Promoting Sustainable Procurement

Basic Concept for Sustainable Procurement

The CITIZEN Group aims to contribute to a sustainable society through the realization of "sustainable factories" that take into consideration not only its own factories but also their manufacturing processes. A "sustainable factory" is a concept in which the entire value chain, including suppliers, is a sustainable factory. Collaboration with suppliers, who play a key role upstream in the value chain, is essential for the realization of the sustainable factory, and we practice sustainable procurement (CSR procurement, responsible mineral procurement, and green procurement) as well as production system development that comprehensively considers compliance, human rights, labor practices, BCP, and productivity improvement.

CSR Procurement

The CITIZEN Group has established The CITIZEN Group Basic Procurement Policy and is promoting CSR procurement in order to promote ESG throughout the supply chain. We ask our suppliers in Japan and overseas to comply with The CITIZEN Group CSR Procurement Guidelines, which outline requirements for respect for human rights, environmental conservation, occupational health and safety, and fair trade, based on the United Nations Global Compact and The CITIZEN Group Charter of Corporate Behavior, to ensure that all our suppliers are well informed.

The CITIZEN Group Procurement Policy (Established April 2017)

  1. Fair and transparent trading:
    For the procurement of articles and services, besides quality, price, and delivery date, we select our partners based on ethical standards by measuring their compliance with laws and regulations as well as social norms.
  2. Compliance with laws, regulations, and social norms:
    We will comply with the laws, regulations, and social norms of each country.
  3. Respect for human rights and consideration of the work environment:
    We respect internationally declared human rights standards and promote procurement activities with consideration for the work environment.
  4. Promotion of green procurement with consideration for the environment:
    To promote environmentally-friendly manufacturing, we adopt components with less environmental loads in a preferential manner, to contribute to the reduction of loads on the global environment.
  5. Existence and co-prosperity with partners:
    We will build better partnerships with all our partners to achieve common goals, both domestically and overseas.

The CITIZEN Group’s CSR Procurement Guidelines

In April 2020, The CITIZEN Group revised The CITIZEN Group CSR Procurement Guidelines, now in its second edition. The Guidelines present The CITIZEN Group's stance on the recent changes in social and economic conditions, international norms such as the United Nations Global Compact, and responses to requests from stakeholders. We are also seeking the endorsement of our business partners and are aiming to ensure that they are fully aware of the guidelines by linking their responses to the SAQ, which we ask them to complete. It also covers a wide range of elements, such as elements to solve social issues, including areas related to human rights and labor practices, to contribute to the achievement of the SDGs.

The CITIZEN Group’s CSR Procurement Guidelines (Established April 1, 2017. Amended April 1, 2020)


The CITIZEN Group (CITIZEN WATCH Co., Ltd. and its group companies) aims to contribute to the wellbeing of the world’s population through “manufacturing activities that are well-loved by and friendly to citizens”, by adhering to the corporate philosophy of being “Loved by Citizens, Working for Citizens.” With this corporate philosophy as its slogan, The CITIZEN Group intends to create strong partnerships with its business partners who give due consideration to social issues and actively promote CSR, based on the spirit of the United Nations Global Compact concerning human rights, labor issues, the environment and corruption prevention, and by strictly abiding by the “Code of Behavior Charter of The CITIZEN Group”.

While we have been encouraging our business partners to be involved in CSR initiatives, we have revised our “The CITIZEN Group’s CSR Procurement Guidelines” in order to further develop the relationships of mutual trust with our business partners and to proceed with responsible procurement activities, towards the realization of a sustainable society.

We sincerely ask all our partners to understand and agree to the aims of the Guidelines and cooperate with us in promoting CSR procurement activities, including further propagation of the initiatives in their supply chains.

Corporate Governance
  1. Establishment of a CSR promotion system

    We endeavor to conduct business activities to achieve a sustainable society while observing the law as a responsible company, abiding by social norms, meeting society’s expectations, and taking care not to have a negative impact on society and the environment. To this end, we have established a system for the management of ESG (environment, social, and governance) risks related to CSR and for implementing the PDCA (plan, do, check, and act) cycle.

  2. Healthy business activities

    With a view to establishing an organizational structure for sound corporate management, we have established management systems and schemes within our company to ensure compliance with laws and regulations related to our business activities, the effectiveness and efficiency of our operations as a company, and the reliability of financial reporting and asset protection. We hereby also secure proper and effective business execution, transparency of management, and a multifaceted management monitoring system.

