August 2024
Sysmex Corporation
ESG Additional Report
CONTENTS
１. Sustainability Management
２. Providing Responsible Products and Services
３. Creating an Attractive Workplace
４. Environmental Management
５. Governance

About ESG Additional Report
Sysmex has already disclosed the results of sustainability activities in FY2022 in the “Sysmex Sustainability Data Book 2023.” This reportcompiles additional information on ESG.
■Sysmex Sustainability Data Book 2023: https://www.sysmex.co.jp/en/csr/report/sustainability2023_all_e.pdf

1１. Sustainability Management
1.3.1 Materiality Analysis
Sysmex identifies materiality (priority issues) and verifies the related content regularly, aiming both to achieve sustainable growth of theCompany and to bring benefits to society.
Conventional materiality is an analysis of the importance of stakeholders and Sysmex on two axes. It was first identified in 2017. To make ourprogress more visual and effective, we set specific targets and KPIs in line with the mid-term management plan as “non-financial targets.”(These were renamed “sustainability targets” in fiscal 2021.) We also developed action plans and activities for the responsible divisions. We
reviewed this content in 2021 in tandem with the formulation of our mid-term management plan.
In formulating a new long-term vision and corporate strategy, we have determined that it is important to make our way forward that is consistent
with our long-term corporate strategy, mid-term management plan, and materiality. Also of significance is the acceleration of our sustainability
management. We must take into account the expansion of our business domains and the increasingly diverse and complex social environment
we face. We believe that this will help improve our execution capabilities, promote dialogue, and facilitate understanding both within and outsideof the Company.
As an approach to re-identifying materiality, we took a backcast design approach based on conventional materiality. First, along with the longterm management strategy, we analyzed social and environmental trends as well as industry trends up to 2033. We then organized them aschallenges for achieving our long-term vision. Moreover, we identified the SDGs that Sysmex should prioritize from the perspective of theirimpact on social and corporate value. Based on these prioritized SDGs, we identified 14 material items in five fields with the approval of theManaging Board.
Furthermore, we have utilized the new materiality as a basis for fundamental strategy and to set key performance indicators in our long-term
corporate path forward. We have also integrated our core strategy with our mid-term management plan and sustainability targets, creating astyle for the value creation that Sysmex aims to achieve.
The results of strategic execution and attention to sustainability targets are periodically reported by each division to the Managing Board andat management meetings twice per year, and progress is checked by the board.
In line with the progress of our strategies and changes in the environment, Sysmex will continue to provide value by regularly verifying andreviewing materiality.
2２. Providing Responsible Products and Services
1.11.1 Product Recalls
Number of Class Ⅱ recalls (or equivalent)

FY 2020

FY 2021

FY 2022

FY 2023

3

2

4

2

FY 2020

FY 2021

FY 2022

FY 2023

1

1

1

１

*There’re no Class I Recalls (or equivalent).
Regulatory agency inspections
Number of inspections* We did not receive any Form 483s (or equivalent) in the last four years.

