CSR Report 2019 by Lundbeckfonden

LUNDBECKFONDEN CSR REPORT 2019

CONTENTS Lundbeck Foundation - CSR report 2019

LUNDBECKFONDEN CSR REPORT 2019

LUNDBECKFONDEN (LUNDBECK FOUNDATION)

OUR BUSINESS MODEL

THE COMMITMENT TO CORPORATE SOCIAL RESPONSIBILITY

LUNDBECKFONDEN CSR REPORT 2019

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CSR POLICIES OF THE LUNDBECK FOUNDATION

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THREE KEY GOALS

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CSR RELATED RISKS • •

LUNDBECKFONDEN CSR REPORT 2019

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THE UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS

UN Global Compact 2019 Communication on Progress report

“ I felt like Sleeping Beauty but there was no prince to rescue me. I would walk around crying on the inside because I could not be there for my husband and children.”

Melanie Baybut South Africa

Melanie is 51 and resides in South Africa’s Western Cape where she lives with her husband and two children. Previously, Melanie was physically so tired that she would get up for work just so that she could come back home and sleep again. The condition greatly affected her personal life leaving her in a near constant state of feeling sad and out of control of her body. About a week after receiving a diagnosis of Chronic Fatigue Syndrome, her house doctor recommended antidepressants and Melanie is now back to a full, active life.

Contents 4

Executive statement

Good business partner

Responsible business conduct

Our business model and sustainability strategy

Health and safety at work

Key performance indicators

Access to brain health

Materials use and waste

Diversity and inclusion

Climate action

REPORT SCOPE AND METHODOLOGY

Lundbeck’s strategy and the UN Global Compact principles set out the framework for our business conduct. We have assessed that Lundbeck directly supports six of the UN Sustainable Development Goals and several of the underlying targets. This report represents Lundbeck’s 11th annual Communication on Progress to the UN Global Compact and our non-financial report on sustainability according to the Danish Financial Statements Act. The report describes Lundbeck’s global activities and progress in 2019 (1 January to 31 December), and contains descriptions of planned activities and targets for 2020. The report has been developed without direct engagement of external stakeholders.

Independent Auditor’s Assurance Report

The scope of the report comprises our corporate headquarters in Denmark and global affiliates. The Health, Safety & Environment (HSE) data only covers our headquarters and larger affiliates with research, development and manufacturing activities. A detailed HSE reporting practice is available at https://lundbeck.com/global/sustainability/ environment/reporting. The key performance indicators for 2019 presented on page 18 and the proportion of the underrepresented gender at the other managerial levels presented on page 10 have been assessed by Deloitte in accordance with the ISAE 3000 standard to obtain limited assurance. The assurance statement is found on page 20. 3

Executive statement The past year has brought many exciting developments of Lundbeck’s sustainability strategy. Our commitment to the UN Global Compact is firm and this year’s communication on progress reflects our increasing level of ambition across the ten principles.

UN Global Compact 2019 Communication on Progress report

I am pleased to express our continued support to the UN Global Compact that Lundbeck became a signatory to in September 2009. We recognise our corporate responsibility to respect human and labour rights, to commit to environmental protection and to work against corrupt behaviour.

We have updated our sustainability strategy following a careful assessment of our current initiatives against external reference points including the Sustainable Development Goals. As a result, we are taking new initiatives to pursue our targets for 2020 and long-term aspirations for 2030. We are determined to integrate sustainability as a strategic imperative. This is expressed in the acceleration of our climate strategy. We have joined the “Business Ambition for 1.5°C” initiative of leading companies who are aligning their business actions with the most ambitious aim of the Paris Agreement. We are acting fast to transition our electricity supply to renewable sources and will engage with our largest suppliers to ensure we share climate ambitions. Another example is our decision to establish an Access to Brain Health Strategy supporting our four aspirations for 2030 referencing the World Health Organization’s right to health principles. We are acting through partnerships to enable change and making the needed improvements.

“ We are determined to integrate sustainability as a strategic imperative.” Not everything has gone our way in 2019. We did not meet three of our nine sustainability targets for 2019. While we are relieved that this did not lead to any serious consequences, our ambition is to keep improving. Our target for solvent recovery is lower than previous years, since we have extended the target to include all chemical production sites. I hope you will enjoy reading more about these and other initiatives in the report.

Deborah Dunsire President and CEO of Lundbeck

Our business model and sustainability strategy According to the World Health Organization more than 700 million people live with psychiatric and neurological disorders globally.

Psychiatric and neurological disorders are serious and life-threatening diseases that affect the quality of life of the patients as well as of their relatives. As these diseases also involve major socio-economic costs, it is imperative for the general society that new and innovative pharmaceuticals are developed. Over the past 50 years, new pharmaceuticals have revolutionised the treatment options, but a large unmet need for new and innovative therapeutics remains. Despite the challenges associated with understanding the biology and science of brain science, Lundbeck remains committed to deliver the innovation that patients need. We work

tirelessly to advance neuroscience, develop new and innovative treatments and support patient communities. Everything we do serve our overall purpose of restoring brain health and transforming the lives of the millions of people living with brain diseases. Our focus on R&D is the most important pillar in Lundbeck’s ambition to improve treatment of brain diseases. We are specialists in our area and have approx. 900 employees working within R&D. We cooperate closely with strategic partners all over the world, ensuring the best possible foundation for innovation and the development of new treatment solutions.

We have production facilities in Denmark, France and Italy and our research centres are based in Denmark and the United States. We have employees in more than 50 countries and our products for the treatment of brain diseases are registered in more than 100 countries. We employ approx. 5,500 people worldwide. You can read more about our business activities in Lundbeck’s Annual Report 2019 and on www.lundbeck.com.

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

“ The sustainability strategy aims to ensure that our business activities are conducted in a way that supports the UN Global Compact Principles and the SDGs and mitigate significant risks and adverse impacts.”

UN Global Compact 2019 Communication on Progress report

Sustainability strategy

Executive Management has reviewed Lundbeck’s sustainability strategy, aspirations and short-term actions. The review was based on a thorough analysis of Lundbeck’s impact on the Sustainable Development Goals (SDGs). Our sustainability actions are integrated into Lundbeck’s strategy that has significant impact on six of the 17 Goals. In addition, we are seeking partnerships with others to enable change and maximize impact across our sustainability efforts. Goal 3 Good Health and Well-being is closely linked to our corporate purpose and dedication to restore brain health, so every person can be their best. Goal 13 Climate Action will drive our efforts to prepare for a zero emissions future. We will use our influence and act to promote Goals 5, 8, 12 and 16. The sustainability strategy aims to ensure that our business activities are conducted in a way that supports the UN Global Compact Principles and the SDGs and mitigate significant risks and adverse impacts. Our Code of Conduct compliance structure is pivotal in ensuring that relevant risks are identified, that procedures to manage them are established, understood and being followed,

and that monitoring is used to ensure the needed improvements are made. Similarly, our HSE policy and management system set clear priorities and deliver continuous improvements within Health, Safety & Environment. Collectively, these governance structures aim to: • Maintain ethical conduct, free from conflict of interests and corruption in any form • Uphold legitimate and transparent interactions with healthcare professionals without any inducement to prescribe our medicine • Respect human and labour rights, minimise environmental impact and prevent corruption in our interactions with suppliers and third parties • Provide decent, safe and healthy working conditions to our employees globally • Optimise our use of resources and minimise adverse impacts on the environment 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. The result of the evaluation and the new targets are shown in the following table.

SDG Good health and well-being Read more on page 8-9

Sustainability targets 2019

Sustainability targets 2020

Conduct actions to support SDG 3 and engage our global affiliates in suicide prevention at the World Mental Health Day ( )

Engage all Lundbeck offices in local World Mental Health Day activities

Gender equality Read more on page 10

Decent work and economic growth Read more on page 11-13

Establish a product donation partnership Strive to maintain an overall equal gender split for people managers globally

Implement the updated global due diligence and monitoring process for suppliers and third parties in scope ( )

Reduce lost time accident frequency ≤ 5

Lost time accident frequency ≤ 5 ( ) Occupational diseases < 2 ( ) Responsible consumption and production Read more on page 14

Recycling of 75% of the 10 most used solvents ( )

Recycle 55% of the solvents used in chemical production Zero environmental incidents

Climate action Read more on page 15

Peace, justice and strong institutions Read more on page 17

Achieved

Reduce CO2 emission by 3% in 2019 compared to 2018 ( )

Reduce CO2 emission by 4% in 2020 compared to 2019

Zero environmental incidents with an impact on the environment ( )

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

Implement the updated Code of Conduct and provide training for all employees globally ( )

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

Update global procedures for responsible and transparent interactions with Healthcare Professionals and patients ( )

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

Not achieved

An overview of key indicators for Lundbeck’s sustainability performance is provided on page 18. 7

Access to brain health We are dedicated to improving access to brain health in accordance with the World Health Organization’s right to health principles. We advance our research to make innovative medicines available and address barriers to accessibility. We act to increase acceptability of brain diseases and safeguard the quality of our medicines.

UN Global Compact 2019 Communication on Progress report

Building on more than 70 years’ experience in the research, development and manufacture of medicines for treatment of brain diseases, Lundbeck is consolidating its corporate actions into an Access to Brain Health Strategy. This reflects WHO’s right to health principles: Availability, Accessibility, Acceptability and Good Quality.

We have defined our aspirations within each of these principles. We will build on our current actions with new initiatives over the coming years: • 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. Lundbeck has ongoing actions within the four principles and these will be supplemented with new initiatives in the coming years. Some of these will be taken in partnerships to enable and accelerate the needed improvements.

Suicide prevention

The Sustainable Development Goal 3, Good Health and Well-being has defined a target for 2030 to “reduce by one third premature mortality from non-communicable diseases through prevention and treatment and promote mental health and well-being”. One of the indicators for Goal 3 monitor suicide mortality rates. We share the societal concern that suicide is the second leading cause of death among young adults between the ages of 15 and 29, and that mental illness too often leads to suicide. Our actions in 2019 underpin our aspiration to contribute more within suicide prevention. To drive Lundbeck’s global engagement and educational efforts on suicide prevention, we published ‘Mental Health and Suicide Prevention – Lundbeck’s Recommendations and Commitments’ in June 2019. The booklet was drafted in consultation with experts in the field and it aims to raise awareness and support education in suicide prevention. We are using the booklet to promote the dialogue with stakeholders on this devastating societal issue and encourage readers to access it on our Corporate website.

Partnerships for mental health

As part of our commitment and involvement in mental health, Lundbeck have established partnerships with advocacy

SDG targets

3.4 | 3.9 | 3.b | 3.c

Aspiration 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 groups, including the International Association for Suicide Prevention and the World Federation for Mental Health, GAMIAN-Europe and EUFAMI. Our partnership with the International Association for Early Interventions on Mental Health aims to promote the #ChatSafe Guidelines for online communication about suicide prevention.

World Mental Health Day 2019

Lundbeck was proud to partner with the World Federation for Mental Health to support the World Mental Health Day (WMHD) once again. On 10 October 2019, everyone working to promote the mental health agenda focused their attention on suicide prevention. In 58 countries, Lundbeck’s employees and business partners engaged in national WMHD activities. Some were directed at policymakers and healthcare professionals, while other activities targeted advocacy groups, media and the public. The activities put the iconic green WMHD ribbon on show in educational workshops, meetings, videos and social media campaigns. In 2020, we will be partnering with World Federation for Mental Health to support the World Mental

Health Day. We aim to engage all Lundbeck offices in local WMHD activities on 10 October 2020 that has the common theme “Mental Health for All – Greater Investments – Greater Access”.

Establishing donation partnership

Providing donations and grants is one way of confirming our responsibility towards society and helping people living with brain disease to access health provision. We have established a process for assessing requests for donations or grants that are designed to ensure we can provide these types of contributions without obtaining any benefits in return. Contributions we consider include financial or in-kind donations, medical educational grants, compounds for research purposes or Lundbeck medicinal products for specific needs. During 2020, we plan to finalise a partnership to manage product donations in low income countries that can be used when there is an expressed need that cannot be fulfilled otherwise.

• 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

2020 targets

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

Diversity and inclusion We are a diverse company determined to build an inclusive high-performance culture that allows all employees to enrich their professional skills and career without discrimination. We believe this is the best way to ensure creativity, innovation, progress and mutual enrichment.

UN Global Compact 2019 Communication on Progress report

SDG targets

The variety in our employees’ ideas, perspectives and experiences is a valued and necessary part of Lundbeck’s competitive advantage. Diversity and inclusion are contained in our Code of Conduct along with a commitment to avoid discrimination. We are committed to creating an inclusive workplace for diverse employees across multiple parameters, including gender. We continuously offer equal opportunities for men and women across the organization in accordance with our employee policies and guidelines. In 2019, our Board of Directors approved our revised corporate policy on diversity and inclusion.

awareness campaign. The findings and recommendations will continuously be discussed with our Executive Vice President of People and Communication to ensure support from Executive Management.

Implementing the revised policy as key element in our efforts to support Sustainable Development Goal 5, Gender Equality.

In accordance with Danish legislation, we have for some years been measuring the gender distribution in managerial positions. The measurement includes all managers globally who have people management responsibilities. Until now, the aim has been to ensure that the proportion of the underrepresented gender is at least 40% globally. The proportion of female managers was 44% in 2019. One of the tasks for the Diversity and Inclusion Forum will be to explore how this distribution can become more equal. We have established a target to maintain an overall equal gender split for people managers globally to drive the development.

Making revised policy come alive

The objective of the revised policy is to enhance focus on diversity and inclusion by providing a foundation for discussions on these topics among employees and management in the over 50 countries where we operate. To ensure this happens in an engaging way, we are establishing a Diversity and Inclusion Forum with approx. 25 representatives from all regions and our headquarters. During 2020, the members of the forum will gather knowledge about opportunities and challenges within diversity and inclusion. They will conduct interviews to identify ideas and develop local and global initiatives to ensure implementation of the policy. The efforts will be supported by an internal communication and

The Diversity and Inclusion Policy explicitly commits to building an inclusive culture in Lundbeck for people living with brain diseases. We are confident that this perspective will helps us deliver on our corporate strategy.

Maintaining gender equality

According to our target regarding diversity at Board of Directors level, at least one of the members elected by the shareholders should be of the underrepresented gender. In 2019, we had 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.

5.1 | 5.5

Aspiration for 2030 • Recognised 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

2020 targets

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

Good business partner We engage suppliers and third parties when providing innovative treatments to patients. To ensure that these collaborations add value to local economies with the most positive outcomes, we apply systematic and risk-based procedures to respect human and labour rights, ensure environmental protection and prevent corruption.

For decades, we have used quality processes to ensure the regulatory compliance of our suppliers and third parties within research, development and manufacturing. In 2005, we extended our assessment of contract manufacturers to include human and labour rights, health and safety and environmental obligations. Since establishing our Code of Conduct in 2010, these procedures have evolved into a pivotal element within our compliance and sustainability framework.

Enhanced process implemented

By the end of 2018, we consolidated years of experience and ideas for enhancements into a simplified global due diligence and monitoring procedure. In 2019, we implemented this procedure through a series of instructor led training sessions for global affiliates and headquarters. Today, we have systematic due diligence and monitoring procedures for business collaborations, aimed at identifying and mitigating specific risks: • Conflicts of interest • Financial crime (including bribery, tax evasion and violations of trade sanctions) • Promotional misconduct • Human and labour rights violations • Significant environmental impact These procedures are particularly important for collaborations involving chemical manufacturing, customs clearance, price negotiations, obtaining product marketing authorizations, organizing promotional or educational events and selling products. Besides protecting Lundbeck, the procedures are essential to fulfilling our commitment to UN

Global Compact Principles and OECD Guidelines on Multinational Enterprises. They also support Sustainable Development Goal 8, Decent Work and Economic Growth.

