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Sustainability > PHC GROUP Integrated Report > PHC Group Overview and Vision > Sustainability Roundtable

Integrated Report 2024

PHC Group Overview and VisionSustainability Roundtable

PHC Group held an online roundtable with employees and management from major global sites to discuss the Group's sustainability initiatives, challenges, and prospects in each region (held on July 8, 2024).

  • 1. Laura Cardozo Smodlaka
  • 2. Hirotake Harada
  • 3. Novi Khodijah
  • 4. Mikolaj Tyborowski
  • 5. Shiho Ota
  • 6. Kaiju Yamaguchi

Participants

  • Laura Cardozo Smodlaka

    PHC Europe B.V.

    ESG and Communication Specialist, Legal and Compliance, PHCEU
    Joined PHCEU in September 2023 in the role of ESG and Communication Specialist. She resides in Italy.

  • Hirotake Harada

    epredia

    Vice President, Corporate Planning, Epredia (New Erie Scientific LLC)
    Currently stationed in the U.S., having transferred to Epredia in February 2024. Prior to his secondment, he was the head of the CEO Office at PHC Holdings Corporation and leader of the Project Management Office for PHC Group’s ESG strategy.

  • Novi Khodijah

    PT PHC Indonesia

    Corporate Secretary, PHCbi
    Joined PHC Indonesia in 1997. She leads the Kartini*1, an employee team that promotes women's empowerment in Indonesia.

  • Mikolaj Tyborowski

    ascensia

    ESG Manager, Quality Engineer EU, Ascensia Diabetes Care
    Joined Ascensia in March 2023. He is based in Poland and promotes the company’s sustainability activities.

  • Shiho Ota

    PHC GROUP

    Sustainability Promotion Office, Corporate Strategy Department, PHC Holdings Corporation
    Since joining PHC Holdings Corporation in February 2024, she has led the sustainability activities of the entire Group.

  • Kaiju Yamaguchi

    PHC GROUP

    Executive Corporate Officer, Chief Financial Officer (CFO), PHC Holdings Corporation
    Served as Vice Chairman of the Sustainability Committee while in the position of Chief Strategy Officer (CSO) of PHC Holdings Corporation. Since July 2024, he has served as CFO and a member of the committee.

Introduction — Accelerating Sustainability Activities at PHC Group

Kaiju Yamaguchi
Yamaguchi:Today, I hope we can have an open discussion about sustainability at PHC Group. Our Group's efforts for sustainability are gaining momentum as the entire Group has earnestly begun to address these initiatives to meet the demands of business partners and various regions. After listing on the Tokyo Stock Exchange in October 2021, we announced an amplified focus on sustainability activities in our Mid-term Plan disclosed in 2022. We defined materiality topics and KPIs for the entire Group in 2023, and issued our first integrated report early this year. We also enhanced our efforts by establishing a Sustainability Committee. Additionally, we are progressing in our responses to certifications such as SBTi*2, which are becoming increasingly critical for our business.
Shiho Ota
Ota:At our meeting in April this year, the Sustainability Committee identified gaps between global ESG guidelines and requests from business partners and the Group's initiatives. Most recently, we shared the status of our response to CSRD*3 in Europe, which helped to deepen the understanding among our corporate officers, heads of each business unit, and other concerned parties.

