Business Conduct (G1)

Corporate culture

Our governance (GOV-1)

We describe the role of our administrative, management and supervisory bodies, their roles and responsibilities as well as access to expertise and skills regarding business conduct, impacts, risks and opportunities under ESRS 2 (GOV-1).

Our material impacts, risks and opportunities related to corporate culture (G1 SBM-3)

As part of our materiality analysis, we assessed impacts, risks, and opportunities in relation to corporate culture. An overview of the criteria applied in our materiality assessment and risk and opportunities identification, can be found under ESRS 2 (IRO-1). Our disclosure refers to the following identified material impact:

Our policies related to corporate culture (G1-1)

As a science and technology company we thrive on change and view it as an exciting opportunity for growth and innovation underscored by our new company vision “Sparking Discovery, Elevating Humanity”. Our commitment is to create a brighter, healthier, and more sustainable world for customers, patients, and communities around the globe.

Our multi-industry business model, diverse team and global footprint represent a competitive advantage. In addition, with our family values and behaviors rooted in a long history, we want to ensure that we can carefully plan for the needs of both current and future generations. Our research and business decisions are guided by a clear moral and ethical compass, outlined in our Code of Conduct. Furthermore, our High-Impact Culture and inclusive mindset are intended to give us the strength and agility to navigate through challenging circumstances. By embracing this set of values, behaviors, and inclusive mindset, we set a foundation for a company that thrives on the diversity of our teams of employees and the talents we attract.

Defining clear workplace behaviors helps us support our purpose and create an environment where everyone can grow and succeed. These behaviors reflect our values and ensure that our teams embrace diverse cultures, ideas, and life experiences.

The behaviors are:

• Obsessed with customers and patients: We focus on the impact we create. The customer ‘s and patient ‘s needs are the starting point of our work.
• Act as the owners: We think and behave like owners, we make decisions and act on behalf of the company’s best interest, not just our own.
• Be curious and innovate boldly: We challenge our own thinking and the status quo, focusing on better approaches and innovative methods while staying aware of the competition.
• Simplify and act with urgency: We value simplicity and efficiency. By eliminating unnecessary processes, we focus on what matters most and adapt quickly, when necessary, as speed is crucial to staying competitive in every business.
• Raise the bar: We constantly set high standards for ourselves and our teams, striving to deliver the best quality in our products, services, and processes.
• Disagree openly, decide, and deliver: We think independently and deliver as a team. We make clear what is important in every decision, take accountability, and avoid deferring difficult decisions. Once a decision is made, we all commit to it.

The policies related to our corporate culture are regularly monitored and updated.

One core value that guides our operation is maintaining high standards of ethical conduct. To support this, we implemented a group-wide whistleblower and complaints system for reporting any forms of misconduct. A central component of this is our Compliance Hotline, which we have set up in collaboration with a third-party provider. It is accessible to our employees as well as external stakeholders. Concerns can be reported in more than 40 languages and around the clock, 365 days per year, free of charge and anonymously, either by telephone or via a web-based application. The channels can be accessed via our external website Compliance-Hotline.

Our Whistleblowing and Investigations Standard reinforces our commitment to maintaining and strengthening our “speak up” culture. The standard provides guidance on reporting potential violations and our procedures for investigating reports of misconduct while ensuring confidentiality and protecting whistleblowers in line with Directive (EU) 2019/1937.

Reports to the Central Reporting Channels are directly received and reviewed by a central, independent, and qualified team from Group Compliance. The qualified experts handling the report must act impartially, objectively, and in a timely manner, while maintaining confidentiality. In addition, our qualified experts are provided with our Whistleblowing and Investigation Standard, SpeakUp Line and Case Management relevant training materials and investigation related templates. Compliance-relevant cases with a particular risk profile are presented to the Compliance Case Committee, comprising senior members of our Compliance, Legal, Data Privacy, Internal Auditing, and Human Resources departments. The Committee evaluates and classifies specific compliance cases and takes appropriate measures to clarify the identified issues.

