CSR Report 2020 by Lundbeckfonden

LUNDBECKFONDEN CSR REPORT 2020

CONTENTS Lundbeck Foundation - CSR report 2020

LUNDBECKFONDEN CSR REPORT 2020

LUNDBECKFONDEN (LUNDBECK FOUNDATION)

OUR BUSINESS MODEL

LUNDBECKFONDEN CSR REPORT 2020

• • • •

CSR POLICIES OF THE LUNDBECK FOUNDATION

THE COMMITMENT TO CORPORATE SOCIAL RESPONSIBILITY

• •

•

LUNDBECKFONDEN CSR REPORT 2020

ESG KEY FIGURES FOR THE FOUNDATION

CSR RELATED RISKS

ESG key figures overview for the Foundation

Unit

2020

2019

2018

Tonne

826

986

857

264

261

257

FTE

Times

1,7

1,8

Times

12,7

12,2

12,7

Sustainability Report 2020

Visit the Lundbeck website www.lundbeck.com Photography Jens Honoré (cover, p.2, 17), Tuala Hjarnø (p.4, 10), Anera (p.10), Lundbeck (p.16). Design Make® February 2021

“ I would never dare to share my history for fear of appearing weak.”

Ongoing commitment Lundbeck is a participant in The United Nations Global Compact which we became a signatory to in September 2009. We would like to express our continued support for the Global Compact and hereby renew our ongoing commitment to the initiative and its principles.

About Lundbeck Lundbeck is a global pharmaceutical company specialized in brain diseases We are tirelessly dedicated to restoring brain health, so every person can be their best. To fulfill this purpose, Lundbeck is engaged in the research, development, manufacturing and commercialization of pharmaceuticals across the world. For more than 70 years, Lundbeck has been at the forefront of neuroscience research. With our unique position as specialists in brain disease, we want to raise disease awareness and challenge the international agenda for broader acceptance of patients and increased opportunities for better treatment.

Ruth Joseph USA The stigmatization of people with depression infiltrates schools, workplaces and even families. In the latest issue of Lundbeck Magazine, you can meet a number of brave people who have now chosen to speak out about their disease and how it impacts their life. One of them is 52-year-old Ruth Joseph. Depression entered Ruth’s life back when she was a stay-at-home mother with two small boys. She was

Lundbeck Sustainability Report 2020

living what she describes today as “a dream life” – and yet she felt ashamed. She felt ashamed that she wasn’t happy. True happiness and fake happiness can look like each other, but they lie worlds apart. Ruth has known both and she knows a great deal about keeping your vulnerability hidden. “I would never dare to share my history for fear of appearing weak,” Ruth says.

Contents

2020 highlights

Impact 8 Global health and wellbeing 11 Climate action and circularity 13 Business ethics 15 Inclusive and safe working conditions

Factbook

New science-based climate target for entire value chain approved

Launched partnership with IHP on product donations

18 Introduction to ESG factbook 19 Environment 22 Social

Deborah Dunsire President and CEO of Lundbeck

Introduction 4 Letter from the CEO 5 Our approach to sustainability 6 Efforts and aspirations

68% recycling of solvents in production

24 Governance 26 Reporting on targets

Ranked #4 globally on the Net Promoter Score measuring patient groups’ willingness to work with and recommend the company

27 TCFD reference index 28 Accounting principles

Global Diversity & Inclusion Forum recommendations from employees adopted

30 Assurance report Achieved “ESG Industry Top Rated” by Sustainalytics

Lundbeck Sustainability Report 2020

Letter from the CEO

Introduction

Impact

Factbook

Committed to increasing impact In 2020, the pandemic placed unparalleled demands on our healthcare systems, and has also had a tremendous impact on mental health around the world. It has in many ways been a year to remind us of the importance and challenges of good health and wellbeing for all.

We are delighted to share with you this report, which demonstrates how we are making progress towards our 2030 sustainability aspirations, even in the face of the extraordinary challenges we confronted during 2020. As a pharmaceutical company, restoring brain health so every person can be their best is our guiding purpose. Research and development of medical treatments is our biggest contribution to society. Over and above this, we believe we have a responsibility to help patients access these life-altering treatments. We are delighted to introduce a new initiative in our Access to Brain Health strategy – the product donation partnership with IHP, which will benefit some very vulnerable families. With this sustainability report, we announce a new science-based climate target. It has been rewarding to watch our carbon emissions go down, driven by our long-term action plan initiated over a decade ago. Reports back from our production and research sites around the world demonstrate the tremendous progress we continue to make in pursuing these goals.

Lundbeck Sustainability Report 2020

With our new, ambitious climate target, our Executive Management team will expand the work we do across our value chain, in collaboration with all our partners and suppliers and we will ramp up our employee engagement on climate action. We are also reporting on activities to train and support our employees to do the right thing as a responsible business. At Lundbeck, we are grounded in our belief that we must act with integrity and respect in everything we do. It is the best business decision every time. Over the years – and again in 2020 – our stakeholders have rewarded us with strong trust ratings. Last year we introduced a company-wide Diversity & Inclusion Forum. As much as we need a global and cross-functional working organization, we also need a diverse and inclusive one too. It has been demonstrated time and again that innovation and creative solutions to complex problems are better driven by diverse teams. Diversity is not only the right thing to promote from a social aspect or a community aspect, but it is the right thing to do for business. Only when every

person can bring their full experience to bear on the challenges we face in discovering new medicines, will we succeed. As a company, we continue to stand against all forms of discrimination and stand for creating a workplace where every person is respected. At Lundbeck, we believe that we can only succeed if we can build our business in a sustainable way. We are proud of our progress and hope that you will find this Sustainability Report inspiring!

Deborah Dunsire President and CEO of Lundbeck

“ Diversity is not only the right thing to promote from a social aspect or a community aspect, but it is the right thing to do for business”

Our approach to sustainability

Introduction

Impact

Factbook

This is sustainability at Lundbeck The United Nations Sustainable Development Goals are the blueprint for achieving a better and more sustainable future for all. Addressing the world's global challenges is a shared responsibility. Together with our partners, we focus our efforts where we can make the most significant impact. Contributing to society At Lundbeck, our most important contribution to society is easing the global burden of the millions of people living with brain diseases. And we are one of the few companies in the world that focus exclusively on this unmet need. Brain health Our treatments reach more than 7 million people everyday living with brain diseases worldwide. We are relentless in our focus to help even more. As part of our commitment to sustainability, we have launched our Access to Brain Health strategy. The strategy builds on four long-term aspirations to make innovative treatment available through R&D, promote accessibility, enhance cultural acceptability and provide safe and efficacious medical products. Our aspiration is to enhance access to brain health for the most vulnerable. We aim to accelerate our efforts through strategic partnerships and collaboration with leading experts. In many parts of the world, brain disease comes with a high degree of social stigma. To advance a more

Lundbeck Sustainability Report 2020

inclusive world, we work with international and local advocacy groups to promote disease awareness, combat stigma and empower people living with brain diseases. Climate action Science and innovation are at the heart of what we do. It enables us to foster groundbreaking discoveries within neuroscience. But it also plays a pivotal role in helping us, as a company, prioritize climate action. We are leaders in climate action, and we measure everything we do with the most ambitious reduction targets set by science. Throughout our value chain, we continue to reduce our carbon footprint, becoming more circular and increasing recycling. Ethics, trust and transparency Trust is essential. To us, and to our industry. And as a business partner, we promote integrity in the pharmaceutical industry. We take prudent actions to remain responsible. We require our employees and business partners to act with respect and integrity in everything they do, to maintain trust and safeguard our license to operate.

At the same time, we are actively promoting inclusion, equality and a safe working environment for Lundbeck employees worldwide. Our commitment Globally, the number of people living with brain diseases is growing. We will remain steadfast in our commitment to chase the scientific breakthroughs

that enable us to deliver hope. We will advance innovation in balance and not at the cost of nature – and we will continue to set ambitious sustainability targets while delivering life-changing innovation to the people who need it. The model below illustrates our contribution to the Sustainable Development Goals.

Tirelessly dedicated to restoring brain health, so every person can be their best

PARTNERING FOR IMPACT

DEDICATED TO RESTORING BRAIN HEALTH

PURSUING A ZERO-EMISSIONS FUTURE

USING OUR INFLUENCE TO PROMOTE CHANGE

Efforts and aspirations

Introduction

Impact

Factbook

Our sustainability strategy In early 2020, Lundbeck launched a new sustainability strategy. The sustainability strategy aims to ensure that our business activities are conducted in a way that supports seven Sustainable Development Goals (SDGs) and mitigates significant risks and adverse impacts.

Every year, Executive Management evaluates our sustainability performance and establishes targets for the coming year to contribute to solving societal challenges where we can and to enhance our risk mitigation. You can read about the progress on these targets throughout this report.

We have set ourselves a number of 2030 aspirations to guide our sustainability efforts. You can see them below. We invite all our stakeholders to hold us accountable to our aspirations and to join us in collaborative efforts for making real impact.

Our selected Sustainable Development Goals (SDGs) Our aspirations for 2030

• Leverage our specialist knowledge to address the burden of brain diseases and continue to make medicine available • Promote accessibility of our medicines by addressing discriminatory, physical, economical and informational barriers • Improve mental health parity, reduce stigma, support national suicide prevention efforts and enhance cultural acceptability of brain diseases • Provide high-quality medicinal products, safeguard patient safety and combat counterfeit medicine

Lundbeck Sustainability Report 2020

• Deliver on the “Business Ambition for 1.5°C” pledge • Transition electricity supply to renewable sources • Manage two-thirds of value chain carbon emissions equally as effective as carbon emissions from operations • Minimize key business partners’ carbon emissions reflected in relevant agreements

• Be recognized by employees and externally as a workplace with an inclusive culture that offers equal opportunities for all • Influence the public debate on equality and inclusion by setting ambitious targets, enhancing data transparency and communicating actively • Request key business partners to promote diversity and prevent discrimination in all its forms

• Be recognized as a workplace that fosters physical and mental wellbeing • Show leadership to promote mental health with preventive actions at our workplaces globally • Achieve a lost time accident frequency below 3

• Establish manufacturing processes based on circular economy principles to limit materials use, waste and carbon emissions

• Promote business ethics including human and labor rights through strengthened collaboration with key business partners

• Expand application of circular economy principles to key partners

• Demonstrate that the Code of Conduct compliance program and organization works, i.e. sustains an ethical culture and prevents any form of corruption

• Use detailed knowledge about active pharmaceutical ingredients to minimize environmental impact

• Protect the integrity of the healthcare professionals we work with and use transparency as an asset

How Lundbeck makes an impact Our most material sustainability issues are reflected in the Sustainable Development Goals (SDGs) that we significantly impact. Our biggest contribution to sustainable development – and where we bring most value to the communities we serve – is our medical treatments and the good health and wellbeing they bring to people. We also take a leading role in climate action and promote an ethical, safe and inclusive culture in our operation and our value chain.

In this section 8 Global health and wellbeing 11 Climate action and circularity 13 Business ethics 15 Inclusive and safe working conditions

Lundbeck Sustainability Report 2020

13 Sustaining an ethical culture For us, responsible business conduct is an integral part of our sustainability work. It helps us make decisions that create a positive impact and steers us toward making choices that contribute to the common good of all – particularly patients.

Global health and wellbeing

Introduction

Impact

Factbook

Access to brain health for all Covid-19 has brought attention to the inequalities in access to healthcare that persist both within and among countries. It has added to ample evidence that income and social inequalities have substantial adverse health outcomes, regardless of a country’s income level. Notably, there is a strong link between poor mental health and economic hardship, which has been felt by many in communities everywhere during this pandemic.

60m EUR

Committed to innovation and availability

Better tools for tougher challenges

More than 790 million people are living with a mental health disorder.1 That is roughly 10% of the world's population. The unmet need for new treatments within psychiatric and neurological disorders remains significant. Because of the high-risk nature of the work, many companies have reduced investments and abandoned research in the field. In the past decade, the number of psychopharmacological drugs research programs in larger drug firms has shrunk by 70%.2

To combat the rapidly escalating mental health crisis emerging from the Covid-19 pandemic, Lundbeck North America and Mental Health America (MHA) teamed up to launch an initiative that will create a U.S. mental health dashboard. The initiative will analyze mental health screening data sets to generate important population-based insights. Real-time analysis will allow the nation to recognize and react quickly to mental health trends exacerbated by the pandemic and address disparities faced by diverse populations.

At Lundbeck, we have increased our focus and research in the field. With our Expand and Invest to Grow strategy, we will accelerate our efforts and the likelihood of succeeding through strategic partnerships and collaboration with leading experts. Why? Because people living with brain diseases depend on it.

This sophisticated new tool can be used to help map clusters of people with mental health concerns, recognize factors that increase risk for poor mental health outcomes, direct appropriate allocation of resources, and identify what interventions would be most

The Lancet (2018), GBD 2017 Disease and Injury Incidence and Prevalence Collaborators. 2 https://www.biopharmadive.com/news/pharma-neuroscience-retreat-return-brain-drugs/570250/ 1

Lundbeck Sustainability Report 2020

SCIENTIFIC GRANTS The Lundbeck Foundation awarded scientific grants of EUR 60m for biomedical research focused on the brain in 2020.3

WORLD MENTAL HEALTH DAY 2020 In support of World Mental Health Day in October 2020, we engaged all our offices in awareness efforts and published a Lundbeck position paper to advocate for Mental health for all.

TRUSTED BY PATIENTS This year, Lundbeck ranked #4 of 48 global pharma companies on the Net Promoter Score measuring patients’ willingness to work with and recommend us.4

The Lundbeck Foundation is a separate entity and is Lundbeck’s largest shareholder, holding 69% of the share capital and voting rights. 4 Based on feedback from 1,850 patient groups in 95 countries, 48 pharma companies were surveyed for their corporate reputation based on 12 different indicators.

Global health and wellbeing

effective in addressing the mental health impacts of Covid-19 and future high-impact events such as natural disasters and community violence.

Addressing accessibility

health, we have a responsibility to contribute to global collaborations and drive initiatives. We work alongside international and local advocacy groups to advance brain health worldwide.

We have a responsibility not just to develop treatments and cures but also to help patients access them.5 In 2020, Lundbeck established our Access to Brain Health strategy that goes beyond making safe and efficacious medicine available. The strategy centers on brain health accessibility for the most vulnerable.

Guided by our Progress in Mind model, we partner with key stakeholders, including people with brain diseases, their families and the healthcare community. In 2020, our involvement spanned awareness-raising campaigns such as World Mental Health Day and World Suicide Prevention Day, where we also engaged our employees globally.

In the coming years, we will take additional actions to address discriminatory, physical, economic and informational barriers to make safe and efficacious brain disease treatments more accessible. Action is needed to address stigma6 and ensure parity of care7. And we have initiated dialogue with selected stakeholders to scope and direct concerted efforts.

Another key focus area is evidence generation. We have made possible research and surveys on depression in the workplace, evidence on the value of carers, and a socio-economic assessment from the London School of Economics on early interventions in psychosis.

Through various initiatives, we work to reduce the burden of inequality and provide appropriate assistance to people who depend upon Lundbeck’s therapies. For instance, healthcare can fall short for uninsured or underinsured people, impacting their access to necessary medications. In 2020, we entered into a new global mental healthcare partnership with International Health Partners (IHP). It is an exciting new project, and we look forward to donating products and making a real impact together for some of the most vulnerable people in the world.

Progress in acceptability For many years, Lundbeck has worked to enhance cultural acceptance of brain diseases, to improve mental health parity and reduce stigma – and support disease awareness and offer education. As a leader in brain

Due to the pandemic, educational programs have had heightened importance and relevance. We are pleased to have supported Rethink Depression, Brain Talks, Carer Academy for People with Psychosis, and capacity-building programs for patients with conditions such as Alzheimer’s Disease and migraines.

GIVING PATIENTS A VOICE In 2020, Lundbeck’s global R&D underwent a significant reorganization to strengthen our patient and caregiver insights – as well as engagement in drug development. Our focus in the coming years will be on specific underrepresented groups in clinical trials and how digital healthcare can help address access barriers.

Introduction

Safeguarding patients The quality of our medicines is paramount to us and our actions to provide good quality medicines cover the entire value chain, from early research, clinical development and manufacturing, through distribution to pharmacies. We integrate our quality and patient safety processes into our ‘Good Practice’ GxP Quality Management System for Laboratory (GLP), Clinical (GCP), Pharmacovigilance (GPvP), Manufacturing (GMP), and Distribution (GDP). We successfully combat counterfeit medicine8 with stringent measures to secure our supply chain. We protect the integrity of our products to ensure that genuine Lundbeck medicines reach patients every time.

Lundbeck Sustainability Report 2020

Factbook

EXPLORE FACTBOOK

The WHO states that a combined psychosocial and pharmacological approach is likely to yield the best results when treating mental health disorders. 6 The stigma attached to mental illness often leads to social exclusion and discrimination and creates an additional burden for the affected individual. 7 Parity of care refers to valuing mental health equally with physical health. 8 Counterfeit medicine is fake medicine that is deliberately mislabeled, with the correct or wrong ingredients, without active ingredients, with insufficient active ingredients or with fake packaging. 5

ACCESS TO BRAIN HEALTH STRATEGY Lundbeck’s Access to Brain Health Strategy aspirations reflects four right to health principles9:

Availability We leverage our specialist knowledge to address the burden of brain diseases and continue to make medicines available.

Accessibility We promote the accessibility of our medicines by addressing discriminatory, physical, economical and informational barriers.

Acceptability We improve mental health parity, reduce stigma, support national suicide prevention efforts and enhance cultural acceptability of brain diseases.

Good Quality We provide high-quality medicinal products, safeguard patient safety and combat counterfeit medicine.

Impact

Inspired by the WHO and OHCHR “Factsheet No. 31 - The Right to Health”.

Global health and wellbeing

Introduction

“We are delighted to be able to offer our first targeted mental health program through the partnership with Lundbeck. Our collaboration will lighten the burden for those living with poor mental health and help to change perceptions of these complex and often stigmatized conditions.”

Adele Paterson CEO, International Health Partners

About the partnership At least two billion people in the world do not have access to essential medicine. International Health Partners (IHP) is a UK-based charity that coordinates the safe and responsible donation of medical products from the healthcare industry to vulnerable communities around the world who would otherwise have no access. IHP only provides long-dated and quality donated medicine, working with a strong network of global healthcare industry donors.

Lundbeck Sustainability Report 2020

The partnership between IHP and Lundbeck will support the demand for the much-needed mental health medicines in some of the world’s most vulnerable communities. Both organizations are dedicated to improving access to essential medicines and are now joining forces to support the lives of people suffering from mental health diseases.

Staff member at Anera clinic, Lebanon.

Impact

Factbook

Climate action and circularity

Introduction

Impact

Factbook

Stepping up on climate action As a Danish company, we have a history of being at the forefront of corporate leadership on climate change. We believe we have a responsibility to act. That is why we have committed to net-zero emissions and can now announce our new science-based target. Reinforcing our leadership With the launch of this report, we are proud to announce that Lundbeck has decided to take an ambitious step forward to reinforce its climate leadership. In December 2020, Lundbeck received the third-party approval for a new science-based climate action target, one of the most ambitious in the pharmaceutical industry. The Science Based Targets initiative (SBTi) defines and promotes best practice in science-based target setting and independently assesses companies' targets. Science-based targets provide companies with a clearly-defined path to reduce emissions in line with the Paris Agreement goals.

We believe in science Historically, Lundbeck has demonstrated its commitment to cut carbon emissions. A main part of the reduction comes from optimization of existing buildings, plants and installations, as well as investments in new low-energy machines and plants. Lundbeck has also made a shift from conventional fuel to bio-fuel. As illustrated on the following page, the carbon footprint we leave outside our fence is approximately nine times as high as inside the fence. We need to address

“ We are very pleased to see Lundbeck reinforce its leadership in the transition to a net-zero economy. By setting ambitious new science-based targets consistent with limiting warming to 1.5°C, they are taking action to prevent the most damaging effects of climate change.” Alberto Carrillo Pineda Director Science Based Targets CDP, one of the Science Based Targets initiative partners

that more strongly. And with our new climate plan, we take responsibility for it. Lundbeck’s new ambitious climate plan addresses carbon emissions across our entire value chain – from operations and products to raw material production, clinical trials, distribution and end-of-life.

3 ELEMENTS IN LUNDBECK’S NEW CLIMATE TARGET

Science tells us we have to do this – that we can do it. And we believe in science.

• Commit to carbon neutrality no later than 2050

Engaging employees and business partners on innovation

• Further reduce carbon emissions from production and fleet drastically by almost two-thirds over the next 15 years1

At Lundbeck, partnerships are an integral way of working. Consequently, collaborating with stakeholders to reduce emissions while doing business together is only a natural extension of our way of working.

• Work with our suppliers and customers to reduce our carbon footprint outside our premises by nearly a fifth over the next 15 years2

Engaging everyone in our sustainability efforts is an approach we favor. And we have kicked off our new climate target with workshops mobilizing employees across the organization to identify and prioritize potential reduction measures. We will work in close collaboration with our business partners, informing them of our ambitions, collabo-

WE HAVE CUT DEEP ALREADY Since 2006, we have reduced our CO2 emissions from our production by more than 70%3.

Reduce scope 1 and 2 CO2e emissions by 63% in 2034 compared to 2019. Reduce a share of scope 3 CO2e emissions by 19% in 2034 compared to 2019. 3 Emissions from operation of our sites. 1

Lundbeck Sustainability Report 2020

Climate action and circularity

rating to raise awareness and set targets. And we will ask for innovative and circular solutions for our raw material and packaging.

Introduction

Impact

Factbook

Where do our climate emissions come from? Total CO2e emissions in 20192

Circularity and climate action go together We aspire to move away from the traditional linear ‘take-make-dispose’ manufacturing model to a more regenerative model. By combining continuous production with recycling principles, we work continuously to become circular, integrating different manufacturing processes and reusing materials across different processes.

31%

GOODS & SERVICES

12% FLEET

Circularity’s potential to reduce emissions has been extensively documented.1 A more resource-efficient, circular economy is essential to minimize resource consumption and waste generation as well as for achieving the Paris Agreement’s goals. We consider applying circular principles as a fundamental part of achieving Lundbeck’s climate targets.

11%

BUSINESS TRAVEL

Solar-powered production As a first step towards our new climate target, Lundbeck has in 2020 signed a Power Purchase Agreement (PPA) with a solar plant developer. The agreement covers our entire electricity consumption for operations located in Denmark for the next seven years. And it will allow the developer to receive the necessary financing for building the solar power plant, which will come into operation in 2022.

15%

EXTERNAL RESEARCH & CLINICAL TRIALS

In the coming years, we will explore the possibilities for similar solutions in France, Italy and the U.S.

CUSTOMER EMISSIONS

11%

EXPLORE FACTBOOK

Lundbeck Sustainability Report 2020

PRODUCT INPUTS & PACKAGING

Ellen MacArthur Foundation and Material Economics (2019): ‘Completing the picture: How the circular economy tackles climate change’. Source: 2019 baseline carbon footprint calculation by Lundbeck with assistance from Carbon Trust. Site power & heat and Fleet roughly corresponds to our Scope 1 & 2, illustrated with the gray orbs.

DISTRIBUTION

SITE POWER & HEAT

Business ethics

Introduction

Impact

Factbook

Sustaining an ethical culture It is essential that our stakeholders and business partners trust us – and that our employees trust one another. To earn that trust, we are committed to creating a strong ethical culture. Our Code of Conduct lays out the foundation for that culture. And we strive to create transparency throughout our value chain beyond the regulations that govern us to strengthen your trust in us.

Responsible business There is a general increase in society's expectations of the healthcare sector and the pharma industry is governed by mandatory ethical codes and regulations. At Lundbeck, we welcome being guided by ethical responsibility and with respect for the constantly evolving stakeholder expectations.

supplier and third-party obligations – and more. Lundbeck wants to make sure that everyone understands the requirements and knows how to act responsibly. And we provide all our employees with the best possible conditions to act responsibly.

Doing the right thing

Every year, our employees complete corporate training on our Code of Conduct and relevant procedures, including local discussions on ethics and compliance. In the last quarter of 2020, all employees and managers completed our Code of Conduct e-learning, which was available in eleven different language versions. This year, it contained scenarios to stimulate reflections on working from home, personal use of social media, conflict of interest and everyone’s personal accountability for compliance.

Our Code of Conduct conveys Lundbeck’s commitments and expectations of our employees within areas critical to us and the pharmaceutical industry. It covers patient safety, anti-corruption, promotional activities, fair and open competition, personal data protection,

We also ran a global employee e-learning on patient safety, campaigns on ethical decision making and safeguarding personal data. And we trained all people managers in IT security and authorization.

Responsible business conduct and compliance are dynamic measures and integral to our sustainability work. This helps us navigate decisions with a broader perspective and steer us towards making a positive impact and contribution to society and the patients we serve.

Lundbeck Sustainability Report 2020

Furthermore, we support training with audits and continual monitoring to validate understanding of local requirements and collect suggestions for improving our way of working.