Maintaining global obligations

Across our global organization, our senior management follows consistent procedures to identity and mitigate specified risks before any contractual commitments are made. The operational process is supported by agreement templates containing relevant requirements and access to guidelines, training and expert advice.

SDG targets

Our experts use professional databases and public sources to perform an objective and documented assessment of relevant risks and topics. Before engaging in sensitive collaborations such as chemical manufacturing, we conduct onsite visits and compliance audits.

Partnering to minimize CO2 emissions Continuous dialogue with our suppliers and third parties is essential to maintaining trust and good collaboration. In the coming years, we will expand on this dialogue to include climate change with the suppliers and third parties who have the highest CO2 emission. We will be using our CO2 emission inventory to prioritise and define our approach. It is our ambition to obtain ‘Science Based Targets initiative (SBTi)’ approval of our new climate target in 2020. This means that, within a defined timeframe, we need to reach an agreement on addressing climate change with the suppliers and third parties who collectively represent two-thirds of the CO2 emissions from our value chain. The planning of this greatly challenging task has started.

8.5 | 8.8

Aspiration for 2030

• Assessment of key business partners strengthens the collaboration, promotes business ethics and conditions respecting human rights and labour rights • Commitment to minimise key business partners’ CO2 emissions reflected in relevant agreements

Health and safety at work We offer our employees a sound physical and mental work environment. Staying healthy and safe at work is a fundamental right. We take systematic and preventive actions to continuously improve working conditions, with regular assessments, collaboration and expert advice.

Lundbeck employs approx. 5,500 people worldwide and we promise every one of them healthy and safe working conditions. Managers and employees collaborate to create the best working conditions, with support from internal specialists. Lundbeck’s Health, Safety & Environment (HSE) Policy sets out a common framework for ensuring sound physical and mental work conditions globally.

UN Global Compact 2019 Communication on Progress report

These actions underpin our commitment to the UN Global Compact and show our contribution to Sustainable Development Goal 8, Decent Work and Economic Growth.

Identifying risks and hazards

We systematically assess the hazards that could arise in a working situation and perform risk assessments before making any physical or organizational changes. We also provide training and advice to managers and employees to help them enhance their physical and mental work environment. We include indicators for the physical and mental work environment in our anonymous annual employee satisfaction survey. We take corrective and preventive actions through workshop discussions and follow-up meetings. Our dedication to brain health extends to our own working environment. We prioritize a healthy work-life balance and encourage continuous dialogue between employees and managers to prevent work-related stress. The physical work environment varies with job functions. While car safety is important in the sales organization, industrial

hygiene programmes are vital to eliminate or minimize the risk of injury or illness in our laboratories and manufacturing.

From OHSAS 18001 to ISO 45001

We are certified to the OHSAS 18001 Health and Safety Management System at our corporate headquarter and within our larger research, development and manufacturing facilities. Through this we set defined annual targets and deliver prioritized and continuous improvements. Through systematic root cause analysis, we minimize work-related accidents, and conduct internal audits to monitor system performance and identify improvement areas. Senior management reviews system performance annually. In 2020, we will be ready to replace the current OHSAS 18001 certification with the new ISO 45001 standard.

Commitment to improve

Our systematic approach to risk assessment has kept the number of work-related diseases very low in recent years. Two wrist attritions caused by manual handling were the only recognized occupational diseases in 2019. Several preventive efforts have reduced the overall accident frequency to 6.2 work-related accidents per 1,000,000 working hours in 2019 from 7.5 in 2018. Chemical Production in Denmark performed an analysis of operating procedures, conducted surveys and workshops to assess the safety culture. Prioritized action plans with enhanced communica-

tion and follow-up led to 27% fewer accidents in 2019. Our pharmaceutical production in France improved the safety culture and reduced their accident rate slightly by conducting systematic audits and training of managers in safety issues. We experienced an increase in work-related accidents with low severity at our corporate headquarters in Denmark. This explains why we did not reach our target of having maximum 5 work-related accidents per 1,000,000 working hours. We are determined to achieve this target in 2020 and avoid occupational diseases by maintaining our systematic and preventive efforts.

Award-winning initiative

Heavy lifting and inappropriate working posture are potential risks in the Solid Bulk Production. To reduce the risks and limit the number of lifts for the operator, the local HSE group and management initiated a mapping of work processes, re-arranged vacuum lifts and automated the washing processes. Adjusting the working postures and retraining operators in lifting techniques contributed to significantly improving the working situation for the operators. Solid Bulk Production was awarded the best Lundbeck Health & Safety Initiative 2019 for taking this initiative.

Substituting harmful substances

The first HSE risk assessments are performed when our researchers have identified a new

molecule that potentially could be developed into a medical treatment. The further development of the chemical synthesis and hazard analysis is a collaboration between our chemists and HSE specialists. Wherever possible undesirable substances, for instance toxic or carcinogenic substances, are substituted with less dangerous alternatives. We have since 2014 been modifying work processes in chemical production in Denmark and Italy to meet the requirements for Strictly Controlled Conditions (SCC) with closed or contained processes. These conditions provide our employees with an even higher health and safety standard and protects the surrounding environment. The SCC-status provides many other advantages, including greater flexibility due to safe handling of more potent substances, faster registration process and higher predictability of substance supply.

Engaging health initiatives

At our headquarters in Denmark, we assessed the effect of the current health initiatives in 2019. This showed an opportunity for increasing awareness of existing initiatives and information about preventing and handling illness. We initiated a seasonal awareness campaign that resulted in broader engagement, higher participation rates and more social interaction across functions. The number of participants in the Danish initiatives DHL Run and Bike to Work increased 20% and 36% compared to last year. The awareness campaign will continue in 2020.

SDG targets

8.5 | 8.8

Aspiration for 2030 • Recognised as a workplace that fosters physical and mental well-being

• Showing leadership to promote mental health with preventive actions at our workplaces globally

2020 targets

• Reduce lost time accident frequency ≤ 5

Materials use and waste As a research-based company we develop most of our manufacturing processes. This offers opportunities to minimise materials use, replace unwanted substances and increase recycling. We rely on suppliers to deliver materials and handle waste. Environmental impacts from the end-use of our medicines are assessed and managed.

Lundbeck’s research, development and manufacturing activities are mostly based on chemical synthesis. Consequently, we use considerable amounts of organic solvents, energy and generate waste and emissions to the air. We manage our environmental impacts through an integrated approach to Health, Safety & Environment (HSE). The overall priorities are defined annually in our HSE Strategy and transformed into actions and measurable targets that are managed through our HSE management system.

Enhancing production processes

UN Global Compact 2019 Communication on Progress report

We partner with universities to develop and introduce new working methods, for instance continuous processing. Here the product is produced in continuous flow in significantly smaller equipment than used in traditional batch processes where large reactors are filled, emptied and cleaned between each process step. This offers great benefits in raw material and energy usage.

Over the years, our chemical production in Denmark has refined their skills and technical capabilities to increase recycling of organic solvents. Every year this eliminates the need for thousands of tonnes of virgin materials and saves resources for production, transportation and waste management. In 2019, we managed to recover 67% of the most used solvents. This eliminated the need to purchase approx. 4,400 tons new solvents, which is equivalent to 145 road tankers. However, this is a drop in solvent recovery compared to 76% in 2018, and we did not fulfil the target of recycling 75% of the 10 most used solvents. The explanation for the reduction is that the possibilities for recycling vary with the production processes. At our production site in Italy, 55% of the used solvent was recycled in 2019. This was done by an external contractor. We remain dedicated to exploring solvent recovery possibilities and will develop best practices across our two chemical production sites. Our target for 2020 is to recover 55% of the solvents used in chemical production across our

sites in Denmark and Italy, which explains why the target recovery percentage is lower than previous years.

Circular economy principles applied

By combining continuous production with recycling principles, we can create a circular economy, integrating different manufacturing processes and reusing materials across different processes. Our new Sustainability Strategy contains a circular economy aspiration to move away from the traditional linear ‘take-make-dispose’ manufacturing model to a more regenerative model. This is in line with the Sustainable Development Goal 12, Responsible Consumption and Production. Our pharmaceutical production in Denmark advanced their actions to reduce waste, increase reuse and recycling. During 2019, cyclic planning was introduced, which is a planning setup that ensures a more stable and predictable execution of production. This reduces the use of materials and the amount of waste generated in production. In our liquid product production, we reduced packaging waste by 83% compared to 2018. This is equivalent to 1.4 million pieces less waste in the form of cartons, labels or leaflets. In 2020, preparations will be made for implementing the new planning concept for our solid products where the reduction potential is even greater.

SDG targets

12.1 | 12.4 | 12.5 12.6 | 12.8 Aspiration for 2030

• Establish manufacturing processes based on circular economy principles to limit materials use, waste and CO2 emissions

Our technical staff at the chemical production in Padova (Italy) improved the cooling system water circuit. This brought the consumption of unfiltered water 49% down from approx. 176,000 m3 in 2018 to 90,000 m3 in 2019.

• Expand application of circular economy principles to key partners

In 2019, Lundbeck recycled 59% of the non-dangerous waste. By analysing waste streams and training employees in waste separation, we continuously identify new possibilities for increased recycling. At our headquarters’ packaging facility, we increased the sorting of waste and sent 27 tons of paper for recycling compared to 9 tons in 2018.

2020 targets

• Recycle 55% of the solvents used in chemical production • Zero environmental incidents

Climate action Saving energy and reducing CO2 emissions are longstanding and strategic priorities for Lundbeck. Today, we use 35% less energy and emit 68% less CO2 than in 2006. We are committed to expand and align our actions with the Science Based Target initiative (SBTi) scenarios limiting global temperature increase to 1.5°C.

SDG targets Lundbeck was one of the first Danish companies to have its CO2 reduction target approved by the independent Science Based Target initiative (SBTi). We have been acknowledged several times as a leading company by the Carbon Disclosure Project (CDP) who rates organisation’s disclosure and management of climate change risk. For more than a decade, we have reported reductions in both energy consumption and CO2 emissions. Our current target commits us to reduce CO2 emissions by 70% in 2035 compared to 2016. We still have a long way to go and taking bold actions in the next decade is critical. Therefore in 2019, we decided to accelerate our actions and join the global movement “Business Ambition for 1.5°C” of leading companies aligning their business actions with the most ambitious aim of the Paris Agreement. This commitment clear expresses our support to Sustainable Development Goal 13, Climate Action. To make this a reality, we will increase our pace of change and expand the scope of action to include CO2 emissions from our value chain. We have achieved excellent results within our direct emissions (Scope 1) and purchase of electricity and heat (Scope 2). However, more than 90% of our total CO2 emissions are derived from our value chain (Scope 3). This includes where the goods and services we need are produced, the distribution of our products to patients, when our employees travel, and how our waste is treated.

Increased ambition and scope

We are committed to obtain the SBTi approval of a climate target to reduce our CO2 emissions

in Scope 1, 2 and 3. We will use our experience and the increasing attention to climate change to motivate actions in areas that lie outside our direct control. In 2019, we continued our focus on saving energy. For instance, the cooling facility serving our headquarters, research and manufacturing in Denmark was refurbished with six new degassing units. This saves 300 MWh annually equivalent to the energy consumption of approx. 12 households. Other initiatives have delivered energy savings by simplifying processes and improving controls. In total, we reduced the energy consumption by 1% and our CO2 emissions by 4% compared to 2018 (Scope 1 and Scope 2).

External recognition

Our continued efforts to reduce energy consumption and CO2 emissions have been acknowledged by the leading global environmental benchmark Carbon Disclosure Project (CDP). They rate companies’ ability to disclose and manage their greenhouse gas emissions. In 2019, Lundbeck was included in CDP’s Climate A-list, the highest possible rating awarded to only the top 2% percent of the more than 8,400 companies surveyed by CDP. Further, in 2019 Lundbeck was invited to be part of the Danish government’s Climate Panel for Life Science and Biotech to help provide industry-wide climate recommendations. These and recommendations from other sectors will be presented in 2020 and form the basis for the Danish government’s climate action plan, which aims for 70 percent greenhouse gas reduction by 2030.

13.2

Aspiration for 2030 • Deliver on the “Business Ambition for 1.5°C” pledge

• Transition electricity supply to renewable sources • Manage two-thirds of value chain CO2 emissions equally effective as internal CO2 emissions

2020 targets

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

Responsible business conduct We pursue our business purpose guided by applicable regulatory requirements, the principles in our Code of Conduct and the aspirations in our Sustainability Strategy. Our sense of responsibility is underpinned by five core beliefs: Patient-driven, Courageous, Ambitious, Passionate and Responsible.

Lundbeck’s ethical standards are defined by Executive Management with support from a dedicated Compliance Committee representing key business functions. The committee continuously evaluates our ethical performance and initiates needed improvements. Our Chief Compliance Officer provides regular updates on ethics and compliance matters to the Board of Directors’ Audit Committee. We have anchored our corporate support to Sustainable Development Goal 16, Peace, Justice and Strong Institutions at the highest possible level.

UN Global Compact 2019 Communication on Progress report

Updated Code of Conduct implemented

Our Code of Conduct is the backbone of our ethics and compliance culture. 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. First established in 2010, we update our Code of Conduct regularly. The most recent update in 2019 reflected changes to internal and external requirements, including the International Federation of Pharmaceutical Manufactures and Associations (IFPMA) Code of Practice 2019, enhancing regulation in how pharmaceutical companies interact with healthcare professionals. Other updates of the Code of Conduct aim to provide additional clarity for instance regarding the use of Social Media, handling of personal data and promotional activities. We reflect such changes in our operational procedures to encourage good practice.

Our annual compliance and ethics training conducted in 2019 aimed at establishing a good understanding of how risks are identified and managed locally. All employees were asked to complete a risk survey with three questions. The provided input was used to prepare local workshop discussions facilitated with simple guides and visual aids. The risk results and key reflections from the discussions were provided to the compliance function in our headquarters. In addition to the local face-to-face discussions, the annual Code of Conduct eLearning was taken, and a concluding test was passed by all employees globally.

Transparent collaborations

To develop and deliver innovative treatment of brain disease, we work with a range of stakeholders. These include healthcare professionals, patients and their respective organizations. We collaborate on research, clinical development, exchange of scientific information, marketing and sales activities. These interactions are well-regulated by the national laws and industry association regulations that we integrate into our working processes, training and guidance. We are committed to transparency and our disclosed information follows the current laws or regulations from the industry associations we have joined, such as the European Federation of Pharmaceutical Industries and Associations (EFPIA). As a result, anyone can access information about Lundbeck’s interactions with healthcare professionals and

SDG targets

16.2 | 16.5 | 16.b patients, including exchanges of scientific information, support to patient advocacy groups, educational and promotional activities on www.lundbeck.com/global/sustainability.

sales organisation. We have focused on implementing the strengthened local compliance programme and conducted extensive training.

We believe that increased transparency will help promote the acceptance of these professional relationships and their value to the enhance patient care. In 2019, we conducted series of training sessions for key people in all sales affiliates to ensure a successful implementation of our global procedure for interactions with Healthcare Professionals and patients, which has been enhanced.

Our Compliance Hotline has been in place since 2014 allowing both employees and external parties to report legal and other serious concerns in a confidential manner. We regularly communicate about the importance of having an open dialogue on ethics and compliance. This includes awareness campaigns on the Compliance Hotline. In 2019, we launched our Compliance Hotline App as a standard installation on company smart phones to ease the reporting of concerns. Lundbeck Compliance Hotline App is available on Apple’s App Store and Google Play.

