Climate Change Data

Environmental Metrics

ESG Focus Areas

• Occupational health, safety, and environment management
• Corporate social responsibility
• BBBEE (Broad-Based Black Economic Empowerment)
• Sustainability

Environmental Achievements

• South African sites achieved ISO 14001 and OHSAS 18001 certifications.
• Aspen Bad Oldesloe site maintained ISO 14001 and OHSAS 18001 certification.

Social Achievements

• Nelson Mandela International Day reached approximately 9,400 beneficiaries.
• Aspen played a leading role in forming the Public Healthcare Enhancement Fund in South Africa.
• Aspen became an active participant in the United Nations Global Compact.

Governance Achievements

• Aspen’s Sustainability Report was externally assured for the first time.
• Further incremental enhancements were made to the Group’s governance processes, including the appointment of Regional Ethics Officers.

Climate Goals & Targets

Environmental Challenges

• Intense competition in the global pharmaceutical market.
• Stringent regulation and application of quality standards.
• Market diversity increasing variability of customer expectations and supply chain complexities.
• Delayed approval of API source changes.
• Evolving regulatory requirements and product regulations.
• Advent of the Falsified Medicines Directive in Europe.
• Publication of European Union distribution guidelines.
• Divergent Human Resource practices and SHE standards throughout the Group.
• Lack of an integrated Human Resources Management System.
• Onerous reporting and disclosure requirements in respect of Aspen’s corporate citizenship.
• Acquired businesses come with their own organizational cultures requiring alignment with Aspen’s culture.
• Completion of proposed transactions subject to conditions precedent, including approval of various competition authorities.
• Revised Department of Trade & Industry’s BBBEE Codes may lead to a less favorable BBBEE rating.

Mitigation Strategies

• Various transactions to increase product offering and geographic coverage.
• Group supply chain head appointed to review and manage efficiency and integrity of the global supply chain.
• Group supply chain portal commissioned for enhanced communication.
• Group Quality Department established to monitor and manage quality risk.
• Remediation plans implemented to prevent recurrence of product recalls.
• Proactive material sourcing.
• Approximately 400 specialist sales personnel to transfer to Aspen for direct promotion of products.
• Over 300 new commercial employees to support acquired infant nutritional business.
• Sales teams in Brazil, Mexico, and Venezuela to be increased.
• Direct promotion of Aspen’s products increased in several markets.
• Development centre established in India to enhance capacity to maintain intellectual property cost-effectively.
• Supply chain automation project to improve supply chain efficiencies.
• Addressing divergent Human Resource practices and SHE standards.
• Change management programs to assist in the integration of acquired businesses.
• Embedding principles of good corporate governance in business practices.
• Mandela Day initiative retained as an annual event.
• Building infrastructure and resources ahead of completion of proposed transactions.
• Divestiture of non-core products/businesses to be considered.

Supply Chain Management

Responsible Procurement

• Centralised procurement leading to benefits in sourcing raw materials and products

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI (Global Reporting Initiative) B+ application level, King III

Certifications: ISO 14001, OHSAS 18001, ISO 22000, HACCP

Third-party Assurance: Environmental Resources Management, PricewaterhouseCoopers Inc.

Awards & Recognition

• Best generics manufacturer (Soweto General Practitioner Confidence Predictor survey)
• Generic Supplier of the Year (Sigma Supplier Awards)
• Supplier of the Year 2013 Award (Discount Drug Store)
• Generic Supplier of the Year Award (Inaugural Sigma Supplier Awards)
• Kidspot Best Baby Formula award (Australian parents)
• President’s Manufacturer of the Year Award (Tanzania)
• Golden Arrow Award (PMR.africa)
• Ireland INC Foreign Direct Investment 100 honorees
• Supplier of the Year award (Dis-Chem)
• Best Corporate Web Page (Aspid Award)

