Environmental & Social Information • Mar 4, 2019
Environmental & Social Information
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RECORDATI S.p.A. AND SUBSIDIARIES
Prepared pursuant to Article 4 of Italian Legislative Decree no. 254/2016
| Contents | Page | ||
|---|---|---|---|
| Note on methodology | 2 | ||
| 1. | Profile of the Recordati Group | 4 | |
| 1.1. | The Recordati Group | 4 | |
| 1.2. | Organisational and Management Model | 5 | |
| 1.3. | Internal Audit and Risk Management System | 8 | |
| 2. | The Recordati Group's approach to Sustainability | 12 | |
| 2.1. | Sustainability in figures | 12 | |
| 2.2. | The Recordati Group's commitment to Sustainability | 12 | |
| 2.3. | The Recordati Group's Stakeholders | 13 | |
| 2.4. | Materiality analysis | 15 | |
| 2.5. | Direct and indirect economic benefits | 16 | |
| 3. | Product quality and safety | 19 | |
| 3.1. | Research & Development and Intellectual Property | 20 | |
| 3.2. | Supply chain | 21 | |
| 3.3. | Audits and inspections | 22 | |
| 3.4. | Product serialisation | 25 | |
| 4. | The Recordati Group's Employees | 26 | |
| 4.1. | The importance of our employees | 26 | |
| 4.2. | Diversity and equal opportunities | 30 | |
| 4.3. | Employee welfare | 32 | |
| 4.4. | Training and development of human capital | 35 | |
| 4.5. | Health and safety in the workplace | 38 | |
| 5. | Focus on the Environment | 46 | |
| 5.1. | Commitment to environmental protection | 46 | |
| 5.2. | Energy use and emissions | 48 | |
| 5.3. | Management of water resources | 58 | |
| 5.4. | Waste management | 59 | |
| GRI Index | 62 |
In recent years, the Recordati Group (hereinafter also "Recordati" or the "Group") has decided to take a structured and organic approach to sustainability, considering the economic, social and environmental aspects of sustainability in a manner that is in line with its organisational structure. In order to provide a clear understanding of the business' activities, its development, its results and its impacts on sustainability, in 2018 the Group's commitment to sustainability was reiterated with the preparation of the second Consolidated Non‐Financial Statement (also the "Non‐Financial Statement" or "Statement") for the purposes of compliance with the obligations provided by Articles 3 and 4 of Legislative Decree no. 254/16. As such, presented in this Statement are the principle policies adopted by the Group, its management models and the principle activities carried out by the Group in 2018 with respect to the matters expressly specified by Italian Legislative Decree no. 254/16 (environmental, social, staff, human rights and anti‐corruption), as well as the principle identified risks related to these themes.
In line with the one of the two options provided by Article 5 of Italian Legislative Decree no. 254/16, this Statement is a separate report. However, it is noted that, as stated in specific notes contained in this document, further details relative to certain non‐financial information, as well as the relative management models and main identified risks, are also included in the Annual Report and the Corporate Governance Report and Ownership Structure.
This document represents the second Consolidated Non‐Financial Statement produced in compliance with Italian Legislative Decree no. 254 of 30 December 2016 in implementation of Directive 2014/95/EU, of the Companies belonging to Recordati S.p.A. and its subsidiaries, describing the initiatives and principle results in terms of the Group's performance on the subject of sustainability in 2018 (reporting period: 1 January to 31 December 2018).
The Non‐Financial Statement 2018 has been prepared in accordance with the new GRI Sustainability Reporting Standards published in 2016 by the Global Reporting Initiative (GRI), in line with the "Core" option. The table of GRI reporting indicators is attached for reference in the annex of this document. The report was prepared based on the results of the materiality analysis conducted in 2017, also deemed valid and consistent with the characteristics of the Group's business for the Non‐Financial Statement 2018, which identified the key material aspects for the Recordati Group and its stakeholders and considered the topics referred to in Italian Legislative Decree no. 254/2016.
The scope of the financial data referred to in this document corresponds to the data considered in the Consolidated Financial Statement 2018 of the Recordati Group. The scope of the social and environmental data and information extends to Companies belonging to the Recordati Group as of 31 December 2018, consolidated with the comprehensive approach in the Group's Consolidated Financial Statement1 . However, while ensuring the correct understanding of the company's business, it should be noted that:
1 The scope of social and environmental data also includes the company Natural Point S.r.l., acquired in June 2018. However, in line with the scope of the financial data of the Consolidated Financial Statement, the French company Tonipharm S.A.S, acquired at the end of 2018, shall be consolidated as of the start of the 2019 reporting period.
S.p.A. and Innova Pharma S.p.A.), Spain (Casen Recordati S.L.), Tunisia (Opalia Pharma) and France ‐ Bouchara (Laboratoires Bouchara Recordati S.a.s.) both office, plant and commercial staff are included. In fact, a reporting system is currently being developed to process data regarding the workforce at all of the Group's offices and commercial sites.
In compliance with the reporting standards used and the Legislative Decree no. 254/16, these exceptions and any other minor limitations are expressly indicated in the text. Furthermore, in order to provide a correct representation of performance and guarantee the reliability of the data provided, estimates have been kept to a minimum and, where unavoidable, are based on the best available methods, duly indicated.
For more information regarding significant changes to the scope and share ownership of the Group during the reporting period, reference should be made to the sections "Introduction" and "Ownership structure" in the Corporate Governance Report and Ownership Structure of the Recordati Group as of 31 December 2018.
The Non‐Financial Statement is published on an annual basis. The Non‐Financial Statement is also available online at Group's website www.recordati.it.
This Statement was presented for evaluation and approval to the Risk, Control and Sustainability Committee on 25 February 2019 and was approved by the Board of Directors of Recordati S.p.A. on 28 February 2019.
This Statement was subject to a compliance review by an independent auditing company, which issued a separate report confirming the compliance of the information contained herein pursuant to Article 3, paragraph 10 of Italian Legislative Decree no. 254/16. The audit was carried out according to the procedures indicated in the "Report of the Independent Auditing Company".
Finally, it is noted that, in the context of continuous improvement, the Group renews its commitment to continue its sustainability path towards a progressive formalisation of the commitments and operating practices in implementation of the principles of the Code of Ethics adopted by the Group and Legislative Decree no. 254/16.
In particular, in the course of 2018 the Recordati Group has formalised a reporting procedure aimed at defining the operating process for the preparation of the Non‐Financial Statement, describing the activities, time frames, roles and responsibilities of the company departments/structures involved in the reporting process.
The company Recordati S.p.A., and therefore its new Board of Directors appointed on 5 February 2019 following the change of the share ownership of the Group in 2018, will continue to pursue the development of sustainability policies, including by way of the progressive enforcement of the Group Code of Ethics with specific reference to the principles, commitments and management methods implemented by the Group in relation to the principle topics of sustainability, and with reference to the topics expressly referred to by Legislative Degree no. 254/16.
For all information regarding the Non‐Financial Statement of the Recordati Group, please refer to the following contacts:
Recordati S.p.A. Registered Office: Via Matteo Civitali, 1 ‐ 20148 Milan E‐mail: [email protected] tel.: +39 02 48787.1 ‐ Fax: +39 02 40074767
Established in 1926, the Recordati Group is based in Milan and is one of Italy's oldest pharmaceutical companies. Since its foundation, the Group has grown consistently to become a leading international pharmaceutical group and has been listed on Borsa Italiana (now part of the London Stock Exchange) since 1984. The Group has numerous branches both in and outside Europe in the pharmaceutical and chemical‐ pharmaceutical sectors.
The growth of the Recordati Group is the result of the quality of its products and services, as well as the implementation of the policy aimed at internationalisation and diversification, based on a focused strategy of acquisitions and targeted licensing agreements. As well as its presence in Western Europe (France, Germany, Greece, Ireland, Italy, Portugal, Spain and Switzerland) Recordati also operates directly in countries of central Europe, Russia and in other countries of the Commonwealth of Independent States (CIS), Ukraine, Turkey, Tunisia, the United States, Canada, Mexico, certain South American countries, Japan and Australia. Although the Group's principle reference market is the European Market, which turns out to be the second largest pharmaceutical market in the world, Recordati sells its products on over 150 markets, including through various licensing agreements, and markets pharmaceutical products under licence from primary pharmaceutical companies.
Recordati has six pharmaceutical manufacturing plants and one packaging and distribution plant dedicated to pharmaceuticals for rare diseases, and two chemical‐pharmaceutical sites where it produces numerous active substances and intermediates. Recordati produces and promotes a wide range of innovative pharmaceuticals and its product portfolio includes general medicines as well as specialist pharmaceuticals for the treatment of rare diseases. The Group's pharmaceutical activities extend across all phases of the process and include research and development, production, packaging, storage and commercialisation. Furthermore, thanks to licensing agreements with leading pharmaceutical companies Recordati products are distributed in more than 100 countries. The chemical‐pharmaceutical activities of the Recordati Group focus on the chemical production of intermediates and active substances both for Recordati's pharmaceutical products and for the international pharmaceutical industry.
The Group's most important products include lercanidipine‐based pharmaceuticals, a latest‐generation antihypertensive calcium channel blocker, and products containing a combination of lercanidipine and enalapril, an ACE inhibitor. Both substances are used to treat cardiovascular conditions; the Group has strengthened its presence in this sector with the acquisition in 2017 of pharmaceuticals based on the beta‐ blocker metoprolol. For over forty years the Group has operated in the genito‐urinary area, acquiring specific expertise and becoming the European partner of established international pharmaceutical companies.
With a view to innovation and growth, the Group has enhanced its therapeutic offering, developing its own pipeline of products and entering into the rare diseases sector. In fact, Recordati develops, produces and markets pharmaceuticals for the treatment of rare diseases through Orphan Europe and Recordati Rare Diseases. Orphan Europe is a leading European pharmaceutical company entirely devoted to the research, development and commercialisation of pharmaceuticals for the treatment of rare diseases. It is one of the leading companies in Europe in terms of number of products launched on the market developed specifically to treat a rare disease. Since 2013, the Group's US branch Recordati Rare Diseases Inc. has offered a portfolio of products dedicated to the treatment of various rare diseases, with a particular focus on genetic metabolic disorders. In recent years, the Group's activities to develop pharmaceuticals to treat rare diseases have extended to various countries in North and South America, as well as the Middle East, Japan and Australia.
With a commitment to the discovery, development and sale of innovative products with high added‐value and the objective of improving health and quality of life, the Recordati Group has defined its mission as a commitment to research, innovation, quality and the creation of value for its stakeholders, all of which are distinctive elements of the Group's corporate social responsibility.
For more information on the main business activities of the Group, its products and its markets, please refer to the "Recordati, an International Group" and "Review of Operation" sections of the Annual Report.
The Group's business model for the management of the main sustainability themes is described in the Organisational, Management and Control Model pursuant to Italian Legislative Decree no. 231/2001 (the "Model") adopted by all Italian Companies of the Recordati Group. While the Parent Company updated its Model in 2017, in 2018 the subsidiaries Innova Pharma S.p.A. and Orphan Europe Italia S.r.l. updated their own Model, the Company Italchimici S.p.A. adopted a model and, in addition, a plan for the adoption of a Model by the Company Natural Point S.r.l. acquired by Recordati in June 2018 was drawn up, due to come into effect in the first six months of 2019.
For Companies in other countries, if required by local legislation, policies have been or are in the process of being implemented which serve similar functions to those of the Organisational Model pursuant to Legislative Decree no. 231/2001. In particular, on 14 March 2018 the Spanish branch Casene Recordati S.L. adopted an Organisational, Management and Control Model in compliance with the Ley Organica 2015/1 of 30 March 2015, which introduced into Spanish criminal law certain new criteria of criminal liability of legal persons.
The Models adopted by Group Companies comply with the guidelines issued by Confindustria and are dynamic and effective tools thanks to a constant control and review process promoted by the Supervisory Bodies. The Organisational Models pursuant to Legislative Decree no. 231/2001 envisage dedicated channels for reports of irregularities or breaches by employees and regular staff training on the contents of Decree no. 231/2001 and the Organisational Model pursuant to Legislative Decree no. 231/2001 itself. The Supervisory Bodies appointed in the Group's Italian Companies are represented by boards comprised of the Internal Audit Department Manager and external professionals. Each Supervisory Body is internally regulated and operates according to a specific programme. The Supervisory Bodies periodically refer to the Board of Directors and the Board of Statutory Auditors, where present. The Organisational Models are constantly monitored and updated, with particular attention to crime prevention and risk assessment following the introduction of new legislation.
As envisaged by the best practices, a board‐style Supervisory Body has been appointed and is in operation at the Group's Spanish branch. In 2018, the Supervisory Body of the Spanish branch adopted its own code of operations, prepared a business and audit plan, and delivered training sessions on the Model (including, in particular, sessions relating to the principles of the Recordati Group Code of Ethics and anti‐corruption) to all branch staff.
Further information regarding the Organisational Models pursuant to Legislative Decree no. 231/2001, the relative procedures and the training provided on the same is available in the "Internal Control and Risk Management System" section of the Corporate Governance Report and Ownership Structure.
The systematic approach of the Organisational, Management and Control Model pursuant to Legislative Decree no. 231/2001 is reinforced though additional models dedicated to specific company departments, such as in the context of health and safety in the workplace, environmental management and privacy.
In terms of data processing and privacy, the Recordati Group has adopted the new General Data Protection Regulation (GDPR no. 2016/679). The project has enabled all Group Companies to adopt the measures envisaged by the European regulation. More specifically, compliance with the GDPR has led to the definition and implementation of a privacy management model with new regulations and company procedures both at Group and local level with Recordati's European branches. In terms of organisation, the most significant event was the appointment of a Data Protection Officer (in the person of the Group Auditing Manager) and a Key Privacy Person in each branch affected by the Regulation. As regards the operational procedures and regulations, a set of Group policies has been adopted, forming the basis for local procedures that have already been adopted by the various branches. Activities to promote the adoption of an IT tool designed to enable improved and more efficient operational activities when implementing company procedures are in progress and will continue in 2019.
The Code of Ethics adopted by all Group Companies provides a concrete and clear representation of the Groups values, including: protection of employees, fairness and equality, ethical and lawful behaviour, loyalty, privacy of information, respect of the interests of all parties, professionalism, health and environmental protection.
The Code of Ethics also provides the rules of conduct for all recipients of the Code, particularly with regard to the subject of the prevention of active and passive corruption (e.g. the prohibition of engaging in corrupt practices). On this issue, the Group has also adopted an Anti‐Bribery Model that applies to all Group Companies and envisages the periodic assessment of the status of internal controls in compliance with the main international and national anti‐bribery regulations in the countries in which the Group has an active presence. These tools represent the firm commitment of the Group to conduct its business in line with the principles of transparency, honesty and ethics in all of the countries in which it operates, and to refuse all forms of corruption, demonstrating its awareness of the potential risks relating to the various relations with the Public Administration typical in the business areas in which the Group operates.
For Italian Companies, the distribution and diffusion of the Code of Ethics is carried out directly by the Parent Company: all new employees are provided with a copy of the Code of Ethics, which is also available on the company website. In 2018, the Code of Ethics was distributed to the Group's international branches. In total, in 2018 the Code of Ethics was delivered to 1,325 employees. Furthermore, Recordati offers continuous training to all employees: in 2018 training on the Code of Ethics and the Organisational Model pursuant to Italian Legislative Decree no. 231/2001 in Italy was delivered to around 300 employees of the Group's Italian Companies in lecture theatres and through remote learning.
As well as Group employees, all providers and commercial partners of the Recordati Group are required to comply with the Code of Ethics within its relevant scope of application, through:
The current version of the Recordati Group Code of Ethics will be subject to a general review in 2019. Without prejudice to the principles set forth in the Code, the document will be reviewed with a view to improving its legibility and usability and will be updated with additional conduct guidelines.
The Recordati Group is deeply committed to conducting its business in line with the principles of transparency, honesty and ethics in all of the countries in which it operates, and to refuse all forms of corruption, demonstrating its awareness of the potential risks relating to the various relations with the Public Administration typical of the business areas in which the Group operates. To this end, since 2009 the Group has conducted an assessment on its internal controls in line with international and national Anti‐Bribery legislation in the countries in which the Group has an active presence. Furthermore, the Group has developed an Anti‐Bribery programme that involves the staff of the Parent Company and branch staff in four key stages:
assessment of local and national legislation;
From the analysis of the documentation and information collected, 13 business areas potentially exposed to the risk of corruption were identified, upon which the conduct guidelines to avoid corruptive behaviour were based. On the basis of this analysis, the Group implemented an Anti‐Bribery Manual.
The 13 areas potentially exposed to corruption risk are: Research and Development, Production, Relations with the medical community and healthcare facilities, regulatory activities, transactions with public authorities, consultancy, medical samples, courses and conferences, promotional material, contributions and donations, financial transactions, human resources and relations with politicians or political parties.
The Manual has been distributed to Recordati branches in Spain, France, Russia, Turkey, Portugal and Germany and is currently being rolled out to the remaining branches.
The current version of the Anti‐Bribery Manual is currently being reviewed and an updated version of the Manual is expected to the distributed to all Group Companies in 2019.
In order to improve communication, coordination and control activities between the Parent Company and the various branches, in 2018 specific data streams on the subject of anti‐corruption and anti‐terrorism were defined which would enable, through dedicated channels managed by the Group Audit Department, the identification and management of potential risk situations. This data stream system will be implemented in 2019.
In terms of communication and training on the subjects of anti‐corruption and the principles ratified by the Recordati Group Code of Ethics, in 2017 all members of the Board of Directors of Recordati S.p.A. were informed of the policies and procedures adopted. Furthermore, in 2018 anti‐corruption training was given to 933 employees, 292 of which were in Italian branches with the remaining 641 located in the Group's foreign branches.
For some time now, the Company has provided for dedicated whistleblowing channels in its Organisational Models pursuant to Legislative Decree no. 231/2001 for Italian Companies and the Group Anti‐Bribery system2 . In 2018 these whistleblowing channels were strengthened with the introduction of other communication tools: in the Group's French branches a new procedure was implemented and new reporting channels were introduced in compliance with new local legislation (Loi Sapin 2) while in Italian branches ‐ which were already in compliance with Law no. 179/2017 concerning "Provisions for the protection of whistleblowers of offences or irregularities which come to their knowledge in the context of a public or private working relationship" (so‐called "Whistleblowing Law") ‐ improvements are being made to the reporting system.
