Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced landfill waste since 2011
• 37% recycled waste
• Energy audits conducted to identify and improve energy efficiency at high-consumption sites

Social Achievements

• Named “2018 Top Employer” in China for the seventh consecutive year
• Warsaw, Indiana headquarters wholly powered by renewable energy
• Numerous team member surveys conducted to guide improvements
• Partnerships with organizations and educational institutions to develop talent
• Provided grants, donations, and funding for numerous projects including orthopedic post-graduate medical education, independent medical educational conferences, and independent research

Governance Achievements

• Committed to good corporate governance
• Compliance with all applicable laws, regulations, company policies, and industry codes
• CEO and senior executives receive performance-based compensation aligned with stockholder interests

Climate Goals & Targets

Environmental Challenges

• Reducing negative environmental effects by 20% by 2020 (compared to 2015 data)
• Becoming a zero-to-landfill company

Mitigation Strategies

• Harmonizing environmental sustainability strategy across global manufacturing network
• Waste reduction and recycling initiatives
• Energy efficiency improvements (higher efficiency compressed air systems, improved HVAC control, LED lighting)
• Locating partners for byproduct management and researching recycling avenues

Supply Chain Management

Responsible Procurement

• Code of Supplier Conduct
• Conflict Minerals Disclosure Report

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: CDP, GRI, TruCost

Certifications: ISO 13485

Awards & Recognition

• 2018 Top Employer in China

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced landfill waste since 2011; working towards zero-to-landfill status.
• Energy reductions achieved at several sites through improved systems (compressed air, HVAC, LED lighting).
• 68% recycled waste in 2019.

Social Achievements

• Named 2019 Medtech Company of the Year by MD+DI.
• Recognized by Forbes as one of America’s Best Employers by State.
• Named one of the 100 Best Places to Work in IT by Computerworld.
• Zimmer Biomet China awarded Top Employers China certification.

Governance Achievements

• Maintains Corporate Governance Guidelines to enhance stockholder value.
• Adheres to numerous industry association codes of conduct and ethics.
• Executive compensation aligned with stockholder interests.

Climate Goals & Targets

Environmental Challenges

• Reducing landfill waste to zero.
• Minimizing environmental impacts along the product life cycle.

Mitigation Strategies

• Locating partners for byproduct management and researching recycling avenues.
• Regular investment in operational improvements to address resource consumption and conscientious sourcing of materials.

Supply Chain Management

Responsible Procurement

• Code of Supplier Conduct

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: CDP, GRI, TruCost

Certifications: ISO 13485

Awards & Recognition

• 2019 Medtech Company of the Year (MD+DI)
• Forbes America’s Best Employers by State
• 100 Best Places to Work in IT (Computerworld)
• Top Employers China certification (Zimmer Biomet China)

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Achieved reductions in greenhouse gas (GHG) emissions, landfill waste and water usage since 2015.
• Outfit all major manufacturing and distribution sites globally with LED lighting.
• Achieved zero waste to landfill in eight major manufacturing sites.
• Publicly committed to setting a science-based target for GHG emissions, focusing on Scope 1, 2, and 3 emissions.
• Commenced construction on a large-scale solar farm with a Virtual Power Purchase Agreement (VPPA) to offset North American electrical load.

Social Achievements

• Implemented a new continuous performance management approach – Performance Connections.
• Developed and deployed the Zimmer Biomet Leadership 360 Assessment.
• Implemented a train-the-trainer program for HR leaders in APAC to improve coaching effectiveness.
• Established iGrow, a regional leadership development program.
• Initiated a bi-weekly New Hire Orientation (NHO) program.
• Developed and implemented a global onboarding checklist.
• Continued offering access to Bookboon eLibrary.
• Completed a significant update to the global Learning Management System (LMS).
• Committed to initiatives to drive diversity, equity, and inclusion, including investment in ERGs and community programs.
• Total Recordable Incident Rate of 0.27 and Lost Time Incident Rate of 0.11 in 2020.
• Rolled out a Virtual Workplace Program.

Governance Achievements

• Included a global quality bonus modifier component to executives’ annual cash incentive plan in 2020.
• Resolved one FDA Warning Letter in 2020 and received no new ones.
• 100% of team members completed Code of Business Conduct & Ethics training.
• 100% completion of remediation activities arising from compliance investigations, audits, and monitoring.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impact on financial results.
• Maintaining supply chain security during the COVID-19 pandemic.
• One pending FDA Warning Letter at the Warsaw, Indiana North Campus facility.

Mitigation Strategies

• Developed comprehensive crisis response plans and contingency drills.
• Promptly secured global supply chain in early 2020.
• Implemented enhanced safety protocols at manufacturing sites and distribution centers.
• Shifted non-manufacturing personnel to work-from-home arrangements.
• Significant investments in Quality Management System remediation and upgrades.

Supply Chain Management

Supplier Audits: 47 suppliers audited in 2019; Social Responsibility audits planned every three years.

