Furukawa Electric Group CSR Report 2008 Group Philosophy

CORPORATE PHILOSOPHY Drawing on more than a century of expertise in the development and fabrication of advanced materials, we will contribute to the realization of a sustainable society through continuous technological innovation. MANAGEMENT PHILOSOPHY With an eye to the future, we at the Furukawa Electric Group pledge to: . Live up to the expectations and trust invested in us by society, with fairness and integrity. . Apply the sum total of our expertise to satisfy our customers and grow with them. . Continuously strive to achieve world-class technological innovation, and transform ourselves in every area of endeavor. . Nurture human resources at every level, so that we can become a more diverse and creative organization. The Furukawa Electric Group Credo 1. Maintain high ethical standards, and value honesty and integrity above all. 2. Continually improve, innovate, and lead, in every area of endeavor. 3. Take a hands-on approach that addresses the reality of every situation - in the office, at the factory, and on site. 4. Be proactive - take the initiative and work with others, persevering until a solution is found. 5. Maintain open channels of communication between departments and divisions, so that we can share ideals and help each other grow.

Editorial Policy

Scope of this Report Editorial Policy Organizations Covered This Report covers The Furukawa Electric Co., Ltd. and all mem- Furukawa Electric first started to issue Environmental Reports bers of the Furukawa Electric Group, including affiliated companies. in fiscal 2000. Reflecting the growing need to also disclose infor- Scope of Themes Covered mation relating to social matters in recent years however, we 1) The economy decided to change the name of our fiscal 2006 publication to Furukawa Electric and its consolidated subsidiaries (110 companies) the Environmental and Social Report. Following organizational 2) The environment and society reforms in February 2007, we established a CSR Division and have Furukawa Electric and all companies participating in the Liaison since stepped up our CSR management activities. We conse- Meeting for Consolidated Environmental Management* quently renamed this publication the “CSR Report” in 2007 and * Refer to the List of Companies Participating in the Liaison have since included information covering a broader range of areas, Meeting for Consolidated Environmental Management. including both social and financial matters. Period Covered This Report has been compiled with reference to the From April 1, 2007 to March 31, 2008 Environmental Reporting Guidelines (Fiscal 2007 version) pub- Includes selected information on past initiatives and activities lished by the Ministry of the Environment. during fiscal 2008.

1 2 Contents

Message ...... 3


The Furukawa Electric Group Basic CSR Policy ...... 5 List of Companies Participating in the Liaison Corporate Governance ...... 6 Meeting for Consolidated Environmental CSR Management ...... 7 Management Compliance ...... 8 Environmental Company Name Accounting Access Cable Company ○ Asahi Electric Works Co., Ltd. ○ Inoue Manufacturing Co., Ltd. ○ Economic Performance NTEC Ltd. ○ .... F-CO Co., Ltd. Furukawa Electric Group Overview and Financial Report 9 FCM Co., Ltd. Okano Electric Wire Co., Ltd. ○ Okumura Metals Co., Ltd. ○ Kyowa Electric Wire Co., Ltd. Social Performance The Zaikoo Co., Ltd. Relationship with our Customers ...... 11 Sunsunny Industry Co., Ltd. Shodensha Co., Ltd. ○ Relations with our Shareholders and Investors ...... 13 Seiwa Giken Inc. Relations with our Suppliers ...... 14 Totoku Electric Co., Ltd. ○ Relations with our Employees ...... 15 FITEC Corporation Furukawa Automotive Systems Inc. ○ Involvement with Society and Local Communities .... 19 Furukawa Circuit Foil Co., Ltd. ○ Social Contribution Activities at Individual Works ..... 22 Furukawa Sangyo Kaisha Ltd. Furukawa C&B Co., Ltd. Furukawa Industrial Plastics Co., Ltd. ○ Furukawa-Sky Aluminum Corporation ○ Environmental Performance Furukawa Precision Engineering Co., Ltd. Furukawa Engineering & Construction Inc. ○ Furukawa Electric Group Basic Environmental Policy ..... 24 Furukawa Techno Material Co., Ltd. ○ Environmental Management Targets and Performance .... 25 The Furukawa Electric Engineering Service Co., Ltd. ○ Environmental Management System ...... 26 Furukawa Electric Industrial Cable Co., Ltd. ○ The Furukawa Battery Co. Ltd. ○ Environmental Risk Management ...... 27 Furukawa Logistics Corporation Business Activities and their Environmental Impact .... 28 Furukawa Life Service Inc. Environmental Accounting ...... 29 Miharu Communications Inc. ○ Riken Electric Wire Co., Ltd. ○ Producing Environmentally Friendly Products ...... 30 Companies marked with a “○” in the Environmental Accounting column implement ...... environmental accounting Efforts to Prevent Global Warming 34 *1) T.H. Furukawa Electric Co. Ltd. became the Hachinohe Plant of the Access Cable Company in April 2008. Zero Emission Activities ...... 36 *2) Furukawa Infonet Products Co. Ltd. changed its name to Furukawa C&B Co. Ltd. in December 2007 and assumed control of business activities from Broad Wireless Chemical Substance Management ...... 37 Corporation in April 2008. Environmental Preservation Data ...... 38 Inquiries

Safety and Environment Promotion Department, CSR Division Initiatives at Affiliated Companies ...... 39 The Furukawa Electric Co., Ltd. Third-Party Opinion ...... 41 TEL: +81-45-311-1334 FAX: +81-45-311-1931 History of Furukawa Electric’s CSR Activities ...... 42

1 2 Message

Striving towards a sustainable society through social contribution activities and environmentally friendly product development

Masao Yoshida President & Chief Operating Officer

Through tireless technological innovation revolving around our aiming to focus extensively on the promotion of new concepts core material capabilities built up over more than a century, we and more effective initiatives. We will ensure that all of our initia- at the Furukawa Electric Group have continued to work towards tives, including contributing to the development of energy effi- our vision of becoming a highly profitable corporate group with a cient environmentally friendly products and participating in Team strong global presence whilst consistently basing our operations Minus 6%, are implemented on a groupwide basis at all of our on an underlying philosophy of contributing to the realization of a manufacturing and non-manufacturing bases. genuinely successful and sustainable society. In terms of social contribution activities, in May we set out In the face of mounting global issues such as the environ- the Furukawa Electric Group Basic Policy on Social Contribution ment and poverty, we recognize that our activities as a company Activities and outlined our commitment to consistently and tire- depend on the development of a sustainable, stable society. lessly undertake social activities, revolving primarily around three We will therefore continue to contribute to society through the categories; nurturing future generations, promoting sport and further advancement of Furukawa Electric’s technology and the culture and living side by side with local communities. In addition development of products that will help preserve the environment to contributing to society through our core business activities, we and enrich people’s lives. also intend to harness the extensive human resources and facili- As President, I have set out a five-pronged policy for the ties at the Furukawa Electric Group’s disposal in order to help cre- Furukawa Electric Group for fiscal 2008; (1) reinforcing our busi- ate a sustainable society and strengthen the bonds that we have ness foundations, (2) improving product capabilities to ensure built up with local communities over more than a century. that we are our customers’ first choice, (3) restructuring our busi- Having set out a medium-term business plan in the form of ness portfolio, (4) stepping up environmental initiatives and social Innovations 09, the Furukawa Electric Group will continue to make contribution activities and (5) raising awareness of the Group every effort to sustain R&D and capital investment, particularly Philosophy and reforming our corporate culture. The first of these in our four priority fields (the auto industry, electronic compo- goals, reinforcing our business foundations, will include empha- nents, photonics/network technology and the environment), sizing underlying safety and quality, stepping up internal control and improve asset efficiency through initiatives such as reducing activities and prioritizing compliance and reflects my intention to inventory assets and accounts receivable, with our sights set on focus on the fundamental aspects of our business. the target of consolidated sales of ¥1.25 trillion in fiscal 2009. I have earmarked the process of stepping up environmental Based on the notion that corporate value depends on the bal- initiatives and social contribution activities as one of my top pri- ance that a company strikes between profitability, environmental orities for this year in particular. In terms of environmental initia- protection and social contribution (the so-called “triple bottom tives, we will continue to work towards reducing greenhouse gas line”), we intend to focus on communication with our customers, emissions and achieving zero emissions based on the 3Rs, whilst employees, shareholders, members of local communities and all also developing environmentally friendly products and promot- of our other stakeholders in an effort to develop our business and ing green procurement. As 2008 marks the beginning of the first achieve our targets in line with the needs and expectations of commitment period under the Kyoto Protocol, we intend to tackle society as a whole. the global issue of reducing greenhouse gases, with renewed We look forward to receiving your honest feedback regarding determination. In addition to stepping up the pace of the various our initiatives. measures that we have implemented to date, this year we are also

3 4 Expanding CSR activities so as to respond quickly and effectively to society’s needs and environmental changes

Tetsuya Sato Director, Member of the Board, Chief Social Responsibility Officer

In light of a spate of product-related and corporate scandals, a groupwide basis, putting the 3Rs into practice (e.g. reducing earthquakes and other natural disasters and the increasing glo- waste), implementing groupwide soil pollution measures, pro- balization of corporate activities, companies are facing stricter moting green supplier schemes and CSR procurement initiatives, requirements to fulfill their social responsibilities than ever before. opening up our facilities for use by local communities, taking part In addition to reliably carrying out their core business operations, in local events and actively promoting employment for people including guaranteeing the safety and quality of products and with disabilities. services and ensuring compliance, companies also have a respon- In addition to providing further details of these and other initia- sibility to protect the environment and contribute to their local tives in this CSR Report, we make the most of every opportunity to communities and society as a whole. meet and discuss business activities with our stakeholders, includ- Based on an underlying desire to ensure that the Furukawa ing at events such as last year’s Furukawa Innovation Expo ’07 and Electric Group as a whole contributes to the realization of a various exhibitions and presentations. We also make every effort genuinely successful and sustainable society in accordance with to provide our overseas stakeholders with details of our activities our new Group Philosophy and Basic CSR Policy, we continue to through the distribution of an English version of this CSR Report promote business activities geared towards striking a three-way via our overseas bases and other facilities. We hope you will all balance between profitability, environmental protection and continue to provide us with feedback and keep us informed of any social contribution. We have therefore established a CSR and Risk requests. Management Committee (run by the CSR Division) consisting of We will continue to improve communication with all of our the Chairman, President, Company Presidents and Chief Officers stakeholders, who represent the cornerstone of our CSR activi- under the supervision of the Board of Directors, the core of our ties, and expand the Furukawa Electric Group’s CSR activities as a corporate governance operations. This enables our management whole so as to respond quickly and effectively to society’s needs staff to implement CSR and risk management activities based on a and environmental changes in the future. groupwide framework. In addition to planning, implementing and providing support for measures ranging from compliance, risk management and safety through to environmental and social contribution activi- ties, our CSR Division also monitors groupwide activities and takes appropriate action as and when necessary to ensure that our CSR activities run smoothly and effectively. Our main initiatives at present include organizing training in areas such as legislation and corporate ethics, reinforcing compli- ance, assessing groupwide risks and formulating business contin- gency plans (BCP), ensuring quality control, managing key risks in areas such as information security, reducing energy consumption and CO2 from production and shipping, contributing to life cycle assessment (LCA) through initiatives such as the development of lightweight products, expanding our range of eco-products on

3 4 Management The Furukawa Electric Group Basic CSR Policy

Each of the companies that make up the Furukawa Electric Group undertakes CSR activities in accordance with the fol- lowing basic Group policy. Basic Policy We fully recognize the responsibilities of the Furukawa Electric Group to society and will strive to maintain and improve on solid, friendly relationships with all of our stakeholders and contribute to the sustainable development of society through corporate, environmental and social activities.

We carry out all of our activities in line with the above policy, striking a balance between corporate, environmental and social contribution activities. As a basic philosophy underpinning our CSR activities, we have also prepared a set of Furukawa Electric Group Action Guidelines. Furukawa Electric Group Action Guidelines The officials and employees of the Furukawa Electric Group will perform their duties in accordance with the following action guidelines. We, the Company officials and employees of the Furukawa Electric Group, will: (1) Fully recognize the responsibilities of the Furukawa Group to society and strive to maintain and improve on solid, friend- ly relationships with all of our stakeholders and contribute to the sustainable development of society through corporate, environmental and social activities. (2) Aim to create a company that is useful to society by developing products designed to aid the development of society and by providing reliable products and services. (3) Comply with domestic and international laws and regulations and act in accordance with internal regulations and other rules such as social norms and ethics. (4) Properly display and adequately disclose financial statements and other corporate information. (5) Deal with antisocial groups in a resolute manner. (6) Strive to act with consideration for the protection of the global environment. (7) Respect human rights, cultures and traditions as a member of the international community. (8) Create a company whose employees feel motivated, comfortable and fulfilled. (9) Continuously strive to undertake social contribution activities based around the core aims of nurturing future genera- tions, promoting sport and culture and living in harmony with local communities, as well as business-related activities, in order to maintain and strengthen community ties built up over centuries and create a better tomorrow for future genera- tions.

Our CSR Code of Conduct meanwhile acts as a set of standards for specific conduct. CSR Code of Conduct (1) Compliance with legislation and restrictions (2) Reliable, safe and environmentally friendly products and services (3) Fair competition (4) Compliance with overseas business and international trade legislation and restrictions (5) Information management and adequate disclosure (6) Respect for health, safety, human rights and the rights of others (7) Executive and employee duties

5 6 Corporate Governance

Board of Directors and Board of Corporate Auditors

The Board of Directors holds regular ficiently function in an operational moni- Auditors and Board of Corporate board meetings each month and extraor- toring and supervisory capacity as the Auditors, which are independent of the dinary board meetings as and when core of our corporate governance opera- Board of Directors, and have incorpo- necessary to speed up decision making. tions. We have also set up a CSR and Risk rated the establishment of a Board of There is also a support structure in place Management Committee under the super- Auditors into the institutional design enabling outside directors and auditors to vision of the Board of Directors, consist- of the Company itself. Based on close attend meetings provided that they have a ing of the Chairman, President, Company collaboration between our Corporate sufficiently in-depth understanding of the Presidents and Chief Officers. This acts as Auditors, Accounting Auditors and the issues being discussed, with the opinions a framework for the promotion of CSR and CSR Division, which acts as our auditing of outside officials respected as part of risk management activities from an overall department, including sharing informa- the decision making process. It is through groupwide perspective. tion and exchanging opinions, we con- measures such as these that we ensure We place great importance on the tinue to make every effort to strengthen that the Board of Directors is able to suf- function performed by our Corporate our auditing capabilities.

