2005 Environmental Annual Report

2005 Honda Environmental Annual Report

Commitment to the future Honda Environmental Information Disclosure Honda traditionally published two types of brochures as its primary means of disclosing environmental information. These Honda Environmental Annual Report were the Honda Environmental Annual Report and Honda ...Annually ECOLOGY, both of which were available to the general public on the Internet. We published these two different brochures to convey and disclose environmental information in order to strengthen our two key concepts:

Honda It is vital that we convey accurate information on the pro- Environmental gress made in our environmental commitment during the Annual Report ...Annually previous year by clearly distinguishing between “annual results” and “past results and future efforts.” Environmental annual report Description of Honda’s latest * We see the Honda Environmental Annual Report as an environmental activities and the specific results achieved in the integral part of our PDCA (Plan, Do, Check, and Act) previous fiscal year Process, relating to our environmental commitment made over the entire report year. It is important to convey a full picture of our environmental commitment—past, present, and future—so that the gen- Honda ECOLOGY ...Every three years eral public is able to assess our results for the year for Environmental annual report themselves. This provides them with the essential infor- In our integrated environmental annual report, we will mation by which we are judged. appropriately introduce and explain Honda’s commitment to environmental activities in all aspects, including Honda’s This year, however, we have integrated the Honda Environmen- basic attitude towards the environment, the environmental tal Annual Report and Honda ECOLOGY, in order to reduce the conservation activities burden on readers who had to read two different brochures to conducted by Honda’s departments, and the future review Honda’s environmental activities, and to make these re- direction of Honda’s environmental measures, while ports easier to understand in view of the reports becoming focusing on accurately Brochure describing communicating the progress more complex due to increased technical details. environmental activities that Honda has made in its Full and detailed explanation of environmental activities to the In this integrated environmental annual report, we will appro- Honda’s environmental readers. activities, including its basic priately introduce and explain Honda’s commitment to environ- stance towards the environment, the environmental mental activities in all aspects, including Honda’s basic policy conservation activities conducted by each toward the environment, the environmental conservation activi- department, and future ties conducted by Honda operations, and the future direction of environmental directions Honda’s environmental activities, while focusing on accurately Note: This report has been compiled on the basis of Honda guidelines. communicating the progress that Honda has made in its environmental activities. Please evaluate Honda’s environmental commitment based on this report. We will utilize this report as a means to promote communication with all consumers and to further improve our environmental activities. Honda’s environmental activities are fully disclosed on the following website as well:

http://world.honda.com/environment/

Picture on the front cover: Space by Tokuro Sakamoto

02 CONTENTS

2 Honda Environmental Information Disclosure 4 Introduction: 4 Striving to Become a Company that Society Wants to Exist Segments Covered 6 Toward an Environmentally Advanced Company by the Report —In Publishing the Honda Environmental Annual Report 2005 8 Honda’s Advanced Environmental Measures Period covered Fiscal 2004 (from April 1, 2004, to Fundamental Principle and Vision March 31, 2005) 12 Honda Environment Statement Areas covered Mainly Japan and some overseas 12 Assessment of and Our Policy on the Environmental Load Generated by Our Corporate Activities areas 13 Organizations covered Honda Motor Co., Ltd.; Honda R&D Co., Ltd.; 14 Medium-Term and Annual Targets and Results Honda Engineering Co., Ltd; 14 Specific Targets to Be Achieved and Results to-date Honda Motorcycle Japan Co., Ltd.; 15 Results for Fiscal 2004 and Targets for Fiscal 2005 and the following production companies and subsidiaries outside 16 Environmental Management of Japan 16 General Policy/Organization 17 Role North America 18 Environmental Management by Honda’s Business Sites/Environmental Audits Honda of America Mfg., Inc. (U.S.) Environmental Accounting/Environmental Training Honda Transmission Mfg. of America, Inc. (U.S.) 19 Promotion of Life Cycle Assessment (LCA) Honda Power Equipment Mfg., Inc. (U.S.) 20 Honda of South Carolina Mfg., Inc. (U.S.) 21 Environmental Risk Management Honda Mfg. of Alabama L.L.C. (U.S.) Honda Canada Inc. (Canada) 22 Results of Environmental Conservation Activities in Fiscal 2004 Honda de Mexico, S.A. de C.V. (Mexico) 22 Product Development Domain 23 Automobiles Achieving Cleaner Exhaust Gas South America 25 Improvement in Fuel Economy Moto Honda da Amazonia Ltda. (Brazil) 27 Alternative Fuel Vehicles/Noise Reduction Honda Automoveis do Brasil Ltda. (Brazil) 28 Motorcycles Achieving Cleaner Exhaust Gas 29 Improvement in Fuel Economy/Noise Reduction Europe Power Equipment Achieving Cleaner Exhaust Gas Honda of the U.K. Mfg., Ltd. (U.K.) 30 Improvement in Fuel Economy/Alternative Fuel Technology/Noise Reduction Honda Europe N.V. (Belgium) 31 Honda Belgium N.V. (Belgium) 32 Purchasing Domain Honda Italia Industriale S.p.A. (ATESSA) (Italy) 33 Promotion of Green Purchasing C.I.A.P. S.p.A. (Italy) 34 Production Domain Montesa Honda S.A. (Spain) 35 Promotion of Green Factories Honda Turkiye A.S. (Turkey) 38 Transportation Domain Honda Europe Power Equipment S.A. (France) 39 Promotion of Green Logistics 40 Reduction in Packaging Materials by Product Category Asia and Pacific 41 Sales Domain Honda Automobile (Thailand) Co., Ltd. (Thailand) 42 Promotion of Green Dealers (Automobiles) Thai Honda Mfg. Co., Ltd. (Thailand) Expansion of Environmental Commitment to the Motorcycle and Asian Autoparts Co., Ltd. (Thailand) 43 Power Equipment Areas Honda Cars Philippines, Inc. (Philippines) Honda Philippines, Inc. (Philippines) 44 Disposal and Recycling (3R) Domain Honda Parts Mfg. Co. (Philippines) 45 Automobiles 3R Design/Reduction in Substances of Concern Honda Taiwan Co., Ltd. (Taiwan) 46 Motorcycles 3R Design/Reduction in Substances of Concern Honda Siel Cars India Ltd. (India) 47 Power Equipment Design for Recyclability/Reduction in Substances of Concern Honda Motorcycle and Scooter India (Pvt.) Ltd. (India) 48 Repair Parts Increasing the Recovery, Recycling, and Reusing of Repair Parts Honda Siel Power Equipment Ltd. (India) 50 End-of-Life Products Automobiles End-of-Life Vehicle Recycling Law P.T. Honda Prospect Motor (Indonesia) 51 Achievements in Fiscal 2004 P.T. Honda Precision Parts Mfg. (Indonesia) 52 Motorcycles Voluntary Recycling Activities P.T. Astra Honda Motor (Indonesia) 53 Office Domain Honda Atlas Cars (Pakistan) Ltd. (Pakistan) Promotion of Green Offices Honda Vietnam Co., Ltd. (Vietnam) 54 Honda Autoparts Mfg., SDN. BHD. (Malaysia) Honda Malaysia Sdn. Bhd. (Malaysia) 55 Social Activities 56 Green Renaissance Activities China 57 Cooperation in Low Emission Vehicle Fairs and Support for Dongfeng Honda Auto Parts Co., Ltd. (China) Environment-Related Seminars/Cooperative Activities with Local Communities/ Dongfeng Honda Engine Co., Ltd. (China) Support to NGOs and Environment-Related Foundations/Other Activities Dongfeng Honda Automobile Co., Ltd. (China) 58 Environmental Communication Guangzhou Honda Automobile Co., Ltd. (China) 59 Environment-Related Prizes and Awards Won by Honda Wuyang-Honda Motors (Guangzhou) Co., Ltd. (China) Jialing-Honda Motors Co., Ltd. (China) Related Data Honda Mindong Generator Co., Ltd. (China) 60 Environmental Data by Products Sold in Japan Sundiro Honda Motorcycle Co., Ltd. (China) 60 62 Data of Japanese Factories Note: For overseas manufacturing companies and subsidiaries, please refer to “Global Environmental Data (Production 72 Global Environmental Data Domain)” and “Environmental Activities Outside of Japan” in 74 Environmental Activities Outside of Japan this report. 76 Corporate Profile & Financial Data 03 Striving to Become a Company that Society Wants to Exist

Takeo Fukui President and C.E.O.

04 Honda’s Dynamically Growing Business make us a leading company in the world in each area of Thanks to support from many people, Honda has been our business. We will seek to satisfy people all over the doing well in its business operations. world with our products and continue to do so over the next In fiscal 2004, Honda achieved record unit sales of generation. motorcycles, automobiles, and power equipment, and To this end, we must further strengthen our sites and provided its customers all over the world with as many as sources for creation, which means that it is of utmost 20 million engines in total. We also reached a record high in importance for individual associates of Honda to make net sales for the fifth time in five terms. decisions and behave themselves by their own initiative. By In addition, we have continuously taken on challenges improving individual associate’s “initiative,” “technical skill,” in new business fields looking toward the future, including and job “quality,” we can further drive Honda to increase its research on robot technologies, as represented by the “value creation.” development of ASIMO, and the development of an experimental airplane (HondaJet). Honda’s View——Self-Consciousness as a Global Corporate Citizen Becoming the World’s No. 1 I deeply recognize that Honda will become more closely in the “Value Creation” by Improving involved with environmental issues as it expands its Individual Associates’ “Initiative,” business operations. To turn that expression around, I strongly believe that we will not be able to expand our “Technology,” and “Quality” business unless we fulfill our environmental responsibility. Honda is determined to strengthen the characteristics that For global environmental problems, in particular, make Honda unique in the development area to give joy nothing will actually be bettered unless we think and do and excitement to customers and to become the world’s what we can to give the best global solution to these No. 1 in “creating new value.” problems, beyond selfish individualism. In other words, we will further advance our “value At Honda, we will be aware of our responsibilities as a creation” to differentiate Honda from other companies and “global corporate citizen” and get involved with these problems as an interested party with strong ambitions, Global Sales Units of Motorcycles, Automobiles, and Power Equipment voluntarily setting high targets for ourselves. (10,000 units) 2,000 Power equipment Automobiles To Become a Company that Society Motorcycles Wants to Exist 1,500 We want to advance consistently, which we believe gives Honda its unique identity. We will continue to take on

1,000 challenges to create new value, properly acknowledging the social problems that undergo many changes over time. We will provide people with joy and excitement, which will make them 500 value Honda’s existence. We aim to become a company that people all over the

0 world want to exist. 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 (FY)

05 Toward an Environmentally Advanced Company In Publishing the Honda Environmental Annual Report 2005

Spread of Environmental Problems As a specific example of its environmental activities, in In order to deal with global warming, the subject of growing 1999 Honda released numerical targets to lower the debate all over the world since the 1990s, the Japanese exhaust emissions and improve the fuel economy of its government formulated a plan to achieve the targets set by products as along with the year in which these figures were the Kyoto Protocol in April 2005. Henceforth, various to be attained. Since then, we have reported the level of measures will be implemented toward the achievement of achievement every year. All these targets will be achieved these targets in an accelerated manner. in this fiscal year. In developed countries, various environmental problems, In the product domain, in view of the fact that society including adverse effects on human health and waste will continue to rely on fossil fuels at least for the near problems, are becoming increasingly obvious. future, in the automobile segment we introduced the Honda, as a company conducting business on a global Accord equipped with a clean diesel engine in Europe. In scale, believes one of its important corporate responsibilities addition, we released the Accord Hybrid in North America, is to tackle environmental issues. featuring a V6 engine equipped with the Variable Cylinder Management (VCM) system. In the area of motorcycles, we expanded the use of the fuel injection system to smaller Honda’s Commitment to the Environment models. In the area of power equipment, we will soon Honda has long been involved in environmental release next-generation engines that adopt the world’s first conservation activities. In 1992, we created the Honda technology to electronically control the engine revolutions Environment Statement, which clarifies our view on and will begin marketing small cogeneration systems for environmental conservation. Based on this statement, we household use in overseas regions. For the introduction of conduct various activities to solve environmental problems. fuel cell vehicles to promote the use of next-generation Honda wants to consistently be advanced in environ- energy, we have delivered 19 such vehicles worldwide. We mental activities. Specifically, in order to be an environmen- are also promoting the in-house development of the fuel tally advanced company, we think it necessary to meet the cell stack to further improve their performance. following requirements:

To set high targets and to achieve them earlier than Future Challenges planned As a company that pursues better mobility, Honda will To conduct environmental activities in all our business steadily meet the aforementioned four requirements. categories without exception and without fail Especially for the reduction of CO2 emissions, this issue To implement autonomous activities in every region will not be solved by simply clearing one obstacle. Honda where we conduct business operations is therefore committed to taking dramatic steps to solve this To properly communicate our environmental plans and problem in every area of its business operations. In other achievements to society at large words, we will reduce CO2 emissions in the production and

Improvement in Average Fuel Economy of Honda Automobiles (in Japan) (%) 150

100

0 1995 2000 2001 2002 2003 2004 (FY) Fuel Cell Vehicle: the FCX

06 transportation of our products and even during their use by In Publishing the Honda Environmental our customers. We want to be a company that Annual Report 2005 manufactures products with the highest environmental performance, based on a production system with the This annual report summarizes our activities in each fiscal smallest environmental impact in the world. For local year and is published to keep the public informed of our environmental problems, we will implement additional efforts. measures, beyond the expectations of the local community. From this fiscal year, the report newly includes a section I believe that we can achieve what people say is to introduce our next-generation technologies, and an effort difficult through human intelligence. Honda, centering on was made to make it more understandable for readers. “value creation,” will take on more challenges working Once you have read this report we would greatly toward the reduction of its environmental impacts. appreciate your frank comments in order to help us continue to improve our efforts in the future.

Michiyoshi Hagino Director in charge of environment Senior Managing Director

07 Honda’s Advanced Environmental Measures

Honda is committed to R&D and the early introduction of various environmental technologies in order to share the benefits of new technologies with its customers. In this section, we will introduce the technologies adopted for our products in fiscal 2004; those that are now under research or already applied, and advanced environmental activities that we are promoting in our business operations.

Fuel Cell Vehicle FCX

Releasing the FCX Equipped with the Honda FC STACK Next-Generation Fuel Cell

Honda developed a next-generation fuel cell In April 2004, using a Home Energy Sta- stack, the “Honda FC STACK,” in September tion (HES) that had both a hydrogen refuel- 2003. With this high-output but much more ing function and a cogeneration function, we compact fuel cell stack, it is possible to start conducted a driving test of a Honda FC the vehicle at 20 degrees below zero centi- STACK-equipped FCX on public roads in the grade, which has proved difficult with tradi- U.S. state of California. In July, the FCX was tional fluorine-based electrolyte membranes. certified by the U.S. Environmental Protec- The Honda FC STACK, after its 2003 approval tion Agency (EPA) and the California Air Re- by the Ministry of Land, Infrastructure and sources Board (CARB). Compared with the

Transport, underwent starting tests at temper- Ballard Stack-equipped FCX, the Honda FC Honda FC STACK-equipped FCX atures below zero in Hokkaido as well as driv- STACK-equipped FCX has achieved nearly a ing tests on public roads at low temperatures. 20% improvement in fuel economy (from 48 where temperatures drop to below zero in miles per kg of hydro- the winter. gen to 57 miles) and in Also from April 2004, test drives of the range (from 160 miles Honda FC STACK-equipped FCX on public to 190 miles). This roads were started in Yakushima, the World Honda FC STACK- Natural Heritage, as part of the Yakushima equipped FCX was Zero Emissions Project in which demonstra- introduced in the north- tion tests of a self-sufficient energy system eastern part of the were conducted to create a model for a re- United States, and a cycling-based society. total of three FCX vehi- Honda is promoting comprehensive re- cles were leased to the search for a future society where fuel cells will State of New York and be a common form of energy source, by con- to the local government ducting tests on both vehicles and hydrogen of Hokkaido in Decem- refueling systems in cold regions, including ber 2004 and in Janu- the test operations of the Honda FC STACK ary 2005, respectively, and the second-generation model of HES II. New York Governor George E. Pataki and American Honda Motor Co., Inc. President and CEO Koichi Kondo

Hybrid Vehicle

Introducing the Accord Hybrid in the U.S., Following the Release of Smaller Hybrid Vehicles

In the U.S., Honda introduced the Insight as horsepower, with an exceptionally broad and its first hybrid vehicle in the country in De- flat torque curve for outstanding power and cember 1999. Subsequently, in 2002, we ap- driving performance. In addition, it provides plied hybrid technologies to the Civic, one of for quick acceleration performance for the best-selling compact cars in the U.S. overtaking and comfortable cruising. Then in December 2004, as Honda’s third Compared with the Accord V6 Sedan, hybrid vehicle in the U.S. market, we re- the Accord Hybrid has improved fuel econo- leased the Accord Hybrid. my (by 38% in the city and 23% on the high- The Accord Hybrid, featuring a V6 way) as well as maximum output (by 15 engine (i-VTEC) with Variable Cylinder horsepower). Management (VCM) in combination with the The Insight, Honda’s first hybrid vehicle, Integrated Motor Assist (IMA) hybrid system, has also improved its fuel economy from has achieved the world’s highest fuel 35.0 km/R to 36.0 km/R (at 10-15 mode), economy for a V6 engine, similar to that of a thereby achieving the world’s highest stan- Honda Civic. Specifically, it achieves a fuel dard in fuel economy. economy rating of 29 mpg* in the city and * Approved by the U.S. Environmental Protection The Accord Hybrid 2005 Model 37 mpg* on the highway and delivers a high Agency (perspective view of the engine hood) performance with a maximum output of 255

08 Hydrogen Fueling System

Further Progress in the Hydrogen Fueling System for Household Use —Beginning Experiments of the Second-Generation Model

Honda started the experimental operation of hydrogen supply system in cold regions, we the HES II, the second-generation model of are promoting comprehensive research for a the Home Energy Station, which has both a future society where fuel cells will be used as hydrogen fueling function and a cogenera- a common power source. tion function, jointly with Plug Power of the The HES II is a single-component unit U.S.. that has been reduced to less than half the In addition, in the northeastern part of the size of the original HES in cubic capacity U.S., we started test drives of the Honda FC through natural gas reformation and down- STACK-equipped FCX, which enables startup sizing of the pressure device. The HES II is at subzero temperatures, on public roads in housed at Plug Power’s headquarters in September 2004. By testing the vehicle and Latham, New York. HES II and FCX

Next-Generation Motorcycle Developing a Honda FC STACK-Equipped Fuel Cell Motorcycle in the Pursuit of Further Fuel Cell Possibilities

Honda designed a lighter and more in the center of the body to install the highly compact version of the Honda FC STACK for efficient Honda FC STACK next-generation motorcycles and developed a fuel cell fuel cell, which enables startup at a subzero motorcycle equipped with this Honda FC temperature, by locating the entire EV drive STACK by applying the Honda FC STACK system in the rear-wheel swing arm. Other technology (fuel cell system) developed for features are installed around the stack in an automobiles. efficient manner, thereby maintaining almost The Honda FC STACK-equipped motor- the same body size as other motorcycles in cycle is based on a 125 cc scooter. For this the same class. motorcycle, sufficient body space is secured Fuel cell motorcycle

Pursuing Higher Environmental Performance—Developing a Hybrid Scooter For further reduction of exhaust emissions cally controlled belt converter. In addition, it and substantial improvement in fuel econo- is equipped with a series/parallel hybrid sys- my, Honda developed a 50 cc hybrid scoot- tem adopting a direct rear-wheel drive elec- er prototype for market introduction in the tric motor, incorporates a nickel-hydrogen near future. The scooter uses both an elec- battery in the front cowl as a secondary bat- tric motor and an engine, but has sufficient tery, and provides sufficient utility space. storage space. Compared with the DioZ4, we aim to im- The 50 cc model is equipped with a prove the fuel economy of the scooter to at range of Honda’s existing environmental least 1.6 times the current rate (at a constant technologies, including the alternating cur- speed of 30km/h) and reduce CO2 emis- rent generator (ACG) starter with an idle stop sions by at least 37%. function, the electronically controlled fuel in- Hybrid scooter jection system (PGM-FI), and an electroni-

Developing an Electric Motor-Powered Commuter Scooter for Urban Use Honda developed an electric motor- adopts a module structure integrating the powered commuter scooter prototype for drive motor and a central controller for bat- market introduction in the near future as an tery charging/discharging and driving func- environmentally friendly urban transporta- tions. The motorcycle achieves a driving tion. This lightweight scooter has a very performance to that of a gasoline-powered compact body. It has improved perfor- model through such measures as setting the mance in heat release and battery life by in- hill climbing ability at 12 degrees. corporating a 360 Wh light nickel-hydrogen battery as the power source. In addition, it

* Honda announced the development of the aforementioned three models in August 2004. Electric motor-powered commuter scooter

09 Honda’s Advanced Environmental Measures

Alternative Energy For the Popularization of Natural Gas Vehicles —Introducing Natural Gas Refueling Equipment for Household Use (North America)

Honda began marketing the Civic GX natural leasing of the Phill system will enable refuel- gas-powered vehicle and a home natural ing in a household garage. With Phill, suffi- gas refueling appliance called Phill in Cali- cient natural gas for driving the Civic GX for fornia in spring 2005, jointly with FuelMaker, approximately 100 miles (160 km) can be re- a natural gas refueling appliance maker fueled in eight hours. based in Toronto, Canada. Phill can be leased at 17 officially ap- The marketing of the Civic GX was star- proved Honda Civic GX dealers in California. ted mainly for fleet customers in 1998, and the U.S. Environmental Protection Agency evaluated it as the cleanest internal combustion engine vehicle it had ever tested. The Civic GX and Phill System

Next-Generation General-Purpose Engine iGX 440 Achieving the World’s Highest Standard in Environmental Performance by Adopting the World’s First Technology to Electronically Control Engine Speed Honda developed the all-new next-generation ing and engine speed, electronically regulat- iGX440 general-purpose engine (maximum out- ing the throttle opening to maintain a constant put: 15 horsepower; displacement: 438 cm3) as engine speed even under changing engine the world’s first single-cylinder general-purpose load conditions. In addition, thanks to the engine* equipped with the technology to elec- adoption of an auto fuel valve and auto tronically control engine speed. Sales of this en- choke, it is not necessary to open and close gine started in July 2005. the fuel valve or adjust the choke, leading to a The iGX440 adopts a new electronic gov- significant improvement in ease of operation. Next-generation general-purpose engine iGX440 ernor technology to electronically control the The iGX440 has also achieved emission lev- regulation standards, thus meeting the engine without a battery. This electronic gov- els approximately 30% lower than the U.S. world’s highest standards of environmental ernor system allows the electronic control unit Environmental Protection Agency (EPA) and performance. (ECU) to continuously monitor throttle open- the California Air Resources Board (CARB) * Surveyed by Honda

Small Cogeneration Unit for Household Use To Promote Home Cogeneration Systems throughout the World Honda’s small and light cogeneration unit for and a total energy utilization efficiency of household use, adopts the world’s smallest 85%, to reduce household primary energy natural gas engine, the GE 160V, and Hon- consumption. In addition, an approximate da’s unique sine wave inverter technology. 30% decrease in CO2 emissions is expected Honda reached a basic agreement with Cli- from the use of this cogeneration unit. mate Energy LLC (head office: Boston, Mas- This unit received the 2004 Prize for sachusetts, USA) on a project to supply this Natural Gas Industry Innovation (Planning, unit to Climate Energy, which will market a Research and Development Section) from system incorporating this cogeneration unit. Germany’s Association for the Efficient and Accordingly, Honda plans to launch the Environmentally Friendly Use of Energy small cogeneration system for home users in (ASUE), which demonstrates that this unit is the latter half of 2005. also highly evaluated overseas as the first This unit has a thermal output of approx- practical cogeneration system for household imately 3kW (thermal recovery rate: 65%), use. electric energy of approximately 1kW (power generation efficiency: approximately 20%) Small household cogeneration unit which is suitable for general households,

10 Reducing the Use of Substances of Concern Reducing the Use of Substances of Concern for Domestically Produced Models by the End of 2005 Honda will reduce the use of substances said valent chromium by the end of 2005 (exclud- to badly affect the environment, namely four ing its use in certain parts), thereby achieving heavy metals (lead, mercury, cadmium, and all the targets for the four substances earlier hexavalent chromium), for its automobile and than scheduled in the JAMA guideline. motorcycle models produced in Japan. For power equipment, there are no domes- For substances of concern (SOC), the Ja- tic regulatory standards. We, however, make Traditional bolt containing hexavalent chromium pan Automobile Manufacturers Association voluntary efforts to reduce the use of harmful (JAMA) has set voluntary reduction targets. substances in power equipment according to Among these substances, Honda has already JAMA’s voluntary targets. We have already at- attained the targets for two substances (lead tained the targets for three substances (lead, and mercury) for all automobile and motorcy- mercury, and cadmium) and have reduced the cle models. For the remaining two substan- use of hexavalent chromium by half. We will ces, we will abolish the use of cadmium by continue our efforts to completely abolish the the end of 2005 and reduce the use of hexa- use of this substance by the end of 2006. New hexavalent chromium–free bolt

Advanced Office— Honda Wako Building

To Reduce Life Cycle CO2 Honda Wako Building, constructed at the former site of the Wako Plant, started its operations in August 2004. With six stories above-ground and a total floor area of 52,183.5 m2, this building makes full use of natural light and natural energy sources such as solar energy for power generation and reuses waste water from air conditioners, canteens, etc. as well as rainwater for reducing energy and resource consumption and to promote recycling. In addition, the building itself is designed to largely reduce its life cycle CO2 (LCCO2*) emissions, from construction to disposal stages, by removing underground floors and reusing construction waste soil. For the building, we expect that CO2 emissions per total area will be reduced by 44.6% and the primary energy consumption Outside of Honda Wako Building by 49.1%, compared with standard values. CO2 emissions (LCCO2) per total area Design and supervision Maintenance Standard New construction Energy value Reconstruction Waste disposal Repair CFC Leak Reduced by 44.6% Renovation Wako Building

050100 150 200 (kg-CO2/m2, year)

CO2 emissions (kg – CO2/m2, year) Total area New Re- Waste (m2) Design and supervision construction construction Repair Renovation Maintenance Energy disposal CFC leak Wako Building 52,138.5 0.3 9.8 0.0 11.9 18.3 7.4 55.7 0.2 0.2 Standard value 52,138.5 0.4 11.3 11.3 11.9 14.9 7.4 121.2 0.6 8.4

Roof covered with solar power generation *Life Cycle CO2 (LCCO2) means the total amount of CO2 emitted from the building from its construction panels made by Honda Engineering stage through disposal. LCCO2 is used as a guideline for energy conservation, and the standard value shows average data for ordinary buildings obtained in 1990.

11 Fundamental Principle and Vision Honda Environment Statement

Under the slogan “Blue Skies for Our Children,” Honda has Looking towards the future, Honda has established its 2010 long been committed to environmental activities. In the 1990s, vision, based on a corporate culture of “freedom and open- we improved our organizational structure step by step and cre- ness, challenge and cooperation.” As mentioned in our vision ated the Honda Environment Statement to clearly define our statement, in order to pass on joys to the next generation, we approach towards environmental issues. Since then, Honda will strengthen our measures to achieve the challenging envir- has been improving its environmental conservation activities, onmental improvement goals that we have established. regarding them as one of our most important corporate Through these activities, our goal is to become a company that themes. society wants to exist.

Honda Environment Statement

As a responsible member of society whose task lies in the preservation of the global environment, the company will make every effort to contribute to human health and the preservation of the global environment in each phase of its corporate activity. Only in this way will we be able to count on a successful future not only for our company, but for the entire world.

We should pursue our daily business interest under the following principles:

1 We will make efforts to recycle materials and conserve resources and energy at every stage of our products’ life cycle from research, design, production and sales, to services and disposal.

2 We will make every effort to minimize and find appropriate methods to dispose of waste and contaminants that are produced through the use of our products, and in every stage of life cycle of these products.

3 As both a member of the company and of society, each associate will focus on the importance of making efforts to preserve human health and the global environment, and will do his or her part to ensure that the company as a whole acts responsibly.

4 We will consider the influence that our corporate activities have on the local environment and society, and endeavor to improve the social standing of the company.

Established and announced in June 1992

12 Fundamental Principle and Vision Assessment of and Our Policy on the Environmental Load Generated by Our Corporate Activities

Honda is aware of its corporate responsibility for the environ- Recognizing this, our approach is to define specific goals mental load generated by all of its corporate activities and the toward which we will work in an effort to resolve the issues that use of its products and embraces an uncompromising commit- have been identified by using our life cycle assessment system ment to reduce this and to conserve the environment. To ach- (LCA), which assesses and analyzes the measurable environ- ieve this, it is essential to establish directions for specifically mental impact as of today. defined issues and set targets for action based on the impacts of our corporate activities and the use of our products on the global environment.

