trial run of refillable packages for AJI-NO-MOTO seasoning, as well as a trial run of mayonnaise containers for which there were a particularly large number of proposals that were made such that the containers could be taken apart and were completely empty and compact when disposed. This was the first such project the company undertook. It was very informative, as the company recognized that consumers ideas of environmental friendliness extend beyond the framework of resource conservation. Going forward, the Ajinomoto Group will continue to work together with consumers in an effort to develop even more environmentally friendly containers and packaging. Eco-Products 2005 (December 2005) In December 2005, Ajinomoto Co., Inc. participated for the first time in the Eco-Products Exhibition, one of the largest environmental exhibitions in Japan. The exhibits of the Ajinomoto Group s representative environmental activities: (1) the group s Bio-cycle resource-recycling production system employed in amino acid fermentation production; and (2) its initiatives relating to environmentally friendly containers and packaging, generated interest among consumers both from within and outside Japan in Ajinomoto Co., Inc. s Eco-Index for Containers and Packaging. By participating in the exhibition, the Ajinomoto Group recognized the importance of direct communication with consumers and Cooperation with food manufacturers Launch of an Investigative Commission on Food-related Environmental Problems Containers and packaging are essential to delivering safe food products to consumers. At the same time, a resource recycling frame of mind is also indispensable. In 2005, the tenth year since the Containers and Packaging Recycling Law (C&P Recycling Law) came into effect, the relevant ministries (Ministry of the Environment, Ministry of Economy, Trade and Industry, and Ministry of Agriculture, Forestry and Fisheries) considered revising the law. Presently, plastic containers account for the majority of the recycling fees imposed by the C&P Recycling Law; about half of those fees come from the food industry. After products are delivered to consumers, the containers and packaging must go through the resource recycling process, including separation, collection, and recycling. The issue of what kind of social framework is needed to make this process move forward smoothly needs to be studied. Ajinomoto Co., Inc. and other manufacturers proposed and launched an Investigative Commission on Food-related Environmental Problems in October The objective of the commission, which is composed of managers from the environmental departments at leading food product manufacturers, is to investigate the most effective and realistic social framework for recycling containers and packaging. Currently, 24 companies are participating. Ajinomoto Co., Inc. is one of seven core members that steer the commission forward. Taking the opportunity to obtain and share information on trends relating to the C&P Recycling Law, the investigative commission plans to utilize the first-hand knowledge of each company to study the most effective and practical social frameworks that could contribute to solving an array of environmental problems. Cooperation with companies, consumers, and the government Participation in the Diet Container Campaign The Diet Container Campaign was launched in November The campaign was planned and promoted by eight municipalities and prefectures: Saitama Prefecture, 50

52 Various Environmental Initiatives Environmentally Friendly Containers and Packaging Chiba Prefecture, the Tokyo Metropolitan Government, Kanagawa Prefecture, Yokohama City, Kawasaki City, Chiba City, and Saitama City. Ajinomoto Co., Inc. has been participating since the campaign was launched. The objective is to strengthen cooperation among companies, consumers, and government which will be needed even more in the future to drive forward the reduction of containers and packaging. By providing information on companies that are reducing the amount of packaging they use, the government is promoting understanding and support among consumers, while also working to decrease the amount of household waste produced. Ajinomoto Co., Inc. has produced examples of environmental packaging based on its Eco-Index for Containers and Packaging. Further information on the Diet Container Campaign is available at the campaign website at: (in Japanese only) Participation in the Green Purchasing Network s Food Products Study Group The Green Purchasing Network (GPN) has launched a project for studying concrete concepts with the aim of establishing green purchasing guidelines for environmentally friendly food products. The objective of the guidelines is to promote adoption of a lifecycle perspective from the cultivation and rearing of raw materials through food processing, distribution, consumption, and disposal when thinking about the meaning of environmentally friendly food products. As a member of the Food Products Study Group, which includes representatives from consumer organizations, NPOs, companies, and the government, Ajinomoto Co., Inc. is promoting discussions on the environmental friendliness of diversifying food products, in addition to the recycling of containers, packaging, and food scraps, with the aim of preparing proposals for winter Ajinomoto Co., Inc. is a member of the Green Purchasing Network. Further information is available at the Green Purchasing Network website at: 51

