Climate Change Data

Environmental Metrics

ESG Focus Areas

• Corporate Responsibility
• Diversity & Inclusion
• Environmental Sustainability
• Employee Wellbeing
• Ethical Business Conduct

Environmental Achievements

• Extended GHG emissions reporting scope to include R&D centers, major offices, and distribution centers. Established a baseline for future comparisons.
• Implemented LEAN manufacturing processes across operations, with over 90% of manufacturing shop floor employees participating in LEAN training.

Social Achievements

• Launched me+™ recovery program, supporting nurses in enabling patients to live more active lives post-surgery.
• Launched GentleCath™ me+™ program for continence care, providing accessible information and support.
• Implemented a global employee share purchase plan with a 22% take-up rate in the first year.
• Improved gender diversity on the Board, achieving 30% female representation.

Governance Achievements

• Achieved full compliance with the UK Corporate Governance Code.
• Implemented processes and procedures to ensure effective Board operation, including appraisals and performance evaluations.
• Introduced a robust process for annually reviewing internal controls and risk management systems.

Climate Goals & Targets

Environmental Challenges

• Supply constraints due to production transfer delays from Greensboro plant to Haina, impacting Advanced Wound Care and Ostomy Care franchises.
• Lower-than-anticipated revenue from new product launches.
• Headwinds and cost increases offsetting benefits from the Margin Improvement Programme (MIP).
• Lost orders due to supply constraints.

Mitigation Strategies

• Implemented a mitigation plan to increase production volumes for Moldable products.
• Conducted an external review of manufacturing and supply chain, strengthening operating mechanisms and project management.
• Continued with MIP initiatives and launched new projects in sourcing excellence, supply chain cost efficiency, LEAN programs, footprint optimization, and complexity reduction.
• Strengthened leadership with the appointment of Donal Balfe as Executive Vice President, Global Operations.

Supply Chain Management

Supplier Audits: Ongoing inspections and audits of third-party manufacturing partners.

Responsible Procurement

• Global Third Party Compliance Manual, Supplier Code of Conduct consistent with the Code of Ethics and Business Conduct and Human Rights and Labour Standards Policy.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Two ProShare Awards: “Best New Share Plan” and “Most Effective Communication of an Employee Share Plan”.

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Employee engagement
• Community investment
• Diversity and inclusion
• Supply chain responsibility
• Health and safety

Environmental Achievements

• Sourced virtually all UK energy from renewable sources
• Developed a new climate change strategy with GHG reduction targets

Social Achievements

• Launched "LIFE+ by ConvaTec" global community program
• Improved employee engagement scores above sector benchmark
• Expanded GentleCath™ me+™ program to support intermittent catheter users in multiple countries
• Launched specialist eLearning program on AWC products and Ag+ Technology in Italy
• Reduced recordable and lost time injuries

Governance Achievements

• Achieved 30% female Board representation
• Strengthened Executive Committee with experienced members
• Implemented a refreshed execution model ("Pivot to Growth") to improve commercial and operational performance
• Undertook an externally facilitated Board effectiveness review
• Improved management information and reporting processes

Climate Goals & Targets

Environmental Challenges

• Disappointing financial and operational performance in 2018 due to ineffective execution
• Underperformance in US AWC business
• Challenging market dynamics for AWC in the UK
• Weakness in Ostomy Care
• Unexpected change in inventory policy by largest customer in Infusion Devices
• Supply constraints in 2017 impacting 2018 performance
• Pricing pressure
• Delayed product launches
• Focus on topline growth at the expense of margin
• Inefficiencies and cost headwinds in manufacturing facilities
• Brexit uncertainty

Mitigation Strategies

• Implemented a refreshed execution model ("Pivot to Growth") focused on Simplify, Innovate, Segment, and Invest
• Strengthened Executive Committee
• Developed plans to address performance issues in AWC (wound acceleration plan)
• Implemented changes to commercial approach in Ostomy Care
• Developed contingency plans for Brexit
• Implemented cost out and efficiency programs
• Improved management information and forecasting capabilities
• Enhanced R&D capabilities and product development processes
• Increased investment in commercial initiatives and infrastructure
• Improved performance management with personal accountability

Supply Chain Management

Supplier Audits: 125 audits in 2018 (89 of own facilities, 36 of third-party facilities)

Responsible Procurement

• Supplier Code of Conduct (prohibition of compulsory or forced labor and modern slavery)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather
• Supply chain disruptions

Transition Risks

• Regulatory changes
• Market shifts
• Pricing pressure

Opportunities

• Development of energy-efficient products

Sustainable Products & Innovation

• AQUACEL™ Ag Advantage dressing
• Avelle™ NPWT System
• neria™ Soft90 infusion set
• Next generation female catheter

Awards & Recognition

• Medtronic Supplier Excellence Award
• ANERCOM Product of the Year (neria™ Soft90)
• iF Design Award (next generation female catheter)

Environmental Metrics

ESG Focus Areas

• Delivering for our customers
• Enabling our people
• Working responsibly with our partners
• Conserving the planet
• Behaving ethically and transparently
• Making a socio-economic contribution

Environmental Achievements

• Reduced GHG emissions by approximately 19% (market basis) due to energy efficiency gains and increased use of renewable energy.

