Climate Change Mitigation & Adaptation

2019 Progress

Carbon Neutrality commitment
Our new Carbon Neutrality strategy will help us focus on reducing our carbon emissions over the next two decades. This approach will allow us to care for patients and our planet for the long term, in collaboration with our business partners and stakeholders. We want our work environment to be one that’s part of a zero-carbon economy, with an environmentally conscious culture that attracts and retains the best talent. We’ve set aggressive goals for the next two decades, endorsed by the Science Based Targets initiative, and are putting a range of initiatives in place to reach our ambition.

Carbon offsets and renewable energy
In 2020, we reached our first milestone under the new strategy — to become carbon neutral across our value chain. We achieved this goal through a combination of efforts, including implementing projects to reduce site energy consumption, sourcing additional renewable energy for our operations, and investing in renewable energy and verified carbon offset projects across the world. In choosing projects to invest in, we follow our Carbon Offset Procurement Guidelines, which require that the following conditions be considered as selection criteria:

• Includes reduction activities that would not have otherwise occurred without the assistance of our investments.
• Demonstrates that no leakage or displacement of emissions occurs as a result of the project activity.
• Provides permanent reductions in GHGs or provides a mechanism to reduce this risk.
• Relates to both the geography and the timeframe of the generated emissions to be offset.

In addition, Takeda gives preference to projects that demonstrate co-benefits in addition to carbon reductions; for example, carbon reduction projects that also result in improvements to public health. Read more in our Carbon Offset Procurement Guidelines.

While we ultimately seek to be carbon neutral across our value chain without the use of offsets, we realize that some Scope 3 emissions will likely be unavoidable. We’ll mitigate these emissions using verified carbon offsets. We’re also working to set up a council of external environmental sustainability experts to advise us on this commitment in the 2020 fiscal year.

FY2019 GHG Emissions Summary

7% Scope 1 direct emissions
(resulting from fossil fuel burned at Takeda facilities and operation of commercial fleet vehicles) 333,000 MTCO2e

6% Scope 2 Indirect emissions¹
(resulting from the consumption of supplied electricity and heating and cooling) 248,000 MTCO2e

87% Scope 3 indirect emissions
(not including Scope 2 that occur in Takeda’s value chain) 3,943,000 MTCO2e

Scope 3 Emissions detail

¹ Scope 2 GHG emissions based on market-based methodology and do not include purchased renewable energy certificates (RECs). Inclusion of purchased RECs reduces Scope 2 GHG emissions to 113 terajoules or approximately 7,400 MTCO2e.

The Carbon Neutrality program
We have instituted a new governance structure with built-in accountability for progress toward our goals, including overseeing efforts to reduce energy use and increasing renewable energy investments across our value chain. This Carbon Neutrality Governance Team will also be responsible for:

• Guiding sites in reducing their energy consumption and emissions.
• Increasing the percentage of renewable energy generated on site or sourced from energy suppliers.
• Leading internal and external engagement and climate policy advocacy.
• Measuring and disclosing GHG emissions.
• Identifying and managing climate-related risks and opportunities.
• Engaging employees and other stakeholders in reducing energy consumption and emissions.
• Engaging suppliers in reducing their emissions.

This new governance framework will also help develop internal guidelines and establish reporting lines to the Business Review Committee and to the Board of Directors.

At our manufacturing and R&D locations, including our BioLife centers, around the world, Takeda leaders review local climate-related risks and opportunities. Any new and significant risks identified through audits and other activities are reported to the Risk, Ethics and Compliance Committee of the Board of Directors, which manages risk company-wide. We plan to expand our public reporting to include disclosures in line with the Task Force on Climate-related Financial Disclosures in FY2021. We will continue to manage relevant climate-related risks through our Enterprise Risk Management program.

Carbon emissions
We measure our GHG emissions across the value chain in alignment with GHG Protocol Corporate Accounting and Reporting Standard, a well-known and recognized standard. The accuracy of our reported GHG emissions is independently verified every year.

Working with suppliers
The majority of our GHG emissions are Scope 3, which are emissions outside of our direct operational control. Our Carbon Neutrality commitment, however, extends across our entire value chain, and we’ve committed to working with partners and suppliers to reduce indirect emissions wherever possible. Working together in the coming years, we’ll encourage suppliers to set science-based targets, measure progress regularly and create incentives for action to significantly reduce Scope 3 emissions. We’ll also report Scope 3 emissions each year and include suppliers in renewable energy projects. We’re developing a dedicated site that includes trackers and key performance indicators (KPIs) for GHG emissions reduction projects. This will be a useful tool to understand how and where to lower or eliminate emissions. (Read more about our supplier engagement efforts on Page 73.)

OUR GOAL:

Help 67% of our suppliers, by emissions, establish their own science-based targets by 2024