53 Various Environmental Initiatives Logistics-related Efforts Logistics-related Efforts The environmental impact that occurs in a variety of logistics situations, from the procurement of raw materials to the delivery of products to customers, cannot be ignored. Under the slogan of Environmentally Friendly Logistics, the Ajinomoto Group in Japan is reaching out beyond the group to work with all relevant stakeholders in an effort to reduce logistics-related environmental impact. Modal Shift Efforts The most important logistics-related environmental challenge for the Ajinomoto Group is the reduction of CO2 that is emitted during the transportation of its products. The Ajinomoto Group in Japan commissions carriers outside the group to handle about 80% of the transportation of products from manufacturing plants to logistics centers, and from logistics centers to sales destinations. Accordingly, as the consignor, the Ajinomoto Group is pushing forward the reduction of CO2 emissions resulting from product transportation by proactively selecting environmentally-friendly means of transport (modal shift). Specifically, in fiscal 1995, the group began introducing in earnest the use of railway container shipments having taken note of their low environmental impact which produce only one-eighth of the CO2 emissions of truck shipments. Since then, the group has placed the expansion of the distances over which modal shift is implemented at the center of its logistics-related environmental initiatives. Raising the Ajinomoto Group s modal shift ratio Between fiscal 2002 and fiscal 2005, Ajinomoto Co., Inc., AJINOMOTO LOGISTICS CORPORATION, and Ajinomoto Frozen Foods Co., Inc. periodically held Study Meetings for Environmentally Friendly Logistics with the support of the Japan Freight Railway Company (JR Freight). The meeting participants studied means of reducing logistics-related environmental impact, focusing on the promotion of modal shift. In August 2004, the Ajinomoto Group succeeded in increasing its modal shift ratio by introducing 15-foot rail containers that can each hold eight pallets for use over mid-range distances for which trucks are the main conventional transportation means, in addition to using rail shipments for long-range distances. These efforts have been well received. In May 2005, Ajinomoto Co., Inc., Ajinomoto Frozen Foods Co., Inc., and Ajinomoto General Foods, Inc. were chosen in the first group of companies approved for the Eco Rail Mark of the Ministry of Land, Infrastructure and Transport. The Eco Rail Mark is granted to companies that are making an effort to use rail freight shipments, which have less impact on the environment. In addition, cooperation between companies is indispensable to increasing transportation efficiency. In July 2005, Ajinomoto Co., Inc. and House Foods Corporation, which is also approved for the Eco Rail Mark, began sharing large 31- foot rail containers between the Tokyo Metropolitan area and the Kansai region. Under this arrangement, Ajinomoto Co., Inc. uses large rail containers that used to be returned empty after shipping products from House Food s Rokko Plant in Kobe to Hasuda City in Saitama Prefecture to ship its own products from the Tokyo Metropolitan area to the Kansai region. Thus, the two companies achieved more efficient rail container shipments from Kobe to Hasuda to Kawasaki to Nishinomiya and back to Kobe. A joint operation such as this requires the two companies to coordinate cargo receiving and loading times, making this an example of a forward-looking effort in direct cooperation between manufacturers. The Ajinomoto Group expects this joint operation of rail containers to reduce CO2 emissions by 253 tons per year, a 0.6% reduction from the previous fiscal year.* The Ajinomoto Group s efforts to push modal shift forward have resulted in steady improvements in the company s modal shift ratio for product transportation in Japan, gross CO2 emissions, and CO2 emissions per unit of transportation. In fiscal 2005, the group s modal shift ratio for product transportation in Japan reached 28.8%, an increase of 2.5 points from the previous fiscal year. Gross CO2 emissions and CO2 emissions per unit of transportation fell by 4.5% and 4.3%, respectively. * Compared to fiscal 2004 CO2 emissions for shipping food-related products in Japan for Ajinomoto Co., Inc., and products in Japan for Ajinomoto Frozen Foods Co., Inc. Modal shift ratio by product Unit: % FY2003 FY2004 FY2005 By rail By sea Total By rail By sea Total By rail By sea Total Seasoning and foods Gifts Frozen foods Total Note: The modal shift ratio, which uses a tonnage-kilometer basis, applies to products of Ajinomoto Co., Inc. (excluding Mieki shipped in bulk) and Ajinomoto Frozen Foods Co., Inc. that are transported by railway and sea. Transport by land accompanying rail and sea transport is calculated as truck transport. Large rail containers 52

