Environmental Initiatives
As stated in the Kissei Code of Conduct, which is based on the Group’s Management Philosophy, the Group recognizes the severity of environmental problems and will voluntarily and proactively work toward environmental conservation. Drawing from this statement, Kissei Pharmaceutical has determined its Basic Environmental Policy. Based on this policy, it 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 also contribute to creating an affluent and comfortable society.
2. Basic Policy
(1) We will promote activities to reduce environmental burdens and evaluate our various effects on the environment through a series of corporate activities, such as research, development, production, distribution, sales, usage, and disposal of products.
(2) We will set environmental objectives and targets regarding global environmental conservation efforts and periodically revise our objectives, seeking to improve continually.
(3) We will actively promote saving energy, saving resources, reducing waste, and recycling, and we will strive to reduce environmental burdens and prevent pollution.
(4) We will comply with environmental laws, regulations, agreements, and other requirements to which the Company has agreed and we will endeavor to protect the environment by setting our own standards.
(5) Every individual employee will aim to heighten consciousness and improve ethics through environmental education, and we will aggressively promote activities for the prevention of environmental pollution.
(6) We 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 gases poses serious risks worldwide, and its impacts are expected to extend across many economic sectors. Evaluating and analyzing the impact of climate change on our business activities, strengthening our resilience to risk, and appropriately exploiting opportunities presented by climate change are important issues we must address. We identified “climate change countermeasures" as one of the material issues related to our management base and declared our support for the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations. Regarding risks and opportunities associated with climate change, we are analyzing medium- to long-term impacts on our business activities in line with the TCFD framework and promoting initiatives to improve disaster resilience and achieve carbon neutrality, prioritized in accordance with impacts on our business strategy.
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.
| Governance | Organizational governance in line with climate-related risks and opportunities |
| Strategy | Actual and potential impacts of climate-related risks and opportunities on business, strategy, and financial planning (if material information) |
| Risk Management | Climate-related risks identification, assessment, and management status |
| Metrics and Targets | Metrics and targets used to assess and manage climate-related risks and opportunities (if material information) |
Strategy
Regarding the impact of climate change on the Company’s business, The TCFD Project Team, a subordinate organization to the Sustainability Promotion Committee, led the creation of 1.5℃*1 and 4℃*2 climate change scenarios. They then identified risks and opportunities for each, focusing on the impact on business sites in the Pharmaceutical Business, the central business of the Group. These risks and opportunities were analyzed and assessed in terms of their financial impact and their likelihood of occurrence, then possible measures were considered and prioritized by the impact on our business strategy.
Under the 1.5℃ scenario, we face transition risks, such as higher costs stemming from enhanced policies and regulations related to decarbonization, and a fall in reputation in the eyes of stakeholders resulting from insufficient efforts to address climate change. The 4℃ scenario assumes that decarbonization is unsuccessful, leading to a 4℃ rise in the global average temperature. This introduces physical risks, which break down further into immediate risks, such as water damage caused by typhoons and heavy rain, and long-term risks caused by rising temperatures, such as higher air conditioning costs and higher costs for securing water resources.
On the other hand, we believe that climate change also brings opportunities. For example, it could lead to the introduction of highly-efficient equipment and a rise in corporate value, thanks to proactive efforts to combat climate change and proper disclosure of these efforts. Knowing this, we will continue to promote decarbonization and increasing our resilience in order to improve corporate value sustainably.
As a result of analysis and assessment, there were no risks identified that could have a significant impact on the business strategy.
*1 Created with reference to the International Energy Agency’s (IEA’s) Net Zero Emissions by 2050 Scenario (NZE) and others.
*2 Created with reference to the International Energy Agency’s (IPCC’s) Net Zero Emissions by 2050 Scenario (NZE) and others.
< Results of Scenario Analysis >
Transition Risks_1.5℃ Scenario
| Classification | High-Priority | Impact on the Company | Degree of Impact*１ | Countermeasures | Business Risks*2 |
| 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*3) |
Medium | ・Reduce CO2 emissions 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 |
*1 Degree of impact is based on the following criteria: high (over ¥500 million per year), medium (¥100-¥500 million per year), low (less than ¥100 million yen per year)
*2 Business risks are evaluated comprehensively, taking into consideration the degree of impact, frequency of occurrence, order of response, and other factors.
