P012-E169

Shimadzu Environmental and Social Report 2010 (Results in FY2009)

Message from the President At the UN Summit on Climate Change held in September 2009, Japan’s then Prime Minister Yukio Hatoyama announced that Japan intends to cut its greenhouse gas emissions by 25% by the year 2020 as compared to 1990 levels. In December, the COP15 meeting was held in Copenhagen, where intense discussion was held between developed nations and emerging nations concerning measures taken against global warming after the adoption of the Kyoto Protocol. In Japan, basic policies concerning global warming and energy-related issues are currently being discussed. Since global-scale efforts are necessary to deal with these problems, Shimadzu has started the new “Save the Energy Project” to develop new models of its main products with high energy-saving potential that can consume at least 25% less power than former ones. Use of energy-saving products will help combat global warming and also reduce running costs. We anticipate having less of an impact on the environment and lowering costs through the project. As well as issuing the Shimadzu Environmental and Social Report 2010, we will make the results of our environmental conservation activities available on Shimadzu’s home site. According to our “Medium and Long-Term Programs,” we will try to reduce the burden placed on the environment by our business activities and also contribute to creating a low-carbon future through the development of products, which is our main business.

President and CEO

Environmental Management Program Headquarter Offices District (*1) Environmental Aspect

2

FY 2009 Results Self Assessment •Promoted measures for environmentally-friendly products. Measures to obtain ECO-label certification: 15 of 15 plans were achieved. •Calculated energy savings rates, recycle rates, and reuse rates. Calculated for all 9 applicable products developed. •Created WEEE compliant sorting guidelines. Created for all 6 applicable products developed. ○ (1) Products •Assessed and disseminated information about EU environmental regulatory trends throughout the company: Information about EU environmental regulations was gathered from exporters/industrial associations and directly in Europe. Information was exchanged with relevant departments in other companies, and the necessary items were reported internally via management meetings •Achieved a 93% green procurement ratio for office supplies, surpassing the goal of 92%. •Achieved a 66.7% green procurement ratio for materials, surpassing ○ (2) Green Procurement the goal of 65%. •Achieved an 80.3% registration of purchased material items in the purchased material content management database, surpassing the goal of 80% •No new departments started using the Chemical Substances Management (3) Hazardous Chemical Substance System. △ Emissions and Reduction of •The reduction of substitute CFC usage was 52% of the 1998 level. The goal CFC Substitutes of 38% or less could not be achieved. •Achieved a minus 3.5% CO2 emission from energy use, falling below ◎ (4) CO2 Emissions the goal of a maximum of 3.7% higher than the 1990 level. •Thorough separation of paper ◎ (5) Waste Reduction of non-valuable resource amount: Achieved a 20% reduction as compared to 2008 levels, surpassing the goal of 2%.

FY 2010 Goals •Promote measures for environmentally-friendly products. Increase ECO-labeled products to 20 / promote energy-saving projects and develop products containing no hazardous substances. •Calculate energy saving rates, recycle rates, and reuse rates for new products. •Create sorting guidelines for new products. •Assess environmental regulatory trends for the EU and other areas, and disseminate this information throughout the company.

•Achieve a 92% green procurement ratio for office supplies. •Achieve a 68% green procurement ratio for materials (RoHS compliant items). •Promote the registration of purchased material items in the purchased material content management database and register 8,000 cases. •Increase the number of departments using the Chemical Substances Management System, and reduce the usage of hazardous chemical substances. •Reduce substitute CFC usage to 40% of the 1998 level or less. •Reduce CO2 emissions from energy use to a maximum of 7% higher than the 1990 level. •Thorough separation of paper Reduction of non-valuable resource amount: Reduce by 10% as compared to 2008 levels.

