Six Material Issues

Seikagaku Corporation has identified six material issues on the basis of assessment of important issues that should be addressed on a priority basis in the interest of achieving for sustainable development of society and enhancement of corporate value, in light of both their importance to the company and the expectations of society, including diverse stakeholders. By promoting initiatives related to these material issues, Seikagaku will contribute to achievement of the Sustainable Development Goals (SDGs) adopted by the United Nations.

Material Issue Identification Process

Step 1: Identification and organization of social issues

To identify material issues, we identified social issues based on factors including non-financial information disclosure guidelines; international frameworks, principles, and guidelines; and survey items from ESG assessment organizations. Furthermore, we closely examined issues specific to the pharmaceutical industry. On that basis, we compiled a list of 39 social issues.

Step 2: Prioritization of social issues

Using the list of 39 social issues identified in Step 1, we assessed the importance of issues to Seikagaku in light of its Corporate Philosophy, management strategies, and financial situation. Also, an external consultant scored, analyzed, and organized the issues from an outside perspective to assess the expectations of society, including diverse stakeholders. Based on the results of this assessment process, we prepared a social issues assessment matrix and shortlisted 17 high-priority social issues of importance to both Seikagaku and society.

The Social Issues Assessment Matrix

Step 3: Identification of material issues through validation and grouping of issues

To validate the social issues assessment matrix prepared in Step 2, following discussion and careful examination of the matrix together with involved Seikagaku divisions and departments and an external consultant, the Board performed grouping of the 17 high-priority social issues and identified six material issues relevant to Seikagaku. The Board articulated reasons for selection and a future vision and determined objectives, initiatives, and monitoring indicators for each identified material issue and organized and confirmed their relevance to SDGs. The material issues were then deliberated and approved by the Board. 

Material Issues and Initiatives

Seikagaku identified the following six material issues through the above process. We plan to review the material issues in light of changes in the social environment, the Company’s management plans, and other factors.

We have set monitoring indicators for each material issue and will verify and assess the state of progress toward the objectives. In the future, we plan to observe change in activities over time and consider and establish appropriate KPIs for each item.

 

Notes:

  1. Figures are on a parent-company basis unless otherwise noted.
  2. The material issues were approved at a meeting of the Board held in December 2021.

 

1. Creation of truly useful pharmaceuticals and medical devices

Reason for Selection and Future Vision

Creating pharmaceuticals and medical devices that utilize knowledge of glycoscience and contributing to medical care around the world is the foundation for Seikagaku’s sustainable growth.

Seikagaku increases its value to society and contribute to the health and well-being of people around the world by investing profits obtained from introducing new drugs on the market and continuously creating pharmaceuticals and medical devices that are truly needed by society. 

Also, Seikagaku considers intellectual property to be an important management resource and implements a global intellectual property strategy to contribute to the continuous creation of pharmaceuticals and medical devices.

Objectives
  • Continuously create useful pharmaceuticals and medical devices by utilizing knowledge of glycoscience and unique drug-discovery technologies.

Initiatives
  1. Advance multiple development pipelines with a view to global expansion.
     
  2. Strengthen and utilize unique GAG-related basic technologies and create multiple new drug candidates that address unmet-medical-needs.
     
  3. Create added value for Seikagaku’s proprietary technologies and speed up new drug development by fusing these technologies with research seeds from academic institutions or external technologies. 
     
  4. Acquire and maintain intellectual properties that contribute to strengthening of Seikagaku’s technological capabilities and conduct patent clearance searches to prevent infringement of third-party rights.

