Materiality Goals and Efforts｜CITIZEN WATCH CO., LTD.

Formulation of the Materiality Roadmap for 2030

To achieve sustainableed growth, the CITIZEN Group has formulated the Group Materiality Roadmap for 2030 covering goals, KPIs, and measures for addressing four of the aspects of materiality identified by the Group. Efforts toward each of these goals, which also represent priority areas of Group CSR activities, are linked to the plan-do-check-act (PDCA) cycle through self-assessment. FY 2019 efforts to address each aspect of materiality and the roadmap through 2030 are summarized below.

Status of FY 2019 efforts to address each aspect of materiality and the roadmap through 2030

	Materiality	FY 2019	FY 2020	FY 2024	FY 2030
Goals/ KPIs	Enhancing quality compliance	Deployment of activities to raise awareness of the Quality Code of Conduct and integration with the quality management system	Further raising awareness of the Quality Code of Conduct and identifying risks in the state of compliance	Effective risk identification and corrective actions regarding the state of compliance with the Quality Code of Conduct at all facilities	All Group executives and employees comply with the Quality Code of Conduct
Goals/ KPIs		Activities to raise awareness of the Quality Code of Conduct conducted twice Simultaneous revision of group companies' quality manuals	Activities to raise awareness of the Quality Code of Conduct conducted twice Percentage of personnel undergoing e-learning: 90%	Multilingual e-learning implemented Adoption of fraud prevent systems	Zero violations of the Quality Code of Conduct Awareness of the Compliance Hotline: 90%
Measures		Integration with group companies' quality manuals Preparation of multilingual posters on the Quality Code of Conduct	Preparation of auditing checklists from the perspective of quality compliance Deployment of the Quality Code of Conduct to overseas facilities	Activities to raise awareness of the Quality Code of Conduct Adoption of systems in the Group to prevent unauthorized alteration of quality data	Deployment of the Quality Code of Conduct to all Group facilities

	Materiality	FY 2019	FY 2020	FY 2024	FY 2030
Goals/ KPIs	Respect for human rights, and labor practices	Establishment of the human rights due diligence scheme (establishment of policies and a structure, determination of measures) and deciding on matters related to responding to/compliance with labor-related laws and regulations and basic health and safety policies	Establishment of the human rights due diligence scheme (structural improvements – identification of negative effects) and activities based on responding to/compliance with labor-related laws and regulations and basic health and safety policies	Establishment of the human rights due diligence structure (target-setting/planning – operation, monitoring) and permeation of responses to/compliance with labor-related laws and regulations and basic health and safety policies	Compliance with Group human rights policies (monitoring – relief processes) and firm establishment of responses to/compliance with labor-related laws and regulations and basic health and safety policies
Goals/ KPIs		Percentage of personnel undergoing human rights e-learning: 100% Verification of activities in accordance with the human rights due diligence process(Japan) Compliance with laws and regulations on annual paid leave	Percentage of personnel undergoing human rights e-learning: 100% Identification of negative effects and establishing and implementing countermeasures Compliance with laws and regulations on overtime Preparations for establishment of human rights due diligence in 2021	Reducing rate of workplace accidents accompanied by lost worktime by 50% or more vs. FY 2019 Compliance with laws and regulations on treatment of regular/non-regular employees	Establishment of human rights due diligence at facilities outside Japan Zero workplace accidents accompanied by lost worktime s
Measures		Implementing human rights e-learning (Japan) Establishment and raising awareness of human rights month Verification of the human rights due diligence process Health examinations, stress checks Promoting health examinations for employees in specific duties	Implementing human rights e-learning (Japan) Activities to raise awareness of basic health and safety policies at facilities inside and outside Japan Establishment of a structure to monitor overtime work Implementing measures to prevent workplace accidents tailored to type of accident	Continuing activities to raise awareness of basic health and safety policies at facilities inside and outside Japan Monitoring and compliance with laws and regulations Penetration of basic health and safety policies	Opening a hotline for employees of all facilities Improving the human rights due diligence process Monitoring and compliance with laws and regulations Continuing activities based on basic health and safety policies

	Materiality	FY 2019	FY 2020	FY 2024	FY 2030
Goals/ KPIs	Promoting sustainable procurement	Revision of the Group CSR Procurement Guidelines and formulation of on-site fact-finding check sheets	Collecting information to help identify risks	70% of the Group complies 100% with the CSR Procurement Guidelines	100% of the Group and 70% of major suppliers comply 100% with the CSR Procurement Guidelines
Goals/ KPIs		Selecting major suppliers Holding supplier briefings	Distributing surveys to 20% of major suppliers	Distributing surveys to 100% of major suppliers Participation of 100% of major suppliers in supplier briefings	Collecting surveys from 100% of major suppliers 70% of major suppliers score 100% totals on on-site fact-finding check sheets
Measures		Holding supplier briefings for all domestic suppliers in the Watches business Training for supplier on-site fact-finding	Training on supplier on-site fact-finding guidelines Holding training sessions for employees on CSR procurement	Continual communication and action toward correction	Addressing conflict minerals

	Materiality	FY 2019	FY 2020	FY 2024	FY 2030
Goals/ KPIs	Promoting environmental innovation	Preparation for supporting the TCFD (commitment of support planned in FY 2020)	Enhancement and integration of global environmental management systems at major Group operating companies (preparations for realization in FY 2021)	Realization of Medium-Term Environmental Plan 2024 Promotion of global environmental management throughout the value chain	Realization of a sustainable citizen society through realizing a carbon-free society, a resource-recycling society, and a safe, comfortable, and enriched society
Goals/ KPIs		Zero environmental incidents CO2 emissions: Scopes 1, 2: 2.5% reduction Water use: 2% reduction Recycling rate: 81.5% Nature conservation and community environmental activities implemented at all business facilities	CO2 emissions:Scope 1, 2: 5% reductionScope 3: 2.5% reduction Water use: 5% reduction Recycling rate: 82.5% Nature conservation and community environmental activities implemented at all business facilities	Chemical substances subject to the PRTR Act: 10% reduction CO2 emissions: Scope 1, 2: 15% reduction Scope 3: 7.5% reduction Water use: 17% reduction Recycling rate: 87%	Continuation of zero environmental incidents Chemical substances subject to the PRTR Act: 45% reduction CO2 emissions: Scope 1, 2: 30% reduction Scope 3: 15% reduction Water use: 35% reduction Recycling (reuse) rate: 90%
Measures		Maintenance of ISO 14001 certification Improving the Group Environmental Policy Reducing water use through promoting water recycling and adoption of high-efficiency equipment Use of sustainable resources	Supporting the TCFD and disclosing information in accordance with its recommendations Improving product assessment Procurement of renewable energy aiming to secure SBT certification Review of scopes of data collection on environmental performance, environmental information, and environmental risks Implementing biodiversity surveys Promoting global environmental communication activities	Enhancing responses to global environmental regulations Expansion of sustainable products from a life-cycle perspective Global response to water risks	Continuous responses to global environmental regulations