Integrated Report2022About the Meiji Group

Contents

The Meiji Group’s Vision and Health Value

Group Philosophy

We Will Provide Health Value to All Stakeholders

Our mission is to widen the world of“Tastiness and Enjoyment” and meet

Healthy Society

all expectations regarding “Health and Reassurance.”• Thriving communities(Partnership with local
communities, social
contribution activities)• Sustainable sourcing• Build mutual trust in
relationships withbusiness partners

Our wish is to be closely in tune withour customers’ feelings and to always be there
to brighten their daily lives.
Our responsibility as “Food and Health” professionals
is to continue finding innovative ways to meet ourcustomers’ needs, today and tomorrow.

Health of Employees• Establish a workplaceenvironment where each
employee can demonstrate
their strengths and skills• Establish a workplaceenvironment where
employees can stayhealthy both mentallyand physically

Healthier Lives
for Customers

Shareholders& Investors• Live longer, healthier lives• Lead healthy,
fulfilling lives• Tastiness and enjoyment• Product safety andreassurance• Sustainable growth• Sound financial base,enhanced capitalefficiency, and stableprofit return

SHARE

What Is Meiji Unique Valuefor Wellness?
Global Environmental
HealthOur goal is to deliver Meiji unique value forwellness to all stakeholders through the cycle ofCure, Care, and Share. Cure and Care meancontributing to customers’ physical and emotional
well-being for all generations, from babies to the

CURE

CARE

• Caring for the earth(Environmental conservation,
reduced environmental
burden, and biodiversity
conservation)• Sustainable sourcing

elderly. We will support everybody as much as andas long as possible and bring them healthy, happy
smiles. Share means having people spread smiles
around them. We will link individual health tothe smiles of people all over the world. This is
Meiji unique value for wellness.

Meiji Holdings Co., Ltd.｜Integrated Report 2022 01

About the Meiji Group

Contents

Editorial Policy
Since 2018, Meiji Holdings Co., Ltd. (the Company) has beenissuing the Integrated Report and will continue to replace theAnnual Report. After celebrating our 100-year anniversary, theMeiji Group will seek further growth. In this report, we havecompiled financial and non-financial information focusing on
the Value Creation Story that has led us to sustainable growth.
Reference Guidelines:• IFRS Foundation Integrated Reporting Framework• Task Force on Climate-related Financial Disclosures (TCFD)

Using the Integrated Report 2022
• This report is based on the performance results from FY2021(fiscal year ended March 2022). Some content is also included
from FY2022 (fiscal year ending March 2023).
• The content is compiled based on information that is available
at the time when the Company created the Integrated Report
2022. Therefore, please note that the actual results may bedifferent from the Company’s forecast. The information in thereport is current as of August 2022 unless otherwise specified.
• The Accounting Standard for Revenue Recognition (ASBJ
Statement No. 29, March 31, 2020) and related implementation
guidance are being applied as of FY2021. Unless otherwise
stated, through to FY2020, these standards do not apply, andfrom FY2021 onward, these standards apply.

The Meiji Group’s Information Disclosure
The Integrated Report provides important information to our company and stakeholders. For financial statements and otherinformation with an independent auditor’s report, please refer to the Annual Securities Report. For more detailed information
about the Meiji Group, please refer to our websites.
High
Importance tostakeholders

Integrated Report

WebsitesHigh

Investors

About the Meiji Grouphttps://www.meiji.com/global/investors/

Please visit our websites for details of the MeijiGroup’s mission and vision, slogan, management
structure, business domains, history, and otherinformation.

https://www.meiji.com/global/sustainability/
Our Commitment
Sustainability Management
Healthier Lives
Caring for the Earth
Thriving Communities
Sustainable Sourcing
Collaboration
ESG Index

About the Meiji Group

About Meiji

Meiji Holdings Co., Ltd.

https://www.meiji.com/global/

Meiji Co., Ltd.

https://www.meiji.co.jp/(Japanese version only)

Sustainability

Our Initiatives to Support
Sustainable Value Creation
About the Meiji Group
01 The Meiji Group’s Vision and Health Value
02 Editorial Policy /The Meiji Group’s Information Disclosure
03 Contents
04 Achieving Our Goals in 2026 Vision
06 At a Glance
08 History of Value Creation and Market Presence

Message from the Management
12 Message from CEO
18 Message from CFO
20 Overview of 2023 Medium-Term Business Planand Meiji ROESG

Value Creation Process

Our websites provide detailed and comprehensive information on our corporate profile, financial
information, corporate governance, sustainability-related information, the latest news, etc.

Year in Review
Financial Performance
Results & Presentations
Invest in Meiji
Business Plans
Governance
Stock Information
M&A and Alliances

02

The Meiji Group works on pursuing sustainableimprovement of corporate value. We describe ourvalue-creating efforts in the Integrated Report. We
hope you enjoy our story and deepen yourunderstanding of the Meiji Group.

Websites

Importance to the Meiji Group

Integrated Report

Contents

Meiji Seika Pharma Co., Ltd.

https://www.meiji-seika-pharma.co.jp/(Japanese version only)

KM Biologics Co., Ltd.

https://www.kmbiologics.com/en/

24 The Meiji Group’s Process for Value Creation
26 The Meiji Group Value Chain
28 Financial and Non-Financial Highlights(Main Indices)

Progress for 2023 Medium-TermBusiness Plan
30 Food Segment Business Strategies
34 Pharmaceutical Segment Business Strategies
38 Sustainability Strategy

42 Human Capital Management
43
Diversity & Inclusion
44
Human Capital Development
Health and Productivity Management /45
Employee Engagement

46 Intellectual Property Management
47
Food Segment
49
Pharmaceutical Segment
50 Coexisting with Nature
51
Climate Change Initiatives
54
Biodiversity Initiatives
56
Supply Chain Management
58 TCFD Initiatives
59 Respect and Promote Human Rights

Corporate Governance
60 Directors andAudit & Supervisory Board Members
62 Responsibilities of Members of the Board andAudit & Supervisory Board Members
64 Three-way Discussion with Outside Directors andan Outside Audit & Supervisory Board Member
68 Corporate Governance
78 Risk Management
81 Compliance

Financial and
Non-Financial Performance
82 Financial and Non-Financial Highlights(11 Years Summary)

84 Non-Financial Performance(Progress on Materiality)

87 Independent Practitioner’s Assurance ofEnergy Consumption, CO2 Emissions,
Water Consumption & Industrial Waste

Corporate Information
88 Operating Bases and Group Companies
90 Corporate Data / Stock Information
91 Cover Artwork / Publisher’s Note

Meiji Holdings Co., Ltd.｜Integrated Report 2022 03

About the Meiji Group

Contents

Achieving Our Goals in 2026 Vision

The Meiji Group
2026 Vision

In FY2018, the Meiji Group created the Meiji Group 2026 Vision as a strategy to maximize our strengths togrow further. We will follow through with the Business Plan and achieve the 2026 Vision successfully.
Consequently, we will improve our corporate value over the medium- and long-term.

Long-term Vision - The Meiji Group’s Ideal Corporate Identity

Roadmap to Realize the Meiji Group 2026 Vision
We are formulating three Medium-Term Business Plans to realize the Meiji Group 2026
Vision. The Plan in the first stage began in FY2018 and ended in FY2020. We are now

The Meiji Group will combine the strengths that we have cultivated over the past 100 years withthe latest technology and findings. Thus, we will create innovative ways to meet our customers’
needs through food and health. In this way, we will grow in Japan and worldwide sustainably.

Key Strategies

implementing the 2023 Medium-Term Business Plan, the second stage.

2026
2023
The 3rd stage

2020

The Meiji Group
2026 Vision
Long-term Vision The Meiji Group’s Ideal
Corporate Identity

The 2nd stage

2018
The 1st stage
Address strategic issues
continuously and challenge
for the further growth

Promote the Meiji ROESG® Management effectively

Message from CEO
See page 12 for details

See page 20 for details

Three social trends are expected to
impact the Meiji Group business on
the path to 2026. The COVID-19
global pandemic from 2020 has
created enormous uncertainty.
However, we will adapt quickly tothe changing business environment
and undertake appropriate
management to achieve the MeijiGroup 2026 Vision and meetstakeholder expectations.

single-digit (CAGR)

Overseas
sales ratio

Target at

20 %Maintain 10 % or more

ROE

1. Secure an overwhelming
advantage in core businesses
2. Establish growth foundationin overseas markets
3. New challenges in thehealth value domain

To promote;• Use external resources• Increase productivity significantly

Business
Vision● Establish functional, strategic
management system to grow

4. Social contributions● Healthier Lives● Caring for the Earth● Thriving Communities

Sustainability
Visionsustainably in Japan and globally
Management
Foundation ● Develop work environment,
in-house system, and
Visionorganizational climate tomaximize individual potential● Enhance the Meiji brandChanges in social structure - Aging

2023 Medium-Term Business Plan, the 2nd Stage• 30% of Japan’s population will be 65 years or older by 2025
• Aging population is a common issue throughout the world

Concept

Increased health consciousness and disease prevention

Key Issues• Rise in diseases and disorders due to changes inlifestyle and dietary habits• Increasing awareness and focus on prevention andliving longer, healthier lives

Growth of the global middle class• Rising level of income in emerging countries such as
China and India• Growing demand for non-essential or luxury grocery items andhealth-related products

Mid to highStructure of the Meiji Group 2026 Vision

Realize both profit growth and sustainability activities

Overview of 2023 Medium-Term Business Plan and Meiji ROESG

ImportantOperating Environment

1. Secure an overwhelming advantage
in core businesses
2. Establish growth foundationin overseas markets
3. New challenges in the health value domain
4. Social contributions

Operating profit
growth rate

See page 20 for details

Promote the Meiji ROESG® Management effectively
Realize both profit growth and sustainability activities
1. Business
Strategy

Food
Segment
Pharmaceutical
Segment

Group-wide

1) Recover from the stagnation in our core business
2) Expand overseas business1) Integrate business operations of
Meiji Seika Pharma and KM Biologics(expand vaccine business)
2) Expand CMO/CDMO
Venture into new domains

2. Improve business management using ROIC effectively
3. Invest to grow business while constructing strong financial base
4. Promote the Meiji Group Sustainability 2026 Vision* ROESG is a registered trademark for a management indicator developed by Kunio Ito, a professor at Hitotsubashi University.

04

About the Meiji Group

Meiji Holdings Co., Ltd.｜Integrated Report 2022 05

About the Meiji Group

Contents

At a Glance
Our corporate group consists of Meiji Co., Ltd. which runs the Food business, and Meiji Seika PharmaCo., Ltd. and KM Biologics Co., Ltd. which run the Pharmaceutical business. Our mission is to widen
the world of “Tastiness and Enjoyment” and to meet all expectations regarding “Health and Reassurance”
by providing a wide range of products that are essential in people’s lives, such as dairy products,
confectioneries, nutritional products, and pharmaceuticals.
Meiji Holdings is a pure holding
company that was established in 2009
after integrating the management for
Meiji Seika Kaisha, Ltd. and Meiji Dairies
Corporation. The Company underwent
business reorganization in 2011, and KM
Biologics Co., Ltd. joined the Group in
July 2018, leading to the current Groupstructure.

Group Organization(As of March 31, 2022)

Meiji Holdings Co., Ltd.

Food Segment

Pharmaceutical Segment

Meiji Co., Ltd.

Meiji Seika Pharma Co., Ltd.

The Number of the Group Companies and Employees (As of March 31, 2022)
The number of the Group companies is the number of consolidated companies and entities accounted for by the equity method.
The number of the employees includes all consolidated companies.

The U.S.

Europe3 companies
636 people

4 companies
272 people

33

companies

The Number of the Group Employees

17,336This segment develops our ethical pharmaceuticals
business globally, covering products such as
antibacterial drugs, drugs for central nervous
system (CNS) disorders, generic drugs, and vaccines.
It also promotes the veterinary drugs business.

peopleFood
Segment¥ 1,013.0billion DOWN 15.0%

Pharmaceutical
Segment

19 %*11,811 people¥ 92.9billion
ROE

13.5

%

06

About the Meiji Group

year on year

81 %Pharmaceutical
Segment

DOWN 12.4%

20 %

Food
Segment

80 %Profit Per Shareyear on year

UP 2.4pt¥ 607.24

6.4%

Pharmaceutical
Segment

21.5

%

Food
Segment* Up 0.6% if revenue recognition standards are also
applied to net sales in the previous fiscal year

Operating Profit

30 companies* Including Meiji Holdings Co., Ltd.

Results for FY2021 (Fiscal Year Ended March 2022)

year on year

Japan
*

Overseas Sales Ratio (FY2021)

Net Sales

26 companies
4,617people

The Number ofOverseas Group Companies

KM Biologics Co., Ltd.
This segment provides our customers of all ages
from infants to the elderly, with a wide variety of
products that include infant formula, milk and dairy
products, confectioneries, sports nutrition products
and enteral formula.

Asia / Oceania

year on year

UP 34.2%

External Evaluation of ESG
The Meiji Group believes that addressing social
issues actively through businesses will lead tosustainable growth. In the 2023 Medium-TermBusiness Plan, we set the Meiji ROESG as our top
management goal. We are aiming to realize bothprofit growth and sustainability activities. These
efforts have been received positively by
third-party evaluation organizations. As a result,
we have been included in ESG indices in Japanand overseas.
P.20 Overview of 2023 Medium-Term Business Planand Meiji ROESG

P.38 Sustainability Strategy

Meiji Holdings Co., Ltd.｜Integrated Report 2022 07

About the Meiji Group

History of Value Creation and Market Presence* Began manufacturing processed cheese in 1932

The Meiji Group has built more than 100 years of history. Throughout our history, we have solved social issues
related to health by promoting innovation. We have also gained a large market share by launching innovative
products. We will grow by creating Meiji unique value for wellness.

1920

1960

1923

The infant formula Patrogen was created.
How can we create infant formula that is as close
to breast milk as possible? We have continued todevelop and improve Patrogen since its launch
in 1923 based on our consistent desire to solve
nutritional deficiencies in babies.

1926

Food Business

Meiji Milk Chocolate
was launched.
This product has been a core product since ourfounding, when we aimed to popularize Western
confectionaries. Chocolate products weresuccessively launched after the launch of Meiji
Milk Chocolate, laying the foundation for “Meiji
chocolate, best of the best.”

1928 Meiji Milk was launched.
Pasteurization of drinking milk became
mandatory in 1928. We constructed apasteurization plant for raw milk after
obtaining approval under the MilkBusiness Control Regulations. The
production and sale of Meiji Milk started.

Yogurt1980

Based on INTAGE Inc., SRI (yogurt market)
April 2021–March 2022 market share(money amount)1973

In 1971, we launched Meiji Plain
Yogurt, which was developed inorder to make plain yogurt in
Bulgaria, the birthplace of yogurt. We
are constantly developing including
the creation of our unique innovation“Maroyaka Tannen Hakkou (Smooth
Careful Fermentation).”no Yama1975 Kinoko(Chocorooms) was launched.
no Sato1979 Takenoko(Chococorns) was launched.

2000

*

No.1 in Japan 38.8%

2000

Based on Meiji data as of March 2022

Meiji Probio Yogurt LG21 was launched.

1992 Meiji Hokkaido Tokachi Cheese

was launched.
Meiji Hokkaido Tokachi
Camembert Cheese was launched.

Meiji Probio Yogurt LG21 has created new health value, thereby
expanding the possibility of lactobacilli and cultivating new markets.

2002

The drinking milk Meiji Oishii Gyunyu was launched.
Although everyone knows milk is nutritious, some people
don’t like milk very much. We established the Natural Taste
Manufacturing Process to minimize sacrificing the flavor of
fresh milk. Using this method, Meiji Oishii Gyunyu has
realized the deliciousness of raw milk right after milking.

Powdered & Since 1980
Granulated Protein

No.1 in Japan 34.3%
Based on Meiji data as of March 2022

Meiji Bulgaria Yogurt
was launched.

Since

1992

These products were developed with raw milk from theTokachi region of Hokkaido Prefecture. With theseproducts, we aim to establish a new cheese culture.

Since 1950

No.1 in Japan 38.6%

Camembert
Cheese1994

Meiji Essel Super Cup
Ultra Vanilla was launched.
This ice cream is delicious andaffordable. Its wide variety offlavors is also appealing.

1980

SAVAS series, sports protein
for athletes, was launched.
SAVAS was developed based on
sports nutrition for athletes. We are
currently expanding our productlines for a variety of users, including
people who like exercise.

Kinoko no Yama and Takenoko no
Sato, inspired by nature andhometowns, were a big
hit following their launch.
They pioneered a new
genre of chocolate snacks.

1998

The high cocoa
content
chocolate Chocolate Kouka
was launched.

Contents

1995

The enteral formula
Mei Balance was launched.
Mei Balance is to substitutemeals at hospitals and nursing
homes. The products pursue
nutrition, function, and tastiness.

ChocolateSince 1926

No.1 in Japan 24.8%
Based on INTAGE Inc., SRI (chocolate market)
April 2021–March 2022 market share(money amount)

Chocolate Kouka is seeking the health value of cocoa polyphenol.
Consumers enjoy the strong flavor and taste of cocoa beans, while
gaining health benefits.

2007

The cube-type infant formula
Meiji Hohoemi Raku Raku Cube
was launched.
Meiji Hohoemi Raku Raku Cube is the world’s first cube-type infant
formula. It is a revolutionary product that has the same nutritional
functions as conventional powdered formula but without the
mistakes and hassles of measuring.

2008

Meiji Fresh Cream Ajiwai
for professional use was launched.
This product is produced using the Meiji Ajiwai Production Method,which concentrates the delicious taste of raw milk. This method
achieves a rich milk flavor and refreshing aftertaste.

2006
Since 1946
Systemic
Antibacterial Drugs

Pharmaceutical Business08

Influenza
Vaccine

Since

1972

No.1 in Japan 35.5%

1946

Startedmanufacturing Penicillin

About the Meiji GroupWe promoted penicillin research during
World War II and started manufacturing
Penicillin in 1946 after obtaining
production approval. Later, wedeveloped a number of antibiotics,
including STREPTOMYCIN MEIJI in 1950,
KANAMYCIN MEIJI in 1958, and PANIMYCIN
in 1975. These antibiotics saved many
human lives from the post-war to higheconomic growth period in Japan.

Copyright © 2022 IQVIA.
Source: Calculated based on JPM 2022
Mar MAT Market scope as
defined by Meiji Seika Pharma* Reprinted with permission

Genetically modified
hepatitis B vaccine
Bimmugen was launched.
Bimmugen is Japan’s first geneticallymodified hepatitis B vaccine
developed by applying genetic
recombination technology. It has
been adopted for regular vaccination
since October 2016.

1972

Influenza HA Vaccine
was launched.
The Influenza HA Vaccine wasdeveloped to improve the efficacy
and safety of the influenza vaccine at
the time. It contributes to theprevention of infection and serious
illness, particularly in high-riskelderly and children.

No.1 in Japan 19.4%

1988

1989

The benzodiazepine
derivative antianxiety
drug MEILAX was launched.
As the aging population grows, we
extended our product lines to include
central nervous system drugs to
improve product mix beyond justantibiotics.

1994

The antibiotic
MEIACT was launched.

Copyright © 2022 IQVIA.
Source: Calculated based on JPM 2022
Mar MAT Market scope as
defined by Meiji Seika Pharma* Reprinted with permission

When we launched MEIACT, we promoted its feature, which is potent
antimicrobial activity against Staphylococcus aureus. Later we foundthat it demonstrates antimicrobial activity against penicillin-resistant
Streptococcus pneumoniae and beta-lactamase negative
ampicillin-resistant Haemophilus influenzae. MEIACT is currently sold in
more than 20 countries and areas.

Sulbacillin for intravenous injection,a beta-lactamase inhibitor combination
antibiotic preparation, was launched.

(Ampicillin sodium/sulbactam sodium for injection)
A penicillin antibiotic that produces antibacterial activity throughthe inhibition of bacterial growth by blocking bacterial cell wall
synthesis.

2008

The high blood pressure medication
AMLODIPINE MEIJI was launched.
We entered the generic drugs business, where we provide
convenient, high-quality, low-priced generic drugs based ontechnologies developed through new drug development.

1999

The antidepressant drug
DEPROMEL was launched.
DEPROMEL is Japan’s first selective
serotonin reuptake inhibitor (SSRI).

2009

The antidepressant drug
REFLEX was launched.
REFLEX is classified as the only noradrenergic and specificserotonergic antidepressant (NaSSA).

Meiji Holdings Co., Ltd.｜Integrated Report 2022 09

About the Meiji Group

Contents

History of Value Creation and Market Presence

New Initiatives in Progress
2009

Meiji Probio Yogurt R-1 was launched.
Meiji Probio Yogurt R-1 led the functional yogurt boom. It uses
lactobacilli that was selected from more than 6,000 varieties andwhich produces exopolysaccharides (EPS) with new possibilities.

Meiji Hohoemi
Raku Raku Milk was launched.
Meiji Hohoemi Raku Raku Milk is Japan’s first steel
can-type liquid milk formula. It achieves nutrition
designing technology that is equivalent to Meiji Hohoemi(powder and cubes).

Meiji The Chocolate was launched.
Meiji The Chocolate combines cocoa beans from different producing
areas and various processing methods in order to produce richflavor.

2020

Meiji TANPACT series
was launched.

2015

SAVAS Milk Grapefruit Flavor
was launched.

Protein intake among Japanese people today has declined to thelevel of the 1950s. The TANPACT brand contributes to solving
undernutrition, a current social issue. It has a product line thatallows consumers to enjoy delicious protein anytime andanywhere.

Food Business

Food Business

2014

2019

We launched SAVAS Milk according to our research results on milk
protein. Milk protein is contained in drinking milk and dairy
products. Its packaging was designed to be easy to drink during
exercise, and it helps to build physical strength.

2014

The blood plasma product Byclot(Human Coagulation Factor VIIa
containing Factor X) was launched.

2015

The beta-lactamase inhibitor combination
antibiotic preparation
TAZOPIPE Combination for I.V. Infusion “MEIJI”
was launched.

Bilanoa has histamine H1 receptor
antagonist action and improves allergic
rhinitis, hives, and itchy skin. An OD tablet
that can be taken without water was
launched in 2021.

(Tazobactam piperacillin for injection)

This product is an antibiotic that acts in asterilizing manner by inhibiting bacterial cellwall synthesis. It also contains an ingredientthat inhibits the enzyme beta-lactamase. The
enzyme degrades antibiotics and is produced bysome bacteria.

2016

Treatment for schizophrenia
SYCREST was launched.
SYCREST is Japan’s first sublingual atypicalantipsychotic tablet with proven efficacy
and safety.

10Anti-allergic drug, Bilanoa, was launched.

About the Meiji Group

2021

Anti-malignant tumor agent
Hiyasta Tablets was launched.
This product is an oral hematologic
oncology agent that is suitable foroutpatient cancer treatment. It is effective in
relapsed or refractory adult T-cellleukemia-lymphoma, and relapsed or
refractory peripheral T-cell lymphoma.

Pharmaceutical BusinessPharmaceutical BusinessThis product is a bypass hemostatic agent used for hemophilia with
inhibitors. It is designated as an orphan drug.

2016

The Meiji Group is currently promoting a variety of new initiatives to realize
our slogan, Now ideas for wellness.

Open Innovation

Developing Overseas Business

Investment in Agri-Food Tech Fund

Expanding Product Lines in China

In March 2022, Meiji Holdings Co., Ltd. invested in a fundestablished by AgFunder Asia Pte Ltd., a venture capital firmin Singapore, and SDG Impact Japan Inc., an impact
investment firm in Japan. The investment targets emerging
start-ups in the agriculture and food sectors. Through thisfund, we will build relationships with start-ups andaccelerate open innovation.

Since protein and yogurt markets are
growing in China, we launched SAVAS in
August 2020, and Meiji Probio Yogurt R-1
and Meiji Probio Yogurt LG21 in April 2021.

Investment in Cocoa Cell Culture Start-Up
In November 2021, Meiji Holdings invested in California
Cultured Inc., a cocoa cell culture start-up in the U.S. The global
food production system is likely to undergo major changes in
the future due to increased environmental awareness and rapid
technological development. With this investment, we aim to
jointly create sustainable raw material procurement andfunctional products by combining California Cultured’s
cutting-edge cellular agriculture* technology with the Group’s
technologies and knowledge.

Cube-Type Infant Formula Launched in
ThailandWe launched Meiji GU FORMULA GOLD
EZcube 3, a cube-type infant formula, inFebruary 2022. This product is designed inaccordance with international standards
for nutrients required for children aged 1-3
years.

Cube-Type Infant Formula
Business Partnership with Danone* Cellular agriculture: A new technology to produce animal-sourced foods andother agricultural products from cell cultures.

We have worked with Danone on specificinitiatives for a business partnership in theEuropean market. In March 2021, welaunched Pre-Measured Milk Tabs, Aptamilin the U.K. Aptamil is Danone’s main brandof infant formula.

Vaccine R&D

Business Partnerships

KD-414, Inactivated Vaccine Against COVID-19

Partnership with BiPSEE to Commercialize
VR Product for Depression Treatment

KM Biologics Co., Ltd. and Meiji Seika Pharma Co., Ltd. aredeveloping KD-414, an inactivated vaccine against COVID-19.
The two companies have confirmed the efficacy and safety of
KD-414 in Phase II/III clinical studies. The companies plan to filefor approval as soon as possible, considering the progress ofclinical studies and other factors.

KD-370, 5-in-1 Vaccine
In April 2022, KM Biologics filed KD-370, a pentavalent vaccine
for approval (the second such vaccine in Japan). The vaccine is
expected to ease the burden on children and their families byreducing the number of childhood vaccinations when it
becomes available.

Joint Research with Academia (Open Innovation)
Launching Joint Research Project with Hiroshima
University to Establish New Preventative Method
for Depression
Meiji Seika Pharma aims to develop a new preventative methodfor depression. The company is tackling this by combining
sensitivity brain science and digitaltechnology, led by Dr. Shigeto Yamawaki,
an authority on psychology at Hiroshima
University (far left).

In April 2022, Meiji Seika Pharma announced a business
partnership to commercialize the VR product for depression
treatment that is under development by BiPSEE Co., Ltd. The
company is aiming to establish a new treatment method for
depression by applying advanced visual simulation through VR.

Beginning to Offer BlueDot Reports for
Medical Professionals
Meiji Seika Pharma began offering reports from Canada’s
BlueDot Inc. for medical professionals in December 2021. This
extremely reliable report collects and analyzes important
information about infectious diseases in Japan and abroad ontime.

Stable Supply of Penicillin Antibacterial Drugs
Production of Penicillin Raw Material at Gifu Plant
Meiji Seika Pharma is preparing to produce 6-APA, a common
raw material for penicillin antibacterial drugs, at its Gifu Plant.
The domestic production of 6-APA, which is currently
dependent on overseas supply, will ensure its stable supply.
Production is planned to begin by 2025.

Meiji Holdings Co., Ltd.｜Integrated Report 2022 11

Message from the Management

Contents

Message from CEO

Developing to Create
Value for Wellness that
only Meiji can Provide
Pursuing the Meiji ROESG® andIntegrating Sustainability Activities with Management

Kazuo KawamuraCEO
President andRepresentative Director

In the 2023 Medium-Term Business Plan that started in FY2021, we set the Meiji
ROESG*1 as our top management target. We were successful in thoroughly
communicating our ESG-oriented stance internally and externally. This is a majorachievement of the first year of the 2023 Medium-Term Business Plan. Under the Meiji
ROESG, we selected five ESG indicators provided by third-party evaluation
organizations and set KPIs. In FY2021, we received higher ratings in four indicators
than those in the previous fiscal year. I believe enhancing disclosures of non-financial
information including ESG is equally as important as improving financial metrics.
Both of these will directly enhance our corporate value.
Ultimately, the significance of the Meiji ROESG is to improve ROE throughsustainability activities. For example, we should pursue realizing growth
opportunities through TCFD*2 analysis, not just completed numerical data. I want toinstill the attitude to integrate sustainability activities and management throughout
the Group. Accordingly, we will create great business opportunities and establish
a sustainable growth model focusing on the Meiji ROESG.
*1 ROESG is a registered trademark for a management indicator developed by Kunio Ito, a professor at
Hitotsubashi University.
*2 The Task Force on Climate-related Financial Disclosures, which the Meiji Group expressed support for in 2019.

Clarifying the Meiji Group’s Purpose with the New Slogan,
Now Ideas for Wellness
The Meiji Group revised its slogan to Now Ideas for Wellness in June 2021. This slogan
clearly expresses the Group’s purpose of contributing to solving global health issues.
It is a simple yet profound slogan tied to one of the Group’s founding spirits,“Contribute to the Country through Nutrition.” It is important to appropriately
express our individuality and gain a shared understanding from our stakeholders. In
this way, we will overcome the tough competition among companies. Employees are
inspired and motivated by this slogan. I am confident that the Group will develop
through this slogan. Since it covers everything from food to pharmaceuticals, a senseof unity within the Group will be fostered gradually. Thereby, we are clearly aware of
our purpose.
In today’s society, people are facing various health issues. Therefore, we should
provide Meiji unique value for wellness. Each employee is advancing to the next stepfrom our former slogan, Make Life Lively. Although it is still a bit unclear even for me,
I am starting to see the value for wellness that only the Group can create.

12

Message from the Management

Meiji Holdings Co., Ltd.｜Integrated Report 2022 13

Message from the Management

Contents

Message from CEO

Recovering the Growth Trajectory of Core Businesses andPromoting Structural Reform
Food Segment:
Recovering the Growth Trajectoryby Proposing New Products andStrengthening Global Expansion
We are facing various changes occurring simultaneously,
such as living with COVID-19, soaring raw materials costs,
rising energy costs, and a weakening yen. These factors
significantly impact business management. Of course, weshould carefully address these immediate changes.
However, the most effective measure for overcoming
these changes is to accelerate corporate transformation
toward a vision that should be realized in the medium- tolong-term.
Our key strategy in the Food segment is to increase theadded value of Health and Nutrition products and torespond to the shrinking food market in Japan. Our threecore businesses, Yogurt/Functional yogurt, Chocolate,and Nutrition, are superior to competitors in terms ofintangible assets as well as the market credibility anddevelopment ability that have been cultivated to date.
Intangible assets include Meiji’s brand power, R&D
capability, and production technology. However, we arefacing challenges in proposing new products that
stimulate market demand. In the Yogurt/Functional
yogurt business, we will restore the growth trajectory byoffering new products and strengthening long-selling
products. In the Nutrition business, we will grow theSports Nutrition area further. In addition, we will continue
to increase sales of infant formula and enteral formula,which have been growing steadily. In the Chocolate
business, our focus is on cocoa, such as increasing sales ofhigh cocoa content products and initiatives towards
sustainable cocoa procurement. We will evolve ourbusiness to provide value that only Meiji can provide.
For global expansion, we are currently expanding our
production capacity in China and are expanding thecountries where we operate our Nutrition business.
During the 2023 Medium-Term Business Plan, we areestablishing a growth foundation in overseas markets. We
will steadily strengthen our sales structure anddevelopment system to expand sales from FY2024
onward. Then, in the next 2026 Medium-Term Business
Plan, we will achieve a contribution to profit.
Page 30

14

Food Segment Business Strategies

Message from the Management

Pharmaceutical Segment:
Concentrating Resources on
the Infectious Disease Area andStabilizing Revenue BaseDue to a prolonged global pandemic, a fundamental
review of the healthcare delivery system andpharmaceutical supply chain is required in
the pharmaceutical industry. Under these circumstances,
the Group’s Pharmaceutical segment specializes in theinfectious disease area. We have been involved in thisarea since penicillin production began in 1946. We are
now restructuring our portfolio to achieve our purpose ofcontributing to health. We will concentrate management
resources on infectious disease, including vaccines andantibacterial drugs to stabilize our revenue base. Vaccines
are in high demand due to the pandemic. Also, a stablesupply of antibacterial drugs is required as a national
policy.
The Pharmaceutical segment has expanded into theoverseas market over the years. Consequently, we havecurrently production and sales bases in India, Indonesia,
Thailand, and Spain. If we increase the supply capacity for
vaccines and antibacterial drugs at these overseas bases,
our CMO/CDMO* business and direct sales business will
expand. As a result, we can expect further growth.
We are steadily restructuring our portfolio. In FY2021,
we transferred our agricultural chemicals business toa major chemical company. We also restructured ourveterinary drugs business. We are undertaking
a comprehensive reorganization of our R&D structure,including the consolidation and shutdown of researchlaboratories. For approximately 10 years, we havestruggled to generate stable profits due to NHI pricereduction. However, we can guarantee stable profits when
we establish a new business model consisting ofantibacterial drugs that are acclaimed in the Japanesemarket and vaccines that are developed andmanufactured by KM Biologics Co., Ltd. Furthermore, we
believe that this business model has global growthpotential.

Creating Synergy Between Food and Pharmaceuticals andEstablishing the Meiji Group’s Management Style toEnhance Corporate Value
Creating New Businesses withNew Ideas by Combining Knowledgeof Food and Pharmaceuticals
Since our management integration of the former Meiji
Seika and former Meiji Dairies in 2009, the integration of
the food areas within the Group has progressedsignificantly. Accordingly, we have achieved not only
business growth but also integration between businesses
and the creation of new value. However, the synergy
between food and pharmaceuticals, which I believe is themost important, is still insufficient.
We established the Co-Creation Center at Meiji
Holdings in 2019 to collaboratively create synergy
between food and pharmaceuticals in R&D. Researchers
in the Co-Creation Center are conducting R&D to create
evidence with the primary themes of “anti-aging,”“immune boosting,” and “microbiome.” We are expectingsome research outcomes within the 2023 Medium-TermBusiness Plan. The Co-Creation Center also serves asa foundation for open innovation with external research
institutions. There are many joint research projects inprogress that may create new health value.
Anti-aging and immune boosting are themes that
surpass the boundaries of the food and pharmaceuticalareas. We should take interdisciplinary approaches to
R&D to produce results. Today, all developed countries
are aging. People in the world are becoming aware that,in addition to vaccinations, it is also important to boost
your body’s general immune response to protect andenhance health. If we can clearly demonstrate the Group’s
collective strengths, we may create products with
unprecedented value. We don’t know whether that will bea food product, pharmaceutical, or something completely
different breakthrough yet. However, whatever the output
may be, we will continue R&D in order to contribute tosolving global health issues.