Byproducts from Environmental Domain Business Activities Impacts Major Policies

Global Environmental Problems

● Clean exhaust gas CO2 Product ● Improvement in fuel economy Exhaust gas Development ● Noise reduction Noise ● Global warming Improvement in recyclability Destruction of Purchasing the ozone layer ● Promotion of Green Purchasing CO2 Waste Depletion of Wastewater natural resources Exhaust gas Production Noise ● Promotion of Green Factories Chemical substances

Air pollution CO2 Transportation ● Promotion of Green Logistics Waste Waste

Waste parts ● Promotion of Green Dealers Sales CFC12 and HFC134a (automobiles, motorcycles, Waste and power equipment) Water pollution ● Increasing the recovery, Disposal and End-of-life Soil pollution recycling, and reuse of parts Recycling (3R) products ● Technical support for the proper disposal and recycling of end-of-life products Noise

CO2 Office ● Promotion of Green Ofﬁces Waste

Regional Environmental Problems

13 oocce:Rdcn h edcneti h oeigo iehress Endof1998 Reducingtheleadcontent inthecoveringofwireharnesses Motorcycles: oe qimn euigtela otn ntecvrn fwr anse Endof1998 March2002 15%reductioninenergy consumptionunitby2001(compared withfiscal1990) Production Domain Reducingtheleadcontentincoveringofwireharnesses Power Equipment

Specific Targets to Be Achieved and Results * ExcludingsomepartsfortheS2000 Ta Cleaner ExhaustGasby 2005 Activities Already Successfully Completed Reduction ofSubstancesConcerninAlltheModelsProduced inJapan Recyclability Ratefor New ModelsofAutomobiles andMotorcycles Energy Saving andReductionin Waste intheProduction Domain * TargetinJapan Power Equipment .ThetargetwastohavemostHondapassengervehiclesapprovedas“Ultra”lowemissionbytheMinistryofLand,Infra 1. .Fromthisfiscalyear,theprogressisshowninpercentagetototalsalesunits. 3. 2. TargetinJapan Automobiles Automobiles Automobiles Automobiles Specific Targets Specific Targets Specific Targets Specific Targets Specific Targets Equipment Motorcycles Motorcycles Motorcycles Totally abolishingtheuseofmercuryforall modelsproducedinJapan(excludingsomeparts) January2005 Reducing theleadcontentinallmodelsproduced inJapanto60gramsorless(targetsetbyJAMA) oueo ecr o l h oespoue nJpn— — — Totally abolishingtheuseofcadmiumforall modelsproducedinJapan No useofmercuryforallthemodelsproduced inJapan Reducing theleadcontentinallmodelsproduced inJapan(pursuanttothetargetsetbyJAMA) Up tofiscal2001:Achievingzerolandfilldisposal Up tofiscal2010:30%reductioninenergyunit(comparedwith1990) The followingactivitiesnotfeaturedinthisreporthavealreadybeencompletedsuccessfully. uooie Aoiino F1 nfvro F14 Endof1994 AbolitionofCFC12infavorHFC134a Automobiles October 2003,wearepromotingtheattainmentof“ when itwasannouncedin2001.However,becausetheLowEmissionVehicles’Approval—whichcorrespondsto2005exhaustemiss emissions standards,whicharestricterthanconventionalones. Power Achieved andResults Specific Targets toBe rg Up tofiscal2005:ToreducetheaverageexhaustemissionsofHCandNO (compared withfiscal1995) Up tofiscal2005:Toimprovetheaveragefueleconomybyapproximately30% (compared withfiscal1995) Up tofiscal2005:ToreducethetotalexhaustemissionsofHCapproximately1/3fornewvehicles (compared withfiscal1995)* Up tofiscal2005:Toimprovetheaveragefueleconomybyapproximately25% all weightcategories* Up tofiscal2005:ToachievethenewfuelefficiencystandardsofJapanfor2010 new vehicles(comparedwithfiscal1995)* Up tofiscal2005:ToreducethetotalexhaustemissionsofHCandNOxbyapproximately75%for 14 (compared withfiscal1995) Up tofiscal2005:Toimprovetheaveragefueleconomybyapproximately30% for newproducts(comparedwithfiscal1995) ets toBeAchieved by 2005by Improving CleanExhaustGasEmissionsandFuelEconomy pt icl20 oaheeacenpromneta xed h 00ehuteisosEndof2002 standards ofJapanby50%ormoreforallvehicles Up tofiscal2002:Toachieveacleanperformancethatexceedsthe2000exhaustemissions “ Reducing theleadcontentincoveringofwireharnesses 2005 To haveHondapassengervehiclesapproved ★★★★ Hexavalent chromium Cadmium Hexavalent chromium Cadmium Hexavalent chromium 90% ormore 90% ormorefrom2000onward 2 euigtela otn naltemdl rdcdi aa ooetnho es(agtstb AA May2004 Totally abolishingtheuseofmercuryforallmodelsproducedinJapan(excludingsome parts) Reducing theleadcontentinallmodelsproducedJapantoone-tenthorless(target setbyJAMA) lowemissionvehicle”bytheMinistryofLand,InfrastructureandTransport Discontinuing theuseofsodiumazide To betotallyabolishedbytheendofDecember2006 To betotallyabolishedbytheendofDecember2005 To betotallyabolishedbytheendofDecember2005 To betotallyabolishedbytheendofDecember2005 To betotallyabolishedbytheendofDecember2005* ★★★ 1 (Announced in2001) (aspoue eilssl nJpn End of1998 (Mass-producedvehiclessoldinJapan) lowemissionvehicle”approvaland“ 1 as“ ★★★ 3 lowemissionvehicle”and 2

x byapproximately30% our targetsispresented in“ResultsofEnvironmental Conservation.” to whichweattainedthemattheendoffiscal2004.Ourprogress towards reaching is workingtoward theirattainment.Thefollowingdatagiveourtargetsandthelevel clear results inamore effective manner, targetsand Hondahassetitselfvoluntary To

give further impetustoitsenvironmentalgive further conservationactivitiesandachieve ★★★★ lowemissionvehicle”approvalthatcorrespondtothe2005exhaust rgesMd nFsa 04Reference Progress MadeinFiscal2004 sales Percentage ofvehiclesthatattainedtheobjectivetototalunit In fiscal2004,48typesof21modelsattainedtheobjective. 4 4 3 :80.5% Time completed Achieved by2001 Achieved by2001 (Announced in2005) Reduced by23.6% Improved byapproximately28% Reduced byapproximately38% Improved byapproximately34.2% (Reduced toapproximately26%) Reduced byapproximately74% Improved byapproximately30.9% Achieved forall7categories NO HC: Reducedby86.0% rgesMd nFsa 04Reference Progress MadeinFiscal2004 Reference Progress MadeinFiscal2004 Reference Progress MadeinFiscal2004 x : Reducedby86.0% (Announced in1998) (Announced in1998) End of1998 structure andTransportby2005atthetime [Attained] [Attained] [Attained] .Slightamountscontainedindischarge 4. TargetinJapan 3. Wireharnesses:Anautomobilecontainsa 2. .Sodiumazide:azide’schemical 1. navigation systems headlights andliquidcrystalpanelsfor and facilitatetheirinstallationonvehicles. the wiresbetweenterminalsandconnectors harnesses areusedtosystematicallyrun that formthewiringnetworks.Wire huge numberofwires(approximately1,000) hazard toworkers’health. the atmosphere,whereitformsapotential example, thesodiumazideisreleasedinto that hasnotbeenactivatediscrushed,for automobile thatcontainsanairbagsystem automotive airbagsystems.Whenan ingredient inthegasgeneratorfor symbol isNaN ions standards—wasintroducedin

(Announced in1999) 3 . Itwastheprimary [Attained] [Attained] [Attained] [Attained] [Attained] [Attained] Reference P P P P P P P P P P P P P P P P P age 47 age 47 age 47 age 45 age 45 age 46 age 45 age 36 age 35 age 31 age 30 age 29 age 28 age 25 age 25 age 23 age 23 ★★★★ ★★★ Theshift to4-strokeengineshasbeencompleted,exceptforsomespecialvehicles.Fromnowon, wewillexpandtheuseofFI 1. Notes: AttheAoyama Office,whichisimplementinganenvironmental managementsystem(EMS),environmental viewpointsareintroduced 4. Whilethefiscal2005targetforCO2emission hasincreasedascomparedwiththefiscal 2004 results,thisincreaseistoall 3. The fiscal2005targetforenergyconsumptionunithasincreasedascomparedwith2004results, inconsiderationofth 2.

that takestheenvironment intoconsideration,“environmentally-friendly businessactivities.” already includethe(anticipated) reductioneffectarisingfromthemeasures beingtakentoimprovetransportefficiency. and expandtheirapplicationtomass-produced models. Office Disposal and Recycling Sales Transportation Production Purchasing Product Development and Targets for Fiscal2005 Results for Fiscal2004 of-life vehicles disposal andrecyclingofend- T recycling, andreuseofparts Increasing therecovery, Promotion ofGreenOffice Improved recyclability Dealers/Green Distributors Promotion ofGreen Green Logistics Promotion of Green Factories Promotion of Green Purchasing Promotion of in fueleconomy Improvements Clean exhaust gas echnical support for proper echnical support low emission vehicle:Emissionsare 50%lowerthanthe2005 exhaustemissions standards Major Policies low emission vehicle:Emissionsare 75%lowerthanthe2005 exhaustemissions standards systems tooffices Introduction ofenvironmentalmanagement recycling ofend-of-lifevehicles Technical supportforproperdisposaland reuse business Integration oftheremanufacturingbusinessand Improvement ofrecyclability Motorcycles Au employing new technologies Upgrading efficiencyby Development ofalternativeenergyvehicles equipment Power Zero landfilldisposal Improvements inenergyefficiency management systemstosuppliers Introduction ofenvironmental suppliers’ manufacturingprocess Management ofenvironmentalimpactsin the productsofsuppliers(partsandmaterials) Reduction ofchemicalsubstancescontainedin Improvements inshippingefficiency system fordistributioncompanies Implementation ofenvironmentalmanagement Reducing VOCemissions Reducing waste(by-products) equipment Power Motorcycles Au tomobiles tomobiles vehicles” vehicles” and“ conservation activitiesfordealers Promotion ofenvironmental and dealers management systemstodistributors Introduction ofenvironmental management systemstodealers Introduction ofenvironmental Comply withregulationsinadvance Expansion of“ Shift to4-stroke engines Procedures ★★★ ★★★★ 33.0 g/m VOC emissions/Automobiles: fiscal 1998 65% reductioncomparedwith Internally incineratedwaste: Recyclability rate97% disposal) (Continuance ofzerolandfill business activities environmentally-friendly Full-scale implementationof reused partscanbeapplied Expansion ofmodelsforwhich Improvement inrecyclingrate power products Expansion ofGreenDealersfor Stores Expansion oftheHondaDream lowemission lowemission 1 Reduction ofsuppliers’CO chemical substanceguidelines compliance withHonda’s Promoting changeoverin economy Further improvementsinfuel for newmodels Improvements infueleconomy fuel economybycategory Improvements intheaverage Po Motorcycles Au Po Motorcycles Au low emissionvehicles” Energy unit:21.8%reduction suppliers ISO 14001certificationbyall Promotion oftheacquisition waste Reduction ofsuppliers’landfill emissions we tomobiles we tomobiles emission vehicles”and“ r equipment r equipment completed automobiles) CO CO Expansion of“ of arecyclingsystem Promotion oftheestablishment Dealer-certified stores Expansion oftheBestGreen CO companies management bythefourmajor Joint environmental CO To icl20 agt Fiscal2004Results Fiscal 2004 Targets 2 2 2 2 besuccessively expanded -tons (Transportof emissionvolume:114,900 -tons emissionvolume:481,000 2 ★★★ approved as“ Three additionalmodelswere 4 programs reduce setforfiscal2005inourcommitmenttofurther theenvironmental loadsofourproducts. activities whether“ontarget”ornotwere analyzed,andthefindingswere fedbacktothetargetsand failed toattaintheirgoalsforvariousreasons, includingchangesinconditions.Theoutcomesofall set foralldomainsinthelifecycleofourproducts. Someactivitiesachievedtheirsettargetswhileothers We reduction comparedwithfiscal1998 Internally incineratedwaste:70% Recyclability rate97.6% (Continuance ofzerolandfilldisposal) low continuedoureffortsoftheprevious yearinfiscal2004withacommitmenttoachievingthehightargets ★★★★ automobiles) tons (Transportofcompleted tons 2

previous model improvement comparedwiththe EM45is powergenerator:30% released inJapanfiscal2004 fuel economyforallthemodels 34.2% improvementintheaverage categories economy standardsofJapanfor7 Attainment ofthefiscal2010fuel for households Release ofthecogenerationsystem Starting leasingoffuelcellvehicles fiscal 2004 Attained forall9modelsreleasedin attained by97.2%ofthemodels fiscal 2004.Shiftto4-strokeengines: Attained forall7modelsreleasedin vehicles” (21modelsintotal) vehicles” and“

nryui:2.%rdcin23.1%reduction Energy unit:23.6%reduction 2000 (regardingaffiliatedcompanies) 79% reductionascomparedwithfiscal affiliated companies). compared withthatinfiscal2000(for Carbon intensitywasreduced4.4% now promotedforchromium(VI). and leadcompounds.Changeoveris Changeover wascompletedforlead 32.8 g/m VOC emissions/Automobiles: 2 2 emissionvolume:109,555CO emissionvolume:468,000CO CO CO automobiles andmotorcycles Launch ofarecyclingsystemfor parts canbeappliedincreasedto13 Number ofmodelsforwhichreused design waschangedinfiscal2004 newly releasedormodelswhose More than95%achievedformodels design waschangedinfiscal2004 newly releasedormodelswhose More than90%achievedformodels 1 dealer Certification acquiredby3storesof Honda Dreamstores Launch of30environmentallyfriendly certification by2,524stores Acquisition oftheBestGreenDealer companies meetings withmajortransportation Regular organizationofexchange 2 ★★★ ★★★★ wfrtepandgot nsimns hstre iuede, however, ow fortheplannedgrowthinshipments.This target figuredoes, lowemission e productionenvironmentandtheadditionof new businessoperations. lowemission

technology tomoremodelsandwillnewlydevelop othertechnologies

Acquisition by355companies(80%) Being promotedbyeachdivision/office to dailybusinessactivities. Wecallthedevelopmentofbusiness 2 2 - - Attainment suppliers ISO 14001certificationbyall Promotion oftheacquisition waste Reduction insuppliers’landfill emissions Level of “ emission vehicles”and fiscal 1998 85% reductioncomparedwith Internally incineratedwaste: Recyclability rate98% disposal) (Continuance ofzerolandfill Stores Expansion ofHondaDream Green Dealer-certifiedstores Further expansionoftheBest completed automobiles) vehicles” CO system bythefourmaincompanies of theenvironmentalmanagement Continuance ofjointimplementation Reduction insuppliers’CO guidelines mustbepromoted Honda’s chemicalsubstance Changeover inaccordancewith economy Further improvementsinfuel Future extensions application ofFItechnology engines fornewmodels,expanded Continuous shiftto4-stroke ★★★★ Fiscal 2005 Targets CO 460,000 CO 2 2 -tons emissionvolume:115,332 2 3 lowemission (transportof 2 -tons ★★★ 2 32.5 g/m VOC emissions/Automobiles: low Expansion of“ 2

Reference 15 P P P P P P P P P P P P P P P P P P P P P P P P P P P P P age 54 age 50 age 48 age 47 age 46 age 45 age 43 age 43 age 42 age 39 age 39 age 37 age 36 age 36 age 36 age 35 age 35 age 33 age 33 age 33 age 33 age 31 age 29 age 25 age 31 age 27 age 30 age 28 age 23 impacts byoffices reduction inenvironmental Cooperative promotionof power products Expansion ofGreenDealersfor motorcycles system forautomobilesand Generalization ofarecycling reused partscanbeapplied Expansion ofmodelsforwhich Expansion ofrecyclingparts Improvement ofrecyclability

Specific Targets to Be Achieved and Results Environmental Management

To give concrete meaning to the Honda Environment Statement, which specifies the general direction of the Company’s environmental conservation activities, Honda has made efforts to establish and expand its organization with respect to the environment. For the effective implementation of environmental conservation activities, we have established an environmental management system as described below.

General Policy Organization

Honda’s environmental action plans are established by individ- In December 1991, Honda created its Environmental Committee ual departments based on the medium-term policies developed to play a central role in addressing environmental issues in by the Executive Committee. These plans are then discussed Japan. Subsequently, the organizational framework was and approved by the Environmental Committee. Next, the indi- extended to North America, South America, Europe, Asia/ vidual responsible departments involved push ahead with their Oceania and China. In March 1995, the World Environmental commitment in accordance with these plans. The results are Committee was set up to frame and promote global plans for scrutinized and evaluated by the Environmental Committee and our commitment. fed back to the next targets and plans to complete the PDCA* In addition, we have created a system to effectively promote cycle at the regional level (Japan, North America, South Ameri- our efforts on trans-organizational themes. In this context, we ca, Europe, Asia/Oceania, and China). Global issues that are initiated the Green Factory Project1 in 1997 and the LCA Project shared worldwide are reported to the World Environmental in 2000. For the Green Factory Project, we changed its name to Committee and fed back to the Mid-Term Policy Statement. the Green Factory Promotion Center2 in 2004 as an organization The hallmark of Honda’s activities is that planning and to accelerate environmental activities in the production domain execution are not left to specially appointed staff, but rather the and to promote the Green Factory Plan. individual associates in all departments are involved 1. The Green Factory Project was an organization to promote the Green Factory Plan, with the goal of promoting a new factory concept for a recycling-based themselves. This is what Honda means when it says, “All society. Led by this organization, solutions to issues such as energy-saving members of the Honda organization are individually engaged in and waste reduction were deployed to our factories throughout the world. a positive commitment to environmental issues as part of their 2. The Green Factory Promotion Center oversees environmental activities in the production domain and comprehensively manages and coordinates the en- own duties.” vironmental measures taken by Honda factories. The Center also serves as a secretariat for environmental audits mutually conducted by Honda factories and checks the individual progress of these factories in the administration of Environmental Conservation Activities Based on the PDCA Cycle their environmental management system from a company-wide perspective.

PDCA PDCA Execution PDCA

World Environmental Regional Environmental Individual Committee Committee Departments

PDCA PDCA PDCA

* PDCA stands for Plan, Do, Check, Act.

Organization for Global Environmental Conservation Act.

World Environmental Committee

Environment and Safety Functional Operations/ Head of Business Operations Head of Regional Operations Planning Ofﬁce R&D/Center/Project

Automobile operations Regional operations (Japan) Purchasing Operations Japan Environmental Committee Business Support Operations Regional operations (North America) Motorcycle operations North America Environmental Committee Business Management Operations

Regional operations (South America) Production Operations Power equipment operations South America Environmental Committee Green Factory Promotion Center Regional operations (Europe, the Middle East, the Near East, and Africa) Service parts operations Europe Environmental Committee Honda R&D Co., Ltd. Automobiles/Motorcycles/Power equipment

Regional operations (Asia/Oceania) Honda Engineering Co., Ltd. Asia/Oceania Environmental Committee

Regional operations (China) LCA Project China Environmental Committee

16 Role of-life products,recycling. andparts environmentally friendlierproducts, theproper disposalofend- oftheexpansion meet current marketneedsinterms automobiles, motorcycles,isto powerequipment,andparts, The missionoftheSalesDomain,whichconsists entire lifecycleofHonda’s products onanongoingbasis. maintain andimprove itsenvironmental activitiestocoverthe Throughdepartments. theseactivities,thecommitteetriesto accordance withananalysisofthesituationindividual compatible targets.Italsoestablishesnewpoliciesin andestablishesoverall PDCA cycleofindividualdepartments activities thatareinJapan.Itreviews undertaken theannual enhance thelevelofexecutionenvironmental conservation The objectiveoftheJapanEnvironmental Committeeisto annual reviews oftheirexecutionandimplementation. committee decidesenvironmental policiesandconducts our commitmentsinaccordancepolicy.This withourmid-term The World Environmental Committeeconsidersglobalplansfor Sales Domain Japan Environmental Committee W Sales Domain orld Environmental Committee Organization forDomesticEnvironmentalConservationActivities J Honda Motorcycle Po A apan Co., Ltd. Motorcycle sales Pa utomobile sales w r er equipment ts business sales Operations Domain F actory andOfﬁce actory Japan EnvironmentalCommittee Head Ofﬁce F actories R&D Honda Engineering SayamaHonda Engineering Asaka HigashiR&DCenter Hamamatsu Factory Ku Takasu ProvingCenter Tochigi ProvingCenter Promotion Center Suzuka Factory Secretariat Saitama Factory A Honda R&DCo.,Ltd. T Honda Engineering Honda Engineering Green Factory mamoto Factory Tochigi R&DCenter Model Center ochigi Factory utomobile New Asaka R&DCenter Wako R&DCenter Co., Ltd. There are projects andcentersoncross-divisional themes. environm the percentagewithlessimpacton ofmaterialsandparts Purchasing Operationpromotes green purchasing toincrease onHonda’sdisseminates information activitiestosociety.The tal training,andtheCorporateCommunicationDivision,which Resources Division,whichprovides associateswithenvironmen- environmentally friendlyvehicleswithintheCompany, theHuman Division, whichpromotes suchmeasures astheexpandinguseof and socialactivitiesingeneral.ItcomprisestheAdministration onmental issuesfortheentire rangeofPR,environmental training, OperationshavetheroleThe BusinessSupport ofhandlingenvir- * to factoriesandpromoting environmental plans. Center isinchargeofcommunicatingthecompanywidepolicies mental Administrators’Committee.TheGreenPromotion Factory and Office OperationsDomainthrough theGeneralEnviron- andcarriesoutpolicymeasurestor* determines fortheFactory our factoriesandoffices. Thegeneralenvironmental administra- domain isresponsible fordealingwithenvironmental issuesat organizedwithinourfactoriesandoffices.departments This andOfficeThe Factory OperationsDomaincomprisesthe General Environmental system ofthefactory/office. They alsohaveamanagerialresponsibility fortheenvironmental management ties attheirfactory/officeandfortherunningofenvironmental organization. General environmental administratorsare responsible forenvironmental activi- Functional Operations/Center/Project F Environmental Administrator Administrators’ actory andOfficeOperationsDomain actory Committee General ent withinthetotalgoodspurchased bytheCompany. Operations/Center/Project Business Support LCA Project Purchasing Operations Operations Functional Environmental Management Corporate Communication Corporate Human Resources Administration Division Division Division 17

Environmental Management Environmental Management

Environmental Management by Honda’s Business Sites (ISO 14001 and EMAS)

Concurrently with the building of the environmental manage- Business Sites that Acquired the ISO 14001 Certiﬁcation in Fiscal 2004

ment system for Honda as a whole, each of the Company’s Name of Business Site Location Details of Business Date of Certiﬁcation

business sites are introducing environmental management Honda Automoveis do Brasil Ltda. BrazilAutomobiles March 2005 systems to continuously improve their ability to protect the envi- P. T.Honda Prospect Motor IndonesiaAutomobile parts January 2005 ronment and to more thoroughly control substances with environmental impacts. Honda has actively engaged in acquiring ISO 14001 certif- Environmental Audits ication, the international standard for environmental manage- Environmental conservation activities at domestic sites are carried ment systems, primarily for its production operations. out in accordance with the environmental management program In Japan, all of Honda’s production plants acquired certifi- based on annual targets and the Mid-Term Environmental Plan, cation in fiscal 1997. Also as a part of the Green Office promo- determined by the General Environmental Administrators’ Com- tion, the Head Office building in Aoyama acquired ISO 14001 mittee. To confirm that the environmental management system is certification in 1999 as did six other regional offices in 2001. appropriately implemented through these activities and continu- We are also advancing the work to acquire certification for ously improved, in-house environmental audits and surveillance our major production plants in North America, South America, inspections by outside certification organizations are carried out in Europe, and Asia/Oceania and China. In Europe, we are pro- our factories and offices. moting the acquisition of the EU’s Eco Management and Audit In fiscal 2004, in-house environmental audits and renew- Scheme (EMAS). al/surveillance inspections by outside certification organizations Honda’s ISO 14001-certified business sites are as shown were conducted at our sites. The in-house environmental audits below, totaling 46 sites as of the end of fiscal 2004. There are led to 4 citations of nonconformance and 442 recommendations currently three EMAS-certified business sites in Europe. and suggestions. The outside inspections led to 2 minor recom- Please refer to the upper right table for business sites that mendations and 55 findings. We promptly responded to these acquired ISO 14001 and EMAS certification in fiscal 2004. recommendations and comments. Further, the Mutual Visit Envi- We will further promote the establishment of ISO 14001- ronmental Audit* is carried out in factories to confirm the certified (and EMAS-certified in Europe) environmental compliance and the level of progress made in achieving their management systems within the Honda Group and encourage targets of environmental conservation activities based on the certified business sites to continue to retain their certification. Company’s policy. The Mutual Visit Environmental Audit is Through these measures, we will promote the PDCA cycle at conducted by engineers and auditors from other factories in our business sites as continuous measures to reduce the envi- accordance with instructions given by the General Environ- ronmental impacts of our business. mental Administrators’ Committee. In fiscal 2004, the Mutual Environmental Audit was conducted from June to August. * The Mutual Visit Environmental Audit is implemented among factories. Peer audits are conducted between different non-production sites and between different divisions within the same non-production site.

■Environmental Audit System ■ ISO 14001/EMAS-Certified Business Sites as of Mutual Visit Environmental Audit Team General Environmental • Auditors and environmental engineers the End of Fiscal 2004 Administrators’ from other factories Committee Auditing • Secretariat of the General Environmental ● Europe ● Japan instruction Administrators’ Committee ISO 14001-certified: 8 sites ISO 14001-certified: 9 sites Medium-Term Environmental Audits on compliance with EMAS-certified: 3 sites Plan and Annual Targets legal regulations and on ● North America progress in target achievement ISO 14001-certified: 10 sites Each Factory

Environmental Management Program Review

● South America ● ISO 14001-certiﬁed: 2 sites China Internal environmental ISO 14001-certified: 4 sites Implementation, operation audit and improvement

Surveillance inspection ● Asia and Oceania (Auditing the level of application of the ISO 14001-certiﬁed: External certiﬁcation Environmental Management System) 13 sites organization

18 its efforts to encourage voluntary activities intheworkplace. its effortstoencourage voluntary energy andresource conservation andrecyclingof aspart of theirbusinessoperations. andconsider theenvironmentformation duringtheconduct they enterthecompanysothat theycanreceive relevant in- tinuously provided toassociatesina timely mannerafter the manufacturingprocess. Thetrainingprograms are con- motorcycles aswelltheenvironmental measures usedin sonally experiencethemanufacturingofautomobilesand the company, newassociatesvisitHonda’s factoriestoper- policy towards theenvironment. Immediatelyafterentering to helpthemdeepentheirunderstandingofHonda’s basic the environmentoftheirownworktasks. asanintegralpart be abletomakeprogress inthecompany’s commitment to ates tohaveafullrecognition oftheirownresponsibilities and curriculum, andtheseprograms are provided foritsassoci- Environmental trainingprograms areofHonda’s part training ● Environmental Training ■ ● objectives: environmental conservationactivitiesbasedonthefollowing Honda isintheprocessfor ofidentifyingthecostsnecessary Environmental Accounting ● ● ● ● 1) Thescopeofthepresent calculationsisasfollows:

Environmental damagecosts Social activitycosts Research anddevelopment costs Management activitycosts Upstream/downstream costs areas costs Business Costs andEffects ofEnvironmental Conservation Activities in Fiscal2004 T All domainsinthelifecycleofHondaproducts Domains includedintheaccounts: Honda EngineeringCo.,Ltd. Honda MotorCo.,Ltd.,R&DCo,Ltd, Companies includedintheaccounts: April 1,2004,through March 31,2005 Stratified Environmental Training Programs Environmental accountingoffers indicesforcorporateevalua- Environmental accountingistoprovide amanagementtoolin tion andservesasadatasource fordisclosure tothepublic. the environmental area. argeted period: Honda isaggressively promoting activitiesfocusing on For newassociates,atrainingprogram isalsoprovided conservation costs conservation Global environmental Resources cyclingcosts P Category ollution prevention costs • • • • • • • • • • • • • • • • •

environmental conservation Prevention andozone ofglobalwarming layer depletion,andother Restoration ofpolluted soil Organization inchargeofenvironmental measures conservation andmeasurementofenvironmentalMonitoring impacts management system ofanenvironmental Building, operation and acquisitionofthecertification Provision ofenvironmental training toemployees Disposal, reduction,recyclingofwaste Prevention ofair, water andsoilpollution,etc. Disclosure ofenvironment-related information activities conservation toorganizationsengagedinenvironmental Donation andsupport andinformation tolocalcitizens Provision ofsupport ofbeautifulscenery and thepreservation Environmental improvement measuresincludingnatureprotection,greening throughout thelife cycleofproducts, etc. Research, development, andplanningfor reducingenvironmental impacts Research anddevelopment ofproductscontributing toenvironmental conservation Member fees andotherchargespaidtotrade organizations manufactured andsold Collection, recycling,reuseandproperdisposaloftheproducts Green purchasing(balance) Details ofMajorActivities, etc. 4) This Report publishesthe specificresults ThisReport achievedinoureffortsforeachfiscalyear. Theaggregate 4) Forthetabulation,wereferred toreference materialsonenvironmental accounting,including the 3) Thepublishedfigures includesomethathavebeenestimatedandgivenascombinedfigures 2) amount lessdepreciation costs. total ofourenvironmental conservationcostsareofthemonetary quotedonacash-flowbasis interms oftheEnvironmentguidelines andguidebookspublishedbytheMinistry ofJapan. because ofthedifficultydifferential ofdetermining amounts. to theenforcement oftheEnd-of-LifeVehicle RecyclingLaw. stream/downstream costsincreased duetoresponses made the paintingprocess intheproduction domainandup- tion costsincreased duetotheuseofwater-based paintsfor costs incurred bytheCompanyinfiscal2004. designated works, and internal environmentaldesignated works, andinternal auditors. general personnel, operatorswhoare engagedinspecially tal management systemandholdsregular trainingevents for training programs conducted onthebasisofenvironmen- and office factory developsplansforeducationand Every ● business andpersonallives. untarily actinanenvironmentally friendlymannerintheir ment through thesemeasures andencouragesthemtovol- global, Hondamakesassociatesmore aware oftheenviron- factories andoffices. promoted companywide andintroduced inotherHonda Green Conferences. Inaddition,theseactivitiesare Honda associatesallovertheworld)andat (presentation meetingsattendedbyrepresentatives of as goodexamplesandpresented atNHCircle Conventions Activities conductedonsuccessfulthemesare introduced Environmental Training Basedonthe Environmental Management System Compared withtheprevious fiscalyear, pollutionpreven- The followingtableshowstheenvironmental conservation Because environmental problems are becomingmore Investment Amount 7,700 1,037 266 692 13 0 0 0 129,420 Expense Amount 1,087 2,427 1,238 2,055 499 343 0.7

• • • ■ Total CO T incinerated Amount ofinternally target Reduced by 0.2g/m with theprevious fiscalyear Reduced by 1,400tonscompared w target value Reduced by 13,000tonsfromthe

otal VOC emission: 32.8g/m Environmental Management Production domain aste: 4,400tons 2

emission: 468,000tons Effects (Unit: Millionsofyen) → → →

2 fromthe See Page 37. See Page 36. See Page 35. 2 19

Environmental Management Environmental Management

Promotion of Life Cycle Assessment (LCA)

Honda established the Honda LCA Data System in March ■CO2 Emissions Generated by Honda’s Business Activities 2002. Using this system, we set annual CO2 emission re- Index of number of Index of total CO2 emission products manufactured duction targets for each department using CO2 emissions 120 (%) generated by that department in fiscal 2000 as a baseline 100

and promote the PDCA cycle from a quantitative aspect to 80 reduce environmental impact. 60 In fiscal 2004, each domestic department (manufacturing, purchase, sales/service, and logistics) used the 40

Honda LCA Data System to collect data and calculate CO2 20

emissions generated by business operations. As a result, 0 compared with fiscal 2003, the number of products manu- 2000 2001 2002 2003 2004 (FY) factured in fiscal 2004 increased by approximately 3% (with the number of products manufactured in fiscal 2000 ■CO2 Emissions per Unit Sales in Honda’s Business Operations set at 100), while CO2 emissions were reduced by approxi- Index of CO2 emissions mately 1% due to the efforts of our departments in reducing 100 (%) per unit sales environmental impact. 80 These results demonstrate that the departments have made improvements in their environmental activities. In ad- 60 dition, carbon intensity per sales revenue has improved 40 year after year since fiscal 2000. In the future, we will improve the efficiency of data col- 20 lection and the accuracy of the collected data to steadily 0 reduce our environmental impact. 2000 2001 2002 2003 2004 (FY)

In fiscal 2005, we plan to expand the use of our life cy- Notes: cle assessment system to quantify our environmental im- 1. CO2 emissions are computed using a formula unique to Honda. 2. CO2 emissions per unit sales are indicated as ton-CO2 per pact in other regions and to conduct activities to reduce ¥100 million. such impact. 3. The figures are shown as indices (fiscal 2000 = 100). In addition, we will improve the level of our data system for product models to achieve higher efficiency of our product LCA and expand the use of this system to currently produced models and models under development.

20 Environmental RiskManagement fined as“compliancewithlaws,companyrules,andsocial system.In theguidelines,complianceisde- governance of its efforts toimproveGuidelines aspart itscorporate re standards, whichare more stringentthannationalorlocal has established,andstrictlyabidesby, itsownvoluntary Management System.Forallenvironmental issues,Honda provement activitiesinaccordance withtheEnvironmental All sitesandoffices ofHondapromote environmental im- cies infiscal2004. procedures. There were noenvironment-related emergen- prove competenceinaccidentandemergencydefense emergency drillsandtrainingeventstoacquire andim- prevent ormitigatepollution.Dailyactivitiesincluderegular ments haveclearlydefinedprocedures andprioritiesto tal pollution,individualfactoriesandtheirdepart- For accidentsoremergenciesthatmaycauseenvironmen- onment-related product recall infiscal2004. statutes ofitsQualityCommittee.We didnothaveanenvir- We ● ● ● ■ Ofﬁce Operations Compliance withLegalActsandRegulations Action inEmergencies Product Recalls gulations. Head ofFactory Environmental

Emergency ActionRoute Administrator In April2003,HondaestablishedConduct have conductedproduct recalls inaccordance withthe General On-site checking instructions Giving Request foraction Reporting Management Contractors Division Fa cility Occurrence of Discoverer Problem Communicating Communication Communicating Emergency Network Communicating On-site checking Communicating Safety &Disaster- Inside/Outside prevention Center Organizations On holidays Concerned At night / and totherelevant administrativeauthorities. steps takentothosewhohadregistered thecomplaints thenreported thesituationsand problems. Thefactory asked allrelated personneltopaydueattentionthe promptly respondedThe factory tothese complaintsand such asplantingtrees around thepremises ofthefactory. environment,noise, andforimprovements inthefactory coming inandoutofthefactory, parkedcarsandtraffic cluding thoserelated totraffic jamscausedbyvehicles in request forimprovements tothetraffic environment, in- in theirdailyoperations.Thecomplaintswere mainlymade against Hondainfiscal2004. a director incharge. compliance andriskmanagementundertheleadershipof theirdutiestoward organizationperforms der whichevery pliance Officer. Hondaisstrengthening theframeworkun- a director inchargeofcompliancewasnominatedasCom- measurements, recording Atthesametime, andreporting.” of naturalresources andrecycling,” and“legallyrequired “proper processing ofwasteandpollutants,””efficient use and environmentalnorms,” conservationisdefinedasthe can takepride. effort tobecomeacompanyinwhichlocalcommunities the confidenceoflocalcommunities.We willcontinueour onmental issues.Ourgoalistobeacompanythatenjoys tivities andcontinuouslyadoptsmeasures toresolve envir- communities,” Hondaactivelypromotes ac- Green Factory conceptof“cooperationwithlocal Based ontheimportant ● site. re premises ofourfactoriesandwillvoluntarilyannouncethe beyond theboundariesofpremises. substances usedatthefactorieshaveneverbeenreleased groundwater. Asaresult, thatmeasured itwasconfirmed sites,whichare used tomonitorthesoiland factory creased thenumberofobservationwellsestablishedatour Measures for OtherIssues sults inourenvironmental annualreports andonourWeb The Saitama Factory received fivecomplaintsbyphone The SaitamaFactory There were noenvironment-related lawsuitsfiled To Also, wewillcontinuetomonitorgroundwater inthe

strengthen themonitoringofgroundwater, wein- Environmental Management 21

Environmental Management Results of Environmental Conservation Activities in Fiscal 2004

Production Domain Purchasing Domain

Transportation Product Domain Product Development Development Domain Domain Sales Domain Disposal and Recycling (3R) Domain

Office Domain

Continuously Making Progress in Technologies, Pursuing a Higher Goal for Future Generations

Honda has actively taken environmental actions focusing on the product use stage because the environmental impact of its products can be reduced the most in that stage of their life cycle. In 1999, Honda announced specific targets to be achieved by 2005 with the improvement of cleaner exhaust gas and higher fuel economy for its automobiles, motorcycles, and power equipment. Honda is now in the process of working towards achieving these targets. Honda is committed to building a better relationship between human beings, the environment and its products by upholding strict voluntary targets for different environmental themes, including

cleaner exhaust gas, higher fuel efficiency (reduction of CO2 emissions), and practical use of alternative energy.

