CSR Accounting

At MSIG, we understand that CSR is a strategic investment for the sustainable growth of a corporation and engage in CSR accounting to best measure the related costs and effects of CSR activities quantitatively. CSR accounting is conducted as a tool for better communication with stakeholders and for the further penetration of CSR throughout the corporate culture.

We have established the MSIG CSR accounting model based on an environmental accounting framework. We define “CSR accounting standards” in internal manuals that describe our objects and methods of measuring in an effort to conduct more meaningful CSR accounting. We measure the costs and effects of social contribution and welfare activities, ethics and compliance activities, and environmental protection activities. CSR-related costs are calculated from expenses and losses based on financial accounting as well as the difference between the ordinary prices of products and services and the lower prices at which we offer them. With regard to CSR-related effects, those that contribute profits under financial accounting are considered “internal effects”, while influences on general society are classified as “outside effects”. Furthermore, “economic effects” are determined by measuring in monetary units, and items classified as “other effects” are measured in non-monetary, quantitative terms or described qualitatively.

To compare costs and effects, it is necessary to take into consideration other effects for which monetary conversion is not possible.

Total CSR-related costs came to ¥10.7 billion, up ¥1.5 billion from fiscal 2005. The main factors behind this increase were the construction of various systems to bolster the compliance structure, expansion of the staff in the Compliance Department, and increase in the number of vehicles covered by automobile insurance discounts for eco-friendly cars. In the category of internal effects, the total economic effects amounted to a loss of about ¥50 million, down about ¥300 million from fiscal 2005. This result derived from the larger amount of documents handed to customers for explanation of Important Notice and revision of pamphlets, which drove up paper use costs and made the effects less than the environmental protection costs. In the category of outside effects, the total economic effects came to ¥1.4 billion, down slightly from fiscal 2005. This was due to a decrease in donations from fiscal 2005.