PHC Group has identified 11 materiality topics to engage in globally and assigned KPIs and targets to each in order to promote sustainable management from a long-term perspective. We will advance these targets as part of the Value Creation Plan 2027.

Classification	Materiality	KPI	Targets*1	Fiscal Year 2023 Actual, Progress	Fiscal Year 2024 Actual, Progress*2
Environment	Climate Change*3	Scope 1 & 2 CO2 emission reduction	Carbon neutral by 2040 42% reduction (vs. 2023) by 2030	Scope 1: 15,861 tCO2e (standard value) Scope 2: 35,304 tCO2 (standard value)	Statistics being compiled Second half disclosure planned. The same applies hereafter
		Scope 3 CO2 emission reduction	25% reduction (vs. 2023) by 2030	Scope 3: 793,687 tCO2 (standard value)	Statistics being compiled
	Preservation of Natural Resources	Percentage of reduction of water withdrawal at production sites/labs on a per revenue basis	15% reduction (vs. 2023) by 2030	1.2 m³/mm JPY (standard value)	Statistics being compiled
		Percentage of reduction of packaging material on a per revenue basis	10% reduction (vs. 2023) by 2030	12.8 kg/mm JPY (standard value)	Statistics being compiled
		Percentage of reduction of waste generated at production sites/labs on a per revenue basis	20% reduction (vs. 2023) by 2030	13.0 kg/mm JPY (standard value)	Statistics being compiled
	Circularity	Percentage of total waste recycled at production sites/labs (excluding thermal recycling)	90% by 2030	46%	Statistics being compiled
		Percentage of recycled content in plastic packaging materials	10% by 2030	0%	Statistics being compiled
Social	Creating Healthcare Innovation that Supports Business Development	Number of new PHC Group patent applications (including design and utility models)	-	155	164
		Number of new PHC Group registered patents (including design and utility models)	-	4,306	4,160
		Number of new products and services launched	-	93	55
		Sales in growth fields	86.0 bn JPY by 2025	41.0 bn JPY	39.4 bn JPY
	Product Excellence	Number of warning letters issued (e.g., FDA warning letter)	0	0 (achieved )	0 (achieved )
		Number of recalls issued	-	2	3
	Enhancement of Supply Chain Management	Percentage of response rate to PHC Group supplier survey*4	95%	95% (achieved )	95% (achieved )
	Expanded Access	Consolidated sales in emerging and developing markets	-	49.3 bn JPY	56.2 bn JPY
	People & Culture	Ratio of gender diversity at manager level or above	Female ratio: 30% or higher by 2030	-*6	24.3%
		Employee Engagement	Score: increase from the previous year 1 point+ improvement YoY	62 YoY -1pt	67 YoY +5pt (achieved )
		Enhanced employee learning and skill development	-	PHC Academy Skill Database	PHC Academy (Next Generation) Skill Database
Governance	Strengthening Corporate Governance	Percentage of nationality diversity of the Board of Directors	-	25%	30.0%
		Board effectiveness assessment	1/year	1 (achieved )	1 (achieved )
		Number of meetings with institutional investors and securities analysts	-	95	106
	Risk Management	Number of Enterprise Risk Management Committee meetings	2/year	Kick-off held	4 (achieved )
		Percentage of employees taking compliance training (e.g., code of conduct, insider trading)	100%	100% (achieved )	100% (achieved )
	Cybersecurity	Percentage of employees who participate in information security and data protection training	100%	100% (achieved )	100% (achieved )
		Biannual vendor security reviews - percentage of critical vendors reviewed*5	100%	100% (achieved )	100% (achieved )
		Number of PHC Group Cybersecurity Committee meetings	4+/year	4 (achieved )	4 (achieved )

• *1KPIs for which it is difficult to set appropriate targets are displayed as “-”. Targets for items under discussion will be disclosed as soon as they are set.
• *2Actual values for the materiality topics of Climate Change, Preservation of Natural Resources, and Circularity for fiscal year 2024 are currently under calculation. We plan to disclose this information on our website in the second half of the year.
• *3 Greenhouse gas (GHG) emissions categories are based on the GHG Protocol as outlined below:
  Scope 1: Direct emissions from the company through the combustion of fuel, etc.
  Scope 2: Indirect emissions as a byproduct of energy generation such as the above or purchased electricity
  Scope 3: Indirect emissions other than under Scope 2 (purchased products or services, transportation, disposal of sold products, etc.)
• *4This covers the major suppliers for materials procurement in each business unit.
• *5From the viewpoint of information security, the scope applicable to ISMS certification within Japan became included in fiscal year 2023. In fiscal year 2024, it has been expanded to cover the entire PHC Group.
• *6The ratio of female managers (on a consolidated basis) for fiscal year 2023 has not yet been compiled, so it is omitted from this chart.