Maintaining the right understanding

Lundbeck’s comprehensive monitoring programme is built on systematic collection of information and communication with our global business units, focused discussions, audits and investigation of reported concerns in our Compliance Hotline. Skilled auditors from our assurance functions conducted 132 internal audits that covered research, development, manufacturing, health, safety and environment, marketing, sales, IT and finance in 2019. They also conducted 182 audits at suppliers and partners. Audits are documented in accordance with Lundbeck’s procedures and appropriate actions are taken. The reduced number of internal audits compared to 2018, is mainly driven by fewer audits within our US

In 2019, we have received 28 reports and completed 21 of the initiated investigations. Seven of these investigations have been substantiated due to breaches of Lundbeck’s Code of Conduct or related internal procedures. Corrective and preventive measures have been taken as appropriate. Seven investigations are still ongoing and will be concluded in early 2020. All reports received are handled in accordance with our investigation procedure, applicable data privacy requirements and Lundbeck’s non-retaliation policy, which does not allow discrimination against anyone reporting a concern in good faith.

Aspiration for 2030 • Demonstrate that the Code of Conduct Compliance Structure and organisation works i.e. sustains an ethical culture and prevent any form of corruption

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

2020 targets

• Annual Code of Conduct training completed by all employees at work globally • Work to increase proportion of healthcare professionals supporting disclosure of collaborations compared to the previous reporting year

Key performance indicators We consider the data presented here key indicators for Lundbeck’s sustainability performance in 2017-2019. Please visit www.lundbeck.com/global/sustainability to obtain more detailed information and data from the current and previous years.

UN Global Compact 2019 Communication on Progress report

INDICATOR

2017

2018

2019

Finished goods production

Pieces

2,354,627,717

2,258,194,100 2,252,128,380

Chemical production

Tonne

494

339

406

Raw materials, organic solvents

Tonne

3,808

3,758

4,127

Water consumption

349,943

374,406

285,671

Energy consumption

MWh

93,413

94,312

93,137

CO2 emission

Tonne

17,244

15,973

15,254

Waste

Tonne

13,364

12,525

14,074

Waste water

320,183

344,731

252,219

Incidents with an impact on the environment

Number

Work-related accidents with absence

Number

Frequency of lost time accidents

Frequency

5.9

7.5

6.2

Work-related diseases

Number

Internal audits conducted 1

Number

216

226

132

External audits conducted 2

Number

171

157

182

Compliance Hotline reports 3

Number

Employees globally (yearly average) 4

Number

4,980

5,060

5,475

¹ Sum of conducted and reported audits performed at Lundbeck headquarter functions and global affiliates (see page 17). ² Sum of conducted and reported audits performed at Lundbeck’s suppliers and partners (see page 17). ³ Reported concerns that involve legal, serious financial, reputational risks as specified at https://www.lundbeck.com/global/compliance-hotline ⁴ Included in the review of the Annual Report.

Deloitte Statsautoriseret Revisionspartnerselskab CVR-no. 33 96 35 56 Weidekampsgade 6 P.O. Box 1600 0900 Copenhagen C Denmark Phone +45 36 10 20 30 Fax +45 36 10 20 40 www.deloitte.dk

Independent Auditor’s Assurance Report To the Management and stakeholders of H. Lundbeck A/S We have assessed H. Lundbeck’s UN Global Compact 2019 Communication on Progress Report (“the COP-report”) and the Health, Safety and Environment Data Overview – H. Lundbeck A/S – 2019 (“the HS&E-report”) to provide limited assurance on selected data. Our assessment was performed in order to assess whether:  the sustainability key performance indicators on page 18 in the COP-report,  the proportion of the underrepresented gender at other managerial levels on page 10 in the COPreport, and  the data presented in the HS&E-report, have been stated in accordance with the criteria defined by the reporting principles. The above-mentioned reports cover Lundbeck’s international activities from 1 January to 31 December 2019. We express a conclusion providing limited assurance. Management’s responsibility The Management of Lundbeck is responsible for collecting, analysing, aggregating and presenting the information in the COP-report and the HS&E-report, ensuring that data is free from material misstatement, whether due to fraud or error. Lundbeck’s reporting practice contains Management’s defined reporting scope for each data type. Several reporting principles are described in the COP-Report, while others are described on https://lundbeck.com/global/sustainability/environment/reporting. Auditor’s responsibility Our responsibility is to express a limited assurance conclusion on the sustainability key performance indicators on page 17 in the COP-report, the proportion of the underrepresented gender at the other managerial levels on page 8 in the COP-report and the data presented in the HS&E-report. We have conducted our work in accordance with ISAE 3000, Assurance Engagements Other than Audits or Reviews of Historical Financial Information, and additional requirements under Danish audit regulation to obtain limited assurance about whether the selected data is free from material misstatement. Deloitte Statsautoriseret Revisionspartnerselskab is subject to International Standard on Quality Control (ISQC) 1 and, accordingly, applies a comprehensive quality control system, including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by FSR - Danish Auditors (Code of Ethics for Professional Accountants), which are based on the fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. 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 controls, 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 we performed a reasonable assurance engagement. Considering the risk of material misstatement, we planned and performed our work to obtain all information and explanations necessary to support our conclusion. We performed our on-site reviews at Lundbeck’s Head Office in Valby, Denmark, in January 2020. Our work has included interviews with key

Member of Deloitte Touche Tohmatsu Limited

Deloitte

functions at Lundbeck, inquiries regarding procedures and methods to ensure that selected data and information have been presented in accordance with the stated reporting practice. We have assessed processes, tools, systems and controls for gathering, consolidating and aggregating the data in scope at Group level, performed analytical review procedures, and tested the data prepared at Group level for consistency with underlying documentation. We have not performed site visits or interviewed external stakeholders, nor have we performed any assurance procedures on baseline data or forward-looking statements such as targets and expectations. Consequently, we draw no conclusion on these statements. Conclusion Based on our work, nothing has come to our attention that causes us to believe that  the sustainability key performance indicators on page 18 in the COP-report,  the proportion of the underrepresented gender at other managerial levels on page 10 in the COPreport and  the data presented in the HS&E-report, have not been prepared in accordance with the reporting practice described.

Copenhagen, 4 February 2020 Deloitte Statsautoriseret Revisionspartnerselskab Business Registration No. 33 96 35 56

Lars Andersen State-Authorised Public Accountant Identification No (MNE) mne27762

Marie Voldby Lead Reviewer

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

Communication on Progress

Sustainability Report 2019 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 and 99b of the Danish Financial Statements Act

Sustainability Report 2019 • ALK

The decade to deliver on our promise As a global allergy solutions company, with a wide range of treatments, products and services to meet the needs of people with allergy, their families and doctors, we are in a unique position to make a diﬀerence. 2019 was a year where we took great strides to deliver on our promise to people and planet, while building a sustainable and robust company for the future. We are proud to confirm our commitment to the principles of responsible conduct outlined in the Ten Principles of the UN Global Compact within the areas of human rights, labour, environment and anti-corruption. We will continue to promote sustainable development, and to integrate the principles into the way we conduct business, while maintaining a close and transparent collaboration with our stakeholders. 10 years to deliver As business leaders it is our obligation to address global challenges in addition to creating long-term sustainable value for our companies. The choices we make today will impact whether or not we are in business tomorrow. Our commitment is not based on what makes us feel good or popular, but on which actions will help shape the future we want to see. The start of this new decade means that we have just ten years to realise the UN Sustainable Development Agenda. I am excited to contribute to this at ALK. We are committed

to doing our part by supporting the Ten Principles of the UN Global Compact and setting increasingly ambitious targets that contribute to the achievement of the UN Sustainable Development Goals. Delivering on our promise for a sustainable world 2019 has been a year of leadership development and cultural transformation at ALK as we began training our top 150 leaders to lead in today’s volatile, uncertain, complex and ambiguous world. This constantly changing environment demands more of us as colleagues, as global citizens and as people. This is why we launched a new Code of Conduct that better reflects how we view our role in society today. It incorporates our cultural beliefs, our good practices and aligns them with standards of professional conduct. For us, compliance is not only important internally, but also in how we interact with external stakeholders or act as private individuals. I am proud to announce that ALK has become part of the Danish Government’s newly established Climate Partnership within the life science industry. We hope that this new partnership can foster new ideas for how our industry as a whole can reduce its climate footprint.

“

The choices we make today will impact whether or not we are in business tomorrow. Our commitment is not based on what makes us feel good or popular, but on which actions will help shape the future we want to see.

This year, we also made the decision to continue the rollout of our free allergy companion app klara, which helps hundreds of thousands of people with allergy manage their allergies in an easy and convenient way.

anti-corruption. We will begin the process of setting new goals based on a new materiality assessment that will take ALK further on our journey to help more people with allergy, while protecting the planet and creating prosperity along the way.

In 2020, we will continue our efforts to reach our goals in our four areas of action - human rights, labour, environment and

Carsten Hellmann President & CEO

Sustainability Report 2019 • ALK

ALK business model At ALK, we want to make a difference by offering solutions for everyone who is affected by allergy – through a comprehensive range of products, services and resources that offer a fast-track to a more balanced life.

Foundation

R&D With almost 100 years of experience, nobody knows allergy and allergic asthma like ALK. We continuously apply our scientific knowledge to help people take control of their allergy and their life.

Natural allergen sources ALK’s biological medicines are derived from natural allergen sources, such as pollen, which we harvest, purify and quality control at our own source materials facilities.

Production Production of finished AIT products takes place at dedicated facilities subject to continuous quality assurance in compliance with EU, US and Japanese pharma standards. ALK has AIT manufacturing locations in four countries.

Strategic priorities

Patient engagement and adjacent business

Sales and partnerships In addition to our own sales organisation, ALK partners for growth with leading speciality pharma companies worldwide. We are present in 41 markets, either directly or via partnerships.

Employees ALK relies on a highly skilled workforce of ~2,400 people united by a set of Cultural Beliefs: Do the right thing, Pursue growth and Build bridges.

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

Succeed in North America

Complete and commercialise the tablet portfolio for all relevant ages

Optimise and reallocate

Performance

Allergy solutions for life More than 500 million people worldwide have allergies. 50 million are eligible for AIT treatment, but less than five million actually receive it. ALK is working to support people with allergy much earlier in their disease journey by engaging with them, informing them and mobilising them to seek treatment. We aim to commercialise every stage of the allergy journey.

Doctors We help allergists to drive better access and outcomes for all AIT-eligible patients, reaching out with support, disease information and treatment options.

Society ALK addresses profound societal challenges by producing medicine targeting the leading causes of lost productivity and lost work days. We partner with payers and healthcare authorities to advance registered, documented AIT products.

Employees We are committed to a sustainable work life and we keep a constant focus on being a great and safe place to work for motivated and satisfied employees.

Shareholder return ALK works to create long-term value for our shareholders.

Sustainability Report 2019 • ALK

ALK Sustainability Framework The purpose of our Sustainability Framework is to ensure a stronger link between our CSR activities and our business and a more focused approach to our sustainability ambitions. The framework incorporates key elements from the Triple Bottom Line framework, the Ten Principles of the UN Global Compact and the UN Sustainable Development Goals.

This guides the overall strategy for our CSR work by acknowledging that being a sustainable company requires a company that has a balance in its activities. The framework is a visualisation of the role we play in bringing prosperity to our company, our people, people with allergy and consequently society as a whole.

The Sustainable Development Goals Following an internal assessment conducted in 2016, and a follow-up in 2018, we identified the following four SDGs as areas where we can have the most positive impact: Good health and well-being We contribute to healthy lives and promote well-being for patients and our employees at all ages.

Decent work and economic growth We work systematically to improve the working environment in all parts of our organisation and to promote safety at work.

PEOPLE

PLANET

PROSPERITY

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.

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.

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.

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.

Responsible consumption and production We strive for sustainable resource consumption through our production. We continue to take measures to reduce the climate impact of our production processes.

Peace, justice and strong institutions We promote peaceful and inclusive societies for sustainable development. We work to reduce corruption and bribery in all its forms.

Sustainability Report 2019 • ALK

Sustainability performance 2019 PROMISE

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.

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.

2019-2020 GOALS

STATUS

COMMENT

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

1.9 million

Approximately 1.9 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.me.

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

In progress

Our progress with the Quality Mindset Maturity Index will be reported in 2020.

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

17%

The number of shareholder-elected women is 1 (17%).

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

22%

The number of women on functional-manager level increased by two percentage points to 22% versus 20% in 2018, which is a positive step forward.

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

38%

The number of women in mid-level management increased by four percentage points to 38%.

By 2020, the Lost Time Injury (LTI) frequency is <3.0.

3.5

By 2020, the individual development score is greater than 78.

The 2019 development score is 78. In order to better support their employees’ development, additional training will be provided to managers.

By 2020, the engagement score is equal to or greater than 80.

The engagement score in the 2019 Engagement Survey was 82, which means that most respondents are satisfied with working for ALK. In 2019, energy and water efficiency were considered in all major facilities upgrade plans, especially concerning the 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.

In 2019, the number of work-related accidents with absence was 15, resulting in an LTI frequency of 3.5, above the target of 3.0, but improved from 3.8 in 2018.

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

20%

In 2019, 20% of consumed energy came from renewable wind energy.

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

22%

At the end of 2019, the CO2 emissions had fallen by14% to (7,552 tonnes) compared to baseline (8,762 tonnes).

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

42%

In 2019, 42% of the waste produced at production sites was sent for recycling.

In 2019, 94% of eligible employees have completed the anti-corruption training and test, an increase of 7 percentage points compared to 2018 (87%). 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.

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

94%

A new Code of Conduct was launched 15 November. The new, updated version collects all broadly relevant ALK policies and procedures. Training of anti-corruption and broader Code of Conduct topics will commence in 2020, and first results will be published in the 2020 report.

SDG

Sustainability Report 2019 • ALK

Environment and climate As part of our continued eﬀort to support the UN Sustainable Development Goals, we strive to reduce our impact on the environment and climate through responsible consumption and production. We work towards improving environmental sustainability as part of our commitment to the UN Sustainable Development Goal 12.

Responsible consumption and production We strive for sustainable resource consumption through our production. We continue to take measures to reduce the climate impact of our production processes.

@repponen

Sustainability Report 2019 • ALK

Environment and climate • Ensure that environmental issues are proactively integrated into planning and design work

Policy Climate change is one of the biggest problems facing the world today. 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 consistently look for new ways we can reduce our resource consumption in cultivating and harvesting raw materials as well as the manufacturing, packaging and transportation of our medicines. 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 to participate in environmental work • Educate our employees and implement preventive actions to ensure that factors, which represent environmental risks are monitored and constantly reduced

• 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 Guided by principle 7, 8 and 9 of the UN Global Compact, we take a precautionary approach to environmental and climate challenges. All production sites3 adhere to the Global EHS policy and the integrated Global EHS Management System.

Action To reach the environmental milestones set in 2018, we took several measures to reduce water and energy consumption, waste and decrease CO2 emissions. In 2019 we became part of the Danish Government’s newly established Climate

Partnership within the life science industry. This new partnership aims to contribute to the Government’s ambitious goal of reducing Denmark’s carbon emissions by 70% by 2030. The partnership will come up with concrete recommendations for activities that can reduce carbon emissions in the industry. These recommendations become part of the Danish Government’s new climate action plan, which will be published in 2020. Reduction of the use of plastic A new project was launched aimed at reducing or eliminating the use of plastic as a packaging material for two specific products. The project team is currently exploring two scenarios; either switching to other materials such as cardboard or making the packaging material from recycled plastic. At ALK Spain, reusable drinking bottles with an ALK logo have been distributed to all employees as a substitute for plastic bottles. Green car fleet ALK’s United Kingdom and Ireland affiliate now uses only hybrid cars in its company car fleet, while Belgium’s fleet is 50% hybrid and ALK Netherlands’ fleet is approximately 60% fully electric and 15% hybrid. This is a big improvement on 2018.

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

Risks Our key in-house production facilities are in Denmark, France, Spain and the USA. Although the sites 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. We conduct risk planning including for the prevention of unwanted events, and preventative inventory management, such as the build-up of contingency stocks in order to ensure an unbroken chain of production and supply. 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 2019, and we continue to focus on the main risk factors of energy consumption, CO2 emissions and water usage. Handling of chemicals poses a risk of spills, which is closely monitored. In 2019, no significant spills or releases occurred. We will maintain a sharp focus on which chemicals we use and how they are used.

Sustainability Report 2019 • ALK

Environment and climate

Targets and results Target: We implement preventative actions, monitor and constantly reduce risks, measure the results of our effort and set new goals for continuous improvements. Target: We seek to reduce energy consumption, CO2 emissions and water usage. Goal: By 2020, energy and water efficiency considerations will be an integrated part of facilities upgrade plans. Result: In 2019, energy and water efficiency were considered in all major facilities upgrade plans, especially concerning the reuse of water. We will continue to explore ways to increase resource efficiency. Goal: By 2020, we want at least 30% of all consumed energy to come from renewable energy sources. Result: In 2019, 20% of consumed energy came from renewable wind energy, with the largest contribution coming from our facilities in Hørsholm and Madrid that now run on 100% renewable electricity. Goal: By 2020, we want to reduce CO2 emissions by 25% compared to a 2017-baseline.

Result: At the end of 2019, the CO2 emissions had fallen by 22% to (7,552 tonnes) compared to baseline (9,658 tonnes). This great development is largely due to our Madrid facility, which now runs on renewable electricity.

Environment and climate1

Energy – in real terms Energy – index CO2 emissions – in real terms

CO2 emissions against baseline

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

The increase in water usage between 2018 and 2019 is weather-related. We depend on water to irrigate our raw materials. The amount of water we use is dependent on the weather, especially rainfall. In dry seasons we use more water.

Planned activities for 2020 and expected results A major focus in 2020 will be the setting of new, science-based environmental targets following the framework described by the Science Based Targets Initiative (SBTi).

2016

2017

2018

2019

150,934

144,828

169,276

168,034

164,639

Index

100

Tonnes

7,830

6,282

9,658

9,228

7,552

100

Direct GHG emissions

Tonnes

4,419

4,140

3,045

Indirect GHG emissions4

Tonnes

5,238

5,088

4,507

CO2 emissions – index

-22

Index

100

Tonnes

267

174

265

351

118

Water – total, in real terms

112,275

102,418

120,960

117,252

122,461

Water – from production, in real terms

80,016

81,130

90,061

88,564

85,890

Index

100

104

CO2 emissions – from lost refrigerants

Overall, we are on the right track to deliver on our promise for the planet. We expect that these positive trends will continue and that we will reach the milestones by the end of 2020.

2015

Result: In 2019, 42% of the waste produced at production sites was sent for recycling.

Unit

Renewable energy – % of total energy consumption in real terms

Water – index Waste water – in real terms

75,692

78,969

89,518

89,243

71,550

Waste – in real terms

Tonnes

555

608

555

600

803

Waste for recycling

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

The CO2 emissions include Scope 1+2

Scope 1 GHG Protocol

Scope 2 GHG Protocol

These will involve exploring further possibilities for buying clean energy to increase our proportion of energy from renewable sources, and reducing our CO2 emissions. At our production site in Post Falls in the USA, we will explore the possibility of running the facility on renewable electricity to maintain the positive trend in CO2 reduction.

In 2019, we defined a project to optimise our use of road transport out of Madrid in Spain, with the aim of reducing the total amount of transport mileage. The project will conclude in 2020. We will also investigate the possibility of reusing some of the waste from production as agricultural fertiliser.

Sustainability Report 2019 • ALK

Fit for growth – how we simplify processes and do things smarter Building a company that is fit to grow sustainably is no small undertaking. Project Fit for Growth is a new initiative with the aim of ensuring that we are ready to deliver the increased production volumes, while also finding ways to get even more out of our existing production setup. For example, saving water and energy by adjusting the ventilation systems specifically for each room, rather, than at a whole building level or reusing water at different parts of the production processes. Another example comes from the transportation of our products. Building a more robust supply means that we can bundle our deliveries into larger shipments, reducing the carbon emitted in the distribution of our products.

ALK’s headquarters in Hørsholm, Denmark

Sustainability Report 2019 • ALK

Anti-corruption We work to prevent corruption and bribery in all its forms and support peaceful and inclusive societies around the world as part of our commitment to sustainable development.

Peace, justice and strong institutions We promote peaceful and inclusive societies for sustainable development. We are committed to working against corruption and bribery in all its forms.

@alexandermils

Sustainability Report 2019 • ALK

Anti-corruption

Policy We are committed to working against corruption in all its forms, by always acting professionally, fairly and with integrity. We take a zero-tolerance 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 integral part of our business partnerhandling process, and we ensure that our partners 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.

Doing business with integrity extends to other good governance practices including interactions with healthcare professionals and responsible marketing practices. In 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 and The Ethical Committee for the Pharmaceutical Industry.

Action In 2019, we continued our anti-corruption awareness training and tested all employees who were not on leave or on short-term contracts during the training period. The training and test included questions about everyday dilemmas and our whistle-blower hotline, ALK Alertline. Overall, 2,138 employees completed the training out of 2,281 eligible employees. 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.

All employees are aware of and have access to our whistle-blower hotline, the ALK Alertline, which allows our employees to report illegal behaviour or other concerns in a secure and confidential manner. The hotline allows employees to file a report in multiple languages, either by telephone or via an online form. The ALK Alertline is administered by an independent organisation, but processed internally, with oversight from the chairman of the Audit Committee. The Committee evaluates each report 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. To further strengthen our commitment to transparency, feedback culture and open dialogue, an awareness campaign was rolled out globally in 2019. The ALK Code of Conduct is an integrated part of our business. Following an assessment at the beginning of 2019, a decision was made to update the Code of Conduct to raise compliance levels at ALK. The new, updated version collects all broadly relevant ALK policies and procedures, covering topics such as anti-corruption, competition, grants, donations and political contributions and more. The Code of Conduct was launched on 15 November.

Risks The main risks related to our activities include employees’ and business partners’ violation of our anti-corruption commitment along with any resulting legal and financial consequences. 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 2019, the risk of corruption in connection with our business increased due to entry into new markets. When relevant, we conducted due diligence of third-party relationships. Additional investments were made according to need - for example, for consultants to investigate potential business partners in more detail. The overall risk for ALK continues to be rated low, as we have established multiple measures to ensure that anti-corruption is an integrated part of our business, such as vetting of all 650 GxP suppliers, and conducting ad hoc evaluations depending on general risk assessments.

Sustainability Report 2019 • ALK

Anti-corruption KPI: Percentage of employees with seniority >three months who have read the ALK Code of Conduct.

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 through 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 developed • Ad hoc third-party due diligence of partners and suppliers, where relevant Large contracts are reviewed and approved by Global Procurement, who will ensure compliance with our commitment to anticorruption and sustainability. We aim to maintain our standing by acting in compliance with all applicable regulations and legislation.

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 our whistleblower hotline, the ALK Alertline. Result: No incidents of corruption and bribery have been reported via the ALK Alertline in 2019. However, five cases concerning compliance matters were reported through other channels, of which two were closed as unfounded after internal investigation, and three are still being investigated.

Result: Towards the end of 2019, we developed a new Code of Conduct and for that reason, it was decided not to ask existing employees to confirm their familiarity with it. However, all new employees who became part of ALK in 2019 have read and signed off on the previous version of the Code of Conduct. KPI: Percentage of employees who have passed the ALK anti-corruption training and test. Result: 94% of eligible employees have completed the anti-corruption training and test, an increase of 7 percentage points compared to 2018 (87%). Goal: By 2020, we want to test all employees on a yearly basis about their knowledge of business ethics compliance. Result: Training of anti-corruption and broader Code of Conduct topics will commence in 2020, and first results will be published in the 2020 report.

Planned activities for 2020 and expected results A follow-up to the first campaign regarding our whistle-blower hotline, ALK Alertline, will be launched in 2020 with the intention of continuing the strong focus on good ethical conduct. Following the launch of the Code of Conduct, we will develop new training material and expand our anti-corruption training with additional compliance areas. This will be the major focus in 2020. We work to prevent corruption and bribery in all its forms and supports to peaceful and inclusive societies around the globe as part of our

Sustainability Report 2019 • ALK

New Code of Conduct:

How we drive and grow an ethical business Trust is at the core of any good relationship - between individuals, between employer and employee, and in relationships with communities across the globe. Having policies and processes in place that can foster trust is essential to our ability to grow as a company and ultimately, to our ability to help people with allergy. Our Code of Conduct was developed with our cultural beliefs, transparency and business integrity at its core, and it covers both internal policies and procedures, and local and global laws. Following these guidelines is a critical part of being an ALK employee.

“

Following a set of guidelines, we all sign oﬀ on, makes it easier for us to do the right thing, because what is expected of us as employees is well-defined. But the key to driving and growing an ethical business is holding ourselves accountable to these standards. Our new Code of Conduct allows us to expect more from each other and from our business partners, and it gives our stakeholders a clear understanding of who we are and where we stand as a company.” Kristoffer Fog Senior Director, Corporate Affairs & Legal

Sustainability Report 2019 • ALK

Human rights At ALK, we respect human rights and we expect our business partners, suppliers and customers to do the same. People with allergy depend on us for solutions they can trust, and in turn we empower them to take control of their life. We promote good health and well-being through our products and our work to support the right to good health both for people with allergy and our employees.

Good health and well-being We contribute to healthy lives and promote well-being for people with allergy and employees at all ages. @simonmaage

Sustainability Report 2019 • ALK

Human rights

Policy ALK contributes to the good health and well-being of our employees and people with allergy all over the world. All our activities 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. 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 • Promote fair working conditions, equal pay for equal work, freedom of association and collective bargaining • 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 • 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

https://www.ncbi.nlm.nih.gov/pubmed/20934626

• Do not accept offensive behaviour in any form. At ALK, everyone has the right to be treated with respect and to dignified interactions. • Ensure public health via patient care and the safe use of our products

Together with an external company, our Procurement department has made risk evaluation engineering reports. These also include general risks for people, such as risk for fire, risk for work related accidents etc.

Action

We are determined to continue raising awareness about allergies and related diseases. In 2019, we continued engaging with people with allergy via our online platform klarify.me and our allergy companion app klara.

Good health and well-being All employees are covered by a health programme, either made available through, or paid for by ALK. All employees have freedom of association, either formally in unions or internally in workers’ councils.

In 2019, we launched a new allergy immunotherapy tablet for tree pollen allergy. In addition, we continue to invest in clinical studies to expand into new markets and reach many more people with allergy, including children and adolescents.

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.

Partnerships We are always looking for new opportunities to engage with companies or NGOs to expand access to our medicines. ALK is the official sponsor of the Emerging Societies Program: World Allergy Training School (WATS). The main objective of WATS is to develop learning communities appropriate to a specific regional context, which will help build sustainable capacity in the field of allergy.

The majority of relevant employees have access to and have been trained in the newly implemented global Chemical Management System, which describes hazards and precautionary measures in relation to chemicals. In 2019, approximately 5,000 hours were spent on training relevant employees. Additionally, health and safety considerations are built into facilities upgrade plans, with a special focus on heavy lifting, ergonomics and chemical management.

Additionally, we engage with allergy patients’ organisations and support their work in raising awareness about allergy and asthma. In 2019, we funded Asthma-Allergy Denmark’s Hay Fever Schools. The purpose of which is to educate children and adults on how to manage their allergies.

In 2019, we also donated ALK products to the University of Maryland Children’s Hospital (UMCH). UMCH launched the Breathmobile® programme to offer free, comprehensive, preventative care to undeserved children aged 2-18. The patients receive diagnostic services, medication and education, and the programme contributes significantly with direct medical cost savings1. Privacy and data protection In 2019, the GDPR 2.0 project was launched to ensure even better protection of personal data across ALK. Additional awareness and training activities were rolled out in 2019, covering additional employees. The project will continue in 2020. 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 2019, we also optimised several quality-related IT tools to ensure compliance with expectations from healthcare authorities, facilitate continuous improvements and increase efficiency. 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 EFPIA’s and PhRMA’s Principles for Responsible Clinical Trial

Sustainability Report 2019 • ALK

Human rights Data Sharing guidelines in a manner that safeguards the privacy of patients, respects the integrity of national regulatory systems, and protects proprietary information. 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 2019, 13 external inspections of our sites were successfully completed. During 2019, ALK had three minor product recalls. None of the recalls affected the safety of patients and corrective actions have been implemented to avoid similar cases from happening in the future. All ALK employees are required to report any case of side effects from ALK products within 24 hours of learning about them.

Risks Meeting quality standards in our production and manufacturing processes is a prerequisite for ALK’s competitive strength. Our production processes and quality standards have been developed

and optimised over many years. To mitigate the risks, we invest significantly in ensuring robustness and compliance. Workplace risks at ALK include the potential risk of exposure to allergens which are our main raw material. Working with chemicals also represents a potential health risk. We conduct periodical screenings for employees who use chemicals in their daily work. Any risks are mitigated through mandatory health and safety training for all employees who handle allergens and chemicals as part of their work. Activities in health risk reduction are closely monitored. Allergy testing for employees is provided where possible. Locally adapted information campaigns and training programmes on risk issues are made available to all employees. 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. This includes, for example monitoring changes in the products’ benefitrisk balance and promotion of the products’ safe and effective use. The structures and processes related to these activities are called ‘ALK’s pharmacovigilance system’ and are a vital part of our licence to operate. 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.

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

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 being upgraded to higher security standards. In addition, new screen savers with the ALK IT security rules have been installed on all ALK computers to increase awareness.

Result: Approximately 1.9 million people have been treated with ALK products. We expect to reach 2 million people by 2020, as a result of our recent product launches that allow people with allergy more convenient access to allergy immunotherapy.

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

Targets and results 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 engage with 20 million people through our consumer initiatives. Result: An estimated 105 million people have been engaged through our digital consumer platform klarify.me. This is the first time we have a KPI for engaging with people with allergy, and we are pleased to see the positive result. 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. We will report on our progress next year.

Sustainability Report 2019 • ALK

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

KPI: Number of incidents or complaints submitted to the national Data Protection Agency concerning breaches of data protection.

@the_tonik

KPI: Lost time rate. Absence due to sickness 2019 Denmark

2.4%

North America1

1.3%

Western Europe2

3.5%

Eastern Europe and International Markets3

2.4%

Total Absence

2.7%

Result: Three non-critical incidents of data breaches involving non-sensitive personal data were submitted to the national Data Protection Agencies during 2019, at present resulting in no further actions from the agencies. As a consequence, additional awareness campaigns and training of employees were conducted, as well as technical reviews of our IT systems.

1 The United States of America and Canada 2 France, Spain, Germany, Finland, Sweden, Norway, Italy, Austria, Switzerland, United Kingdom, Belgium, Netherlands 3 Czech Republic, Slovakia, Poland, Turkey, China, Hong Kong

Result: All lost time rates are within normal limits. None provide cause for concern, nevertheless we have followed up with countries with increased rates and no further actions were required. KPI: Percentage of workers, by gender, who have access to services for work-related accidents or diseases made available or paid for by ALK. Result: At ALK, all employees regardless of gender have access to healthcare services for work-related accidents or diseases. Target: We protect and enforce the rights of data subjects.

Planned activities for 2020 and expected results To protect data privacy, a number of awareness campaigns have been conducted and further technical evaluations and measures are being reviewed and considered. 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 2020, we will further develop the Quality Mindset Maturity Index and continue training our employees and upgrading qualityrelated IT systems. In 2020, we will expand our digital engagement activities to cover several more countries, including the USA.

