Numerous global challenges such as climate change, resource scarcity and unequal access to health in various countries are also decisive for our company. In order to address them, we continuously seek solutions made possible by science and technology. At the same time, we are working to make our business models more resilient.
Our approach: sustainable progress
Our ambition is to leverage science and technology to achieve progress for mankind. For us, sustainable entrepreneurship and profitable growth go hand in hand; we can remain competitive only by creating added value for society. Through our innovative and high-quality products, we want to help meet global challenges. At the same time, our products secure our financial performance capability.
Responsible action is an integral part of our company culture. This also includes respecting the interests of our employees, customers and investors, as well as society. For more than 350 years, our company has been shaped and guided by strong values. Our success is built on courage, achievement, responsibility, respect, integrity, and transparency – values that underpin our understanding of sustainable entrepreneurship.
Safety and ethics matter just as much to us as business success. We mitigate ethical, economic and social risks as far as possible. During the manufacture of our products, we aim to keep our impact on the environment as low as possible, which is why safe production techniques, high environmental standards and strict quality management are of course so important to us. Furthermore, we aim to strengthen our company by recruiting, developing and motivating talented employees. We want to set an example for ethical conduct.
We closely monitor new global trends and challenges. For example, in order to clearly understand the complex nature of the expected changes, we make use of the so-called scenario technique, which enables us to identify and incorporate aspects of strategic relevance. We also participate in dialogues and initiatives, consult with other organizations in our industry and assess media and news coverage. This allows us to minimize risks while also leveraging new business opportunities.
Implementing the strategy globally
The rapidly growing challenges facing society and the environment require a clear objective for the coming years. That is why we have integrated sustainability into our enterprise strategy as an essential component and have set ourselves three strategic sustainability goals.
Our sustainability strategy
In order to achieve our sustainability goals, we have defined seven focus areas. Within these focus areas we are currently implementing numerous initiatives and projects and are measuring our progress.
Measuring progress made with the sustainability strategy
In 2021, we defined various key indicators in order to record and measure progress made through our three sustainability goals.
As of 2022, we will be adding a sustainability factor to the Merck Long-Term Incentive Plan (LTIP). The 2021 Annual General Meeting approved a revised compensation system for the members of the Executive Board. For the sustainability factor, the company uses the three key indicators marked in the table. Details on how this sustainability factor is calculated can be found in the Compensation Report.
Our key indicators
Goal 1: In 2030, we will achieve human progress for more than one billion people through sustainable science and technology.
Focus area |
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Sustainability key indicators |
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Further details |
Sustainability innovation and technology |
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◆ Percentage of newly published patent families with positive sustainability impact |
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Health and wellbeing impact |
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◆ People treated with our Healthcare products1 |
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Goal 2: By 2030, we will integrate sustainability into all our value chains.
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Sustainability key indicators |
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Further details |
Sustainability culture and values |
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◆ Percentage of women in leadership positions |
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◆ Percentage of employees trained on sustainability |
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Reporting as of 2022 |
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Sustainable and transparent supply chain |
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◆ Percentage of relevant suppliers (in terms of number and purchase volume) that are covered by a valid sustainability assessment1 |
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Securing our social license to operate in all regions |
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◆ Environment, Health and Safety (EHS) Incident Rate |
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◆ Incidents related to Global Social and Labor Standards Policy" |
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◆ Lost Time Injury Rate (LTIR) |
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Goal 3: By 2040, we will achieve climate neutrality and reduce our resource consumption.
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Sustainability key indicators |
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Further details |
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Climate change and emissions |
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◆ Greenhouse gas emissions (Scope 1+2)1 |
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◆ Indirect greenhouse gas emissions (Scope 3) |
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◆ Percentage of purchased electricity from renewable sources |
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Water and resource intensity |
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◆ Waste Score |
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◆ Water Intensity Score |
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◆ Water quality |
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Reporting as of 2022 |
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In order to assess the sustainability of our products, technologies and business activities, we developed the Sustainable Business Value (SBV) method. It enables us to evaluate the positive and negative impacts of our activities on society along our entire value chain. This gives rise to a monetary value that quantifies the societal benefits a product offers, for instance. In addition to ESG (Environmental, Social, Governance) parameters, SBV also incorporates economic and ethical aspects as well as digitalization and the benefits of the product itself. The data help us drive sustainability across our business operations and position ourselves for future success. At the end of 2021, we launched a computer app that enables us to further embed this Sustainability Impact Valuation method in the company. This provides employees with a structured process that they can use to assess the sustainable contribution to value made by their product or project.
Our operational sustainability goals
Our three strategic goals make our long-term sustainability ambition clear. In order to achieve them, we have also defined operational sustainability goals. These are more specific, may apply for a shorter time frame and are aligned with our current business activities.
Roles and responsibilities
Our Executive Board has Group-wide responsibility for our sustainability strategy. It has adopted our three strategic goals (see above).
The Group Corporate Sustainability unit is responsible for developing and shaping the sustainability strategy and regularly informs the Executive Board about the progress made and the need for action. It is part of the newly created Group function “Corporate Sustainability, Quality and Trade Compliance”, which reports to the Chair of the Executive Board. Consequently, overarching Executive Board responsibility for Environment, Social, Governance (ESG) also lies with the Chair of the Executive Board.
Group Corporate Sustainability is also responsible for the Corporate Sustainability Council. The committee consists of representatives from our business sectors and from key Group functions, such as Procurement, HR and Strategy. Council members from various countries provide input on regional sustainability aspects. The Corporate Sustainability Council steers and monitors the Group-wide implementation of the sustainability strategy. It aligns the strategy with the individual business strategies, defines priorities, specifies globally applicable sustainable guidelines, and recommends corresponding initiatives to the Executive Board. With their respective area of responsibility, each Executive Board member is also responsible for sustainability.
Moreover, the Corporate Sustainability Council ensures that the initiatives of our various business sectors, Group functions and subsidiaries align with our Group-wide sustainability strategy. In 2021, the Corporate Sustainability Council met four times by video conference. The participants addressed the following topics: Implementing the sustainability strategy in the business sectors, key indicators for measuring and steering sustainability within the company, lowering greenhouse gas emissions, and developing reporting requirements.
The measures adopted by the Corporate Sustainability Council are implemented by our line managers as well as by interdisciplinary project teams. To achieve our operational sustainability goals and depending on the topic, responsibility is assigned to specific teams, functions and business units. Those responsible for implementation exchange ideas and coordinate actions in an overarching committee. They identify synergies between the projects and tailor their direction to our sustainability goals.
In November 2021, we established an external expert committee for sustainability issues. The Merck Sustainability Advisory Panel (MSAP) consists of six independent international experts on sustainability-related topics. They advise the company on selected issues and assess related sustainability aspects as well as the company’s planned activities. Moreover, they apply their knowledge to help address societal and political challenges and developments that could have strategic relevance for our businesses. This panel is chaired by the Head of Group Corporate Sustainability.