Kanagawa Offices District (*2) Environmental Aspect

(1) Products

(2) Environmental Measures (Pollution Prevention)

(3) CO2 Emissions

FY 2009 Results Self Assessment •Application of design guidelines for reducing environmental impact when new products are developed. Activities for ECO-label certification: Received one ECO-label of our goal of 3. Implemented items: calculation of energy savings rates and recycle rate △ by weight; creation of lists of hazardous substances used; and creation of a sorting guideline for disposal. •Complied with domestic and foreign regulations, and contributed to the environment by providing information about products and technology. •Maintained/managed equipment and chemical substances. Employed CRIS chemical substances management system. •Implemented voluntary emergency response training, tailored for each ◎ department. •Surveyed the usage of liquid nitrogen and reduced by 56% from the 2009 level. •Achieved 2,033 t-CO2, a 15% reduction of CO2 emissions from energy ◎ usage, surpassing the goal of the 1% reduction as compared to the result in FY2008 (2,390 t-CO2).

FY 2010 Goals •Application of design guidelines for reducing environmental impact when new products are developed. Activities for ECO-label certification: Obtain an ECO-label for at least two products. •Comply with domestic and foreign regulations, and contribute to the environment by providing information about products and technology. •Maintain/manage equipment and chemical substances. Employ CRIS chemical substances management system. •Prepare to take urgent actions on the management of chemical substances in each department. •Maintain CO2 emissions from energy usage at the 2009 level or less. The goal is 2,033 t-CO2 max.

Data of results for activitie (results in FY 2009) Headquarter Offices District (*1)

Sanjo Works Technology Research Laboratory (Keihanna) Seta Works Murasakino Works Hadano Works Atsugi Works

Kanagawa Offices District (*2)

CO2 Emissions (Energy Related) Unit: tons CO2

Unit: tons CO2 3,188 3,140 3,107 2,901

20,000

10,000

4,000

3,148

1,595 2,256 934 1,472 1,463 919 1,561 1,004 15,126 14,521 946 892 901 14,176 14,059 14,131 12,955 12,456 12,276 12,249 12,979 2,661 2,686 2,938

15,000

427

2,425

1,000

0

0

’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 * The power conversion factor used for all years is 0.378 kg–CO2/kWh.

