Concept of Sustainable Management

The CITIZEN Group’s Sustainable Management

The CITIZEN Group has been operating for over 100 years based on its corporate philosophy of “Loved by Citizens, Working for Citizens.” Starting in FY2019, our 101st year in business, we are promoting "Sustainable Management" to solve social issues through our business. Sustainable management means not only providing good products and services, but also expanding our business while earning the trust of our stakeholders and continuously improving our corporate value through management that takes into consideration social issues such as human rights and the global environment throughout the value chain.

In light of the medium and long-term changes in the environment, The CITIZEN Group will leverage the Group's strengths and capital to address materiality (key issues for the sustainable enhancement of corporate value) in both its business activities and business infrastructure. By creating social, environmental, and economic value that contributes to solving social issues, we aim to be loved by and work for citizens, as well as contribute to the achievement of the SDGs (Sustainable Development Goals).

The CITIZEN Group's Value Creation Story

Sustainable Products

The CITIZEN Group has set its sights on developing sustainable products by 2030, tailored to address critical global challenges within each business segment of the Group. We have earmarked FY2023 as the starting point for the certification process of sustainable products. In FY2022, we already established certification criteria for sustainable products in the watches business. Currently, we are in the process of formulating certification standards for the businesses of each Group company, spanning machine tools, devices, electronics, and more. Our plan entails finalizing certification criteria for sustainable products in each business sector during FY2023, following thorough discussions and endorsement from both the Sustainability Committee and the Group Management Committee.

Our aim is to transparently present the proportion of sustainable products in relation to our sales by the year 2025. This approach underscores our commitment to enhancing sustainability across our product offerings and contributing meaningfully to addressing global challenges.

Sustainable Products Certification Criteria (Watches Business)

Out of the five materiality issues identified by The CITIZEN Group, the watches business is tasked with tackling two specific challenges through its products and services: "addressing climate change and promoting a recycling-centric society" and "enhancing the quality of life." To effectively address these materiality issues, we extract contributing factors categorized into environmental and social dimensions. These factors are then ranked and amalgamated to establish the certification standards for sustainable products.

Among these contributing elements, "prolonged product lifespan and resource recycling" and "fostering a culture of utilizing quality products responsibly over the long term" are intricately intertwined. These elements play a pivotal role in addressing the aforementioned materiality issues and are deemed fundamental and paramount, thus earning the status of indispensable prerequisites.

Consequently, our approach involves certifying products and services within the watches business that are aligned with the materiality challenges, encompassing both environmental and social contribution facets, as sustainable offerings.

Sustainable Factories

The CITIZEN Group is advancing its business endeavors guided by the principle of "sustainable factories," which encompasses not only the final products and services but also the manufacturing processes. A sustainable factory is a production facility or office (or business process) that takes a comprehensive approach, encompassing compliance, human rights, labor practices, business continuity planning (BCP), and productivity enhancement, in addition to environmental considerations.

To evaluate our progress, we've distributed the Self-Assessment Questionnaire (SAQ), the same one that we require our suppliers to complete, to our domestic business sites within the Group. Collating their responses allows us to monitor our advancement. Starting from FY2022, the SAQ has been extended to all sites, including our international business locations, to solicit their insights. Through these ongoing initiatives, the entirety of The CITIZEN Group aims to realize the vision of "sustainable factories" by 2030.

Recognizing the critical importance of supplier collaboration and the entire value chain, we are actively fostering engagement with stakeholders. In FY2019, we established a roadmap and vision for our 2030 aspirations across key domains such as "addressing climate change and fostering a recycling-centered society," "commitment to quality compliance," "upholding human rights and labor practices," and "promotion of sustainable procurement." These collective efforts are being propagated throughout the Group, with regular updates as deemed necessary. For further details and progress, please refer to the pertinent page on Materiality (linked in the table below).

  • * BCP (Business Continuity Plan): A business continuity plan is formulated during normal times of operation to prepare for the possible effects of large-scale disasters on business activities. Such a plan stipulates the systems, functions, and procedures necessary to continue supplying products and services, and to enable early recovery.
Goal in 2030

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Materiality (Business Foundation) Target in 2030 Indicator
Responding to Climate Change and Contributing to a Recycling-Oriented Society Contribute to the realization of a decarbonized society, a resource-recycling society, and a safe, secure, and prosperous society
  • Promotion of global warming countermeasures
  • Promote sustainable resource use
  • Strengthen environmental risk management and continue to achieve zero environmental accidents
  • Provide sustainable products and strengthen the management of chemical substances contained in products
  • CO2 emissions (Scopes 1 and 2) 50.4% reduction (compared to FY2018)
    CO2 emissions Scope 3 (Category 1 + 11): 30% reduction (compared to FY2018)
  • Water consumption: 35% reduction (compared to FY2018)
    Recycling rate (waste reuse rate): 90%
  • Continuation of zero environmental accidents
  • Reduction of chemical substances subject to the PRTR Act (in Japan): 45%
Fulfillment of Social Responsibility Quality Compliance
  • Compliance with the Group Quality Code of Conduct
Respect for Human Rights and Labor Practices
  • Compliance with the Group's Human Rights Policy
  • Compliance with laws related to work style reforms (in Japan)
  • Establishment of the Group Health and Safety Policy
Promoting Sustainable Procurement
  • 100% of the Group and 70% of direct major suppliers* will comply with 100% of the CSR Procurement Guidelines
  • * Top 90% of procurement transactions + the volume of transactions and suppliers handling important items that cannot be substituted
  • Zero Violations of the Quality Code of Conduct
  • Establishment of human rights due diligence
  • Zero work-related lost-time injuries
  • 100% of major suppliers responded to the Self-Assessment Questionnaire (SAQ)
  • 70% of major suppliers scored 100% on the SAQ

