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Environment

Realization of a Decarbonized Society

リード文

ONO considers global warming and other climate changes to be a major threat to people's health and recognizes them as important issues that affect the continuity of our business activities. For these reasons, the Environment Management Committee, the activity of which covers the entire company, and the Climate Change Sub-Committee, which was established thereunder, take the initiative to engage in various activities to achieve a decarbonized society.

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Analysis and Evaluation of Risks and Opportunities related to Climate Change

Risks and opportunities related to climate change are investigated under the leadership of the Environment Management Committee and the TCFD Study Working Group. They identify, analyze, and evaluate risks and opportunities that may have an impact on business. For more details, please refer to our website on Information Disclosure Based on the TCFD Recommendation.

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Targets

Concerning emissions from our company (Scope 1+2) since FY2019, ONO has been working toward decarbonization by setting targets for FY2030 to reduce by 55% from FY2017 and to achieve zero emissions for FY2050 (approved by SBTi in October 2019 as a 1.5°C target; for more information, please visit here.)
In order to accelerate our efforts, in FY2023, we revised our medium- to long-term targets to achieve carbon-neutrality*1 for our company's emissions, and moved the target date for achieving zero emissions forward from FY2050 to FY2035.
In terms of energy, we will further increase our use of renewable energy sources (we joined RE100*2 in June 2020).

  • Carbon neutrality refers to virtually zero greenhouse gas emissions by offsetting with voluntary carbon credits.
  • An international initiative which aims to have companies utilize 100% renewable energy for electricity used in their operations
Greenhouse Gas Emissions
(Scope 1+2)
  • Achieve carbon neutrality by FY2025(virtually zero greenhouse gas emissions by offsetting with voluntary carbon credits)
  • Achieve zero greenhouse gas emissions by FY2035
Renewable Electricity Rate
  • Achieve 100% by FY2025
    1. Coverage: Electricity purchased by our manufacturing plants and research institutes
Greenhouse Gas Emissions
(Scope 3)
  • Reduce by 30% by FY2030
  • Reduce by 60% by FY2050
    1. Base year: FY2017
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Progress

As for the results of progress against the greenhouse gas emission reduction targets in FY 2022, our Scope 1+2 (on a market basis*) was reduced by 38.2% against the reduction target of 21.0% or more compared to FY2017 (FY2017: 29.8 kt-CO2, FY2022: 18.4kt-CO2). Meanwhile, our Scope 3 was reduced by 30.3% against the reduction target of 11.5% or more compared to FY2017 (FY2017: 75.1 kt-CO2, FY2021: 52.3kt-CO2). We achieved both targets. Regarding part of Scope 3 emissions (Category 1 and 9), figures were calculated based on the previous-year emissions because current-year data for our major business partners and pharmaceutical wholesalers had not been published at the time of calculation. Scope 1+2 greenhouse gas emissions do not include CO2 offsets from voluntary credits (for purchases of carbon-neutral city gas). Including the amount of CO2 offset by voluntary credits, Scope 1+2 greenhouse gas emissions will be reduced by 40.5% compared to FY2017 (FY2022: 17.7kt-CO2).
The renewable energy utilization ratio was 21.5% of total power consumption, achieving the FY2022 target of 21.0% or more.

  • GHG emissions calculated using the emission factors released by each electric power company

Greenhouse gas emissions (Scope 1+2)

graph
  • Covered Locations: Fujiyama Plant, Yamaguchi Plant (added from FY2018), Joto Pharmaceutical Product Development Center, Minase Research Institute, Fukui Research Institute, Tsukuba Research Institute, Head Office, sales offices and other offices, etc.
    GHG emissions are calculated using the following formula.
    GHG emissions = Purchased electricity × adjusted emission factor published by the electric company + Σ (Fuel consumption × Unit calorific value × Carbon emission factor × 44/12)+Σ (Fluorocarbon leakage amount x global warming potential)
    The amount of green electric power certified under the Green Energy Certificate, the amount of renewable energy certified under the J-Credit Scheme and the Non-Fossil Fuel Certificate quota are deducted.

Energy consumption

graph
  • Covered Locations: Fujiyama Plant, Yamaguchi Plant (added from FY2018), Joto Pharmaceutical Product Development Center, Minase Research Institute, Fukui Research Institute, Tsukuba Research Institute, Head Office, sales offices and other offices, etc.

Electricity consumption and renewable energy utilization rate

graph
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Initiatives

Creating a road map for reduction of GHG emissionsActions against TCFD risks

  • Creating a road map for reduction of GHG emissions
    In order to achieve our new medium- to long-term targets that we reviewed in FY2022, we created a GHG emission reduction road map, incorporating new technologies, etc. that are under development. We also identified social movements by participating in environment initiatives, such as GX League, etc., and engaging in dialogue with companies developing next-generation technologies, and we determined the time to introduce measures at each site.