  3. Risk management

    Toward the enhancement of our corporate governance and product quality compliance, we have secured and established schemes to verify the progress of our addressing risks and our response status against important risks as well as to respond to new risks, including ESG risks such as those related to compliance and the BCP (Business Continuity Plan), trade secrets, intellectual property, information security, labor practices, and environmental problems, in addition to financial risks.

  4. Establishment of a whistleblower system

    For prevention, early detection, and improvement in the self-cleaning functions of compliance-related problems in our company’s business activities, such as legal violations or wrongful acts or acts that could be a compliance problem, or for our employees who themselves have suffered human rights or labor abuses, we have secured a system for our employees to directly report to or consult with a dedicated department or outside contact, even anonymously. We have also secured a system to ensure confidentiality and to make sure that the whistleblower or the persons who have consulted will not be treated unfavorably.

  5. Disclosure of information

    We place importance on the relationships with society and stakeholders in our business activities, and we promptly and accurately disclose financial information and nonfinancial information in response to requests for transparency and accountability.

Human Rights
  1. Respect for human rights and the prohibition of discrimination

    We support and respect the protection of internationally declared human rights*, and strongly denounce any kind of discrimination (including but not limited to any discrimination based on gender, sexual orientation, sexual expression, age, existence of a disability, nationality, race, skin color, religion, and marital history).

    • * The Universal Declaration of Human Rights, International Labor Organization’s Declaration on Fundamental Principles and Rights at Work, Ten Principles of the UN Global Compact, UN Guiding Principles on Business and Human Rights, OECD Guidelines for Multinational Enterprises, and UK Modern Slavery Act, etc.
  2. Avoidance of complicity in human rights abuses

    We take due care so that none of our business activities, products or services will ever cause human rights abuses or lead to complicity in human rights abuses. Should it become clear, however, that we have happened to be involved in any of such issues, we will promptly make corrections and remedy the situation by undertaking appropriate procedures.

  3. Prohibition of inhumane treatment

    We respect the human rights of our employees and prohibit any kind of inhumane treatment such as abuse, physical punishment, and harassment.

  1. Corruption prevention

    Maintain sound relationships, including the proper management of hospitality, with government agencies and public officials in the countries and regions where we conduct business activities.

  2. Prevention of the giving and receiving of improper advantages

    We maintain healthy relationships with our customers and trade partners, etc. in sales and purchasing activities, etc., by preventing the giving and receiving of improper advantages among ourselves.

  3. Basic attitude toward labor practices

    We prevent unfair business practices such as bid-rigging, cartels, abuse of dominant bargaining positions, and other unfair trading practices from occurring.

  4. Provision of equal opportunities

    We recognize that the labor principles presented in international norms* are universal values and adopt them as our basic workplace principles.

    • * The Universal Declaration of Human Rights, International Labor Organization’s Declaration on Fundamental Principles and Rights at Work, Ten Principles of the UN Global Compact, UN Guiding Principles on Business and Human Rights, OECD Guidelines for Multinational Enterprises, UK Modern Slavery Act, etc.
  5. Payment of fair wages

    We abide by the legal minimum wage of the countries and regions where our business activities are conducted and will not reduce wages unreasonably. We abide by the laws and regulations of the countries and regions where our business activities are conducted regarding overtime work, payroll deduction, piecework wage, other benefits, etc. At the time of paying wages, we deliver pay slips that can confirm the accurate rewards corresponding to the work performed, at the appropriate time.

  6. Fair application of working hours, time off, paid time, etc.

    We abide by the working hours agreed upon with the employees in advance and ensure that employees’ working hours are managed appropriately so that they do not exceed the statutory limit in the countries and regions where our business activities are conducted, and we also seek to prevent excessive overtime work. All our employees are given the right to take paid time off and also given at least one day off per week.

  7. Prohibition of forced labor

    We avoid making people work against their will and making people do work that restricts their freedom to leave their jobs. We ensure that work coercion using unjustified means of restraint, compulsory overtime work and bonded labor, slave labor, prison labor, etc. are not practiced and that the unjustified retention of identification documents and the unjustified collection of deposits are not practiced.

