Environmental Management Sustainability Report 2006

Coexistence and Harmony with Society

The Kobe Steel Group is committed to harmonious coexistence and cooperation with society. To that end, we contribute to local communities and promote international cooperation through participation in beneficial social activities both as a Group and through individual employees.

Contribution to Local Communities

Kobe Steel's operating locations contribute to the beautification of local landscapes by participating in clean-up campaigns and other activities. In addition, they contribute to communities by engaging in social service. In fiscal 2005, for example, we dispatched environmental lecturers to Amagasaki Technical High School in Hyogo Prefecture and Kobe Takatsuka High School in Kobe.

Environmental education at Amagasaki Technical High School

Environmental Activities in Local Communities

Members of the River Clean Eco-coal Bank (River Clean Ecotan Ginko) notified Kobe Steel that "the actual facts differed from the content and picture Kobe Steel had posted" on its Sustainability Report Web site. In the writing of the passage below, Kobe Steel's editors and publisher of the Sustainability Report had neglected to fully check the facts. Kobe Steel deeply apologizes for the trouble and misunderstanding this lapse has caused the concerned party. A correction follows. Turning Local Bamboo into Charcoal Yuukari-kai, the foremen's association at Kakogawa Works, has long been involved in local volunteer activities. One of them introduced below is the Eco-Charcoal Activity. The Eco-Charcoal Activity is a program undertaken by the River Clean Eco-charcoal Bank (River Clean Ecotan Ginko). Bamboo groves, owned by people who have grown too old to care for them, are harvested, and the Eco-charcoal Bank uses a charcoal machine to turn the bamboo into charcoal. The finished charcoal is divided three ways among the bamboo grove owners, the people who make the charcoal, and the Yoda Machizukuri Iinkai (Yoda Town Development Council). A number of members of the Yuukari-kai participated in the Eco-charcoal Activity in fiscal 2004. Restoring Mountains, Rivers and the Sea The bamboo charcoal, made through the Eco-charcoal Activity, has purifying properties. It is used to improve the water quality of ponds and irrigation ditches located in the area. The Yuukari-kai members hope that "more people will become interested in environmental conservation and that they will participate in any way they can."

Supporting Environmental Activities

Kobe Steel established the Kobelco Natural Environment Conservation Fund and the Kobelco Environment Creation Fund in April 2001 to support people involved in activities to conserve the natural environment. Kobe Steel will continue to support wide-ranging environmental conservation activities, through various undertakings that go beyond the framework of the Kobe Steel Group, while recognizing the importance activities at the popular level.

Tree planting in Mongolia

Name Kobelco Natural Environment Conservation Fund Kobelco Environment Creation Fund Activities Targeted for Support Community-based environmental conservation activities by general public Relatively large-scale environmental preservation activities with great potential and high contribution to the environment Activities in fiscal 2005 Support of 31 environmental conservation activities including conservation of woodlands near cities, biotope creation, tree plantings, nature observation tours, environmental workshops, educational activities for global warming prevention Forest conservation and recycling support programs Supporting environmental exhibitions

Cooperation with the Local Community

Shinko Kobe Power Inc. in Kobe supplies heat from its power generation plants to three sake breweries in the Nishigo area_Nishigo is one of the five areas renown for sake brewing in Kobe and Nishinomiya.

Steam generator

Greening of Operating Locations

To improve the quality of the surrounding environment and contribute to the absorption of CO2 in the air, Kobe Steel's operating locations are building green zones around their facilities and growing various kinds of foliage. For example, near the center of the grounds of the Kobe Corporate Research Laboratories, we completed construction of a biotope in the summer of 2005 to commemorate the centennial of Kobe Steel's founding. The many commemorative trees that had been planted throughout the grounds were transplanted to the periphery, and new trees were planted to create an environmentally friendly place in which to pursue research.

Greening of factory site Biotope at Kobe Corporate Research Laboratories

International Cooperation

The Kobe Steel Group accepts trainees from abroad and provides technical training. Promoting international cooperation, Kobe Steel utilizes its broad experience in the environmental and energy fields.

Overseas trainees at Kobelco Eco-Solutions Co., Ltd.

Cooperation Activities Country Sponsoring Organization Accepted overseas trainees Zambia Hyogo Prefecture Environmental technical training (Wastewater treatment facilities) Vietnam Japan International Cooperation Agency (JICA) Accepted trainees for prevention of air pollution, including acid rain Southeast Asia, others JICA Training to monitor acid rain in East Asia Cambodia, China, Malaysia JICA Analysis techniques for environmental burden substances and risk assessment course Chile, Egypt, Fiji, Indonesia, others JICA Energy-saving training Iran JICA, The Energy Conservation Center Accepted trainee group for Chinese environmental conservation China The Association for Overseas Technical Scholarship (AOTS)

Aluminum Can Collection and Recycling

As Japan's largest producer of rolled aluminum products, Kobe Steel launched the Shinko Aluminum Can Back program in 1990 at all divisions, offices and operating locations. This program continues in many forms today. For example, the Moka Plant and Shinko Moka Sohgo Service Ltd. are working with authorities in Tochigi Prefecture and other companies to mount a public relations campaign about recovering and recycling aluminum cans. To that end, they send a car-mounted can press to local summer festivals and other events to demonstrate how recycling is done.