Denso 2007 CSR Report

Aiming to be a trustworthy company in harmony with society
DENSO CSR REPORT
2 0 07
Aiming to be a trustworthy company in harmony with society
Beginning with our 1999 “Environmental Report,” DENSO has published yearly report in Japanese and
English, to further the interactive communication with the maximum number of its stakeholders, for the
purpose of building a sustainable society.
This 2007 report is the second edition of what is now entitled the “CSR Report.” In this report, the idea of
corporate social responsibility (CSR) is positioned at the core of its management and the results of global
group efforts are introduced.
Environment, one of the three DENSO-unique priority areas, is highlighted here in the feature part titled
“DENSO CSR Challenge.”
In order to reduce the number of pages of the report, DENSO has placed a portion of detailed data on its
website. Please access the website to view them, as well as other related information.
URL More detailed data http://www.denso.co.jp/en/csr/report/2007/index.html
Period and scope of this report About the cover

Period covered: The cover is an expression of the desire of the entire DENSO group to
Fiscal year 2006 (from April 2006 to March 2007) bring consideration and fulfillment to the people of the world through
Some of data describe the activities in fiscal year 2007, in order to the creation of an “advanced automotive society.” That is, a world free
help understand the contents of this report. of traffic accidents and congestion in harmony with the environment.
Companies and business locations covered:
DENSO and its consolidated group companies
Scope of this report:
As a general rule, DENSO and its all consolidated group companies Website symbol
For some items, the scope is stated separately. Related and more detailed information is available at the
URL
guided website.
Guidelines used in the preparation of this report
•GRI (Global Reporting Initiative)
“Sustainability Reporting Guidelines (G2)”
•Japanese Ministry of the Environment
“Environmental Reporting Guidelines 2003”
•Japanese Ministry of the Environment
“Environmental Accounting Guidelines 2005”
Issued by: Koichi Fukaya, President and CEO
Comparative tables for this report and the GRI Guidelines, outline of Editor: Sadahiro Usui, Managing Officer
business, details of financial information, and others are available on Issue date: December 2007
our website:
The scheduled issue of the next report: November 2008
URL http://www.globaldenso.com/
1 DENSO CSR REPORT 2007

Content s
President’s Message 03
DENSO Corporate Information 05
CSR of DENSO 07
Feature: DENSO CSR Challenge 11
Management
Corporate Governance and Compliance 19
Risk Management and Information Security 21
Report on Social Responsibility 23
For Our Customers 25
With Our Associates 28
With Our Shareholders and Investors 34
With Our Suppliers 35
With the Global and Local Communities 37
Communications for CSR 41
Environmental Report 43
Environmental Management (Eco management) 45
Development and Designing (Eco products) 53
Production and Logistics (Eco factory) 59
Coordination with Society (Eco friendly) 65
Opinions from Stakeholders and Responses of DENSO 67
A Third-party Comment 68
DENSO CSR REPORT 2007 2

President’s Message
Contributing to an
“advanced automotive society” as
a “truly global corporation”
trusted and supported by society
Aiming to become a good partner in

building a sustainable society
In 1949, when DENSO was spun off from an
automobile manufacturer’s component division, we had
only a handful of clients. Today, we have grown into a
global corporation that supplies key components and
systems to the world’s top automakers and employs
more than 110,000 people in 32 countries around the
globe.
We appreciate that our customers and our stakeholders

have supported us in the midst of a constantly
changing era with their understanding of our sincere
efforts to contribute to both the automotive industry
and local communities, under our corporate philosophy
of “contributing to a better world by creating value
together with a vision for the future.”
In recent years, together with the efforts to build a

Koichi Fukaya
President and CEO, DENSO Corporation sustainable society, the expectations for corporations
have increased and the stakeholders have diversified.
Also, there is a demand for corporations to comply with
legal and ethical standards and to contribute to local
DENSO Philosophy communities. Thus, we are required to use a
Mission management style that explores ways towards solving
Contributing to a better world by creating value a wide variety of social and environmental issues in
together with a vision for the future partnership with our many stakeholders. In other
words, a corporation earns its reputation as a social
Management Principles
1. Customer satisfaction through high-quality products member welcomed by people in the process of
and services achieving social responsibilities, while increasing
2. Global growth through anticipation of change economic value.
3. Environmental preservation and harmony with society
4. Corporate vitality and respect for individuality In 2006, DENSO took its first step towards becoming a
Individual Spirit corporation that is trusted and supported by society.
1. To be creative in thought and steady in action Now, I would like to introduce three propositions based
2. To be cooperative and pioneering on the activities detailed in this report.
3. To be trustworthy by improving ourselves

Driving the DENSO Spirit to promote sophisticated technologies of control and
CSR management manufacturing. In the area of safety, DENSO’s unique
In April 2006, we formulated the “DENSO Group sensors and electronic control technologies helped
Declaration of Corporate Behavior” as a new policy. bore a new safety system for detecting pedestrians.
We have shared this as a proposition to practice the Furthermore, in order to make group-wide efforts
corporate social responsibilities (CSR) throughout our against global warming, the DENSO group
group companies. This Declaration is our promise to strengthened energy-saving activities at the
proactively contribute to a sustainable society through manufacturing sites across the world. On top of that, in
all of our business activities and promote our March 2007, an energy reduction technology stemming
management, setting CSR as the core of our action. from our manufacturing part was approved by the
Also, the Declaration raises the awareness of the Japanese government as a “Clean Development
relationships among different stakeholders, including Mechanism*” in Malaysia, whereby we plan to
customers, stockholders, suppliers, local communities, contribute to the prevention of global warming. These
and our associates, thereby mapping out what DENSO results are described in the “DENSO CSR Challenge”
can, and should, do for each stakeholder. and “Environmental Reporting” sections of this report.
* A system enacted as a part of the Kyoto Protocol for furthering the prevention of
global warming. Under the system, an industrialized country supports a developing
Our individual associates are the central players in country in reducing CO2 emissions, and then the reduced amount can be added to
practicing CSR. In other words, the awareness and that of the industrialized country.
behavior of our more than 110,000 associates working

in the countries and communities around the globe are
especially important. As such, I have personally Evolving into a truly global corporation
assumed the chair of the CSR Promotion Committee, The third proposition is the evolution into a truly global
which was established anew to properly diffuse and corporation by establishing community-rooted
embed CSR within the Company. I am proceeding business bases, thereby becoming responsive to the
respective activities, incorporating a cycle of “Plan expectations and the trust of customers worldwide. In
(proposal, procedure) – Do (implementation) – Check order to realize this, our basic policies and sense of
(assessment, examination) – Action (review, value must be shared throughout the group, above all.
improvement) into their management. Then, our entities in each location must autonomously
promote their management in accordance with local
Fortunately, the DENSO Spirit (Foresight, Credibility, market needs, restrictions, and cultures. Thus, our
Collaboration), a handed down faith and values since uniqueness must be exercised in our all business
the foundation of the Company, has deeply diffused activities encompassing manufacturing, employment,
into our corporate culture. This spirit will drive a human resource development, environmental
continuous improvement of our efforts for CSR. conservation, and corporate citizenship.
Contributing to build an advanced We believe that “hitozukuri” (human resource

automotive society development) is the driving source of the evolution.
Participating in the creation of a sustainable society The hitozukuri, which is based on a long-term
through “monozukuri” (manufacturing) is a vast employment and is designed to draw out the maximum
proposition for DENSO, an automotive component potential from our associates of each personality, is one
maker. However, this proposition is a roadmap for of DENSO’s strengths and assets. There is an urgent
presenting our significance through creative need to furnish the background to develop future local
technologies. We have set “DENSO Vision 2015” as a leaders in our foreign sites. In fiscal 2006, we poured
guideline to realize this proposition and we are our efforts into building a base for this background.
spreading out the activities of development and From now on, we intend to strengthen more and
manufacturing that “contribute to building an advanced improve hitozukuri.
automotive society.” In this society, cars are in
harmony with people, as well as the environment, Recently, we at DENSO have been recognized by a
without having a negative impact on them and people variety of organizations for our steadily continuous
can truly feel content. environmental activities and social efforts. Inspired by
this recognition, we plan to deepen communications
Among other things, we especially emphasize with more people and explore new ways for
“environment” and “safety.” In fiscal 2006, we coordination and cooperation. This report and our
contributed to fuel efficiency and purification of exhaust website are important means to initiate these plans.
gas from gasoline, hybrid, and diesel vehicles, with our After you have read this report, please feel free to share
automotive components and systems resulting from your candid thoughts and opinions with us.

DENSO Corporate Information
(Current as of March 31, 2007)
Corporate Overview Economic Reporting

Company name DENSO CORPORATION Capital stock 187.4 billion yen
Address of headquarters 1-1 Showa-cho, Employees Consolidated 112,262
Kariya, Aichi 448-8661 Japan Consolidated subsidiaries 188 Companies
Established December 16, 1949 Affiliates under equity method 32 Companies (Japan 14, The Americas 6,
Representative Koichi Fukaya, President and CEO Europe 2, Asia and Oceania 8, Other areas 2)
Net sales 3,609.7 billion yen (Consolidated, +13.2% y/y)
Ordinary income 322.1 billion yen (Consolidated, +13.8% y/y)
Capital expenditures 312.5 billion yen (+8.2% y/y)
Research and development expenditures 279.9 billion yen (+9% y/y)
Cost of sales 2,990.4 billion yen (+14% y/y)
Corporate tax paid 124.3 billion yen
Internal reserves* 171.4 billion yen
Overseas sales ratio 48.5%
* Net income for the current year, excluding dividends

For more detailed financial information, please visit our website.
URL http://www.denso.co.jp/ja/investors/
Main Products * The Electronic VCT Business including small motors was merged into the Electric Systems
Automotive Parts Business Group in January 2007, following the revision of the Business Groups system.
Thermal Systems Powertrain Control Systems

[Air conditioning] [Cooling systems and components] [Engine control components] [System control components] [Fuel injection]
Air conditioning systems Radiators Monolithic substrate Spark plugs EGR valves Common rail systems
Electronic Systems Electric Systems

[Electronics products] [Electronics devices] [Relays]
[Engine electrical systems] [EPS]
Engine electric control units Monolithic ICs Sensors
Alternators Electric power steering Electric power steering

electric control units motors
Information and Safety Systems
[Body electronics components] [ITS (Intelligent Transportation System)] [Driving assist and safety] [EHV] [Motors]
Instrument clusters Car navigation systems ETC on-board equipment Millimeter-wave radars DC-DC converters Windshield wiper systems
Non-Automotive Products
Industrial Systems Consumer-Products
[Automatic ID data capture devices] [Factory automation products] [Cooling and air conditioning systems] (Thermal Systems)
Kerosene
Barcode handy scanners Industrial robots heat pumps CO2 heat pump hot water supply system

•Sales / Operating income shift •Capital expenditures / depreciation shift •Research and development expenditures
100 million yen 100 million yen 100 million yen (%)
40,000 4,000 10
36,097 3,125 8.4 8.5
3,000 2,887 8.1 8.0 7.8
31,883 8
27,999 2,353 3,000
25,624 2,199 2,382 2,563 2,799
23,328 1,965 1,851 2,149 6
2,000 1,711 1,885
20,000 1,467 1,512 1,610 2,000
4
1,000 1,000 2
1,599 1,887 2,139 2,666 3,031
0 0 0 0
'02 '03 '04 '05 '06 (FY) '02 '03 '04 '05 '06 (FY) '02 '03 '04 '05 '06 (FY)
Sales Operating income Capital expenditures Depreciation Research and development Percentage on
expenditures net sales
•Employees •Return on equity (ROE) •Sales by Business segment

10 thousand (%) 1.8%
1.3% Thermal systems
9.9 1.5% Powertrain control systems
11.23 10 9.4 6.9%
10.42 10.57 8.4 31.5% Information and
10 9.55 7.9 7.6 safety systems
8.94 8.6%
Electric systems
Electronic systems
5
5 9.2% FY2006 Small motors
Other automotive
Industrial systems/
0 0 16.2% consumer products
'02 '03 '04 '05 '06 (FY) '02 '03 '04 '05 '06 (FY) 23.0% Other non-automotive
Business Development by Region (Employment / Scale of operation)

* Number of companies: Sum of consolidated subsidiaries and affiliates under equity method
The Americas
Number of companies: 44
Europe Employees: 17,058
Number of companies: 35 Sales: 768.5billion yen
Employees: 14,687 Percentage of sales: 21.3%
Sales: 507.5 billion yen
Percentage of sales: 14.1%
Japan
Employees: 56,589
Sales: 1,859.0 billion yen
Asia, Oceania, and others

Employees: 23,928
Sales: 474.7 billion yen
Manufacturing companies Others

CSR OF DENSO
Summary of fiscal 2006
Social Responsibility
of DENSO
In order to grow continuously while achieving our mission, the “corporate behavior that earns
the trust and support of society” is indispensable.
As such, DENSO aims the management for CSR that emphasizes the relationships with our stakeholders.
The Company will contribute to a sustainable society, as every associate exercises the DENSO Spirit.
Aiming to be a trustworthy company in Driven by the DENSO spirit

harmony with society
In corporate philosophy, DENSO presents our mission “DENSO spirit” has been a driving source to exercise
of “contributing to a better world by creating value the activities of CSR. Our three principles of
together with a vision for the future.” In order to realize “Foresight, Credibility, and Collaboration,” which guide
this, we formulated a long-term management vision our corporate culture, are fundamental values or faith
named “DENSO Vision 2015” in 2004. cultivated ever since our foundation in 1949.
The coordination and cooperation by sharing a sense
of value with our many stakeholders are indispensable DENSO believes that, as the Company exercises the
to accomplish this vision. The “Corporate behavior that “Collaboration” with the communication and teamwork
earns trust and support of society” is the base of the among associates, the highest performance is
accomplishment. achieved. As such, the activities of CSR will take a root
In order that every one of more than 110,000 in all of our group companies and the activities will
associates worldwide practices this behavior, we mature to the socially responsible behavior on an
announced the “DENSO Group Declaration of individual level.
Corporate Behavior” in April 2006 to declare our aim of
the management for CSR (Corporate Social
Responsibility).
•CSR framework
DENSO Group Declaration of Corporate Behavior

Policy
Contents of
Key areas to emphasize as priority
•Environmental conservation •Corporate citizenship •Respecting associates*
activities
Areas to promote as basis
Economic aspects Environmental and •Compliance •Customer relations •Free, fair and transparent transactions
(business results) social aspects •Information disclosure, IR •Occupational safety •Mental health
Promotion structure CSR Promotion Committee, CSR Promotion Center, Installed CSR Leaders
*Including respect for human rights

DENSO’s relationships with stakeholders
We rest on our four pillars of “quality, technology, service,

and customer support,” which are founded on our
For our “customer first” mind. We will develop safe and high
customers quality products and services, whereby we will strive to
create a new value. Also, we will penetrate the
safeguard of the personal information of our customers.
In order that each of our more than 110,000 associates

in 32 countries (as of the end of March 2007) can work
With our vigorously, we will respect human rights and we will offer
associates a fair working conditions free of discrimination and
We will actively contribute equitable opportunities for individual growth. Also, we
will establish the values of “mutual trust and mutual
towards the development responsibility” with associates through sincere dialog
and discussion to promote the building of a safe and
of a sustainable society comfortable working environment.
•We will comply with the law and promote ethical behavior.
•We will honor the culture and history of each country DENSO has around 69,000 shareholders (as of the
and strive to operate with respect for people. end of March 2007). While aiming to increase our
•We will strive for an open and fair information

With our corporate value through a stable and long-term growth,
shareholders we practice a proper profit return to our shareholders.
disclosure and dialog. Also, we disclose business and financial data in a
•We will anticipate changes and challenge in order to speedy manner through robust investor relations
create new values. activities and our website, for example, to increase the
transparency of our management.
•We will work to ensure the best quality by focusing
upon on-site verification and implementing “Kaizen”
(continuous improvement).
•We will work to encourage communication We have roughly 1,400 first-tier suppliers (as of the end
and teamwork. of March 2007). Based on our “Open Door Policy,” our
With our doors of business opportunity are open worldwide, as
suppliers we penetrate fairness in all business transactions
follwing our disclosed procurement policies, as well as
our impartial and fair evaluation system. We respect our
suppliers as equal business partners and aim for mutual
progress and growth.
We are working on the activities of environmental

With conservation throughout our corporate behavior, aiming
the global to be a corporation that operates in harmony with
and local society, thereby proving the trust of global society and
local communities. Also, as local members of local
communities
communities, our associates spread out proactive
contributions to the countries or communities in which
they work, confronting a variety of social issues.

CSR OF DENSO
Major activities for fiscal 2006 understand the idea of CSR and its contents of activities
DENSO has established the “CSR Promotion for CSR at DENSO. There is a series of substantial
Committee,” chaired by the President and CEO, as the CSR-related themes. In the forums, associates are
highest decision-making authority with regard to the lectured by experts and by those who at the companies
activities of CSR. Attended by DENSO’s entire board which precede DENSO in CSR. Associates also discuss
of directors, the committee is in charge of orienting the subsequently. The aim is that associates will reflect their
whole group, overseeing the state of progress, and raised awareness of problems and their proposals to
spreading out CSR. In fiscal 2006, the committee specific measures. A total of five CSR Forums were held
implemented the following measures, focusing on the in fiscal 2006, attended by roughly 1,800 DENSO group
issues on the understanding and embedment of the associates. (see p. 42)
idea of CSR in every associate.
(4) Publishing CSR report for associates
(1) Distributing “Code of Conduct for DENSO Group In March 2007, DENSO published a report entitled “Our
Associates” Activities of CSR” to introduce specific activities of
What is emphasized to spread out the activities of CSR CSR which are undertaken by associates themselves or
is a proactive manner for aiming a corporation at their workplaces. This report gives associates the
operating in trust and in harmony with society. It must thought of CSR and the means of specific behavior. In
not be considered a reactive duty. Also, DENSO the future, the Company plans to use this report at
emphatically builds a climate in which all associates internal seminars or external meetings, to further the
fully understand the significance of CSR and practice it understanding on the activities of CSR at DENSO.
as a matter of course in their daily activities.
In order to achieve this goal, the Company has
formulated the “Code of Conduct for DENSO Group
Associates” and from April 2006 the Company has
started distributing it to all associates in the group. It
clarifies the fundamental idea and ethical behavior for
the each of its stakeholders, in keeping with the ideals
of the “Declaration of Corporate Behavior.”
Our Activities of CSR
External recognition for environmental

and social activities of DENSO
DENSO’s efforts on environmental and social issues are
recognized by many external organizations every year.
In fiscal 2006, the Company was ranked sixth among
Code of Conduct for DENSO Group Associates
the “The Global 100 Greenest Companies” reported by
the Newsweek magazine. In addition, the Company
(2) Appointing and Installing CSR leaders received the following recognitions and ratings.
A promoter at each workplace is necessary to embed
specific activities of CSR in the course of daily work, •Major environmental and social recognitions by external institutions
while sharing the idea described in the “DENSO Group Titles Conducted by DENSO ranking
Declaration of Corporate Behavior” and the “Code of The Global 100 Greenest Companies 6th of 100
Newsweek
Conduct for DENSO Associates.” As such, in June 2006, Global 500 84th of 500
CSR leaders were appointed and installed to every Yomiuri Weekly Best 100 The Yomiuri Shimbun 3rd of 100
Corporations
department in DENSO Japan and every DENSO group Environmental Management Ranking 5th of 1,741 (manufacturing sector)
company. They have started their activities of CSR, Environmental Image Ranking Nikkei Inc. 27th of 4,110 (overall)
setting action items and goals tailored to the Overseas Environmental Ranking 12th of 1,741 (manufacturing sector)
characteristics of their workplace or business. Dow Jones Sustainability Dow Jones & Company (the U.S.A.), Included in index for 7years in a row
Index (DJSI) SAM Group Holding AG (Switzerland) (one of global 318 companies)
Forum Ethibel (Belgium) Included in index for 3 years in a row
(3) Holding CSR Forums ETHIBEL Sustainability Index (ESI)
(one of global 296 companies)
The CSR Forums have been held since April 2006 as Morningstar Social Responsibility Center for Public Resources Development, Included in index for the 4 years in a row
the occasions of internal communication which allow to Investment Index (MS-SRI) Morningstar Japan K.K. (Japan) (one of Japanese 150 companies)

Results from the activities in nine areas of CSR for fiscal 2006 and the plans for fiscal 2007
Here DENSO sorts its CSR into nine areas and, as such, the Company reports the results for fiscal 2006 and the plans
for fiscal 2007, centering key action items.
Major Results for fiscal 2006

Areas Key action items (by 2010) Page Major plans for fiscal 2007
Goals Results
In order to grow in Reduction of CO2 emissions at all Emissions basic unit: 73 •Accomplish targets in the
harmony with the group manufacturing sites compared with that of 48 DENSO ECOVISION
Environ- environment, promote Emissions basic unit: Less than 2000 scored 100 2015
global warming 59
mental 80, compared with that of 2000 •In particular, promote an
prevention, the primary scored 100 all-out effort to save
conserva-
issue that automotive energy globally to help
tion industry faces [DENSO Japan] Emissions: 120 61
reduce CO2 emissions
Less than 117, compared compared with that of
with that of 1990 scored 100 1990 scored 100
In order to co-exist with 75 percent for group company •Strengthen respective

society, practice participation in the corporate Participation: 66 percent activities emphasizing a
Corporate corporate citizenship in citizenship furtherance campaign 37 group coordination
citizenship every community in •Promote continuous
which DENSO conducts 10 percent for associate
participation in a furtherance Associate participation: 40 activities to increase
business participation rate of
system for volunteer 14 percent
activities [DENSO Japan] associates
In order for diverse [DENSO Japan] •Introduced a system for Promote edifying activities
human resources to •Expansion of system to widen the maternity leave and shorter to promote diversity
work vigorously, occasions for the success of working hour; start
promote respective women in the workplace preparing the establishment 28
activities •Introduction of measures to of infant daycare centers
Respecting
associates support senior associates •Enhanced a system for
rehiring seniors 32
•Promotion of employment for
the physically challenged •Installed at group company
in Japan the person
responsible for hiring the
physically challenged
Comply with legislation, Embedment of a climate of •Spread out “Code of 19 Penetrate more
as well as its ideal, and compliance Conduct for DENSO Group compliance and eradicate
Compliance practice ethical behavior Associates” wrongdoing
•Installed compliance leaders 20
Expand the function of Establishment of a customer Established customer 25 Strengthen the function of
Customer the customer service service desk for prompt response service desk in the General the customer service desk
relations desk to be trusted and to inquiries Administration Dept. (May (increase the response
satisfied by customers 2007) 26 level of receptionists )
•Practice free, fair, and •Introduction of an evaluation •Introduced a supplier •Enhance the introduction
transparent business system for suppliers at group evaluation system to group of the supplier evaluation
Free, fair, transactions manufacturing companies in manufacturing companies system
and •Practice “CSR Japan in Japan 35 •Revise basic business
transparent Procurement,” •Recommendation on the •Distributed “DENSO Group contracts with first-tier
transactions encompassing supply promotion of the activities of Declaration of Corporate suppliers
chain CSR for suppliers Behavior” to 1,400 first-tier 36 •Implement a self
suppliers and shared diagnosis at suppliers
respective efforts with them
Practice transparent as •Building of a procedure for •Published a CSR report 41 •Enhance the contents of
Information well as honest information disclosure •Held the Stakeholder Dialog CSR report and website
disclosure information disclosure •Enhancement of the opportuni- in Japan and in Thailand 42 •Enhance the opportunity of
and dialog ties of dialog with stakeholders dialog with stakeholders
66
Maintain and enhance a Zero serious accidents within the Zero serious accidents Promote continuous
Occupa- safe and comfortable whole group companies 32 activities to penetrate the
tional safety work environment awareness of safety
Build procedure for Building of foundation for every Enhanced procedures such Promote the activities to
Mental associates to work associate to work healthily in as resumption support raise the awareness of
healthily in mind and mind and body system, hot line for 33 every associate about
health
body counseling health

DENSO
CSR Challenge
DENSO’s challenge of addressing global warming
DENSO’s vision for the future is the realization of a “society where automobiles are loved.”
However, our planet is faced with the urgent issue of climate change, otherwise known as global warming.
Neither “creation of an advanced automobile society” nor the activities of a sustainable company can be
realized without solving this issue for humanity as a whole.
In this feature, the Company will introduce its challenges of addressing global warming (reducing CO2
emissions) by such area as: “Eco Products,” “Eco Factories,” and “Eco Friendly.”
All these are being practiced founding on “Foresight,” “Credibility,” and “Collaboration”, the three pillars
of “DENSO Spirit” which DENSO has fostered over the years as a sense of value and belief.
A company that is trusted and supported by society
Mission
Contributing to a better world
by creating value
together with a vision for the future
Environmental conservation activities by DENSO
Foresight Credibility Collaboration

Providing surprises and Providing quality and Achieving the highest
impressions in a way reliability beyond results by working
that only DENSO can do. customer expectations. as a team.
DENSO Spirit

DENSO
CSR Challenge
Foresight ECO PRODUCTS
Inform of routes with the least environmental impact using
01P13
car navigation systems
PRONAVI
Foreseeing the near future, DENSO challenges CO2 emission by means
of “monozukuri” (manufacturing) with forefront technologies.
Popularizing and permeating PRONAVI is another example of the
surprising and impressive development for which DENSO is known.
DENSO
CSR Challenge
Credibility ECO FACTORY
Reduce energy loss with the efforts of all associates in
02P15
manufacturing
Perfect Energy Factory (PEF)

DENSO challenges CO2 emission at monozukuri locale in every plant to
minimize them. The Company is spreading out the PEF concept
worldwide to meet society’s expectations and trust.
DENSO
CSR Challenge
Collaboration ECO FRIENDLY
Every associate willingly does environmental activities
03P17
The DENSO Eco-Point System: DECOPON
DENSO challenges CO2 emission to reduce it by what it can do on its
job or in daily life of its associates. DENSO aims to diffuse what it does
into all of its regional communities.
What is the DENSO CSR Challenge?

DENSO is making its eager efforts for “environmental conservation,”
“corporate citizenship,” and “respecting associates (hitozukuri),” the key
three areas in which the Company exercises its uniqueness. The Company
positions these efforts as “DENSO CSR Challenge.” Last year, DENSO
focused on “respecting associates.” This year, the Company spotlights
“environmental conservation,” with an emphasis on the theme of preventing
global warming (CO2 reduction).