  8. Prohibition of child labor

    We avoid employing children under the legal working age in the country and region where our business activities are conducted. We ensure that children are not made to perform night work, dangerous work, etc. that could harm their health, development, safety, or morals.

  9. Recognition of the freedom of association and the right to collective bargaining

    We respect the basic labor rights of our employees, such as their freedom of association, freedom to join a labor union, and their right to collective bargaining.

  10. Proper management of employees’ health and safety

    We secure the safety of the work environment and perform inspections and proper maintenance of our facilities thoroughly so as to prevent unforeseen accidents and disasters. We understand the risks of harmful chemical substances, noise, odors, etc. on the human body, and ensure sanitary, safe, and healthy work environments. We promote the creation of a workplace that is considerate of employees’ mental and physical health.

The Environment
  1. Basic attitude toward environmental initiatives

    We should be aware of environmental issues in business processes and establish systems to resolve them. We also identify factors that have an impact on the environment and properly manage them.

  2. Management of chemical substances

    We manage chemical substances indicated in the laws and regulations of the countries and regions where our business activities are conducted and ascertain and report the amount of handled chemical substances to the government properly.

  3. Reduction of the environmental burden

    We endeavor to prevent the occurrence of pollution, monitor and control wastewater, sludge, and air emissions, etc., and reduce outflow. We also set our independent reduction targets for the reduction of the environmental burden at the level prescribed by law in the countries or regions where our business activities are conducted or set even more rigorous voluntary environmental impact reduction targets and make further improvements thereof.

  4. Sustainable and efficient utilization of resources (energy, water, raw materials, etc.)

    We set our independent reduction targets for implementing resource conservation and energy savings, and make efforts to use resources and energies effectively and continuously.

  5. Reduction of GHG (greenhouse gas) emissions

    As a means to combat climate change, we set our independent reduction targets for greenhouse gases such as CO2, methane, and fluorocarbons, and endeavor to reduce them continuously.

  6. Reduction of waste

    We set our independent reduction targets for waste, and endeavor to conduct the responsible disposal or recycling of waste.

  7. Protection of biodiversity

    We conduct investigations into the direct and indirect impacts of our business on the ecosystem, and endeavor to protect biodiversity and ensure the sustainable utilization of the environment.

Fair Business Practices
  1. Corruption prevention

    We maintain healthy relationships with national/local governments and public officials in the countries and regions where our business activities are conducted by establishing appropriate relationships with them.

  2. Prevention of the giving and receiving of improper advantages

    We maintain healthy relationships with our customers and trade partners, etc. in sales and purchasing activities, etc., by preventing the giving and receiving of improper advantages among ourselves.

  3. Prevention of competition law violations

    We prevent unfair business practices, such as bid-rigging, cartels, abuse of dominant bargaining position, and other unfair trading practices, from occurring.

  4. Rejection of relationships with antisocial forces

    We prohibit our employees from contacting and giving any benefits to antisocial forces.

  5. Respect for a third party’s intellectual property

    We respect intellectual property rights, including patent rights, copyrights, and trademark rights, and do not infringe on others’ intellectual property rights.

  6. Prohibition of insider trading

    We prohibit persons involved with a listed company, etc. from using undisclosed company information to trade that company’s stocks, etc.

  7. Prohibition of acts with conflicting interests

    We prohibit our employees from enjoying personal benefits at the expense of the company’s benefits. Any act that may be interpreted as such must be avoided and appropriate trading must be pursued.

  8. Services for responding to complaints from outside the company and for consultations

    Our trade partners or customers who have knowledge of important risk information can directly report or consult with a dedicated outside contact department of our company. We have established a system to ensure confidentiality and to ensure that the informant will not be treated unfavorably.

  9. Establishment of a BCP (Business Continuity Plan) system

    We have established a system wherein in the event of an emergency such as a natural disaster, quick restoration is realized while important duties and businesses can continue.

  10. Management of confidential information and protection of private information

    We perform proper management to ensure that none of the confidential information of our customers, business partners, our own company, etc. is ever leaked. We also properly manage and protect the private information of our customers, trade partners, employees, etc.

Quality and Safety
  1. Ensuring product and service quality and safety

    We provide products and services that meet the necessary quality and safety standards as stipulated in the laws and regulations of the countries and regions where our business activities are conducted.

  2. Appropriate response to product and service accidents

    In order to prepare for situations where any accident relating to our product or service has occurred or where any defective goods of our company have been circulated, we have established a system through which we disclose information promptly, notify the relevant authorities of the situation, recall the product in question, take safety measures for our supply destinations, and strive to prevent a recurrence.

  3. Response to our customers’ need

    We provide environmentally friendly and socially beneficial goods and services that pursue quality and costs acceptable to our customers by correctly grasping the social needs.

Information Security
  1. Basic attitude toward information security

    We properly manage and protect information obtained through our business activities and take defensive measures against threats to our computer networks.

  2. Defense against attacks on computer networks

    We take defensive measures against attacks on our computer networks and ensure the effective management of threats to avoid damage to our company and any other companies.

Supply Chain
  1. Basic attitude toward the supply chain

    In order to fulfill social responsibility regarding not only our company but also the whole supply chain, we endeavor to make the importance of a sustainable procurement policy widely known among our trade partners.

  2. Responsible procurement of minerals

    We make it our company’s policy not to purchase or use raw materials containing tantalum (Ta), tin (Sn), tungsten (W) or gold (Au), which are conflict minerals linked to inhumane acts committed by local armed groups in the Democratic Republic of the Congo and its surrounding regions.

Harmonious Coexistence with Local Communities
  1. Contribution to local communities

    We respect the culture and customs in the countries and regions where our business activities are conducted and carry out initiatives that can contribute to the sustainable development of local communities.

Sustainable Procurement Promotion System

As a framework for promoting sustainable procurement, a Group Sustainable Procurement Committee has been established under the Sustainability Committee, with the Product Management Department, the Environmental Management Office, and the CSR department of CITIZEN WATCH as the secretariat. This committee conducts a review of the existing promotion system in conjunction with the renewal of the procurement guidelines and is chaired by the director in charge of CSR at CITIZEN WATCH, with the procurement departments, CSR departments, and environmental departments of Group companies participating as committee members. The committee meets twice a year to strengthen inter-group cooperation through partnerships with suppliers and to confirm the procurement status in order to realize sustainable procurement for the entire group, leading to a better understanding of the actual status of suppliers and the prompt implementation of requests for correction and other measures.

Progress on the Roadmap

In adherence to The CITIZEN Group CSR Procurement Guidelines, The CITIZEN Group has charted a roadmap extending to 2030. This trajectory aims at achieving "100% adherence to the CSR Procurement Guidelines by 100% of The CITIZEN Group and 70% of its pivotal suppliers." In FY2022, our focus was on unveiling supplier risks, realized through web-based SAQ (Supplier Assessment Questionnaire) collection and the creation of analytical tools. Moving forward into FY2023, we are committed to bolstering the efficacy of factual status evaluations and remedial measures. This will be accomplished by instituting a supplier hotline and initiating a web-based SAQ collection in both English and Chinese languages.

Roadmap to 2030

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  FY2022 FY2023 FY2024 FY2030
  • Identification of human rights risks in the business controlling company
  • Determination of corrective measures for human rights risks in the watch business
  • Decide on corrective measures for human rights risks at the business controlling company
70% of the Group adheres 100% to CSR procurement guidelines 100% of the Group and 70% of major suppliers comply with 100% of the CSR Procurement Guidelines
  • Reduce the number of high-risk suppliers to 0%
  • 75% of major suppliers participate in the briefing
  • SAQs distributed to 75% of suppliers
  • 100% of major suppliers respond to the SAQ
  • 2024 - Start SAQ to all major clients
  • 100% of major suppliers participate in supplier briefings
  • 100% of major suppliers responded to SAQ
  • 70% of major suppliers have 100% SAQ overall score rate
Measures Due diligence conducted by each company's procurement department in major businesses/CSR procurement study sessions conducted for all Group employees (including overseas employees) Watch Business, Responsible Mineral Sourcing Disclosure
  • 100% of major suppliers comply with green procurement standards
  • Disclosure of information on group business and responsible mineral procurement
  • Ongoing communication and action for remediation
  • 100% of major suppliers comply with green procurement standards
  • Ongoing communication and action for remediation

Sustainable Procurement Initiatives

Selection of Key Suppliers

The CITIZEN Group has transactions with approximately 4,100 business partners* globally regarding direct materials related to products.

