Climate Change & Energy Use

Scientific data support that climate change is occurring, and we are taking action to reduce the economic and public health risks associated with a changing climate.

Resources

 

As a global biopharmaceutical company, we recognize the important role we play in identifying, adapting and responding to the public health risks associated with climate change, such as threats to clean air and water, insufficient food supplies and the spread of disease. We believe our long-standing support of stronger health systems in underserved areas is even more important given the evidence that certain disease patterns are associated with changing climate conditions.

Our energy strategy aligns with the United Nations Sustainable Development Goals (SDGs) by striving to increase our use of renewable electricity sources, making energy efficiency improvements and supporting science-based reductions of our greenhouse gas (GHG) emissions.

We report our GHG emissions as required by regulations in certain countries and annually through CDP (formerly Carbon Disclosure Project). In 2018, for the second year in a row, the CDP graded our disclosure with an A- “leadership” rating, indicating that we have “implemented a range of actions to manage climate change, both in our own operations and beyond.”

We have committed to reducing our Scope 1 and market-based Scope 2 absolute GHG emissions by 40 percent between 2015 and 2025. This goal is designed to meet the science-based criteria to limit the global temperature increase to below 2°C. We have submitted our goal to be evaluated by the Science-Based Targets initiative (SBTi), and joined We Mean Business to emphasize our commitment.

We realize that in order to make a truly meaningful reduction in our overall environmental impact, we must engage with our suppliers to drive positive change. We have set a goal that includes a three-phase process:

  • Throughout 2018, we collected GHG emissions data from 93 percent of our strategic suppliers with the highest environmental impacts to help us better understand the GHG emissions associated with our supply chain
  • By 2020, we will engage with those suppliers and request them to identify GHG emission reduction opportunities
  • By 2025, at least 90 percent of our strategic suppliers with the highest environmental impacts will set their own GHG emission reduction targets
Pie chart of greenhouse gas emissions by Scope: Scope 1 783,500 MTCO2e, Scope 2 389,700 MT CO2e, Scope 3 6,231,700 MT CO2e
Note: Scope 2 is the market-based value in accordance with the Greenhouse Gas Protocol.
Goal(s)ProgressIndicator
GHG Emissions
By 2025, we will reduce global Scope 1 and market-based Scope 2 GHG emissions by at least 40% from 2015 levels.
19.6% reduction
On Track
Renewable Energy
By 2025, at least 50% of our purchased electricity will come from renewable sources. By 2040, 100% of our purchased electricity will come from renewable sources.1
14.1% of our purchased electricity comes from renewables
On Track
1 We have defined “purchased electricity” as electricity sourced from external suppliers as well as renewable electricity that was generated and utilized onsite where we retained the renewable attributes or where we have obtained renewable attributes through contract.

Initiatives

We have made it a priority to reduce our demand for energy and have established internal policies and practices focused on reducing energy use at all of our sites and minimizing GHG generation throughout the company. By taking these steps, we are not only minimizing GHG emissions but also reducing our operating costs and mitigating the business impacts expected to be associated with future climate change requirements.

Energy-efficiency and demand-reduction projects will continue to contribute to lowering our energy consumption and reducing our direct GHG emissions. In addition, we will continue to optimize systems, consolidate excess facility space when possible, shift power supplies to combined heat and power systems and utilize renewable energy sources.

Our company has launched initiatives around the world to improve energy use, reduce greenhouse gas (GHG) emissions from our operations and understand our supply chain-related impacts.

Our Energy Center of Excellence (CoE) identifies, shares and standardizes best practices, and prioritizes the funding of energy projects to reduce energy use across the company. Our manufacturing facilities, warehouses, laboratories, major offices and vehicle fleet are the primary targets of our energy-demand-reduction programs, as they represent the majority of our energy consumption.

