Climate Change
& Energy Use

Climate Change
& Energy Use

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

As a healthcare company, we recognize the important role we play in identifying and responding to the public health risks associated with climate change. We believe our longstanding support of stronger health systems and expanded access to medicines and vaccines in underserved areas is even more important given the evidence that certain disease patterns can be associated with changing climate conditions.

We have established and met several GHG-reduction goals over the last decade. In 2015, we exceeded our most recent goal to achieve a 15 percent absolute reduction of Scope 1 and 2 GHG emissions between 2012 and 2020. We are committing to setting a new science-based target to reduce our Scope 1 and market-based Scope 2 absolute GHG emissions by 40 percent between 2015 and 2025.

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:

  • By 2018, we will collect GHG emissions data from ≥90 percent of our strategic suppliers with the highest environmental impacts
  • By 2020, we will engage with those suppliers and request them to identify GHG emission reduction opportunities
  • By 2025, ≥90 percent of our strategic suppliers with the highest environmental impacts will set their own GHG emission reduction targets

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 greenhouse gas (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.

NOTE: Scope 2 is the market-based value in accordance with the Greenhouse Gas Protocol.

For more information on our GHG emissions, please see our CDP Climate Change 2016 report.

To see all of our Scope 1, 2 and 3 GHG data, see the Performance section below.

We report our GHG emissions as required by regulations in certain countries and annually through CDP (formerly Carbon Disclosure Project). Our CDP score for carbon reporting has improved each year since 2008, when CDP scoring began. In addition, we were named to the CDP’s S&P Climate Disclosure Leadership Index in 2015. In 2016, CDP changed its scoring system to a single letter grade that takes into account governance and strategy, risk and opportunity management, emissions management and verification. Last year, our company received a grade of B, indicating that we are “taking coordinated action on climate change issues.”

We track the generation of five GHGs associated with operating our facilities and our fleet:

  • Carbon dioxide (CO2)
  • Methane
  • Nitrogen oxide
  • Hydrofluorocarbons
  • Sulfur hexafluoride

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.

Initiatives

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 usage 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 2016, we spent $9.5 million on projects that resulted in $5 million in annual savings and will result in a reduction of more than 27,900 metric tons of carbon dioxide from our facilities.

FACILITIES

We continuously strive to make our facilities energy efficient. Our Energy CoE has created an “energy roadmap” to help our facilities reduce energy demand and associated GHG emissions. The energy roadmap’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 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 best practices as part of its integration into our company.

We build all new laboratories and offices following cost-effective energy-efficient practices.

  • Our China Head Office is certified as LEED Gold

Our company requires our facilities to have a plan to manage their energy use.

  • Four sites in Ireland, two sites in Germany and one site in the United Kingdom are certified as ISO50001 for energy management, in compliance with the EU Energy Efficiency Directive

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 analysis, or 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.
  • The Energy Kaizen process was new in 2016. The three facilities that participated identified and fixed costly air and water leaks and reduced heat energy losses from missing and damaged insulation. As important as the immediate energy savings and resultant GHG reductions, the training, assessment skills and knowledge the employees received can now 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 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.

WORK PRACTICES & 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 assessment of their energy intensity and performance
  • We developed an energy management “pyramid strategy” that looks to achieve energy savings through continuous improvement, reliability, operations and design
  • Employees are encouraged to make use of e-meetings whenever possible, as opposed to traveling for business
  • A rail-travel option is included in our online business-travel booking tool to make it easier to travel by train when appropriate. Traveling by train has a smaller carbon footprint than traveling by either airplane or personal vehicle.
  • The carriers who transport our products use alternatives to air freight whenever practical. In 2016, 18 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 2016, our company began presenting internal Energy Awards to recognize sites, teams or individuals for accomplishments in the following areas

  • Energy Savings by Design
  • Energy Savings by Operations
  • Energy Savings by Reliability
  • Energy Savings by Energy Program Management

RENEWABLE ENERGY

Our company has set bold new renewable energy targets. We are committing to sourcing 50 percent of our purchased electricity from renewable energy sources by 2025 and are setting a long-term goal of sourcing 100 percent of our purchased electricity from renewable sources by 2040.1 Photovoltaic arrays, wind turbines and other renewable-energy installations avoid emissions, help reduce energy-demand peaks and postpone or avoid adding new power plants.

While renewable energy accounts for a very small percentage of the electricity we currently purchase (1 percent), we have initiated an analysis of our sites to look for new installation and power-purchase contract opportunities and benchmark virtual power-purchase agreement projects.

1. We have defined “purchased electricity” as electricity sourced from external suppliers as well as renewable electricity that was generated and utilized on-site where we retained the renewable attributes or where we have obtained renewable attributes through contract.

VEHICLE FLEET

Approximately 10 percent of our total 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.

  • We have reduced our number of sales fleet vehicles on the road by over 2,000 vehicles since 2012
  • In an ongoing effort to improve fuel efficiency, we have converted our U.S. Human Health 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 resulted in a fuel economy improvement of 2 percent from 2015 to 2016.
  • Our European Union (EU) fleet continues to convert to the use of more- fuel-efficient vehicles. In 2016, our EU average emission rate was 106g CO2/km and we are on track to meet the EU target of 95g CO2/km by 2020.
  • One of our sites in Germany is creating a future-oriented vehicle fleet featuring three cars that are fully powered by electricity. These cars are primarily intended for administrative employees without company car privileges to use for short-distance business trips.

