Climate Change Data

Environmental Metrics

ESG Focus Areas

• Resolution of medical issues through innovation
• Improvements in accessibility to healthcare
• Pursuit of quality and trust
• Strengthening supply chain management
• Increasing engagement
• Promotion of diversity, equity & inclusion
• Development of human resources
• Promotion of health and occupational safety
• Resource circulation in product life cycle
• Reduction in environmental burden through business activities
• Corporate governance
• Compliance
• Risk management
• Respect for human rights

Environmental Achievements

• Reduced Scope 3 greenhouse gas emissions by 4%, meeting the target.
• Achieved a 32% reduction in waste, meeting the target.
• Achieved a 43% use rate of recycled and environmentally friendly materials in containers and packaging, meeting the target.
• Reduced Scope 1 and Scope 2 emissions by 29%, generally in line with targets.

Social Achievements

• Improved Group engagement score to 75%, on par with Fortune 500 companies.
• Decreased employee turnover rate by 0.7 percentage points.
• Achieved 61% male employee participation in childcare leave, meeting the 60% target.
• Maintained a high employee engagement score (75%) and value-added productivity (¥14,760 per hour).

Governance Achievements

• Had 15 unethical incidents in fiscal 2023, none of which were serious violations.
• Received 26 internal reports of incidents and handled them appropriately.
• Conducted multilingual global compliance training for all Group employees.

Climate Goals & Targets

Environmental Challenges

• Limited effectiveness in reducing water consumption in reagent factories.
• Waste generated due to discontinuation of supplying hemostasis reagents in Russia (0.4% of unused Sysmex products discarded as waste).
• Falling short of target for average training hours per employee (24.4 hours).
• Shortfall in target for reduction in annual working hours (2,010 hours).

Mitigation Strategies

• Reviewing tank cleaning methods and promoting water recycling in reagent factories.
• Implementing a recycling program for discontinued equipment and parts.
• Leveraging online content and internalizing training programs across the Group.
• Optimizing assignment through enhanced recruitment efforts and actively conducting training and awareness-raising activities.

Supply Chain Management

Supplier Audits: On-site assessments of four primary suppliers in FY2023; CSR surveys of 96 Tier 2 suppliers.

Responsible Procurement

• CSR surveys
• Quality assurance agreements
• Regular quality assessments and audits
• Green Procurement Standards

Climate-Related Risks & Opportunities

Physical Risks

• Large natural disasters
• Regional water shortages

Transition Risks

• Regulatory changes
• Increased energy and raw material costs
• Changes in customer environmental awareness

Opportunities

• Resource efficiency
• Development of energy-efficient products
• Improved reputation and higher expectations in financial markets

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards, SASB Standards, TCFD recommendations

Certifications: ISO 9001, ISO 13485, ISO 14001, ISO 27001, ISO 45001, ISO 30414

Third-party Assurance: Independent Practitioner’s Assurance

UN Sustainable Development Goals

• Goal 3: Good Health and Well-being
• Goal 9: Industry, Innovation and Infrastructure
• Goal 12: Responsible Consumption and Production
• Goal 13: Climate Action
• Goal 5: Gender Equality
• Goal 8: Decent Work and Economic Growth
• Goal 17: Partnerships for the Goals

Sysmex's initiatives contribute to these goals through various programs and activities related to healthcare access, sustainable product development, environmental protection, diversity and inclusion, and global partnerships.

Sustainable Products & Innovation

• Energy-efficient analyzers
• Concentrated reagents
• Products using non-animal-derived raw materials

Awards & Recognition

• IMV ServiceTrak™ Awards
• Supplier Legacy Award
• China Medical Device Industrial Data Survey Award
• 11th Zero Malaria Award
• Longitude Prize on AMR
• Human Capital Leaders 2023
• Human Capital Management Quality 2023 Gold
• Global 100
• Ethibel Excellence
• Ethibel Pioneer
• Ethibel Sustainability Index (ESI)
• Euronext Vigeo Eiris World 120 Index
• SOMPO Sustainability Index
• iSTOXX MUTB Japan Platinum Career 150 Index
• 2023 IR Award