Environmental Metrics

ESG Focus Areas

• Sustaining life and health through high-quality, affordable medicines
• Adding economic value to stakeholders
• Maintenance of financial health
• Sustaining a cost-competitive manufacturing base
• Providing a safe working environment
• Promoting equality
• Creating an environment in which our employees can thrive
• Contributing to the enhancement of healthcare, education and basic needs in communities
• Preserving the environment
• Managing the efficient utilisation of scarce resources
• Conducting our business in a responsible manner

Environmental Achievements

• Aspen Bad Oldesloe uses 100% renewable energy
• Improved waste recycling (883% increase, largely due to inclusion of new facilities)

Social Achievements

• Supported 263 socio-economic development (SED) projects valued at R20.5 million
• Launched Women in Leadership Programme
• Launched dairyman learnership programme including learners with disabilities
• Increased investment in employee training (63% increase)

Governance Achievements

• Continued compliance with JSE’s SRI index
• Executive compensation linked to financial, social, environmental, and governance aspects

Climate Goals & Targets

Environmental Challenges

• Increased global economic pressure (volatile currency markets, price reductions, heightened regulation)
• Aging infrastructure at Moleneind and Boxtel sites in the Netherlands leading to safety and environmental compliance risks
• Soil contamination at Moleneind site (responsibility retained by previous owner, MSD)
• Spills at Moleneind site
• Changes to BBBEE Codes in South Africa impacting scorecard
• High staff turnover in some regions
• Electricity shortages in South Africa impacting manufacturing
• Water scarcity and aging infrastructure impacting water supply consistency

Mitigation Strategies

• Capital expansion projects in South Africa, France, and the Netherlands to improve supply chain and reduce costs
• Divestment of non-core brands and molecules
• Implementation of formal SHE management systems
• Proactive engagement with stakeholders and authorities in the Netherlands
• Revised transformational objectives and programs in South Africa to address BBBEE Code changes
• Interventions to address high staff turnover rates
• Energy conservation initiatives (e.g., LED lighting, SCADA system)
• Water conservation initiatives (e.g., water recycling, leak prevention)

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Procurement from accredited and authorized suppliers meeting quality, regulatory, and Aspen-specified requirements
• Suppliers bound by Aspen’s Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI G3.0, JSE’s Socially Responsible Investment (SRI) index, International Integrated Reporting Council’s Framework, UN Global Compact

Certifications: OHSAS 18001 (selected sites), ISO 14001 (selected sites), ISO 50001 (Aspen Bad Oldesloe)

Third-party Assurance: Environmental Resources Management (Pty) Limited (ERM), PricewaterhouseCoopers Inc. (PwC)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Access to high quality, affordable medicines
• Integrated supply chain
• Employee well-being
• Corporate citizenship
• Sustainable economic value

Environmental Achievements

• 4.5% of waste generated sent to landfill, a reduction from 6.2% in 2016
• An estimated 97,000 kℓ of water saved through resource efficiency projects
• 8% increase in waste recycled

Social Achievements

• 84% participation rate in the global employee engagement survey
• R49.5 million invested in employee training
• 49% women in the workforce
• Zero work-related fatalities
• Maintained Level 4 BBBEE rating in South Africa
• More than 250 SED projects completed

Governance Achievements

• New Group Code of Marketing Practice rolled out
• 9,242 employees signed the Aspen Code of Conduct
• Improved rating on the JSE/FTSE Responsible Investment Index

Climate Goals & Targets

Environmental Challenges

• Pricing of oncology products under scrutiny
• Currency headwinds, price erosion, and constrained nutritionals sales
• Supply chain constraints
• Competition from biosimilars, generics, and oral products
• Challenges in transitioning the manufacture of Thyrax
• Changes in European distribution model
• Loss of Venezuelan volumes and Chinese regulatory restrictions on sales from Australia
• Increased scrutiny on pricing from competition authorities
• Supply shortages of mature products
• Evolving pharmaceutical regulations and stringent quality standards
• Competition in the global pharmaceutical market
• Volatile geopolitical and economic conditions
• Complexity of integrating acquired businesses
• Challenges in the Chinese market

