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Environmental Accounting and Environmental Liabilities

To promote environmental management, the Fujitsu Group introduced environmental accounting in FY 1998. We evaluate the efficiency of our environmental protection activities by monitoring required costs and benefits of these activities. Through this process, we have clarified issues and promoted sharing of the results.

Purpose of Introducing the Environmental Accounting System

  • To clarify our corporate stance through disclosure of information to stakeholders
  • To implement long-term, continuous environmental measures
  • To raise the efficiency of investment in environmental protection measures
  • To energize environmental protection activities

Basic Environmental Accounting Elements in FY 2018

  • Applicable period
    April 1, 2018 to March 31, 2019
  • Accounting coverage
    Fujitsu and its major consolidated subsidiaries worldwide *1
  • Calculation basis for environmental protection costs
    • Accounting method for depreciation and amortization : Depreciation and amortization expenses for investments are included in expenses using straight line depreciation (with no residual value) based on a useful life of 5 years. The useful life of 5 years was chosen based on the average length of the actual period from the introduction of environmental facilities to their implementation of repairs and upgrades.
    • Basis for recording composite costs : In regard to composite costs, in which environmental protection costs are coupled with other costs, the Fujitsu Group records only the portion corresponding to environmental protection in conformance with the Environmental Accounting Guidelines 2005 issued by the Japanese Ministry of Environment.
  • Calculation basis for the economic benefits of environmental protection measures
    • Scope of benefits in environmental accounting : The Fujitsu Group records the actual benefits and estimated benefits (risk avoidance benefit and deemed benefit) of reducing environmental impact related to the following items.
      • Benefits of reducing environmental impact related to resources used in business activities
      • Benefits of reducing environmental impact related to environmental loads and waste emissions resulting from business activities
      • Benefits of reducing environmental impact related to goods and services produced by business activities
      • Benefits of reducing environmental impact related to transportation and other activities
    • Investment benefit materialization period and basis : The accounting period for actual economic benefits has been aligned with the depreciation and amortization period for investments (60 months). However, the accounting period for economic benefits derived from reducing personnel costs related to the environmental management system is 12 months, in line with the main thrust of the environmental management system, which is reviewed every year.
      With regard to estimated economic benefits, the accounting period for economic benefits derived from capital investment is the same as the depreciation and amortization period (60 months) for actual economic benefits. Benefits corresponding to a given fiscal year, such as the amount of contribution to environmental protection and the avoidance of operational losses, are recorded only for that fiscal year. The basis for accounting for economic benefits is as follows:
      • Contribution of environmental protection activities to added value derived from production activities
        The Fujitsu Group recognizes support provided by environmental protection activities to production activities as an economic benefit. Accordingly, the amount of contribution is determined by multiplying the added value derived from production activities by the ratio of the maintenance and operation cost for environmental protection facilities to the total cost of each site.
        Contribution = Added value x Maintenance and operation cost for environmental protection facilities / total facility cost
      • Avoidance of operational loss at business site due to non-compliance with laws and regulations
        The Fujitsu Group recognizes the avoidance of operation loss as the amount of loss that is avoided in the event of the materialization of risk arising from neglect to make upfront investments needed to comply with laws and regulations. The number of operational loss days is determined based on the size of investment related to environment but it must not exceed three days.
        Benefit = Added value / Operational days x Operational loss days
      • Benefit of public relations activities
        This benefit is calculated by converting publicity efforts related to environmental protection activities, in newspapers, magazines and TV, into an advertising cost.
        Benefit = Cost of advertising through newspapers, magazines and TV x Number of advertisements ran and programs broadcast.
      • R&D benefits
        The Fujitsu Group calculates the amount of additional earnings resulting from the contributions of R&D achievements for environmental protection purposes, such as Super Green Products and environmental solutions.

