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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. The Chairman of the Executive Board and CEO is responsible for the committee, which is chaired by the head of the Group Corporate Responsibility unit.

Humankind is being confronted with global societal challenges such as climate change, resource scarcity and insufficient access to healthcare in low- and middle-income countries. Responsible governance can help solve these global issues. We believe that in pursuing this approach, we can also strengthen our financial performance. In 2018, we strategically repositioned ourselves: We focus even more on creating sustainable value for both our company and society. To achieve this, we are taking a shared value approach. We have adapted our three strategic spheres of activity to bring them more in line with our business. These spheres are organized under the headings of ‟Global Health”, ‟Sustainable Solutions” and ‟Broad Minds”. We focus our resources on those areas where we can have the greatest impact. The effects our actions have on society – such as the development of new products – should be considered strategically in their own right. Needless to say, we respect the interests of our employees, customers, investors and the community, and work to minimize ethical, economic and social risks, thereby sustainably contributing to our long-term corporate success.

Global Health: In low- and middle-income countries, many people lack access to high-quality health solutions. We join forces with partners to provide local solutions and develop treatments for neglected tropical diseases in Africa. For instance, we are using praziquantel tablets to fight schistosomiasis. Through our Global Health Institute, we are developing diagnostics, therapies and preventive solutions to address infectious diseases such as malaria and therapeutic challenges such as antimicrobial resistance.

Sustainable Solutions: We are constantly working to improve the sustainability footprint of our products – even during their use phase – which also helps our customers achieve their own sustainability goals. To this end, we have established systematic approaches for product development such as Design for Sustainability, a program within our Life Science business sector that allows us to assess the sustainability of our products during development. Product developers use various tools, such as product lifecycle analyses.

Broad Minds: As a science and technology company, we endeavor to excite people about science, inspire curiosity and help creativity to soar. Our goal is to strengthen our reputation in the field of science, especially in those areas where we have particular expertise. We not only support educational programs for schools, but also back pioneering research at institutes of higher learning. Reflecting the way that music and literature inspire people, we promote a range of cultural initiatives worldwide. Creativity and curiosity are the bedrock of science, culture and art, and also underpin our holistic approach.

Our corporate responsibility efforts are aligned with the United Nations (UN) Sustainable Development Goals (SDGs), and we are working to help achieve this ambitious agenda by 2030. In addition to promoting the SDGs, we also support relevant responsible governance initiatives. Through our membership in the UN Global Compact we are committed to upholding the Compact’s principles on human rights, labor standards, environmental protection and anti-corruption. We ensure that we live our own corporate responsibility principles by following the guidelines of the Responsible Care Global Charter, which is an initiative of the International Council of Chemical Associations (ICCA). Responsible Care aims to help the chemical industry enhance its environmental, health and safety performance. 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). This globally unique alliance seeks to make sustainability a core part of the chemical industry’s guiding principles and to drive the sector’s position within the German economy as a key contributor to sustainable development.

To us, corporate responsibility means listening and taking action, and so we place great importance on dialogue with our various stakeholders. These stakeholders include employees, business associates, the Merck family, investors, regulatory agencies and industry associations. This continuous exchange creates transparency and clearly demonstrates how we live our values. In recognition of our dedication to responsible and sustainable business practices, we were again listed on the FTSE4Good index in 2018. Inclusion in this leading international sustainability index is only possible if a company meets stringent social, environmental and ethical behavior criteria.

Our good standing in other major sustainability indices was also maintained in 2018, with our inclusion in the STOXX Global ESG Leaders index, the Euronext Vigeo Eurozone 120 index and the Ethibel Sustainability Index (ESI) Excellence Europe. In early 2019, EcoVadis, an independent rating agency, granted us Gold status for our sustainability performance. EcoVadis assesses around 45,000 suppliers from 150 countries across the four categories of Environment, Social, Ethics and Sustainable Procurement.

Strategic sphere of activity: Global Health

Our aim is to create a healthier future for all: for individuals, communities and countries. We want to use innovation in science and technology to improve the health of underserved populations in low- and middle-income countries. To achieve this, we are leveraging our expertise from all business sectors and collaborating closely with a wide range of partners. We also participate in industry-wide initiatives and work closely with other businesses to develop new approaches.

