SHIONOGI’s Materiality (Material Issues)

Through its business activities and in response to healthcare needs and social issues, SHIONOGI is growing as a company that society needs and is seeking outcomes that will be shared by our stakeholders. We are therefore identifying material issues (materiality) that we will prioritize in the light of our current situation and needs, as well as our business risks and opportunities.
In revising its medium-term business plan STS2030 to STS2030 Revision, SHIONOGI analyzed and assessed its risks and opportunities based on changes in the internal and external environment and its time frame, and reviewed the material issues (materialities) that must be addressed. By classifying materialities into the three categories of “Material issues to create value by solving healthcare social issues,” “Material issues to reduce negative impacts on customers and society,” and “Material issues to support the realization of a sustainable society and the growth of SHIONOGI,” we believe we can clarify our thinking and find more effective specific actions when considering our response policies, leading to more propulsive initiatives.
We constantly recognize the importance of growing in coexistence with society as we continue to provide value through our contributions to people’s health in the future, and we are addressing these material issues throughout our Group. 

❶ Material issues to create value by solving healthcare social issues

Material issues Major initiatives Main relevant indicators and evaluation axes
Protect people from the threat of infectious diseases

Provide products and services for acute infectious diseases




● Number of acute infectious disease-related pipelines

● Number of serious infectious disease-related pipelines

● Number of countries adopting pull-type incentives for severe infectious diseases

Providing products and services for infectious diseases requiring a long period of treatment

● Number of HIV-related product pipelines

● Contribution to improvement of QOL with cabotegravir

● Development of anti-malarial drugs, etc.

Build a vaccine business

● Provide COVID-19 vaccine

● Development of next-generation vaccines

Contributing to a healthy and prosperous life Discover products and services for disease areas with high unmet medical needs

● Number of psychoneurological diseases-related pipelines

● Number of pain-related pipelines

● Number of oncology-related pipelines

● Numbers of products and services for other quality of life diseases with high social impact

Raise awareness of the characteristics of the disease and the problems faced by those affected by the disease to promote social understanding

● Number of educational activities conducted using webinars

● Number of support services provided in the area of developmental disorders

Contribute to sustainable social security

Improve access to healthcare

Providing solutions different from pharmaceuticals ● Numbers of solutions and partners
Promote self-medication ● Number and sales results of OTC drugs
Create an environment of improved access

● Number of countries provided with ensitrelvir

● Number of countries that can be provided with cefiderocol through partnerships with GARDP and CHAI

● Listing on WHO Model Lists of Essential Medicines

● Number of countries where ViiV provides dolutegravir and cabotegravir

Strengthen health care systems

● Improve the health of pregnant and lactating women and children under 5 years of age

● Operation of independent health services

❷ Material issues to reduce negative impacts on customers and society

Material issues Major initiatives Main relevant indicators and evaluation axes
Supply socially responsible products and services

Stably supply of products and services

● Management of procurement, production, and distribution to prevent shortages by grasping changes in the supply-demand balance

● Conduct regular/non-regular discussions with suppliers to ensure stable procurement

● Support for strengthening relationship with contract manufacturers and maintaining their business continuity plans (BCP)

Strengthening legal compliance and monitoring

● Ensure strict observance of laws, regulations, and guidelines related to the manufacture and sale of pharmaceutical products

Respect human rights

Address human rights issues

● Statement based on the Modern Slavery Act

● Implementation of human rights impact assessments

Protect the environment Climate change: Reduce greenhouse gas (GHG) emissions

● Disclosure under the TCFD

● FY2030: Reduce Scope 1+2 by 46.2% and Scope 3 Category 1 by 20% (relative to FY2019); FY2050: Achieve zero emissions

AMR: Reduce the impact of antimicrobials manufacturing on the environment ● Have proper control, including of the supply chain, by FY2030 (completion of audit follow-up)

❸ Material issues to support the realization of a sustainable society and the growth of SHIONOGI

Material issues Major initiatives Main relevant indicators and evaluation axes
Secure human resources to support growth Securing a competitive and diverse workforce

● Clarification of skill requirements

● Competitive compensation system

● Number of employees reassigned through the internal open recruitment system

● Number of mid-career hires

Nurture human resources who possess exceptional strengths

● Strengthen monitoring of human development

● Education and training costs

● Percentage of employees using assistance programs for self-investment

● Number of people applying for side work

Foster an environment and culture in which everyone can work comfortably

● Continuous implementation of work style reforms and revitalization of employee communication

