Philogen Group S.p.A.

Climate Impact & Sustainability Data (2021, 2022, 2023)

Reporting Period: 2021

Environmental Metrics

Total Carbon Emissions:485 tCO2e

Scope 1 Emissions:181 tCO2e

Scope 2 Emissions:277 tCO2e

Renewable Energy Share:4%

Total Energy Consumption:7098 GJ

Water Consumption:3.4 ML

Waste Generated:29 tons

ESG Focus Areas

Environmental
Social
Governance

Environmental Achievements

Installed a photovoltaic system at the Rosia plant, covering about 4% of the Group's electricity consumption.
Implemented a separate waste collection system at the Montarioso site and is implementing one at the Rosia plant.
Adopted an autoclave treatment procedure for biologically contaminated waste.

Social Achievements

Increased workforce by 24% to 130 employees, with 52% being women.
Implemented welfare initiatives such as life insurance for executives and reimbursement of medical expenses for executives and middle managers.
Launched an incentive plan (Stock Grant Plan 2024-2026) for key employees.

Governance Achievements

Established a Control, Risk and Sustainability Committee.
Included sustainability objectives in the variable incentive system for Executive Directors starting in 2022.
Adopted an Organization, Management and Control Model (MOG) and periodically updates it.

Climate Goals & Targets

Medium-term Goals:

Increase photovoltaic system capacity to 250 kW by the end of 2022.

Short-term Goals:

Modernize plants' lighting systems with LED systems.

Environmental Challenges

Covid-19 pandemic impacted productivity, delayed clinical trials, and caused raw material supply delays.
Inflationary effects due to raw material shortages and supply chain bottlenecks.
Decrease in revenues from contracts with third parties due to a strategic shift towards proprietary products.

Mitigation Strategies

Adopted a new anti-contagion protocol in April 2021.
Made advance procurements of raw materials to ensure sufficient stocks.
Implemented cost-saving measures and focused on developing proprietary products.

Supply Chain Management

Responsible Procurement

Specific SOPs for supplier qualification and approval.
Contracts include clauses referring to the Group's Model 231 for compliance.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 9001:2015 (Bioanalytical Laboratory), GMP (Montarioso plant)

Reporting Period: 2022

Environmental Metrics

Total Carbon Emissions:1583 tCO2e

Scope 1 Emissions:454 tCO2e

Scope 2 Emissions:1128 tCO2e

Renewable Energy Share:1.53%

Total Energy Consumption:19155 GJ

Water Consumption:6.58 ML

Waste Generated:25.60 tons

Carbon Intensity:0.06 tCO2e/thousands

ESG Focus Areas

Ethics and compliance
Economic performance and value distribution
Energy consumption and emissions
Waste Management
Contribution to public health
Local communities
Inclusiveness in experimentation pathways
Attraction, development and retention of workers
Worker health and safety
Diversity and equal opportunity
Patient health and safety
Data Privacy

Environmental Achievements

Completed construction and upgrading works on the Rosia production site, including a new GMP facility.
Installed a photovoltaic system at the Rosia plant, covering 1.53% of electricity consumption.
Modernized lighting systems with LED lamps in the laboratory and new production plant, and exterior streetlights.
Reduced energy intensity by 62% from 1.84 GJ/thousand in 2021 to 0.7 GJ/thousand in 2022.
Reduced total waste produced by 11% compared to 2021 (25.60 tons vs 28.62 tons).

Social Achievements

Increased total workforce by 21% to 157 employees.
55% of employees are women.
Implemented several welfare initiatives (life insurance, medical expense reimbursement, fuel and purchase vouchers).
Increased training hours significantly from 292 hours in 2021 to 2,035 hours in 2022.
Concluded a contract for a new HR management system (Zucchetti HR Portal) to improve efficiency and communication.
Increased the number of clinical trial sites by about 56 percent (57 in 2021 compared to 86 in 2022).

