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THE CLIMATE CRISIS IS A HEALTH CRISIS

We all know global warming has devastating effects on the planet and on human health.1  Governments, NGOs, international organisations and citizen groups are calling for urgent, pervasive change.

Many corporates are joining the movement, responding with bold and far-reaching sustainability announcements. Their commitments talk passionately about reducing the carbon footprint of operations, people and products and many promise to also uphold quality, access and safety for consumers and end users.

But are these words enough?

We invite accountability.

Behind the words…

We’ve looked at what the terms used really mean.2

“Net zero”

In 2021, the Science Based Targets initiative (SBTi) developed the first global science-based standard for companies to set net zero targets by:3

  • Reducing scope 1, 2, and 3 emissions to zero or to a residual level that is consistent with reaching net-zero emissions at the global or sector level in eligible 1.5°C-aligned pathways.
  • Neutralizing any residual emissions at the net-zero target year and any GHG emissions released into the atmosphere thereafter.

“Carbon neutral”

Net Zero specifies the percentage of emissions reductions required whilst “carbon neutral” can be reached by offsetting emissions.

“Climate neutral”

Reducing greenhouse gas (GHG) and all other radiative emissions forcing to have no net effect on the climate system. This has been defined by the UN’s IPCC but there are no criteria or measurements yet.

Sustainability commitments stand or fall based on the actions taken to reach the goal. If these actions are not independently verified by international standards, the commitments themselves are just words.

As a B Corp, Chiesi is serious about behaviour change. We believe protecting patient health and the environment should not be a matter of compromise. We will not only reduce our environmental footprint by managing our operations but by rethinking and innovating our products – for the benefit of patients, people and planet.

With the decision to change our legal status to a Benefit Corporation,15 Chiesi has made sustainability contractual and legally binding, by incorporating a double purpose for the creation of shared value, and therefore to generate value for its business, for society and the environment.

Moreover: by achieving B Corp certification,12 measuring and reporting both its positive and negative impact transparently and amplifying it throughout our value chain through the Code of Interdependence13, Chiesi is going far beyond carbon reduction.

In March 2021, Chiesi joined the B Corp Climate Collective (BCCC), committing to the United Nations Framework Convention on Climate Change (UNFCCC) “Race to Zero.” This is a global campaign to rally leadership and support from businesses, cities, regions, investors for a greener future. The objective is to build momentum around the shift to a decarbonised economy.

In June 2022, Chiesi signed the White House Climate Pledge to decarbonize the healthcare sector in US and reduce greenhouse gas emissions 50% by 2030.

We are proud to have taken decisive and ambitious action to ensure patients can continue to access the therapeutic options that best suit their needs, whilst simultaneously innovating our production to find the most environmentally-conscious solution available.14 We strongly believe that patients should not have to shoulder the burden of environmental responsibility when considering treatment options that affect their health.

We consider our sustainability journey as an ongoing process, we are always improving and setting tougher goals.15

In May 2021, Chiesi unveiled its plan to become carbon neutral, the most ambitious science-based standard at the time. Our carbon neutrality strategy already has a strong focus on emissions reduction so this feels like a natural evolution of our existing plans.

We have a clear action plan to reduce our emissions where possible: our mitigation strategy focusses on avoiding and reducing carbon-intensive processes so that we can reach our targets  without the need for significantemissions removals. As set out by the SBTi, an overreliance on carbon offsets creates multiple problems around land use, equity, fairness and climate justice.16Their net-zero standard focusses on significant emissions reductions of at least 90%, leaving a small proportion which can be accounted for via emission neutralization. It’s a bold and ambitious plan we can believe in.

Breaking down Chiesi’s commitment and progress

Products and Patient Use

In 2019, Chiesi was the first pharmaceutical company to publicly announce a solution to address the carbon footprint of pressurized metered dose inhalers (pMDIs) while continuing to invest in dry powder inhaler (DPI) technology to provide the full range of therapeutic options that patients need. The first carbon minimal pMDI containing a low global warming potential (GWP) propellant, the HFA-152a in development by Koura, will be developed by 2025 ensuring a 90% carbon footprint reduction. Chiesi is actively investing €350M to fast-track development and bring this innovative solution to market.

