Environmental Management Initiatives

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1 In order to carry out environmental preservation activities efficiently, Minolta specifies top priority to issues such as introduction of environmental accounting and green procurement and expanding scope of ISO certification. Enviromental Accounting Minolta has introduced an environmental accounting system to measure the capital investment, expense and results of our environmental preservation activities, and carry out effective and sustained environmental activities. Introduction of environmental accounting Disclosed fiscal 1999 results ahead of time. Expanded scope of application for certain beginning in fiscal activities from fiscal Environmental Accounting Philosophy Behind of Environmental Accounting Based on guidelines published by the Environment Agency (currently Ministry of the Environment) in May 2000, environmental accounting for fiscal 2000 was applied to 14 Minolta domestic facilities. Along with enhancing precision of calculations, environmental accounting for fiscal 2000 compares environmental preservation cost and performance with the fiscal In the future, the system will introduce a indicators such as environmental efficiency (percentage of environmental impact reduced in environmental preservation cost). Along with aiming for more efficient environmental preservation activities, we will deal with converting effect into monetary figures. Environmental Preservation Cost Environmental accounting sorts environmental preservation cost into positive investment that can be recovered in the future (prior investment), outlay for existing management and sustainable improvement (management improvement), and negative outlay such as cleaning up previously produced pollution (damage restoration). Approximately half of the money invested in environmental preservation were used for damage restoration, and over two-thirds of the environmental preservation expense were used for management improvement. As a results of investment in cleaning up environmental pollution taking a break, by completing initial investment in a chemical substance management system and assembly and cleaning lines of used products, investment decreased to approximately 100 million. Consequently, investment in environmental equipment accounted for 1.1% of total equipment investment ( 11.3 billion). Expense increased to approximately 2.2 billion due to acquisition of ISO certification for domestic facilities and an increase in the amount of used products recovered. Labor expense accounted for approximately 50% of the total expense ( 1.1 billion). Because there was a large increase in expense of acquiring ISO certification, the figure is expected to decrease after fiscal The percentage of environmental R&D expense in the total R&D expense ( 26.1 billion) increase to 2.8% due to involvement with new research of environmental technologies. Concerning prior investment in reinforcement of the management base and development of advanced technologies, Minolta ties those efforts into concrete results such as intensification of environmental activities and development of next generation energy-saving products, and therefore plans to continue to systematically invest in those efforts. Concerning management improvement, we intend to work on making environmental activities more efficient. Percentage of environmental preservation cost 44 Classification of environmental preservation cost according to outlay (expense) Prior investment Management improvement Damage restoration Unit: 1M Total integration / management base reinforcement Investment 26 Development of advanced technologies and products 30 Prior investment Management improvement Damage restoration Starting environmental businesses Acquisition/maintenance of ISO certification Environmental adaptation of existing products 7 Recovery and recycling of used products 69 Expense Facilities environment improvement 24 Information disclosure Environmental pollution restoration

2 Environmental Performance As a result of achieving zero waste facilities, banning use of specified chemicals and conserving energy at our facilities, amount of CO2, waste and chemicals subject to PRTR discharged, and amount of water used have decreased in comparison with the previous year. (For details, see pp ) As for recovery and recycling of used products, we are involved in recycling copiers and reusing cartridges and toner bottles. At R&D stages, we have used recyclable materials, have reduced the amount of specified chemicals used in our products, have designed our copiers with less power consumption, and have developed environmental technologies. (For details, see pp ) Economic Effects of Environmental Preservation Activities The economic effects of environmental preservation activities in product recycling and reuse took shape as a reduction in cost of purchasing parts and sales profits obtained by products recovered from the market. The expense of energy and treating facility waste increased over fiscal 1999 due to improving recycling method and an increase in manufacturing of toner and hard disk boards. Environmental accounting for fiscal 2000 Scope: Minolta Co., Ltd. Effective period: April 1, 2000 to March 31, Environmental preservation cost Item 1. Cost within business area 2. Upstream/downstream cost 3. Management activities cost 4. R&D cost 5. Social activities cost 6. Environmental damage cost Total 2. Environmental performance Item 1. Effect within business area 2. Upstream/downstream effect 3. R&D effect Investment Expense Description (compared with previous fiscal year) (compared with previous fiscal year) CO2 emission Environmental impact factor PRTR chemicals discharge Waste discharge Water usage Recycle from used products Reuse from used products Recycled material used in products , Unit: 1M Reduction of amount of waste treatment, use of specified chemicals banned/reduced, energy consumption suppressed in facilities Introduction of green procurement, use of recyclable resources (recovery and recycling of used products), compliance with law concerning packaging recycling Construction/maintenance of environmental management system, environmental education, reinforcement of our environmental management base Development of environmental technologies, environment-conscious design for existing products Information disclosure through environmental report, Web site and environmental exhibitions, local cleaning Survey and restoration of damage caused by past business activities Unit: tons Total environmental impact Change in comparison Fiscal 2000 Fiscal 1999 with fiscal ,111 26, , ,752 12, ,917 1,712 2, Environmental Accounting 3. Economic effects of environmental preservation activities Item Decrease in cost of parts due to recycling of products, etc. Profit obtained by selling facility waste Cost of treating facility waste Cost of energy consumption Decrease in cost due to reuse of used test paper (deemed effect) Amount Fiscal 2000 Fiscal ,046 1, Unit: 1M Change in comparison with fiscal

