Corporate Responsibility

We take responsibility every day – and have been doing so for 350 years. This commitment is codified in our corporate strategy and values. Responsible conduct with respect to employees, products, the environment, and society is a fundamental prerequisite for our business success.

Strategy and management

Our corporate responsibility (CR) activities are steered by our CR Committee, which consists of representatives from our business sectors and relevant Group functions. Since September 2017, Stefan Oschmann, Chairman of the Executive Board and CEO, has been responsible for the committee, which is chaired by the head of the newly formed Corporate Affairs unit.

Mankind is confronted with global societal challenges such as climate impact, resource scarcity and insufficient access to health in low- to middle-income countries. We believe that we can help resolve these global challenges through our innovative healthcare, life science and performance materials products, as well as through responsible governance. Responsible conduct means looking, listening and doing better. We respect the interests of our employees, customers, investors, and society, and work to minimize ethical, economic and social risks, thereby securing our success. This is an integral part of our corporate strategy, which in turn underpins our CR strategy, the basis for the responsible governance we live each and every day. In realizing our corporate responsibility, we focus our resources on those areas where we can have the greatest impact. We pursue three strategic spheres of activity: namely health, the environment, and culture & education. The focus here is on securing the future of society and our competitiveness.

Health: In low- to middle-income countries, many people lack access to high-quality health solutions. We are applying our expertise here and joining forces with strong partners to develop solutions for patients locally. Our fight against the worm disease schistosomiasis in Africa is a good example.

Environment: We are constantly working to improve the sustainability footprint of our products and are furthermore helping our customers achieve their own sustainability goals. The development of new display technologies both with liquid crystals and organic light-emitting diodes (OLEDs) are an example. They lower the power consumption of televisions, smartphones, and tablet PCs.

Education and culture: Research and development throughout the world thus benefit from curiosity, creativity, and enthusiasm. Cultural offerings inspire people and expand their horizons. Cultural inspiration also opens people up to new ideas. It favorably influences society’s acceptance of science, technological progress and innovations. That is why we promote global educational offers and cultural initiatives.

Our commitment to corporate responsibility is aligned with the UN Sustainable Development Goals and we are attempting to contribute to this ambitious agenda by 2030. Furthermore, we support relevant responsible governance initiatives. We are a member of the United Nations Global Compact and are committed to complying with the compact’s principles regarding human rights, labor standards, environmental protection, and anti-corruption. Moreover, we also live our corporate responsibility through our commitment to follow the guidelines of the Responsible Care Global Charter, an initiative of the International Council of Chemical Associations (ICCA). Responsible Care aims to drive continuous improvement and achieve excellence in environmental, health, safety, and security performance in the chemical industry. Furthermore, we are also a member of the ­Chemie3 initiative in Germany, a collaboration between the German Chemical Industry Association (VCI), the German Employers’ Federation of the Chemical Industry (BAVC), and the German Mining, Chemical and Energy Industrial Union (IG BCE). As part of this globally unique alliance, the partners want to make sustainability a core part of the chemical industry’s guiding principles and to jointly drive the sector’s position within the German economy as a key contributor to sustainable development.

To us, corporate responsibility means taking action and listening. The dialogue with our various stakeholder groups is therefore highly important to us. These stakeholders include employees, business associates, the Merck family, investors, regulatory agencies, and associations. We also engage in this continuous exchange to create transparency and clearly demonstrate how we live our company values.

Thanks to good performance with respect to responsible and sustainable entrepreneurial conduct, we were again included in the FTSE­4Good index in 2017. To be included in this leading international sustainability index, a company must demonstrate socially conscientious, ecological and ethical conduct. In 2017, we also maintained our good standing in other major sustainability indices. For instance, we are included in the STOXX Global ESG Leaders index, as well as the Euronext Vigeo Eurozone 120 index and the Ethibel Sustainability Index (ESI) Excellence Europe. In 2017, EcoVadis, an independent rating agency, granted us gold status for our sustainability performance. EcoVadis assesses suppliers from 120 countries across the four categories of Environment, Labor Practices, Fair Business Practices, and Sustainable Procurement.

