• Initiatives for Biodiversity
• TNFD Disclosure
• Ecological Footprint
• Initiatives for Biodiversity Conservation

Initiatives for Biodiversity

The Group’s Basic Environmental Management Policy and the Mid-term Environmental Management Policy stipulate that business activities must consider biodiversity and ecosystem services. The Group has established the Basic Biodiversity Principles and Action Guidelines based on these policies. When this was established, the Group surveyed its initiatives on biodiversity, the use of natural resources, and status of efforts to comply with the Cartagena Protocol both inside and outside of Japan. Additionally, the Group assessed the relationship between its business activities and biodiversity and identified issues through an analysis of the Group’s risks and opportunities. (Please refer to the diagram “Map of corporate activities and biodiversity” below.)
The Daiichi Sankyo Group believes that biodiversity conservation and sustainable use of ecosystem services are essential in performing business. We promote raising awareness and understanding of employees, as well as the strengthening of environmental conservation activities in collaboration with business partners and private groups, to procure materials with less environmental burden, and to socially contribute towards biodiversity conservation.

Basic Biodiversity Principles and Action Guidelines

Map of Corporate Activities and Biodiversity

An enlargeable image opens in a separate window

TNFD Disclosure

The Daiichi Sankyo Group believes that the conservation of biodiversity and the sustainable use of ecosystem services are essential in performing business. We therefore promote biodiversity initiatives to achieve the Nature Positive^*1.
We agree with the TNFD^*2 recommendations and registered as a TNFD Adopters^*3 in May 2024. In FY2024, we have completed an assessment based on the LEAP approach^*4 in line with the TNFD recommendations. In FY2025, we also conducted a nature-related scenario analysis to assess critical nature-related risks in greater detail.

*1Nature Positive is a global societal goal defined as ‘Halt and reverse nature loss by 2030 on a 2020 baseline, and achieve full recovery by 2050 for the benefit of people and planet.

*2TNFD（Taskforce on Nature-related Financial Disclosures) is a market-led, science-based and government-supported global initiative. The recommendations and guidance provide organizations with a risk management and disclosure framework to act on evolving nature-related dependencies, impacts, risks, and opportunities. They are designed to provide decision-useful information to capital providers and other stakeholders.

*3TNFD Adopters are organizations that have committed to start making disclosures aligned with the TNFD Recommendations in their corporate reporting for their fiscal years 2023, 2024 or 2025.

*4The LEAP (Locate, Evaluate, Assess and Prepare) approach is an integrated approach developed by TNFD to identify and assess nature-related issues. It comprises four phases: Locate interfaces with nature; Evaluate dependencies and impacts on nature; Assess nature-related risks and opportunities; and prepare to respond to those risks and opportunities and to disclose material nature-related issues.

Governance

The Daiichi Sankyo Group has established the Sustainability Committee to effectively identify and respond to changes in the external environment, including evolving social issues and societal conditions, and to promote sustainability management by integrating business activities with efforts to address these challenges. The Sustainability Committee is chaired by the Head of Global Corporate Strategy and comprises leaders from individual business units and corporate functions. The Committee meets, in principle, twice a year to discuss strategies and policies related to human rights; environmental, health, and safety (EHS); sustainability information disclosure; and social contributions. With respect to EHS, the Committee deliberates on, oversees, and reports on EHS management policies, set targets, and related activities. EHS-related results are reported to the Executive Management Committee (EMC), and matters of particular importance are subsequently reported to the Board of Directors.

Corporate Governance Code
Environmental Management Promotion System

The Daiichi Sankyo Group has established EHS Policy and has implemented EHS initiatives based on the recognition that protecting the environment and ensuring the health and safety of our employees across all corporate activities are key management priorities. In addition, our Biodiversity Basic Policy and Action Guidelines stipulate commitments to the following: “Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization” and “Communicate with stakeholders and improve in-house awareness”. Furthermore, the Daiichi Sankyo Group Human Rights Policy declares As a signatory to the United Nations Global Compact, the Group supports its 10 principles in the four areas of human rights, labor, environment, and anti-corruption.

