Materiality and Sustainability Policy

Santen's Key Management Issues (Materiality)

"STRATEGY" and "ESG Materiality" are Santen's key management issues (Materiality).

Keeping Santen's CORE PRINCIPLE "Tenki ni sanyo suru" in mind, Santen's newly formulated ideal world is called "WORLD VISION," the ideal world that Santen aims for, namely, "Happiness with Vision," which represents Santen's aim to contribute to the Happiest Life for every individual, through the Best Vision Experience. Santen's VISION shows what Santen aspires to be in 2030 and beyond in order to achieve its WORLD VISION. We will "Become A Social Innovator" to orchestrate and mobilize key technologies and players around the world, to deliver happiness through vision. In order to achieve "Santen's VISION" and "GOAL," we will implement "STRATEGY," which consists of "Ophthalmology," "Wellness" and "Inclusion." This WORLD VISION and Santen's VISION have been established from the perspective of Creating Shared Value (CSV), which is a corporate approach to creating both economic and social value by devising solutions to social issues.

Meanwhile, from the perspective of environment, society and governance (ESG), we have identified the following four propositions as ESG materialities: "Development and stable supply of socially significant products and services (Happiness with Vision)," "Encouragement of an Organizational Culture that Promotes Value Creation," "Strengthening Governance, Contributing to the Realization of Fair and Equal Society," and "Conservation of the Global Environment," with the aim of contributing to the sustainable development of society by solving social issues and improving corporate value over the medium to long term. The three STRATEGIES and four ESG materialities are Santen's materiality, namely, Santen's key management issues.

The Sustainable Development Goals (SDGs) adopted by the United Nations member states set 17 goals to be achieved by 2030. By addressing our materiality, we will help achieve Goal 3: "Ensure healthy lives and promote well-being for all at all ages," and other SDGs.

• Step 1: List up social issues
  We compiled an extensive list of social issues based on international guidelines, including the 10 principles of the United Nations Global Compact and SDGs, as well as on survey items of sustainability assessment institutions.
• Step 2: Set priorities for social issues
  We comprehensively evaluated social issues from two standpoints, namely, their importance to society and their importance to our company, and narrowed the issues down to those of high priority.
• Step 3: Integrate the three items of the long-term vision "Santen 2030" into Materiality
  Looking ahead to 2030 and beyond, we added "Ophthalmology," "Wellness," and "Inclusion," which we created to strategically address social issues related to people's eye health, to Santen's Materiality.
• Step 4: Confirm the validity
  We confirmed the validity of the formulation process and the selected materialities through not only discussion within in-house meeting including management but also dialogue with outside stakeholders such as experts and investors.
• Step 5: Identify Materiality
  Through discussions at the Board of Directors, we identified three STRATEGIES and four ESG materialities as Santen's Materiality. We plan to periodically review the materialities in light of the progress of our initiatives and changes in the social environment.

We have established our sustainability policy incorporating the standpoint of ESG into the WORLD VISON and Santen's VISION, formulated from the perspective of CSV. Based on our CORE PRINCIPLE, this policy shows that Santen not only contributes to the sustainable development of society but also aims to achieve its own sustainable growth.

Sustainability Policy

Based on Santen's CORE PRINCIPLE: "Tenki ni sanyo suru," Santen not only contributes to the sustainable development of society but also aims to improve corporate value over the medium to long term.

