Supply Chain Management

Approach

Social Background

The rapid globalization of corporate operations has brought to light human rights violations, labor problems, and issues with environmental destruction, mainly at suppliers in developing countries. Casio recognizes that companies must undertake CSR efforts not only in their own organization but also throughout the entire supply chain.

Imgage: SDGs

Risks and Opportunities for the Casio Group

When a human rights violation, labor problem, or environmental damage incident occurs in the supply chain, the company can be exposed to risks such as suspension of transactions, a tarnished brand image, labor strikes and litigation. Given these circumstances, Casio must fulfill its social responsibilities, including the protection of human rights, good labor relations, and environmental protection throughout the supply chain. Based on its Procurement Policies, Casio is working across the supply chain to improve its CSR activities while enhancing its initiatives to ensure appropriate transactions.

Policy

Casio has established Procurement Policies in order to execute its social responsibility to conduct fair and equitable transactions throughout the supply chain. The policies cover matters including legal compliance, respecting human rights, labor, safety, and health, as well as environmental protection such as biodiversity preservation and risk control of chemical contents and information security. Casio constantly improves its socially responsible procurement by obtaining the understanding and support of suppliers for the policies and building strong partnerships.

Procurement Policies

Casio aims to fulfill its social responsibilities, including compliance with relevant laws and social norms, and protection of the environment, through fair and equitable transactions throughout the supply chain by strengthening partnership with suppliers.

1. Fair and equitable transactions

Casio carries out fair and equitable transactions by providing equal opportunities to all suppliers (and candidates) in and outside Japan in accordance with its internally established procedures.

2. Compliance with laws and social norms

Casio's procurement activities comply with all relevant laws, social norms, standards and treaties worldwide, including the protection of human rights, the prohibition of child labor, forced labor and discrimination, and avoiding the use of conflict minerals, and respect for freedom of association, the right to associate, and the right to collective bargaining, as well as ensure that absolutely no contact is made with organized criminal elements. Therefore, Casio requires its suppliers to observe the same legal and social requirements.

3. Environmental protection

Casio helps to protect the global environment through environmentally friendly procurement, which is based on the Casio Environmental Vision and Casio's Environmental Declaration, in cooperation with suppliers.

4. Strengthening partnership with suppliers

Casio builds up relationship of trust with its suppliers through reciprocal efforts, such as merging and complementing mutual technological development abilities, supply chain cooperation, compliance with laws and social norms and protection of the global environment, which will benefit both parties.

5. Policies on supplier selection and transaction continuation

Casio initiates and continues transactions with suppliers based on comprehensive evaluation criteria, which include compliance with laws and social norms, environmental protection, proper information security, respect for intellectual property, sound and stable corporate management, superior technological development ability, right price and quality, stable supply capabilities and electronic transaction systems.

6. Securing right price and quality

Casio endeavors to secure right price and quality in order to provide its customers with stable supply of optimal products, which ensures that Casio gains the full confidence of customers around the world.

7. Prohibition of personal-interest relationships

Casio does not allow any employees to have personal-interest relationships with any suppliers.

In order to ensure compliance with the Procurement Policies together with its suppliers, Casio has established the Supplier Guidelines (available at link below). All of Casio's suppliers in Japan and elsewhere have agreed to these guidelines to help Casio fulfill its social responsibilities.

Casio is also managing its supply chain more successfully by introducing a regular monitoring system that ensures that these guidelines are properly fulfilled.

Supplier Guidelines

Management Approach

System

An executive officer, who is also the senior general manager of the Production Headquarters, is responsible for the system, and a department has been established to promote CSR procurement within the Supply Chain Control Unit at Casio Computer Co., Ltd. The department is working to promote CSR throughout the supply chain while collaborating with relevant organizations such as the CSR promotion departments and production sites.

In addition, a Supplier Hotline has been set up as a contact point for reports from suppliers concerning any potential fraud or compliance violations by Casio employees.

Image: System

Casio Supply Chain

Casio carries out broad procurement over three regions, namely Japan, the China area, and the ASEAN area.

For a regional breakdown of the total value of Casio's procurement, the ratios are approximately 40% for Japan, 49% for the China area, and 11% for the ASEAN area.

KPI and Performance for Material Issues

Evaluation ◎: All targets met, ○ : Most targets met, △ : Remaining issues outweigh results, × : No progress made

Material Issues for Casio

FY2019 Targets and KPI

FY2019 Performance

Evaluation

FY2020 Targets and KPI

Promoting CSR procurement (1) Implement CSR education at Casio sites and at suppliers, and hold awareness raising campaign during one vendor meeting in China Implemented CSR education at Casio sites and at suppliers, and held awareness raising campaign during one vendor meeting in China
Presentation on human rights issues made by Casio headquarters

(1) Implement CSR education at Casio sites and at suppliers, and hold awareness raising campaign during one vendor meeting in China
(2) Implement annual audit follow-up and confirmation prior to the annual audit (including documentation) Conducted follow-ups for CSR audits requested by customers at 4 production sites
In China, conducted onsite inspections at 8 suppliers
In Thailand, conducted onsite inspections at 5 suppliers

(2) Implement annual audit follow-ups
Continue audits of production sites, and those based on customer requests
Implement production site audits, and document investigations
Continue supplier onsite audits

Activity Results

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.