Operational Performance

Our operational structure is based on are run by the Company Presidents and operations are then reported back to the a company system and a chief officer operations relating to matters such as Board of Directors on a quarterly basis. system. Under the supervision of the groupwide strategies, resource alloca- President, who is responsible for overall tion and administration are handled by operational performance, operations the relevant Chief Officer. Details of such

Corporate Governance Organization Chart

Shareholders’ Meeting

Monitoring and Supervision Appoints Appoints Appoints

Board of Directors Audits accounts 12 Directors Accounting (including three outside directors) Board of Auditors Submits proposals and reports Submits reports, Corporate Auditors Submit reports CSR and Risk Management Committee attends meetings Four Corporate Auditors and audits (including two outside auditors) t4DSFFOSFQPSUTSFMBUJOH Chairman, President, Chief Officers, Company Presidents to accounting Special Committees t4DSFFOSFQPSUTSFMBUJOHUPCVTJOFTT t&YBNJOFTUBUVTPG t&YBNJOFTTUBUVTPGPQFSBUJPOTBOEBTTFUT operations and assets $FOUSBM$PNNJUUFFGPS&OWJSPONFOUBM.BOBHFNFOU Collaboration Central Compliance Committee etc. between audits t%FDJTJPOPGDSJUJDBMNBUUFSSFMBUJOHUP business operation Monitors t4VQFSWJTFTCVTJOFTTPQFSBUJPO

Business Operation Appoints Chairman & CEO Submit reports Internal Audits President & COO (CSR Division)

Advises Direction Chief O cers

Management Committee Chairman, President, Chief Officers, Company Presidents Provide support and guidance Business Company Presidents Furukawa-Sky Aluminum Corporation operations 5FMFDPNNVOJDBUJPOT$PNQBOZ &OFSHZBOE*OEVTUSJBM1SPEVDUT$PNQBOZ .FUBMT$PNQBOZ &MFDUSPOJDTBOE"VUPNPUJWF4ZTUFNT$PNQBOZ Light Metals Company Affiliate Companies Other Affiliate companies

5 6 Management CSR Management

CSR Promotion Framework

To strengthen and improve our CSR addition to stepping up all-round moni- action should problems arise, for exam- activities, the Furukawa Electric Group toring of corporate activities from the ple investigating allegations and the established a CSR Division, headed by standpoint of CSR, encompassing areas causes of problems, instituting remedial a Chief Social Responsibility Officer from internal control, compliance and risk or preventive measures and releasing (CSRO). The CSR Division consists of an management to safety, environmental statements, to deal with all eventualities Auditing Department, an Export Security protection and social contribution, and quickly and appropriately. Administration Department, a Safety and undertaking CSR activities on a standard- Environment Promotion Department ized basis, we now have the framework and an Administration Department. In in place to be able to take any necessary

CSR Promotion Framework

Board of Directors


CSRO CSR and Risk Management Committee

CSR Division

Compliance Committee Basic CSR Policy Central Committee for Environmental Management Central Safety and Health Committee Central Quality Control Committee

In-house Domestic affiliate International affiliate companies companies companies

In addition to our CSR activities, the social responsibilities as a manufacturer. the establishment of a comprehensive Furukawa Electric Group has also set up Elsewhere, we are putting in place the internal control system, including steps a Quality Promotion Department under necessary framework in response to the such as striving to maintain and improve the supervision of our Chief Production so-called Japanese SOX Act, revolving the reliability of financial reporting on a Officer (CPO). We are undertaking quality primarily around an established project groupwide basis. control activities for all of our products, team, and are making every effort to which represent the foundations of our enhance our corporate value through

7 8 Compliance


The Furukawa Electric Group defines Group Action Guidelines as our basic Committee, chaired by the Chief Social compliance as “going beyond simply philosophy on ethical and legal compli- Responsibility Officer (CSRO), to organize abiding by laws and regulations by acting ance, we continue to promote in-house the promotion of compliance activities, in accordance with the values and ethics education, inspections to prevent any with subordinate compliance commit- required of the Company and its employ- infringements on the law and a range of tees also in place at individual works and ees as responsible members of society.” other compliance-related activities. We branches around the country. Working to the Furukawa Electric have put together a Central Compliance

Compliance Education

Having compiled a set of CSR Code distribute to all officials and employees as of Conduct and CSR Code of Conduct part of our ongoing educational schemes Manual containing additional expla- targeting compliance in the workplace. nations, both based on our Furukawa We also organize compliance training for Electric Group Action Guidelines, we com- newly appointed directors, management bined the publications with a message staff and new recruits. from the President into a booklet called the CSR Compliance Handbook, which we

CSR Compliance Handbook

Internal Reporting System

To enable early detection of compli- Electric, the system includes features such ing system via an outside organization. ance violations and corrective action, as the ability to receive reports whereby The findings of investigations into report- we operate a system whereby company the reporting party remains anonymous ed matters and details of the Company’s officials and employees can file anony- whilst still exchanging emails between response are reported to the Board of mous reports directly with the Central the reporting party and the Company, Directors as appropriate. Compliance Committee (namely, an including feedback to the reporting party internal reporting system). Using a pro- on the Company's response to the matter. prietary system developed by Furukawa We have also set up an external report-

Risk Management

The CSR and Risk Management and monitors progress accordingly in an including the introduction of a system to Committee runs risk assessments every effort to minimize risks. confirm the safety of all employees. Over year to identify any potential risks. All In fiscal 2007 we started to formulate the course of fiscal 2008, we will continue risks facing the Group are then assigned a business contingency plan (BCP) to be to expand our large scale natural dis- an order of priority. The CSR and Risk implemented in the event of a large-scale aster BCP and start working on plans in Management Committee devises natural disaster or similar event and put response to an outbreak of a new strain of response plans for major groupwide risks in place an initial response framework, influenza.

7 8 Economic Performance Furukawa Electric Group Overview and Financial Report

Furukawa Electric was established in 1884, at which time it dealt mainly in electric wire and wrought cop- per products. These days, Furukawa Electric operates on a global scale in five businesses: telecommunica- tions, energy and industrial products, metals, electronics and automotive systems and light metals.

Corporate Profile Domestic Bases

Name: The Furukawa Electric Co., Ltd. Head Office: President: Masao Yoshida 2-3, Marunouchi 2-Chome, Chiyoda-ku, Tokyo Founded: 1884 Works: 5 (Nikko, Chiba, Hiratsuka, Mie and Osaka) Sales: 1,174.2 billion yen (fiscal 2007) Branch Offices, Branches and Sales Offices: 10 Number of employees: 37,669 (as of March 31, 2008) Research Laboratories: 5 (Yokohama R&D Laboratories, Metal Research Center, Ecology & Energy Laboratory, FITEL Photonics Laboratory and Automotive Technology Center)

Overseas Bases

67 bases in 18 countries Asia: 49 North and South America: 13 Europe: 5


Net Sales (Consolidated) Net Income Total Assets

(100 million yen) (100 million yen) (100 million yen) 12,000 300 12,000 11,742 2003 158 255 298 152 11,106 10,000 11,047 0 10,000 10,522 10,967 -1,401 2004 2005 2006 2007 (Fiscal 10,147 year) 9,913 8,000 -300 8,000 8,725 6,000 7,399 7,759 -600 6,000 4,000 -900 4,000 2,000 -1200 2,000

0 (Fiscal -1500 0 (Fiscal 2003 2004 2005 2006 2007 year) 2003 2004 2005 2006 2007 year)

9 10 Main Business Segments

Main Business Segments Services and others (3.6%) Telecommunications (12.9%)

Electronics and automotive systems (21.2%) Energy and industrial products (24.9%)

Light metals (20.4%) Metals (16.9%)

Three Core Materials Business Segments Main Products Main Customers

Telecommunications Optical fibers and cables Lasers Communications Optical amplifiers Communication equipment Networking equipment

Energy and Industrial Products Copper wire rods Power Optics Industrial power cables Railways Microcellular foam Electrical machinery Semiconductor process- ing tapes Construction

Metals Copper foil Non- Wrought copper prod- Electronic equipment ferrous ucts for electronics and electrical machinery Metals and

Synthesis Air conditioner copper piping Construction Processing Superconducting wire

Electronics and Automotive Systems Wire harnesses for auto- mobile Electronic components Automobiles Components for elec- Electronic equipment Plastics tronic equipment and electrical machinery Magnet wires

Light Metals (Furukawa-Sky) Aluminum can stock Aluminum tank materials Can manufacturing for LNG vessels Shipbuilding Aluminum materials for Aircraft semiconductor manufac- turing equipment Electrical machinery Processed aluminum products

9 10 Social Performance Relationship with our Customers

Quality Control Policy At every stage of our operations, from research and development to manufacturing, sales, customer service and management, in all sections and all hierarchies, we always strive to adhere to a PDCA man- agement cycle based on actual facts, maintain and improve our products, customer service and the quality of our operations and put our management policies into practice.

A Brief History of Quality Control Activities

Furukawa Electric established a Quality ciency. Our quality control initiatives were quality management system certification Control Committee in 1949 and com- recognized in 1952 as Furukawa Electric in each of our manufacturing divisions, menced educational activities to raise was awarded the Deming Application and standardized operations. We contin- employees' awareness of statistical meth- Prize for achieving distinctive perform- ue to make efforts to improve efficiency ods and other aspects of quality control ance improvement through the applica- and other core aspects of our opera- at all our plants. This enabled us to sig- tion of TQM. tions and promote activities designed to nificantly increase quality levels, as well as In an effort to maintain and improve improve levels of quality and customer increasing operational stability and effi- quality levels, we have obtained ISO 9001 satisfaction.

The Organization for Improved Quality Improvement Activities Quality Levels In accordance with our basic policy of QC Circle activities are small group- To guarantee quality at every level putting quality first and implementing based activities that involve all employees throughout the company, we have uniform companywide quality control, we and harness QC techniques in an effort to established a Central Quality Control formulate a companywide quality control make ongoing improvements in the work- Committee with direct links to the policy each year. This then forms the basis place. Debriefing sessions are held at indi- President to oversee the companywide for divisional quality control policies in vidual works and on a companywide basis promotion of quality control activities. each division. to report back on the results of activities. We have also set up Divisional Quality For fiscal 2008, we have set out a Such sessions have grown substantially in Control Committees with direct links companywide quality policy geared scale in recent years due to the inclusion of to the heads of each division and make towards eliminating all defects through overseas affiliated companies. every effort to maintain and improve “DAN-TOTSU” (unrivalled) quality activi- the quality of our products, services and ties. To put this policy into practice, we are The Flow of Companywide Quality Control Policy operations so as to offer continual quality promoting quality improvement activi- assurance. ties in each division, revolving primarily Fiscal 2008 companywide around preventive activities and efforts to quality control policy Quality Control Organizational Structure cut costs resulting from in-house failings. Eliminating all defects through “DAN- TOTSU (unrivalled) quality activities” We are also implementing a range of President support initiatives, including FR proposal •• Preventive activities •• Honest onsite implementation based on Central Quality Control Committee and QC Circle activities. real products and real situations (Chair: CPO / Members: division heads) Taking their name from the “F” of Furukawa Electric and the “R” of renewal, reform and rationalization, FR proposal Preventive activities to eliminate defects Quality Control Management Meeting activities involve employees submitting careless mistake prevention, (Members: Quality Control Managers new product audits from individual divisions) ideas on how to improve operations. Proposals are then implemented and Efforts to cut costs resulting from in-house failings Divisional heads Affiliated companies improvements made in an effort to fun- damentally strengthen the company’s Improvement activities Quality Control Manager business. Such activities continue to yield FR proposal activities, QC cir- cle activities Divisional Quality Control Committees substantial results each year.

11 12 Progress with Quality Improvement Activities Customer Complaints (fiscal 2001 = 100) As part of the ongoing range of quality bines a wide range of technology, prod- 100 improvement activities we are currently ucts, services and expertise to help its undertaking, we have managed to sig- customers to generate value. nificantly reduce customer complaints. We have received glowing feedback We have successfully reduced complaints from our customers and have even 50 to 27% of levels in fiscal 2001 (as of fiscal received awards from numerous clients, 2007). In response to an array of increas- including the special award for weight ingly sophisticated, diverse and complex reduction technology from Motor 0 customer needs, Furukawa Electric com- Corporation. 2001 2002 2003 2004 2005 2006 2007 (Fiscal year)

Furukawa Innovation Expo ‘07

A comprehensive Furukawa Electric people visited the event over the two being the first such comprehensive Group technology exhibition based days, with a great many also attending technology exhibition in the Group’s around the theme “sowing the seeds of the accompanying special seminars 123 year history, the event was a huge value creation”, Furukawa Innovation and technical presentations. Despite success. Expo ’07 was held on October 3 and 4, 2007 at Tokyo International Forum. The event saw 34 Group companies and four Furukawa Electric companies join- ing forces to extensively showcase the breadth of the Group’s business, the depth of the Group’s material technol- ogy capabilities and the strength of the Group’s ability to drive technology forward into the future. A total of 6,309 Reception for invited guests Welcome lobby

Thematic theater The Group network The Advanced Zone: photonic and network technology

The Advanced Zone: electronics The Future Zone Special seminar venue

11 12 Social Performance Relations with our Shareholders and Investors

Based on two-way communication with our shareholders and investors, we engage in IR (investor relations) activities in an effort to contribute to society and help enhance our value as a company. We set out specific objectives for sustainable growth in March 2006 in the form of our 2006-2009 Medium-Term Business Plan, Innovations 09, and are currently implementing a range of measures geared towards meeting the targets out- lined therein, including consolidated sales of ¥1.25 trillion and operating profit of ¥70 billion in fiscal 2009.

Information Disclosure Policy and IR Framework

The Furukawa Electric Group Action Corporate Information meanwhile set out Chief Financial Officer (CFO) and are man- Guidelines state that we will “maintain a framework for the disclosure of appro- aged by the Investor & Public Relations and improve upon solid, friendly rela- priate information at the appropriate Unit of the Corporate Strategy Planning tionships with all of our stakeholders.” time. Department. Regulations on the Timely Disclosure of All IR activities are overseen by the

Relations with Institutional Investors and Securities Analysts

In addition to holding management brief- Main IR Activities in 2007 ings (covering interim and year-end results January and medium-term plans) for institutional February Third quarter earnings announced March Tours of overseas plants investors and securities analysts, both domes- April Annual earnings announced; Roadshows in US tic and international, we actively organize May meetings all year round. Through results brief- and Europe June General Shareholders Meeting ings, overseas roadshows and other activities, July we engaged in communication with a total of August First quarter earnings announced 899 institutional investors and securities ana- September Roadshows in Asia; Conference in US and Europe October Furukawa Innovation Expo ‘07 lysts over the course of fiscal 2007 (an increase November Interim earnings announced; Roadshows in Asia of 100 compared to fiscal 2006). As of the end December Tours of overseas plants of March 2008, the percentage of company shares held by overseas investors stood at End of year briefing session 22.64%.

