Environmental Accounting

Philosophy of environmental accounting

Nippon Steel has adopted environmental accounting to be used as guidelines for corporate activities, and to accurately track the environmental costs and effects. The iron and steel industry is an equipment-intensive industry. We have achieved environmental preservation and energy conservation by installing environmental-friendly equipment such as dust collectors and improving the efficiency of production equipment. Costs of environmental preservation are quantified by adding the costs of capital investment associated with environmental measures, energy-saving measures, and recycling measures to expenses incurred to preserve the environment.

Environmental preservation costs

For FY2020, capital expenditures for environmental preservation amounted to 19.4 billion yen in total, or approximately 4% of the company’s capital expenditures. Investment in equipment for environmental measures of 17.0 billion yen include preventive measures for dust emissions, visible smoke emitted from steelworks stacks, extream water discharge from drain outlets, and leakage of water from the revetments and quay walls at steelworks. Investment in energy-saving equipment of 2.4 billion yen comprises measures to improve the efficiency of reheating furnaces as well as overall energy-saving measures in each manufacturing process.

Environmental preservation costs totaled 101.2 billion yen, including 53.4 billion yen in air pollution prevention costs, 11.3 billion yen in water pollution prevention costs, 2.1 billion yen in energy-saving measures, and 13.2 billion yen in environmental R&D costs. Expenses for waste disposal were reduced by promoting in-house recycling.

Cumulative Investments in Environmental Measures (0.1billion yen)

Cumulative Investments in Environmental Measures

※The figures above the bar graphs represent the amounts 6of investment made in each respective fiscal year.
Cumulative Investment in Energy- Saving Measures (0.1billion yen)

Cumulative Investment in Energy- Saving Measures

※The figures above the bar graphs represent the amounts of investment made in each respective fiscal year.
Environmental preservation costs
(¥ billion)

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Item Definition FY2020
Capital expenditures Total expenses
Pollution Prevention Costs Countermeasures against air pollution Dust collection equipment running costs, maintenance costs, exhaust gas desulfurization and denitration treatment, raw materials yard dust preventive measures costs, etc. 16.1 53.4
Countermeasures against water pollution Electricity charges incurred for treatment of waste water discharged from steelworks, chemical costs, maintenance costs, working expenses (excluding expenses required for treatment of circulated water) 0.9 11.3
Global Warming Prevention Costs Energy saving measures Running costs and maintenance costs of energy-saving facilities 2.4 2.1
Costs of Recycling Resources Treatment of by-products and industrial waste Expenses incurred in landfill work, incineration, and treatment of by-products and industrial waste commissioned to third parties - 9.3
Treatment of general waste from business activities Expenses incurred in the treatment of general waste from business activities - 0.6
Environmental Management Activities Cost Construction of EMS and acquisition of ISO14001 certification Expenses required for the construction and maintenance of EMS - 0
Monitoring and measurement of environmental loads Expenses required for monitoring air, water, etc., at steelworks - 1.4
Personnel expenditures related to environmental measures Personnel expenditures for employees in charge of environmental matters - 2.8
Research and Development Costs Development of Eco Products R&D costs (including personnel costs) for environment-friendly steel products - 7.1
Development of products which have low environmental impact during manufacture Development costs (including personnel costs) required for measures for by-products and energy conservation technology - 6.1
Social Activity Costs Creating green areas at steelworks Expenses required for creating green areas at steelworks - 2.6
Supporting environmental organizations, and advertising Expenses required for environmental publicity and participation in exhibition - 0.1
Other Environmental Costs SOx levy Payments to health damage prevention businesses specified by the Law Concerning Pollution-Related Health Damage Compensation and Other Measures - 4.3
Total 19.4 101.2
Reference: Net income (consolidated basis) -32.4

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