Material issues identified

Nihon Chouzai Group’s Approach to Materiality (Key Issues)

Under its Group Philosophy, the Nihon Chouzai Group has defined its mission as “To Give People the Closest Possible Support” and aims to realize its vision, “To Be the Most Trusted Partner in Healthcare.” The Group regards its material issues as key management priorities as it seeks to both contribute to a sustainable society and enhance corporate value over the medium to long term.

In fiscal year 2021, the Group identified 21 material issues for the first time and has since worked to address social issues through its business activities while strengthening its management foundation. Subsequently, to further put the Group Philosophy into practice, we reassessed changes in the healthcare environment and society’s expectations, as well as the role the Group should play. In 2026, we redefined our material issues to more effectively contribute to sustainable growth and the resolution of social issues.

In the 2026 review, rather than simply consolidating the previous 21 material issues, we reorganized them into six material issues from the perspective of the key priorities the Group should strategically address through 2030. For each material issue, we established “Our Approach” and linked it to a total of 26 specific initiatives. We will enhance the effectiveness of these initiatives by monitoring and evaluating progress using KPIs. With materiality serving as a common framework connecting our Group Philosophy with our day-to-day business activities, we will work together as a Group to advance these initiatives.

Our Material Issues and Initiatives

For each of the six material issues identified through this review, we have established “Our Approach” and linked it to a total of 26 specific initiatives. We will steadily implement these initiatives, regularly monitor progress and report it to the Board of Directors, and make improvements as necessary to enhance the effectiveness of our efforts to address the material issues.

Material Issue	Our Approach	Initiatives
A. Enhancing Pharmacy Functions to Meet Diversifying Needs	We will respond to changes in the healthcare environment and remain the pharmacy of choice.	・Strengthen capabilities to meet advanced healthcare needs, including cancer and intractable diseases ・Contribute to community healthcare and strengthen health support functions ・Strengthen capabilities to meet diverse patient needs ・Promote self-medication
B. Improving the Quality of Healthcare through Healthcare DX	We will promote DX and create next-generation value in healthcare.	・Improve patient convenience through the promotion of healthcare DX ・Improve efficiency and safety through the promotion of healthcare DX ・Promote co-creation with other companies and academia ・Improve the quality of healthcare through the use of healthcare data
C. Contributing to Sustainable Healthcare	We will support the healthcare infrastructure through a stable supply of pharmaceuticals and healthcare professionals.	・Promote the appropriate use of pharmaceuticals and ensure their safety ・Strengthen infrastructure functions as a pharmaceutical supply hub ・Conduct research and present findings that contribute to advances in healthcare ・Address cyber risks ・Research, develop, and manufacture high-quality pharmaceuticals ・Contribute to the stable supply of pharmaceuticals ・Contribute through the provision of high-quality healthcare professionals
D. Enhancing Human Capital and Organizational Value	We will support employee growth by providing a positive work environment and build a vibrant, sustainable organization.	・Provide opportunities for growth (expand learning environments and opportunities) ・Promote sustainable organizational growth (ensure diversity) ・Promote sustainable organizational growth (develop succession plans) ・Provide a positive work environment (expand flexible work arrangements and promote health and productivity management)
E. Strengthening Governance to Enhance Trust	We will live up to society’s trust by maintaining disciplined, ethical management..	・Ensure rigorous risk management and compliance ・Promote supply chain engagement with a focus on human rights and governance ・Ensure appropriate information sharing and build relationships of trust with all stakeholders
F. Passing on a Healthy Global Environment to Future Generations	We will fulfill our responsibility to the future through environmental conservation and support for the next generation.	・Reduce waste and improve resource efficiency at pharmacies, factories, and other facilities ・Implement initiatives toward a decarbonized society ・Promote supply chain engagement with a focus on reducing environmental impact ・Support learning opportunities and career choices for children

Progress Management and Ongoing Review of Material Issues

We will translate the identified material issues into specific initiatives and KPIs and regularly monitor and assess progress. We will also review the continued relevance of our material issues and initiatives as necessary in light of changes in the social and healthcare environment and progress in our business strategy, thereby enhancing the effectiveness of our initiatives. Through this process of continuous improvement, we aim to both contribute to a sustainable society and achieve sustainable growth for the Group.