Utilizing Return on Invested Capital(ROIC) as a Group’s Common
Evaluation Indicator and Enhancing
Business Portfolio Management

There are five themes that we should focus on when
executing the 2023 Medium-Term Business Plan. The first
theme is to establish a management style appropriate for
the Group. This is necessary to continuously improve
corporate value. Until now, investment decisions havebeen made by each operating company. We will integrate
the use of ROIC with business portfolio management andthus establish a new management style led by Meiji
Holdings.
We use ROIC as a common evaluation indicatorthroughout the Group. We have the Food andPharmaceutical business. Their approach to investment
and evaluation of business profit levels differs due tothe differences in their business characteristics.
Therefore, the criteria for determining what to select andwhat to concentrate on as the Group has been unclear. In
the 2023 Medium-Term Management Plan, we will
evaluate businesses based on capital
productivity-oriented business management, instead of
the operating profit level of each operating company’s
profit and loss statements alone.
We will form a truly competitive business portfolio on
a global level using ROIC. To accomplish this, it isimportant to build an optimized business portfolio that
includes synergy among businesses. The most importantmission for management is to build the best portfolio for
us. We are working to change mindsets and spread thisconcept of business portfolio management throughout
the Group.

* CMO: Contract Manufacturing Organization
CDMO: Contract Development and Manufacturing Organization

Page 34

Pharmaceutical Segment
Business Strategies

Page 27

The Meiji Group Value Chain> Food-Pharmaceutical Synergies

Page 18

Message from CFO

Meiji Holdings Co., Ltd.｜Integrated Report 2022 15

Message from the Management

Contents

Message from CEO

Breaking Free from In-House Development and
Evolving into a Company that Continuously Innovates with
Highly Effective Corporate Governance
Promoting Open Innovation
Based on Health and Nutrition
The second theme is breaking free from in-housedevelopment in R&D and new business development andpromoting open innovation based on Health andNutrition. The Pharmaceutical segment is getting aheadof the Food segment in open innovation in R&D. In
FY2021, we implemented the bold measures of
consolidating and shutting down research laboratories. As
a result, open innovation has expanded and enriched R&D
with more new themes than before.
In the Food segment, we should have in-houseresearch laboratories because we should secure thefundamental technologies needed for production andquality control and prevent the outflow of R&D know-howthat cannot be patented. In addition, we will gather
a wide range of the latest knowledge through open
innovation with research institutions in Japan andoverseas. We have strengthened collaboration withventure companies and start-ups in FY2021. We arefocusing on alliances in both R&D and businessdevelopment. For example, we invested in a U.S. venturecompany for cocoa development, as well as in a fund to
search for venture companies and start-ups.
Under the leadership of Meiji Holdings, we will use
external resources to acquire knowledge that cannot be
obtained through the Group’s R&D alone. In other words,
it is important to break free from in-house development
and use an abundance of outside resources to discover awide range of business opportunities. I believe theaccumulation of these efforts will inspire the Group,
leading to the innovation that may dramatically grow theGroup.

Page 11

16

History of Value Creation and Market
Presence > New Initiatives in Progress

Message from the Management

Building a Corporate Governance
Structure that is Appreciated by
Stakeholders
The third theme is corporate governance. Since the startof the Meiji Group 2026 Vision, we have three targetedpillars of business growth, sustainability, and corporate
governance. In corporate governance, we should builda system that is appreciated by a wide range ofstakeholders. We are constantly reviewing andstrengthening our corporate governance system because
external evaluations continue to change.
We have applied succession planning for presidents ofthe three group companies since 2019. The Nomination
Committee, which has an Outside Director majority,
decides whether it is necessary to appoint or dismiss
the three presidents and selects succession candidates.
They are then proposed to the Board of Directors. From2022, we have elected chairpersons of the Nomination
Committee and Compensation Committee among
Outside Directors. In addition, we held an eight-monthtraining program for executive officers and senior
management to identify management competencies
within the Group. The purpose of this program is to selecta certain number of candidates and create a talent poolfor the future management. We expect that the training ofmanagement talent will improve the validity andtransparency of the selection process for potential
successors.
Furthermore, Outside Directors are important toensure management transparency and credibility. Thus,
we appointed a new Outside Director who has expertise insustainability activities and international business.
Accordingly, Outside Directors increased to four fromthe previous three to activate the Board of Directors. Also,
the Compensation Committee has decided to increase
the ratio of performance-linked remuneration for
Directors. As a result of reflecting the achievement of the
Meiji ROESG goals, the ratio of stock compensation will
increase and monetary compensation will be lowered.

Page 68

Corporate GovernanceTaking on Reforms in Human Resource Management andIntensely Leading the Evolution of the Meiji Group
Focusing on Strengthening
the Group Management Structure
and Reforming Human Resource
Management
The fourth theme is to strengthen the Group management
structure. We have strengthened the structure in Meiji
Holdings by introducing a Chief Officer system andestablishing a Group Strategy Council. Consequently, we
are achieving integrated management of Meiji Holdings’
Board of Directors and operating companies. In FY2021,
we reviewed the organizational structure of Meiji Holdings
and established the Group Human Resources Strategy
Department and Risk Management Department.
Furthermore, we reformed Meiji Holdings to lead theGroup’s sustainability activities. Therefore, we should
strengthen the Group’s management structure
throughout the 2023 Medium-Term Business Plan as animportant theme. We will develop from management thatis based on the addition of each business unit to one
based on the multiplication and pursuit of synergy within
the Group.
Finally, the fifth theme is to reform human capitalmanagement. We established the Group Human CapitalCommittee in April 2022 to implement a human capital
strategy that conforms to the management strategy. The
committee will establish human capital governance todevelop core human capital that support groupmanagement. It will also establish an organizational
culture based on diversity and inclusion. Furthermore, theCommittee promotes health management to improve
employee performance.
People are beginning to recognize that human capitalis the second most important ESG theme after theenvironment. Human capital is a source that enhances
corporate value. Therefore, we will invest in humancapital more strategically. Additionally, it is critical to link
the benefits of these investments with the Group’s
sustainable growth. Regarding to this issue, we will bestrongly challenged by the market. Thus, we arereforming human capital management throughout the2023 Medium-Term Business Plan to establish thefoundation for the next 2026 Medium-Term Business Plan.

Page 42

Evolving Further by Accomplishing
All Five Themes to Create
Corporate Value Sustainably
Nowadays, companies only survive if they create
corporate value sustainably. As stated in the Meiji Group
2026 Vision, the increase in corporate value is driven by
the three pillars of business growth, sustainability, andcorporate governance. High evaluations and sharedunderstanding from a wide variety of stakeholders are
essential to achieve the Vision.
As I have pointed out, we will focus on five themes toachieve sustainable growth. We should develop toa higher level in all our activities. As CEO, responsible forthe management, I will continuously develop with time.
I will promote management intently, knowing that there
will be no future for the Meiji Group unless we create
corporate value and continue to progress.

Human Capital Management

Meiji Holdings Co., Ltd.｜Integrated Report 2022 17

Message from the Management

Contents

Message from CFO
Investing in Growth Areas while
Pursuing Selection andConcentration Strategy in Business

Koichiro Shiozaki

CFO
Member of the Board
and Senior Managing
Executive Officer

Improving Business Management Using ROESG and ROIC,
Focusing Management Resources on Growth Areas
Achieving Profitability to Compete
Globally by Establishing the Use of
ROIC and Adopting IFRS
We introduced ROESG and Return on Invested Capital(ROIC) as performance indicators in our 2023
Medium-Term Business Plan. ROESG is the concept ofincreasing corporate value by pursuing ROE and ESG at
the same time. Improving ROE is my primary
responsibility as CFO. I have also established and am
appropriately managing an ESG investment framework topromote ESG initiatives.
We will clarify which businesses we should focus on
during the 2023 Medium-Term Business Plan. We will
focus management resources on these businesses toachieve further growth. Thus far, we have been focusing
on operating profit. As we adopted ROIC as amanagement indicator, we will develop our business
management by considering investment efficiency. In
FY2022, we will use ROIC in business management. We
will build a system for management, administrators, andfront-line employees to understand which components of18

Message from the Management

ROIC are relevant to their work and how they improve
work efficiency. Specifically, we will report ROIC andchanges in its components for each business unit.
Thereby, we make suggestions for improvement. We willthen track the status and progress of their initiatives andprovide feedback. We are establishing PDCA cycles
between Meiji Holdings and operating companies, andbetween the administration and business departments.
We will build a culture which front-line employees
improve their operations, always keeping the entire
company in mind.
We also plan to adopt IFRS, international accounting
standards. “Establish growth foundation in overseas
markets” is one of the key strategies in the Meiji Group
2026 Vision. Although our current overseas sales ratio isless than 10%, we need to adopt IFRS as we aim tobecome a global corporate group. By adopting IFRS-based
accounting standards and management systems, I want
employees to recognize that we are competing on a levelplaying field with overseas rivals.

Another objective for adopting ROIC is to use it as acommon indicator across the Group to review ourbusiness portfolio constantly. We have the Food andPharmaceutical business. Though they have distinct
characteristics, we set the weighted average cost ofcapital (WACC) at 5% and promote selection andconcentration strategies.
The Pharmaceutical segment is purposefully
restructuring its portfolio. Specifically, it transferred theagricultural chemicals business and is concentrating
management resources on the human vaccine business.
Similarly, the Food segment transferred its distribution
subsidiary in April 2022. As CFO, I have requested the
COOs of both segments to consider whether they canrevise their portfolios further. Also, I ask the COOs to
identify businesses and subsidiaries that have only
limited synergy with us or can be more successful outside
the Group. On the other hand, we will invest in businesses
with growth potential. We have sufficient funds to invest
when needed and have thus achieved a balance between
offensive and defensive on the financial side. Accordingly,
we will pursue management that increases corporate
value sustainably.
Under the 2023 Medium-Term Business Plan, we will
generate cash flows of approximately JPY 400 billion fromoperating activities in three years. The Plan is based onsales growth. In FY2022, we are focusing on increasing
sales while maintaining profit at the same level as theprevious year. We will implement our financial strategy forsales growth. To achieve this, we will maintain financial

discipline by closely monitoring cash flows fromoperating activities in both segments.

Supporting Achieving Targets by
Implementing Financial Strategy
through Optimal Capital Allocation
Under the 2023 Medium-Term Business Plan, we arereviewing our approach to capital allocation. We will
reduce cross-shareholdings by 30% based on book value
considering corporate governance and capital efficiency.
We reduced them by more than 10% based on book value
in FY2021. To increase shareholder returns, we haveincreased dividends and bought back shares ofapproximately JPY 30 billion. We will gradually increase
the current dividend payout ratio from 28% to 40% during
the 2023 Medium-Term Business Plan. We will consider
share buybacks while considering optimum capital
structure and surplus funds.
Our ROE improved significantly in FY2021, partially
due to the transfer of our agricultural chemicals business.
In FY2022, we will balance capital allocation between
appropriate profit returns and investment for growth.
Thereby, we will pursue ROE improvement. We will try
very hard to achieve the targets set out in the 2023
Medium-Term Business Plan as closely as possible. The
whole Group should take on this challenge to achievethese target and I will support the Group’s efforts. I will
monitor our financial and capital strategies to make surethat they are on track. As CFO, I will devote myself toensuring sound financial management.

2023 Medium-Term Business Plan
Financial Strategy and Capital Allocation

Cash flows
from operating
activities
Approx.
JPY 400 bn

Sale of assets(incl. cross-shareholdings)

Capitalexpenditures
JPY 274 bn

Breakdown for capital expenditures(Approved, JPY bn)

Production and quality

120

Domestic and overseas group companies 45

Food

Return toshareholders

24

Other

51
240

Pharmaceuticals

Growthinvestment

ESG investment

ESG investment

634

Depreciation (Total in three years) App. JPY

160 bn• Increase dividends and raise the consolidated dividend
payout ratio to 40%• Consider share buyback

Meiji Holdings Co., Ltd.｜Integrated Report 2022 19

Message from the Management

Contents

Key Issues in the 2023 Medium-Term Business Plan

Overview of 2023 Medium-Term Business Plan and Meiji ROESG

1. Businessstrategy

Medium-Term Business Plan Progress

Importance to stakeholders

The 2023 Medium-Term Business Plan is based on the concept of promoting the Meiji ROESG Management effectively. In
formulating the Plan, the Meiji Group decided on its direction that contributes to helping solve social issues globally. Thisway, we will realize the materiality for stakeholders
Importance to businessand the Group at the same time. This is the guiding
principle of our management strategies. According toImportancethis direction, we formulate and implement businessIncorporated into
to businessbusiness strategy,
strategy, financial strategy, and sustainability strategy.
financial strategy,
We introduced the Meiji ROESG as theand sustainability
strategy for the 2023
management indicator with the highest priority. The
Medium-Term
Meiji ROESG consists of three components: ROE, which
Business Plan
represents earning power; the degree of achievementof ESG goals; and indicators unique to the Meiji GroupSee page 21 for key issues(see the figure below). We aim to grow profit, improve
Importance toin the 2023 Medium-Term
ESG indicators, and achieve sustainability goals.
Business Plan
the Meiji GroupSee page 38 for materiality
related to social issues

3-year average value* ROESG is a registered trademark for a management indicator
developed by Kunio Ito, a professor at Hitotsubashi University.

Achieve
ESG goals

Indicators
unique to Meiji

Establish the coefficientaccording to the numberof achieved goals

Add 1 pt foreach indicator achieved

Achieve 5: x1.2
Achieve 4: x1.0
Achieve <4: x0.8

We have chosen the five indicators below, striving to strengthen our
initiatives and improve our information disclosure.
Evaluation indicators
MSCI ESG
Ratings

ESG ratings calculated by MSCI,a financial service firm in the U.S., basedon information disclosed by companies

DJSI

An ESG investment index developed by
U.S.-based S&P Dow Jones Indices andRobecoSAM, a Swiss investment
advisory company

FTSE4Good
CDP(Climate Change)
CDP(Water Security)

20

Reason for
selection

Message from the Management

We established six indicators related to the social
issues that the Group can contribute to helping
solve, as well as human capital, which is thedriver for corporate activities.
Indicators
Extend healthy life expectancy

Comprehensive
evaluation
indicators

An ESG investment index announced by
FTSE International, a subsidiary of the
London Stock Exchange
An information disclosure programprovided by CDP, an international
non-profit organization headquarteredin the U.K., regarding environmental
activities conducted by major global
companies(Points will be added only
in FY2023)

Indicators Unique to Meiji

ESG indicators

Amount of protein intake
Vaccination rate for influenza
vaccines

Reason for
selection
Evaluation of
improvement ofsocial issues

Employee engagement score

Environment-specificindicators

Page 30

Pharmaceutical
Segment

1) Integrate operations management of Meiji Seika Pharmaand KM Biologics (Strengthen vaccine business)
2) Expand CMO/CDMOPage 34

Venture into new domains

Pages 11, 15, 27

2. Improve business management system using ROIC effectively

Page 18

3. Invest to grow business while constructing strong financial base

Page 18

4. Promote the Meiji Group Sustainability 2026 Vision steadily

Realize both profit growth and sustainability activities

ROE

1) Recover from the stagnation in our core business
2) Expand overseas businessGroup-wide

Promote the Meiji ROESG®
Management Effectively

Meiji ROESG

Food Segment

Sales growth rate forhealth-conscious products,
Evaluation ofnutritional products with added
value, products for a super-aged improvement of
the Meiji Groupsociety
Success in and supply of vaccine
and therapeutic agent for
COVID-19

Pages 38, 50, 84

Progress of KPIs for the 2023 Medium-Term Business Plan
Indicators
Integrated goal
Growth andProfitability

FY2020

FY2021
9 points

Targets for FY2023(Average ROE of 11.9% ×0.8)(Average ROE of 12.3%×1.0)

12.3 points

13 points

JPY 1,007.1 billion*1

JPY 1,013.0 billion

JPY 1,080.0 billion

Consolidated operating
JPY 106.0 billion (10.5%*1)
profit (margin)

JPY 92.9 billion (9.2%)

JPY 120.0 billion (11.1%)−

JPY 92.9 billion

JPY 134.5 billion

Meiji ROESG
Consolidated net sales

Overseas net sales*2

Efficiency
and Safety

ROIC

10.0%

8.4%

10% or more

Return toshareholders

ROE
Payout ratio

11.1%

13.5%

11% or more

35.4%

28.0%

40.0%

*1 Reference figures, calculated after applying revenue recognition standards for FY2020 net sales*2 From FY2021, we have changed the business categories that serve as the basis for calculating overseas net sales.
We have not disclosed the figure for FY2020 calculated after retroactively applying the category changes.

ESG Indicators
Evaluation indicators

FY2020Results

FY2021ResultsBB

BBB

MSCI ESG Ratings

Targets for Targets for
FY2021
FY2023
A

BBB

DJSI

80th
86th
percentile percentile

84th
90th
percentile percentile

FTSE4Good

3.0 points

3.0 points

3.2 points

3.5 points

CDP (Climate Change)

A-

A-

A-

A

CDP (Water Security)

A-

A

A-

A

Indicators unique to Meiji
Indicators

As of FY2021

Targets for
FY2023Extend healthy life expectancy+0.56 years*1+1 year*1

Amount of protein intake

71.4 g/day*2

75 g/day

65.6%*3

60%

Vaccination rate for influenza
vaccines
Employee engagement score

Deviation score B Deviation score A

Sales growth rate forhealth-conscious products,
nutritional products withadded value, products fora super-aged society-3.1%*4

10% or more

Success in and supply of
vaccine and therapeutic agent
for COVID-19

Under
development

Development
and supply*1 Compared to 2016 (men 72.14 yrs old/women 74.79 yrs old)
*2 2019 latest survey*3 FY2020 latest survey; based on people aged 65 or older receiving routine
vaccinations*4 Compared to FY2020; we revised the preliminary figure shown in our FY2021
financial results presentation material released in May 2022.

In FY2021, we achieved goals in four indicators except for
FTSE4Good, resulting the coefficient as 1.0. We strengthened
our initiatives because the importance of addressing
environmental issues is growing. Also, we proactively
disclosed the progress of our initiatives. These efforts
contributed to improving our evaluations. In particular,
among approximately 12,000 evaluated companies, we wereselected as an “A-List company” that is the best evaluation in
CDP’s water security survey. We believe our comprehensive
efforts have been well received. Such efforts include thedisclosure of information on water usage, the acquisition of
an independent practitioner’s assurance for our data, thereduction of water consumption volume, and the complete
control of the quality of wastewater.

■ Vaccination rate for influenza vaccines
The vaccination rate for FY2020, the latest result available,
was 65.6%, up 15.2 percentage points from the previous fiscal
year. We believe that many people were encouraged to receive
vaccinations due in part to awareness-raising activities
conducted by the government and experts while COVID-19
pandemic was rapidly spreading.

■ Employee engagement score

Page 45

The score declined to B in FY2021 from BB in FY2019. We
should promote workstyle reforms due to the COVID-19
pandemic. The identified issues include collaboration
between organizations, communication between employeeswith different ranks, and maintenance of diversity.

■ The sales growth rate for health-conscious
products, nutritional products with added value,and products for a super-aged society
We recorded negative growth in FY2021. Sales weresignificantly affected by a decline in sales of yogurt andfunctional yogurt resulting from the shrinking market andintensifying competition.
Meiji Holdings Co., Ltd.｜Integrated Report 2022 21

Message from the Management

Contents

Overview of 2023 Medium-Term Business Plan and Meiji ROESG

Overview of FY2022 Plan
Operating Environment

Business Performance Summary
Points for FY2021
In FY2021, which is the first year of the 2023 Medium-Term Business Plan, we faced a severe operating environment due tothe continued impact of the COVID-19 pandemic on the global economy and domestic consumption trends and soaring
raw materials and energy costs. Under such an environment, we worked on key issues based on the concept of promoting
the Meiji ROESG Management effectively (See page 21 for key issues).

Net Sales

Consolidated net sales were JPY 1,013.0 billion. Overseas net sales of the whole Group were
JPY 92.9 billion.

Food Segment

Pharmaceutical Segment

Net sales were JPY 826.0 billion. Sales decreased in the
Yogurt & Cheese business and the Drinking Milk businessdue in part to the impact of the leveling off of stay-at-homedemand. However, this was offset by the recovery of the B
to B business, which struggled in the previous fiscal year,
as well as sales increase in the Nutrition business and theOverseas business.

Net sales were JPY 187.9 billion. Overall sales
increased despite the impact of the transfer of theAgricultural Chemicals business in the fourth
quarter. This was mainly due to the recovery of theDomestic Ethical Pharmaceuticals business, which
was impacted by a decline in the number of
outpatient visits in the previous fiscal year.

The current operating environment does not significantly different from that assumed when we formulated the 2023
Medium-Term Business Plan (the table below). However, uncertainty has increased due to the rapid yen depreciation andthe soaring raw materials and energy costs along with the Russian-Ukrainian conflict. COVID-19 pandemic has continued
to come and go in waves, with no signs of ending.
We will continue to closely monitor the impact of these factors on the global economy and consumption trends inJapan.
Opportunities

Threats• Growing consciousness on prevention
and health• Growth in overseas emerging
economies and growing middle-class• Aging in Japan• Expanding e-commerce• Growing environmental awareness andethical consumption• Shrinking domestic market due topopulation decline• Growing awareness of deflation among
consumers• Impact of climate change on supply chain• Food shortages due to global population
growth• Transition to digital formats

Consolidated operating profit was JPY 92.9 billion. Major factors are as shown below.

Analysis of Consolidated Operating Profit (Billions of yen)
106.0

Results -- FY2020

Due to increased/
decreased sales
Impact of NHI drug
price revisions
Changes inmarketing expenses
Changes in other
SG&A expenses
Other (incl. change inresults of subsidiaries)

-2.7
-5.0
-3.6
-0.2 *2-1.6

92.9

Results -- FY2021

*1

Food

Pharma Other

Analysis of Operating Profit by Segment

Food Segment

Page 30—

Pharmaceutical Segment

Page 34*1 Major factors[Food] Increase in raw materials cost: -4.1, Other: -0.4
[Pharma] Cost reductions: +0.9

87.4

19.1

-0.5

-8.1

+5.4

—

-5.0

—

-4.5

+0.9

—

+3.3

-3.5

—

-2.2

+1.8

-1.2

75.9

18.6

-1.7

*2 Major factors[Food] Decrease in marketing expenses: +4.7,
Increase in indirect manufacturing cost: -1.2,
Other: -0.2
[Pharma] Increase in R&D expenses: -3.3,
Increase in loss on valuation of inventories:-1.1, Decrease in marketing expenses: +0.9

Consolidated profit attributable to owners of parent was JPY 87.4 billion. Profit was substantially boosted by an increasein extraordinary income resulting from the transfer of all shares of DM Bio Limited and the Agricultural Chemicals
business. ROE was 13.5%, and ROIC was 8.4%.
Cash flow improved as a result of our efforts to reduce cross-shareholdings. We, therefore, increased our annual
dividend by JPY 10 while acquiring and canceling JPY 30 billion of treasury shares.

We implemented the Meiji ROESG management and carried out reforms in FY2021
amid a difficult environment.

Summary

22• Reviewed our business portfolio, especially for the Pharmaceutical segment, while continuing to faceissues of growth recovery• Promoted growth investment and reduced cross-shareholdings steadily at the same time; enhanced
shareholder returns through an increase in dividends and the acquisition of treasury shares• Advanced sustainability initiatives, especially in the environmental field; also participated actively inexternal initiatives• Worked on strengthening the management base
• Changed the chairpersons of the Nomination Committee and the Compensation Committee from the
CEO to Independent Outside Directors• Revised the executive remuneration system and increased the proportion linked to performance• Permeated our new slogan Now ideas for wellness throughout the Group

Message from the Management• Increased brand loyalty• Decline in inbound demand• Consumer thriftiness• Workstyle changes(commuting, working from home)• Patients reluctance to visit medical
institutions

KPIs for 2023 Medium-Term Business Plan
Indicators
Integrated goal

Operating Profit

Impacts from COVID-19 pandemic

Growth andProfitability

FY2021

Forecasts for FY2022

Targets for FY2023

12.3 points−*

13 points

Consolidated net sales

JPY 1,013.0 billion

JPY 1,035.5 billion

JPY 1,080.0 billion

Consolidated operating
profit (margin)

JPY 92.9 billion (9.2%)

Meiji ROESG(Average ROE of 12.3%×1.0)

Overseas net sales

JPY 92.5 billion (8.9%) JPY 120.0 billion (11.1%)

JPY 92.9 billion

JPY 104.2 billion

JPY 134.5 billion

Efficiency
and Safety

ROIC

8.4%

8.0%

10% or more

Return toshareholders

ROE
Payout ratio

13.5%

9.0%

11% or more

28.0%

39.2%

40.0%

* The Meiji ROESG is only set targets in FY2023, the final fiscal year

Initiatives of Focus
In FY2022, we will steadily advance the initiatives shown below, including recovering from the stagnation in our corebusiness, which is the top priority under the 2023 Medium-Term Business Plan.
Recover from the stagnation in our core business• Yogurt and functional yogurt• Strengthen existing products by utilizing R&D and technicalexpertise• Develop new products• Chocolate and Nutrition• Strengthen the promotion of the value of health-conscious
chocolates• Enhance marketing activities of sports protein• Domestic Ethical Pharmaceuticals• Grow core products• Improve stable supply of antibacterial drugs• Establish stable supply system for generic drugs while ensuring
profitability

Initiatives against cost increase• Firmly implement price hikes and volume reductions• Manage costs strictly• Consider additional measures

Foster new growth drivers• Overseas business• Expand production capacity and sales areas in China Food
• Expand the CMO/CDMO business Pharmaceutical• Vaccine business• Conduct R&D steadily• Acquire technology for new modalities• Strengthen marketing functions• Foster new domains and collaborate with startups andventures

Strengthen management foundation and sustainability activities
Food• Advance business management using ROIC
• Strengthen human capital management• Strengthen and enhance the Group governance• Accelerate sustainability initiatives
Meiji Holdings Co., Ltd.｜Integrated Report 2022 23

Value Creation Process

Contents

The Meiji Group’s Process for Value Creation

Creating Health Value from Abundant Capital throughMeiji’s Unique Strategies and Value Chain to
Realize Our Vision

The Meiji Group’s competitiveness comes from the following three sources; a variety of abundantaccumulated capital, its strategic allocation through the Meiji ROESG®* Management as well as ourstrong value chain. Based on these, we will create Meiji unique value for wellness across the areas offood and pharmaceuticals and provide it to all stakeholders to enhance corporate value. Through thisprocess, we will realize our vision and achieve sustainable growth.
* ROESG is a registered trademark for a management indicator developed by Kunio Ito, a professor at Hitotsubashi University.

Financial Capital• Can stably generate cash flows for
growth investment• Sound and robust financial structure• High profitability throughhigh-market share product lines inindustryIntellectual Capital• Knowledge and expertise
accumulated over a 100-year history• Basic research (lactobacilli, cocoa,
microorganism, fermentation,biotechnology and drug discovery
research)• Intellectual properties• Manufacturing technologies• Product commercialization expertise

Human Capital• Personnel who embrace the meiji way
Philosophy

Manufactured Capital• Production and sales bases locatedin Japan and overseas• Food distribution network designed
to cover all temperature ranges(room temperature, chilled andfrozen)• Production system that guarantees
stable supply of high-quality
pharmaceuticals

Social Capital• Reliability to the Meiji brand• Strong product brand with highmarket shares• Relationships with suppliers andbusiness partners• Strong, close relationships with ourcustomers• Engagement with shareholders andinvestors(Strategy)2023 Medium-TermBusiness Plan
Promotethe Meiji ROESG®
Management effectively
Realize both profit growthand sustainability activities

Business Strategy• Food Segment• Pharmaceutical
Segment• Group-wide

Improve business
management
using ROIC
effectively

Invest in businessfor future growth
while constructing
strong financial basePromotethe Meiji Group
Sustainability
2026 Vision

Natural Capital• Rich ingredients (cocoa, raw milk,
microorganisms such as lactobacilli
and actinomycetes)• Energy • Water

24

Value Creation Process

Page 20

Business Activities

OutcomeValue Chain
Creating Markets
with a Strong Value Chain
ResearchandDevelopment

Strengths

OUTPUT
Variety of Products
for Improving
Health and Nutrition
Food
Business

Sourcing• Reliability to
the brand• Safe andreassuring quality• Merge expertise infood andpharmaceuticals Productionand• Ability toDistribution
innovate
Sales
andCommunication

PharmaceuticalBusiness

Page 27

Contributing to Creatinga Better Future for People,
Society and the Earth
Healthier Lives
Caring for the Earth
Thriving Communities

Page 08

Provide Valuable
Information Related toFood and Health• Features that help improve health• High quality nutrition• Offer new food culture• Public awareness on diseases andprevention• Promote proper use ofpharmaceuticals• Scientific data and articles
Page 26

Page 26

Initiatives to Support
Sustainable Value Creation

Food–Pharmaceutical
Synergies

Provide Meiji
Unique Valuefor Wellness

Enhance
Corporate Value• Sustainable corporate growth• Sound financial base,enhanced capital efficiency, andstable profit return• Enhance managementfoundation• The Meiji Group 2026 Vision• Group Philosophy• Employee-friendly workplaceenvironments• Respect diversity

Capital Allocation

Realize the Meiji Group’s
Ideal Corporate Identity

Input

Human
CapitalIntellectual
Property

Corporate
Governance

Page 01

Page 42

Page 46

Page 68

Page 04

Meiji Holdings Co., Ltd.｜Integrated Report 2022 25

Value Creation Process

Contents

The Meiji Group Value Chain
The value chain is the foundation of business. In this regard, the Meiji Group has a wealth of strengths.

Food–Pharmaceutical Synergies

The Group provides various products and valuable information that contribute to health by creating
significant value throughout the value chain.

Creating Markets witha Strong Value Chain
ResearchandDevelopment

Strengths

Sourcing• Reliability to
the brand• Safe andreassuring quality• Merge expertise infood andpharmaceuticals Productionand• Ability toDistribution
innovate

Sales
andCommunication

New Challenges in the Health Value Domain

Characteristics and Strengths of the Meiji Group• Accumulated expertise obtained through basic research (lactobacilli, cocoa,
microbial fermentation, biotechnology, and drug discovery research)• Collection of microorganisms (lactobacilli and actinomycetes)• Chemical library (synthetic compounds and microbial metabolites)• Excellent R&D capability, product commercialization expertise, manufacturing
technologies, and related intellectual properties• Network with dairy farmers• Cooperation with cocoa farmers• Network with related organizations• Cost-competitive and stable sourcing of drugs using a global supply chain• Quality control system (ensure product quality and safety)• Distribution network designed to cover all temperature ranges (room temperature,chilled and frozen)• Unique manufacturing methods to ensure tastiness• Superior drug production technologies and advanced drug formulation technologies• Respond to a super-aged society and contribute to maintaining the National Health
Insurance Systems• Reliability to the Meiji brand and brand strength• High market share• Two-way communication and strong, close relationships with business partners
and customers• Drug product lines covering prevention and treatment, as well as comprehensive
customer support• Educate about drug-resistant bacteria• Create new markets• Cultivate a corporate culture thatencourages taking on challenges• Merge expertise in Food andPharmaceutical businesses• Provide health value from prevention to cure
• Product lines that cover the entire life cycle from infants to theelderly• Build supply chains considering for social expectations and theenvironment

Providing Valuable Information Related toFood and Health26

Food BusinessPharmaceutical Business

Achieving a Wellness Society
through Improved
Protein Intake

Holding Press Conferences Appropriately andDisclosing Important Information Accurately andon TimeProtein intake among Japanesepeople has declined to the levelof the 1950s. In response to thiscrisis, in June 2022, Meiji Co.,
Ltd. established the “Aim for 80g
of Protein Intake Per Day!”
consortium with Itoham
Yonekyu Holdings, Inc. andMaruha Nichiro Corporation.
The consortium aims to realize
a wellness society throughvarious educational activities.

The Meiji Group distributes press releases and holds
press conferences to communicate importantbusiness-related information accurately and on time.
Now, we report the progress of inactivated vaccines
against COVID-19, including development and clinicalstudy information.

Value Creation Process

Aim for 80g of Protein
Intake Per Day!
(Japanese version only)

The Meiji Group has both food and pharmaceutical businesses.
We are creating synergy in the health value domain bycombining the knowledge of each business.

The Dietary Supplement meiQua
We launched the dietary supplement meiQua by combining the expertise of our foodand pharmaceutical businesses. This dietary supplement series can be used for daily
health support or during medical examinations by physicians who are familiar with thepatient’s diseases, health conditions, and lifestyle. The first product in this series,
meiQua EPA1000, is an all-in-one product. It contains nutrients and ingredients that areoften lacking in our daily diets based on evidence. We began offering meiQua EPA1000 to
medical institutions such as psychiatry and internal medicine in the Tokyo metropolitan
area in April 2022.
Before this, in April 2020, the Co-Creation Center and relevant departments of the
Meiji Group operating companies launched the Business Promotion Project. We are
currently developing new products in the meiQua series by using the seeds identified by
the Co-Creation Center.

