In Harmony with the Environment

Basic stance

The Kyorin Group’s Charter of Corporate Conduct details our understanding that “the tackling of environmental issues is a mission for all humankind and an imperative component of the very existence of corporations to which it remains voluntarily committed.” Business activities that take into account climate change and other environmental considerations are one example of our materiality.

Following our basic policy our stainability, the Group promotes reduced use of the environmentally harmful materials and the effective use of the world’s limited resources through energy and resource conservation, waste reduction, and enhanced chemical substance management in all our business activities. By setting and constantly reviewing objectives and targets for these initiatives, we are voluntarily and proactively committed to protecting the environment and preventing pollution.

Environmental management structure

The Group has established an Environmental Committee, chaired by the corporate officer in charge of General Affairs, to implement and promote environmental measures, including ones addressing climate change, as a structure to consider environmental measures at the Group level. Led by General Affairs, the committee, which comprises directors, corporate auditors, and corporate officers for management strategies and the plants and research centers doing business related to the environment in local communities, considers and reviews responses to environmental issues (vision, targets, road maps, etc.).

In coordination with environmental, health, and safety (EHS) activities, the committee identifies and evaluates risks and opportunities related to climate change and comprehensively compiles additional measures that it proposes to the Management Committee, with the resulting decisions reported to the Board of Directors.

Environmental management structure

Promoting environmental management

We are promoting the effective use of the world’s limited resources and have set targets to protect the environment under the important themes of preventing global warming, protecting resources, and living in harmony with the natural environment.

All Group plants have obtained ISO 14001 certification, an international standard for environmental management systems. We will maintain and continue these measures going forward. Regarding climate change, we will promote the reduction of CO2 emissions for preventing global warming.

We also evaluate and address climate change risks and earnings opportunities by referencing the framework of the Task Force on Climate-related Financial Disclosures (TCFD) and are promoting expanded disclosure related to the effects of climate change on our businesses.

Analysis of risks and earnings opportunities related to climate change

The effects on the Kyorin Group’s business and management from global warming and climate change themselves, as well as changes to the business environment from long-term policy related to climate change, are broken down as physical risks and earnings opportunities caused by climate change and transition risks to a decarbonized society, and undergo a scenario analysis.

The scenario analysis is carried out by referencing documents and materials including the Intergovernmental Panel on Climate Change’s (the IPCC’s) Fifth Assessment Report’s RCP 2.6 (2˚C scenario) and RCP 8.5 (4˚C scenario).

2℃ Scenario
Transition Risks
Segment Event Risks Response policy
Policies, laws and regulations Introduction of an environmental (carbon) tax
  • The introduction of an environmental (carbon) tax on greenhouse gas emissions related to research, manufacturing, and marketing could increase costs.
  • Further promote activities to reduce CO2emissions
  • Shift to electric power generated from renewable energy sources
  • Reduce number of vehicles for sales force and switch to hybrid vehicles and electric vehicles
  • Efficiently use the EHS management system
Installation of equipment and machinery
  • The replacement of existing equipment with new models that can operate with renewable energy as a result of newly enacted laws and regulations could increase costs.
  • Systematically upgrade equipment to energy-saving models and machinery
Market Changes in procurement/ operational costs
  • Increasing the percentage of electric power generated from renewable energy sources could raise the cost of electric power procurement.
  • Responses to transition risks by suppliers and logistics subcontractors could increase manufacturing and logistics costs.
  • Secure electric power generated from renewable energy sources
  • Install highly efficient machinery
  • Cooperate with suppliers, logistics subcontractors, and others to reduce logistics costs
Evaluation Assessment from investors
  • Delays in the Company’s introduction of climate change countermeasures could erode investor confidence and negatively affect the share price.
  • Insufficient disclosure of information could reduce share price.
  • Disclose timely and appropriate information including status of climate change countermeasures
  • Participate in external surveys
4℃ Scenario
Physical Risks
Segment Event Risks Response policy
Acute risk Direct damage from unusual weather (typhoons, heavy rains, etc.)
  • Localized heavy rains, large typhoons, etc., could cause flooding, halt operations, and necessitate repair expenses at research, manufacturing, and logistics centers.
  • In addition to Group facilities, supply chain disruptions (affecting materials procurement and shipment logistics) could occur.
  • Consider and implement equipment plans that envision water damage, etc.
  • Carry out drills that envision emergencies
  • Appropriately manage inventories
  • Secure multiple suppliers of materials
Chronic risk Changes in location of centers, procurement, and operations from changes in climate patterns, higher temperatures, rising sea levels, etc.
  • Several research and manufacturing centers are located near rivers, and sea levels are rising due to higher temperatures. Flood susceptibility countermeasures in response to changes in climate patterns and reviews of locations could increase costs.
  • Responses to physical risks by suppliers and logistics subcontractors could lead to higher market prices and increase manufacturing and logistics costs.
  • Air-conditioning temperature management in manufacturing, warehousing, and logistics in response to higher temperatures could increase costs.
  • Consider and implement equipment plans that envision water damage, etc.
  • Appropriately manage inventories
  • Consider optimizing locations from a business continuity planning (BCP) perspective
  • Secure multiple suppliers of materials
  • Improve energy efficiency
Earning Opportunities
Segment Event Earnings opportunity Response policy
Market Changes in disease trends
  • Increases in infectious disease from rising temperatures could increase the Company’s business opportunities.
  • Demand and scope of appropriate use of our products for the prevention, diagnosis, and treatment of infectious disease could increase and expand.
  • Shift to business based on the proposal of solutions
  • Establish presence in franchise customer fields
  • Proactively invest in pipeline expansion

