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External Evaluation

Independent Opinion on the Sustainability Report 2023

The opinion presented here was written based on the content of this report, interviews with Casio personnel responsible for procurement, human resources, environmental and CSR initiatives.

Casio implements CSR, ESG and sustainability initiatives at the frontline level, with a focus on reducing the company’s environmental impact and ensuring socially responsible procurement.
Casio is now at a stage where the commitment and initiative of top management and the systems for training the employees who play important roles in execution must go even further to address major social issues such as decarbonization and human rights in a concrete manner on a global scale. 

Commendable efforts by Casio

  • Regarding CSR initiatives at its suppliers, Casio has adopted a five-point scale for the response options on its questionnaire on CSR implementation in the supply chain in order to ascertain more accurately how suppliers are reducing their environmental impact and protecting the human rights of workers and added a question related to greenhouse gas emissions. The company received responses from 452 of 453 suppliers in Japan, China and Thailand and provided feedback based on the overall results. In terms of cumulative transaction value, Casio visited 76% of its suppliers in China and 56% in Thailand on site. The scale of response choices on its questionnaire is especially commendable as it represents a level that could become the industry’s de facto standard.
    Moving forward, I hope that Casio improves the questions to increase the accuracy of responses regarding biodiversity and human rights, including the technical intern trainee system and harassment. I also hope Casio adds more questions and shares specific cases to encourage suppliers to reduce GHG emissions and take action on human rights, and that the level of suppliers’ CSR initiatives will be raised by sharing specific cases.

Points for improvement while commending progress to date

  • Regarding environmental management, Casio aims for a 38% reduction in GHG emissions by fiscal 2031 and net zero emissions by fiscal 2051, with a 30% reduction in Scope 3 emissions by fiscal 2031, all compared to fiscal 2019. As an initiative based on SBT, RE100, and TCFD membership, Casio has introduced renewable energy at its major sites in Japan and obtained third-party verification of renewable energy usage. In addition, Casio is conducting scenario analysis and planning countermeasures based on the TCFD guidelines, mainly at the management level of each business unit and promoting a change in packaging from plastic to paper, including recycled paper, for electronic calculators and watches. I particularly commend these initiatives. Moving forward, I hope this will lead to more sustainable use of forestry resources, including improvement in traceability in the procurement of paper, the use of which is expanding due to the shift away from plastic, in addition to an increase in the recycling rate and consideration of the ecosystem in the production and use of paper.
  • Regarding biodiversity preservation, I applaud Casio for introducing more collaborative watch models made with NGOs and conducting impact surveys at major sites in Japan in fiscal 2018. Moving forward, I continue to have high hopes that Casio will work with local research organizations and NGOs on conservation activities in the countries where its main production and sales sites are located, as well as using watches with thermometer and hygrometer functions as an opportunity to contribute to biodiversity.
  • In terms of making workplaces more supportive, it is commendable that the percentage of employees, including non-regular employees, of Casio Computer Co., Ltd. who utilize leaves of absence or the shorter working hours system for childcare or nursing care has reached 4.4%. It is particularly commendable that the percentage of eligible men in the workplace who utilize childcare leave has reached 52% and that KPIs have been set for measures related to lifestyle diseases, smoking, and mental health as part of Casio’s initiatives for health and productivity management. At the same time, going forward, I hope that Casio will work to advance analytical and management approaches so that the diverse work styles that were promoted due to COVID-19 measures can be tied to higher productivity and value creation, thereby leading to reduction of total working hours and increased uptake of paid leave. Meanwhile, I am concerned that Casio’s rate of employment for persons with disabilities has fallen below the level of Japan’s legally mandated rate. At the same time, going forward, as I have reiterated in the past, I continue to have high hopes that, along with regular interviews of employees every quarter, the company will build communities for each type of disability and occupation, while promoting even more supportive workplaces.

Points for improvement

  • Looking at the group-wide CSR, ESG and sustainability implementation structure, it is admirable that Casio established high material goals and KPIs and is managing progress. Going forward, I recommend that the scope of discussions by the Sustainability Committee be expanded mainly to human rights and greenhouse gas emissions reduction. In addition, I would like to repeat my recommendation that the company encourage value creation for the near-term future and initiatives on the frontlines with Sustainability Leaders who serve as facilitators in the field lines, and messages from top management be translated into multiple languages and delivered to workplaces around the world. This will increase opportunities for diverse front-line employees to get a more immediate and deeper understanding of CSR trends at the head office and at sites in various countries.
  • With regard to human rights, I commend Casio for establishing the Basic Policy on Respect for Human Rights and having its own tool for checking the status of human rights, which it reviews. At the same time, I am concerned that the management system, including due diligence, has not subsequently become firmly established. Looking to the future, I continue to strongly hope that the company will establish a human rights due diligence implementation system in each business unit based on the commitment of the senior management and the Sustainability Committee, in order to prepare for demands for the expansion of initiatives mainly from Europe, and that the company will build an implementation system that is integrated into daily management, for instance, incorporating human rights efforts into the performance evaluation criteria for managers. 
  • Regarding the environmental impact reduction data in this report, it is commendable that details are provided on the principal sites in and outside Japan including group companies. My hope, however, would be that Casio do more than just explain its programs. It should continue to increase the level of accuracy of group reporting, by proactively disclosing not only environmental data, but also governance, personnel and procurement initiatives and data.

