PHC Group’s global sustainability strategy addresses environmental, social, and governance (ESG) issues. In terms of the environment, we are focused on three materiality topics—Climate Change, Circularity, and Preservation of Natural Resources—and we are working on these on a group-wide basis.

Climate Change

PHC Group takes the impact of climate change on our business activities and society seriously, and we position achieving a carbon-free society as a key management issue. We have set a carbon neutral goal of net zero greenhouse gas (GHG) emissions in Scope 1 and Scope 2 by 2040, and are actively working on this goal.

In our Value Creation Plan 2027, we have set a goal of reducing Scope 1 and Scope 2 GHG emissions by 42% and Scope 3 GHG emissions by 25% by fiscal year 2030. In June 2025, we obtained Near-Term Science-Based Targets certification for the 1.5°C Standard from the Science Based Targets initiative (SBTi) for this index.

This certification is a recognition of the validity of our reduction plan, which is backed by scientific evidence and is based on the Paris Agreement’s goal of limiting the rise in global temperature to below 1.5°C above pre-industrial levels.

Basic Approach

To ensure business sustainability and contribute to the realization of a sustainable society, and to appropriately grasp the impact of climate change on our business activities and society, PHC Group is conducting scenario analysis based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and identifying and assessing risks and opportunities. We are currently working on the four core elements recommended in the TCFD recommendations: governance, strategy, risk management, and metrics and targets, as described below.

Governance and Risk Management

PHC Group has set up a department dedicated to sustainability in order to appropriately manage risks and opportunities related to climate change, and promote sustainable management. This department does its work under the Sustainability Committee, and is responsible for formulating sustainability strategies and promoting them group-wide, for assessing risks and opportunities, and for monitoring. The Sustainability Committee reports regularly to the Board of Directors, and oversees the progress status of climate change initiatives.

See Chapter 5, Sustainability Management, for our sustainability promotion system.

• Sustainability Management

Strategy

PHC Group aims to achieve sustainable growth and increase long-term enterprise value through an integrated promotion of management strategies, HR strategies, and ESG strategies. We position climate change measures as a key management issue and have set KPIs for them. We treat climate change from the twin aspects of risk and opportunity, and believe that we can create new business opportunities through environmentally-conscious products and services, in addition to complying with laws and regulations as well as requests from our business partners.

In scenario analysis, we use the following two scenarios that assume different ways that climate change may progress, and comprehensively identify risks and opportunities due to climate change.

We are working to provide qualitative assessments and assess the financial impact of the physical risk, migration risks, and opportunities identified through analyses using these scenarios from time axes covering the short term (1 year), medium-term (2-5 years), and long-term (6 years or more). The results of these analyses are scheduled to be disclosed in the appropriate form once they are completed.

PHC Group seeks to manage risks and opportunities related to climate change and ensure the sustainability of our businesses over the medium- to long-term. We also promote initiatives towards the realization of a sustainable society. We shall continue to emphasize transparency, and disclose information related to our analysis process and results.

Metrics and Targets

PHC Group has set the following targets so that we can contribute to global initiatives to keep global temperature rise to within 1.5°C.

Fiscal year 2040 GHG emissionsScope 1+2: Carbon neutral

Fiscal year 2030 GHG emissionsScope 1+2: 42% reduction (1.5°C target/Fiscal year 2023 baseline)
Scope 3: 25% reduction (1.5°C target/Fiscal year 2023 baseline)

Supply Chain GHG Reduction Initiatives

PHC Group has set the construction of a business platform and the achievement of sustainable growth as part of our Value Creation Plan 2027. Under this plan, we will promote growth based around the Diagnostics & Life Sciences field, while accelerating energy conservation activities and the introduction of renewable energy, strengthening our efforts to realize a decarbonized society.

PHC Group’s greenhouse gas (GHG) emissions in fiscal year 2023 were 844,000 tCO₂, of which Scope 1 and Scope 2 (market-based) emissions account for 7% of the total. To achieve our near-term target, PHC Group is promoting measures to introduce renewable energy and reduce the use of gasoline and other fuels, in addition to our normal energy-saving activities, with the goal of reducing Scope 1+2 GHG emissions by 42% by 2030.

At the same time, Scope 3 emissions account for the majority of the GHG emissions of the entire group, with “Category 1: Purchased products and services,” “Category 4: Upstream transportation and distribution,” and “Category 11: Use of sold products" being major sources of emissions. In addition to focusing on reducing emissions in these categories, we will also work to reduce emissions related to company business travel and “Category 12: Disposal of sold products,” which is related to contributing to a circular society, with the aim of achieving a 25% reduction by 2030.

Moreover, we are working on strengthening ties with our suppliers and business partners to encourage the reduction of GHG emissions across the entire supply chain.

Through these initiatives, PHC Group will contribute to minimizing the effects of our business activities on the environment and achieving a sustainable society.