1.7 Supply Chain Management
Reinforcing Structures for Maintaining and Enhancing Quality
At factory sites, we conduct regular quality audits and monthly monitoring of manufacturing processes and supplier conformity to ensure
quality. We appropriately instruct and support suppliers with high nonconformity rates to improve their quality. In addition, our global quality
complaint processing system allows us to gather quality information in a timely manner from markets around the world. When we receive
information about a problem or malfunction, we immediately investigate the cause and cease distributing the product in question. If we needto take any corrective or preventive actions regarding a problem or malfunction, we promptly plan such actions in accordance with theGroup’s regulations, carry out the plan, and later verify the validity and effectiveness of the actions taken.
Sustainable Procurement Structure
Sysmex provides accurate test results and sound security by delivering high-quality products to the world. We ensure a stable supply of products
and services based on our social mission to support healthcare. Strengthening supply chain management has been identified as a materiality,3and Senior Executive Officer Mitsuhisa Kanagawa has been placed in charge of overseeing risk management for the entire supply chain. He
has been promoting sustainable procurement, beginning with supplier evaluations and the drafting of remedial plans. Furthermore, CSR survey
response rates, the number of training sessions for suppliers, and other factors were set as sustainability targets, and the status of their related
initiatives is reported to the Managing Board semiannually.
Supplier Screening and CSR Surveys
At Sysmex, taking into account the importance of sustainable procurement, we identify significant suppliers through desk assessments on
supplier risk. For significant suppliers that have been identified, we conduct a CSR survey annually and monitor their status of sustainabilityrelated initiatives.
In addition to procurement costs and difficulties in substitution with alternatives, desk assessments also take into account geopolitical risks,manufacturing country risks, and competing risks in securing raw materials for the production of healthcare products* as well as CSR andenvironmental risks (i.e., human rights, labor practices, management of chemical substances in products, and GHG emission responses). In
particular, by rapidly identifying high-risk materials, we avoided major supply issues amidst the COVID-19 pandemic and the dispute in Ukraine
from 2020 to 2023, providing a stable supply of diagnostic reagents to our customers.
For CSR surveys, we use the CSR/Sustainable Procurement Self-Assessment Tool developed by Global Compact Network Japan. This covers
a wide range of issues such as human rights, labor practices (including the health and safety of employees), corruption, and the environment.
We do not conduct business with new partners having inadequate CSR initiatives. In addition to CSR surveys, we hold management interviews
with new business partners, and we undertake the same sort of initiatives for overseas partners. In particular, personnel in charge ofprocurement make local visits to determine the status of child labor and workplace environments in order to confirm that no problems exist.
Furthermore, we review CSR survey results with buyers during the annual evaluation of business partners and ensure that supplied parts comefrom business partners with low-risk levels in the CSR surveys. We have been implementing CSR surveys of business partners since 2013 andof secondary business partners since 2021 with the support of our primary business partners.
Each Group company also conducts regular surveys of its business partners. Sysmex Europe implements CSR surveys of all new business
partners regarding human rights and green procurement. Jinan Sysmex Medical Electronics holds quarterly meetings with its business partners
to assess risks, in addition to environmental and occupational health and safety surveys. Sysmex Wuxi encourages its business partners tostrengthen their environmental and safety management when carrying out periodic risk assessments.
4*Responses for Each Type of Risk
Geopolitical risks: Surveys were conducted for products manufactured in Europe at the onset of the dispute in Ukraine and for products
manufactured in South Korea and northern China when North Korean risk was rising.
Manufacturing country risk: Surveys were conducted for diagnostic agent containers and disposables, leading to procurement from various
countries.
Competing risks in securing raw materials for producing healthcare products: Surveys were conducted for glass bottles, rubber stoppers,
biochemical buffering agents, raw materials for PCR, and raw materials for cultivation.
▶ Flowchart of New Supplier Assessment ※Please refer to the appendix of this report.
▶ KPIs for Supplier Screening ※Please refer to the appendix of this report.

Results of CSR Surveys
The response rate for surveys of primary raw material suppliers conducted in FY2023 was 95%, meaning that the previous fiscal year’s highresponse was maintained. We also analyze the results of the CSR surveys from the previous fiscal year and provide feedback to business
partners included in the surveys. By disclosing the average scores of the companies in the same raw materials category, our business partners
can identify their strengths and weaknesses. For items with existing risks, we encourage corrective action and carry forward improvement
activities together.
CSR On-Site assessment and Cooperation for Supplier’s CSR Initiatives
Sysmex conducted on-site assessments of four primary suppliers in FY2023 to further strengthen suppliers’ risk management. In addition, withcooperation from Tier 1 suppliers, we expanded our CSR surveys of Tier 2 suppliers. During the four years since FY2020, we have conducted
CSR surveys of 96 Tier 2 suppliers.
In conducting these surveys, we shared our knowledge regarding our survey format and aggregation tools with Tier 1 suppliers. Using the same5