In 2021 Chiesi plans to adopt 100% use of Forest Stewardship Council (FSC) paper for all the secondary packaging boxes.

With the aim of developing products that are sustainable by design, the Life Cycle Perspective (LCP) was launched in 2019 and extends to all products in R&D in 2020. LCP will continue to be implemented in the direction of creating a sustainable, future-fit R&D process where sustainability is integrated from the very start through (green) design. By collecting inputs from the different development phases, the LCP tool enables informed choices through the measurement of the sustainability profile of each product. The tool analyses four main areas – chemistry, design and materials, natural resources and ethics – by providing a synthetic score for each area. The tool will also be applied to the products already on the market to further explore life cycle management opportunities to improve their sustainability profile.

Human Transportation

Chiesi developed a “Human Transportation Policy” along three key streams: Business Travel, Commuting and Car Fleet.

  • Business Travel: Chiesi aims to limit Business Travel to what is strictly necessary. Traveling could be replaced by digital meetings, using all the available technological options. When traveling is still necessary, Chiesi supports more sustainable travel options (train instead of flight, i.e.).
  • Commuting: The aim is to facilitate the use of means of transportation alternative to private car, fostering cycling or the use of public transport. In Italy, by activating free bus subscription and the Company Shuttle, which from Railway Station to Chiesi’s sites, transports the colleagues coming in Parma by train and using the Jojob App, which rewards sustainable commuting.
  • Car Fleet: We have put in place a global project for the electrification of the car fleet that relies on new technologies and involves selected partners. In Italy, the electrification project of our Sites is almost completed and the replacement of fossil fuel cars with plug-in hybrid or electric cars is following the foreseen steps.We are introducing home charging points and increasing training and education opportunities for our employees on sustainable driving.

Buildings and industrial operations

Better Building Program is a project focused on improving the sustainability performance of Chiesi sites. The starting point of this program is a Sustainability Assessment, which evaluates the sustainability impact of our existing buildings in terms of people welfare, mobility policies, waste management, energy and water consumption. This assessment is a benchmark with other companies both locally and internationally and it aims to measure Chiesi buildings using a common metric in order to evaluate if the minimum requirements for a LEED certification are met.

LEED Certification: in 2020, the new headquarter has been awarded the highest-level LEED Platinum for new building design and construction protocol. The Research Center has been awarded the LEED Gold for Existing building and operation maintenance (EB:OM) protocol.

The Research center in Parma has been awarded LEED EB:OM certification.

This effort has gradually scaled up to all our affiliates, with the aim of reaching and connecting all our sites.

In 2021, three sites are undergoing the path to be LEED standard certified: Fontevivo logistics site (Italy), Pilotis building (Italy), Blois manufacturing site (France). There are an additional four projects under alignment with Chiesi internal standards: Shanghai new location (China), new Biotech facility (Italy), new packaging department (Italy), and Stability Hub (Italy). Six sites are supported in applying Green Operating Guidelines.

Propellant capture (industrial operations): an abatement system has been installed in Parma and Blois manufacturing sites in 2020 and it is operating since the beginning of 2021 in both sites. This system is able to condensate the propellant losses in the spray test phase (both in Parma and Blois) and in the filling phase (in Blois only). The propellant recovered is then sent to a high temperature incinerator that safely and effectively destroys it.

Emissions removal

The climate crisis is confronting us with urgent and dramatic choices. Reducing emissions is an immediate and fundamental commitment that all businesses need to take on to avoid the average global temperature to increase beyond 1.5 degrees.

However, this will not be enough if we do not also capture the CO2 that is already in the atmosphere. Chlorophyll photosynthesis remains the best technology for CO2 removal – in order words: trees. During the G20 meeting that took place in November 2021, the participating countries committed to planting 1,000 billion trees.

Although these initiatives correctly cannot be included in the SBTi objectives, Chiesi intends to do its part by developing important projects regarding the planting of trees.

