Climate Change

Approach to Climate Change｜Climate Change Countermeasure Targets｜Climate Change Initiatives

Approach to Climate Change

In October 2020, the Japanese government declared its goal of achieving carbon neutrality by 2050. With this as a starting point, the transition to a decarbonized society is accelerating in Japan. Companies are required to incorporate environmental factors, such as climate change, into their business strategies, aiming for decarbonization. This is essential for companies to contribute to the achievement of the SDGs and continue to grow together with society. Based on the TCFD^*1 recommendations, the SHIONOGI Group (“SHIONOGI”) has built a company-wide governance structure, considering climate change countermeasures as part of its management strategy. After identifying and assessing risks and opportunities in the medium- to long-term business environment, we promote efforts to reduce risks and create business opportunities.

*1 Task Force on Climate-related Financial Disclosures: An organization established by the Financial Stability Board (FSB) in response to a request from the G20 to discuss how climate-related information should be disclosed and how financial institutions should respond.

Climate Change Countermeasure Targets

We conducted a detailed assessment of the impact of climate change on SHIONOGI’s business, using the TCFD framework as a reference, and considered strategies and specific countermeasures. Consequently, we have set “GHG (CO₂) emissions reduction” as a metric for reducing risks related to climate change. In response to this, we have also set targets in our medium- and long-term action targets “SHIONOGI Group EHS^*2 Action Targets.” In addition, to respond to the Japanese government’s declaration of “Carbon Neutrality by 2050” and the worldwide movement toward reducing CO₂ emissions, SHIONOGI has established SBTs^*3 as the FY2030 GHG emissions reduction targets, aiming to achieve carbon neutrality by 2050. These targets were approved by the SBT Initiative in June 2021 (see this page for details). Moreover, against the backdrop of growing social interest in realizing a decarbonized society, we reviewed our medium- and long-term targets in FY2023 and set new targets for FY2035.

*2 EHS: Environment, Health and Safety
*3 SBTs (Science Based Targets): CO₂ emissions reduction targets based on scientific data

† Targets approved by the Science Based Targets initiative

Climate Change Initiatives

Establishment of new medium- and long-term targets

In response to growing interest in realizing a decarbonized society, SHIONOGI has set new medium- and long-term targets (targets for FY2035) as milestones toward achieving carbon neutrality by 2050. In these medium- and long-term targets, we have set a new target of “reducing CO₂ emissions by 60% by FY2035 compared to FY2019” based on the recommendations in the Sixth Assessment Report of the IPCC (UN’s Intergovernmental Panel on Climate Change). The IPCC Sixth Assessment Report states that there is no doubt that human influence has caused warming of the atmosphere, oceans, and land,” and SHIONOGI will strengthen its efforts to further reduce CO₂ emissions in order to realize a decarbonized society.

Reducing our Scopes 1 and 2 emissions

To achieve our FY2030 target, we promote various energy-saving and low-carbon measures, such as introducing and updating highly energy-efficient equipment. We also work to reduce CO₂ emissions by gradually introducing renewable energy-derived electricity to SHIONOGI’s major sites, such as plants and research laboratories. Although the FY2023 target was a 15% reduction in Scopes 1+2 CO₂ emissions compared to FY2019, the actual reduction was only 12.4%. The main reason for not achieving the target was an unexpected deterioration in the emission factor (electricity) at major operating sites. Meanwhile, SHIONOGI’s overall energy consumption before multiplying by the emission factor was at a level that would allow us to achieve the target, partly due to the introduction of renewable energy-derived electricity.

Although we have not achieved our FY2023 target (annual target), by bringing forward the introduction of renewable energy-derived electricity to the Shionogi Pharmaceutical Research Center (SPRC), we have achieved our FY2024 target set in the SHIONOGI Group EHS Action Targets in FY2023, ahead of schedule.

As for our efforts to reduce Scope 2 CO₂ emissions through the use of renewable energy-derived electricity, in FY 2023, we introduced renewable energy-derived electricity to the Shionogi CMC Research Innovation Center (CRIC) in addition to the SPRC mentioned above, in accordance with the introduction plan for SHIONOGI’s major sites. With this, we have completed the introduction of renewable energy-derived electricity to the major sites of Shionogi & Co., Ltd., including the head office building and the Aburahi Research Center, which have already completed its introduction, significantly increasing SHIONOGI’s overall introduction rate to 40.8%. Going forward, we will promote the introduction of renewable energy-derived electricity to the plants of Shionogi Pharma Co., Ltd., which is responsible for SHIONOGI’s manufacturing functions. We plan to complete its introduction to all major sites by 2030.

Plan for introducing electricity derived from renewable energy

Fiscal year of introduction	Site	Company name	Status
FY2021	Head Ofﬁce	Shionogi & Co., Ltd.	Completed
FY2022	Aburahi Research Center	Shionogi & Co., Ltd.	Completed
FY2023	Shionogi CMC Research Innovation Center Shionogi Pharmaceutical Research Center (SPRC)	Shionogi & Co., Ltd.	Completed
FY2023	Amagasaki Office	Shionogi Pharma Co., Ltd.	Completed
FY2024	Settsu Plant	Shionogi Pharma Co., Ltd.	Scheduled
FY2025	－	－	－
FY2026	Tokushima Plant	Shionogi Pharma Co., Ltd.	Scheduled
FY2027	Kanegasaki Plant	Shionogi Pharma Co., Ltd.	Scheduled
FY2028	Yokohama Research Center, Akita Plant	UMN Pharma Inc.	Scheduled
FY2029	Itami Plant	Shionogi Pharma Co., Ltd.	Scheduled
FY2030	Nanjing Plant	Nanjing Chang’ao Pharmaceutical Co., Ltd.	Scheduled

Moreover, to improve energy efficiency, we have set targets for improving energy intensity by 1% per year and introducing equipment with high energy consumption efficiency. In addition to promoting the introduction of highly energy-efficient equipment, we promote initiatives to reduce energy consumption, such as continuously reviewing equipment operation modes. In FY2023, both total energy consumption and intensity were reduced compared to FY2022. However, due to an increase in business activities toward achieving the STS2030 Revision, including those related to COVID-19, our energy consumption remained high, preventing us from achieving our annual target.