DENSO
CSR Challenge 01
Foresight ECO PRODUCTS
PRONAVI
Inform of routes with the least environmental impact using car navigation systems
DENSO aims to challenge CO2 emission to reduce it by monozukuri deploying DENSO’s unique technologies. In this
thought, the Company created the navigation system of next-generation, “PRONAVI.” It accurately forecasts congestion
and the accompanying CO2 emissions to ease the burden on the environment and thus build a safe and comfortable
automotive society. DENSO has a specific proposal for the vision to draw: “a society where automobiles are loved.”
Addressing the social issue of Deploying probe information: started a

congestion: evolving car navigation cooperative project among industry,
systems to clear the way academia, and government
The “Internet ITS,” a model of automotive society for the The advantage of probe information is that it allows
future, is a system for inter-connecting automobiles on obtaining plentiful information from congested
the Internet to provide traffic information, pay tolls, and roadways. Since 2001, an experiment involving 1,570
more. Without solving the social issue of congestion, taxicabs equipped with probe information transmitters
which is directly caused by automobiles, the automotive (“Probe Taxis”) has been conducted in Nagoya City,
society would not have the future. The research and Aichi Prefecture, Japan. This experiment demonstrated
development for the navigation system of the validity of probe information. The information
next-generation “PRONAVI” sprang from the thought gathered in this experiment is still being deployed today.
that the progress in navigation systems could help In 2003, the“P-DRGS Consortium,” a cooperative
resolve the problem. project involving industry, academia, and the Japanese
Even if such information as traffic jams is going to be government, officially began with the aim of popularizing
obtained from sensors in roadways, it is impossible to the navigation system “PRONAVI,” which deploys the
obtain the information about every roadway, due to the probe information. It is a five-year project under the
limits on furnishing its infrastructure. Hence, there must support of Strategic Information and Communications
be the automobiles equipped with sensors that R&D Promotion Program by Japanese Ministry of
reciprocally transmit such data as speed and position Internal Affairs and Communications. DENSO is playing
based on their positions. In this way, the real time a major role in developing the PRONAVI technology.
information can be obtained from automobiles on
roadways. This information is called “probe information,”
because it probes the traffic in a society on the level of Faster, more comfortable, and more
individual automobile. environmentally-friendly: realizing an automobile
society that “considers” people and the Earth
Demonstrative prototypes were displayed at the ITS

World Conference held in October 2004 and the ITS
Voice of person in charge Expo held in July 2005 at the EXPO 2005 AICHI JAPAN.
As a driver for my personal pleasure, I dream a
Such great surprise and excitement of many participants
day when we help achieve “a society where were heard that “I’ve always wanted a car navigation
automobiles are loved” by driving a car and system like this” and that “Please popularize this as
thus supplying probe information. If DENSO
prompt as possible.”
rightly respond to both safety and
environmental demands, I believe that the day The system can predict CO2 emissions with high
we achieve the goal will not be very far off. accuracy based on the forecasted vehicle speed for
each area corresponding to traffic jam conditions. In
ITS Development Department
short, it not only helps solve congestion, but also allows
Takatoshi Matsushita drivers to select routes with lower impact on the
environment.
Another characteristic of “PRONAVI” is that it allows to
compare the CO2 emissions of given travels, not only by
automobiles, but also by a combination of a vehicle and
public transportation such as trains. In general, the CO2
emissions of trains is one-tenth of that of vehicles. But
destinations reachable by trains are limited. Which of the
routes is faster, more comfortable, and more considerate

[PRONAVI]
A navigation system of next generation which is
under development by the P-DRGS Consortium.
DENSO is leading the technological development
of this cooperative project. PRONAVI is a
forcastable navigation system that deploys
real-time probe information from automobiles on
the road, and offers route information, including
public transportation such as trains. It calculates
the predicted CO2 emissions for each route,
allowing drivers to avoid traffic jams and to select
the most environmentally-friendly route.
1 An image of automobile society which is to be realized by

PRONAVI
to the environment? PRONAVI gives individuals an overall 2 Demonstrative trial at the ITS World Congress
picture, allowing them to decide on their route to realize 3 An overhead view showing the area in which probe cars
are gathering information (shown in red)
an automobile society that “considers” people and the 4 Demonstrative trial at ITS Expo
Earth.
Towards the grand goal of reducing CO2:

DENSO’s mission to address
and solve issues
The year 2007 marks the end of the project, which

began in 2003. However, a number of issues must be
addressed before PRONAVI is popularized. The biggest
challenge is how to gather the probe information. One of
the means for addressing this challenge is to deploy
GPS-equipped buses and trucks to transmit the probe
information. In order to realize this, one of the coming
themes is to build cooperative relationships among bus
and trucking companies.
2
Currently, automakers are separatively undertaking the
development of navigation systems that deploy probe
information. How these separative efforts can be
gathered into a whole social trend? In order to achieve
the grand goal of reducing CO2, DENSO aims to
promptly popularize the system not only by competition
but also by cooperation. In this way, DENSO is
challenging automotive society to realize its maturity.
Expectations for DENSO

My expectations and recognition for DENSO as
an leading corporation in environmental awareness
The interest of the world is moving to the next stage after the target period of 3
the Kyoto Protocol (a post-Kyoto Protocol). PRONAVI will prove an
indispensable tool when the time comes to head specific goals of reduction
in CO2 emissions. I specialize in traffic planning and traffic engineering, and
thus I am involved in both P-DRGS and the permeation of a Eco-Money
(traffic ECOPON), which is intended to be an
incentive for using public transportation. I have
high expectations for DENSO as a corporation on
the front lines of environmental issues, with the
development of PRONAVI and the introduction of
its own Eco-Money, DECOPON.
Ph. D. Professor, Nagoya University

Graduate School of Environmental Studies
P-DRGS Consortium General Representative
Takayuki Morikawa
URL PRONAVI http://www.p-drgs.com/

4
DENSO
CSR Challenge 02
Credibility ECO FACTORY
Perfect Energy Factory (PEF)

Reducing energy loss to the lowest level with the participation of all factory associates
“Monozukuri” (manufacturing) with the lowest CO2 emissions is one of the crucial issues facing the building of a
sustainable society. In order to realize this, the efforts towards the “Perfect Energy Factory (PEF)” are promoting at
the DENSO factories in the world, in which the energy loss at all manufacturing stages is reduced to nearly zero,
while increasing production efficiency.
From a voluntary plan to ECO VISION scored; and finally, the score is used to raise awareness
2005: doing everything possible to of energy saving among associates. Specific items are of
save energy at factories in Japan course revised every year to improve evaluation criteria
and thus to continue the upward spiral of progress.
DENSO has worked on energy saving (reducing CO2 Additionally, to diffuse the awareness of full participation
emissions) at manufacturing sites. In 1993, DENSO set a among associates, the accomplishment of PEF was
voluntary target for the reduction of CO2 emissions basic added to the requirements for the in-house award of
unit and then the company started spreading out its “Energy Saving Excellence” for manufacturing sites. This
energy saving activities. In the “ECOVISION 2005,” has borne a good sense of competition among
formulated in 2000, the amount of CO2 to be reduced was associates, thereby leading them to actively think “how
incorporated into the corporate management indices. to improve my own site.” Also, among the factories,
The index presented a clear target of “reducing CO2 reciprocal communications and exchanges of opinion
emissions by 10% compared with that of 1990 by 2010,” have frequently been conducted to understand specific
whereby it has constituted main pillar of environmental improvements made at other sites.
management plan. This target cannot be achieved only
by the efforts of a specific department but by those of
entire associates who are literally in monozukuri and Beyond the frame of a corporation:
required to “work hard and save energy wherever possible.” unveiling energy saving technologies
society-wide, and worldwide
Making energy loss and results of In the PEF activities, the technology of “blower utilization,
improvements “visible” and instead of an air compressor” was developed by the Air
continuously spiraling upward Conditioning Manufacturing Department 3 in Toyohashi
Plant, Aichi Prefecture, Japan. In fiscal 2004, this was
“What everything possible is needed to do?” “How do honored with the “Excellent Energy Conservation,” a
we realize a total associate participation?” After much prize of the minister of Economy, Trade, and Industry in
trial and error, DENSO has reached to the method of Japan. This is a revolutionary technology to achieve
making energy saving activities “visible” by scoring. First, massive savings in energy consumption, in which a large
in this method, energy consumption at each site is compressor required to make compressed air is replaced
disclosed within the company; next, a theme for with a blower (low-pressure fan) and the piping is
improving energy saving is set company-wide; then, the modified. DENSO unveiled this technology at the Energy
progress of improvement by production process is Conservation Center and, thereafter, the Company has
accepted dozens of lectures and visits regarding this
technology. Furthermore, in 2005, this technology was
cited as an industrial standard in the amended Act
The voice of person in charge Concerning the Rational Use of Energy in Japan. Thus,
Manufacturing sites anywhere in Asia this technology makes remarkable contribution for
aspire the incorporation of advanced permeating energy saving into the whole industry.
environmental technologies. Here in
Malaysia, we are making efforts to
effectively reduce energy consumption
by proactively introducing, as well as Spreading out PEF activities to factories
practically tailoring, the energy saving worldwide: turning energy-saving technologies
technologies which have proved into Clean Development Mechanism
effective at the mother factory in Japan.
DNMY (Malaysia) Facilities Group In “ECOVISION 2015,” newly formulated in 2005, DENSO
Che Jamri hammered out a global policy for speeding the reduction
of CO2 emissions by spreading out the PEF activities

[The Perfect Energy Factory]
A keyword for energy-saving activities in
“ECOVISION 2005.” Through making energy
consumption “visible,” it allows at all levels, from
departments to factories, or from person in charge
to all associates, to proceed the building of Perfect
Energy Factory with exhaustive improvements.
Currently, following the announcement of
“ECOVISION 2015,” the scope is expanding to
include overseas manufacturing sites.
1 An education introduced in a technological seminar on energy

saving improvement with regard to compressed air used in
production facilities.
fostered in Japan to manufacturing sites worldwide. It 2 Efforts on making “visible,” a highly effective motive in promoting
energy saving
was an expression of a strong sense of urgency, that is, 3 The associates at Toyohashi plant, Japan, were honored with the
regardless of different situations by country or by award from the minister of the Economy, Trade, and Industry in Japan
for developing blower technology for compressed air
community, the social responsibility of DENSO will not be 4 An education at DNMY in Malaysia , which is spreading out CDM
achieved unless its more than 110,000 associates work
together to confront global warming.
In March 2007, PEF activities progressed anew.
Pursuant to the Kyoto Protocol, a plan for spreading out
the energy saving technology regarding compressed air
to the factory in Malaysia (DNMY) was approved as a
“Clean Development Mechanism (CDM) project”* by the
Japanese government. In the future, after the
authorization of regulatory bodies designated by the
Malaysian government and the UN, this project will
become the part of the international plan for reducing
CO2.
The energy-saving technology on which DENSO has
earnestly made efforts is now playing a role in preventing
global warming. It is a new step towards practicing the 2
DENSO philosophy of “contributing to a better world by
creating value together with a vision for the future.”
* A system in which an industrialized country supports a developing country in reducing
CO2 emissions, and then the reduced amount can be added to that of the
industrialized country.

My expectations for DENSO as a pioneer in making
energy issues “visible”
For many corporations which aim at the
promotion of energy saving, the barriers are 3
the difficulties in determining actual energy
usage and a lack of necessary knowledge.
DENSO, however, has steadily accomplished
the result. DENSO’s inimitable thoroughness in
measuring the levels of production and energy
consumption together in real-time is truly
impressive.
In addition, I deeply respect DENSO’s
unhesitating stance of unveiling its know-how
Energy Conservation Center,
through press releases and lectures here at the
Japan
Energy Conservation Center. I hope that the
examples of energy saving set by DENSO, a Hisakazu Tsujimoto
leader in making energy issues “visible,” will be
applied among various industries in the future.
URL The Perfect Energy Factory http://www.denso.co.jp/ja/csr/environment/factory/

4
DENSO
CSR Challenge 03
Collaboration ECO FRIENDLY
DENSO Eco-Point System: DECOPON

Every associate willingly does environmental activities
In December 2006, DENSO started operating an in-house Eco-Point system, DECOPON. Even if associates
notice the importance of environmental activities, it can be difficult to put the activities into actual practice.
Based on the concept of “for the environment = for our own fulfillment and delight,” the Company is
challenging this difficulty. The dream of DENSO is to expand an eco-friendly lifestyle from DENSO to
communities, as well as to the whole society.
Wonderful example of EXPO Eco-Money: business activities in harmony with the environment.
“Can we do the same system However, no matter how many technologies and
within DENSO, too?” products the Company creates with environmental
considerations, these efforts are not enough to solve the
The model for the DECOPON system was EXPO environmental problems. DENSO has more than
Eco-Money first introduced at EXPO 2005 AICHI JAPAN. 110,000 associates, and the total of their family
The merit of this system is its simplicity. It fulfills users members amounts to several folds of the number. Not
with “saving and using points,” thereby allowing only as the Company, but also as an individual part of
everyone to participate in voluntary eco-friendly action the Company, there are “something” to do in daily lives,
without strain. In the long run, although the power of one and at last the accumulated effect of these small things
individual activity is small, its accumulated effect will will be large enough.
make a definite contribution to the global environment. However, simply focusing on self-sacrifice and duty is
“Can we do the same system within DENSO, too?” “This not enough to expand eco-friendly activities. Some of
is the best way to expand environmental action among the strongest motives for people are “fulfillment” and
associaties.” These strong beliefs bore the DECOPON “delight.” Also, to do “a little at a time, without strain”
concept. Many “activists” in other industries, NPOs, and will continue for a long time. As an environmentally
the government raised their voices of cooperation to advanced corporation, DENSO will take over the
support this concept. DENSO associates who philosophy of the EXPO Eco-Money and the Company
volunteered at EXPO 2005 AICHI backed the creation of will back the “voluntary action” among its associates.
DECOPON as well. “I enjoyed the exchange with visitors.” For these sakes, DENSO began to challenge the
“I could let children happy.” Such voices of the operation of the DECOPON system.
volunteers upheld the DECOPON concept.
Be an Eco-Money of “fulfillment” and

A spirit of self-sacrifice is not enough “delight,” as well as of “DENSO-way”
for the long term: “A little at a time,
without strain” is the secret “How to harness the system to DENSO’s corporate
activities or its role in society?” This was the theme on
As “environmental conservation” is presented for one of which the Company has wanted to reach a
the key areas of CSR, DENSO has emphasized the corporate-wide consensus. The Company has repeatedly
challenged clarifying the meaning for the Company to
introduce such a point system and thus making
DECOPON “unique to DENSO.” In the process of taking
Voice of person in charge
action “for myself,” the participating associates
eventually make a contribution to local communities, as
My dream is the realization of a procedure in well as the Earth’s environment. Expanding such “menu”
which the people of the world can delightedly
participate in the eco-friendly action. In doing so, of choices was another theme of the DECOPON system.
we will recover the Earth environment, and will One of the “menu” items for preventing global warming is
create a world in which we can live “eco-commuting,” in which associates consider
comfortably and without conflict.
communities and the environment in the daily behavior of
General Administration Dept. “commuting,” thereby rivising the means of commuting.
Noritaka Kadoi This is not only invaluable for reducing congestion, and
thus reducing CO2, but also for achieving CSR of DENSO.
Also, as associates alternate the way to approach the
essential action of “eating” or “buying,” the Company
can change the structure of the whole society into that
has less impact on the environment. In order to be the

[DENSO Eco-Point System: DECOPON]
In this system, DENSO gives Eco-Points to
associates and their families for their eco-friendly
action (e.g., environmental household accounting,
environmental learning, eco-product purchasing,
clean-up activity, environmental volunteer,
eco-commuting). The points are compatible with
the EXPO Eco-Money, introduced in 2005 at EXPO
2005 AICHI JAPAN and can be used for
afforestation, donations to local environmental
NGOs, for example.
1 A poster publicizing the system of DECOPON and eco-friendly

action
means for such action, DENSO is meticulous about the 2 Exchanging Eco-Points at EXPO Eco-Money Center (Nagoya City,
Aichi, Japan)
“menu” of “eco-product purchasing,” in which the points 3 “DECOPON Seminar,” learning about the environment delightedly
are added corresponding to the purchase price. 4 Many associates participate in volunteering by means of DECOPON.
DECOPON’s goal: aiming for a time when

“the system is no longer needed”
There is the “thought” which DENSO has placed in the

DECOPON system. The Company wants its associates
to look at the “environment” in which they live and to
think of it in terms of the relevance to their “happiness.”
The Company wants even more associates to regard the
issues facing their societies as those facing their lives.
After the system had been introduced in December 2006,
around 2,000 associates have participated in the system.
The voluntary action is slowly but surely taking root
among workplaces, as hearing “this is my first time to
volunteer for environmental efforts” or “I want to propose 2
a new “menu” item.”
DECOPON is one of the means for DENSO’s associates
to expand environmental efforts to their families, and for
the families to expand the efforts to their local
communities. The goal of DECOPON is to reach a time
when “the system is no longer needed.” It is surely not a
fantasy to realize a society in which environmentally-
friendly action is normally taken without such procedure
as DECOPON.
It begins with a feeling of “delight”

I think that it’s difficult to expand environmentally- 3
friendly action simply by calling the words like

“Do something good for the environment.” The
DECOPON system is a tool for DENSO
associates to work excitedly, relate to
communities, and like DENSO. When I spoke to
DENSO associates, I was moved by the fact
that they think the system will be successful
when it will be expanded not only within the
company but also among other companies.
This exactly becomes a voluntary chain. Instead
of being forced to act “on behalf of someone,” NPO, Eco-Design
Civil Society Forum
individuals start doing from something that is Representative
delightful for them. Then, its end result will be a
positive influence on society and the
Yoshiyuki Hagiwara
environment. This is the kind of eco-friendly
action I hope to see.
URL DECOPON http://www.denso.co.jp/SOCIAL/decopon

4
Management
Corporate Governance and

Compliance
Corporate governance is the cornerstone of DENSO management structure capable of responding to a
to grow continuously, while practicing CSR. The changing management environment and to clarify
Company recognizes that compliance (adherence to management responsibilities during each fiscal year.
laws and ethics) is the foundation of corporate
governance, and therefore DENSO is striving to (3) Management oversight functions
enhance and strengthen it. Two standing auditors and three external auditors are
responsible for monitoring the execution of duties by
Corporate governance directors, as well as the business operations and financial
(1) Basic policy conditions of its subsidiaries worldwide. The external
Global marketplace is changing rapidly and, in this auditors comprise the executive from another company,
circumstance, DENSO must keep and increase the academics, and lawyers. They attend Board of Directors
long-term business performance. In order to achieve and Board of Corporate Auditors, offering advice and
this, the Company is making efforts to establish a exchanging opinions from a broad perspective. In
corporate governance, recognizing its importance to addition to the auditors, dedicated internal audit
strengthen group competitiveness. departments have been established in its major group
companies around the world.
(2) Promotion structure
DENSO has adopted the corporate auditor system and, (4) Furnishing internal controls
in addition to the statutory bodies such as General Corporate internal control systems have been
Meeting of Shareholders, Board of Directors, Board of strengthened following the new “Companies Act”
Corporate Auditors, and Accounting Auditors, the enforced in May 2006 in Japan. Also, in order to ensure
Company has furnished various internal control the credibility of financial reporting for fiscal 2008, the
procedures. At the same time, through ongoing Company is obliged to file an Internal Control Report
provision of the information about business conditions to pursuant to the Financial Instruments and Exchange Law
its shareholders and investors, the Company practices in Japan. To respond to these trends, DENSO is reviewing
sound, efficient, and transparent management. and reexamining its operational process and document
To expedite the decision-making process and operation, control structure to strengthen the internal control.
DENSO has appointed directors (13 in total) that are
responsible for each business division to connect Compliance
management and locale. In addition, the Company has (1) Basic policy
appointed managing officers (27 in total) dedicated to The “Code of Conduct for DENSO Group Associates,”
business execution in each responsible department. revised in April 2006, stipulates the compliance with
Furthermore, DENSO has set the term of office for its legislation and the respect for culture and custom of
directors to one year in order to build a nimble the countries or localities in which the Company does
business. Also, it stipulates the behavior of every
•DENSO’s Corporate Governance System associate subject to the highest ethical standards. The
General Meeting of Shareholders Code is shared with all group companies in Japan,
Appoint, Supervise while its spirit and principle are shared with the group
companies overseas.
Top Management Meeting
Top Management Meeting Board of (2) Promotion structure

Board of Directors
CSR Promotion Committee Corporate
Chairman,President,
Executive Vice President Risk Management Meeting Auditors As a part of the internal control system, in 1997 DENSO
established a “Business Ethics and Compliance
( )
Business Ethics and Majority of
Compliance Committee external
Audit
Export Controls Committee
corporate Committee” (Secretariat: Legal Department) chaired by a
auditors
Senior Managing Customer Satisfaction director of DENSO in the highest tier. From 2003, an
Directors Improvement Committee
internal whistle-blowing system called the “Business
( Business Division
Leaders ) Environment Committee
Internal Information Committee Ethics Hotline,” which is dealt with by external lawyers
Central Security Committee and Legal Dept., has been available. As of May 2006, the
Managing Social Contribution Committee Accounting
Officers Others Auditor Company has expanded the coverage of the system to
Accounting
Execution in
( Frontline include the 300 first-tier suppliers and the Company
Operation )
Audits
Internal Audit Department
Audit operates it pursuant to the Whistle-blower Protection Act

in Japan. conducted. Also, since fiscal 2004, the “Survey of
Management
In North America, DENSO has established in 1999 the Business Ethics” has been implemented with the aim of
“North American Compliance Committee” and then the comprehending the diffusional degree of respective
Compliance Officer has been responsible for penetrating measures and the potential risks. The results have been
the respective guides and operating a local hotline. reported to the Business Ethics and Compliance
Besides, in fiscal 2006, the Company started anew the Committee. In fiscal 2006, the scope of the survey was
Compliance Audit. expanded to include temporary associates. The results
Corporate governance and compliance

In Europe, the “EU Version of Code of Conduct for of the roughly 4,000 surveys returned confirm that there
DENSO Group Associates” was formulated in fiscal 2006. is a gap in awareness of compliance between superiors
From now on, DENSO will spread it out sequentially and subordinates, and that there is a misunderstanding
throughout the business sites in the EU, reflecting on the on the internal whistle-blowing system. Based on these
cultures and the legislation of respective countries. Also, feedbacks, in fiscal 2007 DENSO will promote focused
the Company is discussing the introduction of a hotline activities to raise awareness at the managerial level and
subject to the guidelines unique to Europe. to correct the understanding of internal whistle-blowing
In China, the Company began discussions regarding the system.
introduction of a compliance program in fiscal 2008.
In addition, once every year, the Company holds the
“Global Legal Conference” for leaders of legal affairs at •Results of activities in fiscal 2006
Consultative reports to internal whistle-blowing system 141 reports
headquarters in Japan and at the regional headquarters
Education by organizational class 2,674 participants
in the U.S.A., Europe, and China, allowing them to
Legal education for group companies in Japan 31 companies
share relevant information and issues.
Business Ethics Forum participants 400 (DENSO Japan and group
companies in Japan)
(3) Education and awareness-raising
To diffuse and embed the awareness of compliance, since •Entire procedure for the activities of business ethics
2002 DENSO has implemented seminars by
organizational class. In May 2006, the Company installed Business Ethics and Compliance Committee
Compliance Leaders (who are also CSR Leaders) at Education Punitive Field survey Check by audit Consultation
Information action (self-check, Survey (Thematic audit) desk, e.g.,
DENSO Japan and at each group company in Japan to release of Business Ethics) hotline
conduct education and awareness-raising by workplace. Company
In addition, Legal Dept. at DENSO Japan has strived to
raise awareness of associates by publishing the
Potential risk of
“Business Ethics Newsletter” (eight times yearly), by Superiors wrongdoing
enhancing the content of the Internet website for business <Workplace management>
ethics, and by conducting visiting legal educations. In •Communication
•Improve workplace climate
October 2006, “Business Ethics Forum” (see page 42)
Potential risk of
was held for chief executives and Compliance Leaders at Subordinates
wrongdoing
group companies in japan. Workplace
V O I C E
Thinking of mindset through

compliance lecture
While someone says “we are capable of
working without education,” many do not
understand the potential impact of
wrongdoing. We pay attention to the topics,
Guest speech at “Business Ethics Forum” Business Ethics Newsletter
materials, and the way of talking to instill the
contents of lecture into the participants,
(4) Check in activities of compliance keeping their interest. The embedment of
compliance is considered to be a proof of
Since 2003, every October has been set for “The Month
our individual growth, and so the lecture Akira Mase
of Corporate Ethics in DENSO Group,” during which a should be continued afterward. Compliance Leader
company-wide standardized self-check has been

Management
Risk Management and

Information Security
In keeping with the global spread of its business, (3) Diffusion and awareness-raising
DENSO is making efforts to strengthen risk The “Crisis Communication Manual” has been
management and information security as a part of its distributed to all directors, managers, and responsible
internal control system so that the Company reduces persons by risk item. In addition, all associates are
risks to the lowest possible degree. obligated to carry the “Risk Management Handbook”
that urges precise response when fires, traffic accidents,
Risk management or earthquakes occur. Furthermore, as a measure to
(1) Basic idea strengthen risk management, seminars are implemented
The matters with the potential to cause damage to for managers. The scope of the seminars was expanded
management are classified into “Risk” (situations in to include responsible
which risks have not been realized) and “Crisis” persons for risk
(emergency situations in which risks have already been management at group
realized). For the former case, DENSO pours its efforts companies and, in fiscal
into the prevention by picking up the shoots of risk. For 2006, 75 percent of
the latter case, the Company strives for a prompt and persons in the list
proper initial response and resumption. Among others, attended the seminars.
the key items are: “1) strengthening responsiveness A risk management seminar
during crises; 2) diffusing and raising awareness of risk

management; and 3) strengthening the group risk (4) Business continuity plan (BCP)
management.” Amid a recent multitude of large-scale disasters
occurred both inside and outside Japan, to be strong
(2) Promotion structure enough to withstand calamity is required. DENSO
The “Risk Management Meeting” is a cross-company continues formulating business continuity plan. The plan
organization in which the 58 risk items with the potential aims to ensure the safety of suffered associates, or their
to impact life, credit, property, or business activities have families, and achieve the responsibility of product supply
been selected. These items have been individually following a prompt response. Assuming the Tokai and
allocated to responsible departments. The departments the Tonankai Earthquakes, the Company has formulated
have been continuously reviewing and raising the level of the operational follow-through to resume business
measures for prevention and resumption. operations within a set target period and the
Likewise, Risk Managers have been appointed at group corresponding operational manual. As such, DENSO
companies whereby DENSO seeks to furnish a promotes building a model for the formulation of
promotion structure and share relevant information with continuity plan at product divisions. In addition,
group companies. Additionally, the Company conducts concerning the safety confirmation, which is the basis of
a self-check for each risk item following “Self Diagnosis business continuity, in 2005 the Company introduced
Sheet,” thereby raising the level of risk management. “Safety Confirmation System.” In Japan, the Company
•Risk management structure •Organization for countermeasure against crises

Board of Directors Task team
Business Groups Chief of the task team: Directors who oversee Fuctional Centers which include
Responsible Risk Responsible Departments (or if necessary, the Company President & CEO)
Risk Management Functional Dept.’s Group companies in Japan
Meeting (Regional headquarters)
Group companies Overseas Secretariat •Corporate Communications Dept.
•Risk Management Meeting secretariat •Corporate Planning Dept.
•Major risk items •Intellectual Property Dept.
•Risk responsible departments in •General Admin. Dept.
Environmental pollution, Labor accidents, Expansion of customer Functional Centers •Legal Dept.
Accidents and complaints, Employee issues, Disputes over personnel issues, •Contact desk within group companies •Secretarial Dept.
mistakes due to Confidential information leak, Product recalls, Bad debts, Traffic
internal factors accidents, Production impediments, Information system failures,
Violations of contract obligations, for example. Countermeasure team
Antitrust law violations, Foreign exchange Law violations, Tax Accounting General Human Emergency Rescue and Computers and Facilities
Violations of law evasion, Patent infringement, Crimes and scandals of directors Admin. Resources First Aid Communications
and employees, for example.
Production Logistics Procurement Quality Control Environment Sales and Service
Accidents or Cornering of DENSO’s stock, Derivative action, Product liability
incidents due to lawsuits, Contingencies, Stagnant transportation, Cyber
external factors terrorism, for example. Regional headquarters
Natural disasters The Americas Europe Asia/Oceania China
Volatility in financial market, Natural disasters, Encountered
Act of God incidents, Disaster at supplier, for example. Group companies overseas Group companies in Japan

has implemented a group drill of inputting into the awareness of security management in every associate.
Management
system. (about 40,000 associates have participated every time) As such, the Company has held seminars by
organizational class or those for new associates. In fiscal
2006, the Company also did the seminars for security
Information security control promoters at each department (139 in total) and
(1) Basic idea the section meetings for associates responsible for the
DENSO recognizes that technology, information, and management of personal computers. All these sought to
personal data of customers and associates are valuable penetrate the awareness of security control. Furthermore,
Risk Management and Information Security

assets. Under this recognition, in 2003 the Company the Company has conducted such countermeasures as
formulated “DENSO Group’s Basic Principles of encoded transmission on the Internet, restriction on
Information Security”, and the Company has been memory media usage, restrictive use of outgoing emails,
working on the strengthening of both data protection and and audit on the vulnerability of servers. In this way,
information management. Furthermore, beginning in DENSO examines the operative situation of system and
2005, the Company established the “DENSO Group continuously strive to strengthen the information security.
Information Security Standards,” which defines 142
management items referring to the globally popular (4)Diffusion and embedment within group
ISMS.* This has been applied to group companies, of In fiscal 2006, with the aim of ensuring diffusion and
which 56 in Japan and 75 abroad. embedment of the “DENSO Group Information Security
*Information Security Management System Standards,” DENSO held explanatory meetings, example
presentations, and sessions for reporting survey result to
(2) Promotion structure all listed group companies in Japan. All these were about
Under the Information Strategy Committee, in 2002 particularly important “102 Items Regarding Rules・
DENSO established Information Security Center and Operation and Furnishing” of the standards. With regard
Information Security Chief as special organizational units to to the 12 companies to which DENSO outsources
build a management structure based on international designing, the responsible persons of DENSO visited
information management system standards (such as these companies for themselves, investigated the current
ISO/IEC 27001). In addition to information security control, situation of countermeasures, and conducted advice and
audit, and company-wide self-check, the Company has corrective recommendations.
implemented a monitoring survey to comprehend the In addition, DENSO held a “Global IS Conference” in
actual situation of information security at each group November 2006 for group companies overseas to
company. In this way, DENSO continuously seeks to raise exchange opinions and share information with regard to
the company-wide level of security management. the spreading out of the standards. Then, for the regions
with a low level of information security, the Company
(3) Education, seminars and countermeasures for system conducted follow-up activities to emphatically promote
The foundation of information security rests on a high information security.
•Security control structure Seizing of secured information

Information Strategy Committee by an associate
Propose/ Report Direct / Oversee A DENSO engineer was arrested by Aichi Prefectural
Information Security Chief Police, Japan on March 16, 2007, on suspicion of having
Audit
Report Direct / Oversee
Dept. plundered a personal computer containing the data of
Information Security Center Audit component drawing sheets. On April 23, the Nagoya
General IT Planning Eng. Administration Legal Dept.
Administration Dept. Center Dept. Regional Public Prosecutors Office in Japan declined to
Intellectual
Property Dept.
Human
Resources Dept.
Corporate
Communications Dept.
prosecute the case in light of insufficient evidence.
Coordination
However, following the internal code, the Company
Supervisory directors imposed a punitive dismissal to the associate.
Report Direct / Oversee DENSO shows the deepest apologies for this incident,
Responsible directors which caused a great deal of trouble for clients and other
Report Direct / Oversee
individuals concerned. The Company is aiming to
Each Dept.
Responsible person Promoters for strengthen more its information management up to the
for security control security control highest possible levels to prevent a recurrence.

Report on Social Responsibility
Aiming for CSR rooted

in every associate
In order for DENSO to continue growing
as a truly global corporation, it is more
and more important for us to watch for
trends in society, to be aware of changes
in society, and to quickly and precisely
respond to the demands of society.
As such, in fiscal 2006 DENSO started the
management based on CSR in which the
Senior Managing Director,
relationship to society is emphasized. We Member of the Board
Responsible for CSR
are working on this management together, Noriaki Kato
driven by the corporate culture of the
DENSO Spirit (Foresight, Credibility,
Collaboration).
As a member of automotive industry, DENSO must strive more to face
social issues including quality improvement, occupational safety, and
eradication of traffic accidents.
In order to solve these issues, every associate of the DENSO group
must understand the “ISR (Individual Social Responsibility)“ and put it
into his or her action.
DENSO is determined to make more efforts to aim at a “true CSR”

backed by the awareness and action of each of its associate.

