Sustainability Management

External Evaluation
Independent Opinion on the Sustainability Report 2021

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 uses management cycles for its CSR initiatives, with a focus on reducing the company’s environmental impact and ensuring socially responsible procurement. Casio is now at a stage where we can expect that these efforts, including the upgraded human rights measures, will expand into company-wide initiatives that include top management and human resource departments.

│Commendable efforts by Casio

Regarding CSR initiatives at its suppliers, Casio revised the response options on its questionnaire on CSR implementation in the supply chain to a five-point scale in order to ascertain more accurately how suppliers are reducing their environmental impact and protecting the human rights of workers. The company received responses from all 454 suppliers in Japan, China and Thailand and provided feedback based on the overall results. The revision of 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 emissions reduction and human rights, and that suppliers’ CSR initiatives will effectively evolve to reach a higher level, with sharing of specific cases, introduction of electric power suppliers, and so on.

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 provide feedback to group companies concerning the overall survey results. It has expanded its whistleblower hotlines to give access to suppliers and discloses the number of reports to these hotlines. 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.

│Points for improvement while commending progress to date

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 greenhouse gas 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.

With regard to its medium- to long-term environmental management policy and environmental management promotion system, Casio has specified the long-term goals of a 38% reduction in greenhouse gas (GHG) emissions by fiscal 2031 and 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 the efforts to obtain science-based target (SBT) certification and join the RE100 (Renewable Energy 100%) and TCFD initiatives and to develop and market the label writer Lateco, which avoids single-use cartridges. Looking forward, I hope the company will encourage greenhouse gas emissions reduction efforts by raw materials suppliers by sharing case studies, cooperating with other companies in the industry, and so on, starting with measures with minimum customer impact at the stage of use, while taking an overall view of the product life cycle.

Regarding biodiversity preservation, I applaud Casio for introducing more collaborative watch models made with NGOs, and for expanding conservation efforts 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, I hope the company will advance efforts to procure paper with an emphasis on sustainability while reducing plastic waste, which has a substantial impact on rivers and marine ecosystems.

In terms of making workplaces more supportive, it is commendable that Casio has a 100% rate of return by employees who took childcare leave 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 6.57%. I would also like to give Casio credit for improving the rate of employees who follow up on health risks identified during regular checkups, for setting up a nursing concierge desk, and for the health insurance association’s resumption of a subsidy system for employees going through smoking cessation treatment. 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.

│Points for improvement

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), 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.

I am concerned that Casio’s rate of employment for persons with disabilities was slightly lower than Japan’s legally mandated rate in 2020. 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.

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.

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.

│MSCI ESG Leaders Indexes

MSCI ESG Leaders Indexes, developed by MSCI (Morgan Stanley Capital Investment), consist of companies that are excellent in environmental, social and governance (ESG) aspects. Casio Computer Co., Ltd., had been included every year in its predecessor, the MSCI Global Sustainability Indexes* since October 2010.

* 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.

│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, 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.

│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.

│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.