Daiichi Sankyo Group EHS Policy
Biodiversity Basic Policy and Action Guidelines
Daiichi Sankyo Group Human Rights Policy

Risk & impact management

Process for Identifying, Assessing and Prioritizing Nature-related Dependencies, Impacts, Risks and Opportunities

We identified and assessed our dependencies on and impacts on nature, as well as nature-related risks and opportunities, through the following process. To understand nature-related issues across our value chain, we assessed dependencies and impacts in the pharmaceutical sector and in upstream and downstream sectors of our value chain using the ENCORE risk assessment tool.
In FY2024, we developed a materiality map of nature-related challenges from the perspectives of the depth of connection with the pharmaceutical sector and our business activities, and identified material issues related to its dependencies on and impacts on nature across relevant sectors. In FY 2025, we assessed the materiality of nature-related risks with potential future impacts on its business by conducting scenario analyses based on actual business risks associated with the identified material issues.
We also conducted a location-based assessment for each material issue using risk assessment tools to evaluate the likelihood of these risks occurring across our business locations. Based on the assessment results, we identified priority locations for reviewing our business initiatives. Additional targets and measures are currently being discussed through dialogue with internal stakeholders. The assessment results are disclosed in the Strategy section.

Identification & Assessment Process for Nature-Related Dependencies, Impacts, Risks, and Opportunities

Processes for Managing Nature-related Dependencies, Impacts, Risks, and Opportunities / Overall Risk Management Processes

The Sustainability Committee plays an important role in assessing the nature-related risks and opportunities, including climate change, evaluating their potential impacts on the Group’s business, and managing them to enhance our resilience. The Committee considers countermeasures against risks that may necessitate changes to our business activities, such as climate change- and water-related risks. It also reports significant risk-related matters to EMC and then the Board of Directors, where they are incorporated into our Group’s comprehensive risk management framework. In addition, the Committee deliberates on and approves medium- and short-term targets and implementation plans aimed at achieving long-term carbon neutrality and the Nature Positive goals.

Strategy

Nature-related business risks have already materialized worldwide. In light of their severity, we recognize these risks as critical risk management issues that must be addressed in the pharmaceutical sector, one of our core business areas. With a focus on identifying nature-related risks that attract stakeholder attention and are closely associated with our business, we conducted an analysis in line with the LEAP approach in FY2024, followed by a nature-related scenario analysis in FY2025.

1. Nature-Related Scenario Analysis

Prior to the risk assessment, we conducted a nature-related scenario analysis focusing on environmental conditions and market trends. The TNFD recommendations on Scenario Analysis recommends the use of a 2×2 matrix consisting of two axes: nature capital and ecosystem service degradation (x-axis) and the alignment of market and non-market forces (y-axis). This analysis comprehensively assessed the risk level and likelihood of potential future threats and evaluated the probability of risk occurrence and our financial strength for 25 identified business risks, based on the two defined scenarios: Scenario 1 (Nature Positive, or NP) and Scenario 3 (Business as Usual, or BaU).
In Scenario 1 (NP), heightened environmental awareness reflected in laws and regulations, as well as among stakeholders, leads to increased transition risks such as response costs and litigation, reputational damage stemming from incidents that cause environmental harm or pollution. In Scenario 3 (BaU), limited growth in environmental awareness and regulating services, continued environmental degradation lead to the rapid deterioration of ecosystem services. This, in turn, increases the risk of natural disasters such as droughts and floods, as well as physical risks, including disruptions to raw material procurement infrastructure that threaten the continuity of manufacturing operations.
We organized the pathways through which changes in external environment such as social and natural factors, give rise to risks with potential business impacts, which subsequently materialize and ultimately result in negative financial impacts, into logic models for each risk factor. In this manner, we have identified risks to be evaluated. The materiality of each risk to the Group was assessed under the worst-case scenario, in which financial impacts of each risk are maximized.