3 Environmental Management System Minolta is working to expand the scope of ISO certification and continuously improve the environmental management system. Acquired ISO certification at major Expanded scope of application and acquired manufacturing facilities both domestic and certification at all Minolta facilities. overseas by the end of fiscal Acquired certification at Wuhan Minolta (China). Acquisition of ISO certification The Minolta Group acquired ISO certification at all of our domestic manufacturing facilities by the end of fiscal In fiscal 2000, along with starting to acquire certification at new domestic manufacturing affiliates, Minolta conducted activities to acquire certification at our R&D and administration facilities as well, acquiring seven certifications. Minolta has now acquired certification at all of our facilities. Minolta Group is scheduled to acquire certification at our main marketing affiliates both domestic and overseas. The Minolta Sales Group (Japan), Minolta Corporation (US) and Minolta Europe GmbH (Germany) are preparing to construct an environmental management system. Environmental Education It is important for each employee to be aware of the environment in order for environmental preservation activities to take shape. Minolta is enhancing employee's awareness of the environment primarily by education in accordance with ISO system. 13 Environmental Management System/Environmental Education Along with constructing a system of education Continuance under consideration. and enlightenment, an environmental award system to be introduced. Environmental Education Minolta is now considering to construct an education and enlightenment system for the entire group. The Group is now providing systematic education for employees such as environmental education for training new employees and education at facilities where ISO has been introduced. A new educational program will be started based on results of a study conducted in fiscal Environmental Enlightenment Activities Employees and their families are educated about the environment by the articles in an in-company newsletter, "I want to know more about what Minolta is doing about the environment." Minolta Group facilities are involved in raising employee's awareness of the environment by publishing an environmental newsletter and displaying environmental posters and pictures drawn by primary and middle school students on the theme of environmental preservation. Employees at some facilities carry cards giving ISO policy and targets to keep them aware of environmental preservation. Environmental Awareness Activities at Minolta Malaysia An environmental education campaign week was set January 2001 to raise employee's awareness of the environment at Minolta Malaysia Sdn. Bhd. and Minolta Precision Engineering (M) Sdn. Bhd. The campaign includes an environmental exhibition and presentation on the environmental impact by the employee's own company. The company devised a quiz rally to make the exhibition more enjoyable.

4 Environmental Risk Management In order to prevent accidents that might have a negative environmental impact, Minolta intensifies a risk management system to minimize it. Risk Management To minimize impact of accidents or emergencies as well as prevent them from happening, we have established internal standards for handling emergencies at facilities where ISO has been introduced. If an accident does occur, a description of the related circumstances and response will be recorded, and internal standards will be reviewed and revised to ensure the proper action is taken without delay in the case of emergencies. In fiscal 2000, we performed emergency drills at the various facilities in accordance with standards. Environmental Audit The Quality & Ecology Division conducts an environmental audit of Minolta manufacturing facilities and domestic manufacturing affiliates to confirm the status on legal compliance and communication status with the government. The result of the audit showed the facilities to be generally in compliance with relevant regulations and handling of local complaints and noncompliance with environmental management. Analytic Laboratory Sayama Operations has bolstered its water quality analysis system by having analytic laboratory certification approved in December Following installation of organic chemical analysis equipment in the last fiscal year, we installed equipment for analyzing minute quantities of heavy metals in March Sayama Operations single handedly undertook analysis of water quality within the group to shorten time required for and enhance precision of analysis. direct iron powder reduction method. The elution test conducted 3 months later showed tetrachloroethylene remaining in the soil to be less than 0.004mg/ (0.01 mg/ for the environmental standard). In addition to this, Minolta banned the use of specified organic chlorinated solvents at Minolta facilities in January Affiliates The amount of tetrachloroethylene, trichloroethylene and dichloromethane detected in the ground water of Nankai Optical Co., Ltd. was found to exceed environmental standards (160,367 and 85 times the standard respectively). This was duly reported to the government of Wakayama Prefecture and city of Kainan in September. A study conducted by the prefectural government detected none of these substances in samples taken from soil, water and farm produce in the surrounding area of the facility had been contaminated. Tetrachloroethylene and trichloroethylene detected in the ground water of Nara Minolta Seiko Co., Ltd. was found to exceed environmental standards (3,460 and 234 times the standard respectively). This was duly reported to the government of Nara Prefecture and city of Sakurai in November. A study conducted by the prefectural government detected none of these substances in samples taken from wells and rivers in the surrounding area, and confirmed there was no possibility that the surrounding area of the facility had been contaminated. Trichloroehylene detected in the ground water of Toyohashi Precision Products Co., Ltd., was found to exceed environmental standards (5 times the standard). This was duly reported to the city of Toyohashi in March A study conducted by the city detected none of these substances in samples taken from wells in the surrounding area, and confirmed there was no possibility that the surrounding area had been contaminated. All three of these companies immediately began purifying the ground water. Concentration in monitored wells (Sayama Operations) Material: tetrachloroethylene Environmental Risk Management Response to the Issue of Soil and Ground Water Contamination with Organic Chlorinated Solvents 0.8 Minolta facilities Approximately a year and a half has passed since the Sakai and Sayama Operations began purifying by ground water pumping and volatile treatment method. During this time, 40,000 tons of ground water was treated at the Sakai Operations; 20kg of tetrachloroethylene and 38kg of trichloroethylene were recovered from the water. At the Sayama Operations, 29,000 tons of ground water was treated, and 6.3kg of tetrachloroethylene and 0.4kg of trichloroethylene were recovered. The water is regularly monitored and purification is progressing smoothly. Soil of at the Sayama Operations where contamination was measured (1,300 tons, or 810m 3 ) was detoxified by '99/ '00/ '01/ (Year/month)

