ESG briefing

March 24, 2020/48

Today's program

1. Corporate philosophy and sustainability
2. Corporate governance

3. Medium- and long-term environmental
vision and management
4. Creating social value

1/48

Corporate Philosophy

Our Vision is to strive with the utmost effort and strong determination to meet the challenge of combining ourindividual competencies to deliver new, innovative drugs to patients. We will continue being the most passionate
champion in the fight against disease and pain, together with patients, their families, and healthcare providers.

What we are trying to achieve is to meet a challenge that nobody has ever successfully overcome before. It istherefore vital that we bring together our greatest wisdom, heart, aspirations and power as a united team.

We will inevitably come up against brick walls when we are facing unprecedented challenges. When we encountersuch obstacles, we should unhesitatingly rise to confront them and unflinchingly persevere in applying our ingenuity
to overcome them.

We should never lose the sense of dignity and pride we feel as people working in the pharmaceutical industry. Weshould be the bringers of hope for all those around the world who are waiting for us to deliver solutions.

2/48

For Growth of the Company

3/48

Materiality Analysis

4 /48

Materiality Map (important items excerpt)

5/48Relevant Sustainable Development Goals (SDGs)
Materiality

Relevant Goals

6/48

Our Contribution to the SDGs

7/48

External ESG Evaluation
Evaluation

FY2017

CDP

Climate Change:AWater:B

FTSE

Score:2.8/5.0

Selected
Score:3.2/5.0

Selected
Score:3.4/5.0

MSCI

Score:BBB

Score:BBB

Selected
Score:A

DJSI

Score:16/100

Score:19/100

Score:60/100

Toyo Keizai
CSR Ranking

Rank:254/1413
companies

Rank:180/1501
companies

Rank121/1593
companies

Nikkei Smart
Work surveyー★★★

Nikkei SDGsーー★★★★★

White 500

2020 Health &Productivity StockWhite 500 8/48

Survey on Healthand Productivity
Management

Top 60~70%/1239 companies

FY2018FY2019Climate Change:A Climate Change: A
Water:B
Water: A-☆

★★★★☆

ESG-related Awards
ESG Finance Awards Japan in FY2019

Environment Minister's Award for Global Warming
Prevention Activity in the "Implementation andDissemination of Countermeasures" Categoryin FY2019

Osaka Stop Global Warmings Award in FY2018

9/48

CSR Promotion Structure

10/48

Today's program

1. Corporate philosophy and sustainability
2. Corporate governance

3. Medium- and long-term environmental
vision and management
4. Creating social value

11/48

G: Corporate Governance Structure

12/48

G: Efforts to Enhance Governance2011
Corporatephilosophy

2013

2014

2015

2018

2019

● Conceptual framework ofmission established● Executive officer system introduction(Management oversight and execution separated; rolesdefined)

Number ofdirectors

11 → 8Outside auditors

2017"Dedicated to man's fight against disease and pain"

Separation ofmanagementoversight andexecution

Outside directors

2016

8→9

● Scope of authority delegated toexecutive officers expanded (agendacriteria reformed)● Matters for reporting
expanded

9→7

7→8

3

22 (Attorney and CPA)

● 1 female company auditor appointed● Officer personnel affairs meeting set up

Officers'
compensationand officer
appointment
Evaluations ofboard of directors’
effectiveness● Officer remuneration meeting set up● Incentive stock option program introduction● Annual evaluations of board of directors’
effectiveness

13/48

G: Outside Directors (Independent Executives)Three out of 8 directors are outside directors with the aim of strengthening theoversight function of the Board of Directors, maintaining and improving
management transparency and the accuracy of business execution.

Yutaka KatoProfessor, Doshisha Business School

He supervises the company‘s
management not only in specialized
fields (management accounting andcost accounting) but also from theperspective of business administrationin general. He has a wealth ofexperience in human resource
development such as undergraduate
training and MBA guidance.

Jun Kurihara

Masao Nomura

Research Director, The Canon Institute for
Global Studies Visiting Professor, School ofPolicy Studies,Kwansei Gakuin University

Senior Adviser to the Board, Iwatani
CorporationOutside Director, Keihanshin
Building Co.,Ltd.

As a researcher specializing inpolitical economy, corporate
strategy, etc., he oversees themanagement of the company
from an international perspective.
He has also abundant
knowledge on governance andrisk measures.