*3 Carbon prices in 2030 for advanced economies under the NZE scenario according to IEA World Energy Outlook 2021
Physical Risks_ 4℃ Scenario
| Classification | High-Priority | Impact on the Company | Degree of Impact*1 | Countermeasures | Business Risks*2 |
| 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*3 |
Low |
*1 Degree of impact is based on the following criteria: high (over ¥500 million per year), medium (¥100-¥500 million per year), low (less than ¥100 million yen per year)
*2 Business risks are evaluated comprehensively, taking into consideration the degree of impact, frequency of occurrence, order of response, and other factors.
*3 Water risks determined with reference to the AQUEDUCT Water Risk Atlas
Opportunity
| Classification | Item | Impact on the Company* | Degree of Impact |
| 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 | - |
* Degree of impact is based on the following criteria: high (over ¥500 million per year), medium (¥100-¥500 million per year), low (less than ¥100 million yen per year)
Risk Management
Kissei has positioned risks related to climate change as important management risks, and the risks identified within the TCFD framework are reviewed at least once a year for their impact on business activities. Based on the level of impact, we consider cost-effectiveness and urgency, then prioritize, investigate, and implement response measures.
The Sustainability Promotion Committee will discuss and report on the management of these risks to the Board of Directors, the Audit & Supervisory Board, and the Risk Management Committee, an advisory body to the Board of Directors, to promote comprehensive Companywide risk management in an integrated manner.
Metrics and Targets
We have set the ratio of renewable energy use and reduction of CO2 emissions as KPIs toward achieving carbon neutrality by 2050, as well as the following medium-term targets, with related activities underway.
- Fiscal 2030 reduction target for Scope 1 and 2 CO2 emissions: 46% reduction compared with fiscal 2013 Fiscal 2030 target for ratio of renewable energy use: 74% or more of total electricity consumption
Thanks to active efforts to introduce renewable energy, in fiscal 2023 we achieved a ratio of renewable energy usage of 77%, achieving our 2030 target ahead of schedule
CO2 Emissions (Scope 1 and 2)
Rate of Renewable Energy Use
Scope 3 Greenhouse Gas Emissions in the Supply Chain
We calculate Scope 3 greenhouse gas (GHG) emissions 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. In fiscal 2023, Scope 3 emissions amounted to 78,485 tons, whereas total emissions (Scope 1, 2 and 3) amounted to 89,730 tons. Of these emissions, Scope 3 Category 1 emissions (CO2 emissions from purchased goods and services) accounted for 75.0% of total CO2 emissions.
Going forward, we aim to reduce CO2 emissions throughout our entire supply chain, and, in addition to efforts to reduce waste, we will also work to improve engagement with suppliers toward this goal.
Environmental Management System
Kissei promotes environmental management based on the ISO14001 standards for environmental management systems. Under the organizational structure of Kissei’s environmental management system, the vice-chair of the Sustainability Promotion Committee serves as the person in charge of environmental management.
Therefore, the vice-chair is 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.
ISO14001 Certification Status
| Kissei Pharmaceutical | Month of Acquisition |
| Head Office / Matsumoto Plants | September 2000 |
| Shiojiri Plants | September 2000 |
| Nutritional Business Center | September 2000 |
| Second Research Laboratories | September 2006 |
| Tokyo Head Office, Tokyo Head Office (Koishikawa) |
September 2006 |
| Central Research Laboratories | September 2007 |
| Group Company | Month of Acquisition |
| KISSEI COMTEC CO., LTD. | June 2002 |
|
HASHIBA TECHNOS CO., LTD. Head Office Facility Management Headquarters (shared with Kissei Pharmaceutical) |
February 2002 September 2000 |
Comprehensive Plan Related to Environmental Conservation
To realize our basic environmental policy, we set the reduction of environmental impacts in terms of energy use, CO2 emissions, and industrial waste generation as specific environmental metrics and targets, and we are working to achieve these targets by upgrading to energy-saving equipment, expanding the use of renewable energy, and promoting efforts to reduce, reuse, and recycle (3Rs).
Environmental Conservation Activity Achievements
Kissei engages in environmental management based on the ISO14001 standards for environmental management systems. The following graphs indicate trends in energy consumption, CO2 emissions, and the generation and final disposal of waste in line with environmental conservation activity achievements.