Results (Fiscal 2022)
  • SI-6603: Completed follow-up observation in a Phase III clinical study in the U.S. (March 2023)
  • SI-449: Completed subject enrollment for a pivotal clinical study in Japan (September 2022)
  • SI-614: Completed subject enrollment for a Phase III clinical study in the U.S. (February 2023)
  • Promoted creation of new research themes in disease areas with high unmet medical needs

Monitoring Indicators
  • Number of development pipeline projects and their progress
  • Number of joint research and collaborative research projects 
  • Number of academic presentations and paper submissions
  • Number of patents held (Japanese and overseas)
  • Conduct of patent clearance searches

2. Provision of a stable supply of pharmaceuticals and medical devices of guaranteed quality

Reason for Selection and Future Vision

Providing a stable supply of high-quality pharmaceuticals and medical devices is an important duty of a pharmaceutical company.

Seikagaku strengthens its compliance and production systems to ensure uninterrupted access to reliable pharmaceuticals and medical devices for patients and medical institutions. 

Also, we manage risks associated with raw materials procurement and other business processes and take all possible measures to prevent risks from materializing.

Objectives
  • Manufacture and provide a stable supply of pharmaceuticals and medical devices of guaranteed quality by maintaining a quality management system compliant with global standards.
  • Ensure a continuous supply of pharmaceuticals and medical devices by rigorously managing risks associated with raw materials procurement and product supply.

Initiatives
  1. Continuously engage in GMP compliance activities (compliance with the GMP Ministerial Ordinance, manufacturing and marketing approval matters).  
     
  2. Develop a quality culture to ensure provision of a stable supply of pharmaceuticals and medical devices.
     
  3. Enhance preventive maintenance activities aimed at appropriate raw material and product inventory control and uninterrupted production. 

Results (Fiscal 2022)
  • Conducted 20 audits (paper and on-site) of contract manufacturers, suppliers,　and distributors
  • Confirmed GMP compliance and development of a quality culture through periodic management reviews
  • Implemented measures to prevent reoccurrence of equipment problems and strengthened preventive maintenance

Monitoring Indicators
  • Status of conduct of management reviews
  • Status of conduct of audits and audit response
  • Status of efforts to develop a quality culture
  • Status of inventory availability based on the production plan
  • Status of conduct of maintenance for quality assurance and safe production
  • Status of preparation of manuals to prepare against large-scale disasters

3. Expansion of healthcare access and appropriate provision of high-quality medical information

Reason for Selection and Future Vision

Enabling greater numbers of patients over a wider area to appropriately use pharmaceuticals and medical devices that address unmet-medical-needs is the mission of a pharmaceutical company. 
Seikagaku promotes global distribution of pharmaceuticals and medical devices that address medical needs and, as a pharmaceutical manufacturer, strives to enhance information provision in order to achieve appropriate awareness of the safety and efficacy of our pharmaceuticals and medical devices and of diseases related to our products.

Objectives
  • Provide highly efficacious and safe pharmaceuticals and medical devices to greater numbers of patients.
  • Appropriately provide information on the safety and efficacy of pharmaceuticals and medical devices and promote their correct use.

Initiatives
  1. Strive to raise awareness in the market of existing products in cooperation with sales partners.
     
  2. Accelerate multinational expansion of existing products and products in development.
     
  3. Engage in product improvement aligned with medical needs.
     
  4. Provide information of high medical and scientific value that contributes to post-marketing product development.
     
  5. Enhance operation of disease awareness websites and information provision to the media.
     
  6. Comply with post-marketing safety management standards and promptly and properly gather, evaluate, and provide safety management information. 

Results (Fiscal 2022)
  • Conducted a campaign to raise product awareness among patients in cooperation with a sales partner 
  • Conducted a total of five company-initiated clinical research and joint research projects and developed new evidence
  • Gave two academic presentations and published three peer-reviewed papers for the purpose of enhancing product value
  • Held seminars and briefings for medical practitioners in cooperation with sales partners and participated in exhibitions (total of 31 events)
  • Published information on the Web for the purpose of providing information to physicians and increasing disease awareness among the general public

Monitoring Indicators
  • Number of products shipped (pharmaceuticals and medical devices)
  • Status of product improvement efforts
  • Information provision activities for product value enhancement
  • Number of disease awareness website views 
  • Holding of media seminars, etc.
  • Provision of education concerning pharmacovigilance

4. Fair and ethical business activities and strengthening of corporate governance

Reason for Selection and Future Vision

Compliance is the foundation of corporate activities. Furthermore, a higher sense of ethics is required of pharmaceutical companies, and it is necessary to comply with the pharmaceutical industry guidelines and standards.