Relations with Individual Investors Returning Profits to Shareholders

In fiscal 2007, we substantially upgraded on the previous year), accounting for 28.7% In addition to operating a stable divi- the Furukawa Electric website (http://www. of company shares. dend policy, we also aim to pay out divi- furukawa.co.jp/zaimu). We improved the dends in line with the medium- to long- shareholder and investor information sec- term growth strategy set out under our tion of the website in particular by incorpo- 2006-2009 Medium-Term Business Plan: rating a Quick Guide to Furukawa Electric Innovation 09. and a Frequently Asked Questions feature During fiscal 2007, we paid out interim to help people get to know the company a and end of year dividends of 3.5 yen per little better and uploading a range of docu- share apiece, making a total of 7.0 yen per ments and the latest information for individ- share, representing a year-on-year divi- ual investors. Please feel free to take a look. The shareholder and investor informa- dend increase of 0.5 yen per share. tion (IR) section of the website We have also put in place a system to enable the timely disclosure of important Trends in Shareholder Distribution 100% information, including through a registra- Securities firms, etc. Overseas companies tion-based email IR newsletter service. In 80% recognition of our efforts, the Furukawa Domestic companies Financial institutions 60% Electric website was ranked number one in Individuals the nonferrous metal category of the 2007 40% ranking of listed company websites pub- lished by Nikko Investor Relations. As of the 20% end of March 2008, we had a total of 67,698 0% individual shareholders (an increase of 2,572 January 1, 2007 January 1, 2008 (Fiscal year)

13 14 Relations with our Suppliers

Striving to ensure optimum purchasing on a steady, ongoing basis

Our purchasing policy here at cooperative relationships with our sup- to hold Supplier Meetings in fiscal 2006 Furukawa Electric is to “establish strategic pliers, we believe that supplier relations in an effort to select suppliers based on relationships with suppliers to ensure are becoming even more important in more strategic, transparent criteria. optimum purchasing on a steady, ongo- terms of making sustainable develop- ing basis.” Although we have always ment a reality. We therefore introduced a placed a great deal of importance on supplier evaluation scheme and started

Supplier Meetings and Supplier Evaluation Scheme

Following on from the first meeting in details of our supplier evaluation scheme. strengthen cooperation with individual fiscal 2006, we held our second Supplier Our supplier evaluation scheme cov- suppliers and establish relationships Meeting in October 2007. We used the ers areas such as quality, price, speed of that are conducive to mutual sustainable event, which was attended by approxi- delivery and the reliability of individual development. mately 400 of our major suppliers, to suppliers. In fiscal 2007 we were able to provide an overview of the company and strengthen mutual understanding and outline our purchasing policy, as well establish a clearer picture of the current as giving a presentation on the history situation by providing each supplier of technical development at Furukawa with feedback based on their evaluation Electric in an effort to help our suppliers results and exchanging opinions. We plan develop a better understanding of our to continue to hold Supplier Meetings unique technology. We also explained and evaluate our suppliers in order to

Furukawa Electric Purchasing Policy (outline)

● We will establish strategic relationships with suppliers to ensure optimum purchasing ● We will guarantee the reliability and safety of materials and supplies and their steady procurement ● We will employ purchasing methods closely linked to production methods ● We will implement global procurement ● We will engage in green procurement and enforce compliance This year’s Supplier Meeting

Promoting CSR Activities in Relation to Procurement

Furukawa Electric promotes compli- vidual suppliers to provide details of their ance initiatives as part of the procure- latest CSR initiatives. We intend to pro- ment of materials and supplies in accord- mote CSR-oriented procurement whilst ance with the Furukawa Electric Group maintaining cooperative relationships Action Guidelines. We have also added with individual suppliers in the future. a new section to the supplier screen on our purchasing system to encourage indi-

13 14 Social Performance Relations with our Employees

Relations with our Employees

Personnel Management Policy

Our basic personnel management places that are free from irrational dis- schemes to enable employees to achieve policy is geared towards creating human crimination and harassment. We believe a work-life balance. resources who are capable of putting five that this is crucial in order to get the most By combining all of our employees’ principles set out in the Furukawa Electric out of the abilities that our employees individual abilities, creating jobs suited to Group Credo into practice. have to offer. Based on these foundations, current needs and providing safe prod- If individual employees abide by appli- we are aiming to bring out employees’ ucts, we are striving to contribute to a cable laws and rules, act in accordance creativity by devising a personnel system sustainable society and create a company with their social and moral responsibili- that will harness employees’ various abili- that both motivates its employees and ties and interact with others fairly and ties and individual personalities, through fills them with pride. honestly, we will be able to establish safe, initiatives such as equal treatment irre- healthy working environments and work- spective of age or gender and support

Outline of Furukawa Electric’s Personnel System

Skill development ● OJT ● OFF-JT Global Business Leader training Graded training Education in specialist expertise External training schemes ● Self-development Support for distance learning and English conversation classes

Remuneration Recruitment and assignment Impartial evaluation Monetary remuneration ● New graduates, mid-year ● Evaluation of performance, recruitment attitude and contribution ● Job rotation ● Management-by-objective Non-monetary ● Career advancement inter- system remuneration view system ● Award schemes

Benefits and welfare ● Pension scheme ● Company housing and Diverse work patterns and work-life balance support schemes accommodation ● Savings and property support ● Shareholders association, etc.

Health, safety, fairness and compliance

15 16 Diverse Work Patterns and Work-Life Balance Support Initiatives

In addition to operating a number of employees will be able to use carried- their children. As it stands, we are now schemes in support of employees’ diverse over leave in place of maternity/paternity entering the implementation stages of working patterns, we also continue to leave of for the purposes of looking after our second phase action plan. review areas such as labor management and personnel systems to enable them Diverse Work Pattern and Work-Life Balance Support Schemes Scheme/educational to reflect a similar approach in light of Purpose and details Japan’s dwindling birth rate and aging initiative Flexible working We provide lifestyle support to enable employees to work efficiently in line with business demand society. As well as striving to enhance our hours and strike a work-life balance. We provide employees with up to 25 days annual paid leave (e.g. if an employee has been with the employees’ working lives, we also work Annual paid leave company for 11 years or longer) together with our employees to actively We allow all employees to take three days consecutive leave every year providing that it does not support their personal lifestyles and help Consecutive leave exceed their annual paid leave entitlement. Employees can obtain an additional two days every five them stay in good health through educa- years (up to a maximum of five consecutive days). Paid leave may be taken in half-day units to enable employees to take care of minor personal errands Half-day paid leave tional and other initiatives. on week days. In recognition of measures implement- Congratulatory or We operate a congratulatory and condolence leave scheme whereby, for example, an employee can ed as part of our first phase plan (fiscal condolence leave take five days paid leave if their wife gives birth to a child. Up to ten days of annual paid leave can be carried over, for up to five years, and can be used if an em- Carried-over leave 2005-06) in accordance with the Law for ployee is ill, providing nursing care, on maternity/paternity leave or looking after their children. Measures to Support the Development Maternity/paternity We provide support over and above legal requirements to enable employees to strike a work-life bal- leave (and reduced ance, including partial pay during maternity/paternity leave and the option for employees to work of the Next Generation, in fiscal 2007 working hours) reduced hours thereafter until their child reaches elementary school age. we were accredited as a company that Nursing care leave We provide support over and above legal requirements to enable employees to strike a work-life actively supports the development of the (and reduced working balance, including enabling employees to take nursing care leave (or the option of working reduced hours) hours) for up to a year at partial pay. next generation. As part of our second We operate a reemployment scheme for any employees aged 60 or over who are in good health and Reemployment after wish to remain in work. The duration of reemployment is being increased in phases, with employees phase action plan (fiscal 2007 onwards) retirement meanwhile, we have significantly relaxed ultimately entitled to be reemployed up to the age of 65 (in response to revised legislation in 2006). We, labor and management, jointly organize seminars every year to provide support to help middle- requirements to make it easier for male Retirement seminars aged and older union members (those aged 50 or older as a rule) to make the most of their time in employees to take paternity leave. We work and plan for their life after retirement. We, labor and management, jointly organize seminars every year to provide individual support to have also established a system for the Middle-age seminars help middle-aged employees (those aged 40 or older as a rule) to stay fit and healthy, including meas- provision of financial support whereby ures to prevent illness.

Recruitment Recruitment Figures (People) Fiscal year 2004 2005 2006 2007 2008 The table on the right shows figures for nel to act as the driving force enabling us New graduates 34 32 53 71 85 (Female new the number of employees recruited over to sustain and develop our business in the 3 2 6 8 10 graduates) the last five years. As we continue to expand future, particularly fair-minded, enthusiastic Mid-year recruits 0 1 10 14 Unknown our business in line with society’s needs, personnel with high ethical standards who Clerical staff 1 2 0 10 Unknown we intend to continue to secure person- are willing to take on new challenges. Professional staff 0 0 47 50 29 * Figures for fiscal 2008 refer to numbers of new

Employment for People with Disabilities

Although we currently exceed the 1.8% for people with disabilities. Furukawa New Number of Employees with Disabilities statutory target rate of employment for peo- Leaf, a special subsidiary established in 2004, (as of June 1 each year) (%) ple with disabilities (1.84% as of March 2008), handles cleaning operations at our Hiratsuka 2.0 we continue to actively promote employment Works on a subcontract basis and has a 1.80 workforce that includes ten employees with 1.54 1.49 disabilities. Operations were expanded even 1.5 1.32 1.26 further in fiscal 2007, with eight people with disabilities now employed at our Chiba Works 1.0 as well. 2003 2004 2005 2006 2007 (Fiscal year) We plan to continue to expand employ- * In April 2004, the exclusion rate set out when the rate of employment was calculated was lowered, reducing the ment for people with disabilities via special rate of employment. subsidiaries and at Furukawa Electric in the * Average rate of employment for people with disabilities on the first of each month from April to the following March. future, with an eye to substantially exceeding A group of Furukawa New Leaf workmates share a smile statutory targets. (Chiba Works)

15 16 Social Performance Relations with our Employees

Employee Assignment, Education and Training Evaluation and Treatment We believe that our strength as a com- It is through these training opportu- We make every effort to assign employ- pany stems from the synergy of the abili- nities that we are trying to establish a ees and place them in specific positions ties of each and every one of our employ- wider awareness of the Furukawa Electric based on their individual motivation and ees and that their abilities improve on a Group Philosophy formulated in fiscal abilities based on the concept of equal practical level through their day to day 2007. We also focus on training designed opportunities. As part of such efforts, we work duties. to improve manufacturing capabili- operate a range of consultation schemes In addition to giving individuals the ties, compliance-related education and and give employees opportunities to chance to grow and develop through human rights education aimed at raising reflect on their career goals. their work, we also encourage enthusias- awareness of the importance of respect- In terms of employee evaluation and tic employees to independently develop ing human rights and run a number of treatment, we have introduced a person- their skills by providing opportunities other training schemes, including training nel incentive scheme to enable employees such as training, distance learning and for new recruits and employees being to be evaluated and treated fairly depend- support to help them obtain qualifica- promoted to management positions. ing on the abilities that they display and tions. their performance. We are also training In fiscal 2006, we launched the Global managers in performance evaluation and Business Leader training program to aid are working on ways for improving the the development of personnel to carry way in which the system is run. our business forward into the future. Health Initiatives Mental Health Education

Based on the Guidelines for Promoting Following on from courses for manage- advanced practical courses for manage- Mental Health Care in the Workplace ment staff in fiscal 2002 and regular ment staff in fiscal 2005 and 2006, in fiscal issued by the Ministry of Health, Labor employees in fiscal 2003, a management- 2007 we organized a stress management and Welfare, measures revolve primarily led course aimed at sharing expertise course for employees aged between 30 around annual mental health courses. with regular employees in fiscal 2004 and and 35.

Responding to Asbestos-Related Health Issues

During the period from fiscal 2005 to medical examinations. Symptoms were employees who worked at the relevant 2006, we once again investigated work- detected in one current employee and site regarding changes to the require- places that have previously been used to eight retired employees (for health card ments for issuing health cards in the wake handle asbestos products and organized applications). Also a retired employee of revisions to Occupational Health and special medical examinations for all rele- who had worked laying underground Safety Regulations in October 2007 and vant employees. We also sent out notices cables died from mesothelioma, and in will continue to monitor the situation. urging retired employees who worked 2006, this was confirmed to be an indus- at the relevant sites to undergo special trial accident. We have notified retired

Healthcare for Employees Promoting Separate Smoking Areas Working Long Hours In accordance with a 2003 notification “Concerning the In line with the Labor Standards Guidelines for Measures on Smoking in the Workplace,” Smoking Rate (Male Employees) (%) Bureau’s guidelines, “Measures to be issued by the Director-General of the Labor Standards 60 53.3 52.7 Taken by Employers to Prevent Health Bureau, we designated more than 70 smoking rooms in fis- 48.3 50 45.7 44.5 Impairment Due to Overwork,” we are cal 2004 in an effort to isolate smoking areas. As a result, 42.9 40 focusing on efforts to ensure that any of the percentage of smokers amongst male employees on a our employees working long hours stay companywide basis fell from 53.3% in fiscal 2002 to 42.9% 30 in good health, through measures such as by fiscal 2007. We intend to continue to make every effort to 20 (1) enforcing strict work restrictions based prevent passive smoking in the future, as well as actively pro- 10 0 on the results of medical examinations moting nonsmoking. 2002 2003 2004 2005 2006 2007(Fiscal and (2) operating a consultation system year) whereby employees working long hours are seen by a medical officer.

17 18 Safety Efforts We operate according to a set of Companywide Health and Safety Management Guidelines at each of our premises and companies and continue to implement a wide range of safety activities in an effort to elimi- nate occupational accidents and illnesses.