Major Activities in the Product Development Domain

Reduction of air pollutants Cleaner exhaust gas

Reduction of CO2 emissions Higher fuel efficiency Improvement in environmental performance Practical use of alternative energy Alternative energy

Reduction of noise Reduction of noise

22 Product Development Domain Automobiles

Besides achieving cleaner exhaust gas and improved fuel Automobiles economy for Honda automobiles, efforts are under way to develop products using alternative forms of energy.

●To increase the number of vehicles ●Achieved compliance of all vehicles with 2005 exhaust emissions regulations approved by the Ministry of Land, Main Main ★★★ Another 10 types of 3 models approved as “★★★ Infrastructure and Transport as “ low achievements targets for emission vehicles” and “★★★★ low low emission vehicles” and “★★★★ low emission in fiscal fiscal 2004 emission vehicles” vehicles”(48 types of 21 models approved in total) 2004 in Japan ● ●Attained the fuel economy standards for fiscal 2010 To improve average fuel economy for all in Japan vehicle weight categories as defined in the for all the categories fiscal 2010 fuel economy standards

* In order to give greater impetus to the use of low emission vehicles, the Ministry of Land, Infrastructure and Transport of Japan has instituted this approval system. Low emission vehicles with HC and Nox emission levels below the 2005 exhaust emission standards are classified into two categories for approval. 75% lower than the 2005 exhaust emission standards: “★★★★ low emission vehicles” 50% lower than the 2005 exhaust emission standards: “★★★ low emission vehicles” Achieving Cleaner Exhaust Gas

Progress towards Targets to Be Achieved Since fiscal 2003, Honda had been promoting the earlier by 2005 with Cleaner Exhaust Gas compliance of all its models with the 2005 exhaust emissions standards and made all the models comply with the Honda has given high priority to cleaner exhaust gas in standards. Honda is promoting the approval of its models gasoline-powered vehicles. We are working to reduce such as “★★★ low emission vehicles” and “★★★★ low emis- emissions such as carbon monoxide (CO), hydrocarbons (HC), sion vehicles.” and nitrogen oxides (NOx) contained in exhaust emissions. ●As of the end of March 2005, 27 types of 13 models were approved as “★★★ low emission vehicles and 21 types Targets of 11 models were approved as “★★★★ low emission ●Up to fiscal 2005: To reduce the total exhaust emissions vehicles.” of HC and NOx by approximately 75% for new vehicles (compared with fiscal 1995)1 ■Number of Types that Were Approved as a Honda LEV ●Up to fiscal 2005: To have almost all Honda passenger or “Excellent”/“Ultra” Low Emission Vehicle or vehicles approved as “★★★ low emission vehicles” Complied with the 2005 Exhaust Emissions Standards (Light Trucks Are Excluded) and “★★★★ low emission vehicles” Honda LEV1 Progress “Excellent” low emission vehicle (emissions are 50% lower than the 2000 exhaust emissions standards)2 “Ultra” low emission vehicle (emissions are 75% lower than the 2000 exhaust emissions standards)2 In fiscal 2004, the target of reducing the total exhaust emis- Complies with the 2005 exhaust emissions regulations sions of HC and NOx by 75% for new automobiles (com- “★★★ low emission vehicle” (emissions are 50% lower than the 2005 exhaust emissions standards) pared with fiscal 1995) was achieved, as in fiscal 2003. “★★★★ low emission vehicle” (emissions are 75% lower than the 2005 exhaust emissions standards) ●Total HC emission level: Reduced approx. 86.0% (number of types) 80 (compared with 1995)2 ●Total NOx emission level: Reduced approx. 86.0% 70 (compared with 1995)2 60 26 32 1. Target applicable to Japan 2. Results in Japan (excluding trucks) 50 39 40

64 Conservation Activities in Fiscal 2004 Results of Environmental ■Transition in Total HC and NO Emissions in Japan 4 27 x 29 55 (FY 1995: 100) 30 26 (%) HC NOx 20 33 100 30 10 21 12 80 1 4 7 0 19992000 2001 2002 2003 2004 (FY) 60 Target level for 2005 Note: Because a new low emission vehicle approval scheme under the 40 2005 exhaust emissions standards was introduced on October 1, 2003, the numbers approved under the 2000 exhaust emissions standards and under the 2005 exhaust emissions standards are 20 both indicated.

0 1. Honda LEV: All vehicles equipped with low emission vehicle (LEV) en- 95 00 01 0203 04 95 00 01 02 03 04 (FY) gines developed by Honda in 1996 and based on the Company’s own Note: In fiscal 2003, when a new low emission vehicle approval scheme un- standards. der the 2005 exhaust emissions standards was introduced, total emis- 2. In order to give greater impetus to the use of low emission vehicles, the sions of HC and NOx of those models subject to the 2000 exhaust Ministry of Land, Infrastructure and Transport of Japan has instituted emissions standards and older models were computed and totaled us- this approval system. Low emission vehicles with HC and NOx emis- ing the 10-15 mode, and total emissions of HC and NOx of those mod- sion levels below the 2000 exhaust emissions standards are classed els subject to the 2005 exhaust emissions standards were computed into three categories for approval. and totaled using the new test mode for the 2005 regulations. For those 75% lower than the standards: “Ultra” models subject to the 2005 exhaust emissions standards, total emis- 50% lower than the standards: “Excellent” sions of HC are computed in non-methane hydrocarbon (NMHC). 25% lower than the standards: “Good”

Note: ★★★ low emission vehicle... emissions are 50% lower than the 2005 exhaust emissions standards ★★★★ low emission vehicle...emissions are 75% lower than the 2005 exhaust emissions standards 23 Product Development Domain Automobiles

Models/Types and Sales Results for Honda Improvement in the Emission LEVs and Vehicles Approved as Low 2 Performance of Honda’s Main Models Emission Vehicles by the Ministry of Land, 1 ●Legend Infrastructure and Transport of Japan In October 2004, Honda launched the all-new Legend as Honda has endeavored to expand the number of its models the top-of-the-line-up sedan. While achieving a maximum that meet the 2005 exhaust emissions standards and are output of 300 horsepower generated generously by its V6 approved by the Ministry of Land, Infrastructure and Trans- 3.5-R engine, the Legend was approved as a “★★★★ port as low emission vehicles. For the three models intro- low emission vehicle” by the Ministry of Land, Infrastructure duced in fiscal 2004 (the Elysion, the Legend, and the and Transport. Edix), all types of the Elysion and Legend models and Its porous atomizing fuel injector and electric EGR sys- some types of the Edix model were approved as “★★★★ tem contribute to higher combustion efficiency and lead to low emission vehicles.” Also, some types of the Edix model cleaner exhaust gas. Also, by adopting an integrated cylin- were approved as “★★★ low emission vehicles.” der head and exhaust manifold as well as a catalytic con- Unit sales of Honda models that meet the 2005 exhaust verter attached directly below the cylinder head, the heat emissions standards of the Ministry of Land, Infrastructure loss of the combustion gas has been reduced, and the cat- and Transport and are approved as low emission vehicles alytic converter can be promptly activated. Also, thanks to came to 583,871 in fiscal 2004, accounting for 81.4% of the precise control of the air-fuel ratio, the cleaning perfor- Honda’s total domestic unit sales (80.5% of the unit sales of mance of the catalytic converter can be maximized even passenger cars). immediately after a cold start, thereby achieving an extremely clean performance. ■Low Emission Vehicles Marketed in Fiscal 2004 (Models Approved as “★★★★” or “★★★” Low Emission ■Major Technologies Used in V6 3.5-R VTEC Engines Vehicles under the 2005 Exhaust Emissions Regulations) Mounted in the Legend Approved as “★★★★ low Approved as “★★★ low emission vehicles” (75% lower than emission vehicles” (50% lower than Porous atomizing fuel injector the 2005 standards) 3 models the 2005 standards) 1 model Elysion Electric EGR system Edix (FF 20X) Edix (FF 17 X) Legend

ECU ■Transition in the Sales Results in Japan Honda LEV “Excellent” low emission vehicle (emissions are 50% lower than the 2000 exhaust emissions standards) Air-fuel ratio control system “Ultra” low emission vehicle (emissions are 75% lower than the 2000 exhaust emissions standards) “★★★ low emission vehicle” (emissions are 50% lower than the 2005 exhaust emissions standards) ★★★★ “ low emission vehicle” (emissions are 75% lower than the 2005 exhaust emissions standards) O2 sensor

(units) Exhaust manifold 1,000,000 Integrated cylinder head 900,000 94,270 52,493 Linear air-fuel ratio sensor 800,000 700,000 Three-way catalyst under the floor High-cell, directly-below type 251,711 three-way catalyst 600,000 360,814 500,000 390,731 792,738 335,938 400,000 756,366 328,860 300,000

200,000 129,382 215,773 67,634 247,933 100,000 5,256 19,005 54,687 0 1998 1999 2000 2001 2002 2003 2004 (FY) Notes: 1. Figures quoted for the years prior to the establishment of the Low Emission Vehicles’ Approval System of Japan (FY 1998–1999) refer to Honda LEV conforming vehicles. 2. For fiscal 2004, only the sales of vehicles that meet the 2005 exhaust emissions standards and are approved as low emission vehicles are shown.

24 Results of Environmental Conservation Activities in Fiscal 2004

Improvement in Fuel Economy Types Conforming to 2010 Fuel Economy 1 Standards and Shipment Results* Progress towards Targets to Be Achieved by 2005 In accordance with an amendment to the Energy Saving Honda has introduced various technologies for improving Law of Japan, the 2010 Fuel Economy Standards were announced. Honda is making efforts to increase the types that fuel economy as a way of reducing CO2 emissions, which are responsible for global warming. exceed the values. As a result, the Elysion and the Edix*, which were launched Of the models sold in fiscal 2004, two models (eight in fiscal 2004, met the fuel economy standards for fiscal types) newly met the 2010 Fuel Economy Standards. As a 2010. result, a total of 27 models (65 types) currently meet the standards. Also, two models (four types) were newly certi- * Excluding some types fied as vehicles that meet the “2010 Fuel Economy Stan- dards + 5%” requirement, and a total of 21 models (48 Targets types) are now certified as such vehicles. ●Up to fiscal 2005: To achieve the new 2010 fuel efficiency The number of vehicles shipped in fiscal 2004 that standards of Japan for all weight categories meet these standards was 669,691, approximately 90% of ●Up to fiscal 2005: To improve the average fuel economy all Honda vehicles shipped within Japan. by approximately 25% (compared with fiscal 1995) * Shipment results reported to the Ministry of Land, Infrastructure and Transport and the Ministry of Economy, Trade and Industry * Average fuel economy in Japan (for gasoline-powered passenger vehicles) Models Types Meeting the Standards Progress Elysion All types ●The 2010 Fuel Economy Standards of Japan were at- Edix All types, excluding 4WDs with a displacement of 2.0R tained in all weight categories. In fiscal 2004, we were : All types meet the 2010 Fuel Economy Standards + 5% able to achieve the following progress. : Some types meet the 2010 Fuel Economy Standards + 5%

■Transition in Average Fuel Economy by Category in ■Transition in the Number of Types Meeting Fiscal 2010 Fuel Accordance with the 2010 Fuel Economy Standards of Japan Economy Standards Meeting fiscal 2010 fuel economy standards (km/R ) (number of types) 25 Meeting 2010 Fuel Economy Standards + 5% 70 Category by 65 car weight 20 20.52 60 19.01 57 ●18.8 ●703–827 kg 17 ● 17.9 50 17.13 ●828–1,015 kg ●16.0 50 15 17 ●1,016–1,265 kg 13.97 ●13.0 40 ●1,266–1,515 kg 40 11.58 ● 10 10.5 ●1,516–1,765 kg 9.87 29 ●8.9 ● 30 ●7.8 1,766–2,015 kg 26 7.99 48 ●2,016–2,265 kg 5 20 40 2000 2001 2002 2003 2004 (FY) Standard value 10 ●Average fuel economy was improved by approximately Conservation Activities in Fiscal 2004 Results of Environmental 0 30.9% (compared with fiscal 1995) and achieved the ob- 1995 2000 2001 2002 2003 2004 (FY) jective for 2005 (improvement in average fuel economy by approximately 25%) every year since fiscal 2001. 2 Standard Eco Drive Devices Many Honda models come standard with eco drive devi- ■Improvement in Average Fuel Economy (FY 1995:100) ces, such as fuel economy meters. As of March 2005, 18 (%) Target level 150 for 2005 Honda models come equipped with fuel economy meters, accounting for approximately 60.4% of all Honda vehicles sold within Japan. Also, six models (three of which have 100 fuel economy meters) come equipped with eco lamps, which light up when the car is being economically driven, 50 i.e., in a cruising condition or in deceleration. Honda models equipped with either fuel economy meters or eco lamps account for approximately 72.7% of all Honda vehicles sold 0 1995 2000 2001 2002 2003 2004 (FY) within Japan in fiscal 2004.

25 Product Development Domain Automobiles

3 Fuel Economy for Main Models ●Elysion All types of the Elysion model, which was put on the market ■Operation of Adjustable Cylinder System in May 2004, were approved by the Ministry of Land, Infra- 3 cylinders structure and Transport as a vehicle that meets the 2010 3 cylinders in operation 6 cylinders in operation in operation Moderate Rapid Cruising Cruising Idling Acceleration Moderate Fuel Economy Standards + 5% requirement. With its V6 3.0-R deceleration deceleration acceleration i-VTEC engine, the Elysion achieved the highest level in its class1 for power output and torque as well as fuel economy (9.8 km/R 2) due to its variable cylinder management sys- Driving status tem, which shifts between three- and 6-cylinder combustion according to driving conditions, as well as its precise throt- 1. 3. Cruising (20 km/h or more, 3,500 rpm or less, D-range cruising) 3 cylinders tle control function using drive-by-wire (DBW) technology. 2. Moderate deceleration (engine brake is weak) in operation R 4. Rapid deceleration (on a downgrade, with the foot brake, when engine braking is strong) With its 2.4- 4-cylinder i-VTEC engine, the Elysion has ach- 6 cylinders 5. Idling in operation ieved a fuel economy of 10.2 km/R 2 by adopting the vari- 6. Acceleration 3 cylinders able valve timing control (VTC) system, which continuously 7. Moderate acceleration (Judging the speed as constant–switching) in operation varies the intake valve timing phase in accordance with en- 1. 3.0-R class minivan 2. Fuel economy in 10-15 mode (This figure was obtained during an gine load, and a function to stop one of two intake valves at inspection made by the Ministry of Land, Infrastructure and a low engine speed. Transport.)

● Insight 36.0 km/R , achieving the world’s highest class performance For the hybrid model Insight, which provides both high fuel in fuel economy. economy and the joy of driving, Honda adopted an engine * For five-speed MT vehicles under-cover to improve the car’s aerodynamic performance. in 10-15 mode At the same time, the IMA system was improved. As a result, the Insight’s fuel economy was improved from 35.0 km/R * to The Insight

●Legend and improved aerodynamic performance have contributed Weight reduction is an effective measure of improving fuel to the achievement of fuel economy of 8.6 km/R while en- economy. The Legend, which went on sale in October 2004, suring high output and high driving performance through has achieved a significant reduction of 151 kg in weight*. In the adoption of the SH-AWD system. addition, its more efficient VTEC-based combustion system * Compared with those manufactured by the use of traditional technologies and materials

Thin-walled fuel filler pipe Aluminum trunk lid (high-speed blowing)

High-frequency quenching center pillar Magnesium front seat back frame

Aluminum hood

Aluminum front fender (high-speed blowing) Lightweight sound absorbing floor mat

Aluminum die cast 2-piece intake manifold CFRP drive shaft Magnesium cylinder head cover Aluminum rear subframe Aluminum front subframe Aluminum mount collar Aluminum rear bumper beam Aluminum brackets Aluminum molded rear lower arm B Aluminum front bumper beam Aluminum extruded rear lower arm A Aluminum forged front lower arm (without peeling) Aluminum forged rear control arm Aluminum forged front knuckle Aluminum molded rear knuckle Aluminum forged front upper arm Aluminum forged rear upper arm

Aluminum front brake caliper Aluminum rear brake caliper

26 lentv ulVhce NoiseReduction Alternative Fuel Vehicles ● ● pand fuelcellvehicleusesinvariousregions. cells willbeusedasacommonpowersource. comprehensive research forafuture societywhere fuel hydrogen fuelingsystemsincoldareas, wepromote Y Power Inc.oftheUnitedStates(basedinstateNew with hydrogen fuelingandcogenerationfunctionswithPlug second-generation homeenergystation(HESII)equipped model forarecycling-based society. tion/test ofaself-sufficient energysystemandcreate a Y ofthe test-driving theFCXinlateApril2004aspart 2004. area ofJapan,followingthatinNewYork inDecember was ourfirstleaseofafuelcellvehicleinthecoldweather 2005.This Hokkaido prefecturalinJanuary government atsubfreezingstarting temperatures—a world’s first—tothe cember 2002.Infiscal2004,weleasedanFCXcapableof to itsJapaneseandU.S.customersonthesamedayinDe- United States(atotalof19)sinceitfirstdelivered theFCX Honda hasleasedsixFCXvehiclesinJapanand13the oil—amounted to81vehiclesinJapanfiscal2004. gas—a more abundantandcleaner-burning fuelthan The salesoftheCIVICGX,whichispowered bynatural ork). Through conductingtestsonfuelcellvehiclesand akushima Zero EmissionProject toconductademonstra- Fuel Cell Vehicles Natural-Gas Vehicles Honda continuesitstechnologydevelopmenttoex- ajointtestoperationof In addition,westarted In Yakushima, theWorld NaturalHeritage,westarted FCX delivery ceremonyFCX delivery attheHokkaidoprefectural government office The CIVICGX its enginewasincreased. adoption ofthefollowingtechnologieswhileoutput noise causedbytheengineandintake/exhaustdueto pared withthatoftheprevious modelbyreducing exterior which islowerthantheregulation standard of76db)com- 2004, achievedthesimilarlevelofexteriornoise(to74db, are themajorsources ofexteriornoise. r Honda alsofocusesonthedevelopmentoftechnologyto educe exteriornoise.Theairintake,exhaust,andengine Te Te Te Results ofEnvironmental ConservationActivitiesinFiscal2004 High-volume resonatorchamber Air cleanerusingnoiseabsorbingmaterial High-volume aircleaner Engine under-cover (noiseabsorbingtype) Engine designcover (noiseinsulatingstructure) intheengineroom Acoustic material crankshaft Highly rigid cylinderblockHighly rigid Flow adjustable twinsilencer The newLegend,whichwasputonsaleinOctober c c c hnology toreduceintakenoise hnology toreduceenginenoise hnology toreduceexhaust noise Adjustable valve Structure ofaflowStructure adjustable twinsilencer 27

Results of Environmental Conservation Activities in Fiscal 2004 Product Development Domain Motorcycles

We completed the adoption of 4-stroke engines to all models* to achieve Motorcycles cleaner exhaust gas and better fuel economy. We are now expanding the use of our electronically controlled fuel injection (FI) system to include small models and developing and applying other new technologies to mass-produced models. * Except some special models

● Main ● Adopted 4-stroke engines for all models launched in Main To expand the use of 4-stroke engines achievements fiscal 2004 (4-stroke motorcycles as a percentage of targets for in fiscal all motorcycles manufactured by Honda: 97.2%)* fiscal 2004 2004 ●Improved the average fuel economy by 34.2% for in Japan ●To improve the fuel economy of new models in Japan all models marketed in fiscal 2004* *Results in Japan Achieving Cleaner Exhaust Gas

Progress towards Targets to Be Achieved by 2005 with Cleaner Exhaust Gas ■Percentage of the Sales of Models with 4-Stroke Engines (in Japan)

(%) Targets 97.2 100 ●Up to fiscal 2005: To reduce total exhaust emissions of 89.5 80 HC* to approximately 1/3 for new motorcycles (com- 69.1 70.1

pared with fiscal 1995) 60 53.3 * Total for Japan, the United States, the European Union, and Thailand 42.5 40

Progress 20

●In fiscal 2003, total HC emissions from new Honda vehi- 0 19952000 2001 2002 2003 2004 (FY) cles increased by 3.3 points due to a large increase in the number of unit sales. In fiscal 2004, however, emissions decreased by 4.9 points compared with the 2003 level as Improvement in Emission Performance a result of progress in technological development and ap- of Honda’s Main Models plication. We have thus reduced total emissions to approx- Honda promotes cleaner exhaust gases both in Japan and imately one-fourth of the 1995 level and have continuously throughout the world. In fiscal 2004, we continued to apply achieved the target of reducing HC emissions to approxi- electronically controlled fuel injection (FI) technology to small mately one-third of the 1995 level every year since 2000. motorcycles to realize cleaner exhaust gases in 4-stroke en- In Japan, we completed the adoption of 4-stroke engines. gines. Also, we expanded the use of our electronically con- In Europe, we launched the Zoomer, a 50 cc moped, as trolled fuel injection (FI) system to include small models and the first FI system-equipped moped in the region. The developed and applied other new technologies to mass- Zoomer has achieved clean emission levels equal to 1/2 or produced models. As a result, total HC emissions in Japan less of the Euro II emissions standards for CO and HC+NOx. dropped to approximately 13.3% of the 1995 level, down In Japan, we expanded the use of our FI system to approximately 2.9 points from that in the previous year. medium-sized models in addition to large and small ones. The FORZA X (250 cc), which went on sale in April 2004, ■ Transition in Total HC Emissions as and the FORZA Z, which Compared with the 2005 Target Level (FY 1995: 100) ■Clean Emission Levels was launched in July of the (%) Achieved by the FORZA X 100 same year, have both (g/km) achieved 1/2 or less of the 14 1/2 80 Exhaust emissions exhaust emissions stan- standards 12 dards in Japan for CO and FORZA X 60 10 Target level HC. for 2005 8 40 6

20 4

1/2 0 2 1995 2000 2001 2002 2003 2004 (FY) 0 CO HC NOx FORZA X 28 Improvement inFuelEconomy pared withthatofthebasemodel. was improved by5%(ataconstantspeedof60km/h)com- controlled ThefueleconomyoftheFORZAZ beltconverter). first 250-ccscootertofeature aHondaS-Matic(electronically equipped withthePGM-FIsystem.Inaddition,itisworld’s The FORZAZ,whichwentonsaleinJapanJuly2004,is improvenology tofurther fuelefficiency of4-stroke engines. In fiscal2004,HondacontinuedtoexpandtheuseofFItech- ● Progress * Total averageforJapan,theUnitedStates,Europe, andThailand ● Targ fo Progress towards Targets toBeAchieved by 2005 Improvement inFuelEconomy for MainModels (km/

■ ■ 100 120 140 30 35 40 45 Honda hasexpandedtheuseof4-stroke enginesinmo- Up tofiscal2005:To improve theaveragefueleconomy* (%) provement of30%overthe1995levelachieved in2003. economy by34.2%overthe1995level,followinganim- technologies. Asaresult, weimproved theaveragefuel developed andappliedotherfueleconomyimprovement ded theuseofourFIsystemtoincludemore modelsand torcycles notonlyinJapanbutalsooverseas. by approximately 30%(compared withfiscal1995) 20 40 60 80 Fuel EconomyImprovement R 0 r Improvements inFuelEconomy Improvement inAverageFuelEconomy Achieved withtheFORZAZ ) Furthermore, bothwithinandoutsideJapan,weexpan- Furthermore, ets FORZA X FORZA Z FORZA FORZA X 9520 2004 2003 1995 5% for 2005 Target level 2000 2001 2002 (FY 1995:100) FORZA Z (FY) Noise Reduction ness asaresult oftheexhaustnoisereduction. characteristics andachievedanexcellentlevelofquiet- on theexhaustpipemanifold.Thissystemimproved output the exhaustpipeaccording todrivingconditionisplaced The variableexhaustsystemthatcontrols thediameterof noise reduction. ping power, andreduced weightwhile ensuringsignificant idity control) waschangedtoprovide grip- more comfort, The tire’s structure (reinforcement internal materialsandrig- improved.cowl, thequietnesswasfurther re smallamounts,whichalsoledto40% ces containedinvery ofmeasureschanged aspart substan- toreduce harmful By placingsoundinsulatingmaterials(thewere ing intakenoise. significantly reduc- characteristics while improved output oftheduct,we part opening atthefront to control theintake able intakesystem By installingavari- ● ● ● ● lowing noisereduction technologies. below thethird noiseregulation standards byusingthefol- April 2004,weachievedalevelofnoisereduction thatis For theCBR1000RR,launchedindomesticmarket (dB (A))

■ 100 Results ofEnvironmental ConservationActivitiesinFiscal 2004 duction inweightandahigherinsulationrate)insidethe Exhaust noise Drive system Engine noise Intake noise 50 60 70 80 90 Quietness Performance for theCBR1000RR Acceleration noise CBR1000RR standards Noise regulations Constant speed pass-by noise (opened) Direct airinjectioncontrolvalve Exhaust noise near theoutlet Control valve (closed) Variab Variab le exhaust system le intake system CBR1000RR First injector Second injector 29

Results of Environmental Conservation Activities in Fiscal 2004 Product Development Domain Power Equipment

For power equipment, our environmental commitment is to comply Power Equipment with stringent regulations in advance, in focusing on cleaner exhaust gases, and improved fuel economy in all product areas.

● To comply with stringent emissions Main ● Achieved compliance with regulations in advance Main regulations in advance achievements for all models released in fiscal 2004 targets for in fiscal fiscal 2004 ●To improve the fuel economy for new 2004 ●EM45is power generator: Improved fuel economy in Japan product models in Japan of at least 30% compared with the previous model

Achieving Cleaner Exhaust Gas

Improvement in Emission Performance of Targets for 2005 and Progress Honda’s Main Models

The small Salad FF500 tiller, launched in September 2004, is Targets equipped with Honda’s e-SPEC engine GCV 160 and meets ●Up to fiscal 2005: To reduce the average exhaust emis- the phase 2 regulations of the U.S. EPA and Tier II standards sions* of HC and NOx by approximately 30% for new of California’s Air Resources Board (CARB), which are the products (compared with fiscal 1995) most stringent standards in the world. *Average emission levels worldwide

Progress ●We were able to achieve an approximate 30% reduction in average HC and NOx emission levels in fiscal 2001. In fiscal 2004, we succeeded in realizing an approximate 38% reduction by continuously taking various measures.

■Reductions in Total Emissions of HC and NOx Salad FF500 (FY1995: 100) (%) ■Clean Emission Levels Achieved with the Salad FF500 100 ●EPA Phase 2 Target level (g/kw-h)HC+NOx (g/kw-h) CO for 2005 18 700 80 16.1 610 16 600 14 500 12 60 10 400 8 300 6 40 200 4 2 100 20 0 0 Regulation standardFF500 Regulation standard FF500 ●CARB Tier II 0 1995 2000 2001 2002 2003 2004 (FY) (g/bhp-h) (g/bhp-h) 14 HC+NOx450 CO 410 12 12.0 400 350 10 300 8 250 6 200 150 4 100 2 50 0 0 Regulation standard FF500 Regulation standard FF500

* Honda names the environmental conservation technology in power equipment as e-SPEC, which represents Honda’s determination to pass down a rich natural environment to next generations.

30 from theEBseries *TheEM4500from theEM seriesandtheEB6500SX(U.S.) Targ with thoseofprevious models*. proved by30%ormore (at1/4theratedoutput)compared load. Thankstothesetechnologies,fueleconomyhasim- matically controls theengine speedaccording totheelectric andanecothrottleunique highlyefficient thatauto- inverter ity ofboth100Vand200are equippedwithHonda’s which were putonsaleinJuly2004,have anoutputcapabil- The EM45is,EB45i,EM55is,and55ipowergenerators, toImprove Efforts FuelEconomy ● Progress ● Improvement inFuelEconomy Ta 100 120 140 ■ (%) We Up tofiscal2005:To improve theaveragefueleconomy proximately 28%bytheendoffiscal2004. by approximately 30%(compared withfiscal1995) 20 40 60 80 0 Improvement inAverageFuelEconomy rg

were abletoimprove theaveragefueleconomybyap- ets 9520 2004 2003 1995 ets for 2005andProgress 2000 EM45is 2001

( R ■ 1 2 0 /hr) Improvement inFuelEconomy with theEM45is 2002 EM4500 for 2005 Target level *At 1/4theratedoutput Improved by37% EM45is (FY) * The EM4500from theEM 2006 (stage2)criteria. pean noiseregulations for dB(A), meetingtheEuro- has asimilaroutputlevel. able model(FU650)which with thenoiseofcompar- FF500 by5dBcompared duced thenoiseof mechanical noise,were- re Through suchmeasures as previous models*. compared withthoseof duced byapproximately 9dB(A)(at1/2theratedoutput) duce noiseeffectively. Asaresult, thenoiselevelwasre- re-noise. Inaddition,anecothrottle contributestofurther duce theengine’s mechanicalnoiseand intake/exhaust greatly reduces theintakeandexhaustnoise,inorder tore- and and ExhaustChamberSystem,whichsmoothesairflow We ● from ourmajorpowerequipmentreleased infiscal2004. We Noise Reduction household use,were sold. gas cogenerationunitfor which adoptsHonda’s small household cogenerationunit, 9,167 unitsofthesmall households. Infiscal2004, consumption inordinary order toreduce energy household usethrough gascompaniesinMarch 2003in marketingitsowngascogenerationunitfor Honda started Alternative Fuel Technology ● (U.S.) from theEBseries series andtheEB6500SX Results ofEnvironmental ConservationActivitiesinFiscal 2004 ducing theengine’s Salad FF500 EM45is, EB45i, EM55is, andEB55i

The noiselevelis82 have adoptedtheNoisePrevention Shroud andIntake introduced thefollowingtechnologiestoreduce noise (dB (A))

■ ■ (dB (A)) 70 75 80 85 90 50 60 70 80 Quietness Performance Quietness Performance load/nearone’sear * Atmaximumenginespeedwithno for theSaladFF500 for theEM45is Small householdcogeneration unit M50EM45is EM4500 FU650 Reduced by8.6dB(A) Reduced by5dB(A) * At1/2theratedoutput Salad FF500 31

Results of Environmental Conservation Activities in Fiscal 2004 Results of Environmental Conservation Activities in Fiscal 2004

Production Domain Purchasing Domain

Transportation Purchasing Domain Product Development Domain Domain

Sales Domain Disposal and Recycling (3R) Domain

Office Domain

For the Procurement of Materials and Parts Which Have Reduced Environmental Impact

A single vehicle comprises as many as 20,000 to 30,000 parts, most of which automobile manufacturers purchase from suppliers. Therefore, to reduce the environmental impact of products throughout their lifecycles, automobile manufacturers need to cooperate with their suppliers. Honda set green purchasing guidelines for the procurement of materials and parts which have reduced environmental impact while making efforts to reduce the environmental impact directly caused by the company. Based on these guidelines, we are actively promoting green purchasing activities in strong cooperation with our suppliers, including asking them to acquire ISO 14001 certification.

Major Activities in the Purchasing Domain

Management of chemical substances

Promotion of Promotion of green Reduction in environmental impact caused by suppliers green purchasing purchasing guidelines

Promotion of the acquisition of ISO 14001 certification

32 Purchasing Domain Results of Environmental Conservation Activities in Fiscal 2004

Honda has set green purchasing guidelines to increase the percentage of materials and parts which have reduced environmental impact.

● To replace specified chemical substances with ● Completed the replacement of lead and lead com- alternative materials in accordance with pounds with alternative materials. The replacement Honda’s chemical substance guidelines Main of hexavalent chromium, except for black and green Main achievements chromate, is currently underway. targets for ● ● 2 To reduce suppliers’ CO2 emissions in fiscal Reduced CO emissions per energy consumption fiscal 2004 2004 unit by 4.4%* in Japan ● ●Reduced landfill waste by 79% from the fiscal 2000 To reduce suppliers’ landfill waste in Japan level* ● To promote the acquisition of ISO 14001 ●Certification acquired by 355 companies (80% of certification by all suppliers suppliers)

* Affiliated companies only (subsidiary companies and associated companies based on the Securities and Exchange Law) Promotion of Green Purchasing

Green Purchasing Guidelines by cooperation between Honda and its suppliers. 1 In fiscal 2005, we will continue to promote the manage- In 2001, Honda set green purchasing guidelines to aggres- ment of chemical substances and reduction in the use of sively promote the procurement of materials and parts which substances that cause environmental impact based on our have reduced environmental impact. (See the framework of green purchasing guidelines. Honda’s green purchasing guidelines below.) ●Promoting the acquisition of ISO 14001 certification by In cooperation with our suppliers, we started to promote Honda’ suppliers green purchasing with specific management items and tar- In fiscal 2004, Honda worked towards its target of having all gets toward 2010. of its suppliers acquire ISO 14001 certification. This resulted ●Management of chemical substances in the certification of 355 companies, which account for 80% Honda is committed to reducing the use of the four heavy of all Honda suppliers. metals said to have adverse effects on the environment (lead, mercury, hexavalent chromium, and cadmium) in all models of Efforts in Relation to the Purchase automobiles, motorcycles, and power equipment manufactured 2 of Spare Parts in Japan by the end of December 2006. One of the major ●Recycling of used molds results achieved in fiscal 2004 was the complete replacement Because most molds are made of steel, used molds are recy-

of lead and lead compounds listed in Honda’s chemical cled. CO2 emissions from iron making with recycled steels substance guidelines with alternative materials. However, we are about 25% of those from iron making using iron ore. were unable to replace hexavalent chromium (excluding black Therefore, the recycling of used molds should be actively and green chromates) with alternative materials as planned, promoted. However, many molds are stored for a long time but we will fully abolish the use of this heavy metal* in automo- after mass production uses, because these old molds are still biles and motorcycles by the end of December 2005 and in used for manufacturing various repair parts, and it is difficult power equipment by the end of December 2006. to determine when to dispose of the mold. * Excluding the use in some S2000 parts Since fiscal 2002, Honda has provided its suppliers with ●Reduction in environmental impact caused information on repair parts and the criteria for disposing of by suppliers in manufacturing parts molds to help them recycle the old molds on a regular basis. In fiscal 2004, making full use of the Honda LCA System, we In fiscal 2004, Honda and our suppliers continuously cooper-

made efforts to reduce CO2 emissions and landfill waste. As ated to actively promote the recycling of used molds. Results of Environmental Conservation Activities in Fiscal 2004 Results of Environmental a result, CO2 emissions from suppliers were reduced by 4.4% on energy consumption unit basis compared with that in fis- Achievements in Fiscal 2004 cal 2000. Also, landfill waste from suppliers decreased 79% Number of molds disposed of: 54,500 Equivalent weight: 7,500 tons compared with that in fiscal 2000. These were made possible

■Framework of Honda’s Green Purchasing Guidelines

Honda Green Purchasing Classiﬁcation Management Item Target

Management of chemical substances Content of chemical substances in Compliance with the schedule set Products contained in products (purchased parts) products (parts and materials) forth in Honda’s guidelines on chemical substances*

CO2 emission volume 2010: 6% reduction over 2000 Manufacturing Management of environmental impacts by suppliers Waste amount (reduction of landﬁll) 2007: Zero landﬁll

Corporate Promoting environmental Further acquisition of ISO 14001 2005: Completion in Japan System management systems at suppliers certiﬁcation 2008: Completion in other countries

* Honda’s guidelines on chemical substances: The guidelines show the schedule for reducing, abolishing the use of, or replacing chemical substances of concern, including those regulated in Europe (lead, mercury, hexavalent chromium, cadmium) and those voluntarily regulated by Honda. 33 Results of Environmental Conservation Activities in Fiscal 2004

Production Domain Purchasing Domain

Transportation Production Domain Product Development Domain Domain

Sales Domain Disposal and Recycling (3R) Domain

Office Domain

Making Our Factories Even Friendlier to People, the Global Environment, and Local Communities and Minimizing Our Environmental Impact to as Low as Zero

We conduct production activities to manufacture products through various processes where various resources and energy are consumed. We will minimize the impact on the global environment by these activities in all aspects. And we will also improve the working environment for associates and make efforts to cooperate with local communities. Through these efforts, we aim to develop our factories into those that local people can be proud of. Honda has been promoting its Green Factory Plan throughout the world toward that goal.

Major Activities in the Production Domain Energy saving (CO2 reduction)

Energy and resource saving Introduction of new energy

Resource saving (water consumption) Promotion of green factories Reduction in waste (byproducts)

Zero Emissions Prevention of air and water pollution

Reduction in the use of chemical substances

34 Promotion ofGreenFactories made progress tozero emissionsbasedonGreen Plan. Factory In theproduction domain,Hondahasaggressively reduced theuseofenergyand resources and * The“production domain”sectioncoversfivefactoriesinJapan—Saitama,Tochigi, Hamamatsu,Suzuka,andKumamoto—andtheAuto Production Domain fiscal 2004 targets for in Japan from theprevious year’s level(445,000CO energy consumption. control energyusethrough reduce LCAactivitiestofurther conservation, introduce newenergysources, andefficiently As future measures, energy Honda willpromote further mentation ofmeasures shownintheupperrightsection. in production, theinfluenceofweather, andtheimple- of 481,000tons.Theseresults were mainlyduetoincrease thus reduced by2.8% compared withthenumericaltarget re Energyconsumptionunitvaluesare nowshownasindices(FY Note: domain cameto467,600CO CO Promoting Energy Saving Ta (CO 100 Main 1 10 20 30 40 50 60 70 80 90 duction overthefiscal1990level).CO Energy saving 0 2 2 rg

-10,000 tons) emissions attributedtoenergyuseintheproduction r The fiscal2002energyconsumptionunitshownintheprevious 1990:100). eport waserroneous andhasbeencorrectedeport 100 ets andProgress for Fiscal2010on 61.56 Energy andResource Saving 9020 022003 2002 2001 1990 CO 2 50.60 85.9 Emissionvolume 2000 88 48.20 48.80 80.3 2 -tons infiscal2004,up5.1% 82.0 Energy consumptionunitindex (%) 44.50 81.1 2

2 . emissions were -tons) (a24.0% 46.76 2004 76.4 (FY) achievements * CO from Starting fiscal1999, ATV’s,* whichwere previously classifiedas approximately 10% oftotalelectricityconsumption. kWh intheproduction domaininfiscal 2004,accountingfor Power generationusingnewenergy source cameto80.2million in Japan in fiscal The following CO K Electricity 0.404 Electricity (CO ih i 2.576(CO LPG 3.031 Light oil Gasoline 2.246 (CO (CO iygs 2.015(CO NFO 2.716 City gas (CO Main Energy-Saving Measures a products, havebeenreclassified asamotorcycles. (10,000units) 100 140 180 220 260 300 340 380 420 460 500 540 Results ofEnvironmental ConservationActivitiesinFiscal2004 erosene 2.532 (CO Introduction ofnew energy source Main 2004 20 60 Introduction ofhighlyefficientboilers Replacement withenergysaving for burners alloy furnaces Reduction inenergyuseby introducinghighlyefficientfreezingmachines More efficientoperation ofcogeneration units Changeover offuelsfor freezingmachines(fromkerosene toLNG) Reduction inairpressure Reduction instandby for electricity robots Reduction by streamliningvarious productionprocesses Tr Breakdown ofEnergy Use(inCO 2 conversionfactorshavebeenfixedsincefiscal1990. ansition inProduction OutputinJapan 9020 0220 2004 2003 2002 2001 1990 Ker LPG 3.7% NFO 1.6% osene Power equipment Power A Motorcycles utomobiles 4.0 2 conversion factors* were used: % City gas 28.1% 2000 61.5% electricity Purchased Gasoline 1.0% Light oil0.1% 2 2 2 2 2 2 2 2 equivalent) -ton/k -ton/ton) -ton/k -ton/k -ton/k -ton/1,000 Nm -ton/MWh) mobile NewModelCenterinTochigi. R R R R ) ) ) ) 3 ) (FY) 35

Results of Environmental Conservation Activities in Fiscal 2004 Production Domain

■Power Generation Using New Energy Sources 2 Zero Emissions (Million kWh) 100 ●Reduction in waste (by-products) 75.1 80.9 80.2 80 Continued from the previous year, zero off-site landfill were achieved at all domestic factories in fiscal 2004. In addition, we are 60 54.3 50.5 making efforts to reduce the total amount of by-products and 40 the amount of waste incinerated.

20 The amount of waste incinerated was approximately 4,400 tons, down 70%, achieving the target of a 65% reduction over 0 2000 2001 2002 2003 2004 (FY) the fiscal 1998 level. We will further reduce waste incineration by improving waste segregation and aggressively reduce the Note: Photovoltaic power generation (power generation field) and natural gas cogeneration (new form of use), as defined in the New Energy total amount of by-products, notably by preventing their genera- Law, are targeted as new energy types. tion at the sources. ●Greenhouse gas emissions ■Weight of Internally Incinerated Waste and the Recycling Rate In fiscal 2004, greenhouse gas emissions in the production (1,000 tons) ■Internally incinerated waste (%) 14.8 Recycling rate domain came to 477,000 tons in CO2 equivalent. 15 100 97.6 96.6 96.6 95.4 96.0 Greenhouse gas emissions 10 92.1 ● CO2 emissions from energy consumption and waste incineration: 8.68 471,000 CO2-tons 7.85 ● 6.81 90 Emissions of greenhouse gases other than CO2: 6,000 CO2-tons 5.81 4.38 5 Note: The emission of greenhouse gases was calculated according to the guidelines provided by the Ministry of the Environment of Japan. The greenhouse gases include CO2, CH4, N2O, HFC, PFC, and SF6. 0 80 1998 2000 2001 2002 2003 2004 (FY) ●Resource saving (water use) Total amount – Amount of by-products incinerated Water use at domestic factories in fiscal 2004 totaled Recycling rate = 100 Total amount of by-products 4,731,000 m3. Water use decreased 10% from the 2000 lev- Total amount = Total amount Amount of internally el. Water saving was achieved by the following measures. of by-products of waste – concentrated liquid waste Breakdown of Waste Associated with Production Activities (Unit: 1,000 tons) Type Fiscal 1990 Fiscal 2003 Fiscal 2004 ■Water Consumption and Water Consumption Unit External landﬁll 18.1 0.00 0.00 Index Intermediate external disposal 8.2 0.11 0.10 Internal incineration 17.0 5.81 4.38 (1,000 m3) 100 Unit water consumption index (%) Internal concentration 10,000 100 0.0 4.37 6.03 90 Recycling 139.6 170.58 177.97 86 88 86 9,000 90 Total amount of by-products 182.9 179.47 188.48 ■ Use of rainwater * Excluding burnt residues 8,000 80 ■ Use of well water ■ Use of industrial water 7,000 70 The plan for reducing the generation of byproducts, which ■ Use of tap water was developed based on the Law concerning the Promotion of 6,000 60 5,272 4,684 4,729 4,731 the Utilization of Recycled Resources, sets the target for fiscal 5,000 27 50 4,430 34 77 72 2005 as shown in the upper right graph. In fiscal 2004, the gen- 92 4,000 40 eration of byproducts decreased by 4% from the fiscal 2001 lev- 3,097 2,220 2,359 2,454 2,085 3,000 30 el.

2,000 20 1,472 1,603 1,536 1,608 1,687 ■Unit Generation of Byproducts Shown in the Form 1,000 10 of Indices (FY 2001:100) 677 688 663 645 751 (%) 0 0 109 2000 2001 2002 2003 2004 (FY) 110 103 Note: In this fiscal 2004 report, water consumption unit values are shown 100 100 as indices (FY 2000:100). 96 97 90 Water Saving Measures Taken in Fiscal 2004 80 ● Collection of blow-down water from cooling towers 2001 2002 2003 2004 2005 (FY) ● Full-scale operation of equipment to recycle cooling water used in the forging process ● Further utilization of rainwater

36 ures asexpandingtheuseofwater-based paints. The reduction wasachievedbythefollowingmeasures. measurement results, Data”.) refer to“Factory are more stringentthantheregulations. (Forspecific standards,ter qualityatthelevelofourvoluntary which wastewater are closelymonitored tomaintainairandwa- Gas emissionsfrom combustionsystemsandfactory * VOCsmainlyconsistoforganicsolventscontainedinpaintsandadhe- ● ● were 32.8g/m 2004, theaverageVOCemissionsfrom thesefactories sions atSaitama,Suzuka,andTochigi Factories. Infiscal on automobiles.Infiscal2004,wemeasured VOCemis- The majorsource ofVOCemissionsispaintsolventsused VO

● ● ● ● (g/m world. sphere. Therefore, VOCsare regulated inmanycountriesaround the ozone layerinthestratosphere andphotochemicalsmoginthetropo- sives. VOCsremain toxicforalongtime,andcausethedepletionof ■ Vo Prevention ofairandwaterpollution 60 10 20 30 40 50 0 of Tochigi toSuzukaFactory) Factory Integration ofproduction lines(transferringtheproduction models Factory) Introduction ofwater-based paints(topainttheLegendatSaitama Improvement incoatingefficiency re Exhaustive reduction inwasteandloss(improvement inthe Transition intheAmountofVOCEmissions We C ReductionMeasures Taken inFiscal2004 latile organic compound(VOC)* 2) covery ofthinnersforcleaning,etc.) covery

will further reduce VOCemissionsbysuchmeas- will further 2000 51.6 2 , down1%from theprevious fiscalyear. 2001 42.5 2002 36.5 3032.8 33.0 2003 2004 (FY) Note: Inthisfiscal2004report,PRTR unitemissionvaluesare showninthe environment. such aspreventing theoutflowofPCBintosurrounding pliance withthestoringcriteria setbythegovernment, containing PCBoil). on 739unitscontainingPCB(condensersandtransformers In fiscal2004,wesubmittedthereport tothegovernment the endofthisreport.) and eachHondafactory, pleaseseetherelevant pagesat duce VOCemissions.(Fordataontheproduction domain the useofthesesubstancesinlinewithmeasures tore- compared reduce withthatinfiscal2001.We willfurther emission indexwasalsoreduced byapproximately 30% mately 36%from thefiscal2001level.ThePRTR unit sphere amountedtoroughly 1,866 tons,downapproxi- ical substancesfallingwithinthescopeofPRTR Law. belowgivestatisticaldataforfiscal2004chem- The charts ● ●

■ ■ Results ofEnvironmental ConservationActivitiesinFiscal 2004 (Tons) 1,000 2,000 3,000 4,000 Chemical emission(PRTR)* Report concerningtheStoringandDisposal of Report Devices ContainingPCB * PRTR (PollutionReleaseandTransfer Register)system:lawconcerning Emissions ofSubstancesTreatedunderthePRTR Breakdown oftheEmissionsSubstancesTreated We The emissionlevelsdischargedintotheair/hydro- System andtheUnitEmissionIndex under thePRTRSystem 0 ment andthepromotion ofimprovements intheirmanagement. the reportingofspecifiedchemicalsubstancesreleased intotheenviron- form ofindices(FY2000:100) form

will continuetostore these devicesproperly incom- 2,668 0120 2003 2002 2001 100 16.3% benzene Ethyl 37.2% Xylene ■ 2,453 87 Emissions Others 3.8% ,3 1,866 1,830 42.7% Toluene 72 Unit emissionindex 2004 70 (FY) 100 (%) 25 50 75 37 0

Results of Environmental Conservation Activities in Fiscal 2004 Results of Environmental Conservation Activities in Fiscal 2004

Production Domain Purchasing Domain

Transportation Transportation Domain Product Development Domain Domain

Sales Domain Disposal and Recycling (3R) Domain

Office Domain

Highly Efficient and Environment-Conscious Transportation

Honda improves its transportation efficiency by promoting a modal shift to transportation by ship and rail as well as joint transportation with other companies. Also, we are developing environmental management systems jointly with affiliated transportation companies and implementing multifarious measures for green logistics. Furthermore, we are reducing the use of packaging materials by utilizing simpler packaging; reviewing materials to be used; altering specifications; and expanding the use of returnable containers.

Major Activities in the Transportation Domain Optimizing means of Improving transportation transportation efficiency Reducing environmental impact (jointly with affiliated transportation companies and other companies) Promotion of green logistics

Reducing the use of packaging materials Reduction in packaging materials Introducing returnable containers

38 Transportation Domain Results of Environmental Conservation Activities in Fiscal 2004

In the transportation domain, Honda has improved transportation efficiency by energy-saving driving and modal shift. Also, to reduce the amount of packaging waste, we are aggressively promoting a packaging method that uses returnable materials or less material.

● To jointly implement the environmental ● Held periodic meetings to exchange environmental Main Main management system with four major achievements information with main transportation companies targets for transportation companies fiscal 2004 ● in fiscal ● To improve transportation efficiency: CO2 2004 Improved transportation efficiency: CO2 emission of in Japan emission of 114,900 CO2-tons (for transport of in Japan 109,555 CO2-tons (transportation of completed auto- completed automobiles) mobiles)

Promotion of Green Logistics

●CO2 emissions from the transportation of completed Improving Transportation Efficiency 1 motorcycles: 7,490 CO2-tons For the transportation of completed motorcycles, we pro-

In fiscal 2004, total CO2 emissions from the transportation moted a modal shift to transportation by rail as an energy- of automobiles, motorcycles, power equipment, and repair saving activity at affiliated transportation companies. In

parts amounted to 153,210 CO2-tons. fiscal 2004, long-distant transportation by large and small JR freight containers was expanded to cover transportation

■Transition in CO2 Emissions from Transportation Activities between Kumamoto and Hamamatsu in addition to trans-

Automobiles MotorcyclesPower equipment Repair parts portation from Kumamoto to Kanto/Sapporo and from 150,000 (CO2-tons) Hamamatsu to Sapporo. This modal shift contributed to an 1,210 1,404 81% reduction in CO2 emissions from relevant transporta- 120,000 1,243 8,955 8,996 1,418 1,104 4,474 8,964 7,490 tion routes and led to a 13% reduction in total emissions 90,000 from domestic transportation.

60,000 117,205 125,452125,058 107,229 109,555 ■Example of Modal Shift (For the transport of completed motorcycles) 30,000 Transportation Transportation 38,091 37,478 35,061 by truck Transportation by truck 0 Kumamoto Fukuoka by rail Nishi-Hamamatsu 2000 2001 2002 2003 2004 (FY) Factory station station

929km Dealers 125km 10km Hamamatsu ●CO2 emissions from the transportation of completed Factory automobiles: 109,555 CO2-tons By encouraging affiliated transportation companies to pro-

mote energy-saving driving and by improving average fuel ●CO2 emissions from the transportation of repair

economy through the introduction of digital tachometers, parts: 35,061 CO2-tons

we improved the fuel economy in transporting completed For CO2 emissions from the transportation of repair parts,

automobiles by 3%. Also, we reduced CO2 emissions from we were able to achieve a reduction of 336 CO2-tons, ex-

transporting vehicles by 2,723 CO2-tons in fiscal 2004. In ceeding the reduction target of 63 CO2-tons. A reduction in the future, we will expand transportation by ship (modal emissions was made possible because the use of depots

shift) to further reduce CO2 emissions from the transporta- for motorcycles was discontinued, transportation routes tion of our products. The following main measures were tak- from depots to sales stores were changed, and the modal en in fiscal 2004. shift was further promoted. Results of Environmental Conservation Activities in Fiscal 2004 Results of Environmental

Cleaner Exhaust Gases from 2 Transportation In order to comply with ordinances on environment conservation enacted by the Tokyo Metropolitan Government and In-vehicle digital tachometer Analysis being made after returning three neighboring prefectural governments, affiliated trans- to the garage portation companies continued to introduce diesel particu- CO2 Reductions due to Measures to Improve the Transportation late filters (DPFs) and low emission vehicles. As a result, we Efficiency, Which Resulted in Total Emission Increase Less than Transportation Volume Increase (Fiscal 2004) reduced PM emissions by approximately 21.1 tons.

ItemTarget Date Started Reduction (in CO2-tons) Energy-saving driving and introduction of digital Automobiles April 2004 2,723 tachometers Total reduction 2,723139.1 39 Transportation Domain

Reduction in Packaging Materials by Product Category

Activities to Reduce Packaging in order to achieve a substantial decrease in the use of 1 Materials Used for Repair Parts packaging materials. Also, we introduced returnable containers, instead of ●Reduction in the use of packaging materials for repair parts polystyrene foam, for the transportation of rear differential In fiscal 2004, as a result of taking the following measures to gears to North America, thereby reducing the quantity of minimize the use of packaging materials, we were able to polystyrene foam used on an annual basis.

save the equivalent of 311 tons of packaging materials. The * Knockdown parts are sets of parts to be delivered overseas and as- total use of packaging materials, however, increased to sembled at the overseas production. 17,385 tons from the previous year’s level due to the reduced use of returnable containers, an increase in the number of parts shipments for recalls, and increased sales. In the future, we will reduce the use of packaging materials by improving the packages for bumpers and changing the packaging materials. Also, we will examine the use of returnable containers as boxes used within warehouses.

■Transition in the Use of Packaging Materials for Repair Parts Returnable containers used in Returnable container used in the ( tons) 17,385 exportation to Canada, the United export of rear differential gears to 18,000 States, and China North America 16,000 14,492 13,373 13,545 13,949 14,000 12,000 Reduction in Packaging Materials for Knockdown Parts (Fiscal 2004) 10,000 8,000 Item Reduction 6,000 Reduction in the use of cardboard materials 22.7 tons 4,000 Reduction in the use of polystyrene foam 7.8 tons 2,000 0 (FY) 20002001 20022003 2004 Export and Import of Completed ●Activities to reduce packaging materials 3 Motorcycles

Reduction in Packaging Materials For the import of scooters from China, we have achieved ●Reduction in the use of cardboard (air caps* instead of cardboard zero waste by continuously using returnable pallets in the boxes) transportation process. For the export of motorcycles, we ●Discontinued use of cardboard separators (replacing metal crates used for overseas shipment with returnable containers) continued to promote the use of non-cardboard packaging ●Use of biodegradable plastic bands materials and returnable steel cases to reduce the amount * Air cap: vinyl packaging material using encapsulated air bubbles of packaging materials used.

Example of Reducing the Use of Packaging Materials Reduction in Packaging Materials in the Export of Completed Motorcycles (Fiscal 2004)

Item Reduction Reduction in the use of steel materials 503.8 tons Reduction in the use of cardboard materials 7.2 tons

4 Transportation of Power Equipment Before improvement (metal crates) After improvement (returnable container) By using returnable steel cases for the domestic transporta- Activities to Reduce Packaging Materials tion of medium-sized and large outboard engines, we re- 2 Used for Knockdown (KD) Parts* duced the use of steel and cardboard materials. ●Development and introduction of new types of Reduction in Packaging Materials in the Transportation returnable containers of Power Equipment (Fiscal 2004) In fiscal 2004, we reduced the use of cardboard materials Item Reduction by only 22.7 tons. In the future, however, we will expand the Reduction in the use of steel materials 8 tons use of two types of returnable containers developed to be Reduction in the use of cardboard materials 4 tons used in exportation to Canada, the United States, and China

40 Results of Environmental Conservation Activities in Fiscal 2004

Production Domain Purchasing Domain

Transportation Sales Domain Product Development Domain Domain

Sales Domain Disposal and Recycling (3R) Domain

Office Domain

Encouraging Honda Dealers to Become Environmentally Advanced Dealers Who Are Valued and Trusted by Customers and Local Communities

Honda promotes its unique environmental management systems and green dealer certification system to further advance its environmental activities in the sales and service domain. We encourage our dealers to steadily conduct environmental conservation activities and continuously implement measures towards more environmentally advanced dealers who are valued and trusted by customers and local communities.

Major Activities in the Sales Domain

Introduction of environmental management systems (certification of Green Dealers) Improvement of energy efficiency Promotion of Green Dealers (reduction in CO2)

Pollution prevention

Proper disposal of end-of-life vehicles

41 Sales Domain

We are in the process of introducing our own environmental management system to Honda automobile dealers and are making efforts to improve our environmental efficiency, including the proper disposal of end-of-life products.

● To further increase the number of Best Green ● Increased the number of Best Green Dealer stores to Main Main Dealer stores 2,524 achievements targets for ● To increase the number of Honda Dream Stores ● Opened 30 environmentally friendly Honda Dream in fiscal fiscal 2004 Stores (47 in total) 2004 in Japan ● ● Certification acquired by three stores of one dealer To increase the number of Green Dealers of in Japan power equipment

Promotion of Green Dealers (Automobiles) Introduction of Environmental Compliance with the End-of-Life 1 Management Systems 2 Vehicle Recycling Law Honda has introduced the Green Dealer certification sys- Honda aggressively conducted activities to educate its au- tem* to its automobile dealers as Honda’s unique environ- tomobile dealers and other dealers on the End-of-Life Vehi- mental management system and promotes the acquisition cle Recycling Law, which was fully enforced in Japan in of this certification by all of the dealers’ stores. As of the end January 2005. of March 2004, 2,524 stores are certified as Best Green Dealer stores. Best Green Dealer certification is the next ●Organization of Study Meetings for Dealers step after being certified as a Good Green Dealer store. Honda organized regional study meetings for its automobile These Best Green Dealer stores implement measures to im- dealers throughout Japan at about 50 venues within the prove energy efficiency, contribute to local communities, country. A total of approximately 5,700 people from dealers’ and improve their environmental conservation activities. In sales-related departments participated in study meetings

particular, these stores are reducing their CO2 emissions by and deepened their understanding of the End-of-Life Vehicle promoting energy saving activities and eco driving. Recycling Law and measures to comply with this law.

* Honda established this proprietary environment management system on the basis of the know-how obtained through acquiring ISO 14001 certification. The Honda Green Dealer Certification System is implemented in two tiers. The Good Green Dealer Certification is awarded to dealers who comply with environmental regulations and make other efforts such as cleaning-up surroundings. The Best Green Dealer Certification is awarded to dealers who improve their environmental efficiency.

Number of Stores Certified under the Green Dealer Certification System

Good Green Dealer stores Best Green Dealer stores

Percentage of stores certified as Good Green Dealer stores Study meeting for dealers Percentage of stores certified as Best Green Dealer stores ● (units) (%) Creation of Educational Materials for Dealers 99 3,000 98 100 To help dealers comply with the End-of-Life Vehicle Recycling 93 93 89 98 Law, we issued Recycle Navigation, which contains all the 2,564 2,542 2,524 2,500 2,456 latest news on this law. Recycle Navigation provides informa- 2,317 73 2,254 tion on seminars held by administrative organizations and in- 2,000 61 dustrial associations as 1,693 1,607 well as updates on most re- 1,500 50 cent activities by related or- 42 ganizations and the indus- 1,024 1,000 try. Also, we created the following materials: sepa- 500 rate manuals for sales, service, and accounting de- 0 0 partments; training videos 2000 2001 2002 2003 2004 (FY) and DVDs to teach dealers how to deal with customers in relation to recycling issues; and desk pads for quick reference, etc.. Recycle Navigation

42 GD Press ● ● (September2004) dealers from alloverthecountry. electricity consumptionandwastegeneration,representing conference, sixdealerspresented theiractivitiesthatreduce spread abouttheirGreen information Dealer activities.Atthe Dealers Conference toenabledealersshare andmutually onmental managementsystems. mental improvement activitiesatdealers basedonourenvir- We their awareness ofthelaw. offices aswellaffiliated companiestoraise also distributedthemtoHonda’s factoriesand the End-of-LifeVehicle RecyclingLaw. We its customersdeepentheirunderstandingof Honda created anddistributed leafletstohelp ● ins forsecond-handcars;andacceptingend-of-lifevehicles. automobile safetyinspections;buying,selling,oroffering trade- out all thefollowingstages:marketingnewcars;carrying disposal ofend-of-lifevehiclesthatdealershaveaccepted,at written estimates,salesagreements, andwrittenrequests forthe including inquiriesintorecycling pricesandtheissuanceof dealers cansmoothlyconductonlineoperationsforrecycling, Promotion Center).Thankstothisonlinesystem,allHonda cost paidbyconsumerstotheJapanAutomobileRecycling into automobilerecycling pricesanddepositingtherecycling smooth recycling operationsbyitsdealers(i.e.,makinginquiries V Honda incorporatedafunctiontodealwiththeEnd-of-Life ● ehicle RecyclingLawintoitsonlinee-Dealersystemtoensure 3 Participation intheHonda GreenParticipation Conference (seepage Publication of Activities That EducateHonda Vehicle Users Building anOnlineSystemfor Dealers 59) (byHondaVerno Yamaguchi) ment-related information. duce examplesofenvironmental activitiesandotherenviron- Through thismagazinedistributedtoallthedealers,weintro- zine fordealers)

For itsautomobiledealers,Hondaheldthethird Green implemented thefollowingmeasures to promote environ- (anenvironmental information magazinefor dealers) Other Activities GD Press

(an environmental maga- information The thirdGreenDealersConference Recycling Law the Automobile Leaflet on and Power EquipmentAreas Commitment totheMotorcycle Expansion ofEnvironmental Also, thebranchachieved38%reduction inwastegeneration. 5% from thereduction levelachieved intheprevious year. raised itsenvironmental impactreduction targetbyanother branch yearfrom2004—the fourth thefirstcertification—the OsakaBranch,infiscal conducted bytheISO14001-certified the useofIT. Asfor theenvironmental managementactivities re documents anddataorintegratethem.Next,theymaderules by themandsearched formeasures toreduce such ofalldocumentsanddatacreated,inventory sent,orreceived through thisproject.of information Specifically, theymadean 50%. Theywere alsoabletoachievethecentralmanagement ground upandsucceededinreducing theiruseofpaperby branches andsitesconductedpaperlessactivitiesfrom the Paperless 50onacompany-widescaleinfiscal2004.Allits motorcycle businessinJapan,carriedoutanactivitycalled Honda Motorcycle Japan,Honda’s responsible for subsidiary ● dealers to be certified asHondaGreendealers tobecertified Dealers. Green Dealer stores andencourage our26power-equipment We power-equipment salesoffices, were identifiedand verified. cycling packagingmaterialsused byHondadealers,including cycling ofpackagingmaterials, the effect ofreducing andre- were asGreen certified Dealer stores. Also,topromote there- packaging materials.Infiscal2004, three stores ofonedealer thedisposalof industrial wasteaswelltorecycle cerning andencouragedthemtoissuemanifestscon- in theindustry tomakeourdealersthebestgreenwere dealers determined year—under thethemeofreducing environmental impact,we In fiscal2004—continuingfrom the previous fiscal motion ofgreen dealeractivities. Dream Stores network formore customersatisfactionandpro- stores. Infiscal2005,wewillcontinue to expandtheHonda stores intotal)and,thus,expandedthenetworkofthese We laws andregulations andpromote environmental conservation. by HondaDream stores: fullycomplywithenvironment-related cycling tothefollowingenvironmental requirements tobemet cles. Infiscal2004,weaddedthepromotion ofmotorcycle re- the environmental requirements asgreen dealersformotorcy- bikes composedofHondaDream Stores whichshouldmeet In March 2002,weopenedanetwork formarketingsports ● 2 Results ofEnvironmental ConservationActivitiesinFiscal 2004 1 garding through thedispatchandcollectionofinformation Distributor Dealers

were abletoestablishanother30HondaDream stores (47 will implementmore measures to expandthenumberof Motorcycles Powe r Equipment 43

Results of Environmental Conservation Activities in Fiscal 2004 Results of Environmental Conservation Activities in Fiscal 2004

Production Domain Purchasing Domain

Transportation Disposal and Domain Product Recycling (3R) Development Domain

Domain Sales Domain Disposal and Recycling (3R) Domain

Office Domain

From “Cradle to Cradle”—Exploiting Recycling Possibilities

It is said that approximately 5 million vehicles become end-of-life vehicles in Japan on an annual basis, 4 million of which are disposed of within the Major Activities in the Disposal and Recycling (3R) Domain country. On a weight basis, 81% to 83% of these vehicles are recycled, and the remaining 17% to 3R (reduce, reuse, and recycle) design 19% become shredder dust. There is an increasing Reduction in the use of substances Recycling of byproducts with environmental impacts demand for measures to reduce such dust because landfill sites no longer have enough capacity to accept shredder dust, and a conversion to a recycling-based society is now being more Production stage* strongly demanded. To respond to this situation, Development the End-of-Life Vehicle Recycling Law was stage enforced in Japan in January 2005. Also, voluntary recycling activities for motorcycles were started jointly by Japanese manufacturers and some importers in October 2004. Honda is aggressively making efforts to minimize the use of Use and substances of concern, the amount of landfill disposal Promoting the use of recycled parts waste and reuse resources throughout a product’s stage Recovery and recycling entire life cycle, including development, production, of bumpers use, and disposal. Proper disposal of end-of-life products

* For activities at the production stage, please refer to the achievements described in the Production Domain section. 44 Results of Environmental Conservation Activities in Fiscal 2004 Disposal and Recycling (3R) Domain Results of Environmental Conservation Activities in Fiscal 2004

Honda gives priority to the recyclability of its products. Based on the 3R (reduce, reuse, and recycle) concept, we carefully select materials and structures for our products at the product development stage.