ESG Materiality	Issue	Main KGI/KPI for 2025	Main efforts (Including what we are currently working on and future efforts)
Development and Stable Supply of Socially Significant Products and Services (Happiness with Vision)	Market Penetration of Products with Social Significance	Improving the quality and quantity of ophthalmic care around the world, including developing and poorest countries Contributing to the reduction of the number of non-treated patients by improving access to healthcare in ophthalmology Reaching ≥60 million patients (Note) Fulfilling social responsibility throughout the supply chain Identifying critical suppliers and implement CSR procurement including suppliers of indirect materials and secondary suppliers Thorough pharmacovigilance and enhancement of customer service Production and supply capacity of 500 million or more	Evolution of ophthalmic medicine utilizing digital and electronic devices Therapeutic innovation including cell therapy and gene therapy Satisfy growing medical needs by developing, selling and stable supply of ophthalmic medicines and surgical devices Qualitative and quantitative enhancement and improvement of social efficiency of the ophthalmic medical ecosystem
	Evaluation and Management of the Supply Chain		Identification of critical suppliers Implementation of risk assessment Efforts to resolve social issues throughout the supply chain Elimination of forced and child labor and prevention of corruption at suppliers
	Assurance of Quality and Safety, and Establishment of an Appropriate Supply System		Quality assurance Pharmacovigilance (pharmaceutical safety monitoring) Strengthen medical affairs Stable supply of products Establishment of a product collection system in the event of product recall Measures against counterfeit medicines
	Provision of Appropriate Information on Products and Services		Centralized management and appropriate provision of safety information Promoting responsible marketing, advertising and sales Compliance with promotion standards for pharmaceuticals and medical devices Promotion of proper use of pharmaceuticals
Encouragement of an Organizational Culture that Promotes Value Creation	Promotion of Diversity, Equity & Inclusion	Improving understanding and awareness of employees toward blindness and visual impairment Providing opportunities to share work and values with the visual impaired throughout the Group Increase diverse representation with a focus on gender, nationality at all levels, especially senior management Promote employment opportunities for people with disabilities, including vision impairment throughout the Group	Implementation of diversity equity and inclusion policies Providing a place for each individual to demonstrate their abilities without discrimination based on attributes Promotion of success of people with disabilities, including at special subsidiaries
	Building a high-value-added and highly productive work environment		Improvement of employees' physical and mental health Prevention of long working hours Workplace health and safety activities Prevention of occupational accidents Health and safety risk assessment Third-party certification of health and safety
	Human Resource Development		Promotion of personnel development based on Santen Leadership Competency (SLC) Promotion of company-wide educational programs to enhance individual abilities Implementation of employee satisfaction/engagement surveys
Strengthening Governance, Contributing to the Realization of Fair and Equal Society	Corporate Governance	Increased diversity in the Board of Directors The PDCA cycle for continuous verification and improvement of the risk management system through close cooperation between related departments functions. Development of Group risk management system, development and penetration of related regulations, strengthening of cooperation with the risk management department and internal control defense line related departments Properly responding to new types of security risks and secure the business continuity even in the face of unexpected events Formulate a disaster recovery framework and planning	Ensuring the independence of the chairman of the board of directors Ensuring the diversity of the board of directors Disclosure of directors/auditors' bios/specialties/remuneration Ensuring independence/effectiveness of compensation committee
	Compliance		Practice of the "Santen Code of Practice" Implementation of compliance education Operation of the "Compliance Consultation & Reporting Desk" and the "outside help line" Anti-corruption (prevention of bribery, corruption, and anticompetitive business practices)
	Risk Management		Conducting of risk assessment Development of a system to address possible risks and provide training and education Formulation of a Business Continuity Plan (BCP) Strengthening information security measures
	Respect for Human Rights		Implementation of human rights due diligence
Conservation of the Global Environment	Measures against Climate Change	Contribution to realization of a carbon-free society and establishment of recycling-based society by measures against climate change, measures for water resource and resource saving, and measures against plastic CO2 emissions reduction Scope 1 and 2 emissions (versus 2019) FY2025: 25% reduction FY2030: 50% reduction Scope 3 Category 1 emissions (versus 2019) FY2025: 8% reduction FY2030: 15% reduction Plastic eye drop containers being produced from biomass plastic FY2030: 60% 100% shift of company-owned vehicles to electric vehicles (HVs, PHVs, EVs, and FCVs)	Support for TCFD Reduction of CO2 emissions Increase use of renewable energy Identifying climate change risks / opportunities Independent assurance for energy consumption data, waste and water usage
	Environmental Load Reduction		Reduction of plastic waste Reduction of waste emissions Management of emission of harmful substances Reduction of water usage and efficiency improvement

Note

Estimated total no. of patients to which Santen contributed (disease areas: inflammation/allergies, cornea, glaucoma, cataracts) in FY2019 was approx. 43 million, calculated based on JMDC's estimated total no. of patients for Santen's Rx products and Santen's shipment data

Santen is enhancing our governance from global perspective to realize our long-term VISION "Santen2030" by addressing our business challenges with more complexity, diversity and ambiguity. To do so, we are establishing the infrastructure to utilize data for strategic decision making by capturing not only for financial information but also for non-financial information such as ESG swiftly and comprehensively by utilizing digital transformation (DX).The shift to a cloud-based ERP system is one of the initiatives to strengthen our governance by standardizing relevant business processes and capturing financial and non-financial information in order to bolster our efficiency and competitiveness. In addition, Santen is re-establishing our IT infrastructure and business processes throughout our value chains to visualize business processes and outputs and to realize a swift and plausive decision-making utilizing data.