Merck KGaA

Sustainability strategy and accountability
The company provides evidence of linking performance criteria in senior executives’ remuneration policies to targets and objectives which cover nature, including biodiversity, and social issues. These criteria include the percentage of relevant suppliers covered by a sustainability assessment as well as performance regarding greenhouse gas emissions.

Stakeholder engagement 
The company discloses how often and through which channels it engages with various stakeholder groups.

Resource exploitation and circularity
The company discloses which organisms it directly exploits for commercial uses, including wild animal and plant species. Among the organisms disclosed are mice and rats, guinea pigs and other species that represent a small percentage (rabbits, non-human primates, goats, camelids etc.).

Water 
The company engages with suppliers to reduce water withdrawal through its Supplier Code of Conduct. The company has targets to reduce water pollution to a no-effect threshold, and reports progress against this. The company has a commitment to respect the right to water, stated in its Principles for Sustainable Water Management.

Solid and air pollution
The company has targets to reduce by 5% against the Merck Waste Score its total amounts of hazardous waste and reports progress against the targets. The company discloses the proportion of hazardous waste treated to reduce pollution compared to total waste, the hazardous waste diverted from disposal and the waste directed to disposal. The company reports some activities to reduce plastic use and waste in its own operations, for example by reducing its plastic consumption in some of its processes.

GHG emissions
Merck has a target to reduce by 50% its scope 1 and 2 emissions by 2030 from a 2020 baseline, which is aligned with a 1.5-degree trajectory. In addition, the company has a target to reduce its scope 3 emissions by 1,500 metric tons by 2030, which is also aligned with a 1.5-degree trajectory.

No leading practices were identified in the social inclusion and community impact area.

Sustainability strategy and accountability
The company discloses its process for identifying and prioritising its most relevant sustainability impacts as well as the outcome of this process, in relation to its sustainability strategy. The company discloses group-wide targets on some key sustainability topics, like water use and pollutants, greenhouse gas emissions and waste, but no targets were reported for other topics covering the most material parts of its value chain. The company reports consistently against all its targets. The company does not disclose whether its highest governance body has expertise regarding nature-related topics.

Stakeholder engagement
The company does not disclose an overview of the issues raised during its stakeholder engagement activities.

Lobbying
The company discloses a list of trade associations of which it is a member wherever it operates. The company does not disclose a clear and detailed framework for assessing alignment of its trade associations with nature-positive policies. Nor does it report (potential) misalignment between the lobbying activities of its trade associations and nature-positive policies.

Impact and dependencies assessment
The company has not holistically assessed its impacts or how it depends on nature, including biodiversity. It has an opportunity to start such an assessment across its value chains, focused on quantification of its impacts or dependencies.

Key areas and species
The company does not disclose the locations that are in or adjacent to areas important for biodiversity within its own operations. The company does not disclose the locations of its suppliers that are in or adjacent to areas important for biodiversity. The company does not disclose species populations existing in or adjacent to its own locations. Nor does it disclose species populations existing in or adjacent to the locations of its suppliers. The company does not disclose the status according to national and international conservation lists of species identified in its own locations.

Ecosystem conversion and restoration
The company has a commitment to ensure zero conversion, via a commitment to zero deforestation linked to its wood and fibre-based packaging materials. The company discloses some activities to achieve conversion-free supply chains but does not have time-bound targets to achieve conversion-free supply chains. The company is not committed to restoring ecosystems, nor does it disclose details and outcomes of ecosystem restoration projects in areas affected by its own operations or by its suppliers.

Resource exploitation and circularity
The company does not disclose its inputs, including its material footprint. The company does not report quantitatively on its group-wide circularity performance. While the company discloses setting provisions for groundwater and soil remediation, this does not translate into qualitative evidence of activities to improve soil health or agrobiodiversity in its production or sourcing practices. The company does not have a target to improve soil health in its production or sourcing practices.

Water
The company demonstrates it is reducing water withdrawal in its own operations but does not disclose a time-bound target to reduce water withdrawal across its own operations. The company reports how much water is withdrawn for its own operations in water-stressed areas. It also reports a decrease in water pollution. The company discloses its processes for managing and monitoring discharge water quality and regularly reports on water pollution. The company does not disclose its processes for implementing preventive and corrective action plans for identified specific risks to the right to water and sanitation in its own operations.

Solid and air pollution
The company is not reducing the production of hazardous substances. It does not commit to avoid developing or marketing new chemicals or products with SVHC (substance of very high concern) properties, nor is it reducing the production of hazardous waste. Although it is reducing plastic use and waste in its own operations, it does not report on the amount of plastic waste generated and proportions directed from or to disposal. The company reports regularly on air quality parameters of emissions of harmful air pollutants. However, it does not report time-bound targets to reduce air pollutants across the most material parts of its value chain.

GHG emissions
The company is reducing its scope 1 and 2 greenhouse gas emissions and has an associated time-bound reduction target. It reports progress against this target. The company is not reducing its scope 3 emissions and discloses a quantitative increase in 2021. This is despite having a time-bound target to reduce its scope 3 emissions. The company does not report progress against this target.

Invasive species
No evidence was found that the company identifies the activities that could lead to the introduction of invasive species in its own operations or its value chain.

Safe, clean, healthy and sustainable environment
The company does not show if it is committed to respecting local communities’ right to a safe, clean, healthy and sustainable environment or to zero tolerance for acts of violence, threats, intimidation or judicial harassment committed against land and environmental rights defenders.

Indigenous Peoples’ and land rights
The company does not show if it is committed to respecting Indigenous Peoples’ rights or land rights of local communities. The company does not disclose a commitment to respect ownership and use of land and natural resources and related legitimate tenure rights, as set out in the relevant part(s) of the VGGTs or the IFC Performance Standards. The company does not require its business relationships to have a process to identify legitimate tenure rightsholders, paying particular attention to vulnerable or marginalised tenure rightsholders, and to negotiate with them to provide adequate compensation.

The company describes the process for identifying its human rights risks and impacts in specific locations or activities covering its own operations. The company also describes the process for identifying human rights risks and impacts in its business relationships. There is no evidence that the company describes its process for assessing its human rights risks and discloses what it considers to be its salient human rights issues. Nor is there evidence that the company discloses the categories of stakeholders whose human rights have been or may be affected by its activities.

The company has a publicly available policy statement which shows it is committed to respecting the health and safety of workers. The company discloses that it provides its employees wage which is higher than the legally mandated wage ensuring an adequate standard of living for its employees and their families.  However, there is no evidence that the company describes how it determines a living wage for the regions where it operates. Nor is there evidence that the company describes how it works to support the payment of a living wage by its suppliers. While the company discloses the proportion of its total direct operations workforce covered by collective bargaining agreements, it states that monitoring only covers a percentage of the group. While the company states that it encourages its suppliers to respect employees’ right to freedom of association and the right to collective bargaining, it has an opportunity to describe how it works to support the practices of its suppliers in this regard.

The company discloses its tax strategy in its Sustainability Report. However, it has an opportunity to formalise this in a public policy document. The company has an opportunity to disclose a policy on bribery and corruption and its processes for identifying and addressing bribery and corruption. However, it does include anti-bribery and anti-corruption clauses in its contracts with direct business relationships. The company outlines its approach to lobbying and political engagement but does not formalise this in a public policy document. The company states that it does not make political contributions but does not formalise this commitment in a public policy document.