Environmental Metrics

ESG Focus Areas

• Transform Business Portfolio
• Contribute to Mitigating Global Warming
• Practice Socially Responsible Management

Environmental Achievements

• Reduced GHG emissions (Scope 1 and 2) by 13% compared to FY2019 (target: 30% reduction by FY2030)
• Reduced Scope 3 emissions by 5% compared to FY2022 (target: 10% reduction by FY2030)
• Effective waste utilization rate of 92.0% (target: ≥94%)
• Zero waste emission rate of 97.1% (target: ≥99%)
• Water usage reduction rate of -18.5% compared to FY2019

Social Achievements

• OMNICHROMA®, a dental filling composite resin, won three domestic technical awards
• Selected as a Health and Productivity Stock for the second consecutive year
• Received Platinum Kurumin Certification
• Employee engagement (response rate): 94.7%
• Percentage of women hired with a bachelor’s degree or higher: 30.1%
• Percentage of female managers: 8.2%

Governance Achievements

• Established a Corporate Governance Policy
• Increased management transparency through disclosure of information
• Clarified responsibilities of all executive officers for addressing materiality, reflected in their remuneration

Climate Goals & Targets

Environmental Challenges

• Sluggish semiconductor market impacting sales of Electronic & Advanced Materials
• High raw material prices
• Declining domestic cement demand
• Aging facilities requiring increased repair costs
• Securing personnel from a declining and aging labor market
• Changes in work style needs
• Global instability impacting supply chains

Mitigation Strategies

• Raising selling prices
• Improving manufacturing costs
• Implementing energy-saving facilities and reducing coal consumption
• Revising sales prices to secure profits
• Implementing a new job-based personnel system for managers
• Developing a multilateral recruitment route
• Establishing multiple evaluation methods based on job function and work style
• Promoting DX to improve operational efficiency

Supply Chain Management

Supplier Audits: 173 out of 181 companies with a transaction value of ¥100 million or more

Responsible Procurement

• CSR procurement guidelines

Climate-Related Risks & Opportunities

Physical Risks

• Wind and flood damage to production plants
• Decrease in production capacity due to insufficient factory cooling capacity
• Production halts due to storm surges

Transition Risks

• Increase in operating costs due to expanded carbon pricing
• Increased green energy production and procurement costs
• Increased costs for green material procurement
• Opportunity loss due to delays in building a green supply chain
• Lost opportunities due to insufficient efforts for entering the circular economy

Opportunities

• Expansion of businesses offering waste disposal
• Effective utilization of resources
• Measures to combat global warming
• Commercialization of renewable resources and energy
• Enhancing site competitiveness by promoting large-scale green supply chains
• Entering new business fields by establishing a carbon recycling system

Reporting Standards

Frameworks Used: IFRS Foundation Integrated Reporting Framework, GRI Sustainability Reporting Standards, TCFD recommendations, GHG Protocol

Certifications: DX certified business operator

Sustainable Products & Innovation

• Alkaline water electrolyzer
• Magnesium hydride
• CO2-fixing recycle beads
• Next-generation photochromic materials

Awards & Recognition

• Three domestic technical awards for OMNICHROMA®

Environmental Metrics

ESG Focus Areas

• Strong Governance, Business Ethics and Compliance
• Employee Safety, Wellbeing, and Engagement
• Rights of First Nations Peoples and Reconciliation
• Community Engagement and Investment
• Ethical Sourcing and Modern Slavery
• Diversity and Inclusion
• Labour Practices
• Product Design, Quality, and Safety
• Energy Consumption and Emissions Reduction
• Operational Waste and Recycling
• Data Security and Privacy
• Climate-Related Risks
• Sustainable Packaging

Environmental Achievements

• Equipped an additional 7 stores with solar power generation (bringing the total to 30)
• Added ‘GreenPower’ to the Group’s energy mix
• Increased the number of private label brand products with sustainable packaging
• Removed all single-use JB Hi-Fi plastic bags (replaced with FSC 100% recycled paper bags)
• Improved the sustainability of packaging used for online deliveries
• Implemented in-store battery and e-waste recycling capabilities in all stores