*1 Major consolidated subsidiaries worldwide:
FUJITSU ISOTEC LIMITED, FUJITSU IT PRODUCTS LIMITED, Fujitsu I-Network Systems Limited, Fujitsu Interconnect Technologies Limited, Ecolity Service Limited, FDK CORPORATION, FUJITSU OPTICAL COMPONENTS LIMITED, FUJITSU KASEI LIMITED, FUJITSU CLIENT COMPUTING LIMITED, Fujitsu Laboratories Limited, FUJITSU CONNECTED TECHNOLOGIES LIMITED, FUJITSU COMPONENT LIMITED, Shimane Fujitsu Limited, FUJITSU PERIPHERALS LIMITED, SHINKO ELECTRIC INDUSTRIES CO., LTD., Fujitsu Telecom Networks Limited, TRANSTRON Inc., PFU Limited, FUJITSU FRONTECH LIMITED, MIE FUJITSU SEMICONDUCTOR LIMITED, AIZU FUJITSU SEMICONDUCTOR WAFER SOLUTION LIMITED, AIZU FUJITSU SEMICONDUCTOR MANUFACTURING LIMITED (currently ON Semiconductor Aizu Co., Ltd.), Fujitsu Network Communications Inc., FUJITSU TECHNOLOGY SOLUTIONS (HOLDING) B.V.

The Fujitsu Group also aggregates data on R&D costs and benefits from environmental solutions offered by subsidiaries other than those shown above. However, the date is aggregated solely for environmental solutions costs and benefits, so the relevant subsidiaries are not included in the scope of disclosure for major consolidated subsidiaries.

Fiscal 2018 Environmental Accounting Results

Breakdown of results (Investments and costs) (billion yen)

Fiscal 2018 Breakdown of Results (Capital investments, Expenses, Economic benefits)
Item Main Areas Covered Capital Investment
(billion yen)
Expenses
(billion yen)
Economic Benefit
(billion yen)
Total 0.82(-1.59) 42.05(+1.41) 68.37(-1.02)
Business area costs/benefits Pollution prevention costs/benefits Air/water pollution prevention, etc. 0.32(-1.7) 5.09(+0.54) 6.14(-1.54)
Global environmental protection costs/benefits Global warming prevention, saving energy, etc. 0.27(+0.02) 2.20(-0.17) 1.15(-0.32)
Resource circulation costs/benefits Waste disposal, efficient utilization of resources, etc. 0.0(-0.01) 2.24(-0.04) 10.38(-0.60)
Upstream/downstream costs/benefits Collection, recycling, reuse, and proper disposal of products, etc. 0.0(-0.01) 0.62(-0.22) 0.27(-0.09)
Administration costs/benefits Provision and operation of environmental management systems, environmental education of employees, etc. 0.03(-0.0) 2.14(-0.10) 0.31(+0.01)
R&D costs/benefits R&D on products and solutions that contribute to environmental protection, etc. 0.15(+0.06) 29.65(+1.35) 50.13(+1.52)
Social activity costs Donation to, and support for, environmental groups, etc. 0.0(+0.0) 0.04(+0.01) -
Environmental remediation costs/benefits Restoration and other measures related to soil and groundwater contamination, etc. 0.05(+0.05) 0.08(+0.04) 0.0(+0.0)
  • Numbers in parentheses indicate increase or decrease in comparison with the previous year
  • Due to rounding, the figures in columns may not add up to the totals shown
  • Amounts shown as “0.0” include amounts for which the value was smaller than the display units used

Costs and Economic Benefits in FY 2018

The results of environmental accounting for FY 2018 showed expenses of 42.1 billion yen (14% increase year on year) and economic benefits (calculated by our original estimating method) of 68.4 billion yen (10% decrease year on year), indicating that expenses increased, and economic benefits decreased in comparison to the previous fiscal year.
Also, our capital investments dropped by 0.8 billion yen (16% increase year on year) due to large-scale water pollution prevention measures implemented in FY 2017.

Trends in Expenses and Economic Benefits

Environmental Liabilities

The Fujitsu Group, in properly forecasting expected future environmental liabilities and communicating our soundness and stance of not deferring environmental liabilities, has recorded a liability of 4.33 billion yen in soil-pollution cleanup costs, high-level polychlorinated biphenyl (PCB) waste disposal costs, and asbestos processing costs during facilities demolition. This total is the amount we calculate, as of the end of FY 2018, to be necessary for the Fujitsu Group in Japan to carry out these tasks in the next fiscal year and beyond.

Past Records up to FY 2017

Past records of our environmental accounting up to FY 2017 are included in the Sustainability Report.

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