1st: Environment

Stackholder Dialogue

Asahi Glass held its first stakeholders dialogue in March 2006 in order to listen to external opinions and comments on the Group's CSR activities and to effectively conduct these activities in line with requests from society. The stakeholders dialogue is intended to let people in different positions with different ideas exchange opinions based on the common recognition of problems and to deepen their mutual understanding. The first dialogue was held focusing on “Environment,” one of the priority issues for the Asahi Glass CSR activities, with knowledgeable people from outside the company invited. From Asahi Glass, the CTO and a total of six technical managers from the Flat Glass Company, the Display Company, and the Chemicals Company attended the meeting to discuss the topic from multifarious angles. Asahi Glass will continue to talk directly with its stakeholders on important CSR issues in the form of stakeholders dialogues.

* Organization names and job titles of internal and external attendees are as of holding date.

Date & Time: 3:00 to 5:30 p.m., Wednesday, March 1, 2006
Place: Head office of Asahi Glass (in Tokyo)

Details:
1. Introduction of the AGC Group's basic environmental policies, characteristics of its environmental activities, and specific examples of such activities
2. Discussion
3. Comments from participants and recapitulation

Guest participants:

Ms. Yurika Ayukawa

Climate Change Policy Senior Officer, WWF Japan

Professor Yoshinao Kozuma

Faculty of Economics, Sophia University

Mr. Kiyotaka Nakanishi

Senior Editorial Staff, Nikkei Ecology, Nikkei Business Publications, Inc and Senior Manager, EcoManagement Forum

Mr. Ken Morishita

Representative, Eco-Management Institute Co., Ltd.

   

These participants' comments are based on Asahi Glass CSR Report 2005, the AGC Group CSR Book, and a corporate brochure distributed to them prior to the meeting. They were not taken on our plant tour.

Participants from the AGC Group:

Akira Toyama, Director, Senior Executive Officer, and CTO
Naoki Arai (Flat Glass Company), Hiroyuki Ishikawa (Display Company), Kazuhiko Saito (Chemicals Company), and
Toshihiko Kato and Norihito Igarashi (Environment & Social Responsibility)

Points of the AGC Group’s Environmental Activities

1.

The Group consumes a vast amount of resources and energy, which is a distinguishing feature of a company operating in the materials industry.

2.

The Group manages its environmental activities based on its Integrated Environmental Management System.

3.

For the reduction in environmental impact and prevention of pollution, the Group takes measures to reduce the emission of greenhouse gases, conduct zero-emission activities, and properly control the use of chemical substances.

4.

For substances with environmental impacts, the Group emits a larger amount of SOx, NOx, and dust into the air compared with the amount it emits into water or with emission from the use of energy. In particular, it emits a large amount of NOx because this substance is contained in the materials used for manufacturing glass, and because the deployment of technologies to remove NOx from gas emissions associated with the glass melting process is delayed due to the nature of this capital intensive industry.

5.

As part of its positive environmental activities, the Group is examining measures to comply with the Kyoto Protocol, to utilize environmental accounting, to define the AGC Group's environment-conscious products, and to promote CSR based procurement.

In addition, the AGC Group's other environmental measures, including the use of glass containing no toxic substances for liquid-crystal displays and reduction in emissions of fluorocarbons and fluorine resin waste, were explained to the guest participants.

Discussion

Medium- and long-term targets should be set for the reduction of greenhouse gases (GHG)

Ms. Ayukawa

Ayukawa: In Asahi Glass CSR Report 2005, CO2 emissions were reported on a sales basis. In this reporting approach, even if the AGC Group reduces its CO2 emissions, the unit emission will increase if the sales decline. In preventive measures against global warming, it is important to identify the total emission of CO2, and I hope that the AGC Group will also show its total CO2 emission instead of its unit CO2 emission. Also, medium- and long-term reduction targets should be set for GHGs as a whole (CO2, methane, N2O, HFC, SF6, and PFC), not only for CO2.