Strategic sphere of activity: Health

Ensuring access to health for underserved populations and communities in low- and middle-income countries is one of our strategic priorities. Through our A2H approach, which spans all our businesses, we aim to help improve sustainable access to high-quality health solutions. Since we realize that access is a complex and multifaceted challenge with no one-size-fits-all solution, our programs and initiatives are tailored to global, regional and local needs. We consider partnerships, collaboration and dialogue to be key instruments in delivering sustainable results, focusing on four areas known as the “4As”: Availability, Affordability, Awareness, and Accessibility. In the Access to Medicine Index, which is published every two years, our company ranked fourth in 2016, moving up two places.

Availability

Availability entails the research, development and refinement of health solutions that address unmet needs and are tailored to local environments.

With our newly formed Global Health Institute, we seek to improve healthcare in developing countries. Our focus is on schistosomiasis, malaria, bacterial infections, and antimicrobial resistance. The Institute’s initiatives and programs particularly address key unmet medical needs of women and children. Our objective is not only to develop medicines, but also to improve diagnosis, disease control, and reduce disease transmission, as well as strengthen local health systems. The portfolio also covers the development of a new pediatric formulation of praziquantel to treat the worm disease schistosomiasis in children under the age of six through a public-private partnership. In addition, we are conducting research into innovative schistosomiasis diagnostics in partnership with key international stakeholders to identify vulnerable populations. And we are looking for new schistosomiasis biomarkers as well as new anti-schistosomiasis compounds.

We are developing a new anti-malarial compound that has the strong potential to not only treat, but also prevent malaria reinfection. Through a strategic collaboration with the University of Cape Town in South Africa and the Medicines for Malaria Venture, we are seeking to identify new compounds that are already efficacious in the liver stage and those that can provide long-lasting efficacy to improve post-treatment protection. We are currently developing a kit for malaria diagnosis based on our Muse® cell analyzer. This kit will accurately detect and type the malaria pathogen and identify the stage of infection. In 2017, we achieved promising results in preclinical trials.

Our product IR3535® is used in insect repellents to help protect against infections transmitted by mosquito and tick bites. Products containing this active ingredient stand out due to their particularly good tolerability in young children and pregnant women. They protect against Zika, Chikungunya and Dengue fever. Work is underway on a formulation to fight malaria. In several countries, products formulated with IR3535® were recently approved for head lice prophylaxis in school children.

Affordability

We seek to address affordability challenges through our efforts to provide assistance to those people who are unable to pay for the health solutions they need. To tackle these challenges, we have taken a pro-access approach through our intellectual property initiatives and are engaging in equitable pricing strategies. We provide transparent information about our patents and patent applications in publicly available databases. To strengthen our commitment to the London Declaration to fight neglected tropical diseases, in 2017 we joined the DNDi NTD Drug Discovery Booster consortium and opened our compound library. The objective is to find potential cures for leishmaniasis and Chagas disease. Moreover, we are one of more than 100 members of WIPO Re:Search, an open innovation platform sponsored by the World Intellectual Property Organization (WIPO). Through intellectual property and knowledge sharing, platform partners seek to accelerate early discovery for infectious diseases.

Apart from the collaboration already underway with the University of Buea in Cameroon, in 2017 we started cooperating under the auspices of this program with the University of California in San Diego. The focus is on potential treatments for leishmaniasis, Chagas disease, and African trypanosomiasis (sleeping sickness).

Furthermore, we continue to work with the World Health Organization (WHO) to combat the worm disease schistosomiasis in Africa. Through our Praziquantel Donation program, we are donating Cesol® 600 tablets containing the active ingredient praziquantel to WHO. Since the start of this program, around 150 million patients – primarily school-aged children – have been treated. In total, we have donated nearly 700 million praziquantel tablets to WHO since 2007. As a founding member of the Global Schistosomiasis Alliance, we are helping to eliminate schistosomiasis worldwide.

Through our Global Health Institute, we are also an active member of the Pediatric Praziquantel Consortium, a partnership we initiated. Within this consortium, we are working hand in hand with partners on developing a pediatric formulation of praziquantel to also treat children under six with this medicine.

Awareness

We help to raise awareness by empowering health professionals, communities and patients with the appropriate tools, knowledge and skills to make informed decisions with respect to prevention, diagnostics, treatment, and care. We regularly conduct campaigns to increase awareness of certain diseases globally. Here we are focusing on diseases that we have extensive expertise in, for instance cancer, thyroid disorders, diabetes and multiple sclerosis. In 2017, we established a charitable organization that combines some of our activities in underserved regions of the world. Through our Access Dialogues series, we are promoting discourse on access-to-health challenges with numerous public and private stakeholders. In 2017, the topics of focus were intellectual property and supply chain challenges in developing countries.

