Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate change
• Diversity & Inclusion
• Ethical Business
• Responsible Relationships
• Green Mindset

Environmental Achievements

• Reduced CO2e emissions by 3.2% per produced tonne of finished product (exceeding the 2% target)
• 85% of total waste generated at sites recycled or incinerated with energy recovery (meeting the target)
• 50% reduction in factory water usage in Finland (Mikkeli factory)
• 40% reduction in water usage in US factories
• USD 300,000 in waste savings in US factories
• Mikkeli, Brunswick, Oldham and Horsens factories now purchase 100% green electricity
• Introduction of ISCC*-accredited universal drapes containing tall oil-based plastic

Social Achievements

• Launched Avance® Solo, a portable negative pressure wound therapy system, in 10 countries
• Avance® Solo received 510k clearance by the US Food and Drug Administration (FDA)
• Employee engagement was 77%, down 2% on 2020 but in line with expectations
• 75% of positions at manager level and above filled with internal talent
• 85% of positions at director level filled with internal talent
• EUR 160,000 sent to support the establishment of a cleft care centre in the Philippines through employee fundraising
• 50/50 male:female balance on the Executive Leadership Team

Governance Achievements

• 100% of white-collar employees trained in Code of Conduct
• 97% of white-collar employees trained in anti-corruption and bribery
• Established a Sustainability Committee and sustainability function
• Started working to Task Force on Climate Related Financial Disclosures (TCFD) guidelines

Climate Goals & Targets

Environmental Challenges

• COVID-19 continued to affect business (lockdowns, slowdown in elective surgeries, supply chain disruptions)
• Significant increases in the cost of goods sold (raw material and transportation costs)
• Lockdowns in Malaysia led to a 10% reduction in glove production
• Elective surgeries remained at 90% of pre-pandemic levels
• High level of back orders
• Disruption in supply chains (freight congestion, rising raw material costs)
• Erratic demand for products
• Shortage of healthcare providers
• Lack of renewable electricity infrastructure in some manufacturing locations
• Risk of flooding or drought at some manufacturing sites
• Rising importance of sustainability risks

Mitigation Strategies

• Responded with agility and adjusted working practices to meet customer needs
• Strong Wound Care performance and high customer loyalty
• Exploring how to shorten supply chains and build robustness into businesses
• Substantial investments into increased manufacturing capacity for Wound Care and Gloves
• New sustainability strategy and roadmap
• Initiatives focusing on improving energy efficiency and sourcing renewable energy
• Initiatives to conserve water and optimize production processes for water efficiency
• Exploring measures such as ‘multiple use’ product ranges and products using renewable materials
• Manufacturing back-up plans and dual sources of raw materials
• Dual sourcing strategy to reduce reliance on key suppliers
• Continuous review of safety stock
• Partnerships with suppliers to find solutions to eliminate supply chain risks
• Accurate forecasts of volumes from factories to distribution centers
• Qualifying contract manufacturers to secure back-up production

Supply Chain Management

Supplier Audits: 16 supplier assessments in 2021

Responsible Procurement

• Supplier Code of Conduct
• Supplier Standard

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Drought

Transition Risks

• Carbon pricing
• Increasing energy prices
• Lack of renewable electricity infrastructure

Opportunities

• Development of energy-efficient products
• Use of renewable raw materials

Reporting Standards

Frameworks Used: GRI Standards, TCFD guidelines (starting in 2021)

Certifications: ISO 14001 (multi-site, excluding US sites in 2021), ISO 45001 (multi-site), ISO 9001, ISO 13485

Third-party Assurance: Deloitte AB

UN Sustainable Development Goals

• Goal 3 (Good Health and Well-being)
• Goal 7 (Affordable and Clean Energy)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)

The report highlights how various initiatives contribute to these goals.

Sustainable Products & Innovation

• Avance® Solo
• ISCC-accredited universal drapes with tall oil-based plastic

Awards & Recognition

• Prix Galien for Granulox®

Environmental Metrics

ESG Focus Areas

• Customer centricity
• Sustainability
• Digitalisation

Environmental Achievements

• 10% reduction of GHG emissions across the entire value chain (Scope 1, 2 and 3) compared to 2021
• 11% reduction of Scope 1 and 2 absolute GHG emissions (compared to baseline 2016)
• 51% fossil-free electricity use
• 45% waste diverted from disposal
• Four zero manufacturing waste-to-landfill sites
• 91% of packaging recyclable and 72% of all packaging made of recycled (PCR) and/or renewable material
• 52% reduction of Scope 1 and 2 absolute greenhouse gas (GHG) emissions compared to the 2016 baseline and 32% compared to 2021 in Wound Care
• 9.6% decrease in Wound Care energy consumption intensity compared to 2021
• New closed loop water cooling system for Epaderm® mixing process expected to save approximately 7.3 million litres of fresh water per year in Wound Care
• 31% absolute Scope 1 and 2 GHG emissions decrease in Gloves compared to previous year
• 16.5% waste intensity reduction in Gloves compared to 2021
• 97% waste diverted from landfill across all Gloves sites
• New gloves plant in Kulim, Malaysia, with focus on sustainable production

