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

Enhancing quality compliance

FY 2020			FY 2021	FY 2024	FY 2030
Goals and KPIs	Results	Evaluation	Goals and Measures	Goals and KPIs
Further raising awareness of the Quality Code of Conduct and identifying risks in the state of compliance	Dissemination at overseas branches was continued in China and started in Vietnam and Thailand. The domestic status of recognition was grasped through e-learning.	〇	Preparation of effective monitoring system	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
①Activities to raise awareness of the Quality Code of Conduct conducted twice ②Percentage of personnel undergoing e-learning: 90%	①Conducted twice online to prevent the spread of COVID-19 infection ②Provided to all domestic employees. Percentage of attendance rate: 97.8%	〇		Multilingual e-learning implemented Adoption of fraud prevent systems	Zero violations of the Quality Code of Conduct Awareness of the Compliance Hotline: 90%
Measures				Measures
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

Respect for human rights, and labor practices

FY 2020			FY 2021	FY 2024	FY 2030
Goals and KPIs	Results	Evaluation	Goals and Measures	Goals and KPIs
Establishment of the human rights due diligence scheme and activities based on responding to/compliance with labor-related laws and regulations and basic health and safety policies	Conducted investigations into the state of handling of conflict minerals and due diligence concerning human rights risk on the supply chain	△	Implementation of measures that could not be established due to the pandemic	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
①Percentage of personnel undergoing human rights e-learning: 100% ②Compliance with laws and regulations on overtime ③Preparations for establishment of human rights due diligence in 2021(identifying negative risks, and establishing and implementing measures)	①Provided to all domestic employees. Percentage of attendance: 96.0% ②Cases of violations of laws or regulations: 0 ③Not established because still in the stage of starting to identify negative human rights risk of business activities	△		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 worktimes
Measures				Measures
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

Promoting sustainable procurementcurement

FY 2020			FY 2021	FY 2024	FY 2030
Goals and KPIs	Results	Evaluation	Goals and Measures	Goals and KPIs
Collecting information to help identify risks	Conducted investigations concerning self-assessment questionnaire (SAQ), conflict materials, and green procurement	〇	Promoting fact-finding besed on SAQ	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
Distributing SAQ to 20% of major suppliers	SAQ sent to 355 main suppliers	〇		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				Measures
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

Promoting environmental innovation

FY 2020			FY 2021	FY 2024	FY 2030
Goals and KPIs	Results	Evaluation	Goals and Measures	Goals and KPIs
Enhancement and integration of global environmental management systems at major Group operating companies (preparations for realization in FY 2021)	Obtained again unified certification (ISO 14001) in Japan. Domestic efforts expanded to overseas as environment management of the whole group	△	Implementation of measures that could not be established due to the pandemic	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
①CO2 emissions Scope 1, 2: 5% reduction Scope 3: 2.5% reduction ②Water use: 5% reduction ③Recycling rate: 82.5% ④Nature conservation and community environmental activities implemented at all business facilities	①Attained reduction goal and introduced power coming from reusable energy on a trial basis at the Tokyo office ②Attained ③Attained (99% or more in Japan) ④Partially suspended to prevent the spread of COVID-19 and conducted at 59% of offices	△		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				Measures
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