In 2018, we refined our strategy for addressing the global needs that impact access to healthcare. Our strategy is designed to overcome barriers to access for underserved populations and communities in developing countries in a business-integrated and sustainable manner, thereby creating ‟shared value”. For us, creating shared value means developing business models that increase the value and competitiveness of our company and at the same time solve unmet health needs and bring value to underserved populations. We want to be instrumental in the elimination of schistosomiasis and fight malaria and other infectious diseases while helping to build local capacity across the value chain and positioning our company as a leading and reliable partner.

The 2018 Access to Medicine Index continues to rank us in fourth place. Every two years, this index assesses the world’s leading pharmaceutical companies on activities and initiatives they have implemented to promote access to medicine in developing countries. We received particular recognition for leading practices such as establishing our Global Health Institute to accelerate research and development (R&D) targeting schistosomiasis, malaria and bacterial infections, strengthening commitment to open innovation and establishing the Capacity Advancement Program to improve access to better diabetes, cancer, hypertension and fertility therapies in underserved regions.

Strengthen the availability of healthcare solutions

We research, develop and refine healthcare solutions that address unmet needs, tailoring them to local environments. With our Global Health Institute, we have defined a comprehensive portfolio of R&D projects to develop integrated health solutions. This includes treatments, diagnostics, preventive measures against infections and approaches to strengthen health systems, targeting schistosomiasis, malaria and bacterial infections. The Institute operates as a social business enterprise delivering innovations for the most vulnerable – with a special focus on women and children in the developing world.

This portfolio also includes the development of a new pediatric formulation of praziquantel to treat the worm disease schistosomiasis in children under the age of six, through the Pediatric Praziquantel Consortium, which is a public-private partnership. Marketing Authorization Application is planned for 2020, and we expect the product to be ready to launch in the first endemic countries in Africa in 2021.

For malaria, we are completing the Phase I/Ib clinical activities of our anti-malarial compound, which has the clear potential to treat and prevent malaria. In the drug discovery area, our strategic collaboration with the University of Cape Town in South Africa has led a new research and development platform. In 2018, this collaboration (including Medicines for Malaria Venture) was extended to continue screening activities with the aim of identifying new therapeutic solutions while building up research capacity in and for Africa. This program continues to leverage our proprietary chemical library of almost 100,000 compounds to identify new lead programs for the treatment of malaria. The program is co-funded by the German Federal Ministry of Education and Research.

We have developed a kit for malaria diagnosis based on our Muse® cell analyzer. It aims to accurately diagnose malaria and measure the type of malaria parasite as well as the infection level. The malaria kit was launched for research use in 2018. At the end of 2018, we divested the technology platform developed by our Life Science business sector to the U.S. laboratory supplier Luminex, which is now marketing the diagnostic kit.

Additionally, we are working towards demonstrating the efficacy of our product IR3535® for malaria prevention in Africa. The insect repellent is already used for complementary prevention from vector-borne diseases, such as dengue fever or ZIKA. Products containing this active ingredient stand out due to their particularly good tolerance in young children and pregnant women. In 2018, we entered a collaboration to support the National Malaria Control Program in Ghana. Here we develop malaria prevention solutions based on IR3535®.

Address affordability challenges

Through intellectual property initiatives and equitable pricing strategies we are able to provide assistance to those people who are unable to pay for the health solutions they need. Publicly available databases enable us to be transparent about our patents and patent applications. To strengthen our commitment to the London Declaration to fight neglected tropical diseases, we formed a partnership with the Drugs for Neglected Diseases initiative (DNDi), under which we are involved in the Drug Discovery Booster project for neglected tropical diseases. The objective is to find potential cures for leishmaniasis and Chagas disease.

As one of more than 100 members of WIPO Re:Search, an open innovation platform sponsored by the World Intellectual Property Organization (WIPO), we share intellectual property and knowledge with the aim of accelerating early discovery for infectious diseases. Through WIPO we are collaborating with the University of Buea (Cameroon) and University of California San Diego (United States) to find potential cures for onchocerciasis, leishmaniasis, Chagas disease and African trypanosomiasis (sleeping sickness).