Four Years Since the Establishment of
the Co-Creation Center
Research Success in Patent Applications,
Papers Accepted for Publication, andPresentations at Academic Conferences
In FY2021, we filed four patentapplications, had two papers accepted for
publication, and gave three presentationsat academic conferences. It’s getting
better results steadily. We reported our
findings that extracellularpolysaccharides from lactobacilli
enhance the therapeutic effect of
immune checkpoint inhibitors against
cancer in Cancer Discovery. This journal ishighly influential in the field of cancer
research. Leading international
researchers are interested in this finding.

Front page of an article
published in Cancer Discovery

Toward Further Development
The Co-Creation Center has establishednetworks with many domestic and foreigncompanies, academia, ventures, and public
institutions. In particular, the Center exchanges
personnel and technology through open
innovation in anti-aging andimmunoenhancement fields (Results for
FY2021: 7 universities, 4 public institutions, and11 private companies).
The front-line researchers seconded by each
operating company are conducting advanced
research together using state-of-the-art
equipment. We will further develop theresearch platform and strengths of the Group’s
operating companies.

A Research Center that Realizes“New Challenges in the Health Value Domain”

Co-Creation
CenterAt the Co-Creation Center, researchers seconded by the
Meiji Group operating companies bring knowledge andtechnologies to conduct advanced research. The Center isfocusing research on anti-aging and immunoenhancement
based on microbiome technology. This technology
enables the analysis of human health conditions throughintestinal bacteria. The Center’s goal is to create newhealth value by combining the technologies accumulated
by each company with new external technologies.

A press conference
onsite and online

Meiji Holdings Co., Ltd.｜Integrated Report 2022 27

Value Creation Process

Contents

Financial and Non-Financial Highlights (Main Indices)
Net Sales *1

Operating Profit / Operating Profit Margin(Billions of yen)
1,400
1,240.8(Billions of yen)120

1,254.3

1,252.7

1,191.7

94.6

1,013.0

1,000

(%)

98.3

102.7

60

600

7.8

12

106.0

92.9

90

7.6

CO2 Emissions (Scope 1, 2) /CO2 Emissions per Unit of Sales *2, 3

9.2(t-CO2/100 million yen)

(10,000 t-CO2)
80

100

62.9
9

62.3

60.4

60

56.3

53.6

8.9

8.2

30

40

3

20

0

0

50.6

49.7

48.2

44.8 4047.2

FY2017FY2018FY2019FY20200

FY2021FY2017FY2018FY2019FY2020

FY2021

Operating profit (Left scale)Operating profit margin (Right scale)Profit Attributable to Owners of Parent / ROE(Billions of yen)
90

60

61.2
13.1

87.4
61.8
12.2

67.3

65.6

13.5
12.4

10

11.1

30

0

15

(Billions of yen)
700

487.3
500

FY2017FY2018FY2019FY2020

FY20210(Billions of yen)
140
108.7
100

112.1

114.1

43.2

44.3
11.8

50

100

10

FY2017FY2018FY201999.9

FY2020

-64.3

-70.8
-93.1

-100.2FY2017

FY20210

FY2018FY2019Cash flows from operating activities
Cash flows from investing activities

FY2020

Value Creation Process

2.8

2

2.4

0

-27.6

FY2021

Free cash flows

10
0

10

35.4

28.0
5

4.0

4.0

4.0

3.9

3.8

FY2017FY2018FY2019FY2020

FY2021

Payout ratio (Left scale)
Dividends on equity (DOE/Right scale)

0.9

0.9

0

2.6

2.4
2.2

2.4

Japan
9,424

0.9

FY2019 FY2020 FY2021

FY2019Japan
2.6

25,00021,97921,18920,00023,397

FY2020
*6

5,000

0

0

FY2021

2.6

10

22,571

19,808

6
Japan
21,979

1.89

1.92

1.83

FY2019 FY2020 FY2021*6

Global3.4

021,255
Overseas
1,418
8Overseas
Overseas
1,382
1,448

15,000Japan 1
2.4

Japan
21,1891.87

1.89

FY2019FY2020

Japan

*6

Japan
19,8084

1.78

2FY20210

GlobalWater consumption (Left scale)
Water consumption per unit of sales (Right scale)

Lost Time Injury Frequency Rate (LTIFR) *8

4.7
3.1

FY2021(1,000 m3/100 million yen)

(1,000 m3)

1.14(Overseas 1.82)
1.03(Overseas 1.52)

1.2

3

FY20201

Global

10,000

Japan
2.8

5

0

Japan
9,766

1.0

0.9

FY2018 FY2019 FY2020 FY2021(%)

2

11,095

Overseas Overseas
2
1,674
1,671

9,424

9,766

Water Consumption /Water Consumption per Unit of Sales *3, 5

3.7

0.6

1.09

(Overseas 1.16)

1.07

1.0
0.8

0.69

0.71

FY2017FY2018Japan

Global0.86

0.86

FY2019FY20200.4

1
011,439Energy consumption (Left scale)
Energy consumption per unit of sales (Right scale)

4

30.8

0.8

5,000

10,714Japan

Ratio of Female Managers *7

40

32.3

0

3.0
2.8
Overseas3
Overseas Overseas
0.4
0.4
0.3
2.5
2.5
2.3 2

Japan

*1 The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) and related implementation guidance are being applied as of FY2021.
*2 Applies to the Meiji Group (the domestic Meiji Group and 14 overseas production plants <12 plants up until FY2019, 13 plants in FY2020>). The per unit of sales iscalculated from the consolidated sales.
The Kumamoto Plant of KM Biologics Co., Ltd. was included in the calculation from FY2018, and all of the company’s sites were included from FY2019.
*3 The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) and other standards have not been applied to net sales used in the perunit calculation*4 Applies to the domestic Meiji Group. The per unit of sales is calculated from domestic consolidated sales.
The global data; applies to the Meiji Group (the domestic Meiji Group and 14 overseas production plants <13 plants in FY2020>). The per unit of sales is calculated
from the consolidated sales.
The Kumamoto Plant of KM Biologics Co., Ltd. was included in the calculation from FY2018, and all of the company’s sites were included from FY2019.

28

3

*6

(%)
15

32.8

10,000Industrial waste (Left scale)Industrial waste per unit of sales (Right scale)

(%)
50

30

30.5

FY2021(t/100 million yen)4

1

0

FY2020(10,000 t)
4

Equity (Left scale)
Equity-to-asset ratio (Right scale)

127.5

FY2019

3.1

30

20

-60
-100

58.2

Payout Ratio / Dividends on Equity (DOE)
123.6

FY2018

60.3

562.7
56.3

(%)
70

5

Cash Flows

20
0
-20

52.5

673.3

300

Profit attributable to owners of parent (Left scale)ROE (Right scale)

60

52.5

FY2017

Industrial Waste /Industrial Waste per Unit of Sales *3, 5
621.4

527.3

9,845

CO2 emissions (Scope 1, 2) (Left scale)CO2 emissions per unit of sales (Right scale)

Equity / Equity-to-Asset Ratio(%)
20(TJ/100 million yen)3

15,000

20

200
0

(TJ)

80
60

6

Energy Consumption /Energy Consumption per Unit of Sales *3, 4

0.2

FY2017FY2018FY2019FY2020

FY2021

0.0

FY2021*5 Applies to the domestic Meiji Group. The per unit of sales is calculated from domestic consolidated sales.
The global data; applies to the Meiji Group (the domestic Meiji Group and 14 overseas production plants <12 plants in FY2019, 13 plants in FY2020>).
The per unit of sales is calculated from the consolidated sales.
The scope of calculation of industrial waste is limited to production plants.
*6 Data from past fiscal years has been revised.
*7 Applies to Meiji Holdings Co., Ltd., Meiji Co., Ltd., Meiji Seika Pharma Co., Ltd. and KM Biologics Co., Ltd.
KM Biologics Co., Ltd. was added and included in the calculation from FY2018.
*8 FY2017 and FY2018 includes domestic consolidated subsidiaries as well as the plants and research laboratories of Okinawa Meiji Milk Products Co., Ltd.
(but excluding KM Biologics Co., Ltd., Meiji Feed Co., Ltd., and OHKURA Pharmaceutical Co., Ltd.).
Since FY2019, domestic consolidated subsidiaries, Okinawa Meiji Milk Products Co., Ltd., and all operating sites of overseas Group production companies of Meiji
Co., Ltd. and Meiji Seika Pharma Co., Ltd. are included.
Lost Time Injury Frequency Rate: Number of casualties ÷ Total working hours × 1 million

Meiji Holdings Co., Ltd.｜Integrated Report 2022 29

Progress for 2023 Medium-Term Business Plan

Contents

Food Segment Business Strategies
Outlook for FY2022 and Beyond

Aiming for Sustainable Growth by Responding to Changes in
the Business Environment and Expanding Product Lines with High Health Value

Katsunari Matsuda

COO (Food Segment)
Member of the Board and Executive Officer
Meiji Holdings Co., Ltd.
President and Representative Director
Meiji Co., Ltd.

Contributing to Solving Social Issues through Nutrition
that only Meiji can Provide and Growing Business Further
Looking Back on FY2021

30 Progress for 2023 Medium-Term Business Planrising costs despite a severe business environment. This isbecause our core products provide value based on
scientific evidence. Most of our customers understand theadded value and health value and purchase products
such as Meiji Oishii Gyunyu, Meiji Probio Yogurt R-1, andChocolate Kouka. We also provide a variety of productsthat are closely in tune with our customers’ lives, frombabies to the elderly. We have an approximately 40%
market share in infant formula and nutritional food for theelderly. In addition, I am sure that our customers are
satisfied with our confectionaries, yogurt, nutrition
products, and other products in their various stages of life.
That is because we have had a deeper insight into
nutritional and health issues that society faces in eachera. We have created products that contribute to solving
these issues by using our advanced technologicalcapabilities. We cultivated new markets withhigh-value-added products and have further refined our
products. Thus, we have established our brand anddeveloped products into longtime best-sellers. We haveleading products in a variety of markets. We will improvethese products further and continue to grow our business.

Key Issues in the 2023 Medium-Term Business Plan

Net Sales were Largely Unchanged Year on Year
while Operating Profit Decreased due to Increased Costs and Other Factors
Japanese consumers’ awareness of health and nutritionchanged in FY2021. We concentrated management
resources on core businesses* and worked to expand
businesses to capture this new demand.
As a result, net sales were largely unchanged year on
year. The B to B business recovered after struggling in theprevious fiscal year due to the impact of the COVID-19
pandemic. In addition, net sales of sports protein SAVAS
and enteral formula continued to grow. However,a decline in sales of yogurt and functional yogurt
negatively impacted net sales.
Operating profit decreased significantly year on year.
The decreases were due to the following factors:
decreased sales of profitable yogurt and functional
yogurt; increased raw material costs such as overseas
dairy ingredients, oils and fats, and sugar; increased
depreciation expenses; and lower operating profit fromsubsidiaries. The increase in raw material costs wasparticularly significant, increased by approximately JPY 5
billion compared to the FY2021 plan. In response to thisA major challenge in FY2022 and beyond will be
responding to changes in the business environment, suchas rising raw material costs. The procurement costs ofoverseas raw materials are expected to increase
compared to the plan due to the yen depreciation, whichis rapidly progressing in FY2022. Procurementcompetition for raw materials will intensify over the longterm as the global demand for food products increases
due to economic growth in developing countries. In
addition, energy costs such as crude oil and other fuelprices are on the rise. Moreover, adapting to green energy
will incur additional costs. Of course, we recognize that
additional costs for green energy are essential for
realizing a sustainable society. Meanwhile, the impact of
the Russian-Ukrainian conflict remains unpredictable. We
will deal with these difficult environmental changes byraising prices, improving productivity throughtechnological innovation, and adding value to our
products.
I am confident that we are one of the best Japanesefood companies that can fully overcome the challenge of

Recovering Growth Trajectory of Core Businesses andFostering New Growth Drivers such as Overseas Businesses

situation, we worked to reduce various costs including
marketing expenses.
* Core businesses: Yogurt/functional yogurt, Chocolate, and Nutrition

FY2020Results(Billions of yen)

FY2021Results

Net sales

826.5*

826.0

Operating profit

87.4

75.9

YoY Change

−0.1%
−0.4
−13.1%−11.4* Reference figures, calculated after applying revenue recognition accounting
standards for FY2020 net sales

Breakdown of Consolidated Op. Profit (Billions of yen)
FY2020

87.4
-8.1
-4.5
+4.7
-1.4
-2.2

FY2021

75.9

Sales of nutrition products and B to B increased,
but profit decreased due to decreased
sales of functional yogurt
Raw material costs(overseas dairy ingredients, oils & fats, sugar, etc.): -4.1
Other costs: -0.4
Decrease in marketing and promotional costs
Increase in depreciation and other indirect
manufacturing expenses
Decrease in profit from subsidiaries in China and USA
Increase in profit from subsidiaries ofconfectionery and feed

Recovering Core Businesses

The Food segment, driven by core businesses, has been
growing for a long time. However, it began stagnatingaround 2017.
A major reason for this stagnation was a slump in salesof functional yogurt. We could not establish new productsin the market. Also, it took longer to develop products
than planned because we revised our ways of verifying
health claims. However, we have overcome this andcreated new potential products with new evidence. We
are expecting good results for these products.
Sales of chocolate and nutrition products havemaintained a certain level of growth despite the COVID-19
pandemic. Although our existing mainstay products drove
this growth, we have not created new products that willlead to future growth. This is a critical issue and,
therefore, we will continue to focus on developing new
products.

Net Sales in Core Businesses* (Billions of yen)
Chocolate
Nutrition
Yogurt and functional yogurt

95.9

96.2

116.0

122.8

196.3

179.7

FY2020

FY2021* Before applying revenue recognition standards

Meiji Holdings Co., Ltd.｜Integrated Report 2022 31

Progress for 2023 Medium-Term Business Plan

Contents

Food Segment Business Strategies

Promoting Overseas Development

The overseas business is developing as planned. Until
recently, the overseas sales ratio in the Food segment wasaround 5%, which was rather low. Dairy and cocoa
products come from Europe and the United States, so we
assumed that their overseas markets were alreadyestablished. Therefore, we did not fully believe thatoverseas dairy and cocoa businesses would contribute tooperating profits. However, over the years, our unique
technology has created products with Meiji unique value.
Now is the perfect opportunity for us to take on thechallenge of developing these markets. We should
accelerate our efforts because we are lagging far behind
global food manufacturers.
To accomplish this, we are investing cash generated bydomestic businesses in overseas business. In the Chinese
market, our current focus area, we will complete theconstruction of a chilled milk and yogurt plant in Tianjin
in early 2023. In the fall of 2023, we will build a chilled
milk, yogurt, and confectionery plant in Guangzhou.
Furthermore, in the spring of 2024, we will build an ice
cream plant in Shanghai.
Meanwhile, we are building a suitable businessstructure to expand business in China. There were sales
and administrative functions for each product, what iscalled a silo management style. In January 2022, we
integrated them into Meiji (China) Investment Co., Ltd. We
delegated authority to the local subsidiary and changed
the system to allow management to make quick
decisions. We are also streamlining the cash management
process. For example, we centralized the management of
the business fund for chocolate and ice cream, as theirpeak periods were different. Instead of product-specificmarketing, we will implement an integrated marketingstrategy for the Food segment in the Chinese market. We
are aiming to achieve significant growth using thestrength that we have broad product range.

Focusing on B to B BusinessWe are nurturing our B to B business as a new pillar of
growth. B to B business currently accounts for around 7%of total sales. The takeout market is expanding due to the
COVID-19 pandemic. Thus, there is still significant roomfor growth. The B to B business is sometimes seen as low
growth potential and low profit contribution due to sales
skills and cost perspective. However, it is possible tocreate new categories and improve growth andprofitability using advanced processing technology. As foroverseas expansion, we will launch professional foodproducts into the Chinese market. We will expand our B to
B business through synergic effects with commercial
products.

32 Progress for 2023 Medium-Term Business Plan

Building a Management Foundation that
Accelerates Value Creation

Meiji has long operated business through in-housedevelopment. However, the business environment
around us is rapidly changing. Companies will perish if
they fail to create new value by absorbing new thingsfrom the outside world. Therefore, we established ourown program to promote open innovation. Internally, weoffer the Internal Creation of Innovation Program thataims at creating problem-solving businesses through aninternal recruitment process. Externally, we aredeveloping the Meiji Accelerator Program that co-createsvalue by supporting startup companies. Under theInternal Creation of Innovation Program, we currently
have two ideas to be commercialized. Under the Meiji
Accelerator Program, we are promoting co-creation
activities with multiple companies. These programs may
not create new businesses. Rather, our ultimate goal forthese programs is to energize the company and change
our mindset.
We tend to think of innovation as innovating processes
and products. However, I believe that we should develop
innovative thinking to achieve such innovation. In ourcase, innovative thinking means that we discuss
open-mindedly and boldly, and come up with challenges
that need to be solved to realize a sustainable society. We
should identify these challenges to create new markets
through science-backed innovation.
The concept of sustainable cocoa, known as“Possibilities of cocoa,” is based on innovative thinking.
Cocoa is not just cocoa beans but a fruit when you look at
a whole part. We are trying to bring out the potential
nutritional value of cocoa using new processing methods.
We are driving this project forward in collaboration withlocal farms, external research institutions, and otherpartners. In this way, we are pursuing both sustainablecocoa production and the creation of new health value. I
would encourage all employees to think innovatively anddevelop the future growth drivers. For this, we will
strengthen partnerships with external organizations andabsorb various values into the company.

Meiji Accelerator Program(Japanese version only)

Possibilities of cocoa(Japanese version only)

Strengthening Human Capital Management

In addition, we should move away from an in-housedevelopment approach to human capital. We are hiring a
lot of experienced personnel from outside the company tointroduce new knowledge and expertise. We established a
new Intellectual Property Department three years ago andhired personnel from outside the company as a manager.
We hired female personnel from outside the company as amanager for the department that promotes diversity andinclusion. One personnel from outside the company isalready working as an Executive Officer in the sales
department. I want everyone to know that we arebringing in excellent personnel from outside thecompany, and I encourage everyone to get motivated. In

addition, we recently had a female Executive Officer whocame through the R&D department. I hope that this will
be a good source of motivation.
As we are expanding the overseas business into Asia,
Europe, and the United States, we need specialized
human capital to take care of local marketing and otheractivities. We will send young personnel to overseas
subsidiaries and train them there. In addition, we will
recruit experienced personnel who can contribute to thebusiness immediately.
We are working hard to change our organization,systems, and corporate culture so that our talented
human capital can demonstrate its full capabilities.

Creating Meiji Unique Value for Wellness

Bringing Wellness to Society by Making Our Nutrition Statement,
the Norm for Our Businesses
Meiji is so fortunate to operate businesses that help solve
social issues. We enhance and offer the health value of thebounty of nature, such as dairy and cocoa. Therefore,
pursuing our mainstay businesses is directly linked to ourcontribution to society.
One of the Meiji Group’s founding spirits reflects this:“Contribute to the Country through Nutrition.” We shouldpass it on unchanged. However, the concept of nutrition
has changed over time. When the company was founded
100 years ago, nutrition meant the energy necessary forliving. In recent times, nutrition must be linked to health.
Furthermore, health does not only mean living longer.
Enjoying self-fulfillment at any age is crucial. We willcontribute to linking nutrition to health and bringing
wellness, a healthy and fulfilling life, to society.
The Group changed its slogan to Now Ideas for
Wellness in June 2021. In the Food segment, we adopted
its concept and developed the Nutrition Statement inwhich we clearly stated our nutritional ideas. Accordingly,
we should make products that are consistent with the
Nutrition Statement. We will not survive if we do notcreate value for wellness. The Nutrition Statement isgradually spreading throughout the company. As a result,
employee consciousness is changing. Sales and operating
profits are critical. But more importantly, employees are
beginning to understand that Meiji’s mission is to create asustainable society through products that solve social
issues.
We should not change the core of Meiji. However,there are things that we should change over time. In the2017 Medium-Term Business Plan, we worked on theselection and concentration of products. In contrast, inthe 2020 Medium-Term Business Plan, when I first becamepresident, we worked on the selection and concentrationof business. We made the difficult decisions to exit
businesses and liquidate companies in the Group. In thepast, we made decisions about what to change based on
economic rationality. In addition, we should also takesustainability into account.
The demand to achieve a sustainable society is getting
bigger and bigger. We believe this is the biggest change inthe business environment in the long term, and therefore
we should adapt to such change. I want every employee
to be aware that this is crucial and that we work together
to fulfill Meiji’s mission.
Meiji Nutrition Statement

Meiji Holdings Co., Ltd.｜Integrated Report 2022 33

Progress for 2023 Medium-Term Business Plan

Contents

Pharmaceutical Segment Business Strategies
Outlook for FY2022 and Beyond

Growing Business while Contributing to the Economic Security ofJapan’s Pharmaceuticals and Preventive Measures Against Infectious Disease

Daikichiro Kobayashi

COO (Pharmaceutical Segment)
Member of the Board and Executive Officer
Meiji Holdings Co., Ltd.
President and Representative Director
Meiji Seika Pharma Co., Ltd.

Determinedly Undertaking Structural Reforms and Concentratingon Creating Meiji Unique Value for Wellness,such as Preventive Measures Against Infectious Disease
Looking Back on FY2021

Grew Human Vaccine and Overseas Businesses
while Undertaking Bold Structural Reforms to Strengthen our Financial Platform
We grew our human vaccine and overseas businesses in
FY2021. We also undertook structural reforms tostrengthen our business platform and focus management
resources on creating new medicines. Accordingly, wesold all shares of DM Bio Ltd., our joint venture in South
Korea, and transferred our Agricultural Chemicals
business to the Mitsui Chemicals Group. We drasticallyreorganized our R&D structure. We reorganized researchfunctions in Yokohama and Ashigara and consolidated
them into the Pharmaceutical Research Center in
Ashigara. Meanwhile, we strengthened partnerships withexternal research institutions and improved R&D
efficiency.
As a result, net sales increased year on year. The
Domestic Pharmaceuticals business recovered. In
addition, contract manufacturing income related to
AstraZeneca’s COVID-19 vaccine increased. These offset
the impact of NHI drug price revisions. Operating profit
decreased by JPY 400 million year on year. We worked on
reducing costs and relocating sales offices. However, an
34 Progress for 2023 Medium-Term Business Plan

increase in R&D expenses and decreased valuation for
inventory assets pushed down profits.
(Billions of yen)

FY2020Results

FY2021Results

Net sales

182.1*

187.9

Operating profit

19.1

18.6

YoY Change

+3.2%
+5.8
−2.3%
−0.4

* Reference figures, calculated after applying revenue recognition accounting
standards for FY2020 net sales

Breakdown of Consolidated Op. Profit (Billions of yen)
FY2020

19.1

Sales of Domestic Pharmaceuticals recovered,contracted manufacturing income fromdomestic distribution of COVID-19 vaccine
increased

+5.4
-5.0

Impact of NHI drug price revisions+0.9

Cost reductions

+0.9
-4.4
+1.8
FY2021

18.6

Relocate sales offices and control costs
Increase in R&D expenses and decreased valuation
for inventory assets

Businesses of KM Biologics and Medreich were favorable

We will grow business while contributing to two social
issues facing Japan: economic security and preventive
measures against infectious diseases. Regarding
economic security, strengthening the value chain of
critical commodities is crucial to national security.
Particularly, we are focusing on the stable supply ofantibacterial drugs, which are essential medicines. We are
currently heavily dependent on imports from China forthe raw material of penicillin antibiotics. Therefore, thegovernment has announced a domestic manufacturing
policy to strengthen the value chain. In response to thispolicy, we are establishing a production system for the
raw material of penicillin at our Gifu Plant, which is
expected to start production by 2025. In this way, we will
fulfill our responsibility as a leading manufacturer ofantibacterial drugs.
Regarding preventive measures against infectious
disease, the COVID-19 pandemic has created the need fordomestically developed vaccines. Furthermore, the threatof emerging and re-emerging infectious diseases is
expected to continue. In June 2021, the “Strategy forStrengthening Vaccine Development and Production
Systems” was approved by the Japanese Cabinet. In
compliance with this strategy, we will expand production
facilities and strengthen collaboration with academia.
First, we will concentrate on developing inactivatedvaccine domestically. Studies to verify its superiority overexisting vaccines for adults and children are going well.
We are collecting and compiling data, and planning toapply as soon as possible. COVID-19 has continued tocome and go in waves and the situation remains
unpredictable. We want to successfully develop anddeliver a safe inactivated vaccine that people can use
without safety concerns.
Furthermore, we will build a technological platform todevelop new vaccines for the future. To this end, we will
acquire advanced modalities, such as messenger RNA
vaccine technology. We should make targeted andstrategic investments in such areas. We will invest funds
obtained through structural reforms, such as the transferof our Agricultural Chemicals business.

Key Issues in the 2023 Medium-Term Business Plan

Drawing a Clear Growth Strategy and Investing Business Resources Gained from
Structural Reforms
Integrated Operations Management of
Meiji Seika Pharma and KM Biologics

CMO/CDMO* business. In FY2020, Medreich temporarily
shut down a production line due to the COVID-19
pandemic, but quickly resumed operations. Despite the
shutdown, it achieved year-on-year growth due to thesignificant need due to an increase in access to medicines
in advanced developing countries.
We are planning new investments to fulfill recent
business growth. As a first step, we have decided to build
a manufacturing facility in India, which is scheduled tostart operation in March 2023. Medreich operates a joint
venture with South African company Adcock Ingram
Limited to meet the strong demand for medicines inSouth Africa.
We have sent more than five engineers from Japan to
improve the production capacity in Medreich. We are also
focusing on quality management. We want to build
a suitable quality control system at Medreich by training
excellent local engineers. We will grow our CMO/CDMO
business at Medreich into one of the core businesses of
the Pharmaceutical segment by investing in personnel
training among other things.

Expand CMO/CDMO Business* CMO: Contract Manufacturing Organization
CDMO: Contract Development and Manufacturing Organization

When the two companies in our Pharmaceutical segment
are successfully integrated, it will become one of the best
vaccine companies in Japan because it will havea comprehensive and diverse value chain. In this way, we
can significantly contribute to the fight against infectious
diseases, which are social issues. Management is serious
about integrating business operations. In R&D, we haveestablished the R&D Steering Committee. I am the chair of
this committee and manage projects and optimize thedrug development portfolio of both companies. To avoid
arbitrary internal decisions, we have also established athird-party committee.
In April 2022, the Veterinary Drugs businesses in bothcompanies were integrated to build a new company, Meiji
Animal Health Co., Ltd. This company will cover theprevention to treatment of infectious diseases in animals.
We will contribute to the livestock industry and expand
our business.
The growth of Medreich Ltd. in India is driving our

Meiji Holdings Co., Ltd.｜Integrated Report 2022 35

Progress for 2023 Medium-Term Business Plan

Contents

Pharmaceutical Segment Business Strategies

Promoting Unique Strategies for
Drug Discovery

Phase I

Phase III

Approve

Phase IIa
Phase Ib/II[Relapsed or refractory B-cell non-Hodgkin’s lymphoma]

Blood Plasma
Products

meiQua dietary supplement exclusively for medical institutions(Japanese version only)

Approve
Apply

Phase I

HBI-8000 Tucidinostat[Pentavalent vaccine against diphtheria, tetanus,
pertussis, polio, and haemophilus influenza type b]

ApplyPhase III

ME3183 [Psoriasis/Selective PDE4 inhibitor] ●KD-370

FY2024Phase III

Ustekinumab biosimilar[Plaque psoriasis, Psoriatic arthritis, Crohn’s disease,
Ulcerative colitis][Breast cancer, Gastric cancer]

Overseas

Approved

DMB-3115

DMB-3111 Trastuzumab biosimilar

FY2023

with ꞵ-Lactams[Chronic Graft Versus Host Disease]

Human vaccines

Veterinary drugs

36 Progress for 2023 Medium-Term Business Plan

FY2022ME3208 Belumosudil

Creating New Value for Wellness Using Innovation from Now ideas for wellness
will increase. We will continue our structural reforms andcreate a structure in which we can invest in growthstrategies. I am determined to realize the vision that theGroup holds for the future.

[ꞵ-lactamase inhibitor] ●[Relapsed or refractory Peripheral
T-cell lymphoma (PTCL)]

Creating Meiji Unique Value for Wellness

The Group’s Pharmaceutical segment contributes topeople’s health. We, for example, develop and provide
vaccines, a preventive measure against infectious
diseases, which is one of the most important social issues.
We should publicize these initiatives. We are actively
communicating various information, such as the status ofvaccine development, on time. This way, we will deliver
the benefits of the value for wellness provided by theGroup.
In the Pharmaceutical segment, we are gaining
momentum to generate innovation from R&D to front-line
sales under the banner of our Group slogan, Now ideas forwellness. One of the results of these efforts is meiQua,
a dietary supplement exclusively for medical institutions.
We developed a system where patients who get advice
from their doctors can purchase meiQua through an
exclusive website. We have received positive feedbacks on
the conception of meiQua from medical specialists.
Following meiQua EPA1000, our first product, whenother in-house initiatives begin to bear fruit, employees
will recognize Now ideas for wellness and their motivation

OP0595 Nacubactam
HBI-8000 Tucidinostat

Others

These days, the seeds for novel drugs are likely to beJapan

Products

Ethical pharmaceuticals

Strengthening Human Capital Management

List of New Products Under Development

Infectious
diseases

We have three core areas in the Pharmaceutical segment:
infectious diseases, immunology and inflammation, andgeneric drugs. Currently, our main products are
antibacterial drugs, blood cancer drugs, and anti-allergy
drugs. These drugs may seem to have little in common
with each other. However, they are related because they
all control immune responses. Infectious diseases are
inflammatory, and the immune response plays
a major role in inflammation. We would like to not only
develop vaccines and antibacterial drugs but also tocontribute to the treatment of infectious diseases bymastering immune responses. Thus, we are aiming tobecome a true leading manufacturer in the infectious
disease field.
As part of this effort, we are collaborating with Dr.
Tasuku Honjo of Kyoto University to develop a therapeutic
drug that stops the immune system overreaction. The areaof infectious disease is just an entry point. Beyond it are
the areas of immunity and inflammation. If we can control
the entire immune response, we may be able to treat all
infectious diseases. I believe we are a leading company inthe vaccines and antibacterial drugs areas. Moreover, we
would like to improve our status by striving for hostimmune response through joint research with academia.

found in academia. To seize the opportunity, we invited
postdoctoral researchers from Juntendo University and
Kyoto University, where we are conducting joint research.
We will enhance our R&D capabilities by integrating
human capital from both inside and outside of thecompany.
We are actively adopting personnel exchanges
between internal personnel and the public and private
sectors to broaden our horizons. We regularly send ourengineers on secondment to the Japan Pharmaceutical
Manufacturers Association think tank, Cabinet Office,Ministry of Health, Labour and Welfare, and Ministry ofForeign Affairs. We also send a lot of personnel toacademia to improve open innovation. For example, weare developing a device for non-contact psychiatrictreatment under a joint project with Hiroshima University.
Through the R&D of such medical devices, we willcontribute to DX (digital transformation) in thepharmaceutical industry.
We are also strengthening our human capital which
supports our global business development. We have sent
employees to our U.S. subsidiary established in 2021.
Thus, we are working hard to build a strong network with
U.S. academic societies and bio ventures. We arestrengthening highly specialized human capital in our
R&D department to promote clinical developments in the
U.S. We hired a person who has filed an NDA to the FDA(U.S. Food and Drug Administration) and successfullyreceived approval.

(Phase I finished)Phase III

AppliedApprove

Phase II
Phase I/II
Phase II/III

KD-414[Inactivated vaccine against COVID-19]

Phase II/III (Pediatric Clinical Studies)
Phase III (Adults under 40) *1

KD-404[Egg-derived inactivated whole virus influenza vaccine]

Phase I/II

KD-382 [Quadrivalent vaccine against dengue fever]Phase I

KD2-305

Applied[Suppression of bleeding tendency in patients withblood coagulation factor VIII or factor IX deficiency
who have coagulation factor inhibitors] ●*1 Multi-Regional
Clinical Studies

Approve

Extension study

ME4137 [Injectable antibacterial drugs for cattle use]

Applied

ME4137 [Injectable antibacterial drugs for swine use]

AppliedApprove
Approve

ME4406 [Feed additive] ●Apply

ME4305 [Antibacterial drugs for cattle use] ●KD-412 [Vaccine for cattle use] ●MD-1001-1[Injectable antibacterial drugs for cattle use]
● : Discovered in-house* The above information is current as of August 2022

Apply
AppliedApprove
Apply

Pipeline

Meiji Holdings Co., Ltd.｜Integrated Report 2022 37

Progress for 2023 Medium-Term Business Plan

Contents

Sustainability Strategy

Valuing Natural Capital as the Cornerstone of
the Meiji Group and Conserving Biodiversity

Jun Furuta

CSO
Member of the Board andSenior Executive Officer

Aiming to be a Leading Company in Sustainability Activities by
Tackling Social Issues through Improving Natural and Human Capital
Making Good Progress in Addressing Materiality
Adapting to a Changing Environment andSetting Higher Targets
We made good progress in addressing materiality in
FY2021, the first year of the 2023 Medium-Term Business
Plan. However, the world is adapting to issues such as
climate change quicker than expected. Therefore, weshould deal with such changes promptly. Nowadays, it is
no longer enough for companies to handle these changes
within their companies. There is a growing consensus that
we should address human rights and environmental
issues throughout our supply chain. For the Meiji Group, it
is important how we share issues and discuss solutions
with producers and suppliers of raw materials.