Through our Su-Swastha project we are working with various non-governmental organizations and the Indian Health and Family Ministry to improve healthcare in rural India. Among other things, we provide inexpensive medicines while also educating the local population and health professionals on everyday health issues and their treatment. In 2017, more than 11,000 people were reached in 482 community meetings.

The Global Pharma Health Fund (GPHF), a non-profit organization funded by our company, works to combat counterfeit medicines in developing and emerging countries. To date, the GPHF has supplied 836 Minilabs at cost to detect counterfeit medicines to around 100 countries; 41 Minilabs were provided in 2017 alone. According to a report published by WHO at the end of 2017, the Minilab made it possible to identify more than 1,000 counterfeit medicines out of 20,000 tested medicines.

Accessibility

We promote initiatives to strengthen supply chains and to develop localized health solutions in order to deliver and reach out efficiently at the point of care. We are a founding member of the Accessibility Platform, an informal, private-sector initiative that is working on a comprehensive approach to meeting supply chain and distribution challenges in developing countries. The platform promotes information exchanges between the various stakeholders and creates joint options for action.

Together with two other Accessibility Platform members Roche and Novartis, in 2017 we co-hosted a panel session at the World Health Summit. Attendees included the Ghanaian Ministry of Health, the World Health Organization, and the Global Fund to Fight AIDS, Tuberculosis and Malaria. We support training and knowledge sharing with our manufacturing partners in Africa, Asia and Latin America with the aim of strengthening local manufacturing quality standards.

In India, we are cooperating with the non-profit organization known as Narmada Samagra. Our River Ambulance transports health workers and provides healthcare solutions to local populations living in the remote region along the Narmada River. In 2017, we funded the maintenance of the boat donated in the previous year. Additionally, in the northeastern Indian state of Jharkhand, we are funding a health center that gives the region’s approximately 20,000 inhabitants access to medical personnel. In 2017, our Global Health Institute sponsored a new gynecology ward in the district hospital of Akonolinga in the African country Cameroon.

Strategic sphere of activity: Environment

Through our products, we are helping overcome global challenges such as climate impact and resource scarcity. In doing so, we are also helping our customers to reduce the negative impacts of their own activities and to achieve their own sustainability goals.

Performance Materials: Increasing the sustainability of manufacturing processes and final products

In 2017, our Performance Materials developed the new liquid crystal technology SA-VA (Self-Aligned Vertical Alignment) to market readiness. We have been developing the materials and process in the scope of close technical partnerships with our customers. SA-VA is an eco-friendly and resource-conserving technology that requires less energy and creates less waste products than conventional technologies during display manufacture. SA-VA also provides a more efficient display manufacturing process and could allow improved design features for display manufacturers. SA-VA can be used in all types of display applications, above all in large-size TVs.

To utilize our market and technological leadership in liquid crystals beyond applications in energy-saving displays, we opened a new production facility for liquid crystal window modules in Veldhoven in the Netherlands. According to initial measurement results, our smart windows can cut energy use in climate-controlled buildings by up to 40% and replace conventional sun shading solutions. In this way, we help builders to save resources and costs. The principle behind this is as follows: These windows can be manually or automatically controlled to darken and provide sun protection – and to do so in a variety of colors. This technology is made possible thanks to the special properties of our liquid crystals. In combination with customized dyes, the liquid crystals control the amount of incident light by either absorbing and blocking electromagnetic waves (dark state) or allowing them to pass through (transparent state). In contrast to competing technologies, our long-lasting licrivision™ materials switch within seconds and are highly ­color-neutral. Architects and builders can customize the desired color to suit the setting. For the semiconductor industry, we have developed a series of environmentally sustainable specialty chemicals and materials – including PFOS-free antireflective and photoresists. In the cosmetics industry, we are addressing the continuing trend for ingredients that meet stringent sustainability criteria. Our portfolio of fillers dispenses entirely with microplastic particles criticized for polluting waters and marine life enrichment. We are also committed to continuously increasing the energy efficiency of our production processes. Many of our cosmetic raw materials are registered and approved in accordance with the COSMOS standard. COSMOS is an international ­association that developed and manages the COSMOS standard AISBL, an international standard for organic and natural cosmetics.