Responsible Procurement

• Code of Supplier Conduct
• Compliance with applicable laws and regulations
• Due diligence investigations for new international suppliers
• Supplier Diversity Policy

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: SASB

Certifications: ISO

Environmental Metrics

ESG Focus Areas

• Diversity, Equity & Inclusion (DEI)
• Best & Preferred Place to Work
• Compliance, Quality and Ethics
• Efficiency and Business Performance
• ESG Disclosures
• Climate Change
• Waste Reduction
• Community Engagement
• Product Quality
• Supplier Responsibility
• Corporate Governance
• Ethical Business Conduct
• Patient Privacy and Data Security

Environmental Achievements

• Achieved a Leadership Level grade of A- from the Carbon Disclosure Project (CDP)
• Continued progress on Science Based Target Initiative-approved goal to reduce operational (Scope 1+2) emissions by 50% and purchased goods and services (Scope 3) emissions by 15% by 2030
• Upgraded to ‘AA’ ESG rating by MSCI in February 2023
• 73% of solid waste diverted from landfills
• 58% of solid waste recycled
• Large-scale solar farm offsetting nearly 100% of all US GHG emissions

Social Achievements

• Achieved 2022 milestone towards 2026 DEI representation goals for women globally and people of color in the U.S. at the director-level and above
• Launched Best & Preferred Place to Work strategy
• Received Great Place to Work™ certification in the U.S.
• Maintained fewer than 10 product recalls in the year
• Completed $2.0 million commitment to the NAACP (part of a multi-year, $5.0 million commitment)
• Announced $6.0 million three-year commitment to support Movement is Life

Governance Achievements

• 100% of Team Members and Zimmer Biomet’s Board of Directors successfully completed Code of Business Conduct and Ethics training
• Significant majority of board of directors qualifies as independent
• Board diversity improvements (30% women, 30% ethnically diverse, 10% LGBTQ+, 40% born outside the U.S.)

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions
• Significant overtime for employees
• Global economic constraints
• Pending FDA Warning Letter at Warsaw, Indiana North Campus facility

Mitigation Strategies

• Continued workplace flexibility initiatives (e.g., 'No Meeting Friday Afternoons')
• Investments in QMS remediation and upgrades
• Partnership with FDA and MDIC for quality improvement (Accelerate Sustainable Capability pilot program)
• Global Supply Risk Management process including third-party financial health assessments of suppliers

Supply Chain Management

Supplier Audits: 30 suppliers audited in 2022; 50% of Tier 1 suppliers audited by third-party

Responsible Procurement

• Code of Supplier Conduct
• Social Responsibility audits
• Supplier Diversity Policy (U.S.)

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: SASB, TCFD, GHG Protocol

Certifications: ISO/IEC 27001 (Surgery Planning Ecosystem), Great Place to Work® (U.S.)

Third-party Assurance: PricewaterhouseCoopers LLP (limited assurance on Scope 1 and 2 emissions)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Great Place to Work™ certification (U.S.)

Environmental Metrics

ESG Focus Areas

• People & Culture
• Operational Excellence
• Innovation & Diversification

Environmental Achievements

• Reduced 2023 Scope 1 and 2 (market-based) carbon emissions by more than 7% from 2022 levels
• Surpassed 2030 commitment by already reducing 56% of Scope 1 and 2 (market-based) carbon emissions
• Expanded Zero Waste to Landfill (ZWTL) initiative to 18 internally certified sites (60% of in-scope global network)
• Diverted 73% of waste from landfill in 2023
• Recycled 61% of waste in 2023

Social Achievements

• Achieved highest employee engagement levels since 2015 merger
• Furthered commitment to integrating health equity into business strategy with Community Centered Care (C3) framework
• Established Zimmer Biomet Health Equity division
• Signed the Global Health Equity Network’s Zero Health Gaps Pledge in 2024
• Maintained fewer than 10 product recalls in 2023

Governance Achievements

• 100% of team members and Board of Directors completed Code of Business Conduct and Ethics training
• Zero pending FDA Warning Letters as of December 2023

Climate Goals & Targets

Environmental Challenges

• Climate change
• Supply chain disruptions
• Maintaining high ethical standards across global operations

Mitigation Strategies

• Science Based Targets initiative (SBTi) commitment to Net-Zero GHG emissions by 2050
• Working with suppliers to increase transparency and improve environmental performance
• Robust Global Compliance Program
• Third-party audits of suppliers
• Global due diligence investigations for new international suppliers

Supply Chain Management

Supplier Audits: 30 suppliers audited in 2022; 87% of Tier 1 suppliers audited by third-party

Responsible Procurement

• Code of Supplier Conduct
• Social Responsibility audits

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Sustainability Accounting Standards Board (SASB), Task Force on Climate-related Financial Disclosures (TCFD)

Certifications: ISO/IEC 27001 (for Surgery Planning Ecosystem)

Third-party Assurance: PricewaterhouseCoopers LLP (limited assurance on Scope 1 and 2 GHG emissions)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• America’s Greatest Workplaces for Diversity 2024
• America’s Greenest Companies 2024
• America’s Greatest Workplaces for Women 2024
• America’s Greatest Workplaces for Job Starters 2024