Moreover, we provide regular training for employees on existing and new compliance requirements, guidelines, and best practices, both in person and online. The topics include various areas such as Code of Conduct, anti-corruption, and data privacy. Employees are required to complete these courses during the onboarding period and to repeat the training based on their level of risk exposure. Additionally, we continuously update our training curricula to reflect new developments. Some courses also apply to independent contractors and contingent workers, such as temporary workers.

Our actions related to our corporate culture (G1 MDR-A)

Our commitment to fostering an environment in which every employee feels valued, engaged, and empowered to contribute to our collective success is at the core of our High-Impact Culture. We believe that acknowledging and rewarding individual achievements, along with a feedback-driven culture, enable this collective success. For this reason, we use a performance management approach that values employee expectations, defines clear goals, ensures feedback, and rewards outstanding performance. Our actions in relation to our corporate culture follow our Code of Conduct and aim to empower our employees to act in accordance with our core values. This approach applies to all employees across all business sectors. Unless otherwise specified, all actions are to be considered ongoing and have no fixed closing date.

Strengthening our sustainability culture

Since 2021, e-learning courses on our sustainability strategy have been a mandatory training component for existing and new employees. Building on this foundation, we extended our offer to function- and hierarchy-specific educational activities in 2023. Moreover, since then, we have focused on training Sustainability Change Agents who serve as multipliers within their functions to spread a sustainable mindset and enable changes toward reaching our sustainability targets. All Change Agents have been selected from our Sustainable Network, which is a platform with a continuously growing membership. The Sustainable Network has existed since 2021 and includes employees and managers across the company. It supports active exchange and mutual learning on sustainability topics, on a voluntary basis.

Attracting and inspiring key talent

We believe that a strong and appealing employer brand is built from the inside out. Our overarching objective is to attract qualified employees and build a strong organizational culture that supports effective collaboration and long-term employee retention. In the reporting year, we launched a campaign to provide insight into our culture and our employees’ passion for our vision of "Sparking Discovery, Elevating Humanity": employees shared stories in video format. Furthermore, we want to focus our efforts on reaching relevant talent beyond our current industry by diversifying the channels we use to raise awareness among potential candidates who may not yet be familiar with the opportunities we offer. We are also working consistently to enhance the onboarding phase of our new employees, helping them adopt our High-Impact Culture and develop a strong sense of belonging within their team and their organization. We support managers in integrating new employees, ensuring they understand our high standards for ethics, integrity, accountability, and care. Additionally, we train our talent acquisition team to consider diversity, equal opportunities, inclusion, and unconscious bias in the recruitment process. Through our global minimum standards for the hiring process, which include clear expectations for hiring managers, we aim to ensure a fast and quality-oriented process. Our recruiters are trained to guide our hiring managers in following sound practices.

Embracing conversation and dialogue

In our increasingly connected world, we believe that feedback enhances open dialogue, builds trust, motivates, and improves collaboration. Our 360° feedback tool shall encourage our employees to provide continuous feedback based on integrity and respect. In the reporting year, we conducted various enablement sessions to further promote conversation and dialogue around our feedback culture. These included the interactive learning format Space2Grow, which emphasizes practical learning for our employees. As a part of the New Leader Onboarding Journey and the Supervisor Academy, our new managers are equipped not only with process knowledge, but also with an understanding of cultural differences.

Empowering our employees

We foster a trustful and open feedback environment within our company, inviting everyone to actively contribute to our organization’s success through internal communication platforms, surveys, and discussion rounds. Moreover, we conduct various employee surveys at different stages of the employee journey, e.g., onboarding surveys, pulse checks, engagement surveys, and exit surveys. These surveys help us identify areas of strength as well as opportunities to improve employee well-being, engagement and belonging. Based on the survey results, follow-up areas are identified at the global or sector/functional level and translated into action planning.