Life Science: Reducing environmental impacts in various product life cycle stages

We want to lower the environmental and health impact of our products. This applies to the entire life cycle – from production and use through to the disposal of our products. With our Design for Sustainability (DfS) program implemented in 2014, we have developed a comprehensive approach for more sustainable life science products. It keeps sustainability criteria in the foreground during product development or re-engineering and documents them in a scorecard. Since the acquisition of Sigma-Aldrich, we have expanded the DfS program so that it is now an umbrella concept that encompasses all our portfolio offerings. The objective is to lower environmental impacts of devices and instruments, also during use by customers. Beginning with the concept stage, product teams identify potential environmental impacts and opportunities to make improvements. In 2017, we achieved improvements in 35% of our new Life Science product developments. One of our notable product releases in 2017 was the new Milli-Q® IQ 7000 Ultrapure Lab Water System, which uses mercury-free UV oxidation lamps.

In addition, our researchers are developing innovative solutions in line with the ‟12 Principles of Green Chemistry” developed by chemists Paul T. Anastas and John C. Warner. The objective is to permit research that is as environmentally compatible as possible, and to minimize adverse effects on human health. With DOZN®, we have developed a web-based quantitative Green Chemistry analysis tool. We are working to make the DOZN® tool available for our customers so that they will also be able to measure their environmental footprint impact for life science research.

We are expanding our portfolio to include greener alternatives, such as the new solvent, Cyrene™. This product was named the ‟Bio-based Chemical Innovation of 2017” – an accolade that can be attributed to proving that safer, greener alternatives can also offer superior performance. Cyrene™ is derived from waste cellulose and is employed as an alternative to solvents that are widely used but are under increasing regulatory restriction due to their associated toxicity. We not only think about the current life of our products but also look ahead to end-of-life considerations and potential future product lives as well. The application of single-use products – many of which pose a challenge to recycle in the current infrastructure – is growing as life science markets are expanding and adopting new technologies. We have therefore developed innovative recycling programs which have led to the recycling of more than 1,300 tons of our customers’ products from 2015 to 2017.

Strategic sphere of activity: Education and culture

Cultural promotion is a core element of our commitment to society, building on our centuries-old tradition of supporting art and culture. We thus further characteristics that are essential to our business activities as a high-tech company: creativity, a passion for discovery, curiosity, as well as the courage to transcend boundaries.

Boosting scientific education

We view education as a key component of culture – and vice versa. Education can help us understand culture. But culture can also build a bridge to education; it can stimulate curiosity and creativity. We therefore support educational projects at many of our sites and grant scholarships, for instance, or help define the curricula of selected classes in schools. We want to spark an interest in science, particularly among young people. This is why we have been supporting the ‟Jugend forscht” (Young Researchers) competition for more than 30 years. Since 1996, we have been organizing the state-level competition for the German Federal State of Hesse and have also hosted the nationals twice.

Through our Junior Labs, we want young people to enjoy conducting experiments. These learnings labs at the Technical University of Darmstadt combine classroom instruction with trending topics and modern research methods. In 2017, around 2,500 school students used the chemistry laboratory with an extended program and around 1,000 school students experimented in the biology laboratory.

In 2017, we launched our first continuing education program for teachers outside Germany by conducting a project in India. Indian teachers were trained in organic electronics, with a special focus on energy-saving, sustainable technologies. As part of SPARK, our global volunteer program, employees from our Life Science business sector share their skills and experience with students and support our local communities. The program is intended to spark curiosity in science and inspire them to consider a STEM-related career. In 2017, more than 2,500 employees invested more than 13,700 hours in the SPARK program. As part of SPARK, in 2017 we sent a Curiosity Cube™ on a journey through the United States. This is a freight container that transforms into a mobile laboratory and is equipped with state-of-the-art technology. In 2017, the Cube traveled more than 29,000 km across the United States and made stops in over 85 schools and city centers. More than 38,000 students have visited the Cube. Each of the nearly 23,000 experiments conducted were supervised by one of our employees.

The Deutsche Philharmonie, sponsored by Merck KGaA, Darmstadt, Germany

The Deutsche Philharmonie, sponsored by Merck KGaA, Darmstadt, Germany, is our musical ambassador. We consider classical music to be the universal language that brings people together; as such, it is an important part of our culture. The concerts of this professional ensemble represent an integral part of the cultural life in the vicinity of our Group headquarters in Darmstadt and remain highly popular, with around 21,000 people attending them in 2017. In addition, the orchestra again toured internationally. Concerts took place in Austria, the Czech Republic and Morocco in 2017. One particular aim is to make classical music more accessible to young people, for instance through special partnerships for children and adolescents as well as cooperation programs with schools, such as the orchestra workshop.