Company-wide roadmap

figure
  • Discussion on GHG emissions reduction policy
    In FY2020, we reconfirmed our GHG emissions reduction policy based on factors, such as recent energy market trends, costs, and emission factor fluctuation forecasts, etc. Referring to the Greenhouse Gas Management (GHG) Hierarchy of IEMA, we raised the priority order of our measures was defined as promotion of energy-saving activities, installation of renewable energy facilities, procurement of carbon-neutral energy, and credit utilization. The roadmap above was established based on the reduction policy.
  • Source of IEMA's GHG Management Hierarchy: Institute of Environmental Management and Assessment (IEMA) Greenhouse Gas Management Hierarchy, first published in 2009 (updated 2020), www.iema.net

Priorities in ONO’s GHG emission reduction measures
(Source: Prepared by ONO based on materials from ENECHANGE Ltd.)

ReducePromotion of energy-saving activities

Green sustainable chemistry initiativesActions for TCFD opportunities

We have embraced the concept of Green Sustainable Chemistry (GSC) in order to work on the development of a more environmentally conscious manufacturing process for active pharmaceutical ingredients (APIs) from the research and development stage. The aim of the GSC concept is to minimize the environmental burden throughout the entire process, from the selection of materials to manufacturing and disposal. The concept has gradually become widespread in the pharmaceutical industry since the mid-2000s. In order to introduce the GSC concept, we established the GSC Working Group at each site in 2018 and have been working on the development of the manufacturing process for APIs while minimizing the waste from the development stage and utilizing Process Mass Intensity (PMI)* as an evaluation indicator for API manufacturing efficiency. This initiative has been recognized by TCFD analysis as one of the climate change-related opportunities.

  • PMI is calculated by dividing the total weight of raw materials and materials required for manufacturing APIs by the weight of the API that was manufactured.
Initiatives to introduce a continuous manufacturing systemActions for TCFD opportunities

The continuous manufacturing system is a production method in which raw materials are continuously charged to the manufacturing process and finished products are continuously discharge. Since compact devices are connected and automated, energy saving, production and resource efficiency are expected to be better than batch production system, which is the mainstream method in pharmaceutical manufacturing. We are changing one of the manufacturing processes, "wet granulation," from the batch method to the continuous method (see the following figure "Continuous manufacturing processes in which we are currently investigated"). We anticipate that doing so can reduce the raw materials required for development by approximately 13%* in weight. In the future, we will further expand the scope of applying this continuous manufacturing system in order to further reduce energy and raw material consumption. This initiative has also been recognized by TCFD analysis as one of the climate change-related opportunities.

  • A numerical value that compares the raw material reduction effect achieved from changing our company’s “wet granulation” process to a continuous one with general batch-type equipment.

Continuous manufacturing processes in which we are currently investigated

photo
Our continuous manufacturing facilities (Fujiyama Plant)
Power load leveling
  • Shifting and cutting the peak power usage from daytime hours to nighttime through the use of the nighttime heat storage system and cogeneration system
  • Protecting production line during occurrence of instantaneous voltage drop and shifting daytime peak power usage by using large-capacity power storage system (NAS battery system)
photo
Large-capacity power storage system (Yamaguchi Plant)
Participation in demand response

Demand response is positioned as an "optimization of electronic demand" under the Act on Rationalizing Energy Use and Shifting to Non-fossil Energy ("Revised Energy Conservation Act"). We have been striving to optimize the balance of demand and supply of electricity, in addition to electricity saving during regular time since FY2020 by saving and storing electricity (response) in response to the requests from power companies (demand).

Fluorocarbon management

In accordance with the Act on Rational Use and Proper Management of Fluorocarbons (Fluorocarbon Emissions Control Act), we conduct activities, such as the identification of equipment subject to the Act, simple inspections/periodic inspections, generation of records, and calculations/reporting of leakage, etc. In FY2022, the calculated leakage of fluorocarbons remained at a low level of 0.2 tons-CO2. We will continue to prevent leakage and promote the introduction of non-CFC (chlorofluorocarbon) and low-GWP (global-warming potential) equipment in view of the reduction of fluorocarbons emissions. At the same time, we promote the total abolition of devices using CFCs, which include ozone-depleting substances.

