Anti-Corruption and Anti-Bribery

While anti-corruption and anti-bribery are not identified as material to our business operations as part of the materiality analysis, we have robust policies and measures addressing these issues. We have prepared the 2024 non-financial statement based on the European Sustainability Reporting Standards (ESRS) framework to ensure alignment with recognized European reporting guidelines. However, the extent of the disclosed content is determined in accordance with sections 315b and 315c in conjunction with 289b to 289e of the German Commercial Code (HGB).

Our policies related to anti-corruption and anti-bribery (G1-1)

We are committed to upholding high standards of integrity by implementing robust anti-bribery and anti-corruption measures to ensure a transparent and ethical business environment. Our Group Anti-Corruption Policy, which is aligned with the principles of the United Nations Convention against Corruption, mandates that our business activities comply with applicable anti-corruption regulations and standards. The policy is regularly monitored and updated if necessary.

Our actions related to anti-corruption and anti-bribery (G1 MDR-A)

As a global company, we have stringent requirements for effective compliance management. Importantly, we seek to emphasize compliance by acting in line with our company values and believe that profitable business operations should go hand in hand with ethical standards.

Corruption and bribery risk assessment

We have implemented a range of measures to mitigate the risk of corruption and bribery, to ensure that we can prevent it effectively and can detect and address any allegations or incidents. To assess risks and the effectiveness of controls, we have implemented indicators, which are regularly monitored. Our approach to risk minimization is governed by a Group-wide framework that emphasizes ethical and legally compliant business processes.

Our compliance risk assessment process covers all our business sectors. The assessment is based on a comprehensive risk matrix that improves objectivity and enables a data-driven risk approach. The matrix focuses on bribery and corruption risks, which are highlighted through in-depth risk categorization and risk scenarios. Furthermore, it utilizes country-specific risk segmentation, classifying countries where we actively operate in terms of their risk exposure regarding bribery and corruption. We use the outcome as a model to prioritize initiatives and intensify activities in countries with higher risk levels.

As part of our commitment to responsible business practices, we apply a risk-based approach when selecting external partners. The greater the estimated risk related to a particular country, region, or service type, the more in-depth the due diligence process is before entering a business relationship. Based on the outcome, we determine whether to reject the potential external partner, impose conditions to mitigate identified risks, or terminate an existing relationship.

Additionally, we actively work to prevent bribery by enforcing strict value limits for gifts and entertainment. These limits are embedded in the company tool we use to reimburse travel and expenses. All submissions are subject to an approval process, which includes an additional internal review if they exceed certain cost thresholds. In 2024, we completed the roll-out of a new tool governing our interactions with healthcare professionals, focusing on a risk-based approach embedded in a system-driven risk assessment. We follow clearly defined internal approval requirements and procedures for each type of interaction, in line with applicable laws and codes. Further information on transparency reporting can be found under chapter “Dealing with medical professionals and transparency reporting”.

External certification of the Compliance Management System

An external review and certification of our Compliance Management System, in accordance with the principles of proper auditing of Compliance Management Systems (IDW PS 980), has been underway since 2022. The focus is on preventing bribery, corruption and money laundering in order to identify potential areas of improvement and to assess whether the measures we have taken ensure that regulations, policies and processes are adhered to. The assessment covers three phases: the first two phases, the pre-assessment and adequacy assessment, were completed by the second quarter of 2023 without material findings. The adequacy assessment indicates that the processes and measures in our Compliance Management System are adequately designed and implemented to manage our compliance risks. The third phase, the effectiveness assessment, will be gradually implemented across individual regions in 2025.

Corruption and bribery audits

Group Internal Auditing regularly reviews functions, processes, and legal entities worldwide. They also assess the effectiveness of the respective compliance guidelines, processes and structures. If an internal audit results in recommendations for improvement measures, Group Internal Auditing performs a systematic follow-up and monitors the implementation of the recommended corrective actions. In 2024, Group Internal Auditing conducted 30 audits (thereof 6 of Merck KGaA, Darmstadt, Germany) involving bribery and corruption-related risks.

Investigation of corruption and bribery incidents

Any concerns related to corruption and bribery can be reported via various central reporting channels and are investigated further according to our Whistleblowing and Investigation Standard and our internal investigation procedure. The committee responsible for investigating incidents is separate from the chain of management involved in the matter. Our Chief Compliance Officer reports to the Executive Board and Supervisory Board on the status of our compliance activities, potential risks and serious compliance violations a minimum of twice a year. More details about whistleblowing and investigations can be found under the chapter "Our policies related to corporate culture (G1-1)”.

Compliance awareness and training

We regularly communicate our compliance policies across various platforms (e.g., the annual compliance newsletter, targeted emails, intranet posts) to ensure that the policies are accessible and well understood by all relevant stakeholders. This approach promotes a strong culture of accountability and integrity across our workforce.

Our efforts to eliminate corruption and bribery risks extend beyond the boundaries of our own company. Through our global third-party risk management process, we want to ensure that sales partners, including commercial agents, distributors, dealers and high-risk vendors, are informed of our compliance principles. We expect our third parties to comply with relevant laws and reject all forms of bribery.

As bribery and corruption are a key focus area of our Compliance Management System, we implement regular awareness and training initiatives to promote ethical business conduct. In 2023, we launched anti-corruption, anti-bribery and anti-money laundering e-learning course based on the anti-corruption and anti-money laundering policies. Additionally, we offer individual classroom training sessions tailored for high-risk areas.

Anti-bribery and anti-corruption topics are also integrated in our Code of Conduct and Supplier Code of Conduct e-learning modules and are addressed using various awareness initiatives throughout the year. More information about general training related to compliance requirements, can be found under the chapter “Our policies related to corporate culture (G1-1)”.

We specifically target our training efforts towards employees who may encounter risks related to bribery, corruption and money laundering. This includes employees who interact with public officials, engage with third parties or are involved in reviewing and approving transactions. Participation in this course is mandatory for employees based on their level of risk exposure and associated with employee positions and role in the company.

The number of employees with anti-bribery, anti-corruption and anti-money-laundering training is shown in the table below:

Our metrics related to anti-corruption and anti-bribery (G1 MDR-M)

The number of compliance cases reported via the compliance hotline and other reporting channels in 2024 is shown in the table below: