Kyowa Hakko Bio
CSV PROGRESS REPORT 2024

Published June 2024

BY THE NUMBERS
Kyo w a H a k k o Bi o

Sales bases
Japan, the United States,
Germany, Italy, China,
Singapore

Production bases
Japan, the UnitedStates, China,
ThailandNet sales

Number of employees

Approx.
¥51.4 billion

Percentage ofSales composition

Domestic
Approx.

46%

Corporate name987
Domestic 1,086
Overseas

Overseas
Approx.

54%

24.7%
Female managers 19.7%
Female employees

Kyowa Hakko Bio Co., Ltd.

Established

October 1, 2008

Address ofhead office

NAKANO CENTRAL PARK SOUTH, 4-10-2 Nakano,
Nakano-ku Tokyo 164-0001, Japan

Description ofbusiness

Manufacture and sale of pharmaceutical raw materials, amino acids,
and healthcare ingredients

Parent company

Kirin Holdings Company, Limited

Capitalization

10, 000 million Japanese yen

TOP MESSAGE
Kyowa Hakko Bio, as a member of the Kirin Group, is a global leader in CSV
that leverages advanced biochemical technologies to resolve global social
issues.
The Kirin Group has formulated its CSV Purpose as a set of
guidelines for the following four key issues: “A Responsible Alcohol
Producer,” “Health and Well-Being,” “Community Engagement,” and “TheEnvironment” (as of June 2024). Among these four issues, the Kyowa
Hakko Bio Group is particularly focusing on “Health and Well-Being” and“The Environment.” Especially with regard to “Health and Well-Being,”
we recognize that our role as a company in the health science businesspresents an opportunity to deliver functional health materials andpharmaceutical raw ingredients to customers / patients around the world,
thereby creating both social and economic value. In 2023, we expanded
our capabilities with a new facility for Human Milk Oligosaccharides (HMOs), in addition to our existing aminoacid plant, enabling us to offer products to customers worldwide. Furthermore, advancements are being madein evaluating the health benefits of our flagship product, Citicoline, for applications beyond brain health andefforts are proceeding to expand production capacity. Through these initiatives, we anticipate that in 2024 andbeyond, we will be able to reach an even larger global customer base with our proprietary materials, thereby
contributing more than ever to people’s health and well-being.
Simultaneously, we are continuously advancing initiatives to address societal issues such as theenvironment and human rights across every stage of the value chain, from raw material procurement toproduction and sales. In response to climate change, we have set GHG emission reduction targets, and in 2023,
we achieved a 47% reduction in Scope 1 and 2 emissions compared to 2019. We will continue to take measures
as a group, one step at a time. We are also implementing analytical methods to visualize the environmental
impact, including GHG emissions, generated throughout the value chain. These results will be used to develop
new fermentation, purification, and manufacturing technologies that are even more environmentally and peoplefriendly. Furthermore, we believe that addressing social demands such as human rights and environmental
concerns with our business partners is essential, and we have initiated efforts to foster mutual understanding
in these areas. Kyowa Hakko Bio Group’s CSV is built upon the cumulative actions of everyone involved in our
corporate activities, which is no less than the sum of our day-to-day operations. Therefore, we are committed tocreating a healthy and rewarding work environment that enhances each employee’s sensitivity to our customers
and society.
The Kyowa Hakko Bio Group’s vision is to contribute to people’s health by delivering our materials to as
many individuals across the world as possible. To achieve this, we will further refine our business capabilities,
which are based on the fermentation and purification technology we have developed over many years, byleveraging diverse talent and organizational collaboration. This approach will enable us to create new value andexceed the expectations of all stakeholders.

Koji Fukada
President and Chief Executive Officer,
Kyowa Hakko Bio Co., Ltd.

1

About This Report
Table of Contents
1

Top Message

2

About This Report3The Kyowa Hakko Bio Group’s Purpose(Contributing to the Health and Well-Being of People)

Editorial Policy

In putting together CSV Progress Report 2024, we focused on conveying the efforts of the Kyowa
Hakko Bio Group, primarily centered around FY2023, in a clear and understandable manner in order todeliver assurance and trust to all stakeholders involved in our business activities.

Reporting Period

Date of Publication

FY2023 (January to December 2023), with someinclusion of periods immediately before and after.

June 2024

4

Materiality for CSV Promotion

5

CSV Management

Organizations Covered by the Report (FY2022)

Reference Guidelines

6

Kyowa Hakko Bio Group’s CSV Commitments

7Compliance and Corporate Ethics

In putting together this report, we referenced global
standards such as the Global Reporting Initiative (GRI).

8

 roduct Stewardship: Responsible ProductP
Management

9

The Environment (Vision and Policy)

Kyowa Hakko Bio Co., Ltd.
Kyowa Pharma Chemical Co., Ltd.
BioKyowa Inc.
Shanghai Kyowa Amino Acid Co., Ltd.
Thai Kyowa Biotechnologies Co., Ltd.
Kyowa Hakko U.S.A., Inc.
Kyowa Hakko Europe GmbH
Kyowa Hakko Bio Italia S.r.l.
Kyowa Hakko Bio Singapore Pte. Ltd.
Kyowa Hakko (Guangdong) Pharmaceutical Co., Ltd.

10 The Environment (Climate Change)
11 The Environment (Water Resources, Biological
Resources, Containers and Packaging)

12	The Environment (Pollution Prevention, Waste andChemical Substance Management)

13 Promotion of Sustainable Procurement14	Respect for Human Rights
15 A
 chieve Sustainable Growth with
Diverse Human Capital
16 Ensuring Occupational Health and Safety
17 Community Engagement
18 Third-Party Evaluations
19	
Kyowa Hakko Bio Group’s Sustainability Data

Department Responsible for Publication
CSV Promotion Team, Corporate Strategy Department,
Kyowa Hakko Bio Co., Ltd.
Contact:
http://www.kyowahakko-bio.co.jp/english/contact/

The above companies will collectively be referred to as “the Kyowa
Hakko Bio Group” in this report.

Locations of Related Corporate Information Disclosure
The Kyowa Hakko Bio Group’s corporate information is also available on our website.
Corporate Information http://www.kyowahakko-bio.co.jp/english/
As a member of the Kirin Group, the Kyowa Hakko Bio Group shares common policies, purposes, and goals, actively
engaging in the practice of CSV. Information pertaining to our CSV reporting can be found on the following pages of theKirin Group's website.
Kirin Holdings, Impact https://www.kirinholdings.com/en/impact/
Kirin Holdings, The Environment https://www.kirinholdings.com/en/impact/env/
Kirin Group, Environmental Report https://www.kirinholdings.com/en/investors/library/env_report/
Kirin Holdings, Investors https://www.kirinholdings.com/en/investors/
Kirin Group, Integrated Report https://www.kirinholdings.com/en/investors/library/integrated/
Kirin Holdings, Policies https://www.kirinholdings.com/en/impact/csv_management/various_policies/

2

The Kyowa Hakko Bio Group’s Purpose

Related Article: Kirin Holdings “Health Science Domain”(Contributing to the Health and Well-Being of People)
As a Member of the Kirin Group
Under the vision of “A global leader in CSV*, creating
value across our world of Food & Beverages to
Pharmaceuticals,” the Kirin Group is reinforcing its
presence in the health science domain.
At the center of this endeavor in the health science
domain is the Kyowa Hakko Bio Group, which aims to bea “Japan-based global specialty fermentation company.”*CSV (Creating Shared Value)
Creating shared value is the practice of creating economic value in a
way that also creates value for society by addressing its needs andchallenges as the next driving force for growth.

The Kyowa Hakko Bio Group’s business domains
at the center of the Kirin Group’s health science strategy

The Kyowa Hakko Bio Group’s Purpose
The Kyowa Hakko Bio Group provides naturallyderived fermentation technology-based materials
for pharmaceutical and healthcare fields, as well as
science-driven solutions to customers worldwide.
Through rigorous quality management, we ensure
reliability and place a strong emphasis on social
responsibility and environmental awareness.
Leveraging our long-standing technological expertiseand innovative thinking, our mission is to contribute to
the health and well-being of people around the world.
Management Philosophy

We strive to contribute to the health and well-being of people
around the world by creating new value through the pursuitof advances in life sciences and technologies.

VISION

Leverage our advanced biochemical technologies to resolve
global social issues. Contribute to the achievement of healthand a sustainable society.

“One KIRIN” Values
As a member of the Kirin Group,
we value “Passion. Integrity. Diversity.”

What Is the Health Science Domain?
Through many years of research into natural ingredients,
cells, and microorganisms, the Kirin Group has
succeeded in discovering numerous materials that
contribute to health and well-being. The Health Science
domain will utilize these unique materials to address thesocial issues of health and well-being.

Passion Our determination to continuously provide ourcustomers and society with new value propositions basedon innovative ideas, and our enthusiasm to meet goals withpride in the companies we work for and the brands we offer.
Integrity Our gratitude to our stakeholders for always
helping us move forward, and our promise to remain honest
and humble in every business activity to serve them better.
Diversity Our respect for different perspectives and values
that enable constructive discussions, and our belief that the“differences” have the power to change the world and create
better solutions.

