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TAG overview

To understand which social, economic and environmental issues matter most to our stakeholders and to our long-term business success, we conduct an annual materiality analysis. This also enables us to meet the applicable reporting requirements of the Global Reporting Initiative (GRI) and the German CSR Directive Implementation Act.

Material issues updated and validated

Conducting materiality assessments helps us define and verify key topics for our sustainability management and for the contents of our report. We conducted our last comprehensive analysis in 2018, which reflected the requirements and expectations that our stakeholders place on us. In 2019 and 2020, we built on this approach and extended the analysis to include even more and impact factors. In 2020, the materiality analysis therefore included:

  • Relevant regulations
  • Goals and positions of our competitors
  • Requirements imposed by investor ratings
  • Expectations that non-governmental organizations (NGOs) express towards the chemical and pharmaceutical industries
  • The relevance of sustainability topics to our economic environment
  • Media resonance
  • Issues that are relevant to our clients’ industries (new in 2020)
  • Issues that matter to our employees (new in 2020).

The analysis also includes the ways in which our industries, value chain and sites impact sustainable development.

Materiality process

Materiality process (Graphic)

Results of the update

The 35 topics identified as being significant to our sustainability management and reporting did not change relative to the 2019 analysis. The results changed minimally because employees and client industries were incorporated into the analysis, but this impacted neither the reporting framework nor the contents.

We disclose information on our tax governance for the first time in this report. This topic has not yet been defined as one of our material topics, but we expect it to gain more relevance for our reporting audience in the future.

Material topics

Material topics (Graphic)
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Health for all

Part of the non-financial report

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Ethical conduct

Part of the non-financial report

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Technology

Part of the non-financial report

  • Most important
  • Very important
  • Important

Topics for the non-financial report

The German CSR Directive Implementation Act obliges us to review the double materiality of topics according to section 289c (3) of the German Commercial Code. The principle of double materiality requires companies to disclose non-financial information when the following two criteria are met: Firstly, the information is necessary to understand the company’s business performance, business results and financial situation and secondly, the information makes it possible to understand how the company’s business activities affect non-financial aspects.

In 2020, we again reviewed the double materiality of the identified topics. We extended the review methodology and evaluated the following factors:

  • Significant impact on expenses and income
  • Significant impact on cash flow
  • Impact on reputation
  • Regulatory requirements
  • Impact on the business model/future business areas/R&D.

This year, for the first time, the topics of “Supply chain standards”, “Energy efficiency and renewable energies” and “” reached the double materiality threshold and are therefore included in the non-financial report. Topics that were included in the non-financial report in 2019 are also included this year. Topics that fall within the scope of the double materiality definition are marked in the materiality matrix and linked to the respective chapters in this report.

Material issues in our value chain

The following table shows where our material issues fall within the value chain: upstream in our supply chain, in the course of activities within our own business sectors or downstream with our customers and patients. Moreover, we listed the issues to show the breakdown of materiality by stakeholder groups.

 

Breakdown of materiality (Graphic)

ACTIVITIES OF Merck KGaA, Darmstadt, Germany
Upstream activities
Healthcare
Life Science
Performance Materials
Downstream activities

Product safety and quality

Chemical product safety
0
X
X
X
X

Material for:

Customers, Merck family, NGOs, regulatory agencies, sales and business partners, shareholders

Patient safety
0
X
0
0
X

Material for:

Health systems, Merck family, NGOs, patients, regulatory agencies, shareholders

Product-related crime
0
X
X
X
X

Material for:

Customers, federations and policy makers, health systems, Merck family, NGOs, patients, regulatory agencies, sales and business partners, shareholders, patients

Transport and warehouse safety
X
x
X
X
X

Material for:

Communities, customers, regulatory agencies, sales and business partners, suppliers

Ethical conduct

Bioethics
0
X
X
0
X

Material for:

Customers, federations and policy makers, media, NGOs, regulatory agencies, scientists

Clinical studies
X
X
0
0
X

Material for:

