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As one of the leading countries in the environmental conservation efforts, Japan has made much progress in recent decades. The role of environmental accounting (EA) within Japan is divided into internal and external functions. Internal functions deals with the management of environmental conservation costs and activities. It promotes effective environmental conservation activities through an adequate decision making process. External functions of the EA include public reporting of environmental costs and effects of a company. By disclosing a quantitative measurement of such activities, it opens up the company to further progress. These quantitative measures are environmental conservation costs referring to investment and expenses which help companies keep track the progress in the processes. The purpose of this paper is to provide a closer examination of the relationship between the companies reported environmental costs, corporate responsibility rating and their financial performance. To address the research questions in this study, environmental costs were collected from the Japanese company's Corporate Social Responsibility Report (CSR). From the analysis, we found empirical support for the view that companies' financial performance is positively related to average CSR rating and environmental conservation costs. [ABSTRACT FROM AUTHOR]