Furukawa Electric Group Safety Activities

We established the Safety Management overall safety levels through a combination Liaison Meeting in July to oversee safety of preventive measures, such as sharing issues at Furukawa Electric Group manufac- details of accidents and safety measures turing companies and have since started to and lateral implementation, safety educa- implement groupwide accident prevention tion and full inspections of our works. activities. In addition to holding two meet- ings, during fiscal 2007 we also organized a tour of the Furukawa Electric Mie Works to assist with the lateral implementation of safety measures. We are aiming to improve A tour of our Mie Works

Furukawa Electric Safety Activities

●Health and Safety ●Companywide Priority Safety Management System Activities Furukawa Electric has a Central We have formulated a number of stand- Frequency of accidents resulting in the Health and Safety Committee ardized companywide priority safety tar- suspension of operations

chaired by the company’s Chief gets and are working to prevent industri- All sectors Manufacturing Nonferrous metal rolling Social Responsibility Officer al accidents in an effort to improve safety Electric cable manufacturing Furukawa Electric (CSRO), the officer in charge of levels at all Furukawa Electric works. 2.0 safety, and promotes health 1.5 and safety activities on a com- ●Companywide Priority Safety Targets e a t

panywide basis. We also have for fiscal 2007 y R 1.0 individual Health and Safety ・Reduction of accidents due to unsafe e q u n c r

Committees at each works, F practices 0.5 chaired by the head of the rel- ・Promotion of operational standardization 0.27 evant works, and implement 0.0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007(Fiscal both standardized company- ・Comprehensive  health and safety edu- year) cation for transferred personnel and wide activities and independ- Frequency of accidents resulting in the suspension of ent works activities. temporary workers operations = (number of deaths or injuries/total working hours) × 1,000,000

●Companywide Health and Safety Group Presentation ● Forklift Truck Safety Skills Competition Meeting We hold companywide com- We undertake health and petitions aimed at promot- safety improvement activities ing and improving safe and at each of our manufacturing sites and individual work- steady forklift truck driving places. 11 groups selected by skills. A total of 18 drivers from individual works then attend individual works and affiliated a meeting at our Osaka Works companies competed in this to present the results of their Companywide Health and Safety year’s competition. Forklift Truck Safety Skills Competition activities. Group Presentation Meeting

17 18 Social Performance Involvement with Society and Local Communities

Formulating a Basic Policy on Social Contribution Activities Support and Assistance

In May 2008 we set out the Furukawa even further and fulfill our responsibili- We provide support and assistance for Electric Group Basic Policy on Social ties as a member of society in the future, victims of natural disasters and through Contribution Activities. focusing primarily on three newly deter- environmental foundations and other Although the Furukawa Electric Group mined targets; nurturing future genera- such organizations. Details of support/ has long since been involved in a range tions, promoting sport and culture and Description assistance of community-based social contribution living side by side with local communities. Donations in support of the Sichuan ¥20 million activities, we intend to step up activities earthquake Donations in support of the Niigataken ¥3 million Chuetsu-oki earthquake Chiba Environmental Restoration Fund ¥336,000 *We are also involved in and provide support for soil pollu- Furukawa Electric Group Basic Policy tion funds and various other environmental organizations. on Social Contribution Activities In other areas, we are engaged in activ- ities such as providing support for welfare The Furukawa Electric Group will uphold and strengthen the bonds built up with local facilities and to enable people with dis- communities over more than a century and consistently and tirelessly undertake social abilities to be a part of and reintegrate contribution activities, focusing on nurturing future generations, promoting sport and themselves into society. culture and living side by side with local communities as well as contributing to society We organize a charity golf tourna- through its core operations, to help create a better world for future generations. ment for employees at our Chiba Works every year and donate the proceeds to causes such as the Ichihara Social Welfare Council and earthquake victims.

Awards from Outside Sources

factories, research Award for the Development of Special Award for Weight Reduction institutions and other Recycling Technology Technology at the Toyota Global facilities actively Supplier Meeting At the 2007 National Convention of the striving to contrib- Institute of Electrical Engineers of Japan, At the Toyota Global Supplier Meeting ute to and coexist we received the 12th Honda Award for the at the Nagoya Congress Center in alongside their local communities, awards Development of Recycling Technology from February 2008, Toyota Motor Corporation were given to a total of six facilities in the Clean Japan Center for the develop- outlined its 2008 global procurement Kanagawa prefecture. ment of recycled insulated OC wire made policy to 441 assembled suppliers and from cross-linked polyethylene, announced held an award ceremony for suppliers Minister of Health, Labor and Welfare as part of a three-way joint venture with receiving awards during fiscal 2007. We Award Tokyo Electric Power Company and VISCAS received the special award for weight Corporation. The award is open to domestic reduction technology, which were pre- In conjunction with an adjoining facil- researchers and engineers who have pub- sented to President Hiroshi Ishihara by ity for the disabled, Asahi Electric Works’ lished outstanding results relating to the Toyota President Katsuaki Watanabe. Nagai Plant (Nagai, Yamagata prefecture) development of 3R (reduce, reuse and recycle) has been running workplace training technology and came in recognition of our schemes aimed at helping people with achievement in becoming the first company disabilities to reintegrate themselves in the world to recycle cross-linked polyethyl- into society for around 30 years now. ene (XLPE) into wire sheathing material. President Ishihara At a national mental health and welfare is presented with a shield by Toyota event in October 2007, the plant received President Katsuaki a Minister of Health, Labor and Welfare Watanabe Award in recogni- tion of its local Kanagawa Prefectural Government community and Community-Oriented Factory Award welfare activities. In December 2007, our Hiratsuka The award ceremony for Works received the Community- the 12th Honda Award for the Development of Oriented Factory Award from Kanagawa Recycling Technology Prefectural Government. Presented to

19 20 Local Community Clean-up Activities

We actively engage in clean-up activities in and around the local communities in the vicinity of each of our works and plants, as well as nearby coastal, riverside and other locations.

Clean-up campaign along the Inukamigawa A joint patrol around the area in the vicinity Volunteer clean-up activities on the Usuiso Clean-up campaign at Suzukatoge River (Furukawa Automotive Systems) of Kanda station (Furukawa Logistics) coast in Iwaki (Furukawa Battery) (Mie Works)

Communicating with the Community

We play an active part in community events and also invite the likes of employees’ families and local residents to festivals and other events held on company premises in an

effort to strengthen communi- Our exhibit at Eco Fair Ichihara Our exhibit at the Hiratsuka Environmental Our exhibit at Techno Fair ty ties and promote exchange. (Chiba Works) Fair (Hiratsuka Works) (Hiratsuka Works)

Taking part in sports day at a school for Nikko Waraku Odori Dance (Nikko Works) Summer Festival (Mie Works) disabled children (Furukawa Circuit Foil)

We invite students and teachers from local elementary and junior high schools and employees’ families to come and take tours of our works and also actively participate in work experience schemes for junior A tour for elementary school students A family tour (Mie Works) A work experience scheme for junior high and senior high school students. (Chiba Works) school students (Shodensha)

As part of a company spirit training scheme at our Chiba Works, we took on a teacher from Goshogawara Industrial High School in Aomori prefecture for a period of one year from April 2007. The aim of this scheme is to enable teachers to experience the workings of a private company for themselves so that they can provide students with better career guidance and help prevent job mismatches when new recruits join the company. Measurement experience (Produc- With the Site Manager tion Technology Development The teacher experienced work in four areas of the works (the shop floor, Center) maintenance, development and site management) and gave a presenta- tion summarizing his experiences at the end of the year.

19 20 Social Performance Involvement with Society and Local Communities

Social Contribution Activities Overseas

We continue to actively promote Stage II (started in 2006) 4 Donations to public hospitals (equiva- social contribution activities at Furukawa Children who have taken part in Stage lent to 1% of income tax) Industrial S.A. Produtos Eletricos (FISA) in I (above) over the last three years come Brazil. Activities during 2007 included the in on Saturday afternoons for classes The company donated 65,000 real in following. in subjects such as handicrafts, karate, 2006 and 67,000 real in 2007 in an effort athletics, dance and singing, again to help increase the number of children’s 1 Child Development Program for the taught by volunteers from FISA. 52 chil- bed available. Future dren participated in 2007, receiving a total of 100 hours of education. 5 Food and clothing donations The main aim of this program is to teach local children aged between 10 2 Support for local municipal elemen- Clothing and 400kg of food were and 15 who live in potentially dangerous, tary and junior high schools donated to hospitals over the course of poverty stricken areas the basic skills they 2007. need as members of society, to motivate Children from local schools are invited them and encourage self-development. to take part in events organized by the FISA workers’ union and presents are Stage I (started in 2004) given to 500 students twice a year (at Children come to the FISA workers’ Christmas and Easter). union for half a day three times a week for classes in subjects such as 3 Blood donation program (started in English, math, music and computer 2004) skills, taught by volunteers from FISA. Seventeen children participated in A total of 62 bags of blood were donat- 2007, receiving a total of 340 hours of ed over the course of 2007. education.

English class Computer class Singing class

Dance class Karate class Handicrafts class

21 22 Social Contribution Activities at Individual Works

Chiba Works Working together to put an end to global warming

We are working to reduce CO2 emissions at the Chiba have made our works into a green environment that exists Works based on the slogan “putting an end to global in harmony with the community. Please feel free to stop by warming.” We are tackling this issue in various different and have a look next time you visit the Chiba Works. ways, from major improvements to our facilities, including In an effort to contribute to and work in harmony with switching fuel from heavy oils and LP gas to city gas (natu- the local community, we are also actively involved in a ral gas) and replacing old equipment with new energy- range of ongoing initiatives, including environmental edu- saving technology, to improvements on a day to day level, cation as part of tours for local elementary school children including diligently turning off lighting, computers and and employees’ families, participating in Eco Fair Ichihara, Toru Kumabe other equipment when not in use and introducing “Cool schemes aimed at Manager, Chiba Works Biz” and “Warm Biz” schemes to conserve energy from air making the area more conditioners. beautiful and taking part As a result of our efforts to create a “beautiful natu- in the Yawata Seaside ral environment” last year, we have now completed our Festival. Welcome Garden. We hope that this will send out a clear environmental message not only to our employees but also our customers and local residents, acting as proof that we The Welcome Garden

Nikko Works Running on over 90% natural energy

The origins of the Nikko Works can be traced back to the doesn’t even use much regular or tap water. Faced with the nationalized production of electrical cables required for the pressing worldwide challenge of combating global warming, industrial revival during the Meiji era (1868-1912). Crude cop- we undoubtedly owe a debt of gratitude to our ancestors’ fore- per had to be extracted from Ashio Copper Mine and mass sight. We fully intend to preserve this approach to contributing produced to make electrical copper pure enough to be used to society for future generations as well. in wiring. At that time, the only option was to secure the large volumes of water and electricity required to manufacture elec- Water conduit pipes trical wiring directly. Hydraulic power plants were therefore Hiroyuki Kamishiro built to harness the power of the Daiyagawa River and other Manager, Nikko Works river systems. This provided a supply of industrial water and led to the establishment of the Nikko Works. Despite the fact that the works has always consumed a mas- sive amount of energy, from its establishment right through to the present day, over 90% of that energy is covered by hydrau- lic power, making it an environmentally friendly works that During the Taisho era (1912-1926) Now

Hiratsuka Works Small-scale full-participation social contribution campaign

Thanks to advances in health care, medical and welfare life of one child. As of March 2008, our activities here at the services in Japan in line with the country’s rapid postwar Hiratsuka Works have saved the lives of around 270 chil- growth, the number of infant mortalities has fallen sub- dren. stantially. Although we are fortunate enough to lead a I was really moved upon hearing about this campaign peaceful existence here in Japan, we must not forget that a just after joining the Hiratsuka great many children the world over lose their lives because Works and put up a bag to col- they require just a little bit more medical care or support. lect bottle tops in my kitchen In August 2007, we at the Hiratsuka Works launched a at home immediately so as to Hiroyuki Yokotachi small-scale full-participation social contribution campaign do my bit to help out with the Manager, Hiratsuka Works whereby employees collect used plastic bottle tops, which works’ small-scale social contri- are then converted into vaccines to immunize children bution activities. around the world against polio courtesy of the NPO Re-Lifestyle. As vaccines cost approximately ¥20 per person, it takes roughly 400 bottle tops (around 1kg) to save the precious

21 22 Social Performance Social Contribution Activities at Individual Works

Mie Works Environmentally friendly, well balanced management

Looking at the scenery along my walk from home to quality on a daily basis and make sure that we take appro- work as it changes through the seasons always reminds me priate action in response to the various forms of pollution just how blessed Kameyama is in terms of its natural sur- that continue to be brought to light by advances in science. roundings. Ever since the Mie Works was first established We aim to actively promote initiatives geared towards in the city of Kameyama (Mie prefecture) as Furukawa preserving the natural beauty of Kamei in our capacity as a Electric’s manufacturing base in western Japan in 1971, we company of which the area can be proud. have continued to run operations in a well balanced man- ner, placing top priority on protecting and contributing Nobuo Arai to the environment, not least in the form of securing ISO Manager, Mie Works 14001 certification in 1998. We make every effort to make a social contribution too, including engaging in voluntary clean-up activities and raising environmental awareness amongst our employees. It goes without saying that we have a duty to prevent pollution. We therefore rigorously control air and water Clean-up activities in the vicinity Drainage tanks of the works

Osaka Works Safety and peace of mind right from the front gate!

The only entrance to the Osaka Works accessible to pedes- we have therefore made some changes to the fencing in ques- trians and cyclists can use is the main gate. Generally referred tion so as to improve the view of the road. As a result, the West to as the West Gate, the main gate faces onto a road and a side- Gate has been transformed and now benefits from full visibil- walk. ity in both directions. As a number of major manufacturers and haulage compa- We will continue to strengthen the Osaka Works’ reputation nies have moved into the nearby area recently, the number of for safety and peace of mind, maintaining the utmost respect drivers, pedestrians and cyclists passing in front of the West and consideration for all those who pass our front gate and live Gate has increased. The fact that both our employee and visi- in the local area. Tatsuo Yoshisue tor car parks are located inside the main gate means that there Manager, Osaka Works is always a large volume of traffic coming and going through the West Gate. Moreover, drivers’ view has always been par- tially obstructed by fencing when they exit onto the road, forc- ing them to cut across in front of the West Gate and making it difficult to see approaching cyclists and pedestrians. Eager to take preemptive action to ensure that there are no accidents, Before After

Yokohama Works Promoting activities that enable us to contribute to society

In our sixth year since obtaining ISO 14001 certifica- reducing paper consumption on a priority basis at our tion, this year the Yokohama Works underwent its sec- head office and other administrative divisions. ond renewal inspection. Our other social contribution activities include the We continue to promote activities in line with the recycling of plastic bottle individual characteristics of the various components tops, which we started last that make up the Yokohama Works, namely our research year as part of a campaign center, affiliated companies and head office. to send vaccines to chil- In terms of our research operations, we strive to dren around the world. Hisaharu Yanagawa develop new products capable of reducing envi- Manager, Yokohama Works ronmental impact and have a hand in new products through indirect support to help minimize risks during the research and development process (harmful chemi- cals, nanomaterials, etc.), increase yield, save energy and reduce waste. In addition to directly saving energy and reducing waste, we are also continuing to work on Plastic bottle cap recycling activi- ties

23 Environmental Performance Furukawa Electric Group Basic Environmental Policy

Basic Philosophy Furukawa Electric Group recognizes that the preservation of the global environment is a critical issue for society and takes the environment into consideration in every aspect of its corporate activities to help create a sustainable, happy and prosperous society.

Action Guidelines ● We shall maintain a constant awareness of the impact of our corporate activities on the environment, with each and every employee involved in environmental preservation activities.

● In addition to complying with environmental laws and regulations and with requirements from our customers and other sources, we shall also set out voluntary standards to establish greater levels of control.

● We shall set out environmental targets and objectives and systematically carry out activities accordingly to continu- ously improve our efforts to protect the environment.

● Environmental concerns shall be taken into consideration at every phase of our work, from the R&D and design stages onwards, to supply environmentally friendly products.

● We shall strive to reduce consumption of resources and energy, to promote recycling, to reduce waste and to minimize environmental impact at every stage of our activities, from procurement and manufacturing to distribution and cus- tomer service.

● We shall conduct environmental audits and review our environmental management system and environmental pres- ervation activities to make continuous improvements.

● We shall raise employee awareness through environmental education.

● We shall promote the disclosure of information and communication with the public and play an active part in commu- nity activities.