The top 90% of suppliers in terms of the procurement volume of direct materials related to products and suppliers who handle important items that cannot be substituted are positioned as “key suppliers" disclosure of information on group business and responsible mineral procurement, and are focused on achieving procurement in line with the "The CITIZEN Group CSR Procurement Guidelines" by sending SAQs and holding explanatory meetings. As of March 2023, approximately 1,300 suppliers in the entire group qualify as key suppliers.

  • * Target companies: 97% of the total direct material transactions of manufacturers in the watch business, machine tool business, device business, electronic equipment business, etc.

Working Together with Suppliers to Achieve Sustainable Procurement

To seek cooperation in sustainable procurement, we hold an annual briefing session on procurement for domestic and overseas suppliers (briefing materials are available in Japanese, English, and Chinese). At the briefing, we convey a message from the president of CITIZEN WATCH, The CITIZEN Group's efforts to achieve the SDGs, and the company's thoughts. In FY2022, the program was conducted via video in light of infection control measures. In conjunction with the briefing, we comprehensively addressed sustainable procurement by sending out SAQ and Green Procurement and Conflict Minerals survey sheets.

In FY2023, we aim to have 100% of our major business partners participate in briefing sessions to further inform them about the direction in which the company is heading and the SDG measures. We will also promote improvement activities to enhance the understanding and penetration of our procurement policy by sending "Requests to Suppliers" summarizing our human rights and environmental policies and guidelines.

(Front cover of the booklet)
Requests to Our Business Partners

Survey Using the Supplier Questionnaire (SAQ)

As part of our efforts to understand CSR procurement risks, since FY2019 The CITIZEN Group has begun conducting surveys of domestic suppliers using the SAQ*1 and a supplier fact-finding survey*2 using the Fact-Finding Survey Check Sheet, which was created independently by the Group.

In FY2022, we conducted a comprehensive video briefing session for our suppliers across Japan and overseas, centered around The CITIZEN Group CSR Procurement Guidelines and related content. This initiative was undertaken to provide a profound understanding of the Group's approach to CSR procurement. Additionally, a Supplier Assessment Questionnaire (SAQ) survey was conducted.

Furthermore, we have implemented a risk classification system, ranking suppliers based on the comprehensive score rate derived from the SAQ radar chart analysis. This system enables us to identify suppliers with heightened procurement risks, as demonstrated by the survey results and responses from the previous year (2021).

In FY2022, we commenced web-based SAQ data collection for domestic operational entities. Additionally, a novel analytical tool was developed to process the collected data, aiding in the identification of suppliers with potential risks.

In FY2023, our plans encompass the rollout of a web-based SAQ collection in English and Chinese versions. The overarching objective is to achieve a cumulative response rate of 100% for SAQs from key suppliers.

Recognizing that supplier risk assessments can fluctuate in response to external circumstances, we are committed to refining our risk evaluation processes. This includes conducting supplementary surveys utilizing the "Actual Status Survey Check Sheet" for select high-risk companies, thereby ensuring more accurate risk assessments and fostering improvement endeavors.

  1. The common SAQ of the Global Compact Network Japan (GCNJ) is adopted.
  2. The CITIZEN Group's term for on-site supplier audits and monitoring.

Risk Rank Setting for SAQ

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Risk rank based on the overall percentage of points scored in the SAQ's radar chart analysis (rounded down to the nearest whole number)
Risk rank Scoring rate (%) Description
Low risk 80% or more Basically, actions are being taken at the level required by The CITIZEN Group CSR Procurement Guidelines. Items requiring improvement can also be voluntarily improved.
Middle risk 50–79% Items for which action is not taken at the level required by The CITIZEN Group CSR Procurement Guidelines, but voluntary improvements can be made.
High risk 49% or less Items for which action is not taken at the required level in The CITIZEN Group CSR Procurement Guidelines need to be monitored based on the improvement plan.

Fact-Finding Survey of Suppliers

In FY2022, as in the previous year, due to infection control measures we conducted a remote supplier fact-finding survey of suppliers to whom we had sent SAQs. The target was set at 14 companies for the entire group. As a result of the survey, no significant risk or need for corrective action was found among the suppliers.