Production Domain GAutomobiles, motorcycles, and power GAutomobiles: Achieved 90% or more recyclability Purchasing Main equipment: To improve recyclability rates for models newly marketed or changed in fiscal Domain targets for Main 2004 fiscal 2004 achievements GMotorcycles: Achieved 95% or more recyclability in Japan in fiscal for models newly marketed or changed in fiscal 2004 2004 Transportation G Domain in Japan Power products: Achieved 95% or more recyclabili- Disposal and ty for all nine models released in fiscal 2004 Product Automobiles Recycling (3R) Development Domain 3R Design GStandardization of resin materials (promotion of olefin resin) Domain Sales Domain 3R Assessment System For all new models and changed models released in fiscal Disposal and 1 2004, highly recyclable olefin resins are now used in Recycling (3R) Since fiscal 2001, we have been using 3R preliminary as- injection-molded interior parts. Also, material identification Domain sessment system to evaluate and improve the 3R design of marks are displayed on all resin parts large enough for newly developed models. such labeling. Office Domain Design for Reduction (Reduction in Examples of parts that use olefin resin materials 2 Waste Generation) GAir cleaner case GDoor lining G G Air-conditioning unit Inner fender 4 For the Legend, which was put on the market in October 0 GBumper face GInstrument panel 0 2

2004, the following designs for reduction were adopted. GPillar decoration Others l a c s i F

G n Downsized or lightened parts and components GUse of recycled materials (resins) i

s e In fiscal 2004, we used 14.1 kg of recycled resins for the i G G t Small VSA modulator Carbon fiber reinforced i v i GMagnesium seat back frame plastic (CFRP) drive shaft Legend. We will further increase the use of recycled materi- t c

G G A From “Cradle to Cradle”—Exploiting Recycling Possibilities Aluminum front/rear subframe Aluminum knuckle als. n

GAluminum hood compression suspension arm o i t

GAluminum trunk lid a v It is said that approximately 5 million vehicles G r Aluminum front/rear brake caliper e s n become end-of-life vehicles in Japan on an annual Reduction in Substances o C

We added engine oil with an extended service life, l

basis, 4 million of which are disposed of within the a

Major Activities in the Disposal and Recycling (3R) Domain t

long-life coolants, etc., to all models newly marketed or of Concern n country. On a weight basis, 81% to 83% of these e

changed in fiscal 2004. m 3R (reduce, reuse, and recycle) design Honda is striving to reduce the use of four heavy metals n vehicles are recycled, and the remaining 17% to o r i

(lead, mercury, hexavalent chromium, and cadmium), v

19% become shredder dust. There is an increasing Reduction in the use of substances Recycling of byproducts n

GOil and others with an extended service life E which are said to have adverse effects on the environment, with environmental impacts f o

demand for measures to reduce such dust

by the end of December 2005 in all the models produced s

Replacement timing t l because landfill sites no longer have enough G → u Engine oil 10,000 km 15,000 km within Japan. s G → e capacity to accept shredder dust, and a conversion Long-life coolant Interval: 3 years 11 years Of the four substances, we have already achieved the R (engine cooling liquid) Production 1 to a recycling-based society is now being more G → voluntary reduction targets of JAMA for lead and mercury stage* Oil filter 20,000 km 30,000 km strongly demanded. To respond to this situation, GAutomotive transmission fluid Interval: 40,000 km→80,000 km in all models earlier than scheduled in JAMA’s guideline. Development For the remaining two substances, we aim to fully abolish the End-of-Life Vehicle Recycling Law was stage 2 enforced in Japan in January 2005. Also, volun- their use by the end of December 2005. Design for Recyclability tary recycling activities for motorcycles were 3 1. Voluntary reduction targets set by JAMA (for newly developed models) Targeted Targeted (implementation) started jointly by Japanese manufacturers and Details For all new models newly marketed or changed in fiscal substances period some importers in October 2004. Honda is 2004, we achieved 90% or more recyclability by imple- Lead In and after January 2006 Use amount per vehicle (compared with the 1996 level) aggressively making efforts to minimize the use of menting the following measures. (Automobiles) one-tenth or below Use and (Motorcycles) 60 g or below substances of concern, the amount of landfill disposal Promoting the use of recycled parts GDesign for easier dismantling (for the Legend) Mercury In and after January 2005 Banned except for some parts waste and reuse resources throughout a product’s stage (slightly contained in discharge Recovery and recycling headlights and liquid crystal entire life cycle, including development, production, panels for navigation systems) of bumpers Examples of improvements: GFront inner fender Hexavalent In and after January 2008 Banned use, and disposal. GFront bumper lower grill Proper disposal of chromium end-of-life products Examples of integration: GFront brake pad Cadmium In and after January 2007 Banned G * For activities at the production stage, please refer to the Drive shaft boots 2.Excluding some S2000 parts for hexavalent chromium achievements described in the Production Domain section. 44 45 Disposal and Recycling (3R) Domain Motorcycles 3R Design 1 Reduced Use of Lead 1 3R Assessment System Honda completed the replacement of lead with iron as a Since 1992, Honda has been checking each of its new material used in wheel balancers while giving consideration models with its 3R preliminary assessment system in order to the anticorrosion property required for the material. Also, to improve 3R-related performance. we abolished the use of lead in carbon brushes of motors. Design for Reduction (Reduction in Reduced Use of Other Substances 2 Waste Generation) 2 of Concern ●Reduction in size and weight Honda has been replacing other As for technology to reduce substances of concern based on its size and weight, we promote guidelines on chemical substances. In the use of aluminum die cast particular, for the new Legend, we imple- frames that can be welded. mented measures to reduce the use of We adopted thin-walled hol- hexavalent chromium in antirust coating low construction materials and reduced its use by half on the basis manufactured by Gravity Die of the number of targeted parts. Casting (GDC) process to fur- Also, we are reducing the use of cad- ther reduce the size and mium contained in slight amounts in electric weight of the head pipes of and electronic parts (such as IC chips). the CBR 1000RR, released in In addition, we aggressively reduced fiscal 2004. the amount of polyvinyl chloride (PVC) Hexavalent chromium-free parts ● contained in interior and exterior resin Extension of service life parts and replaced it with more recyclable materials. For By December 2004, we expanded the use of Honda’s origi- most of the injection molded interior parts, we use olefin nal puncture-proof technology called “tuffup tube” to 4.2 resin materials, which are highly recyclable. For the Leg- million completed motorcycles. We have thus steadily pro- end, we adopted the urethane spray method in manufactur- moted the use of these unique tubes. ing surface sheets for the instrument panel and door lining top. Also for the undercoating, we adopted urethane resin Design for Recyclability to reduce the use of PVC to one-fifth that used in the previ- 3 ● ous model. Improved recyclability For models newly marketed or changed in fiscal 2004, 95% or more of their materials are recyclable. Also, to further im- Reduction in HFC134a 3 prove recyclability, we implemented a system using the lat- We expanded the application of air conditioners that reduce est IT technology to collect and compute recycling-related the use of HFC134a by approximately 10% compared with data. Using this system, we will promote product designs the 1995 level and adopted it for 21 out of 27 models. Re- that attain 95 % recyclability. Honda marks the name of the garding the future of air conditioners without HFC134a, we material on even small resin parts as much as possible. have been conducting the following activities since last year. ●Use of recycled resin • We are collecting information to understand the industry’s movement and the current level of technology. We are also expanding the adoption of recycled resin to • We are examining the adoption of such air conditioners fenders and under-covers. For scooters released in fiscal for automobiles. 2004, recycled resin materials are used in approximately 15% of their resin parts. 4 Reduction in In-Vehicle VOC Honda traditionally has selected materials with lower VOC emissions in order to reduce in-vehicle odor and adverse effects on people’s health caused by VOC. For models newly marketed or changed in and after fiscal 2005, we will take measures to meet the numerical targets set by the Ministry of Health, Labour and Welfare for the in-vehicle concentration of 13 specific substances.

46 of Concern Reduction inSubstances • their usebytheendofDecember2005. For theremaining twosubstances,weaimtofullyabolish in allmodelsearlierthanscheduledJAMA’s guideline. reductionvoluntary targetsofJAMAforleadandmercury Japan. by theendofDecember2005inallmodelsproduced within which are saidtohaveadverseeffects ontheenvironment, metals (lead,mercury, hexavalentchromium, andcadmium), toreduceHonda ismakingefforts theuseoffourheavy mium withhexavalentchromium-free parts. containingatinyamountofhexavalentchro-those parts cember 2002,wehavereplaced approximately 60%of based onitsguidelineschemicalsubstances.SinceDe- Honda hasbeenreplacing varioussubstances ofconcern • 2 in January 2005.(Pleasereferin January tonote2onpage45.) ancers were finallyappliedtoallmodels infiscal2004. spoke wheelsofnewmodels,andlead-free wheelbal- cal 2003wasgraduallybeingusedforcastwheelsand A lead-free wheelbalancerthathadbeen inusesincefis- 1 We Of thefoursubstances,wehavealready achievedthe

achieved all the voluntary reductionachieved allthevoluntary targetsof JAMA of Concern Reduction inOtherSubstances Reduction intheUseofLead Design for Recyclability Power Equipment of Concern Reduction inSubstances We ● der dust. toreduce effort shred-used byfiscal2004,wemadeevery cludes recovered andmaterials heatenergyofallparts With agoalofimproving therecyclability to95%whichin- the useofthissubstancebyendDecember2006. by half.We willcontinueouractivitiestocompletelyabolish mium) andhavereduced theuseofhexavalentchromium the targetsforthree substances(lead, mercury, andcad- ing toJAMA’s targets.We havealready voluntary attained substancesinpowerequipmentaccord- the useofharmful standards. We, however, are voluntarilyworkingtoreduce duced withinJapan. by theendofDecember2006inallpowerequipmentpro- which are saidtohaveadverseeffects ontheenvironment, als (lead,mercury, hexavalentchromium, andcadmium), Honda ismakingeffortstoreduce theuseoffourheavymet- 2004. re including 99.4% (basedonourowncomputationformula, Results ofEnvironmental ConservationActivitiesinFiscal 2004 covered heatenergy)forninemodelsreleased infiscal Improved recyclability

For powerequipment,there are nodomesticregulatory were abletoachieveanaveragerecycling rateof 47

Results of Environmental Conservation Activities in Fiscal 2004 Disposal and Recycling (3R) Domain

Honda is promoting a recycling system for end-of-life products, including technological de- Repair Parts velopment and assistance. Our efforts also concentrate on increasing the recovery of parts, including end-of-life bumpers, the expansion of their recycling and reuse, and improvements in the actual recycling rate.

Main Main achievements targets for ● ●Increased the number of applicable models To expand the number of models in which in fiscal fiscal 2004 reused parts are used from 6 to 13 2004 in Japan in Japan

Increasing the Recovery, Recycling, and Reusing of Repair Parts

■ Expansion of the Honda Recycle Present Reuse of Parts Waste 1 Parts Business Recyclable (%) Reuse Since 1998, Honda has sold the recycled highly functional 100 11 10 9 11 12 parts such as torque converters. In July 2001, we started selling reused parts and these already marketed recycled 80 37 36 37 35 37 parts as Honda Recycle Parts. 60

●Recycled parts 40

(1) Expansion of the lineup and sales performance 52 54 54 54 51 In recent years, the number of models in operation in which 20 reused parts can be applied has decreased, and both per- 0 formance and durability of functional parts have improved. 2000 2001 2002 2003 2004 (FY) As a result, sales of repair parts have decreased. In consideration of these changes in circumstances, we began to ●Reused parts review the application of recycled parts that should be de- Starting in July 2001 in the Kanto District and expanding to veloped. the rest of Japan in January 2002, reused parts and genuine parts could be ordered at the same time through Honda’s ■ Transition in the Sales of Recycled Parts in Japan genuine parts distribution channel, providing convenience (units) 5,000 for purchasers. Driveshaft assembly R/Y 4,368 Distributor Reused parts comprise second-hand parts (16 items) 371 Torque converter 4,000 that are selected and removed from end-of-life vehicles two Power steering pump assembly 3,399 Power steering gear box assembly generations before and removed parts (9 items) that are 373 3,000 taken away to install optional parts. 2,561 2,360 In fiscal 2004, we increased the number of applicable 239 2,000 1,916 models from 6 to 13. 1,525 1,417 118 502 45 Reused Parts 1,000 418 883 413 650 75 663 214 Second-hand parts Removed parts 443 351 148 94 271 249 277 23 0 139 99 2000 2001 2002 2003 2004 (FY)

(2) Present reuse of parts By effective use of recovered parts and material recycling efforts, we achieved a reuse rate of 88%, as shown in the upper right graph.

Recycled Parts

48 ● ● cycled resin were used. vicing andrepair companies.Asaresult, 1,454tonsofre- (940 tons)from Hondaautomobiledealersandgeneralser- In fiscal2004,werecovered 276,248replaced bumpers 2. Fortheuseofresin recycled from recovered bumpers,theamounts 1. Theuseofrecycled resin exceedstheamountofresin recovered Notes:

* In fiscal 2005, we will start implementingmeasures* Infiscal2005,wewillstart toincrease the Motorcycles: undercover A Products MadefromRecycledResin 2 ■ use ofrecycled resin forrepair bumpers. (10,000 units) 1,600 1,000 1,200 1,400 (tons) End-of-life vehicle bumpers: 3,180bumpers, 11tons Bumpers replacedfor repair: 276,248bumpers, 940tons ■ Use ofRecycled Resin: 1,454 Tons Number ofBumpers Recovered inFiscal2004and 30 10 15 20 25 279,428 Bumpers, 951 Tons the AmountofResinRecovered: of abumpertobe3.4kg. for fiscal2003andonwards are calculated assumingtheunitweight re bumpers founddefectiveintheproduction process andtherecycled includestheuseofresinbecause theformer recovered from utomobiles: splashshield,guard,bumper for repair, etc. 0 5 200 400 600 800 Use ofResinRecycled from Recovered Bumpers sin stored sincetheprevious year. Number ofRecovered Bumpers inJapan 0 Recovery andRecycling ofBumpers 0020 0220 2004 2003 2002 2001 2000 222. 28.8 28.0 22.2 1,025 0.5 0020 022003 2002 2001 2000 886 19 Bumpers replacedwithnew ones Bumpers fromend-of-life vehicles 0.7 1,186 980 24 0.3 1,498 1,008 Bumpers replacedwithnew ones Bumpers fromend-of-life vehicles 10 27.6 0.3 967 10 1,248 2004 27.6 Use intons 0.3 940 11 (FY) (FY) 1,454

creasing thequantityofend-of-lifeoilfilterscollected. and repair companiesin additiontoourdealers,thereby in- therecovery ofend-of-lifefiltersfromstart generalservicing 16% ofalloilfilterssoldinthatyear. Infiscal2005,wewill through Hondadealers,end-of-lifeoilfilterswhichamountto 2004.Infiscal2004,werecovered,these filtersinJanuary recoveringponents asmass-production We started parts. them asmetalandfuel.Also,wereuse someoftheircom- We Re-collecting end-of-life filtersputinapail End-of-life filtersthataredisassembled andrecycled Recycled asmetal 3 Results ofEnvironmental ConservationActivitiesinFiscal 2004

collect anddisassembleend-of-lifeoilfilterstorecycle Oil Filters Recovery andRecycling of Reused asfuelor a heatsource recycled parts Reused as 49

Results of Environmental Conservation Activities in Fiscal 2004 Disposal and Recycling (3R) Domain End-of-Life Products

Main Main achievements targets for ● ●Launched recycling systems for automobiles To promote the establishment of a recycling in fiscal fiscal 2004 system and motorcycles 2004 in Japan in Japan

Automobiles End-of-Life Vehicle Recycling Law

On January 1, 2005, the Law for the Recycling of End-of- Recycling Fees Life Vehicles (End-of-Life Vehicle Recycling Law) was fully 1 enforced in Japan. This law is intended to promote environ- Honda has set its recycling fees in such a way that the cost mental conservation and the effective use of resources by of properly disposing and recycling its products will be implementing measures to ensure the proper and smooth properly covered while the cost to be paid by customers recycling of end-of-life vehicles. Under the law, automobile will be minimized. manufacturers are obliged to collect and properly dispose For Honda’s recycling fees, please go to the following of the following three items: CFCs that are used as air con- Web site: ditioner refrigerants and would destroy the ozone layer and http://www.honda.co.jp/auto-recycle/ contribute to global warming if emitted into the air; airbags that are difficult to dispose of because of their explosive nature; and automobile shredder residue that remain after the Measures concerning the Three Items collection of useful materials from end-of-life vehicles. The 2 End-of-Life Vehicle Recycling Law involves a lot of compa- ●CFCs nies—as shown in the diagram below—and to comply with For CFCs contained in automobile air conditioners, we this law, Honda will take the leading role as a responsible have established a system of properly disposing them with- automobile manufacturer. Also, to ensure environmental out emitting them into the air. We are implementing this sys- conservation through the recycling of automobiles, we will tem and outsourcing the CFC recovery, transportation, and further enhance recycling measures throughout an automo- destruction processes to Japan Auto Recycling Partner- bile’s entire life cycle, from development using designs for ship. recycling to disposal as an end-of-life vehicle. These meas- Also, we will reduce the quantity of CFCs contained in ures include the establishment of a recycling system with automobile air conditioners and develop air conditioners the goal of attaining 95% recycle rate by 2015. that will not use CFCs.

■Flow under the End-of-Life Vehicle Recycling Law ●Airbags It is necessary to properly recycle inflators for airbags, Fund management corporation (Japan Automobile Recycling Promotion Center) which are safety equipment used in automobiles. There are Depositing recycling cost Payment

Auto manufacturers/importers and the designated recycling organization two recycling methods: (1) remove the inflators from the (Japan Automobile Recycling Promotion Center) New-vehicle purchasers module and recycle them at designated facilities and (2) Shredder residue Shredder residue CFC destruction facilities Airbag recycling facilities recycling facilities recycling facilities deploy the airbags inside the end-of-life vehicles and then

Secondhand- recycle the inflators. It depends on the dismantling compa- vehicle Japan Auto Recycling Partnership Team Team purchasers Acceptance and recycling of CFCs and airbags ny which method to adopt, but Honda intends to recom- mend the in-vehicle deployment of airbags for recycling in ees ees f f Last CFCs Companies reusing Airbags Shredder owners dismantled automobiles without generating residue cooperation with dismantling companies while developing CFC recovery

Airbag collection shredder residue

Pressing and tools and equipment required for this method. We have ap- Accepting CFC recovering Dismantling Shredding shearing companies companies companies Handing over companies companies end-of-life vehicles Hulk-processing companies plied a system of simultaneously deploying all airbags in a

Handing over Handing over Handing over vehicle, as opposed to deploying them one by one, to end-of-life vehicles end-of-life vehicles end-of-life Reports on Reports on Reports on Reports on Reports on Reports on dismantled vehicles Reports on Reports on acceptance handing over acceptance handing over acceptance handing over acceptance handing over models released in the market in 1998 and onwards. Al- most all Honda vehicles are now equipped with this sys-

Information management center (Automobile Recycling Promotion Center) tem.

Flow of goods Flow of information Flow of money

50 Achievements inFiscal 2004 ported to destructionfacilities.Because dismantlingcom- ported CFC. 1990s, andHFC,ofthe recovered CFCs,54%were which wasusedforairconditioners tillthefirsthalfof from 15,166 end-of-lifevehicles.CFCsincludebothCFC, toMarch,From werecovered January 5,304kgofCFCs of relevant companies. fully dealingwiththeitemsinMarch 2004withthesupport of fiscal2004).We, however, were abletobeginsuccess- not covered bythelaw(i.e.,vehiclesdisposedend three itemsbecauseoftheexistenceend-of-lifevehicles forced, there was someconfusioninthetreatment ofthe Immediately aftertheEnd-of-LifeVehicle Lawwasen- goes wrong. monitors thedisposalofthree itemstoensure nothing customers. CFCs, airbags,andASRusingtherecycling feespaid by 1,2005.We properlyon January disposeofandrecycle ted operationsrelated tothelaw, whichwasfullyenforced of-Life Vehicle RecyclingLawbyDecember2004andstar- Honda completedallpreparations tocomply withtheEnd- substanceswhenincinerated. als thatwillnotemitharmful models toreduce thegenerationofASRanddevelopmateri- before thegivendeadlines.We willreduce weightofnew Honda willimplementmeasures tocomplywiththesecriteria rate of30%by2005,50%2010,and70%2015), phase-by-phase improvements inASRrecycling (arecycling promotecycling companytofurther therecycling ofASR. December 2004,Hondamadea3%investmentinthisre- ASR RecyclingDivisionofToyotsu RecyclingCo.,Ltd.In tors, Ltd.We outsource theactualrecycling ofASRtothe Motor Corporation;DaihatsuCo.,Ltd.;andHinoMo- theTHTeamcycling ofASR,Hondahasformed withToyota cepting andrecycling ASR.Fortheefficient andreliable re- shredder residue (ASR).Automobilemakersare nowac- shredded pieces,andtheremains are leftasautomobile shredding equipment.Scrapmetalisremoved from the End-of-life vehiclesare dismantledandthenshredded by to thisorganization. outsourcingAuto RecyclingPartnership, theseprocesses lection andrecycling processes incooperationwithJapan companies. We are promoting theairbagandinflatorcol- ● ● 1 CFCs Au Recovered CFCsare stored insteel bottlesandtrans- to relevantHonda provides companiesand information The End-of-LifeVehicle RecyclingLawprovides for This systemgreatly reduces theburden ondismantling tomobile shredder residue(ASR) Achievements regarding the Three Items Recycling Law and Article 29oftheMinisterialOrdinance.Recycling LawandArticle 27-2oftheEnd-of-LifeVehiclegoods pursuanttoArticle We tively usedasroad constructionmaterials. vehicles covered28and31ofthelaw. byArticles taled 21,758.We achieveda53.2%ASRrecycling ratefor ASR) oftheEnd-of-LifeVehicle RecyclingLawappliedto- shredder 31(100%recycling residue) andArticle without 28(disposalof ber ofend-of-lifevehiclestowhichArticle andMarch.ber ofend-of-lifevehiclesinFebruary Thenum- 2005.We, however,January acceptedanincreased num- vehicles from whichASRwasgeneratedalmostzero in end-of-life vehiclestothedisposalofASR.Thenumber process, andtherefore ittakestimefrom theacceptanceof End-of-life vehiclesare shredded intheirfinaltreatment ● them were recycled. Also, werecovered inflatorsfrom 550vehicles,and94.5%of which were deployedbefore beingremoved from thevehicle. March 2005,3,761were equippedwithairbags,85.4%of to Among theend-of-lifevehiclesdisposedfrom January ● ing graph. covered 2005,asshowninthefollow- wassmallinJanuary amount, thenumberofvehiclesfrom whichCFCswere re- panies store CFCsuntiltheyhavecollectedapredefined (Vehicle) 10,000 15,000 2 * Fordetails,pleaserefer totherelevantdatashownatend ofthisreport.

■ 5,000 Results ofEnvironmental ConservationActivitiesinFiscal 2004

■ Au Airbags Total recyclingcosts Total amountofdepositsrepaid residue Shredder inflators Airbags and CFC

Number of Vehicles from which CFCs, Airbags, ASR isusedasenergyresources, andslugsare effec- or ASRwereRecovered Outline ofRecycling ResultsinFiscal2004 (from JanuarytoMarch 2005) published thefollowingrecycling results ofspecified 0 tomobile shredder residue(ASR) Recycling Results 135 January ASR Airbags CFCs 215 Recycling rate Reduction byfullrecycling Amount accepted Recycling rate Removed afterdeployment Removed withoutdeployment To tal amountrecovered 304 3,418 February 1,213 (from January toMarch 2005) 6,161 6,662 pieces 3,337.9 tons 943 pieces 311.4 tons 5,304 kg 53.2% 11,613 94.5% (standard: atleast85%) 15,166 vehicles March 2,333 ¥169,165,157 ¥164,675,000 1,778 vehicles 3,761 vehicles 19,980 units 15,293 51

Results of Environmental Conservation Activities in Fiscal 2004 Disposal and Recycling (3R) Domain End-of-Life Products Motorcycles Voluntary Recycling Activities

Honda, in cooperation with domestic motorcycle manufac- Honda will further strengthen these measures and dem- turers and some motorcycle importers, started conducting onstrate its effectiveness within Japan and expand this re- voluntary recycling activities for motorcycles on October 1, cycling model overseas. 2004. These activities are the world’s first initiative to fulfill our ■Outline of Honda’s Motorcycle Recycling System social responsibilities as a manufacturer or importer toward the stable recycling of motorcycles in cooperation with mo- ● Recycling rate ● torcycle dealers. Reduction in the use of substances Development with environmental impacts Under this program, we accept motorcycles that custom- stage ● 3R design ers want to dispose of at our dealers or at places specified ● Labeling with authorized recycle marks for acceptance and then properly dispose of and recycle them at recycling facilities.

Manufacturing ●Use of a large amount of recycled aluminum ■Outline of the Motorcycle Recycling System stage ●Use of recycled resins

The price of a motorcycle sold with an authorized recycle mark includes recycling costs. New user (of a motorcycle labeled with an authorized recycle mark) ●Introduction of Honda’s recycling guidelines Utilization ● stage Promotion of guidelines at Honda Dream stores Motorcycle without an authorized Motorcycle with an authorized recycle mark recycle mark

Payment of recycling fees by postal transfer Disposal stage ● Motorcycle to be disposed Proper disposal of end-of-life motorcycles (End-of-life ●Recycling Dealer accepting disposed products) motorcycles Disposed motorcycle

and importers Outsourcing and ●Number of motorcycles accepted management Place specified for acceptance Of end-of-life motorcycles accepted at designated places, Outsourcing and 396 of which were Honda’s products, which accounted for management Repair and Prior dismantling (removal of batteries and oils) ▼ recycling facilities Domestic motorcycle manufacturers Domestic motorcycle Shredding and sorting 51.8% of the total.

Waste Recycled materials (iron, aluminum, etc.) ●Recycling rate Reusing as materials Proper disposal According to calculations made based on the number of motorcycles treated at 14 disposal and recycling facilities by category, the recycling rate of Honda’s scooters (includ- Honda has made voluntary efforts to achieve the optimal ing three-wheeler scooters and business scooters) was recycling of motorcycles throughout all stages of its opera- 84.2%, and that of its motorcycles was 85.9%. We ach- tions, from product development to manufacturing, marketing, ieved an 85.1% recycling rate on a weighted average ba- and disposal. At the development stage, we have promoted sis. the 3R (reduce, reuse, and recycle) design and reduction in the use of substances of concern. At the manufacturing ●Labeling with an authorized recycle mark stage, we have expanded the use of recycled aluminum and Honda released 28 new models (60 types) labeled with an resins. At the marketing stage, we have increased the number authorized recycle mark as of the end of March 2005. We of Honda Dream stores. We have thus implemented recycling will label all of our new models with authorized recycle measures consistently throughout all stages. marks by the end of September 2005. Voluntary activities to recycle motorcycles, which started in October 2004, have promoted the labeling of motorcycles with authorized recycle marks as well as the collection, transportation, proper disposal, and recycling of end-of-life motorcycles. As a result, Honda is now able to effectively implement consistent environmental measures, from development to disposal, for end-of-life motorcycles. In the future, we will make efforts as a manufacturer to reduce recycling costs.

52 Results of Environmental Conservation Activities in Fiscal 2004

Production Domain Purchasing Domain

Transportation Office Domain Product Development Domain Domain

Sales Domain Disposal and Recycling (3R) Domain

Office Domain

Carrying out Environment-Conscious Operations at Offices on a Daily Basis

Honda implements drastic environmental conservation measures at its offices as well. Ideally, we hope that these measures, taken through our daily business operations and sales activities, will motivate our factories, suppliers, and customers in carrying out environmental activities and indirectly have a favorable impact on the environment.

Main Activities in the Office Domain

Establishment of environment improvement activities based on environmental management systems

Energy saving (reduction in CO2) Promotion of Green Offices

Reduction in waste and improvement in recycling rates

Introduction of low emission vehicles as company-owned cars

53 Office Domain Results of Environmental Conservation Activities in Fiscal 2004

Honda actively conducts environmental activities in the offices. We will further reduce the environmental impacts caused by our offices through coordinated approach and will conduct environment improvement activities in all our business operations to make our offices more environmentally friendly and greener for the conservation of the global environment.

● Main ● Main To advance environmental conservation All departments improved environmental activities in daily business achievements conservation activities. targets for in fiscal ●CO2 emissions and waste from four office fiscal 2004 2004 buildings totaled 14, 276 tons and 302 tons, in Japan in Japan respectively. Promotion of Green Offices Honda’s head office acquired ISO 14001 certification in mental improvement activities in all business operations to November 1999 and has since been committed to reducing make our offices more environmentally friendly and greener the environmental impacts caused by its business activities. for the conservation of the global environment. Associates have engaged in activities to reduce their envir- Achievements and Targets of Honda Office Buildings onmental impacts as part of their office work, and the envir- (Aoyama, Wako, Shirako, and Yaesu) onmental impacts directly caused by the Aoyama Head Achievements in fiscal 2004 Targets for fiscal 2005 Office building have been reduced. In fiscal 2004, we CO2 emissions 14,276 tons 13,894 tons (2.7% reduction) promoted new measures implemented to introduce environ- Waste generation 302 tons 234 tons (22.4% reduction) mental viewpoints into daily business activities at the Aoyama ■Next Step to Be Taken in Office Buildings Based on ISO 14001 Head Office building. We believe these measures are important because the operations we conduct inside the building, due to their nature, indirectly cause very large environmental Indirect influence impacts outside the building. Social

In addition, following the start of operations at the Wako Indirect Building, Honda’s offices in the Aoyama Building, Wako influence Customers Building, Yaesu Building, and Shirako Building enhanced cooperative measures to reduce their environmental impacts. Indirect Suppliers influence As a result, in fiscal 2004, CO2 emissions and waste from Indirect these four office buildings totaled 14,276 tons and 302 tons, influence Indirectly influencing the Business sites respectively. environment by contact with customers, Head Office In fiscal 2005, we will enhance our efforts to further re- suppliers and business duce their environmental impacts through mutual cooperation sites through plans, business directions, Range of the first-step measures sales activities, etc. to achieve the reduction targets of 2.7% for CO2 emissions (reduction in direct influence) • Energy and resource saving and 22.4% for waste generation. We will implement environ- • Sorting of waste

Related Data: Use of environmentally friendly/low-emission vehicles as company-owned cars at the main business sites ■Use of Government-Designated Environmentally ■Use of Low-Emission Vehicles with High Fuel Economy Friendly Vehicles1 (Gasoline powered vehicles, hybrid vehicles, natural-gas vehicles) Fuel cell vehicles Hybrid vehicles Honda LEV Electric vehicles Natural-gas vehicles “Good” low emission vehicle (emissions are 25% lower than the 2000 exhaust emissions standards) “Excellent” low emission vehicle (emissions are 50% lower than the 2000 exhaust emissions standards) 68 in total 68 in total 90 in total 87 in total “Ultra” low emission vehicle (emissions are 75% lower than the 2000 exhaust emissions standards) (units) (use rate2 of 3.3%) (use rate of 3.0%) (use rate of 3.4%) (use rate of 3.4%) 100 Complies with the 2005 exhaust emissions regulations 1 “★★★ low emission vehicle” (emissions are 50% lower than the 2005 exhaust emissions standards) 8 “★★★★ low emission vehicle” (emissions are 75% lower than the 2005 exhaust emissions standards) 80 1,307 in total 2,035 in total 2,439 in total 2,467 in total (units) (use rate of 63.4%) (use rate of 90.6%) (use rate of 93.5%) (use rate of 97.0%) 2 2,500 313 (146) 239 (135) 60 1 66 2,000 329 (46) 1 1,097 (893) 38 36 62 40 1,500 1,571 3 (1,314) 222 (115) 1 1,000 1,568 426 (397) 12 10 (1,308) 20 6 1,059 88 (80) 7 6 5 (4)4 8 500 (813) 516 5 317 (310) 18 20 17 19 (all) 11 137 (500) 14 6 9 25 (23) (all) (all) 300 (208) 0 2001 2002 2003 2004 (FY) 0 2001 2002 2003 2004 (FY) 1. Non-gasoline vehicles meeting the government’s green procurement criteria. For 4. Two vehicles met the Fiscal 2010 Fuel Economy Standards + 5% target. gasoline powered vehicles, see 4–7. 5. All the vehicles met the Fiscal 2010 Fuel Economy Standards + 5% target. 2. The use rate is the ratio of environmentally friendly vehicles or low emission 6. All the vehicles met the Fiscal 2010 Fuel Economy Standards + 5% target. vehicles to all the vehicles owned by business sites (2,063 in fiscal 2001, 2,247 7. 37 vehicles met the Fiscal 2010 Fuel Economy Standards + 5% target. in fiscal 2002, 2,609 in fiscal 2003, and 2,543 in fiscal 2004) 8. 189 vehicles met the Fiscal 2010 Fuel Economy Standards + 5% target. 3. The figure in parentheses shows the number of vehicles meeting the fuel 9. 161 vehicles met the Fiscal 2010 Fuel Economy Standards + 5% target. economy standards of Japan for fiscal 2010.

Note: ★★★ low emission vehicle... emissions are 50% lower than the 2005 exhaust emissions standards 54 ★★★★ low emission vehicle...emissions are 75% lower than the 2005 exhaust emissions standards Social Activities

Social Activities

Passing down a Clean Environment to Future Generations through Social Activities

Environmental conservation activities have been one of the primary focuses in Honda’s social activities. Through these efforts, we want to be a valued member of local communities where our offices and factories operate. In order to take root in local communities all over the world and share and pass down a clean environment to next generations, we are willing to meet social requirements always ahead of our time as a responsible corporate citizen.

55 Social Activities

In the area of social activities, we are promoting global nature conservation activities facilitated by the Green Renaissance Office, and our business sites are conducting cooperative activities with local communities. Also, through various media, including the Internet and printed brochures, and by holding related events, we are disseminating diverse environmental information to the society at large.