Social Achievements

• 80% Engagement Index Score
• 44% female representation at Director level and above
• 5 nationalities in the Executive Leadership Team
• Cleft care center of excellence starts construction in Cebu (Philippines) with capacity for 10,000 surgeries in three years
• 100% new direct material suppliers screened on ESG criteria
• 98.3% of white-collar employees trained in Mölnlycke’s Code of Conduct including human rights policies and procedures
• New whistle-blower reporting system, the Ethics Hotline implemented
• 34 cases reported through the Ethics Hotline reporting tool
• New distributor due diligence system and related business procedures implemented
• Business ethics representatives appointed in all business entities
• Improved service complaints versus deliveries ratio (1.85% exceeding the target of 2.00%)

Governance Achievements

• New customer-centric strategy implemented
• Sustainability roadmap – WeCare – implemented
• Commitment to Science Based Targets initiative (SBTi) for net zero emissions by 2050
• Silver Rating from EcoVadis (top 11% of companies evaluated)

Climate Goals & Targets

Environmental Challenges

• Increased costs, supply disruptions and other macroeconomic challenges
• Supply chain disruptions and longer lead times
• High inflation
• Cost of supply all-time high
• Leadtime constraints
• Pandemic still affecting the business
• Energy supply, predominantly in Europe
• Staff shortages in healthcare
• Volatile business conditions
• Increased cost for raw materials, components, transport and energy
• Rising inflation
• COVID-19 causing supply disruptions
• Staffing issues slowing access to customers
• Logistics timelines being a challenge
• Ongoing challenges in sourcing raw materials due to the global supply chain crisis
• Rise in the cost of materials
• Delivering to customers on time being challenging in markets where there is a shortage of truck drivers

Mitigation Strategies

• Significant efforts to secure supply to its customers and took countermeasures to increase productivity and manage its cost base, alongside with proactive account management
• Continuously reviewing its supply chain and base of suppliers to make itself less vulnerable to macroeconomic effects such as supply chain disruptions and price fluctuations
• Implementing a well-balanced global manufacturing footprint and developing long-term partnerships with logistics service providers
• Proactively mitigating challenges by protecting customers and securing supply
• Reducing backorders and operational inventory
• Actively seeking new suppliers in new geographies
• Continuously evaluating alternative materials and components that may be more sustainable
• Accelerating efforts to provide digital solutions that further improve the value proposition
• Introducing renewable, bio-based, raw materials in some of its products
• Expanding the range of ISCC-accredited universal drapes
• Carrying out a Sustainability Product Portfolio Assessment (SPPA) on selected ORS product categories
• Switching to 100% fossil-free electricity at its manufacturing sites in Thailand, Belgium and the Czech Republic
• Conducting Life Cycle Analysis studies covering more than 90% of all its product portfolio
• Using digital channels and reaching out directly to existing and potential customers to improve access and understanding of the benefits of its Hibiclens® antiseptic cleanser
• Extensive ethnographic studies to understand customers’ needs and challenges
• Intensified product development to further strengthen its range of products and solutions
• Shift in R&D to increase investment in new technologies
• Activities to maintain and further strengthen the reputation of Mölnlycke and its strong portfolio of brands
• Ensuring compliance with the company’s Code of Conduct, defining values in terms of business ethics, human rights and labour standards
• Sophisticated processes within Quality and Regulatory, ensuring compliance with regulatory bodies as MDR (EU) and FDA (US)
• Strong sustainability roadmap, WeCare, to embed sustainability into all aspects of business
• Continuously monitoring the macroeconomic situation, to mitigate and adapt to a challenging environment to secure the company’s business
• Extending risk evaluation further down the supply chain, and a close partnership with suppliers who have committed to SBTi
• Initiatives to conserve water and optimise production processes for water efficiency
• Developing new, alternative manufacturing methods to produce gloves in a less energy and water intensive way
• Implementing optimisation projects in Malaysia, developing fossil-free electricity solutions and renewable energy equivalents to fossil fuels
• Investing in new technologies to transition its business and continue improving patient outcomes
• Implementing a dual sourcing strategy to reduce the risk if a key supplier falls short
• Investigating alternative materials from other companies to support dual sourcing
• Continuously reviewing its safety stock
• Evaluating its supply chain to make sure the company has the right logistic infrastructure in place
• Establishing partnerships with suppliers to search for solutions that can replace the normal logistics flows and eliminate supply chain risks in difficult times
• Striving for accurate forecasts of volumes from its factories to the receiving distribution centre
• Investing resources and acting proactively in cyber security
• Following defined processes to ensure IT systems are stable and secure, including measures to prevent cyber incidents and reduce the vulnerabilities in the company’s devices
• Investing in people’s careers over the long term, empowering them to contribute to the company’s success through learning and development programs and opportunities for progression
• Proactive approach toward health and well-being, with a clear objective of accident-free workplaces
• Introducing remote working principles to support work-life balance for its employees
• Aligning to a long-term goal of net zero carbon emissions along the entire value chain by 2050 the latest
• Improving energy efficiency and sourcing of renewable energy at all manufacturing sites
• Introducing products using renewable materials as well as sustainable packaging
• Transparent reporting of sustainability performance on an annual basis according to GRI standards
• Centralising all currency exposure to Group Treasury through the internal netting system
• Managing FX exposure according to the Policy of management of group financial risks, approved by the Board
• Not hedging transaction exposure
• Maintaining a liquidity reserve exceeding MEUR 150