In addition, we should revise the initiatives and KPIs
appropriately to respond to changes in the external
environment on time. For example, with regard to
reducing CO2 emissions, COP26 in autumn 2021 clearlystated that we should advance our efforts to limit a global
average temperature rise to 1.5°C above pre-industrial
levels instead of well below 2°C. Accordingly, the Group
increased its target for CO2 emission reduction to 50% ormore by FY2030 compared to the FY2019 level. Although
the hurdle has been raised from the previous target, wecannot achieve carbon neutrality by 2050 without clearing
this hurdle. We will work to achieve this goal incooperation with industry, government, and academia.

Our Responsibility: Operating Businesswhile Restoring Damaged Natural Capital

Introducing ICP and Carbon Footprinting to
Achieve Carbon Neutrality

Among six types of capital,*1 we consider enhancing
natural and human capital to be important froma sustainability perspective.
Natural capital is natural resources, including plants,
animals, the atmosphere, and soil. They are thefoundation of the social economy. Since the industrial
revolution, humankind has had a huge negative impact
on natural capital, which led to global warming and otherproblems. We should urgently restore damaged natural
capital. The entire world bears this responsibility. The
Group’s business operations originate from the bounty ofnature. We are committed to fulfilling our responsibilities
as a recipient of this bounty.
Natural capital, the foundation of our business, issupported by biodiversity. The biodiversity has recently
been threatened. Also, endangered species are increasing
due to severe deforestation. In addition, climate change
and water risks are harming biodiversity, thereby affecting
the agricultural products that we procure. The Group
cannot survive unless biodiversity is conserved. With thisin mind, we have had numerous discussions on
biodiversity initiatives internally. The concept of “nature
positive” has recently emerged, which aims to restore andenhance all ecosystems. The Group is committed toadopting this concept to conserve biodiversity. We haveworked hard to strengthen relationship with external
initiatives, such as by participating in the 30by30 Alliancefor Biodiversity*2.

Biodiversity is a comprehensive concept that includes
carbon neutrality. Therefore, we believe that we should
address both aspects together. Specifically, in FY2021, we
formulated a roadmap and action plan to achieve carbon
neutrality by 2050. It addresses Scope 1 and Scope 2, but
not Scope 3. However, we believe that creating theroadmap to 2050 was a positive step. For the TCFD (Task
Force on Climate-related Financial Disclosure), we will
re-calculate and disclose scenarios based on +1.5°C
instead of the previously developed +2°C and +4°C
scenarios.
In addition, in our efforts to promote carbon
neutrality, we have implemented internal carbon pricing(ICP)*3 in FY2021. We will use ICP when calculating thefinancial payback on capital investment in plants andother facilities. This way, we promote investment inintroducing facilities that reduce CO2 emissions. We haveset a target of JPY 30 billion for ESG investments in the2023 Medium-Term Business Plan. We are also
considering introducing carbon footprinting*4 fromFY2022. To promote reducing emissions we will calculate
CO2 emissions for each product throughout the value
chain and visualize each process. Our ultimate goal is tocreate CO2-free products.
First, we will start introducing carbon footprinting
with our milk products. The greenhouse effect of methane
emitted by cows has become an issue in dairy farming. We
want to determine how much greenhouse gas is emitted
throughout the milk supply chain and work to reduce it.

*1Page 24 The Meiji Group’s Process for Value Creation*2

Page 54 Coexisting with Nature > Biodiversity Initiatives*3 ICP: A method for companies to price their own carbon emissions and use
them for decision making on matters such as investments*4 Carbon footprinting: A system that converts the greenhouse gas emissions
throughout a product’s life cycle, from the procurement of raw materials
through to disposal and recycling into CO2, and displays it on the product ina manner that is easy to understandIdentifying the Materiality in Social Issues (up to FY2023)
We updated the materiality based on dialogue with external experts when we established the 2023 Medium-Term Business
Plan.
Themes

Domains

Social Issues
Contribute to healthy diets

HealthierLivesCaringfor the Earth

Health andNutrition

Respond to a super-aged society

Climate Change

Reduce CO2 emissions

Countermeasures against emerging
and re-emerging infectious diseases

Circular Economy Reduce environmental impact
Water

38 Progress for 2023 Medium-Term Business Plan

ThemesThriving
Communities

Domains

Social Issues

Human Capital

Promote diversity and develop
human capitalSociety

Respect and promote human rights

Sustainable Sourcing

Source raw materials considering
human rights and the environment
See page 84 for the progress of initiatives

A document is available on our website, in which the roadmap
and action plan for achieving carbon neutrality are summarized.
Toward Carbon Neutrality (PDF)

Secure water resources

Meiji Holdings Co., Ltd.｜Integrated Report 2022 39

Progress for 2023 Medium-Term Business Plan

Contents

Sustainability Strategy

Improving Human Capital as a Top Priority and Focusingon Developing Human Capital and Promoting D&I
Working to Achieve Water Neutrality,
Promoting Sustainability in the Supply Chain

Improving Human Rights Due Diligence andExpanding Human Rights Education Globally

Addressing water resources is an essential theme forbiodiversity conservation. We are currently analyzing therisks of areas where we procure raw materials. If weunderstand the water risks of our procuring areas byanalyzing flood and drought risks, we can manage risks
such as by switching procurement areas in the event of adisaster. We will also work to achieve water neutrality.* KM
Biologics Co., Ltd. has already implemented water source
recharge and achieved positive results. We will expand
this to the operating sites and factories in Meiji Co., Ltd.
and Meiji Seika Pharma Co., Ltd. By returning the water
resources we use for our products to nature, we willcontribute to forest conservation.
The latest biodiversity-related issue is that weparticipated in the TNFD (Task Force on Nature-related
Financial Disclosures Forum) in May 2022. We will respondquickly to the TNFD and disclose the necessary
information as we did with the TCFD.
There is still much for us to do for sustainability in our
supply chain. First, we are conducting a questionnaire
survey for our suppliers. We want to learn about their
human rights and environmental initiatives andencourage them to solve any issues. We expanded thescope of this survey to include the Group companies andprimary suppliers in FY2021. We are planning to expand toinclude primary suppliers of the Group companies in
FY2022. We will share any identified issues with our
suppliers and take quick action to solve them.

The Group considers human capital to be as important as
natural capital. In recent years, the market has been
paying more attention to human capital investments andtheir outcomes. The Group is focusing on human capitaldevelopment to enhance its corporate value. Also, we arestrengthening our Diversity & Inclusion (D&I) efforts by
establishing a dedicated organization in October 2021. For
promoting gender equality in the workplace, a female
Executive Officer has been appointed in Meiji Co., Ltd.
We will also improve human rights due diligence toboost our human capital. In FY2021, we conducteda survey of foreign workers including partner companies.
No major problems were discovered, but there were somedifferences in the awareness and responses among
factories. We will thoroughly implement the Meiji Group
Foreign Worker Employment Guidelines that we recently
established to address these issues. We will create
a comfortable working environment at all our operatingsites.
As globalization progresses, the number of local
people working at our local subsidiaries will increase.
Considering this, we have started human rights training
program at our overseas subsidiaries. In FY2021, we
conducted the training program via e-learning at Meiji
America Inc. and Medreich Ltd. They are our major
overseas subsidiaries in the Food and Pharmaceuticalsegments. We plan to conduct the training program at
more operating sites in FY2022.

* Water neutrality: Eventually reducing the impact on water resources caused
by water withdrawal and wastewater discharge from business activities tozeroMeeting Requirements as a Company while
Pursuing Sustainability Unique to the Meiji Group
Achieving Quicker and More Advanced
Initiatives by Integrating Sustainability
Functions into Meiji Holdings

Achieving the Meiji ROESG by Ensuring
Every Employee Has a Sense of
Ownership over Sustainability

The sustainability trend is on the rise globally. Therefore,
we integrated the sustainability functions of each
operating company into the Sustainability Management
Department in Meiji Holdings in April 2022. In the
Sustainability Management Department, we establishedthe ESG Communication Group and Supply Chain Group.
The ESG Communication Group is responsible forcommunicating with ESG evaluation organizations toachieve the Meiji ROESG®*1. The Supply Chain Group will
strengthen the supply chain initiatives. Since we now
have personnel with various specialties, we can addresseach issue in greater depth. Thereby, we can improve thequality and speed of our efforts.
We will regularly hold the ESG Advisory Board to
improve the Group’s sustainability. We have held the ESG
Advisory Board twice. External experts have provided
suggestions to management including some toughopinions. These meetings are live-streamed and relevant
employees can watch and share experts’ opinions as if
they were participating in the ESG Advisory Board. We areworking closely with overseas group companies to ensurethat sustainability activities are at the same level globally.
Thereby, we will enhance our sustainability activities.
In my opinion, currently, we need a specialized
department to promote sustainability. However, I would
like to see this department disbanded in the future. If all
employees thoroughly integrate the topic of sustainability
into their daily work, this department will no longer besignificant. I will raise the level of our sustainability efforts
to achieve this goal.

We want to achieve the Meiji ROESG outlined in the 2023
Medium-Term Management Plan. To this end, the entire
Group should raise its awareness of ESG. Also, every
employee should have a sense of ownership oversustainability. We ensure that all employees are aware of
the ESG indicators that contribute to the Meiji ROESG.
Specifically, we hold online courses to learn sustainability.
In FY2022, we renamed Meiji Sustainable College andlaunched a wide range of courses. The employees’
motivation has increased, and they are seriously thinking
about what they should do to achieve the Meiji ROESG.
We have implemented the Meiji Brand Award program
to promote employee awareness. This award recognizes
activities that embody our slogan, Now ideas for wellness.
We award the Sustainability Grand Prize for activities
related to sustainability. One of the activities awarded in
FY2021 was KM Biologics’ participation in the “Furugi deVaccine”*2 program. Through the Meiji Brand Award, weshow all employees that they can contribute to solvingsocial issues in their daily lives. Award-winning activities
are spread throughout the Group to encourage employees
to have a sense of ownership.
We will pursue sustainability in the Group’s uniqueway. As we already know, reducing CO2 emissions andconserving water resources are important to us as theGroup. For us, sustainability, which is unique to theGroup, is contributing to health. Nutritionals andmedicine, which make people healthy, are our specialties.
Therefore, I would like to address the social issues inthese fields in greater depth so that we can contribute tosolving them. By addressing these challenges, we want tobe a leading company in sustainability activities in theJapanese industry by the end of the 2023 Medium-TermBusiness Plan.

*1 ROESG is a registered trademark for a management indicator developedby Kunio Ito, a professor at Hitotsubashi University.

*2 Activities to deliver polio vaccines to children in developing countries by
selling used clothes overseas

Participating in the “Furugi
de Vaccine (Providing
vaccines by donating usedclothes)” program, which
won the Sustainability Grand
Prize.

40 Progress for 2023 Medium-Term Business Plan

Poster for the Meiji Brand Award.
There were more than 500 submissions.

Meiji Holdings Co., Ltd.｜Integrated Report 2022 41

Our Initiatives to Support Sustainable Value Creation

Contents

Diversity & Inclusion

Human Capital Management

People’s values are diversifying in both the consumer and labor markets. We should promote D&I to sustain growth in suchan environment. We will accelerate diversity in our core human capital by hiring and promoting women, non-Japanese,and experienced personnel from outside the company. Also, we will strengthen our competitiveness by creating diverse
career options including senior human capital.

Establishing the Meiji Group Diversity & Inclusion Policy

Strategically Investing in Human Capital,
the Source of Value Creation, and Promoting
Human Capital Strategies Based on Management Strategies

We established the Meiji Group Diversity & Inclusion Policy in December 2021 to promote D&I toward realizing the MeijiGroup 2026 Vision. We will promote D&I to provide customers in Japan and around the world with progressive values infood and health.

Human capital is extremely important because it supports the Meiji Group’s value creation. We believe that respecting
employees’ diversity and making individuals perform to the best of their abilities lead to the Group’s sustainable growth.
The Group is shifting its human capital strategy from internal equal treatment to competition with external competitors.
We will strategically promote human capital development to create and deploy Meiji unique value for wellness globally.

Human Capital Strategy in the Meiji Group
Corporate Culture for Realizing
the Meiji Group 2026 Vision

Employees are working lively
with passion in an environment,
structure, and culture where
they perform to the best of
their abilities.
Page 05 Meiji Group 2026 Vision

Until now

Being fair and reasonable so that everyone in the Group treatedequally (internal equity).
In a closed-off internal competitive environment, employees andculture become homogeneous, causing innovation to stagnate.

In the future

Developing human capital that can overcome the intensifying
competition and the rapidly changing external environment by notlimiting itself to internal knowledge, skills, and human capital(competing with external competitors).

Ideal humancapitalstrategy

Creating work environment where employees accept
and maximize each other’s diverse values, knowledge,
and abilities

1. Promoting the performance of diverse human capital

We will develop a work environment where human capital with diverse backgrounds* performs to the best of theirabilities and play an active role in various positions.
* Gender, sexual orientation/gender identity, career, age, nationality, disability, employment status, during childcare/caregiving, etc.

2. Accepting and maximizing each other’s diverse values

We will accept and maximize each other’s diverse values, knowledge, and abilities to create innovation and new value,
which lead to corporate growth.

We will recruit, train diverse human capital and improve working environments to enhance sustainable corporate
competitiveness. For this, we will establish a D&I promotion system and set numerical targets for core human capital.
Meiji Group Diversity & Inclusion Policy (PDF)

Establishing a Group Human Capital Committee

Three Approaches to Promoting D&I
The Group promotes D&I through three
approaches: creating diversity, leveraging
diversity, and expanding diversity. Through thesethree complementary approaches, we promote
D&I and foster the Group culture.

We established the Group Human Capital Committee in April 2022, an advisory body of the Executive Committee. In
FY2022, we will discuss Diversity and Inclusion (D&I), Human Capital Development, and Health and Productivity
Management. We will then set up KPIs. We will promote the human capital strategy based on management strategy
throughout the Group.

1

Creating a Culture and Structure Essential for
Sustainable Growth

From Human Resource Strategies toManagement Strategies

We will consider the ideal state of the Group’s humancapital and develop a system where employees perform
to the best of their abilities to realize the Meiji Group
2026 Vision. In particular, we will promote a strategy thatemphasizes the development of core human capital tolead management strategies.

42 Our Initiatives to Support Sustainable Value Creation

Monitoring, Instruction

Management Meeting

From Human Resources to Human Capital

We view employees as capital, not resources. We will
strengthen human productivity and the ability to create
value through investments focused on improving quality.

2

Reporting

Enhancing Human Productivity andValue Creation Capabilities

Recruit human capital witha variety of different attributes

Systems to blend
diverse values

Creating diversity

Leveraging diversity

Discovering andexercising individuality

Cooperation

The Meiji Group Human Capital Committee
Chair
Vice-Chair
Members

Meiji Holdings / CEO, President and Representative Director
Three Operating Companies / President and Representative Directors
Meiji Holdings / Executive Officers andGeneral Managers of Group HR Strategy Department,
Sustainable Management Department, andCorporate Development Department
Three Operating Companies / Executive Officers andGeneral Managers of HR Department andCorporate Development Department
Secretariat Group leaders of each HR Department,
managing directors of health insurance societies, etc.

Human Capital
Development
Subcommittee

Toward Executing
Our Business Strategy

Creating Attractive
Human Capital

The Meiji Group
Sustainability
Committee

Discussion (policy and target etc.),reportingDiversity & Inclusion
Subcommittee

To Survive

Expanding diversity

The Board of Directors

MissionComplementary Approaches to Promote D&I
and Foster the Group Culture

Health and Productivity
Management
Subcommittee

Promoting Female Participation
Promoting female participation is a critical theme
for the Group. In FY2021, we changed our mindset
by promoting female employees to management
positions and conducting training on unconscious
bias. In FY2022 and beyond, we will formulate andimplement measures to promote female
participation throughout the Group. Specifically,
we will establish a network for women at the same
career level and promote the creation of acomfortable working environment. In this way, we
will develop a structure and culture where female
employees can perform to the best of theirabilities.

Ratio of female managers (%)

Number of female leaders*[Target]420[Target]10

3.4
FY20193.7

FY20204.7

FY2021

FY2026

189

208

FY2019FY2020237

FY2021

FY2026* Leaders: persons in managerial positions
and assistant managers

Meiji Holdings Co., Ltd.｜Integrated Report 2022 43

Human Capital Management

Our Initiatives to Support Sustainable Value Creation

Human Capital Development

Health and Productivity Management / Employee Engagement

We strive to invest in talented human capital who can execute our strategies to ensure the Group’s sustainable growth. We
strengthen the knowledge, skills, and abilities of each individual so that they can do their best in their work. In particular,
we are focusing on discovering and developing the managers who drive the Group forward in the future. We will define theuniversal skills and abilities required for the managers regardless of the business. To achieve this, we are building a
training system.

Required Abilities for Managers who Drive the Meiji Group Forward
The Meiji GroupManagement Human Capital

Growing the Group
using specialized
expertise

Senior management

Playing a central role increating and executing
strategies forsustainable growthInstigating change/
strategic human capital

Leading the organizationand enhancing theteam’s strength

Management

Specialists(Using the organizational capabilities)(Specialized expertise)

We view the physical and mental health of the employees from a management perspective. For this, we consider Healthand Productivity Management important. We will increase productivity by strategically investing in maintaining andimproving the health of our employees. We monitor the results of our human capital investments through our Employee
Engagement Score. In this way, we will also focus on deepening trust between employees and the Group.

The Aim of Health and Productivity Management

Increased employee
productivity
improves the Group
performance

Regular employees

Desired Management Human Resources (Leadership Value)
We developed our Desired Management
Human Resources (Leadership Value) in2017. It forms the basis for our medium- tolong-term succession management. It
outlines ideal management human capital
who is determined to achieve the MeijiGroup 2026 Vision. We will implement
measures to promote developing humancapital focusing on Leadership Value whileleveraging each individual’s strengths andindividuality. Consequently, we willdevelop candidates who drive the Group
forward.

1. Reaffirm the participant’s abilities, skills, andcompetencies, and create a personal developmentplan

To maintain andimprove employee
health areinvestments
not expenses

Health and Productivity Management Strategy Map (PDF)(Japanese version only)

Increasing Employee Engagement

3. Through these activities, the participant develop amanagement perspective and change mindset

One of the goals of Meiji ROESG®* Management is to enhance employee
engagement (empathy with the company). Due to the COVID-19 pandemic in
FY2021, we faced difficulties in business performance and had to reform ourwork system. As a result, expectations for the Group were lower than previous
results (in FY2019). For this reason, we created opportunities for dialogue
between employees and senior management. Participants shared insights andopinions on how to realize Now ideas for wellness. This way, we are fostering a
sense of unity throughout the Group.

The Meiji Group 2026 Vision
Establish growth
foundation inoverseas markets

New challenges
in the healthvalue domain

Strategy formulation /execution

Socialcontributions

Organization / people

Imagination

Share information

Decisiveness

Ability to motivate

Ability to achieve breakthroughs

Magnanimity for others’ mistakes

Ability to channel creative energies

Ability to develop others’ talents

Ability to recognize and channel diverse talents
Upstanding personality

Online dialogue between CEO Kawamura(top left) and employees* ROESG is a registered trademark for a management indicator developed by Kunio Ito,a professor at Hitotsubashi University.

Engagement Score Results

Initiatives to Enhance Engagement

Plan

AAA
AA
A

FY2023 [Target]

Hold meetings to exchange
results at the workplaces

BBB
BB
B

FY2019 [Result]
FY2021 [Result]

Set up action plans(Responsible: generalmanager)

CCC
CC
C
DDD
DD

Grades are calculated basedon survey results from athird-party evaluation
organization and are given on
an 11-point scale from AAA toDD.

See
Conduct surveys every
year in June

Do

Plan

Do

Develop clear strategies,
execute, and lead tothe breakthrough for untried
situations in Japan and overseas

Draw out and improve the potential of
the organization,lead the organization bymaking the most of people with
an open-minded approach.

Personal

44 Our Initiatives to Support Sustainable Value Creation

Investment

2. Make a management reforming plan for theparticipant would implement and report it to the CEO

Ability to instigate change
and lead reform efforts

2026
Leadership Value

Meiji Holdings Co., Ltd., Meiji Co., Ltd., and Meiji
Seika Pharma Co., Ltd. have been recognized asa Certified Health & Productivity Management
Outstanding Organization for the sixth
consecutive year since 2017 under the CertifiedHealth & Productivity Management Outstanding
Organizations Recognition Program (Ministry of
Economy, Trade and Industry). Our initiatives for
employee health were highly evaluated.
Initiatives include health checkups, healthguidance, mental health care, support forexercise habits, etc. KM Biologics Co., Ltd. has
also been recognized as a Certified Health &Productivity Management Outstanding
Organization for two consecutive years in 2021
and 2022.

in employees
in healthhealth(Defense→Offense)• Quality of life improves• Time increases, which employees are working ingood mental and physical health with vitality[Program Overview]

Secure anoverwhelming advantage
in core businesses

Required
Leadership

The MeijiGroup

Employees/family

Development Program for Managers who Drive the Meiji Group Forward
Of the three characteristics of management human capital, development of“instigating change/strategic human capital” is critical to further
strengthening the Group management. If such human capital takes theinitiative in developing and implementing progressive strategies, we cancompete with external rivals and survive in the future. To achieve this, wehave launched an eight-month Development Program for Managers whodrive the Group forward in FY2021. The participants of the program were
Executive Officer and selected Executive Officer candidates.

Recognized as a Certified Health &Productivity Management
Outstanding Organizationfor Sixth Consecutive Year

We will maximize productivity to embody the Group slogan Now ideas
for wellness. To achieve this, both the Group and individuals should
fulfill their responsibilities and keep employees healthy and energized.
Therefore, we established and announced the Meiji Group Health andProductivity Management Strategy Map. We have selected healthy
lifestyle habits (diet, exercise, quit smoking) as key to preventing
obesity. We have set KPIs and are promoting measures accordingly.

See

The Group management team works
together to lead sustainable growth.
The figure on the right shows threecharacteristics of the Groupmanagement team: instigatingchange/strategic human capital,
management, and specialists. Our
management team should consist ofmembers whose strengths are at least
one of the three characteristics. We will
prepare to adapt to changes by having
diverse perspectives.

Contents

Check• Visualize employee
engagement status• Report results to management• Report results to the general manager& A c ti o n

Check & Action• Review progress ateach workplace• Share examples of
initiatives in individual
workplace acrossthe Group

Meiji Holdings Co., Ltd.｜Integrated Report 2022 45

Our Initiatives to Support Sustainable Value Creation

Contents

Food Segment

Intellectual Property Management

The Food segment has a unique IP model. We believe patents, technological know-how, and trademarks are equallyvaluable in our IP model. They are interrelated and support business activities.

Obtaining Patents StrategicallyIntellectual property (IP) is one of the most important management resources for improving corporate value over the
medium- to long-term. The Meiji Group implements an IP strategy that provides value for wellness and helps solve social
issues. While respecting the IP rights held by third parties, we are implementing our IP strategy following threeperspectives: (1) obtain patents strategically; (2) manage technological know-how; and (3) utilize trademarks that are
unique to the Group. This way, we will realize our Group slogan, Now ideas for wellness.
We believe that our R&D activities, business activities, and IP strategy are inseparable. Therefore, IP management isa system to formulate and implement unique IP strategies for each Food and Pharmaceutical segment.

* Major categories are defined by Meiji Co., Ltd.

Maroyaka Tannen Hakkou (Patent No. JP3644505)

SD
G1
5
SDG 1
4

04
SDG
SD G 0 5
G 06

SD

07

12

SD

SDG
G1

1

SD G

1 0 S D G 09 S D

G 08

SD

G

Good Healthand Well-being

Sectors: UN Sustainable Development Goals
Sector Size: portfolio Size

The Group’s patents are characterized by their highcontribution to SDG 2 and SDG 3. This is because we havethe Food segment and Pharmaceutical segment.

46 Our Initiatives to Support Sustainable Value Creation

100

Meiji Co., Ltd.

Confectionary(chocolate/gummy products, etc.)
Company C

2

3

4
5
Patent score per patent

6

7

Raku Raku Cube (Patent No. JP4062357)
We established the firstmanufacturing technology fortablet-type infant formula, which has
been a great challenge. This
technology has dramatically improved
the convenience of preparing formulaand supported comfortable parenting.
Meiji Hohoemi Raku Raku Cube▲

Percentage of Our Patents Related to SDGs (%)
Percentage of our patents related to SDG 3

3
G0
SD

SD G 1 3

Portfolio
Size

Zero Hunger

Company B

MeijiCo., Ltd.

Nutrition

Company A

200

Meiji Bulgaria Yogurt LB81 Plain

Bubble size: Number of patents related to SDGs

230

300

This invented technology realized
the smooth flavor and soft textureof yogurt. In FY2021, it received the“Tokyo Excellence Prize of
HATSUMEI KYOKAI (Japan Instituteof Invention and Innovation)” from
Local Commendation for Inventionof Kanto.

*1 Provided by LexisNexis Japan Co., Ltd., PatentSight Japan Inc.
*2 Sustainable Development Goals (SDGs) adopted at the UN Summit in September 2015

419

Yogurt/cheese/functional yogurt

Using Biz Cruncher® by Patent Result Co., Ltd., prepared by Meiji Co., Ltd.

IP management contributes to the realizing the Meiji Group Sustainability 2026 Vision. We analyzed the Group’s patents
using the LexisNexis® PatentSight,®*1 a patent analytics tool. As a result, approximately half of our patents were related to
SDGs.*2 We will continue to monitor the relationship between R&D activities and SDGs by analyzing them using this tool.

DG 17 SDG 01 S
DG
6 S
G1
02
D
S

Meiji Co., Ltd.

4000Intellectual Property Management and Sustainability

The Meiji Group’s Patents Related to SDGs

Bubble size: Total score by category▲

Implementing Intellectual Property Strategies Alignedwith the Business Characteristics of Food andPharmaceuticals from the Perspectives of Patents,
Technological Know-how, and Trademarks

Patent Competitiveness by Major Category

Number of patents held

We strategically obtain patents and accumulate R&D
results as intangible assets. We have compared the
Patent Score® provided by Patent Result Co., Ltd. withour competitors in major categories.* As shown in the
figure on the right, our patents showed higher value
than competitors in both quality and quantity. We will
maintain and improve this advantage and contribute to
the sustainable growth of our business.

20

15

10

The Meiji Group
Company
Company D
KCompany E
CompanyG
Average of Companies A-L*

Company
L
Company F
5Company
Company
H
J
Company I
0
20
30
40
50

Company C

60

Company B

Company A
70
80

Percentage of our patents related to SDGs out of all patents held

Major Technological Know-How
We have accumulated a technical foundation in materials, evaluation, and processing over the years. Based on thisfoundation, we have created world-class technological know-how. Using this know-how, we will create value unique to
Meiji. For example, we evaluate factors such as aspiration risk using Swallow Vision, the 4D swallowing simulator. The
device was developed in-house to observe eating
behavior. Thus, we develop foods appropriate for age
group and physical function. We will build up our
Nutritional Formulation
technological know-how through R&D and quality
Physical Property Control
management.
Major Technological Know-How

Materials* Average of top-selling food companies (A-L) excluding the Meiji GroupThe Group has a high percentage and number of patents
related to SDGs, especially SDG 3 among food companies inJapan.

Formulation
DesignMaterial Processing

Enzyme Processing

Material Fermentation

Fermentation

Material Formulation
Processing

Fats and Oils

Analysis
Evaluation

Omics-related Technology

Emulsion Stabilization
Sterilization Stabilization
Enzyme Treatment

Processing

Raw Material Selection
Blending
and Sterilization

Aroma Analysis

Sterilization
Homogeneity
Stirring and Mixing
Sterile Filling

Bioinstrumentation

Fillingand Packaging

Eating Behavior

Microorganisms

Fermentation

Cell-based Assays
Evaluation

Flavoring

Preservation

Meiji Holdings Co., Ltd.｜Integrated Report 2022 47

Intellectual Property Management

Our Initiatives to Support Sustainable Value Creation

Food Segment

Pharmaceutical Segment

Using Trademarks Unique to Meiji
FY2022

We have obtained a variety of trademark rights. Through our trademarks, we communicate
the value and attractiveness of our products. In recent years, we have been offering newvalue through different approaches from traditional trademark value. We have obtained
trademark rights based on social contribution concepts to support our sustainability
activities. In recognition of these unique trademark activities, in FY2022 we received the“Intellectual Property Achievement Award” (Award from Commissioner of the Japan Patent
Office) as a good-standing company Utilizing the Intellectual Property Rights System.

Intellectual
Property
Achievement
Award

Receiving Award
from Commissionerof the Japan
Patent Office

Providing New Value

Integrating with
Sustainability Activities

We have obtained text, graphic, 3D, andother trademarks to promote the value ofour products. We also own the house
mark trademarks “meiji” and “明治” inapproximately 90 countries.
Consequently, we gain consumer
confidence in the safety and reliability ofour products.

We collaborated with Laforet Harajuku
Co., Ltd., a shopping mall, tocommemorate the 95th anniversary of
the launch of Meiji Milk Chocolate. Bothparties resonated with each other andcreated a new outlook on the world.

We use the Meiji Hokkaido Tokachi
trademark on cheese, yogurt, and otherproducts manufactured at our Tokachi
Plant in Hokkaido. The logo
communicates the value of the raw milk
and dairy products produced in the
Tokachi region to customers. The logo
represents the rich nature and land of
Tokachi and contributes to promoting theTokachi region.

In the Pharmaceutical segment, we protect the value created through the research, development, manufacturing, andsupply of products by patents and technical assets. The Meiji Group will focus more on obtaining patents andaccumulating technical assets, including in our specialty area of infectious diseases, and support our business activities.

Obtaining Patents Strategically
We have provided a number of infectious disease drugs and vaccines. As shown in the figure below, our Patent Score® values forthe infectious diseases and vaccines areas are high. We will continue to obtain intellectual assets related to preventing,diagnosing, and treating infectious diseases caused by bacteria and viruses including SARS-CoV-2 through open innovation.

ꞵ-Lactamase Inhibitor (OP0595: Patent No. JP6265892)
Infections caused by drug-resistant bacteria* are expanding ona global scale. We will contribute to solving such problems by
developing novel ꞵ-lactamase inhibitors.
* Bacteria that have become resistant or low susceptible to antibacterial drugs

Manufacturing Method for a 5-in-1 Vaccine(KD-370: Patent No. JP6944946)

When KD-370* becomes available, it will reduce the number ofchildhood vaccinations and contribute to preventing the onset of
disease in vaccinated individuals. We have established a highly
stable Hib vaccine manufacturing technology with this patent.
* 5-in-1 vaccine: Vaccine against pertussis, diphtheria, tetanus, polio,
and haemophilus influenza type B

Bubble size: Number of patents held
180

Infectious diseases
and vaccines

140
100
60
20
0
45

Immuno-inflammation
Newbornmass screening
Fundamental
technology
50

55

60

Blood plasma products
CNS disorders
Cancer
65

70

75

80

85

90

95

Highest Patent Score
Using Biz Cruncher® by Patent Result Co., Ltd., prepared by Meiji Co., Ltd.

Managing Technological Know-How
Campaign graphics and catalog covers

We have a broad technical foundation from drug discovery research through development and product supply. This
foundation includes small molecule drug synthesis, vaccine strain generation, antibody creation, the evaluation andformulation for drug candidate selection, and technologies for establishing manufacturing methods and actual
production. This also includes clinical development expertise. In addition, we strategically manage the value generated bythis technological know-how to increase corporate
Chemical Synthesis
value.

Extending the Product Life Cycle

The Synergy Model between Patent/Technological Know-How and Trademark
Our mainstay products are characterized by long periods ofgrowth and the maturity stage in the product life cycle.
Well-established product trademarks in the marketplace
become brands. Furthermore, a new value is added to thetrademark. As a result, the products keep attracting customers
even after the patent expires. In other words, patents andtechnological know-how build barriers to entry and attracting
customers through trademarks increase intellectual property
value. We support businesses over the long term by interrelating
barriers to entry with intellectual property value. In this way, we
support businesses over the long term.
Strong patents which were results offundamental research, have protected Meiji
Probio Yogurt R-1 and created a significant
barrier to entry. Consequently, we created
new markets and achieved growth. Even
after the patent expired, the business has
been growing stably because the trademark
has expanded its value.

48 Our Initiatives to Support Sustainable Value Creation

Technology Classification Score Map
Technology classification score

Ownership and Use ofa Variety of Trademarks

Kinoko no Yama (left) and Takenoko no Sato(right) were registered as 3D trademarks
based solely on the shape of the products.
Very few 3D trademarks were registered for
product shapes without logos or letters.
Thereby, it became a hot conversation topic
in the media and SNS.

