Sustainability strategy & goals

Good Health and Well-being

Gender Equality

Decent Work and Economic Growth

Industry, Innovation and Infrastructure

Responsible Consumption and Production

Climate Action

Partnerships for the Goals

The world is facing numerous challenges that also affect us as a company. These include climate change, international conflicts and economic crises, for instance. Our ambition is to leverage science and technology to achieve sustainable progress for mankind.

Our approach: sustainable progress

In our view, 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, these types of product 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, investors, and society. For more than 350 years, our company has been shaped and guided by strong values that underpin our understanding of sustainable entrepreneurship. Our success is based on courage, achievement, responsibility, respect, integrity, and transparency.

Safety and ethics matter just as much to us as business success. We mitigate ethical, economic, environmental, and social risks as far as possible. From the early stages of development through to disposal, we keep an eye on the entire life cycle of a product. We apply strict sustainability standards to our procurement activities. During product manufacture, it is important to us to keep the environmental impact as low as possible, which is why safe production, high environmental standards and strict quality management are of course so important to us. By supplying products that meet extensive sustainability criteria, we also help other companies to achieve their sustainability goals. 

We closely monitor new global trends and challenges and we use scenario analyses, among other things, in order to clearly understand the complex nature of potential impacts. In addition, we participate in dialogues and initiatives, consult with other organizations in our industry and assess media and news coverage. This enables us to minimize risks while also leveraging new business opportunities.

Implementing the strategy globally

The rapidly growing challenges facing both society and the environment require a clear objective for the coming years. Consequently, sustainability is an essential element of our enterprise strategy. We are pursuing three strategic sustainability goals.

Our sustainability strategy

Overall, our sustainability strategy is centered on seven focus areas within which we are realizing numerous initiatives and projects today and tomorrow, measuring our progress as we go.

In 2023, we revised our sustainability strategy, which we had communicated in 2020. In particular, we sharpened the second goal: Under the new heading “Partnering for sustainable business impact”, we want to strengthen our focus on the social aspects in our value chains and embed sustainability more comprehensively into our decision-making processes. Therefore, in addition to the existing focus area “Sustainable and transparent supply chain”, we are now also working on the new focus areas “Embedding sustainability into our ways of working and decision-making” and “Our people and communities; providing a diverse and inclusive environment”.

For the third goal, “Reducing our ecological footprint”, we modified two of our key indicators for waste and water. The two new indicators valid as of 2024 use more common metrics and also include circular economy criteria. More information on this can be found under Waste & Recycling as well as Water Management.

In addition, we added two new focus SDGs: Under the second goal, SDG 5 (Gender equality) to reflect our efforts in the area of diversity, equal opportunities and inclusion. We added SDG 13 (Climate action) under the third goal to reflect our commitment to climate action.

Implementing the sustainability strategy

While we revised our sustainability strategy in 2023, we also forged ahead with its implementation. We want to change our company culture in the long term by embedding sustainability aspects even more deeply in our employees’ day-to-day work and decisions. Training courses and best-practice sharing within networks are two routes we follow to achieve this. Moreover, we are integrating the topic of sustainability into the innovation process and all parts of the value chain. Another one of our aims is to decouple the growth of our businesses from negative environmental impacts.

We use 14 key indicators to record and assess our progress towards achieving our sustainability goals. We defined these indicators back in 2021 and did not identify any significant non-financial performance indicators. The key indicator “Percentage of employees trained in sustainability” was dropped in 2023 because we had achieved the associated target. Instead, as of 2023, we began using several questions in our annual Employee Engagement Survey to measure how mature the sustainability culture is within our organization. More information on this can be found under Corporate culture.

We also take sustainability aspects into account when evaluating potential acquisitions, as well as when allocating operating capital, deciding on capital expenditure and in research and development.

Moreover, our annual Long-Term Incentive Plan (LTIP) for Executive Board members and senior executives contains a sustainability factor. We use it to measure performance over a period of three years based on selected key indicators for each of our three sustainability goals. Consequently, target achievement based on the key financial performance indicators can increase or decrease by up to 20%. Details on how this sustainability factor is calculated can be found in the Compensation Report, which is subject to a special content review by Deloitte GmbH Wirtschaftsprüfungsgesellschaft in addition to a formal audit. In 2023 and for the first time, the company tied 15% of variable employee compensation to sustainability parameters. Details on this can be found under Sustainable innovation & technology.