Mitigation Strategies

• Proactive engagement with authorities in investigations
• Synergy projects to offset headwinds
• Focus on manufacturing efficiency and working capital management
• Strategic advantage from vertically integrated supply chain
• Progress in stabilizing API production of synthetic estrogens
• Improved supply chain in Latin America
• Reshaping portfolio in Australia to focus on value-adding brands
• Increased capacity in manufacturing facilities
• Upgrading older medicines to meet modern regulatory requirements
• Product and geographic diversification
• Focus on niche speciality pharmaceuticals
• Strong corporate governance, high ethical standards, and stakeholder-inclusive approach
• Initiatives to streamline global product portfolio
• New global HR strategy
• Continued investment in skills development
• Phased approach to ISO certification
• Reduction in chemical activity at Moleneind facility in Oss
• Full cooperation with competition authorities
• Continued investment in manufacturing capacity
• Focus on cost containment initiatives
• Strategic initiatives to diversify market risks, currency risks, and product risks
• Leveraging existing sales force and sterile manufacturing capabilities
• Strategic review of Nutritionals business
• Leveraging HPC launch in the USA and synthetic estrogen launch

Supply Chain Management

Responsible Procurement

• Aspen Supplier Code of Conduct
• Ethical and human rights standards

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, King IV

Certifications: OHSAS 18001 (75% of primary manufacturing facilities and 29% of API facilities), ISO 14001 (75% of primary manufacturing facilities and 29% of API facilities)

Third-party Assurance: ERM, PwC, Group Internal Audit, Empowerdex

Environmental Metrics

ESG Focus Areas

• Sustaining life and health through high quality, affordable medicines
• Sustaining a cost-competitive manufacturing base
• Creating an environment in which our employees can thrive
• Promoting equality
• Conducting our business in a responsible manner
• Preserving the environment
• Adding economic value to stakeholders

Environmental Achievements

• Reduced carbon emissions (Specific figures not readily available in the provided text, further data needed)
• Recycled 80,973 tonnes of waste (2018)

Social Achievements

• BBBEE accreditation Level 4 in South Africa (2018)
• Socio-economic development (SED) spend of R19.0 million (2018)

Governance Achievements

• Number of significant legislative infringements: 0 (2018)
• FTSE/JSE Responsible Investment Index score: 4.0 (2018)

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: International Integrated Reporting Framework, GRI, King IV, Companies Act of South Africa, Department of Trade and Industry’s BBBEE Codes of Good Practice, FTSE/JSE Responsible Investment Index, Carbon and Water Security Disclosure Projects, UN Global Compact

Certifications: Null

Third-party Assurance: Environmental Resources Management (Pty) Limited (ERM), Empowerdex, PricewaterhouseCoopers (PwC)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Water Security

Environmental Achievements

• Reduced Scope 3 emissions from water supply services by 9%
• Reduced Scope 3 emissions from fuel-and-energy-related activities by 6%
• Reduced Scope 3 emissions from waste generated in operations significantly due to correction of a conversion error
• Reduced Scope 3 emissions from business travel significantly due to travel restrictions during the COVID-19 pandemic
• Reduced Scope 3 emissions from upstream leased assets by 22%
• A slight reduction of 1% in total waste generated

Social Achievements

• Not disclosed

Governance Achievements

• Board-level oversight of climate-related issues
• Establishment of a Group Risk and Sustainability function
• Development of a sustainability materiality assessment survey

Climate Goals & Targets

Environmental Challenges

• Increased indirect (operating) costs due to carbon pricing mechanisms in South Africa
• Increased capital expenditures due to the phase-out of refrigerants with high global warming potential
• Decreased access to capital due to increased stakeholder concern and negative stakeholder feedback