We have established an Energy Capital Fund of up to $12 million per year in order to transition to more energy-efficient technology and to better position the company to respond to energy demands in the future. The Energy Capital Fund supports the implementation of projects with a simple four-year payback averaged over the entire portfolio. In 2018, we allocated approximately $9.8 million to energy projects. The completed projects will result in $1.65 million in annual savings and a reduction of more than 6,000 metric tons of carbon dioxide from our facilities. In 2019, we have over 100 projects in progress, that when completed will reduce carbon dioxide emissions from our facilities by over 30,000 metric tons.

Facilities

We continuously strive to make our facilities energy-efficient. Our Energy CoE has created an “energy road map” to help our facilities reduce energy demand and associated GHG emissions. The energy road map’s foundation includes large-scale metering and monitoring to assess and identify opportunities for continuous improvement. As facility energy management programs mature, energy savings are sought by improving the reliability of the equipment, by the efficient operation of utility systems and by building efficiencies into systems design.

All of our new facilities are required to comply with our Energy Design Guide and Energy Conservation Planner. If we purchase a facility, it is evaluated for energy efficiency and assessed against our energy scorecard as part of its integration into our company.

All new laboratories, offices and major renovations are built following cost-effective and energy-efficient practices and are designed to meet LEED Silver or the comparable country standard.

  • Our China Head Office is certified as LEED Gold
  • Our new South San Francisco Office was built to LEED Gold Standards
  • An operations support facility at our facility in Durham, North Carolina is certified as LEED Silver

We require our facilities to have a plan to manage their energy use.

  • Four sites in Ireland, three sites in Germany, one site in Spain and one site in the United Kingdom are certified as ISO50001 for energy management to comply with the EU Energy Efficiency Directive audit requirements
  • Our Energy CoE has provided tools for facility managers to identify opportunities to reduce energy use and eliminate waste. These tools include facility-wide, three-day Energy Treasure Hunts, half-day utility-system assessments (Energy Kaizens), and online Energy Treasure Hunts, which allow for best-practice sharing. Since 2010, we have conducted Energy Treasure Hunts at 13 of our facilities around the world. This process has identified over 1,000 energy-efficient project opportunities, many of which have been successfully implemented, resulting in over US$10 million in cost savings and approximately 35,000 metric tons of GHG emission reductions.
  • In 2018, four facilities participated in 12 Energy Kaizens, which helped them to identify and fix costly air and water leaks and reduce heat energy losses from missing or damaged insulation. These Kaizen events identified over US$550,000 in potential energy savings. As important as the immediate energy savings and resultant GHG emission reductions, the training, assessment skills and knowledge the employees received can be applied to the rest of their facilities.
  • Our online Energy Treasure Hunts have identified high-level recommendations such as renewable energy assessments and lighting systems optimization. As we are a global company, the online format proves to be a great way to engage our employees, understand their concerns and use their unique expertise and local understanding of their facilities.
  • All of our employees have access to a training curriculum that allows them to learn more about energy management and energy systems. Through this program, employees can earn an Energy Manager Certification. Site energy managers from over 70 of our facilities are expected to complete the basic energy efficiency training curriculum.

Work practices and recognition

Our company takes advantage of technology advances in order to save energy, time and money while also reducing emissions.

  • Site energy use is tracked monthly by our Energy CoE through a centralized system
  • A global energy scorecard is issued monthly, and sites receive a letter grade based on an internal assessment of their energy intensity and performance. Our companywide average score has consistently been a top-level grade of “A-”.
  • We developed an energy management strategy that seeks to achieve energy savings through continuous improvement, reliability, operations and design
  • A rail-travel option is included in our online business-travel booking tool to make it easier to travel by train when appropriate. Train travel has a smaller carbon footprint than traveling by either airplane or personal vehicle.
  • The long-range freight carriers that transport our products use alternatives to air freight whenever practical. In 2018, 38 percent (by weight) of our products were shipped by ocean freight, which reduces the amount of transportation-related GHG emissions by over 90 percent as compared to air shipping.