Points requiring progress in efforts as a global company

  • Regarding corporate governance, especially the role of the Board of Directors, I commend the company for positioning prompt decision-making, appropriate business execution, and the strengthening of management oversight as important issues, and for structuring and operating the Board of Directors in a manner that will help achieve these goals. At the same time, I hope that the Board will evolve so that its structure and operation demonstrate the initiative that may signal a vision and policy for long-term value creation required by TCFD, TNFD and other organizations.
  • In the area of increasing and making the most of employee diversity across the entire Casio Group, I find it commendable that Casio appointed a Chief Human Resource Officer (CHRO) and has started to establish a skill registration system, but I have continued concerns that policies, targets, plans, and persons responsible have not been established, no global HR meetings have been held. Going forward, I recommend concrete planning for portfolio-based global human resources management that crosses departmental and company boundaries, to be achieved during the 2030s. Casio needs an integrated system to promote the development, exchange and evaluation of human resources recruited worldwide, and to expand its human resource database including information on staff hired in each country. I hope that Casio will develop strategies and systems for the proactive utilization of human resource diversity and make human rights and sustainability the core of its human resources development system.

Hideto DeDe Kawakita, Chief Executive Officer International Institute for Human, Organization and the Earth (IIHOE)

Profile of IIHOE: International Institute for Human, Organization and the Earth (IIHOE) is a nonprofit organization (NPO) that has been supporting NPO management and CSR capacity building since 1994.

International Institute for Human, Organization and the Earth (IIHOE) (in Japanese)

Inclusion in Environment, Social and Governance (ESG) Indices

FTSE4Good Index

The FTSE4Good Index, developed by FTSE Russell, an index and data provision services company capitalized by the London Stock Exchange Group, evaluates corporate sustainability in terms of environmental, social, and governance aspects. Casio Computer Co., Ltd., has been included in the FTSE4Good Index since June 2016.

SOMPO Sustainability Index

In June 2017, Casio Computer was selected for inclusion in the SOMPO Sustainability Index created by Sompo Japan Nipponkoa Asset Management Co., Ltd. Based on this unique active index, SNAM launched the SOMPO Sustainable Investment Fund in August 2012. This is a responsible investment product for pension funds and institutional investors that invests in a wide range of companies with high ratings based on factors. After the companies are selected with a focus on the results of ESG surveys by research firms, the portfolio weights are determined based on the SOMPO Sustainability Index. In addition, the Government Pension Investment Fund (GPIF) has been applied to the three components listed below among the environmental, social, and governance (ESG) indices selected in July 2017.

 In addition, Casio has been included in the four components listed below among the environmental, social, and governance (ESG) indices selected by Japan’s Government Pension Investment Fund (GPIF) in July 2017.

FTSE Blossom Japan Index

Developed by FTSE Russell, the FTSE Blossom Japan Index tracks the performance of firms with outstanding compliance activities that meet diverse standards for ESG performance.

FTSE Russell (the trading name of FTSE International Limited and Frank Russell Company) confirms that CASIO COMPUTER CO., LTD. has been independently assessed according to the FTSE Blossom Japan Index criteria, and has satisfied the requirements to become a constituent of the FTSE Blossom Japan Index. Created by the global index provider FTSE Russell, the FTSE Blossom Japan Index is designed to measure the performance of companies demonstrating strong Environmental, Social and Governance (ESG) practices. The FTSE Blossom Japan Index is used by a wide variety of market participants to create and assess responsible investment funds and other products.

FTSE Blossom Japan Sector Relative Index

Developed by FTSE Russell, the FTSE Blossom Japan Sector Relative Index is designed to be sector-neutral, reflecting the relative performance of Japanese companies with superior environmental, social, and governance (ESG) performance in their respective sectors. In order to promote the transition to a low-carbon economy, companies with particularly high greenhouse gas emissions are included in the index only if they are recognized for their improvement efforts based on the TPI Management Quality Score.

FTSE Russell (the trading name of FTSE International Limited and Frank Russell Company) confirms that CASIO COMPUTER CO., LTD. has been independently assessed according to the FTSE Blossom Japan Index criteria, and has satisfied the requirements to become a constituent of the FTSE Blossom Japan Sector Relative Index. The FTSE Blossom Japan Sector Relative Index is used by a wide variety of market participants to create and assess responsible investment funds and other products.

MSCI Japan Empowering Women Index

Created by MSCI Inc., the MSCI Japan Empowering Women Index is made up of members of various industries with excellent records in promoting and maintaining gender diversity. The companies are selected from among the top 500 Japanese corporations by market capitalization.

* THE INCLUSION OF CASIO COMPUTER CO., LTD. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF CASIO COMPUTER CO., LTD. BY MSCI OR ANY OF ITS AFFILIATES.
THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

S&P/JPX Carbon Efficient Index

The S&P/JPX Carbon Efficient is designed to measure the performance of companies in the Tokyo Stock Price Index (TOPIX), while overweighting or underweighting those companies that have lower or higher levels of carbon emissions per unit of revenue.

Morningstar Japan ex-REIT Gender Diversity Tilt Index

The Morningstar Japan ex-REIT Gender Diversity Tilt Index uses the data and scoring methodology provided by Equileap and is designed to emphasize companies with established gender diversity policies embedded in their corporate culture and that are committed to equal opportunities for employees, irrespective of their gender.

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