Kyorin's Sustainability

Top Message

The Kyorin Group is working to realize the corporate philosophy “Kyorin continues to fulfill its mission of cherishing life, and benefiting society by contributing to better health“.

Based on its corporate philosophy “to cherish life and benefit society by contributing to better health,” the Group have decided to formulate a new long-term vision “Vision 110” and aim to become “a company that contributes broadly to people's health by comprehensively developing healthcare-related businesses, with a core focus on the new drug business, which continuously provides high-value new drugs that meet medical needs”.

While there are various social issues to be solved, the sustainable growth of a company (economic value) and the realization of a sustainable society through business activities (social value) are becoming more and more important. The Group develops and provides useful and safe products and services by developing a combination of the ethical drug business and the healthcare business, which are our core businesses and we will contribute to sustainable economy growth and resolution of social issues. We will also work to strengthen corporate governance in order to carry out sustainable business activities.

The Kyorin Group hopes to be a company that continuously contributes to the sustainable development of society and is recognized by society while communicating with stakeholders.

Your Health is Kyorin’s Mission.

KYORIN Pharmaceutical Co., Ltd.

Representative Director, President and Chief Executive Officer

Yutaka Ogihara

Basic policy on sustainability

Following our corporate philosophy, “Kyorin continues to fulfill its mission of cherishing life and benefiting society by contributing to better health,” the Kyorin group is proactively addressing sustainability issues for society’s continuous development through business activities based on our Corporate Charter, as we work to enhance corporate value over the medium to long term..

Designation of materiality

We have created a two-axis matrix of the various issues related to sustainability, with social importance as one axis and importance to the Kyorin Group as the other axis, and used this matrix to assign priorities to important issues. To achieve the goals of the long-term vision “Vision 110,” we have designated 10 important issues (materialities) as priorities to address from the perspectives of “value creation (issues directly connected to business activities)” and a “base to support value creation (issues related to a base for business activities).”

Corporate philosophy

Long-term vision
Vision 110

Materialities
(Important issues)

Medium-term business plan
Vision 110 –Stage1–

Policies and plans for each fiscal year

Designation of important issues referencing social concerns

Image: Designation of important issues referencing social concerns

Value creation
materiality

Creating high-value products that meet medical needs
Maximizing value of products
Providing a stable supply of high-quality pharmaceutical products

Base to support value creation
materiality

Enhancing human capital
Promoting work-style reforms that respect diverse values
Promoting health management
Carrying out environmentally friendly business activities
Ensuring thorough compliance
Strengthening corporate governance
Strengthening relationships with stakeholders

Process for designation materiality

Materiality is designated by the following process, based on the Kyorin Group’s forward-looking environment outlook and analysis and referral to various principles and guidelines.

These issues are continuously reviewed in light of environmental changes, the Kyorin Group’s business activities and demand of society.

1. Identification of issues

Issue are identified based on various principles and guidelines (including ISO 26000, the UN’s Sustainable Development Goals, and the materiality map for the healthcare industry formulated by the Sustainability Accounting Standards Boards,
2. Narrowing drown issues

Identified issues are narrowed down in light of the Group’s corporate philosophy, long-term vision, etc.
3. Assignment of priority

Issues of particularly high priority are identified using a matrix with two axes-importance to society and importance to the Group.
4. Designation of materiality

Issue identified as important for materiality are deliberated by the Management Committee and resolved by the Board of Directors.

Materiality

Corporate philosophy

Value creation

Materiality	KPIs (by fiscal 2025)	Fiscal 2023 results
Creating high-value products that meet medical needs	Clinical development milestones Progression of pipeline phases Number of in-licensed products: At least 6	No progression of phases but steady progress 0
Maximizing value of products	Ratio of new drugs: At least 50% Sales of main products: ¥56 billion	47.4% 45.6 billion
Providing a stable supply of high-quality pharmaceutical products	Number of stockouts: 0 Number of product recalls: 0 On-track progress at Takaoka Plant (qualitative)	New drugs: 0; Generic drugs: 0 New drugs: 0; Generic drugs: 1 Commenced operations in April 2024, progressing as planned

