inno.N

HK inno.N established a governance system dedicated for decision-making on ESG. The ESG Management Committee directly under senior management, along with its working-level body, the ESG Working-Level Committee, was established in 2022. This was followed by an addition of the Sustainability Management Committee under the board of directors in 2023.
The Sustainability Management Committee oversees ESG management strategies, reviews related investments and manages ESG-related risks on the Board level, while the ESG Management Committee serves a supervisory role to monitor and keep track of key decisions made on ESG, related activities and their outcomes.
Once decisions are made, they are forwarded to working-level personnel through the ESG Working-level-Committee for detailed implementation plans to be fleshed out.

Materiality assessment process HK inno.N performs materiality assessment to identify the concerns and expectations of stakeholders and establish response strategies accordingly by incorporating the results of analyzing the connection between the value chain and sustainability issues into the business model.
HK inno.N conducted materiality assessment based on the concept of double-materiality required by global guidelines on sustainability reporting/disclosure such as the Global Reporting Initiative (GRI).

Step 01Identify Value Chain and Stakeholders

• Identification of possible risk and opportunity factors at each stage of the HK inno.N's Value Chain Map - downstream, own operations, and upstream

Step 02Create the Issue Pool

• International standards (GRI, Sustainability Accounting Standards Board (SASB))
• Analyzing cases of major domestic and foreign companies in the industry
• Media monitoring (with web crawling)
• Review of sustainability issues from the previous year→ a pool of 20 issues were drawn

Step 03Analyze Socio-Environmental Impact

• Analyzing cases of major domestic and foreign companies in the industry
• Analyzing the results of media monitoring
• Stakeholder surveys (customers, partner companies, communities, etc.)
• Analysis of rating agencies and guidelines (MSCI, KCGS, GRI)

Step 03Analyze Financial Impact

• Employee surveys
• Stakeholder surveys (shareholders and investors)
• Shareholder letters
• Analysis of reporting frameworks analysis (SASB)

Step 04Selection and Disclosure of Key Issues

• Prioritizing key issues from the pool of issues by comprehensive consideration of socio-environmental impact and financial impact
• Reviewing selected priority issues by the Management and Board of Directors, identifying five key issues
• Disclosure of the selected key issues in the 2023 Sustainability Report

Result of materiality assessment HK inno. N identified 5 focused issues out of a total of 20 issues in the issue pool based on comprehensive consideration of socio-environmental and financial impacts. In the process of selecting the key issues, the Management and working-level staff reviewed validity and feasibility of the issues along with separate analyses, the results were reported to the Board of Directors for final selection. HK inno.N aims to enhance communication with stakeholders through transparent disclosure of related activities and achievements throughout the report.

Ranking	Materiality topic	Relevant content in the 2023 Report		Financial impact	Social and environmental impact	Overall impact
1	Transparency in management of Board of Directors	Sustainability Foundations	Corporate Governance	High	High	High
2	Actions against climate change	Climate Action	Climate Change	High	High	High
3	Human rights protection for employees and suppliers	Collective Growth	Own Workforce	Medium	High	High
4	Compliance with medical ethics and laws/regulations	Compliance Management	Business Conduct	High	High	High
5	Management and support for accountable supply chain/system	Community Impact	Workers in the Value Chain	High	Medium	High
6	Capacity building for employees and training of industry experts	Collective Growth	Own Workforce	High	Medium	Medium
7	Improving product liability and safety	Community Impact	Consumers and End-users	High	Medium	Medium
8	Strengthening workplace safety and health management	Collective Growth	Own Workforce	Medium	Medium	Medium
9	Improving access to healthcare	Industry Specific Topic	Access to Healthcare	Medium	Medium	Medium
10	Increasing effectiveness in the risk management system	Sustainability Foundations	Corporate Governance	Medium	Medium	Medium
11	Protecting shareholders' rights	Sustainability Foundations	Corporate Governance	Medium	Medium	Medium
12	Tighter control and management of hazardous/harmful substances	Climate Action	Pollution	Medium	Medium	Medium
13	Expanding eco-friendly packaging and reducing waste	Climate Action	Resource Use and Circular Economy	Medium	Medium	Medium
14	Tighter control and management of air and water pollutants	Climate Action	Pollution	Medium	Medium	Medium
15	Improve and expand stakeholder communication	Sustainability Foundations	Stakeholder Engagement	Medium	Medium	Medium
16	Community involvement and CSR activities	Community Impact	Affected Communities	Medium	Medium	Medium
17	Energy saving	Climate Action	Climate Change	Medium	Medium	Medium
18	Aligning ESG performance with renumeration of executives	Sustainability Foundations	Corporate Governance	Medium	Medium	Medium
19	Strengthening information security	Collective Growth	Business Conduct	Medium	Low	Medium
20	Biodiversity conservation around the business sites	Climate Action	Biodiversity and Ecosystems	Medium	Low	Medium

Risk management for focused ESG issues For the 5 focused issues selected from the materiality assessment, based on the Company’s management system and analysis of risks and opportunities in the mid- to-long-term perspectives, HK inno.N discloses the results and performance achieved in public, striving to achieve its sustainability goals

Key ESG issues	Management system	Strategies and risk management activities
Transparency in management of Board of Directors	Board of Directors and committees under Board of Directors	Separation of CEO and Chairman (May 2023) Held the Sustainability Management Committee for the first time Performance Evaluation of the Management and Board of Directors (February 2024) Establishment of committees under the Board of Directors and operation of a decision-making system centered on the Board of Directors
Actions against climate change	Environmental management framework and environmental management system	Joined K-RE100 Established the net zero roadmap Disclosed climate change-related risks and opportunities in accordance with TCFD recommendations Scope 3 GHG emissions assurance (Measurement) and disclosure
Human rights protection for employees and suppliers	HR Committee Safety Environment Committee	Protection of employees' human rights Ongoing improvement of working environment across the business sites
Compliance with medical ethics and laws/regulations	Compliance committee Clinical Ethics and DI Committee	Secured third-party assurance, implemented compliance checks, etc. Establishment of preemptive response system for the compliance program CP training for employees (campaign, letter issuance, CP TEST, etc.), holding a Compliance Day campaign, signing a pledge of anti-bribery and compliance by all employees Audit for clinical trials, pharmacovigilance, and reducing animal testing
Responsible management and support for supply chain	Supply Chain Management Council (S&OP)	Education/training support for suppliers Supplier management system Communication with suppliers