In addition, it should be noted that in 2018 an employee of the Belarus representative office was investigated in a criminal proceeding in which the alleged offense was that of corruption. The investigation by the Belarusian authorities is under way. The company is conducting its own internal audits.
These tools and additional information regarding the fight against corruption are described in more detail in the "Internal Control and Risk Management System" section of the Corporate Governance Report and Ownership Structure.
2 Corporate Governance Code, comment to Article 7: " The Committee deems that, at least for companies belonging to the FTSE MiB index, an adequate internal control and risk management system must include an internal whistleblowing system for employees to report any irregularities or breaches to applicable legislation and internal procedures (so‐called whistleblowing system) in line with national and international best practices, which guarantees a specific and confidential informational channel as well as the anonymity of the whistleblower".
The Internal Audit and Risk Management System is a structured and organic set of procedures and organisational structures aimed at preventing or limiting the consequences of unforeseen results and enabling the achievement of company objectives, compliance to legislation and regulations, and the correct and transparent disclosure of information both internally and to the market. Furthermore, this System enables the identification, measurement, management and monitoring of the main risks in order to promote the efficiency and efficacy of company processes, protect the value of the Group's activities, ensure the reliability and integrity of accounting and management information and ensure that transactions comply with all existing legislative measures.
The Internal Audit and Risk Management System is based on an Enterprise Risk Management (ERM) approach and consists of a structured risk management process, in line with the provisions of international best practices on the subject and in compliance with current legislation. The aim of this System is to facilitate activities consistent with the company goals, promoting informed decisions and ensuring the efficiency and efficacy of internal processes, as well as the reliability of financial information. By cataloguing company risks, the System enables the identification, measurement and control of the level of exposure of all Group Companies to various risk factors, as well as the management of overall exposure, and envisages the implementation of control measures and procedures able to flag any anomalies. As described in more detail in the "Principle Risks and Uncertainties" section of the Consolidated Financial Statement and the "Internal Control and Risk Management System" section of the Corporate Governance Report and Ownership Structure, the main risk factors to which the Group is exposed relate to the external context, strategic and operational risks (including risks related to Research and Development, the environment, health and safety, and pharmacovigilance risks), financial risks, legal risks and compliance risks.
The Group subjects its Risk Catalogue to a periodic interim review, implementing a bottom‐up approach to critical risk assessment to coincide with significant company activities, such as the definition of the budget, the review of the organisational structure and other events that could have a potential impact on the risks to which the Company is exposed. In particular, the Board of Directors examined the update to the Risk Catalogue in relation to the 2018 financial year, created with the support of the consultancy company, in order to provide an up‐to‐date and formalised framework of the principle internal and external risks of the Recordati Group and the various existing tools and processes for the management of such risks. The Board of Directors, including on the basis of this review, has evaluated whether the level and nature of
the risks identified by the Group Risk Catalogue, presented to the Board at the meeting of 28 February 2019, are compatible with the Group's strategic objectives.
The identification, assessment and management of corporate risks is based on an Enterprise Risk Management (ERM) approach and includes the principle non‐financial risks related to the topics expressly specified by Italian Legislative Decree no. 254/2016.
In particular, the principle non‐financial risks identified by Recordati relate to:
The aforementioned risks were identified by the Group and classified as medium‐low risk, in terms of residual risk, assessed in terms of the likelihood of an at‐risk event and the impact of such an occurrence. In fact, in relation to such risks, the Group has adopted specific policies, management models and activities aimed at the mitigation of the same.
A brief description of the principle non‐financial risks identified by the Group and related to the material topics of the Recordati Group, as well as the procedures in place for their management and mitigation, is given below:
out by dedicated organisational departments and by the continuous training of personnel on compliance with ethical standards and industry legislation. In order to promote increasingly transparent relations with the medical community, the Group's branches publicly disclose Value Transfers in relation to business meetings, consultancy and donations. Finally, the Anti‐Bribery Manual aims to promote correct conduct in the various activities relating to scientific information and more generally to relations with the medical community and areas exposed to corruption risk.
Topics relating to product responsibility: these refer to Product Liability risks with the potential need for product recalls, impacts on patient health and consequent economic or reputational impacts for the company (including the risk of demands for compensation as a result of side effects caused by its products). For this reason, the Group has appointed specific quality control personnel that carry out specific product analyses in order to identify the "robustness" and reliability of the production processes. These professional figures, required by industry legislation, such as the "Qualified Person", the "Quality Assurance Officer" and the "Quality Manager" are responsible for ensuring compliance with Good Manufacturing Practices envisaged by specific internal procedures and existing legislation. Further control measures related to the topics outlined above include inspections of the Group's production units by third party bodies, as well as the constant increase in authorisations held by the Group's pharmaceutical laboratories.
This information is described in more detail in the "Focus on the Environment", "The Recordati Group's Employees" and "The Supply Chain" sections of the Non‐Financial Statement and the "Health, Safety and the Environment" section of the Annual Report 2018. For a more detailed description of the management system of company risks, including the aforementioned non‐financial risks, as well as the relative management methods, please refer to the "Principle Risks and Uncertainties" section of the Annual Report.
| more than € 1 billion | approximately € 2 million3 | 151 audits |
|---|---|---|
| of economic value generated | of donations and | carried out on suppliers to |
| and distributed by the Group | contributions disbursed in | ensure product quality and |
| in 2018 | 2018 | security |
| 45% | 94% | more than 85,000 hours |
| of the Group's workforce | of employees hired on | of training provided to |
| represented by women | permanent contracts | employees |
| ‐ 3% | approximately 30 GWh | almost 17% |
| reduction in water | self‐generated electricity | of the water used in the |
| consumption at production | produced at the Campoverde | Group's production facilities in |
| facilities compared to 2017 | di Aprilia plant | 2018 was recycled and reused |
As noted by the Chief Executive Officer in the Letter to Shareholders of the Annual Report, in 2018 the Recordati Group launched various initiatives regarding sustainability, in line with its strategic, organisational and operational characteristics. When defining the Group's management strategies and policies, in addition to ensuring the Group's development at an international level and focusing on the treatment of rare diseases, one of the Group's current priorities is to consider the interests of all stakeholders, taking into account the economic, social and environmental impacts of our work. Recordati's success as a pharmaceutical firm has brought, and must continue to bring, advantages both to patients and all those who collaborate with the Group: employees, clients, consumers, patients, associations, investors and the financial community, suppliers and strategic partners.
In order to transform the values and principles of sustainability into operational decisions and managerial activities, the internal engagement initiative launched in 2017 has been continued, aiming to:
3 In 2018, as well as € 1.3 million disbursed in donations and contributions to foundations, associations, non‐profit organisations and medical institutions, the Recordati Group also paid out € 657 thousand of the amount allocated in 2017 to the "V. Buzzi" Children's Hospital in Milan, equating to total donations of approximately € 2 million.
Integrating corporate responsibility into a business approach means focusing on creating value for all relevant parties and uniting economic, social and environmental aspects.
In this context, the Recordati Group has identified its own key stakeholders by focusing on its understanding of how the Group's corporate role relates to company activities, with the aim of identifying their expectations and setting significant targets to be achieved.
In order to increase the engagement of all of our stakeholders in their activities, optimising their roles and potential and monitoring the possible direct and indirect impacts of the Group's activities on the relevant parties, the Recordati Group has launched a number of stakeholder engagement initiatives, including:
Furthermore, given the strictly regulated nature of the pharmaceutical sector, industrial associations operating in this area represent one of the most important stakeholders with whom the Recordati Group interacts. These organisations coordinate, protect and promote the interests of the pharmaceutical sector and its associated companies.
In 2018, the Recordati Group collaborated with 65 industry associations located throughout its global business network, ensuring a constant and continuous flow of information.
| ITALY | PORTUGAL |
|---|---|
| Pharmaceutical Industry | APIFARMA ‐ Portuguese Pharmaceutical |
| EFPIA | GROQUIFAR |
| ASSONIME | |
| POLAND | |
| FRANCE | Commercial Chamber "Farmacja Polska" |
| LEEM (Les Entreprises du Médicament) | |
| AFIPA (Association Française de l'Industrie Pharmaceutique pour | CZECH REPUBLIC |
| l'Automédication) | SARAP – Slovenská asociácia spoločností v oblasti liekovej regulácie |
| Club Léonard de Vinci | CASP – česká asociace pro speciální potraviny |
| CRIP (Cercle de réflexion de l'industrie pharmaceutique) | |
| RUSSIA | |
| BELGIUM | GIM‐Unimpresa |
| Pharma.be (General national association of the pharmaceutical industry). | |
| UKRAINE | |
| GERMANY | EBA ‐ European Business Association |
| BAH ‐ Bundesverband der Arzneimittel‐Hersteller e.V. | |
| AGV Chemie‐ Arbeitgeberverband der Chemischen Industrie | TURKEY |
| IHK Ulm ‐ Industrie‐ und Handelskammer Ulm | Pharmaceutical Manufacturers Association of Turkey |
| AKG e.V. ‐ Arzneimittel und Kooperation im Gesundheitswesen e.V. | ICC ‐ The İstanbul Chamber of Commerce |
| Camera di Commercio Italo‐Turca | |
| Camera di Commercio Italo‐Tedesca (Deutsch‐Italienische Handelskammer) |
Çerkezköy Organized Industrial Zone |
| Pharma‐Lizenz Club | Çerkezköy Chamber of Commerce and Industry |
| Wirtschaftsrat der CDU | Istanbul Chemicals and Chemical Products Exporters' Association |
| The Union of Chambers and Commodity Exchanges of Turkey | |
| Senat der Wirtschaft | YASED (International Investors Association) |
| BPI – Bundesverband der Pharmazeutischen Industrie e.V. (The German Pharmaceutical Industry Association) |
|
| GREECE | |
| SWITZERLAND | Camera di Commercio Italo‐Ellenica |
| Swiss Association of the Pharmaceutical Industry | SFEE ‐ Member of Hellenic association of Pharmaceutical Companies |
| Business Association Chemistry, Pharma, Biotech | |
| Swiss Healthcare Licensing Group | TUNISIA |
| Swiss Health Quality Association | CNIP ‐ The National Chamber of Pharmaceutical Industry |
| The Council of the Pharmacists Association. | |
| AUSTRIA | |
| PHARMIG ‐ Verband der pharmazeutischen Industrie Österreichs | UNITED KINGDOM |
| ABPI ‐ Association of the British Pharmaceutical Industry | |
| SPAIN | |
| Farmaindustria | UNITED STATES |
| Anefp (National Association of OTC products) | American Association of Pharmaceutical Scientists |
| AINFA | American Chemical Society |
| BIO ‐ Biotechnology Innovation Organization | |
| IRELAND | DIA ‐ The Drug Information Association |
| Bio Pharmachemical Ireland (BPPCI) | Global Genes |
| IPHA (Irish Pharmaceutical and Healthcare Association) | Healthcare Distribution Association |
| National Irish Safety Organization | International Society of Pharmaceutical Engineers |
| IBEC (Irish Business Employers' Confederation) | Parenteral Drug Association |
| Cork Chamber of Commerce | RAPS ‐ Regulatory Affairs Professional Society |
| Institute of Environmental Management and Assessment (IEMA) – | |
| Production | CANADA |
| Irish Exporters Membership ‐ Logistics | LSO ‐ Life Sciences Ontario |
| PMI (Pharmaceutical Managers of Ireland) | |
| MMRI (Medical Reps Institute of Ireland) | |
| TOPRA (The Organization for Professionals in Regulatory Affairs) | |
In order to identify the main sustainability issues that relate to its business, in 2017 the Recordati Group launched an internal stakeholder engagement initiative in collaboration with senior management. The initiative promoted the discussion and debate of a range of economic, social, environmental, governance and product issues deemed significant for the industry and specifically required by Italian Legislative Decree, no. 254/2016. Given the continuity of the Group's business, the materiality analysis and the relative results obtained were deemed valid for 2018 and consistent with the indications of the reporting standards and macro trends observed in the sector.
The materiality index represents the 22 issues selected according to their economic, social and environmental relevance both for the Recordati Group and for the relevant stakeholders.
The Recordati Group's materiality index
The 22 topics highlighted by the materiality analysis are covered in this Statement in line with the reporting standards and the provisions of Italian Legislative Decree no. 254/2016.
It is noted that the issue of human rights, one of the significant themes highlighted by the materiality analysis, is expressed by the Group through its management of relations with employees, collaborators and supply chain operators in a manner that respects the principles and values of the Group's Code of Ethics. In fact, the Group is committed to respecting basic human rights in accordance with the Conventions of the International Labour Organisation in all of the countries in which it operates. For more detail on the policies adopted relative to this topic, please refer to the relevant sections (e.g. "Supply chain", "Diversity and equal opportunities", "Health and safety in the workplace") of the Non‐Financial Statement.
During 2018, the activities of the Recordati Group in the field of the research and sale of medicines represented an important profitability factor for the Group and generated various economic advantages, including direct benefits for stakeholders through the distributed economic value as well as indirect benefits for the various associations or third‐party organisations which receive donations and contributions from the Group.
The Economic Value represents the wealth generated by the Recordati Group which is then distributed in various forms to stakeholders. Data regarding the creation and distribution of the economic value provides a basic indication of how the Group has generated wealth for its stakeholders, highlighting the economic benefits produced by the Group's entrepreneurial management which are directly shared with the main categories of stakeholders with whom the Group interacts and maintains medium to long‐term relations: suppliers (reclassified operating costs), human resources (remuneration of human resources; staff costs); shareholders (remuneration of shareholders: profit distribution), financial institutions (remuneration of financial institutions: financial charges) and the Public Administration (remuneration of Public Administration: taxes and duties).
In 2018, of the € 1,353 million of Economic Value generated by the Recordati Group, approximately 86% (equal to € 1,162.9 million) was distributed as follows:
4 The value of the dividends distributed to shareholders refers to the balance for the 2017 financial year resolved in April 2018 for € 87.1 million, and the account for the 2018 financial year resolved in November 2018 for € 91.8 million.
Our commitment to providing support to patients is an intrinsic value of the Recordati Group and is evidenced in the development of social projects and initiatives to support organisations operating in the field of health and medication. These include activities implemented by the Group each year to support the numerous associations that focus on the treatment of diseases and improving the quality of life of patients and their families, and research projects and initiatives by supporting social and cultural institutions which carry out their work diligently and passionately every day. In 2018, as well as € 1.3 million disbursed in donations and contributions to foundations, associations, non‐profit organisations and medical institutions, the Recordati Group also paid out € 657 thousand of the amount allocated in 2017 to the "V. Buzzi" Children's Hospital in Milan, equating to total donations of approximately € 2 million. 44% of the total was allocated to activities aimed at the treatment of rare diseases while the remaining 56% refers to contributions and donations awarded to social and cultural organisations and institutions in various countries: Italy (66.5%), Portugal (12.2%), France (11.6%), Spain (8.7%) and Germany (1%).
5 The distribution of the Economic Value generated and distributed to various categories of stakeholders represents a quantifiable indicator for the calculation of the economic value, processed according to the GRI Sustainability Reporting Standards.
The donation of € 657 donated in 2018 to the "V.Buzzi" Children's Hospital in Milan represents approximately 33% of the funds allocated in 2017 (€ 2 million), used to further the redevelopment of the paediatric wards and the neurological outpatient unit. This initiative aimed to facilitate the redevelopment of the new Paediatric Ward and the construction of a new Neurology Department, representing the first important step in implementing the project at Milan's Children's Healthcare Centre. This contribution demonstrates the Recordati Group's desire to continue its key investment role in a project that will enable the community of Milan to achieve important targets and provide an increasingly high level of care in the paediatric sector.
As well as monetary donations, the Recordati Group provides a constant and significant contribution in the countries where its Companies are located by developing and implementing social and community initiatives, events and projects aimed at vulnerable groups, foreigners, people with disabilities and, more generally, people experiencing any kind of disadvantaged or difficult situation. The type of contribution offered depends on the people to whom it is directed and the characteristics of the association in question. In particular, the following initiatives are worthy of note:
Rare diseases are predominantly genetic disorders that can affect patients of any age, gender and ethnicity, and involve every category of medical specialisation. These are chronic, often fatal or severely debilitating diseases which have a great impact on patients, their families and on society. A disease is defined as rare when its prevalence, understood as the number of cases in a given population, does not exceed a predefined threshold; in Europe this is 0.05% of the population, or 5 cases per 10,000 people. In order to treat these diseases, specialist medical products known as "orphan drugs" are developed.
The Group companies operating in the rare diseases sector, Orphan Europe S.a.r.l.and Recordati Rare Diseases Inc., share the principle that every person affected by a rare disease has the right to the best treatment possible. For this reason, the activities carried out by Orphan Europe S.a.r.l. and other Group Companies include support for patient associations for people affected by rare diseases, which help patients and their families by facilitating access to orphan drugs and treatment centres. Furthermore, Recordati's orphan drug specialists (ODS) actively collaborate with the medical community to facilitate dialogue between hospitals with limited expertise of rare diseases and specialist medical centres able to diagnose and treat rare conditions in an appropriate manner.
The US Company Recordati Rare Diseases Inc. (RRD) has developed two distinctive programmes to provide assistance to patients eligible for financial support for their products: the Patient Assistance Program (PAP), valid for all products, and the Co‐Pay Assistance Program (CAP) available for three drugs (Carbaglu, Cystadane and Panhematin):
The "Course des Héros", one of the most important charitable events in France, is an annual appointment organised by the Group Company Orphan Europe. Over the last four years the Orphan Europe team has collaborated with the L'Envol Association to raise funds for "Recreational Therapies" organised for seriously ill children hospitalised in the association's dedicated facilities. At the event in Paris on 17 June, ten Orphan Europe team members raised a total of € 2,640 to be donated to L'Envol. The race, which raised a total of € 2 million, is an opportunity to demonstrate our engagement in providing care for patients and their families. In its 20 years of operation, L'Envol has welcomed 7,500 children aged between 7 and 17 in its facilities managed by medical experts and volunteers.
