Messages from the Management

Deepening CSR-Based Management to Achieve Sustained Growth

Our Approach to CSR-Based Management

Hiroshi Nomura, Representative Director, President and CEOHiroshi Nomura
Representative Director,
President and CEO
Sumitomo Pharma Co., Ltd.

Sumitomo Pharma defines the practice of its Corporate Mission, "To broadly contribute to society through value creation based on innovative research and development activities for the betterment of healthcare and fuller lives of people worldwide," as CSR-based management.

We implement CSR-based management through creating innovative pharmaceuticals and healthcare solutions and contributing to the development of science as well as respecting human rights, maintaining and reinforcing the corporate governance system, promoting work style innovation and diversity & inclusion, strengthening employee development, contribution to global health, improving access to medicines and taking environmental initiatives.

In recent years, corporate sustainability initiatives have attracted attention from a variety of perspectives, including environmental, social, and governance (ESG) practices and the United Nations Sustainable Development Goals (SDGs).

I consider that implementing our Corporate Mission diligently will help us to address social challenges and contribute to sustainable development of society.

With regard to the SDGs, while concentrating most efforts on Goal 3: Good Health and Well-being, we are also actively addressing Goal 8: Decent Work and Economic Growth, Goal 12: Responsible Consumption and Production, and Goal 17: Partnerships for the Goals.

Creation of Innovative Pharmaceuticals and Healthcare Solutions, and Contributing to the Development of Science

With the aim of becoming a corporate group with solutions to a range of social issues in a changing global healthcare environment, we are committed to becoming a global leader in our three focus areas of research; Psychiatry & Neurology, Oncology, and Regenerative medicine/Cell therapy.
We strive to pursue the sustained growth and enhancement of corporate value by further refining our strengths to appropriately respond to the healthcare needs of society and solve the health-related issues of people.
As the population ages further, addressing psychiatric and neurological disorders is expected to become an even bigger societal issue and we will continue working on these areas where we can demonstrate our largest strengths.

In addition, oncology is an area with high unmet medical needs where effective treatment methods have not been sufficiently established though many options seem to be provided.

We are also working hard in the Regenerative medicine/Cell therapy field to provide solutions for patients for whom there is no adequate treatment option, as well as treatments for radical cures.

In providing healthcare solutions for unmet medical needs, there is no doubt that pharmaceuticals will continue to play an important role; however, we understand that the health-related issues of people cannot be solved with pharmaceuticals alone.

To meet a wider range of needs, we are promoting new areas of research, development and commercialization of the Frontier Business that goes beyond drug treatments and transcends the existing boundaries of pharmaceutical companies.

We will continue to contribute to society as a corporate group which provides a range of healthcare solutions for every situation from illness prevention to physical therapy, social welfare, and caregiving, in addition to distinctive pharmaceuticals for each area.

Respecting Human Rights

Recognizing the growing importance that the international community attaches to human rights, Sumitomo Pharma, which engages in business around the world, supports the spirit of international fundamental principles of human rights and promotes initiatives for respecting human rights in accordance with the United Nations Guiding Principles on Business and Human Rights.

We have established SMP Group Human Rights Policy in March 2022 in order to further promote our ongoing initiatives to improve a working environment and respect the human rights of our business partners including our suppliers and all of our stakeholders, while we comply with laws and regulations of labor and employment in countries and regions where we operate. Through these initiatives, we will fulfill our corporate social responsibilities.

Maintaining and Reinforcing Corporate Governance System

Sumitomo Pharma commits itself to continuously pursuing the establishment of a corporate governance system which is highly effective, aiming for the fuller realization of our Corporate Mission and Management Mission. We have elected four Independent Outside Directors and three Outside Audit & Supervisory Board Members, as we endeavor to ensure the transparency and integrity of management. These elections allow us to implement agile and proactive corporate management, as well as make steps to enhance and reinforce internal control.

