Governance

• This structure is as of August 2025.

We recognize the conservation of the global environment, including biodiversity, as one of our important management issues (materiality). Led by our Representative Director, President & COO as Chief Environmental Management Officer and Representative Director, Executive Vice President as Executive Director in Charge of the Environment, we are working to achieve our medium- to long-term environmental targets under our medium- to long-term environmental vision, “ECO VISION 2050.”
The assessment of the dependences and impacts on nature and the identification and management of risks and opportunities are reviewed by the TNFD Working Group (TNFD-WG) and reported to the Environment Management Committee which is chaired by the Executive Director in Charge of the Environment. Subsequently, these matters are proposed to the Sustainability Strategy Meeting also chaired by the Executive Director in Charge of the Environment. The identified nature-related risks and opportunities, and their countermeasures are reported or proposed to the Management Meeting, which is attended by senior management and others. The matters reported or approved by these senior meetings are reported to the Board of Directors at least once every half year for its management and supervision.
In this way, biodiversity initiatives are consistently overseen from the field level by the Executive Director in Charge of the Environment, under the supervision of the Board of Directors. Please refer to the “Governance” section of the "Information Disclosure Based on the TCFD Recommendations" for the roles of each committee.

In July 2020, we established the Ono Group Human Rights Global Policy (revised in June 2023) based on the “United Nations (UN) Guiding Principles on Business and Human Rights” to ensure that we understand and respect the human rights, diverse values, personalities, and individuality of all stakeholders, including indigenous peoples and local communities, in all our business activities, both in Japan and abroad, and that we act accordingly. Furthermore, we established a system of human rights due diligence in accordance with the “the UN Guiding Principles on Business and Human Rights” to identify, prevent, and mitigate any adverse human rights impact that we may have on our stakeholders. In the process of advancing our human rights initiatives, we engage in sincere dialogue and consultation with our stakeholders.
For initiatives for human rights, please click here.

Strategy
- Analysis and evaluation of risks and opportunities related to biodiversity -

In line with the LEAP approach* recommended by the TNFD, the TNFD-WG took the lead in assessing the dependences and impacts of our business activities on nature, identifying risks/opportunities, and considering countermeasures.

• The LEAP approach is a systematic approach to assessing nature-related risks and opportunities and consists of four phases: Locate, Evaluate, Assess, and Prepare.

First, to understand how our business depends on and affects natural capital such as biodiversity, we assessed the dependences and impacts of our pharmaceutical business on nature, referring to the recommendations of the TNFD and the "Business and Biodiversity Interrelationship Map" developed by the Japan Business Initiative for Biodiversity (JBIB).

In FY2024, as in the previous fiscal year, we assessed the dependences and impacts of our business activities on nature in each of the processes of “raw material procurement,” (upstream value chains), “research and manufacturing” (direct operations), and “transportation and sales” (downstream value chains) in accordance with the procedures described below. Based on the assessment results, we identified risks and opportunities, and considered countermeasures.

Assessing the dependences and impacts of our business activities on nature, identifying risks and opportunities based on the assessment results, and considering countermeasures

Assessment procedureWe identified nature-related risks and opportunities in our business activities in accordance with STEPs 1 through 4, below.

STEP1:

Assessment of the dependences and impacts on nature, which is of high importance to the pharmaceutical business, using ENCORE*

• ENCORE (Exploring Natural Capital Opportunities, Risks and Exposure) is a tool to assess dependence and impact of individual sectors on natural capital (https://encorenature.org/en).

STEP2:

Comprehensive assessment of water-related risk (water stress and flood risk) and biodiversity risk
Targets: Upstream value chains (179 companies, 202 sites), direct operations (13 groups, 90 sites), downstream value chains (63 companies, 118 sites)

Criteria for assessing as “at risk”

• Water-related risk:
  We use the water risk assessment tool “Aqueduct*¹” to assess the water stress (baseline/2050 [Pessimistic scenario, RCP 8.5]) and flood risk (river/coastal) for each site. Sites where any of these values are rated “High” or higher are confirmed for water-related risks using the WWF Water Risk Filter*².
• Biodiversity risk:
  The WWF Biodiversity Risk Filter*² is used to assess “Protect/Conserved Area” and “Key Biodiversity Area” for each site. In addition, TNFD-IBAT*³ is used to assess each site's "Indicators for Species Threat Reduction and Recovery (Resolution: 5 km, classified into 5 layers). Sites rated 4 or higher in the former 5-layer scale, or 3 or higher in the latter scale, were considered at risk.

• Aqueduct is an assessment tool developed by the World Resources Institute (WRI) that can identify global water risks based on location information (latitudes and longitudes) of business establishments (https://www.wri.org/aqueduct).
• WWF Water Risk Filter and WWF Biodiversity Risk Filter are assessment tools for water risks and biodiversity risks developed by World Wide Fund for Nature (https://riskfilter.org/).
• TNFD-IBAT is an assessment tool published in collaboration with TNFD and the Integrated Biodiversity Assessment Tool (IBAT) Alliance that can identify biodiversity risks (https://tnfd.global/guidance/locate-assessment-tools/).

STEP3:

Identification of sites (priority locations) that are critical to our business continuity where there is concern about serious dependences and/or impacts on nature
For sites assessed as being at risk of water stress and/or flooding in STEP 2, we check the amount of water intake/water consumption by water source and/or whether there has been flood damage in the past, respectively, through desk surveys. In addition, when it comes to business partners involved in the manufacture of pharmaceuticals (71 companies, 79 sites), we conduct desk surveys to clarify environmental pollution risks while taking into account factors such as the chemical substances handled by searching for whether they have acquired an environmental management system (EMS) and whether they have had any past environmental accidents or violations. For sites assessed as being at risk of biodiversity in STEP 2, we check whether there are any protected areas in the surrounding area (within a 10-km radius). Even when it comes to our directly operated sites, we assess whether there are any protected areas in the surrounding area (within a 10-km radius), and we also evaluate the risk of environmental pollution due to our business activities. Based on the above assessments, we identify sensitive locations on nature, and determined priority locations where a significant dependence or impact on nature is a concern, including in relation to our business activities.

STEP4:

Identification of risks and opportunities, and consideration of countermeasures

Assessment results

Based on the results of the assessments in STEPs 1 through 3, we identified 4 sites in direct operations and 4 sites in upstream value chains as priority locations that are critical to our business and have concerns about serious dependences and impacts on nature.

Our priority locations that are critical to our business and have concerns about serious dependences and impacts on nature, identified in accordance with STEPs 1 through 3
NA: Not applicable

Value chains	Site	Country	Factors for determining that the site is a sensitive location	Relationship with our business
Direct operation	Fujiyama Plant	Japan	Areas important for biodiversity Risk of ecosystem destruction due to pollution	Our main manufacturing plant
	Yamaguchi Plant		Risk of ecosystem destruction due to pollution	Our main manufacturing plant
	Minase Research Institute		Risk of ecosystem destruction due to pollution	Our main research institute
	Deciphera Research Office	USA	Areas important for biodiversity	Our main research institute
Upstream	Supplier 1	China	Areas for flood risk	A supplier of pharmaceutical raw materials
	Supplier 2	India	Areas for water shortage and flood risks	A supplier of pharmaceutical raw materials
	Supplier 3	USA	Areas important for biodiversity	A supplier of pharmaceutical raw materials
	Supplier 4	USA	Areas important for biodiversity Risk of ecosystem destruction due to pollution	A supplier of pharmaceutical raw materials

In STEP 4, for the identified priority locations, we reconfirmed the interface with nature, and consider possible nature-related risks. After comprehensively identifying nature-related risks and opportunities based on our business activities, we prioritized them using the magnitude of their impacts on our business as an indicator, thereby identifying nature-related risks and opportunities that we believe should be addressed as a priority. For each nature-related risk and opportunity identified, we also examined measures to mitigate the risk and realize the opportunity.

〈Risks related to biodiversity〉

• Short term (up to 3 years), medium term (3-10 years), and long term (10-30 years)

〈Opportunities related to biodiversity〉

• Short term (up to 3 years), medium term (3-10 years), and long term (10-30 years)

The identification of risks and opportunities for FY2024 did not identify any items that would have significant impacts on the continuity of our business. Going forward, we will continue to closely monitor trends in the international community, and in line with the LEAP approach, we will regularly assess the dependences and impacts of our business activities on nature, identify risks and opportunities based on the assessment results, and consider countermeasures. We will also identify nature-related risks and opportunities arising from the use of pharmaceuticals by medical institutions and patients in the downstream value chain (use of pharmaceuticals), while taking the trends in TNFD and the Science Based Targets Network (SBTN) into account.

Risk and Impact Management

The TNFD-WG and the Environment Management Committee manage the identified nature-related risks, opportunities, and countermeasures, while the Board of Directors manages and supervises the management of these risks and opportunities through the environmental governance system described in the “Governance” section, above. Nature-related risks and opportunities will be reviewed at least once every two years by the TNFD-WG. If an item is identified that could have a significant impact on finance and business continuity, it will be shared with the Risk Management Committee to manage the risk. For more details about risk management system, please click here.
In addition, in the upstream value chain, when a new contract is entered into, STEPs 1 through 3 described in the strategy above will be followed to identify the presence or absence of nature-related risks, and engagement to mitigate the identified risks will be conducted.

Metrics and Targets

To strengthen and accelerate our efforts to address global environmental issues, we have been promoting activities under our medium- to long-term environmental targets (more information on our mid- to long-term environmental targets, please click here). While minimizing the negative impact of our business activities on nature, we will promote initiatives to contribute to the realization of nature positive by 2030 through the development of green spaces on company-owned land and positive activities for nature through new biodiversity conservation activities.
In addition, among the indicators established to assess and manage our dependences and impacts on nature, risks, and opportunities, those for which we have not yet established targets will be considered and disclosed in due course.

〈Comparison table of TNFD core global disclosure metrics〉

• The metrics, FY2024 results and targets for Ono Pharmaceutical Co., Ltd. on a non-consolidated basis are shown in this table.

General Requirements (References)