Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Safety
• Social Responsibility

Environmental Achievements

• Reduced total energy consumption by 5% (equivalent to 17,000 kiloliters of crude oil or ¥450 million)
• Reduced final disposal at landfills by 28% to 1,408 tons
• Achieved zero emission status at Hofu and Fuji Plants
• Reduced emissions of 12 adverse air pollutants by 49% year-on-year
• Reduced nitrogen emissions by 30% and phosphorus emissions by 31% from the previous year

Social Achievements

• Launched CSMAX21 campaign to maximize customer satisfaction
• Established Medical Information Center for rapid complaint response and advice
• Commenced three-year clinical trial of Coniel® antihypertensive drug involving 1,000 subjects per regimen
• Established Ethical Standards for Animal Testing
• Improved product packaging for better identification and reduced environmental impact

Governance Achievements

• Formed an advisory committee with four outside advisors to increase management transparency
• Developed and distributed guidelines based on ethical principles, including antitrust law
• Established double hotlines for internal and external compliance reporting

Climate Goals & Targets

Environmental Challenges

• Increased energy consumption due to production growth
• Increased SOx emissions (4% year-on-year increase)
• Complaints regarding noise and odor from plants
• Need to reduce waste materials further to achieve zero emissions by 2007

Mitigation Strategies

• Fuel conversion plan to reduce SOx and NOx emissions
• Prompt action taken to address complaints and prevent recurrences
• Implementation of Kyowa Eco-Project (KEP), Green Office Plan (GOP), and Green Procurement (GP)
• Detailed efforts to recycle even small amounts of waste

Supply Chain Management

Supplier Audits: Audits were carried out at 95% of affiliates in fiscal 2002

Responsible Procurement

• Requirement that suppliers establish ISO management systems
• Prohibitions or restrictions on the use of certain substances
• Requirement that suppliers use environment-supportive raw materials

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001

Sustainable Products & Innovation

• Cold-Sensitive yeast
• Antifungal yeast
• CSPHP (cholesterol-lowering peptide)
• Low environmental-impact solvents
• Lubricant intermediaries as CFC alternatives
• Kyowasol (substitute for CFCs and chlorine solvents)
• Landfill liners
• Cross-linkable monomer for waterborne coatings

Awards & Recognition

• Excellent Supplier award from a customer (Kyowa Hakko U.S.A.)
• Commitment to Excellence Award (BioKyowa)
• Runner-up in Society of Naval Architects of Japan’s “Ship of the Year” competition (Sensho)

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced CO2 emissions by 0.9% compared with the previous fiscal year; unit energy consumption decreased by 2.6%
• Maintained zero emissions (final landfill disposal volume at 0.1% or less of total waste)
• Completed replacement of five freezers using chlorofluorocarbon R11

Social Achievements

• Nil lost work time accidents at Kyowa Hakko Kirin, Kyowa Hakko Bio, Kyowa Hakko Chemical, and Kyowa Medex
• Launched human rights training program for all Kyowa Hakko Kirin employees
• Promoting childcare support

Governance Achievements

• Established a Group Risk Management System
• Formulated Kyowa Hakko Kirin Group Compliance Guidelines
• Introduced an executive officer system and established an Advisory Board

Climate Goals & Targets

Environmental Challenges

• Intensified competition in and outside Japan for Pharmaceuticals business
• Price erosion in Bio-chemicals business due to competition from emerging manufacturers and appreciating yen
• Decreased demand and sluggish market in Chemicals business due to global recession

Mitigation Strategies

• Actively investing management resources in core businesses (Pharmaceuticals and Bio-chemicals)
• Utilizing external resources to strengthen business and increase R&D efficiency
• Working to ensure stable earnings and enhance competitive edge in Chemicals business through alliances

Supply Chain Management

Responsible Procurement

• Green procurement policy; communication with business partners on environmental protection

Climate-Related Risks & Opportunities

Awards & Recognition

• Appropriate Packaging Award (Japan Packaging Contest 2009)
• Disclosure Award (Tokyo Stock Exchange)
• Japan Greenery Research and Development Center Chairman’s Prize
• Yamaguchi Prefectural Governor’s Awards for Contributions to Environmental and Quality of Life Improvement
• Shizuoka Labour Bureau Director-General’s Incentive Award

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance
• Human Rights
• Community Involvement
• Fair Operating Practices

Environmental Achievements

• Reduced greenhouse gas emissions (CO2) by 9.7% from 2005 levels in 2011.
• Achieved more than 90% recovery rate for acetone and methanol VOC emissions at Yamaguchi Production Center (Ube).
• Reduced total VOC emissions by about 35% compared with fiscal 2008 at Yamaguchi Production Center (Ube).

Social Achievements

• Launched Diversity & Inclusion (D&I) Project to create a workplace where all employees can reach their full potential.
• Increased the number of employees using childcare leave system and reduced work hours childcare system.
• Organized “Kyowa Hakko Kirin Table Tennis Lessons” as part of the Kirin Kizuna Project for children in disaster-affected areas.
• Provided employment for 73 workers with disabilities (1.6% of total workforce).

Governance Achievements

• Established “Guidelines for Transparency in the Relationships between Corporate Activities and Medical Institutions”.
• Developed and implemented a Group Risk Management System to identify and prevent business risks.
• Improved Business Continuity Plan (BCP) based on lessons learned from the Great East Japan Earthquake.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the Great East Japan Earthquake.
• Need to reduce pharmaceutical costs.
• Inappropriate management of transgenic mice.
• Need to improve communication with patients and other stakeholders.
• Need to increase the employment rate of people with disabilities.
• Need to improve the BCP to address simultaneous accidents.

Mitigation Strategies

• Reviewed systems and manuals throughout the supply chain to ensure appropriate risk management.
• Developed biosimilars to reduce drug costs.
• Took measures to prevent recurrence of the transgenic mice incident.
• Increased communication efforts through websites, DVDs, and other channels.
• Increased efforts to recruit and employ people with disabilities.
• Reviewed inventory levels, developed backup plans, and considered measures to address unexpected power outages.

Supply Chain Management

Responsible Procurement

• Questionnaire surveys for environmental activities of suppliers (shifting focus to CSR in 2012).

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ISO 26000

Certifications: ISO 14001

Sustainable Products & Innovation

• Biosimilars

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced CO2 emissions by 3.2% compared with fiscal 2007 (to 246,600 tons)
• Maintained zero landfill waste
• Promoted reuse and recycling (recover phosphate from fermentation wastewater)
• Promoted shift to hybrid vehicles in sales fleet
• Installation of photovoltaic power generation systems at several plants

Social Achievements

• Launched the Diversity & Inclusion Project
• Launched a project to promote employment of people with disabilities
• Established the Kyowa Hakko Kirin Group Declaration on Employment of People with Disabilities
• Conducted human rights training throughout the Company (248 sessions; 96.3% of employees)
• Supported DOPPS (an international study) to advance dialysis therapy
• Provided measures for preventing chronic kidney disease, pollinosis and other illnesses on our website
• Promoted Kirin Kizuna (bonding) Relief-Support Project for post-disaster reconstruction

Governance Achievements

• Established the CSR Committee
• Established the Group Quality Assurance Committee
• Established the Information Disclosure Committee
• Established the Financial Management Committee
• Formulated the Kyowa Hakko Kirin Group Compliance Guidelines
• Implemented ICH Q10 pharmaceutical quality system

Climate Goals & Targets

Environmental Challenges

• More rigorous approval processes for pharmaceuticals
• Promotion of measures to restrain health care costs
• Growing share of generic pharmaceuticals
• NHI drug price revisions
• Impact of the strong yen on overseas activities
• Fluctuations in exchange rates significantly impacting earnings in the Bio-Chemicals business
• Low drug discovery success rate

Mitigation Strategies

• Strengthened cooperation with ProStrakan Group plc
• Participating in the Biosimilars business by establishing a joint venture with FUJIFILM Corporation
• Worked to expand sales of and revise prices for high-value-added products
• Took steps to strengthen mail-order sales
• Reorganized and revamped production bases in Japan and overseas to further enhance cost competitiveness
• Introduced translational research using clinical specimens at early stages of research to raise the new drug discovery success rate
• Promoting open innovation to take advantage of knowledge and technology synergies

Supply Chain Management

Supplier Audits: 271 companies responded to CSR questionnaire (91% response rate)

Responsible Procurement

• Kyowa Hakko Kirin Group Procurement Policy

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ISO 26000

Certifications: ISO 14001

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Established CO2 emission reduction target for 2030 in line with the SBT initiative and implemented a relevant initiative
• Established water consumption reduction target for 2030 and implemented a relevant initiative
• Completed the reorganization of production facilities and built a global supply structure

Social Achievements

• Formulated the Talent Management Policy
• Accident frequency rate: 0.19%
• Ratio of female managers: 7.8%
• Ratio of workers with disabilities: 2.33% (as of June 2017)
• Continued to provide education on bribery prevention
• Established the Kyowa Hakko Kirin Group Transparency Policy for the Relationships between Corporate Activities, Healthcare Professionals, Healthcare Organizations and Patient Organizations
• Joined IkuBoss-alliance

Governance Achievements

• Organized training on the Kyowa Hakko Kirin Group Core Values and Code of Conduct
• Organized training on compliance
• Operated the risk management system
• Built the global internal reporting system
• Established the Kyowa Hakko Kirin Group Transparency Policy for the Relationships between Corporate Activities, Healthcare Professionals, Healthcare Organizations and Patient Organizations

Climate Goals & Targets

Environmental Challenges

• Pressure to suppress medical costs in Japan and overseas
• Market penetration of generics
• Risks associated with R&D investment
• Risks related to intellectual property assets
• Risk of side effects
• Risks related to pharmaceutical regulations
• Legal regulation risk
• Risk of fluctuations to foreign exchange rate
• Disaster-related and accident-related risks
• Litigation-related risk
• IT security and information management risk
• Environmental risks
• Risks related to alliance with other companies