Green Renaissance Activities Achievements in Support Plans for the Reforestation of Deserts 1 Reforestation Activities in Japan 2 in China: The Joyful Forest Project Honda supports activities to protect and grow riverhead The Joyful Forest Project was started in 2000 to help pre- forests. In regions where our factories and offices are loca- vent rapid desertification through sand-arresting afforesta- ted, we support reforestation activities in which our associ- tion in the Horchin Desert in the Autonomous Region of ates participate as volunteers. Mongolia in the People’s Republic of China. Since its start, Honda has been giving financial support and dispatching ●Honda’s Saitama Factory has been supporting and par- volunteers to the project as well as participating in the for- ticipating in a reforestation project called the Riverhead mulation of specific projects. Forest (Tone River) Revitalization Project by Volunteers. In fiscal 2004, volunteer afforestation projects were held This event, which preserves and revitalizes nature in May and September with a lot of Honda associates and through forestation, is held by the CCC Creative Plant’s retirees participating. Thanks to these projects, reforesta- Gunma Project at the source of the Tone River and in the tion is steadily under way on the site. upper reaches of the Minakami-Naramata Dam. In fiscal From February to March 2005, photo exhibitions for the 2004, Honda associates and retirees volunteered to help Joyful Forest were held at the Honda Welcome Plaza on the thin out* trees in June. first floor of the Aoyama Head Office building as well as at ●The Kumamoto Factory started forestation activities on a Honda’s Wako Building and other plants. The display mountain in Aso town, supporting the activities of the showed photos of the desert before afforestation, the grad- Aso Green Stock Foundation conducted at the riverhead ual greening of the site during the afforestation process, of the Shira River. In fiscal 2004, Honda associates and and the actual afforestation activities by the volunteers. We retirees volunteered to participate in planting in April and will continue to implement these projects and photo exhibi- mowing in September. tions as part of our activities to enlighten our associates. ●The Hamamatsu Factory started forestation activities on a mountain in Misakubo town, supporting the activities of Plenteer Forest, a nonprofit organization. In fiscal 2004, Honda associates and retirees volunteered to participate in planting in May and November. ●In March 2005, in the district where our head office building is located, we decided to start activities to conserve the forest owned by Kosuge village, located in the riverhead of the Tama River. In fiscal 2005, Honda associates will start planting activities as volunteers. * To fell trees except those to be cultivated

Planting activities in the Horchin Desert

Planting activities in Misakubo town, Shizuoka Prefecture

56 Environment-Related Seminars Ve Cooperation inLow Emission ● An environment-related event environment-related events. toatotalof33 exhibited ourvehiclesatorgavesupport r toenvironment- and hasgivensupport local governments environment-related eventsheldmainlybythenationaland Honda hasexhibiteditsvariouslowemissionvehiclesat factories. borhood ofHonda’s located intheneigh- children ofschools mainly forteachersand will beimplemented Eco Wagon program again inthefuture. The pate inthisprogram intheprogramdren statedtheirdesire participating topartici- chance toimprove theirawareness ofnature. Teachers andchil- thinning offorest were andchildren giventhe inparticular toactuallytouchmaterials,suchaswoodfrom the opportunity Hamamatsu, Kumamoto,andTochigi). were given Participants areas surrounding Honda’s sites(Tokyo, Saitama,Suzuka, intheprogram heldinthe mately 19,000peopleparticipated obtained from theseaandmountains.Infiscal2004,approxi- visits schoolsinaHondawagonloadedwithnaturalmaterials this eventincooperationwithHondaretirees. TheEcoWagon dren tohelpthemexperienceandstudynature. Hondaholds The EcoWagon isaprogram thatismainly designedforchil- To Ku Hamamatsu area Suzuka area Saitama area elated seminarsheldatsuchfairs.Infiscal2004,we 3 Fr chigi area mamoto area equency ofEco Wagon Event andNumberof Participants oain Frequency ofEvent Locations hicle Fairs for andSupport Eco Wagon

1 ie 10,719 116 times 4tms 4,680 3,855 54 times 64 times ie 265 4 times ie 59 1 time Number ofParticipants (Total) Activities by theEco Wagon port onoursocialactivities. port We en Honda conductsvariousothersocialactivitiesbesides activities. five organizationsengagedinenvironment-related social In fiscal2004,thePhilanthropy Office offered to support takenroot inlocalcommunities. ties havecertainly from localcommunities.Thus,Honda’s cooperativeactivi- tracted anincreasing numberofexhibitorsandparticipants ment towards cooperationwiththeirlocalcommunities,at- sites, inwhicheachsitedemonstrateditsuniquecommit- ted. Theenvironmental exhibitionsheldbyHondabusiness in whichatotalofapproximately 200,000peopleparticipa- Honda associatesjoinedin50localenvironmental events, “enhancement oftheenvironmental moraleofassociates.” withlocalcommunities”and ties incloserharmony ous activitiestoattaintheobjectivesof“cooperativeactivi- continuing from theprevious fiscalyear, weconductedvari- toward cooperatingwithlocalcommunities.Infiscal2004, in localenvironmental eventsasacorporatecommitment vironmental exhibitions,clean-upactivities,andtakingpart Local Communities Cooperative Activitieswith Other Activities Environment-Related Foundations toNGOsand Support vironment-related ones.Fordetails,pleaserefer toour b site.Infiscal2005,weplantopublishanannualre- Hondabusinesssitehasbeenimplementingen- Every Social Activities 57

Social Activities Social Activities

Environmental Communication

As an integral part of our environmental management, we are Environmental Education Support Activities engaged in a wide range of communication activities to en- 3 hance mutual understanding between ourselves and our sta- ●HELLO WOODS’ keholders, including our customers and the local communities Honda has a forest named HELLO WOODS’ in Motegi town, where our factories and offices are located. Tochigi Prefecture, which it uses as a museum where children Moreover, we provide a range of environmental information can discover and experience nature. The Company conducts to the general public through various media and the Internet. activities that focus on providing children with the opportunity to actively play and learn in a forest. Mainly targeting children, 1 Establishment of a Liaison Section who will be the driving force in tomorrow’s society, we have transformed the forest K Liaison sections are set up based on the environmental man- nowl located near residences into edg agement system to coordinate communication at the local e teaching materials and class- a Fin n level in dealing with opinions and requests from residents in ding d rooms where they can play e Sharing x the community. Ex c as much as they want, Expressing pe i rie te nci discover the wonders and Thinking ng m Dissemination of Environmental Noticing e wisdoms of nature, and think Expansion of power n 2 Information through the Media and Events t about what they should do Honda discloses environmental information related to its cor- for a sustainable earth. Expansion of experience porate activities by the following means. Field for activities

Brochures • Honda Environmental Annual Report (Environmental annual report) HELLO WOODS’ is a forest of broad-leaved deciduous trees • Publication of other booklets on environmental topics that extends over 42 hectares and has a pathway approximate- • Honda Web site ly 3 kilometers long that is covered with wood chips (crushed Internet http://www.world.honda.com/environment/ (Disclosure of a full range of environment-related information, lumber from thinning). Children become interested in nature by including the above brochures) playing in the forest, discovering a lot of interesting things, and • FAN FUN LAB http://www.honda.co.jp/fanfunlab/ increasing their exposure to the natural environment, all of (Environment-related exhibition at the Twin Link Motegi facility) which leave a lasting impression on them and helps them be- Facilities • HELLO WOODS’ http://www.honda.co.jp/hellowoods/ come wiser. As people who support children in playing and (Field events letting participants experience nature through play in which nature at the Twin Link Motegi is a key element) learning in the forest, our staff members, called “cast” (forest • Cooperation with low emission vehicle fairs, etc. storytellers), are always available for them. (Active participation in various events organized by national Program structure and local government authorities as well as companies) Events • Holding environmental exhibitions (1) Experience of playing in the forest to become interested in • Presentation events for the announcement of new vehicles nature and/or new technology (2) Experience of creating activities to develop a free, creative • Corporate advertising (e-TECH) Advertising • Product advertising/product catalogs mind to materialize individual thoughts into forms (3) Experience of living outdoors for self-discovery in a completely different environment (4) Experience of afforestation to think about the possibilities of forests

(5) Experience of cooking to recognize the rich blessings of forests located near residences and learning methods and tips for cooking “gifts” from the forest Honda gives importance to individual possibilities. We will provide more places and opportunities to bring out the full po- tential of each individual.

Web site introducing Honda’s commitment to the environment “Cast walk” (experience of playing in the forest) 58 Environment-Related Prizes andAwards Won by Honda ties. the Green Conference topromote future environmental activi- introduced asaspecialexample. Wa among Honda’s domesticbusinesssites,activitiesatHonda at Tochigi Factory. in theconference. mote environmental activitiesandencouragealltoparticipate search facilities,andsupplierstocooperatetogetherpro- canshare thisusefulinformation. participants conducted atHonda’s businesssitesare presented sothatall excellent examplesofenvironmental conservationactivities mental impactsoftheentire HondaGroup. Attheconference, reduce theenviron-has beenheldsince1999tohelpfurther The HondaGreen Conference isabigenvironmental eventthat eevdteFfhSiaaEvrnetAadSaitamaPrefecture the SmartDioZ4 Resources andEnergyattheFiscal2004 Energy-SavingGrandPrixfor Received anawardfromthedirectorgeneralofAgencyforNatural cogeneration unit ECOWILL system,whichadoptsHonda’scompacthousehold Received theFiscal2004GrandAwardforBestTechnology Received theFifthSaitamaEnvironmentAward NV controltechnologyforvariablecylinderengines. Automobile EngineersofJapanAwardsforthedevelopmenthybrid Received theTechnologicalDevelopmentAwardat54thSocietyof cogeneration unit for theECOWILLsystem, whichadoptsHonda’scompacthousehold Received aprizeforexcellenceattheFirst AichiEnvironmentalAwards cogeneration unit ECOWILL system,whichadoptsHonda’s compacthousehold Received theFiscal2004(31st)Iwatani NaojiMemorialAwardforthe 4 Honda EngineeringCo.,Ltd. Honda R&DCo.,Ltd. SeinanCo.,Ltd. Honda Parts Honda Yonrin HanbaiYamaguchi Co.,Ltd. Honda elesysCo.,Ltd. Honda Express Co.,Ltd. Honda AccessCo.,Ltd. Hirata Technical Co.,Ltd. Tsuzuk Goshi GikenCo.,Ltd. Speakers (Departments) ko Building, which started operationsinAugust2004,was ko Building,whichstarted Honda will further increase the number of participants in increase thenumberofparticipants Honda willfurther In additiontopresentations by16teamsselectedfrom In fiscal2004,theSixthHondaGreen Conference washeld forallitsfactories,re-Honda believesthatitisimportant i ManufacturingCo.,Ltd. Honda GreenConference Name ofPrize & LegalDivision Special example/Administration Kumamoto Factory Suzuka Factory Hamamatsu Factory Saitama Factory To BusinessDivision Parts chigi Factory h aa a soito June2004 Japan The EnergyConservationCenter, The JapanGasAssociation Television Saitama Saitama EnvironmentalPromotionCouncil of Japan The SocietyofAutomobileEngineers ih rfcueMarch2005 March2005 Aichi Prefecture The IwataniNaojiFoundation Sixth HondaGreenConference 5 communication withlocalresidents atourfactories. and localround-table meetings. We willcontinuetopromote tours organizedfactory risks. Infiscalyear2004,eachfactory measures, includingmeasures toreduce theirenvironmental with localresidents regarding thefactories’environmental etc.) atitsfactoriestodeepenmutualunderstandingandtrust tours,localround-table meetings, (risk communication,factory Honda conductslocalenvironmental communicationactivities Sponsor on theLocalEnvironment Promoting Communication Prize Winner Honda MotorCo.,Ltd. Honda MotorCo.,Ltd. Saitama Factory Honda MotorCo.,Ltd., May2004 Honda R&DCo.,Ltd. Honda MotorCo.,Ltd. Honda MotorCo.,Ltd. Date ofAward June 2004 February 2005 59

Social Activities Environmental Data by Products Sold in Japan

Note: Only data for models with a large sales turnover is given. For data on all our products please refer to the following Web site. http://www.honda.co.jp/environmental-report/2005/index.html

Automobiles Environmental Data for New Models and Remodeled Automobiles Sold in Japan in Fiscal 2004 (Major Models)

Model Name ELYSION EDIX LEGEND Main type listed G 17X – Marketing date 2004.5.13 2004.7.8 2004.10.7 Type DBA-RR1 CBA-BE1 DBA-KB1 Engine (motor) type K24A D17A J35A Total engine deplacement (cm3) 2354 1668 3.471 Type of drive line1 FF FF 4WD Running gear Electronically controlled 5-speed AT Transmission Electronically controlled 5-speed AT Electronically controlled 4-speed AT (S Matic) Vehicle weight (kg) 1780–1910 1360–1380 1760 2 ● ● ● Emission gas Complies with 2005 CO2 emission standards concentration Level approved under MLIT's lowemission vehicle approval system3 ★★★★ ★★★ ★★★★ CO 0.40 0.60 0.50 Figures reported to MLIT 10.15+11 mode (g/km) NMHC 0.013 0.025 0.013 NOx 0.013 0.025 0.013 10-15 mode (km/R ) 10.2 13.8 8.67

CO2 emissions (g/km) 227.6 168.2 270.0 Fuel economy Complies with Fiscal 2010 Fuel Economy Standards ● ● – Complies with Fiscal 2010 Fuel Economy Standards + 5% target ● ● – Equipped with a fuel economy meter4 –5 Comes standard Comes standard Designation of local 8 prefectures/cities, including Tokyo ● ● ● government-designated low emission vehicle 6 prefectures/cities in the Kyoto-Osaka-Kobe area ● ● ● Vehicles liable to green tax system ● ● – Exhaust noise near the outlet (dB (A))/Engine (rpm) 80/4000 87/4725 77/4650 Noise level Acceleration noise (dB (A)) 74 74 74 (examined by MLIT) Constant speed pass-by noise (dB (A), 50 km/h) 69 (50) 70 (50) 69 (50) Air conditioner Refrigerant HFC134a consumption (g) 750 580 500 JAMA’s 2005 target met (1/3 of 1996) Lead consumption JAMA’s 2006 target met (1/10 of 1996) ● ● ● Mercury consumption Totally abolished, excluding some cases6 Totally abolished, excluding some cases6 Totally abolished, excluding some cases6 Hexavalent chromium consumption Extremely small amount Extremely small amount Extremely small amount ● ● ● ● ● ● ● ● ● ● Cadmium consumption Extremely small amount Extremely small amount Extremely small amount ● ● ● ● ● 1. FF stands for “front-engine/front-wheel drive,” and 4WD stands for “four-wheel drive.” 2. Complies with long-term CO2 emission standards for passenger vehicles and light-duty vehicles 3. Three stars (★★★) indicate that the emission level of the vehicle was reduced 50% of the 2005 CO2 emission standards (certified), and four stars (★★★★) indicate that the emission level of the vehicle was reduced 75% of the 2005 CO2 emission standards (certified). 4. Eco driving support devices, including real-time fuel economy meters, average fuel economy meters, and eco lamps 5. Comes standard for V6 engines 6. Contained in a very small amount in discharge headlights and liquid-crystal panels for navigation systems 7. Vehicles with leather interior; those with the Advance Package; and those with both leather interior and the Advance Package (equipped with a hydraulic power steering system)

Automobile Exhaust Emissions Standards of Japan : 2010 Fuel Economy Standards of Japan New Test Mode (g/km) (Gasoline-Powered Passenger Vehicle) Vehicle weight / 703– 828– 1,016–1,266–1,516– 1,766–2,016– Passenger Vehicle –702 2,266– Item Taxable weight (kg) 827 1,015 1,265 1,515 1,765 2,015 2,265 2005 Standards 10-15 mode CO (carbon monoxide) 1.15 fuel consumption (km/R ) 21.2 18.8 17.9 16.0 13.0 10.5 8.9 7.8 6.4

NMHC (non-methane hydrocarbons) 0.05 NOx (nitrogen oxides) 0.05 2010 Target (2010 Fuel Efficiency Standards + 5%) for Gasoline-Powered Passenger Vehicles Ministry of Land, Infrastructure and Transport in Japan Vehicle weight / 703– 828– 1,016–1,266–1,516– 1,766–2,016– –702 2,266– Low Emission Vehicle Approval Standard: New Test Mode (g/km) Taxable weight (kg) 827 1,015 1,265 1,515 1,765 2,015 2,265 Passenger Vehicle 10-15 mode fuel consumption (km/R ) 22.3 19.7 18.8 16.8 13.7 11.0 9.3 8.2 6.7 Item 50% Emission Reduction Level 75% Emission Reduction Level against FY 2005 Standards against FY 2005 Standards (★★★ Low Emission Vehicle) (★★★★ LowEmission Vehicle) Noise Regulation Values of Japan (on and after October 1, 1999) CO (carbon monoxide) 1.15 1.15 Exhaust noise near the outlet standard value dB(A) 96 NMHC (non-methane hydrocarbons) 0.025 0.013 Acceleration noise standard value dB(A) 76 NOx (nitrogen oxides) 0.025 0.013 Constant speed pass-by noise standard value dB(A) 72

60 ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● 2. Snowblowersare not includedinthelistofitemsthatneed tobevoluntarilyregulated. 1. Regulationstandard withinadefinedaccumulatedoperation time 1. TheCOvalueforsnowblowersisstipulated,butHCandNo 1. TheCOvalueforsnowblowersisstipulated,butHCandNo 2. Whenecothrottleisinoperation 1. SimilarmodelshaveobtainedanemissionspermitintheUnitedStates,butproductsmarketedJapanarenotguaranteedto Note: MaindataarevaluessubmittedinthetypecertificationapplicationformaccordancewithRoadVehicleAct. Multipurpose EngineEmissionsStandards Durationofcontinuousdriving(hr.) Weight (kg) byMLIT) (values examined Engine ManufacturersAssociation(g/kWh) economy Fuel regulations) (new engine standards 2003 primary (g/kW-hr) (Phase 2) EPA regulations Standards ofJapan Motorcycle ExhaustEmissions Marketing date Marketing date NOx (nitrogenoxides)g/km HC (hydrocarbons)g/km CO (carbonmonoxide)g/km Noise concentrations gas Emission (g/bhp-hr) regulations CARB Tier2 Applicable models Applicable models Applicable models regulations) (in-use standards 2008 secondary Engine model/type Type Type name Noise level rate Fuel consumption Vehicle weight(kg) Transmission Total enginedisplacement(cm Engine model/type Type Total enginedisplacement(cm concentration Emission gas Motorcycles Power Equipment Voluntary StandardsoftheJapanLand 1 Fuel consumptionrate(g/kWh) Noise attheearLpa(dB(A)) EU guaranteednoisevaluesLwa(dB(A)) unit Engine Item Item Item Model Name NO HC CO NO HC CO NO HC CO NO HC CO CARB Tier2compliancewithmultipurposeengineemissionstandards EPA Phase2compliancewithmultipurposeengineemissionstandards Fuel consumptionrateatmaximumoutput(g/kWh) NO HC (g/km) CO (g/km) Continuously variable Constant mesh Constant speedpass-bynoisedB(A) Acceleration noisedB(A) Exhaust noiseneartheoutletdB(A) 30 km/hconstantspeedtestvalue 60 km/hconstantspeedtestvalue x x x x x EnvironmentalDataforNewModelsandRemodeledMotorcyclesSoldinJapanFiscal2004(MajorModels) deterioration) (Including aging deterioration) (Including aging deterioration) (Including aging deterioration) (Including aging deterioration) (Including aging deterioration) (Including aging (g/km) 4-stroke Regulation Values Category 13.00 0.30 2.00 EnvironmentalDataforNewModelsandRemodeledProductsSoldinJapanFiscal2004(MajorModels) 3 3 ) ) 2-stroke Salad FF500/FF500H,HRX537 Salad FF500/FF500H,HRX537 Salad FF500/FF500H,HRX537 Constant speedpass-bynoise,standardvaluedB(A) Acceleration noise,standardvaluedB(A) Exhaust noiseneartheoutlet,standardvaluedB(A) 0.10 3.00 8.00 Stationary, 100–225cc Continuously variable water-cooled 4-stroke 65–225 cc,horizontal 94/85 (3500rpm) 71/69 (40km/h) 2004.6.30 BA-MF09 100–225 cc MF04E PS250 Noise RegulationValuesofJapan(EffectiveonandafterOctober1,2001) 73/72 37.2 0.24 1.60 10.5 (V-Matic) 249 171 16.1 16.1 16.1 – – 410 610 610 519 12 x x 1 1 valuesarenot. valuesarenot. noieEgn qimn Engine forportable devices Unmobile EngineEquipment Continuously variable air-cooled 4-stroke 84/81 (4000rpm) (1/4 loadtoratedload) 65/63 (18km/h) Air-cooled, 4-strokesingle-cylinderOHV Dio Cesta BA-AF62 EM45is/EB45i 2004.7.2 AF61E EAJJ/EALJ EM45is: 95 71/70 65.0 0.26 1.60 10.5 (V-Matic) EB45i: 90 Item 49 81 12 GX340 – – 390 337 2 81 96 ● ● ● –5.2 Small PowerGenerator 2004.7.1 water-cooled 4-stroke 94/89 (5750rpm) 72/69 (50km/h) Sno Sno 6-speed return CBR600RR Stationary, 225–1,000cc 2005.1.27 BC-PC37 (1/4 loadtoratedload) PC37E wr wr 73/72 29.0 0.24 1.60 10.5 194 599 a a EM55is/EB55i – – 225 ccormore EAHJ/EAKJ EM55is: 95 i i EB55i: 90 10.2 HSS970i/HSS970iH HSS970i/HSS970iH GX390 (12.1) (12.1) (610) (13.4) (519) Class AMotorcycle 390 389 610 82 97 ● ● ● 2 EM45is/EM55is,EB45i/EB55i, SnowraiHSS –4.2 50cc orLess 2 2 2 2 1 air-cooled 4-stroke 84/79 (4000rpm) 65 71 84 65/63 (25km/h) 5-speed return XR50 2005.2.25 BA-AD14 AC16E 71/69 86.0 0.24 1.60 10.5 83 49 • Air-cooled, 4-strokeOHV – – Motard HSS970i/HSS970iH Snow Plow Snowra i 2004.9.1 GXV340 EAGJ 313 163 337 Over 50ccto125ccorLess 82 99 225 ccormore ● ● ● – air-cooled 4-stroke 90/80 (4000rpm) XR100 68/67 (40km/h) 5-speed return Class BMotorcycle 68 71 90 2005.2.25 BC-HD13 410 (9) HC07E 71/70 53.2 0.24 1.60 10.5 meet thosestandards. 1 86 99 – – • Motard single-cylinderverticalOHC Equipped weight: EM45is/EM55is, EB45i/EB55i EM45is/EM55is, EB45i/EB55i FF500/FF500H Air-cooled, 4-stroke, Dry weight:74 Handheld, 50ccormore Small Tiller 2004.9.1 GCV160 Salad FANJ air-cooled 4-stroke 94/81 (3750rpm) 71/68 (40km/h) 970i/HSS970iH 313 160 6-speed return 50 ccormore 79 93 ● ● ● – 2005.3.25 BA-MD36 MD33E XR230 73/72 40.0 0.24 1.40 10.5 603 603 166 603 120 223 72 72 – – Over 125ccto250ccorLess 71 73 94 78 Equipped weight: Light Vehicle Walking TypeLawnMower Air-cooled, 4-stroke, single-cylinder OHC Dry weight:42.1 Related Data air-cooled 4-stroke 94/84 (3500rpm) XR400 72/69 (50km/h) 5-speed return 2005.2.17 GCV190 HRX537 MAGA 2005.3.29 BC-ND08 100 313 187 NC38E 88 ● ● ● 73/72 36.0 0.24 1.60 10.5 – 397 145 – – • 61 Motard 72 73 94 43.6 Small Vehicle

Related Data Over 250cc Data of Japanese Factories Water Quality, Air Quality, and PRTR

(Supplementary explanation) The tables are based on measurements taken between April 2004 and March 2005. Water Quality, Water Quality • Items given are those substances for which measurements are required by the Water Pollution Control Law and bylaws of local government authorities. Air Quality, • The listed data had been obtained by statistical processing of our monthly data. Measurements of substances not listed here are conducted on an ongoing basis to ensure that they are in line with regulatory standards. and PRTR Air Quality • Items given are those substances for which measurements are required by the Water Pollution Control Law and bylaws of local government authorities. • The equipment measured includes boilers, drying ovens, incinerators, etc. Honda Motor Co., Ltd.

Saitama Factory ●Address: 1-10-1 Shin-Sayama, Sayama City, ●Number of employees: 5,522 (as of March 31, 2005) Saitama Prefecture ●Water discharge points: Sewage system (domestic and ●Established: 1964 industrial wastewater), Iruma River (indirect cooling water) ●Main products: Legend, Odyssey, Accord, etc. ●ISO 14001 acquired: January 1998

Water Quality Air Quality

Regulation Voluntary Measurement Results Regulation Voluntary Measurement Results Item Unit Standards (Incl. Regulation Maximum Item Unit Standards (Incl. Regulation Maximum Agreed Standards) Standards (minimum) Average Agreed Standards) Standards (minimum) Average 0.005 Hydrogen ion concentration pH 5–9 5–9 7.3 (6.5) 6.9 3 0.20 0.10 (Less than 0.002) 0.0006 R Particulates g/Nm 0.001 Biochemical oxygen demand (BOD) mg/ 600 360 300 (120) 205 0.25 0.125 (Less than 0.005) 0.0005 R 8.7 Suspended solids (SS) mg/ 600 360 64 (18) 30.8 70 10 (Less than 7.4) 4.08 Oil content mg/R 30 18 14 (4.4) 7.6 130 65 65 (64) 64.5 Phenols mg/R 5 3 Less than 0.1 Less than 0.1 150 75 63 (38) 52.7 Nitrogen oxides ppm Copper and its compounds mg/R 3 2 Less than 0.1 Less than 0.1 180 90 22 (15) 18.5 Zinc and its compounds mg/R 5 3 0.5 (0.2) 0.33 230 115 110 (23) 55.2 Soluble iron and its compounds mg/R 10 6 Less than 0.5 Less than 0.5 250 125 100 (97) 98.5 R 3 25 Soluble manganese and its compounds mg/ 10 6 2.1 (0.9) 1.5 Hydrogen chloride mg/Nm 500 200 (Less than 2.8) 12.5 Total chromium mg/R 2 1.2 Less than 0.5 Less than 0.5 Sulphur oxides Nm3/h 7.78 3.89 0.643 (0.14) 0.39 Fluorine content mg/R 8 5 2.8 (1.4) 2.03 Dioxins ng-TEQ/Nm3 2.5 0.1 0.06 0.06 Colon bacillus colony count No./cm3 Excluded because of release to the sewage system Nitrogen content mg/R Excluded because of release to the sewage system Phosphorous content mg/R Excluded because of release to the sewage system Cadmium and its compounds mg/R 0.1 0.06 Less than 0.01 Less than 0.01 Cyanides mg/R 1 0.6 Less than 0.1 Less than 0.1 R 0.009 Lead and its compounds mg/ 0.1 0.06 (Less than 0.001) 0.002 Chromium (VI) compounds mg/R 0.5 0.3 Less than 0.05 Less than 0.05 * Domestic and industrial wastewater (sewage)

PRTR Listed Substances (Unit: kg) Volume Discharged Volume Transferred Volume 100 Volume Consumed Substance Volume Handled Waste Disposal Recycling (Transferred to Atmosphere Public Waters Sewage Sites Outside Company Disposed Products) Soluble zinc compounds 28,869 0 0 289 4,619 0 0 23,961 Bis Phenol A epoxy resins 53,658 0 0 0 1,695 0 1,142 50,821 Ethyl benzene 462,627 186,640 0 0 0 176,824 24,449 74,714 Ethylene glycol 1,845,558 0 0 0 0 0 0 1,845,558 Xylene 1,092,989 293,538 0 0 0 393,657 63,260 342,534 Tr ichlorofluoromethane 1,100 0 0 0 1,100 0 0 0 1,3,5-Trimethyl benzene 40,411 35,757 0 0 0 0 4,654 0 Toluene 1,302,827 527,910 0 0 0 23,547 111,005 640,365 Nickel compounds 5,748 0 0 1,322 977 0 0 3,449 Bis (2-ethylhexyl) phthalic acid 35,100 0 0 0 777 0 80 34,243 Benzene 31,851 45 0 0 0 0 1,803 30,003 Polyoxyethylene alkyl ether 1,247 0 0 125 561 0 561 0 Formaldehyde – 2,228 0 0 0 0 0 0 Manganese and its compounds 11,660 0 0 583 4,664 0 0 6,413 Total 4,913,645 1,046,118 0 2,319 14,393 594,028 206,954 3,052,061 Dioxins (unit: mg-TEQ) – 2.06 0 0 733.26 0 0 0

Note: For water and air quality, the items for which measurements are required by law are listed. 62 Dioxins (unit: mg-TEQ) T Benzene Nickel compounds T 1,3,5-Trimethyl benzene Xylene Ethylene glycol Ethyl benzene otal oluene F Hamamatsu To Chromium (VI)compounds Lead anditscompounds Cyanides Cadmium anditscompounds Phosphorous content Nitrogen content Colon bacilluscolony count content Fluorine T Soluble manganeseanditscompounds Soluble ironanditscompounds Zinc anditscompounds Copper anditscompounds Phenols Oil content Suspended solids(SS) Biochemical oxygen demand(BOD) Hydrogen ionconcentration T Soluble zinccompounds Chromium (VI)compounds Lead anditscompounds Cyanides Cadmium anditscompounds Phosphorous content Nitrogen content Colon bacilluscolony count content Fluorine T Soluble manganeseanditscompounds Soluble ironanditscompounds Zinc anditscompounds Copper anditscompounds Phenols Oil content Suspended solids(SS) Biochemical oxygen demand(BOD) Hydrogen ionconcentration PRTR Listed Substances PRTR ListedSubstances W W Substance otal chromium otal otal chromium actory ater Quality ater Quality c higi Factory Substance Item Item 5.7–8.7 ● ● ● ● ● ● No./cm No./cm 300 300 mg/ mg/ mg/ mg/ 0.5 0.1 0.1 5.8–8.6 15 10 10 35 mg/ mg/ mg/ mg/ mg/ mg/ mg/ mg/ mg/ mg/ mg/ mg/ mg/ mg/ mg/ mg/ mg/ mg/ mg/ mg/ mg/ 1 2 5 3 5 3,000 mg/ mg/ mg/ mg/ mg/ mg/ mg/ f Unit Unit Main products: Motorcycles, automatictransmissions Established: 1954 Address: 1-13-1AoiHigashi,HamamatsuCity, Main products:etc. suspensionparts, Engineparts, Established: 1970 19Matsuyama Cho, MohkaCity, Address: pH pH or automobiles, etc. 120 0.1 0.2 0.1 16 50 25 1 8 2 3 3 5 3 1 5 R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R

3 3 Agreed Standards) Agreed Standards)

Standards (Incl. Standards (Incl. Excluded becauseofreleasetothesewage system Excluded becauseofreleasetothesewage system Excluded becauseofreleasetothesewage system 5.7–8.7 Regulation Regulation 0.25 0.05 0.05 17.5 150 150 V 0.5 7.5 2.5 1.5 2.5 5.8–8.6 V Shizuoka Prefecture 1 5 5 1,500 olume Handled T olume Handled 0.05 0.05 12.5 0.1 0.5 1.5 1.5 2.5 1.5 0.5 2.5 60 25 ochigi Prefecture 8 4 1 476,997 125,138 118,335 209,628 15,531 – 3,582 2,482 2,301 10,020 10,020 Regulation Regulation Standards Standards Vol Vol 198 (19.5) 149 (26.7) 7.8 (7.1) untary untary 14.5 (1.3) 9.9 (4.5) 7.5 (7.0) (Less than0.01) (Less than0.01) (Less than0.01) (Less than2.5) Less than0.05 (Less than0.1) (Less than0.1) (Less than0.5) Less than0.05 Less than0.01 Less than0.01 Less than0.01 Less than0.05 Less than0.01 Less than0.01 Less than0.03 Less than0.1 Less than0.1 Less than0.1 Less than0.1 Less than0.1 0.03 (0.02) 0.23 (0.10) Measurement Results Measurement Results 0.7 (0.5) 0.4 (0.2) 12 (11) (minimum) (minimum) Maximum Maximum 11 (0) 11.7 0.02 0.09 2.2 1.7 3.5 topeePublic Waters Atmosphere 0.1 topeePublic Waters Atmosphere 52,331 10,652 37,020 13.00 1,636 3,009 14 V V 0 0 0 0 olume Discharged Less than0.05 olume Discharged Less than0.05 Less than0.01 Less than0.01 Less than0.05 Less than0.01 Less than0.01 Less than0.01 Less than0.03 Less than0.1 Less than0.1 Less than0.1 Less than0.1 Less than0.1 Aver Aver 0.025 92.5 64.7 0.30 0.19 0.05 11.5 0.05 0.01 0.30 0.66 4.1 7.4 0.6 0.9 5.0 7.0 7.3 2.2 age age Note: For water andairquality, theitemsfor whichmeasurementsarerequiredby law arelisted. Dioxins Sulphur oxides Hydrogen chloride Nitrogen oxides Pa 20 20 r 0 0 0 0 0 0 0 0 0 ticulates Sulphur oxides Nitrogen oxides Pa Air Quality Air Quality r ticulates ● ● ● V V ● ● ● 0.59 olume Transferred olume Transferred ISO 14001acquired: September1997 W Number ofemployees: 1,545(asofMarch31,2005) Sewage Sewage ISO 14001acquired: March1998 W Employees: 4,107(asofMarch31,2005) ater dischargepoint: Kokai River viaGogyo River 0 0 0 0 0 0 0 0 Item Item ater dischargepoint: IsajiRiver, DanzuRiver (rainwater only) 0 0 Sites OutsideCompany Sites OutsideCompany W W aste Disposal aste Disposal 20,965 14,959 ng-TEQ/Nm mg/Nm 85.00 4,138 1,203 K value Nm g/Nm 10,000 10,000 g/Nm ppm ppm 665 3 0 0 0 /h 3 3 3 3 Unit Agreed Standards) Unit Agreed Standards) Standards (Incl. Standards (Incl. Regulation Regulation 2.32 0.30 0.20 0.10 700 250 180 150 10 80 180 5 0.3 8 Recycling Recycling 9,423 5,036 3,434 266 687 Regulation Regulation Standards Standards Vol Vol 0.15 1.21 0.10 0.05 0 0 0 0 350 125 2.5 40 90 75 5 0 0 untary untary 0.15 135 4 (Less than0.05) (Less than0.02) (Less than0.005) (Less than0.001) Less than0.02 Less than0.02 Less than0.006 Less than0.46 Less than2.5 (minimum) (minimum) Maximum Maximum 85 (79) 89 (64) 52 (10) 68 (19) V 0.01 Measurement Results V Measurement Results 0.1 0.31 Disposed olume 100 Disposed olume 100 96 (37) 0 0 0 0 0 0 0 0 0 0 0 0 Related Data V V olume Consumed olume Consumed (Transferred to (Transferred to Products) Products) Less than0.02 Less than0.02 Less than0.02 Aver 394,278 105,312 209,628 Aver Less than2.5 62,922 10,632 Less than0.006 63 Less than0.36 3,302 2,482 (Unit: kg) (Unit: kg) 0.075 76.50 age age 0.31 33.9 51.3 82 0 0 0 92 0 0