Moving toward carbon neutrality

Vision: The tackling of environmental issues is a mission for all humankind. We are voluntarily pursuing the challenge of “carbon neutrality by 2050” as an imperative component for the very existence of corporations.

2030 target: Reduce CO2emissions 46% in fiscal 2030 vs. fiscal 2015

Kyorin Group material flow (Fiscal 2022)

Kyorin Group material flow (Fiscal 2022)

CO2emissions (Scope 1, 2, and 3)

The Kyorin Group strives to expand the scope of coverage to calculate CO2emissions throughout its supply chains.

Scope 3Other indirect emissions
  • Purchased products and services
    6,731t
  • Capital goods
    4,082t
  • Fuel- and energy-related activities not included in Scope 1 or 2
    2,170t
  • Business travel
    457t
  • Employee commuting
    943t
Scope1Direct emissions from the use of
fuel in-house and industrial processes
  • Direct emissions
    12,893t
Scope2Indirect emissions associated
with use of purchased electricity and heat
  • Indirect emissions from energy sources
    13,834t
Scope 3Other indirect emissions
  • Waste materials from businesses
    286t
  • Disposal of products sold
    464t
Scope 3Other indirect emissions
  • Transport, delivery
    904t

Specific Initiatives

Introducing low-emission cars to reduce CO2emissions

Photo: Hybrid Cars

The Kyorin Group is reducing the number of vehicles used by its sales force and proactively introducing low-emission cars, hybrid cars, and other environmentally friendly vehicles to prevent global warming. As of March 2023, all 861 vehicles used by the sales force met the standard for having low emission, and of these, 389 are hybrid vehicles, which were introduced in 2004.

In addition, these vehicles adhere to the Ministry of the Environment’s “Eco-Driving” guidelines regarding their impact on the environment and traffic safety.

Environmentally friendly head office and R&D center

The head office (Ochanomizu sola city) has reduced its CO2emissions with the change in September 2021 to renewable energy sources for all its electric power consumption.

In May 2017, the ReHP* technology installed at the WATARASE Research Center was awarded an honorable mention in the Kanto chapter of the Japanese Association of Building Mechanical and Electrical Engineers’ carbon neutral category for construction equipment that　contributes to achieving a low-carbon society.

In addition, the Kanto Bureau of Economy, Trade and Industry conducted a document-based, on-site study of the center’s energy conservation activities related to this system as well as its energy-saving promotion system, human resources development and education, and initiatives, and awarded it the Kanto Bureau of Economy, Trade and Industry Director’s Award in the 2020 Awards for Excellence in Energy Management. During fiscal 2022, this system reduced electric power consumption 69,158 kWh and CO2emissions roughly 32 tons compared with conventional heat pumps for air conditioning and heating, for approximately 33% in energy savings.

Photo: KYORIN Pharmaceutical Co., Ltd.’s WATARASE Research Center

* A Renewable Energy Heat Pump (ReHP) is a highly efficient heat pump that uses renewable energy, and the ReHP installed at two adjacent buildings (CS and LAB1) at the WATARASE Research Center uses geothermal heat and unused waste heat from a water chiller as a heat source, and circulates heated water in a single loop, which is used by air-conditioning and water-heating equipment, to increase energy efficiency.

