Water is an important resource for maintaining people's lives and health. Good quality water is essential for us to create innovative pharmaceuticals and ensure stable supply of these pharmaceuticals to patients. We are committed to minimizing the negative impacts of our operations on the global environment and achieving a sustainable water recycling society through efficient use of water, appropriately wastewater management, and enhanced stakeholder engagement.

As for water risks, the Environmental Management Committee and the Nature Positive Subcommittee (previously: Water Subcommittee) take the lead in identifying the risks that are considered to have negative impacts on our business and in considering countermeasures to mitigate those risks.
In addition, in FY2024 we reviewed water-related risks and disclosed information in line with the recommendations of the Task Force on Nature-related Financial Disclosures (TNFD). For more details, please see the page of our website titled “Information disclosure based on the TNFD recommendations.”

Major risks and measures

1. Water shortage risk

Risk assessment

Using the World Resources Institute's Water Risk Assessment Tool (Aqueduct), we assessed water stress, an indicator of water shortage (annual water use in an area divided by the annual amount of water available in that area) for our manufacturing plants and research institutes that are utilizing at least 95% of our total water withdrawals. As a result, none of the manufacturing plants or research institutes were determined to be at "High risk" or "Extremely high risk" for water stress. In addition, we conducted desk research and interviews with local municipalities concerning drought history, ratio of water resources to spare (an indicator showing the leeway of water sources), etc. in the areas where our manufacturing plants and research institutes are located. Since there have been no restrictions on water intake due to drought for the past decade or more and the local municipalities have sufficient water supplies, we assessed that there is no urgent water scarcity risk at our manufacturing plants or research institutes.

Results of the risk assessment for water stress in our manufacturing plants and research institutes（Aqueduct）

Water stress	Sites
Low to medium risk	Yamaguchi Plant, Joto Pharmaceutical Product Development Center, Minase Research Institute
Medium to high risk	Fujiyama Plant, Tsukuba Research Institute
High or extremely high risk	Not applicable

Measures

Although we assessed that there is no urgent water shortage risk in the areas where our 5 manufacturing plants and research institutes are located, we are committed to reducing water consumption through efficient use of water. For our 5 manufacturing plants and research institutes, we develop an annual plan to reduce water consumption. In addition to efficient operation of pharmaceutical water and water for injection facilities and reduction of cooling water for boiler wastewater, we have installed ultrasonic flow meters in the water supply piping of facilities that were not targeted for reductions, and are narrowing down the next reduction target based on an understanding of the breakdown. We are also promoting initiatives for the efficient use of water, including the reuse of air conditioning condensate and cooling water. As a result of these efforts, our water intake in FY2024 has been reduced by 37.6% compared to base year (FY2017). As another part of our effort to realize a water recycling society, we also educate our employees on water conservation. We will continue to work with our employees to improve the efficiency of water use and promote measures that will lead to the conservation of the region's abundant water resources.

2. Water pollution risk

Risk assessment

Raw materials and chemical substances such as intermediates and active ingredients of development compounds and of pharmaceuticals that are used in pharmaceutical research and manufacturing processes have the risk of causing adverse impacts on human health and ecosystems. If water pollution and resulting harm is caused by our business activities, there may be serious impacts on stakeholders in the region and great impacts on our business.
For substances for which the hazard profiles are known and controlled under laws and regulations, we assess their risks by monitoring concentrations in wastewater from our manufacturing plants and research institutes. In addition, for chemical substances with unknown environmental hazards, such as synthetic intermediates and active ingredients of products under development and of pharmaceuticals, we assess their risks using their effects on aquatic organisms as indicators.

Measures

We continuously to strive to reduce the use of harmful substances at our manufacturing plants and research institutes. For substances controlled by laws and regulations, we not only comply with the permissible limits on wastewater as set in the laws and regulations, but also set standard values based on agreements with local governments or voluntary standard values for some chemical substances, thereby controlling discharged water with stricter control values than those set in the laws and regulations. In July 2024, to further strengthen these operations, we established voluntary control targets for hazardous chemical substances that are 10 times stricter than the legal limit (1/10 concentration of the legal permissible limit), and commenced control. In addition, for substances with unknown hazard profiles such as active ingredients of development compounds and of pharmaceuticals, we predict environmental hazard using in silico quantitative structure-activity relationship (QSAR) analysis. We are continuing to establish a risk assessment system for active ingredients of development compounds and of pharmaceuticals.