In order to guarantee the highest possible levels of health and safety for patients, the Group is committed to guaranteeing product quality and safety throughout the Recordati supply chain, from the research and development phase for new products to the procurement of raw materials and the production and commercialisation of registered medicines.
During the research phase, specific clinical studies are carried out in order to ensure the efficacy and safety of the products and confirm the absence of any possible dangerous side effects. Furthermore, the results of these studies are assessed by national and European regulatory bodies before authorisation is given to commercialise the medicines on the market.
Throughout the supply chain, our suppliers are selected and regularly assessed according to audit schedules in order to verify compliance with certain criteria, from environmental factors to the quality of the ingredients.
During manufacture, all medicinal products are produced in accordance with Good Manufacturing Practices in plants authorised by the relative local regulatory bodies. Our plants are constantly subject to inspections and checks to ascertain compliance with current legislation and internal regulations.
In the product commercialisation phase, the Recordati Group has implemented a system to guarantee compliance with European Directives regarding anti‐counterfeiting, respecting the requirements of the European Union with regard to product serialisation and the use of quality seals on product packaging. Furthermore, when handling all complaints made regarding its products, the Group investigates any possibility of counterfeiting.
Finally, the Recordati Group operates a post‐sale pharmacovigilance policy, enabling doctors and patients to promptly notify the Group of any significant events or adverse reactions experienced during the use of Recordati medicines.
The Recordati Group operates in full compliance with legislation and regulations in different fields thanks to dedicated and qualified employees. The Group's Code of Ethics states: "ensuring the compliance of all conduct with applicable legislation and ethical regulations is a mandatory prerequisite for Recordati and our collaborators in every country in which we operate".
Important company figures in this regard include the managers of the Pharmacovigilance Department, the Scientific Department, the Clinical and Manufacturing Quality Assurance Departments and the Regulatory Affairs Department, as well as the Qualified Person, the Health, Safety and Environment Manager and the Compliance Officer. Activities aimed at ensuring compliance with legislation and regulations are undertaken in compliance with international best practices and are constantly examined through inspections conducted by commercial partners, authorities or certification bodies. In this regard, the Recordati Group complies with the regulations issued by industry certification bodies and has been awarded the GMP (Good Manufacturing Practice) certification for product quality and safety at its plant in Cork, which is valid until 11/01/2020. The Campoverde di Aprilia site is regularly inspected by the Italian Medicines Agency, the US Food and Drug Administration, the Brazilian Agência Nacional de Vigilância Sanitária and the Korean Food and Drug Administration and is certified by the Japanese Ministry of Health.
As regards cases of non‐compliance, in 2018 the Group recorded a limited number of episodes: in fact, only a small number of Group branches recorded breaches and/or disputes reported by local authorities:
Finally, it is noted that in relation to the information provided in the Non‐Financial Statement 2017, in 2018 the Portuguese branch completed the action plan drawn up by the Parent Company regarding the consolidated processing of information relative to pharmacovigilance activities. This action plan was launched in response to a specific request issued by the Portuguese authorities following a branch inspection.
The Group is constantly committed to Research & Development activities, implemented through the development and launch of pipeline pharmaceuticals and the acquisition of new specialities. In particular, in recent years Recordati has focused its efforts on the research and development of pharmaceuticals to treat rare diseases and urological conditions.
Over the last few years, the development of new pharmaceuticals, both through internal research programmes and through R&D opportunities in partnership with external companies and research institutions, has been a fundamental element in enriching the pipeline and ensuring the Group's future growth.
The Group's intellectual property is protected by its patents, which enable Recordati to transform its R&D investments into a profitable activity. Following a positive outcome of the patent criteria assessment (principally relating to new products and innovative development phases) according to local laws and legislation, the award of European and international patents provides for patent protection in a great number of companies.
This protection, which varies from country to country, depends on the type of patent application and the intended objective. The patent application may be formulated to protect new compounds, manufacturing processes, medical indications, devices and the composition of materials. In countries where the Group files an application to gain patent protection, the duration of the same is generally twenty years, beginning from the date of filing. This period may be extended for a maximum of five years in certain countries, particularly in Europe and the United States, following the approval of the pharmaceutical product by the local Health Authorities.
The patent portfolio is regularly monitored in collaboration with the operational units involved, in order to identify potential breaches and take any necessary legal action. The Group also benefits from the protection of international intellectual property rights through licensing agreements for products and compounds that have been patented by other companies.
As at 31 December 2018 the Group held 563 patents, of which 12 were granted in 2018.
Trademarks also protect the Group's intellectual property. This protection, which varies from country to country, refers principally to their use and registration. Trademark rights are obtained based on national, international and EU registrations, and are generally granted for renewable periods of 10 years. The Group holds around 7,300 registrations for 900 trademarks filed in the name of various companies. Approximately 50% of the trademarks are currently in use.
For more information on the Group's research and development activities please refer to the "Research and Development" section of the Annual Report.
The supply chain of the Recordati Group operates within a highly regulated market and is characterised by the search for efficiency both in terms of financial viability and the maintenance of the supply chain. The Recordati Group is served by approximately 14,500 suppliers, predominantly located in the countries in which the Group operates manufacturing plants or has a commercial presence. The supply chain is characterised by the purchase of direct ingredients (active substance, packaging material, excipients and chemical intermediates), finished products and indirect services required for regular operation (consultancy services, marketing, supplies, licensing, etc.). In this regard, the main purchase categories are represented by APIs (Active Pharmaceutical Ingredients), packaging, industrial products and services and finished products.
In 2018 the Recordati Group interacted with around 450 certified API suppliers principally located in Europe and India. Approved suppliers for the packaging of medicinal products produced directly in the Group's plants numbered approximately 200, located principally in the countries in which the Group has a manufacturing site (of these, approximately 10% are approved suppliers for two or more factories). Suppliers of industrial materials and services for use in the Group's plants numbered approximately 1,400, with a pronounced local presence due to the type of goods and services. Finally, it should be noted that there are approximately 130 suppliers of finished products at Group level, with a pronounced predominance of European producers.
Percentage subdivision of the three supplier categories of the Recordati Group by location, 2018
In order to operate within the Recordati Group, our suppliers are selected and approved according to two different methods for direct and indirect products. For the purchase of indirect materials and services, information regarding the suppliers' economic and financial position is collected through documentational evidence and research. For the purchase of direct materials, potential suppliers are subjected to financial checks and are required to follow a regulated documentation collection procedure in line with GMPs and GDPs (Good Manufacturing Practices and Good Distribution Practices) before undergoing a strict monitoring and auditing process.
In order to standardise the selection process, in 2015 the ATTITUDE project was launched, aimed at implementing a new purchase management policy at Group level using an eProcurement platform. The project aims to promote transparency in the procurement process in terms of supplier assessment and effective negotiation in line with the distribution of procedures and tools at a centralised and local level. Our supplier selection criteria include:
This management process was successfully implemented in Italy in 2016. Recordati has set itself the target of extending the initiative to all Group Companies by the end of 2021, in order to create a unique and shared supplier database.
In order to ensure the safety of its products and verify the compliance of its suppliers with quality, environmental, health and safety legislation and regulations, the policies implemented by the Recordati Group include periodic audits of the supply chain, as well as continuous inspections and self‐inspections within its own manufacturing plants.
One of the main control measures implemented in the supply chain are the audits carried out by the Group at third‐party pharmaceutical companies which produce medicines, as well as suppliers of APIs, excipients and packaging. As well as assessments at the supplier approval stage, the supplies provided by suppliers are constantly monitored for quality assurance purposes.
In line with the current procedures for supplier approval, all suppliers, particularly those supplying active substances, excipients and services, are subjected to periodic audits as defined by a risk assessment rating. In fact, in 2018 the Pharmaceutical Division of the Recordati Group conducted 151 supplier audits, of which 20% related to third‐party manufacturers, 42% to suppliers of active substances, 13% to suppliers of packaging, 24% to service suppliers and 1% to suppliers of excipients.
Subdivision of supplier audits conducted by the Pharmaceutical Division by product category, 2018
Regarding supplier inspections carried out by the Chemical and Pharmaceutical Division, it should be noted that in the course of 2018 the Campoverde di Aprilia plant conducted ten audits of suppliers of raw materials.
The production plants of the Recordati Group are regularly subjected to internal or external inspections (the latter by competent authorities, third‐party companies and clients) in order to verify compliance with product quality regulations.
During the production phase, every single batch of Recordati medicines is produced in accordance with the dossiers approved by the relative health authorities and is subject to controls designed to ensure their quality.
Within its own pharmaceutical plants, the Group is committed to maintaining a quality control system that fulfils all national and international requirements, guidelines and standards for the production of finished pharmaceutical products. In particular, the manufacturing plants operate in line with GMPs (Good Manufacturing Practices) and are regularly verified by inspections conducted by national and international competent authorities. The Quality Control departments are responsible for the control of procured raw materials and the finished products in accordance with the relative procedures, approved methods and the pharmacopoeial monographs.
In 2018, a total of 138 inspections and audits were carried out at the Group's pharmaceutical plants in order to assess product quality and safety. Of these, 87 (63%) were self‐inspections carried out by the Group at its own plants while the remaining 51 were carried out by competent authorities (Health Ministries, Agencies, Certification Bodies, FDA and AIFA) and third‐party companies.
Subdivision of quality and safety inspections/audits carried out at Group pharmaceutical plants in 2018
Among the inspections received in 2018, the pharmaceutical plants received inspection from regulatory bodies in order to review/grant manufacturing authorisations. In this regard, the inspections conducted by the Russian authorities at the plants in Utebo (Spain), Nanterre (France) and Cerkezkoy (Turkey) and by the Danish authorities in Cerkezkoy (Turkey), were of particular note. While those carried out in Utebo and Nanterre were predominantly aimed at renewing existing authorisations, those carried out in Cerkezkoy were aimed at authorising the site to produce certain specialist pharmaceutical products for the Russian and European market, ensuring the presence of a back‐up site for said products/markets. While in the case of Utebo the existing authorisations had already been renewed, post‐inspection procedures are currently in progress at Nanterre and Cerkezkoy (e.g. the presentation of a corrective action plan) in order to bring the process to a successful conclusion.
With a view to constantly improving production, in the course of 2018 inspections were carried out at the plant in Kalaat El Andalous (Tunisia) to obtain the ISO 9001:2015, ISO 14001:2015 and OHSAS 18001:2017 certifications. The outcome of these inspections was positive and the certificates were issued in May 2018.
As well as the inspections conducted by external bodies since 2018, the pharmaceutical production plants were subject to internal audits carried out by the Group's internal Quality Assurance department on an annual basis (not all sites were subject to these controls in the first year but will be from 2019).
With regard to the inspections carried out at the two chemical pharmaceutical plants, it should be noted that an external inspection of the Quality Management System was carried out at the Campoverde di Aprilia plant in 2018 by the US Food and Drug Administration (FDA), the US pharmaceuticals control body. The inspection concerned compliance with GMPs in relation to the production, control and storage of 14 products distributed in the United States, and a positive outcome was obtained with no observations made by the inspecting body. Furthermore, the internal Quality Assurance department conducted 14 internal audits at the plant in Campoverde di Aprilia in the production, quality control and maintenance departments, and was subjected to 26 customer audits. With regard to the plant in Cork, the following inspections were carried out:
Since 2006, the European Federation of Pharmaceutical Industries and Associations (EFPIA) has been developing a standardised medicinal products traceability system as part of the fight against counterfeiting. Working in collaboration with three other European organisations, EFPIA has been involved in the creation of an ambitious coding and serialisation system known as the European Stakeholder Model (ESM). In conjunction with this project, ESM members worked to implement the European Medicines Verification System (EMVS) which aims to regulate the dispensation of medicines to ensure product authenticity.
In this context, in February 2016 the European Parliament issued a regulation dictating the technical requirements for all prescription medicines in order to combat medicines being counterfeited. This regulation will come into force in February 2019. However, certain member states, Italy included, are exempt from implementing this regulation for a further six years due to the adoption of internal anti‐counterfeiting systems at national level. After this date, medicinal products that do not comply with the safety requirements established by this regulation may no longer be commercialised.
In this regard, in 2015 the Recordati Group launched a project to ensure that all medicinal products produced at its own production plants or those of third‐party companies comply with this regulation. The process is continuing in line with the implementation deadlines provided for by legislation and the packs produced for the Group will comply with legislative requirements by January 2019. In order to prevent unforeseen circumstances and/or delays, reserve stocks have been established according to a risk assessment plan, so as to ensure continuity of supply for all products. All equipment was successfully installed according to the envisaged deadlines in the four pharmaceutical plants involved in the project. All information generated in regard to the serialisation of individual packs shall be collated in a database designed to enable the in‐out management of all third‐parties of the Group as part of a European data collection system.
Similar initiatives aimed at combating the counterfeiting of medicinal products have been launched or are currently being implemented in various countries in which the Group operates. In particular, in Turkey, China, the USA and Korea, the medicinal products commercialised by the Recordati Group already comply with these safety requirements, while the Group's sites in Russia will conform in the course of 2019, as provided for by local legislation.
The Recordati Group operates in highly specialised sectors including traditional pharmaceuticals, the treatment of rare diseases and chemical pharmaceuticals. In order to operate effectively in these fields, it is essential to collaborate with increasingly highly qualified employees able to bring professionalism and added value to the Group and enable us to confront and overcome market challenges.
For this reason, the Group policy for the development and optimisation of human resources aims to incentivise professional growth and career development. This policy has been developed through our belief that the Group's results are closely linked to the ability of our employees to engage their own commitment and talent to reach targets. Furthermore, optimisation of human resources is a key priority when fulfilling company roles. The recruitment process is aimed at selecting the candidates that best respond to the profiles required by company departments in accordance with the given time frames and market cost criteria.
As of 31 December 2018, the Group's workforce was formed of 4,142 employees, with a gender division of 55% and 45% of men and women respectively. The workforce in 2018 was substantially in line with that recorded at the end of 2017 (4,176 employees). At present, the Group's workforce is also supplemented by some 100 resources who collaborate with the Group at various levels; approximately one third of these collaborators is represented by women.
| Number of | 2018 | 2017 | ||||||
|---|---|---|---|---|---|---|---|---|
| employees | Men | Women | Total | Men | Women | Total | ||
| Employees | 2,276 | 1,866 | 4,142 | 2,297 | 1,879 | 4,176 | ||
| Collaborators | 74 | 34 | 108 | 103 | 97 | 200 | ||
| Total | 2,350 | 1,900 | 4,250 | 2,400 | 1,976 | 4,376 |
Percentage breakdown of employees by geographic area, as of 31 December 20186
6 Australasia includes the Turkish branch (Recordati İLAÇ ve Hammaddeleri Sanayi ve Ticaret A.S.) and the Russian branch (RUSFIC LLC).
Subdivision of employees by country, as of 31 December 2018 (no. people)
(*) The item "Other Countries" includes employees who work in Armenia, Benelux, Brazil, United Arab Emirates, Mexico, United Kingdom, Sweden, Hungary, Canada, Australia, Japan and Malaysia.
As regards the breakdown of the Recordati Group's workforce by professional category, 239 employees are Senior Managers (6% of the total), 741 are Middle Managers (almost 18%) while the remaining 3,162 people are ordinary employees (76%). In line with 2017, all Senior Managers, men and women, were recruited locally7 .
Percentage breakdown of Group employees by professional level, as of 31 December 2018
Approximately 64% of the workforce is comprised of employees aged between 30 and 50, around 25% are over 50 and approximately 11% are under 30.
7 Senior Managers recruited locally include those born, or with the legal permanent right to reside (as naturalised citizens or permanent visa holders) in the country in which they were hired.
| 2018 | 2017 | |||||||
|---|---|---|---|---|---|---|---|---|
| Number of employees |
<30 | 30‐50 | >50 | Total | <30 | 30‐50 | >50 | Total |
| Senior managers | 1 | 130 | 108 | 239 | 1 | 138 | 98 | 237 |
| Middle managers | 20 | 462 | 259 | 741 | 18 | 405 | 175 | 598 |
| Staff | 418 | 2,053 | 691 | 3,162 | 455 | 2,167 | 719 | 3,341 |
| Total | 439 | 2,645 | 1,058 | 4,142 | 474 | 2,710 | 992 | 4,176 |
Percentage breakdown of Group employees by professional level and age, as of 31 December 2018
The selection process outlined by the recruitment policy can take place internally, through the development of horizontal and vertical career paths designed to develop the technical and professional skills of employees already operating within the Group through the self‐application system, or externally through recruitment campaigns conducted directly or through the use of approved recruitment agencies.
In order to optimise the development of human resources, in the case of suitable vacancies and candidates the Group prioritises the recruitment of internal employees. For junior positions, the recruitment process begins at university level, focusing on undergraduates in their final year or new graduates who have been selected according to their university or Master's specialisation. This policy offers young people the opportunity to embark on a professional development programme within the Group through placements and apprenticeships, in particular in the areas of Finance, Research and Development, Marketing and Industry. To select the best candidates, the Group uses an internal Assessment Centre that aims to assess the transferable skills and communication abilities of the young candidates.
With a view to standardising the selection of candidates, a "Recruiting Grid" has been implemented in the HR departments of the various Group Companies, aimed at supporting line managers involved in the selection of a new employee during the candidate interviewing process. In a nutshell, this initiative provides a series of prompts aimed at exploring if, and to what extent, the candidate possesses the managerial skills that characterise employees of the Recordati Group. During the interview, the manager draws on a series of suggestions on how to engage with the interviewee, such as how to pose questions and which aspects to develop further. Furthermore, the "Recruiting Grid" offers various positive and negative indicators to indicate whether a candidate possesses a certain skill.