Highlights of activities for fiscal 2006
For our customers
Reliability Center in full operation Established DENSO Diag-Station Progressed more in preventive safety and
A research facility called the “Reliability Center” Under the coordination of eight regional sales pre-crash safety
was established at DENSO headquarters to companies in Japan, DENSO began to build a DENSO developed the main components of the
hand down its sophisticated assessments, new service network for the fault diagnosis of object detection systems for such as pedestrians

analyses, and technologies for improving the technologically-advanced vehicles. and the pre-crash seatbelt systems, both of
quality of products. which constitute the parts of the new PCS
(Pre-crash
Safety) system
installed in the
TOYOTA
Lexus LS460.
Activity Highlights in Fiscal 2006

P25 P26 P27
Museum of Past Troubles DENSO Diag-Station Stereo Image-Processing ECU
With our associates

Started“DENSO-way Monozukuri Education” Held “Women’s Forum” and promoted Jointly established a management company
DENSO is strengthening DENSO’s unique awareness-raising for infant daycare center
“monozukuri” education with the aim of As a part of the activities to raise awareness of As a part of the efforts to support the balancing
developing global human resources. The promoting the success of female associates, in of work and child rearing, DENSO jointly
Company aims to speed the development of December 2006 DENSO held the “Women’s established a management company to operate
local leaders in overseas entities. Forum.” infant daycare centers for associates. The
centers have
been in
operation as
of October
2007.
P29 P30,P42 P32

DENSO-way Monozukuri Education Women’s Forum An infant daycare center
With our shareholders and investors With our suppliers

Returned profits following increase in sales Spread out supplier assessment to group Revised Green Procurement Guidelines
and income in all regions companies overseas DENSO expanded the scope of suppliers
DENSO achieved record financial results, due DENSO has extensively spread out the covered and the Company requested to
to the strong production of both Japanese and “Supplier Assessment System (CAPS)” with strengthen chemical substance management,
other automakers. Dividends were raised to impartial standards to group companies report LCA of newly supplied components and
45 yen a year. overseas, for the purpose of mutual materials, and consider the environment in
development logistics.
Suppliers Assessment DENSO and increased
criteria corporate
performance.
Voluntary
improvement CAPS Assessment
Feedback
P34 P35 P36

General Meeting of Shareholders Assessment activities with CAPS for improvement Homepage for procurement activity (in English)
With global and local communities

Enhanced wheelchair production and Started operation of an Eco-Point system Extended the boundary of volunteer
basketball exchanges “DECOPON” activities
DENSO expanded wheelchair production, a DENSO started the “DECOPON,” a point DENSO actively made efforts to promote the
supportive project for the NPO “WAFCA,” to system that supports associates’ activities of membership in the “DENSO ‘Heartful’ Club”
China. Also, the Company held the first environmental conservation and of contribution and the participation in a group-wide activity of
“DENSO/AIOI CUP WAFCA East Asian for their local communities. 1,956 associates corporate citizenship named “DENSO‘Heartful’
Wheelchair Basketball Friendship Game.” have been registered. Day” or “DENSO Group Community Service Day.”
P37 P17-18,P38 P39,P40

DENSO/AIOI CUP WAFCA East Asian Wheelchair Basketball Friendship Game DECOPON passbook DENSO ‘Heartful’ Day

For Our Customers
DENSO is striving to create a new value based on its < Full operation of Reliability Center >
“customer first” policy and the four pillars of “quality, The “Reliability Center,” which gathers all of reliability
technology, service, and customer support.” facilities at headquarters, has begun its full operation as
of April 2006. At the Center, the reliability assessments of
The fundamental principle of quality-first various DENSO products on the environmental and
The safety of customers is entrusted to the quality of operational endurance are conducted with more than
automotive components. That is why ever since its 1,000 testing machines. Also, in order to assess each
foundation the Company has been working on the product in a vehicle system, as well as in stand-alone,
“quality in creation” in all stages of designing, the Company uses the vehicle testing facilities which are
manufacturing, and after-service. This effort is based on capable of in-room tests, simulating high speed or rough
the policy of “quality management in all stages of the road and conditioning such environment as temperature
manufacturing process.” and humidity. As such, DENSO pursuits the increase in
Specifically, the “CS (Customer Satisfaction) reliability. In addition, the Center’s “Museum of Past
Improvement Committee” (Chairperson: President Troubles” permanently exhibits products and documents
Fukaya) selects quality-related issues by examining the related to the serious quality troubles in the past. In fiscal
activities related to quality, thereby conducting quality 2006, the Museum had more than 20,000 visitors in total.
improvement. In addition, following the history of Now the Museum has become a precious occasion to
recognition with the Deming Prize*2 (1961), the Company raise awareness of product quality.
promotes TQM*3 activities to spread out group-wide
activities of quality improvement.
*1 A prize unique in Japan, which is awarded to individuals or corporations recognizing
the contribution to quality management.
*2 Total Quality Management, an activity of quality improvement, evolved from QC
(Quality Control) activities
(1) Quality assurance structure

With regard to the quality assurance of a new product, the In-room rough road test Museum of Past Troubles
Quality Assurance Meeting is held in every four stage from
planning and designing to mass production, with the (2) Raising awareness of quality and activities of
attendance of top executives. In particular, in the improvement
designing stage, quality is strictly confirmed by repeated DENSO is spreading out continuous activities of
tests. Some tests are conducted in the environmental improvement with high awareness of quality. Such
testing room and others are conducted in the corporate activities consist of: the “QC-Circle Activities” with more
proving grounds under such conditions as high-speed than 1,800 circles; the “Qualitative Skill Competition” in
lapping, rough roads, low temperature, and icing. These which five senses are exploited to detect defects; the
tests are to assure the reliability and endurance of each “Quality Improvement Exhibition” with all group
product in a total vehicle system, as well as in stand-alone. companies; and the group-wide “CS Improvement
Campaign” (once a year). Since 2002, the activities in
<Enhancement of sites and system for research and small groups mainly in the manufacturing part have been
development > enhanced to include administrative and technical parts
DENSO established the “Technical Centers” in Japan. as well. In fiscal 2006, a “QC-circle Tournament” was
Also, the Company established other centers with also held in China. On top of that, at the “All-Japan
material assessment function in the U.S.A., Germany, QC-circle Competition,” DENSO has been awarded the
and Singapore. In Aachen (Germany), the Company gold medal for five years in a
established the “Engineering Center” with the function of row. In November 2006, two
designing and assessment of the products for diesel circles from DENSO were
vehicles. In fiscal 2006, following the expansion of the awarded the gold medal. It is
emerging market such as China and India, the new by means of these activities
Technical Centers were established in Thailand and that DENSO is so highly
China. As such, DENSO continues promoting the recognized by its customers
product development tailored to regional characteristics. of car manufacturing.
Honored with the Global Contribution
Award from a customer

•Major awards from customers in fiscal 2006 technicians and facilities are available to promptly

Name Customers Recipient Reason diagnose the faults in advanced vehicles. At
Global Contribution Contribution in 3 parts Diag-Stations, DENSO deploys its original analytical
Award of world (fifth time)
Toyota Motor
equipment, such as fault diagnosis testers and data
Excellence in Cost Improvements in the cost of
Improvement Award
Corporation
(Japan)
DENSO Lexus LS recorders, and installs “DENSO Diag-Masters” who have
Technical Development certified by a Company-unique examination. By 2010,
Award LS460 components
DENSO plans to open 50 or more Diag-Stations in Japan.
For Our Customers

Quality category: Toyota Motor
Gold North America DMAT (U.S.A.) Recognition of quality
Quality category:
Strengthening customer service desk
DNBA (Spain) Recognition of quality
Bronze Toyota Motor Under a strict information security, the comments and
Europe suggestions of customers are informed to the concerning
Cost Improvement DNEU (Regional Performance on cost
Category: Gold headquarters in Europe) improvement
departments, thereby seeking to respond to them with
Excellent Supplier Toyota Motor DIAU, AAA Overall recognition of quality,
Award Corporation Australia (Australia) cost, and delivery necessary improvements. In May 2007, DENSO
Overall recognition of quality, service, established a new “Customer Service Center” to respond
Supplier of the Year General Motors DENSO technology, and cost of four products
to its customers more promptly and properly.
VA/VE Proposal Award Suzuki Motor Performance on VA/VE
Corporation (Japan) DENSO improvement
Honda Motor Proposal in component

•Inquiries and comments regarding DENSO products
Parts Integration Award DENSO
Co., Ltd. (Japan) integration activities Other 14%
Ionic air purifiers 1%
Clean air filters 2%
Communication devices 2%
Environmental systems 3% Total

Improving service level ETC
9,307 47%
(1) After-sales service structure Car navigation systems
12%
Based on the policy of DENSO such that “products and
services are integral,” the following services are
Spark plugs
conducted: check and repair of automotive parts; sales 19%
of spare parts; and recovery of CFC refrigerant in car air
conditioning systems. In Japan, the eight regional sales
companies conduct the services in coordination with 691
service stations (designated service stations, dealerships). Response to malfunctioning
Also, 3,700 overseas service stations in 98 countries In the event of a serious malfunctioning in a product,
conduct the services. Furthermore, at the “Service DENSO promptly notifies the information to customers
Training Center” of headquarters and the training facilities and relevant organizations through different media, while
around the world, the Company seeks to improve the furnishing a structure for the recall and the repair of the
technical skills of its staff. At the same time, the product in question.
Company holds an annual “Global Service Conference” In March 2007, a component used in three types of the
in which the responsible persons in each country share product “Spot Heater,” manufactured between 1982 and
information and discuss the solutions for respective 1990, were found to potentially cause a smoke or fire
issues. hazard. The problem were attributed to the cracks in the
solder for a current-control component (type: 12F, 12FD),
(2) DENSO Diag-Stations and the breakage due to the long use of oscillating
Due to the progress in the electronic control of function (type: 7FX). DENSO immediately posted the
automobiles, the service “Expression of apology, and the request of withdrawing
sites of DENSO are and recalling” on its website and all national newspapers.
increasingly required to The Company also established a toll-free number for the
provide sophisticated “DENSO Spot Heater Recall Reception Center.” As of
technical responses. In July 2007, there have been no reported cases of fires or
order to promptly injuries caused by these products, but the Company is
correspond to this trend, continuing to pour its full efforts to recall the products.
DENSO launched URL Apology and notification concerning the Spot Heater
“Diag-Stations” in which Educations of Diag-Meister http://www.denso.co.jp/ja/topics/070327-01.html

The pursuit of safety, comfort, and Comfort

convenience
To “create an advanced automotive society,” DENSO is New climate control system
making its efforts to develop innovative products mainly By the world’s first infrared sensor “Matrix IR Sensor,”
in the areas of “environment, safety, comfort, and which detects the surface temperature of rear
convenience.” In fiscal 2006, the Company made the passengers individually, the new climate control system
following progress in the areas of safety, comfort, and automatically controls the air temperature and the air flow
convenience. Such progress was applied to the Toyota rate according to each rear passenger’s thermal
“Lexus LS460” which has been on sale from September condition. Also, the oxygen concentration conditioner,
2006. (see page 55, a subsection for products in the which prevents a decrease of oxygen concentration
Environmental Reporting section) inside the vehicle cabin, and the new rear air conditioning
unit, which realizes excellent low noise performance, are
installed in the system to improve passenger’s comfort.
Safety
•New climate conditioning system
The development of products for a new “Pre-Crash
Safety (PCS)” system Front HVAC unit
The PCS developed by the Toyota Motor Corporation is a

safety system to reduce mutual injuries by actuating such
Matrix IR sensor
as brakes and seatbelts on the brink of an unavoidable
collision. Toyota’s “Lexus LS460” has mounted a new Oxygen concentration
PCS system in which sensors detect not only cars or conditioner
obstacles, but also pedestrians. Rear air conditioning unit

DENSO developed the following for the new PCS Air diffusers
system: 1) “Stereo Image-processing ECU,” which
processes the data sent from the stereo camera for
Convenience
three-dimensional objects including pedestrians; 2) “Front
Millimeter-wave Radar,” which detects the obstacles in (1) The Development of remote security system
front of a vehicle; 3) “Driving Assistance ECU,” which DENSO developed, together with Toyota Motor
controls PCS system basing on the information from Corporation, the world’s first remote security system
Stereo Image-processing ECU and Front Millimeter-wave with a remote immobilizer function*. When a vehicle and
Radar; and 4) “Pre-crash Seatbelt ECU.” With these its key with an immobilizer function are stolen, the
products DENSO is contributing to improve support center sends orders to the vehicle to prohibit the
safety performance. engine’s restart. As such, this system has improved the
vehicle’s anti-theft security.
* Immobilizer is an anti-theft system for vehicles, which allows the vehicle’s engine to start
only when the authentication code of the key matches with the vehicle electronically.
(2) The development of cluster with TFT LCD display

For the first time in the world, DENSO developed a
superior backlight-unit for the TFT Liquid Crystal* Display
(LCD) on instrument clusters using a high-luminance
Light-Emitting Diode (LED). This information device gives
Stereo Image Processing ECU (World first) Driving Assistance ECU (World first)
highly readable information to drivers. The unit does not
•Mechanism of detecting a pedestrian contain mercury, an
environmentally hazardous
Near-infrared ray irradiation
substance, and reduces
energy consumption by 20%
Distance measurement and compared with conventional
Obstacle detection by a
millimeter-wave radar
three-dimensional recognition cold-cathode tube type
by a stereo camera
backlight-unit.
* Liquid crystal using thin-film transistors
Instrument cluster with TFT LCD

With Our Associates
When all associates work to their full potential and Employment policy and associate relations

have an enjoyable personal life, the resulting effect is We at DENSO consider “hitozukuri” (human resources
company growth. DENSO places this idea as the development) as the source of corporate growth. Hence,
basis of our measures, presenting it in the DENSO in our associate relations, we set the philosophy which
Philosophy, the Human Resources Management encompasses 1) mutual trust between the Company and
Philosophy, and the DENSO Group Declaration of associates and 2) the improvement of labor conditions
Corporate Behavior. As such, we strive to create an through Company growth. We have fostered this
For Our Customers/With our associates

environment free of any discrimination in which our philosophy in resolving a labor turmoil in 1950 in Japan,
group associates around the world can succeed shortly after the Company was founded.
amidst various cultures and traditions. In DENSO Japan, such associate relations forum as at
corporate level, at Groups or Centers level, and at the
workplace level are regularly held. Of which, the forum at
DENSO Human Resource
the workplace level (six times a year) plays an important
Management Philosophy
role in increasing associate awareness of involvement in
Mission corporate management.
To realize the growth and prosperity of both DENSO and
its associates by creating a culture where all associates
can contribute to DENSO’s business aims to the
maximum of their ability.
Human Resource Philosophy

1. To create among associates a sense both of unity and
of individual motivation to actively participate in
business activities.
2. To recruit, assign, retain and develop associates who Associate relations forum (DENSO Japan)
are creative and have the willingness and ability to
contribute to continuous business growth.
3. To establish and implement fair human resources Associate Motivation Survey
management policies and systems, which are highly In DENSO Japan, we conducted the “Motivation Survey”
evaluated by both associates and society. to comprehend our associates’ level of motivation and
satisfaction regarding the work, as well as the Company,
and to reflect its outcomes into corporate management
Sharing the DENSO Spirit measures. The survey centers on the issues including
The DENSO Spirit specifies the sense of values and beliefs “motivation to work”, “vigor at workplace”, and “behavior
that should be shared throughout the entire group so that of superiors.” The latest survey was conducted for the
we can grow and develop as a truly global corporation in listed 33,339 individuals (DENSO Japan), and achieved
which associates with unique personalities work together response rate of 96 percent. The results of the survey
as one. This is the stipulation of the values tacit ever since were reported to the directors at the highest tier. The
our foundation comprised by: “Foresight (Vision, Creativity, results were also fed to the managers of each workplace
Challenging),” “Credibility (Quality first, On-site verification, to utilize the identified issues on workplace operations.
Kaizen),” and “Collaboration (Communication, Teamwork,
and Human resources development)”. DENSO seeks to
instill and diffuse these values at any such opportunity as
training and dialog activity. •Number of associates and breakdown (as of March 2007)
Total associates
112,262 associates (consolidated)
(consolidated)
Male Female
Number of associates 35,516 3,775
DENSO
Japan Average age 41.4 years old 32.8 years old
Average service years 21.0 years 12,6 years
Turnover rate 0.3% 3.1%
DENSO Spirit

Human resources development and to Top Management positions and have implemented a
Career Support performance management system following a globally
Each of our associates has his or her own set of values. common procedure.
Thus, in DENSO Japan, in order that individual
associates expand their potential feeling growth and <Education on DENSO-way Monozukuri >
achievement, we base our policy of “respect for In 2005, with the aim of developing local managers and
independence balanced with collaboration and supervisors, we established the “Monozukuri DNA
maximum utilization of human resources” to pour our Promotion Center” in DENSO Japan. In fiscal year 2006,
efforts in developing the ability of associates and in we began the “Education on DENSO-way Monozukuri.”
building a fair and impartial system. It aims to hand down the essence of our quality-first
policy through acquiring the following: the importance
(1) Building an environment of challenge of a management approach based on “on-site
(DENSO Japan) verification,” which seeks to solve issues in locale rather
In order to foster an awareness of independence than behind a desk; and the job procedures which
balanced with collaboration among our associates, we draws the potential of associates.
have furnished the following: the education by
organizational level with a variety of selective courses;
an enrollment scheme at graduate schools to heighten
professionalism; a supportive system to acquire a
degree such as a MBA (Master of Business
Administration); and a sophisticated program of
professional education for the associates of engineering
and skilled at “DENSO Engineering and Technical Skills
Education on DENSO Monozukuri
Training Center.” As to the upward career move,
associates are challenging their job or ability based on
their own vision of “what I want to be in the future.” At <Education on Cross-Cultural Understanding>
the same time, through systems such as the (DENSO Japan)
“Developmental Rotation System,” associates are The associates in overseas group companies are
confirming the performance and assignment through a increasing. As a result, there are more opportunities for
regular interview with their superiors. In addition, we Japanese associates to travel abroad on business.
have established such internal systems as job posting As such, in order to further strengthen the global
and free agency to support their motives to venture into responsiveness of DENSO headquarters, in fiscal 2006
their new possibilities. we began the class by organizational level on
“Education on Cross-Cultural Understanding.” It aims
•Number of applicants for major systems (DENSO Japan) an upgrade communication ability through learning in
Developmental Rotation System An annual average of 1,200 associates depth foreign culture, as well as foreign language .
(from fiscal 1998 to 2006)
Internal job posting system 15 associates per year
(from fiscal 1998 to 2006) (3) Handing down our technical skills as a development
Internal free agency system An annual average of 10 associates strategy
(from fiscal 1998 to 2006)
The lifeblood of DENSO comprises the technologies
and technical skills, which develop and produce the
(2) Global human resources development products that are too high in precision and quality for
In order to reach our ultimate goal of globalization, we other companies to imitate. Therefore, we particularly
promote the localization of management throughout the pour our efforts to hand the technologies and technical
world by actively developing associates. skills down, and on. To do so, at the DENSO
Engineering and Technical Skills Training Center, a
<The Global Leadership Program> systematic education on technologies and skills are
We are expanding a program oriented to develop local implemented. Meanwhile, training facilities have been
managers who understand the DENSO-way and established in our factories around the world, at which
possess high management ability. Specifically, we are the masterful associates of facility maintenance or
conducting intensive seminars for successor candidates production engineering are handing their skills down to

the next generation. In addition, in Japan, at the DENSO confirmed the appropriate effect of the respective

Technical Junior College, which offers the curriculum of policies by group-standard self-check (Japan) and
technical high school, technical college, and junior corporate check (overseas). Besides, we strive for the
college, we have nurtured the youth who carries the next prevention by establishing whistle-blowing system
generation, and thereby we have produced many (Japan). (see p. 20)
medallists at the “World Skills Competition,” in which the
world’s highest skills are contested. (2) Support for female associates to succeed
With our associates

(DENSO Japan)
(4) Shifting from temporary workers to regular, We believe that, in order to foster a corporate climate in
full-time associates (DENSO Japan) which the “wisdom” is utilized across the associate
Among other measures seeking to move the carrier of attributes, in Japan the opportunities of success for
our diverse associates upward, in fiscal 2005 we have female associates with high ability and motivation are
established a system that allows temporary workers to indispensable. Following this belief, we are striving to
shift to permanent employment. In fiscal 2006, 189 furnish the suitable environment. Specifically, we have
temporary workers (3.1 times more than in the previous placed the following priority measures in DENSO Japan:
year) have shifted to regular, full-time associates. In 1) increase in the number of female managers and
fiscal 2007, we plan to shift 450 temporary workers to expansion of occasions for their success; 2) upgrade in
those of regular, full-time. motivation among female associates and the provision
of edificatory opportunities; and 3) provision of
Human rights, equal opportunity, and occasions to rethink the awareness among superiors
respect for diversity and in workplaces.
In the “DENSO Group Declaration of Corporate In fiscal 2006, we held the “Women’s Forum” as a part
Behavior” and “Code of Conduct for DENSO Group of edifying our awareness. Top management declared
Associates,” DENSO has stipulated the prohibition of that the corporate-wide efforts would be made to
any discrimination and harassment based on race, support the success of associates. Also, we discussed
gender, age, nationality, or physical disability. promotion measures through lectures of advanced
companies, panel discussions between female
(1) Seminars and edification associates and management, and surveys.
In Japan, we incorporate the education on human rights Furthermore, in November 2006, we introduced anew
into the education by organizational level (e.g., for new the system to re-employ associates once have left the
recruits and new managers). Also, the seminars and Company due to the transfer of their spouse. As such,
group studies are held. In particular, since 2000, we we expanded the opportunities for women to succeed
have emphasized inhibitive education on sexual by their immediate contribution with the knowledge and
harassment and power abuse. This is a part of our experience fostered at DENSO.
education on compliance. Furthermore, we have
(3) Support for finding jobs after retirement
(DENSO Japan)
V O I C E Amid our aging associates, since April 2006 DENSO
Japan has introduced a new re-employment system
The activities to share the DENSO Spirit
named the “Career Associate System,” which extensively
Various activities to share the DENSO encompasses all our associates. This system aims to
Spirit are conducted in India as well. support the motivation to work and live and thus to
Associates participate in workshops, in strengthen the corporate competitive edge. As of April
which they talk with each other about
the compilation of a code of conduct
2007, 160 associates have re-employed. In addition, in
based on the DENSO Spirit, as well as order to respond to the diverse requests on job finding,
about their experiences. In addition, since April 2006 we have also introduced and have
among four group companies in India,
operated the “Senior Challenge System.” This system
the persons in charge of promoting the
DENSO Spirit meet regularly, and provides work opportunities outside the Company.
thereby they coordinately proceed with
DNHA (India)
respective activities.
S. Chakraborti

(4) Furtherance of employing the disabled respective global measures. In addition, the persons
(DENSO Japan) who are responsible for human resources of their global
For the employment of the disabled, ever since 1978 region come together and hold the “Global Human
when DENSO Japan began the regular employment of Resources Forum,” in which they share the measures
the hearing impaired, we have proactively worked on and discuss human resources issues. In this way, we are
expanding employment and occupational range, working on building a workplace in which associates can
increasing education and seminars, and furnishing actively succeed.
facilities. As of fiscal year 2006, we have 417 disabled
associates (356 in manufacturing, 61 in administration),
who comprise 1.94% of our total workforce, exceeding
the statutory employment rate. In addition, our special
subsidiary of DENSO Taiyo Co., Ltd. currently employs
60 disabled associates in its business of manufacturing
instrument clusters for mini vehicles. In the future,
DENSO Japan will work to expand the scope of
qualification for the disabled. At Japanese group
Global Human Resources Forum
companies the Company will work on furthering the
employment of the disabled.
(3) Enhancing associate support for childcare and
Building a comfortable workplace nursing care (DENSO Japan)
Among others in Japan, we have been enriching the As part of building an environment in which our associates
systems from the viewpoint of “work-life balance,” aiming who are balancing work and childcare can work
for a compatible life of work and home. Abroad, we have comfortably, in November 2006 we started a new system
been operating related systems respecting the culture combining maternity leave and shorter working hours.
and custom of local communities. We all with the will to Furthermore, we have set up the “Half-Day Paid Leave
work have been making efforts to build a comfortable System” and “Yasuragi Leave,” the latter allows associates
workplace environment. to accumulate their unused yearly paid leave to use in
cases of accidents or illnesses involving themselves,
(1) Responding to HR Issues at sites abroad spouse, children, or parents.
The Associate Relations Review (ARR) has periodically
been implemented to review the human resources and
labor measures at sites abroad. Following this Review,
representatives of human resources departments at
DENSO headquarters and regional headquarters visit
local sites. Then they review the operational status of the
environment, safety, hygiene, compliance with labor
regulations, treatment, and benefits. Furthermore, in V O I C E
fiscal year 2006, we began using the “HR Indicator”
Childcare Leave gifted me with precious joy
index, which analyzes changes in associate working
(DENSO Japan)
status on a monthly basis, in order to better respond to
issues at an early stage. This is an account from one of our
associates. “The birth of our first child
posed my wife more strain than imagined.
(2) Global collaboration of human resources function So when our second son was born I took
After collecting ideas from people across the world, in the Childcare Leave for two months. The
fiscal year 2006 we introduced a new procedure to plan Leave was a precious experience, as my
son grew before my eyes and as the
and promote human resources measures worldwide. housekeeping, as well as childcare,
Following this procedure, the team comprised of literally weighed. This experience has
members from DENSO Japan and other places in the changed my idea of work and home.
I am very grateful to my workplace for its IIC Engineering Dept. 2
world review specific issues. Also, the representatives in
charge of human resources from headquarters and
understanding and follow-through.” Takanori Makino
regional headquarters cooperatively set the direction of

(4) Cooperatively establishing infant daycare centers of the Safety Marks.*

(DENSO Japan) DENSO takes these outcomes as a serious crisis and from
In Japan, in January 2007 DENSO and four other fiscal 2007 onward it make efforts to penetrate safety
companies in TOYOTA Group jointly established awareness with dialog, strengthen safety diagnosis (audit),
Touchcare Corporation, a company that operates and and furnish a global safety standard.
manages infant daycare centers for our associates. The * A system in which marks are given based on the degree and the type of injury for each
accident.
company is going to establish the infant daycare center
With our associates

named “Tacchicchi House” at five locations in Aichi
Prefecture and Mie Prefecture, where our business sites
are densely located. The centers are operated according
to the work days and work hours of the companies, and
thereby the companies will support the associates rearing
•Work-related accident ratio (Absence frequency ratio)
children. The centers started operations in October 2007.
1.0 1.02 All manufacturing sectors
Manufacture of motor vehicles,
parts, and accessories
Manufacture of electrical
0.5 0.50 machinery,equipment,
0.37 and supplies
0.07 DENSO
0
‘01 ‘02 ‘03 ‘04 ‘05 ‘06 (Fiscal year)
Lost time injury
Lost time injury frequency= ×1 million
Total working hours
The Tacchicchi House •Safety Points

100
77 81 73 DENSO Japan
54 64
59 56 Group companies in Japan
Safety and health 50 33
39 67
Group companies overseas
47 30 44 43.5
(1) Safety philosophy 41
26 17 25
Based on DENSO’s safety philosophy of “It will be the 0
‘01 ‘02 ‘03 ‘04 ‘05 ‘06 (Fiscal Year)
best way for human respect and high productivity to
make safe and comfortable,” DENSO has established
the “DENSO Safety and Health Standards” (internally •Control items and results
known as “DAS,” first instituted in 1969). The Company DENSO Japan
Group companies
in Japan
Group companies
overseas
Control items
manages respective goals by safety inspections, while Target Result Assess- Assess- Assess-
ment Target Result ment Target Result ment
assessing and following through by periodical safety Safety Marks 60 67 × 60 73 × 84 43.5
diagnosis. Thus, DENSO is promoting the management 0.05 0.07 × 0.06 0.11 × 0.10 0.04
Lost time injury frequency
[DENSO group] Target: 0.08 Result: 0.06
of safety and health that covers the whole group.
Number of serious accidents 0 0 0 0 0 0
Number of serious accidents of 0 0 0 0 0 0
(2) To strengthen safety constitution subcontracted construction
Fires 0 0 0 1 × 0 0
DENSO and its group companies in Japan have identified
Occupational illnesses 0 0 0 0
and assessed the risks of serious accidents and have
furnished the safety standard by company. The group
companies overseas have held explanatory seminars on T OP I C S
risks and have spread out relevant supportive activities in
Asia, China, and the Americas. PAC (Philippines) was honored with award from
However, there have been such incidents as the trap in Safety Organization of the Philippines
machinery at DENSO, the fire at a group company in In November 2006, PAC, a group company in the Philippines was
Japan, and the false operation of forklifts and cranes at awarded at the “National Safety Convention,” hosted by the Safety
group companies overseas. In fiscal 2006, 36 associates Organization of the Philippines, with recognition of its excellence in
occupational safety. PAC has operated with zero accidents since it
injured on the job (DENSO group), of which 14 were had begun operating in 1996, and was recognized for operating 3
absent from work. As a result, DENSO and its group million hours consecutively without an accident.
companies in Japan did not reach the target level in terms

