Environmental Initiatives
As stated in the Kissei Code of Conduct, which is based on the Group’s Management Philosophy, the Group recognizes the importance of environmental problems and will voluntarily and proactively work toward environmental conservation. Drawing from this statement, Kissei Pharmaceutical has determined its Basic Environmental Policy and, based on this policy, works actively and continuously to incorporate environmental conservation in all its corporate activities while reducing the environmental impact of those activities.
Basic Environmental Policy
1. Basic Philosophy
As an R&D-oriented company that is always “Looking Towards Tomorrow’s Health” and aims to help people worldwide, Kissei will actively work to preserve the environment as part of its corporate social responsibility and contribute to creating an affluent and comfortable society.
2. Basic Policy
(1) We (Kissei) will promote activities to reduce environmental burdens and evaluate the various effects on the environment through a series of corporate activities, such as research, development, production, distribution, sales, usage, and disposal of the products.
(2) We (Kissei) will set environmental objectives and targets regarding global environmental conservation efforts and periodically revise our objectives, seeking to improve continually.
(3) We (Kissei) will actively promote saving energy, saving resources, reducing waste, and recycling, and we will strive to reduce environmental burdens and prevent pollution.
(4) We (Kissei) will comply with environmental laws, regulations, agreements, and other requirements to which the company has agreed, and we will endeavor to conserve the environment by setting our own standards.
(5) Every individual employee will aim to heighten consciousness and improve ethics through environmental education, and we (Kissei) will aggressively promote activities for the prevention of environmental pollution.
(6) We (Kissei) take global environmental issues seriously, so all Kissei Group companies will strive to protect the environment.
Disclosure Based on the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)
Global warming caused by greenhouse gas emissions poses serious global risks, which are expected to have an impact across multiple economic sectors. The need to evaluate and analyze the effect of climate change on business, enhance resilience to related risks, and take advantage of related opportunities are all important issues for the Company.
We have positioned responding to climate change as a material issue for our management base. Therefore, we have examined the risks and opportunities related to climate change from a medium- to long-term perspective and analyzed the future impact of climate change on our business activities, based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).*1
*1 Kissei Pharmaceutical endorsed the recommendations of the TCFD in June 2023.
Understanding the TCFD
The TCFD was established in 2015 by the Financial Stability Board (FSB) to investigate ways to disclose climate-related information and manage financial institutions. The TCFD recommends that companies disclose the risks and opportunities related to climate change according to the following four categories.
1. Governance
2. Strategy
3. Risk Management
4. Metrics and Targets
Governance
Regarding environmental problems, Kissei engages in efforts aimed at realizing a sustainable society. In addition, the Sustainability Promotion Committee manages the planning and progress of a variety of measures, the content of which is managed and supervised by the Board of Directors.
A cross-departmental TCFD Project Team was set up within the committee to conduct a specific investigation into major climate change-related issues and has identified, analyzed, and assessed business risks and opportunities.
Strategy
Regarding the impact of climate change on the Company’s business, we created 1.5℃*2 and 4℃*3 climate change scenarios and identified risks and opportunities for both. These risks and opportunities were analyzed and assessed in terms of their financial impact and their likelihood of occurrence, and then possible measures were investigated and prioritized by the impact on our business strategy.
Although we have identified transition risks in the 1.5℃ scenario, and immediate and long-term physical risks in the 4.0℃ scenario, we are also working to increase resilience and reduce CO2 emissions in pursuit of opportunities, such as cost reductions from the introduction of high-efficiency equipment as well as increased corporate value from active efforts to combat climate change, followed by disclosure of these efforts.
As a result of analysis and assessment, there were no risks identified that could have a significant impact on the business strategy.
*2 The 1.5℃ scenario was created with reference to the International Energy Agency’s (IEA’s) Net Zero Emissions by 2050 Scenario (NZE) and others.
*3 The 4℃ scenario was created with reference to the Intergovernmental Panel on Climate Change’s (IPCC’s) RCP8.5 scenario and others.