Introduction of energy-saving equipment
  • Replacing fluorescent lights with LEDs
  • Upgrading heat source facility to module-type heat pump chiller
  • Introduction of ultrahigh efficiency amorphous transformer with extremely low standby power
  • Introduction of low air volume (push/pull type), ultrahigh speed variable air volume (VAV) local ventilation device
  • Introduction of sterile isolator system that can limit the area subject to high-grade washing
Improvement of operation
  • Heat collected from high-temperature waste water to be used as heat source
  • Reviewing the operating hours and temperatures of the equipment
photo
Module-type heat pump chiller (Minase Research Institute)
photo
Low air volume (push/pull type), ultrahigh speed variable air volume (VAV) local ventilation device (exhaust fan output visualized on the operation panel) (Minase Research Institute)
Environment-friendly office design
  • When planning our new office in the US, we selected a building that received the LEED*1 Gold Certification. Meanwhile in Japan, our company-owned building in Tokyo has been certified as CASBEE® (Comprehensive Assessment System for Built Environment Efficiency)*2 Class S. We will further pursue an environment-friendly office design.
  • An environmental performance evaluation system for buildings and city environments operated by a non-profit organization, the U.S. Green Building Council (USGBC). It is called LEED, from the initial letters of Leadership in Energy and Environmental Design.
  • An evaluation and rating method using the environmental performance of buildings. The quality of buildings is evaluated in a comprehensive manner based not only on considerations for the environment including use of energy-saving and environment-friendly materials, but also on the comfort of the indoor environment and considerations for the surrounding landscape. A class S rating is the highest rating in this five-level rating system.

SubstituteIntroducing renewable energy

  • Introducing and operating solar power generation facilities: Head Office building (FY2003), Minase Research Institute (FY2015), Tokyo Building (FY2017)
photo
Solar panels (Minase Research Institute)
photo
Solar power monitoring system (Minase Research Institute)

SubstituteProcuring carbon-neutral energy

  • Purchasing electricity under a renewable energy-based electricity menu contract: Minase Research Institute (from FY2019), Yamaguchi Plant (from FY2022), Fujiyama Plant (from FY2023), and Tsukuba Research Institute (from FY023)
    Purchased electricity will be changed to 100% renewable energy from FY2023 at Fujiyama Plant, Yamaguchi Plant, and Tsukuba Research Institute.

CompensateCredit utilization

  • Purchasing Green Energy Certificates (from FY2018), J-Credits (from FY2019) and Non-Fossil Fuel Certificates (from FY2021)
    We are promoting the use of renewable energy by purchasing certificates for electricity generated by renewable energy (Green Energy Certificates) and J-Credits.

Green Energy CertificateGreen Energy Certificate

  • Introducing carbon neutral city gas: Tsukuba Research Institute (from FY2021), Joto Pharmaceutical Product Development Center (from FY2021), and Yamaguchi Plant (from FY2023)
    Carbon-neutral city gas is a type of city gas that utilizes carbon neutral LNG, or liquefied natural gas (LNG) which offsets greenhouse gases generated in the processes from the extraction to the burning of natural gas with CO2 credits (carbon offset) and assumes that no CO2 is generated on a global scale even if it is burnt. The credits are issued by highly reliable international organizations and consist of projects that meet the procurement requirements, quality standards, etc. of the companies that adopt them. These procurement requirements, quality standards, etc., include points such as no significantly adverse effects on the region or ecosystem (in the case of forest projects, avoiding logging and deforestation).

Certificate of Carbon Neutral City Gas SupplyCertificate of Carbon Neutral City Gas Supply

(Source: Created by ONO with reference to materials from Toko Electrical Construction Co., Ltd.)

Carbon pricing

We have incorporated carbon pricing* into our environment-related investment decisions. We use the carbon pricing to raise the priority of decarbonization investment.

  • To price greenhouse gas emissions from facilities and to reflect it in management decisions in order to promote activities towards decarbonization.

External evaluation of our climate change-related effortsActions for TCFD opportunities

  • In the survey conducted CDP, a global environmental non-profit organization, on climate change, we were selected as an A-List company, the highest rating, for four consecutive years (in FY2018-FY2022).
  • We won an award in the Activity Implementation and Promotion category of the Minister of the Environment’s 2019 Commendation for Global Warming Prevention Activity (the Ministry of the Environment).
  • The Minase Research Institute received the Osaka Governor's Award of the Osaka Stop Global Warming Award for FY2020.
  • Our offices in Osaka won the Osaka Governor’s Award for Climate Change Measures for FY2020.
  • Under the Act on Rationalizing Energy Use and Shifting to Non-fossil Energy ("Revised Energy Conservation Act"), we have received the highest S rank for eight consecutive years in corporate energy conservation excellence (FY2015-FY2022).
  • In FY2019 we were introduced in a collection of case studies on energy efficiency & conservation (published by the Kansai Bureau of Economy, Trade and Industry) as among specified businesses who have remarkable achievements in various aspects of energy conservation.

