Climate Change Data

Environmental Metrics

ESG Focus Areas

• Meeting healthcare needs
• Promoting good business ethics
• Supporting our communities
• Enabling our people
• Minimising our environmental impact

Environmental Achievements

• Replaced some of the biggest toxic gas emission engines with ten Hybrid cars, reducing cars’ emissions by 50% and the fuel bill by 60%
• Achieved ISO 50001 certification for environmental practices and energy management
• Successfully passed third party inspection of our CDP (Carbon Disclosure Project)
• Hikma has scored 90 ‘B’ in the rating of healthcare sector responding companies, registering a significant improvement during the reporting year of 2014 compared to previous years.

Social Achievements

• Launched the ‘Women Empowerment’ programme across our global key markets
• Organised a ‘Ramadan Walk against Hypertension’ in Jordan, educating the public about hypertension and promoting a healthy lifestyle
• Collaborated with the King Hussein Cancer Center on funding a Smoking Cessation Programme for employees, resulting in a 75% success rate
• Donated medications worth over $50,000 to Guinea to help fight the Ebola disease
• Sponsored a total of 20 medical days and provided free medications worth over $47,190 in Jordan
• Donated medications worth $93,000 to Syrian and Palestinian refugee camps in Jordan
• Renewed its partnership with SOS Children’s Villages Jordan to sponsor a home in Irbid, Jordan
• Hikma employees in Jordan supported a non-governmental organisation, Tkiyet Um Ali (TUA), to alleviate hunger among underprivileged families
• Hikma Algeria organised a campaign in the month of Ramadan, where food and monetary donations were collected and given out to 30 needy families
• Distributed food packages to underprivileged families in Sidi Thabet, Tunisia
• Raised funds to purchase an industrial fridge for the charity Santa Casa Misericórdia in Portugal
• Donated school supplies, textbooks and woollen blankets to underprivileged children in boarding schools in Tunisia
• Hikma Farmaceutica in Portugal raised monetary donations to provide school supplies for the children of the Santa Casa Misericórdia organisation
• West-Ward, our business in the US, distributed Colorado blue spruce trees to all its employees to reduce carbon dioxide emissions
• Partnered with Terracycle and Recork to recycle pens, highlighters, sharpies and corks in the US
• Partnered with Al Ajyal in Jordan for recycling paper and plastic waste
• Donated computer equipment to Bedford City Schools in the US

Governance Achievements

• Renewed our UNGC membership by submitting a Communication on Progress report (COP)
• Renewed its commitment in 2015 for its zero tolerance of corruption across its operations as a founding member of the Partnering Against Corruption Initiative (PACI)
• Joined the B20 (Business 20) Anti-corruption Working Group (ACWG)
• Externally assessed the effectiveness of our Anti-Bribery and anti-Corruption programme

Climate Goals & Targets

Environmental Challenges

• Political and economic environment in the MENA region created challenges including political uncertainty, currency headwinds, and rising inflation
• Increased competition on certain products in the US injectables market
• Expected declines in specific market opportunities in the US generics business due to increased competition
• Concerns about drug pricing sparked intense debate

Mitigation Strategies

• Strong local presence across the MENA region, employing local people, investing in high-quality manufacturing facilities, working with local regulators, and supporting the growth of the local pharmaceutical markets
• Strict focus on costs and operating efficiency
• Broad product portfolio and continuation of certain specific market opportunities offsetting increased competition
• Focus on maintaining the supply of products in the market and addressing shortages
• Acquisition of Roxane Laboratories to transform the non-injectables Generics business

Supply Chain Management

Responsible Procurement

• Maintaining alternative API suppliers for each of the Group’s products
• Careful selection of API suppliers and building long-term partnerships

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN Global Compact

Certifications: ISO 50001

Environmental Metrics

Social Achievements

• Strengthened the management teams across its three businesses to drive successful strategy execution, strengthen customer relationships and enhance the efficiency of its R&D program.
• Bringing all Hikma companies under a refreshed Hikma corporate brand to drive efficiencies, reduce complexities and mobilise employees to better serve its customers.

Governance Achievements

• Siggi Olafsson appointed Chief Executive Officer.

Climate Goals & Targets

Environmental Challenges

• Challenging market conditions in the US, including intense pricing pressure, had a material impact on its Generics business and, in particular, on West-Ward Columbus.
• Delay in approval for its generic version of Advair Diskus®.