Unit: million kWh 40

6.9 2.6

30

27.6

6.9

2.5

2.4

27.1

26.2

7.5 2.4 26.5

8.1 2.5 28.4

8.0

7.5

8.0

8.2

4.3 2.6

4.1

4.3

31.8

32.0

’00

5.6

2.5

’01

’02

4.9

4.8

’03

’04

’05

’06

’07

2.1

2.2

2.2

2.2

2.2

4.1

’02

’03

’04

’05

’06

’07

809

654

1,895 1,993 1,951 1,823 1,663 1,509 1,610

7.5

33.7

10

’01

783

’08

’09

1.8

1.4

2.9

3.3

’08

’09

10.0

5.0

’00

874

Unit: million kWh

0.8 5.8

20

0

877

857

4.2 35.1

30.9

2,241 2,247

2,000

5000

Electricity Usage

940

3,000

’08

0

’09

’00

’01

’02

’03

4.0

’04

4.1

’05

4.2

’06

4.2

’07

Waste Discharged Recycling Ratio

Unit: tons

Unit: %

2,500 627

2,000

609 508

1,500 1,000

6.8

8.9 1,306 1,340

8.3

843

822

840

865

778

102

18.6 477 9.5 10.5 15.2 17.5 1,493 11.8 8.3 1,304 1,307 1,332 1,239 1,259 1,303

1,115

500

80

400

’00

’01

’02

’03

’04

’05

’06

’07

’08

’09

100 80 321

60

60

300 219

40 20

500 0

100

Unit: %

Recycling Ratio

Unit: tons

0

181

200

20 186

100 0

’00

’01

’02

’03

18

26

43

170

183

160

152

’06

’07

’04

’05

10

16 24

163

132 ’08

’09

40 20 0

Water Usage Unit: thousand m3

Unit: thousand m3

500 400 300

9.3 9.4

200

260.8

8.2 8.7

9.4 8.8

10.2 7.3

9.9 7.7

9.7 8.6

10.5 10.4

10.9 9.1

3.4 10.7 8.6

213.9 188.8 218.1 232.9 206.7 185.4 182.3 169.2 184.0

100 0

9.9

20 10.5

14.1

12.1

25

16.7

15.4

15

7.0 8.5

10.1

5.6

13.4

17.5 13.6

12.7

10

11.2

11.0

11.0

’04

’05

’06

10.9

5 ’00

’01

’02

’03

’04

’05

’06

’07

’08

’09

*1 Head Office/Sanjo Works, Murasakino Works, Technology Reseach Laboratory, Seta Works

0

’00

’01

’02

’03

’07

’08

’09

*2 Hadano Works, Atsugi Works

CO2 Emissions from Energy by the Shimadzu Group CO2 amounts emitted by Shimadzu’s manufacturing sites, sales bases, and research laboratories in FY 2009 calculated by region and energy type are shown below.

Breakdown of CO2 emissions (by region) 5%

Breakdown of CO2 emissions (by energy type) 2% 1% Less than 1%

4%

Total emissions: 30,768 tons

10%

81%

Japan US Asia Europe

81% 10% 5% 4%

6%

Total emissions: 30,768 tons

9%

81%

Electricity Urban gas LPG/LNG Gasoline Heavy oil Light oil Kerosene

81% 9% 6% 2% 1% Less than 1% Less than 1%

* Target business operations: 9 sites in Japan (6 Shimadzu offices, 3 affiliated companies) and 6 sites overseas (affiliated companies: 2 in Asia, 2 in Europe, 2 in the US). Sites that emit at least 500 tons of CO2 annually are included. * The electricity emission factor used for all regions is 0.378 kg–CO2/kWh. * Period of the report: For affiliated companies overseas, data of January to December 2009 was used.

3

Details of Pollutant Release & Transfer Registers (PRTR) Data (results in FY 2009) Plant

Quantity Transferred Atmospheric Discharge to Discharged to Buried at Transferred Beyond Recycled Emissions Public Waters Soil at Relevant Site to Sewer Relevant Relevant Site Site

unit: kg

Shipped as Part of Application Product

Chemical Chemical No. Name

Usage

232

Nickel and its compounds

2,387

─

─

─

─

─

1,000

─

1,387

Plating

132

HCFC-141b

2,466

2,051

─

─

─

─

415

─

─

Cleaning

144

HCFC-225

3,949

3,091

─

─

─

─

13

845

─

Cleaning

63

Xylene

1,373

1,373

─

─

─

─

─

─

Paint

Sanjo Works Seta Works

─

Air and Water Quality Management NOX and SOX in exhaust gas emitted from works, business sites, and research laboratories are monitored by periodical measurement. The pH and TOC of discharged water is continuously monitored using a dedicated monitor and an inhouse LAN network in addition to periodical water quality measurement. Shimadzu controls the quality of air and discharged water based on its in-house standards that are stricter than standards determined by laws and regulations.

On-Line Total Organic Carbon & Total Nitrogen Analyzer (TOCN analyzer)

4

Environmental Load Mass Balance (Sanjo Works)

INPUT

OUTPUT General Waste

Electricity Usage

33,730,000 kWh

CO2 Emissions

14,500 tons

CO2 generated from use of electricity, gas, and fuels

Gas Usage

802,000 m3

NOx Emissions

2.50 tons

NOx generated from use of gas and fuels

74 kL

Fuel (diesel oil, etc.)