Four-Scenario Matrix

Source: Guidance on scenario analysis (TNFD)

2. Identification of nature-related dependencies and impacts

Our material nature-related risks are divided into four areas: water resources, pollution, natural resources, and ecosystems. We identified a total of 25 business risks across these categories and assessed their materiality. The table below presents the risks that were determined to have a certain level of materiality based on the above assessment. These risks are further classified into upstream risks within our value chain, which relate to raw material production and processing, and direct operational risks associated with pharmaceutical product manufacturing and R&D.
The risk materiality assessment was conducted based on the two scenario: the Nature Positive scenario (NP), which represents the worst-case scenario for transition risks, and the Business as Usual scenario (BaU), which represents the worst-case scenario for physical risks. The assessment evaluated our financial strength and the probability of risk occurrence in line with the TNFD guidelines. During the risk assessment process, the results were reviewed and discussed in collaboration with responsible members from the relevant organizations. 

Upstream Risks in the Value Chain

Material issues	TNFD Risk Classification	Risks*	Worst-case scenario
Water resources	Physical risk-acute	Increase in raw material prices due to poor crop yields caused by drought	BaU
	Physical risk-chronic	Decline in social reputation due to criticism of excessive groundwater extraction for crops cultivation in regions with tight water supply and demand	BaU
Pollution	Transition risk-Reputational	Decline in social reputation due to criticism of water and soil pollution during the refining process of minerals used for packaging materials	NP
Natural resources	Transition risk-Policy	Increase in development, procurement, and production costs to comply with stricter regulations on raw materials with deforestation risks, as well as penalties for non-compliance	NP
	Transition risk-Market	Investment and financing restrictions by institutional investors on companies involved in deforestation	NP
	Transition risk-Reputational	Decline in social reputation and share price due to protests by international NGOs and local communities over insufficient consideration for nature at raw material sourcing sites	NP
	Transition risk-Policy, Liability	Costs with local community support when using genetic resources and profit-sharing payments required under the introduction of the "Kari Fund"	NP
Ecosystem	Transition risk-Policy	Tightening of supply-demand balances for raw materials and increase in procurement prices due to strengthened farmland development regulations	NP
	Transition risk-Reputational	Growing concerns about nature destruction and pollution in the supply chain and responses to requests for the use of sustainably certified raw materials	NP

＊The risks presented in the table are excerpts of those assessed as material from the perspective of impact severity on the Group. Risk materiality was assessed under two scenarios, based on the financial strength and the probability of risk occurrence, in line with the TNFD guidelines, and was evaluated using the worst-case scenarios with more severity on the Group.

Direct Operational Risks

Material issues	TNFD Risk Classification	Risks*	Worst-case scenario
Water resources	Physical risk-chronic/Transition risk-Market, Reputational	Water withdrawal restrictions, increasing water fees, and criticism of adverse impacts on water sources in regions with tight water supply and demand	BaU
Pollution	Transition risk-Liability	Rising environmental restoration costs, compensation payments, and stricter administrative penalties related to harmful chemical leaks caused by operational errors, factory flooding, or fires	NP
	Transition risk-Policy	Compliance with stricter regulations on the release of active pharmaceutical ingredients (API) and other substances into the environment	NP
Natural resources	Transition risk-Policy	Strengthened the Cartagena Act on genetically modified organisms and imposition of fines for violations	NP
Ecosystem	Transition risk-Liability	Fines for improper disposal of waste containing genetically engineered organisms at research laboratories and factories	NP

＊The risks presented in the table are excerpts of those assessed as material from the perspective of impact severity on the Group. Risk materiality was assessed under two scenarios, based on the financial strength and the probability of risk occurrence, in line with the TNFD guidelines, and was evaluated using the worst-case scenarios with more severity on the Group. Risks associated with our outsourced manufacturers are classified as direct operational risks.

3. Consideration of Risk Mitigation Measures

Examples of the Group's initiatives to address material risks are presented below. Additional goals for each material issue, also covering the supply chain, as well as the implementation of concrete measures, will be determined based on gap analysis between external expectations and our current initiatives, as well as dialogue with relevant stakeholders.