In 2018, 653 new employees joined the Recordati Group, with an inbound turnover rate (the ratio between the number of new employees and the total Group workforce as at 31 December 2018) of approximately 16%, while the number of employees who left the company was 687 (with an outbound turnover rate ‐ the ratio of number of people leaving the Group to total Group workforce as of 31 December 2018 ‐ of around 17%).
| Number of | 2018 | 2017 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| employees | <30 | 30‐50 | >50 | Total | Turnover % | <30 | 30‐50 | >50 | Total | Turnover % | |
| New employees entering the Group | |||||||||||
| Men | 84 | 209 | 32 | 325 | 14% | 92 | 183 | 26 | 301 | 13% | |
| Women | 101 | 208 | 19 | 328 | 18% | 97 | 212 | 21 | 330 | 18% | |
| Total | 185 | 417 | 51 | 653 | 16% | 189 | 395 | 47 | 631 | 15% | |
| Turnover % | 42% | 16% | 5% | 16% | 40% | 15% | 5% | 15% | |||
| Employees leaving the Group | |||||||||||
| Men | 50 | 245 | 51 | 346 | 15% | 55 | 207 | 25 | 287 | 12% | |
| Women | 70 | 238 | 33 | 341 | 18% | 76 | 173 | 35 | 284 | 15% | |
| Total | 120 | 483 | 84 | 687 | 17% | 131 | 380 | 60 | 571 | 14% | |
| Turnover % | 27% | 18% | 8% | 17% | 28% | 14% | 6% | 14% |
Subdivision of total employees entering and leaving the company by gender and age, as of 31 December
| 2018 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Number of employees |
<30 | 30‐50 | >50 | Total | Turnover % | <30 | 30‐50 | >50 | Total | Turnover % | |
| Employees joining the Group ‐ Europe | Employees leaving the Group ‐ Europe | ||||||||||
| Men | 42 | 104 | 21 | 167 | 11% | 17 | 73 | 40 | 130 | 9% | |
| Women | 43 | 117 | 19 | 179 | 15% | 30 | 123 | 29 | 182 | 15% | |
| Total | 85 | 221 | 40 | 346 | 13% | 47 | 196 | 69 | 312 | 12% | |
| Turnover % | 47% | 14% | 4% | 13% | 26% | 13% | 7% | 12% | |||
| Employees joining the Group ‐ Australasia | Employees leaving the Group ‐ Australasia | ||||||||||
| Men | 25 | 81 | 9 | 115 | 20% | 24 | 140 | 7 | 171 | 30% | |
| Women | 27 | 69 | 0 | 96 | 22% | 21 | 90 | 1 | 112 | 26% | |
| Total | 52 | 150 | 9 | 211 | 21% | 45 | 230 | 8 | 283 | 28% | |
| Turnover % | 37% | 18% | 22% | 21% | 32% | 28% | 20% | 28% | |||
| Employees joining the Group ‐ Africa | Employees leaving the Group ‐ Africa | ||||||||||
| Men | 17 | 22 | 0 | 39 | 24% | 9 | 32 | 4 | 45 | 27% | |
| Women | 30 | 18 | 0 | 48 | 23% | 19 | 22 | 1 | 42 | 20% | |
| Total | 47 | 40 | 0 | 87 | 23% | 28 | 54 | 5 | 87 | 23% | |
| Turnover % | 41% | 17% | 0% | 23% | 25% | 23% | 29% | 23% | |||
| Employees joining the Group ‐ America | Employees leaving the Group ‐ America | ||||||||||
| Men | 0 | 2 | 2 | 4 | 14% | 0 | 0 | 0 | 0 | 0% | |
| Women | 1 | 4 | 0 | 5 | 18% | 0 | 3 | 2 | 5 | 18% | |
| Total | 1 | 6 | 2 | 9 | 16% | 0 | 3 | 2 | 5 | 9% | |
| Turnover % | 33% | 24% | 7% | 16% | 0% | 12% | 7% | 9% |
The Recordati Group believes that offering a stable and long‐lasting working relationship is an important factor to promoting employee motivation and represents an essential element of the Group's growth and economic development. For this reason, 94% of all resources are recruited on permanent contracts while 6% are on temporary contracts, in line with the data for 2017.
Subdivision of employees by contract type (permanent or temporary) and gender, as of 31 December
| 2018 | 2017 | ||||||
|---|---|---|---|---|---|---|---|
| Number of employees | Men | Women | Total | Men | Women | Total | |
| Permanent Contracts | 2,165 | 1,718 | 3,883 | 2,189 | 1,733 | 3,922 | |
| Temporary Contracts | 111 | 148 | 259 | 108 | 146 | 254 | |
| Total | 2,276 | 1,866 | 4,142 | 2,297 | 1,879 | 4,176 |
Percentage subdivision of employees by contract type (permanent or temporary) and gender, as of 31 December
2018
In order to promote continuous improvement aimed at optimising the sharing of information regarding human resources, in 2017 a feasibility study was launched to assess the possibility of creating a centralised database, with the aim of collating the information (name, contract, wage) of all Group employees and implementing initiatives aimed at promoting maximum intra‐group cooperation. In 2018, assessment activities were continued with the selected partner, a leading multinational HR service provider, prioritising the installation of the HR Administration platform for the Parent Company, with the aim of using it as a basis for the construction of a Group database.
As stated in the Code of Ethics, the Recordati Group is committed to offering equal working opportunities without any discrimination based on ethnic background, age, sexual orientation, physical or mental disability, nationality, religious beliefs or membership of political parties or unions, and guarantees all employees equal and meritocratic treatment. Furthermore, the Code of Ethics states the Group's commitment to "the respect for basic human rights, the prevention of child exploitation and the prohibition of forced or enslaved labour" in compliance with the Conventions of the International Labour Organisation.
As such, all Group departments are committed to: adopting criteria based on merit, skills and professionalism; selecting, recruiting, training, rewarding and managing employees without discrimination; promoting the integration of employees from other countries.
The Group has a good gender balance, with 55% of employees represented by men and 45% represented by women. The workforce is evenly divided by professional category and the gender balance remains broadly in line with the previous year.
| 2018 | 2017 | ||||||
|---|---|---|---|---|---|---|---|
| Number of employees | Men | Women | Total | Men | Women | Total | |
| Senior managers | 167 | 72 | 239 | 160 | 77 | 237 | |
| Middle managers | 382 | 359 | 741 | 320 | 278 | 598 | |
| Staff | 1,727 | 1,435 | 3,162 | 1,817 | 1,524 | 3,341 | |
| Total | 2,276 | 1,866 | 4,142 | 2,297 | 1,879 | 4,176 |
Subdivision of Group employees by professional level and gender, as of 31 December
The Recordati Group always aims to ensure the maximum respect for the human rights of its employees. In this context, the Group's Code of Ethics states that a constant commitment to promoting and consolidating the culture of a safe working environment is one of the fundamental principles of the human resources management policy, aimed at implementing practices and preventative measures to protect the physical and psychological health and safety all Group employees.
All company departments of the Group are committed to creating a working environment where the personal characteristics of individual employees do not form the basis for discrimination of any kind. As such, in compliance with the Conventions of the International Labour Organisation, the Group is committed to respecting basic human rights such as the prevention of child exploitation and the prohibition of forced or enslaved labour. Furthermore, the Group is committed to ensuring a healthy, clean and pollution‐free environment in all of its sites and plants. In its internal and external working relations, the Group prohibits all cases of subjugation by violence, threat, deceit, abuse of authority, harassment of any kind, or exploration of a physical or psychological vulnerability or vulnerable situation.
Managers across all company departments constantly monitor compliance with the provisions of the Code of Ethics and are committed to intervening promptly in the event of any situation that could potentially result in
breaches to the conduct required and promoted by the Group. With reference to the management models adopted by the Group to protect the human rights of its employees, the Group has integrated a management policy which promotes the concept of inclusion, respects diversity and gives all employees a voice in order that every contribution be heard and considered.
As regards industrial relations, the Recordati Group protects the right of employees to join and form unions, supports alternative methods of union representation and collective labour agreements and ensures that union representatives are not discriminated against at their place of work and are free to communicate with their members. The industrial relations model implemented by the Companies of the Recordati Group is based on continuous dialogue and debate, characterised by proper and transparent relations and is aimed at increasing the firm's competitiveness and promoting responsible employment. Approximately 60% of the Group workforce, predominantly located in western Europe, is covered by a collective labour agreement.
The Recordati Group believes that the welfare of its employees is a key element to achieving company targets. In general terms, welfare initiatives vary between countries due to the specific characteristics of different states (regulatory framework, availability of public services etc.) and the existence of previous agreements developed by the various corporate entities before they became part of the Group. The promotion of corporate welfare is part of a wider strategy aimed at managerial innovation and corporate social responsibility and represents a tool to improve relations with employees and internal stakeholders while also developing human, social and relational capital.
Regardless of format, every welfare initiative implemented by the Recordati Group aims to achieve both tangible and intangible results relating to the management of employee relations. In particular, these initiatives aim to promote:
In its approach to employee welfare initiatives, the Recordati Group has always retained a strong belief in the importance of closely supporting employees and their families, offering concrete and proactive assistance particularly in the case of serious health concerns.
To this end, the increased focus on employee welfare at a corporate level in recent months led the Group to commission an external consultancy firm to produce a report on the various welfare systems in Italy's pharmaceutical sector. This report highlighted that the welfare package offered by the Recordati Group is in line with the other companies in the sample for its wide range of additional benefits; these include technical and specialist training programmes, language courses, preventive medicine initiatives (such as flu vaccines and in‐ house specialist appointments), membership of professional institutions, agreements with suppliers (such as public transport operators), company canteens, company vehicles and various health insurance packages. Based on these findings, the short‐term goal is to develop a benefits scheme that further broadens the current welfare system, ensuring constant alignment with the needs of the Group's workforce while also achieving the expected results.
In 2018, the Parent Group launched a flexible benefits system: this system represents an alternative remuneration method for employed work consisting of a range of goods, services and non‐financial benefits offered by the Group to its employees in addition to their "standard" wage package, in order to increase employees' buying power and improve their quality of life. More specifically, this system replaces a percentage of the overall remuneration package with goods and/or services which are usually purchased externally by the employee to meet their personal or family requirements, ranging from grocery or fuel vouchers and the reimbursement of medical or school fees for the employee or their family members, to membership to recreational initiatives and support for the care of elderly relatives. The term "flexible benefits" refers to a fixed allowance allocated to employees that can be "spent" freely on the goods and services which best correspond to their individual requirements.
This package has been designed to offer the broadest possible variety of options, meeting the different needs of a population characterised by diverse ages and requirements. After consolidation at corporate level, the aim is to evaluate the possible extension of the package to other Group companies, in line with the individual characteristics of local legislation, with a view to further standardisation.
At a contractual level and in line with 2017, 98 people opted for part‐time contracts. 80% of employees on part‐ time contracts are women. Compared to 2017, it is noted that the number of men opting for part‐time contracts has risen by approximately 20%.
| 2018 | ||||||
|---|---|---|---|---|---|---|
| Number of employees | Men | Women | Total | Men | Women | Total |
| Part Time | 18 | 80 | 98 | 15 | 81 | 96 |
| Full Time | 2,258 | 1,786 | 4,044 | 2,282 | 1,798 | 4,080 |
| Total | 2,276 | 1,866 | 4,142 | 2,297 | 1,879 | 4,176 |
Subdivision of employees by professional type (full or part time) and gender, as of 31 December
The remuneration system of the Recordati Group is based on the meritocratic "Pay for performance" principle and has been designed to encourage and reward high levels of performance, aligning managers' interests with those of our shareholders. The remuneration strategy aims to ensure that pay corresponds to the responsibilities of each role and individual performance, optimising and retaining key resources while remaining in line with national employment legislation. The remuneration system is composed of basic pay, variable short‐term compensation (variable annual bonus), additional benefits (pension contributions, reimbursement of medical expenses, etc.) and variable mid‐to‐long term compensation (principally represented by stock option plans). The variable short and mid‐to‐long term payments are subject to the achievement of financial results which are measurable, quantifiable and made known to beneficiaries.
The Group's remuneration policy aims to guarantee equal conditions for men and women across all professional levels, rewarding merit and the ability to fulfil the assigned role and meet defined objectives. In terms of remuneration, the ratio between the average basic salary of female employees and male employees is 75% at Senior Management level, 92% at Middle Management level and 96% for all other employee categories. The ratio in terms of total remuneration is 73% for Senior Managers, 88% for Middle Managers and 93% for all other employee categories.
8 The data for 2017 have been revised in line with the new requirements of the GRI Standards that provide for the breakdown in full‐time and part‐time for the total workforce, as a substitute for the GRI G4, which required the breackdown only for permanent employees.
| 2018 | 2017 | |||||
|---|---|---|---|---|---|---|
| Ratio between women and men |
Basic Salary | Total Remuneration |
Basic Salary | Total Remuneration |
||
| Senior managers | 75% | 73% | 70% | 71% | ||
| Middle managers | 92% | 88% | 94% | 87% | ||
| Staff | 96% | 93% | 98% | 90% |
The MBO system plays a key role in the definition of internal engagement and sharing initiatives, aimed at directing the Group's results and the energies and efforts of senior managers and middle managers towards a common goal through the definition of clear, challenging and shared objectives.
In terms of "soft" initiatives, significant importance is placed on the Recordati style of management. Developed through the identification of the distinctive managerial skills that have characterised the Group's evolution over the years and which will continue to overcome future challenges, this managerial approach is implemented through the skills appraisal process which promotes the sharing and discussion of assessments between the "assessor" and the "assessee" (manager and collaborator) in order to optimise and promote Recordati's distinctive managerial style.
Through the combination of MBOs and appraisals, managers are assessed in terms of their achievements (individual targets assigned by the Group) and the way in which these achievements are reached (conduct which displays the use of managerial skills).
More generally, the principle internal engagement initiative is the Management Meeting of the Recordati Group, held each year in Milan. This meeting represents an opportunity for debate and discussion between Managers from all Group Companies and features a series of presentations given by Senior Managers or important figures in the pharmaceutical industry about the Group's results, the advancement of activities, the development of the business and its products and, more generally, any new initiatives which have been launched or are in development.
Achieved targets are discussed and future strategies and developments are defined and reinforced. At the end of the day, a much anticipated and appreciated Awards Ceremony is held to reward the best scientific contributors from each branch. Furthermore, the sector meetings held by each company department with representatives of foreign branches are a smaller‐scale but equally important method of the sharing of methods and tools. Developed as part of the launch of new projects, these events now represent an essential opportunity for debate and orientation, aiming to promote a shared approach and develop the sense of Group belonging in an increasingly complex and multicultural context. At a local level, conventions are organised for local management teams and staff operating in commercial facilities "in the field" (scientific consultants and area managers), representing important opportunities for sharing best practices and discussing commercial themes and products.
9 The variable component of total remuneration differs between Italian and foreign companies. In Italy, this variable component is predominantly composed of MBO programmes (available for all senior managers and around half of all middle managers) and the participation bonus offered to all middle managers and employees except senior managers. Foreign Companies manage the variable component independently through packages similar to MBO programmes which are offered to all employees in line with local regulations.
One of the most important initiatives of an informative nature is the "Inside Recordati" magazine. Presenting the Group's activities and distributed to all employees, the publication features news articles and describes the events and initiatives that have characterised the Group during the given period.
As regards the most recent hires in the Recordati Group, an induction process is now carried out at corporate level. For employees of the Parent Company, this programme consists of a day‐long course for new hires which takes place within six months of recruitment, enabling resources to have developed direct knowledge of the company structure before being guided by HR to receive a comprehensive overview of the organisation of the Recordati Group.
The day course is usually introduced by the Human Resources Manager who explains the Group policies, after which presentations are given to provide background information on the organisational structure, history and characteristics of the company. The morning is brought to a close by a session centred around the Communications and Investor Relations department. The rest of the day consists of talks given by managers of various departments to illustrate the activities and processes of the various business areas. This provides an ideal opportunity for new hires to ask questions or seek clarifications on the business model and the company's adopted policies.
In the second half of the day, a visit is made to the Milan plant, offering a constructive method of learning about the organisation and its processes.
For new resources recruited to sites outside Italy, an individual induction process is carried out at corporate level each time a new employee is appointed to the local Management Team; shortly after hiring, the new member is invited to the head offices to meet the managers of the main departments with whom they will interact as a result of their role, giving both parties an opportunity to get to know one another and also providing an overview of the department's key activities and priorities.
The Group considers the development of human capital as an important professional and personal process that enables employees to understand the key skills required by their role and develop their personal growth though individual training, on‐the‐job training, coaching, mentoring and one‐to‐one counselling.
In this respect, the main initiatives promoted by the Group throughout the year have aimed to define and develop the technical, managerial and linguistic skills of managers, as well as offer training programmes to develop specialised and professional skills.
In line with the previous year, in 2018 the Recordati Group provided over 85,000 hours of training to its employees, equating to 20.6 hours of training pro capita. In particular, 77% of all training hours was provided to staff, 18% to Middle Managers and 5% to Senior Managers. Various types of training courses were offered including management skills, technical commercial skills, technical non‐commercial skills, languages and health and safety.
| 2018 | 2017 | |||||
|---|---|---|---|---|---|---|
| Average number of hours |
Average Average Average number of number of number of hours ‐ hours ‐ Men hours ‐ Total Women |
Average number of hours ‐ Men |
Average number of hours ‐ Women |
Average number of hours ‐ Total |
||
| Senior managers | 16.8 | 25.9 | 19.6 | 16.7 | 26.6 | 19.9 |
| Middle managers | 21.7 | 18.8 | 20.3 | 23.9 | 25.7 | 24.8 |
| Staff | 23.4 | 17.6 | 20.8 | 23.0 | 23.5 | 23.2 |
| Total | 22.7 | 18.2 | 20.6 | 22.7 | 23.9 | 23.2 |
Subdivision of pro capita training times provided to employees by professional level and gender
Percentage breakdown of training hours provided to employees by training type, 2018
The intense expansion and internationalisation project of the Recordati Group has led to the need to develop a system to better understand, evaluate and optimise the Group's human capital. In this regard, in the last few years the Recordati Group has launched a skills evaluation project which is currently being consolidated in Italy and throughout the Group's international branches. The initiative aims to identify, evaluate, optimise and promote the key skills that have characterised the Group's evolution over the years and which will continue to contribute to the Group's success as it confronts new challenges. This is not a simple assessment of performance, which could result in attitudes not in line with the spirit of the project but is an assessment of skills aimed at promoting the continuous development of the Group and the professional growth of each employee. To manage the individual evaluation process, the Recordati Group has implemented a cloud‐based platform (which in 2018 was replaced with a new, more user‐friendly platform with more comprehensive and effective reporting capabilities) in order to ensure standardised procedures, ease of use and the possibility of carrying out assessments involving numerous assessors (but nonetheless respecting the corporate hierarchy) and personalising forms, fields and messages at a global Group level. The project's aim is to promote the professional growth of each employee and ensure the continued development of the Group. Managers assess their collaborators based on skills observed during their working activities. The initial assessment is then reviewed by the manager's superior or the department manager at corporate level. At the end of the assessment period, an internal committee analyses the results and mitigates any elements of subjectivity (calibration phase). The appraisal process is concluded by a meeting between the assessor and the assessed employee in order to share and discuss the results. The Recordati Group has also constructed a Competency Model that links the observed behaviour with a soft skill. Based on these evaluations, the system automatically generates a development programme (accessible on the cloud platform) for each employee to develop any skills that fall below a certain threshold. Finally, the system automatically forwards these proposals to the assessor who is then free to make
amendments, additions or alternatives to the plan. This is the truly innovative aspect of the system and has been deemed highly effective by the HR Innovation Practice Observatory of Milan Polytechnic University.