format, we seek to reduce the burden on the Tier 1 suppliers through our CSR surveys.
Improving the Quality of Supplied Parts and Raw Materials
Sysmex provides a quality assurance agreement that clearly states our requirements for the quality of goods and concludes agreements withbusiness partners after confirming their understanding of our procurement policy. We perform quality assessments of supplied goods and auditsof business partners regularly to ensure that proper quality control is being carried out.
Conducting Briefing Sessions and Meetings for Suppliers
Sysmex strives to strengthen its relationships with trading partners by holding annual briefing sessions for our suppliers to ensure theirunderstanding of our business and procurement policies. At the FY2022 CSR briefing session, we introduced examples of CSR initiatives ofother companies to encourage initiatives that are in line with a single company’s size. In FY2023, we hosted a briefing session for suppliers to
explain our newly formulated long-term corporate vision, supply chain policies, and eco-social strategies. The session was well attended, withapproximately 250 companies and 500 people.
We also hold regular meetings with overseas business partners to strengthen collaboration. Sysmex Europe periodically holds meetings withall of its business partners to check their compliance with Sysmex’s environmental and social responsibilities, as well as details of businessactivities. Sysmex Malaysia holds monthly meetings with local distributors to discuss customers’ needs and issues, aiming to improve productquality and customer satisfaction.
Compliance with Procurement-Related Legislation and Training for Persons in Charge of Procurement
Sysmex uses an electronic procurement system to prevent undue price reductions and product returns. In October 2020, we announced adeclaration of partnership building and have been working to increase added value across the entire supply chain. Additionally, in observanceof desirable transaction practices between large procuring enterprises and subcontractors (promotion standards based on the Act on the
Promotion of Subcontracting Small and Medium-sized Enterprises), we are proactively taking initiatives to correct transaction and businesspractices that hinder the building of partnerships with business partners.
To enable this, the procurement departments at our domestic Group companies receive training related to the declaration of partnership building,the Subcontract Act, and the roles of companies placing orders in CSR activities. For new employees to the department, we conduct training
6

on procurement policies, CSR procurement, and procurement risk.
Initiatives for the Optimization of Working Hours for Transportation and Logistics WorkIn response to the Work Style Reform Law for transportation and logistics work, which came into effect on April 1, 2024, for transportation andlogistics work, we stopped shipping normal temperature reagents and consumable goods on the same day as the order and have changed toshipping the day after the order is received. Through these efforts, we proactively address the so-called “2024 problem in logistics,” such as
eliminating the cargo waiting time that leads to overwork by truck drivers.

３. Creating an Attractive Workplace
3.1.2 Workforce Breakdown: Gender
Diversity Indicator

Percentage

Public Target

Share of women in total workforce (as % of total workforce)

41.5

-

Share of women in all management positions, including junior, middle and top

19.2

Over 20%

management (as % of total management positions)Target year: FY2025

Share of women in top management positions, i.e. maximum two levels away from the

13.5

-

CEO or comparable positions (as % of total top management positions)*FY2023
3.1.3 Workforce Breakdown: Race/ Ethnicity & Nationality
Race

Share in total workforce

Share in all management positions,(as % of total workforce)

including junior, middle and senior
management (as % of total management
workforce)

WHITE

62.5

72.6
7

HISPANIC OR LATINO

16.4

8.8

ASIAN

11.7

12.8

BLACK OR AFRICAN AMERICAN

7.1

4.8

*FY2023, coverage: U.S.A
3.1.4 Gender Pay Indicators
Employee Level

Average Women Salary

Average Men SalaryManagement level (base salary only)

7,598,000

8,024,000

Management level (base salary + other cash incentives)

11,695,000

12,442,000

Non-management level (base salary only)

3,846,000

4,343,000*Fy2023, coverage: Sysmex corporation
3.1.5 Freedom of Association
Sysmex respects employee rights, such as the right to form a union and the right to collective bargaining, based on its participation in the UN
Global Compact and support for the ILO’s Core Labor Standards.
As of March 2024, 63% of Sysmex Corporation employees were members of the Sysmex Union, our in-house labor union. Sysmex Corporation
engages in collective bargaining with the Sysmex Union every year. In FY2023, in addition to regular meetings, labor and management met to
discuss productivity improvement through optimizing working hours and streamlining operations. We also examined the personnel system andthe diversity of the employees in our working environments. We considered responses to working environment changes and the measures topromote our status as a “healthy company.”

