Murata established its cost management system in 2003. This initiative enables the Company to evaluate the costs of environmental activities in its domestic manufacturing plants and subsidiaries and the results of these endeavors. Through the system, this information is subsequently linked to ongoing activities to reduce our environmental impact.

Since fiscal 2006, we have been preparing to introduce this system in our overseas factories. After surmounting various difficulties, the system is due to start operation from fiscal 2008.

During fiscal 2006, the cost of Murata's environmental activities was ¥4 billion, and investment expenses totaled ¥1.7 billion.

Investment in such energy reduction technologies as cogeneration systems as part of our strategy to curb global warming dropped, leading to a decline in global environmental conservation investment. However, investment in pollution prevention increased, spurred by the installation of gas emission and wastewater treatment facilities accompanying new manufacturing plant construction.

Results of environmental activities included a reduction of 170,000 tons in greenhouse gas emissions arising from aggressive introduction of double-bundle refrigeration equipment.

Classification		Costs (Millions of yen)		Investment (Millions of yen)
		Fiscal 2005	Fiscal 2006	Fiscal 2005	Fiscal 2006
Cost manufacturingplant premises	Pollution prevention	464	470	239	893
	Global environmental conservation	364	319	1,178	512
	Recycling	1,326	1,511	190	109
Cost for upstream/downstream environmental conservation		149	120	0	0
Cost of management activities		429	472	0	97
Cost of social activities		164	200	1	1
Cost of R&D		1,468	930	129	96
Cost of environmental damage		0	0	0	0
Total		4,364	4,022	1,737	1,708

Economic Effects (Millions of yen)
Classification		Cost effectiveness		Return on investment
		Fiscal 2005	Fiscal 2006	Fiscal 2005	Fiscal 2006
Cost manufacturingplant premises	Pollution prevention	0	0	0	0
	Global environmental conservation	259	166	1,835	3,823
	Recycling	514	969	514	59
	Subtotal	773	1,135	2,349	3,882
Cost for upstream/downstream environmental conservation		17	0	-	-
Cost of management activities		0	7	-	-
Cost of social activities		0	0	-	-
Cost of R&D		0	0	-	-
Cost of environmental damage		-	-	-	-
Total		790	1,143	2,349	3,882

Physical Effects
Classification	Cost effectiveness		Return on investment
	Fiscal 2005	Fiscal 2006	Fiscal 2005	Fiscal 2006
No. of cases exceeding regulation value	0	0	-	-
Reduction in chemical substance emissions (tons)	189	359	-	-
Reduction in GWG emissions (tons-CO2)	18,665	86,568	203,344	167,140
Savings in resources (tons)	211	3,239	394	-
Savings in water saving (m3)	686,611	279,610	604,662	-
Reduction in waste emissions (tons)	7,401	9,349	22,063	1,271
Increase in recycling (tons)	101	61	-	-
Reduction in packaging materials (tons)	23	2	-	-

1. The scope of accounting includes Murata Manufacturing's plants and 17 subsidiaries in Japan.
2. The accounting term is the 12-month period from April 1, 2006, to March 31, 2007.
3. Costs include labor and depreciation.
4. Proportional accounting is applied for compounded costs, in which the cost of environmental conservation is embedded in other costs.
5. Putative effects avoidance of latent risk and other such factors are not calculated
6. CO₂ emission conversion factors use fuel and power figures from the Environment Agency (1992) Report on Carbon Dioxide Emissions.
7. Quantitative effects of countermeasures are calculated as the difference between the outcomes of implementing and not implementing a countermeasure.
8. Research and development costs are the total expenses for R&D intended primarily for environmental conservation.