EHS Management & Compliance

EHS Management & Compliance

Protecting our people, our communities and the environment is fundamentally important to the way our company operates.

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Our company strives to conduct business in a safe and environmentally responsible manner. We are committed to providing a safe and healthy workplace for our employees and to reducing the environmental impact of our operations around the world. We believe that promoting wellness for employees and respect for the environment is not just the lawful thing to do; it’s the right thing to do.

In addition to complying with all applicable country, regional and local safety and environmental laws, we strive for Environmental, Health and Safety (EHS) performance that is among the best in the pharmaceutical industry. We also adhere to the following key operating principles:

  • Maintain a safe and healthy working environment for all employees, contractors and guests
  • Foster a culture of EHS excellence that is built on integrity, accountability, personal responsibility, collaboration and active employee participation
  • Seek to continuously improve our EHS systems, processes and standards
  • Minimize our impact on the environment by identifying and implementing approaches to reduce the resources we use during the design, development and manufacture of our products
  • Understand the potential hazards associated with our products and take action to minimize any potential risks or adverse impacts
  • Promote EHS excellence in our supply chain by entering into business relationships with partners that share our commitment to responsible EHS stewardship

Our EHS Management System is based on the “Plan, Do, Check, Act” model, which allows us to assess and continually improve our practices over time. The model is implemented globally through a set of interwoven business processes that span the corporation:

  • Our planning process includes developing goals, objectives and metrics based on a review of our company’s performance, EHS programs, applicable regulations and external factors that may impact our business [PLAN]
  • Activities are performed by using standards, guidelines and tools, that are integrated into the EHS Management System and include specific expectations for sites and operating organizations [DO]
  • Governance committees, from the executive-level EHS Council through site-based compliance committees, review the company’s performance and progress against objectives throughout the year [CHECK]
  • Corrective actions and continuous-improvement initiatives are established to resolve EHS concerns that have surfaced during periodic assessments, audits and routine surveillance of the regulatory landscape [ACT]

Training

Training is critical to building worldwide employee competencies that will improve compliance, reduce risks and drive continuous performance improvement.

We have a global standard that defines the Environmental, Health & Safety (EHS) training expectations for employees in three categories:

  • Manager Training covers specific management responsibilities with regard to safety and environmental compliance and promoting a “safety first” culture
  • EHS Professional Training is designed to expand technical expertise and improve our EHS capabilities around the world
  • Employee Training covers the specific information our employees need to perform their jobs in a safe and environmentally compliant manner, focusing on hazards and control measures they encounter on the job

Site EHS professionals complete an assessment of the activities performed at their sites and ensure that relevant topics are included in their site training plans. They develop employee training curricula to comply with internal and regulatory training requirements.  These training programs are reviewed periodically to ensure that they remain current. Our EHS training program materials are available in both instructor-led and e-learning formats. We also conduct periodic Web-based seminars to inform EHS professionals of changes in regulations and standards.

A mandatory course for all senior company leaders highlights the importance of EHS to the business, the critical role senior leaders play in EHS performance, and the specific actions our leaders can take to drive their areas of accountability toward EHS excellence.

EHS Governance

Our commitment to the environment and employee health and safety begins with the company’s Executive Committee, which has established the corporate Environmental, Health & Safety (EHS) Council.

The EHS Council is composed of senior-level executives representing all business units, and is responsible for overall EHS governance, as well as for leading and driving enterprisewide excellence in EHS management and performance.

The Council’s responsibilities include:

  • Establishing EHS strategy, policy and standards
  • Providing companywide oversight of environmental and employee safety issues, risk mitigation and control strategies
  • Monitoring performance, establishing continuous-improvement targets, and recognizing and promoting EHS excellence
  • Allocating resources and/or sponsoring projects to address specific EHS concerns

An EHS Standards Committee has been chartered by the Council to provide stewardship over the Standards and enable business engagement in the development of new or revised Standards. Each area of the business is responsible for executing against the Standards, contributing to the development of programs, supporting internal audits and communicating significant EHS events. Divisional EHS compliance committees have also been established to provide governance on the implementation of the Standards, and to manage, execute and resolve EHS issues as they arise.

The Vice President (VP) of Global Safety and the Environment (GSE) is responsible for communicating to the Board of Directors, the Executive Committee and the EHS Council regarding progress on goals, objectives and metrics, as well as other material issues. The VP of GSE partners with business leaders to establish long- and short-term goals and performance metrics to drive EHS excellence.