Examples of the Group's Initiatives to Address Material Issues

Material Risks	Actions Required in Response to Risks	Examples of the Group’s Initiatives
Water Resources	Appropriate use and risk management of water resources	Measures such as appropriate and efficient use of water, promotion of reuse through purification equipment, reduction of water usage, etc.
Pollution	Pollutant discharge management and prevention, environmental impact assessment	Environmental impact assessment of pharmaceuticals Set voluntary control standard values stricter than legal regulations and implement appropriate management through monitoring Conduct environmental impact assessment of wastewater through WET testing Establish and implement response methods in the event of pollution Implement measures to prevent improper waste disposal, etc.
Natural Resources	Sustainable procurement Appropriate responses to the Cartagena Act	Sustainability surveys of key business partners (including questions on pollutions and human rights) Evaluation of human rights and environmental risks at the initiation of business relationships Appropriate use and management of genetically engineered organisms in compliance with the Cartagena Act
Ecosystems	Mitigation of negative impacts on ecosystems in raw material-producing areas and in the vicinity of manufacturing plants and laboratories Promotion of green space management and conservation activities with due consideration for biodiversity	Sustainability surveys of key business partners Evaluation of human rights and environmental risks at the initiation of business relationships Appropriate use and management of chemical substances and genetically engineered organisms Reforestation activities in Germany Reforestation and rare plant conservation activities Greening activities at bases to create a sense of unity with nature, etc.

4. Analysis Details (Analysis in line with the LEAP approaches)

In FY2024, an analysis conducted in line with the LEAP approaches identified material nature-related issues across our value chain in terms of dependencies and impacts on nature, and assessed the locations and operational sites within our value chain where such issues could manifest. Five major raw materials within our upstream supply chain were selected as targets for the risk case survey and location-based analysis based on the criteria that they are used in the Group’s main products (approximately 61% of FY2023 sales coverage) and are listed on the SBTN High Impact Commodity List. Accordingly, we understand there remains room for improvement in terms of the scope of coverage and analytical accuracy.
We focus on mitigating nature-related risks through our business operations at the identified locations and operational sites by implementing concrete measures to address identified material issues, while also enhancing our resilience by expanding business opportunities.

(1) Identification of Nature-related Dependencies and Impacts

Nature-related dependencies and impacts across our value chain were assessed using the ENCORE nature risk assessment tool, and the results were visualized in a heat map.

Risk Assessment Results by Sector Across Our Value Chain (Dependencies on Nature)*

	Sub-industry	Land use	Natural resource use	Water use	Decomposit ion and purificantion	Natural disaster mitigation	Climate regulation	Pest control and Pollination
Up stream	Diversified Chemicals	VL	L	L	VL	L	VL	L
	Speciality Chemicals	L		H	L	M	L
	Commodity Chemicals	L		H	L	M	L
	Forest Products	VH	VH	VH	H	VH	VH	VH
	Paper Packaging				L
	Aluminium		H	H		H	H
Direct operation	Pharmaceuticals Manufacturing		M	H	L	M
	Life Sciences Manufacturing		M	H	L	M
Down stream	Drug Retail	VL			VL	L
	Health Care Facilities			M		L
	Health Care Distributors					M	H

＊The table presents the assessment results of nature-related dependencies by sector across our value chain using the ENCORE nature risk assessment tool.

Risk Assessment Results by Sector Across Our Value Chain (Impacts on Nature)*

	Sub-industry	Land use	Natural resource depletion	Water depletion	Water pollution	Soil pollution	Air pollution	Water	GHG emissions	Spread of invasive species	Impact on local eco-system
Up stream	Diversified Chemicals	H		VH	H	H	H	H	H		H
	Speciality Chemicals	H		H	H	H	H	H	H		H
	Commodity Chemicals	H		H	H	H	H	H	H		H
	Forest Products	VH			H	H		H	H	H	VH
	Paper Packaging			VH	H	H	M				H
	Aluminium	VH	VH	VH	H	H	H	H	VH	VH	VH
Direct operation	Pharmaceuticals manufacturing			H	H	H	M	H			H
	Life Sciences manufacturing			H	H	H	M	H			H
Down stream	Drug Retail			H	H	H	M	M			H
	Health Care Facilities				M	M		M	H		M
	Health Care Distributors	M			L	L	H		H		H

＊The table presents the assessment results of nature-related impacts by sector across our value chain using the ENCORE nature risk assessment tool.