Governance Achievements

Established the Control, Risk and Sustainability Committee and the Nominating and Compensation Committee.
Appointed the Company's internal "ESG Working Group."
Revised and updated the Organization, Management and Control Model (MOG).
ESG-related targets assigned to managing directors in their annual variable incentive plans.
No reports or critical issues regarding sustainability issues were received during 2022.

Climate Goals & Targets

Long-term Goals:

Possible obtainment of SA8000, ISO 37001, ISO 45001 certifications
Possible extension of ISO 9001 to the Montarioso plant and the new GMP in Rosia

Medium-term Goals:

Planned increase of photovoltaic system to 320kW

Short-term Goals:

Further increase renewable energy share
Complete digitization of certain business processes

Environmental Challenges

Supply difficulties during the acute phases of the pandemic and the Russian-Ukrainian conflict.
Increased costs for materials and services.
Increased energy and raw material prices due to macroeconomic factors.

Mitigation Strategies

Successfully completed investment plans for the new GMP production facility despite supply chain disruptions.
Implemented a hiring plan to structure the workforce of the new GMP facility.
Developed strategies and initiatives to minimize environmental impacts and reduce energy consumption from nonrenewable sources (e.g., modernization of lighting systems).

Supply Chain Management

Supplier Audits: 100% of significant product categories

Responsible Procurement

Specific SOPs for supplier qualification and approval
Preference for local suppliers where possible

Climate-Related Risks & Opportunities

Opportunities

Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 9001:2015 (Bioanalytical Laboratory)

Awards & Recognition

Marie Curie Excellence Award (Philochem)

Reporting Period: 2023

Environmental Metrics

Total Carbon Emissions:1785 tCO2e (Scope 1 & 2 Market-based); 1466 tCO2e (Scope 1 & 2 Location-based)

Scope 1 Emissions:575 tCO2e

Scope 2 Emissions:1210 tCO2e (market-based); 891 tCO2e (location-based)

Renewable Energy Share:1.6%

Total Energy Consumption:21,033 GJ

Water Consumption:7.17 megaliters

Waste Generated:62.82 tons

Carbon Intensity:0.05 tCO2e/thousand (location-based)

ESG Focus Areas

Economic Performance
Social Responsibility
Environmental Responsibility
Ethics and Compliance
Responsible Supply Chain Management
Patient Health and Safety
Data Privacy

Environmental Achievements

Reduced energy intensity by 11% compared to 2022 (0.75 GJ/thousand vs 0.84 GJ/thousand)
Increased self-generated renewable energy from photovoltaics by 13.3% compared to 2022
Divestment of all gasoline-powered vehicles, resulting in zero gasoline consumption for automotive purposes.

Social Achievements

Employed 165 employees, including 55% women and 89% with permanent contracts. 35 new hires in 2023.
Provided 900 total training hours (774 hours in technical fields, 126.5 hours in health and safety)
Implemented Zucchetti HR portal for streamlined HR management and improved employee experience.

Governance Achievements

Established an ESG Working Group and implemented a Whistleblowing Procedure.
Included ESG-related targets in the 2023-2024 Remuneration Policy for managing directors.
Board of Directors composed of 70% men and 30% women.

Climate Goals & Targets

Medium-term Goals:

Further expansion of photovoltaic installations to nearly 440 kW.

Short-term Goals:

Gradual replacement of all lamps with LED systems.
Plant modernization of Air Handling Unit facilities at the Rosia plant.

Environmental Challenges

Increased energy consumption (10% growth over 2022) due to the startup of the new GMP plant and office expansion.
Increased water withdrawal (8.91% increase from 2022) due to increased production activities.

Mitigation Strategies

Replacement of old machinery with more modern, energy-efficient equipment.
Implementation of a partial recirculation system in the laboratory area.
Reduction of paper consumption through document digitization.
Construction of a photovoltaic system.
Efficient overall water consumption by reducing the use of plastics and modernizing drinking water facilities.