Climate Change Data

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Human Resources
• Environmental Responsibility
• Quality in Medicine
• Health and Safety

Environmental Achievements

• Introduced ISO 14001 compliant Environmental Management System (EMS) at biotechnology plant in Debrecen.
• Eliminated use of freons at Hungarian manufacturing sites.
• Implemented noise protection action plan in Dorog.

Social Achievements

• Launched Richter for Women program, including awards and writing competition.
• Donated HUF 209 million to domestic hospitals.
• Maintained employee turnover at 6.5%.

Governance Achievements

• Followed Responsible Corporate Governance guidelines of the Budapest Stock Exchange.
• Held open Annual General Meetings.
• Operated subcommittees within the Board of Directors.

Climate Goals & Targets

Environmental Challenges

• Transformation into a specialized pharmaceutical company.
• Unfavorable generic product market due to price cutting and competition.

Mitigation Strategies

• Focusing research and development on innovative products (small molecule original drug research, biosimilars, gynaecological disorders).
• Shifting market sales away from generic products towards innovative products.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Cost-effective and ethical operation
• Preference for suppliers with well-functioning quality assurance systems.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI G4 Guidelines

Certifications: ISO 14001 (Budapest, Dorog, Debrecen)

Third-party Assurance: Alternate Kft.

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Product liability and consumer safety
• Business ethics
• Responsible employment
• Responsible supply chain
• Product development and the availability of pharmaceutical products
• Health and safety of our employees
• Environmental protection
• Social programmes
• Economic success

Environmental Achievements

• Reduced annual animal use in experiments to 32% of the 2010 number by 2019.
• ISO 14001 certified Environmental Management System in place at Budapest and Dorog production sites since 2001, and Debrecen since 2016.
• Significant investments in groundwater treatment, wastewater treatment, emergency storage, noise prevention and warehousing.

Social Achievements

• Richter Health City program: 187,000 participants collected HUF 379 million in donations in 75 cities.
• Richter for Women program launched initiatives focusing on women's social recognition, starting life anew, and conscious family planning.
• Received 400 secondary school and university students as part of a traineeship program.

Governance Achievements

• Extended Global Compliance Programme to affiliates in Latin America and CIS countries.
• Established a Compliance Hotline for reporting ethical violations.
• Gedeon Richter Plc. selected as Compliance Innovator of Lexology 2019.

Climate Goals & Targets

Environmental Challenges

• Increased pressure to improve cost efficiency in original research.
• Retaining an increasingly mobile workforce and growing demand for flexible employment options.
• Accelerated competition in the labor market for skilled workers.

Mitigation Strategies

• Refined research focus on symptomatic treatment of psychiatric diseases.
• Introduced Home Office, flexible work schedules, and part-time employment opportunities.
• Simplified and shortened the recruitment process, using online advertising platforms, and developed a management staff training program.

Supply Chain Management

Responsible Procurement

• Procurement Policy (published in 2016)

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards

Certifications: ISO 14001 (Budapest, Dorog, Debrecen)

Third-party Assurance: Alternate Consulting

UN Sustainable Development Goals

• Goal 3: Good Health and Well-being

Mission is closely linked to ensuring access to safe, affordable, high-quality and effective medicines.

Awards & Recognition

• Compliance Innovator of Lexology 2019
• Most Attractive Employer 2019 Award (PwC survey)

Environmental Metrics

ESG Focus Areas

• Product liability and consumer safety
• Business ethics, anti-corruption and responsible marketing
• Responsible supply chain
• Product development and access to pharmaceutical products
• Health and safety of our employees
• Climate change and environmental protection
• Employees and employer brand, stable employment and equal opportunities
• Protection of human and labour rights
• Social programmes
• Economic performance

Environmental Achievements

• 73% of waste is recycled.

Social Achievements

• Most Attractive Workplace Award in the pharmaceutical category of the PwC Career Choice Survey in Hungary.
• HUF 2 billion spent to support healthcare, education and women-focused projects.
• Ratio of women in middle management is 44%.