Employees’ Understanding of Sustainability Initiatives

Kaiju Yamaguchi
Yamaguchi:I'm curious to hear how the materiality topics and KPIs of PHC Group are being perceived at each site and how deeply they are being embraced. First off, how are things in the U.S.? How's it going at Epredia?
Hirotake Harada
Harada:When I moved to the U.S. in February this year, my initial impression was that employees are really into sustainability initiatives. In April this year, the company held a kick-off meeting with all employees. Epredia is emphasizing sustainability. This makes me feel that there's a strong interest in sustainability at Epredia. Although the business unit is different, how about the situation in Europe where Laura is?
Laura Cardozo Smodlaka
Cardozo Smodlaka:From our team’s perspective, it seems that efforts to enhance ESG across PHC Group are widely supported by our employees in Europe. The challenge ahead is to further integrate ESG into our workforce, which can be supported by raising awareness. Increasing understanding of these topics, which may be new to many employees, will help them grasp the impact on our business and the reasons behind our practices. We hope that our efforts in Europe can serve as a model for other PHC Group locations globally. How is the situation in other regions?
Novi Khodijah
Khodijah:Our company has been involved in ESG initiatives in Indonesia for many years. Recently, volunteer activities have also emerged, like the women's empowerment team "Kartini" that we launched in 2020. Although understanding of ESG among employees in Indonesia is still developing, the efforts of volunteer team members are gradually improving the situation. Since many employees have not felt connected to ESG before, we conducted an ESG training for all employees in fiscal year 2023. Moving forward, we aim to develop our activities in Indonesia further by leveraging the efforts of PHC Group.
Mikolaj Tyborowski
Tyborowski:PHC Group defined its materiality topics and KPIs last year. These were very useful in prioritizing our initiatives in Europe, especially in the environment category. Today, responding to environmental needs is a most urgent issue. The defined materiality topics and KPIs clarified what we need to do while triggering the creation of our roadmap as we move forward. We were also able to share our goals with clients and other parties. We now have a clear picture of where we want to go and what we need to do to achieve our goals. This was a great starting point for preparing for CSRD compliance. Like for Laura's team which is based in the Netherlands, CSRD is an essential topic for us in Germany, one of Ascensia’s main bases in Europe, and we want to ensure we respond to it.
Kaiju Yamaguchi
Yamaguchi:We expect that efforts to respond to sustainability issues will expand in Europe first and then across the world. As a first step, we will proceed with our initiatives to continue to comply with CSRD at our subsidiaries in Europe. We started this work to establish a structure that will enable us to respond to various disclosure requests promptly. Then, in addition to our companies based outside of Europe, similar standards are scheduled to be issued in various countries, requiring a Group-wide response. More and more of our customers’ requests improve sustainability throughout the supply chain, and ESG assessments and certifications are becoming increasingly important. We look forward to a successful initiative in Europe first, to accelerate our sustainability response throughout PHC Group.