Kato: Because we are operating various businesses, we set out our CO2 emission reduction targets for the entire group on a sales basis. Each business department sets its emission standards in view of its business characteristics and shows specific emission targets in their annual plans. The CO2 emissions of the entire group are shown on a sales basis for convenience reasons.

Saito: For example, the Chemicals Company has a CO2 emission target on a production basis. For GHGs other than CO2, Asahi Glass generates fluorocarbons, HFC and SF6. For these gases, we are reviewing the manufacturing process to reduce their emissions into air and to prevent them from leaking, and we disclose information on the emission reductions in our CSR report and through other media.

Kozuma: As shown in Asahi Glass CSR Report 2005, the Asahi Glass achieved a 94% reduction from 1995 in the emission of fluorocarbons. This fact should be more highlighted.

Ayukawa: What effects were brought about by the introduction of the new technology called “total oxygen combustion system”?

Professor Kozuma

Arai: At present, we are using fuel oil to melt glass materials at high temperature. In this process, approximately 4/5 of the oil is actually heating the nitrogen in air. The total oxygen combustion system supplies only oxygen, instead of air containing much nitrogen that is not necessary for combustion, into a glass melting furnace. This reduces the use of energy by the amount used in heating nitrogen. Also, the combustion gas contains almost no nitrogen, which leads to a considerable reduction in the emission of NOx. The total oxygen combustion system, however, requires energy to produce oxygen, and we must develop technologies to cover the increased cost.

A CSR report should be utilized as a communication tool.

Nakanishi: A CSR report should first of all be read by employees and should be an interactive communication tool between the management and readers of the report, including employees. The feedback is essential.

Kato:We published AGC Group CSR Book for employees in 2005. This book summarizes the commitment to CSR by the management and what the top managers expect from employees. Also, in making Asahi Glass CSR Report 2006, we regarded our employees as one of the major reader groups.

Mr. Nakanishi

Kozuma: It is necessary for a company to have policies and systems to seek opinions from its stakeholders and give feedback on the collected opinions to employees. Recent CSR reports are evaluated by society based not only on the information that it communicates, but also on the information collection and preparation approaches. Proper policies and systems are required as preconditions for interactive communications.

The AGC Group should communicate messages more widely and actively

Nakanishi: The non-alkali glass, which you have introduced to us and which has been manufactured for more than 10 years, contains no toxic substances. Unfortunately, end users are not aware of this fact. The AGC Group should promote PR activities to make people more aware of its manufacturing of double-glazed glass, which is more energy-saving than single-glazed glass, and of its contribution to the prevention of global warming, crimes, and disasters through its Glass Power campaign. The principal objective of PR activities is sales promotion, but these activities also serve to bring important issues to the attention of society and consumers. Our effort to help consumers choose products based on their environmental and social significance will eventually contribute to society.

Ishikawa: The AGC Group is engaged in B to B business as a materials manufacturer, and it may be difficult for the Group to communicate directly with end users. We still need to improve our PR activities aimed at our customers.

Toyama: Our outside directors strongly point out the importance of utilizing our group's technological advantages strategically in business.

Kozuma: Why don't you make an advertisement to the public? More consumers will use your products if they understand that they are environmentally friendly.

Mr. Morishita

Morishita: The AGC Group can highlight their achievements in reducing environmental impacts of their products in relation to their entire business activities, not just treating them as individual topics. Also, the Group may need to have a long-term view. For example, they should plan how to treat end-of-life glass after 30 years from now. The Group has a lot of excellent environmental measures, but has not been able to fully utilize them, I think.

We will improve our CSR activities based on the comments and ideas from the guest participants.

Mr. Toyama

Toyama: Thank you for giving your comments and ideas today, including the proposals on the establishment of medium- and long-term objectives, on the development of systems to incorporate the opinions of stakeholders into our environmental and CSR activities, and on the dispatch of corporate information to the public in an easy-to-understand manner as an important corporate activity. We will improve our environmental and CSR activities by building on your comments and proposals.

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