Governance Achievements

• Introduced Compliance & Data Privacy Dotted Line Reporting to increase transparency of compliance and data privacy activities of subsidiaries.
• Added Conflict of Interest and Business Secrets policies to the Global Compliance Programme.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting business continuity, supply chains, and global logistics.
• Increased risks in sourcing raw materials, protective equipment, and other materials due to pandemic restrictions.

Mitigation Strategies

• Vertically integrated business model reducing reliance on disrupted long supply chains.
• Implemented measures to reduce infection risk among staff, including remote work and provision of protective equipment.
• Developed and produced remdesivir in record time to treat COVID-19 patients.
• Donated HUF 140 million to hospitals in Hungary.

Supply Chain Management

Supplier Audits: 19 audits in 2020 (10 face-to-face)

Responsible Procurement

• Updated Procurement Policy in 2020
• Strengthened environmental aspects of the Supplier Rating System

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards (Core level)

Certifications: ISO 14001 (Budapest and Dorog production sites), ISO 45001 (Budapest, Vecsés, Dorog, GR Romania)

UN Sustainable Development Goals

• SDG 3: Good health and well-being

Contributions to other SDGs are described in relevant chapters.

Awards & Recognition

• Gold Prize in HRKOMM Award 2020
• Main prize in the general category of HRKOMM Award 2020
• Most Attractive Workplace Award (PwC)
• Loveable Workplaces Award

Environmental Metrics

ESG Focus Areas

• Good Health and Well-being
• Environmental Protection
• Social Responsibility
• Corporate Governance

Environmental Achievements

• Reduced energy consumption by 26.2K GJ
• 78% reduction in sewage sludge emissions at the Dorog site
• 66% recovery rate of waste (both hazardous and non-hazardous) in Hungary
• Established waste management in offices at all three Hungarian sites

Social Achievements

• Provided 5.82 million emergency contraception pills to people in need
• HUF 1.9+ billion spent on social engagement, supporting health and educational institutions
• Launched attitude shaping project to improve company culture and employee well-being
• Introduced the ‘Balance’ programme to support employees’ physical and mental well-being

Governance Achievements

• Established a three-person ESG Subcommittee in December 2021 to monitor ESG requirements
• Implemented a dedicated IT system (Virtual Compliance Officer) to comply with EU Directive 2019/1937 on whistleblower protection
• Implemented a Global Conflict of Interest Policy at group level
• Reviewed the “Internal Rules On The Management Of Compliance Reports”

Climate Goals & Targets

Environmental Challenges

• Data collection for Scope 3 emissions
• Retaining an increasingly mobile workforce
• Growing gap between school knowledge and employer expectations
• Risk of energy supply disruption
• Global supply chain risks
• Risk linked to climate change

Mitigation Strategies

• Developing a new energy strategy with a significant role for renewable energy
• Active presence at job fairs and workshops, internship programs
• Cooperation with educational institutions
• Modernisation programmes to reduce energy consumption
• Supplier Qualification System to ensure compliance with sustainability principles
• Integrating ESG considerations into the incentive scheme for managers

Supply Chain Management

Supplier Audits: 37 audits in 2021

Responsible Procurement

• Procurement Policy updated in 2020, outlining principles related to economic interests, corporate governance, and sustainability

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards, SASB Standards (elements)

Certifications: ISO 14001 (Budapest, Dorog, Debrecen sites)

Third-party Assurance: None

UN Sustainable Development Goals

• SDG 3: Good Health and Well-being

Richter's core business contributes to SDG 3 through disease treatment and improved quality of life. Initiatives also contribute to SDG 3.4.1, 3.7.2, and 3.8.3.

Awards & Recognition

• Loveable Workplaces Award
• Most Attractive Workplace Award
• Innovation Grand Prize
• CSR Project of the Year

Environmental Metrics

ESG Focus Areas

• Responsible Energy Use
• Well-being of our Employees
• Business Ethics and Compliance

Environmental Achievements

• Energy consumption reduced by 11% at Hungarian sites
• Reduced water use by 7% at Group level
• GHG emissions decreased by 6% compared to 2021 at Group level
• Increased the proportion of waste recycled by 14% compared to 2021

Social Achievements

• Balance programme continued, with a range of recreational and workplace programmes for our employees
• Introduced new compensation elements to ensure that our employees continue to be recognised and properly remunerated in 2022
• Presented the Richter for Society Award for the first time, recognising the community work of our employees

Governance Achievements

• Compliance function increasingly operating independently from the legal department, with the aim of supporting transparent operations
• Group-wide risk assessment project launched along the entire compliance manual, involving 32 subsidiaries
• Monitoring and preparing for ESG legislation are becoming an increasing focus of our operations

Climate Goals & Targets

Environmental Challenges

• Military conflict between Russia and Ukraine affected our company both directly and indirectly
• Disruption in the supply chain
• High inflation environment

Mitigation Strategies

• Successfully resolved the disruption in the supply chain
• Provided assistance in the conflict-affected areas (housing and employment in Hungary, medicine donations)
• Introduced new compensation elements to offset inflation

Supply Chain Management

Supplier Audits: 58

Responsible Procurement

• Procurement Policy (cost-effectiveness, quality, legal compliance, competition law, integrity, anti-corruption, confidentiality, data protection, sustainability)

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Standards (2021) ‘with reference to’ compliance level

Certifications: ISO 50001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 3: Health and well-being

Manufacturing pharmaceuticals, awareness-raising campaigns on mental illness, women's healthcare products, educational activities, affordable generic and biosimilar products

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• OPTEN Stability Award
• PwC - “the most attractive pharmaceutical employer”
• Zynternship Awards
• HRKOMM Award
• Lovable Workplaces Award

Environmental Metrics

ESG Focus Areas

• Health and well-being (SDG 3)

Environmental Achievements

• Greenhouse gas emissions at Hungarian sites decreased by a further 7.5%
• Introduced carbon footprint calculation at all key subsidiaries

Social Achievements

• Launched a culture change project to create a modern and attractive working environment
• Balance Programme awarded "HR Project of the Year in the industry"
• R&D turnover rate of 7.6% (good compared to market benchmark of 17.2%)
• Implemented a base salary increase and increased fringe benefits to address inflation

Governance Achievements

• Launched Compliance monitoring project to assess compliance awareness and risks
• No confirmed incidents of corruption in 2023

Climate Goals & Targets

Environmental Challenges

• Wage competition for workers in niche professions intensified by high inflation
• Generational shift in workforce requiring skilled replacements
• Environmental impact of wastewater, air pollutants, and waste from pharmaceutical manufacturing

Mitigation Strategies

• Active involvement in job fairs and professional events to attract young talent
• Internships and apprenticeship programs
• Continuous monitoring and minimization of water usage and pollutant content in effluent
• Improved recyclable waste collection system and centralized waste management system

Supply Chain Management

Supplier Audits: 88 audits

Responsible Procurement

• Updated Procurement Policy (2020) includes sustainability criteria: environmental protection, human rights, anti-corruption, data protection

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Universal Standards 2021

Certifications: ISO 50001 (Energy Management System), ISO 45001:2018 (Occupational health and safety management system - Hungarian and Romanian sites)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 3: Health and well-being

Manufacturing pharmaceuticals that cure diseases and improve quality of life

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• PwC Awards - Most attractive employer (Pharmaceutical industry)
• Zynternship Awards (Medical and Health Sciences, Natural Sciences)
• Dreamjo.bs portal - Lovable workplaces
• Randstad Award (Pharmaceutical and chemical industry)
• Factory of the Year Project competition - HR Project of the Year
• Blood donor-friendly workplace
• Extremely family-responsive place