Our key indicators

In order to assess the impacts of our products, technologies and business activities on the environment and society, we developed the Sustainable Business Value (SBV) method. It enables us to calculate the positive and negative impacts of our activities along our entire value chain, based on various sustainability criteria. The result is a monetary value that quantifies the benefit that a product has for consumers, the environment and society, for instance. In 2023, we revised the calculation method for environmental aspects and aligned them more closely with our strategic key indicators.

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.

Goal 1: In 2030, we will achieve human progress for more than one billion people through sustainable science and technology.

Material topic		Operational target		Actions 2023		Status
Access to Health		By 2030, we will provide sufficient praziquantel tablets to treat more than 90 million patients per year.		Provided over 210 million tablets in 2023, enabling the treatment of around 84 million patients.
Access to Health		By 2024, there will be the start of the launch phase to make arpraziquantel dispersible tablets available in the first African countries. By 2030, arpraziquantel will be available to reach up to 12 million preschool-aged children.		Arpraziquantel received a positive scientific opinion from the Committee for Medicinal Products for Human Use (CHMP) - part of the European Medicines Agency (EMA) - in December 2023. This outcome facilitates arpraziquantel’s inclusion into the WHO’s list of prequalified and essential medicinal products. It will also help to support more direct access to medicines in schistosomiasis-endemic countries.
Prices of Medicines		In 2023 we served more than 57 million patients in low- and middle-income countries with our healthcare portfolio. Boosted by our low- and middle-income countries access program called “SHAPE”, we aim to reach 80 million patients in those countries per year by 2030.		15 pilots have been initiated, including Argentina, Brazil, Egypt, Indonesia, Mexico and several Central American countries.
Patient Safety		By 2025, we will actively deliver product specific safety and benefit-risk strategies to support the execution of all key priority programs in line with internal and external stakeholders’ expectations.		Provided high-level safety and benefit-risk contributions to key priority programs in oncology, neurology and immunology. Supported new partnering and in-licensing opportunities with medical safety strategies and outputs. Ensured professional safety contract management with our partners. Integrated Global Patient Safety’s tasks and interactions during early development. Actions included the scope extension of the Benefit-Risk Action Team to early development phases, and respective enhancement of the Benefit-Risk Strategy Document to enable early, evidence-based safety decisions.
Circular Economy, Waste & Recycling		By 2030, 10% of our portfolio will be Greener Alternative Products.		We added 637 Greener Alternative Products to our portfolio. Our free green chemistry tool DOZN™ had over 2,000 users in 78 countries in 2023, helping scientists worldwide make sustainability improvements in their processes and products.

Goal 2: By 2030, we will fully integrate sustainability into our value chains.