Mitigation Strategies

• Implemented risk management system
• Strengthened global PV & QA system
• Implemented measures for traffic safety of business vehicles
• Improved environmental and safety activities and performance of all production sites by audit
• Formulated a Business Continuity Plan (BCP)
• Established the “Kyowa Hakko Kirin Group Transparency Policy for the Relationships between Corporate Activities, Healthcare Professionals, Healthcare Organizations and Patient Organizations”
• Established the “Guideline for Anti-Bribery Measures” and regulation for anti-bribery

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: International Integrated Reporting Council’s (IIRC’s) International Integrated Reporting Framework

Certifications: ISO14001

Awards & Recognition

• White 500 program
• Sports Yell Company

Environmental Metrics

ESG Focus Areas

• Growth opportunities (CSV management)
• Creating a unified team brimming with diversity
• Strengthening governance
• Protecting an abundant global environment

Environmental Achievements

• Switched 75% of Takasaki Plant power to Aqua Premium (renewable hydroelectric power), achieving ~20% reduction in total CO2 emissions across all Kyowa Kirin Group production and research sites in 2020.

Social Achievements

• Launched a global observational research project for XLH, collaborating with Asia, Europe, and the Americas.
• Formulated a hybrid-working model in July 2021.
• Target to raise the ratio of female managers in Japan to 18% by 2025 (from 12%).

Governance Achievements

• Half of the Directors are Independent Outside Directors.
• Annual evaluation of Board of Directors effectiveness.
• Shifted to One Kyowa Kirin structure (matrix management) in 2019.

Climate Goals & Targets

Environmental Challenges

• Relatively low level of engagement by Japanese employees compared to overseas employees.
• Need to further advance innovation, particularly in antibody technology.
• Addressing the parent-subsidiary listing in relation to the revised Corporate Governance Code.
• Strengthening governance across four operating regions.
• Climate change mitigation and water resources management.
• Flood risk at Takasaki and Ube plants.
• Slow creation of basic technologies.
• Hesitancy among Japanese employees regarding the global company shift.

Mitigation Strategies

• Increased focus on talent management and global culture cultivation.
• Closer engagement with patients to improve product development and patient centricity.
• Continued observational research.
• Implementing the revised Corporate Governance Code.
• Strengthening global governance.
• Investing in CO2 reduction and renewable energy expansion.
• Developing hardware and soft measures to mitigate flood risk (e.g., alternative sourcing, second site consideration).
• Organizational changes in R&D division (April 2021), mindset transformation initiatives.
• Reassessing the overall evaluation system to motivate employees to tackle new challenges.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Flooding at Takasaki and Ube plants

Transition Risks

• Carbon pricing

Reporting Standards

Frameworks Used: TCFD

Environmental Metrics

ESG Focus Areas

• Climate Change
• Water Resource Management
• Human Rights
• Corporate Governance
• Supply Chain Management

Environmental Achievements

• Reduced CO2 emissions by 55% compared to 2019 using renewable energy
• 100% of electricity consumed at Takasaki Plant, Fuji Site, and Ube Plant switched to renewable energy
• Completed construction of Ube Plant office building with ZEB certification
• Construction of Q-TOWER at Takasaki Plant adopted PCaPC construction method

Social Achievements

• Reached 30% ratio of women in key positions under OKK structure
• Rated “Gold” in the PRIDE Index 2023 (JP)
• Selected as a 2023 “Health & Productivity Stock” for consecutive two years (JP)
• Launched initiatives to address patient needs related to XLH/TIO with Ubie
• Conducted disease awareness campaign with centering World Lymphoma Day and initiatives with patient organizations.

Governance Achievements

• Expanded CxO team, with all related business functions now reporting to a single CxO
• Completed rollout of global quality management system (eQMS)
• Established One Kyowa Kirin, a matrix management system
• Formulated Kyowa Kirin Group Human Rights Policy
• Established a human rights whistleblowing system

Climate Goals & Targets

Environmental Challenges

• Global trend toward stricter healthcare policies and regulations to reduce medical costs
• Growing needs for the practical application of new modalities that can cure or control disease progression
• Depletion of monoclonal antibody and small molecule drug targets
• Shift in the pharmaceutical industry to strategies targeting narrow treatment areas
• Reductions to drug prices and tighter criteria for treatment reimbursements

Mitigation Strategies

• Established global our own sales and marketing system for orphan drugs
• Acquired Orchard Therapeutics plc to gain a therapeutic platform in hematopoietic stem cell gene therapy
• Established a new business model to maximize the value of development drugs through co-development with partners
• Formulated Story for Vision 2030 to clarify objectives
• Expanded CxO team to accelerate decision-making and strengthen business execution

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct
• Sustainable procurement questionnaire

Climate-Related Risks & Opportunities

Physical Risks

• Extreme temperature rises
• Increased torrential rains, typhoons, and floods

Transition Risks

• Carbon pricing
• Tighter CO2 emission regulations

Opportunities

• Increase in hay fever sufferers

Reporting Standards

Frameworks Used: International Integrated Reporting Framework, Guidance for Collaborative Value Creation 2.0

Certifications: ISO 14001

Awards & Recognition

• Drug Research and Development Award from Pharmaceutical Society of Japan
• Health & Productivity Management Outstanding Organization (White 500)