CORPORATE RESPONSIBILITY Report 2019 Merck Corporate Responsibility Report 2019

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CORPORATE RESPONSIBILITY Report 2019 Merck Corporate Responsibility Report 2019 CORPORATE RESPONSIBILITY Report 2019 Merck Corporate Responsibility Report 2019 Content 4 STRATEGY & MANAGEMENT 98 EMPLOYEES 5 Company profile 99 Good leadership 8 CR strategy 102 Career at Merck 10 Sustainable Development Goals 105 Fairness and dialogue 16 Stakeholder dialogue 107 Diversity 19 Materiality analysis 111 Work-life balance 113 Health and safety 25 BUSINESS ETHICS 26 Corporate Governance 117 ENVIRONMENT 26 Governance 118 Environmental stewardship 27 Compliance 121 Climate action 32 Responsible marketing 124 Waste and recycling 34 Interactions with health systems 126 Water management 36 Suppliers 129 Plant and process safety 36 Supply chain standards 39 Mica supply chain 41 Human rights 131 COMMUNITY 43 Bioethics 132 Community involvement 48 Clinical studies 134 Global Health 53 Animal welfare 136 Broad Minds 57 PRODUCTS 139 FACTS & FIGURES 58 Innovation and digitalization 140 Report profile 63 Sustainable products 143 Indicators 63 Sustainable product design 143 Economics 67 Packaging and recycling 144 Business ethics 69 Health for all 147 Employees 69 Global strategy 160 Environment 72 Focus programs 167 Community 76 Open innovation sharing 169 Goals 78 Pharmaceutical supply chain 180 Recognition and rankings 81 Prices of medicines 184 Non-financial report 83 Health awareness 189 GRI content index 86 Product safety and quality 189 General disclosures 86 Chemical product safety 194 Economic Standards 89 Patient safety 197 Environmental Standards 93 Product-related crime 201 Social Standards 96 Transport and warehouse safety 208 Global Compact CoP 213 Assurance reports 213 Assurance report CR 215 Assurance report NFR 1 Merck Corporate Responsibility Report 2019 Letter from the CEO Dear Readers, What drives you? We all have goals and values that inform fair and respectful treatment of one other and is an effective our actions - this holds true for people and companies alike. tool against discrimination in the workplace. At Merck, the force that drives us is our purpose: We are In 2019, we also signed the “Women's Empowerment curious minds dedicated to human progress. Principles”, an initiative of UN Women and the UN Global For us, acting responsibly means respecting the Compact to support women. interests of our employees, customers, investors, and Diversity makes us stronger, which is why we have society. That is why we support the United Nations Global decided to promote it. For example, we launched training Compact and its principles, which cover human rights, labor courses designed to help participants identify their own standards, environmental protection, and anti-corruption. unconscious biases. We want to give all brilliant ideas equal For example, in 2019 we adopted the Group-wide "Social consideration, regardless of whether they are from and Labor Standards Policy”, which addresses the guidelines colleagues in Darmstadt or Shanghai. of the International Labour Organization (ILO), emphasizes 2 Merck Corporate Responsibility Report 2019 Collaboration is the foundation for a good future. We want Last but not least, we at Merck want to make a positive our business activities to create shared value that is both contribution, both above and beyond our daily business. measurable and makes a recognizable contribution to As a science and technology company, we are ideally posi- society. Therefore, as a company we support the United tioned to do so. In 2019, we presented the first edition of Nations Sustainable Development Goals, which include, for our Future Insight Prize for visionary research. Two Amer- example, “Good Health and Well-being” and “Quality Educa- ican scientists received a total of one million euros for their tion”. work in the fight against infectious diseases. The recent I firmly believe that this is a day and age in which we outbreak of the novel coronavirus has once again under- can find answers to many societal challenges, not least due scored the importance of pandemic prevention. to the rapid development of data processing, among other Together with the World Health Organization, we are things. At the same time, new research approaches also also fighting the insidious worm disease schistosomiasis, raise new questions – including ethical issues. For example, which claims around 200,000 lives every year. We have to find responsible ways to deal with difficult topics, we have already donated a total of more than one billion praziquantel been relying on the Merck Bioethics Advisory Panel for a tablets for the treatment of this disease. In addition, we decade now. are working on a new pediatric formulation of the active In 2019, this international expert committee focused ingredient for very young children and seeking new ways particularly on digital ethics. If we develop new business to diagnose and treat the disease. Our long-term goal is to models based on artificial intelligence and Big Data, we need eliminate schistosomiasis. And we are pressing ahead with clear guidelines, for example in handling patient data. As malaria prevention and the war against counterfeit medi- a result of these discussions, we have established a Digital cines. Apart from our efforts to help patients, we are also Ethics Board to address ethical issues related to data use advocating for the people taking care of them. As part of our and algorithms. worldwide “Embracing Carers” initiative, we want to raise This example also shows that we want to maximize the awareness for the often overlooked needs of people helping benefits of our work – and minimize the risks. The same family members requiring nursing care. applies with regard to environmental impact. In the next For me personally, it is highly motivating to be part of two years, for example, we will reduce by one-fifth the a team that makes all this and much more possible. I hope amount of polystyrene packaging used for products from you find this report both inspiring and informative. our Life Science business sector and increase the proportion of recyclable materials. We are currently working intens- ively to embed the various aspects of sustainability in the strategies of our business sectors. This includes a new climate target that we will set in 2020. Sincerely, Stefan Oschmann Chairman of the Executive Board and CEO 3 Merck Corporate Responsibility Report 2019 Strategy & Management Strategy & Management Within this chapter: 5 Company profile 8 CR strategy 10 Sustainable Development Goals 16 Stakeholder dialogue 19 Materiality analysis 4 Merck Corporate Responsibility Report 2019 Strategy & Management Company profile Part of the non-financial report We are Merck, a vibrant science and technology company. Science is at the heart of everything we do. It drives the discoveries we make and the technologies we create. We make a positive difference in the lives of millions of people every day. In Healthcare, we discover unique ways to treat some of the most challenging diseases such as multiple sclerosis (MS) and cancer. Our Life Science experts develop tools and solutions, which are aimed at enabling scientists achieve breakthroughs even faster. And in Performance Materials, we develop science that sits inside technologies and changes the way we access and display information. Everything we do is fueled by our belief in science and tech- and as EMD Performance Materials in the high-tech mater- nology as a force for good. A belief that has driven our ials business. work since 1668, and will continue to inspire us to find more Apart from our three business sectors, our reporting joyful and sustainable ways to live. We are curious minds presents the five regions: Europe, North America, Asia- dedicated to human progress. Pacific (APAC), Latin America as well as Middle East and Africa (MEA). As of December 31, 2019, we had We are Merck 57,071 employees worldwide, which compares with 51,749 We hold the global rights to the Merck name and brand. The on December 31, 2017. only exceptions are Canada and the United States. In these In 2019, our 222 subsidiaries with employees in 66 countries, we operate as EMD Serono in the biopharmaceut- countries generated sales of € 16.2 billion. Our 103 produc- ical business, as MilliporeSigma in the life science business, tion sites are located across 21 countries. Employees and sales by region – 2019 5 Merck Corporate Responsibility Report 2019 Strategy & Management Group structure ative solutions especially for the electronics industry — for Merck comprises three business sectors: Healthcare, Life microchips and displays — and for surfaces of every kind. Science, and Performance Materials. Our Healthcare busi- The business sector consists of three business units: Semi- ness sector – the biggest among our three business sectors conductor Solutions, Display Solutions, and Surface Solu- – comprises the two businesses Biopharma and Allergo- tions. Comparing Performance Materials with a smartphone, pharma. Display Solutions represents the user interface, Semicon- Our Biopharma business discovers, develops, manufac- ductor Solutions the intelligence, and Surface Solutions the tures and markets innovative pharmaceutical and biological aesthetics. prescription drugs to treat cancer, multiple sclerosis (MS), We are well on track in the execution of our five-year infertility, growth disorders, and certain cardiovascular and Bright Future transformation program announced in 2018, metabolic diseases. Biopharma is the larger of our Health- with which we are adapting to new market realities and care businesses and operates in four franchises:
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