We continue to work with the World Health Organization (WHO) to combat the worm disease schistosomiasis in Africa. In 2018, we donated approximately 200 million praziquantel tablets for distribution in 34 African countries, and this year our donation program was expanded to include Burkina Faso, Niger and Sierra Leone. We keep production capacities at a level sufficient for manufacturing 250 million tablets a year. Since 2007 we have supplied almost 900 million tablets free of charge, which is equivalent to the treatment of around 360 million schoolchildren. As a founding member of the Global Schistosomiasis Alliance, we are helping to eliminate schistosomiasis worldwide.

Raising awareness

Health professionals, communities and patients are empowered through access to the appropriate tools, knowledge and skills to help them make informed decisions about prevention, diagnostics, treatment and care. Our regular campaigns help to increase awareness of certain diseases globally, with a focus on those diseases where we have extensive expertise, such as cancer, thyroid disorders, diabetes and multiple sclerosis. In addition, we have championed World Malaria Day with awareness campaigns and through engagement around the We for Malaria program. In 2018, we hosted events in Ghana that created the opportunity for collaborations in research and business activities to tackle preventive methods against malaria. Via our charitable organization, we bring together some of our activities in underserved regions of the world. Our Access Dialogues series promote discussion with numerous public and private stakeholders on access-to-healthcare challenges. Dialogues in 2018 covered the topics of innovation and intellectual property as well as supply chain and delivery.

A schistosomiasis health education project in Ethiopia was launched jointly with the NALA Foundation at the end of 2017, with the aim of promoting the long-term behavioral change that is needed to eliminate schistosomiasis. The project targets a rural area in Ethiopia, focusing on approximately 260,000 students in 290 schools through activities such as distribution of customized educational material. In 2018, we reached 74 schools with nearly 70,000 students. The goal is to extend this model to other regions in Africa.

The Global Pharma Health Fund (GPHF), a non-profit organization funded by our company, works to combat falsified medicines in developing and emerging countries. To date, the GPHF has supplied 843 Minilabs at cost to detect falsified medicines in around 100 countries. In 2018, the GPHF developed testing methods for five additional active ingredients so that the Minilab can now test 90 active ingredients, ranging from antimalarials, antimycobacterials and antivirals to antipyretics and antibiotics.

Promoting accessibility and improving supply chains

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.

NTDeliver is our digital information tool, which facilitates transparency in supply chains for medicine donations. Deliveries from companies running donation programs are clearly displayed – from purchase orders made by the WHO through to delivery to the first warehouse in the destination country. This improves coordination and provides a more transparent overview of the in-country inventory. Following a pilot in 2017, we carried out two implementation rounds in 2018, including using NTDeliver last mile tracking as a standard reporting tool in the school-based schistosomiasis program in Kenya. The system is collecting and consolidating field information and has helped us to reach out to more than 12,000 teachers throughout Kenya.

In 2018, we started the CURAFATM project as part of our vision to improve primary healthcare for everyone everywhere. So-called CURAFATM points of care for integrated primary healthcare services are run by local pharmacists and nurses, who provide pharmaceutical and clinical services, medicine, digital health solutions, and insurance and financing schemes. The project was implemented in collaboration with the non-governmental organization Amref Health Africa. We rolled out five primary healthcare points in Kenya during 2018.

Strategic sphere of activity: ­Sustainable Solutions

Through our products, we are helping overcome global challenges such as climate impact and resource scarcity. In doing so, we are also supporting our customers in reducing the impacts of their own activities and achieving their own sustainability goals.

Life Science: reducing environmental impacts throughout the product life cycle

It is important to us that we improve the environmental 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, we have developed a comprehensive approach for more sustainable life science products. This keeps sustainability criteria in the foreground during product development or re-engineering, and documents them in a scorecard. When developing a new product, our aim is to improve on as many of these criteria scores as possible. 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. By the end of 2018, 27% of these product development projects met three or more sustainability criteria.

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. More than 750 greener alternatives to conventional products are available so far. With DOZN®, we have developed a web-based quantitative Green Chemistry analysis tool. To date, we have used this matrix to assess and improve more than 40 products. It is our goal to make this system available to our customers in 2019, so that they can measure the environmental impact of their research and make more environmentally conscious decisions.

