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Environmental Management Sustainability Report 2007 Coexistence and Harmony with Society As a member of society, the Kobe Steel Group continually engages in activities that promote personal interaction with local residents and contribute to the welfare of local communities. In 2006, to commemorate our first century of operation, we established the Kobelco Community Contribution Fund, which provides active social welfare support to communities where our operational sites are located. Kobe Steel's Kobe Works: Sponsoring a "Recycle Corner" at the Nada Cherry Festival In early April of each year, former members of the Foremen's Association at Kobe Works contribute their time at the Nada Cherry Festival, which is held in Toga River Park in Nada Ward, Kobe. At the festival held on April 1, 2006, they set up a "KOBELCO Recycle Corner," where they gave out potted flowers to anyone who brought in 20 empty aluminum cans. The Nada Cherry Festival is a locally sponsored event that enjoys the participation of all kinds of groups in Nada Ward and is well-attended every year. Recycle Corner at the Nada Cherry Festival Kobe Steel's Kobe Works: Christmas Presents to Welfare Facilities from Foremen's Association and Volunteer Employees Around Christmas time, members of the Foremen's Association at Kobe Works took the initiative in organizing the donation of Christmas presents to welfare facilities in Kobe's Nada Ward and Higashi-Nada Ward. This charitable event has been held annually since 1978, with the presentation ceremony on December 21, 2006 marking the 29th year. This time, electrical appliances were given to two facilities in Nada Ward and two in Higashi-Nada Ward. In recognition of this project, the city of Kobe has presented the Foremen's Association and volunteers with its Flower Clock Award for eight straight years. Letter of thanks received from children Kobe Steel's Kakogawa Works: Lively Shinko Kakogawa Festival Held by Local Residents and Kobe Steel Employees On October 29, 2006, the 16th annual Shinko Kakogawa Festival was held on the grounds of Kobe Steel's Kakogawa Works. Highlights included outdoor booths run by the local neighborhood associations and Kobe Steel personnel; a stage for local entertainers; and a cartoon character show that delighted the kids. About 13,000 people attended the event, tying the previous record set in 2005. People who participated in the factory tours were especially impressed by the hot rolling facilities, with people waiting more than an hour for their turn to get a peek at the inner workings of steelmaking. At one point, the tours were so popular that restrictions had to be placed on entry. The 16th annual Shinko Kakogawa Festival Kobe Steel's Fujisawa Industrial Operations: Shinko Festival Held Jointly with Neighborhood Council Fujisawa Industrial Operations opened up its grounds to local residents on August 4, 2006 to hold the summer Shinko Festival. Fun events included singing performances sponsored jointly with the local neighborhood council and a raffle. Kobe Steel employees manned the outdoor food carts serving delicious treats for young and old. About a thousand people attended the festival, including local residents, employees and their families. About 1,000 people came to the Shinko Festival Kobe Steel's Moka Plant: About 180 People Volunteer to Clean Up the Okubo River The Moka Plant participates in the Moka Environmental Partnership program, which is sponsored by Moka City to encourage environmental conservation activities. As part of the program, Moka Plant employees volunteer to clean up the banks of the Moka River, remove unwanted vegetation, and plant trees. Serving as a gathering point for Moka citizens, company employees and local government staff, the Partnership creates a model district around the Okubo River where people can personally experience the regeneration and wise use of nature while learning about the environment. In FY2006, Moka Plant sponsored three volunteer clean-up projects with the participation of a total of about 180 volunteers, including current employees, cooperative organizations, and a retiree association (former employees of Kobe Steel). Environmental conservation activities along the banks of the Okubo River will continue to be a focal point for the Moka Plant in the future. Volunteers clean up the banks of the Okubo River Kobelco Systems Corporation: Participants in the Mt. Rokko Clean Hike Pick Up Trash as They Go About thirty employees of Kobelco Systems Corporation volunteered to organize the Rokkosan Clean Hike in 2006. Recognizing the importance of protecting Kobe's natural environment, particularly the Mount Rokko area, participants collected trash as they enjoyed the beautiful flora and changing seasonal scenery. On November 25, the group heard lectures from members of a volunteer organization called the Mt. Rokko Environmental Study Group, who spoke about the history of the mountain, the characteristics of autumnal flowers and trees, and ways to identify local plants. Participants enthusiastically cleaned up the mountain while being reminded of the importance of nature. A lecturer gives a presentation about the natural environment on Mt. Rokko. Volunteers pick up trash along the mountain trail. Nippon Koshuha Steel Co., Ltd.: Weeding the Grounds of a Nearby Middle School and Participating in Local Disaster Prevention Programs Over the past few years, about 60 volunteer managers and administrative personnel at Nippon Koshuha Steel have gotten up early during summer vacation to pull weeds on the grounds of a middle school close to the Toyama Plant. In FY2005, they also donated a motorized weeding machine to the school. These volunteers also clean up around Higashi Shinminato Station, and about 50 regular employees volunteer to completely clean the street