Climate Change Data

Environmental Metrics

ESG Focus Areas

• People
• Planet
• Product

Environmental Achievements

• Offset Scope 1 & 2 UK emissions for 2021
• 65% reduction in Scope 1 & 2 emissions (versus 2018 baseline) by 2025 target set
• Net zero (90% absolute reduction) by 2030 target set for Scope 1 & 2 emissions

Social Achievements

• 80 new heads brought into the business in 2022 – 18 of which were in newly created roles
• New UK graduate and industry placement schemes rolled out
• High levels of employee engagement maintained with increased GPTW survey participation and trust index ratings; additional certifications achieved in US and France
• First all-employee conference held
• More targeted approach to online compliance training, driving an increase in course completion rates
• Compliance training provision further enhanced through partnering with new external providers
• Partner code of conduct published

Governance Achievements

• Integrated climate governance into existing corporate governance structures
• Created a stand-alone climate risk management framework and integrated it into wider business risk management processes

Climate Goals & Targets

Environmental Challenges

• Reducing the environmental impact of product packaging (particularly blister packs containing non-recyclable PVC)
• Developing Scope 3 emissions reduction targets
• Climate-related risks impacting operations and supply chain (flooding, heatwaves, wildfires, sea level rise, water stress)
• Transition risks (increased regulation, carbon pricing, changing consumer preferences, etc.)

Mitigation Strategies

• Initiated pilot projects to explore more sustainable packaging options (plastic tubes, rigid packaging, blister packs)
• Embedding ownership of product-related emissions within functional areas
• Methodology improvements to increase accuracy of emissions measurement
• Climate scenario analysis and risk assessment to understand climate-related risks
• Developing relationships with partners to support knowledge sharing on climate risks and opportunities
• Extending climate risk analysis to other key partners in the value chain
• Setting Scope 1 & 2 emissions targets

Supply Chain Management

Responsible Procurement

• Partner code of conduct published
• Obtaining confirmation from CMOs that they comply with ethical standards
• Tightening processes around modern slavery

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Heatwaves/extreme heat
• Wildfires
• Rising mean temperatures
• Sea level rise
• Water stress

Transition Risks

• Increased regulation due to climate change
• Increase in carbon pricing
• Mandates on and regulation of existing products and services
• Increased cost of energy and materials
• Changing consumer preferences
• Increased stakeholder concern damaging reputation
• Substitution of existing products with lower emissions alternatives
• Costs to transition to lower emissions technology

Opportunities

• Development of new products or services
• Use of lower-emission sources of energy

Reporting Standards

Frameworks Used: TCFD

Environmental Metrics

ESG Focus Areas

• People
• Planet
• Product

Environmental Achievements

• 48% reduction in Scope 1 and 2 emissions (versus 2018 baseline), on track to meet interim 65% reduction target by 2025 and achieve net zero in 2030. Scope 3 emissions target set to achieve net zero by 2044 (versus 2022 baseline), with an interim reduction target of 25% by 2030.
• Nizoral™ manufacturing moved from Belgium to Thailand driving cost savings, improving on-time-in-full order delivery and reducing carbon emissions.

Social Achievements

• Re-certified as a Great Place To Work® in UK, US, China and Singapore.
• Launched our Employee Code of Conduct, continued to embed our Partner Code of Conduct and strengthened our suite of policy documents.
• Introduced a new, more comprehensive programme of online compliance training to upskill our employees and contractors.
• Entered a three-year partnership with the social enterprise Slave Free Alliance (“SFA”) to safeguard individuals across our business from modern slavery and human trafficking, including those in our supply chain.

Governance Achievements

• Strengthened Board of Directors with appointment of Jeyan Heper, Martin Sutherland, Richard McKenzie and Eva-Lotta Sjöstedt. Post year end appointments of new Independent Chair, Camillo Pane and new CEO, Nick Sedgwick.
• Successful appeal of Competition and Markets Authority decision clearing Alliance, Peter Butterfield and John Dawson (former CEOs) of any wrongdoing.

Climate Goals & Targets

Environmental Challenges

• Challenging H1 performance due to unexpected regulatory issues causing manufacturing delays in certain smaller products and Amberen™ sales hampered by industry-wide challenges on Amazon.
• Amberen™ revenues weaker than anticipated.
• Less favourable product mix and increase in warehouse and distribution costs impacting gross profit growth.
• Counterfeiting and illicit trade of Kelo-Cote™ in China.
• Regulatory transition from the European Medical Device Directive (“MDD”) to the Medical Device Regulation (“MDR”) impacting supply of certain products.

Mitigation Strategies

• Colleagues worked hard to address regulatory issues to ensure all products were back in stock by year-end.
• Strong consumer demand for Kelo-Cote™ drove restocking in H2 and consumer activation campaigns delivered market share gains for Nizoral™.
• Strengthening internal and external capabilities in ecommerce and digital marketing to mitigate future problems on Amazon.
• Substantially reduced counterfeiting of Kelo-Cote™ in China through security measures.
• Painstaking work from cross-functional team to resolve MDR transition issues, with all affected products back in stock.
• Robust control of actively managed costs decreased operating costs by 5%.

Supply Chain Management

Supplier Audits: 93% of CMOs managed by our sourcing team have either signed up to our Partner Code of Conduct or provided us with a copy of their equivalent code.

Responsible Procurement

• Partner Code of Conduct
• Slave Free Alliance partnership
• Modern Slavery Statement
• Three-year anti-slavery strategy and action plan
• Supplier lifecycle due diligence review

Climate-Related Risks & Opportunities

Physical Risks

• Increased frequency and severity of flooding

Transition Risks

• Regulatory changes
• Market shifts towards sustainable products

Opportunities

• Use of lower-emission energy sources
• Increased demand for sustainable products and services
• Enhanced reputation as a market leader in climate action

Reporting Standards

Frameworks Used: TCFD

Certifications: Great Place To Work®

Sustainable Products & Innovation

• New packaging for Nizoral™ Derma Daily

Awards & Recognition

• Best communication of Sustainability in the small cap category from the IR Society