● The degree of penetration of management philosophy

● Percentage of female managers

● Percentage of employees taking childcare leave

Promotion of health management (health management and occupational health and safety)

● Health checkup reception rate

● Stress checks, percentage of highly stressed persons

● Percentage of employees who smoke

● Severity rate

● Frequency rate

Strengthen supply chain management Identification of key suppliers and supplier sustainability assessment

● Assessment by FY2022 Questionnaire or EcoVadis

● Number of EcoVadis rated companies

● Percentage of suppliers meeting established criteria

Interviews and briefings on sustainability issues

● Percentage of suppliers that agree with the procurement code of conduct

● Number of companies promoting positions through interviews or briefings

Ensure compliance

Strengthening our compliance system in Japan

● Establishing Supervisory Unit Compliance Committees

● Strengthening collaboration with domestic and overseas compliance promotion organizations

Strengthen governance


High-performing corporate governance framework

● Efficacy assessment by third-party assessment organization

● Skill matrix reviews

Strengthen risk management ● Classifying company-wide risks into strategic risks and execution risks

SDGs we contribute to particularly


Materiality assessment process

Identification of Issues

STEP1: Assessing Opportunities and Threats

Organize based on perceptions of internal and external environmental changes

- Evaluation on three axes: social, business, and internal

- Consideration of ISO 26000 and ESG disclosure standards

Identification of Issues

STEP2: Category

Organize into three elements based on implications: value creation, mitigation of negative impacts, and infrastructure

Material Issue Identification

STEP3: Priority Ranking of Identified Items

Evaluation of each of the three elements on two axes: impact and likelihood of occurrence

- Impact: Consider expectation values derived from stakeholder engagement

- Occurrence and feasibility: Consider time frames

Material Issue Identification

STEP4: Board of Directors approval

 Approval by the Board of Directors after discussion at the Executive Officers’ Meeting

Risks and Opportunities

In identifying material issues, SHIONOGI analyzed and assessed its risks and opportunities based on changes in the internal and external environment. We will continue to assess the impacts SHIONOGI and society have on each other, and reflect such assessment in our initiatives to promote activities aimed at resolving issues.
Environmental Changes/Social Needs  
Perception of the environment surrounding society and the healthcare industry Risks and Opportunities

■ The global epidemic of COVID-19 and subsequent lifestyle changes

■ Further expansion of the scope of corporate social responsibility

■ Aging of developed countries’ populations and rise of emerging countries

■ Accelerating investment in the children of the future

■ Structural changes in the healthcare industry

■ Restricted access to medical care

■ International instability

■ Technical innovation and evolution, including digitalization, and greater use of data

■ Growth of the global market for prescription drugs, and contraction of the Japanese market

■ Global warming


● Contraction in market for infectious disease drugs as awareness of hygiene increases

● Human rights violations, risks affecting stable supply, business delays, continuity, and deterioration of creditworthiness by the Company and its suppliers due to the following events

  -  Deterioration in relations with local communities

  -  Human rights, environmental, and compliance/governance issues

● Greater information security risks



● Globalization of infectious diseases due to climate change

● Increased expectations and demand for global infectious disease countermeasures

● Increasing demand for wellbeing and social participation in all generations

● Rising needs for prevention, presymptomatic conditions, self-medication needs, and related market expansion

● Promoting access to medical care

● Creating solutions through technological innovation

● Achieving stable supply, customer satisfaction, and reliability in the company and its suppliers in the following events:

  -  Continuous improvement of stable supply and quality assurance

  -  Care for human rights and the environment

Perception of the internal environment Risks and Opportunities

■ Transformation to realize the SHIONOGI Group Vision

■ Promotion of workstyle reforms

■ Numbers of pipelines, imbalance in R&D progress

■ High reliance on royalty business

■ Lower patent cliff risks


● Collapse of existing business models through disruptive innovation

● Lack of human resources to realize transformation

● Loss of business opportunities as nothing is done in emerging countries

● Higher hurdles to drug discovery and lower research efficiency

● Decrease in productivity/outflow of human resources



● Construction of a business that does not rely on patents

● Enhance employee awareness of transformation, to create innovation and enhance their ability to respond to change

● Secure human resources by expanding the environment in which diverse human resources can play active roles