For "top performers", career and retention plans are defined while "poor performers" are offered programmes to improve their managerial skills. In the future, the same assessment approach will be extended to technical skills as defined by the analysis of the roles in each country. The appraisal system enables all employees to gain a better understanding of their role and helps to construct a development plan. Employees with the required skills and experience may be offered opportunities to develop their role and enhance their performance. Specific tools to assess soft and transversal skills are used to evaluate whether a change of role is appropriate and identify any training that may be required to best encourage professional development.
In 2018, training continued in the same vein as in 2017, with individual training courses (ad hoc courses designed around an individual's needs) and departmental initiatives (ITIL ‐ Information Technology Infrastructure Library ‐ and Prince ‐ Projects in Controlled Environments ‐ for the entire IT team, Project Management for the Auditing team, promotion of best practices and insights on opportunities of the future market scenario for the sales force in terms of Products for Consumers), as well as initiatives aimed at broader areas of the company workforce ("lean organisation" techniques, waste‐free culture, IT security training delivered to all employees at the Milan branch in 2018 and then rolled out to the entire External Sales Force).
Following the assessments made, in 2018 various training and professional development initiatives were implemented. Many of these involved individual initiatives, such as the management coaching tool aimed at professionals operating in Italy and abroad. In most cases these initiatives were aimed at valued resources whose commitment to the Group has been recognised, offering the opportunity to further improve their performance by developing certain management skills such as assertiveness, leadership abilities or organisational skills. All of the projects are implemented with the involvement ‐ from the planning stage onwards ‐ of the manager concerned, the line manager and the HR department at corporate or branch level.
The management coaching initiatives are sometimes combined with technical training delivering one‐to‐one or in small groups, such as the courses held for certain managers of the Orphan Drugs business which focused on the Life Cycle of the pharmaceutical product.
This year, focus was given in particular to Pharmaceutical Research and Development at corporate level and the corresponding operational branches of the Orphan Drugs business, defining a structured plan of activities and projects to effectively support interaction between branches and the Parent Company. After an initial meeting held in Paris in February to launch the project and define its requirements, all resources involved in the project took part in an outdoor training event. At the event, attended by representatives of top management such as the CEO, R&D Manager and HR Manager, the foundations were laid for a business approach inspired by a matrix model. This model revolves around project management skills and aims to guarantee increasing levels of efficiency and efficacy in Research and Development departments.
After the necessary orientation period, employees became increasingly engaged and involved: a further two meetings were held in April and September to strengthen the technical project management skills gained, to promote the sense of team spirit and to share the results achieved in the first few months of work. Employee satisfaction and motivation was very high, while the success of the project was confirmed by a visibly different approach to everyday work.
A second, very technical project focused on the Risk Environment was extended to all employees with a scientific background: the course was custom‐designed by a specialist consultancy firm and featured a modular structure with various levels of detail: all resources in the R&D departments were involved, participating in different modules depending on their level of interest.
Another development‐oriented project concerned the HR Department, with the design and implementation of a 360° feedback system during the appraisal process aimed at providing employees with feedback from their line Manager, colleagues in their own department and in other business units, and collaborators for comparison with their own self‐appraisal, with the entire process managed by a cloud‐based platform. The questions were defined by constructing a skills system consistent with, yet not identical to, the management skills appraisal system, identifying areas and practices that best relate to the Group's culture.
Activities aimed at transversal areas of the workforce sharing similar training requirements include the decision to continue the use of the previously adopted online language training platform in 2018. A training package was put together with the previously selected training provider that combines online and telephone lessons with a considerable increase in the number of one‐to‐one lessons, aiming at teaching grammatical structures, fluency and full comprehension of the course content. Individual one‐to‐one lessons on a weekly or intensive basis are still used in the case of specific professional requirements.
Finally, the "lean" training project continues to be provided, aimed at increasing and consolidating existing expertise within the organisation and promoting the top‐down distribution of specific skills aimed at reducing everyday operational inefficiencies.
The Recordati Group recognises that the protection of the health and safety of its workers is a key priority and responsibility. The Group is committed to implementing a policy to promote initiatives aimed at preventing work‐ related accidents and diseases, minimising the risks that may impact the health and safety of employees and other workers and providing appropriate technical, financial, human and professional resources.
As stated in the Code of Ethics, the Group is committed to "promoting and consolidating a culture of safety, raising awareness of risks, promoting responsible behaviour among all Recipients and working to protect the health and safety of those operating for the Company, including by preventive measures. All company activities are carried out in compliance with current legislation regarding risk prevention and protection, with a constant focus on the improvement of workplace health and safety conditions".
At the Group's production sites, independently of the nature and purpose of the activities carried out, the prevention measures provided for by local legislation apply, aimed at ensuring the constant improvement of workplace health and safety conditions. To this end, technical and organisational measures are implemented, such as:
the provision of training and communications initiatives;
10 The scope of data relative to health and safety and the principle accident indicators for 2018 include:
- employees at the Group's production plants in Italy ‐ Campoverde di Aprilia (Recordati S.p.A.), Ireland (Recordati Ireland Ltd), Czech Republic (Herbacos Recordati S.R.O.), Turkey (Recordati İLAÇ ve Hammaddeleri Sanayi ve Ticaret A.S.) and France ‐ Nanterre (Orphan Europe S.A.R.L)
- employees at production plants and commercial offices in the following sites: Italia ‐ Milan (Recordati S.p.A. and Innova Pharma S.p.A.), Spain (Casen Recordati S.L.), Tunisia (Opalia Pharma) and France – Bouchara (Laboratoires Bouchara Recordati S.a.s.).
However, a reporting system is currently being developed to process data regarding the workforce at all of the Group's offices and commercial sites.
the adoption of appropriate emergency procedures and health check protocols.
All Recordati employees, particularly department Mangers, are constantly reminded to employ the maximum care in performing their activities, strictly observing any safety and prevention measures established and avoiding any possible risks to themselves or their collaborators and colleagues.
In this respect, the Group aims to promote responsibility among the management team through the definition of health and safety roles and responsibilities, and each production plant has a level of autonomy over its health and safety budget. In particular, the person in charge of health and safety oversees working activities and ensures compliance with any received directives, verifying their correct implementation by workers and using personal initiative to carry out their role. In this regard, the Recordati Group complies with the regulations issued by industry certification bodies. In fact, the Tunisian pharmaceutical production plant employs an OHSAS 18001‐ certified Management System.
Activities at each production site are controlled and monitored through inspections and audits.
In particular, in 2018 the production plant in Cork, Ireland received an inspection from the company Ramboll regarding the health and safety procedures in place at the site. The inspection did not reveal any irregularities and the report to certify the plant's compliance with health and safety regulations is currently being produced.
In 2018 the Campoverde di Aprilia plant was inspected by the Commission established pursuant to Article 27, paragraph 6 of Legislative Decree no. 105 of 26 June 2015, in order to ascertain the adequacy of the Fire Prevention Policy adopted by the Manager. This led to the scheduled and systematic control of the technical, organisational and management systems pursuant to Legislative Decree no. 105/15. In particular, the Safety Management System and its compliance to Legislative Decree no. 105/2015 (Seveso) were assessed.
At the Campoverde di Aprilia plant, in order to prevent the occurrence of accidents a series of preventive measures relating to equipment, operating processes, management systems and procedures has been implemented, including a computerised control system for various devices, the installation of locking devices on certain equipment, safety valves for exhaust devices, air pollution control devices and systems to detect the presence of dangerous substances in the atmosphere. Moreover, dedicated fire prevention systems are available on site such as fire‐fighting vehicles and portable fire extinguishers. Standardised procedures regulate the unloading of tank vehicles, the preparation of warehouse stock, the transportation of components, pre‐loading controls and all cleaning, sampling, analysis and shipping operations. In addition, an internal Emergency Plan which described the procedures and measures to be adopted in the case of an incident was approved for the same production plant. An internal Emergency Team ensures a constant presence during each shift to offer the highest possible levels of safety for internal and external personnel.
In the Group's chemical‐pharmaceutical and pharmaceutical plants, various health and safety risk assessment activities were carried out in 2018:
feasibility study was carried out to assess the possibility of expanding the acetone storage facilities at the site. The analysis did not find any factors determining the aggravation of the current risk level pursuant to Legislative Decree no. 105/205 and approval was granted by the Fire Department;
at the Cork plant, a study of the entire thionyl chloride transportation line was concluded, leading to the identification of certain areas for improvement in terms of site equipment and procedures for the transportation phase of the chemical substance from its arrival on site until its deposit in its dedicated storage tank, in order to further strengthen the protection against chemical risk for employees and the public. The implementation of these measures has been scheduled for the first half of 2019, supported by training for the persons involved in the process.
During the year, the Group also implemented initiatives involving various production plants:
façades, walls, etc. On the basis of the results achieved, it is possible to determine the "supporting capacity" of the construction against the measures provided for by legislative measures at the time of construction, identifying any critical issues. In response to the above, at the Milan site the first phase of the evaluation was launched in 2018, consisting of a qualitative analysis of the production plant (first level assessment): document retrieval, geometric and typological surveys, load resistance assessments, crack surveys, temporal evolution analysis, maintenance assessment, assessment of interaction with external elements.
In 2018 the first assessment phase was completed and the second phase is due to continue in the coming months, consisting of an analysis based on experimental and/or analytical surveys (second level assessment) according to the legislation in force at the time of construction.
The Recordati Group believes that training and educating its employees is essential to ensuring the prevention of health and safety risks. For this reason, each production plant implements training plans aimed at workers exposed to specific risks.
All personnel who work within the two chemical pharmaceutical plants (plant in Campoverde di Aprilia and plant in Cork) receive ongoing training in the application of GMPs, environmental protection procedures and workplace health and safety. New employees undergo a training period supported by experienced operators and theoretical lessons delivered by qualified personnel. The training activities at the plants are carried out according to the integrated Quality, Environmental and Safety Training Plan. The main health and safety training and educational activities focus on safety issues relating to the operational activities of managers, safety officers, the RLSSA (Work, Health and Safety and the Environment Representatives), vehicle operators, the emergency team, chemical operators and new employees.
The internal training and education programme was continued at the two chemical pharmaceutical plants in 2018. At the Campoverde di Aprilia factory, more than 1,500 hours of health and safety training was provided to all employees at all levels, in addition to 860 hours of specialist training dedicated to the internal emergency team. In particular, in the Campoverde di Aprilia plant in 2018, 350 people attended internal training courses, in line with the 352 employees who attended in 2017. In line with 2017, the number of people taking part in external training courses remained stable at approximately 250.
Specifically, at the Italian chemical‐pharmaceutical plant the following training initiatives were carried out:
In 2018 the plant in Cork, Ireland recorded 200 training hours on the following topics: first aid, fire prevention and the manual handling of loads. The fire prevention course takes place each year. In 2018, 12 members of the Production Team and one member of the Maintenance Team completed the course and received the necessary training on this subject. Training courses on chemical hazards and first aid are structured differently and the training provided will be brought to conclusion in 2019.
Furthermore, in 2018 various pharmaceutical plants implemented numerous health and safety training programmes:
All work‐related accidents and illnesses regarding the Group's production plants are recorded and managed through the quarterly report prepared by the Risk and Sustainability Control Committee. This system monitors key accident indicators and analyses the causes and circumstances of any incidents. Moreover, health and safety incidents are brought to the attention of the Group's senior management team at least once a year.
| Italy (Campoverde di Aprilia) – Chemical pharmaceutical production plant | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2017 | ||||||||
| Injuries and Injury Index11 | Men | Women | Total | Men | Women | Total | |||
| Accidents in the workplace (No.) | 9 | 0 | 9 | 6 | 0 | 6 | |||
| Accidents during travel (No.) | 3 | 0 | 3 | 2 | 0 | 2 | |||
| Cases of work‐related diseases (No.) | 0 | 0 | 0 | 0 | 0 | 0 | |||
| Severity Index (Lost Day Rate LDR) | 81.0 | 0 | 74.0 | 82.4 | 0 | 75.5 | |||
| Frequency Index/Injury Rate (IR) | 4.7 | 0 | 4.3 | 3.2 | 0 | 2.9 | |||
| Occupational Disease Rate (ODR) | 0 | 0 | 0 | 0 | 0 | 0 | |||
| Absentee Rate (AR) (%) | 5.0% | 1.8% | 4.7% | 4.6% | 1.9% | 4.4% | |||
| Ireland (Cork) ‐ chemical pharmaceutical plant | |||||||||
| Injuries and Injury Index | 2018 | 2017 | |||||||
| Men | Women | Total | Men | Women | Total | ||||
| Accidents in the workplace (No.) | 0 | 1 | 1 | 0 | 0 | 0 | |||
| Accidents during travel (No.) | 0 | 0 | 0 | 0 | 0 | 0 | |||
| Cases of work‐related diseases (No.) | 0 | 0 | 0 | 0 | 0 | 0 | |||
| Severity Index (Lost Day Rate LDR) | 0 | 390.5 | 175.7 | 0 | 0 | 0 | |||
| Frequency Index/Injury Rate (IR) | 0 | 4.3 | 1.9 | 0 | 0 | 0 | |||
| Occupational Disease Rate (ODR) | 0 | 0 | 0 | 0 | 0 | 0 | |||
| Absentee Rate (AR) (%) | 5.7% | 5.4% | 5.6% | 0.8% | 3% | 1.8% | |||
| Italy (Milan) ‐ Pharmaceutical production plant and offices | |||||||||
| Injuries and Injury Index | 2018 | 2017 | |||||||
| Men | Women | Total | Men | Women | Total | ||||
| Accidents in the workplace (No.) | 6 | 2 | 8 | 2 | 5 | 7 | |||
| Accidents during travel (No.) | 2 | 4 | 6 | 1 | 0 | 1 | |||
| Cases of work‐related diseases (No.) | 0 | 0 | 0 | 0 | 0 | 0 | |||
| Severity Index (Lost Day Rate LDR) | 33.6 | 86.7 | 51.9 | 16.5 | 76.1 | 37 | |||
| Frequency Index/Injury Rate (IR) | 3.1 | 4.4 | 3.6 | 1.1 | 3.6 | 2 | |||
| Occupational Disease Rate (ODR) | 0 | 0 | 0 | 0 | 0 | 0 | |||
| Absentee Rate (AR) (%) | 2.7% | 2.7% | 2.7% | 2.6% | 2.6% | 2.6% | |||
| Czech Republic ‐ Pharmaceutical production plant | |||||||||
| Injuries and Injury Index | 2018 | 2017 | |||||||
| Men | Women | Total | Men | Women | Total | ||||
| Accidents in the workplace (No.) | 0 | 0 | 0 | 0 | 0 | 0 | |||
| Accidents during travel (No.) | 0 | 0 | 0 | 0 | 0 | 0 | |||
| Cases of work‐related diseases (No.) | 0 | 0 | 0 | 0 | 0 | 0 | |||
| Severity Index (Lost Day Rate LDR) | 0 | 0 | 0 | 0 | 0 | 0 |
11The severity index represents the ratio between the number of days lost due to professional injury/disease and the total number of working hours in the same period, multiplied by 200,000 (Source: Sustainability Reporting Guidelines ‐ Version GRI Standards, Global Reporting Initiative).
The frequency index represents the ratio between the total number of injuries and the total number of hours worked in the same period, multiplied by 200,000 (Source: Sustainability Reporting Guidelines ‐ Version GRI Standards, Global Reporting Initiative).
The occupational disease rate represents the ratio between the number of cases of work‐related diseases and the number of hours worked in the same period, multiplied by 200,000 (Source: Sustainability Reporting Guidelines ‐ Version GRI Standards, Global Reporting Initiative). The absenteeism rate is the percentage of daily absences against the total number of working days in the same period (Source: Sustainability Reporting Guidelines ‐ Version GRI Standards, Global Reporting Initiative).
| Frequency Index/Injury Rate (IR) | 0 | 0 | 0 | 0 | 0 | 0 |
|---|---|---|---|---|---|---|
| Occupational Disease Rate (ODR) | 0 | 0 | 0 | 0 | 0 | 0 |
| Absentee Rate (AR) (%) | 2.7% | 6.5% | 5.4% | 0% | 0% | 0% |
| Spain 12 | ||||||
| Injuries and Injury Index | 2018 | 2017 | ||||
| Men | Women | Total | Men | Women | Total | |
| Accidents in the workplace (No.) | 2 | 4 | 6 | 3 | 0 | 3 |
| Accidents during travel (No.) | 0 | 0 | 0 | 0 | 1 | 1 |
| Cases of work‐related diseases (No.) | 0 | 0 | 0 | 0 | 0 | 0 |
| Severity Index (Lost Day Rate LDR) | 14.3 | 9.1 | 11.7 | 9.5 | 193.4 | 119.8 |
| Frequency Index/Injury Rate (IR) | 1.5 | 3.2 | 2.4 | 14.9 | 3.4 | 8.1 |
| Occupational Disease Rate (ODR) | 0.0 | 0.0 | 0.0 | 0 | 0 | 0 |
| Absentee Rate (AR) (%) | 2.2% | 5.6% | 3.9% | 4.3% | 5.5% | 5.0% |
| Tunisia 13 | ||||||
| Injuries and Injury Index | 2018 | 2017 | ||||
| Men | Women | Total | Men | Women | Total | |
| Accidents in the workplace (No.) | 5 | 2 | 7 | 4 | 3 | 7 |
| Accidents during travel (No.) | 0 | 0 | 0 | 0 | 0 | 0 |
| Cases of work‐related diseases (No.) | 0 | 0 | 0 | 0 | 0 | 0 |
| Severity Index (Lost Day Rate LDR) | 21.2 | 3.8 | 11.5 | 23.6 | 6.1 | 18.8 |
| Frequency Index/Injury Rate (IR) | 2.7 | 0.91 | 1.7 | 2.4 | 1.7 | 2 |
| Occupational Disease Rate (ODR) | 0.0 | 0.0 | 0.0 | 0 | 0 | 0 |
| Absentee Rate (AR) (%) | 2.6% | 6.6% | 4.8% | 2.4% | 3.9% | 3.2% |
| Turkey ‐ Pharmaceutical production plant | ||||||
| Injuries and Injury Index | 2018 | 2017 | ||||
| Men | Women | Total | Men | Women | Total | |
| Accidents in the workplace (No.) | 7 | 2 | 9 | 4 | 0 | 4 |
| Accidents during travel (No.) | 0 | 0 | 0 | 0 | 0 | 0 |
| Cases of work‐related diseases (No.) | 0 | 0 | 0 | 0 | 0 | 0 |
| Severity Index (Lost Day Rate LDR) | 24.7 | 6.8 | 19.3 | 12.2 | 0 | 8.7 |
| Frequency Index/Injury Rate (IR) | 4.8 | 3.2 | 4.3 | 2.4 | 0 | 1.7 |
| Occupational Disease Rate (ODR) | 0.0 | 0.0 | 0.0 | 0 | 0 | 0 |
| Absentee Rate (AR) (%) | 0.3% | 0.2% | 0.3% | 0.4% | 0.4% | 0.4% |
| France (Bouchara) 14 | ||||||
| Injuries and Injury Index | 2018 | 2017 | ||||
| Men | Women | Total | Men | Women | Total | |
| Accidents in the workplace (No.) | 1 | 4 | 5 | 4 | 1 | 5 |
| Accidents during travel (No.) | 0 | 0 | 0 | 0 | 0 | 0 |
| Cases of work‐related diseases (No.) | 0 | 1 | 1 | 0 | 0 | 0 |
| Severity Index (Lost Day Rate LDR) | 63.3 | 250.2 | 175.5 | 573.9 | 8.3 | 309.1 |
| Frequency Index/Injury Rate (IR) | 3.8 | 3.8 | 3.8 | 9.9 | 2.8 | 6.5 |
| Occupational Disease Rate (ODR) | 0.0 | 0.0 | 0.0 | 0 | 0 | 0 |
| Absentee Rate (AR) (%) | 7.9% | 6.0% | 6.7% | 6.4% | 3.2% | 4.9% |
12Unlike the 2017 data for the Spanish site which extended only to production plant staff, the data for 2018 includes production plant and office staff.
13Unlike the 2017 data for the Tunisian site which extended only to production plant staff, the data for 2018 includes production plant and office staff.
14Unlike the 2017 data for the French branch Laboratoires Bouchara Recordati S.a.s. which extended only to production plant staff, the data for 2018 includes production plant and office staff.
| France (Nanterre) ‐ Distribution Centre (Orphan Europe) | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2017 | ||||||||
| Injuries and Injury Index | Men | Women | Total | Men | Women | Total | |||
| Accidents in the workplace (No.) | 0 | 0 | 0 | 0 | 0 | 0 | |||
| Accidents during travel (No.) | 0 | 0 | 0 | 0 | 1 | 1 | |||
| Cases of work‐related diseases (No.) | 0 | 0 | 0 | 0 | 0 | 0 | |||
| Severity Index (Lost Day Rate LDR) | 0 | 0 | 0 | 0 | 0 | 0 | |||
| Frequency Index/Injury Rate (IR) | 0 | 0 | 0 | 0 | 20.5 | 11.1 | |||
| Occupational Disease Rate (ODR) | 0 | 0 | 0 | 0 | 0 | 0 | |||
| Absentee Rate (AR) (%) | 0.9% | 0.5% | 0.7% | 4.0% | 4.4% | 4.2% |
As stated in the Code of Ethics, the Recordati Group considers environmental protection to be a vital component of its general approach to company activities aimed at supporting the sustainable development of the regions in which it operates. To this end, in the course of its operational management and activities the Group has adopted a policy aimed at reducing the negative impact that company activities may have on the environment and complying with all related legislative and regulatory requirements, including:
The Group is committed to ensuring environmental sustainability at its production plants and all branches are required to comply with local legislation, minimising energy use and effectively managing water resources. Environmental sustainability compliance officers, whose roles include formal responsibilities with precise operational powers, are particularly important in this regard.
All of the Group's production sites hold the necessary environmental authorisations and ensuring compliance with said authorisations is an important part of the responsibilities of the management team at each site. The Recordati Group responds to any cases of increased environmental risk by implementing a series of internal inspections.
The sites of Campoverde di Aprilia and Cork, where active pharmaceutical ingredients are manufactured, are included in the European Pollutant Release and Transfer Register (E‐PRTR), set up on the basis of EU Regulation 166/2006. Furthermore, the Campoverde di Aprilia site is included in the national inventory of plants capable of causing potential environmental accidents, pursuant to Legislative Decree no. 334/99, replaced by Legislative Decree no. 105/2015, which implemented the directive 2012/18/EU. All the duties deriving from such inclusions are regularly fulfilled.
Furthermore, the Campoverde di Aprilia site – following a communication of voluntary disclosure to competent authorities made in 2001 based on art. 9 of Ministerial Decree no. 471/99, in respect of the potential contamination of soils and waters of the site deriving from past industrial manufacturings – was included in 2001 in the temporary register of contamined sites of the Lazio Region. The administrative proceeding commenced in 2004 by the Company following such communication is still pending, the Company is waiting feedback from local authorities; in the meantime the Company has continued implementing, in respect to such historical contamination, the necessary containment measures and monitoring activities, in compliance with applicable laws.
In this regard, in 2018 the Campoverde di Aprilia plant received an environmental audit by a consultancy firm and carried out five audits of intermediaries and waste disposal plants. Furthermore, the inspection aimed at renewing the environmental certificate ISO 14001 and monitoring the transition to the new ISO 14001:2015 regulation carried out in May 2018 by the accredited company DNV GL was particularly significant. During the visits of the
15The information and data regarding environmental aspects (energy use, emissions, water use and waste) refer exclusively to the Group's production plants as such aspects are not deemed significant at other sites (with the exception of the Milan plant, where the offices at the same site are also considered).
Lead Auditor of DNV GL, accompanied at various times by four inspectors specialising in different areas, the entire Environmental Management System of the Campoverde di Aprilia plant was inspected. The high level of control was necessary in order to renew the three‐year certificate and monitor transition to the ISO 14001:2015 standard that presents various differences to the previous standard (ISO 14001:2004). The audit considered all areas of the new system: policy, planning, legal compliance, implementation and operation, monitoring, corrective action and review. The result was considered highly satisfactory and confirmed the implementation by all Recordati personnel of the management system, which conforms to the required standards and is able to provide a high level of environmental protection and safety. In the inspection's final report, no cases of non‐compliance were noted and only six formal observations were made.
In particular, the new edition of the Environmental Analysis pursuant to standard ISO 14001:2015 was issued, accompanied by an environmental risk assessment document based on the concept of the life cycle of all plant processes and the relative activities that may result in a lesser or greater environmental impact.
The Campoverde di Aprilia plant also supplemented its training and information programme with specific training for the changes to the Environmental Management System associated with the application of the new standard ISO 14001:2015, informing employees at all levels of the plant's environmental policies, projects and objectives as well as the environmental risks associated with the plant's activities. The analysis conducted previously enabled the definition of the Risk Management procedure associated with the Site's Environmental Management, and thus the measures to be implemented in order to identify and assess the risks associated with the context and the interested parties, defining, if necessary, the mitigation actions to reduce the risk factors to an acceptable level.
These measures enable the organisation to gain:
At environmental level, in 2018 the site in Cork received an unannounced inspection from the Environmental Protection Agency (EPA), focusing on the environmental management system and the traceability of waste and waste materials ‐ no cases of non‐compliance were observed by the Authority. Effluent discharged from the site was monitored on two occasions during the year and all chemical samples analysed were below current discharge limits.
In addition to the environmental inspections, it is noted that:
in the course of recent years, the chemical pharmaceutical plant in Cork has joined the Responsible Care initiative which aims to promote the continuous improvement in the chemical and pharmaceutical industry of all aspects that have a direct or indirect aspect on the environment, employees or the community. In this regard, in 2013 the site received the "Responsible Care Award" for SMEs from the European Chemical Industry Council (CEFIC) in recognition of the continuous improvements achieved by the site in the last five years. The plant's environmental system was developed to ensure full compliance with environmental legislation, regulated in Ireland by the Environmental Protection Agency (EPA), and is subject to regular inspections by EPA officers;
The Recordati Group manages the general use of energy resources through a range of initiatives to reduce energy use, with the aim of improving energy efficiency in all of the Group's industrial and commercial operations. The main energy resources used at the Group's production plants are electricity, natural gas, diesel and fuel oil. In 2018, the Group's plants consumed approximately 614 TJ, a slight increase of 1% compared to the previous year due to the overall increase in production volume.
In consideration of this, thanks to continuous efforts to improve energy efficiency the increase in energy use is negligible and is not proportional to the increase in the Group's industrial production. Furthermore, it is noted that the percentage in electricity obtained from renewable energy sources relates solely to the supply of electricity to the Milan and Cork plants, while the use of fuel oil is attributable to the distribution plant of Orphan Europe in France. In this regard, it is noted that the significant percentage increase in the use of fuel oil is predominantly linked to a power outage at the Nanterre plant, in response to which an emergency fuel oil generator was used.
| Energy use at the production plants of the Recordati Group by source16 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Type of fuel | Unit of | 2018 | 2017 | % Variation | ||||
| measurement | ||||||||
| Purchased electricity | kWh GJ |
31,671,271 114,017 |
29,124,233 104,847 |
9% | ||||
| originating from renewable sources17 |
kWh GJ |
1,498,981 5,396 |
1,545,565 5,564 |
‐3% | ||||
| Natural Gas | m3 GJ |
14,135,292 498,269 |
14,227,325 499,863 |
‐0.3% | ||||
| Diesel | Litres GJ |
67,912.62 2,431 |
48,942 1,752 |
39% | ||||
| Fuel oil | Litres GJ |
658 27 |
389 16 |
69% | ||||
| Total | GJ | 614,744 | 606,478 | 1% |
Percentage subdivision of electricity use by production plants, subdivided by usage and type of plant, 2018
Energy use at pharmaceutical production plants totalled approximately 155 TJ (equal to 25% of the total), a 1% increase on the previous year. In particular, compared to chemical pharmaceutical plants, pharmaceutical plants used higher quantities of diesel to produce electricity and more electricity was bought from the national grid. However, in 2018 energy use by the Group's chemical pharmaceutical production plants was 459 TJ (75% of the total), a slight increase on the previous year.
16Lower Calorific Value (LCV) of natural gas: 0.035 GJ/m3 ; average density of diesel: 0.835 kg/ltr; LCV of diesel: 42.87 GJ/ltr; average density of fuel oil: 0.98 kg/ltr; LCV of fuel oil: 41.02 GJ/ltr (Source: Italian Ministry of the Environment and the Protection of Land and Sea, Table of National Standard Limits, 2018).
17 The proportion of electricity obtained from renewable sources originates from a combination of national energy providers and the Guarantee of Origin is not certified. As such, this quota is included in the calculation of Scope 2 Emissions (Market‐based approach).
| Energy use at pharmaceutical production plants by fuel source | ||||
|---|---|---|---|---|
| Type of fuel | Unit of measurement |
2018 | 2017 | % Variation |
| Purchased electricity | kWh GJ |
26,565,569 95,636 |
25,500,470 91,802 |
4% |
| originating from renewable sources |
kWh GJ |
1,136,854 4,093 |
1,111,565 4,002 |
2% |
| Natural Gas | m3 GJ |
1,647,294 58,067 |
1,730,744 60,808 |
‐5% |
| Diesel | Litres GJ |
52,521 1,880 |
36,142 1,294 |
45% |
| Fuel oil | Litres GJ |
658 27 |
389 16 |
69% |
| Total | GJ | 155,610 | 153,919 | 1% |
| Energy use at chemical pharmaceutical production plants by fuel source | ||||||
|---|---|---|---|---|---|---|
| Type of fuel | Unit of measurement |
2018 | 2017 | % Variation | ||
| Purchased electricity | kWh GJ |
5,105,702 18,381 |
3,623,763 13,045 |
41% | ||
| originating from renewable sources |
kWh GJ |
362,127 1,303 |
434,000 1,562 |
‐17% | ||
| Natural Gas | m3 GJ |
12,487,998 440,202 |
12,496,581 439,055 |
‐0.3% | ||
| Diesel | Litres GJ |
15,388 551 |
12,800 458 |
20% | ||
| Total | GJ | 459,134 | 452,558 | 1% |
The chemical pharmaceutical plants consume higher quantities of natural gas than the pharmaceutical plants: a high proportion of this gas usage derives from the electricity generation system at the Campoverde di Aprilia plant, where a self‐generation policy for electricity and thermal energy has been in place for over 20 years thanks to the installation of a co‐generation system (for more details, see the "Co‐Generation System of the Campoverde di Aprilia" information box). Through the use of a single fuel source (natural gas), the co‐generation system enables the plant to generate enough electricity to meet its needs, sell any excess to the national grid and produce all of the steam used in the plant without the use of any additional gas or resources. In 2018, the proportion of self‐generated electricity used internally fell by 5% compared to 2017, while the amount of electricity sold back to the grid decreased by approximately 23%. The reduction in energy production at the Campoverde di Aprilia plant relates predominantly to the malfunction of the co‐generation plant in March and December 2018 which also led to the need to buy in a higher percentage of electricity. It should also be noted that while the usage of methane per kilogram of material (chemical intermediates, solvents and finished products) at the plant remained consistent, the use of methane per turnover unit (in thousands of Euro) fell in 2018 by approximately 7%, demonstrating a consistent trend of the co‐generation system's energy efficiency.
| Electricity and thermal energy generated and sold by the Campoverde di Aprilia co‐generation | |||||||
|---|---|---|---|---|---|---|---|
| plant | |||||||
| Unit of | % | ||||||
| Type of fuel | measurement | 2018 | 2017 | Variation | |||
| Self‐generated electricity | kWh | 29,685,824 | 31,242,481 | ‐5% | |||
| Consumed internally | kWh | 25,829,795 | 26,207,618 | ‐1% | |||
| Sold externally | kWh | 3,856,029 | 5,034,863 | ‐23% | |||
| Self‐generated and consumed thermal energy |
Kg of steam | 65,795,000 | 66,794,000 | ‐1% |
In 1994, following the increased demand for electricity and thermal energy determined by the production facilities at the time, a feasibility study was launched and concluded to assess the installation of a steam and electricity co‐ generation production system at the Recordati chemical plant in Campoverde di Aprilia. Following the completion of the feasibility study, a co‐generation system was installed at the site, entering into service in September 1996 and in operation ever since.
Co‐generation is defined as the combined generation of electricity and heat based upon a cascade process where electricity is produced using a high temperature thermo‐dynamic cycle which, in turn, releases heat and produces thermal energy. In the industrial sector, co‐generation is also produced using gas‐powered turbines.
The co‐generation system at the Campoverde di Aprilia plant is equipped with a 15‐bar methane gas turbine. In its current configuration and with an air temperature of 9°C, the system is able to generate a maximum output of approximately 4.3 MW of electricity.
Gas turbines operate by burning the fuel source in a special combustion chamber and expanding it with compressed air inside the turbine itself. During expansion, the mixture of air and fuel interacts with the blades of the turbines and activates the rotational motion of the rotor to generate mechanical energy.
This mechanical energy is then converted into electricity by an alternator.
The fumes produced by the gases expanded in the turbine are emitted at very high temperatures (450‐500°C) and consequently specialist heat exchangers or boilers may be used (the Recordati plant at Campoverde di Aprilia uses a steam recovery boiler ‐ Figure 1) to produce hot water or steam.
The use of the steam recovery boilers prevents exclusive use of methane gas to meet the plant's demand for steam for use in chemical processes and as a heating fluid.
The steam recovery boiler installed in the co‐generation system, which recovers the gases expanded in the turbine, enables the production of 15‐bar saturated steam up to a capacity of 16 tons per hour.
Figure 1 ‐ Exhaust gases vent and recovery boiler ‐ Co‐Generation System ‐ Campoverde di Aprilia Plant
Without the steam produced using the gas turbine fumes in the recovery boiler, it is estimated that in 2018 approximately 4 million cubic metres of gas would have been required.
As described above, the co‐generation system at the Campoverde di Aprilia plant features a gas turbine (Figure 2) fuelled by methane gas at a pressure of 15 bar and above constructed by the company SOLAR (model TBM‐T50), coupled by a reduction gearbox to a GEC Alstohm alternator. In its current configuration and with an air temperature of 9°C, the system is able to generate a maximum output of approximately 4.3 MW of electricity. The gas turbine is composed of three main pieces of machinery: the compressor, the combustion unit and the power turbine. The compressor draws in air from the environment through filters, compressing it in the combustion chamber (combuster). The sparks generated by the spark plugs in the ignition chamber light the flame in the combustion chamber. The expansion of the discharged gases causes the power turbine to rotate, enabling the transmission of mechanical energy to the rotator shaft to which it is keyed. The final conical cog of the compressor shaft is connected to the gearbox.