Promoting literature

Like music, literature is an important mediator between cultures. That is why we support five literary prizes around the world, some of which every two years: the Johann Heinrich Merck Award for Literary Critique and Essay of Merck KGaA, Darmstadt, Germany, in Germany, the Premio Letterario of Merck KGaA, Darmstadt, Germany, in Italy, the Kakehashi Literature Award of Merck KGaA, Darmstadt, Germany, in Japan, the Tagore Award of Merck KGaA, Darmstadt, Germany, in India, and the Translation Award of Merck KGaA, Darmstadt, Germany, in Russia. The awards primarily recognize those authors who build bridges between cultures, as well as between literature and science.

The Johann Heinrich Merck Award for Literary Critique and Essay, which we have been presenting since 1964 and is worth € 20,000, went to Jens Bisky, a culture editor at the Süddeutsche Zeitung. With the Premio Letterario of Merck KGaA, Darmstadt, Germany, we recognize authors in Italy who build bridges between literature and science with their works. The 2017 prize, worth € 10,000, was awarded to U.S. writer Sam Kean for his work “The Violinist’s Thumb”. The jury decided on an honorable mention for Italian mathematician, author and professor Paolo Zellini.

Responsibility for our products

The safety of our products is at the core of our corporate responsibility. When used properly, they must pose no risk to customers, patients, consumers, or the environment. Our goal is to ensure a positive benefit/risk profile for our products, which is why we regularly examine safety across their entire life cycle and continuously take steps to minimize risks. We provide patients, consumers and customers with extensive informational material so that they can use our products in a safe, responsible and proper manner.

In our pharmaceutical marketing activities, the focus is always on the health and well-being of patients because we want them to receive effective and high-quality treatment. All guidelines pertaining to marketing and advertising are part of our Group-wide compliance program, which is complemented by our internal guidelines and various voluntary commitments that, in many cases, exceed the applicable statutory regulations.

Safety of our chemical products

Numerous regulations are in place to ensure that chemicals pose no risk to humans or the environment. Compliance with these regulatory requirements is an important part of our work. Through a Group-wide policy, we have established global processes for defining, directing and implementing product safety, as well as the corresponding management structures. We incorporate all relevant national and international chemical regulations into our policies and guidelines and adhere to them. This includes the EU chemicals regulation REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) and CLP (Classification, Labelling and Packaging of Substances and Mixtures, EU GHS). Furthermore, we are committed to transparency. For instance, in line with the Global Product Strategy, an international initiative of the chemical industry, we provide our customers with product safety summaries for hazardous materials.

For the final REACH registration phase, we are also working to register all the relevant chemical substances within the stipulated period. We successfully completed the two registration phases in 2010 and in 2013. The next step, or phase III, requires us to evaluate and register by June 2018 all substances annually produced or imported in quantities ranging from one to 100 metric tons. This process also includes substances added to our portfolio from the Sigma-Aldrich acquisition and is on schedule.

Safety of our Healthcare products

Patient and consumer safety has top priority in everything we do. During the entire life cycle of our medicines and consumer health products, we provide patients, consumers and physicians with up-to-date risk-benefit evaluations. To this end, company experts process safety-relevant information from various sources such as clinical trials, adverse reaction reports and scientific literature. Ultimate responsibility for the safety of our biopharmaceuticals is borne by our Global Chief Medical Officer, with support from the Medical Safety and Ethics Board. Our Global Drug Safety unit continuously monitors and evaluates the safety and risk-benefit ratio of our medicines worldwide (pharmacovigilance). For our Consumer Health products, this function is performed by the Global Product Safety unit. Overall responsibility for the safety of our over-the-counter products is borne by the Chief Medical Officer for the Consumer Health business, supported by the Safety & Labelling Committee.

For products in our Allergopharma business, we have also developed comprehensive clinical efficacy and safety profiles that we continuously update. For the safety of patients, we have established a global pharmacovigilance system that we are always working to enhance.

Quality of our products

Our goal is to provide customers and patients with high-quality brand-name products. Through our quality vision – ‟Quality is embedded in everything we do!” – we remind our employees of their responsibility – across all business sectors, all Group functions and all levels of the company.