5 Green Procurement and Green Purchasing Minolta has introduced a green procurement system to provide products that have relatively less environmental impact. Our offices practice green purchasing and promote purchase of environment-conscious office supplies. Consider method of introducing green procurement by Started ahead of time in December. end of fiscal % of the office supplies purchased for Expand purchase of environment-conscious office Minolta facilities in fiscal 2000 were supplies by end of fiscal Min. 90% for Minolta facilities, min. 70% for domestic environment-conscious green products. affiliates 15 Green Procurement and Green Purchasing Introduction of Green Procurement It is the social duty of manufacturers to provide products that have relatively less environmental impact. Along with designing products that have minimal impact on the environment, manufacturers must also procure environment-conscious materials and parts. In December 2000, Minolta established the Minolta Green Procurement Guidelines and started to procure environment-conscious parts and materials to be used in Minolta products. The guidelines call for environmental evaluation from the aspects of corporate performance and procured parts and materials, and deciding whether or not to use the procured items by the total evaluation of the two. Green procurement will be expanded to the all Minolta Group in fiscal 2001, aiming to have 100% green procurement by the end of fiscal By promoting green procurement together with our supplier, we could lower product cost and environmental impact of our products. This also contributes to improvement of environmental management on the part of our suppliers. Logic behind criteria Quality (Q) Cost (C) Ecology (E) Evaluation criteria Delivery (D) Corporate performance evaluation + procured item evaluation Ecological evaluation (E) calls for evaluating the ecological efforts of our supplier(corporate performance evaluation) and the ecological efforts involving the parts and materials delivered (procured items evaluation). 1. Corporate performance evaluation Acquisition of ISO certification (implementation of environmental management execution based on ISO 14001) Implementation of environmental evaluation during product development and material procurement Reduction of the environmental impact during the manufacturing process Disclosure of environmental information 2.Procured item evaluation Volume of specified chemicals included Promotion of conservation of resources and energy Consideration given to recycling Consideration given to the environment concerning packaging

6 Green procurement implementation flow Minolta Green procurement policy/criteria Supplier Product design Survey request Feedback Evaluation (notification of results) OK NG Survey Improvement Pass Evaluation OK NG Construction of Green Procurement System In order to efficiently promote green procurement, Minolta has constructed an online green procurement system that uses the Internet. Minolta and our suppliers began using the system in full operation in April A feature of the system is that it enables suppliers to access Minolta's dedicated server via Internet, input and register data in the server, have the data automatically evaluated immediately, and then view the results of the evaluation. Electronic data exchange reduces the amount of time and reduces the amount of paper needed. The data obtained also can be used inside our company for development and design of new products, as well as to improve environmental conscious of existing products. Green Purchasing Minolta also purchases environment-conscious office supplies from the perspective of the purchaser. We established the basic policy concerning the purchasing of environment-conscious office supplies and criteria for selecting which items to purchase based on it in September We also introduced our Stationary database electronic settlement ordering system that utilizes a data base of office supplies at all Minolta facilities in April The system speeds up the selection and ordering process for green products and eliminates the need for paper order forms. In fiscal 2000, the green purchase ratio in value was 72%, and a total of 890 items were registered green products. Minolta is planning for further expansion of the system. 16 Green Procurement and Green Purchasing