As an experienced president ofa listed company, he leads andoversees the company's
management based on his
experience of making many
complex business decisions.

14/48

G: Officer Personnel Affairs and Remuneration Committees
Two committees led by highly independent outside directors as key members
ensure management transparency and objectivity by discussing officer personnel
affairs and officer remuneration, both of which have governance-related
importance.
Internal directors

Independent outside directors

Gyo Sagara

Kei Sano

Yutaka Kato

Jun Kurihara

Masao
NomuraOfficer personnel affairscommittee

Chairperson〇〇〇〇

Officer remunerationcommittee

Chairpersonー〇〇〇

Officer personnel affairs committee

Officer remuneration committee● Vets executive officer, director and company
auditor candidates● Deliberates successor plans● Evaluation regarding fixed and performancelinked remuneration and deliberation ofremuneration amounts● Provides supervision to ensure theremuneration system function in a way thatencourages sound growth
15/48

G: Directors' Remuneration
Directors (not including outside directors)

Fixed remuneration(about 70%)

Set by referencing executive compensation databases
and accounting for business size of the company,position, etc.

＋
Performance-linkedremuneration(about 30%)
・ Bonuses
・ Share compensationstyle stock option system

Sound incentives aimed at ensuring sustainable growth⇒ achievements assessed from comprehensive angles
・ Performance indicators (sales, operating profit, etc.)
・ Qualitative indicators (linkage to medium-term management goals)
・ External factors, etc.

16/48

G: Evaluations of Board of Directors’ Effectiveness
Effectiveness of the board of directors annually by all of the directors and company auditors
Self-evaluation conducted using questionnaires and interviews, results of which are used to improvethe board

Questionnaires

Response toimprovement
proposalsIssues and improvement policy
sharedReview
by board

Questions highlighting
corporate governance codeInterviews
Evaluation of operation, etc.
of boardAggregation/analysis

Contributes to monitoring modeloriented governance reforms● Board make-up⇒ Appointment of individuals
experienced in management● Agenda for board meetings⇒ Delegation of authority to executiveside● Board oversight function⇒ Expansion of matters for reporting

17/48

G: Cross-shareholdings
About 30% reduction planned for cross-shareholdings from the level at end of March 2018(111 issues totalling 167.1 billion yen) over the next three years starting from November
2018, aiming to improve capital efficiency and keep pace with changing environment
surrounding corporate governance code

end-Mar 2018

Number of issues

111

end-Sep 201984

Change- 24.3 %Amount on balance sheet

167.1 billion yen

146.1 billion yen- 12.6 %End-Mar 2018 marketvalue

167.1 billion yen

147.2 billion yen- 11.9 %18/48

G: Company-wide Risk Management

19/48

G: Issues Going Forward

20/48

Today's program

1. Corporate philosophy and sustainability
2. Corporate governance

3. Medium- and long-term environmental
vision and management
4. Creating social value

21/48

E:Environmental VISION（FY2019~）

22/48

E:Promotion of Environmental Management

Status of acquisition of ISO 14001 certification

Production site nameFirst acquired inFujiyama Plant

November 2002

Joto Plant

February 2004

ISO 14001 acquisition percentage for
production sites

100%*Production sites in operation are 100% ISO14001 certified.
23/48

E:Science Based Targets (SBT) Approval

・Our mid- to long-term greenhouse gas reduction targets are approved
by SBT as having a scientific basis.
・Our goal is categorized as the highest goal, “1.5 ℃”.

24/48

E:Emission reduction activities

25/48

E: Reducing Environmental Impact of Products

26/48

E: Policy Direction Going ForwardMeasures to address recommendations by Task Force on Climate-related
Financial Disclosures (TCFD)・ We expressed endorsement in October 2019・ We will step up measures to address the following TCFD recommendations:•Access https://www.fsb-tcfd.org/ for more information about TCFD.

