Governance

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 and the Sustainability Promotion Committee, which are 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 Sustainability Strategy Meeting, which is attended by senior management, etc. and chaired by the Executive Director in Charge of the Environment. The contents reported or approved by these committees are reported to the Board of Directors at least once quarterly 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 FY2023, 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:

Assessment of water risk (water stress and flood risk) by Aqueduct*¹ and biodiversity risk by TNFD-IBAT*²
Targets: Upstream value chains (163 companies, 181 sites), direct operations (12 groups, 85 sites), downstream value chains (60 companies, 110 sites)

Criteria for assessing as “at risk”

• Water risk: Either water stress (baseline/year 2050 [pessimistic scenario, RCP 8.5]) or flood risk (riverine/coastal) is High or Extremely high.
• Biodiversity risk: Three or higher (five layers of indicators for species threat reduction and recovery)

• 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).
• 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 of our business partners that are critical to our business continuity where there is concern about serious dependences and/or impacts on nature*

• The sites identified one or more risks in STEP 2, and/or the sites concerned the environmental pollution risk by the website survey (confirmation of the status of acquisition of certificate for the Environmental Management System (EMS) and presence/absence of past environmental accidents and violations)

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 15 sites in upstream value chains and direct operations as well as 7 companies (head office location) in downstream 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

In STEP 4, for the identified priority locations, we reconfirmed the interface with nature (surrounding environment such as presence/absence of grasslands, mountain forests, cultivated lands, and rivers, etc.), and investigated the climate and past natural disasters to 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 FY2023 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 annually 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〉