54 Various Environmental Initiatives Logistics-related Efforts ton-co2 CO2 emissions and CO2 emissions per unit of transportation of products in Japan 50,000 40,000 30,000 20,000 10,000 0 Unit CO2 emissions CO2 emissions 44,812 44,933 42,788 40, Note: CO2 emissions are for Ajinomoto Co., Inc. (including Mieki shipped in bulk) and Ajinomoto Frozen Foods Co., Inc (FY) N-CO2/tonnage-kilometer deliveries associated with their business activities. Accordingly, the Ajinomoto Group is paying due consideration to reducing environmental impact from the delivery of products to sales destinations, in addition to its efforts thus far in terms of modal shift, concentration of inventory centers, and increasing the load efficiency for moves between these centers. In addition to advancing its own efforts as a consignor, the Ajinomoto Group is also making efforts to raise its delivery efficiency by cooperating with logistics companies and trade partners. Approval for the Eco Rail Mark The Eco Rail Mark is a certification given to companies and products that use more than a certain percentage of rail freight. In May 2005, three Ajinomoto Group companies (Ajinomoto Co., Inc., Ajinomoto Frozen Foods Co., Inc., and Ajinomoto General Foods, Inc.) were chosen in the first group of companies approved for the mark. The Ajinomoto Group prints this mark in its product pamphlets to display the group s environmentally-friendly logistics stance to those both in and outside the group. Eco Rail Mark displayed in a product pamphlet Initiatives to improve pallet load efficiency Effective utilization of the space on a truck bed or inside a container when delivering products means that trucks are not used unnecessarily, thereby curbing the generation of CO2. Normally when shipping products, the individually packaged products are packed into cardboard cases, which are loaded onto pallets, which are then loaded into a truck or container. Accordingly, how well the cardboard cases can be loaded onto the pallets without wasting any space in other words, how much the pallet load efficiency can be increased has become an important issue. With this issue in mind, Ajinomoto Co., Inc. revised the unit price setting for warehousing and handling fees, changing them from a per-case unit to a per-pallet unit. The per-case price for warehousing and handling fees can be lowered by increasing the number of cases that can fit onto a pallet, by designing the shape of the cases to maximize pallet load efficiency when developing new products. With the adoption of this system, Ajinomoto Co., Inc. has made headway in its effort to improve pallet load efficiency for existing products as well as for new products. Complying with consignor s responsibilities under the revised Energy Conservation Law The revised Energy Conservation Law, which came into effect in April 2006, obliges consignors to make an effort to reduce environmental impact generated through transportation and Initiatives of the AJINOMOTO LOGISTICS CORPORATION Group In April 2005, the AJINOMOTO LOGISTICS CORPORATION Group (ALC Group, AJINOMOTO LOGISTICS CORPORATION and seven consolidated subsidiaries), the logistics arm of the Ajinomoto Group, started building an environmental management system (EMS) with the aim of acquiring ISO certification. In June 2006, the ALC Group obtained collective certification. In the process of acquiring certification, the ALC Group built a foundation for environmental activities based on the Plan, Do, Check, Act (PDCA) cycle of accurately understanding the current situation and working to make improvements. Having gotten off of the starting line, the ALC Group will continue working to reduce environmental impact as a logistics company. It will work to promote eco-driving, reduce environmental impact through reduction of industrial waste, and support its consigners in complying with the revised Energy Conservation Law. Moreover, the ALC Group is aiming to build an environmentally-friendly logistics system by cooperating with its customer consignors. Building an EMS In fiscal 2005, the first year after the ALC Group acquired collective ISO certification, gaining an understanding of its environmental impact turned out to be the main environmental management initiative. The process of building an EMS gave each employee an opportunity to think about how their daily work is connected to the environment and what types of environmental impact are conceivable. In particular, the ALC Group aggressively addressed important challenges in terms of resource and energy conservation and the reduction of environmental impact centered on CO2, which is thought to have the largest environmental impact for a logistics company. Main initiatives in fiscal Establish a framework for applying the PDCA cycle, and steadily achieve goals and tackle tasks 2. Establish frameworks for ensuring legal compliance and preventing environmental risk to the community 3. Maintain harmony with society and the community by increasing environmental awareness through education 53

