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

Capital expenditures for environmental preservation amounted 19.8 billion yen in total for FY2017: 17.8 billion yen for investment in equipment for environmental measures and 2 billion yen for investment in energy-saving equipment. The aggregate amount accounted for approximately 5% of the total cost of equipment investment.

As environmental measures, we invested in preventive measures for dust emissions, visible smoke emitted from steelworks stacks, abnormal water discharge from drain outlets, and leakage of water from the revetments and quay walls at steelworks.

For saving of energy, measures were taken to improve the efficiency of heating furnaces as well as overall energy-saving measures in each manufacturing process.

In fiscal 2017, the environmental preservation costs totaled 85.3 billion yen, including 41.6 billion yen in atmospheric pollution prevention costs, 11.5 billion yen in water pollution prevention costs, and 10.6 billion yen in environmental R&D costs.

Among the environmental preservation costs, atmospheric prevention costs including measures to prevent scattering of dust generated at steelworks accounted for the largest share. We also promote in-house recycling to reduce expenses on waste disposal.

Cumulative Investments in Environmental Measures

Cumulative Investments in Environmental
Measures (billion yen)

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

Cumulative Investment in Energy- Saving
Measures (billion yen)

※The figures above the bar graphs represent
the amounts of investment made
in each respective fiscal year.
Cumulative Investments in Support of Recycling Measures

Cumulative Investments in Support of Recycling Measures
(billion yen)

※The figures above the bar graphs represent the amounts
of investment made in each respective fiscal year.

Effects of environmental preservation

It is difficult to quantify environmental preservation effects in monetary terms, since such calculation would require many assumptions. Therefore, environmental preservation performance is reported as effects vs. costs of taking environmental measures in this report and on our website.

For example, reduction in energy consumption is shown on page 19; water consumption volume, on page 30; and various resources spent, on page 20. For atmospheric substances, SOx and NOx emissions are shown; for water quality and soil, individual performance indicators are used; for hazardous chemical substances, actual reduction volume of substances such as dioxins, benzene, and VOCs are stated; and for waste products, reduction in final disposal volume is stated.

Nippon Steel will continue efforts to improve accuracy in environmental accounting and use it as a management benchmark to effectively invest in equipment and attempt to further preserve the environment and conserve energy.

Environmental Preservation Costs (billion yen)

Item Definition FY2017
Pollution Prevention Costs Countermeasures against air pollution Dust Dust collection equipment running costs, maintenance costs, exhaust gas desulfurization and denitration treatment, raw materials yard dust preventive measures costs, etc. 16.4 Total
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) 1.4 11.5
Global Warming Prevention Costs Energy saving measures Running costs and maintenance costs of energy-saving facilities 2.0 3.0
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 - 7.4
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 - 0.03
Monitoring and measurement of environmental loads Expenses required for monitoring air, water, etc., at steelworks - 1.2
Personnel expenditures related to environmental measures Personnel expenditures for employees in charge of environmental matters - 2.5
Research and Development Costs Development of eco products R&D costs (including personnel costs) for environment-friendly steel products - 3.6 Total
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 during manufacture - 7.0
Social Activity Costs Greening, supporting environmental organizations, and advertising Expenses required for creating green areas at steelworks, environmental publicity, and participation in exhibition - 2.7
Other Environmental Costs SOx levy Payments to health damage prevention businesses specified by the Law Concerning Pollution-Related Health Damage Compensation and Other Measures - 4.2
Total 19.8 85.3

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