Global and local organization 2020 marked the 10th anniversary of our Code of Conduct and compliance program that has gradually evolved. We decided to formalize the compliance program and strengthen our global compliance organi-

26,729 interactions disclosed

zation ensuring that all sales affiliates globally are supported by one of the 17 regional compliance officers. The new organization convenes the regional compliance officers and our headquarters' compliance functions regularly to develop the compliance program and share best practices. We believe that connecting the global and local perspectives will further accelerate the continuous improvements of the compliance program.

AIMING BEYOND MANDATORY DISCLOSURE In 2020, we disclosed the value of 26,729 interactions with healthcare professionals across 36 countries where such disclosures are either mandatory or voluntary. That corresponds to 93% of all of our transfers of value. The remainder represents cases where we did not succeed in obtaining permission from the healthcare professional to disclose the value. In the coming years, we will focus our efforts on the countries in which the disclosure percentage is lower.

“ I’m very excited to now be part of the global compliance organization anchoring the ethical culture. I particularly value sparring across regions on international ethics standards and best practice which allows me to be at the forefront of the Chinese market.” Henry Zhang, Legal & Compliance Associate Director, Lundbeck China

Business ethics

Working with healthcare professionals and patients In general, the public perception of the pharma industry remains low.1 At Lundbeck, we continue to be committed to transparency. We believe it is pivotal in building trust. And a key element in creating transparency is disclosure of every interactions’ transfer of value we make to individual healthcare professionals and patients and to their respective organizations. We work with a range of stakeholders, such as healthcare professionals, patients and their respective organizations. We collaborate on research, clinical development, exchange of scientific information and marketing and sales activities.

Introduction

The interactions we have with these stakeholders are well regulated by national laws and industry association standards, and at Lundbeck we integrate these regulations into our processes, training and guidance. In our commitment to transparency, we disclose information according to the current laws and regulations. But we wish to go beyond regulation. In 2020, we assessed data availability and quality to design and implement a global process to support measurement and reporting of KPIs on our progress to increase the proportion of healthcare professionals that support disclosures of interactions.

Supplier and third-party obligations When we provide innovative treatments to patients, we engage suppliers and third parties. When we do

this, it is paramount that our Code of Conduct also applies – throughout our value chain. To assess and verify compliance, we apply systematic due diligence with regards to respecting human and labor rights, environmental protection and preventing corruption.

Impact

Often, we combine a due diligence process with training, performance monitoring and compliance audits, where we emphasize continuous open dialogue with our suppliers and third parties.

EXPLORE FACTBOOK

The specific risk areas assessed are: • Conflict of interest • Financial crime (including corruption, bribery, tax evasion and violations of trade sanctions) • Promotional misconduct • Human and labor rights violations • Significant environmental impact

Lundbeck's compliance program Documents, training, monitoring and governance are the elements that ensure we are doing the right thing, continually improve processes and sustain a compliance culture.

17/10/16 $32.41070 83.44526 DOCUMENTS

MONITORING

TRAINING

Lundbeck Sustainability Report 2020

Caliber (2020), Global Pharma Study 2020 - Public Perceptions of the Pharmaceutical Industry.

Factbook

GOVERNANCE

Inclusive and safe working conditions

Introduction

Impact

Factbook

A shared responsibility We are adamant that everyone at Lundbeck should feel safe and included when they come to work. It is a shared responsibility. In the spring of 2020, we formed a global Diversity & Inclusion Forum with volunteers from across our organization. The Forum’s task was to discuss how we take Diversity & Inclusion in Lundbeck to the next level and present a plan to our Executive Management. Building an inclusive organization In June 2020, our Executive Management decided to include SDG 10 (Reduce inequality) to Lundbeck’s commitment to the SDGs. Societal patterns of inequality are often reflected within social institutions and also businesses. Including SDG 10 will broaden our current commitment on gender equality. It will also help us develop supporting activities to address systemic discrimination based on race, sexual orientation, physical and mental disabilities, income levels and more. Based on the 2020 Diversity & Inclusion Forum’s work, our Executive Management endorsed a two-year plan for 2021-2022 to build an inclusive organization and, at the same time, an organizational D&I toolbox. In 2021, we will also work on different themes such as unconscious bias and cross-cultural awareness. Further, we encourage establishing local D&I Forums where relevant and we will continue with a global D&I

Lundbeck Sustainability Report 2020

a shared responsibility to make sure our work environment is inclusive, safe and a great place to work for all. In particular, our managers have a responsibility to lead by example. And we encourage all employees to report inappropriate workplace behavior, harassment, or discrimination that they experience or see.

Taking a stand In recent years – and in 2020 in Denmark in particular – there has been significant focus, debate and reckoning of sexual harassment in different industries. It has been important to clearly state that we all have

Everyone can report to a direct manager, HR partner, or anonymously through the global Compliance Hotline or to Lundbeck’s Ombudsman.

Council, which will act as a sounding board on future initiatives.

Gender equality One of the Diversity and Inclusion Forum’s specific tasks was to explore how gender distribution can become more equal. For some years, we have measured the gender distribution in managerial positions. Until now, the aim has been to ensure that the proportion of the underrepresented gender is at least 40% globally. In 2020, the proportion of female managers was 42% and the gender split for all employees was 43/57%.1 We have established a target to maintain an overall equal gender split for people managers globally to drive the development. And we plan to address gender equality even more in the coming years by creating more awareness about biases and taking a closer look at our HR-related processes, such as recruitment and promotions.

The measurement includes all managers globally who have people management responsibilities.

Lundbeck’s Board of Directors has set a diversity target that at least one of the members elected by the shareholders should be of the underrepresented gender. In 2020, there was one female board member out of six members elected by the shareholders and one female board member out of three members elected by Lundbeck’s employees.

Our Code of Conduct clearly states that all employees have the right to be treated with respect and that discrimination and harassment of any kind – whether it be related to gender, sexual orientation, nationality, religion, race, or anything else – are not accepted in Lundbeck.

2020 DIVERSITY AND INCLUSION FORUM This year we took a bottom-up approach and established a global D&I Forum with 32 employees as members, representing 15 different locations from all functional areas. Their task was to look into data, initiatives and communication around Diversity & Inclusion.

Inclusive and safe working conditions

Attractive employer Diversity brings new perspectives to the table. And ideas and innovative approaches from diverse employees are needed to develop our company and accelerate our sustainability impact. Diversity among our employees also strengthens our attractiveness as an employer. And we are pleased to note that in August, Lundbeck was ranked the fifth most attractive workplace in Denmark in the Young Professional Attraction Index.

1m USD

COLLABORATION WITH LOCAL COMMUNITY RELIEF ORGANIZATIONS This year Lundbeck North America committed USD 1m in support of Covid-19 relief efforts in communities where our employees work and live, mainly in the greater Chicago region, Seattle and San Diego. These donations enabled local non-profit organizations to provide interim housing and shelter, financial assistance, and primary healthcare and mental healthcare services to vulnerable community members. Lundbeck supports local relief efforts in many of the communities we are part of globally.

Lundbeck Sustainability Report 2020

This comes on top of noteworthy recognition for Lundbeck Australia, Lundbeck Italy, Lundbeck Group Business Services in Poland, which earlier this year received recognition from Great Place to Work Institute, and Lundbeck U.S., which was recognized as a top employer by both the Chicago Tribune and Great Place to Work Institute.

Introduction

Impact

Factbook

You are stronger than you think

Safe and healthy in the face of a pandemic year As the pandemic swept across the world in early spring, employers like Lundbeck had to swiftly address new and pressing health and safety issues. Due to Covid-19, numerous extra health and safety activities have taken precedence to safeguard everyone working for Lundbeck. Since the outbreak of Covid-19, we have been taking necessary precautions to ensure we can continue to provide treatments for the millions of people who rely on Lundbeck. Our supply chain and safety surveillance remain intact, and we have not experienced any supply disruptions due to the pandemic. We have also had increased focus on our employees’ mental health in these uncertain, unusual and unsafe times. To boost resilience, Lundbeck provided a short series of specific training to address mental health challenges, which everyone was encouraged to take.

EXPLORE FACTBOOK

On a brilliant Sydney morning, it was a privilege to join the annual One Door Mental Health Wellness Walk with Lundbeck Australia as gold sponsors of this community event, now in its 8th year. Walking side by side with our advocacy group partners, people living with mental illness and their families, is a positive way to publicly demonstrate our commitment to brain health. “I’m proud of our 80 strong team, including alliance partners from Otsuka Australia, who participated in the event in separate Covid-safe groups across New South Wales, Queensland, South Australia, Victoria and Western Australia. When I explain to my children what I do at work and what Lundbeck stands for, it is this”, says Fredrik Kjær, Managing Director Lundbeck Australia.

In this section 18 Introduction to factbook 19 Environment 22 Social

Facts and figures to support our progress We continuously set ambitious targets, report on progress and disclose a set of externally assured, non-financial indicators across all areas of corporate sustainability and business ethics compliance. This Factbook offers sustainability analysts detailed facts, figures and references on how we govern, manage and monitor sustainability at Lundbeck. The Factbook covers Environmental, Social and Governance (ESG) issues.

24 Governance 26 Reporting on targets

14% 19

Environmental responsibility

27 TCFD reference index 28 Accounting principles 30 Assurance report

Lundbeck Sustainability Report 2020

reduction in carbon emissions in 2020

Introduction to factbook

Introduction

Impact

Factbook

A world of sustainability facts The aim of this factbook is to provide targeted information on our Environmental, Social and Governance (ESG) and sustainability management and performance. You will find facts and figures, status on targets, and reference guidance on where to find further information.

LUNDBECK IN BRIEF

GOVERNING DOCUMENTS

Lundbeck is a global pharmaceutical company with its head office in Denmark, doing business in more than 50 countries, with research facilities in Denmark and the U.S., and a vertical production set-up in Denmark (2 sites), Italy (1 site), and France (1 site).

We build our governance around the principles in our Code of Conduct, which are cascaded as needed into manuals, guidelines, policies and standard operating procedures.

SUSTAINABILITY STRATEGY

OUR STAKEHOLDERS

Lundbeck’s sustainability activities aim to mitigate risks and adverse impacts related to our business activities and to contribute to solving societal challenges where we can. We remain committed to the UN Global Compact Principles and contribute to addressing seven of the UN Sustainable Development Goals.

ESG is a term frequently used in the financial sector, and investors and financial institutions are indeed key stakeholders for us. But equally important to our ESG and Sustainability work are stakeholder groups such as employees, civil society organizations, healthcare professionals, healthcare organizations, patient organizations, communities, suppliers, and third parties.

ESG MANAGEMENT AT LUNDBECK

OUR MATERIAL ISSUES

Environment, Social and Governance (ESG) on a corporate level is managed by Corporate Compliance & Sustainability, and on a topical level by selected subject matter experts. The Executive Management Group is the steering group for the sustainability strategy. Sustainability risk management is part of our general risk approach described in our Annual Report.

Based on internal and external stakeholder dialogue and Sustainability Accounting Standards Board (SASB) Materiality Map® for Biotechnology & Pharmaceuticals 1, and SDG impact we continuously calibrate our material issues.

SASB Standards identify the subset of ESG issues most relevant to financial performance in each of 77 industries.

Lundbeck Sustainability Report 2020

Our current top material issues are: • Patient safety and product quality • Access to medicine •R esponsible business conduct including anti-corruption, transparent interactions, and promotional compliance • E mployment conditions at Lundbeck and in our value chain, including diversity and inclusion • The environment, including climate change

ASSURANCE Selected 2020 indicators presented in the key performance indicators tables on page 19, 20, 21, 23 and 25 have been assessed by PwC in accordance with the ISAE 3000 standard to obtain limited assurance. The assurance report is found on page 30-31.

ESG ACHIEVEMENTS IN 2020 Lundbeck has significantly improved its ESG ratings in 2020 with a concerted effort to report relevant information for investors and analysts. Among our achievements are:

ESG

INDUSTRY TOP RATED

Copyright ©2020 Sustainalytics. All rights reserved. This publication contains information developed by Sustainalytics (www.sustainalytics.com). Such information and data are proprietary of Sustainalytics and/or its third party suppliers (Third Party Data) and are provided for informational purposes only. They do not constitute an endorsement of any product or project, nor an investment advice and are not warranted to be complete, timely, accurate or suitable for a particular purpose. Their use is subject to conditions available at https://www.sustainalytics.com/legal-disclaimers.

Environment

Introduction

Impact

Factbook

Environmental responsibility Our R&D and manufacturing activities are largely based on chemical synthesis, meaning we use considerable amounts of organic solvents and energy, generating waste and air emissions. We manage these environmental impacts diligently to minimize any adverse environmental impacts including impacts from the end-use of our medicines.

ENVIRONMENTAL POLICIES AND PERFORMANCE Lundbeck believes that protecting the environment is a condition for good health and wellbeing. Our Environmental work is governed by our Code of Conduct, our Health, Safety and Environment Policy, and Health, Safety and Environment Strategy. Lundbeck has several positions in relation to the environment. Read online about our positions on

Environmental Footprint, Climate Change, Water, and Biodiversity.

We have a long-standing history of strong environmental management. Lundbeck’s corporate headquarters and our larger research, development and manufacturing facilities are certified to the ISO 14001:2015 standard.

Key performance indicator

Unit

2018

2019

2020

Environmental incidents

No.

Environmental incidents with impact on the environment

No.

Environmental near miss

No.

Lundbeck Sustainability Report 2020

PHARMACEUTICAL RESIDUES We acknowledge stakeholder concerns about pharmaceutical residues in the environment. Residues mainly come from patients’ excretion of medicine taken to treat or prevent a disease. We test the environmental effects of new medicinal products and design processes with the least possible environmental impact. We pursue approaches that balance healthcare needs and environmental considerations in line with the EFPIA’s Eco-Pharmaco-Stewardship Initiative to minimize pharmaceuticals in the environment.

Status on 2020 sustainability targets

ENVIRONMENTAL MANAGEMENT

2020 target

Status

Comment

Reduce CO2 emissions by 4% in 2020 compared to 2019

Achieved

In 2020, we reduced CO2 emissions by 14%

Obtain ‘Science Based Targets initiative (SBTi)’ approval of new climate target

Achieved

In December 2020, we obtained an approval of our new climate target

Note

Recycle 55% of the solvents used in chemical production

Achieved

We have recycled 68% of solvents

Zero environmental incidents with an impact on the environment

Not Achieved

Two incidents with an impact on the environment resulted in us not meeting our target

Environmental management

Our target is to have zero environmental incidents with impact on the environment. In 2020 we did not achieve this target due to two incidents that we have reported in accordance with the terms of our environmental permits. They were both minor and did not result in injunctions or fines. We also saw a small increase in environmental incidents without an impact on the environment from 4 to 7, but a drop in near misses from 43 to 34. We take the increase in incidents very seriously and thorough root cause analysis has been carried out in each case to learn and prevent repetition.

Sustainability target for 2020 of zero environmental incidents with an impact on the environment.

SDG

Environment

CLIMATE AND ENERGY MANAGEMENT Lundbeck is committed to achieving a zero-carbon economy and setting science-based targets. In 2020, we had a new science-based target approved. We over-performed on our previous science-based target for emissions that expired in 2020.

Introduction

In 2020, we continued our focus on saving energy and reducing carbon emissions, e.g. by replacing conventional fuel oil with bio-oil. In 2020, the indirect emissions from our purchased energy was also reduced. In total, we achieved a reduction in carbon emissions from production of 14% compared to 2019, achieving our yearly target of 4%. In the same period, our production volume increased and our energy consumption was almost unchanged. We have not purchased certificates of origin in 2020 to achieve this result.

LEADERSHIP IN CLIMATE ACTION

Carbon Disclosure Project (CDP) Lundbeck is once again proud to be on CDP’s A List. Read our latest CDP Report online.

Task Force on Climate-Related Financial Disclosures (TCFD) We support the TCFD recommendations. See the TCFD Reference Index on page 27 of this report.

Climate and energy Key performance indicator

Unit

2018

2019

2020

Carbon and air emission (total)

Tonne

16,016

17,056

14,751

CO2e

15,973

17,012

14,712

Organic solvents

Tonne

Energy consumption (total)

MWh

94,312

99,605

100,724

Natural gas, methane, City gas, F-gas

MWh

31,365

33,060

33,961

Gasoil, bio-oil, diesel

MWh

11,693

12,027

12,882

District heating

MWh

12,711

12,925

12,330

Electricity

MWh

38,543

41,593

41,551

GHGs

1 2

Lundbeck Sustainability Report 2020

Note

Science-Based Targets Lundbeck has obtained an approval of our science-based target, which includes most of our scope 3 emissions. Read more about our science-based target in the impact section of this report.

1, 3

Business Ambition for 1.5°C Lundbeck has joined visionary leaders around the world by committing to a net-zero, 1.5°C future through the Business Ambition for 1.5°C Campaign. The campaign is an urgent call to action for companies to set ambitious science-based targets from a global coalition of UN agencies, businesses, and industry leaders.

Scope 1 and 2 emissions. Estimated 95% of GHG emissions is CO₂ emissions. Data for district heating in 2019 updated. Data for GHG's in 2019 has been updated due to updated district heating consumption.

Impact

Factbook

Environment

CIRCULARITY, RESOURCE FLOWS AND RECYCLING

Introduction

Key performance indicator Finished goods production (total)

We also made good progress on increasing the recycling of general waste. In 2020, we implemented a recycling program for all plastic foil, which is used to wrap pallet content at our API manufacturing site in Lumsås, Denmark. We have also successfully launched a recycling program for non-used final packaging material (carton packages and package leaflets) in our Finished Goods Department in Valby, Denmark. This means that in 2020, we have sent less waste to incineration. In 2021, we will increase the focus on general waste even though the amounts are relatively small, and we have set a target to recycle 62% of all waste. We work continuously to reduce our consumption of water and waste water and have significantly done so over the years to a very low level. In 2020, we have made significant savings on water consumption mainly due to technological improvements and optimization activity in the cooling system circuit at our production site in Padova, Italy, but also due to a different production mix, as water is primarily used for cleaning equipment. We also managed reduction which can be partly contributed to automation of the waste water management system at our production site in Valbonne, France.

1 2

Lundbeck Sustainability Report 2020

Factbook

Circularity, resource flows and recycling

Over the years, we have refined the skills and technical capabilities of our chemical production to increase recycling of organic solvents and reduce hazardous waste. We set targets each year to improve and in 2020, we are proud to report that we achieved the target of internal recycling 55% of the solvents used in chemical production. This high-technological production process is developed in collaboration with The Technical University of Denmark.

Impact

Unit

2018

2019

2020

Note

Units

2,258,194,100

2,252,128,380

2,514,461,932

Chemical production (total)

Tonne

339

406

369

Raw materials (total)

Tonne

3,758

4,127

3,874

Organic solvents

Tonne

3,667

4.043

3,793

API

Tonne

Cleansing agent

Tonne

Waste (total)

Tonne

12,525

14,157

15,025

Chemical waste

Tonne

11,384

12,900

13,577

Recycling

Tonne

1,278

1,217

1,256

Incineration

Tonne

6,226

7,057

6,507

Biological treatment

Tonne

3,880

4,626

5,815

Landfill

Tonne

General waste

Tonne

1,141

1,256

1,448

Recycling

Tonne

679

769

985

Incineration

Tonne

460

487

459

Landfill

Tonne

Water consumption (total)

374,406

285,671

238,008

Potable water

198,158

195,289

182,291

Unfiltered water

176,248

90,382

55,717

Waste water

344,731

252,219

201,937

A part of waste for incineration from production facility in Lumsås (Denmark) 2018 and 2019 reclassified as biological treatment. Waste for landfill from production facility in Padova (Italy) in 2018 and 2019 reclassified as biological treatment. Wood pallets included in recycling from 2020 only.

CUTTING SOLVENT AIR EMISSIONS In October, the new Regenerative Thermal Oxidiser plant at our manufacturing facility in Lumsås, Denmark was inaugurated by our CEO. The EUR 9m project is an important statement of our commitment to the responsible production of medicines and sustainability. We expect to reduce our solvent air emissions to only 10% of what they are today.

Social

Introduction

Impact

Factbook

Management of social issues In the social area, Lundbeck’s most material issue is product and patient safety which is very robustly managed and governed. Access to medicine is a very material area and we have launched a new 2030 Access to Brain Health strategy to develop our efforts further in the coming years. We also consider conditions for people working for us and our business partners as part of our social responsibility. ACCESS TO MEDICINE For information on Lundbeck’s drug donation program, our position papers, disease awareness material and patient support programs see the impact section of this report.

We collaborate with customs authorities to surveil shipments claiming to contain Lundbeck products and engage with international organizations dedicated to fighting counterfeit medicine.

PATIENT SAFETY Pricing Lundbeck acknowledges the challenges faced by healthcare systems under pressure from rising demands and we recognize concerns expressed on the affordability of innovative medicines. See more in our global pricing position. Combating counterfeit products We take stringent measures to secure our supply chain and ensure that genuine Lundbeck medicines reach patients every time. We protect the integrity of our products by labeling packages with batch numbers, serial numbers and 2D matrix technologies. We use transport companies that have been risk assessed, audited if evaluated necessary and managed through service agreements.

Lundbeck Sustainability Report 2020

The Lundbeck Safety Board is the primary safety governance body at Lundbeck with a mandate to pause development activities globally for safety reasons, including to escalate safety issues directly to the CEO.

PRODUCT QUALITY

PROMOTIONAL ACTIVITIES

Product quality is paramount and a key priority at Lundbeck. All our sites are subject to both internal and external Good Process (GxP) audits as well as regulatory audits.

Promotion of medicinal products is strictly regulated and monitored by local authorities and industry associations. We are committed to complying with applicable laws, regulations and industry codes. This means maintaining processes and providing extensive training to ensure that promotional activities are appropriately assessed.

All Lundbeck sites hold the necessary certifications to operate as a pharmaceutical manufacturer, and we cascade our standards in our value chain through audits and trainings relating to Good Manufacturing Practices and Good Distribution Practices. In 2020, there has been a reduction of physical audits due to the Covid-19 pandemic. But critical audits in our supply chain have been carried out via digital, physical and virtual audits.

Lundbeck’s promotional and advertising review com mittee assesses promotional activities, including materials, produced at our headquarters. Our affiliates are responsible for ensuring that promotional activities, including materials, are assessed in accordance with applicable rules, before the materials are used within the specific local market.

Status on 2020 sustainability targets 2020 target

Status

Comment

Engage all Lundbeck offices in local World Mental Health Day activities

Achieved

63 Lundbeck and 3 partner offices participated

In 2019, a Chief Medical Officer role was introduced and fully implemented in procedures in 2020. The role is linked to the Chair role of the Lundbeck Safety Board.

Establish a product donation partnership

Achieved

Partnership agreement with IHP signed in December

A Covid-19 emergency plan (Business Continuity Plan) for patient safety was activated in March and is still ongoing, with solid planning securing no disruptions in safety obligations, procedures or staffing over the year.

Strive to maintain an overall equal gender split for people managers globally

Achieved

Lundbeck maintains an equal gender split for people managers globally at 42/58%

Reduce lost time accident frequency ≤ 5

Not Achieved

Lundbeck’s lost time accident frequency at 5.5

In 2020, all employees globally were required to complete an online awareness training on patient safety / pharmacovigilance.

SDG

Social

WORKING AT LUNDBECK Our employees are our most important and critical resource. At Lundbeck, we ensure respect for the individual and the continuous development of our employees. And we consider staying safe and healthy at work a fundamental right for all. Diversity and inclusion Lundbeck is a diverse company determined to build an inclusive high-performance culture that allows all employees to enrich their professional skills and career within Lundbeck without discrimination. In 2020, we conducted training on respect in the workplace and updated our global Diversity and Inclusion Policy. Employee satisfaction and development All employees globally participate in an annual Employee Satisfaction Survey, where results of the survey are shared internally, and action plans are put in place where necessary. All employees are also appraised annually and have an opportunity to discuss individual training needs and career aspirations with their immediate manager.

Introduction

home. For persons who have had to come to work physically on-site, Lundbeck has taken all precautions to keep these people safe. We are happy to report a decrease in accident frequency of 11% in 2020 compared to last year, due to preventive actions and less activities on our sites caused by Covid-19 measures. We were however not successful in reaching our 2020 target of a frequency of lost time accident rate below 5, with a rate for the full year of 5.5. We did unfortunately experience a serious working accident at our production site in Valbonne, where an employee sustained a bone fracture to his leg. Our systematic approach to risk assessment has kept the number of work-related diseases very low in recent years. Two allergy cases related to use of gloves were the workrelated diseases registered in 2020. Lundbeck’s corporate headquarters and our larger research, development and manufacturing facilities are certified to the OHSAS 18001 Health and Safety Management System. In 2020, all applicable sites have qualified to replace our OHSAS certification with an ISO 45001 standard certification.

Occupational Health and Safety It is key for Lundbeck that we provide a safe and healthy workplace and inclusive culture. This is addressed and enforced through regular training, awareness campaigns, and internal audits. Lundbeck’s Health and Safety performance is governed by our Code of Conduct, our Health and Safety Policy and our Health and Safety Strategy.

Third parties and suppliers are contractually bound to adhere to local and internationally recognized labor, human rights and environmental standards.