Supplier management

We procure many raw materials, packaging materials, technical products, components, and services worldwide. Our overarching goal is to protect the stability of these supply chains and always provide our customers with the best products and services, while offering them optimal quality and service. Our supplier management focuses on compliance with fundamental environmental and social standards, in addition to high quality, delivery reliability and competitive prices. They are primarily derived from the core labor standards of the ILO (International Labour Organisation), from the UN Global Compact, and from the Code of Conduct of the BME (German Federal Association for Materials Management, Purchasing and Logistics). Our Group Procurement Policy and Responsible Sourcing Principles define our procurement practices.

Due to the growing significance of emerging markets as sourcing markets for our company, we have reinforced our efforts to ensure adherence to our supply chain standards. At the end of 2014, we joined the Together for Sustainability (TfS) chemical industry initiative. Since then, we have been utilizing the supplier assessment and audit results shared among all member companies, who in turn abide by all restrictions stipulated within competition law. Through TfS, we so far have access to assessments for more than 730 of our most important suppliers. We initiated assessments of 463 of them in 2017.

Responsibility for our employees

Employees are crucial to the success of a company. They therefore play a central role in our business endeavors. In accordance with our company values, we live a culture of mutual esteem and respect. We seek to further our entrepreneurial success by recruiting, developing and motivating the most suitable employees, which is why we focus our employee strategy on employee development, compensation, and performance management. We furthermore strive to foster diversity among our employees (more information can be found under “People”).

Responsibility for the environment

In the manufacture of our products, we seek to impact the environment as little as possible. This especially includes efficiently conserving resources such as energy, water and raw materials while also continuously reducing our emissions and waste.

Environmental management system

In our Corporate Environment, Health and Safety Policy, which is applicable Group-wide, we have defined our principles and strategies for environment, health and safety. It is an integral component of our EHS management system, which is certified annually by external auditors in accordance with the international standard OHSAS 18001. At all our sites, local EHS managers oversee operational environmental protection measures. These employees continually receive training and obtain additional qualifications. Since our businesses are constantly changing, our environmental management system is subject to internal and external audits on a regular basis to ensure that the ISO 14001 requirements are still being met. In 2017, we obtained an ISO 14001 group certificate for the ninth consecutive year. This certificate covers 83 sites around the world. Additionally, our environmental management system was successfully adapted to the new ISO standard 14001:2015. Our spending on environmental protection, health and safety efforts totaled € 200 million in 2017, which also includes investments made during the year.

Focus areas: Energy efficiency, greenhouse gas emissions, water, waste and recycling

Climate impact and resource scarcity are key challenges facing society in the 21st century. As a responsible company, it is especially important for us to do our part. We have therefore set ourselves the goal of reducing total direct and indirect greenhouse gas emissions by 20% by 2020 (2006 baseline), irrespective of production growth. In 2017, the CDP (formerly the Carbon Disclosure Project) gave our efforts to conserve water a ‟B” rating (2016: A-). The CDP assesses companies in terms of their performance and transparency in climate impact and water management.

To achieve our climate impact mitigation goals, we have launched the EDISON program that consolidates all our climate impact mitigation and energy efficiency activities. Through the more than 300 EDISON projects initiated since 2012, we aim to annually save around 98 metric kilotons of CO2 in the medium term. Overall, thanks to the EDISON projects we have saved approximately 75,000 mega­­watt hours of energy since 2012.

At the same time, we are pushing forward with the changeover to regenerative power generation. In 2017, we installed solar power panels at the Jigani and Peenya sites of our Life Science business sector in Bangalore, India. These generate a total of 1,265,000 kilowatt hours of power per year. Since each of the installations covers approximately 30% of the sites’ power requirements, we will lower our annual emissions by around 1,200 metric tons. We also installed a solar voltaic system in Burlington, Massachusetts (USA). With an output of 182 kilowatts, this is to generate 218,000 kilowatt hours of power annually, thus reducing our emissions by around 60 metric tons.