An example of this commitment is the not-for-profit Forestry Consortium KilometroVerdeParma (‘Green Kilometer Parma’), a project of urban and suburban reforestation in the province of Parma. Thanks to the involvement of all social groups, as well as citizens, students, companies, public administration, associations and landowners, the Consortium aims to create permanent forests which, while capturing CO2, could also positively impact climate change that is already underway. This would help improve air quality; mitigate heatwaves and urban heat; promote better water management and the societal appreciation of green areas; and raise awareness within the whole community on protecting and taking care of the environment. The Consortium, which was founded in 2020, has already led to 45,000 trees being planted. Having contributed to more than 10,000 trees planted, Chiesi, one of the co-founders, is actively supporting the project to maximise these reforestation initiatives.

Energy

Energy purchasing (upstream): Electricity is purchased according to sustainable models accredited by the reference bodies and 86.7% comes from renewable energy sources. The possibility of purchasing biofuels will be implemented as soon as their use on an industrial scale is ready.

In 2020 – 2021 indirect emissions decreased due to an increase in the sourcing of renewable energy, which now amounts to 37% of our total energy consumption. Currently, 100% of the electricity consumed by Italian sites and manufacturing sites is renewable (approximately 3% produced on-site by photovoltaic systems) and of high quality, as it comes from low impact sources (in particular wind) and from specific new plants (grid connection less than 5 years).

The models under evaluation for future purchases of electricity are characterized by a greater additionality in terms of support to the ecological transition and to Renewable Energy development (Power Purchase Agreement or Direct CAPEX with Carbon Credit creation), guaranteeing flexibility and responsiveness.

Energy usage (downstream): Attention to energy consumption and the drive for continuous improvement of energy performances will be guaranteed by Energy Management System, certified according to the highest international standard, ISO 50001:2018 which require timely and precise monitoring in all phases of the plant’s life and periodically reviewing improvement plans.

We are looking into innovative ways to switch from fossil fuels, such as natural gas, to electricity from renewable sources for our heating and process requirements.

Supply Chain and Logistics

Chiesi’s Code of Interdependence is a co-created Code of Conduct for Chiesi suppliers developed in 2019 with our strategic partners. It aims to restructure the relationship between Chiesi and its suppliers in a shared value perspective. The Code is based on the principles of the B Corp movement, but also those of the Pharmaceutical Supply Chain Initiative (PSCI), the International Labour Organization (ILO), and the 2030 Agenda for Sustainable Development. With this Code, we define shared guidelines and require every part of Chiesi’s Value Chain to adhere to a common set of principles to achieve a more sustainable and inclusive business model.

From 2020, a specific contractual clause dedicated to the Code of Interdependence acceptance and inspiration has been included at Group level in all our new third-party agreements.

In 2022, the Code of Interdependence was revised to include two new SDGs, now reaching a total number of 11 SDGs, in total. These new additions include UN SDG #5 Gender Equality, and UN SDG #11 Sustainable Cities and Communities. Despite the challenge of incorporating such a large number of SDGs into the Code, by doing so, we ensure we are always pushing the boundaries further, to deepen our impact while guiding and supporting our suppliers to do the same. Several partners of ours have been inspired to follow our lead to start the process of B Corp certification.

We designed the Logistics Impact Meter, a tool to assess the effects on the environment, people and communities of all actors in logistics and distribution operations and refers to best practices and innovative solutions available. Thanks to LIM we mapped our logistic network and identified the parameters that determine the impact of each actor (warehouses, hub, transit points). Through the involvement of the Group affiliates in the sustainability journey, with the aim to find the best sustainable solutions for our supply chain, we are evaluating logistics partners and looking for optimizations with the final target to reduce our GHG emissions.

Products and Patient Use

In 2019, Chiesi was the first pharmaceutical company to publicly announce a solution to address the carbon footprint of pressurized metered dose inhalers (pMDIs) while continuing to invest in dry powder inhaler (DPI) technology to provide the full range of therapeutic options that patients need. The first carbon minimal pMDI containing a low global warming potential (GWP) propellant, the HFA-152a in development by Koura, will be developed by 2025 ensuring a 90% carbon footprint reduction. Chiesi is actively investing €350M to fast-track development and bring this innovative solution to market.

In 2021 Chiesi plans to adopt 100% use of Forest Stewardship Council (FSC) paper for all the secondary packaging boxes.

