Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Achieved S-Certification, the highest rank of the CASBEE environmental performance assessment for its new headquarters and laboratory.
• Reduced CO2 emissions (Scope 1+2) to 1,381 tons in FY2020 (9.2 tons per employee).
• Business-related waste recycling rate of approximately 100%.
• Adopted an electricity supplier that proactively promotes renewable energy since August 2018.

Social Achievements

• Female employee ratio of 38% (exceeds the pharmaceutical industry average).
• 100% of female employees have taken childcare leave in the past eight years, with a 100% return and six-year retention rate.
• Employee turnover rate of 3.2% (well below the industry average).
• Actively participates in local community events and educational/academic activities.

Governance Achievements

• Established an Auditing Committee with four independent external directors with voting rights.
• Ratio of independent external directors is 57%.
• Proactive and fair disclosure of corporate information.

Climate Goals & Targets

Environmental Challenges

• Increasing water consumption during winter months due to humidifier use.
• Managing Scope 3 emissions.

Mitigation Strategies

• Considering more efficient methods for water usage during winter.
• Implementing measures to reduce Scope 3 emissions (details not specified in report).

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: TCFD

Certifications: CASBEE S-Certification

Environmental Metrics

ESG Focus Areas

• CO2 emission reduction and climate change
• Reducing waste
• Effective use of water resources and prevention of water pollution
• Diversification of core human resources
• Respect for diversity and creation of decent working environment
• Respect for human rights and observance of occupational health and safety
• Dialogue with shareholders, investors, and the broader community
• Corporate governance
• Compliance and risk management
• Contribution to local communities

Environmental Achievements

• Reduced 1.49 t CO2 (YoY) for CO2 emissions per employee (Scope1+2)
• Switched to virtually CO2-free electricity across business operations in January 2022 (four years ahead of schedule)

Social Achievements

• Appointed a female director in 2021
• Established targets for 2030 for workforce diversity (at least 50% doctorate holders, 30% female managers, 30% foreign employees or employees with overseas work experience, 30% employees in their 20s/30s)
• Supporting Japan's leading wheelchair rugby athletes
• Implemented onboarding program to promote mutual understanding between organizations
• Held monthly townhall meetings for all employees

Governance Achievements

• Established the Sustainability and Governance Committee in 2021
• Appointed an Independent External Director as Chairman of the Board of Directors
• Amended Articles of Incorporation to allow the Chairman of the Board of Directors to be an independent external director
• Conducted a scenario analysis on climate-related risks and opportunities in line with TCFD recommendations

Climate Goals & Targets

Environmental Challenges

• Concentration of personnel and facilities at a single site, posing risk from natural disasters (flooding)
• Risk of infectious diseases and cyberattacks

Mitigation Strategies

• Emergency power supply installed, evacuation space designated, three days' worth of food and water stockpiled, regular disaster drills conducted
• Information Security Manager appointed, measures to prevent information leakage implemented, external expert utilized for incident response

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Flooding

Opportunities

• Increased need for research and development of infectious diseases

Reporting Standards

Frameworks Used: TCFD

Certifications: CASBEE S rating (headquarters and laboratories)

UN Sustainable Development Goals

• SDG 3: Good Health and Well-being

Contribution through research activities

Awards & Recognition

• TOP-RATED ESG PERFORMER 2022 from Sustainalytics

Environmental Metrics

ESG Focus Areas

• Climate change/CO2 emission reduction
• Waste reduction
• Biodiversity conservation
• Addressing unmet medical needs through the discovery of transformational medicines
• Responsible sourcing/Stable product supply
• Community relations
• Cultivating a culture of innovation/Ensuring diversity in core human resources
• Respecting human rights/Occupational health and safety
• Corporate governance
• Compliance and risk management
• Stakeholder engagement

Environmental Achievements

• Achieved carbon neutrality across PeptiDream operations for 3 consecutive years
• PDRadiopharma decided to switch to renewable energy
• Set group-wide carbon emission reduction target for SBT accreditation

Social Achievements

• Reformed HR system based on newly defined Values & Behaviors
• Visualization of employee engagement
• Continued efforts to enhance cybersecurity
• Formulated basic policies and personnel requirements for CEO succession plan
• BPC measures against large-scale natural disasters

Governance Achievements

• Strengthened supervisory by independent Outside Directors and the Auditing Committee
• Selected as an index constituent of the FTSE4Good Index Series and FTSE Blossom Japan Index
• Achieved A- rating from CDP for the second consecutive year

Climate Goals & Targets

Environmental Challenges

• Challenges to attract and retain top talent due to labor shortages in Japan
• Intensifying conflicts between or within nations, political, economic and social decoupling and security crisis

Mitigation Strategies

• Strengthening recruitment competitiveness and securing human resources through improving employee engagement; responding to societal changes such as rising wage levels and diversifying work styles
• Diversifying the supply of raw materials to multiple regions and companies

Supply Chain Management

Supplier Audits: 100% response rate for major raw material suppliers

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Temporary suspension of business operation due to damage to facilities caused by natural disasters and restrictions on the supply of various infrastructures

Transition Risks

• Increased costs due to the introduction of carbon taxes

Reporting Standards

Frameworks Used: GRI, TCFD

Environmental Metrics

ESG Focus Areas

• Climate Change/CO2 Emission Reduction
• Waste Reduction
• Biodiversity Conservation
• Responsible Sourcing/Stable Product Supply
• Community Relations
• Corporate Governance
• Compliance and Risk Management
• Cultivating a culture of innovation/Ensuring diversity in core human resources
• Respecting human rights/Occupational health and safety
• Addressing unmet medical needs through the discovery of transformational medicines
• Stakeholder Engagement

Environmental Achievements

• Achieved carbon neutrality across business operations (Scope 1+2) in 2022
• Reduced electricity consumption per employee by approximately 12% year-on-year by optimization of power management

Social Achievements

• Conducted first diversity and inclusion training
• 100% of female employees and 75% of male employees took childcare leave; 100% return rate for both
• Conducted first sustainability procurement survey to major suppliers and collected 100% of survey responses

Governance Achievements

• Strengthened corporate governance to achieve higher standards than those required in Prime Market level
• Established Compliance Risk Management Committee to strengthen risk management
• Appointed outside Director as Chairperson of the Board

Climate Goals & Targets

Environmental Challenges

• Potential business interruption due to natural disasters (flooding) affecting facilities and infrastructure in Tonomachi, Kawasaki City.
• Cybersecurity threats

Mitigation Strategies

• Emergency power supply installed, R&D equipment on multiple floors, three days' worth of food and water stockpiled for employees.
• 24/7 security monitoring, server-less systems, strict endpoint management, and regular cybersecurity awareness training for employees.

Supply Chain Management

Supplier Audits: 100% response rate to sustainability procurement survey in 2022

Responsible Procurement

• Sustainability procurement survey based on GCNJ questionnaire; Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather, flooding (Tama River)

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Increased demand for new drug co-development due to climate change-related health issues

Reporting Standards

Frameworks Used: TCFD

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• A- (A minus) rating from CDP’s 2022 Climate Change Report