Investing in Environment, Health and Safety

Strengthening the Present to Secure the Future

At Lonza we are committed to providing the highest-quality products and services that delight our customers while also minimizing our impact on the environment, conserving energy and natural resources, and helping to improve the quality of life. As part of our broad corporate social responsibility efforts, the key elements of our approach to sustainability are the following:

  • Empowering our employees within a culture of innovation
  • Extracting the highest efficiency from our raw materials, including energy
  • Measuring and reporting our environmental impact
  • Collaborating with industry associations and other stakeholders to improve continuously

Protecting Our Stakeholders

“Vision Zero” – the ethical principle that underscores all our efforts in the realm of the environment, health and safety (EHS) – sets the ultimate goals of achieving zero injuries, zero manufacturing process incidents, zero distribution incidents and zero environmental incidents. It is at the heart of our EHS policy, wherein Lonza commits to operations and practices that prevent harm to people and damage to the environment or property. Our principles for environment, health, safety and security set forth in the policy and resulting from the company's ethical conviction take precedence and apply throughout Lonza.

Whereas the EHS policy defines the high-level principles, our corporate EHS management system consisting of 22 detailed guidelines leverages their implementation. Six of our corporate guidelines are considered critical, and they get enhanced selective attention during our site audits. They include such activities as working from heights; protecting workers against unexpected fall risks; working in confined spaces; and preventing any exposure of employees to harmful, toxic or asphyxiating atmospheres while working in egress-restricted environments.

As part of the corporate EHS group, the new, centralized process safety department, whose expertise helps keep our processes safe, has accomplished significant progress in 2016 by the roll-out and refinement of the internal rules and standards for process safety, which all manufacturing sites are obliged to adhere to.

The EHS group also oversees our company-wide sustainability efforts because the continuous improvement tools and disciplines that drive improved safety and environmental quality can also be applied to making sustainable use of natural resources, reducing our carbon footprint, minimizing hazardous waste and otherwise improving the quality of life for our stakeholders.

EHS risk assessments serve as valuable tools in our business and operating practices and in our planning processes. We review new ventures, capital investments in production equipment and systems and other major projects not only for the business opportunities they present, but also for their environmental, health and safety impact.

 

EHS Performance

The year 2016 did not see any material incidents or breakdowns of manufacturing operations, nor were there any severe accidents or damage inflicted on the environment in connection with the transportation of Lonza products and raw materials. In the unfortunate case that hazardous Lonza products would be involved in a transportation incident or a manufacturing plant experienced a significant breakdown with associated threats to stakeholders, Lonza maintains a proven and tested hazard communication and crisis management system to keep harmful effects to a minimum.

Considering the record safety performance we achieved in 2014, we knew it would be a challenge in the following years to stay put with our safety goal – a 0.6 frequency rate of lost-time injuries and illnesses (LTIFR) in year 2020. The 1.42 LTFR that we recorded in 2016 proved just how challenging it is to achieve a near-zero safety record.

To gear us back on track, we will continue to build on and strengthen our safety culture, which has a long and successful history in Lonza. Safety at work is a core responsibility of each and every leader and employee; and the culture to live up to “Vision Zero” is a central element in Lonza’s leadership, project management and team cooperation.

We are confident that we can meet our medium-term safety goal through new training initiatives and other new and refined programs and processes. For example, we continue to reinforce the learning effects by reviewing every safety incident – including challenging assumptions about causes and remedies. We continue to widely share the results of safety incident reviews to foster awareness and to apply insights gained to identical or similar challenges elsewhere. And we continue to strengthen our capacity and expertise in process safety management and implementation in order to further minimize the risks inherent to the chemical processes running in our installations.

The ultimate goal of our safety performance and the objective of the safety culture remain to ensure that at the end of a working day, every employee returns home safely and unharmed to their families and friends. “Vision Zero” will be our guide.

In the chart below, the following intensities relate to production of finished goods by weight. We are not surprised about the increase in the values as they are the result of growth in the pharma production.

