Third-Party Comments / External Assurance

Third-Party Comments

Consulting Fellow Research Institute of Economy, Trade & Industry, IAA
Visiting Professor, Graduate School of Economic Science, Saitama University
Toshihiko Fuji

As my third-party comments on this year's Nikon CSR REPORT, I would first like to touch on one of the feature articles, "Business Activities and CSR," and secondly on "Nikon's CSR Foundation". Then, I will move on to the priority issues focusing on the articles "Environmental Management," "Compliance," "The Labor Environment for Employees," and "Supply Chain."

1. Business Activities and CSR

This article deals with four business areas: precision equipment, imaging products, instruments and encoders, and it provides a plain explanation about how each of these areas is connected with society. It will effectively convey the social significance of Nikon's business, especially to employees. On the other hand, in order to resonate more strongly with external stakeholders, it would have been better to report what kind of social issues each business has faced, and how they have each been working to address those issues. I believe that viewing the relationship between CSR and business from a "social issue-oriented" angle in this manner, rather than a "product" angle, will give greater clarity to how business contributes to society.

2. CSR Foundation

I would like to commend the formation of the Chinese CSR Committee as a meaningful step toward Nikon's global promotion of CSR. I also believe it is of significant importance that coordinated system for the promotion of CSR in Europe, one of the targets listed for the year ending March 31, 2013 will be launched. Since I belive that promoting CSR globally necessitates interactiveness, namely, the global head office grasping the values of all parts of the world, and reflecting them in its policies and sharing them throughout the organization.

3. Expansion and Promotion of Environmental Management

Targets were achieved for almost all items under the Nikon Environmental Action Plan. A target for logistics was the only item that could not be attained, but the reasons for this have been explained, which shows Nikon's strong and unwavering commitment to environmental management. Regarding the topic of integrating biodiversity issues into business operations, which I raised last year as a challenge to be tackled, an assessment was made of the relationship of corporate activities to ecosystem services. Although this is the right direction, I feel that efforts should be accelerated and even more information should be disclosed.

4. Compliance

Following the establishment in April 2011 of the global Nikon Code of Conduct standard across all Group companies in Japan and overseas, for the rest of the year ended March 31, 2012, efforts were made to thoroughly familiarize employees across the entire Group with the revised Code of Conduct, and I welcome this progress. However— and this could be said about CSR in general, and not just compliance— I would like to make the point that this step-by-step approach of implementing first in Japan and then extending to the rest of the world should be avoided as much as possible. This is because a policy that has been created based purely from a domestic perspective has limitations when it is expanded globally. For future initiatives, Nikon should consider the importance of planning and developing globally from the point at which they start.

5. Labor Environment for Employees

One of the most worthwhile items in this year's report is the article on the stakeholders' meeting regarding diversity, where it is not only that Nikon's determination to enhance diversity is well expressed, but also that challenges to be overcome are honestly communucaited. None of the CSR issues are straightforward. The work environment for employees is, however, an especially complex topic because it often requires changes in longstanding practices. Sharing difficulties faced by Nikon with stakeholders is one important mission of the report.
This year's report contains Nikon's efforts for two of the topics I raised last year: presentation of a global vision for personnel policy, and disclosure of information on the treatments for regular and irregular employment. I would also like to recognize Nikon's Group monitoring of human rights and labor practices as a basis for future initiatives. However, not enough progress has been made yet in any of these topics, and so I hope that further endeavors will be made.

6. Supply Chain

Implementing CSR-oriented procurement requires a tremendous cost and effort. So to start with, I would like to pay tribute to Nikon's endeavors thus far, including its second survey of procurement partners in Japan. In steadily implementing CSR-oriented procurement in the future, an important point for Nikon will be whether it incorporates CSR-related requirements into its agreements with procurement partners. Although Nikon did shelve the idea of incorporating on-site inspections into its basic transaction agreements, it states that it will examine the idea of including CSR requirements into the agreements during the year ending March 31, 2013 for the partners in Japan. At the same time though, no mention has been made regarding the policy for agreements with overseas procurement partners.
I believe that Nikon should incorporate both on-site inspections and CSR requirements into its agreements. A benefit for Nikon would be an improvement in the certainty of activities undertaken by its partners, and a benefit for its procurement partners would be better understanding of Nikon's expectations and resulting increased predictability. It is also important that Nikon decide on procedures in the event a problem is identified. I would like to encourage Nikon to continue to advance CSR-oriented procurement in this direction. I would also like to remark that, even more than within Japan, there is a greater urgency outside of Japan for CSR-oriented procurement.

