Company Name: Merck Holding （China）Co. Ltd.
Award Category: ESG Performance
Company Size: Large Business Group
Merck is a vibrant science and technology company with a legacy of 355 years and has always been committed to advancing the human progress on the basis of sustainability. We believe that with technological and scientific evolvement, not only can we integrate principles of sustainability to create a better environment for those who work for and work with our company, but also to preserve a better environment in nature as well. Ultimately, we envision both manifesting greater sustainable development and generating lasting permanence for years to come.
Our journey in China began in 1933 when E. Merck Chemical Co., Ltd. was founded in Shanghai—Merck’s first subsidiary in China. Looking back at the last 90 years, although Merck’s role in China has evolved significantly, its initial objective to make a positive impact on the lives of Chinese people remains unchanged.
Sustainability is a key component of the Merck Group strategy. As a sustainable company, we create long-term value through our core business practices while seeking to balance environmental, social and governance aspects –for us, for our stakeholders and for society at large. By 2030, we aim to have integrated sustainability into all value chains and contributed to human progress for more than one billion people through sustainable science and technology. And by 2040, we expect to achieve climate-neutral operations.
Environment
Climate Change:
(1) Target: Merck commits to :
By 2030, lower GHG emissions (Scope 1+Scope 2) by 50% compared with 2020;
By 2030, we aim to source 80% of purchased electricity from renewable sources;
By 2040, we will achieve climate neutrality.
(2) Key Performance:
We are making the transition to renewable energy through the purchase of green electricity. In 2022, the total purchase of green electricity reached 22403.6 MWh, achieving 13,550 tons of carbon emissions reduction.
We did a series of technical upgrading to save energy and reduce emissions, achieving a CO2 emission reduction of 1,276 tons. In 2022, compared with 2021, carbon emissions are reduced by 25,284.5 tons, a decrease of 51%.
(3) Employee enablement to think and act sustainably:
In Merck China, we actively advocate for a greener workplace and have promoted better sustainability awareness ‘Think and Act Sustainably’ among our employees.
Merck China launched a long-term ‘Green Challenge’ to promote environmental protection,
Natural Resources and Energy:
(1) Water management: Merck commits to:
By 2025, lower Merck Water Intensity Score by 10% compared to 2020;
By 2030, reduce potentially harmful residues in wastewater below the no-effect threshold.
(2) Key Performance:
The total water consumption in 2022 will be 226,000 m3, which is 24% less than in 2021. Total energy consumption is 72,840 MWh, a 24% savings compared to 2021. The usage of renewable energy is 22,403.6 MWh, achieving a renewable energy utilization ratio of 31%.
We did a series of technical upgrading (upgraded magnetic chillers, upgraded high-efficiency fans, upgraded heat pumps, upgraded high-efficiency water pumps) to save water of 8,800 tons. The Steam Condensate Water Reuse Project at Healthcare Nantong Manufacturing Site saved 7,200 m3 of water a year. We also use Power Platform to monitor the consumption of electricity, steam and water on a daily, weekly and monthly basis to find opportunities to improve energy efficiency anytime anywhere.
(3) Employee enablement to think and act sustainably: Since 2021, Merck China has practiced the concept of sustainable development and launched green office initiatives. Initiatives include gradually replacing printing paper with FSC-certified ones; Providing shared stationery and recycling bins for used paper; LED lights upgrades and replacing disposable paper cups with mugs to reduce the consumption of disposables. Merck China Healthcare promoted paperless reimbursement with digital solutions, resulting in a minimum savings of 400,000 sheets/year.
Prevention of Pollution:
(1) Target：Merck commits to lower Merck Waste Score by 5% by 2025 (compared to 2016 baseline)
(2) Waste reduction：
In 2022, our Healthcare business sector launched a sustainable packaging initiative called MPact, Plastic inserts are replaced by recyclable paper materials to reduce plastic pollution, which can reduce plastic waste by 180 tons per year.
