With the aim of strengthening its environmental governance, Pioneer has created a structure that will enable integration of the environmental management systems promoted at each of its facilities and subsidiaries in Japan, thereby encouraging organization-wide activities toward common goals. In future, integration will be extended to cover all subsidiaries worldwide, thereby further enhancing the results of the environmental activities of the entire Pioneer Group.

Organization of Pioneer environmental preservation activities

In 1991, Pioneer launched the Pioneer Environmental Conservation Committee to serve as a group-wide organization to discuss and take action on environmental issues related to business activities at Pioneer facilities. In 2006, the Company inaugurated the Pioneer Eco-Products Committee, which cross-divisionally controls those environmental preservation activities related to products. This current two-committee structure serves as horizontal and vertical axes in promoting overall activities of Pioneer's environmental preservation system to cover both facilities and products.

Environmental Management System

Pioneer is building an environmental management system based on ISO 14001 international standards. This system is used effectively in Pioneer Group companies worldwide to implement environmental preservation activities.

We conduct internal audits regularly at each facility to check the effectiveness of the environmental management system and promote continuous improvement. The Pioneer Group in Japan has some 100 active internal environmental auditors. In addition, our environmental management system is objectively assessed by regular external audit conducted by an ISO 14001 registration body. Problem areas or the need for improvement which are highlighted by the internal and external audits are dealt with appropriately and any measures taken are spread laterally throughout the group to ensure uniform improvement. In addition, self-assessment is conducted at all our facilities throughout Japan and this self-inspection creates opportunities for us to notice areas that need improvement and implement measures on our own initiative.

In September 2009, Pioneer Corporation and its domestic group companies acquired ISO 14001 certification, an international standard for environmental management systems, for all their domestic facilities. In addition, 6 items to be monitored were highlighted. Efforts are being made to share information between all facilities in order to ramp up environmental activities in response.

Integrated Environmental Management System

With the growing importance of environmental preservation activities, particularly measures to combat global warming, it is essential to promote strong, efficient environmental management in order to achieve good results. At such a time, enhancement of the environmental governance of the Pioneer Group is a major issue. The ISO 14001 environmental management systems at Pioneer Corporation's four sites (Head Office, Kawagoe, Kawasaki and Corporate Research & Development Laboratories) were integrated in August 2007. Integration enables the business sites to rigorously carry out Plan, Do, Check and Act (PDCA) activities, and ensures that all these sites work together toward more ambitious targets. In addition, integration has been extended to group companies in Japan in 2009. This is an opportunity to unify the Pioneer Group's environmental policy for an integrated environmental management system. Looking forward, integration will be extended to group companies worldwide, thereby further enhancing the results of the entire Group's environmental conservation activities.

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

ISO14001 Certification Status (As of March 2011)

Environmental Accounting

Pioneer has kept environmental accounts since the internal Environmental Accounting Committee was formed in October 1999. The scope of environmental accounting application is all offices and subsidiaries that are certificated by ISO14001 management system. Pioneer discloses its environmental accounting results as an important tool in the promotion of corporate environmental preservation activities.

Pioneer has established its own Group-wide Environmental Accounting Guidelines based on the "Environmental Accounting Guidelines (2005 Edition)" published by Japan's Ministry of the Environment. These guidelines stipulate that environmental investment depreciates in fixed amounts over a five-year period and the economic benefit extends to five years. Our environmental investment calculations, however, reflect figures from 1999 onwards, the year that Pioneer began keeping environmental accounts. It is possible to make comparisons in green purchasing as to when consideration has been made for the environmental or not; furthermore, only items which show a striking difference are calculated. One hundred percent of wage costs are accounted for in the division that deals with the environment full-time, and other notable environmental activities are accounted for based on a pro rata or time-multiplied wage rate. Economic benefits such as sale profits from recycling and cost savings (savings on electricity and waste disposal expenses, external consultation fees, environmental impact measurement fees, etc.) are accounted for, but so-called "surmised benefits" (from risk avoidance) are not calculated.

Results: investment ¥90 million, expenses ¥1,201 million, economic benefit ¥176 million. In addition, there were no environment-related investment/loans*.