Due to Covid-19, this year’s efforts have been directed at persons working on-site and those working from

Critical or material collaboration partners and suppliers are contractually required to adopt our Third Party 1

Lundbeck Sustainability Report 2020

Factbook

Obligations, which bind them to adhere to relevant sections of Lundbeck’s Code of Conduct.

PHYSICALLY AND MENTALLY HEALTHY

HUMAN RIGHTS STATEMENT In 2020, we updated our human rights statement, expressing our commitment to respect human rights. Additionally, we are advocates for the respect of human rights in relation to mental health. It is a tragic fact that people living with mental health conditions can be amongst the most vulnerable in society, enduring incarceration, chaining, coercion and over-medicalization, stigma and exclusion.2

In 2020, Lundbeck joined the International Association for Suicide Prevention’s Cycle the Globe campaign aimed at raising awareness about suicide prevention and supporting World Suicide Prevention Day. 330 Lundbeck colleagues around the world participated in the campaign and biked a grand total of 67,204 kilometers to raise awareness about suicide prevention and keep themselves physically and mentally healthy – particularly important during a Covid-19 period.

Data privacy Read our Data Privacy Policy to find out more about how we at Lundbeck are committed to safeguarding the rights of patients, research and business partners and our employees, in accordance with applicable personal data legislation.

WORKING STANDARDS IN OUR VALUE CHAIN All raw material suppliers for commercial production and Contract Manufacturing Organizations are subject to a human rights and environmental due diligence prior to engagement with Lundbeck, as well as ongoing monitoring. All such facilities located outside EU/ESS and North America are audited by qualified Lundbeck staff for health & safety, employment and environmental conditions.

For more information about working at Lundbeck, visit our career pages.

Impact

Health and safety Key performance indicators

Unit

2018

2019

2020

Work-related accidents with absence

No.

Work-related near miss

No.

494

554

470

Work-related accidents without absence

No.

Work-related diseases

No.

Frequency

7.5

6.2

5.5

No.

Frequency of lost time accidents Fatalities

Note

Sustainability target for 2020 of lost time accidents frequency ≤ 5. https://www.uhc2030.org/blog-news-events/uhc2030-blog/putting-mental-health-firmly-into-uhc-efforts-is-critical-to-the-success-of-uhc-and-will-reap-benefits-far-beyond-the-health-sector-555439/

Governance

Introduction

Impact

Factbook

Governance and compliance Our Code of Conduct Compliance Program ensures that relevant risks are identified, that procedures to manage them are established, understood and being followed, and that monitoring activities identify and manage needed improvements.

RESPONSIBLE BUSINESS CONDUCT

TRANSPARENT INTERACTIONS

Our Code of Conduct is the backbone of our ethics and compliance culture and is available in 11 different languages. It conveys our commitments and expectations to our employees for areas critical to the pharmaceutical industry. All employees and third parties working on Lundbeck’s behalf are obliged to observe the Code of Conduct and any stricter local regulations.

We are committed to transparency and we are a member of the European Federation of Pharmaceutical Industries Associations (EFPIA).

COMPLIANCE MANAGEMENT The global and local procedures around the Code of Conduct contain more operational requirements and good practices. Lundbeck maintains a Good Practice (GxP) quality management system for patient and product safety to control risks, continually improve processes and meet regulatory expectations. Our audits and monitoring efforts aim to validate understanding of the requirements and capture suggestions for improvements of the processes and controls. Lundbeck’s auditors provide feedback with corrective and preventive actions to ensure local management ownership and follow-up.

Lundbeck Sustainability Report 2020

We disclose the transfers of value we make to individual healthcare professionals and patients and to their respective organizations. In 2020, we disclosed the value of 26,729 interactions with healthcare professionals across 36 countries where such disclosures are either mandatory or voluntary. Read more about interactions with healthcare professionals and patients, a methodological note on disclosures and Lundbeck’s EFPIA Disclosure Code, Self-Certification Scheme.

SUPPLIER AND THIRD PARTY DUE DILIGENCE Our supplier and third party due diligence process specifically looks at identifying and mitigating risks in relation to: conflict of interest; financial crime including bribery, tax evasion and violations of trade sanctions; promotional misconduct; human and labor rights violations; and significant environmental impacts.

The due diligence process takes a risk-based approach and targets goods, services and collaborations where the risks are most prevalent: in chemical manufacturing, customs clearance, product price negotiations, obtaining product marketing authorizations, organizing promotional or educational events, and when selling Lundbeck products. In 2020, our internal experts conducted 100 due diligences to identify and mitigate 35 specific risks in relation to suppliers and third parties.

Read more about our due diligence process on our webpage, see the areas covered by our due diligence process, and the contractual obligations that third parties are required to adhere to.

ENABLING SAFE REPORTING We encourage everyone to have ongoing dialogue on compliance and ethics with their colleagues and manager. However, we realize that some questions, dilemmas or concerns might not be discussed openly, which is why we have a Compliance Hotline and a

Status on 2020 sustainability targets 2020 target

Status

Comment

Annual Code of Conduct training completed by all employees at work globally

Achieved

Annual training launched in November. Achieved a 99.8% completion rate

Work to increase proportion of healthcare professionals supporting disclosure of collaborations compared to the previous reporting year

Achieved

We have developed a data model, established baselines, identified gaps and evaluated approaches

86%

ANNUAL TRAINING Every year, we ask all employees to complete our global Code of Conduct training. In 2020, the e-learning featured ethical dilemmas relating to working from home, using Social Media, managing conflict of interest and personal accountability. In short videos, key managers presented their personal perspectives on good practices. The feedback was positive: 86% of our employees rated the training as either 4 or 5 stars (1-5 scale).

Governance

non-retaliation policy. Our substantiation rate has over the past five years been in the range of 30% to 50%. In 2020, we have worked to increase visibility of the compliance hotline via internal awareness campaigns and externally on localized Lundbeck websites. Read more on what allegations can be reported.

AUDITS AND MONITORING Internal audits Due to the global Covid-19 pandemic we shifted focus from physical audits and monitoring to virtual and desktop based approaches in 2020. We have been able to scale up certain activities as the time effectiveness of monitoring, for instance, a commercial event virtually has provided us with opportunities to join more activities than what is possible physically. Thus we can report an increase in the total number of internal audit activities in 2020. External audits Also due to the global Covid-19 pandemic we have in 2020, where possible, conducted virtual and desktop based audits to ensure business continuity from an audit and monitoring perspective. In cases where it was not possible to conduct a virtual or desktop audit, such activities were postponed, for instance HSE audits. Hence the decrease in total number of external audit activity in 2020.

CLINICAL TRIALS Clinical trials are outsourced and continuously monitored on regulatory Good Practice requirements, as well as all relevant requirements from Lundbeck’s Code of Conduct. Lundbeck registers clinical trial protocols and discloses the results of clinical trials, regardless of outcome, in a publicly accessible clinical trial registry (ClinicalTrials. gov). In addition, clinical trial protocols and results information submitted by Lundbeck to the EudraCT

Lundbeck Sustainability Report 2020

Introduction

database is made publicly available by the European Medicines Agency (EMA) via its clinical trial registry: https://www.clinicaltrialsregister.eu. Clinical trial reports will be accessible on the EudraCT site in accordance with EMA POLICY/0070. Non-interventional studies may also be disclosed if, for example, they are considered to provide important safety data. Lundbeck will seek to ensure that disclosure of clinical trial information follows the IFPMA, EFPIA, JPMA, and PhRMA joint position paper “Disclosure of Clinical Trial Information via Clinical Trial Registries and Databases”, the Declaration of Helsinki and other relevant clinical trial disclosure requirements.

ANIMAL TESTING It is required by Health Authorities that animals are used to ensure that new medicines are safe and efficacious. Lundbeck is committed to ensure ethical treatment of animals used in laboratory settings. Lundbeck’s Animal Care and Use Committee oversees all experiments on animals and reviews animal models on a continuous basis using the principles of replacement, refinement and reduction of animals (3Rs) to which we are fully committed. We also work with others on the 3Rs for continuous improvements and actively support the National 3R Center in Denmark.

Factbook

ceutical association. Global affiliates follow local legislation.

for our societies. More information is also available in our Statutory Corporate Governance Report.

Our EU lobbying activities are registered in the official transparency register, but we currently do not have any activities.

TAX POLICY

In the U.S., we are required to report quarterly to Congress (searchable through a public database) the costs associated with lobbying on behalf of Lundbeck (which includes our consultants and trade association dues attributable to lobbying), and also discloses the issues we lobby on.

CORPORATE GOVERNANCE Our governance framework consists of rules and principles that support sustainable financial performance and long-term value creation for our shareholders and

Lundbeck’s Tax policy is reviewed and approved by our Board of Directors annually. For 2020, Lundbeck disclosed country by country level tax in countries classified as tax havens by the IMF and EU, and plans to extend disclosures further in the coming years. Lundbeck is not engaged in artificial or opaque structures that are intended for tax avoidance or have no commercial substance.

BOARD LEVEL COMMITTEES The Board of Directors has set up three advisory committees: The Audit Committee, the Remuneration & Nomination Committee and the Scientific Committee. More can be read in our Statutory Corporate Governance Report.

Governance and compliance

All employees working with animals have appropriate and documented education (FELASA standards) and training. Our animal testing approval committee consists of: a Chairman (SVP level), a researcher with hands-on experience, a representative from Animal facilities, laboratory animal veterinarians, a lay person and an external expert in laboratory animal science.

PUBLIC AND POLITICAL INFLUENCE We comply with the Danish lobby codex for pharma-

Impact

One extensive remote desktop review covered activities in 33 countries.

Key performance indicators

Unit

2018

2019

2020

Total sum of all audits

Number

383

314

344

Sum of internal audits

Number

226

132

212

Patient & product safety audits

Number

Health, Safety & Environment audits

Number

Business ethics and internal control audits

Number

143

133

Sum external audits

Number

157

182

132

Patient & product safety audits

Number

144

166

120

Health, Safety & Environment audits

Number

Business ethics and compliance audits

Number

Compliance hotline reports

Number

Note

Reporting on targets

Introduction

Impact

Factbook

Sustainability targets Issue

2021 target

2020 target

Access to brain health

Ensure all disease awareness sponsorships within psychiatry measurably support suicide prevention or mental health awareness

SDG impact

Engage all Lundbeck offices in local World Mental Health Day activities Establish a product donation partnership

Donate treatment for at least 900 patients through new product donation partnerships in low- and middle-income countries

Business ethics

Climate action

Annual Code of Conduct training completed by all employees at work globally

Increase proportion of healthcare professionals supporting disclosure of collaborations compared to the previous reporting year

Work to increase proportion of healthcare professionals supporting disclosure of collaborations compared to the previous reporting year

Reduce total carbon footprint across own operations, supply and distribution in line with our Science-Based Target1

Reduce CO2 emission by 4% in 2020 compared to 2019 Obtain ‘Science Based Targets initiative (SBTi)’ approval of new climate target

Environmental management

Diversity and inclusion

Recycle 60% of the solvents used in chemical production

Recycle 55% of the solvents used in chemical production

Recycle 62% of all general waste

Zero environmental incidents with an impact on the environment

Build an inclusive organization with a first initiative focusing on unconscious bias across the organization

Strive to maintain an overall equal gender split for people managers globally

Maintain an overall equal gender split for people managers globally

Health and safety

Reduce lost time accident frequency ≤ 5

Achieved

Lundbeck Sustainability Report 2020

Not achieved

We will report progress annually on the approved 15-year targets in Scope 1 & 2 (own produced energy and purchased energy) and Scope 3 (emissions from supply, services, distribution and more).

TCFD reference index

Introduction

Impact

Factbook

Climate-Related Financial Disclosures (TCFD) Reference Index Reporting according to TCFD Lundbeck supports the TCFD recommendations and believes they provide a useful framework to increase transparency on climate-related risks and opportunities within financial markets. As part of our support for the TCFD recommendations, Lundbeck comprehensively reports on governance, strategy, business opportunities, and risks related to climate change through the Climate Disclosure Project (CDP). In the table to the right is a summary and reference index. You can find our latest full CDP disclosure on our website.

Summary and reference index of Lundbeck’s TCFD reporting A

Governance

Strategy

Risk management

Metrics and targets

Describe the board’s oversight of climate-related risks and opportunities.

Describe the climate-related risks and opportunities the organization has identified over the short, medium and long term.

Describe the organization’s processes for identifying and assessing climate-related risks.

Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process.

The CEO has the overall responsibility of the sustainability strategy and presents major decisions to the board when relevant. CDP 1.1b A key risk overview is reviewed by our Audit Committee and shared with the Board of Directors. CDP 2.2

Describe management’s role in assessing and managing climate-related risks and opportunities.

Our risks and opportunities all have low impact, except physical risks of exposure to extreme weather events that can affect our sites, partners and suppliers, and conversely the opportunity to maintain a strong and resilient supply chain and own production. CDP 2.3a and CDP 2.4a

Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy and financial planning. CDP 3.1d, 3.1e and 3.1f

Risks including related mitigating actions and opportunities are assessed regularly by the Executive Management and reviewed together with the Board of Directors. CDP 1.2a

Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario. We do prepare scenario analysis using climate modeling scenarios predicting temperature increases. In 2021, our process for this analysis will be evaluated with a view to strengthen cross-functional involvement. CDP 3.1b

Lundbeck Sustainability Report 2020

Source: Based on our 2020 Disclosure to CDP.

Risks on both company and asset level, covering both direct operations and our upstream and downstream value chain, are identified and managed in our corporate risk management system. The Risk Office assesses the overall risk exposure and discusses it with the Executive Management. CDP 2.2 Describe the organization’s processes for managing climate-related risks. The Risk Office assesses the overall risk exposure and discusses it with the Executive Management. A key risk overview is reviewed by our Audit Committee and shared with the Board of Directors. CDP 2.2 Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk management. See above. CDP 2.2

Emissions are reported annually in accordance with the Greenhouse Gas (GHG) Protocol (revised edition) in our CDP response and are broken down by type, country and business division. CDP 4

Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 GHG emissions, and the related risks. Lundbeck discloses our Scope 1, Scope 2 and Scope 3 emissions through our CDP submittal and publishes our Scope 1 and 2 emissions in our Sustainability Report and on our website. Describe the targets used by the organization to manage climate-related risks and opportunities. We have several targets to manage our climate-related risks and opportunities. See the Impact section of this report for our new science-based target. CDP 4.1a

Accounting principles

Introduction

Impact

Factbook

Accounting principles Lundbeck is committed to transparency and disclosure. Here you will find the accounting principles, including the definitions for the key performance indicators we report on. Reporting period All reported data are covering a full year period (1 January to 31 of December 2020).

Controls For the HSE data gathered at local sites, the quality assurance process makes sure that all attached documentation is crosschecked and signed off by management. It is a requirement that data must be traceable back to the primary source. Deviations in data of more than 5% compared to the previous year must always be explained.

Scope The scope for reporting Lundbeck HSE data is all sites of development, research and chemical/pharmaceutical production owned/controlled by Lundbeck. Administration is not included unless being part of a site of development, research or chemical/pharmaceutical production. Sales organizations are not included and development, research and chemical/pharmaceutical production sites of less than 50 employees are not included. This scope covers 40-45% of all Lundbeck Group employees, but the reported scope is assumed to cover a significantly larger proportion of the Group’s total values on the reported HSE KPIs. The scope of the business ethics reporting is all sites and all employees.

Lundbeck Sustainability Report 2020

Definitions Air emission Solvent emissions are established from online systems/meters in the discharge or from consumption and fixed evaporation percentages. Biological treatment Waste treated in a biological treatment plant. Sludge is disposed to the soil. Business ethics and compliance audits (external) Compliance reviews of third parties and suppliers (based on contractual requirements and requirements stipulated in Lundbeck’s third party obligations), and information security reviews of external personal data processors. Business ethics and internal control audits (internal) Compliance reviews, financial audits and reviews, audits and monitoring of field-based activities and employees.

Carbon and air emission Carbon and air emission include GHGs and organic solvents. Chemical production Chemical production of Active Pharmaceutical Ingredients (API). GHG emissions CO₂e emission includes scope 1 (own produced energy) and scope 2 (purchased energy). Energy consumption is converted to CO₂e emission by emission factors from public sources or from our energy suppliers. CO₂ emission is an estimated 95% of total GHGs. Compliance hotline reports Reported concerns that involve legal, serious financial and reputational risks as specified at https://www.lundbeck.com/global/compliancehotline.

Energy consumption Energy is divided into: gas (natural gas/methane or city gas), gasoil, bio-oil, district heating and electricity. Environmental incident Accidental and unintentional release where the released substance is out of control and has had or is having a negative effect on the external environment. Incidents have an impact on the environment only if severity is rated “High” or “Catastrophic”. Environmental near miss Contained spill (no or little spill) which did not have an adverse environmental effect/impact. The near miss could have escalated to an environmental incident had the circumstances been a little different. Fatalities An accident or injury resulting a casualty.

Accounting principles

Introduction

Impact

Factbook

Definitions – continued Finished goods production Pharmaceutical production is established in production units (e.g. one package of finished goods). Frequency of lost time accidents Statistics and frequency of lost time due to absence is only based on data related to internal Lundbeck employees. Number of employees are pulled from a database for the reporting year. Number of employees consist of corporate full-time, part-time and temporary employees. Employees do not include contractors from various maintenance firms, who are given direction by their own supervisor who in turn is given direction by a Lundbeck (or subsidiary) employee. Total number of man-hours is calculated using an estimate of 225 working days a year, 7.4 hours per day. The absence frequency is estimated as the number of lost days per 1 million work hours. Health, Safety & Environment audits Process for verifying that our internal operations, as well as the operations of our suppliers and third parties, meet our expectations and requirements with regards to health & safety performance, human and labor rights performance (applicable for suppliers and third parties), and environmental performance.

Patient & product safety audits Includes the following audit areas: Good Clinical Practice, Good Laboratory Practice, Good Manufacturing Practice, Good Distribution Practice, Medical Regulatory Clinical Quality Assurance (MRC QA), Pharmacovigilance Audits, Chemistry, Manufacturing, and Controls Quality Assurance (CMC QA), Corporate Product Quality (CPQ), and Animal Welfare.

Waste water Waste water includes tap water and treated/ discharged ground water.

Raw materials Consumption of organic solvents, Active Pharmaceutical Ingredients (API) and cleansing agents. Organic solvents consist of chemical compounds used in research and production.

Work related accident without absence An undesired event or exposure that gives rise to personal injury.

Total sum of all audits Consolidated sum of Patient and product safety audit, Health, Safety & Environment audits, Business Ethics and compliance audits (external), Business Ethics and Internal Control audits (internal). Waste Waste is divided into “Chemical waste” and “General waste". For some categories of waste, data from November and December are based on assumptions, due to lack of primary data. Water consumption The total quantity of water used. Potable water from supplier (tap water). Unfiltered water is water from own well/ground water.

Lundbeck Sustainability Report 2020

Work-related accident with absence An undesired event or exposure that gives rise to personal injury and results in more absence than the day the event took place.

Work related diseases A disease that is caused by prolonged exposure at work and recognized as a disease by the competent authority. Chronic work-related diseases are only recorded once in Lundbeck data collecting process. Work related near miss A sudden, unexpected incident or situation where no personal injury occurs, but a notable event so that injury could have resulted had circumstances been a little different.

LOOKING FOR MORE? Detailed accounting principles can be found at our website.

REPORTING TO REGULATION Our Sustainability Report is released as part of the Annual Reporting suite. The Sustainability Report contains Lundbeck's non-financial reporting on sustainability according to the Danish Financial Statements Act. This report is Lundbeck's statutory statements on 99a, 99b and 107d, and consequently, the 2020 Sustainability Report is part of the 2020 Management Review. The report is prepared in line with the requirements for non-financial reporting as outlined in the EU Reporting Directive.

Assurance report

Introduction

Impact

Factbook

Independent Limited Assurance Report to the Management of H. Lundbeck A/S The Management of H. Lundbeck A/S (“Lundbeck”) engaged us to provide limited assurance on the Selected data described below for the period 1 January – 31 December 2020 in accordance with Lundbeck’s Accounting principles.

Our conclusion Based on the procedures we performed and the evidence we have obtained, nothing has come to our attention that causes us to believe that the Selected data for the year ended 31 December 2020 have not been prepared in all material respects, in accordance with the accounting principles as stated on pages 28-29 of this report (‘Accounting principles’). This conclusion is to be read in the context of what we state in the remainder of our report.

What we are assuring The scope of our work was limited to assurance on Selected data for the period 1 January – 31 December 2020 in the section “Factbook” (pages 17-25) in Lundbeck’s Sustainability Report 2020, namely ("Selected data") • Environmental management: data on “Environmental incidents with impact on the environment” (page 19) • Climate and energy: data on “Carbon and air emissions (total)" and “Energy consumption (total)" (page 20)

Lundbeck Sustainability Report 2020

• Circularity, resource flows and recycling: data on

“Finished goods production (total)”, “Chemical production (total)”, “Organic solvents”, “Waste (total)”, “Biological treatment”, “Recycling (General waste)”, “Water consumption (total)” and “Waste water” (page 21) • Health and safety: data on “Work-related accidents with absence”, “Work-related diseases”, “Frequency of lost time accidents” and “Fatalities” (page 23) • Governance and compliance: data on “Sum of internal audits”, “Sum external audits” and “Compliance hotline reports” (page 25) We assessed the Selected data using Lundbeck’s Accounting principles as set out on pages 28-29 of this report.

Professional standards applied and level of assurance We performed a limited assurance engagement in accordance with International Standard on Assurance Engagements 3000 (Revised) ‘Assurance Engagements other than Audits and Reviews of Historical Financial Information’ and, in respect of the greenhouse gas

emissions, in accordance with International Standard on Assurance Engagements 3410 ‘Assurance engagements on greenhouse gas statements”, issued by the International Auditing and Assurance Standards Board. Greenhouse Gas quantification is subject to inherent uncertainty because of incomplete scientific knowledge used to determine emissions factors and the values needed to combine emissions of different gases. A limited assurance engagement is substantially less in scope than a reasonable assurance engagement in relation to both the risk assessment procedures, including an understanding of internal control, and the procedures performed in response to the assessed risks. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed.

Our independence and quality control We have complied with the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants, which includes independence and other ethical requirements founded on fundamental principles of integrity, objectivity,

professional competence and due care, confidentiality and professional behaviour. The firm applies International Standard on Quality Control 1 and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. Our work was carried out by an independent multidisciplinary team with experience in sustainability reporting and assurance.

Understanding reporting and measurement methodologies The Selected data in scope needs to be read and understood together with the Accounting principles, as set out on pages 28-29 of this report, which Lundbeck Management is solely responsible for selecting and applying. The absence of a significant body of established practice on which to draw to evaluate and measure non-financial information allows for different, but acceptable, measurement techniques and can affect comparability between entities and over time.

Assurance report

Work performed We are required to plan and perform our work in order to consider the risk of material misstatements of the Selected data. In doing so and based on our professional judgement, we: • made inquiries and conducted interviews with Lundbeck’s management with responsibility for management and reporting of the Selected data, to assess reporting and consolidation processes, use of company-wide systems and controls performed; • checked data on a sample basis to underlying documentation, and evaluated the appropriateness of quantification methods and compliance with the Accounting principles; • conducted analytical review of the Selected data and trend explanations submitted by all reporting entities for consolidation at Group level; and • evaluated the obtained evidence.

Management’s responsibilities Management of the Lundbeck Group is responsible for: • designing, implementing and maintaining internal control over information relevant to the preparation of the Selected data that is free from material misstatement, whether due to fraud or error; • establishing objective Accounting principles for preparing the Selected data; • measuring and reporting the Selected data based on the Accounting principles and evidencing the Selected data; and • the content of the Lundbeck’s Sustainability Report 2020 and Accounting principles.

Our responsibility We are responsible for: • planning and performing the engagement to obtain limited assurance about whether the Selected data are free from material misstatement, whether due to fraud or error; • forming an independent conclusion, based on the procedures performed and the evidence obtained; and

Lundbeck Sustainability Report 2020

Introduction

• reporting our conclusion to the Management of Lundbeck.

Copenhagen, 4 February 2021 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab (CVR no. 3377 1231)

Lars Baungaard State Authorized Public Accountant

Torben Jensen State Authorized Public Accountant

Impact

Factbook

H. Lundbeck A/S Ottiliavej 9 2500 Valby Denmark Corporate Compliance & Sustainability Tel. +45 36 30 13 11 compliance@lundbeck.com www.lundbeck.com/global/sustainability CVR number 56759913 32 Lundbeck Sustainability Report 2020

Lundbeck Sustainability Report 2020

Communication on Progress

Sustainability Report 2020 ALK is committed to doing business in accordance with the UN Global Compact’s Ten Principles. This report includes our progress within the areas of human rights, labour, environment and anti-corruption. cf. sections 99a, 99b, 107d of the Danish Financial Statements Act

Sustainability Report 2020 • ALK

Contents

Adding value to society

Responsible business practices

CEO letter

Appendices 36

Sustainability performance 2020

Turning stakeholder input into an updated sustainability strategy Access to Allergy Care for All

9 12

Our work with sustainability

Explanation of calculations

Key figures

ESG key figures

Indicator overview

CEO letter Growing our business makes Access to Allergy Care for All possible.

p15 Diversity and inclusion We believe that diversity only brings value if it is present in combination with an inclusive culture.