55 Various Environmental Initiatives Logistics-related Efforts In addition, in an effort to acquire ISO certification, transportation subsidiaries are building upon their initiatives implemented in line with the Green Management Certification that they already obtained. Each company is making an effort to achieve the numerical goals they set in terms of reducing fuel costs. Specifically, the group companies are undertaking initiatives to reduce CO2 emissions and air pollution by establishing targets for the adoption of low-pollution vehicles and diesel vehicles that meet the latest regulations. Similar targets have also been established to help better manage scrapped vehicles and other waste. Providing digital tachographs to promote eco-efficient driving The ALC Group has adopted digital tachographs to promote eco-efficient driving by advancing the efforts of individual drivers. Equipping a vehicle with a digital tachograph enables numerical evaluations of the degree to which eco-efficient driving is being accomplished. When drivers Digital tachograph themselves know more about their own driving habits, they can independently make improvements. This information also enables others to provide effective advice suited to the driving conditions by understanding the particular driving conditions of each driver. Moreover, as part of their everyday driving practices, drivers of the ALC s transportation subsidiaries do not idle their engines. The ALC Group asks drivers of vehicles from nongroup companies to also cut their engines and stop idling when making deliveries to the ALC Group s logistics centers. Working with customer consignors As a delivery company that carries loads on consignment, the ALC Group cooperates with companies that outsource distribution, working to help their efforts to reduce environmental impact. For example, the ALC Group works with Mos Food Services, Inc., the company that operates the Mos Burger hamburger chain. As the company in charge of logistics services, the ALC Group is participating in that company s effort to develop an environmentally-friendly logistics system that combines food delivery and food waste recycling. See the Initiatives to Reduce Waste section for details on this logistics system that combines food delivery and food waste recycling. Promoting the recycling of wrapping films used to protect products The ALC Group uses large quantities of wrapping films to protect products during transport and storage. The group is making an effort to reduce combustion disposal by commissioning recyclers to recycle the used wrapping films. Currently, the resource recovery of plastic is centered on the Kanto region, but there are plans to expand it across Japan. Involving distribution partners Of the thousands of vehicles used in the ALC Group s transportation business, over 80% belong to the group s external distribution partners. Accordingly, it is important for the Ajinomoto Group to get its distribution partners involved in advancing the environmental initiatives that the group is undertaking across its logistics business. As part of its Environmental Action Plan, the ALC Group has set goals for encouraging its distribution partners to build and put into practice environmental management systems. Specifically, it is encouraging its distribution partners to acquire Green Management Certification by sharing the experiences the group s transportation subsidiaries had when they were preparing to acquire certification. Moreover, the ALC Group offers support to its distribution partners, such as holding joint eco-driving campaigns. See the Greening of the Supply Chain section for related information. 54

56 Various Environmental Initiatives Environmentally Friendly Buildings Environmentally Friendly Buildings The Ajinomoto Group has regarded environmental considerations as an essential part of the design of the group s buildings, which once built are used for a long time. Whenever the group puts up a new building or renovates an existing one, it makes an effort to design buildings that foster harmony among people, the community, and nature by selecting environmentally friendly materials, installing the latest energy conservation technology, and greening the surroundings. The effects of the design concept of buildings reach far into the future, since buildings are used for a long time once they are put up. The effects a building will have on the people who live and work there are immeasurable, as many people will spend long periods in them. The buildings will also affect the landscape and have many other effects on the surrounding community and nature. The Ajinomoto Group emphasizes environmentally friendly designs for buildings and works to ensure designs maintain harmony among people, the community, and nature. Taking a lifecycle view of buildings, the group incorporates a number of environmental considerations into its designs, including the selection of environmentally friendly construction materials, energy conservation, and extension of the service life. Food Products Global R&D Center Given