Climate Change Data

Environmental Metrics

ESG Focus Areas

• R&D
• Environmental Management
• Human Resources Management
• Social Contribution
• Governance

Environmental Achievements

• Reduced total waste emissions by 18% year-over-year.
• Increased waste recycling rate by 24% year-over-year.
• Increased reuse of water by 14% year-over-year.

Social Achievements

• Designated as a Family-Friendly Company by the Ministry of Gender Equality and Family.
• Employed 503 new employees, the highest number among domestic pharmaceutical and bio companies.
• Achieved 93.7% of domestic sales through self-developed products.

Governance Achievements

• Obtained AA rating for two consecutive years (2015, 2017) in the Fair Trade Self-Compliance Program (CP) evaluation.
• Became the first pharmaceutical company in Korea to obtain ISO 37001 certification (Anti-bribery Management System).
• Obtained ISO 27001 certification (Information Security Management System).

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Hanmi Purchasing Ethics Code

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Standards Core option

Certifications: ISO 14001, OHSAS 18001, ISO 37001, ISO 27001

Third-party Assurance: Korea Standards Association

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• President's Award (Fair Trade Commission)
• Minister of Health and Welfare Award
• Minister of Trade, Industry and Energy Award
• Minister of Employment and Labor Award
• Gyeonggi-do Award
• Seoul Metropolitan Government Award

Environmental Metrics

ESG Focus Areas

• R&D Management
• Customer Satisfaction
• Ethics Management
• Talent Management
• EHS Management
• Win-Win Management

Environmental Achievements

• Greenhouse gas emissions reduced by 5.6% (emission unit)
• Water usage reduced by 4.9%
• Waste recycling rate of 76% achieved
• Air and water pollutant emissions below 50% of legal limits

Social Achievements

• Ranked No. 1 in the pharmaceutical sector and No. 6 overall in the Korean Sustainability Index
• Opened Hanmi Dream Tree Nursery at Paltan Smart Plant
• Launched Amosartan XQ, the world’s first four-ingredient combination drug
• Increased employment of people with disabilities (reached 86% of mandatory level)
• Maintained top position for three consecutive years in domestic outpatient prescription sales

Governance Achievements

• First domestic company to be awarded the CP grade ‘AAA’ by the Fair Trade Commission
• Awarded an ‘A’ grade in the ESG integrated evaluation conducted by the Korea Corporate Governance Service (KCGS)
• Established an internal control system in January 2020 to enhance transparency in accounting and effective risk management of financial reporting

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic
• Decreasing domestic self-sufficiency of finished drugs
• Global uncertainty and influence from environmental and safety risks

Mitigation Strategies

• Established an emergency response & quarantine system based on the Business Continuity Management System (BCMS)
• Developed alternative sourcing strategies
• Implemented hEHS management policy and activities of the hEHS committee
• Strengthened safety management for subcontractors

Supply Chain Management

Responsible Procurement

• Fair trade principles
• Compliance with subcontracting laws and regulations
• Hanmi Code of Ethics for Purchases

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards (Core Option)

Certifications: ISO 14001, ISO 45001, ISO 22301, ISO 37001

Third-party Assurance: Korea Standards Association

UN Sustainable Development Goals

• Goal 1
• Goal 3
• Goal 5
• Goal 6
• Goal 7
• Goal 8
• Goal 9
• Goal 10
• Goal 12
• Goal 13
• Goal 15
• Goal 16
• Goal 17

Various initiatives contributing to these goals are described throughout the report.

Awards & Recognition

• AAA CP grade
• A grade in KCGS ESG evaluation
• No. 1 in the pharmaceutical sector in KSI
• Grand prize for ‘corporate sustainability management’ at the 2020 GSMA
• K-ICT Excellence Award

Environmental Metrics

ESG Focus Areas

• R&D Management
• Ethical Management
• Talent Management
• Customer Satisfaction Management
• EHS (Environment, Health, Safety) Management
• Win-win Management

