Materiality

Process for Determining Materiality (Material Issues)

Materiality is initiatives that Otsuka is focused on. To determine the Otsuka group’s material issues, we first compiled a list of social issues, referencing a range of international guidelines and frameworks, including ISO 26000, GRI, and the U.N. SDGs. We narrowed down the list of issues by evaluating them in terms of their importance, taking into account our ability to contribute to a solution, their impact on business, and our strengths. Issues were then discussed by the Sustainability Promotion Committee¹ and approved at the Otsuka Holdings Board of Directors meeting. As a result, the material issues of the Otsuka group were determined to be: society (health, people, quality in all we do), environment (carbon neutrality, circular economy, water neutrality), and governance. More than four years have passed since identifying these material issues, so we are currently conducting a review of materiality aligned with our Fourth Medium-Term Management Plan.

*1The Sustainability Promotion Committee promotes sustainability throughout the Otsuka group. The committee’s responsibilities include discussing and deciding on the direction and plans for sustainability activities. The Otsuka Holdings director in charge of sustainability promotion serves as the committee chair. Committee members comprise group managers of departments relating to sustainability and the sustainability officers of each company.

Details on the sustainability management structure here

Map of Social Issues

We compiled a list of the social issues relevant to the Otsuka group’s businesses, and created a map of social issues considering their importance in terms of sustainability and their degree of impact on business activities.

*2The situation where productivity does not go up due to the poor condition of the mind and body despite coming to work

The Otsuka Group’s Materiality (Material Issues) and Related SDGs

Materiality		Social Issues	Our Goals	Our Activities
Society (Healthier Society)	Health	Unmet medical and health needs Spread of infectious diseases Nutritional needs Increasing aging issues	Contribute to unmet needs solutions Eradication of tuberculosis Creation of a system for the realization of healthy lifestyles Healthy life extension	Promotion of R&D for unmet needs R&D of antituberculosis drugs and improvement of drug access Support and awareness activities for people’s health maintenance/improvement mainly on exercise and nutrition etc. Promotion of problem solving by strengthening partnerships
	People	Presenteeism Unprepared for diversification	Creation of a corporate culture that stimulates creativity Enhance employee engagement	Human resource development Diversity promotion Health and productivity management
	Quality in All We Do	Consumption and production that impairs sustainability	Gaining stakeholder trust Pursuing sustainability at all levels of the value chain Establishing a quality assurance system for safety and security	Sustainable procurement and product design Thorough quality control and stable supply Responsible promotional activities and information provision Deepening communication with stakeholders Promotion of “consumer-oriented management”
Environment (Healthier Planet)	Carbon Neutrality^*1	Global warming	2028 targets: Reduce 50% in CO₂ emissions compared to 2017	Reduce CO₂ emissions throughout the value chain
	Circular Economy^*2	Environmental load increase	2028 targets: Reduce 50% in simple incineration and landfill disposal compared to 2019 2030 targets: 100% content of recycled and plant-based materials in our PET bottles	Reduce environmental impact by improving resource efficiency Promotion of business activities aimed at sustainability for both society and the earth
	Water Neutrality^*3	Reducing freshwater availability	2028 targets: Expand the plant water management program to all locations globally 2028 targets: Develop a water use strategy for business locations in water-stressed areas	Understanding water resources risk Management and effective use of water resources
Governance		Fragile governance system Social change risk	Long-term improvement of corporate value	Strengthening corporate governance Thorough compliance Risk identification, evaluation and management

*1Sustainable energy use, *2 Sustainable use of raw materials, *3 Sustainable use of water resources

Relationship between Materiality and the Medium-Term Management Plan

Guided by our corporate philosophy, the Otsuka group identifies material issues from a significant, long-term perspective for achieving sustainable growth in harmony with society. This view and approach continue to guide our business operations as we set our goals for 2023 at the same time of the announcement of the Third Medium-Term Management Plan.

Our Approach to Sustainability

Sustainability

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