HK inno.N

Reinforced supervision of environmental performance of senior management

Through the Sustainability Management Committee (B-level) under the Board of Directors, HK inno.N makes decisions on environmental management. Performance on handling environmental matters is also linked up with the remuneration package of executive members. Based on a strong commitment of HK inno.N’s senior management to mitigating climate change and proactive monitoring, the company aims to push forward with the transition to a business structure that befits an environment-friendly era.

Increased share of renewable energy in the energy used

To reduce Scope 2 greenhouse gas emissions, HK inno.N has secured measures to procure renewable energy and is increasing the share of renewable energy in its mix. A solar power generator with a capacity of 523 KW has been installed at the Osong Plant, which translates into a reduction of 250 tons of greenhouse gas emissions per year. In December, 2024, a solar power generating system with a capacity of 44 KW was installed in the Pangyo Research Center.

Optimization of energy efficiency within processes and investment in lowcarbon facilities

HK inno.N operates an energy management system (ISO 50001) and invests in facilities to improve production efficiency over the mid-to-long term. Investments in facilities are carried out in consecutive order in accordance with the investment plan established for the annual financial plan. In 2024, the boiler was replaced with a version with ultra-low nitrogen oxide and the recycling system for RO concentrated water was improved. Going forward the company plans to continue its inspections of facilities at each site and replace equipment and facilities as needed for better efficiency and a more sustainable production environment.

Management of greenhouse gas emissions within the supply chain (Scope 3)

Through an annual environmental audit on the supply chain, HK inno.N surveys how partner companies manage their greenhouse gas inventories and reduce emissions. In addition, a system has been set up to compile greenhouse gas quantities emitted by partner companies to improve the reliability of the calculated figures for Scope3. Material environmental issues are discussed with partner companies through the Partner Company Consultative Group and environmental training is offered to reinforce partner companies’ capabilities in ESG. HK inno.N continues to strongly promote environmental management to partner companies to reinforce monitoring of climate-related risks within the value chain.

Life-cycle assessment of products and measurement of their carbon footprint

HK inno.N has conducted a life-cycle assessment for K-CAB, the 30th novel drug to be registered in Korea and developed by the company for GERD. From the point of pre-manufacturing to manufacturing, use and disposal of K-CAB 25mg and 50mg products, the environmental impact is assessed to verify its contribution in 16 environmental categories. In addition, the API of K-CAB, Tegoprazan, has also been reviewed for its environment-friendliness to make the most of on-site data and improve data related to materials used.

At this point in time, there is no guidance established on the LCA of drugs, and as such HK inno.N developed its own, titled the Product Category Rule, or PCR. This guidance meets the requirements of international standards (e.g. ISO 14040, ISO 14044) and includes detailed requirements for petrochemical products developed by other certifying bodies. A detailed precision review has also been completed by the Korean Society for Life Cycle Assessment. The company is currently reaching out to authorities on the timeline for the public announcement of certified LCA guidance. Once it is announced, HK inno.N plans to acquire international EPD certification by revising the internal criteria to be aligned with the certified guidance.

LCAs are used by HK inno.N to identify key environmental issues and quantify a product’s contribution to climate change and the exact carbon footprint brought on by one tablet. LCA will continue to be used as a way for the company to reduce greenhouse gas emissions associated with the company’s products and to live up to the company’s responsibilities to the value chain in terms of environmental impact.

Mitigation of the dependency on fossil fuels and risks of energy price fluctuations

HK inno.N makes continuous efforts to reduce its dependence on fossil fuels. Such efforts include the installation of a renewable power generation system on the company’s premises. Forecasts for the price of fossil fuels as well as for the supply of renewable energy are also used as data points to conduct a cost-benefit analysis when reviewing the appropriateness of investments in energy supply systems. In doing so the company aims to mitigate the risks associated with energy supply and increases in operational costs triggered by domestic or international energy policy updates.

Mitigation of supply chain disruptions through diversification of vendors

'HK inno.N is currently in the process of replacing some of the intermediates that are imported from China with alternatives produced in-house or domestically. Diversification of suppliers is also one way for the company to fend off the risk of price fluctuations in raw materials or distribution.