The Daiichi Sankyo Group advances environmental management, recognizing environmental issues as material challenges that may affect people’s lives and livelihoods, and as risk factors that could have a negative impact on our business over the long term. Environmental issues are diverse, ranging from global warming and extreme weather to resource depletion, pollution, biodiversity loss, and other environmental challenges. To support the achievement of planetary health—one of the Group’s long-term visions—the Group pursues initiatives while considering trade-offs and synergies, taking an integrated view of the relationship between these challenges and our business operations.
The Group manages climate- and nature-related risks and opportunities in an integrated manner, and discloses integrated information in line with both the TCFD^*1 and TNFD^*2 frameworks to further strengthen our governance and business strategy.

• *1 Taskforce on Climate-related Financial Disclosures
• *2 Taskforce on Nature-related Financial Disclosures

• Governance
• Risk and Impact Management
• Strategy
• Metrics and Targets

Governance

The Group has established the Sustainability Committee, which aims 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 operations with efforts to address these challenges.
The Committee, chaired by the Head of Global Corporate Affairs, meets, in principle, twice a year to discuss matters related to environmental, health, and safety (EHS); sustainability disclosure; and social contribution. With respect to EHS, the Committee deliberates on, oversees, and reports on short-, medium-, and long-term strategies, plans, and activities related to EHS management, and submits the outcomes to the Executive Management Committee (EMC). Matters of particular importance are reported to the Board of Directors.
With regard to human rights strategies and policies, starting in fiscal year 2026, we are establishing a framework to promote and oversee human rights due diligence on a global basis under the Global Ethics & Compliance Committee, which serves as our Group’s oversight and advisory body for compliance matters. Compliance System.

EHS Management Promotion System

Corporate Governance

Environmental Management Promotion System

Compliance System

The Group has established an EHS policy and promotes various initiatives to protect the environment and ensure people’s health and safety, recognizing these as material management issues. Its basic principles and action guidelines on biodiversity include “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.” In addition, the Daiichi Sankyo Group’s Position Statement on Human Rights states that, in conducting business activities, the Group respects international norms and principles and supports the ten principles covering four areas (human rights, labor, the environment and anti-corruption) as a signatory to the United Nations Global Compact.

Daiichi Sankyo Group EHS Policy

Biodiversity Basic Policy and Action Guidelines

Daiichi Sankyo Group’s Position Statement on Human Rights

Risk and Impact Management

Processes for Identifying and Assessing Climate-related Risks and Opportunities

Climate-related risks and opportunities in relation to the Group’s business operations were identified and assessed according to the processes described below. The assessment covered the entire value chain and identified climate-related transition risks (government policies, laws and regulations, carbon pricing, technological developments, etc.) and physical risks (climate-related disasters, temperature and precipitation fluctuations, etc.). Responsible units and functions worked collaboratively to identify and organize risks and opportunities anticipated to affect business operations. These items were evaluated by relevant units and functions based on their potential impacts and likelihood to determine the Group’s material issues. In addition, scenario analyses were conducted to assess the potential impacts on business operations and financial performance in FY2030 and FY2050. Based on the results of these analyses, specific measures to address each identified material issue are being implemented.

Identification and Assessment Process for Climate-related Risks and Opportunities

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

The Group’s dependencies and impacts on nature, as well as nature-related risks and opportunities, have been identified and assessed in accordance with the process described below.　First, nature-related dependencies and impacts in the pharmaceutical sector and across upstream and downstream value chain segments were assessed using the ENCORE tool. As nature-related challenges vary, a materiality map was developed to assess the Group’s dependencies and impacts on nature across relevant sectors. The assessment was conducted based on two perspectives: the degree of relevance to the pharmaceutical sector and the degree of relevance to the Group’s business, and material issues were identified accordingly. In addition, scenario analysis of business risks related to material issues were conducted in collaboration with relevant business units and functions to assess their potential impacts on the Group’s business and their likelihood.

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

Management Process for Climate- and Nature-related Risks / Integration into the Overall Risk Management Process

The Sustainability Committee’s key responsibility is to assess and manage how climate change-related impacts and nature-related dependencies and impacts affect risks and opportunities for the Group’s business, thereby enhancing its resilience. The Committee implements response measures to address potential risks that could compel the Group to alter its business activities, such as those arising from climate change, water- and nature-related risks. It reports significant risk concerns to the EMC and the Board of Directors to integrate them into the overall risk management process. In addition, the Committee discusses and determines short- and medium-term targets and implementation plans to achieve the long-term transition to carbon neutrality and a nature-positive society.