SOx Emissions

0.09 tons

486.5 tons 100%

Recycling Ratio

89.9%

Valuable Materials Material Recycling Ratio

3.4%

Thermal Recycling Ratio

6.7%

SOx generated from use of fuels

Water Usage

Chemical Substances

Paper

Industrial Waste

184,000 m3 51 tons

Recycling Ratio

Shimadzu Corporation Sanjo Works

76.3 tons

Packaging Materials (plastics, wood, cardboard, etc.) 436.2 tons

Effluents

817.9 tons 98.2%

Valuable Materials

63.3%

Material Recycling Ratio

20.9%

Thermal Recycling Ratio

14.0%

184,000 m3

Industrial effluents and residential wastewater

Landfill Disposal Ratio

1.8%

Environmental Accounting Outline of 2009 Results Environmental conservation costs included expenditures to newly install waste water treatment equipment to remove nickel in the plating line and to update the cleaning equipment due to the discontinuation of substitute CFC (HCFC-141b). However, due to the current recession, total costs were 17.5% lower than the previous year. Environmental investment decreased by 79 million yen from the previous year in absolute terms and its percentage of total capital investment also decreased from 4.2% to 2.6%. In contrast, environmental R&D costs were 45.9% higher than the previous year, and increased from 13.5% to 20.9% of total R&D costs. The economic effects of environmental activities were calculated from three items that offer a reliable basis – energy savings, waste reduction, and water savings. Compared with the reference year, environmental activities resulted in 115 million yen in savings. Expenses decreased by 109 million compared with the previous year partly due to a reduction in production as a result of the recession.

Environmental Conservation Activity Costs (2009 performance) Classification

(Units: million yen)

Investment

Primary Measures

2009

Pollution Prevention Costs

Noise control, etc.

Global Environment Conservation Costs

Reduction of substances damaging the ozone layer, etc.

Waste Reduction and Recycling Costs

Commissioned waste processing, emission reductions, and waste separation

1

Costs Within Business Areas

2

Environmental Management Costs

Office expenses, training/educational expenses

3

Social Activity Costs

Monetary donations, greening, cleaning of areas near plants, etc.

4

Costs of Environmental Damage

Subtotal

Total Reference Total Capital Investments for the Applicable Period

Expenses

2008

2009

2008

149

118

105

26

92

64

128 66

0

5

81

115

175

215

250

309

0

0

137

157

11

50

63

82

0

0

2

0

186

265

452

548

7,091

6,272

Research and Development Costs Item R&D Costs

1

Investment

Primary Details

2009

Development of environmentally friendly and environmentally beneficial products

Cost

2008

0

14

Reference Total R&D Expenses for the Applicable Period

2009

2008

2,450

1,679

11,746 12,463

Environmental Conservation Activity Results Savings Compared with Reference Year

Environmental Load Index (comparison with reference year)

Results 1

Energy Savings

Amount saved: -6,360,000 kWh/year (14.7% increase)

2

Savings from Reduced Waste

Savings: 662 tons/year (25.2% decrease)

3

Water Savings

Water saved: 256,248 tons/year (53.4% decrease)

Total

Year-On-Year Savings

-17

103

29

19

104

-13

115

109

5

Calculation conditions (1) Business operations included in totals: ISO certified operations (Sanjo Works, Murasakino Works, Technology Research Laboratory, Hadano Works, Atsugi Works, and Seta Works) (2) Period covered: April 1, 2009 to March 31, 2010 (3) Results: Results indicate the extent of environmental load reductions and expenses saved through environmental conservation activities. This is limited to items that have a basis for calculation, and uses the year prior to the start of preparations for ISO certification (Sanjo Works: 1995, Hadano Works: 1997, Seta Works: 2000) as the reference year for comparison. (Depending on the contract method used, energy conserved and power rates do not necessarily match.) (4) Expenses related to education, conferences, and social activities: Calculated by multiplying the total number of man-hours expended by personnel involved in these activities by an hourly labor cost of 5,000 yen.

Occupational Health and Safety With the motto “Combining all of our efforts to reduce risks and to create a safe and healthy workplace,” we are assessing risks in order to mitigate or eliminate risks and hazards in the workplace so as to prevent accidents. We also promoted activities to maintain and improve the mental and physical health of our employees with the theme “Protect your own and everyone’s health.” In FY 2009, we took measures to improve workers’ mental health, gave them appropriate health guidance or applied work restrictions according to the results of health checkups, and instructed them to improve their lifestyle habits.