Environmental Achievements

• Greenhouse Gas emissions reduced by 24.4% vs. previous year
• Waste recycling rate increased to 65%
• Water usage reduced by 25.8% vs. previous year
• Air/Water pollutant emissions below 50%/30% of legal limits respectively
• 100% certification of EHS management systems (ISO 45001, ISO 14001)

Social Achievements

• Launched various employee wellbeing programs, including refresh vacation and family-friendly policies
• Increased employment of people with disabilities (reached 82% of mandatory level)
• Maintained No. 1 status in sales in the domestic outpatient prescription market for four consecutive years
• Released eighteen blockbuster products (annual sales over KRW 10 billion)
• Amosartan drug family exceeded KRW 1 trillion in sales
• Supported children & youths from multicultural families
• Provided medical supplies to vulnerable groups and disaster relief

Governance Achievements

• Achieved highest CP grade (AAA) from the Fair Trade Commission
• Acquired ISO 37001 (Anti-bribery Management System) certification
• Established and operated Board of Directors, CSR committee, hEHS committee, and Audit committee
• Strengthened communication with stakeholders

Climate Goals & Targets

Environmental Challenges

• Difficult management conditions due to the COVID-19 pandemic, including economic uncertainty and intensified competition
• Global supply chain disruptions
• Potential risks related to ethical and compliance management
• Maintaining a stable supply of raw materials

Mitigation Strategies

• Implemented Business Continuity Management System (BCMS) and COVID-19 emergency response organization
• Strengthened online marketing for customers
• Established an internal reporting environment for whistleblowers
• Implemented various supplier support policies, including fair trade guidelines and health & safety eligibility evaluations
• Developed alternative sourcing strategies
• Strengthened internal control system (internal accounting management and internal audit function)

Supply Chain Management

Supplier Audits: Periodic evaluations of existing and new suppliers

Responsible Procurement

• Code of Ethics on Purchasing
• Fair trade guidelines
• Health & safety eligibility evaluations
• Long-term contracts
• Cash payment for packaging/goods to excellent suppliers

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards (Core Options)

Certifications: ISO 14001, ISO 45001, ISO 27001, ISO 37001, ISO 22301

Third-party Assurance: Korea Standards Association (KSA)

UN Sustainable Development Goals

• Goal 1
• Goal 3
• Goal 5
• Goal 6
• Goal 7
• Goal 8
• Goal 9
• Goal 10
• Goal 12
• Goal 13
• Goal 14
• Goal 15
• Goal 16
• Goal 17

Various initiatives contribute to these goals as detailed throughout the report

Sustainable Products & Innovation

• Eco-friendly packaging for medicines

Awards & Recognition

• Presidential Prize at the Korea Brand Awards (2021)
• Various awards for ethical and compliance management
• Minister of Environment Award (Hanmi Fine Chemical)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Environmental Management
• Biodiversity
• Occupational Health and Safety
• Human Rights
• Workforce Diversity & Inclusion
• Talent Management
• Supply Chain Management
• Responsible Marketing
• Data Privacy & Security
• Corporate Governance
• Risk Management
• Ethical & Legal Compliance
• Social Contribution

Environmental Achievements

• Reduced NOx emissions by 54% since 2018.
• Achieved 93% waste recycling rate in 2022.
• Reduced water intake by 6% since 2018.

Social Achievements

• Launched various employee well-being programs, including childcare support and mental health services.
• Maintained a 0% industrial accident rate in 2022.
• Expanded social contribution activities, including support for underprivileged communities and medical professionals.

Governance Achievements

• Maintained AAA rating for Compliance Program (CP) for 4 consecutive years.
• Established robust internal control systems and risk management frameworks.
• Implemented ISO certifications across various areas (14001, 45001, 27001, 37001, 22301, 13485).

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to global uncertainties.
• Increasing regulatory requirements related to environmental protection and chemical management.
• Climate change risks (physical and transition risks).

Mitigation Strategies

• Developed alternative sourcing strategies and strengthened supply chain resilience.
• Implemented robust environmental management systems (EMS) and chemical management processes.
• Established a long-term carbon reduction roadmap (h-Carbon Program, 2030 NDC, 2040 Net Zero).

