Environmental Management Environmental Sustainability Report 2005

Basic Policy for the Environment and Actions to be Taken

The protection of the global environment is the most important issue for all forms of life, and it is our mission to bequeath a better environment to the next generation. We are determined to be friendly to the environment. For this purpose, we formulated the Basic Policy for the Environment and are promoting environmental management in all aspects of our business activities. Basic Policy for the Environment: Promotion of Group Environmental Management The Kobe Steel Group will incorporate environmental considerations into all business activities and aim to become an advanced eco-friendly corporate group through the following: (1) Harmonious coexistence and cooperation with society (environmental communication) (2) All-out effort to reduce environmental burdens (environmental protection) (3) Creation of new values in products, technologies, and services (environmental innovation) Actions to be Carried Out The Environmental Management Committee decides the actions to be carried out by the entire Kobe Steel Group and promotes group environmental management. Presently, group environmental management is carrying out under six specific actions: 1) thorough environment-friendly production, 2) contribution to environmental protection through products, technologies and services, 3) disclosure of environment-related information, 4) harmonious coexistence with the society, 5) promotion of employee initiatives, and 6) thorough risk control. Environmental Management Committee On Promoting Group Environmental Management I believe that steady gains from daily efforts are important in environmental initiatives. We must start from what we can do and move forward step by step. The environmental management that the Kobe Steel Group is promoting recognizes that our corporate activities are a burden on the environment to no small extent. We must take the environment into consideration in our decision-making and activities. After deciding in which direction to proceed, we must then carry out the initiatives with everyone's participation. It goes without saying that our task is to carry out environmental protection activities to reduce the environmental burden arising from our manufacturing processes. We also regard environmental innovation ? contributing to the environment by applying our technology and know-how to products and services ? as a critical mission. And as a matter of course, all business activities are based on environmental communication, which is to coexist and cooperate with local residents and society. The Kyoto Protocol came into effect in 2005. In addition to production facilities, we plan to promote activities at the household level that even in a small way will lead to a reduction of greenhouse gas emissions. As the chairman of the Environmental Management Committee, I will stand at the forefront and actively promote environmental activities to turn us into an environmentally advanced corporate group. Hiroshi Sato Chairman, Environmental Management Committee (Executive Vice President, Kobe Steel, Ltd.)