Six Material Issues

In order to develop a sustainable society and enhance corporate value, Seikagaku Corporation has identified six material issues that should be addressed with priority based on the importance to us and the expectations of society, including our diverse stakeholders. Through promoting these material issues, we will contribute to achieving the Sustainable Development Goals (SDGs) adopted by the United Nations.

Material Issue Identification Process

Step1: Identify and organize social issues

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

Step 2: Prioritize social issues

Using the list of 39 social issues identified in Step 1, we assessed the importance to Seikagaku based on our Corporate Philosophy, management strategies, and financial situation. 
Also, external consultants scored, analyzed, and organized the issues from perspectives of diverse stakeholders to evaluate the expectations of society. Based on the results, we prepared a social issues assessment matrix and shortlisted 17 top-priority social issues to both us and society.

The Social Issues Assessment Matrix

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

To validate the social issues assessment matrix prepared in Step 2, discussions and examinations were held with relevant internal departments and external consultants. We have identified six material issues (six materialities) by categorizing 17 social issues of top priority for both society and us. For each of the material issues identified, the Board of Directors discussed and approved the reasons for selection, future vision, objectives, initiatives, and monitoring indicators, and organized and confirmed their relevance to SDGs.

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, our 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. We plan to monitor our activities for a certain period of time and establish appropriate KPIs for each item.
Notes:
Figures are on a non-consolidated basis unless otherwise noted.
The material issues were approved by the Board of Directors in December 2021.

 

1. Creation of truly useful pharmaceuticals and medical devices

Reason for Selection and Future Vision

Creating pharmaceuticals and other products leveraging our knowledge of glycoscience and contributing to medical care around the world is the foundation for our sustainable growth.

Investing profits generated from new drugs into R&D, we strive to enhance our value to society and contribute to the health and well-being of people around the world through the continuous creation of pharmaceuticals.

In addition, we place intellectual property as one of our important management resources and implement a global intellectual property strategy for the continuous creation of pharmaceuticals and other products.

Objectives

We continuously create useful pharmaceuticals and other products by utilizing our 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 our proprietary technologies and accelerate new drug development by combining with academic research seeds and/or external technologies.
  4. Acquire and maintain intellectual properties that help strengthen our competitiveness and conduct freedom to operate searches.

Results (Fiscal 2024)

  • Received support for application and Complete Response Notification from U.S. advisory committee for SI-6603. Commenced response for re-submission of application
  • MucoUp received regulatory approval in China
  • Phase III clinical studies for Gel-One commenced in Japan
  • Created new research themes in disease areas with high unmet medical needs
  • Commenced new collaborations as we strive to utilize early-stage research seeds

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 (Japan and overseas)
  • Progress with freedom to operate 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 other products is an important duty of a pharmaceutical company.

We will strengthen our quality assurance and production systems to ensure uninterrupted access to reliable pharmaceuticals and other products for patients and medical institutions. 

We are also fully committed to managing risks associated with raw material procurement and taking preventive action against such risks.

Objectives

  • Manufacture and stably supply pharmaceuticals and other products of guaranteed quality by maintaining the quality management system compliant with global standards.
  • Ensure a continuous supply of pharmaceuticals and other products through rigorous management of associated with raw material procurement and product supply.

Initiatives

  1. Engage in continuous GMP compliance activities (compliance with the GMP Ministerial Ordinance, manufacturing and marketing approval matters).  
  2. Foster a quality culture to ensure a stable supply of pharmaceuticals and other products of guaranteed quality.
  3. Enhance optimal inventory control of raw materials and products as well as preventive maintenance activities aimed at uninterrupted production.

Results (Fiscal 2024)

  • Conducted 18 audits (paper and on-site) of contract manufacturers, suppliers, and distributors
  • Underwent regular audits by authorities in Japan and abroad. No serious issues noted. Made improvements to minor issues and guidance items
  • Confirmed alignment with GMP and fostering of a quality culture through regular management reviews
  • Established quantitative performance indicators unique to each plant to assess the fostering of a quality culture
  • Continued with system building to achieve more sophisticated inventory control

Monitoring Indicators

  • Progress with management reviews
  • Progress with audits and audit responses
  • Progress with fostering a quality culture
  • Status of inventory availability based on production schedules
  • Status of maintenance for quality assurance and stable production
  • Progress with maintaining 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 other products that address unmet medical needs is the mission of a pharmaceutical company. 

It is a mission of a pharmaceutical company to promote responsible use of pharmaceuticals and other products that address unmet medical needs to a greater number of patients. 

We are forging ahead with global expansion of pharmaceuticals and other products meeting medical needs. As a pharmaceutical manufacturer, we also strive to enhance information provision to expand appropriate recognition of the safety and efficacy of our pharmaceuticals and medical devices and of the diseases that our products treat.

Objectives

  • Provide pharmaceuticals and medical devices with high efficacy and safety to a greater number of patients.
  • Appropriately provide information about the safety and efficacy of pharmaceuticals and medical devices as well as promoting their proper use.

Initiatives

  1. Cooperate with sales partners to raise market awareness of existing products.
  2. Accelerate global expansion of existing products and products in development.
  3. Upgrade products in line 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 informationprovision to the media.
  6. We contribute to the advancement of glycoscience by providing information through our Glycoforum website.
  7. Comply with post-marketing safety management standards, and gather, evaluate, and provide safety management information promptly and properly.

Results (Fiscal 2024)

  • Upgraded package inserts and risk management plans for pharmaceuticals based on safety information that was collected and evaluated
  • Built pharmacovigilance system following launch of new drugs and changes in sales partners
  • Regularly conducted trainings for employees in charge of pharmacovigilance based on annual plan
  • Published five research papers and gave four academic presentations as part of evidence generation leading to drug fostering and evolution
  • Built new evidence with ten joint-research collaborations related to drug fostering and evolution
  • Held seminars and briefings in cooperation with sales partners (11 co-sponsored seminars in Japan)
  • Updated disease awareness websites for sharing information to inform physicians and educate the public about diseases

Monitoring Indicators

  • Number of products shipped (pharmaceuticals and medical devices)
  • Status of product improvement 
  • Activities for providing information to improve product value 
  • Number of views for disease awareness websites
  • Hosting of media seminars, etc.
  • Progress with educating about 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, pharmaceutical companies are required to have a higher sense of ethics and must comply with pharmaceutical industry guidelines and standards.

Seikagaku is managed to ensure that each individual employee not only complies with laws and regulations but also acts with high ethical standards. 

Additionally, business operations meeting society’s expectations are essential for sustainable corporate growth and enhancement in corporate value over the medium and long term. We are continuously working to develop a highly effective corporate governance system.

Objectives

  • All directors, officers, and employees follow the compliance program and act with strong compliance awareness.
  • Develop an optimal corporate governance system in order to engage in decision making that is transparent and fair as well as 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 internal and external consultation/whistleblowing channels and appropriately respond to any issues raised. 
  3. We will conduct appropriate product promotion and information provision activities.
  4. Monitor the status of corporate governance by the Board and review the corporate governance system periodically.
  5. Enhance provision of information to Outside Directors and Outside Audit & Supervisory Board Members; promote improvement activities based on the results of the effectiveness evaluations of the Board.

Results (Fiscal 2024)

  • Expanded SKK Group Compliance Code of Conduct to overseas subsidiaries
  • Conducted code of conduct training and awareness surveys (once annually) to foster an awareness of compliance
  • Conducted in-person training and e-learning for compliance (anti-bribery, copyrights) 
  • Conducted internal audits to check compliance with anti-corruption and anti-bribery measures
  • Implemented 25 in-house education training sessions concerning the Promotion Code, Fair Competition Code, and Ministry of Health, Labor and Welfare notifications
  • Assessed promotional materials and monitored information provision activities in order to engage in appropriate product promotion and information provision activities
  • Outside directors continued to discuss initiatives for human capital management
  • Conducted evaluations of the effectiveness of the Board of Directors using an external organization

Monitoring Indicators

  • Progress with compliance education
  • Usage of whistleblowing channel consultation and reporting desks
  • Operational status of internal control systems
  • Corporate Governance Code compliance 
  • Information provision to outside directors
  • Evaluations of the effectiveness of the Board of Directors and improvements activities

Key Metrics and Targets

  • Appropriate response to the Corporate Governance Code
  • Evaluations of the effectiveness of the Board of Directors by all Board members and auditors, and its verification by outside directors

►Annual evaluation and verification


Results (Fiscal 2024)

  • Maintained proper running of Board and other meetings as well as the internal control system for various committees
  • Conducted first evaluation of the effectiveness of the Board of Directors using a third-party organization

5. Promotion of diversity and development of diverse human resources

Reason for Selection and Future Vision

The foundation for corporate growth is human resource management that secures and develops diverse human resources who prove valuable in business activities and that promotes their advancement.

We consider human resources to be an important corporate asset and develop human resources capable of creating new value. 

We are also supporting all employees with the environment, systems, and frameworks where they can fully demonstrate their capabilities, in order that their advancement becomes the driving force for our sustainable growth.

Objectives

  • Develop and retain autonomous employees who are able to achieve results proactively with a sense of passion and pride while improving their skills and building their careers.

Initiatives

  1. In order to pursue the medium/long-term well-being of each individual employee, we continuously review various human resources systems and improve compensation.

  2. We conduct planned recruitment activities bearing in mind diversity as well as deploy employees to ensure such diversity fully contributes to business activities.

  3. Enhance structured education curriculum, implement training that take job rotation into consideration, and provide career formation support in order to foster autonomous employees.

  4. Promote work style reform and measures to improve work-life balance.
  5. Enhance mental health care measures and health promotion activities in order to appropriately manage and promote employees’ physical and mental health.

Results (Fiscal 2024)

  • Conducted an employee engagement survey (once annually)
  • Revised re-employment system to lift motivation of senior workers and re-employed workers
  • Conducted townhall meetings as opportunities for internal exchanges to have employees comprehend the significance of working for the Company and improving their drive to contribute
  • Implemented guidelines for inter-work intervals to improve the work-life balance of plant employees and to strengthen safety
  • Provided improved care in light of once-annual stress check results as part of efforts to promote employee health
  • Entered into insurance for all employees for support for the three major diseases in order to assist with balancing medical treatment and work

Monitoring Indicators

  • Changes to HR systems
  • Percentages of women hired/currently employed
  • Serving in managerial positions
  • Percentages of mid-career employees hired/currently employed/serving in managerial positions
  • 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 work style reforms and initiatives to improve work-life balance
  • Average number of days of paid leave taken
  • Average monthly overtime hours number of overtime hours per month
  • Number of employees taking childcare and nursing care leave (men and women, including contract employees) 
  • Percentage of workers returning to work after childcare leave
  • Implementation status of mental health care measures, etc.

Key Metrics and Targets

  • Percentage of women recruits

  ►Targeting 50%, annually

  • Percentage of women in managerial positions

  ►Targeting at least 25% by end-March 2026

  • Percentage of mid-career recruits

  ►Targeting 50%, annually

  • Number of career training courses

  ►Targeting 15 or more per year
 

Results (Fiscal 2024)

  • Percentage of female recruits: 23.4%
  • Percentage of women in managerial positions: 17.2%
  • Percentage of mid-career recruits: 85.6%
  • Number of career training courses: 24

6. Engagement in environmentally friendly corporate activities

Reason for Selection and Future Vision

The impacts of global warming and other environmental problems are apparent, and measures to protect the environment and preserve biodiversity have become a top priority for society. 
Responding to these problems is one of the business challenges that relates not only to risk reduction but also to profit opportunities.

As a member of society, we aim to maintain a balance between environmental protection and business growth and engage in business activities with a low environmental footprint, on top of complying with environmental laws and regulations.

Objectives

  • Contribute to the realization of a sustainable society by implementing measures for reducing environmental impact and climate change, and preserving biodiversity in our business activities.

Initiatives

  1. Implement effective measures for energy use reduction.
  2. Convert to energy sources that lead to CO2 emissions reduction.
  3. Mitigate water pollution load by introducing equipment with low environmental impact for water preparation for manufacturing and for wastewater treatment.
  4. Undertake biodiversity preservation activities, including a shift to non-animal-based products.

Results (Fiscal 2024)

  • Installed parking-lot mega-solar power generation facilities at Takahagi Plant
  • Achieved continuous reduction in energy use (five-year average energy consumption rate of 98.9% / energy conservation evaluation: Class S)
  • Achieved a reduction in CO2 emissions (60.4% reduction from the previous year)
  • Procured CO2-free electricity at four sites in Japan
  • Continued horseshoe crab release and conservation activities at an overseas subsidiary
  • Conducted first analysis in line with TNFD framework (biodiversity, water)

Monitoring Indicators

  • Energy use (crude oil equivalent) 
  • CO2 emissions
  • Progress with using renewable energy 
  • Water pollution load (COD)
  • Progress with shift to non-animal origin products 
  • Progress with biodiversity preservation activities

Key Metrics and Targets

  • CO2 emissions (Non-consolidated)
    ►46% reduction by 2030(Scope 1and2 compared to FY2017)
    ►Aim to be carbon neutral by 2050
    ►Scope 3 calculations(disclose figures by 2025)

 
Results (Fiscal 2024)
Scope 1 and 2:8,471 t (68% reduction compared to FY2017, market-based method)
Scope 3:under calculation