PARTNERSHIPS

We have a long-standing partnership with the U.S. Environmental Protection Agency’s (EPA) 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 2017, the U.S. EPA again recognized our company with the Sustained Excellence Award. This is the 12th 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 2017:

  • 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
  • Three office buildings in New Jersey and one in Pennsylvania earned ENERGY STAR Portfolio Manager Awards from U.S. EPA for being in the top quartile of their sector

For more information on our awards, click here.

Performance

From 2015 to 2016, we made great strides and reduced our year-over-year Scope 1 and Scope 2 market-based GHG emissions by 6 percent.

We have once again 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 2016, we estimated lower Scope 3 emissions in several categories due to a reduction in on-site fuel use, waste generation and emissions from sold products from 2015 to 2016. We also saw higher Scope 3 emissions from other categories due to improved accuracy of our third-party spend data, a change in methodology for estimating capital spend impacts and increased employee business travel from 2015 to 2016.

Our analysis shows that our Scope 3 GHG emissions impacts are 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. These actions not only reduce our environmental impact but benefit the business by reducing costs.

ENERGY USE & GHG SUMMARY1

20122013201420152016
Total energy (GJ)24,777,80024,184,80022,234,70021,394,50020,880,100
Total Scope 1 and location-based Scope 2 greenhouse gas (GHG) emissions (MT CO2e)1,856,0001,760,0001,630,7001,448,7001,371,100
Total Scope 1 and market-based Scope 2 greenhouse gas (GHG) emissions (MT CO2e)1,856,0001,760,0001,630,7001,501,0001,409,600
Total Scope 3 greenhouse gas (GHG) emissions (MT CO2e)N/AN/A5,760,0005,510,7007,975,100
Note: Tracking of all of our Scope 3 emissions, beyond business travel, began in 2014. 
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 1 & LOCATION-BASED SCOPE 2 ENERGY USE (% OF TOTAL)1

20122013201420152016
Natural gas (Scope 1)58%59%60%60%61%
Purchased electricity (Scope 2)2,325%23%24%25%25%
Fleet fuel (Scope 1)13%12%11%10%10%
Purchased steam (Scope 2)3%4%3%3%2%
Fuel oil (Scope 1)1%2%2%2%1%
Spent solvents (Scope 1)0.3%0.1%0.2%0.1%0.1%
Coal (Scope 1)0.0%0.0%0.0%0.0%0.0%
Renewable energy generated and used on-site40.0%0.0%0.0%0.01%0.04%
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.
3. Includes solar, wind and other renewables generated on-site where renewable energy credits (RECs) have been sold.
4. Includes solar, wind and other renewables generated on-site where REC or guarantees of origin have been retained or retired.

SCOPE 1 & MARKET-BASED SCOPE 2 ENERGY USE (% OF TOTAL)1

20122013201420152016
Natural gas (Scope 1)58%59%60%60%61%
Fleet Fuel (Scope 1)13%12%11%10%10%
Fuel Oil (Scope 1)1%2%2%2%1%
Spent solvents (Scope 1)0.3%0.1%0.2%0.1%0.1%
Coal (Scope 1)0.0%0.0%0.0%0.0%0.0%
Purchased electricity (Scope 2)2,325%23%24%25%24%
Purchased Steam (Scope 2)3%4%3%3%2%
Renewable energy generated and used on-site or purchased40.0%0.0%0.0%0.01%0.3%
1. May not add to 100 percent due to rounding.
2. Reported using Scope 2 market-based value in accordance with the Greenhouse Gas Protocol.
3. Includes solar, wind and other renewables generated on-site where renewable energy credits (RECs) have been sold.
4. Includes solar, wind and other renewables generated or purchased where REC or guarantees of origin have been retained or retired.

SCOPE 3 GHG EMISSIONS (MT CO2E)

20122013201420152016
Purchased goods and services1, 2N/AN/A4,437,7003,408,5006,204,000
Capital goods1,3N/AN/AN/A474,000224,000
GHG emissions from fuel and energy-related activities not included in Scope 1 & 2 2,4,5N/AN/A309,500276,200304,500
Upstream transportation and distribution1,2N/AN/A258,000241,700255,500
Waste generated in operations (excluding recycled & composted waste)2,5,6,7 N/AN/A23,50020,60016,800
GHG emissions related to employee business travel8,9127,000123,200182,600283,300265,400
Employee commuting2N/AN/A320,700302,400301,500
Downstream transportation and distribution2,10N/AN/AN/A211,000118,000
GHG emissions from use of sold products11,12N/A186,900228,000255,000248,400
End-of-life treatment of sold products2,13N/AN/AN/A38,00037,000
Total127,000310,1005,760,0005,510,7007,975,100
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 that were based on our 2016 third-party spend data and an economic input-output model performed by Climate Earth, Inc.
N/A: 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 2014.
3. Data not available before 2015.
4. Emission factors from Argonne National Laboratory's GREET Model were used in conjunction with primary fuel and energy-use data.
5. Data as reported historically, not baseline adjusted.
6. Primary-waste data were used with the U.S. EPA’s WARM Model.
7. Including recycled and composted waste in these calculations would result in negative emissions in 2014 (-39,900 MT CO2e), 2015 (-40,200 MT CO2e) and 2016 (-60,200 MT CO2e).
8. 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).
9. Beginning in 2014, emissions are based on primary vendor data where available and economic input-output modeling performed by Climate Earth, Inc., using spend data.
10. 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.”
11. 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.
12. Data not available before 2013.
13. 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.