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Environmental protection

Minimizing negative environmental impacts and taking meaningful climate action requires a holistic approach while also constantly monitoring practices and performance. Our goal is to decouple business growth from negative environmental impacts wherever possible. Our production sites are located in established industrial and commercial zones. Before acquiring a company – and thus its facilities – we first conduct an environmental risk assessment, taking into consideration information from publicly accessible sources such as local residents and non-governmental organizations (NGOs).

Roles and responsibilities

The Chair of the Executive Board and CEO of our company is responsible for environmental protection, which also covers climate action, water management, waste and recycling, biodiversity, and plant and process safety. Her duties include the approval of overarching Group-wide guidelines such as our EHS Policy. Furthermore, our Sustainability Board (MSB) monitors the Group-wide implementation of environmental protection goals.

The Group function Corporate Sustainability, Quality and Trade Compliance (SQ) is responsible for steering all the related measures globally. SQ senior leadership approves operational standards and regularly reports on environmental protection to the Executive Board. Every year, SQ prepares a comprehensive environment, health and safety report that covers topics such as climate action, water management, waste and recycling, and plant and process safety. The Executive Board uses this report to steer the strategic direction and as verification for our ISO 14001 certifications. Additionally, the Executive Board receives a monthly update so that measures can be adjusted in a timely manner.

Within our business sectors, the Operations Leadership Committee (OLC) makes strategic decisions on issues pertaining to emissions, energy, water, and waste topics. This body consists of representatives from Life Science, Healthcare and Electronics as well as from SQ. Decisions made by the OLC and any resulting actions are implemented by the respective business sector. Once per quarter, the OLC members update their leaders on matters relating to environmental protection, and this information, if relevant, is then shared with the MSB.

Our commitment: Standards and standard operating procedures

Our approach to environmental management is founded on our Group EHS (Environment, Health and Safety) Policy, which has been approved by our Executive Board. Aligned with the requirements of the chemical industry’s Responsible Care® Global Charter and the ISO 14001 environmental management standard, this policy underscores our leaders’ responsibility for environmental stewardship and health and safety. It is also aimed at our suppliers, calling on them to likewise adopt higher standards of environmental sustainability and safety. Our EHS policy thus complements the Supplier code of conduct (formerly Responsible Sourcing Principles) of our Group Procurement function. Through our Contractor EHS Management Standard we aim to ensure that our contract partners also take environment, health and safety aspects into account.

Potential EHS risks posed by acquisitions, divestments or site closures are assessed within the scope of due diligence, a process defined in our EHS Due Diligence and Post Merger Transaction Standard. We prioritize new sites when performing audits.

Material investments in environmental impact mitigation

Efforts to prevent and monitor air, water and soil emissions entail significant expense on our part, as does proper waste disposal. Moreover, we set up provisions for groundwater and soil remediation to ensure that we can execute all the necessary measures. As of December 31, 2022, our provisions for environmental protection totaled € 148 million, 94% of which was attributable to Merck KGaA, Darmstadt, Germany.

Assessing environmental impacts

As a matter of principle, we conduct risk-based assessments along with audits of all our production facilities every three years with the goal of analyzing and minimizing our environmental footprint. Conducted by Corporate Sustainability, Quality and Trade Compliance (SQ), these assessments serve to ensure that our requirements are being met, with appropriate corrective measures being implemented as needed. In our Group EHS audits, we assess our sites’ performance on a five-tier scale (“excellent”, “good”, “satisfactory”, “poor” and “critical”), which in turn determines how frequently audits are conducted. If the findings are deemed to be good, we audit the facility less often, while significant violations can increase the frequency. In 2022, we commissioned a total of 41 audits, which were conducted either virtually or on site. Almost all audited sites received either a “good”, “satisfactory” rating, one site was rated “poor” and no sites were rated as “critical".

Reporting incidents and violations

To review critical situations, near misses and environmental incidents as quickly as possible and take countermeasures, we have a set of reporting procedures in place that allow us to track the respective incident, its degree of severity and all risk mitigation efforts. We record all incidents Group-wide and report them to the Executive Board on an annual basis.

In the event of a major occurrence, our digital Rapid Incident Report System (RIRS) promptly notifies SQ and Group Communications functions, who, if necessary, inform the Executive Board. Major incidents could include fatalities, accidents with multiple casualties, incidents that impact neighboring communities or natural disasters such as earthquakes and flooding. Through the RIRS, we can quickly coordinate with all those involved and inform the other sites immediately of the respective event. In addition, employees as well as external stakeholders can report any violations of our standards to Group Compliance.

In 2022, we recorded two significant incident-related spills. One took place at a production site in Germany, the other one in the USA. In neither case were people injured nor were negative environmental impacts expected, which is why it was not necessary to communicate these incidents to the public.

ISO 14001:2015 Group certificate

Since 2009, our company has held an ISO 14001 Group certificate that requires all production sites with more than 50 employees to implement an environmental management system with predefined indicators such as greenhouse gas emissions and water consumption. Other facilities are not obligated to undergo certification. The annual internal audit reports and management reviews carried out under the Group certificate give us a better overview of how all our sites are performing. In 2022, 95 of our sites worldwide were covered by the ISO 14001 certificate.

Annual external audits are used to monitor our certifications. As part of a defined sample procedure for the Group certificate, a total of 12 sites were externally audited in 2022, with all audited facilities passing. In addition to external inspections, internal audits serve to ensure Group-wide compliance with our requirements.

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