With the aim of developing products that are sustainable by design, the Life Cycle Perspective (LCP) was launched in 2019 and extends to all products in R&D in 2020. LCP will continue to be implemented in the direction of creating a sustainable, future-fit R&D process where sustainability is integrated from the very start through (green) design. By collecting inputs from the different development phases, the LCP tool enables informed choices through the measurement of the sustainability profile of each product. The tool analyses four main areas – chemistry, design and materials, natural resources and ethics – by providing a synthetic score for each area. The tool will also be applied to the products already on the market to further explore life cycle management opportunities to improve their sustainability profile.

Human Transportation

Chiesi developed a “Human Transportation Policy” along three key streams: Business Travel, Commuting and Car Fleet.

  • Business Travel: Chiesi aims to limit Business Travel to what is strictly necessary. Traveling could be replaced by digital meetings, using all the available technological options. When traveling is still necessary, Chiesi supports more sustainable travel options (train instead of flight, i.e.).
  • Commuting: The aim is to facilitate the use of means of transportation alternative to private car, fostering cycling or the use of public transport. In Italy, by activating free bus subscription and the Company Shuttle, which from Railway Station to Chiesi’s sites, transports the colleagues coming in Parma by train and using the Jojob App, which rewards sustainable commuting.
  • Car Fleet: We have put in place a global project for the electrification of the car fleet that relies on new technologies and involves selected partners. In Italy, the electrification project of our Sites is almost completed and the replacement of fossil fuel cars with plug-in hybrid or electric cars is following the foreseen steps.We are introducing home charging points and increasing training and education opportunities for our employees on sustainable driving.

Buildings and industrial operations

Better Building Program is a project focused on improving the sustainability performance of Chiesi sites. The starting point of this program is a Sustainability Assessment, which evaluates the sustainability impact of our existing buildings in terms of people welfare, mobility policies, waste management, energy and water consumption. This assessment is a benchmark with other companies both locally and internationally and it aims to measure Chiesi buildings using a common metric in order to evaluate if the minimum requirements for a LEED certification are met.

LEED Certification: in 2020, the new headquarter has been awarded the highest-level LEED Platinum for new building design and construction protocol. The Research Center has been awarded the LEED Gold for Existing building and operation maintenance (EB:OM) protocol.

The Research center in Parma has been awarded LEED EB:OM certification.

This effort has gradually scaled up to all our affiliates, with the aim of reaching and connecting all our sites.

In 2021, three sites are undergoing the path to be LEED standard certified: Fontevivo logistics site (Italy), Pilotis building (Italy), Blois manufacturing site (France). There are an additional four projects under alignment with Chiesi internal standards: Shanghai new location (China), new Biotech facility (Italy), new packaging department (Italy), and Stability Hub (Italy). Six sites are supported in applying Green Operating Guidelines.

Propellant capture (industrial operations): an abatement system has been installed in Parma and Blois manufacturing sites in 2020 and it is operating since the beginning of 2021 in both sites. This system is able to condensate the propellant losses in the spray test phase (both in Parma and Blois) and in the filling phase (in Blois only). The propellant recovered is then sent to a high temperature incinerator that safely and effectively destroys it.

Emissions removal

The climate crisis is confronting us with urgent and dramatic choices. Reducing emissions is an immediate and fundamental commitment that all businesses need to take on to avoid the average global temperature to increase beyond 1.5 degrees.

However, this will not be enough if we do not also capture the CO2 that is already in the atmosphere. Chlorophyll photosynthesis remains the best technology for CO2 removal – in order words: trees. During the G20 meeting that took place in November 2021, the participating countries committed to planting 1,000 billion trees.

Although these initiatives correctly cannot be included in the SBTi objectives, Chiesi intends to do its part by developing important projects regarding the planting of trees.

An example of this commitment is the not-for-profit Forestry Consortium KilometroVerdeParma (‘Green Kilometer Parma’), a project of urban and suburban reforestation in the province of Parma. Thanks to the involvement of all social groups, as well as citizens, students, companies, public administration, associations and landowners, the Consortium aims to create permanent forests which, while capturing CO2, could also positively impact climate change that is already underway. This would help improve air quality; mitigate heatwaves and urban heat; promote better water management and the societal appreciation of green areas; and raise awareness within the whole community on protecting and taking care of the environment. The Consortium, which was founded in 2020, has already led to 45,000 trees being planted. Having contributed to more than 10,000 trees planted, Chiesi, one of the co-founders, is actively supporting the project to maximise these reforestation initiatives.

