Environmental Accounting

Honda is engaged in identifying the cost of environmental conservation efforts, with the following objectives:

• Environmental accounting is to be used in support of management decision-making in environmental affairs.
• Environmental accounting provides society a means of evaluating Honda's actions.

The following table shows the environmental conservation costs incurred by Honda in FY2007.
Environmental conservation-related research and development costs and facility environmental conservation costs have increased over the previous year.

(Units: millions of yen)Costs and Effects of Environmental Conservation Initiatives in FY2007

Category		Outline of Main Initiatives	Investment	Expenses	Effects
Business area costs	Pollution prevention costs	Prevention of air, water and soil pollution	1,520	2,111	•Total CO2 emissions: 463,000 CO2 tons, 37,000 tons under target Details •Internally incinerated waste: 1,400 tons Reduced by about 700 tons from the previous fiscal year Details •Per-unit VOC emissions: 33.0 g/m2 1.8 g/m2 lower than target Details
	Global environment conservation costs	Prevention of global warming and ozone layer depletion; other environmental conservation	2,198	375
	Recycling costs	Waste processing, separation, reduction, elimination and recycling	835	1,245
Upstream/downstream costs		Green Purchasing (balance) Collection, recycling, reuse and proper disposal of products manufactured and sold Industry organization and other membership fees	2	1,033
Management costs		Associate environmental training Implementation, operation and acquisition of certification for environmental management systems Monitoring and measurement of environmental impacts Management of organizations responsible for environmental conservation	0	1,089
Research and development costs		Research and development on products contributing to environmental conservation Research, development and design for reduction of environmental impacts throughout the product life cycle	25,190	140,950
Philanthropic initiative costs		Environmental improvement measures, including ecosystem protection, greenification and natural landscape conservation Support and distribution of information to local citizens Donations to and support of organizations engaged in environmental conservation Disclosure of environmental information	0	678
Environmental damage costs		Recovery of polluted soil	0	3.9

1) Scope of calculations:
•Companies covered:
Honda Motor Co., Ltd.,
Honda R&D Co, Ltd.,
Honda Engineering Co., Ltd.,
•Domains covered:
All domains impacting the life cycle of Honda products
•Period:
April 1, 2006 to March 31, 2007
2) Due to the difficulty in certain situations of deriving precise figures, some figures are estimates.
3) Some calculations are based on reference materials, particularly guidelines and guidebooks published by Japan's Ministry of the Environment.
4) Costs are quoted on a cash-flow basis with depreciation costs excluded.
5) For further information on the effects of initiatives, please refer to other sections of this annual report.

Environmental Training

Environmental Training for New Associates

As part of Honda's training curriculum for all new hires, environmental training programs are provided to ensure that associates recognize their responsibilities for environmental conservation as an integral part of their duties. Training focused on Honda's environmental and safety policy is provided to new associates to help deepen their environmental awareness and their recognition of the importance of the responsibilities of a mobility manufacturer. Immediately after joining Honda, new associates visit Honda plants to receive presentations about Honda's environmental philosophy and initiatives, and to get hands-on experience in environmental measures implemented in automobile and motorcycle manufacturing. Environmental information–including description of environmental initiatives, information on product environmental performance, and information on laws and regulations–is also delivered to associates via the company intranet.

At NH Circle Conventions associates give presentations on environmental issues, conservation of energy and other resources, and recycling. Winning presentations are publicized as good examples for all associates. As the severity and global scope of environmental problems become more obvious, Honda is striving to make associates more aware of the environment and encouraging them to voluntarily act in an environmentally responsible manner in their professional and personal lives.

Environmental Training Based on the Environmental Management Systems

Every factory and office develops plans for education and training programs on the basis of their environmental management system and holds regular training events for all personnel, operators engaged in environmentally sensitive operations, and internal environmental auditors.