Mitigation Strategies

• Commenced consolidation of its Generics’ manufacturing facilities and US distribution centres to create further operational efficiencies.
• Strengthened its Generics management team, recruiting experienced generic pharmaceutical leaders to manage research and development, sales and marketing, business development and the West-Ward Columbus facility.
• Initiating a new clinical endpoint study with respect to its ANDA submission for generic Advair Diskus®.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Decreased GHG emissions of direct fuel usage and electricity consumption by 4% since 2017. Emissions remained broadly stable despite a 6% year-on-year increase in Group revenues.
• 9% of electricity consumption derived from renewable sources; 3% of total energy consumption from renewable sources.

Social Achievements

• Medicine donations more than doubled compared to 2018, reaching $4.1 million.
• Established a Diversity, Equity and Belonging Task Force and an employee-led Black Employees Advisory Board in the US.
• Supported the screening of 150 women through a breast cancer screening program.
• Donated over 600,000 meals in 2020 through an employee matching donation campaign.

Governance Achievements

• Maintained membership in the FTSE4Good Index Series for the sixth consecutive year, with an improved score and ranking.
• Continued upholding the ten principles of the UNGC.
• Implemented RiskRate, a third-party risk management platform, to monitor and address potential compliance issues with suppliers.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic and its impact on vulnerable populations and business operations.
• Climate change and its potential impact on the business.

Mitigation Strategies

• Strengthened community engagement programs, particularly those supporting healthcare and providing relief.
• Adapted health and safety measures to address the challenges of the COVID-19 pandemic.
• Implemented RiskRate to monitor supplier compliance.
• Assessing climate-related risks through emerging risk management process, including scenario modelling.

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: GRI, UNGC, TCFD

Certifications: Null

Third-party Assurance: Carbon Credentials Energy Services Ltd (Carbon Intelligence)

UN Sustainable Development Goals

• Goal 3: Good health and well-being
• Goal 4: Quality education
• Goal 5: Gender equality
• Goal 8: Decent work and economic growth
• Goal 9: Industry, innovation and infrastructure
• Goal 13: Climate action

Hikma's initiatives align with these goals through medicine donations, employee development programs, diversity initiatives, community engagement, manufacturing and R&D investments, and environmental performance improvements.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Advancing health and wellbeing
• Empowering our people
• Protecting the environment
• Building trust through quality in everything we do

Environmental Achievements

• Achieved a 19% reduction in Scope 1 and 2 emissions (market-based) between 2020 and 2021
• Committed to reducing Scope 1 and 2 GHG emissions by 25% by 2030
• Supported the generation of 35,000 MWh of clean energy in the US through RECs
• Installed a combined cooling, heat, and power (CCHP) system in Tunisia
• Improved recycling efforts at the Columbus, US site, recycling 29 tonnes of waste instead of incinerating it.

Social Achievements

• Donated $3.2 million worth of medicines
• Funded higher education scholarships to 40 refugees and six under-represented women across MENA
• Established an Executive-level Diversity, Equity and Inclusion Committee
• Delivered more than 47,000 instructor-led learning hours to employees
• Launched Take 5 for Safety Programme in Cherry Hill facility, US
• Columbus site achieved first quartile for total recordable injury rate compared to US pharmaceutical industry
• Hikma Egypt sites achieved zero recorded injuries in 2021

Governance Achievements

• Refreshed and provided training on the Code of Conduct
• Ensured all existing and new suppliers had their details assessed by the RiskRate platform for modern slavery compliance
• Board of Directors has overarching oversight of ESG strategy, including environmental aspects and TCFD strategy and reporting

Climate Goals & Targets

Environmental Challenges

• Robust supply chain needed to preserve continuity of medicine supply
• Varying regulations across markets
• Unexpected manufacturing delays
• Ensuring access to medicines across society
• Water scarcity and climate-related risks in certain locations
• Managing waste effectively

Mitigation Strategies

• Robust supply chain management, dual-sourcing of APIs, increased inventories
• Strong regulatory teams with geographical knowledge
• Multiple production lines and flexible plant network
• Medicine donation programme, working with diverse customers
• Water screening exercise to identify and prioritize water and climate-related risks
• Measuring and managing hazardous and non-hazardous waste

Supply Chain Management

Supplier Audits: All existing and new suppliers assessed by RiskRate platform

Responsible Procurement

• Sustainable procurement programme
• Third-party due diligence process
• RiskRate platform for modern slavery compliance

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Projected carbon pricing and pass-on costs

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Standards, UNGC, TCFD

Certifications: ISO 50001 (Bayader site, Jordan), ISO 45001 and ISO 14001 (Ibn Al-Bitar and Medicef sites, Tunisia)

Third-party Assurance: Carbon Credentials Energy Services Ltd (Carbon Intelligence), EY (limited assurance for Scope 3)

UN Sustainable Development Goals

• Goal 3: Good Health and Well-being
• Goal 5: Gender Equality
• Goal 13: Climate Action
• Goal 4: Quality Education
• Goal 8: Decent Work and Economic Growth

Aligned with SDGs through access to medicines, community support, diversity initiatives, emissions reduction, education programs, and job creation.