Building up the health of associates (2) Activities to increase physical health

Building up the health of associates is the cornerstone As a preventive measure against the increase of life-style
for promoting vigorous corporate activities in teamwork. related diseases (including hyperlipemia, hypertension,
Based on this idea, DENSO is making efforts to build up and diabetes), DENSO is conducting both group
the health of body and mind of its associates under a education and personal instruction to improve the meals
system of “prevention and awareness-raising,” and the lifestyle of its associates.
“consultation and early detection,” and “cure and The Company was conducting the activity called
rehabilitation.” In the system, related departments and “Building up Health and Fitness” mainly for the
healthcare staff work together. manufacturing part to restrain the obesity of visceral fat,
Also, group companies of the Company are striving for resulting in such as the metabolic syndrome, and to
the healthcare measures pursuant to legislation under maintain and increase health and fitness. From fiscal
the recognition that the health of associates is most 2007 onward, the Company will expand the scope of
important to realize “corporate vitality” in the DENSO this activity to include all job categories, thereby
Philosophy. spreading out anew the “Health Promotion Activity.”
•The Effect of activity for improving the issue of obesity and fitness
(1) Mental Health
Lack of fitness Good17%
An open workplace is primarily important to increase the Lack of fitness 26% Lack of fitness
+ Obesity + Obesity
mental health. For this purpose, DENSO is striving to 30% 30%
promote a variety of consultative services and activities
for vitalizing its workplaces. At the same time, the Fiscal 2004 Fiscal 2006
Company is emphasizing the curb on long working hours
and the seminars by organizational class for the sake of Lack of
fitness
“illness prevention and awareness-raising.” Besides, 16%
specialized medical staffs are on hand at all times in the Obesity44% Obesity37%
“Counseling Room” established in all of its plants in Japan.
In fiscal 2006, in Japan, DENSO established a new •Building fitness of associates (DENSO Japan)
exclusive hotline for counseling. Also, with the aim of Medical check-up coverage 100%
finely personalized consultations, the Company sought Participants of mental health seminars
to increase the number of psychiatrist, clinical Managers around 960 (21 seminars)
Non-managerial associates around 1,900 (65 seminars)
psychotherapist, and specialized nurse. Besides, in
Participants of preventive education on life-style related diseases 990
order to smoothly rehabilitate the absent associates, the
Participants of the “Health Promotion Activity” 6,040
Company introduced the new “Rehabilitation Support
Program.” This program is to support rehabilitating
associates with attendance simulation, shorter working
hour, and the plan for phasing in to the job. Additionally, C O L UMN
in order to comprehend the level of mental fatigue Do it! The Promotion Committee of Healthful Life
among its associates, DENSO newly set respective
items in the internal questionnaire called the “CSR In April 2007, to enhance the supportive
Survey.” The Company will watch the development of activities of health building for associates
and their families, the “Promotion
the survey, comparing with the outcomes of the national
Committee of Healthful life” was jointly
survey published by the Japanese Ministry of Health, launched by the Healthcare Administration
Labor, and Welfare. Dept., the DENSO Health Insurance Union,
and the DENSO Well Corporation.
The committee is based on the idea that
the efforts of associates together with the
understanding and cooperation of their
family are indispensable to prevent and A yoga class
ameliorate illness. As such, the
committee is going to plan and offer a
variety of programs for preventing obesity
or illness and for building exercise habits,
in which associates can participate
together with their family.
Visiting lecture on mental health at a workplace

URL Information for investors http://www.denso.co.jp/ja/investors
With Our Shareholders

and Investors
DENSO is aiming to increase corporate value, in step factory tours and the meeting with corporate executives

with a stable long-term growth. The Company were in high repute. Both of them targeted institutional
discloses both business and financial information investors in Japan.
timely and appropriately, while conducting dialogs. As
such, the Company increases the transparency of its
corporate management.
With our associates/With Our Shareholders and Investors

Business results of fiscal 2006 and profit
returning
The business results of DENSO in fiscal 2006 showed
an increase in revenue and profits in all regions, driven Exhibition at General Meeting of Shareholders
by strong production of Japanese automakers both •Content of IR activities

inside and outside Japan, and by the Company’s
Target IR Activities in fiscal 2006
proactive expansion of sales to foreign automakers. As •Quarterly financial information meeting, the “One-on-one meeting”
Institutional investors in
a result, the consolidated net sales were 3,609.7billion Japan, Financial analysts
•Factory tour, Executive discussion forum (Zenmyo Plant,
Aichi, Japan, in March)
yen (up 13.2% year on year) with ordinary income of
Institutional investors •Information meeting and the “One-on-one meeting” abroad
322.1billion yen (up 13.8%). The dividend applicable to abroad
(Asia: in July; North America: in September; Europe: in November)
•Publication of annual report
the year was increased by 7 yen per share, to 45 yen.
•Exhibition in IR fairs (Tokyo, Japan, in December, 700 booth
ROE (return on equity), an index indicating profitability Individual investors and visitors; Nagoya, Aichi, Japan, in December, 1,150 booth visitors)
(efficiency) for the investment of shareholders, rose to shareholders •Factory tour (after General Meeting of Shareholders)
•Publication of business report, distribution of IR news mail
9.9% (up 0.5%).
Overall •Release of information on the website of “Investors”
General Meeting of Shareholders

Every year DENSO holds General Meeting of Evaluation from external institutions
Shareholders at the end of June at headquarters in There is an increasing interest in an investment tool
Kariya City, Aichi Prefecture, Japan. For those called “Socially Responsible Investment (SRI),” in which
shareholders unable to attend, the Company is striving not only financial performance but also the efforts for
to disclose the information by posting a video of the society, environment, and ethics, collectively the efforts
proceedings on website. In addition, after the meeting, for CSR, are assessed. DENSO has been selected
the Company implements a guided plant tour for seven years running in one of such indices called DJSI*2.
shareholders who Additionally, in Europe the Company has been selected
are interest in it. in one of leading indices in Europe called ESI*3. As such,
DENSO has been included in a number of SRI funds.
Besides, with regard to the bond rating of the Company,
the rating companies, two based in the U.S.A. and one
in Japan, have evaluated the sound financial condition of
DENSO as shown below.
General Meeting of Shareholders in fiscal 2006 *1 DJSI: Dow Jones Sustainability Indexes, an index selected by Dow Jones &
Company, Inc. and SAM group, a Swiss research company. Of approximately 2,500
major companies in 34 countries, the top 300 companies are selected.
Information disclosure and investor *2 ESI: Ethibel Sustainability Indexes, a Belgian non-profit organization Ethibel
evaluates the efforts regarding social responsibility at about 1,500 major companies
relations in the world, and selects about 200 companies.
To enhance the opportunities of investment as an open
corporation, DENSO complies with statutory disclose
standards, as matter of course. Also, the Company
releases information promptly, as well as fairly, deploying
a variety of media. Specifically, for institutional investors, •DENSO’s bond rating
individual investors, and financial analysts, the Company Rating companies Long-term rating Short-term rating
proactively holds a variety of explanatory meetings and Moody’s Japan Aa1 P-1
appears in IR fairs. In fiscal 2006, DENSO implemented Standard & Poor’s AA+ A-1+
the activities shown in the following table. Among others, Rating and Investment Information Center AAA a-1+

With Our Suppliers
DENSO opens its doors in and out of Japan, and the sought to diffuse and penetrate it, considering both
Company penetrates fairness in all of its transaction national and local characteristics.
processes. DENSO respects its suppliers as equal Also, in order to promote respective measures, the
partners and builds a trustworthy relation. Thus, the “DENSO Group Global Procurement Conference” was
Company aims at mutual evolvement and growth. held for the persons who are responsible for
procurement at overseas group companies. At the
Basic procurement policy Conference, relevant information was shared and the
The “Open-Door Policy” is a corporate basic policy to issues common to every region were discussed. In
practice free, fair, and transparent transactions. This fiscal 2006, roughly 70 persons (including those at
policy is to offer equal opportunities to all suppliers headquarters) from 24 foreign sites participated in the
regardless of nationality, company size, or previous conference.
transaction records. The steps to start a transaction *CAPS: Constitution Assessment Program for Suppliers
and the inquiries to procurement part are disclosed on
the website.
[Basic ideas on procurement]

1 Open-door policy
2 Mutual evolvement based on mutual trust
3 Promotion of green procurement which considers the environment
4 Promotion of local procurement aiming for a “good corporate citizen” DENSO Group Global Procurement Conference
5 Penetration of the compliance with legislation and the confidentiality

Sharing CSR policy with suppliers
Every year, DENSO holds the “DENSO Suppliers
Assessment by CAPS Convention” for all main suppliers to explain its
To seek to a mutual growth amid a fierce global procurement policies. At the convention, the Company
competition, continuous improvements in quality, cost, graciously awards excellent suppliers of the year,
and delivery are necessary. Therefore, DENSO has thereby striving to strengthen mutual partnership.
established the CAPS supplier assessment system In fiscal 2006, in order to promote the activities of CSR
which comprises fair standards. In fiscal 2006, the throughout the supply chain, the Company distributed
Company expanded its application of the CAPS to the the “DENSO Group Declaration of Corporate Behavior”
four major global regions (the Americas, Europe, to about 1,400 first-tier suppliers and requested each
Oceania and Asia, and China), whereby the Company supplier to appoint a person responsible for the activities
of CSR. Also, the Company expanded the scope of the
•Activities using CAPS to improve constitution of suppliers
Business Ethics Hotline to cover its suppliers. In fiscal
Social
2007, DENSO will incorporate “compliance, protection
responsibility of human rights, environmental conservation, and
Quality Cost Delivery Management
( Environment/Safety
Compliance )
observance of occupational safety” into the basic
business contract with its suppliers. Additionally, with a
check sheet which comprises 17 commitment items
Expectations
Suppliers on suppliers DENSO DENSO will request its suppliers a self-check.
( =Assessment
criteria )
O
Support by DENS
Voluntary
improvement CAPS Assessment
Feedback
DENSO Suppliers Convention

URL Procurement information http://www.denso.co.jp/PURCHA/index.html
Promoting collaboration Revising Green Procurement Guidelines

To improve the quality of supplied components and the The “DENSO ECOVISION 2015” (see p. 45) is a
technology of suppliers, DENSO implements discrete corporate commitment to reduce more the
support by supplier, technical exhibitions, and skill environmentally hazardous substances throughout the
competitions. In fiscal 2006, DENSO hammered out a business activities of DENSO. In order to promote the
policy as a measure to proceed these activities. The reduction, in fiscal 2006 the Company revised its
policy is to select “prominent suppliers” which possess procurement policy named the “DENSO Group Green
With Our Suppliers

brilliant technology, as well as mindset, and to make Procurement Guidelines,” seeking to strengthen the
efforts together with them to develop advanced following measures: expanding the scope of companies
products or production technologies. To the selected covered; penetrating the report of chemical substances
suppliers the Company presents an “expected value” contained; reporting CO2 emissions from procurement to
on medium-term and long-term bases. Then, the mass production; and considering more the environment
Company spreads out supportive activities to cope with in logistics. In August 2006, DENSO held an explanatory
various issues. Thus, DENSO and suppliers aim to meeting for about 1,400 suppliers and requested them
mutually strengthen the competitiveness. to practice these measures. (see p. 46)
[Content of key efforts]

•Global coordination with suppliers •Establish an environmental management system
•Manage and reduce environmentally hazardous substances
•Nurture site instructors
•Furnish quality assurance manuals •Work on the environmental improvement in the production
stage at suppliers
•Respond to Life Cycle Assessment (LCA) *
Japan Overseas
DENSO DENSO •Reduce CO2 emissions, and the materials for packaging
sites
and packing, in logistics
•Strengthen corporate constitution •Strengthen corporate constitution *An approach to quantitatively comprehend and assess the environmental impact in a product’s
•Develop human resources •Build procedures
•Build procedures lifetime, from raw material collection to product disposal.
( Quality assurance
manuals
CAPS ) Suppliers
Local entities
of supplier ( Quality assurance
manuals
CAPS )
•Transfer technological know-how
•Develop and install local human resources Send supportive team
Supporting and strengthening the

management at suppliers
In an effort to strengthen the corporate performance of DENSO Group Green Homepage for procurement activity (in English)
suppliers, the “DENSO HISHO-KAI” association, which Procurement Guidelines
comprises 79 of main suppliers, implements vigorous

activities of study groups in many subjects such as Penetrating business etiquette as a buyer
quality control, “monozukuri” (manufacturing), and labor Towards the trusted and supported procurement activity,
affairs. The association also holds various lectures. DENSO has stipulated its ruling behavior in the “Code of
DENSO supports the activities by sending the persons in Conduct for DENSO Group Associates.” Also, the
charge at respective specialized divisions to provide Company has distributed “Business Etiquette for Buyers”
advises or lectures in the study groups. In fiscal 2006, to all procurement-related divisions. Thus, the Company
as a part of the new “Risk Management Lecture,” the has sought to penetrate equal and fair transactions. In
DENSO HISHO-KAI held the lecture for top executives fiscal 2006, DENSO expanded the distribution of
regarding occupational safety, proper employment of “Business Etiquette for Buyers” to include manufacturing
external human resources (such as temporary staff), and and engineering departments. Also, the Company
work hour management. DENSO supported these associates exchanged opinions at workplace meeting
lectures by providing related information of the Company, about business etiquette and they confirmed another
such as the policy and the methods for spreading out penetration of the etiquette.
respective activities.

With the Global and

Local Communities
To contribute to the continuous development of On the other hand, DENSO has implemented surveys for
society, DENSO proactively promotes corporate participants by activity to seek to improve the level of
citizenship activities suitable for a good corporate corporate citizenship. In fiscal 2006, the survey was
citizen. In this way, the Company aims to be trusted implemented encompassing 1,100 citizens, 600 NPO
and supported by its stakeholders. members, and 3,800 associates. The opinions and
requests received will be reflected in the activities for the
Basic policy following years.
In fiscal 2006, DENSO has set the “Basic Policy of
Corporate Citizenship.” Following this policy, the Welfare for the physically challenged
Company promotes unique activities of corporate Aiming to realize a barrier-free society, DENSO has
citizenship, sharing the approach of efforts and the key conducted supportive activities for the physically
areas of the activities within the Company. challenged so that they participate in society and thus
they live on their own. For instance, in 1999 the Company
Basic Policy of Corporate Citizenship established a NPO named “Wheelchairs and Friendship
(key activities are excerpted below) Center of Asia (WAFCA).
Key areas
1. “Hitozukuri” (human resources development)
(1) Expansion of support through WAFCA
•Development of youth (education in scientific technologies and skills)
•Support of the socially disadvantaged (welfare for the physically WAFCA aims at the contribution in a barrier-free society
challenged)
. through the permeation of wheelchairs and sports for the
2. Harmony with the environment
•Protection of local environment
physically challenged. The organization makes efforts to
•Protection of global environment build the background in which physically challenged
Corporate culture Asians live on their own, and support the aspects of
Creation of a culture in which every associate participates in sports and education. Up to now, WAFCA has conducted
respective activities
supportive production, repair, and donation of wheelchairs
in Thailand and the neighboring countries. In fiscal 2006,
Promotion structure WAFCA hammered out a new fiscal policy to enhance its
In 1990, DENSO organized the “Social Contribution activity throughout East Asia. From July 2007 onward, in
Committee” (Secretariat: General Administration Dept.). cooperation with DENSO, WAFCA will support the
Since then, the committee has counseled and discussed establishment of a wheelchair factory in Beijing, China
on respective corporate policies and plans, and the results and starts a donation activity in the country.
of assessment. The Company is particularly pours its Also, with the aim of permeating sports for the physically
efforts to enhance the original programs and to build a challenged, every year DENSO holds a friendship game
participative climate among associates. As such, DENSO for wheelchair basketball which is jointly sponsored by the
addresses the key areas of “Hitozukuri” (welfare for the Company and Aioi Insurance Co., Ltd. In fiscal 2006,
physically challenged and development of youth) and among China, South Korea, and Japan, the first
“Harmony with the environment.” The Company “DENSO/AIOI CUP WAFCA East Asian Wheelchair
formulates the annual plan for corporate citizenship Basketball Friendship Game” was held (August, in
activities, thereby systematically promoting the plan. Also, Nagoya, Aichi, Japan). 170 associates of the Company
DENSO collaborates with highly specialized NPOs and voluntarily supported its administration. Besides, DENSO
through the projects of such NPOs the Company makes supported the DENSO CUP INAS-FID Basketball World
efforts to address various social issues. Championship 2006 (hosted by the International Sports
Federation for Persons with Intellectual Disability) which
•Promotion structure
was held from September to October in 2006.
Society (Stakeholders)
Social contribution of individual associates
Corporate citizenship
Spread out voluntary programs Volunteer activity
General Administration Section of general Individual associates

Dept. affairs at each plant
Specialized organization In charge of DENSO ‘Heartful’ Clubs
seeking to promote promoting the Support (Groups comprising voluntary associates)
activities of corporate activities at each
citizenship and volunteer plant
Social Contribution Committee

(Counsels and discusses corporate-wide direction) Repairing wheelchairs (Thailand) First WAFCA East Asian Friendship Game

URL Corporate citizenship activities http://www.denso.co.jp/csr/social/index.html URL
(2) Supporting community welfare facilities and Harmony with the environment

self-reliance of the physically challenged DENSO conducts many activities for environmental
Since 2002, DENSO has continued the donation of used conservation such as: an environmental education
personal computers. The aim of this activity is the program for children named the “DENSO Eco-Ranger
contribution in creating job opportunities for the 21;” the protection of environment around the plants of
physically challenged and the support for the efforts of the Company; the protection of precious flora and
non-profit organizations. In the activity, the used fauna; and the clean-up.
With the Global Society and Local Communities

personal computers collected from group companies in
Japan are cleaned and tested at DENSO Taiyo Co., Ltd. (1) DENSO ECO-Ranger 21
(see p. 31), and then donated. In fiscal 2006, 250 The “DENSO Eco-Ranger 21” started in 2001 as a
computers were collected from eight group companies in hands-on educational program in plentiful local nature
Japan and donated to 198 organizations. The computers or at the biotope in DENSO’s plants. This program is
are used in the instruction of personal computers for the targeted to children who will bear the future. In this
people with disability and the transcribing in Braille. program environmental specialists and citizens involved
in local environmental activities are invited to give
Development of youth lectures. In addition, many associates voluntarily
Amid the public opinion on the dislike of science among participate in this program. In fiscal 2006, this program
the students at elementary and junior high school in was conducted in eight cities of Aichi and Mie
Japan, DENSO continues holding events to provide the Prefectures, Japan and around 300 children participated
experience of science and technology with attraction in the program.
and profundity.
(1) Support of the Young Invention Club

The activities of the “Young Invention Club,” which
fosters children’s creativity and interest towards science,
are thriving in the Mikawa region of Aichi Prefecture,
Japan, in which the plants of DENSO are densely
located. To instruct handiwork, many associates
voluntarily participate in the Invention Clubs in Kariya DENSO ECO-Ranger 21 (Anjo course: Aichi, Japan)
city and Nishio city, both in Aichi Prefecture, Japan. As
such, DENSO guides the fun of monozukuri.
(2) DENSO Eco-Point system: DECOPON
(2) DENSO summer school of monozukuri In December 2006, DENSO started a unique Eco-Point
Every year, the facilities of the DENSO Technical College system named “DECOPON” with the aim of promoting
(Anjo City, Aichi, Japan) are opened to let local students, environmental activities among associates and their
ranging from elementary level to high school level, families. For more details, please
experience the attraction of monozukuri. Some 15 refer to the “DENSO CSR
kinds of lectures on handiwork and experiments are Challenge” section. (see 17-18)
held. In fiscal 2006, about 1,500 participants enjoyed
making tabletop-size bipedal robot, key-holder, and
more. The associates and retirees of DENSO, as well as
the instructors and students at the DENSO Technical
College, voluntarily
instructed the lectures. (3) DENSO Green Project
Together with citizens, DENSO is working on the
“Greening to Harmonize with Community.” Many
associates and their families voluntarily participate in this
project. For more details, see the “Coordination with
society” section. (see p. 65)
Summer school of monozukuri

Support of volunteer activities by V O I C E

associates
DENSO has established the “Volunteer Support Center” Volunteering to repair
to support volunteer activities by its associates. It wheelchairs
provides information by in-house magazines, intranets, As I empathized with the activities of
WAFCA, every year, in Thailand and in
and the Internet. Also, the Company has furnished the
Laos, I repair wheelchairs and
systems of “Matching Gifts”*1, the ‘Heartful’ Fund, and customize them by the degree of
the awarding*2. As such, DENSO strives to encourage disability. I have seen the villagers who
volunteer activities. had acquired my skill following the
examples. I have heard such voice that
*1 A system in which, so far as an external public organization for which an associate
“I have owned a wheelchair and it has
donates personally or in group is qualified by the Company, the Company adds
made the way for schooling.” This is Quality Control Department
donation in the same amount as that of the associate.
*2 A system in which the Company awards individuals or groups which actively, as well such a heartwarming experience. Kenichi Nobata
as continuously, make contribution to society through volunteer activities.
“Hitozukuri from monozukuri”

(1) The DENSO ‘Heartful’ Club at Invention Club
The DENSO ‘Heartful’ Club is a membership club which
I have been continuing handiwork
consists of voluntary associates. The club is organized instruction at the Invention Club in
by plant and conducts the activities cohered with Nisho city for 20 years. I guide children
respective local communities. (Current membership: the attraction of monozukuri, as well as
1,519 associates). In fiscal 2006, at the “General Meeting such etiquette and rules as the worth of
tools and clean-up. My greatest
of DENSO ‘Heartful’ Club,” 30 NPOs and volunteer pleasure is to see the children growing
groups displayed their booths and associates and local as a person through the process of Air-conditioning
drawing, thinking, and creation. Manufacturing Dept.1
citizens sought to exchange there.
Kiyoshi Miwa
(2) ‘Heartful’ Fund Growing together with the
This is a fund that accumulates the donations from ECO Rangers outdoors
associates and the deduction in units of 100 yen from the My environmental awareness was
greatly changed, as I was surprised and
monthly pay or bonus of the applied associates. The excited at the ecology of nature and
funds is expended for the running cost of the NPOs or creatures from the viewpoint of children.
the volunteer organizations, in which the donated I perceived as real the serious meaning
of reducing CO2 emissions. It is not a
associates are involved, and for disaster relieves. From
mere theory. This is a proof of my
fiscal 2006, the scope of donators for the fund was growth through volunteering.
Electronics Device
expanded to include those who at group companies. Manufacturing Dept. 2
Toshihiro Okamura
•Major results for fiscal 2006 (Associate participation rate 14%)
The DENSO ‘Heartful’ Club membership 1,519
The ‘Heartful’ Fund membership 2,732
Donation and relief from the Fund
around 8 million yen to 18 organizations
The DENSO Group Community
The DENSO Eco-Point system membership 1,956
Service Day
Matching Gift applications 523
DENSO, which spreads out its business in 32 countries
Volunteer activity award recipients 2
around the globe, considers the importance of the
corporate citizenship activities in step with local
•Corporate citizenship expenditures in fiscal 2006 (DENSO Japan) communities. Also, the Company believes that the
proactive participation of its associates in these activities
Welfare
Local communities
and others 21% leads to the expansion of their perspective and to the
37% progress in their social abilities. Following such policy, in
Total: 2004 the group companies of DENSO worldwide chose a
Development of youth
1,374 million yen 23% day for “Community Service Day,” thereby setting their
own “DENSO Group Community Service Day.” On the day,
the activities of corporate citizenship have been
Art and culture 14% Environment 5% conducted. Now, under the slogan of “Turn Compassion

URL DENSO Group Community Service Day http://www.denso.co.jp/SOCIAL/heartful_day/ URL
into Action,” associates conduct a wide variety of associates conducted community service activities in such

contribution activities. In fiscal 2006, 67 out of 102 group areas as environment, welfare, and education.
companies (participation rate 66%) and the total 16,800
With the Global Society and Local Communities

Focus Hope Walk (DIAM: the U.S.A.) Thanksgiving meal provision Visiting “Children’s House”
Participants walked for three miles in Detroit, (DSCA: the U.S.A.) (DSKR: Korea)
calling for “human rights, equal opportunity, and A four-member family portion of food basket The associates of DSKR visited a facility for
the reduction of racial discrimination, inequality, containing a thanksgiving meal was delivered to underprivileged children in Seoul and deepened the
and poverty.” DIAM associates participate in it disadvantaged families in Long Beach, California. exchange through clean-up activity and playing.
every year, and DIAM will donate 200 thousand 100 associates participated in this activity. Also, DSKR donated 1.1 million won of charity.
dollars between 2004 and 2008. (October 2006) (November 2006) (December, 2006)
Free wheelchair repair service (DENSO Clean-up of road (DNTW: Taiwan) Japanese culture demonstration at an
group companies in Thailand) DENSO Taiwan conducted a clean-up activity on eldery home (DNEU: The Netherlands)
48 associates from 5 group companies in Thailand the road around its plant with a length of 2.5 Japanese food, tea, calligraphy, and music were
checked and repaired some 70 wheelchairs kilometers. Local residents pleased, saying, “It introduced to the residents of an elderly home
donated by WAFCA to support people of looks pretty and is very comfortable now.” facility in Weesp. 10 associates at DNEU
economically disadvantaged and of physically (October 2006) volunteered to participate in this event. (October
challenged, who live in Chaiyaphum Province, 2006)
Thailand. (December 2006)
Lunch at hospital (DNMX: Mexico)

DNMX conducted a charitable activity in which
sandwiches and tacos were served to the families
who were outside a public hospital, worrying about
the condition of their hospitalized family member.
(June 2006)
Tree donation and New Year’s

Kariya Green Walk (DENSO Japan: Greetings (DNTR, Turkey) Charitable activity on Christmas Day
Aichi Pref., Japan) DNTR donated 200 trees through “The Turkish (DIAS & DISP: Singapore)
In order to make contribution in the environmental Foundation for Combating Soil Erosion, for 11 associates at DIAS and DISP paid a visit to the
beautification of Kariya City, 310 associates made Reforestation and the Protection of Natural MINDSville@Napiri - an accommodation facility for
efforts together with local citizens to clean up the Habitats.” DNTR also sent its suppliers a New children and adults of mentally challenged and
City, plant seedlings (1,600 in total), and make the Year’s Greeting card which certified the tree deepened the exchange. (December, 2006)
Green Map. (November 2006) donation. (December 2006)
No Garbage Activity (Anden Co., Mochi (rice cake) pounding party (DENSO Water source forest preservation activity in
Ltd.: Aichi Pref., Japan) Airs Corporation: Aichi Pref., Japan) Asuke, Japan (DENSO Unity Service
305 associates participated in the activity of picking The history of exchange between DENSO Airs Corporation: Aichi Pref., Japan)
up garbage around the plant in Anjo City and Corporation and the Toyokawa Mentally It was the third year of showing the thanks to
Okazaki City. The participants collected and sorted Challenged People Nurturing Association has been waters and the gratitude to the forest in the area.
the the garbage such as cans, bottles, and lasting for10 years. The pounded mochi was The activities included tree-thinning, bridge-building,
cigarette butts, scattered over sidewalk, shrubbery, delivered to a child welfare facility “Kokiryo.” and step-building on a steep slope. Also, for the
or gutter. (December 2006) families, the bench-building and mushrooming
were conducted. (October, 2006)

Communications for CSR
DENSO finds it important to confront the issues faced by

a society and to probe the way for solution, while
deepening the dialogs with many stakeholders. Thus, the
Company sets a variety of occasions and opportunities
for communication.
[Associates]
DENSO is striving to build a climate in which
associates exercise their maximum potential
[Customers]
and work vigorously through honest dialogs
Founding the four pillars of “quality,
and discussions at their workplaces. Also,
technology, service, and customer response,”
the Company listens to the voices reached [Shareholders and Investors]
DENSO is striving for the trust and
to the Motivation Survey and the Business DENSO discloses business and financial
satisfaction of customers by enhancing the
Ethics Hotline. The Company reflects them information promptly, as well as precisely, to
opportunities for gathering requests and
into the measures of improvement in allow its shareholders and investors a
opinions of customers. The Company
respective systems, for instance. long-term stable investment. Also, the
reflects the requests and opinions into the
Company is striving for an interactive
development of new products and services. [Opportunities and means of dialog]
•Interview with superiors, Business Ethics Hotline,
communication with its investors through
[Opportunities and means of dialog] counseling, Motivation Survey proactive IR activities.
•Customer Service Desk, customer desk at service •Labor relation forum at workplaces, Associate
stations Relations Reviews [Opportunities and means of dialog]
•DENSO Gallery (a display hall), technical •Various in-house activities, intranets, in-house •General Meeting of Shareholders; information
exhibitions, environmental exhibitions magazines meetings; factory tours; motor shows; IR Fairs
•Website (Information on products, services, and •CSR Forums •Website (investor information)
technologies) •Business reports, annual reports, securities reports
•Product pamphlets, technical reviews
Associates
Shareholders
Customers and Investors
DENSO
Group
Global and
Suppliers local communities
[Suppliers]
Based on our “Open-Door Policy,” DENSO [Global and local communities]
broadly discloses its procurement policy. As a member of local communities, DENSO
Also, the Company is promoting fair continues making efforts to solve social
transactions, while mutually deepening issues through the activities of
communications through the DENSO environmental conservation and corporate
Suppliers Convention, technology citizenship.
exhibitions, and supportive activities.
[Opportunities and means of dialog]
[Opportunities and means of dialog] •Service desk at plants
•DENSO Suppliers Convention, DENSO HISHO-KAI, •Regional meetings, factory tours
technology exhibitions •Corporate citizenship activities, volunteer activities,
•Website local exchange events
•Supportive activities, surveys, Business Ethics •Corporate citizenship reports, website (CSR)
Hotline