In 2018, our company presented internal Energy Awards to recognize sites, teams or individuals from around the world who exhibited leadership through their energy management efforts:

Energy Savings by Design
A site in South Africa installed a new, more efficient heating ventilation and air conditioning (HVAC) system, submetering on all buildings and a 915 KW solar array. They utilize a thermal storage unit, conduct regular insulation assessments and incorporate lighting controls into all projects.

Energy Savings by Operations
Our site in Italy utilizes set-backs to optimize HVAC and lighting during non-operational hours, turns off a boiler used for space heating when not needed and has activated sequencers to manage multiple air compressors.

Energy Savings by Reliability
A site in North Carolina performs regular infrared steam trap inspections, has an air leak inspection program, performs real-time monitoring of variable frequency drives and has completed several Energy Kaizens.

Energy Savings by Energy Program Management
One of our sites in Pennsylvania has a dedicated energy management team that includes a cross section of operations and facilities management personnel, has formalized standard operating procedures to support its energy management team, and has used its success in energy management to drive solid waste reductions, hold zero waste meetings and host an external sustainability summit in collaboration with a vendor.

Renewable energy

Our company has set bold renewable energy targets. We have committed to sourcing 100 percent of our purchased electricity from renewable energy sources by 2040, with an interim goal of 50 percent by 2025.1 Photovoltaic arrays, wind turbines and other renewable-energy installations avoid emissions, help reduce energy-demand peaks and postpone or preclude adding new power plants.

While renewable energy accounts for a small percentage of the electricity we currently purchase, we continually analyze our sites to look for opportunities for new onsite installations, power-purchase contracts, vendor-supplied renewable energy through the electrical grid and virtual power-purchase agreement (VPPA) projects.

In January 2018, our company signed a VPPA with Invenergy Wind Development LLC that adds 60 megawatts (MW) of renewable energy to the Electric Reliability Council of Texas (ERCOT) market and provides us with the associated renewable energy credits. This new wind asset, Santa Rita East, will reduce our company’s greenhouse gas emissions by more than 100,000 metric tons per year over the life of the 12-year agreement. This agreement will help us reach approximately 50 percent of our 2025 goal and 25 percent of our 2040 goal. The Santa Rita East wind farm is expected to come online in the third quarter of 2019.

Vehicle fleet

Approximately 9 percent of our total Scope 1 and 2 GHG emissions are associated with our vehicle fleet. We calculate our fleet’s GHG emissions on the basis of estimated fuel economy and actual total miles driven.

  • In an ongoing effort to improve fuel efficiency, we have converted our U.S. sales fleet from cars with six-cylinder engines to cars with four-cylinder engines, replaced eight-cylinder-engine trucks with six-cylinder-engine trucks, and introduced an all-wheel-drive (AWD) sedan option to replace AWD sport utility vehicles. This has resulted in fuel efficiency improvements from an average of 22 miles per gallon (mpg) in 2008 to an average of 27 mpg in 2018.
  • 40 percent of the U.S. fleet are now partial zero emission vehicles (PZEV)
  • Our European fleet continues to convert to the use of more fuel-efficient vehicles and we are conducting a plug-in hybrid pilot in the UK
  • Hybrid vehicles are being utilized in Japan and Australia and we are looking to expand their use in Brazil and Mexico
photo of solar panels

Partnerships

We have a long-standing partnership with the U.S. Environmental Protection Agency’s (EPA’s) ENERGY STAR® program. This partnership provides a broad energy-management strategy that serves as a useful framework for measuring our current energy performance, setting goals, tracking savings and rewarding improvements.

In March 2019, the U.S. EPA again recognized our company with the Sustained Excellence Award. This is the 14th consecutive year in which we have been recognized by ENERGY STAR for excellence in energy management. We also received several facility-specific awards from EPA in 2018:

  • Our Puerto Rico facility was awarded the ENERGY STAR Pharmaceutical Energy Performance Indicator Award by U.S. EPA for superior energy efficiency and environmental performance among U.S. pharmaceutical manufacturing plants for the 10th consecutive year
  • An office building and a data center in New Jersey and two office buildings in Pennsylvania earned the ENERGY STAR Certified Building label
1We have defined “purchased electricity” as electricity sourced from external suppliers as well as renewable electricity that was generated and utilized onsite where we retained the renewable attributes or where we have obtained renewable attributes through contract.