3.3.1 Training & Development Inputs
Average amount spent and average hours per FTE of training and development
44,541 yen / 24.4 hrs
8* FY2023, coverage: consolidated

3.3.2 Employee Development Programs
Training Programs Tailored to Individuals
Sysmex Corporation has a human resource development division in the corporate management domain managed by the members of theManaging Board, senior executive officers, and senior managing directors. To respect diverse working styles and values, this division offers awide range of learning programs that help employees develop business skills and build career plans based on their aspirations.
Employees can even join some of the programs across national borders through the availability of online courses for learning from home. In
fiscal 2023, all employees participated in one of these conducted training programs. The benefits include the growth of individual employees
and enhanced productivity through skill improvement and exchanges between participants, resulting in better mutual understanding and crossfunctional networks. (Investment in training in fiscal 2023: 83,000 yen per employee.)
Our Corporate Culture Survey indicates that most of the employees support these training programs; 64% of them provided positive responses,
noting that they were offered opportunities for growth through such programs. Sysmex Corporation also supports continuous learning by
employees of all ages and ranks. Our “smart work” system, intended to facilitate diverse working styles, encourages employees to spend 15
minutes of their daily working hours on self-study. During fiscal 2023, our employees spent an average of 55.3 hours on learning.
*These programs aim to retain new members, including recent graduate hires and mid-career hires, and to develop them as valuable members.

Development of Next-Generation Leaders
Developing next-generation leaders is crucial to Sysmex’s human capital strategy for enhancing sustainable corporate value. Since theintroduction of a job-based personnel system, we have conducted talent reviews to measure differences between the desired and actual rolesof each position. We have also regularly monitored the sufficiency of our talent pool and the availability of successors for senior positions.
For the candidates chosen as successors, we formulate development plans to address individual issues and offer necessary leadershipdevelopment programs. Among these programs, a selective leadership program for employees with the status of being “ready to be a successor”
9

provides them with opportunities to think from a leader’s perspective, facilitating their promotion to higher positions. In fiscal 2023, on-board
training* was undertaken by a total of 2,662 employees, while selective training (for candidates chosen as successors) was undertaken by atotal of 157 employees.
In fiscal 2023, we restarted global training, which had been suspended due to the COVID-19 pandemic, promoting our cross-regional and crossborder efforts to develop global leaders.
*This program aims to retain new members, including recent graduate hires and mid-career hires, and to develop them as valuable members.

3.3.3 Human Capital Return on Investment
FY 2020

FY 2021

FY 2022

FY 2023a) Total Revenue

305'073'000'000

363'780'000'000

410'502'000'000

461'510'000'000b) Total Operating Expenses

102'510'000'000

123'169'000'000

142'403'000'000

164'114'000'000c) Total employee-related expenses

72'196'000'000

81'989'000'000

96'959'000'000

113'311'000'000

3.80574

3.93467

3.765083.62461

8'445

8'771

9'500

10'042(salaries + benefits)
Resulting HC ROI (a - (b-c)) / c
Total Employees
Unit: yen
3.3.4 Hiring
FY2020Total number of new employee hires
Percentage of open positions filled

by internal

candidates (internal hires) **Ratio of director level or above

10

FY2021

FY2022

FY2023

140

149

213

226

100

96

95.6

96.2

3.3.5 Type of Performance Appraisal
Evaluations and Commendations to Encourage New Attempts and Recognize Achievements
At Sysmex Corporation, we have introduced an evaluation system incorporating the concept of continuous performance management (CPM)
to achieve agile responses to changes in the internal and external environment in times of drastic transformation. This system encourages
employees to take on challenges by flexibly reviewing their targets and actions in response to changes, without sticking to the original targets
that they set at the beginning of the term. We evaluate them based on a point-addition system. It assesses not only individual performance but
also organizational culture, human resource development, and team performance, aiming to promote employee contributions to our businessand the growth of individuals and teams. Employees regularly have one-on-one meetings with their supervisors throughout the year. Thesemeetings provide them with opportunities to discuss day-to-day operations and career development, as well as goal setting and evaluation.
They assist with individual growth and build mutual trust. In our semiannual Corporate Culture Survey, we assess our employees’ level ofconfidence in leadership to develop future leaders and improve our organizational culture.
Additionally, our Group CEO Award is given to recognize divisions and teams. It annually honors individuals and teams that contributesignificantly to the enhancement of corporate value and that address social issues by practicing the Sysmex Way, our Group corporate
philosophy. In line with the establishment of our long-term corporate strategy VA33 and the refinement of our corporate philosophy, we launched
the “Challenge and Anshin Award” in fiscal 2023. This award recognizes excellent contributions in five categories (patent and idea, eco-social,sales and service, quality, and operation). To motivate R&D engineers and heighten awareness of intellectual property, we have also introduced
the Patent Meister designation and the Filing Commemoration Prize.