Sustainability Initiatives and Current Status in Each Region

Kaiju Yamaguchi
Yamaguchi:Now, please tell us about unique efforts or approaches in your region. Mikolaj, how about in Europe?
Mikolaj Tyborowski
Tyborowski:Lately, we have been striving to reduce the volume of packaging materials we use. We believe it will help reduce the environmental impact, improve customer satisfaction, and enhance our market competitiveness. Customers demand environmentally responsible products. Both we and our competitors are actively working to reduce packaging materials. It also improves sustainability throughout the value chain because it requires significant collaboration with suppliers and vendors. We believe the balance between environmental and social aspects is crucial and will be evaluated highly from a business perspective. Harada-san, how are things going in the U.S.?
Hirotake Harada
Harada:Epredia has manufacturing sites in Europe, as well as in the U.S. and China. Wherever we operate, our dedication to sustainability efforts is unwavering, with a strong focus on the U.S. After I started my current role, I set up a sustainability team within Epredia. We hold monthly meetings to discuss our progress, and our management team shares and debates these updates. Epredia's KPIs align with the goals of PHC Group, focusing on reducing CO2 emissions, cutting waste, improving recycling rates, and minimizing packaging materials. We're taking a cross-functional approach, involving departments like R&D and procurement. Additionally, we're making specific strides at each manufacturing site, such as installing solar panels at our site in China and using renewable power at our UK site. As we continue to receive customer inquiries, we need to be diligent in addressing supply chain evaluations and product life cycle assessments.
Novi-san, how do you engage in your initiatives in Indonesia?
Novi Khodijah
Khodijah:Let me share a bit more about the team "Kartini" that we set up in 2020. This team consists of 18 female employees, including myself. Initially, our goal was to support the company's sustainability targets through seminars and campaigns and to keep employee motivation high, but we felt that wasn't enough. Given our long-standing experience in supporting an orphanage in Bekasi, Indonesia, we realized that to be more dedicated, we needed to motivate our employees more effectively. With PHC Group's overall sustainability policy now outlined, we were able to focus more on activities closely related to ESG efforts. Our team aims to highlight the importance of protecting the planet, raise the consciousness among employees and the local community, and make us the top manufacturing site in PHC Group in sustainability promotion. We've just started with simple activities. But we are confident that we're making steady progress.
Laura Cardozo Smodlaka
Cardozo Smodlaka:At PHCEU, our current main activities focus on CSRD compliance. While our efforts to reduce our environmental impact are in the early stages, we have already made significant strides. For instance, PHCEU has relocated to a new headquarters that operates on green energy. This is just one part of our ESG efforts and represents an important step towards reducing GHG*4 emissions.
Another key initiative is collaboration. For example, we are working closely with the HR department to improve social initiatives and corporate culture based on the results of our global employee engagement surveys. Additionally, we are enhancing collaboration among PHC Group ESG team members, focusing on the implementation of projects and activities that align with the overall ESG strategy of PHC Group.
Kaiju Yamaguchi
Yamaguchi:With customer inquiries constantly increasing, with our good collaboration, it is vital that we also build effective management methods and responses within the organization.
Mikolaj Tyborowski
Tyborowski:We work closely with the sales department to manage and respond to customer needs. By collaborating with the sales team, which interacts directly with customers, we prepare the best responses to meet their requirements. Additionally, we need to align our efforts not just regionally but with the entire PHC Group. For instance, it's vital to think about what is needed in the long-term from the customer's perspective and show something like a pipeline. As the pipeline progresses, it will involve not just the sales department but other stakeholders as well.
To improve our responsiveness, it's also essential to deepen our understanding and recognition of ESG. We plan to work with Laura's team at PHCEU to organize ESG training for employees. I think employee training is crucial, not just to answer the questions we frequently receive but also to help them understand how to address other questions they may have about ESG activities and what their customers are essentially looking for.
Laura Cardozo Smodlaka
Cardozo Smodlaka:At PHCEU, I receive ESG-related customer inquiries through the sales team in my role as the ESG specialist. To improve our response, we began training the sales team, starting with our Sales Meeting this past June. This approach will ensure that they are equipped to handle general questions themselves, allowing us to consistently address inquiries and demonstrate to customers that we take sustainability seriously.
Hirotake Harada
Harada:Creating a website or intranet that offers valuable information for the sales department would be a good idea. In responding to inquiries or questions from customers, the sales team often needs to search for information from various departments, so having a centralized source of information would save time and be convenient. It would be ideal if this source included aggregated ESG data, policies, a list of initiatives, and certificates from evaluation agencies to share with customers.
Kaiju Yamaguchi
Yamaguchi:PHC Group has a global group intranet called One PHC, and I think it would be another good idea to promote information sharing on this intranet.
Shiho Ota
Ota:Wouldn't it be great if we could showcase our efforts on a two-way communication platform rather than just a one-way? Sharing progress in real-time and boosting communication and discussions will help us create an environment where all our global employees actively engage in sustainability.