< Results of Scenario Analysis >
Transition Risks_1.5℃ Scenario
| Classification | High-Priority | Risks Impact on the Company | Impact Level | Countermeasures | Business Risks |
| Transition Risks | Enhanced policies and regulations related to decarbonization | Addition of carbon pricing Company could incur an estimated cost of approximately ¥200 million due to carbon pricing (based on estimated CO2 emissions in fiscal 2030 of 9,979 tons at a rate of US$130 per ton*4) |
Medium | • Reduce CO2 by introducing renewable energy, upgrading to energy-saving equipment, and further promoting activities to save energy |
Low |
| Capital investment costs could increase as a result of new or enhanced decarbonization policies such as CO2 emission regulations | Low | • Systematically switch to energy-efficient equipment when upgrading and consider taking advantage of subsidies and other avenues |
Low | ||
| Requirement to implement climate change initiatives | Stakeholders’ evaluation of the Company could decline due to insufficient efforts to address climate change | High | • Gain stakeholder trust via sustainable efforts to address climate change-related issues and through appropriate disclosure |
Low |
*4 Carbon prices in 2030 for advanced economies under the NZE scenario according to the IEA’s World Energy Outlook 2021
Physical Risks_ 4℃ Scenario
| Classification | High-Priority | Risks Impact on the Company | Impact Level | Countermeasures | Business Risks |
| Physical Risks (Immediate) | Intensification and increased frequency of natural disasters | Flooding could cause damage to key locations, leading to suspended operations and expenses to restore these operations, and could also affect the development pipeline and impact the steady supply of products | High | • Take appropriate measures to minimize damage to locations from floods and other disasters |
Low |
| Disasters could disrupt manufacturing due to damage incurred by suppliers, or hinder the steady supply of drugs by affecting the transportation network | High | • Maintain and improve the system for steady drug supply by keeping an inventory of drugs in conditions suited to their respective characteristics, and in decentralized locations • Reduce procurement risks by establishing multiple supply lines |
Low | ||
| Physical Risks (Long-Term) | Increased frequency of natural disasters could lead to higher insurance premiums | Low | • Make appropriate judgments that balance insurance premiums with actual risk, and take out policies that hedge risks |
Low | |
| Rising temperatures | Rising temperatures could lead to higher air-conditioning costs | Low | • Continue activities to instill the importance of saving energy among employees, and promote new activities • Introduce and shift to high-efficiency and energy-saving equipment |
Low | |
| Water shortages | A lack of water resources could lead to restrictions on water use, thereby disrupting operations, while costs related to securing water resources could increase | Low | • Increase information collection related to water withdrawal in surrounding areas and construct an emergency response system that factors in the risk of acquiring water resources*5 |
Low |
*5 Water risks determined with reference to the Aqueduct Water Risk Atlas
Opportunity
| Classification | Item | Impact on the Company | Impact Level |
| Opportunity | Resource efficiency | Costs for energy procurement and raw materials could be reduced by introducing new efficient technology and equipment | Low |
| Energy | The introduction of renewable energy could ensure stability of business versus future depletion of fossil fuels | Low | |
| Products and services | Demand could increase for existing pharmaceutical products in disease areas where morbidity increases as temperatures rise | Low | |
| Market | Demand and development opportunities could increase for treatment in disease areas where morbidity increases as temperatures rise | - | |
| Resilience | Climate change risk assessments and the continued implementation of climate change-related measures could minimize risks and enhance business stability | - | |
| Other | Active efforts to address climate change and conduct appropriate disclosure could build stakeholder trust (from customers, employees, investors, and students) and increase the Company’s reputation, thereby creating corporate value | - |
Risk Management
Metrics and Targets
We have set the utilization rate of renewable energy and reduction of CO2 emissions as KPIs under “climate change countermeasures,” a material issue for our management base.