24 Environmental Performance Environmental Management Targets and Performance

Having devised a set of targets for the four year period from fiscal 2006 to fiscal 2009 in the form of the 2009 Medium-Term Plan for Environmental Preservation Activities, Furukawa Electric continues to pro- mote environmental activities accordingly. We also set out annual Priority Environmental Preservation Activity Targets, based on which we map out objectives, targets and action plans as part of the environ- mental management systems at each of our bases. On a Group basis, we formulate common activity tar- gets as part of consolidated environmental management, with each individual company setting their own annual targets and carrying out activities accordingly.

Furukawa Electric Annual Targets and Performance for Fiscal 2007

Priority Environmental Preservation Activity Performance Priority Environmental Preservation Activity Targets for Fiscal Activities Targets for Fiscal 2007 in Fiscal 2007 Rating 2008 Waste reduction 30% reduction in the volume of outsourced 60% reduction in the volume of outsourced waste disposal activities waste disposal compared with fiscal 2004 level 52% reduction ◎ compared with fiscal 2004 level 30% reduction in direct landfill disposal 64% reduction in direct landfill disposal compared with fiscal Zero emission activities compared with fiscal 2004 level 46% reduction ◎ 2004 level 23% reduction in greenhouse gas emissions 24% reduction in greenhouse gas emissions compared with compared with fiscal 2000 level 13% reduction △ fiscal 2000 level Activities to prevent global warming 1% reduction in specific energy consumption 2% reduction in specific energy consumption for transportation for transportation compared with fiscal 2006 1.5% reduction ○ compared with fiscal 2006 level level Chemical substance 18% reduction in emissions of volatile organic 24% reduction in emissions of volatile organic compounds management activities compounds compared with fiscal 2004 level 19% reduction ○ compared with fiscal 2004 level 100% procurement rate for general purpose green products 99% △ 100% procurement rate for general purpose green products Green activities Establishment of the FGMS* at major supply System 100% establishment of the FGMS* at major supply chain chain operators established ○ operators Increase sales percentage of environmentally 1) 100% achievement of sales targets for environmentally friendly new products friendly products amongst new products to 68% Eco-design activities 100% △ 2) Compiling product environmental performance index Examining environmental performance indices guidelines Evaluation ratings: ◎ Easily achieved; ○ Achieved; △ Almost achieved; × Unachieved *The FGMS is a mechanism designed to manage the content of regulated hazardous substances in Furukawa Electric products.

As our waste reduction and zero emission activities in fiscal 2007 proved highly effective having substantially exceeded targets, we have revised our medium-term targets for 2009 and reflected revised figures in our annual targets for fiscal 2008.

Furukawa Electric Consolidated Environmental Management Medium-Term Targets

Furukawa Electric 2009 Medium-Term Plan for 2009 Consolidated Environmental Management Activities Environmental Preservation Activities Common Activity Targets Waste reduction 75% reduction* in the volume of outsourced waste disposal 50% reduction in the volume of outsourced waste disposal compared with activities compared with fiscal 2004 level fiscal 2004 level

Zero emission activities 80% reduction* in direct landfill disposal compared with fiscal 2004 level 50% reduction in direct landfill disposal compared with fiscal 2004 level Activities to prevent 25% reduction in greenhouse gas emissions compared with global warming fiscal 2000 level 10% reduction in greenhouse gas emissions compared with fiscal 2000 level 30% reduction in emissions of volatile organic compounds compared with Chemical substance 30% reduction in emissions of volatile organic compounds fiscal 2004 level management activities compared with fiscal 2004 level Eliminating the use of chlorinated organic compounds by fiscal 2008 Expansion of the range of products subject to green procurement (general purpose items) and introduction into 100% procurement rate for items subject to green procurement (general Furukawa Electric Group purpose items) Green activities Promotion and improvement of green product management Promotion and improvement of green product management ○ Establishment of the FGMS at supply chain operators ○ Establishment of the FGMS at supply chain operators by the end of 2007 by the end of 2007 for full-scale operation by the end of for full-scale operation by the end of 2008 2008 Promotion of improved environmental performance of products Promotion of improved environmental performance of products Eco-design activities ○ Increased percentage of environmentally friendly ○ Increase sales percentage of environmentally friendly products amongst products amongst new products new products to 100% ○ Introduction of environmental performance indices * Revised April 1, 2008 (previously 50%)

25 26 Environmental Management System

Environmental Management Promotion Organization

We at Furukawa Electric promote environmental preservation activi- Company-wide Environmental Management Organization Chart ties on a companywide basis via our Central Committee for Environmental Central Committee for Committee for Company-wide Management, which is chaired by the Environmental Management Promotion of Energy Conservation Chief Social Responsibility Officer (CSRO). Committee for Development of We also promote Group environmen- Environmentally-Friendly Products tal activities in conjunction with our affiliated companies via the Liaison Safety and Environment Promotion Department, CSR Division Meeting for Consolidated Environmental Management. All of Furukawa Electric’s Environmental Personnel Meeting business bases and consolidated environ- mental companies have been granted ISO Environment Committee Divisional Environment Transport Energy Reduction Committee 14001 certification. of Works Committee

Committee for Green Product Management Expert Committees Energy Conservation Committee, Waste Committee, Liaison Meeting for Consolidated Environmental Management ( Chemical Substance Committee, etc. )

Committee for Consolidated Environmental and Green Product Management

Environmental Education

The Furukawa Electric Group runs a mental Auditor Training Seminars led by we also brought in outside instructors variety of educational initiatives designed company instructors, with participants from the Mizuho Information & Research to raise levels of environmental aware- including members of staff from affili- Institute Inc. A total of 39 Furukawa ness amongst our employees. ated companies. This year, we trained a Electric employees and 31 affiliated com- total of 61 internal auditors through such pany employees were trained as FGMS ISO 14001 Related Education seminars. We also organized two internal auditors. We organized Four Internal Environ- auditor refresher seminars aimed at our affiliated companies. Environment-Related Education As we are working towards the intro- FGMS Auditor Training Seminar duction of a set of product environmental In an effort to reinforce knowledge performance indices as part of our eco- and understanding of business-related design activities, we organized a one-day environmental risks, we organized our seminar for group promotion staff, with second FGMS Auditor Training Seminar, outside instructors focusing on every- focusing on controlling the chemical con- thing from LCA basics through to the tent of our core products as conducted in application process and case studies. fiscal 2006. In addition to in-house staff, Internal Environmental Auditor Training Seminar

25 26 Environmental Performance Environmental Risk Management

Soil and Groundwater Pollution Countermeasures

In recognition of the fact that soil and ities and release relevant information to local specific harmful substances used at our works groundwater pollution is an important issue residents, related organizations, the media and and affiliated companies and conducted risk for the health and safety of local residents any other concerned parties as necessary. assessments to evaluate the risk of soil and and employees, the Furukawa Electric Group In an effort to prevent any negative impact groundwater pollution at our works, we pro- actively engages in related risk management on the local environment as a result of soil or ceeded to voluntarily carry out studies into the activities. groundwater pollution, we implement a range status of soil pollution in high-risk areas. During In addition to taking action promptly as soon of pollution risk avoidance initiatives on an fiscal 2007, we extended these same activities as investigations detect soil or groundwater ongoing basis, including conducting regular to affiliated companies. pollution, we make every effort to secure the inspections to check for leakages of specific We are also carrying out remedial work to health and safety of all residents living in the harmful substances, taking steps to prevent get the site of Kyowa Electric Wire’s former local area. We automatically report the status leakages and promoting the use of alternative Osaka Plant removed from the list of desig- of any pollution and details of measures to pre- substances. nated areas under the Soil Contamination vent the spread of pollution to the local author- Having completed a review of records of Countermeasures Law.

PCB Management

The quantity of instruments containing in Kitakyushu-city, we have already com- Plant of Japan Environmental Safety PCB is monitored at each of our works so pleted their processing at the Kitakyushu Corporation. that storage and management operations can be carried out appropriately. In line Quantity of PCB Stored with the start of processing operations Works In storage In use Total (Already processed) 88 0 88 by the likes of the Japan Environmental Chiba Works (Unprocessed) 11 0 11 Safety Corporation, we intend to continue Nikko Works 324 30 354 to commission processing on an ongoing Hiratsuka Works 47 11 58 basis. As for the PCB-containing instru- Mie Works 126 0 126 Osaka Works 66 0 66 ments having been stored at our affili- Yokohama Works 9 0 9 ated company with its production base Total 671 41 712

Compliance with Environmental Response to Asbestos Issue Laws and Regulations and Other Compliance Requirements Use of Asbestos in Products of dispersal have confirmed that the Although we do not currently manu- asbestos is stable, we decided to remove We check environmental laws and facture or import products containing it anyway to safeguard against the risk of regulations and any other compliance asbestos, we have manufactured and sold dispersal in the future. Removal work was requirements on a regular basis and make such products for industrial use in the completed during fiscal 2006. every effort to ensure compliance, includ- past. Relevant products include electric ing patrolling our sites to confirm that wires for use on ships and fire prevention (2) Facilities and equipment measures are being properly implement- products for use in construction to install We have replaced all asbestos having ed. electric wires for telecommunication and possibilies of dispersal in cases whereby We monitor the latest information via electricity. Full details are featured on our viable alternatives are available. In cases the Official Gazette and other sources to website. where asbestos is embedded within insu- keep track of revisions to environmental lation and other such materials and there- laws and regulations and ensure that we Use of Asbestos in Buildings and Plant fore not dispersed, we plan to replace have taken all possible measures. Facilities them with alternative materials that do (1) Buildings not contain asbestos at a later date, to We discovered asbestos spray materials coincide with scheduled inspections. in company-owned buildings and plants. Although investigations into the extent

27 28 Business Activities and their Environmental Impact

In the process of providing Furukawa Electric products, we purchase a variety of components and raw materials, consume water, electric power and other forms of energy and use chemical substances. We con- tinue to work on reducing the adverse impact that these activities have on the environment.

Environmental Impact of our Six Production Base Works OUTPUT

Atmospheric emissions ...... CO2 237,000 t-CO2 INPUT NOx ...... 161 t

SOx ...... 19 t Raw materials Soot ...... 10 t Copper 189,000 t

Wastewater ...... 18.51 million t Energy (*1) 139,000 KL

Waste Water 22.9 million t Industrial waste (*3) 1,839 t

Recycled materials ...... 18,023 t Chemical substances (*2) 1,369 t

Chemical substances (*2) (*1) Amount of electric power, fuel oil and fuel gas consumed (*2) PRTR targeted substances Volume emitted ...... 167 t (*3) Outsourced waste disposal, excluding recycled materials Volume transferred ...... 135 t

Environmental Impact of our Non-production Bases

We have identified the environmental impact of activities at our non-production bases, namely Furukawa Electric’s Head Office and three Branch Offices. Amount of electric 1,022 MWh We promote power and resource sav- ...... ing measures at our Head Office and power consumed (387 t-CO2) Branch Offices, the company’s non- production bases. Examples of such power saving Amount of water used ...... 1,330 t measures include turning off lighting in conference rooms not in use and adjust- Amount of paper used ing air conditioning to appropriate tem- peratures. In terms of resource saving Photocopier paper ...... 27.6 t measures, we promote activities such as sorting waste and reusing resources such Newspaper ...... 2.7 t as photocopier paper and files. Cardboard ...... 0.2 t

Volume of waste ...... 18.0 t

27 28 Environmental Performance Environmental Accounting

In an effort to quantitatively assess our lished by the Ministry of the Environment. economic benefits rose by 260 million yen, environmental costs and benefits, we have Data on affiliated companies was collected due in part to increased energy costs. compiled tables outlining our “environmen- for a total of 19 companies. Environmental conservation costs for tal conservation cost,” “economic benefit Furukawa Electric's environmental con- our affiliated companies came to 4.1 bil- associated with environmental conserva- servation costs for fiscal 2007 came to 3.8 lion yen in expenses and 4.2 billion yen in tion activities” and the “environmental billion yen in expenses and 500 million yen investment. Overall economic benefits rose conservation benefit (material benefit).” All in investment. by approximately 660 million yen due to data has been compiled in accordance with Expenses fell by 1.3 billion yen compared increased energy and water costs. environmental accounting guidelines pub- to the previous year (fiscal 2006). Overall

Environmental Conservation Costs Unit: million yen Furukawa Electric Affiliated Category Key activity and the outcome companies Total costs Year-on-year Total costs Pollution prevention (air pollution, etc.), energy conservation, waste (1) Business area cost disposal, etc. 1,127 -387 2,556 (2) Upstream/downstream cost Recovery of packaging, drums, etc. 567 -101 274 Environmental management system auditing, environmental impact (3) Administration cost monitoring, etc. 472 44 212 Development of environmentally friendly products, research into (4) Research and development cost alternatives for harmful substances 1,091 -93 816 (5) Social activity cost Tree planting, local community cleaning activities, donations, etc. 3 -1 4 (6) Environmental remediation cost Environmental impact assessments, cleanup of polluted soil, etc. 514 -746 195 Total 3,773 -1,285 4,057 Year-on-year figures have not been calculated for affiliated companies due to differences in the companies covered compared to last year.

Environmental Conservation Benefit Economic Benefit Associated with Environmental Conservation Activities Unit: million yen Furukawa Affiliated Furukawa Affiliated Emissions causing Electric companies Electric companies environmental impact Unit Details of benefits Reduction Reduction Total benefit Total benefit Volume of industrial waste disposal Revenue from recycling 496 912 processed※ t -287 593 Reduction in waste disposal costs -40 142 Energy consumption (crude oil equivalent) 1,000 kl -6,988 -12 Reduction in energy costs -712 -1,183 Reduction in water purchase costs -3 -535 Water consumption 1,000 t -4,765 -234 Total -260 -663 Emissions of volatile organic chemical compounds t 0 -3 *Minus figures indicate an increase

CO2 emissions 1,000 t - CO2 -9,000 12 Investment and Research Costs Unit: million yen Furukawa Affiliated SOx emissions t 1 342 Investment and research costs Electric companies Total costs Total costs NOx emissions t -24 45 Environment-related investment 546 4,157

Soot emissions t 2 15 Total investment 12,909 24,077 Total research costs 10,682 5,855 *Minus figures indicate an increase ※Excluding recycled waste Environmental Conservation Costs Economic Benefit

(100 million yen) (100 million yen) 60 12 11.0 Revenue from recycling Reduction in water purchase costs 53.0 Environmental remediation cost 10 49.5 51.3 50.6 Reduction in waste disposal costs Total revenue and expenditure 50 Social activity cost 8 43.6 Reduction in energy costs Research and development cost 6 40 36.8 37.7 Administration cost 4.1 4 4.0 2.6 3.2 Upstream/downstream cost 30 2 Business area cost 0.4 0 2001 2002 2003 2004 2005 2006 2007(Fiscal 20 -3 year) -2.6 10 -8 0 -13 2001 2002 2003 2004 2005 2006 2007 (Fiscal year)

29 30 Producing Environmentally Friendly Products

In order to produce environmentally friendly products, we at Furukawa Electric undertake measures such as purchasing items via green procurement, green product management and environmentally friendly product development.