Strategy

As the impacts on environment continue to grow, the Group’s business activities cannot be sustained unless a sustainable society is achieved. In particular for life-related products such as medicines, the disruption to supply chains and deterioration in the ability to deliver medicines, caused by increasingly severe climate-related disasters and the degradation of ecosystems, pose significant operational and social risks. In this context, it is critically important for the Group to reduce its environmental impact and advance decarbonization, as well as promote decarbonization and biodiversity protection across the Group’s supply chains. Through these efforts, the Group aims to achieve carbon neutrality and a nature-positive society while mitigating physical impacts.
Guided by this strategy, the Group assessed the climate- and nature-related risks and opportunities for our business with reference to the classifications used in the TCFD and TNFD frameworks.

Climate- and Nature-related Scenario Analysis

As climate- and nature-related operational risks are increasing worldwide, the Group recognizes that they also pose challenges for the pharmaceutical sector —its core business area— and must therefore be addressed as part of our risk management in light of their significance.
Potential financial impacts arising from identified risks and opportunities were assessed using two scenarios each for climate and nature. For climate, impacts were assessed under the IEA and IPCC 1.5°C-aligned scenarios, in which decarbonization progresses, and the 4°C scenario^*3, in which decarbonization does not progress. Based on these scenarios, response measures to climate-related risks and opportunities were identified. For nature, in line with the TNFD recommendations, a scenario matrix^*4 was developed with “Alignment of Market and Non-market Forces” on the y-axis and “Natural Capital and Ecosystem Service Degradation” on the x-axis. Based on this matrix, the Group assessed business impacts using two scenarios: a nature-positive scenario (NP, equivalent to Scenario 1 in the TNFD Guidance) and a business-as-usual scenario (BaU, equivalent to Scenario 3 in the TNFD Guidance). These scenarios were selected to capture extreme cases and ensure preparedness for both transition and physical risks.
To understand climate- and nature-related risks in an integrated manner, the 1.5°C scenario was confirmed to broadly align with the nature-positive scenario, where transition risks may become more significant, while the 4°C scenario aligns with the BaU scenario, where physical risks may become more significant, although climate scenarios and nature scenarios differ in their definitions and components.

• *31.5°C scenario: IEA SDS (WEO2021), IEA NZE 2050
  　4°C scenario: IPCC RCP8.5
• *4Relationship between the scenario in the TNFD Guidance and the current scenario

Source: Guidance on scenario analysis (TNFD)

Adopted scenario matrixes

	Nature-Positive Scenario	Business-as-Usual Scenario
Climate	Decarbonization policies and technological innovation accelerate, limiting temperature increases to around 1.5°C. However, stricter regulations may significantly increase transition risks. [Adopted scenario] 1.5°C scenario: IEA SDS (WEO2021) and IEA NZE 2050	Insufficient emissions mitigation leads to global temperature increases of around 4°C, significantly increasing physical risks such as extreme weather events and sea-level rise. [Adopted scenario] 4°C scenario: IPCC RCP8.5
Nature	Laws, regulations, and market mechanisms advance toward achieving a nature-positive society, limiting nature degradation but significantly increasing transition risks. [Adopted scenario] Nature-positive scenario	As nature degradation becomes more severe, laws, regulations, and market responses are delayed, significantly increasing physical risks. [Adopted scenario] Business-as-Usual scenario

Climate- and Nature-related Risks and Opportunities

The Group recognizes that direct transition risks to its operations are limited. However, scenario analysis indicates that policy responses such as carbon taxes and stricter laws and regulations, as well as the broader low-carbon transition, may pose future risks across our supply chains. In addition, physical risks are increasing due to more severe climate disasters and supply instability caused by natural capital degradation.
To address transition risks, the Group seeks opportunities to reduce costs by mitigating potential financial burdens such as carbon taxes and stricter regulatory requirements through the use of renewable energy, the introduction of decarbonization technologies, and collaboration with business partners.
To mitigate physical risks, the Group implements various measures, including enhancing our business continuity plan (BCP) through flood control measures; establishing frameworks to diversify suppliers and distribution routes and maintain stable supply during disasters; and securing alternatives for critical materials and production and supply systems. Through these efforts, the Group aims to avoid potential losses and continuously enhance its corporate value.
The Sustainability Committee and the EMC oversee the Group-wide progress of key measures to address risks identified through scenario analyses.