A business strategy briefing was also held in Japan 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.

Briefing on Procurement Policies in Japan

This year, Casio invited 200 participants from about 150 business partners to a business strategy briefing for the first time in Japan. The future direction for products, development and technologies were laid out for each product category, and Casio asked business partners to actively make proposals with the aim of “co-creation.”

Photo:Briefing on Procurement Policies in Japan
Photo:Briefing on Procurement Policies in Japan

Supplier message

Hideo Ito President, Nihon Seimitsu Co., Ltd.
Hideo Ito
President, Nihon Seimitsu Co., Ltd.

With manufacturing sites in Vietnam and Cambodia, Nihon Seimitsu Co., Ltd. is the only company in the ASEAN countries that has an integrated manufacturing system for palm-size decorative metal pieces that encompasses the mold design, mold manufacture, press, polishing, and surface processing (coloring). We are working hard to ensure thorough human resource development and compliance to support further growth, and hope to grow into a corporate group that supports global manufacturing together with the ASEAN countries, where our manufacturing sites are located. We will spread CSR activities throughout the company so that we can help protect the environment and give back to society. We will support Casio’s Procurement Policies as a partner going forward, and will actively take part in further CSR activities. We hope to help improve the added value of Casio products to the best of our abilities.

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. Business partners who have made particularly impressive contributions are recognized at these briefings.

PhotoBriefing on Procurement Policies in China
PhotoBriefing on Procurement Policies in China
Photo:H.W.Chan, , Managing Director,  FAIR FUTURE INDUSTRIAL LTD.
H.W.Chan, , Managing Director, FAIR FUTURE INDUSTRIAL LTD.

Comments on CSR by H.W.Chan, , Managing Director, FAIR FUTURE INDUSTRIAL LTD.

I want to work together with Casio on CSR activities to create a future in which both companies flourish. With this goal, I consider various aspects such as human rights, safety and the environment.

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 2019 questionnaire was sent to 183 companies in Japan, and the response rate was 100%, clearly indicating suppliers’ high level of interest in CSR fulfillment. Responses were received from 332 companies (268 companies in China and 64 companies in Thailand), also 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 2019, Casio conducted onsite inspections at 8 companies in China. In Thailand, it conducted onsite inspections at 5 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 four 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.(PDF)

Questionnaire results

Questionnaire given to a total of 515 suppliers
Responses to all questions received from 515 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 last year, 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 4.6
Ⅵ Information Security 4.4
Ⅶ Contribution to Society 3.7
Total 4.4
Image: Responses by CSR category in China and Thailand

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 4.2
Ⅱ Occupational Health and Safety 4.2
Ⅲ Environment 4.3
Ⅳ Fair Trading 4.0
Ⅴ Product Quality and Safety 4.3
Ⅵ Information Security 4.1
Ⅶ Contribution to Society 3.4
Total 4.1
Image: Japan responses by CSR category

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.

Click here for more details

Improving CSR across the supply chain

Image: Improving CSR across the supply chain

Responsible minerals sourcing

Where minerals such as tin, tantalum, tungsten, gold (3TG) and cobalt are mined in conflict-affected or high-risk areas such as the Democratic Republic of Congo (DRC), the revenue from the mining and trading of these minerals is a source of funding for armed groups and anti-government forces carrying out atrocities and human rights abuses. Minerals sourced from such conflict-affected or high-risk areas have the potential to promote conflict, human rights violations and environmental degradation.

Casio considers mining to be an intensive process involving social and environmental risks, and believes the mining of metals and minerals, including conflict minerals (3TG) and those in the DRC, as well as other minerals and minerals in other regions, must be managed.

Casio’s stance is that we want no part in any human rights violations or environmental destruction. While sourcing minerals that originate in conflict-affected or high-risk areas, we will not, by any means, tolerate, knowingly profit from, contribute to, assist with or facilitate the commission by any party of any form of human rights violations or abuses, or support operations that result in the degradation of socioeconomic and environmental stability.

Casio also requires its suppliers to adhere to this policy and expects them to support and promote compliance within the supply chain.

As part of this responsible minerals sourcing policy, Casio will:

Identify and prioritize minerals for inclusion in our responsible sourcing strategy (currently 3TG and, as of 2020, cobalt for upcoming projectors);

Conduct due diligence on prioritized minerals in accordance with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas;

Require suppliers to conduct due diligence on prioritized minerals in accordance with OECD Guidance and provide routine reporting using the tools developed by the Responsible Minerals Initiative (RMI) to enable supply chain transparency;

Work cooperatively with its supply chain, industry groups (RMI), government, civil society, and other organizations to develop the supply of responsibly sourced minerals when sourcing prioritized minerals that originate in conflict-affected or high-risk areas;

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

Continue to collect relevant information regarding industry trends in the US, customer reactions and movements in the EU and other regions;

Adopt a policy of using minerals that are legally mined or acquired, even where those minerals were mined in the Democratic Republic of Congo (DRC) or its neighboring countries, and regardless of any conflict in that region;

Present lists of surveyed smelters using the CMRT and CRT in response to requests from customers.