Sustainability Promotion Structure

Establishment of the Sustainability Committee

In April 2020, The CITIZEN Group established the Sustainability Committee, which is chaired by the president and representative director of CITIZEN WATCH and includes full-time directors of CITIZEN WATCH and the presidents of business management companies as members. The committee meets once a quarter, mainly to discuss materiality, check the progress of activities, and hold study sessions with external lecturers. The CSR Department, Corporate Planning Department, and Environmental Department of CITIZEN WATCH, which serve as the committee secretariat, also operate the Sustainability Secretariat Meeting together with each committee secretariat related to materiality and the CSR departments, environmental departments, corporate planning departments of each Group company. The committee also regularly verifies the sustainability issues and progress of activities at each company. Proposals and reports from each committee and each company are discussed at the Sustainability Committee.

Objectives and Functions

To promote sustainable management in The CITIZEN Group:

  1. Identification and periodic review of materiality
  2. Promoting efforts in existing businesses to improve their sustainability and contribute to resolving social issues
  3. Formulating policies for addressing ESG issues and monitoring activities based on those policies
Quarterly (every three months)

Sustainability Promotion Structure

The following subcommittees of the Sustainability Committee have been established: the Group Quality Compliance Committee, which deliberates on quality compliance in the Group; the Group HR Committee, which deliberates on hiring and human resource development and addresses discrimination by nationality, LGBT status, and other properties, as well as human rights; and the Group Environmental Committee, which deliberates on such subjects as Group-wide opportunities, risks, and measures related to environmental issues in general. The Group Sustainable Procurement Committee deliberates on revisions of the supplier management structure across the Group in order to be more sustainable and responsible.

In addition, the Sustainability Committee Secretariat and the Sustainability Committee Meeting, consisting of the corporate planning departments and the CSR departments of each Group company, ensure that the content of the deliberations by the Sustainability Committee is shared with the organizations promoting each business.
We also established CITZEN-SIRT, the Group Information Governance Committee, the Group Legal/Compliance Committee, and the Group Business Continuity Management Committee to address matters related to the handling of management-related risks and making the Group’s management base more resilient. These committees addressing risks related to the management base have been established under the Management Committee, which meets monthly, as a structure that enables the swift detection of and deliberation on problems as well as immediate responses to them.


Raising Awareness of Sustainable Management Among Employees

To implement sustainable management throughout the Group, The CITIZEN Group promotes initiatives centered on the Sustainability Committee, to raise understanding and awareness of the materiality and the connection between the SDGs and our business activities among all employees. Specific initiatives include study sessions and e-learning programs as well as activities including messages from the CEO and the use of in-house newsletters, which have been ongoing since FY2019 to raise awareness among employees.

Lecture Meetings

The CITIZEN Group arranged lecture sessions targeting key personnel responsible for driving materiality initiatives, with the aim of ensuring their accurate grasp of societal trends. In FY2022, seminars were held for group executives in April and October, focusing on introductory discussions and practical case studies to promote digital transformation (DX). In August, external speakers were invited to present seminars highlighting advanced instances from environmentally-conscious companies. This program's objective surpasses the foundational sustainability knowledge acquired in the previous fiscal year. It strives to offer a practical comprehension of SDGs, including product development, for application in the Group's management strategy. Additionally, in January 2023, a compliance workshop was conducted, and measures were undertaken to reinforce governance rigorously. Moreover, study sessions concentrating on topics like human rights and sustainable procurement were organized for departments overseeing areas like human resources and procurement. The intention was to equip them with specific measures for future implementation across respective Group entities. Each session underscored the linkage to SDGs, fostering contributions in alignment with these global objectives.

CSR Awareness Survey

Every year, The CITIZEN Group conducts a CSR awareness survey of the management and employees (including temporary employees) of its operating companies (15 companies in Japan in FY2021) to ascertain the level of evaluation and penetration of CSR and corporate ethics, as well as to identify and address future CSR issues.
While awareness of the Compliance Hotline is increasing year by year, with 82% of the respondents stating they were “aware" of the Compliance Hotline in Q2, only 42% of the respondents stated that they "will use" the hotline in Q3. This may be due to a lack of understanding of the system regarding the protection of whistleblowers, and it became clear that further awareness of the system is needed.

Q1: Do you think that CSR activities enhance the group’s corporate value?


Q2: Do you know about the Compliance Hotline?


Q3: If you detect a violation of the Code of Conduct that you think it will be difficult to
consult your superior about, will you use the Compliance Hotline?

[ Number of Respondents ]
  • FY2018: 8,029 out of 8,969 employees (24 subsidiaries targeted: response rate of 89.5%)
  • FY2019: 7,253 out of 8,749 employees (20 subsidiaries targeted: response rate of 82.2%)
  • FY2020: 7,291 out of 8,200 employees (17 subsidiaries targeted: response rate of 88.9%)
  • FY2021: 6,262 out of 6,938 employees (15 subsidiaries targeted: response rate of 90.3%)
  • FY2022: 6,580 out of 6,964 employees (15 subsidiaries targeted: response rate of 94.5%)