Seikagaku engages in business management to ensure that each individual employee not only complies with laws and regulations, but also behave on the basis of high ethical standards. 

Also, engaging in business management that worthy of the trust of society is essential for the sustainable growth of a company and enhancement of corporate value. We continuously work to develop a highly effective corporate governance system.

Objectives
  • Each Seikagaku employees follows the compliance program and behaves on the basis of high compliance awareness.
  • Develop an optimal corporate governance system in order to engage in decision-making that is transparent and fair and quick and decisive.

Initiatives
  1. Foster compliance awareness by periodically providing education about the Compliance Code of Conduct and other compliance-related matters.
     
  2. Establish multiple internal and external consultation and reporting (whistleblowing) contact points and appropriately respond to any problems that occur. 
     
  3. Ensure periodic monitoring of the status of operation of corporate governance by the Board and continuously review the corporate governance system.
     
  4. Enhance provision of information to outside Member of the Board and Audit & Supervisory Board members and engage in improvement activities in light of the results of the Board effectiveness evaluation.

Results (Fiscal 2022)
  • Passed a Board of Directors resolution on TCFD disclosure and complied with the principles of the Corporate Governance Code
  • Zero serious compliance-related incidents; conducted continuous training to foster compliance awareness
  • Engaged in systems development, including revision of internal regulations, in connection with revision of the Whistleblower Protection Act
  • Revised the Basic Policy on Internal Controls in accordance with changes in the external environment
  • Enhanced explanations of important matters for outside directors in light of the results of Board of Directors effectiveness evaluation

Monitoring Indicators
  • Status of provision of compliance education
  • Number of serious compliance violations
  • Status of operation of internal control systems
  • Status of provision of the Corporate Governance Code
  • Status of information provision to outside Member of the Board and Audit & Supervisory Board members
  • Status of Board effectiveness assessment and improvement activities

Key metrics and targets
  • Sufficient compliancy of the Corporate Governance Code
  • Assessment and verification of Board effectiveness by all Board members
    ►Annual evaluation and verification

 

Results (Fiscal 2022)

  • Passed a Board of Directors resolution on TCFD disclosure and complied with the principles of the Corporate Governance Code (June 2022)
  • Conducted evaluation and verification of Board of Directors effectiveness at Outside Officers Meeting (March 2023) and Board of Directors (April 2023)

5. Promotion of diversity and development of human resources

Reason for Selection and Future Vision

Human resource management that secures and develops diverse human resources useful in business activities and promotes people’s contribution and success provides a foundation for corporate growth. 

Seikagaku considers human resources to be an important corporate asset and works to develop people capable of creating new value. We develop an environment, systems, programs, and mechanisms to enable all employees to fully demonstrate their capabilities so that the contributions and successes of diverse employees are the driver of Seikagaku’s sustained growth.

Objectives
  • By promoting upskilling and career development, cultivate and retain autonomous employees who go about their work with passion and pride and produce results.

Initiatives
  1. Continuously revise personnel systems and improve treatment of older employees, which boosts employee motivation.
     
  2. Engage in systematic recruiting activities with diversity in mind and make employee assignments and undertake employee development so that the resulting diversity fully contributes to business activities.
     
  3. To develop autonomous employees, enhance the systematic education curriculum and engage in carefully planned education and training that takes into consideration job rotation.
     
  4. Implement work style reforms and measures to improve work-life balance.
     
  5. Enhance mental health care measures and health promotion activities in order to appropriately manage and promote employee physical and mental health.

Results (Fiscal 2022)
  • Disclosed human capital-related data, such as information on career training and employment diversity
  • Introduced a new two-track HR system with the aim of organization building for maximization of resource value
  • Began a review of the training curriculum for the purpose of developing autonomous employees
  • Gathered and reflected in recruiting activities information on essential personnel in light of the medium-to-long-term and single-year business plans of each division and department (securing of diversity with regard to the proportion of mid-career recruits, gender classification, abilities, etc.)

Monitoring Indicators
  • Status of revision of HR systems
  • Percentages of women hired/retained/serving in managerial posts 
  • Percentages of mid-career employees hired/retained/serving in managerial posts
  • Percentage of persons with disabilities hired
  • Attrition rate (voluntary)
  • Three-year retention rate of new graduate recruits
  • Status of education and training for human resource development
  • Status of diversity and inclusion (D&I) activities
  • Average number of days of paid leave taken
  • Average number of overtime hours per month
  • Number of persons taking childcare and nursing care leave (males and females, including contract employees) 
  • Return-to-work rate after taking leave
  • Status of provision of mental health care measures, etc.

Key metrics and targets
  • Percentage of female recruits
    ►Comparable to 50%, annually
  • Percentage of women in managerial positions
    ►≧25% by mar 2026
  • Percentage of mid-career recruits
    ►Comparable to 50%, annually
  • No. of career training courses
    ►≧15 courses per year

 

Results (Fiscal 2022)

  • Percentage of female recruits:38.6％
  • Percentage of women in managerial positions:18.6％
  • Percentage of mid-career recruits:56.8％
  • No. of career training courses:18 courses

6. Engagement in environmentally friendly corporate activities

Reason for Selection and Future Vision

The impacts of global warming and other environmental problems have become apparent, and measures to protect the environment and preserve biodiversity have become an urgent priority for society. Responding to these problems is also a business management issue for companies that bears on risk reduction and profit opportunities. 

As a member of society, Seikagaku aims to achieve balance between environmental protection measures and business growth and engages in business activities with low environmental impact in addition to obeying environment-related laws and regulations.

Objectives
  • Contribute to realization of a sustainable society by implementing measures for environmental impact reduction, climate change mitigation, and biodiversity preservation in business activities.

Initiatives
  1. Implement effective measures for energy use reduction.
     
  2. Convert to energy sources that contribute to CO_{2} emissions reduction.
     
  3. Mitigate water pollution load by means including manufacturing water adjustment and introduction of wastewater treatment facilities with low environmental impact. 
     
  4. Implement biodiversity preservation activities, including reduction or elimination of use of animal-derived materials in products.

Results (Fiscal 2022)
  • Achieved continuous reduction in energy use (five-year average energy consumption per unit of 96.7% / equivalent to Class S energy conservation performance*)
  • Achieved a reduction in CO2 emissions (2.8% reduction year on year)
  • Disclosed environmental data on the Web, including CO2 emissions, waste and recycling volumes, and water pollution load 
  • Continued horseshoe crab release and conservation activities at an overseas subsidiary

*Energy conservation performance:

Business operators are classified according to their energy conservation results as Class S (superior energy conservation performance), Class A (average energy conservation performance), or Class B (energy conservation not progressing). Class S business operators are recognized on the Ministry of Economy, Trade, and Industry website as excellent business operators.

Monitoring Indicators
  • Energy use (crude oil equivalent calculated based on a unit energy consumption reference value) 
  • CO_{2} emissions
  • Status of renewable energy utilization efforts
  • Water pollution load (COD)
  • Status of efforts to reduce or eliminate use of animal-derived materials in products 
  • Status of biodiversity preservation activities

Key metrics and targets
  • CO_{2} Emission（Non-consolidated）
    ►46% reduction by 2030（Scope1+2, compared to FY2017）
    ►Pursuit of carbon neutrality by 2050
    ►Scope3 calculation（Disclose by 2025）

 

Results (Fiscal 2022)
Scope1&2：22,721 t (13％ reduction, compared to FY2017)

Scope3    ：52,626 t (Secondary data-based method)