Asia Times: 'Green bean counting' boosts Fujitsu's bottom line



	June 09, 1999	atimes.com

Japan Economy

'Green bean counting' boosts Fujitsu's bottom line
By Suvendrini Kakuchi

TOKYO - Green groups have long tried to tell them thesame thing, but it is only now that Japanese companies arestarting to be convinced that looking after the environment doeshelp their bottom line.

That's what one of the country's biggest firms isfinding out after doing some environmental accounting and calculating just how much profit it made from a variety of environmental protection efforts.

Electronics giant Fujitsu Ltd. recently releasedJapan's first official ''green bean counting'' report. It says ithad a net gain of as much as four billion yen ($33 million)in economic benefits in 1998 alone, as a result of''environmentally friendly expenditures.'' The company also notes that such gains have been on the rise since 1996.

Consumer electronics industry leader Sony Corp. is nextin line to issue a similar report. It announced recently that it has taken steps to set up guidelines to calculate its spending on protecting the environment, and what it has gained as a result ofsuch efforts.

No one could be more pleased with these moves than environmentalists, whodescribe the decision of corporate heavyweights to take the leadin green accounting as ''a major breakthrough'' in the battle fora cleaner environment.

''The fact that big companies have begun this process matters alot to the environment movement because it confirms the economicbenefits of protecting the environment,'' says Professor KoriyuFurusawa, who teaches environmental social science at KokugakuinUniversity.

Still, he says, to get the best results it may be necessaryto set up an environmental accounting institution that can give anindependent evaluation on the benefits presented by the companies.

Indeed, it was only this March that the Environmental Agencyintroduced guidelines for environmental accounting that has directand indirect spending sectors. It has also proposed ways ofdifferentiating ordinary investments for raising productivity,from investments aimed at protecting the environment.

Activists say having companies issue environmental accountingreports not only makes businesses more conscious of theiractivities' impact on the environment, but also demonstrates tothe public the effects of ''green-mindedness."

In its report, Fujitsu itself said: ''Our goal in theintroduction of the environmental accounting system is todisseminate information to interested parties, and demonstrate ourcommitment to carry out effective environmental measures on a long-term basis."

The company followed the guidelines developed by theEnvironmental Agency in doing its environmental accounting. It arrived at the 1998 net gain figure of four billion yen after calculating that it had spent 14 billion yen (some $114.5 million) in seven categories of environmentally friendly expenditures, and getting some 18 billion yen ($147.5 million) in benefits.

Most of this 18 billion yen represents the estimated totalcompensation that Fujitsu says it did not have to pay residents ofareas surrounding its plants, because it implemented greenmeasures in its factories to reduce harmful impact.

For 1997, the company says it spent some 7.9 billion yen (almost$65 million) for environmental protection and gained 8.3billion yen (about $66 million) as a result.

It predicts that for the fiscal year 1999, which ends in March,economic benefits will be around 11 billion yen ($90 million), compared to the eight billion yen ($65 million) earmarked for environmental spending.

Fujitsu took into consideration the activities of its 1,338affiliates in making its calculations. It describes benefits ascontributions to environmental protection activities in support ofproduction, energy conservation resulting from reduced use ofelectricity, oil and gas, as well as decreased paper use. Other benefits include those resulting from recycling activities, such as the sale of used products and re-use of material.

For costs, Fujitsu has several sections such as direct andindirect spending, energy conservation and recycling expenditures.Under ''costs for research and development,'' the company put downthe development of environmentally friendly products and greentechnology. In the ''others'' section, it lists dealing with environmentalrisks like restoration of polluted soil and anti-dioxin measures.

Despite the new government guidelines, though, officials of somecompanies say there is still no comprehensible standard ofenvironmental accounting, which is apparently why Sony is trying to fashion its own system.

Hiroyuki Tada of Sony's social environmental department says thecompany's environmental expenditures will be divided into areaslike investment in pollution control, expenditure to cut energyconsumption and the cost of introducing and maintainingenvironmental management systems such as the ISO 14001certification. To evaluate its environmental efforts, Sony intends to use energysavings figures instead of monetary amounts.

But business analysts like Mariko Kawaguchi of the DaiwaInstitute of Research say the present lack of standards in greenaccounting is no major worry. After all, Kawaguchi pointed out,''as the numbers increase, there will develop a more standardsystem for assessing environmental spending."

(Inter Press Service)

back to the top

©1999 Asia Times Online Co., Ltd.