Green solvents for sustainable development：Merck's "AZ® Remover 910" is based on a new, special chemical formulation that does not contain NMP (N-methyl pyrrolidone), which is extremely economical, environmentally friendly and widely applicable. This AZ® Remover 910 removes photoresist in less than three times the amount of solvent, saving costs and reducing the environmental impact of scrap.
The hazardous waste disposal method was changed from direct incineration to thermal energy recovery, with a total of 26.8 tons, reducing 395Kg of waste glass instruments.
(3) Waste reuse：At Healthcare Nantong Manufacturing Site, we reused corrugated boxes which helped save 42 tons of waste boxes in 2022. In addition, we recycled cardboard, cartons, and leaflets from waste trial run products to recycle a total of 38,913.5 kg of waste in 2022 and ultimately saving 15,000 euros.
Other Actions Taken for Environmental Protection:
We are committed to continuously improving and integrating sustainability and our circular economy criteria within our R&D processes to improve our sustainability performance in our product portfolio.
As part of our commitment to reduce our environmental impact, we have collaborated with internal and external stakeholders to establish the SMASH Packaging Framework, which significantly drove sustainability improvements in our packaging in 2022. We identified three cornerstones with the greatest opportunities for improvement – Optimize Resources, More Sustainable Materials and Design for Circular Economy - and set overarching targets to quantify, track, and maximize our impacts.
In 2022, our Healthcare business sector launched a sustainable packaging initiative called MPact, which is based on the SMASH Packaging Framework to ensure that we deliver products safely and reliably to our customers while reducing the environmental impact of our packaging. For example, the outer packaging sizes of the Gonal-f® and Ovidrel® prefilled injection pens were reduced by 40%, and a Slim Pack truck can save 55% more space per shipment. Transportation efficiency is subsequently improved, resulting in a 33% reduction in CO2 emissions. Plastic inserts are replaced by recyclable paper materials to reduce plastic pollution, which can reduce plastic waste by 180 tons per year. The new package is saving up to 226,000 square meters of plastics, equals to 1.5 times the construction area of the Forbidden City.
Social
HR Development and Engagement:
At Merck, we are committed to building a diverse,equitable and inclusive corporate culture which entails a well-rounded staff development program, ample employee benefits, and a guaranteed safe workplace. This helps us attract global talents where we can then support them to reach their full potential which in return helps us grow our business.
Merck China has always been committed to empowering employee development, providing employees with the support they need for career advancement, and building a world-class learning platform by introducing innovative hybrid learning and development solutions (“70-20-10” approach).
We provide employees with a set of valuable benefits and flexibility of choice. We offer our employees a range of insurance packages, an ongoing Employee Assistance Program (EAP), a flexible working policy, and a wide range of cultural and sporting activities.
We have a well-established Environment, Health and Safety (EHS) system in China that systematically identifies and assesses all relevant risks. Effective control is imposed to ensure the health and safety of employees.
Diversity, Equity and Inclusion:
Merck sets commitments and quantifiable targets at the highest level and translates commitments at the global level into actions that meet local needs. Merck has three priorities on diversity, equity and inclusion (DE&I): inclusion, gender equity, culture and ethnicity. In each focus area, progress is tracked in quantifiable components. Merck China has a total of 4,851 employees, of which 52% are female employees, 47% are female managers, and the inclusion index score is 89%.
Employee Resource Groups (ERGs) play an important role to raise awareness and engage employees at local level. With consideration to the demographics and cultural backgrounds in China, we have taken a series of measures to promote diversity, equity and inclusion in the country, for example: clarify the definition of DE&I; Encourage dialogue, not jump to conclusions; Provide cross-departmental, cross-function and cross-cultural internal and external communication opportunities.
Product Liability:
Chemical safety: Product safety is one of our top priorities. In order to reduce the potential risks caused by chemical products to human health and the environment, we strictly comply with local chemical safety laws and regulations in China and Merck’s global chemical safety policies and procedures. We also improve the safety of our products through innovative technological methods and digitalization.