Green Product Activities Green Product Management Activities

In an effort to reinforce the overall continue to step up activities in the future companies with an eye to commencing management structure of the Furukawa in order to secure our customers’ trust. As preliminary REACH registration. We will also Electric Group, in fiscal 2007 we set up the part of our automotive parts operations, we be requiring our suppliers to undertake pre- Committee for Consolidated Environmental are extending the establishment of envi- liminary registration in relation to a number and Green Product Management, incor- ronmentally hazardous substance manage- of products. porating affiliated companies. The com- ment systems to overseas affiliated compa- We joined the Japan Article Management mittee will meet every six months, in April nies and intend to oversee operations via Promotion (JAMP*) Consortium meanwhile and October, and will share information voluntary inspections and audits, as is the at the end of 2006 and have started to use and implement groupwide activities. In case with our domestic suppliers. the mechanisms and tools provided. response to customer audits, we have car- On other fronts, we have carried out ried out voluntary inspections by affiliated studies into compliance with European Group companies and audits by Furukawa Registration, Evaluation and Authorization Electric and have expanded such activi- of Chemicals (REACH*) regulations in each ties to our major suppliers as well. We will of our divisions and at each of our Group

Green Product Initiatives at our Telecommunications Company

With its wide range of products, under the RoHS Directive, JGPSSI sub- to be reduced including optical fibers, optical and com- stances, other chemical substances by half com- munication cables, optical connectors, contained in our products in relation to pared to con- wiring for electric and electronic equip- optional lists of substances designated ventional solid- ment, optical components, optical fiber by customers, we are continuing to state lasers. amplifiers, laser modules, optical system work on mechanisms to retrieve data A-AWG products, network equipment and fusion faster and with a greater degree of We have devel- splicers, our telecommunications com- accuracy. oped commercial athermal AWG (arrayed pany ships products to destinations the 3 Having installed x-ray fluorescence waveguide world over. spectrometers, we are using them to grating) that We are working towards the establish- carry out regular analysis of externally makes it possi- ment of a management structure for purchased items and analysis in line ble to run AWG chemical substances contained in our with the level of importance of the wavelength products based on the following perspec- supplier or producing country and to multiplexer/demultiplexers without tives, especially in the field of photonics further reduce risks through measures the need for temperature control or a and network technology, which includes such as reinforcing cooperation along power supply. optical components, optical fiber amplifi- the supply chain. 2 Resource-saving products ers, network equipment and fusion splic- Fusion splicers ers. We are also working on the develop- We have developed the S122 series 1 We have established a set of green ment and launch of the following new of commercial ultra-compact fusion product management regulations in products in an effort to help protect the splicers that each of our divisions. In addition to environment in the field of photonics and enable a sub- the management of substances on a network technology. stantial saving design value or single material basis, 1 Reduced energy consumption products in resources we are also pushing ahead with activi- Fiber lasers by reducing ties geared towards the management We have developed commercial fiber the amount of of product-related substances at the lasers as a replacement for solid-state raw materials processing stages. (YAG) lasers for uses such as metal needed for conventional models by 2 Based on future REACH regulations processing and analysis. Fiber lasers 75% in volume and 70% in weight. and in response to customer inquir- offer excellent energy conversion effi- ies regarding the six substances listed ciency and enable energy consumption

29 30 Environmental Performance Producing Environmentally Friendly Products

Eco-Design Activities Environmentally Friendly Products

At Furukawa Electric, we use the term to usage and disposal and that have a centage, namely the percentage of total “environmentally friendly products” to minimal impact on the environment. We sales of new product accounted for by refer to products that are harmless at even have our own unique environmental environmentally friendly products, came every stage of the process from purchas- labeling system for such products. Our to 68% in fiscal 2007. ing, production and distribution through environmentally friendly product per-

Environmentally Friendly Product Development

April 1, 2008 marked the beginning of the In order to strengthen our framework for mentally friendly products based on commitment period under the Kyoto Protocol. the development of environmentally friendly LCA If we are going to put an end to global warm- products, we have restructured the activities ● Clearly setting out criteria for Eco-Link ing, we need to take action right away to limit of our in-house Committee for Development accreditation and reduce greenhouse gas emissions. of Environmentally-Friendly Products on a ● Ensuring that customers can choose our Although Furukawa Electric has long since groupwide basis by extending membership environmentally friendly products with been developing environmentally friendly from R&D and business divisions at Furukawa confidence products, we intend to make reducing green- Electric to also include affiliated companies. We will continue to promote the develop- house gas emissions our top priority across the The committee’s activities will revolve ment of environmentally friendly products board from now on, covering every stage of primarily around the following goals. throughout the Furukawa Electric Group in the the process from purchasing, production and ● Establishing quantitative environmen- future, based around the committee’s activi- distribution through to usage and disposal. tal performance indices for environ- ties.

Views from development staff YBCO (yttrium-based) superconducting wire YBCO superconducting wire is formed as a film by synthe- Working towards the practical application of optimum power sizing a layer of crystalline superconducting oxide materi- cables for the future of the planet al several microns thick from chemicals including yttrium, barium and copper on a tape-shaped metallic substrate with an interlayer formed via the IBAD (ion beam assisted Masashi Yagi deposition) method. It offers the most outstanding Eco-Products Department, Ecology & Energy Laboratory performance as a superconducting wire, with proper- R&D Division ties including a current density 10-100 times higher than Thanks to the absence of resistance and their high current density, superconductors are conventional bismuth system superconducting wire, no an exceptionally effective form of technology when it comes to saving energy and high- degradation in Multilayer YBCO superconducting wire efficiency energy conversion. As superconducting wire made from thin films such as the YBCO performance in (conductor): Low loss and a magnetic field, high capacity system retains its superconductivity even in a strong magnetic field, there are high hopes for minimal AC loss Electrical insulation layer applications in a range of electrical equipment. Through the continued development of YBCO YBCO superconducting and compatibil- wire (shield): ity with liquid Zero magnetic field leakage superconducting wire-based power cables with unrivalled potential for application in electrical = no inductive interference nitrogen. equipment, our group has managed to achieve outstanding levels of performance (low loss). Liquid nitrogen Merely improving performance however is not enough to enable cables to be installed in High-temperature superconducting cable infrastructure equipment, which requires high levels of reliability. Challenges such as fault- The structure of high-temperature superconducting cables resistance and long-term reliability all need to be tackled one at a time. We have recently made consists of several high-temperature superconducting wires a 10m superconducting cable and an intermediate connector and confirmed exceptionally low coiled in a spiral around a core referred to as the “former”. On top of this is an electrical insulation layer, a supercon- levels of loss (loss of 1W or less at 1000A, 10m AC transmission). Furthermore, tests using a fault ducting shield layer 10m YBCO high- current more than 30 times in excess of this capacity showed no deterioration, confirming suf- temperature and a protective layer superconducting ficient performance in terms of fault-resistance. formed around the cable Although it will still take a little time before we reach the practical application stage, we are core of the cable, which is then encased Intermediate making every effort to increase reliability, reduce costs and maximize benefits in an effort to connector inside heat-insulated minimal contact combat global warming. resistance of tubing. 5.2nΩ

31 32 THERMO-IN BIRUMEITO Tube outdoor refrigerant sheath piping (patent pending) launched

Furukawa Electric completed develop- reduce material costs by 10-20%. It is a foam in the heat insulation layer ment and launched its new THERMO- brand new product unique to Furukawa Pollution-free: IN BIRUMEITO Tube outdoor refrigerant Electric, combining our technical capa- Environmentally friendly piping thanks sheath piping (patent pending) for use in bilities in the fields of copper piping and to the use of non-halogen material in building multi-air conditioning systems in resin. both the surface and heat insulation lay- April 2007. This is an industry-first prod- ers uct in that it uses high expansion foam Benefits: Size: integrated molding technology to enable Weather resistance: Available in the same sizes as conven- outstanding weather resistance and high- Offers outstanding weather resistance tional products, with outer diameters of strength coating, thereby rendering ducts thanks to the use of a special polyolefin 6.35-44.45mm and other protective covers unnecessary. resin composite on the surface layer By increasing the expansion ratio from Strength: the usual ×5 to ×13, we have managed to The surface layer is strong enough to produce a coating that is both weather withstand bird damage and dragging resistant and strong. As this product during pipe installation eliminates the need to use ducts or other Heat resistance: types of protective covers, it makes it Offers excellent heat-resistant perform- THERMO-IN BIRUMEITO Tube® Example of outdoor piping possible to halve installation times and ance thanks to the use of polypropylene

Environmentally friendly foam fire extinguishing agents

The Japanese have always tended to In addition to reducing the surface ten- water. What is more, whereas the main use nothing but water to put out build- sion of water for firefighting to enable it constituent of existing foam-based extin- ing fires. Changes in firefighting tactics to better penetrate wood and other com- guishing agents is synthetic surfactant, in recent years however have prompted bustible materials, the product also has this product uses soap-based surfactant efficiency drives and efforts to extinguish a cooling and suffocating effect as the that has a quicker rate of decomposition. fires using less water and in a shorter foam sticks to materials. In an experiment Tests on the envisioned impact on aquat- space of time. Furukawa Electric and conducted by the Kitakyushu City Fire ic life if it were to be washed into a river Furukawa Techno Material for instance Department, the foam-based agent was in particular found that levels of toxicity have been investigating firefighting able to extinguish a fire in the equivalent were massively reduced (Figure 1). tactics combining foam fire extinguish- of a housing complex with a floor area This product and the accompanying ing agents with surfactant agents in of 27m2 using less than half the volume firefighting tactics are already being conjunction with Kitakyushu City Fire of water and in less than half the time fully deployed in Kitakyushu-city and are Department and have developed an that it took using water alone. This would starting to be brought into use in other environmentally friendly foam extin- not only reduce fire damage and save areas as well. It is hoped that it will also be guishing agent as part of a joint indus- firefighters effort, but it would also make usable on forest fires, which pose major

try, academic and government venture it possible to minimize water damage to problems in terms of generating CO2, as with the University of Kitakyushu and lower floors and protect the environment well as building fires in the future. Shabondama Soap. from noxious fumes and contaminated

Using foam Figure 1: Toxicity in fish (subject species: Oryzias latipes) Using water extinguishing High toxicity agent 0 500 Combustible Combustible material material 1000 e r 1 2 h o u s ) t Foam sticks to and penetrates 1500 Water runs off into the material 2000 Our product v i n g a f Commercially available agent A 2500 Commercially available agent B 3000 Commercially available agent C 3500 Commercially available agent D 4000 Ultrapure water Tap water Brackish water T L m 1 2 v a l u e ( / s r 4500 Low toxicity Hardness: zero ←Usage→ Release into natural environment

31 32 Environmental Performance

Recyclable optical fiber cable joint boxes (developed jointly with Tokyo Electric Power Company)

With the development of the Aerial cal fiber cables (sheathing material, slot general recycled materials, enabling a Optical Eco Closure (“Eco Closure”) junc- material) saving of roughly 7.8 tons of plastic each tion box for connecting and splitting opti- Compound of general recycled materials year cal fiber optic cables, we have managed ●Stable operation of core fibers to both reduce environmental impact and Storage tray structure, mechanism and cut costs by improving workability. wiring designed to minimize impact on transmission properties of core fiber Eco Closure (artists impression)

Benefits: Messenger wire ●Minimizes consumption of resources Expected results for supporting joint box (optimized structure) ●Minimizes consumption of resources Adjustable structure that can expand (or and reduces waste Optical fiber cable contract) to suit the size of the connec- No need to replace 1,200 joint boxes Sleeve Main cable (outer casing) tion capacity each year, making for a reduction in Tray (contains connected/ ●Reduces waste (reusable structure) waste of approximately 3.4 tons Branch branched core fibers) cable Structure can be expanded (or contract- ●Makes effective use of resources End plate ed) simply by adding or removing parts Makes effective use of composite con- ●Makes effective use of resources (recy- taining approximately 15-20% selected clable structure) waste materials (sheathing from Compound of off-cuts from slotted opti- removed optical fiber cables, etc.) and

Green Procurement Office Supplies and Other General Purpose Items

We promote the green procurement we achieved a green purchasing rate of of office supplies and other general pur- approximately 99% for applicable items Examples of Environmental Labels Used pose items. This chiefly involves certifying as of the end of 2007 (products no longer green products as eco-items and register- classed as green items due to issues with ing them in a catalog on our purchasing recycled paper part way through the year system. In the case of certain general pur- excluded from total). We are working pose items in particular, we exclusively towards green procurement for all office Eco Mark Program Green Mark purchase eco-items registered in our cat- supplies and also intend to expand similar alog. We have continued to step up green activities to include affiliated companies. procurement however by increasing the number of eligible items. As a result,

Green Purchasing Energy-Saving Network Labeling Program Products and Manufacturing Process Components We have added a mechanism to our tion in this manner enables us to assess purchasing system to enable each of our the current situation and share informa- suppliers to provide the latest informa- tion. We will continue to ask our suppliers tion with regard to the status of their to provide this information in an effort to

environmental management activities monitor status on an ongoing basis. International Energy (including ISO 14000) and systems for Star Program controlling the chemical content of the materials they supply. Getting individual suppliers to provide the latest informa-

33 34 Efforts to Prevent Global Warming

The majority of the Furukawa Electric ing initiatives and we have continued lent reduction of 14% and our affiliated Group’s greenhouse gas emissions to implement measures in our offices companies a reduction of 8% (both

consist of CO2 generated from electric- as well, including turning off unnec- compared to fiscal 2000 levels). ity, fuel and other energy sources. As essary lighting and setting air condi- emissions from manufacturing proc- tioning to the optimum temperature. Greenhouse Gas Emissions 2000-2007 esses in particular account for a large Nonetheless, as the first commitment (104 Tons CO ) proportion, we continue to work on period under the Kyoto Protocol began 2 120 Furukawa Furukawa-Sky Other affiliated reducing emissions through energy in April 2008, we intend to step up our Electric companies saving measures such as increasing activities even further in the future, 100 20.4 22.0 22.8 19.4 23.0 24.3 23.5 20.9 the efficiency of production proc- including participating in Team Minus 80 esses, switching fuels, replacing equip- 6%. 60 ment with more efficient alternatives, Total greenhouse gas emissions for 57.4 54.0 56.2 56.6 54.6 52.0 51.9 50.8 meticulously turning off lights when the Group as a whole came to 950,000 40

not in use and insulating hot areas. Our tons of CO2 in fiscal 2007, a reduction 20 efforts to prevent global warming have of 9% compared to levels in fiscal 2000. 27.3 25.4 23.3 22.9 22.4 21.3 22.8 23.6 0 always been linked to our energy sav- Furukawa Electric achieved an equiva- 2000 2001 2002 2003 2004 2005 2006 2007 (Fiscal year)