Dialogs with stakeholders “Stakeholder Dialog”
For years, DENSO has held the “Open House.” This

has allowed individuals of different standpoints to look
around the efforts of DENSO from their viewpoints.
Thus, this event has been an occasion for finding new
Communications for CSR

issues through dialogs. In fiscal 2006, when the fourth
time of this event was going to be held, its name was
Opinion exchange Tour of the DENSO Engineering and
revised to the “Stakeholder Dialog.” The event was held Technical Skills Training Center
anew emphasizing worksite tour and opinion exchange Details are shown on the following website.
with regard to the activities of CSR. The Company URL “Report on DENSO Stakeholder Dialog” (in Japanese)
received participants on its website and welcomed 25 http://www.denso.co.jp/ja/csr/environment/dialog2006/
participants, more than the previous time. DENSO was Date : February 27 and 28, 2007
pleased to have many opinions with regard to corporate Participants : 25 (6 students, 1 supplier, 3 non-profit organization
representatives, 9 business people, 6 others)
citizenship, environmental conservation, and respecting Contents: Explanation on the activities of CSR at DENSO; Tour of the
associates. The Company will employ these opinions DENSO Engineering and Technical Skills Training Center; Tour of the Anjo
plant; Opinion exchange
and suggestions in its future efforts. Some of them Facilitator: Hideto Kawakita, the CEO of IIHOE, International Institute for
have already reflected in this report. (see p. 67) Humans, Organizations, and the Earth
Occasions of awareness-raising and dialog for associates “CSR Forums”

Since fiscal 2006, DENSO has held CSR Forums to diffuse reflect them afterwards. The forums comprise a series of
corporate-wide the idea of CSR at the Company and its themes. The details and the survey results of the forum are
activities of CSR. The forums have also been the occasions carried in in-house magazines, thereby drawing on to raise
to listen to the opinions and suggestions of stakeholders. to awareness and improve respective activities.
1st: Opening forum (April 13, 2006) 3rd: Disaster prevention forum (September 19, 2006)
Announced the idea of CSR at DENSO Increased responsiveness and raised
and declared the start of respective awareness for the assumed Tonankai
activities Earthquake
•Announced the “DENSO Group Declaration of •Held lecture by expert: “Preparing for the coming
Corporate Behavior” and the “Code of Conduct big earthquake”
for DENSO Associates” •Held panel discussion by experts, representative
•Released the activity plans by area of other companies, and representatives of
•Held lectures by specialists and the persons at DENSO associates
companies preceding in CSR Participants: Associates of DENSO group in Japan
Participants: Associates of group companies (members of Risk Management Meeting,
(directors, managers, CSR risk managers) (around 300 participants)
Leaders) (around 390 participants)
4th: Business ethics forum (October 2, 2006)
Raised the role awareness of persons in
2nd: Corporate citizenship forum (July 16, 2006) charge of compliance affairs
Instilled the activities of corporate •Held the lecture by a lawyer: “Management for
citizenship at DENSO and raised preventing wrongdoing”
awareness of participation in the activities
Participants: Associates of group companies,
•Held lectures by experts
Compliance Leaders (around 350
•Held a panel discussion by experts, persons at
participants)
companies preceding in corporate citizenship,
and representatives of DENSO associates
•Reported the activities of DENSO ‘Heartful’ Club 5th: Women’s Forum (December 11, 2006)
Participants: Associates and their families of Furthered mutual understanding between
group companies, citizens, management and female associates
representatives of NPO (around •Held the lecture by the person in charge at a company
390 participants) preceding in the success of female workers
•Held panel discussion by lecturer, managers and
female associates at DENSO Japan
Participants: Associates of DENSO Japan
(managers, female associates)
(around 370 participants)

Environmental Report
Promoting ECOVISION 2015 Globally
As the Kyoto Protocol’s first commitment

period (2008-2012) for reducing CO2
emissions nears, the move to prevent
global warming has been accelerated and
the governmental moves, as well as the
discussions over initiative, have surfaced.
On the other hand, the expectations for
energy-efficient Japanese technologies
Executive Vice President
have been growing with the aim of the Shinro Iwatsuki
fundamental solution for global warming. Chairperson
Environment Committee
Under these circumstances, we at DENSO
made efforts during the first year of the “Environmental Action Plan
2010” based on the “DENSO ECO VISION 2015,” an environmental
guide to realize a sustainable society. In the action plan the
group-wide issues to promote are corresponded to “Prevention of
Global Warming,” Resource Recycling,”and “Control and Reduction of
Environmentally Hazardous Substances.” Of which, the “Prevention of
Global Warming,” a particular challenge, has started spreading out
globally, encompassing our supply chain.
For products, the Company has introduced the Environmental Factors.
Also, the technological innovation for the main parts of gasoline
vehicles, diesel vehicles, and hybrid vehicles has progressed.
With regard to manufacturing, substantial progress in the activities of
energy saving and zero emissions at overseas group companies was
seen. An energy-saving technology spread out to the site in Malaysia
was approved as a “Project of Clean Development Mechanism” by the
Japanese government. Afterwards, DENSO plans to further the
reduction of CO2 emissions globally.
Meanwhile, some issues remain. That is, in Japan, the Company did
not accomplish its restrictive target for CO2 emissions because the
increase in production caused more CO2 emissions than those
reduced.
From now on, with our spirit of Collaboration, we will work on
innovative technologies tied to the environment whereby we will
accelerate our environmental activities in all areas, deepening the
coordination with more stakeholders.

Highlights of activities for fiscal 2006
Environmental management Eco management

Formulated five-year environmental action EPA awarded DMMI (the U.S.A.) Revised Green Procurement Guidelines
plan at 170 group companies DMMI was honored by the United States The procurement guideline has enhanced its
Based on the “DENSO ECOVISION 2015,” 170 Environmental Protection Agency (EPA) with the scope of companies and guideline items, to seek
group companies of DENSO have formulated a Performance Track Award for its exceptional to strengthen the coordination with business
five-year environmental action plan until 2010. environmental improvements. partners.
f gl o b a l w
i on o ar m
en t
ev i ng
Pr
Eco Eco
Envi
management products
ronmentally hazard
cycling
Eco Eco
s re
friendly factory
ous
ce
Highlights of the activities for fiscal 2006

ur
su
so
sta
Re nc
es
P45 P45 P46

DENSO ECOVISION 2015 Honored with the Performance Track Award Green Procurement Guidelines
Development and designing Eco products
Formulation and introduction of Development of world’s first “Electric VCT” Improvement in performance of
Environmental Factors for Products The electric VCT electrically controls VCT components for new hybrid vehicles
In partnership with the Japan Auto Parts Industries (Variable Cam Timing) which optimizes the Due to the world’s first original cooling
Association, DENSO has developed the intake/exhaust valves of an engine. The electric technologies, the PCU (Power Control Unit),
“Environmental Factors for Products.” With the VCT has improved power, fuel efficiency, and which is indispensable to increase the output,
factors, the environmental performance of performance on purifying exhaust gases. added its performance, while cutting its size
products is quantitatively assessed. The factors Intake Camshaft
and weight.
Power device
have been VCT in between
introduced Motor
Roller cooling tubes
within the EDU
Company.
Double-sided
Plate Spiral cooling tube in
layer structure
P54 P55 P55
Seminar on the Environmental Factors for Products Electric VCT PCU for hybrid vehicles
Manufacturing and logistics Eco factory
Promotion of building Perfect Energy Factory The first accomplishment of zero emission among Extensive spread-out of modal shift by rail transport
Aiming at the prevention of the global warming, group companies in North America by DNMX (Mexico) Aiming at reducing CO2 emissions from
DENSO sought to spread out energy-saving Due to a coordinated promotion of recycling with logistics, DENSO has increased the number of
technologies and to promote the introduction the government and the introduction of food railway delivery between the sites in Aichi
of co-generation facilities. scrap composting brought in from DENSO India, Prefecture and Kitakyushu City, Fukuoka
DNMX has accomplished zero landfill. Prefecture, both in Japan.
P60 P62 P64

A co-generation facility in Daian Plant An environmental protection organization awarded DNMX Modal shift by using rail transport
Coordination with society Eco friendly
Promotion of the “DENSO Green Project” in DMHU (Hungary) honored with Overseas group companies published their
harmony with communities environmental prize for the second time first environmental reports
DENSO has afforested the periphery of the In recognition of contribution in environmental Following the group companies in Hungary and
Nukata Proving Ground as the “DENSO Forest.” conservation through school education Spain, a group company in the U.K. published
Also, the Company has promoted the greening programs and clean-up activities, DMHU was its environmental report whereby DENSO
around its plants, as well as alongside motorways. awarded afresh from the state. sought to enhance the information disclosure.
P65 P66 P66

The DENSO Forest in Nukata Environmental staff received anew the prize Environmental report of DMUK (the U.K.)

Environmental Management
Eco Management
DENSO is oriented to create an advanced automotive five-year action plan named “2010 Environmental Action
society and to contribute in building a sustainable Plan (the 4th)” with specific goals. The efforts for the plan
society. For these sakes, the Company reduces the at all group companies have been accelerated.
environmental impact of its all business activities.
DENSO aims to be a corporate group which (2) Spreading out consolidated environmental
possesses the environmental efficiency and the management globally
resource productivity of the world’s top tier. In order to promote the efforts of DENSO group as a
whole, the Company shares environmental policies and
Major results for fiscal 2006 (DENSO ECOVISION) guidelines with companies in consolidation*, sets
•Formulated a five-year environmental action plan at 170 group common issues, and spreads out a consolidated
companies consolidated for environmental management environmental management. In fiscal 2006, all 170
•Strengthened promotion structure overseas by establishing anew the companies listed in the annual plan of Company have
China Environment Committee formulated a five-year plan for environmental action to
•Revised the Green Procurement Guidelines and strengthened the spread out the“DENSO ECOVISION 2015” on a global
coordination with business partners
basis.
•Promoted the development of environmentally-conscious products
* The companies in consolidation for the environmental management at DENSO exclude
that contribute to environmental improvement the companies that were newly established in cument year or that have not passed
•Formulated a medium and long-term scenario to reduce greenhouse certain period of time after the managerial involvement of DENSO. Therefore, the number
gases from all of its business segments of companies consolidated for environmental management differs from that for the
purpose of financial reporting.
[Policies and guidelines shared within DENSO group]

DENSO’s environmental management •Share basic policies and action •Organize the Environment
DENSO recognizes that the management which guidelines Committee
emphasizes the environment “will bring the creation of a •Formulate and spread out action •A shared system for environmental
new action style for a company in the 21st century.” As plans information
such, aiming to be in harmony with society and to realize •Acquire ISO14001 certification •Environmental accounting
a sustainable society, the Company is oriented to be an
environmentally-leading company, continuously working [Seven items to make common efforts]
on it with the spirit of Collaboration. 1. Reduce wastes
2. Reduce environmental wastes from factories
3. Prevent global warming (reduce CO2)
(1) DENSO ECOVISION 2015
4. Establish an environmental management system (ISO 14001)
To promote environmental management, DENSO has set
5. Implement preliminary environmental assessment for products
the medium and long-term goal of the “DENSO
6. Spread out green procurement
ECOVISION.” The vision has been shared with group
7. Streamline logistics
companies and it has reflected in their environmental
action plans. When the Company formulated a long-term
T OP I C S
plan from fiscal 2006 to 2015, it re-examined global
environmental issues and a desirable automotive society. DMMI (the U.S.A.) honored with Performance Track Award
Then, the Company posted the three main themes of
DMMI, a DENSO group company in the U.S.A., was presented the
“prevention of global
•DENSO ECOVISION 2015 Performance Track Award by the United States Environmental
warming,” “resources Protection Agency (EPA). DMMI was recognized for its performance
i on o
f g l o b al w a recycling,” and of environmental activities in fiscal 2005 (reduction in wastes,
e nt rm
greenhouse gases, and water usage) and its support in water source
rev i ng “control and
P
protection. Among 496
Strengthen coordination Develop new technologies reduction of sites (or companies)
with group and products that
environmentally participated in the
Envi
companies, as well as partners emphasize the environment

Eco management Eco products hazardous “National Environmental
ronmentally hazard
substances.” In this Performance Track

c y c li n g
DENSO
program,” which EPA has
Enhance external coordination way, DENSO released promoted since 2000,
and exchange, together Reduce environmental
s re
with information disclosure impact of production globally the “DENSO those attained substantial
ous
rce
Eco friendly Eco factory performance were

ECOVISION 2015.”
su
ou
sta
s
Re selected and awarded.

At the same time, the
nc
es
DMMI (the U.S.A) honored with the Performance Track Award
Company set a

Environmental management Subcommittee” was revised to the “Social Environment
DENSO has strived to proactively acquire and renew ISO Subcommittee.” By this means, DENSO will promote the
14001 certification on a global scale, encompassing its coordination with society, that is, an eco-friendly activity,
manufacturing companies, as well as non-manufacturing more effectively and intensively.
companies (such as regional headquarters, sales
companies, service companies), comprehensively. This (2) Strengthening efforts in region centering China
is because that ISO 14001 is an effective tool for the The “China Environment Committee” was established in
Environmental Management (Eco Management)

Company to promote environmental management. The fiscal 2005 as a part for promoting the global environmental
followings are the state of ISO 14001 acquisition among management of DENSO. From fiscal 2006 the committee
the consolidated companies for environmental started its full activity. The committee is going to seek to
management. By the end of fiscal 2006, 74 (out of 100) promptly respond as DENSO group to meet the expectations
manufacturing companies have acquired the certification. of Chinese society, in which environmental issues are
So have 25 (out of 70) non-manufacturing companies. concerned amid a rapid economic growth. Specifically,
the committee has set policies and goals following the
(1) Strengthening promotion structure DENSO ECOVISION 2015, and has investigated 13 worksites
The “Environment Committee” has been established as on the compliance and the management structure for the
the highest decision-making body with regard to the environment and safety. The committee also held liaison
promotion of environmental management. It is chaired meetings for these worksites. As such, the committee seeks
by the director responsible for environmental to raise awareness of the environment and strengthen the
management. The attendance of the committee environmental management structure (see p. 52)
comprises directors, managing officers, presidents of
overseas regional headquarters, and persons who are (3) Strengthening coordination with business partners
responsible for environmental management at group The business activities of DENSO are maintained by the
companies. The committee convenes twice a year, and supply of components or raw materials from its many
there, respective policies are formulated, the state of business partners. For that reason alone, a close coordination
progress in related activities is examined, and specific with them is indispensable for the environmental efforts
issues coupled with their solutions are discussed. of the Company. As such, in August
In fiscal 2006, the “Environment Committee” was revised 2006 DENSO revised the “Green
in its position to a expert panel of the “CSR Promotion Procurement Guidelines,” the
Committee” (Chairperson: President Fukaya), in order to guidelines for its procurement activity,
promote environmental efforts integrating into group thereby asking wider range of
management from the viewpoint of CSR. In this way, suppliers to cooperate with the
DENSO strives to wholly optimize its environmental Company. In this way, DENSO
promotion structure whereby the Company aims at more requested its suppliers to expand and
effective operation. Also, following this change, the Green Procurement
strengthen their efforts. (see p.36)
name of the “Environmental Communication Guidelines
URL Procurement information
http://www.denso.co.jp/PURCHA/index.html
•Promotion structure
Product Environment Subcommittee Production Environment Subcommittee Social Environment Subcommittee

Formulate policies to reduce the environmental impact of products Formulate policies to reduce the environmental impact of production Raise awareness of associates and release information
Product Recycling Division Energy Division Promote in coordination with related committees
(Development Planning Council)
Plant Environment Division
Environment Project for environmentally Logistics Division Powertrain Control Systems Business Group
hazardous substances
Committee Meeting of environmental Electric Systems Business Group
planning officers at business groups Environment
Chairperson: Business Group Environment Committee Electronic Systems Business Group Committee of
Shinro Iwatsuki, Exchange group for the reduction each group
Executive Vice Summarize and promote environmental conservation activities within each business group Thermal Systems Business Group
of resource losses
President Information & Safety Systems Business Group
Exchange group for energy saving
DENSO Group Environment and Safety Committee in Japan Environment committee of each section
Notify group companies in Japan of policies and promote common assignments
Meeting of environment and safety officers
Meeting of officers for Regional Environment Committee
DENSO Group Overseas Regional Environment Committees North America Environment Committee
Promote regional activities corresponded to the characteristics of Europe Environment Committee Three divisions
such regions as North America and Europe
Asia Environment Committee
China Environment Committee

Goals and results Aspect Category Items in DENSO ECOVISION

(1) Reinforce consolidated environmental management
Spread-out of DENSO ECOVISION and the results of
activities for fiscal 2006
In fiscal 2006, the efforts to establish a group
environmental management were made for such key
issues as: (1) penetrating and diffusing the policies for 1.
Expanding group Environmental (2) Reinforce environmental partnerships with business
environmental efforts on a global level; (2) penetrating a environmental management partners
customer- credible environmental control, while management
(Eco
pre-empting risks; and (3) developing products together management)
with production technologies that lead to the prevention
of global warming, that is, the accomplishment of
reduction target for CO2. The following are the results by (3) Promote new businesses contributing to environmental
improvement
aspect.
Prevention of (4) Reduce greenhouse gases in all business fields
global warming
①In the environmental management, 170 group (5) Develop new technologies and products which contribute
to industry-leading fuel efficiency performance
companies formulated a five-year plan for
(6) Promote the development of parts for clean energy
environmental action. Also, the Green Procurement vehicles
Guidelines were revised and the strengthening of
environmental measures was requested among supply Prevention of
global warming (7) Develop new technology and products for various
energy sources
chain. 2.
(8) Promote efforts for car air conditioning systems to reduce
②In the development and designing, the “Environmental Development
global warming
and designing
Factors for Products” was formulated and introduced. that considers
performance (9)Utilize ITS* technology to support traffic rationalization
Also, the electric VCT* and the components for new improvement as *ITS: Intelligent Transport Systems
well as the
hybrid vehicles, to name but a few, were developed to environment Resource (10) Reduce the usage of resources
contribute the increase in fuel efficiency and (Eco products) recycling (11) Develop recycling technologies
performance of exhaust gas purification. At the same (12) Control and reduce environmentally hazardous
Control and substances contained in products
time, a reduction of such four environmentally reduction of
hazardous substances as lead, cadmium, mercury, environmentally
hazardous
and hexavalent chromium was promoted. substances (13) Reduce exhaust gas emissions to improve the air
③In the production, with the aim of preventing global quality in each country/region
warming group-wide, the building of factories General

(14) Establish an environmental assessment in the product
designing and development stages
compatible in energy saving and production efficiency (15) Reduce CO2 emissions in production and logistics
was promoted. While the target for the basic unit of •Global CO2 reduction
•CO2 reduction in logistics stage
CO2 emissions was accomplished, neither the target
for CO2 emissions in production nor that for logistics Prevention of
global warming
was accomplished. This was because that the 3.
Steady reduction
emissions of CO2 increased following the rise in of the
environmental
production surpassed those reduced by impact of global (16) Reduce greenhouse gases in production
corresponding countermeasures. On the other hand, production
(Eco factory) (17) Promote the effective usage of resources towards
the throughput of wastes was reduced, exceeding the recycle-oriented society
target. Resource
④In the coordination with society, the environmental recycling
action of Company associates was encouraged by (18) Reduce water usage
drawing on a Eco-Point system. Also, substantial Control and reduction of (19) Reduce discharge amount of object substances for VOC and PRTR
progress was seen in the activities of afforestation in environmentally *PRTR: Pollutant Release and Transfer Register
hazardous substances *VOC: volatile organic compounds
local communities. (20) Encourage environmentally-friendly life (eco-life) for
As a result, 42 out of 44 items have accomplished the Prevention of
associates
target. The details of efforts for the target which were global warming
not accomplished are re-examined, by which the

(21) Promote proactive information disclosure and
efforts are sought to be strengthened in fiscal 2007. 4. enhance mutual communication with stakeholders
Enhancement of
* A device for variable cam timing that optimizes the timing of opening and closing of the external alliances
intake and exhaust valves. and information (22) Enhance environmental education
disclosure
regarding (23) Enhance environmental and social contribution
environmental
action
(Eco friendly) General
(24) Foster external alliances towards the realization of a

sustainable society

Targets for fiscal 2006 Results Assess- Page Plans for fiscal 2007
ment
(1) Development and deployment of a five-year environmental activity (1) All 170 group companies formulated five-year plan 45 (1) To minimize environmental risk, expand and
plan at 170 consolidated companies for environmental management •Furnished the structure at non-manufacturing companies in Japan penetrate compliance auditing, set global
•Establish environment committee at each company •Held liaison meetings among consolidated group companies environmental standards, and get through at
•Install persons responsible for all environmental issues in Japan global environmental conferences
(2) Establish and evolve China Environment Committee •Audited and inspected 80 affiliate group companies inside
and outside Japan on environmental activities for products
(2) Established and evolved the China Environment Committee 46,52
Held liaison meetings for staff in China
(1) Development and deployment of the "DENSO Group Procurement (1) Formulated new Green Procurement Guidelines 36,46 (1) Spread out new Green Procurement Guidelines,
Guideline" corresponded to DENSO ECOVISION 2015 Held the DENSO Suppliers Convention extensively support suppliers of equipment and
(2) A survey on the substances of the parts or materials supplied from 1st-tier (2) At an explanatory meeting regarding 58,59 facility, spread out the guidelines to group
suppliers and a management by registering internal system (Product MDS) environmentally hazardous substances for companies overseas as well
Confirmation on continued building of environmental management system suppliers, standardized the uniform JAMA/JAPIA (2) Expand the purchasing scope of
(3) Expansion of purchasing of environmental products Sheet for investigating environmentally hazardous environmentally-conscious products to include
(4) Requirement for certification and renewal of “Denso Eco-service substances environmentally-friendly factory supplies
Station” in the establishment and assessment of service stations (3) Established a recycling system for toners --- (3) Spread out environmental betterment campaign for
Promotion of a certification rate of 100% to service stations (4) Certification rate: 97% 58 fiscal 2007
---

(1) Development of next household water heater using natural refrigerant (1) Discussed the development of next model (1) Develop and assess next models
(2) Donated 250 used personal computers to 198 organizations 38 (2) Continuingly promote and embed donation activities
(1) Establishment of the medium and long term scenario by the end of fiscal 2006 (1) Formulated the Carbon Management Scenario --- (1) Coordinately promote such as the Clean
Development Mechanism with each site
(1) Conception and plan of "a combination technology for managing heat (1) Assessed vehicles --- (1) Assess the development
and electricity" which contributes to a low CO2 emission vehicles
(1) Promotion of the development of motor generators and power control (1) Mass-produced miniaturized hybrid-related 55 (1) Promote mass-production of PCU components
components such as PCU for hybrid vehicles products and further the development of motor generators
(2) Development of control components for next environmentally (2) Develop products such as sensors and pumps for
-conscious vehicles next environmentally-conscious vehicles
(1) Cooperation with projects which correspond to the trend in new fuel (1) Participated in the All-Toyota Energy --- (1) Continuously participate in subcommittees
Subcommittee (2) Develop products available for new fuels
(1) Product development which uses refrigerant with low global warming potential (1) Assessed CFC substitutes --- (1) Develop air conditioning system using refrigerant with
(2) Research on extensive application and product development for low global warming potential
ejector cycles (2) Promote development of ejectors for air conditioning system
(1) Product development for a system that utilizes GPS satellite information (1) Developed a interactive systems for vehicle and infrastructure, 13-14 (1) Develop systems utilizing GPS satellite information
*GPS: Global Positioning System, which pinpoints a position on the earth using a satellite participated in a verification program for controlling traffic flow 56
(1) Selection of specific products and setting of respective targets (1) Selected specific products and set discrete targets --- (1) Develop products which realize targets
(1) Development for the use of plant-based materials to products (1) Assessed product assembly 57 (1) Discuss mass-production
(1) Confirmation and monitoring of non-content of four environmental (1) Analyzed 100% in Japan and 71% overseas (1) Analyze situation of overseas by the end of year 2007
(2) Pilot production of electronic and electrical components drawing on (2) Promoted lead-free soldering for electrical 58
lead-free soldering automotive components
(3) Switch of hexavalent chromium (black/green) (3) 99.8% in Japan, 92% overseas
(1) Development of next common rail injectors and new after-treatment systems (1) Developed next common rail injectors --- (1) Develop diesel engine control systems
(1) Industry-wide standardization of Environmental Factors for Products (1) Made standard of method for calculating Factors, and 54 (1) Attempt factors within companies
Conception of assessment procedure that draws on the factors incorporated operative method of factors into product EMS
(1) CO2 control target (1) Reduction in CO2 emissions: 96,000t-CO2 (1) CO2 Reduction: 96,000t-CO2
•DENSO Japan: Emissions, 117% or less, compared with year 1990 •DENSO Japan: CO2 emissions: 120% DENSO Japan: Emissions: 124% or less, compared with year 1990
Basic unit, 56％ or less, compared with year 1990 CO2 basic unit: 54%, compared with year 1990 59 Basic unit: 51% or less, compared with year 1990
•Consolidated: Basic unit, 80% or less, compared with year 1990 Consolidated: basic unit: 71% or less, compared with year 2000
•Consolidated: CO2 basic unit: 73%, compared with year 1990
(2) Global management of CO2 (2) Decide on the positioning of targets and the
(2) Formulated a global standard for energy saving 60
•Global Eco factory, Group operation of CO2 fund supportive methods
Spread out global PEF activities
(3) CO2 emissions in logistics: 41,300t or less of CO2 equivalent (3) Expand transport by Japan Railway service (for
(3) CO2 Emissions: 45,600t-CO2 64 Kitakyushu and Hiroshima in Japan)
•Modal shift in services to distant factories Deployed Japanese Railway service in transport
•Trial and assessment of measures for eco- driving (4) Raise load efficiency
for Kitakyushu
(5) Establish a structure to comprehend actual results at sites overseas
(1) Setting of removal equipment in semiconductor manufacturing (1) Placed 11 of gas removal equipment 61 (1) Place 18 of removal equipment
process CO2 Emissions: 61,000t-CO2 Emissions: 60,000t-CO2 or less
(1) Reduction of disposal from the manufacturing of current products and (1) Reduction in emissions: 2,900t (DENSO Japan); 62 (1) Continue reduction activities and management of results and trends
application of resource-saving processing technologies for next 4,300t (Consolidated) (2) Target the reduction of 1,200t or more (DENSO Japan)
products (2) Internationally circulated containers, improved 64 (3) Expand container circulation by placing standard
Reduction: 1,300t or more (DENSO Japan); 2,600t or more (consolidated) packing container
(2) Reduction of the usage of packing materials: 21,500t or less (4) Establish a structure to comprehend actual results at sites overseas
(1) Formulation and spread-out of a measure based on 5-year activity plan (1) Formulated five-year plan at all sites, 62 (1) Steadily promote reduction countermeasures
Setting of targets by region under the “guidelines by region” Began countermeasures at all sites (2) Spread out examples of reduction over the group
(1) Measures for discharge control at existent facilities (1) VOC discharge: 820t (DENSO Japan) 63 (1) Emissions of 804t or less
Incorporation of reduction technologies to new facilities and new Conducted basic assessment of alternative (2) Decide the introduction of after-treatment equipment
products materials
(1) Implementation and spread-out of the plans for equipping corporate cars (1) Rate of low-pollution vehicles: target: 80%, result: 88% --- (1) Accomplish 90% in the ratio of low-pollution
(2) Planning and proposition of measures on a short, medium, and long (2) Launched a Eco-Point system 17-18 vehicles
term bases to improve the convenience of commuting (3) Conceptualized a whole picture of “DENSO Green 65 (2) Diffuse the system within DENSO Japan and
(3) Planning and proposition of “DENSO Green Project” Project,” began afforestation at Nukata site, and further membership
proposed plans for motorway periphery (3) Promote the DENSO Green Project
(1) Enhancement of global information release deploying the website (1) Added contents to global website --- (1) Enhance global information deploying website
(2) Enhancement of reporting e.g., sustainability report (2) Published CSR Report and its digest version 66 (2) Enhance CSR Report
(3) More enhancement of the Stakeholders Dialog (3) Held the Stakeholders Dialog 42 (3) Enhance opportunities for dialog
(1) Spread-out of environmental education by organizational class (1) Held seminars by organizational class to increase skills 51 (1) Spread out environmental education by organizational class
(2) Holding of seminars for environmental staff overseas (2) Held staff seminars by region (China, Asia, North America) 52 (2) Hold the Global Environment Conference
(1) Support for spreading out activities of WAFCA in China and India (1) Supported WAFCA in launching a production 37 (1) Support the start-up of WAFCA production factory
Spread-out of a new program for youth education and afforestation factory in China. and youth education program
*WAFCA: (Wheelchairs and Friendship Centers of Asia) A NPO established byProposed youth education program
DENSO to support the physically challenged (2) Implemented DENSO ‘Heartful’ day in Japan 40 (2) Extensively embed the DENSO ‘Heartful’ Day in Japan
(2) Diffusion and embedment of DENSO ‘Heartful’ day in Japan (otherwise (otherwise the Community Service Day abroad) (otherwise the Community Service Day abroad)
the Community Service Day abroad) (3) Hosted the Eco-Ranger 21 38 (3) Continue and embed activities
(3) Continuation and expansion of the activities of ECO Ranger 21
(1) Promotion of activities of subcommittees at EPOC* for the prevention (1) Held subcommittee activities --- (1) Promote activities of subcommittees for global
of global warming and the energy saving warming and energy saving
*EPOC (The Environmental Partnership Organizing Club): A voluntary organization for (2) Opened the Eco-Park at Daian Plant 66 (2) Promote the DENSO Green Project
environmental activities of industry in the Chubu region, Japan
(2) Expansion of biotopes in factory premises

Material input and environmental impact Company increased the production efficiency and the
of output in business activities resource recycling. However, the input of material and
DENSO quantitatively collects the amount of input and energy rose. As to the output of environmentally
output of materials and energy, thereby drawing them hazardous substances, some of them increased
on to comprehensive and effective activities for following the rise in production, though, the Company
reducing environmental impact. In fiscal 2006, due to systematically promoted the reduction of environmental
a business expansion, production increased by 12% impact by each substance.
compared with the previous year. In response, the
INPUT OUTPUT
Resource and energy input Output of substances with environmental impact
Energy 28,025,244GJ( +2%) Greenhouse gases1,470,000t-CO2 ( +12%)