People 14 Diversity and inclusion

Human rights

Labour rights

Planet 24 Turning waste into a resource

p25 Turning waste into a resource Two partnerships pave the way for reuse of waste.

p30 Responsible business conduct Doing business with integrity is the foundation for growth.

Sustainability Report 2020 • ALK

Adding value to society ALK-Abelló (ALK) is a global allergy solutions company, with a wide range of allergy treatments, products and services that meet the unique needs of people with allergy, their families and healthcare professionals. ALK offers products, services and resources covering a wide range of allergies. The company also has products in related areas, including diagnosis and emergency treatment. ALK’s main product category, allergy immunotherapy (AIT) comes in three different forms: injections, sublingual drops and sublingual tablets. In addition to AIT, ALK produces and distributes bulk allergen extracts primarily for the US market, adrenaline auto-injectors, and allergen extracts for skin-prick tests. ALK’s AIT products are derived from allergenic source materials such as grass pollen, tree pollen and house dust mites. These are all by large grown at our production facilities in the USA, extracted locally and transported to Denmark for

final processing. Once the allergens are processed, they are formulated into injections, drops, tablets and bulk extracts. ALK produces the injections, drops and extracts in-house at our production facilities in Denmark, the USA, France and Spain, and collaborates with a supplier based in the UK for the manufacture of the tablets.

klarify also provides services, such as the klarify app which helps users track and manage their pollen allergy.

ALK’s global headquarters are in Hørsholm, Denmark. Our unique manufacturing processes ensure that our products meet required quality standards and represent a significant barrier to potential competitors, making them an important factor in maintaining our market position. Globally, ALK is present in 41 countries either directly, via our 23 subsidiaries, or through partnerships with distributors in additional markets. ALK is predominantly present in Europe, where more than 70% of ALK’s revenue is generated.

ALK has a two-tier management structure consisting of the Board of Directors and the Board of Management. The two boards are independent of each other.

ALK is a publicly listed company and is owned by two majority shareholders: Lundbeckfonden (The Lundbeck Foundation) has a 40.3% interest and ATP has an 7.5% interest. ALK’s products are distributed through healthcare professionals. ALK also distributes home allergy tests directly to consumers through our sister brand klarify.

ALK at a glance

ALK has approximately 2,500 employees across the globe, the majority of which are based in Denmark and the rest of Western Europe (72%).

The Board of Directors defines the strategic framework for ALK’s action plans and activities on the basis of objectives, strategies and policies. The Board of Directors supervises the organisation, monitors procedures and responsibilities and sees that the company is managed appropriately and in accordance with legislation and ALK’s articles of association.

Established:

Employees:

1923

~2,500

Markets:

Patients in treatment with ALK products*:

~2m

The number of the most common global respiratory allergies covered by ALK’s tablet portfolio:

Participated in clinical trials for the tablets:

>23,000

* covering AIT and anaphylaxis

Sustainability Report 2020 • ALK

ALK’s business model As a global allergy solutions company with almost a century of knowledge and expertise, ALK helps people to take control of their allergy and their life. Value created

Raw materials Allergenic source materials, such as grass pollen and house dust mites, are the main ingredients of our products. Every year the company grows, collects or harvests several tonnes of allergens.

Active Pharmaceutical Ingredient (API ) production Allergens undergo thorough analysis, standardisation and quality control, so that naturally occuring variations are minimised, ensuring quality and consistency in the finished products.

Doctors: ALK helps allergists to drive better access and outcomes for all AIT-eligible patients, reaching out with support, disease information and treatment options. People: ALK is committed to a sustainable working life and keeps a constant focus on being a safe place to work for motivated and satisfied employees.

Key resources People and culture: Around 2,500 highly-skilled employees live our cultural beliefs every day in their work to help more people with allergy. Production/natural allergens:. ALK’s biological medicines are derived from natural resources, such as pollen, which it harvests, standardises and quality controls at its own facilities.

Patients: ALK’s tablet portfolio is helping to democratise AIT by covering the most common respiratory allergies, and bringing new treatment options to people without easy access to allergy specialists.

Finished production APIs are purified, then formulated for subcutaneous injections, sublingual drops or sublingual tablets.

Society: ALK addresses profound societal challenges by producing medicines for the leading cause of lost productivity and lost work days. The company partners with payers and health authorities to advance registered, documented AIT products and is a signatory of the United Nations Global compact. Investors: ALK works to create long-term value for its shareholders.

Scientific knowledge: ALK continuously applies its scientific knowledge to help people take control of their allergy and their life. Allergy solutions for life

Sales and partnerships: In addition to its own sales organisation, ALK partners for growth with leading specialty pharma companies worldwide. ALK is present in 41 markets, either directly or via partnerships. R&D: The completion of the tablet portfolio remains the primary focus of ALK’s R&D efforts. In addition, the company is conducting research into innovative solutions for high-impact allergic conditions – such as food allergies.

Packaging and distribution Following careful quality control, the finished products are labelled, packaged and distributed.

Through information resources, services and products, ALK is working to support people with allergy early in their disease journey, smoothing the path to treatment.

People with allergies often endure a decade or more of symptoms before turning to AIT.

Sustainability Report 2020 • ALK

CEO Letter

Growing our business makes Access to Allergy Care for All possible 2020 will go down in history as the year of great challenges, a year when many companies and people were put under pressure. As a company, fortunately, we have emerged from the COVID crisis stronger. We have done this through the great support of our colleagues from around the globe. We demonstrated that despite difficulties, we stand united in the face of great challenges. In many ways, the global pandemic has shown us what is truly important; to create long-term value for people, the planet and the business.

Access to Allergy Care for All For the majority of 2020, we conducted a large-scale materiality assessment to ensure that our contribution to global sustainable development aligns with our ambitions and that of our stakeholders. The outcome is a new sustainability strategy focused on the areas where we can make the most impact to the world. Our main focus continues to be on ensuring good health and well-being for all, which is now formalised in a new Access to Medicines strategy entitled ‘Access to Allergy Care for All’. Access to Allergy Care for All, describes our ambition, purpose and long-term goals, with short-term milestones to measure progress. We want our products and solutions to be universally accessible, while ensuring that we continue to grow an ethical and profitable business. We believe that ALK’s growth is closely linked to increased access to our treatment, and hence better patient outcomes.

“

We want our products and solutions to be universally accessible, while ensuring that we continue to grow an ethical and profitable business. We believe that ALK’s growth is closely linked to increased access to our treatment, and hence better patient outcomes. Carsten Hellmann, President & CEO

Sustainability Report 2020 • ALK

In all our other areas of engagement, we have set short-term goals to ensure that we continue to contribute positively to global sustainable development. Sustainability is an integrated part of our overall business strategy, which we execute by following the principles outlined in the Ten Principles of the UN Global Compact. We are proud to confirm our commitment to working within the areas of human rights, labour, environment and anti-corruption. We will continue to promote sustainable development, by contributing to the realisation of the UN Sustainable Development Goals, and to integrate the principles into the way we conduct business, while maintaining a close and transparent collaboration with our stakeholders. 11 out of 14 goals achieved 2020 also marked the conclusion of almost all of our previously set sustainability goals. I am very proud of the way the entire ALK organisation has pulled together to deliver these great results for the benefit of people and the planet.

We reduced our CO2 emissions and will continue to look for opportunities to invest in renewable energy to reduce our impact. Overall, we achieved 11 out of 14 of the sustainability goals we set in 2018. I am especially proud of the fact that more and more people are treated with our documented and registered products. I can also look back at a year, where we put the health and safety of our people front and centre. We set up a global Corona Task Force, ensured that our workplace is safe for all who were required at the sites and outlined a very conservative approach to battling the COVID pandemic. How our people reacted to all these changes, still leaves me in awe. The amount of flexibility and tenacity in the face of challenges that our people demonstrated has been inspiring. All this to ensure that people with allergy could continue their treatments.

Carsten Hellmann President & CEO

2020 highlights March klarify digital platform launched in Denmark May klarify digital platform launched in Slovakia July Autoclave water saving equipment installed in Oklahoma Adolescent indication submitted for AIT against house dust mite allergy (HDM) in Canada October Two waste reuse partnerships established EU paediatric indication secured for AIT against ragweed pollen Adolescent indication submitted for AIT against HDM in 9 additional EU countries December New long- and shortterm sustainability goals set Marketing authorisation for HDM tablet achieved in 8 new markets

April klarify digital platform launched in the USA June klarify digital platform launched in Ireland August Materiality assessment completed September Global Move for Allergy event held New Access to Medicines strategy developed – Access to Allergy Care for All AIT against tree pollen allergy launched in 9 new markets November Diversity and inclusion goals and strategy completed AIT against ragweed pollen allergy accessible in 6 new markets

Sustainability Report 2020 • ALK

Sustainability performance 2020 PROMISE

2019-2020 GOALS

PEOPLE We promise to build upon our heritage as a pioneer in allergy immunotherapy and bring allergy products and solutions to as many people with allergy as possible around the world.

PEOPLE We promise to be a workplace characterised by a caring and creative nature where development, diversity, safety and work-life balance are seen as valuable assets. We call it The Human Organisation.

STATUS

By 2020, we want to treat 2 million people with allergy with our allergy immunotherapy products, diagnostics and adrenaline auto-injectors.

2 million

Approximately 2 million people have been treated with ALK products.

By 2020, we want to engage with 20 million people through our consumer initiatives.

105 million

An estimated 105 million people have been engaged through our digital consumer platform klarify in 2019.

By 2020, we want to raise the Quality Mindset Maturity Index by 10% compared to baseline.

13%

The Quality Mindset Maturity Index rose 13% over the last two years.

By 2022, we want women to make up 30% of the shareholderelected members of the Board of Directors.

20%

The number of shareholder-elected women is 1 (20%).

By 2020, we want women to make up 30% of functional managers.

21%

The number of women on functional-manager level remained stable. The goal was not reached.

By 2020, we want women to make up 40% of mid-level managers.

41%

The number of women in mid-level management roles increased by three percentage points to 41%.

2.9 78 82

In 2020, the number of work-related accidents with absence was 9, resulting in an LTI frequency of 2.9.

By 2020, the Lost Time Injury (LTI) frequency is <3.0. By 2020, the individual development score is greater than 78. By 2020, the engagement score is equal to or greater than 80.

PLANET

PROSPERITY We promise to continue to drive and grow an ethical business. We want to be the world leader in allergy by continuing to be proactive promoters of high business integrity with the aim of helping as many people with allergy as possible to better health and a better life.

The 2019 development score was 78. A new survey will be conducted in 2021. The engagement score in the 2019 Engagement Survey was 82. A new survey will be conducted in 2021. In 2020, energy and water efficiency were considered in all major facilities upgrade plans, especially concerning reuse of water.

By 2020, energy and water efficiency considerations will be an integrated part of facilities upgrade plans.

We promise to take care of the planet by taking actions that benefit the environment and the climate. We want to set ambitious goals that make positive changes to the planet.

COMMENT

By 2020, we want at least 30% of all consumed energy to come from renewable energy sources.

38%

In 2020, 38% of consumed energy came from renewable energy.

By 2020, we want to reduce CO2 emissions by 25% compared to a 2017-baseline.

32%

At the end of 2020, the CO2 emissions had decreased by 32% to 6,612 tonnes compared to baseline (9,658 tonnes).

By 2020, we want at least 45% of waste to be reused or recycled.

38%

In 2020, 38% of the waste produced at production sites was recycled/reused. The goal was not reached due to an overall decrease in the amount of waste.

By 2020, we want to test all employees on a yearly basis about their knowledge of business ethics compliance.

94%

In 2020, 94% of eligible employees have completed the Code of Conduct training.

SDG

Sustainability Report 2020 • ALK

New sustainability goal overview GOALS

MILESTONES

2030: Enable access to ALK allergy diagnosis, immunotherapy treatments and/or adrenaline products by increasing the number of patients by at least 100,000 annually

2025: Add children/adolescent indication to current indication in 10+ countries 2022: Establish a business model for partnership programmes that improve Access to Allergy Care, and which can then be used as a template for other partnerships 2023: Make ALK allergy diagnosis, immunotherapy treatments and/or adrenaline products accessible to at least 300,000 additional patients

People with allergy

2025: Make ALK allergy immunotherapy and adrenaline available in countries with no access to ALK allergy products 2025: Introduce tablet-based AIT in 5+ new countries

People

2030: Strengthen knowledge about innovations in allergic disease via scientific communication to 200,000 healthcare professionals, and establish partnerships to train 50,000 healthcare professionals in allergy treatment and immunotherapy

2022: Strengthen knowledge about innovations in allergic disease via scientific communication to 20,000 healthcare professionals 2022: Establish partnerships to train 4,000 healthcare professionals in allergy treatment and immunotherapy 2022: Maintain the injury frequency rate ≤ 3.0

Employees

2025: Maintain gender balance of approximately 50% at Manager and Director levels 2025: Strive to increase the number of women in VP and Senior Director positions to 35%

Planet

Responsible business practices

Greenhouse gas emissions

2025: 60% reduction in CO2-emissions including emissions from transport, travel and company cars against a 2019-baseline of total emissions from non-renewable sources

Waste

2022: Reuse/recycle 47% of waste

Water

2022: Annual water consumption levels should not exceed 2019-baseline of 122,000 m3

Energy

2022: Annual energy consumption levels should not exceed 2019-baseline of 47,000 MWh

Employee training

2022: Maintain ALK Code of Conduct employee training participation above 90%

SDGS

Sustainability Report 2020 • ALK

Turning stakeholder input into an updated sustainability strategy Throughout 2020, we conducted an in-depth materiality assessment to assess whether our actions and initiatives are in line with the expectations of our stakeholders. How we conducted the analysis The materiality assessment was conducted in accordance with principles outlined in the GRI Standards (GRI 101) and posed an opportunity for ALK to explore and leverage the positive impact on societal challenges, while building a sound and profitable business. Issues deemed the most relevant for ALK were compared against the backdrop of the UN Sustainable Development Goals to determine our positive and negative impacts. The output is a materiality matrix that represents our most material topics. Stakeholder inclusiveness External input was collected from relevant suppliers, NGOs, investors and institutions through interviews and surveys. External sources such as sustainability ratings and assessments, and indices such as the Access to Medicine Index were also used in the assessment. The internal input was collected from more than 15 key business units such as Commercial Operations, Product Supply, Procurement, Human Resources (HR), Environment, Health and Safety (EHS) etc. as well as from employees more generally, through interviews and surveys of employees

in 18 different countries. Several internal documents, such as policies, annual reports, risk assessments, strategy documents, financial targets and employee engagement results, were also used. Key findings The assessment reconfirmed that ALK’s biggest contribution to society stems from our products’ and services’ inherent benefits: making life with allergy simpler and healthier, but also substantially reducing the impact on global healthcare systems, through research and exploration of technologies. The key issue identified that best benefits both society and ALK, and warrants increased strategic effort to optimise positive impact: • Healthcare coverage and access to medicine for all Furthermore, four issues were identified that best benefit both society and ALK, that warrant a continuous and systematic approach at operational level to ensure positive impacts: • Structural changes in relation to gender equality and empowerment • Green transition • Just and strong institutions • Partnerships

Sustainability Report 2020 • ALK

Materiality matrix

Societal Impact

Materiality matrix The assessment of the potential business impact from ALK’s active commitment to the SDGs is based on our interest in exploring new business opportunities, enhancing customer satisfaction and reputation, savings, attracting and retaining talents and responsible employees, and meeting investor and stakeholder expectations.

Monitoring development and impact

Continuous and systematic approach

Increase strategic efforts to optimise positive impact

The interlinkage of societal and business interest is visualised in a materiality matrix with societal impact on the y-axis and the potential ALK business impact on the x-axis. The SDGs were placed based on two dimensions; their significance to our economic, social and environmental impacts combined with the importance assigned to the issues in stakeholder input. The materiality matrix shows three tiers: SDGs that best accommodate the purpose of ensuring a sound and profitable business, as well as contributing to the global effort to achieve the SDGs in 2030; SDGs that require a continuous and systematic approach by ALK; and SDGs that should be monitored by ALK to handle any unexpected impact.

ALK business impact

Sustainability Report 2020 • ALK

Updated sustainability strategy The matrix is the building block of a furtherstrengthened sustainability framework and strategy, which allows us to concentrate our efforts on contributing to two SDGs, while integrating the other SDGs into operational activities. Our core strategy contributes to SDG 3 (Good Health and Well-being) supported by SDG 9 (Build resilient infrastructure, promote inclusive and sustainable industrialisation, and foster innovation).

The new structure of the report reflects the updated sustainability strategy. We periodically review the matrix based on trends and stakeholder input to ensure that our prioritisation remains relevant.

Partnerships

By linking the access to medicines under SDG 3 with strengthened efforts to integrate research and technological development under SDG 9, ALK may spark business opportunities through evidence-based treatment, partnerships to build local healthcare capacity and the outreach to more patients through new forms of communication.

Updated sustainability framework

Strategic Activities Access to Allergy Care for All Operational Activities

People

Planet

Responsible Business Practice

Sustainability Report 2020 • ALK

Access to Allergy Care for All Allergy is the most common chronic disease in the world. Allergic reactions to pollen, food and animals impact millions of peoples’ work and everyday life and well-being. Allergic rhinitis affects 10-30% of the population. It is seen as the strongest risk factor for developing asthma and is described as a major global public health issue1. The purpose of the ALK Access to Medicines strategy is to enable Access to Allergy Care for All. Our products and services are relevant to populations across the entire globe, and our goal is to democratise and disseminate these to many more, earlier in their disease. We apply two principles to enable Access to Allergy Care for All: • Our primary focus is people with allergy and their need for a correct diagnosis and treatment • Assisting healthcare systems and healthcare professionals is a precondition

for providing efficient allergy care. Without a healthcare infrastructure, people with allergy cannot benefit from our allergy solutions In order to fulfil this purpose, we build on decades of research and development, and apply state-of-the-art pharmaceutical standards to deliver products and services to millions in need of effective allergy treatment. Realisation of our strategy Allergy care is especially important when it comes to children. Worldwide, 40-50% of children are affected by one or more common allergens2, which has a significant impact on their schoolwork and social life3. We are conducting several studies to investigate the efficacy of our medicines in younger populations, with the intention of securing children’s indications for our tablets in several new markets, including emerging markets – although some clinical development activities were impacted by the COVID pandemic and associated containment measures. Subject to approval, these products could allow children to minimise their reliance on symptomatic treatments and, in some cases, could prevent the development of allergy-induced asthma exacerbations. With our solutions, we aim to

help diagnose and treat allergy much earlier, and thus contribute to a better quality of life for children. Partnerships with the public and private healthcare sector are an important vehicle for ensuring access to allergy care. In countries with no access to allergy medicine, partnerships often form the first step to making ALK solutions accessible. In 2020, we explored several possibilities of expanding our treatments to new markets, both developed and emerging. Allergy knowledge and competences among healthcare professionals are instrumental to ensuring better patient care. We engage systematically in educational activities, training, and dialogue to enhance insights into the diagnosis and treatment of allergic disease. In 2020, ALK reached more than 10,000 healthcare professionals through scientific publication views and downloads, attendance of ALK company-sponsored scientific symposia and webinars, and ALK coordinated medical expert meetings and scientific advisory boards. Several projects have been initiated as a collaborative effort with ALK strategic commercial partners and independent healthcare organisations to support training in allergy diagnosis and

Sánchez-Borges M, Martin BL, Muraro AM, et al. The importance of allergic disease in public health: an iCAALL statement. World Allergy Organ J. 2018;11(1):8. Published 2018 Apr 27. doi:10.1186/s40413-018-0187-2

https://www.aaaai.org/about-aaaai/newsroom/allergy-statistics

Walker, Samantha & Khan-Wasti, Saba & Fletcher, Monica & Cullinan, Paul & Harris, Jessica & Sheikh, Aziz. (2007). Seasonal allergic rhinitis is associated with a detrimental effect on examination performance in United Kingdom teenagers: Case-control study. The Journal of allergy and clinical immunology. 120. 381-7. 10.1016/j.jaci.2007.03.034.

SDG Target 3.8 ALK enables access to safe, effective, quality and affordable essential medicines and vaccines for all. ALK contributes to healthy lives and promotes well-being for people with allergy at all ages.

SDG Target 9.5 ALK enables increased accessibility to allergy immunotherapy, through research and development activities and technological development.

Sustainability Report 2020 • ALK

treatment in both developed and emerging markets. With nearly 100 years of experience in allergy, we believe it is our responsibility to share our knowledge particularly in markets that have little or no tradition of allergy immunotherapy. Through the World Allergy Organization (WAO), ALK regularly makes product donations for the benefit of WAO’s World Training Schools (WATS), which use our products to train physicians in emerging markets. We engage with the public and support patients’ organisations all over the world in their work to ensure public health via awareness raising, patient care and promotion of the safe use of our products. In addition, we continue our efforts to raise awareness about allergy in the general population through our sister brand’s klarify digital platform. These tools help people with allergy to achieve a better standard of living,

by offering tips and guidance for alleviating and avoiding the symptoms of allergy. klarify is now available in six countries: the USA, Germany, the UK, Slovakia, Ireland and Denmark. Target: We help create access to safe, effective, quality and affordable medicines and vaccines for people with severe allergy. Goal: By 2020, we want to treat 2 million people with allergy with our allergy immunotherapy products, diagnostics and adrenaline auto-injectors.

New long-term targets have been set to drive broader accessibility to our treatments globally.

2030 COMMITMENTS

TARGETS

2030

2025 Add children/adolescent indication to current indication in 10+ countries

Enable access to ALK allergy diagnosis, immunotherapy treatments and/or adrenaline products by increasing the number of patients by at least 100,000 annually

Result: Approximately 2 million people have been treated with ALK products by the end of 2020.

2022 Establish a business model for partnership programmes that improve Access to Allergy Care, and which can then be used as a template for other partnerships 2023 Make ALK allergy diagnosis, immunotherapy treatments and/or adrenaline products accessible to at least 300.000 additional patients 2025 Make ALK allergy immunotherapy and adrenaline available in countries with no access to ALK allergy products

Goal: By 2020, we want to engage with 20 million people through our consumer initiatives. Result: The goal was reached in 2019.

2025 Introduce tablet-based AIT in 5+ new countries

2030 Strengthen knowledge about innovations in allergic disease via scientific communication to 200,000 healthcare professionals, and establish partnerships to train 50,000 healthcare professionals in allergy treatment and immunotherapy

2022 Strengthen knowledge about innovations in allergic disease via scientific communication to 20,000 healthcare professionals

2022 Establish partnerships to train 4,000 healthcare professionals in allergy treatment and immunotherapy

Sustainability Report 2020 • ALK

Audrey Caillot and Angélique Challe participated in our Move for Allergy event to reconnect with colleagues across the world. Here they are, overlooking the beautiful countryside of France.

People

SDG Target 5.5 ALK ensures women’s full and effective participation and equal opportunities for development and leadership at all levels. SDG Target 8.2 ALK implements development programmes to upgrade employees’ skills. SDG Target 8.5 ALK protects labour rights and promotes safe and secure working environments for all employees. SDG Target 10.2 ALK empowers and promotes the social and economic inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status.

Sustainability Report 2020 • ALK

Diversity and inclusion Throughout 2020, an international group of employees from Human Resources have been working on a project to establish a firm data foundation for our work with diversity and inclusion across the organisation. Lisbeth Kirk, SVP HR & Internal Communications says: “We made significant progress and learned a lot about our organisation along the way. Although we have made progress regarding the number of women in management over the years, our initiatives and activities seemed to fall short of making an impact on senior management positions. With the support from the Board of Management, we decided to pursue the matter further, and carried out a ‘deep dive’ into the data to understand the actual causes behind the low representation of women in senior positions. We have spent the better part of 2020 researching, benchmarking with peers, as well as gathering insights to ensure that any initiative that we will introduce over the coming years yields a measurable impact.” The key findings of the investigation showed that if ALK is to achieve diversity and inclusion in all aspects and within all business areas, as is the intention, the diversity levers that need to be pulled will be to raise awareness about diversity and inclusion in the organisation, unconscious bias training and integration of specific diversity and inclusion considerations into key HR processes, and in our upcoming engagement survey. The latter will provide valuable data and insights across the global organisation.

“

We believe that diversity only brings value if it is present in combination with an inclusive culture. Through our leadership development activities, we are strengthening an inclusive culture at all levels of the organisation – from top management to employees. We are looking forward to kicking these initiatives off, and we are hopeful that they will be effective in ensuring a more diverse workforce across several different diversity characteristics, as well as reaching our target of having women make up 35% of VPs and Senior Directors in 2025. Lisbeth Kirk SVP, HR & Internal Communications

Sustainability Report 2020 • ALK

Human rights

Policy ALK is committed to respecting human rights in our business operations. ALK follows the principles outlined in the Universal Declaration of Human Rights, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work and the UN Guiding Principles on Business and Human Rights. We aim to protect human rights and to ensure that ALK avoids being complicit in human rights abuses, as described in the UN Global Compact principles 1 and 2.

