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 the 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, which is an indicator of water scarcity (annual water use in an area divided by the annual amount of water available in that area), for our manufacturing plants and research institutes accounting for at least 95% of our total water withdrawals. As a result, none of our manufacturing plants or research institutes were assessed as being at "High" or "Extremely high” risk for water stress. In addition, we conducted desk research of drought history and water supply capacity margins in the municipalities where our manufacturing plants and research institutes are located, and confirmed that sufficient capacity exists in the regional water supply. Based on these results, we concluded that our manufacturing plants and research institutes are not exposed to any urgent risk of water shortages.

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 concluded that there is no urgent water shortage risk in the areas where our 5 manufacturing plants and research institutes are located, we establish company-wide annual water-related targets and implement initiatives to reduce water withdrawal. In addition, we develop water reduction plans for our four major water withdrawal sites—Fujiyama Plant, Yamaguchi Plant, Minase Research Institute, and Tsukuba Research Institute—and strive to promote the efficient use of water resources.

FY2025 Company-wide water targets and initiatives
Keep annual water withdrawal at or below the level of the previous fiscal year [Achieved] Employee awareness-raising initiatives on water conservation in conjunction with World Water Day (March 22) [Completed]
FY2025 Water withdrawal reduction plan
Fujiyama Plant	Reduction of water withdrawal through the optimization of pharmaceutical water system operations, etc.
Yamaguchi Plant	Reuse of condensate generated in piping during steam distribution from boilers to manufacturing processes Evaluation of water-saving effects through optimization of vial washing machine operations, etc.
Minase Research Institute	Evaluation of water-saving effects through replacement of air-conditioning humidifiers and spray nozzles, etc.
Tsukuba Research Institute	Evaluation of water-saving effects through reducing the number of operating boilers, etc.

In FY2025, at the Yamaguchi Plant, condensate generated by air-conditioning systems was reused as cooling water, and condensate produced in steam distribution pipelines supplying high-temperature steam to manufacturing processes was reused as boiler feedwater. Beginning in FY2026, the Fujiyama Plant plans to reuse blowdown water from its pharmaceutical water system, which had previously been discharged, as make-up water for cooling towers. Through these initiatives at both plants, approximately 8,000 m³ of water is expected to be recycled annually. 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 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 monitoring parameters, thereby controlling wastewater 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 manufacture of our 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 have established a water-related risk management system for our key suppliers one year ahead of our FY2026 target. Going forward, we will continue to promote the establishment of water-related risk management system among key suppliers throughout the ONO Group. 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 withdrawal in FY2025 was 186.0 thousand m³, a reduction of 16.8 thousand m³ (reduction rate: 8.3%) compared to FY2024. Furthermore, compared to the base year (FY2017), water withdrawal in FY2025 was reduced by 139.1 thousand m³ (reduction rate: 42.8%), indicating steady progress toward achieving our medium- to long-term environmental targets.
Specific initiatives to reduce water use have included improving the operation of equipment with high water use identified by installing flow meters at plants and research institutes (reviewing blowdown time in pharmaceutical water systems, optimization of the water levels and sterilization processes in pharmaceutical and injection water tanks, discontinuation of water spraying to air-cooling chillers, and changing the activation temperature settings for water spraying, etc.), reducing cooling water by recovering heat from hot wastewater tanks and high-temperature wastewater, upgrading to high-efficiency boilers, reusing condensate 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 use (water withdrawal)

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 and other relevant substances 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, WET tests were conducted at three sites: the Fujiyama Plant, Yamaguchi Plant, and Tsukuba Research Institute. Beginning in FY2025, WET tests were expanded to cover all of our manufacturing plants and research institutes (a total of five sites). We will continue to conduct WET tests on an annual basis and use the results to ensure the appropriate management of wastewater from our 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).

Review of medium- to long-term environmental targets

We are reviewing our medium- to long-term environmental targets, which currently cover Ono Pharmaceutical Co., Ltd. only. By FY2027, we aim to establish and publicly disclose global water-related targets applicable to the entire ONO Group.

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 five consecutive years (FY2021 to FY2025).