Responding to Water Risks and Opportunities

The CITIZEN Group promotes the sustainable use of water resources at its production sites in Japan and overseas by reducing water withdrawal through the introduction of high-efficiency equipment and the promotion of water recycling, as well as by making factory wastewater cleaner through strict wastewater management. Furthermore, we work to reduce water risks by setting targets for water use and wastewater management for each site.

Operating in Areas of High Water Risk

Alongside climate change-related risks and opportunities, we have identified water-related risks and opportunities and are managing them in an integrated manner under the company-wide risk management system. Risks of this kind are also included in the Sustainability Committee’s agenda, where risk identification is conducted within the framework of ISO 14001.
Water-related risks and opportunities for the next three to five years are reviewed annually using the WRI Aqueduct. The latest risk assessment has revealed that among production sites of The CITIZEN Group, two factories in Thailand and one in China are in areas with an "extremely high" water risk. The assessment has also revealed a fact concerning water stress, which is an indicator for the risk of freshwater shortages in river basins, that four factories in Thailand and one in China are located in areas with high water stress and account for 10.4% of the total water withdrawal of the entire Group. We also keep our eye on indicators related to wastewater quality, which can affect local ecosystems; each Group company promotes initiatives to improve water quality, including renewing wastewater treatment facilities, with a view to achieving the wastewater quality improvement target recently added to The CITIZEN Group Environmental Goals 2030. Going forward, we will enhance our assessment of water-related risks at production sites and consider setting targets tailored to the risks identified at each site.
Water-related risks, such as flooding and water shortages caused by extreme weather, can significantly and directly affect our value chain, including operations and parts procurement, thereby reducing our profitability. The CITIZEN Group has specified the following as water-related risk factors: suspension of factory operations, procurement, and logistics due to flooding or the like; suspension of factory operations due to water shortages and/or water supply restrictions caused by drought or the like; and the incurrence of costs to address contamination of factory groundwater. Although the likelihood of these events is not high, we will promote activities to minimize the impact of these risks and conduct detailed surveys in each region to identify potential risks and respond to them carefully.
We engage in close communication with the local industrial park administrators and government agencies to keep our water-related risk information up to date. For the future, we are planning to strengthen the water-related risk assessments that we will conduct at the time of the launch of a new business or the construction of a new factory.

1. * The values in the graph are the total amounts of water withdrawn from water-stressed areas and non-water-stressed areas.

Efforts to Respond to Water Risks

To promote sustainable use of water resources in response to water supply risks, The CITIZEN Group is engaged in improvement of water use by setting a water withdrawal reduction target. In addition, to respond to regulatory risks, such as risks entailed by water-related laws and regulations, and to achieve cleaner factory wastewater, we monitor the quality of wastewater discharged from wastewater treatment facilities and manage it by independently setting standards that are stricter than the legal limits. Some factories have also independently set standards that are stricter than the legal limits in consultation with the industrial park administrator.

In FY2025, there were no serious violations of water-related laws and regulations or cases of regulatory noncompliance, with no penalties or fines imposed on us. Also, our activities had no water-related adverse impacts.
In FY2024, there was an incident at one factory in Saitama Prefecture where the pH of sewage wastewater temporarily exceeded the standard value. In response to this incident, corrective measures and recurrence prevention measures have already been implemented.

Addressing Water Risks in the Supply Chain

In recognition of the importance of water risks in its supply chain as well, The CITIZEN Group has continued to conduct supplier surveys focusing on water risks. In the FY2025 survey, we confirmed our suppliers’ targets for water withdrawal reduction and assessed the impacts of water risks on their operations. In FY2026, we will use these survey results as the basis for estimating the impacts of water risks on The CITIZEN Group as a whole to promote water risk reduction initiatives. Going forward, we will also request our suppliers’ involvement in our water risk reduction initiatives. We will continue our supplier surveys to identify water risks with the aim of optimizing water risk management throughout the supply chain and ensuring business continuity.

Trends in The CITIZEN Group's Water Withdrawal

CITIZEN Group Environmental Goals 2030 include the goal of reducing water withdrawal by 35% compared to FY2018, and we are promoting activities to conserve water resources.

In FY2025, our domestic water withdrawal was 1,194,000 m³, and our overseas water withdrawal was 432,000m³, totaling 1,626,000m³. This means that we achieved the FY2025 target of a 20% reduction in water withdrawal compared to the FY2018 level. The water withdrawal was composed of 43% groundwater, 39% tap water, and 20% industrial water. To realize "sustainable factories," where water risks in all manufacturing processes are taken into account, we will further reduce water withdrawal and wastewater discharge in FY2025 and beyond by introducing water-saving and high-efficiency equipment and recycling water. Our water withdrawal, water consumption, and wastewater emissions for FY2024 have undergone third-party verification, and we will also have the FY2025 figures for these metrics verified by a third party in August 2026.

• Environmental Information Independent Verification Report (PDF)