Material Issues
SHIONOGI’s Materiality (Material Issues)
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
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● 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. |
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| Build a vaccine business | ● Provide COVID-19 vaccine ● Development of next-generation vaccines |
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| 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 |
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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 |
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| 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 |
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| 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 |
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| 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 |
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| 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 |
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| 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 |
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| Ensure compliance | Strengthening our compliance system in Japan |
● Establishing Supervisory Unit Compliance Committees ● Strengthening collaboration with domestic and overseas compliance promotion organizations |
| Strengthen governance
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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 |
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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 |
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| Organize into three elements based on implications: value creation, mitigation of negative impacts, and infrastructure |
Material Issue Identification STEP3: Priority Ranking of Identified Items |
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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 |
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Approval by the Board of Directors after discussion at the Executive Officers’ Meeting |
Risks and Opportunities
| 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 |
Risks ● 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
Opportunities ● 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 |
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
Opportunities ● 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 |