Patient Safety: To ensure the safety of patients treated with our medicines, our pharmaceutical products must be effective in treating the respective disease while posing the lowest possible risk to patients. Merck always scrutinizes the safety of patients throughout the life cycle from clinical trials to post-sale drug use.
Supply Chain:
To achieve one of Merck’s sustainability goals “Create a sustainable value chain”, we focus on continuously building a sustainable and transparent supply chain.
We demand suppliers to adhere to our Code of Business Ethics and compliance standards and apply them in their own supply chain management.
The Chinese version of our Supplier Code of Conduct puts forth seven management principles and methods for the value chain: Ethics and General Business Integrity, Business Integrity in the Pharmaceutical Industry, Environmental Protection, Human Rights and Labor Rights, Occupational Health and Safety, Safety and Protection of Assets, Continuous Improvement, and Management System.
As one of the core members of TfS, Merck uses EcoVadis to evaluate and monitor its suppliers. In 2022, 149 of our suppliers in China were evaluated by EcoVadis.
Community Engagement:
Merck China cares about the public well-being and is committed to promoting social equity. We raise public health awareness through a variety of public advocacy campaigns, provide assistance for some patients in need, and extensively collaborate with research institutions to carry out cutting-edge scientific research.
Merck China provides health advocacy and assistance services in various fields such as reproductive health, thyroid health, diabetes, and oncology. In the field of reproductive health, Merck China has partnered with the China Women’s Development Foundation to launch several health advocacy projects. For instance, Family Fertility Care program provided more than 230 applicants with Gonal-f® drug assistance, covering more than 20 partner hospitals.
At present, the rural-urban inequality still exists in China. Merck China pays special attention to China’s rural development by investing resources and expertise to support underprivileged rural areas. Better access to basic public services in major areas such as healthcare and education was also established, subsequently bridging the gap between urban and rural development overtime.
By the end of 2022, Merck China donated a total of 7 million RMB since partnering with the One Foundation Clean Water Program in 2018. The program has provided clean drinking water to about 80,000 students in 174 rural schools across the country and installed 183 water purification equipment.
Merck China also launched the “Green Crystal” Digital Classroom Project , which donates high-quality second-hand electronic devices, organizes online lectures and offline volunteer activities, supports teacher training and carries out activities on tablets to support digital education in remote areas. By the end of 2022, the project had been launched in 19 schools. In total this project donated 340 tablets and empowered 10,000+ students and 300+ teachers.
Corporate Governance
Governance Organizational and Mechanism:
At Merck, compliance is the foundation of corporate governance, and integrity is the lifeblood of corporate brand reputation. Integrity and compliance are rooted in the DNA of our enterprise, which is the cornerstone to ensure brand competitiveness, and the source of innovation for sustainable development of enterprises.
The Compliance Department has eight responsibilities: Risk Assessment, Policies & Procedures, Compliance Committee, Training & Compliance Culture, Compliance Programs & Systems, Oversight & Reporting, Case Management, and Continuous Improvement.
Merck China actively conducts online and offline compliance training and activities through a variety of channels.
Innovation Sustainability:
As a vibrant science & technology company where innovation is our core competency, Merck has always been committed to creating solutions that positively impact people and the environment. In China, we uphold the concept and approach of sustainable innovation, and the sustainable innovation that we envision or drive forward must align with and support the three goals of Merck sustainability strategy.
We are committed to continuously improving and integrating sustainability and our circular economy criteria within our R&D processes to improve our sustainability performance in our product portfolio. In the field of electronics and technology, we implement packaging assessment processes that prioritize new green and innovative materials, ensuring a continuous supply of innovative sustainable products.
In the life sciences sector, we establish the SMASH packaging program to drive significant sustainability improvements in packaging. This is achieved through the use of innovative tools such as DOZN™ 2.0 for quantitative green chemistry assessment and the Design for Sustainability (DfS) approach to minimize the environmental impact throughout the entire product lifecycle.
In the field of pharmaceuticals and healthcare, we are driving the implementation of the MPact Sustainable Packaging Program. This ensures that we can deliver our products to our customers safely and reliably while also reducing the environmental impact of our packaging.