Contents

Mass
Production

Example) Meiji Probio Yogurt R-1
Net sales
GrowthStage
Introduction
Stage

Major Technological Know-How
Compound and Strain Library

MaturityStage

Product
Life Cycle

DeclineStage

Drug Discovery
Screening

Commercialization

Antibody Creation

Time

Drug
Discovery

Ability to
Attract
Customers

Barriers to
Entry

Evaluation

VaccineEquipment

Manufacturing
Facilities

Management

Setting Specification
CMC

PatentManufacturing Process Development

Time

Commercialization

Raw Materials

Cell and Virus Strains
Cell BanksGxP Compliance
Biopharmaceutical Safety Measures
GxP Compliance

Formulation Design

Technological Know-How

Mass Synthesis andFermentation Equipment
Injection and Oral Formulation

Physical Property Evaluation

Time

Tablets, Granules and Capsules

Manpower Saving and Automation

Efficacy Evaluation
Pharmacokinetic Evaluation
and Prediction

Sterile Filling and Lyophilization Process

Continuous Production

DesignSafety Evaluation and Prediction

Expiration of Term

Sterile Filtration

Formulation

Vaccine Strain Creation

Purification
Virus Removal and Inactivation

SafetyOrganic Synthesis Technology
Vector, Producing Cell Production

Cultivation

Evaluation

Analysis

Quality Testing andCharacterization Analysis
Newborn Mass Screening
Meiji Holdings Co., Ltd.｜Integrated Report 2022 49

Our Initiatives to Support Sustainable Value Creation

Contents

Climate Change Initiatives

Coexisting with Nature

Greenhouse gases contribute to climate change. The Meiji Group aims for carbon neutrality by reducing GHG emissions to
net-zero throughout our supply chain by 2050. As we continue to grow our business, we will systematically reduce GHG
emissions through our business activities and contribute to the realization of carbon neutrality.

Effect of Future Carbon Pricing
We plan to reduce the effect of carbon pricing by JPY 1.4 billion in 2030 under the 1.5°C scenario* through energy
conservation activities, energy creation activities, and the purchase of electricity from renewable energy sources. We arealso planning to reduce the effect of carbon pricing by JPY 1.9 billion in 2050 by strengthening measures in accordancewith the transition plan, such as by actively introducing next generation energy. By deducting the cost when nocountermeasures are taken, the cost will increase by JPY 3.7 billion in 2030. We can assume a cost increase of JPY 8 billion
for 2050 since zero CO2 emissions cannot be expected with
Effect of Our Carbon Pricing
current technology and we must purchase JPY 4 billion in
Under the 1.5°C Scenario (Billion Yen)emission credits. In addition, based on the carbon price in
Detail of initiative
2030 2050
each country which main raw materials (Scope 3) are
1. Amount of carbon pricing borne when
procured, we assume that the effect will be an increase of
5.1
5.9
no countermeasures are taken
JPY 20.1 billion for 2030 and an increase of JPY 27.7 billion for
2. Amount of carbon pricing reduced
−1.4
−1.9
2050, due to the implementation of the following measures.
through countermeasure

Conserving the Bounty of Nature
through Business Activities
The Meiji Group is based on the bounty of nature, such as raw milk, cocoa, lactobacillus and microorganisms.
Natural capital is an important business foundation. We must maintain the bounty of nature to sustain ourbusiness. Therefore, we are promoting efforts to coexist in harmony with nature by clarifying the relationshipbetween our business activities and natural capital in the supply chain.

Map of Relationship Between the Meiji Group and Biodiversity
Climate change
Resource depletion
Loss of habitats
Pollution

Raw materials(raw milk, cocoa, palm oil, timber, etc.)

Climate change
Resource depletion
Loss of habitats
Pollution

Energy, water, land

Energy, water, land

GHG emission
Chemical emissions
Land changeRawmaterialsourcing

GHG emission

Logistics
牛乳

明治

Climate change

Input intobusiness activities
Output frombusiness activities
Relationship withbiodiversity

新 鮮 な 生 乳 の お い し さ ︑そ の ま ま

おいしい

おいしい牛乳Land change

EnergyMarketing

GHG emission
Land change

Climate change
Loss of habitats* GHG: greenhouse gas

Addressing Social Issues in Raw Material Sourcing
Climate Change
Biodiversity
Increased flooding,heavy rainfall

GHG
emissionsChild labor,
forced labor,
deforestation

Decrease infood yield due toglobal warming

Concern for the sustainability of the global environment has grown in recent
years. As a result, biodiversity, which produces the bounty of nature, is ina critical situation. In order to address this, the Meiji Group is concentratingon the areas of climate change, biodiversity, supply chain management, andother initiatives. We are aiming for sustainable business development while
receiving the bounty of nature into the future.

50 Our Initiatives to Support Sustainable Value Creation

3. Amount of emissions allowances purchased
to reduce CO2 emissions to net-zero

−

4.0

Total

3.7

8.0

Supply Chain
Management

Carbon Neutrality Roadmap

Page 51
Page 54
Page 56

In this part, we will describe our efforts in thethree areas above based on our recognition of
the issues presented on the left.

See page 84 for details on progress

We aim to reduce Scope 1*1 and Scope 2*2 greenhouse gas emissions by 50% by FY2030 and achieve net-zero emissions by
2050. We are also aiming to reduce Scope 3*3 emissions by 30% by FY2030 and achieve net-zero emissions by 2050 (bothcompared with FY2019).
*1 Direct greenhouse gas emissions by the reporting company itself. *2 Indirect emissions from the use of electricity, heat, or steam supplied by others.
*3 Indirect emissions from the supply chain other than Scope 1 and Scope 2 emissions

Scope 1, 2

Energy, land

Waste,
consumption,
recycling* Three scenarios (1.5°C, 2°C, and 4°C) were established based on International
Energy Agency (IEA) scenarios such as NZE, SDS, APS and STEPS. The 1.5°C
scenario is considered to be the primary impact.

Land change

明治(water/soil, air)Chemical emissions (water/soil, air)Research,
manufacturing(water/soil, air)

Energy, water
Climate change
GHG emission
Resource depletion
Pollution
Chemical emissions

GHG emission

The figure on the right showsa roadmap to net-zero greenhousegas emissions by 2050. We arepromoting the introduction ofenergy-saving equipment and switch
to low-CO2 emitting fuels to realize
carbon neutrality. We also actively
introduce solar power generation
facilities and purchasing electricity
from renewable energy sources. In
the future, we will introduce
next-generation advanced
technologies such as biomass andhydrogen fuels as well as
methanation and carbon recycling.

Scope 3

FY2019 (base year)

FY2030590*

295

thousandtCO20

thousandtCO2-459 thousand
tCO

2

2050

131

thousandtCO2-295 thousand
tCO

600

FY2040thousandtCO2-590 thousand
tCO

2

2

500
235
400

Scope 1

300
200
100
0

50 % reduction
208

355

Scope 2

87

104

Net-zeroachieved

27[Calculation condition]
KPI on the renewable energy electricity ratio for FY2030: 50%, CO2 emission factors of electricity arebased on IEA’s Net Zero Emissions by 2050 Scenario. Figures approved by the SBT initiative.
* The base year emission figures approved by the SBT initiative exclude vehicle-related CO2 emissions
from FY2019 (Scope 1 and 2).

We are actively working with business partners such as raw material and packaging material suppliers to reduce CO2
emissions in order to achieve carbon neutrality throughout our supply chain. For main business partners, we first
ascertain the actual status of CO2 reduction targets and initiatives, and then proceed with engagement.
Meiji Holdings Co., Ltd.｜Integrated Report 2022 51

Coexisting with Nature

Our Initiatives to Support Sustainable Value Creation

Contents

Climate Change Initiatives

Reducing CO2 Emissions

See page 84 for details on progress

Secure Water Resources

See page 85 for details on progress

In FY2021, we joined the RE100 global initiative that aims to cover 100% of electricity used in our own business withelectricity from renewable energy sources. At the same time, we obtained certification for our CO2 reduction targets fromthe Science Based Targets (SBT) initiative. We also set an internal carbon pricing system to promote CO2 reduction
activities. Furthermore, in FY2022, we raised our CO2 reduction target for FY2030 to meet the 1.5°C target that was
reaffirmed at the UN Climate Change Conference (COP26).

The Meiji Group is responding to water risks, which are increasing as a result of climate change, through various
approaches. In FY2021, we conducted a survey on water risks at domestic and overseas sites. We analyzed water risks indetail by closely examining the gap between the results of this survey and the assessment by Aqueduct*. The analysis offlood damage under the 4°C scenario was calculated at JPY 300 million per disaster based on past cases. We expect that 12
sites have high opportunity losses due to flood risks. We will continue to prioritize flood risks and respond to them inorder.

Initiatives to Date

* A tool published by the World Resources Institute (WRI) to assess global water risks based on latitude and longitude

FY2021• Participation in RE100• Acquire SBT (Science Based Targets) certification

Water Use Efficiency* Scope 1 and 2 of CO2 emissions reduced by 42% compared with FY2015;
Scope 3 of CO2 emissions reduced by 14% compared with FY2019

We are reducing water consumption primarily at our production sites. In FY2021, we reduced water consumption by 8.4%
(per unit of net sales) compared with FY2017. The Sakado Plant of our Food segment is implementing a new initiative. The
plant expects to reduce water consumption by approximately 15,000 m3 per year by using appropriately treated recycledwater as cleaning water for the sludge dewatering machine at the wastewater treatment facility. In addition towater-saving equipment, we will continue to promote the reduction of water consumption while utilizing rainwater andrecycled water.

• Introduce internal carbon pricing system

Wastewater Quality
FY2022• Raised CO2 reduction target for FY2030 to meet the 1.5°C target

Energy-Saving Measures
We are working to save energy in all stages of our business activities. In FY2021, we achieved a 11.3% reduction of Scope 1
and 2 CO2 emissions compared with FY2019. At production sites, we are continuing to switch to fuels that emit less CO2
and update and introduce high-efficiency equipment. For example, the Osaka Plant of our Food segment is optimizing
steam pressure control used in production facilities. This is expected to reduce annual emissions by approximately 70 tonsof CO2. We will also continue to reduce CO2 emissions by investing in energy-saving equipment and improving operations
at all plants.

Promoting Use of Renewable Energy

Reduce Environmental Impact

We are working to reduce CO2 emissions through the introduction and use ofrenewable energy facilities such as solar power generation. As of June 2022,
we have introduced solar power generation facilities at 11 sites in Japan andoverseas. In FY2021, new equipment was installed at the Kyoto Plant of ourFood segment, which is expected to reduce CO2 emissions by approximately
450 tons. We will continue to expand the introduction of power generation
facilities to use renewable energy at our domestic and overseas sites.

Pharmaceutical Research Center,
Meiji Seika Pharma Co., Ltd.

See page 85 for details on progress

The Meiji Group is working to reduce our environmental impact based on the concept of circular economy to makeeffective use of limited natural capital. We are not limiting ourselves to conventional reduction of use. This is especiallytrue of plastics. We will solve problems by expanding the use of environmentally friendly materials and recycling.

Expanding Use of Environmentally Friendly Materials
Kyoto Plant, Meiji Co., Ltd.

Expanding Use of Electricity from Renewable Energy Sources
We have set a target of achieving a 100% share of renewable energy in total power usage at each site by 2050. To achieve
this target, we are expanding the use of electricity from renewable energy sources. In FY2021, we began using electricity
from renewable energy sources at our Tokai Plant and all KM Biologics Co., Ltd. sites in Kumamoto Prefecture. Twelve sites
in Japan and overseas are using electricity from renewable energy sources such as solar and wind power generation. In
the 1.5°C scenario analysis, the cost of electricity from renewable energy sources is expected to increase by JPY 0.7 billion
in 2030 and JPY 1.1 billion in 2050 based on premium prices. For our entire energy use, we expect a cost increase of JPY 2
billion in 2030 and JPY 2.8 billion in 2050. These figures incorporate reductions due to energy-saving and energy-creation
activities.

52 Our Initiatives to Support Sustainable Value Creation

The Meiji Group has established voluntary control standards for managing
the quality of wastewater that are even stricter than those required by law
in each country. Each of our business sites use advanced wastewater
treatment technology to reduce environmental impact. For example, at thePharmaceutical Research Center of our Pharmaceutical segment, we treat
wastewater in a compact, closed system facility to conserve energy andprevent pollution. When water quality abnormalities are detected, thesystem automatically stores wastewater and discharges it only after safety
is confirmed. We will continue to share information with domestic andoverseas sites and monitor wastewater quality.

We aim to increase the use of recycled and biomass plastics used in PET bottle containers forour products to at least 70% by FY2025 and 100% by FY2030. We have already been replacing
plastic cups used for SAVAS series with packaging that uses bioplastics, starting from products
produced in January 2021. We are aiming to increase the amount of biomass plastic used tomore than 1,500 tons by FY2025 and 3,000 tons by FY2030.

Recycling Discarded Plastics

Plastic cups used in the SAVAS
series were switched tocontainers using biomass
plastic

The Meiji Group is also committed to recycling discarded plastics. For example, we recycle plastic caps used for homedelivery bottles into products such as padding materials through collaboration with outside business operators. In
FY2021, we recycled approximately 1,000 tons of caps.
Meiji Holdings Co., Ltd.｜Integrated Report 2022 53

Coexisting with Nature

Our Initiatives to Support Sustainable Value Creation

Contents

Biodiversity Initiatives

Benefits from Biodiversity

The Meiji Group strives to reduce our impact on biodiversity and improve multiple ecosystem services through ourbusiness activities.

Effect of Business Activities on Biodiversity

See page 85 for details on progress

The Meiji Group assesses the effect of biodiversity in the supply chain from raw material procurement through to
production in both the Food and Pharmaceutical segments. We formulate and implement action plans based on the
results of these assessments for the conservation and restoration of natural capital.
$$: Risks of greater importance$: Risks of great importanceBlank: Risks of low importance or missing data

Environmental Risks Related to the Meiji Group’s Business Activities
Water
resource use

ClimatechangeAir pollution

Water pollution,soil pollution

Waste

Product manufacturing

$

$

$

$

$

Product manufacturing

$

$

$

$$*6

$

$$

$$*3

$

$$*7

$

$$*5

$$*8

$

$$*5

$$*8 *9

Segments

Categories

Food
Pharmaceutical

Land usechange

Dairy

$

Cocoa

$$*1

Sugarcane$$*1

Palm oil

$$*1

$$*4

$$*5

$$*8 *10

Soy

$$*1

$$*4

$$*5

$$*8

Pharmaceutical

Eggs

$

$

$

$

Food /
Pharmaceutical

Timber (paper)

$

$

$

$

Food

$$*2

$

$

[Examples of Major Risks] *1 Conversion from forest to agricultural land *2 Irrigated cultivation of crops*3 Methane emissions from fermentation in digestive track *4 Peatland fire caused by slash-and-burn*5 PM2.5 emissions caused by slash-and-burn *6 Chemical substances contained in plant wastewater*7 Water pollution due to grazing *8 Use of highly toxic and lingering pesticides in developing countries*9 Water pollution from fertilizer application *10 Water pollution by palm oil plant wastewater

Responding to Biodiversity Conservation

Raw materials, the bounty of nature, are essential to the business activities of the Meiji Group. They are exposed to theeffects of climate change and water risks. We believe that Group’s understanding and appropriate response will lead to theconservation of biodiversity, thus we are putting it into action.

Impact of Water Risks on Main Raw Materials* and Yield Forecasts
The Meiji Group analyzed water risks in the production areas of main raw materials so that we can continue to sustainably
receive the bounty of nature. We also examined the impact on future yields, including climate change factors other thanwater risks.
* Established and calculated two scenarios (2°C and 4°C) based on Representative Concentration Pathway (RCP) 2.6, RCP4.5,
RCP6.0 and RCP8.5 of the Intergovernmental Panel on Climate Change (IPCC)

Impact of Water Risks on Yields of Main Raw Materials
1: Low 2: Somewhat high 3: High 4: Extremely highMain Raw
Materials

Water stress
FutureFuture(2030)(2040)

Present

Dairy
Dairy ingredients(overseas)
Cocoa

1

1

1

Sugarcane(2030)(2050)

1

2

3

1

1

3

3

1

1

2

4

4

2

2

1

3

3

Palm oil

1

1

2

3

3

Eggs

2

2

2

4

4

Timber (paper)

1

1

1

2

3

Water Risks

See page 85 for details on progress

Page 55

54 Our Initiatives to Support Sustainable Value Creation

What are Water Risks?
Stress: Degree of demand for water(supply-demand balance of water resources)
Drought risk: Likelihood and impact of drought
Flood risk: Likelihood of floods

The decline remains within a few percentage points both in 2030 and 2050. It is also addressable byenhancing productivity (e.g., changing feedstuff mixes).

Cocoa

We expect reduced yields overall. However, there will be relatively little impact both in 2030 and 2050
regarding the main areas from which the Meiji Group sources cocoa.

Sugarcane

We expect yields to decrease in the future.

Collaboration with External Initiatives
Main Raw Materials

Page 55

Biodiversity Conservation on Land Ownedby the Meiji Group (Kumamoto Sunlight Forest)
The Meiji Group promotes biodiversity conservation
activities in our own corporate green spaces. For example,
KM Biologics Kikuchi Research Center conducts surveys
and conservation activities for the Meiji Group Nature
Conservation Area Kumamoto Sunlight Forest. In August
2021, it was recognized by Social and Environmental Green
Evaluation System (SEGES) as Excellent Stage 2. We
implement nature observation and conservation activities
for employees, their families and local residents. We
promote understanding of biodiversity and the resolutionof issues in local ecosystems through these activities.

• We expect low water stress and drought risks
in most areas, with some exceptions.
• We expect flood risks to rise in most areas, andthus believe that we need to examine
improvement measures upon confirming theflood risk of each production area.

Dairy

Reducing the Impact of Business Activities on Biodiversity
Page 52

Flood risk
FutureFutureYield Forecasts of Particularly Important Raw Materials

We are working to conserve biodiversity by reducing the impact of our operations on biodiversity and understanding theimpact of benefits from biodiversity. We are also promoting collaboration with external initiatives and other measures.

Reduce CO2 Emissions

Drought risk

30by30 Alliance for Biodiversity

Japan Business Initiative for Biodiversity (JBIB)We are participating in the 30by30 Alliancefor Biodiversity, a coalition aiming toachieve the 30by30* commitment made at
the G7 Summit in 2021.

We are working to solve social issues related to biodiversity
by participating in the JBIB*, an initiative where a variety ofcompanies jointly promote research. We are promoting thisinitiative in cooperation with member companies.

* 30by30 is the goal of conserving at least 30% of theland and sea as healthy ecosystems by 2030.

* Japan Business Initiative for Biodiversity

Keidanren Committee on Nature Conservation

Biodiversity conservation activities
SEGES is a system of the Organization for Landscape and Urban GreenInfrastructure. It objectively evaluates and certifies the value of green
spaces owned and managed by companies, as well as whether theirefforts contribute to society and the environment.

We are a member of the Keidanren Committee on Nature
Conservation*, which was established under the leadershipof the Keidanren. We contribute to the conservation of
biodiversity through the efforts of all Japanese industries.
* The Keidanren Committee on Nature Conservation is an organization that
supports nature conservation activities in developing countries and Japan,
and also promotes corporate conservation activities.

Taskforce on Nature-related Financial Disclosures(TNFD) Forum
We support the vision of the Taskforce on Nature-related
Financial Disclosures (TNFD) and have joined the TNFD
Forum. The TNFD is developing a framework for theappropriate assessment and disclosure of risks andopportunities related to biodiversity.

Meiji Holdings Co., Ltd.｜Integrated Report 2022 55

Coexisting with Nature

Our Initiatives to Support Sustainable Value Creation

Contents

Supply Chain Management

There has been international demand for fair and free competition, fair transactions, and responsible sourcing. In light ofthese circumstances, we at the Meiji Group aim to fulfill our social responsibility not just in our own business, but also
throughout our entire supply chain. To achieve this, we are addressing social issues such as child labor, forced labor, anddeforestation.

Initiatives with Main Business Partners

See page 86 for details on progress

We established the Meiji Group Supplier Code of Conduct in June 2020. We promote sourcing activities that take corporatesocial responsibilities such as human rights and the environment into consideration while being aware of compliance withlaws and regulations, fairness, transparency and anti-corruption. We will further strengthen cooperation and collaboration
with business partners going forward and aim to build a responsible supply chain.

Implementation Status of EcoVadis Evaluation & Meiji-Original Survey
In October 2020, we also launched the Sustainable Sourcing Survey for Meiji Group business partners, utilizing the
EcoVadis evaluation system and Meiji’s own questionnaire. In April 2021, we provided feedback on the survey analysis
results, and we plan to further expand the scope of companies subject to the survey in the future.
This survey helps us understand if there are human rights or environmental issues in the supply chain. If there are any
items requiring remediation, we will engage our business partners in dialogue and work with them to resolve these issues,building a stronger and more responsible supply chain.

FY2020

FY2021

Phase 1:74 1st-tier suppliers foreach operating company

1st-tier
suppliers

Phase 2: 31 1st-tier suppliers

105 total companies

Perform evaluation of companies that accountfor approximately 80% of transaction amounts
Phase 1: 25 Group companies
from each operating company(Domestic: 22 companies,
overseas: 3 companies)Group
companies
Contract
manufacturing/
Suppliers

Phase 1: 46 contract
suppliers of Meiji Co., Ltd.

• Analysis categories: Evaluation based on
environment, human rights and labor,
ethics, and sustainable procurement.
The score for sustainable procurement
is particularly low. It needs to be
improved in the future.
• We will ask business partners withan overall score that is below thedesignated level* to submit
improvement reports and re-evaluate
them after one year to promote
improvement.
* EcoVadis survey: Less than 45 points; Meiji-original
survey: Less than average• For business partners who havedifficulty responding to survey
evaluations (small
companies/organizations with low
number of employees, etc.), we will
promote improvement through direct
engagement.

We have been conducting surveys on CO2 emissions and water risk among 20 main business partners since December
2021 to determine the actual status of the entire supply chain. Business partners were selected from the perspectives oftransaction amount and status of handling important raw materials. We will continue to engage with our main business
partners to resolve social issues.

Business partners selected for survey: 20
Implementation period: December 2021 to January 2022
Survey Overview

Raw milk

Cocoa

Palm oil

56 Our Initiatives to Support Sustainable Value Creation

Sugar

Survey the current status and responses being implemented
for CO2 emissions and water risks throughout the supply
chain of business partners.

See page 86 for details on progress

Raw milk, cocoa, palm oil and other raw materials are important for the Meiji Group’s business. We are making uniqueefforts with regards to these materials to support sustainable production activities while coexisting with nature.

Raw milk

Meiji Dairy Advisory (MDA) activities to provide management-related support to dairy farmers

Conducted

475 times in a year (FY2021) * Target: 400 times/year

Initiatives for Stable Sourcing of Raw Milk
We are developing Meiji Dairy Advisory (MDA), unique activities to support
sustainable dairy farming management, in order to strengthen partnerships withdairy farmers. We held the first MDA Meeting online in February 2022 to shareissues and solutions with dairy farmers nationwide. Through MDA, we willcontribute to dairy farming management and the sustainable production of raw
milk that both farm managers and staff find rewarding. We also consider the
reduction of greenhouse gas emissions in the dairy industry as a major social
issue. We will continue to research low-carbon dairy farming and carbon credits.
We are aiming to realize sourcing activities that take corporate social
responsibility into consideration. In addition, we are promoting efforts to ensurestable sourcing of dairy ingredients other than raw milk that are procured
overseas by diversifying our suppliers.

Cocoa

Workshop at a farm
(Kusunoki Dairy Production Cooperative)

Sustainable cocoa beans

42 % sourcing rate (FY2021)

Achieving Sustainable Cocoa Bean Production
We participate in the Cocoa & Forests Initiative, a global partnership, and workwith the government of Ghana and related organizations to aid forest
conservation in order to reduce deforestation caused by cocoa production. We
began a pilot project for agroforestry farming, a form of agriculture that creates
forests, with cocoa farmers in Ghana in 2021. In October 2021, we became the firstJapanese company to partner with the International Cocoa Initiative. It isa non-profit organization that promotes activities to eliminate child labor incocoa-producing regions. Furthermore, in November 2021 we invested in
California Cultured Inc., a U.S. cocoa cell culture startup. We are promoting
activities to realize sustainable raw material sourcing.

Palm oil

Implementing Surveys for Main Business Partners

Targeted Raw Materials (Example)

Main Raw Material Initiatives

RSPO-Certified Palm Oil

84 % replacement rate (FY2021)

Promoting the Use of RSPO-Certified Palm Oil
We are replacing palm oil with Roundtable on Sustainable Palm Oil(RSPO)-certified palm oil to achieve sustainable palm oil sourcing. Our goal isreplacing 100% of palm oil with RSPO-certified palm oil by FY2023. Twenty-one
plants in Japan and overseas obtained RSPO supply chain certification by March
2022, and three more overseas plants* are scheduled to obtain certification in
FY2022. We are also in the process of confirming traceability to palm oil
production areas. A list of oil mills is posted on our website.
Sustainable Sourcing | Sourcing of Palm Oil

Agroforestry and Cocoa Pilot Plantation
Sustainable Sourcing |Sourcing of Cocoa

Sourcing Ratio of
RSPO-Certified Palm Oil (%)
Certified oil

Uncertified oil[Result] [Result] [Result] [Expected] [Target]

68

84

88

100

21
FY2019FY2020

FY2021

FY2022

FY2023• 21 certified plants (as of March 31, 2022)• 3 more plants* planned to obtaincertification in FY2022* Meiji Seika (Singapore) Pte. Ltd.
PT MEIJI FOOD INDONESIA
Meiji Seika Food Industry (Shanghai)

Meiji Holdings Co., Ltd.｜Integrated Report 2022 57

Our Initiatives to Support Sustainable Value Creation

TCFD Initiatives
The Integrated Report 2022 references the disclosure items recommended by the Task Force on Climate-related Financial
Disclosures (TCFD). Details of our TCFD initiatives are available on our website. This section provides an overview of ourinitiatives in FY2021 and relevant sections of this report.

Contents

Respect and Promote Human Rights

The Meiji Group’s TCFD Initiatives (PDF)

Governance (G)Disclose the organization’s governance around climate-related risks and opportunities.

a. The board’s oversight of climate-related risks and opportunities

b. Management’s role in assessing and managing
climate-related risks and opportunities

Important sustainability activities of the Meiji Group as a whole are discussed by the Executive Committee, supervised by the Board of Directors,
and then reflected in management. We also established a Chief Sustainability Officer (CSO) position as the senior manager responsible forsustainability to further strengthen Group-wide sustainability activities. The Group TCFD Committee (which met seven times in FY2021) analyzes
climate change-related risks and opportunities, as well as responses to them. The results are discussed by the Executive Committee and reported
to the Board of Directors, which is responsible for supervision. With our Risk Management Department participating in the Group TCFD Meeting,
we have also established a system to identify and respond to climate change impacts as serious risks to the entire Group.
Page 69 Corporate Governance > Features of the Meiji Group Corporate Governance (Chief Officer Management System)
Page 74 Corporate Governance > Remuneration for Directors (and Other Officers)

Relevant sections of
the Integrated Report

Strategy (S)(Overview of Director Remuneration System)

Disclose the actual and potential impacts of climate-related risks and opportunities
on the organization’s businesses, strategy, and financial planning where such information is material.

a. Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term.
b. Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning.
c. Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios,
including a 2 °C or lower scenario.
The Meiji Group began its TCFD initiatives in FY2019. The following initiatives were undertaken in FY2021 based on the results of past analyses.
• Analyzed the entire supplier chain and calculated the financial impact on the Meiji Group• Established three scenarios (1.5°C, 2°C, and 4°C). Currently examining countermeasures for and analyzing medium- to long-term climatechange-related risks and opportunities, setting 2030 and 2050 as base years• Enhanced our analysis of the impact that climate change has on raw materials (expanded the scope of raw materials and added water risk effect analysis)• Further examined climate change-related opportunities• Enhanced measures to achieve carbon neutrality by 2050 (introduction of internal carbon pricing, establishment of a roadmap, etc.)
Page 11 History of Value Creation and Market Presence > New Initiatives in Progress (Open Innovation, Vaccine R&D)
Pages 51−57 Coexisting with Nature

Relevant sections of
the Integrated Report> Climate Change Initiatives(Effect of Future Carbon Pricing, Carbon Neutrality Roadmap, Reducing CO2 Emissions, Secure Water Resources)> Biodiversity Initiatives (Benefits from Biodiversity > Impact of Water Risks on Main Raw Materials and Yield Forecasts)> Supply Chain Management (Initiatives with Main Business Partners >Implementing Surveys for Main Business Partners, Main Raw Material Initiatives)

Risk Management (R)Disclose how the organization identifies, assesses, and manages climate-related risks.

a. Describe the organization’s processes for identifying and assessing climate-related risks
b. Describe the organization’s processes for managing climate-related risks
c. Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s
overall risk management.
We are promoting group-wide risk management to ensure that it can accurately respond to risks that could severely impact our businessactivities. We have treated climate change as a priority risk for management and reviewed it at Group TCFD Meeting. We then discuss theexamined results in the Executive Committee, report them to the Board of Directors, which performs supervision.
Our Risk Management Department participates in the Group TCFD Meeting and integrates with the Group’s overall risk management.
Relevant sections of
the Integrated Report

Pages 78−79 Risk Management (Fundamental Ideas, Risk Management System, Sustainability-Related Risks)

Metrics and targets (M)Disclose the metrics and targets used to assess and manage relevant climate-related risks
and opportunities, where such information is material.

a. Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy
and risk management process
b. Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks.
c. Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets.
The Meiji Group established materiality and KPIs by formulating the Meiji Group Sustainability 2026 Vision and our long-term environmental vision,
the Meiji Green Engagement for 2050. Given that responses for climate change-related risks and opportunities (e.g., activities to reduce environmental
impacts and raw material sourcing) entail diverse action, we have established the KPIs and manage their progress accordingly.
Relevant sections of
the Integrated Report

Pages 84−86 Non-Financial Performance (Climate Change, Circular Economy, Water, Sustainable Sourcing)

58 Our Initiatives to Support Sustainable Value Creation

Based on the United Nations Guiding Principles on Business and Human Rights, the Meiji Group cares strongly about thehuman rights of all stakeholders when managing its business. It is our fundamental duty to ensure human rights arerespected, and we view respecting human rights as part of our materiality in social issues.

The Meiji Group’s Approaches to Human Rights
The Meiji Group has declared respect for human rights in our Corporate Behavior Charter. We engage in corporate
activities based on the strong belief that all people are inherently free and deserve equal respect and rights. Our Group
Human Rights Meeting is currently promoting human rights due diligence and working to reduce risks for high-priority
human rights issues. We discuss these activities at the Group Sustainability Committee and also report them to the
Executive Committee and Board of Directors as necessary. In this way, we ensure that these activities are linked tobusiness management.

Past Activities
Revised the Corporate
Behavior Charter(added an item related
to human rights)

2016
Establishedthe Meiji Group Policyon Human Rights

Formulated the Meiji Group
Sustainability 2026 Vision

2018• Revised the Meiji Group Policy on Human Rights• Formulated the Meiji Group Supplier Code of Conduct• Implemented sustainable sourcing surveys for major suppliers• Publicized UK Modern Slavery Act Statement

2019• Signed the UN Global Compact• Established the Group
Human Rights Meeting andbegan human rights due diligence

2020

2021

• Expanded the scope ofPage 56
sustainable sourcing surveys• Ascertained the current status of foreign workers
and considered formulating the Meiji Group
Foreign Worker Employment Guidelines• Provided e-learning on human rights
Expanded education to overseas Group companies

Initiatives for Foreign Workers
Understanding Foreign Workers at Directly Owned Plants in JapanIn February 2020, we conducted a survey about foreign workers at domestic directly owned plants and research institutesof Meiji Co., Ltd. and Meiji Seika Pharma Co., Ltd. We confirmed that there were no problems with employment contracts
with directly employed foreign workers and their labor management. In FY2021, we confirmed that appropriate labor
management is implemented at 12 operating sites that accept indirectly employed foreign workers.

Formulation of the Meiji Group Foreign Worker Employment Guidelines
In FY2022, we formulated the Meiji Group Foreign Worker Employment Guidelines to provide an even more comfortableworking environment for foreign workers. We compiled these guidelines with reference to the results of the survey on theemployment conditions of foreign workers conducted in FY2019 and beyond, and we will promote the guidelines going
forward.

E-learning on Human Rights
We provide e-learning on business and human rights that is designed
in part to disseminate the Meiji Group Policy on Human Rights. The
participants in FY2021 included approximately 13,000 employees at
Group companies in Japan (participation rate of 90%) and about 770
employees from three high priority Group companies overseas(participation rate of 99%). We will continue to focus on human rights
education and strive to increase the human rights awareness of the
Meiji Group employees.

See page 86 for details on progress

We provide
opportunities for
employees to learn
about human rightsfrom many different
perspectives. The
document on the left
is part of the materials
we have created.

Meiji Holdings Co., Ltd.｜Integrated Report 2022 59

Corporate GovernanceContents

Directors and Audit & Supervisory Board Members (As of Jun 29, 2022)

8

10
4

Chief Executive Officer*1
President and Representative Director(Corporate Development Dept.,
Group HR Strategy Dept. and
Co-Creation Center)
Significant Concurrent Positions
Member of the Board, Meiji
Member of the Board, Meiji Seika Pharma
President, Japan Dairy Association (J-Milk)
Chairperson, Japan Food Industry
Association (JFIA)

4 Koichiro Shiozaki

2 Daikichiro Kobayashi

3 Katsunari Matsuda

Chief Operating Officer*2(Pharmaceutical Segment)
Member of the Board andExecutive Officer

Chief Operating Officer*2(Food Segment)
Member of the Board andExecutive Officer

Significant Concurrent Positions

Significant Concurrent Positions

President and Representative Director,
Meiji Seika Pharma
Chairman and Representative Director,
KM Biologics

President and Representative Director,
Meiji
President and Representative Director,
Japan Dairy Trade Co., Ltd.
Chairman, Chocolate andCocoa Association of Japan
Chairperson, Japan Ice Cream Association

5 Jun Furuta

6 Mariko Matsumura

Chief Financial Officer
Member of the Board andSenior Managing Executive Officer(Corporate Administration Dept. andRisk Management Dept.)