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Energy consumption1

in gigawatt hours 2014 2015 2016 2017
Total energy consumption 2,162 2,260 2,241 2,270
Direct energy consumption 1,354 1,452 1,445 1,386
Natural gas 1,207 1,206 1,267 1,256
Liquid fossil fuels2 120 111 37 34
Biomass and self-generated renewable energy 27 135 141 96
Indirect energy consumption 808 808 796 884
Electricity 711 712 701 740
Steam, heat, cold 97 96 95 144
Total energy sold 0.6 0.5 0.5 0.3
Electricity 0.6 0.5 0.5 0.3
Steam, heat, cold 0 0 0 0
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in terajoules 2014 2015 2016 2017
Total energy consumption 7,783 8,137 8,068 8,172
Direct energy consumption 4,874 5,228 5,202 4,990
Natural gas 4,345 4,342 4,561 4,522
Liquid fossil fuels2 432 400 133 122
Biomass and self-generated renewable energy 97 486 508 346
Indirect energy consumption 2,909 2,909 2,866 3,182
Electricity 2,560 2,563 2,524 2,664
Steam, heat, cold 349 346 342 518
Total energy sold 2.2 1.8 1.8 1.1
Electricity 2.2 1.8 1.8 1.1
Steam, heat, cold 0 0 0 0
1
In line with the Greenhouse Gas Protocol, for all previous years (up to the 2006 baseline) the energy consumption has been calculated based on the current corporate structure of the reporting year and retroactively adjusted for acquisitions or divestments of (parts of) companies, or for changes in emission factors (portfolio-adjusted).
2
Light and heavy fuel oil, liquefied petroleum gas (LPG), diesel and gasoline.
24 KB EXCEL

Total greenhouse gas emissions (Scope 1 and 2 of the GHG Protocol)1

in metric kilotons 20062 2014 2015 2016 2017
Total CO2eq3 emissions 793 731 726 711 731
thereof
direct CO2eq emissions 379 390 393 387 374
Indirect CO2eq emissions 414 341 333 324 357
Biogenic CO2 emissions 6 11 54 56 38
1
In line with the Greenhouse Gas Protocol, for all previous years (up to the 2006 baseline) the greenhouse gas emissions have been calculated based on the current corporate structure of the reporting year and retroactively adjusted for acquisitions (e.g. Sigma-Aldrich in 2015) or divestments of (parts of) companies, or for changes in emission factors (portfolio-adjusted).
2
Baseline for our emission targets is 2006.
3
eq = equivalent.

Energy management plays a key role in our efforts for energy efficiency and climate impact mitigation. Our production sites in Darmstadt and Gernsheim account for around 28% of our global energy consumption. Both these facilities have fulfilled the international energy management standard ISO 50001 since 2012. Currently, 12 of our production sites have a certified energy management system. We intend to maintain our climate targets in the future. In 2017, the Executive Board confirmed the greenhouse gas reduction target and the required measures to achieve it, for instance through projects to raise energy efficiency levels and to reduce process-related greenhouse gas emissions.

In addition to energy, we also focused on the topic of water in 2017. Since 2016, we have been pursuing the goal of implementing a sustainable water management system at sites with high consumption levels by 2020. At sites with relevant water use located in areas of high water stress, we are aiming to cut our water consumption by 10% by 2020 (2014 baseline). At the end of 2017, we had lowered our water consumption at the relevant sites by around 9% in comparison with 2014. In 2017, the CDP gave our efforts to conserve water a ‟B”, two scores better than in the previous year.

Natural resources are becoming scarcer. We therefore want to use raw materials as efficiently as possible and to limit the loss of raw materials. Consequently, we intend to minimize the environmental impacts of our waste as far as possible. In 2016, we developed a company Waste Score, which allows us to compare the amount of waste our sites are producing and monitor the development of the amount of waste we produce. In 2017, the Executive Board resolved for the first time to reduce the environmental impact of our waste by 5% by 2025 (2016 baseline). For this purpose, we are analyzing the improvement potential of production processes and disposal routes employed by our sites. In principle, all sites are to contribute to the waste reduction efforts.

Responsibility for society

We see ourselves as part of society – both at our individual sites and worldwide. Taking responsibility towards society is an integral part of our entrepreneurial approach. We believe that we can make an important contribution to the community through our knowledge, our skills and our products.

Our social responsibility activities are primarily focused on those areas in which we have problem-solving expertise stemming from our core businesses. We are thus engaged in health and environmental projects and furthermore support education, especially in the natural sciences. We provide disaster relief in emergency situations, particularly in those regions in which we operate.

Our subsidiaries are engaged in a wide variety of local projects. We have defined a general set of criteria for selecting projects, and the decisions concerning specific projects are made by our subsidiaries. In 2017, we spent a total of € 34 million on community engagement activities.