We are dedicated to providing products and services to our customers that enable a healthier world while constantly improving our environmental footprint, social engagement and governance.
As part of this commitment, we aim to ensure transparency by reporting in line with the Global Reporting Initiative (GRI) Standards. They represent an industry standard for tracking performance on a range of economic, environmental and social indicators.
The 2021 Sustainability Report provides insights into our renewed commitments and performance on the most relevant sustainability topics for our stakeholders and us. The report reflects our focus as a dedicated partner to the pharma, biotech and nutrition industries, with the divestment of our former Specialty Ingredients business, which completed on 1 July 2021. This year, we reviewed the materiality assessment to reflect the themes and initiatives arising from our focus on the pharma, biotech and nutrition industries. This section provides a short overview of some of the most important material sustainability topics in our business today.
We strive to continually reduce emissions, energy, water and material intensity.
We ensure that legal compliance, integrity and ethical conduct are the foundations in every place we operate.
We continually improve our systems and aspire to ZERO incidents, injuries and environmental footprint.
We develop our employees by helping them grow.
We provide safe workplaces, care for employees’ well-being and foster their involvement and participation.
We create value for society by innovating and delivering science-based solutions to enable a healthier world. We engage in the communities where we operate.
As part of our sustainability reporting process, in 2021 we completed a new materiality assessment with our new focus as a pure-play pharma, biotech and nutrition business. The materiality assessment allowed us to prioritize initiatives and activities that best support sustainable development. A total of ten sustainability topics were identified as the most relevant for us globally, reflecting the impact of our operations, products and services across the value chain. The 2021 Sustainability Report provides more detail on each topic and outlines our management approach and performance results.
In addition to our material topics, we also recognize the importance of the UN Sustainable Development Goals (SDGs) and the responsibility of our businesses to meet these goals. The 17 goals contain a broad range of sustainable development themes, including improving health and education, reducing inequalities, promoting responsible consumption, combating climate change and protecting natural resources. There is a global ambition to achieve these interconnected goals by 2030 and we want to play our part in this collective endeavor.
We have selected the seven SDGs most critical to our business and our material topics to build a sustainable way of operating. We have analyzed where our business can bring the most value to these SDGs, so we can create robust sustainability initiatives. This supports us in developing a roadmap for the medium and long term while also considering our existing targets and achievements.
To reinforce our commitment, the seven SDGs are directly assigned to the Executive Committee (EC) members, who in turn have nominated a Program Manager to support them in developing relevant initiatives around each goal. A compensation plan and respective targets and metrics are aligned with the seven workstreams. Results are integrated into the company’s bonus plan, with the EC members collectively accountable.
We are focused on continuously improving our sustainability performance and environmental footprint. Using the results of 2018 as the baseline, we have defined targets from 2019 to 2030. The targets and baseline have been reassessed with the divestment of the former Specialty Ingredients segment and will be updated as shown below.
To keep these targets aligned with our continuous growth, we will measure the targets per CHF million in sales. This reflects our diverse and evolving product portfolio, which includes manufacturing pharmaceutical ingredients, pharmaceutical capsules, food supplements, gene therapy and cell media production and the licensing of technologies and systems. Such diversity can be integrated with a denominator of financial value. Using intensity targets also allows us to carry forward this metric in the case of major acquisitions or divestments.
Baseline 2018, Total Company (Per CHF 1 Million Sales)
2030 target is revised from -24% to -36%
In addition to the existing initiatives, we have set an ambition to source the electricity we purchase globally from renewable sources by 2025. We also increased the 2030 energy efficiency target to 36%, meaning a reduction of 3%, per million of sales per year.
Our safety targets are aligned with our Vision Zero initiative, which aspires to zero workplace injuries or illnesses, zero manufacturing process incidents, zero environmental incidents and zero transportation incidents involving our products or services. Since 2019, our safety targets have been set locally in our operating sites and linked to metrics based on the identification and completion of safety-related corrective actions. This has moved us from a lagging metric based on injuries (which can vary widely year on year), to a leading metric that drives employee behavior and involvement.
In addition, operating sites have set local targets for material topics for their locations (such as emissions, water quantity and other parameters). Sites have established and implemented three-year roadmaps, which include their action plans around global and local targets.
Safety and sustainability follow a systematic approach. We have policies in place, including Vision Zero, for the reduction of accidents, incidents and emissions. Across all our sites, we collect data for accidents and incidents, energy, water and waste and analyze deviations from established goals. Our Environment, Health and Safety (EHS) team regularly visits and audits our sites to identify compliance risks and procedures that do not meet our standards.
We also review the impact of site or workplace risks on our business performance and identify ways to mitigate these risks. In this context, we see safety and sustainability as opportunities that allow us to support our value creation for society, our customers and our employees while reducing our environmental footprint. During the COVID-19 pandemic, we implemented additional guidance and procedures to keep our employees safe and ensure continuity of operations.
At the end of the reporting year, approximately 170 people worked in EHS-related roles across Lonza. EHS operating costs amounted to CHF 59.1 million in 2021. Capital expenditure on EHS totaled CHF 35.5 million in 2021.
Note: data for 2018-2021 were rebased throughout this report to exclude data from the former Specialty Ingredients business sites. For the Visp (CH) site, which manages operations for both Lonza and Specialty Ingredients, data for Continuing Operations was extrapolated using allocation keys based on the usage intensity.
Baseline 2018 (Per CHF 1 Million Sales)