Occupational Accidents (10 years) Number of Accidents

Total Accidents

Accidents Requiring Days-Off (among all accidents)

16

15

9 5

4

9

9

8

9

7 3

1

9

8

9

7

9

9

1

8

16

11

Deaths

0

0

0

0

0

0

0

0

0

0

Days Off

4

4

1

0

3

2

0

0

3

3

Rate per 1,000 People 3

3

2 0 0 0 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Total Accidents

Permanent Injurie

8

4 1

0

Number of Incidents

11

10

Year

0

0

0

0

0

0

0

0

0

0

2.5

2.3

2.8

2.3

2.8

2.8

0.3

2.4

6.0

3.5

Frequency Total Accidents 1.38 1.24 1.43 1.11 1.51 1.51 0.16 1.33 2.55 1.86 Ratio Days Off 0.61 0.62 0.16 0.00 0.50 0.33 0.00 0.00 0.48 0.51 Severity Rate

0.014 0.017 0.002 0.000 0.002 0.012 0.000 0.000 0.003 0.002

Development of Energy Saving Products

Start of Operation of the New Waste Water Treatment Equipment

Shimadzu has provided various instruments and equipment that reduce environmental impact such as environmental measurement instruments and solar cell manufacturing equipment. As combating global warming is such an urgent issue, Shimadzu has started the “Save the Energy Project” to develop products more suitable to a low-carbon future by reducing CO2 emissions during the use of the products. Through this project, we aim to develop new models of our main products with high energy-saving potential that can consume at least 25% less power than former models. Some energy saving products are now under development in the project, including gas chromatographs, one of our main products.

Since the Manufacturing Center handles a number of chemicals that can cause environmental pollution, the Center takes daily efforts to prevent pollution by implementing training for emergency situations. Its waste water treatment facility was updated in June 2009 in order to improve its waste water treatment capacity, save space, and reduce environmental impacts such as electricity use and sludge generation. We plan to improve performance of the facility by thoroughly managing the operation of the new water treatment equipment. Former waste water treatment equipment

GCMS-QP2010 Ultra The new GCMS-QP2010 Ultra Gas Chromatograph - Mass Spectrometer where power consumption has been reduced by 26% as compared with conventional models New waste water treatment equipment

6

New Environmentally-Friendly Works When the new plant was constructed in the Seta Works, we employed the swirling induction type air conditioning system for air conditioning a large area of the Works. In this system, swirling air flow draws in the surrounding air so that air can be conditioned with less air volume, and the temperature of the blown air can be similar to the air in the working area. Thus, the system can maintain a more comfortable working environment while saving energy. Since oil mist is dispersed due to the nature of the processes carried out in the Works, an oil mist collection filter is attached to the air conditioning system to improve the working environment. In addition to energy-saving measures, measures are taken to create an environmentally-friendly plant such as the use of ecotype lighting and high-speed sheet shutters, and the introduction of air compressors where the number of units can be controlled.

“Local Production for Local Consumption” Activities in Company Cafeterias The “local production for local consumption” activities are promoted in two company cafeterias in the Sanjo Works (South and North cafeterias). We participated in the “Local production for local consumption in company cafeterias – Delicious Kyoto” campaign conducted by the Kyoto Green Procurement Network in autumn 2009 and offered menus that include vegetables produced in Kyoto. In spring 2009, the North cafeteria started its own activities such as using at least 50% rice produced in Kyoto and using locallygrown vegetables at least 30 days of each season. As a result of these activities, the cafeteria received a certification as a facility where Kyoto-grown foods are actively consumed, issued by the Kyoto Prefecture in December. We plan to promote the reduction of transport costs and CO2 emissions and improve workers’ health by using fresh local food ingredients in our company cafeterias.

