Environmental Materiality (Material Issues)

The SHIONOGI Group (“SHIONOGI”) analyzes and assesses risks and opportunities, including conducting a detailed analysis and evaluation of their time frames, based on changes in internal and external environments, and consistently continues to identify “Protect the environment” as one of its key material issues (materiality) that must be addressed.

Material issues

Furthermore, SHIONOGI lists the environmental issues to be addressed by exploring changes in the relevant external business environment and through in-depth dialogue with external stakeholders, including ESG investment institutions, external experts, and internal related departments. These issues are evaluated based on the Environmental Reporting Guidelines published by the Ministry of the Environment, Japan, in terms of their impact on the sustainability of global ecosystems and on stakeholders. As a result, SHIONOGI identifies “Environmental Materiality” as a priority environmental issue to address. For each identified environmental materiality, SHIONOGI formulates specific medium- and long-term targets as the SHIONOGI Group EHS Action Targets, along with annual EHS Action Plans, ensuring practical and effective responses by continuously implementing, reviewing, and reflecting the results in the following year’s targets.

The SHIONOGI Group EHS Action Targets are decided after discussion by the SHIONOGI Group Companywide EHS Committee and subsequent deliberation by the Corporate Executive Meeting and the Board of Directors. The Senior Executive Officer and Senior Vice President of the Sustainability Management Division, who serves as the Corporate Officer in charge of EHS, determine the EHS Action Plan after discussion by the SHIONOGI Group Companywide EHS Committee.

It is a diagram showing the process of identifying environmental materiality. Environmental materials include AMR, climate change, resource conservation / resource recycling, and water.

Identification Process of “Environmental Materiality”

Material issues	Summary of identification
AMR	AMR is a global issue that a pharmaceutical company manufacturing antimicrobials cannot ignore. The emergence of AMR impacts global ecosystems enormously.
Climate change	Responding to climate change is essential for the sustainability of global ecosystems. Meanwhile, stakeholders’ demand for action in this regard is growing increasingly strong.
Resources conservation and circulation	Reducing waste and circulating resources mean effectively utilizing limited resources and are essential for the sustainability of global ecosystems. This is a part of the problem of marine plastic, and stakeholders’ interest in this international issue has been growing in recent years.
Water	With the growing probability of occurrence of torrential rainfalls and floods, water risks (particularly physical risks) must be closely watched from the perspective of BCP. Water is an indispensable factor for the business continuity of pharmaceutical companies and essential for the sustainability of global ecosystems.
Environmental management and governance	As SHIONOGI’s business activities expand, its operating sites are increasing globally. In this situation, SHIONOGI needs to respond appropriately to global environmental issues such as climate change, environmental pollution, and the depletion of natural capital, and demonstrate the results of its efforts to stakeholders.

Environmental materiality involves considering the necessary countermeasures for identified issues considering SHIONOGI’s activities across each value chain and reflecting these in the SHIONOGI Group EHS Action Targets.

To continue providing value to society and meeting the expectations of stakeholders, SHIONOGI intends to further deepen its efforts by specifying concrete activities and KPIs related to environmental materiality.

Environmental Materiality and the value chain

	Purchase	R&D	Manufacturing	Distribution and sales	Use and disposal
AMR	Antimicrobial release management		Antimicrobial release management		Promotion of responsible antimicrobial use
Climate change	Introduction of energy-saving equipment Introduction of renewable energy	Introduction of energy-saving equipment Introduction of renewable energy	Introduction of energy-saving equipment Introduction of renewable energy	Introduction of hybrid vehicles Improvement of transportation efficiency	Change in or recycling of containers and packaging materials
Resource conservation and circulation	Green purchasing	Design of environmentally responsible products	3Rs of waste materials		Reuse and recycling of containers and packaging materials Responsible disposal
Water	Water risk assessment	Water risk assessment, water conservation, wastewater management	Water risk assessment, water conservation, wastewater management
Environmental management and governance	Establishment and strengthening of an environmental management and governance structure at each business site and organization of SHIONOGI

Environmental Materiality and the SHIONOGI Group EHS Action Targets (Environment)

See the sections“Action Targets” and “Results” for more information on the targets and activities.