Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Decreased emissions intensity by 4% from 2017 to 2019.
• Reduced water intake intensity by 5% from 2017 to 2019.
• Reduced solid waste intensity by 87% from 2017 to 2019.
• Increased recycling rate of solid waste by 14% from 2017 to 2019.

Social Achievements

• Launched various employee development programs including Your Development Matters, mentoring programs, and Opportunity Finder.
• Introduced fully paid U.S. Parental Leave in 2020.
• Confirmed no material pay gaps based on gender or race/ethnicity in 2020.
• Achieved 90% employee engagement rate in the first wave of the 2020 survey.

Governance Achievements

• Established a new Head of Sustainability position.
• Expanded the charter of its Compensation Committee to include responsibility for overseeing talent development, diversity and inclusion, and employee engagement programs and policies.
• Maintained a comprehensive Code of Conduct and annual training for colleagues.

Climate Goals & Targets

Environmental Challenges

• Potential negative impacts of climate change on operations and customer operations.
• Increased absolute emissions due to increased product demand.

Mitigation Strategies

• Investment in high-efficiency equipment and renewable energy.
• Optimizing operating processes and implementing efficiency measures.
• Adopting remote working practices and providing options for electric/hybrid cars.
• Robust risk assessment and mitigation processes for environmental impacts.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• More severe weather events
• Population displacement
• Higher temperatures impacting livestock

Transition Risks

• New or expanded laws and regulations

Opportunities

• Reductions in operating costs
• Increased demand for innovative products
• Increased need for new medicines
• Increased revenues from new markets

Reporting Standards

Frameworks Used: SASB Health Care – Biotechnology & Pharmaceutical industry standards, TCFD recommendations

Certifications: ISO 14001 (two sites)

Environmental Metrics

ESG Focus Areas

• Diversity, Equity and Inclusion (DE&I)
• Sustainability
• Employee well-being
• Environmental, Health and Safety (EHS)

Environmental Achievements

• Reduced environmental footprint through various initiatives (Specific quantified achievements are not explicitly stated in the report.)
• Incurred $8 million in environmental-related capital expenditures and $18 million in other environmental-related expenditures in 2022 for compliance and cleanup.

Social Achievements

• Decreased voluntary attrition rate from 11% in 2021 to 10% in 2022.
• Offered DE&I training globally to all employees in 2022.
• Continued to offer enhanced childcare benefits and flexible work arrangements.
• Maintained high employee engagement rate (88% in 2022).

Governance Achievements

• Human Resources Committee oversees talent development, DE&I, and employee engagement.
• Quality and Innovation Committee reviews employee health and safety metrics.
• Voluntary disclosure to OFAC and the U.S. Department of Justice regarding transactions potentially violating the Iranian Transactions and Sanctions Regulations.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to strong demand and competition for manufacturing inputs.
• Increased regulatory scrutiny over the impact of animal health products on the environment.
• Potential environmental liabilities relating to current and former properties.
• Global economic conditions, current economic downturn, and high inflation.
• Changing distribution channels for companion animal products.
• Increased competition from generic products.
• Climate change impacts on business and customer operations.
• Data privacy compliance with continually changing laws and regulations.

Mitigation Strategies

• Supply chain optimizations, controlled launches for new products, and customer coordination.
• Necessary expenditures for compliance with environmental, health, and safety laws and regulations.
• Ongoing monitoring of liquidity position.
• Investments in information technology and digital capabilities.
• Product pricing adjustments to mitigate inflationary challenges.
• Efforts to manage foreign exchange risk through operational means and financial instruments.
• Procedures to monitor and limit exposure to credit and collectability risk and defensive measures against cyberattacks.
• Processes, systems, and dedicated resources for regulatory compliance.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Altered rainfall distribution and intensity
• Prolonged droughts or flooding
• Increased wildfires
• Rising sea levels
• Rising heat index

Transition Risks

• Regulatory changes
• Consumer preferences

Environmental Metrics

ESG Focus Areas

• Sustainability
• Workplace Culture
• Community Investment
• Animal Welfare

Environmental Achievements

• Zoetis’ Global Manufacturing and Supply team is taking action to replace plastic packaging with paperboard, starting with our rabies vaccine packaging.

Social Achievements

• Zoetis Foundation distributed $8.3 million in grants to support programs that advance opportunities for veterinarians and farmers around the world.
• Partnered with the U.S. Department of Agriculture and the Fish & Wildlife Service to provide vaccines against highly pathogenic avian influenza to help preserve endangered California Condors.
• Partnering with Adopt a Pet (AAP), North America’s largest online pet adoption community, with a nearly $1 million annual investment to improve access to care for shelter pets.
• Zoetis earned recognition in markets around the world including “best” workplace for innovators, for working parents, for LGBTQ+ colleagues, and for multicultural women.
• Zoetis was named a recipient of the 2024 Catalyst Award for advancing equity for women and other underrepresented groups across the company.

Governance Achievements

• Established a formal AI governance policy and process to safeguard privacy, information security and intellectual property.

Climate Goals & Targets

Environmental Challenges

• Geopolitical and economic uncertainties
• Student loan debt for veterinary professionals
• Mental health challenges for veterinary professionals
• Lack of diversity in veterinary fields

Mitigation Strategies

• Supply chain improvements
• Zoetis Foundation grants funded 28 initiatives in 2023 for veterinary and farmer education, livelihood and wellbeing programs, while also supporting humanitarian relief and a U.S. matching gifts program.
• Investing in colleague development and engagement, including People Leader training and a new mobile application.

Supply Chain Management

Responsible Procurement

• Optimized indirect procurement to improve cost and reliability of vendors and products.

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Rabies vaccine packaging made from paperboard.

Awards & Recognition

• Newsweek’s list of Most Responsible Companies
• ESG Investing’s Best Company for ESG & Sustainability in the health care category
• DiversityInc’s list of Noteworthy Companies and Best Companies for Board of Directors