The Company conducts an annual evaluation of the effectiveness of the Board of Directors and, based on the results of the previous year's evaluation, identifies major agendas to be addressed during the current year. Major agendas to be addressed in fiscal 2022 are "Effective supervision of the management through more efficient and effective monitoring of material items," "Constructive discussions on material issues & medium- to long-term business strategies," and "Deepening of discussion regarding issues related to sustainability". The Board of Directors of the Company is determined to further enhance its functions, while addressing these agendas.

While Sumitomo Chemical Co., Ltd. is our parent company, there are no restrictions by the parent company on our conduct of business activities (such as prior approval by the parent company), and a certain level of independence has been ensured. The Supervisory Committee for Conflict of Interests in Transactions between Group Companies established as an advisory body to the Board of Directors and composed of all the Independent Outside Directors, deliberates on material transactions with the parent Company's Group from the perspective of protecting the interests of minority shareholders.

Furthermore, with the aim of maximizing Group-wide corporate value, we have established corporate rules on operational management so that management of our subsidiaries is conducted appropriately. We have set up departments to manage each subsidiary, as well as departments, that oversee this management, and we strive to understand the status of management and business execution at subsidiaries while providing the appropriate support for business execution.

Achieving Sustained Growth and Enhancing Corporate Value

In order to continue to serve the world as a valued company that delivers innovative and effective pharmaceuticals to people, we focus all our efforts on researching and developing new pharmaceuticals. We believe that the purpose of CSR-based management is to fulfill the expectations of all stakeholders through its activities. In order to attain this goal, it is important that we continuously create new value by building a flexible and efficient organizational foundation instilled with a CHANTO mind set, while conducting corporate activities in accordance with the Declaration of Conduct.

While keeping "taking on challenges," "self-disciplined and independent," and "collaborative with peers" as our basic stances, we will continue striving for sustained growth and enhancement of corporate value going forward by contributing to solving social issues as a Group in Japan and overseas.

Finally, on behalf of Sumitomo Pharma, I would like to express my sincere gratitude to all stakeholders for your interest in the Company and ask for your continued understanding and support.

Promoting CSR-Based Management through Activities based on Declaration of Conduct and Establishment and Updating of Material Issues (Materiality)

Establishing and Updating the Declaration of Conduct

Naoki NoguchiNaoki Noguchi
Executive Officer
Corporate Governance;
Corporate Communications;
Sumitomo Pharma Co., Ltd.

Sumitomo Pharma has established the Declaration of Conduct as a concrete expression of the values and fundamental principles that form the platform for the realization of the Company's Corporate Mission and Management Mission. The Declaration of Conduct is the basis for action and decisions when officers and employees engage in day-to-day business. We are committed to providing truly desirable pharmaceuticals and healthcare solutions continuously through our business activities, in line with our Declaration of Conduct and fulfilling our responsibilities as a corporate citizen. We regularly review the content of the Declaration of Conduct and its guidelines, called the Declaration of Conduct (Practical Guidelines), and have updated it as of April 1, 2022 in accordance with changing social expectations and demands regarding its corporate activities.

Continuous Review and Revision of Materiality

Sumitomo Pharma has identified the material issues to be addressed in the Company's CSR-based management through business activities and has prioritized them in the form of Materiality Map, while setting targets for each material issue as guidelines for the promotion of CSR-based management.

The Company first identified the material issues (materiality) for CSR-based management in July 2018. Since then, we have regularly reviewed material issues and the Materiality Map (a priority list of the issues to be addressed) based on social changes, the progress of our initiatives, and feedback from our stakeholders. In June 2021 we established key performance indicators (KPIs) to manage the progress of each material issue. In developing KPIs, we sought advice from experts through dialogue at meetings including ESG meetings and discussions with board members and members of the Management Committee. We believe these discussions enabled us to establish KPIs that are unique to the Company, rather than those that can be applied to any company, ensuring our achievement of sustained growth and promote CSR-based management. One of our material issues linked to value creation is "Development of innovative products and healthcare solutions." As one of the KPIs to measure the progress of our unique material issues, we are considering establishing indicators for the development of a next-generation antipsychotic that would lead to a revolutionary treatment in the psychiatry area, and projects in the Regenerative medicine/Cell therapy field to assess the degree of progress on an ongoing basis.

