PeptiDream : Sustainability Report 2023(2.9 MB)

Discovering the Next Generation of Transformational Medicines

Sustainability Report

2023

CONTENTS

01 CEO Message

02 2022 Sustainability Highlights

03 Material Sustainability Issues

04 Sustainability Promotion Framework

05 Stakeholder Engagement

06 Social Initiatives

12 Corporate Governance Initiatives

21 Environmental Initiatives

24 Sustainability Activities of PDRadiopharma

24 References (ESG Policies, ESG Data)

© Satoshi Hirose, Untitled (2017), Monochrome print.

01 CEO Message

Message from the CEO

PeptiDream Sustainability Report 2023

PeptiDream Group Corporate Philosophy

Mission

"Discovering the Next Generation of

Transformational Medicines"

Vision

Our vision		discovery	We
is to become a powerhouse in drug	aim to brighten patients' lives through
by leading the discovery, research and development of	the realization of innovative diagnostic and
innovative pharmaceuticals through utilizing	therapeutic radiopharmaceuticals.
macrocyclic peptides, with the goal to improve the
quality of life of patients worldwide.

Patrick C. Reid

Representative Director, President and CEO

In 2022, we continued to see exciting growth at both PeptiDream and PDRadiopharma (the "PeptiDream Group"). At PeptiDream, we continued to make progress across the entirety of our drug discovery and development pipeline, with a number of programs advancing toward and into clinic development. We also continued to expand our peptide drug conjugate (PDC) programs and collaborations, which continues to be a strategic area of focus for PeptiDream. Additionally, our radiopharmaceutical business, PDRadiopharma, was profitable in its first year since acquisition, and we made excellent progress in maximizing the synergies between the two companies, laying the foundation for strong future growth.

In the area of sustainability, we continued to make significant progress, highlighted by PeptiDream achieving carbon neutrality across all of its operations (Scope 1+2) in 2022. We also updated

our Sustainability Report to now include all of our ESG activities across the PeptiDream Group, and were delighted to receive an "A- (A minus)" rating from the Carbon Disclosure Project (CDP) in its 2022 Climate Change Report 2022, which is dedicated to building sustainable economies by measure and acting on their environmental impact.

Our Group's mission is to discover the next generation of transformational medicines that will change health care and patient lives for the better. We believe that understanding and meeting the wide-ranging needs of all our stakeholders, including our employees, our shareholders, our partners, and patients around the world, is essential to creating a sustainable future for our company. We will continue to promote ESG initiatives and strive to integrate and embed these efforts throughout our organization and businesses.

02 Sustainability Highlights

2022

Sustainability Highlights

Corporate Governance (PeptiDream)

• Strengthened corporate governance to achieve higher standards than those required in Prime Market level
• Established Compliance Risk Management Committee to strengthen risk management
• Appointed outside Director as Chairperson of the Board

Supply Chain (PeptiDream)

• Conducted first sustainability procurement survey to major suppliers and collected 100% of survey responses

Promoting Diversity /

Improving Workplace Environment

• Conducted first diversity and inclusion training
• Employees' rate of taking childcare leave; 100% for female employees and 75% for male employees
• Employees' rate of returning to work from childcare leave; 100% for female and male employees

＜PHOTO＞ ©Tatsuya Noaki

Climate Change Initiatives /

Reducing CO2 Emissions (Peptidream)

• Achieved carbon neutrality across business operations (Scope 1+2)
• Reduced electricity consumption per employee by approximately 12% year-on-year by optimization of power management

Enhancing Corporate Value (PeptiDream Group)

• Established new Corporate Philosophy of PeptiDream Group

・Identified 11 priority issues of PeptiDream Group

PeptiDream Sustainability Report 2023

ESG Rating (PeptiDream)

• Achieved Leadership level in CDP's 2022 climate change report with an A- (A minus) rating

		FY 2022		Latest
			(as of July 2023)
Dow Jones Sustainability Indices		46		－
(ESG score)
MSCI (ESG rating)		B		⬆BB
FTSE Russell (ESG score)		3.6		⬆4.1
score)		A−		－
CDP (Climate change performance
Sustainalytics (ESG risk rating)		22.0		⬆21.0

Scope of Report: PeptiDream Inc. and PDRadiopharma Inc.

Reporting Period: PeptiDream (FY2022), PDRadiopharma (March 28, 2022, to December 31st, 2022)

03 Materiality

Material Sustainability Issues

PeptiDream Group Material Issues

We identified materiality by prioritizing topics which are important to our Group stakeholders and business.

PeptiDream Sustainability Report 2023

Environment

(Consideration for the Global Environment)

01 Climate change/CO2 emission reduction

02 Waste reduction

03 Biodiversity conservation

Materiality Identification Process

Identifying Issues

01 Identification of issues in consideration of internal and external business environment with reference to SDGs (Sustainable Development Goals), items assessed by ESG evaluation organizations, various frameworks, etc.

	Social
	(Social Initiatives)
04	Addressing unmet medical needs through
the discovery of transformational medicines
05	Responsible sourcing/Stable product supply
06	Community Relations
07	Cultivating a culture of innovation/
Ensuring diversity in core human resources*
08	Respecting human rights/
Occupational health and safety

* Managers and senior-ranking specialists (excluding Directors)

Evaluating Issues

02 Evaluate impact on two axes of importance to stakeholders and importance to the business

Governance

(Governance)

09 Corporate governance

10 Stakeholder engagement

11 Compliance and risk management

Identifying Material Issues

03 The Sustainability and Governance Committee, chaired by an outside

Director, reviews the appropriateness of key issues, followed by deliberation and approval by the Board of Directors

04 Sustainability Promotion Framework

Sustainability Promotion Framework

Establishment of a Group-wide Sustainability Promotion System PeptiDream established the Sustainability and Governance Committee, an advisory committee to the Board of Directors that deliberates and monitors issues related to sustainability and governance; the Sustainability Promotion Office, a dedicated organization to promote measures to tackle sustainability issues; and ESG Task Team, a cross functional group that promotes internal efforts to address environmental issues within the company.

In 2022, the Sustainability and Governance Committee was held four times to discuss the direction and implementation of our sustainability strategy. PDRadiopharma also established a Sustainability Promotion Office and a system in which PeptiDream's Sustainability and Governance Committee members also serve as Sustainability Promotion Committee members at PDRadiopharma. In 2022, PDRadiopharma held four Sustainability Promotion Committee meetings to discuss issues to be addressed within its operations in response to the Group's overall policy.

PeptiDream Sustainability Report 2023

PeptiDream

PDRadiopharma

Board of Directors

Board of Directors

Nomination and

Sustainability and

Compliance Risk

Compensation Committee

Governance Committee

Management Committee

Sustainability

Promotion

Chairperson: Junko Utsunomiya (Outside Director)

Committee

Outside Director

Outside Director

Internal Director

Sustainability

Promotion Office

Sustainability Promotion Office

ESG Task Team

COLUMN 1 Linking Executive Compensation to ESG Performance

To measure the short-term and medium-tolong-term performance of our Directors, we have established two performance indicators: quantitative evaluation indicators and qualitative evaluation indicators. For qualitative evaluation indicators, eight items, including initiatives related to sustainability, are set as indicators. Each member of the Nomination and Compensation Committee independently assesses each item and the degree of achievement is determined by comprehensive evaluation and discussions based on this assessment.

The weight of the quantitative evaluation coefficient and the qualitative evaluation coefficient is determined in advance for each fiscal year by the Nomination and Compensation Committee after comprehensively considering factors such as business environment (see page 17 for details).