Certification as a facility where Kyoto-grown foods are actively consumed

Activities for Biodiversity

Shimadzu Analysis Experience School / Junior Tennis School

As the crisis of our biological system is becoming more apparent, Shimadzu promotes activities to protect forest resources by participating in forestation activities and providing education for children using a card-type educational material called “bidi” that was created to teach players about biodiversity. Shimadzu participated in the “Biodiversity EXPO 2010 in Osaka,” Japan’s first comprehensive exhibition about biodiversity and introduced visitors to Shimadzu’s activities. This year, activities for biodiversity are included in Shimadzu’s principles concerning environmental issues and the influence of Shimadzu’s business activities on biodiversity will be studied.

Shimadzu started to hold the “Shimadzu analysis experience school” for junior and senior high school students in 2007. The school provides an opportunity to introduce scientific technology to young students with the help of OBs with expert knowledge based on Shimadzu's corporate motto “Contributing to Society through Science and Technology.” Starting with a lecture about “lights and colors,” the school includes programs such as production of a “simplified spectrometer” in continuous processes just like manufacturing in a plant and analysis experience using one of Shimadzu's product “spectrophotometers.” In FY 2009, the school was held ten times and approximately 100 students participated. Shimadzu also holds the “Shimadzu Junior Tennis School” for amateur tennis players from the fourth grade through the third year of high school with a representative player of the Shimadzu Tennis Club as the instructor. This school is held to teach local children the joy of playing tennis through technical instruction by a Japanese ranked Shimadzu player and communication with other participants.

Biodiversity EXPO 2010 in Osaka

Shimadzu Analysis Experience School

Shimadzu Junior Tennis School

Changes in the Number of External Support Cases and Participants Shimadzu offers assistance for environmental activities outside the company by holding environment-related seminars, providing assistance to obtain the ISO-14001 certificate, and offering on-site environmental lectures. Shimadzu plans to continue to promote external support actively.

7 Business Locations Used in This Report

Number of Cases and Number of Participants (December 1998 to March 2010)

Cases 4401 4661

100

Cases

1421 20 0

1013 23

1527

3323 2411

2038

4000 3000

88

101 78

Headquarters (Sanjo Works)

5000 2899

60

Seta Works Murasakino Works

6000

5156

4450

80

40

Participants

73

90 71 71

41 49 38

’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09

2000

Atsugi Works

Participants

120

Hadano Works Technology Research Laboratory (Keihanna)

1000 0

Corporate Overview Corporate Trade Name: Shimadzu Corporation Corporate Philosophy: Contributing to Society Through Science and Technology Management Principle: Realizing our Wishes for the Well-being of both Mankind and the Earth Founded: March 1875 Incorporated: September 1917 Capital: Approx. 26.6 billion yen Number of employees: Shimadzu Corporation only: 3,134 persons, the entire Shimadzu Group: 9,624 persons (as of March 31, 2010) Headquarters: 1, Nishinokyo-Kuwabara-cho, Nakakyo-ku, Kyoto 604-8511, Japan

Sales Trends Unit: million yen

Non-consolidated sales

300,000 262,431 250,000

233,558

242,638

200,000 158,208

162,417

289,971

Consolidated sales

272,833 238,255

170,773

171,096

159,074

150,000

141,887

100,000 50,000 0

142nd Term FY 2004

143rd Term FY 2005

144th Term FY 2006

145th Term FY 2007

146th Term FY 2008

147th Term FY 2009

For inquiries regarding environmental activities, such as environmental reports, websites, and other types of information: Global Environmental Management Department 1, Nishinokyo-Kuwabara-cho, Nakagyo-ku, Kyoto 604-8511, Japan TEL: +81-75-823-1113 FAX: +81-75-823-2062 E-mail: [email protected]

URL: //www.shimadzu.co.jp Shimadzu’s principles concerning environmental issues are available on its home site.

The CO2 generated preparing this Environmental and Social Report was offset with a reduction in CO2 in accordance with the Kyoto Eco-Point Model project.

To conserve resources, this document uses recycled paper and aroma-free soy ink. 0215-09001-10ANS