Our purpose to enable a healthier world shapes not only the products and services that we deliver for our customers, but also our approach to doing business. Across our global network, we remain committed to improving our social engagement and governance activity while reducing our environmental footprint.
The Global Reporting Initiative (GRI) Standards are critical in ensuring transparent reporting against sustainability commitments. We track our performance against this recognized industry benchmark, across a range of economic, environmental and social indicators.
This section of our Annual Report provides a short overview of the most important sustainability topics in our business today. It is supported in greater detail by the 2022 Sustainability Report, which offers deeper levels of information and insight into our sustainability commitments and latest performance indicators.
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.
In 2021, we completed a materiality assessment to support our business as it completed its transformation into a pure play partner to the pharma, biotech and nutrition industries. This assessment enabled us to prioritize the initiatives and activities that best support sustainable development in the healthcare context. It laid the groundwork for establishing a clear sustainability focus in 2022 – the first full year in which our business has been fully dedicated to serving the healthcare industry. 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.
We also support the UN Sustainable Development Goals (SDGs). These goals span health, education, inequalities, responsible consumption, climate change and natural resources. We have prioritized seven SDGs which are most relevant to our own operations. These goals are embedded within our sustainability roadmap and provide a focus for our targets and achievements.
To raise awareness and drive engagement with these important metrics, each of the seven SDGs has been directly assigned to an Executive Committee (EC) member. They are each supported by a Program Manager to develop initiatives and oversee implementation across the business.
As of 2022, these SDGs and related performance metrics are built into our global compensation framework, to capture sustainability as a key measure of both business success and personal development.
To enable continual progress on our safety and sustainability performance, we have established a clear set of incremental targets between 2019 and 2030. These intensity targets include a 36% reduction for energy and greenhouse gas emissions and 24% reduction for waste. Our 2018 performance establishes a baseline, and targets were reassessed and updated to reflect the new focus of our business after the divestment of the former Specialty Ingredients segment in 2021.
Each sustainability target is measured per CHF million in sales to align with our growth trajectory. This measure takes into account our diverse and evolving product portfolio, which includes manufacturing pharmaceutical ingredients and capsules, health ingredients, gene therapy and cell media production, alongside the licensing of technologies and systems. Using a denominator of financial value ensures that our diverse portfolio can be consistently measured and allows us to carry forward this metric in the case of business growth, major acquisitions or divestments.
Baseline 2018, Total Company (Per CHF 1 Million Sales)
In 2022, we recorded a considerable reduction in the intensity numbers, which is related to significant growth without proportionate footprint increases, supported by additional efficiency gains. These intensity reductions also reflect the shift in our business model to become a strategic partner to the healthcare industry. As we have already reached the majority of our initial 2030 intensity targets, we are resetting our targets to a more ambitious level. We are now aiming to achieve 50% reductions in intensity by 2030, compared to the 2018 baseline.
Alongside these initiatives, we continue to work towards our global goal of procuring and sourcing all our electricity from renewable sources by 2025, where available.
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.
At Lonza, we follow our Vision Zero initiative, which aspires to zero workplace injuries and illnesses, manufacturing process incidents and environmental incidents. Safety targets are set locally by sites and are aligned with Vision Zero. Our framework measures both the identification and completion of safety-related corrective actions, rather than measuring injuries alone (which can vary widely from year to year). This leading metric drives engagement, understanding and behavior change within our global workforce.
Safety and sustainability are both commercial and ethical imperatives. They provide opportunities to drive value for society, our customers, our employees and the environment. To ensure we maximize these opportunities, we take a systematic and data-driven approach to delivering on our targets.
At every site, we collect data on accidents and incidents, energy, water and waste, and analyze deviations from established goals. Our sites are regularly visited by our Environment, Health and Safety (EHS) team. The EHS team audits our sites to identify compliance risks and procedures to ensure that we can take appropriate corrective measures. We also regularly review site and workplace risks and identify ways to mitigate any impact on our wider business performance.
Group General Counsel
Sustainability is one of our five core strategic priorities. It secures our freedom to operate, boosts investor confidence and supports talent attraction and retention. For these reasons, it sits at the heart of our approach to delivering long term value at an economic, environmental and social level.
In 2022, we made good progress on our ESG commitments. We reduced greenhouse gas, energy and waste intensity, progressed our initiative to transition to 100% renewable electricity, and undertook major water stewardship projects. At the same time, we defined sustainable design standards for our growth projects, and engaged with our suppliers to reduce Scope 3 emissions across the value chain.
We understand that our people are key to driving progress on sustainability. Starting in 2022, we increased engagement across the organization. ESG now accounts for 25% of the business performance component in our employee bonus calculations.
There is a lot more to do in this area and our aspirations are ambitious. In 2023 and beyond, we aim to further reduce greenhouse gas emissions as well as water and energy intensity. We will also continue to work with our suppliers and our customers to improve ESG along the value chain. At the same time, as a science-led company we are currently examining how we can refine our approach to target setting.
By ensuring that sustainability remains a long-term strategic priority, we will continue to enable a healthier world for people and planet alike.