27/48

Today's program

1. Corporate philosophy and sustainability
2. Corporate governance

3. Medium- and long-term environmental
vision and management
4. Creating social value

28/48

S:Improving Medical Access

29/48

S:Improving Medical Access

30/48

S:Development of Human Resources

31/48

S:Development of Human Resources【Training for selected employees】
Objective：Foster awareness and autonomy as management

Major training curriculum（For executives）※Management discussions including exchanges with other companies' executive classes●Future vision●View of management●Decision making
Major training curriculum（For managers）※Set curriculum according to manager's position●Understand the overall picture of management●Imagination●Leadership●Social significance / sense of mission【Global training】
Objective：Develop human resources who can play an activerole globally and demonstrate leadership
Major training curriculum●Environmental adaptability, leadership, global business skills

32/48

S: Goal of Work-style Reforms and Health and Productivity Management

33/48

S: Conceptual Framework of Work-style Reforms from FY2015
Conceptual
diagram ofour activity

Create a company that will last in the next 100 years

Maximize
producevalue

Realize corporate philosophy

Improved motivation

CSR activity
Enhance benefits and welfare
Report on efforts within company
programs
and externallyImprove office environment
Efforts on health and productivity Strengthen structure to promote
activities
management(creation of evaluation systems,
Share achieved value withetc.)
employees and society

Secure great talents

Create attractive
workingenvironment

Improveproductivity

Identify Divisions/departments/sections
and reduce
overquality
Make duties/tasks visible
Authority delegation
Strengthen organization
Raise skill levels

Maximize impact of strategies

Improve operational
efficiency

Growth of individuals
and company

Review work style

Reform
R&D
processes

Seek toestablish ourown saleschannel in
Europe andU.S.

Reinforcebusiness
infrastructure

13/26

34/48

History of Efforts (Action)
20152016■President declaration■ Employees encouraged totake paid leave■ No-overtime days

■ Meetings visualized andreduced■ Information brochure
to employees distributed■ Stock-taking of tasks;
priority checks■ Tools created to eliminate
doubling of tasks■ Sharing of information■ Lectures on presentation
skills

2017

2018

2019

■President declaration■President declaration■ Commendation system■ Encouragement of paid

■ Roles set for all

introduced

leave (setting goals)

employees■ Change in company-wide■ Awareness raising■ Change in company-themes for improving efficiency

about goals

wide themes for■ Roles set for persons in

improving efficiency

chargeEnhanced coordination→ Improved skills■ Participation in externalseminars■ Company-wide themes■ Training programs on time
management and leadershipset for improving

・ Overquality reduction
・ Duties/tasks visualized
・ Structure creation

efficiency
・ Overquality awarenessreduction
・ Delegation of authority
・ Coordination enhanced

Self-propulsion
Penetration
Adaptation
Understanding
Recognition
35/48

History of Efforts (System)
20152016

2017

2018

2019

■ Child-care support system
brochure created■ Commissioned rehiree■ Support for employees withcancer■ Membership in employee■ Flex time system expanded■ Child-care leave period
extendedsystem■ Scope expanded for cumulative
paid leaves

welfare club

■ Manual for short working■ Sick child care support

hours system for child care

■ Male employees encouraged totake paternity leave■ Support for employees

posted■ Child care participationencouragement leave introduced

seeking child care

■ Hourly paid leave system

expanded■ Self-learning support

introduced■ Trial introduction of■ Full introduction of remote workexpanded■ Platinum Kurumin

remote work

■ Staggered work hours system
partially introduced■ Social contribution

certification obtained■ Retiree rehiring program
expanded■ Follow-up during leave (PCsloaned)■ Scope expanded for
cumulative paid leaves(child/nursing care)■ Orientation for child careleave returnees introduced■ Day care facility andbabysitter support program
introduced■ Flextime system■ Pregnancy test leave■ Efforts on health andproductivity management started■ Office environment improved■ Support to employees returningfrom leave for mental issues(donations)■ Guidance for expectingparents■ ONO SWITCH Project■ Assigned paid leave

36/48

Support for Employees with Cancer (from 2017)
We want to create an environment where employees with cancer
can continue work while receiving treatment.
Introduction/expansion of various systems■ Extension of leave length■ Payment of injuries and sickness benefits■ Permission to take cumulative paid leave (expired paidleave)Distribution of handbook■ Plan created for support to employees returning
to/commencing work
(HR, supervisors, primary/industrial physicians)■ Rehabilitational work
■ Reduced working hours■ Break hours and locations secured■ Remote work
■ Promotion of awareness/understanding amongsupervisors, colleagues and subordinates■ Handbook created and distributed

37/48

Sharing of Achieved Value (from 2018)
We want employees to feel results of their effort.
Families withmembership in
welfare club can use
it; other enhancement
to welfare programs

To employees andtheir families～Enhanced welfareprograms～

Decided based onsuggestions by generalemployees (working group)→ We want families to be happy.
(support for private life)

Content of self-development
and benefit amounts expandedReduced overtime
All expected amount ofreduction returned

Toemploye
esParticipation inONO SWITCH Project(separately paid by company)

Tosociety～Donations～～Education～→ We want them to take advantage of it for their personal growth.