Intensities1 of selected parameters

    2016 Change from 2015
Energy consumption GJ/t 17.9 13%
Industrial water m3/t 12.5 6%
CO2e (scope-1)2 kg/t 810 21%
Air impurities 3 kg/t 1.33 12.2%
Hazardous waste kg/t 147 -17%

Chemicals Management

Lonza’s product formulation skills, wide product regulatory assurance and global regulatory expertise provide us distinct competitive advantages in a world of increasingly strict chemical management regulations.

One challenging program is the European Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) initiative. To ensure continuing compliance and business, Lonza is in the process of registering all covered substances imported, manufactured and marketed in the European Union. New substances are registered before reaching the 1 ton per year (tpa) threshold. Pre-registered phase-in substances (mainly existing substances listed in the European Inventory of Existing Chemical Commercial Substances or EINECS) are registered in a tiered process based on volume and substance properties.

To date, Lonza has successfully registered all first-tier and second-tier chemicals. Registrations of third-tier chemicals (>1 tpa) are ongoing and are scheduled be completed before the 31 May 2018 deadline.

The REACH regulation sets a number of new and challenging requirements with respect to the use of chemical substances. Manufacturers or importers have to demonstrate the safe use of a substance for all of its identified uses. The uses are communicated and accessible to businesses and the general public.

At Lonza a team of more than 60 regulatory experts at locations in Europe, the Americas and Asia Pacific serve and support Lonza businesses globally to ensure compliance with existing regulatory requirements and to stay abreast of future requirements. Their expertise is also a great value to customers who incorporate our regulated ingredients in their end-use applications.

EHS Commitment

Lonza commits considerable resources to EHS activities. At the end of the reporting year, a total of 168 people (full-time equivalents), 1.7% of our employees, worked in the core EHS field, a percentage that has been fairly stable over the years. EHS operating costs amounted to CHF 58.5 million in 2016, 17% up on the previous year. Capital expenditure on EHS was CHF 38.6 million, equivalent to 0.9% of sales and 11% of the Group’s total investment in fixed assets.

About 70% of the EHS capital expenditure in 2016 was absorbed by the large chemical and pharmaceutical manufacturing complex at Visp and the related infrastructure. Examples are the extension of the limestone capacity for wastewater neutralization to ensure continued and efficient operation of the wastewater treatment plant, the replacement of parts of the steam turbine and its control equipment and the installation of technical overfill prevention systems in the fine chemicals tank farm area.

Three significant EHS-related investments at other sites in 2016 included the revamping and upgrading of the Verviers (BE) warehouse to state-of-the-art safety and protective standards, installation of new railcar and tank truck access platforms at the Rochester, NY (USA) plant, which represent a quantum leap in added safe working conditions; and last but not least, the replacement of the Freon refrigeration system at Braine (BE), a site that was successfully divested at the end of the reporting year.

Corporate Responsibility

Providing transparent evidence of corporate sustainability practices is part of our commitment to excellence. Most of this information is shared on our corporate website, and in addition we disclose climate data and activity assessments in the framework of the Carbon Disclosure Project for the benefit of our financial stakeholders and as an active participant in the UN Global Compact foundation. We also participate in and respond to a variety of customer and supplier targeted sustainability assessments and surveys.

As a company that makes pharmaceuticals, personal-care products, nutritional ingredients, drinking water sanitizers and hygiene disinfectants, we are sensitive to concerns about the use of animals to test the safety of these products for human use or consumption. Whenever possible, we do our utmost to promote the use of alternatives to animal tests; but in many cases, we are required by law and regulations to conduct such tests. Such required testing is conducted by external, state-of-the-art laboratories that Lonza approves and audits.

Lonza is accredited by the Association for Assessment and Accreditation of Laboratory Animal Care because we apply high standards for the humane care and use of laboratory animals. The company is also recognized by the U.S. National Institutes of Health Office of Laboratory Animal Welfare and complies with the Public Health Service Policy on Humane Care and Use of Laboratory Animals.