Performance

The World Resource Institute’s Greenhouse Gas Protocol defines Scope 1 GHG emissions as emissions from owned or controlled sources such as onsite fuel combustion and fleet vehicles. Scope 2 emissions are those from indirect sources such as purchased electricity. Scope 3 includes indirect emissions in a company’s value chain.

ENERGY USE SUMMARY2014 2015 2016 2017 2018
Total energy use (GJ)21,926,200 21,217,200 20,851,700 19,252,800 19,113,300
SCOPE 1 & LOCATION-BASED SCOPE 2 ENERGY USE (% OF TOTAL)12014 2015 2016 2017 2018
Natural gas (Scope 1)60% 60% 61% 59% 62%
Purchased electricity (Scope 2)2, 323% 24% 23% 23% 22%
Fleet fuel (Scope 1)12% 11% 12% 13% 10%
Purchased steam (Scope 2)3% 3% 2% 3% 3%
Fuel oil (Scope 1)2% 2% 2% 2% 2%
Spent solvents (Scope 1)0.2% 0.1% 0.1% 0.0% 0.0%
Coal (Scope 1)0.0% 0.0% 0.0% 0.0% 0.0%
Bio-Fuel (Scope 1)0.3% 0.3% 0.4% 0.6% 0.6%
Renewable energy generated and used onsite40.0% 0.01% 0.04% 0.04% 0.05%
1 May not add to 100 percent due to rounding.
2 Reported using Scope 2 location-based value in accordance with the Greenhouse Gas Protocol.
3Includes solar, wind and other renewables generated onsite where renewable energy credits (RECs) have been sold.
4 Includes solar, wind and other renewables generated onsite where renewable energy credits or guarantees of origin have been retained or retired.
SCOPE 1 & MARKET-BASED SCOPE 2 ENERGY USE
(% OF TOTAL)1
2014 2015 2016 2017 2018
Natural gas (Scope 1)60% 60% 61% 59% 62%
Purchased electricity (Scope 2)2, 323% 24% 22% 22% 19%
Fleet fuel (Scope 1)12% 11% 12% 13% 10%
Renewable energy generated and used onsite or purchased40.0% 0.01% 0.3% 1.1% 3.2%
Purchased steam (Scope 2)3% 3% 2% 3% 3%
Fuel oil (Scope 1)2% 2% 2% 2% 2%
Bio-Fuel (Scope 1)0.3% 0.3% 0.4% 0.6% 0.6%
Spent solvents (Scope 1)0.2% 0.1% 0.1% 0.0% 0.0%
Coal (Scope 1)0.0% 0.0% 0.0% 0.0% 0.0%
1 May not add to 100 percent due to rounding.
2 Reported using Scope 2 location-based value in accordance with the Greenhouse Gas Protocol.
3Includes solar, wind and other renewables generated onsite where renewable energy credits (RECs) have been sold.
4 Includes solar, wind and other renewables generated onsite where renewable energy credits or guarantees of origin have been retained or retired.

From 2017 to 2018, we reduced our year-over-year Scope 1 and Scope 2 market-based GHG emissions by 7 percent due to our continued focus on energy efficiency and an increased utilization of renewable energy.

We have analyzed and reported our Scope 3 impacts using primary operating data, accepted emission factors, and an economic input-output model based on our third-party spend. In 2018, our Scope 3 GHG emissions remained roughly the same as in 2017.

Our analysis shows that our Scope 3 GHG emissions impacts are nearly three times greater than our combined Scope 1 and Scope 2 emissions. We are working to reduce those impacts through activities such as reducing waste in our operations, reducing fuel use and looking for opportunities to shift from air shipping to ocean transport when practical. We are also starting to engage with our strategic suppliers to identify ways to reduce GHG emissions in our supply chain. These actions not only reduce our environmental impact but benefit the business by reducing costs.