We are expanding our portfolio to include greener alternatives, such as the new bio-based solvent, Cyrene™, which 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.

The focus is not just on the current life of our products, as we 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 led to the recycling of more than 2,738 metric tons of our customers’ products from 2015 to 2018.

Performance Materials: increasing the sustainability of ­manufacturing processes and end products

In 2018, our Performance Materials launched the new liquid crystal technology SA-VA (Self-Aligned Vertical Alignment). 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 fewer waste products than conventional technologies during display manufacture. SA-VA also provides a more efficient display manufacturing process. Since SA-VA technology can be applied at lower temperatures, it is also suitable for sensitive materials such as those used in premium products, or for forward-looking applications such as flexible displays.

Organic light-emitting diodes (OLEDs) likewise increase the energy efficiency of displays while also providing brilliant colors and razor-sharp images. To further enable unique display applications and efficient production of large-area OLED displays, we are developing high-performance OLED materials for vacuum evaporation methods or printing processes.

To utilize our market and technological leadership in liquid crystals beyond applications in energy-saving displays, we started manufacturing liquid crystal window modules at a new site in Veldhoven (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. These windows can be manually or automatically controlled to darken and provide sun protection or can create privacy by switching from transparent to opaque. In contrast to competing technologies, our newly branded EyriseTM products switch within seconds and are highly color-neutral. Architects and builders can customize the desired color to suit the setting. In response to market demand, we have prioritized solar control during 2018, and we have three sophisticated architectural projects in the pipeline. We were able to realize the first commercial project in October 2018: large solar control windows for the company Orkla in Oslo (Norway). Furthermore, we presented a selection of these innovative architectural solutions at the trade fair ‟BAU 2019”, where we focused on our eyrise™ technology. Among other things, we showed an iconic building design by renowned Brazilian architect Oscar Niemeyer. The building is currently being constructed for the company Kirow Ardelt in Leipzig (Germany).

For the semiconductor industry, we have developed a series of environmentally sustainable specialty chemicals and materials – including PFOS-free antireflective and photoresist coatings.

In the cosmetics industry, we are addressing the continuing trend for ingredients that meet stringent sustainability criteria. Our portfolio of fillers eliminates the need for microplastic particles that are heavily criticized for polluting waters and damaging marine life. We are also committed to continuously increasing the energy efficiency of our production processes. Our cosmetic formulations comply with strict criteria. By the end of 2018, 68 of our cosmetic pigments and active ingredients were certified according to Ecocert’s COSMOS standard for organic and natural cosmetics.

Strategic sphere of activity: Broad Minds

The promotion of science, education and culture in an integrated manner constitutes one of the central concerns of our engagement in society. This is in line with our 350-year tradition of advancing art and culture. In this way we champion characteristics that are indispensable for our business activities as a high-tech company: creativity, the passion for new discoveries and curiosity, together with 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 35 years. Since 1996, we have been organizing the state-level competition for the German Federal State of Hesse. In 2018, we hosted the nationals for the third time.

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 2018, around 2,500 school students used the chemistry laboratory and around 1,000 school students experimented in the biology laboratory.

In 2017, we launched a pilot project for the continuing education of teachers in order to transfer our commitment to STEM education in an international context for the first time. We started in India, followed by projects in Chile, Kenya and Tanzania in 2018. By the end of the year, we had trained almost 100 teachers who act as multipliers and will reach thousands of school students.

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 students to consider a STEM-related career. In 2018, over 2,800 employees invested more than 19,000 hours in the program, reaching over 66,000 young people. As part of SPARK, in 2018 we once again sent our Curiosity Cube™ on a journey through the United States and Canada. This is a freight container that transforms into a mobile laboratory and is equipped with state-of-the-art technology. Directed by our employees, school students can use it to carry out scientific experiments. In 2018, the Cube traveled approximately 30,000 kilometers across the United States and engaged students in 108 communities. 94% of schools visited fall under the ‟Title 1” category, where students mainly come from low-income backgrounds.

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 31,000 people attending them in 2018. In the orchestra workshop, children and young people gained their first experience in a professional orchestra. We also fostered enthusiasm for classical music among young people through seat cushion concerts for children aged four years and above as well as through youth concerts. In addition, the orchestra again toured internationally. Concerts took place in Austria, the United States and China in 2018. In Beijing, the musicians held an orchestra workshop with music students at the local university. The subsequent concert in front of an audience of around 1,700 was a huge joint success.

Promoting literature

Like music, literature is an important mediator between cultures. That is why we support five literary prizes around the world. The awards primarily recognize those authors who build bridges between cultures, as well as between literature and science. We awarded four of the prizes in 2018: The Johann Heinrich Merck Award for Literary Critique and Essay of Merck KGaA, Darmstadt, Germany, in Germany went to author and translator Martin Pollack. The Italian Premio Letterario of Merck KGaA, Darmstadt, Germany, was awarded to natural scientist, author and professor Carl Safina, and to physicist and science historian Lucio Russo. The winners of the Japanese Kakehashi Literature Award of Merck KGaA, Darmstadt, Germany, were author Clemens J. Setz and his translator Ayano Inukai. The Translation Award of Merck KGaA, Darmstadt, Germany, in Russia went to authors Nina Federowa, Ekaterina Aralova, Natalia Stillmark and Tatiana Zborovskaja. The Tagore Literature Award of Merck KGaA, Darmstadt, Germany, in India will once again be offered in 2019.

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, far 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.

In 2018, we successfully completed the third and final phase of the REACH registration process by registering all substances annually produced or imported in quantities ranging from one to 100 metric tons with respect to the risks they pose in terms of their use, storage, transport and disposal. All the chemical substances concerned in our portfolio were registered on schedule. This process also includes substances added to our portfolio from the Sigma-Aldrich acquisition.

Safety of our Healthcare products

Patient safety has a top priority in everything we do. During the entire life cycle of our medicines, we provide patients 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 Patient Safety unit continuously monitors and evaluates the safety and risk-benefit ratio of our medicines worldwide (pharmacovigilance). 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 at all times with high-quality original 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 global focus of our procurement, we are continuously working to ensure adherence to our supply chain standards.

As a member of the industry initiative ‟Together for Sustainability” (TfS), we are able to use the supplier self-assessments and audit results shared among all member companies, who in turn abide by all restrictions stipulated within competition law. Through the shared platform approach, we have access to the sustainability assessment scorecards of more than 10,700 companies as well as over 1,000 audits reports.

Responsibility for our employees

Our employees contribute to groundbreaking progress in science and technology across the world. They are the basis of our success and therefore play a central role for the success of our business. In accordance with our company values, we live a culture of mutual esteem and respect. To remain successful in the future we want to attract people to our company who contribute their curiosity, their courage and spirit of invention. We therefore place a strategic focus on employee development, leadership and performance management. Furthermore, we strive to foster diversity among our employees (more information can be found under ‟People”).

Responsibility for the environment

We seek to impact the environment as little as possible while doing business. 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 ISO 14001. 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 2018, we obtained an ISO 14001 group certificate for the tenth consecutive year. This certificate covers 81 sites around the world.

All reported environmental key figures do not include data on the Consumer Health business, since these operations were transferred to Procter & Gamble – effective December 1, 2018 – and have been classified as discontinued operations within the meaning of IFRS 5 since April 2018.

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 2018, the CDP (formerly the Carbon Disclosure Project) gave our efforts for the sustainable use of energy a ‟C” rating (2017: B). The CDP assesses companies in terms of their performance and transparency in climate impact and water management.

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Energy consumption1,2

In gigawatt hours 2015 2016 2017 2018
Total energy consumption 2,141 2,117 2,194 2,232
Direct energy consumption 1,343 1,330 1,319 1,322
Natural gas 1,200 1,260 1,254 1,256
Liquid fossil fuels3 110 36 32 32
Biomass and self-generated renewable energy 33 34 33 34
Indirect energy consumption 798 787 875 910
Electricity 702 692 729 761
Steam, heat, cold 96 95 146 149
Total energy sold 0.3 0.3 0.1 0.0
Electricity 0.3 0.3 0.1 0.0
Steam, heat, cold 0.0 0.0 0.0 0.0
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In terajoules 2015 2016 2017 2018
Total energy consumption 7,708 7,621 7,898 8,035
Direct energy consumption 4,835 4,788 4,748 4,759
Natural gas 4,320 4,536 4,514 4,522
Liquid fossil fuels3 396 130 115 115
Biomass and self-generated renewable energy 119 122 119 122
Indirect energy consumption 2,873 2,833 3,150 3,276
Electricity 2,527 2,491 2,624 2,740
Steam, heat, cold 346 342 526 536
Total energy sold 1.1 1.1 0.4 0.0
Electricity 1.1 1.1 0.4 0.0
Steam, heat, cold 0.0 0.0 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 corporate structure as of December 31 of the reporting year and retroactively adjusted for acquisitions or divestments of (parts of) companies, or for changes in emission factors (portfolio-adjusted).
2
All reported environmental key figures do not include data on the Consumer Health business, since these operations were transferred to Procter & Gamble - effective December 1, 2018 - and have been classified as discontinued operations within the meaning of IFRS 5 since April 2018.
3
Light and heavy fuel oil, liquefied petroleum gas (LPG), diesel and gasoline.
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Total greenhouse gas emissions (Scope 1 and 2 of the GHG Protocol)1,2

In metric kilotons 20063 2015 2016 2017 2018
Total CO2eq4 emissions 786 722 689 704 698
thereof
direct CO2eq emissions
378 391 384 373 354
Indirect CO2eq emissions 408 331 305 331 344
Biogenic CO2 emissions 0 13 14 13 13
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 corporate structure as of December 31 of the reporting year and retroactively adjusted for acquisitions (for example Sigma-Aldrich in 2015) or divestments of (parts of) companies, or for changes in emission factors (portfolio-adjusted).
2
All reported environmental key figures do not include data on the Consumer Health business since, these operations were transferred to Procter & Gamble - effective December 1, 2018 - and have been classified as discontinued operations within the meaning of IFRS 5 since April 2018.
3
Baseline for our emission targets is 2006.
4
eq = equivalent.

To achieve our climate impact mitigation goals, we have launched the EDISON program, which consolidates all our climate impact mitigation and energy efficiency activities. Through the more than 360 EDISON projects initiated since 2012, we aim to annually save around 177 metric kilotons of CO2 in the medium term. Overall, thanks to the EDISON projects we have saved approximately 89,000 megawatt hours of energy since 2012.

At the same time, we are pushing forward with the changeover to renewable energies. In 2017, we installed a solar voltaic system in Burlington, Massachusetts, United States. It has an installed capacity of 182 kilowatts and generated 136,000 kilowatt hours in 2018. 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 29% 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 are working to implement further measures to achieve our climate goal. For example, we are steadily reducing our process-related emissions in our Life Science business sector through process optimization. In 2018, this enabled us to save 16,000 metric kilotons of CO2 equivalents.

Alongside energy efficiency and climate protection, we also focus on water. 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 2018, we had lowered our water consumption at the relevant sites by 11% in comparison with 2014. In 2018, the CDP gave our efforts to conserve water a ‟B–‟ rating (2017: B). Natural resources are becoming scarcer. We therefore want to use raw materials as efficiently as possible and to limit the loss of raw materials. In this way, 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. Based on this score, we have set ourselves the goal of reducing the environmental impact of our waste by 5% by 2025 (2016 baseline). For this purpose, we continuously analyze the improvement potential of our production processes and disposal routes. In 2018, we also established two expert panels on the topic of waste management. They regularly discuss best practice examples and thus facilitate an exchange of experience between our global sites.

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 culture projects and furthermore support education, especially in the natural sciences. Additionally, we provide disaster relief and support people in need in the areas 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 2018, we spent a total of € 36 million on community engagement activities. For the first eleven months this amount includes the Consumer Health business, which was divested as of December 1, 2018. This figure does not include contributions from our charitable organization.

To mark our 350-year anniversary, we stepped up our commitment and carried out more than 350 charitable projects in 60 countries in 2018. In more than 60% of all initiatives our colleagues joined us in our efforts, whether through donations in cash or in kind or through their active collaboration in projects.