Chief Sustainability Officer
Member of the Board andSenior Managing Executive Officer(Corporate Communication Dept. and
Sustainable Management Dept.)

Significant Concurrent Positions

Significant Concurrent Positions

Member of the Board, Meiji Seika Pharma
Member of the Board, KM Biologics

Member of the Board, Meiji*3*4*1 Oversees management of entire Group*2 Oversees business operations for Food segment and Pharmaceutical segment*3 Oversees Group financial strategy and operational management*4 Oversees Group sustainability strategy and sustainability activities

60 Corporate Governance

12

13

9
2

1

3

1 Kazuo Kawamura

7

7 Masaya Kawata

5

8 Michiko Kuboyama

116

9 Peter David Pedersen

Member of the Board (Outside)
Independent Director

Member of the Board (Outside)
Independent Director

Member of the Board (Outside)
Independent Director

Significant Concurrent Positions

Significant Concurrent Positions

Significant Concurrent Positions

Chairman and Director,
Nisshinbo Holdings Inc.
Outside Director, Central Glass Co., Ltd.

External Director, Kids Smile Holdings Inc.
Outside Director,
Sumitomo Mitsui Banking Corporation

Representative Director, NPO NELIS
External Director,
MARUI GROUP CO., LTD.

10 Hiroaki Chida

Member of the Board (Outside)
Independent Director

Audit & Supervisory Board Member

Significant Concurrent Positions

Corporate Auditor, KM Biologics

Significant Concurrent Positions

Attorney at Law/Shinwa Sogo Law Offices
Outside Statutory Auditor,
Fund Creation Group Co., Ltd.

11 Takayoshi Ohno
Audit & Supervisory Board Member

12 Hajime Watanabe

13 Makoto Ando

Audit & Supervisory Board Member(Outside)
Independent Director

Audit & Supervisory Board Member(Outside)
Independent Director

Significant Concurrent Positions

Significant Concurrent Positions

Attorney at Law/WATANABE & SHIMIZU
Member of the Board (Outside),
Hitachi Transport System, Ltd.

Certified Public Accountant/Ando Certified Public Accountant
Joint Office
Unaffiliated Auditor,
Nippon Concrete Industries Co., Ltd.
External Director, INV Inc.

Meiji Holdings Co., Ltd.｜Integrated Report 2022 61

Corporate GovernanceContents

Responsibilities of Members of the Board and Audit & Supervisory Board Members(As of Jun 29, 2022)

Members of the Board
Attendance at meetings (FY2021)

Number of years
Number ofas Member of the Company’s
the Boardshares held

Name

Positions and areas of
responsibility in the Company

Kazuo KawamuraCEO
President and Representative Director

19/19

10 years

43,816
sharesDaikichiro Kobayashi

COO (Pharmaceutical Segment)
Member of the Board andExecutive Officer

19/19

8 years

15,143
shares

Katsunari Matsuda

COO (Food Segment)
Member of the Board andExecutive Officer

19/19

4 years

13,737
sharesKoichiro Shiozaki

CFO
Member of the Board andSenior Managing Executive Officer

19/19

7 years

14,679sharesJun Furuta

CSO
Member of the Board andSenior Managing Executive Officer

19/19

8 years

8,070
shares19/19

4 years

560
shares

14/14*2

1 year317
shares

14/14*2

1 year158
sharesMariko Matsumura

Board of Directors

Member of the Board (Outside)
Independent Director

Member of the Board (Outside)

OutsideMasaya Kawata

Independent Director

Career summary/Ex- President andRepresentative Director and Chairman and
Representative Director, Nisshinbo Holdings Inc.

Member of the Board (Outside)

Michiko KuboyamaPeter David Pedersen

Independent Director

Career summary/Ex- Communication Fellow,
Lifestyle Research Department, Kao Corporation

Advisory body members
to the Board of Directors

Main expertise and backgroundManagement
strategies

Globalbusiness

Sales andmarketing

Finance andaccounting

HR anddiversity

Legal affairs andrisk management

Corporate
communication

Sustainability

Compensation
Committee

Chairperson*1

Chairperson*1

Member of the Board (Outside)
Independent Director

Career summary/Representative Director, NPO NELIS

Audit & Supervisory Board Member
Name

Positions and areas of
responsibility in the Company

Hiroaki Chida

Appointed in June 2022

Attendance at meetings (FY2021)—

Number of
Number of years
as Member of the Company’s
shares held
the Board

OutsideBoard ofDirectors

Audit &
Supervisory Board

Audit & Supervisory Board Member

14/14*2

11/11*2

1 year

3,749
sharesTakayoshi Ohno

Audit & Supervisory Board Member

14/14*2

11/11*2

1 year3,212
sharesHajime Watanabe

Audit & Supervisory Board Member(Outside)

19/19

16/17

9 years—

Makoto Ando

Audit & Supervisory Board Member(Outside)

19/19

16/17

5 years

2,821
sharesIndependent Director

Independent Director

Advisory body members
to the Board of Directors

Main expertise and backgroundManagement
strategies

Globalbusiness

Sales andmarketing

Finance andaccounting

HR anddiversity

Legal affairs andrisk management

Corporate
communication

Sustainability*1 Elected each time by mutual vote from amongst committee members who are Independent Outside Directors,
ensuring that no one serves concurrently as the chairperson of both committees.
*2 Attending since appointment on June 29, 2021

62 Corporate GovernanceNomination
Committee

Nomination
Committee

Compensation
Committee

Leadership

Meiji Holdings Co., Ltd.｜Integrated Report 2022 63

Corporate GovernanceContents

Three-way Discussion with Outside Directors andan Outside Audit & Supervisory Board Member

Enhancing Corporate Value - Developing the Potential offunction, needs to strengthen its function. Therefore,
I believe that we should begin by thoroughly discuss theideal structure of the Board of Directors.

Two Outside Directors and an Outside Audit & Supervisory Board Member share their thoughtson the Meiji Group’s present situation and future issues.

- How does the Meiji Group’s
Board of Directors andAudit & Supervisory Board function?

Various Human Capital, Integrating Food and Pharmaceuticals

Masaya Kawata

Independent Outside Director

Michiko Kuboyama

Independent Outside Director- How do you evaluate the Meiji Group’s
corporate governance?
Mr. Watanabe: I have served as an Independent Outside
Audit & Supervisory Board Member since 2013. I believethat the Meiji Group’s corporate governance has evolved
significantly over the past 10 years. When I began myposition, sales were around JPY 1 trillion, the same astoday. However, operating profit has increased fromaround JPY 30 billion to reach JPY 100 billion. I believethat one of the reasons for this increase in profitability isthat Meiji Holdings Co., Ltd. improved its leadership.
Immediately following the management integration in
2009, Meiji Holdings was just managing the operatingcompanies. It had not yet established a suitable system todrive Group management. However, Meiji Holdings
recognized the importance of Group management inrecent years. Accordingly, Meiji Holdings’ leadership andcontrol over the Group have increased dramatically.
Therefore, the improvement of Meiji Holdings’ leadershiphas increased its corporate value.
Mr. Kawata: I became an Independent Outside Director
one year ago, in 2021. I believe that Meiji Holdings is

64 Corporate GovernanceHajime Watanabe

Independent Outside Audit& Supervisory Board Member

making serious efforts and properly controls the entire
Group. However, it seems that the governance-related
activities are a bit on the conservative side. Therefore,
I think future-oriented proactive governance will be
important for further growth.
Mr. Watanabe: I believe that there are three tasks weshould address to strengthen corporate governance. The
first is the Group governance. Over these past 10 years,
business management has shifted from a sales-focused
approach to a profit-focused approach. There is moreemphasis on ROE and ROIC. Meanwhile, group-widemonitoring and supervision, such as risk management, isstill insufficient. Accordingly, we should work tostrengthen these initiatives. The second task isgovernance of overseas business. As we expand ourbusiness in the global market, governance to monitor andsupervise overseas subsidiaries is becoming increasingly
important. I would like to closely monitor this as an Audit& Supervisory Board Member. Finally, the third task isstrengthening the function of the Board of Directors. The
Group has separated business execution and supervisory
functions by introducing an executive officer system. The
Board of Directors, which handles the supervisory

Ms. Kuboyama: It has been a year since I became an
Independent Outside Director. I can tell that the Group isa very diligent. In the Group, it is obvious that topics arethoroughly discussed at preliminary meetings, such as atthe Executive Committee, before being submitted to theBoard of Directors. However, what are explained and thenconfirmed by Outside Directors are general policies. I am
sure that all proposals are thoroughly discussed internallybecause they are deeply related to future strategies. But I
would like the Group to spend more time deepening
substantive discussions with Outside Directors on thecorporate value that these proposals bring.
Mr. Kawata: We have discussed matters that should be
resolved without delay, such as investment decisions.
Now, the Group has established the Meiji ROESG®* asa management indicator, we should spend a lot of time on
ESG-related topics at the Board of Directors. ESG activities
are something that will be promoted over the medium- tolong-term, therefore results may not be visible
immediately. Accordingly, we should consider ESG issues,
including qualitative issues, over the medium- tolong-term in order to incorporate them into financial
information and visualize them. I encourage the Group as
an Independent Outside Director because this is an
important role for the Board of Directors.
Ms. Kuboyama: At Meiji Holdings, we have meetings
among Outside Directors and Auditors. We discuss andthink deeply about what the Group should do to growover the medium- to long-term. I think they are very good
opportunities for us.
Mr. Kawata: I believe that the Group is diligent and to
tackle the current issues. However, taking a long-term
perspective, we need to discuss ESG issues, which lead tosustainable growth. I would also like to discuss flexibly
and freely to clarify what we should do one or three years
from now by taking a backcasting approach.
Mr. Watanabe: I have had no concerns about the auditing

function of the Audit & Supervisory Board since I assumed
my position. The Group’s three-part auditing system,
including internal and accounting audits, is functioning
perfectly. The scope and depth of the roles vary between
full-time Auditors and Outside Auditors. Full-time Auditors
perform their audits in a very broad and in-depth mannerand I respect them very much. The primary duty of Audit& Supervisory Board Members is legality audits. Thus, wemonitor business operations and check them from a legal
perspective. Additionally, our important mission is topoint out the management risks in new projects and othermatters. Audit & Supervisory Board Members do not havethe right to vote at the Board of Directors meetings.
However, if sufficient information is not provided to the
Directors at the Board of Directors meetings, the basis fortheir decision-making will be fallible. Therefore, I always
consider how much information is needed for the
Directors to make sound business decisions on proposals.
I also supplement the information by asking questions torelevant parties. For example, in a complicated alliancecase, it might be difficult to immediately understand thecapital ties and details of the transaction between theparties. I point out and ask for missing information basedon my experience as an attorney when something is
unclear regarding the flow of funds and other factors.
I attend the Board of Directors and Audit & Supervisory
Board meetings with awareness of my role.

- What do you think of the Meiji Group’s
human capital management?
Mr. Watanabe: I think “women” and “English” are the key.
The Group constantly ranks high on the list of companies
where women majoring in science want to work.
However, I rarely see the ideas of these women inscience-related fields being used in proposals submitted
to the Board of Directors meetings. I believe that theGroup would be more active to incorporate the ideas ofyoung people and women into product development andother areas. In addition, English is an essential tool forcompeting in the global market. We should appropriately
manage local organizations to expand overseas business.
The key to managing overseas subsidiaries lies in thebalance between control and the delegation of authority.
Therefore, it is critical to have personnel that canovercome the language barrier to manage the* ROESG is a registered trademark for a management indicator developed byKunio Ito, a professor at Hitotsubashi University.

Meiji Holdings Co., Ltd.｜Integrated Report 2022 65

Corporate GovernanceContents

Three-way Discussion with Outside Directors andan Outside Audit & Supervisory Board Member

organization. I am afraid that the lack of such personnel isan urgent issue for us to successfully expand globally.
Ms. Kuboyama: When it comes to promoting genderequality in the workplace, many believe that we should
provide women with opportunities to learn and groweven when they are less experienced. The Group shouldbe earnest in promoting women. This will advance
Diversity & Inclusion (D&I). Accordingly, we can recognizerisks from diverse perspectives and can also bring out
valuable ideas with a creative perspective. I believe
accelerating D&I will contribute to creating many popular
products and services. Furthermore, when we break awayfrom a homogenous culture, we can create a betterworking environment for employees with diverse
aspirations. This will improve the Group’s overall
performance. I would like the Group to focus onpromoting D&I as much as possible.
Mr. Kawata: Actively recruiting experienced personnel
from outside the Group and assigning them toappropriate positions is effective in promoting D&I.
However, building relationships between newly hired
employees and us will be a new challenge. In addition to
making the most of individual personnel, I’m hoping tosee chemistry and a diversity of ideas arise throughrelationships among personnel. I want young employees,
such as Generation Z and millennials, to collaborate tobreak down barriers among Group companies andbusinesses, and create many new values for wellness
through creative thinking. I want them to enjoy great
achievements and embody the “FUN” that comes fromtaking on such challenges. Discussing dreams and having
fun will motivate value creation.
Ms. Kuboyama: I agree with Mr. Kawata. I think the Groupshould promote personnel exchanges, as well. People
develop great ideas when they flexibly engage with eachother beyond the Food and Pharmaceutical businesses.
I believe rotating personnel among operating companies
will help revitalize the Group. Some people say that suchjob rotation would be difficult due to differences between
business characteristics and expertise, but I believe that it
is worth trying. There should be a way to make it
successful. For example, personnel from Pharmaceuticals
would flourish in Food R&D. Since we have establishedMeiji Holdings, we should maximize our human capital tostrengthen the Group.

66 Corporate Governance- What do you think of development ofmanagers who drive the Meiji Group
forward and succession planning?
Mr. Kawata: The Nomination Committee consists of
Outside Directors and Mr. Kawamura, CEO of Meiji
Holdings. The Committee members share our thoughts on
succession appropriately. From the stage where theCommittee approves the CEO’s opinion, the Committee
needs to evolve to the next stage where Outside Directors
propose competencies for managers who drive the Group
forward, considering domestic and internationalsituations and social trends.
Ms. Kuboyama: The most important point of thesuccession process is how we select the personnel who
will become candidates for management positions. The
Group should give opportunities to promising personnel
at the worksite and evaluate them fairly. Also,transparency, acceptability, and objectivity are importantin the screening and final selection processes. I encourage
the Group to pursue its own unique succession planning.
Mr. Kawata: One of the good opportunities for the
managers who will drive the Group forward is to present
their project at the Board of Directors meetings and othermeeting bodies. Online meetings are very popular thesedays. Therefore, I think it is a good idea for managers,
including women and those at overseas subsidiaries, topresent the projects they are managing. This is a very
good opportunity for managers to be exposed to top-level
management discussions. Although it might be a toughexperience, I am sure it will help develop managers whodrive the Group forward.

- What are the issues for the Meiji Groupto enhance corporate value?
Mr. Watanabe: The Group has introduced the Meiji ROESG
as a management indicator. I believe this is a very
progressive and significant initiative. However, the issue isthat it would be difficult to see the specific achievementsthat the Meiji ROESG will bring to the Group.
Ms. Kuboyama: I believe it is important for the Board of
Directors to spend a lot of time thinking from theperspective of visions and dreams about what kind ofvalue we can contribute to society by pursuing Meiji
ROESG.

Mr. Watanabe: If we can show these dreams to theemployees, as Ms. Kuboyama mentioned, it will be a great
motivation for them to contribute to the Meiji ROESG.
While we are working hard on these valuable initiatives,
I regret to say that our efforts are not yet well known tothe public. I think this is one of the reasons why we do not
get recognized in the capital market properly. I feel that
the Group should improve its presentation skills. The Meiji
ROESG will be an effective driving force to develop theGroup when we can combine it with the dreams of all
employees and promote it more actively and efficiently
within and outside the Group.
Ms. Kuboyama: The Group possesses a wealth oftechnology and holds many seeds for productdevelopment. However, as Mr. Watanabe pointed out, theGroup is not always good at promoting and showing how
good it is to the public. I do believe that what the Group
has and what it is aiming for is excellent. However, it is a
bit frustrating for me that we do not fully demonstrate it.
Mr. Kawata: The Group’s new slogan, Now ideas forwellness, is its unique intention to integrate food andpharmaceuticals. However, working hard withconservative diligence is not sufficient to generateinnovative ideas. I think we should set up comfortablediscussion opportunities for young personnel to shareand discuss their ideas. It is a good idea to provide
opportunities that encourage all employees to participate
in projects on their personal issues. The direction is clearthat the Group will be successful in the food andpharmaceuticals area in the next era. To generate thatenergy, management should be more flexible andambitious in utilizing the younger generation.
Ms. Kuboyama: The Group is committed to pursuingsynergy between food and pharmaceuticals. There may

be some risks that disruptors appear in this field. What if
they mimic products on an OEM basis using only theconcept of health and present them superficially? This
could damage the trust and advantage that the Group has
diligently built up. Therefore, we should not rest on ourlaurels. Recognizing such danger, we should challenge ourcurrent perceptions, and pioneer a new era. Management
should incorporate the perceptions and ideas of young
personnel. We should understand the risks we may faceand develop the area to integrate food andpharmaceuticals.
Mr. Watanabe: As Mr. Kawata and Ms. Kuboyama both
mentioned, we should rely on young human capital torealize Now ideas for wellness. Creative ideas come fromindividuals. However, creative individuals need anorganization that helps them fully demonstrate theirabilities. Such an organization can only be achieved bymanagement leadership. Young and promising employees
are not immersed in a particular business culture. There isa great chance that we can integrate food andpharmaceuticals when we nurture them from an earlystage and help their potential abilities flourish.
Accordingly, it is important for us to reorganize the Group.
However, I believe that this idea has not yet spreadthroughout the Group. Food and pharmaceuticals follow
different laws and regulations, and productcharacteristics are very different. There are a lot ofdifficulties lying ahead for us to overcome. Therefore,
departments such as R&D, legal, and administration
should all collaborate with the operating companies toovercome these difficulties. Additionally, technical andadministrative divisions should come together as one. As
Outside Directors and Auditors, we are ready to encourage
this.

Meiji Holdings Co., Ltd.｜Integrated Report 2022 67

Corporate GovernanceCorporate GovernanceFeatures of the Meiji Group
Corporate Governance

Basic Views
As a corporate group in the Food and Health fields, the MeijiGroup’s goal is to continue finding innovative ways to meet
our customers’ needs, today and tomorrow. In this way, we
aim to achieve sustainable growth and increase corporate
value over the medium- to long-term.
The Group has adopted a holding company system
in which group companies operate businesses under theholding company’s control. The main role of the holding
company, Meiji Holding Co., Ltd., (the Company) is to promote
Group-wide management strategies, create an optimal
operating structure, and oversee the business managementof operating companies. We separate oversight and executionof business management within the Group by appropriately
delegating responsibility for operational execution tooperating companies. In this way, we have established andoperated a corporate governance system including a Board of
Directors.
The Company has adopted the system of a company
with an Audit & Supervisory Board to further enhance theobjectivity and transparency of management through thesupervisory function of the Board of Directors and theauditing function of Audit & Supervisory Board members.
Moreover, to enhance the efficacy and transparency of theBoard of Directors, we have established a system to reflect theopinions of Independent Outside Directors in management.
“Corporate Governance Policy”, which defines the basic
policy regarding corporate governance of the Company, isposted on our website.
Corporate Governance

Board of Directors
Directors: 9(Incl. Outside: 4)

Nomination Committee

Election, Dismissal

Audits Conducted by
Corporate Auditors

Appointment,
Dismissal, Supervision

Compensation Committee
5 Member System
Outside Directors: 4
Internal Director: 1

CEO, President andRepresentative
Director

Election, Dismissal

Audit & Supervisory
Board Members: 4(Incl. Outside: 2)

ReportReportCollaboration

CSO

Collaboration

Audit Dept.
Internal Audit

Group HR
Strategy
Dept.

Risk
Management
Dept.

Corporate
Communication
Dept.

Sustainability
Management
Dept.

CEO (Chief Executive Officer)

Oversees management of the entire GroupCFO

Meiji Co., Ltd.

Meiji Seika
Pharma Co., Ltd.

KM Biologics
Co., Ltd.

President

President

President

Management
and accounting
departments

Management
and accounting
departments

Management
and accounting
departments

Management
and accounting
departments

Sustainability-related
department

Sustainability-related
department

Sustainability-related
department

Sustainability-related
department

2016

2017

COO (Chief Operating Officer)
Oversees the business execution of the Foodor Pharmaceutical segments
CFO (Chief Financial Officer)

Oversees the Group’s financial strategy andbusiness administration

CSO (Chief Sustainability Officer)

Oversees the Group’s sustainability businessstrategy and sustainability activities

Accounting Audit,
Internal Control Audit

PolicyCorporate Governance
Policy (PDF)

Organization Form

Company with an Audit & Supervisory Board

Directors

Term of Directors

1 yearChairperson of the Board

President

Number of Directors (including Outside Directors)

9 (4 Outside Directors, including 2 female Directors)

Number of Board of Directors meetings

19 times (FY2021)

Attendance of Outside Directors at Board of Directors meetings
Number of Audit & Supervisory Board Members(including Outside Audit & Supervisory Board Members)
Attendance of Outside Audit & Supervisory Board Members
at Board of Directors meetings
Principal meetings that Audit & Supervisory Board Members
attendNumber of Audit Committee meetings
Attendance of Outside Audit & Supervisory Board Members
at Audit Committee meetings
Election of Independent Directors

100% (FY2021)
4 (2 Outside Audit & Supervisory Board Members,
including 1 female member)

Accounting Auditor

Ernst & Young ShinNihon LLC

Audit department (internal auditing)

Audit Department

100% (FY2021)
Board of Directors, Executive Committee*, Audit & Supervisory Board,
Audit Department Liaison Meeting, and others
17 times (FY2021)* Attended only by full-time members of Audit & Supervisory Board

Governance Policy

20202018 • Revised Corporate Governance2015 • Meetings of independent Outside Directors

Nomination

2015 • Established rules

and Auditors: 2–3 times/year
2016 • Independent Outside Directors: 3• Tours of operating bases by Outside Directors
and Auditors: 2–3 times/year

Remuneration

Board of Directors
Efficacy Evaluation

2021

2022

of the Nomination
Committee

2015 • Established rules of
the Compensation
Committee

2021 • Revised Corporate Governance Policy
2022 • Revised Corporate
Governance Policy

2020 • Total number of Directors: 8(Percentage of Independent Outside Directors: 37.5%)2022 • Total number of
Directors: 9 (Percentage
of independent Outside
Directors: 44.4%)

2017 • Established Leadership Values, competencies for managers who drive the Group forward
2018 • Established implementation strategy for a succession planning for the Group2019 • Implemented
2021 • Appointed Chairperson of
succession
planning2017 • Introduced Restricted Share
Remuneration Plan

2015 • Efficacy evaluation of the Boardof Directors (questionnaire): Once/year

the Nomination Committee fromamong Outside Directors

2021 • Revised remuneration plans• Revised rules for Director andExecutive Officer remuneration• Appointed Chairperson of
the Compensation Committee fromamong Outside Directors

2019 • Individual meetings between Chairperson of the Boardand outside directors: Once/year

2020 • Individual meetings between Chairperson of the Board,
Outside Directors and Outside Audit & Supervisory
Board Members: Once/year

2021 • Evaluated by a third-party assessment

94% (FY2021)
6 (4 Outside Directors, 2 Outside Audit & Supervisory Board Members)

2015 • Formulated Corporate

Support System
for Directors’
IndependenceContent
Established (revised in June 2022)

2019

Policy(As of June 29, 2022)

Basic views on corporate governance20182018 • KM Biologics Co., Ltd. joined the Group
2020 • Introduced Chief Officer system

Group Management
Structure

Corporate Governance Data

Audit &
Supervisory
Board(Pharmaceutical Segment)

Initiatives to Enhance the Corporate Governance System and Improve its Efficacy

Co-Creation
CenterItems related to corporate governance

COO(Food Segment)

2015

Group Companies

68 Corporate Governance

COO

CEO
and President

Accounting Audit,
Internal Control Accounting Auditor
Audit
Ernst & Young
ShinNihon LLC

Executive Committee

Corporate
Administration
Dept.

Chief Officer Management System

Collaboration

Audit & Supervisory Board

Group Strategy Committee

Corporate
Development
Dept.

The Group’s governance system including the Board of
Directors is developed and operated to achieve the mediumto long-term management strategies formulated based on
the Group’s Philosophy. The Company has also adopted thesystem of a company with an Audit & Supervisory Board
to further enhance the objectivity and transparency ofmanagement through the supervisory function of the Boardof Directors and the auditing function of Audit & Supervisory
Board members. Our Board of Directors is comprised ofdiverse directors. The Board deliberates and decides majorGroup matters, and appropriately monitors to ensure
implementation. To enhance the efficacy and transparency(As of June 29, 2022)

General Meeting of Shareholders
Meiji Holdings
Co., Ltd.

of the Board of Directors, we have established a system toreflect the opinions of Independent Outside Directors inmanagement.
On the other hand, concerning business execution,
the Company has introduced a Chief Officer system tostrengthen group management. Serving in the highest
positions of responsibility within the Group, Chief Officers
supervise and oversee Group business or functions. The
Group Strategy Committee, comprised of Chief Officers,
determines the direction of Group matters to advance Groupwide management strategies. In addition, the Executive
Committee, chaired by the Chief Executive Officer (CEO) and
President, deliberates and decides on key issues related tobusiness execution, and executes business promptly andappropriately.

Meiji Holdings

Corporate Governance System
Election, Dismissal

Contents

organization

Other

2015 • Revised the Corporate Behavior Charter (reconfigured as a stakeholder-specific behavior charter)2016 • Advisory Committee for the 2026 Vision comprised of the Board of Directors: 4 times
2017 • Formulated the Meiji Group 2026 Vision
Meiji Holdings Co., Ltd.｜Integrated Report 2022 69

Corporate GovernanceContents

Corporate Governance

Board policies and procedures in
the appointment/dismissal of
the senior managers and the nominationof candidates for the Board of Directors
and the Audit & Supervisory Board
Nominating Director Candidate■ We select our director candidates at the Board of Directors,
after consulting with the Nomination Committee. Thenthe candidates are appointed at the General Meeting of
Shareholders.
■ We select our director candidates considering diversity suchas nationality, gender, and age. To realize the “Meiji Group
2026 Vision,” we select the candidates with their advanced
knowledge and expertise from the following perspectives:
management strategy, global business, sales andmarketing, finance and accounting, HR and diversity, legal
affairs and risk management, corporate communications,and sustainability.
■ Nominating directors with executive duties
All candidates must have the following qualities:• Extensive experience• Business sense• Specialist expertise• Upstanding character
Also, we nominate persons who can steer the Group towardsustainable growth based on the past achievement.
To implement our corporate philosophy and promote ourcorporate value, we look for the following qualities:• Effective decision-making ability: Transparent boldbusiness decisions swiftly and impartially.
• Group management: Achieve optimal group-wide
management.
■ Nominating Independent Outside Director candidates
We nominate persons with the following qualities:• Ability to analyze the company’s business operations
objectively and from multiple perspectives• Character, insight, and ability to take on the role of an
Independent Outside Director
All such candidates must meet our independence
standards.
■ Decisions on the reappointment of directors are subject tosubstantive deliberations by the Nomination Committee
regarding the person’s efficacy in fulfilling their required
duties on the Board of Directors.
■ The removal of a director shall involve appropriatedeliberations by the Nomination Committee before a final
decision is made by the Board of Directors. The removal of
directors is conducted by provisions stipulated in relevant
laws.

Nominating Audit & Supervisory Board
Member Candidates■ We select our Audit & Supervisory Board member
candidates at the Board of Directors after consulting with
the Nomination Committee with the consent of Audit &Supervisory Board. Audit & Supervisory Board Members areappointed at the General Meeting of Shareholders.
■ Nominating Audit & Supervisory Board member candidates
Audit & Supervisory Board members select candidates at
the Board of Directors after consulting with the Nomination
70 Corporate GovernanceCommittee with the consent of Audit & Supervisory Board.
Audit & Supervisory Board Members are appointed at theGeneral Meeting of Shareholders.
While considering diversity such as their nationality,
gender, or age, we nominate persons with the following
qualities:• Upstanding character• Specialist expertise• Excellent discernment • High moral standards
For our Audit & Supervisory Board members to properly
inspect the Group’s operations of the compliance (withlaws, regulations, and standards etc.) and validity and tobring any issues to our attention from an objective andimpartial perspective. At least one of the candidates musthave solid grounding in finance and accounting. Of these,
outside Audit & Supervisory Board candidates are chosenfrom among persons who fulfill separately stipulated
judgment criteria for independence with vast knowledge
and experience in relevant fields such as accounting or law.
■ In the event of matters requiring the removal of Audit &Supervisory Board members, the Nomination Committee
shall deliberate before a final decision is made by the Boardof Directors. The removal of Audit & Supervisory Board
members is conducted by provisions stipulated in relevant
laws.

Criteria for Independence ofOutside Directors and Auditors
The Meiji Group has established Criteria for Independenceof Outside Directors and outside Audit & Supervisory Board
Members (Criteria for Independence) as follows.
When an Outside Director and an Outside Audit &Supervisory Board Member are independent, such Member
shall not fall under any of the following categories.
1. A person who executes business of the Company or its subsidiary
2. A person who executes business of the Company’s parent
company or a fellow subsidiary
3. A party which has material business transactions with theCompany or a person who executes business transactions of thatparty, or a major business partner of the Company, or a person
who executes business transactions of that business partner
4. A consultant, an accounting expert, or a legal expert who
receives a considerable amount of cash or other assets otherthan remuneration as a Member of the Board or an Audit &Supervisory Board Member from the Company (when a party who
receives such assets is an organization, such as a corporation or
an association, this shall refer to a person who is associated withsuch organization)
5. A person who fell under category 1 above during the ten-year
period prior to assuming the position
6. A person who fell under category 2, 3, or 4 above during the oneyear period prior to assuming the position
7. A relative within the second degree of kinship of a person(excluding a person who does not have an importantmanagement position) who currently falls or fell under category 1,
2, 3, or 4 above during the one-year period prior to assuming theposition(Notes)1. “A party which has material business transactions with the Company” is one thatreceived payment from the Company during the latest fiscal year equivalent to 2%
or more of the party’s annual consolidated net sales or 100 million yen, whicheveris greater.
2. “A major business partner of the Company” is one that made payment to theCompany during the latest fiscal year equivalent to 2% or more of the Company’s
annual consolidated net sales.
3. “A consultant, an accounting expert, or a legal expert who receives a considerable
amount of cash or other assets other than remuneration as a Member of the Boardor an Audit & Supervisory Board Member from the Company” is the one who
received cash or assets from the Company during the latest fiscal year other than
remuneration as a Member of the Board or an Audit & Supervisory Board Member,equivalent to 2% or more of his/her consolidated net sales or 10 million yen,whichever is greater.

Reasons for Nomination of
Outside Directors and Auditors
Outside Director
Mariko Matsumura
We propose Mariko Matsumura as an Outside Director because her
extensive career as a lawyer will enable her to offer professional andinsightful advice on company management and to effectively oversee
execution of duties, thereby greatly contributing to enhancing ourgovernance.
While she has never engaged in company management otherthan as an Outside Director or outside Audit & Supervisory Board
member, we nonetheless believe she is qualified for the post becauseof the above reason.

Masaya Kawata
Masaya Kawata served as Representative Director and President
Nisshinbo Holdings in 2013, Director and Chairman in 2019, Chairman
and Director in 2022, and is involved in Group management andglobal business management. We propose Masaya Kawata as an
Outside Director because his extensive experience, track record, andvast knowledge related to business management will enable him toprovide valuable advice and ensure the appropriate monitoring ofbusiness execution for our Group, thereby greatly contributing to theenhancement of our governance.

Michiko Kuboyama
Michiko Kuboyama has vast experience related to productdevelopment and marketing through her roles at Kao having worked
in the Products Public Relations Center before serving as Center
manager and as a communications fellow in the Lifestyle Research
Department. We propose Michiko Kuboyama as an Outside Director
because she will be able to provide valuable advice and ensure
the appropriate monitoring of business execution for our Group
from the perspective of the consumer and a diverse range of otherperspectives, thereby greatly contributing to the enhancement of ourgovernance. While she has never engaged in company management
other than as an Outside Director or outside Audit & Supervisory
Board member, we nonetheless believe she is qualified for the post
because of the above reason.

Peter David PedersenPeter David Pedersen has provided advice on sustainability
management to the Company as an outside expert on the Company’s
ESG Advisory Board. He has abundant experience at environmental
and CSR consulting firms along with deep insights in sustainability
management at the global level and training of next-generation
leaders. We propose his election as an Outside Director, expectingthat he will provide helpful advice on the Group’s management andappropriately supervising the execution of its business operations
based on the above experience and insights, thereby greatly
contributing to strengthening our corporate governance.

Outside Audit & Supervisory Board Members
Hajime Watanabe
Hajime Watanabe has a prolific career as an attorney at law and has
deep expertise in international business transactional law areas. Dueto the reasons above, we propose his election as an Outside Audit& Supervisory Board Member. While he has not been involved incorporate management in the past, except as an Outside Director oran Outside Audit & Supervisory Board Member, we have concluded
that he will be able to perform his duties appropriately as an Outside
Audit & Supervisory Board Member for the reasons mentioned above.

Makoto Ando
Makoto Ando has built a prolific career and gained deep expertise inboth the private sector, working in major audit firms and accounting
firms in Japan and overseas as a certified public accountant, andthe public sector. Thus, we propose her election as an Outside Audit& Supervisory Board Member. While she has not been involved incorporate management in the past, except as an Outside Director
or an Outside Audit & Supervisory Board Member, we haveconcluded that she will be able to perform her duties appropriately
as an Outside Audit & Supervisory Board Member for the reasonsmentioned above.

