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.