2005 Environmental & Social Report Contents ● Top Messages ………………………………………… 3 LCA Activities ……………………………………………… 27 ● Corporate Overview …………………………………… 5 Aerospace, Industrial Products, ● Corporate Philosophy and CSR ……………………… 7 Eco Technologies Companies,and Clean Enterprise Aerospace Company ……………………………………… 28 Environmental Report Industrial Products Company …………………………… 29 Eco Technologies Company ……………………………… 30 Environmental Management …………………… 10 Clean Enterprise …………………………………………… 31 Environmental Policy ……………………………………… 10 Production …………………………………………… 32 Corporate Activities and Environmental Impacts …………… 10 Reduction of Waste Materials …………………………… 32 New Voluntary Plan for the Environment ………………… 11 Reducing Water Consumption …………………………… 33 Organization ……………………………………………… 11 Prevention of Global Warming (Energy Saving) ……… 34 Environmental Management System …………………… 11 Management of Chemical Substances (the PRTR Law) …… 34 Environmental Audits ……………………………………… 12 Reducing Substances with Environmental Impact …… 35 Company-wide Unifi ed Auditing ………………………… 12 Green Procurement ……………………………………… 35 Environmental Education ………………………………… 14 【Topics】Utsunomiya Manufacturing Division’s Cogeneration System … 36 Environmental Accounting ……………………………… 15 Overall Achievements under the Fiscal 2004 and Fiscal 2005 Plans …… 17 Recycling ……………………………………………… 37 【Reference】FHI Environmental Conservation Program … 19 FHI’s Fundamental Philosophy …………………………… 37 Environmental Incidents ………………………………… 21 Law on Recycling End-of-Life Vehicles ………………… 37 Environmental Communication …………………………… 21 Design ……………………………………………………… 39 Production ………………………………………………… 40 Development Phase/Products ………………… 22 Sales and Services ………………………………………… 41 Automotive Business Unit Disposal …………………………………………………… 41 Fuel Economy ……………………………………………… 22 Exhaust Emissions ………………………………………… 23 Logistics ……………………………………………… 44 【Reference】Fiscal 2010 Fuel Economy Standards and Exhaust Emission Regulation Values … 25 Reducing the Environmental Burden of the Transportation of Completed Automobiles …… 44 Clean Energy Vehicles …………………………………… 26 Reducing the Environmental Burden of the Transportation of Service Parts …… 44 Joint Development of Energy-Saving Gasoline Engines by Industry, Academia, and Government … 26 Reducing Packaging Materials for Overseas Knockdown Parts …… 44 Noise ………………………………………………………… 27 TOPICS 2004 Activities in Affiliated Companies–overseas- (p.50) Production Stage (p.36) SCI (Subaru Canada, Inc., a Subaru The Utsunomiya Manufacturing sales base in Canada) and SOA Division (Eco Technologies (Subaru of America, Inc., a U.S. Subaru Company and Aerospace Company) sales base) each strove to establish an started to operate the 6000 kW class environmental management system. natural gas engine cogeneration These efforts led to their acquisition of system in February 2005 to further ISO 14001 certifi cation in January and promote our endeavors toward February of 2005, respectively. prevention of global warming. Development Phase/Products (p. 22) Social Involvement (p. 65) In January 2005, FHI launched the On July 6, we convened the Subaru new Subaru R1 mini car, in which the Environmental Exchange Meeting best environmental performance in the as a part of the class for fi fth grade class (24 km/L) and excellent running students from Ohta City Niragawa performance were simultaneously Nishi Elementary School. The realized. The Subaru R1 achieved exhaust emissions 50% less than meeting included a fi lm screening, required by the 2005 standards and 5% above the 2010 fuel economy experiment, and quiz, which were standards of the Ministry of Land, Infrastructure and Transport. very popular with the students. 1 Activities of Affi liated Companies …………… 45 Health and Safety ………………………………………… 60 Domestic Companies Social Involvement ………………………………… 62 Domestic Affi liated Company Subcommittee ………… 45 Social Contributions ……………………………………… 62 All Subcommittee members certified to ISO 14001 …… 45 Regional Activities ………………………………………… 64 Actual Achievements of the Six Domestic Affi liated Companies in Fiscal 2004 … 46 Cooperation/Donation/Support to Special Events …… 64 Overseas Companies Awards ……………………………………………………… 65 Overview of Activities in the Five North American Companies … 47 Environmental Education ………………………………… 65 Environmental Accounting of North American Companies … 48 Environmental Activities in Individual Companies ……… 48 Social Contribution Activities ……………………………… 49 Data Commendations …………………………………………… 49 Plant Site Data ……………………………………… 66 【Topics】Subaru Sales Base Obtained ISO 14001 Certifi cation … 50 Gunma Manufacturing Division ………………………… 66 【Topics】SIA Activities Targeting Resource Circulation …… 51 Utsunomiya Manufacturing Division …………………… 68 Industrial Products Company …………………………… 69 Social Report Tokyo Offi ce ………………………………………………… 69 Product Data ………………………………………… 70 Compliance …………………………………………… 53 Automobiles ………………………………………………… 70 Fundamental Philosophy ………………………………… 53 General-Purpose Engine ………………………………… 71 System and Administration ……………………………… 53 Fiscal 2004 Results of Compliance Activities …………… 54 Other Data …………………………………………… 71 Relationship with Customers ………………… 55 Chronology of FHI’s Environmental Efforts …… 72 Creating Safe Automobiles ……………………………… 55 Making User-Friendly Automobiles ……………………… 56 ◆ In this 2005 Environmental & Social Report, the following items For Customer Satisfaction ………………………………… 57 have been added to the existing contents of the 2004 report: 1. For sustainable development, corporate activities for 59 Relationship with Employees…………………… social responsibility（CSR） are increasingly required. We Employment ………………………………………………… 59 summarized our approach to CSR activities. Development of Human Resources ……………………… 60 2. We summarized major topics in fiscal 2004 in the contents Benefi ts Package…………………………………………… 60 page. Introduction ◆ About This Environmental & Social Report of fi ve affi liated companies in North America, are also noted. ● Range of the report ● Guidelines referenced This report mainly contains the achievements of ・ “Environmental Report Guidelines (2000 and 2003)” environmental conservation and social activities (compliance, by the Ministry of the Environment relationship with customers, relationship with employees, ・ “Environmental Accounting Guidelines (2000, 2002 social involvement, etc.) carried out in fi scal 2004 (April 2004 and 2005)” by the Ministry of the Environment through March 2005). Achievements in early fi scal 2005 are ● Next Issue also included for informational purposes. ・ Our previous Environmental Report was issued in This report mainly covers the activities of FHI’s business June 2004. The next report will be published in the operations in Japan. To introduce its group activities, the summer of 2006. performances of six domestic consolidated manufacturing and logistics companies, which are considered to have greater environmental impacts, are also mentioned. Activities of the North American Environment Committee, which are composed 2 A Company with a Strong, Appealing Presence Thank you very much for your interest in the Fuji Heavy Industries (FHI) Environmental and Social Report. Recently, CSR (corporate social responsibility) has become as widespread among the general public as it has in the business community. Acknowledging that CSR is fundamental to our business activities, Fuji Heavy Industries (Subaru) believes that it is our mission to benefi t society as a good corporate citizen by actively working to improve the health of the environment , ensure compliance, and contribute to society. We developed CSR Policies in order to organize the current activities and approaches in each segment and to point our corporate vector in the right direction for the achievement of greater performance. Based on the CSR Policies, we will ensure that each activity responds to the expectations of society, with the goal of becoming a company with a strong, appealing presence. To address environmental issues, we set our management goal to become an eco-friendly, excellent company. Based on the idea of offering our customers clean products from a system of environmentally clean factories, logistics networks, and distributors, we have been strenuously working to conserve the global environment by developing a new voluntary plan for the environment called the FHI Environmental Conservation Program (Fiscal 2002-2006). We have achieved outstanding results to date, particularly in waste reduction and energy conservation in the production stage. Since the Kyoto Protocol became effective this February, further reduction of CO2 is required in industry, transportation, and consumer goods. As a result of our voluntary plan for the environment, we have reduced CO2 levels even more than we planned by promoting energy conservation at the plants and by introducing a natural gas cogeneration system. We will continue efforts to meet the demands from the government for further reductions. Regarding our main product-the automobile-,we are working to reduce CO2 emissions by improving fuel economy through weight reduction technologies. For products other than automobiles, we are working to reduce CO2 emissions by using fuel-effi cient general- purpose engines and wind turbine generator systems. In January 2005, the Law on Recycling End-of-Life Vehicles came into force. We are not only promoting the recycling of resources in accordance with the law but are also developing products that are easier to recycle. To make all these environmental activities