Fiscal 2005 Environmental Accounting Results

The Fujitsu Group began efforts to gauge the costs and benefits of environmental-conservation-related activities from fiscal 1998. We have also implemented an environmental accounting system to evaluate environmental investments and benefits.
We have finished the compilation of fiscal 2005's environmental accounting data; the results for the fiscal year are described below.

Purpose for Launching the Environmental Accounting System

1. To clarify the company's position to stakeholders through information disclosure
2. To carry out long-term and continuous environmental measures
3. To optimize investment in environmental conservation
4. To add fresh energy to environmental conservation activities

Basic Environmental Accounting Elements

• Target Period:
  April 1, 2005 to March 31, 2006
• Aggregation Scope:
  Fujitsu and its main consolidated subsidiaries in Japan and overseas (*1)
  
  *1: FUJITSU ISOTEC LIMITED, FUJITSU IT PRODUCTS LIMITED, FUJITSU I-NETWORK SYSTEMS LIMITED, FUJITSU ACCESS LIMITED, FUJITSU INTEGRATED MICROTECHNOLOGY LTD., Fujitsu Interconnect Technologies Limited, FUJITSU VLSI LIMITED, ECOLITY SERVICE LIMITED, FUJITSU AUTOMATION LIMITED, FUJITSU KASEI LIMITED, FUJITSU LABORATORIES LIMITED, FUJITSU COMPONENT LIMITED, FUJITSU SUPPORT AND SERVICE INC., Shimane Fujitsu Limited, FUJITSU PERIPHERALS LIMITED, SHIN-ETSU FUJITSU LIMITED, SHINKO ELECTRIC INDUSTRIES CO., LTD., FUJITSU TEN LIMITED, TOCHIGI FUJITSU TEN LIMITED, TRANSTRON Inc., PFU, FUJITSU FUDOSAN LTD, FUJITSU　FRONTECH LIMITED, FUJITSU MEDIA DEVICES LIMITED, YAMAGATA FUJITSU LIMITED, FUJITSU WIRELESS SYSTEMS LIMITED, FUJITSU COMPUTER PRODUCTS OF VIETNAM, INC., FUJITSU COMPUTER PRODUCTS CORPORATION OF THE PHILIPPINES, FUJITSU(THAILAND) CO., LTD., FUJITSU MANUFACTURING ESPAÑA, S.A., FUJITSU TELECOMMUNICATIONS EUROPE LTD.
• Computation Criteria for Environmental Conservation Costs
  
  • Depreciation cost computation: The depreciation cost of an investment amount is calculated on a straight-line basis for a service life of 5 years (no residual value). The period of 5 years is the average period of time during which environmental conservation equipment is repaired or otherwise improved after its initial installation.
  • Composite cost computation: The composite cost, which comprises environmental conservation costs and other costs, is calculated with regard to environmental conservation in accordance with the 2005 Environmental Accounting Guidelines issued by the Ministry of the Environment.
• Computation Criteria for Environmental Conservation Benefits:
  
  • Range of benefits: Coverage extends to real and estimated benefits (risk avoidance and deemed effects) stemming from reduction of the environmental burden in the following areas:
    
    • Resource usage in the course of business activities
    • Business activities themselves and the waste produced by them
    • Products and services provided through business activities
    • Shipping and other categories
  • Development period for investment benefits and basis for this period: The calculation period for real benefits is synchronized with the depreciation period (60 months) of an investment. Estimated benefits are calculated on the same schedule as real benefits, during a depreciation period of 60 months. Benefits from environmental conservation activities and operating loss evasion that are complete within a single fiscal year are limited to the fiscal year in which they occur, but other benefits are assumed to develop within a period of 12 months. The following is a description of the basis for the benefits calculation:
    
    • Amount contributed by environmental conservation activities to the added values derived from production activities
      Benefit amount = Added value x Cost of maintaining environmental conservation equipment / Total accrued cost
      Concept: This calculation gauges the value added to production activities by environmental conservation activities as a share of the cost of each business location's environmental conservation and maintenance expenses.
    • Evaded amount of facility operating loss caused by legal noncompliance
      Benefit amount = Added value / Days of operation x Lost operating days
      Concept: This calculation estimates the amount of evaded risk presumed to arise from failure to carry out prior investment in compliance with laws and regulations. Lost operating days are determined according to the scale of environmental investment and set at a maximum of three days.
    • Amount of PR activity benefits
      Benefit amount = Cost of print and televised publicity x Number of media coverage/broadcast instances
      Concept: This calculation measures total coverage of environmental conservation activities in newspapers, magazines, and television in terms of publicity costs.
• Revisions to Significant Items
  
  • Up until the previous fiscal year, the aggregation scope was defined as Fujitsu and its consolidated domestic and overseas subsidiaries, with the exception of some subsidiary locations handling sales and software services. This year we have clarified the aggregation scope, redefining it as Fujitsu and its main consolidated subsidiaries in Japan and overseas and listing those main consolidated subsidiaries (31 companies). This redefinition of the aggregation scope has brought about changes of approximately ¥100 million in both costs and benefits.
  • The above range does not include two companies, Fujitsu Hitachi Plasma Display and Fujitsu Display Technologies, which were consolidated subsidiaries in fiscal 2004 but were no longer consolidated members of the group in the 2005 fiscal year. The removal of these two companies has brought about changes of ¥2.3 billion in costs and ¥1.8 billion in benefits.

Environmental Accounting Overview

1. Trends in Environmental Accounting

Changes in environmental costs and benefits (unit: ¥100 million)

5. Environmental Efficiency

Environmental Improvement (EI) Value (Fujitsu calculations)

This index (unit: t-CO2/¥100 million) gauges reductions in environmental burden (as measured in carbon dioxide emissions) per ¥100 million in environmental conservation costs. Indexing the effect of environmental burden reduction in this way makes it easier to evaluate data within a certain timeframe or between segments, allowing accurate judgment of the effectiveness of environmental conservation activities.

Environmental Efficiency (EE) Value (Fujitsu calculations)

This index (unit: ¥100 million/t-CO2) denotes the value added to business (as measured in sales) by the amount of environmental burden. It allows direct evaluation of the effect of environmental burden on business activities by gauging the amount of sales growth attributable to an increase in that burden as measured in tons of carbon dioxide.

6. Procedures for Certification of Economic Accounting Figures to Be Published in the Fiscal 2006 Social/Environmental Report

Fujitsu has commissioned an independent third party to carry out certification procedures for the environmental accounting figures (data on investments, costs, and benefits to be reported as part of the results for fiscal 2005) to be included as part of the Social/Environmental Report scheduled for publication in 2006.
These procedures include examination and evaluation of Fujitsu's collection and compilation processes for its environmental accounting data. The auditors carry out sampling to compare evidentiary materials against the calculated figures and gauge the precision of those calculations; they also conduct interviews of the people at each site responsible for producing these materials and perform inspections of business locations to understand conditions there and compare them against the materials.