3.3.7 Employee Support Programs
Supporting a Balance between Work and Child-Rearing
Sysmex Corporation has introduced several programs to provide family support, from prenatal care to child-rearing. These programs include
leave for parenting, fertility treatment or morning sickness, a spouse’s childbirth, and the nursing of children. When childcare leave expires after
an employee’s child turns two years of age, employees are entitled to reduced working hours and a work-from-home program until the childenters junior high school. We support employees returning to work after childcare leave, including with seminars before their return, as well as
11

distribution of newsletters (including the Diversity Newsletter) to employees on childcare leave. Technopark, our R&D site, has an in-house
daycare center called Sysmex Kids Park. It is also available for temporary use when employees’ spouses work part-time, children’s guardians
are sick, or an employee is arranging a funeral. Through such support, we encourage all employees who desire to return to work after childcare
leave to do so.
In recognition of such initiatives, we have received next-generation support certification (with a logo nicknamed “Kurumin”*) as a “company that
supports child-rearing” from the Ministry of Health, Labour and Welfare. In fiscal 2023, we were also selected as a “Next Nadeshiko: Companies
Supporting Dual-career and Co-parenting” by the Ministry of Economy, Trade and Industry and the Tokyo Stock Exchange. This program
recognizes companies that make particularly outstanding efforts to support dual-career and co-parenting.

3.3.8 Employee Turnover Rate
FY 2020

FY 2021

FY 2022

FY 2023

Total employee turnover rate

2.9％

3.16％

3.37％

2.74％

Voluntary employee turnover rate

2.39％

3.04％

2.57％

2.38％

3.3.9 Trend of Employee Wellbeing
FY 2020
Employee Engagement

FY 2021

FY 2022

FY 2023

66％

65％

71％

FY 2021

FY 2022

FY 202375％

3.4.3 Fatalities
FY 2020
Employees

0

0

0
12

FY 2023 target

０75％

Contractors

0

0

0

０

3.4.4 Lost-Time Injury Frequency Rate (LTIFR) – Employees
FY 2020

FY 2021

FY 2022

FY 2023

LTIFR

0.78

0.91

0.81

0.78

Data coverage

25.8

25.8

26.8

26.9

*There were no work-related deaths (in fiscal 2023).

４. Environmental Management
2.6.1 Biodiversity Risk Assessment
Interfacing with Nature and Protecting Biodiversity
Sysmex benefits greatly from the world’s living things in its business activities. We use a tool called ENCORE, which was developed by theUnited Nations and financial institutions, to conduct quick risk analysis. The results have suggested that our production process depends onwater and impacts water quality and soil to a relatively large extent. Based on the results, we will identify our business risks and opportunities
and take necessary action.

2.7.2 Life Cycle Assessment
Development of Non-Animal-Derived Products (Biodiversity Considerations)
To reduce the use of natural resources, Sysmex Corporation has established a method of producing animal-derived proteins that can be
deployed for diagnostic agents. The technique uses silkworms or cultured cells. In the past, producing these substances consumed a great
deal of energy. However, as silkworms can be raised indoors and only need to be fed artificial food in containers, we can ensure a stable supply
and quality of the substances. We are also able to save energy and reduce carbon dioxide emissions, water consumption, and waste discharge.
We use genetically modified proteins produced from silkworms as ingredients for a reagent for hemostasis tests launched in fiscal 2017. This13

is the first reagent in Japan using genetically modified proteins as ingredients that has obtained manufacturing and marketing approval.
To quantify the environmental impact of the change in the production method, we conducted a life cycle assessment jointly with Professor
Norihiro Itsubo of Tokyo City University (currently working for Waseda University). The assessment confirmed that the new process reducescarbon dioxide emissions by more than 50 percent compared with conventional methods.

2.5.1, 2.5.2 Greenhouse Gas Emissions (Scope 1,2)
Fy22

Fy23

Scope 1

13,986

13,925

Scope 2

15,200

6,707

99

99

Data coverage (%)

2.5.3 Greenhouse Gas Emissions (Scope 3)
Fy22

Fy23

1. Purchased Goods and Services

202,046

190,948

2. Capital Goods

103,273

124,569

3. Fuel-and-energy-related-activities (not included in Scope 1 or 2)

9,734

7,699

4. Upstream transportation and distribution

87,27069,164

5. Waste generated in operations

4,588

5,648

6. Business travel

1,084

1,197

7. Employee commuting

2,352

2,595

6,911

6,916

8. Upstream leased assets
9. Downstream transportation and distribution
14

10. Processing of sold products
11. Use of sold products

154,796

139,649

12. End of life treatment of sold products

15,491

15,79531

10587,575

564,191

13. Downstream leased assets
14. Franchises
15. Investments
Other upstream
Other downstream
TOTAL

５. Governance1.2.15 CEO-to-Employee Pay Ratio
Total CEO Compensation︓243,000,000 yen
Employee Compensation︓8,743,000 yen
The ratio between the total annual compensation of the CEO and the mean employee compensation: 27.8
https://www.sysmex.co.jp/en/corporate/governance_e.pdf (p16)rep_202406.pdf (sysmex.co.jp) (p11)*Fy2023
1.4.1 Risk Governance, 1.4.2 Risk Management Processes
Risk Management Structure
Promoting Risk Management by Establishing a Dedicated Committee
Sysmex established the Internal Control Committee to supervise the Group’s risk management as a whole. The Internal Control Office, anorganization independent of business divisions and under the President’s direct control, functions as the Committee’s secretariat. Chaired by15

the President, the Committee consists of the Chairperson, relevant executive officers, and full-time Audit and Supervisory Committee members.
There are also outside members of the Managing Board who serve as observers.
The Committee analyzes and assesses the levels of risks involved in such areas as fair trade, compliance (including corruption and businessethics), human resources, occupational health and safety, the environment, and accounting and finance (including tax payments), from such
viewpoints as possible impacts and likelihoods. By annually assessing such risks, the Committee identifies those significantly affecting theGroup’s operations and implements necessary countermeasures. In addition, relevant committees, including the Compliance Committee aswell as individual divisions and subsidiaries, manage operational risks and periodically report on them to the Managing Board. When a majorrisk that has a significant impact on the Group’s business arises, they also report it to the Managing Board to discuss how to respond, following
the PDCA cycle. The Internal Audit Office conducted an internal audit of Group-wide risk management in fiscal 2023. Furthermore, our risk
management structure is annually assessed by a third party as part of our internal controls.
The process of developing new products includes a risk assessment. A response plan for an identified risk is integrated into each division’s
action plan, and the progress of the response plan is linked to employee compensation.

1.5.4 Codes of Conduct: Systems/ ProceduresCompliance Promotion Structure
Sysmex considers compliance violations to be the most serious type of risk that could damage the trust that society places in us. Under theGroup-wide risk management structure, we have established a Compliance Committee as an umbrella organization to promote and enhancecompliance.
The chairperson of the Compliance Committee works to ensure compliance throughout the Group as the Chief Compliance Officer. Under theGroup-wide policy, each Group company has appointed its own compliance officer to uphold compliance. The Compliance Committee monitors
Group-wide compliance promotion activities and their progress. We also conduct an annual internal audit of compliance based on risk
assessment results. In fiscal 2023, we audited our compliance with the Subcontract Act, the Labor Standards Act, and other laws and regulations.
Furthermore, our compliance promotion structure is annually assessed by a third party as part of our internal controls.
In the event of a major or potential compliance violation that would significantly affect the Group or a Group company, the compliance officerof the relevant company will immediately notify the Chief Compliance Officer. After receiving this report, the Chief Compliance Officer will16

proceed to report on the event to the Internal Control Committee, chaired by the President, and members of the Managing Board and Audit &Supervisory Committee. We will also disclose information on events that require it in accordance with information disclosure regulations.
There were 15 ethics incidents in FY2023, but no serious violations.
Integrity (the ethical standards and proper judgment between right and wrong expected from individuals and team members) is one of themetrics for managing goals. Integrity assessment is linked to individual compensation.

17

3.2.2 Human Rights Due Diligence Process
Identifying Risks to Human Rights (Human Rights Due Diligence)Sysmex stipulates the implementation of human rights due diligence in the Global Compliance Code and the Human Rights Policy. Sysmex
identifies the impact on human rights of business activities within the Company and across the supply chain, and it works to prevent or mitigate
any negative impacts. Specifically, we have incorporated into CSR surveys of our business partners such topics as the prohibition of forced andchild labor, elimination of discrimination due to gender, disability, race, or other factors, the prohibition of human trafficking, the freedom of
association, and the right to collective bargaining. To ensure that Sysmex is not involved or complicit in human rights abuses through ourbusiness activities or transactions with business partners, we ascertain impacts on human rights in advance and put in place measures toprevent any abuses. With the UK Modern Slavery Act having gone into effect in 2015, Sysmex UK has published a related statement on its
website and operates in full compliance with the act.

3.6.5 Ethical Marketing - Complaints Tracking
Complaint type

Number of complaints in FY 2023

Upheld regulatory complaints

0Upheld self-regulatory complaints

0

1.8.1 Tax Strategy and GovernanceTax Strategy
Sysmex has established a “Tax Strategy” in the Global Compliance Code approved by the President with the aim of increasing tax-relatedtransparency. We will appropriately pay taxes according to the spirit of the law and contribute to the economic development of each country
and region where we pay taxes. In transactions with foreign affiliates, we appropriately calculate transfer prices and pay taxes in the relevant
countries in accordance with the OECD Transfer Pricing Guidelines and the transfer pricing laws of such countries. We will not transfer created18

value to lower tax jurisdictions, such as tax havens, only to gain a tax advantage or engage in inappropriate tax planning that is not consistent
with our business purposes by abusing a tax system that lacks substance.
In addition, we disclose Group payments of taxes in our securities reports and other documents, as well as the reasons for any discrepancies
from relevant statutory tax rates.
The Internal Control Committee, chaired by the President, is our governance body responsible for monitoring sustainability risks andopportunities, including tax risks. Important matters related to such risks and opportunities are reported to and, if necessary, discussed by theManaging Board.

1.9.1 IT Security/ Cybersecurity Governance
Information and Cybersecurity Initiatives
Sysmex established the Global Information Security Committee in May 2023 to further enhance Group-wide information security management.
We have formulated the Information Security Policy and established a Group-wide information security management framework as well asprotect our information assets from threats and work to ensure our business continuity under the supervision and management of the Information
Security Officer, Kenji Tachibana*, a member of the Managing Board, a senior executive officer, and a senior managing director.
*Career summary:
April 2017: Member of the Managing Board, Senior Executive Officer, and Senior Managing Director
April 2021: Member of the Managing Board, Senior Executive Officer, and Senior Managing Director (in charge of DX strategy) (the present
post)
April 2023: Chairperson of the Information Security Committee (Information Security Officer)

19Appendix
1.7.4 Supplier Assessment and Development
Flowchart of New Supplier Assessment
Candidate Selection
Candidate Selection

1. Initial Verification
Initial Verification /Document Review

2. Document Review

Management

CSR Surveys

Quality Management

On-Site Inspection
Interview withmanagement:

3. Results
Deliberatio
Quality audit:
Quality Control
Department

1. Interview withManagement

2. Quality
Audit• Status of management/various controls• Status of CSR initiatives

Final Deliberation

Final
Deliberation

Approved

Not
Approved

Not Approved (*) Approved20

1.7.5, 1.7.6 KPIs for Supplier【KPIs for Supplier Screening】
Supplier Screening

FY 2023

Total number of Tier-1 suppliers*243

Total number of significant suppliers in Tier-1

68% of total spend on significant suppliers in Tier-1

61

Total number of significant suppliers in non Tier-1

0

Total number of significant suppliers (Tier-1 and non Tier-1)

68* This applies to suppliers of raw materials for our products.
【KPIs for Supplier Assessment and Development】
Supplier Assessment
Total

numberofsuppliers

FY 2023

assessed

via

desk

assessments/on-site assessments
Numberofsuppliers

assessedwithsubstantial

actual/potential negative impacts% of suppliers with substantial actual/potential negative
impacts with agreed corrective action/improvement plan
Number of suppliers with substantial actual/potential
negative impacts that were terminated

68
4
100
0

21

Corrective action plan support
Total number of suppliers supported in corrective action plan

FY 2023
4

implementation% of suppliers assessed with substantial actual/potential

100

negative impacts supported in corrective action plan
implementation

22