Through Products That Bear Closely on the
Needs of Society
We provide our customers with high-quality materials andscience-based solutions.
Main Products

For details

Active Pharmaceutical Ingredients• Amino acids (L-Arginine, BCAA, etc.)• Nucleic acids (Citicoline*1, etc.)• Alanyl-Glutamine• Tranexamic acid
• Prostaglandins

Application Examples• Health foods• Sports drinks• Infant Formula• Infusions• Pharmaceuticals• Cell culture media, etc.

Healthcare Ingredients• Amino acids (L-Ornithine, L-Arginine,
L-Citrulline, L-Glutamine, BCAA, etc.)• Health Ingredients (Vitamin K2, etc.)

Branded Ingredients for Overseas Markets• CognizinTM (Citicoline*1)
TM• Setria (L-glutathione)• PantesinTM (Pantethine)TM• VELOX (L-Citrulline and L-Arginine)• IMMUSE TM(LC-Plasma)• EYEMUSE TM (L. paracasei KW3110)

IMMUSE™ and EYEMUSE™ are clinically researched
lactic acid bacteria developed by Kirin Holdings Company, Limited.

Global Specialty Ingredients• Human Milk Oligosaccharides (HMOs)*2*1 Citicoline

For details

A substance in the body required for the maintenance of cell membranes
in the brain and nerve cells. In North America, Citicoline is incorporated
into dietary supplements as well as functional foods and beverage forthe purpose of enhancing attention and concentration. In Japan andAsia, it is utilized as a treatment for memory impairments associatedwith conditions such as strokes and traumatic head injuries.

*2 Human Milk Oligosaccharides (HMOs)

For details

HMOs are the general term for complex sugar molecules(Oligosaccharides) that are contained in human breast milk. HMOs
are known to be important nutrient for infants as they are particularly
abundant in human colostrum while being nearly absent from bovine milk.

3

Related Article: Kirin Holdings “Group Materiality Matrix”

Materiality for CSV Promotion

The Kirin Group has formulated the Group Materiality Matrix (GMM), which outlines the key issues that must be addressed in order to sustainably exist and develop together with society.
This GMM also covers the Kyowa Hakko Bio Group’s business and analyzes the impact on stakeholders and the Kirin Group’s business.
In line with this GMM, we have identified priority issues (Materiality) that should be addressed through the business activities of the Kyowa Hakko Bio Group. We plan to review themateriality in a timely manner in response to the interests of our stakeholders and changes in our strategic focus on CSV.

The Kyowa Hakko Bio Group’s Materiality
Ensuring product safety and security
Contributing to people’s health and well-being
through products
Promoting employee health and a vibrant workplace
Contributing to a better environment
Corporate governanceFour Focus Areas Based on Our Vision

Contributing to Sustainable Development

As a long-term plan up to 2027, we have established thefollowing four focus areas under our vision of “Leverage
our advanced biochemical technologies to resolve global
social issues. Contribute to the achievement of healthand a sustainable society.”
We will continue to strengthen our organizationalfoundation and aim for further development and growthunder our new business strategy. We are committed toincreasing our corporate value by achieving both “social
contribution” and “high profitability” as we move toward
an exciting future.

In order to realize the Kirin Group’s CSV management, we
will continuously work on enhancing our technical expertisein the field of fermentation while keeping pace with the
evolving consumer needs and advances in surrounding
technologies and strive to create value that benefits society.
For example, we believe that the impact on natural
resources caused by production using plant- and animalbased raw materials is a major social issue, and we arecollaborating with the Kirin Group’s R&D departments todevelop new products and technologies to address this.

The IV fluids you may get when
you are hospitalized due to illness
or injury. In fact, this infusion
formulation also contains nutritional
ingredients manufactured by us.

Functional ingredients that respondto your desire to give the gift ofenergy to your future self. The
production of these supplement
materials is our specialty.

Process to Select Materiality
Kirin Group’s GMM
Key issues that must be addressed inorder to sustainably exist and develop
together with society

Identifyingsocial issues that
the Kyowa Hakko Bio Groupcan contribute to

Fermentation production technology capability accumulated
through the amino acids business
Microbial breeding technology

Industrialization technology

Environmental technology

Technology development strategy based on the SDGs

Pharmaceuticals

Healthcare

Health andLongevity
SupportInfant HealthIn the era of 100-year life, healthy
life expectancy is attracting
attention. We will promote R&D andcommercialization to support a
longevity society.

Environmentallyfriendly technology

Technology that does
not use marine-derived
materials

Technology that does
not use animal-derived
materials

Raw materials & ingredients

Selecting materiality focusing on areas connected
to key businesses

Approved by Kyowa Hakko Bio Group management
after discussion

In the field of “fermentation,” innovative technology
and ideas that have made the impossible possible

HMOs (human milkoligosaccharides), an advanced
material that is being researched
for its potential function in the
immune system, gut and brain. Our
production supports“infant health.”FooddomainHealth Science
domainPharmaceuticaldomainIn collaboration with the Kirin Group’s R&D departments,
the Kyowa Hakko Bio Group aims to make further
progress by maximizing synergies in the domains ofactive pharmaceutical ingredients, intermediates, andfine chemicals through the organic combination of ourworld-class fermentation technology and Kyowa Pharma
Chemical’s organic synthesis technologies.

4

Related Article: Kirin Holdings “CSV Management”

CSV Management

In 2022, the Kyowa Hakko Bio Group established a CSV Promotion Team within the Corporate Strategy Department to control global CSV activities. The President & CEO of Kyowa Hakko
Bio Group serves as the chief executive for CSV activities, and we are working to solve issues and create a system to promote CSV. In addition, the CSV Promotion Team is responsible for
integrating CSV into our management and business strategies through continuous communication and collaboration with executives and relevant departments.

Kirin Group’s CSV Governance Structure

Kirin Holdings

Monitoring
Oversight

The BoardGroup Executive
Committee

Discussion / Report

Incorporation into theGroup’s overall strategy

The Kyowa Hakko Bio Group is promoting the CSV Commitment as a medium-term action plan to achieve the Group
Materiality Matrix (GMM), which outlines the key issues that must be addressed in order to sustainably exist and develop
together with society, and the CSV Purpose of the Kirin Group by incorporating them into our business plans, including the2027 Long-term Plan (Vision).
The CSV Promotion Team and related departments are responsible for checking the progress of the CSV
Commitment and managing the promotion. We also report quarterly to Kirin Holdings (KH) on the status of plan
implementation, and exchange information and opinions in a timely manner.

Group CSV Committee
Corporate
Philosophy

CSV Staff Meeting

CSV Promotion Team(within Corporate Strategy Department)
CSV Report Meeting
Risk Management
Committee
Environment & Safety
Committee

Domestic
Offices andAffiliates
Overseas
Affiliates

Multiple Stakeholders

Executive Committee

CSV Purpose*2
Guidelines up to 2027

CSV Commitment

Visionof eachkey issue

The Board

President & CEOGroup CSV Committee *4

Future ten years from now

CSV staff meeting *3

GMM*1

Kyowa Hakko Bio

Group Executive Committee

ReportIncorporation into
the strategies ofoperating companies/ Monitoring

Plan up to 2024

To be incorporated
in business plans
Group Business Plan
Kyowa Hakko Bio Group‘s
Business Plan

Promotion of Commitments
Financial andNon-financial KPIs

Evaluation of
Executive Officers
Evaluation ofOrganizational Chief (MBO-S)

Kyowa Hakko Bio
Executive Committee*1: Group Materiality Matrix*2: Translate management philosophy into social significance*3: Members: KH functional units planning staff, major operating companies’ planning staff*4: Chair: The CEO of Kirin Holdings Members: KH functional units director, the CEO of major operating companies

5

Kyowa Hakko Bio Group’s
CSV Commitments
Group Materiality Matrix

HealthandWell-Being

Support for maintaining theimmune system
Helping to improve theperformance of brain function andprevent decline
Improvement of access to nutrition
Helping to improve theperformance of brain function andprevent decline

2.2
3.3
3.4
9.5
2.2
3.4
9.5

Approach2023
Achievements

Target Value

TargetYear

Number of users of HMO-containing
products (infant formula, health foods,etc.) in Japan and overseas

Launched
the HMOs

2 million people

2027

By supplying Citicoline, a brain-health nutrient, we will be able tosupport our customers’ healthy lifestyle and expand our market
by prescribing it to patients and meeting the needs of the healthfood market for brain function.

Number of users of Citicoline-containing
products (pharmaceuticals, health foods,etc.) in Japan and overseas

1.91 million
people4 million people

2027

Number of people who continue toconsume Lactococcus lactis strain
Plasma in Japan and overseas

0.78 million
people(Kirin Group)

1.9 million people(Kirin Group)

2024

Acquisition rate of international foodsafety certification (GFSI certification and
ISO 22000)

93%(Kirin Group)

96%(Kirin Group)

2024

Survey score of presenteeism*3 intargeted companies*2

63.29(Kirin Group)

Improvement from 2022
(62.55) (Kirin Group)

2024

Percentage of people who maintainappropriate weight in targetedcompanies*2
Percentage of employees of domestic
business companies with responsible
alcohol consumption (Percentage of
people whose score is less than 8 on
Alcohol Use Disorders Identification Test)

64.3%(2022 results)(Kirin Group)

Improved from 2020
(63.8%)(Kirin Group)

2024

71.6%
(Kirin Group)

Over 73%(Kirin Group)

2024

3.3

We will contribute to global health by implementing Japanoriginated immunological research in society. We will use
Lactococcus lactis strain Plasma to support the maintenance ofcustomers’ immune function, promote the development of proper
immune care habits, and develop new markets in Japan andoverseas through product development that leverages the Group’s
assets.