GHG SUMMARY1 (MT CO2e)2014 2015 2016 2017 2018
Scope 1 and location-based Scope 2 greenhouse gas emissions1,532,400 1,416,400 1,363,300 1,254,700 1,208,100
Scope 1 and market-based Scope 2 greenhouse gas emissions1,532,400 1,458,500 1,400,000 1,267,000 1,173,200
Scope 3 greenhouse gas emissions 5,760,000 5,586,300 7,975,100 6,586,100 6,231,700
1 In accordance with the Greenhouse Gas Protocol, prior-year data have been adjusted to add or remove facilities that have been acquired or sold. Adjustments also reflect changes in methodology to ensure consistency from year to year.
SCOPE 3 GREENHOUSE GAS (GHG) DETAILS (MT CO2e)2014 2015 2016 2017 2018
Purchased goods and services1 4,437,700 3,864,900 6,204,000 4,997,600 4,615,400
Capital goods1, 2NA 112,700 224,000 192,900 229,200
GHG emissions from fuel and energy-related activities not included in Scopes 1 & 23, 4309,500 276,200 304,500 262,100 243,400
Upstream transportation and distribution1 258,000 222,200 255,500 267,100 271,600
Waste generated in operations (excluding recycled & composted waste)5, 6 23,500 20,600 16,800 16,000 18,200
GHG emissions related to employee business travel7, 8 182,600 283,300 265,400 218,200 301,100
Employee commuting 320,700 302,400 301,500 262,200 239,000
Downstream transportation and distribution9 NA 211,000 118,000 121,900 120,800
GHG emissions from use of sold products10 228,000 255,000 248,400 205,800 148,100
End-of-life treatment of sold products11 NA 38,000 37,000 42,200 44,900
Total5,760,000 5,586,300 7,975,100 6,586,100 6,231,700
Note: Limited Data Assurance was granted for emissions calculated from primary travel vendor data and employee reimbursable travel mileage data. The total reported here includes non-primary travel vendor data emissions which were based on our 2018 third-party spend data and an Economic Input-Output Model performed by Climate Earth, Inc.
NA: Not Available.
1 Based on third-party spend data and an economic input-output model performed by Climate Earth, Inc.
2 Data not available before 2015.
3 Emission factors from Argonne National Laboratory's GREET Model (https://greet.es.anl.gov/) were used in conjunction with primary fuel and energy-use data.
4 Data as reported historically, not baseline adjusted.
5 Primary-waste data were used with the U.S. EPA’s WARM Model (https://www.epa.gov/warm).
6 Including recycled and composted waste in these calculations, would result in negative emissions in 2014 (-39,900 MT CO2e), 2015 (-40,200 MT CO2e), 2016 (-60,200 MT CO2e), 2017 (-41,200 MT CO2e) and 2018 (-43,700 MT CO2e).
7 Based on primary travel vendor data, employee-reimbursable mileage and UK Defra factors (https://www.gov.uk/government/collections/government-conversion-factors-for-company-reporting#conversion-factors-2015).
8 Beginning in 2014, emissions are based on primary vendor data where available and economic input-output modelling performed by Climate Earth, Inc., using spend data.
9 Emissions were calculated using our “Upstream transportation and distribution” spend data as a worst-case estimate entered into the WRI Quantis tool. We assumed that all “downstream” material would first have been stored, transported and handled “upstream.”
10 Assumes that all HFC-containing devices shipped for sale were consumed. The amount and identity of HFC in each product is calculated and multiplied by the appropriate global warming potential (GWP) to determine the CO2e released as a result of product use.
11 Calculated assuming that all primary, secondary and tertiary packaging purchased was disposed of by our customers. Packaging material data was used with the U.S. EPA’s WARM Model.