Manufacturing
Electricity 1,838,370MWh ( +8%) CO2 1,410,000t-CO2 ( +13%)
Heavy fuel oil (A) 8,185kl ( 70%) 5gases* 60,000t-CO2 ( 2%)
Kerosene 5,738kl ( 18%) *Greenhouse gases other than CO2
Light fuel oil 3,241kl ( +5%)
Propane 2,345kl ( 39%) DENSO Group
City gas 182,040,000m3 ( 2%) Production facilities Release to atmosphere 508.1t ( +10%)
Natural gas 87,720,000m3 (+318%)
LNG 8,468t ( − ) SOx 18.9t ( 39%)
Stamping
NOx 465.3t ( +14%)
Fly ash 23.8t ( +5%)
Welding
Chemical substances 1,507t (+16%) Forging and casting

Chemical substances 216t ( 1%)
Machining
Toluene/Xylene 88t ( 31%)
Water 14,650,000t (+17%) Painting Others 60t ( 9%)
Assembly
Release to water systems
Raw materials 629,000t ( +7%)
Waste water 13,020,000t ( +21%)
Metals 596,000t ( +12%) Chemical oxygen demand (COD) 96t ( 33%)
Non-metallic materials 76,000t ( +35%) Reused materials Nitrogen 77t ( +11%)
240,000t (+18%) Phosphorus 3t ( 57%)
(recycling rate 96%)
Office supplies (Copier paper) 953t ( +7%) Waste material 11,000t ( +48%)
Transportation fuel 2,339kl ( +7%)
Logistics CO2 emissions 103,000t-CO2 ( +57%)
Packaging materials 37,000t (+48%)
Legend DENSO Japan and group companies in Japan DENSO Japan and group companies in Japan and overseas year-on-year change shown in parentheses

Environmental auditing and Eco-Diagnosis audit are listed in the table below. Corrective actions
DENSO regularly conducts internal audits and external have been completed for all the cases. The Company
audits. The purposes of the audits are: continuous was not subjected to any fines or penalties inside and
improvement of environmental management system; outside Japan. Also, the Company faced no
prevention of environmental accidents or disaster at environmental lawsuits.
plants; and increase in the credibility of environmental •Environmental incidents and complaints
data to disclose. Concerns Group companies Group companies

DENSO Japan in Japan overseas
In the internal audit, the Company strives to increase the
Legal violations 0 0 0
accuracy by a self-audit with 400 items and by mutual Fines, penalties, lawsuits 0 0 0
audit among plants. At the same time, DENSO seeks to Incidents 0 0 0
increase the level of environmental management by Complaints 2* 0 0
implementing its unique “Eco-Diagnosis” to find out new * Complaint of forklift noise late at night, complaint of odor from a sludge dryer.
issues and extensively spread out the examples of •Environmental risk management system
excellence. Some examples found in the diagnosis are Daily check, Monitoring according to
Maintenance・Management voluntary criteria, Maintenance,
disclosed on the intranet. Besides, the Company is Drill of emergency response
pouring its efforts to nurture environmental auditors as a Check and inspection Sampling and assessment of facilities and
on environment operations in risk
part of its specialized education on the environment. As Precautionary measurements Investigation and check of risk handling
of March 2007, 396 auditors have been registered. measures
Daily check, Monitoring according to
In the external environmental audit in fiscal 2006, there Risk analysis voluntary criteria, Maintenance,
Drill of emergency response
were five of minor nonconformity and the Company took Countermeasures on hardware: Introduce equipment or facilities
Risk handling
corrective action immediately. Countermeasures on process: Penetrate work procedures
Minimization Emergency response, Collect and report information
•Environmental audit results (DENSO Japan) of crisis Occurrence of incidents
Disclose and file information, Preventive measure for recurrence
Target department/13 Number
Nonconformity (minor) 5
External audits
Observation 32 Report on purifying soil and groundwater
Improvement directives issued 41 DENSO has emphasized environmental conservation of
Internal audits
Points noted for improvement 114 soil and groundwater, and, since the 1980s, the Company
Internal auditors (in total) 160 has conducted voluntary investigation according to the
usage record of environmentally hazardous substances.
Environmental risk management This investigation has encompassed all of its factories and
DENSO has specified risks (such as environmental plants. In the event that a pollutant is detected exceeding
accidents, pollution, and violations of laws) subject to the the regulation value, the Company immediately files a
location and the business profile of each plant. As such, report with the government, while clarifying causes,
the Company makes efforts to prevent and minimize assessing environmental impact, and conducting
risks. In particular, DENSO emphasizes such risks as: purification.
“waste water and gas emissions that exceed voluntary In 1998, organic chlorine substance was detected at four
criteria”; “leaks of oils or chemical substances”; sites of DENSO. Their amount exceeded environmental
“pollution of soil or ground water;” and “complaints from standard level and thus purification measures were taken.
neighborhoods on such as noise.” In response to these The purification of soil was completed in fiscal 2001, while
risks, the Company conducts daily check, monitoring, that of groundwater is continued. The values measured
measurement, and yearly drill of emergency response. and the progress of purification countermeasure are
These activities are pursuant to the policies of (1) do not explained and reported to the government. The same
cause any anomaly and (2) minimize damage and information is reported and explained at community
correctly disclose information in the event. exchanges.
To promote risk management, DENSO has set its own criteria •Measured value of trichloroethylene Environmental standard level:
0.03 mg/l or less
that are stricter than environmental legislative regulations,
Location Groundwater concentration at site (mg/l) Current status
and has applied them inside and outside Japan.
Headquarters Less than 0.002 up to 1.334 Under purification
In fiscal 2006, to minimize risk at the sites overseas, the Ikeda Plant Less than 0.002 up to 1.119 Under purification
Company poured its efforts to uncover risks and issues Anjyo Plant Less than 0.002 up to 1.548 Under purification
by a compliance audit. The deviation from legislative Nishio Plant Less than 0.002 up to 0.514 Under purification
regulation level, complaints, and accidents found in the The substances were detected only at the locations listed above.

Environmental education Environmental accounting

DENSO has implemented environmental education in DENSO appropriately allocates its environmental
order that all associates continuously conduct activities management resources, as quantitatively comprehending
with a high environmental awareness. The program is the costs and effects of environmental conservation.
provided in accordance with organizational class and Meanwhile, as a tool for an efficient promotion of
specialty area, and is comprised of the education on the environmental management, the Company has deployed
environment in general and that on ISO 14001. In other the “Environmental Accounting” since fiscal 1999. The
words, the program corresponds to responsibilities, results of the environmental accounting are used not only
functions, and specialties of associates. To raise the as a reference for a continuous improvement of
attendance rate, an e-learning is deployed for the environmental activities, but also as the data for the
education on the environment in general whereby the information disclosure which allows stakeholders to
constraints on schedule or place of lectures are reduced. understand the Company. The “environmental
In the education by specialty area, the Company is pouring conservation cost” for fiscal 2006 substantially increased
its efforts to the “Seminar on Nurturing Leaders” for to 12.2 billion yen, 22% higher than the previous year. This
engineers. The seminar emphasizes the on-site education was because that, compared with the previous year, there
at the factories that deal with part-reusing or at the were the increase of: 9 billion yen in capital expenditure; 4
workplaces in charge of recycling. billion yen in labor cost for research and development of
On the other hand, at the plants overseas, DENSO products; and 1 billion yen in the cost for environmental
implements environmental education programs advertisements. These increases were in step with the rise
considering regional characteristics. Meanwhile, in investment for expanding production and strengthening
environmental officers at each company come to the research and development, amid a rising output of
headquarters of DENSO Japan for environmental seminars. vehicles worldwide. On the other hand, “environmental
•Environmental education in fiscal year 2006 conservation benefit” amounted to 11.9 billion yen, 47% or
Organizational class Total participants
3.8 billion yen higher than the previous year. This was
New recruits 964 because that, following the hike in price, the revenue from
Skilled workers in medium-level 597 the sale of recycled materials was increased by 3.8 billion
Assistant managers, team leaders 996 yen.
Managers (engineering) 96
Managerial level e.g., managers, general managers, plant managers 390 •Environmental accounting
Excluding group companies inside and outside Japan (Environmental conservation costs and value of environmental effects)
Total seminar hours : 5,581 Total participants : 3,043 (100 million yen)
700 664
T OP I C S 600
542
508
500
Held “Eco-Seminars” and “Eco-Tours” in the (519) (506) Costs
education for environmental engineers 400 (463)
Effects
In June 2006, as a part of events during the Month of the 300 280 Consolidated, inside
247 and outside Japan
Environment at DENSO Japan, the Company held the “Eco-Seminar”
for the selected 34 associates in product development and the 200 Cost of
(218) DENSO Japan
(200) 119
“Eco-Tour” for the selected 142 associates in manufacturing. The 100 81
47 60 70
Eco-Seminar included the lecture on the “Environmental Factors for
Products” introduced at DENSO Japan and the visit to a vehicle 0
‘02 ‘03 ‘04 ‘05 ‘06 (Fiscal year)
recycling factory at the ARBIZ Co., Ltd., Japan. In the seminar, the
associates learned about the development of environmentally- The increase of costs after 2004 is due to a revision in calculation criteria for research
conscious products and the methods of recycling. In the Eco-Tour, and development cost (a change in its range to include the costs of preliminary research,
the associates observed the examples of process improvement, pilot product development, and designing and development for mass-production )
which lead to energy saving, at the production lines of other
departments.
The participants
referred to the
examples for the
improvement in
their departments.
Eco-Seminar Eco-Tour

Global highlight
Activities of China Environment •Situation of business spread in China
Committee TDS
Aiming to lead the harmony of economic growth and TDE
the environment TDA
DICH
In 1994, DENSO started manufacturing car air TTB
GACTJ
conditioning systems and compressors in Shandong.

DMTT
Since then, the Company has increased its sites in TPE
keeping with the growth of the automobile industry in TAMC YSD
China. At present, DENSO’s businesses of TFDA DHMW
manufacturing, sales, and after-sales service have been JWCH
TACK
DMTI
spread out throughout the country, and about 7,300
associates work in such businesses. Meanwhile, the
Chinese government is speedily furnishing the DCS
legislations to improve environmental problems. SDFI
CQD
Amid such situations, in April 2006 DENSO set the
China Environment DMNS
Committee to promote TBFC DMGZ
the “ECOVISION 2015.” DJEC Regional headquarters
AGU Manufacturing companies
Thus, the Company Non-manufacturing companies
started its full-fledged
Green: those consolidated for environmental management
activities with the aim of Gray: Supportive affiliate companies (non-consolidated)
leading the environmental
aspect in the region. V O I C E
China Environment Committee
We promote environmental management
beyond the expectations of Chinese society
Pouring efforts to strengthen structure and develop
human resources, as uncovering issues
Amid a rapid economic growth, the
In fiscal 2006, as a first step, an on-site investigation
environmental problems which Japan
was conducted at eight manufacturing sites listed for have experienced are appearing in
the consolidated environmental management whereby China as well. The history has proved
respective issues and risks were sought to uncover. At that a company succeeds when it
precedes in environmental
the same time, the “Environmental Liaison Meeting,” responsiveness. At present, five of
which comprises persons in charge of the environmental DENSO sites in China have acquired
affairs at 13 sites in China, was launched. In the the ISO14001 certification. DENSO
meeting, the penetration of compliance, the will diffuse the environmental
technologies together with the Chairperson, the China
strengthening of management structure, and the promotion structure which the Environment Committee
development of human resources were discussed. Company has fostered. As such, Noboru Yamada
From fiscal 2007 onward, DENSO is going to steadily DENSO will respond to the DENSO (China) Investment
expectations of Chinese society. Co., Ltd.
spread out a PDCA cycle to accomplish seven targets
including “promotion of energy saving,” “reduction in
material loss,” “voluntary •Results of investigation (Number of sites)
reduction of chemical Measures required
Clear of to be
substances,” and Environmental factors problem On Improvement investigated
improvement required
“reduction of water usage,”
Air 7 --- 1 5
which are based on the
Water quality 5 2 1 5
Common Guidelines for Noise 8 --- --- 5
Group Companies General wastes 4 1 3 5
Wastes
Overseas. Special wastes 3 --- 5 5
A risk assessment activity at a site in China

Development and Designing

Eco products
DENSO finds an environmental aspect of advanced Also, as a leading member of the Japan Auto Parts
automotive society in the product manufacturing which Industries Association, DENSO collaborates on the
balances the “consideration of the environment” and investigation and the data provision for the standardization
the “enjoyment fulfilled with vehicle potential.” To of LCA by the Japanese Ministry of Economy, Trade, and
realize such manufacturing, with the advantage of Industry. Also, the Company collaborates on the data
prominent technological prowess, DENSO is striving to compilation for another LCA worked on by automakers.
reduce any environmental impact during the entire
lifetime of a vehicle. Meanwhile, the Company is Effectively reducing environmental
pursuing the product development to increase the impact from very beginning
functionality of vehicles as high as possible. In order to effectively reduce environmental impact during
a product life-cycle, it is important to reflect
Working on product life-cycle environmentally-conscious technologies at the very
In product manufacturing, DENSO conducts the beginning of product lifetime stage, that is, the
assessment on environmental impact encompassing the development and planning stage, by conducting
entire lifetime (life-cycle) of a vehicle, that is, from extraction preliminarily assessment of environmental impact in
of raw materials to development, production, delivery, and, successive lifetime stages.
through customer use, to recycling or disposal. Then, the Basing its environment management system for products,
Company specifies the life stages with large environmental DENSO sets developmental targets to increase fuel
impact, together with key issues. All of these findings are efficiency, raise recycling rate, and reduce the content of
drawn on to reduce the environmental impact. The “Life environmentally hazardous substances. These targets are
Cycle Assessment (LCA)” is an important tool to assess set to solve the issues of “global warming prevention,”
environmental impact. As shown in the flowchart below, “resources recycling,” and “reduction of environmentally
DENSO clearly positions the relationships of environmental hazardous substances.” The results of the efforts are
issues and a vehicle or its components, thereby spread out to the development of new products that
conducting development and designing. balance performance and environmental consideration.
•Environmental efforts on vehicles and DENSO products from lifecycle perspective

Environmental Efforts to reduce environmentally Development of substitute materials
issues hazardous substances Countermeasures for vehicles
Stage Environmentally- Recycling-conscious designs
of conscious designing
Waste Responses of DENSO
develop- issues Reduction of environmentally hazardous substances
ment Recyclable
designing Improvement of recyclability rate
Improvement of engine- Improvement of EFI,

Global Decrease of energy Energy saving Development of energy-saving components injection systems injectors for finer spray atomization
warming consumption
Reuse of CO2 Efforts to improve fuel efficiency of vehicles Improvement of Direct-injection Components for
Increase of fuel efficiency engine efficiency gasoline engine direct-injection
Ozone Decrease of specified CFCs Natural refrigerant (CO2) heat-pump water heater Variable valve- Variable valve timing
Development of air conditioning
depletion and CFC substitutes system using natural refrigerant timing mechanism (VCT)
CFC-free car air conditioning systems
Efforts to decrease Decrease of Decrease of refrigerant filling Diesel engines Common rail system
the global warming impact greenhouse gas usage
Stage of air conditioning systems Decrease of refrigerant leak Reduction of frictional
of use resistance in each
engine part
Efforts to purify exhaust gases of vehicle Hot-gas heating systems
Air Purification of Exhaust from Improvement of Highly efficient car
fuel-injection systems Common rail system for diesel engines Decrease of engine
pollution exhaust gases tailpipes air conditioning systems,
load by power-saving parts
DPF, monolithic substrate electric power steering
motors, and others.
Decrease of engine Emission from Purification by Catalyst, A/F sensor
Noise noise; improvement fuel systems chemical reactions
of mufflers and tires Emission during Reduction of running Decrease of air resistance
refueling Prevention of gasoline resistance and rolling resistance
emission into the atmosphere
Efforts to develop clean-energy vehicles Improvement of power Automatic transmission
transmission efficiency systems
Resource Development of Natural gas vehicles, hybrid vehicles, Battery ECUs, DC-DC converters,
depletion new power sources fuel cell vehicles electric compressors Reduction of body weight Lightweight parts
Decrease of congestions ITS

Technology for utilizing shredder dust Efforts to reuse automotive parts
Stage Waste
of Recycling of disposed vehicles Reuse of parts On-board ETC (electronic toll collection)
issues
disposal equipment, car traffic control system
Recovery and destruction of CFCs Equipment for reusing and recovering CFCs
Decrease of waste generation Food scrap processor

Establishing Environmental Factors for with the Basic Environment Law in Japan. Among the
Products variables for the calculation, the global warming potential
and the impact of environmentally hazardous substances
Major results for fiscal 2006 (DENSO ECOVISION)
are based on the values which are widely used as
•Established the procedure for the “Environmental Factors for standard. Also, striving for securing transparency,
Products” to increase product performance and decrease impartiality, and credibility, the entire life-cycle of a product
environmental impact throughout the product lifetime
is included in the scope of assessment.
Development and Designing (Eco products)

•Calculation method for Environmental Evaluation Factors for Products
(1) What is the Environmental Factors for Products? [Scoring of performance]
Eco-efficiency (1) Segment product performance
Reduction of environmental impact together with the (2) Give weight by score
Product performance (3) Assess results and sum up scores
increase in safety, driving performance, and comfort is (positive aspect)
= [Global warming: calculation of CO2 emissions]
demanded in the development of automotive components. Environmental impact
(1) Set assessment stages
(negative aspect)
materials -> parts-> production -> use -> disposal
As such, DENSO has made efforts to quantify the balance (2) Calculate CO2 emissions in each stage
of “environmental performance” and “product value,” (3) Sum up CO2 emissions in all stages
Express the comparative
advancement against [Resources depletion: Calculation of amount of materials used]
thereby deploying such quantification as a metric to conventional products in a (1) Calculate the mass of materials used following
factor (multiplier)
compare a conventional product with a new product in the Material Safety Data Sheet
(2) Calculate the usage amount of recycled materials
terms of environmental performance and technological Environmental Factors (3) Calculate the amount of recycled resources
(4) <(1) – (2)> + <(1) – (3)>
progress. These efforts have borne the “Environmental for Products
[Calculation of the environmental impact level of
Factors for Products.” Since fiscal 2005, the Company Eco-efficiency of new environmentally hazardous substances]
products (1) Investigate the content of target substances
has coordinately worked on the set-up of the factors with = following the Material Safety Data Sheet
Eco-efficiency of (2) Calculate the environmental impact by
the Japan Auto Parts Industries Association. In March conventional products substance based on a conversion table
(3) Sum up the impact of each substance
2007, the “Guidelines for Environmental Factors for
Products” were compiled to permeate the factors into In the calculation of the factors, the objectivity persuasive for a majority of people is demanded.
As such, the concept of the “Factors,” which has proposed since the 1990s by researchers
automotive parts industry. In December 2006, with the worldwide and the World Business Council for Sustainable Development (WBCSD), is applied.
recognition of “the set-up of the Environmental Factors for The “Factors” are calculated in a positive way by deriving the “eco-efficiency” of a product or
service, thereby positively assessing technological progress with the Factor X.
Products,” the Japan Forum on Eco-efficiency* awarded
the Japan Auto Parts Industries Association with “the (3) Introduction of the factors and future plan
Eco-Efficiency Award, of which the Incentive Award for From fiscal 2007, DENSO has started operating the
Promotion Activity.” Environmental Factors for Products. The Company is
*An organization to investigate, research, diffuse, and advocate the environmental efficiency. going to spread this out to the maximum possible number
An seminar on The representative of product development. In this way, the Company is
Environmental of the Japan Auto
Factors for Parts Industries going to find out new issues and seek to improve the
Products at the Association
Japan Auto Parts received an award factors. At the same time, DENSO is going to openly
Industries from the Japan disclose the data to business partners such as
Association Forum on
Eco-efficiency automakers, as well as the society, whereby the Company
strives for the recognition and permeation of the factors.
(2) The idea of calculating the factors Additionally, in order to facilitate the indication of
The themes of the factors are “global warming,” “resource environmental values of a product, the Company is
depletion,” and “emission of environmentally hazardous discussing on environmental labels such as “Green
substances.” These themes were selected in accordance Product Declaration” for the products that have reached a
certain environmental level.
•A trial example of the Environmental Factors for Products
As for a trial example, DENSO assessed the year
2002 model and the year 2006 model of gasoline
engine ECU. The basic condition of this assessment Product
is that the old model and the new model are
Old product (year 2002 model) New product (year 2006 model)
equivalent in terms of product functionality. The
Eco- Eco-
results of the calculation are as follows. In Product performance 15.5 efficiency 26.0 efficiency Factors
comparison with the old model, the new model is: Global CO2: 15.5/18 CO2: 26/17 1.53/0.86
1.8 times better in the global warming index; 1.6 warming 18kg =0.86 17kg =1.53 =1.8 times
times better in the resource depletion index; and 1.9 Environmental Resource Amount 15.5/538 Amount 26/580 0.045/0.029
better in the environmentally hazardous substance impact depletion used:538g =0.029 used:580g =0.045 =1.6 times
index. Hence, the improvement in environmental Environmentally
hazardous
Degree of 15.5/3500 Degree of 26/3100 0.0084/0.0044
technology has been quantitatively confirmed. substances impact:3500 =0.0044 impact:3100 =0.0084 =1.9 times

success in mass-production technology that allows a

Prevention of global warming precise machining at the micron level. The electric VCT
increased the power by 1%, the fuel efficiency by 3.6%,
Major results for fiscal 2006 (DENSO ECOVISION) and the performance of exhaust-gas purification by 21%.
This product is installed in Toyota’s “Lexus LS460,”
•Improved combustion efficiency by developing the world’s first
Electric VCT
which has been on sale since September 2006.
•Installed new PCU in hybrid vehicles * Variable Cam Timing
•Increased fuel efficiency by improving the efficiency of air conditioning

systems and heat storage systems (2) Improving performance of components for hybrid
•Researched new navigation systems that contribute the improvement vehicles
in traffic flow
The PCU is a crucial component that consists of the
“converter,” which raises the main battery voltage (288V)
Reducing CO2 by increasing fuel up to the maximum system voltage (650V), and the
efficiency “inverter,” which converts the direct current generated
(1) Developing world’s first Electric VCT by the engine drive into alternate current and controls
The combustion efficiency of an engine increases by the revolution of main traction motor within an optimum
intaking fuel-air mixture and exhausting combustion gas frequency. In recent years, as medium-sized vehicles
in an optimal timing. As a result, power and fuel become hybrid, the PCU which is smaller in size and
efficiency increase, while reducing exhaust gases. The higher in output is demanded. However, as to realizing
“VCT”* is a device which controls the opening and high output, the restraint of rising temperature has been
closing of the valves that allow these performances. the issue.
DENSO realized, for the first time in the world, the Confronting this issue, DENSO applied its unique
electrification of VCT by motor drive, instead of oil technologies in power semiconductor devices and
hydraulics control that has been used in conventional radiator manufacturing, whereby the new PCU was
VCTs. The electric VCT enables precise valve control at developed . In this PCU, the thermal resistance is
the engine starting and the low range of revolution, substantially reduced due to the downsized
which is difficult for the hydraulically controlled VCTs. semiconductor devices and the world’s first
The system was firstly resulted from the development of “Sandwiched cooling layer structure.” The output power
a key mechanism (the plate spiral) comprised by the per unit volume was increased by roughly 60% in
components with spiral grooves, and secondly from the comparison with the conventional model of the
•Function and structure of the VCT •Structure of cooling system for hybrid vehicles
Water
Camshaft Intake valve Transaxle
VCT (such as motor)
Exhaust valve Airflow
Radiate Special radiator Water Supply
heat for hybrid water
Intake pump
Exhaust
PCU (with double-

sided cooling tube)
Intake valve
Power device in
Absorb heat between cooling
tubes
Double-sided
cooling tube in
layer structure
Dissipate heat from both sides
•Mechanism of double-sided cooling
Power device in Double-sided cooling
Power device between cooling tubes tube in layer structure
Electric VCT [Conventional] Cool device from one side [New] Elements cool from both sides
Heat resistance: 0.5°C/W Heat resistance: 0.2°C/W

Company and, provided the output is the same, the realizes such high heat exchange performance.
product volume can be reduced by 30%, as well as the In January 2006, a new air conditioning system featuring
weight by 20%, compared with the conventional models this heat exchanger was installed in the Toyota
of the Company. “Landcruiser” (for sale in the Middle East and North
At the same time, the Company sought to improve the America).
radiator (heat exchanger), which radiates the heat of
water warmed by PCU, and the condenser in air (4) Improving traffic flow using ITS technology

conditioning system. Thus, a roughly 45% reduction DENSO has participated in a cooperative research on
(thinning) in the total size of the cooling module was the PRONAVI*1, which involves industry, academia, and
achieved. As of May 2007, this system has been government. The PRONAVI is the next navigation system
installed in Toyota’s “Lexus Hybrid LS600h/LS600hL.” capable of forecasting traffic jams and showing the
optimal travel route with reference to the past and
(3) Improving efficiency of car air conditioning system present data in probe information*2 (see p13-14)
A car air conditioning system compresses and liquefies *1 The name of a navigation system under a cooperative development in the “P-DRGS
the refrigerant by a compressor, vaporizes it in a cabin Consortium,” which consists of the Nagoya University, the Japan Weather
Association, and private industries
unit called evaporator, and dissipates the heat. This is *2 A technology in which each vehicle is considered as a “probe” in a traffic society
the mechanism of cooling. During this process, the and the vehicles are equipped with sensors so that they transmit data to be used to
avert such as traffic jams.
refrigerant reciprocates vaporization and liquescence,
while repeating the states of high or low temperature.
These two states of refrigerant are separately brought by T OP I C S
discrete pipes.
DENSO took note of this difference in temperature. Production of heat storage system for engine
Then, the company developed the “double-pipe internal warm-up has surpassed 300 thousand units
heat exchanger.” The heat exchanger integrated two If an engine is cold on its start-up, it functions less than its real
pipes, which had been separated in a conventional potential, and thus the engine in such condition increases the
refrigeration cycle, into one pipe which consists of inner concentration of hydrocarbons (HC)*1 in the exhaust gas, compared
and outer tubes. As a result, the cooling performance with a warmed-up engine. In order to improve this issue, in 2003,
DENSO, the Toyota Motor Corporation, and the Tiger Corporation
was increased by 5-12%. The length in which the two cooperatively developed the world’s first heat storage system for
pipes are combined as a double pipe is just 40cm, engine warm-up and the system has installed it in the Toyota “Prius”
though, a unique “spiral groove” on the inner pipe for sale in North America. In this system, a portion (three liters) of the
cooling water warmed during the driving is stored in the tank born
from heat retention technologies for thermos bottles. Then, the hot
•Structure of a double-pipe internal heat exchanger water at 65ºC or higher is supplied on next engine start-up, whereby
the engine is quickly warmed up. As a result, this system reduces
Double-pipe internal heat the content of HC in exhaust gas on engine start-up by 14%,
exchanger efficiently using the heat energy that has been wasted. In November
Liquid flow in spiral 2006, the production of this heat storage system has surpassed 300
grooves on inner tube thousand units.
Inner tube *1 It is generally understood that unsaturated hydrocarbons react with ultraviolet
Outer tuber ray and thus cause photochemical smog.
*2 Given the cooling water warmed to 85°C in a vehicle has left for 24 hours in
Gas flow in inner tube an ambient air temperature of 22°C.
•Heat-storage tank using thermos technology
Heat storage tank
Cutaway
section
Water pump

assured by the performance inspection comparable to

Resource recycling that for a new product. These products are shipped as
the “rebuilt” products. In fiscal 2006, about 70 thousand
Major results for fiscal 2006 (DENSO ECOVISION) units were shipped to the marketplace in Japan. Since
•Promoted research and development of plant-based plastic materials fiscal 2000, 320 thousand units of rebuilt products have
•Spread out assessment of plastic reprocessed from PET bottles been produced whereby the corporation has been
•Produced and permeated rebuilt parts contributing the product longevity and resource recycling.
Alternator
Improving recyclability
Both a long-time usage of components by the re-using
and an increase in recyclability of disposed vehicles are
important to effectively use raw materials. As such, for
the stage of product development and designing, DENSO
has set the target to apply the product structure easy to Before reconditioning After reconditioning
dismantle and the materials easy to recycle . In the URL DENSO REMANI Corporation http://densoremani.co.jp
meantime, the Company has been proactively working on
Controlled and reduced environmentally
the development of technology to retrieve materials from
used products. Besides, the Company has been making
active efforts to develop materials that do not increase
CO2 in the atmosphere through the incineration process Major results for fiscal 2006 (DENSO ECOVISION)
of thermal recycling. •Established a structure at group companies inside and outside Japan
to assure the non-content of environmentally hazardous substances
Researching plant-based plastics •Substituted hexavalent chromium contained in products
•Promoted the use of lead-free solder
The thermal recycling, in which heat energy is reclaimed by
incineration, is considered to be a mainstream of recycling Control and reduce environmentally
for plastic components. However, there is a concern, in hazardous substances
that thermal recycling would increase CO2 in the To increase the performance and maintain the quality, the
atmosphere. But, if a plant-based plastic were burnt, it environmentally hazardous substances, such as lead,
would not increase the total amount of CO2 in the cadmium, mercury, and hexavalent chromium, have been
atmosphere, unlike fossil fuel-based plastics. Also, the used in automotive components. However, once the
use of plant-based plastics would reduce the consumption components have been disposed at the end of their
of fossil fuel, which is concerned to be depleted. lifetime, such substances would harm human body, as
DENSO is currently making efforts to switch the main well as ecology. As such, since 2000, statutory
resins, such as polypropylene (PP), polyamide (PA) 66, and environmental regulations addressing the product disposal
polybutylene terephthalate (PBT), to plant-based plastics. stage have been set and strengthened. DENSO considers
Also, the Company is researching the mass production of the reduction and the elimination of these substances as an
the new plastics. urgent task. Thus, by means of substitution, the Company
In fiscal 2006, DENSO assessed and selected the possible is making efforts to reduce and eliminate not only the
alternative plant-based plastics. Also, the endurance regulated substances but also those of non-regulated.
assessment was conducted on some products with these
plastics.
•DENSO’s response to laws and regulations
Year 98 99 00 01 02 03 04 05 06 07 08
Extending lifetime of products by rebuilding EU-ELV Review Prohibited in principle the use of hexavalent chromium,
Efforts at DENSO REMANI Corporation Europe
Directive exemption lead, cadmium, and mercury (with some exemptions)
Enacted
Many of alternators (electric generator) and starters Enacted in Enforced in July
each country
removed from used automobiles can be sufficiently
Instead of legislation, set up End-of-Life Vehicle
functioned if their abraded components, such as brushes voluntary target of industry Recycling Law
Japan
and bearings, are replaced and refined. DENSO REMANI Japan Automobile
Manufacturers Association Enacted in July Enforced in January
Corporation (Anjo City, Aichi, Japan) reconditions such
Set up voluntary targets Reviewed voluntary targets
DENSO
products. The quality of the reconditioned products is

