Once a year we conduct an "environmental impact assessment" (at GEMS, sub-site and operational division level) to clarify aspects of our corporate activities, products and services that affect or are likely to affect the environment. We then identify the aspects with significant environmental impact.

To ensure continued improvement of environmental performance with respect to significant environmental aspects, Group-wide mid-term targets (targets to be attained in three years) set by the President of SANYO Electric are incorporated into the Sanyo Group Environmental Action Plan. Based on this, the Group Environmental Supervisor develops annual targets and plans, and supervises their implementation. The GEMS Secretariat is responsible to supervise and measure the progress of the Group Environmental Action Plan monthly and submit report to the Group Environmental Management Representative and the Group Environmental Supervisor.

Following the instructions of the Group Environmental Management Representative, the sub-sites have set their own specific targets based on the Group Environmental Action Plan. The sub-sites also pursue improvement of "significant environmental aspects" based on their own objectives and targets, not included in the Group Environmental Action Plan. The environmental aspects that have been improved to a certain level are then reclassified as items that need maintaining, to which efforts are directed to maintain the current level.

The Sanyo Group considers the "possibility of physical impact on the global environment" and the "possibility of environment-related economic losses to be incurred by the Sanyo Group" as two major environmental risks, while specific environmental risks are identified by each sub-site within the Group. The environment-related economic losses to be incurred by the Sanyo Group can include direct monetary losses and intangible damage to our corporate image that may lead to monetary losses in the future. To be specific, such losses include the followings.

• The possibility of impact on the global environment, including natural disasters, accidents at facilities, and environmental pollution, and the possibility of economic losses of the Company caused by the above events.
  [Example] The Possibility of soil pollution by toxic substances in the coating material.

• The economic damage to the Company in case of a negative impact on the global environment.
  [Example] The possibility of losing a sales opportunity in the case where a product contains a chemical substance that has a high environmental impact.
• The possibility of economic damage to the Company caused by requirements concerning social environment including environmental regulations.
  [Example] The possibility of objections and demands from the local residents arising as a result of insufficient explanation of the construction works, etc.

• The possibility of economic damage caused to the Company as a result of the actions of others that have negative effects on the global environment.
  [Example] The possibility of the brand value decreasing, caused by the illegal dumping of our refrigerators and its reporting.

The Sanyo Group has formulated and is promoting a range of measures to cope with environmental risks, and incorporates the measures which have been judged especially important as a result of environmental impact assessment in the Group Environmental Action Plan or subsites' objectives and targets to ensure these measures are implemented without fail. For items that have achieved the targets, we set higher targets. However, for items where no future improvement is expected from pursuing numerical targets, we set new targets from a different angle while striving to maintain the current situation.

Emergencies are defined as unexpected events that can cause serious impact, such as pollution, to the environment beyond the control of a sub-site or outside its boundaries following a natural disaster or accident.
Each sub-site carries out an environmental impact evaluation in the event of an emergency. The storage of large quantities of substances that can cause serious impact to the environment in the case of leakage is identified as a significant environmental risk that can cause an emergency situation. Such substances include: chemicals such as hydrofluoric acid, sodium hydroxide, and nitric acid; cadmium and its compounds; solvents and other chemical substances; and hazardous wastes (waste alkalis, waste acids and waste oil).
To cope with such emergencies, protective and preventive facilities and equipment are in place, and emergency procedures are set. These procedures are tested regularly and any inadequacies are reviewed and rectified.
To ensure information and instructions are given promptly and effective Group-wide action is taken in case of emergency, the Group Environmental Management Representative and the GEMS Secretariat conduct a simulation test every year assuming an emergency at a sub-site.