• Ensure a high standard of data protection and that the rights of data subjects are duly preserved and enforced in all areas of our business

Action COVID The major focus of 2020 has been to ensure both the physical and the mental well-being of employees during the global lockdowns in response to COVID. A conservative ‘people before profit’ approach was applied to ensure that no employee felt unsafe in coming to work.

As part of several of our policies we: • Take great care to protect human rights and to avoid being complicit in any human rights violations • Prohibit all types of discrimination, offensive behaviour, harassment and retaliation, along with forced and child labour • Educate our employees and implement preventative actions to ensure that health and safety risks are constantly reduced • Ensure that occupational health and safety are proactively integrated into the planning and design of all projects

The Board of Management, as well as other senior managers, communicated weekly via video updates to energise, reassure and share knowledge with employees globally and locally. Regular updates were shared via internal communication channels, and information and instructions were made available for all employees to ensure their protection. Cleanliness protocols were updated to ensure that the risk of infection at work was minimised. For managers, tutorial videos and training material on how to lead remotely were made available. Flexibility was shown for employees in special situations, such as those with small children, or who were

otherwise living in circumstances that made working from home difficult. Several initiatives were launched, such as the global Move for Allergy event, where all employees were encouraged to walk, run or cycle five kilometres to raise awareness about allergy. We also launched a global competition, Stay Connected. The primary goal of both initiatives was to reconnect employees across borders and departments. Employee health and well-being All employees are covered by a health programme, either made available through, or paid for, by ALK. Together with Human Resources, the EHS organisation works to ensure that a healthy working culture exists at ALK, both in terms of the psychological environment and a healthy work-life balance. EHS representatives are located at all production sites to ensure that the EHS policy and relevant procedures are followed. In Denmark, a workplace assessment by the Danish Working Environment Authority was conducted towards the end of 2020. Results of the assessment are pending. Harassment, including sexual harassment is prohibited. ALK does not tolerate written or verbal harassment, bullying, unwanted sexual advances, physical or graphic harassment that shows hostility or aversion

toward an individual because of any characteristic protected by applicable law, including sex, race, religion or faith, political view, sexual orientation or other. Safety The safety of our employees is a responsibility we take very seriously, and we work to ensure that systems and processes are implemented globally to support a safe work environment. We continued to monitor safety at all ALK locations, and workplace assessments are conducted regularly to ensure that we mitigate any health and safety risks. Safety training is adapted to local needs and allows flexibility in line with local laws and customs, if relevant. Additionally, health and safety considerations are built into facilities upgrade plans, with a special focus on heavy lifting, ergonomics and chemicals management. In 2020, all relevant employees were trained in the Chemical Management System, which contains all ALK’s safety data sheets and describes any hazards and precautions to be taken when using the chemicals. Together with an external company, our Procurement department has made risk evaluation engineering reports. These also include general risks for people, such as the risk of fire, work-related accidents etc.

Sustainability Report 2020 • ALK

Human rights Privacy and data protection The ALK Data Protection Committee assists the Board of Management in fulfilling oversight responsibilities with regards to personal data protection and personal data use. The Committee meets quarterly to oversee the coordination, communication, training and risk management of personal data protection governance activities across the entire organisation. In 2020, we continued work on ensuring the safety, and responsible use, of data in line with the General Data Protection Regulation and other relevant data protection regulations. Targeted training of groups of employees took place with a view to ’train the trainers’ on the handling of personal data, as well as conducting awareness-raising activities in individual business units, where relevant.

Risks A major unforeseen risk in 2020, and one that will remain in place during 2021, was the COVID pandemic. ALK set up a Corona Task Force to anticipate and mitigate the potential consequences of the virus. The Task Force’s approach was both proactive, in that it developed a wide-ranging contingency plan to safeguard both employees and the ongoing supply of medicines, and conservative, in that it applied a ‘safety first’ principle to all the scenarios it considered.

Many employees were advised to work from home to the extent possible. The Task Force will continue to meet in 2021 until the threat of COVID subsides. Our supply chain and operations are located in areas where the overall risk of human rights violations is considered low, as 99% of our main GxP suppliers are located in low-risk countries. However, as part of our commitment, in 2020, we continued to focus on mitigating human rights risks in high-risk countries. ALK’s operations have a relatively small impact on human rights issues in the supply chain, however these risks are mitigated by the inclusion of human rights clauses, such as explicitly concerning child and forced labour in all new, large supplier contracts. Internally, human rights risks, in particular risks of discrimination and harassment are prevented and mitigated through various mechanisms. Each case is investigated fully, and appropriate action taken based on findings. Although ALK is a relatively low-risk company when it comes to safety, we do not accept accidents as part of our operations and seek to prevent them from happening. Workplace risks at ALK include the potential risk of exposure to allergens, which are our main raw material. For employees who handle allergens as part of their daily work processes, we conduct periodic screenings, and provide allergy testing. Through our network of EHS employees, locally adapted information campaigns and training programmes on risks to safety are made

Sustainability Report 2020 • ALK

Human rights KPI: Percentage of total workforce represented in formal joint managementworker health and safety committees.

available to all employees, with the aim of minimising the number of accidents. Working with chemicals also represents a potential health risk and such risks are closely monitored and mitigated through mandatory health and safety training for all employees who handle chemicals as part of their work. Disruption to IT systems, such as breaches of data security, may happen across the global value chain, where well-functioning IT systems and infrastructure are critical to our ability to operate effectively. We manage this risk, among other ways, by having a security strategy in place to prevent intruders from causing damage and gaining access to critical data and systems. Awareness campaigns, access controls, intrusion detection and prevention systems have all been implemented, and systems are continuously upgraded to ensure high security standards.

Targets and results

Result: All employees at production sites are represented in joint management-worker health and safety committees, representing approx. 76% of total workforce.

KPI: Anti-discrimination – number of incidents, including reports to the ALK Alertline. Result: In 2020, there were no incidents of equal opportunity discrimination reported via ALK Alertline. However, there was one report concerning inappropriate behaviour reported through local HR. The report was followed up and found not to be supported by sufficient evidence. Safety Target: We promote safe and secure working environments for all employees.

Accidents with absence

Unit

2016

2017

2018

2019

Number

2020

LTIF 4.4 3 3.8 3.5 2.9

Number of work-related injuries with absence per million work hours. Note: The 2018 number is a 3-year average

2019 2020 Denmark 2.4% 1.9% North America1 1.3% 1.5%

Total Absence 2.7% 3.1% 1 The United States of America and Canada 2 France, Spain, Germany, Finland, Sweden, Norway, Italy, Ireland, Austria, Switzerland, United Kingdom, Belgium, the Netherlands 3 Czech Republic, Slovakia, Poland, Turkey, China, Hong Kong, Russia, Slovenia, Jordan

Working environment Lost Time Injury Frequency (LTIF)1

Absence due to sickness

Eastern Europe and International Markets3 2.4% 1.5%

Work-related injuries

KPI: Lost time rate.

Western Europe2 3.5% 5.4%

Goal: By 2020, the Lost Time Injury (LTI) frequency will be <3.0. Result: In 2020, the LTI frequency was 2.9. We will continue our efforts to prevent accidents from happening in the workplace.

In all areas of operation, we comply with national and international legislation.

Target: We ensure good occupational health conditions and access to occupational healthcare services for all employees.

Result: Due to ALK’s conservative approach to handling the COVID pandemic we only saw a slight increase in the lost time rate from 2.7% in 2019 to 3.1% in 2020.

KPI: Percentage of workers, by gender, who have access to services made available or paid for by ALK for work-related accidents or diseases. Result: At ALK, all employees have access to healthcare services for work-related accidents or diseases. Target: We protect and enforce the rights of data subjects. KPI: Number of incidents or complaints submitted to the national Data Protection Agency concerning breaches of data protection. Result: During 2020, no incidents of data breaches were submitted to national Data Protection Agencies.

Sustainability Report 2020 • ALK

Human rights

Planned activities for 2021 and expected results To protect data privacy, a number of awareness campaigns have been conducted and further technical and risk evaluations and measures are being reviewed and considered. To further strengthen the ALK Global EHS setup and ensure the right allocation of resources at each site, a worldwide assessment exercise will commence in 2021. We will continue our efforts to eliminate or reduce the number of work-related accidents. EHS will initiate knowledgesharing activities with a view to updating work processes in order to reduce the number of accidents. In 2021, risk assessments in relation to specific, selected work processes will be executed. Risk assessments in relation to ergonomics will also be conducted. Over the next two years, the following safety goal was set:

2022 Maintain the injury frequency rate

≤ 3.0

Sustainability Report 2020 • ALK

Labour rights • Promote fair working conditions, equal pay for equal work, and freedom of association and collective bargaining

Policy Our global HR policy seeks to create an appealing working environment to attract, develop and retain well-qualified and engaged employees. We foster an open and honest relationship with employees. We respect their right to be informed, heard and to voice their concerns in an open and transparent manner. All employees have access to internal and external training opportunities to ensure that they can continue to develop their skills.

• Ensure the well-being of employees and their families by being involved in local initiatives, practices and procedures with respect for local customs, conditions and needs • Develop the competencies of employees at all levels We act in compliance with national legislation in the countries in which we operate, and we follow the UN Global Compact Principles 3-6, as well as the eight fundamental rights described in the ILO Core Conventions.

We continue to: • Provide equal opportunities for all, regardless of age, gender, race, ethnicity, sexual orientation, religion or ability • Provide fair wages by aligning our compensation with that of other companies in the geographical areas where we operate • Provide re-employment opportunities in the event redundancies cannot be avoided. If there is no chance of reemployment, social plans are developed in line with local laws and customs

Action All employees have freedom of association, and can exercise this right either formally in unions or internally in workers’ councils. Employees in seven European countries have workers’ council representation. Employee engagement In 2020, a new employee engagement survey provider was identified, and a survey will be conducted in 2021. In 2020, a survey regarding ALK’s work with sustainability,

including work with SDG 8 covering Decent Work and Economic Growth was conducted as part of the updated materiality assessment. A total of 631 (26%) employees responded to the survey, most of them in Europe. 75% of the respondents perceived ALK as actively engaged in SDG 8. Employee development All employees’ performance is reviewed once annually, and performance objectives are set for the coming year. All employees have access to annual development agreement talks with their direct managers. In 2020, 90% of employees completed an annual year-end review and 71% completed a development agreement. Diversity and inclusion At ALK, we promote equal opportunities and believe that an organisation representing diversity in all its aspects, at all organisational levels, and within all competency areas, creates higher engagement and innovation, and provides the basis for better business decisions and results. We aim to create a diverse and inclusive work environment where different perspectives, abilities, capabilities, talents and experiences meet. To support our ambition, we have a global diversity policy and internal guidelines to ensure: • Respect for the fundamental rights of people

• That ALK fosters an inclusive environment for everyone, regardless of age, gender, race, ethnicity, religion, disability, sexual orientation, gender identity, personality, tenure, education, economic background, organisational function etc. • That relevant and objective criteria are applied when making decisions about hiring or dismissals, promotions or changes in responsibility, and compensation The Diversity and Inclusion project continued to gather insights and data during 2020 in order to set realistic and achievable goals for women in management. Succession plans have been developed for all key positions at ALK, including for diversity characteristics. As part of our work to continuously improve our gender balance and ensure talent development, a new programme was launched in 2020: ASPIRE. ASPIRE is specifically developed to nurture and grow talent in the organisation, that has the potential and aspiration to rise to more senior roles, either as a specialist or as manager. The programme encompasses several focus areas including age, gender, and geographic location. The Board of Directors At the end of 2020, the Board of Directors consisted of five shareholder- and three employee-elected members. Of the

Sustainability Report 2020 • ALK

Labour rights shareholder-elected members, one was a woman and two of the employee-elected members were women (see page 23). Two of the members were independent. The average age of the shareholder-elected members was 58 years. 60% of the Board of Directors was of Danish nationality. In November, ALK announced that two new, independent members of ALK’s Board of Directors would be nominated at the company’s next Annual General Meeting. If approved, the majority of shareholderelected members would be independent. The Board of Directors wishes to ensure diversity at all management levels and ALK is consequently building up an internal recruitment pool that will ensure a high degree of diversity. The Nomination Committee constituted by the chairmanship is responsible for selection and nomination of candidates for the Board of Directors. The selection is based on a process that defines the need for new talent, diversity, age and gender. The process is open and transparent, and the candidates are approved by the Board of Directors. More details about the Board of Directors’ competences are available on our website https://ir.alk.net/ corporate-governance/board-of-directors. cf. section 107d of the Danish Financial Statements Act

Risks The general nature of our production process and administrative activities require that we rely mainly on skilled labour. Combined with the fact that our production facilities are located at sites in the highly developed countries of Denmark, France, Spain and the USA, the risk of labour rights violations is generally low. This extends to our supply chain as well, as the majority of our suppliers, and 99% of our biggest suppliers, are located in areas with no significant risk of labour rights violations. Our main risks in relation to labour rights violations stem from second and third tier suppliers. Nevertheless, we take mitigating actions when needed, for example by using a standardised questionnaire that is mandatory for all ALK sites as part our Supplier Management System, and by adding clauses to supplier contracts. ALK’s risks with regards to diversity are not fully explored on all diversity characteristics. For some characteristics, such as age and gender, the risks are deemed to be insubstantial. The overall gender and age distribution of employees at ALK is healthy, however, this picture is not replicated at all management levels. As a result, although not substantial, ALK nevertheless has a potentially elevated risk of missing opportunities for

Sustainability Report 2020 • ALK

Labour rights growth. This risk is mitigated through several internal programmes, approved in November 2020, to ensure a healthy talent pipeline and, initially, to improve the balance of one diversity characteristic, gender.

Targets and results Employee engagement Goal: By 2020, the individual development score is greater than 78. Result: The 2019 development score was 78. No employee engagement survey was conducted in 2020. Goal: By 2020, the engagement score is equal to or greater than 80. Result: The 2019 engagement score was 82. No employee engagement survey was conducted in 2020.

Diversity and inclusion Target: We promote equal opportunity for all. Goal: By 2022, we want women to make up 30% of the shareholder-elected members of the Board of Directors. Result: The number of shareholder-elected women is 1 (20%). However, action has been taken, and two new members have been nominated, one of whom is a woman. Should their nominations be approved, the number of shareholder-elected members on ALK’s Board would increase from five to seven, which would mean that 29% of the Board are female (see page 23). Goal: By 2020, we want women to make up 30% of functional managers and 40% of midlevel managers. Result: The number of women on functionalmanager level remained stable at 21% versus 22% in 2019. The goal was not met. Due to the relatively small number of people at ALK at this level (24) small fluctuations

Number of new hires by gender and region

may give slightly varying results year by year. Actions, such as unconscious bias training, re-evaluation of internal processes etc. will be taken in 2021 to potentially improve the gender balance at this level in the future. The number of women in mid-level management roles increased by three percentage points to 41%, and the goal was achieved. We expect that this development will have a positive influence on the number of women in senior management over the coming years (see page 23). KPI: Local residents are employed, including in management positions. Result: 93% of our employees are on permanent contracts, and locals are recruited at all levels at our headquarters and our 23 global subsidiaries. KPI: Total number and rates of new employee hires and employee turnover by age group, gender, and region.

Result: ALK continued to show a healthy trend in the gender and age distribution of new hires. A higher number of women versus men were hired on temporary contracts, which mirrored the fact that a higher number of women were hired in general. Although more women were hired on part-time contracts, this imbalance is not unique to ALK. 64% of new hires are aged 39 or younger. A notable statistic was also the percentage of new, female hires, with women making up 66% of all new hires, and over 70% in the 30-39 and 60+ age groups (see appendix page 41). The vast majority of new hires were based in Denmark (39%) and Western Europe (36%), which was consistent with the overall number of employees in these regions (72% of the total workforce). Employee turnover rate Overall, the employee turnover rate figures (10%) were within normal limits and were in line with previous years, which means that the COVID crisis had a minimal impact on ALK’s workforce from a retention point of view. Meanwhile, involuntary turnover was

Number of employees by contract type and gender

2018 2019 2020 Men (%) Women (%) Men (%) Women(%) Men(%) Women(%)

2018 2019 2020 Men (%) Women (%) Men (%) Women (%) Men (%) Women(%)

Denmark

61 (45)

75 (55)

46 (38)

75 (62)

53 (32)

112 (68)

Permanent

867 (39)

1,374 (61)

867 (38)

1,399 (62)

878 (38)

North America

54 (49)

57 (51)

42 (48)

45 (52)

37 (51)

36 (49)

Temporary

40 (31)

88 (69)

51 (36)

89 (64)

50 (29)

121 (71)

Western Europe

49 (36)

88 (64)

34 (30)

78 (70)

35 (23)

115 (77)

907 (38)

1,462 (62)

918 (38)

1,488 (62)

928 (37)

1,558 (63)

International Markets Total

14 (41)

20 (59)

11 (34)

21 (66)

16 (50)

178 (43)

240 (57)

133 (38)

219 (62)

141 (34)

279 (66)

Total Total both genders

Gender diversity women %

1,437 (62)

2,369

2,406

2,486

62%

63%

Sustainability Report 2020 • ALK

Labour rights maintained at 3%, which was the same as in 2019. The turnover by gender also remained stable. Looking at turnover by age group, the highest turnover percentages were in the age group 29 and younger, and 60+ (14% for both). This was mostly attributable to voluntary turnover for the 29 and younger group, and retirement for the 60+ group. Geographically, the turnover rates have remained stable and mirror the results from 2019 (see appendix on page 40). KPI: Ratio of basic salary of women to men by employee category, by significant locations of operation. Result: The ratio has been calculated by taking the average base pay of women and men at three professional levels, and at the same job grade. The pay ratio remained stable with minor fluctuations, which was not deemed a cause for concern. The only exception was France. ALK France conducts an annual assessment of gender equality to comply with local law. Equality is assessed on a number of metrics, including pay gap, individual salary, promotion and gender pay ratio among the 10 highest-paid employees. ALK France gained 94 out of 100 in the assessment conducted for 2019. Part of the explanation could be the difference in pay between large cities and urban areas, types of positions occupied by women versus men and seniority. It is also worth noting that due to ALK’s size the number of employees compared on each level is relatively small and may also affect the score. ALK will conduct a new assessment in March 2021

that will explore the pay gap results in depth (see page 41).

Number of women in management 2016 2017 2018 2019 2020 Board of Directors (shareholder-elected only)

Planned activities for 2021 and expected results Although the number of women in senior management is showing an upward trend, to reach our new goals, we will initiate several programmes, measure progress regularly and continuously evaluate their impact towards achieving a more equal gender balance. Furthermore, we will expand our diversity data foundation to look into additional diversity characteristics.

Women

17% (1)

20% (1)

17% (1)

20% (1)

Men

83% (5)

80% (4)

83% (5)

80% (4)

Women

Board of Directors

22% (2)

25% (2)

33% (3)

38% (3)

Men

78% (7)

75% (6)

67% (6)

62% (5)

Board of Management Women

20 % (1)

0% (0)

Men

80% (4)

100% (4)

Functional managers Women

22% (5)

19% (4)

20% (4)

22% (5)

21% (5)

Men

78% (18)

81% (17)

80% (16)

78% (18)

79% (19)

Mid-level managers

Going forward, a new categorisation method for management levels will be applied, reflecting actual roles and responsibilities, on the basis of the job the grading levels defined in our HR-system Workday. As the goals set in 2018 have expired, two new goals have been set. Applying the new categorisation, ALK has achieved gender balance at Manager and Director level and will seek to maintain this positive development. The 2019-baseline figures show that women make up 45% and 52% at Director and Manager-level respectively. For ALK to successfully increase the number of women at VP and Senior Director-level, several activities will be initiated in the following years. A combined target for 2025 was set to advance the percentage of women at this level to 35% (baseline 25%).

Women

38% (36)

35% (37)

34% (41)

38% (44)

41% (50)

Men

63% (60)

65% (68)

66% (78)

62% (73)

59% (73)

First-line managers Women

53% (124)

55% (141)

54% (139)

53% (144)

51% (146)

Men

47% (111)

45% (116)

46% (119)

47% (126)

49% (138)

Total at all management levels Women

48% (166)

47% (182)

46% (184)

47% (193)

46% (201)

Men

52% (178)

53% (205)

54% (217)

53% (222)

54% (235)

2025 Maintain gender balance of approximately

50% at Manager and Director level

2025 Strive to increase the number of women in VP and Senior Director positions to

35% in 2025

Sustainability Report 2020 • ALK

Planet

SDG Target 6.3 ALK prioritises water efficiency across operations through responsible resource consumption. SDG Target 7.2 ALK is committed to increasing the share of renewable energy in our operations. SDG Target 7.3 ALK strives to reduce our resource consumption in cultivating and harvesting raw materials, as well as the manufacturing, packaging and transportation of our medicines. SDG Target 12.5 ALK aims to reduce waste generation through prevention, reduction, recycling and reuse. SDG Target 13.1 ALK applies a precautionary approach to climate challenges and seeks to reduce GHG emissions across the value chain.

Sustainability Report 2020 • ALK

Turning waste into a resource One of ALK’s most successful products to date treats house dust mite allergy, which affects millions of people worldwide. The starting material for the majority of these allergy immunotherapy products comes from the USA, where house dust mites are grown with a precisely formulated food source, in specially designed chambers, that are custom built and maintained at the exact temperature and moisture levels needed for the mites to thrive. This is important because it takes 600,000,000 mites to produce each kilogram of house dust mite source material.

Waste as soil supplement Cultivating mites and purifying them into an extractable form for use as an active ingredient, yields tonnes of waste in terms of excess mite food and proprietary purifying compounds. Glycerine is one of the organic compounds used as a cleaning agent to purify the mites. These are all necessary steps to ensure a high-quality pharmaceutical product. For much of 2020, we have looked for ways in which we could put some of that waste to good use.

“

The mite by-product is very high in organic matter and has many nutrients that can be beneficial to plants, insects, and soil microbes. This product could potentially reduce the amount of fertiliser needed on our rotational fields, increase soil biodiversity and is a great way to reuse our waste.

We have found two very useful ways to repurpose our waste,” says Tim Davis, Vice President, Product Supply North America: “We learned that the nutritional content of the house dust mites’ waste could be used as soil supplement on our farm fields, where we grow grasses and trees. It is a win-win situation for us, as this means that we will use a clean, natural soil supplement in our fields and stop 20-30 metric tonnes of waste from ending up in a landfill.”

Sustainability Report 2020 • ALK

Feeding microbes Until recently, our glycerine waste has either been sent to a landfill or other means of waste disposal. This year, we established a partnership with a local municipality that uses the glycerine to feed the beneficial microbes in their sewage treatment facility.

“

We are happy that we found a way to work with the local community and their scientists to find a new use for the glycerine that we use in our production process. This is a great example of how circular thinking helps both us and the municipality to reduce both costs and environmental impact, as resources are reused. This partnership has helped us reduce waste by 30-40 metric tonnes, and we will continue to look for new ways to reduce, reuse or recycle waste generated in our processes.” Tim Davis VP, Product Supply North America

Sustainability Report 2020 • ALK

Environment and climate factors, which represent environmental risks are monitored and constantly reduced

• Reporting any situation that may pose both immediate and long-term risk to the environment

Policy Climate change is one of the biggest problems facing the world today, and an issue that concerns many of our stakeholders. Some studies suggest that climate change might affect plant and pollen cycles, making allergy seasons longer1 and air pollution worse. Rising temperatures could also cause more allergies in the future and make asthma attacks more severe2. We acknowledge that we, as a manufacturing company, are both part of the problem and contributors to the solution, which is why we strive for sustainable resource consumption and take measures to reduce the climate impact of our production processes. We consistently look for ways we can reduce our resource consumption in cultivating and harvesting raw materials, as well as the manufacturing, packaging and transportation of our medicines.

• Ensure that environmental issues are proactively integrated into planning and design work • Measure the results of our efforts and set new goals for continuous improvements, particularly within the areas of energy consumption, CO2 emissions and water usage All production sites3 adhere to the Global EHS policy and are covered by the Global EHS Management System. Guided by principles 7, 8 and 9 of the UN Global Compact, we take a precautionary approach to environmental and climate challenges.