*Environment-related investment/loans: Investment and loans under the Environmental Consideration Law that take into consideration the environment

Environmental costs

Category	Description	Details	FY2010/3		FY2011/3
			Investment	Expenses	Investment	Expenses
Plants	1. Anti-pollution costs	Wastewater treatment and management, water quality analysis, smoke treatment, etc.	10	201	36	81
	2. Global environmental preservation costs	Energy saving-related costs (depreciation of solar power generation, demand control, inverter control, power measuring systems introduction, etc.)	47	152	0	129
	3. Resource recycling costs	Waste disposal and recycling costs	0	152	0	122
Upstream and downstream costs	Cost of reducing environmental impacts generated upstream or downstream in production and servicing activities	Difference from environment-friendly products (elimination of styrene foam, use of lead-free soldering, energy saving components, etc.) x no. of units produced, green procurement by introduction of EDX equipment, green purchasing	0	76	0	31
Management activities	Cost of acquiring and maintaining ISO 14001 certification, education and training costs, PR costs	Cost of acquiring and maintaining ISO certification, environmental organization personnel expenses Education and training costs, PR activities, cleanup activities	8	509	0	264
R&D	Environmental preservation costs in R&D activities	Cost of developing technologies including environmental factors (high-performance organic EL displays, ultrahigh-density storage, etc.)	244	802	54	440
Social activities	Environmental preservation costs in social activities	Voluntary environmental preservation activities (Zero Refuse Campaign, etc.) and donations to environmental groups	0	17	0	12
Environmental remediation	Envionmental remediation cost	Cost to restore, cover degradation suits or insurance fees.	0	0	0	123
Total			309	1,909	90	1,201

Economic benefits

Economic savings
Category	Details	FY2010/3	FY2011/3
1. Savings due to environmental preservation (energy saving, pollution prevention, etc.)	Power reduction by purchase of energy saving equipment, upgrading, etc.	194	85
2. Savings due to resources recycling (resource saving, recycling, waste disposal, etc.)	Reduction of waste disposal costs	53	46
	Profits from sales of valuable resources	23	31
3. Upstream and downstream savings (in procurement, production, distribution, green purchasing)	Reduction in component unit price, reduction in distribution costs, green purchasing effect	14	14
Total		284	176

Environmental Risk Management

In the unlikely event of an accident at a facility that resulted in environmental contamination of the surrounding area, it would take a lot of time and money to restore the contaminated environment and could cause serious problems and loss to the neighboring residents and many other concerned people. In order to avoid such risk, Pioneer has established and operates voluntary management standards that are stricter than mandated by law.
In FY2011, there were zero violations of the law at our domestic business locations. There was one incident where a business location received a complaint related to the environment, and the complaint concerned the sorting of waste by an industrial waste processor.
At business site that have been closed, we conducted an inspection for soil contamination. The results showed some contamination by hazardous substances. We reported these findings and the site is designated as designated area. We plan to remove the contaminants when the site is changed the characteristics.

For facilities likely to cause major environmental impact in the event of an accident (such as crude oil tanks), we carry out emergency response training to handle every conceivable emergency. We have also devised a system for taking steps to quickly minimize the impact and promptly notifying the local authorities in which the concerned facility is located.
In FY2011, there were no environmental emergencies at our plants in Japan.

Polychlorobiphenyl (PCB) was widely used in electric transformers and capacitors in the past. Recognized as a persistent, harmful chemical substance, the manufacture and import of PCB is currently prohibited under the Stockholm Convention on Persistent Organic Pollutants. The disposal of all devices containing PCB by no later than 2016 has been mandated. On this basis, Pioneer is systematically promoting disposal. As of the fiscal year ended March 31, 2011, the Company had disposed of four units, with 31 units still in storage.

Data submission under the PRTR Law in Japan began in FY2002. In accordance with the Law, the Pioneer Group collects and manages environmental data for each facility and reports to the prefectural authorities. Utilizing this data, we are committed to raising the level of environmental risk management and reducing environmental impact.