Material topic		Operational target		Actions 2023		Status
Compliance Management		By end of 2023, all subsidiaries of our company will have a new Third Party Risk Management process and tool. By conducting due diligence on all high risk third parties, we check the legal compliance of our business partners.		We started implementing a new workflow-based process for third-party risk management. In addition to the existing high-risk categories, we introduced new general categories to strengthen our due diligence and legal compliance in all countries.
Interactions with Health Systems and Responsible Marketing		By 2024, we will roll out a risk identification process in a staggered approach to get a better risk overview on bribery and corruption related risks.		We implemented a new tool governing our interactions with healthcare stakeholders.
Sustainable Supply Chain		By 2024, we will increase transparency of our supply chain by the following two sub-targets: 1) 70% of our relevant number of suppliers will be covered by a valid sustainability assessment 2) 90% of relevant supplier spend will be covered by a valid sustainability assessment. Each of these two sub-targets are weighted 50%.		In 2023, we worked with our relevant suppliers on new assessments and re-assessments, based on the TfS/EcoVadis Assessment process. As a result, 1) 66% of our relevant number of suppliers were covered by a valid sustainability assessment; 2) 94% of our relevant supplier spend were covered by a valid sustainability assessment.
Animal Welfare		By 2030, we will make a substantial impact on the 4R (reduction, replacement, refinement and responsibility) and make our success visible by meaningful performance indicators implemented in our three business sectors.		Key indicators: Our Life Science and Healthcare business sectors have developed 4R strategies; corresponding key indicators exist and are regularly tracked. In 2023, the Group Animal Welfare Council approved our approach of preparing a roadmap with the aim of eliminating animal research. We published this approach on our website. Professional training and continuing education: We implemented our training concept in 2023. It specifies professional continuing education for all roles across the Group that deal with in-vivo processes. It includes the Animal Affairs Academy as well as the Vivarium Rotation Program. Our Animal Affairs Academy offers numerous internal and external training courses. It also includes an internal website and a newsletter to inform employees about these courses. Additional companies have become signatories to the Marseilles Declaration, a voluntary self-commitment by companies with commercial animal husbandry activities to standards extending beyond local legislation.
Animal Welfare		By 2025, we will have all our animal facilities AAALAC accredited and will have established an Animal Affairs Academy which provides knowledge in Animal Science and Welfare and drives progress towards our 4R ambitions.		In 2023, the final two still outstanding Group sites received accreditation. Re-accreditation of our sites takes place every three years. In 2023, we rolled out a global 4R training that teaches all employees how they can help to reduce the use of animals and support the transformation towards animal-free value chains. We strengthened refinement through our alignment in 2023 to make “non-aversive handling of research animals“ mandatory for all our animal husbandry facilities. In 2023, the Animal Affairs Academy held more than 60 training courses and workshops on the topic of animal research.
Animal Welfare		By 2024, we will roll out the process and tool to further streamline the centralized governance for the interactions with healthcare stakeholders and to further increase monitoring as well as risk control capabilities.		IT-based solutions: We digitized animal welfare-relevant processes, e.g. the approval process for internal work with animals, risk management as well as a reporting system for animal welfare-related incidents. Transparency: We have set up an internal webinar series called “Let’s talk Animal Affairs” in order to discuss the topic of animal welfare transparently and openly with everyone.
Working Conditions for Employees		We aim to bring our LTIR (Lost Time Injury Rate) below 1.0 by 2025.		Through our BeSafe! program we continuously raise employee awareness of workplace dangers and teach them rules for safe behavior
Equal Treatment and Opportunities for All		Aim for gender parity in leadership by 2030.		We focused on retaining and developing talented women by offering mentoring, sponsoring and talent programs. In addition, we repeated our gender pay equity analysis, launched fertility benefits and a returnship pilot program in Germany to ensure we remain an attractive employer.
Equal Treatment and Opportunities for All		Aim for 30% nationals from Asia, LATAM and MEA in leadership (Role 4+) by 2030.		We developed a Culture, Nationality & Ethnicity Action Plan. We offered development opportunities for underrepresented ethnic talent as well as continued to explore opportunities to source international and underrepresented ethnic talent. We also continued to train our recruiting and sourcing team members.
Equal Treatment and Opportunities for All		Aim for 30% of underrepresented ethnic colleagues in United States leadership (Role 4+) by 2030.		We developed a Culture, Nationality & Ethnicity Action Plan. We offered development opportunities for underrepresented ethnic talent as well as continued to explore opportunities to source international and underrepresented ethnic talent. We piloted new programs such as the McKinsey Connected Leaders Academy.
Equal Treatment and Opportunities for All		By 2026, all leaders will have participated in inclusive leadership workshops.		Until the end of 2023 92% of our leaders took part in the Inclusive Leadership Training.

Goal 3: By 2040, we will achieve climate neutrality and reduce our resource consumption.