Action ALK’s global Environment, Health and Safety (EHS) policy sets the standards for environmental protection in our daily work and strives to: • Involve our employees in environmental work • Educate our employees and implement preventative actions to ensure that

Since the launch of our new Code of Conduct, all sites have been encouraged to take a precautionary approach to environmental and climate challenges. These include: • Being conscious of how impact can be reduced in our daily work • Taking an active role in reducing risks

These expectations extend beyond our environmental reporting scope (production sites only) and include all sites around the globe. All employees are required to follow the guidelines listed above to ensure that positive changes, however small, can be made, where applicable. A large-scale internal review was initiated in 2020 to explore in-depth the possibilities of further reducing greenhouse gas emissions, water consumption and waste, as preparation for potentially setting sciencebased environmental targets, as described in the Science Based Targets Initiative (SBTi). Due to travel restrictions imposed by various governments to combat the global pandemic, it has not been possible to fully explore and commit to initiating the SBTi process in 2020, as originally planned. Assuming the situation eases during 2021, the full results of this global review will be shared in our next report. At our site in Oklahoma, we upgraded two pieces of machinery that repurpose wastewater instead of sending it to a treatment plant. The upgrades reduced water consumption for 2020 by 30-40% at the site. As part of our commitment to ensure that we contribute to the European Union’s and Danish government’s ambition to reduce

Pieter De Frenne – Using archived television video footage to quantify phenology responses to climate change – https://doi.org/10.1111/2041-210X.13024

https://www.aafa.org/media/1634/extreme-allergies-global-warming-report-2010.pdf

Hørsholm, Madrid, Vandeuil, Varennes, Port Washington, Post Falls and Oklahoma

CO2 emissions, in 2020, we began gathering and assessing our emissions, guided by the GHG Protocol Corporate Value Chain (Scope 3) Standard. Initially, we are looking into emissions in relation to employee travel, company cars and transportation of our goods. In 2020, no incidents of non-compliance with environmental laws and regulations were recorded through our internal systems. Good farming practices The source materials used in our products are largely cultivated in the USA. A working group, ALK’s Crop Production Team, is responsible for ensuring that our farming practices follow ecosystembased approaches designed to improve sustainability and preserve biodiversity. ALK has been farming the same soil in Plummer, Idaho since 1996. Based on annual samples taken every autumn, we have dramatically increased the level of nutrient exchange (Cation Exchange Coefficient value), increased the level of organic matter (which decreases erosion and increases soil biodiversity), increased the pH by adding lime to bring the soil to more of a neutral (natural) pH value, and decreased the amount of non-native, invasive, and noxious weeds on the property through proper management. We have also planted more than five hundred trees on the property that bring numerous benefits to the soil, the ground water, and the atmosphere.

Sustainability Report 2020 • ALK

Environment and climate

Risks

Targets and results

Although our key in-house production facilities are located in areas that have not historically been affected by natural disasters, this geographical spread calls for risk planning in order to avoid emergencies, such as lack of, or poor access to raw materials: for instance, pollen.

Target: We implement preventative actions, monitor and constantly reduce risks, measure the results of our efforts and set new goals for continuous improvements.

As part of the EHS Management System, ongoing assessments for environmental and climate risks are conducted for routine and non-routine activities. No new risks were identified in 2020, and we continue to focus on monitoring and mitigating risks related to energy consumption, CO2 emissions, waste and water usage, through relevant departments and business units.

Goal: By 2020, energy and water efficiency considerations will be an integrated part of facilities upgrade plans.

Handling of chemicals poses a risk of spills, which is closely monitored. In 2020, no significant spills or releases occurred. We will maintain a sharp focus on which chemicals we use and how they are used, with the aim of constant improvement. ALK has yet to explore in full the impact of our upstream and downstream (Scope 3) activities, however, due to our relatively small operation, the impact on a global scale is likely not very high.

Target: We seek to reduce energy consumption, CO2 emissions and water usage.

Result: In 2020, energy and water efficiency were considered in all major facilities upgrade plans, especially concerning the reuse of water. Goal: By 2020, we want at least 30% of all consumed energy to come from renewable energy sources. Result: In 2020, 38% of consumed energy came from renewable energy. Our facilities in Denmark, Spain and France now run on 100% renewable electricity, through purchasing of green electricity certificates. Goal: By 2020, we want to reduce CO2 emissions by 25% compared to a 2017-baseline. Result: At the end of 2020, the CO2 emissions had decreased by 32% to 6,612 tonnes

Sustainability Report 2020 • ALK

Environment and climate compared to baseline (9,658 tonnes). This great development is largely due to purchasing of green electricity certificates in France. Goal: By 2020, we want at least 45% of our waste to be reused or recycled. Result: In 2020, 38% of the waste was reused or recycled. The target was not met, mainly due to an overall decrease in the amount of waste generated, which decreased by almost 30 tonnes in 2020.

Planned activities for 2021 and expected results A major focus in 2021 will be to explore further possibilities for increasing the share of renewable energy used at our facilities in order to reduce our CO2 emissions. We will explore the possibility of setting up holding tanks at our Oklahoma facility that will transform wastewater and use it for irrigation of our orchard. If successful, this project could potentially repurpose up to 2,000 m3 of water annually. As the targets set in 2018 expired at the end of 2020, new targets have been set to continue our positive contribution to SDGs 6, 7, 12 and 13.

Environment and climate1

2025

60% reduction in CO2 emissions

Unit 2016 2017 2018 2019 2020

Energy – in real terms

MWh 40,230 47,021 46,676 47,055 45,439

Energy – index

Index

101

Energy intensity 39.91 37.08 36.41 34.05 31.06

including emissions from transport, travel and company cars versus a 2019-baseline of total emissions from non-renewable sources

CO2 emissions – in real terms2 Ton 6,002 9,658 8,077 8,198 6,612 CO2 emissions intensity CO2 emissions against baseline

2022

Ton 5.95 7.62 6.30 5.93 4.52 % 100 -16 -15 -32

Direct GHG emissions3

Ton 2,112 2,822 2,989 3,134 3,232

Indirect GHG emissions4

Ton 3,847 6,835 5,088 5,064 3,380

Reuse/ recycle 47%

CO2 emissions – from lost refrigerants Ton 174 265 351 129 193 Renewable energy share % 15 13 13 20 38

of waste

CO2 emissions – index

Water – total, in real terms Water – from production, in real terms Water – index

2022 Annual water consumption levels should not exceed 2019-baseline of

Index

101

m3 102,418 120,960 117,252 122,461 110,530 m3 81,130 90,061 88,564 85,890 81,535 Index

104

Water intensity 0.10 0.10 0.09 0.09 0.08 Waste water – in real terms m3 78,969 89,518 88,564 71,550 55,704

122,000 m

Waste – in real terms

Ton 608 555 600 882 853

Hazardous waste

Ton 36 28 54 75 81

Waste intensity 0.60 0.44 0.47 0.64 0.58 Waste for recycling

% 37 33 33 38 38

The Environment and climate table only includes data from our production facilities in Hørsholm, Madrid, Varennes, Port Washington, Post Falls and Oklahoma. In our collection and reporting, we follow the Global Reporting Initiative (GRI) Standard 305 and GHG Protocol.

2022 Annual energy consumption levels should not exceed 2019-baseline of

47,000 MWh

The CO2-emissions represent a combined Scope 1+2 figure.

Scope 1 GHG Protocol. This figure includes the two most material emission types for ALK, refrigerants and CO2-emissions.

Scope 2 GHG Protocol. This figure includes the two most material emission types for ALK, refrigerants and CO2-emissions.

Energy sources included are electricity, natural gas, gas oil, diesel and district heating. All environmental data have been recalculated this year, and some minor reporting discrepancies were found and corrected. Intensity data in this table is calculated as consumption/cost of sales. We adhere to the principles of the Green House Gas Protocol (GHG protocol) when reporting on GHG emissions.

Sustainability Report 2020 • ALK

Responsible business practices

SDG Target 16.5 ALK complies with laws and seeks to meet international standards in all areas of operations, including in interactions with suppliers and business partners. ALK promotes peaceful and inclusive societies, and is committed to substantially reducing corruption and bribery in all their forms.

Sustainability Report 2020 • ALK

Responsible business conduct Our Code of Conduct specifically prohibits:

Policy ALK’s Code of Conduct describes the standards, norms and principles for our interactions with stakeholders, and outlines our expectations when it comes to professionalism, honesty and integrity. ALK’s managers are responsible for ensuring that each employee is familiar with the code and its importance. The Code of Conduct contains summarised versions of all broadly relevant policies including: • • • • • •

Interactions with healthcare professionals Human rights Anti-corruption and fraud Competition Marketing practices Grants, donations and political contributions

In all of these areas, we follow international standards and codes of ethics, such as the codes set out by the European Federation of Pharmaceutical Industries and Associations (EFPIA), The Ethical Committee for the Pharmaceutical Industry, the UK Bribery Act, and the US Foreign Corrupt Practices Act as well as other international standards.

• Offering or accepting anything of value that could be interpreted as an attempt to influence behaviour that could inappropriately influence decisions • Engaging with companies where there is a personal conflict of interest • Promotion of ALK pharmaceutical products to the general public, with the exception of markets where this is expressly permitted • Collusion, conflicts of interest, price fixing or other anti-competitive behaviour • Interactions with healthcare professionals and patients’ organisations that do not serve a legitimate purpose The Code of Conduct was developed in close collaboration with other relevant internal stakeholders. All subsequent revisions have been signed off by the Board of Management. The Code of Conduct is available in eight languages. All employees must read and sign off on the Code of Conduct and undergo Code of Conduct training once annually. The Code of Conduct can be downloaded from our website: https://www.alk.net/code-conduct In the development of branded and nonbranded promotional material, ALK complies with national laws, codes of practice, regulatory legislation and standards for good ethical practice. The material must be

accurate, balanced, fair and be approved by a medically qualified signatory, prior to publication. In addition, ALK strives to develop promotional material that is unbiased and representative of the local population. ALK is committed to ensure transparent and ethical interactions with healthcare professionals, healthcare and patients’ orgsanisations and the general public. Tax policy ALK’s tax policy is publicly available on our website. The ALK Group must be in compliance with all relevant tax regulations and tax guidelines (including the OECD guidelines on base erosion and profit shifting). ALK does not engage in tax reduction measures such as tax avoidance, use of tax shelters or transactions with significant reputational risk. Anti-corruption We are committed to working against corruption in all its forms, and we take a zerotolerance approach to corruption, including facilitation payments, kickbacks, fraud and bribery. No ALK employees are allowed to accept gifts of significant value. Anti-corruption considerations are an integrated part of our business partner and supplier-handling process, and we ensure that our partners and suppliers acknowledge and respect this responsibility when doing business with us. Legal entities within the

ALK group may adopt local policies and procedures that are more stringent than those contained in the ALK policy. Our commitment is set out in ALK’s Code of Conduct and ALK’s anti-corruption policy and supports the UN Global Compact Principle 10 and UN Sustainable Development Goal 16. Suppliers A typical ALK supplier would be an international, well-established supplier to the pharmaceutical industry, and often located in either the USA or Europe. All suppliers of critical production materials are vetted and categorised based on risk in relation to quality, finance, EHS and sustainability. Business Review Meetings are held on a frequent basis. ALK maintains auditing rights for high-risk suppliers. In cases where supplies come from a third party (a tier 2 supplier), the original supplier must be an already-approved ALK supplier. Quality and patient safety Quality is a strategic priority for us, as it concerns both patient safety and public health. It is essential to our daily work, and we continue to develop the methods we use to train our employees, in order to ensure standardisation and consistency and thereby, the safety and well-being of people who use our products. In the production of our treatments, we adhere to GxP requirements. All these requirements are described in various procedures within the Quality Management System.

Sustainability Report 2020 • ALK

Responsible business conduct Safety, privacy and respect are watchwords in our clinical trials, which we conduct in close collaboration with healthcare professionals, scientists and people with allergy. We are also committed to the EFPIA’s and the Pharmaceutical Research and Manufacturers of America’s (PhRMA) Principles for Responsible Clinical Trial Data Sharing guidelines in a manner that safeguards the privacy of patients, respects the integrity of national regulatory systems, and protects proprietary information.

subject to periodic and routine inspections by regulatory authorities and partners.

Production and manufacturing processes are subject to periodic and routine inspections by regulatory authorities as part of their monitoring processes, in order to ensure that all manufacturers adhere to the prescribed requirements and standards. In 2020, four external inspections of our sites were successfully completed. Two were performed on-site, while the other two were performed remotely.

Animal welfare ALK is committed to focusing on animal welfare throughout our research and development of new medicines. ALK must select professional animal suppliers, who are well recognised, and accredited (according to the Federation of European Laboratory Animal Science Associations’ (FELASA) guidelines) to serve the pharmaceutical industry. Our commitment to animal welfare also covers the shipment and transport of animals to our animal facilities, which must also comply with international and national laws and be established to house laboratory animals in a manner that favours natural behaviour.

During 2020, ALK had no product recalls or critical product issues. ALK has a rigorous safety reporting system in place ensuring that safety data from any source, including clinical trials and from the market, are collected and analysed systematically by ALK’s global pharmacovigilance team. We do this to ensure that the safety profile of our products stays beneficial, and that relevant authorities are aware of any safety issues arising from our products. ALK’s pharmacovigilance processes are also

All ALK employees are required to report any case of side effects from ALK products within 24 hours of learning about them. In 2020, all employees were required to read and sign that they understood this obligation. Furthermore, the reporting of side effects was included as a theme in the annual Code of Conduct training, which was completed by 94% of employees globally.

Scientific work involving laboratory animals, must be planned to minimise distress and pain, to refine experiments, to choose the right animal species and to reduce the number of animals. Furthermore, all studies must be planned and executed in a way that recognize the 3 R’s: replacement, refinement

Sustainability Report 2020 • ALK

Responsible business conduct and reduction. ALK strives to avoid any unnecessary repetition of animal studies. Transgenically altered animals will be used when more exact research results can be obtained or when the use of transgenic animals requires fewer animals than conventional research.

Action In 2020, we continued our anti-corruption awareness training as part of our extended Code of Conduct training. The themes covered in the training ranged from corruption, harassment, conflicts of interest, interactions with suppliers and healthcare professionals, and more. To further strengthen our commitment to transparency, and to promote a culture where feedback and open dialogue are welcome, we continued our awarenessraising efforts by including guidance on the various ways in which employees can raise concerns, and how to approach situations where they believe the Code of Conduct may have been violated.

supplier assessments in relation to human rights, labour rights, environment and corruption. In 2020, no incidents of anti-competitive behavior, anti-trust, and monopoly practices have been reported through ALK Alertline. Reaching our sustainability goals is an important issue for the Board of Management and the Board of Directors and, in 2020, sustainability goals became a part of the Board of Management’s incentive programme. The new sustainability goals, set in 2020, have been integrated into the balanced score card process for 2021. ALK employees are made aware of the different grievance mechanisms that exist at least annually, such as escalating issues through their reporting line, HR, EHS or via ALK Alertline. Employees can file a report via ALK Alertline in multiple languages, either by telephone or via an online form. A direct link was made available on ALK’s mobile intranet Air for easy access to filing a report.

Mechanisms for mitigating and preventing corruption and bribery include: • An annual assessment of the risks in relation to our industry and the countries in which we operate, by the ALK Risk Committee • The vetting of relevant external commercial partners in relation to corruption • Ad hoc screenings and assessments, which are documented and if needed, mitigation plans are developed

Risks We continue to add anti-corruption clauses to new, large supplier agreements, which generally also contain audit rights, allowing us to access documentation to verify each supplier’s compliance. In 2020, no observations of violations were made in

More than 99% of our major suppliers are located in Europe and North America, regions generally perceived as being low risk with regards to corruption. In 2020, the risk of corruption and unethical business practices remained unchanged. However, we continue to conduct due diligence of third-party relationships, where relevant, on a riskbased approach, either internally or through partners. The classification of risks in relation to corruption is based on international indicators such as Transparency International’s Corruption Perceptions Index.

The main risks related to our activities include employees’ and business partners’ violation of our Code of Conduct and anticorruption commitment, along with any resulting legal and financial consequences.

• Ad hoc, third-party due diligence of partners and suppliers, where relevant Responsible business practices are an integrated part of our operations, either through national and international codes of ethics, or our own positions. Should ALK’s

risk map change, necessary measures will be taken to ensure that those risks are mitigated, either through increased monitoring or by modifying our governance processes. Meeting quality standards in our production and manufacturing processes is a prerequisite for ALK’s licence to operate and our competitive strength. Our production processes and quality standards have been developed and optimised over many years. To mitigate risks, we invest significantly in ensuring robustness and compliance in our processes. Overall risk of counterfeiting of ALK medicines is considered low. The main risks in connection with our products come from failures to report side effects. We monitor the effects of our products both before and after they gain marketing authorisations. If, despite the high levels of quality and safety, a situation should occur in which it is necessary to recall a product, ALK has procedures in place to ensure that this can be managed swiftly and efficiently. Large contracts are reviewed and approved by Global Procurement who, jointly with the Legal department, ensure compliance with our commitment to responsible business conduct, anti-corruption and sustainability. We aim to maintain our standing by acting in compliance with all applicable regulations and legislation.

Sustainability Report 2020 • ALK

Responsible business conduct

Targets and results Target: We do not contribute to political parties or candidates of any kind. KPI: Amount contributed to political parties. Result: No political contributions have been made on behalf of ALK or reported via the ALK Alertline. Target: We work to eliminate corruption and bribery in the entire value chain. KPI: Number of reports regarding corruption and bribery received through ALK Alertline. Result: No incidents of corruption or bribery were reported via ALK Alertline in 2020. However, two cases concerning other matters were reported through ALK Alertline and four cases via other channels, of which, the allegations were substantiated in one case, three were closed as unfounded after internal investigations, one was deemed to be outside the scope of ALK Alertline, and one is still being investigated. KPI: Percentage of employees who have read the ALK Code of Conduct. Result: 95% of employees read and signed off on our Code of Conduct in 2020.

KPI: Percentage of employees who have passed the ALK anti-corruption training and test. Result: In 2020, ALK’s anti-corruption training was expanded to a broader Code of Conduct training, which is why this KPI is no longer applicable. Corruption, bribery and fraud are part of, and will continue to be a recurring topic, in our Code of Conduct training in the future. Goal: By 2020, we want to test all employees on a yearly basis about their knowledge of business ethics compliance. Result: 94% of employees successfully completed the Code of Conduct training. Employees on long-term sick leave, parental leave or who left the company in the period when the training was open are not part of this statistic. Goal: By 2020, we want to raise the Quality Mindset Maturity Index by 10% compared to baseline. Result: The Quality Maturity Mindset Index (QMMI) is calculated by rating each site or area on how well they apply the Quality Mindset. The index rose 13% over the last two years, which is a significant improvement.

Sustainability Report 2020 • ALK

Responsible business conduct

Planned activities for 2021 and expected results A new Sustainability Committee will be established with overall responsibility for ensuring the implementation and monitoring of the ALK Sustainability Policy and its governance. The Committee will consist of several key business units, critical to the realisation of the new sustainability strategy, including members from the extended Board of Management. Having a strong Quality Mindset is striving to meet or exceed the needs and expectations of our colleagues and customers and to continuously improve the quality of our work. In 2021, we will further develop the Quality Mindset Maturity Index and continue training our employees and upgrading qualityrelated IT systems.

We will continue our efforts in training employees on topics covered in our Code of Conduct. The selection of topics will be determined based on developments in society, as well as based on our own internal assessments. An additional policy is under development specifically concerning conflicts of interest. An assessment will be conducted to ensure that our whistle-blower hotline, ALK Alertline meets our requirements going forward, and whether additional safeguards need to be in place to protect anonymity. To ensure continued focus on responsible business conduct, a new goal has been set.

2022 Maintain ALK Code of Conduct employee training participation

above 90%

Sustainability Report 2020 • ALK

Appendices

Sustainability Report 2020 • ALK

Appendix

Our work with sustainability Sustainability reporting principles ALK uses Global Reporting Initiative’s (GRI) Sustainability Standards as guidance to determine report content in terms of stakeholder inclusiveness, context, materiality and completeness. The report’s quality is defined by balance, comparability, accuracy, timeliness, clarity and reliability. The reporting period covered by this report extends from 1 January 2020 to 31 December 2020. Reporting scope The reporting scope is differentiated based on the principles outlined above. The environmental data in this report covers only ALK’s production sites in the USA, Denmark, Spain and France. All other data regarding human rights, labour rights and responsible business practices cover the entire ALK group, unless otherwise specified. Data from 2019 will henceforth be used as the baseline for our sustainability work and reporting. Governance ALK’s sustainability planning and activities reflect actual and potential risks and opportunities covering human rights, labour rights, climate and environment, and anticorruption – directly or via ALK’s suppliers and partners. The oversight, accountability, and responsibility for the ALK sustainability purpose and strategy rests with ALK’s

Governance structure

Board of Directors Overall responsible for ALK’s sustainability strategy and purpose, and have delegated the responsibility to the Board of Management

ALK’s cultural beliefs Our cultural beliefs and behaviours describe the aspiration for our company culture and encompass the attitude and mindset required to become the world leader in allergy.

Board of Management Responsible for approval of all sustainabilityrelated policies, development of strategy and purpose

Do the right thing Understand your role

ALK Sustainability Committee Responsible for ensuring implementation and monitoring of the ALK Sustainability Policy and governance

Take ownership and get the job done Have the courage to make tough decisions

Pursue growth Think ‘people with allergy’ first

ALK Sustainability team Responsible for coordinating and supporting implementation and daily management of the sustainability strategy, including identifying and monitoring risks and relevant, complete, consistent, transparent, and accurate reporting. The ALK Sustainability team is also responsible for advising policy owners on policy content

See change as an opportunity for improvements Look for better solutions

Build bridges Understand others’ perspective Reach out to colleagues Help others to be a success

Business units Responsible for daily management, monitoring and execution of the sustainability plans of action. Responsible for reporting to the ALK Sustainability team on a quarterly basis

Sustainability Report 2020 • ALK

Appendix

Our work with sustainability Board of Directors, who have delegated this responsibility to the Board of Management. Relevant business units across ALK are responsible for the daily management of the Access to Allergy Care for All strategy and the operational-level targets, including monitoring of development, risk identification and management, integration into decision-making and processes and internal reporting to the ALK Sustainability team. The ALK Sustainability team coordinates and supports implementation and daily management of the sustainability strategy. The team is also responsible for monitoring sustainability performance and for supporting the organisation with expertise within sustainability, as well as reporting on risks, activities and progress to the Board of Management and Board of Directors. The identification and planning of connected activities are conducted by the ALK Sustainability team, with final approval by the ALK Sustainability Committee. The achievement of ALK’s sustainability goals is guided by a set of guidelines, the ALK Code of Conduct, which promotes ALK’s cultural beliefs and business integrity, and underlines the obligation to comply with legislation and the UN Global Compact which we signed in 2019. All ALK employees must observe the Code of Conduct in relation to customers, colleagues, shareholders,

society, suppliers and partners. Our cultural beliefs and behaviours describe our company culture and encompass the attitude and mindset required to transform ALK into the world leader in allergy. Due diligence, risk management and grievance mechanisms Sustainability-related risk assessments are carried out as an integrated part of business-relevant risk assessment schemes and procedures, or as a sustainability due diligence process. The ALK Risk Committee assists the Board of Management with the overall responsibility of risk management. The ALK Risk Committee normally meets twice a year, or more, if required. The committee assesses risks relating to the entire ALK Group, including risks that could prevent us from reaching strategic and financial goals and risks that could damage our reputation. The committee is also responsible for overseeing the mitigation of these risks. Sustainability risk assessments are integrated into the overall due diligence processes and procedures. ALK takes additional responsibility by vetting relevant external partners through the Procurement department to minimise sustainability-related risks. ALK encourages suppliers and business partners to adhere to our standards in the areas of human rights

and labour rights, the environment and anticorruption. In addition to the ALK Alertline, our whistleblower scheme, ALK has several internal grievance mechanisms for attending to less serious issues. These include, but are not limited to, preventative/protective functions within: Employee Representative Groups, HR, EHS and Legal. These business units and groups are responsible for managing and resolving grievances and relevant matters are reported to the Board of Directors. Reports received through the ALK Alertline are administered by an independent organisation, but processed internally, with oversight from the chairman of the Audit Committee. Each report is evaluated and, if substantiated, corrective and preventative actions are taken. No retaliation towards the employee is allowed, regardless of whether the reports are made through the ALK Alertline or other channels. External stakeholders such as customers, patients and the general public are able to make complaints through customer service or other similar channels. Depending on the nature of the requests, these are handled either internally or externally. Grievance mechanisms that are applied by ALK for both internal and external

stakeholders are inspired by Principle 31 of the UN Guiding Principles for Business and Human Rights. Transparency At ALK, we do business with integrity and are committed to respecting the legal requirements and industry ethical codes of each individual market in which we operate. We are committed to providing open and honest information about our sustainability efforts, results and related policies, both internally and externally in relation to our stakeholders. Our work with sustainability centres on an ambition to contribute to the 2030 Agenda for Sustainable Development and is monitored on the basis of relevant indicators that have been developed by the GRI, and other relevant standards. In addition to these, we follow the principles outlined in the UN Global Compact, OECD Guidelines for Multinational Enterprises, International Labor Organisation (ILO), UK Bribery Act, UK Modern Slavery Act and the US Foreign Corrupt Practices Act. Our commitments, efforts and goals are disclosed in our Sustainability Report and on our website, and follow the Danish Financial Statements Act sections 99a, 99b and 107d.

Sustainability Report 2020 • ALK

Appendix

Explanation of calculations Employee data All employee data in this report is presented as headcount. Part-time work is defined as any work below the local national standard in the countries in which we operate. Temporary employment is defined as employment, with a pre-agreed end-date. All employee-related data are downloaded from our internal HR-system Workday, with the exception of LTIF data, which is reported directly to the EHS organisation. Germany, although within scope as a significant location of operations, is excluded from pay ratio by function calculations because local customs discourage implementation of a job grade system. The ratio is calculated by comparing the average employee base pay, only on those job grade levels in which the opposite gender is represented. Should there be no comparable men or women at a certain pay grade, these averages are removed from the ratio. ALK also reports a raw pay gap ratio,

which includes the base pay and allowances of all employees except the CEO, to ensure an accurate representation of average employees. The turnover ratio is calculated by dividing the number of employees who left the company by the average number of employees in the reporting year. Absence is calculated as number of workdays with absence due to sickness, divided by total scheduled working days. People with allergy The data regarding the number of people treated is calculated based on actual sales numbers combined with assumptions in markets where ALK is not directly involved in the manufacture of the final product. Suppliers Supplier data is made available through our internal SAP system and evaluated based on geographical location.

