Supply Chain Management | CASIO

Supply Chain Management

Supply Chain CSR Procurement

│Disseminating Supplier Guidelines

Casio carries out the majority of its production outside Japan at Casio plants and manufacturing subcontractors (electronic manufacturing services). Every year, Casio holds briefings on its Procurement Policies in Southern China.

Initially, these briefings simply involved Casio explaining its business policies to suppliers and asking them to undertake initiatives. Since fiscal 2010, however, Casio has been using these briefings as an opportunity for two-way communication. Suppliers are invited to participate actively, for instance by asking those with exemplary CSR initiatives to present examples of their efforts to promote and improve CSR. This enables the sharing of useful case studies and know-how for addressing CSR. By working collaboratively with its suppliers in this way, Casio is continually improving the level of CSR performance in its supply chain.

In June 2009, Casio revised the Basic Business Agreement it signs with suppliers in Japan. Clauses were added to require measures such as legal compliance, respect for human rights, and environmental protection. The new agreement is being rolled out steadily.

Since 2019, a business strategy briefing has also been held in Japan every year to explain Casio’s procurement strategy and policies. In this way, Casio has set up opportunities to explain its Procurement Policies to major suppliers all over the world and is actively sharing and exchanging information to build close reciprocal relationships.

│Business Strategy Briefing in Japan

In 2019, Casio invited 200 participants from about 150 business partners to a business strategy briefing. In 2020, however, the briefing was postponed due to the impact of the COVID-19 pandemic. While no decision has been made yet about a briefing in 2021, we are engaging in ongoing communication with suppliers.

│Supplier Message

Takao Maruyama
President
SHINDENSHI Co., Ltd.

Offering Distinctive Technology and Reliable Quality Creation
At Shindenshi, we have focused on the manufacturing and sales of all types of products with magnetic applications, particularly coil windings, since our establishment. We handle all stages of production for various types of coil windings, from development to trial manufacturing and mass production, at plants in and outside Japan.

In our partnership with Casio Computer Co., Ltd., starting with the first watch movement coil we produced in 1986, we have been proud to engage in the lengthy processes spanning from development through mass production for components including radio wave antenna coils and choke coils. With watch movement coils in particular, we have come to possess technology capable of stably winding copper wire, which is now known as ultrafine wire, starting from the stage of collaboration. As we work day by day to produce these components, we take great pride in the fact that they are being used to supply the brands Casio develops, including the world-renowned G-SHOCK.

Looking forward, guided by our motto of “stability, continuation, and innovation,” we offer our endorsement of the Procurement Policies, pledge to strengthen our CSR activities, and hope to make ongoing contributions to Casio as a strong partner.

│Briefing on Procurement Policies in China

Casio carries out the majority of its production outside Japan at Casio plants and manufacturing subcontractors (electronic manufacturing services). Every year, Casio holds briefings on its Procurement Policies in Southern China. In 2020, however, the briefing was postponed due to the impact of the COVID-19 pandemic. While no decision has been made yet about a briefing in 2021, we are engaging in ongoing communication with suppliers.

│Comprehensive Management of CSR Performance

In fiscal 2008, Casio started conducting a questionnaire survey* of principal suppliers in Japan on CSR performance in order to confirm the status of CSR procurement. In fiscal 2010, the survey was expanded to include suppliers in China and Thailand.

Based on the fiscal 2012 survey results and changes in society’s expectations, the questionnaire for suppliers was revised in fiscal 2013. Overlapping questions were eliminated and a new theme, policies for avoiding conflict minerals, was added.

The fiscal 2021 questionnaire was sent to 156 companies in Japan, and responses were received from 155 companies, for a response rate of 99.4%, clearly indicating suppliers’ high level of interest in CSR fulfillment. For suppliers outside Japan, responses were received from 299 companies (233 companies in China and 66 companies in Thailand), for a response rate of 100%. Again, the great concern for CSR fulfillment among suppliers is clear. Casio compiles and analyses the response data, and shares the results with suppliers, along with Casio's approach to CSR procurement.

Since fiscal 2011, Casio has been conducting onsite audits of major suppliers in China and Thailand with local staff members of the CSR promotion projects launched at sites in those countries. In fiscal 2012, the company started planning onsite inspections performed mainly by local Casio staff, and the number of visits is increasing.

In fiscal 2021, Casio conducted onsite inspections at 8 companies in China. In Thailand, it conducted onsite inspections at 8 companies. Even with the suspension in inspections caused by the flooding, it has cumulatively covered almost all suppliers in Thailand. Going forward, Casio will continue onsite inspections with the aim of instilling commitment to CSR throughout the supply chain.

CSR inspections were also conducted at the request of a major distribution customer at three of Casio’s plants.

*The questionnaire was prepared in accordance with a Supplier Checklist for CSR Procurement based upon the Guidebook for Supply Chain Implementation of CSR Procurement published by the Japan Electronics and Information Technology Industries Association (JEITA). It covered: (1) human rights and labor conditions; (2) health and safety; (3) the environment; (4) fair transactions and ethics; (5) quality and consumer safety; (6) information security; and (7) social contribution.