The reduction gearbox, which is a coupling mechanism with a rotating body able to vary the torque and the angular speed, enables the reduction in rotation speed of the power turbine from 15,000 g/min to 1,500 g/min, the correct rotation speed for the generation of electricity at a voltage of 6300 V and a frequency of 50 Hz.
Figure 2 ‐ The gas turbine during its replacement (left); the dismantled reduction gearbox during installation (right) (August 2016)
The gas turbine and reduction gearbox continue to operate 24 hours a day year‐round, except for the scheduled site closures in August (at least three weeks), in the last eight days of December and at Easter (except in the last three years).
The manufacturer of the two machines, Turbomach, recommends a full service at its offices at least every 32,000 hours of operation, which in the Recordati plant is the equivalent of four years. This service requires the gas turbine and the reduction gearbox to be completely dismantled, replacing the machines with equivalent newly serviced systems with operating times reset to zero.
In 2016 the control system of the entire machine was replaced with a new, more reliable system.
Both the gas turbine and the reduction gearbox are covered by Maintenance Service Agreements and are continuously monitored by the manufacturer. Furthermore, both the turbine and the reduction unit are subject to ordinary maintenance activities twice a year by Turbomach technicians.
This enables the Recordati site at Campoverde di Aprilia to guarantee the constant supply of electricity to its systems for safety reasons.
In recent years, the Italian Parent Group has launched a reduced energy consumption policy through the implementation of initiatives aimed at company vehicles, the technological modernisation of IT equipment such as printers and photocopiers, and the use of LED lighting. This plan is enabling the Group to reduce energy usage and mitigate the environmental impact resulting from the use of company equipment, promoting a more efficient use of energy resources and reducing CO2 equivalent gases. Continued focus on the environment has been confirmed as one of the primary themes for 2018. This year, the Group aims to optimise investments and acquisitions at a general level in order to ensure maximum respect for the environment and optimise the regions in which it operates without damaging the efficacy of its operational tools.
In 2018 the Group also carried out a monitoring and control activity to assess the emissions of its global fleet of company vehicles. This led the Parent Group to request a detailed six‐monthly report from all branches in order to highlight the energy consumption and CO2 emissions of vehicles used by the Group. This enabled the Group to optimise investments and evaluate corrective actions, where necessary. In 2018, a total of 1,782 company cars were in use by employees of the Recordati Group, while the average CO2 emissions emitted by the vehicles was 107 g/km, according to the new Worldwide Harmonized Light‐Duty Vehicles Test Procedures (WLTP). For internal combustion vehicles, the application of the WLTP translate to higher official values for fuel consumption and emissions compared to the measurements made with the previous procedure; as a result, the data for 2018 is not easily comparable with the data for 2017. Nonetheless, the Group is continuing its objective to progressively and consistently reduce this statistic over the coming years18. In this regard, the Group has a rigorous vehicle selection policy, encouraging the selection of technologically advanced hybrid solutions which have a reduced environmental impact.
In the last few years the Group has promoted various energy efficiency initiatives implemented at individual branches, including the gradual and systematic replacement of bulbs with new LED or energy‐efficient bulbs at the sites in Milan (Italy), Utebo (Spain), Kalaat El Andalous (Tunisia) and Saint Victor (France). In the Saint Victor plant in France, a feasibility study was launched aimed at assessing the replacement of the neon bulbs through the use of leased equipment with motion‐activated LED lights to increase the site's energy efficiency; this study is due to conclude in 2019.
Furthermore, in order to further reduce energy consumption, in 2019 the roof at the Saint Victor plant will be renovated and insulated. These works are also aimed at improving roof access for future maintenance. In 2018 at the Czech plant in Pardubice, an electricity supply contract was signed benefiting from an overnight
tariff with ecological and economic benefits.
In particular, the following initiatives have been implemented at the Milan plant:
18 Average emissions of the vehicle fleet were calculated on the basis of estimated annual CO2 emissions and annual mileage of company vehicles.
10%) in real time. As well as reducing energy use, the system also provides significant environmental benefits by reducing CO2 emissions;
In recent years the Irish plant in Cork has been committed to optimising and streamlining its production chain through the use of a programming procedure and preventive maintenance. The Energy Manager at the plant has promoted initiatives to increase employee awareness regarding energy saving according to a training plan agreed with Parent Group and smaller projects approved at local level. In a tangible demonstration of this commitment, in 2012 the plant's efforts to reduce energy consumption were recognised by the SEAI (Sustainable Energy Authority of Ireland) with the Energy Efficiency Award for SMEs. Other energy efficiency initiatives that have taken place at the Cork plant include:
The Recordati Group's commitment to protecting the environment is also expressed through policies and initiatives aimed at reducing the emission of greenhouse gases and other air pollutants.
In all of the Group's production plants, old equipment containing fluorinated greenhouse gases is being progressively replaced with new machinery that does not use substances which are harmful to the ozone. Other initiatives to reduce emissions have taken place:
emission sources (a total of 31 points of emission have been declared). Emissions were measured by an accredited laboratory; emission values related to the production process are well below permitted limits.
At the Campoverde di Aprilia plant in 2018, measures implemented to reduce emissions of harmful substances into the atmosphere specifically regarded the following actions:
In 2018, Scope 1 direct emissions relating to the use of energy for industrial production (natural gas, diesel and fuel oil) remained mainly in line with those of the previous year; furthermore, in 2017 the proportion of Scope 1 direct emissions caused by the Group's fleet of vehicles fell by approximately 20%.
However, Scope 2 indirect emissions linked to the purchase of electricity from the National Grid increased by 8%.
| 19 Greenhouse gas emissions (tonnes of CO2) at Recordati Group production plants and company vehicle fleet |
||||||
|---|---|---|---|---|---|---|
| 2018 | 2017 | % Variation | ||||
| Direct emissions (Scope 1) | 35,232 | 34,458 | 2% | |||
| Relating to energy consumption | 28,056 | 28,073 | ‐0.1% | |||
| Relating to the company vehicle fleet20 | 7,176 | 6,385 | 12% | |||
| Indirect emissions (Scope 2) ‐ Location‐based approach 21 |
11,407 | 10,567 | 8% | |||
| Indirect emissions (Scope 2) ‐ Market‐based approach22 |
13,427 | 12,384 | 8% |
With reference to other air pollutants, depending on the type of pollutant various thresholds have been defined; these are respected by the Group thanks to continuous monitoring and control activities of the emission points. In particular, the list of authorised emission points at the Milan plant is included by the Autorizzazione Unica Ambientale certification awarded in 2018.
The reduction in other atmospheric emissions from 2017 to 2018 (in particular NOx) predominantly relates to the production plant in Campoverde di Aprilia. In fact, in 2017 the increase in emissions recorded at the plant was attributable to the activation of the after‐burner of the co‐generation system during the final inspection phase to meet an increase in demand of steam for production purposes.
| Other emissions (kg/year) of Recordati Group production plants23 | |||||||
|---|---|---|---|---|---|---|---|
| 2018 | 2017 | ||||||
| Nitric oxide (NOx) | 11,389 | 20,038 | |||||
| Sulphur oxide (SOx) | 25 | 82 | |||||
| Persistent Organic Pollutants (POP) | 0 | 0 | |||||
| Volatile Organic Pollutants (VOC) | 4,178 | 13,304 | |||||
| Hazardous Air Pollutants (HAP) | 1,923 | 2,948 | |||||
| Particulate Matter (PM) | 4,103 | 3,546 | |||||
| Methane (CH4) | 0 | 1 | |||||
| Others | 415 | 1,923 |
19 Source of emission coefficient data for natural gas, diesel and fuel oil: Italian Ministry of the Environment and the Protection of Land and Sea, Table of National Standard Limits, 2018.
20Scope 1 emissions relating to the use of fuel oil by company vehicles have been estimated based on the average mileage of each car and the average emission rating of fleet vehicles (107 g/km).
21 The reporting standards applied (GRI Sustainability Reporting Standards 2016) provide for two different approaches for the calculation of Scope 2 emissions: "location‐based" and "market‐based". The location‐based approach uses national average emission factors relating to the specific configuration of national electricity production (source of emission factors: TERNA, Confronti Internazionali, 2016).
22The market‐based approach uses an emission factor defined on a contractual basis with the electricity supplier. Given the absence of specific contractual agreements between Group companies and the energy supplier (e.g. acquisition of Guarantees of origin), for this approach the national "residual mix" emission factors were applied (source of residual mixes: AIB European Residual Mixes 2016 (Version 1.2, 15th June 2017) and AIB European Residual Mixes 2017 (Version 1.13, 2018‐07‐11)).
23Any significant changes in the other emissions into the atmosphere are due to the way the data are calculated, because the annual value of emissions are calculated by multiplying the result of a single emissions analysis (taken over one hour) by the annual operating hours.
In recognition of the value of natural resources, the Recordati Group is developing production processes aimed at reducing water usage. In particular:
In 2018, the overall water intake at the Group's production plants fell by 3% compared to 2017. In particular, total water intake in 2018 was 2.8 million cubic metres, of which 42% was surface water, 48% was groundwater and the remaining 17% was taken from aqueducts. It should also be noted that in 2018, 17% of total water intake at the Group's production plants was recycled and reused internally.
| Water intake at Recordati Group production plants by source | |||||||
|---|---|---|---|---|---|---|---|
| Unit of | |||||||
| measurement | 2018 | 2017 | % Variation | ||||
| Surface water | m3 | 1,204,150 | 1,415,480 | ‐15% | |||
| Groundwater | m3 | 1,364,326 | 1,280,560 | 7% | |||
| Aqueduct | m3 | 248,506 | 220,095 | 13% | |||
| Total | m3 | 2,816,982 | 2,916,135 | ‐3% |
| Percentage of recycled water at Recordati Group production plants | |||||||
|---|---|---|---|---|---|---|---|
| Unit of | 2018 | 2017 | |||||
| measurem ent |
Total | % of total water intake |
Total | % of total water intake |
|||
| Quantity of water recycled and reused |
m3 | 471,287 | 17% | 419,997 | 14% |
The Recordati Group's commitment to environmental protection is also evidenced by its activities to reduce the waste produced by its activities and ensure the correct disposal of chemical and pharmaceutical products, particularly at its production sites.
In particular, at the Milan plant waste management is regulated by a specific internal procedure which assigns each waste product a specific code: HW (Hazardous Waste) such as solvents, excess pharmaceuticals, filters, pharmaceutical waste and contaminated celite, and SNHW (Special Non‐Hazardous Waste) such as clean glass, special waste similar to sold urban waste (SUW), paper, cardboard, wood and iron. In particular, the various types of waste produced at the plant are classified as hazardous or non‐hazardous. In accordance with internal operating procedures, all waste is assigned an EWC code which defines the relative management procedure for that type of waste.
In accordance with Italian law (Legislative Decree no. 231/01), the Group's organisational model includes the appointment of various waste management officers within the company. Furthermore, waste disposal is contracted to specialist firms that hold the relative authorisations to act as carriers, intermediaries and recipients. As well as the paper forms used to identify transported waste, the SISTRI Waste Tracking System is also applied, enabling the prompt and accurate tracking of special waste throughout the supply chain.
Correct spillage management is regulated by a specific standard operating procedure, which states that the spilled product must be collected using absorbent sheets and pads suitable for use with all types of hazardous and non‐ hazardous materials. Once used, the absorbent sheets are managed and destroyed in the most appropriate way, considering the hazardous nature of the product.
Other important waste disposal initiatives implemented at plants by the Group include:
the research programme at the Campoverde di Aprilia plant to investigate the possibility of internally managing certain types of waste that have previously been disposed of externally. For certain types of waste, this project has resulted in a significant reduction in costs, due not only to the internal management but also the reduction in number of transport journeys and containers used. The reduction in the number of journeys is in line with the policy of reducing external environmental impacts;
In 2018, the waste water treatment system was subjected to various maintenance works, with a consequent reduction in waste water pollution levels. Furthermore, these optimisation measures reduced the consumption of chemical substances used in treatment plants, with a consequent reduction in operating costs;
at the Milan plant, in order to limit the number of collections made by the carrier, two waste compressor units have been installed, one for paper and cardboard and one for special waste similar to SUW.
A total of 5,892 tonnes of waste was produced in 2018, of which 54% was hazardous waste (substances defined as hazardous in the country of origin) and 46% was non‐hazardous waste (all other forms of liquid and solid waste). In line with 2017, the majority of the hazardous waste produced by the production plants in 2018 (equal to 2,686 tonnes) was exported for disposal, while the remaining 516 tonnes were processed internally.
| Total waste produced by Recordati Group plants, subdivided by type and disposal method | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2018 | 2017 | |||||||
| Disposal method | Unit of measurement |
Hazardous waste |
Non‐ hazardous waste |
Total | Hazardous waste |
Non‐ hazardous waste |
Total | |
| Reuse | tonnes | ‐ | 1 | 1 | ‐ | 1 | 1 | |
| Recycling | tonnes | 36 | 551 | 587 | 42 | 504 | 546 | |
| Compost | tonnes | ‐ | 24 | 24 | ‐ | 14 | 14 | |
| Recovery | tonnes | 1,606 | 957 | 2,563 | 1,627 | 897 | 2,524 | |
| Incineration | tonnes | 403 | 18 | 421 | 276 | 29 | 305 | |
| Landfill | tonnes | 34 | 72 | 106 | 50 | 162 | 212 | |
| Storage on site | tonnes | 2 | ‐ | 2 | 3 | ‐ | 3 | |
| Other24 | tonnes | 1,121 | 1,067 | 2,188 | 1,384 | 977 | 2,361 | |
| Total | tonnes | 3,202 | 2,690 | 5,892 | 3,382 | 2,584 | 5,966 |
| Total hazardous waste produced by Recordati Group plants, subdivided by destination | |||||||
|---|---|---|---|---|---|---|---|
| Hazardous waste | Unit of | 2018 | 2017 | ||||
| measurement | Total | % of Total | Total | % of Total | |||
| Exported | tonnes | 2,686 | 84% | 2,862 | 85% | ||
| Processed | tonnes | 516 | 16% | 520 | 15% | ||
| Total | tonnes | 3,202 | 100% | 3,382 | 100% |
As regards the various disposal methods, particular emphasis was given to the recycling of packaging materials and the use of reliable suppliers of waste transportation and disposal services. In order to reduce the volume of waste produced, the Recordati Group is committed to reducing the amount of packaging entering the waste system and increasing consumer recycling activities through re‐engineering its products. The Group ensures that the materials used in its packaging can be recycled or incinerated without causing any negative environmental impacts or producing hazardous waste. For example, the paper and cardboard used for the boxes and the paper used for the package leaflets are completely recyclable and use ecologically sustainable materials such as wood pulp from responsibly managed forests. Moreover, where possible the Recordati Group is committed to reducing the weight of packaging material and the proportion of non‐recyclable waste. When coordinating these initiatives, the Group works with national recycling organisations such as CONAI (Consorzio Nazionale Imballaggi).
24 This category includes the disposal methods classified as D8, D9, D13, D14 and D15 used at the Campoverde di Aprilia plant and listed in Annex B of Italian Legislative Decree no. 152/06.
The following table shows the material topics identified by Recordati relating to the GRI Reporting Standards and the topics covered by Legislative Decree no. 254/2016. For these topics, the column "Scope of material topics" lists all parties who may generate an impact for each topic, both internally and externally to the Group. The column "Type of impact" indicates Recordati's role in relation to the general impact for each material topic.
| Material topics of the Recordati Group |
Correlation with GRI Standards |
Correlation with the topics covered by Legislative Decree no. 254/2016 |
Scope of material topics |
Type of impact |
|---|---|---|---|---|
| Compliance and business ethics |
GRI 419: Socio‐economic compliance GRI 206: Anti‐competitive practices |
Fight against active and passive corruption |
Recordati Group | Caused by the Group |
| Anti‐corruption | GRI 205: Anti‐corruption | Fight against active and passive corruption |
Recordati Group | Caused by the Group |
| Risk management | N/A | N/A | Recordati Group | Caused by the Group |
| Corporate Governance | N/A | N/A | Recordati Group | Caused by the Group |
| Financial performance | GRI 201: Financial performance |
Social | Recordati Group; Investors and the financial community |
Caused by the Group |
| Market presence | GRI 202: Market presence | Relating to staff | Recordati Group; | Caused by the Group |
| Commitment to local communities |
GRI 203: Indirect financial impacts |
Social | Recordati Group; Local community; |
Caused by the Group |
| Access to medical products and health insurance |
N/A | Social | Recordati Group; Clients and consumers; Patients and associations |
Caused by the Group |
| Research and development |
N/A | N/A | Recordati Group; Scientific organisations and Universities |
Caused by the Group |
| Patient health and safety |
GRI 416: Customer health and safety |
Social | Recordati Group; Clients and consumers; Patients and associations |
Caused by the Group |
| Anti‐counterfeiting | GRI‐417: Marketing and labelling |
N/A | Recordati Group | Caused by the Group |
| Responsible marketing | GRI‐417: Marketing and labelling |
N/A | Recordati Group; | Caused by the Group |
| Product quality and safety |
GRI 416: Customer health and safety |
Social | Recordati Group | Caused by the Group |
| Procurement practices | GRI 414: Supplier Social Assessment GRI 308: Supplier Environmental |
Social Environmental |
Recordati Group; Suppliers and strategic partners |
Caused by the Group and directly connected to its activities |
| HR management | Assessment GRI 401: Employment |
Relating to staff | Recordati Group; | Caused by the Group |
| Diversity and equal opportunities |
GRI 405: Diversity and equal opportunities |
Relating to staff | Employees Recordati Group; Employees |
Caused by the Group |
| Employee health and safety |
GRI 403: Health and safety in the workplace |
Relating to staff | Production plants; Suppliers and strategic partners |
Caused by the Group and directly connected to its activities |
|
|---|---|---|---|---|---|
| Training and development |
GRI 404: Training and education |
Relating to staff | Recordati Group; Employees |
Caused by the Group | |
| Human rights | GRI 414: Supplier Social Assessment |
Human rights | Recordati Group; Suppliers and strategic partners |
Caused by the Group and directly connected to its activities |
|
| Efficient use of natural | GRI 302: Energy | Environmental | |||
| resources | GRI 303: Water | Environmental | Production plants | Caused by the Group | |
| Environmental | GRI 305: Emissions | Environmental | |||
| conservation | GRI 307: Environmental compliance |
Environmental | Production plants | Caused by the Group | |
| Disposal of chemical products and pharmaceuticals |
GRI 306: Effluents and waste |
Environmental | Production plants | Caused by the Group |
In accordance with the "Core" option of the "GRI Sustainability Reporting Standards", performance indicators are presented in the table below. Each indicator includes a reference to the section of the Non‐Financial Statement where the indicator can be found or other relevant reference sources in the public domain.