Environment Our GHG emissions are calculated based on the GHG Protocol Corporate Accounting and Reporting Standard. Only production sites are within scope for environmental reporting within Scope 1 and 2. CO2 Scope 1 + 2 emissions include all material types of fuels and refrigerants, including HFCs, gas oil, diesel, heating etc. Renewable energy is subtracted from reported total CO2emissions. Quality The Quality Maturity Mindset Index is calculated by rating each site or area on how well they apply the Quality Mindset. Having a strong Quality Mindset is striving to meet or exceed the needs and expectations of our colleagues and customers and to continuously improve the quality of our work. The index measures the overall quality compliance maturity of a site or area.

Sustainability Report 2020 • ALK

Appendix

Key figures Employee turnover by type and region 2018

2020

2019

Aver- Total Aver- Total Aver- Total age Voluntary Involuntary Retirement all types age Voluntary Involuntary Retirement all types age Voluntary Involuntary Retirement all types

Count % Count % Count % Count % Count % Count % Count % Count % Count % Count % Count % Count % Denmark

770 63 8%

42 5%

2 0% 107 14%

827

85 10%

26 3%

3 0% 114 14%

776

68 9%

27 3%

North America1

455 38 8%

19 4%

4 1%

61 13%

489

49 10%

28 6%

1 0%

78 16%

489

32 7%

22 4%

3 1%

57 12%

Western Europe2 870 33 4%

33 4%

4 0%

70 8%

932

37 4%

19 2%

2 0%

58 6%

914

23 3%

28 3%

8 1%

59 6%

Eastern Europe and Intl. Markets3 108 15 14%

6 6%

0 0%

21 19%

4 5%

6 7%

0 0%

10 11%

132

9 7%

3 2%

0 0%

12 9%

10 0% 259 12% 2,400 175 7%

79 3%

6 0% 260 11% 2,310 132 6%

80 3%

Total Turnover 2,209 149 7% 100 5% The United States of America and Canada

France, Spain, Germany, Finland, Sweden, Norway, Italy, Ireland, Austria, Switzerland, United Kingdom, Belgium, Netherlands

7 1% 102 13%

18 1% 230 10%

Czech Republic, Slovakia, Poland, Jordan, Turkey, China, Hong Kong, Russia, Slovenia Jordan

Employee turnover by type and age group 2018

2020

2019

Aver- Total Aver- Total Aver- Total age Voluntary Involuntary Retirement all types age Voluntary Involuntary Retirement all types age Voluntary Involuntary Retirement all types

Count % Count % Count % Count % Count % Count % Count % Count % Count % Count % Count % Count % 29 and younger

229 30 13%

10 4%

0 0%

40 17%

308

27 9%

6 2%

0 0%

33 11%

216

24 11%

6 3%

0 0%

30 14%

30-39

627 56 9%

17 3%

0 0%

73 12%

690

43 6%

16 2%

0 0%

59 9%

684

45 7%

31 5%

0 0%

76 11%

40-49

706 45 6%

34 5%

0 0%

79 11%

743

68 9%

29 4%

0 0%

97 13%

715

43 6%

23 3%

0 0%

66 9%

50-59

510 16 3%

28 5%

0 0%

44 9%

527

31 6%

22 4%

0 0%

53 10%

549

18 3%

1 0%

37 7%

60 and older

132 2 2%

11 8%

10 8%

23 17%

135

6 4%

18 13%

146

2 1%

17 12%

21 14%

Employee turnover by type and gender 2018

2020

2019

Aver- Total Aver- Total Aver- Total age Voluntary Involuntary Retirement all types age Voluntary Involuntary Retirement all types age Voluntary Involuntary Retirement all types

Count % Count % Count % Count % Count % Count % Count % Count % Count % Count % Count % Count % Female Male

1,359 85 6%

52 4%

7 1% 144 11% 1,488

96 6%

45 3%

6 0% 147 10% 1,438

75 5%

40 3%

10 1% 125 9%

845 64 8%

48 6%

3 0% 115 14%

79 9%

33 4%

0 0% 113 12%

57 7%

40 5%

8 1% 105 12%

912

871

Sustainability Report 2020 • ALK

Appendix

Key figures Number of new hires by gender and age

Ratio of basic salary of women to men by significant locations of operation

29 and younger 30-39 40-49 50-59

60+ Total

2018 Women

84 73 54 29 0 240

Men

66 47 39 22 4 178

Total

150 120 93 51 29%

22%

12%

4 418

Age group % of all hires

36%

N/A

% women

56% 61% 58% 57% 0% 57%

2019 Women Men Total

77 54 56 32 0 219 55 41 24 11 2 133

Age group % of all hires

38%

58% 57% 70% 74% 0% 62%

27%

23%

12%

N/A

2020

Men Total

Average of Total Base Pay 100 % FTE ALK

89 101 103 88 99 98

Denmark

94 100 102 90 101 100

France

80 94 101 74 85 101

Spain

97 93 97 100 98 98

United States

99 90 94 101 88 92

Note: Significant locations of operation are defined as countries with more than 200 employees. ALK has a relatively small number of employees in each category that are used as a base for pay gap comparison. Small differences in seniority, specialist area and geographic location may disproportionately affect the final results, especially when divided into locations.

132 95 80 43 2 352

% women

Women

2019 2020 Pay ratio – Manage- Profes- Manage- Profesof women to men ment sional Support ment sional Support

91 93 60 30 5 279 50 36 33 20 2 141 141 129 93 50 31%

22%

12%

7 420

Age group % of all hires

34%

% women

65% 72% 65% 60% 71% 66%

N/A

Number of employees by location Number of employees

2018 2019 2020 Men (%) W oman (%) Men (%) Woman (%) Men (%) Woman(%)

Denmark

288 (35)

537 (65)

287 (35)

529 (65)

286 (34)

559 (66)

North America

238 (49)

248 (51)

243 (50)

246 (50)

250 (50)

255 (50)

Western Europe

318 (35)

598 (65)

317 (34)

619 (66)

313 (33)

642 (67)

63 (44)

79 (56)

71 (43)

94 (57)

79 (44)

102 (56)

International Markets Total Total number of employees

907 (38) 1,462 (62)

918 (38) 1,488 (62)

2,369 2,406

928 (37) 1,558 (63) 2,486

Sustainability Report 2020 • ALK

Appendix

ESG key figures ESG key figure overview

Unit

2020 2019 2018 2017 2016

Environmental data CO2e Scope 1

Ton 3,232 3,134 2,989 2,822 2,112

CO2e Scope 2

Ton 3,380 5,064 5,088 6,835 3,847

Energy Consumption Renewable Energy Share Water Consumption

163,582

169,3981 168,035 169,275 144,826

% 38 20 13 13 15 m3 110,530 122,461 117,252 120,960 102,418

Social data Workforce2 Gender Diversity Gender Diversity, percentage of women on all management levels Gender Pay Ratio of men to women

Headcount 2,486 2,406 2,369 2,284 2,168 % 63 62 62 62 63 % 46 47 46 47 48 Times

1.14

1.13

1.12

1.16

Absence due to sickness

3.1

2.7

n/a

Employee Turnover Ratio, voluntary and involuntary

1.23

Governance data Gender Diversity, Board Board Meeting Attendance Rate CEO Pay Ratio3

% 20 17 20 17 17 % 98 97 98 96 97 Times 34 29 33 49 n/a4

A reporting discrepancy was found post-publication of the 2020 annual report. The figure is updated to 169,398 from 164,639 reported last year.

In 2016, ALK did not have a CEO for the full year

Environment CO2 Scope 1 + 2 emissions include all material types of fuels and refrigerants, including HFCs, gas oil, diesel, heating etc. Renewable energy is subtracted from reported total CO2-emissions. Energy consumption in GJ is calculated as MWh*3.6. All environmental data is reported for production sites only (Hørsholm, Madrid, Vandeuil, Varennes, Port Washington, Post Falls and Oklahoma). Social Workforce is calculated as the headcount of permanent + temporary employees on 31 December 2020. All data is downloaded from ALK’s internal HR system Workday. The gender pay ratio is calculated by comparing the median total compensation of men to women. The CEO is excluded. The turnover ratio is calculated by dividing the number of employees who left the company by the average number of employees in the reporting year. Absence is calculated as number of working days with absence due to sickness, divided by total working days. Governance The CEO pay ratio is calculated as total compensation divided by median staff total compensation. The Board Meeting Attendance rate is calculated as (number of meetings*number of members)-meetings not attended/(number of meetings*number of members)*100.

Sustainability Report 2020 • ALK

Appendix

Indicator overview THEME

PAGE

UN GC

Employees

GRI

NASDAQ

15-19, 20-23, 31-33, 37-38

1, 2, 3, 4, 5

102-41, 102-8, 202-2, 401-1, 401-2, 403-1, 403-2, 403-3, 403-4, 404-3, 405-1, 405-2, 406-1, 407-1, 408-1, 409-1, 412-2, 416-1,

S2-S10, G4, G7

31-35

1, 2

417-2, 417-3

27-29, 39

7, 8, 9

302-1, 302-2, 302-4, 303-1, 304-2, 305-1, 305-2, 305-5, 306-2, 306-3, 307-1

E1-E10

3, 4, 9-23, 27-29, 31-35, 37-38 42

6, 8, 10

102-9, 103-1, 103-2, 205-1, 205-2, 205-3, 206-1, 414-1, 414-2, 415-1, 418-1, 419-1

S1, G3, G5, G6, G8

Topics covered: Freedom of association, nondiscrimination, diversity and inclusion, work-life balance, types of employment

People with allergy

UN SDGS

Topics covered: product safety, access to medicines, R&D, clinical trials

Environment/climate Topics covered: energy, waste, water, GHG emissions

Governance Topics covered: CEO pay ratio, responsible business practices, Code of Conduct, suppliers, Management, stakeholder interaction

Company information Topics covered: principles, standards, activities, business model

3-6, 9-13, 16-23, 27-29, 31-35

102-1, 102-11, 102-12, 102-14, 102-15, 102-16, 102-17, 102-18, 102-19, 102-2, 102-20, 102-21, 102-22, 102-24, 102-26, 102-29, 102-3, 102-30, 102-31, 102-32, 102-33, 102-34, 102-4, 102-43, 102-44, 102-46, 102-47, 102-49, 102-5, 102-50, 102-6, 102-7

Graphic design and production: Noted

ALK-Abelló A/S • Bøge Allé 6-8 • DK-2970 Hørsholm, Denmark • CVR no. 63 71 79 16 • Tel. +45 45 74 75 76 • www.alk.net

Sustainability Report 2020

There when you need us

Falck Sustainability Report 2020

Intro

Contents Intro

Health & well-being

A word from the CEO

Health and well-being is our business

Our commitment

Quality management and patient safety

Sustainability dashboard

Innovation 11

8 10

People 12

Increasing engagement while under pressure

Health and safety

Diversity and inclusion

Environment & climate 18

Transitioning to a green fleet

Trust 21

A trusted business partner

Using our whistleblower system to focus initiatives

Founded in 1906. Today, we are 27,000 highly skilled professionals, delivering more than 9 million emergency response and healthcare services every year.

Falck Sustainability Report 2020

Supporting society is our core business Falck is an international leader in emergency response and healthcare services. We help people in urgent need and bring peace of mind to the local communities we serve. Falck is committed to supporting and contributing to the societies we are part of. Our commitment also extends to acting responsibly as a company and to contributing to a socially, environmentally and economically sustainable development.

Intro

Falck Sustainability Report 2020

Intro

Health and well-being is our business. It is the very core of what we do. In all our business units, our job is to save lives, provide treatments, prevent accidents and care for the health and well-being of people.

COVID-19. Every fatality is a tragic reminder that safety must always come first and that our target for work-related fatalities is – and can only be – zero. We want to be a great place to work where diversity and inclusion are an intrinsic element of our business, and in our persistent efforts to pursue that goal, we support the UN Sustainable Development Goal no. 8, “Decent work and economic growth”.

This commitment is reflected in our organisation, our systems and structures. Our quality procedures are aimed at ensuring patient safety. Our innovation efforts are aimed at setting the future standard for emergency response. Our approach thereby supports the UN Sustainable Development Goal no. 3, "Good health and well-being".

We are aware that some of our activities have an adverse impact on the environment in relation to the fuel consumption of our large fleet of vehicles. Therefore, in 2020, we began preparations for a transition from diesel and petrol-powered vehicles to electric vehicles and for adopting the use of biofuels. Unfortunately, today’s battery technology does not support a shift to electric ambulances as speed and range are still too limited for ambulances to be fully functional. Instead, we are increasingly looking at using biofuels for the heavy-duty vehicles in our fleet as this would lower our CO₂-impact considerably, thereby supporting UN Sustainable Development Goal no. 13, “Climate action”.

Our people constitute our key resource in delivering our services. In a year when the world has been deeply affected by a global pandemic, Falck employees have continued to deliver, supporting national healthcare systems under pressure and thereby the infrastructure of society. Employee engagement even went up during the year, despite the pressure on frontline employees and significant organisational changes, reflecting a deep sense of purpose among our people. However, our work is not without risk. In 2020, Falck recorded eleven fatalities; eight Falck employees, two patients and one member of the public. Six of them died after contracting

Trust is vital to our license to operate at Falck. People rely on us to be there every day, and that requires us to be a trusted partner to our customers, to patients and to the local communities we serve. Our Code of Conduct provides everyone with a common understanding of how we want to conduct our business. We have the necessary policies,

processes and procedures in place. We have completed employee training and awareness campaigns. We have optimised our governance structure, and we use our whistleblower system to discover where to focus our improvement initiatives. This is no guarantee that cases of unethical behaviour will not occur at Falck, but it does provide a thorough foundation for identifying them and acting upon them, thereby supporting the UN Sustainable Development Goal no. 16, “Peace, justice and strong institutions”. Falck remains committed to supporting the UN Global Compact, to its ten principles on human rights, labour, environment and anti-corruption and thereby also to the principles for sustainable development. It is our ambition to continue to develop our services to ensure a positive impact on society, minimise adverse effects on the environment and improve responsible business practices within our four key areas of health, people, environment and trust.

Jakob Riis CEO

Falck Sustainability Report 2020

Intro

Our commitment We are committed to the UN Global Compact. We have defined four main areas linked to the UN Sustainable Development Goals (SDGs) where our business has an impact and where we believe we can contribute the most. Our commitment is firmly embedded in our Code of Conduct and in our Winning Behaviours. Commitment to the UN Global Compact Falck is a signatory to the UN Global Compact, and this report serves as our annual Communication on Progress. We commit to its ten principles on human rights, labour, environment and anti-corruption and thereby

Health & well-being Healthcare services, saving lives and promoting health and well-being is at the heart of our business and our business model.

also to the principles for sustainable development agreed upon internationally and referenced in the UN Global Compact, i.e. the principles mentioned in the International Bill of Human Rights, the International Labor Organisation’s Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on the Environment and Development and the UN Convention against Corruption. We integrate our sustainability efforts in our daily business decisions and strategy. Our commitment is firmly embedded in our Code of Conduct and in our Winning Behaviours.

Four main focus areas, four SDGs Being mindful of our social, environmental and economic impact, we give particular attention

People We aim to provide our employees with an inspiring, diverse and safe workplace that provides equal opportunities and where everybody can thrive personally and professionally.

to our impact on 1) the access to healthcare of our customers and the communities in which we operate, 2) the people we employ, 3) climate and the environment around us, and 4) the trust of our employees, customers and other stakeholders. These four areas are described further in the four main chapters of this report. For each focus area we have identified the UN Sustainable Development Goal (SDG) which best corresponds to our efforts and to which we believe we can contribute the most: SDG 3 (Good health and well-being), SDG 8 (Decent work and economic growth), SDG 13 (Climate action) and SDG 16 (Peace, justice and strong institutions). This way, we ensure that we address the global challenges most closely linked to Falck’s business.

Environment & climate We commit to identifying and mitigating risks, promoting sustainable processes and products and increasing energy efficiency with a special focus on fuel consumption.

About this report This report serves as our second annual Communication on Progress to the UN Global Compact, to which we became a signatory in January 2019. The reporting covers our social, environmental, ethical and diversity impact and actions and therefore represents our statutory statement on social responsibility and the underrepresented gender in accordance with sections 99a and 99b of the Danish Financial Statements Act. This Sustainability Report is part of Falck’s annual reporting and covers the same period as Falck’s Annual Report 2020.

Trust Our compliance strategy and Code of Conduct contribute to our ability to build trust and develop a culture of integrity.

Falck Sustainability Report 2020

Intro

Sustainability dashboard The sustainability dashboard defines a number of KPIs describing Falck’s social, environmental and ethical impact. The KPIs relate to the overall focus areas of our sustainability efforts, within which we measure our outcome and progress as described in this report. Compared to 2019, we have added a KPI for fatalities, reflecting an increased focus on health and safety in our operations in 2020.

2020

2019

2018

2017

26.7

25.2

30.2

27.1

17.9

14.3

11.9

15.6

Employee gender ratio (female/total) (%)

Management gender ratio (female/total) (%)4

2/6

Response rate (%)

Overall employee satisfaction score

Notes

People Employee turnover1 Work-related accidents Lost Time Injury Rate (LTIR)2 Fatalities 3 Diversity - gender

Women on BoD (female/total) (share)5 Employee engagement

Environment & climate

KPIs are not defined for the focus area "Health & well-being", but we expect to define them in 2021. Targets are not yet included in the sustainability dashboard, but we expect to add them in 2021.

Kilometres driven (1000 km) Ambulance6

124,802

145,015

156,243

Roadside assistance7

10,472

11,140

11,693

Other vehicles8

20,443

25,153

27,265

155,717

181,308

195,201

Total

The KPIs in the dashboard are elaborated on in the following chapters.

CO2 emissions (tonnes) Ambulance9

49,384

57,519

62,132

Roadside assistance10

5,341

5,862

6,296

Other vehicles

4,743

6,403

7,052

59,467

69,784

75,479

Total Trust Whistleblower system Number of reports

245

257

Reporting ratio11

1.17

1.07

0.20

0.11

Anonymous reports (%)

1. N umber of permanent employees who left Falck voluntarily or involuntarily as a percentage of the average number during the year. 2. Number of lost time injuries per million hours worked. 3. A fatality is the death of any person (employee, patient, subcontractor, third party) occuring in connection with Falck's performance of its services. In 2020, 6 out of 11 people died after contracting COVID-19. 4. Managers are defined as employees with employee responsibility. 5. According to section 99b of the Danish Financial Statements Act, 40% of board members must be of the underrepresented gender. Two out of six members is considered to meet the 40% requirement. 6. Ambulances and patient transport vehicles. 7. Trucks, vans and support vehicles. 8. Small vans and company cars. 9. 75% diesel, 25% petrol (estimate). 10. Diesel. 11. Number of reports per 100 employees.

Falck Sustainability Report 2020

Health & well-being

As a provider of emergency response and healthcare services, saving lives and promoting health and well-being is at the heart of our business and our business model.

Why this is important to society

Sufficient and high-quality health and emergency care is vital for societies not only to preserve and promote the population’s health and quality of life, but also to ensure optimal use of healthcare resources.

Why this is important to Falck

Our core business is to help people in need. We take pride in being there in times of distress and we promote a proactive approach to health.

Our ambition

To provide emergency response and healthcare solutions of high quality in the communities we work in.

Our risks

To provide services of unsatisfactory quality. Medical malpractices. Patient incidents.

Our actions

Implementation of global Business Quality Model. Global ISO certification programme.

Ensure healthy lives and promote well-being for all at all ages

Falck Sustainability Report 2020

Health & well-being

Health and well-being is our business Falck is in the business of helping people in urgent need. We are committed to providing highquality emergency response and healthcare solutions in the communities where we operate. Falck’s Ambulance business forms an important and integral part of the prehospital healthcare systems. We are there when we are needed, and our highly skilled ambulance staff saves lives and cares for patients’ well-being every day. Similarly, in our Healthcare business unit, our healthcare professionals provide psychological and physiological treatments that improve the lives of employees, enabling them to return to work faster and continue a healthy working life. In Assistance and Fire Services, our dedicated staff prevents accidents and loss of life every day. Our Patient Transport Service brings patients safely to and from hospitals and clinics. In Latin America, our doctors visit and treat patients directly in their homes, allowing patients to recover safely and calmly in a familiar environment. In other words, health is at the heart of our business. It is part of our DNA, and our employees are proud to perform life-saving care for people. In our global engagement survey 2020, the global score on the question about “purpose” was 85 out of 100. That is

7%-points higher than our external benchmark and it shows that our employees take an exceptional sense of pride in the work they do. This is also reflected in the fact that Falck employees globally teach first aid courses, support the work of local communities in terms of bystander resuscitation (CPR), teach accident prevention and much more. Falck’s commitment to saving lives and promoting health and well-being is reflected in our business concept, the way we work with quality and patient safety and in our innovation agenda, as described on the following pages.

Falck in 2020 numbers

Ambulance services

Doctor’s home visits

1.5m

Patient transport services

Physiological treatments

2.7m

650,000

Psychological treatments

220,000

Falck Sustainability Report 2020

Health & well-being

Business model Key resources

Value created

People We rely on our more than 27,000 highly skilled employees

Care and safety We save lives, treat and transport patients, and care for the health and well-being of people

Equipment We use high-quality equipment enabling effective diagnostics and resolution Partnerships We partner with local communities to customise our global services to local needs Innovations We utilise new technology and explore new ways of working Brand and reputation We benefit from a strong brand and a solid reputation for being effective, reliable and caring in everything we do

Ambulance Emergency medical services and patient transport services

Healthcare Occupational healthcare services and treatments to private businesses, insurance companies, pension funds and public organisations

Fire Services Fire prevention and firefighting services for municipal and industrial customers

Community Healthcare Doctors on call services to individual subscribers, insurance holders and companies

Assistance Healthcare subscription, patient transportation and roadside assistance services

Customer value We support healthy workplaces, offering prevention, treatment and rehabilitation of their employees and save property and valuables Supporting societies We support national healthcare systems with emergency response and healthcare services A great place to work We offer challenging and purposeful work with opportunities for personal and professional development Shareholder value We deliver value to shareholders

Falck Sustainability Report 2020

Health & well-being

Quality management and patient safety

Business Quality Model

Health, Safety & Environment

One system - GEMS

Business Process Management

Data protection

Falck is committed to taking care of patients. Therefore, patient safety and quality in our business is central to us. To ensure patient safety, we are committed to following strict quality and medical management procedures across our business. We established a global Business Quality Model in 2020 that will support our journey towards operating as one company through global models and secure consistency of quality across the business. Governance, processes, audits and risk management are being standardised. Data is accumulated and processed across the business in one system, GEMS, available to all frontline personnel for direct data entry. The Business Quality Model also supports medical management and the high standards of quality within medical practices, resulting in increased safety for patients. In 2020, a total of 600 continuous improvement initiatives were implemented in the system and acted upon, each indicating a specific area of improvement. 173 internal and external audits were carried out in accordance with ISO 9001, 14001 and 45001. Having the global Business Quality Model implemented

across Falck is a key business driver, creating transparency, encouraging knowledge-sharing and strengthening Falck’s role as a reliable and trustworthy business partner.

Medical Management

Audit Management

Medical Management The Medical Management function was established to ensure high quality treatment and appropriate healthcare service delivery to our customers and patients. It aims to reduce medical malpractice incidents measured via a set of KPIs and controlled by internal audits. The function governs the medical community in Falck where discussion and validation of all medically related issues across business units take place. It also initiates research and development activities, e.g. screening, testing and implementation of new healthcare solutions. In 2020, the Medical Management function has launched Falck’s COVID-19 antibody research project, involving repeated testing of a total of 4,000 employees in Denmark and Sweden. It has also organised a flu vaccination programme for employees and provided continuous clinical decision support to safeguard patients and employees during the COVID-19 pandemic.

Risk Management

Quality Registrations

Business Quality Model

Certifications

Analytics

ISO certifications Falck has a global ISO certification which consists of a multiple sites set-up. This agreement covers ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 certification worldwide. The goal is to have all of Falck included in the multisite ISO certificate. So far, all Ambulance services in Europe have been certified under the global ISO certification programme. Ambulance services under Commu-

nity Healthcare in Colombia are certified locally to ISO 9001. Ambulance services in the US have a local CAAS accreditation. All of Industrial Fire Services are certified under the global ISO certification programme. In 2020, we began the project of having Falck certified in the ISO 27001/27701 standard (information security and GDPR certification). The goal is to become certified in January 2021.

ISO

9001

14001

45001

27001/27701

Falck Sustainability Report 2020

Health & well-being

Innovation Setting the future standard for emergency response Falck has created one of the world’s most sophisticated emergency medical services in cooperation with our customers in Denmark. Today, an ambulance is an advanced point of treatment, a clinic on wheels, where doctors and paramedics initiate the first treatment of critically ill and injured patients. It is Falck’s ambition to continue developing ambulance and healthcare services and to set the standard for emergency medical services.