Antibiotic stewardship:

Partnering for responsible use of antibiotics The use of antibiotics is the single most important factor leading to a rise in antibiotic resistance around the world and at least 700,000 deaths globally from drug-resistant diseases1. Antibiotic resistance is a clinical and public health crisis, which threatens further progress on many of the UN Sustainable Development Goals, including in health, inequality and responsible consumption and production1. The misuse of antibiotics is a primary driver of this issue with up to 50% of all antibiotics prescribed not needed or not optimally effective as prescribed2. Penicillin allergy is the most common drug allergy. However, 9 out of 10 patients who report a penicillin allergy are not truly allergic when assessed by skin testing3. Patients who do not have a true penicillin allergy may be unnecessarily treated with broadspectrum antibiotics, contributing to the spread of multidrug-resistant bacteria4. Since 2017, we have had a partnership with the Centers for Disease Control and Prevention to support penicillin allergy delabelling and antibiotic optimisation. In 2019, more than 150 news outlets picked up our press release reaching a potential audience of more than 72 million people.

No time to wait: Securing the future from drug-resistant infections – https://www.who.int/docs/ default-source/documents/no-time-to-wait-securing-the-future-from-drug-resistant-infections-en. pdf?sfvrsn=5b424d7_6

https://www.cdc.gov/antibiotic-use/healthcare/index.html

Blumenthal KG et al. – Addressing Inpatient Beta-Lactam Allergies: A Multihospital Implementation – https://europepmc.org/article/PMC/5484001

Bhattacharya S – The facts about penicillin allergy: a review – https://www.ncbi.nlm.nih.gov/ pubmed/22247826

Sustainability Report 2019 • ALK

Labour rights We support Sustainable Development Goal 8 and promote decent work and economic growth in all areas of operation. We commit to ensuring safe working conditions, fair employment and access to training and education for all employees.

Decent work and economic growth We work to be an attractive workplace for all by focusing on improving the working environment in all parts of our organisation and ensuring safety at work.

Frank Phillips, Collections Supervisor, Post Falls, USA

Sustainability Report 2019 • ALK

Labour rights • Develop the competencies of employees at all levels

Policy Our global Human Resources policy seeks to create an appealing working environment, so we can attract, develop and retain wellqualified and engaged employees.

• Prohibit all types of discrimination, harassment and retaliation, along with forced and child labour We act in compliance with national legislation in the countries in which we operate, and we follow the UN Global Compact Principles 3-6.

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.

Action To ensure that employees can continue to develop their skills, we offer internal and external training opportunities for all employees. We continue to: • Provide equal opportunities for all regardless of age, gender, race, ethnicity, religion, sexual orientation and ability • Provide fair wages by aligning our compensation with that of other pharmaceutical companies in the geographical areas where we operate • Ensure the well-being of employees and their families by being involved in local initiatives, practices and procedures with respect for local traditions, conditions and needs

Community engagement In Post Falls, USA, our employees have participated in the annual Community Day, where everyone had a day off to participate in community service. In Denmark, we continued to support students with educational visits both at our headquarters and as a potential employer at university fairs, raising awareness about allergy and Science, Technology, Engineering, Mathematics (STEM) education. Employee engagement In Spring 2018, a new and simpler engagement survey was introduced. The same engagement survey was rolled out to all employees globally in October 2019. More than 2,000 employees responded (87%). All teams were encouraged to conduct a team development follow-up session, using the results from the survey. Units with a low

engagement score were requested to create action plans and a follow-up engagement survey for these teams was conducted at the end of 2019.

in e.g., employee selection, promotions, development, compensation, work-life balance, and treatment of employees who are at risk of exclusion or gender violence.

Diversity A diversity and inclusion policy has been distributed outlining our commitment to ensure equal opportunities for all. In addition, we have created internal guidelines to ensure an environment free of harassment. Awareness about both policies was raised internally during 2019.

Safety The health and 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 healthy and safe work environment. Furthermore, we also assess work processes to ensure that we mitigate any health and safety risks.

As part of the Diversity and Inclusion project, launched at the end of 2018, a study was conducted during 2019 to determine the specific barriers to advancement for women in management. We aim to ensure equal treatment and opportunities, as well as nondiscrimination between men and women, promoting a business culture based on respect and fair treatment for all employees. As part of our diversity and inclusion policy, we apply relevant and objective criteria when making decisions about hiring or ending employment, promotions or changes in responsibility, and compensation. At ALK Spain, an Equality Plan was launched to ensure equal treatment and opportunities, as well as non-discrimination between men and women, promoting a business culture based on respect and fair treatment for all employees of the company. The plan includes specific actions that will be implemented

All employees at production sites who handle chemicals were trained in the Chemical Management System in 2019. The Chemical Management System contains all ALK’s safety data sheets and describes any hazards and the precaution to be taken when using the chemicals. We continued to monitor safety at all ALK locations. Safety training is adapted to local needs and allows flexibility in line with local laws and traditions. Child labour In 2019, we maintained the focus on highrisk countries and are working to increase awareness about child labour, both internally and externally. We continue to add child labour clauses to all new, large supplier contracts.

Sustainability Report 2019 • ALK

Labour rights

Risks

Targets and results

Our production processes and the general nature of our business require that we use skilled labour. Combined with the fact that our production facilities are located at sites in Denmark, France, Spain and the USA, the risk of labour rights violations in our operations is rated as low.

Target: We promote safe and secure working environments for all employees.

Although ALK is not a high-risk company regarding safety, we do not accept accidents as part of our operations and seek to prevent them from happening. Feeling healthy and safe at work is a huge part of making the workplace a positive place to be for everyone. The vast majority of our main suppliers are located in countries with a low risk of child labour and safety and labour violations, so our main risks stem from their suppliers. Nevertheless, we acknowledge the risk and take mitigating actions when needed, for example by using a generic questionnaire that is mandatory for all ALK sites as part our Supplier Management System, and by adding clauses to supplier contracts.

Goal: By 2020, the Lost Time Injury (LTI) frequency is <3.0. Result: In 2019, the number of work-related accidents with absence was 15, resulting in an LTI frequency of 3.5, above the target of 3.0. The result is not satisfactory, and we must strengthen the effort to prevent injuries. KPI: Percentage of total workforce represented in formal joint managementworker health and safety committees. Result: All employees at production sites are represented in joint management-worker health and safety committees. The committee consists of 80 employees from different functional areas (4.6% of total FTEs). Target: We take immediate and effective measures to eradicate child labour in all its forms by 2025.

KPI: Percentage of operations and suppliers identified as having significant risk of incidents of child labour.

KPI: Anti-discrimination – number of incidents, including reports to the ALK Alertline.

Result: An evaluation has been conducted to determine how many suppliers are located in high-risk areas for child labour.

Result: In 2019, there have been no incidents of equal opportunity discrimination reported via ALK Alertline. However, there were a few cases reported through local Human Resources: One discrimination concern and two regarding inappropriate behaviour. Two complaints resulted in termination and one was found to be not supported by sufficient evidence.

• • • •

Total number of suppliers: 9,000 Number of suppliers in risk areas: 20 Total spend in risk areas: 0.3% Percentage of suppliers in risk areas: 0.2%

Target: We promote equal opportunity for all. Goal: By 2020, the individual development score is greater than 78. Result: The 2019 development score is 78. In order to better support their employees’ development, additional training will be provided to managers. Goal: By 2020, the engagement score is equal to or greater than 80. Result: The engagement score in the 2019 Engagement Survey was 82, which means that most respondents are satisfied with working for ALK.

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 (17%). In 2019, we had one seat up for election to which we appointed a man, after careful consideration of the qualities and experience of both male and female candidates. We are committed to increasing the number of women on ALK’s Board of Directors to 30% and remain focused on finding the right match and meeting the 2022-goal. Goal: By 2020, we want women to make up 30% of functional managers and 40% of midlevel managers.

Sustainability Report 2019 • ALK

Labour rights Accidents and training Unit

2015

2016

2017

2019

2018

Working environment Accidents with absence1 Lost Time Injury Frequency (LTIF)2 Total EHS training annually3

Number

LTIF

3.9

4.4

3.8

3.5

Hours

2,978

3,018

4,983

Employees trained3 1

From 2016, the data includes all ALK affiliates. Before 2016 only production locations

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

Calculated for the first time in 2017, ALK employees from production sites

Number of new hires by gender and region 2017 Men Women

2018 Men Women

2019 Men Women

Denmark

North America

Western Europe

International Markets

201

292

178

240

133

219

Total

Ratio of basic salary of women to men by significant locations of operation Pay ratio – of women to men

Management

2018 Professional

Support

Management

2019 Professional

Support

Average of Total Base Pay 100 % FTE ALK

102

101

103

Denmark

101

102

100

102

France

100

101

Spain

United States

Note: Significant locations of operation are defined as countries with more than 200 employees

Result: The number of women on functionalmanager level increased by two percentage points to 22% versus 20% in 2018, which is a positive step forward. The number of women in mid-level management increased by four percentage points to 38%. For detailed information see page 22. KPI: Local residents are employed including in management positions. Result: 94% of our employees are on permanent contracts, and locals are recruited at all levels. All ALK employees are encouraged to develop their skills in order to ensure their continued employability (see page 22). KPI: Total number and rates of new employee hires and employee turnover by age group, gender, and region. Result: ALK continues to show a healthy trend in the gender and age distribution of new hires. Although a higher number of women than men are hired on temporary contracts, the number correlates well with the fact that a higher number of women are hired in general. More than 80% of new hires are aged between 20 and 49. 33% of all new hires are aged between 20 and 29, which is a positive development. A notable statistic is also the percentage of new, female hires in the two age groups 40-49 and 50-59. More than 70% of them are women, highlighting the need to continue our effort in creating a more balanced gender distribution across ALK.

Employee turnover Overall, the employee turnover figures (11%) are at a reasonable level and in line with previous years. This is particularly positive during a period where we are in a cultural transformation. The turnover percentage for women (10%) is slightly lower than that of men (12%), which is also not a cause for concern. Looking at turnover by age group, the highest turnover percentages are in the age group 40-49 and 60+ (13% for both). This is mostly due to voluntary turnover. Geographically, the highest turnover (16%) is in the North America region and the lowest (6%) in the Western Europe region. Part of the explanation for the high turnover rate in North America is due to a 32% increase in involuntary departures combined with a 22% increase in voluntary departures. This is mostly due to two contributing factors: First, ALK experienced an increase in the competition for talent in the North American market, where especially the USA has the lowest unemployment rate in 50 years at 3.6%, which explains the increase in voluntary departures. A second contributing factor is the increased number of terminations due to strategic restructuring and low performance, which resulted in a higher than usual number of involuntary departures. By contrast, in Western Europe fewer involuntary departures and retirements are behind the overall decrease in turnover (see appendix on page 25).

Sustainability Report 2019 • ALK

Labour rights

Number of women in management 2015

2016

2017

2019

2018

Board of Directors (shareholder-elected only)

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. The pay ratio shows a positive trend on Professional and Support levels, where the lowest pay difference is 90, which is not ideal, but a significant improvement compared to 2018 (83). However, at Management level in France, Denmark and ALK broadly, the ratio difference has increased. The reason for this could be the turnover of employees in key positions, and an increased number of women in senior management. In France, the pay ratio of women to men is 80, down from 83 in 2018. Part of the explanation could be the difference in pay between large cities and urban areas. This result invites further investigation into why the difference exists and what can be done about (see page 21).

Planned activities for 2020 and expected results Although the number of women in senior management is showing an upwards trend, we will evaluate and implement a concrete action plan to achieve a more equal gender balance. The Diversity and Inclusion Board will evaluate whether to include additional diversity metrics such as age and nationality, from 2020, as one of the new goals in our sustainability work. The less-than-satisfactory results revealed in the pay ratio at management level need further investigation. An action plan will follow, succeeding a thorough investigation. In 2019, a new leadership programme aimed at ALK’s top 150 leaders was launched. The training is a significant investment in preparing leaders to be a driving force in the cultural transformation of ALK. You can read more about the programme on page 23. Safety at work will continue to be an area of focus in the coming years. We will continue our efforts to eliminate or reduce the number of work-related accidents, and EHS will initiate knowledge-sharing activities to better understand how we can reduce or eliminate the number of accidents.

Women

17% (1)

20% (1)

17% (1)

Men

83% (5)

80% (4)

83% (5)

Board of Directors Women

22% (2)

25% (2)

33% (3)

Men

78% (7)

75% (6)

67% (6)

Women

20 % (1)

0% (0)

Men

80% (4)

100% (4)

100% (5)

Board of Management

Functional managers Women Men

22% (5)

19% (4)

20% (4)

22% (5)

78% (18)

81% (17)

80% (16)

78% (18)

Mid-level managers Women

35% (28)

38% (36)

35% (37)

34% (41)

38% (44)

Men

65% (52)

63% (60)

65% (68)

66% (78)

62% (73)

First-line managers Women

54% (113)

53% (124)

55% (141)

54% (139)

53% (144)

46% (96)

47% (111)

45% (116)

46% (119)

47% (126)

Men Total at all management levels Women

46% (149)

48% (166)

47% (182)

46% (184)

47% (193)

Men

54% (178)

52% (178)

53% (205)

54% (217)

53% (222)

Number of employees by contract type and gender Men

2017 Women

Men

2018 Women

Men

2019 Women

Permanent

831

1,310

867

1,374

867

1,399

Temporary

108

866

1,418

907

1,462

918

1,488

Total Total both genders

Gender diversity women %

2,284

2,369

2,406

62%

63%

Sustainability Report 2019 • ALK

Leading with Impact In 2019, a new leadership programme, Leading with Impact, was kicked-oﬀ, introducing a completely new way of working at ALK. The aim is to enable the top 150 ALK senior leaders to be a driving force in the cultural transformation of ALK. Key elements in the development programme are: agility training to encourage speed and progress in decision-making and the accomplishment of goals, as well as working closer together cross-organisationally. In addition, the programme includes the strengthening of essential leadership skills such as coaching, communication, feedback and driving high-performing teams.

“

To be the world leader in allergy, helping many more people with allergy to a better life in the future than the one percent of people with allergy, we help today, we have to do something diﬀerent. This new leadership programme is tailormade for ALK. It is designed to bring our leaders together across functions and countries to anchor a new culture and mindset. We are introducing a new way of working based on agility mindset and behaviours. It is very diﬀerent from the way we work today, and it will take time to learn. I have seen it work and I have seen how it accelerates a cultural transformation once we start incorporating this mindset into our workday. I am confident that this investment in our top management will be a strong lever in creating success for ALK in the future.” Carsten Hellmann President & CEO

The Human Organisation A new concept was introduced to all ALK employees during our Spirit Days in the spring of 2019, when all employees were invited to participate in defining what an attractive workplace will look like in the future. Under the headline The Human Organisation, employees identified what they believed would be a vital part of a future workplace. Much of the input gathered reflected global trends in future workplace development, including flexibility, development, diversity, communication, inspiring surroundings, great colleagues and great leadership. In 2020, we will continue the work initiated last year and begin to implement some of the ideas about The Human Organisation.

Sustainability Report 2019 • ALK

Our work with sustainability At ALK, the Board of Management and the Board of Directors decide on the overall Sustainability Framework, including setting strategic goals. The two entities work independently of each other. Everyday prioritisation, actions and monitoring are managed in the cross-functional working group, the CSR Committee. The committment, assessment, definition, implementation, measurement and communication of ALK’s sustainability strategy, is based on the UN Global Compact’s Management Model. Due diligence and risk assessment 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, risks that could entail the termination or limitation of our licence to operate and risks that could damage our reputation. The committee is also responsible for the mitigation of these risks. The sustainability risk assessments are integrated into the overall due diligence processes and procedures. We have established specific procedures to process

reports of illegal and unethical behaviour through a whistle-blower scheme, ALK Alertline, as well as other channels where employees can file complaints, e.g., confidentially to local or global Human Resources or to local or global Environment, Health and Safety representatives. ALK takes additional responsibility by vetting relevant external partners through the Procurement department to minimise the risk of child labour and corruption. ALK encourages suppliers and business partners to adhere to our standards in the areas of human rights and labour rights, the environment and anti-corruption, and large suppliers are encouraged to follow ALK’s Code of Conduct in their operations. Transparency 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.