Highest Environmental Efficiency Ranking In June 2006, the construction of the Food Products Global R&D Center was completed on a site adjacent to the Ajinomoto Co., Inc. s Kawasaki Plant. The new research facility, designed with energy-efficiency and environmental friendliness in mind, will serve as the Ajinomoto Group s global base for advanced food technology R&D. The building was designed in line with three concepts: (1) It will serve as a source of information and technology responsive to the needs of global food business, and support innovative and speedy development and commercialization; (2) It will enhance communication with customers and disseminate information on safety and reliability; and (3) It will be an energy-efficient, environmentally-friendly facility with a basic structure that can withstand disasters. Entrance Artistic rendering of the building In addition to its seismically isolated structure, which ensures safety, the building is equipped with energy conservation systems that reduce CO2 emissions by using a compact double screen* 1 to reduce heat build-up, and reducing air conditioning load with a cooling pit* 2 that utilizes the earth s cooler temperatures. With the adoption of these energy conservation systems, the building was expected to reduce CO2 by about 33% compared to buildings that were compliant with the Energy Conservation Law in Consequently, the building was given the very high S Class rating for environmental efficiency on the Comprehensive Assessment System for Building Environment Efficiency (CASBEE)* 3 endorsed by the Ministry of Land, Infrastructure and Transport. Additionally, the building received approval from the New Energy and Industrial Technology Development Organization (NEDO)* 4 as a Project for Promoting the Introduction of High-Efficiency Housing /Building Energy Systems. *1. Compact double screen: A new system that automatically opens and closes air vents according to the outside weather conditions, and automatically controls blinds built into the window sashes depending on the amount of sunshine. *2. Cooling pit: A system for utilizing the coolness of the earth (and warmth in the winter) by taking in outside air through an underground pit. *3. Comprehensive Assessment System for Building Environment Efficiency (CASBEE): A tool for conducting comprehensive environmental assessments of buildings using diverse indicators. The project was developed with collaboration among industry, government, and academia, and is run by the Japan Sustainable Building Consortium (JSBC). *4. New Energy and Industrial Technology Development Organization (NEDO): An independent administrative agency established for the purpose of creating Japan s energy and environmental technology future. Ajinomoto Co., Inc. plans to receive a grant from NEDO for the excellent energy conservation performance of the Food Products Global R&D Center. V O I C E Since April 2004, I led the construction project for the Food Products Global R&D Center, which was completed at the end of June We took bold steps in the adoption of technology, with the goal of constructing a comfortable, creative space using the latest, environmentally-friendly energy conservation technology. As a result, the building received the highest ranking (S Rank) on the CASBEE environmental performance assessment index, and was selected as a NEDO-supported project the first such project for the Ajinomoto Group. In order to receive a grant from the national government, the project had to undergo a very strict investigation by NEDO. Many times it seemed as if the attempt would end in failure, but we came through in the end thanks to our persistent commitment to social responsibility. The center came into service in July, and people are really enjoying the very comfortable, creative space that encourages communication both between people, and between people and nature. The building has also raised the environmental and energy conservation awareness of employees. Hiroyuki Sakakibara Food Products Global R&D Center Planning Group, Processed Food Development & Technology Center Food Products Company, Ajinomoto Co., Inc. 55

57 Various Environmental Initiatives Environmentally Friendly Buildings Ajinomoto Group Takanawa Training Center Received the Minato Ward Green Architecture Award In November 2004, the Ajinomoto Group Takanawa Training Center was completed on the site of the former Ajinomoto Memorial Hall (completed in 1932). It is an environmentally friendly building designed with an emphasis on points such as the recycling of rain water, energy conservation, and landscape protection. In addition, much effort went into blending traditional Japanese scenery and architectural techniques in the new building by utilizing valuable materials such as the outer wall of the 1932 structure, as well as greenery, in the construction of the tea house, conference room, and Japanese style garden. In overall recognition of such points, the center received the Minato Ward Green Architecture Award* in June The Ajinomoto Group will continue working to conserve greeneries at the site, and to protect the