Mitigation Strategies

• Remaining abreast of legislative changes and implementing monitoring and control measures to minimize GHG emissions
• Replacing existing units with new units that use alternative refrigerants or converting existing units
• Developing a clear position statement, absolute targets for emissions reduction, and a climate action strategy

Supply Chain Management

Supplier Audits: 0%

Responsible Procurement

• Aspen Code of Conduct for Suppliers and Service Providers

Climate-Related Risks & Opportunities

Physical Risks

• Reduced precipitation and rising temperatures impacting water supply and security

Transition Risks

• Introduction of a carbon pricing system in South Africa and other jurisdictions
• Future potential requirements for carbon labelling

Opportunities

• Use of more efficient production and distribution processes
• Use of supportive policy incentives (e.g., tax refunds in Germany)
• Use of lower-emission sources of energy (e.g., solar energy)

Reporting Standards

Frameworks Used: TCFD, GHG Protocol

Certifications: ISO 14001, ISO 50001

Third-party Assurance: Aspen SD Assurance Statement 2021.pdf

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Safety
• Environmental
• Social
• Governance

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: AA1000AP (2018), UN Global Compact, OECD Guidelines, SASB, UN SDGs

Third-party Assurance: IBIS Environmental Social Governance Consulting Africa (Pty) Ltd

UN Sustainable Development Goals

• Eight of the SDGs that most closely align with Aspen’s business have been adopted and reported on for FY2021

Environmental Metrics

ESG Focus Areas

• Access to medicines
• Health security
• Patient safety
• Responsible advocacy and lobbying
• Responsible marketing
• Reliable supply of quality products
• Responsible product portfolio
• Diversity, equity and inclusion
• Employee health and safety
• Employee well-being
• Fair compensation
• Labour rights
• Workforce development
• Human rights
• Ethical business culture
• Compliance
• Corporate governance
• Transformation and economic inclusion (B-BBEE in South Africa)
• SED and investment in communities
• Economic value generated and distributed
• Fair taxation
• Responsible supply chain management
• Data privacy and information security
• Climate change and greenhouse gas emissions
• Energy efficiency
• Waste
• Water and effluent

Environmental Achievements

• 10% reduction in Scope 1 emissions
• 22% reduction in Scope 2 emissions
• 5% reduction in water withdrawn
• 80% of waste generated recycled

Social Achievements

• Women in top management roles increased to 34%
• R27.9 million invested in 355 socio-economic development projects
• Zero occupational fatalities since 2013
• Global employee engagement survey conducted with 68% response rate

Governance Achievements

• Strengthened Group Ethics and Compliance programme
• “B- Management” performance rating for 2021 Carbon Disclosure Project for Climate Change (“CDP-CC”) and “B Management” Carbon Disclosure Project for Water Security (“CDP-WS”)

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to COVID-19 and the fire at Alphamed facility
• Geopolitical situation in Russia/Ukraine
• Renewed lockdown in China impacting product demand
• Inflationary pressures and downward pressure on selling prices
• Evolving pharmaceutical regulations and stringent quality standards

Mitigation Strategies

• Strategic investment in inventory to mitigate supply risks
• Strong cost management controls
• Diversified product portfolio and geographical footprint
• Implementation of integrated business planning process
• Investment in sterile manufacturing capacity

Supply Chain Management

Responsible Procurement

• Aspen Code of Conduct for Suppliers and Service Providers
• Preferential procurement for B-BBEE recognized suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters
• Water scarcity

Transition Risks

• Changes in regulations to accelerate climate action

Opportunities

• Reduce carbon footprint
• Increase efficiencies in using scarce natural resources
• Build resilience against physical impacts

Reporting Standards

Frameworks Used: IFRS, IFRS Foundation International Framework, King IV Report on Corporate Governance™, JSE Listings Requirements, GRI Sustainability Reporting Standards, SASB, TCFD, JSE’s Sustainability Disclosure Guidance, UN Global Compact

Certifications: ISO 14001:2015, ISO 45001

Third-party Assurance: Ernst & Young Inc, IBIS Environmental Social Governance Consulting Africa (Pty) Ltd, Empowerdex, Internal Audit

UN Sustainable Development Goals

• SDG 3
• SDG 5
• SDG 6
• SDG 7
• SDG 8
• SDG 12
• SDG 13
• SDG 17

Aspen's initiatives contribute to these goals through actions aligned with material sustainability topics.

