Independent Opinion on the Sustainability Report 2022
The opinion presented here was written based on the content of this report, interviews with Casio personnel responsible for procurement, human resources, environmental and Sustainability /CSR initiatives.
Casio implements CSR 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 top management can be expected to lead the efforts to address important medium- and long-term issues such as decarbonization and human rights.
│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 questions related to greenhouse gas emissions. The company received responses from 433 of 434 suppliers in Japan, China and Thailand and provided feedback based on the overall results. 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 improvements will be made to the questions to improve the accuracy of responses regarding greenhouse gas (GHG) emissions reduction and human rights, including harassment, and promote suppliers’ initiatives, and that their CSR initiatives will effectively evolve to reach a higher level, with sharing of specific cases, introduction of electric power suppliers, and so on.
│Points for improvement while commending progress to date
- Casio has established a Basic Policy on Respect for Human Rights and has its own tool for checking the status of human rights, and it continues to review this status. Looking to the future, I continue to strongly hope that an implementation framework for human rights due diligence will be established based on the commitment of the company’s senior management, including its Sustainability Committee, in order to prepare for demands for the expansion of initiatives mainly from Europe. I look forward to seeing the company build a compliance promotion system with integrated daily management, such as incorporation of compliance efforts into the performance evaluation criteria for managers.
- With regard to anti-corruption and compliance, Casio has established the Casio Business Conduct Guidelines to replace the Casio Group Code of Conduct. The guidelines clearly state that Casio “respects human rights in all aspects of business activities” and that “senior management and heads of organizations are responsible for setting a good example of leadership by fully observing the guidelines and ensuring they are completely known to everyone.” I commend the company for this and also for disclosing the results of whistleblowing. I hope that the guidelines will become firmly established throughout Casio, for example as the company provides opportunities to understand and share the practices of senior management and heads of organizations.
- With regard to its medium- to long-term environmental management policy and environmental management promotion system, Casio revised its long-term target for GHG emissions to a 38% reduction by fiscal 2031 and net zero emissions by fiscal 2051, as well as a 30% reduction in Scope 3 emissions by fiscal 2031, all compared to fiscal 2019. I admire its introduction of renewable energy at major sites in Japan and its receipt of third-party verification of renewable energy usage as initiatives based on SBT, RE100, and TCFD membership. I also commend the implementation of scenario analysis and planning of countermeasures based on the TCFD guidelines, mainly at the management level of each business unit. Looking forward, I hope the company will do more to encourage GHG emissions reduction efforts by raw materials suppliers, by sharing case studies and collaborating with other companies in the industry, based on minimum customer impact at the stage of use, which is a unique characteristic not seen in other companies. I also hope the company will disclose the figures on which the introduced case studies are based and increase their accuracy.
- Regarding biodiversity preservation, I applaud Casio for introducing more collaborative watch models made with NGOs, and for continuing some conservation efforts and restarting others based on surveys conducted at major sites in Japan, while taking care to prevent the spread of infectious disease, as well as its links with NGOs. I have high expectations that, going forward, Casio will continue to release models that will help conserve nature and biodiversity worldwide. At the same time, regarding efforts to procure paper with an emphasis on sustainability and to reduce plastic waste, which has a substantial impact on rivers and marine ecosystems, I hope the company will advance its efforts in areas outside Japan, which represent Casio’s main markets, to at least the same level as in Japan.
- In terms of making workplaces more supportive, it is commendable that Casio has a 100% rate of return by employees who took childcare le ave and that the percentage of employees of Casio Computer Co., Ltd., who utilize leaves of absence or the shorter working hours system for childcare or nursing care has reached 7.4%. It is particularly commendable that the percentage of male employees who utilize childcare leave has reached 36%. At the same time, I recommend setting KPIs for initiatives related to lifestyle-related diseases, smoking, and mental health, and sharing with employees and workplaces the progress made against them, as well as working 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. I appreciate that Casio’s rate of employment for persons with disabilities has returned to the level of Japan’s legally mandated rate. Along with regular interviews of employees every quarter, I hope the company will continue to build communities for each type of disability and occupation, while promoting even more supportive workplaces.
│Points for improvement
- Looking at the group-wide CSR 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 GHG emissions reduction. In addition, in order to encourage value creation for the near-term future and to encourage initiatives on the front lines by Sustainability Leaders, I would like to repeat my recommendation that 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.
- 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 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, and KPIs continue to be no more than defensive indicators. 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 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
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.