Materiality

The Process of Specifying Our Materiality

Materiality is the key area that the Otsuka group should prioritize. We specified it based on two axes: “importance to the society” and “importance to the company.” The former refers to external trends in the industry, which include the requirements and expectations from organizations such as ESG rating agencies and NGOs, as well as from stakeholders like investors. The latter refers to internal opinions from major operating companies, questionnaires and interviews of employees, and this is how we finally created the following map.

We re-assessed our materiality considering the changes in business environments and social situations in line with the Fourth Medium-Term Management Plan that started in June 2024. We evaluated the growth potential of our businesses, and specified strategies, measures and indicators of each materiality. We keep moving forward toward the achievement of our sustainability mission.

Materiality

Contribute to the Health and
Well-being of People Around the World

Social Issues

Unmet medical needs/unrecognized health needs by consumers
Responding to changing health values

Related SDGs

Strategy	Policies	Indicators
Maximizing product value by leveraging diverse assets within and outside the group	Seamless delivery of diagnostics, therapeutics, and services to overcome unconscious bias toward disease	Expansion of global access Promoting awareness of mental, neurological, cancer, cardiovascular and renal diseases Eradication of tuberculosis
Strengthening research and development capabilities to address unmet medical needs	Strengthening in-house drug discovery capabilities by maximizing the use of global research centers and academia networks	In-house drug discovery capabilities
	Strengthen development capabilities using the latest technologies and know-how	Product development capabilities that contribute to unmet medical needs
Adapting to changes in the world and providing people with complex health solutions	Raising awareness of hydration and electrolyte supplementation for heat disorders	Penetration of POCARI SWEAT
	Growth of women's health category	Contribution to women's health

Develop Human Capital at Good Working Environment

Social Issues

Increased global competition, changes in the management competition environment due to increasing digitalization, diversification of individual values and working styles due to the limitations of a one-size-fits all organization, and increased mobility

Related SDGs

Strategy	Policies	Indicators
Strengthen human resources, a source of innovation, to realize our corporate philosophy	Cultivate human resources who practice “Ryukan-godo (by sweat we recognize the way),” “Jissho (actualization),” and “Sozosei (creativity)” through our unique human resource development programs	Degree of penetration of corporate culture
		Developing a system to nurture the next generation of human capital
Creating an environment to maximize human resources	Creating a workplace and organization and providing opportunities for a variety of human resources unique to Otsuka, a company with diverse businesses	Employee challenge index Employee challenge support index
Creating an environment to maximize human resources	Creating a system to improve employee engagement	Employee engagement to realize Otsuka's corporate philosophy

Create More Sustainable Future
With Business Partners

Social Issues

Destabilization such as pandemics, geopolitical risks of raw material procurement and product supply due to supply chain disruption
Building a sustainable supply chain

Related SDGs

Strategy	Policies	Indicators
Building a strong and stable procurement system to respond to risks	Upstream supply chain visualization and risk identification and response	Response rate to identified risks Percentage of suppliers participating in the measures Response rate to questionnaires when incidents occurred
Promotion of responsible procurement	Building strong engagement with business partners to realize responsible procurement that takes human rights and the environment into consideration	Number of communications with suppliers

Promote Positive Impact on Global Environment

Social Issues

Increasing environmental burden on the Earth due to climate change

Related SDGs

Strategy	Policies	Indicators
Realization of the 2050 environmental vision “Net zero” to reduce all environmental impacts of business activities to zero	Carbon neutrality: reducing climate change due to global warming	[2028 target] Reduction of CO₂ emissions Scope1, 2 :50% reduction (compared to 2017) Scope3: Initiatives to achieve carbon neutrality by 2050 20% self-generated renewable energy
	Circular economy: curbing resource use and Recycling	[2028 target] 50% reduction in simple incineration and landfilling compared to 2019 Formulation and implementation of food loss reduction plan [Target for 2030] 100% of recycled and plant-based materials used in PET bottles
	Water neutrality: maintenance and conservation of water resources	[2028 target] Planning water use strategies at business sites in water-stressed areas Development of water management programs at all sites 10% reduction in water consumption compared to 2023
	Biodiversity: Sustainable and stable procurement of natural resources	[2028 target] Uses 100% RSPO certified palm oil 100% use of sustainable paper

Sustainability Management