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. Our work with sustainability centres around an ambition to contribute to the 2030 Agenda for Sustainable Development and is monitored on the basis of relevant indicators developed by the Global Reporting Initiative (GRI), and other relevant standards. Our commitments, efforts and goals are disclosed in our Annual Report and on our website. Stakeholder engagement We continue to foster an open dialogue with all our stakeholders, including healthcare professionals, investors and academia. Their input, as well as global trends and developments are used to guide current and future activities and strategic planning in sustainability.

ALK at a glance ALK is a global allergy solutions company, with a wide range of treatments, products and services to meet the unique needs of people with allergy, their families and doctors.

Established in

Employees

1923

~2,400

Markets

Patients in treatment with ALK products*

~1.9m

People with allergy covered by portfolio of new, evidencebased tablets

Subjects who have participated in clinical trials for the tablets

>80%

>22,000 * covering AIT and anaphylaxis

Sustainability Report 2019 • ALK

Appendix Employee turnover by type and age group 2017 Average

2019

2018

Voluntary

Involuntary

Retirement

TurnCount over %

Average

Voluntary

Involuntary

Retirement

TurnCount over %

Average

Voluntary

Involuntary

Retirement

Total all types

TurnCount over %

29 and younger

168

15%

229

13%

308

30-39

571

627

690

11% 9%

40-49

664

706

743

13%

50-59

488

510

527

10%

60 and older

141

10%

132

135

13%

Employee turnover by type and region 2017 Average

2019

2018

Voluntary

Involuntary

Retirement

TurnCount over %

Average

Voluntary

Involuntary

Retirement

TurnCount over %

Average

Voluntary

Involuntary

Retirement

Total all types

TurnCount over %

Denmark

718

770

827

10%

114

14%

North America1

379

10%

455

489

10%

16%

Western Europe2 835

870

932

Eastern Europe and Intl. Markets3 100

12%

108

14%

11%

Total Turnover 2,070

150

2,209

149

100

2,400

175

260

11%

The United States of America and Canada

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

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

Employee turnover by type and gender 2017 Average

Female Male

2019

2018

Voluntary

Involuntary

Retirement

TurnCount over %

Average

Voluntary

Involuntary

Retirement

TurnCount over %

Average

Voluntary

Involuntary

Retirement

Total all types

TurnCount over %

1261

1359

1488

147

10%

773

845

912

113

12%

Sustainability Report 2019 • ALK

Appendix ESG key figure overview Unit

2019

2018

2017

2016

2015

CO2e Scope 1

Tonnes

3,045

4,140

4,419

6,2821

7,8301

CO2e Scope 2

Environmental data Tonnes

4,507

5,088

5,238

Energy Consumption

164,639

168,034

169,276

144,828

Renewable Energy Share

122,461

117,252

120,960

102,418

112,275

Headcount

2,406

2,369

2,284

2,168

1,952

Water Consumption

150,934

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

Times

1.13

1.12

1.16

1.23

1.19

Employee Turnover Ratio, voluntary and involuntary Absence due to sickness

2.7

n/a

Governance data Gender Diversity, Board

Board Meeting Attendance Rate

Times

n/a4

CEO Pay Ratio3 *

Prior to 2017, ALK did not collect Scope 1 and 2 data separately

Workforce represents a headcount of all employees at the end of the year (full-time, part-time and temporary)

*** The CEO Pay Ratio is calculated as CEO total compensation/median employee total compensation **** In 2016, ALK did not have a CEO for the full year

Sustainability Report 2019

Falck Sustainability Report 2019

Falck at a glance Falck is an international market leader in emergency response and healthcare. We help people in urgent need, bringing peace of mind to our customers. Our strongholds are in the Nordics, the US and Colombia. We operate in 30 countries.

We take pride in turning care into action by delivering emergency response and healthcare services 24-7 – whenever urgent help is needed.

We are a reliable partner to the local communities where we operate and we are committed to exploring new ways of working with our customers.

We have been in emergency response since

1906

Every year, Falck responders drive 195 million kilometres. That corresponds to

We are more than

30,000

250 times

professionals working to help people in urgent need.

the distance to the moon and back.

Ambulance

We provide emergency response within ambulance, fire services and roadside assistance. Within healthcare services, we provide doctor’s consultations, physiological and psychological treatments. And we prevent accidents from happening.

Roadside Assistance We love what we do. United in the belief that every life is precious and that we make a difference for people in urgent need, we enjoy careers with real-life impact.

Healthcare

Portfolio Businesses

That is why we can always promise that we are:

There when you need us 2

Falck Sustainability Report 2019

1.0 Intro

Contents 1.0 Intro

5.0 Environment & climate

A word from the CEO

Our environmental and climate footprint

2.0 Our approach to sustainability

6.0 Trust

Our commitment

A trusted business partner

Risk and impact assessment

Increasing trust in our whistleblower system

Sustainability dashboard

Competition case and self-cleaning programme 22

3.0 Health & well-being

Health and well-being is our business

Skilled healthcare professionals

Quality management and patient safety

4.0 People

An engaged workforce

Introducing our Winning Behaviours

Health and safety

A diverse company promoting equal rights and opportunities

ABOUT THIS REPORT This report serves as our first 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 2019.

Falck Sustainability Report 2019

1.0 Intro

A word from the CEO

Signing the UN Global Compact is a milestone on our sustainability journey In January 2019, Falck became a signatory to the UN Global Compact. We committed to the Ten Principles and pledged to align our strategies and operations with universal principles on human rights, labour, environment and anti-corruption and to take action to advance societal goals.

customers and patients. In 2019, we increased our focus on both these areas.

Being mindful of how we impact social, environmental and economic developments, we pay particular attention to our impact on 1) the access to health 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.

Over the recent year, safety increased in importance as improved data quality uncovered more accurate numbers of the number of fatalities, health and engagement levels in our business. To us, every life is precious, and we want to be a great place to work. Therefore, we work diligently to bring the number of fatalities to zero and to improve health and engagement levels across our workforce.

These four areas constitute the four main chapters of this report. Health stands at the core of our business. Every day, Falck employees across business units and countries help people in urgent need, bringing peace of mind to local communities where we operate. Adequate healthcare training of our frontline employees and strict quality management procedures are prerequisites for us to deliver high-quality services to

Falck is a people business. Every day, our employees put themselves at risk to save the lives of others. Their health and safety continue to be a key concern to us.

In 2019, we conducted our second annual global engagement survey which led to numerous local initiatives, and globally to the development of a common approach to how we should act towards our colleagues, patients, customers and society: our three Winning Behaviours. In 2020, we have made safety a global priority and added global expertise and resources to the extensive work that is being carried out locally.

Falck’s vehicles drive 195 million kilometres every year, corresponding to 250 times the distance to the moon and back. We wish to mitigate any adverse impact our business activities may have on the climate and the environment, focusing our efforts on fuel consumption. In 2019, we added relevant KPIs within this area to our sustainability dashboard.

care services. This will supplement our efforts to ensure and improve responsible business practices within our key focus areas of health, people, environment & climate and trust.

Jakob Riis President and CEO

Our sustainability efforts are firmly embedded in our Code of Conduct, and in 2019, we accelerated training in this and in our whistleblower system, Falck Alert. After a ruling at the beginning of the year on a competition case dating back to 2014-15, we further increased focus on compliance, transparency and ethics. We also carried out an internal investigation to identify any past or present violations of the Code of Conduct. It is our ambition over the coming years to define shared value projects together with our business partners and customers. Such projects will enable us to have a positive impact on society beyond our own business and will most likely focus on fleet electrification and the development of new prehospital health-

Falck Sustainability Report 2019

2.0 Our approach to sustainability

Our commitment

Policy, governance and shareholders

Falck’s sustainability efforts are integrated in our daily business decisions and strategy. Our commitment is firmly embedded in our Code of Conduct and in our Winning Behaviours.

Falck is an international leader in emergency response and healthcare services. We help people in urgent need, bringing peace of mind to local communities where we operate.

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.

Our patients, customers, employees and society in general place trust in us. Falck is committed to acting responsibly as a company and to contributing to socially, environmentally and economically sustainable developments.

FOUR MAIN FOCUS AREAS, FOUR SDGS Being mindful of how we impact social, environmental and economic development, we give particular attention to our impact on 1) the access to health 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.

COMMITMENT TO THE UN GLOBAL COMPACT In January 2019, we became a signatory to the UN Global Compact, and this report serves as our first annual Communication on Progress to the UN Global Compact. We commit to its ten principles on human rights, labour, environment and anti-corruption and thereby 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 Labour Organization’s Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on the Environment and Development and the UN Convention against Corruption.

For each focus area we have identified the UN Sustainable Development Goal (SDG) which best corresponds to our efforts and which we believe we can contribute to most: SDG 3 (Good health and well-being), 8 (Decent work and economic growth), 13 (Climate action) and 16 (Peace, justice, and strong institutions). This way, we ensure that we address the global challenges most closely linked to Falck’s usiness.

In 2019, Falck’s Board of Directors adopted a Corporate Sustainability Policy, laying out the principles for our work within sustainability. The policy is available at falck.com

MAKING OUR COMMITMENT OPERATIONAL In making our commitment operational, we have conducted a compliance risk selfassessment which measures our risk maturity on Code of Conduct and sustainabilityrelated risks. Additionally, we have carried out a global employee engagement survey. The assessment and survey provide input to our ongoing implementation efforts and mitigating actions. In relation to this, we have defined a number of non-financial KPIs in order to measure our outcome and progress which are illustrated in a sustainability dashboard. This 2019 Report has increased focus on environmental reporting by including fuel data and an expanded Environment & climate chapter. We still, however, face a number of data challenges, making it our priority to conduct concise risk assessments and set specific targets within all focus areas. Such activities will provide more accurate data which will allow us to base specific activities upon that data.

Responsibility for Falck’s sustainability reporting is shared between Global HR, Global Compliance and Global Branding & Communications. These functions report directly to the President and CEO of Falck. Two of Falck’s main shareholders are Danish foundations with clearly defined non-profit purposes: The Lundbeck Foundation (59%) supports biomedical sciences research, primarily in the field of brain research, while TryghedsGruppen (12%) finances the Tryg Foundation’s non-profit activities promoting safety, health and well-being. Falck’s third main shareholder, KIRKBI (29%), is the private holding and investment company behind the Lego Group.

gether with business partners, raising our level of ambition and making an impact on society beyond our own business. Such projects will be defined within the next few years.

Alongside our efforts to ensure, document and improve sustainable business practices, we intend to define shared value projects to5

2.0 Our approach to sustainability

The results of the 2019 assessment identify bribery & corruption, competition compliance and the misconduct reported through the whistleblower system as Falck’s top three compliance risks based on the average of all responses to the self-assessment. These were also identified as the top three risks in 2018,

COMPLIANCE RISK ASSESSMENT

5. Severe

In 2020/21, we intend to conduct a full human rights risk and impact assessment and to include a climate and environment impact analysis. Together with the annual compliance risk assessment, this will give us a full overview of our sustainability-related risks and adverse impacts, enabling us to define priorities and mitigating actions based on in-depth knowledge and data. The purpose of the compliance risk assessment is to assess the compliance risk profile of our global business and to identify the areas where we have the greatest risk of having an adverse impact.

Most Falck entities completed the compliance risk self-assessment form in 2019, and the assessment thereby forms a risk profile for Falck overall and for each business unit as well as an overall risk score per country. The compliance risk score is used to determine focus areas by country, business unit and overall for Falck, and it serves as input to the 2020 compliance work plan.

The overall risk score for Falck has decreased since 2018, but separatley bribery & corruption, conflicts of interest and competition compliance have increased. The risk increase for conflicts of interest is caused by an adju-

stment in the scoring, which assigns a higher risk where no conflicts of interest have been reported, placing more focus on transparency. In 2019, Falck introduced the registration of personal interests via the One Compliance app, which requires employees to disclose personal interests that could potentially be or become conflicts of interest. The registration system will be integrated further in 2020. The risk increase in competition compliance is likely due to the heightened awareness of the issue, prompted by a competition case in Denmark and the global dawn-raid training which results in the respondents assigning a higher risk impact score for competition compliance. In 2020, Falck will review how to integrate the risk assessment into an online tool, and we expect the results may be used for data analytics.

4. Major

In 2018, we performed a separate, basic human rights risk assessment, which continues to form the basis of our HR priorities together with our global engagement survey. In 2019, we performed our second annual global compliance risk self-assessment, which included human rights as a risk area.

The 2019 compliance risk assessment was carried out as a self-assessment structured around the 13 areas of Falck’s Code of Conduct. Risk scores are determined by selecting pre-defined answers to a number of practical questions related to the operations. The results from the 2019 risk assessment were compared with the results from the first compliance risk assessment carried out in 2018.

Impact

Risk and impact assessments are necessary to make our sustainability commitment operational as it allows us to understand the maturity of the organisation and where priorities and mitigating actions are needed.

3. Moderate

A compliance risk self-assessment enables us to define priorities and mitigating actions.

suggesting an inherently high-risk impact for bribery & corruption and competition compliance. Since 2018, we have implemented mitigating actions, including publishing a zero-tolerance statement and conducting face-to-face competition dawn-raid training of relevant employees. For the whistleblower system, reporting entities indicate that there remains a slight lack of trust in and awareness of the system, which has led to a negative assessment of how the system is perceived. In 2019, Falck launched the We Speak Up campaign to increase knowledge of Falck Alert, and this campaign will continue in 2020.

A E G J

F M

H K

2. Minor

Risk and impact assessment

1. Insignificant

Falck Sustainability Report 2019

1. Never

2. Rarely

3. Sometimes

4. Most of time

5. Always

Bribery & corruption

Facilitation payments

Gifts & hospitality

Conflicts of interest

Fraud

Competition compliance

Company assets & data protection

Working with business partners

Human rights

Occupational health and safety

Environment

Social investments

Whistleblower system

High

Likelihood 6

Falck Sustainability Report 2019

2.0 Our approach to sustainability

Sustainability dashboard Sustainability dashboard 2019

2018

2017

25.2

30.2

27.1

3.6

3.4

3.0

14.3

11.9

15.6

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

Management gender ratio (female/total) (%)4, 5

2/6

People Employee turnover1

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 2018, we have added KPIs relating to environment & climate, namely KPIs for fuel efficiency and CO2 emissions by our fleet. These numbers are, however, not available for 2017, as we implemented a new fleet management system in 2018-19. KPIs have not yet been defined for the focus area health, but are expected to be defined in 2020/21. Targets have not been added to the sustainability dashboard as our strategic direction within sustainability has not yet been defined, and as we continue to experience difficulties with data quality in some areas. We expect to add targets for all KPIs in 2020/21. The KPIs in the dashboard are elaborated upon in the applicable subsequent chapters. HR DATA QUALITY As referred to in the 2018 Sustainability Report, our HR data quality and validity is

unsatisfactory and therefore subject to a degree of uncertainty. We are in the process of changing our reporting system from a decentralised process to a more global process, and this large-scale change is taking longer than anticipated. However, the quality of our data has improved since 2018, and we do trust the overall trends.