External activities for expanding the introduction of renewable energyActions for TCFD opportunities

Our basic stance is to communicate and engage in constructive dialogue with all stakeholders, including patients, healthcare professionals, shareholders and investors, business partners, local communities, employees, and related government and industry groups. In particular, in order to accelerate the reduction of GHG emissions, it is important to cooperate with other companies to encourage the government to expand the introduction of renewable energy. In March 2021, RE100, with the cooperation of the Japan Climate Leaders’ Partnership (JCLP)*, supported a letter to the Japanese government calling for the expansion of renewable energy introduction, together with 52 companies in Japan and overseas (JCLP*, March 2021 news). We believe that if such inter-company collaboration can reduce renewable energy costs and lead to an expansion of the way in which renewable energy is obtained, it will be easier for companies to utilize renewable energy and contribute to the reduction of GHG emissions in society as a whole.

  • JCLP supports the participation and activities of Japanese companies as an official regional partner of RE100.
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GHG Emissions in the Supply Chain (Scope 3)Actions against TCFD risks

GHG emissions in our supply chain (Scope 3) have been divided into 15 categories under the Ministry of the Environment’s guidelines, and calculated for our sites in Japan since FY2014. Together with our business partners in the supply chain, we are strengthening our sustainability-related activities, such as the natural environment, human rights and the labor environment (click here for details). In January 2023, we started joint transportation of ethical pharmaceuticals in Japan and also started to engage in CO2 emission reduction by making transportation more efficient (click here for more details).

Category FY2021 emissions
(kt-CO2)
FY2022
emissions
(kt-CO2)
Calculation method Notes
C1 Purchased goods and services 13.8 - Multiplying GHG emissions (Scope 1, 2) of our suppliers for raw materials and materials (accounting for 80% or more of our raw materials or materials purchase costs) by the ratio of the sales to ONO out of the total sales of the suppliers. Concerning ratios for other suppliers, on the assumption that the same trend as major suppliers, calculate by using the ratio of GHG emissions to the transaction amount at major suppliers. This category is closely associated with our business activities since active pharmaceutical ingredients for manufacturing of pharmaceuticals, intermediate products and research reagents are included.
・It covers production and research sites.
・Figures for FY2022 are not calculated because our major suppliers had not published their CSR reports at the time of calculation.
C2 Capital goods 26.4 21.3 Multiplying the amount of capital goods treated as fixed assets (facility reinforcement, maintenance, and investment) excluding land, by the factor. Calculate based on capital goods treated as fixed assets. The fixed assets used in this calculation are essential for business activities.
C3 Fuel- and energy-related activities that are not included in scope 1 or 2 2.4 2.1 Multiplying the amount of purchased non-renewable electricity, by the emission factor. -
C4 Upstream transportation and distribution 0.1 0.1 Multiplying the transportation data from our production site and logistic centers to the destination, by the emission factor. -
C5 Waste generated in operations 0.3 0.3 Multiplying weight of each type of waste generated, by the emission factor. -
C6 Business trip 0.5 1.3 Multiplying business trip allowances, by the emission factor. It covers travels by airplane or Shinkansen bullet train.
C7 Employee commuting 0.7 0.7 Multiplying employees’ commuting costs, by the emission factor. -
C8 Upstream leased assets 2.1 1.9 Multiplying fuel consumption used in leased vehicles, by the emission factor. -
C9 Downstream transportation and distribution 5.5 - Multiplying CO2 emissions of our major pharmaceutical wholesalers, by percentage of our net sales included in all net sales of major pharmaceutical wholesalers. Transportation and distribution are important business activities to control distribution of pharmaceuticals and to ensure their stable supply.
Concerning GHG emissions in FY2022, data of major pharmaceutical wholesalers have not been disclosed at the time of calculation. Therefore, they are not calculated.
C10 Processing of sold products N/A N/A - We sell only finished products.
C11 Use of sold products N/A N/A - No energy is consumed during the use of our products due to characteristics of pharmaceuticals.
C12 Discarding sold products 0.1 0.2 Multiplying weight of each material of containers and packages of sold products, by the emission factor. -
C13 Downstream leased assets 0.3 0.3 Multiplying floor space of assets (buildings) leased and owned by us for each use, by the emission factor. -
C14 Franchises N/A N/A - We do not operate franchised stores.
C15 Investments N/A N/A - There is no investment involving large amounts of greenhouse gas emissions.
Total 52.3 - - Concerning GHG emissions in FY2022, data of major suppliers and pharmaceutical wholesalers have not been disclosed at the time of calculation. Therefore, they are not calculated.
  • The emission factors used for calculation are figures stated in the "Emission Factor Database on Accounting for Greenhouse Gas Emissions throughout the Supply Chain (FY2021, Ver. 3.2; FY2022, Ver. 3.3)," published by the Ministry of the Environment, Government of Japan.
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