New innovative stretcher Falck’s Ambulance unit in Denmark has redesigned the interior of our ambulances and implemented a new, innovative stretcher which improves patient care and security as well as the crew's working conditions. For example, the stretcher is foldable and can therefore better fit inside an elevator. Also, it is mounted with LED lights and other necessary equipment.

Cargo drones Falck is engaged in a project aiming to develop drones for transporting e.g. blood samples, medicine or defibrillators between hospitals and accident sites or to people living in remote areas. The first healthcare drones were tested in Denmark, flying between Odense University Hospital and the Danish island of Ærø in August 2020. The project was initiated by

Falck together with the University of Southern Denmark, Odense University Hospital and selected technology and drone companies.

Paramedics in manned drones Falck aims to make manned drones an integral part of its fire and emergency medical services by 2025. With a drone, the paramedic can arrive at the scene of an accident and start treatment much faster than an ambulance and can also assess whether an ambulance is needed. In 2020, Falck initiated its first test flights with unmanned drones and is working to establish a partnership with a tech-partner with whom the Group may carry out manned drone flights.

Falck Sustainability Report 2020

People

Falck is a people business and our workforce is our most important asset. We aim to provide all employees with an inspiring, diverse and safe workplace that provides equal opportunities and where everybody can thrive personally and professionally.

Why this is important to society

As part of a global society, companies are obliged to promote and ensure an inclusive workplace with decent working conditions for all their employees.

Why this is important to Falck

We are a people business; our workforce is our key asset. The well-being of our employees is vital for a sustainable and profitable business.

Our ambition

None of our staff should die or be injured at work. Fair pay, decent working conditions and equal treatment for all our employees. An engaged, skilled and mentally and physically fit workforce.

Our risks

Work accidents and sickness. High employee turnover. Unfair compensation. Lack of diversity.

Our actions

Global health and safety focus. Implementation of actions increasing engagement. Continued focus on Falck as a diverse workplace.

Ensure healthy lives and promote well-being for all at all ages

Falck Sustainability Report 2020

People

Increasing engagement while under pressure Employee engagement went up in 2020, despite the pressure on frontline employees due to COVID-19 and significant organisational changes. We want to be a great place to work for professionals within emergency response and healthcare. An engaged workforce is more committed, better performing and delivers a higher level of services. To ensure a continued focus on employee engagement and to measure progress, we conduct an annual, global employee engagement survey. The 2020 survey showed that the overall engagement score (eSat) improved by one point to 72 compared to 2019. The engagement score has increased for the second consecutive year, and we are now 2%-points from the global external benchmark of 74. All but one score improved in the survey. The increase is especially remarkable because it came in a year when COVID-19 challenged Falck’s employees in several ways. Every day, Falck employees respond to emergency situations, transport patients between hospitals and homes, give treatments and guidance, and thereby provide help to people in urgent need, infected as well as non-infected.

Engagement survey 20,310 employees invited to participate 26 questions eSat: 72 (+1) Response rate: 72% (+9%-points) Comments: 33,220 (+34%) 23 scores increased, 1 was flat

Leadership

eSat Score

3 out of 4 would recommend their manager to others. 1 out of 10 respondents would not.

Large variations in the development of engagement. 10 out of 22 countries exceed external benchmark/target (74).

Purpose Score

2 out of 10 indicate that they need more support during times of distress.

Work-life balance

(+2)

89%

96% of all respondents answer neutrally or favourably to their work being meaningful to them.

* Falck’s annual global employee engagement survey is managed by Glint. Glint finds that across all their customers and panels, the specific eSat question (“How happy are you working at Falck?”) is the single most highly predictive question for overall engagement and a leading indicator of attraction, performance and retention.

1 out of 10 indicates that he/she has experienced disrespectful treatment.

89% of all employees indicate that they can balance their work and personal life successfully.

Falck Sustainability Report 2020

COVID-19 has also led to a decrease in activity levels, and in June 2020 Falck announced the redundancies of 450 employees. In the light of the organisational changes and continued pressure on the organisation, the increase in employee engagement in 2020 is even more remarkable. The score on “Purpose” is still exceptionally high and has increased further in 2020 (now +7 above the external benchmark), proving that Falck provides a purpose-driven and meaningful workplace for people who wish to save and improve lives. Throughout 2020, Falck has focused on developing two specific areas measured by the survey: Leadership and change capacity. The focus has paid off and scores for both areas have increased significantly (“will recommend manager” +9, “feedback from manager” +8, “change adaption” +3 and “change communication” +4). The response rate increased significantly (by 9%-points) as did the number of comments which reached more than 33,000 (+34%), including more than 8,000 specific suggestions on how to make Falck an even better place to work. The comments and suggestions give Falck a unique insight and a better opportunity to focus our efforts on the areas which will have the biggest impact. Like last year, the engagement scores show large variations from country to country, from team to team, as engagement to a high degree is related to daily practices, local conditions and direct leadership. The teams that

People

had defined action plans and worked with engagement based on the previous survey saw an increase in their 2020 scores three times higher than the Group average. This confirms the approach of requiring leaders at all levels to work with their teams and prepare action plans addressing local issues. The many specific comments from employees provide valuable insights related to this.

Data quality HR data quality has improved significantly from last year following process optimisation and data clean-up. The Group engagement survey covers 22 of 25 markets and the scores are considered representative for Falck.

Leadership development programme In 2020, Falck continued the roll-out of the “Dare to Care” leadership development programme launched in 2019. The programme is aimed at frontline managers in all Falck entities. It consists of nine learning blocks, covering the mindset and behaviours required of leaders in Falck, personal leadership and self-awareness, and how to lead others through communication, motivation and change management. In 2020, 218 frontline managers in Denmark, Sweden, Norway, Germany and Spain were trained in the first training modules before the COVID-19 pandemic put the programme temporarily on hold. We are monitoring the guidelines from healthcare authorities in all countries to determine when it is safe to continue the roll-out. Meanwhile, we have

created a toolkit on leading remotely, as many leaders suddenly faced the challenge of being forced to lead from a distance.

Employee turnover The employee turnover rate increased slightly to 26.7 in 2020 compared to 25.2 in 2019. The rate shows the number of permanent employees who left Falck voluntarily or involuntarily during 2020 as a percentage of the average number of employees during the year, and it varies largely across Falck’s markets. The number was affected by the divestments and closure of businesses in the US. Also, in some markets, the job as ambulance driver is often taken by medical students who see this as an opportunity to gain experience for a limited period of time, before they continue their studies, thereby pulling the turnover rate up.

Falck Sustainability Report 2020

People

Health and safety Falck is committed to ensuring decent working conditions and a safe and healthy working environment for our employees. Every day, Falck employees put themselves at risk to save the lives of other people. This produces stressful situations and may also influence the mental health of employees if not handled in a professional manner and with empathy. Defusings and debriefings after serious incidents form an integral part of work processes, and we offer professional psychological assistance whenever needed.

Fatalities In 2020, Falck recorded 11 fatalities: Eight Falck employees, two patients and one member of the public. Six died after contracting COVID-19, four died in traffic accidents and one died from a fall inside a patient transport vehicle. This is an increase from last year’s six fatalities with COVID-19 being the main reason. For some of the employees dying while infected with COVID-19, their general health conditions were a contributing factor.

* A Lost Time Injury (LTI) is defined as any injury an employee may suffer while being on duty and the severity of the injury is at a level where the employee cannot work his/her next shift. Sick leave is calculated from the date after the injury.

In 2020, a “Zero Fatality Project” was launched across all business units and entities focused on the top five risk areas:

• Driving • Working on the road • Use of equipment • Haste • Level of training/knowledge Falck is aware of the risks associated with the nature of our business as well as the preventive measures needed to minimise the risk. To us, every life is precious, and every single fatality is a tragic reminder that safety must always come first. Each case in 2020 resulted in reiteration of prevention measures, training and employee awareness of guidelines and recommendations for safe behaviour. The target for work-related fatalities in Falck for 2021 is – and can only be – zero.

Lost Time Injuries Falck recorded 733 Lost Time Injuries* (LTIs) in 2020, resulting in a Lost Time Injury Rate (LTIR) of 17.9. This is an increase of 25% compared to 2019. The increase in LTIR was due to an increased number of LTIs caused by the COVID-19 pandemic, which especially affected frontline staff in Ambulance and Patient Transport Services in several countries. LTIs caused by other factors than COVID-19 decreased compared to 2019. This was partly due to the decrease in activity levels, and partly a result of increased safety awareness among employees following health & safety training and other initiatives during the year.

A global Health & Safety campaign will be launched i 2021. Focus will be on implementing health & safety workstreams across all business entities, specifically addressing the top five risk areas leading to fatalities. As COVID-19 is expected to continue to put pressure on our employees in 2021, both physically and mentally, global health initiatives will be taken to mitigate the risks and provide additional support.

In 2020, a global Health & Safety organisation was established for the purpose of providing effective support across all business entities.

Fatalities in 2020

Fatality causes

Lost Time Injury Rate (Number of lost time injuries per million hours worked)

Use of equipment 9%

Third party 9%

Patient 18%

Driving 36%

Falck employee 73%

A governance structure is set up, KPIs are defined, a toolbox and reporting system is developed and a global H&S community is established for sharing knowledge and aligning activities.

COVID-19 55%

17.9 (14.3)

Falck Sustainability Report 2020

People

Diversity and inclusion Working within different business areas, models and cultures, we know that different skills, ideas and approaches are key to the success of our business. As a result, fostering inclusion and representing the diversity of the communities we serve are both ethical and business priorities.

Equal treatment and unconscious bias

Falck’s global policy for diversity and inclusion was updated in November 2020 to reflect a broader and more global approach:

Respectful treatment

“Falck is committed to a broad definition of diversity, covering both visible and hidden differences, including gender, ethnicity, nationality, physical ability, physical appearance, sexuality, religion, age, civil partnership status, class, education, and mental health. Falck strives for inclusion of all those with visible and hidden differences but also diverse backgrounds and mindsets”. (Falck Global Diversity & Inclusion policy)

Inclusive culture Falck aims to be a welcoming place to work for present and future employees. It is therefore the shared responsibility of all employees regardless of geography or role to foster an inclusive culture where everyone feels valued, free and empowered to speak up without fear of retaliation. We are aware that every individual faces different challenges, particularly individuals in vulnerable or minority groups, and Falck seeks to meet the needs of those groups.

We strive to make decisions based on unbiased considerations. This is particularly relevant in HR processes such as recruitment, promotions, development, compensation and layoffs. However, Falck recognises that we all hold implicit or unconscious biases. We aim to raise awareness of these biases and challenge them amongst each other and thereby aim for equal treatment in leadership decisions and design of processes.

At Falck, all employees should be treated with respect and dignity and be able to work in an environment free from fear, intimidation, intolerance and prejudicial biases. It is the responsibility of all employees at Falck to treat each other with respect and act according to the fundamental rights of the individual. Falck

does not tolerate any form of discrimination based on gender, ethnic origin, race, religion, age, sexual orientation, parental or marital status.

Diverse workforce Falck aims to be an organisation that attracts, develops and promotes a diverse range of talent. At every level of our organisation, we seek to represent the communities we serve. Diversity is emphasised throughout the recruitment and selection process to ensure balanced teams while still hiring the bestsuited candidates.

Gender composition Falck works to ensure a balanced gender composition and increase the share of the underrepresented gender in management positions. Candidate pools for managerial

positions at senior director level and above should always include candidate(s) from the underrepresented gender. The recruitment process requirements are communicated to hiring managers, global HR business partners, recruitment partners and to third parties involved in the recruitment processes.

Governance The Board of Directors of Falck A/S has the overall responsibility for approving the Diversity and Inclusion Policy. HR is responsible for outlining supportive activities, including monitoring of targets. Leaders at all levels in Falck are responsible for upholding the policy at all times, and all Falck employees are responsible for acting in accordance with the policy guidelines. Employee representatives are consulted when this policy is amended.

Age distribution of Falck employees

Tenure with Falck

Gender distribution per Business Unit %

Baby boomer (1946-64)

0-1 years

Ambulance

Assistance

Healthcare

Community Healthcare

Fire Services

Global Functions

16%

Generation X (1965-79)

Generation Z (after 1999)

1-2 years

32%

Generation Y (1980-99)

49% 2%

18%

3-4 years 5-7 years 7+ years

25% 15% 10% 32%

Men

Women

Falck Sustainability Report 2020

People

Zero tolerance of discrimination The on-going debate on harassment, sexism and racism in the workplace (e.g. #Metoo and #BlackLivesMatter) points out important matters and issues in society, at the workplace and in the way we talk and behave towards each other. In this light, Falck has taken action to remind and reinforce our strong stand against discrimination. Specifically, we have asked all leaders to: 1. Set direction Make sure that all employees are familiar with Falck’s zero-tolerance towards discrimination and discuss what to do to comply with it. 2. Surface any issues Create an environment where speaking up is valued and where all employees know where and how they can raise potential issues. 3. Talk about it Facilitate a team-based dialogue to uncover blind spots and break taboos. Use the insights from the engagement survey to talk about things that should be addressed. 4. Take action Raise any concerns through a leader, HR, shop steward and/or report any incidents through Falck Alert.

Respectful treatment

Gender composition

Respectful treatment is a Falck global engagement survey (FGE) score, measuring employees' feelings of dignity and respect. In the 2020 FGE survey, the score on respectful treatment was 76, up 2 points

The purpose is to ensure an equal distribution of men and women on the Falck Board of Directors and the Executive Management team.

from 2019.

FGE score in 2020:

Board of Directors* 2 women and 4 men

(+2)

Ethics/Compliance This is a Falck global engagement survey (FGE) score, measuring employees' ability to report unethical behaviour or practices without fear of retaliation. The 2020 FGE score on Ethics/Compliance was 71, up 3 points from 2019.

Executive Management 4 women and 4 men

FGE score in 2020:

(+3) *) Among BoD members elected at general meetings

Falck’s Code of Conduct

At Falck, we will not tolerate discrimination of any kind, whether based on gender, ethnic origin, race, religion, age, sexual orientation, parental or marital status. As a Falck employee, you should never participate in any kind of harassment. This includes any unwelcome verbal or physical conduct, creating a hostile or offensive working environment for anyone at work.

Falck Sustainability Report 2020

Environment & climate

We wish to mitigate any negative impact our business activities may have on the environment and climate, focusing our efforts on the fuel consumption of our vehicles.

Why this is important to society

Climate change is the result of human emissions of greenhouse gases, which in turn causes extreme weather events, disrupting ecosystems and human livelihoods.

Why this is important to Falck

Action on climate change is both urgent and required by all companies. As saving and improving lives is at the core of Falck’s ambition, we wish to mitigate the adverse impact our activities may have on communities.

Our ambition

To reduce the adverse impact of our activities - first and foremost our CO2 emissions - to a minimum.

Our risks

Strict requirements for emergency vehicles, their equipment, range and reliability in action; but only few viable electric options for large vehicles.

Our actions

Green fleet policy. Shift to electrical vehicles for company cars and patient transport vehicles. Test of biofuel for larger emergency response vehicles (ambulance, fire trucks and roadside assistance).

Take urgent action to combat climate change and its impacts.

Falck Sustainability Report 2020

Environment & climate

Transitioning to a green fleet Falck strives to reduce its environmental and climate impact. We commit to identifying and mitigating risks, promoting sustainable processes and products and increasing energy efficiency with a special focus on our fleet of vehicles. It is our assessment that Falck’s biggest adverse impact derives from the fuel consumption of our vehicles. In 2020, we began preparing for a transition from diesel and petrol-powered vehicles to electric vehicles and adopting the use of biofuels. We realise that our operations also impact the climate and the environment in other ways, e.g. through the energy consumption in buildings, the products manufactured by our suppliers and the business travel of our employees, cf. scope 1-3 guidelines of the Greenhouse Gas Protocol Accounting and Reporting Standard. However, it is our assessment that we can make the biggest impact within scope 1 related to the fuel consumption of our fleet of ambulances, roadside assistance trucks, patient transport vehicles and other passenger cars, which drove an aggregate of more than 150 million kilometres in 2020.

Green Fleet policy In phase 1 of Falck’s transition of its fleet of vehicles, we are implementing a 100% electric company car policy in Denmark. All new passenger cars ordered by the Company after 1 January 2021 must be 100% electric (not hybrid). The transition will take place over the coming years as existing lease contracts expire. In scope are approximately 130 company/ benefit cars, 220 station/support cars and 250 seated patient transport vehicles. These account for 56% of Falck’s total fleet of passenger cars. Implementation will follow in the other European markets. Falck in Sweden commenced a transition of their fleet in 2018 as a signatory to the government initiative “Fossilfritt Sverige”, whereby all vehicles are converted to electric, hybrid, biodiesel or gas-powered vehicles. Phase 2 of the transition encompasses ambulances, non-emergency patient transport vehicles and other vans. The number of electric vans in the market which can form the basis of an ambulance is limited. Once the van is converted and fitted with the necessary equipment, the weight of the vehicle and its power consumption while operating is significant, and the speed and range is too limited for our needs. With current battery technology, an electric ambulance will therefore not be able to meet the requirements for speed and range of our customers.

Battery technology is evolving fast, and Falck follows the development of electrical vans closely for the purpose of switching to electric vehicles as soon as this is feasible without compromising the quality of the ambulance service delivery. Phase 3 covers roadside assistance and firefighting trucks. Electric solutions currently available are limited, and Falck is instead looking at biofuels, hydrogen-power, natural gas or a combination of these to fuel the heavier vehicles in the fleet. In 2020, Falck started testing biofuels in Denmark, following successful tests in Sweden. Q8 is supplying the biodiesel HVO100 used in the tests, and MAN will provide the approval and engine guarantee provided the tests are successful. HVO100 (hydrotreated vegetable oil) is a 100% fossil-free product made from renewable and sustainably sourced fats and oils, including waste and residue from food industries. It has the same or better technical properties as regular diesel and can be used in existing vehicles, where the manufacturer has approved HVO. HVO100 can reduce CO₂ emissions by up to 90%. Its tailpipe CO₂ emissions are considered zero, as the amount of carbon dioxide released upon combustion equals the amount the renewable raw material has absorbed earlier.

Reusing ambulances and equipment Ambulances and their equipment are, to the extent possible, reused. In the US, where ambulances are designed as an aluminium box placed on a vehicle chassis, the box is moved to a new vehicle chassis when the vehicle is worn out. After refurbishment and installation of new equipment in the box, the ambulance is tested and certified as a new ambulance and put into operation. The expiry date of Falck’s vehicles (ambulances, roadside assistance trucks and firefighting trucks) is typically regulated by the contracts in force with our customers, which set a limit on the number of years or kilometers driven. Once Falck’s vehicles reaches the limit, they are sold, renovated if possible, and put to use in other countries. In cooperation with a partner, Falck is also investigating the opportunity of selling used ambulance equipment which, after refurbishment, can be put back into operation in other countries.

Falck Sustainability Report 2020

ISO

14001

Code of Conduct and ISO certifications Environment is one of the 13 areas of Falck’s Code of Conduct, which states that all employees are expected to consider the environmental impact of their actions and the actions of our business partners. We expect our employees and business partners to support a precautionary approach to the environment and take steps to work in a sustainable manner. We encourage our employees to use resources sustainably and create a climate-conscious working environment.

In addition to the Code of Conduct, Falck holds the ISO certification related to environmental sustainability, ISO 14001 (Environmental Management). This applies to the Ambulance and Industrial Fire Services businesses.

Environment & climate

Falck Sustainability Report 2020

Trust

Trust is vital to our license to operate, and it is essential that we conduct business in a way that never breaches the trust of our employees, our partners, our customers and the communities in which we operate.

Why this is important to society

Corruption harms society and results in increased costs, unfair competition and erosion of trust in governments.

Why this is important to Falck

People rely on us to be there every day, and that requires us to be a trusted business partner to the local authorities and communities which we serve. Falck therefore has a zero-tolerance approach towards breaches of the Code of Conduct.

Our ambition

Falck is committed to ensuring trust throughout all operations where business is conducted with integrity and high ethical standards in compliance with applicable laws, regulations and internal policies.

Our risks

Breach of the Code of Conduct. Mistrust in Falck’s whistleblower system. Mistrust in management.

Our actions

Embedding the Code of Conduct in the way we work via training, communication and awareness campaigns.

Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels.

Falck Sustainability Report 2020

Trust

A trusted business partner Falck’s compliance strategy contributes to our ability to build trust and develop a culture of integrity. Compliance at Falck is based on our global Code of Conduct. This sets the minimum standards and ethical principles applicable to all employees and business partners. It serves as a guideline and point of reference for anyone faced with dilemmas, doubts or concerns, and provides everyone with a common understanding of how we conduct business and how it ties into their role. In 2019, Falck developed the foundation for the compliance programme by setting in place the necessary policies, processes and procedures, employee training and awareness campaigns. In 2020, Falck took the next step by consolidating the organisational structure and separating the second and third lines of defence: Global Business Quality Management ensures that the necessary policies are created, reviewed and updated. Training in the Code of Conduct policies will be produced and delivered to employees globally on a recurring basis. Awareness campaigns and other activities will be rolled out in order to ensure

that employees act in accordance with our ethical standards.

team, and managers in core markets were trained in competition compliance.

Global Audit & Compliance manages the whistleblower system, investigates the effectiveness of our ethics and compliance work, provides insight for continuous improvement and follows up on the actions taken.

In 2021, all Falck employees in core markets will be retrained in the Code of Conduct followed by focussed sessions in areas most relevant to the individual job functions. Although analogue solutions are still necessary at times to accommodate the needs of our diverse business, an increasing number of employees will be trained via e-learning.

In this way, Falck ensures the continuity of the awareness, implementation and support efforts while introducing extra assurance.

Falck Code of Conduct Topics 1. Bribery and corruption 2. Facilitation payments 3. Gifts and hospitality 4. Conflict of interest 5. Fraud 6. Competition compliance

Continuous improvement

7. Company assets and data protection

We want to ensure that employees understand why it is important to act with a high level of integrity, and we want to support employees in doing so. We therefore revise our policies under the Code of Conduct on an annual basis and ensure they are clear, relevant, comply with the regulations in the geographies where we operate and easy to understand.

8. Working with business partners

Embedding the Code of Conduct in the way we work requires constant efforts. The global Code of Conduct training programme was launched in 2019, and by the end of that year, 100% of desk workers and 85% of frontliners in Falck’s core markets had completed the training. In 2020, all policies were reviewed, updated and approved by the Executive Management

9. Human rights 10. Occupational health and safety 11. Environment 12. Social investments 13. Falck Alert (whistleblower system)

Falck Sustainability Report 2020

Trust

Using our whistleblower system to focus initiatives Falck’s whistleblower system, Falck Alert, was introduced in late 2018 and has since then been available for all Falck employees, business partners and third parties.

and know they can use it without fear of retaliation. The cases reported via Falck Alert broadly fall within three categories: discrimination, management and working conditions.

Discrimination Falck continuously encourages employees to report concerns about irregularities or improper actions that fail to comply with applicable laws and regulations, the Falck Code of Conduct or internal policies.

15% of the cases reported were related to various types of discrimination. Falck has a zero-tolerance for discrimination, and action was taken without delay in these cases. To increase awareness of Falck’s policies and guidelines, a global campaign on respectful

In 2020, the independence of the system was been strengthened by anchoring the responsibility under Global Audit & Compliance, who reports directly to the Audit Committee and the Board of Directors. In the system, various types of unethical behavior are reported, and these are all investigated and concluded on. In 2020, focus was on formalising the process 300investigations and procedures for conducting leading to different actions varying from 240 verbal instruction to dismissal.

Number of reports received

In 2020, we saw an increase in reports on working conditions, now accounting for 25%. Most are related to COVID-19 and issues appearing as a result of the spread of the virus, increased risk of infection for employees, and changing working conditions. A global campaign was launched in Q4 2020 to emphasise the importance of health and safety in Falck. Out of the 245 cases reported in total, seven led to termination of employment, eight led to warnings or demotion, and 17 led to additional instructions or guidance.

Management 13% of reports were related to various managerial issues, e.g. the leadership style, communication and fair distribution of work. In 2021, a new management training programme will be initiated, spanning from frontline managers to global function management.

Number of reports per 100 employees %

Share of anonymous reports %

3.00 53

257 3.00245 0.2

180

In 2020, we received 245 reports (257 in 2019). 120 55% of the reports in 2020 were anonymous, which is on par with last year 60 (53%) and also on par with medians for the organisations 0 within the NAVEX Global database, which is used by Falck to set the benchmark for risk 2018 2019 and compliance reporting. This is seen as an indication that employees trust the system

Working conditions

treatment has been initiated which include communication, management tools and real-life cases.

0.3

0.85

1.07

XXX

2018

2019

2020

1.17 0.3

0.85

XXX

2018

2019

2020

1.50

0.00 2020

2018

0.00 2019 2020 2018

2018 2019

2020

2019

2020

Falck A/S Sydhavnsgade 18 2450 Copenhagen SV Denmark Tel.: +45 70 33 33 11 www.falck.com www.falck.dk CVR no. 33 59 70 45

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LUNDBECKFONDEN CSR REPORT 2020