Energy

Energy purchasing (upstream): Electricity is purchased according to sustainable models accredited by the reference bodies and 86.7% comes from renewable energy sources. The possibility of purchasing biofuels will be implemented as soon as their use on an industrial scale is ready.

In 2020 – 2021 indirect emissions decreased due to an increase in the sourcing of renewable energy, which now amounts to 37% of our total energy consumption. Currently, 100% of the electricity consumed by Italian sites and manufacturing sites is renewable (approximately 3% produced on-site by photovoltaic systems) and of high quality, as it comes from low impact sources (in particular wind) and from specific new plants (grid connection less than 5 years).

The models under evaluation for future purchases of electricity are characterized by a greater additionality in terms of support to the ecological transition and to Renewable Energy development (Power Purchase Agreement or Direct CAPEX with Carbon Credit creation), guaranteeing flexibility and responsiveness.

Energy usage (downstream): Attention to energy consumption and the drive for continuous improvement of energy performances will be guaranteed by Energy Management System, certified according to the highest international standard, ISO 50001:2018 which require timely and precise monitoring in all phases of the plant’s life and periodically reviewing improvement plans.

We are looking into innovative ways to switch from fossil fuels, such as natural gas, to electricity from renewable sources for our heating and process requirements.

Supply Chain and Logistics

Chiesi’s Code of Interdependence is a co-created Code of Conduct for Chiesi suppliers developed in 2019 with our strategic partners. It aims to restructure the relationship between Chiesi and its suppliers in a shared value perspective. The Code is based on the principles of the B Corp movement, but also those of the Pharmaceutical Supply Chain Initiative (PSCI), the International Labour Organization (ILO), and the 2030 Agenda for Sustainable Development. With this Code, we define shared guidelines and require every part of Chiesi’s Value Chain to adhere to a common set of principles to achieve a more sustainable and inclusive business model.

From 2020, a specific contractual clause dedicated to the Code of Interdependence acceptance and inspiration has been included at Group level in all our new third-party agreements.

In 2022, the Code of Interdependence was revised to include two new SDGs, now reaching a total number of 11 SDGs, in total. These new additions include UN SDG #5 Gender Equality, and UN SDG #11 Sustainable Cities and Communities. Despite the challenge of incorporating such a large number of SDGs into the Code, by doing so, we ensure we are always pushing the boundaries further, to deepen our impact while guiding and supporting our suppliers to do the same. Several partners of ours have been inspired to follow our lead to start the process of B Corp certification.

We designed the Logistics Impact Meter, a tool to assess the effects on the environment, people and communities of all actors in logistics and distribution operations and refers to best practices and innovative solutions available. Thanks to LIM we mapped our logistic network and identified the parameters that determine the impact of each actor (warehouses, hub, transit points). Through the involvement of the Group affiliates in the sustainability journey, with the aim to find the best sustainable solutions for our supply chain, we are evaluating logistics partners and looking for optimizations with the final target to reduce our GHG emissions.

We are committed to becoming net zero by 2030 on direct emissions and emissions coming from purchased electricity and heat and by 2035 on emissions in our value chain. We have done our homework and know how we will hit our targets and when we will make this happen. We are working hard to make this goal even more ambitious so that we can achieve net zero emissions.

For us, the path to net zero is one which starts with real-world action across every element of the business. As a B-Corp and Benefit Corporation we are committed to sharing our goals, our progress and our enthusiasm for action with our peers, wherever we meet them. Our ideas start with getting rid of the concept of business as usual; there is no room for normal if we are to change the world.

It’s why we already share our progress, and will continue to do so until we meet our goals.17

Do you dare to share?