7. Conclusion

Finally, in terms of the report in general, I would like to offer my opinion about information disclosure and dialogue with stakeholders. With respect to information disclosure, Nikon deserves to be recognized for having made disclosures about the diversity of Nikon Corporation's directors and officers. I hope that Nikon will disclose further information along these lines. As for dialogue with stakeholders, my suggestion for the future is to embark on dialogue with overseas NGOs.

External Assurance

To further enhance the reliability of information presented, the Nikon Group has received external assurance starting with this Nikon CSR REPORT 2012 PDF Version.

Independent Assuuarance Report (PDF: 3.55MB)

Nikon Corporation's response to comments made by Ms. Edahiro and Mr. Fujii in its previous CSR report

	Comments in CSR REPORT 2011	Nikon's response
Ms. Junko Edahiro	I suggest adding comments to each graph which convey the intentions of the company.	We have arranged text and any related graphs on the same part of the page, enabling readers to read about the company's activities and future plans while referring to the graphs. We have placed graphs next to the text to make the data related to the company's activities (intentions) easy to understand.
	Please clarify how Nikon perceives worldwide energy trends and its current energy-related situation. I would like Nikon to state its major vision for where it is headed with regard to such problems as global warming.	As described in the section "Reducing CO₂ emissions", considering the current tight power supply situation in Japan, we are constantly inspecting our energy usage and working toward even more energy conservation. Environmental Activities: Reducing CO₂ emissions
	I would like to see Nikon, take on the challenge of creating a CSR Report and implementing the CSR initiatives, as a globalized company, such as disclosure of the percentage of local nationals in the management teams of overseas corporations, or the percentage of foreign nationals in management positions at the Japanese Head Office, etc.	We recognize that enhancing workforce diversity is a key management issue. Considering also the opinions garnered from the stakeholder dialogue in March, 2012, to begin with, we will continue to enact initiatives that are focused on the advancement of women in the workplace. With respect to the directors and officers of Nikon Corporation, although numbers of females foreign nationals officers were described in the CSR Report, we will examine the percentage of local nationals in the management teams of overseas corporations as a future issue.
Mr. Toshihiko Fuji	Setting concrete objectives and disclosing information about present conditions, for the purpose of advancing activities as a Group	In setting annual targets for each key issue, we have either expressed them in numbers or clarified specific standards of achievement. We believe that clearly indicating a policy from Head Office is also important for advancing group-wide activities, and we will commence our examination with diversity. Regarding disclosure of the results from the survey of Group companies, as with last year, we have only disclosed numerical data, such as the percentage of female employees, the percentage of female managers and the number of employee separations (turnover).
	Presentation of a global vision for personnel policy	We began interviewing the persons responsible for human resources at the major Group companies around the world in the year ended March 31, 2012. We will continue our efforts aimed at promptly finalizing the vision and putting it into effect. Labor Environment: Personnel System / Human Resource Development / Labor-Management Relations
	Integration of biodiversity issues into business operations	During the year ended March 31, 2012, we assessed the relationship of corporate activities to ecosystem services. During the year ending March 31, 2013, we will plan and implement measures and themes to be tackled based on the results of this assessment. Environmental Activities: The Nikon Basic Environmental Management Policy
	Disclosure of information on the conditions for regular and irregular employment	We currently provide fixed-term workers and dispatch workers with necessary training as needed which covers the same content as for regular employees. Further disclosure will be a topic for future examination. Labor Environment: Diversity
	Promotion of dialogue with stakeholders, and particularly with NGOs and NPOs	During the year ended March 31, 2012, we held stakeholder dialogues with a number of external experts, taking up one of the priority issues from the Nikon Group's CSR Medium Term Plan: diversity. Going forward, in addition to selecting topics from among the issues surrounding our Group and discussing them with stakeholders, we will also actively consider promoting dialogue with NGOs and NPOs.
	Further involvement of people in everyday business operations	We held an In-house CSR Communication Meeting, attended by the person in charge of planning from each business division. The aim of the meeting was to communicate the latest information and future approaches, and to increase awareness for this information within each business division as well as within their affiliated Group companies. The opportunity has also been used to share the proceedings of the CSR Committee as well as general trends in CSR. We will continue to regularly convene this meeting, aiming that such a platform can be used to raise awareness for CSR in a more familiar manner in the business divisions, leading to greater group-wide initiatives.

*Please see the CSR Report 2011 for a more detailed discussion of this view.