Work Style Innovation, Diversity & Inclusion, and Training and Development of Employees

Sumitomo Pharma considers Work Style Innovation, Diversity & Inclusion, and Training and Development of Employees as material issues linked to value creation. With our basic concept of work style innovation, which is to build a win-win relationship between employees and the Company to enable employees to work with a firm sense of fulfillment and produce results, it is our aim that each and every person will fulfill their own roles and produce results in the limited time. In the circumstances of the COVID-19 pandemic, we continued efforts to enhance improving productivity by achieving results while enjoying work through work-life balance, which can become blurred when teleworking. Going forward, we will aim to maximize results through pursuing more sophisticated work styles while promoting virtuous cycle in work-life balance.

We have worked to create an environment that enables every employee to demonstrate their full potential irrespective of gender, age, nationality, and disability. When it comes to empowering women which is one of the major themes of diversity & inclusion, the ratio of female managers is steadily increasing, and we will continue to promote development and training aimed at raising the ratio of female senior employees who are candidates for management positions. Apart from that, we have focused our efforts on promotion of LGBTQ understanding by Ally initiatives and promotion of active participation by people with disabilities through appropriate placement.

In addition to fostering the next generation of leaders through SMP Academy which is a career grade-specific selective education and training program, we are working to foster global human resources that can undertake business management overseas in future such as by dispatching personnel to overseas subsidiaries and overseas academic and research institutions. Besides these selective programs, we have adopted and are operating a talent management system to systematically understand and supervise the skills, assets, and capacities of our employees. Utilizing the talent management system, we encourage employees to take steps toward their own career planning as well as self-disciplined and independent self-improvement. We also have supervisors and direct reports work together to design customized development plans in order to realize human resources development and the proper placement of personnel, while striving to maximize results.

Contribution to Global Health and Initiatives to Improve Access to Medicines

Making contributions to improving access to medicines is one of the important missions of a pharmaceutical company. Sumitomo Pharma is actively striving to improve access to medicines in order to help achieve Goal 3 of the Sustainable Development Goals: Good Health and Well-Being. Since we recognize that global health is a worldwide issue, we value the importance of Goal 17, Partnerships for the Goals and are working towards solutions by collaborating with government agencies, international institutions, research institutions, and civil society.

Sumitomo Pharma has been working on a health improvement program for mothers and children in Cambodia, collaborating with the local government and an NGO with the objective of safe childbirth and proper child development. We have also been participating in a partnership program called Access Accelerated with more than 20 pharmaceutical companies around the world to collaborate on improving access to healthcare in developing countries. Moreover, since June 2019, we have been working on initiatives through an antibiotic susceptibility study with the aim of promoting proper use of antibiotics and contributing to antimicrobial resistance (AMR) countermeasures in Vietnam.

Environmental Initiatives

As a pharmaceutical company, we are aware of our responsibility and have been working to reduce our environmental impact in all areas of our business activities. In 2005, we established the Basic Environmental Policies that describe our objectives and initiatives to meet them as guidelines for our environmental activities. We then revised the policies in May 2021 in response to social needs, and gave more attention to efforts aimed at making society more sustainable. Under the Basic Environmental Policy, we have declared our goal of achieving zero greenhouse gas emissions (Scope 1+2) by 2050 and have engaged in activities to obtain SBTi (Science Based Targets initiative) certification. Having declared our support for the TCFD (Task Force on Climate-related Financial Disclosures), we are also continuing to analyze and assess risks and opportunities for the purpose of information disclosure according to these recommendations. Under the new Policies, we are working to promote mid- to long-term initiatives to reduce our environmental impact throughout the entire value chain for realizing a carbon cycle society.