Supply Chain Management

Supplier Audits: 20 on-site assessments

Responsible Procurement

• Supplier Code of Conduct
• Supplier Standard
• Sustainable Procurement Framework
• ESG criteria screening for new suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather patterns
• Flooding
• Drought

Transition Risks

• Regulatory changes (carbon tax, energy efficiency standards, extended producer responsibility)
• Market shifts (increased demand for sustainable products)

Opportunities

• Development of energy-efficient products
• Increased market value through sustainable solutions

Reporting Standards

Frameworks Used: GRI, TCFD

Certifications: ISO 14001, ISO 45001

UN Sustainable Development Goals

• Goal 3 (Good Health and Well-being)
• Goal 5 (Gender Equality)
• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 10 (Reduced Inequalities)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)
• Goal 16 (Peace, Justice and Strong Institutions)

Mölnlycke’s initiatives contribute to these goals through sustainable product development, responsible resource management, ethical business practices, community engagement, and commitment to net-zero emissions.

Sustainable Products & Innovation

• ISCC-certified drapes
• Biogel® surgical gloves
• Avance Solo negative pressure wound therapy solution
• Tortoise Sling
• ISCC-certified BARRIER Universal Mayo Stand Cover
• ProcedurePak solutions with PVC-free components

Environmental Metrics

ESG Focus Areas

• People
• Planet
• Governance

Environmental Achievements

• Maintaining an environmental management system according to ISO14001:2015
• Commitment to net zero by 2050 through the Science Based Targets Initiative

Social Achievements

• Maintaining a health and safety management system according to ISO45001:2018
• Working systematically to improve diversity and inclusion with a particular focus on gender equality
• Partnering with NGOs to create a positive impact on local communities

Governance Achievements

• Regular assessment of sustainability-related risks using a double materiality process
• Implementing strong business ethics and compliance processes to prevent corruption
• Commitment to transparent reporting on sustainability

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Code of Conduct
• Distributor Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: UN Global Compact, OECD Guidelines for Responsible Multinational Enterprises, UN Universal Declaration of Human Rights, UN Convention on the rights of the child, ILO Conventions, UNFCCC, Paris Agreement, TCFD

Certifications: ISO 14001:2015, ISO 45001:2018

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• 3
• 5
• 7
• 8
• 10
• 12
• 13
• 16
• 17

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Sustainable Procurement in Healthcare

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• High operational costs associated with less sustainable products
• Legal and regulatory compliance related to sustainability
• Reputational damage from unsustainable practices
• Supply chain disruptions due to unsustainable practices
• Negative impact on employee satisfaction and talent recruitment

Mitigation Strategies

• Implementing sustainable procurement practices to reduce costs and risks
• Adhering to environmental regulations and standards
• Demonstrating commitment to sustainability to build public trust
• Developing resilient supply chains
• Promoting employee well-being and attracting talent through sustainability initiatives

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier certifications
• Code of conduct
• Sustainability requirements

Climate-Related Risks & Opportunities

Physical Risks

• Heat waves
• Extreme rainfall
• Air pollution
• Wildfires

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI, ISO 14001, ISO 26000, UN Global Compact, UN Sustainable Development Goals (SDGs), OECD Guidelines for Multinational Enterprises, Science Based Targets initiative, EU Taxonomy

Certifications: ISO 14001, ISO 26000, ISO 50001, SA8000, ISO 45001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed