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Materiality

Envisioning its ideal state from a long-term perspective, The CITIZEN Group formulated The CITIZEN Group Vision 2030, "Crafting a new tomorrow," in April 2022.

In order to realize the vision, we have identified five material issues by organizing the Group’s material issues (key issues for continuous improvement of corporate value) from both internal and external perspectives in terms of business activities and management foundation.

The CITIZEN Group Vision 2030 and the Identifying of Materiality
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Materiality Identification Process

  1. Step 1: Locating Social Issues

    Locate social issues based on mid- to long-term social trends and the Group’s direction, as well as external ESG assessment and review results

    • * References: SDGs, macro environmental, social, and economic trends, FTSE indices, MSCI indices, GRI Standards, ISO 26000, etc.
  2. Step 2: Assessing the Materiality of Social Issues

    Assess the impact of the located issues on society and their level of materiality to The CITIZEN Group (its businesses), and develop a draft proposal on material issues

  3. Step 3: Assessing the Appropriateness of the Proposed Material Issues

    Have the proposed material issues confirmed by external experts and discussed by the Sustainability Committee and reconsider them in light of the relevant measures in each business

  4. Step 4: Making a Final Identification of Material Issues

    Have the proposed issues reconfirmed by the Sustainability Committee and then identified as material issues by the Management Committee and the Board of Directors

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Opportunities and Risks Related to the Material Issues

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Materiality Opportunity Risk
Responding to Climate Change and Contributing to a Recycling-Oriented Society
  • Expanding demand for products and services that contribute to energy and resource conservation and productivity improvement
  • Mobility transformation
  • Cost reduction through the promotion of energy conservation
  • Wind and flood damage at business sites
  • Increased costs due to the introduction of new regulations (carbon pricing system)
  • Dependence on specific industries and customers
  • Violation of laws and regulations concerning the chemical substances contained in products
Contributing to Better Quality of Life
  • Creation of emotional value
  • Shift from treatment to preventive care
  • Increased competition in the healthcare market
  • Regulatory changes for medical devices
  • Leakage of personal information
Providing Solutions in the Industrial Sector
  • Expanding demand for skills transfer due to labor shortages and aging population
  • Expanding demand for products and services that contribute to manufacturing management efficiency
  • Factory automation / labor saving / automation / digitalization
  • Loss of business opportunities
  • Decline in competitiveness
  • Entry of competitors from other industries using digital technology as a weapon
Enhancing Job Satisfaction and Developing Human Resources
  • Achievement of well-being
  • Increased employee engagement
  • Driving of innovation
  • Difficulty in acquiring talent
  • Outflow of human resources
  • Deterioration of business performance
Fulfilling Social Responsibility
  • Realization of the sustainable factory concept
  • Compliance with major customers' terms and conditions
  • Damage to corporate value
  • Reputation
  • Weakening of the management base
  • Geopolitical risks

Classification of Material Issues and Measures to Address Them

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Materiality Classification Measures Watches Machine Tools Devices
Responding to Climate Change and Contributing to a Recycling-Oriented Society Responding to Climate Change Sales of machine tools certified as EcoBalance Machine,* LEDs for lighting, etc.   ● ●
Reduction of CO2 emissions, expansion of introduction of renewable energy, etc. ● ● ●
Contributing to a recycling-oriented society Sales of light-powered and mechanical watches, etc. ●   ●
Reduction of water usage, promotion of recycling, management of hazardous chemicals, reduction of packaging materials, etc. ● ● ●
Contributing to Better Quality of Life Contribution to diverse lifestyles Sales of wristwatches for the visually impaired, small switches for smartphones, etc. ●   ●
Contribution to medical care and healthcare Sales of specimen-holding plates for bacterial analysis, thermometers and blood pressure monitors that are easy for anyone to use, etc.     ●
Providing Solutions in the Industrial Sector Provision of labor-saving and automation solutions Sales of machine tools certified as EcoBalance Machine* and machine tools equipped with LFV (low-frequency vibration cutting) technology, provision of numbered ticket systems and payment systems, etc.   ● ●
Contribution to mobility Sales of components for advanced braking systems, communication systems, sensors, etc.     ●
Enhancing Job Satisfaction and Developing Human Resources Enhancement of job satisfaction Implement measures to realize employee well-being and improve employee engagement, provide training opportunities, implement health management measures, etc. Group-wide
Development of human resources Continue with the Group succession plan, develop human resources who will drive change, expand recruitment methods, and coordinate with the Group.
Diversity, equity, and inclusion Systematically train and promote female management candidates, encourage male employees to take childcare leave, implement measures to promote the active participation of diverse human resources, etc.
Fulfilling Social Responsibility Strengthening of risk management Update and operate the Group significant risks, etc. Group-wide
Enhancement of quality compliance Conduct activities to promote the Quality Code of Conduct, etc.
Respect for human rights and labor practices Implement human rights due diligence, etc.
Promotion of sustainable procurement CSR procurement, green procurement, responsible minerals procurement, etc.
  • * EcoBalance Machine: A selection of machine tools launched in FY2024 that meet the Group’s internal standards and are part of its lineup of environmentally friendly products and technologies

Major KPIs Related to the Material Issues

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Materiality Main KPIs FY2024 (Results) FY2025 (Results) FY2027 (Target)
Responding to Climate Change and Contributing to a Recycling-Oriented Society CO2 emissions reduction rate
(Compared to FY2018)		 Scope 1 and 2 47.1 % 51.9 % 37.8 %
Renewable energy ratio
(domestic + overseas)		 26.0 % 34.5 % 43.1 %
  Sales ratio of sustainable products* 24.5 % 27.8 % 31.0 %
Contributing to Better Quality of Life
Providing Solutions in the Industrial Sector
Enhancing Job Satisfaction and Developing Human Resources Ratio of female management staff
(Citizen Watch Co., Ltd.)		 9.8 % 10.7 % 13.0 %
  • * Sustainable products: Products and services that contribute to business growth while helping to solve social issues linked to The CITIZEN Group’s materiality
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