Related Data Data of Japanese Factories Water Quality, Air Quality, and PRTR

Hamamatsu Factory ●Address: 5794-1 Kiga Aza Ohtsubo, Hosoe Cho, ●Employees: Included as Hamamatsu Factory employees ● Hosoe Plant Inasa Gun, Shizuoka Prefecture Water discharge point: Lake Hamana (rainwater only) ●Established: 2001 ●Main products: Outboard engines

Water Quality No applicable facilities Air Quality

Regulation Voluntary Measurement Results Regulation Item Unit Standards (Incl. Maximum Agreed Standards) Standards (minimum) Average Particulates g/Nm3 0.10 0.05 Less than 0.02 Less than 0.02 Nitrogen oxides ppm 150 75 67 53

PRTR Listed Substances (Unit: kg) Volume Discharged Volume Transferred Volume 100 Volume Consumed Substance Volume Handled Waste Disposal Recycling (Transferred to Atmosphere Public Waters Sewage Sites Outside Company Disposed Products) Ethyl benzene 4,558 18 0 0 0 117 0 4,423 Xylene 22,795 91 0 0 0 587 0 22,117 Toluene 33,433 134 0 0 0 861 0 32,438 Benzene 1,483 6 0 0 0 3 0 1,474 Total 62,269 249 0 0 0 1,568 0 60,452

Suzuka ●Address: 1907 Hirata Cho, Suzuka City, Mie Prefecture ●Employees: 7,092 (as of March 31, 2005) ● ● Factory Established: 1960 Water discharge point: Suzuka River ●Main products: Civic, Fit, Airwave, etc. ●ISO 14001 acquired: February 1998

Water Quality Air Quality

Regulation Voluntary Measurement Results Regulation Voluntary Measurement Results Regulation Regulation Item Unit Standards (Incl. Maximum Item Unit Standards (Incl. Maximum Agreed Standards) Standards (minimum) Average Agreed Standards) Standards (minimum) Average Hydrogen ion concentration pH 5.8–8.6 5.8–8.6 7.1 (6.6) 6.9 0.05 0.025 Less than 0.01 Less than 0.01 R Maximum 65/ Maximum 58/ Biochemical oxygen demand (BOD) mg/ average 50 average 45 38 (3) 14.7 3 0.10 0.050 Less than 0.01 Less than 0.01 Particulates g/Nm 0.02 Chemical oxygen demand (COD) kg/day 192.5 173.2 169.0 (80.4) 137.7 0.20 0.100 (Less than 0.01) Less than 0.01 R Maximum 90/ Maximum 81/ 0.02 Suspended solids (SS) mg/ average 70 average 63 25 (3) 10.3 0.50 0.250 (Less than 0.01) Less than 0.01 R 0.7 Oil content mg/ 1 0.9 (Undetected) 0.2 70 35 24.3 (22.6) 23.5 Phenols mg/R 1 0.9 Undetected Undetected 130 65 1.0 (1.0) 1.0 R 0.02 Copper and its compounds mg/ 1 0.9 (Undetected) 0.006 150 75 66.8 (20.4) 33.7 Zinc and its compounds mg/R 5 2.5 0.35 (0.04) 0.10 Nitrogen oxides ppm 180 90 74.7 (2.0) 28.6 Soluble iron and its compounds mg/R 10 5 1.75 (0.01) 0.54 200 100 30.7 (19.8) 25.3 R 0.5 Soluble manganese and its compounds mg/ 10 5 (Undetected) 0.278 230 115 41.9 (0.5) 21.6 Total chromium mg/R 2 1 Undetected Undetected 250 125 76.7 (74.7) 75.7 Fluorine content mg/R 8 4 2.8 (1.1) 1.9 Hydrogen chloride mg/Nm3 700 350 29(8) 18.5 Colon bacillus colony count No./cm3 3,000 1,500 Undetected Undetected Sulphur oxides K value 14.5 7.25 Less than 1 Less than 1 Nitrogen content mg/R 214.7 193.2 29.3 (12.9) 25.3 Dioxins ng-TEQ/Nm3 0.1 0.1 0.057 (0.021) 0.039 Phosphorous content mg/R 21.2 19.0 4.1 (1.2) 2.1 R 0.008 Cadmium and its compounds mg/ 0.1 0.05 (Undetected) 0.001 Cyanides mg/R 1 0.5 Undetected Undetected Lead and its compounds mg/R 0.1 0.05 Undetected Undetected Chromium (VI) compounds mg/R 0.5 0.25 Undetected Undetected

PRTR Listed Substances (Unit: kg) Volume Discharged Volume Transferred Volume 100 Volume Consumed Substance Volume Handled Waste Disposal Recycling (Transferred to Atmosphere Public Waters Sewage Sites Outside Company Disposed Products) Soluble zinc compounds 32,187 0 128 0 6,388 0 0 25,671 Bis Phenol A epoxy resins 55,635 0 0 0 302 0 1 55,332 Ethyl benzene 265,453 100,677 0 0 0 94,996 7,670 62,110 Ethylene glycol 1,302,947 0 0 0 0 0 0 1,302,947 Xylene 946,135 242,997 0 0 0 354,803 22,022 326,313 1,3,5-Trimethyl benzene 63,535 30,749 0 0 0 28,598 4,178 10 Toluene 742,548 231,064 0 0 0 18,773 25,169 467,542 Nickel compounds 4,719 0 229 0 1,608 0 0 2,882 Bis (2-ethylhexyl) phthalic acid 14,216 0 0 0 145 0 0 14,071 Hydrogen fluoride and soluble salt 1,900 0 0 0 0 0 1,900 0 Benzene 20,698 52 0 0 0 0 0 20,646 Polyoxyethylene alkyl ether 3,426 0 0 0 0 0 3,426 0 Manganese and its compounds 9,932 0 974 0 1,467 0 0 7,491 Total 3,463,331 605,539 1,331 0 9,910 497,170 64,366 2,285,015 Dioxins (unit: mg-TEQ) – 19.00 0 0 642.00 0 0 0

Note: For water and air quality, the items for which measurements are required by law are listed. 64 Related Data

Kumamoto ●Address: 1500 Hirakawa Ohaza, Ohzu Machi, ●Number of employees: 3,406 (as of March 31, 2005) ● Factory Kikuchi Gun, Kumamoto Prefecture Water discharge point: Kikuchi River via Hyuga River and Koushi River ●Established: 1976 ●ISO 14001 acquired: November 1997 ●Main products: Minibike, Mini vehicle engines, multipurpose engines, transmission parts for passenger vehicles, etc. Water Quality Air Quality

Regulation Voluntary Measurement Results Regulation Voluntary Measurement Results Item Unit Standards (Incl. Regulation Maximum Item Unit Standards (Incl. Regulation Maximum Agreed Standards) Standards (minimum) Average Agreed Standards) Standards (minimum) Average 0.008 Hydrogen ion concentration pH 5.8–8.6 6.5–7.9 7.9 (7.1) 7.6 3 0.05 0.025 (Less than 0.001) Less than 0.001 R 3.2 Particulates g/Nm 0.004 Biochemical oxygen demand (BOD) mg/ 7 3.5 (Less than 0.5) 1.2 0.1 0.05 (Less than 0.001) Less than 0.001 R 18.4 Suspended solids (SS) mg/ 10 5 3.3 (1.0) 2.1 150 75 (Less than 5.0) 12.3 R 0.7 27.5 Oil content mg/ 1 0.5 (Less than 0.5) Less than 0.5 Nitrogen oxides ppm 180 90 (Less than 2.0) 15.8 R 4.7 Phenols mg/ 0.05 0.025 Less than 0.025 Less than 0.025 230 115 (Less than 3.0) 2.2 Copper and its compounds mg/R 0.3 0.15 Less than 0.05 Less than 0.02 Zinc and its compounds mg/R 1.5 0.75 0.11 (0.06) 0.09 R 0.09 Soluble iron and its compounds mg/ 3 1.5 (Less than 0.05) 0.07 R Should not Below Soluble manganese and its compounds mg/ be detected detection limit Undetected Undetected Total chromium mg/R 0.1 0.05 Less than 0.02 Less than 0.02 Fluorine content mg/R 8 4 0.09 (0.09) 0.09 Colon bacillus colony count No./cm3 3,000 1,500 180 (180) 180 Nitrogen content mg/R 60 30 45 (29) 40 Phosphorous content mg/R 8 4 2 (1) 1.3 R Should not Below Cadmium and its compounds mg/ be detected detection limit Undetected Undetected Cyanides mg/R 0.1 0.05 Less than 0.1 Less than 0.1 R Should not Below Lead and its compounds mg/ be detected detection limit Undetected Undetected Chromium (VI) compounds mg/R 0.05 0.025 Less than 0.04 Less than 0.04

PRTR Listed Substances (Unit: kg) Volume Discharged Volume Transferred Volume 100 Volume Consumed Substance Volume Handled Waste Disposal Recycling (Transferred to Atmosphere Public Waters Sewage Sites Outside Company Disposed Products) Bis Phenol A epoxy resins 1,710 34 0 0 0 0 0 1,676 Ethyl benzene 19,292 13,347 0 0 0 527 84 5,334 Ethylene glycol 59,608 0 0 0 0 0 0 59,608 Xylene 231,737 121,370 0 0 0 69,125 7,893 33,349 Toluene 79,444 25,667 0 0 0 13,621 242 39,914 Total 391,791 160,418 0 0 0 83,273 8,219 139,881

Automobile ●Address: 2900 Kamitakanezawa Ohaza, Takanezawa Machi, ●Number of employees: 481 (as of March 31, 2005) ● New Model Center Shioya Gun, Tochigi Prefecture Water discharge point: Nomoto River via Haga Industrial ●Established: 1995 Park Treatment Center ●Main products: Manufacturing of fuel cell vehicles and technical support of automobile manufacturing Water Quality Air Quality

Hydrogen ion concentration pH 5.8–8.6 5.8–8.6 7.8 (6.9) 7.3 3 0.2 0.16 0.002 or less 0.002 or less 3.9 Particulates g/Nm Biochemical oxygen demand (BOD) mg/R 25 12.5 (Less than 0.1) 1.2 0.3 0.24 0.002 0.002 Chemical oxygen demand (COD) mg/R 25 12.5 9.3 (1.8) 4.7 180 126 110 100.0 5.2 Nitrogen oxides ppm Suspended solids (SS) mg/R 50 25 (Less than 1.0) 1.2 230 115 Less than 75 42.0 0.5 Oil content mg/R 5 2.5 (Less than 0.5) Less than 0.5 7 5.6 0.0 0.0 Sulphur oxides K value Phenols mg/R 1 0.5 Less than 0.1 Less than 0.1 7 5.6 Less than 0.02 Less than 0.02 Below Copper and its compounds mg/R 3 detection limit Less than 0.1 Less than 0.1 Zinc and its compounds mg/R 5 2.5 Less than 0.1 Less than 0.1 0.2 Soluble iron and its compounds mg/R 3 1.5 (Less than 0.1) 0.15 Soluble manganese and its compounds mg/R 3 1.5 Less than 0.1 0.1 Total chromium mg/R 2 1 Less than 0.1 Less than 0.1 Fluorine content mg/R 8 4 3 (2.4) 2.7 Colon bacillus colony count No./cm3 3,000 Less than 1,500 70 (0) 3.2 Nitrogen content mg/R Less than 20 Less than 14 11.3 (8.1) 10 0.2 Phosphorous content mg/R Less than 2 Less than 1 (Less than 0.1) 0.2 Cadmium and its compounds mg/R Undetected Undetected Less than 0.005 Less than 0.005 Cyanides mg/R Undetected Undetected Less than 0.005 Less than 0.005 Lead and its compounds mg/R Undetected Undetected Less than 0.01 Less than 0.01 Chromium (VI) compounds mg/R Undetected Undetected Less than 0.002 Less than 0.002

PRTR Listed Substances Related Data (Unit: kg) Volume Discharged Volume Transferred Volume 100 Volume Consumed Substance Volume Handled Waste Disposal Recycling (Transferred to Atmosphere Public Waters Sewage Sites Outside Company Disposed Products) Ethylene glycol 4,475 0 0 0 0 0 0 4,475 Xylene 8,165 323 0 0 55 0 84 7,703 Toluene 11,155 1,082 0 0 123 787 193 8,970 Total 23,795 1,405 0 0 178 787 277 21,148 Note: For water and air quality, the items for which measurements are required by law are listed. 65 Data of Japanese Factories Water Quality, Air Quality, and PRTR

Quality Innovation ●Address: 52-1 Hagadai, Haga Machi, Haga Gun, Tochigi Prefecture ●Number of employees: 443 (as of March 31, 2005) ● ● Center Tochigi Established: April 2003 Water discharge point: Nomoto River via Haga Industrial ●Main products: Responses to quality issues in the market Park Treatment Center

Water Quality Air Quality

Regulation Voluntary Measurement Results Regulation Voluntary Measurement Results Item Unit Standards (Incl. Regulation Maximum Item Unit Standards (Incl. Regulation Maximum Agreed Standards) Standards (minimum) Average Agreed Standards) Standards (minimum) Average Hydrogen ion concentration pH 5.8–8.6 5.8–8.6 7.8 (6.9) 7.6 Particulates g/Nm3 0.3 0.15 0.005 or less 0.005 or less 3.9 Biochemical oxygen demand (BOD) mg/R 25 12.5 (Less than 0.1) 0.8 Nitrogen oxides ppm 180 90 68.0 62.0 Chemical oxygen demand (COD) mg/R 25 12.5 9.3 (1.8) 3.2 Sulphur oxides K value 7 3.5 Less than 0.1 Less than 0.1 5.2 Suspended solids (SS) mg/R 50 25 (Less than 1.0) 1.9 1.4 Oil content mg/R 5 2.5 (Less than 0.5) 0.3 Phenols mg/R 1 0.5 Less than 0.05 Less than 0.05 Copper and its compounds mg/R Undetected Undetected Undetected Undetected 0.07 Zinc and its compounds mg/R 5 2.5 (Less than 0.06) 0.065 Soluble iron and its compounds mg/R 3 1.5 Less than 0.05 Less than 0.05 Soluble manganese and its compounds mg/R 3 1.5 Less than 0.01 Less than 0.01 Total chromium mg/R 2 1 Less than 0.1 Less than 0.1 0.2 Fluorine content mg/R 8 6.5 (Less than 0.01) Less than 0.01 Colon bacillus colony count No./cm3 3,000 1,500 15 (0) 0.63 Nitrogen content mg/R 20 10 1.7 (0.9) 1.3 Phosphorous content mg/R 2 1 Less than 0.05 Less than 0.05 Cadmium and its compounds mg/R Undetected Undetected Undetected Undetected Cyanides mg/R Undetected Undetected Undetected Undetected Lead and its compounds mg/R Undetected Undetected Undetected Undetected Chromium (VI) compounds mg/R Undetected Undetected Undetected Undetected

PRTR Listed Substances (Unit: kg) Volume Discharged Volume Transferred Volume 100 Volume Consumed Substance Volume Handled Waste Disposal Recycling (Transferred to Atmosphere Public Waters Sewage Sites Outside Company Disposed Products) Ethyl benzene 1,026 245 0 0 0 0 378 403 Xylene 5,280 1,019 0 0 0 0 1,888 2,373 Toluene 10,331 2,371 0 0 0 0 4,371 3,589 Benzene 323 78 0 0 0 0 115 130 Total 16,960 3,713 0 0 0 0 6,752 6,495

Note: For water and air quality, the items for which measurements are required by law are listed. 66 Related Data

Groundwater Results of Groundwater Test Taken at Plants and Factories in Japan in Fiscal 2004 Branch Substance Detected Legal Limit Saitama Factory Tochigi Factory Hamamatsu Factory Suzuka Factory Chromium (VI) 0.05mg/R or less Less than 0.005 Less than 0.005 Less than 0.02 Less than 0.04 Lead 0.01mg/R or less 0.001 Less than 0.005 Less than 0.005 Less than 0.005 Cadmium 0.01mg/R or less Less than 0.001 Less than 0.001 Less than 0.001 Less than 0.001 Total mercury 0.0005mg/R or less Less than 0.00005 Less than 0.0005 Less than 0.0005 Less than 0.0005 Alkyl mercury Should not be detected Less than 0.00005 Less than 0.0005 Less than 0.0005 Undetected Total cyanides Should not be detected Less than 0.01 Less than 0.1 Less than 0.1 Undetected PCB Should not be detected Less than 0.00005 Less than 0.0005 Less than 0.0005 Undetected Selenium 0.01mg/R or less Less than 0.001 Less than 0.001 Less than 0.002 Less than 0.001 Fluorine 0.8mg/R or less 0.47 Less than 0.2 Less than 0.08 Less than 0.1 Boron 1.0mg/R or less Less than 0.1 Less than 0.1 Less than 0.05 0.03 Arsenic 0.01mg/R or less Less than 0.001 Less than 0.001 Less than 0.001 Less than 0.005 Benzene 0.01mg/R or less Less than 0.001 Less than 0.001 Less than 0.001 Less than 0.001 Dichloromethane 0.02mg/R or less Less than 0.002 Less than 0.002 Less than 0.002 Less than 0.002 Tetrachloride carbon 0.002mg/R or less Less than 0.0002 Less than 0.0002 Less than 0.0002 Less than 0.0005 1,2-dichloroethane 0.004mg/R or less Less than 0.0004 Less than 0.0004 Less than 0.0004 Less than 0.0004 1,1-dichloroethylene 0.02mg/R or less Less than 0.002 0.002 Less than 0.002 Less than 0.002 Cis-1,2-dichloroethylene 0.04mg/R or less Less than 0.004 Less than 0.004 Less than 0.004 Less than 0.004 1,1,1-trichloroethane 1.0mg/R or less Less than 0.002 Less than 0.0005 Less than 0.0005 Less than 0.001 1,1,2-trichloroethane 0.006mg/R or less Less than 0.0006 Less than 0.0006 Less than 0.0006 Less than 0.0006 Tr ichloroethylene 0.03mg/R or less Less than 0.003 0.029* 0.004 Less than 0.002 Tetrachloroethylene 0.01mg/R or less 0.003 0.0296* 0.0027 Less than 0.0005 1,3-dichloropropane 0.02mg/R or less Less than 0.0002 Less than 0.0002 Less than 0.0002 Less than 0.0002 Thiram 0.006mg/R or less Less than 0.0006 Less than 0.0006 Less than 0.0006 Less than 0.0006 Simazine 0.003mg/R or less Less than 0.0003 Less than 0.0003 Less than 0.0003 Less than 0.0003 Thiobencarb 0.02mg/R or less Less than 0.002 Less than 0.002 Less than 0.002 Less than 0.002 Organic phosphorus compound Should not be detected Less than 0.1 Less than 0.1 – Undetected

Branch Substance Detected Legal Limit Kumamoto Factory Automobile New Model Center Quality Innovation Center Tochigi Chromium (VI) 0.05mg/R or less Less than 0.005 Less than 0.005 Less than 0.005 Lead 0.01mg/R or less Less than 0.001 Less than 0.001 0.004–less than 0.001 Cadmium 0.01mg/R or less Less than 0.001 Less than 0.001 Less than 0.001 Total mercury 0.0005mg/R or less Less than 0.00005 Less than 0.001 Less than 0.00005 Alkyl mercury Should not be detected Less than 0.0005 Less than 0.0005 Less than 0.00005 Total cyanides Should not be detected Less than 0.001 Less than 0.1 Less than 0.05 PCB Should not be detected Less than 0.0005 Less than 0.0005 Less than 0.00005 Selenium 0.01mg/R or less Less than 0.001 Less than 0.001 Less than 0.001 Fluorine 0.8mg/R or less Less than 0.08 Less than 0.2 Less than 0.2 Boron 1.0mg/R or less Less than 0.1 Less than 0.1 Less than 0.1 Arsenic 0.01mg/R or less Less than 0.001 Less than 0.001 Less than 0.001 Benzene 0.01mg/R or less Less than 0.001 Less than 0.001 Less than 0.001 Dichloromethane 0.02mg/R or less Less than 0.002 Less than 0.002 Less than 0.002 Tetrachloride carbon 0.002mg/R or less Less than 0.0002 Less than 0.0002 Less than 0.0002 1,2-dichloroethane 0.004mg/R or less Less than 0.0004 Less than 0.0004 Less than 0.0004 1,1-dichloroethylene 0.02mg/R or less Less than 0.002 Less than 0.002 Less than 0.002 Cis-1,2-dichloroethylene 0.04mg/R or less Less than 0.004 Less than 0.004 Less than 0.004 1,1,1-trichloroethane 1.0mg/R or less Less than 0.003 Less than 0.0005 Less than 0.001 1,1,2-trichloroethane 0.006mg/R or less Less than 0.0006 Less than 0.0006 Less than 0.0006 Tr ichloroethylene 0.03mg/R or less Less than 0.003 Less than 0.001 Less than 0.001 Tetrachloroethylene 0.01mg/R or less Less than 0.001 Less than 0.0005 Less than 0.0005 1,3-dichloropropane 0.02mg/R or less Less than 0.0002 Less than 0.0002 Less than 0.0002 Thiram 0.006mg/R or less Less than 0.0006 Less than 0.0006 Less than 0.0006 Simazine 0.003mg/R or less Less than 0.0003 Less than 0.0003 Less than 0.0003 Thiobencarb 0.02mg/R or less Less than 0.002 Less than 0.002 Less than 0.002 Organic phosphorus compound Should not be detected Less than 0.1 Less than 0.1 Not applicable

● The figures in the chart are the certified measurements of a measurement * At the Tochigi Factory, the tetrachloroethylene content in groundwater exceeded the legal limit

company, and have been listed with no amendment. (0.01 mg/R or less), and the trichloroethylene content was near the legal limit (0.03 mg/R or less). Related Data Legend The factory, however, has never used these two substances. In the Matsuyama-cho District in Moka Undetected, less than ___: Indicate that figures are the minimum amount City, where the Tochigi Plant is located, groundwater pollution by organic chlorine compounds, detectable by the measuring equipment used and that nothing was detected including tetrachloroethylene and trichloroethylene, was detected. Tochigi Prefecture and Moka City are now monitoring groundwater in areas where these pollutants were detected. (For the monitoring results, please refer to the following Web site: www.city.moka.tochigi.jp/densi/mizukankyou.htm.) The Tochigi Plant will also continue monitoring and measuring these substances.

Note: For water and air quality, the items for which measurements are required by law are listed. 67 Data of Japanese Factories Water Quality, Air Quality, and PRTR

Honda R&D Co., Ltd.

Wako R&D Center/ ●Address: 1-4-1 Chuo, Wako City, Saitama Prefecture ● Wako Basic Technology Established: 1960 (spin-off from Honda Motor Co., Ltd.) ●Main products: Automobile design research, various basic research and development, Research Center/ and development of aircraft engines Wako Nishi R&D Center ●Water discharge point: Wastewater Treatment Center, located in the Arakawa Right Bank District (sewage)

Water Quality Air Quality

Regulation Voluntary Measurement Results Regulation Voluntary Measurement Results Item Unit Standards (Incl. Regulation Maximum Item Unit Standards (Incl. Regulation Maximum Agreed Standards) Standards (minimum) Average Agreed Standards) Standards (minimum) Average Hydrogen ion concentration pH 5.0–9.0 5.0–9.0 8.6 (7.3) 8.0 Particulates g/Nm3 0.1 0.05 Less than 0.01 Less than 0.01 Biochemical oxygen demand (BOD) mg/R 600 300 310 (5.8) 77 Nitrogen oxides ppm 150 75 70 (19) 32 Chemical oxygen demand (COD) mg/R Excluded because of release to the sewage system Sulphur oxides K value 9 4.5 0.3 (0.1) 0.2 Suspended solids (SS) mg/R 600 300 260 (10) 76 Oil content mg/R 30 15 12 (2) 3.4 Phenols mg/R 5 2.5 Less than 0.5 Less than 0.5 Copper and its compounds mg/R 3 1.5 Less than 0.1 Less than 0.1 Zinc and its compounds mg/R 5 2.5 Less than 0.5 Less than 0.5 Soluble iron and its compounds mg/R 5 2.5 Less than 1 Less than 1 Soluble manganese and its compounds mg/R 10 5 Less than 1 Less than 1 Total chromium mg/R 2 1 Less than 0.1 Less than 0.1 Fluorine content mg/R 8 4 Less than 1 Less than 1 Colon bacillus colony count No./cm3 Excluded because of release to the sewage system Nitrogen content mg/R 240 120 72 (4.2) 25 Phosphorous content mg/R 32 16 5.9 (0.3) 2.5 Cadmium and its compounds mg/R 0.1 0.05 Less than 0.01 Less than 0.01 Cyanides mg/R 1 0.5 Less than 0.1 Less than 0.1 Lead and its compounds mg/R 0.1 0.05 Less than 0.01 Less than 0.01 Chromium (VI) compounds mg/R 0.5 0.25 Less than 0.05 Less than 0.05

PRTR Listed Substances (Unit: kg) Volume Discharged Volume Transferred Volume 100 Volume Consumed Substance Volume Handled Waste Disposal Recycling (Transferred to Atmosphere Public Waters Sewage Sites Outside Company Disposed Products) Ethyl benzene 1,158 249 0 0 33 0 876 0 Xylene 6,388 882 0 0 125 0 5,381 0 Toluene 9,925 933 0 0 159 0 8,833 0 Total 17,471 2,064 0 0 317 0 15,090 0

Asaka R&D Center/ ●Address: 3-15-1 Senzui, Asaka City, Saitama Prefecture ●Established: 1973 Asaka Higashi ● R&D Center Main Products: Research and development of motorcycles and power products ●Water discharge point: Arakawa River Right Bank District Shingashi River Sewage Treatment Center

Water Quality Air Quality

Regulation Voluntary Measurement Results Regulation Voluntary Measurement Results Regulation Regulation Item Unit Standards (Incl. Maximum Item Unit Standards (Incl. Maximum Agreed Standards) Standards (minimum) Average Agreed Standards) Standards (minimum) Average 3 Less than 0.0059 Hydrogen ion concentration pH 5.0–9.0 5.8–8.6 9.5* (7.0) 8.0 Particulates g/Nm 0.1 0.07 (Less than 0.0059) Less than 0.0059 Biochemical oxygen demand (BOD) mg/R 600 420 370 (1.6) 164.9 Nitrogen oxides ppm 150 105 40 40 Less than 0.098 Chemical oxygen demand (COD) mg/R Excluded because of release to the sewage system Sulphur oxides K value 9 6.3 (Less than 0.0046) 0.0763 Suspended solids (SS) mg/R 600 420 560 (3.6) 208.4 20.5 Oil content mg/R 30 21 (Less than 1) 9.0 0.32 Phenols mg/R 5 3.5 (Undetected) 0.2 0.04 Copper and its compounds mg/R 3 2.1 (Undetected) 0.02 Zinc and its compounds mg/R 5 3.5 0.34 (0.04) 0.15 Soluble iron and its compounds mg/R 10 7 0.34 (0.05) 0.18 Soluble manganese and its compounds mg/R 10 7 0.02 (0.01) 0.02 Total chromium mg/R 2 1.4 Less than 0.1 Less than 0.1 Fluorine content mg/R 8 5.6 Less than 0.1 Less than 0.1 Colon bacillus colony count No./cm3 Excluded because of release to the sewage system Nitrogen content mg/R 240 168 104 (25.2) 62.0 Phosphorous content mg/R 32 22.4 9.5 (0.5) 5.5 Cadmium and its compounds mg/R 0.1 0.07 Less than 0.005 Less than 0.005 Cyanides mg/R 1 0.7 Less than 0.1 Less than 0.1 Lead and its compounds mg/R 0.1 0.07 Less than 0.05 Less than 0.05 Chromium (VI) compounds mg/R 0.5 0.35 Less than 0.02 Less than 0.02 * Because the measurement results exceeded the regulation standards when construction work was being carried out at the facilities, neutralization measures were immediately taken, and wastewater subsequently released into the sewage system had a lower pH.

PRTR Listed Substances (Unit: kg) Volume Discharged Volume Transferred Volume 100 Volume Consumed Substance Volume Handled Waste Disposal Recycling (Transferred to Atmosphere Public Waters Sewage Sites Outside Company Disposed Products) Ethyl benzene 12,437 33 0 0 179 0 12,225 0 Xylene 60,244 69 0 0 807 0 59,368 0 Toluene 108,374 179 0 0 2,697 0 105,498 0 Benzene 3,997 1 0 0 0 0 3,996 0 Total 185,052 282 0 0 3,683 0 181,087 0

Note: For water and air quality, the items for which measurements are required by law are listed. 68 Related Data

Tochigi R&D Center ●Address: 4630 Shimotakanesawa, Haga Machi, Haga Gun, Tochigi Prefecture ●Established: 1982 (Tochigi Laboratory, Wako Research Center) ●Main Products: General automobile research (design, trial production, and testing of engines, bodies, and chassis) ●Water discharge point: Nomoto River via Haga Industrial Park Treatment Center (domestic and industrial water)

Water Quality Air Quality

Regulation Voluntary Measurement Results Regulation Voluntary Measurement Results Item Unit Standards (Incl. Regulation Maximum Item Unit Standards (Incl. Regulation Maximum Agreed Standards) Standards (minimum) Average Agreed Standards) Standards (minimum) Average Less than 0.006 Hydrogen ion concentration pH 5.8–8.6 5.8–8.6 7.5 (7) 6.45 0.15 0.105 (0.005) 0.005 3 0.002 Biochemical oxygen demand (BOD) mg/R 25 17.5 2.1 (0.1) 0.88 Particulates g/Nm 0.3 0.21 (Less than 0.001) 0.001 Less than 0.005 Chemical oxygen demand (COD) mg/R 25 17.5 8.6 (4.7) 6.55 0.5 0.35 (Less than 0.003) 0.004 Suspended solids (SS) mg/R 50 35 2.4 (0) 0.77 150 105 67 (38) 54.8 Oil content mg/R 5 3.5 0.8 (0) 0.1 Nitrogen oxides ppm 180 126 73 (46) 60.5 Phenols mg/R 1 0.7 Less than 0.01 Less than 0.01 250 175 100 (41) 74 3 Less than 73 Copper and its compounds mg/R 3 2.1 Less than 0.02 Less than 0.02 Hydrogen chloride mg/Nm 700 490 (Less than 55) 64 Less than 0.24 Zinc and its compounds mg/R 5 3.5 0.21 (0.13) 0.17 Sulphur oxides K value 7 4.9 (0.009) 0.091 Soluble iron and its compounds mg/R 3 2.1 Less than 0.02 Less than 0.02 Dioxins ng-TEQ/Nm3 10 0.1 0.041 0.041 Soluble manganese and its compounds mg/R 3 2.1 Less than 0.005 Less than 0.005 Total chromium mg/R 2 1.4 0.22 0.22 Fluorine content mg/R 8 5.6 Less than 0.1 Less than 0.1 Colon bacillus colony count No./cm3 3,000 2,100 29 (0) 10.67 Nitrogen content mg/R 20 – 20 (12) 15.08 Phosphorous content mg/R 2 1.4 0.32 (0.09) 0.15 R Should not Below Cadmium and its compounds mg/ be detected detection limit Less than 0.005 Less than 0.005 R Should not Below Cyanides mg/ be detected detection limit Less than 0.1 Less than 0.1 R Should not Below Lead and its compounds mg/ be detected detection limit Less than 0.05 Less than 0.05 R Should not Below Chromium (VI) compounds mg/ be detected detection limit Less than 0.02 Less than 0.02

PRTR Listed Substances (Unit: kg) Volume Discharged Volume Transferred Volume 100 Volume Consumed Substance Volume Handled Waste Disposal Recycling (Transferred to Atmosphere Public Waters Sewage Sites Outside Company Disposed Products) Ethyl benzene 50,110 890 0 0 60 0 49,160 0 Ethylene glycol 2,172 43 0 0 28 0 2,101 0 Xylene 407,392 7,100 0 0 610 0 399,682 0 Dichloromethane 1,350 11 0 0 0 0 1,339 0 Toluene 857,230 15,000 0 0 1,200 0 841,030 0 Total 1,318,254 23,044 0 0 1,898 0 1,293,312 0 Dioxins (unit: mg-TEQ) 0 1.38 0.01 0 190.91 0 0 0

Tochigi Proving Center ●Address: 4627 Shimotakanezawa, Haga Machi, Haga Gun, Tochigi Prefecture ●Established: 1979 ●Main products: Comprehensive R&D of motorcycles, automobiles, and power products (on test courses) ●Water discharge point: Nomoto River via Haga Industrial Park Treatment Center via Tochigi R&D Center wastewater treatment facilities (domestic and industrial wastewater) Water Quality (The data of this center are included in the data of Tochigi R&D Center because wastewater from the center is treated at the Tochigi R&D Center’s treatment facilities.)