MyImpact: Building a culture of feedback and performance excellence

MyImpact is our framework for maintaining and further developing a feedback-driven and performance-oriented culture in our company. It is designed to ensure that every employee is empowered to take ownership of their performance, actively participate in feedback conversations, and contribute meaningfully to the company’s success. A mandatory e-learning ensures that employees, regardless of their role, have equal access to understanding performance management principles and can apply them effectively in their day-to-day work. As part of MyImpact, we send out a monthly newsletter promoting psychological safety to build a culture where employees feel safe. Furthermore, we continue communication and framework refinement based on feedback and indicators. By evaluating feedback based on defined indicators and transparently sharing lessons learned, we want to ensure that MyImpact is applied consistently and aligned with the company’s strategic goals. The framework contributes to a culture of continuous improvement, bringing employee behavior in line with our ethical standards and High-Impact Culture.

In 2024, no significant operating expenditures (OpEx) or capital expenditures (CapEx) were allocated for the actions: strengthening our sustainability culture, attracting and inspiring key talent, embracing conversation and dialogue, empowering our employees and MyImpact. For 2025, we also do not intend to allocate any significant OpEx or CapEx.

MyGrowth: Empowering employees for skills-driven professional growth

MyGrowth shall empower employees at all levels of the organization to take control of their professional development and become part of a skills-powered organization. Building on a growth-oriented mindset and our artificial intelligence-driven platform, MyGrowth enables employees to shape their own professional journey. By providing access to tailored learning opportunities, mentorship programs, internal job prospects, and development assignments, MyGrowth promotes a continuous learning culture that aligns employee growth with the strategic needs of the company. We conducted optional introductory sessions in English, French, German, Polish, Portuguese, and Spanish to educate employees on the growth mindset and the MyGrowth platform, ensuring inclusivity and accessibility for our diverse workforce. MyGrowth Global Development Weeks promote collective learning across the organization, encouraging collaboration and sharing of knowledge. This two-week learning event offers our employees a range of free global and local learning opportunities and includes a variety of interactive sessions, workshops and activities focused on skills development.

In 2024, we allocated € 2 million of operating expenditures (OpEx) to the action MyGrowth, which are included in the respective lines of the income statement. No capital expenditure (CapEx) was allocated. For 2025 we do not intend to allocate significant OpEx or CapEx.

Evaluating the implementation of the High-Impact Culture

We have evaluated the High-Impact Culture initiative after two years of implementation across our global organization. The evaluation focused on our largest hubs in China, Germany, and the United States to identify gaps and opportunities to further strengthen the implementation of the High-Impact Culture framework. The overarching aim of this analysis connects directly with our topic of materiality and complements the ethical behaviors in our company as defined in our code of conduct. This assessment was completed in the fourth quarter of 2024. We identified an initial set of recommendations to further embed High-Impact Culture in the organization. In 2025, we intend to specify and integrate activities that promote the High-Impact Culture in alignment with our business objectives and values. We address all employees worldwide, thereby aiming to further drive the integration of the High-Impact Culture across the organization.

In 2024, no significant operating expenditures (OpEx) or capital expenditures (CapEx) were allocated for the action Evaluating the implementation of the High-Impact Culture. For 2025, we also do not intend to allocate significant OpEx or CapEx.

Our targets and metrics related to our corporate culture (G1 MDR-T, MDR-M)

Our recognition focuses on monitoring progress through a series of qualitative measures and comprehensive evaluation processes. However, these are not key figures or quantitatively measurable goals that are time-bound and result-oriented. We monitor the effectiveness of our measures on the topic of corporate culture using various criteria, which are presented below.

Within our sustainability culture, we have been using the sustainability-related questions from our annual Employee Engagement Survey since 2023 to measure the impact of our activities. The results of the survey are used internally only to evaluate the maturity of the sustainability mindset within the company and to identify and address differences across functions, regions, and hierarchy levels.

In 2024, as part of our efforts to attract and inspire key talent, we began measuring progress in terms of the quality of our onboarding process and talent retention. This includes evaluating talent management initiatives and analyzing the reasons why talented people leave our company. We also monitor the voluntary turnover rate of top talent and new hires. We also track how often our 360° feedback tool has been used since it was launched.

To continuously empower our employees, we conduct engagement surveys and assess engagement scores to evaluate the resilience and sustainability of our organization. Engagement is defined as the emotional and intellectual involvement that motivates employees to do their best work and contribute to the success of the organization. We define employee engagement as a mutual commitment between our organization and the employee. Additionally, the so-called quality index score is used to track progress on the overall quality of our work culture.

Regarding MyImpact, we have been measuring feedback-based indicators on a quarterly basis since 2023. This includes tracking the number of performance feedback users in the respective year, response rate to feedback requests and comparison with previous year.

Since mid-2024, a bi-weekly report from the MyGrowth dashboard has provided HR and leadership with up-to-date insights on platform usage, the number of users with profiles that include skills and participation in mentorship programs.

The High-Impact Culture assessment has led to a number of recommendations for further integration of High-Impact Culture within the organization. The initial assessment was completed in the fourth quarter of 2024, with plans to implement adjustments throughout 2025.

Animal welfare

Our material impacts, risks and opportunities related to animal welfare (G1 SBM-3)

An overview of the criteria applied in our materiality assessment and risk and opportunities identification, can be found under ESRS 2 (IRO-1). As part of our materiality analysis, we identified one impact in relation to animal welfare. Our disclosure refers to the following material impact:

Our policies related to animal welfare (G1-1)

We are committed to applying high ethical and animal welfare standards related to the housing, husbandry and veterinary care of all animals involved in our work. To ensure compliance with applicable regulations and to integrate animal welfare considerations into our own operations and our supply chain management, we have implemented multiple policies. The policies are regularly monitored and updated if necessary.

In 2020, we launched the Animal Affairs Academy to provide our employees training and educational sessions on animal science and welfare. We provide internal and external courses on animal welfare and animal testing, and we also supervise and support workforce training on practical work with animals as well as on the applicable rules and regulations. This also includes dealing with incidents in relation to animal welfare. We have set up an internal webinar series called “Let’s talk Animal Affairs” to discuss the topic of animal welfare transparently and openly with our employees. Information about training courses and webinars is available on our intranet and is distributed via a newsletter. This aims to ensure that employees involved in animal activities receive regular and appropriate training and continuing education. The specific training needs (i.e. hours per topics per year) for any role that involves work with animals or work related to animals are defined in accordance with our Group Procedure on Animal Science & Welfare Training.

Our Vivarium Rotation Program, which was initiated in 2022, enables two employees from each of our vivaria to visit another vivarium every year to learn, exchange knowledge and share best practices. To promote ongoing dialogue outside the program as well, the Vivarium Rotation Program community was established; it meets once per quarter and exchanges on lessons learned during visits.

Our actions in relation to animal welfare (G1 MDR-A)

Our actions in relation to animal welfare follow our Animal Science and Welfare policy. Our long-term objective is to be a pioneer in phasing out animal work. Until this objective is achieved, we apply high ethical and animal welfare standards related to quality, housing, husbandry, and veterinary care to all animals in our reach. We orient ourselves toward the species-specific needs of the animals we work with. We replace animal testing wherever possible with alternative methods through effective 4R projects (see below). We are gradually reducing the number of animals used and are implementing refinement processes for all work involving use of animals by us or on our behalf to enhance animal welfare and minimize stress.

4Rs Workstreams

We are committed to the internationally recognized 3Rs Principle for animal testing and have added responsibility as a fourth animal welfare principle in line with the ethical principles published by David DeGrazia and Tom Beauchamp in 2019 in the Principles of Animal Research Ethics:

• Replacement – replacing animal studies with non-animal systems,
• Reduction – using the minimum number of animals required,
• Refinement – minimizing distress or discomfort before, during and after testing,
• Responsibility – accepting and delivering on our responsibility for all animals in our reach internally and among our business’s partners.

Replacement as part of our 4Rs workstreams

We have developed a roadmap for the entire Group with our 3-Basket Concept to phase out animal testing in the long term. The model divides all animal testing into three different categories: (1) implementation of animal-free alternatives that are already available, including those that are still legally required by some countries to bring drugs or chemicals to patients or customers, (2) investing in projects to develop alternative methods, or (3) investment in refinements for all animal testing for which there are currently no innovative alternatives available. In the reporting year, the Group Animal Welfare Council approved the 3-Basket Concept, and our animal testing functions completed the sorting of animal testing into the three categories. Moreover, our Life Science business sector introduced a project to sort all animal-derived products. In 2024, we established our roadmap for phasing out animal testing and defined key performance indicators.