Participating in Team Minus 6%

Furukawa Electric signed up to Team ties, as part of which we are actively aim-

Minus 6% in April 2008, underlining our ing to reduce CO2 on an individual basis, at commitment to actively push ahead home as well as at work. We have distrib-

with CO2 reduction initiatives at our head uted leaflets to all of our employees in an office, branches and other offices in effort to raise awareness regarding global addition to our current activities, which warming and are making steady progress

are focused primarily on our works and in terms of reducing our CO2 emissions. plants. Going one step further, we have http://www.team-6.jp/english/about.html/ also launched a series of Eco Home activi- An Eco Home leaflet

Switching Fuel Energy-Saving Tours

Following on from our Hiratsuka Works, In conjunction with , in December we are now in the process of switching 2007 we organized an energy saving tour of fuels from LPG gas to city gas at our Chiba the plants at our Hiratsuka Works with the aim Works as well. We will have melting fur- of compiling an energy-saving diagnosis. The naces fully up and running from May 2008 numerous proposals put forward as a result were and expect to achieve an annual reduc- screened for cost effectiveness by our Energy

tion in CO2 of 2,300 tons. Conservation Committee and the decision taken to introduce new measures in a total of seven areas, including steps to install inverters and pressure control devices on plant water pumps. Some of these measures have already been implemented, with the others to be implement- ed on an ongoing basis. We plan to conduct energy-saving tours on a regular basis from now on in an effort to enhance energy-saving activi- ties and raise awareness amongst employees,

especially with regard to cutting CO2 emissions. Installation of city gas pipes Energy-Saving Tour

33 34 Environmental Performance Efforts to Prevent Global Warming

Mini Energy Saving Exhibition Promote Eco Commuting

In March 2008 we organized a mini The second and fourth Wednesdays of energy saving exhibition at our Chiba June were set aside as eco commuting Works in conjunction with energy sav- promotion days at our Mie Works. As part ing device manufacturers. Despite being of this initiative, employees who normally the first time that we have attempted commute by car were encouraged to anything like this, the event turned out to either (1) travel to work by minibus or (2) be a great success thanks to participation come to work on foot or by bicycle. Over from large numbers of affiliated com- the course of June, which was environ- panies and each of Furukawa Electric’s mental month, 45 employees opted for (1) works. and 89 for (2), resulting in a reduction of

approximately 170kg in CO2 emissions. Eco commuting

Installation of Wind and Solar Powered Street Lighting

We have installed wind and solar powered street lighting alongside the main entrance to our Mie Works. In addi- tion to providing light and electricity for the works’ gatehouse, this will also help The mini energy saving exhibition symbolize the works’ environmentally friendly credentials.

Wind and solar powered lighting

Logistics-Related Initiatives

At 148 million ton-kilometers, continue to promote modal shift, increase Furukawa Electric’s total transportation loading rates and promote joint deliver- volume for fiscal 2007 came in at more ies in an effort to reduce transportation or less the same level as fiscal 2006. energy consumption. Nevertheless, through measures such as an increase in modal shift, we managed Modal Shift and Specific Consumption to reduce CO2 emissions to 18,800 tons,

a reduction of 1.5% compared to the (%) (MJ/ton-kilometers) previous year. We also achieved a similar 9 1.90 Specific consumption 1.5% reduction in specific consumption 8 7 1.89 Rate of (denominator: ton-kilometers). The total modal shift 6 JR Freight containers 1.88 (en route from Nikko to Utsunomiya) transportation volume for the Furukawa 5 Electric Group as a whole came to 517 mil- 4 1.87 lion ton kilometers, an increase of 2.6% 3 compared to fiscal 2007. We intend to 2 1.86 work together with Furukawa Logistics to 1 0 1.85 2006 2007

35 36 Harnessing Hydroelectric Power

Furukawa Nikko Hydroelectric was Furukawa Co. Ltd. Power Generated by Furukawa Nikko Hydroelectric transferred from Furukawa Co. Ltd. In terms of performance, the company Power generated (MWh) and became an affiliated company supplied the Furukawa Electric Group 250,000 Tokyo Electric Furukawa Co. Ltd. Furukawa Electric Group in September 2003. Using the Kegon with approximately 176,000MWh of Power Waterfall, which flows from the natural power in fiscal 2007. If this were to cover 200,000 dam created by Chuzenji Lake, and sur- all of our purchased power, it would 150,000 rounding mountain streams as a water translate into a reduction in CO2 of around source, the company generates electricity 75,000 tons. Approximately 26% of the 100,000 via four greenhouse gas-free hydroelec- total power consumed by Furukawa 50,000 tric power facilities and supplies power Electric on a standalone basis is provided 0 to Furukawa Electric Group sites includ- by hydroelectric power from Furukawa 2003 2004 2005 2006 2007 (Fiscal year) ing our Nikko Works and Furukawa Sky’s Nikko Hydroelectric. Nikko Plant, Tokyo Electric Power and * Data for 2003 is the result after transfer (September 2003 – March 2004) Zero Emission Activities

The Furukawa Electric Group has 48% compared with fiscal 2004 to a standalone basis and our affiliated been involved in efforts to reduce lev- 2,395 tons. Furukawa Electric achieved companies a reduction of 48% (both els of outsourced waste disposal ever an equivalent reduction of 46% on compared with fiscal 2004 levels). since 1993. The overall level of out- Outsourced Waste Disposal Direct Landfill Disposal sourced waste disposal for the Group (Tons) (Tons) as a whole in fiscal 2007 fell by 30% 30000 8000 Other affiliated companies Other affiliated companies 7000 1442 compared with fiscal 2004 to 10,440 Furukawa-Sky Furukawa-Sky 25000 1639 tons. Furukawa Electric achieved an 9344 Furukawa Electric 6000 Furukawa Electric 20000 7592 1872 equivalent reduction of 52% on a 5000 3243 2543 15000 7959 4000 2002 standalone basis and our affiliated 8452 5551 1889 6840 5777 3000 2567 companies a reduction of 22% (both 10000 1657 5494 4934 5016 5274 1825 5220 5318 2000 compared with fiscal 2004 levels). The 3022 2974 2232 1504 1313 5000 9131 8274 3689 overall level of direct landfill disposal 5974 6018 3767 3282 1000 1812 1634 750 1288 811 3816 2119 0 1552 1839 0 504 176 177 271 for the Group as a whole also fell by 2000 2001 2002 2003 2004 2005 2006 2007 2000 2001 2002 2003 2004 2005 2006 2007 (Fiscal year) (Fiscal year)

Reducing Waste Disposal Costs Introduction of an Electronic Manifest

We at Furukawa Electric are also working Waste Disposal Costs As part of our efforts to introduce an towards targets for the reduction of waste (Million yen) electronic manifest at Furukawa Electric, 250 disposal costs. Spending on landfill and inter- 200 we commenced operations at our mediate disposal in fiscal 2001 totaled more 150 249 249 Hiratsuka and Mie Works in April 2008. 100 Income than 300 million yen. In addition to reducing 50 43 The system is also in place at our Chiba levels of waste through initiatives such as 0 Works and is on the verge of commencing -50 -75 promoting reuse and eliminating waste along -100 Expen- -187 operations there too. The rate of usage of diture -252 -238 our production lines, we have continued to -150 -353 the electronic manifest as of April 2008 -200 implement measures such as carefully sorting -250 stood at 45% (total manifest transactions: -300 waste to generate value since then, making it -350 349, electronic manifest transactions: 158). possible to sell our waste products for profit. -400 We intend to focus on expanding usage at 2000 2001 2002 2003 2004 2005 2006 2007 In addition to the effects of activities such as (Fiscal year) all of our works in the future. these, soaring copper prices also helped us to achieve a profit of approximately 250 million, around the same level as fiscal 2007.

35 36 Environmental Performance Chemical Substance Management

The Furukawa Electric Group pro- one of the causes of photochemical Emissions of Volatile Organic Compounds motes efforts to reduce the use of smog. Furukawa Electric’s emissions (Tons) 400 harmful chemical substances. In par- have fallen 19% compared with levels * Furukawa Electric only 327 ticular, we make every effort to actively in fiscal 2004, with organic chlorine 310 reduce emissions of volatile organic compounds now only used by five of 253 252 compounds, which are regarded as our affiliated companies. 200

0 2004 2005 2006 2007 (Fiscal year)

Appropriate Management of Chemical Substances

We check the properties of and laws Volume of PRTR Substances Released and Transferred (Unit: Ton) and regulations applicable to all chemi- Substance Name of substance Volume Volume Volume Volume cal substances that we use as part of the No. handled released transferred neutralized manufacturing process against Material 25 Antimony and its compounds 76.2 0.1 5.6 0.0 Safety Data Sheets (MSDS) and manage 40 Ethylbenzene 7.1 0.0 0.0 7.0 63 Xylene 21.5 8.5 1.8 11.1 substances accordingly. We also monitor 64 Silver and its water-soluble compounds 3.0 0.0 0.0 0.0 the volumes of each substance used and 67 Cresol 292.6 0.5 0.1 291.5 report the relevant details in accordance 108 Inorganic cyanide compounds 6.7 0.0 0.0 0.0 with the PRTR Law*. 172 N, N-dimethylformamide 74.0 0.0 0.0 73.3 * Law Concerning Reporting, etc. of Releases to the 197 Decabromodiphenyl ether 227.2 0.0 16.4 0.0 Environment of Specific Chemical Substances and 207 Copper salts (water-soluble) 13.7 0.0 0.0 0.0 Promoting Improvements in Their Management 227 Toluene 395.1 157.3 107.5 116.5 230 Lead and its compounds 2.0 0.0 0.0 0.0 231 Nickel 27.8 0.0 0.0 0.0 232 Nickel compounds 7.2 0.0 0.0 0.0 253 Hydrazine 8.8 0.0 0.0 8.8 266 Phenol 201.0 0.0 0.1 200.5 272 Bis (2-ethylhexyl) phthalate 1.8 0.3 0.1 0.0 283 Hydrogen fluoride and its water-soluble salts 3.7 0.0 3.0 0.0 1369.4 166.8 134.7 * Applicable to substances that are handled in volumes of one ton or more at works (or 0.5 tons or more in the case of specific first category chemical substances)

Reducing Emissions of Volatile Organic Compounds

Although Furukawa Electric does not handle are toluene and isopropyl alcohol per wire when it comes out of the melting currently own any facilities that fall under (IPA). We are working on reducing the furnaces, through measures to prevent regulations set out in accordance with the volume of toluene that we use, mainly to leaks and dispersal. We are examining Air Pollution Control Law, we are none- degrease copper strips, by switching to the possibility of installing IPA recovery theless voluntarily working to reduce a hydrocarbon-based detergent instead. apparatus in an effort to achieve further emissions of volatile organic compounds We are also looking to lowering consump- reductions. (VOC). The main types of VOC that we tion of IPA, which is used to reduce cop-

37 38 Environmental Preservation Data

● Chiba Works

Atmospheric Indicators Wastewater Quality Indicators Legal Self-imposed Legal Self-imposed Item Unit Facilities standard standard Average Maximum Item Unit standard standard Average Maximum NOx (ppm) Melting furnace 180 180 16 22 pH 5.0 to 9.0 5.5 to 8.5 8.1 8.4 Soot (g/Nm3) Melting furnace 0.1 0.1 0.011 0.011 COD (mg/l) 15 10 3.2 10.2 SS (mg/l) 20 10 2.9 6.5 n-h (mineral oil) (mg/l) 2 1 0.2 0.3

● Nikko Works

Atmospheric Indicators Wastewater Quality Indicators Legal Self-imposed Legal Self-imposed Item Unit Facilities standard standard Average Maximum Item Unit standard standard Average Maximum Boiler 180 180 108 120 pH 5.8 to 8.6 6.0 to 8.5 7.2 7.6 Melting BOD (mg/l) 25 16 2.7 5.0 NOx (ppm) furnace 200 200 57 60 SS (mg/l) 50 20 1.0 1.0 Dryer 300 250 53 58 furnace n-h (mineral oil) (mg/l) 5 0.5 0.2 0.2 Boiler 17.5 17.5 0.35 0.39 Melting SOx (K value) furnace 17.5 17.5 0.24 0.26 Dryer furnace 17.5 17.5 0.13 0.13 Boiler 0.3 0.3 0.00 0.00 Melting 0.2 0.2 0.00 0.00 Soot (g/Nm3) furnace Dryer furnace 0.5 0.2 0.00 0.00

● Mie Works

Atmospheric Indicators Wastewater Quality Indicators Legal Self-imposed Legal Self-imposed Item Unit Facilities standard standard Average Maximum Item Unit standard standard Average Maximum Boiler 180 140 47 54 pH 5.8 to 8.6 6.5 to 8.5 7.6 8.0 NOx (ppm) Melting BOD (mg/l) 10 4 1.3 2.0 furnace 180 140 48 53 SS (mg/l) 25 6 1.0 5.1 Boiler 0.6 0.5 0.00 0.00 n-h (mineral oil) (mg/l) 1 0.7 0.11 0.45 SOx (K value) Melting furnace 41.6 33.3 0.13 0.13 Boiler 0.3 0.24 0.005 0.005 3 Soot (g/Nm ) Melting furnace 0.3 0.24 0.072 0.084

● Osaka Works

Atmospheric Indicators Wastewater Quality Indicators

Item Unit Facilities Legal Self-imposed Average Maximum Item Unit Legal Self-imposed standard standard standard standard Average Maximum Boiler 150 120 18.0 18.0 pH 5.7 to 8.7 5.7 to 8.7 7.7 8.2 Melting BOD (mg/l) 300 10 4.9 11.0 200 160 5.0 6.0 NOx (ppm) furnace SS (mg/l) 300 50 10.6 47.0 Dryer n-h (mineral oil) (mg/l) 5 2 1.4 2.9 furnace 170 144 3.0 3.0 Boiler 0.1 0.08 0.001 0.001 Melting Soot (g/Nm3) furnace 0.2 0.16 0.001 0.001 Dryer 0.25 0.2 0.001 0.001 furnace

37 38 Initiatives at Affiliated Companies

Inoue Manufacturing Co. Ltd. Head Office: 2-2-13 Okano, Nishi-ku, Yokohama, Kanagawa prefecture Yokohama Plant: 2-10-10 Okano, Nishi-ku, Yokohama, Kanagawa prefecture Ebina Plant: 2286-1 Sugikubo, Ebina, Kanagawa prefecture Workforce: 260 employees Website: http://www.inoue-mfg.com/ Inquiries: Quality and Environmental Promotion Department Tel: +81-46-238-1055 Fax: +81-46-238-4727

History (4) Establishment of green procurement reducing environmental impact in the future. Established as Inoue Iron Works in 1919, the management current incarnation of Inoue Manufacturing Social Contribution Activities came into being after the company was As part of our development efforts to help (1) Work experience for junior high school restructured in 1957. With capital investment minimize environmental impact, we have students from Furukawa Electric, we became a member developed technology and products including Having received a request from the Nishi- of the Furukawa Electric Group that same year halogen-free termination connectors for power ku Ward Office (Yokohama) to provide work and have been ever since. cables (so as to prevent harmful gases from experience placements, in May 2008 we organ- We deal in a range of products, including being emitted during combustion), lightweight ized a two-day work experience program for accessories for power cables, components guns for spot welding robots (so as to reduce two local junior high school students. The pro- for electrical equipment, spot welding guns the amount of materials used and make robots gram started with safety education and also and their components, and other processed more compact) and electronic beam welding included tours of our plants before concluding nonferrous metal products. achieving almost the same electric resistance as with practical sessions in which the students base material. manufactured their own pencil holders. Environmental Preservation On the waste front, we are making every Initiatives effort to reduce the volume of waste that we In March 2002, our Ebina Plant, Yokohama generate through initiatives such as reusing Plant and Tokyo Branch combined to obtain packaging boxes. All waste leaving our plants ISO 14001 certification. In an effort to reduce is sent to a subcontractor for intermediate dis- the environmental impact of our business posal, with the majority then being recycled. activities, we continue to promote the follow- In an effort to raise awareness, we have hand- ing environmental preservation initiatives on ed out cards bearing our Basic Environmental a priority basis in the fields of product devel- Philosophy and Environmental Policy to all of A practical work experience session opment, design, manufacturing and sales. our employees and require them to be carried (1) Energy saving initiatives to help prevent at all times in our plants. We are also working to (2) External awards global warming raise environmental awareness on an individual Our Ebina Plant has its own firefighting (2) Waste reduction and recycling initiatives level through initiatives such as requiring vehi- team that is responsible for maintaining to ensure the effective use of resources cles to turn off their engines whilst on site and and operating fire hydrants and conducting and reduce environmental impact meticulously separating waste for recycling. regular fire drills. In October 2007, the team (3) Development of technology and products In terms of chemical substances, we are was presented with an award for outstanding to help minimize environmental impact now able to manufacture selected products achievement at the 19th Ebina Indoor Fire (4) Rigorous control of chemical substances made from materials that do not contain any Hydrant Contest, an event organized by the harmful substances, including lead-free sol- Ebina Fire Department. We have set out the following environmen- der and cadmium-free silver brazing filler. tal targets for fiscal 2008 and are implement- We will continue to make every effort to ing activities accordingly. implement companywide activities aimed at (1) 5% year on year reduction in power con- sumption (2) 5% year on year reduction in volume of waste generated (3) 100% response rate to customer A “koppel” consisting of a 6600V termination (eco requirements regarding the exclusion copper strip and copper plate termination) of harmful chemical substances welded onto one another using electron beam welding

39 40 Okumura Metals Co. Ltd. Head Office: 2-6-5 Sakuragawa, Naniwa-ku, Osaka Ritto Works: 575 Deba, Ritto, Shiga prefecture Nikko Works: 597 Otorozawa, Nikko, Tochigi prefecture Okayama Works: 1226-2 Hattori, Osafune-cho, Setouchi, Okayama prefecture Kasuga Plant: 2352-1 Nokono, Kasuga-cho, Tamba, Hyogo prefecture Workforce: 146 employees Website: http://www.fitec.co.jp/okumura/ Inquiries: EMS Promotion Department, Head Office Tel: +81-6-6562-7251 Fax: +81-6-6562-7258

History saving specifications, including equipment Future Activities Established in 1926, Okumura Metals such as compressors and air conditioners (1) Eliminating the use of chlorine-based adopted its current name in 1970. Having (3) Reducing use of chlorine-based organic organic solvents entered the processing sector via the sale solvents We scrapped one of our three dichlorometh- of materials such as copper and aluminum, In fiscal 2007, we achieved an 82% reduc- ane washing machines at the end of March 2008 we currently process components for home tion in the volume of organic solvents used and replaced it with a hydrocarbon-based alter- appliances, including manufacturing internal to clean our products and components native. We plan to scrap and replace a further piping for air conditioners, piping connection compared to levels in fiscal 2000 through machine before the end of fiscal 2008 and have kits and microwave oven components. measures such as continuing the installation also penciled in the removal of the remaining In addition to five domestic works and of hydrocarbon-based washing machinery machine so as to complete the process. plants, we started to branch out overseas in (started in fiscal 2002) and using alternatives (2) Increasing sales of environmentally 1987 and currently operate a global network to solvent-based cleaning fluids. friendly products consisting of four overseas bases (in Malaysia, (4) Green activities In our capacity as a sup- Guangzhou, Shanghai and Thailand), as we In an effort to take quick, effective action in plier of environmentally continue to supply products that guarantee response to new restrictions on the use of harmful friendly products, which customer satisfaction on a daily basis. chemical substances, including RoHS regulations, the home appliance in fiscal 2007 we put in place an environmental industry has been actively Environmental Preservation quality assurance system to enable us to deal with promoting, capitalizing Initiatives customer inquiries as quickly as possible. on the fact that 70% of the We first began ISO 14001 certification We have also installed simplified analysis products we sell are materi- activities in March 1999, going on to achieve equipment and established a checking system as als or components for white certification for our three works and plants in part of our day to day management operations. goods, we are actively Eco Cute piping the Kinki region in February 2000. In February (5) Community and social contribution focusing on increasing sales 2005, we added a further two sites, securing activities of materials and components for environ- certification for all of our domestic premises. We take part in events and other activities held mentally friendly products and making every Having gone on to obtain certification at each in the local communities around each of our sites. effort to sell body components and materials of our four overseas bases in December 2006, At our Head Office, in addition to engag- for Eco Cute water heaters in particular, which our environmental preservation activities now ing in weekly cleanup activities conducted are attracting a great deal of attention within cover all bases associated with the company. once a week, we have participated in Clean the industry at present. We intend to con- Osaka (held in November each year and tinue to increase sales in the future. Priority Measures also in August 2007 (3) Green activities (1) Waste reduction activities to coincide with We are redoubling our focus on green In fiscal 2007, we managed to reduce the World Athletics activities at present, incorporating our sup- the volume of waste generated by 45% Championships) and pliers as well in an effort to firmly establish compared to levels in fiscal 2000 through local cleanup activi- our environmental quality assurance system. measures such as promoting recycling based ties ever since 2002. Cleanpic Osaka (4) Zero emissions activities on separating, collecting and returning raw Power consumption Waste generated Methylene chloride We are working to achieve zero emis- Unit: 1,000KwH Unit: tons Unit: tons material packaging. 2000 35 120 sions, with overall waste totaling less than 30 100 (2) Reducing power consumption 1500 25 1%, through efforts to reduce the volume 80 In fiscal 2007 we achieved a 19% reduction 20 of waste generated, primarily through the 1000 1985 35 60 1618 15 106 in power consumption compared to levels 40 3Rs, and to cut the volume of direct landfill 500 10 19.2 in fiscal 2000 through measures such as 5 20 disposal based on initiatives such as disas- 20 upgrading plant facilities in line with energy 0 0 0 sembly and separating waste. 2000 2007 2000 2007 2000 2007 (Fiscal year) (Fiscal year) (Fiscal year)

40 Third-Party Opinion

ance, customers, shareholders and inves- surrounding mining sites are global tors, suppliers, and employees. The report challenges that need to be addressed. covers all of the CSR activities by offices Companies that use mineral resources at of the Company. The Company deserves some point in their supply chains from high marks for conveying its attitude the upstream position to the downstream towards CSR. are required to avoid what is called dirty But relationships with stakeholders mining, or mining in a way that does not are centered on an explanation of sys- consider human rights or the environ- tems and mechanisms. With respect to ment. In fact, Furukawa Electric faces the environment, the report clearly sets expectations from its customers, namely out the performance, objectives, and auto manufacturers and home-appliance Mariko Kawaguchi other aspects in accordance with the manufacturers about the use of resources Senior analyst at the Management PDCA cycle, and this is remarkable for from dirty mining, and it has in turn asked Strategy Research Department of Daiwa an environmental management report. its own suppliers, the ore refineries, about Institute of Research Ltd. The Company deserves particular praise it. Actually the answer seems to be that

Graduated with a master’s degree from for setting a bold target of reducing CO2 ore refineries cannot separate ore from Hitotsubashi University Graduate School in 1986. emissions from production bases by 25% dirty mining. Unfortunately, the report Joined Daiwa Securities in 1986. Transferred in 2009, compared with the 2000 level, does not write about this. “We decided to Daiwa Institute of Research in 1994. Had a and is reducing CO2 emissions steadily, not to mention this because we had not number of roles, including analyst, taking her although the cuts are short of the target. reached a final conclusion,” said Mr. Sato. present assignment. Her research subjects include socially responsible investment and cor- However, the report does not appear However, readers will think that the porate social responsibility. Co-author of Guide to set out the strategy Furukawa Electric Company is unaware of the issue if the to Socially Responsible Investment and CSR will use to show how it will actively report does not discuss it. The CSR report Management. Part-Time Instructor at Aoyama address the global environmental should report not only conclusions but Gakuin University. issues, including global warming, that also ongoing information on what kind confront humanity and how it will con- of position the Company is taking in Remarks about the Report tribute through its core businesses. And addressing social issues. Since dirty min- The CSR report is a communications although Furukawa Electric deals with ing is a significant social and environmen- tool in which a company expresses to copper, the report also fails to make clear tal issue, I hope that Furukawa Electric will stakeholders in the broader community the Company’s position on the selection continue quiet dialogues with refineries its posture on CSR philosophy and differ- of mines and its mineral resources strat- so that manufacturers will encourage ent issues in contemporary society. The egy, which are indispensable elements in mines to address the issue in addition to company states in the report what philos- addressing CSR challenges. simply pass on the answer from refineries ophy it has, what it is specifically thinking Consequently, I unfortunately had the to customers. about, how it acts, and what it would like impression that the CSR report was inad- Discussing environmentally friendly to do in the future. equate as a report on specific CSR activi- products reinforced again for me the fact However, the reports of many Japanese ties, although senior management clearly that copper wire is essential for every companies, especially traditional manu- recognizes global warming and poverty product using electricity. Although this facturers, are centered on an explanation as the greatest challenges facing man- may be obvious to people in the industry, of internal systems and results vs. internal kind. it is a discovery to people like me outside targets, and the reports for external audi- the industry. It is widely recognized that ences are mostly just revised versions After the Interview of the internal reports on CSR activities. However, this impression changed I had the same impression about this dramatically once I spoke with Chief report too. Social Responsibility Officer Tetsuya Sato. In his message, President Masao After the interview, I understood that Yoshida touched on his understanding of the Company is proactively addressing global challenges such as environmental issues that I felt were not being dealt with and poverty issues, the concept of triple adequately when I read the report. bottom lines, and the importance of com- In the field of CSR sourcing, the human municating with stakeholders. The body rights of people living near mining sites of the report covers items such as compli- and the ecological destruction of areas

41 42 History of Furukawa Electric’s CSR Activities

energy saving is the most important 1972 ••Companywide Rules for Pollution Prevention 2003 ••Operating Officer System introduced action for combating global warming and formulated ••Furukawa Electric Basic Environmental Policy revised ••Medium-Term Plan for Environment Preserva- 1974 ••Environmental Control Department estab- that energy-saving home appliances and tion Activities 2005 formulated (2003-2005) lished ••Green Procurement Executive Committee established electrical facilities are important. But peo- ••Energy Conservation Team established ple are not aware that copper is always ••Liaison Meeting of Consolidated Environmen- 1976 ••Central Quality Control Committee estab- tal Management established associated with energy saving. We could lished say that copper plays a vital role in the 2004 ••Medium-Term Plan for Environment Preserva- 1989 ••Team for Reduction in Use of Specified CFCs tion Activities 2005 revised background of a society using electric- established ••Compliance Committee established ity. I believe Furukawa Electric needs to 1993 ••Basic Framework for Protecting the Global ••Furukawa Electric Group Action Guidelines spotlight the roles that copper can play Environment formulated (Furukawa Electric's formulated voluntary environmental preservation plan) ••Furukawa New Leaf established as a special in an energy-saving society, to present subsidiary offering employment of people them in a way that is easy to understand, 1994 ••Committee for Companywide Promotion of with disabilities Energy Conservation established and to encourage greater public under- 2005 ••Green Product Management Committee es- 1996 ••Use of specified CFCs and trichloroethane standing. If the Company then discloses tablished discontinued ••Compliance Handbook VersionⅠ published its environmentally friendly product lines 1997 ••Team for Promotion of Reduction in Industrial 2006 ••Medium-Term Plan for Environment Preserva- and its strategy, it will not only bolster its Waste established tion Activities 2009 formulated (2006-2009) competitiveness but also clarify its role in 1998 ••Furukawa Electric Basic Environmental Policy ••Risk Management Committee established society. formulated ••Report published under the revised title "En- ••Central Committee for Environmental Man- vironmental and Social Report" Finally, I would like to write about agement established ••Compliance Handbook Version II published personnel strategy. The report explains ••Committee for the Development of Environ- 2007 ••CSR Division established diverse work patterns and work-life mentally Friendly Products established ••Chief Social Responsibility Officer (CSRO) appointed ••Acquisition of ISO14001 certification com- balance support schemes. I hope the ••Safety, Environment and Quality Promotion menced Department split into the Safety and Environ- Company will disclose data on users of ••Companywide Regulations for Pollution Pre- ment Promotion Department and the Quality the scheme as a global company. Data vention revised to create the Companywide Promotion Department Regulations for Environmental Management on human resources from Japanese ••CSR and Risk Management Committee established ••Furukawa Electric Group Action Guidelines companies tends to focus on Japanese 1999 ••Central Safety and Health Committee estab- lished partially revised employees. But as production bases are ••Report published under the revised title "CSR Report" 2000 ••Liaison Meeting with Affiliated Companies es- ••Corporate philosophy and corporate message expanding into China, Southeast Asia, tablished of the Furukawa Electric Group formulated ••First Environmental Report published and other regions, hiring excellent local ••Corporate Philosophy Handbook of the Furu- ••Meeting of Environmental Personnel estab- human resources becomes an important kawa Electric Group issued lished challenge not only for CSR but also for 2008 ••Furukawa Electric Basic Environmental Policy 2001 ••Medium-Term Plan for Environmental Preser- formulated management. It was mentioned that the vation Activities 2002 formulated (for 2001- ••Furukawa Electric joined Team Minus 6% Company is considering human resources 2002) ••Furukawa Electric Group Basic CSR Policy for- ••Environmental accounting started development programs and a global mulated personnel utilization strategy to secure 2002 ••Green Procurement Preparation Committee ••Furukawa Electric Group Action Guidelines established excellent human resources irrespective of partially revised ••CSR Compliance Handbook Version III published nationality. I hope Furukawa Electric will develop and institute strategies from the perspective of a global Japanese com- pany.

Information available via our website Our website features details of progress with our CSR initiatives and PDF versions of this report and other previously published environmental reports. The relevant materials can be accessed via the following page on the Furukawa Electric website.


41 42 Safety and Environment Promotion Department, CSR Division

4-3 Okano 2-chome, Nishi-ku, Yokohama 220-0073, Japan Tel: +81-45-311-1334 Fax: +81-45-311-1931 http://www.furukawa.co.jp/english/

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