*1 From fiscal 2022, we changed the calculation method based on the composition ratio of gasoline and hybrid vehicles in MR vehicles. Therefore, the values of previous years have also been corrected retrospectively.
*2 The CO₂ emission factor of electricity was changed from the basic emission factor to the adjusted emission factor from fiscal 2022. Accordingly, the values of previous years have also been retrospectively revised.
*3 The volume of residue produced after intermediate treatment was reassessed following the adoption of the electronic manifest system in fiscal 2020.
The Environment and Kissei (Reducing Environmental Impact Companywide)
The figures below show the input of resources into Kissei Pharmaceutical for fiscal 2023, 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.
*1 The calculation method was revised following the launch of new products.
*2 Covering Head Office / Matsumoto Plants, Shiojiri Plants, Nutritional Business Center, Central Research Laboratories, Safety Research Laboratories, Joetsu Chemical Laboratories, Tokyo Head Office, Tokyo Head Office (Koishikawa)
*3 Data from business locations that handle one or more tons of applicable chemical substances annually
*4 Covering Head Office/Matsumoto Plants, Shiojiri Plants, Central Research Laboratories, Safety Research Laboratories, Joetsu Chemical Laboratories
Environmental Accounting
We have incorporated environmental accounting since fiscal 2004 to ascertain the cost of environmental conservation within business activities.
Going forward, we will continue to engage in effective environmental conservation activities.
- Target period:
- April 1, 2023, to March 31, 2024
- Scope of calculation:
- All business locations
- Calculation method:
- Based on “Environmental Accounting Guidelines 2005 edition,” Ministry of the Environment
- Investments and expenses:
- Investment amounts indicate the amount of investment in environmental-related facilities in a given fiscal year, and expenses indicate the amount of expenditures incurred for the purpose of environmental conservation and do not include depreciation expenses.
Environmental Conservation Costs
| Environmental Conservation Cost Categories | Investments＊ | Expenses | ||
| Costs within business area | ①Pollution prevention costs | Maintenance and management of air pollution prevention, water pollution prevention, etc. | 0 | 8,938 |
| ②Environmental conservation costs | Energy-saving measures, energy-saving equipment, etc. | 89,315 | 31,797 | |
| ③Resource recycling costs | Waste reduction, recycling, disposal and treatment costs, etc. | 0 | 34,914 | |
| Up/downstream costs | Container and packaging recycling consignment fees, etc. | 0 | 13,306 | |
| Management activity costs | Maintain and manage ISO14001, etc. |
4,698 | 1,520 | |
| R&D costs | ー | 0 | 0 | |
| Social activity costs | Sponsorship fees, etc. for environmental conservation groups, etc. | 0 | 230 | |
| Environmental damage response costs | ー | 0 | 0 | |
| Total | 94,013 | 90,705 | ||
＊ Total of 11 investments of ¥500,000 or more
Environmental Conservation Effects
| Fiscal 2022 | Fiscal 2023 | Change(%) | |||
| CO2 emissions*1*2 | 14,075 | Tons | 11,245 | Tons | -20.1% |
| Energy used (oil equivalent) | 8,134 | ｋL | 7,845 | ｋL | -3.6% |
| Water used*3 | 151 | Thousands of ㎥ | 156 | Thousands of ㎥ | 3.3% |
| Wastewater*3 | 119 | Thousands of ㎥ | 114 | Thousands of ㎥ | -4.2% |
| Waste generated | 395 | Tons | 385 | Tons | -2.5% |
| Recycled | 359 | Tons | 351 | Tons | -2.2% |
| Final disposal | 17 | Tons | 12 | Tons | -29.4% |
＊1 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 and recalculated to reflect this change.
＊2 From fiscal 2022, we changed the calculation method based on the composition ratio of gasoline and hybrid vehicles in MR vehicles. Therefore, the values of previous years have also been corrected retrospectively.
＊3 Covering Head Office/Matsumoto Plants, Shiojiri Plants, Nutritional Business Center, Central Research Laboratories, Safety Research Laboratories, Joetsu Chemical Laboratories, Tokyo Head Office, Tokyo Head Office (Koishikawa)