Ensuring food safety and security*1

2.4

We promote hygiene management and food safety management
systems globally using international certification (GFSI recognizedscheme and ISO 22000 scheme) to ensure the safety and securityof our customers.

3.4

Our Achievements

By supplying high-quality Human Milk Oligosaccharides (HMOs)
to a wide range of markets, from infant formula to health foods,
we will contribute to the improvement of customers’ health in awide range of regions and age groups, leading to the growth ofour business.

Support for the prevention of noncommunicable diseases
Support for maintaining theimmune system*1

Implementation of healthmanagement*1

The Environment

SDG targets that
we can particularly
contribute to

Related Article: Kirin Holdings “2022-2024 CSV Commitments”

As a corporate group that delivers “health” to customers, we aim
to create an environment where employees and their families canspend the rest of their lives in good health and mental well-being,
and where employees can demonstrate their individual abilities.

Sustainable use of biologicalresources

15.4

Through the procurement of FSC® certified paper and othermeans, we will work to ensure the sustainability of raw materials
that may otherwise be destroyed by deforestation.

Usage site ratio of FSC-certified paper orrecycled paper for paper containers andpackaging

80%

100%

2030

Sustainable use of water resources

6.4

By reducing the amount of water used in our business activities,
we will ensure the sustainability of water resources by conducting
water resource preservation activities and other measures.

Reduction rate of water use volume

63%

32% (compared to 2015)2030

GHG (Greenhouse Gas) emission
reduction rate: Scope 1+2

47%55% (compared to 2019)32% (compared to 2019)

2030
2024

Ratio of renewable energy to electricity
used by the entire Group

45%

100%

2040

GHG (Greenhouse Gas) emission
reduction rate: Scope 3

25%

30% (compared to 2019)(Kirin Group*1)

2030

Overcoming climate change

7.2
13.1

In addition to achieving RE100 at an early stage and making
100% of the energy used by our company come from renewableenergy sources, we will expand the use of renewable energy insociety and work with stakeholders to build a business model that
contributes to a decarbonized society.

*1: The target values and achievements related to this issue are the values of the entire Kirin Group’s CSV Commitment, to which the Kyowa Hakko Bio Group contributes as a member.
*2: From the Kyowa Hakko Group, Kyowa Hakko Bio is included as one of the target companies for this commitment.
For more information, please see the Kirin Group CSV Commitments at https://www.kirinholdings.com/en/impact/csv_management/commitment/*3: The condition of being at work with health problems

6

Related Article: Kirin Holdings “Compliance”

Compliance and Corporate Ethics

Related Article: Kirin Holdings “Risk Management”

The Kyowa Hakko Bio Group is committed to compliance and corporate ethics based on the Kirin Group Compliance Policy and Compliance Guidelines.

Adherence to Compliance Policy

Business and Compliance Risk Assessment

In the Kirin Group, the Group Compliance Policy sets forth
the fundamental concepts and behaviors that are legallyand ethically required of executives and employees
in order to implement the Kirin Group’s Corporate
Philosophy, Vision, and Values. More specific actions
have been summarized and clarified in the Compliance
Guidelines. The Kyowa Hakko Bio Group applies andadheres to the policy and guidelines in accordance withthe characteristics of each business and country.

Many employees participate in the identification of businessrisks covering the operations of all Kyowa Hakko Bio Group
companies and departments, and annual assessments ofbusiness risks including compliance risks are conducted.
Identified risks are discussed by the relevant departments,
solutions are established, and risks are controlled throughimplementation. Regarding anti-corruption, anti-bribery,and prevention of unfair competition, we have begun risk
assessments at all sites using a checklist.
In addition, we conduct compliance and humanrights awareness surveys for all Group employees tounderstand what they think and feel, and by addressing
the issues identified, we create brighter and more
comfortable workplaces and promote compliance.

Establishment and Fostering ofCompliance Awareness
The Kirin Group has created “The RULE” as an
educational tool and disseminates it to ensure thoroughcompliance. The Kirin Group conducts training tocultivate compliance awareness among all executives
and employees involved in the business, and work on
important issues such as anti-corruption, anti-bribery,
prevention of unfair competition
and anti-competitive practices,
Percentage of sites withcompliance learningand prevention of information
opportunities
security breaches. Based on
100%
this training content, the Kyowa
Hakko Bio Group conducts
Percentage oftraining at each site tailored tocompliance training
each business and country.
participants
In 2022, 93% of Kyowa
97%
Hakko Bio Group employees
participated in compliancetraining. We will continue our
educational activities and strive
to achieve a participation rate
close to 100%.

Establishment of Hotline and Promoting
Awareness Among Employees
We have established a hotline for all stakeholders,both internally and externally, to report violations ofcompliance policies and guidelines, including misconduct
related to corporate activities such as compliancebreaches, corruption, and human rights issues (includingharassment). We rigorously protect the personal
information of whistleblowers and prohibit any unfavorable
treatment against them, including intimidation andretaliation. Threats, intimidation, or physical or legal attacks
against those exercising their right to protest human rights
issues will not be tolerated. Multiple reporting lines areavailable to facilitate easy reporting. We ensure that all
employees are familiar with these compliance and humanrights policies through training sessions. For details

Information Security Risk Countermeasures
The Kirin Group recognizes information security as oneof its key risks and is implementing various measures tostrengthen Group governance and promote technologicalmeasures based on the development and enhancementof internal rules and employee awareness. As a memberof the Kirin Group, we are committed to reducing risks
such as leakage or loss of information assets, including
sales, manufacturing, and R&D, and to avoiding risks inprotecting privacy data.
With respect to personal information held by ourcompany, we have established the Privacy Statement
and handle the personal information of our customers,
business partners, etc. in an appropriate manner.
We conduct information security training to raise
employee awareness and are working on measures toimprove security at our overseas sites.
Kirin Holdings Information Security Report
Kirin Group Privacy Data Protection Policy

7

Product Stewardship: Responsible Product Management

Related Article: Kirin Holdings “Our Approaches in Quality”

In order to deliver unwavering trust and peace of mind to our customers around the world, we are aware of our responsibility for safety, hygiene, and the environment throughout the product life
cycle, and we continue our efforts to improve the quality of the entire value chain. Please see the following pages for information on the environment, human rights, and occupational health.

Kyowa Hakko Bio Group’s Quality Policy
To deliver high-quality products and services that canensure safety and security of customers, each and every
one of us recognizes the importance of our individualtasks and responsibilities and conducts reliable quality
assurance activities throughout every step of the process.

Promoting Quality Assurance
Level Improvement
Based on our quality policy, the Kyowa Hakko Bio Groupis working daily to improve quality and enhance quality
assurance in all departments, including those of ouraffiliates. Our Quality Assurance Department confirms
these quality-related activities and provides support toimprove the level of quality assurance throughout the entire
value chain, from product development to support after
delivery of products to customers.
Quality Assurance Department
Confirmation and support
Quality assurance activities throughout the entire value chain
Promotion
Improve and maintain quality assurance level
Marketresearch

R&D

Manufacturing

Sales

Customer
support

Proper Manufacturing and Quality Control
At the Kyowa Hakko Bio Group’s API manufacturing
facilities, we adhere to guidelines and have received
certification for compliance with pharmaceutical Good
Manufacturing Practice (GMP) standards, which are set byregulatory authorities in each country for pharmaceuticalmanufacturing facilities. We ensure proper managementof all processes, from raw material procurement andmanagement to manufacturing and shipping, to deliver
high-quality products with effectiveness and safety. In
addition, our food material manufacturing plants haveacquired FSSC 22000, an international certification
standard for food safety management systems.
We also actively accept audits by domestic andoverseas customers who use our products. In addition
to our voluntary efforts, we have accumulated quality
improvement activities through third-party surveys, and areworking daily to create a system that can stably maintain ahigh level of quality. We also conduct regular quality auditsof contract manufacturers to check compliance with ouragreements and GMP ministerial ordinances, and request
improvements when necessary.