that runs in front of the company. In addition, about 40 to 50 employees have organized a volunteer fire prevention squad inside the factory. They have received a fire truck from the local fire department and are not only dedicated to protecting the factory itself but also actively participate in community firefighting training exercises. Ready to provide assistance should the need arise, these volunteer firefighters are an important component of regional fire-prevention programs. Volunteers weed the grounds of a nearby middle school. Kobelco Construction Machinery Co., Ltd.: Actively Contributing to the Welfare of Society Both in Japan and Abroad Kobelco Construction Machinery has long contributed to the welfare of society in Japan, and these activities have been expanded overseas, as well. The company established the Kobelco Construction Machinery CSR Fund in 2006, which is dedicated to promoting regional exchange, providing scholarships, and engaging in a wide variety of other support activities focused on the themes of global environmental protection, education of human resources, and contribution to local communities. For example, support has been given to an elementary school deep in the mountains about 110 kilometers from the company's factory in Chengdu, China. Through this assistance, glass windows were installed and students received aid to cover school expenses and lunch costs. Subsequent support has included the donation of used clothing and scarves, and equipment to assist learning. At the Kumamoto Plant of Kobelco Construction Machinery (Kyushu) Co., Ltd., ongoing programs give students at a nearby school for children with special needs the opportunity to operate excavators and jet skis, and enjoy other experiences. Support for an elementary school in the mountains of China Providing children with novel experiences Kansai Coke and Chemicals Co., Ltd.: Employees Teach Educational Programs on Manufacturing Techniques and Chemical Experiments To help employees heighten their awareness as members of the local community and contribute to the well being of society, employees visit nearby elementary schools during spring and summer vacations and teach children how to make things and how to conduct chemical experiments. For example, in August 2006, employees visited schools in Amazaki City (where the company's headquarters are located) and in Kakogawa City (where its plant is located) to teach elementary students how to build radio-controlled models. Similarly, in March 2007, they taught elementary students in Kakogawa City how to conduct chemical experiments using activated charcoal. By becoming teachers and showing students both the enjoyment and the difficulty associated with understanding chemistry and manufacturing things, they help to strength the bonds of communication between the company and local communities. How to make things Chemical experiments Kobelco Community Contribution Fund Begins Operation In commemorating the 100th anniversary of Kobe Steel's founding, we established the Kobelco Community Contribution Fund in June 2006. Fund activities in FY2006 focused on social welfare programs for children, who are our future. Assistance was provided in various forms in nine cities in which Kobe Steel has a presence, including Kobe, Kakogawa, Takasago, Ibaraki, Higashihiroshima, Fujisawa, Shimonoseki, Inabe and Moka. More specifically, the fund provided support to: 1) children's special care centers and welfare facilities for the disabled; 2) nursery schools, day-care centers and other facilities that provide childrearing support; 3) groups that enable children themselves to contribute to their local communities; 4) groups that provide support to victims of domestic violence; and 5) groups that engage in artistic and cultural educational activities aimed at children. Projects Supported by the Kobelco Community Contribution Fund in FY2006 City Recipient Type of Support Kobe Children's special care facilities (5) - Funding for the installation of playground slides - Funding for the purchase of personal computers - Funding for the installation of playground fences - Funding for the purchase of screens and audio sets Volunteer groups that assist victims of domestic violence - Funding for shelter operation Volunteer groups engaged in artistic and culture education for children - Funding to support artistic and cultural educational activities Kakogawa Childrearing support circles (4) - Funding for the purchase of equipment for track meets and other outdoor events, as well as for Christmas and other seasonal events Volunteer groups that enable children themselves to contribute to their local communities - Funding for the purchase of materials used in disaster-prevention PR activities - Funding for the purchase of materials used in maintaining waterways Takasago Childrearing support circles (37) - Funding for the purchase of picture books and toys, as well as for the dispatch of childrearing lecturers Ibaraki Children's special care facilities (3) - Funding for outdoor activities - Funding for travel expenses for a brass band concert at a retirement home - Funding for the purchase of facility equipment Higashihiroshima Daycare centers (3) - Digital height measurement devices Fujisawa Children's special care facilities (1) - Funding for building renovation work Shimonoseki Children's centers (2) - Outdoor billboards - Jungle gyms Inaba Childrearing support centers (6) - Funding for the purchase of picture books and toys, as well as for the dispatch of childrearing lecturers, etc. Moka Children's special care facilities (1) - Funding for accoutrements used in general room - Funding for camp and social sports events Welfare facilities for the disabled (2) - Funding for the purchase of work equipment and tables - Funding for functions, including regional exchange events and outdoor training