Succession Planning for the CEO and Other Top Executives
Our Board of Directors decides on the succession planning for
our Group CEO based on consultation with the Nomination
Committee. The Board of Directors outlines implementation
strategy for a succession planning based on the parameters(see page 44 for leadership values) required of executives.
Based on development policies, the members of
the Nomination Committee discuss the nomination anddismissal of the current president, as well as the nominationof candidates for the position of president, for Meiji Holdings
Co., Ltd. and major operating companies. The progress of
succession planning is also regularly reported and discussed
at the Board of Directors.
The development policies were discussed and decided
at the Board of Directors in March 2019 after being discussed
at the Nomination Committee. The policies stipulate that thenomination and development of candidates for the positionof president for Meiji Holdings Co., Ltd. and the Group’s major
operating companies are to be discussed by the Nomination
Committee.
In FY2021, which is the third year of operation of our
succession planning, three matters were discussed at theNomination Committee in January 2022: 1) the nominationand dismissal of the current president, 2) the nomination of
successor candidates for the president, and 3) the nominationof management personnel pool.
The progress of succession planning in FY2021 wasreported and deliberated at the Board of Directors meetingin April 2022. Subsequently, there was deliberation and final
decision on the nomination of executive candidates by the
Board of Directors.

Meiji Holdings Co., Ltd.｜Integrated Report 2022 71

Corporate GovernanceContents

Corporate Governance

Efficacy of the Board of Directors

1Plans to Improve the Efficacy of
the Board of Directors

We have conducted the third-party assessments to analyze/
evaluate the efficacy of the Board of Directors in FY2021 inline with our own corporate governance policy, established in
October 2015.
All Directors and Audit & Supervisory Board members
answered the questionnaires the third-party assessment
organization prepared. The organization then conductedindividual interviews based on the survey results.

The Board of Directors generally meets once a month.
Meeting materials are distributed in advance to facilitate
substantive and lively discussions. The board’s secretariat
briefs major topics to Independent Outside Directors, if
necessary, to clarify points of meetings.
Moreover, to improve the efficacy of the Board of
Directors, Independent Outside Directors and outside Audit& Supervisory Board members hold regular meetings. In
the meetings, they exchange objective ideas and share
information. They also better understand segment-specificbusiness. Outside Directors and Auditors tour major facilities
a few times a year.

Items in the Efficacy Evaluation Survey
The questionnaire includes the following items.
• Roles and functions of the board meeting(Setting strategic direction, overseeing company,
succession planning, discussing/reporting on
business matters)• Size and composition of the Board of Directors• Operating status of the Board of Directors• Management issues and risks• Responses to issues from the previous evaluation• Composition, role, and operating status of theNomination Committee• Composition, role, and operating status of theCompensation Committee• Support system for Outside Directors• Role of Audit & Supervisory Board members• Relation with investors and shareholders• General efficacy of the governance system and theBoard of Directors• Self-evaluations of Directors and Audit & Supervisory
Board members

Meetings of Outside Directors and Auditors
Outside Directors and Auditors met two times during
FY2021. Some topics for the meetings were as follows:• Growth strategy for overseas business of the Foodsegment• Trends in the pharmaceutical industry, andthe business environment and strategy of
the Pharmaceutical segment

Facility Tours by Outside Directors
and Auditors
Considering the COVID-19 pandemic, we conducted
online facility tours twice in FY2021.
• Moriya Plant and Sakado Plant, Meiji Co., Ltd.

Evaluation of the Board of Directors
The members of the Board of Directors answer a selfassessment questionnaire once a year regarding the roleand management of the Board of Directors and issues thatthe Board faces. Based on the survey results, we analyze andevaluate the efficacy of the Board as a whole and address
the identified issues. To verify the efficacy of the Board in aneutral and objective manner, we also conduct evaluation bya third-party assessment organization approximately once
every three years. We will strive to improve its efficacy.
We conduct individual meetings between the Chairpersonof the Board, Independent Outside Directors and Outside
Audit & Supervisory Board Members. Using a self-assessment
survey, they discuss how to improve the Board of Directors aswell as issues and measures for further improving efficacy.

72 Corporate Governance

Method for analyzing/evaluating the efficacyof the Board in FY2021

The questionnaire was created following meetings
between the third-party assessment organization and thesecretariat of the Board of Directors.
The third-party assessment organization organized
opinions gathered via surveys and interviews into an
anonymous format. The results of evaluations conductedbased on those responses were submitted to the Board of
Directors as the primary evaluation results. The Board of
Directors then evaluated and deliberated on those findings,
and summarized evaluation results.

2

Results of analyzing/evaluating the efficacy of
the Board in FY2021

According to the evaluation by the third-party assessment
organization, individual meetings between the Chairpersonof the Board and Independent Outside Directors, and board
meeting records, the Board is considered to be operating
effectively.

Based on the results of the evaluation by the thirdparty assessment organization, we confirmed the following
regarding our initiatives to address issues indicated during
the previous evaluation.
• The Board of Directors is extensively discussing theCompany’s response to revisions to the Corporate
Governance Code.
• Regarding strengthening monitoring to improve the efficacyof the Board of Directors, there is room for improvement incertain areas.
In individual interviews with the Chairperson of theBoard, opinions were exchanged from the following
perspectives to improve the efficacy of the Board of Directors.
• Initiatives to stimulate Board deliberations• Respecting diversity and developing human resources• Dialogue with investors and shareholders

3

Initiatives for FY2022

In FY2022, we will work further to improve the following
issues we recognized to enhance the efficacy of the Board of
Directors and strengthen corporate governance.
• Strengthening monitoring of the specific results andprogress status for core issues of the Medium-Term BusinessPlan• Deepening the discussion on medium- and long-term issues
at the Board of Directors in the process of drafting the next
Medium-Term Business Plan
• Selecting agenda items for the Board of Directors that
promote focused deliberations and improving Board
management

FY2019 Issues

FY2020 Issues

FY2021 Issues• Appropriate implementationof the Meiji Group succession
planning• Improving the quality ofmeeting materials andpresentations• Reporting on business
operations ina strategy-focused manner• Enhancing theimplementation of the MeijiGroup succession planning• Further improving thequality of meeting materials
and presentations• Enhancing the reporting ofbusiness operations andclarifying issues inunachieved targets• Strengthening monitoring• Stimulating Board
deliberations that take into
account revisions to the
Corporate Governance CodeRemuneration for Directors(and Other Officers)
The Company calculates the amount of remuneration for
directors based on corporate and individual performance
while referring to the levels of other companies shownin external research. The amount will be within the limit
resolved by the General Meeting of Shareholders.

Director Remuneration(Excluding Outside Directors)
The remuneration of directors (excluding Outside Directors)
is comprised of the following three components.
1. Basic remuneration, which is fixed according to theposition and duties
2. Performance-linked Remuneration as a short-term
incentive based on corporate and individual performancefor the previous fiscal year
3. Share remuneration as a medium- to long-term incentive
linked to the Meiji Group’s share price trend

FY2022 Issues• Strengthening monitoring• Expanding deliberations on
medium- and long-term
issues• Selecting agenda items andimproving Board
management

Outside Director and
Audit & Supervisory Board Member
Remuneration
Only basic remuneration is paid to Outside Directors andAudit & Supervisory Board members from the perspective of
their roles and independency.

Remuneration Governance

The Board of Directors determines the details of thedirector remuneration system, corporate and individual
performance evaluation results, and the amounts ofcalculated remuneration, after securing the opinion of theCompensation Committee, more than half of whose members
are Independent Outside Directors.
The amount of remuneration for Audit & Supervisory
Board members is determined through consultation withthe members concerned. The amount will be within the limit
resolved by the General Meeting of Shareholders.

Basic remuneration and performance-linked
remuneration is paid in cash, while share remuneration isprovided by allotting shares with transfer restrictions. The
Company has set the ratio of fixed remuneration (basic
remuneration) to variable remuneration (performance-linked
remuneration and share remuneration) at approximately 6:4.
Specifically, the Company applies a higher rate of variable
remuneration as the rank and position of the executive
increases.

Meiji Holdings Co., Ltd.｜Integrated Report 2022 73

Corporate GovernanceCorporate Governance

Short-Term Performance-Linked Remuneration (*1)

Overview of Director Remuneration System
Remuneration Composition Ratio

Basic Remuneration

To provide incentives for improved corporate performanceand promote the sharing of interests with shareholders andother stakeholders, the Company has set the ratio of fixed
remuneration (basic remuneration) to variable remuneration(performance-linked remuneration and share remuneration)
at approximately 50-45:50-55. Also, as for variable
remuneration, the Company has set the ratio of performancelinked remuneration to share remuneration at 60:40.

Basic remuneration is paid to directors as fixed remuneration.
The amount is determined according to the position andduties in reference to data from external research companies.
The data includes basic remuneration levels at major
Japanese companies and major manufacturers that are
similar to the Company in terms of size, and business scopeand conditions.

Directors (excluding Outside Directors) are paid shortterm performance-linked remuneration in the form of
remuneration that is linked to the level of target achievement
for consolidated operating profit and ROIC. The payment
amount is calculated by multiplying the coefficientcorresponding to the achievement rate for the fiscal year as
shown in the chart below.
Coefficient for Consolidated Operating Profit/ROIC
Coefficient (%)

Contents

Medium- and Long-Term Performance-Linked
Remuneration (*2)
Directors (excluding Outside Directors) are paid remuneration
linked to achievement rates for medium- and long-termtargets of consolidated operating profit. These targets are set
separately from individual fiscal year targets.
The payment amount is calculated by multiplying
the coefficient corresponding to the achievement rate formedium- and long-term targets. This coefficient varies
between 0% and 200%.

Remuneration Based on Individual Performance
Indicators (*3)

200

The CEO comprehensively evaluates individual performancebased on a seven-tier scale and calculates payment amounts
by multiplying the Target Base Amount by a coefficient that
ranges from 0% to 200%.

100

Performance-Linked Remuneration

50

100

150

Target achievement rate (%)

Objectives
To ensure a commitment to the Meiji Group 2026 Vision and key indicators outlined in our Medium-Term Business Plan, and toincrease motivation towards improving performance.

Composition of Remuneration• For the CEO, President and Representative Director, and COOs, Members of the Board of the Company:
Performance-linked remuneration is based only on evaluations of corporate performance. Performance-linked remuneration iscomprised of short-term performance-linked remuneration and medium- and long-term performance-linked remuneration.
For executive officers excluding CEO and COOs:
In addition to corporate performance, individual performance is also included in the evaluation items for performance-linked
remuneration.
• Individual performance is also added to the evaluation items for executive officers excluding the CEO, President andRepresentative Director, as well as COOs and Members of the Board of the Company.

Performance-linked
remuneration

50〜55％

Variable remuneration

Share
remuneration

KPI

The Meiji
ROESG
calculation
methodDetails

The Meiji
ROESG
PointsPerformanceindicator

As a medium- to long-term incentive that is linked totrends in our stock, we issue transfer restricted shares thatcannot be disposed of for the three-year period following
allocation (issued once per year after the General Meetingof Shareholders). The amount of monetary remuneration
claims to be granted by the Company in order to allot transfer

We set the Meiji ROESG as a performance indicator. The
payment amount is calculated by multiplying the Target
Base Amount by a coefficient indicated on page 74. The Meiji
ROESG is calculated based on ROE figures and the results of
ESG initiatives.
* ROESG is a registered trademark for a management indicator developed byKunio Ito, a professor at Hitotsubashi University.

Based onachievement rate
for KPI set
by external
evaluation body

Disclosure of Director Remuneration (FY2021)

Average ROE
for past 3 years• 3 KPI for social
evaluation• 3 KPI for
the Meiji Groupevaluation

We disclose the total amount of remuneration by officer category and by remuneration type, and number of eligible officers. For
directors with a total remuneration of JPY 100 million or higher, we also disclose their individual amount of remuneration.
The remuneration amounts for each officer category as of FY2021, are as follows. The directors’ remuneration for FY2021 is
calculated based on the former directors’ remuneration system*.

Target FY2023: 11%
or higher

5 KPIs: 1.2
4 KPIs: 1.0
3 KPIs or less: 0.8

1pt added foreach KPI achieved(Max 6pts)

ROESG
Points

9 or
lower

10

11

12

13

14

15

16

17 or
higherCoefficient

50%

62.5%

75%

87.5%

100%

112.5%

125%

137.5%

150%

Type and weight

Evaluation method

Basic remuneration

50〜45％

Fixed remuneration

Short-term
performance-linked
remuneration (50%)

Fiscal year target
achievement rate

Please see “Policy on Determining Remuneration Amounts and Calculation Methods”
on page 27 of the “Corporate Governance Report” (PDF).

Medium- and *2
long-term
performance-linked
remuneration (50%)

Medium- andlong-term target
achievement rate

Monetary remuneration
Officer category

Totalamount of
remuneration

Indicator and weight
Consolidated
operating profit(25%)

ROIC (25%)

Determined according to the position and duties*

See page 20 for external evaluation and indicators unique to Meiji

Individual performance *3

74 Corporate Governance

Overview

Payment Amount Calculation Method

ESG *(unique to Meiji)*1

Corporate
performance

To provide incentives to improve the corporate value ofthe Meiji Group and promote the sharing of interests withshareholders and other stakeholders.

restricted shares fluctuates every year according to theresults of the Meiji ROESG®* in the previous fiscal year.

ESG *(external evaluation)*

Reflected in
share
remuneration

Objectives

ROE

Results FY2019-2021
3yr avg: 12.3%(Groupstandard)

Share Remuneration

Consolidated
operating profit(50%)

Basic remuneration
Total
amountShare remuneration

Performance-linked
remuneration

Number of
eligible
officers

Number of
eligible
officers

TotalamountNumber of
eligible
officers

TotalamountDirectors excluding
Outside Directors

JPY 258 million

JPY 125 million

5

JPY 99 million3

JPY 33 million

3

Audit & Supervisory Board
Members excluding outside Audit& Supervisory Board Members

JPY 61 million

JPY 61 million

4

―

―

―

―

Outside Directors

JPY 45 million

JPY 45 million

5

―

―

―

―

Outside Audit & Supervisory
Board Members

JPY 28 million

JPY 28 million

2

―

―

―

―

Total

JPY 394 million

JPY 261 million

16

JPY 99 million3

JPY 33 million

3(Notes) 1. The number of eligible officers includes two Directors and two Audit & Supervisory Board members who left their posts as of June 29, 2021.
2. As per the resolution of the 1st Ordinary General Meeting of Shareholders held on June 29, 2010, the amount of remuneration for directors is capped at JPY
1 billion per year (not including the employee portion of remuneration for directors who concurrently serve as employees).
3. As per the resolution of the 1st Ordinary General Meeting of Shareholders held on June 29, 2010, the amount of remuneration for Audit & Supervisory
Board members is capped at JPY 300 million per year.
4 The Company introduced a transfer restricted share remuneration system for directors other than Outside Directors. As per the resolution of the 8th
Ordinary General Meeting of Shareholders held on June 29, 2017, the amount of remuneration under this plan is capped at JPY 200 million per year.
5. The amount for share remuneration indicates the amount appropriated during the current fiscal year (recorded in expenses).

Meiji Holdings Co., Ltd.｜Integrated Report 2022 75

Corporate GovernanceContents

Corporate Governance

Ensure Diversity including Promoting
Women’s Workplace Advancement
The Meiji Group will work to improve our sustainablecorporate competitiveness by creating a diversity & inclusion
promotion structure and implementing various measures.
To ensure the efficacy of this structure, we will set numericalbenchmarks for core personnel hiring and other targets, hire
and train diverse personnel, and ensure the establishment ofdiverse work environments.

Structure for Promoting the Meiji Group
Human Capital Strategy
In April 2022, we established the Meiji Group Human CapitalCommittee, which is chaired by CEO. We will maximize humancapital, a critical management resource, for the entire Groupand to promote human resource strategies aligned with ourmanagement strategy. We uphold the following human resource
themes to accelerate initiatives towards not only optimizing
business but also promoting a unified approach by the Group.
• Promote diversity and inclusion• Promote human capital development from the Groupmanagement perspective• Promote health and productivity management• Increase employee engagement
The Committee will discuss these core themes. Based onthese themes, we will draft and promote various policies andstrategies. We will aggressively invest in human resources, andlink these efforts to increasing our medium- and long-term
corporate value.

Women’s Workplace Advancement
We support increased awareness regarding their own careerformation among female employees. We cultivate an organization
and workplaces that further enable female employees as core
members of corporate personnel to exert their skills.

Advancement for Mid-Career Hires
We engage in the hiring of personnel who have gained experiencein other companies and other fields, and help foster them into
core members of our Group. We will increase our ratio of midcareer hires to deliver advanced value beyond existing concepts
and perspectives.

Result as of FY2021
Ratio of mid-career hires: 25%* The above results and targets apply to Meiji Holdings Co., Ltd., Meiji Co., Ltd.,
Meiji Seika Pharma Co., Ltd. and KM Biologics Co., Ltd.

Personnel Development Policy
To make sustainable improvements in our competitiveness,
we believe it is important that employees be highly motivatedand enthusiastic in their work. This requires that we support
employees with an environment, organization, and culture thatenable them to fully exert their potential. Based on this belief,
we created the Meiji Group Human Resources Development
Policy. The goal of this Policy is to promote the developmentof human resources who can maximize their individuality
and autonomously take on new challenges. At the sametime, we support and promote flexible workstyles to create
an environment that allows employees at any stage of life tomaximize their potential.

The Meiji Group Human Resources Development Policy

1. Develop human resources to exert creativity andexpertise, and who possess the challenging spirit needed
to win against the world’s top companies.
2. Develop autonomous human resources capable of linking
personal growth to company growth, and who contributeto improving the core competence of the organization.
3. Develop human resources who have a deep understandingof our Group Philosophy and who will implement the
Meiji way at a high level.

Targets by FY2026• Increase the ratio of female managers to over 10%• Increase the number of female managers* to at least 420

Results as of FY2021• Ratio of female managers: 4.7%.
• Number of female managers*: 237* Leaders: persons in managerial positions and assistant managers

Advancement of Foreign-Born Personnel
To ensure external competitiveness and promote diversity,
we engage in personnel hiring regardless of nationality. We
engage in personnel hiring regardless of nationality. We
steadily hire foreign-born personnel for regular positions within
our organization. We will increase our ratio of foreign-born
employees and help foster them into core members of our Group.

Result as of FY2021

Number of hiring foreign-born managers andemployees: 24

76 Corporate GovernanceIntellectual Property Strategy
Intellectual property as a management resource is a criticalpart of supporting our business activities. We develop
and execute intellectual property strategy to improve our
medium- and long-term corporate value while respecting theintellectual property rights of third parties.
We strategically secure patents for our R&D results. This
ensures our ability to protect our core technology, maintaintechnological superiority, and support future businessdevelopment and new business creation.
In addition to patents, we appropriately manageother knowhow as valuable resources that contribute to
our competitiveness. This includes information such as
manufacturing methods and hygiene management that is notprotected by patents.
We also treat the Meiji brand and our various trademarks
as valuable resources that support our business. We
proactively engage in trademark activities to elevate thetrust and expectations of our products and services from
customers.

Climate Change
In 2019, the Group agreed to join the Task Force on ClimateRelated Financial Disclosures (TCFD), established by the
Financial Stability Board.
We established the Group TCFD Committee, which iscomprised of relevant departments in Meiji Holdings andits subsidiaries Meiji, Meiji Seika Pharma, and KM Biologics.
We are advancing initiatives to reflect long-term risks andopportunities of climate change in our business activities.

Constructive Dialogue with
Shareholders
The Company positively and voluntarily promotes
constructive dialogue with shareholders. Generalcommunication with shareholders is managed by theInvestor Relations (IR) Department, which is supervisedby the Director in charge of IR. The Company pursues thefollowing measures for promoting constructive dialogue withshareholders.

Sustainability Management |Approach to climate change and TCFD initiatives

Cross-Shareholdings Shares
The Group does not hold shares that are not recognized ascontributing to sustainable growth and improvement ofcorporate value over the medium- to long-term, taking into
consideration the necessity of business operations.
We hold listed shares as cross-shareholdings when we
think it would:
1. Accelerate the group’s financial operations
2. Strengthen the relationship with our group companies
3. Strengthen the group’s transactional relationships
4. Be reasonable in light of our responsibility to shareholders
The Board of Directors annually reviews all the shares
held and determines whether the Company should continue
holdings them or reduce them by selling. Then, we disclosethe details of the verification. When we verify the suitabilityof possession, we consider the following factors: the purpose
for holding, the trading status in the past year, medium- tolong- term perspective, and dividend amounts.
Following its September 2021 review, the Board of
Directors concluded that the Company would continue
holding 30 share issues. Subsequently, the Company sold one
share issue in its entirety and partially sold eight share issues
in FY2021 to reduce cross-shareholdings under the Corporate
Governance Code.
The Group plans to reduce cross-shareholdings by 30%
from the end of fiscal year 2020 on a book value basis during
the 2023 Medium-Term Business Plan period (from FY2021 to
FY2023). In FY2021, the first year of the 2023 Medium-TermBusiness Plan, we reduced cross-shareholdings by about 10%
on a book value basis.
As a rule, we will exercise our voting rights in line withthe wishes of the stock issuing company’s Board of Directors.
However, we will decline to do so if we think that it would
negatively impact the business relationships with theGroup or if it would clearly harm the common interests ofshareholders.
When a company holding Meiji shares for strategic
purposes (cross-shareholding company) indicates theintention to sell the share, we do not interfere with the sale ofthe share.
We do not engage in transactions that would interferewith Group and shareholder common interests, includingtransactions with cross-shareholding companies without
sufficiently validating the economic feasibility of thetransaction.

• General communication with shareholders is managed by the
IR department, which is managed by the Director in chargeof that department. To a practical extent, we also engage indialogue with Directors and Audit & Supervisory Board members,
including outside officers.
• To support shareholder dialogue, the Director in charge of IR
organizes liaison meetings with related departments of Corporate
Planning, Corporate Administration, Risk Management, andSustainability Management, and shares information and insights.
• In addition to one-on-one meetings, the Company holds earnings
conferences twice-yearly for institutional investors and securities
analysts to announce the second quarter and the fiscal year
results, as well as small meetings led by the Company President.
We also hold earnings telephone conferences with institutional
investors and securities analysts at the end of the first and third
quarters.
• We held online briefings for individual investors. We will continue
to promote dialogue with individual investors and work to
deepen their understanding of the Group.
• We actively promote ESG dialogue with investors. We hold oneon-one meetings with institutional investors and conferences for
institutional investors and securities analysts.
• We provide information via our website for shareholders
and investors. We publish our investment securities reports(Japanese/English), earnings flash reports (Japanese/English),integrated reports (Japanese/English), and earnings conferencematerials (Japanese/English) on this website. We stream videoof our earnings conferences (Japanese/English) and publish a
Q&A summary (Japanese/English) to further communication.
Briefings and events for individual investors are also reported on
the website.
• Comments and feedback gained through investor relations
activities are summarized in reports. The Director in charge of IR
reports to the Executive Committee and the Board of Directors
regularly.
• Due care is given to insider information during communication.
We communicate with shareholders and investors following
the Rules Concerning the Prevention of Insider Trading, which
outlines the handling of important information. We also establish
a quiet period.

Meiji Holdings Co., Ltd.｜Integrated Report 2022 77

Corporate GovernanceContents

Risk Management
Fundamental Ideas

The Group Business Management Risks

The Group recognizes that risk management is not justfor responding when emergencies or disasters occur andseverely impact business activities. It is also important totake preventive measures to control and mitigate/avert
risks.

We appropriately identify risks and develop
countermeasures considering the risk impact from acompany-wide business management perspective. In
this way, we not only minimize risks, but also achievesustainable growth and gain new growth opportunities.
We outlined the three visions—the Business Vision,
Sustainability Vision and Management Foundation Vision— in the Meiji Group 2026 Vision. We have identified the
Meiji Group Business Management Risks based on those
three Visions.
Among the matters related to the status of business,accounting, etc. as described in this annual securities
report, the main risks that management recognizes as
having a significant impact on the financial position,
operating results and cash flows of the consolidated
companies are as shown on the next page.

Risk Management System
The Group established a risk management system that
supports further growth to achieve the Meiji Group 2026
Vision. Under this risk management system, we identify
overall Group management risks*, reduce risks, andmanage appropriate risk-taking.
In April 2021, we established the Risk Management
Department to strengthen Group-wide risk management.
The department is Independent of the Audit &Supervisory Board, and an executive officer is appointed.
The Executive Committee evaluates and confirms Groupwide management risks in line with the Group Vision andthe risk control status and reports them to the Board of
Directors, which evaluates and supervises the system.
Thus, we can manage risks by adapting to changes in ouroperating environment.
Furthermore, we have established risk management
systems that are suited to the Food and Pharmaceuticalbusinesses, respectively. We regularly share risk
information across the company, which includes risks
common to all of our businesses and risks that have
impacts on the whole Group. Accordingly, we identify,
evaluate, address, and solve risks promptly. The executive
officer in charge of the Risk Management Department
reports information to the CEO & President andRepresentative Director.

• Abandon to launch planned product• Changes in customer lifestyles and values• Negative rumors about the Group’s corematerials (milk, cocoa, etc.)• Establish solid Proofs of Concept (POC)• Gather information on market trends• Develop products that are friendly to theenvironment and society• Create products and services unique to the
Meiji Group that address social issues• Appropriately disseminate relevant
information about products and materials$$

The majority ofprofits comesfrom specificproducts• Sluggish sales of products that account fora considerable portion of sales and profits• Implement promotions that maximize uniquevalue• Improve product portfolio management• Explore new markets and new businessdomains$$

Supply chains• Insufficient or excess procurement or priceincreases of raw materials• Difficulties in procuring raw milk
• Cessation of production due to production
problems, etc.
• Unstable product supplies due to
distribution problems• Gather information on raw materials markets
and promote procurement strategies• Diversify suppliers and consider alternative
materials• Strengthen coordination between production
and sales divisions• Improve distribution efficiency through laborsaving/automation$$

Technologicaladvances• Insufficient adaptation to rapid advancesin digital technologies• Discovery of innovative treatment
methods, manufacturing methods andformulation methods• Consider introducing new technologies as
early as possible• Research new manufacturing and formulation
methods, and search for alliances

Laws andregulations• Revisions that significantly impact
corporate activities• NHI drug price revisions• Obtain information about system revisions
early and implement countermeasures• Make appropriate approaches to relevant
government authorities• Expand portfolio of products that are notaffected by NHI drug price revisions$

Overseas
expansion andoverseas Group
companies• Rapid changes in society, or outbreaks of
war or terrorism• Revisions of the systems that greatly
exceed expectations in various countries• Gather information, and investigate andimplement countermeasures early• Create product supply systems from multiple
locations$$

Business plans,etc.

• Failure to achieve the Visions or MediumTerm Business Plans due to change inbusiness conditions• Growth slowdowns in core business, or
failure to achieve targets for overseas
markets or new business domains• Impairment losses on non-current assets
or goodwill• Fluctuations in foreign exchange or interest• Enhance unique value and search for newvalue• Provide unique value in overseas markets• Manage business portfolio from theperspectives of profitability, growth andproductivity• Make decisions and monitor investment andM&A plans appropriately• Use foreign exchange contracts and borrow atfixed interest rates$

Executive Committee
Report$$: Risks of greater importance

Risk Management Dept.
ManageAscertain, review
Response measures,confirm

Meiji Co., Ltd.

Compliance & Risk Management
Committee

Risks
Caring for theEarth• Environment friendliness in corporate
activities

Compliance & Risk Management
Control Committee

KM Biologics Co., Ltd.

*

Please see page 27 of the “Annual Securities Report (FY2021)” (PDF).

78 Corporate Governance$$$: Risks of great importance

Sustainability-Related Risks

Meiji Seika Pharma Co., Ltd.

Risk Compliance Committee

Change in risk Importanceawareness fromto theprevious year
Group

Countermeasures

Sale and supplyof products andservices

Opinion/instruction

ReportAscertain/review/
instruct
Risk reduction
measures

Please see pages 4 and 5 for the Meiji Group 2026 Vision.

Risks

Board of Directors

Evaluate/supervise

Evaluate/confirm

The future risks outlined in the table are categorized based on our
medium- and long-term management strategies. We have assessed
their importance to the Group, taking into account the likelihood of
occurrence and the level of impact on the Group.
The information represents risks recognized by the Group as of thedate of submission of this annual securities report. These risks are
not a comprehensive representation of all the risks related to ourbusinesses.
The signs below in the table show the change in risk awareness.
: increase: slightly increase: no change

Business Risks

Climate change• Address climate change

Change in risk Importanceawareness fromto theprevious year
Group

Countermeasures• Reduce CO2 emissions and prevent
fluorocarbon leaks, switch to renewableenergies, appropriately treat wastewater andindustrial waste, and conduct initiatives incompliance with ISO 14001• Manage supply and demand, and decrease
food loss• Comply with policies related to theenvironment$• Analyze climate change scenarios according to
the TCFD framework, formulate strategies andrelease information$
Continued on page 80

Meiji Holdings Co., Ltd.｜Integrated Report 2022 79

Corporate GovernanceCompliance

Risk Management
Thriving
Communities• Sustainable raw material procurement• Consider human rights and human rights
issues• Understand diversity and use a diverse
workforce effectively• Increase the ratio of sustainably procured
raw materials, such as cocoa beans and palmoil
• Strengthen cooperation and collaboration
with dairy farmers and other suppliers• Address challenges of human rights basedon due diligence• Create organizations and cultures that value
diverse perspectives and abilities• Strictly comply with policies, guidelines,
etc. related to procurement, human rights,
society$

Management Foundation-related Risks
Risks

Countermeasures

Corporate
Governance• Make business decisions in a timely andappropriately manner• Internal or external non-compliance• Improve effectiveness of the Board of
Directors• Enhance corporate governance systems• Provide education on compliance and social
media usage, and comply with internal andexternal policies

Damage to
the Meiji brand• Product recalls or withdrawals from themarket due to quality defects or unexpectedside effects of pharmaceuticals, etc.
• Unexpected harmful rumors about theGroup or products• Pursue quality and safety• Communicate appropriately with eachstakeholder

Human capitaland culture• Recruit and develop human capital requiredfor corporate growth• Employee engagement• Effects of business environment on
productivity• Appropriately implement succession
planning• Improve employee training• Enhance employee engagement• Enhance health and productivity
management and create comfortable work
environments

Information
asset leaks• Information leaks and system shutdowns
due to unauthorized access, etc.
• Data breaches due to inappropriate systemmanagement• Strengthen information management
systems and information security• Strengthen education on information
management and comply with regulations
and policies

Disaster,emergency
or otherunforeseen
circumstances• Temporary or full suspension of business
operations due to disasters, pandemics orother unexpected emergency• Increases or decreases in product demand
due to changes in business conditions in an
emergency• Develop business continuity plans and risk
management plans for swift recovery• Maintain a broad product portfolio acrossthe Group

Change in risk Importanceawareness fromto theprevious year
Group

$

$$

$

$$

$

The Board of Directors selected the priority initiative topics for FY2021 relating to Group business
management risks and confirmed the initiatives of each operating company.

Priority initiative topics for FY2021:
1. Confirmation of quality assurance systems
and reliability assurance structures applied
to contract manufacturers and development
partners

There was an incident whereby a hypnotic
substance was contaminated in Itraconazole tablets
manufactured by Kobayashi Kako Co., Ltd. andsold by Meiji Seika Pharma Co., Ltd. In response,
we confirmed the quality assurance system and thereliability assurance structure applied to contract
manufacturers and development partners.

80 Corporate GovernanceContents

2. Spread of innovative treatment methods,
manufacturing methods, and formulation
methods

In responding to the spread of mRNA vaccines as
COVID-19 vaccines, we confirmed recognition andevaluation of and response to the technology.

3. Information leaks and system shutdowns due tounauthorized access, etc.

Damage suffered by companies due to ransomware
and targeted email attacks has become more
prominent. Therefore, we confirmed ourcountermeasures against unauthorized access underusual conditions and responses when such incidents
occur.

Fundamental Ideas

Anti-Corruption

The Meiji Group complies with the laws, regulations
and social rules in each country in order to ensure alltransactions are proper and to promote fair, transparent,
and free competition. To increase awareness andstrengthen compliance further, we established internal
regulations based on our Corporate Behavior Charter andwork to improve internal training. We conduct businesswith high ethical standards and shall remain a company
trusted by society.

The Meiji Group formulated the Meiji Group AntiCorruption Policy in March 2019 in order to remain atransparent and sound corporate group that is trusted
by society. In May 2019, we became a signatory to the
UN Global Compact and we comply with Principle 10:
Business should work against corruption in all its forms,
including extortion and bribery. We translated this policy
into English, Chinese, Spanish, Thai, Indonesian and
Hindi to raise employee awareness, not only in Japan but
overseas as well. We will continue internal training andother efforts to improve employee understanding.
At overseas Group companies, which are generally
considered higher risk than companies in Japan, in
addition to conventional business audits, we conduct
governance audits specifically designed to reducemanagement risks, including fraud prevention. In
governance audits, we check systems and operations
related to fraud prevention, such as the disseminationof the Meiji Group Policy, anti-corruption, separation ofduties, internal reporting systems, and risk management
systems. We also use external experts to improve theefficiency and effectiveness of audits. The results ofaudits are reported to the audited companies and sharedwith the Group CEO and other related officers, Audit &Supervisory Board members, and each Group company.
These efforts lead to strengthen systems and both preventand control fraud.