| Indicator | References and other information | Omission | |
|---|---|---|---|
| GRI 102: GENERAL DISCLOSURES (2016) | |||
| Organisation Profile | |||
| 102‐1 | Name of Organisation | Page 2 | |
| 102‐2 | Activities, brands, products, and services |
Pages 4‐5; Annual Report, "Business activities" section |
|
| 102‐3 | Location of headquarters | Page 2 | |
| 102‐4 | Location of operations | Pages 4‐5 | |
| 102‐5 | Ownership and legal form | Corporate Governance Report and Ownership Structure, "Profile of the issuer and general information" section |
|
| 102‐6 | Markets served | Pages 4‐5 | |
| 102‐7 | Scale of the organisation | Pages 26‐27; Annual Report, "Summary of results" section; Corporate Governance Report and Ownership Structure, "Profile of the issuer and general information" section |
|
| 102‐8 | Information on employees and other workers |
Pages 26‐30 | |
| 102‐9 | Supply chain | Pages 21‐22 | |
| 102‐10 | Significant changes to the organisation and its supply chain |
Pages 2‐3; Corporate Governance Report and Ownership Structure, "Introduction" and "Ownership structure" |
|
| 102‐11 | Precautionary Principle or approach | Pages 8‐10 | |
| 102‐12 | External initiatives | Pages 12‐13 | |
| 102‐13 | Membership of associations | Page 13; pages 17‐18 |
| Indicator | References and other information | Omission | |
|---|---|---|---|
| Strategy | |||
| 102‐14 | Statement from senior decision‐ maker |
Annual Report, "Letter to Shareholders" section |
|
| 102‐15 | Principle impacts, risks and opportunities |
Pages 8‐10 | |
| Ethics and integrity | |||
| 102‐16 | Values, principles, standards, and norms of behaviour |
Pages 5‐7 | |
| Governance | |||
| 102‐18 | Governance structure | Corporate Governance Report and Ownership Structure, "Profile of the issuer and general information" section |
|
| Stakeholder engagement | |||
| 102‐40 | List of stakeholder groups | Page 12 | |
| 102‐41 | Collective bargaining agreements | Page 32 | |
| 102‐42 | Identifying and selecting stakeholders | Page 12 | |
| 102‐43 | Approach to stakeholder engagement | Page 12 | |
| 102‐44 | Key topics and concerns that have been raised through stakeholder engagement |
Pages 14‐15 | |
| Reporting practices | |||
| 102‐45 | Entities included in the Consolidated Financial Statements |
Pages 2‐3 | |
| 102‐46 | Defining report content and topic boundaries |
Pages 2‐3; pages 63‐643 | |
| 102‐47 | List of material topics | Page 15; pages 63‐64 | |
| 102‐48 | Restatements of information | Pages 2‐3 | |
| 102‐49 | Changes in reporting | Pages 2‐3; page 14; pages 63‐64 | |
| 102‐50 | Reporting period | Page 2 | |
| 102‐51 | Date of most recent report | The previous Consolidated Non‐Financial Statement was published by the Recordati Group on 15 March 2018. |
|
| 102‐52 | Reporting cycle | Page 3 | |
| 102‐53 | Contact point for questions regarding the report |
Page 3 | |
| 102‐54 | Chosen "in accordance" option | Page 3 | |
| 102‐55 | GRI content index | Page 64‐72 | |
| 102‐56 | External assurance | Page 73 | |
| TOPIC‐SPECIFIC STANDARDS | |||
| GRI 200: ECONOMIC SERIES (2016) | |||
| Material aspect: Financial performance | |||
| GRI‐103: Management approach (2016) | |||
| 103‐1 | Explanation of the material topic and its boundary |
Page 2; page 14; page 63 | |
| 103‐2 | The management approach and its components |
Page 15 | |
| 103‐3 | Evaluation of the management approach |
Page 15 |
| Indicator | References and other information | Omission | |
|---|---|---|---|
| GRI‐201: Financial performance (2016) | |||
| 201‐1 | Direct economic value generated and distributed |
Pages 15‐16 | |
| Material aspect: Market presence | |||
| GRI‐103: Management approach (2016) | |||
| 103‐1 | Explanation of the material topic and its boundary |
Page 2; page 14; page 63 | |
| 103‐2 | The management approach and its components |
Pages 26‐27 | |
| 103‐3 | Evaluation of the management approach |
Pages 26‐27 | |
| GRI‐201: Financial performance (2016) | |||
| 202‐2 | Proportion of senior management hired from the local community |
Page 27 | |
| Material aspect: Indirect financial impacts | |||
| GRI‐103: Management approach (2016) | |||
| 103‐1 | Explanation of the material topic and its boundary |
Page 2; page 14; page 63 | |
| 103‐2 | The management approach and its components |
Pages 16‐17 | |
| 103‐3 | Evaluation of the management approach |
Pages 16‐17 | |
| GRI‐203: Indirect financial impacts (2016) | |||
| 203‐1 | Infrastructure investments and services supported |
Pages 16‐17 | |
| Material aspect: Anti‐corruption | |||
| GRI‐103: Management approach (2016) | |||
| 103‐1 | Explanation of the material topic and its boundary |
Page 2; page 14; page 63 | |
| 103‐2 | The management approach and its components |
Pages 5‐7 | |
| 103‐3 | Evaluation of the management approach |
Pages 5‐7 | |
| GRI‐205: Anti‐corruption (2016) | |||
| 205‐1 | Operations assessed for risks related to corruption |
Pages 5‐7 | |
| 205‐3 | Confirmed incidents of corruption and actions taken |
Page 7 | |
| Material aspect: Anti‐competitive behaviour | |||
| GRI‐103: Management approach (2016) | |||
| 103‐1 | Explanation of the material topic and its boundary |
Page 2; page 14; page 63 | |
| 103‐2 | The management approach and its components |
Pages 5‐7 | |
| 103‐3 | Evaluation of the management approach |
Pages 5‐7 | |
| Material aspect: Anti‐competitive behaviour (2016) |
| Indicator | References and other information | Omission | |
|---|---|---|---|
| Legal actions for anti‐competitive | No legal action for anti‐competitive | ||
| 206‐1 | behaviour, anti‐trust, and monopoly | behaviour, anti‐trust cases or monopoly | |
| practices | practices was reported during the year. | ||
| GRI 300: ENVIRONMENTAL SERIES (2016) | |||
| Material aspect: Energy | |||
| GRI‐103: Management approach (2016) | |||
| 103‐1 | Explanation of the material topic and its boundary |
Page 2; page 14; page 64 | |
| 103‐2 | The management approach and its components |
Pages 46‐55 | |
| 103‐3 | Evaluation of the management approach |
Pages 46‐55 | |
| GRI‐302: Energy (2016) | |||
| 302‐1 | Energy consumption within the organisation |
Pages 48‐50 This indicator considers production plants only, except for the site in Milan, Italy, where site offices were also considered. |
|
| Material aspect: Water | |||
| GRI‐103: Management approach (2016) | |||
| 103‐1 | Explanation of the material topic and its boundary |
Page 2; page 14; page 64 | |
| 103‐2 | The management approach and its components |
Pages 46‐48; pages 59‐60 | |
| 103‐3 | Evaluation of the management approach |
Pages 59‐60 | |
| GRI‐303: Water (2016) | |||
| 303‐1 | Water intake by source | Pages 59‐60 This indicator considers production plants only, except for the site in Milan, Italy, where site offices were also considered. |
|
| Material aspect: Emissions | |||
| GRI‐103: Management approach (2016) | |||
| 103‐1 | Explanation of the material topic and its boundary |
Page 2; page 14; page 64 | |
| 103‐2 | The management approach and its components |
Pages 46‐48; pages 56‐58 | |
| 103‐3 | Evaluation of the management approach |
Pages 56‐58 | |
| GRI‐305: Emissions (2016) | |||
| 305‐1 | Direct (Scope 1) GHG emissions | Pages 57‐58 This indicator considers company vehicle fleet and production plants only, except for the site in Milan, Italy, where site offices were also considered. |
|
| 305‐2 | Indirect (Scope 2) GHG emissions | Pages 57‐58 This indicator considers production plants only, except for the site in Milan, Italy, where site offices were also considered. |
| Indicator | References and other information | Omission | |
|---|---|---|---|
| 305‐7 | Nitrogen oxides (NOX), sulphuur oxides (SOX), and other significant air emissions |
Page 58 This indicator considers production plants only, except for the site in Milan, Italy, where site offices were also considered. |
|
| Material aspect: Effluents and waste | |||
| GRI‐103: Management approach (2016) | |||
| 103‐1 | Explanation of the material topic and its boundary |
Page 2; page 14; page 64 | |
| 103‐2 | The management approach and its components |
Pages 60‐62 | |
| 103‐3 | Evaluation of the management approach |
Pages 60‐62 | |
| GRI‐306: Effluents and waste (2016) | |||
| 306‐2 | Waste by type and disposal method | Pages 61‐62 This indicator considers production plants only, except for the site in Milan, Italy, where site offices were also considered. |
|
| Material aspect: Environmental compliance | |||
| GRI‐103: Management approach (2016) | |||
| 103‐1 | Explanation of the material topic and its boundary |
Page 2; page 14; page 64 | |
| 103‐2 | The management approach and its components |
Pages 46‐48 | |
| 103‐3 | Evaluation of the management approach |
Pages 46‐48 | |
| GRI‐307: Environmental compliance (2016) | |||
| 307‐1 | Non‐compliance with environmental laws and regulations |
In 2018 a € 45,015.49 fine was issued to the Recordati S.p.A. following certain cases of non‐ compliance detected at the Campoverde di Aprilia plant regarding the sampling and treatment of atmospheric emissions. |
|
| Material aspect: Supplier Environmental Assessment | |||
| GRI‐103: Management approach (2016) | |||
| 103‐1 | Explanation of the material topic and its boundary |
Page 2; page 14; page 63 | |
| 103‐2 | The management approach and its components |
Page 6; page 19; pages 21‐23 | |
| 103‐3 | Evaluation of the management approach |
Pages 21‐23 | |
| GRI‐308: Supplier Environmental Assessment (2016) | |||
| As per the new |
308‐1 New suppliers that were screened using environmental criteria Page 6; pages 22‐23
As per the new procurement process, all suppliers for Italian Companies are selected based on compliance to environmental regulations. This process will be extended to all Group Companies by the end of 2021
| Indicator | References and other information | Omission | |||
|---|---|---|---|---|---|
| GRI 400: SOCIAL SERIES (2016) | |||||
| Material aspect: Employment | |||||
| GRI‐103: Management approach (2016) | |||||
| 103‐1 | Explanation of the material topic and its boundary |
Page 2; page 14; page 63 | |||
| 103‐2 | The management approach and its components |
Pages 26‐29; pages 32‐35 | |||
| 103‐3 | Evaluation of the management approach |
Pages 26‐29; pages 32‐35 | |||
| GRI‐401: Employment (2016) | |||||
| 401‐1 | New employee hires and employee turnover |
Page 29 | |||
| Benefits provided to full‐time | Pages 32‐33 | ||||
| 401‐2 | employees that are not provided to | The benefits described do not vary based on | |||
| temporary or part‐time employees Material aspect: Health and safety in the workplace |
contract type or professional level. | ||||
| GRI‐103: Management approach (2016) | |||||
| 103‐1 | Explanation of the material topic and its boundary |
Page 2; page 14; page 63 | |||
| 103‐2 | The management approach and its components |
Pages 38‐42 | |||
| 103‐3 | Evaluation of the management approach |
Pages 38‐42 | |||
| GRI‐403: Occupational health and safety (2016) | |||||
| 403‐2 | Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number of work‐ related fatalities |
Pages 43‐45 This indicator considers production plants only, with the exception of sites in Italy (Milan), Spain, Tunisia and France (Bouchara), for which office and commercial staff are also considered. |
|||
| Material aspect: Training and education | |||||
| GRI‐103: Management approach (2016) | |||||
| 103‐1 | Explanation of the material topic and its boundary |
Page 2; page 14; page 64 | |||
| 103‐2 | The management approach and its components |
Pages 35‐38 | |||
| 103‐3 | Evaluation of the management approach |
Pages 35‐38 | |||
| GRI‐404: Training and education (2016) | |||||
| 404‐1 | Average hours of training per year per employee |
Pages 35‐36 | |||
| 404‐2 | Programs for upgrading employee skills and transition assistance programs |
Pages 36‐38 | |||
| Material aspect: Diversity and equal opportunities | |||||
| GRI‐103: Management approach (2016) | |||||
| 103‐1 | Explanation of the material topic and its boundary |
Page 2; page 14; page 63 |
| Indicator | References and other information | Omission | |
|---|---|---|---|
| 103‐2 | The management approach and its components |
Pages 30‐32 | |
| 103‐3 | Evaluation of the management approach |
Pages 30‐32 | |
| GRI‐405: Diversity and equal opportunities 2016 | |||
| 405‐1 | Diversity of governance bodies and employees |
Pages 30‐31; Corporate Governance Report and Ownership Structure, "Board of Directors" section |
|
| 405‐2 | Ratio of basic salary and remuneration of women to men |
Pages 33‐34 | |
| Material aspect: Supplier Social Assessment | |||
| GRI‐103: Management approach (2016) | |||
| 103‐1 | Explanation of the material topic and its boundary |
Page 2; page 14; pages 63‐64 | |
| 103‐2 | The management approach and its components |
Page 6; page 19; pages 21‐23 | |
| 103‐3 | Evaluation of the management approach |
Pages 21‐23 | |
| GRI‐414: Supplier Social Assessment (2016) | |||
| 414‐1 | New suppliers that were screened using social criteria |
Page 19; pages 21‐23 | As per the new procurement process, all suppliers for Italian Companies are selected based on compliance to environmental regulations. This process will be extended to all Group Companies by the end of 2021. |
| Material aspect: Customer health and safety | |||
| GRI‐103: Management approach (2016) | |||
| 103‐1 | Explanation of the material topic and its boundary |
Page 2; page 14; page 63 | |
| 103‐2 | The management approach and its components |
Pages 19‐20 | |
| 103‐3 | Evaluation of the management approach |
Pages 19‐20 | |
| GRI‐416: Customer health and safety | |||
| (2016) | |||
| 416‐1 | Assessment of the health and safety impacts of product and service |
Pages 19‐20 |
| Incidents of non‐compliance | |||||
|---|---|---|---|---|---|
| 416‐2 | concerning the health and safety | Page 20 | |||
| impacts of products and services | |||||
| Material aspect: Marketing and labelling | |||||
| GRI‐103: Management approach (2016) | |||||
| 103‐1 | Explanation of the material topic and |
its boundary Page 2; page 14; page 63
categories
| Indicator | References and other information | Omission | |
|---|---|---|---|
| 103‐2 | The management approach and its components |
Pages 19‐20; page 25 | |
| 103‐3 | Evaluation of the management approach |
Pages 19‐20; page 25 | |
| GRI‐417: Marketing and labelling 2016 | |||
| 417‐2 | Incidents of non‐compliance concerning product and service information and labelling |
Page 20 | |
| 417‐3 | Incidents of non‐compliance concerning marketing communications |
Page 20 | |
| Material aspect: Socio‐economic compliance | |||
| GRI‐103: Management approach (2016) | |||
| 103‐1 | Explanation of the material topic and its boundary |
Page 2; page 14; page 63 | |
| 103‐2 | The management approach and its components |
Pages 19‐20 | |
| 103‐3 | Evaluation of the management approach |
Pages 19‐20 | |
| GRI‐419: Socio‐economic compliance (2016) | |||
| 419‐1 | Non‐compliance with laws and regulations in the social and economic area |
A fine of € 13,500 was issued to Recordati S.p.A. in 2018 following the reintegration of an employee dismissed in 2012. A fine for a negligible amount was issued in 2018 to the Turkish branch Recordati İlaç Sanayi ve Ticaret Anonim Şirketi following certain incidences of non‐compliance regarding the application of occupational health and safety regulations. |
|
| Material aspect: Risk management | |||
| GRI‐103: Management approach (2016) | |||
| 103‐1 | Explanation of the material topic and its boundary |
Page 2; page 14; page 63 | |
| 103‐2 | The management approach and its components |
Pages 8‐11 | |
| 103‐3 | Evaluation of the management approach |
Pages 8‐11 | |
| Material aspect: Corporate Governance | |||
| GRI‐103: Management approach (2016) | |||
| 103‐1 | Explanation of the material topic and its boundary |
Page 2; page 14; page 63 | |
| 103‐2 | The management approach and its components |
Pages 5‐7 | |
| 103‐3 | Evaluation of the management approach |
Pages 5‐7 | |
| Material aspect: Access to medical products and health insurance | |||
| GRI‐103: Management approach (2016) | |||
| 103‐1 | Explanation of the material topic and its boundary |
Page 2; page 14; page 63 |
| Indicator | References and other information | Omission | |||
|---|---|---|---|---|---|
| 103‐2 | The management approach and its components |
Pages 17‐18 | |||
| 103‐3 | Evaluation of the management approach |
Pages 17‐18 | |||
| Material aspect: Research and development | |||||
| GRI‐103: Management approach (2016) | |||||
| 103‐1 | Explanation of the material topic and its boundary |
Page 2; page 14; page 63 | |||
| 103‐2 | The management approach and its components |
Pages 19; 20‐21 | |||
| 103‐3 | Evaluation of the management approach |
Pages 19; 20‐21 |
Milan, 28 February 2019
Chief Executive Officer
Independent auditors' report on the consolidated non financial statement
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