Social Achievements

• Further progress on diversity, with more women in leadership positions
• Developed quality training for teams to manage health and safety risks (including psychosocial hazards and customer aggression)
• Enhanced engagement between teams and charities in workplace giving programs
• Onboarded two new charities (environment and mental health) to The Good Guys Doing Good Program

Governance Achievements

• Updated Ethical Sourcing Policy to include sustainable packaging standards
• Formalized compliance requirements for ethical sourcing
• Regular reporting on sustainability to the Audit and Risk Management Committee and the Board

Climate Goals & Targets

Environmental Challenges

• Increased customer aggression
• Increased stock volumes and product sizes leading to manual handling incidents
• Challenges engaging some suppliers on ethical sourcing
• Recurring issues with working hours and social insurance payments for some suppliers in China
• Data limitations in calculating scope 3 emissions
• Challenges in obtaining timely and accurate data on packaging and waste metrics from suppliers

Mitigation Strategies

• Roll out of psychosocial hazard training for managers
• Training on managing aggressive customers
• Initiatives to improve manual handling practices (e.g., working groups, new racking, training)
• On-site factory visits in China
• Collaboration with RBA for ethical sourcing
• Engagement with suppliers on emissions reduction and sustainable packaging targets
• Use of assumptions and estimations for scope 3 emissions with plans to improve data collection
• Working with suppliers to improve data collection on packaging and waste

Supply Chain Management

Supplier Audits: 74 social compliance audits reviewed

Responsible Procurement

• Ethical Sourcing Policy, supplier questionnaires, factory visits, RBA membership

Climate-Related Risks & Opportunities

Physical Risks

• Severe weather events (floods)
• Longer-term changes in weather patterns

Transition Risks

• Changes in global carbon pricing and legislation
• Changes in consumer demand
• Increased price and supply volatility of electricity
• Reputational risk from not meeting stakeholder expectations

Opportunities

• Increased demand for sustainable products and services
• Integration of renewable energy sources
• Improved energy efficiency
• Enhanced brand reputation

Reporting Standards

Frameworks Used: Global Reporting Initiative (GRI) 101 Foundation Standard, Task Force for Climate-Related Financial Disclosures (TCFD)

Certifications: FSC 100% recycled paper bags

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Increased use of recycled materials in private label products

Awards & Recognition

• JB Hi-Fi Helping Hands – Workplace Giving Program of the Year

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced Scope 1 and 2 emissions by 64% to 23.40 tCO2e
• Implemented a carbon-offset initiative for Autopay customers, offsetting emissions from over 9 million kilometers driven.
• Utilize 100% carbon neutral energy in Sydney office

Social Achievements

• Achieved an 87% employee engagement score (well above industry benchmarks)
• Published inaugural Modern Slavery Statement
• Partnered with Canteen, contributing over $110,000 to their Education and Career Support Service
• 42% female representation in the general workforce
• Implemented a policy for three days of paid community service leave

Governance Achievements

• Implemented a Group Environmental & Social Policy requiring Directors and Officers to consider ESG impacts
• ESG performance accounts for 30% of CEO and CFO's long-term incentive and 10% for all employees' equity incentive plan
• Appointed a Board Director with extensive corporate management experience in financial services
• Appointed BDO as Internal Auditors

Climate Goals & Targets

Environmental Challenges

• Current macroeconomic challenges in Australia (rising interest rates, high inflation, potential increase in unemployment)
• Cyber security risks
• Credit risk in a higher risk macro environment

Mitigation Strategies

• Moderating growth in FY23 to focus on scale advantages and innovation
• Ongoing investment in cybersecurity
• Robust credit risk processes and diversification towards secured assets
• Diversified funding platform
• Ability to pass on market interest rate increases through largely variable rate product range

Supply Chain Management

Supplier Audits: Reviewed major suppliers based on publicly available ESG and modern slavery information

Responsible Procurement

• Modern slavery and ESG questionnaires developed for supplier assessments

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: TCFD, GRI (developing reporting), B Corp (applying for certification)

Third-party Assurance: Deloitte (limited assurance engagement for carbon emissions)

Sustainable Products & Innovation

• Plastic-free virtual Freestyle credit card

Awards & Recognition

• Canstar’s Innovation Excellence Award 2022 (Autopay)