environment through water resource-related efforts, such as putting water retention agents in the building s rooftop garden. Outer wall covered with historically valuable Mashiko pottery tiles Courtyard with preserved greenery from the foundation of the old construction Selection standards for the Minato Ward Green Architecture Award: 1. Excellent design that takes into account the surrounding landscape 2. A high level of architectural construction 3. Utilization of existing trees 4. Adoption of advanced technology 5. Efforts to protect and regenerate the natural environment 6. Animal friendly planting design 7. Good balance between buildings and planted areas 8. Use of plants native to Japan * Minato Ward Green Architecture (Minato-ku Midori no Machizukuri) Award: Based on the Ordinance to Protect Greenery in Minato Ward, Tokyo s Minato Ward is promoting leadership in greening projects associated with building construction plans. In fiscal 2004, the ward established the award as a means of promotion of and education regarding greenery. The object of the award program is to further improve the ward s living environment by publicly recognizing excellent examples of green facilities in the ward. In June 2006, a selection committee made up of persons of learning and experience reviewed the 106 facilities that submitted notices of completion of greening projects in fiscal The Ajinomoto Group Takanawa Training Center was selected as one of five such facilities to receive the award. 56

58 Various Environmental Initiatives Environmental Initiatives in Offices Environmental Initiatives in Offices In addition to various environmental efforts at production sites, the Ajinomoto Group focuses on initiatives in offices where its employees are engaged in clerical work. Being conscious of one s surroundings, including the use of paper and electricity, as well as the disposal of trash, is particularly important in achieving success in such endeavors. The Ajinomoto Group promotes its environmental programs everyday, while working to encourage environmental awareness among its employees. Unlike at plants and other production-related sites, the environmental impact produced by business and sales offices is mainly related to matters such as paper, trash, and electricity. This means that awareness by individual employees has a particularly large effect. Accordingly, the Ajinomoto Group uses notices and videos, and has established an Environmental Awareness Month, to encourage environmental awareness during everyday work. The group is also working daily toward the achievement of specific environmental impact reduction goals. Group will take more measures in an effort to reduce its production of waste and increase its resource recovery ratio. Mixed paper recycling box Environmental Initiatives at the Headquarters of Ajinomoto Co., Inc. The staff of the headquarters building of Ajinomoto Co., Inc., which is the largest office building within the Ajinomoto Group, is implementing an Office Environmental Impact Reduction Plan, which is based on the Ajinomoto Group Zero Emissions Plan. Specifically, this plan deals with typical environmental efforts made in office buildings, such as initiatives for reducing the use of paper and electricity, as well as the amount of produced trash. The group is aggressively working toward measurable targets for its resource recovery ratio, and reduction of CO2 emissions in particular. Environmental impact reduction performance (Ajinomoto Co., Inc. headquarters building) Production of waste (tons) Resource recovery ratio (%) CO2 emissions (CO2 tons) Number of workers FY04 performance ,575 1,031 (December 2004) FY05 performance ,539 1,109 (May 2005) FY10 target The company is pushing various efforts to reduce paper use, including choosing printing methods that reduce paper use and encouraging the use of projectors during meetings, since paper accounts for roughly 70% of the waste produced in offices. The company also encourages the thorough separation of corporate trash intended for disposal, in order to increase its resource recovery ratio. For items such as mixed paper that tend to not be thoroughly separated, the company switched to clear recycling boxes. This move encouraged thorough separation by allowing the contents of the recycling boxes to be seen. The Ajinomoto ,570 ( ) Target set as fewer than FY02 emissions Cool Biz In 2005, Japan launched Team Minus 6%, a national campaign led by Prime Minister Junichiro Koizumi to combat global warming. Ajinomoto Co., Inc. is participating in this campaign as a team member. The Ajinomoto Group implemented the Cool Biz initiative as one of its specific efforts. By encouraging employees to wear light clothes during the summer and setting air conditioners higher, the group succeeded in reducing energy consumption. See the Initiatives to Prevent Global Warming section for more details. Initiatives at Ajinomoto Co., Inc. s Kyushu Branch and Southern Kyushu Regional Branch Implementation of the Cool Biz initiative for the four months from June to September 2005 decreased energy consumption by 14.5% compared to the same months during the previous year, despite the similar fierce heat experienced again this year. The company recognizes that achievement of this significant result is thanks to cooperation from its employees who understand the significance of the initiative. Energy consumption (Mwh) Electricity costs ( thousands) (Reference) Average high temperatures ( C) in Fukuoka city June-September 122 2, June-September 105 1,860 One year improvement 14.5% reduction 15.6% reduction

