Identification of Materiality Topics

In 2023, PHC Group disclosed key issues (materiality topics) that form the foundation of medium- to long-term value creation.

Under the Value Creation Plan 2027, the entire Group is working together to advance our sustainability strategy, using these materiality topics as the starting point while refining and reviewing our measures and KPIs to reflect the rapidly changing business environment and the evolution of our management strategies.

At this time, we are also reviewing these materiality topics with an eye toward our next stage of growth. By seeking to address social issues while achieving business growth, we will continue contributing to the development of a sustainable society and the enhancement of corporate value.

STEP 1

Identification of materiality universe

We developed a comprehensive list of potential ESG issues for the Group to address, based on respected global sustainability standards and indices including the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), UN Sustainable Development Goals (SDGs), and International Organization for Standardization (ISO 26000).

STEP 2

Materiality assessment

We evaluated the list of potential materiality topics based on two factors: importance for society and external stakeholders, and importance for PHC Group to realize our mission and achieve our stated business goals. To weigh these factors, we gathered input from customers, suppliers, business partners, and employees worldwide, ranging from junior staff to senior executives.

We also conducted workshops with each business unit and corporate function and, based on the results of the materiality assessment described above, narrowed down the identified issues and developed a shortlist of key material topics.

STEP 3

Target setting

We established targets to drive initiatives related to the shortlisted material issues. Based on our commitment to fulfilling our responsibilities to society, these targets were developed through repeated discussions with the business divisions and corporate functions responsible for advancing each initiative.

STEP 4

Adoption

The identified material topics and related targets were approved following discussions and deliberations by the Management Committee and the Board of Directors.

Review of Materiality Topics and Our Approach for the Future

These materiality topics remain valid as key management issues for the Group, and we are advancing measures based on individual KPIs and targets. At the same time, we are conducting a review of the materiality topics to ensure that they reflect how the business environment is changing, demands relating to sustainability in the healthcare industry are rising, and sustainability disclosure standards are advancing. In conducting this review, our main focus is on strengthening alignment with management strategies, refining the assessment of financial impacts, and reorganizing the structure of measures and KPIs. We are conducting the review through the following steps:

After the review is completed, we plan to disclose our assessment of risks and opportunities associated with each materiality topic, their connection to our business strategies, and specific measures and KPIs.