Initiatives throughout the Product Life Cycle
Appropriate Measures in the Use of Advanced Technologies
Our Group, which is based on biochemicals, always
gives first priority to safety, health, and environmental
impact with respect to the technologies used in research,development, and production, and takes appropriate
measures to address these issues.
We strictly adhere to biosafety standards
established worldwide and ensure safety by disposingof waste at appropriate facilities. We take all possible
measures to protect health and the environment,
recognizing the risks and complying with the World HealthOrganization (WHO) Laboratory Biosafety Manual and theCartagena Protocol on Biosafety. Furthermore, we support
the principles of the Convention on Biological Diversity
and the Nagoya Protocol and are committed to protect
biodiversity and ensure fair and equitable use of genetic
resources.
Promoting Sustainable Logistics
The Kyowa Hakko Bio Group takes appropriate
measures to ensure security related to security trade bycomprehensively taking into account political situations,
legal systems, and the reputation of our counterparties ineach country and region. We are proactively addressing
issues in the logistics and promoting measures such as
reducing workload by using pallets and prioritizing marinetransportation.
Providing Appropriate and Accurate Product Information
We provide customers with accurate information onsales, development, and manufacturing activities. We also
obtain and provide information on certifications related
to pharmaceuticals and foods required by our customers
in various countries, as well as certifications related toreligious dietary guidelines such as Halal and Kosher.
Providing Reliable Product Handling Information
The Kyowa Hakko Bio Group provides Safety Data Sheets(SDS) in accordance with the GHS (Globally Harmonized
System of Classification and Labeling of Chemicals) format inorder to accurately communicate product specifications, safe
usage, and disposal risks. For product sales to Europe, we
comply with the REACH Regulation. Through these initiatives,
we strive to comply with local regulations and ensure that ourcustomers can use our products with peace of mind.
Response to Product Defects
The Product Recall Standards stipulate our response in
the event of a serious product accident, and we place thehighest priority on compliance with laws and regulations aswell as the health and safety of patients and customers.
Risk Assessment of Environment, Safety, and Quality
When launching a new manufacturing business, we
comprehensively evaluate the safety, environmental impact,and health effects of raw materials used at every stage
from the research to production. Even after launching,in the event of changes in equipment or manufacturingmethods, we evaluate risks from the perspectives of theenvironment, safety, and quality before implementing them.

8Related Article: Kirin Holdings “The Environment”

The Environment (Vision and Policy)

The Kyowa Hakko Bio Group recognizes the resolution of social issues connected to the environment as one of its key management issues.
Working alongside internal and external stakeholders, the Group makes efforts to create positive impacts while at the same time minimizing environmental impact.

Kirin Group’s Environmental Vision 2050

Promotion of Environmental Management

In 2020, the Kirin Group introduced the Kirin Group’s
Environmental Vision 2050 towards improving theresilience of society and companies.
The Kyowa Hakko Bio Group, as a member of theKirin Group, identifies this vision as the ideal state thatsociety should aspire to and actively works towards its
realization. Furthermore, the targets based on the vision,
along with the measures and technologies required toachieve them, are shared within the Kirin Group, and wewill work as one to make steady progress.

The Kyowa Hakko Bio Group has established the Kyowa
Hakko Bio Group Environmental Policy and conducts
global environmental management activities based on
it. The Environmental Policy is regularly reviewed andimproved in conformity with the latest regulations andbest practices.
Following ISO14001 and other environmental
management systems, the Environmental Management
Division at Kyowa Hakko Bio’s head office conducts
audits of the Group’s manufacturing sites, and strives toimprove each company’s environmental management
system. In Japan, to ensure even greater transparency
and independence, the Group has conducted strict
surveys on compliance with environmental laws andregulations using an external consultant since 2009.
Additionally, Kirin Holdings’ CSV Strategy Department
conducts internal environmental audits of each site of
the Kyowa Hakko Bio Group according to the establishedstandards, which are then integrated into management
reviews.

For details

Kyowa Hakko Bio Group Environmental Policy
Basic Policy
We leverage our advanced biochemical technologies to contribute to healthand well-being as well as the conservation of the global environment and therealization of a sustainable society.

Activity Policy
We have set the resolution of social issues connected to the environment as
one of our key management issues, and under the leadership of management,
we seek to address them with the participation of all employees.

1. Compliance

We will comply with all environmental laws, regulations, and agreements aswell as voluntary control standards.

2. Contribution to a Circular Society

We will set sustainable development targets pertaining to the environment
and work to achieve them by improving water and energy consumption
efficiency and developing new solutions.

3. Environmental Management

We will create a PDCA cycle for environmental activities and make continuous
improvements in accordance with our business strategy.

4. Human Capital Development

We will continuously develop Human Capital that can create and implement
a positive impact on the environment in our own company and society as awhole.

5. Communication

We will disseminate highly transparent and reliable information and broadly
promote communication with stakeholders.

March 28, 2024
Koji Fukada

Environmental Risk Management and Countermeasures
The Kyowa Hakko Bio Group continuously conducts
environmental risk assessments and understands its
business activities’ impact upon the environment.
To further reduce any environmental impacts
from manufacturing, we conduct R&D of manufacturing
processes and review operational processes andfacilities.
In developing new products, we proceed withcommercialization only after ensuring all raw materials

and products are safe for the environment.
Through REACH registration and clear definitionsof hazard and risk information in Safety Data Sheets(SDS), we openly disclose any environmental risks ofproducts to customers and transport workers. Towards
maintaining a sustainable and enriched earth, we givethorough consideration to the environment by conducting
appropriate countermeasures.

9Related Article: Kirin Holdings “Overcoming Climate Change”

The Environment (Climate Change)

In addition to the greenhouse gas (GHG) emission reduction targets set by the Kirin Group, the Kyowa Hakko Bio Group has set its own targets tailored to its businesses and is actively
working to achieve them.

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1.5°C-aligned target by the Science Based Targets initiative (SBTi). The Group has set ambitious GHG emission
reduction targets, aiming for a 50% reduction in Scopes 1
and 2 and a 30% reduction in Scope 3 emissions by 2030,
all compared to 2019 levels. Additionally, its long-term
reduction target of achieving
net-zero GHG emissions acrossthe entire value chain by 2050
has been certified as SBT Net
Zero by the SBTi.
The Kirin Group joined RE100 and obtained certification
for its renewable energy ratio targetof 100% in used electricity by 2040.
The Kirin Group was selected for the highest ratings, “Supplier Engagement Leader” in supplierengagement and “A List” in water security in 2023, by the international environmental non-profit organization CDP.
As a member of the Kirin Group, the Kyowa Hakko Bio
Group is also subject to evaluation and has thus contributed to these achievements.

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Use of Renewable Energy

Introduction of Energy-Saving Equipment

The Kyowa Hakko Bio Group aims to achieve a 100% renewableenergy ratio in used electricity by 2040. We have implemented“Renewable Energy Certificates” (I-RECs) at our overseas production sites. In anticipation of global demand growth for Human Milk
Oligosaccharides (HMOs), full-scale operations have commenced
at the newly established production line in our Thailand plant, andwe are striving to balance business growth with a reduced environmental impact. Currently, a portion of the electricity consumed at
Kyowa Pharma Chemical’s manufacturing plant is sourced fromrenewable energy. Furthermore, Kyowa Hakko Bio’s Yamaguchi facility began using solar power through a PPA*1 in March 2024, aiming to reduce GHG emissions by approximately 900 tons annually,a reduction of 3.2% compared to 2023. Alongside existing solar
power facilities on unused land within the premises since 2016
(with a maximum output of 12MW, equivalent toabout 3,600 households’ annual consumption),
we actively contribute to the widespread adoption of clean energy.

When installing or replacing
manufacturing facilities, weprioritize the selection of energyefficient equipment with low GHG
emissions. For instance, at Thai
Kyowa Biotechnologies’ new facility,
we have introduced a concentration system withan MVR (Mechanical Vapor Recompression) steam
compressor, allowing us to reuse steam.

*1 P
 PA: Power Purchase Agreement. A business model where a PPA supplier installs
solar power generation equipment free of charge on the premises or rooftop of
the end user and then sells the generated electricity to the end user.

Introduction of High-Efficiency Boilers
At BioKyowa, which manufacturesamino acids in the United States,
natural gas is used as a heat source
during production. In order to reduce
High-efficiency
the use of natural gas, in 2020,
package boilers
we replaced all boilers with highefficiency package boilers that control the numberof operating units. This change has reduced annual
natural gas consumption by approximately 8%.

10Related Article: Kirin Holdings “Sustainable Use of Water Resources”

The Environment

Related Article: Kirin Holdings “Sustainable Use of Biological Resources”(Water Resources, Biological Resources, Containers and Packaging)

Related Article: Kirin Holdings “Sustainable Recycling of Containers and Packaging”

In the field of fermentation production, where the Kyowa Hakko Bio Group excels, water resources are indispensable in the process of utilizing microorganisms to produce substances. With
manufacturing sites in Japan, the United States, China, and Thailand, the Kyowa Hakko Bio Group acknowledges that water risk and water stress varies significantly by country and region
and takes measures to conserve water tailored to water stress at each location. We also ensure environmentally friendly discharge into aquatic ecosystems.

Water Resources

Water Resources

We actively reduce water use toward the conservationand sustainability of water resources.
By utilizing cooling towers and ponds, we haveintroduced a cooling system for recycling and reusing
water. This allows us to effectively reduce water
consumption and contribute to the conservation ofvaluable water resources.

Toward the sustainable use of water resources, the Kirin Group has been
quantitatively assessing water risk and stress using surveys since 2014 and hastaken measures to conserve water tailored to water risk and stress at each businesssite. Through the water risk and stress surveys, the Kyowa Hakko Bio Groupconfirmed that water stress at Thai Kyowa Biotechnologies was high. For details
Based on the survey results, it was determined that urgent measures
were necessary at Thai Kyowa Biotechnologies, and water-saving equipment
was introduced into the Human Milk Oligosaccharides (HMOs) production facility
completed in 2022. We are also actively exploring measures for our existing
facilities.
Kirin Holdings also conducts a scenario analysis based on the TCFD
recommendations to study and identify the impact of climate change on thevolumes of the main agricultural products used by the Kirin Group. The scenario
analysis includes corn, which is used as a raw material for the Kyowa Hakko Bio
Group. This result is integrated into the strategies of the entire Kirin Group.