Challenges Ahead from Regional Perspectives

Laura Cardozo Smodlaka
Cardozo Smodlaka:I recognize there are two challenges. Firstly, as ESG initiatives expand, it's necessary to invest time and effort to keep up with these initiatives and demonstrate progresses, which is not an easy task. Secondly, ESG-related topics are progressing at different speed in different countries and regions. While Europe is leading the pack, we need to consider when and how to take actions by referring to the situation in other regions.
Hirotake Harada
Harada:I have two points to add. First, when discussing how to achieve KPIs, I think it's crucial to share how other teams in the Group are tackling the issues. For example, by brainstorming ideas for waste reduction or cutting down on packaging materials, we can learn from each other and share success stories. This way, the entire Group can respond more effectively and quickly. It's also a great opportunity to showcase the power of the concept of “One PHC.” Second, we need to think about how to integrate our sustainability efforts with corporate growth. In order to operate our business sustainably, we should leverage sustainability as a growth driver. So, let us continue to discuss together a clear strategy and realize it in the best possible way.
Shiho Ota
Ota:As you all pointed out, sharing information, awareness, and best practices are crucial points, especially when progress varies by region. We’re already working on this by regularly updating and discussing the latest EU information with Mikolaj and Laura through our internal ESG community site and weekly meetings. This approach is super effective in aligning our strategy up to speed, so we’d like to expand this effort by bringing in more participants.
Novi Khodijah
Khodijah:The Indonesian government is assessing how much each company contributes to sustainable goals. So, even small initiatives are beneficial for obtaining business permits and import/export licenses. Last year, as part of our environmental activities, we ran a food waste reduction campaign and tree-planting activities. We would like to enhance our efforts in the coming years.
Mikolaj Tyborowski
Tyborowski:ESG factors are often included as part of the terms and conditions when winning contracts through market bidding. It's fair to say that ESG initiatives can impact bidding. In any case, as we seek to advance our business, we must keep sustainability in mind, in addition to product quality and usability.

Striving for Sustainability and What We Hope to Achieve as PHC Group

Hirotake Harada
Harada:PHC Group's sustainability activities are still in their early stages, but we want to use momentum from enhancing these activities to grow the company. What are your expectations for the future of PHC Group?
Novi Khodijah
Khodijah:I hope that PHC Group will go beyond its business and take serious global steps towards environmental protection for future generations.
Laura Cardozo Smodlaka
Cardozo Smodlaka:I hope PHC Group will continue to contribute to a sustainable society. Adapting quickly to changes is crucial for this. I believe that this will not only drive innovation in healthcare but also enhance the company's overall sustainability.
Mikolaj Tyborowski
Tyborowski:We should take responsibility for the environmental and social aspects of the entire process of delivering products and services. In other words, we need to be sustainable and responsible throughout the lifecycle of our business.
Shiho Ota
Ota:PHC Group seeks fully sustainable management by 2030. We believe that integrating ESG into our management plan and its evaluation, and ensuring long-term financial strength, is critical to supporting sustainable growth. In addition, “precision manufacturing” is embedded in the DNA of PHC Group, and we expect that this will be part of the ESG activities that will be deeply rooted in the DNA of PHC Group in the future.
Kaiju Yamaguchi
Yamaguchi:Moving forward, PHC Group will strive to improve lives and provide excellent services in the healthcare industry. To aim for sustainable growth, we will also collaborate with our stakeholders, including suppliers and customers around the world. Today's discussion has revealed a lot of learning and insights. We also realized that there is a lot of potential for us to grow as a Group. We appreciate all of your efforts. Thank you very much for your participation today.
Map of Major Global Offices image

We are promoting sustainability activities
worldwide with the “One PHC” mindset.

  • *1Kartini is a national leader of Indonesia who has worked hard to improve women’s rights and education. She is known for her ideas and activism on women’s education and empowerment.
  • *2The abbreviation for Science Based Targets initiative. These targets are greenhouse gas emission reduction goals set by companies aiming for 5 to 15 years in the future, aligning with the standards outlined in the Paris Agreement to limit the rise in global temperature to well below 2 degrees Celsius (WB2℃) above pre-industrial levels, and to limit it to 1.5 degrees Celsius.
    Related links: https://www.env.go.jp/earth/ondanka/supply_chain/files/SBT_syousai_all_20210810.pdf (only in Japanese)
  • *3Corporate Sustainability Reporting Directive, which refers to the EU's sustainability disclosure regulation, effective January 5, 2023. EU member states were required to take domestic legislative measures by July 6, 2024, to achieve the targets set out in the CSRD. The CSRD will be applicable to fiscal years starting as early as January 1, 2024.
  • *4Abbreviation for Green House Gas. It refers to emissions of greenhouse gases such as carbon dioxide and methane.

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