Climate- and Nature-related Risks and Opportunities

Key Issue	Climate / Nature Scenario	Value Chain	Category	Risk / Opportunity	Potential Impacts on the Group	Impact Severity	Actions to Strengthen the Group’s Resilience	Business Risk
Climate Change	Climate / 1.5°C	Upstream	Transition – Policy	Cost pass-through to procurement costs	Increased procurement costs due to the pass-through from suppliers and logistics operators resulting from carbon pricing and rising prices.	Minor	Avoidance of carbon-pricing costs and mitigation of rising procurement costs through the reduction of Scope 3 emissions in collaboration with business partners	Low
			Transition – Market	Higher energy and other operating costs	Increased energy procurement costs due to higher initial and operational costs as energy companies implement decarbonization measures	Minor	Mitigation of price volatility risks through long-term electricity procurement agreements	Low
		Own Operations	Transition – Policy	Higher costs due to carbon pricing	Increased costs due to the introduction of carbon pricing and the launch of the emissions trading system in Japan	Minor	Promotion of decarbonization initiatives to reduce emissions	Low
				New mandates and regulations affecting existing products and services	Decreased sales due to lost sales opportunity caused by service disruptions and closures of client companies as stricter environmental regulations are introduced in relevant markets.	Major	Monitoring of regulatory trends and early development of response measures to avoid risks Development of multiple suppliers for key raw materials and reduction of supply risks to secure stable procurement	Medium
			Transition Policy / Market	Higher energy and other operating costs	Increased cost volatility due to energy price fluctuations	Minor	Continued promotion of energy efficiency initiatives and reduction of price volatility risks through long-term energy procurement agreements	Low
			Opportunity – Resource Efficiency	Energy cost reductions	Reduced energy cost through energy-saving initiatives such as the use of fuel-efficient vehicles	Minor	Promotion of eco-driving and reduction of energy costs through the transition to fuel-efficient vehicles	Opportunity
			Opportunity – Reputation	Enhanced corporate value and reputation	Decarbonization initiatives leading to an enhanced reputation among ESG investors and contributing to increased corporate value, such as higher stock prices	Qualitative	Active advancement of decarbonization initiatives and related disclosures to meet shareholder and investor expectations and enhance corporate reputation	Opportunity
	Climate / 4°C Nature / BaU	Upstream	Physical – Acute	Supply chain disruptions	Lost sales due to temporary service and logistics disruptions as torrential rains and typhoons affecting the value chain Lost sales due to temporary service and logistics disruptions caused by droughts and heat waves affecting the supply chain	Qualitative	Securing sufficient emergency stockpiles in preparation for disasters Securing multiple sourcing channels to ensure stable supply in preparation for disasters Shifting to alternative raw material suppliers in emergencies Consideration of stockpiling certain raw materials that rely on a single sourcing channel Ensuring the availability of the Bosai Information Online Infrastructure System (BIOS) to monitor supplier status during natural disasters	Medium
					Higher raw material procurement costs due to poor harvest and oil-related material shortages caused by droughts	Qualitative
	Climate / 4°C	Upstream	Physical – Acute	Raw material shortages due to infectious diseases, natural disasters, regulatory decisions, and climate policies	Increased costs due to raw material shortages across markets caused by stricter climate policies	Qualitative
		Own Operations	Physical – Acute	Temporary suspension of operations	Higher restoration costs due to operational disruptions directly caused by torrential rains and floods	Minor	Assessment of water-related disaster risks at operational sites from a BCP perspective and enhancement of resilience Implementation of emergency drills with enhanced response measures for floods and other disasters, and strengthening of resilience through the development and implementation of a water-related disaster response manual	Low
			Physical – Chronic	Higher air-conditioning costs	Higher energy costs due to increased air-conditioning use at offices, R&D, and manufacturing sites caused resulting from rising temperatures	Negligible	Introduction of efficient air conditioning systems Enhancement of energy efficiency	Low
				Higher labor costs	Financial losses and reduced operational efficiency due to employee medical leave resulting from extreme heat	Qualitative	Early detection of employee health issues through periodic health checkups and prevention of sick leave Promotion of corporate-wide health maintenance through walking and photo events and the Daiichi Sankyo Group’s original exercise program, “One-DS Taiso”	Low
				Increase in climate change-related diseases	Reputational damage and lost sales due to supply shortages caused by a steep rise in demand	Qualitative	Establishment of a sustainable supply system through the reduction of lead times in CMC development and the strengthening of the supply chain to respond to sudden demand for new medicine development and production due to climate change	Low
					Decline in demand for existing products due to shifts in disease patterns	Qualitative	Collaboration with external R&D partners to address diseases with high societal needs and unmet medical needs, including those arising from shifts in disease patterns and pandemics	Low
			Opportunity - Market		Rising fire insurance premiums due to more severe natural disasters caused by rising temperatures; however, future increases are expected to be limited	Qualitative	Enhancement of drug development capabilities to meet known and emerging unmet medical needs Strengthening of capabilities across the value chain from R&D to the commercialization of new medicines Establishment of external networks to identify and complement areas where the Group lacks capabilities	Opportunity
					Increased demand and sales opportunities for medicines for melanoma, respiratory diseases, and various tropical diseases, contributing to enhanced reputation	Qualitative	Securing sufficient production capacity to meet increased demand and maintaining appropriate stockpiles Collaboration with external R&D partners to address diseases with high societal needs and unmet medical needs, including those arising from shifts in disease patterns and pandemics	Opportunity
Water Resource	Climate / 4°C Nature / BaU	Own Operations	Physical - Acute	Temporary suspension of operations	Lost sales due to temporary service disruptions caused by water shortages at plants with highest water withdrawal risk located in the US, China, and Brazil	Major	Installation of rainwater tanks and introduction of water conservation solutions Consideration of the enhancement of drought prevention measures through the use of recycled water and securing of emergency water supply through alternative sites and outsourced manufacturing	Medium
	Nature / BaU	Upstream	Physical - Chronic	Reputational risk related to negative impacts on water resources in the supply chain	Reputational damage due to criticism over excessive groundwater withdrawal for agricultural production	Qualitative	Implement sustainability surveys of key business partners, including the promotion of environmental management Assess human rights and environmental risks at the start of business relationships and establish a business partner management system based on risk monitoring	－
Pollution	Nature / NP	Upstream	Transition - Reputation	Reputational risk from water and soil contamination in the supply chain	Reputational damage and lost sales due to criticism over increased environmental impacts associated with our products caused by pollution incidents in the upstream supply chain	Qualitative	Implementation of sustainability surveys of key business partners, including the promotion of environmental management Assessment of human rights and environmental risks at the start of business relationships and establishment of a business partner management system based on risk monitoring Requirement for each raw material supplier to submit safety data sheets upon conclusion of a quality agreement Provision of safety data sheets to product transport drivers and business partners	－
		Own Operations	Transition – Legal Liability	Higher response costs due to hazardous chemical leaks	Higher environmental restoration and compensation costs and stricter regulatory penalties due to hazardous substance leaks caused by operational errors, flooding, or fires at plants	Qualitative	Implementation of appropriate assessments in compliance with the Soil Contamination Countermeasures Act and local government ordinances Implementation of measures to prevent the spread of contamination and remediation according to contamination levels Continuous monitoring of site conditions following the completion of remediation measures Management of chemical substances in accordance with the PRTR system Establishment of wastewater control guidelines	－
			Transition - Policy	Higher compliance costs due to stricter regulatory requirements	Higher compliance costs due to stricter laws and regulations on environmental emissions of active pharmaceutical ingredients (APIs)	Qualitative	Implementation of environmental impact assessments for medicines based on country-specific guidelines Conduct of life cycle assessments (LCA) when designing new drug manufacturing processes Consideration of the establishment of waste recycling and reuse measures and low environmental-impact treatment methods	－
Natural Resource	Nature / NP	Upstream	Transition - Policy	Higher compliance costs due to stricter regulatory requirements	Higher compliance costs and penalties for non-compliance due to deforestation-risk raw materials	Qualitative	Implementation of sustainability surveys of key business partners, including the promotion of environmental management Assessment of human rights and environmental risks at the start of business relationships and establishment of a business partner management system based on risk monitoring	－
					Additional costs for local community engagement related to genetic resources and financial contributions resulting from the introduction of the Cali Fund	Qualitative		－
			Transition - Market	Higher capital costs related to deforestation in the supply chain	Investment ban by institutional investors into companies contributing to deforestation	Qualitative		－
			Transition - Reputation	Reputational risk from deforestation in the supply chain	Reputational damage due to protests by international NGOs and local communities over insufficient environmental consideration in raw material sourcing sites	Qualitative		－
		Own Operations	Transition - Policy	Higher compliance costs due to stricter regulatory requirements	Higher penalties due to non-compliance with the Cartagena Act on Living Modified Organisms	Qualitative	Establishment of internal regulations for experiments using genetically modified organisms Appropriate handling of genetically modified organisms in accordance with the Cartagena Act Review of the compliance of experimental plans involving genetically modified organisms with the Cartagena Act through the safety committee Requirement for R&D personnel to complete annual training and research ethics training programs	－
Ecosystem	Nature / NP	Upstream	Transition – Policy / Market	Higher procurement costs	Higher raw material procurement costs and supply shortages due to stricter regulations on agricultural land development	Qualitative	Implementation of sustainability surveys of key business partners, including the promotion of environmental management Assessment of human rights and environmental risks at the start of business relationships and establishment of a business partner management system based on risk monitoring	－
				Higher response costs related to the use of regulated materials	Higher costs to respond to concerns over environmental destruction and pollution in the supply chain and to meet demand for sustainably certified raw materials	Qualitative		－
		Own Operations	Transition – Legal Liability	Higher penalties for illegal waste disposal	Higher penalties for improper waste handling, including genetically modified organisms, at research institutes and pharmaceutical manufacturing plants	Qualitative	Establishment of internal regulations for experiments using genetically modified organisms Appropriate handling of genetically modified organisms in accordance with the Cartagena Act Review of the compliance of experimental plans involving genetically modified organisms with the Cartagena Act through the safety committee Requirement for R&D personnel to complete annual training and research ethics training programs	－