(1) Control structure for environmentally hazardous exempted from such regulation as the EU-ELV Directive,
substances DENSO continuously makes efforts to substitute solder
To control and reduce environmentally hazardous and phase the solder substitutes in to newly-designed
substances, a firm promotinal structure in coordination mass products.
with supply chain is indispensable. DENSO has set the
“Restrictions on the use of environmentally hazardous
substances to materials or products (DDS2004).” At the

same time, the Company has been striving to spread out
and re-penetrate the measures to prevent the market
Efforts in the stage of product usage
release of the four substances hazardous to the
environment (lead, cadmium, mercury, hexavalent Major results for fiscal 2006 (DENSO ECOVISION)
chromium), thereby eliminating such substances from •Strengthened the efforts on the certification system of the DENSO
any DENSO- brand products. Eco-service Station
As a part of the measures, in fiscal 2006 DENSO listed the
group companies, as well as the affiliate companies, which Certification system of the DENSO
are related to the designing and manufacture of DENSO- Eco-service Station
brand products (of which 32 in Japan, 48 overseas). Then In Japan, as to the after-sales service of DENSO, the eight
the Company paid a separate visit to these companies for regional sales companies and 691 service stations
the purpose of issue extraction, improvement instruction, (designated service stations and dealerships) coordinately
and supportive activity so that the Company established check, repair, reuse, and recycle automotive components.
and strengthened its control structure. Also, since 2003, In 2001, in order to promote environmental measures,
DENSO has been working on an industry-wide activity to DENSO set a system in which an excellent station in
standardize and integrate a set of questionnaire prepared environmental profile is certified as a “DENSO Eco-service
by the Japan Automobile Manufacturers Association Station.” In this system the following points are audited
(JAMA) / Japan Auto Parts Industries Association (JAPIA). every year: (1) proper recovery of CFC gases; (2)
The objective of this activity is to streamline the processing of industrial waste; (3) identification of
investigative job on environmentally hazardous substances environmentally hazardous emissions; (4) energy saving;
used in the supply chain. In fiscal 2006, DENSO compiled (5) awareness of associates together with a furnished
and applied this questionnaire group-wide. occupational environment; and (6) proper response to the
End-of-life Vehicle Recycling Law in Japan. A station
(2) Replacing hexavalent chromium which has received a full score in all items is certified as an
Hexavalent chromium is widely used for anti-rust plating. Eco-service Station. The rate of certification has been
DENSO has worked on switching hexavalent chromium increasing year by year. By the end of fiscal 2006, 669
to such as trivalent chromium, which is less hazardous stations, or 97 percent of total stations have been certified
to the environment. By the end of March 2007, the (94 percent at the last fiscal year-end). Also, in fiscal 2006,
Company has almost completed the switch inside and 109 stations (86 stations in the last fiscal year) were
outside Japan. acknowledged as the model of “Environmentally-Friendly
Automobile Service Station,”* under a project promoted
(3) Substituting lead solder by the Japanese Ministry of Land, Infrastructure, and
Solder, which is commonly used for the connection on Transport.
the conductive points in electronic and electrical * A recognition which acknowledges and publicizes the businesses that proactively make
efforts in environmental countermeasures such as the recycling of automotive
components, contains lead alloy. Although solder is components and the collection of CFCs to address a recycling-based society.
Switch of hexavalent chrome
Before switch After switch Work at a service station Eco-service Station certification

Manufacturing and Logistics

Eco factory
With the aim of an environmentally-leading company, Minimization of energy loss and

DENSO promotes the saving in resource and energy to streamlining
steadily reduce the global environmental impact of Efforts towards 2010
manufacturing. At the same time, the Company sets In “The First Environmental Action Plan (formulated in
voluntary targets according to regional characteristics 1993),” DENSO set the energy saving as one of the
around the world, thereby working on the production substantial items to work on. Since then, the Company
activity in harmony with the environment. has worked out a unique system to make the energy
consumption in a manufacturing process “visible,” and
Turning manufacturing sites across the charge directly the energy cost by manufacturing
world into Eco-factories department. Meanwhile, the Company has strived to
As a desirable figure of factory addressing a sustainable raise the awareness of energy saving. Thus, DENSO has
society, DENSO placed the “Eco-factory” in the “Fourth strengthened the environmental efforts in the production.
Environmental Action Plan.” In “DENSO ECOVISION 2005 (formulated in 2000),
The aim of “Eco-factory” is to enhance the previous DENSO placed three major pillars of “Building PEF
efforts of the Company and build a factory in which the (Perfect Energy Factories),” “Researching and
environmental impact in all manufacturing stages are developing energy-saving technologies for processing,”
reduced. As such, DENSO strives to achieve high and “Spreading out co-generation facilities speedily.” As
production efficiency, while reducing environmental such, the Company has strengthened its energy-saving
impact as much as possible by means of continuous activities. Now, in “The Fourth Environmental Action
improvement. Plan,” which is based on “DENSO ECOVISION 2015
In order to achieve the aim, DENSO is going to set (formulated in 2006),” DENSO aims to minimize the
respective targets and build model factories. As such, impact of entire corporate activity on global warming by
the factories of the Company in the world will be turned 2010, keeping an eye on the target period of the Kyoto
into Eco-factories. Protocol. In this way, the Company is pouring its entire
To increase the efficiency of energy usage at its factories, efforts to promote respective group-wide activities.
while minimizing energy loss, in fiscal 2006 DENSO
•Shift in CO2 basic unit of the DENSO group
spread out the activities for the Perfect Energy Factories. (index)
In addition, the Company spread out the following: 100 96
100 93 89 87 Target for 2010
reduction in generation and emission of wastes; 81
73 Consolidated
activities for zero emission (zero landfill waste); and 79 79 80% or less, compared with 2000
72 DENSO Japan
reduction in the usage of environmentally hazardous 66
50 59 54
60% or less, compared with 1990
substances such as chemicals. CO2 emissions
Basic unit = Consolidated
Sales DENSO Japan
0
‘90 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 (Fiscal year)
Prevention of global warming •Shift in CO2 emissions of the DENSO group

(unit: 10,000 t-CO2)
Target for 2010
100
Major results for fiscal 2006 (DENSO ECOVISION) 82.6 84.8 DENSO Japan
79.0 81.9
76.9 90%, compared with 1990
13.0 13.7 15.0 15.4
11.7
•CO2 basic unit Group companies overseas
50
Consolidated: Target: 80% or less, compared with year 2000; Result: 65.2 66.0 68.2 67.6 69.4
Group companies in Japan
73% (accomplished) 35.7 38.5 45.4 42.7* 56.0 DENSO Japan
DENSO Japan: Target: 56% or less, compared with year 1990; Result:
0
54% (accomplished) ‘02 ‘03 ‘04 ‘05 ‘06 (Fiscal year)
•CO2 Emissions *Partial calculation
Please refer to page 60 for the calculation method of the CO2 emissions
DENSO Japan: Target: 117% or less, compared with year 1990
Result: 120% (not accomplished)
•Wholly checked improvement in energy saving (making reduction
“visible,” scoring) Activities for fiscal 2006
•Settled gas removal facilities to reduce the five gases In the factories in Japan, DENSO has set the base of
•Started spreading out DENSO Energy Saving Standards worldwide activities for PEF to minimize energy loss. Then, the seven
themes, including the use of blowers for the air-blow

function in cleaners and the use of energy-saving nozzles introduced the blower facility with high energy-saving
for air guns, were spread out Company-wide. Also, the effect and spread out the 4,000 units of energy-saving air
Company miniaturized and rationalized processing gun at once. These facility and tool address the reduction
equipment with newly developed technologies. Moreover, in the usage of compressed air which has been commonly
the Company poured its efforts to operate co-generation used to dehydration or blowing. In addition, in the activity
facilities efficiently. of full-check at all production lines, the Company scored
In the group companies inside and outside Japan, DENSO the degree of progress in countermeasures. The total
Manufacturing and Logistics (Eco factory)

has started spreading out the “DENSO Energy-Saving average score was 97 (out of 100).
Standards” by which the following have been
incorporated into environmental management: the (2) Deploying co-generation
indexation of reduction in CO2 emissions; the operative So far, DENSO has introduced 13 of highly energy-efficient
procedure for energy saving; and the energy saving of co-generation facilities in which thermal power generation
equipment. For the first step, the Company conducted with natural gas and exhaust heat are used in
worksite diagnoses (17 companies in Japan and 42 combination. In fiscal 2006, the electricity generated
companies overseas). The progress of environmental within the Company was 474 thousand MWh, reaching
efforts was classified into four stages of “Understanding -> 31% of total electricity usage. In April 2007, the
Founding -> Developing-> Maturing.” The standards will equipment with generation
be phased in following the state of efforts by company. capacity of 15 thousand kW
As a result of these activities, both on consolidated basis has been introduced at the
and non-consolidated basis, the target for basic unit of Daian Plant (Mie, Japan),
CO2 emissions was accomplished. On the other hand, whereby the Company plans to
DENSO Japan did not accomplish its target for total CO2 increase the rate of in-house
emissions, because the production rose above the plan. power generation to 38%.
This outcome left the Company an issue for the next fiscal Co-generation facility at Daian Plant
year.
•Measures to reduce CO2 emissions •Shift in in-house power generation deploying co-generation
Amount of in-house power generation
•Share DENSO ECOVISION 2015 (%) Rate of in-house
•Announce concept of DENSO Eco factory power generation = Total usage of electricity
Procedures •Spread out “DENSO Energy-Saving Standards” inside Rate of (Purchased power + in-house power generation)
and outside Japan in-house 30
power 31 31
•Launch new energy-saving factory lines generation
20
•Spread out energy-saving air blowers over the group
•Spread out energy-saving air nozzles at once 16 17 18 21
Activities for 10
Perfect Energy •Check and repair leaks of compressed air
Factories (PEF) •Electrify molding machines 0
•Penetrate turning facilities off between operating times ‘91 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 (Fiscal year)
Reduction •Educate energy saving to all associates
measures Development of •Miniaturize equipment for machining and heating
energy-saving technologies
Basic idea on the calculation of total greenhouse gas
•Circulate waste heat and the cold
for processing •Introduce machining machines for dry processing emissions at DENSO
Co-generation •Introduce co-generation facility with 15,000kW at Daian At DENSO, all greenhouse gases defined in the Kyoto Protocol are added up. That is, CO2,
facilities Plant, Japan the energy-related greenhouse gas, and five non-energy-related greenhouse gases including
•Supply electricity with wind power generators (0.5kW at PFC, HFC, SF6, N2O, and CH4. The annual emission coefficient set by region is the
New facilities of Toyohashi Plant, 0.5kW at Daian Plant, 3kW at Agui conversion factor for CO2 at DENSO. Inside Japan, the Company uses the conversion
utilities Plant, all in Japan) factors shown in the table below. Outside Japan, the Company uses the factors publicly
announced in each global region. Please note that, in this report, the conversion factor for
electricity is fixed for years, so that the company can assess the improvement in electricity
usage. On the other hand, the reduction effect of CO2 by co-generation is converted by the
Building Perfect Energy Factories average of conversion factors for different types of thermal power generation. The effect of
co-generation is included in the CO2 emissions of the Company. As to the emissions of the
(1) Reducing energy loss to nearly zero five gases, their greenhouse effect caused by the Company had been calculated with the
Eliminating energy loss is important for DENSO to promote coefficient that assumes all the gases used are exhausted. However, from fiscal 2006, the
Company has begun using another emission coefficient for the five gases. The coefficient is
energy saving. In particular, the Company is making specified in detail by operational background in the manual in the “Law Concerning the
efforts to reduce the usage of electricity, which represents Promotion of the Measures to Cope with Global Warming,” enacted and enforced in Japan.
68 percent of its energy usage. The bases of these efforts Conversion factors for CO2 used in the calculation of CO2 emissions
are: to make energy consumption “visible” in the Electricity 0.3817kg-CO2/kWh Propane 3.0094kg-CO2/kg
manufacturing process; to make explicit the issues by Heavy fuel oil (A) 2.7000kg-CO2/L City gas 2.2559kg-CO2/m3
scoring the progress of activities; and thus to do every Kerosene 2.5308kg-CO2/L
possible improvement measures. In fiscal 2006, DENSO *Reference of conversion factor for CO2: A publication of Japan Automobile Manufacturers Association

(3) Study group for energy-saving processing Reducing non-CO2 greenhouse gases
Since 1990, DENSO has organized a specialized team Aside from CO2, five types of gases* are specified as
named “the study group for energy-saving processing” greenhouse gases, and, from fiscal 2007, pursuant to the
which has been developing and manufacturing the “Law Concerning the Promotion of the Measures to
production equipment that contributes to energy saving. Cope with Global Warming,” enacted and enforced in
The team has been developing new technologies for 15 Japan, a reporting on the five gases to the government is
categories, including machining, plastic molding, heat obligated. DENSO has set the target of “reducing
treatments, die-casting, and cleaning. Such technologies emissions of the five gases to 70% or less, compared
have been phased in to each factory. The main themes of with that of 2003 by 2010.” As such, the Company has
the development have been “downsizing,” “simplifying,” formulated a five-year reduction plan. In fiscal 2006, 11
and “slimming.” So far, the team has developed a units of equipment were set to remove the CFC
compact melting furnace and a molding machine, both substitute (perfluorocarbon (PFC)) used in semiconductor
for die-casting, a waste-heat recovery system, a compact manufacturing process. As a result, 1,200 tons of CO2
machining machine, and the insulation materials with shorter equivalent were reduced. Also, the Company plans to
hardening time. In fiscal 2006, eight themes in technological precede the reduction of hydrofluorocarbon (HFC).
developments were newly brought into practical use, * Perfluorocarbon (PFC) and hydroflurocarbon (HFC), collectively CFC substitutes, sulfur
thereby reducing 3,800 tons of CO2 equivalent. hexafluoride (SF6), dinitrogen monoxide (N2O), methane (CH4)
Various efforts to promote energy saving
Development of a energy-saving brazing furnace for Tennessee Chamber of Commerce & Industry
aluminum awarded a group company, recognizing the saving
A substantial theme for reducing CO2 at DENSO is to spread out the in energy and water source
energy saving with new equipment. Since fiscal 2001, the Cooling DMAT, a DENSO group company in the U.S.A., has reviewed the
Systems and Components Manufacturing Department has been operational state of seven cooling units for air conditioning and
developing an energy-saving brazing furnace for aluminum. The temperature control. Following the review, DMAT turned off some units
furnace is a type of hybrid heating sourced by an effective combination and limited the operation rate during winter. As a result, 729m3 of water
of city gas and electricity. The Department has spread out the furnace and about 1.6 million kW of electricity were saved. This reduction is
to the sites inside and outside Japan. equivalent to the annual 300 tons of CO2 emissions. In recognition of
In fiscal 2006, when another production line for round-type aluminum these results, the Tennessee Chamber of Commerce awarded DMAT
coolers (ATF warmer) was established, DENSO developed a new with two prizes with reference to water resource and emission
furnace called “compact, full-electric type,” in which efficient thermal containment.
conduction and radiant heating were used. This furnace reduced CO2
emissions by 26%. This effort was awarded with the “Prize of the Chief,
Chubu Bureau of Economy, Trade and Industry,” in recognition of an
excellent example of improving energy saving.
Tennessee Chamber of Commerce & Industry awarded DMAT
Introducing “Improvement in energy saving by

compressed air” to skill training
DENSO has incorporated the program of “Improvment in energy saving
by compressed air” into the skill training which comprises a part of the
Energy-saving furnace for brazing aluminum Received the “Prize of the Chief, Chubu
Bureau of Economy, Trade and Industry” corporate education system. This is also a part of energy-saving
education at DENSO. It is held four times a year. The training consists
of practical training on air blower,
•Development on energy saving with aluminum brazing furnace
measurement of air impingement
pressure, the detection and
CO2 emissions
repairing of air leakage, and the
Decreased by 26%
Increase calculation of improvement
efficiency effects. In the training, the
Miniaturize
acquisition of skills using actual
Conventional Electricity Full-electric manufacturing facilities is
furnace +
gas emphasized.
Education on improvement in energy saving
’00 ’03 ’06 (Fiscal year)

action item of “reducing of water usage” in ECOVISION
Resource recycling 2015. In this way, the Company has been working on the
efficient water usage. For instance, the Company has
Major results for fiscal 2006 (DENSO ECOVISION) been making efforts to use water efficiently and reduce
•Reduced 2,900 tons of waste at DENSO Japan (Target: 1,300t or more) wastewater by setting respective guidelines by region.
•Reduced 4,300 tons of waste at environmentally consolidated group At the manufacturing sites in Japan, DENSO deploys a
companies (Target: 2,600t or more) multi-stage circulation in the cleaning process of plating and

•Three overseas sites of DNMX (Mexico), DNMY (Malaysia), DNAZ device treatment. Also, the Company applies a closed
(Brazil) accomplished the zero emission system to handle the wastewater from the undercoating
treatment process. As such, DENSO is striving for a
Reducing waste and emissions thorough purification and reuse of water. As an example of
DENSO Japan and its 18 group companies in Japan the efforts at the sites overseas, DMUK (the U.K.) has been
have been practicing the zero emission since fiscal 2003. keeping the precipitation in a tank and has been supplying it
Meanwhile, the Company has developed the processing to its factory since 1997. In this way, DMUK takes its
methods considering resource saving and has designed locational advantage of pluvious climate. By this effort,
the products with less waste. In this way, the Company DMUK saves 15 thousand m3 of water every year.
has been making efforts to contain the generation of Other sites overseas have also been making the
wastes and emissions of subsidiary materials (fats, oil, comparable efforts following their regional characteristics.
and chemicals) and main materials (metals, plastics).
In fiscal 2006, DENSO promoted: the increase of raw T OP I C S
material yield; the decrease of off-spec products; the
DNMX (Mexico) and DMUK (the U.K.) were honored
dehydrartion of effluent and sludge; and the prolongation
with environmental awards for zero emission activity
of the lifetime of fats and oil. As a result, the waste
In 2005, DNMX started working on the educational activities to penetrate waste
reduction targets were accomplished. At the sites sorting. The infrastructure for recycling had been inadequately furnished,
overseas, the Company promoted the activities of waste though, DNMX promoted the recycling of hazardous substances in
reduction following the discrete guidelines by region. In coordination with the government. Also, referring to the example at DNIN
(India), DNMX also promoted the composting of food scraps from cafeteria with
fiscal 2006, three overseas sites have newly
the use of earthworms. In September 2006, DMMX finally accomplished the
accomplished the zero emission. At present, 11 out of zero emission. A series of effort at DNMX was awarded by an environmental
35 main sites are practicing zero emission. organization in the Estado de Nuevo León with the “Prize of Excellence in
Environmental Activity.”
•Positioning of zero emission and the activities for reducing waste and emissions Besides, in March 2006 DMUK accomplished the zero emission. In November
Reduce waste materials with the three Rs 2006, with the recognition of this accomplishment, DMUK was nominated to
Recycle (re-sourcing) Reuse (reclaiming) Reduce (saving) one of the four finalists for the “National Recycling Award (industry category),”
hosted by the publisher of “Material Recycling Week” in the U.K.
Reduction in loss of Reduction in loss of
Zero emission
subsidiary materials main materials
Realize a production line Develop processing methods Design products with less
with less defects and waste considering resource saving waste generation
•Shift in the amount of recycling and waste processing •Shift in recycling rates
(1,000 t) (%)
252 99 99 99 99
250 220 100 DNMX honored with the Prize of DMUK recognized as a finalist for the “National
211
194 99 99 99 99 Excellence in Environmental Activity Recycling Award (industry category)
200
90
85 84
150 184.5 210 203 242 81
80
80 Reducing scrap by the review on application
10
50
method for adhesives
5 9.5 10.4 10.7
7.0
0
In the process of adhesive (silicone rubber) application to the “inertia sensor,” a
0
’03 ’04 ’05 ’06 (Fiscal year) ’03 ’04 ’05 ’06 (Fiscal year) component related to a vehicle braking system, the air had been contaminated
Amount of Amount of recycling DENSO Japan Group companies in Japan into the adhesive at the change of adhesive cartridge. To purge the
waste
generated Amount of waste disposed Group companies overseas contaminated air, a portion of the adhesive had to be disposed (a wasting
(sum of incineration and direct landfill)
shot). Electronics Device Manufacturing Department 1 worked out an air
purging method which drew on the characteristics of the adhesive and the
Reducing water usage lightness of air. In this method, the air is purged by leaving an adhesive
Amid a concern over the water supply with the cartridge for 20 minutes without pressure. Thus, the annual amount of waste
adhesive generated from the wasting shots was reduced by 1.2 tons. This
backgrounds of economic development and rapid
method was presented at the “2006 National QC Competition” held in Japan.
increase in the world population, DENSO has set the

this way, DENSO is working on the process improvement

Control and reduction of environmentally and the substitution. In fiscal 2006, a progress was
hazardous substances made in the introduction of water paint for the outside
finish of conductive components. Thus, both DENSO
Major results for fiscal 2006 (DENSO ECOVISION) Japan and the group companies in Japan have
accomplished respective annual targets.
•Accomplished the target for the emissions of object substances for
PRTR *1 Pollutant Release and Transfer Register
*2 Material Chemical Assessment System
DENSO Japan: 83t (Target: 91t or less)
Group companies in Japan: 151t (Target: 186t or less)
Group companies overseas: started formulating a five-year plan at all of 42 sites Reducing VOCs*1
•Accomplished the target for VOC Emissions: In fiscal 2006, DENSO extended the reduction target of
DENSO Japan: 820t (Target: 830t or less)
the VOCs to include 138 substances*2 such as toulene
Group companies in Japan: 1,200t (Target: 1,300t or less)
Group companies overseas: started formulating a five-year plan at all of 42 sites
and xylene used in the process of painting, adhesion, or
cleaning. Also, the Company promoted respective
process improvement and technological development.
Reducing object substances for PRTR*1 These activities are based on the target such that “by
Since fiscal 2001, with the “MACAS” *2 , DENSO has 2010, in comparison with 2003, VOC emissions is
been collectively controlling all chemical substances reduced by 35% (ECOVISION 2015).” On top of that, the
used in materials, procured components, and activities are subject to the amended “Air Pollution
manufacturing process. The Company continues Control Law” (Emission control system for VOCs)
reducing the amount of chemical substances used or enforced in 2006 in Japan. For the sake of process
emitted, together with the development of alternative improvement, DENSO worked out the following: the
technologies. As for the emissions of object substances evaporation of VOCs was restrained by reducing the
for PRTR (354 substances), the Company has set the outflow to an evaporation tank; the work lines were
targets such that “ by 2010, in comparison with 1998 merged; and the methods for the painting of drip-proof
level, the emissions of the object substances is reduced agent was changed. To develop respective technologies,
by 75% at DENSO Japan, by 65% at group companies a working group was launched. The working group
in Japan,” and that “at the group companies overseas, developed a “water-based drip-proof agent” with low
by 2010, in comparison with 1998 level, the emission environmental impact and assessed the equipment for
basic unit for the object substances is reduced by 30% in recovering and removing VOCs. As a result, DENSO and
accordance with the legislative regulations by region.” In its group companies in Japan accomplished their annual
fiscal targets for the amount of reduction and emissions
of VOCs.
•Emissions of object substances for PRTR
*1 Volatile Organic Compounds
(unit: tons per year) Atmosphere 95 Recycling 97 *2 100 substances are specified by the Japanese Ministry of the Environment,
while 138 substances are specified by JAMA and JAPIA
Removal 239
Chemical substances
(Subsidiary materials) Consumption 260
1,160 Products 431
Waters 8 Soil 0 Disposal 29

All Group companies in Japan (excluding group companies overseas)
•Shift in reduction of object substances for PRTR (DENSO Japan)

(tons per year)
Accomplished First priority
367 190 target one substances
14% year ahead (5 substances)*
Emissions of 120
object Toluene and xylene
74% 96 89 83
substances 75% Other substances
76% 72%
for PRTR (21 substances)
‘98 ‘02 ‘03 ‘04 ‘05 ‘06 (Fiscal year)

* First priority substances: hexavalent chromium compounds, lead compounds,
cyanogen compounds, formaldehyde, tetrachloroethylene.

also going to be phased in from fiscal 2008 onward.
Environmental considerations in distribution * Switching transportation means to those with less environmental impact such as mass
transportation with railways or vessels.
Major results for fiscal 2006 (ECOVISION)

(1) Promoting modal shift
•Not accomplished the target for CO2 emissions (DENSO Japan)
45,600t CO2 (Target: 41,300t -CO2) In fiscal 2006, the number of railway transportation
•Accomplished the target for packaging material usage (DENSO Japan) between the Nishio Plant (Aichi, Japan) of DENSO Japan

21,400t (Target: 21,500t) and the plant of DENSO Manufacturing Kitakyushu Co.,
Ltd. (Fukuoka, Japan) was increased from one service per
•Logistics of DENSO day to three services per day. As a result, the annual 700
tons of CO2 equivalent were reduced. From fiscal 2007,
Procurement logistics Production logistics Distribution logistics
the railway transportation is
Automakers
Suppliers Factories Transit points Auto dealers going to be enhanced to
Component dealers include the direct delivery
Export and import service for an automaker in
Hiroshima Prefecture,
Overseas sites Overseas customers Japan.
Railway service between Aichi Pref.