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Code of Conduct
• ESG assessment of suppliers
• Emphasis on responsible sourcing

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (typhoons, earthquakes)
• Increased operating costs due to rising temperatures
• Water scarcity

Transition Risks

• Regulatory changes related to carbon emissions
• Increased costs of low-carbon technologies
• Changes in carbon pricing mechanisms

Opportunities

• Development of energy-efficient products and processes
• Enhanced corporate image through climate action
• Access to green financing and investment

Reporting Standards

Frameworks Used: GRI Standards, SASB, TCFD, UNGC, KRX ESG Information Disclosure Guidance

Certifications: ISO 14001, ISO 45001, ISO 27001, ISO 37001, ISO 22301, ISO 13485

Third-party Assurance: Korea Standards Association

UN Sustainable Development Goals

• Goal 3: Good Health and Well-being
• Goal 4: Quality Education
• Goal 5: Gender Equality
• Goal 8: Decent Work and Economic Growth
• Goal 9: Industry, Innovation and Infrastructure
• Goal 10: Reduced Inequalities
• Goal 11: Sustainable Cities and Communities
• Goal 12: Responsible Consumption and Production
• Goal 13: Climate Action
• Goal 17: Partnerships for the Goals

Hanmi Pharm's initiatives contribute to these SDGs through various ESG activities.

Sustainable Products & Innovation

• Eco-friendly packaging for all products

Awards & Recognition

• 2022 Ministry of Trade, Industry and Energy Corporate Innovation Award
• 3 consecutive years of top ranking in the pharmaceutical sector of the Korea Sustainability Index (2020-2022)
• ALB Korea Awards 2022 (ESG In-house team of the Year, INNOVATIVE In-house team of the Year)

Environmental Metrics

ESG Focus Areas

• Sustainable Supply Chain Management
• Fair Trade
• Quality Management
• Supplier Development
• Mutual Growth

Social Achievements

• Implemented fair trade guidelines and Code of Ethics on Purchasing to prevent unfair practices.
• Established Supplier Relationship Management System (SRM) to simplify supply process and foster mutually beneficial relationships.
• Provided supplier mentoring and training programs to enhance capabilities and understanding of pharmaceutical industry.
• Improved payment conditions (100% cash payment, advance payments for raw materials), secured reliable supplies, and signed long-term contracts.

Governance Achievements

• Formed an internal nomination committee for subcontractors to ensure fair selection and operation of suppliers.
• Established a communication channel (e-guestroom) for stakeholders, purchasers, and suppliers to ensure fair and efficient work processes.

Climate Goals & Targets

Environmental Challenges

• Growing uncertainty about the global supply chain.

Mitigation Strategies

• Aims to maintain sustainability management of the value chain and strengthen periodic inspections and monitoring.
• Will reestablish its supply chain management system and proceed with sustainability audits of the supply chain step by step.

Supply Chain Management

Responsible Procurement

• Code of Ethics on Purchasing
• Fair trade guidelines
• Periodic evaluations of existing and new suppliers
• Strict factual survey and questionnaire survey for new suppliers

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Carbon Neutrality
• Environmental Management
• Climate Change Response
• Supply Chain Sustainability
• Energy Efficiency
• Biodiversity

Environmental Achievements

• Established a mid-long-term carbon reduction target and implementation plan.
• Reduced greenhouse gas emissions/energy use by 5% compared to 2018 (68,118tCO2eq/ 1,317,568GJ) in 2022.
• Achieved 91.9% eco-friendly literature rate and 100% use of eco-friendly packaging for medicines.
• Implemented COST innovation activities resulting in 628.6 tCO2 and 12,890 GJ energy savings in 2022.
• Planted 250 trees in Hanmi Green Forest, donated 707 kg of coffee grounds, and 85 banners.

Social Achievements

• Participated in various environmental cleanup activities and community engagement initiatives.
• Engaged in activities as a chemical consultant at the Korea Fire Protection Association and as a member of the Korea Industrial Safety Association Safe Operation Committee.
• Strengthened the Green Hanmi campaign (reducing single-use cups).