Federations and policy makers, media, Merck family, NGOs, patients, regulatory agencies, scientists, shareholders, suppliers

Animal welfare
X
X
X
X
0

Material for:

Media, NGOs, regulatory agencies, scientists, suppliers

Good business practice

Compliance
X
X
X
X
X

Material for:

Competitors, employees, health systems, Merck family, NGOs, regulatory agencies, sales and business partners, shareholders, supplier

Responsible marketing
0
X
X
X
X

Material for:

Customers, federations and policy makers, health systems, media, patients, sales and business partners

Community engagement
0
X
X
X
X

Material for:

Communities, employees, media, Merck family, NGOs

Interactions with health systems
0
X
0
0
X

Material for:

Federations and policy makers, health systems, NGOs, patients, regulatory agencies

Governance
X
X
X
X
X

Material for:

Customers, employees, employee representatives, Merck family, regulatory agencies, sales and business partners, shareholders, suppliers

Data protection
X
X
X
X
X

Material for:

Customers, employees, employee representatives, patients, sales and business partners, suppliers

Health for all

Access to health
0
X
X
0
X

Material for:

Health systems, media, NGOs, patients, sales and business partners

Prices of medicines
0
X
0
0
X

Material for:

Health systems, media, Merck family, NGOs, patients, sales and business partners, shareholders

Health awareness
0
X
0
0
X

Material for:

Communities, competitors, health systems, media, NGOs, patients, sales and business partners

Supply chain standards

Supply chain standards
X
X
X
X
X

Material for:

Competitors, customers, federations and policy makers, media, Merck family, NGOs, shareholders, suppliers

Human rights

Human rights
X
X
X
X
X

Material for:

Communities, customers, employees, federations and policy makers, media, NGOs, suppliers

Sustainable products

Sustainable product design
0
0
X
X
X

Material for:

Customers, scientists

Attractive employer

Diversity
0
X
X
X
0

Material for:

Employees, employee representatives, media, Merck family

Recruiting and retaining employees
0
X
X
X
0

Material for:

Competitors, employees, employee representatives, Merck family, shareholders

Employee development
0
X
X
X
0

Material for:

Employees, employee representatives

Good leadership
0
X
X
X
0

Material for:

Employees, employee representatives

Employee engagement
0
X
X
X
0

Material for:

Employees, employee representatives

Health and safety
X
X
X
X
0

Material for:

Employees, employee representatives, regulatory agencies

Future of work
0
X
X
X
0

Material for:

Employees, employee representatives

Technology

Innovation and R&D
X
X
X
X
X

Material for:

Customers, health systems, Merck family, patients, scientists, shareholders

Digitalization
X
X
X
X
X

Material for:

Customers, patients, scientists, sales and business partners

Resource efficiency

Waste and recycling
0
X
X
X
X

Material for:

Communities, customers, NGOs, regulatory agencies

Water management
0
X
X
X
X

Material for:

Communities, NGOs, regulatory agencies

Environmental protection

Energy efficiency and renewable energy
0
X
X
X
X

Material for:

Customers, federations and policy makers, NGOs

Greenhouse gas emissions
X
X
X
X
X

Material for:

Customers, federations and policy makers, media, NGOs, regulatory agencies, suppliers

Plant and process safety
0
X
X
X
0

Material for:

Employees, media, Merck family, regulatory agencies, shareholders

Biodiversity
0
X
X
X
0

Material for:

Federations and policy makers, NGOs, regulatory agencies

Emissions
0
X
X
X
0

Material for:

Federations and policy makers, NGOs, regulatory agencies

Stakeholder
People or organizations that have a legitimate interest in a company, entitling them to make justified demands. Stakeholders include people such as employees, business partners, neighbors in the vicinity of our sites, and shareholders.
Greenhouse gases
Gases in the atmosphere that contribute to global warming. They can be either naturally occurring or caused by humans (such as CO2 emissions generated by burning fossil fuels).

Tags

Information

The current Sustainability Report 2021 can be found here.