Sickness absence2 Work-related accidents Lost time injury frequency (LTI)3 Diversity - gender

Women on BoD (female/total) (share)6 Employee engagement Response rate (%)

Overall employee satisfaction score

156,590

166,351

26,101

28,241

182,691

194,592

Environment & climate Kilometres driven (1000 km) Notes 1) Number of permanent employees resigned or terminated (due to reasons other than major contract loss or restructuring initiatives) as a percentage of the average number of employees in the year. 2) Total number of working hours lost due to sickness (hours paid for plus hours not paid for) as a percentage of total number of paid-for working hours. 3) Number of work-related employee accidents (incl. fatalities) resulting in one or more days of work lost due to the incident. Both permanent and on-call employees are included. The LTI frequency rate is calculated as number of LTIs per one million hours worked. 4) Excluding part-time firefighters 5) Managers defined as employees with people responsibility. 6) According to the Danish Financial Statements Act §99b, 40% of board members must be of the underrepresented gender. Two out of six members counts as 40%. 7) Ambulances, person transport vehicles 8) Trucks, vans, support vehicles 9) Excluding company cars 10) 75% diesel, 25% petrol (estimate) 11) Diesel 12) Number of reports per 100 employees

Ambulance7 Roadside assistance8 Total9 Fuel efficiency (litres/100 km) Ambulance

Roadside assistance

CO2 emissions (tonnes) Ambulance10 Roadside assistance11 Total

61,944

65,565

9,355

10,144

71,299

75,709

Trust Whistleblower system Number of reports

257

Reporting ratio12

0.88

0.20

0.10

Anonymous reports (%)

Falck Sustainability Report 2019

3.0 Health & well-being

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.

Ensure healthy lives and promote well-being for all at all ages SDG targets: 3.4, 3.8. 3.c

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 targets

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

Health and well-being is our business Falck is in the business of helping people in urgent need. We commit to providing high-quality 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 and value chains which we support. We are there when we are needed, and our highly skilled ambulance staff save lives and care 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 sooner and continue a healthy work life. Global Assistance transports people safely home when needed, and in Road Assistance

Falck in numbers Ambulance services

Our risks

Our actions

Inability to attract an adequate number of skilled employees. Unsatisfactory quality of services.

Strict quality management procedures. Continuous training of employees.

Patient transport services

1,800,000 4,000,000

Doctor’s home visits

1,400,000

Physiological treatments:

1,500,000

Psychological treatments:

230,000

and Industrial Fire Services, our dedicated staff prevent accidents and loss of life every day. In other words, health is in the heart of our business. It is also a part of our DNA, and our employees are proud to perform life-saving care for people. In our global engagement survey 2019, the global score to the question about “purpose” was 83 out of 100. That is six points higher than our external benchmark and shows an exceptional sense of pride in the work we do. This is also reflected in the fact that Falck employees globally perform voluntary first aid training, support the work of local communities within bystander resuscitation (CPR), teach accident prevention and much more. OPEN SOURCE APPROACH TO INNOVATION As a global provider of ambulance services, Falck wishes to contribute to the development of prehospital care through close partnerships with public healthcare players, local communities, patients, relatives and technology providers.

Falck Sustainability Report 2019

3.0 Health & well-being

Our business model Within the next few years, Falck intends to define shared value projects together with business partners, raising our level of ambition and making an impact on society beyond our own business. Through such projects we wish to explore new ways for prehospital care and exploit new technologies in a scalable way in order to enable more healthcare for less. We want to develop new solutions in collaboration with customers and the local communities in which we operate. And we wish to share our results with others, through an open source approach to innovation.

Key resources PEOPLE We rely on our more than 30,000 highly skilled and trained employees

Business units Ambulance

EQUIPMENT

• • • •

Emergency medical services Patient transport services Special event coverage Community healthcare

We use high-quality equipment enabling effective diagnostics and resolution

Road Assistance

PARTNERSHIPS

• Towing • Car service subscriptions

Healthcare

INNOVATIVE CULTURE

• Occupational healthcare • Private healthcare subscriptions

We deliver efficient operations and adapt our global models to meet local customer needs

A GREAT PLACE TO WORK

We utilise new technology and explore new ways of working

We benefit from a strong brand and a solid reputation for being effective, reliable and caring in everything we do

CARE AND SAFETY We save lives, treat and transport patients, support healthy workplaces and communities, save valuables and assist on the roads

EFFICIENT OPERATIONS

We partner with local communities to customise our global services to local needs

BRAND & REPUTATION

Value created

We offer challenging and purposeful work with opportunities for personal and professional development

SOCIETAL IMPACT

Portfolio Businesses • Fire services • Global assistance

We perform life-saving and lifeimproving care to people around the globe

SHAREHOLDER VALUE We deliver value to shareholders

Falck Sustainability Report 2019

3.0 Health & well-being

Skilled healthcare professionals

Our services are delivered by emergency response and healthcare professionals. We train our people in our own and customers’ concepts, we provide proper, high-quality equipment and we aim at keeping our skill sets at high professional standards. Operating contracts with local requirements, our strategies to ensure high-quality standards are developed entity by entity and often contract by contract. In the recent year, Falck Ambulance Denmark took another important step in developing its expertise to the highest

NEW MEDICAL STRATEGY AND MEDICAL DIRECTOR In Denmark, Falck developed a new medical strategy in 2019, supporting the professional development of ambulance personnel and the medical quality of our services. Among other things, we appointed a new medical director and developed a new training programme for ambulance instructors.

standards when developing a new medical strategy and training ambulance instructors how to create a productive learning environment with emphasis on feedback and reflection. Similar initiatives take place across Falck.

COPD PATIENTS TREATED IN THEIR HOMES In 2019, Falck and the Region of Southern Denmark concluded a pilot project concerning the treatment of patients with COPD (chronic obstructive pulmonary disease) in their homes through increased use of blood tests and ultrasound scanning performed by ambulance personnel. The results of the project are expected to be published in a number of scientific articles in 2020. A spin-off project is currently being performed concerning increased use of ultrasound scanning of patients with shortness of breath and/or chest pain.

Training of ambulance instructors in Denmark In 2019, Falck launched a new training programme for its ambulance instructors in Denmark. Ambulance instructors are paramedics/emergency medical technicians, who have taken on a role as instructors while continuing their shifts in ambulances. They are dedicated to helping develop the professional skills of their colleagues and play a critical part in ensuring that Falck can deliver prehospital training and healthcare services at a high, professional level. Ambulance instructors are expert teachers and healthcare professional role models, whose primary task is to create a productive learning environment for Falck’s ambulance

personnel with emphasis on feedback and reflection. Therefore, the Quality and Development team at Falck Denmark developed a new, internal training programme for instructors. The training runs over 11 days and consists of four modules. The content was developed based on surveys and focus group interviews with ambulance instructors. It centres around the five topics of scientific research and evidence, teaching methods, presentation skills, psychology and being a healthcare professional role model.

Falck Sustainability Report 2019

3.0 Health & well-being

Quality management and patient safety

Falck is committed to taking care of our patients. Therefore, patient safety and quality in our business is central to us. To ensure patient safety, we are committed to following strict quality management procedures across our business. We are in the process of implementing a fully operational, integrated Business Quality Management model, supported by our global enterprise management system and driven by the global Business Quality and Risk Management team. This will support Falck’s 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 centralised and standardised with focus on optimisation and continuous improvements across the Falck organisation. With the Business Quality Management model implemented across Falck, it will be a key business driver and competitive advantage, creating transparency, increasing knowledge-sharing and strengthening Falck’s role as a reliable and trustworthy business partner

through quality assurance which goes beyond the legal contract requirements. The Business Quality Management model also supports innovative medical services and the highest quality standards within medical practices, resulting in increased safety for patients. Falck is currently in the process of defining medical KPIs for parameters such as timeliness, cardiopulmonary resuscitation, medical compliance and serious adverse events. These KPIs will be part of our sustainability reporting going forward.

ISO

9001

18001

14001

ISO certifications Falck’s ISO landscape is complex and varies from country to country and from business unit to business unit. In order to streamline the certification process and create a better overview of global processes, we have introduced a global certification programme and the ownership of certifications has been transferred to Business Quality Management. By working with the standards in an integrated manner, we can achieve higher operating efficiency. We can detect and identify problems in due time, which means that we can quickly take steps to avoid the same mistakes in the future. Ambulance services are being certified under the ISO certification programme. Sweden, the UK, Spain and Denmark were certified in 2019. Ambulance services in Germany and Colombia are certified locally in ISO 9001 and will be integrated in the global certification programme. Industrial Fire Services is certified globally in ISO 9001, ISO 14001 and OHSAS 18001.

Falck Sustainability Report 2019

4.0 People

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

Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all SDG targets: 8.5, 8.7, 8.8

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. Their well-being is vital for a sustainable and profitable business.

Our targets

Fair pay, decent working conditions and equal treatment for all our people. An engaged, skilled and mentally and physically fit workforce.

Our risks

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

Our actions

Further improve reporting and data quality. Implementation of actions increasing engagement. Global health and safety focus. Continued focus on Falck as a diverse workplace.

An engaged workforce We want to be a great place to work for professionals within emergency response and healthcare. To support this goal, we conduct an annual, global engagement survey.

Being a great place to work is an ambition we take pride in. It is also an integral part of our strategy. An engaged workforce is more committed, better performing and delivers services at a higher level. To ensure a continued focus on employee engagement and to measure progress, we conducted our second, global engagement survey in 2019. Compared to 2018, almost all scores increased, while none decreased. The overall engagement score (eSat) improved by two points to 71 and is now close to the external benchmark of 72, which was our goal. The scoring on “Purpose” was exceptionally high, proving that Falck provides a purpose-driven and meaningful workplace for people who wish to save and improve lives. Deep-dives into “Leadership” and “Change capacity” confirm that we are working on the right global priorities but that we still have a way to go and that a continued and dedicated focus throughout 2020 is needed. Our am-

bition is to further increase the engagement score as well as the response rate in the years to come. LOCAL CHALLENGES REQUIRE LOCAL SOLUTIONS Engagement scores are local and show large variations from country to country, from unit to unit and from team to team, as engagement to a high degree is related to daily practice, experience and what matters locally. Therefore, the focus of the follow-up activities is to reinforce and support local actions. Leaders are required to work together with their teams to get results, creating concrete local action plans to tackle the issues. Within two months of the completion of the survey, all leadership teams in business units and countries must upload action plans, and within four months all teams must upload action plans, allowing them to meet the target for 2020 at local level. By enforcing this collective and dedicated effort throughout the organ12

Falck Sustainability Report 2019

4.0 People

isation, our aim is to go from numbers to action and to make working with engagement an integral part of working for Falck. One example comes from Spain, where a lack of team-feeling and motivation among dispatch workers was remedied through shared training sessions, giving staff an opportunity to voice own concerns and listen to colleagues. The eSat score increased by four points.

Another example comes from Ambulance Denmark, where the eSat score went up by four points and the response rate went up by 23 points following a dedicated effort that identified three main focus areas and defined action plans at national, regional and local levels.

Engagement survey

eSat Score = 71*

23,257 employees invited 24 questions

Engagement has increased or stabilised across all business units. 1/3 of all countries exceed the target of 72.

eSat: 71 (+2) Response rate: 63% (+2) Comments: 24,812 (+26%)

Large markets such as the US, the UK and Germany score low.

17 scores increased, 0 decreased

* eSat is our measurement on engagement

Turnover In 2019, overall employee turnover at Falck decreased by 5 points. While the turnover was still high, it was not unexpected as the company is currently going through a business transformation. However, the turnover number contains large variations between countries, business units and job types. In the US, for example, turnover among primarily frontline ambulance personel was as high as 39%, whereas turnover in Denmark was only 12%.

Turnover total

25.2 (30.2)

Purpose

Leadership

Score = 83

3 out of 5 would recommend their manager to others but 1 out of 5 respondents would not.

5% of all respondents answer 9 neutral or favourable to their work being meaningful to them.

Change capacity

Work-life balance

Change communication stands out with the lowest score. 1 out of 3 employees is dissat-

Turnover by country %

isfied with how communications are handled

when changes are made.

30%

34%

36%

30 25

Falck therefore works with turnover at a local level, in line with our engagement initiatives. We see it as business critical that we are able to retain and develop our key people.

87% 87% of all employees indicate that they can balance their work and personal life successfully.

Almost 1 out of 5 does not feel supported in their effort to adapt to organisational changes.

20 15 10 5

31%

0 US

Colombia

Germany Spain

52%

17%

Norway Denmark

Falck Sustainability Report 2019

4.0 People

Introducing our Winning Behaviours

Falck is a people business and a service company, and the way we behave is fundamental to our success as a company and a workplace. We want to create a culture where our behaviours win hearts and minds, and where there is clarity about what good looks like when it comes to how we interact. Behaviours that unite us across business units and countries. In 2019, Falck developed three Winning Behaviours describing how we act and interact. The Winning Behaviours not only describe how we act today but also define how we should act to become even stronger in the future. They give us clarity, direction and pride as we work together to save and improve lives. They act as a mental compass, set the direction across business units and countries and are the backbone of our global HR offerings, concepts and tools.

Our Winning Behaviours

We are committed to care

We build trust

Together, we create more value

People in need are at the heart of every decision we make, and we always strive to improve our competitive edge in offering excellent services to save and improve more lives.

Quality and ethics take priority in everything we do. We protect our license to operate by being transparent and living by high compliance standards.

We bring value to society and people in need by being there when they need us.

We respond fast and have what it takes to turn care into action. We care about what we do, who we work for, who we provide our services to and the people we work with.

We make no compromise when it comes to loyalty and consistency to earn and uphold the trust of our customers and society. We approach competition with a strong ethical compass. We are open and honest with our managers, our employees and each other. We are never afraid to speak up if Falck’s integrity is at stake.

We never settle to create value for shareholders. In doing so, we honour past investments in our business and allow for future funding in developing emergency response and healthcare services. We work efficiently together across functions, countries and business units to continuously improve our services and surpass ordinary standards which sets us apart from competition.

Falck Sustainability Report 2019

4.0 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 people put themselves at risk to save the lives of other people, fighting fires or driving ambulances at high speed. This produces stressful situations and may also influence the mental health of employees if not handled with professionalism and empathy. Defusings and debriefings after serious incidents form an integral part of work processes, and we offer professional psychological assistance whenever needed. In 2019, one colleague did not make it home from work following a collision, three patients died while under our care and two people died in collisions with ambulances. To us, every life is precious and every single one of these six fatalities is a daily reminder that safety must come first. Safety increased in importance over the recent year. Initiatives were carried out locally to counter a development like the one we saw. In 2020, we have made safety a global priority and added global expertise and resources. Data on fatalities and other health and safety related issues are being consol-

idated into our global quality management system, and global learnings and strategies are being developed to bring down the number of fatalities to zero and to improve health and safety across Falck. The Occupational Health and Safety Policy is an integral part of Falck’s Code of Conduct.

3.6 (3.4) sickness absence

During the past three years, sickness absence rates have remained stable at a relatively low level. Our focus going forward will be on keeping these levels low.

Leadership development programme The 2018 engagement survey proved that leadership is critical to supporting and building engagement, and that manager relationships are of crucial importance and represent a key lever for change. Strong leadership is a prerequisite for a successful organisation where people thrive. In order to increase engagement and performance in our organisation, we need leaders who communicate openly and transparently about decisions, leaders with a clear understanding of their mandate, and leaders who are aware of their role in shaping the Falck culture on a daily basis. In 2019, we therefore initiated a global leadership training programme, which will

lay the foundation for future leadership at Falck across business units and countries. The programme strengthens the leadership role, makes room for personal reflection and development while equipping and training our leaders in using concrete leadership tools and practices. The programme is first being rolled out to our frontline managers, who are the closest leaders to a large group of employees meeting our customers every day. We believe that the new leadership development programme will positively influence employee attraction, retention and engagement levels – and ultimately our financial results and customer experience.

14.3 (11.9) lost time injuries (LTI)

In 2019, lost time injury frequency at Falck increased by 20% compared to 2018.

Leading with care

Leading the business

Leading through trust 15

Falck Sustainability Report 2019

4.0 People

A diverse company promoting equal rights and opportunities Falck is committed to promoting diversity, fair and equal treatment and to avoid any kind of discrimination and harassment. We want to be an inclusive workplace for all employees regardless of age, gender, nationality, sexual orientation, political standpoint, religion or any other facet of personal identity. We work actively towards a balanced gender composition across the organisation and to increase the share of the underrepresented gender, in particular at management level. According to the Diversity and Inclusion Policy introduced in 2018, candidate pools for managerial positions must always include at least one candidate from the underrepresented gender.