We strive to build relationships of trust by not only sending SAQs and fact-finding surveys unilaterally, but also providing assistance to suppliers who have difficulty in responding. In addition, we are promoting the sharing of best practices among our suppliers by utilizing the commendation system that was implemented during quality and environmental audits.

Photo of Fact-Finding Survey

SAQ Survey for New Suppliers

Efforts to assess the risk status of new suppliers by conducting the SAQ at the time of new contracts began in FY2021. Companies and organizations that have cooperated with us in demonstration experiments and prototype development and with whom we expect to do business in the future are also eligible. In conjunction with the SAQ, a set of materials including The CITIZEN Group Anti-Corruption Policy is distributed.

Initiatives to Achieve Group Sustainable Procurement

The CITIZEN Group appropriately promotes the local procurement of materials, parts, equipment, etc., depending on the characteristics and environment of the items it produces. Our business is expanding both domestically and internationally, and we contribute to the community through employment, mainly in the areas where our business sites are located. In FY2021, we provided specialized training opportunities for employees in the departments involved in procurement operations.

The Group's overarching procurement strategy is guided by the Group Sustainable Procurement Committee. This committee orchestrates "expert study sessions" designed to ameliorate procurement risks and address pertinent challenges. In FY2022, a study session was conducted with external advisory services to address grievance redress mechanisms. Furthermore, in FY2023, a "Supplier Hotline" was established to create a platform for "redress" within the supply chain. This initiative responds to the human rights due diligence stipulated by the UN Guiding Principles on Business and Human Rights. The operationalization of the "Supplier Hotline" commenced in April 2023, aiming to enhance the efficacy of the system.

Sustainable Procurement Committee and Study Group
Implementation Period Theme
FY2020 About Our Conflict Minerals Due Diligence
FY2021 Identifying Human Rights Risks in the Supply Chain
FY2022 Establishment and Operation of a Grievance Redress (Grievance)

The CITIZEN Group Supplier Hotline

The CITIZEN Group Supplier Hotline serves as a dedicated whistleblowing platform designed to elevate transparency and equity in interactions between our company and business partners. Its primary objective is to cultivate heightened levels of trust in these relationships.

Should any situation arise, or if suspicions emerge regarding violations of laws, regulations, transaction agreements, The CITIZEN Group Human Rights Policy, or any related matters in business transactions, we strongly encourage reporting. Our commitment lies in addressing and resolving such issues collaboratively. To make a report, kindly provide the requisite information and submit it via the provided platform below.

Human Rights Risks in the Supply Chain

The CITIZEN Group is resolutely addressing potential human rights risks within its supply chain. Under the leadership of the Group Sustainable Procurement Committee (with the Group Human Resources Committee overseeing human rights risks within the Group), the organization is orchestrating comprehensive risk management initiatives, encompassing human rights and procurement risk identification and subsequent enhancements.

To pinpoint potential risks, a multi-faceted approach has been undertaken. This includes leveraging insights from the Sustainable Procurement Committee's expert study session (conducted during the inaugural meeting in FY2021) on human rights risk identification methods. Additionally, materials from the Caux Roundtable's stakeholder engagement program have been employed. Insights gleaned from interviews with individuals possessing expatriate experience further enriched this risk assessment process.

The outcome of these endeavors revealed potential risks associated with conflict minerals and the working conditions of raw material suppliers. In FY2022, the focus was on devising strategies to mitigate conflict mineral risks. Concurrently, a comprehensive effort to uncover human rights risks was extended to each of our operational entities.

In FY2023, The CITIZEN Group is united in its commitment to deliberate and implement measures aimed at minimizing human rights risks. This includes an exploration of corrective measures to address labor environment concerns among raw material suppliers within the watch business segment.

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Potential human rights risks Corrective Measures
Watch business Conflict Mineral Risk Continue activities to achieve 100% procurement rate from CFS certified smelters*
Working environment of raw material suppliers To be considered in FY2023
Business Management Company Conflict mineral risk, labor environment of raw material suppliers, etc. To be considered in FY2023
  • * CFS-certified smelters: Smelters certified by the Responsible Mineral Initiative (RMI) RMAP

Policy on the Rights of the Child

The CITIZEN Group supports the Japan Committee for UNICEF's "Children's Rights and Business Principles" (CRBT) and is committed to avoiding violations of children's rights in its business operations and to working toward the realization of children's rights. In FY2022, we participated in the "Environmental Improvement Project for Girls' Dormitories in Elementary and Junior High Schools in Vietnam" through support for the activities of Plan International, an international NGO, and provided support for the environmental improvement of girls' dormitories and educational and training activities.

Mineral Procurement Initiatives

The CITIZEN Group also recognizes conflict minerals, which carry the risk of funding armed groups and human rights abuses, as an important procurement risk. Recognizing the application of the EU Conflict Minerals Regulation in 2021, as well as the expansion of target minerals, target regions, and target risks, we revised our existing Conflict Minerals Response Policy into The CITIZEN Group Responsible Minerals Procurement Policy in January of the same year. The revised policy clarifies the expansion of targeted minerals and sourcing regions, as well as the actions to be taken when risks are identified. In addition to suppliers procuring the subject minerals, The CITIZEN Group itself is working to eliminate conflict minerals as a supplier by complying with the code of conduct of the Responsible Business Alliance (RBA) at the request of suppliers to whom it delivers parts and other items.

The CITIZEN Group Responsible Minerals Procurement Policy (Established April 2019. Amended January 2021)

To fulfill our social responsibilities in the supply chain in cooperation with our business partners, The CITIZEN Group, as a policy, will not use target minerals*1 that may contribute to any risk of human rights abuses such as child labor or forced labor, environmental destruction, conflict, terrorist financing, money laundering, corruption, or fraudulent financing in mining, trading, handling, export, and our other business activities.

This does not mean, however, that any and all minerals mined and traded in conflict areas and high-risk areas should not be used, and we may use minerals mined and traded in these areas if they are not related to human rights violations, environmental destruction, conflicts, corruption, or other wrongdoings.

If a potential target risk*2 is confirmed, we will ask the relevant business partners to take corrective actions.

  • Target minerals: 3TG (tantalum, tin, tungsten, gold) and cobalt
  • Target risks: Risks and environmental destruction under Annex II of the OECD Guidance:

The CITIZEN Group Sustainable Procurement Committee Structure

Under the Sustainability Committee, The CITIZEN Group has established The CITIZEN Group Sustainable Procurement Committee, in which the procurement divisions and CSR divisions of group companies participate as members. The committee meets twice a year to share The CITIZEN Group's goals and KPIs for responsible mineral procurement. At the end of the fiscal year, the Sustainability Committee reports and reviews the status of initiatives and holds study sessions to implement ongoing efforts and improvements.

The CITIZEN Group Sustainable Procurement Committee takes the lead in implementing Group-wide measures for responsible mineral procurement, and the status of these measures is shared with the Board of Directors through reports to the Sustainability Committee.

The CITIZEN Group Sustainable Procurement Committee Structure
2022 Progress in the Roadmap

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Goals Achievement status Details of results
Conduct due diligence on responsible mineral procurement in accordance with the Organization for Economic Cooperation and Development OECD guidelines (Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict and High-Risk Areas). Achievement status We have conducted due diligence on conflict minerals in our supply chain in line with OECD guidance. For details, please refer to "Status of Responsible Mineral Procurement Initiatives" below.

Responsible Mineral Procurement Initiatives (Disclosure and remediation)

The CITIZEN Group recognizes that 3TG, which originates from conflict zones and high-risk areas (CAHRAs) such as the Democratic Republic of Congo and neighboring countries, is an important international issue because it is a source of funding for armed groups and contributes to conflict, human rights abuses, and environmental destruction. We also endorse the concept of the OECD "Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict and High-Risk Areas" and are implementing initiatives in line with the framework set forth by the Guidance.

Furthermore, CITIZEN WATCH is taking proactive measures to enhance the elimination of conflict minerals. This involves divulging the proportion of smelters that hold Conflict-Free Smelter (CFS) certification for each mineral, adhering to the prescribed framework. These efforts are geared towards addressing the situation from the perspective of human rights risks, underlining our commitment to responsible practices and the reduction of negative impacts associated with conflict minerals.