Material topic		Operational target		Actions 2023		Status
Climate Action		By 2030, we aim to cover 80% of our purchased electricity with renewables.		Purchasing electricity from renewable sources (new VPPAs in Europe)
Climate Action		By 2030, we intend to reduce direct and indirect greenhouse gas emissions (Scope 1 and 2) by 50% (2020 baseline).		Systematic examination of the energy consumption at our individual production sites Reduction of process-related emissions Emission reduction through green fleet Training of employees in energy management Implementation of energy and water efficiency projects at sites
Climate Action		By 2030, we intend to reduce direct and indirect greenhouse gas emissions (Scope 1 and 2) by 50% (2020 baseline).		We continued implementing our sustainable packaging initiative, Mpact. We updated its scope and have created several working sub-teams such as sustainable blister packaging and the European Packaging and Packaging Waste Regulation (PPWR), which aim is to follow legal changes and new requirements relevant to our MPact initiative.These sub-teams are working on the alignment with new packaging regulations impacting pharmaceutical industry in the upcoming years.
Climate Action		By 2030, we intend to reduce direct and indirect greenhouse gas emissions (Scope 1 and 2) by 50% (2020 baseline).		To reduce process-related emissions, we successfully piloted a NF3 abatement technology for high volume manufacturing at our site in Hometown, Pennsylvania, USA. In 2023, we developed the plan for broader deployment.
Climate Action		By 2030, we aim to reduce our Scope3 emissions along the entire value chain by 52% in relation to gross profit.		Supplier decarbonization Shifting transportation from air to sea
Innovation and R&D		By 2030, we will avoid 10% of packaging weight per unit of sales through our SMASH Packaging strategy.		We embedded our packaging sustainability principles into the product development process so our R&D teams can target, implement and track potential sustainability improvements in product packaging. In 2023, approximately 65% of new product development projects successfully aligned with at least one of our four key impact areas.
Water Management		Until 2030, improve water efficiency by 50% in comparison to 2020 (m3/ revenue in million €)		New target was approved by Board.
Water Management		Until 2025, improve water efficiency in manufacturing sites by 10% (measured by the Merck Water Intensity Score).		Treatment of wastewater from production Optimization of water-using processes Rainwater harvesting
Water Management		Reduce environmentally relevant trace substance residues in the wastewater of all production sites to below the no-effect threshold.		Further improving the wastewater treatment process
Circular Economy, Waste & Recycling		By 2025, reduce the environmental impact of our waste by 5% in comparison to our baseline year 2016 (measured by the Merck Waste Score)		Consistently seeking ways to enhance our production processes and disposal methods
Circular Economy, Waste & Recycling		By 2030, achieve a circularity rate of 70% across the entire organization		New target was approved by Board.

Roles and responsibilities

Our Executive Board has Group-wide responsibility for our sustainability strategy. It has adopted our three strategic goals. The Group Corporate Sustainability unit is responsible for developing and shaping the sustainability strategy and it informs the Executive Board at least once a year about the progress made and the need for action. It is part of the Group function Corporate Sustainability, Quality and Trade Compliance (SQ), which reports to the Chair of the Executive Board. At Executive Board level, responsibility for Environment, Social, Governance (ESG) also lies with the Chair of the Executive Board.

Group Corporate Sustainability is also responsible for coordinating the Merck Sustainability Board, which is chaired by the Head of SQ, who simultaneously serves as Chief Sustainability Officer. The committee consists of representatives from our business sectors and from key Group functions, such as Procurement, Communications and Controlling.

The Sustainability Board steers and monitors the Group-wide implementation of the sustainability strategy, defines priorities and stipulates globally applicable sustainability policies. In addition, the Sustainability Board ensures that the initiatives of our various business sectors, Group functions and subsidiaries align with our global sustainability strategy. Moreover, it recommends corresponding initiatives to the Executive Board. Within their respective area of responsibility, each Executive Board member is also responsible for sustainability, reviews the priorities that have been set, and decides on the implementation of initiatives.

In 2023, the Sustainability Board met 11 times by video conference. In addition to climate-related issues and new sustainability reporting requirements, it also addressed the adaptation of the strategy and new objectives for circular economy and water management. The measures adopted by the Sustainability Board are implemented by our line managers as well as by interdisciplinary project teams. To achieve our operational sustainability goals and depending on the focus of the goal, responsibility is assigned to specific teams, functions and business units. Those responsible for implementing actions exchange ideas and coordinate these in an overarching committee. They identify synergies between the projects and align their direction with our sustainability goals.

The Merck Sustainability Advisory Panel (MSAP) supports our company as an external expert committee for sustainability. The panel is chaired by the Head of SQ. It comprises independent experts on sustainability-related topics from various institutions worldwide whom we invite on an ad hoc basis. The MSAP advises our company on selected issues and assesses planned activities. Moreover, the members apply their knowledge to help address societal and political challenges and developments that could be strategically relevant for our businesses.