We also presented the 3-Basket concept to the European Federation of Pharmaceutical Industry Association Research Animal Welfare Network and the Preclinical Development Expert Group (EFPIA), where the concept was officially adopted as a common approach. Additionally, we received positive feedback by the European Medicines Agency (EMA) on the concept. We also presented the approach at the second European Commission Conference on a roadmap to phase out animal testing and received unanimous positive feedback from authorities, policymakers, associations, and non-governmental organizations. We are continuing to collaborate with EFPIA and the EMA while implementing our 3-Basket concept. The 3 Basket concept is being implemented across all business sectors within the organization, requiring active engagement with relevant stakeholders throughout our upstream and downstream value chain to ensure its effective integration. The 3-Basket Concept serves as the foundation for developing long-term plans and guiding investment decisions aimed at advancing toward animal-free research. This approach reflects a sustained commitment to achieving ethical and sustainable alternatives in line with our strategic goals.

As part of our Bio-Convergence project, we are seeking to dramatically improve the translatability of drug testing, so that clinical studies are significantly faster, cheaper, and more patient-centric. We are developing models based on the combination of artificial intelligence and information technology with human-derived cells and tissues and applying the latest microfluidic and chip technologies. The envisaged innovations can speed up our own drug development, but can also be commercialized on the emerging alternatives' market, thereby supporting the general phase out of animal testing in industry and academia. Animal models as such frequently were not good enough to reliably predict what would happen in humans or in the environment. The development of science, information technology, including artificial intelligence, and biotechnology may have reached a point where their combined application could surpass the value of animal testing in many areas. Bio-convergence as a new discipline combines tools for understanding the totality of available data with the most advanced technologies to find a solution to the unsolved problem of predicting clinical outcomes. The investment required is divided into two parts and staggered: Firstly, we need to address laboratory animal health requirements immediately so that the data generated are meaningful, at least for the species and conditions we are studying. Secondly, in the medium to long term, we need to use the available data and technologies and explore completely new ways to answer the question of whether a drug or chemical is effective and safe in patients or in the environment. Both are our ethical obligation to patients and animals and an imperative economic necessity for the sustainable future of the global pharmaceutical industry. The Bio-Convergence project is applied globally across all business sectors and the downstream value chain. This project is designed to deliver benefits to customers, scientists, and internal research initiatives, fostering innovation and collaboration across our operations. The Bio-Convergence project is considered ongoing, with no defined closing date, reflecting its long-term commitment to continuous development.

The ViA project, approved in the middle of 2023, aims to switch from animal work to cell culture work for legally required quality control in the batch release of our hormone drugs. This is a crucial step toward reducing animal testing as it aims to eliminate the use of animals for biological quality control (BQC) from 2032 onwards. The biggest challenge is the acceptance of the alternative methods by authorities worldwide. Project ViA is applied worldwide across our own operations within the Healthcare business sector and with the involvement of internal stakeholders.

We are actively working on replacing fetal bovine serum (FBS), which is harvested from fetal calves at slaughterhouses. It contains various growth factors and nutrients and poses a risk of viral contamination. FBS is widely used in cell culture applications by academic and industrial researchers and for manufacturing numerous biological products made in cells, such as vaccines and therapeutic antibodies. Due to the known ethical, scientific and safety concerns, we have continued our research in developing animal-free alternative media and published initial results in 2024. We are further testing the cell-specific needs to produce suitable media for the predominant cell lines in our research and development as well as manufacturing, and we plan to commercialize these for our customers in the Life Science business sector. The replacement of FBS is a global initiative implemented across all business sectors and throughout the downstream value chain. This approach aims to benefit customers, scientists, and internal research initiatives, driving innovation and progress toward animal-free methodologies. The replacement of FBS project is considered ongoing, with no defined closing date, reflecting our long-term commitment to continuous development.

