Materiality

STEP 1: Compiling material issues

By referring to information^* such as international guidelines and questionnaire factors evaluated by SRI assessment organizations,^* we reviewed global societal issues and trends in ESG expectations to compile material issues which we should consider.

^*The United Nation's Sustainable Development Goals (SDGs), GRI Standards, ISO26000, Dow Jones Sustainability Indices, FTSE4Good, MSCI, etc.

STEP 2: Narrowing down material issues

We narrowed down the material issues based on the expectations obtained through dialogues with our stakeholders.

STEP 3: Prioritizing material issues

The material issues were classified and prioritized in terms of their "Societal Significance (based on the expectations of various stakeholders and social demand)" and "Importance to Sumitomo Pharma's Business."

STEP 4: Deliberating and determining material issues

We conducted materiality assessment through deliberation at the Management Committee to determine the material issues and shared them with all of the Directors in the Executive Committee.

Based on stakeholder dialogue, we divided our materiality into the two categories below.
1．Materiality linked to value creation, which is highly unique and vital for the sustained growth of Sumitomo Pharma
2．Materiality that forms the foundation for business continuity, which is essential for the continuation of our business activities

Below are the reasons for the selection of the main material issues and how they are linked with value creation.

Development of innovative products and healthcare solutions, Contributing to the development of science
The development of innovative products and healthcare solutions to address unmet medical needs is our business and the source of value creation. We can also contribute to the development of science through drug discovery and research, product development, and clinical development.

Training and development of employees, Work Style Innovation, Diversity & Inclusion
A business is composed of its employees. Upgrading the capabilities of employees, improving labor productivity, and effectively utilizing human resources is essential for our sustained growth.

Contribution to global health, Initiatives to improve access to medicines
Sumitomo Pharma engages in drug discovery and research in the areas of malaria and antimicrobial resistant (AMR) infectious diseases. We also strive to improve access to our products for patients who need them, including responding to requests for development of unapproved and off-label drugs in Japan and public education aimed at improving medicine-related literacy. Such efforts contribute to global health in addition to expanding our business.

Changes to Some Material Issues

1. There are no changes in the area of "Material issues linked to value creation." "Development of innovative products and healthcare solutions" referred to psychiatry & neurology, oncology, regenerative medicine/cell therapy, infectious diseases, and frontier business, but we have deleted the reference to specific areas given that we will also focus on other areas in addition to these five.

2. In the area of "Material issues that form the foundation for business continuity," given rising global concern in human rights, we have made an adjustment to further address respect for human rights through all of our business activities, and divided "CSR procurement (respecting human rights)" into "Respecting human rights" and "CSR procurement."

Click here to see more about our initiatives on human rights.

Establishing Materiality Qualitative Targets

In striving to achieve sustained growth and enhance corporate value, we have established qualitative targets for each material issue after a series of deliberations at the Management Committee. Because the present targets are a mix of Group-wide targets and targets in Japan, we have decided to continue revising them going forward to create more appropriate targets based on our business strategy.