Awards & Recognition

• Silver status with Ohio EPA’s Encouraging Environmental Excellence (E3) programme

Environmental Metrics

ESG Focus Areas

• Advancing health and wellbeing
• Empowering our people
• Protecting the environment
• Building trust through quality

Environmental Achievements

• 15% reduction in Scope 1 and 2 GHG emissions since 2020

Social Achievements

• Launched Hiyat Hilweh, a disease awareness campaign in Arabic
• Increased medicine donations from $3.2 million in 2021 to $4.3 million in 2022
• Worked with Direct Relief to provide critical medicines to Ukraine
• Provided malaria medications to more than 2,800 people in Sudan

Governance Achievements

• Appointed three female Non-Executive Directors in 2022
• Maintained membership in the FTSE4Good for eight consecutive years
• Completed implementation of automated third-party risk management system, RiskRate

Climate Goals & Targets

Environmental Challenges

• Severe industry-wide competitive pressures in Generics
• Low double-digit price erosion and mid single-digit volume erosion in Generics
• Limited introduction of new products and slower than expected ramp-up of recent launches in Generics
• Increase in costs due to inflation (shipping, utilities, employee benefits)
• Rise in interest rates
• Foreign exchange headwinds in North African markets

Mitigation Strategies

• Focus on improving efficiencies
• Building a more diversified product portfolio with an increased share of specialty products
• Investing in increasing capacity (new high-speed lines in Portugal and New Jersey, new Injectables plants in Algeria and Morocco)
• Establishing a new sterile compounding business in the US
• Focusing R&D on specialty and chronic disease areas
• Leveraging state-of-the-art manufacturing facility in Columbus, Ohio for strategic contract manufacturing
• Tight control of costs and focus on operating efficiencies
• Expanding product portfolio (182 new launches across markets)
• Adding products with higher barriers to entry (specialty, 505(b)(2), patent protected, inhalation, nasal and biosimilar products)
• Investing in local manufacturing in MENA (new injectable manufacturing facilities in Algeria and Morocco)

Supply Chain Management

Supplier Audits: Regular audits of API suppliers

Responsible Procurement

• Supplier Code of Conduct
• Sustainability assessments through EcoVadis

Climate-Related Risks & Opportunities

Physical Risks

• Extreme storms
• Flooding

Transition Risks

• Carbon pricing impacts on supply chain
• Investor preference changes
• Energy pricing changes

Opportunities

• Development of energy-efficient products
• Renewable energy generation

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 45001

Third-party Assurance: EcoAct (Scope 1 & 2, selected Scope 3); EY (limited assurance on Sievo Oy CO2 analytics module and methodology)

Sustainable Products & Innovation

• New sterile injectable compounding facility

Awards & Recognition

• FDA award for addressing drug shortages

Environmental Metrics

ESG Focus Areas

• Diversity, Equity and Inclusion (DEI)
• Environmental Sustainability (Emissions, Water Management)
• Ethical Conduct and Business Integrity
• Corporate Social Responsibility

Environmental Achievements

• Reduced scope 1 and 2 emissions by 15%

Social Achievements

• Completed energy audits and developed action plans for three MENA countries
• Maintained high ethnic diversity in senior management (78% response rate to diversity survey)
• Charitable donations of over $6.0 million

Governance Achievements

• Successful CEO succession planning and transition
• Appointment of a new Chief People Officer
• Implementation of a fraud prevention and detection program
• Enhanced ethnic diversity data collection and reporting processes
• Updated Board Diversity Policy to meet Listing Rules requirements
• Compliance with UK Corporate Governance Code (with exceptions for Executive Chairman role)

Climate Goals & Targets

Environmental Challenges

• Devaluation of the Egyptian Pound
• Halted operations in Sudan due to conflict
• High inflation impacting cost of living for global workforce
• Data limitations for ethnic diversity survey due to GDPR and labor laws in some countries

Mitigation Strategies

• Utilizing spare capacity in Generics plants for contract manufacturing
• Addressing product shortages in essential injectables medicines
• Careful consideration of stakeholder concerns regarding workforce safety and well-being in Sudan
• Monitoring the impact of high inflation on employee cost of living
• Preparing for a workforce engagement survey
• Enhanced ethnic diversity disclosures despite data limitations

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UK Corporate Governance Code 2018