Reduction as part of our 4Rs workstreams

We are driving the VICT3R project, which aims to revolutionize toxicology studies by replacing up to 25% of animals used in experiments with virtual control groups (VCGs), setting new standards for ethical research. This project has been endorsed by health authorities (EMA and U.S. Food and Drug Administration FDA) and will be gradually implemented in the coming years. The VICT3R project is being implemented globally in the Healthcare business sector and is designed for the pharmaceutical, life science, and chemical industries, setting new ethical standards and promoting innovation in research practices.

Refinement as part of our 4Rs workstreams

We initiated the transition to non-aversive handling of rodents in all our animal facilities in 2024 and described this in local standard operating procedures. This prevents our animals experiencing unnecessary harm and stress. Additionally, we have defined species-specific needs and related housing requirements followed by the implementation of individual housing solutions to ensure high animal safety and welfare standards. The implementation of improved housing conditions is ongoing, with continued efforts to enhance animal welfare across our operations. These activities are applied internally and globally to all our vivaria.

Responsibility as part of our 4R workstreams

The core of our responsibility is ensuring the highest ethical and animal welfare standards for all animals in our reach (covered by the 3Rs) and to provide a Culture of Care (CoC) for people working with animals.

During the reporting year, we advanced responsible animal welfare practices by working on operational targets, training, and accreditations. We launched the Global Animal Technician Recognition Day, which took place for the second time in the first quarter of 2024. In addition, we conducted a culture of care survey in the third quarter of 2024 to measure the mood in the vivaria and among the people involved in animal work. Furthermore, the Group Animal Welfare Council (GAWC) endorsed the defined performance indicators.

In the reporting year, all our animal facilities were accredited by the Association for Assessment and Accreditation of Laboratory Animal Care (AAALAC), indicating a high-quality animal care and use program and a commitment to provide high-quality, humane animal care.

Our Animal Affairs Academy provides educational training and workshops for our employees involved in animal work, ensuring alignment with our ethical standards and operational goals. In 2024, the Animal Affairs Academy held more 112 training courses and workshops on the topic of animal research. More information on our training initiatives and specific requirements can be found under "Our policies related to animal welfare (G1-1)".

All activities conducted as part of our responsibility approach are applicable globally across all business sectors and are considered ongoing with no defined closing date. These activities are essential to fostering accountability and driving continuous improvement in the ethical conduct of animal work. The guidance and programs of the Animal Affairs Academy are ensuring consistent understanding and adherence to our values across the organization.

In 2024, no significant operating expenditures (OpEx) or capital expenditures (CapEx) were allocated for the 4R-Workstream action plan. For 2025, we intend to allocate € 4 million for OpEx and no significant CapEx.

Animal Science and welfare audits

Our goal is to maintain transparency, ensure accountability for animal work and uphold high animal welfare standards. Therefore, qualifying all vendors conducting animal work on our behalf is an integral part of our strategy. This is achieved through a rigorous quality assurance process, based on our established and robust audit framework, as well as a comprehensive auditor training and qualification program. Our own vivaria are audited every three years by our Corporate Animal Affairs. According to this audit plan, no audits were carried out in our vivaria in 2024. In 2024, 34 Animal-Using Contracting Partners audits were completed. These audits reflect our commitment to compliance and excellence in animal welfare practices.

In addition, we further enhanced the supervisory role of Corporate Animal Affairs by conducting regular veterinary inspections of all our vivaria globally and monitoring the reporting of animal science and animal welfare incidents, both internally and externally.

In 2024, no significant operating expenditures (OpEx) or capital expenditures (CapEx) were allocated for the Animal Science and welfare audits. For 2025 we also do not intend to allocate significant OpEx or CapEx.

Work with committees and associations

We are involved in several organizations and initiatives, including as Vice Chair of the Research and Animal Welfare Networks of the European Federation of Pharmaceutical Industries and Associations (EFPIA) as well as Interpharma, a federation of research-based pharmaceutical companies in Switzerland. Together with selected member companies, the audit group of the Animal Welfare Working Group of Interpharma conducts audits at contract research organizations and animal breeders.