Our U.S. facilities are third-party certified under the Society of Chemical Manufacturers and Affiliates (SOCMA) ChemStewards™ initiative. Lonza Ltd in Switzerland is a Responsible Care® company, and our facility in Nansha (CN) is certified under both ISO 14001 and OHSAS 18001. All of our facilities adhere to the Lonza EHS management system, which is based on the ChemStewards™ program and addresses all aspects of environment, health, safety and security.

Industrial Heritage at the Swiss Manufacturing Site

In 2016 Lonza’s large site in Visp (CH) made progress as planned to address mercury contamination in an old wastewater discharge canal (“Grossgrundkanal”), on surrounding soil near the canal and in certain other areas where canal sediments were deposited as fill many decades ago. This industrial legacy traces back to when Lonza used large amounts of mercury as a catalyst in chemical processes, and the site discharged industrial wastewater with mercury-containing effluent into the canal between 1930 and the mid-1970s.

Various parties were involved in the maintenance of the publicly owned canal by dredging and excavating sediments from the waterway. At times when neither the awareness nor the environmental legislation was on today's level, parts of the removed material were used as fill material on various land properties. Only during the 1970s did the communities and the people become aware of the full problem in connection with mercury. In 1976 Lonza commissioned our wastewater treatment plant, where mercury-containing effluent has subsequently been treated.

Since 2013 Lonza has worked closely with the communities in pre-financing all required technical investigations in residential areas and agricultural zones between Visp and Niedergesteln. In 2016 two contaminated areas were selected as a pilot remediation project and successfully demonstrated the effectiveness of the chosen and approved approach.

We are now preparing for the remediation activities in all inhabited areas within the concerned perimeter, which are planned to begin in the summer of 2017. The procedure is challenging as no remediation activity is allowed to start without written consent of the competent cantonal and communal authorities and all concerned land owners.

Neither historically nor in the recent past have adverse health effects to humans or animals been linked to the mercury contamination found in the investigated region. To obtain a scientific evaluation on possible health effects, an epidemiological study by experts of the University of Zurich was conducted through 2015; their study confirmed that no evidence for adverse health effects exists.

Lonza, the Canton of Valais, the municipalities and other parties involved are continuing their efforts to solve the mercury issue. Besides remediation pre-financing, Lonza also continues the voluntary pre-financing of any required additional technical investigation, without prejudice, because we recognize the need for a quick and efficient rehabilitation, in particular in the residential areas.

Goals

The 2016-2020 medium-term sustainability goals, which were endorsed by Lonza’s executive management in 2015, became effective with the beginning of the reporting year 2016.

These medium-term goals include a 40% reduction of the 2015 safety target of the former cycle and a 10% reduction of environmental and resource rates achieved by the end of 2015. The decision to apply relative goals (rates) was made on the basis of the challenges related to the business portfolio and the asset portfolio that lie ahead.

These goals include direct (scope-1) and indirect (scope-2) greenhouse gas emissions (GHG), other established lead parameters for air emissions, as well as the resource parameters of energy and water consumption.

After a comprehensive data review early in 2017, Lonza restated the 2015 status and the thereof-derived environment and resource-related medium-term goals 2020.

Medium-Term Goals for 2020

Safety 1

    Goal 2020 Achieved 2016 Status 2015
LTIFR 2 (frequency) LTI/mn hrs 0.6 1.42 1.44

 

Environment 1

    Goal 2020
restated
Achieved 2016 Status 2015 restated
CO2e (scope 1+2)3 t/mn CHF 166 183 185
Air impurities 4 kg/mn CHF 173 187 192

 

Resources 1

    Goal 2020
restated
Achieved 2016 Status 2015 restated
Energy (total) GJ/mn CHF 2300 2500 2550
Industrial water m3/mn CHF 1720 1750 1910

 

Energy

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Greenhouse Gas Emissions

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Occupational Accidents

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Air Impurities

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Final Treatment of Special Waste

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Waste Categories

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