→ We want to contribute to society.

38/48

ONO SWITCH Project (from 2018)
SWITCH: Save the World by our work style ImprovemenT and CHange
Specified ratio of expected reduction

Paid separately by company

To society～Donations～

A program under which a specified ratio of saved overtime-pay
amount is donated to nonprofit or nongovernmentalorganizations SWITCH work style SWITCH saving gained through work style reforms to donations
 SWITCH on efforts to change work style～Donation in 2018～

Total 7.74 million yen donated～Donation in 2019～

Total 9.51 million yen donated

39/48

Promotion of Health Management (from Apr 2018)
Basic policy
１．We will promote the maintenance and improvement of the health of employees and their families through theHealth Up Committee, consisting of representatives from the company, labor unions, occupational health staff,

Systemand health insurance society.

２．Employees will actively engage in health management for themselves and their families.

Self-management

Major efforts being made① To realize completely non-smoking premises according to passive smoking countermeasures.
Prevention of passive smoking〔From April 2019, we have completely smoked off the premises.〕② To proactively support measures from disease prevention and early detection and treatment
to reinstatement.

Physical〔We carry out medical checkup (35 years old or older), consultation recommendation to those requiring treatment,
and specific health guidance to all subjects.〕③ To promote supports for the prevention of mental disorders, early detection, and prompt
responses, to reinstatement and prevention of recurrence.

Mental〔We promote self-care training, line care training, individual interviews with occupational health staff, and workplace
improvements based on the results of organizational analysis of stress checks.〕④ To develop an environment where employees proactively work on healthmaintenance/improvement.

Self-management〔We provide a portal site for viewing medical examination results, walking campaigns, smoking cessation support,and so on.〕40 /48Structure to Promote Health Management
Unified effort of company, labor
union, health insurance society
and public health nurses

41/48

Health Improvement Declaration (2018)
Our target state (president's message)
We wish to contribute to society by developing innovative drugs under
the corporate philosophy, "dedicated to man's fight against disease andpain."
We believe that, in order for us to be able to continue to face challenges
on our path to realize our corporate philosophy, all of our employees arehealthy both mentally and physically, our work places can maximize theirabilities, and their and their families' are leading fulfilling life.
Therefore, we hereby declare that we will actively work to maintain andimprove health of our employees and their families through a coordinatedeffort of employees, the company, the labor union, industrial health staff
and the health insurance society.
April 2018
Ono Pharmaceutical Co., Ltd.
Gyo Sagara, president and CEO

42/48

Trends in Health Management Survey Results

43/48

Evaluation related with Human Resouces

Selected in 2020 Health & Productivity Stock

Selected as a 2020 Certified Health & Productivity
Management Outstanding Organization(White 500) for 2 consecutive years

Platinum Kurumin
Certified as a high-level child-rearing
support company
44/48

S: Strengthening Supply Chains
We need to strengthen supply chains in CSR aspects, in addition to procurement QCD.
Companies

Partners

45/48

S: Strengthening Supply Chains

46/48

S: Medical and Health
Healthy Body Campaign

Diabetes

We started this project as areconstruction assistance activity fromthe Great East Japan Earthquake in2015.

FY2015～

Communicate & Link exhibition

Dementia

A panel of 150 works that have passed thefirst judging out of 1,000 works publishedon the WEB will be held in Midtown for a
total of three days.

Dementia classes
The classes (targeting junior high school
students and high school students) focusing
on dementia are the effort we make tohave children consider dementia.

Cancer

FY2013～

Relay for Life
Relay for Life is a charity activity aiming
to deal with and overcome cancer.

FY2014～FY2014～47/48

Our Approach to ESG

48/48

/48