We are also involved with the Association for Assessment and Accreditation of Laboratory Animal Care International. This private, non-profit organization promotes the humane treatment of animals in science through voluntary accreditation and assessment programs. As of 2024, our employee represents the EFPIA as Delegate of the Member Organization. We continue to support the European Partnership for Alternative Approaches to Animal Testing (EPAA) and participate in its working groups to develop alternatives to animal testing. In 2022, we initiated the Marseille Declaration, the first joint pharmaceutical industry declaration on animal housing and use. In this document, the company signatories state their expectations of animal welfare practices to be used at their own sites and by external partners worldwide when using live animals to conduct studies on their behalf. It aims to promote dialogue between these companies under the slogan “We are not competitors when it is about improving animal welfare”. Together with the first signatories, Novartis, Sanofi, and Novo Nordisk, we formed the Marseille Declaration Steering Group, for which our representative was appointed Chair in 2024. In 2024, the Marseille Declaration had 11 signatories. Moreover, we participated in the Germany REACH Roundtable – Industry led by Humane Society International, the objective of which is to reduce the number of animals used in chemical testing. Our collaboration with committees and associations is ongoing and has no fixed completion date.

In 2024, no significant operating expenditures (OpEx) or capital expenditures (CapEx) were allocated for the Work with committees and associations. For 2025 we also do not intend to allocate significant OpEx or CapEx.

Our targets in relation to animal welfare (G1 MDR-T)

Our aim is to phase out animal work while upholding the high ethical and animal welfare standards. This commitment includes ensuring quality, housing, husbandry, and veterinary care for all animals in our reach. In 2024, we advanced our commitment to responsible animal welfare practices through structured efforts in operational targets, training, and accreditation. Our educational initiatives provided educational training and workshops for our employees on animal science and welfare. By the end of 2024, all our animal facilities had achieved AAALAC accreditation, reinforcing our adherence to recognized global standards for animal care.

In the reporting year, we did not define quantitative, measurable targets related to animal welfare that are time-bound and result-oriented. Our approach focused on monitoring the number of animals used through a series of entity-specific measures and comprehensive evaluation processes.

Additionally, we made significant progress toward our 4Rs principles. We developed a roadmap for phasing out animal testing and established key performance indicators to guide and measure our progress. From 2025, we will measure the following performance indicators: data on the percentage of animal-based tests and animal-derived products that were successfully classified using the 3-Basket approach and the number of animal-based tests and animal-derived products that have been successfully replaced compared with 2021 as the replacement initiatives’ starting year. In addition, we will measure the reduction in the number of animals used for testing and production. With respect to animal well-being, we will evaluate the percentage of animals handled with non-aversive techniques and the percentage of animals housed under conditions that fulfill their species-specific needs beyond the legal requirements. Evidence of prioritization of avoiding animal pain and suffering along with examples for advancing the 4Rs beyond company boundaries will be measured from 2025 as part of our 4Rs Responsibility initiative.

Our metrics in relation to animal welfare (G1 MDR-M)

The metrics outlined below are part of our “entity-specific measures”. These include the total number of animals used for either testing or animal-derived product generation across the entire company as well as providing a breakdown by business sectors (Life Science, Healthcare and Electronics). We track year-on-year percentage changes in animal use to monitor trends over time. Additionally, we differentiate between animals used internally and externally, with further categorization by species. This includes specifying the percentages of rodents (mice, rats, hamsters, and guinea pigs) and non-rodent animals (e.g., rabbits, dogs, minipigs, and non-human primates). For the Life Science sector, we also report the number of animals used relative to net sales (i.e. the relative value for Life Science) on an annual basis, as this sector often conducts animal-related activities on behalf of its clients. By contrast, in the Healthcare business sector, animal testing is a legal requirement to evaluate the safety and efficacy of medicines under development or in preclinical research. Animal numbers are collected at the business sector level, categorized into internal and external data, and reviewed quarterly by the Animal Affairs department. The measurements of the below metrics have not been validated separately by an external body.