Message From the Director in Charge of Sustainability

Enhancing corporate value through business activities contributing to people’s Well-being

For the Otsuka group, sustainability serves as the foundation of management, enabling both the creation of social value through business activities and the realization of sustainable growth. Guided by its corporate philosophy, “Otsuka-people creating new products for better health worldwide,” the group believes that its essential role lies in continuously delivering value that contributes to the Wellbeing of people through collaboration with diverse stakeholders. The group believes that the cumulative impact of these efforts contributes to the enhancement of corporate value over the medium to long term.
The group’s commitment extends beyond the provision of healthcare-related products. By positioning “total healthcare” at the core of its corporate activities, the group strives to support all aspects of people’s lives—from daily health maintenance and mental wellness to the fostering of social connections. Through this approach, it aims to provide better choices tailored to each individual’s circumstances and values, thereby remaining a truly indispensable presence in society.
To ensure the reliability of these value creation efforts, the group places strong emphasis on establishing sound and transparent business processes. Strong governance is a critical foundation for improving management effectiveness and credibility, thereby supporting long-term value creation. Looking ahead, under a robust governance framework, the group will continue to uphold clear decision-making processes and conduct its business operations with integrity, promoting management practices that enable sustainable growth together with society.

Steady progress of sustainability management

The Otsuka group established the Sustainability Promotion Committee in 2018 and has continuously advanced initiatives that position sustainability at the core of management. A distinguishing feature of the group lies in its organizational approach, whereby each operating company shares a common group-wide direction while leveraging its respective strengths and business characteristics and collaboratively formulates and executes initiatives. Through the cumulative impact of such operational efforts, the group aims to enhance both social and corporate value creation.
Within the committee, the activities and material issues identified by each operating company are consolidated, and key material issues to be addressed at the group level are reported and discussed. Across key sustainability areas including human rights, the environment, supply chain management, customer responsibility, and employee engagement, the group sets clear directions and steadily advances effective initiatives through coordination among operating companies.
These initiatives are supported by decision-making processes that emphasize transparency and effectiveness, linking management and operational levels. The status of sustainability initiatives at major operating companies, including committee deliberations and progress by relevant committees and task forces, is reported and deliberated annually by the Otsuka Holdings Board of Directors and the Nomination and Remuneration Committee. In addition, by reflecting the evaluation of each company’s initiatives in directors’ remuneration, the group has established a framework that encourages executives to fully recognize the objectives and importance of sustainability and proactively promote related initiatives as part of their own responsibilities.
Going forward, sustainability will be integrated into the group’s medium- to long-term strategy, rather than treated as a set of discrete activities. The group’s initiatives will be further evolved under clear direction and priorities. By further clarifying its approach to addressing social issues and its perspectives on value creation, the group will deepen dialogue with stakeholders both inside and outside the organization, thereby achieving sustainable growth supported by trust.

People as the source of value creation — Accelerating human capital management through engagement

At the Otsuka group, people are the foundation for generating innovation and executing business strategies, and the source of value creation itself. The group believes that sustainable business growth and social value creation can only be achieved when every employee is empowered to fully realize their capabilities and individuality.
Based on this recognition, the group places particular emphasis on enhancing employee engagement. When employees understand the significance of their work and are able to experience personal growth, their motivation to take on challenges and act proactively is enhanced, leading to greater organizational vitality as a whole.
As part of these efforts, a group-wide common assessment was introduced in 2025, with standardized implementation. The results are used not only to assess the current state, but also to drive improvements in HR systems, organizational structures, and management practices. In practice, for managers at operating companies where the assessment has been conducted, the group’s leadership directly communicates the importance of engagement and the desired future vision. This dialogue, driven by leadership commitment, will be expanded further going forward.
In addition, creating an environment where diverse talent can fully leverage their respective strengths is essential for advancing human capital management. With overseas operating companies outnumbering those in Japan, the group respects local cultures and HR practices across regions, including the U.S., Europe, and Asia, while promoting collaboration and ongoing dialogue among HR personnel on a global basis. For key positions, succession plans are established, and initiatives from recruitment to development and career advancement are implemented in a systematic and continuous manner.
Furthermore, to enable employees to thrive, it is essential to foster a workplace environment grounded in psychological safety. An environment in which employees with diverse backgrounds can openly exchange opinions and feel empowered to speak up when something does not feel right provides a foundation for sustainable value creation. Through the further advancement of peoplecentered management, the group will continue to enhance its overall competitiveness and value creation capabilities.

Sustainability as HINKAKU^* looking ahead

At the Otsuka group, a distinctive corporate culture—symbolized by three guiding principles, Ryukan-godo (by sweat we recognize the way), Jissho (actualization), and Sozosei (creativity)—has been passed down over generations. Actively engaging at the front line, tackling challenges head-on, and boldly venturing into uncharted domains are not merely ideals, but have been the very driving force behind the group’s ability to create value for society and achieve sustainable growth.
The group believes that sustainable growth is strengthened when employees embrace this culture in their daily decisions and actions, and rely on it as a guiding compass in challenging situations.
To deepen understanding of this culture and pass it on to future generations, the group continues to conduct training programs in Tokushima, its birthplace, bringing together employees from across the world.
Experiencing these roots firsthand and sharing core values strengthens a sense of unity across the group. At the same time, it fosters sound judgment and a willingness to take on challenges in a rapidly changing environment, ultimately enhancing competitiveness and supporting sustainable growth based on character and integrity.
The group does not prioritize short-term financial gains or immediate efficiency alone. Instead, it places importance on engaging sincerely with stakeholders—including society, employees, and customers—and on creating value from a long-term perspective. This approach reflects the essential quality of a corporation and the very notion of HINKAKU.
By placing sustainability at the core of its business and building trust through its activities, the group believes it can achieve sustained growth in corporate value.
The Otsuka group will continue to address social issues with sincerity while creating value through its business activities, embracing change rather than resisting it. By advancing both business growth and social value creation as complementary drivers, it aims to remain a trusted and indispensable presence over the long term. Guided by this commitment, it will continue to advance sustainability management.

• * HINKAKU : A Japanese concept encompassing integrity, values, and the character of a corporation.