CO2排出量および生産性（売上高／CO2排出量） CO2排出量および生産性（売上高／CO2排出量）

Vehicles for sales activities

Due to the spread of the COVID-19 pandemic and the promotion of DX in medical information provision activities, the proportion of medical representatives (MRs) working remotely is increasing. Consequently, fuel consumption by vehicles for sales activities remained lower in FY2023 than in FY2019, before the spread of COVID-19.

As for the reduction of CO₂ and exhaust gas emissions by converting vehicles loaned to MRs to hybrid vehicles, we have completed the conversion of all vehicles for sales activities to hybrid vehicles by FY2022.

Reducing our Scope 3 emissions

SHIONOGI’s Scope 3 emissions account for about 60% of our total greenhouse gas (CO₂) emissions. It is essential to work with suppliers to reduce CO₂ emissions throughout the supply chain in order to achieve our SBTs. Among SHIONOGI’s Scope 3 emissions, Category 1 (purchased goods and services) emissions account for more than 50%. To reduce CO₂ emissions in this category, we have set a medium-term target on a priority basis to consider and implement countermeasures.

The emissions for each category of Scope 3 are calculated using the “Basic Guidelines on Accounting for Greenhouse Gas Emissions Throughout the Supply Chain (Ver.2.6)” of the Ministry of the Environment and the Ministry of Economy, Trade and Industry of Japan. Since FY2022, CO₂ emissions in Categories 1 and 2 of Scope 3 have been calculated using the emission intensity based on prices including consumption tax. In line with this, GHG emissions in FY2021 have been recalculated using the emission intensity based on prices including consumption tax.

In FY2021, SHIONOGI participated in the Model Project for Supporting Achievement of the Decarbonization Targets of the Entire Supply Chain, a project of the Ministry of the Environment aimed at helping companies achieve their GHG emissions reduction targets for the entire supply chain. Based on the CO₂ emissions reduction measures for the entire supply chain formulated in the project, we are building a collaborative system, including Group companies, to promote supplier engagement, and implementing a supply chain engagement process.^*4

In FY2023, we conducted supplier engagement activities for our top 15 suppliers by purchase amount, including holding briefing sessions to promote their understanding of SHIONOGI’s policy on climate change, checking the status of their efforts to reduce CO₂ emissions (questionnaire), and holding study sessions on calculating Scope 3 emissions to support them. In the future, we will select more significant suppliers for CO₂ emissions reduction to ask them to reduce their CO₂ emissions, and support their efforts on a priority basis.

*4 See the Guidebook for Formulating a GHG Emissions Reduction Plan to Achieve the SBTs for more information on the supplier engagement process created under this project. (Japanese version only) (External website)

External activities for addressing climate change

Selected as an A List Company for the Second Consecutive Year in CDP Climate Change 2023

In the Climate Change Report 2023 published by CDP,^*5 an international non-profit organization that addresses environmental information disclosure, we received the highest rating of A.

Isao Teshirogi, Representative Director, President and CEO of SHIONOGI, delivered a speech at the CDP Awards Japan 2024 on SHIONOGI’s initiatives as a double-A company in “Climate Change 2023” and “Water Security 2023.” In the speech, he expressed SHIONOGI’s intention to promote business transformation to create new healthcare solutions and deliver them globally, and at the same time to grow as a company needed by society while realizing a sustainable society through efforts to preserve the global environment.

Speech video (CDP Awards Japan 2024) (External website)

Speech video (Message from the executives of A List Companies) (External website)

*5 CDP

CDP is a non-profit organization whose main activities involve requesting companies and local governments to disclose information on their actions for climate change control, water resource protection, forest conservation, and other environmental issues based on the request of institutional investors and major corporate clients around the world with a strong interest in environmental issues, thereby promoting actions to tackle environmental issues. CDP is now one of the world’s most useful information disclosure platforms on environmental issues.

Support for the messages from the Japan Climate Initiative (JCI)

The Japan Climate Initiative (JCI) is a network aimed at realizing a decarbonized society by enhancing information dissemination from and exchange of views between companies, local governments, and NGOs that are actively involved in climate change initiatives in Japan. SHIONOGI participated in the JCI in April 2021. As a member company, SHIONOGI expresses its support for all five messages/proposals published by the JCI to the Japanese government.

“JCI’s Message: JCI calls on the Japanese government to set an ambitious 2035 target that is consistent with the 1.5-degree goal” (External website)

With medium- and long-term targets, including its SBTs, SHIONOGI is working daily to reduce its CO₂ emissions. We strongly support the JCI message since it is consistent with SHIONOGI’s decarbonization policy, which aims to be carbon neutral by 2050.

Our efforts to combat AMR, which could spread further due to climate change

SHIONOGI’s efforts against AMR (antimicrobial resistance) are presented on the website “Climate Change Adaptation Information Platform (A-PLAT)” operated by the National Institute for Environmental Studies, Japan.

See the section “AMR” for more information on SHIONOGI’s AMR initiatives.

Shionogi & Co., Ltd. | Examples of adaptation business | Adaptation for Private Sector | Climate Change Adaptation Information Platform (A-PLAT) (nies.go.jp) (External website)