Management System
The Meiji Group has Compliance Regulations as well as
related rules and committees in place, implements andintroduces a whistle-blowing system.
At Meiji Co., Ltd., our approach is based on the ideathat risk management and compliance are closely
related to one another. We have set up a Compliance &Risk Management Committee to promote a variety ofactivities and programs, so that we can nurture and foster
compliance awareness. Compliance is the cornerstone of
our operations and we conduct business operations fairly,
faithfully and accordingly.
Meiji Seika Pharma Co., Ltd. has established theCompliance Program Guidelines and the Meiji Seika
Pharma Code of Practice. As we work in pharmaceuticalbusiness, we are closely related to the health and livesof people. Thus we, all executives and employees, arerequired to act in accordance with high ethical standards.
KM Biologics Co., Ltd. has established a risk
compliance committee with the president serving aschairman. We conduct compliance promotion and risk
management. In our Compliance Program Guidelines, we
stipulate that we must act with high ethical standards,
including compliance with laws and regulations as well asbioethics, as a company that works in the pharmaceuticalbusiness and handles products related to human health.
We are working to promote compliance awarenessamong frontline workers by implementing programs
such as education and training focused on complianceand reliability. In addition, we are restructuring theorganization with the goals of strengthening our audit
function and ensuring independence, as well as clarifying
responsibilities, authorities, and reporting lines throughthe introduction of a factory system. Through these
efforts, we are working on the early detection andresolution of issues. As a member of the Group, we willseek a stringent compliance system.

Meiji Group Anti-Corruption Policy (PDF)

Tax Compliance
Regulatory compliance and risk management arebecoming increasingly important as the Meiji Group
becomes more globalized and conducts moreinternational transactions. In addition, tax authorities ineach country strengthen taxation. We therefore pay taxes
properly complying with Transfer Pricing Guidelines. We
formulated the Meiji Group Tax Policy in March 2019 tocomply with the tax laws and regulations in each country
and region where we conduct business. We communicate
this information to relevant departments and the Group
companies, make the information publicly available, pay
appropriate taxes and minimize tax-related risks. Our staff
in charge of taxation attend external training to increase
their knowledge about taxation.
The Meiji Group accurately and appropriately reports
financial information in accordance with applicable laws
and regulations, corporate accounting principles, andother generally accepted fair and proper accounting
standards. We also strive to pay taxes appropriately incompliance with the tax laws and regulations of eachcountry and region.
Meiji Group Tax Policy (PDF)

Meiji Holdings Co., Ltd.｜Integrated Report 2022 81

Financial and Non-Financial PerformanceContents

Financial and Non-Financial Highlights (11 Years Summary)Annual Securities Report (PDF)

Consolidated Results
Financial information
For the fiscal year:

Net sales
Food
Pharmaceuticals
Segment Food
(Overseas) Pharmaceuticals
Segment

At fiscal year-end:

Per share data *4

RatiosGross profit
Operating profit
Profit before income taxes
Profit attributable to owners of parent
Capital expenditures *2
Research and development expenses
Depreciation *3
Cash flows from operating activities (A)Cash flows from investing activities (B)Cash flows from financing activities
Free cash flows (A+B)
Total assets
Interest-bearing debt
EquityProfit (EPS)
Net assets (BPS) *5
Cash dividends
Return on equity (ROE)
Return on assets (ROA)
Equity-to-asset ratio
Payout ratio

Unit

FY2011FY2012FY2013

FY2014FY2015FY2016FY2017

Millions of yen

1,109,275
986,319
125,274——
370,774
20,18914,588
6,805
38,32423,82340,87130,597(44,314)
4,861(13,716)
749,985
205,261
291,589
46.19
1,979.12
40.00
2.3
3.0
38.9
86.6

1,126,520
1,001,551
127,361——
382,684
25,85925,214
16,646
37,66826,19940,821
50,622(39,504)(9,411)
11,118785,514205,394
313,383112.992,127.28
40.00
5.5
3.8
39.9
35.4

1,148,076
1,015,265
135,105
29,097
17,325394,062
36,496
33,687
19,06047,03826,06740,972
63,847(47,293)(18,194)
16,553
779,461
198,376
320,447129.402,175.98
40.00
6.0
5.0
41.1
30.9

1,161,152
1,021,806
141,338
29,41823,961
403,386
51,54348,65730,89164,347
26,10541,88586,487(92,822)6,846(6,335)877,367
221,480
370,341209.792,515.26
50.00
8.9
6.5
42.2
23.8

1,223,746
1,061,398
164,542
38,353
41,961
445,561
77,781
95,21062,58042,35427,30842,077105,155(9,809)(85,071)
95,346856,115
147,828
408,874
425.062,777.28
90.00
16.1
9.4
47.8
21.2

1,242,480
1,082,115
161,620
38,191
38,731
461,326
88,39589,19260,78650,417
26,16245,872
81,888(44,291)(46,548)
37,597883,895
129,497448,901
413.11
3,064.91
110.00
14.2
10.2
50.8
26.6

1,240,860
1,254,380
1,073,655
1,056,637
168,466
198,688
43,47447,182
39,485 *14
41,009454,882456,569
94,673
98,38391,07994,586
61,27861,86871,777
71,24326,507
29,182
46,511
43,033
108,775
112,100(64,394)(100,202)(40,121)(13,980)
44,38011,898927,544
1,004,143
119,102116,385
487,310527,310422.15426.61
3,360.70
3,635.79
130.00140.00
13.1
12.2
10.6
10.3
52.5
52.5
30.8
32.8

—
—

—
—

—
—

—
—

—
—

48.4

52.4

58.2

56.8

55.0

—
—

—
—

—
—

—
—

—
—

—

—

—

—

12.8

—
23,674—
21,652—
8.7——
22,902—
20,864—
8.1——
22,723—
20,566—
7.2——
20,148—16,504—
7.4——
24,375—21,214
—
7.6
—

—
—
23.6
28.7
—
—
3.0
9.7
—
24,104—
20,255—
5.4—

Millions of yen
Millions of yen
Millions of yen
Millions of yen
Millions of yen
Millions of yen
Millions of yen
Millions of yen
Millions of yen
Millions of yen
Millions of yen
Millions of yen
Millions of yen
Millions of yen
Millions of yen
Millions of yen
Millions of yen
Millions of yen

Yen
Yen
Yen
%
%
%
%

FY2018FY2019FY2020

FY2021

1,252,706
1,049,559
204,354
48,42243,507
462,523
102,710 *12
97,74767,318 *12
71,109 *12
31,44646,198 *12
114,103（70,811）（30,287）
43,291
998,920 *12
106,764
562,753 *12
464.08 *12
3,879.18 *12150.00
12.4
10.3
56.3 *1232.3

1,191,765 1,013,092 *13
999,673826,080 *13
193,664
187,981 *13
49,17352,618 *13
37,69240,368 *13
449,625
323,249
106,061
92,922
103,183
128,455
65,65587,497
67,90093,166
31,40433,441
48,411
50,103
123,683
127,526（93,110） (27,614)（28,293） (76,997)
30,573
99,911
1,067,000 1,117,459
101,775
81,267
621,428
673,336452.52607.244,282.80
4,781.52
160.00170.00
11.1
13.5
10.7
8.6
58.2
60.3
35.4
28.0

FY2021

Unit *1

8,277,579
6,749,577
1,535,926
429,921329,835
2,641,143
759,232
1,049,561
714,904
761,226
273,237
409,379
1,041,968(225,629)(629,119)816,338
9,130,320
664,001
5,501,562
4.961
39.067
1.389

Thousands of U.S. dollars
Thousands of U.S. dollars
Thousands of U.S. dollars
Thousands of U.S. dollars
Thousands of U.S. dollars
Thousands of U.S. dollars
Thousands of U.S. dollars
Thousands of U.S. dollars
Thousands of U.S. dollars
Thousands of U.S. dollars
Thousands of U.S. dollars
Thousands of U.S. dollars
Thousands of U.S. dollars
Thousands of U.S. dollars
Thousands of U.S. dollars
Thousands of U.S. dollars
Thousands of U.S. dollars
Thousands of U.S. dollars
Thousands of U.S. dollars

U.S. dollars
U.S. dollars
U.S. dollars

Non-financial information
Energy consumption
CO2 emissions

Water consumption
Water discharge
Waste

Japan
Overseas *7
Scope 1
Japan
Scope 2
Scope 3 *8 Overall
Category 1
Overseas *7 Scope 1
Scope 2
Scope 3
Japan *10
Overseas *7
Japan *10
Overseas *7
Japan *11
Overseas *7*1 U.S. dollar amounts are provided solely for the convenience of readers
based on an exchange rate of US$1 = ¥122.39, the exchange rate prevailingon March 31, 2022.
*2 Figures for capital expenditures represent property, plant and equipment
and intangible fixed assets based on the consolidated statement of cash
flows.
*3 Figures for depreciation represent property, plant and equipment andintangible fixed assets based on the consolidated statement of cash flows.
*4 A 2-for-1 common stock split was issued on October 1, 2015. This value wasretro-actively applied.
*5 Net assets per share = (Total net assets – Non-controlling interests) ÷(Number of shares of common stock issued – Number of treasury shares)*6 The Kumamoto Plant of KM Biologics Co., Ltd. was included in thecalculation from FY2018, and all of the company’s sites were included from
FY2019.
The scope of calculation of industrial waste is limited to production plants.
*7 Fourteen production plants in Mainland China, Asia (excluding China),
North America and Europe (12 plants up until FY 2019, 13 plants in FY2020)

82 Financial and Non-Financial Performance

TJ
TJ
10,000 t-CO2
10,000 t-CO2
10,000 t-CO2
10,000 t-CO2
10,000 t-CO2
10,000 t-CO2
10,000 t-CO2
1,000 m3
1,000 m3
1,000 m3
1,000 m3
10,000 t
10,000 t*8 Category 4 (Upstream transportation and distribution) and Category
9 (Downstream transportation and distribution) have been added andare included in the calculation for Scope 3 from FY2018. In addition, thecalculation for Category 1 was expanded to include the raw materials thatmake up the majority of what is needed for production.
*9 Data from past fiscal years has been revised.
*10 Meiji Co., Ltd. and Meiji Seika Pharma Co., Ltd. up until FY2014, and thedomestic Meiji Group from FY2015.
*11 From FY2018, only industrial waste generated from production plants was
included in the waste.
*12 In the first quarter of FY2020, we finalized provisional accounting
treatment pertaining to a business combination. Accordingly, the key
financial data to FY2019 represent amounts reflecting the revisions to theinitial allocation of the acquisition cost resulting from the finalization ofprovisional accounting treatment.
*13 The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29,
March 31, 2020) and related implementation guidance are being applied as
of FY2021.
*14 The standard used for calculating the overseas sales was revised from
FY2017.

9,281
—
23.0
27.4
203.5
—
3.0
9.5
—
22,305
1,778
17,914—
6.3—

9,845 *6—
22.8 *628.2 *6
318.9 *6
243.7 *6
2.7
8.6—
22,056 *6
1,427
19,702 *6884
2.8 *6—

10,714 *6—
22.2 *627.9 *6
303.5 *6
234.3 *6
2.6
7.6
21.9
21,979 *6
1,418
18,415 *6
1,022
2.8 *6
0.4

9,766
1,674
21.5
25.4
294.8 *9225.9 *9
2.4
7.0
18.7
21,189 *9
1,382
17,248977
2.6 *9
0.4

9,424
1,671
22.1
21.6
302.7
228.4
2.4
7.5
20.0
19,808
1,448
16,450947
2.4
0.3

Calculation Methods of Non-Financial Information[Energy consumption](Japan and overseas) The energy consumption is calculated based on the Act on Rationalizing Energy Use (Energy Conservation Act).
[CO2 emissions: Scope 1, 2](Japan) Calculated based on the Act on Promotion of Global Warming Countermeasures. The basic emission factors of individual electric power supplier are applied
for purchased electricity of Scope 2.
(Overseas) Scope 1 is calculated using the emission factors from the Act on Promotion of Global Warming Countermeasures and Scope 2 is calculated using theemission factors from the IEA, Emissions from Fuel Combustion.
[CO2 emissions: Scope 3](Japan and overseas) Calculated based on the Basic Guidelines on Accounting for Greenhouse Gas Emissions throughout the Supply Chain.
Scope 3 Categories included in calculation: 1. Purchased Goods and Services, 2. Capital Goods, 3. Fuel- and Energy-Related Activities Not Included in Scope 1 or Scope2, 4. Upstream transportation and distribution, 5. Waste Generated in Operations, 6. Business Travel, 7. Employee Commuting, 9. Downstream transportation anddistribution, 12. End-of-Life Treatment of Sold Products
Category 1: Calculated by multiplying Emission Intensities* by the purchase price for main raw materials and packaging materials (paper, plastic, cardboard, steel,aluminum and glass bottles) used in the food and pharmaceutical businesses.
* Database of Emission Intensities for Calculation of Greenhouse Gas Emissions, etc., by Organizations Throughout the Supply Chain[Industrial waste](Japan) Calculated based on the Waste Management and Public Cleansing Act.
(Overseas) Calculated in accordance with the Waste Management and Public Cleansing Act.
The scope of calculation is noted on p.87.
The numerical data indicated withhave been assured by an independent practitioner.

Meiji Holdings Co., Ltd.｜Integrated Report 2022 83

Financial and Non-Financial PerformanceContents

Non-Financial Performance (Progress on Materiality)
Materiality related to social issues[

Circular Economy SDGs: 12

The 13 Main SDGs the Meiji Group Can Address] Scope of KPISocial Issues

Meiji G : the Meiji Group (consolidated)
Meiji HD : Meiji Holdings Co., Ltd.
Meiji
: Meiji Co., Ltd.
MSP
: Meiji Seika Pharma Co., Ltd.
KMB
: KM Biologics Co., Ltd.

Reduce environmental
impactSocial Issues

Countermeasuresagainst emerging andre-emerging infectious
diseases

Performance

−3.1%

Water

Enroll a total of 700,000 participants into nutrition and healthy diet education within
three years from FY2021 to FY2023 [Meiji, unconsolidated]

188,000
participantsSocial Issues

32.4%

Secure water resources

Achieve a volume share of at least 50% in five Key Drugs by FY2023[MSP, consolidated (domestic)]*1*2

Aim for launch of COVID-19 vaccines by FY2023[MSP, KMB, unconsolidated]

Currently taking
steps to aim forlaunch in FY2022−34.1%

Reduce domestic plastic usage (packaging,etc.) by at least 25% by FY2030(compared with FY2017) [Meiji G, consolidated (domestic)]*

Newly used for
Kaju Gummy
packaging

SDGs: 6, 14
Performance

KPIs

FY2021

Reduce company-wide water consumption per unit of sales byat least 20% by FY2030 (compared with FY2017) [Meiji G, consolidated]−8.4%

Replenish an amount of water to nature equivalent to 45% the amount used in
our products by FY2030 [Meiji G, consolidated]

24.2%

*

* Per unit is calculated based on net sales before the application of the Accounting Standard for Revenue Recognition

Social Issues● Protection of
local biodiversity

SDGs: 7, 13
KPIs

100%

Biodiversity SDGs: 6, 15

Caring for the Earth● Eliminate the use of
specified fluorocarbons

Reduce product waste in our domestic food business by 50% by FY2025(compared with FY2016) [Meiji, consolidated (domestic)]

FY2021*1 Figures have been revised from preliminary figures disclosed in the FY2021 Financial Results in May 2022
*2 Copyright © 2022 IQVIA./ Calculated based on JPM Mar 2022 MAT/ Reprinted with permission

Reduce CO2 emissions

80.5%* To be calculated in FY2022

Increase sales growth of health-conscious products, nutrition-enriched products,
products that contribute a super-aged society by at least 10% in FY2023,
compared with FY2020 baseline [Meiji, consolidated (domestic)]

Social Issues

Consolidated domestic recycle rate 85% or above by FY2023

Expand usage of bioplastics and recycled plastics [Meiji G, consolidated (domestic)]

KPIs

Climate Change[Meiji G, consolidated (domestic)][Meiji G, consolidated (domestic)]

Health and Nutrition SDGs: 2, 3, 4

● Stable supply ofpharmaceuticals

FY2021

Ensure 100% effective use of materials used by our logistics division(pallets, crates, and stretch film, etc.) by FY2030, through reuse and recycling.

Healthier Lives

Contribute tohealthy diets
Respond toa super-aged society

Performance

KPIs

Performance

Performance

KPIs

FY2021

Conduct biodiversity activities at all production sites worldwide by FY2023[Meiji G, consolidated]

61.9%

*

* Impact of cancellation or postponement of plans due to the spread of COVID-19

FY2021

Reduce company-wide CO2 emissions (Scope 1 and 2) by at least 40% by FY2030(compared with FY2015) [Meiji G, consolidated] *1−27.8%

Reduce company-wide CO2 emissions (Scope 1 and 2) by at least 50% by FY2030(compared with FY2019) [Meiji G, consolidated] *2−11.3%

Reduce CO2 emissions (Scope 3 Category 1 purchased goods and services,
Category 4 and 9 upstream and downstream transportation and distribution,
Category 12 end of life treatment of sold products) by at least 14% by FY2030(compared with FY2019) [Meiji G, consolidated]−2.8%

Reduce CO2 emissions (Scope 3 Category 1 purchased goods and services,
Category 4 and 9 upstream and downstream transportation and distribution,
Category 12 end of life treatment of sold products) by at least 30% by FY2030(compared with FY2019) [Meiji G, consolidated] *2−2.8%

Expand renewable energy usage to make up at least 50% of total company-wide usage
by FY2030 [Meiji G, consolidated]

5.3%

Total abolition of CFC-using refrigeration, freezer, and other equipment at all domestic
production sites by FY2030 [Meiji G, consolidated (domestic)] *3−48.4%*1 The emissions for the base year was 742 thousand t-CO2, which includes CO2 emissions from KM Biologics Co., Ltd.
*3 Base year is FY2020*2 CO2 reduction target was changed in FY2022

84 Financial and Non-Financial Performance

Meiji Holdings Co., Ltd.｜Integrated Report 2022 85

Financial and Non-Financial PerformanceContents

Independent Practitioner’s Assurance of Energy Consumption, CO2 Emissions,
Water Consumption & Industrial Waste

Non-Financial Performance (Progress on Materiality)

In order to improve the reliability of the data, Meiji Holdings Co., Ltd. obtained the independent practitioner’s assurance forthe domestic energy consumption, the domestic CO2 emissions (Scope 1, Scope 2 and Scope 3 category 1), the domestic water
consumption and the domestic industrial waste for FY2021 indicated on p.82 and 83 in the Japanese version of this report by
Deloitte Tohmatsu Sustainability Co., Ltd. We will work hard to improve the reliability of all environmental data.

Thriving Communities
Human Capital SDGs: 5, 8, 10
Social Issues
Promote diversity anddevelop human capital

KPIs
Increase the ratio of female managers at least 10% by FY2026,
compared with the FY2017 result of 2.6%

[Meiji HD, Meiji, MSP, KMB unconsolidated]

Increase the number of female managers (including assistant managers)
to at least 420 by FY2026 (approximately triple the number as in FY2017)[Meiji HD, Meiji, MSP, KMB unconsolidated]

Raise the ratio of employees with disabilities above Japan's legal
requirement of 2.3% [Meiji HD, Meiji, MSP, KMB unconsolidated]● Employee-friendly
workplaces

Renew certification for outstanding health and productivity
management from the Japanese government

Performance
FY2021

4.7%
237 people
2.57%
Renewed Certification[Meiji HD, Meiji, MSP, KMB unconsolidated]

Society SDGs: 8, 10, 17
Social Issues

KPIs

Performance
FY2021All domestic Meiji Group employees to attend a human rights training(including e-learning) at least once annually

Implemented one time
(Number of participants:
Approx. 13,000/
Participation rate: 90%)

All overseas Meiji Group employees to attend a human rights training(including e-learning) at least once by FY2023

Trained for three overseas
Group companies(Number of participants: Approx. 770/
Participation rate: 99%)

● Engagement withstakeholders

Hold an ESG session for investors, and advisory board meetings at least
three times annually [Meiji HD]

ESG Session for Investors: One time
ESG Advisory Board: Two times● Promote social
contribution activities

All Meiji Group employees in Japan to participate in social contribution
activities at least twice annually (at least once each 6-month period)

Participation rate at least
once each 6-month period
First half year term: 90%/
Second half year term: 92%

Respect and promote
human rights[Meiji G, Japan consolidated][Meiji G consolidated excluding Japan][Meiji G, Japan consolidated]

Shared Themes
Sustainable Sourcing SDGs: 8, 12, 15, 17
Social Issues
Procure raw materials
with consideration
toward human rights
and the environment

KPIs

Performance
FY2021

Start conducting a sustainable sourcing survey of suppliers for Group
companies in Japan by FY2021

Start considering implementation
in FY2022

Start conducting a sustainable sourcing survey of suppliers for major
overseas Group companies by FY2022 [Meiji G consolidated]

Launched for
46 suppliers

Increase sourcing ratio of sustainable cocoa to 100% by FY2026[Meiji consolidated]

42%

Switch 100% to RSPO-certified palm oil by FY2023 [Meiji consolidated]84%

Switch 100% to eco-friendly paper by FY2023 [Meiji G consolidated]

98%

Hold Meiji Dairy Advisory program (MDA) to support management of
dairy farms 250 times a year, and a total of at least 1650 times by FY2023[Meiji, Japan consolidated]
RSPO: Roundtable on Sustainable Palm Oil

86 Financial and Non-Financial Performance

475 times annually,
accumulated total 1,423 times

Scope of domestic energy consumption, domestic CO2 emissions (Scope 1 and 2),
domestic water consumption and domestic industrial waste
Meiji Holdings Co., Ltd., Meiji Co., Ltd. and Group companies (Shikoku Meiji Co., Ltd., Tokai Meiji Co., Ltd., Gunma Meiji Co., Ltd., Tochigi Meiji Milk Products Co., Ltd.,
Meiji Oils and Fats Co., Ltd., Chiba Meiji Milk Products Co., Ltd., Donan Shokuhin Co., Ltd., Meiji Sangyo Co., Ltd., Meiji Chewing Gum Co., Ltd., Tokai Nuts Co., Ltd.,
Nihon Kanzume, Co., Ltd., Meiji Feed Co., Ltd., Okinawa Meiji Milk Products Co., Ltd., Meiji Logitech Co., Ltd.), Meiji Seika Pharma Co., Ltd. and Group companies(OHKURA Pharmaceutical Co., Ltd.), KM Biologics Co., Ltd.
Note that the energy consumption and the CO2 emissions for Meiji Logitech Co., Ltd. only include the fuel used in company-owned delivery vehicles/trucks.
Additionally, only production plants are included in the above totals for the domestic industrial waste.

Scope of domestic CO2 emissions (Scope 3 category 1)
This scope includes the main raw materials and the packaging materials (paper, plastic, cardboard, steel, aluminum, and glass bottles) that will be introduced into thedomestic production location for Meiji Co., Ltd. and Group companies (Shikoku Meiji Co., Ltd., Tokai Meiji Co., Ltd., Gunma Meiji Co., Ltd., Tochigi Meiji Milk Products
Co., Ltd., Meiji Oils and Fats Co., Ltd., Chiba Meiji Milk Products Co., Ltd., Donan Shokuhin Co., Ltd., Meiji Sangyo Co., Ltd., Meiji Chewing Gum Co., Ltd., Tokai Nuts Co.,
Ltd., Nihon Kanzume, Co., Ltd., Okinawa Meiji Milk Products Co., Ltd.), Meiji Seika Pharma Co., Ltd. and Group companies (OHKURA Pharmaceutical Co., Ltd.), as wellas KM Biologics Co., Ltd.

Meiji Holdings Co., Ltd.｜Integrated Report 2022 87

Corporate Information

Contents

Operating Bases and Group Companies (As of July 1, 2022)

The Meiji Group uses its extensive global network and conducts R&D,
production and distribution to provide a stable supply of high quality food products
and pharmaceuticals, in order to maintain society’ s trust in the Meiji brand.

Wakkanai Plant

Overseas

Japan
Tokachi Cheese R&D Center
Tokachi Plant▼ Food Segment

Asahikawa Plant

Meiji Co., Ltd.
Head Office

Nishi Shunbetsu
Plant

Research Laboratory

2
26

BranchPlant

Research Laboratory

BranchPlant

Group Company▼ Pharmaceutical Segment

Pharmaceuticals
Hokkaido BranchGroup Company

519

Eniwa Plant

Honbetsu Plant

Nihon Kanzume, Co., Ltd.

▼ Food Segment▼ Pharmaceutical Segment

Meiji Co., Ltd.

Meiji Seika Pharma Co., Ltd.

OfficeGroup Company

1
Group Company 16
OfficeGroup Company

Group Company

17
Guangzhou Meiji Confectionery Co., Ltd.
Meiji Ice Cream (Guangzhou) Co., Ltd.
Meiji Food (Guangzhou) Co., Ltd.

Donan Shokuhin Co., Ltd.

Meiji Seika Pharma Co., Ltd.
Head Office

Research Laboratory

Research Laboratory
Plant

1
2

BranchPlant

Group Company

Group Company

KM Biologics Co., Ltd.
Research Center

Head Office

Research Center
Production Center

1
4

OfficeProduction Center

1
1

OfficeGroup Company▼ Companywide Common

Pharmaceuticals
Chugoku & Shikoku
BranchKyoto Plant
Meiji Oils and Fats Co., Ltd.
OHKURA
Pharmaceutical Co., Ltd.
Osaka Plant

Karuizawa Plant
Gifu Plant

Head office
Kumamoto Production Center
Kikuchi Research Center
Kikuchi Production Center
Koshi Production Center
Aso Production Center
Meiji Animal Health Co., Ltd.

Tokai
Plant
Chubu Branch
Pharmaceuticals
Chubu Branch

Meiji Pharma(Shandong)Co., Ltd.

Meiji America Inc.
D.F. Stauffer Biscuit Co., Inc.

MEIJI FOOD VIETNAM CO., LTD.
Medreich Limited＊

Taiwan Meiji Food
Co., Ltd.
Shantou SEZ Meiji
Pharmaceuticals Co., Ltd.
Guangdong Meiji
Pharmaceutical Co., Ltd.
Meiji Seika (Singapore) Pte. Ltd.

Bangkok Office
AustAsia Investment
CP-Meiji Co., Ltd.
Holdings Pte LTD.
Thai Meiji Food Co., Ltd.
Thai Meiji
PT. Meiji Indonesian
Pharmaceutical Co., Ltd.
Pharmaceutical Industries

Pharmaceuticals
Kanto BranchToda Plant
Co-Creation Center
Meiji Innovation Center

Saitama Plant
Ibaraki Plant
Moriya Plant
Tokai Nuts Co., Ltd.
Pharmaceuticals Tokyo Branch
Meiji Techno-Service Inc.
Kitasato PharmaceuticalIndustry Co., Ltd.

Meiji Ad Agency Co., Ltd.
Kanagawa Plant

Okinawa Meiji
Milk Products Co., Ltd.

Laguna Cookie Co., Inc.

Pharmaceutical
Research Center
Odawara Plant

SakadoPlant

Meiji Dairies (Tianjin) Co., Ltd.

Meiji Pharma Spain, S.A.

Gunma Meiji Co., Ltd.
Gunma Plant/Gunma Nutritionals Plant
Gunma Pharmaceuticals Plant
Tochigi Meiji Milk Products Co., Ltd.

Meiji Chewing Gum
Co., Ltd.
Tokai Meiji
Co., Ltd.

Aichi Plant

Kansai Branch
Pharmaceuticals
Kansai Branch

88 Corporate Information

Kitanihon Branch
Pharmaceuticals
Sendai Branch

Kurashiki Plant

Kansai Plant
Kansai Ice Cream Plant
Kansai Nutritionals Plant

Meiji Seika Europe B.V.

Tohoku Plant

Meiji Sangyo Co., Ltd.

Shikoku Meiji Co., Ltd.

Kyushu Plant

Group Company

Three S and L Co., Ltd.

Meiji Business Support Co., Ltd.

Nishinihon
BranchPharmaceuticals
Fukuoka Branch

Meiji Dairies (Suzhou) Co., Ltd.
Meiji Seika Food Industry (Shanghai)Co., Ltd.
Meiji China Investment Co., Ltd.

8
4

BranchHead Office
Meiji Business Support Co., Ltd.
Meiji Food Materia Co., Ltd.
Me Pharma Co., Ltd.
Romeck Pharma, LLC
Tokyo Office

Kanto Branch
Meiji Feed Co., Ltd.
Meiji Logitech Co., Ltd.
Meiji Fresh Network Co., Ltd.
Meiji Nice Day Co., Ltd.

＊ The nine subsidiaries of Medreich Limited are not shown.

Unmarked bases are companies and facilities that do not belong to the segment.

* The group companies are the consolidated companies and entities accounted for by the equity method.

Meiji Holdings Co., Ltd.｜Integrated Report 2022 89

Corporate Information

Contents

Corporate Data / Stock Information (As of March 31, 2022)
Corporate Data

Stock Information

Company Name

Major Shareholders

Meiji Holdings Co., Ltd. (Securities code: 2269)

Cover Artwork

Name

Number ofshares held(Thousands)

Percentage of
total sharesissued (%)

The Master Trust Bank of Japan, Ltd. (Trust account)

24,17016.29

Custody Bank of Japan, Ltd. (Trust account)

7,034

4.74

April 1, 2009

Nippon Life Insurance Company

3,348

2.25

Share Capital

The Norinchukin Bank

2,892

1.94

Meiji Holdings Employee Shareholding Association

2,669

1.79

Meiji Holdings Trading-Partner
Shareholding Association

2,654

1.78

STATE STREET BANK WEST CLIENT-TREATY 505234

2,521

1.69

Mizuho Bank, Ltd.

2,417

1.62

Resona Bank, Limited

2,117

1.42

JP MORGAN CHASE BANK 385781

1,708

1.15

Head Office2-4-16, Kyobashi, Chuo-ku, Tokyo 104-0031, Japan
Incorporated

JPY 30.0 billion
Number of Group Employees

17,336

Common Stock Issued

148,369,500

Stock ListingTokyo

Fiscal Year-End

March 31

(Note) In addition to the above, the Company holds 7,548 thousand shares of treasury
share (5.09% of total shares issued.)

Ordinary General Meeting of Shareholders

Late in June

Shareholding by Type of Shareholder

Transfer Agent of Common Stock

Mitsubishi UFJ Trust and Banking Corporation■ Financial Institution

39.02%
27.18%■ Foreign Companies, etc.
21.99%■ Other Companies
9.66%■ Financial Instruments Dealers
2.15%■ Individuals and Others

Public Notices

Public notices given by the Company
are issued electronically.
URL: https://www.meiji.com/global/
However, in the event that public notices cannot be issued
electronically due to an accident or some other unavoidable
circumstances, public notices given by the Company shall be carriedin the Nihon Keizai Shimbun.
It should be noted that pursuant to Article 440, Paragraph 4 of theCompanies Act, public notices of financial statements are not given.

Meiji Holdings

Trading volume(Thousandshares)
30,000125

25,000100

20,00075

15,00050

10,00025

5,000(Notes) The closing price as of March 31, 2017 is 100.

90 Corporate Information

Paralym Art is a social
contribution project in which anorganization works together withartists with disabilities as one
team. This project sustains theprovision of support for people
with disabilities along with thecooperation of private companies
and individuals, without
depending on social security
funds. (Project organizer:
Shougaisha Jiritsu Suishin Kikou
Association)

I was very happy to receive the request to “portray the Meiji Group,
which delivers value for wellness to customers around the world
cheerfully and energetically.”
I drew the smiling faces of people around the world. I expresseda world with a big heart shape in the middle, full of love, and people withdifferent skin tones and hair colors. All people are connected throughtheir smiles. I had a lot of fun while drawing.
Paralym Art | About Risa Izumi (Japanese version only)

OnlineMeeting

We invited Ms. Izumi to join us for an exchange meeting to express
our gratitude for her wonderful artwork. Ms. Izumi shared herthoughts on the artwork (as stated above). It was an extremely
meaningful opportunity.

Ms. Izumi is the second person from the right in the top row

Publisher’s Note

TOPIX

March 2018

Paralym Art

Meiji Holdings Co., Ltd. supports thisproject as a Gold Partner

150

0March 2017

“Smiles for People Around the World” by Risa Izumi* Individuals and Others includes treasury share.

Stock Price and Trading Volume(index)Paralym Art Artwork

March 2019

March 2020

March 2021

0March 2022

Thank you for reading the Meiji Group Integrated Report 2022.
We have included sections on human capital and intellectual capital for the firsttime in this fifth issue of our integrated report. This is in response to growinginterest in non-financial information and intangible assets.
In the human capital section, we introduced the activities of the Group Human
Capital Committee that was newly established in April 2022. We also disclosed
information on employee engagement. In the three-way discussion with Outside
Directors and an Outside Audit & Supervisory Board Member, we asked them to talkabout the Group’s ideal human capital management. We used Paralym Art artwork
for the cover of this report, reflecting the Group’s commitment to D&I.
In the intellectual capital section, we explained the unique intellectual property
strategies of the Food and Pharmaceutical segments, including case studies.
We hope that this report will help our stakeholders to deepen theirunderstanding of the Group. We will continue to strive to enhance information
disclosure as well as transparent and fair dialogue. We are looking forward toreceiving honest opinions and feedback.

Masashi Tanaka
General Manager,
Corporate Communication
Department,
Meiji Holdings Co., Ltd.

Meiji Holdings Co., Ltd.｜Integrated Report 2022 91

2-4-16, Kyobashi, Chuo-ku, Tokyo 104-0031, Japan
https://www.meiji.com/global