Reducing the environmental burden through solar power generation

In a move to lessen its environmental burden through the use of Company-owned land, in fiscal 2013, the Company installed a facility for generating solar power, one form of renewable energy, in the town of Nogi in Tochigi Prefecture, and installed the second facility in fiscal 2017.

Biodiversity

KYORIN Pharmaceutical Group Facilities Co., Ltd.’s Noshiro Plant participates in a citizen’s volunteer activity to protect the Kaze-no-Matsubara pine forest near the plant, to provide local residents with a place to relax. In addition, KYORIN Pharmaceutical’s WATARASE Research Center has installed birdhouses in trees adjacent to the WATARASE YUSUICHI wetland and confirmed the location of nests as a way to enhance the environment for wild animals in the Center’s grounds.

Data about environment

Environmental Accounting

(Unit: Million yen)

Environmental costs Investment Costs
Prevention of pollution cost 15 102
Global environmental conservation cost 37 68
Resource recycling cost 0 37
Upstream/downstream costs 0 14
Administration costs 0 23
R&D cost 0 0
Public relations costs 0 2
Environmental damage restoration costs 0 0
Total 52 246

(Unit: Million yen)

Economic benefits
Profit from recycling, such as waste 1 or less
Reduction in energy 26
Reduction in disposal expenses 0
Total 26

(Unit: Million yen)

Environmental benefits Item / unit YoY change FY2020 FY2021
Effects of the resources used for business activities Electricity
Thousand kWh		 -1,270 34,005 32,735
Heavy oil kL 75 1,408 1,483
Kerosene kL -17 2,431 2,414
Paper usage t -3 44 41
Effects against environmental impacts and waste resulting from business activities Waste amount t 6 676 682
Co2 emissions t CO2 -1,257 28,851 27,594
Biochemical oxygen demand t BOD 0.0 1 or less 1 or less
Effects of Resource recycling Waste amount recycled t -1 396 395
Waste amount recycled kt -57 177 120

Kyorin Group environmental targets and progress (fiscal 2021)

Target initiatives Method for achieving FY2020 FY2021 Self-assessment
1. Preventing global warming
(CO2reduction and energy conservation)		 Reduce fuel consumption (crude oil equivalent) through new capital investment 13,714kℓ 12,763kℓ
（93.1%）		 3 stars
Use eco-cars to improve fuel efficiency and reduce exhaust emissions 497/916 434/889
（48.8%）		 1 stars
Reduce total CO2emissions 27,041t 25,256t
（93.4%）		 3 stars
2. Reducing waste volume Reduce total waste 676t 682t
（100.9%）		 2 stars
Promote recycling 58.6% 57.9% 2 stars
Amount landfilled 58t 54t
（93.1%）		 3 stars
Zero-landfill challenge 8.6% 7.9% 3 stars
3. Managing chemical substances Manage substances covered by the Pollutant Release and Transfer Register (PRTR) Law and revise management method 13.3t 26.6t
（200.0%）		 1 stars
4. Preventing atmospheric pollution Measure and control amounts of soot and smoke, nitrogen oxide (NOx) and sulfur oxide (SOx) emitted by boilers and generators At or below standards At or below standards 3 stars
5. Preventing water pollution Process wastewater, including by primary processing plants, and management of pH, biochemical oxygen demand (BOD), and suspended solids (SS) levels At or below standards At or below standards 3 stars
6. Preventing deforestation Recycle paper, use recycled paper, and promote a paperless office environment 44t 41t
（93.2%）		 3 stars
7. Protecting destruction of ozone layer Eliminate all devices that use Chlorofluorocarbon (CFC) and Hydrofluorocarbon (HFC) Elimination completed in fiscal 2010 - 3 stars
8. Preventing ground subsidence Reduce groundwater usage and increase drinking water reuse 53.9% 68.4% 3 stars
9. Noise reduction Periodic measurement At or below standards At or below standards 3 stars
10. Protecting biodiversity Communicate with local communities (activities to contribute to local communities) Achieved targets at all business facilities Due to the COVID-19 pandemic, some activities have been cancelled 1 stars

※Self-assessment: 3 stars =achieved 2 stars =largely achieved 1 stars =more effort required

CO2Emissions from Head office, Branches, Research Centers, and Plants
Displays a graph of Emissions from Head office, Branches, Research Centers, and Plants.
Waste volume in relation to sales
Displays a graph of Waste volume in relation to sales
Volume of Water Used
Displays a graph of Volume of Water Used