Assurance report CR

Limited Assurance Report of the Independent Auditor regarding Sustainability Information¹

To the Executive Board of Merck KGaA, Darmstadt

We have been engaged to perform an independent limited assurance engagement on the qualitative and quantitative disclosures on sustainability in the “Corporate Responsibility Report 2019” (further “Report”) of Merck KGaA, Darmstadt (further “Merck” or “Company”) for the fiscal year 2019 published at https://www.merckgroup.com/en/cr-report/2019.

It was not part of our engagement to review product or service related information, references to external information sources, expert opinions and future-related statements in the Report.

Management’s Responsibility for the Report

The legal representatives of Merck are responsible for the preparation of the Report in accordance with the Reporting Criteria. Merck applies the principles and standard disclosures of the Standards of the Global Reporting Initiative in combination with the Corporate Accounting and Reporting Standard (Scope 1 und 2), the Corporate Value Chain Standard (Scope 3) of the World Resources Institute/World Business Council for Sustainable Development (WBCSD) as Reporting Criteria (further “Reporting Criteria).

The responsibility includes the selection and application of appropriate methods to prepare the Report and the use of assumptions and estimates for individual qualitative and quantitative sustainability disclosures which are reasonable under the circumstances. Furthermore, this responsibility includes designing, implementing and maintaining systems and processes relevant for the preparation of the Report in a way that is free of – intended or unintended – material misstatements.

Independence and quality assurance on the part of the auditing firm

We are independent from the company in accordance with the requirements of independence and quality assurance set out in legal provisions and professional pronouncements and have fulfilled our additional professional obligations in accordance with these requirements.

Our audit firm applies the legal provisions and professional pronouncements for quality assurance, in particular the Professional Code for German Public Auditors and Chartered Accountants (in Germany) and the quality assurance standard of the German Institute of Public Auditors (Institut der Wirtschaftsprüfer, IDW) regarding quality assurance requirements in audit practice (IDW QS 1).

Practitioner’s Responsibility

Our responsibility is to express a conclusion on the report based on our work performed within the scope of our limited assurance engagement.

We conducted our work in accordance with the International Standard on Assurance Engagements (ISAE) 3000 (Revised): “Assurance Engagements other than Audits or Reviews of Historical Financial Information” and the International Standard on Assurance Engagements (ISAE) 3410: “Assurance Engagements on Greenhouse Gas Statements” of the International Auditing and Assurance Standards Board (IAASB). These standards require us to plan and perform the assurance engagement to allow us to conclude with limited assurance that no matters have come to our attention that cause us to believe that the Report was not prepared, in all material respects, in accordance with the Reporting Criteria. We do not, however, issue a separate conclusion for each disclosure. In a limited assurance engagement the evidence gathering procedures are more limited than in a reasonable assurance engagement and therefore less assurance is obtained than in a reasonable assurance engagement. The choice of audit activities is subject to the auditor’s own judgement.

¹ Translation of the independent assurance report, authoritative in German language.

Within the scope of our engagement, we performed amongst others the following procedures:

• Inquiries of personnel on Group level responsible for the materiality analysis, in order to gain an understanding of the processes for determining material sustainability topics and respective reporting boundaries of Merck.
• A risk analysis, including a media search, to identify relevant sustainability aspects for Merck in the reporting period.
• Evaluation of the design and implementation of the systems and processes for the collection, processing and control of the sustainability disclosures included in the scope of this engagement, including the consolidation of the data, at corporate and site level.
• Interviews with relevant staff on corporate level responsible for providing and consolidating the data and information, as well as carrying out internal control procedures on the data and information, including the explanatory notes.
• Assessment of local data collection and reporting processes and reliability of reported data via a sampling survey at the sites in Calais (France) and Darmstadt
• Evaluation of selected internal and external documents.
• Analytical evaluation of data and trends of quantitative disclosures which are reported by all sites on group level.
• Use of the insights and relevant work performed for the group and statutory audit of the (consolidated) financial statements for the year ended December 31, 2019 of Merck KGaA with regard to audit procedures on those information and indicators that were derived from those consolidated financial statements.
• Reviewing the consistency of GRI Standards in accordance option “Comprehensive” as declared by Merck with sustainability information in the Report
• An evaluation of the overall presentation of the information, including the explanatory notes, within the scope of our engagement.

As described in the Report, Merck engaged external providers to perform assessments and audits. The adequacy and accuracy of the conclusions from these external assessments were not part of our limited assurance engagement.

Conclusion

Based on our limited assurance engagement, nothing has come to our attention that causes us to believe that the qualitative and quantitative disclosures on sustainability for the business year 2019 included in the scope of this engagement and published in the Report are in all material respects not prepared in accordance with the Reporting Criteria.

Restriction of use/Clause on General Engagement Terms

This assurance report is issued for purposes of the Executive Board of Merck KGaA, Darmstadt, only. We assume no responsibility with regard to any third parties.

Our assignment for the Executive Board of Merck KGaA, Darmstadt, and professional liability is governed by the General Engagement Terms for Wirtschaftsprüfer and Wirtschafts­prüfungsgesellschaften (Allgemeine Auftragsbedingungen für Wirtschaftsprüfer und Wirtschaftsprüfungsgesellschaften) in the version dated January 1, 2017 (https://www.kpmg.de/bescheinigungen/lib/aab_english.pdf). By reading and using the information contained in this assurance report, each recipient confirms notice of provisions of the General Engagement Terms (including the limitation of our liability for negligence to EUR 4 million as stipulated in No. 9) and accepts the validity of the General Engagement Terms with respect to us.

Frankfurt am Main, March 20, 2020
 
KPMG AG
Wirtschaftsprüfungsgesellschaft

[Original German version signed by:]
 

¹ Translation of the independent assurance report, authoritative in German language.