We have also set the following medium-term targets to contribute toward the government of Japan’s 2050 Carbon Neutrality Declaration and its fiscal 2030 goal of a 46% reduction of greenhouse gas emissions compared with fiscal 2013 levels.
In April 2022, we started using Shinshu Green Electricity, CO2-free electricity produced in Nagano Prefecture, at our head office and Matsumoto Plant and Shiojiri Plant. In fiscal 2022, approximately 34% of the electricity used in these plants was from renewable sources, reducing CO2 emissions by an annual total of 2,280 tons.
In addition, from April 2023, we expanded the introduction of Shinshu Green Electricity to five additional locations: the Central Research Laboratory, the Pharmaceutical Laboratory, the Second Research Laboratory, the Nutritional Business Center, and the Tokai Hokuriku Branch. This change is expected to reduce annual CO2 emissions by approximately 40% compared with fiscal 2013, and puts us on track to achieve our fiscal 2030 target ahead of schedule of total electricity consumption being 74% or more renewable energy. Going forward, we will continue to actively promote the use of renewable energy.
CO2 Emissions (Scope 1 and 2)
Ratio of Sustainable Energy Use and Medium-Term Goals
NOTE: From fiscal 2022, the CO2 emission factor for electricity has been changed from the base emission factor to an adjusted emission factor. Figures for previous fiscal years have been retroactively adjusted to reflect this change.
Scope 3 Greenhouse Gas Emissions in the Supply Chain
In order to gain an understanding of the overall greenhouse gas emissions (CO2 emissions) in the supply chain, we began calculating Scope 3 greenhouse gas emissions from fiscal 2022, based on the Basic Guidelines for Calculating Greenhouse Gas Emissions (Ver. 2.4), published by the Ministry of the Environment and the Ministry of Economy, Trade and Industry. We will continue to calculate Scope 3 emissions and use these calculations in our work to reduce CO2 emissions throughout the entire supply chain, including those outside the Company.
Environmental Management System
Kissei promotes environmental management based on the ISO 14001 standards for environmental management systems. Under the organizational structure of Kissei’s environmental management system, the department manager of the General Administration Department serves as the person in charge of environmental management, and is therefore in charge of the maintenance, management, and operation of environmental management throughout the Company. In addition, each business location has a person in charge of environmental management who is responsible for the maintenance, management, and operation of the environmental management system for their specific location.
To promote environmentally friendly activities throughout the Company, the various plants and laboratories of Kissei Pharmaceutical acquired ISO 14001 certification between 2000 to 2007 and then transitioned to the ISO 14001: 2015 standard from 2017 to 2018.
In addition, Kissei Group companies KISSEI COMTEC CO., LTD., and HASHIBA TECHNOS CO., LTD., have also acquired ISO 14001 certification for their respective environmental management systems, with each company having established a system to promote environmental conservation activities, with efforts to reduce environmental impact.
ISO 14001 Certification Status
| Kissei Pharmaceutical | Month of Acquisition | Transition to 2015 Standard |
| Head Office / Matsumoto Plants | September 2000 | September 2018 |
| Shiojiri Plants | September 2000 | September 2018 |
| Nutritional Business Center | September 2000 | September 2018 |
| Second Research Laboratories | September 2006 | September 2018 |
| Tokyo Head Office, Tokyo Head Office (Koishikawa) |
September 2006 | September 2018 |
| Central Research Laboratories | September 2007 | September 2018 |
| Group Company | Month of Acquisition | Transition to 2015 Standard |
| KISSEI COMTEC CO., LTD. | June 2002 | November 2017 |
|
HASHIBA TECHNOS CO., LTD. Head Office Facility Management Headquarters (shared with Kissei Pharmaceutical) |
February 2002 September 2000 |
February 2018 September 2018 |
The Environment and Kissei (Reducing Environmental Impact Companywide)
The figures below show the input of resources into Kissei Pharmaceutical for fiscal 2022, as well as the output in the form of emissions and waste generated in processes such as research, development, production, and sales. We are working to reduce our environmental impact based on this data.
