Addressing Climate Change

Reduction of CO₂ Emissions

CO₂ and fluorocarbons are the main causes of global warming. The reduction of these emissions is therefore a global issue. The Taisho Pharmaceutical Group is engaged in reducing the emission of CO₂ and fluorocarbons as a company with responsibility for dealing with climate change.

• * Basis for setting target year: Target fiscal year prescribed in Japan’s Intended Nationally Determined Contribution (INDC) (July 2015)
  Basis for setting target figures: “The Commitment to a Low Carbon Society” issued by The Federation of Pharmaceutical Manufacturers’ Associations of Japan

Total Emission Volume from Offices in Japan (Scopes 1 & 2)

In fiscal 2019, we undertook measures such as upgrading to equipment with higher energy efficiency focused on factories and research centers in Japan and reviewing the conditions for using air conditioning. CO₂ emissions increased by 0.0% (15 tons) compared with the baseline year, but decreased by 4.2% compared to the previous fiscal year. Because emission coefficients for electricity increased in fiscal 2019 compared with the baseline year, CO₂ emissions also increased. However, usage amounts for electricity and fuel are being reduced compared with the baseline year.

CO₂ Emissions (Scopes 1 & 2) and Basic Unit of CO₂

• *1. Gas used for calculation: Energy-derived CO₂
  Coefficient used for calculation: As stipulated by the Act on Promotion of Global Warming Countermeasures
  Scope of calculation: Offices in Japan (Taisho Pharmaceuticals Head Office, branches, distribution centers, factories and research centers)
• *2. Direct greenhouse gas emissions produced by a company
• *3. Indirect greenhouse gas emissions from consumption of purchased electricity, heat and steam
• *4. CO₂ emissions (Output (Scope 1 + Scope 2) / Sales (consolidated))

Overseas Factory CO₂ Emissions (Scopes 1^*1 & 2^{*1, *2})

• *1. Gas used for calculation: Energy-derived CO₂
  Coefficient used for calculation: Taken from “CO₂ emissions from fuel combustion 2019”
• *2. Location-based method

Scope 3 CO₂ Emissions

CO₂ in the value chain (Scope 3) and basic unit of CO₂ emissions

• *1. Direct greenhouse gas emissions produced by a company
• *2. Indirect greenhouse gas emissions from consumption of purchased electricity, heat and steam
• *3. Indirect greenhouse gas emissions not covered in Scopes 1 & 2
• *4. Gas used for calculation: Energy-derived CO₂
  Coefficient used for calculation: From the emission basic unit database (ver. 3.0) for organizations to use when calculating greenhouse effect gas emissions generated throughout their supply chains.
  Scope of calculation: Offices in Japan (Taisho Pharmaceuticals Head Office, branches, logistics branches, factories and research centers)
• *5. CO₂ emissions (Scope 3) / Sales (consolidated)
• *6. CO₂emissions (Scope 1 + Scope 2 + Scope 3) / Sales (consolidated)

CO₂ Emission Volume Associated with Sales and Transport, etc.

Regulation on Saitama Prefecture Global Warming Strategy Promotion Ordinance (Offices in Saitama Prefecture)

Approximately 80% of Taisho Pharmaceutical’s CO₂ emissions are produced within Saitama Prefecture, including the Omiya and Hanyu factories, along with the Research Center.

At offices in Saitama Prefecture, we are pursuing a reduction in the average amount of CO₂ emissions by 13% for the second plan period (fiscal 2015 to fiscal 2019) when compared to the baseline year (average from fiscal 2002 to fiscal 2004) with a system for planning global warming countermeasures in accordance with Regulation on Saitama Prefecture Global Warming Strategy Promotion Ordinance.

During fiscal 2019, efforts to improve energy efficiency at the Hanyu Factory resulted in a 15.0% reduction in CO₂ emissions, compared to the previous fiscal year. The average annual rate of reduction in the second planning period is 12.7%. We will appropriately address the shortfall in CO₂ emissions reduction against the target in accordance with the obligation to make efforts described in the “Target-Setting Emissions Trading Program” in Saitama.

Trends in the Amount of CO₂ Emissions for the Second Plan Period for Global Warming Countermeasures

• * The calculation for CO₂ emissions uses emission coefficients presented in the Regulation on Saitama Prefecture Global Warming Strategy Promotion Ordinance

Participation in FPMAJ’s Low-Carbon Society Project

To contribute to a low-carbon society, Taisho Pharmaceutical is participating in the Low-Carbon Society Project led by the Federation of Pharmaceutical Manufacturers’ Associations of JAPAN (FPMAJ).

Promotion of Environmentally Friendly Offices

• *1. Energy consumption rate
  Factories, research centers: Energy consumption (kL) / Number of production lots (hundred million) {or production (hundred million yen)} x Floor area (m²)
  Sales and back offices: Energy consumption (kL) / Floor area (m²)
• *2. In order to continue to receive “A-class or higher,”
  the following conditions have to be avoided:
  · Energy consumption rate of 100% or more for two consecutive years
  · Average consumption rate is 105% or more for five consecutive years

Taisho Pharmaceutical will continue to work on eliminating CO₂ emissions in the medium and long terms, and also on improving the energy consumption rate, for the purpose of using limited energy.

In fiscal 2019, we replaced equipment to improve energy efficiency and undertook other initiatives to reduce energy waste at factories and research centers. However, the energy consumption rate increased 3.0% year on year. The increase in the energy consumption rate reflected the strengthening of raw materials storage temperature management at factories in summer and a decrease in total floor area, chiefly due to the removal of warehouses. Anyway, we maintained a Class A evaluation under the Energy Conservation Act system, which was our goal.

Change of Energy Consumption Amount (Calorific Value) and Energy Consumption Rate

Measures to Save Energy and Reduce CO₂ Emissions in Fiscal 2019

Promotion of Environmentally Friendly Logistics Operations

The annual amount Taisho Pharmaceuticals transports as a cargo owner is 30 million ton-km or more, so we fall under the category “Specified Shippers” in the Energy Conservation Law.
We are undertaking activities that include promoting a modal shift (changing transportation methods to reduce environmental load), reducing transportation frequency, and improving fuel efficiency to reduce energy consumption during transportation.

In fiscal 2019, the energy consumption rate fell 3.2% year on year. The five-year average improved 0.7%. In fiscal 2019, we improved transportation efficiency by encouraging the use of heavy-duty trucks and increasing the proportion of shipments transported by railroad.

Energy Consumption Rate and Specific Energy Consumption Associated with Transport

• * Energy consumption rate: Energy consumption (kL) / Amount transported (10,000 ton-km)

Control of Fluorocarbon Emissions