Executive's Message

• Creating Value for a New Lifestyle for each household
• Making all our products Green Products
• Making all our factories Clean Factories
• Introducing a new environmental mark: "eco ideas"
• Devotion to environmental contribution in China

In 2007, the Intergovernmental Panel on Climate Change (IPCC) published its Fourth Assessment Report, six years after the publication of its Third Assessment Report. According to the report, there is a 90% certainty that greenhouse gases emitted from human activities have caused global warming since the middle of the 20th century and that the global average temperature will rise by up to 6.4 degrees centigrade and the sea level by up to 59 cm by the end of the 21st century, if no measures to reverse this trend are implemented.
   The Group has adopted "coexistence with the global environment" as one of our visions for the 21st century, and we are continuing to promote environmental sustainability management based on our Green Plan 2010, a global environmental action plan that looks towards the year 2010. In particular, we are giving priority to the following three objectives set out in the plan: Creating Value for a New Lifestyle; making all our products Green Products; and making all our factories Clean Factories. To achieve these objectives, we have set out specific numerical targets and have been implementing measures to achieve them. In fiscal 2007, we were able to achieve our major numerical targets for the year. We will continue to strive towards the targets for fiscal 2011 with renewed commitment.

We are endeavoring to help global customers improve their quality of life through our products under the maxim of "Creating Value for a New Lifestyle," while at the same time minimizing the environmental impact of our products. We developed the Factor for One Household to assess the contribution of our products to the prevention of global warming and the effective utilization of resources. We aim to realize a GHG Factor 5 for one household by fiscal 2011.
   In fiscal 2007, the GHG Factor was 2.8 and we were able to achieve our fiscal target for this important indicator. Last year, we opened our Eco & Ud HOUSE to provide general consumers with an opportunity to experience the lifestyle we propose for 2010, including home appliances and housing design. More than 23,000 people visited the house. We intend to incorporate the opinions offered by visitors into our future development of new products.

Most of the environmental impact from electronics manufacturers is related to their products. Recognizing this fact, as early as 1991 we launched our first Product Environmental Assessment system to evaluate the environmental impact of our products - from their planning and design phases - and we have been conducting life cycle assessments of our products under this system ever since. Based on the three criteria for prevention of global warming, effective utilization of resources, and non-use of chemical substances, we assess our products and accredit those with higher environmental performance as Green Products. We calculate the Green Product (GP) Development Rate as the value of Green Products shipped as a percentage of the total value of all shipments from factories of products developed in the fiscal year. We aim to achieve a 90% or higher GP Development Rate by fiscal 2011.
   In fiscal 2007, the GP Development Rate was 96%, far exceeding our target of 74%. Also in terms of energy conservation, the number of models meeting the criteria, which are now stricter than those set last year, has increased year on year. In this fiscal year, our products and technologies won glowing appreciation from outside the company. For example, our tilted-drum washer/dryer received a prize from the Minister of Economy, Trade and Industry at the Eco Products Awards, and our vacuum insulation "U-Vacua" also won a prize from the Minister at the Energy Saving Grand Prix. We will continue to improve the environmental performance of our products by continuing to set ever stricter criteria for Green Products.

The Group has a total of 319 manufacturing factories throughout the world. We are implementing measures to reduce the environmental impact of these factories and to make all of them Clean Factories (CF).
   In fiscal 2006, we introduced the CF Accreditation System to encourage all our factories to further improve their environmental performance. Under this system, we quantify the measures that the factories are implementing based on ISO 14001 environmental management systems to reduce their environmental impact in relation to energy conservation, reduction in the generation of waste (including revenue-generating waste), control over the release and transfer of chemical substances, and efficient use of water resources. Evaluating these quantified criteria, we give CF Accreditation to qualifying factories. We calculate the Clean Factory (CF) Accreditation Rate as the percentage of accredited Clean Factories within the total number of our factories. We aim to attain a 90% or higher CF Accreditation Rate globally by fiscal 2011. In 2007, we expanded the scope of accreditation to include our factories outside Japan and achieved a 78% CF Accreditation Rate, far exceeding the global target of 58%.
   The first commitment period set forth in the Kyoto Protocol will start in 2008, and we are required to implement more anti-global warming measures as early as possible. The CO2 emissions from the Group amounted to 4.13 million tons in fiscal 2007, remaining at the same level since fiscal 2004. We will make steady efforts to further reduce our CO2 emissions.

As a symbol to represent our commitment to environmental protection, we have introduced a new and unique environmental mark, "eco ideas," in April 2007. The "eco ideas" symbol represents our dedication to Creating Value for a New Lifestyle for the provision of environmentally-conscious products that help people improve their quality of life. As a means to highlight the environmental performance of our products through labeling in an easy-to-understand manner, we will use this environmental mark on a global basis. Through these efforts, we hope to further contribute to the reduction of the environmental impact of both our factories and general households.

According to recent newspaper reports, greenhouse gas emissions in China may exceed those in the United States as early as fiscal 2008, and so it is essential that anti-global warming measures be implemented in China. Also, it is said that China is emitting the largest amount of sulfur dioxide (air pollutant) in the world, that more than one-tenth of its farmland is contaminated by organics and heavy metals, and that 300 million people drink water that might not be completely safe.
   In fiscal 2008, the Group plans to start implementing comprehensive environmental measures in China, which is suffering from some of the most serious environmental problems in the world. Specifically, we will launch the China Eco-Project, a three-year environmental project in the country, in which we will make concerted efforts adopting the following four approaches: Green Products, Clean Factories, Social Contribution, and Environmental Appeal.
   By implementing this project in China based on the philosophy and experience that we have established and gained in environmental sustainability management in Japan, we will further our global environmental sustainability management.