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(water use / sales revenue) of entire group
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Biological Resources
Containers and Packaging

Water Risk Assessment

Reduction of Water Use

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Water Risk Assessment

Water stress

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Setting Stricter Wastewater Standards
Regarding plant wastewater, wehave set voluntary standards thatare stricter than those required byregional regulations. Before releasing
wastewater into rivers and sewers, we always confirm
water quality parameters, such as COD and nitrogen.
At some overseas plants, we use excess sludge
for composting and other purposes, thereby contributing
to global environmental conservation.

Water-saving enterprises
in 2022
Shanghai Kyowa Amino Acid wasrecognized by the Shanghai State
Taxation Bureau

Water risk

Water pollution

Environmentally Friendly Packaging
The Kyowa Hakko Bio Group values the use ofsustainable biological resources and promotes
the adoption of FSC (Forest StewardshipCouncil) certified or recycled copy paper
and paper packaging materials. We haveset a target of achieving 100% use of FSC
certified or recycled paper for paper packaging
materials by 2030, and four out of five sites
have already accomplished it.
We also adopt recyclable fiber drums
made entirely of paper for packaging bulk
goods, in consideration of customers’ waste
disposal burden and the environmental impact.
Number of sites that have adopted
paper packaging materialsJapan(�� sites)

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Australia(� sites)
Water shortages
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Related Article: Kirin Holdings “Environmental Report”

The Environment (Pollution Prevention, Waste and Chemical Substance Management)
Preventing and Responding to Accidents
All manufacturing sites manage a ledger of legal
requirements and establish voluntary control standard
values stricter than the regulations in each country tothoroughly prevent environmental pollution.
We conduct risk assessments related to the introductionof new equipment, modifications to existing facilities, andthe handling of chemicals. Our goal is to minimize risk byidentifying and mitigating hazards, harmful effects, andfactors contributing to local pollution.
For substances requiring careful handling such as
hazardous or toxic materials, we implement clear
labeling, assign separate and lockable storage, prepare
operational procedures, and provide training in advanceto the employees involved.
For the prevention of accidents and any recurrence,
we have established a system for the reporting ofenvironmental accidents within the Kyowa Hakko Bio
Group, in which we share examples of near-misses andaccidents and extend countermeasures to other sites.
We use internal environmental audits to check the status
of initiatives to achieve environmental targets, to see howmeasures to prevent environmental accidents and nearmisses are shared across sites, and to confirm the statusof legal compliance.
The emergency response procedure for environmental
accidents is based on the Crisis Occurrence Criteria,
whose content is reviewed annually to adapt it to thesituation at individual manufacturing sites. In addition, inthe event of an environmental accident, an Environmental
Accident Report is prepared on the basis of criteria thatis specified by each manufacturing site and submitted toKirin Holdings.

Appropriate Waste Management
The Kirin Group is working toward its goal of
implementation and firm establishment of thorough andappropriate waste management. We have established
the Kirin Holdings Waste Management Rules within
the Group’s common systems. These rules standardize
contract templates and the frequency and content ofcontractor audit programs, and by keeping an updated
list of staff in charge of waste management, we provide
education (industrial waste treatment practitioner
training) based on standardized textbooks.
We promote the reduction of final disposal volume bysetting KPIs for the amount of waste and byproducts
generated and the rate of recycling. Under theconcept of Reduce, Reuse, and Recycle (3Rs), we takecountermeasures such as recycling dewatered sludge
into raw materials for cement and soil amendments at
individual sites. Kyowa Hakko Bio’s Yamaguchi Production
Center has achieved zero emissions* since March 2016,
as Kyowa Pharma Chemical has done since 2012.
*As per our definition, zero emission means reducing the amount of
final landfill disposal to 0.1% or less of the amount of waste generated.

Reducing Emissions of Air Pollutants
The Kyowa Hakko Bio Group strives to comply withlocal regulations relating to air pollution in the various
countries where we operate. We have also establishedvoluntary standards pertaining to NOx, SOx, particles
of soot, fluorocarbon, etc. that are stricter than thoserequired by environmental legislation and are working
to reduce our emission of air pollutants. In addition, we
adopt centrifugal chillers with refrigerants whose Global
Warming Potential (GWP) is 1 and Ozone Depletion
Potential (ODP) is zero at the time of replacements.

Preventing Soil Contamination
When selling assets, the Kirin Group conducts thoroughinvestigations of soil contamination and provides
appropriate information while responding as necessary.
In 2022, we conducted a soil survey of the former siteof Kyowa Hakko Bio’s Tsukuba Research Laboratory andconfirmed that there were no problems.

Managing Chemical Substances
The Kirin Group appropriately manages its chemical
substances in accordance with regulations such as the
PRTR (Pollutant Release and Transfer Registers) Act,
which focuses on promoting environmentally soundmanagement of certain chemical substances andcontrolling their release into the environment.
The Kyowa Hakko Bio Group treats volatile organic
compounds (VOCs), which constitute a significant
portion of the chemical emissions generated due to thenature of our business, through scrubber processing to
reduce the emissions in the air.

Collaboration with Local Communities
We place a great deal of importance on mutual
understanding and partnerships with communities
adjacent to our manufacturing and business sites andpromote communication by hosting regular meetings andfactory tours. Also, we actively participate in community
dialogue and various community events that are held bynearby residents’ associations. We have implemented
measures to control odors and noise resulting from ourmanufacturing operations, and we regularly monitor
and manage them. Through mutual understanding, we
strive to achieve coexistence and mutual prosperity with
communities.

12

Promotion of Sustainable Procurement
Sustainable Procurement Management
The Kirin Group established the “Kirin Group Sustainable
Procurement Policy” in September 2017 (revised in April
2021) to fulfill our social responsibility.
This policy outlines five important areas: 1. Steadyfocus on quality, 2. Ensuring regulatory and ethical compliance, 3. Respecting human rights, 4. Environmental stewardship, and 5. Coevolving relationships of mutual trustwith suppliers. Through procurement activities aligned withthese five themes, the Kirin Group aims to improve sustainability from global perspectives, enhance corporate value,and contribute to society.
Furthermore, in order to meet the demands andexpectations of society and continue to create a varietyof value through collaboration with our suppliers, who arealso business partners, the “Kirin Group Sustainable Supplier Code” was established in April 2021 (revised in January2024) under the “Kirin Group Sustainable Procurement
Policy.” This code outlines what we expect our suppliers tocomply with.
The Kyowa Hakko Bio Group, as a member of the Kirin
Group, complies with this policy and code while promoting
sustainable procurement based on the characteristics ofthe Group’s businesses and the regions in which our sites
are located. In addition, the Kyowa Hakko Bio Group as a

Kirin Group Sustainable
Procurement Policy
Kirin Holdings
Common rules of
the Kirin Group

Individual rulesof each Group
company

Kirin Group Sustainable Supplier
Code

Basic Policy and Supplier Code of
Conduct set forth individual eachGroup company

Each Group
Company

whole promotes green purchasing, which is the purchaseof products with the lowest possible environmental impact
from businesses that strive to reduce their environmental
impact, after careful consideration of the necessity of such
purchases.

Sustainable Procurement Initiatives
At Kyowa Hakko Bio, we are implementing specific initiatives for sustainable procurement. Additionally, our goal for2024 is to expand these efforts to other Kyowa Hakko Bio
Group companies in accordance with the characteristics oftheir businesses and regions, thereby advancing our efforts
towards sustainable procurement as a group.
Communication with Suppliers
At Kyowa Hakko Bio, we explain the “Kirin Group Sustainable
Supplier Code” to our suppliers. We require new suppliers toincorporate compliance clauses from this code into their new
basic trading contracts, and for existing suppliers, we seek
compliance through an acceptance letter. In 2024, we are
actively working to obtain these basic trading contracts or acceptance letters from over 50% of our suppliers. After transactions commence, we verify compliance through regularsurveys using the Kirin Group Self-Assessment Questionnaire(SAQ)*. Survey results are provided as feedback to suppliers,
and if efforts to address risks are deemed insufficient, we
conduct additional investigations and individual meetings.
These involve explaining and discussing the Kirin Group
Sustainable Supplier Code and seeking understanding andcooperation to jointly advance sustainable procurement.
Furthermore, we have established a hotline where
suppliers and their upstream suppliers can report concerns
related to transactions. Through such initiatives, we will continue to collaborate with suppliers in a PDCA cycle to promotesustainable sourcing. For details*Based on the Global Compact Network Japan (GCNJ) common SAQ withadditional questions unique to the Kirin Group

Related Article: Kirin Holdings “Sustainable Supply Chain”

Risk Assessment in the Supply Chain
To understand the risks in raw material procurement, we
utilized Sedex’s assessment tool, Radar. We conducted ananalysis based on two axes: 1. Human rights risks by raw
material sourcing country and 2. The degree of impact on
our business. This allowed us to identify and prioritize raw
materials with high human rights risks. Upon reviewing
supplier company information and SAQ results for high-priority raw materials, we found that none had high humanrisks. Moving forward, we will incorporate an awarenessof human rights risks in raw material procurement into our
supplier investigations and communications to promotesustainable procurement practices.
Furthermore, we will continue with ongoing risk
assessment. If raw materials with extremely high humanrights risks are identified, we will consider additional investigations to understand the situation and explore measures
to prevent and mitigate impacts on human rights.
Procurement Personnel Training
Our procurement personnel have obtained the Certified
Procurement Professional (CPP) qualification from theJapan Management Association (JMA). To enhance theirunderstanding of sustainable procurement, they regularly
participate in training programs related to issues such as
human rights, society, and the environment within the supply chain. In 2023, all procurement personnel attended two
training sessions. We also incorporate indicators related
to sustainable procurement into the evaluation of procurement personnel and reflect the achievement of targets intheir evaluations.
Percentage of supplier surveys
collected*

Percentage of procurement
personnel trained in supply chain
policies*

��%

���%
*Kyowa Hakko Bio

13

Respect for Human Rights

Related Article: Kirin Holdings “Community Engagement”

The “Kirin Group Human Rights Policy” is positioned as the dominant policy for all documents and codes related to initiatives that support respect for human rights within the Kyowa Hakko
Bio Group’s business activities. The Policy applies to all executives and employees including part-time, dispatch, and contract workers of the Kyowa Hakko Bio Group.
The “Kirin Group Human Rights Policy” upholds the practice of respecting human rights in every stage in the supply chain. It prohibits any form of discrimination and harassment,
promotes responsible labor practices including a safe and healthy workplace environment, and ensures adequate working hours and a minimum wage. Moreover, it respects the freedom of
association and the right to collective bargaining and lays out a commitment to conducting human rights due diligence.
Based on the “Kirin Group Human Rights Policy," the Kyowa Hakko Bio Group improves its understanding of diverse human rights issues that are generally associated with activities inindividual countries and business fields, works together with business partners, and appropriately deals with such issues.

Awareness-raising Education

Identification of Risks in Supply Chains

The Kirin Group sets every June as Harassment
Elimination Month to improve employees’ human rights
awareness, prevent harassment, and create lively andcheerful workplaces that involve all employees.
At each business site, we conducted human rights
awareness training through individual learning andgroup work formats. These sessions covered diversity,
unconscious bias, discrimination, and harassment as
topics relevant to a wide range of internal and external
stakeholders.

Percentage of sites with humanrights learning opportunities

Percentage of employees
trained in human rights

100%

94%

To identify actual or potential impacts in all of the
Kyowa Hakko Bio Group’s supply chains, we consider
a human rights perspective at the time of identifying
business and compliance risks. For further details,
please refer to “Compliance and Corporate Ethics”(Page 7).
Kyowa Hakko Bio conducted an analysis of risks in
its supply chain. For further details, please refer to“Sustainable Procurement” (Page 13).
We have an internal hotline for reporting human rights
violations within the supply chain, as mentioned in“Compliance and Corporate Ethics” (Page 7). We also
have an external hotline for opinions from people insupply chains associated with our Group. Please see“Establishment of Hotline and Promoting Awareness”
on this page.

Respecting Human Rights in R&D
Prevention of Child Labor, Forced Laborand Human Trafficking
We regularly conduct awareness-raising training toprevent child labor, forced labor, and human trafficking.

In order to appropriately conduct R&D activities
respecting human rights, the Kyowa Hakko Bio Group
conducts stringent reviews on ethical justificationand scientific rationality under the control of the Kirin
Holdings Institutional Review Board (IRB).

No company in the Kyowa Hakko Bio Group employs
any child under 18 years old.

In research involving human-derived samples andinformation, both the Kirin Group and the Kyowa

Hakko Bio Group, in accordance with relevant laws andresearch ethical guidelines, adhere to the principle ofobtaining sufficient understanding from individuals (ortheir proxies) who provide samples or information. Thisis achieved by explaining the necessary details using
documents and obtaining consent in writing at facilities
such as universities where sample or information
provision takes place. Furthermore, in clinical research,
we rigorously conduct the research while prioritizing theprotection of participants’ human rights and personal
information, ensuring safety, and maintaining a focus
on their welfare. For details

Hotline and Awareness Promotion

For details

We have an internal hotline for reporting human rights
violations including discrimination and harassment
issues as mentioned in “Compliance and Corporate
Ethics” (Page 7). Employees are made aware of thishotline during training.
For opinions from outside the company, we offer
points of contact on Kyowa Hakko Bio’s website andthe Kirin Group’s website. Additionally, the Kirin Group
offers external contact options, such as the Supplier
Hotline and the Remedy Platform of Japan Center for
Engagement and Remedy on Business and Human
Rights (JaCER), which can also be used by customersof the Kyowa Hakko Bio Group.

14

Achieve Sustainable Growth with
Diverse Human Capital

Related Article: Kirin Holdings “Diversity and Inclusion, Culture for Innovation”

Kyowa Hakko Bio Group believes that diversity is a key driver to becoming a leading global CSV (Creating Shared Value) company. Both employees and the organization continuously grow by harnessing
the strengths of diverse employees, fostering innovation from diversity, and creating new value. We are committed to creating an environment where a diverse workforce with a drive for growth canthrive, regardless of gender, disability status, age, race, or nationality, and we are working towards establishing an organizational culture that promotes a satisfying and enjoyable work experience.

Human Capital Strategy

Hataraki-Gai Reforms

In an environment where the concept of career (self-realization) is diversifying, the Kyowa
Hakko Bio Group provides regular opportunities for communication regarding careers andworking conditions to support each individual's drive for growth and pursuit of goals.
Furthermore, we conduct educational training to assist employee learning and skill
development, enabling human capital with various expertise and skills to maintain theirmotivation for career development.

Within the Kyowa Hakko Bio Group, we have implemented flexible working arrangements
such as flextime and remote work, tailored to job roles and assignments. We strive tocreate an environment that encourages communication with employees and facilitates
discussions about working conditions and family support. Through these initiatives,
we aim to enhance employee satisfaction and productivity, ultimately realizing a better
workplace environment.

Basic philosophy of human capital = “Respect for humanity”
Create a place where each and every employee can fully develop and grow withboundless potential, respecting their efforts and individuality (human nature),
and proactively create a place where they can work to their fullest.
Employee
Employee commitment
Be a self-reliant individual
Self-reliant career development
Proactive job design
Self reliance as a member of society

Employees andthe Company
are “Equal Partners”

Equal
relationshipthrough work

Company
Company commitment
Respect and support
the self-reliant individuals
Training to become a professional workers
Clarification of personal mission
Fair treatment

Recruitment and Development of Diverse Human Capital
To adapt to the changing business models of the era and enhance our capacity forinnovation, we actively engage in career recruitment. We cultivate new hires with a longterm perspective, expecting them to not only embody our corporate brand but also serve
as valuable assets in bringing together various businesses and functions. Each company
in the Kyowa Hakko Bio Group sets its own hiring criteria and conducts recruitment
autonomously.
Provision of Opportunities to Motivate GrowthEstablished “KPC College” to foster the ability to think and support self-directed learning. (Kyowa
Pharma Chemical)
To promote self-reliant career development, we provide opportunities for learning, including degree
acquisition support and self-improvement assistance programs. (Kyowa Hakko Bio)

Encouraging Employees to Take Childcare Leave
We encourage taking parental leave as one of the measuresfor creating a work environment that supports work-lifebalance. To promote an environment that is conducive toraising awareness of the importance of such leave, we sharecase studies of employees taking pa-rental leave and regularly
provide information to workplace leaders. In recent years, thenumber of men taking parental leave has also increased.

Obtained the “Kurumin Certification” from
the Ministry of Health, Labor and Welfare(Kyowa Pharma Chemical)

Promotion of Women’s Activities
Participated as a founding sponsor (Silver) of “Women In
Nutraceuticals." (Kyowa Hakko U.S.A.) For details
Obtained the “Eruboshi Certification” from the Ministry of Health,Labour and Welfare, as a company promoting women’s activities.
(Kyowa Hakko Bio, Kyowa Pharma Chemical)

Employee Engagement Surveys
The Kyowa Hakko Bio Group conducts an annual engagement survey for part-time,
contract, and full-time employees at all sites. We identify issues related to the awarenessand behavior of employees in each organization, their engagement, and the organizational
culture. We then incorporate these into the plans and measures of each company andorganization to address them and strive to create a better workplace. Over the years,
improvements have been observed in many categories, and based on these results, wewill continue to conduct training to enhance the work environment and work on resolving
areas with low scores.

15

Ensuring Occupational Health and Safety

Related Article: Kirin Holdings “Ensuring Occupational Health and Safety”

The Kyowa Hakko Bio Group applies its Occupational Health and Safety Policy to all executives and employees who constitute the workplace environment, including part-time, contract andtemporary employees. We harmonize top-down management with bottom-up activities and promote business with careful attention to health and safety and also security and disaster prevention
through the development of assessment-based activities.

Promotion of Occupational Health and
Safety Management
The Kyowa Hakko Bio Group set forth the Kyowa Hakko Bio
Group Occupational Health and Safety Policy and conducts
global occupational health and safety activities based on it.
In compliance with the Ministry of Health, Labour andWelfare notification on “Guidelines on Occupational Safety and
Health Management Systems,” the Kyowa Hakko Bio Group is
actively working on raising employee safety awareness andfostering a culture of safety through the PDCA cycle. Throughthese management systems, we share identified risks with all
Kyowa Hakko Bio Group sites and swiftly conduct investigations, checks and improvements to mitigate them.

Kyowa Hakko Bio Group
Occupational Health and Safety Policy
To contribute to the health and prosperity of people around the world, we
strive to realize lively and comfortable workplace environments whereoccupational health and safety has first priority.

Activity Policy

Based on the Three Reality Principle, which emphasizes “going to the actual place,” “knowing the actual situation” and “being realistic,” we practicethe following action guidelines to protect mental and physical health.
1. We will respect and observe occupational health and safety rules.
2. We will conduct risk assessments and risk predictions that must be understood by all people involved, before taking action.
3. We will communicate with each other as “One Team” and protect colleagues to work together against risks.
4. We will prevent similar accidents from occurring trough thorough improvements after an accident and lessons learned from the past and other sites.
5. We will continuously improve working environments, promote essential
safety of equipment and facilities, and guarantee the safety of communities.

March 28, 2024
Koji Fukada

The Kirin Group’s Goals
Lost Time Injury Frequency Rate

0.95 in 2024
0.10 in 2030

Risk Prediction and Countermeasures

Initiatives for Health Management

The Kyowa Hakko Bio Group has established an
Environmental and Safety Committee and conducts annual
risk assessments at all manufacturing sites within theGroup. Risks identified through these assessments andissues that have arisen are shared across all manufacturing
sites, and measures to mitigate these risks are establishedand implemented. Additionally, we regularly conduct
inspections of safety equipment and internal audits to drive
continual improvement.

The Kyowa Hakko Bio Group considers the health of
employees and their families to be its first priority. We haveadopted the Kirin Group’s health management policy anddeclaration as our own and are committed to promoting
health management initiatives. We accumulate data suchas employees’ health check-up results, stress check results,
and work-related information, and we provide support
tailored to the individual circumstances of each employee,rather than a one-size-fits-all approach. For details

Cultivation of Safety AwarenessConducting Employee Stress Checks

The following training is autonomously conducted at all
manufacturing sites. The methods and results are sharedwithin the Group to foster continuous improvement in our
educational practices.

Kyowa Hakko Bio has conducted stresschecks since 2016 and utilizes theresults for mental healthcare purposes.
Employees identified as
experiencing high levels of stress basedon their response results are individuallycontacted to arrange an interview withan industrial physician. For workplaces
with a high health risk based on the
results, we conduct a detailed analysis
to drive workplace improvements.

We conduct repeated training of risk prediction activities andrisk assessments. VR-based sensory education is conductedat some sites.
We provide protective gear and instruction on their proper use.
Practical procedures pertaining to the handling of chemicaland hazardous substances are provided in the Code of
Conduct. We also conduct training on how to handle thesesubstances.

Certification/External Assessments
Recognized as 2024 Certified Health & Productivity
Management Outstanding Organizations by the
Ministry of Economy, Trade and Industry and the
Nippon Kenko Kaigi. (Kyowa Hakko Bio, Kyowa
Pharma Chemical)
Recognized for achieving the labor-related standards
set forth by the Shanghai Municipal Human
Resources and Social Security Bureau in 2023.
(Shanghai Kyowa Amino Acid)

Stress check
response percentage
in 2023

92.1%
Aggregate results ofstress checks(overall health risk)

90

Establishing an Environment That Reflects
Employee Opinions
The Kyowa Hakko Bio Group recognizes the freedom toform labor unions and provides opportunities for dialogue
with employees. At sites in Japan, we exchange opinions
on occupational health and safety issues through joint
occupational health and safety committees and otheractivities involving both labor and management.

16

Community Engagement
SHE DAY & TK OPEN HOUSE ACTIVITIESWomen In Nutraceuticals (WIN)(Thai Kyowa Biotechnologies)(Kyowa Hakko U.S.A.)

We invite members of the neighboring
community, government offices, and theindustrial park to introduce our environmental and safety initiatives. This eventis held every two years, and in 2022, we
invited approximately 120 people.
Additionally, we actively engage
with local communities. For example,
we purchase soil conditioners madepartly from dewatered sludge from avendor, ensure there are no contamination risks, and then distribute them freeof charge to local farmers, along with
instructional videos on their usage. We also conduct tree
planting and cleanup activities.

Joined as a Founding Silver Sponsor. Karen Todd, Vice
President of Global Brand Marketing, was appointed thefirst Chairperson at Women in Nutraceuticals (WIN).

Charity Marathon
Employees participated in local charity marathons.

For details

Singtel - Singapore Cancer Society
Race Against Cancer 2023
(Kyowa Hakko Bio Singapore)

Banlang run Wonder Fruit(Thai Kyowa Biotechnologies)

Coastal Cleanup Activities

Wat Pha Pradoo Mini Marathon(Thai Kyowa Biotechnologies)(Kyowa Hakko Bio, Kyowa Pharma Chemical)

CSR-DIW Continuous Award(Thai Kyowa Biotechnologies)
We were awarded the CSR-DIW
Continuous Award for 2021-2022 forour participation in a CSR promotion
program led by the Department ofIndustrial Works, Ministry of Industryof the Royal Thai Government.

At Kyowa Hakko Bio’s Yamaguchi Production Center, we
carry out cleanup activities around the Hyakuma harbor
facility, where chemical solutions, glucose solutions, andother products are unloaded. Kyowa Pharma Chemical
conducts cleaning and weeding of the roads around theplant as part of their environmental preservation activities
to protect the beautiful Toyama Bay.

Other Activities

Participation in fire prevention activities(Kyowa Hakko (Guangdong) Pharmaceutical)

Donation of relief supplies and funds to Gansu earthquake area
(Shanghai Kyowa Amino Acid)

17

Related article: Kirin Holdings “Third-Party Evaluations”

Third-Party Evaluations

The Kyowa Hakko Bio Group has undergone the following third-party evaluations and announced its support and participation to the following third-party initiatives.

The Kyowa Hakko Bio Group was awarded
a silver medal in the 2023 EcoVadis
sustainability assessment.

The Kyowa Hakko Bio Group participates in SEDEX as an AB Member(Buyer/Supplier Member).
SMETA Audited Sites
Yamaguchi Production Center, Kyowa Hakko Bio (2019, plans for update)
BioKyowa (2022)
Shanghai Kyowa Amino Acid (2022)
Thai Kyowa Biotechnologies (2023)

Kirin Holdings Third-Party Evaluations
Kirin Holdings has undergone the following third-party evaluations and announced its support and participation to the following third-party initiatives.
In these, Kyowa Hakko Bio Group is included as a member of the Kirin Group.

Third-Party Evaluations

CDP Water Security A List
(eighth consecutive year)

External Signatory and Participation

CDP SUPPLIERENGAGEMENT LEADER(sixth consecutive year)

Since September 2005, the Kirin
Group has been committed to the
UN Global Compact corporate
responsibility initiative and its ten
principles in the areas of humanrights, labor, environment, and anticorruption.

18

Kyowa Hakko Bio Group’s Sustainability Data
Profile2019
Sales revenue (¥100 million)
Number of employees*1

Kyowa Hakko Bio

2020

2021

2022

2023

749

573

530

511

514

Consolidated

1,953

2,002

2,019

2,042

2,073

Japan

1,212

1,201

1,187

1,125

1,086

741

801

832

917

987

Overseas*1 The figures are as of the end of each fiscal year. They include employees loaned from other companies but not to other companies. Due to this calculation method, the number of employees may not be consistent with figures in other reports such as the Kirin Holdings’
report.

The Environment
This table includes data from the following companies.
Japan: Kyowa Hakko Bio, Kyowa Pharma Chemical
Overseas: BioKyowa, Shanghai Kyowa Amino Acid, Thai Kyowa Biotechnologies
2019

2020

2021

2022

2023

38,46528,52023,74323,963

19,264

Japan

28,66918,832

13,972

13,746

11,635

Scope 1 and 2

Overseas

9,796

9,688

9,771

10,217

7,629

Scope 1 (direct emissions)

Total recycled water use volumes inplants and offices (thousand m3)

95,54281,32976,28757,561

73,525

Volume of wastewater (thousand m3)

43,512

31,67028,03525,993

22,179COD (t)

792

534

540

799

717

Japan

202

74

96

94

85

Overseas

590

460

444

705

632

Nitrogen (t)

793

605

546

788

577

Japan

208

89

102

97

79

Overseas

585

516

444

691

498

Phosphorus (t)

8

21

27

17

11

Japan

8

7

8

6

5

0.09

14

19

11

6

Water use volumes (thousand m3)
Water
resources

Wastewater

Overseas

GHG emissions (thousand tCO2e)

Climate change

Environmental
management

Manufacturing sites certified with
ISO 14001 (as of June 2024)

Scope 3 (other indirect emissions)
GHG emissions intensity per unit of sales(tCO2e / million yen)
Use of energy (TJ)
Amount of waste generated (thousand t)
Amount of waste disposed on site (thousand t)

Waste

Amount of recycled waste (thousand t)
Final disposal volume (thousand t)
Recycling rate (%)

Air pollutants

Amount of NOX emissions (t)Amount of SOX emissions (t)Methanol (t)Acetone (t)VOC*2
Number of companies that conductedan environmental audit

Scope 2 (indirect emissions from energy use)

Substances subject to PRTR Act (t)Ethyl acetate, etc. (t)

8

0

2

2

Kyowa Hakko Bio, Kyowa Pharma Chemical,
Thai Kyowa Biotechnologies,
Shanghai Kyowa Amino Acid

4

Total (t)

2019

2020

2021

2022

2023

477
243
47
196
234

408
219
44
175
189

392
201
41
161
190

363
170
40
131
193

305
129
33
96
176

6.4

7.1

7.4

7.1

5.9

2,735
55
2
52
0.7
98.7
18
4.9
183
8
49
74
314

2,552
43
2
40
0.6
98.7
15
1.4
144
6
35
57
242

2,480
39
2
36
0.6
98.5
17
2.8
232
4
47
110
393

2,355
39
0
38
1.1
97.1
22
0.6
255
5
40
85
385

2,136
29
0
29
1.0
96.7
18
1.0
266
7
40
100
413

*2 The item covers manufacturing sites in Japan (Kyowa Hakko Bio and Kyowa Pharma Chemical).

19

SocialThis table includes data from the following companies.
Japan: K yowa Hakko Bio, Kyowa Pharma Chemical
Overseas: BioKyowa, Shanghai Kyowa Amino Acid, Thai Kyowa Biotechnologies,
Kyowa Hakko U.S.A., Kyowa Hakko Europe, Kyowa Hakko Bio Italia, Kyowa Hakko Bio Singapore, Kyowa Hakko (Guangdong) Pharmaceutical
Quality Assurance

Manufacturing sites certified under the FSSC22000 certification
Manufacturing sites certificated for compliance with pharmaceutical Good Manufacturing
Practice (GMP) standards which are set by regulatory authorities in each country

Indicator
Percentage of procurement personnel trained insupply chain policies (%)*1
Reported
number of incidents of child labor on
Sustainable Procurement
supply chain
Reported number of incidents of forced labor on
supply chain
Compliance

Percentage of compliance training participants
Percentage of sites conducting compliance risk
assessments (%)

Engagement Employee Engagement Score (%) *2
Development Percentage of employees receiving regular performance and career development reviews (%) *3

2022

100

100

100
0

0

0

0

0

0

0

0

0

0

－

－

－

93.0

96.8

100

100

72

72

－

－

－

68

－

70

Indicator
Return to work after maternity/parental
leave (%) *6

2023

2019

2020

2021

2022

2023

100

100

100

100

98.2

Male

100

100

100

100

100

Female

100

100

100

100

95.7

100

100

100

100

100

1,988

2,040

2,070

1,936

1,940

Percentage of employees covered by occupational health and safety policy (%)
Annual total working hours per employee(hours/person)
Japan

1,971

2,070

2,092

2,047

1,956

Overseas*4

2,032

1,968

2,019

1,804

1,922

100

100

100

100

Occupational accident severity rate (%)

0.011 0.017 0.015 0.031

0.096

14.5

14.3

13.5

13.2

1.07

1.01

1.82

1.50

1.57

Japan

19.5

19.7

19.7

19.1

19.4

Lost time injury frequency rate (LTIR)(number/million hours) *7

Overseas

6.8

6.9

6.9

6.4

6.6

Japan

0.51

0.92

2.02

0.56

1.40

Male

16.3

14.9

14.7

13.9

13.9

Overseas

1.67

1.12

1.55

2.57

1.78

14.9

12.8

13.0

11.9

11.2

0

0

0

0

0

Turnover rate of employees (%) *

6.4

8.2

10.5

10.9

10.9

Japan
Overseas
Percentage of female executives at Kyowa Hakko
Bio (%)

4.0
10.4

7.5
9.2

8.3
13.6

8.7
13.6

10.0
11.9

100

100

100

100

100

97.7

97.6

98.1

97.2

98.2

0.0

0.0

0.0

20.0

20.0

Japan

100

100

100

100

100

Percentage of female directors (%) *3

17.5

18.4

18.5

17.9

19.7

Overseas

93.6

93.8

95.2

93.6

96.1

Japan

8.4

10.5

10.9

12.1

12.2

Stress check response percentage*1

90.0

89.8

90.6

92.6

92.1

Overseas

33.1

30.6

30.1

31.0

34.4

95

88

86

86

90

23.8

23.9

23.8

24.0

24.7

Aggregate results of stress checks(overall health risk)*1

Japan

23.4

23.0

22.7

22.3

21.7

Overseas

24.4

25.2

25.3

26.1

27.9

FemalePercentage of female employees (%) *3

Diversity

－

2021

100

5

Employees－

2020

Kyowa Hakko Bio, Kyowa Pharma Chemical, Shanghai Kyowa Amino Acid

16.0

Average length of service (years/employee) *4

Mobility

2019(As of June 2024)

Kyowa Hakko Bio, BioKyowa, Thai Kyowa Biotechnologies

27.5

23.0

23.6

27.1

31.2

Japan

37.1

34.5

39.2

36.2

13.8

Overseas

24.6

18.4

18.6

25.3

33.9

Under 30 (%)

18.6

19.3

19.8

19.9

18.9

30 to 49 years old (%)

54.0

54.5

54.1

54.0

53.2

50 years old and over (%)

27.4

26.2

26.0

26.1

27.9

1.6

1.6

1.6

1.4

1.4

Japan

2.2

2.3

2.4

2.2

2.2

Overseas

0.5

0.5

0.5

0.4

0.4

Percentage of female employees among new hires (%) *3

Percentage of employees by age group (%) *3

Percentage of employees with disabilities (%) *3

Employees

Healthand Safety

Number of employee fatalities due to occupational accidents *7
Percentage of employees covered by medical
coverage (%) *3
Percentage of employees taking periodic
health checkups (%)

Unless otherwise stated on this page (and in the indicator data of the same name on other pages), calculations are based on
full-time employees.
*1 Scope includes only Kyowa Hakko Bio (non-consolidated).
*2 Scores from employee engagement surveys (including full-time employees, part-time employees, and dispatch and contract
workers) are calculated as a weighted average based on the number of respondents.
*3 Kyowa Hakko Bio Singapore included from 2020.
*4 Shanghai Kyowa Amino Acid included from 2020. Kyowa Hakko Bio Singapore included from 2021.
*5 Number of permanent employees who left their jobs during the year / Number of permanent employees at the end of the year
(resignations include voluntary resignations, company-initiated resignations, retirements, and deaths during employment).
*6 Kyowa Hakko Bio Singapore included from 2020. Shanghai Kyowa Amino Acid included from 2021.
*7 Scope includes all production sites of the Kyowa Hakko Bio Group.

20

Indicator
Percentage of employees covered by collective bargaining agreements (%) *1

2019

2020

2021

2022

2023

70.4

70.5

71.3

72.0

72.6

Japan

74.7

74.4

73.7

72.4

71.7

Overseas

63.3

64.6

67.9

74.1

73.5

Percentage of employees covered by humanrights policy (%)
Labor
Percentage of employees trained in human
Employees
Practices rights (%) *1
Percentage of sites that provided opportunities for learning about human rights (%) *1

100

100

100

100

100

96.9

70.8

94.5

91.3

94.3

100

100

100

100

100

Number of grievances related to labor practices or human rights impacts that werefiled, addressed, and resolved through formal
grievance mechanisms *1

2

6

4

3

3

Definition of Disclosed Data
Unless otherwise indicated, the disclosed data is rounded to the appropriate number ofdigits. Since each item is rounded, the total may not match the sum of the breakdown.

Environmental Data Calculation Methods
Usage Factors

Energy Use Conversion Factors
FuelElectricity
Steam“Act on the Rational Use of Energy” Factors
Used 3.6 (MJ/kWh), which is used by International Energy Agency (IEA) and otherorganizations
Theoretical calorific value (1 MJ/MJ) on the consumption side.

Emission Factors for GHG Emissions
Fuel, steam

・Emission factors from Greenhouse Gas Emissions Calculation and Reporting Manual(Ministry of Environment/Ministry of Economy, Trade & Industry)・USA - GHG Emission Factors Hub (Bio Kyowa Inc.)

Electricity

Emission factors published by individual power companies. If none published: Emission factors
by country from IEA’s Emission Factors for the year in question

Scope3

DEA (Inventory Database for Environmental Analysis: LCA database provided by the
National Institute of Advanced Industrial Science and Technology (AIST)) is used to theextent possible in calculations after 2019 (Using IDEA versions 2.3, 3.1, 3.2, and 3.3). In
addition, literature values such as the Ministry of the Environment's emissions intensity
database and LCA reports for each industry are used.

Calculation Method
Kyowa Hakko Bio Group’s GHG emissions are calculated in accordance with the Kirin
Group’s policy, which is based on the GHG Protocol. For details, please refer to the“Environmental Data Calculation Method” in the Kirin Group ESG Databook 2024. In doing
so, retroactive adjustments have been made to prior years’ data to exclude Kyowa Hakko
Bio’s alcohol business (which was transferred to Mercian in 2020).

21