Our corporate EHS organization is responsible for:

  • Developing corporate policies, procedures, guidelines, standards, tools and programs to set expectations and to support EHS compliance
  • Providing technical and regulatory support to site-based EHS staff and operating organizations
  • Managing and implementing an internal audit program targeted at understanding the current state of compliance and identifying potential issues
  • Tracking and communicating internal and external trends that should be addressed
  • Anticipating, tracking and commenting on new regulations affecting our business and, where appropriate, developing plans to address them

Our site-based safety and environmental professionals around the world support the EHS needs of their business areas, which include manufacturing, research operations, sales and administrative activities, by:

  • Ensuring that line management fully understands EHS requirements, including applicable regulations, permit requirements and company EHS Standards
  • Establishing, assessing and improving programs
  • Providing regulatory and technical support to employees and the operating areas
  • Routinely assessing performance against our company standards and regulatory requirements
  • Acting as the primary liaison with local regulators and inspectors
  • Investigating incidents and near-miss events to identify root causes and developing corrective and preventive actions to prevent reoccurrence

Internal Auditing

We have a detailed and rigorous corporate environmental, health and safety audit program.

Our global corporate EHS audit program is one way in which we identify and resolve compliance and performance issues within the company.

  • Our audit leaders are full-time professional EHS auditors with extensive experience in auditing a broad range of EHS programs applicable to the company. The audit team consists of EHS professionals with extensive site and subject-matter expertise. In many cases, particularly outside of the United States, our internal auditors work with independent consultants who have regulatory expertise in the laws of the host country.
  • All audit findings are addressed through the development of corrective and preventive action plans, which are reviewed, approved by the audit leader and regional EHS leader, and tracked to completion
  • Findings from our audit program are communicated to appropriate parts of the organization so that learnings may be shared and actions can be taken
  • Audit performance and key program metrics are reviewed as part of our governance process

The audit frequency for a given facility is primarily risk-based. Manufacturing and research sites are generally audited every one to two years, depending on the type of facility, its size, and other factors. Less complex facilities, such as sales and business offices and our warehouses, are audited less frequently. In 2017, we performed 21 corporate EHS audits of our facilities, covering 27 percent of our manufacturing and research locations and involving 297 auditor days of on-site review activities. The number of audits conducted in 2017 was lower than in previous years due to our focus on implementing EHS Standards for critical safety programs during the second half of the year, when many of our manufacturing sites were concentrating on cyber-recovery efforts.

In addition to our corporate EHS audit program, our sites regularly perform self-inspections, and annually complete self-assessments of selected regulatory requirements and company standards, with all programs being evaluated at least once every three years.

Remediation

Environmental management practices have evolved significantly over the past 30 years.

With research and manufacturing operations dating back more than 100 years, some of our facilities operated at a time when there were few regulations and little understanding of good environmental practices. Because our company has responsibility for remediation of these sites, we have launched investigations, developed science-based remediation plans and implemented cleanup projects to protect the health and safety of our neighbors, communities, employees and the environment, and comply with all applicable requirements. In addition, over time, we have acquired properties and manufacturing facilities that may not have been subject to the same EHS management standards that we have in place today. We are also investigating and remediating those properties where necessary.

We spent $10 million in both 2016 and 2017 for remediation and environmental liabilities, including at formerly owned and operated sites. Our company has an environmental liability reserve of approximately $75 million to fund the continued remediation of these sites into the future. In addition, we are a potentially responsible party at 19 multi-party Superfund sites in the U.S.

Performance

Our centralized EHS information system allows us to collect, manage, learn from, and share our safety and environmental performance data more efficiently.

We collect and analyze data in both leading and lagging metrics to look for potential trends and identify opportunities that can help drive performance improvement. We continuously explore new ways to learn from and report on our performance.

NOTICES OF VIOLATIONS (NOV) & CITATIONS20132014201520162017
Environmental71716125
Safety911223
FINES20132014201520162017
Environmental fines paid$1,167$81,600$92,270$33,906$0
Number of environmental fines14620
Safety fines paid$3,827$1,000$0$0$0
Number of safety fines 21000

NOTICES OF VIOLATIONS, FINES AND SETTLEMENTS

We report all forms of EHS compliance notices using the term Notices of Violation (NOVs), which includes citations, letters of warning and notices of noncompliance from environmental and safety-focused regulatory agencies.

In 2017, we had 164 EHS-related regulatory agency inspections of our facilities around the world. We received no safety or environmental NOVs and paid no fines in 2017.

SIGNIFICANT ENVIRONMENTAL EVENTS

A “significant environmental event” is defined as an environmental release that results in environmental harm to humans, aquatic organisms or wildlife, or any environmental release that requires reporting to the U.S. Securities and Exchange Commission. We experienced no significant environmental events in 2017.