3. Water-related risks at our business partners

Risk assessment

We assessed water dependencies and impacts of our business partners in line with TNFD recommendations. For all suppliers related to our manufacture of pharmaceuticals, we assessed the water stress and flood risk using Aqueduct and WWF Water Risk Filter. For the suppliers that are critical to our business continuity, we also assessed pollution risks derived from discharged water, etc. by searching the status of their environmental management system certification and the presence or absence of past serious environmental accidents or violations.

Measures

To reduce water-related risks, we aim to establish a water-related risk management system for business partners that are critical to our business continuity by FY2026. For those business partners that are critical to our business continuity for which concerns about water-related risks were raised in the above risk assessment, we will ascertain the details of the water-related risks associated with their business activities using the EcoVadis sustainability assessment system and/or through interviews. In any case in which serious water-related risks are identified in the activities of the business partners, we will conduct an on-site audit and request corrective actions.

The total water intake amount in FY2024 was 202.8 thousand m³, an increase of13.2 thousand m³ reduction (increase rate: 7.0%) compared to FY2023. The main factors for the increase were the renewal of pharmaceutical water production equipment at the Fujiyama Plant and the use of water spraying to prevent dust dispersion during the demolition of the dai-4 research building at the Minase Research Institute. On the other hand, compared to the base year (FY2017), water intake in FY2024 was reduced by 122.3 thousand m³ (reduction rate: 37.6%), indicating steady progress in reducing water usage toward achieving our medium- to long-term environmental targets.

Specific initiatives to reduce water consumption have included improving the operation of equipment with high water consumption identified by installing ultrasonic flow meters at factories and research institutes (such as reviewing the water levels and optimizing sterilization processes in pharmaceutical and injection water tanks, stopping the spraying of water on air-cooling chillers and total heat exchangers, and changing the activation temperature settings for water spraying), reducing cooling water by recovering heat from hot wastewater tanks and high-temperature wastewater, upgrading to high-efficiency boilers, reusing condensate and cooling water from air conditioning systems, and conducting regular leak inspections. In addition, as a company-wide initiative, we have established a subcommittee on water to discuss new initiatives at each site to reduce water usage and to promote activities that raise employees’ awareness of water conservation.

Water intake (water resource consumption)

Water discharge

• Sites where data on water intake and water discharge were collected from ONO Pharmaceutical Co., Ltd. (non-consolidated): Fujiyama Plant, Joto Pharmaceutical Product Development Center, Yamaguchi Plant (added from FY2018), Minase Research Institute, Fukui Research Institute (closed at the end of March 2022 due to the reorganization of research bases), Tsukuba Research Institute, and Headquarters and other Japan offices/sites.

Activities to mitigate water quality pollution risk

There is growing public concern about the ecosystem impacts of active pharmaceutical ingredients released into the environment. We are taking measures to prevent the release of active pharmaceutical ingredients, etc. into the environment during the manufacturing process of pharmaceuticals. For more details, please see the page of our website titled “Biodiversity.” Since FY2022, we have been conducting Whole Effluent Toxicity (WET) tests annually at our Fujiyama Plant, which is our major production center. In FY2024, the scope of WET tests was expanded to include the Yamaguchi Plant and the Tsukuba Research Institute, and we confirmed that there were no harmful effects on aquatic organism in the wastewater from the three facilities. By FY2025, we will establish a system to conduct WET tests annually at all our manufacturing plants and research institutes.
For active ingredients of development compounds and of pharmaceuticals, we will not only predict environmental hazards using in silico quantitative structure-activity relationship (QSAR) analysis but will also evaluate the effects on aquatic organisms, and these results will be disclosed through safety data sheets (SDS).

Cost for mitigating water-related risks

In FY2024, capital investment and facility maintenance costs (excluding personnel expenses) for preventing flooding caused by heavy rain and water pollution were 16 million yen and 87 million yen, respectively.

In the Water Security survey conducted by CDP, a global environmental non-profit organization, we have been selected “A List” company, the highest rating, for four consecutive years (FY2021 to FY2024).