ESG Materiality Assessment | Takeda Pharmaceuticals

We conducted a comprehensive ESG materiality assessment in FY2019 to realign priorities after completing our acquisition of Shire. Through this we wanted to better understand which nonfinancial issues are strategically important to our company and stakeholders to guide our decision-making on sustainability matters.

Our process began with identifying a long list of topics relevant to our sustainability strategy, with the assistance of accounting firm EY, which were categorized into four key issue areas.

• Health care - Impact and accessibility of Takeda’s products for global health.

• Environment - Practices to minimize Takeda’s environmental impact and to conserve natural resources.

• Social - Impact of Takeda’s products and operations on employees, customers and communities, including philanthropic programs.

• Governance - Systems, structures and attitudes that affect how Takeda oversees and manages its operations.

The topics were then prioritized based on the level of importance to our stakeholders and our business. The process, designed to include a balance of both current and forward-looking perspectives, included the following.

• Analysis of existing disclosures, peer disclosures, emerging global megatrends and sector-relevant frameworks such as GRI, Sustainability Accounting Standards Board’s (SASB) Biotechnologies and Pharmaceuticals Standard, UN SDG Industry Matrix, Access to Medicine Index, Task Force on Climate-related Financial Disclosures (TCFD) and Pharmaceutical Supply Chain Initiative (PSCI).

• Internal interviews with the Takeda Executive Team.

• Interviews and surveys with external stakeholders, including investors and analysts, NGOs, industry organizations, international organizations, corporate peers, customers and suppliers and professional services partners.

Finally, the results were organized according to their importance to stakeholders and our company, with a select number of top-tier topics representing potential areas where we could demonstrate leadership. These were categorized into Patient, People and Planet, as well as certain fundamental management issues that are critical to making sure Takeda acts in line with our values and purpose. The draft prioritization matrix was reviewed, adjusted and validated by our Sustainability Integration and Global Public Affairs teams. The resulting matrix was then used as an input to develop our corporate philosophy.

Embedding important sustainability topics into our overall business operations and strategy ensures that we allocate resources and make choices in a way that helps us play our part in meeting major global challenges. We’ll continue to review these topics on an ongoing basis instead of conducting new materiality assessments annually. This will allow us flexibility so that as the marketplace matures and we make strides, we can pivot or stretch as needed. We’re committed to reporting our progress annually.