“Climate change and its impact on lung health: a focus on Europe,” The Economist Intelligence Unit

https://eiuperspectives.economist.com/healthcare/climate-change-and-its-impact-lung-health-focus-europe

Several studies show the impact of climate change on health issues – especially respiratory – and of the use of some medication on carbon footprint:

Climate change: challenges and opportunities for global health. Patz JA, Frumkin H, Holloway T, Vimont DJ, Haines A. JAMA. 2014 Oct 15;312(15):1565-80. doi: 10.1001/jama.2014.13186.

Climate change and respiratory diseases: a 2020 perspective. Joshi M, Goraya H, Joshi A, Bartter T. Curr Opin Pulm Med. 2020 Mar;26(2):119-127.

New data show overuse of reliever medication in asthma is responsible for 250,000 tonnes of greenhouse gas emissions every year in the UK, Astra Zeneca. M2 PressWIRE. 2021 Feb.

The Science-based Targets Initiative, “Foundations For Science-based Net-Zero Target Setting in the Corporate Sector”

www.sciencebasedtargets.org

The Science-based Targets Initiative, “The Net Zero Standard”

https://sciencebasedtargets.org/resources/files/Net-Zero-Standard.pdf

British Standards Institution, “PAS 2060 Carbon Neutrality”

www.bsigroup.com

Certified Carbon Neutral Global Standard, “The Carbon Neutral Protocol January 2021”

www.carbonneutral.com

Chiesi Group, Annual & Sustainability Report

www.chiesireport.com

The Science-based Targets Initiative, “How it works”

www.sciencebasedtargets.org

United Nations Framework Convention on Climate Change, “The Paris Agreement”

www.unfccc.int

British Standards Institution, “PAS 2060 Carbon Neutrality”

www.bsigroup.com

Carbon Disclosure Project

www.cdp.net

British Standards Institution, “PAS 2060 Carbon Neutrality”

www.bsigroup.com

In December 2018, Chiesi changed its structure and by-laws, adopting the new legal status of Benefit Corporation, introduced in Italy and in the United States.

Being a B Corp means meeting the highest standards of verified social and environmental performance, transparency and accountability.

B Corporation, “B Corp Directory: Chiesi Group”
www.bcorporation.net

Chiesi requires every part of its value chain to fulfil certain environmental and social standards. With our suppliers, we co-created the first SDG-enabled Code of Conduct to define shared guidelines – also called “Code of Interdependence”. We involved about 70 of our strategic supply partners to design this code of conduct to create a sustainable ecosystem.

Chiesi Group, “Code of Interdependence”

www.chiesi.com

In 2019, Chiesi was the first pharmaceutical company to publicly announce a solution to address the carbon footprint of pressurised metered dose inhalers (pMDIs) while continuing to invest in DPI technology to provide the range of therapeutic treatment options that patients suffering from asthma and chronic obstructive respiratory disease (COPD) need.

Chiesi Group, “Chiesi outlines €350 million investment and announces first carbon minimal pressurised Metered Dose Inhaler (pMDI) for Asthma and COPD”

www.chiesi.com

In March 2021, Chiesi joined the initiative from the UNFCCC “Race To Zero”.

In June 2022, Chiesi signed the White House Climate Pledge. The White House: Health sector leaders join Biden administration pledge to reduce greenhouse gas emissions 50% by 2030. https://www.whitehouse.gov/briefing-room/statements-releases/2022/06/30/fact-sheet-health-sector-leaders-join-biden-administrations-pledge-to-reduce-greenhouse-gas-emissions-50-by-2030/

https://sciencebasedtargets.org/blog/science-based-net-zero-targets-less-net-more-zero

Chiesi has an Impact Committee dedicated to the monitoring and management of purposes of common benefit.

In 2018, Chiesi launched the program “We ACT – We actively Care for Tomorrow” showing the expression of Chiesi’s commitments towards sustainability.

Chiesi Group, “We Act Sustainability Manifesto”
www.chiesi.com

Chiesi publishes its sustainability report annually.

Chiesi Group, “Sustainability Report”
www.chiesi.com

Chiesi also contributes to the Sustainable Developments Goals (SDGs) set up by the United Nations in 2015 and measures its impact through the SDG Action Manager.

United Nations Global Compact, “SDG Action Manager”
www.unglobalcompact.org