Governance Achievements

• Established the hEHS Committee (Environment, Health, and Safety) in 2019, merging the Energy/Greenhouse Gas Committee.
• Enacted company-wide environmental implementation guidelines and waste policy.
• Established Hanmi Pharm’s roadmap for carbon neutrality & climate change.

Climate Goals & Targets

Environmental Challenges

• Non-compliance with climate change regulations.
• Rising cost of power and low-carbon technology adoption.
• Increased demand for Scope 2 & 3 emissions management.
• Heightened demand for climate change response from investors, stakeholders, and local communities.
• Damage to facilities from extreme weather events.
• Air/water pollutant emissions and leakage of harmful substances.

Mitigation Strategies

• Third-party greenhouse gas verification and strengthened monitoring of the emission market.
• Calculation and verification of Scope 3 emissions.
• Establishment of mid-to-long-term greenhouse gas reduction targets and implementation measures.
• Implementation of BCP through ISO 22301 certification and regular training.
• Strengthened monitoring of related policies/laws and regulations.
• Acquisition of ISO 14001 certification and enactment of related SOP.
• Review of introducing renewable energy (REC, PPA, etc.) and low-carbon technology.

Supply Chain Management

Responsible Procurement

• Increase eco-friendly purchases according to the ESG purchasing principle.
• Maintain an eco-friendly literature rate of 90% and strengthen activities for discovering eco-friendly materials.

Climate-Related Risks & Opportunities

Physical Risks

• Damage to facilities & equipment due to abnormal climate events (typhoons, earthquakes)
• Air/water pollutant emissions and leakages of harmful substances
• Rising operating costs due to rising temperatures
• Water shortages

Transition Risks

• Non-compliance with climate change regulations
• Rising cost of power and low-carbon technology
• Increased demand for Scope 2 & 3 emissions management
• Heightened demand for climate change response from stakeholders

Opportunities

• Reduction of cost of responding to emission rights regulations
• Rising global business competitiveness
• Enhancement of corporate image
• Lessening the burden of environmental impact
• Prevention of ecosystem contamination

Environmental Metrics

ESG Focus Areas

• Sustainable Supply Chain Management
• Human Rights
• Environmental Sustainability
• Ethical Sourcing
• Fair Trade

Environmental Achievements

• Established an ESG inspection system for the supply chain to assess negative environmental impacts.

Social Achievements

• Enacted four principles of fair trade and a code of ethics for purchasing to promote fair and ethical transactions.
• Implemented a mentorship program for suppliers, providing training on GMP, ethical management, ESG, and supply chain audits.
• Introduced a delivery payment linkage system to reflect changes in supplier delivery unit costs due to raw material price fluctuations.
• Received commendation from the Minister of SMEs and Startups for outstanding performance in the ‘Delivery Payment Linkage System’.

Governance Achievements

• CEO oversees the management and operation of the supply chain.
• Developed an ESG inspection platform to spread ESG management to all group companies.
• Conducted an ESG inspection of JVM, an affiliate, identifying and planning improvements for 8 potential risks.

Climate Goals & Targets

Environmental Challenges

• Uncertainty in the global supply chain.
• Potential adverse impacts on human rights and the environment from suppliers.

Mitigation Strategies

• Enacted supply chain management regulations and established a green purchasing policy.
• Periodically inspects and manages suppliers’ ESG performance.
• Developed 53 indicators in 4 areas (human rights/labor, health/safety, environment, ethics/fair trade) for supplier ESG self-inspections.
• Implemented various support policies for suppliers, including training, improved payment conditions, and long-term contracts.
• Established communication channels with suppliers to promote mutual growth.
• Developed and implemented an ESG inspection platform for group companies.

Supply Chain Management

Supplier Audits: 10 major suppliers of raw materials and sub-materials audited in 2023

Responsible Procurement

• Supplier’s Code of Conduct
• ESG inspection system
• Mentorship program
• Improved payment conditions
• Long-term contracts
• Preferential contracts for new products
• Supplier suggestion system

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: PSCI (Pharmaceutical Supply Chain Initiative), K-ESG guidelines, SDGs, GRI, TCFD

Awards & Recognition

• Commendation from the Minister of SMEs and Startups for outstanding performance in the ‘Delivery Payment Linkage System’