(2) Evaluation of Material Issues

We assessed the short-, medium-, and long-term depth of our business relationships for the identified nature-related risk cases across relevant sectors, where significant dependencies on, and impacts on, nature may arise, based on the severity of each case. Following this assessment, we created a nature-related materiality map consisting of two axes: relevance to the pharmaceutical sector (y-axis) derived from the ENCORE assessment results, and relevance to our business (x-axis) derived from the risk case research results. As a result, we identified six material issues for the Group: “water use”, “natural resource use”, “water depletion”, “water pollution”, “soil pollution”, and “impacts on local ecosystems”. From the perspective of the characteristics of each risk and the consistency of counter measures, these six material issues are divided into four areas: water resources, pollution, natural resources, and ecosystems. For the risk assessment results, please refer to “2. Identification of Material Nature-related Risks”.

(3) Location-based Analysis across the Value Chain

We conducted a location-based analysis* on nature-related issues in three areas —water resources, pollution, and ecosystems—using risk assessment tools, to evaluate the likelihood of physical risk materialization across our business regions, focusing on risks that are both measurable using assessment tools and of a certain level of materiality. As a result, eight of the Group’s direct operational sites were identified as our critical bases. For the upstream portion of the value chain, risk analyses were conducted on five key raw materials at their main production sites and locations with potential nature-related issues were identified for all of these raw materials.

＊The assessment indicators included water stress, water pollution index, presence or absence of mangroves and coral reefs, conflict cases, protected areas and areas undergoing deforestation, and presence or absence of peatlands. The assessment tools used were Global Forest Watch, IBAT, Environmental Justice Atlas, Crop Production Maps, Global Wetlands, Global Dam Watch, WWF Water Risk Filter, Aqueduct, and Ocean+ Habitat.

Analysis Process for Water Resource (Direct Operational Areas)

Analysis Process for Pollution and Ecosystems (Direct Operational Areas)

 

Location-based Analysis Results (Direct Operational Areas)

● High-risk area

Company Name	Operation Site	Water Resources	Pollution	Ecosystem
DAIICHI SANKYO CO., LTD.	Shinagawa	-	-
DAIICHI SANKYO CO., LTD.	Kasai	-	●
DAIICHI SANKYO CO., LTD.	Hiratsuka	-	-
DAIICHI SANKYO CO., LTD.	Onahama	-	-
DAIICHI SANKYO CO., LTD.	Tatebayashi	-	-
DAIICHI SANKYO CO., LTD.	Odawara	-	-
Daiichi Sankyo Biotech Co., Ltd.	Kitamoto	-	●
American Regent, Inc.	Shirley	●	●
American Regent, Inc.	Columbus	-	-
American Regent, Inc.	Brea	●	●
Daiichi Sankyo Altkirch Sarl	Altkirch	-	●
Daiichi Sankyo Europe GmbH	Pfaffenhofen	-	-
Daiichi Sankyo Pharmaceutical (Shanghai)　 Co., Ltd.	Shanghai	●	-
Daiichi Sankyo Brasil Farmaceutica LTDA	Alphavile	-	●

Metrics & targets

Quantitative Metrics

Quantitative environment-related data is disclosed in ESG Data. We plan to consider the disclosure of core metrics following further data collection and more detailed analyses.

Quantitative Targets

The Group aims to achieve its environmental targets in order to contribute to the achievement of Nature Positive goals. Our quantitative environmental targets are disclosed in Promoting Environmental Management. In the future, we plan to consider the need to set additional targets in line with TNFD recommendations.

Future Plans

The Group plans to set targets for material issues, consider a medium-term action plan, and further enhance analytical methods. 