• ^*Adopted Nature Scenarios: Nature-Positive (NP) scenario and Business-as-Usual (BaU) scenario
• ^*[Impact Severity Criteria] For quantitatively assessed items: Negligible (< 100 million JPY), Minor (≧100 million JPY and < 5 billion JPY), Medium (≧5 billion JPY and < 10 billion JPY), and Major (≧10 billion JPY and < 30 billion JPY). For qualitatively assessed items: Indicated as “Qualitative”.
• ^*[Operational Risk] Climate change-related risks are generally assessed based on its impact, likelihood of occurrence, and our resilience. Nature-related risks are not assessed (indicated as “-“) as methods for assessing quantitative impacts and resilience have not been established.

Metrics and Targets

The Group has established EHS management targets under the 6th Mid-Term Plan, which serve as indicators and targets to assess and manage potential climate- and nature-related risks and opportunities for its business operations. Targets for mitigating climate change have been validated by the Science Based Targets initiative (SBTi) as science-based GHG emission reduction targets aligned with the 1.5°C target of the Paris Agreement. Other nature-related targets are set to address each material issue and contribute to the realization of a nature-positive society.
The Group is committed to monitoring progress against these targets and assessing the need for additional measures to advance its environmental management, taking into account climate-nature synergies and trade-offs.

Progress of Quantitative Targets

Material Issue	Metrics	FY2030 Target	Base Year	Most recent year(FY2024)
Climate Change	CO2 Emissions （Scope1＋Scope2）	△63％ compared to the FY2015 baseline	－％ (202,927 t-CO2,FY2015）	△42.7％ (116,312 t-CO2）
	Renewable Electricity Usage	100％	4.7% （FY2015）	79.9%
	Rate of suppliers with 1.5°C-aligned targets (Scope3, Cat1, 2, and 4)	70.6%	－％	50.4%
Water Resources	Water Withdrawal Intensity per Revenue	△10％ compared to the FY2025 baseline	－％	－％ （0.000427 Thousand ㎡/million yen）
Resource circulation	Industrial Waste Generation Intensity per Revenue	△10％ compared to the FY2025 baseline	－％	－％ （0.007 t/million yen）
	Hazardous Waste Generation Intensity per Revenue	△10％ compared to the FY2025 baseline	－％	－％ （0.002 t/million yen）
	Plastic Waste Recycling Rate	Maintain at 75% or above	－％	77.8％

Outline of Qualitative Targets

Please refer to Environmental Vision & Goals for other EHS management targets under the 6th Mid-Term Plan not listed above.

• *For detailed and supplementary information on the individual TCFD and TNFD disclosures, please refer to the Environmental Data Book 2025.