59 Various Environmental Initiatives Communication with the Community Communication with the Community The Ajinomoto Group s business depends on the local natural environments and communities where it operates. As a company that strives to grow along with its host communities, the Ajinomoto Group takes measures to conserve the natural environments of each region and highly values communication with local communities. With expanding business operations in 23 countries and regions worldwide, the Ajinomoto Group aims to be a company trusted by local community members. In paying consideration to environmental problems, the Ajinomoto Group emphasizes cooperation with its surrounding communities. Three plants of the Ajinomoto Co., Inc. in Japan, as well as plants outside Japan, such as at Ajinomoto Co., (Thailand) Ltd. and Ajinomoto Vietnam Co., Ltd., offer plant tours, taking advantage of opportunities to proactively introduce their environmental initiatives to the public. In addition, Ajinomoto Co., Inc. s Kawasaki Plant invites community members to participate in its environmental monitoring program. It also builds partnerships among industry, government and academia to study optimal recycling models for entire communities. In these ways, the Ajinomoto Group is pushing various environmental initiatives forward as a responsible community member. Reservations can be made for plant tours at three Ajinomoto Co., Inc. s plants in Japan at the following web address (in Japanese only): The Kawasaki Plant has been in operation since the foundation of the Ajinomoto Co., Inc. It has the longest history of any of the Ajinomoto Group s plants, and a deep relationship with its local community. It is also a very large plant as far as production sites go, occupying eight times the area of the Tokyo Dome baseball stadium complex. As the surrounding area continues to urbanize, the Kawasaki Plant has been putting more effort into communication with local community members as a city-based plant. Eco Tours Initiatives at Ajinomoto Co., Inc. s Kawasaki Plant Since November 2004, the Kawasaki Plant has been holding Eco Tours focusing on the plant s environmental initiatives separate from its general plant tours. The main themes of the Eco Tours are consideration of water resources and resource recycling. Visitors tour the plant s environmental facilities, including its wastewater treatment facility and resource recovery center, after which they observe the purification of water firsthand through a miniature water treatment experiment. In fiscal 2005, the plant aggressively publicized the Eco Tour program, resulting in 359 visitors attending 33 tours. Sixty percent of the tour participants were business and local environmental specialists, 20 percent were ordinary visitors who have an interest in the environment, and another 20 percent were elementary and junior high school students. The Kawasaki Plant will continue to hold Eco Tours in accordance with demand. Adding a precipitant to wastewater in a beaker causes the pigmented components to precipitate out. Only the clear supernatant water is discharged into the Tama River. Environmental Monitor Meetings Fertilizer processed from excess sludge (recovered microorganisms that multiplied during wastewater treatment) Since fiscal 2004, the Kawasaki Plant has held Environmental Monitor Meetings, which are attended by residents who live near the plant. The environmental monitors provide external monitoring of such things as the color of smoke coming from the plant s smokestacks, wastewater, odors, and noise. This feedback is then used in improvement activities. In February 2006, 12 members of six neighborhood associations in the Rokugo area of Ota ward in Tokyo became new environmental monitors, in addition to those from six neighborhood associations from around the plant in the Kawasaki ward of Kawasaki. Now, there are 52 environmental monitors from 12 neighborhood associations. At the Environmental Monitor Meeting in February 2006, the monitors were informed about noise control along the property line of the plant site. The environmental monitors experienced for themselves the actual noise level by taking measurements with noise meters. Plant employees reported on the results of actions taken in response to noise-related issues that monitors pointed out in fiscal The environmental monitors made such remarks as, I was really able to understand the actual noise level by seeing the readings on the noise meter, I gained an understanding of the environmental measures taken by the Kawasaki Plant, and I got a good understanding of the on-site difficulties in Measuring noise level 58