Ecological Footprint

We assess the ecological footprint (EF), an indicator of biodiversity, jointly with experts from the NGO Global Footprint Network, to examine all environmental burdens in the business activities of Group companies in Japan. The assessed EF is used as a comprehensive indicator of environmental burdens, including those related to biodiversity, by reviewing and monitoring long-term changes in the relationship between the reduction of environmental burdens and biodiversity conservation (trade-off) in the Group.
This initiative has been recognized as an action for achieving the Aichi Target (20 targets) that was adopted at COP10 (the 10th Meeting of the Conference of the Parties to the Convention on Biological Diversity in Nagoya) and has been registered on the Nijyu-Maru Project as well. In addition, it was introduced as an example of monitoring biodiversity in the Guidelines for Private Sector Engagement in Biodiversity (Second Edition) issued by the Ministry of the Environment of Japan.

Initiatives for Biodiversity Conservation

Conservation for rare species of plants

To preserve the golden orchid (designated as critically endangered Type II in the Japanese Ministry of the Environment’s Red Data Book) and the silver orchid, we have prohibited entry into the forested area of the property at the Tatebayashi Biopharmaceuticals Center where the plant naturally grows (approximately 1,000 m2). The continued conservation effort has been resulted in an increase in the population of the species and expansion of breeding range.

Greening in harmony with the surrounding environment

The Kitamoto Office of Daiichi Sankyo Biotech Co., Ltd. engages in environmental conservation that considers the surrounding natural environment and ecosystem and implements sound insulation and greening in harmony with the neighboring Kitamoto Nature Observation Park.
Recognized for its various diversity-friendly initiatives, the office was given the 7th Sainokuni Green Plan Award in 2015. The award is granted by Saitama Prefecture to facilities that have achieved excellent greening and sound maintenance.
The office continues to engage in environmental conservation through greening and other ecosystem protection measures.

Activities to nurture biodiversity

In recent years, the population of pollinators such as honey bees and butterflies has been on a decreasing trend around the world due to the effects of deforestation, agricultural chemicals, global warming, and other issues. At our Pfaffenhofen Plant in Germany, we cooperate with Pfaffenhofen in Bloom -an initiative started by the city of Pfaffenhofen aimed to increase the pollinator population- and we are actively working on encouragement of biodiversity on the plant premises. We are planting many flowers in the approximately 3,200 m2 area as an environment where honeybees and other insects can inhabit. In addition, in April of 2022, Daiichi Sankyo Europe (Munich, Germany), one of our overseas group companies, started planting one tree per every new IT device, and approximately200 trees had already been planted. To promote this initiative, the company has secured enough land in Germany to plant approximately 3,000 trees, thereby working on achieving the Sustainability IT.

Participation in 30by30 Alliance for Biodiversity

The Daiichi Sankyo group participates in 30by30 Alliance for Biodiversity launched in April 2022 by the Ministry of the Environment of Japan. 30by30 is a goal that aims to conserve or protect at least 30% of land and sea by 2030, thereby contributing to the conservation of biodiversity. We will promote initiatives to contribute to 30by30, including the implementation of e-learning programs to raise employee awareness and understanding of biodiversity and the setting of targets for biodiversity conservation.

Participation in Keidanren Initiative for Biodiversity Conservation

The Daiichi Sankyo group has endorsed the "Keidanren Declaration for Biodiversity and Guideline^*5" advocated by the Japan Business Federation and the Keidanren Committee on Nature Conservation, and have participated in the " Keidanren Initiative for Biodiversity Conservation^*6" We will promote initiatives to contribute to transitioning nature positive world, including the analysis and disclosure in line with TNFD recommendations and the setting of targets for biodiversity conservation, the initiatives to contribute to 30by30, the implementation of programs to raise employee awareness and understanding of biodiversity.

*5Keidanren Declaration for Biodiversity and Guideline
https://www.keidanren.or.jp/en/policy/2023/082_proposal.html

*6Keidanren Initiative for Biodiversity Conservation
https://www.keidanren-biodiversity.jp/logo_en.php