Base to support value creation

Materiality	KPIs (by fiscal 2025)	Fiscal 2023 results
Enhancing human capital	Main scores for the item “job satisfaction” from the engagement survey: At least 4.5% Appropriate operation and improvement of human resources system (qualitative)	4.5 Revised human resources system and instilled content through video distribution and training
Promoting work-style reforms that respect diverse values	Percentage of female managers: At least 10% Percentage of male employees taking childcare leave: At least 50% Percentage of employees with disabilities: At least the legally required level	8.5% 38.6% 2.4%
Promoting health management	Percentage of employees who took health examinations and stress checks: 100%	Health examinations: 100% Stress checks: 97.5%
Carrying out environmentally friendly business activities	Reduction in volume of CO₂emissions: At least 20% compared with the level of fiscal 2015	25.5%
Ensuring thorough compliance	Number of significant compliance violations: 0	0
Strengthening corporate governance	Appropriate response to Corporate Governance Code (qualitative)	Reviewed corporate governance reports as appropriate in response to general requests from the Tokyo Stock Exchange (April, June, February)
Strengthening relationships with stakeholders	Stronger engagement with investors (qualitative)	Engaged in dialogue with investors with top management participating in meetings, briefings, online press conferences, etc.

The following is the detail for Initiative for Value creation materiality.

Our Business

The following is the detail for Initiative for Base to support value creation materiality.

SDGs (Sustainable Development Goals)

The SDGs are a series of international goals targeted for achievement by 2030 adopted at the 2015 United Nations Summit. The Kyorin Group has incorporated these goals into its business practices and eff orts to co-exist with society, and works to contribute to the realization of a sustainable society.

Image: SDGs (Sustainable Development Goals)

Sharing Value with Stakeholders

Innovative activities are needed to create social value and economic value. We consider dialogue (engagement) with all stakeholders an essential part of that process.

We are carrying out initiatives to address the requests and expectations of all stakeholders by clarifying the value we provide and utilizing opportunities for dialogue, with all Group employees working as one to create and share value.

Sharing value with stakeholders

Image: Value with Stakeholders

Dialogue with stakeholders

Initiatives for sharing value with stakeholders		Main venues and frequency of dialogue
	Patients and their families Researching, developing, and providing new drugs Promoting awareness of diseases	Inquiries to Drug Information Center Websites for public awareness of diseases (as needed) Courses for the general public (as needed)
	Medical professionals Pursuing two-way communication Building a structure to ensure compliance with relevant laws and regulations Diversifying suppliers, making logistics more efficient	Communication via in-person meetings and digital promotions (as needed) Solution proposal activities (as needed) Briefings, seminars (as needed) Communication with Medical Affairs Department and clinical research associates (as needed) Release of medical information for medical professionals on websites, at academic conferences, etc. (as needed) Collection and providing of information related to efficacy, safety, and quality
	Employees Operating appropriate human resources management system Addressing social welfare and work-style reforms	Internal portal website (as needed) Individual meetings (twice annually) Internal media (print publication twice annually; web-based distribution twice monthly) Internal whistleblowing system and structure Internal training (as needed), support for self-development (as needed) Environmental, health, and safety (EHS) activities (as needed) Engagement survey (annually)
	Suppliers(including pharmaceutical wholesalers) Building favorable relationships	Activities by division staff (as needed) Activities by MRs and distributor sales staff (as needed) Briefings, etc. (as needed) On-site investigations (as needed) Cooperation and sharing of information in supply chain management (as needed)
	Business partners(joint research partners, joint development partners, other partners) Building favorable relationships	Activities by division staff (as needed) Cooperation in drug research and development (as needed) Information exchanges in meetings, at academic conferences, and partnering events (as needed)
	Shareholders and investors Building relationships of trust Promoting understanding of corporate management	Press releases (fiscal 2023: 34) General shareholders’ meeting (annually) Full-year and half-year results briefings (one annual briefing each), quarterly results briefings (twice annually), press conferences (as needed) Management response (meetings, small meetings, as needed) IR staff response (meetings, 20 to 30 per year)
	Local communities Interacting with communities Promoting health-related public awareness	Environmental protection activities Classroom visits, health-related events (as needed) Cleanup activities (as needed) Summer evening parties and other events (as needed) Support for disaster recovery (as needed) Facility tours, internships (as needed)