EQUAL RIGHTS AND FAIR TREATMENT Equal rights and fair treatment require that all employees are treated and treat others with respect and dignity and can speak freely. A key indicator is the question in the global engagement survey concerning respect. 89% of Falck employees believe they are treated with respect and dignity in their work. That is three percentage points up from 2018 and indicates that we are on the right track. However, working with fundamental trust, compliance and leadership will continue to be a key focus area for us throughout 2020. DIVERSITY WITHIN AGE, TENURE AND GENDER In our monthly reporting, we monitor age, tenure and gender across business units and

Age distribution of Falck employees

countries. In analysing the data, we see a highly diversified picture.

cations etc.), the distribution is balanced at a 46/54 female/male ratio.

In terms of age, the majority of employees belong to Generation Y (1980-99) or Generation X (1965-79), which also represent the most active work groups in general. The data on tenure shows a balanced distribution with substantial numbers of employees in all work-experience groups.

The female/male ratio is almost the same among people managers (29/71) as within the entire workforce (31/69), and on the Executive Management team, the ratio is 3/5 after three women joined the team in 2019, namely Michala Fischer-Hansen, EVP Assistance, Annette Damgaard, SVP Healthcare and Elisabeth Milton, SVP Global HR.

In terms of gender, there are very clear variations across business units, reflecting business professions. For example, 91% of industrial firefighters are men, whereas 71% of jobs within Healthcare are held by women. In the global support functions (IT, Finance, HR, Communi-

Tenure with Falck

Gender distribution per business unit

100

40 20 0

Baby boomer (1946-64)

Generation X (1965-79)

Generation Y (1980-99)

Generation Z (after 1999)

Falck meets the criteria of the Danish Financial Statements Act concerning a balanced gender composition among members of the Board of Directors as two of the six shareholder-elected board members are women.

0-1 years

1-2 years

2-3 years

3-4 years

4-5 years

5-7 years

7+ years

Ambulance Male

Assistance

Healthcare

Industrial Fire Services

Global Functions

Global Assistance

Female 16

Falck Sustainability Report 2019

5.0 Environment & climate

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.

Our environmental and climate footprint 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 fuel consumption.

Take urgent action to combat climate change and its impacts. SDG targets: 13.2

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. With saving and improving lives being at the core of Falck’s ambition, we wish to mitigate the adverse impact our activities may have on communities.

Our targets

Falck supports environmental innovation and awareness so that we can find new ways to reduce our adverse impact, which among other things includes the fuel consumption of our fleet.

Our risks

Limited knowledge of environmental and climate impact. Low fuel efficiency and a high level of CO2 emissions. Low environmental and climate awareness among employees.

Our actions

Environmental impact assessment. Reporting on fuel consumption and CO2 emissions. Efficient route planning, modernisation of fleet, local green driving initiatives. Definition of shared value projects with strategic partners.

Falck commits to proactively seeking to identify and mitigate risks in all activities at all levels of the organisation which might have an adverse impact on the environment or the climate. It is our assessment that our greatest adverse impact derives from the fuel consumption of our vehicles. Therefore, in 2019 we started reporting on fuel consumption and corresponding CO2 emissions, and this is where we intend to focus our sustainability efforts and mitigating actions in the coming years. However, we realise that we also impact climate and the environment in other ways, e.g. through the energy consumption of our buildings, the production of our suppliers and the travels of our employees, cf. the scope 1-3 guidelines of the Greenhouse Gas Protocol Accounting and Reporting Standard. We will take this into account in a future analysis.

In 2018-19, we implemented a global fleet management system enabling us to operate and follow up on vehicle and fuel data and considerably increasing the reliability of our data. Also, we have introduced the following initiatives: • Efficient route planning • Modern vehicles • Alternative fuel types • Driving skills These initiatives are, however, only the humble beginnings of our mitigating actions and development projects within fuel consumption. Over the next few years, Falck intends to define shared value projects together with business partners, raising our level of ambition and making an impact on society beyond our own business. We expect one such project will concern electrifying our fleet or implementing any other alternative fuel that might prove most energy-efficient at the time. 17

Falck Sustainability Report 2019

5.0 Environment & climate

Increasing fuel efficiency and driving fewer kilometres

In 2019, Falck’s vehicles drove 195 million kilometres, corresponding to 250 times the distance to the moon and back. We take action at several levels to reduce the adverse impact of this activity: efficient route planning can shorten the distance driven by our ambulances and patient transport vehicles. In 201920, Falck is implementing a global dispatch system which will optimise our route planning, improve patient services and reduce fuel consumption by choosing the shortest journey when other requirements are met.

Alternative fuels emit less CO2 than fossil fuels. In 2019, Falck developed a first responder prototype (doctor’s car) Tesla X electric car with a fuel cell system for extra battery power supply, and ten Nissan NV-200 electric cars were added to the operation of patient transport services in Copenhagen. In Sweden, Falck drives hybrid gas/petrol ambulances for lower emission, supporting the national goal of an emissions-free Sweden by 2023. Hybrid gas/ petrol cars are also used for patient transport in Copenhagen.

Modern vehicles consume less fuel. In 2019, Falck selected strategic suppliers for ambulance and road assistance vehicles, and in 2019-20, 130 new roadside assistance trucks will be in operation with multiple mileagesaving features.

Driving skills and behaviour also influence fuel consumption, and Falck regularly runs local green driving campaigns in selected countries, including the use of telematics for improved driver behaviour and fuel savings.

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 2020/21, we will develop a separate policy for Environment, underlying the Code of Conduct.

In addition to the Code of Conduct, Falck holds a number of ISO certifications related to environmental sustainability, notably ISO 14001 (Environmental Management). These certifications apply to the Ambulance and Industrial Fire Services businesses.

ISO

14001

Falck Sustainability Report 2019

6.0 Trust

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.

Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels SDG targets: 16.5, 16.6

Why this is important to society

Corruption harms society and results in increasing costs, non-compliance, unfair competition and erosion of trust in governments.

Why this is important to Falck

Every day, we are expected to be there when we are needed, which 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 targets

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.

A trusted business partner Falck’s compliance strategy contributes to our ability to build trust and develop a culture of integrity embedded in the highest ethical standards.

The global compliance strategy, Leading Compliance 2020, ensures that compliance at Falck is simple, innovative and accessible to all employees, business partners and our communities. Compliance at Falck is driven by the overall aspiration of one global compliance platform, easily accessible, understandable and fitted to how employees today seek and

10 POLICIES UNDERLYING THE FALCK CODE OF CONDUCT 1. Bribery & corruption 2. Gifts & hospitality 3. Conflicts of interest 4. Fraud 5. Competition compliance

Our risks

Our actions

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

Further implementation of the Code of Conduct. Implementation of new One Compliance app. Follow up on global compliance risk assessment.

6. Company assets & data protection 7. Human rights 8. Occupational health & safety 9. Social investments 10. Whistleblower system

access information, from management and deskworkers to frontliners. In 2019, Falck introduced the One Compliance app, which consolidated the existing Code of Conduct app solution with the Falck Alert whistleblower system and will be the go-to resource for all Code of Conduct matters. The app introduces forms where employees must register all given or received gifts and hospitality along with the appropriate approval process. Employees must also use the app to register any personal interests that could potentially be perceived as or are a conflict of interest. With the app, Falck now has a centralised overview of all activities under the Code of Conduct and a framework within which all compliance activities can be integrated, providing for useful data analytics. Falck has published a zero-tolerance statement which applies to all employees at Falck. The statement reiterates Falck’s ambition to be at the forefront of ethical business practices, sets management’s tone in identifying ethical conduct as a non-negotiable priority 19

Falck Sustainability Report 2019

6.0 Trust

and defines strict compliance through ten principles. Any violation of the Code of Conduct or its underlying policies will undergo a structured and independent investigation process followed by appropriate remedial actions. In 2019, Falck also initiated an analysis to prepare a third-party screening process, which will be implemented in 2020. With a focus on automating a due diligence process, the programme will ensure that Falck only conducts business with third parties that live up to our ethical standards and applicable laws and regulations. The global compliance risk self-assessment conducted in 2019 indicated that the top three compliance risks continue to be bribery & corruption, competition compliance and misconduct reported through the whistleblower system. These areas will continue to be a central part of Falck’s compliance activities in 2020. The foundation of Falck’s compliance programme is now in place. In 2020, Falck will focus on further communicating our whistleblower reporting and no-retaliation policy, ensuring that the zero-tolerance statement becomes an integral part of our organisation globally, and on adequate implementation of all policies and procedures globally, with local support where needed.

WE BUILD TRUST An important part of Falck’s compliance approach is to ensure that compliance is easily understood by and accessible to all employees globally. While the One Compliance app provides the platform, Falck needs to ensure we have reached all employees appropriately. In 2019, Falck therefore initiated the We Build Trust campaign. The campaign focused on training all employees globally on the Code of Conduct and building trust within Falck as part of the cultural turnaround. Part of building this trust is to raise awareness and understanding around of the Code of Conduct, ensuring that everyone plays by the rules. 2019 marks the first year of the global Code of Conduct training programme, which will now continue to run annually for all desk workers and biennially for frontline employees. The training was carried out through either e-learning, a pdf document accessible in our global enterprise management system or face-to-face training. By end of 2019, 100% of desk workers in Falck’s core markets and 85% of frontline employees had completed the training. In 2020, Falck will push for the remaining employees to complete the training.

ZERO-TOLERANCE STATEMENT

MODERN SLAVERY ACT TRANSPARENCY STATEMENT In April 2019, Falck released its annual Modern Slavery Act Transparency Statement in which we highlight our review of existing policies as well as our expectations for the new Code of Conduct to better assess our human rights impact. Both statements are available at www.falck.com

1. At Falck, all employees are expected to behave ethically and to refer to the Code of Conduct for guidance on best ethical practice. 2. Falck does not tolerate unethical behaviour or violations of the Code of Conduct by any employee. 3. All employees are responsible for completing the Code of Conduct training and to comply with it at all times. 4. All employees are required to report any actual and/or suspected violations of the Code of Conduct to their manager or through Falck Alert. 5. Employees reporting on violations will be protected from retaliation. 6. S uspicions of violations will be investigated, and implicated employees must be treated in a fair and objective manner. 7. All employees involved in investigations must be treated equally, regardless of job title or level at Falck. 8. Violations of the Code of Conduct will result in disciplinary actions, such as re-training, reprimands, suspension or dismissal. 9. I ntentional violations of the Code of Conduct will result in immediate dismissal. 10. Two written reprimands will result in dismissal.

Falck Sustainability Report 2019

6.0 Trust

Increasing trust in our whistleblower system Falck’s whistleblower system was introduced in late 2018, and in 2019 it was integrated in the One Compliance app. The way in which users report incidents has not changed. All Falck employees, business partners and third parties can still use Falck Alert 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. The app is available for all smartphones and as a desktop version. Falck continued encouraging employees to raise concerns through the We Speak Up

campaign, through which Falck promoted a culture of full transparency to create more trust in the whistleblower system. Statistics on Falck Alert reports were published along with anonymised outcomes of cases and a video showing the process of reporting. After the roll out of the We Build Trust and We Speak Up campaigns, Falck Alert saw an overall increase in cases reported and a decrease in the number of cases made anonymously. The number of reports received via Falck Alert in 2019 had increased sevenfold since it was reintroduced in 2017. In 2019,

Falck received 257 reports, compared to 32 reports in 2017. Falck continues to encourage employees to use the system so that concerns can be investigated appropriately and objectively. In 2019, 53% of all reports in Falck Alert were made anonymously compared with 77% in 2018. With a global best practice benchmark at 56%, we have managed to reach the best practice target in two years, focusing on building trust among our employees, customers and society. The reduction in anonymous cases is an indication that employees trust

Number of reports received

Number of reports per 100 employees %

300

2.50

100

240

2.00

180

1.50

120

1.00

0.50

2016

2018

2019

2017

Despite the decrease in anonymous cases, Falck still aims to further build on the culture of trust within the organisation. In 2020, Falck will continue to regularly publish the Falck Alert statistics, containing number of reports, anonymous vs. named, types of cases and reporting countries and focus on telling the stories in order to demystify the perception of whistleblower reports. Increasing transparency will build more trust in the system.

Share of anonymous reports

0.00

2017

the system and know they can use it without fear of retaliation.

2018

2019

Best practice

2017

2018

2019

Best practice

Falck Sustainability Report 2019

6.0 Trust

Competition case and self-cleaning programme Ruling from the Danish Competition Authorities On 30 January 2019, Falck received a ruling from the Danish Competition Council for having violated the Danish competition rules in 2014-15 in connection with the award and transfer of the ambulance operation contract in the Region of Southern Denmark to a new provider (BIOS). Falck decided to accept the ruling. SELF-CLEANING PROGRAMME Following the ruling, Falck initiated a comprehensive “self-cleaning programme” to ensure transparency and a zero-tolerance and speak-up culture on ethics. The self-cleaning programme aimed to: 1. Compensate parties that had suffered losses resulting from the conduct of Falck that led to the ruling of the Competition Council. 2. Carry out an internal review to identify and deal with past or present violations of Falck’s Code of Conduct.

3. A pply a zero-tolerance approach to ensure that quality and ethics always take priority at Falck.

settlement agreement, the parties waived any further claims, and all litigations between the parties were withdrawn.

The self-cleaning programme was built on initiatives taken from 2016 onwards and aimed at building a stronger, transparent and compliant Falck. Initiatives included establishing a new executive management team and a top 30 executives group as well as a global compliance function, reintroducing the Code of Conduct and whistleblower system, an integrated operating model supported by global functions and clearer processes as well taking full ownership of entities in Latin America, Slovakia and Australia and making a number of divestments.

In December 2019, Falck received a fine from SØIK (the State Prosecutor for Serious Economic and International Crime) of DKK 30 million. When setting the size of the fine, SØIK emphasised that Falck has collaborated with the authorities in the investigation and that Falck has compensated for losses related to the case. The fine was paid in early January 2020.

1. SETTLEMENT AGREEMENT WITH ALL PARTIES On 24 June 2019, Falck reached a settlement agreement regarding the payment of compensation for losses resulting from the acts which had led to the ruling of the Danish Competition Council. The settlement was made between Falck, the Region of Southern Denmark, the Dutch owners of BIOS and the bankruptcy estate of BIOS in Denmark. Falck agreed to compensate the parties with a total amount of DKK 152.5 million. With the

2. I NTERNAL REVIEW CONCLUDED In the spring and summer of 2019, Falck carried out an internal review of its business together with external experts. The review covered the years 2004-19 and aimed at identifying any past and present violations of Falck’s Code of Conduct that Falck’s management was not aware of. Based on reporting from Falck’s whistleblower system, business assurance visits, risk reporting, ethics and compliance reporting as well as input from Falck’s new management and other stakeholders, potential topics of concern were identified. This led to a fact-finding exercise that included 3.8 million

documents from e-mail accounts and network drives of current and former employees as well as interviews with employees and other stakeholders. The review uncovered issues related to partnerships, conflicts of interest and instances of local management not acting in the best interest of the company, giving Falck a finite list of issues to address and actions to be completed. Most issues had already been dealt with, while others were dealt with after the review. Actions taken included re-training, reprimands and dismissal of employees as well as changes in the ownership structure and governance of entities. 3. ZERO-TOLERANCE APPROACH ADOPTED In the spring of 2019, Falck launched the We Build Trust campaign with increased focus on and global online training in the Code of Conduct, increased awareness about the whistleblower system and the adoption of a zero-tolerance approach towards breaches of the Code of Conduct. A zero-tolerance statement was published, reiterating that violations of the Code of Conduct would not be tolerated and that all reports or suspicions of violations would be swiftly and objectively investigated. 22

Falck Sustainability Report 2019

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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 2019