Reducing CO2 emissions and Fukuoka Pref., both in Japan
3
In volume, DENSO ships 33 thousand m of products every
day. The products are transported by trucks, railways, and (2) Reducing CO2 by production transfer
vessels to customers inside and outside Japan. As a new countermeasure to decrease transportation
In coordination with DENSO Logitem, a subsidiary to distance, in fiscal 2006 DENSO started discussing on the
which DENSO subcontracts its logistics, DENSO is production transfer to group manufacturing companies (in
making efforts “to reduce CO2 emissions by increasing Kanto and Kyushu areas, both in Japan). In fiscal 2007,
loading efficiency and to decrease packaging materials.” the first step of the transfer is going to be taken by
In Japan, the amended “Law Regarding the Rationalization delegating the manufacturing of several thermal system
of Energy Use” has been enforced as of April 2006, products to the Sankyo Radiator Co., Ltd. (Hachioji City,
thereby obligating specified shippers the reporting on the Tokyo, Japan). The estimated annual reduction in
amount of energy used. Amid this situation, DENSO has emissions of CO2 equivalent by this delegation is 400 tons.
set the medium-term target for CO2 emissions. Following
the target, the Company has been increasing loading Reducing packaging materials
efficiency and promoting energy-saving transport with Addressing the reduction in packaging materials, DENSO
optimized routes. Additionally, in fiscal 2006 the Company has set the target such that “by 2010, in comparison with
worked on another promotion of modal shift* and the the level in 1995, the amount of packaging materials is
decrease of transport distances by production transfer. reduced by 35%.” In this way, the Company is promoting a
However, the annual target for CO2 emissions was not simple packaging and the returning (reusing) of packages.
accomplished due to a sharp increase of transportation In fiscal 2006, in place of carton boxes, the Company
quantity following the rise in production. In fiscal 2007, the expanded the use of plastic “circulation containers” for the
20 group companies in Japan are scheduled to comprehend shipment to its production sites and sales companies
their state of logistics and build up their logistics structure. abroad. As such, despite the increase in shipment,
Thereafter, from fiscal 2008, the management by target is DENSO reduced the usage of carton boxes and thus has
going to be phased in. As for 50 of group companies accomplished the annual target for the usage of packaging
overseas, the management of CO2 emissions by target is materials.
•Shift in CO2 (1,000 tons-CO2) •Shift in amount (1,000 tons)

emissions from DENSO Japan of packaging DENSO Japan
70 40
logistics 60 materials used 30.5
45.6 45.8 Target 30 Target
50 42.6
40 21.8 21.0
20
30
20 10
10
0 0
‘90 ‘06 ‘07 (Fiscal year) ‘95 ‘06 ‘07 (Fiscal year)

Coordination with society

Eco friendly
In order to build a sustainable society, both the The 2) above is the first pilot effort in Japan. In this
coordination with a wider variety of stakeholders and the coordinated effort with the Central Nippon Expressway
promotion of activities for environmental conservation Company Limited, the periphery of motorways near
are indispensable. DENSO proactively works on the DENSO facilities in Aichi and Mie Prefectures, Japan are
external coordination beyond its business domain such greened so that CO2 is absorbed and thus the Company
as industrial sector. Also, the Company makes active makes a contribution to the prevention of global warming.
efforts to release the information. In the meantime, the In May 2007, the Company held the first greening activity
company pours its efforts on the enhancement of of “DENSO Green Highways.” In this activity, 40 civil
environmental communications with all stakeholders. volunteers, mainly consisted of associates and their
families of DENSO, planted 465 seedlings of broad-leaf
Major results for fiscal 2006 (DENSO ECOVISION) trees in 13 kinds, such as cherry and maple, on the
•Promoted the “DENSO Green Project” such as the “DENSO Forest” slopes alongside the Tomei Expressway (in Okazaki City,
to be in harmony with communities Aichi, Japan). The associates who participated in this
•Implemented measures to increase commuting convenience by activity earned the points for the DENSO Eco-Point
commuter shuttle buses system, DECOPON (see p. 17-18).
•Promoted the publication of sustainability report by business
entities of DENSO group abroad
(2) Activities for global-warming prevention during the
Month of Environment
Encouraging the “Eco-life” of associates Historically, every June has been the Month of
(1) The DENSO Green Project Environment at DENSO Japan. In the month, the
Together with the people of local communities, DENSO facilities in plants or factories have been self-checked to
promotes the greening, which will bring a community conserve the environment. Also, their respective
asset in the future, whereby the Company will be in localities have been cleaned up. From fiscal 2007, the
harmony with local communities. The greening activity Month of Environment is positioned as the period to
consists of two pillars of 1) “the DENSO Forest,” a diffuse the ECOVISION and enhance environmental
greening of worksite surrounds, in that DENSO produces action of associates. During the month, all associates
products there, and 2) “DENSO Green Highways,” a are called for their environmental action. During June
greening of motorway periphery, in that vehicles are used 2007, under the theme of “global warming prevention,”
there. the managers at DENSO Japan and its group companies
With regard to 1) above, since December 2006 DENSO in Japan were gathered to the lectures on the
has been conducting an activity to finely afforest the 600 environment. Also, the responsible persons and
thousand m2 of corporate woodland around the Nukata engineers for environmental affairs were listed to
Proving Ground (Okazaki City, Aichi, Japan). The participate in the Eco-tours and the Eco-seminars. In
Company will grow the woodland to be the place in the meantime, the clean-up activity for the neighboring
which diverse flora and fauna live. Also, twice a year, localities was spread out. As such, the associates of the
with 100 or more participants every time, the Company Company raised and mutually brushed up their
has been holding the events such as woodworking and environmental awareness.
voluntary afforesting, pruning, or thinning. In March 2007,
•Educational event in the Month of Environmental (June, 2007)
about 140 associates and their families and 30 members
Educational events Listed associates
of local NPOs or forestry cooperatives participated in the Lecture: “Mobility business to create a Managers at DENSO Japan and its
event. In June 2007, around 700 seedlings of broad-leaf sustainable society” group companies in Japan
Special environmental education Persons responsible for the environment at factories
trees in 24 kinds, such as cherry and maple, were •Eco-tours (Visit to factories of other divisions) Mid-Career engineers responsible for product
•Eco-seminars (Visits to sites of product recycling) designing
planted by 160 associates on the premise of the Zenmyo
Education on the environment in general
Plant (Nishio City, Aichi, Japan). •Showing of the movie “An Inconvenient Truth” General associates
•Quizzes on the environment
(3) Introduction of commuter shuttle bus service

In November 2006, the shuttle bus service was started,
connecting DENSO Headquarters, the training center in
Obu City, and the neighboring company residences. At
DENSO Forest in Nukata Activity of DENSO Green Highways DENSO headquarters, the associates who commute in

vehicle comprise 65% of total associates. Thus, this is an Conserving biodiversity
attempt to encourage such car commuters to switch to Raising environmental awareness at the DENSO Eco-Park
bus commuting. This attempt addresses the promotion On the Earth, a wide variety of flora and fauna live in a
of energy saving, as well as the ease of traffic jams. The complex balance of ecosystem. However, it is said that,
attempt has been designated a model project of the over the last 100 years, human activity has resulted in
“Mobility Management”* advocated by the Japanese the distinction of species at a rate of 1,000 times higher
Ministry of Land, Infrastructure, and Transport, et al. than that of in nature. Hence, the conservation of
Coordination with society (Eco friendly)

DENSO Japan harnesses the “DECOPON” point system biodiversity has become a serious issue.
to the bus commuting whereby a proactive switching is As a part of the activities to conserve the environment,
encouraged. as well as flora and fauna, of the surrounding localities,
*Traffic measures that promote the prevention of global warming using such as public DENSO has settled flower gardens, biotopes, or the
transportation and bicycles
Eco-Parks in the premise of its plants in many countries.
As such, the Company is protecting the havens for birds,
Environmental communications plants, and several endangered species of freshwater
(1) Publication of sustainability report fish. In June 2006, the Eco-Park with the area of
In 1999, as a part of the information release and the 4,000m2 named “Sui-Yuu-Shin” (Water-Playing-Forest)
mutual communications with stakeholders, DENSO was opened in the premise of the Daian Plant (Mie,
published the first environmental report. Since then, the Japan). In the park, bird-watching huts, scrap-wood
Company has continued the publication of paths, and bio-toilets are placed. The electricity for the
environmental and social report, or CSR report. park is generated by wind power.
Also, DENSO has been encouraging its group The Eco-Parks are also used for the environmental
companies overseas to publish their own report. Since learning for children. In fiscal 2006, there were 700 or
2001, DMHU (Hungary) and DNBA (Spain) have been more visitors of local government, schools, and
publishing their sustainability report. In 2006, DMUK businesses. Besides, in the fiscal 2006 there were about
(the U.K.) published its first environmental report. 2.7 thousand visitors in total for the in-house events
such as the “Family Open House Day” (in August), the
“DENSO ECO Ranger 21” (in October), and the “Daian
Enjoy Festa” (in October).
DMUK (the U.K.) DMHU (Hungary) DNBA (Spain)
(2) Exhibiting in the event “Eco-Products”

In order to increase the understanding for the An Eco-Park at Daian Plant Environmental education at Eco-Park
environmental efforts of the Company and exchange

T OP I C S
with a variety of people, DENSO has been proactively
appearing in environmental exhibitions. At “Eco DMHU (Hungary) honored with Environmental
Products 2006” (Tokyo, Japan) held in December 2006, Award for the second time
the Company displayed environmentally-friendly In November 2006, DMHU (Hungary) was awarded the “Business for
products and technologies and hosted hands-on events. the Environment” from the Hungarian government. DMHU was
In this way, DENSO deepens the communication with recognized with its cooperative contribution with local corporations
for improving the level of
many people. local environmental
activities through outreach
programs for school
education and clean-up
activities. DMHU was
presented with the award
for the second time.
DMHU received the award for the second time

Eco-Products 2006

Opinions from Stakeholders and Responses of DENSO
A variety of opinions and proposals on the activities of CSR at DENSO have been presented through the comments of third
party, the Stakeholder Dialog, the reporting on CSR, and the websites of the Company. Accordingly, the Company has
strived to improve its activities of CSR and respond to the opinions or proposals. The major items are reported as follows.
Please notice that the opinions and proposals presented at the Stakeholder Dialog are shown in detail on the website.
Related
Area Opinions and proposals Responses and regards of DENSO pages
[Comment of a third party] In fiscal 2006, DENSO spread out the “DENSO Declaration of Group
The occupational safety throughout the supply chain Corporate Behavior” to 1,400 of its suppliers. In this way, the Company
ought to be improved, considering human rights. Also, penetrated the understanding of human rights, labor, and safety. In fiscal
Structure the state of the workers on temporary or contract basis, 2007, DENSO will incorporate the engagement in CSR into basic
31
and the situation of developing countries ought to be business contracts with its business partners. Also, the Company has 35
investigated, while strengthening related supportive been conducting periodically the Global Associate Relations Reviews in
activities. developing countries. Moreover, the Company continues strengthening
the support for temporary and contract workers.
More voices of stakeholders ought to be carried in CSR DENSO will strive to enhance the contents by expanding the coverage in —
CSR in Report. CSR Report or on its website.
general
Opportunities for the dialog with citizen ought to be In fiscal 2006, DENSO deepened the dialog anew at the “CSR Forums,”
expanded. regional meetings, exhibitions, the Stakeholders Dialog, and the Family 42
Communication Open House.
Lecture about CSR could be offered to every associate. DENSO is holding lectures and opinion exchanges at CSR Forums.
However, there is a capacity limit on the number of participants. 42
Therefore, the Company is striving to diffuse its CSR by video materials
and in-house magazines.
Assessment on The activities of CSR could be incorporated into the Associates set activities of CSR as a job assignment whereby performance
activities of CSR evaluation (target management) of associates. evaluation is connected to CSR, following the degree of accomplishment. —
[Comment of a third party] In fiscal 2006, DENSO started to spread out the “DENSO Energy Saving
In order to continuingly realize CO2 reduction embracing Standards” and the activity of “Perfect Energy Factories” globally. The
the expanding production, the process to accomplish Company has also set specific factors to reduce CO2. Meanwhile, the 15 16
targets ought to be clarified. Company is spreading out energy saving technologies to the group
companies overseas. On top of that, DENSO is applying to the United 59 61
Nation for the “Clean Development Mechanism” to Malaysia, with the
provision of an energy saving technology using compressed air.
CO2 reduction The products that allow users to feel in real the decrease DENSO develops and manufactures the instrument clusters for hybrid
of environmental impact ought to be produced (e.g., vehicles and the car navigation systems which allow users to feel the
Environment making CO2 emissions “visible”) energy saving for real. Additionally, in fiscal 2006 the Company 54 56
introduced a quantitative “Environmental Factors for Products.”
[Comment of a third party] The overseas allied service stations of DENSO continue settling the
As an international cooperation, recovery and disposal of equipment for recovering and reusing refrigerant so as to prevent
substances with a high global warming potential ought to chlorofluorocarbon chemicals from releasing. This is the same at the 58
be supported proactively. allied service stations in Japan.
A coordinated recycling method with the companies in Historically, there has been the coordination between DENSO and
Recycling dismantling business could be discussed. dismantling businesses in the recovery of chlorofluorocarbon chemicals
57
and the dismantlement of airbags. Also, the Company is promoting the
use of materials which are easy to recycle to its products.
The labor issues regarding such as contract foreign DENSO will discuss on what responses are necessary and whether the
workers ought to be addressed. Company is capable of such responses. In the meantime, the Company —
will talk the issue over in coordination with the government or economic
Issues on organizations.
Corporate foreigners and Seminar programs and corporate facilities ought to be As a part of the activities of corporate citizenship, DENSO will discuss on
citizenship youth opened to support the self-reliance of the “NEET” (“Not in what responses are necessary and whether DENSO is capable of such
education, employment, or training”) people, shutting-in responses.
—
people, foreign people, and the youth.
Collaboration Meetings with the organizations capable of making DENSO is now conducting collaborative projects for the activities of
with NPOs professional remarks or suggestions could be held. corporate citizenship with different external organizations. The Company 37 40
will continue such projects.
The support for those who have resigned after the childbirth In fiscal 2006, DENSO enhanced its supportive system by extending
leave or the childcare leave ought to be enhanced. the term of childcare leave.
30 32
Respecting Balance in Addressing the success of female associates, a “mentor” DENSO will take this as a future issue to discuss, as investigating the
associates work and life system could be introduced. needs of female associates. 30
The use of childcare leave and shorter working hour by DENSO is releasing various kinds of information whereby the Company
male associates ought to be increased. is promoting a climate building to facilitate male associates to use such 31 32
systems.
In consideration of the environment, procurement DENSO will implement environmentally-friendly logistics with its suppliers
logistics (such as the just-in-time) ought to be reviewed. by enhancing highly-efficient means such as cooperative transportation.
64
Procurement A proposal procedure from suppliers to DENSO on DENSO has already set a system in which suppliers can make proposals
environmental improvement ought to be set. to the Company not just on environmental aspect but also on other
aspects. The proposals are discussed and fed back within the
35 36
Company.
Others
Traffic safety during the product transport ought to be DENSO continues instructing transport companies to penetrate an
penetrated. eco-friendly and safe driving.
64
Risk Disaster drill ought to be cooperated with communities, In the event of an earthquake or flood, DENSO will offer certain athletic
management
and evacuation spaces ought to be offered. grounds for evacuation spaces in response to the needs of the —
government and local communities.
A Business Continuity Plan (BCP) assuming the Tokai Every year DENSO implements a drill assuming a big earthquake. As to
and Tonankai Earthquake could be necessary. BCP, the Company will complete formulating it in fiscal 2007.
21

A Third-party Comment on DENSO CSR Report 2007
This comment was written with reference to the contents of this report and the hearings with
the DENSO associates responsible for the environment and procurement.
Points recognized as at the world’s highest level

•Based on the “DENSO Group Declaration of Corporate Behavior,” the Company has drew up and
practiced a group-wide CSR promotion plan that quantitatively set a wide range of target encompassing
the social aspect. Such targets include the reduction of environmental impact, the increase of its human
diversity, and the support of its customers. The Company has also established a PDCA (management
cycle) to manage the progress of the plan, thereby clarifying new issues. All of these are at the level of a
global model for other companies.
Highly recognized points

CEO, International Institute •The Company continuously holds the “DENSO CSR Forums,” with compulsory attendance of managers
for Human, Organization including the president, as the opportunities to understand in depth a range of aspects in CSR. As such,
and the Earth (IIHOE) the Company improves the literacy in CSR corporate-wide (p. 42). Also, since fiscal 2007, the Company
Hideto Kawakita has added “Compliance” and “CO2 Reduction” to monthly management targets for managers.
•Applying the “direct charge,” the Company comprehends the hourly usage of electricity and compressed
Founded in 1994 “for Democratic air by equipment (not by work line on a monthly basis). In this way, the Company makes the progress in
and Balanced Development for All
the Lives on the Earth,” IIHOE has the usage amount and the reduction efforts “visible,” thereby globally spreading out the ”Energy-Saving
been served as a management Standards” which comprises 115 points for improvement. Thus, the Company enhances its efforts to
consultant for non-profit
organizations and social build the “Perfect Energy Factories (PEF)” (p. 14-15, p. 60-61).
entrepreneurs, while supporting •The Company encourages the efforts on compliance and risk management worldwide. In Japan, the
CSR engagement of major
Japanese corporations.
Company implements a countermeasure drill for business resumption that involves about 40,000 associates.
The Company also encourages its associates to register for the in-house safety confirmation system.
http://blog.canpan.info/iihoe/ •The company steps forward to prepare supportive measures to improve the balance between work and
(Only in Japanese)
life. Such instances include the enhancement of the systems for leaves and shorter work hours and the
joint establishment of infant daycare centers with four other companies in Toyota group (p. 30, p. 32).
•The Company furnished and started spreading out so-called the “Spreading-out tool for Suppliers” to
encourage its suppliers to practice CSR (p. 35).
•The Company encourages its associates and their families to participate in corporate citizenship programs
for society or community by developing and operating a unique Eco-Money named “DECOPON” in
coordination with NPOs (p. 37-40).
•The Company continues and expands the opportunities for dialogs with stakeholders and is going to
steadily realize the opinions and suggestions presented in the dialogs (p. 42).
Points that require more work

•As to the increase in occupational accidents, the Company should analyze the causes and reconfirm
associated risks. At the same time, the Company should accelerate the efforts for raising the awareness
of human rights and safety with a scope including the whole supply chain, in order that all the people who
deal with raw materials, parts, and products of the Company can work continuously under an appropriate
labor conditions and a hygienic environment. In particular, the Company should examine in depth on the
state of temporary or contract workers and developing countries, to strengthen the support for them.
•The Company should accelerate the development of diverse human resources capable of corresponding
to the globalization of its corporate management. Also, the Company should not solely depend the
human resources development on each department. Rather, in the same manner for handing down and
on monozukuri skills, the Company should increase the corporate human resources,.
•As an international cooperation on environmental aspect, especially in developing countries, the Company
should proceed the preparation to support the recovery and disposal of substances with a high global
warming potential.
As presented the third-party comment

This fiscal year, too, DENSO consulted Hideto Kawakita, the CEO of IIHOE (the International Institute for Human, Organization, and
the Earth), a third-party comment.
This fiscal year, the Company established issues and targets for the nine areas of the activities of CSR (for specific contents, please
refer to page 10), based on the “DENSO Group Declaration of Corporate Behavior,” whereby the Company promoted respective
activities corporate-wide. The Company also strived to improve and respond to the items pointed out in the last fiscal year. As a
result, the Company sincerely received positive feedback with regard to its all-over efforts in the activities of CSR (see page 67 for
details). The Company considers that the efforts for rooting the activities of CSR into every single associate must be important in the
future. Therefore, DENSO is determined to heighten more the activities of CSR which is consistent with the corporate behavior that
considers the problems and issues faced by each global region.
CSR Promotion Center, Corporate Planning Department, DENSO Corporation

DENSO CORPORATION
1-1, Showa-cho, Kariya, Aichi 448-8661, Japan
Tel. +81-566-25-5511 (Information Center)
www.globaldenso.com
•For inquiries on this report, please contact:

CSR Promotion Center, Corporate Planning Dept.
Tel. +81-566-25-6543 Fax. +81-566-25-4505
E-mail contact is available on the website above.
70 percent of the wood pulp used for the paper of this report is made from Japanese wood, of
which 10 percent is the thinned wood that causes less increase of CO2 emissions in Japan.
Neither surface coating nor special coating was done on the paper for this report.
This report was printed with 100 percent vegetable ink which does not require petroleum solvent,
does not cause volatile organic compounds (VOCs), and does not contain heavy metals such as
lead, mercury, and cadmium.
Printing method for this report is the waterless printing in which ink is transferred without the
dampening water containing isopropyl alcohol.
To save resources and energy, the plate of this report is made using the computer-to-plate (CTP)
method which does not use polyester film or acetate film and does not require alkaline developer.
This report was printed at the factory with ISO 9001 certification.
3 07Z-25B
DENSO CSR Report 2007 DATA>GRI Index 1
Index in accordance with GRI (Global Reporting Initiative) Guidelines (G2)
1. Vision and Strategy

1.1 Statement of the organization’s vision and strategy regarding its contribution to sustainable development. p3-4
1.2 Statement from the CEO (or equivalent senior manager) describing key elements of the report. p3-4
2.Profile
Organizational Profile
2.1 Name of reporting organization/ p5
2.2 Major products and/or services, including brands if appropriate. p5
2.3 Operational structure of the organization. p5
2.4 Description of major divisions, operating companies, subsidiaries and joint ventures. p5
2.5 Countries in which the organization’s operations are located. p6
2.6 Nature of ownership; legal form. p5
2.7 Nature of markets served. p5
2.8 Scale of the reporting organization. p5
2.9 List of stakeholders, key attributes of each and relationship to the reporting organization. p8
Report Scope
2.10 Contact person(s) for the report, including e-mail and web addresses. Back cover
2.11 Reporting period (e.g., fiscal/calendar year) for information provided. p1
2.12 Date of most recent previous report (if any). p1
2.13 Boundaries of report and any specific limitations in its scope. p1
2.14 Significant changes that have occurred since the previous report. N.A.
2.15 Basis for reporting that can significantly affect comparability from period to period and/or between reporting organizations. p1・5-6
2.16 Explanation of the nature and effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement. N.A.
Report Profile
2.17 Decisions not to apply GRI principles or protocols in the preparation of the report. p1
2.18 Criteria/definitions used in any accounting for economic, environmental and social costs and benefits. p51
2.19 Significant changes from previous years in the measurement methods applied to key economic, environmental and social information. p54
2.20 Policies and internal practices to enhance and provide assurance about the accuracy, completeness and reliability that can be placed on the sustainability report. p10
2.21 Policy and current practice with regard to providing independent assurance for the full report. p68
2.22 Means by which report users can obtain additional information and reports about economic, environmental and social aspects of the organization’s activities. p1
3. Governance Structure and Management Systems

Structure and Governance
3.1 Governance structure of the organization, including major committees under the board of directors that are responsible for setting strategy and for oversight of the organization. p19
3.2 Percentage of the board of directors that are independent, non-executive directors. p19
3.3 Process for determining the expertise board members need to guide the strategic direction of the organization. N.A.
3.4 Board-level processes for overseeing the organization’s identification and management of economic, environmental and social risks and opportunities. p19-21
3.5 Linkage between executive compensation and achievement of the organization’s financial and non-financial goals . N.A.
3.6 Organizational structure and key individuals responsible for oversight, implementation, and audit of economic, environmental, social and related policies. p19
3.7 Mission and values statements, internally developed codes of conduct or principles and polices relevant to economic, environmental and social performance and the status of implementation. p7-8
3.8 Mechanisms for shareholders to provide recommendations or direction to the board of directors. p19
Stakeholder Engagement
3.9 Basis for identification and selection of major stakeholders. p7-8
3.10 Approaches to stakeholder consultation reported in terms of frequency of consultations by type and by stakeholder group. p41-42
3.11 Type of information generated by stakeholder consultations. p67
3.12 Use of information resulting from stakeholder engagements. p41-42・67
Overarching Policies and Management Systems
3.13 Explanation of whether and how the precautionary approach or principle is addressed by the organization. p21
3.14 Externally developed, voluntary economic, environmental and social charters, sets of principles or other initiatives to which the organization subscribes or which it endorses. N.A.
3.15 Principal memberships in industry and business associations, and/or national/international advocacy organizations. p54
3.16 Policies and/or systems for managing upstream and downstream impacts. p35-36・53
3.17 Reporting organization’s approach to managing indirect economic, environmental and social impacts resulting from its activities. p35-36・65-66
3.18 Major decisions during the reporting period regarding the location of, or changes in, operations. N.A.
3.19 Programs and procedures pertaining to economic, environmental and social performance. p10・19-22・25-26・28-33・45-46・50-51
3.20 Status of certification pertaining to economic, environmental and social management systems. p45-46
Economic Core Performance Indicators

Customers
EC1. Net sales. p5-6・34
EC2. Geographic breakdown of markets. p6
Suppliers
EC3. Cost of all goods, materials and services purchased. p5
EC4.Percentage of contracts that were paid in accordance with agreed terms, excluding agreed penalty arrangements. N.A.
Employees
EC5. Total payroll and benefits broken down by country or region. N.A.
Providers of Capital
EC6. Distributions to providers of capital broken down by interest on debt and borrowings and dividends on all classes of shares, with any arrears of preferred dividends to be disclosed. p34
EC7. Increase/decrease in retained earnings at end of period. p5
Public Sector
EC8. Total sum of taxes of all types paid broken down by country. p5
EC9. Subsidies received broken down by country or region. N.A.
EC10. Donations to community, civil society and other groups broken down in terms of cash and in-kind donations per type of group. p39
*Note
N.A.: Not Applicable
H P: Posted on the website
DENSO CSR Report 2007 DATA>GRI Index 2
Index in accordance with GRI (Global Reporting Initiative) Guidelines (G2)
Environmental Core Performance Indicators

Materials
EN1. Total materials use, other than water, by type. p49
EN2. Percentage of materials used that is waste from sources external to the reporting organization. N.A.
Energy
EN3. Direct energy use segmented by primary source. p49
EN4. Indirect energy use. p49
Water
EN5. Total water use. p49
Biodiversity
EN6. Location and size of land owned, leased or managed in biodiversity-rich habitats. N.A.
EN7. Description of the major impacts on biodiversity associated with activities and/or products and services in terrestrial, freshwater and marine environments. p66
Emissions, Effluents, and Waste
EN8. Greenhouse gas emissions. p49・59・64
EN9. Use and emissions of ozone-depleting substances. N.A.
EN10. NOx, SOx and other significant air emissions by type. p49
EN11. Total amount of waste by type and destination. p49・62
EN12. Significant discharges to water by type. p49
EN13. Significant spills of chemicals, oils and fuels in terms of total number and total volume. p50
Products and Services
EN14. Significant environmental impacts of principal products and services. p53
EN15. Percentage of the weight of products sold that is reclaimable at the end of the products’ useful life and percentage that is actually reclaimed. p57
Compliance
EN16. Incidents of and fines for non-compliance with all applicable international declarations/conventions/treaties and national, sub-national, regional and local regulations associated with environmental issues. p50
Social Core Performance Indicators

Labour Practices and Decent work
Employment
LA1. Breakdown of workforce, where possible, by region/country, status, employment type and employment contract. p6・28
LA2. Net employment creation and average turnover, segmented by region/country. p28・30
Labour/Management Relations
LA3. Percentage of employees represented by independent trade union organizations or other bona fide employee representatives broken down geographically. N.A.
LA4. Policy and procedures involving information, consultation and negotiation with employees over changes in the reporting organization’s operations. p28
Health and Safety
LA5. Practices on recording and notification of occupational accidents and diseases. p32
LA6. Description of formal joint health and safety committees comprising management and worker representatives and proportion of the workforce covered by any such committees. p32
LA7. Standard injury, lost day and absentee rates and number of work-related fatalities. p32
LA8. Description of policies or programs on HIV/AIDS. N.A.
Training and Education
LA9. Average hours of training per year per employee by category of employee. p51
Diversity and Opportunity
LA10. Description of equal opportunity policies or programs, as well as monitoring systems to ensure compliance and results of monitoring. p20・30
LA11. Composition of senior management and corporate governance bodies, including female/male ratio and other indicators of diversity as culturally appropriate. p19・30
Human Rights
Strategy and Management
HR1. Description of policies, guidelines, corporate structure and procedures to deal with all aspects of human rights relevant to operations, including monitoring mechanisms and results. p8・28
HR2. Evidence of consideration of human rights impacts as part of investment and procurement decisions, including selection of suppliers/contractors. p35
HR3. Description of policies and procedures to evaluate and address human rights performance within the supply chain and contractors, including monitoring systems and results of monitoring. p35
Non-discrimination
HR4. Description of global policy and procedures/programs preventing all forms of discrimination in operations, including monitoring systems and results of monitoring. p28-32
Freedom of Association and Collective Bargaining
HR5. Description of freedom of association policy and extent to which this policy is universally applied independent of local laws, as well as description of procedures/programs to address this issue. p28
Child Labour
HR6. Description of policy excluding child labor as defined by the ILO Convention 138 and extent to which this policy is visibly stated and applied. HP
Forced and Compulsory Labour
HR7. Description of policy to prevent forced and compulsory labor and extent to which this policy is visibly stated and applied. HP
Society
Community
SO1. Description of policies to manage impacts on communities in areas affected by activities, as well as description of procedures/programs to address this issue. p37
Bribery and Corruption
SO2. Description of the policy, procedures/management systems and compliance mechanisms for organizations and employees addressing bribery and corruption. p19-20・HP
Political Contributions
SO3. Description of policy, procedures/management systems and compliance mechanisms for managing political lobbying and contributions. HP
Product Responsibility
Customer Health and Safety
PR1. Description of policy for preserving customer health and safety during use of products and services, and extent to which this policy is visibly stated and applied. p25
Products and Services
PR2. Description of policy, procedures/management systems and compliance mechanisms related to product information and labeling. p26
Respect for Privacy
PR3. Description of policy, procedures/management systems and compliance mechanisms for consumer privacy. p22
PR11. Number of substantiated complaints regarding breaches of consumer privacy. N.A.
*Note
N.A.: Not Applicable
H P: Posted on the website
www.Corporateregister.com 24/01/2008

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Aiming to be a trustworthy company in harmony with society

DENSO CSR REPORT

Aiming to be a trustworthy company in harmony with society

URL More detailed data http://www.denso.co.jp/en/csr/report/2007/index.html

Period and scope of this report About the cover

1 DENSO CSR REPORT 2007

DENSO Corporate Information 05

Feature: DENSO CSR Challenge 11

Risk Management and Information Security 21

Report on Social Responsibility 23

For Our Customers 25

With Our Associates 28

With Our Shareholders and Investors 34

With Our Suppliers 35

With the Global and Local Communities 37

Communications for CSR 41

Environmental Management (Eco management) 45

Development and Designing (Eco products) 53

Production and Logistics (Eco factory) 59

Coordination with Society (Eco friendly) 65

Opinions from Stakeholders and Responses of DENSO 67

DENSO CSR REPORT 2007 2

Aiming to become a good partner in

We appreciate that our customers and our stakeholders

In recent years, together with the efforts to build a

3 DENSO CSR REPORT 2007

behavior of our more than 110,000 associates working

Contributing to build an advanced We believe that “hitozukuri” (human resource

DENSO CSR REPORT 2007 4

Corporate Overview Economic Reporting

* Net income for the current year, excluding dividends

Thermal Systems Powertrain Control Systems

Electronic Systems Electric Systems

Engine electric control units Monolithic ICs Sensors

Alternators Electric power steering Electric power steering

5 DENSO CSR REPORT 2007

•Employees •Return on equity (ROE) •Sales by Business segment

Business Development by Region (Employment / Scale of operation)

Asia, Oceania, and others

Manufacturing companies Others

DENSO CSR REPORT 2007 6

Summary of fiscal 2006

Aiming to be a trustworthy company in Driven by the DENSO spirit

DENSO Group Declaration of Corporate Behavior

7 DENSO CSR REPORT 2007

We rest on our four pillars of “quality, technology, service,

In order that each of our more than 110,000 associates

•We will strive for an open and fair information

We are working on the activities of environmental

DENSO CSR REPORT 2007 8

Our Activities of CSR

External recognition for environmental

9 DENSO CSR REPORT 2007

Major Results for fiscal 2006

In order to co-exist with 75 percent for group company •Strengthen respective

DENSO CSR REPORT 2007 10

A company that is trusted and supported by society

Environmental conservation activities by DENSO

Foresight Credibility Collaboration