Air Quality (There are no specified facilities.)

PRTR Listed Substances (Unit: kg) Volume Discharged Volume Transferred Volume 100 Volume Consumed Substance Volume Handled Waste Disposal Recycling (Transferred to Atmosphere Public Waters Sewage Sites Outside Company Disposed Products) Ethyl benzene 12,889 1 0 0 25 0 12,863 0 Xylene 59,145 4 0 0 115 0 59,026 0 1,3,5-Trimethyl benzene 4,263 0 0 0 18 0 4,245 0 Toluene 145,424 32 0 0 180 0 145,212 0 Benzene 5,256 4 0 0 13 0 5,239 0 Total 226,977 41 0 0 351 0 226,585 0 Related Data

Note: For water and air quality, the items for which measurements are required by law are listed. 69 Data of Japanese Factories Water Quality, Air Quality, and PRTR

Takasu Proving Center ●Address: 21-10, Takasu Cho, Kamikawa Gun, Hokkaido ●Established: 1996 ●Main products: Comprehensive R&D of motorcycles, automobiles, and power products (on test courses) ●Water discharge point: Shumamu River Water Quality Air Quality

Regulation Voluntary Measurement Results (There are no specified facilities.) Item Unit Standards (Incl. Regulation Maximum Agreed Standards) Standards (minimum) Average Hydrogen ion concentration pH 5.8–8.6 5.8–8.6 7.1 7.1 Biochemical oxygen demand (BOD) mg/R 160 80 Less than 2.0 Less than 2.0 Chemical oxygen demand (COD) mg/R 160 80 4.1 4.1 Suspended solids (SS) mg/R 200 100 8.2 8.2 Oil content mg/R 5 2.5 Less than 2.0 Less than 2.0 Phenols mg/R 3 1.5 Less than 0.2 Less than 0.2 Copper and its compounds mg/R 3 1.5 Less than 0.05 Less than 0.05 Zinc and its compounds mg/R 5 2.5 Less than 0.05 Less than 0.05 Soluble iron and its compounds mg/R 10 5 Less than 0.1 Less than 0.1 Soluble manganese and its compounds mg/R 10 5 Less than 0.1 Less than 0.1 Total chromium mg/R 2 1 Less than 0.05 Less than 0.05 Fluorine content mg/R 8 4 Less than 0.2 Less than 0.2 Colon bacillus colony count No./cm3 3,000 1,500 0 0 Nitrogen content mg/R 120 60 Less than 0.2 Less than 0.2 Phosphorous content mg/R 16 8 Less than 0.05 Less than 0.05 Cadmium and its compounds mg/R 0.1 0.05 Less than 0.01 Less than 0.01 Cyanides mg/R 1 0.5 Less than 0.1 Less than 0.1 Lead and its compounds mg/R 0.1 0.05 Less than 0.02 Less than 0.02 Chromium (VI) compounds mg/R 0.5 0.25 Less than 0.05 Less than 0.05

PRTR Listed Substances (Unit: kg) Volume Discharged Volume Transferred Volume 100 Volume Consumed Substance Volume Handled Waste Disposal Recycling (Transferred to Atmosphere Public Waters Sewage Sites Outside Company Disposed Products) Xylene 15,473 1 0 0 0 0 15,472 0 Toluene 28,534 5 0 0 0 0 28,529 0 Benzene 1,118 1 0 0 0 0 1,117 0 Total 45,125 7 0 0 0 0 45,118 0

Honda Engineering ●Address: 6-1 Hagadai, Haga Machi, Haga Gun, Tochigi Prefecture ●Established: 1990 Co., Ltd. ●Main products: General machinery and equipment (development, design, and manufacture of machine tools, dies, and functional parts.) ●Water discharge point: Nomoto River via Haga Industrial Park Treatment Center (domestic and industrial water) ●ISO 14001 acquired: July 1997 Water Quality Air Quality

Regulation Voluntary Measurement Results Regulation Voluntary Measurement Results Item Unit Standards (Incl. Regulation Maximum Item Unit Standards (Incl. Regulation Maximum Agreed Standards) Standards (minimum) Average Agreed Standards) Standards (minimum) Average Hydrogen ion concentration pH 5.6–8.6 5.6–8.6 7.7 (7.2) 7.4 Particulates g/Nm3 0.3 0.15 Less than 0.005 Less than 0.005 8.1 Less than 7.6 Biochemical oxygen demand (BOD) mg/R 25 12.5 (Less than 0.5) 3.2 Nitrogen oxides ppm 180 90 (Less than 5.0) Less than 6.3 Chemical oxygen demand (COD) mg/R 25 12.5 9.1 (3) 5.9 Sulphur oxides mg/Nm3 40 20 5.2 (2.9) 4.1 Less than 6.8 3 Suspended solids (SS) mg/R 50 25 (Less than 1) 2.6 Hydrogen chloride Nm /h 1.77 0.885 Less than 0.011 Less than 0.011 Phenols mg/R Less than 5 Less than 5 Less than 0.05 Less than 0.05 Copper and its compounds mg/R Less than 3 Less than 3 Less than 0.05 Less than 0.05 Zinc and its compounds mg/R Less than 5 Less than 5 0.31 (0.12) 0.21 Soluble iron and its compounds mg/R Less than 10 Less than 10 Less than 0.05 Less than 0.05 Soluble manganese and its compounds mg/R Less than 10 Less than 10 Less than 0.01 Less than 0.01 Total chromium mg/R Less than 2 Less than 2 Less than 0.02 Less than 0.02 Fluorine content mg/R Less than 15 Less than 15 0.2 0.2 Colon bacillus colony count No./cm3 3,000 1,500 170 (0) 14 Nitrogen content mg/R 20 10 8.6 (6.7) 6.1 Phosphorous content mg/R 2 1 1.8 (0.3) 0.7 Cadmium and its compounds mg/R Less than 0.1 Less than 0.1 Less than 0.005 Less than 0.005 Cyanides mg/R Less than 1 Less than 1 Less than 0.05 Less than 0.05 Lead and its compounds mg/R Less than 0.1 Less than 0.1 Less than 0.01 Less than 0.01 Chromium (VI) compounds mg/R Less than 0.5 Less than 0.5 Less than 0.02 Less than 0.02

PRTR Listed Substances (Unit: kg) Volume Discharged Volume Transferred Volume 100 Volume Consumed Substance Volume Handled Waste Disposal Recycling (Transferred to Atmosphere Public Waters Sewage Sites Outside Company Disposed Products) Ethylene glycol 2,970 152 0 0 340 0 0 2,478 Nickel compounds 740 0 0 0 140 600 0 0 Molybdenum and its compounds 1,774 610 0 0 958 0 0 206 Total 5,484 762 0 0 1,438 600 0 2,684

Honda Engineering Sayama ●Address: 1-10-1, Shinsayama, Sayama City, Saitama Prefecture ●Established: 1974 Water Quality (Nothing to be listed because domestic and ● industrial wastewater is treated at the Saitama Factory Main products: Development of production technologies and manufacture of and then released into the sewage system) production equipment ●Water discharge point: Sewage system via the wastewater treatment facilities of the Air Quality (There are no specified facilities.) Saitama Factory (domestic and industrial wastewater) ●ISO 14001 certification date: September 1997 PRTR Listed Substances (There are no PRTR listed substances.) Note: For water and air quality, the items for which measurements are required by law are listed. 70 ■Results of Fiscal 2004 Survey in Japan by Honda1 Primary specified chemical substances Notification items based on the PRTR Law Total Consumption Substance Quantity Released Total External Quantity CAS No. Name of Substance Released To Transfer Recycling4 (Shipped 2 Handled into Public Released Disposal Removed No into the Air Water Areas Sewage Waste3 Amount Amount) 1 – Water-soluble zinc compounds 71,076 0 148 148 289 21,007 21,296 0 0 49,632 30 25068-38-6 Bisphenol A-type epoxy resin 111,003 34 0 34 0 1,997 1,997 0 1,143 107,829 40 100-41-4 Ethyl benzene 767,461 303,691 0 303,691 0 1,203 1,203 273,151 32,203 157,213 43 107-21-1 Ethylene glycol 3,422,216 0 0 0 0 0 0 0 0 3,422,216 63 1330-20-7 Xylene 2,420,156 695,339 0 695,339 0 15,014 15,014 821,606 93,259 794,938 217 75-69-4 Trichlorofluoromethane 1,100 0 0 0 0 1,100 1,100 0 0 0 224 108-67-8 1,3,5-trimethylbenzene 106,247 68,142 0 68,142 0 665 665 28,598 8,832 10 227 108-88-3 Toluene 2,294,545 796,509 0 796,509 0 4,261 4,261 62,625 136,609 1,294,541 231 7440-02 Nickel 2,482 0 0 0 0 0 0 0 0 2,482 232 – Nickel compounds 10,467 0 229 229 1,322 2,585 3,907 0 0 6,331 272 117-81-7 Bis Phthalate (2-ethyl-hexyl) 49,316 0 0 0 0 922 922 0 80 48,314 283 – Hydrogen fluoride or its water-soluble salts 1,900 0 0 0 0 0 0 0 1,900 0 299 71-43-2 Benzene 57,614 117 0 117 0 0 0 269 1,803 55,425 307 – Poly (oxyethylene) = alkylether 4,673 0 0 0 125 561 686 0 3,987 0 310 50-00-0 Formaldehyde – 2,228 0 2,228 0 0 0 0 0 0 311 – Manganese and its compounds 21,592 0 974 974 583 6,131 6,714 0 0 13,904 Total 9,341,848 1,866,060 1,351 1,867,411 2,319 55,446 57,765 1,186,249 279,816 5,952,835 179 – Dioxins (unit: mg-TEQ) – 34.06 0.00 34.06 0.59 1,460.26 1,460.85 0.00 0.00 0.00

1. Study conducted on 354 types of primary specified chemical substances falling within the scope of the Law concerning Reporting, etc. of Releases to the Environment of Specific Chemical Substances and Promotion of the Improvement of Their Management (PRTR Law). Substances treated on a scale of 1,000 kg or more. 2. Numbers of primary specified chemical substances falling within the scope of the PRTR Law 3. Amount recycled by paying recycling cost 4. Amount sold to external recycling companies 5. The dash in the “Quantity Handled” column means “not applicable” because the substances are reaction products. 6. Total for five factories (Saitama, Tochigi, Hamamatsu, Suzuka, and Kumamoto Factories) and the Automobile New Model Center

■Recycling Results for End-of-Life Vehicles in Fiscal 2004 ●Started on: January 1, 2005 ●Ended on: March 31, 2005

Item Announced Data CFCs Recycling CFC accepted 2.838.5 kg amount HFC accepted 2,465.6 kg Total 5,304.1 kg Number of vehicles from which CFC was recovered and accepted 8,571 vehicles Number of vehicles from which HFC was recovered and accepted 6,595 vehicles Total 15,166 vehicles Cost Amount of recycling deposits repaid ¥31,696,940 Total recycling cost ¥34,947,806 Inflators Recycling Number of inflators recovered 943 pieces (airbags) amount Number of airbags deployed 6,662 pieces Total 7,605 pieces Number of vehicles from which inflators were collected 548 vehicles Number of vehicles in which all airbags were deployed 3,211 vehicles Number of vehicles in which some were collected and others deployed 2 vehicles Total 3,761 vehicles Total weight of inflators accepted 44.0 kg Total weight of inflators accepted and made reusable 41.6 kg Recycling rate Recycling rate of inflators 94.5% Amount of recycling deposits repaid ¥6,652,340 Cost Total recycling cost ¥11,651,119 Automobile Recycling Weight of ASR accepted 3,337.9 tons shredder amount Number of vehicles of which ASR was accepted and used 19,980 vehicles residue Number of dismantled vehicles recycled by commission into articles of iron or steel without generating ASR 1,778 vehicles (ASR) Weight of ASR delivered to recycling facilities 1,903.3 tons Weight of slugs, fly ash, etc., remaining after recycling ASR at recycling facilities 216.0 tons Weight of ASR equivalent to the amount not generated (in the commissioned recycling of dismantled vehicles into articles of iron or steel without generating ASR) 311.4 tons Weight of slugs, fly ash, etc., remaining after the commissioned recycling of dismantled vehicles into articles of iron or steel without generating ASR 2.5 tons Weight of ASR reduced 101.9 tons Recycling rate Recycling rate of ASR 53.2% Facilities Facilities complying with the standards *See below Amount of recycling deposits repaid ¥126,325,720 Cost Total recycling cost ¥122,566,232

* Names of facilities complying with the standards for automobile shredder residue Aomori Renewable Energy Recycling Co., Ltd. Mie Chuo Kaihatsu Co., Ltd. Tohoku Tokyotekko Co., Ltd. GE Co., Ltd. Kosaka Seiren Co., Ltd. Clean Stage Co., Ltd. Onahama Smelting and Refining Co., Ltd. Daiei Inter Nature System Inc. Ya manaka Corporation Dowa Mining Co., Ltd. Shimada Industry Co., Ltd. Mizushima Eco-Works Co., Ltd. Nikko Mikkaichi Recycling Co., Ltd. Kyoei Recycle Co., Ltd. Sano Maruka Corporation Mitsubishi Materials Corporation Toyota Metal Co., Ltd. Kanemura Eco Works Co., Ltd. Akemi Recycling Center Co., Ltd. Takunan Shoji Co., Ltd. Related Data

71 Global Environmental Data

Honda deems it its mission to manufacture products with the highest environmental performance using the most efficient production system. In this section, we report the environmental performance of automobiles in four major regions, global CO2 emissions from major factories and other examples of our environmental efforts overseas. Product Domain

Through its unique technologies, Honda introduces prod- ●Europe ucts that demonstrate environmental performance that ex- In Europe, Honda developed and released models with high ceeds the legal standards established in each country for fuel economy, hybrid vehicles, and clean diesel vehicles to the reduction of exhaust emissions and improvement of fuel meet the industry’s voluntary emission standard for average

economy. We are willing to contribute to the achievement of fuel economy (CO2 emissions: 140 g/km) by 2009. a sustainable mobility society by meeting people’s mobility ●Asia and Oceania needs while minimizing the environmental impacts caused In Thailand, Honda locally produced Jazz has already ach- by our products. In the product domain, we are implement- ieved the EURO-IV emission regulation standards to be intro- ing measures based on the following three approaches. duced in the future. As a result, in the period from January to

1. Further improvements in the reduction of exhaust emis- December 2004, 40% of the vehicles sold by Honda meet sions from internal-combustion engines and increased the EURO-IV regulation standards. fuel economy ●China 2. Evolution of hybrid vehicles In China, Honda has already achieved the EURO-III regula- 3. Promotion of alternative fuel-powered vehicles tion standards to be gradually implemented in Beijing from November 2005 for all the models sold in the market. Further Improvements in Exhaust 1 Emissions and Fuel Economy 2 Evolution of Hybrid Vehicles ● North America (United States) Honda released the Insight in November 1999, the first hy- In the U.S., Honda achieved the highest corporate average brid car equipped with Honda’s Integrated Motor Assist fuel economy (CAFE) for its entire vehicle fleet of any auto- (IMA) System that achieved the world’s highest fuel econo- mobile maker. For cleaner exhaust gas, Honda has always my* as a mass-produced gasoline-powered vehicle. In North provided the U.S. market with low emission vehicles with America, Honda subsequently began marketing of the Civic higher performance than what is required by emission Hybrid in April 2002 (in December 2001 in Japan), and the regulations. Specifically, we introduced the first gasoline- Accord Hybrid in December 2004, adopting Honda’s Vari- powered low emission vehicles (LEVs), ultra low emission able Cylinder Management (VCM) system for its V6 engine. vehicles (ULEVs) and super ultra low emission vehicles Its Suzuka and Saitama Factories in Japan manufacture (SULEVs) in the market. At present, at least 60% of Honda’s hybrid cars. Honda sells the Civic Hybrid, its best- Honda/Acura branded vehicles meet or exceed the Tier selling hybrid model, in 19 countries in North America, Eu- II/bin 5 exhaust gas standard (NOx: 0.07 g/mile). In rope, Japan, and Asia and Oceania regions. December 2004, based on the achievement of high fuel In April 2005, Honda passed the 100,000 unit milestone economy and cleaner exhaust gas from these Honda vehi- in global sales of hybrid cars (approx. 89,000 in the U.S, cles, the Union of Concerned Scientists (UCS) named 5,900 in Japan, 3,800 in Europe, and 1,500 in Canada) . Honda the 2004 Greenest Automaker. *10-15 mode: 5-speed manual transmission vehicle 35 km/l at the time of announcement in 1999 ➝ present model: 36 km/l

■Transition in average fuel economy (in the United States) (mile/gallon) Passenger cars Light trucks Average 34.0 Promotion of Alternative 3 Fuel-Powered Vehicles 32.0

30.0 In order to promote use of vehicles powered by alternative

28.0 fuels, Honda leased a total of 19 FCX fuel cell vehicles in

26.0 Japan and the U.S. We are also trying to expand sales of

24.0 the Civic GX, our natural gas-powered vehicle, in North

22.0 America.

0 Additionally, for facilities to supply alternative fuels, we (FY) 20002001 2002 2003 2004 are promoting the development of hydrogen stations and the introduction of affordable fueling equipment for natural gas-powered vehicles for household use. Honda is thus playing a leading role in the promotion of alternative fuel- powered vehicles.

72 Global Environmental Data

Production Domain

In the production domain, Honda is promoting its Green ■CO2 Emissions

Factory Plan to develop its factories into new manufactur- (1,000 CO2 tons) ■CO2 Emissions Production index (fiscal 2001: 100) (%) 1,800 180 ing operations suitable for a recycling-based society. To 1,649 this end, we are also expanding our energy conservation 1,600 1,501 1,513 1,400 1,289 127 and waste reduction activities to our overseas plants. 118 1,200 105 For fiscal 2004, CO2 emissions, the amount of waste 100 1,000 100 sent to off-site landfills, and the water use were calculated 800 for Honda Motor Co., Ltd. and its major affiliates. The calcu- 600 lation results are tabulated in the graphs shown on the 400 right. 200 In the fiscal 2004 tabulation, 43 companies (Honda Mo- 0 0 20012002 2003 2004 (FY) tor and affiliates in which Honda Motor holds at least a 50% (36 companies)(38 companies) (38 companies) (43 companies) share) are included. For details, please see p. 3. ■Waste used as off-site Landfill (Tons) ■Major Affiliates Included in the Fiscal 2004 Tabulation 35,000 33,094 29,223 29,332 29,252 30,000 ●Europe: 8 companies ●Japan: 1 company 25,000

20,000

15,000 ●North America: 7 companies 10,000

5,000 ●South America: 0 ●China: 8 companies 2 companies 2001 2002 2003 2004 (FY) (36 companies)(38 companies) (38 companies) (43 companies)

■Use of Water Resources

3 ●Asia and Oceania: 17 companies (1,000 m ) 18,000 16,058 16,000 14,000 Notes: 12,062 12,000 1. Figures show the number of affiliates included. 10,554 2. Overseas CO2 emissions were calculated based on the amount of 10,000 9,099 energy used, using the coefficient shown in the Japanese Ministry of the 8,000 Environment’s guidelines for calculating global warming gases released by companies (version 1.5). 6,000 3. Waste disposed of as off-site landfill includes waste externally disposed 4,000 of by other methods. 2,000 4. Production indices are calculated based on the total number of 0 motorcycles, automobiles, and power equipment manufactured by the 2001 2002 2003 2004 (FY) companies included in the tabulation. (16 companies)(21 companies) (30 companies) (43 companies)

■Environmental Data by Region (Production Domain) Item Region Japan North America South America Europe Asia and Oceania China Number of affiliates included in the tabulation 1 7 2 8 17 8 Electricity (MWh) 711,771 1,053,322 109,887 163,326 226,181 232,279 Natural gas (GJ) 2,680,061 5,803,348 79,216 826,119 173,557 36,582 Energy Petroleum gas (GJ) 286,486 43,256 99,666 16,161 511,919 311,693 Oil-based fuel and others (GJ) 460,622 22,980 214,586 12,781 1,057,819 384,235 Externally used as landfill (in tons) 0 10,819 1,009 2,765 2,137 12,522 Waste Recycled (in tons) 177,970 303,624 26,987 31,767 781,031 40,447 Tap water (in 1,000 m3) 1,755 1,929 0.9 743 2,028 2,074 Water Underground water (in 1,000 m3) 2,810 1,805 1,130 0 1,324 370 resources Data Global Environmental Rainwater (in 1,000 m3) 72 12 0 0 6 0

Note: From this fiscal year, the environmental data of each site are tabulated and shown by region.

73 Environmental Activities Outside of Japan

North America management, body painting, bumper painting, and assembly, jointly examined a system to replace the steam boiler ●Introduction of Equipment to Reuse Rain Water from system. As a result, they determined to newly introduce the Holding Ponds (United States) following three technologies: The Marysville Automobile Plant (MAP) of Honda of America (1) To replace the heat exchanger with a gas heater Mfg., Inc. (HAM) established two holding ponds, with a total (2) To introduce a system to recover and reuse waste heat capacity of approximately 28,000 m2, to store rainwater for from the bumper painting process that was using steam use as alternative water supply to approximately 190,000 heat tons a year of groundwater supplied to the plant’s manufac- (3) To replace the steam moisturizer with a cooling mist turing process. The facility has been in operation since De- spray device cember 2004. The plant optimizes the supply of rainwater This conversion to a more efficient system has contribu- by using the two holding ponds: one for summer use (with a ted to a reduction in energy consumption, and to the ach- capacity of approximately 76,000 tons), and the other for ievement of a safer workplace as well. winter use (with a capacity of approximately 7,600 tons). By using these two ponds, the plant expects that its groundwater use will be reduced by approximately 150,000 tons a year. In January 2005, because of the use of this equipment to reuse rainwater, MAP was awarded the Karl G. Voelkel Award from the Ohio Water Environmental Association. MAP also is constructing a new, water-based paint facility which will start operation by the middle of 2006, thereby reducing emissions by 41%. The facility will introduce high-efficiency ovens, air recycling systems, and highly efficient variable drive motors to reduce its use of energy by 34%.

Members of the project to remove the steam boiler system

Boiler room Holding ponds established adjacent to MAP

●Removal of the Steam Boiler System (United States) The East Liberty Automobile Plant (ELP) of Honda of Ameri- ca Mfg., Inc. (HAM) removed their steam boiler system in December 2004. The steam boiler system was introduced at the time ELP opened in 1989, and the system supplied steam to the plant’s eight major processes for heat transmission and moisture supply. As an energy conservation measure, at ELP, its four major departments, each in charge of facilities

74 Environmental Activities Outside of Japan

●Improvement of Transportation Efficiency Following Europe the Expansion of Facilities (France) ●Environmental Commitment of Honda Belgium N.V. Honda Europe Power Equipment (HEPE) reviewed its (Belgium) working process at the time it expanded its facilities, and Honda Belgium N.V. (BH) conducted the following remarkably improved transportation efficiency on-site by environmental activities and was awarded the Flemish designing a unique transportation flow. In addition, by Environmental Charter Award. introducing equipment to reduce the volume of cardboard (1) Reduction of pollutants contained in wastewater by boxes without reconciling their recyclability, HEPE achieved activated carbon filtration improvement in both recyclability and transportation (2) Prevention of accidental elution and effusion of dirty efficiency. water by the establishment of a weather shed above the waste collection containers (3) Improvement of thermal insulation within the facilities by increasing the opening and closing speed of the automatic gate used for transporting materials on-site (4) Reduction of landfill waste by sorting the waste

Equipment to reduce the volume of cardboard boxes

Activated carbon filtration Asia, Oceania, and China

●Reuse of Automatic Transmissions (China) In Asia, Oceania, and China, Honda is promoting the reuse of automatic transmissions. With Dongfeng Honda Engine Co., Ltd. serving as the activity center, the production and sales sites in Asia, Oceania, and China cooperate together to promote the reuse of automatic transmissions within a wide area, and it is expected that further progress will be made in this effort.

Waste collection place with a weather shed

●Acquisition of EMAS Certification by Honda Europe N.V. (Belgium) Honda Europe N.V. (HE) has successfully completed the examination for the EMAS environmental management system and is now applying for its certification registration. HE is thus becoming the 4th European Honda site achieving the EMAS standard. Following the successful introduction by Montesa Honda in Spain, HE has also introduced the unpacked transportation of finished motorcycles for distribution, and Activities Outside of Japan Environmental is promoting this transportation method for more products Working for the reuse of automatic transmissions and to all distribution channels in Europe.

75 Corporate Profile & Financial Data

Company name Honda Motor Co., Ltd. Head office location 1-1, 2-chome Minami-Aoyama, Minato-ku, Tokyo Established September 24, 1948 Company Representative Takeo Fukui President and Chief Executive Officer Capital ¥86,067 million (as of the end of March 2005) Sales Consolidated: ¥8,650,105 million (Results of fiscal 2004) Unconsolidated: ¥3,489,106 million Total number of associates Consolidated: 137,827 (as of the end of March 2005) Unconsolidated: 27,045 (as of the end of March 2005) Consolidated subsidiaries 319 subsidiaries (as of the end of March 2005) Major products Automobiles Standard-sized vehicles, compact vehicles, and mini vehicles Motorcycles Motorbikes, minibikes, small motorcycles, ATVs, and personal watercraft Power equipment Agricultural equipment, generators, multipurpose engines, lawn mowers and outboard engines

■Net Sales and Other Operating Revenue ■Operating Income (billions of yen) Unconsolidated Consolidated (billions of yen) Unconsolidated Consolidated 9,000 800 8,162 8,650 7,971 724 8,000 700 7,362 661 630 600 7,000 6,463 600 6,000 500 5,000 401 400 4,000 3,489 3,042 3,211 3,322 3,319 300 3,000 200 185 184 2,000 144 147 117 1,000 100 0 0 20002001 2002 2003 2004(FY) 20002001 2002 2003 2004 (FY)

■Net Income ■Total Number of Assosiates (billions of yen)Unconsolidated Consolidated (associates) Unconsolidated Consolidated 500 150,000 464 486 137,827 131,600 426 120,600 126,900 400 114,300 362 100,000 300 232 226 200 170 134 144 50,000 100 28,513 28,500 27,798 27,187 27,045

11 0 0 20002001 2002 2003 2004(FY) 20002001 2002 2003 2004 (FY)

■Sales by Business Area ■Net Sales and Other Operating (consolidated: ﬁscal 2004) Revenue by Region (consolidated: ﬁscal 2004) Financial services 3.0% Others (including power Others 5.2% products) 3.8% Asia 8.9% Motorcycles 12.7% Japan 22.9% Europe 9.9%

Automobiles 80.5% North America 53.0%

76 ■Persons Responsible for Contents Sales and Services Automobile sales Toshiaki Mikoshiba Yuzuru Kurihara Motorcycle sales Ko Yamaguchi Power equipment sales Hideki Kuji Parts sales Toshio Sugiyama Recycle Promotion Office Munechika Okamoto Purchasing Automobile purchasing Toshiyuki Shigekushi

Factory and Office Operations Environmental Adminstrator Saitama Factory Koichi Odaka Tochigi Factory Hiroshi Yanaka Hamamatsu Factory Tadayuki Onishi Suzuka Factory Kosaku Arakawa Kumamoto Factory Yuji Tanno Automobile New Model Center Tsuguo Motoori Head Office: Nobutaka Okabe

Honda R&D Co., Ltd. Wako R&D Center/Wako Basic Technology Research Center/ Wako Nishi R&D Center Shinichi Endo Asaka R&D Center/Asaka Higashi R&D Center Yutaka Nakagiri Tochigi R&D Center Maruo Ota Tochigi Proving Center/Takasu Proving Center Hiromi Motohashi

Honda Engineering Co., Ltd. Honda Engineering Akinori Tamura Honda Engineering Samaya Kenzo Sato

Logistics Products and KD parts Tomonori Arai Administration Administration Nobutaka Okabe Personnel Noboru Kamimura Public Relations Hiroshi Oshima Secretariat Environment and Safety Planning Office Keiichi Mitobe As of June 1, 2005

■External Verification For the reasons given below, we have not obtained any external verification. 1. No guidelines have been established for external verification. 2. The qualifications required of the verification organizations are not clear. We will continue to examine the details and timing of external verification, paying attention to the progress made in relation to the items described above. The results presented in this report have been collected by each of the active departments concerned and endorsed within the Japan Environmental Committee’s system. Data relating to the factories has been checked by environmental audits and surveillance inspections under ISO 14001.

For all inquiries concerning the contents of this report, please contact us at the following numbers: Environment and Safety Planning Office Tel.: 81-3-5412-1155 Fax: 81-3-5412-1154 Trademark of American Soybean Association Honda Motor Co., Ltd. This report is printed on 100% recycled paper using waterless soy-based 1-1, 2-chome Minami-Aoyama,Minato-ku,Tokyo inks (100% made from vegetable oil and containing no VOCs) without Published: September 2005 generating hazardous liquid waste. IG K A 20000509 Results of the Questionnaire and Questionnaire: Interviews regarding the Honda Conducted from June 2004 to April 2005 (69 respondents in total) Interviews: Environmental Annual Report 2004 Conducted from November to December 2004 (two interviewees*) * Among those who responded to the questionnaire in the Honda Environmental Annual Report 2004, two were chosen and interviewed so that their opinions on the Company’s environmental conservation activities and annual report could be heard directly. Major Findings

■Intelligibility ■Amount of information ■Parts found most interesting ■Part that needs to be improved

Disposal and Recycling (3R) Domain 14％ Product Development Domain 22％ Product Development Domain 12％ Disposal and Recycling (3R) Domain 9％ Medium-Term and Annual Targets and Results 10％ Social Activities 9％ Fundamental Principle and Vision 9％ Environmental Activities Outside of Japan 9％ Environmental Management/Promotion of LCA 6％ Promotion of LCA 8％ Insufficient Too much Introduction: Striving to Become a Company that People Will Wants to Exist 6％ Related Data 8％ 15% 15% Introduction: Striving to Become a Company Production Domain 6％ that People Will Wants to Exist 6％ Average Social Activities 6％ Medium-Term and Annual Targets and Results 5％ Total Easy to Total 37% 4 69 understand 69 Environmental Accounting ％ Purchasing Domain 5％ 63% Environmental Risk Management 4％ Production Domain 5％ Transportation Domain 4 Environmental Accounting 3 Appropriate ％％ 70% Related Data 4％ Environmental Risk Management 3％ Environmental Activities Outside of Japan 4％ Administration Domain 3％ Administration Domain 3％ Fundamental Principle and Vision 2％ Environmental Management: from General Policy to Environmental Audits 3％ Sales Domain 2％ Sales Domain 2％ Others 2％ Purchasing Domain 2％

Main Opinions and Requests from Our Readers and Honda’s Responses

Opinions and Requests regarding Honda Environmental ● More substantial information about Honda’s advanced research, Annual Report 2004 technologies, and activities need to be included in the report. → In this annual report, we have a section entitled “Honda’s Advanced ● It is burdensome to read both the Honda Environmental Annual Report Environmental Measures” to introduce technologies adopted for our and Honda ECOLOGY. Honda needs to examine the possibility of products, those that are now under research or already applied, and integrating these two brochures. advanced environmental activities that we are promoting in our business → This year, we have integrated the Honda Environmental Annual Report and operations. Honda ECOLOGY to not only reduce the burden on readers who had to read two different brochures but also make these reports easier to understand in Requests regarding Honda’s Environmental view of the fact that the reports are becoming more complex due to increased Conservation Activities technical details. In this integrated environmental annual report, we will appropriately introduce and explain our commitment to environmental ● Aggressive promotion of LCA activities in all aspects, including our basic policy toward the environment, ● Various innovative efforts in the product development domain environmental conservation activities conducted by our operations, and the ● Enhancement of cooperation with suppliers and dealers in the future direction of our environmental activities, while focusing on accurately purchasing and sales domains conveying the progress we have made in our environmental activities. As in ● Better communication with stakeholders on environmental activities the previous report, technical jargon was avoided as much as possible, and ● Making Honda’s unique environmental efforts more public explanations and comments were added for easier understanding.

The opinions you have kindly presented to us are of immense value to use in our future environmental conservation activities and the disclosure of Environmental Information, including the Honda Environmental Annual Report. We sincerely thank you for your cooperation.

We hereby request all our readers to let us have the benefit of their opinions and ideas. Our “Honda Annual Environmental Report 2005” presents a summary of the results of our environmental commitments in fiscal 2004 from the viewpoint of the life cycle of our products. Our goal is to give details of our commitments and activities in the most concise manner in concrete figures and data that measure up to objective evaluation. We will strive to enrich the content of our Report by giving full consideration to your opinions, ideas and advice. To help us achieve this goal, we would be most grateful for your cooperation in completing the questionnaire on the back of this leaf and sending it back to us. FAX: 81-3-5412-1154

Environment and Safety Planning Office, Honda Motor Co., Ltd.