Smelter Due Diligence Results by 3TG Minerals for Watch Operations

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FY2022 Total Gold Tin Tantalum Tungsten
Number of specific smelters 342 171 83 35 53
Number of CFS certified smelters or Number of smelters in the audit process 255 107 67 35 46
Percentage during the certification or audit process> 74.6% 62.6% 80.7% 100.0% 86.8%
As of May 15, 2023

Framework for initiatives under the OECD Guidance (Steps 1-4)

Step 1Establish strong company management systems

Based on The CITIZEN Group Basic Procurement Policy and The CITIZEN Group Responsible Mineral Procurement Policy, we are promoting Group-wide measures to deal with conflict minerals. Each Group company that may be involved in conflict minerals educates employees in the relevant departments about conflict minerals, and requests that suppliers understand The CITIZEN Group Basic Procurement Policy and The CITIZEN Group Responsible Minerals Procurement Policy and comply with The CITIZEN Group Code of Conduct and The CITIZEN Group CSR Procurement Guidelines.

Step 2Identify and assess risks in the supply chain

The 3TG surveys are conducted using the Conflict Minerals Reporting Template (CMRT), a tool provided by the Responsible Minerals Initiative (RMI), to check for the presence of conflict minerals, identify refiners in the supply chain, and confirm and assess the state of conformity to RMAP * and the state of suppliers' initiatives to address subject minerals.

In addition, for cobalt, a survey using the Extended Minerals Reporting Template (EMRT) has been conducted since FY2021 according to the business characteristics of The CITIZEN Group.

Step 3Design and implement a strategy to respond to identified risks

Based on the results of the survey, we communicate the identified risks to suppliers who have identified risks, such as transactions with smelters/refineries that do not comply with the RMAP and a lack of transparency of the subject minerals, and provide consultation and support for improvement, including smelter changes.

Requests from The CITIZEN Group customers to provide supply-chain information are responded to by providing information using the above CMRT and EMRT, along with the additional questioning of suppliers, requests for the resubmission of the CMRT or EMRT, and surveying.

Step 4Carry out independent third-party audits of supply chain due diligence at identified points in the supply chain

By asking suppliers to procure minerals from refiners conforming to RMAP or to the compliance standards of The CITIZEN Group customers, we encourage RMAP conformity by refiners through our suppliers.

  • * RMAP(Responsible Minerals Assurance Process)Responsible Minerals Audit Process

Other Responsible Mineral Procurement Initiatives

Lab-grown Diamonds

As with 3TG, The CITIZEN Group is also committed to the responsible procurement of diamonds, which are at risk of being involved in disputes.

CITIZEN WATCH uses "lab-grown diamonds," which are synthetic diamonds of the same quality as natural diamonds, in some of its products. Lab-grown diamonds do not require the mining and processing of rough diamonds, and are thus not only ethical as they are free from the risk of involvement in conflict minerals, but also have only a very minor environmental impact.

Lab-grown diamond

FSC®-certified paper used for watch boxes

CITIZEN WATCH is gradually switching to FSC®-certified paper as the material for watch boxes for some areas, starting in October 2022. (Excluding some products)

FSC® certification provides a system supporting producers who provide products derived from materials that are sourced from responsibly managed forests, recycled materials or other low risk sources.

Consciously choosing FSC®-certified paper helps support responsible producers and the regions where they operate, while also helping to conserve the forests which absorb so much carbon dioxide.


* FSC®: Forest Stewardship Council®; FSC®N002484.

Green Procurement

The CITIZEN Group is implementing "Green Procurement," which prioritizes the purchase of products, parts, raw materials, etc. with a low environmental impact from suppliers who are promoting environmental management activities. We ask our suppliers to understand the importance of environmental management activities and cooperate with our activities by submitting the Declaration of Compliance with Green Procurement Standards (14th edition) and the scheme for communicating information on chemical substances contained in products (chemSHERPA). (Revised July 2023)

Reference Information

Items to be submitted by suppliers

The following items are requested to be submitted in accordance with The CITIZEN Group Green Procurement Standards.

Items to be submitted in writing
The CITIZEN Group Green Procurement Standards Declaration of Conformity (14th Edition)
Items to be submitted electronically
Scheme for the Communication of Information on Chemical Substances in Products (chemSHERPA)*
  • * Provision of Information on the Chemical Substance Content of Procured Goods: In order to comply with the European REACH and other laws and regulations concerning the management of information on chemical substances contained in procurement items, we request that our business partners submit information on the chemical substances contained in procurement items, in principle, using the common format (chemSHERPA-CI/AI) provided by the Joint Article Promotion consortium (JAMP).