A list of the items included in each category of the questionnaire is available here.

Questionnaire results
Questionnaire given to a total of 476 suppliers
Responses to all questions received from 476 suppliers (100% response rate)

Status of responses by CSR category

China and Thailand
An abstract five-point evaluation system (for example: 5 = sufficient measures, 3 = not enough measures, and 1 = no measures) was used until fiscal 2018. Starting in 2019 however, specific achievement levels are listed for each and every question, just like in Japan, which started doing this in fiscal 2018. This helps to more objectively assess the current state of CSR activities at suppliers. In addition, the guidelines for further improvement have also been clarified.

As a result, the evaluation scores were lower than 2019, but there were no serious problems requiring an urgent response. In addition, points for improvement were progressively clarified for each supplier and improvement measures were requested.

Responses by CSR category in China and Thailand

  Responses by CSR category
0 Overall Promotion of Corporate Social Responsibility 3.8
Ⅰ Human Rights and Labor 4.5
Ⅱ Occupational Health and Safety 4.4
Ⅲ Environment 4.5
Ⅳ Fair Trading 4.4
Ⅴ Product Quality and Safety 4.7
Ⅵ Information Security 4.4
Ⅶ Contribution to Society 3.8
Total 4.3
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Japan
Points for improvement were progressively clarified for each supplier and, after discussion, improvement measures were requested.

Japan responses by CSR category

  Responses by CSR category
0 Overall Promotion of Corporate Social Responsibility 3.7
Ⅰ Human Rights and Labor 4.4
Ⅱ Occupational Health and Safety 4.3
Ⅲ Environment 4.3
Ⅳ Fair Trading 4.0
Ⅴ Product Quality and Safety 4.5
Ⅵ Information Security 4.1
Ⅶ Contribution to Society 3.3
Total 4.1
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Selection of new suppliers

Based on the Procurement Policies, before Casio starts doing business with a new supplier, a comprehensive evaluation is carried out. The prospective supplier is checked based on the following criteria: compliance with laws and social norms, environmental protection measures, proper data protection, respect for intellectual property rights, management soundness and stability, outstanding technology development capabilities, ability to provide the desired price, quality, and a stable supply, and capabilities for online transactions.

Promotion of green procurement with business partners

With the cooperation of suppliers, the Technical Planning Department in the CS Headquarters at Casio Computer Co., Ltd. is promoting green procurement that considers supplier measures to protect the global environment.

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Improving CSR across the supply chain

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Fiscal 2021 Achievements

Carried out the conflict mineral survey for the eighth year with the cooperation of group companies in and outside Japan.

│Avoiding Any Use of Conflict Minerals

Some minerals, such as tin, tantalum, tungsten, and gold, produced in the Democratic Republic of Congo (DRC) and neighboring African countries have become a source of funding for armed groups and anti-government forces carrying out atrocities. They are called conflict minerals because of their potential to promote conflict, human rights violations, and environmental destruction.

Wanting no part in human rights violations and environmental destruction, Casio’s stance is to completely avoid the use of conflict minerals. The group will continue its efforts to avoid the use of such minerals by working closely with suppliers.

In January 2013, Casio revised its Procurement Policies and Supplier Guidelines, adding a ban on the use of conflict minerals. A question about policies to avoid the use of conflict minerals was also added to the CSR questionnaire sent to suppliers in Japan.

In fiscal 2014, Casio group companies surveyed suppliers worldwide about the use of conflict minerals, using the EICC & GeSI* Conflict Minerals Reporting Template. Worldwide, 480 responses were received in fiscal 2021. The response rate was 100% in fiscal 2021 (99.6% in fiscal 2021).

There are inherent difficulties in conflict mineral investigation, as strict survey implementation requires going all the way back up the supply chain to the smelters. Casio will continue to collect relevant information including customer reactions and industry trends in the US, EU and other regions.

As a member of the Responsible Mineral Trade Working Group of the Japan Electronics and Information Technology Industries Association (JEITA), Casio is also working to improve conflict mineral survey activities in the supply chain through industry collaboration.

│Reduction of Greenhouse Gas Emissions by Suppliers

In calculating greenhouse gas emissions, Casio differentiates between emissions from its own business activities (Scope 1 and Scope 2) and those occurring throughout the value chain, from both upstream and downstream sources (Scope 3). Among these, greenhouse gas emissions resulting from purchased goods and services account for over 60% of total emissions. In order to reduce this category of greenhouse gas emissions, Casio is working to promote emissions reduction activities throughout the entire value chain, with a focus on encouraging key suppliers to set emissions reduction goals.

As of the first fiscal year in which these activities were undertaken, the current status of relevant efforts for respondents to the fiscal 2021 CSR survey was verified. Starting in fiscal 2022, these verification efforts will be further expanded to include greenhouse gas emissions for each individual supplier and the specific status of actual activities being pursued.

At present, Casio is working to determine activity policies for the coming fiscal year and beyond, taking into account results obtained in fiscal 2021, as well as to implement the PDCA cycle, with the aim of achieving a 30% reduction of greenhouse gas emissions by fiscal 2031 in comparison with fiscal 2019 levels as a group-wide objective.

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