Social Achievements

• Launched and expanded the me+™ program, supporting over 300,000 participants.
• Increased participation in the Global Challenge wellbeing program by 53%.

Governance Achievements

• Appointed a new Chairman and CEO.
• Refinanced the Group’s debt successfully.
• Enhanced stakeholder engagement process.
• Developed a new Remuneration Policy.

Climate Goals & Targets

Environmental Challenges

• AWC underperformance in the US market due to salesforce transition.
• Ostomy Care underperformance in the US market.
• Brexit uncertainty.
• Coronavirus outbreak.
• Implementation of the EU Medical Device Regulation (MDR).

Mitigation Strategies

• Transitioning to a specialized salesforce in the US AWC business.
• Implementing changes to the commercial approach in Ostomy Care to improve salesforce effectiveness.
• Maintaining a Brexit taskforce and contingency plans.
• Closely monitoring the Coronavirus outbreak and assessing potential impacts.
• Working towards operational preparedness for MDR requirements.

Supply Chain Management

Supplier Audits: 89 new and renewed organizations underwent due diligence in 2019.

Responsible Procurement

• Supplier Code of Conduct (SCoC) based on ILO conventions and UN Global Compact principles.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events impacting supply chains and operations.

Transition Risks

• Regulatory changes related to products and raw materials (plastics)
• Market shifts due to rising customer concerns about carbon footprint and single-use plastics.

Opportunities

• Development of energy-efficient products and processes.

Reporting Standards

Frameworks Used: UN Sustainable Development Goals, TCFD

Certifications: ISO 14001 (referenced)

Sustainable Products & Innovation

• AQUACEL™ Ag+/Advantage silver products
• ConvaMax™ super absorber dressing
• Esteem™+ Soft Convex pouches

Environmental Metrics

ESG Focus Areas

• Stakeholder inclusiveness
• Materiality
• Sustainability context
• Completeness
• Quality
• Greenhouse gas emissions
• Safety
• Human rights
• Supplier performance
• Product sustainability

Environmental Achievements

• Achieved 2020 GHG emission reduction target early
• Improved GHG emissions reporting with inclusion of F-gases
• Increased frequency of environmental data collection to monthly

Social Achievements

• Launched 35 new products
• Reduced lost time injury rate for manufacturing to below 0.5 per 200,000 hours worked
• Reached 30% female representation in senior management
• Completed analysis of the CR performance of 50 of its most significant suppliers
• Completed third-party reviewed life cycle assessments within all major product groups
• Completed the review and update of human rights-related policies
• Improved Oekom and SustainAlytics ratings

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Need to connect stakeholder engagement and materiality processes more directly with mainstream commercial strategy
• Need for a further review of material issues and their relative priority
• Need to disclose more information on raw materials used in packaging and products
• Need to clearly express how sustainability will be embedded into Research and Design processes
• Need to develop a set of short and medium-term targets covering key aspects of the sustainability program
• Need to update medium-term GHG emissions target and include more detail on future intentions with respect to climate-related financial disclosures
• Need to expand reporting of Scope 3 GHG emissions
• Need to include leading safety measures (hazards and observations) in reports
• Need to publish criteria used to define targets to increase transparency

Mitigation Strategies

• Initiated a Sustainability strategy refresh process
• Intends to form a new Executive-led ESG steering team in 2021
• Will complete a further review of material issues as part of the Sustainability strategy refresh
• Will develop new short and medium-term targets in 2021
• Will improve approach to reporting all emissions as part of a strategic review in 2021
• Will consider disclosing more information on raw materials

Supply Chain Management

Supplier Audits: 50 most significant suppliers audited

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI

Certifications: Null

Third-party Assurance: DNV GL Business Assurance Services UK Limited

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change

Environmental Achievements

• Manufacturing plants in Wales certified to ISO 14001 environmental management system.
• Reduced Scope 1 and 2 emissions (market-based) by an unspecified amount between 2021 and 2023.

Climate Goals & Targets

Environmental Challenges

• Reducing Scope 1, 2, and 3 emissions to meet net-zero targets.

Mitigation Strategies

• Implemented various projects including ESOS audit, solar PV installation, steam survey and energy efficiency improvements, heating control optimization, regenerative thermal oxidizer dead band control, installation of electric boilers, lighting control sensors, and increased supplier-specific emission data collection and engagement.

Supply Chain Management

Responsible Procurement

• Programme for continual data collection and analysis to increase supplier alignment to net zero.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UK Transition Plan Taskforce Disclosure framework, SBTi

Certifications: ISO 14001