Sustainable Products & Innovation

• Eikance eye drops

Awards & Recognition

• 9th place in EY Excellence in Integrated Reporting Awards
• Transparency and Reporting Award in South African WEP Awards
• Finalist in Inclusive Workplace category in South African WEP Awards
• Economic Diplomacy (Global) Ubuntu Award
• Top Graduate Employer for the Pharmaceutical Sector in BP Students’ Choice Awards
• PMR.Africa Diamond Award
• President’s Manufacturer of the Year Award 2020
• Best on Corporate Sustainability Initiatives in Social Impact/CSR awards 2021
• Marketing Excellence Award

Environmental Metrics

ESG Focus Areas

• Access to medicines
• Health security
• Patient safety
• Reliable supply of quality products
• Responsible advocacy
• Responsible marketing
• Responsible product portfolio
• Diversity, equity and inclusion
• Employee health and safety
• Employee well-being
• Fair compensation
• Labour rights
• Workforce development
• Compliance
• Corporate governance
• Data governance
• Economic value generated and distributed
• Ethical business culture
• Fair taxation
• Human rights
• Responsible supply chain management
• SED and investment in communities
• Transformation and economic inclusion (B-BBEE in South Africa)
• Climate change and greenhouse gas emissions
• Energy efficiency
• Resource use and waste
• Water and effluent
• Responsible advocacy
• Responsible supply chain management
• Biodiversity and abundance
• Health system strengthening
• Pharmaceuticals in the environment
• Product environmental stewardship
• Animal welfare
• Clinical trial conduct

Environmental Achievements

• Reduced Scope 1 emissions from 48,095 tCO2e in 2019 to 37,424 tCO2e in 2023
• Increased waste recycled from 58,821 tonnes in 2020 to 60,976 tonnes in 2023
• Achieved 86% waste recycled as a percentage of waste generated in 2023

Social Achievements

• Launched various SED projects supporting clinics, community upliftment, education and training, healthcare, and Mandela Day initiatives.
• Maintained a relatively stable average staff turnover rate around 14%.

Governance Achievements

• Maintained high governance and ethical standards, reflected in a FTSE/JSE Responsible Investment Index score of 3.6 in 2023.
• Incorporated sustainability KPIs into performance and incentive schemes.

Climate Goals & Targets

Environmental Challenges

• Increased pricing of GHG emissions leading to increased operating costs.
• Increased stakeholder concern or negative feedback potentially reducing capital availability and revenue.
• Limited emission data on the supply chain (Scope 3 emissions).

Mitigation Strategies

• Climate scenario analysis conducted to understand potential cost impacts of carbon pricing.
• Development of a position statement on climate change and a climate strategy with short, medium, and long-term goals.
• Initiation of a supplier sustainability assessment program to develop a comprehensive Scope 3 emission profile.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Increased prevalence of vector-borne diseases

Transition Risks

• Increased pricing of GHG emissions
• Increased stakeholder concern
• Limited Scope 3 emission data

Opportunities

• Energy efficiency improvements
• Resource conservation

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, UNGC, JSE Sustainability Disclosure Guidance

Certifications: ISO 14001, ISO 45001, ISO 50001

Third-party Assurance: IBIS Environmental Social Governance Consulting Africa Proprietary Limited

UN Sustainable Development Goals

• SDG 3

Aspen's commitment to promoting access to high-quality, affordable medicines aligns with SDG 3: Ensuring healthy lives and promoting well-being for all at all ages.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed